Punjab National Bank

Serial No.: [____] Private & Confidential – For Private Circulation Only Addressed to: ______Disclosure Document dated: February 20, 2014

PUNJAB NATIONAL BANK (A Government of India Undertaking) Constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 Head Office: 7, Bhikaiji Cama Place, New Delhi - 110 066 Tel No: (011) 26102303 Fax No: (011) 26108741 E-mail: [email protected] Website: www.pnbindia com

DISCLOSURE DOCUMENT ISSUED IN CONFORMITY WITH SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE AND LISTING OF DEBT SECURITIES) REGULATIONS, 2008 ISSUED VIDE CIRCULAR NO. LAD-NRO/GN/2008/13/127878 DATED JUNE 06, 2008, AS AMENDED, SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE AND LISTING OF DEBT SECURITIES) (AMENDMENT) REGULATIONS, 2012 ISSUED VIDE CIRCULAR NO. LAD-NRO/GN/2012-13/19/5392 DATED OCTOBER 12, 2012, AS AMENDED AND SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE AND LISTING OF DEBT SECURITIES) (AMENDMENT) REGULATIONS, 2014 ISSUED VIDE CIRCULAR NO. LAD-NRO/GN/2013-14/43/207 DATED JANUARY 31, 2014, AS AMENDED

PRIVATE PLACEMENT OF NON-CONVERTIBLE REDEEMABLE UNSECURED BASEL III COMPLIANT TIER 2 BONDS (SERIES XIV) FOR INCLUSION IN TIER 2 CAPITAL IN THE NATURE OF DEBENTURES OF FACE VALUE OF RS. 10 LAKHS EACH (“BONDS”) AT PAR AGGREGATING RS. 1000 CRORE BY PUNJAB NATIONAL BANK (“PNB” OR THE “ISSUER” OR THE “BANK”)

REGISTRARS TO THE ISSUE TRUSTEE FOR THE BONDHOLDERS

Alankit Assignments Ltd. IDBI Trusteeship Services Ltd. R. R. House, Ideal Industrial Estate, Registered Office Opp. New Empire Mills, Asian Building, Ground Floor Lower Parel, Mumbai, 17, R Kamani Marg, Ballard Estate Maharashtra 400013 Mumbai – 400 001 Tel: (022) 4348 1234 Tel: (022) 40807000 Fax: 91-22-66311776 E-mail: [email protected]

LEAD ARRANGERS TO THE ISSUE

ICICI Securities PNB Investment A. K. Capital Services Trust Investment Primary Dealership Ltd. Services Ltd. Ltd. Advisors Pvt. Ltd. ICICI Centre 10 Rakesh Deep Building, 30 - 39, 3rd Floor 109/110, 1st Floor, H T Parekh Marg Yusuf Sarai Commercial Free Press House Balarama Village, Churchgate Complex, Gulmohar 215, Nariman Point Parigkhari; Bandra Kurla Mumbai – 400 020 Enclave, New Delhi Mumbai – 400 021 Complex, Bandra (East), Tel: (022) 22882460/70 Tel: (011) 41035050 Tel: (022) 66349300 Mumbai – 400 051. Fax: 91-22-22882312 Fax: 91-11-41035057 Fax: 91-22-66360977 Tel : 022- 40845000; Fax : 022- 40845066

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TABLE OF CONTENTS

INDEX TITLE I. DEFINITIONS/ ABBREVIATIONS II. DISCLAIMER III. ISSUER INFORMATION IV. DETAILS OF THE DIRECTORS OF THE ISSUER V. DETAILS OF STATUTORY AUDITORS OF THE ISSUER BRIEF SUMMARY OF BUSINESS/ ACTIVITIES OF ISSUER AND ITS LINE OF VI. BUSINESS KEY OPERATIONAL & FINANCIAL PARAMETERS OF THE ISSUER FOR THE LAST 3 VII. AUDITED YEARS BRIEF HISTORY OF ISSUER SINCE INCEPTION, DETAILS OF ACTIVITIES INCLUDING ANY REORGANIZATION, RECONSTRUCTION OR AMALGAMATION, VIII. CHANGES IN CAPITAL STRUCTURE, (AUTHORIZED, ISSUED AND SUBSCRIBED) AND BORROWINGS AUDITED STANDALONE & CONSOLIDATED FINANCIAL INFORMATION OF THE IX. ISSUER LIMITED REVIEW QUARTERLY STANDALONE FINANCIAL INFORMATION OF THE X. ISSUER AS OF DECEMBER 31, 2013 XI. SUMMARY TERM SHEET TERMS OF OFFER (DETAILS OF DEBT SECURITIES PROPOSED TO BE ISSUED, MODE OF ISSUANCE, ISSUE SIZE, UTILIZATION OF ISSUE PROCEEDS, STOCK XII. EXCHANGES WHERE SECURITIES ARE PROPOSED TO BE LISTED, REDEMPTION AMOUNT, PERIOD OF MATURITY, YIELD ON REDEMPTION, DISCOUNT AT WHICH OFFER IS MADE AND EFFECTIVE YIELD FOR INVESTOR) XIII. CREDIT RATING FOR THE BONDS XIV. NAME OF DEBENTURE TRUSTEE XV. STOCK EXCHANGE WHERE SECURITIES ARE PROPOSED TO BE LISTED MATERIAL CONTRACTS & AGREEMENTS INVOLVING FINANCIAL OBLIGATIONS XVI. OF THE ISSUER XVII ILLUSTRATION OF BOND CASH FLOWS XVIII. DECLARATION XIX. ANNEXURES A. CREDIT RATING LETTER FROM CRISIL B. CREDIT RATING LETTER FROM CARE C. CONSENT LETTER FROM IDBI TRUSTEESHIP SERVICES LTD. D. APPLICATION FORM E. INSTRUCTIONS

2 Disclosure Document

I. DEFINITIONS/ ABBREVIATIONS

ALM Asset Liability Management ATM Automated Teller Machine Board/ Board of The Board of Directors of Punjab National Bank or Committee thereof Directors Bonds Unsecured Redeemable Non-Convertible Basel III compliant Tier-II Bonds (Debt Capital Instruments) (Series-XIV) in the nature of Debentures of Rs. 10,00,000/- each offered through private placement route under the terms of this Disclosure Document Book Closure/ The date of closure of register of Bonds for payment of interest and repayment of principal (either Record Date on maturity or on exercise of Call Option) Brickwork Brickwork Ratings India Pvt. Ltd. CAR Capital Adequacy Ratio CARE Credit Analysis & Research Ltd. CRISIL CRISIL Ltd. CAGR Compounded Annual Growth Rate CDSL Central Depository Services (India) Ltd. CDR Corporate Debt Restructuring CRR Cash Reserve Ratio Debt Securities Non-Convertible debt securities which create or acknowledge indebtedness and include debenture, bonds and such other securities of the Issuer, whether constituting a charge on the assets of the Issuer or not, but excludes security receipts and securitized debt instruments Depository A Depository registered with SEBI under the SEBI (Depositories and Participant) Regulations, 1996, as amended from time to time Depositories Act The Depositories Act, 1996, as amended from time to time Depository Participant A Depository participant as defined under Depositories Act Designated Stock National Stock Exchange of India Ltd. Exchange DICGC Deposit Insurance and Credit Guarantee Corporation of India Director(s) Director(s) of Punjab National Bank unless otherwise mentioned DP Depository Participant ECGC Export Credit Guarantee Corporation of India EPS Earning Per Share FDI Foreign Direct Investment FEDAI Foreign Exchange Dealers Association of India FIs Financial Institutions FIIs Foreign Institutional Investors Financial Year/ FY Period of twelve months period ending March 31, of that particular year GoI Government of India/ Central Government HUF Hindu Undivided Family ITSL/ Trustee IDBI Trusteeship Services Ltd. Issuer/ PNB/ Bank Punjab National Bank Disclosure Document Disclosure Document dated February 20, 2014 for Private Placement of Unsecured Redeemable Non-Convertible Basel III compliant Tier-II Bonds (Debt Capital Instruments) (Series-XIV) in the nature of Debentures of Rs. 10,00,000/- each for cash at par aggregating Rs. 1000 crore to be issued by Punjab National Bank I.T. Act The Income Tax Act, 1961, as amended from time to time MoF Ministry of Finance NPAs Non Performing Assets NRIs Non Resident Indians NSE National Stock Exchange of India Ltd. NSDL National Securities Depository Ltd. OCBs Overseas Corporate Bodies PAN Permanent Account Number PLR Prime Lending Rate Rs. Indian National Rupee RBI Reserve Bank of India RTGS Real Time Gross Settlement Registrar Registrar to the Issue, in this case being MCS Ltd. SARFAESI Act Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 SEBI The Securities and Exchange Board of India, constituted under the SEBI Act, 1992 SEBI Act Securities and Exchange Board of India Act, 1992, as amended from time to time SEBI Regulations Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 issued vide circular no. LAD-NRO/GN/2008/13/127878 dated June 06, 2008, as amended, Securities and Exchange Board of India (Issue and Listing of Debt Securities) (Amendment) Regulations, 2012 issued vide circular no. LAD-NRO/GN/2012-13/19/5392 dated October 12, 2012, as amended and Securities and Exchange Board of India (Issue and Listing of Debt Securities) (Amendment) Regulations, 2014 issued vide Circular No. LAD-NRO/GN/2013- 14/43/207 Dated January 31, 2014, as amended. SLR Statutory Liquidity Ratio TDS Tax Deducted at Source The Bank/ the Issuer Punjab National Bank, constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980. The Board The Board of Directors of the Bank The Companies Act The Companies Act, 1956 as amended from time to time The Act Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 The Issue/ The Offer/ Private Placement of Unsecured Redeemable Non-Convertible Subordinated Tier-II Bonds (Debt Private Placement Capital Instruments) (Series-XIIV) in the nature of Debentures of Rs. 10,00,000/- each for cash at par aggregating Rs. 1000 crore to be issued by Punjab National Bank

II. DISCLAIMER

GENERAL DISCLAIMER This Disclosure Document is neither a Prospectus nor a Statement in Lieu of Prospectus and is prepared in accordance with Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 issued vide Circular No. LAD-NRO/GN/2008/13/127878 dated June 06, 2008 as amended and Securities and Exchange Board of India (Issue and Listing of Debt Securities) (Amendment) regulations, 2012 issued vide circular no.. LAD-NRO/GN/2012-13/19/5392 Dated October 12, 2012, as amended. This document does not constitute an offer to the public generally to subscribe for or otherwise acquire the Bonds to be issued by Punjab National Bank (the “Issuer”/ the “Bank”/ the “Issuer Bank”). The document is for the exclusive use of the Institutions to whom it is delivered and it should not be circulated or distributed to third party(ies). The Bank certifies that the disclosures made in this document are generally adequate and are in conformity with the captioned SEBI Regulations. This requirement is to facilitate investors to take an informed decision for making investment in the proposed Issue.

DISCLAIMER OF THE SECURITIES & EXCHANGE BOARD OF INDIA This Disclosure Document has not been filed with Securities & Exchange Board of India (SEBI). The Securities have not been recommended or approved by SEBI nor does SEBI guarantee the accuracy or adequacy of this document. It is to be distinctly understood that this document should not, in any way, be deemed or construed that the same has been cleared or vetted by SEBI. SEBI does not take any responsibility either for the financial soundness of any scheme or the project for which the Issue is proposed to be made, or for the correctness of the statements made or opinions expressed in this document. The issue of Bonds being made on private placement basis, filing of this document is not required with SEBI, however SEBI reserves the right to take up at any point of time, with the Bank, any irregularities or lapses in this document.

DISCLAIMER OF THE LEADARRANGERS It is advised that the Bank has exercised self due-diligence to ensure complete compliance of prescribed disclosure norms in this Disclosure Document. The role of the Lead Arrangers in the assignment is confined to marketing and placement of the bonds on the basis of this Disclosure Document as prepared by the Bank. The Lead Arrangers have neither scrutinized/ vetted nor have they done any due-diligence for verification of the contents of this Disclosure Document. The Lead Arrangers shall use this document for the purpose of soliciting subscription from qualified institutional investors in the bonds to be issued by the Company on private placement basis It is to be distinctly understood that the aforesaid use of this document by the Lead Arrangers should not in any way be deemed or construed that the document has been prepared, cleared, approved or vetted by the Lead Arrangers; nor do they in any manner warrant, certify or endorse the correctness or completeness of any of the contents of this document; nor do they take responsibility for the financial or other soundness of this Issuer, its promoters, its management or any scheme or project of the Bank. The Lead Arrangers or any of its directors, employees, affiliates or representatives do not accept any responsibility and/or liability for any loss or damage arising of whatever nature and extent in connection with the use of any of the information contained in this document.

DISCLAIMER OF THE ISSUER The Issuer confirms that the information contained in this Disclosure Document is true and correct in all material respects and is not misleading in any material respect. All information considered adequate and relevant about the Issue and the Bank has been made available in this Disclosure Document for the use and perusal of the potential investors and no selective or additional information would be available for a section of investors in any manner whatsoever. The Bank accepts no responsibility for statements made otherwise than in this Disclosure Document or any other material issued by or at the instance of the Issuer Bank and anyone placing reliance on any other source of information would be doing so at his/her/their own risk.

DISCLAIMER OF THE STOCK EXCHANGE As required, a copy of this Disclosure Document has been submitted to the National Stock Exchange of India Ltd. (hereinafter referred to as “NSE”) for hosting the same on its website. It is to be distinctly understood that such submission of the document with NSE or hosting the same on its website should not in any way be deemed or construed that the document has been cleared or approved by NSE; nor does it in any manner warrant, certify or endorse the correctness or completeness of any of the contents of this document; nor does it warrant that this Issuer‟s securities will be listed or continue to be listed on the Exchange; nor does it take responsibility for the financial or other soundness of this Issuer, its promoters, its management or any scheme or project of the Bank. Every person who desires to apply for or otherwise acquire any securities of this Issuer may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against the Exchange whatsoever by reason of any loss which may be suffered by such person consequent to or in connection with such subscription/ acquisition whether by reason of anything stated or omitted to be stated herein or any other reason whatsoever.

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III. ISSUER INFORMATION

Name of the Issuer : Punjab National Bank

Head Office : 7, BhikajiCama Place, New Delhi – 110 066

Telephone No. : (011) 26102303

Fax No. : (011) 26196456

Website : www.pnbindia.com

Compliance Officer for : Mr. Rohit Grover the Issue Assistant General Manager 022 – 2672 3612

Chief Financial Officer : Mr. P K Mohapatra of the Issuer 011 – 2376 6451

Legal Advisor : Mrs. Susy George to the Issue Asst. General Manager (Law Division) Punjab National Bank, Head Office 7, Bhikaji Cama Place, New Delhi - 110 066

Arrangers to the Issue : ICICI Securities Primary Dealership Limited ICICI Centre, HT Parekh Marg, Churchgate, Mumbai - 400020

PNB Investment Services Limited 10 Rakesh Deep Building Yusuf Sarai Commercial Complex Gulmohar Enclave, New Delhi

A. K. Capital Services Limited 30-39, 3rd Floor, Free Press House Free Press Journal Marg 215, Nariman Point, Mumbai - 400021

Trust Investment Advisors Private Limited 109/110, 1st Floor, Balarama Village, Parigkhari; Bandra Kurla Complex, Bandra (E), Mumbai – 400 051.

Trustees for the : IDBI Trusteeship Services Limited Bondholders Registered Office Asian Building, Ground Floor 17, R Kamani Marg, Ballard Estate Mumbai – 400 001 Tel: (022) 40807000 Fax: (022) 66311776

Registrar to the : Alankit Assignments Limited Issue R. R. House, Ideal Industrial Estate, Opp. New Empire Mills, Lower Parel, Mumbai, Maharashtra 400013 Tel: (022) 4348 1234

Credit Rating : CRISIL Limited Agencies CRISIL House, Central Avenue Hiranandani Business Park Powai, Mumbai - 400 076 Tel: (022) 33423000 Fax: (022) 33423050

ICRA Limited Electric Mansion,AppasahebMarathe Marg, Century Bazaar, Prabhadevi, Mumbai, Maharashtra 400030 Tel: (022) 24331086

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IV. DETAILS OF DIRECTORS OF THE ISSUER

1. NAMES AND ADDRESSES OF THE CURRENT DIRECTORS OF THE ISSUER

The composition of the Board of Directors of the Bank as on the date of this Disclosure Document is as under:

Sr. Name, Designation and Age Address Director of Details of Other No DIN (years) (Residential) the Bank Directorships/ Membership (S/Shri/Smt.) since 1. K .R. KAMATH 58 20, Rajdoot Marg, 28.10.2009 1. PNB Housing Finance Ltd. Chairman & Managing Chanakya Puri 2. PNB Gilts Ltd Director New Delhi - 110 3.PNB International Ltd. 021 London DIN - 01715073 .PNB Investment Services Ltd. . ECGC Ltd. . IIFCL .Credit Guarantee Fund Trust of Micro & Small Enterprises (CGTMSE) 8. Board of Trustees of Credit Risk Guarantee Fund Trust for Low Income Housing 2. RAKESH SETHI 57 A-265 Ganpat 01.01.2011 1. PNB Housing Finance Ltd. Executive Director Andalkar Block 2. JSC SB PNB Kazakhastan Asiad Village 3. India Factoring & Finance DIN – 02420709 Complex Solutions Pvt. Ltd. New Delhi-110049 3. GAURI SHANKAR 57 A -266, Ganpat 07.10.2013 NIL Executive Director Andalkar Block Asiad Village Complex, N. Delhi - 49 4. K V Brahmaji Rao 54 C-1/8, Khel Gaon 22/01/2014 1. Director – PNBISL Chhota Singh 2. Director – PNB Gilts Ltd. Block New Delhi 5. ANURAG JAIN 48 A-4, Tower 03.08.2011 1. National Housing Bank Director 7, 4th Foor, 2. Small Industries New Moti Bagh Development Bank of India. DIN - 01779759 New Delhi 3. Irrigation & Water Resources Finance Corp. Ltd. 4. National Insurance Co. Ltd. 5. I.F.C.I 6. EXIM Bank 6. B.P. KANUNGO 54 Regional Director, 31.05.2013 NIL Director RBI, 15 N.S. Road Kolkata 700001 7. B. B. CHAUDHRY 64 Z -8 Hauz Khas, 23.09.2011 NIL DIRECTOR New Delhi Res: C- 178 Sarvodaya DIN - 00035033 Enclave, New Delhi110017 8. M.A. ANTULAY 60 Moonlight, 20.05.2011 Medley Pharmaceuticals Director 158, M. Karve Road, Opp. Oval DIN - 00694678 Maidan, Mumbai : 400 020

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9. DILIP KUMAR SAHA 55 9-B/603, Kalpak 26.06.2013 NIL Director Estate,Antop Hill,Mumbai- 400016 10. T.C. JHALANI 57 A-72, Triveni 08.03.2013 NIL Director Nagar, Gopalpura Byepass Jaipur 11. M.N. GOPINATH 65 503, Heritage 21.03.2012 1. Chairman – Audit Director Bldg. Hiranandani Committee of ICICI Gardens, Powai Prudential Trust Ltd. DIN - 00396196 Mumbai - 400 076 2. Director – ICICI Prudential Pension Fund Management 12. D.K. SINGLA 48 H. No. 2518, 21.03.2012 1. Chandigarh Industrial and Director Sector 35-C Tourism Dev. Corporation Chandigarh - 2. Seimark Infotech Pvt. Ltd. DIN - 01430327 160022 3. Member – Committee on 3. Banking, Insurance & Pension of The Institute of Chartered Accountants of 13. DR. SUNIL GUPTA 46 II A-26, Nehru 21.03.2012 India1.General Insurance Director Nagar Corporation of India Ghaziabad-201001 2. Rural Electrification Corpn. DIN - 00948089 Ltd. 3. Sunil Ram Enterprises (P) Ltd. 4. Sunil Ram Infotech India (P) Ltd. 5. Sunil Ram Infrastructure Pvt. Ltd. 6. Sunil Ram & Co. 14. ARADHANA MISRA 39 11, Thimayya 21.11.2013 Ambalilka Group Director Road, Cantt., Lucknow-226002 15. G.P. KHANDELWAL 51 B-2, Alakhnanda 24.01.2014 Chairman - Nagpur power & DIRECTOR 16A, Nepeansea industries Ltd. Aradhanamisra.aimt@gmai Road, Malabar Hill Director : l.com Mumbai-400006. 1. Informed Technologies DIN -00270717 India Ltd. Passport No.J4937263 2. Khandelwals Ltd., London 3. Khandelwal Remedies Pvt. Ltd. 4. Zeppelin Investments Pvt. Ltd. 5. Magnachem Pharmaceuticals Pvt. Ltd. 6. The Motwane Mfg. Co. Pvt. Ltd. 7. Krohm Solutions Pvt. Ltd. 8. Globus Spirits ltd.

