Govt okays capital-restructuring of UBI

The government on Monday approved restructuring of state-owned United Bank of India's capital, which includes reduction in paid-up equity by over 80 per cent to improve its financial parameters.

Besides, the government will infuse a sum of Rs 800 crore (Rs 8 billion) into the bank to enable it to provide more capital to productive sectors.

The paid-up equity capital of the bank will be reduced to Rs 266.43 crore (Rs 2.66 billion), Home Minister P Chidambaram told reporters after a Cabinet meeting which took this decision.

The government will take back excess paid-up capital of Rs 1,266 crore (Rs 12.66 billion) and simultaneously will infuse this amount in the capital reserves of the bank.

Earlier in 2006, the Cabinet allowed United Bank to write off its accumulated losses of Rs 278.44 crore (Rs 2.78 billion) against the capital of Rs 1,810.87 crore (Rs 18.10 billion).