The government has announced an infusion of Rs 14,500 crore into 4 state-owned banks to shore up their capital base.
As per Govt notification Central Bank of India, Indian Overseas Bank, Bank of India and UCO Bank will receive the funds through zero-coupon bonds, an instrument that RBI had flagged concerns on using while calculating capital base for banks.
All these lenders, except Bank of India, are under the Reserve Bank of India’s sanctions as their bad loans have been on the rise. In December, the government had infused Rs 5,500 crore into Punjab and Sind Bank.