As part of the recapitalization plan to bolster capital adequacy ratio, the finance ministry has approved the proposal of infusing Rs. 7,577 crore in 6 weak public sector banks (PSBs), reported PTI.
All of these banks that would be receiving capital support are under the prompt corrective action of the RBI. The funding is a part of Indradhanus plan of the government which promised Rs 70,000 crore over a period of four years ending March 2019.
The actual fund infusion will happen in a few weeks after necessary regulatory approval and nod from the shareholders. The lending banks will receive a capital through preferential shares.
UCO Bank announced today that it would issue equity shares on preferential basis to the government against the capital contribution of Rs 1,375 crore subject to necessary approval.
Besides, the government will infuse Rs. 323 crore in Central Bank of India, Rs. 2,257 crore in Bank of India, Rs. 2,729 crore in IDBI Bank, Rs. 650 crore in Bank of Maharashtra, and Rs. 243 crore in Dena Bank.
Jaitley had also announced that banks would get about Rs 18,000 crore under the Indradhanush plan over the next two years.