Punjab National Bank

Head Office : 7, Bhikhalji Cama Place, New Delhi 110 066 (India) Tel : (91 11) 2610 8741; E-mail: fpo@pnbindia.com
(Constituted under the Banking Companies (Acquisition and transfer of Undertakings) Act, 1970

BASIS OF ALLOCATION

Public Issue of 80,000,000 Equity Shares of Rs.10/- each for cash at a price of Rs.390 per equity share aggregating Rs.31,200 million (The "Issue") by Punjab National Bank ("The BANK" or "The ISSUER"). The Issue comprises a Net Issue to the public of 64,000,000 Equity Shares of Rs.10/- each (The"NET ISSUE"), A reservation for Employees of 8,000,000 Equity Shares of Rs.10/- each, at the Issue Price. The Issue would constitute 25.37% of the fully diluted post-issue pad-up capital of the bank after giving effect to the reduction of the shareholding of the President of India. In connection with the capital reduction as described on page 22 of the prospectus.

THE FACE VALUE OF THE EQUITY SHARES IS RS.10/- EACH AND THE ISSUE PRICE IS 39 TIMES OF FACE VALUE.

The issue was made through the 100% Book Building Process wherein 50% of the Net Issue to the public was to be allocated on a discretionary basis to Qualified Institutional Buyers. Further, not less than 15% of the Net Issue to the public was to be available for allocation on a proportionate basis to Non-Institutional Bidders and 355% of the Net Issue to the public was to be available for allocation on a proportionate basis to Retail Individual Bidders, subject to valid Bids being received at the issue Price, 8,000,000 Equity Shares were to be available for allocation on a proportionate basis to the Employees,  subject to valid Bids being received at the Issue Price and the maximum Bid in this portion was limited to 500 Equity shares. 8,000,000 Equity Shares were to be available for allocation on a proportionate basis to the Existing Shareholders, subject to valid Bids being received at the Issue Price.

The Board of Directors of Punjab National Bank wish to thank the investing public, for their response to the issue which opened for subscription on March 7, 2005 and closed on March 11,2005. The issue has received 850077 application for 1226474930 equity shares resulting in 15,3309 times subscription. The details of the subscription received in the issue from Institutional, Non-Institutional, Retail, Employees and Existing Sharesholders categories (before technical rejections) are as under:

* After eliminating cheque returs. # Including bids received at cut-off price,

Final Demand

A sample of the final demand at different bid prices is as under:

The Basis of Allocation was finalised in consultation with the Designated Stock Exchange the National Stock Exchange of India Limited ("NSE") on Thursday, March 24, 2005.

A) EMPLOYEES

The Basis of Allocation to the Employees of the Bank, who have bid at cut-off at the Issue Price of Rs.390/- per Equity Share, was finalized in consultation with NSE. The Bank has received 36587 valid applications for 12899985 Equity Shares as against a reservation of 8,000,000 Equity Shares resulting in subscription of 1.6124 times. The details of category-wise allotment are given below:

B)EXISTING SHAREHOLDERS
The Basis of Allocation to the Existing Shareholders of the Bank, who have bid at cut-off at the Issue Price of Rs.390/- per Equity Shaare, was finalized in consultation with NSE. The Bank has received 25058 vaild applications for 12168555 Equity Shares as againts a reservation of 8,000,000 Equity Shares resulting in subscription of 1.5211 times. The sample details of category-wise allotment are given below:

C) ALLOCATION TO RETAIL INDIVIDUAL BIDDERS

The Basis of Allocation to the Retail Individual Bidders, who have bid at cut-off or at the issue Pirce of Rs.390/- per Equity Share, was finalized in consultation with NSE. The Bank has received 776237 valid applications for 79906965 Equity Shares In this category resulting in 3.5672 times subscription. The number of shares allotted to Retail Individual Bidders is 22400000. The details of category-wise allotment given below:

D) ALLOCATION TO NON-INSTITUTIONAL BIDDERS

The Basis of Allocation to the Non-Institutional Bidders, who have bid for at the Issue Price of Rs.390/- per Equity Share, was finalized in consultation with NSE. The Bank has received 10022 valid applications for 260572500 Equity Shares in this category resulting in 27,1429 times subscription. The number of shares allotted to Non-Institutional Bidders is 9600000. The sample details of category-wise allotment are given below:

E) ALLOCATION TO QUALIFIED INSTITUTIONAL BUYERS

The Chairman and Managing Director of PNB vide resolution dated March 24, 2005 has approved the basis of allocation of shares as above and the shares to various successful applicants have been allotted accordingly.

TheCAN-cum-refund orders in respect of refunds due to applicants have been dispatched to the address of the investors as registered with the depositories. The refund orders have been printed with the Bank Mandate details as registered, if any, with the depositories. This shares allocated to the successful applicants have been credited to their beneficiary accounts subject to validation of the account details with the depositories concerned. The Bank is taking steps to get the Equity shares admitted for trading on National Stock Exchange of India Limited (NSE) and The Stock Exchange, Mumbai (BSE) within seven working days from the date approval of basis of allocation.

INVESTORS PLEASE NOTE: These details of the allocation made would also be hosted on the website of registrars to the issue, MCS Limited at http://www.mcsind.com/All future correspodencein this regard may kindly be addressed to the Registrar to the issue quoting full name of the First/Sole applicants, Serial number of the bid-cum-application form, number of shares bid for, name of the Member of the Syndicate and Place where the bid was submitted and payment details at the address given below:

MCS LIMITED (Unit:PNB-FPO), Sri Padmavati Bhavan, Plot No.93, Road No. 16, MIDC Area, Andheri (East), Mumbai 400093 Tel: (91 22) 1820 1783, E-mail: pnbfpo@mcsind.com; website:http://www.mcsind.com/

For Punjab National Bank
Place : New Delhi                                                                                                                                                           Sd/-
Date: March 27, 2005                                                                                                                                         (S.S Kohll)
Chariman & Managing Director