Central Bank, BoM on fund raising plans

Stocks of public sector banks — Central Bank of India and Bank of Maharashtra – are likely to see higher activity on fund raising plans. The Finance Ministry said last week that state-owned banks can now increase capital while issuing preference shares, rights issues or bonus shares without being limited by the earlier ceiling of Rs 3,000 crore. The restriction has been removed following the passage of the Banking Laws (Amendment) Bill 2012 in Parliament. Following this, boards of Bank of Maharashtra and Central Bank of India had approved fund raising plans last week. The banks plan to issue equity shares of face value of Rs 10 each on preferential basis to the Union Government and/or other interested and eligible shareholders such as qualified institutional buyers.