punjab national bank share price Management discussions


MANAGEMENT DISCUSSION & ANALYSIS

A. Industry Structure & Developments

The financial year 2021-22 confronted many challenges like recurring and devastating COVID waves, supply chain disruptions and recently elevated inflationary pressures. The economy strived to expand but was time and again lashed by COVID induced lockdowns.

The government and the regulators immediate response in providing stimulus packages and relief measures to the vulnerable sections of the society has helped alleviate the stress. Consequently, Indian economy has shown resilience to macroeconomic shocks and retains the tag of worlds fastest growing economy. As per the provisional estimates released, Indian economy witnessed real GDP expansion of 8.7 per cent in FY 2021-22 and expected to grow at 7.2 per cent in FY 2022-23 after contracting in FY 2020-21. This implies that overall economic activity has recovered past the pre-pandemic levels. Though, the geopolitical tension between Russia and Ukraine pose fresh challenges.

The Banking industry in India has historically been one of the most stable systems globally, despite global upheavals. Banks resilience was tested by the pandemic in an unforeseen way but banks have emerged stronger. Banks in FY 2021-22 witnessed improved asset quality, stronger capital and provision buffers and increased profitability. The credit and deposit growth accelerated in FY 2021-22.

During FY 2021-22 credit off-take has taken place in almost all major sectors compared to FY 2020-21. Industrial sector credit turned positive after contracting over the previous two years.

Timely restructuring of loans for the entities impacted by the second COVID-19 wave under Resolution Framework (RF) 2.0 helped them sail through the downturns.

Scheduled Commercial Banks (SCBs) continued to bolster their capital through a mix of internal accruals and capital raising, including Tier I and II bonds, resulting in the capital to risk-weighted assets ratio (CRAR) rising to new peak levels.

The return on assets (RoA) and return on equity (RoE) maintained their rising profile, with Public Sector Banks (PSBs) recording multi-year highs. The cost of funds and yield on assets declined across bank groups to reach their lowest levels in the last two decades.

National Asset Reconstruction Company Ltd (NARCL) or bad bank was incorporated in July 2021 by the Reserve Bank of India (RBI) for effective management and resolution of the stressed assets. The initiative along with Insolvency and Bankruptcy Code (IBC) and Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) will further support the banks to clean up their balance sheets and prepare them to finance fresh projects.

The government has consistently strived to promote financial inclusion through various initiatives targeted to bring the countrys under-banked population under the banking gamut.

The banking sector is expected to have positive growth in FY 2022-23 with an uptick in the economic activity. The economic growth in FY 2022-23 is projected to be in the range of 7 - 8 per cent, with RBI projecting the growth at 7.2 per cent.

Going forward, banks need to take into account the tectonic shifts emerging in the financial system - phenomenal growth in digitization, advent of innovative products, disruption by Fintech players, fusion of technologies and proliferation of increasingly intertwined ecosystems.

B. Opportunities

The banking sector is pivotal to the economic growth of India. The economy is at a crucial stage where it is recouping from the COVID shock and is gradually treading onto the growth path. Banks have strong fundamentals and are well positioned to play the part.

Access to credit and banking products has improved over the past decade on the back of sustained efforts by the government. Increase in working population and growing disposable income will further raise the demand for banking and related services.

The government is keen to drive cashless transactions, and has encouraged initiatives to improve payment infrastructure, leveraging the internet and mobile technology. Banks have ramped up their efforts to expand their footprints in this platform since there has been continued uptick in online transactions and it is likely to continue even after the pandemic. Mobile, internet banking and extension of facilities at ATMs will also help improve the operational efficiency.

The digital payments system in India has evolved the fastest amongst the countries. It is evident from the record number of UPI transactions per month.

The opportunities and potential to grow digitally are virtually unlimited, especially in tier-2 towns and beyond. There is still a huge gap between the urban and rural India, however, the gap itself is an opportunity map.

The opportunities are unlimited if the Banks collaborate with NBFCs and Fintechs especially for middle and lower tier cities. Banks will benefit as they will get access to new customers, can make use of the Fintechs digital capabilities and provide a better digital experience to the customers. The Fintech can benefit via the banks safety, trust people have on the banking structure and the risk analytics of the banks. Thus, the respective comparative advantages of the banks and NBFCs can be leveraged in a collaborative effort to raise the financial reach.

An increase in consumerism, the rising penetration of e-commerce and the formalisation of the economy will further propel the use of cards and digital wallets.

Data is considered as the new oil in todays scenario. Today, customer data is not just limited to bureaus, credit agencies and bank statement but can be easily derived from the mobile phones each one has in its pocket. The deluge of data which is coming and the use cases are not just restricted to credit but across the customer lifecycle in terms of hyper personalizing the experience.

According to various agencies, credit growth is expected to be in double digits in FY 2022-23. The credit growth is expected to rise on the back of increased investment and consumption demand in the economy as growth rallies.

Capacity Utilisation (CU) in the manufacturing sector is continuously on the rising trend since the beginning of the FY 2021-22. In Q1 FY 2021-22, Q2 FY 2021-22 and Q3 FY 2021-22, CU was 60.0 per cent, 68.3 per cent and 72.4 per cent respectively. As capacity utilization rises, the corporates will lend more to invest in fresh projects.

Further, National Infrastructure Pipeline (NIP) along with PM Gati Shakti, a transformative approach for economic growth and sustainable development with an aim to break departmental silos, will bring in more holistic and integrated planning which will further speed up project execution.

This will lead to enhance credit demand particularly in longer term loans.

C. Threats

Even as the outlook of credit growth looks positive in FY 2022-23 also, the current inflation trends could play a spoilsport as rate hikes could have a dampening impact on credit demand just as the economy has been turning round the corner.

Banks will have to be proactive in managing their deposits and lending rates so as to maintain the margins amid volatile interest rate scenario.

New kinds of FinTechs and BigTechs have entered the banking landscape and have the potential to disrupt the market. Going ahead, the biggest challenge for banks lies in surviving the digital disruption.

Banks instead of competing, should collaborate with them for risk sharing and facilitating the synergies between banks and non-bank lenders.

Business Intelligence Units and setup is required to create data driven decision making models as it will provide competitive advantage to the Bank. Data should be core to the strategy of the Bank and should not just be limited as an enabler.

Cyber risk is a greater risk given the greater adoption of digital modes. There is a need to enhance investment to mitigate the cyber risk.

Banks are also facing threat from the continuously evolving digital assets like crypto currencies, smart contracts, e-wallets etc. Banks will have to think and strategize to stay modernised.