2. CHANGE IN DIRECTORS OF THE ISSUER SINCE LAST THREE YEARS

Changes in the Board of Directors of the Issuer during the last three years are as under:

NAME(S/Shri/Smt.) DESIGNATION Date of Date of Reason/Remarks Appointment Cessation L.M. FONSECA Director 27.02.2007 30.07.2010 M.A.ANTULAY Director 27.02.2008 26.02.2011 20.05.2011 Re-nominated G.P. KHANDELWAL Director 27.02.2008 27.02.2011 RAVNEET KAUR Director 10.06.2008 03.08.2011

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V.K. MISHRA Director 05.12.2008 04.12.2011 Term Expired D.K. SINGLA Director 27.12.2008 27.12.2011 21.03.2012 Re-nominated T.N. CHATURVEDI Director 27.12.2008 27.12.2011 Term Expired G.R. Director 27.12.2008 27.12.2011 Term Expired SUNDARAVADIVEL M.V. TANKSALE Executive Director 26.03.2009 28.06.2011 Elevated as CMD, Central Bank NAGESH PYDAH Executive Director 26.03.2009 31.12.2010 Elevated as CMD, OBC M.P. SINGH Director 28.01.2010 27.01.2013 Term Expired PRADEEP KUMAR Director 15.02.2010 14.02.2013 Term Expired JASBIR SINGH Director 30.07.2010 06.09.2012 RAKESH SETHI Executive Director 01.01.2011 Appointment USHA Executive Director 19.07.2011 11.11.2013 Elevated as CMD, ANATHASUBRAMANIAN BhartiyaMahila Bank S.R. BANSAL Executive Director 18.06.2012 04.10.2013 Elevated as CMD, Corp. Bank ANURAG JAIN Director 03.08.2011 Appointment B.B. CHAUDHRY Director 23.09.2011 Appointment DR. SUNIL GUPTA Director 21.03.2012 Appointment M.N. GOPINATH Director 21.03.2012 Appointment N.S. VISHWANATHAN Director 06.09.2012 31.05.2013 T.C. JHALANI Director 08.03.2013 Appointment D.K. SAHA Director 26.06.2013 Appointment B.P. KANUNGO Director 31.05.2013 Appointment GAURI SHANKAR Executive Director 07.10.2013 Appointment ARADHANA MISRA Director 21.11.2013 Appointment K.V. BRAHMAJI RAO Executive Director 22.01.2014 Appointment G.P. KHANDELWAL Director 24.01.2014 Nomination

V. DETAILS OF STATUTORY AUDITORS OF THE ISSUER

1. CURRENT STATUTORY AUDITORS OF THE ISSUER

Details of the statutory auditors of the Issuer as under:

Name of Statutory Auditors Firm Registration Address & Contact Details Auditor No. since M/s BORKAR & 101569 w 21/168, Anand Nagar, Dec-11 MUZUMDAR Om Co-op. Housing Society, Anand Nagar Lane, Off Nehru Road, Santacruz (East), Mumbai – 400 055 022-66899991, 9820188573 M/s G S MADHAVA RAO & 001907 s F 5& 7, Hyderabad Business Centre Dec-11 Co. Hyderabad – 500 029 040-66662727, 09390100918 M/s PHILLIPOS & CO 002650 S No. 87/1 , Coles Road, Dec-12 Fraser Town, Bangalore, Karnataka – 560 005 080 41251474 , 09845415919 M/s C V K & ASSOCIATES 101745 w 2,SAMARTH APTS., Dec-12 D.S.BABREKAR MARG, DADAR (W), MUMBAI- 400028 022-24468717, 09820187110 M/s K N GUTGUTIA & CO 304153 E FLAT NO. 23, 2ND FLOOR, Dec-12 6C, MIDDLETON STREET, KOLKATA- 700071 033-2287-3756 , 09051158130

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M/s RAMESH KAPOOR & 001477 N N.A. Khans Villa, 54, Zakura Dec-12 CO. Crossing, Near Skaust Farms, Srinagar Jammu & Kashmir 9810241087

2. CHANGE IN STATUTORY AUDITORS OF THE ISSUER SINCE LAST THREE YEARS

Changes in the statutory auditors of the Issuer during the last three years are as under:

Sl. No. Name Address Date of Date of Auditor of Remark appointment cessation the issuer since 1. M/s Kalani & Co. B 145 B Mangal Marg, Dec-08 Nov-11 Dec-08 Nil Bapu Nagar Jaipur 2. M/s Anjaneyulu & 30, Bhagyalakshi Nagar Dec-08 Nov-11 Dec-08 Nil Co. Gandhi Nagar Hyderabad 3. M/s VK Verma & C-37 Connaught Place, Dec-09 Dec-12 Dec-09 Nil Co. Delhi 4. M/s. Mookherjee 5&6 Fancy Lane, 5th Dec-09 Dec-12 Dec-09 Nil Biswas & Pathak floor Kolkatta 5. M/s Amit Ray & 5 B Sardar Patel Marg, Dec-09 Dec-12 Dec-09 Nil Co. Civil Lines Allahabad 6. M/s Sarda & Mahavir Apartments III Dec-09 Dec-12 Dec-09 Nil Pareek floor, 598, MG Rd Ville Parle(East)Mumbai 7. M/s BORKAR & 21/168, Anand Nagar, Dec-11 Continuing Dec-11 Nil MUZUMDAR Om Co-op. Housing Society, Anand Nagar Lane, Off Nehru Road, Santacruz (East), Mumbai – 400 055 022-66899991, 9820188573 8. M/s G S F 5& 7, Hyderabad Dec-11 Continuing Dec-11 Nil MADHAVA RAO Business Centre & Co. Hyderabad – 500 029 040-66662727, 09390100918

9. M/s PHILLIPOS & No. 87/1 , Coles Road, Dec-12 Continuing Dec-12 Nil CO Fraser Town, Bangalore, Karnataka – 560 005 080 41251474 , 09845415919

10. M/s C V K & 2,SAMARTH APTS., Dec-12 Continuing Dec-12 Nil ASSOCIATES D.S.BABREKAR MARG, DADAR (W), MUMBAI- 400028 022-24468717, 09820187110 11. M/s K N FLAT NO. 23, 2ND Dec-12 Continuing Dec-12 Nil GUTGUTIA & CO FLOOR, 6C, MIDDLETON STREET, KOLKATA- 700071 033-2287-3756 , 09051158130

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12. M/s RAMESH N.A. Khans Villa, 54, Dec-12 Continuing Dec-12 Nil KAPOOR & CO. Zakura Crossing, Near Skaust Farms, Srinagar Jammu & Kashmir 9810241087

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VI. BRIEF SUMMARY OF BUSINESS/ ACTIVITIES OF ISSUER AND ITS LINE OF BUSINESS

HIGHLIGHTS OF THE BANK

Operating profit of the bank for 9 months up to Dec 2013 amounted to Rs 8,211 crore as compared to Rs 8,056 crore during the same period last year, registering a YOY growth of 1.9% Core operating profit (excluding treasury operations) of the bank for 9 months up to Dec 2013 amounted to Rs 7,851 crore as compared to 7,836 crore during the same period last year, registering a YOY growth of 0.2% Net profit for this period stood at Rs 2,536 crore while Core net profit (excluding treasury trading profits and impact of depreciation) stood at Rs 2,930 crore Net Interest Income for the period rose to Rs 4,221 crore, a rise of 13.1% over December 2012 Net Interest margin went up by 10bps to 3.57% in Q3 FY 2014 viz-a-vizQ3 FY 2013 Total Business of the Bank crossed the landmark of Rs 7 lakh crore to reach Rs 7,46,780 crore as against Rs. 6,83,098 crore in Dec 2012, showing a y‐o‐y growth of 9.3%. Total deposits of the bank rose by 9.0% compared to Dec 2012 to Rs 4,20,647 crore with share of CASA deposits in total domestic deposits maintaining above the 40% mark Global gross advances rose by over 10% to Rs 3,34,581 crore between Dec 2012 to Dec 2013 Credit Deposit Ratio improved to 77.53% as at Dec 2013 from 77.07% in Dec 2012 Gross NPA stood at 4.96% in Dec 2013 compared to 4.61% in Dec 2012 Net NPA stood at 2.80% in Dec 2013 compared to 2.56% in Dec 2012 Basel III capital adequacy ratio stood at 11.02% with Tier I capital constituting 8.54% and Tier II capital constituting 2.48%

BACKGROUND OF THE BANK

Punjab National Bank is a leading public sector commercial bank in India, offering banking products and services to corporate and commercial, retail and agricultural customers. We started our operations in 1895 and since then have grown to become one of India‟s largest banks in terms of assets and second largest bank in terms of number of branches. Although we began our operations in the agriculturally rich areas of Northern India, we have expanded our operations to provide products and services across India through 6075 branches. Bank has presence in 9 countries- branches at Kabul, Dubai & Hongkong & Representative Offices in Almaty, Dubai, Shanghai & Oslo. Bank has joint venture with Everest Bank Ltd, Nepal. Bank‟s wholly owned subsidiary PNBIL has 4 branches in UK at Gresham Street, Southhall London, Leicester & Birmingham.

Our banking operations for corporate and commercial customers include a range of products and services for large corporate customers as well as for small and middle market businesses and government entities. We cater to the financing needs of the agricultural sector and have created innovative financing products for farmers. We also provide significant financing to other priority sectors including small scale industries. We offer a wide range of retail credit products including home loans, personal loans and automobile loans. Through our subsidiaries and joint ventures, we deal in Indian government securities and provide housing finance and asset management services. Through our treasury operations, we manage our balance sheet, including the maintenance of required regulatory reserves, and seek to maximize profits from our trading portfolio by taking advantage of market opportunities.

BUSINESS OVERVIEW (as on 31st March 2013)

Bank's total business reached Rs 7,00,285 crore at the end ofMarch'13, registering an absolute increase of Rs 26,922 crore and a growth of 4.0%. Bank's overseas business increased by 57.2% to reach Rs 48,335 crore.

Bank's total deposits amounted to Rs 3,91,560 crore as at the end of March'13, showing an absolute accretion of Rs 11,972 crore and a growth of 3.2% over previous year. The share of Bank's deposits to total resources was 81.77% at the end of March 2013, while the share of low cost deposits (current + savings) in total domestic deposits was 40.86% showing an increase by 14.3%over the FY'12.

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Net advances of the Bank as at the end of March 2013 stood at Rs 3,08,725 crore, compared to Rs 2,93,775 crore as at end March2012, registering an increase of Rs 14,950 crore or 5.1%. The loan portfolio of the Bank remains well diversified with Yield on Advances at 11.06% for the year ended March 2013.

PNB’S SUBSIDIARIES, REGIONAL RURAL BANKS AND JOINT VENTURES

DOMESTIC SUBSIDIARIES:

PNB Gilts Ltd.

PNB Gilts Ltdfulfilled all its obligations as a Primary dealer in both primaryand secondary markets. Company's profit surged to Rs 88.76crore in FY'13 vis-à-vis Rs 29.64 crore posted in FY'12. Theimprovement in performance was mainly on account of sharpincrease in trading income. Due to judicious mix of nimbletrading technique and astute prognosis of market conditions,Company posted trading income of Rs 40.05 crore during FY2012-13 as against Rs 14.50 crore loss in the previous financialyear. The total out right turnover amounted toRs 1,98,139 crore.

PNB Housing Finance Ltd.

During FY' 13, the Company made fresh disbursements of Rs 3682 crore (Previous Year Rs 1516 crore), registering a growth of 143% in new business. Total loans outstanding as on 31stMarch 2013 were Rs 6620 crore (Previous year Rs 3969 crore), a growth of 67% over previous year. The average ticket size for retail loans sanctioned during FY'13 was Rs 42 lac. During the year, deposits increased to Rs 1050 crore (Previous Rs 363crore), a growth of 190% over previous year.

The Company laid special emphasis on reducing delinquencies and NPAs. The overall delinquencies were down at 2.5% (5%) of the portfolio and gross NPAs were contained at 0.57% (0.93% last year) and net NPAs were reduced from 0.67% to 0.35% of the net loans outstanding.

During FY 2012-13, the Company earned total income of Rs 661 crore (Rs 462 crore), a growth of 43% over previous year. Interest expenditure was Rs 462 crore (Rs 314 crore) and other Operating expenditure was Rs 64 crore (Rs 41 crore). The Company earned Profit before tax of Rs 126 crore (Rs 102 crore) and Profit after Tax of Rs 91.51 crore (Rs 75.20 crore) registering a growth of 22% over previous year. The Net Interest Margin was 3.44%. The networth of the Company as on31st March'13 was Rs 608 crore (Rs 392 crore) and the CRAR was 14.40%. Book Value of Company's share was Rs 122 and the EPS was Rs 22.30/-.

PNB Investment Services Ltd.

PNBISL is presently offering a basket of financial services such as Debt/Loan Syndication, Project Appraisal, Financial Restructuring, Security Trustee services and Advisory to SME, Medium and Large Corporate customer. The company is having its head office at Delhi and a branch at Mumbai. It also has its presence in Chennai, Ahmedabad and Hyderabad through its representative offices. In view of the current market scenario, the company is currently focusing on Corporate Debt Restructuring and Security Trustee assignments. The Company has earned fee-based income of more than Rs 10.48crore in the year FY'13.

PNB Insurance Broking Pvt. Ltd. #

The Bank is holding majority stake in above company, jointly with Vijaya Bank, minor shareholder. # PNB Insurance Broking Company is non-functional. The Broking licence has been surrendered and steps are being initiated for winding-up of the Company

DOMESTIC JOINT VENTURES

The Bank has the following Joint Ventures: 1. Principal PNB Asset Management Company Pvt. Ltd 2. Principal Trustee Company Pvt. Ltd 3. Assets Care & Reconstruction Enterprise Ltd. 4. India Factoring & Finance Solutions Pvt. Ltd. 5. PNB Metlife India Insurance Company Ltd.

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INTERNATIONAL SUBSIDIARIES

Punjab National Bank (International) Limited (PNBIL)

During the year 2012-13, total business of PNBIL increased from $1741.03 million (as on 31st March 2012) to $2335.49million (as on 31st March 2013), registering a YoY growth of 34.14%. Deposits increased to $1199.35 million (2012:$857.26 million), while advances increased to $1136.14million (2012: $883.76 million), registering YoY growth of39.91% and 28.56% respectively. Operating profit went up from $15.95 million to $ 21.10 million, registering growth of 32.34% in the year. Total comprehensive income attributable to equity shareholders was $8.85 million (2012:$4.39 million) and retained earnings are $7.68 million being6.48% of equity. Offering basic banking products and relationship banking continues to be the strong selling point for the Bank. The Indian Rupee (INR) Remittance scheme of the Bank has stabilized and gained popularity among the ethnic population.

Druk PNB Bank Limited

Company is incorporated in Bhutan and PNB holds 51% stake in the company.

JSC SB PNB Kazakhstan

Company is incorporated in Kazakhstan and PNB holds 84.375% stake in the company.

List of Associate Companies (where PNB has 20% or above stake):

Domestic: Sr. Name of Regional Rural Banks / Other Associates Proportion of No. ownership 1 Madhya Bihar Gramin Bank, Patna 35% 2 Sarva Haryana Gramin Bank, Rohtak 35% 3 Himachal Gramin Bank, Mandi 35% 4 Punjab Gramin Bank, Kapurthala 35% 5 Sarva UP Gramin Bank, Meerut 35% 6 Principal PNB Asset Management Co. Pvt. Ltd. 30% 7 Principal Trustee Co. Pvt. Ltd. 30% 8 Assets Care & Reconstruction Enterprise Ltd. 30% 9 India Factoring and Finance Solutions Pvt Ltd. 30% 10 PNB Metlife India Insurance Company Ltd 30%

REGIONAL RURAL BANKS

RRBs, at present operating in five States, namely, Bihar, Haryana, Himachal Pradesh, Punjab and Uttar Pradesh covering 69 districts with a network of 1509 branches, are sponsored by the bank.

The aggregate paid-up capital of these Regional Rural Banks is Rs 180.09 crore. Bank's contribution towards capital of these RRBs is Rs 61.71 crore. The combined net worth of RRBs as on March 2013 is Rs 1497.07 crore. During the year the aggregate business of all RRBs increased from Rs 23,962 crore to Rs 28,091crore showing a growth of Rs 4129 crore (17.23%). The aggregate deposits and aggregate advances as on 31.03.2013 stood at Rs 18,133 crore (YoY 17.91 %) and Rs 9958 crore (YoY 16.01 %).

The aggregate Net profit of the RRBs as on 31.03.2013 stood at Rs 197 crore (YoY 33.23%). The gross NPA of the RRBs increased from Rs 324.22 crore to Rs 347.11 crore during the period. During the year, 102 new branches were opened by RRBs, taking the total network of branches to 1509 with all being on CBS.

