New Delhi, Jan. 21: The Cabinet today approved the acquisition of ailing Nedungadi Bank by Delhi-based Punjab National Bank.
A government spokesman said, “This has been done by the Cabinet under Section 45 of the Banking Regulation Act, 1949 to safeguard the interest of the depositors of Nedungadi Bank.”
The official also said the bank will need a capital infusion of Rs 125 crore to achieve the minimum capital adequacy ratio level of 9 per cent as pegged by the Reserve Bank of India (RBI).
Earlier, in November, the RBI had placed the Kerala-based Nedungadi Bank under a moratorium, freezing its assets, until February 1, 2003, thereby barring withdrawal of deposits not exceeding Rs 5,000 by depositors for the period.
“The government approval will help to speed-up the physical acquisition process since we will resume normal banking transactions of Nedungadi Bank from February 1, 2003,” a top PNB official told The Telegraph.
Nedungadi Bank has a total of 175 branches, of which around 100 branches are located in Kerala itself whereas PNB has a network of only 20 branches in the state out of its network of 3,864 branches and 192 ATMs.
Shipping Corp proposal okayed
The Cabinet today approved a proposal allowing Shipping Corporation of India (SCI) to pull out of the LNG transportation joint venture with the government of Oman and Mitsui OSK Lines of Japan by selling its 20 per cent stake for $ 11 million.
The sale will take place at par value to Mitsui. The Japanese company will also repay SCI a $ 1.6 million loan along with interest, which had been extended to the joint venture. The government of Oman and Mitsui have a 40 per cent stake each in the joint venture called Greenfield Holding Co.
In another decision, the Cabinet cleared the proposal to ratify the Copenhagen and Montreal amendments to the protocol on controlling ozone depleting substances such as hydrochlorofluorocarbons, (HCFCs) hydrobromoflourocarbons (HBFCs) and methylbromide.
This step has formally reiterated India’s commitment to the Montreal Protocol for protecting the earth’s ozone layer. The country will now have access to trade and technology benefits under the Montreal protocol. Funds for projects using HCFC and methyl bromide will also become available under this agreement.