NEW DELHI: State-run Punjab National Bank (PNB)'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 stock exchange 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 the capital market regulator Securities and Exchange Board of India (SEBI) regulations.
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 here heads of public sector banks (PSBs).
In July, the government had decided to infuse Rs 11,336 crore in five PSBs, including the 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 Rs 2.11-lakh crore capital infusion plan for state-run banks struggling with massive accumulated non performing assets (NPAs), or bad loans, which in the overall banking system have touched the staggering level of Rs 10 lakh crore.
As per the capitalisation plan, the PSBs 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.