PNB Gilts today said its shareholders have approved a special resolution to enable the board to raise up to Rs 7,000 crore against earlier borrowing limit of Rs 5,000 crore.
The proposal was approved by the shareholders through voting in favour of it in the annual general meeting of the company held yesterday, the company, which is an arm Punjab National Bank, stated in a BSE filing.
According to statement the it is proposed that the borrowing powers of the Board be raised to Rs 7,000 crore in excess of the aggregate of paid-up share capital and free reserves of the company, apart from temporary loans obtained in ordinary course of business.
Earlier on September 12, 2013, shareholder of the Company at their 18th Annual General Meeting passed the special resolution enabling the Board of Directors to borrow money up to Rs 5000 crore in excess of the aggregate of paidup share capital and free reserves of the Company, apart from temporary loans obtained in ordinary course of business.
Thus the borrowing limit was not changed since then.
In 1996 Reserve Bank had introduced the system of Primary Dealers with a view to strengthen the institutional infrastructure of government securities market.
Six entities were granted licenses of which PNB Gilts was one. The company was established as a wholly owned subsidiary of Punjab National Bank with an initial paid up capital of Rs 50 crore.
The net-worth of the company has increased from Rs 50 crore to Rs 731.22 crore. It is the only listed primary dealer in India and the public share holding in company is 25.93 per cent, as per the information provided on its website.