Financial Daily from THE HINDU group of publications
Thursday, Oct 06, 2005
Financial Daily from THE HINDU group of publications Thursday, Oct 06, 2005 |
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Money & Banking
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Public Sector Banks We have set higher target this year: PNB Public issue mop-up bloated figures, Govt told Sarbajeet K. Sen
Mr S.C. Gupta
New Delhi , Oct. 5 PUNJAB National Bank (PNB), defending the projections on deposits and advances made in its Statement of Intent for 2005-06, has said that the Government might have been deceived by the bank's previous year-end figures which took into account the inflow from subscriptions to the March 2005 public issue. The Government had recently asked PNB to explain why it had submitted lower projections on the deposits and advances front for the current fiscal as compared to the previous year. "Our figures are not actually lower than the previous year. The year-end figures for 2004-05 were somewhat abnormal since it took into account the strong investors' response to our public issue in March," the Chairman and Managing Director, PNB, Mr S.C. Gupta, told Business Line. PNB had come out with a book-built public issue of 8 crore shares of Rs 10 each at a cut-off price of Rs 390 per share. The issue, which was open during March 7-11, 2005, was subscribed over 15 times. Mr Gupta said the bank had shown the public issue inflows as deposits and also extended some short-term loans against that which led to a somewhat "unusual" bloating of figures for the year. "The public issue had led to some temporary increase in deposit and advances. Pending allotment and refund, we had deployed some funds for short-term gains as is normal in dealing with public issue inflows. This has given the impression that we had grown more than the system," Mr Gupta said. He said that if the public issue monies and its subsequent treatment by the bank are taken into account, the projections were in fact higher than the previous fiscal. Mr Gupta, however, did not want to disclose the actual projections the bank had made in its Statement of Intent to the Government. For the year-ending March 31, 2005, PNB had shown deposits of Rs 1,03,167 crore, a 17.3 per cent increase over the previous year-end figure of Rs 87,916 crore. Advances grew by 27.9 per cent to Rs 60,413 crore compared with Rs 47,225 crore during the period. The Ministry of Finance had asked about half a dozen banks to rework their projections for the current fiscal after it noticed that they had made lower projections on certain parameters compared to the previous year.
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