Allahabad Bank today obtained board approval for raising capital from various means including Qualified Institutional Placement (QIP).
The board at its meeting held today have discussed and approved in principle the raising of capital of the bank through preferential or QIP issue, Allahabad Bank said in a statement.
Funds would be raised in such a manner that the equity shareholding of the Government of India will not go below 52 per cent.
The government holding in the Kolkata-based banks stood at 58.90 per cent at the end of September 2014.
Keeping the huge capital requirement in the mind, the Union Cabinet earlier this month, allowed public sector banks to raise up to Rs 1.60 lakh crore from markets by diluting government holding to 52 per cent in phases so as to meet Basel III capital adequacy norms.
Finance Minister Arun Jaitley in the first Budget speech had said: “To be in line with Basel-III norms there is a requirement to infuse Rs 2.40 lakh crore as equity by 2018 in our banks. To meet this huge capital requirement we need to raise additional resources to fulfil this obligation.”
While preserving the public ownership, the capital of these banks will be raised by increasing the shareholding of the people in a phased manner through the sale of shares largely through retail to common citizens of this country, he had said.
The bank’s stock closed at Rs 126, up 1.98 per cent, on the BSE.
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.