United Bank of India

Home Minister Palaniappan Chidambaram said on Monday-"The government will invest a total 8 billion rupees in shares of unlisted United Bank of India in two trances until March 2010, as part of a capital restructuring plan of banks"

He said that the cabinet has approved government's proposal of investing 2.50 billion rupees by March 31.

Indian banks have been unable to raise fresh equity after the global financial crisis roiled Indian markets, but they have to adhere to the central bank's capital adequacy rules and meet rising demand for loans.

In February, the cabinet approved 38 billion rupees investment in the shares of three state-run banks -- UCO Bank, Central Bank of India and Vijaya Bank.

Earlier, India had sought World Bank help to recapitalise 17-18 state-run banks by end March 2010, and help them increase capital adequacy ratio to at least 12 percent.

Accordingly, the World Bank has promised $3 billion for Indian banks and infrastructure firms, who are unable to raise funds from the market after the global financial crisis.