Punjab & Sind Bank sets off accumulated losses of Rs 3,577 crore

Punjab & Sind Bank on Monday said it has set off accumulated losses of over Rs 3,577 crore against the share premium account of the bank

Punjab & Sind Bank (PSB) on Monday said it has set off accumulated losses of over Rs 3,577 crore against the share premium account of the bank.

The bank had obtained approval of shareholders in its AGM in July to set off the accumulated losses from the share premium account.

The bank, "subsequent to the approval of the Reserve Bank of India, has appropriated accumulated losses of Rs 3,577.55 crore from share premium account of the bank today", it said in a regulatory filing.

Share premium account balance is a reserve that can only be used for defined purposes. It reflects the difference between the face value and subscription price of shares.

The New Delhi-headquartered lender has not proposed any dividend for 2020-21.

Its accumulated loss stands against the securities premium amount of Rs 4,835.11 crore in its balance sheet.

The bank in June said that setting-off of the accumulated losses will present a true and fair view of the financial position of the bank. It will not affect any ratios such as book value per share, return on equity, and earning per share.

It will represent true financial position, shareholders will be benefited through dividends, and their holding will yield better value.

The proposal will also place the bank in a better position to achieve its turnaround plan in a time-bound manner, the lender said in June.

Punjab & Sind Bank had reported a net loss of Rs 2,733 crore in FY21. P&SB stock closed 4.57 per cent down at Rs 15.65 apiece on the BSE.