 "Govt to convert Rs 400-crore PNCPS in Indian Bank to equity")
The government will convert perpetual non-cumulative preference shares (PNCPS) which it holds in Indian Bank to equity shares. This would enable the bank to meet the Basel-III requirements.
According to the bank, its paid-up capital includes PNCPS worth Rs 400 crore, consisting of 4,00,00,000 shares of Rs 100 each, with a coupon benchmarked to the repo rate on the relevant date. The entire PNCPS were held by the central government.
The bank said the PNCPS would not be reckoned for 100 per cent weightage under Tier-I capital, according to Basel-III norms. The bank had requested the government to consider the proposal for conversion to meet the Basel-III requirements.
Indian Bank said that the government, on January 06, 2014, conveyed approval for conversion of PNCPS into equity shares subject to approval of shareholders, Sebi and other authorities.
The conversion of PNCPS into equity will not result in any outflow to the Government of India.
According to the bank, its paid-up capital includes PNCPS worth Rs 400 crore, consisting of 4,00,00,000 shares of Rs 100 each, with a coupon benchmarked to the repo rate on the relevant date. The entire PNCPS were held by the central government.
The bank said the PNCPS would not be reckoned for 100 per cent weightage under Tier-I capital, according to Basel-III norms. The bank had requested the government to consider the proposal for conversion to meet the Basel-III requirements.
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The conversion of PNCPS into equity will also create headroom for raising Basel-III compliant bonds under Tier I/Tier II Capital and also issuing of equity through Qualified Institutional Placement/Follow-on Public Offers.
Indian Bank said that the government, on January 06, 2014, conveyed approval for conversion of PNCPS into equity shares subject to approval of shareholders, Sebi and other authorities.
The conversion of PNCPS into equity will not result in any outflow to the Government of India.