Allahabad Bank on Thursday said the Centre is infusing Rs 3,054 crore into it as an investment during the current fiscal.
In a stock exchange filing, the lender said, “…the bank has received a communication from the government of India, ministry of finance, department of financial services, regarding a fresh capital infusion of Rs 3,054 crore towards contribution of the central government in the preferential allotment of equity shares (special securities/bonds) of the bank during the financial year 2018-19, as government’s investment.”
The bank’s capital adequacy ratio as per Basel-III stood at 6.88 per cent as on June 30, 2018. The government owned a 71.81 per cent stake in Allahabad Bank at the end of first quarter of FY19.
Notably, the Reserve Bank of India had imposed additional restrictions on the bank under the Prompt Corrective Action framework in May this year.
The central bank had asked the lender to restrict expansion of risk-weighted assets (RWA), reduce exposure to high-risk loans and restrict accessing or renewing wholesale deposits.
The public sector bank reported a net loss of Rs 1,944.37 crore for the first quarter this fiscal against a net profit of Rs 28.84 crore during the same period last fiscal as the lender saw a 29 per cent fall in its operating profit and a 53.6 per cent rise in provisions to cover sticky loans.
The bank, however, pruned the losses substantially on a quarter-on-quarter basis. Its net loss for the fourth quarter last fiscal had stood at Rs 3,509.63 crore. —FE