Allahabad Bank, a public sector lender, has raised approximately INR17.9bn ($243.74m) from the Government of India (GoI) to beef up its capital base.

In lieu of capital infusion, the Share Issue and Allotment Committee of the Board has approved to allot 38,92,15,046 new equity shares of face value of INR10 of the bank on preferential basis to government.

The newly allocated share on the preferential basis to the government equates to 7.6% stake and takes the government’s shareholding in the bank up to 79.41%.

Earlier in September, the Indian government infused INR54.31bn ($747.71m) capital into state-owned lender Punjab National Bank (PNB) in the wake of a major banking fraud of more than $1.77bn earlier this year significantly upsetting its financial robustness.

In July, the government approved a new recapitalisation plan of INR113.36bn ($1.65bn) for five state-owned banks including the PNB, Corporation Bank, Indian Overseas Bank, Allahabad Bank, and Andhra Bank to help them fulfil regulatory requirements.

The Kolkata-headquartered bank is the oldest joint stock bank in India. Founded in 1865 in Allahabad in the Indian state of Uttar Pradesh, the bank was nationalised in 1969.

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Allahabad Bank managed more than 3245 branches across India as of 31 March 2018.

In October 1989, Allahabad Bank purchased United Industrial Bank, a Calcutta-based bank with it 145 branches. In 1991, the bank formed AllBank Finance, a wholly owned merchant banking subsidiary.