Preparation of Merger of PNB and Allahabad Bank

Two government banks, who are facing a debt crisis, are expected to get relief soon. According to information from the sources, the government has almost completed the preparations for the merger of PNB and Allahabad Bank . The merger of both banks can be effective till 1 April 2018 and the merger process will be completed by December 2017. This merger will benefit Allahabad Bank's investors much more. Under merger, Allahabad Bank will get two shares of PNB instead of 3 shares.

Under the merger, Allahabad Bank will reduce its NPA from Rs 7,000 crore to 5000 crore rupees.Allahabad Bank has bid for selling NPA of Rs 1641 crore At the same time, PNB can also sell an NPA of 11000-13000 crores to ARC. Also plans to sell PNB non-core assets.

After the merger of the two banks, branches of the new bank will be reduced by 25 per cent. Gross NPA will be reduced from 12.8 percent to 8.5 percent. The government will put a capital of Rs 7000-8000 crore in three phases. However, both the banks did not respond to the news of the merger.
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2 comments:

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