Indian Govt. To Infuse Rs.3.8K Cr. Into Three PSBs For Re-Capitalization

The Indian Cabinet approved on Wednesday a re-capitalization package under which, the government would infuse Rs.3,800 crore in three public sector banks, the UCO Bank, Central Bank of India and Vijaya Bank, reported the PTI. This would help the banks to have more than adequate capital against various risks.

The Home Minister P. Chidambaram reportedly said that the government would infuse Rs 1,650 crore into these banks this fiscal and Rs 2,150 crore in 2009-10. Central Bank of India would get Rs.1, 400 crore and UCO Bank and Vijaya Bank would get Rs.1,200 crore each in tranches.

This fiscal, Central Bank would get Rs.700 crore initially and Vijaya Bank Rs.500 crore and UCO Bank Rs.450 crore. In the next tranche, UCO Bank will get Rs 750 crore, while Central Bank of India and Vijaya Bank will receive Rs 700 crore each.

He further said that the capital infusion would help the banks raise capital adequacy to over 12%, much above the Basel II norms of 9%. He said the amount would form a part of Tier I Capital, adding that the infusion would increase the government holding in the three state-owned banks.