Allahabad Bank, UCO Bank, IOB get Rs 8,655 cr fund infusion

Three loss making PSU Banks -- Allahabad Bank, Indian Overseas Bank and UCO Bank - have got Rs 8,655 crore fresh capital infusion from the government.

The Finance Ministry has approved infusing fresh capital amounting to Rs 2,153 crore in the Allahabad Bank, Rs 2,142 crore in the UCO Bank and Rs 4,360 crore in the Indian Overseas Bank via preferential allotment of shares.

UCO Bank posted a loss of Rs 892 crore in Q2, Allahabad Bank a loss of Rs 2,103 crore and Indian Overseas Bank posted Rs 2,254 crore loss in July-September quarter.

All these banks, except the Allahabad Bank, are currently under the Reserve Bank of India's prompt corrective action (PCA) framework and they need to have net NPA below six per cent to get out of PCA which is a key criterion.

These banks filed separate regulatory filings on their capital infusion.

"We wish to inform that the Bank has received via letter on December 26 a sanction from Government of India for release of Rs 4,360 crore towards contribution of the Central Government in the preferential allotment of equity shares (Special Securities/Bonds) of the Bank during the financial year 2019-20 as Government's investment," the IOB said.

"Government of India, vide letter on December 26, conveyed their sanction for release of capital of Rs 2,142 crore towards contribution of the Central Government in the preferential allotment of equity shares of UCO Bank," the UCO Bank said.

These infusions are part of the Rs 70,000 crore recapitalisation announced in the Budget.

Finance Minister Nirmala Sitharaman had first proposed a capital infusion of Rs 70,000 crore in public sector banks in two phases. The government had so infused Rs 60,314 crore out of this.IANS