New Delhi: Public Finance Corporation (PFC), a public sector unit, has decided to make its formal entry into banking services. The company will determine its future course of action on the basis of recommendations by a consultancy firm, which will be appointed by the company after completion of the modalities of public offer.

In the meantime, it is expected that the RBI would also come up with its policy on banking licence.

Satnam Singh, CMD, PFC said, “The whole scenario for foraying into banking services will get clear in next two-three months.”

According to the PFC head, entry into banking sector is nothing but expansion of their business.
“The company is allocating Rs 32-33 thousand crore to power sector. The company is willing to trade into equity. Also, the company is yet to get ‘clearances’ from the Ministry of Power for making equity investments in both private and public sector power projects,” he said.

PFC is a financial institution providing loans to power companies. As per the disinvestment policy of the government, the follow-up public offer (FPO) of PFC opened on Tuesday. Investors can still apply for it as the offer closes on May 13.

The company is expected to raise funds worth Rs 4,500 to 4,700 crore through the offer. Besides, the Central government is likely to accrue Rs 1,100 crore as its share.

PFC follow-on offer is the first case of disinvestment by the government in the current fiscal. Thereafter, there are plans to bring FPO of SAIL and ONGC in June and July respectively.

Later, government also plans to issue shares of other PSUs including Hindustan Corporation, National Building Construction Corporation (NBCC), and Rashtriya Ispat Nigam Limited (RINL).

The government plans to mop up Rs 40,000 crore through disinvestment programme in 2011-12.

JPN/Bureau