PNB to seek Rs 5,431-crore fund infusion from govt

The Indian Express
EANS, Economic Bureau
September 27, 2018

While the earlier fund infusion was to help PNB meet minimum regulatory capital requirement, this round of capital injection will enable the lender to step up growth in lending.

Punjab National Bank’s (PNB) board will meet on Thursday to seek Rs 5,431 crore capital support from the government through preferential issuance of equity shares.

While the earlier fund infusion was to help PNB meet minimum regulatory capital requirement, this round of capital injection will enable the lender to step up growth in lending. The announcement by PNB comes within a day of Finance Minister Arun Jaitley announcing that the government will consider state-owned banks’ request for advancement of capital infusion.

“The meeting of Board of Directors of the Bank is scheduled to be held on 27th September, 2018 for considering infusion of Rs 5431 crore by Government of India by way of preferential issue of Equity share and Fixing date of Extra Ordinary General Meeting (EGM) for obtaining shareholders’ approval in this regard at a price determined in terms of SEBI (ICDR) Regulations,” PNB said in a regulatory filing with stock exchanges on Wednesday.

After a review meeting with the heads of state-owned banks on Tuesday, Jaitley committed capital support to banks. “Some of them (the banks) did mention that the PCA (prompt corrective action) guidelines should be revisited because that is indirectly impacting their lending ability and that government should be more upfront in the capital requirement of some of these banks. I have assured them that we will immediately look at this subject because we are as keen as them, as every Indian is, that this opportunity is not missed because we want the cycle of high consumption, high growth, NPA recoveries, credit offtake really to be utilised to the fullest in order to help economy,” he said on Tuesday.

The government in July infused Rs 11,336 crore in five state-owned lenders including PNB, Corporation Bank and Andhra Bank to help them meet regulatory capital requirement. In that round, PNB, which has been impacted by the Nirav Modi scam, was provided the highest amount of Rs 2,816 crore. The capital infusion will be a part of the remaining Rs 65,000 crore out of Rs 2.11 lakh crore capital infusion announced by the government for two financial years.

Reference; https://indianexpress.com/article/business/banking-and-finance/pnb-to-seek-rs-5431-crore-fund-infusion-from-govt-5376294/

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