Punjab & Sind Bank rises 13% as govt likely to infuse funds in lender

NEW DELHI – Shares of Punjab and Sind Bank gained 13 per cent in early trade on Wednesday after reports quoted a Finance Ministry official as saying that the government will likely infuse Rs 4,100 crore in the bank this fiscal.

Following this development, the stock surged 12.85 per cent to Rs 18 on BSE.

In other news, the public sector lender said that it has declared IL&FS Tamil Nadu Power Company, with dues of over Rs 148 crore, as a fraud account and reported it to the Reserve Bank.


Investors took heart after the state-owned bank said it has already made provisions amounting to Rs 59.54 crore, as per the prescribed prudential norms.

As per the bank's policy on determination and disclosures on material events, Punjab and Sind Bank said it has declared this non-performing account as a fraud account.

"It is informed that an NPA account, viz IL&FS Tamil Nadu Power Company Ltd with outstanding dues of Rs 148.86 crore has been declared as fraud and reported to RBI today as per regulatory requirement," the lender said in a regulatory filing.

The company was set up as a special purpose vehicle (SPV) by the debt-laden Infrastructure Leasing & Financial Services Ltd (IL&FS) under its energy platform IEDCL for implementation of thermal power projects at Cuddalore in Tamil Nadu.

The bank’s stock had added 1.9 per cent on Tuesday after the central government said that it would infuse Rs 4,600 crore in the lender in the current financial year through preferential allotment of equity shares.