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Punjab National Bank is likely to raise up to Rs 2000 crore through the issuance of additional tier-1 bonds this week as the state-owned lender looks to raise capital amid firm credit growth.

The bank’s bond issuance is likely to have a base size of Rs 500 crore and a greenshoe option of Rs 1,500 crore, market sources said, adding that bidding for the bond sale would take place on March 21. The AT-1 bonds are likely to have a call option after 5 years.

The securities are rated AA+ by Crisil and India Ratings, the sources said.

With bank credit growth having persistently outstripped deposit growth for almost two years, lenders face pressure to mobilise capital to finance the firm demand for loans.

The latest Reserve Bank of India data showed that as of February 23, bank credit growth was at 16.5% year-on-year while deposit growth was at 12.5% over the same period. The credit and deposit numbers exclude the impact of the merger between HDFC and HDFC Bank.

  • Published On Mar 20, 2024 at 07:56 AM IST

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