Bangalore: To lure more deposits, Punjab National Bank (PNB) slashed the penalty for premature withdrawal of deposits by 50 percent. The bank which has been charging two percent since January 2009, has slashed to one percent. The new rate will be effective from January 2010. KR Kamath, Chairman and Managing Director, PNB said, "We are falling in line with the market. Once you have taken a fixed deposit, if somebody prematurely withdraws, it creates problem in asset liability management. To that extent, this one percent is reasonable and in tune with the market practice." In its statement to its term-deposit customers, the bank said that the tax of one percent penalty at the time of premature cancellation or part-withdrawal for all tenures and the interest payable would be the contractual rate minus one percent. This step has been taken at a time when most of the banks are trying to address the asset-liability mismatch. PNB is also planning to introduce branchless banking by setting up kiosks in unbanked villages.