The stock split fever seems to be catching up among the banks, both public and private, with Punjab National Bank (PNB) becoming the latest bank to go for a 5:1 stock split.

The bank has also decided to raise funds to meet Basel III guidelines and to meet its business needs through QIP/FPO/rights issue route.

In its filings with the stock exchanges, Punjab National Bank said that its board of directors had on September 19 gave in-principle approval to split the face value of its shares from Rs 10 into five shares of Rs 2 each (five shares for every one held).

PNB has become the sixth bank in recent months to go for a stock split to increase liquidity and to make the stock more affordable. Already, Axis Bank has split the face value of its shares from Rs 10 to Rs 2 and Jammu & Kashmir Bank had opted for a 10:1 split that has also been implemented.

Three other banks have announced 5:1 stock split in recent weeks - Corporation Bank, Canara Bank and ICICI Bank but the formalities for that are to be gone through and the record date is yet to be notified. PNB becomes the sixth bank to take recourse to stock split in recent weeks.

While the value of the stocks of Axis Bank and J&K Bank (pre-split) were high and ICICI Bank and PNB stocks are trading at high value, Corporation Bank and Canara Bank shares are trading at sub-Rs 400 levels even before the split.

PNB board also discussed the ways of raising capital to meet Basel-Ill guidelines and to finance its business requirements and opted to explore the possibility of raising capital through QIP/FPO/rights issue.

However, the exchange notification did not indicate any specific time-frame.

The shares of PNB are up by Rs 9.15 to Rs 986 on the BSE minutes after trading began.

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