Punjab National Bank aligned its business plan with the cyclical movement in Indianeconomy to overcome the challenging times during FY14. PNB maintained its Number Oneposition amongst nationalised banks in terms of Domestic Business, Domestic Deposits,Domestic Advances, CASA Deposits and Operating Profit as on 31st March14.Further, the Bank with more than 6200 branches has largest domestic network amongstnationalised banks serving more than 8.9 crore customers.
During FY14, the Bank crossed various new landmarks such as Rs. 8 lakh crore ofAggregate Global Business, Rs. 4.5 lakh crore Total Deposits, Rs. 3.50 lakh crore GrossAdvances, Rs. 1.70 lakh crore CASA Deposits, Rs. 1.40 lakh crore Saving Deposits, Rs.30,000 crore Current Deposits and Rs. 11,000 crore Operating Profit. The Bank has achievedreasonable performance in overseas operations with Overseas Business and Overseas Advancescrossing Rs. 70,000 crore and Rs. 40,000 crore respectively.
In terms of profitability ratios, the Bank recorded one of the highest Net InterestMargin of 3.44% during FY'14. Further, the capital adequacy ratio of the Bank stood at12.29% as per Basel II and 11.52% as per Basel III as at 31st March14.The Book value per share increased from Rs. 884.03 in FY13 to Rs. 952.50 inFY14. In this backdrop, your Directors take pleasure in placing the BanksAnnual Report for 2013-14 along with its audited annual financial statements.
A. FINANCIAL HIGHLIGHTS
1 BALANCE SHEET
| || || ||(Rs. crore) |
|Particulars ||31st Mar13 ||31st Mar14 ||Growth (%) |
|Total Business ||700356 ||800666 ||14.3 |
|Deposits ||391560 ||451397 ||15.3 |
|Advances ||308796 ||349269 ||13.1 |
| || || ||(Rs. crore) |
|Particulars ||FY '13 ||FY '14 ||Growth (%) |
|Operating Profit ||10907 ||11384 ||4.4 |
|Provisions ||6160 ||8042 ||30.6 |
|Net Profit ||4748 ||3343 ||-29.6 |
|Particulars ||FY'13 ||FY'14 |
|Cost of Funds ||5.70 ||5.20 |
|Yield on Funds ||8.83 ||8.31 |
|Return on Equity ||15.19 ||9.69 |
|Net Interest Margin ||3.52 ||3.44 |
|Return on Assets ||1.00 ||0.64 |
|Cost to Income Ratio ||42.81 ||45.06 |
|Operating Expenses to Average Working Funds ||1.72 ||1.79 |
|Operating Profit to Average Working Funds ||2.30 ||2.19 |
|Earnings per share (Rs.) ||139.52 ||93.91 |
|Book value per share (Rs.) ||884.03 ||952.50 |
|Provision Coverage Ratio ||58.83 ||59.07 |
|CRAR - Basel II ||12.72 ||12.29 |
|CRAR - Basel III ||- ||11.52 |
B. OPERATIONAL HIGHLIGHTS
The Bank has received approval from regulator for adoption of FoundationInternal Rating Based Approach (FIRB) for Credit Risk on parallel run basis. Further, theBank has also submitted formal Letter of Intent for adoption of Internal Models Approachfor Market Risk.
The Bank has submitted formal application to RBI for in-principle approval forparallel run of Advanced Management Approach (AMA) for Operational Risk on 22.03.2014.
The Bank has put in place New Automated PMS (Preventive Monitoring System) forall borrowal accounts having exposure of more than Rs. 1 crore across all branches.
The Bank launched a Special NPA Reduction Campaign from 1st December,2013 upto to 31st March, 2014. The campaign is a recovery drive to maintain thefocus of the Bank on improvement in asset quality. Progress of this is being monitored ondaily basis.
The Bank launched a PPF campaign for the first time from 1stJanuary, 2014 to 31st March, 2014 to augment and create vibrancy in PPFbusiness. Further to augment fee based income, E-freight and E-stamping products initiatedduring the year.
To facilitate real time credit into the accounts of PNB Customers, the Bank hasentered into an arrangement with UAE Exchange under FLASH Remit. Indian expatriates whohave account with the Bank can credit money in their accounts on real-time basis.
In view of the shortcomings experienced in the off-line technology of TechnicalServices Providers (TSPs) and Business Correspondents (BCs) to strengthen the financialinclusion initiative, the Bank has moved ahead and acquired its own technology of KioskBanking Solution (KBS) where BC services are available on-line mode. All transactions arenow in real time on-line in Core Banking Solution (CBS).
