Punjab National Bank (PNB), India's leading public sector lender, has cut down home and car loans rates by 50 basis points.

In order to entice people, the bank has introduced `PNB Festival Season Bonanza Offer 2009` under which, customers will get housing loans up to Rs 3 million at discounted rate of interest of 8.50% under fixed interest rate option (fixed for three years) across all repayment tenors, besides full waiver of processing (upfront) fee and documentation charges during the festival season.

PNB has launched this offer after its competitor State Bank of India (SBI) has introduced three-month-long home loan campaign, offering loans at 8%.

The sources informed that under PNB's latest offer, margin also slashed to 15% for housing loans up to Rs 2 million.

On car loans, a rebate of 0.5% is provided to prospective borrowers under fixed option. The sources further informed that the offer will be valid till October 31.

Currently, the fixed rate of interest offered by bank is 9%.