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State-owned Punjab National Bank (PNB) today said that it has slashed the repo-based lending rate by 25 basis points (bps) to 6.55%.

"The repo-linked lending rate (RLLR) has been changed from 6.80 per cent to 6.55 per cent, with effect from September 17, 2021 (Friday)," the bank said in a regulatory filing.

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

Shares of PNB on Friday closed at 39.70 apiece on the BSE, down 5.02% from the previous close.

What is repo rate?

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

Recently, PNB has said its board has approved raising up to 6,000 crore by issuing bonds.

The decision was taken at the meeting of the board of directors on Friday.

In a regulatory filing, the bank said its board has "approved raising of capital through issue of Basel III additional Tier-1 (AT-1) bonds or Tier II bonds or a combination of both in one or more tranches up to an amount of 6,000 crore".

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