Government plans Rs1,200-crore capital infusion in Vijaya Bank
26 Mar 2009
The government will infuse Rs1,200 crore into Vijaya Bank in two tranches of Rs500 crore and Rs700 crore over the current and the next fiscal to shore up its capital against overall risks.
''The government has proposed to subscribe a sum of around Rs1,200 crore in innovative tier I capital instruments in the bank in two tranches of Rs700 crore and Rs 500 crore in the years 2008-09 and 2009-10 respectively,'' the bank informed the Bombay Stock Exchange.
The Government of India holds a majority stake in Vijaya Bank and the fresh infusion in innovative Tier I capital instruments will bolster its stake in the bank.
''The issue of perpetual non-cumulative preference shares (PNCPS) at an annual floating rate will be benchmarked to the Repo Rate with a spread of Rs100 basis points to be readjusted annually based on prevailing Repo Rate on the relevant date,'' the bank said in a filing with the BSE.
The total paid-up capital of the bank will go up to Rs933.52 crore (paid-up equity capital of Rs433.52 crore and perpetual non-cumulative preference shares of Rs500 crore) after the release of the first tranche of Rs500 crore by the government, Vijaya Bank has an authorised capital of Rs1,500 crore.
The issue is being made as per guidelines of the Reserve Bank of India. These shares will not be traded on the stock exchanges.
