With the public sector bank being earlier put under prompt corrective action (PCA) by the Government of India for their net losses caused by bad loans, the Government of India has offered stability to Allahabad Bank with a fresh capital infusion amounting to Rs.30.5 billion. According to the bank, the confirmation of the capital infusion was made by the Ministry of Finance.
In addition, the bank was reported saying that the Finance Ministry will announce the second round of capital infusion by the end of the month – based on their performance of the previous quarter. The second round of funding will set the foundation for the public sector banks to meet their lending requirements. According to Business Standard, the Government of India has already allocated Rs.113.37 billion as capital infusion for 5 public sector banks.
Apart from Allahabad Bank, Punjab National Bank, Corporation Bank, Indian Overseas Bank, and Andhra Bank have received capital infusion from the Government of India. The Government has planned capital infusion for ailing public sector banks amounting to Rs.2.11 trillion over the course of the next couple of financial years.
Source: Business Standard