New Delhi, April 5: The government today decided to write off the accumulated losses of Indian Bank amounting to Rs 3,830.14 crore. This is, however, a technical adjustment and will have no financial implications.

The losses of the bank would be written off against the bank’s equity capital of Rs 4,573.96 crore, defence minister Pranab Mukherjee said after a cabinet meeting.

Stating that it was a technical write-off, Mukherjee said the present proposal does not involve any financial outgo.

The cabinet also gave its approval for converting a portion of the remaining equity share capital of Rs 743.82 crore of the Indian Bank into preference share capital, in line with Reserve Bank of India guidelines, the minister said.

Indian Bank started making operating profits from 1999-2000 and has been making a profit from 2001-02.

In the past, the government had permitted 13 banks to write off their accumulated losses against capital, when these banks were fully owned by the central government, the minister added.

ICICI Venture

The cabinet committee on economic affairs today approved a proposal of ICICI Venture Funds Management Company to raise $750 million additional equity capital for investment purposes.

The amount for the Bangalore-based company would be allowed only for investments in sectors permitted by the foreign direct investment policy, while observing sectoral caps, Mukherjee said after a meeting of the CCEA.

“The CCEA approved raising $750 million which would be up to 75 per cent of the corpus of the fund by way of issue of unit capital on a repatriable basis from non-resident Indians, persons of Indian origin and foreign investors,” he said.

The total inflow of foreign investment as a result of the infusion of additional equity capital is up to Rs 3,375 crore, he said.

Pact with Kuwait

The government today approved the signing of an agreement between India and Kuwait for avoidance of double taxation.

“The approval for signing of the agreement between India and Kuwait for avoidance of double taxation and prevention of tax evasion with respect to taxes on income has been given,” Mukherjee said.

The agreement will stimulate the flow of investment, technology and services from India to Kuwait and vice-versa, he said. “It will also provide stability to the residents of India and Kuwait and facilitate mutual economic cooperation,” Mukherjee said.

India has so far signed such bilateral agreements with 69 countries, he added.