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Outside India:

Sr. Name of Associate Country of Proportion of No. Incorporation ownership 1 Everest Bank Ltd. Nepal 20%

BRANCH NETWORK OF THE BANK

The population group wise break up of branches of the Bank is as under (as on 31st Dec 2013): Population Group Number of Branches % Share to Total Rural 2353 38.73 Semi-Urban 1440 23.7 Urban 1286 21.17 Metropolitan 996 16.4 Total 6075 100.0

Deposits (Rs. in crore) 2008-09 2009-10 2010-11 2011-12 2012-13 1. Current 18814 23717 26838 28472 29874 Growth % yoy 5.75% 26.06% 13.16% 6.09% 4.92% 2. Savings 62646 78133 93487 105657 123470 Growth % yoy 16.51% 24.72% 19.65% 13.02% 16.86% 3. Fixed 128301 147480 192574 245459 238216 Growth % yoy 35.20% 14.95% 30.58% 27.46% -2.95% Total Deposits 209760 249330 312899 379588 391560 Growth % yoy 26.01% 18.86% 25.50% 21.31% 3.15%

Advances (Rs. in crore) Year ended 2008-09 2009-10 2010-11 2011-12 2012-13 Advances 154703 186601 242107 293775 308725 Annual Growth Amount 35201 31898 55505 51668 14950 Annual Growth (%) 29.46% 20.62% 29.75% 21.34% 5.09%

General Data on Non-Performing Assets (Rs. in crore) As on March 31st 2009-10 2010-11 2011-12 2012-13 Gross NPA at the beginning of the year 2507 3214 4379 8720 Reduction during the year 2131 3172 2331 3901 Up-gradation 328 410 530 962 Cash Recovery 950 938 1675 1942 Write-off 853 1592 126 997 Addition during the year 2838 4337 6672 8647 Gross NPA at the end of the year 3214 4379 8720 13466 DICGC & ECGC 52 43 79 125 Provision held 1105 2297 4184 6103 Net NPA at the end of the year 982 2039 4454 7237 Gross NPAs to Gross Advances (%) 1.71% 1.79% 2.93% 4.27% Net NPA to Net Advances (%) 0.53% 0.85% 1.52% 2.35%

Asset Classification (Rs. in crore) Classification of assets as on 31.03.2010 31.03.2011 31.03.2012 31.03.2013 Standard Assets 185092 239619 289173 301777 Sub Standard Assets 1926 2643 5409 6671 Doubtful Assets 1077 1398 2871 5400 Loss Assets 212 338 440 1396 Gross NPAs 3214 4379 8720 13466 Gross Advances 188306 243999 297893 315243

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Net Investment (Rs. in crore) Particular 31.03.2009 31.03.2010 31.03.2011 31.03.2012 31.03.2013 Government Securities 54531 65970 79502 99759 107599 Other Approved Securities 667 492 374 223 211 Shares 1206 1743 2233 2611 2574 Debentures & Bonds 4470 3033 4863 7637 9969 Subsidiaries & Joint Ventures 887 963 1206 1352 1495 Others 1624 5524 6984 11120 8049 Total Investment (Net) 63385 77724 95162 122703 129896 Growth % yay 17.40% 22.62% 22.44% 28.94% 5.86%

Investment Categories (% Share) (Rs. In crore) Particular 31.03.2009 31.03.2010 31.03.2011 31.03.2012 31.03.2013 Held to Maturity (incl. exemp. 75.69 78.10 75.19 69.90 70.04 Cat) Available for sale 23.97 17.95 22.06 26.29 28.41 Held for Trading 0.33 3.95 2.75 3.81 1.55 Total 100.00 100.00 100.00 100.00 100.00 Total Gross Investment 63761 78058 95513 123148 130313

Capital Adequacy Position of the Bank (Rs. in crore) 31.03.2009 31.03.2010 31.03.2011 31.03.2012 31.03.2013 Total Capital 21570 26764 30888 36853 41273 Tier 1 Capital 13800 17227 20979 27080 31664 Tier 2 Capital 7770 9536 9909 9773 9608 Risk Weighted Assets 153692 189025 248760 291919 324380 CRAR (%) 14.03% 14.16% 12.42% 12.63% 12.72% TIER 1 (%) 8.98% 9.11% 8.44% 9.28% 9.76% TIER 2 (%) 5.06% 5.05% 3.98% 3.35% 2.96% *CRAR as on 31.03.2009 is 12.59% & 31.03.2010 is 12.97% as per Basel I

Statement of Net Worth (Rs. in crore) For the Year 31.03.2009 31.03.2010 31.03.2011 31.03.2012 31.03.2013 Share Capital 315.30 315.30 316.81 339.18 353.47 Reserves & Surplus 14338 17408 21192 27476 32323 Capital & Reserves 14654 17723 21509 27815 32677 Less : Revaluation Reserves 1514 1492 1471 1450 1429 Less : Intangible Assets 331 450 417 455 608 Goodwill 0 0 0 0 0 Computer Software 46 53 44 37 58 amortized Deferred tax asset 285 397 373 418 550 Tangible Net Worth 12809 15781 19621 25911 30640 Growth (%) 21.78% 23.20% 24.33% 32.06% 18.25%

Key Accounting Ratios For the Year 2008-09 2009-10 2010-11 2011-12 2012-13 Earnings per Share (EPS) 98.03 123.86 140.60 154.02 139.52 (Rs) Return on Net Worth(%) 23.52 24.59 22.13 18.52 15.19 Book Value per Share 416.74 514.77 632.48 777.35 884.03

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Other Ratios For the Year 2008-09 2009-10 2010-11 2011-12 2012-13 Net NPA to Net Advances ratio (%) 0.17% 0.53% 0.85% 1.52% 2.35% Net Interest Margin 3.52% 3.57% 3.96% 3.84% 3.52% Non-Interest Income/ Average Working 1.33% 1.29% 1.09% 1.03% 0.89% Fund (%) Return on Assets (%) 1.39 1.44 1.34 1.19 1.00 Capital Adequacy Ratio (%) (Basel-II) 14.03% 14.16% 12.42% 12.63% 12.72% Tier I 8.97% 9.15% 8.44% 9.28% 9.76% Tier II 5.06% 5.01% 3.98% 3.35% 2.96% Credit/Deposit Ratio (%) (net) 73.75% 74.84% 77.38% 77.39% 78.84% Interest Spread (%) 2.96% 3.03% 3.55% 3.27% 3.13% Yield on Advances (%) 11.41% 10.36% 10.58% 11.67% 11.06% Yield on Investments (%) 6.69% 6.73% 7.05% 7.57% 7.89% Cost of Deposits (%) 6.25% 5.38% 5.24% 6.59% 6.82% Average cost of Funds (%) 5.42% 4.76% 4.57% 5.62% 5.70% Gross Profit per Employee (Rs. In lacs) 10.39 13.72 17.05 18.30 18.52 Net Profit per Employee (Rs. In lacs) 5.64 7.31 8.35 8.42 8.06 Business per Branch (Rs. In Crore) 81.04 87.17 104.75 116.03 116.84 Gross Profit per Branch (Rs. In lacs) 128.54 147.98 175.46 187.60 185.72 Business per Employee (Rs. In crs.) 6.55 8.08 10.18 11.32 11.65

VII. KEY OPERATIONAL & FINANCIAL PARAMETERS OF THE ISSUER FOR THE LAST 3 AUDITED YEARS (in Rs crore) S. Parameters Half Year FY 2012- FY 2011- FY No. upto 13 12 2010-11 30th Sep 2013 1. Share Capital 353.47 353.47 339.18 316.81 2. Reserves & Surplus (excluding revaluation 34152.14 32323 27476 21192 reserves) 3. Net Worth 31306 30640 25911 19621 4. Deposits 405699 391560 379588 312899 5. Borrowings 40888 39621 37264 31590 6. Total Debt (4+5) 446587 431181 416852 344489 7. Advances 313852 308725 293775 242107 8. Investments 134125 129896 122703 95162 9. Net Fixed Assets 3340 3300 3132 3062 10. Interest Income 21138 41893 36476 26986 11. Interest Expense 13215 27037 23062 15179 12. Total Income 23379 46109 40679 30599 13. Total Expenditure (interest expenses + 17871 35202 30064 21543 operating expenses) 14. Operating Profit 5509 10907 10614 9056 15. Provisioning & Write-offs 3728 6160 5730 4622 16. Profit After Taxation (“PAT”) 1781 4748 4884 4433 17. Gross NPA to Gross Advances (%) 5.14 4.27 2.93 1.79 18. Net NPA to Net Advances (%) 3.07 2.35 1.52 .85 19. Capital Adequacy Ratio (BASEL II) (%) 12.32 12.72 12.63 12.42 20. Tier I Capital Adequacy Ratio (BASEL II) (%) 9.48 9.76 9.28 8.44 21. Tier II Capital Adequacy Ratio (BASEL II) (%) 2.84 2.96 3.35 3.98 22. Return on Assets (%) 0.71 1.00 1.19 1.34 23. Earnings Per Share (Basic & Diluted) (in Rs.) 100.76 139.52 154.02 140.60

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DEBT EQUITY RATIO OF THE ISSUER (Rs. in crore) Particulars Pre-Issue Post Issue of Bonds of (as on December 31, 2013) Rs. 1000 crore TOTAL DEBT Subordinated Bonds 10,130.30 11,130.30 Other Long Term Borrowings 23,533.01 23,533.01 TOTAL 33,663.31 34,663.31

SHAREHOLDERS’ FUNDS Share Capital 353.47 353.47 Reserve & Surplus (excluding 30,894.58 30,894.58 Revaluation Reserve) TOTAL 31,248.05 31,248.05

Gross Debt/ Equity Ratio 1.08 1.11

PROJECT COST AND MEANS OF FINANCING, IN CASE OF FUNDING OF NEW PROJECTS

The funds being raised by the Bank through present issue of Bonds are not meant for financing any particular project. The Bank shall utilise the proceeds of the Issue for its regular business activities and other associated business objectives such as discharging existing debt obligations which were generally undertaken for business operations.

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VIII. BRIEF HISTORY OF ISSUER SINCE INCEPTION, DETAILS OF ACTIVITIES INCLUDING ANY REORGANIZATION, RECONSTRUCTION OR AMALGAMATION, CHANGES IN CAPITAL STRUCTURE, (AUTHORIZED, ISSUED AND SUBSCRIBED) AND BORROWINGS

HISTORY OF THE BANK AND MAJOR EVENTS

We were incorporated under the Indian Companies Act, 1882 (Act VI of 1882) in 1894 as Punjab National Bank Limited and commenced operations on April 12, 1895 from Lahore. Upon nationalisation in 1969, we were renamed Punjab National Bank.

1904-13 . The Bank expanded from Punjab to Karachi and Peshawar in 1904. . In 1908, the Bank began its first dealings abroad by asking its Bombay branch to open an account in London.

1914-1921 . In 1914, the Bank made a public issue of 5,000 shares. . In 1919, the Bank took steps to establish an agency at London and an agency account with the London City Midland Bank Ltd.

1922-1939 . In 1926, the Bank was admitted to the clearing house of Calcutta. . In 1928, Bhagat Ishwar Das became the first „Chairman Emeritus‟ of the Bank. . In 1929, a system of continuous audit was introduced to prevent possibility of fraud and the inspection of staff was strengthened.

1940-49 . In January 1940 the Bank made its first acquisition of Bhagwandas Bank Limited. . On June 29, 1947 the registered office of the Bank was shifted from Lahore to New Delhi. . In 1949, the Punjab National Bank Workmen‟s Union came into existence.

1950- till date . In 1952, Bharat Bank merged with us. . In 1956, Indo Commercial Bank merged with us. . In 1961, Universal Bank of India merged with the Bank. . In 1969, 14 private banks including our Bank were nationalised. . The first overseas branch of the Bank was opened in London in 1978 and closed in 1986 under instructions from the RBI. . In 1986, Hindustan Commercial Bank merged with the Bank. . In 1993, New Bank of India merged with the Bank, which was the first ever merger of a nationalised bank with another. . In 2002, we had an initial public offering of shares of the Bank which resulted in the reduction of the government‟s shareholding in the Bank. . In 2003, the erstwhile Nedungadi Bank, a Kerala based private bank, was amalgamated with the Bank. . In 2005, Bank came out with an Follow on Public Offer of 8 crore shares at a price of Rs.390 per share aggregating Rs.3120 crore, resulting in further reduction of Government shareholding to 57.80% . During 2008-09 the bank achieved the landmark of becoming the largest Nationalised Bank to bring all branches/Extension counters in to Core Banking Solution (CBS). . The number of branches we operated grew from 619 at the time of nationalisation in 1969 to reach 6075 by December 31, 2013 with ATM network of 6698.

CAPITAL STRUCTURE (Amount in Rs crore) Particulars As on 31.03.2013 A. Authorised Share Capital 3,000,000,000 Equity Shares of Rs. 10 each 30,00,00,00,000 B. Issued, Subscribed and Paid-Up Capital 353,473,396 Equity Shares of Rs.10 each fully paid-up 353,47,00,000 C. Share Premium Account 56,50,16,00,000 Note: In March 2002, the Bank had raised equity capital by way of Public Issue of 530,61,200 Equity Shares of Rs 10/- each at a price of Rs 31/- each, aggregating to Rs 164.49 Crore. In March 2005 the Bank raised additional Equity Capital by way of Public Issue of 800,00,000 Equity Shares of Rs 10/- each at a price of Rs 390/- each, aggregating to Rs 3120 Crore. After the issue, the Government of India holds 57.87% of the equity capital of the Bank.

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EQUITY SHARE CAPITAL HISTORY OF THE ISSUER

Dateof No of Face Issue Consi Nature of Cumulative Equity Valu Price derati Allotment Allotment No of Equity Equity e (Rs.) on Shares equity Share Share (Rs.) (Cash, Remark shares Capital Premiu othert (Rs. m (Rs. han Crore) Crore) cash etc) 28.03.2011 1509657 10/- 1218.82 Cash Preferential 316812157 316.81 2193.92

26.03.2012 15840607 10/- 1003.69 Cash Preferential 332652764 332.65 - LIC 30.03.2012 6525919 10/- 1003.69 Cash Preferential 339178683 339.18 4416.46 GOI Total (22366526) (Allotment to LIC and GoI was made on different dates). Shar e premium as on 31.03.12 is given. 04.03.2013 14294713 10/- 873.05 Cash Preferential 353473396 353.47 5650.16

CHANGES IN CAPITAL STRUCTURE OF THE ISSUER FOR LAST FIVE YEARS

Particulars of change Amount (Rs Crore) Date of change(AGM/EGM) IncreaseinCapital-FY.2008-09 Nil Nil IncreaseinCapital-FY2009-10 Nil Nil IncreaseinCapital-FY.2010-11 1.51 (316.81) 28.03.2011 IncreaseinCapital-FY2011-12 22.37 (339.18) 26.03.2012 and 30.03.2012 IncreaseinCapital-FY.2012-13 14.29 (353.47) 04.03.2013

DETAILS OF ANY ACQUISITION OR AMALGAMATION IN THE LAST 1 YEAR

NIL

DETAILS OF ANY REORGANIZATION OR RECONSTRUCTION IN THE LAST 1 YEAR

NIL

SHAREHOLDING PATTERN (as on Dec 31, 2013)

Sl. Category of Shareholder No of Total No of Total No. Shareholders Shares Shareholding as a %of Total No. of Shares (A) Shareholding of Promoter and Promoter Group 1 Indian (a) Central Government /State 1 213168119 58.87 Government(s) Sub Total 2 Foreign Total shareholding of Promoter and 1 213168119 58.87 Promoter Group (A)

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(B) Public Shareholding 1 Institutions (a) Mutual Funds/ UTI 119 9908176 2.74 (b) Financial Institutions/ Banks 24 1007836 0.28 (c) Insurance Companies 100 55979451 15.46 (d) Foreign Institutional Investors 193 63398007 17.51 Central Govt/State Govt. 5 100637 0.03 FFI/Banks 1 2227 0.00 Sub Total 442 130396334 36.01 2 Non-Institutions (a) Bodies Corporate 1823 3074300 0.85 (b) Individuals Individual shareholders holding 216671 14016883 3.87 nominal share capital up to Rs1 lakh Individual shareholders holding 27 660420 0.18 nominal share capital in excessofRs1 lakh (c) Any Others (Specify) (i) Non Resident Indians 813 82457 0.02 (ii) Overseas Corporate Bodies 1 943 0.00 (iii) Trusts 47 267367 0.07 (iv) Clearing Members 200 158630 0.04 Foreign Nationals 2 166 0.00 HUF 3040 244307 0.07 Sub Total 222624 18505473 5.11 Total Public Shareholding (B) 223066 148901807 41.13 Total(A)+(B) 223067 362069926 100 (C) Shares held by Custodians and against which Depository - - - Receipts have been issued

TOP 10 SHAREHOLDERS

The Government of India through Ministry of Finance holds 58.87% of the equity Capital of the Bank. The details of Top-10 shareholders (as on 31.12.2013) are as under:

Sr. Name of Shareholder Number of Shares Held % Shareholding No. 1 President of India 213168119 58.87 2 Life Insurance Corporation of India 34941370 9.65 3 Lazard Asset Management LLC A/c Lazard 14764894 4.08 Emerging Markets Portfolio 4 Janus Overseas Fund. 3043564 0.84 5 LIC of India Money Plus Growth Fund 2809659 0.78 6 HDFC Standard Life Insurance Company 2386746 0.66 Limited 7 Lazard Investors Bank Collective Trust 2271958 0.63 8 Swiss Finance Corporation (Mauritius) Ltd. 2190748 0.61 9 Copthall Mauritius Investment Ltd. 1990605 0.55 10 Calstrs Managed By Lazard Asset 1837055 0.51 Management LLC

PROMOTER HOLDING IN THE ISSUER

Sr. Name of Total No. Total shareholding No ofEquity % of Equity No. Shareholder of Equity as a %age of Total SharesPledg Shares pledged Shares No. of Equity ed with respect to held Shares shares owned 1 President of India 213168119 58.87% Nil N/A

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BORROWINGS

The borrowings of Bank as on March 31, 2013 stood as under: (Rs. in crore) Particulars of Borrowings Amount outstanding Borrowing in India Borrowings from Other Banks 3423.84 Borrowings from Other Institutions and Agencies 4640.26 Sub Total 8064.10 Borrowings Outside India 21148.22 Grand Total 29212.32 Besides the above, the Bank has raised unsecured subordinated bonds, details of which are as under:

1. PRIVATE PLACEMENT OF BONDS

The Bank has raised Tier I / Tier II capital by way of private placement of Unsecured Non-Convertible Bonds in the nature of Promissory Notes to augment capital adequacy. The details of the same are as under:

Series Date of Amount Tenor Coupon Redemption Allotment (Rs.cr) (months) (%) Date Lower Tier-II Bonds: Series XI 16.06.2006 884.80 118 8.45 April 16, 2016 Series XII 16.08.2006 115.00 116 9.15 April 16, 2016 Series XIII 08.09.2006 500.00 115 8.95 April 08, 2016 Upper Tier-II Bonds: Upper Tier II Series I* 06.12.2006 500.00 180 8.80 December 06, 2021 Upper Tier II Series II* 12.12.2007 500.00 180 9.35 December 12, 2022 Upper Tier II Series III* 05.03.2008 510.00 180 9.35 March 05, 2023 Upper Tier II Series IV* 27.03.2008 600.00 180 9.45 March 27, 2023 Upper Tier II Series V* 29.09.2008 500.00 180 10.85 September 29, 2023 Upper Tier II Series VI* 22.12.2008 500.00 180 8.95 December 22, 2023 Upper Tier II Series VII* 18.02.2009 1000.00 180 9.15 Feb 18, 2024 Upper Tier II Series VIII* 21.04.2009 500.00 180 8.80 April 21, 2024 Upper Tier II Series IX* 04.06.2009 500.00 180 8.37 June 4,2024 Upper Tier II Series X* 09.09.2009 500.00 180 8.60 September 09, 2024 Upper Tier II Series XI* 27.11.2009 500.00 180 8.60 November 27, 2024 Upper Tier II Series XII* 24.05.2010 500.00 180 8.50 May 24, 2025 IPDI Bonds: Tier I Perpetual Bond Series 20.07.2007 500.00 Perpetual 10.40 Perpetual I** Tier I Perpetual Bond Series 11.12.2007 300.00 Perpetual 9.75 Perpetual II** Tier I Perpetual Bond Series 18.01.2008 300.00 Perpetual 9.45 Perpetual III** Tier I Perpetual Bond Series 19.01.2009 220.50 Perpetual 8.90 Perpetual IV** Tier I Perpetual Bond Series 28.08.2009 500.00 Perpetual 9.15 Perpetual V** Tier I Perpetual Bond Series 27.11.2009 200.00 Perpetual 9.00 Perpetual VI** Note: The Bank has redeemed Series I to Series X and NBL 2000 on the due dates * Bond has call option after 10 years and coupon will go up by 0.50% after 10 years if not called back. ** Bond has call option after 10 years and thereafter on each coupon date: coupon will go up by 0.50% after 10 years if not called back.

