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Informist, Wednesday, Aug. 19, 2026

 

--Sources: PNB plans to raise $1 bln via 3- or 5-year dollar notes in Sept

 

By Vaishali Tyagi and Aaryan Khanna 

 

NEW DELHI – Punjab National Bank plans to raise $1 billion through three- or five-year dollar-denominated bonds in September, officials told Informist on condition of anonymity. The public-sector lender is completing the due process for the dollar bond issuance, which may take more time, one official said. "Actually, we are in the process of raising, and the amount is around $1 billion, and the approval process is under consideration," a senior official in the bank said. 

 

The move comes against the backdrop of the Reserve Bank of India announcing swap facilities for external commercial borrowings of public-sector undertakings and offshore foreign currency borrowings of banks, offering a concessional rate of 1.5% per annum until Dec. 31.

 

The RBI's special measures to boost foreign capital inflows have attracted a total of $56.85 billion as of Thursday, the central bank said last week. Of this, banks have raised $2.81 billion through overseas foreign currency borrowings, while inflows through foreign currency non-resident (bank) deposits were at $52.30 billion.   

 

The bank's issuer default rating is 'BBB-' by Fitch Ratings and 'Baa3' by Moody's, according to the bank's website.

 

The coupon on the dollar bonds is expected to be competitive with what other banks have raised recently, the official said. The bank is aiming for better pricing, but the exact terms of the issue are not finalised yet, the official said. "Cost is one of the factors as well (that issuance is getting delayed)," the official said.

 

The official said there is no immediate urgency, but the bank would like to complete the issuance as soon as possible, as the offshore borrowing window remains open only till Dec. 31. The RBI had last week reduced the timeline for the concessional swap window for FCNR(B) deposits to Aug. 31 from Sept. 30 earlier. "ECB window is open till December... Everybody is pushing... we would like to do it (dollar bond issuance) as early as possible. But there are legal, cost, and other aspects," the official said.

 

The official said the bank has no plans to raise funds through domestic bonds as of now. "We are not considering any domestic fundraising in terms of bonds." Given the absence of any immediate capital requirement and surplus liquidity in the system, there is no immediate need to issue domestic bonds, he said. 

 

The New Delhi-based lender has not issued any domestic bonds so far in FY27 (Apr-Mar). State Bank of India is the only large lender to have tapped the market in FY27, raising INR 46.91 billion. On Jul. 29, Punjab National Bank's board approved raising up to $1.5 billion through bonds under its medium-term note programme. The bank will raise the funds through its International Financial Services Centre Banking Unit at Gujarat International Finance Tec-City.  

 

For the June quarter, the public sector bank's net profit rose 214% on year to INR 52.53 billion. On Wednesday, the bank's shares closed at INR 117.48 on the National Stock Exchange, up 0.8% from the previous close. 

 

Other major banks, including State Bank of India, ICICI Bank, Axis Bank, Bank of Baroda and HDFC Bank, have issued dollar bonds following the RBI's announcement of the concessional swap window guidelines. HDFC Bank was the first to issue dollar bonds. End

 

US$1 = INR 95.7525

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Saji George Titus

 

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