D. Segment-wise or Product wise Performance

The performance of major business segments of the Bank is analyzed below:

i. Resource Mobilization

The domestic deposits of the Bank increased to Rs. 11,25,049 Crore as at the end of March 2022. Savings Deposit increased to Rs. 4,51,680 Crore, while Current Deposit increased to Rs. 81,974 Crore. The share of CASA deposit to domestic deposit increased to 47.43 per cent as at end of March 2022 from 45.48 per cent as at end of March 2021.

In the current banking scenario of mounting competition, Retail Banking products play a major role in enhancing the business growth of the Bank. In order to remain competitive, Bank has identified anchor products and special focus is given to mobilize more business under this segment. The deposit under customer specific segment viz PNB mySalary account increased to Rs. 22,227 Crore, PNB Power Savings (for women) account increased to Rs. 8,482 Crore and PNB Rakshak Plus increased to Rs. 2,031 Crore under CASA segment.

Further, under Term Deposit, PNB Sugam Term Deposit scheme has been identified as an anchor product, where the deposit increased to Rs. 2,53,519 Crore from the level of Rs. 2,07,975 Crore in the previous year.

New Schemes:

Bank has launched following new deposit schemes for various segments of the society:

a. PNB Select Saving Scheme: For Gen Y i.e. 25-40 years of age.

b. PNB CA-POS (Current Account- Point of Sale) Scheme: Launched with two variants targeting Tier 1-2 & Tier 3 to Tier 6, North East and J&K.

c. PNB Twin (CA+SF) Account: Dual benefit of Saving & Current account under one scheme.

ii. Credit Deployment and Delivery

Gross Domestic Advances of the Bank stood at Rs. 7,59,214 Crore in March 2022. Fresh Sanctions with external rating A and above formed a major part of the sanctions. Similarly, Bank has improved its quality of exposures as indicated by a decline in Credit Risk-Weighted Assets (RWA) to Rs. 4,88,969 Crore as at the end of March 2022.

Corporate Credit organizational structure focused on delivery of credit through 2 tier of structure equipped with skilled staff has been created to reduce overall TAT, to improve efficiency of appraisal, provide scope for focused monitoring of accounts along with service delivery. This 2 tier structure is being catered by 16 Extra Large Corporate Branches (ELCBs)/ Large Corporate Branches (LCBs), opened in different parts of the country. These 16 ELCBs/ LCBs constitute 44.51 per cent of total domestic credit.

A sum of Rs. 1.81 Lakh Crore has been sanctioned (fresh/ enhancement) during FY 2021-22 by different Credit Approval Committees at Head Office.

iii. Retail Credit

During the FY 2021-22, Total Retail Credit portfolio of the Bank increased to Rs. 1,39,593 Crore. Out of this, the Core Retail Credit has increased to Rs. 1,19,204 Crore in FY 2021-22.

Within the Core Retail Credit Portfolio, Housing Loan increased to Rs. 73,805 Crore, Car/Vehicle Loan increased to Rs. 12,615 Crore and the Mortgage Loan was at Rs. 12,232 Crore.

New Initiatives:

1. Bank is offering one of the best-in-class rate of interests in various retail segments like Home loans to all fresh and takeover cases, Vehicle loans, Education loans and Personal loans.

2. Tie-ups with reputed builders and property search sites for lead generation.

3. Under Personal Loan segment in order to meet the emergent needs of our existing customers new segment has been added i.e personal loan to professional with enhanced amount i.e upto Rs. 20 Lakh (from existing Rs. 10 Lakh) and longer repayment period i.e upto 72 months (from existing 60 months).

4. PNB Home Loan-Composite Loan scheme has been launched to meet the need for composite loan of Land and construction of House.

5. A new scheme PNB Green Car has been launched offering attractive rate of interest and longer repayment period.

6. Bank is having Tie Ups for Car loans with 8 Car manufacturers namely Maruti, Honda, Tata Motors, Mahindra & Mahindra, Force Motors, Toyota, Hyundai and M G Hector & thereby covered 85 per cent of market share for Car sales market.

7. In order to increase Gold Loan bucket, rate of interest has been made competitive.

Digital Initiatives:

1. In order to make pre-approved Personal Loan digital journey more user friendly, the process has been made more concise and is now made available in PNB ONE platform.

2. End to end digital journey of pre-approved Personal Loan to pensioners have been started.

iv. Priority Sector

The outstanding position of Priority Sector, Agriculture and sub-sectors as on 31st March, 2022 is as under:

(Amt. Rs. in Crore)
Outstanding Position 31.03.2022
Priority Sector Credit 2,83,712
Out of which:
Loan to Agriculture Sector 1,22,708
Loan to Small & Marginal Farmers 65,979
Loan to Micro Enterprises 53,963
Loan to Weaker Sections 90,002

Goals Achievement: Banks achievement under National Goals of Priority Sector, Agriculture and other sub-sectors for FY 2021-22 are as under:

Achievement Of National Goals (Quarterly Annual Average Basis

Percentage to Adjusted Net Bank Credit (ANBC) Target (National Goal in Percentage) 31.03.2022
Priority Sector Credit 40.00% 42.42%
Out of which:
Loan to Agriculture Sector 18.00% 18.35%
Loan to Small & Marignal Farmers 9.00% 9.87%
Loan to Micro Enterprises 7.50% 8.07%
Loan to Weaker Sections 11.00% 13.46%

Performance Highlights of FY 2021-22:

• Credit to Priority Sector stood at Rs. 2,83,712 Crore as on March 2022. The percentage of Priority Sector Advances to ANBC is 42.42 per cent as against the prescribed National Goal of 40 per cent.

• Credit to Agriculture sector stood at Rs. 1,22,708 Crore as on March, 2022. The percentage of Agriculture Advances to ANBC is 18.35 per cent against the prescribed National Goal of 18 per cent.

• Loans to Small/Marginal Farmers (SF/MF) stood at Rs. 65,979 Crore as on March 2022. The percentage of advances to SF/MF to ANBC is 9.87 per cent as against the prescribed National Goal of 9 per cent.

• Credit to Micro (PS) Enterprises stood at Rs. 53,963 Crore as on March 2022. The percentage of advance to Micro (PS) Enterprises to ANBC is 8.07 per cent as against the prescribed National Goal of 7.50 per cent.

• Advances to Weaker Section stood at Rs. 90,002 Crore as on March 2022. The achievement is 13.46 per cent as against National goal of 11 per cent of ANBC.

• Bank credit to Minority Communities stood at Rs. 27,072 Crore, as at the end of March 2022.

• As at the end of March 2022, Bank credit to SC/ST Community stood at Rs. 6,664 Crore.

Strategies to enhance Agriculture:

• Focus on centrally sponsored infrastructure development schemes like Agriculture Infrastructure Fund, Animal Husbandry Infrastructure Development Fund etc.

• Relaxation in interest rates, margin and security norms.

