Five state-owned banks, including Punjab National Bank, Bank of Baroda and Union Bank, on 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. The capital infusion is for the current fiscal ending March 31, 2019.
Punjab National Bank (PNB) in a regulatory filing said that an extraordinary general meeting of shareholders was held on March 28 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.”
The board of the Chennai-headquartered Indian Overseas Bank (IOB) in an extraordinary general meeting decided to allot preferential shares to 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 per cent to 92.52 per cent in the bank, it added.
Central Bank of India allotted 68,72,48,322 equity shares at Rs 37.25 aggregating up to Rs 2,560 crore.
With this allotment, shareholding of government has increased from 89.40 per cent to 91.20, Central Bank of India said.
The government last December announced fund infusion of Rs 83,000 crore in public sector banks by March-end as it sought to increase its capital commitment to partly make up for the lenders’ shortfall in fund raising from markets.
Capital infusion was aimed at enabling banks to meet regulatory norms, allowing better-performing PCA banks to achieve 9 per cent capital adequacy ratio, strengthening merging banks such as the recently merged Bank of Baroda-Vijaya Bank-Dena Bank combine and prevent non-PCA banks, such as Punjab National Bank, that are on the borderline from coming into the framework.
As against planned capital infusion of Rs 65,000 crore in the current financial year, public sector bank got a total of Rs 1.06 lakh crore for the current financial year.—WITH PTI