punjab national bank share price Directors report


Financial Year (FY) 2021-22 was yet another challenging year for the entire banking sector but the industry players could sail through it successfully owing to better preparedness and conducive business conditions. The economic scenario improved during the year which provided ample opportunities for credit growth. PNB in line with the economic trend continued to scale greater heights and put up good performance in terms of business growth during FY 2021-22. The Bank continued to emphasize on Retail Credit to enhance the credit portfolio and with the added strength in terms of manpower and branches, PNB exhibited the reinforced performance. During the year, the Bank also streamlined the reporting structure of Mid Corporate Centres (MCC) and PNB Loan Points (PLPs) while loaning power and other guidelines were revised to support quicker decision making.

The Bank also kept the focus on the asset quality throughout the year which resulted into improved recoveries, reined in slippages and lower NPA ratios. In addition to it, the Bank continued to innovate in order to serve the customers better and expediently. Digitalization remained a buzzword as Bank added to the kitty of products and services and explored tie- ups with the fintechs to provide the seamless banking to the customers in the convenient manner. The Bank kept its focus on Human Resource Development by way of up-skilling them in line with the changing requirements of the industry.

As at the end of 31st March, 2022, Banks Gross Global Business stood at Rs.19,31,322 Crore with Gross Global Advances at Rs. 7,85,104 Crore and Gross Global Deposit at Rs.11,46,218 Crore. Current and Saving Deposits (CASA) was at Rs. 5,33,654 Crore with domestic CASA share at 47.43 per cent. In addition, Banks Operating Profit was at Rs. 20,762 Crore with the Net Profit of Rs. 3,457 Crore for the FY 2021-22. As at the end of 31st March, 2022, Gross Non-Performing Assets (GNPA) ratio declined to 11.78 per cent and Net NPA ratio declined to 4.80 per cent. While Global Net Interest Margin (NIM) was at 2.71 per cent in FY 2021-22, Capital to Risk Weighted Assets Ratio (CRAR) was comfortable at 14.50 per cent.

During FY 2021-22, Banks efforts and achievements were recognized on many prestigious platforms. The Bank was adjudged "Best MSME Bank (PSU) in 8th MSME Excellence Awards by ASSOCHAM". Under EASE, PNB was declared Runners-up in two theme-wise awards i.e., Governance & Outcome centric HR & Institutionalizing Prudent Banking and Second runner-up in the best improvement category i.e., 42% improvement over baseline. Further, the initiatives taken by bank in the area of technology was duly appreciated as PNB won "The Asian Banker Financial Technology Innovation Award 2021 for "Best Core-banking Technology Implementation.". The Bank was also (adjudged 2nd Best Bank in SHG Credit Linkage under NRLM scheme by Ministry of Rural Development (MoRD)). The Bank secured 1st position amongst peer banks under Agriculture Infrastructure Fund (AIF) campaign launched by Ministry of Agriculture and Farmers Welfare. PNB also bagged 3rd Position for its performance in implementing the Government scheme PMEGP for the FY 2020-21. The Bank won Dr. Ambedkar Business Excellence Awards under the Category "Most Significant Lender Supporting SC Entrepreneurs".

"Against this backdrop, your Directors have pleasure in presenting the Annual Report of your Bank for the year ended 31st March, 2022 (FY 2021-22) along with its audited Annual Financial Statements".

OUR PERFORMANCE

A. Financial Performance Assets and Liabilities

Total Assets of the Bank was at Rs.13,14,805 Crore as at 31st March, 2022. While the Net Advances stood at Rs. 7,28,186 Crore, Investment was at Rs. 3,72,168 Crore.

On the Liabilities side, Deposits stood at Rs. 11,46,219 Crore while the Borrowings was at Rs. 45,681 Crore as on 31st March, 2022.

Net Interest Income

The Net Interest Income of your Bank stood at Rs. 28,694 Crore during FY 2021-22. While Total Interest Income stood at Rs. 74,880 Crore, Interest Expenses was at Rs. 46,185 Crore.

Operating Profit

Operating Profit of your Bank during the FY 2021-22 stood at Rs. 20761 Crore. While the total Income stood at Rs.87,200 Crore during FY 2021-22, total Expenses was Rs.66,438 Crore in FY 2021-22.

Net Profit

Bank has earned a Net Profit of Rs.3,457 Crore in FY 2021-22 vis-a-vis Rs.2,022 Crore in FY 2020-21.

Provisions and Contingencies

Total Provisions (other than tax) made during FY 2021-22 were at Rs.16,445 Crore with Provision for NPA at Rs.14,159 Crore. Provision Coverage Ratio (PCR) including TWO of the Bank was at a robust 81.60 per cent as at 31st March, 2022 and PCR excluding TWO was at 62.24 percent.

B. OPERATIONAL HIGHLIGHTS

Some of the operational highlights of the Bank during FY 202122 are listed below:

Financial

• Banks Global Business reached the mark of Rs.19,31,322 Crore in 31st March, 2022, which was second highest among Public Sector Banks (PSBs).

• CASA Deposits at Rs.5,33,654 Crore also remained second highest amongst PSBs with 47.43 per cent share in Domestic Deposits.

• Savings Deposit grew to Rs. 4,51,680 Crore as on 31st March, 2022. Retail Term Deposit was at Rs. 5,15,751 Crore as on 31st March, 2022.

• Within Core Retail Credit Portfolio, Housing Loan increased to Rs.73,805 Crore, Car/Vehicle Loan increased to Rs.12,615 Crore and Mortgage Loan was at Rs.12,232 Crore. MSME loan grew to Rs. 1,25,032 Crore as on 31st March, 2022

• Return on Equity improved to 5.96 per cent in FY 2021-22 hence showing the improvement of 208 bps over FY 2020-21.

• The Board of Directors have recommended a dividend of Rs. 0.64 per equity share (32%) for the year ended 31st March, 2022 subject to requisite approvals.

Capital

The capital adequacy of the Bank improved during the financial year on account of capital raising by the Bank coupled with improved profitability. During FY 2021-22, Bank has raised equity of Rs.1800 Crore through QIP, Rs.1919 Crore through Tier-II Bonds and Rs.3971 Crore through AT-1 Bonds. The Bank continued with its focus on sustainable business growth by targeting better rated borrowers with low risk profile. Going forward, the Bank is strategically well placed to meet the growing credit needs of the economy.

Key Highlights

• The Capital Adequacy Ratio of the Bank stood at 14.50 per cent, as of 31st March, 2022, with Tier-1 capital at 11.73 per cent and Common Equity Tier-1 (CET-1) at 10.56 per cent.

• The Credit Risk Weighted Assets (RWA) of the Bank were optimized to Rs.4,88,969 Crore in March 2022 on account of focus on better rated accounts and churning of portfolio of the Bank.

Major Initiatives

a) Learning & Development

The Bank has always kept up-skilling of manpower in the forefront and adopted innovative measures. At the same time, the Bank has also ensured consistent delivery of enhanced learning experience. Further, Bank remodeled On Job Trainings (OJT) and introduced workbooks for Management Trainees to facilitate them during OJTs. Bank also upgraded Delivery through Online Channel.

b) Promoting inclusivity

Seminars to motivate the workforce were undertaken by the Bank under which Womens Conclave for lady executives in the Bank was organised, where Madam Arundhati Bhattacharya (former chairperson SBI) joined in for keynote address. This was aimed at motivating female officers to rise up in the career ladder.

c) Cultural integration

As part of the cultural integration, PF numbers of all the employees of PNB 1.0, e-OBC and e-UNI have been harmonized.

Other Key Initiatives

• PNB Pride: For real time monitoring and record account visits details Mobile application-PNB Pride has been developed for field functionaries. User can enter visit details like name of contact persons, status of the unit, uploading photo, report by the visiting officials, recovery details, promise date etc.

