PNB to consider Rs 18,000-cr capital infusion this week

New Delhi: Punjab National Bank (PNB) said on Monday that its board is considering a capital infusion of up to Rs 18,000 crores in its meeting later this week. The announcement comes close on the heels of the government's decision to merge 10 PSU banks to create four mega lenders. As part of this decision, PNB is supposed to merge Oriental Bank of Commerce (OBC) and United Bank of India (UBI) with itself.

"The board shall consider capital infusion up to Rs 18,000 crore in its meeting scheduled on September 5, 2019," PNB said in a regulatory filing.

Board meeting will discuss planned merger

PNB said that it had received a communication from the Finance Ministry on August 31, saying that the government had decided that OBC and UBI will be merged into PNB. "Accordingly, a meeting of the board of directors to consider the amalgamation will be convened by the bank shortly," PNB had said.

The backdrop

The mega-merger of 10 public sector banks (PSBs) is being viewed as a big bang measure to consolidate the banking sector. The move is said to be aimed at making these banks at par with global lenders in terms of size and scale.
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With this, the number of government-owned banks in India will come to 12 from 19 earlier.