Panjab National Bank, a state run entity has identified at least three prominent properties in the capital that it plans to monetise to mop up around Rs 1,800-2,000 crore, while insisting that it is adequately capitalised to bear the impact of Rs. 11,300 crore frauds. According to the sources, there are speculations about PNB that they might get fresh assistance from government.
Sources have even told that apart from Bhikaji Cama Place, the bank has also identified places for office purposes in Tolstoy Marg in Central Delhi as well as in Rajendra Place for Delhi Zonal office as its potential assets to be put on the block to raise resources from noncore assets.
Even there are properties in other parts of country which are on radar but the sources have revealed that the lender is unlikely to sell his some of its heritage buildings in area such as Chandni Chowk. To the remaining properties, individual valuation was not done immediately but bulks of funds are expected to come from Bhikaji Cama Place.
Sources said that monetisation of non-core assets, including surplus real estate has been in the following repeated prodding by the government that has been pumping in equity into public sector banks. According to the sources, the government wants the bank to bear amount that may arise due to the fraud, which allegedly involved issue of bogus letters of undertaking by rogue employees to companies owned by diamond billionaires Nirav Modi and Mehul Choksi.
Current rules require banks to immediately recognise a fraud with the full provision to be made. Punjab National Bank managing director Sunil Mehta has, however, comforted employees by saying that the impact would be limited to a marginal erosion in the bank's capital base - to the extent of one percentage point of the core capital. While the bank is to receive equity of close to Rs 5,500 crore, the bank has also identified other assets, such as its stake in primary dealership arm Punjab National Bank Gilts and mortgage subsidiary PNB Housing Finance. The bank has already reduced its stake in the home finance arm to a shade under 33%. It is unlikely that the bank will pare it below 30%, sources said.
Courtesy/By: Trisha Mukherjee
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27 Feb 2018