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2. CERTIFICATEOFDEPOSITSISSUEDBYTHEISSUERAS ON DECEMBER 31,2013

Serial Amount ROI Issue Date Days Due Date No. (Rs Crore) 1 310 9.295 06-03-2013 364 05-03-2014 2 1000 9.26 11-03-2013 359 05-03-2014 3 675 9.18 12-03-2013 363 10-03-2014 4 50 9.18 12-03-2013 358 05-03-2014 5 750 9.19 13-03-2013 362 10-03-2014 6 885 9.00 15-03-2013 362 12-03-2014 7 300 9.18 15-03-2013 360 10-03-2014 8 200 9.18 18-03-2013 357 10-03-2014 9 1149 9.18 21-03-2013 364 20-03-2014 10 80 8.90 21-03-2013 356 12-03-2014 11 300 8.79 25-03-2013 360 20-03-2014 12 2150 9.18 26-03-2013 364 25-03-2014 13 225 9.18 26-03-2013 3499 10-03-2014 14 175 8.75 28-03-2013 362 25-03-2014 15 65 8.78 28-03-2013 362 25-03-2014 16 500 8.85 28-03-2013 342 05-03-2014 17 50 8.60 23-12-2013 60 21-02-2014 18 310 8.60 24-12-2013 59 21-02-2014 19 200 8.59 26-12-2013 57 21-02-2014 20 400 8.60 27-12-2013 60 25-02-2014 21 700 8.50 27-12-2013 60 21-02-2014 22 150 8.60 30-12-2013 60 28-02-2014 23 200 8.55 31-12-2013 62 03-03-2014

TOP 10 BONDHOLDERS (as on 14th Feb 2014)

Sr. Name of bondholder Total face value % No. amount of bonds Holding held (Rs. in crore) 1. Central Board of Trustees – Employees Provident Fund 3407.10 33.63% Organization 2. Life Insurance Corporation of India 2601.90 25.70% 3. State Bank Of India Employees Pension Fund 505 4.99% 4. Punjab National Bank Employees Pension Fund 302 2.99% 5. ONGC Self Contributory Post Retirement And Death In Service 163.50 1.62% Super Annuation Benefit Trust 6. Oil And Natural Gas Corporation Limited Employees 137.10 1.36% Contributory Provident Fund 7. Coal Mines Provident Fund Organization 110 1.10% 8. Punjab National Bank Employees Gratuity Fund 95 0.95% 9. Madhya Bihar Gramin Bank 80 0.80% 10. Provident Fund Of Tata Steel Limited 70.90 0.72% Total 7,472.50 73.87%

AMOUNT OF CORPORATE GUARANTEES ISSUED BY THE ISSUER IN FAVOUR OF VARIOUSCOUNTER PARTIES INCLUDING ITS SUBSIDIARIES, JOINT VENTURE ENTITIES, GROUP COMPANIESETC.

The Issuer has not issued any corporate guarantee in favour of any counterparty including its joint venture entities, group companies etc.

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OTHER BORROWINGS (INCLUDING HYBRID DEBT LIKE FOREIGN CURRENCY CONVERTIBLE BONDS (“FCCBs”), OPTIONALLY CONVERTIBLE BONDS/ DEBENTURES/ PREFERENCE SHARES)

The Bank has not issued any hybrid debt like Foreign Currency Convertible Bonds (“FCCBs”), Optionally Convertible Bonds/ Debentures (“OCBs”)/ Preference Shares etc.

PARTICULARS OF DEBT SECURITIES ISSUED (I) FOR CONSIDERATION OTHER THAN CASH, WHETHER IN WHOLE OR PART, (II) AT A PREMIUM OR DISCOUNT, OR (III) IN PURSUANCE OF AN OPTION

The Bank hereby confirms that it has not issued any debt securities or agreed to issue any debt securities for consideration other than cash, whether in whole or in part, at a premium or discount or in pursuance of an option since inception.

SERVICING BEHAVIOR ON EXISTING DEBT SECURITIES AND OTHER BORROWINGS

The Bank hereby confirms that: a) The main constituents of Bank‟s borrowings have been in the form of borrowings from RBI, inter-bank borrowings, call money borrowings, term money borrowings, savings bank deposits, current account deposits, term deposits, subordinated bonds, certificate of deposits etc. b) The Bank has been servicing all its principal and interest liabilities on time and there has been no instance of delay or default since inception. c) The Bank has neither defaulted in repayment/ redemption of any of its borrowings nor affected any kind of roll over against any of its borrowings in the past.

Disclosure Document

IX. AUDITED STANDALONE & CONSOLIDATED FINANCIAL INFORMATION OF THE ISSUER

Standalone Statement of Profit & Loss (in Rs crore)

Year ended Year ended Year ended S No Particulars March 31, 2011 March 31, 2012 March 31, 2013 I INCOME Interest Earned 26986.48 36476.13 41893.33 Other Income 3612.58 4202.60 4215.92 TOTAL 30599.06 40678.73 46109.25 II EXPENDITURE Interest Expended 15179.14 23061.69 27036.82 Operating Expenses 6364.22 7002.75 8165.05 Provisions and Contingencies 4622.20 5730.09 6159.70 TOTAL 26165.57 35794.53 41361.58 III PROFIT Net Profit for the period 4433.50 4884.20 4747.67 Available for Appropriation 4433.50 4884.20 4747.67 IV Appropriations Statutory Reserve 1108.37 1221.05 1186.92 Capital Reserve 12.02 33.02 30.35 Revenue and Other Reserves 2365.05 2634.52 2310.89 Dividend proposed for the year 696.99 746.19 954.38 Tax on Dividend proposed for the year 113.07 121.05 162.20 Add Balance Transferred from 0.00 -7.88 -3.06 Speprovisioncial Re forse Taxrve uon/s Dividend36(1) 138.00 136.25 106.00 Balance in Profit & Loss Account TOTAL 4433.50 4884.20 4747.67 Basic & Diluted Earnings per Share (in 140.60 154.02 139.52 Rs) (Nominal value per share Rs 10) Consolidated Statement of Profit & Loss (in Rs crore)

S Year ended Year ended Year ended Particulars No March 31, 2011 March31, 2012 March 31, 2013 I INCOME Interest Earned 27551.24 37495.40 43078.11 Other Income 3655.36 4239.51 4302.03 TOTAL 31206.60 41734.91 47380.14 II EXPENDITURE Interest Expended 15506.68 23789.49 27802.43 Operating Expenses 6449.67 7121.91 8337.30 Provisions and Contingencies 4734.66 5848.70 6313.17 TOTAL 26691.01 36760.10 42452.90 Consolidated Net Profit for the year of 4515.59 4974.81 4927.24 the parent & subsidiaries before Minority interest Less : Minority Interest 21.91 27.03 65.39 Consolidated Net Profit for the year of 4493.68 4947.78 4861.85 the parent & subsidiaries after Minority interest Shares of earnings in Associates (net) 81.05 77.68 92.36 Consolidated Net Profit for the year 4574.73 5025.46 4954.21 attributable to the group Add: Brought forward consolidated 359.49 452.25 463.47 profit attributable to the group Add: Transfer from Capital Reserve 4934.22 0.00 0.60 Profit available for Appropriation 5477.71 5417.68 APPROPRIATIONS

Disclosure Document

Transfer to Reserve (Net) Statutory reserve 1114.49 1291.81 1218.17 Capital reserve Others 12.02 33.43 41.41 Investment Fluctuation Reserve 0.00 0.00 0.00 Other reserve 2415.20 2688.16 2370.89 Special Reserve 152.42 151.45 106.00 Dividend Including Dividend Tax Proposed Dividend 814.15 868.78 1108.41 Interim Dividend 0.00 0.00 0.00 Balance Carried over to consolidated 425.94 444.06 572.80 Balance Sheet Total 4934.22 5477.71 5417.68 Earning per Share Non Annualised (in 145.08 148.17 140.16 Rs) (Nominal value per share Rs 10)

Standalone Balance Sheet (in Rs crore)

As on March As on March As on March Particulars 31, 2011 31,2012 31,2013 CAPITAL & LIABILITIES Capital 316.81 339.18 353.47 Reserves and Surplus 21191.75 27476.24 32323.43 Deposits 312898.73 379588.48 391560.06 Borrowings 31589.69 37264.27 39620.92 Other Liabilities and Provisions 12328.27 13524.18 15019.15 TOTAL 378325.24 458192.35 478877.04

ASSETS Cash and Balances with Reserve Bank of India 23776.90 18492.90 17886.25 Balances with Banks and Money at Call and 5914.32 10335.14 9249.13 Short Notice Investments 95162.35 122703.02 129896.19 Advances 242106.67 293774.76 308725.21 Fixed Assets 3105.60 3168.86 3357.68 Other Assets 8259.42 9717.67 9762.58 TOTAL 378325.24 458192.35 478877.04 Contingent Liabilities 126933.72 208036.65 214279.12 Bills for Collection 11981.54 16713.41 17531.43

Disclosure Document

Consolidated Balance Sheet (in Rs crore)

As on March As on March 31, As on March 31, Particulars 31, 2011 2012 2013 CAPITAL & LIABILITIES Capital 316.81 339.18 353.47 Reserves and Surplus 22297.85 28864.66 34115.56 Minority Interest 301.29 331.42 366.28 Deposits 316231.93 384408.22 399000.16 Borrowings 34638.50 42645.42 47089.98 Other Liabilities and Provisions 12497.43 13856.49 15651.65 TOTAL 386283.81 470445.39 496577.10

ASSETS Cash and Balances with Reserve Bank of India 23791.19 18507.64 17929.51 Balances with Banks and Money at Call and 6300.11 11612.25 10203.52 Short Notice Investments 96911.28 125819.89 134733.99 Loans & Advances 247746.58 301346.52 320218.45 Fixed Assets 3150.48 3217.14 3422.36 Other Assets 8384.17 9941.95 10069.27 TOTAL 386283.81 470445.39 496577.10 Contingent Liabilities 127611.28 212421.74 218910.71 Bills for Collection 11981.55 16322.79 17531.43

Standalone Cash Flows Statement (in Rs crore)

Year ended Year ended Year ended S No Particulars March 31, 2011 March 31, 2012 March 31, 2013 A Cash flow from operating activities: Net Profit after Tax 44334953 48842044 47476714 Add: Provision for Tax (net of deferred 21302252 21528377 17740908 tax) Profit before taxes (i) 65637205 70370421 65217622 (ii) Adjustment for Depreciation Charges (Gross) / Fixed 2770781 3134902 3391776 Assets Less: Amount drawn from Revaluation -212301 -212301 -206733 Reserve Provision for NPAs, Floating provision 20037527 23977073 33363928 towards NPAs and Bad Debts Write off Provision on standard assets & Standard 3297050 8480650 8742507 Restructured Accounts Other Provisions (net) -140226 923482 1446301 Depreciation/(Release),Write off, 1719652 2391278 303350 Provision on Investment(net) Dividend from subsidiary/Other(Investing -263422 -261147 -170170 activity) Interest on Bonds ( financing Activity) 9871564 9944703 9674516 Profit/Loss on sale of Fixed asset (net) -30519 -42495 -25900 ii) 37050106 48336145 56519575 Operating Profit before Change in 102687311 118706566 121737197 Operating assets and liabilities (i+ii) iii) Adjustment for net change in operating Assets and liabilities Decrease/(Increase) in Investment -172115117 -275617895 -70776901 Decrease/(Increase) in advances -575092108 -540711883 -182868447 Decrease/(Increase) in other Assets -26357406 -12941742 -4718180

Disclosure Document

Increase/(Decrease) in Deposits 635689236 666897526 119715842 Increase/(Decrease) in Borrowings 118273245 56745800 26516541 Increase/(Decrease) in Other Liabilities 12016657 2664192 -13557374 & Provisions (iii) -7585493 -102964002 -125688519 Cash generated from Operations 95101818 15742564 -3951322 (i+ii+iii) Tax Paid (net of refund) -14645153 -23854735 -14915808 Net cash from operating activities (A) 80456665 -8112171 -18867130 B Cash flow from investing activities: Purchase of Fixed assets( Net of sale) -8661533 -3725057 -5254039 Dividend received from 263422 261147 170170 Subsidiaries/JVs/RRBs Investment in Subsidiaries/JVs/RRBs -2438475 -1459499 -1424613 Net cash used in investing activities -10836586 -4923409 -6508482 (B) C Cash flow from financing activities: Share Capital ( Inncl. Premium) 1840001 22449056 12480001 Bonds( Tier I & Tier II) 5000000 0.00 -2950000 Issued/Redemption Interest paid on Bonds -9871564 -9944703 -9674516 Payments of dividends/Corporate Tax -4412043 -8100554 8593618 on Dividend Net cash from financing activities (C) 7443606 4403799 8449103 D Net change in cash & cash 62176473 -8631781 -16926509 equivalents (A)+(B)+(C) Cash and cash equivalents as at the beginning of the year Cash and Balance with Reserve bank of 183275755 237768960 184928960 India Balance with Banks & Money at call & 51459888 59143156 103351375 short notice 234735643 296912116 288280335 Cash and cash equivalents as at the end of the year Cash and Balance with Reserve bank of 237768960 184928960 178862497 India Balance with Banks & Money at call & 59143156 103351375 92491329 short notice 296912116 288280335 271353826 Total 62176473 -8631781 -16926509

Consolidated Cash Flows Statement (in Rs crore)

Year ended Year ended Year ended S No Particulars March 31, 2011 March 31, 2012 March 31, 2013 A Cash flow from ( Used in) operating activities: Net Profit after Tax 4515.59 4974.81 4927.24 Add: Share of earning in Associate 81.05 77.68 92.36 Net Profit before Minority interest 4596.64 5052.49 5019.60 Add: Provision for Tax ( Net of Deffered 2178.61 2196.48 1859.23 Tax) (i) Profit before Tax 6775.25 7248.97 6878.83 (ii) Adjustment for Depreciation Charges ( Gross) / Fixed 285.82 323.00 356.19 Assets

Disclosure Document

Less: Amount drawn from Revaluation -21.23 -21.23 -20.67 Reserve Provision for NPAs, Floating provision 2041.81 2932.51 3370.15 towards NPAs and Bad Debts Write off Provision on standard assets & 329.71 848.63 884.05 Standard Restructured Accounts Other Provisions (net) -10.46 92.35 57.72 Depreciation/(Release),Write off, 187.23 235.09 25.74 Provision on Investment(net) Dividend from 0.00 0.00 0.00 subsidiary/Other(Investing activity) Interest on Bonds ( financing Activity) 987.16 994.47 967.45 Profit/Loss on sale of Fixed asset (net) -2.96 -4.35 -2.68 ii) 3797.08 5400.47 5637.95 Operating Profit before Change in 10572.33 12649.44 12516.78 Operating assets and liabilities (i+ii) iii) Adjustment for net change in operating Assets and liabilities Decrease/(Increase) in Investment -17829.37 -28632.10 -8898.13 Decrease/(Increase) in advances -58677.55 -56844.25 -22242.08 Decrease/(Increase) in other Assets -2615.24 -1401.90 -383.48 Increase/(Decrease) in Deposits 64774.27 68176.30 14591.95 Increase/(Decrease) in Borrowings 11238.13 7992.53 4676.83 Increase/(Decrease) in Other Liabilities 1414.54 516.14 648.73 & Provisions (iii) -1695.22 -10193.28 -11606.18 Cash generated from Operations 8877.11 2456.16 910.60 (i+ii+iii) Tax Paid (net of refund) -1516.45 -2481.24 -1603.07 Net cash used in operating 7360.66 -25.08 -692.47 activities (A) B Cash flow from investing activities: Purchase of Fixed assets( Net of sale) -896.79 -385.31 -558.73 Dividend received from 0.00 0.00 0.00 Subsidiaries/JVs/RRBs Investment in Subsidiaries/JVs/RRBs -15.26 -11.73 -41.71 Other Investment 0.00 0.00 0.00 Net cash used in investing activities -912.05 -397.04 -600.44 (B) C Cash flow from financing activities: Issue of Share Capital ( Inncl. Share 184.00 2224.94 1374.60 Premium) Bonds( Tier I & Tier II) 637.43 14.39 -232.32 Issued/Redemption Interest paid on Bonds ( Tier I & II) -987.16 -994.47 -967.45 Payments of dividends( Inclusive Tax --442.27 -814.15 -868.78 on Dividend) Net cash used in financing -608.00 450.71 -693.95 activities (C) D Net change in cash & cash 5840.61 28.59 -1986.86 equivalents (A)+(B)+(C) Cash and cash equivalents as at the beginning of the year Cash and Balance with Reserve bank 18334.78 23791.19 18507.64 of India Balance with Banks & Money at call & 5915.91 6300.11 11612.25 short notice

Disclosure Document

24250.69 30091.30 30119.89 Cash and cash equivalents as at the end of the year Cash and Balance with Reserve bank 23791.19 18507.64 17929.51 of India Balance with Banks & Money at call & 6300.11 11612.25 10203.52 short notice 30091.30 30119.89 28133.03 Total 5840.61 28.59 -1986.86

