India’s state-owned lender Punjab National Bank (PNB) is planning to seek INR54.31bn ($747.71m) capital infusion from the government.
In a statement to the stock exchange, the bank said that it plans to procure the infusion by way of preferential issue of equity shares.
The PBI Board of Directors is scheduled to meet today to fix a date of Extra Ordinary General Meeting (EGM) to obtain shareholders’ approval for the same.
The announcement comes within a day after the Union Finance Minister Arun Jaitley announced that the government will consider capital support to the banks.
One of the largest banking units in the country, PNB was hit by a major banking fraud of more than $1.77bn earlier this year significantly upsetting its financial robustness.
After a review meeting with the state-owned banks held earlier this week, Jaitley said:: “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.”
He assured that the government will look into the subject immediately.
In July, the government approved capital infusion of around INR113.36bn ($1.65bn) into five state-owned banks to help them fulfil regulatory requirements.
Besides fraud affected PNB, Corporation Bank, Indian Overseas Bank, Allahabad Bank and Andhra Bank will also receive the support.