New Delhi, Apr 5 (UNI) The Union Cabinet today gave its nod for writing off the accumulated losses of the state-run Indian Bank amounting to Rs 3,830.14 crore against its capital.
The losses will be written off against the bank's equity capital of Rs 4,573.96 crore, said Defence Minister Pranab Mukherjee after a cabinet meeting this evening.
The cabinet also gave its approval for converting a portion of the remaining equity share capital of Rs 743.82 crore of the bank into preference share capital in line with the Reserve Bank of India guidelines.
The cabinet proposal does not involve any financial burden on the government since it is only a technical write-off, said Mr Mukherjee.
Indian Bank, which is headquartered in Chennai, ran into losses in the late 1980s and most part of the 1990s before turning around in 1999-2000. The bank posted its first net profit since it started incurring losses in 2001-02.
The government had allowed 13 banks in the past to write off their accumulated losses against capital.
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