The Government of India has announced a Rs. 3800 crore (Rs. 38 billion) fund infusion into state run banks, UCO Bank, Central Bank of India and Vijaya Bank to increase their capital adequacy.
Under the recapitalization package, Central Bank of India will get Rs 1,400 crore, while UCO Bank and Vijaya Bank will get Rs 1,200 crore each, said home minister P. Chidambaram. He added that the infusion will be done in two steps, where the first will be in the current fiscal year and remaining in financial year 2009~10. The amount will form a part of Tier I Capital and adding the infusion will increase the government holding in the three state-run banks.
In the first stage, UCO Bank will get Rs 450 crore, while Central Bank of India and Vijaya Bank will get Rs 700 and Rs 500 crore, respectively. This will help the banks to raise their capital adequacy over 12%, much above the Basel II norms of 9%.