PNB may raise Rs 7,000 cr from bonds

The country's second largest public sector lender, Punjab National Bank, today said it can raise up to Rs 7,000 crore from bonds to fund growth plans.

"We have headroom of raising Rs 7,000 crore from Tier II bonds and funds would be raised depending on the requirement," PNB Chairman and Manging Director K R Kamath told PTI.

Asked about plans of raising funds in near future, Kamath said, "definitely rate of interest is conducive now. If we forsee interest rate hardening then we can raise some capital."

The bank has sufficient headroom so it is a question of specific number and timing, he said.

Last month, the bank raised Rs 700 crore from bonds to fund credit growth. The bank raised Rs 500 crore by issue of upper tier II bonds while remaining Rs 200 crore was raised through issue of tier I perpetual bonds.

Talking about extension of housing loan bonanza, Kamath said, "It is more of reaching out to people emotionally because people would like to comit new venture like house either at the Christmas, New Year or Makar Sankranti or Pongal then you are there by giving them small discount."

Last week, PNB extended housing loan coverage from Rs 30 lakh to Rs 50 lakh under its Festival Bonanza Offer 2009. As a part of its offer, the bank charges discounted interest rate of 8.50 per cent for fixed loans.