PNB board nod for arm merger

Punjab National Bank (PNB) today said the board had given a go-ahead to PNB Gilts to work out a scheme of merger with the bank.

"PNB Gilts may prepare a scheme of its merger with the Bank and seek necessary approvals," Punjab National Bank informed the Bombay Stock Exchange.

The Delhi-based bank currently holds about 74 per cent in PNB Gilts and the rest is with retail investors and institutional investors.

PNB Gilts, a primary dealer in government securities and a subsidiary of PNB, shares slipped 9.65 per cent at Rs 30.90.

Earlier speaking on the issue PNB Chairman and Managing Director K C Chakrabarty had said "we are looking at merger as one of the options because it does not make sense to have a separate subsidiary which is not into any business other than gilts".

It can as well work as an in-house division. A merger will allow us to avail the Rs 40-50 crore capital infused in PNB Gilts and put it to other use, he had said.

Similarly, the bank is also reviewing the possibility of merging its housing finance arm PNB Housing Finance Ltd with itself.