New Delhi, Mar 28: Government will soon infuse additional capital of about Rs 5,050 crore in some public sector banks including UCO Bank and Syndicate Bank this week.
Parliament has already approved Rs 5,050 crore for meeting additional expenditure on recapitalisation of public sector banks earlier this month. The capital infusion by Finance Ministry in the identified banks would be done soon, which could be as early as this week itself, sources said.
Syndicate Bank and UCO Bank will be issuing shares to the government on a preferential basis to raise a total Rs 1,675 crore subject to regulatory approvals. UCO Bank said it will raise Rs 935 crore by issuing preferential shares to the government while Syndicate Bank will be raise up to Rs 740 crore through preferential allotment following board approval on March 31.
Besides UCO and Syndicate, other lenders which are contenders for the fresh round of infusion are Central Bank of India, Indian Bank, Oriental Bank of Commerce, Vijaya Bank and United Bank of India. It will be a part of the Rs 25,000 crore capital infusion plan earmarked for the current fiscal. In the first tranche, as many as 13 public sectors banks were given fund support of Rs 19,950 crore.
Of this, SBI got the highest amount of Rs 5,393 crore followed by Bank of India at Rs 2,455 crore. Besides, the government infused Rs 2,229 crore in IDBI Bank, Indian Overseas Bank Rs 2,009 crore and Punjab National Bank Rs 1,732 crore.
Last year, the government announced a revamp plan 'Indradhanush' to infuse Rs 70,000 crore in state-owned banks over four years, while they will have to raise a further Rs 1.1 lakh crore from markets to meet their capital requirements in line with global risk norms Basel-III.
In line with the blueprint, PSU banks will get Rs 25,000 crore this fiscal and also in the next fiscal. Besides, Rs 10,000 crore each would be infused in 2017-18 and 2018-19.