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Central Bank Of India EGM In May To Seek Shareholders' Nod For Allotting Preference Shares To Govt

The bank's CRAR (capital to risk weighted assets ratio) as on December 31, 2020 was 12.39 per cent with tier I/CET 1 at 10.32 per cent and tier II at 2.07 per cent.

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Public sector Central Bank of India (CBI) has convened an extra-ordinary general meeting (EGM) next month to seek shareholders' approval to allot preferential shares to the government for equity capital infusion of Rs 4,800 crore in 2020-21.

The extra-ordinary general meeting of the shareholders of Central Bank of India will be held on Tuesday, May 18, 2021 at head office in Mumbai through video conferencing and other audio visual means, the bank said in a regulatory filing on Tuesday.

The lender seeks to allot 280,53,76,972 equity shares of face value of Rs 10 each to the government on preferential basis at an issue price of Rs 17.11 per equity share, including premium of Rs 7.11 a share, aggregating to Rs 4,800 crore, Central Bank of India said.

The bank proposes to raise the funds by way of issue and allotment of equity shares in order to augment further equity capital and improve core capital (CET 1), it said.

The bank's CRAR (capital to risk weighted assets ratio) as on December 31, 2020 was 12.39 per cent with tier I/CET 1 at 10.32 per cent and tier II at 2.07 per cent.

Earlier in March, government had approved release of Rs 4,800 crore to CBI as its investment during financial year 2020-21.

The bank received the capital on March 31, 2021 and the same was kept in 'share application money account'.

'The infusion of equity by government would also give additional leverage to the bank to raise further equity capital from the public/financial institutions by way of rights issue/FPO/qualified institutional placement (QIP) at a later date as and when the need arises,' it said.

The capital to be raised through this preferential allotment of equity will not be used for making investment in any of its subsidiaries, joint ventures etc, said the lender.

The government's shareholding in the bank stands at 89.78 per cent as on date and it will go up to 93.08 per cent post the allotment of the preferential shares.

Central Bank of India said it will allot the shares to government within 15 days from the passing of the resolution by the shareholders.

Stock of the bank closed flat at Rs 16.25 apiece on BSE.

(PTI)