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Pune: The recapitalisation exercise of the public sector banks is likely to take off soon. There are indications that Bank of Maharashtra (BoM) could be among the banks that have been identified by the government for recapitalisation.
Early this year, the Center had sought $3.2 billion from the World Bank for recapitalisation of banks and the World Bank settled down to a $2-billion assistance for the state-run banks. This amount is expected to be disbursed to respective banks by March.
Home minister P Chidambaram, who was earlier the finance minister, had indicated early this year that the government would inject fresh capital into seven public sector banks to improve their financial health and help them achieve a capital adequacy ratio of over 12%.
BoM is expected to be one of the beneficiaries and expects to receive Rs 1,500 crore through the perpetual preference route from the Center over the next couple of years, senior bank officials said. “We had raised Rs 300 crore in September and expect to receive capital infusion of around Rs 1,500 crore,” CMD of the bank Allen Pereira said. The bank would receive Rs 800 crore in the first tranche and the balance would come in the second tranche, he said. This would bring the capital adequacy ratio to 14% and would give the bank necessary capital to do business.
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