Indian Bank has brought about requisite accounting entries for setting off accumulated losses of Rs. 18,975.53 crore from the additional paid-in capital account of the bank. The Indian Bank informed that a special resolution was passed by the shareholders of the bank approving appropriation of accumulated losses of Rs.18,975.53 crore from additional paid-in capital of the bank in the extraordinary general meeting, and bank on the date, with prior approval of RBI, has passed the requisite accounting entries setting off accumulated losses of Rs.18,975.53 crore from additional paid-in capital account of the bank on Nov 30th, 2020.
According to the opening balance sheet of Indian Bank, the consolidation entity with Allahabad Bank, as of April 1st, 2020, an amount of Rs 19,833.15 crore was standing to the credit of additional paid-in capital account, as a result of earlier share issues, made at a premium. In addition, an aggregate amount of Rs 18,975.53 crore was outstanding as net accumulated losses under reserves and surplus of the consolidation entity. Allahabad Bank was merged with Indian Bank on April 1st, 2020 and at that time Allahabad Bank had carried an accumulated loss of around Rs 19,000 crore.
At the end of the third quarter, the combined business of the two banks stood at Rs 8.44 lakh crore with a total of 6,000+ branches. Indian Bank’s business stood at Rs 4.5 lakh crore with 2,880+ branches as on Dec 31st, 2019, while Allahabad Bank’s business as on Dec 31st 2019 stood at Rs 3.94 lakh crore with 3,170+ branches.
Padmaja Chunduru, MD & CEO, Indian Bank has told that in the extraordinary general meeting, the bank proposed to utilize the amount standing in the additional paid-in capital for the purpose of setting off the accumulated losses.
Indian Bank’s share rises 10 % on Wednesday after raising Rs 1,048 crore by issuing bonds on a private placement basis. The Indian Bank is also aiming to grow its micro small and medium enterprise portfolio riding on its small entrepreneurship mentoring program, MSME Prerana, as it will enable small businesses to access bank credit more easily. The Indian bank’s micro small and medium enterprise portfolio is Rs 65,176 crore with around 17.3 lakh accounts, which is 18% of the total advances portfolio. During the first half of 2020-21, this portfolio had grown by 14.73%.