• Customer Journey Digitization through end-to-end digital Kisan Credit Card (KCC) and Kisan Tatkal.

• Agri-tech partnership for lead generation.

• Intensive financing under cluster approach.

• Thrust on Agri Loan against Gold Ornaments/Jewellery.

• Conversion of KCC to Kisan Gold.

• Focus on Financing under Self Help Groups (SHGs).

• Using Business Correspondent Network for Driving Credit.

Corporate Social Responsibility (CSR) Activities:

Farmers Training Centres (FTCs): Bank has established 12 Farmers Training Centres. The FTCs are providing free of cost training on agriculture & allied activities and also for computers, cutting & tailoring/embroidery and entrepreneurship development programs. Since inception, FTCs have imparted training to 16,44,102 persons by conducting 55,017 training programs. These Training Centres have been equipped with the Mobile Van having Soil testing facilities at the farmers fields and LED for audio visual display of informative video clips to the farmers. The Bank spent Rs. 475.72 Lakh under this during FY 2021-22.

Rural Self Employment Training Institutes (RSETIs):

There are 76 RSETIs (under aegis of MoRD) and 2 Rural Development Centres (PNB initiatives) operating in India which are engaged in providing training to rural population and their families for skill up-gradation to undertake self-employment ventures/jobs. During the FY 2021-22, 41,718 persons were trained in these centers out of which 27,380 belong to BPL families and 32,948 were women. Total number of trained candidates since inception is 4,92,418 out of which 2,06,241 were from BPL families and 3,15,856 were women. Our RSETIs are focusing for settlement of participants by ensuring adequate credit for inclusive growth. Total settled candidates are 3,32,028 since inception. The Bank spent Rs. 2,753.97 Lakh under this during FY 2021-22.

Financial Literacy Centres: Bank has 175 Financial Literacy Centers. Total number of enquiries made during the period from 1st April, 2021 to 31st March, 2022 is 2,20,694. Total number of seminars/programmes/camps conducted by FLCs on Financial Education, Preventive Counselling and Customer Rights from 1st April, 2021 to 31st March, 2022 is 7,387 and number of persons attended these programs are 2,94,473.

PNB Vikas Scheme: The objective of PNB VIKAS is to develop the adopted village in a holistic manner, which includes their economic development, infrastructure development and other aspects of human development e.g. sanitation, drinking water supply, education, electricity, health, etc. besides access to credit, digitalization and Financial Literacy. Presently, Bank has adopted 295 villages under the scheme.

• PNB LADLI: The Scheme is meant for popularization of education among girls of Rural/Semi Urban areas. Under the scheme, Bank is providing for education inputs of Rs. 2,500 in lump sum and Rs. 100 per month as pocket allowance to 10 needy girl students of each identified village. Selected girls will continue to get support every year till they complete 12th class. During FY 2021-22, Rs. 8.47 Lakh was distributed amongst 435 girl students.

So far, Bank has distributed Rs. 184.34 Lakh to 10,126 girls under this scheme upto 31st March, 2022.

• PNB KISAN BALAK SHIKSHA PROTSAHAN YOJANA:

The Scheme has been launched to provide financial assistance to the students of poor agriculture borrowers (comprising of small farmers, marginal farmers, tenant farmers, oral lessees and agriculture labour) and are eligible provided their loan account is running regular. Since inception, Rs. 47.98 Lakh has been given as incentive to 1,553 students up to March 2022 under the scheme.

v. Micro, Small and Medium Enterprises (MSME)

The MSME sector forms the backbone of our industrial sector and is an important growth engine for the economy that promotes entrepreneurship, inspires innovation and boosts employment generation.

As at the end of the March 2022, credit to MSME segment stands at Rs. 1,25,032 Crore. The advance to Micro and Small Enterprises stood at Rs. 98,067 Crore with outstanding in Micro segment at Rs. 54,643 Crore.

Mudra: The budget allotted under PMMY for FY 2021-22 was Rs 13,600 Crore. Bank has achieved 108.49 per cent of its annual budget despite the impact of COVID-19.

1. Details of initiatives being taken to boost MSME business:

1.1. COVID-19 related initiatives taken by the Bank/GoI and status of implementations:

a. Guaranteed Emergency Credit Line (GECL) scheme: The scheme was implemented in 4 phases (GECL 1.0, 2.0, 3.0 and 4.0) to support the various business activities affected by COVID-19 pandemic. As on 31st March, 2022, Bank has sanctioned 4,48,029 accounts amounting to Rs. 20,616 Crore, out of which 2,02,580 accounts have been disbursed amounting to Rs. 17,887 Crore. Further, GoI has extended the validity of the scheme upto 31st March, 2023. This extension will provide further credit support to the MSMEs to resume their operations.

b. Credit Guarantee Scheme for Subordinate Debt (CGSSD) for Stressed MSMEs: Ministry of MSME, Government of India through CGTMSE has introduced Credit Guarantee Scheme for Subordinate Debt (CGSSD) to provide personal loan to the promoters of Stressed MSMEs for infusion as equity/quasi equity in the business, eligible for restructuring as per RBI guidelines for restructuring of stressed MSME advances. As on 31st March, 2022, 238 accounts amounting to Rs. 20.65 Crore have been sanctioned, out of which 175 accounts amounting to Rs. 15.20 Crore have been disbursed. The validity of the scheme has been extended further upto 31st March, 2023.

c. PM Street Vendors AtmaNirbhar Nidhi (PM

SVANidhi): This is a Central Sector Scheme launched by Ministry of Housing and Urban Affairs formalized for Street vendors providing finance upto Rs 10,000 which opened up new opportunities to this sector to move up the economic ladder. The scheme was launched on 2nd July, 2020 and it is available to all street vendors engaged in vending in urban areas as on or before 24th March, 2020.

In addition to this, Ministry of Housing and Urban Affairs has extended the benefit of existing scheme to provide an enhanced loan (2nd tranche of Rs. 20,000) to PM SVANidhi beneficiaries on timely repayment of earlier loan under PM SVANidhi Scheme. As on 31st March, 2022, 2,21,780 applications have been sanctioned out of which 2,15,766 have been disbursed.

d. Interest Subvention Scheme on Prompt Repayment of MUDRA-Shishu Loan:

Small Industries Development Bank of India (SIDBI) has formulated Interest Subvention Scheme of 2 per cent on prompt repayment of Shishu loan extended under Pradhan Mantri Mudra Yojana (PMMY). As on 31st March, 2022, Rs 14.30 Crore has been credited in 3,57,630 accounts towards interest subvention.

e. Restructuring of Advances- Resolution Framework

2.0 (RBI Notification Dated 05.05.2021): In view of the uncertainties created by the resurgence of the COVID-19 pandemic, RBI vide its notification dated 5th May, 2021 extended the captioned facility for restructuring existing loans without any downgrade in the asset classification. Accordingly, Bank had approved the guidelines prescribed by RBI for Resolution of COVID-19 related stress in MSMEs.

