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Sunday, February 20, 2011

SBI, UCO Bank, IOB approve capital raising

MUMBAI: Three Indian state-run banks said on Saturday they would preferentially allot shares to the government in return for capital infusion.

In December, India's cabinet approved additional capital infusion of 60 billion rupees ($1.3 billion) into state-run banks to hike their capital adequacy and to lift the government's stake in them.

The funds are in addition to 150 billion rupees of infusion provided for in the February 2010 budget.

State-run Indian Overseas Bank said its board had approved issuing shares worth 10.54 billion rupees ($233 million) to the government, at a price to be determined later, in a statement to the stock exchange.

Separately, UCO Bank said it would issue shares worth 9.04 billion rupees, while United Bank of India said it would issue shares worth 3.08 billion rupees.

Several other state-run banks are also expected to approve the fund infusion over the next few days.

The Indian government is expected to infuse $3.3 billion into the country's largest lender State Bank of India in the next fiscal year via a rights issue.

Source: EconomicTimes


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