Punjab National Bank has hiked the spread on loans to commercial real estate and large non-deposit taking NBFCs by 50 basis points to 4 per cent over the benchmark prime lending rate (BPLR). | |
| The hike in rates is aimed making lending to these sectors unattractive and addressing higher provisioning norms on standard loans after the bank hit the internal ceiling on lending to real estate and NBFCs. The move seeks to curb speculative demand in these sectors. |
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| The bank had only last month raised its BPLR by 50 basis points to 12.25 per cent. One basis point is one-hundredth of one per cent. |
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| The RBI had raised the provisioning requirements on standard loans to real estate (excluding residential housing loans) and large ND-NBFCs with asset size of Rs 100 crore to 2 per cent in its January review. The risk weight for banks' exposure to such NBFCs was also raised to 125 per cent from the existing level of 100 per cent. |
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| "We had not addressed higher provisioning at the time of fixing our PLR last month. We have also reached our limits in exposure to these sectors, which are revised from time to time. So to cover CAR, higher provisioning requirements and address the financing needs of real cases, we have raised rates," said a PNB official. |
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