PNB ready for second public offer

The Punjab National Bank (PNB) is ready to tap the market for the second time to raise more capital and is waiting for government's nod.

PNB intends to sell 5 crore shares and the value of the public offer is estimated at over Rs 1,100 crore going by the present price of the bank's shares.

"We are ready. But we are waiting for the government nod," PNB executive director K C Chakrabarty said today after signing an MoU with money transfer agent Western Union.

PNB, which had raised over Rs 165 crore 3 years ago, is planning to raise more capital to meet the stringent Basel-II norms requiring higher provisions for market, credit and operational risks by 2006.

Asked whether PNB was looking for more buy outs of banks, Chakrabarty said: "We are not thinking about acquisition unless the second offer comes and we mop up capital and meet the Basel-II norms."

However, Chakrabarty hastened to add that if government decides anything on M&A, PNB would consider it.

PNB had acquired ailing Nedungadi Bank last year and its board had also approved taking over of ailing IFCI early this fiscal, but the merger is yet to happen due to a number of legislative and other hurdles.

On interest rates, Chakrabarty said PNB's benchmark prime lending rate was not going to change as it was competitive. However, restructuring of deposit rates was an ongoing process.

To a higher end, the rates have hardened and on lower end it is still higher, Chakrabarty added.