Two public sector banks Union Bank of India and Corporation Bank ruled out plans

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of mergers with other commercial banks in the country in the foreseeable future even as the two banks will be raising government equity to over 58 per cent each by March end.

“Union Bank has no plans of merger or acquisition for the time being,” the bank chairman M V Nair said.

“We have not planned any merger in the foreseeable future,” corporation bank chairman Ramnath Pradip said on the sidelines of a function got up to celebrate 106th foundation day of the Karnataka based bank on Saturday. Finance minister Pranab Mukherjee inaugurated the celebrations.

Both the chairmen said that their respective bank’s government equity would up beyond 58 per cent with the capital infusion by March end.

“With the capital infusion of Rs 1096 crore by this month end, government equity in Union Bank will go up to 58 per cent from the present 55.4 per cent,” Nair told reporters adding tier-l capital adequacy ratio will be close to 9 per cent.

The bank’s AGM will meet on March 29 to finalise the capital infusion, Nair said adding the this will take care of bank’s capital requirement for the next couple of years.

The bank also had head room to raise up to Rs 4000 crore tier-ll capital and bank may raise some tier-ll capital next year, he said.

The union bank’s credit growth has been good this year at 22-23 per cent, he said.

Corporation bank head Pradip said Rs 309 crore capital infusion will be done in the bank taking government equity to 58.52 per cent from the present 57.12 per cent. The bank’s tier-I capital adequacy will go up to 8.52 per cent with the infusion.

Earlier finance minister Pranab Mukherjee said credit delivery mechanism of banks needed to improve further so that fruits of high growth reach the people in rural areas.

Mukherjee was appreciative of “prudential management” of the banking system due to which Indian finance minister was able to hold his head high at the G-20 meeting and say Indian banks have come “unscathed” during the global financial crisis, the worst after the great depression of 1929.

The finance minister said the global recovery was still fragile. ”The high commodity prices and uncertainty of energy prices due to political turmoil in West Asia have created an atmosphere of uncertainty.”

“We are at a challenging time as the world is yet to recover for the worst financial crisis,” he said adding India is coming out of the global crisis and “we must attain higher growth to make it more inclusive to ensure the benefits of growth to reach the largest number of our people.”