Allahabad Bank to get 670 Cr from Govt

Allahabad Bank will receive 670 crore as fresh equity from the government before March, to raise the government holding in the bank to 58% from 55.23%. The bank will preferentially allot 2, 95, 15,418 equity shares of Rs. 10 each at a premium of Rs. 217 per share to the government against the capital injection. Consequently, its tier-I will improve to 8.23% at the end of the fiscal.

The capital dose will provide the banks much larger headroom to raise capital through follow-on public offer. As per the extant guidelines, government holding in public banks can’t go below 51%, the norm which restricts equity-raising capacity for many banks like Allahabad Bank, Dena Bank or Union Bank of India, wherein the government holding has come close to the stipulation. crackcrack