Disclosure Document

X. LIMITED REVIEW QUARTERLY STANDALONE FINANCIAL INFORMATION OF THE ISSUER AS OF DECEMBER 31, 2013

Particulars Year Quarter Ended Nine Months Ended Ended 31.12.2013 30.09.2013 31.12.2012 31.12.2013 31.12.2012 31.03.2013 Reviewed Reviewed Reviewed Reviewed Reviewed Audited Interest Earned 10983.87 10733.51 10527.25 32121.92 31509.20 41885.82 ( a+b+c+d ) a) Interest/discount on 8246.39 8022.84 7885.04 24143.96 24056.67 31847.04 advances/bills b) Income on 2598.81 2568.30 2506.55 7606.43 7124.32 9529.95 Investments c) Interest on Balances 94.93 100.90 108.74 274.40 222.58 324.86 with RBI & other Inter Bank Funds d) Others 43.74 41.47 26.92 97.13 105.63 183.97 Other Income 938.43 899.33 972.02 3179.81 3047.21 4223.43 TOTAL INCOME 11922.30 11632.84 11499.27 35301.73 34556.41 46109.25 (1+2) Interest Expended 6762.75 6717.97 6795.44 19977.75 20436.69 27036.82 Operating Expenses 2457.17 2380.03 2021.92 7112.96 6064.06 8165.06 (i+ii) (i) Employees' Cost 1758.04 1658.70 1407.47 5032.67 4253.45 5674.72 (ii) Other operating 699.13 721.33 614.45 2080.29 1810.61 2490.34 expenses TOTAL EXPENSES 9219.92 9098.00 8817.36 27090.71 26500.75 35201.88 (4+5) (excluding provisions & contingencies) Operating Profit (3-6) 2702.38 2534.84 2681.91 8211.02 8055.66 10907.37 (Profit before Provisions & Contingencies) Provisions (other than 1590.04 1898.73 801.59 4555.25 2907.91 4385.61 tax) and contingencies Exceptional items 0.00 0.00 0.00 0.00 0.00 0.00 Profit (+)/Loss (-) 1112.34 636.11 1880.32 3655.77 5147.75 6521.76 from ordinary activities before tax (7-8-9) Tax Expense 356.93 130.62 574.70 1119.55 1530.88 1774.09 Net Profit (+)/Loss(-) 755.41 505.49 1305.62 2536.22 3616.87 4747.67 from ordinary activities after tax (10-11) Extraordinary items 0.00 0.00 0.00 0.00 0.00 0.00 (net of tax expense) Net Profit (+)/Loss(-) 755.41 505.49 1305.62 2536.22 3616.87 4747.67 for the period (12-13) Paid up equity Share 362.07 353.47 339.18 362.07 339.18 353.47 Capital (Face value Rs.10/-) Reserves excluding 30894.58 30894.58 26028.37 30894.58 26028.37 30894.58 revaluation reserves (As per Balance Sheet of previous year) Analytical Ratios (i) Share holding of 58.87 57.87 56.10 58.87 56.10 57.87 Govt. of India (%)

Disclosure Document

(iia) Capital Adequacy 11.62 12.32 11.66 11.62 11.66 12.72 Ratio (%) as per Basel-II (iib) Capital Adequacy 11.02 11.62 NA 11.02 NA NA Ratio (%) as per Basel-III (iii) Earnings per Share (EPS) not annualized (in Rs.) (a) Basic & diluted 21.29 14.30 106.64 71.66 106.64 139.52 EPS before extraordinary items (b) Basic & diluted 21.29 14.30 106.64 71.66 106.64 139.52 EPS after extraordinary items (iv) NPA Ratios: (a) Amount of gross 16595.84 16526.26 13997.82 16595.84 13997.82 13465.79 non-performing assets (b) Amount of net non- 9083.99 9609.02 7586.17 9083.99 7586.17 7236.50 performing assets (c) % of gross NPAs 4.96 5.14 4.61 4.96 4.61 4.27 (d) % of net NPAs 2.80 3.07 2.56 2.80 2.56 2.35 (v) Return on 0.58 0.40 1.03 0.67 1.03 1.00 Assets ( Annualised) % Public Shareholding (i) No. of Shares 148901807 148901807 148901807 148901807 148901807 148901807 (ii) Percentage of 41.13 42.13 43.90 41.13 43.90 42.13 Share holding Promoters and Promoter Group Share Holding Pledged/Encumbered --Number of shares Nil Nil Nil Nil Nil Nil --Percentage of Nil Nil Nil Nil Nil Nil shares(as % of the total shareholding of promoter & promoter group) --Percentage of Nil Nil Nil Nil Nil Nil shares(as % of the total share capital of the bank) Non-Encumbered --Number of shares 213168119 204571589 190276876 213168119 190276876 204571589 --Percentage of 100 100 100 100 100 100.00 shares(as % of the total shareholding of promoter & promoter group) --Percentage of shares 58.87 57.87 56.10 58.87 56.10 57.87 (as % of the total share capital of the bank)

Disclosure Document

XI. SUMMARY TERM SHEET

Issuer Punjab National Bank(“PNB”/ the “Bank”/ the “Issuer”) Issue Size Rs. 1,000 crore Objects of the Issue Augmenting Tier 2 Capital and overall capital of the Bank for strengthening its capital adequacy and for enhancing its long-term resources Instrument Non-Convertible Redeemable Unsecured Basel III compliant Tier 2 Bonds in the nature of Debentures of Rs. 10 lacs each (“Bonds”) Nature and status of Claims of the Bondholders shall be (i) senior to the claims of investors in Bonds instruments eligible for inclusion in Tier 1 capital (ii) subordinate to the claims of all depositors and general creditors of the Bank and (iii) the Bonds shall neither be secured nor covered by a guarantee of the Issuer or its related entity or other arrangement that legally or economically enhances the seniority of the claim vis- à-vis creditors of the Bank Issuance Mode In Demat mode only Convertibility Non-Convertible Trading Mode In demat mode only Credit Rating “CRISIL AAA/Stable” by Crisil and “[ICRA]AAA (hyb)” by ICRA Mode of Issue Private Placement Security Unsecured Loss Absorbency The Bonds shall be subjected to loss absorbency features applicable for non- equity capital instruments vide RBI Master Circular No. DBOD.No.BP.BC.2 /21.06.201/2013-14 dated July 01, 2013 on Basel III capital regulations covering criteria for inclusion of debt capital instruments as Tier 2 capital (Annex 5) and minimum requirements to ensure loss absorbency of additional Tier 1 instruments at pre-specified trigger and of all non-equity regulatory capital instruments at the Point of Non-viability (“PONV”) (Annex 16).

Accordingly, the Bonds may at the option of the RBI either be permanently written off or temporarily written off on the occurrence of the trigger event called the Point of Non Viability. PONV trigger event shall be as defined in the aforesaid RBI Circular and shall be determined by the RBI. Treatment in The Bondholders shall have no rights to accelerate the repayment of future Bankruptcy/ scheduled payments (coupon or principal) except in bankruptcy and liquidation Liquidation PONV The Bonds, at the option of the Reserve Bank of India, can be temporarily written down or permanently written off upon occurrence of the trigger event, called the „Point of Non-Viability Trigger (“PONV Trigger”) PONV Trigger The PONV Trigger event is the earlier of:

a. a decision that a temporary/ permanent write off is necessary without which the Bank would become non viable, as determined by the RBI; and

b. the decision to make a public sector injection of capital, or equivalent support, without which the Bank would have become non viable, as determined by the relevant authority. The write-off consequent upon the trigger event shall occur prior to any public sector injection of capital so that the capital provided by the public sector is not diluted.

For this purpose, a non-viable bank will be:

Disclosure Document

A bank facing financial difficulties and approaching a PONV shall be deemed to achieve viability if within a reasonable time in the opinion of RBI, it will be able to come out of the present difficulties if appropriate measures are taken to revive it. The measures including temporary/ permanent write-off/ public sector injection of funds are likely to:

a. Restore confidence of the depositors/ investors; b. Improve rating/ creditworthiness of the bank and thereby improving its borrowing capacity and liquidity and reduce cost of funds; and c. Augment the resource base to fund balance sheet growth in the case of fresh injection of funds. Face Value Rs. 10.00 lacs per Bond Premium/ Discount Nil on Issue Issue Price At par (Rs.10.00 lacs per Bond) Premium/ Discount Nil on redemption Maturity Redeemable after 120 months from the Deemed Date of Allotment Redemption/ 24th February 2024 Maturity Date Lock-in-Period Not Applicable Minimum 5 (five) Bonds and in multiples of 1Bond thereafter Application Put Option None Call Option None Call Option Price Not applicable Call Notification Not applicable Time Coupon Rate 9.65% per annum Step Up/ Step Down None Coupon Rate Coupon Payment Annual Frequency Coupon Payment Annually on 24th February and on maturity Dates Coupon Type Fixed Coupon Reset Not Applicable Process (including rates, spread, effective date, interest rate cap and floor etc) Default Interest Not Applicable Rate Day Count Basis Actual/ Actual Coupon/ interest shall be computed on a 365 days-a-year basis on the principal outstanding on the Bonds. Where the coupon/ interest period (start date to end date) includes February 29, coupon/ interest rate will be computed on 366 days- a-year basis, on the principal outstanding on the Bonds Interest on Interest at the coupon rate (subject to deduction of income tax under the Application Money provisions of the Income Tax Act, 1961, or any other statutory modification or re- enactment thereof, as applicable) will be paid to the applicants on the application money for the Bonds for the period starting from and including the date of realization of application money in Issuer‟s Bank Account upto one day prior to the Deemed Date of Allotment Listing Proposed on the Wholesale Debt Market (WDM) segment of National Stock Exchange of India Limited (“NSE”) / BSE Trustees IDBI Trusteeship Services ltd. Depository National Securities Depository Limited (“NSDL”) and Central Depository Services (India) Limited (“CDSL”) Registrars M/s Alankit Assignments limited

Disclosure Document

Business Day 'Business Day' shall be a day on which commercial banks are open for business Convention in the city of Mumbai. Effect of Holidays If any Coupon Payment Date falls on a day that is not a Business Day, the payment shall be made by the Bank on the immediately succeeding Business Day along with interest for such additional period. Further, interest for such additional period so paid, shall be deducted out of the interest payable on the next Coupon Payment Date.

If the Redemption Date (also being the last Coupon Payment Date) of the Bonds falls on a day that is not a Business Day, the redemption proceeds shall be paid by the Bank on the immediately preceding Business Day along with interest accrued on the Bonds until but excluding the date of such payment. Record Date 15 days prior to each coupon payment date and redemption date Eligible Investors Mutual Funds, Public Financial Institutions as defined under section 4A of the Companies Act, 1956,Scheduled Commercial Banks, Insurance Companies, Provident Funds, Gratuity Funds, Superannuation Funds and Pension Funds, Co- operative Banks, Regional Rural Banks authorized to invest in bonds/ debentures, Companies and Bodies Corporate authorized to invest in bonds/ debentures, Trusts authorized to invest in bonds/ debentures, Statutory Corporations/ Undertakings established by Central/ State legislature authorized to invest in bonds/ debentures, etc Non-Eligible classes Minors without a guardian name, Qualified Foreign Investors, Foreign Nationals, of Investors Persons resident outside India, Venture Capital Funds, Alternative Investment Funds, Overseas Corporate Bodies, Partnership firms formed under applicable laws in India in the name of the partners, Hindu Undivided Families through Karta, Person ineligible to contract under applicable statutory/ regulatory requirements etc. Transaction The Issuer shall execute the documents including but not limited to the following Documents in connection with the Issue:

a. Letter appointing Trustee to the Bondholders; b. Debenture Trusteeship Agreement; c. Letter appointing Arranger to the Issue; d. Letter appointing Registrar and Agreement entered into between the Issuer and the Registrar; e. Rating Agreement with rating agency f. Tripartite Agreement between the Issuer; Registrar and NDSL for issue of Bonds in dematerialized form; g. Tripartite Agreement between the Issuer; Registrar and CDSL for issue of Bonds in dematerialized form; h. Application made to NSE for seeking its in-principle approval for listing of Bonds; i. Listing Agreement with NSE/BSE. Conditions The subscription from applicants shall be accepted for allocation and allotment by precedent to the Issuer subject to the following: subscription of a. Rating letter from rating agency not being more than one month old from the Bonds issue opening date; b. Consent letter from the Trustees to act as Trustee to the Bondholder(s); c. Letter from stock exchange conveying in-principle approval for listing & trading of Bonds. Conditions The Issuer shall ensure that the following documents are executed/ activities are subsequent to completed as per terms of this Disclosure Document: subscription of Bonds a. Credit of demat account(s) of the Allottee(s) by the number of Bonds allotted within 2 working days from the Deemed Date of Allotment; b. Making application to NSE within 15 days from the Deemed Date of Allotment to list the Bonds and seek listing permission within 20 days from the Deemed Date of Allotment in terms of sub-section (1) of Section 73 of the Companies Act, 1956 (1 of 1956): c. Neither the Bank nor any related party over which the Bank exercises control or significant influence (as defined under relevant Accounting Standards) shall purchase the Bonds, nor would the Bank directly or indirectly fund the purchase of the Bonds. The Bank shall also not grant advances against the security of the Bonds issued by it. d. Besides, the Issuer shall perform all activities, whether mandatory or otherwise, as mentioned elsewhere in this Disclosure Document. 34

Disclosure Document

Cross Default Not Applicable Role and The Trustees shall perform its duties and obligations and exercise its rights and Responsibilities of discretions, in keeping with the trust reposed in the Trustees by the holder(s) of Trustees the Bonds and shall further conduct itself, and comply with the provisions of all applicable laws, provided that, the provisions of Section 20 of the Indian Trusts Act, 1882, shall not be applicable to the Trustees. The Trustees shall carry out its duties and perform its functions as required to discharge its obligations under the terms of SEBI Debt Regulations, the Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993, the Debenture Trusteeship Agreement, Disclosure Document and all other related transaction documents, with due care, diligence and loyalty.

The Trustees shall be vested with the requisite powers for protecting the interest of holder(s) of the Bonds including but not limited to the right to appoint a nominee director on the Board of the Issuer in consultation with institutional holders of such Bonds. The Trustees shall ensure disclosure of all material events on an ongoing basis.

The Issuer shall, till the redemption of Bonds, submit its latest audited/ limited review half yearly consolidated (wherever available) and standalone financial information such as Statement of Profit & Loss, Balance Sheet and Cash Flow Statement and auditor qualifications, if any, to the Trustees within the timelines as mentioned in Simplified Listing Agreement issued by SEBI vide circular No. SEBI/IMD/BOND/1/2009/11/05 dated May 11, 2009 as amended. Besides, the Issuer shall within 180 days from the end of the financial year, submit a copy of the latest annual report to the Trustees and the Trustees shall be obliged to share the details so submitted with all „Qualified Institutional Buyers‟ (QIBs) within two working days of their specific request. Governing Law and The Bonds a are governed by and shall be construed in accordance with the Jurisdiction existing laws of India. Any dispute arising thereof shall be subject to the jurisdiction on of District Courts of Mumbai, Maharashtra. Additional i. in case of default in payment of interest and/ or principal redemption on the Covenants due dates (except in case of regulatory requirements as mentioned hereinabove), the Bank shall pay additional interest at the rate of 2.00% p.a. over the Coupon Rate for the defaulting period i.e. the period commencing from and including the date on which such amount becomes due and upto but excluding the date on which such amount is actually paid.

ii. In case of delay in listing of the Bonds beyond 20 days from the Deemed Date of Allotment, the Bank shall pay penal interest at the rate of 1.00% p.a. over the Coupon Rate from the expiry of 30 days from the Deemed Date of Allotment till the listing of Bonds to the Bondholders. Such penal interest shall be paid by the Bank to the Bondholders on the first Coupon Payment Date.

The interest rates mentioned in above two cases shall be payable by the Bank and are independent of each other. Applicable RBI The issue of Bonds shall be made in pursuance of Master Circular No. Guidelines DBOD.No.BP.BC.2 /21.06.201/2013-14 dated July 01, 2013 issued by the Reserve Bank of India on Basel III capital regulations including criteria for inclusion of debt capital instruments as Tier 2 capital (Annex 5 of the Master Circular) and minimum requirements to ensure loss absorbency of non equity regulatory capital instruments at the Point of Non Viability (“PONV”) (Annex 16 of the Master Circular). Prohibition on Neither the Bank nor a related party over which the Bank exercises control or Purchase/ Funding significant influence (as defined under relevant Accounting Standards) shall of Bonds purchase the Bonds, nor shall the Bank directly or indirectly fund the purchase of the Bonds. The Bank shall also not grant advances against the security of the Bonds issued by it Issue Opening Date 24th February 2014 Issue Closing Date 24th February 2014 Pay In Date 24th February 2014 Deemed Date of 24th February 2014 Allotment

Disclosure Document

XII. TERMS OF OFFER

(DETAILS OF DEBT SECURITIES PROPOSED TO BE ISSUED, MODE OF ISSUANCE, ISSUE SIZE, UTILIZATION OF ISSUE PROCEEDS, STOCK EXCHANGES WHERE SECURITIES ARE PROPOSED TO BE LISTED, REDEMPTION AMOUNT, PERIOD OF MATURITY, YIELD ON REDEMPTION, DISCOUNT AT WHICH OFFER IS MADE AND EFFECTIVE YIELD FOR INVESTOR)

1. ISSUE SIZE

PNB proposes to raise upto Rs 1000 crore through issue of Non-Convertible Redeemable Unsecured Basel III compliant Tier 2 Bonds (Series XIV) for inclusion in Tier 2 Capital in the nature of Debentures of face value of Rs. 10 lakhs each.

2. ELIGIBILITY TO COME OUT WITH THE ISSUE

The Bank or its promoter has not been restrained or prohibited or debarred by SEBI/ any other Government authority from accessing the securities market or dealing in securities and no such direction or order is in force.

3. REGISTRATION AND GOVERNMENT APPROVALS

The Bank can undertake the activities proposed by it in view of the present approvals and no further approval from any government authority(ies) is required by it to undertake the proposed activities save and except those approvals which may be required to be taken in the normal course of business from time to time.

4. AUTHORITY FOR THE ISSUE

The present issue of Bonds is being made pursuant to the resolution of the Board of Directors of the Bank, passed at its meeting held on 23rd October 2013 and the delegation provided there under.

The present issue of Bonds is being made in pursuance of Master Circular No. DBOD.No.BP.BC.2 /21.06.201/2013-14 dated July 01, 2013 issued by the Reserve Bank of India on Basel III capital regulations including criteria for inclusion of debt capital instruments as Tier 2 capital (Annex 5 of the Master Circular) and minimum requirements to ensure loss absorbency of non equity regulatory capital instruments at the Point of Non Viability (“PONV”) (Annex 16 of the Master Circular). The Bank can issue the Bonds proposed by it in view of the present approvals and no further internal or external permission/ approval(s) is/ are required by it to undertake the proposed activity.

5. OBJECTS OF THE ISSUE

The proposed issue of Bonds is being made for augmenting Tier 2 capital and overall capital of the Bank for strengthening its capital adequacy and for enhancing its long-term resources.

6. UTILISATION OF ISSUE PROCEEDS

The funds being raised by the issuer through the present issue of Bonds are not meant for financing any particular project. The Issuer shall utilize the proceeds of the issue for its regular business activities. The Issuer is subject to a number of regulatory checks and balances as stipulated in its regulatory environment. The Issuer is a Government of India undertaking under the administrative control of Ministry of Finance, Government of India and is managed by professionals under the supervision of the Board of Directors. The management of the Issuer shall ensure that the funds raised via the present issue shall be utilized only towards satisfactory fulfilment of the objects of the issue.

