New Delhi: State-run Punjab National Bank's board on Thursday approved a proposal for capital infusion of Rs 5,431 crore from the central government by way of preferential issue of equity shares.
Following the board meeting, the PNB said in a regulatory filing that the capital infusion by the Centre would be through the preferential allotment of the bank's equity shares at a price determined as per Sebi regulations. Sebi or Securities and Exchange Board of India is the country's capital market regulator.
The extraordinary general meeting (EGM) for obtaining shareholders' approval in this regard will be held on October 30, it said.
Earlier this week, Finance Minister Arun Jaitley had committed capital infusion to banks after meeting chiefs of public sector banks.
In July, the government had decided to infuse Rs 11,336 crore in five PSU banks, including PNB, to enable them to meet regulatory capital requirements. This infusion was part of the Rs 65,000 crore remaining out of the Rs 2.11 lakh crore capital infusion over two financial years.
In October last year, the government announced a capital infusion plan worth Rs 2.11 lakh crore for state-run banks struggling with massive accumulated non-performing assets (NPAs). Bad loans or NPAs in the overall banking system have touched a staggering Rs 10 lakh crore.
As per the capitalisation plan, the PSU banks are to receive Rs 1.35 lakh crore through recapitalisation bonds, and the balance Rs 58,000 crore is to be raised from the market.