Under Operational Transformation Exercise, the Bank introduced PragatiProductivity Points (PPP) system to measure productivity and efficiency in all domesticgeneral banking branches. This is a unique initiative of its kind by any bank, whichprovides a comprehensive metric for measuring branch performance and productivity acrossbranches with diverse transaction profiles.
The Board of Directors in its meeting held on 31st January 2014 declared thedividend @ Rs. 10 (i.e. 100%) per equity share of Rs. 10 each for FY14.
D. BUSINESS OVERVIEW
Banks total business reached Rs. 8,00,666 crore at the end of March14,registering an absolute increase of Rs. 1,00,310 crore and a YoY growth of 14.3%. TheBanks overseas business increased by 52% over previous year to reach Rs. 73,447crore.
2. Resource Mobilization
Banks total deposits amounted to Rs. 4,51,397 crore as at the end ofMarch14, showing an absolute accretion of Rs. 59837 crore and a YoY growth of 15.3%. The share of low cost deposits (current + savings) in total domestic deposits was 41.3%in FY14 vis--vis 40.9% in FY13. As on 21st March 2014 i.e., theLast Reporting Friday (LRF) of FY14, PNBs share in systems AggregateDeposits reached 4.98%.
The Bank launched a Saving Deposit Campaign from 01.08.13 to 31.12.2013 wherein Rs.2805 crore were mobilized by opening about 11.68 Lac new accounts. An NRI Deposit Campaignwas also launched from 01.11.13 to 31.01.2014 to encourage mobilization of NRI deposits inthe Bank. During the campaign, Rs. 7541 crore was mobilized in 14,499 new accounts. PNBSaksham, a new product with two variants, has been launched on 11.11.2013. The Bank hasmobilized Rs. 25.27 crore under the scheme.
3. Credit Deployment and Delivery
Net advances of the Bank as at the end of March 2014 stood at Rs. 3,49,269 crore,compared to Rs. 3,08,796 crore as at end March 2013, registering an increase of Rs. 40473crore (YoY growth of 13.1%) over last year. Yield on Advances of the Bank stood at 10.36%for the year ended March 2014. As on 21st March 2014 i.e., the Last ReportingFriday (LRF) of FY14, PNBs share in systems credit reached 4.98%.
PNB is the designated Nodal Bank under Technology Up-gradation Fund Scheme (TUFS) ofthe Ministry of Textiles, Govt. of India. For speedier processing of claims under TUFS, adedicated cell at the corporate office facilitates distribution of subsidy to eligibletextile units. The Bank has 677 accounts in SSI and Non-SSI category along with 396 SSIaccounts covered under 15% Credit Linked Capital Subsidy (CLCS) scheme under TUFS. DuringFY'14, the Bank disbursed Rs. 183.15 crore to eligible textile units under TUFS.
To strengthen the credit monitoring system, an Independent Division viz. CreditMonitoring Division, is functioning at Head Office with a General Manager as its verticalHead. Similarly, nodal officers have been appointed in all the FGMOs/COs to havecontinuous watch over the health of the assets. All weak and irregular accounts aremonitored through Task Force Meetings at different levels of the Bank i.e. CO/FGMO &HO on continuous basis. The core issues of weaknesses in the accounts are identified andaddressed.
i. Loan Syndication
The Bank has a Syndication Department at Head Office and Syndication cells at Mumbaiand Chennai. The Bank also has a dedicated Technical Cell at Head office which undertakesProject appraisal and Techno Economic Viability (TEV) studies. These studies are forinternal use and for sharing with participating banks as part of syndication assignments.
During FY14, the Bank gave approvals for appraisal/ syndication of debtaggregating Rs. 12,578 crore with PNBs share of Rs. 6201 crore. Total Income bookedduring FY14 stood at Rs. 18.54 crore. In addition, Rs. 11.85 crore was received inthe form of fees as at 31st March 2014 from assignments in hand.
ii. Retail Credit
The growth of Retail Loan portfolio continues to be the thrust area of the Bank.Banks policies on product development as per the customer requirements, prudentpricing, customisation and aggressive marketing are directed towards boosting businessunder Retail Loan segment. The Bank has 79 specialized Retail Asset Brancheswith an exclusive focus on retail credit.
