Shares of public-sector lender Punjab National Bank (PNB) rose over 3% on Wednesday after the bank said its board will consider an infusion of Rs 5,431 crore by the government. Following the announcement, PNB shares jumped 3.35% to an intra-day high of Rs 69.30 per share on the BSE. However, the stock trimmed some gains to close trade at Rs 67.15, up 0.15%.
Punjab National Bank on Wednesday said it plans to seek Rs 5,431 crore capital support from the government. The announcement comes a day after Finance Minister Arun Jaitley assured state-owned banks of all support from the government.
The bank informed in a stock exchange filing that the meeting of the bank’s board will take place on Thursday for considering the infusion by the government by way of preferential issue of equity share. The bank will also fix the date of extra-ordinary general meeting (EGM) for obtaining shareholders’ approval in this regard at the board meet tomorrow, the regulatory filing said.
The finance minister committed capital support to banks after meeting heads of public sector lenders on Tuesday, said a PTI report. “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,” Jaitley said while addressing a press conference after the annual review meeting.
“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 has infused Rs 2,816 crore as capital infusion via preferential allotment of equity shares this month to meet regulatory ratios, the report said. In July, the government decided to infuse Rs 11,336 crore in five state-owned lenders including PNB, Corporation Bank and Andhra Bank to help them meet regulatory capital requirement.