PNB Raised Rs. 1500 crore bonds

On Thursday, Punjab National Bank said that it has raised Rs1,500 crore by the issuance of Basel III compliant bonds. The funds generated will be used for the expansion of the business.

In a regulatory filing, PNB said “Our Bank has issued and allotted Rs1,500 crore Tier – II Basel III compliant capital bonds at a coupon of 8.15% per annum on private placement basis.”  The bank said that it has issued 15,000 redeemable Basel III compliant Tier II bonds in the nature of debenture of Rs10 lakh each.

The bank would need to strengthen and improve the processes of planning of their capital. This is required to comply with the Basel III capital regulations.

These norms have been inserted to mitigate concerns on the potential stresses on asset quality. Also, it is to check the later impacts on the profitability and performance of banks.

Since April 1, 2013, the Indian banking system has been implementing Basel III standards in phases. Also, these will be expected to fully implemented by  March 2020.