The Issuer undertakes that proceeds of the present issue shall not be used for any purpose which may be in contravention of the regulations/ guidelines/ norms issued by the RBI / SEBI / Stock Exchange(s).

Disclosure Document

In accordance with the SEBI Debt Regulations, the Issuer undertakes that it shall not utilize the proceeds of the issue for providing loan to or acquisition of shares of any person who is part of the same group or who is under the same management. However, the Issuer is a Government of India Undertaking and, as such, it does not have any identifiable „Group Companies‟ or „Companies under the Same Management‟. The issue proceeds shall not be utilized towards full or part consideration for the purchase of any acquisition, including by way of a lease, of any property.

Further, the Issuer undertakes that issue proceeds from the present issue of Bonds shall not be used for any purpose which may be in contravention of the RBI guidelines on bank financing to NBFCs including those relating to classification as capital market exposure or any other sectors that are prohibited under the RBI regulations.

7. MINIMUM SUBSCRIPTION

In terms of the SEBI Debt Regulations, the Bank may decide the amount of minimum subscription which it seeks to raise by issue of Bonds and disclose the same in the Disclosure Document. The Bank has decided not to stipulate any minimum subscription for the present Issue and therefore the Bank shall not be liable to refund the issue subscription(s)/ proceed(s) in the event of the total issue collection falling short of issue size or certain percentage of issue size.

8. UNDERWRITING

The present Issue of Bonds is not underwritten

9. STATUS OF BONDHOLDERS/ SENIORITY OF CLAIM

The Bonds are to be issued in the form of Unsecured Basel III Compliant Tier 2 Bonds (Series XIV) in the nature of debentures of Rs. 10 lacs each. The claims of the Bondholders shall be (i) senior to the claims of investors in instruments eligible for inclusion in Tier 1 capital (ii) subordinate to the claims of all depositors and general creditors of the Bank and (iii) the Bonds shall neither be secured nor covered by a guarantee of the Issuer or its related entity or other arrangement that legally or economically enhances the seniority of the claim vis-à-vis creditors of the Bank.

The Bondholders shall have no rights to accelerate the repayment of future scheduled payments (coupon or principal) except in bankruptcy and liquidation.

10. POINT OF NON VIABILITY (“PONV”)

These Bonds, at the option of the Reserve Bank of India, can be temporarily written down or permanently written off upon occurrence of the trigger event, called the Point of Non-Viability Trigger (“PONV Trigger”).

11. PONV Trigger

The PONV Trigger event is the earlier of: a. a decision that a temporary/ permanent write off is necessary without which the Bank would become non- viable, as determined by the RBI; and b. the decision to make a public sector injection of capital, or equivalent support, without which the Bank would have become non-viable, as determined by the relevant authority. The write-off consequent upon the trigger event shall occur prior to any public sector injection of capital so that the capital provided by the public sector is not diluted.

For this purpose, a non-viable bank will be:

A bank which, owing to its financial and other difficulties, may no longer remain a going concern on its own in the opinion of the Reserve Bank of India unless appropriate measures are taken to revive its operations and thus, enable it to continue as a going concern. The difficulties faced by a bank should be such that these are likely to result in financial losses and raising the Common Equity Tier 1 capital of the bank should be considered as the most appropriate way to prevent the bank from turning non-viable. Such measures would include temporary and/or permanent write-off in combination with or without other measures as considered appropriate by the Reserve Bank of India. A bank facing financial difficulties and approaching a PONV shall be deemed to achieve viability if within a reasonable time in the opinion of RBI, it will be able to come out of the present difficulties if appropriate measures are taken to revive it. The measures including temporary/ permanent write-off/ public sector injection of funds are likely to:

Disclosure Document

12. LOSS ABSORPTION FEATURES

The Bonds shall have temporary written-down/ permanent write-off features. Whichever option is exercised, it shall be exercised across all the Bondholders in the Issue. The Bonds subject to temporary write-down may be written-up subsequently subject to the following conditions: a. It should be done at least one year after the Bank makes the first payment of dividend to its common shareholders after breaching the pre-specified trigger; b. Aggregate write-up in a year should be restricted to a percentage of dividend declared during a year, the percentage being the ratio of the „equity created by written-down Bonds to „the total equity minus the equity created by written-down Bonds; c. Aggregate write-up in a year, should also not exceed 25% of the amount paid as dividend to the common shareholders in a particular year; d. The Bank can pay coupon on written-up amount from the distributable surplus as and when due subject to the normal rules applicable to Tier 2 Bonds. However, both the amount written-up and paid as coupon in a year will be reckoned as amount distributed for the purpose of complying with restrictions on distributing earnings as envisaged in the capital conservation buffer framework; e. If the Bank is amalgamated with or acquired by another bank after a temporary write-down and the equity holders get positive compensation on amalgamation/ acquisition, the holders of Bonds which have been temporarily written-down shall also be appropriately compensated; f. The write-down may be allowed more than once in case the Bank hits the pre-specified trigger level subsequent to the first write-down which was partial. Also, the Bonds once written-up can be written- down again; g. If the Bank goes into liquidation before the Bonds have been written-down, these Bonds shall absorb losses in accordance with the order of seniority and as per usual legal provisions governing priority of charges; h. If the Bank goes into liquidation after the Bonds have been written-down temporarily but yet to be written- up, the holders of Bonds shall have a claim on the proceeds of liquidation pari-passu with the equity holders in proportion to the amount written-down; i. If the Bank goes into liquidation after the Bonds have been written-down permanently, the holders of the Bonds shall have no claim on the proceeds of liquidation; j. If the Bank is amalgamated with any other bank before the Bonds have been written-down, the Bonds shall become a part of the corresponding categories of regulatory capital of the new bank emerging after the merger; k. If the Bank is amalgamated with any other bank after the Bonds have been written-down temporarily, the amalgamated entity can write-up the Bonds as per its discretion; l. If the Bank is amalgamated with any other bank after the non-equity regulatory capital instruments have been written-off permanently, these cannot be written-up by the amalgamated entity; m. If the relevant authorities decide to reconstitute the Bank or amalgamate the Bank with any other bank under the Section 45 of BR Act, 1949, such a bank will be deemed as non-viable or approaching non- viability and both the pre-specified trigger and the trigger at the point of non-viability for conversion/ write- down of Bonds shall be activated. Accordingly, the Bonds will be written-off before amalgamation/ reconstitution in accordance with applicable rules;

Disclosure Document

n. The Bonds shall be written-down in order in which they would absorb losses in a gone concern situation. These Bonds shall absorb losses in accordance with the order of seniority and as per usual legal provisions governing priority of charges; o. The Bonds shall have one or more of the following features:

a. temporary/permanent write-off in cases where there is no public sector injection of funds; and

b. permanent write-off in cases where there is public sector injection of funds. p. The amount of Bonds to be written-off shall be determined by the Reserve Bank of India; q. When the Bank breaches the PONV Trigger and the equity is replenished through write-down/ write-off, such replenished amount of equity shall be excluded from the total equity of the Bank for the purpose of determining the proportion of earnings to be paid out as dividend in terms of rules laid down for maintaining capital conservation buffer. However, once the Bank has attained total Common Equity ratio of 8% without counting the replenished equity capital, that point onwards, the Bank may include the replenished equity capital for all purposes; r. The framework relating to temporary/ permanent write-down/ write-off of the Bonds shall be invoked when the Bank is adjudged by Reserve Bank of India to be approaching the point of non-viability, or has already reached the point of non-viability, but in the views of RBI:

a. there is a possibility that a timely intervention in form of capital support, with or without other supporting interventions, is likely to rescue the Bank; and

b. if left unattended, the weaknesses would inflict financial losses on the Bank and, thus, cause decline in its common equity level. s. The purpose of write-off of the Bonds shall be to shore up the capital level of the Bank. RBI would follow a two-stage approach to determine the non-viability of a Bank. The Stage 1 assessment would consist of purely objective and quantifiable criteria to indicate that there is a prima facie case of a Bank approaching non-viability and, therefore, a closer examination of the Bank‟s financial situation is warranted. The Stage 2 assessment shall consist of supplementary subjective criteria which, in conjunction with the Stage 1 information, would help in determining whether the Bank is about to become non-viable. These criteria shall be evaluated together and not in isolation. t. Once the PONV is confirmed, the next step would be to decide whether rescue of the Bank would be through only write-off or write-off in conjunction with a public sector injection of funds. u. The trigger at PONV shall be evaluated both at consolidated and solo level and breach at either level shall trigger write-down. v. As the capital adequacy is applicable both at solo and consolidated levels, the minority interests in respect of capital instruments issued by subsidiaries of the Bank including overseas subsidiaries shall be included in the consolidated capital of the banking group only if the instruments have pre-specified triggers/ loss absorbency at the PONV. In addition, if the Bank wishes the instrument issued by its subsidiary(ies) to be included in the consolidated group‟s capital, the terms and conditions of that instrument must specify an additional trigger event.

13. APPLICABLE RBI GUIDELINES

The present issue of Bonds shall be made in pursuance of Master Circular No. DBOD.No.BP.BC.2 /21.06.201/2013-14 dated July 01, 2013 issued by the Reserve Bank of India on Basel III capital regulations including criteria for inclusion of debt capital instruments as Tier 2 capital (Annex 5 of the Master Circular) and minimum requirements to ensure loss absorbency of non equity regulatory capital instruments at the Point of Non Viability (“PONV”) (Annex 16 of the Master Circular).

14. PURCHASE/ FUNDING OF BONDS BY THE BANK

Neither the Bank nor any related party over which the Bank exercises control or significant influence (as defined under relevant Accounting Standards) shall purchase the Bonds, nor would the Bank directly or indirectly fund the purchase of the Bonds. The Bank shall also not grant advances against the security of the Bonds issued by it.

Disclosure Document

15. FACE VALUE, ISSUE PRICE, EFFECTIVE YIELD FOR INVESTOR

Each Bond has a face value of Rs.10 lakhs and is issued as well as redeemable at par i.e. for Rs.10 lakhs. Since there is no premium or discount on either issue price or on redemption value of the Bonds, the effective yield for the investors shall be the same as the Coupon Rate on the Bonds.

16. SECURITY

The Bonds are unsecured in nature.

17. TERMS OF PAYMENT

The full face value of the Bonds applied for is to be paid along with the Application Form. Applicant(s) need to send in the Application Form and the cheque(s)/demand draft(s)/ RTGS for the full value of Bonds applied for on the pay-in date.

18. DEEMED DATE OF ALLOTMENT

All benefits under the Bonds including payment of interest will accrue to the Bondholders from and including 24th February 2014, which shall be the Deemed Date of Allotment. All benefits relating to the Bonds will be available to the applicants from the Deemed Date of Allotment. The actual allotment of Bonds may take place on a date other than the Deemed Date of Allotment. The Bank reserves the right to keep multiple allotment date(s)/ date(s) of allotment at its sole and absolute discretion without any notice. In case if the issue closing date/ pay in dates is/are changed (pre-poned/postponed), the Deemed Date of Allotment may also be changed (pre-poned/postponed) by the Bank at its sole and absolute discretion.

19. LETTER(S) OF ALLOTMENT/ BOND CERTIFICATE(S)/ REFUND ORDER(S)/ ISSUE OF LETTER(S) OF ALLOTMENT

The beneficiary account of the applicant(s) with National Securities Depository Limited (NSDL)/ Central Depository Services (India) Limited (CDSL)/ Depository Participant will be given initial credit within two working days from the Deemed Date of Allotment. The initial credit in the account will be akin to the Letter of Allotment. On completion of the all statutory formalities, such credit in the account will be akin to a Bond Certificate.

20. ISSUE OF BOND CERTIFICATE(S)

Subject to the completion of all statutory formalities within time frame prescribed in the relevant regulations/ act/ rules etc, the initial credit akin to a Letter of Allotment in the Beneficiary Account of the applicant would be replaced with the number of Bonds allotted. The Bonds since issued in electronic (dematerialized) form, will be governed as per the provisions of The Depository Act, 1996, Securities and Exchange Board of India (Depositories and Participants) Regulations, 1996, rules notified by NSDL/ CDSL/ Depository Participant from time to time and other applicable laws and rules notified in respect thereof. The Bonds shall be allotted in dematerialized form only.

21. DEPOSITORY ARRANGEMENTS

The Bank has appointed M/s Alankit Assignments Limited as the Registrar (“Registrar”) for the present Bond Issue. The Bank has entered into necessary depository arrangements with National Securities Depository Limited (“NSDL”) and Central Depository Services (India) Limited (“CDSL”) for dematerialization of the Bonds offered under the present Issue, in accordance with the Depositories Act, 1996 and regulations made thereunder. In this context, the Bank has signed two tripartite agreements as under:

Tripartite Agreement between the Bank, NSDL and the Registrar for dematerialization of the Bonds offered under the present Issue.

Tripartite Agreement between the Bank, CDSL and the Registrar for dematerialization of the Bonds offered under the present Issue.

Bondholders can hold the bonds only in dematerialised form and deal with the same as per the provisions of Depositories Act, 1996 as amended from time to time.

Disclosure Document

22. PROCEDURE FOR APPLYING FOR DEMAT FACILITY a. Applicant(s) should have/ open a Beneficiary Account with any Depository Participant of NSDL or CDSL. b. The applicant(s) must specify their beneficiary account number and depository participants ID in the relevant columns of the Application Form. c. If incomplete/ incorrect beneficiary account details are given in the Application Form which does not match with the details in the depository system, the allotment of Bonds shall be held in abeyance till such time satisfactory demat account details are provided by the applicant. d. The Bonds shall be directly credited to the Beneficiary Account as given in the Application Form and after due verification, allotment advice/ refund order, if any, would be sent directly to the applicant by the Registrars to the Issue but the confirmation of the credit of the Bonds to the applicant‟s Depository Account will be provided to the applicant by the Depository Participant of the applicant. e. Interest or other benefits with respect to the Bonds would be paid to those bondholders whose names appear on the list of beneficial owners given by the depositories to the Bank as on the Record Date. In case, the beneficial owner is not identified by the depository on the Record Date due to any reason whatsoever, the Bank shall keep in abeyance the payment of interest or other benefits, till such time the beneficial owner is identified by the depository and intimated to the Bank. On receiving such intimation, the Bank shall pay the interest or other benefits to the beneficiaries identified, within a period of 15 days from the date of receiving such intimation. f. Applicants may please note that the Bonds shall be allotted and traded on the stock exchange(s) only in dematerialized form.

23. FICTITIOUS APPLICATIONS

In terms of Section 68 of the Companies Act, 1956, any person who makes, in fictitious name, any application to a body corporate for acquiring, or subscribing to, the bonds, or otherwise induced a body corporate to allot, register any transfer of bonds therein to them or any other person in a fictitious name, shall be punishable with imprisonment for a term which may extend to 5 years.

24. MARKET LOT

The market lot will be one Bond (“Market Lot”). Since the Bonds are being issued only in dematerialised form, the odd lots will not arise either at the time of issuance or at the time of transfer of Bonds.

25. TRADING OF BONDS

The marketable lot for the purpose of trading of Bonds shall be 1 (one) Bond of face value of Rs.10 lakhs each. Trading of Bonds would be permitted in demat mode only in standard denomination of Rs.10 lakhs and such trades shall be cleared and settled in recognised stock exchange(s) subject to conditions specified by SEBI. In case of trading in Bonds which has been made over the counter, the trades shall be reported on a recognized stock exchange having a nation-wide trading terminal or such other platform as may be specified by SEBI.

26. MODE OF TRANSFER OF BONDS

The Bonds shall be transferred subject to and in accordance with the rules/ procedures as prescribed by the NSDL/ CDSL/ Depository Participant of the transferor/ transferee and any other applicable laws and rules notified in respect thereof. The normal procedure followed for transfer of securities held in dematerialized form shall be followed for transfer of these Bonds held in electronic form. The seller should give delivery instructions containing details of the buyer‟s DP account to his depository participant. The transferee(s) should ensure that the transfer formalities are completed prior to the Record Date. In the absence of the same, interest will be paid/ redemption will be made to the person, whose name appears in the records of the Depository. In such cases, claims, if any, by the transferee(s) would need to be settled with the transferor(s) and not with the Bank.

Transfer of Bonds to and from NRIs/ OCBs, in case they seek to hold the Bonds and are eligible to do so, will be governed by the then prevailing guidelines of RBI.

Disclosure Document

27. COMMON FORM OF TRANSFER

The Bank undertakes that it shall use a common form/ procedure for transfer of Bonds issued under terms of this Disclosure Document.

28. INTEREST ON APPLICATION MONEY

Interest at the Coupon Rate (subject to deduction of income tax under the provisions of the Income Tax Act, 1961, or any other statutory modification or re-enactment thereof, as applicable) will be paid to the applicants on the application money for the Bonds.

Such interest shall be paid for the period starting from and including the date of realization of application money in issuer‟s Bank Account upto one day prior to the Deemed Date of Allotment. The interest on application money will be computed as per Actual/ Actual day count convention. Such interest would be paid on all valid applications, including the refunds. Where the entire subscription amount has been refunded, the interest on application money will be paid along with the Refund Orders. Where an applicant is allotted lesser number of Bonds than applied for, the excess amount paid on application will be refunded to the applicant along with the interest on refunded money.

The interest cheque(s)/ demand draft(s) for interest on application money (along with Refund Orders, in case of refund of application money, if any) shall be dispatched by the Bank within 15 days from the Deemed Date of Allotment and the relative interest warrant(s) alongwith the Refund Order(s), as the case may be, will be dispatched by registered post to the sole/ first applicant, at the sole risk of the applicant.

29. INTEREST ON THE BONDS

The Bonds shall carry a fixed rate of interest at the Coupon Rate from, and including, the Deemed Date of Allotment up to, but excluding the Redemption Date, payable on the “Coupon Payment Dates”, on the outstanding principal amount of Bonds till Redemption Date, to the holders of Bonds (the “Holders” and each, a “Holder”) as of the relevant Record Date. Interest on Bonds will cease from the Redemption Date in all events.

In pursuance of the Master Circular No. DBOD.No.BP.BC.2 /21.06.201/2013-14 dated July 01, 2013 issued by the Reserve Bank of India on Basel III capital regulations covering terms and conditions for issue of debt capital instruments for inclusion as Tier 2 capital, the Bonds shall not have step-ups or any other incentives to redeem. Further, the Bonds shall not have a credit sensitive coupon feature, i.e. a coupon that is reset periodically based in whole or in part on Bank‟s credit standing.

If any Coupon Payment Date falls on a day that is not a Business Day, the payment shall be made by the Bank on the immediately succeeding Business Day along with interest for such additional period. Further, interest for such additional period so paid, shall be deducted out of the interest payable on the next Coupon Payment Date.

30. COMPUTATION OF INTEREST

Interest for each of the interest periods shall be computed as per Actual/ Actual day count convention on the face value amount of Bonds outstanding at the Coupon Rate rounded off to the nearest Rupee as per the Fixed Income Money Market and Derivatives Association handbook on market practices. Where the interest period (start date to end date) includes February 29, interest shall be computed on 366 days-a-year basis, on the face value amount of Bonds outstanding.