• Mtouch app: A Digital Mobile Application PNB Mtouch cum Web Portal has been developed to capture the records of all field visits made by the Branch Officials for recovery of overdue amount.

• PNB FASTag: An app was launched in November 2021 for Apple and Android devices to facilitate application for tags, recharge and viewing transaction history on mobile devices.

• Opening of Online & Instant Savings Account with Video KYC: The Bank launched Instant Customer On-Boarding Platform through Video KYC to facilitate the customers for opening account with KYC-verification on-line and to attract techno-savvy new-age customers.

• Submission of life certificate for central/state govt. Pensioners through Video Based Customer Identification Process (V-CIP): To enable the pensioners to submit Life Certificate at their convenience and comfort, the Bank launched an online web-based platform for Central/State Govt. Pensioners for submission of Life Certificate online using Video based Customer Identification Process on 30th December 2021.

• Setting up 5 CASA Back Offices for opening of CASA accounts centrally: In order to address KYC compliance and to achieve better customer service Bank has setup, 5 CASA Back Offices for opening of CASA accounts centrally. It was operationalised in September 2021. These CASA Back Offices are located at Kolkata, Mumbai, Panchkula, Bhubaneswar and Faridabad.

• PNB Virtual Debit Cards: Virtual Debit cards were launched by the Bank thereby eliminating the need for carrying the physical Debit cards.

• PNB 360 portal: Bank has launched PNB-360 Portal which is a Dashboard available for All Bank employee at their on Premise desktop and at Tab with auto-refresh, one stop solution for Management and field functionaries.

• Trade Finance Portal: The Bank has launched 2nd phase of Trade Finance Portal to allow import customers to scan and send documents directly to Bank covering Import documents, Foreign Letter of Credit and Foreign Letter of guarantee.

• ASBA Service in PNB ONE: ASBA services has been introduced in MBS (PNB ONE). It is popularly hassle free and user friendly approach for IPO application in few clicks in less than a minute. Now, ASBA services can be availed through Branches, Internet Banking, UPI and Mobile Banking i.e., PNB ONE.

C. ASSET QUALITY

Despite disruptions in economy due to 2nd and 3rd wave of Covid-19 pandemic, Bank was able to reduce Gross NPA from the level of Rs.1,04,423 Crore as on 31st March, 2021 to Rs.92,448 Crore as on 31st March, 2022. Focus on asset quality continues to be one of the top priorities for the Bank. Provision Coverage Ratio (PCR) including TWO continued at satisfactory level of 81.60 per cent as on 31st March 2022.

• Cash Recoveries: Total Cash Recovery improved to Rs.15,788 Crore for FY 2021-22 from Rs.11,442 Crore in FY 2020-21.

• Upgradation: Upgradation for FY 2021-22 improved to Rs. 5,253 Crore from Rs. 2,363 Crore in FY 2020-21.

• Upgradation through Resolution Mechanism: The Resolution Cell was created to exclusively deal with Restructuring/Resolution of NPA accounts and recovery in National Company Law Tribunal (NCLT) cases. The details regarding the same is as under:

Restructured Accounts

(Amount Rs. in Crore)

Total Sanctioned

No. of A/cs Amount
FY 2021-22 06 347

Further, a sum of Rs. 2,703 crore was recovered in NPA accounts under IBC in NCLT.

• Mega E-auctions: During FY 2021-22, 23,771 properties were uploaded on e-Bikray portal. Out of which 1,319

Immovable Properties (IPs) were auctioned successfully with success rate of 5.54 per cent.

• Sale of Assets to Asset Reconstruction Company (ARC): Details of financial assets sold to Securitization/ Reconstruction Company (SC/RC) for Asset Reconstruction is as under:

(Amout Rs. in Crore)
Items FY 2021-22
i. No. of Accounts sold to ARCs 4
ii. Book Outstanding of Accounts Sold 2421
iii. Aggregate consideration received (100 per cent cash) 1058

• Initiatives taken to Improve Asset Quality during FY 2021-22

• In order to support recovery efforts of field functionaries, a common recovery portal i.e. SASTRA Portal was rolled out during the year. The portal is having 5 different modules like One Time Settlement (OTS), Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI), Debts Recovery Tribunals (DRT), National Company Law Tribunal (NCLT) & Wilful Default. Through this common recovery portal, status of major recovery actions of a Borrower can be ascertained at a single place. OTS Module provides an automated platform for online processing of settlement proposals.

• For effective monitoring, standalone DRT and SARFAESI Portals have been re-configured as separate modules in the SASTRA Portal.

• All the NCLT cases are being monitored through NCLT Module which captures the latest status of each case. Wilful defaulter database of the Bank has been loaded through a separate module.

• Further, for effective monitoring and follow-up of NPA Accounts, PNB Pride App was also rolled out in all the SASTRA Centres and Branches. This Geo Tagging enabled App records field functionaries visit details and captures visit location.

• Further, Bank has initiated steps for development of a new comprehensive. Application Software for Digitalization & Automation of Banks Recovery & Litigation functions is being developed which will provide End-to-end processing of all major recovery actions in NPA Accounts.

• Exclusive Vertical for recovery of NPA Accounts: As part of the Organizational restructuring, a separate vertical called SASTRA Vertical has been created for exclusive & focused recovery operations. The vertical operates with officers posted at different levels in the field who are exclusively working for recovery.

• Special OTS Scheme: During the year, Bank has put more focus on accounts with outstanding up to Rs. 5.00 Crore which constitutes the largest segment of the NPA Portfolio. For more recovery, the Bank has launched special OTS Scheme for this segment. The scheme is of Check box model-non-discriminatory and non-discretionary. More powers have been delegated at the field level for speedy & transparent one-time settlement in this segment. During FY 2021-22, 1,64,969 NPA accounts with outstanding of Rs. 3,016 Crore were resolved under the said scheme. Suitable amendments were done to resolve accounts under Agriculture and MUDRA NPA Accounts.

D. INFORMATION TECHNOLOGY (IT) AND DIGITALIZATION

Technology continues to drive the Banking sector and with the advent of Fintech on the banking landscape, it has become all the more critical to adopt and imbibe technology in the Banks day to day operations effectively to remain competitive and grow. In this regards, the Bank, during FY 2021-22, took up various initiatives which are enumerated as under:

• Implementation of Bharat Bill Payment System (BBPS) in IBS/MBS- Through BBPS option in PNBOne, now customer can make payments towards variety of utility service providers/billers under different categories like-Mobile, Landline, DTH, electricity, gas, education fees etc. In addition to Bill Payment, there are several other options such as:

• Repeat your last 10 bill payment.

• Enroll for Standing Instruction

• Enable Notification button to receive monthly/ quarterly or yearly notification of bill payment to never miss it

• Positive Pay in IBS: An electronic authentication system will allow customers to share the cheque details with bank before the bank processes it. With Positive Pay System every account holder now can enter details of cheque (date, amount etc.) issued by him through PNB ONE for secondary authentication.

• Online reset of IBS Password of NRI without Debit card:

Internet Banking users having active debit card can online reset the password(s).

• Opening of Demat A/c via PNB ONE: Through this feature, Demat Account can be opened instantly by submitting the required customer related information.

• Delivery of Debit card at customer address: In order to reduce the footfall in branches and to facilitate the customers to get the Debit Card delivery at their registered address, customers have been facilitated to activate the Debit Card delivered at their registered address through setting Debit Card PIN without the need to visit the branch. All other transactions shall be allowed after successful PIN set transaction.

• Internet Banking Services (IBS) facility for visually impaired: The visually impaired customers by using screen reading software like JAWS (Job Access With Speech) which facilitates Text to Speech, can avail internet banking services.

