Public sector lender Punjab National Bank (PNB) would by September-end take a call on raising funds from the market, a top official said today.
"We will firm up plans (on raising capital) by end of September," PNB Chairman and Managing Director K R Kamath said here.
The bank would look at raising capital in the next half of the current fiscal, he said, adding, whether it would be through rights issue or Qualified Institutional Placement (QIP) would be decided later.
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The quantum of government equity dilution would also be decided in September.
Currently, the Government of India holds 58.87 per cent stake in the bank while the remaining is with the public.
The bank has headroom to dilute government stake up to 51 per cent, the statutory ceiling and allowing banks to maintain public sector character.
The stake reduction up to 51 per cent would help bank to mobilise Rs 5,000 crore at the current market price.
Shares of PNB today closed at Rs 924 per unit, down 0.51 per cent on the BSE.
Last 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).
Last week, Finance Minister Arun Jaitley had said recapitalisation to the tune of Rs 2.4 lakh crore in public sector banks to meet Basel III norms is a 'high priority' item for the government.
Jaitley in the Budget speech had said, "Financial stability is the foundation of rapid recovery. Our banking system needs to be further strengthened. To be in line with Basel-III norms, there is a requirement to infuse Rs 2,40,000 crore as equity by 2018 in our banks. To meet this huge capital requirement, we need to raise additional resources to fulfil this obligation."
While maintaining the public ownership, the capital of these banks will be raised by increasing the public shareholdings in a phased manner through sale of shares largely via retail to common citizens of this country, he had said.
"Thus, while the government will continue to have majority shareholding, the citizens of India will also get direct shareholding in these banks, which currently they hold indirectly. We will also examine the proposal to give greater autonomy to the banks while making them accountable," he had said.
