PNB raises Rs 1,500 cr via bonds, funds to be used for business expansion

State-owned Punjab National Bank (PNB) on Thursday said it has raised Rs 1,500 crore by issuing Basel III compliant bonds.

The bank will use the funds for business expansion.

"Our Bank has issued and allotted Rs 1,500 crore Tier - II Basel III compliant capital bonds at a coupon of 8.15 per cent per annum on private placement basis," PNB said in a regulatory filing.

The lender has issued 15,000 redeemable Basel III compliant Tier II bonds in the nature of debenture of Rs 10 lakh each, it said.

To comply with Basel III capital regulations, banks need to improve and strengthen their capital planning processes.

These norms are being implemented to mitigate concerns on potential stresses on asset quality and consequential impact on performance and profitability of banks.

Indian banking system has been implementing Basel III standards in phases since April 1, 2013 and are expected to fully implement these norms by March 2020.