Bank is making all out efforts to reduce the stress in MSME segment through recovery as well as through implementation of Resolution Framework 2.0 in the eligible units which falls into NPA or under stress. As on 31st March, 2022, 1,59,363 accounts amounting to Rs. 8,371.91 Crore have been restructured.

1.2. New initiatives:

a. Cluster Based Financing: Bank has adopted the Cluster based lending approach and 86 clusters have already been approved with customized schemes inclusive of concessional pricing, service charges, relaxed lending norms etc. Bank has sanctioned 908 accounts amounting to Rs. 2,806.85 Crore as on 31st March, 2022.

b. Partnership-led growth: Bank is endeavouring to increase market presence and expand the outreach through entering into partnership agreement with different market players. The details are as mentioned below:

i. Tie Ups with Original Equipment Manufacturers

(OEMs) for Commercial Vehicle/Construction Equipment (CV/CE):

Bank has tie-up arrangement with 12 reputed Commercial Vehicle/Construction Equipment Manufacturers to position the Bank as preferred financier for financing customers intending to purchase the vehicles of the aforementioned companies. Further, Bank is under process of having more such tie up arrangements.

Under this arrangement, 2112 accounts have been sanctioned amounting to Rs. 179.70 Crore as on 31st March, 2022.

ii. Tie-up arrangement for Supply Chain financing to the dealers of Reputed Manufacturing Companies (RMCs): Bank has entered into tie up arrangement with M/s Indian Oil Corporation Ltd, M/s Ashok Leyland, M/s Patanjali Ayurved Ltd, M/s Action Construction Equipment Ltd, M/s Daimler India Commercial Vehicles Pvt Ltd. to cater to the financing needs of their dealers. As on 31st March, 2022, 1,008 accounts amounting to Rs. 680.90 Crore have been sanctioned under the arrangement.

iii. Tie-up with Fin-Tech Companies: For end-to-end lending (sourcing to collection & recovery), Bank has made Tie-up with M/s Atyati Technologies Private Ltd for Joint Liability Group (JLG), with M/s Basix Sub-K for Joint Liability Group for Micro Finance (JLM) and with M/s Integra Micro System Pvt. Ltd for PM SVANidhi.

iv. Multi-channel leads:

Under the new organizational structure, the major role of the branches is to provide good customer service and give quality business leads to credit verticals. Being the first point of contact, Branches shall be followed up by the Circles/Zones to provide good number of quality & convertible leads.

v. PNB Pride: Bank has developed application PNB Pride with a view to enhance the monitoring mechanism and Lead management through the field functionaries.

c. Analytical based offers: Bank has defined certain business rules for analytical based credit offering to our existing customers. Leads are generated based on transaction history, GST data, past relationship with the customers, repayment history etc. Such analytical leads are offered to the prospective borrowers through SMS, inviting them for filling Online Loan Application for MSME Loan through WEBLENS available in corporate website www.pnbindia.in, which shall be routed to PNB LenS and marked to the branch preferred by the prospective borrower.

d. Digital channels: Focus on lead generated through other digital channels like SMS, Missed call, Call Centre, ATM, Website, Mobile Banking etc. is also being made.

e. Lending through Treds Platform: TReDS is an institutional mechanism set up for financing of trade receivables of MSMEs from corporate and other buyers including Government Departments and Public Sector Undertakings (PSUs). All the corporates having turnover of more than Rs.500 Crore are to be compulsorily on-boarded on TReDS platform. Bank uses all the three platform of TReDS i.e. RXIL, M1xchange & A.Treds. A centralized Hub at Delhi has been established to undertake operations on TReDS platform effectively. 2207 Bills were outstanding as on 31st March, 2022, amounting to Rs. 767.24 Crore.

f. Simplification/Launching of new schemes/Sector specific schemes such as:

i. Health Care Segment-

• PNB Jeevan Rakshak

• Loan Guarantee scheme

• Sanjeevani

ii. Cash Flow based lending- PNB Tatkal

iii. GST Return based Lending- GST Express Loan Scheme

iv. MSME Flagship scheme- MSME Prime Plus Scheme

v. Hotel Industry- PNB Satkar Scheme

vi. State specific schemes-

• PNB Shikara & Houseboat Scheme for Kashmir valley

• Mukhya Mantri Saur Swarojgar Yojna for Uttarakhand State

• Mukhya Mantri Udyam Kranti Yojna for Madhya Pradesh

• Mukhya Mantri Gramin Path Vikreta for Madhya Pradesh

• Indira Gandhi Urban Credit Card Scheme for Rajasthan State

vii. Transport Sector- PNB Transport Scheme for financing commercial vehicles

viii. Sustainable Alternative Towards Affordable

Transportation (SATAT)- PNB Compressed Bio Gas (CBG)

g. Launch of MSME Sugam Rin Campaign: To augment the business under cash flow based lending schemes and tie up arrangements with vehicle/equipment manufacturers, above mentioned campaign was launched for the period 1st February, 2022- 15th March, 2022. Total 1,764 accounts amounting to Rs. 654.44 Crore have been sanctioned under the campaign.

1.3. Digital Initiatives:

a. Extensive use of PNB LenS: Bank has developed/ customized IT based solution i.e. PNB LenS-The Lending Solution for loan management. After implementation of Loan Management System (LMS), assessment process is standardized which strengthen the credit underwriting. All Mudra and MSME loans (fresh/renewal/enhancement/review) up to Rs.25 Crore can be processed using PNB LenS. In total 1,37,943 applications (MSME+Mudra) have been sanctioned amounting to Rs.28,987 Crore from 1st April, 2021 to 31st March, 2022.

b. Launch of e-RENEWAL Scheme: In order to increase efficiency of the appraisal process, reduce TAT and provide ease to small borrowers, a system for automatic renewal of credit facilities is implemented by the bank for working capital credit facilities having exposure upto Rs.10 Lakh. The process will be done on the pre-defined business rules and there will be no need to prepare process note/other documents. It will catalyze the efficiency of the appraisal process by reducing TAT and provide ease to small borrowers. As on 31st March, 2022, 17,087 accounts amounting to Rs.411.06 Crore have been e-renewed.

c. Launch of PNB e-Mudra (Shishu) Scheme:

To meet out credit need to the Micro and Small entrepreneur through Digital platform, which will be straight through process, e-Mudra Scheme for loan upto Rs. 50,000 has been implemented and made live. The module has rule based processing & sanctioning, which is completely system driven. As on 31st March, 2022, 724 loan cases journey has been completed successfully.

d. Psbloansin59minutes.com - A portal for in-principle approval for MSME loans upto Rs. 5 Crore within 59 minutes is in place in the name of psbloansin59minutes. com. The Bank has on-boarded on this portal and it has been made live. Further, Bank has also on boarded for Mudra loans on the Mudra Portal launched by M/s Online PSB Loans Ltd. Performance under this segment of business has remained good for the Bank. We have already configured all our flagship MSME products on this portal to maximize in-principle sanctions. The customized product for Mudra borrowers under psbloansin59minutes portal commenced w.e.f. March 2020.

