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Bank of Baroda-Dena Bank-Vijaya Bank To Be Injected With Rs 5K Crore

Bank of Baroda-Dena Bank-Vijaya Bank To Be Injected With Rs 5K Crore

Sentinel Digital DeskBy : Sentinel Digital Desk

  |  23 March 2019 8:08 AM GMT

New Delhi: The Bank of Baroda may get Rs 5,000 capital infusion from the Finance Ministry ahead of its united operations as a merged entity along with the Vijaya Bank and Dena Bank from April 1.

In February, the government approved Rs 48,239-crore recap bonds in 12 PSBs. The latest recap bonds broadly fall into four categories: a) equipping better-performing PCA (prompt corrective action) banks to be above regulatory PCA thresholds to help them come out of the framework (Allahabad Bank, Corporation Bank, who have already come out of the PCA); b) Non-PCA banks that are close to the red line to ensure they don’t fall into PCA (Punjab National Bank, Union Bank, Syndicate Bank and Andhra Bank); c) PCA banks that have exited PCA to remain above PCA triggers (Bank of India, Bank of Maharashtra); d) And other PCA banks that need to meet minimum regulatory capital norms (Central Bank, United Bank, UCO Bank and Indian Overseas Bank).

The government has so far pumped Rs 1.90 lakh crore into PSBs since it announced the recapitalization plan in October 2017. The Finance Ministry has kept around Rs 5,000 crore as buffer for any last-minute contingency, for possible infusion into the merged entity of Bank of Baroda, Dena Bank and Vijaya Bank. The merger will create India’s third largest bank with a total business of over Rs 14.82 lakh crore. (IANS)

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