Cabinet Committee on Economic Affairs(CCEA) today gave its ex-post facto approval for infusing the capital amounting to Rs.500 crore in Punjab & Sind Bank and permitted the Bank to come out of narrow banking and the embargo of “Prompt Corrective Action” (PCA), as also to ensure providing an amount of Rs.500 crore in the first batch of supplementary demands for grants for the year 2005-06.
This will enable the Bank to:
§ Bring down the percentage of gross and net NPA to 8% and 2% respectively by 31.3.08
§ Have reasonable growth (12% to 15%) in the lending operations and to generate profits to further strengthen the capital base of the bank
§ Comply with Basel-II norms by March’2006 (partly) and March’2007 (fully) where the requirement of additional capital is expected to be more than Rs.300 crore
§ Invest adequate amount in Information Technology with a view to provide technology-based service to its clients as well as put in place MIS and risk-based systems in the bank to meet regulatory forbearance.
§ Reduce dependence on Government of India for its future capital requirements
§ Improve the financial position of the Bank so that the bank can come out with a Public Issue in about two years to raise capital for expansion of the size of the Balance Sheet.
YSR/DS/LV