With Punjab National Bank on the brink of being put under prompt corrective action (PCA) by the Reserve Bank of India, the bank has increased its lending rates to make amends to its balance sheet to up to 10 basis points. The bank which was hit by the loan fraud carried out by jeweler Nirav Modi and Mehul Chowski, reported the highest net loss for FY 2017-2018 amongst other public sector banks. Despite topping the list with regard to net losses, the Reserve Bank of India has given Punjab National Bank till the end of Q1 of FY 2018-2019, to show improvements.
To make amends to their balance sheet, Punjab National Bank has increased its marginal cost of funds-based lending (MCLR), depending on the tenure of the loan, to between 0.05% and 0.10%. Based on Punjab Bank of India new lending rates, for 6-month tenure loans, the MCLR has been increased by 0.10% to 8.40%, while loans for the tenure of one year it has been increased by 0.05% to 8.45%, for the two-year tenure it has been increased to 8.60% by 0.05%, and for the three-year tenure it has been increased to 8.75% by 0.05% as well.
In addition, to borrow loans for a tenure of one month, the lending rate has been increased by 0.10% to 8.05%, for the three-month tenure it has been increased to 8.20%, and for the overnight loan scheme, the rates have been increased by 0.10% to 7.90%.
Source: Financial Express