Punjab National Bank (PNB) aims to make an overall recovery of ₹32,000 crore this fiscal and is stepping up efforts to rein in net non performing assets (Net NPA) as a percentage of its advances to 3.5 per cent by end March 2023 from about 4.3 per cent now, its MD & CEO Atul Kumar Goel has said.

Overall recovery, which would include cash recovery, upgradation and recovery from written off accounts,  is now a “focus area” for the bank and a team of 300 officials has now been put together in last week of June to step up focus on this front, Goel said, adding that he was confident of achieving net NPA of 3.5 per cent by end March 2023. 

“We are focusing on recovery through  One time settlement (OTS), taking physical possession and we are also using technology. Each and every account is being monitored. Team of 300 people has been put on the job. There is no worry on any big account”, he added.

He also highlighted that the cash recovery from written off accounts was higher in the latest June quarter than the previous March quarter or even the June quarter last year.

As on date PNB, the country’s second largest public sector bank, has a NPA of ₹90,000 crore besides a technically written off (TWO) amount of  ₹90,000 crore. Combined together, the total bad debt position stood at about ₹1.8-lakh crore. The public sector bank is eyeing recovery of about ₹8,000 crore every quarter this fiscal.

Q1 net declines

PNB had on Thursday reported a 72 per cent decline in consolidated net profit for the first quarter ended June 30, 2022 at ₹304 crore (₹1,080 crore).

Goel said that the bottomline performance was weighed down by a ₹1,400 crore marked to market hit on account of rising yields on G-secs, besides the fact that total treasury gains made by the bank in the quarter also came lower by about ₹500 crore.

NCLT recovery

Goel said that PNB was aiming to recover ₹6,506 crore this fiscal through the National Company Law Tribunal (NCLT) route. As on date, there are 622 cases before NCLT with loan outstanding of ₹66,846 crore, of which the bank has provided for ₹65,384 crore.

He said that the bank had recovered ₹693 crore through NCLT route in Q1 this fiscal and expects to recover ₹626 crore in Q2; ₹1,799 crore in Q3 and ₹3,386 crore in Q4.

Transfer to bad bank 

PNB is aiming to transfer non-performing assets (NPAs) worth ₹2,486 crore to the newly-created National Asset Reconstruction Company Ltd (NARCL) — which is commonly referred to as bad bank — by end September in the first phase.

“As on date, nothing has been transferred by any bank. We are hopeful that by September all the banks would be in a position to transfer. On our part, we have identified eight assets amounting to ₹2,486 crore that should get transferred to NARCL very soon. By end of this quarter, I am hopeful transaction will happen”, Goel said. PNB has already made 100 per cent provisions for these bad loans that are to be transferred to the bad bank.

Goel, who is also Chairman of Indian Banks’ Association (IBA), expects atleast ₹50,000 crore of NPAs from the banking system to get transferred to the newly set up bad bank this fiscal.

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