With the successful merger of Oriental Bank of Commerce and United Bank of India with itself, Punjab National Bank has started focussing on growth and planned a series of capital raising initiatives, including rights issue and FPO, in the third quarter this fiscal.

At the moment, the bank is adequately capitalised with the capital adequacy ratio of 14.04 per cent at the end of December 2019, PNB Managing Director S S Mallikarjuna Rao told PTI.

The government provided Rs 16,091 crore to PNB and Rs 1,666 crore to United Bank of India in September for enhancing the capital base of these two lenders.

Besides, Punjab National Bank (PNB) raised Rs 1,500 crore from Tier II bonds in December.

Going forward, Rao said, the bank plans to further infuse capital during the current fiscal including through follow-on public offer (FPO).

Sharing details of the capital raising plan, Rao said the bank is looking to raise Rs 3,000 crore through additional Tier-I (AT-1) bonds in the next couple of months.

"The board of the bank has already given approval and now we are contemplating approval from the government of India," he said, adding the bank is preparing to raise AT-1 bonds during the first quarter itself, depending on how quickly normalcy is restored.

Under the Basel-III norms, AT-1 bonds come with loss absorbency features, meaning that in case of stress, banks can write off such investments or convert them into common equity if approved by the RBI.

AT-1 bonds, which qualify as core or equity capital, are one of the means of raising capital by banks.

In the third quarter of the current fiscal, Rao said, "we are planning to go to the market either of QIP or follow on public offer or for the rights issue".

Talking about the merger, Rao said, the highest priority is to provide uninterrupted customer service to account holders of the merged entity even in these challenging times.

"Due to lockdown triggered by the outbreak of coronavirus, the only difference is that we wanted to change the branding and have physical meetings with customers as well as employees which has now been postponed. From the customer point of view it is business as usual," he said.

Once the lockdown is lifted, he said, the bank will enhance its customer outreach through various communications.

With the merger of Oriental Bank of Commerce and United Bank of India on April 1, PNB has become the second largest lender after State Bank of India with total business of over Rs 18 lakh crore. It now has over 11,400 branches and employee strength of about 1 lakh.

On synergy, he said, with the gain in size, the bank will have greater appetite to satisfy the requirement of corporate clientele.

Technology upgradation and larger presence across geography will be the other benefits of the merger, which the bank will reap in the future, he added.