Public sector lender Punjab National Bank (PNB) has reduced their prime lending rate by 50 basis points, with effect from January 1.

The BPLR of PNB would now stand 12 per cent, from the existing 12.50 per cent.

In addition, PNB also announced a reduction in its peak deposit rate by 100 basis points to 8.5 per cent for deposits of one year to less than three years beginning New Year.

In a separate release, PNB has notified that it has got regulatory nod from the Royal Monetary Authority of Bhutan for setting up a bank in joint venture with the Bhutanese Promoters.

The Royal Monetary Authority of Bhutan has accorded in-principle approval for setting up Druk PNB Bank Ltd, a joint venture bank between PNB and Bhutanese Promoters.

The sources revealed that the joint venture entity -- Druk PNB Bank Ltd -- would have a paid-up capital of Rs 30 crore and is expected to be operational in the January-March quarter of 2009.

Apart from this latest development, the bank is also eying overseas operations in Norway, Dubai, Shanghai and Singapore.