India’s Punjab National Bank (PNB) has made an announcement that it will ask the government for capital infusion of Rs. 5,431 crore. The announcement was made a day after Arun Jaitley, India’s Finance minister assured that the government will provide any kind of support to all the state-owned banks in the country.
A meeting amongst the bank’s board has been scheduled on Thursday. The sole purpose of the meeting is to get the approval of the infusion from the government. According to PNB, the procedure will be carried out through a preferential issue of equity share and fixing date of the extraordinary general meeting (EGM) for obtaining shareholders’ approval in the regard.
After a meeting between the finance minister and heads of public sector lenders, Arun Jaitley announced the final decision to support the banks.
In July, the government planned to release a capital infusion of Rs 11,336 crore among five state-banks including PNB, Corporation Bank, and Andhra Bank. The main reason behind the funding is to help them in meeting their capital requirement.
As a part of a capital infusion programme of 2017, the government infused an amount of Rs 2.11 lakh crore. The programme intends to infuse an amount of Rs 1.35 lakh crore for public sector banks through re-capitalization of bonds. Rs. 71000 crore was also infused from Rs 1.35 lakh crore. The infusion was carried out through recap bonds in the banks.