Exclusive: There isn't a single lumpy account in our book that can turn into a bad asset, says PNB MD and CEO, Atul Kumar Goel

The focus was always on the recovery and as on date we don’t have any accounts more than even Rs 50 crore for the corporate side, which might get downgraded in the next year : PNB MD and CEO, Atul Kumar Goel

At times if we don’t have adequate deposit we can use the excess SLR to fund the credit growth, said Atul Kumar Goel, MD and CEO, PNB. (Image: PNB )

Punjab National Bank, one of the leading public sector banks in India, reported a 6-fold-growth in net profit in the quarter ending on March 31, 2023. In an exclusive interaction with Zee Business, PNB's MD and CEO Atul Kumar Goel talked about the bank’s target in the coming quarter and how it is planning to bring down the NPAs in this fiscal.

Q: What is the target of the bank in terms of credit growth in this coming year?

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A: As far as credit growth is concerned it is 12.68 per cent in the last year and we are setting the target for the next year within the range of 12-13 per cent. And the growth will come from the RAM (retail, agriculture, and MSME), which will be our focus area. We are also projecting a 20 per cent growth in the housing loan sector. As far as corporate is concerned, we are getting good proposals from the infra side like road, steel, cement industry. One demand is also from the NBFC.

Q: Despite the lowering of the gross and net NPA, it continues to be comparatively high. How do you plan to further bring down the NPA in this quarter and what is the target for recovery?

A: GNPA will be below 7 per cent and our guidance will be that the net NPA will be below 2 per cent. There has been a lot of improvement in the collection efficiency. From July 1, 2020, to March 31, 2023, we have censored around Rs 82.5 lakh crore new sanctions, out of which around Rs 5.18 lakh crore was disbursed and the outstanding is Rs 4.16 lakh crore. In this new acquisition from July 2020, NPA is hardly 0.23 per cent, this is comforting for us. Thus our profitability has also increased in this quarter. The focus was always on the recovery and as on date we don’t have any accounts more than even Rs 50 crore for the corporate side, which might get downgraded in the next year. We are hopeful that recovery should be good in the coming financial year and the target is that the recovery should be doubled.

There is not a single lumpy account in our book that can turn into a bad asset. There are some accounts under the NCLT that will be resolved in the coming quarter. In terms of recovery, this year we have set a target of Rs 22,000 crore. Thus, for each quarter, we are expecting a recovery of approximately Rs 5,500 crore. Out of which we expect to recover Rs 530 crore from NCLT.

Watch here: PNB MD and CEO, Atul Kumar Goel talking about bank's recover

Q: What is your plan for sustained growth thereby balancing both credit growth and deposit growth?

A: Our net interest margin (NIM) was 3.24 per cent in the last quarter. We are having 43 per cent of the CASA (Current Account and Savings Account). Now, we are ensuring that accounts are opened instantly and by doing this we are hopeful that we will be able to garner more deposit growth. Liquidity was never an issue at PNB, as we have excess SLR. At times if we don’t have adequate deposit we can use the excess SLR (Statutory Liquidity Ratio) to fund the credit growth.

Q: What is the plan in terms of risk management? Does PNB have any exposure to SpiceJet?

A: I don’t foresee any risk in the times to come. We don’t have any exposure to SpiceJet.

Q: In times of financial inclusion, how much do you think the bank has been able to cater to the underserved population in the semi-urban and rural areas?

A: Around 65 per cent of the branches are in rural or semi-urban areas. In addition to that, we have 24,000 banking correspondents for areas where it is not possible to open branches. We have digital initiatives like EOTS for individuals availing loans of less than Rs 10 lakh and they don’t need to come to the branches.

Q: How many Vostro accounts are currently there?

A: As on date, we have got the approval for two accounts. We are approaching the RBI for permission for more accounts.

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