Minister of State for Finance K M R Janarthanan said in a written reply in the upper house that the amount has been re-invested by the bank in the form of 12-year recapitalisation bonds bearing 10 per cent rate of interest, the minister said. The government contributed the additional capital to meet the CRAR obligation of eight per cent since the bank, which incurred a net loss of Rs 1336.40 crore and Rs 389.09 crore in 1995-96 and 1196-97 respectively, was not in a position to raise the capital from the market.

Due to net losses, the bank's CRAR had dipped below the eight per cent mark set by the Reserve Bank in 1995-96 and 1996-97.