As on 31st March, 2022, 43,263 applications have been disposed out of 46,944 received for MSME & MUDRA loans.

2. Progress on co-lending model of loans with NBFCs:

The RBI vide circular dated 5th November, 2020 superseded coorigination of loans to a new scheme "Co- Lending Model" (CLM) and revised the scheme to improve the flow of credit to the unserved and underserved sector of the economy and make available funds from the banks and greater reach of the NBFCs. Bank has entered into tie up arrangement with M/s IIFL Finance Ltd, M/s Lendingkart Finance Ltd, M/s Paisalo Digital Ltd & M/s Vedika Credit Capital. As on 31st March, 2022, 1,002 accounts amounting to Rs. 47.28 Crore have been sanctioned.

3. Awards received during the quarter:

a. Best MSME Bank (PSU) to PNB in 8th MSME Excellence Awards & Summit organized by ASSOCHAM.

b. 3rd Position in implementing Prime Ministers Employment Generation Programme (PMEGP) by Khadi & Village Industries Commission.

vi. Financial Inclusion

Bank has been the pioneer in taking initiative in the area of financial inclusion. Bank is providing Business Correspondents (BCs) services since 2012 & implementing comprehensive Financial Inclusion Program through effective utilization of BCs in Sub Service Area (SSA) & non SSA. SSA is a cluster of few villages and is linked to one base branch of the Bank.

a. Bank has implemented Pradhan Mantri Jan Dhan Yojana (PMJDY) and other financial inclusion services through BCs on PAN India basis. Overdraft facilities up to Rs. 10,000 in PMJDY accounts provided to eligible account holders (age group 18-65).

b. Biometric based Aadhar seeding and authentication at branches.

c. Social security schemes, i.e. Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), Pradhan Mantri Suraksha Bima Yojana (PMSBY) and Atal Pension Yojana (APY) facilities, are available at BC locations as well as branches and through internet banking. The Progress of Social Security Schemes till date is as under:

• PMJJBY: As on 31st March, 2022, 43.23 Lakh customers enrolled.

• PMSBY: As on 31st March, 2022, 180.64 Lakh customers enrolled.

• APY: As on 31st March, 2022, 20.10 Lakh customers enrolled.

At present, Bank is providing basic banking services through 15,719 BC Agents/Bank Mitras (PAN India) in Rural, Semi-Urban, Urban and Metro centres depending upon the requirement of the Bank. The BCs Agent/Bank Mitra use Micro ATM/Laptop/Desktop/Mobile/Tab etc. for providing the banking services. At present following services as per EASE agenda of Department of Financial Services (DFS) is available at BC locations through Kiosk Banking Solution:

i. Savings Account Opening

ii. Term Deposit Receipt (TDR)/ Recurring Deposit (RD) opening, Renew TD/RD

iii. Cash Deposit (own bank)

iv. Cash Withdrawal (on us), Cash withdrawal (off us)

v. Fund transfer (own bank), Fund transfer (other Bank-Aadhaar Enabled Payment System (AEPS)/RuPay card)

vi. Immediate Payment Service (IMPS), National Electronic Funds Transfer (NEFT), Indo-Nepal Remittance

vii. Balance enquiry (own bank), Balance enquiry (other bank)

viii. Apply for RuPay debit cards, Block debit card

ix. Enrol for social security schemes i.e. micro accidental death insurance (PMSBY), micro life insurance (PMJJBY), pension scheme (APY)

x. Aadhaar seeding

xi. Self Help Group (SHG) & Joint Liability Group (JLG): For formation & promotion, including credit linkage

xii. Passbook update, Mini statement

xiii. Cheque collection

xiv. Request new cheque book, Stop payment of cheque, Cheque status enquiry

xv. Request for SMS alert / email statement (registered mobile number/e-mail).

xvi. Bharat Bill Payment System (BBPS)

xvii. Recovery/Collection up to bank approved limits.

E. Outlook

Gross Domestic Product (GDP) as per the provisional estimates for FY 2021-22 released by National Statistical Office (NSO) is 8.7 per cent. The recoup of contact-intensive services and rising discretionary spending is leading private consumption to regain its momentum. Because of the monsoon forecast, the agricultural prospects are brighter too. Along with this, even the investment cycle show signs of revival. The exports and imports are also robust compared to previous years. As regards banking sector, it has seen downward trend in NPAs in FY 2021-22 which shall give boost to the credit offtake as capital will remain available for productive utilisation. However, challenges in the form of geo political tensions, elevated commodity prices and slowing external demand may remain as a barrier towards sustained and inclusive growth of the economy.

F. Risks & Concerns

Risk is integral part of the Banks business operations. Bank is exposed to major risks namely credit risk, market risk, operational risk, liquidity risk and interest rate risk and has put in place measures, policies, systems, and procedures to manage and mitigate those risks.

Credit Risk

Bank has a robust Credit Risk Management framework and has developed in-house credit risk rating models for risk assessment of corporate borrowers. Bank has also developed and implemented scoring models in respect of Retail advances, MSME and Farm sector advances. In addition, the Bank has developed credit scoring models to capture the peculiarity of specific lending schemes designed for a particular segment such as PNB Sampatti, PNB GST express loan and co-lending arrangements.

Bank undertakes periodic validation exercise of its rating models to ensure the efficacy of these models. Bank also conducts migration and default rate analysis to test robustness of its credit risk rating models. Output of rating models is linked to decision making in the Bank (viz. sanction, pricing, loaning powers besides audit, review & monitoring of credit portfolio). Bank has put in several policies covering almost all aspects of credit risk management and to have a uniform set of effective lending practices.

In pursuance of overarching objective of automation of processes and increase compliance, Bank has taken initiatives towards digital lending in the form of PNB e-Mudra (Shishu) Scheme for loans upto Rs. 50,000 and preapproved personal loan for salaried (Government as well as Private employees) individuals and pensioners. These modules have rule based processing & sanctioning, which is completely system driven and separate scoring models have been developed for these products.

Bank has launched e-RENEWAL Scheme, an automatic/Straight through Process (STP) for renewal of credit facilities for working capital credit facilities having exposure upto Rs. 10 Lakh.

