State-run Indian Bank, which carried an accumulated loss of Rs 18,975.53 crore due to amalgamation of Allahabad Bank with it, will be setting off the loss with the share premium account balance, according to a regulatory filing.
During an extraordinary general meeting held on Monday, shareholders of the lender passed the resolution to utilise Rs 19,833.15 crore balance of the share premium account to set off the accumulated loss, it said.
ICRA Ratings has said that the recent proposal by some public sector banks (PSBs) to set-off their accumulated losses against the share premium account balances could improve the ability of these PSBs to service their AT-I bonds.
This adjustment will not impact the net worth and capital ratios of these banks, the rating agency added.
AT-1 bonds are a type of unsecured, perpetual bonds that banks issue to shore up their core capital base to meet the Basel-III norms.