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PNB to consider infusion of Rs 18,000 crore at board meet this week

The PNB board would also consider the amalgamation of the Oriental Bank of Commerce and United Bank of India with itself, as announced by the government on Friday

twitter-logo BusinessToday.In   New Delhi     Last Updated: September 2, 2019  | 21:29 IST
PNB to consider infusion of Rs 18,000 crore at board meet this week
Punjab National Bank would consider infusion up to Rs 18,000 crore this week

State-run Punjab National Bank (PNB) on Monday said its board would consider capital infusion of up to Rs 18,000 crore in its meeting later this week.

On Saturday, PNB had said in an exchange filing that it would consider infusion up to Rs 16,500 crore by the government through preferential issue of equity shares and fixing date of extraordinary general meeting (EGM) for obtaining shareholders approval in this regard at a price determined in terms of the market regulator SEBI.

"In continuation to our intimation dated 31.08.2019, the exchange is hereby informed that the board shall consider capital infusion upto Rs 18,000 Crore in its meeting scheduled on 5th September 2019," PNB said in a filing to the Bombay Stock Exchange.

The PNB board would also consider the amalgamation of the Oriental Bank of Commerce and United Bank of India with itself, as announced by the government on Friday.

Also Read: Bigger banks need customers for government's growth booster to work

The bank had received a communication from the Ministry of Finance that the Alternative Mechanism (AM), after consultation with Reserve Bank of India (RBI), has decided that Punjab National Bank, Oriental Bank of Commerce (OBC) and United Bank of India may consider amalgamation, it said in a regulatory filing.

"Accordingly, a meeting of board of directors to consider the amalgamation will be convened by the bank shortly," PNB said.

On Friday, Union Finance Minister Nirmala Sitharaman had announced a mega plan to merge 10 public sector banks into four as part of plans to create fewer and stronger global-sized lenders. The government would merge PNB with Oriental Bank of Commerce and United Bank of India to make it the second-largest public sector bank with business of Rs 18 lakh crore and second-largest branch network in India.

Also Read: Bank mergers: As FM Sitharaman promises smooth transition, here's what it means for customers of these 10 banks

In July this year, the board of Punjab National Bank had approved fresh equity capital raising of up to Rs 5,000 crore, which happened to be the first big equity capital mop-up (besides government capital infusion) after the Rs 13,000-crore Nirav Modi scam that hit the bank two years ago.

Edited by Chitranjan Kumar

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