• Voice assistant in PNB ONE: Voice Assist enabled through PNB One provides a voice driven feature for the following functionalities:

• Mini Statement

• Last transaction inquiry

• Balance Inquiry

• Cheque book request

• Debit card issuance through IVR

• Acceptance of RuPay card in Singapore: Domestic RuPay Debit Cards accepted at all Network for Electronic Transfers (NETS) enabled POS terminals in Singapore.

• Virtual Debit card through PNB ONE: Bank has launched Virtual Debit Card which can be used for e-Comm transactions at all merchant sites through Second factor authentication (OTP).

• E-Mandate on Debit cards: Bank has tied up with NPCI to provide e-mandate facility for Recurring payments on RuPay Debit Cards.

• PNB Personal Advisor (PA): In order to provide ease of access to the customer and non-customers for various applications and services offered by the Bank, an umbrella application namely PNB Personal Advisor (PNB PA) was launched. Phase-I made LIVE by 1st November 2021 and has been downloaded by more than 18,000 users.

• Captcha for login into Retail & Corporate: In order to enhance security in Retail and Corporate Internet Banking Bank introduced strong CAPTCHA at the time of login.

Implementation of e-FRM in MBS & IBS: In order to check fraudulent transactions, the e-FRM has been implemented in Mobile Banking and Internet Banking Solution.

Specific category UPI enhancement: Transaction value limit in UPI has been enhanced from Rs. 2 Lakh to Rs. 5 Lakh for use-cases qualifying under the following business:

• Category Identifier

• Initial Public Offering (IPO) Purpose Code 01 MCC- 6211

• G Sec through RBI Retail Direct Scheme

• (RDS) Purpose Code 25 MCC- 6211

Transaction Alerts on E-mail: The customers have now been given option to get the transaction alerts on e-Mail.

SIM Binding: To enhance the security feature, SIM Binding is implemented in PNB ONE App. With the SIM binding feature, PNB ONE will be activated only on the device which have the SIM Card of Registered Mobile Number (RMN).

Other initiatives

a) Empanelment of vendors for Development/Customization/ Maintenance/ Testing/Support of software solutions upto Rs. 35 Lakh. Development of four products/ solutions (PNB PA, LIC Generic Module, C-KYC, PFMS) are done using said empanelled vendors.

b) Online savings Account with Video KYC In terms of RBI guidelines, Online Account opening with Video KYC functionality was implemented to provide remote customer on boarding. It was made live on 12th April 2021.

c) Pre-approved Personal Loan: Implementation of Digital customer Journey for Pre-Approved Personal Loans to existing customers of the Bank. It has been made live on 12th April 2021.

d) Digital e-Mudra (Shishu) loans: Implementation of Digital Customer Journey for online Shishu MUDRA loans. It was made live on 19th August 2021. Further, implementation of Digital customer Journey for online Tarun and Kishor Mudra loans is underway.

e) CKYC Mobile Application for Scanning KYC Documents of old Accounts. The project has been live since 24th November, 2021.

f) Life Certificate Facility to pensioners through Video KYC:

The project was made live on 30th December, 2021.

g) Tie-up with Paisa bazaar: The Bank entered into Partnership with loan marketplaces for sourcing of leads (Housing Loans).

h) Indian Banks Block Chain Infrastructure Company (IBBIC):

The Bank has joined IBBIC as one of its founding members. IBBIC will explore banking related use cases with Blockchain technology. IBBIC and its members have decided to start use of Blockchain for Domestic Letter of Credit (LC).

E. MANAGEMENT INFORMATION SYSTEM

The Bank believes in harnessing the power of both big data and small data not only to drive decision-making and operational excellence but also to provide personalized experiences to increase customer delight.

Enterprise-Wide Data Warehouse (EDW)

Data is the new cynosure of any form of organization and Banking is no exception to it. Data when stored, arranged, structured and mined, it provides Information; which in turn generates persistent Knowledge resulting in wisdom as final product. PNB has made its Enterprise-wide Data Warehouse (EDW) live, as Single Source of Truth for operational, management information system, decision support system, informative and analytics of Banks data for Descriptive, Diagnostic, Predictive and Prescriptive manner to achieve the targeted growth in Business. EDW is now one stop information source for regulatory ADF/ CIMS project.

Data Analytics

The Bank has set up a Data Analytics Centre of Excellence (CoE). Analytics is being conducted on broadly three verticals- Business, Control and Support, with objective of new value- creation, cross-sell and up-sell opportunity, increasing revenue, cost reduction, product enhancement, channel optimization, default loan prediction, maximizing digital footprint and improve risk profiling of the customer base.

Next Level Reforms: With EDW in place, Bank is well prepared to achieve the Action Points under next level reforms in PSBs for short Term and Long Term Target like digital enhancement, Big Data Analytics, adoption of change in Banking Technology, focused use of Fin techs and improvement in Employee engagement through Analytics.

To align with the present and future strategic business requirements of PNB, to gain competitive edge and to cater to the needs of creating advanced digital capabilities for Bank, Model based business leads are being generated on various personal segment. Team is also geared up for analytics-based credit and non-credit offers. Process and systemic optimization through promotion of Digitization driven by analytics is another avenue being pursued by analytics team.

F. BRANCH NETWORK

Domestic Presence: The Bank has one of the largest networks of 10098 branches as on 31st March, 2022, comprising of 1753 Metropolitan, 2035 Urban, 2457 Semi Urban and 3853 Rural branches. Rural and Semi Urban Branches (RUSU) comprise around 63 per cent of the Total Branch Network.

International Presence: At present Bank has its overseas presence in 7 Countries by way of 3 branches (1 at Hong Kong (about to be closed), 1 at Dubai and 1 at GIFT City Gujarat), 2 Subsidiaries (London and Bhutan), 1 Joint Venture (Nepal), 2 Representative Offices (Myanmar and Bangladesh).

G. INTERNATIONAL BANKING

As on 31st March, 2022, there were 232 branches authorized to handle Foreign Exchange Business and 4 Trade Finance Centers functioning at New Delhi, Chennai, Kolkata & Mumbai specialized for centralized handling of trade transactions and International Service Branch for all inward remittances. In addition to it, the Bank has 6 Exchange Bureaus at important tourist centers to facilitate encashment of Foreign Exchange Currency Notes by foreign tourists/NRIs.

• Domestic Forex Business

The Bank has registered a Foreign Exchange Business Turnover of Rs.1,24,172 Crore (Exports and Imports together) for the FY 2021-22 registering the growth of 37 per cent.

The Bank has an International Service Branch (ISB) functioning at New Delhi for handling Inward Remittances. During FY 2021-22, the Bank has handled remittance business of Rs. 51,191 Crore.

The Bank has Rupee Drawing Arrangements (RDA) with 16 exchange Houses (10 in the Gulf, 1 in Singapore, 2 in the USA, 1 each in UK, Canada and Seychelles) to facilitate remittance from NRIs.

The Bank also has remittance arrangement under Money Transfer Service Scheme (MTSS) with Transfast Worldwide.

• Overseas Business

Overseas business of the Bank stood at Rs.47,060 Crore as on 31st March, 2022 registering YoY growth of 8.77 per cent. Overseas branches are focusing on High Quality Medium/Long term Assets to build a diversified loan portfolio with low Credit Risk Weight to improve profitability.

Steps Initiated for Forex Business growth

• 55 Export Promotion Councils (EPCs) have been visited on Pan India basis during the FY 2021-22. Further, all the Zonal Offices were advised to continue liasioning with Export Promotion Councils (EPCs) for sourcing new relationships.

• 105 Exporter/Importer meets were conducted on Pan India basis to address their grievances in respect of Forex business during FY 2021-22.

• The Bank generated 185 new leads of forex customers during FY 2021-22. Further, 149 relationships have been converted into business.

