Business Standard

Wednesday, December 25, 2024 | 11:59 AM ISTEN Hindi

Notification Icon
userprofile IconSearch

Govt to convert Rs 400-crore PNCPS in Indian Bank to equity

This would enable the bank to meet the Basel-III requirements

BS Reporter Chennai
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.
 

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.

Don't miss the most important news and views of the day. Get them on our Telegram channel

First Published: Jan 22 2014 | 12:01 AM IST

Explore News