Canara Bank Board To Consider Rs 9,000 Crore Fund Infusion On Sept. 13

The board of directors of Canara Bank will meet next week to consider capital infusion of up to Rs 9,000 crore through issuance of preferential equity shares to Government of India, the public sector bank said on Wednesday.

The board will also consider the proposed merger of Canara Bank and Syndicate Bank.

"A meeting of board of directors of the bank is scheduled to be held on Sept. 13, 2019, to consider the amalgamation of Syndicate Bank into Canara Bank and to consider capital infusion up to Rs 9,000 crore by Government of India by way of preferential issue of equity shares subject to necessary approvals," Canara Bank said in a filing.

On Aug. 30, Finance Minister Nirmala Sitharaman proposed four PSU bank mergers to reduce the number of public sector banks to 12 from 21. According to the plan:

• Punjab National Bank will take over Oriental Bank of Commerce and United Bank
• Canara Bank will take over Syndicate Bank
• Union Bank of India will take over Andhra Bank and Corporation Bank
• Indian Bank will be merged with Allahabad Bank

The PSU bank mergers would help in better management of capital, said Sitharaman while announcing the proposal as a part of wider reforms in India’s banking sector. She also announced a series of governance measures for public sector banks, in the hope that the capital infused by the government into the lenders would result in stronger banks.