Punjab & Sind Bank Raises Funds for Infrastructure Lending

State-owned Punjab & Sind Bank has successfully raised Rs 3,000 crore through the issuance of its maiden infrastructure bonds. This strategic move aims to expand the bank's infrastructure lending capabilities, aligning with the growing demand for infrastructure development in the country.

The bank received an overwhelming response, with total bids reaching Rs 6,031 crore against the base issue size of Rs 500 crore. Recognizing the strong investor interest, Punjab & Sind Bank decided to accept bids of Rs 3,000 crore at a coupon rate of 7.74 per cent per annum.

In line with the Reserve Bank of India guidelines, these 10-year bonds will be listed on the National Stock Exchange (NSE) for trading. The bonds, which are unsecured, subordinated, redeemable, non-convertible, taxable, and fully paid-up, have a face value of Rs 1 lakh each.

The allotment of bonds to successful bidders is scheduled for Friday. This issuance highlights the growing interest among domestic investors in infrastructure bonds, a trend observed across several banks in recent times. The exemption of infrastructure bonds from regulatory reserve requirements such as Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) makes them an attractive option for raising resources, allowing full deployment for lending activities.

Banks have increasingly favored infrastructure bonds over Additional Tier-1 and Tier-2 bonds due to their favorable pricing and the flexibility they offer in resource allocation.