Money & Banking

Will honour bona fide obligations: PNB

Surabhi K Ramkumar Mumbai | Updated on April 11, 2018 Published on April 11, 2018

Stressing that Punjab National Bank (PNB) will honour all bona fide obligations, Sunil Mehta, the bank’s non-executive Chairman, said it has already settled dues of nearly ₹6,500 crore.

“I am very happy that we delivered on the promise … We have honoured everything up to March 28 and it was not a small amount. Whatever is now falling due in April, we will make sure to pay it off,” Mehta told BusinessLine in an interview on Wednesday.

The bank has been rocked by a fraud, to the tune of ₹13,000 crore, allegedly commited by jewellery designer Nirav Modi using fraudulent letters of undertaking (LoU). Mehta highlighted the bank’s strong liquidity position and said it is also focussing on recovery efforts, including the sale of stressed assets through the National Company Law Tribunal (NCLT), as part of the strategy to settle these dues.

Counting on recovery

“We are hopeful that in April and May some decisions will be taken by the NCLT and there will be some recovery to us from these assets,” he said, adding that every branch and zonal office of the bank has also been given targets for recovery of loans.

PNB had also raised ₹5,000 crore from a Qualified Institutional Placement last December and had received ₹5,473 crore as part of the government’s recapitalisation programme.

“We are not really desperate for capital at this point of time and the RBI has been very kind to us to give a four-quarter dispensation,” Mehta said, adding that there is no immediate plan to monetise PNB’s subsidiaries or investments.

He further said that PNB, which is the country’s second largest public sector lender, is focussing on building its business, investing in technology and restoring customer confidence.

“We are in business and we have been in business and will continue to be in business. We will isolate our problem and deal with it,” Mehta said.

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Published on April 11, 2018
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