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Informist, Saturday, Jul. 18, 2026

 

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--PNB: Not seen material impact of West Asia crisis on portfolio 
--PNB: On track to add INR 1 tln worth of digital loans 
--PNB: Made floating provisions of INR 3.90 bln for ECL transition 
--PNB: Expect to mobilise $2.5 bln through FCNR(B) desposits by Sept-end 
--PNB: Have mobilised $425 mln through FCNR(B) deposits so far 
--PNB: To open 250 new branches in FY27, with focus on south, west region 
--PNB: Expect at least INR 900 mln-1 bln via treasury income every qtr 
--PNB: Will cross INR 4 tln in corporate loan book FY27 
--CONTEXT: Comments by Punjab National Bk's mgmt in post-earnings press call 

 

MUMBAI/NEW DELHI – Punjab National Bank's Managing Director and Chief Executive Officer Ashok Chandra Saturday said the second-largest state-owned lender is set to mobilise $2.5 billion through foreign currency non-resident bank deposits by Sept. 30. The bank has raised $425 million through the FCNR(B) route till date.  

 

"Coming to the FCNR(B) deposit, the bank has already mobilised till yesterday 425 million USD ($425 million)," Ashok Chandra said. "And in fact, on various occasions, I have already committed that around 2 to 2.5 billion USD ($2 billion – $2.5 billion) we are going to mobilise. And I am standing on that figure. A lot of strategies the bank has already adopted. And by the end of 30th September (Sept. 30), I think we will be reaching around 2.5 billion USD."

 

The state-owned lender has raised interest rates for the second time on FCNR dollar-denominated bank deposits for three-year to five-year tenors by 40 basis points, effective from Jun. 18. The bank had revised the rates on Jun. 11, after the Reserve Bank of India announced a concessional dollar-rupee swap facility for fresh FCNR(B) deposits. The latest rates were revised after the RBI temporarily withdrew the interest rate ceiling on fresh FCNR(B) deposits for three to five years until Sept. 30. Punjab National Bank's revised interest rates on FCNR(B) deposits for three to five years range from 6.40% to 6.50%.

 

At the post-earnings press conference, the bank's management also said the lender is focusing on higher disbursements through the bank's digital platforms. The bank is on track to add INR 1 trillion worth of digital loans, according to the bank's official. The bank will set aside a sum of INR 35 billion for its total information technology and digital transformation budget in the current financial year, the official said. Out of the total INR 35 billion kept aside last year, about 82% has been utilised, he added. Moreover, as the bank endeavours to expand its network, it plans to set up 250 new branches with its focus on strengthening its presence in the southern and western region.     

 

"We are expanding our customer franchise through focused acquisition, digital first delivery, and a calibrated expansion of our branch network," Chandra said. "During the year, we plan to open 250 new branches, with a special focus on strengthening our presence in the southern and western region. Technology and digital transformation remain at the heart of our growth strategy."

 

On the provisions front, the official said the slippage ratio was well within levels forecast by the bank. However, most of the slippage seen in the retail segment is in the housing loan segment, along with slippages in the agriculture loan segment.

 

"So, most of these slippages in the retail segment is towards the housing loans," Chandra said. "And we have security for that. So, I think we don't much bother about that because the realisation will happen by the sale of those properties to the surface route or, subsequently, the customer will also come forward, and they will repay that loan."

 

The bank posted consistent improvement in its special mention accounts as the overall special mention accounts stood at 2.9% of the total loan book. However, the increase in provisions made for non-performing assets was largely because of floating provisions, the bank official said. The bank made floating provisions of INR 3.90 billion for the expected credit loss transition.     

 

"It looks like that provision is at an elevated level. But actually, if you see my NPA (non-performing assets) number, that itself speaks that it was not required that much provision. It is only because of the floating provision, which we have made up 390 crores (INR 3.90 billion), the provision number has gone up now," the managing director said.

 

Briefing about the corporate loan book, Chandra said the bank has sanctioned INR 955 billion for this in the first quarter, of which about 588 billion is pending. Out of the total INR 6 trillion of sanctions made on the corporate loan books in the last two years, about INR 787 billion of disbursement is pending, which takes the total amount pending for disbursement to INR 1.38 trillion. In the current year, sanctions are likely to cross INR 4 trillion, with 10% growth in corporate loan book, the official said.

 

He added that at least INR 9 billion to INR 10 billion contribution to the bank's total income is expected from treasury operations every quarter. The management said the bank reported INR 11 billion of treasury income without any sales being made from the held-to-maturity books. However, the official also acknowledged that treasury income was volatile, depending on market movements and the government's borrowing. Despite the ongoing conflict in West Asia, the bank did not see any material impact on its portfolios, according to the banking official.

 

"...sustainable growth across all key parameters; business expansion, asset quality, profitability, operational efficiency, and customer service," Chandra said. "We remain firmly on track to achieve the guidance and strategic priorities for financial year 2026-27."

 

The public sector bank's net profit for Apr-Jun jumped 214% on year in the reporting quarter to INR 52.53 billion. Sequentially, the net profit 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

 

Reported by Janwee Prajapati and Pratiksha

Edited by Avishek Dutta

 

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