"The bank has raised Rs 1,800 crore via long-term bonds for infrastructure project finance and affordable housing in the nature of debentures," Punjab National Bank (PNB) said in a statement.

The 10-year bonds were issued at an annual coupon rate of 8.35 per cent on private placement basis on March 24, 2015, the statement cited.

Shares of PNB closed at Rs 161.60 per unit, down 0.95 per cent on the BSE. In order to encourage infrastructure development and affordable housing, RBI last year exempted long term bonds from mandatory regulatory norms like cash reserves ratio (CRR), statutory reserves ratio (SLR) if the money raised is used for funding of such projects.

CRR is the portion of deposits which the banks are required to have in cash with the central bank.

SLR is the portion of deposits banks must invest in government bonds. Rules were relaxed in pursuance of Finance Minister Arun Jaitley's Budget speech in which he had said "banks will be encouraged to extend long term loans to infrastructure sector with flexible structuring to absorb potential adverse contingencies, sometimes known as the 5/25 structure".

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