Hike In Pnb Gilts Cap Proposed

Punjab National Bank (PNB) proposes to increase the paid-up capital of PNB Gilts Ltd, the primary dealer entity floated by PNB, by Rs 50 crore. At present, PNB Gilts is the only primary dealer which has a paid-up capital of Rs 50 crore. All the other primary dealers have a paid-up capital of at least Rs 100 crore.

Speaking to Business Standard, Rashid Jilani, chairman, Punjab National Bank, said that after the public issue of the bank which is slated for some time in the first week of January, PNB would infuse more funds into PNB Gilts. PNB Gilts has been mainly relying on the inter-bank money market for funding its operations. It had also issued a commercial paper some time back. Since the call rates have ruled easy, the primary source of funding has been the money market.

If the call rates move up then higher level of net-owned funds would come in handy.In the government securities segment, PNB Gilts has been active at the primary auctions as well as the secondary market where it is offering two way quotes with a view to creating a secondary market.

It, however, had no presence in the secondary treasury bills market.

Against a bidding commitment of Rs 180 crore in treasury bills, PNB Gilts purchased Rs 1,599 crore worth of treasury bills from the primary market.

In the dated securities segment, against the bidding commitment of Rs 150 crore, the primary dealer bought Rs 1,539 crore at the auctions and Rs 736 crore worth of securities in the secondary market.