Bank has in place an Early Warning monitoring tool PNB -SAJAG (Early Warning Signal+Preventive Monitoring System) for exposures above Rs. 1 Crore to address the issue of monitoring causes of build-up of stress in assets and for effective monitoring of advances. The system captures 136 Early Warning Signals including 42 signals prescribed by RBI and 85 signals prescribed by DFS. These processes helps to achieve quick & accurate delivery and monitoring of credit, bring uniformity in the appraisal and facilitate storage of data & analysis thereof.

Bank has also implemented EWS system for Retail & MSME segment (exposure up to Rs. 1 Crore) through subscription to the services of a Credit Information Company wherein on change in credit profile of retail borrowers & MSME borrowers (exposure up to Rs. 1 Crore) with our/other banks, triggers are being generated on daily basis and sent to field functionaries for taking necessary action. Apart from EWS triggers, Bank is also getting leads, which are providing good cross-sell/upsell opportunities for garnering fresh business.

Bank has established Industry Research Desk to carry out in-house risk assessment of Industries. Industry Handout of each industry is prepared based on risk assessment and it is used as an input in the Banks credit risk rating and informed credit decision making.

Market risk and Asset Liability Management

Bank has in place a well-defined organizational structure for market risk management functions, which looks into the process of overall management of market risk viz. interest rate risk, equity price risk & foreign exchange risk, and implements methodologies for measuring and monitoring the same. Market Risk Management Committee (MRMC) has been formed for better and specific monitoring of Market Risk.

Tools like stress testing, duration, modified duration, PV01, VaR etc. are being used effectively in managing risk in the Treasury operations. A separate VaR module has been implemented in Finacle Treasury to generate VaR of portfolios more frequently to have better understanding of risks affecting the portfolio. Further, Country Risk Premium is also introduced in country risk exposure for effective pricing.

Asset Liability management of the Bank is done on proactive basis to manage any eventuality. Bank conducts liquidity stress testing and accordingly have prepared contingency funding plan to tide over liquidity crunch if at all it arises. The Bank is managing its liquid assets on a continuous basis to meet any liquidity requirement.

Operational Risk

Bank has in place a well-defined organizational structure and framework for operational risk management functions. The Bank is identifying, measuring, monitoring and controlling/mitigating the operational risk by analyzing historical loss data, Risk Control & Self-Assessment Surveys (RCSAs), Key Risk Indicators (KRIs) and Scenario Analysis etc. The Bank has also introduced an online OpRisk Solution under Enterprise wide Data Warehouse Project and placed it on central server to take care of various aspects of data capturing and management information system at various levels.

Internal Capital Adequacy Assessment Process (ICAAP)

Bank has in place a comprehensive Internal Capital Adequacy Assessment Process (ICAAP) policy updated annually and ICAAP document which is being put up to Top Management on semi-annual basis.

ICAAP addresses both the Pillar-I and Pillar-II risks and to have a holistic view of impact of various risks which the Bank is exposed to, an exercise is carried out to quantify/assess various risks. The risk assessment & management processes are covered at length in the ICAAP document. The document is being prepared on both solo and consolidated basis.

Bank has a comprehensive Risk Appetite Framework in place. The document sets out the Risk Appetite Statement along with providing a governance and monitoring framework for its effective implementation within the Bank. Risk Appetite has been defined in terms of different parameters along with the Risk limit and Risk threshold level for each parameter.

Group Risk

Bank has group risk framework which is based on pyramid approach starting with risk appetite at top and progressing through, Governance, Processes and Management reporting. Bank has strengthened its Group Risk Monitoring by extending the group risk assessment of associates (including RRBs) and Joint Venture (JVs) in addition to focusing on subsidiaries and overseas branches. Further Group ICAAP is prepared to assess the various risks (both Pillar I and Pillar II) to which the group is exposed to, how the bank mitigates these risks, and to arrive at an internally computed level of capital adequacy consistent with these risks.

Regulatory Guidelines: Bank has adopted Standardized Approach for Credit Risk, Standardized Duration Approach for Market Risk and Basic Indicator Approach for Operational Risk for computation of Risk Weighted Assets (RWA) under Basel III. Risk governance is affected through deployment of various policies which are in sync with the Reserve Bank of India (RBI) guidelines.

Bank also plans to migrate to advanced approaches for computation of RWA/Capital charge for Credit, Market and Operational Risks subject to approval from the regulator. The Bank is already under parallel run for Foundation Internal Rating Based (FIRB) approach for Credit Risk and The Standardized Approach (TSA) & Advanced Measurement Approach (AMA) for Operational Risk. However, TSA and AMA for Operational Risk have now been discontinued by RBI. The Bank is reporting its capital and RWA as per FIRB to RBI on quarterly basis. The Bank has submitted a formal Letter of Intent for adoption of Internal Models Approach (IMA) for Market risk and Advanced Internal Rating Based (AIRB) Approach for Credit Risk. Necessary actions required in this regard have been initiated.

Bank has computed the operational risk capital requirement based on "Draft Master Direction on Minimum Capital Requirements for Operational Risk" also called as New Standardized approach for operational risk.

Bank is calculating Expected Credit Loss (ECL) under Indian Accounting Standard (Ind AS) as per the draft guidelines of Reserve Bank of India on quarterly basis and the results are submitted to the Reserve Bank of India on prescribed Proforma.

Bank has developed Risk Adjusted Return on Capital (RAROC) framework which provides Bank with a single scale for comparing the return on capital for each credit proposal to enable credit decisions. The framework helps in assessing whether returns generated by the business proposition is commensurate with the risk perceived thereby maximizing the value of the shareholders equity.

G. Internal Control System

i. Credit Audit and Review

During FY 2021-22, Credit Audit has been undertaken for all eligible loan accounts both domestic and overseas. In terms of Loan Review Mechanism (LRM) Policy, during FY 2021-22, the coverage of audit is 58.91 per cent of Banks net standard credit as on 31st March, 2021 against Reserve Bank of India and Banks policy requirement of at least 30 per cent to 40 per cent respectively in a year. The Bank has also started the process of Credit Audit Online Program (Credit Audit Module) which is a paperless, effective, accurate and time saving tool of Credit Audit.

ii. Internal Audit

During FY 2021-22, Risk Based Internal Audit (RBIA) was commenced/conducted in 8084 branches/offices programmed for onsite RBIA. Concurrent/Continuous audit was conducted in 1593 branches/offices during FY 2021-22 (now 1555 branches/offices as on 31st March, 2022), by Internal/External Auditors (CA Firms & Empanelled Retired Officers), covering 49.93 per cent of the Total Business of the Bank as at 31st March, 2021.

Information Security (IS) Audit was conducted in 184 office/units. FEMA Audit was conducted in 296 eligible branches/offices i.e. Authorized Dealer (AD) branches & Trade Finance Centres. All branches were subject to revenue audit.