Trade Finance Platforms for Exporters/Importer:

Subsequent to launch of Export module, recently, the Bank launched 2nd phase of Trade Finance Portal covering Import documents, Foreign Letter of Credit and Foreign Letter of guarantee to allow import customers to initiate transactions.

Outward remittance facility for Resident Individuals through Net-Banking:

The Bank launched Outward Remittance Facility for resident individuals for remitting funds under LRS through Internet Banking. This gives ease to retail customers for remitting for the purpose of Gift, Donation, Travel (Business, Pilgrimage, Medical Treatment, Education and Maintenance of close relatives).

• A facility for sending direct intimation to customers in respect of Inward remittance has been introduced.

• International Service Branch (ISB) has started sending mails directly to customers with respect to their inward remittances which reduces the TAT.

• Dedicated customer care desks are made available at all TFCs to help trade finance customers. The contact details are also placed on PNB Corporate website.

• A dedicated email ID eximcust@pnb.co.in has been created exclusively for trade finance customers for their forex related operational issues.

International Banking Unit (IBU), GIFT City Gandhinagar, Gujarat has been operationalised w.e.f., 8*h April 2022. It will offer services like an overseas branch of the bank under regulator International Financial Services Centres Authority (IFSCA). The major products offered will be ECB, Buyers credit to Indian borrowers and Term Loan, Working Capital, Trade Finance and FLC/FLG to overseas entities. Branch will trade in Foreign currencies in overseas market, raise funds in foreign currency as deposits and borrowings from non-resident sources and provide loan and liability products for the clients.

H. BUSINESS DIVERSIFICATION

Insurance Business

• Life Insurance: Bank has tie-up with the following Insurance companies (FY 2021-22), Life Insurance Corporation of India (LIC), PNB MetLife India Insurance Co. Ltd (PMLI) and Canara HSBC Oriental Bank of Commerce Life Insurance Co. Ltd (CHOICe). Presently, Bank is continuing tie-up with only two companies:

1. PNB Metlife India Insurance Co. Ltd (PMLI)

2. Life Insurance Corporation of India (LIC)

The Banks earnings from Life Insurance business grew by 6.45 % during FY 2021-22 to Rs. 294 Crore from Rs. 276 Crore during FY 2021-22.

• Non-Life Insurance: The Bank has tie-up with the following Insurance companies:

1. The Oriental Insurance Co. Ltd. (OICL)

2. Bajaj Allianz General Insurance Co. Ltd. (BAGIC)

3. Cholamandalam MS General Insurance Co. Ltd. (CHOLA)

4. Care Health Insurance Co. Ltd. (CHICL)

5. Star Health & Allied Insurance Co. Ltd. (SHICL)

The Banks Commission Income stood at Rs. 101 Crore during FY 2020-21 (Health Insurance- Rs. 66 Crore & Asset Insurance- Rs. 35 Crore) against Rs. 93 Crore in FY 2020-21 (which included Income of around Rs. 4.41 Crore pertaining to Crop Insurance and the same is not included in FY 2020-21). During the FY 2020-21, the Bank registered a YoY growth of 14.1 per cent in income (excluding Crop Insurance). The following new segment specific products were launched during FY2020-21:

a. Women Specific health insurance products covering critical illness (specifically related to women).

b. Personal Accidental Insurance cover for customers falling in Lower income group.

• Mutual Funds: Bank is distributing and marketing Mutual Fund products of the following Asset Management Companies:

1. M/s Sundaram Asset Management Pvt. Ltd (previously known as Principal Asset Management Pvt Ltd).

2. M/s Nippon Life Asset Management Ltd.

3. M/s UTI Asset Management Company Ltd.,

4. M/s Aditya Birla Sunlife Asset Management Company Ltd.

5. M/s LIC Mutual Fund Asset Management Ltd.

6. M/s DSP Investment Managers Pvt. Ltd.

7. M/s Franklin Templeton Asset Management (India) Pvt Ltd.

8. FISDOM is also providing MF Aggregator and Robo- Advisory services to existing eOBC customers on revenue sharing basis.

During FY 2021-22, Income of Rs. 5.72 crore was earned against the target of Rs. 7.00 crore and YoY growth was 50.13 per cent.

• Depository Services: As a Depository Participant, Bank opened 11,627 Demat Accounts during FY 2021-22 against 5,539 in FY 2020-21 and 12,016 Online Trading Accounts in FY 2021-22 against 7,514 in FY 2020-21. Out of 11,627 Demat Accounts, around 9,022 i.e., 78 per cent of Demat accounts was opened digitally through Insta Demat available on IBS and MBS. Income earned in FY 2021-22 from Depository services was Rs. 5.70 Crore

• ASBA & Merchant Banking: Bank has license to act as Banker to issue, debenture trustee and merchant Banker. During FY 2021-22, 217 issues were handled. The amount blocked through ASBA was Rs. 5442 Crore and Income of Rs. 0.45 Crore was earned during FY 2021-22.

New Initiatives

a. Life Insurance & Non-Life Insurance Business: In order to reach out to Banks customers using the Banks digital channels like Corporate website, Net Banking & Mobile Banking App to conduct their banking activities, the Bank introduced facility of soliciting its insurance products through Insurance Self-Networking Platform (ISNP) on Banks Website/IBS/MBS w.e.f., 27th April, 2021.

b. Depository & ASBA Business: e-DIS services is proposed to be introduced for our trading customers to eliminate the POA (Power of Attorney) submission to trading members for performing share trading. With the introduction of e-DIS services, customers can start share trading instantly after opening of trading account with the channel partners.

ASBA services has been introduced in MBS (PNB ONE). It is hassle free and user friendly approach for IPO application in just few clicks. Now, ASBA services can be availed through Branches, Internet Banking, UPI and Mobile Banking i.e., PNB ONE.

c. Lead Management System: Introduction of two new channels for lodging customer request through lead management system of CRM has been made effective from March 2022 through which customers can express their interest in Bank Products. Bank has also added two new number for lodging Asset & Digital products by missed call.

d. Customer Acquisition Centres (CAC) and Government Business Vertical Centres (GBV): In the new revamped structure of PNB, 57 Customer Acquisition Centres (CACs) at major locations & 21 Government Business Vertical Centres (GBVs) at State Capitals across India became operational since July 2020.

The main objective of these above mentioned set up is to give focused approach to generate bulk business through strategic tie ups with existing/new Corporate/ Institutional/ Govt./Defence & PSU clients, by exploring cross sell/up sell bouquet of various Bank products, Third Party Products (TPP). In addition, this structure also focus on deepening relationship with HNI/NRI clients by exploring up sell/cross sell opportunities.

e. Defence Business: Defence Business Cell was conceived as a distinct vertical under Customer Acquisition Division with the sole purpose of functioning as a forearm of PNBs banking business with Indian Armed forces, State police forces, Paramilitary. PNB will sign MOU with Indian Airforce and Assam Rifles. Existing MOUs with Indian Army, Navy, Coastguard will have, added and unique features under the flagship produc such as Rakshak Plus scheme.

I. GOVERNMENT BUSINESS

With a view to play a more proactive role in the transfer of funds from Centre and States to various beneficiaries, Bank has been making efforts to have a sizeable number of Public Financial Management System (PFMS) agency accounts. Bank is also accredited banker to nine different Central government departments, post amalgamation. Bank has been increasing tie-ups with various State governments to cater to their specific needs.

New Initiatives

• Fastag: National Electronic Toll Collection Project has been implemented and all branches have been enabled for issuance of Fastags.

National Pension System (NPS): Four Regional Rural Banks sponsored by the Bank have been on-boarded for NPS remittance.

Govt. e-Market Place (GeM): Bank is first amongst nationalized banks to be present on GeM portal for providing services to vendors, i.e. sellers and purchases. These services include GeM pool account, e-PBG (Performance Bank Guarantee) & e-EMD (Earnest Money Deposit).

