PNB ‘has headroom’ to raise Rs7000 crore

The country's second largest public sector lender, Punjab National Bank, on Wednesday said it could raise up to Rs7,000 crore from bonds to fund growth plans.

"We have headroom for raising this amount from tier II bonds, and funds would be raised depending on the requirement," PNB chairman and manging director K R Kamath told a news agency.

Asked about plans of raising funds in near future, Kamath said, "Definitely the rate of interest is conducive now. If we foresee the interest rate hardening then we might raise some capital." As the bank has sufficient headroom, it is a question of specific numbers and timing, he said.

Last month, the bank raised Rs700 crore from bonds to fund credit growth. The bank raised Rs500 crore by issue of upper tier II bonds, while remaining Rs200 crore was raised through issue of tier I perpetual bonds.

Talking about extension of the housing loan bonanza, Kamath said, "It is more of reaching out to people emotionally because people would like to commit themselves to new ventures like buying a house either at festive times like Christmas, New Year, Makar Sankranti or Pongal. Then you are there by giving them small discount."

Last week, PNB extended housing loan coverage from Rs30 lakh to Rs50 lakh under its festival bonanza offer for 2009. As a part of its offer, the bank charges a discounted interest rate of 8.50 per cent for fixed loans.

Besides this, the bank would also offer complete waiver of processing fee and documentation charges. The margin on housing loans up to Rs20 lakh has also been slashed to 15 per cent, Kamath added.