31. RECORD DATE

The Record Date i.e. the reference date for payment of interest/ repayment of principal shall be the date falling 15 days prior to the relevant Coupon/ Interest Payment Date on which interest or the Redemption/ Maturity Date on which the Maturity Amount is due and payable. In the event the Record Date falls on a day which is not a business day, the next business day will be considered as the Record Date. In case of redemption of Bonds, the trading in the Bonds shall remain suspended between the Record Date and the Redemption Date. Interest payment and principal repayment shall be made to the person whose name appears as beneficiary with the Depositories as on Record Date. In the event of the Bank not receiving any notice of transfer at least 15 days before the respective Coupon Payment Date and at least 15 days prior to the Redemption Date, the transferees for the Bonds shall not have any claim against the Bank in respect of interest so paid to the registered Bondholders.

Disclosure Document

32. DEDUCTION OF TAX AT SOURCE

Tax as applicable under the Income Tax Act, 1961, or any other statutory modification or re-enactment thereof will be deducted at source out of interest payable on Bonds.

Interest payable subsequent to the Deemed Date of Allotment of Bonds shall be treated as “Interest on Securities” as per Income Tax Rules. Bondholders desirous of claiming exemption from deduction of income tax at source on the interest payable on Bonds should submit tax exemption certificate/ document, under Section 193 of the Income Tax Act, 1961, if any, with the Registrars, or to such other person(s) at such other address(es) as the Bank may specify from time to time through suitable communication, at least 45 days before the payment becoming due. However, with effective from 01.06.2008, tax is not to be deducted at source under the provisions of section 193 of Income Tax Act, 1961, if the following conditions are satisfied: a. interest is payable on any security issued by a company b. such security is in dematerlized form c. such security is listed in a recognised stock exchange in India

Present issue of Bonds fulfils the above conditions and therefore, no tax would be deducted on the interest payable. However, the Bank shall pursue the provisions as amended from time to time with respect to applicability of TDS at the time of payment of interest on Bonds. Regarding deduction of tax at source and the requisite declaration forms to be submitted, applicants are advised to consult their own tax consultant(s).

33. PUT & CALL OPTION

However, the Bonds may have Call Option exercisable at the initiative of the Bank only after a minimum of five years, subject to compliance with the terms specified in the RBI Norms. The Bank has decided not to retain any Call Option in the current issue of Bonds.

Therefore neither the bondholder(s) shall have any right to exercise Put Option nor the Bank shall have right to exercise Call Option to redeem the Bonds, in whole or in part, prior to the Redemption Date.

34. ADDITIONAL COVENANTS a. Default in payment: In case of default in payment of interest and/ or principal redemption on the due dates (except in case of regulatory requirements as described herein), the Bank shall pay additional interest at the rate of 2.00% p.a. over the Coupon Rate for the defaulting period i.e. the period commencing from and including the date on which such amount becomes due and upto but excluding the date on which such amount is actually paid. b. Delay in Listing: In case of delay in listing of the Bonds beyond 20 days from the Deemed Date of Allotment, the Bank shall pay penal interest at the rate of 1.00% p.a. over the Coupon Rate from the expiry of 30 days from the Deemed Date of Allotment till the listing of Bonds to the Bondholders. Such penal interest shall be paid by the Bank to the Bondholders on the first Coupon Payment Date

35. REDEMPTION

The face value of the Bonds shall be redeemed at par, on the Redemption Date i.e. 24th February 2024. The Bonds will not carry any obligation, for interest or otherwise, after the Redemption Date. The Bonds shall be taken as discharged on payment of the redemption amount by the Bank on the Redemption Date to the registered Bondholders whose name appear in the Register of Bondholders on the Record Date. Such payment will be a legal discharge of the liability of the Bank towards the Bondholders.

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36. SETTLEMENT/ PAYMENT ON REDEMPTION

Payment of interest and repayment of principal shall be made by way of cheque(s)/ interest/ redemption warrant(s)/ demand draft(s)/ credit through direct credit/ NECS/ RTGS/ NEFT mechanism in the name of the Bondholders whose name appear on the List of Beneficial Owners given by Depository to the Bank as on the Record Date.

The Bonds shall be taken as discharged on payment of the redemption amount by the Bank on the Redemption Date to the list of Beneficial Owners as provided by NSDL/ CDSL/ Depository Participant as on Record Date. Such payment will be a legal discharge of the liability of the Bank towards the Bondholders. On such payment being made, the Bank shall inform NSDL/ CDSL/ Depository Participant and accordingly the account of the Bondholders with NSDL/ CDSL/ Depository Participant shall be adjusted.

The Bank‟s liability to the Bondholders towards all their rights including for payment or otherwise shall cease and stand extinguished from the due date of redemption in all events. Further the Bank will not be liable to pay any interest or compensation from the Redemption Date. On the Bank‟s dispatching/ crediting the amount to the beneficiary(ies) as specified above in respect of the Bonds, the liability of the Bank shall stand extinguished.

37. EFFECT OF HOLIDAYS

If any Record Date falls on a day which is not a Business Day, the next Business Day will be considered as the Record Date.

38. LIST OF BENEFICIAL OWNERS

The Bank shall request the Depository to provide a list of Beneficial Owners as at the end of the Record Date. This shall be the list, which shall be considered for payment of interest or repayment of principal amount, as the case may be.

39. SUCCESSION

In the event of the demise of the sole/first holder of the Bond(s) or the last survivor, in case of joint holders for the time being, the Bank shall recognize the executor or administrator of the deceased Bondholder, or the holder of succession certificate or other legal representative as having title to the Bond(s).the Bank shall not be bound to recognize such executor or administrator, unless such executor or administrator obtains probate, wherever it is necessary, or letter of administration or such holder is the holder of succession certificate or other legal representation, as the case may be, from a Court in India having jurisdiction over the matter. The Bank may, in its absolute discretion, where it thinks fit, dispense with production of probate or letter of administration or succession certificate or other legal representation, in order to recognize such holder as being entitled to the Bond(s) standing in the name of the deceased Bondholder on production of sufficient documentary proof or indemnity.

Where a non-resident Indian becomes entitled to the Bond by way of succession, the following steps have to be complied: a. Documentary evidence to be submitted to the Legacy Cell of the RBI to the effect that the Bond was acquired by the NRI as part of the legacy left by the deceased holder. b. Proof that the NRI is an Indian National or is of Indian origin.

Such holding by the NRI will be on a non-repatriation basis.

Disclosure Document

40. WHO CAN APPLY

The following categories of applicants are eligible to apply for this Issue of Bonds. However, the prospective subscribers must make their own independent evaluation and judgement regarding their eligibility to invest in the Issue. a. Mutual Funds; b. Public Financial Institutions as defined under section 4A of the Companies Act, 1956; c. Scheduled Commercial Banks; d. Insurance Companies; e. Provident Funds, Gratuity Funds, Superannuation Funds and Pension Funds; f. Co-operative Banks; g. Regional Rural Banks authorized to invest in bonds/ debentures; h. Companies and Bodies Corporate authorized to invest in bonds/ debentures; i. Trusts authorized to invest in bonds/ debentures; and j. Statutory Corporations/ Undertakings established by Central/ State legislature authorized to invest in bonds/ debentures, etc.

All applicants are required to comply with the relevant regulations/ guidelines applicable to them for investing in the issue of Bonds as per the norms approved by Government of India, Reserve Bank of India or any other statutory body from time to time.

However, out of the aforesaid class of applicants eligible to invest, this Disclosure Document is intended solely for the use of the person to whom it has been sent by the Bank for the purpose of evaluating a possible investment opportunity by the recipient(s) in respect of the securities offered herein, and it is not to be reproduced or distributed to any other persons (other than professional advisors of the prospective applicant receiving this Disclosure Document from the Bank).

41. WHO ARE NOT ELIGIBLE TO APPLY FOR BONDS

This Issue is not being offered to the following categories of applicants and any application from such applicants will be deemed an invalid application and rejected: a. Resident Individual Investors; b. Qualified Foreign Investors; c. Foreign Nationals; d. Persons resident outside India; e. Venture Capital Funds; f. Alternative Investment Funds; g. Overseas Corporate Bodies; h. Partnership firms formed under applicable laws in India in the name of the partners; i. Hindu Undivided Families through Karta; and j. Person ineligible to contract under applicable statutory/ regulatory requirements.

42. DOCUMENTS TO BE PROVIDED BY APPLICANTS

Applicants need to submit the certified true copies of the following documents, along-with the Application Form, as applicable: a. Memorandum and Articles of Association/ Constitution/ Bye-laws/ Trust Deed; b. Board Resolution authorizing the investment and containing operating instructions; c. Power of Attorney/ relevant resolution/ authority to make application; d. Specimen signatures of the authorized signatories (ink signed), duly certified by an appropriate authority; e. Government Notification (in case of Primary Co-operative Bank and RRBs); f. Copy of Permanent Account Number Card (“PAN Card”) issued by the Income Tax Department; g. Copy of a cancelled cheque for ECS payments; h. Necessary forms for claiming exemption from deduction of tax at source on interest on application money, wherever applicable.

Disclosure Document

43. HOW TO APPLY

This being a private placement Issue, only the eligible investors who have been addressed through this communication directly, are eligible to apply. Applications for the Bonds must be in the prescribed form and completed in BLOCK LETTERS in English and as per the instructions contained therein.

Applications complete in all respects must be submitted before the last date indicated in the issue time table or such extended time as decided by the Bank, at any of the designated collection centres, accompanied with the application money. The original Applications Forms (along with all necessary documents as detailed in this Disclosure Document), pay-in slip and other necessary documents should be sent to the Head Office of the Bank on the same day.

The remittance of application money should be made by electronic transfer of funds through RTGS mechanism for credits as per details given hereunder:

Name of the Banker Punjab National Bank Account Name PNB Tier II Bonds Basel III Compliant Credit into Current A/c No. 4776002900007396 IFSC Code PUNB0477600 Address of the Branch Capital Market Service Branch C-9 G Block, Bandra Kurla Complex, Mumbai – 400 051 Narration Application Money for Bond Issue

Cheque(s), demand draft(s), money orders, postal orders will not be accepted. The Bank assumes no responsibility for any applications lost in mail. The entire amount of Rs.10 lakhs per Bond is payable on application.

Applications should be for the number of Bonds applied by the Applicant. Applications not completed in the said manner are liable to be rejected. The name of the applicant‟s bank, type of account and account number must be filled in the Application Form. This is required for the applicant‟s own safety and these details will be printed on the refund orders and interest/ redemption warrants.

The applicant or in the case of an application in joint names, each of the applicant, should mention his/her Permanent Account Number (PAN) allotted under the Income-Tax Act, 1971 or where the same has not been allotted, the GIR No. and the Income tax Circle/Ward/District. As per the provision of Section 139A (5A) of the Income Tax Act, PAN/GIR No. needs to be mentioned on the TDS certificates. Hence, the applicant should mention his PAN/GIR No. In case neither the PAN nor the GIR Number has been allotted, the applicant shall mention „Applied for‟ and in case the applicant is not assessed to income tax, the applicant shall mention „Not Applicable‟ (stating reasons for non-applicability) in the appropriate box provided for the purpose. Application Forms without this information will be considered incomplete and are liable to be rejected.

All applicants are requested to tick the relevant column “Category of Investor” in the Application Form. Public/ Private/Religious/ Charitable Trusts, Provident Funds and Other Superannuation Trusts and other investors requiring “approved security” status for making investments.

For further instructions about how to make an application for applying for the Bonds and procedure for remittance of application money, please refer to the Summary Term Sheet and the Application Form.

44. FORCE MAJEURE

The Bank reserves the right to withdraw the issue prior to the Issue Closing Date in the event of any unforeseen development adversely affecting the economic and regulatory environment.

45. APPLICATIONS UNDER POWER OF ATTORNEY

A certified true copy of the power of attorney or the relevant authority as the case may be along with the names and specimen signature(s) of all the authorized signatories and the tax exemption certificate/ document, if any, must be lodged along with the submission of the completed Application Form. Further modifications/ additions in the power of attorney or authority should be notified to the Bank or to the Registrars or to such other person(s) at such other address(es) as may be specified by the Bank from time to time through a suitable communication.

Disclosure Document

46. APPLICATION BY MUTUAL FUNDS

In case of applications by Mutual Funds, a separate application must be made in respect of each scheme of an Indian Mutual Fund registered with SEBI and such applications will not be treated as multiple applications, provided that the application made by the Asset Management Company/ Trustees/ Custodian clearly indicate their intention as to the scheme for which the application has been made.

47. ACKNOWLEDGEMENTS

No separate receipts will be issued for the application money. However, the Bankers to the Issue receiving the duly completed Application Form will acknowledge receipt of the application by stamping and returning to the applicant the acknowledgement slip at the bottom of each Application Form.

48. BASIS OF ALLOCATION

Beginning from the issue opening date and until the day immediately prior to the issue closing date, full and firm allotment against all valid applications for the Bonds will be made to applicants on a first-come-first-served basis, subject to the limit of the Issue size, in accordance with applicable laws. If and to the extent, the Issue is fully subscribed prior to the issue closing date, no allotments shall be accepted once the Issue is fully subscribed.

Allotment will be done on “day-priority basis”. In case of oversubscription over and above the issue size, the allotment of such valid applications received on the closing day shall be on pro rata basis to the applicants in the ratio in which they have applied regardless of category of investors. If the proportionate allotment of Bonds to such applicants is not a minimum of one Bond or in multiples of one Bond (which is the market lot), the decimal would be rounded off to the next higher whole number if that decimal is 0.5 or higher and to the next lower whole number if that decimal is lower than 0.5. All successful applicants on the issue closing date would be allotted the number of Bonds arrived at after such rounding off.

49. RIGHT TO ACCEPT OR REJECT APPLICATIONS

The Bank reserves its full, unqualified and absolute right to accept or reject any application, in part or in full, without assigning any reason thereof. The rejected applicants will be intimated along with the refund warrant, if applicable, to be sent. Interest on application money will be paid from the date of realization of the cheque(s)/ demand drafts(s) till one day prior to the date of refund. The application forms that are not complete in all respects are liable to be rejected and would not be paid any interest on the application money. Application would be liable to be rejected on one or more technical grounds, including but not restricted to: a. Number of bonds applied for is less than the minimum application size; b. Applications exceeding the issue size; c. Bank account details not given; d. Details for issue of Bonds in electronic/ dematerialized form not given; e. PAN/GIR and IT Circle/Ward/District not given; f. In case of applications under Power of Attorney by limited companies, corporate bodies, trusts, etc. relevant documents not submitted;

In the event, if any Bond(s) applied for is/ are not allotted in full, the excess application monies of such Bonds will be refunded, as may be permitted.

50. PAN/GIR NUMBER

All applicants should mention their Permanent Account Number or the GIR Number allotted under Income Tax Act, 1971 and the Income Tax Circle/ Ward/ District. In case where neither the PAN nor the GIR Number has been allotted, the fact of such a non-allotment should be mentioned in the Application Form in the space provided.

51. SIGNATURES

Signatures should be made in English or in any of the Indian Languages. Thumb impressions must be attested by an authorized official of a Bank or by a Magistrate/ Notary Public under his/her official seal.

Disclosure Document

52. NOMINATION FACILITY

As per Section 109 A of the Companies Act, 1956, only individuals applying as sole applicant/Joint Applicant can nominate, in the prescribed manner, a person to whom his Bonds shall vest in the event of his death. Non- individuals including holders of Power of Attorney cannot nominate.

53. RIGHT OF BONDHOLDER(S)

Bondholder is not a shareholder. The Bondholders will not be entitled to any other rights and privilege of shareholders other than those available to them under statutory requirements. The Bond(s) shall not confer upon the holders the right to receive notice, or to attend and vote at the General Meeting of the Bank. The principal amount and interest on the Bonds will be paid to the registered Bondholders only, and in case of Joint holders, to the one whose name stands first.

Besides the above, the Bonds shall be subject to the provisions of the Banking Regulation Act, 1949, as amended, the terms of this Bond Issue and the other terms and conditions as may be incorporated in the Debenture Trusteeship Agreement and other documents that may be executed in respect of these Bonds.

54. MODIFICATION OF RIGHTS

The rights, privileges, terms and conditions attached to the Bonds may be varied, modified or abrogated with the consent, in writing, of those holders of the Bonds who hold at least three fourth of the outstanding amount of the Bonds or with the sanction accorded pursuant to a resolution passed at a meeting of the Bondholders, provided that nothing in such consent or resolution shall be operative against the Bank where such consent or resolution modifies or varies the terms and conditions of the Bonds, if the same are not acceptable to the Bank.

55. FUTURE BORROWINGS

The Bank shall be entitled to borrow/ raise loans or avail of financial assistance in whatever form as also issue Bonds/ Debentures/ Notes/ other securities in any manner with ranking as pari-passu basis or otherwise and to change its capital structure, including issue of shares of any class or redemption or reduction of any class of paid up capital, on such terms and conditions as the Bank may think appropriate, without the consent of, or intimation to, the Bondholder(s) or the Trustees in this connection.

56. BOND/ DEBENTURE REDEMPTION RESERVE (“DRR”)

The Ministry of Corporate Affairs, Government of India has vide circular no. 11/02/2012-CL-V(A) dated February 11, 2013, clarified that no Debenture Redemption Reserve is required for debentures issued by Banking Companies for both public as well as well as privately placed debentures. The Bank has appointed a trustee to protect the interest of the Bondholders.

57. NOTICES

All notices required to be given by the Bank or by the Trustees to the Bondholders shall be deemed to have been given if sent by ordinary post/ courier to the original sole/ first allottees of the Bonds and/ or if published in one All India English daily newspaper and one regional language newspaper.

All notices required to be given by the Bondholder(s), including notices referred to under “Payment of Interest” and “Payment on Redemption” shall be sent by registered post or by hand delivery to the Bank or to such persons at such address as may be notified by the Bank from time to time.

58. JOINT-HOLDERS

Where two or more persons are holders of any Bond(s), they shall be deemed to hold the same as joint tenants with benefits of survivorship subject to provisions contained in the Companies Act, 1956.

59. DISPUTES & GOVERNING LAW

The Bonds are governed by and shall be construed in accordance with the existing laws of India. Any dispute arising thereof shall be subject to the jurisdiction of district courts of Mumbai, Maharashtra.

Disclosure Document

60. INVESTOR RELATIONS AND GRIEVANCE REDRESSAL

Arrangements have been made to redress investor grievances expeditiously as far as possible, the Bank endeavours to resolve the investor‟s grievances within 30 days of its receipt. All grievances related to the issue quoting the Application Number (including prefix), number of Bonds applied for, amount paid on application and details of collection centre where the Application was submitted, may be addressed to the Compliance Officer at Corporate office of the Bank. All investors are hereby informed that the Bank has appointed a Compliance Officer who may be contracted in case of any pre-issue/ post-issue related problems such as non- credit of letter(s) of allotment/ bond certificate(s) in the demat account, non-receipt of refund order(s), interest warrant(s)/ cheque(s) etc. Contact details of the Compliance Officer are given elsewhere in this Disclosure Document.

