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Informist, Tuesday, Jan. 20, 2026

 

--PNB ED:Plan to list PNB Cards, PNB Investment Svcs, PNB MetLife in 1-2 yrs

--CONTEXT: PNB ED Paramasivam's comments in an interview with Informist

--PNB ED: Plan to list one PNB-sponsored regional rural bank by March-end

--PNB ED: Plan to monetise, sell stake in three arms via IPOs

--PNB ED: Will not raise funds in Jan-Mar, have adequate capital

--PNB ED: See room to raise CD ratio 3-4 percentage points from 74?c-end

--PNB ED: Plan to cut 390-day deposit rates 20-30 bps in Q4 from 6.4?c-end

--PNB ED: To up retail, farm, MSME loans to 60% of total from 56% in 1-2 yrs

 

By Shubham Rana and Priyasmita Dutta

 

NEW DELHI – Punjab National Bank is looking to list one of its regional rural banks on stock exchanges by March, the bank's Executive Director M. Paramasivam told Informist in an interview. After the regional rural bank, Punjab National Bank will look to list its other subsidiaries over the next one to two years, Paramasivam said.

 

Punjab National Bank Monday reported a net profit of INR 51 billion for the December quarter, up 13% on year. The lender's total income for the quarter rose 7% on year to INR 372.53 billion .

 

The Delhi-based bank is the sponsor for eight regional rural banks. While Paramasivam did not say which of the eight regional rural banks would be listed on stock exchanges, Informist had reported in December that the finance ministry had asked Haryana Gramin Bank, sponsored by Punjab National Bank, to draw up plans for an initial public offering by the end of 2025-26 (Apr-Mar).

 

Haryana Gramin Bank reported a net profit of INR 3.77 billion for FY25, with a capital-to-risk-weighted-assets ratio of 15.31%. The finance ministry has also asked Canara Bank-sponsored Kerala Gramin Bank and Tamil Nadu Grama Bank, backed by Indian Bank, to draw up plans for an initial public offering, Informist had reported earlier.

 

"In all probability", the listing of the regional rural bank will be completed by March, Paramasivam said. Asked about the funds Punjab National Bank would look to raise from the listing of the regional rural bank, the executive director said "it is an initial process, I don't have any estimates right now." Regional rural banks were established to developing the rural economy by providing accessible credit for agriculture, trade, commerce, industry and other productive activities in rural areas.

 

The bank's move to list its subsidiaries also comes after a push from the Department of Financial Services, Paramasivam said. The bank has three subsidiaries in which is holds majority stake – PNB Gilts Ltd., PNB Investment Services Ltd., and PNB Cards and Services Ltd. It also owns considerable stake in PNB Housing Finance Ltd. and PNB MetLife India Insurance Co. Ltd.

 

PNB Gilts and PNB Housing are already listed and the bank aims to list PNB Cards, PNB Investment Services, and PNB MetLife. "We want to go for IPOs for all others," Paramasivam said. Asked if PNB MetLife could be the first arm to be listed, Paramasivam said "there is no pressure, which is to be come first and which is to be last." In 2018, PNB MetLife had received approval from the Securities and Exchange Board of India for an initial public offering of 495 million shares. However, the bank did not go forward with the deal due to the market conditions then. 

 

The bank aims to monetise its stake in the subsidiaries through public offers, Paramasivam said. Punjab National Bank holds 30% stake in PNB MetLife and 100?ch in PNB Cards and PNB Investment Services. 

 

FUND RAISING PLANS

Punjab National Bank is not looking to raise funds in the rest of FY26 even as it has board approval to raise INR 80 billion this financial year, Paramasivam said. "We do not need additional capital right now," he said. "Even though 8,000 crore (INR 80 billion) is permitted by the board, right now we are not in the mode of going for that because it involves cost."

 

The lender has not yet raised funds as part of this plan. It has, however, raised INR 9.12 billion through the sale of 10% stake in Canara HSBC Life Insurance Co. Ltd. in the life insurer's initial public offering. In FY25, the bank had raised INR 50 billion in equity through a qualified institutional placement of shares and INR 30 billion by issuing tier-II bonds.

 

The Delhi-headquartered bank's capital adequacy ratio was 16.77% at the end of December, 136 basis points higher than a year ago.

 

Paramasivam said Punjab National Bank's "comfortable" credit-deposit ratio of 74% also improves its capital adequacy, although, he said, there was room for the CD ratio to improve by 3-4 percentage points. The bank also has excess statutory liquidity ratio holdings of around INR 360 billion-INR 400 billion, about 2.26?ove the regulatory requirement, and the bank could draw on this in case its needs funds. "As such, we don't see any pressure for us in mobilising funds. Sufficient good capital is available with us," Paramasivam said. 

 

The state-owned bank's credit growth has outpaced deposit growth so far this year, with global advances growing 11% on year to INR 12.31 trillion as on Dec. 31 and global deposits rising 8.5% on year to INR 16.60 trillion. Paramasivam noted that the bank took a "conscious call" of not lowering deposit rates in the December quarter and planned to lower it by 20-30 bps in the March quarter from the current level of 6.4% for 390-day term deposits. The bank offers 6.1% interest on one-year term deposits which goes up and tapers down to 6.1% for five-year deposits as well. 

 

"Our focus is on CASA (current account savings account) mobilisation through differentiated products which will reduce our cost of deposits further," Paramasivam said. The bank's CASA deposits rose over 9% on year to INR 764 billion at the end of December, and accounted for 37.1% of its total deposits. The bank hopes to augment more CASA deposits through its unique products for different social groups, including women, defence officials, farmers, students, and salaried professionals. "Each product has specific features which will attract them (targeted depositor group). Maybe in certain products, insurance will be available," Paramasivam explained.

 

On the credit side, the executive director said the bank would increase its 'retail, agriculture, and MSME' portfolio to 60% of its loan book over next one to two years. Currently, this portfolio makes up 56% of its loan book. According to him, the Goods and Services Tax cuts rolled out in September led to "unprecedented" growth in MSME and retail loans, particularly housing and vehicle loans. "GST cut is helpful for public as well as for credit growth of the industry," he said. 

 

Punjab National Bank's MSME loans grew over 18% on year to INR 1.88 trillion at the end of December, which Paramasivam expects will rise further to 19-20% by the end of the year. The bank's retail credit grew 19% on year, with housing loans growing nearly 15% on year to INR 1.27 trillion, and vehicle loans up 36% on year at INR 1.92 trillion. 

 

Within retail loans, the banker said Punjab National Bank's major focus in on housing loans and loans against property, followed by vehicle loans and personal loans. When it comes to MSMEs, the bank has adopted a new approach – supply chain management, he said. Under this, the bank links financial services with the physical flow of goods, ensuring smoother transactions and better cash flow for businesses across the supply chain. This portfolio has grown to INR 50 billion and the bank hopes to triple it over the next one year. 

 

With these initiatives, the bank expects profit in the March quarter to be "similar" to December quarter, with a "little higher" operating profit, Paramasivam said. At 1131 IST, shares of the bank were at INR 126 on the National Stock Exchange, down 1.6% from the previous close.  End

 

Edited by Avishek Dutta

 

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