Underdetermined systems of equations in which the minimum norm solution needs to be computed arise in many applications, such as geophysics, signal processing, and biomedical engineering. In this article, we introduce a new parallel algorithm for obtaining the minimum 2-norm solution of an underdetermined system of equations. The proposed algorithm is based on the Balance scheme, which was originally developed for the parallel solution of banded linear systems. The proposed scheme assumes a generalized banded form where the coefficient matrix has column overlapped block structure in which the blocks could be dense or sparse. In this article, we implement the more general sparse case. The blocks can be handled independently by any existing sequential or parallel QR factorization library. A smaller reduced system is formed and solved before obtaining the minimum norm solution of the original system in parallel. We experimentally compare and confirm the error bound of the proposed method against the QR factorization based techniques by using true single-precision arithmetic. We implement the proposed algorithm by using the message passing paradigm. We demonstrate numerical effectiveness as well as parallel scalability of the proposed algorithm on both shared and distributed memory architectures for solving various types of problems.