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Govt infuses Rs 3,800 cr in 3 banks
February 11, 2009 15:06 IST
The government announced on Wednesday a Rs 3,800-crore (Rs 38-billion) fund infusion into state-run lenders -- UCO Bank [Get Quote], Central Bank of India [Get Quote] and Vijaya Bank [Get Quote] -- to soar up their capital adequacy.
Under the recapitalisation package Central Bank of India will get Rs 1,400 crore (Rs 14 billion), while UCO Bank and Vijaya Bank will get Rs 1,200 crore (Rs 12 billion) each, home minister P Chidambaram told reporters after the Cabinet meeting in New Delhi.
The capital infusion would be done in two tranches, he said, adding the first tranche would be made available during the current fiscal and the remaining in 2009-10.
As part of the first tranche, UCO Bank will get Rs 450 crore (Rs 4.5 billion), while Central Bank of India and Vijaya Bank will get Rs 700 and Rs 500 crore (Rs 7 billion and Rs 5 billion), respectively, in the current fiscal.Spelling out the reason for the capital infusion, Chidambaram said, this will help banks raise capital adequacy over 12 per cent much above the Basel II norms of 9 per cent. In the next tranche, UCO Bank will get Rs 750 crore (Rs 7.5 billion), while Central Bank of India and Vijaya Bank to get Rs 700 crore (Rs 7 billion) each, he said.
The amount would be form a part of tier I capital, he said, adding the infusion would increase the government holding in the three state-run banks.
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