Public lender Union Bank of India’s board of directors has given their final nod to the merger of Andhra Bank and Corporation Bank with itself and agreed for a capital infusion of Rs 17,200 crore in the current financial year.
The decision pertaining to the approval on the merger and capital infusion was made during a meeting of the board of directors, said the bank in its regulatory filing.
“The board has considered and given its in-principle approval for the amalgamation of Andhra Bank and Corporation Bank into Union Bank”, said the bank.
“And, (the board also) approved the revised capital plan for 2019-20 to raise capital funds by an amount not exceeding Rs 17,200 crore within which up to Rs 13,000 crore through equity capital and up to Rs 4,200 crore through additional tier I/II bonds,” it said.
The lender also gave approval to the capital raising by issuing equity shares via preferential allotment to the government centre for an amount up to Rs 13,000 crore, subject to other regulatory approvals.
On August 30, Union Finance Minister Nirmala Sitharaman had announced a mega amalgamation of public sector banks, as per which the number of such banks would now come down to 13 from 19 at present.