Srinagar: The Jammu and Kashmir Bank Ltd. (J&K Bank) is likely to receive Rs 250-crore capital infusion from the state government next week ahead of its scheduled recapitalisation in the next financial year, BloombergQuint quoting a senior state government official on the condition of anonymity reported Tuesday.
The infusion will be the first tranche of Rs 532-crore disbursal earmarked in the state Budget for financial year 2017-18. The second tranche of Rs 282 crore will be infused in the first half of April 2017, the report quoting official further said.
The government has already kept a provision of Rs 250 crore in its revised budget estimate for financial year 2016-17, he added.
The government is looking to broaden the capital base of the bank and clean up its balancesheet by the end of the current quarter as it battles rising bad loans. The banks gross non-performing assets stood at 11.84 percent, as of December 31, 2016.
All legal formalities and shareholders approval for this tranche of capital infusion is expected to be in place by next week, the official said.
The board of J&K Bank had on February 4, approved allotment of shares of up to Rs 250 crore on a preferential basis to the Government of Jammu and Kashmir, subject to approvals, the state-owned lender had said in a stock exchange filing. The filing also said that the bank will seek shareholders approval through postal ballot.
The Government of Jammu and Kashmir is the majority shareholder of J&K Bank and holds 53.17 percent as September 30, according to data on the exchanges.
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