The Union government, in its recent decision, has announced capital infusion in three public sector banks namely UCO Bank, Central Bank of India and  

Vijaya Bank. The Kolkata based UCO bank would get capital worth Rs 1,200 crore, through UCO's non-convertible preference shares, from center government in two installments, Rs 450 crore immediately and the balance Rs 750 crore in 2009-10.

UCO Bank chairman and managing director, SK Goel said, "The government will provide Rs 450 crore in February itself. The remaining Rs 750 crore will be infused around June-July 2009."

He hoped improvement in bank's adequacy ratio to above 12% against 10.68% as on December 31, 2008 besides improvement in tier 1 capital to above 6% against 5.44%.

Mr. Goel said that there is no need for bank to enter in the bond market before March 31, 2009 following government's decision. He maintained, "There is no point in mobilizing more capital at this juncture as capital raising has a cost attached to it."     

The decision would also help to arrange funds through tier 2 capital.