This bank won’t charge processing fees for any loan this year; check details

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The country’s second-largest public sector lender Punjab National Bank (PNB) has waived off all types of processing fees and documentation charges for all types of loans. PNB is probably the first bank to waive off all types of processing fees for the benefit of its customers. However, the bank has also reduced the interest rate on the savings account by 10 basis points, with effect from September 1, which would put customers in difficulty.

PNB won’t charge any documentation or processing fee till December 31, 2021. State Bank of India also made the same offer to its home loan customers till August 31.

No processing fees for loan

PNB’s offer is called Festival Bonanza and is directed to stoke demand for the festival season that economists and marketers are looking forward to infuse life into the economy. All retail loans such as home loans, vehicle loans, property loans, personal loans, pension loans and gold loans will be offered without these attendant charges.

PNB is now offering an interest rate starting from 6.80% on home loans and 7.15% on car loans. Interest rates on personal loans begin from 8.95%, which is one of the lowest in the industry. Home loan top-ups are also available without any processing fee.

Domestic loan book

PNB had a domestic loan book of Rs 7.21 lakh crore in the April-June quarter. Gross bad loans remained above 14% and the lender saw Rs 8241 crore worth of loans slip during the June quarter of FY22.

This meant that provisions remained elevated, with Rs 4,679 crore set aside during the quarter, S S Mallikarjuna Rao, CEO of PNB said in August.

Interest rate slash

With effect from September 1, PNB has slashed interest rate by 10 basis points or 0.1 percentage point. Currently, the bank offers an interest rate of 2.90% which is applicable to all existing as well as the new savings accounts. Deposit of any amount will tract this rate.

PNB already revised interest rates on its fixed deposit schemes in the previous month with effect from August 1, 2021. After the latest revision, the general public will now get an interest rate ranging from 2.90% to 5.25% on their deposit of less than Rs 2 crore for different time periods.