Punjab National Bank (PNB) on Thursday said it has purchased 1.8 crore shares of the proposed National Asset Reconstruction Company Ltd (NARCL).

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"Punjab National Bank has subscribed to 1,80,00,000 shares of National Asset Reconstruction Company Ltd (pending execution of investment agreement)," the bank said in a regulatory filing.

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NARCL is yet to become operational. It will take over the bad assets of the banks in its own account for speedy resolution of such assets.

PNB said the shares have been acquired at a cash consideration of Rs 10 per equity share (at par) and it will complete the transaction by the end of the last quarter of this fiscal.

The lender said the investment of equity stake of 12.06 per cent by it in NARCL will be reduced to 9 per cent by December 31, 2021.

Earlier this month, the government cleared the proposal to provide government guarantee worth Rs 31,000 crore to security receipts issued by the NARCL.

The NARCL will pay up to 15 per cent of the agreed value for the bad loans in cash and the remaining 85 per cent would be government-guaranteed security receipts.

It will be 51 per cent owned by PSBs and the remaining by private sector lenders.

State-owned Canara Bank has expressed its intent to be the lead sponsor of NARCL with a 12 per cent stake.