Public Financial Management System (PFMS): Bank has timely disbursed funds of approximately Rs. 4080 Crore to about 68 lakh beneficiaries under PM Kisan Samman Nidhi.

• Integration with Cochin Port Trust through Payment gateway has been carried out.

• The account of Rural Electrification Corporation Ltd. has been sourced for the government scheme SAHYOG and PFMS integration has been implemented.

• The government account for Deen Dayal Upadhyaya Grameen Jyoti Yojana has been sourced.

• Through active marketing, 1,39,544 PPF, 76,357 Sukanya Samridhi accounts and 61,031 Senior Citizen Saving accounts were opened during the FY 2021-22.

• Ten Series of Sovereign Gold Bond subscription launched by Govt. of India were marketed by branches and 1229 Kilograms were sold.

• The Bank is disbursing pension of approximately 10.7 lakh pensioners i.e. Central Govt. Defence, Railways, Telecom and state Government.

• The Bank is having integration with various states and we are collecting online and offline taxes through their Cyber Treasury Portal and collection of VAT is done in 21 States.

• Collection of taxes (Direct & Indirect) is being done through offline and online mode on PAN India Basis. We are one of the major collectors of taxes for Central & State Government

J. TREASURY OPERATIONS

Gross Domestic Investments stood at Rs.3,75,006 Crore as on 31st March, 2022 while average investments were at Rs.3,81,098 Crore in as on 31st March, 2022. Interest income from the investment portfolio (Domestic) stood at Rs. 23,399 crore for FY 2021-22.

The Bank actively traded in SLR and Non-SLR securities throughout the financial year. Total trading profit (domestic) for FY 2021-22 is Rs. 3150 Crore.

The liquidity remained comfortable throughout the year in the banking system due to lack of desirable credit off-take, despite the fact that Cash Reserve Ratio (CRR) was restored to pre-pandemic level of 4 per cent. Liquidity surplus in the banking system reached record levels in September with average liquidity of around Rs. 6.5 lakh crore due to increase in Government spending and absence of additional borrowing for GST compensation. RBI continued to provide liquidity support through OMOs and G-SAP 2.0 operations in order to ensure orderly execution of the Government borrowing plan.

RBI announced various liquidity support measures during the year such as:

• On Tap Special Long-Term Repo Operations (SLTRO) for Small Finance Banks (SFBs) was extended till 31st December, 2021.

• The TLTRO on Tap Scheme was extended by a period of six months, i.e., till 30th September, 2021 and further till 31st December, 2021.

• RBI extended fresh support of Rs 50,000 Crore to the AIFIs for new lending in FY 2021-22.

• The MSF relaxation continued up to 31st December, 2021 and was restored to the normal dispensation whereby banks will be able to dip up to 2% of NDTL for overnight borrowing under the MSF from 1st January, 2022.

• RBI to conduct fortnightly Variable Rate Reverse Repo (VRRR) auctions as well as auctions for longer duration maturities, however the 14-day VRRR auction would be the main liquidity management operation and shall coincide with the CRR maintenance cycle.

RBI reitereted its stance to remain accommodative as long as necessary to revive and sustain growth on a durable basis. RBI commenced normalizing liquidity conditions by discontinuing its G-SAP operations and resuming its long term VRRR from 4th quarter onwards and gradually started draining out excess liquidity from the system. RBIs currency swap further drained durable rupee liquidity from the system. The recent CRR hike of 50 bps will drain a further Rs. 87,000 Crore of liquidity.

• Fixed Income (SLR/NSLR)

Reserve Bank of India (RBI) tried to balance its objective of sustaining growth with price stability and that of managing the Central and State Governments massive borrowings amid multiple waves of the pandemic and uncertain global macro environment. The Indian bond market was well supported by RBI through both conventional and unconventional measures including differentiated auction methodology, GSAP 1.0 and GSAP 2.0 program. However, during second half of the Financial Year, yields inched up significantly due to expectations of rate hikes by central banks in all major developed economies of the world on account of high inflation expectations due to surging commodity prices, and the Indian bond market yields were no exception.

During FY 2021-22, the 10 year benchmark G Sec yields rose to 6.95 per cent after the announcement of budgeted market borrowing of Rs.14.95 Lakh Crore. However as per the revised borrowing calendar, gross market borrowing was pegged at Rs.14.31 Lakh Crore. As a result, the Central Governments borrowing programme for FY 2021-22 came to an end on 25th February 2022 and the total auctions were much lower than expected due to cancellations of scheduled auctions for the month of March 2022. This cooled off the yields temporarily, but in the recently conducted unscheduled MPC meeting (May 2022), RBI raised the benchmark repo rate by 40 bps due to concerns regarding domestic inflation along with a 50 bps CRR hike to drain out excess liquidity. This resulted in benchmark yields touching a high 7.49 per cent and it continues to be at elevated levels. The short term yield also spiked considerably with 1 year T Bill reaching a high 5.95 per cent on expectations of further hikes in the forthcoming MPC Meetings.

Since the advent of COVID-19 pandemic, the governments borrowing has almost doubled, but the pool of domestic investors has not kept pace with the same and still much needs to be done before domestic sovereign bonds are listed on global indices. Hence, the challenges for the smooth conduct of massive borrowings for the third consecutive year are galore. The same is further intensified by the gloomy outlook on yields aggravated by reversal of accommodative stance by central banks across the globe. Russian invasion of Ukraine and other expected geo-political tensions including COVID-19 lockdowns in many parts of the world including China, are further expected to make things difficult for the bond markets. The near-term outlook on Indias external sector has also worsened considerably. Bond yields have hardened across the maturities as geo-political factors have clouded the outlook on inflation, further compounding the challenges for the smooth conduct of the massive borrowing planned by the Centre and the States for FY 2022-23.

• Equity & Mutual Funds

Indian equity markets have seen one of the steepest rallies from the lows of the pandemic in the last Financial Year, however the current financial year has been marred by rate hikes in developed markets, inflationary pressures, supply bottlenecks, commodity shortages and geo political tensions. As a result, foreign investors have been net sellers of Indian equities for the entire year, but domestic retail and institutional investors have been more or less resilient to selling pressures. However, in the next fiscal year, equity markets are expected to be more or less muted in absence of any fresh positive triggers. Also, uncertainties regarding COVID-19, further flare up of tensions between nations and steep rise in inflation, are expected to keep the markets on the offered side only.

Forex

Net forex income of the Bank for FY 2021-22 was Rs.1,866 Crore. The Indian Rupee remained largely stable throughout the year and traded in a broad range of USD/INR 74-76. However, it experienced a knee jerk depreciation during 7*h March 2022 pushing it to USD/INR 77.01 on account of abnormal rise in crude oil prices due to geo-political tensions. However, RBI continued to be active in markets to smoothen out the volatility. It finally closed at USD/INR 75.92 on 31st March, 2022.

K. CUSTOMER CARE

The Bank fully realizes the importance of customer service and continues to lay utmost priority to render prompt and efficient service to customers. In order to achieve the desired objective, the Bank has formulated a robust Grievance Redressal Policy keeping in view the guidelines issued by Reserve Bank of India on Customer Service. The Bank is ensuring the redressal of the grievances of customers within the framework laid down in the said policy.

Initiatives undertaken during the year for improvement in customer service

• The Bank has an On-line Grievance Redressal Management Portal called Centralized Grievance Redressal Management System (CGRMS), which is in-house Portal. Through this system, the customer gets an immediate acknowledgement and can keep a track of the complaint also. Customers can lodge their requests/complaints in the CGRMS through Banks website, Internet Banking Service, Mobile Banking Service and Mobile App.

• The Bank has state-of-the-art Primary Contact Centers at Gurugram and Noida to provide tele-banking services to its customers on 24x7x365 basis through two leading Service Providers. In addition to these two Primary Sites, the Bank has also established two Secondary Contact Centers at Dehradun and Bhopal to provide tele-banking services to its customers in 13 languages (During the FY 2021-22, 2 languages were incorporated over IVR in addition to existing 11 languages).

