State-owned Punjab National Bank (PNB) on Tuesday said its shareholders have approved a proposal to raise up to ₹7,000 crore through share sale to enhance its capital base.

Besides, the shareholders cleared the opening balance sheet of the amalgamated bank as on April 1, which is post amalgamation of Oriental Bank of Commerce and United Bank of India into PNB, the lender said in a regulatory filing.

Shareholders at the annual general meeting approved the proposal for “raising of equity share capital for an amount up to ₹7,000 crore through Qualified Institutional Placement (QIP)/Further Public Offer (FPO)/Rights Issue or such other permitted mode as may be deemed appropriate depending upon market conditions,” it said.

PNB is planning to hit the capital markets in the fourth quarter of this financial year to raise funds to help meet growth needs and regulatory requirements.

The bank had a capital adequacy ratio of 14.14 per cent at the end of March 2020.

The board also approved appropriation of accumulated losses of ₹28,707.92 crore from the share premium account of the amalgamated bank.

PNB amalgamated Oriental Bank of Commerce (OBC) and United Bank of India with itself, effective April 1 this year. With the merger, the bank now has about 11,000 branches, more than 13,000 ATMs, one lakh employees, and a business mix of over Rs 18 lakh crore.

Total domestic business of PNB at the end of March 2020 stood at ₹11.81 lakh crore.

Pursuant to the amalgamation of OBC and United Bank of India, PNB’s holding has exceeded 10 per cent in six companies and five ventures capital funds.

The RBI has accorded approval to hold these investments and its directions will be implemented within the given timeframe, it added.

The government of India currently holds 85.59 per cent stake in the bank.

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