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Informist, Saturday, Jul. 18, 2026

 

--PNB ED:Typing up with foreign bks with no India presence for FCNR deposits

--CONTEXT: Comments by PNB ED M. Paramasivam in an interview with Informist

--PNB ED: Focusing on branches in Kerala, Punjab for FCNR deposits

--PNB ED: Focusing on branches in Maharashtra, Gujarat for FCNR deposits

--PNB ED: See 25?NR deposits via direct route, 75% via leverage

--PNB ED: Expect retail, agri loans to rise over 20% in FY27

--PNB ED:To raise retail, agri, MSME share in total loan book to 58% by FY27
--PNB ED:To raise retail, agri, MSME share in total loan book to 60% by FY28

--PNB ED:To raise retail, agri, MSME share in total loan book to 63% by FY30

By Priyasmita Dutta and Pratiksha

NEW DELHI – Punjab National Bank is partnering with foreign banks that do not have presence in India to attract more foreign currency non-resident deposits, Executive Director M. Paramasivam said on Saturday. The state-owned bank aims to mobilise $2.5 billion through FCNR deposits by the end of September. 

 

"...we are tying up with foreign banks that don't have a presence here. For their HNI (high net worth individual) customers, they are going to deal through us," Paramasivam told Informist in an interview. "Loans will be at their end, and the deposits will be with us. In that way also, we are going to mobilise." Parmasivam, however, did not disclose the names of the foreign banks PNB is partnering with. 

 

On Jun. 8, the Reserve Bank of India unveiled a facility under which it would bear the full hedging costs for banks raising fresh three- to five-year FCNR(B) deposits until Sept. 30. Following this, the state-owned lender raised its interest rates on FCNR dollar-denominated bank deposits for three-year to five-year tenors by 40 basis points, effective Jun. 16. Punjab National Bank's revised interest rates on FCNR(B) deposits for three to five years range from 6.40% to 6.50%.

 

"Our branches are focusing (on FCNR(B) deposits) more specifically in Punjab, Kerala, Maharashtra and Gujarat. In these areas, the branches are focusing more towards the mobilisation directly into the account of FCNR," he said. 

 

Punjab National Bank is providing nine times leverage to its non-resident Indian customers, he said, adding that leverage is a big part of PNB's strategy to garner FCNR deposits. Leverage refers to the multiple of the FCNR(B) deposit that a bank is willing to lend against. Of the total mobilised FCNR(B) deposits, 25% is expected to be through direct deposits, while 75% will be through leverage, Parmasivam said. 

 

Speaking about overall deposits, the executive director said that the bank is focused on mobilising current account savings account deposits rather than bulk deposits, certificates of deposit, or term deposits. To mobilise CASA deposits, the bank introduced various schemes last year, and under these, it has so far mobilised deposits worth INR 269 billion. "This will continue in FY27," he said. 

 

The bank's financial results announced earlier in the day showed PNB's deposit growth at the end of the June quarter was below the systemic average. Its global deposits rose nearly 9% on year to INR 17.25 trillion as of Jun. 30, when the Reserve Bank of India's latest data showed deposits of all scheduled commercial banks rose over 13% on year. The deposit growth was, however, in line with PNB's guidance of 9-10?posit growth in 2026-27 (Apr-Mar).  

 

CREDIT GROWTH

Punjab National Bank's credit growth as of Jun. 30 was also lower than its peers. The RBI data showed banks' advances rose nearly 19% on year till June-end, whereas PNB's global advances were up nearly 13% on year at INR 12.73 trillion. This was also in line with its guidance of 12–13% credit growth this year. 

 

Within advances, the bank's retail loans grew 18% on year to INR 2.86 trillion, agricultural loans grew 17% on year to INR 2 trillion, and micro, small and medium enterprise loans jumped 20% on year to INR 2.03 trillion. Paramasivam said that MSME credit was likely to grow 25% on year by the end of FY27, and agriculture and retail loans would grow over 20% this year. "Special focus on agriculture, MSME and retail, we are going to continue the momentum," he said. "Even though our growth rate is on the higher side, we still want to give a special focus on agri, MSME and retail, which will add to our RAM sector."

 

The share of retail, agriculture and MSME loans in its total loan book was 57.2% at the end of June, and this is likely to go up to 58% by the end of March, he said. "By March 2028, it will touch 60%, and by March 2030, it will go to 63% of the total book; this is what our plan is," he said. 

 

Despite an increasing portfolio of retail, agriculture, and MSME loans, which could be susceptible to delinquencies in case of a shock, Paramasivam does not see any risk to PNB's asset quality. "I am not viewing any great slippages at all. It is well within our control," he said.

 

The bank's gross non-performing asset ratio improved to 2.78% at the end of the June quarter from 2.95% at the end of March and 3.78% at the end of June last year. The net NPA ratio also improved to 0.28% at the end of June from 0.29% at the end of March and 0.38% at the end of June last year. 

 

Paramasivam also said that the bank has identified INR 400 billion worth of eligible accounts under the newly launched Emergency Credit Line Guarantee Scheme 5.0. Of this, the bank has already received applications for credit worth INR 204 billion. Punjab National Bank has sanctioned loans worth INR 160 billion and disbursed around INR 125 billion. "So, a huge gap in credit demand persists. With all these disbursements, definitely our credit ratio will go up in the year," he said.

 

The scheme was launched in May to extend credit support to Indian businesses amid uncertainties related to the war in West Asia. The scheme will help businesses, especially MSMEs and the airline sector, maintain their operations, protect jobs, and sustain supply chains. In another 7–10 days, PNB will launch a window that will help in digitally analysing the creditworthiness of borrowers under this scheme and will automatically sanction the loans, Paramasivam said. "Once it is implemented, the entire backlog (of sanctions) will be cleared," he said.

 

Financial results released earlier in the day showed that the public sector bank's net profit jumped 214% on year in the June quarter to INR 52.53 billion, thanks to an extraordinarily low base. In the June quarter of FY26, PNB had shifted to a lower tax regime, resulting in a one-time charge of INR 33.24 billion. Following this, its net profit for Apr-Jun last year tanked to INR 16.75 billion. Sequentially, the net profit for the quarter ended June was up 0.5%. On Friday, shares of the bank closed at INR 105.77 on the National Stock Exchange, up 0.5% from the previous close.  End

 

US$1 = INR 96.28

 

Edited by Avishek Dutta

 

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