Disclosure Document

XIII. CREDIT RATING FOR THE BONDS

CRISIL Limited (“CRISIL”) has vide its letter no. VR/FSR/PNB/2013-14/2001 dated February 20, 2014, has reaffirmed a credit rating of “CRISIL AAA/Stable” for the present issue of Bonds aggregating Rs. 1,000 crore. Instruments with this rating are considered to have the highest degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk. A copy of rating letter from CRISIL Limited is enclosed elsewhere in this Disclosure Document.

ICRA Limited (“ICRA”) has vide its letter no. D/RAT/2013-14/P5/10 dated February 20, 2014, has assigned a credit rating of “[ICRA]AAA(hyb)” for the present issue of Bonds aggregating Rs. 1,000 crore. Instruments with this rating are considered to have the highest degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk. A copy of rating letter from ICRA Limited is enclosed elsewhere in this Disclosure Document.

Other than the credit rating mentioned hereinabove, the Bank has not sought any other credit rating from any other credit rating agency(ies) for the Bonds offered for subscription under the terms of this Disclosure Document.

The above rating is not a recommendation to buy, sell or hold securities and applicants should take their own decision. The rating may be subject to revision or withdrawal at any time by the assigning rating agency. The rating obtained is subject to revision at any point of time in the future. The rating agency has the right to suspend, withdraw the rating at any time on the basis of new information etc.

Disclosure Document

XIV. NAME OF DEBENTURE TRUSTEE

In accordance with the provisions of (i) Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 issued vide circular no. LAD-NRO/GN/2008/13/127878 dated June 06, 2008, as amended, (ii) Securities and Exchange Board of India (Issue and Listing of Debt Securities) (Amendment) Regulations, 2012 issued vide circular no. LAD-NRO/GN/2012-13/19/5392 dated October 12, 2012, as amended, (iii) Section 117B of the Companies Act, 1956 (1 of 1956) and (iv) Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993, the Bank has appointed IDBI Trusteeship Services Limited, to act as Trustees (“Trustees”) for and on behalf of the holder(s) of the Bonds. The address and contact details of the Trustees are as under:

IDBI Trusteeship Services Limited Registered Office: Asian Building, Ground Floor 17, R Kamani Marg, Mumbai – 400 001 Tel No: (022) 40807000 Fax No: (022) 66311776 E-mail: [email protected]

A copy of letter from IDBI Trusteeship Services Limited (Ref. No. 4032/ITSL/OPR/CL/13-14/BT/836) dated February 17th 2014 conveying their consent to act as Trustees for the current issue of Bonds is enclosed elsewhere in this Disclosure Document.

The Bank hereby undertakes that a Debenture Trusteeship Agreement shall be executed by it in favour of the Trustees within three permissible under applicable laws. The Debenture Trusteeship Agreement shall contain such clauses as may be prescribed under section 117A of the Companies Act, 1956 and those mentioned in Schedule IV of the Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993. Further, the Debenture Trusteeship Agreement shall not contain a clause which has the effect of (i) limiting or extinguishing the obligations and liabilities of the Trustees or the Bank in relation to any rights or interests of the holder(s) of the Bonds, (ii) limiting or restricting or waiving the provisions of the Securities and Exchange Board of India Act, 1992 (15 of 1992); Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008; Securities and Exchange Board of India (Issue and Listing of Debt Securities) (Amendment) Regulations, 2012 and circulars, regulations or guidelines issued by SEBI and (iii) indemnifying the Trustees or the Bank for loss or damage caused by their act of negligence or commission or omission.

The Bondholder(s) shall, without further act or deed, be deemed to have irrevocably given their consent to the Trustees or any of their agents or authorized officials to do all such acts, deeds, matters and things in respect of or relating to the Bonds as the Trustees may in their absolute discretion deem necessary or require to be done in the interest of the holder(s) of the Bonds. Any payment made by the Bank to the Trustees on behalf of the Bondholder(s) shall discharge the Bank pro tanto to the Bondholder(s). The Trustees shall protect the interest of the Bondholders in the event of default by the Bank in regard to timely payment of interest and repayment of principal and shall take necessary action at the cost of the Bank. No Bondholder shall be entitled to proceed directly against the Bank unless the Trustees, having become so bound to proceed, fail to do so.

The Trustees shall perform its duties and obligations and exercise its rights and discretions, in keeping with the trust reposed in the Trustee by the holder(s) of the Bonds and shall further conduct itself, and comply with the provisions of all applicable laws, provided that, the provisions of Section 20 of the Indian Trusts Act, 1882, shall not be applicable to the Trustees. The Trustees shall carry out its duties and perform its functions as required to discharge its obligations under the terms of SEBI Debt Regulations, the Securities and Exchange Board of India (Debenture Trustees) Regulations 1993, the Debenture Trusteeship Agreement, Disclosure Document and all other related transaction documents, with due care, diligence and loyalty.

The Trustees shall be vested with the requisite powers for protecting the interest of holder(s) of the Bonds including but not limited to the right to appoint a nominee director on the Board of the Bank in consultation with institutional holder(s) of such Bonds. The Trustees shall ensure disclosures of all material events on an ongoing basis.

The Bank shall, till the redemption of Bonds, submit its latest audited/ limited review half yearly consolidated (wherever available) and standalone financial information such as Statement of Profit & Loss, Balance Sheet and Cash Flow Statement and auditor qualifications, if any, to the Trustees within the timelines as mentioned in Simplified Listing Agreement issued by SEBI vide circular No. SEBI/IMD/BOND/1/2009/ 11/05 dated May 11, 2009 as amended. Besides, the Bank shall within 180 days from the end of the financial year, submit a copy of the latest annual report to the Trustees and the Trustees shall be obliged to share the details so submitted with all „Qualified Institutional Buyers‟ (QIBs) and other existing Bondholder(s) within two working days of their specific request.

Disclosure Document

XV. STOCK EXCHANGES WHERE SECURITIES ARE PROPOSED TO BE LISTED

The Bonds are proposed to be listed on the Wholesale Debt Market (WDM) segment of National Stock Exchange of India Limited (“NSE”) and/or Bombay Stock Exchange (“BSE”). The Bank has made an application to NSE for seeking its in-principle approval for listing of Bonds offered under the terms of this Disclosure Document.

In pursuance of SEBI Debt Regulations, the Bank shall make listing application to NSE within 15 days from the Deemed Date of Allotment of Bonds and seek listing permission within 20 days from the Deemed Date of Allotment of Bonds. In the event of delay in listing of Bonds beyond 20 days from the Deemed Date of Allotment, the Bank shall pay penal interest of 1.00% p.a. over the Coupon Rate from the expiry of 30 days from the Deemed Date of Allotment till the listing of Bonds to the Bondholder(s).

In connection with listing of Bonds with NSE/BSE, the Bank hereby undertakes that: a. it shall comply with the conditions of listing as specified in the Listing Agreement for the Bonds; b. the credit rating obtained for the Bonds shall be periodically reviewed by the credit rating agency) and any revision in the rating shall be promptly disclosed by the Bank to NSE/BSE; c. any change in credit rating shall be promptly disseminated to the Bondholder(s) in such manner as NSE may determine from time to time; d. The Bank, the Trustees and NSE shall disseminate all information and reports on the Bonds including compliance reports filed by the Banks and the Trustees regarding the Bonds to the Bondholder(s) and the general public by placing them on their websites; e. Trustees shall disclose the information to the Bondholder(s) and the general public by issuing a press release and placing on the websites of the Trustees, the Bank and NSE/BSE, in any of the following events: i) default by Bank to pay interest on the Bonds or redemption amount; ii) revision of the credit rating assigned to the Bonds. f. The Bank shall, till the redemption of Bonds, submit its latest audited/ limited review half yearly consolidated (wherever available) and standalone financial information such as Statement of Profit & Loss, Balance Sheet and Cash Flow Statement and auditor qualifications, if any, to the Trustees within the timelines as mentioned in Simplified Listing Agreement issued by SEBI vide circular No. SEBI/IMD/BOND/1/2009/11/05 dated May 11, 2009 as amended. Besides, the Bank shall within 180 days from the end of the financial year, submit a copy of the latest annual report to the Trustees and the Trustees shall be obliged to share the details so submitted with all Qualified Institutional Buyers (“QIBs”) and other existing Bondholder(s) within two working days of their specific request.

XVI. MATERIAL CONTRACTS & AGREEMENTS INVOLVING FINANCIAL OBLIGATIONS OF THE ISSUER

By very nature of its business, the Bank is involved in a large number of transactions involving financial obligations and therefore it may not be possible to furnish details of all material contracts and agreements involving financial obligations of the Bank. However, the contracts referred to in Para A below (not being contracts entered into in the ordinary course of the business carried on by the Bank) which are or may be deemed to be material have been entered into by the Bank. Copies of these contracts together with the copies of documents referred to in Para B may be inspected at the Head Office of the Bank between 10.00 a.m. and 2.00 p.m. on any working day until the issue closing date.

A. MATERIAL CONTRACTS a. Letter appointing Registrars and Agreement entered into between the Bank and the Registrars. b. Letter appointing Trustees to the Bondholders.

B. DOCUMENTS a. The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, as amended from time to time. b. Board resolution authorizing issue of Bonds offered under terms of this Disclosure Document. c. Letter of consent from the Trustees for acting as trustees for and on behalf of the bond holder(s) d. Letter of consent from the Registrars for acting as Registrars to the Issue. e. Application made to the NSE for grant of in-principle approval for listing of Bonds. f. Letter from CRISIL Limited conveying the credit rating for the Bonds. g. Letter from ICRA Limited conveying the credit rating for the Bonds. h. Tripartite Agreement between the Bank, NSDL and Registrars for issue of Bonds in dematerialised form. i. Tripartite Agreement between the Bank, CDSL and Registrars for issue of Bonds in dematerialised form. 52

Disclosure Document

XVII. ILLUSTRATION OF BOND CASH FLOWS

Illustration of Bond Cash Flows Company Punjab National Bank Face Value (per security) 10,00,000.00 Deemed Date of Allotment 24th February 2014 Redemption Date 24th February 2024 Coupon Rate 9.65% Frequency of the Interest First Interest on 24th February 2014 and subsequently on 24th February Payment with specified every year till maturity dates Day Count Convention Actual / Actual

Cash Flows Date No. of Days in Amount Coupon Period (in Rupees) 1st Coupon Tuesday, 24th February 2015 365 96,500.00 2nd Coupon Wednesday, 24th February 2016 365 96,500.00 3rd Coupon Friday, 24th February 2017 366 96,500.00 4th Coupon Saturday, 24th February 2018 365 96,500.00 5th Coupon Monday, 25th February 2019 366 96,764.00 6th Coupon Monday, 24th February 2020 364 96,236.00 7th Coupon Wednesday, 24th February 2021 366 96,500.00 8th Coupon Thursday, 24th February 2022 365 96,500.00 9th Coupon Friday, 24th February 2023 365 96,500.00 10th Coupon Saturday, 24th February 2024 365 96,500.00 Principal Saturday, 24th February 2024 365 10,00,000.00 Total

Assumptions and Notes:

1. For the purposes of the above illustration, it has been assumed that none of the Coupon Payment Dates and Redemption Date detailed in the illustration fall on non-Business Day and accordingly, only such dates that fall on Sundays, have been considered as non-Business Days;

2. As the Coupon Period for the 3rd Coupon Payment Date includes February 29, 2016, interest has been computed on 366 days-a-year basis as provided in the “Day Count Convention”. The same shall apply to other such periods also during the currency of the Bonds.

4. If any Coupon/ Interest Payment Date falls on a day that is not a Business Day, the payment shall be made by the Issuer on the immediately succeeding Business Day along with interest for such additional period. Further, interest for such additional period so paid, shall be deducted out of the interest payable on the next Coupon/ Interest Payment Date.

5. If the Redemption Date (also being the last Coupon Payment Date) of the Bonds falls on a day that is not a Business Day, the respective redemption proceeds shall be paid by the Bank on the immediately preceding Business Day along with interest accrued on the Bonds until but excluding the date of such payment.

THE AGGREGATE COUPON PAYABLE TO EACH BONDHOLDER SHALL BE ROUNDED OFF TO THE NEAREST RUPEE AS PER THE FIXED INCOME MONEY MARKET AND DERIVATIVES ASSOCIATION HANDBOOK ON MARKET PRACTICES.

Disclosure Document

XVIII. DECLARATION

The Bank undertakes that this Disclosure Document contains full disclosures in accordance with Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 issued vide circular no. LADNRO/GN/2008/13/127878 dated June 06, 2008, as amended and Securities and Exchange Board of India (Issue and Listing of Debt Securities) (Amendment) Regulations, 2012 issued vide circular no. LAD- NRO/GN/2012-13/19/5392 dated October 12, 2012, as amended.

The Bank also confirms that this Disclosure Document does not omit disclosure of any material fact which may make the statements made therein, in light of the circumstances under which they are made, misleading. The Disclosure Document also does not contain any false or misleading statement.

The Bank accepts no responsibility for the statement made otherwise than in the Disclosure Document or in any other material issued by or at the instance of the Bank and that anyone placing reliance on any other source of information would be doing so at his own risk.

Signed pursuant to internal authority being granted.

For Punjab National Bank

Date: February 20, 2014 Place: Mumbai

COPY OF RATING LETTER FROM CRISIL Disclosure Document

Disclosure Document COPY OF RATING LETTER FROM ICRA

Disclosure Document

For Office Use Only

Date of Receipt of Application / / PUNJAB NATIONAL BANK Head Office: 7, Bhikaiji Cama Place, New Delhi, 110 066 Date of Clearance of Cheque Tel No: (011) 26102303; Fax No: (011) 26108741 / /

APPLICATION FORM FOR UNSECURED REDEEMABLE NON-CONVERTIBLE SUBORDINATED UPPER TIER-II BONDS (SERIES-XIII)

To, Punjab National Bank

Dear Sir,

Having read, understood and agreed to the contents and terms and conditions of Punjab National Bank’s Disclosure Document, i/we hereby apply for allotment to me/us, of the under mentioned Bonds (hereinafter referred to as “Bonds”), out of the Private Placement Issue. I/We irrevocably give my/ our authority and consent to IDBI Trusteeship Services Ltd., to act as my/our Trustees and for doing such acts and signing such documents as are necessary to carry out their duties in such capacity. The amount payable on application as shown below is remitted herewith. I/We note that the Bank is entitled in its absolute discretion to accept or reject this application in whole or in part without assigning any reason whatsoever.

APPLICANT’S DETAILS (PLEASE READ CAREFULLY THE INSTRUCTIONS ON THE NEXT PAGE BEFORE FILLING UP THIS FORM)

SOLE/FIRST APPLICANT‟S NAME IN FULL SIGNATORY/AUTHORISED SIGNATORY

SECOND APPLICANT‟S NAME

THIRD APPLICANT‟S NAME

ADDRESS (Do not repeat name) (Post Box No. alone is not sufficient)

TEL FAX PIN CODE

SOLE/ FIRST APPLICANT CATEGORY (Tick one) INVESTMENT DETAILS  Scheduled Commercial Bank Face Value/ Issue Price Rs. 10,00,000/- (Rupees Ten Lacs Only) per Bond  Financial Institution Minimum Application 1 Bond and in multiples of 1 Bond thereafter  Insurance Company Tenure 10 Years  Primary/ State/ District/ Central Co-operative Bank Coupon Rate 9.65% p.a.  Regional Rural Bank Interest Payment Annual  Mutual Fund Amount payable per Bond (i) Rs. 10,00,000/-  Company/ Body Corporate No. of Bonds Applied For (ii)  Provident/ Gratuity/ Superannuation Fund Total Amount Payable (Rs.) (in fig) (i) x (ii)  Others (please specify) –

PAYMENT DETAILS Total Amount Payable Cheque/ DD No./UTR No. (Rs. in figures) (Rs. in words) Dated Drawn on (Name of the Bank) Branch

SOLE/ FIRST APPLICANT’S BANK DETAILS (Ref. Instructions) INCOME TAX DETAILS (Ref. Instructions) Bank Name Sole/ First Second Third Applicant Applicant Applicant Branch P.A,N./ G.I.R. NO. City (enclosed copy) Account Number I.T. Circle/ Ward/ District IFSC Code No. Type of Account  Saving  Curren  Other s t s

TO BE FILLED IN ONLY IF THE APPLICANT IS AN INSTITUTION Name of the Authorised Signatory(ies) Designation Signature 1. 1. 2. 2. 3. 3. 4. 4.

DETAILS FOR ISSUE OF BONDS IN ELECTRONIC/ DEMATERIALISED FORM APPLICANT’S SIGNATURE(S) Depository Name (please tick)  NSDL  CDSL Sole/ First Depository Participant Name Applicant DP-ID Number Client-ID Second Applicant Beneficiary Account Number Name of the Applicant Third Applicant ------*------*------*------*------*------*------*------(Tear Here)------*------*------*------*------*------* ------*------PUNJAB NATIONAL BANk ACKNOWLEDGEMENT SLIP Head Office: 7, Bhikaiji Cama Place, New Delhi, 110 066 Tel No: (011) 26102303; Fax No: (011) 26108741 (To be filled in by the Applicant) All future communication in connection with this application should be st Received from______addressed to the Registrars: MCS Ltd. (Address: F-65, 1 Floor, Okhla Address______Industrial area, New Delhii - 110 020; Tel: (011) 41406149; Fax: 91-11- an application for ______Bonds vide Cheque/ Demand Draft No. ______41709881)quoting full name of Sole/ First Applicant, Application No., Number of Bonds applied for, Date, Bank and Branch where the Drawn on______application was submitted and Cheque/ Demand Draft Number and Dated______amounting to Rs. ______. Issuing Bank. Note: Cheque(s) are subject to realisation.

INSTRUCTIONS

1. Application forms must be completed in full in BLOCK LETTERS IN ENGLISH. A blank space must be left between two or more parts of the name.

A B C D E L T D

Signatures should be made in English or in any of the Indian languages. Thumb impressions must be attested by an authorised official of a Bank or by a Magistrate/ Notary Public under his/ her official seal. 2. Application forms duly completed in all respects must be submitted with the respective Collecting Banker. 3. Applicants can remit the application amount through RTGS on account of “PNB Tier II Bonds Basel III Compliant” Branch Address: “Punjab National Bank BO Capital Market Service Branch, BKC, Mumbai”; IFSC Code “PUNB0477600”; Beneficiary A/c No. “4776002900007396”. 4. Outstation cheques, cash, money orders, postal orders and stockinvest shall not be accepted. 5. As a matter of precaution against possible fraudulent encashment of interest warrants due to loss/misplacement, applicants are requested to mention the full particulars to their bank account, as specified in the Application Form. Interest warrants will then be made out in favour of the bank for credit to the applicant‟s account. In case the full particulars are not given, cheques will be issued in the name of the applicant at his/ her risk. 6. Receipt of applications will be acknowledged by the respective Collecting Branch of the Bank in the “Acknowledgment Slip”, appearing below the Application Form. No separate receipt will be issued. 7. All applicants should mention their Permanent Account Number or the GIR number allotted under Income-Tax Act, 1961 and the Income-Tax Circle/Ward/District. In case where neither the PAN nor GIR number has been allotted, the fact of non-allotment should be mentioned in the application form in the space provided.