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Wednesday, February 23, 2011

Corp Bank, Syndicate Bank to get more funds

Karnataka-headquartered public sector lenders, Syndicate Bank and Corporation Bank have received the approval from the government to raise Rs 942 crore through preferential share allotment route.

While Syndicate Bank will raise Rs 633 crore, Corporation Bank will raise Rs 309 crore through preferential share allotment to the government. As per industry experts, this capital infusion will enable the banks to grow their credit portfolio by strengthening the tier-I capital adequacy ratio.

While capital adequacy ratio of Corporation Bank is at 8.10 per cent, it stands at just below eight per cent for Syndicate Bank.

Earlier, two more state-owned banks- Dena Bank and Vijaya Bank - said that they would get Rs 848 crore from the government, which will help them shore up their capital base and finance growth in loan portfolios. The Centre will infuse Rs 539 crore in Dena Bank and Rs 368 crore in Vijaya Bank by subscribing to their equity shares on a preferential basis.

Other two banks, which will receive capital from the government, are UCO Bank and United Bank of India.UCO Bank, which will get Rs 940 crore from the government, is the highest among the banks. The government will also infuse Rs 309 crore in United Bank of India through preferential share allotment process.

Present recapitalisation is part of the government initiative to select state-owned banks to help them maintain a tier-I capital adequacy ratio of over eight per cent by this financial year. In the budget speech last year, Finance minister had announced Rs 16,500 crore capital infusion programme for public sector lenders.

Source: Business Standard


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