Latest activities and development/new initiatives taken during FY 2021-22:

• Internal audit functions of PNB and Offsite Surveillance System (OSS), have been automated through an online application i.e. eTHIC to bring out fairness, objectivity, transparency and innovation in the Internal Audit System.

During FY 2021-22, under OSS, 50 scenarios have been identified by the bank at the level of Internal Audit Division, Head Office based on various activities being undertaken by the branch officials in CBS in the form of transactions for customers as well as Office accounts.

• Bank had formed a dedicated Data Analytics Team to function as Offsite Surveillance Unit (OSU). The team undertakes Descriptive & Diagnostic analysis in a centralised and continuous manner through Data Dump for suggesting enhancement in system and procedure.

During the FY 2021-22, OSU has undertaken studies by covering various aspects. The enhancement suggested by team is implemented in system for mitigating the identified operational risk.

iii. Know Your Customer(KYC)/Anti Money Laundering (AML)

Bank has put in place a Board approved and transparent Know Your Customer (KYC) Policy, for ensuring meticulous compliance by all Branches/ Offices while dealing with new as well as existing customers. RBI guidelines on various KYC related parameters such as KYC Updation, Identification of Beneficial Owners, UCIC, CKYC etc. are implemented in letter and spirit. For strict compliance of extant KYC guidelines, CASA Back offices have been established for centralized opening of Savings & Current accounts. Further, Document Management System (DMS) has been procured for digitalization of customer documents.

An AML System has been implemented in Bank for monitoring of customers transactions from money laundering perspective through AML alerts and for scanning customers against various sanctions lists. A number of initiatives have been undertaken to bring greater awareness amongst Bank staff about KYC and AML/CFT compliances such as Online basic course on KYC in PNB UNIV has been made mandatory for staff members at branches and one session is mandatorily taken on KYC AML in every training program at training centres.

iv. Management Audit

Bank has prescribed Risk Based Management Audit (RBMA) system for conducting audit of its administrative offices.

The audit is based on Risk Templates and risk profiles duly approved by Board to capture risk perceptions inherent in various areas of functioning of administrative offices including decision making process, communication system, efficient resource utilization, ways and means used to achieve the goals etc. All administrative offices under the scope of RBMA are audited on annual basis except Low risk rated offices and all Head Office Divisions, which are subject to audit once in two years. Head Office Divisions of High Risk rating are audited on yearly basis.

During the FY 2021-22, based on approved Annual Audit Plan, Management Audit and Review Division (MARD) conducted management audit of 267 offices out of 276, comprising of 160 Circle Offices, 23 Zonal Offices, 24 Zonal Audit Offices, 9 Regional Rural Banks, 36 Head Office Divisions and 15 Staff Training Colleges.

v. Vigilance

Punjab National Bank believes that an organisation is only as strong and honest as its people. The employees are the face of the organisation and the Bank assures all its stakeholders that the entire team of PNB is committed to work with integrity and probity in all types of official dealings and demeanours.

Due to efficiency achieved through preventive Vigilance measures, effective monitoring mechanism and supervisory oversight over cases, the outstanding Vigilance cases at the end of March 2022 were brought down to 172, the lowest ever during the last several years. Further, despite the challenges and continued disruptions on account of COVID-19, the disposal of Vigilance Cases was 72 per cent during FY 2021-22.

Also, the portal "Tracking and Monitoring of Staff Accountability Cases" inaugurated last year has been completely stabilized and new modules like Enquiry Officials Module, for tracking of enquiry proceedings have been added in the portal. This portal offers tracking, monitoring, MIS reporting and supervising of staff accountability cases from trigger point to logical conclusion.

Further, in terms of preventive vigilance measures, the portal of Preventive Vigilance Committee Meetings has been made robust by covering approx. 99.42 per cent of Business, 98.28 per cent of staff and 98.46 per cent of Branches as at 31st March, 2022.

In addition to the above various training sessions have been organised on Pan-India basis wherein the Chief Vigilance Officer, as well senior officials from Vigilance Department have participated to have interactions on Vigilance matters. Also Preventive Vigilance Sessions is being undertaken in the induction of Management Trainees and Mid-Career training programmes. Specialised training programmes for skill buildings and knowledge upgradations have also been conducted for Investigating Officials and Vigilance Officers during last years.

The Vigilance Department of the Bank has been publishing an e-magazine, "PNB Vigil", and is conducting online monthly quiz on preventive vigilance for staff for deeper awareness of important issues leading to efficiency in operations and thereby adding value to the customer satisfaction and better compliance culture in the organisation.

The Vigilance Awareness Week (VAW) 2021 was observed from 26th October, 2021 to 1st November, 2021 with the theme "Independent India @75: Self Reliance with Integrity" to promote awareness and enhance brand image of the Bank while ensuring adherence of extant COVID-19 prevention guidelines issued from time to time by the competent authorities at all locations. During the VAW, total of 3,10,108 Integrity Pledges were administered by Bank and various awareness activities conducted which includes 2,351 Gram Sabhas, Online Quiz Competition with participation of approx. 30,000 persons and various online awareness activities at Schools and Colleges. As a part of CSR activities Health Checkup camps were also organized by the Zonal Offices. Tricycle, e-Rickshaw, Blankets, School Bags etc. were distributed to the needy.

vi. Right to Information Act

During the period 1st April, 2021 to 31st March, 2022, the Bank received 7,894 applications and provided requisite information to 5,423 applicants while 1,645 applications were found exempted under the provision of the Act. Further, 826 applications were outstanding as on 31st March, 2022 for disposal, which were subsequently disposed off within the prescribed timeframe.

H. Discussion on Financial performance with respect to operational performance

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. 20,761 Crore with the Net Profit of Rs. 3,457 Crore for the FY 2021-22.

I. Material Developments in Human Resources/Industrial Relations front including number of people employed

i. Human Resources Management:

Total number of employees: Staff strength/Employees given in the following table are for March 2021 and March 2022 including those on deputation in the subsidiaries.

Cadre wise Staff Strength

Cadre

March, 2021

March 2022

Number % of Total Staff Number % of Total Staff
Officer 52913 51.98% 51812 50.23%
Clerks 29313 28.79% 29881 28.97%
Sub Staff (incl. PTS) 19576 19.23% 21451 20.79%
Total 101802 100.0% 103144 100.0%

Reservation Policy

Bank follows the reservation policy for SCs, STs and OBCs as prescribed by Government of India from time to time.

