PNB cuts pension-based lending rate by 25 basis points to 6.55%

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The state-owned National Bank of the Punjab (PNB) announced today that it has lowered the pension-based lending rate from 25 basis points (bps) to 6.55%.

“The pension linked loan rate (RLLR) fell from 6.80% to 6.55%, with effect from September 17, 2021 (Friday),” the bank said in a regulatory filing.

RLLR was introduced in October 2019. It is a variable rate personal or retail loan linked to external benchmarks, such as the Reserve Bank of India (RBI) repo rate.

PNB shares closed on Friday at ??39.70 each on BSE, down 5.02% from the previous close.

What is the pension rate?

Repo is the rate at which the RBI lends money to commercial banks for their short-term needs.

Recently, PNB said its board approved the increase of ??6,000 crore by issuing bonds.

The decision was made at the board meeting on Friday.

In a regulatory filing, the bank said its board of directors had “approved the raising of capital through the issuance of additional Basel III level 1 (AT-1) bonds or level II bonds or combination of the two in one or more installments up to an amount of ??6,000 crores “.

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