PNB Board To Meet On Sept. 5 To Consider Merger With OBC, United Bank
A Punjab National Bank office building stands in New Delhi, India. (Photographer: Anindito Mukherjee/Bloomberg)

PNB Board To Meet On Sept. 5 To Consider Merger With OBC, United Bank

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Punjab National Bank on Saturday said its board of directors will meet on Sept. 5 to consider the lender's merger with Oriental Bank of Commerce and United Bank of India.

In an exchange filing, Punjab National Bank said “the meeting of board of directors of the bank is scheduled to be held on 5th September, 2019” for considering some key agenda.

The board will meet to “consider the amalgamation of the Oriental Bank of Commerce and United Bank of India into Punjab National Bank”, the statement said.

Besides, it will also consider capital infusion of up to Rs 16,500 crore by the government by way of preferential issue of equity share and fixing date of extra ordinary general meeting for obtaining shareholders’ approval in this regard at a price determined in terms of Securities and Exchange Board of India (Issue Of Capital And Disclosure Requirements) Regulations, the bank's filing said.

Meanwhile, Corporation Bank, which is going to be merged with Union Bank of India along with Andhra Bank, too said a board meeting will be held to consider the merger.

In a stock exchange filing, it said “a meeting of the Board of Directors of the Bank to consider the amalgamation will be convened by the Bank in due course”.

The government on Friday unveiled a mega plan to merge 10 public sector banks into four as part of plans to create fewer and stronger global-sized lenders as it looks to boost economic growth from an over six-year low.

Also read: Public Sector Bank Mergers: The Real News Is Elsewhere

Finance Minister Nirmala Sitharaman, who had last week announced tax sops and measures for sectors such as auto, announced four new sets of mergers -- Punjab National Bank, Oriental Bank of Commerce and United Bank of India will combine to form the nation's second-largest lender; Canara Bank and Syndicate Bank will merge; Union Bank of India will amalgamate with Andhra Bank and Corporation Bank; and Indian Bank will merge with Allahabad Bank.

The exercise, seen together with the previous two rounds of bank consolidation, will bring down the number of nationalised public sector banks to 12 from 27 in 2017. This, the government feels, will make bank balance sheet stronger with greater capacity to lend.

Five out of ten lenders, which are part of the mega consolidation exercise, have stated that their board will convene shortly to take decision on the amalgamation.

Andhra Bank in a Bombay Stock Exchange filing said that it has received a communication from Ministry of Finance to the effect that the alternative mechanism, in consultation with the Reserve Bank of lndia, has decided that Union Bank of lndia, Andhra Bank and Corporation Bank may consider the amalgamation of Andhra Bank and Corporation Bank into Union Bank of lndia.

“Accordingly, a meeting of the Board of Directors to consider the amalgamation will be convened by the bank in due course,” it said.

United Bank of India and Allahabad Bank too in a separate filings informed that their board of directors would meet to consider the amalgamation.

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