RBI allows foreign investors to buy PNB shares

MUMBAI (TIP): The Reserve Bank of India (RBI) on Friday lifted the almost seven year old restriction on fresh purchase of shares of state-owned Punjab National Bank by foreign investors.

The RBI on Monday notified that the aggregate foreign share holdings by foreign institutional investors/NRIs /PIOs/FDI and others under Portfolio Investment Scheme (PIS) in PNB have gone below the prescribed threshold caution limit stipulated under the extant FDI policy.

“Hence, the restrictions placed on the purchase of shares of the above company vide Press Release No 2008-2009/1914 dated May 22, 2009 have been withdrawn with immediate effect,” the central bank said.

Reeling under bad loans, PNB posted the largest quarterly loss by any public sector lender at Rs 5,367 crore for the fourth quarter ended March 31, 2016.

A three-fold surge in provisioning for bad loans, including those extended to power discoms and for foodgrain purchase in Punjab, were the main drag on the bank’s performance and it expects the pain to continue for some more time.

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The second-largest public sector bank posted a net profit of Rs 306.56 crore in the corresponding period of 2014-15.

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