London  - The British government is to own a majority share of almost 58 per cent in the Royal Bank of Scotland (RBS) after shareholders failed to take up a rights issue to inject new capital into the ailing bank.

RBS announced Friday that only 0.24 per cent of the new shares offered - or 56 million shares - were bought under the scheme offered by the Edinburgh-based bank.

This means that the government - and the taxpayer - will pay about 15 billion pounds (22.5 billion dollars) for a majority stake of 57.9 per cent in the bank.

Public sector lender, Punjab National Bank has decided to lower the benchmark prime lending rates by 100 basis points on Wednesday. It is the second interest rate reduction by the bank in four weeks. Earlier, it had announced to cut the BPLR by 50 basis points on October 31. Now, industry and general public can get credit at low rates in the present credit struck environment.

The revised interest rate would be effective from Monday. The decision may also encourage other banks to revise interest rates.

Banks have agreed to extend financial help to small and medium enterprises (SME) and exporters in the wake of tight liquidity conditions, following the international credit crunch. The Indian Banks Association (IBA) discussed the problems of SMEs and hinted to increase the credit limit and ease loan repayment norms without any penalty.

Frankfurt  - German bank Commerzbank announced late Thursday that it would accelerate its planned takeover of Dresdner Bank from the current parent, insurance group Allianz, at barely half the earlier price.

Under a revision of the deal first struck in August, Frankfurt- based Commerzbank, Germany's second largest bank, will complete the takeover in January, rather than in the second half of 2009 as originally agreed.

The chief executive of Citigroup, Vikram Pandit, has informed that the major reason behind the things going wrong at the company is the banking behemoth putting in lot of money in US real estate market.  

In an interview on Tuesday, Pandit said, “What went wrong is that we had tremendous concentration in the sense we put a lot of our money to work against US real estate. So how we got here is, by lending money and putting money to work in the US real estate market in a size that was probably larger than what we ought to have done on a diversification basis.”

Lucerne - Shareholders of Swiss bank UBS overwhelmingly supported Thursday a plan for the Swiss government to inject 6 billion francs (5 billion dollars) into the institution, which has been hit hard by the sub-prime and financial crises.

The bank said over 98 per cent of voting shareholders supported the move, which gives the government a temporary stake of 9.3 percent in the bank.