Punjab & Sind Bank (PSB), a public sector bank, will raise capital in the third quarter of this fiscal to the tune of ₹250 crore to fund its business growth, Swarup Kumar Saha, MD and CEO, has said.
This capital raising in the form of pure equity will happen through the qualified institutional placement (QIP) route, Saha told businessine here.
“I will try to bring QIP in Q3. Q2 will be used for meeting people. Now we have the merchant bankers. They are on board. The legal team is also in place. We will do roadshows in Q2,” Saha added.
Under a QIP, equity shares are available only to institutional investors. For a QIP to take place, the company (or a bank in this case) must already have its shares listed on a stock exchange.
The QIP allows an Indian-listed company to raise capital from domestic markets without the need to submit any pre-issue filings to market regulators.
Saha said that the Central government — the main shareholder in PSB — has already given its green signal for the capital raising.
It may be recalled that Saha said in May this year that the bank had written to the Central Government seeking its approval for capital raising.
Saha made it clear that PSB was only looking at pure equity and not AT-1 bonds for capital raising.
“It will only be through the pure equity route. I have capital much above the regulatory requirement. Why should I go in for AT-1 bonds and raise my cost?”, he said.
Credit cards
PSB, which had recently entered the credit card segment through a co-branding tie up with SBI Card, has so far this year distributed 9,000 credit cards.
“We want to distribute 1 lakh credit cards by March 2024. The potential is huge”, Saha said.
Finacle upgrade
Saha also said that PSB would soon upgrade to Finacle Version 10 (the digital banking platform) from the current version 7.
“We expect the upgrade to happen by October. I am nearly ready as of today. Now the testing phase is going on”, he said.
RBI MONETARY POLICY
Saha said that he expects the RBI to maintain a pause at the latest Monetary Policy Committee (MPC) review on August 8–10. He also felt that the RBI would not make any cut in policy rates this fiscal year.