Retail Credit increased to Rs. 38,864 crore registering YoY growth of 22.5% as on 31stMarch 2014. The Core Retail portfolio which comprises Housing, Vehicle, Education,Personal, Pensioner, Gold, Mortgage and Reverse Mortgage Loan Schemes increased to Rs.31,930 crore which grew by 19% (YoY) as on 31st March 2014.
The Housing Loan segment registered a YoY growth of 19% with outstanding amount of Rs.17,038 crore as on 31.03.2014. The outstanding under Vehicle Loan increased to Rs. 3577crore as on 31.03.2014 registering a YoY growth of 24%. Education Loan segment at Rs. 4258crore grew by 6.5%. A noticeable YoY growth of 34% has been witnessed under Personal Loansegment along with YoY growth of 16% and 13% under Reverse Mortgage and Mortgage Loansrespectively.
The Bank also implemented various schemes of Govt. of India such as Credit RiskGuarantee Fund Scheme for Low Income Housing (CRGFSLIH), Housing Interest Subsidy Schemeunder the name of Rajiv Rinn Yojna launched by Ministry of Housing & UrbanPoverty Alleviation and Education Loan Interest Subsidy under Central Scheme for InterestSubsidy sanctioned upto 31.03.2009 and outstanding as on 31.12.2013.
iii. Priority Sector
The Bank surpassed National Goal of 40% of ANBC in Priority Sector as on 31stMarch 2014. The performance highlights are given in the table:
| ||31.03.2013 ||31.03.2014 ||YoY Growth |
|Priority Sector Credit ||91076 ||120008 ||31.8 |
|Of which: || || || |
|(a) Agriculture Sector ||37777 ||53053 ||40.4 |
|- Direct ||33809 ||44406 ||31.3 |
|- Indirect ||3968 ||8647 ||117.9 |
|(b) MSME (Priority) ||39738 ||53827 ||35.5 |
|(c) Others ||13561 ||13128 ||-3.2 |
|- Credit to Weaker Sections ||27588 ||30497 ||10.5 |
|- Credit to Women Beneficiaries ||14084 ||14301 ||1.5 |
Achievement of National Goals
|Parameters ||% age of ANBC || |
| || ||31st March ||31st March |
| ||Target ||2013 ||2014 |
|Priority Sector Credit ||40.00 ||33.11 ||42.30 |
|Of which: || || || |
|(a) Agriculture Sector ||18.00 ||13.73 ||18.70 |
|(b) Direct Agriculture ||13.50 ||12.29 ||15.65 |
|(c) Credit to Weaker Sections ||10.00 ||10.03 ||10.75 |
|(d) Credit to Women Beneficiaries ||5.00 ||5.12 ||5.04 |
Credit to Agriculture
Credit to Agriculture sector increased to Rs. 53,053 crore as on 31st March2014 registering a YoY growth of 40.4%. The ratio of Agriculture Advances to ANBC was18.70%. The achievement under Direct Agriculture Advances was Rs. 44,406 crore andsurpassed National Goal of 13.5% during FY14. During FY14, the Bank hasdisbursed agriculture loans to the tune of Rs. 43,884 crore to 24.42 lakh farmers andissued 3.37 lakh Kisan Credit Cards.
Initiatives taken by the Bank for increasing flow of credit to agriculture
o On all agriculture loans, interest rates have been reduced to BR+ 2% uniformly.
o The Bank launched two "Special Agriculture Credit Campaigns", one from15.06.2013 to 31.08.2013 during Kharif season and second from 01.11.2013 to 15.01.2014during Rabi season to increase lending to Direct Agriculture. During the campaign period,Rs. 5088 crore was disbursed to 3.74 lakh new farmers.
o In order to boost agriculture advances, the Bank celebrated "AgricultureDay" on 18.09.2013, "Milk Day" on 19.12.2013 and "Farmers Day" on23.12.2013. On these three occasions, the Bank disbursed Rs. 1105 crore to 65,292 farmers.
o Farm Mechanization campaign was also launched from 22.02.2014 to 25.03.2014. Duringthe campaign, loans of Rs. 43.22 crore were disbursed in 1218 accounts.
Modifications in existing schemes
o The limit under Kisan Gold scheme has been enhanced to Rs. 20 lakh.
o Various schemes such as financing for setting up of Custom Hiring/ Service unit,financing against pledge of warehouse receipts issued by cold storage and financing thedealer/seller of agriculture inputs have been modified.
o Scheme for Purchase of Land has been modified. Applicant farmers have been allowed topurchase agriculture land within a radius of 15 kms (earlier it was 3-5 kms) from theexisting land owned by them.
o Tractor Loans for repair/renovation of tractors has been enhanced to Rs. 1 lakh andmore than 5 years old tractors are eligible under the scheme.