• Further, the number of self-services extended to 14 by Contact Centre through IVR during FY 2021-22 thereby making them more customer friendly.

• The Bank has constituted teams of officials at Customer Care Centre at Head Office, Zonal Offices and Circle Offices to pay incognito visit to branches to assess standard of service. During FY 2021-22, officials of the Bank made 14,576 incognito visits to branches pan India. Deficiencies pointed out by the visiting officials are being shared with the concerned branches/Circle Offices for taking corrective steps.

• The status of complaints received by the Bank is reviewed by "Customer Service Committee of the Board", a SubCommittee of the Board, on quarterly basis. The meetings of the Committee are presided over by Managing Director & CEO.

• The Bank has in place an Internal Ombudsman as per the recommendations of the Damodaran Committee. The system ensures greater transparency in the redressal of grievances by the Bank.

• Customer Service Committees in all the branches and Circle Offices look into the quality of customer service rendered and critically examine the feedback/suggestions for improvement in customer service. These committees meet once in a month where staff and the invited customers interact freely on service-related issues.

• A monthly magazine "Customer Speaks" is published in which selected complaints filed by customers and the action taken/resolution provided to the complainants are also mentioned. Appreciation letters issued by customers appreciating the service of officials of the bank are also published in the magazine. Banks guidelines on important issues pertaining to customer service, products and services are highlighted in the magazine for the benefit of field staff.

• Theme Based Meetings are being conducted at monthly intervals in all branches on a pre-decided date and theme to improve awareness among field staff about banks products and services, and to sensitize them about the issues of maximum importance.

• Door Step banking services is available in the Bank. It is a facility by which customers can avail many of the financial/non-financial banking services at home through the Vendors at 100 centers. It provides convenience to the customers to access different type of banking services from their Door Step.

• For faster resolution of complaints Bank has designated Chief Customer Executive Officer (CCEO) with the rank of Dy. Zonal Manager/Dy. Circle Head at all ZOs/COs level whom a customer can approach for redressal of his grievance. The contact details of CCEOs have also been displayed at Banks website.

• Selected complaints along with their solutions are displayed through Todays Mantra- SAMASYA & SAMADHAAN on regular basis, so that field functionaries can provide quick/ on the spot resolution to customers on complaints of the similar nature.

• Regular training sessions are arranged at Call Centre for CSAs so that they can handle customers call properly & resolve their trivial issues by giving correct/latest information that customer wants about the products/ services.

• Creatives have been published at Social Media (Facebook &Twitter) on regular basis to educate customer about Banks service such as, Balance enquiry on Missed Call, and not to share their credentials over fraudulent calls and for registering nomination in deposit account.

• During FY 2021-22, out of a total number of 1,46,759 complaints (i.e., 7,175 complaints outstanding as on 31st March, 2021, and 1,39,584 complaints received during FY 2021-22), 1,45,852 complaints were resolved up to the satisfaction of the complainant, till 31st March, 2022 in CGRMS Portal.

• Further, during FY 2021-22, out of a total number of 16,80,065 complaints (i.e., 81,389 complaints outstanding as on 31st March, 2021, and 15,98,676 complaints received during FY 2021-22), 16,50,370 complaints were resolved up to the satisfaction of the complainant, till 31st March, 2022 in CRM Portal.

L. IMPLEMENTATION OF OFFICIAL LANGUAGE

Punjab National Bank has always been a pioneer in the implementation of the Official Language Hindi. During the Financial Year 2021-22, Bank continued to make concerted efforts to increase the use of Hindi and compliance of guidelines received from Department of Official Language, Ministry of Home Affairs, GoI, Committee of Parliament on Official Language and Department of Financial Services, Ministry of Finance. Concrete and effective steps were taken by the Bank to achieve various region wise targets set in the Annual Program 2021-22 issued by the Department of Official Language, Ministry of Home Affairs, Government of India, as a result, most of the targets have been achieved.

Special works done in the Field of Official Language Implementation

Hindi and Regional Languages were used in publicity and promotional campaigns related to the schemes and products of the Bank.

• Online Hindi quiz for staff members was conducted on Banks e-Learning portal PNB UNIV.

• Cyber Security Glossary prepared in Hindi.

• "Noting Sahayika" was prepared to help the officers in Hindi noting which was released by Dr. Sumeet Jerath, IAS, Secretary, Official Language, Ministry of Home Affairs, Government of India.

• Inter Bank Hindi Essay Competition was organized at All India level.

During FY 2021-22, total 4 books were awarded by the Bank under the Original Hindi Book Writing Scheme.

• Intensive monitoring was done to achieve targets set in Annual Programme and Corporate Action Plan of Official Language duly approved by the Board

• Prizes were awarded to offices/staff doing excellent work in Hindi under Lala Lajpat Rai Shield Yojana and various other incentive schemes to increase the use of Hindi in the Bank.

• Quarterly house magazine of the Bank "PNB Pratibha" and half yearly Hindi magazines of the Zonal Offices were published regularly.

During the FY 2021-22, the Bank celebrated the month of September 2021 as Hindi month and on 14th September 2021, a grand celebration of Hindi Diwas was organized in Head Office and its various offices. During this period various programs/competitions were organized and prizes were given to the winners by the Managing Director and CEO and Heads of the Offices.

• PNB has efficiently discharged the responsibility of convener of 29 Town Official Language Implementation Committees across the country. Half yearly meetings of these committees were held regularly and Hindi competitions, Hindi workshops, Hindi seminars etc. were organized during the year.

External Inspection / Official Language Seminar/Conference

• A discussion meeting was organized on 3rd March, 2022 by the Drafting and Evidence Sub-Committee of Parliament on Official Language with the Chairman of Delhi Bank Nagar Rajbhasha Karyanvayan Samiti (NARAKAS) (Convener PNB) and its 5 member offices. Apart from this, the official language inspections of Banks various Zonal/Circle Offices were also done by the Ministry of Finance and the Ministry of Home Affairs and the work was being done by the bank towards the progressive development of Hindi was appreciated.

• In the graceful presence of Dr. Sumeet Jerath, IAS, Secretary, Official Language, Ministry of Home Affairs, Government of India & under the Chairmanship of MD & CEO an All India Official Language Seminar was organized on 29th June, 2021 at Head Office, Dwarka for the top Management and Executives of the Bank & Zonal Managers and Official Language Officers from the field in which detailed information was given on the strategy of 123, Leela app and memory based translation tool KANTHASTH.

• A two-days All India "Rajbhasha Sammelan cum Review Meeting" was organized by the Bank at Staff Training Collage, Civil Lines, New Delhi on 14th March, 2022 and 15th March, 2022 for the Official Language Officers posted in the Banks offices located in Region A and Region B and second two-days All India "Rajbhasha Sammelan cum Review Meeting" was organized by the Bank in Lucknow on 24th March, 2022 and 25th March, 2022 for Official Language Officers posted in the Banks offices located in Region B and Region C.

• Online Annual review meetings of all the Zonal Offices were organized by the Bank for Zone wise official language review, in which all the subordinate Circle Offices of respective zones also participated.

Progress made in the use of Hindi in Information Technology

• Internet banking facility was made available to the customers in 7 regional languages besides Hindi and English.

• Option of Hindi and regional languages and facility to print transaction slip in Hindi is available for customers at ATMs.

• Facility to make transactions in 10 Regional Languages apart from Hindi and English has been made available to the customers in the mobile application "PNB ONE".

• The Bank provides an option to its customers to receive banking SMS alerts in their mother tongue (Hindi, Bangla, Gujarati, Kannada, Malayalam, Marathi, Odia, Punjabi, Tamil, Telugu and Urdu) and SMS send in the language chosen by the customer.

