Punjab National Bank to raise Rs 6,000 crore through bonds
Punjab National Bank (PNB) is set to raise up to Rs 6,000 crore through bonds.
In a regulatory filing, the state-owned lender said that its board on Friday approved raising capital by issuing Basel-III compliant additional tier-1 (AT-1) bonds or tier-II bonds or a combination of both, in one or more tranches up to an amount of Rs 6,000 crore.
AT-1 bonds or perpetual bonds were in the spotlight this March when the finance ministry asked Sebi to withdraw its order on asking mutual funds to treat these bonds as 100-year instruments.
The department of financial services (DFS) had issued a letter to the market regulator asking it to do away with the valuation rule, saying that it could disrupt the bond market and weaken the efforts of banks to raise additional funds through these bonds to shore up their capital base.
After the ministry’s opposition, Sebi relaxed the valuation norms and said that the maturity of these bonds would be 10 years till March 31, 2022. It will rise to 20 years from April 1 that year to September 30, 2022, and to 30 years from October 1, 2022 till March 31, 2023. From April 1, 2023 onwards, they will be considered as 100 years from the date of issuance of the bond.
Early this month, the State Bank of India (SBI) had said that it raised Rs 4,000 crore from AT1 bonds, making it the first such issuance after Sebi’s new regulations. Others like Axis Bank and HDFC Bank have also raised capital through these bonds from the overseas markets.
PNB was recently in the news when it waived all service charges and processing fee on retail products as part of its festival season offering. The lender now offers an interest rate starting at 6.80 per cent on home loans and 7.15 per cent on car loans.
In the festive offer, the bank will waive all service charges/processing fees and documentation charges on its retail products such as home loans, vehicle loans, personal loans, pension loans and gold loans.
The bank is also offering personal loans starting at 8.95 per cent, which is one of the lowest in the industry.
It also announced offering home loan top-ups at an attractive rate of interest. PNB said customers can avail these offers till December 31, 2021.