Union Bank plans to raise Rs 3000 cr equity to comply Basel-III norms

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Union Bank plans to raise Rs 3000 cr equity
Public-sector lender, Union Bank of India has planned to raise Rs 3000 crore in equity, in order to meet the Basel-III norms after 2015.

"Till 2015, with the present growth we may not require any additional capital as per Basel-3. After that we have to increase the capital. We may need additional Rs 3,000 crore to meet the Basel requirement," Union Bank, Chairman and Managing Director, D Sarkar told media.

In accordance with Basel III norms, Indian banks will have to maintain their capital adequacy ratio at 9 per cent as against the minimum recommended requirement of 8 per cent.

Besides, the Basel-III capital regulation has been implemented from April 1, 2013, in India in phases and it will be fully implemented as on March 31, 2018.

Moreover, in respect to the above, the bank has given a proposal the Ministry of Finance for the additional capital and it is currently being studied, added the media report.

"This year we have proposals to raise Rs 1,216 crore though Qualified Institutional Placement (QIP) route. With that the government's shareholding in the bank will come down. In order to meet the shareholding at the current level, the government will have to infuse Rs 1,708 crore additional capital," the bank official told media.

Story first published: Monday, August 5, 2013, 9:21 [IST]
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