Punjab National Bank (PNB) plans to raise capital later this year to strengthen its balance sheet, and expects nearly 5-6 per cent of its loan book to be eligible for restructuring under a new one-time window opened by the RBI.
PNB expects the RBI to not extend the moratorium on terms loans beyond August 31, even as it is open to making restructuring available for individual borrowers facing reduction in incomes.
“Roughly about 5-6 per cent of our credit book may be eligible under the restructuring profile,” SS Mallikarjuna Rao, MD and CEO, PNB told reporters through a video conference. Exact details on restructuring should be clear by September after guidelines from an expert committee led by former banker KV Kamath are announced by the RBI, he said.
While restructuring of corporate loans will be based on the KV Kamath panel’s guidelines, banks will put in place their board-approved policies to deal with stressed loans to individuals.
Rao said PNB does not plan to approach the Centre for capital support, rather it intends to raise funds from the market. The bank has shareholders’ approval to raise Rs 14,000 crore, comprising Rs 7,000 crore of the equity, from the market. “ … We are confident of going to the market with respect to tier-II and tier-I bonds during Q2 and Q3, while we are looking at the end of Q3 or during Q4 for QIP,” he said.