Other initiatives taken
o Important documents, forms and circulars uploaded on SMILE products of Knowledgecenter website.
o An independent portal developed for online monitoring of 637 Agriculture officers.
o Upto 31.03.2014, PNB Rupay Kisan card (KCC-Debit Card) were issued in 5.68 lakh KCCaccounts out of 15.12 lakh eligible KCC accounts.
o In order to simplify processing of Agriculture loans-Lending Automation ProcessingSystem (LAPS) Agriculture module is being implemented.
o RBI has allotted Lead Bank Responsibility of three new districts of Delhi namelyNorth East Delhi, North West Delhi and East Delhi to PNB in July 2013. At present, theBank has lead responsibility in 63 districts of the country.
o This year Banks focus is on increasing the share of Investment Credit in Agriculturemainly Farm Mechanization, Dairy, Poultry, Plantation, Horticulture, Rural Godowns, Coldstorages, Input Dealers etc, apart from financing under KCC by extending our farmersbase.
Credit to Weaker Sections & SC/ST
Credit to weaker sections by the Bank increased to Rs. 30,497 crore in March, 2014,registering YoY growth of 10.54%. Ratio of Weaker Sections advances to ANBC at 10.75%continued to be higher than the National Goal of 10%. Credit to SC/ST beneficiariesamounted to Rs. 3384 crore as at 31st March 2014.
Credit to Women beneficiaries
The credit to women beneficiaries at Rs. 14301 crore registered 5.04% as percentage ofANBC at the end of March 2014. A dedicated Women Cell functions at Corporate Office whichclosely monitors the progress under various lending schemes for women beneficiaries andredesigns the existing ones as per emerging needs.
Credit to Minority Communities
Banks credit to minority communities stood at Rs. 18,923 crore as onMarch14 and constitutes 15.77% of Priority Sector advances.
The Bank credit-linked 2,04,826 Self Help Groups (SHGs), extending credit amounting toRs. 18,88.60 crore thus recording YoY growth of 15.54% as at 31stMarch14. The number of deposit-linked SHGs rose to 2,46,258 in cumulative termsduring FY14. Further, the Bank has 1,46,545 credit-linked women SHGs and 1,74,587savings-linked women SHGs. During FY14, a new scheme for promotion/ support of womenSelf Help Groups in Backward & Left Wing Extremism affected districts of India hasbeen made operational in 13 identified districts and 4885 SHGs have been formed under thescheme, out of which 1913 SHGs have been credit linked. Further the Bank also implementedNational Rural Livelihood Mission (NRLM).
Micro, Small and Medium Enterprises
The credit to MSME sector increased to Rs. 75051 crore registering a YoY growth of22.08% in FY14 and constituted 23.91% of Total Non-Food Credit. The advances toMicro Enterprises grew at 30.74% thus reaching a level of Rs. 24,716 crore. TheBanks MSE advances at Rs. 59,213 crore surpassed Statement of Intent (SOI) target ofRs. 58,500 crore for March 2014. The Bank implemented recommendations of High Level TaskForce constituted by Honble Prime Minister to address the issue of MSME sector:
Against the envisaged growth of 20% in credit to Micro and Small Enterprises,the outstanding MSE advances at Rs. 59,213 crore achieved YoY growth of 21.63%.
The outstanding number of Micro Enterprises Accounts were 4,68,918 as on 31stMarch14, showing YoY growth of 10.04% against the envisaged growth of 10%.
For speedier appraisal of loan proposals, branches are using the SME ScoringModel for loans upto Rs. 50 lakh.
Liberal moratorium on term loan and working capital has been extended byincluding interest also, during first 6-12 months of operation on case to case basis andinterest debited during this period is being treated as long term funding of project andinstallments after moratorium period are fixed accordingly.
During FY14, the Bank covered 14,925 cases under the CGTMSE scheme with creditoutlay of Rs. 870 crore. The Bank is also extending interest concessions to MSE accountsand the rate of interest capped at Base Rate+4.00% including term premia in the CGTMSEcovered accounts.
