The Cabinet has approved the amalgamation of privately-owned cash-strapped Nedungadi Bank with leading state-run Punjab National Bank, a government spokesman said on Tuesday.
"The Cabinet on Tuesday approved amalgamation of Nedungadi Bank Ltd with Punjab National Bank," Sahab Singh told reporters after a Cabinet meeting. "The scheme for amalgamation proposes that the business, properties, assets and liabilities of Nedungadi Bank would be transferred to PNB."
New Delhi-based PNB is India's second-largest bank by number of branches. Nedungadi Bank reported a net loss of 678 million rupees in the year to March 2001 and its non-performing assets have shot up, the spokesman said.
The news boosted both bank's shares.
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