Public sector lender Punjab National Bank (PNB) today said the bank has approved a fund infusion to the tune of 1,285 crore through preferential issue of shares to the government.

The board in its meeting today approved issuance of shares of face value of Rs 10 each on preferential basis in favour of government of India, aggregating to Rs 1,285 crore, subject to necessary approvals, the bank said in a filing on the Bombay Stock Exchange (BSE).

The capital infusion would raise government's stake in the bank. At present, the government of India holds 58% stake in PNB.

The bank will be holding an extraordinary general meeting of shareholders on March 20 to take up approval for the same.

Last year, PNB got a capital infusion of Rs 184 crore from the government.

In 2010-11, the government provided capital support to the tune of Rs 20,157 crore to public sector banks.

Most of the public sector banks got capital support from the government last fiscal. These banks included Bank of Baroda, Union Bank of India, Oriental Bank of Commerce, UCO Bank and Dena Bank.

It is to be noted that Financial Services Secretary DK Mittal had said the state-run banks would be requiring about Rs 3.5 lakh crore by 2021.

Shares of PNB closed at Rs 955.90, down 1.59% at the end of trading session on the BSE.