The Bank is also pro-actively participating in various schemes of the Government ofIndia viz., Prime Minister Employment Generation Programme (PMEGP), Credit Linked CapitalSubsidy Scheme (CLCSS) for Micro & Small Enterprises, Khadi & Village IndustryCommission (KVIC) and Technology Up-gradation Fund Schemes for Textile & Jute Sector(TUFS), Subsidy Scheme for Food Processing Industries, etc.
MSME Credit Growth Initiative Branches
MSME Credit Growth Initiative has been launched in 250 branches in January 2014. Thisinitiative proposes to reduce turnaround time to 2-4 weeks and to grow MSME portfolio by30% from December13 to December14. MSME advances in these branches haveincreased to Rs. 37,462 crore as on 31st March 2014 showing YoY growth of7.96%.
A New Scheme "PNB Sanjeevani" has been launched with competitive Interestrate and other attractive features. This scheme is for financing professionally qualifiedmedical practitioners.
Interest Concession to Micro and Small Enterprises
To support new and existing Micro & Small Enterprises, the Bank is extendinginterest concessions of 75 basis points on chargeable Interest Rate for loans up to Rs. 25lakh.
Concessional Interest rates in various schemes
Concession in interest rate ranging from 2.25% to 3.25 % and concession in processing /upfront fee of 50% is available for Food and Agro based units. Special concessional rateof interest i.e. Base Rate+1% to Base Rate+2% is available to MSME units engaged inmanufacturing of Agriculture Inputs. Further concessional rate of interest i.e. BaseRate+1.50% to Base Rate+2% is available to Arhtiyas and Commission Agents. The interestrate for loan against warehouse receipt reduced to Base Rate+1% (inclusive of charges ofCollateral Managers).
The Bank has adopted the cluster based lending approach and has 55 clusters to givefocused attention to the sector.
Simplified Loan Application for MSMEs (Manufacturing & Servicesector) has been made available along with the check list of documents.
Facility of submission of application on-line by prospective borrowers,with the option to track progress of application under MSE segment has been provided.Further a concession of 20% in upfront fee and processing fee is extended to borrowers whosubmit application on-line.
For growth in Service Sector, the Bank has Tie ups/MoUs with vehiclemanufacturers like Tata Motors, Ashok Leyland, Mahindra & Mahindra Ltd., Bajaj AutoLtd., Piaggio Vehicles P Ltd., Volvo Eicher Commercial Vehicles Ltd., Hindustan MotorsLtd., TVS Motor Co. Ltd., Asia Motor Works, Atul Auto Ltd., JS Auto, ICML Ltd. and Escortsfor financing transport dealers.
iv. Financial Inclusion
The following business models are adopted by the Bank for Financial Inclusion (FI):
Direct Benefit Transfer (DBT) Scheme
Government of India has extended scheme of Direct Benefit Transfer in 78 additionaldistricts in phase II w.e.f. 01.7.2013 in addition to 43 pilot districts in phase I w.e.f.01.01.2013. At present, 26 schemes of central government are being covered. The amount ofLPG subsidy is also being reimbursed in 293 districts in six phases, launched with fourpilot districts on 01.06.2013. The Bank has covered all SSAs of DBT/ DBTL districtsthrough our banking outlets i.e. bank branches/BC locations. The Bank has lead Bankresponsibility in 63 districts, out of which 8 are amongst the 43 pilot districts coveredunder Phase I and 6 districts are covered under Phase II.
On-line Transactions at BC Locations
To provide BC services in on-line mode, the Bank has put in place Kiosk BankingSolution (KBS) which is a proprietary software. With this new technology, the FinancialInclusion customers can access all basic banking services (account opening, cashwithdrawal, cash deposit, mini statement, balance enquiry and fund transfer) required bythem at BC location in real time. Now, FIcustomers can also transact on ATMs and MerchantPOS outlets. The customers of the Bank (whose biometrics have been captured) can now makebanking transactions either at any branch/ ATM or any BC locations across the country. TheBank is also working towards offering inter-operability at BC locations of the Bank thatwould further facilitate the making of interbank transactions across the country bycustomers.
The Bank is using Aadhaar Payment Bridge System (APBS) platform of NPCI for DBT/MGNREGA/ National Social Assistance Programme (NSAP) payments. Now, the Bank is gearing upfor Aadhaar Enabled Payment Services (AEPS) for payments by way of Aadhaar authenticationfrom UIDAI data base.
