The Hindu : Business : Cabinet clears UBI write-off

Online edition of India's National Newspaper
Wednesday, Apr 19, 2006

Business

Business

Cabinet clears UBI write-off

Special Correspondent

NEW DELHI: The Cabinet on Tuesday decided to write off the entire Rs. 278.44-crore accumulated losses of United Bank of India (UBI). With a clean balance-sheet, the Kolkata-headquartered bank moves a step closer towards a possible initial public offering (IPO).

Briefing newspersons after the Cabinet meeting, Minister for Science and Technology Kapil Sibal said, "The Cabinet approved write-off of accumulated losses of United Bank of India, amounting to Rs. 278.44 crore against the capital of Rs. 1,810.87 crore with effect from March 31, 2006.''

As per the write-off programme, UBI is to return equity share capital of about Rs. 700 crore to the Government and convert a portion of the remaining equity share capital of around Rs. 832.43 crore into preference shares.

"The exact amount of the portion to be converted will be decided in consultation with the bank [UBI] and [the] Reserve Bank of India,'' Mr. Sibal said.

The Cabinet decision to write-off the losses, he said, would strengthen the balance sheet of the bank as also facilitate adoption of Basel-II norms. It would help create `Investment Fluctuation Reserve (IFR)', as per RBI guidelines, and assist the bank in meeting future capital requirements through IPO, Mr. Sibal said.

Printer friendly page
Send this article to Friends by E-Mail