State-managed lender Dena Bank has come to a
decision to get its board’s support to water down its government share to 52
percent. The bank has notified the exchanges. The government as of now owns 65
percent equity in the bank. The goal is to escalate equity capital of the bank
by bringing down government holding up to 52 percent, on procuring required
authorization from the government.
The government has permitted public sector
lenders to dilute its share up to 52 percent to meet investment requisites.
Public banks are in dire need of resource provisioning towards bad loans and
credits, which have hiked abruptly in the last three years among a decelerating
economy. Our law dictates a minimum government holding of 51 percent in all
public banks. The government intend to permeate INR 25,000 crore this fiscal
and in 2016 - 2017 into these banks. Some banks have allotted equity shares to
the government in lieu of capital infusion. The government also aims to infuse
INR 70,000 crore equity into the public banks over four years to hold up their
resource base to meet Basel norms.
