The government today approved a proposal to restructure the paid-up capital of United Bank of India, a public sector bank.
According to the proposal, the paid-up capital will be reduced by more than 80 per cent, to Rs 266.43 crore. The surplus capital of Rs 1,266 crore would be parked in capital reserves of the bank.
In addition, the government will also invest Rs 800 crore in Tier-1 capital instruments, in two tranches of around Rs 250 crore in 2008-09 and nearly Rs 550 crore in 2009-10. This will help the bank to meet its capital adequacy norms. “The restructuring of the paid-up capital would improve key financial indicators of the bank and additional capital funds would enable the bank extend more credit to the productive sectors of the economy,” said Home Minister P Chidambaram.
The government today also approved Rs 1,540.87 crore Vote on Account for Meghalya for the first four months of the fiscal.
