New Delhi: Punjab National Bank (PNB) on Monday said the board will consider capital infusion of up to Rs 18,000 crore in its meeting later this week.
It comes against the backdrop of the government's announcement on August 30 about merging 10 public sector banks into four entities, as part of which PNB will 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.
On August 31, PNB said it received a communication from the finance ministry that the government, after having consultation with the Reserve Bank of India, had decided that PNB, OBC and UBI may consider the amalgamation of OBC and UBI 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 mega merger plan of public sector banks (PSBs) is being seen as the biggest consolidated exercise in the banking space, aimed at making them lenders of global size and scale. Among others who are part of this exercise include merger of Syndicate Bank into Canara Bank, Allahabad Bank into Indian Bank and consolidation of Andhra Bank and Corporation Bank with the Union Bank of India.
With this, the number of government-owned banks in India will come down to 12 from 19 earlier. In April 2017, State Bank of India had merged its six associate banks and Bharatiya Mahila Bank with itself. While that last fiscal witnessed amalgamation of Vijaya Bank and Dena Bank into Bank of Baroda.