Cabinet OKS restructuring of equity capital of Central Bank

New Delhi, Nov 9 (UNI) The Cabinet today gave its go-ahead for converting Rs 800 crore of the equity capital of Rs 1,124.14 crore of the Central Bank of India into perpetual non-cumulative preference share capital at an annual floating coupon of 8 per cent.

The restructuring of the bank's equity would be benchmarked to the repo rate, at present at 7 per cent, besides spread of 100 basis points, which would be readjusted annually based on the prevailing repo rate on the relevant date, Union Finance Minister P Chidambaram told newspersons here.

The move is expected to shore up the balance sheet of the bank, besides providing it with flexibility to raise capital at a competitive cost, facilitate adoption of Basel II recommendations on capital requirement, meet its capital requirements for future growth and improve the bank's credit rating.

The public sector bank, set up in 1911, has paid up capital and reserves and surplus of the bank of Rs 1,124.14 crore and Rs 1,810.19 crore respectively as on March 31, 2006.

Its total business was of the order of Rs 105,677 crore with a total staff strength of 37,241.

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