Use of Business Correspondent (BC)
For an efficient and effective BC network, the Bank adopted a mix of BC Models usingKBS technology for each Sub Service Area (SSA) or Urban Ward (UW) within the service areaof a base branch. The Bank has 8490 SSAs across the country. Out of these 2406 SSAs arecovered by branches and 2549 SSAs are covered by BC locations under on-line KBStechnology.
Common Business Correspondents: As per MOF directives in respect of CommonBC, the Bank has engaged 89 BCAs of M/s Vakrangee Finserve Limited, a Common BC inRajasthan.
Corporate BC: The Bank has engaged 240 Business Correspondence Agents ofCorporate BC using KBS technology. The Bank is in process of migrating offline TSP basedBC model to online Kiosk Banking Solution (KBS) based Corporate BC.
Individual BC: The Bank has 915 Individual BC Agents using KBS technology.
New Initiatives: In addition to providing basic banking facility, newfacilities viz., Indo Nepal Remittance, Immediate Inter Bank Remittance (IMPS), MicroCredit, Micro Deposit Scheme, Micro Pension and Micro Insurance have been added and areavailable at BC locations.
v. Asset Quality
In all Non Performing Assets (NPAs), account-specific resolution strategies wereimplemented and progress was monitored regularly. Daily progress of recovery in NPAs(outstanding Rs. 10 lacs and above) was monitored and placed before Top Management.Further compromise/negotiated settlements through one to one meeting with borrowers wasadopted as another vital strategy to tackle NPAs. The Bank also has 17 Asset RecoveryManagement Branches (ARMBs) and 20 Special Asset Recovery Cells (SARCs)which functionexclusively for resolving NPAs.
Initiatives taken during FY'14
The Bank has launched a Special NPA Reduction Campaign from 01.12.13 to31.03.2014. The campaigns progress is monitored on daily basis. Besides this theBank has a regular staff Incentive Scheme called "Prayaas" to promote recoveryin NPAs and written off accounts.
Engagement of retired bank officials as Resolution Agents on commission basis inaccounts up to Rs. 1 crore.
During FY14, in 4891 Rin Mukti Shivirs, cash recovery of Rs. 269 crore wasobtained from 70263 accounts and up-gradation of 19501 accounts with balance outstandingof Rs. 266 crore. Thus, NPA of Rs. 534 crore were resolved in these shivirs.
OTS was marketed as a product for faster resolution of NPAs and OTS in 61,398accounts was approved.
Online Portal for monitoring of DRT Cases and SARFAESI has been launched.
At the instructions of Department of Financial Services, Ministry of Finance,Govt. of India, a Special Committee of the Board has been constituted by CMD, EDs and GOIDirector to monitor the progress of recovery in NPA accounts on regular basis and submitits report to the Board on Monthly basis.
The Bank recovered Rs. 1792 crore in freshly slipped accounts.
Accounts with aggregate outstanding of Rs. 1429 crore were upgraded to standardcategory. Total cash recoveries in NPA accounts amounted to Rs. 2611 crore. Through welldefined recovery policy Rs. 588 crore were recovered in approved OTS cases throughnegotiated settlements. During FY14, the Bank recovered Rs. 515 crore out of theaccounts earlier written off.
a. Industrial Rehabilitation
During FY14, Draft Rehabilitation Scheme (DRS) was formulated by the Bank actingas Operating Agency of BIFR in 2 accounts. The Bank has also implementedrehabilitation package in one case sanctioned by BIFR during FY14.
b. Corporate Debt Restructuring (CDR)
During FY14, 43 accounts with outstanding of Rs. 6381.30 crore were restructuredunder CDR and out of these, the Bank has been assigned the role of Monitoring Institutionin 8 accounts.
c. Debt Restructuring Mechanism for Small and Medium Enterprises
During FY14, the Bank has restructured 290 accounts with aggregate outstanding ofRs. 339.43 crore.
The Bank has also put in place a transparent mechanism for restructuring of debts ofpotentially viable units, which are facing temporary problems due to factors beyond theircontrol even for cases which cannot be covered under BIFR/ CDR/DRM for SMEs. During FY'14,49 accounts involving Rs. 2850 crore were restructured/ rescheduled under this category.
4. Risk Management
The Bank has a robust credit risk framework and has placed credit risk rating models oncentral server based system PNB TRAC, which provides a scientific method forassessing credit risk rating of a client. The Bank is undertaking periodic validationexercise of its rating models and also conducting migration and default rate analysis totest robustness of its rating models. Further, the mapping of internal rating grades toexternal rating agencies grades ha