News Digest

04 January 2018
Three public sector banks get nod to raise Rs2,348

State-run lenders Bank of Maharashtra, Central Bank of India and UCO Bank on Wednesday got board approvals to raise a total of Rs2,348 crore by selling shares to the government, exchange filings by these banks showed. This comes after the government informed each of these banks on 28 December that it has allocated capital to them. According to an executive director of a state-run bank, who spoke under condition of anonymity, this allocation is under the 2015 Indradhanush plan, for which the government has made budgetary allocation of Rs20,000 crore in bank recapitalisation over this fiscal year and the next. Banks, especially state-owned lenders, are need in of capital to not only meet regulatory requirements under the so-called Basel III norms, which will be fully implemented from April 2019, but also to clean up their stressed balance sheets. Indian banks are sitting on stressed asset pool of over Rs10 trillion. With these three banks, the government has now allotted a total of Rs7,577 crore to six public sector banks, all of whom are under the Reserve Bank of India's prompt corrective action (PCA). The other three banks are IDBI Bank, Dena Bank and Bank of India. Of these, IDBI Bank has got the highest allocation of Rs2,729 crore.

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