PNB may raise capital from rights issue next fiscal

Fund support to PNB was part of the Rs 14,000 cr overall capital infusion plan for public sector banks

State-owned Punjab National Bank (PNB) may raise capital through rights issue next fiscal to enhance its capital base.

"Next year when government gives capital, we may think of rights issue. We are not looking for big capital next fiscal," PNB Chairman and Managing Director K R Kamath told PTI.

Rights issue are offered to existing shareholders.

Government of India holds 58.87 per cent stake in the bank while the remaining is with the public.

During the current fiscal, the bank got capital infusion of Rs 500 crore from the government. The fund infusion was done through preferential allotment of shares to the government.

The fund support to PNB was part of the Rs 14,000 crore overall capital infusion plan for the public sector banks (PSBs).

Capital infusion by the government has been done with the twin objectives of adequately meeting the credit requirement of the productive sectors as well as to maintain regulatory capital adequacy ratios in PSBs.

The government's fund infusion in PSBs is in addition to their internally generated capital to enable the banks to maintain a comfortable level of Tier-I, or equity, capital.

Finance Minister P Chidambaram had proposed infusion of Rs 11,200 crore in public sector banks to enhance their capital in the next financial year.