SBI, PNB to hit the bourses to meet capital needs

INDIA'S largest public sector lender State Bank of India (SBI) and Punjab National Bank (PNB) will soon hit the markets to meet their capital requirements. This was disclosed by financial services secretary GS Sandhu. He said that the government is fine tuning a startegy for public sector banks (PSBs) to raise resources from the market.
At present the government owns 58.60 percent stake in...
SBI and 58.87 percent in PNB, and is talking to SBI and PNB on their public offers.
"We are devising a strategy on how much stake dilution can be done in staterun banks. This will be staggered over a period of five years," he said.
PSBs require additional common equity of Rs 2.4 lakh crore by 2019.
Finance minister Arun Jaitley had earlier in his budget speech said that in order to meet the capital requirements of PSBs, the government proposes to raise capital by sale of shares largely through the retail route while preserving the public ownership.
The finance ministry has also pitched for consolidation in PSBs and is exploring various proposals in this regard. "We will play a more proactive role," said Sandhu. He expressed the hope that the SBI should be able to merge some of its associates this fiscal.
"Bank of India has also given a proposal to use its real estate for raising additional capital," said Sandhu.
The finance ministry is also in discussion with the power ministry and National Highways Authority of India ( NHAI) to set up sector-specific asset reconstruction companies (ARCs).
"We are working on the details for these two ARCs which will be jointly funded by PSU companies and will take over projects which are stuck and revise these assets," said Sandhu.