Government-owned Punjab National Bank said that it was optimistic about achieving 18 percent credit growth as directed by RBI, in the current fiscal despite a moderate demand from the farm sector.

"The slow growth in agriculture is because of drought in the country and the cheaper alternative sources of capital have resulted in subdued credit growth. But we are confident of securing 18 per cent growth during this fiscal," PNB chairman and managing director K R Kamath said.

The industry's loan offtake remains at around 10.5 per cent so far, way below the Reserve Bank of India's projection of 17-18 per cent for this fiscal.

Kamath further pointed out that the low interest rates in many countries have made overseas loans luring which is the cause of the slow credit growth of the banking sector.

The bank has recently axed penalty on premature withdrawal (dec24) by 50 percent to lure more depositors since medium term outlook on interest rates is uncertain.

The bank had been charging 2 per cent penalty for premature withdrawal for the last one year. The rate will be 1 percent from January 1.