Government has given fresh capital infusion of Rs 8,655 crore to the three loss making PSU Banks including Allahabad Bank, Indian Overseas Bank and UCO Bank.
As per the reports, the finance ministry has approved Rs 2,153 crore, Rs 2,142 crore, and Rs 4,360 crore to Allahabad Bank, UCO Bank Indian and Overseas Bank respectively.
Each bank had filed a separate regulatory on their capital infusion.
Two of the three banks, i.e. UCO Bank and the Indian Overseas Bank, are under the Reserve Bank of India’s (RBI) prompt corrective action (PCA) framework and the two are required to have net NPA below six per cent to get out of PCA.
“The Bank has received vide letter dated December 25, 2019 for release of Rs 4,360 crore towards contribution of the central government in the preferential allotment of equity shares (Special Securities/Bonds) of the Bank during 2019-20 as Government’s investment,” IOB said in a BSE filing.
Previously in August, the state-owned lender had received capital infusion of Rs 3,800 crore from the government, which was later increased by Rs 560 crore. On similar lines, the finance ministry had announced a capital infusion of Rs 2,142 crore in UCO Bank.
“Government of India, vide letter on December 26, conveyed their sanction for release of capital of Rs 2,142 crore towards contribution of the Central Government in the preferential allotment of equity shares of UCO Bank,” UCO Bank said.
These infusions by the government are a part of the Rs 70,000 crore recapitalisation, which was announced in the Budget by the Finance Minister Nirmala Sitharaman. She had first proposed the capital infusion in public sector banks in two phases. Of this amount, the government had so infused Rs 60,314 crore.
(With input from agencies)