• Banks website is in bilingual form and Hindi language option has been made available to the customers in the Banks "Pihu Chatbot".

• Every day a podcast on a Banking topic in Hindi is released by the bank for the employees.

• Online Hindi reporting of all Branches, Circles, Zones and Divisions of Head Office was done on the Official Language web portal.

• Due to COVID-19 pandemic, virtual Hindi workshops, competitions, e-webinars, e-Inspections were organized through digital platforms apart from physical mode.

• Facility is available to print Passbook, CDR/FDR in Hindi and doing service related work of staff members in Hindi through bilingual software in Finacle and HRMS.

• Trainings were given to the staff members to work in Hindi on computer and various e-Tools of Hindi.

M. PNBS SUBSIDIARIES AND REGIONAL RURAL BANKS

DOMESTIC

i. PNB Gilts Ltd: During FY 2021-22, debt market was characterised with gradual firming up of yields, with accentuated firming in the second half of the year. In the first half of the year, yields remained largely anchored as the monetary policy committee (MPC) continued with its accommodative growth-supportive stance and also undertook government securities purchases through G-SAP. During H1FY 2021-22, RBI purchased securities aggregating Rs. 1,90,000 Crore on a net basis, which helped create demand for the large scheduled government securities issuances for the year. In the second half of the year, however, yields remained largely upward bound, with Q4 witnessing a sharp spike in yields. A sharp rise in global crude oil prices and reversal of monetary policy by various emerging market and advanced economies pushed both global and domestic yields higher during Q4 FY 2021-22. The rise in yields was aggravated by higher- than-expected indicative calendar of market borrowings of State Governments/Union Territories, planned market borrowings by the Centre indicated in the Union Budget 2022-23. The cancellation of two consecutive central government bond auctions, however, tempered the hardening of domestic yields towards the close of the Financial Year.

During the year, the 10-yr benchmark yield touched a high and low of 6.95 per cent and 5.97 per cent respectively and closed at 6.86 per cent as on 31st March,2022.

Against the backdrop of deteriorating market conditions, PNB Gilts Ltd. continued to fulfil all its obligations as a Primary Dealer mandated by RBI both in Primary and Secondary market. Company posted a Profit before Tax (PBT) of Rs. 210.15 Crore during FY 2021-22 vis-a-vis PBT of Rs. 614.35 Crore during FY 2020-21. Profit after Tax (PAT) amounted to Rs. 165.71 Crore during FY 2021-22 as against Rs. 454.12 Crore during FY 2020-21. Capital adequacy remains strong with its capital to risk weighted assets ratio (CRAR) at 66.41 per cent as on 31st March, 2022 (45.58 per cent as on 31st March, 2021) well above the regulatory minimum of 15 per cent for PDs.

ii. PNB Investment Services Ltd: The Company is a profitmaking company from the very first year of its operations. During the year ended 31st March, 2022 the Company registered operational (fee-based) income of Rs. 9.59 Crore and total income of Rs. 12.10 Crore as against a fee-based income of Rs. 5.33 Crore and total income of Rs. 8.02 Crore for the year ended 31s* March, 2021. Profit before Tax during the period ended 31s* March, 2022 was Rs. 6.10 Crore as against Rs. 1.87 Crore for the period ended 31s* March, 2021.

The company operates in three verticals, namely Corporate Advisory, Merchant Banking and Security Trustee. In the Corporate Advisory Vertical, during the year PNBISL advised many marquees business groups and corporate clients on various transactions, including debt syndication, debt resolution and other corporate advisory assignments. With in-house expertise and deep understanding of select sectors, PNBISL prepared and delivered credible TechnoEconomic Viability (TEV) reports to its clients.

In Merchant Banking Vertical, PNBISL actively participated in PNBs fund-raising transactions of Qualified Institutional Placement (QIP) and Tier II Bonds. The involvement in these transactions varied from advising on compliance requirements, drafting of offer documents and marketing of the offerings.

In the Trusteeship business, despite intense competition from entrants not having long standing in the business by slashing fees, the company has been able to maintain the clients by providing quality of services. A cautious strategy has been adopted while selecting the clients, so as to ensure only credible clients are on-boarded. With its prompt and quality service as also realigning our card rates with market requirement, the company continues to add on new clients and build on its strategy to be a trusted partner of leading banks and corporates.

Going forward, the company is poised to build on its capabilities across business verticals such as credit appraisal & debt syndication services, TEV consultancy, Merchant Banking services and Security Trusteeship services to offer greater value to the parent bank and all its stake holders.

iii. PNB Cards & Services Limited: The Company has been incorporated on 16*h March, 2021 as a Non-Financial Entity for providing Business Support services related to Credit Card Business of the Bank. Currently, the company is providing its services for customer acquisition and merchant tie ups. During FY 2021-22, being the first year of operations, the company has earned revenue from operations of Rs. 2.60 Crore and Net profit after Tax of Rs. 0.13 Crore. The company will operate on feet-on-street model with its sales executives sourcing of Credit Cards in the potential market along with digital on boarding platforms for better customer experience.

• INTERNATIONAL

i. PNB International Limited (PNBIL): PNBIL continues to serve its customers in London and Midlands through network of seven branches located at Moorgate, Ilford, Wembley, Southall, Leicester, Birmingham and Wolverhampton.

Even during the COVID pandemic the Bank ensured to provide all services to customers in smooth and safe manner. During FY 2021-22, the total business of PNBIL increased from 1755 USD Million to 1825 USD Million thus showing growth of 4 per cent under challenging circumstances with healthy profitability.

The Bank continues to grow the UK based business book and diversify within the product variants in secured lending book in line with its strategy. Customer retention has been the focus for the Bank and the Bank is also developing Alternate channel to raise low cost retail deposits.

ii. Druk PNB Bank Ltd: Druk PNB Bank Ltd, Bhutan, Banking Company having its corporate office at Thimphu, Bhutan. It started its operation on 27th January, 2010, in Bhutan as the countrys fourth commercial Bank, with a component of both FDI and joint venture in the Banking Sector. Presently Bank has 8 branches and 30 ATMs spread across the country. Total Business of the DPNBL increased to to Rs. 3,125 Crore as on 31st March, 2022 from from Rs. 2,780 Crore as on 31st March, 2021 showing YoY growth of 12.41 per cent. CASA Ratio of the Bank stood at 42.27 per cent as on 31st March, 2022. Profit of the Bank has increased to Rs. 22.30 Crore as on 31st March, 2022 from Rs. 19.56 Crore as on 31s* March 2021. Paid up capital of the Bank as on 31st March, 2022 is Rs.84 Crore.

• REGIONAL RURAL BANKS (RRBs):

As on 31st March, 2022, there are 9 RRBs sponsored by the bank namely Dakshin Bihar Gramin Bank (DBGB), Patna; Sarva Haryana Gramin Bank (SHGB), Rohtak; Himachal Pradesh Gramin Bank (HPGB); Mandi; Punjab Gramin Bank (PGB), Kapurthala; Prathama UP Gramin Bank (PUGB), Meerut; Assam Gramin Vikas Bank (AGVB), Assam; Bangiya Gramin Vikas Bank (BGVB), West Bengal; Tripura Gramin Bank (TGB), Agartala and Manipur Rural Bank (MRB), Imphal.

