PNB to sell its entire stake in ARCIL; all you need to know

Punjab National Bank (PNB) has decided to sell its entire stake in the Asset Reconstruction Company (India) (ARCIL) at an agreed price. PNB currently has 3,25,06,486 equity shares or 10.01 percent shareholding in ARCIL, which it plans to sell. The bank plans to complete its divestment by the end of December this year. After the divestment is over, PNB won’t be a shareholder in ARCIL anymore. The transaction will be done via cash. PNB is exiting ARCIL in compliance with the Reserve Bank of India (RBI) guidelines and its divestment is subject to the central bank’s approval. The permission will be granted after the execution of share purchase agreement (SPA) between PNB and the buyer to whom the bank will give its 10.01 percent stake in ARCIL. In the regulatory filing, PNB stated that the RBI had reviewed the policy on investment by banks in ARCs. It went on to say that the RBI has decided that banks can only sponsor one ARC. PNB added that the investment of the bank should be less than 10 percent of the paid-up equity capital of the ARC subject to extant prudential norms on investment. The bank further stated that in order to comply with the given guidelines and according to the market scenario, “the bank has decided to sell its entire stake of ARCIL at an agreed price.” Established in 2002, ARCIL is one of the leading ARCs in India. ARCIL reported a net income of Rs 3.04 crore in FY22. In the previous fiscal year, it had earned a total income of Rs 1.73 crore. ARCIL managed to have a total income of Rs 1.66 crore in FY20. The organisation has been showing a consistent growth in its net income. The share price of PNB stood at Rs 36.60 on the National Stock Exchange at the end of the trading session today, indicating a jump of 4.87 percent. The bank had a net profit of Rs 308 crore during the first quarter of FY23. This is 69.8 percent lower than the profit of Rs 1,023 crore earned in the corresponding quarter a year ago. The interest earned by the bank also tumbled to Rs 18,757-crore in the June 2022 quarter as against Rs 18,929 crore in the first quarter of FY22. Read all the Latest News , Trending News ,  Cricket News , Bollywood News , India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.