India’s second-largest bank Punjab National Bank (PNB) on Thursday announced that its board has approved a proposal to raise Rs 10,000 crore through a share of both equity and debt.
In addition, the board has given green signal for the opening of the balance sheet of the amalgamated bank as on April 1, which is post merging of Oriental Bank of Commerce and United Bank of India into PNB, the bank said.
The board has also said yes for “raising of capital through the mix of issue of equity shares and Basel III-compliant tier-2 bonds using private placement, qualified institutional placement (QIP), further public offer (FPO), rights issue or any other means or through a share thereof up to an amount of Rs 10,000 crore”.
The bank will look for shareholders’ nod for raising equity capital for an estimated amount up to Rs 7,000 crore in the coming annual general meeting.
At present, the Government of India holds an 85.59 percent stake in PNB.
PNB is also planning to hit capital markets in Q4 of this financial year in order to raise funds to help meet growth needs and requirements.
PNB’s capital adequacy ratio stands at 14.14 percent at the end of March 2020.
The board also nodded for the appropriation of gathered losses of Rs 28,707.92 crore from the share premium account of PNB amalgamated Oriental Bank of Commerce (OBC) and United Bank of India.
The amalgamated bank with itself, effective April 1, 2020. With the amalgamation, PNB now has around 11,000 branches, 13,000 ATMs, one lakh employees, and a business share of over Rs 18 lakh crore. The total domestic business of the bank stood around Rs 11.81 lakh crore at the end of March 2020.
Reserve Bank of India approved to hold these investments and gave the directions which will be implemented within the given timeframe.
In spite of these events and situations, RBI said there would not be any major impact on the bank’s outcome in the future.