These 9 RRBs are operating in 9 states namely Bihar, Haryana, Himachal Pradesh, Punjab, Uttar Pradesh, West Bengal, Assam, Manipur and Tripura covering 185 districts with a network of 4613 branches.

i. Total Business of sponsored RRBs as on 31st March, 2022 is Rs.1,88,493 Crore registering a YoY growth of 7.59 per cent.

ii. Deposits of RRBs are at Rs.1,21,659 Crore as on 31st March, 2022. Aggregate Deposits registered a YoY growth of 8.20 per cent. The CASA deposits of the RRBs have increased to Rs. 75,143 Crore as on 31st March, 2022 from Rs. 68,747 Crore as on 31st March, 2021 with a YoY growth of 9.30 per cent.

iii. The advances of the RRBs as on 31st March, 2022 stood at Rs. 66,834 Crore with a YoY growth of 6.51 per cent.

iv. As per RBI guidelines it is mandatory for RRBs to meet the regulatory requirement of CRAR 9 per cent. The RRBs attaining CRAR over and above the regulatory requirement are HPGB (9.47 per cent), PGB (15.56 per cent), PUPGB (13.49 per cent), SHGB (14.10 per cent) and TGB (30.87 per cent). The RRBs having CRAR less than the regulatory requirement are AGVB (7.59 per cent), DBGB (8.35 per cent) MRB (7.24 per cent) and BGVB (8.89 per cent) As an outcome of recapitalization assistance to the RRBs by Centre/ States / Sponsor Bank and improvement in operational efficiency these RRBs are expected to achieve CRAR of 9 per cent in the coming years.

v. The sponsored RRBs are in profit (except DBGB Patna and MRB Imphal) and combined Net profit of the RRBs during the FY 2021-22 is Rs. 184 Crore.

vi. The RRBs have shown a remarkable growth of 59.85 per cent in enrollment under Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY).

N. AWARDS AND ACCOLADES

Banks effort have been recognized at various platforms. The Bank has been conferred the following awards for initiatives taken in various fields for the year 2021-22:

• Special Commemorative Award FY 2021 by NABARD Best PSU in the fields of Agriculture Credit, Micro Finance, Financial Inclusion and Technology Adoption.

• Finacle Client Innovation Award by Infosys- Runner Up for PNBs path breaking "Process Innovations".

• ASSOCHAM Runner Up under Digital service under PSB Merged Category

• EASE 3.0 AWARDS

o Runner up under Theme 3 Institutionalizing Prudent Banking

o Runner up under Theme 4 Governance and Outcome Centric HR

o Amongst Top 3 Banks in Improvement from March baseline

• The Asian Banker Financial Technology Innovation Award 2021 "Best Core-banking Technology Implementation.

• Rajbhasha Kirti Award for the year 2020-21, promoting Official language Hindi.

• 2nd highest percentage of digital payment Transactions "Utkarsh Puraskar" Digi-Dhan Award 2019-20 by Ministry of Electronics & Information Technology

• 2nd Best Bank in SHG Credit Linkage under NRLM scheme by Ministry of Rural Development (MoRD).

• 1st position amongst peer banks under Agriculture Infrastructure Fund (AIF) campaign launched by Ministry of Agriculture and Farmers Welfare.

• 3rd Position for its performance in implementing the Government scheme PMEGP for 2020-21.

• Best MSME Bank (PSU) in 8*h MSME Excellence Awards by ASSOCHAM

• Felicitated by Pension Fund Regulatory and Development Authority (21.12.2021) for contribution towards NPS Diwas (01.10.2021).

• "Global Banking & Finance Awards 2021" in the category "Initiative Core Amalgamation" jointly with M/s Infosys.

• Award of Excellence in Campaign Atal Pension Yojana (APY) Leadership Capital launched by Pension Fund Regulatory & Development Authority (PFRDA)

• Dr. Ambedkar Business Excellence Awards under the Category "Most Significant Lender Supporting SC Entrepreneurs" by Ministry of Social Justice and Empowerment.

O. FUTURE BUSINESS PLAN OF THE BANK

Bank has been able to survive in all the tough conditions successfully with well-defined strategy. Bank during the year continued to provide superior banking experience to its customers. Bank also successfully completed its amalgamation exercise through smooth integration of people and processes within timeframe.

There has been immense opportunities awaiting the Banking sector going forward. First of all the Bank will keep its focus on the diversified credit growth as it is expected that the huge demand will erupt from MSME and Retail segment in FY 2022-23. With the expected pick up in the credit growth, interest income may also see an uptick. CASA growth is also one of the areas where the Bank will remain focused for higher profitability. The Bank would scale up collaborations and partnerships for better results.

Asset quality will continue to be the buzzword for us and the Bank will take up action oriented plans to keep the NPAs low so that the capital remains available for business growth. Strong recovery measures will be driving the improvement in Asset quality for FY 2022-23 as well. The thrust area of the Bank would be credit monitoring through proactive steps on the basis of various early warning signals and address the stress upfront.

On Digitalization front, Bank will continue to build upon strong technological platforms and innovate to provide convenient banking services to all the customers especially tech savvy ones. Bank will tread the path with well delineated strategy so that the potential of the branches may be utilized to the maximum.

Bank considers its HR as its most important resource to drive the business growth and will continue to up skill it for holistic HR Transformation. Further, Customer Service and Customer convenience to be on the priority and Bank will ensure that customer needs are responded promptly and in a positive manner. It shall be the endeavor of the Bank to remain a customer friendly bank with minimal grievances.

P. BOARD OF DIRECTORS

Board of the Bank compromises of 11 Directors including 05 whole time Directors i.e. One Managing Director & CEO and four Executive Directors as on 31st March, 2022. During the Financial Year 2021-22, the following changes took place in the composition of Board of Directors:

• Shri Agyey Kumar Azad completed his tenure as Executive Director on 30.04.2021.

• Dr. Asha Bhandarker, Shareholder Director, completed her tenure on 11.09.2021.

• Dr. Rekha Jain, has been elected as Shareholder Director on the Board of Bank w.e.f. 12.09.2021.

• Shri Kalyan Kumar has been appointed as Executive Director on the Board of Bank w.e.f. 21.10.2021.

• Shri Pankaj Joshi has been appointed as Part time NonOfficial Director on the Board of Bank w.e.f. 21.12.2021.

• Shri Sanjeev Kumar Singhal has been appointed as Part time Non-Official Director on the Board of Bank w.e.f. 21.12.2021.

• Shri CH S.S. Mallikarjuna Rao completed his tenure as MD & CEO on 31.01.2022.

• Shri Atul Kumar Goel has been appointed as MD & CEO w.e.f. 01.02.2022.

• Shri Vivek Aggarwal, RBI Nominee Director, completed his tenure on 25.02.2022.

• Shri Anil Kumar Misra has been appointed as RBI Nominee Director on the Board of Bank w.e.f. 25.02.2022 (After Business Hours).

The Board wishes to place on record its appreciation for the valuable contribution made by Shri Agyey Kumar Azad (Executive Director), Dr. Asha Bhandarker (Shareholder Director), Shri CH S.S. Mallikarjuna Rao (MD & CEO) and Shri Vivek Aggarwal (RBI Nominee Director).

Q. DIRECTORS RESPONSIBILITY STATEMENT

The Directors confirm that in the preparation of the annual accounts for the year ended 31st March, 2022:

• The applicable Accounting Standards have been followed along with proper explanation relating to material departures, if any;

• The accounting policies, framed in accordance with the guidelines of the Reserve Bank of India, were consistently applied;

• Reasonable and prudent judgment and estimates were made so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit of the Bank for the year ended 31st March, 22.

• Proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of applicable laws governing banks in India, and;

• The accounts have been prepared based on the principle of "going concern".

R. ACKNOWLEDGEMENT

The Board expresses thanks to the Government of India, Reserve Bank of India, Securities and Exchange Board of India, Stock Exchanges, Banks customers, Public and all other Stakeholders for valuable support, continued patronage and confidence reposed in the Bank.

The Board also placed on record its appreciation for the valuable contribution made by the members of the Banks staff at all levels and looks forward to their continued involvement in achieving the future goals.

For and on behalf of Board of Directors

Atul Kumar Goel

Managing Director & CEO.