CARE Ratings has reaffirmed its AAA rating with a stable outlook on Punjab National Bank’s (PNB) infrastructure bonds and other debt instruments, while withdrawing ratings on redeemed bonds. The ratings reflect PNB’s comfortable capitalization levels, improvement in asset quality, and strong government support. The rating on certificate of deposit remains at CARE A1+. The bank’s long track record and established franchise contribute to its stable outlook.
Rating Reaffirmation
CARE Ratings has reaffirmed its ratings on several of Punjab National Bank’s (PNB) debt instruments, signaling continued confidence in the bank’s financial stability and performance as of December 8, 2025. The ratings agency highlighted PNB’s comfortable capitalization, improved asset quality, and the expected continued support from the Government of India as key factors driving the reaffirmed ratings.
Key Rating Actions
The following ratings have been reaffirmed:
- Infrastructure Bonds: CARE AAA; Stable
- Basel III Tier I Bonds: CARE AA+; Stable
- Basel III Tier II Bonds: CARE AAA; Stable
- Certificate of Deposit: CARE A1+
CARE Ratings has withdrawn the CARE AAA; Stable rating on infrastructure bonds and Tier-I bonds that have been fully redeemed by PNB.
Factors Supporting the Ratings
The ratings continue to be supported by the majority ownership of the Government of India (GoI), which holds a 70.08% shareholding. CARE Ratings anticipates continued GoI support for PNB, given its systemic importance as the third-largest public sector bank. PNB’s extensive branch network and deposit-gathering capabilities also support the ratings.
Bank Performance
PNB reported a 13.56% year-over-year increase in gross advances, reaching ₹1,116,637 crore as of March 31, 2025. Deposits also saw growth of 14.38%. While profitability has improved with lower credit costs, return metrics remain below those of larger public sector banks. Asset quality also improved with GNPA and NNPA ratios at 3.95% and 0.40%, respectively, as of March 31, 2025. Capital adequacy remains comfortable, with a CAR of 17.01%.
Source: BSE
