PNB to seek ₹5,431 cr capital aid from govt

NEWDELHI: Punjab National Bank (PNB) Wednesday said it plans to seek ₹5,431 crore capital support from the government a day after finance minister Arun Jaitley assured state-owned banks of all support from the government.

The meeting of the bank’s board will take place Thursday for considering infusion of ₹5,431 crore by the government by way of preferential issue of equity share and fixing date of extra-ordinary general meeting (EGM) for obtaining shareholders’ approval in this regard, PNB said in a filing to stock exchanges.

The finance minister Tuesday committed capital support to banks after meeting heads of public sector lenders. “Some of them 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 had said.

The government infused ₹2,816 crore as capital infusion via preferential allotment of equity shares this month to meet regulatory ratios. The government in July decided to infuse ₹11,336 crore in five state-owned lenders including PNB, Corporation Bank and Andhra Bank to help them meet regulatory capital requirement.

The infusion was part of remaining ₹65,000 crore out of ₹2.11 lakh crore capital infusion over two financial years.

The government announced ₹2.11 lakh crore capital infusion programme October last year. As per the plan, the public sector banks (PSBS) were to get ₹1.35 lakh crore through re-capitalisation bonds, and the balance ₹58,000 crore through raising of capital from the market.