Punjab National Bank (PNB) has finalized the sale of its entire stake in India SME Asset Reconstruction Company Ltd (ISARC), marking a significant step in its ongoing strategy to streamline non-core assets and comply with regulatory norms. The bank will receive ₹340.8 million (₹34.08 crore) from this transaction, as confirmed in regulatory filings and official statements.
Key Highlights:
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Full Stake Sale: PNB has sold its entire 20.90% stake in ISARC, exiting its associate company status in the asset reconstruction firm.
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Transaction Value: The sale will fetch PNB ₹34.08 crore in cash consideration, strengthening the bank’s capital position and liquidity.
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Regulatory Compliance: The divestment aligns with Reserve Bank of India (RBI) guidelines, which restrict banks to sponsoring only one asset reconstruction company (ARC) and require stakes in other ARCs to remain below 10%. This move ensures PNB’s compliance with these prudential norms.
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Strategic Focus: The sale is part of PNB’s broader effort to pare down non-core investments, optimize its asset portfolio, and focus on core banking operations.
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Definitive Agreement: The bank entered into a binding agreement for the sale on May 13, 2025, with completion expected soon.
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Market Reaction: The announcement has been well-received, with PNB shares closing higher, reflecting investor approval of the bank’s proactive capital management.
This divestment not only fulfills regulatory requirements but also positions PNB to better deploy resources towards growth and core business priorities.
Sources: Rediff Money, PTI, India Infoline