PNB, Bank of Baroda, Union Bank, two other PSU lenders get capital infusion of Rs 21,428 crore from govt

The capital infusion will be by way of preferential allotment of equity shares of the bank during 2018-19, as government's investment, Bank of Baroda said

Press Trust of India March 29, 2019 07:38:59 IST
PNB, Bank of Baroda, Union Bank, two other PSU lenders get capital infusion of Rs 21,428 crore from govt
  • Bank of Baroda said the finance ministry informed about its decision to infuse capital of Rs 5,042 crore in the bank

  • The board of IOB decided to allot preferential shares to the government to get capital infusion of Rs 3,806 crore

  • The government's holding in IOB has increased from 89.39 percent to 92.52 percent in the bank

New Delhi: Five state-owned banks, including PNB, Bank of Baroda and Union Bank, Thursday received shareholders' approval for capital infusion to the tune of Rs 21,428 crore in lieu of preferential allotment of shares to the government.

This capital infusion is for the current fiscal ending 31 March, 2019.

Punjab National Bank (PNB) in a regulatory filing said that an extraordinary general meeting of shareholders was held on 28 March for obtaining shareholders' approval to issue and allot 80,20,63,535 equity shares at a premium of Rs 71.66 per share amounting up to Rs 5,908 crore on preferential basis to the government.

Bank of Baroda said the finance ministry informed about its decision to infuse capital of Rs 5,042 crore in the bank.

"The capital infusion will be by way of preferential allotment of equity shares (special securities/bonds) of the bank during 2018-19, as government's investment," Bank of Baroda said.

Union Bank said: "The Committee of Directors for Raising of Capital Funds (CDRCF) of the bank at its meeting held on Thursday considered and approved the allotment of 52,15,62,658 equity shares at an issue price of Rs 78.84 aggregating to Rs 4,111.99 to government in accordance with the applicable provisions."

PNB Bank of Baroda Union Bank two other PSU lenders get capital infusion of Rs 21428 crore from govt

Representational image. Reuters.

The board of the Chennai-headquartered Indian Overseas Bank (IOB) in an extraordinary general meeting decided to allot preferential shares to the government to get capital infusion of Rs 3,806 crore.

"The Board for Issue of Equity Share Capital at its meeting held today has issued and allotted 269,54,67,422 equity shares at an issue price of Rs 14.12 per equity share (including premium of Rs 4.12 per equity share) to government by way of preferential allotment," IOB said.

With this allotment, the government holding has increased from 89.39 percent to 92.52 percent in the bank, it added.

"This capital infusion will help the bank to shore up its capital adequacy requirements and enable the bank to build a robust loan book," R Subramaniakumar, MD & CEO, Indian Overseas Bank told PTI.

He also said that various initiatives have been taken by the bank for turnaround and there was a visible improvement in the bank's performance as seen in the third quarter results.

Subramaniakumar hoped that the bank will be able to return to the black in the next fiscal year beginning 1 April, 2019.

Earlier, the bank raised Rs 261 crore to its share capital in January under Employee Stock Purchase Scheme (ESPS) in which as much as 92 percent of the employees participated which resulted into over-subscription of bank stock.

"With this capital infusion and taking into account the capital raised through ESPS as well as sale of non core assets, CRAR (capital to risky asset ratio) will improve considerably," he said.

Central Bank of India allotted 68,72,48,322 equity shares at Rs 37.25 aggregating upto Rs 2,560 crore.

With this allotment, the shareholding of government has increased from 89.40 percent to 91.20, Central Bank of India said.

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