New Delhi: Bank of Baroda (BoB) expects to receive Rs 7,000 crore-Rs 8,000 crore from the government in the next phase of bank recapitalisation, a top banking source said on Tuesday.
The state-run lender would require this capital to take over Dena Bank, which is currently reeling under the Reserve Bank prompt corrective action, the source added.
Bank of Baroda already requested for fund infusion when its merger with other two public sector banks —Dena Bank and Vijaya Bank — was announced in November, the source mentioned.
"We had asked for Rs 7,000 crore-Rs 8,000 crore from the government, as Dena Bank is a very weak bank and we also needed money as growth capital," the source, who didn't wish to be identified, said.
Dena bank reported a loss of Rs 416 crore in the July-September quarter against the loss of Rs 185 crore in the same period of FY18. Its net non-performing assets also widened to 11.70 per cent in the second quarter over the previous quarter.According to the finance ministry sources, the government is likely to assess the quarterly results of the public sector banks before announcing another tranche of capital infusion. Recently, the government infused Rs 28,615 crore into seven banks--Central Bank of India, United Bank of India, Bank of India, Bank of Maharashtra, Syndicate Bank, Uco Bank and Oriental Bank of Commerce.
The government announced enhanced capital infusion of Rs 1.06 lakh crore in the current fiscal. It sought parliamentary approval for the additional capital infusion of Rs 41,000 crore apart from Rs 65,000 crore earmarked for the current fiscal.