The tier III bonds of PNB have received AAA rating from credit rating agency, CARE. The rating by care comes on account of strong market presence of the bank, its low cost deposits, loan mix, commendable growth in operations and strong financial position.

The other factors which have contributed to the rating of the bank are its strong asset quality, good capitalization level and Government ownership of majortiy of the bank's stake.

These factors contribute to reduction of risk of interest/principal deferral on due dates which might arise due to lock in clause which is put in uper Tier II bonds.

Tier II bonds are hybrid instruments having long term tenor and a lock in attached to them.