Compensation for the shareholders of the erstwhile Nedungadi Bank will be paid only after completing the due diligence process and obtaining an approval from the Reserve Bank of India (RBI), said KR Kamath, chairman and managing director of Punjab National Bank (PNB).
Replying to a query on the issue, he said, “We are in the process of clearing the liabilities of Nedungadi Bank. After the clearance, the balance will be given to the shareholders. Our first preference is to clear all the dues of Nedungadi Bank. We have not fixed any timeframe for this as an RBI nod is also required.”
PNB had taken over the Kozhikode-based Nedungadi Bank in 2003 as the latter plunged into deep financial crisis. The issue of compensation to thousands of shareholders of teh bank has not been settled so far.
As the bank was taken over by PNB as per the instruction of the RBI, there was no transfer of shares. So, the shareholders are still in possession of the shares, awaiting compensation from PNB. A group of shareholders discussed the issue with Kamath today.