SynopsisPunjab National Bank will begin acquisition finance in the third quarter of this fiscal year. The bank aims to mobilize USD 2.5 billion in FCNR (B) deposits by September. This move diversifies the bank's asset portfolio and attracts foreign currency. PNB reported a significant profit jump for the quarter ended June 30.PTINew Delhi, Punjab National Bank (PNB) managing director and CEO Ashok Chandra has said that the bank would enter into acquisition finance in the third quarter of the current financial year as the RBI recently opened the window for lenders.Earlier this year, the Reserve Bank came out with final guidelines on acquisition finance by banks, increasing the lending limit to up to 75 per cent of the deal value from the 70 per cent proposed in the draft rules."The acquisition finance market is a very, very big market and ample opportunities are there in the system. We have got our policy approved for the acquisition financing in the last board meeting," he told PTI in an interview."We are looking for a good partner and then maybe from Q3 onwards, we will be initiating some work in the acquisition financing," he said.To begin with, he said, the bank would be starting acquisition finance with the domestic entities, and this will help the bank to diversify their asset portfolio.While permitting the activity from July 1, the RBI listed out a set of conditions to be met while banks do such financing activities, including a corporate guarantee from the acquiring company and ensuring that the debt-to-equity ratio does not exceed 3:1 post-acquisition on a continuous basis.The equity shares or compulsorily convertible debentures acquired by the acquiring company shall be free from any encumbrance; a borrower needs to have a net worth of at least Rs 500 crore and a net profit for three years, and the unlisted entities should additionally enjoy investment-grade ratings, the RBI had said.Asked about the foreign currency deposit mobilisation drive started last month, Chandra said the bank has collected $425 million till July 17."We aim to mobilise up to $2.5 billion in FCNR (B) deposits till September 30," he said.PNB currently offers interest rates varying from 4.9-6.5 per cent on FCNR (B) deposits depending on tenure and amount.In a bid to attract foreign currency deposits by Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs) and Persons of Indian Origin (PIOs), the Reserve Bank of India last month withdrew, till September 30, the interest rate ceiling on fresh Foreign Currency Non-Resident (Bank) deposits of 3-5 years' maturity.The move came after FCNR (B) deposit inflows weakened sharply, with net inflows dropping to just $946 million in FY26 from $7.1 billion in FY25.In 2023, the RBI had introduced similar schemes when dollar outflows were high, triggered by the taper tantrum.Last week, PNB reported an over three-fold jump in standalone net profit at Rs 5,253 crore for the quarter ended June 30, 2026, primarily helped by a reduction in tax payment.The state-owned bank had posted a net profit of Rs 1,675 crore in the year-ago period.Total income in the quarter under review remained static at Rs 37,231 crore.However, the lender's interest income increased marginally to Rs 32,897 crore, from Rs 31,964 crore in the same quarter a year ago.Net interest income too improved marginally by 2 per cent to Rs 10,798 crore as against Rs 10,578 crore in the same period of the previous financial year.Read More News on...moreless