The Hindu Business Line : PNB gets UK nod to operationalise arm

New Delhi April 4 Punjab National Bank (PNB) has received an in-principle approval from the UK's financial sector regulator to operationalise its subsidiary in London.

The bank would now be required to infuse an initial capital of £25 million pounds (about Rs 225 crore) in the subsidiary, after which a formal licence would be given to start the subsidiary and open a branch there (most likely in Southall).

The Financial Services Authority (FSA), which is the regulator of the UK financial sector, had set three conditions to get the subsidiary running: capital infusion, providing an internal auditor and appointment of an Executive Director.

"We have already met the last two requirements and are all set to provide necessary capital for the subsidiary," Mr S.C. Gupta, Chairman and Managing Director, told Business Line.

He added that the entire capital would be provided by PNB at one go.

Currently, the bank has no branches operating in the UK.

Mr Gupta said that approval from the host country regulator for a branch in Hong Kong is expected within a couple of weeks.

PNB has also obtained approvals from the Reserve Bank of India for a subsidiary in Canada and an offshore banking unit (OBU) in Singapore.

Mr K. Raghuraman, Executive Director, was hopeful that the Singaporea authorities would soon give regulatory approval for the OBU. "With the decks cleared for SBI and ICICI Bank, we hope that our application for an OBU would also soon get the regulatory nod."

Meanwhile, speaking on the occasion of the launch of the bank's 1,000th ATM on Wednesday, Mr Gupta said that business turnover for 2006-07 has exceeded the targets specified in the statement of intent filed with the Finance Ministry.

For 2007-08, PNB would aim at 20-22 per cent increase in business turnover.

PNB is likely to close 2006-07 with business turnover of Rs 2,37,000 crore (provisional).

The figure has grown from Rs 1,63,000 crore in March 2005 to Rs 1,94,000 crore in March 2006.

With a dear money policy now being adopted by the RBI, Mr Gupta hinted that the bank's prime lending rate might go up by 25-50 basis points in the near future.

"We will take a decision on this in the next 5-7 days. It is possible that the rate might go up by 25-50 basis points. No decision has been taken as yet. We will look into the RBI's advice and also see what other banks are doing before taking a decision."

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Rupee breaches 43-level

LIC Housing hikes lending rates

ICICI Pru Life hikes capital by Rs 245 cr

IOB branch opened

EPF scheme amended to ensure interest payment at retirement

`Hike in interest rate will hit Tirupur knitwear exporters'

Bond prices gain

Hike in risk weights, a more tangible tool

Mandvi, Saraswat Bank swap at 1:1

PNB gets UK nod to operationalise arm

`RBI measures won't impact inflation much'

Pension reforms

Vijaya Bank posts 39% growth