Govt to infuse Rs 907 cr in Dena Bank, Vijaya Bank

NEW DELHI: The government will infuse Rs 907 crore as equity capital into two PSU lenders — Dena Bank and Vijaya Bank — as part of recapitalisation package to shore up equity capital.

"The bank is in receipt of communication from the government conveying its decision to infuse Rs 539 crore by way of preferential allotment of equity...," Dena Bank said in a filing to the Bombay Stock Exchange.

Further, Vijaya Bank would get Rs 368 crore as capital from the government and a board meeting in this regard would be held on February 22.

Yesterday, UCO Bank and United Bank of India , had also said that they will get a capital infusion of Rs 1,248 crore from the government.

While UCO Bank would get an infusion of Rs 940 crore, Kolkata-based United Bank would get Rs 308 crore.

Beside, Allahabad Bank and Chennai-based Indian Overseas Bank will have their board meetings on February 18 and February 19, respectively to consider preferential allotment of equity shares to the government of India.

However, the quantum of capital infusions in these two banks are not known yet.

Finance Minister Pranab Mukherjee had announced capital infusion of Rs 15,000 crore into public sector banks during the current fiscal to ensure that these entities are able to attain a minimum 8 per cent Tier-I capital by March 31, 2011.

As part of recapitalisation, the government had infused Rs 6,211 crore into five banks. The banks, which had got capital support from the government in the first tranche included Union Bank of India , Bank of Maharashtra , IDBI Bank , UCO Bank and Central Bank India.

Besides, the government also approved additional capital infusion of Rs 6,000 crore in 10 public sector banks with an objective to raise its holding to a minimum 58 per cent in all state-run banks.

The proposed capital infusion is to enhance the lending capacity of the state-owned banks to meet the credit requirement of the economy in order to maintain and accelerate the economic growth momentum.

Source: Economic Times