Bank of India gets capital infusion worth Rs 2,257 crore from government

 BusinessToday.in   New Delhi     Last Updated: December 30, 2017  | 17:16 IST
Bank of India gets capital infusion worth Rs 2,257 crore from government

The Bank of India has received capital infusion of Rs 2,257 crore from the government. The state-run bank disclosed the nature and purpose of the received funds in a regulatory filing today.

"The bank has on December 29 received infusion of Rs 2,257 crore from the Government of India, in form of Common Equity Tier-1 Capital, which is being kept as Share Application money and would be alloted after due procedure/conditions for allotment," Bank of India said in a BSE filing.

The Bank of India has outlined a turnaround plan to come out of the sanctions imposed by the Reserve Bank of India under the Prompt Corrective Action (PCA) framework. The PSB the bank can no longer issue fresh loans as well as distribution of dividends. Under this plan, the bank has decided to shut down some of its ATMs to cut operation costs.

The government had on October 24 unveiled a Rs 2.11 lakh crore two-year roadmap for strengthening NPA-hit public sector banks. The plans includes re-capitalisation bonds worth Rs 1.35 lakh crore, budgetary support and equity dilution over the course of two years. The additional funding is expected to supplement the financial condition of NPA-ridden public sector banks, whose NPA assets increased to Rs 7.33 lakh crore as of June 2017 from Rs 2.75 lakh crore in March 2015.

Besides recapitalisation bonds, the finance minister had announced that banks would get about Rs 18,000 crore under the Indradhanush plan over the next two years. Under the Indradhanush road map announced in 2015, the government had announced infusion of Rs 70,000 crore in state- owned banks over four years while they will have to raise a further Rs 1.1 lakh crore from the market to meet their capital requirement in line with global risk norms, known as Basel-III.

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