United Bank of India to get Rs 100 cr capital support

 

State-owned United Bank of India is likely to get Rs 100 crore fund infusion through preferential issue of shares to the government by end of next month.

The board of United Bank of India has already approved preferential allotment of shares to the government aggregating to Rs 100 crore, a senior official of the bank said.

The infusion of capital will be in the form of equity, the official added. This fund infusion is subject to shareholders approval, which will be sought on March 12 in an extra-ordinary General Meeting.

Last year, the bank got capital infusion of Rs 172.80 crore from the government. Last month, the government approved infusion of Rs 12,517 crore in around 10 state-owned banks over the next three months.

"Pursuant to the Budget announcement made by the Finance Minister on March 16, 2012, we are infusing additional capital into the public sector banks. We will infuse before the end of this fiscal year a sum of Rs 12,517 crore," Finance Minister P Chidambaram had said.

"We think about 9-10 banks will get the money. This will enable the banks to maintain the Tier I CRAR (capital to risk-weighted assets ratio) at a comfortable level and will be compliant to stricter capital adequacy norms of Basel III whenever Basel III is implemented," he had said.

The government infused about Rs 20,117 crore in public sector banks during 2010-11, and Rs 12,000 crore in 2011-12.