Strength of SC/ST/OBC Employees

Cadre

March, 2021

March, 2022

SC ST OBC SC ST OBC
Officer 10697 4047 11920 10383 3992 12273
Clerks 5998 1622 7230 6104 1686 7683
SubStaff (incl.PTS) 8100 1199 4220 8465 1448 5007
Total 24795 6868 23370 24952 7126 24963

Age Profile of the Employees

The average age of overall employees has come down over the years. The movement of cadre-wise average age in the last five years is as under:

(Average age in years)

Average Age as on Officer Clerical Sub Staff Over All
March, 2018 43.05 38.03 36.60 39.71
March, 2019 42.70 38.27 36.90 39.67
March, 2020 40.58 39.05 37.13 39.30
March, 2021 39.34 38.90 39.69 39.28
March, 2022 39.24 38.28 38.03 38.71

Standalone PNB for March 2018, 2019 & 2020 and amalgamated PNB for March 2021 & 2022.

Industrial relations

Industrial Relations in the bank continued to be cordial with Workmen Union/Officers Association. Due to COVID Pandemic various physical meetings including Industrial Relations

Machinery Meeting (IRM)/ Managerial Relations Machinery Meeting (MRM) were not held with representatives of majority Officers Association/Workmen during the year. However, issues raised by Union/Association have been resolved promptly.

ii. Training Activities

With the second bout of pandemic, FY 2021-22 was another challenging year for leaders across the Banking industry to provide uninterrupted services during the testing times. However, the training system of the Bank evolved through adoption of new delivery systems and technology to upskill and prepare the maximum number of employees to face the challenges.

During the year, Bank took a slew of innovative measures to promote learning and development among the workforce, resultantly reducing the training expense significantly, and at the same time ensuring consistent delivery of an enhanced learning experience. The training system has been strategically aligned with the long term corporate goals, manifested in the backdrop of global financial and economic scenario.

To achieve holistic development, following measures were taken in the FY 2021-22 to make learning more productive and stimulating:

1. Remodelling On the Job Trainings (OJTs)

• Induction of Management Trainees (MTs) is a 52 weeks program comprising of both classroom trainings and OJTs and to make it more productive and streamlined, workbooks for Management Trainees to facilitate them during OJTs have been introduced, starting with Module II covering Credit and Forex aspects which are being extended to cover the Routine module as well. This will help the MTs in understanding different areas of banking in a comprehensive manner and prepare them better to face the challenges of everyday banking on their postings in branches.

• Further, as MTs undergo OJTs at various offices, faculty members have been assigned as mentors for hand holding during the course of OJT. These faculty members connect with MTs mapped to them on a daily basis to get feedback, listen to their problems and provide resolution to their issues.

2. Enhanced Delivery through Online Channel

• In order to facilitate online delivery engagement and assimilation, Group Discussions, presentations, role plays, polls and random tests have been included in such programs. This ensures an enhanced interface between employees and faculty, thus leading to productive training experience.

3. Management/Leadership Development

• To make a positive difference at the leadership level, Management Development Programs and Leadership Development Programs are conducted for the newly promoted officers in Scale IV-VI which the Bank has been arranging at other institutions of excellence till now. These were conducted in-house last year in collaboration with institutions like Administrative Staff College of India (ASCI) Hyderabad, State Bank Institute of Credit and Risk Management (SBICRM) Gurgaon and Bankers Institute of Rural Development (BIRD) Lucknow. This ensured effective utilization of existing infrastructure and getting best expertise available for skill enhancement.

4. Emphasis on Behavioral Skills

• Banking being a service industry, importance of soft skills can be second to none other and towards this end, capsule programs on Soft Skills and Digital products were also conducted in FY 2021-22 to bring about attitudinal change, improved knowledge levels and enhanced customer satisfaction.

5. Promoting inclusivity

• Agenda of Learning & Development vertical is not just to cater to functional learning of staff, but seminars to motivate the workforce are also a part of training agenda. One such initiative last year was conducting Womens Conclave for lady executives in the Bank, where Madam Arundhati Bhattacharya (former chairperson SBI) joined in for keynote address. This was aimed at motivating female officers to rise up the career ladder.

• Bank also took an initiative of finding ability in disability by conducting training program on followup for irregular loan accounts for specially-abled staff. Such training programs ensure optimum utilization of human resource of the Bank. A total of 255 specially- abled employees were trained in 7 batches for effective follow-up on irregular loans.

• As per statutory requirement, pre-promotion training was imparted to 16,762 eligible employees. In addition, 19,057 additional employees who were not covered under the statutory requirement channel, were also imparted pre-promotion training in FY 2021-22.

6. Transcending the limits of traditional lecture/module based learning

• Since banking is a fast paced industry where guidelines keep getting revised and accordingly changes are made to improvise existing products/procedures besides introducing new products/features to existing bouquet. Learning and Knowledge Management

Centre (LKMC) realizes that providing its support in helping employees understand the new products is critical and in order to keep the staff abreast of those changes, a daily podcast service has also been started wherein brief details of product/process/guideline is circulated for the benefit of the staff on daily basis.

• Digitalization has disrupted every sector and the pandemic has made digitalization gain greater significance. This is also one of the thrust areas for the Bank and towards this end, LKMC has prepared interactive videos on PNB ONE to promote better understanding of its features amongst staff as well as customers.

• Training vertical has also taken initiative of curating booklets in the past FY for facilitating field functionaries with consolidated guidelines /SOPs/FAQs/common errors in the Current and Savings account opening processes. This has been an effort directed to reduce TAT in account opening procedure at field level. The initiative was extended to NPA Management wherein booklets explaining procedures/guidelines on recovery were consolidated in a lucid manner for ready reference for field functionaries. Similarly, booklets on customer service/complaint escalation matrix were also compiled and circulated among the staff members.

WAY FORWARD

The outlook on banking sector depends upon the evolving geopolitical situation and its impact on global commodity prices and logistics. The opening of economy has reduced the need for a new stimulus package, and the current momentum can be sustained without large scale disruption. In FY 2022-23, it is expected both deposits and credit will continue to grow in double digits.

Enhanced spending on infrastructure, speedy implementation of projects and continuation of reforms are expected to provide further impetus to growth in the banking sector. All these factors suggest that Indias banking sector is poised for a robust growth as rapidly growing businesses will turn to banks for their credit needs.

Also, the advancement in technology has brought mobile and internet banking services to the fore. The banking sector is laying greater emphasis on providing improved services to their clients and upgrading their technology infrastructure to enhance customers overall experience and give banks a competitive edge.

Going forward, Punjab National Bank shall remain focused on being customer centric with strong value proposition, building new-age technologies and scaling up partnerships in high potential ecosystems. Also, priority to be given on improving the market share in credit with diversified portfolio. The Bank will keep implementing strong recovery measures to improve asset quality. These measures will lead to sustained profitability and robust capital position. The continuous targeted efforts of all the employees will improve the brand value and will reinforce Punjab National Bank as "the name you can Bank upon".