Centre to invest Rs 3,054 cr on Allahabad Bank.

Allahabad Bank on Thursday announced that the Centre is infusing Rs 3,054 crore into it as an investment during the current fiscal.

“In terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, we wish to inform you that the bank has received a communication from the Government of India, Ministry of Finance, Department of Financial Services regarding fresh capital infusion of Rs 3054 crore towards contribution of the central government in the preferential allotment of equity shares (special securities/bonds) of the bank during financial year 2018-19, as government’s investment,” Allahabad Bank said in a notification to the BSE.

Notably, the Reserve Bank of India (RBI) had imposed additional restrictions on the Allahabad bank under the Prompt Corrective Action (PCA) framework in May this year.

The central bank had asked the lender to restrict the expansion of risk-weighted assets (RWA), reduce exposure to high-risk loans and restrict accessing or renewing wholesale deposits.

The bank reported a net loss of Rs 1,944.37 crore for the first quarter this fiscal against a net profit of Rs 28.84 crore during the same period last fiscal.

Provisions and contingencies rose to Rs 2,763 crore during the April-June quarter, from Rs 1,335 crore in the year-ago period. Provisions for non-performing assets (NPAs) during the quarter came in at Rs 2,950 crore versus Rs 1,687 crore a year ago. Gross NPAs stood at 15.97% of the total advances against 15.96% in the previous quarter, while net NPAs were at 7.32% against 8.04%.

What's your take on this post ? Comment: