Scam-hit PNB in talks with govt agencies to sell old Delhi headquarters

People stand in front of the logo of Punjab National Bank outside a branch of the bank in New Delhi | Photo: Reuters

State-run Punjab National Bank (PNB) on Wednesday said it is in negotiation with a few government departments, including income tax and central excise, to sell its erstwhile headquarters situated at the Bhikaji Cama Place in New Delhi.

Its managing director and chief executive officer, Sunil Mehta, today said the bank is going for the second round of valuation of the south Delhi property due to high demand.

"It (talks) is at the stage of negotiation. There are three government agencies that we are in discussion with. Now we are negotiating for better valuations because we are finding good interest in it," Mehta told reporters here today.

He said the departments the bank is in negotiations with include income-tax and central excise.

PNB executive director L V Prabhakar said the first valuation of the property was done five to six months back but since then the property rates have gone up and the demand has also increased, and hence the bank is going for revaluation.

The lender expects to raise nearly Rs 7-8 billion from the sale of its earlier head office in the national capital, a bank official said.

The bank has set a target to garner Rs 86 billion from monetisation of its non-crore assets during FY19.

It had raised Rs 1.67 billion in the June quarter from the sale of offices and its investment in Icra, Crisil and BSE.

The bank has appointed merchant banker for selling its stake in PNB Housing Finance, according to Mehta.

PNB owns 32.79 per cent stake in PNB Housing Finance, while Carlyle Group, through its investment vehicle Quality Investment Holdings, owns 32.36 per cent of the paid up equity share capital.

The bank and Carlyle Group last month had announced to initiate the process to sell at least 51 per cent stake in PNB Housing Finance.

Mehta said the bank will also dilute minority 4 per cent stake in PNB Metlife Insurance as part of price discovery mechanism.

It is also looking to shut its four representative offices in Sydney, Dhaka, Dubai and Shanghai soon.

In the quarter ended June, the lender reported a net loss of Rs 9.4 billion due to higher provisioning for the multi-crore Nirav Modi scam and NPAs despite a recovery of Rs 84.45 billion of bad loans.

It's total provision in the quarter stood at Rs 51.35 billion. Of this, the provision for the Nirav Modi fraud was Rs 18 billion. It made a recovery of Rs 84.45 billion.

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel