MANAGEMENT DISCUSSION & ANALYSIS
I. INDUSTRY STRUCTURE & DEVELOPMENTS
Global Economy
The global economy has been marked by rising uncertainty in the past 5-6 years due to successive shocks. In 2025, the global economy faced trade tariffs, fragmentation and geopolitical tensions, yet demonstrated resilience by registering annual growth of 3.4 per cent 1 , higher than the earlier projection of 3.2 per cent. While global manufacturing struggled due to weak external demand and high energy costs, the Services sector remained the global growth engine, fuelled by postpandemic travel and the rapid scaling of Artificial Intelligence (AI) related professional services.
The global economic recovery experienced another setback in February2026 as US and Israel attacked Iran and conflict spread across West Asia. The event has introduced profound uncertainty and disrupted global trade routes and energy supplies due to blockade of Strait of Hormuz. This has led to significant rise in energy prices and freight cost that is severely impacting economies around the globe.
The most immediate impact of this geopolitical instability is the stalling of the global disinflation process. After years of central banks efforts to bring prices down, the IMF warns that the war has triggered a new wave of pressure, with global headline inflation expected to rise to 4.4 per cent in 2026, from earlier projections of 3.8 per cent. This spike is largely attributed to an anticipated 19 per cent jump in energy prices. If the conflict escalates further,
particularly if it threatens the Strait of Hormuz or critical energy infrastructure in the Middle East, the world could face its most severe energy crisis in modern history, as per IMF.
The global economy is once again facing the threat of stagflation due to supply chain disruptions. Under such circumstances, central banks may be required to raise the interest rates, thereby exerting additional pressure on households and businesses already grappling with rising living costs.
Amid the ongoing conflict, the International Monetary Fund (IMF) projects the world economic growth to slow down to 3.1 per cent in 2026 and marginally recover to 3.2 per cent in 2027, but significantly slower than the 3.4 per cent yearly Gross Domestic Product (GDP) growth in 2025.
Economic fortunes across the globe are becoming increasingly divergent because of these pressures. Emerging markets and developing nations are bearing the brunt of the heightened volatility, with growth projections for these regions downgraded to 3.9 per cent in 2026 from 4.4 per cent in 2025.
In contrast, advanced economies like the United States have shown relative resilience, maintaining a growth forecast of 2.3 per cent in 2026, higher than 2.1 per cent in 2025. Though even there, the return to inflation targets is expected to be slower. The Eurozone remains in a precarious position, hampered by high energy costs and modest growth forecast of only 1.1 per cent in 2026, lower than 1.4 per cent GDP growth in 2025. Amidst this uneven landscape, India continues to stand out as a notable exception, maintaining fastest growth rate compared to its regional peers.
Apart from geopolitical tensions, other factors weighing on global economic prospects are protectionist trade policies adoption by countries, elevated public debt in several major economies and increasing environmental and demographic pressures.
Going forward, there is need for agile policy-making and stronger international cooperation to effectively navigate these global challenges.
Indian Economy
Amid a global landscape marked by uncertainty and volatility, the Indian economy continues to remain a compelling story of resilience. While many major economies are facing recessionary concerns, India continues to be the fastest- growing major economy, supported by strong domestic fundamentals and strategic trade realignments. India enters FY 2026-27 with strong momentum, having recorded an impressive growth rate of 7.6 per cent in the previous year (FY 2025-26) 2 . For
the current FY 2026-27, major institutions have slightly moderated their forecasts to account for global volatility. The Reserve Bank of India (RBI) projects GDP growth at 6.9 per cent, while the IMF and World Bank have pegged it at 6.5 per cent and 6.6 per cent respectively.
Several internal factors such as Robust Private Consumption, Demographic Dividend, Public Capital Expenditure (Capex) Boom, Strong Financial Sector, Indias Digital Public Infrastructure, Surge in Private Investments are acting as growth drivers to sustain Indias economic performance. Strong domestic consumption through high household demand continues to be the bedrock of economy. Rising rural incomes, supported by robust agricultural performance and improving urban demand are broadening the consumption base. Rationalization
of Goods and Service Tax (GST) rates in September 2025 and income tax relaxation announced in the Union Budget of 202526, accompanied with low inflation and interest rates provided a boost to consumer spending.
Public capital expenditure continues to be another key growth driver. There is a 9 per cent yearly rise in the Capex budget of Government of India at Rs.12.2 lakh crores for FY2026-27, acting as a force multiplier for infrastructure, high-speed rail corridors, and logistics. The Economic Survey notes that investment-led growth is gaining traction, strengthening medium-term capacity.
Indias agricultural sector has displayed resilience, maintaining a steady growth trajectory largely propelled by the allied sector. Although traditional food grain production has seen consistent gains in recent years, higher-value segments, including livestock, fisheries, and horticulture are now playing a transformative role. These allied industries have become central to enhancing rural income opportunities and ensuring long-term economic stability for farm households.
The services sector, especially IT, Business Services, and Global Capability Centres (GCCs) remains a major growth engine. Services exports have been expanding strongly, supported by digitalization, AI driven solutions and global outsourcing trends.
Manufacturing sector has got boost from government initiatives such as Production Linked Incentive (PLI) scheme, the revamped Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme and global supply chain diversification (China+1 strategy). India is increasingly positioning itself
as a manufacturing hub in electronics, pharmaceuticals and defence. A significant tailwind has also emerged from a drastic reduction in U.S. tariffs on Indian goods (falling from 50 per cent to 10 per cent). This has positioned India as a primary alternative in global supply chains, boosting merchandise exports despite higher freight costs.
Further, the Union Budget 2026-27 aggressively pushes for high-tech domestic manufacturing through major allocations like the 40,000 crore Electronics Components Manufacturing Scheme, the launch of India Semiconductor Mission (ISM) 2.0, and the 10,000 crore Biopharma SHAKTI initiative. Concurrently, the budget prioritizes the formalization and liquidity of small businesses through an 10,000 crore SME Growth Fund and expanded invoice discounting via Trade Receivables Discounting System (TReDS). By managing this massive developmental push while systematically lowering the fiscal deficit target to 4.3 per cent of GDP and reducing the debt-to-GDP ratio to 55.6 per cent, the budget ensures long-term macroeconomic stability and crowds in private investment.
During FY 2025-26, inflation remained subdued and consistently stayed below the RBIs medium-term target of 4 per cent, with inflation even dipping below the RBIs lower tolerance band of 2 per cent in certain months. In October 2025, inflation touched a historic low of 0.25 per cent. This disinflationary trend was primarily driven by a sharp correction in food prices, benign fuel cost trends, and GST relief measures announced by the Government.
By March 2026, retail inflation increased to 3.4 per cent, driven mainly by a sharp uptick in food prices. The RBI expects inflation to average 4.6 per cent during the current year. Rising energy prices and the possible impact of El Nino conditions
on the southwest monsoon may further elevate inflationary pressures in the coming months.
Indias trade scenario remained modest in FY 2025-26. The cumulative exports during FY 2025-26 is estimated at $860.09 Billion, as compared to $825.26 Billion in FY 202425, an estimated yearly growth of 4.22 per cent. Electronics, Engineering Goods, and Pharmaceuticals along with the Service Sector remained the major growth driver of exports.
Cumulative imports during the same period increased from $919.92 Billion to $979.40 Billion, registering annual growth of 6.47 per cent, primarily driven by increased imports of precious metals (gold and silver) and critical electronic components. Consequently, the trade deficit widened to $119.30 Billion.
In current FY, merchandise exports may be severely impacted from disruptions to key shipping routes and surge in freight and insurance costs if the conflict persists.
While the engines of economic growth keep propelling Indias development, this progress is met with challenges on several fronts.
Indias economic development is not entirely insulated from prevailing global challenges. India remains vulnerable to slowing global growth, weak export demand and trade fragmentation as it will impact export momentum.
As a major energy importer, India is highly sensitive to price shocks erupting from Middle East, consequent to blockade of Strait of Hormuz and damage to energy infrastructure. Crude oil prices (Brent/WTI Crude) hovering in the range of $86 - $113 a barrel, pose a direct threat to the fiscal deficit and household disposable income. Higher input costs associated with increase
in energy prices and international freight and insurance costs along with supply chain disruptions could constraints availability of key inputs for the downstream sectors, thus impairing growth and causing inflation. The Gulf region is an important destination for Indias exports and major source of remittance. Consequently, Rupee is under pressure due to combined effects of rising oil prices, short term capital outflows and strengthening of dollar which can adversely affect capital flows and import costs.
On the domestic front, the agriculture sector faces significant structural challenges, including fragmented landholdings, constrained access to irrigation and high- quality inputs, limited mechanization and investment, as well as stagnant yields across various crops and regions. These issues continue to restrict productivity improvements and farmer incomes. Additionally, El Nino conditions predicted for this year are expected to result in a below-normal Southwest monsoon, which may affect food production and rural incomes.
Job creation is another major challenge that the economy faces, especially with the large adoption of Artificial Intelligence. There is a growing concern that AI will decouple GDP growth from employment growth. AI allows companies to scale operations and increase productivity without a proportional increase in headcount. For a nation adding millions of youth to the workforce annually, this creates a risk where the economy grows but the number of available quality jobs remains stagnant.
Indias economic outlook for FY 2026-27 is one of guarded optimism. The nation has successfully leveraged its large domestic market and shifting global trade alliances to buffer itself against a world in turmoil.
While the war-induced energy stall and global supply chain disruptions are real threats, Indias robust domestic demand, financial systems and manufacturing momentum suggest it will remain the global economys primary bright spot. The challenge for policymakers this year will be to manage the inflation-growth trade-off while ensuring that the benefits of the AI- driven productivity boom are felt across both rural and urban landscapes.
In essence, India stands at a critical juncture: with the right policy mix, focused on reforms, infrastructure, and human capital, it has the potential to consolidate its position as a leading global economic powerhouse and realize its vision of becoming a developed economy by 2047.
Indian Banking Sector
The Indian banking sector in FY 2026-27 stands as a pillar of the nations dynamic economic growth trajectory. Following years of aggressive deleveraging and regulatory tightening by the Reserve Bank of India (RBI), the sector has entered a Goldilocks phase, balancing robust credit demand with historically low levels of stressed assets.
SCBs deposit growth came in at 13.47 per cent in FY 2025-26, the
fastest pace since May 2024 3 ,
as households and institutions moved money into safer avenues after a turbulent spell in financial markets. A sharp correction in equities, volatility in gold and silver, and losses in several mutual fund categories pushed investors towards the relative stability of bank deposits and bonds. This flight to safety lifted system liquidity and pushed absolute deposits to an all-time high, rising to 262 lakh crore as on 31st March 2026.
Credit growth, too, accelerated to 16.08 per cent (213 lakh crore) in FY 202526 3 , its strongest since June 2024, driven by a decisive shift in borrowing patterns. With yields rising and the rupees depreciation making overseas borrowing more expensive, corporates slowed or postponed their capital-market issuances, both domestic and offshore and turned to banks instead. The shift was reinforced by strong traction in retail segments, particularly gold loans and vehicle loans, with majority of banks posting double digit growth in the segment. Continued formalization of the economy and digital public infrastructure (DPI) has enabled banks to lend more confidently to the MSME sector, which is seeing steady double-digit credit growth. Further, after years of sluggishness, there are early signs of a revival in private capital expenditure (capex). Credit demand is particularly strong in infrastructure, renewable energy, and emerging sectors like defence and data centres .
In FY 2025-26, the Indian banking sector grappled with a record-high Credit- Deposit (CD) ratio, which surged to an alltime peak of 83 per cent by March 20 26 4 .
This escalation is driven by a persistent divergence where robust credit growth, hovering between 13.5 and 14.5 per cent has consistently outpaced sluggish deposit accretion of roughly 10 - 11 per cent. As households increasingly pivot their savings toward higher-yielding equity markets and mutual funds, banks are facing a structural liquidity squeeze, forcing them to bridge the funding gap through expensive certificates of deposit and short-term market borrowings. This funding stress has become RBIs primary regulatory concern, as an elevated CD ratio not only thins out Banks Net Interest Margins but also puts constraint on capacity of lenders to lend and support Indias broader economic expansion.
Profitability metrics are also at cyclical highs. Scheduled Commercial Banks (SCBs) recorded a historic milestone in Q3FY26, with quarterly net profits surpassing the Rs 1.00 lakh crore mark for the first time. Net profits rose by 10.6 per cent year-on- year (y-o-y) and 3.6 per cent sequentially, supported by double-digit growth in other income, slightly improved margins amid benign asset quality, and steady credit expansion.
Perhaps the most significant achievement of the sector is the decadal-high quality of assets. The Gross Non-Performing Assets (GNPA) ratio of Scheduled Commercial Banks (SCBs) fell to 1.89 per cent in December 2025 5 , a historical low. Banks have maintained high Provision Coverage Ratios (PCR), ensuring they are well- buffered against potential shocks.
Capital adequacy remains comfortable, with Capital-to-Risk (Weighted) Assets Ratio (CRAR) of 16.91 per cent for SCBs in December 2025 5 , well above regulatory requirements, providing headroom for future credit expansion.
In a significant shift, the RBI cumulatively reduced the repo rate by 125 basis points since February 2025, bringing it to 5.25 per cent. While this has spurred borrowing, it has put pressure on Net Interest Margins (NIMs) of Banks as loans linked to the repo rate are repriced immediately, the deposits get repriced with a lag as and when they mature.
Banks are currently navigating a deposit war, where the pace of deposit growth has occasionally lagged behind credit expansion, pressing lenders to continue to offer competitive rates on deposits.
The banking sector is currently undergoing a structural tech-lift due to digital transformation, usage of Artificial Intelligence and financial deepening.
The rapid adoption of digital public infrastructure (UPI, Aadhaar, Account Aggregator framework) is reshaping banking models, enabling cost efficiencies and expanding financial inclusion. Artificial Intelligence is no longer a buzzword but a core operational tool, widely being used for credit underwriting and lending, customer acquisitions, cyber threat detection, fraud prevention, risk & compliance etc.
Furthermore, Sustainable Finance has
moved to the mainstream, with banks identifying renewable energy as the segment with prospective growth potential for FY 2026-27.
Although entering FY 2026-27 in a strong position, the Indian banking sector must navigate a complex landscape of emerging structural and macroeconomic headwinds in the coming year. A key structural issue is the credit-deposit mismatch, as deposit mobilization lags loan growth. Consequently, it prevented Banks from effectively transmitting repo rate declines to deposit pricing. The probable El-Nino
Conditions may adversely impact the farm output and incomes and may put stress on the agriculture credit portfolio. Additionally, rising exposure to unsecured retail lending has prompted regulatory caution from the RBI.
The digital race is a double-edged sword. As banks adopt AI and Machine Learning for better efficiency, hackers are matching that pace by upgrading their own digital toolkits. Because modern cyber fraud is highly tech-savvy and AI-driven, Banks can no longer afford to be reactive but must be fiercely proactive in their cybersecurity efforts.
Further, the disruption of global trade routes and energy supplies from West Asia is acting as a supply shock that may lead to higher delinquencies.
In conclusion, Indias banking sector outlook remains structurally positive, characterized by strong balance sheets, substantial credit demand, and improving profitability. Nevertheless, managing liquidity pressures, maintaining underwriting discipline amid rapid retail credit growth, and navigating global macro uncertainties will be critical for sustaining this momentum. The sector is thus showcasing calibrated expansion and is positioning it as a key enabler of Indias broader economic growth trajectory.
II. OPPORTUNITIES
As India advances towards the vision of Viksit Bharat 2047, the banking sector is expected to play a defining role in supporting the next phase of economic growth through efficient credit intermediation, capital formation, financial inclusion and technology-led transformation. With a strong domestic demand base, rising infrastructure investment, policy continuity and a resilient financial system, Indian banks are well placed to sustain growth momentum in FY 2026-27.
Indias economic activity remained resilient during FY 2025-26 despite global uncertainties. Growth was supported by manufacturing, services, private consumption and public capital expenditure. Measures such as GST rationalisation, income tax relief, calibrated monetary easing and liquidity support by the Reserve Bank of India (RBI), including Cash Reserve Ratio (CRR) reductions and other liquidity operations, created a supportive environment for credit expansion and business activity.
The Union Budget 2026-27 is expected to further strengthen the growth outlook for the banking sector through its continued emphasis on infrastructure creation, MSME development, manufacturing competitiveness and financial sector reforms. The enhanced public capital expenditure outlay of 12.2 lakh crore, interest-free capex loans to States, new freight corridors, waterways, logistics infrastructure and urban development initiatives are likely to generate significant opportunities in project finance, working capital lending and ancillary sector credit. The establishment of an Infrastructure Risk Guarantee Fund for partial credit guarantees to lenders could improve bank participation in long-gestation projects while optimising capital usage.
Credit growth remained healthy during FY 2025-26. As at end-March 2026, Bank Credit grew by 16.1 per cent. In sectoral deployment of non-food credit, agriculture sector credit grew at 15.7 per cent and loans to Industry grew by 15.0 per cent 6 . Services and Personal Loans registered robust YoY growth of 19.0 per cent and 16.2 per cent respectively.
Bank credit expansion continued to be driven by retail, services, and MSME lending. Improved business sentiment, sustained infrastructure spending, and revival in private investment are expected
to further support corporate credit demand going forward. Sectors such as logistics, tourism, renewable energy, telecom, roads, railways, warehousing, and manufacturing are expected to generate significant lending opportunities.
The MSME sector continues to be a major growth engine for the banking industry.
Public Sector Banks have launched technology-enabled Credit Assessment Models based on digital footprints for MSMEs, enabling faster, objective and automated appraisal processes. Budget announcements such as the 10,000 crore SME Growth Fund, top-up support to the Self-Reliant India Fund, mandatory use of TReDS for Central Public Sector Enterprises (CPSE) procurement from MSMEs, Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) backed invoice discounting and integration of Government e Marketplace (GeM) with TReDS are expected to improve liquidity, formalisation and credit readiness of
small businesses. These measures should accelerate working capital finance, supply chain finance and collateral-free lending while supporting better asset quality trends.
Agriculture and Allied sectors continue to provide significant opportunities for banks. Policy focus on reservoirs, irrigation, fisheries, dairy, livestock value chains, food processing, warehousing and high-value crops is expected to support rural credit demand. However, the possibility of an El Nino weather pattern in FY 2026-27 may create uneven monsoon conditions in certain regions, potentially affecting crop yields, farm incomes and short-term repayment capacity. Moreover, improved digital penetration and analytics-based lending models can further strengthen outreach in underserved geographies.
Retail lending is likely to remain an important driver of credit growth. Demand for housing loans, vehicle loans, education finance and personal banking products is expected to be supported by urbanisation, rising incomes, changing demographics and aspirational consumption patterns. Lower risk weights proposed for prime residential mortgages, Retail, MSME exposures and Corporate SMEs under revised Basel norms may further support credit expansion.
Indias digital payments ecosystem continues to be one of the strongest in the world. RBI has played a pivotal role in the development of the Unified Payments Interface (UPI). India now accounts for nearly 49 per cent of global real-time digital payment volumes 7 . UPI processed over 22 billion transactions in March 2026, reflecting the scale, convenience and trust of the platform. UPI acceptance has expanded internationally and is operational across multiple countries, with further linkages under progress.
The banking sector is witnessing rapid digital transformation through mobile banking, internet banking, Application Programming Interface (API)-led ecosystems, data analytics, artificial intelligence and paperless credit delivery models. Digitisation is improving customer convenience, reducing turnaround times, strengthening risk assessment and enabling cost-efficient delivery of banking services across urban and rural markets. As financial services become increasingly embedded into digital ecosystems, banks with strong technology capabilities are likely to gain market share and improve operating efficiency.
The next phase of digital transformation is also being driven by the Unified Lending Interface (ULI), which is expected to provide lenders with real-time digital access to borrower data and enable faster credit appraisal for small farmers, traders and micro-enterprises. This initiative can materially improve credit delivery efficiency and financial inclusion by reducing documentation barriers and turnaround times.
Further, RBIs policy and regulatory measures reflect a growth-oriented reform agenda. Key initiatives such as a Risk-Based Deposit Insurance Premium Framework, Expected Credit Loss (ECL) provisioning from April 2027, Revised Basel III Norms, Expanded Lending Limits Against Shares and Initial Public Offering (IPO) Financing, and proposals relating to Financing Mergers and Acquisitions are expected to improve capital efficiency, strengthen resilience and create new lending opportunities for banks.
III. THREATS
Despite resilient domestic fundamentals, the banking sector continues to face risks arising from global developments. The escalation of geopolitical tensions in West Asia has introduced fresh uncertainty and may affect India through multiple transmission channels including higher crude oil prices, elevated logistics costs, supply disruptions, volatility in global markets and pressure on remittance inflows.
India remains significantly dependent on imported energy, and prolonged disruption in West Asia may lead to sustained increases in crude oil and gas prices. Higher energy prices could adversely affect inflation, fiscal balances and the current account deficit. Input cost escalation may also compress margins for sectors such as aviation, transport, logistics, chemicals, ceramics, metals and MSMEs.
The Indian Rupee depreciated nearly 9 per cent in FY 2025-26 and continues to breach historic lows amid foreign portfolio outflows to the tune of 1.53 lakh crores 8 , safe-haven demand for the US Dollar and elevated global risk aversion. Rupee weakness increases imported inflation, raises hedging costs, impacts trade finance and may affect borrowers with foreign currency exposures. It can also increase costs for fuel, fertilisers, electronics and other imported inputs, thereby transmitting inflationary pressure into the broader economy.
Deposit mobilisation remains a structural challenge for the banking system. Deposit growth has lagged credit expansion in recent years, making liability management increasingly complex. Competition for low- cost CASA deposits is expected to remain intense as households diversify savings in higher yield segments such as mutual funds, equities and insurance products. Increased reliance on bulk deposits may further elevate funding costs and exert additional pressure on margins.
Although asset quality has improved materially, emerging risks persist across
8 As per NSDL data for FY2025-26 certain segments such as unsecured retail credit, microfinance, exporters affected by trade disruptions, and MSMEs facing cost inflation or supply chain bottlenecks. Smaller borrowers with limited financial buffers remain more vulnerable to economic shocks.
Cybersecurity continues to be one of the most significant non-financial risks for the banking sector. Rapid digitalisation, mobile banking growth, API-based integrations, cloud adoption and increasing dependence on third- party service providers have materially expanded the threat horizon. Banks face growing exposure to AI-enabled fraud, phishing attacks, ransomware, credential theft, malware intrusions and sophisticated social engineering campaigns targeting both customers and employees.
The increasing scale of real-time digital payments and omnichannel banking platforms also heightens risks relating to service disruption, data leakage, payment fraud and reputational damage. Cyber incidents affecting critical systems can lead to operational outages, regulatory penalties, customer attrition and financial losses.
In addition, evolving regulatory expectations around customer consent architecture, data privacy, resilience testing and incident reporting require continuous investments in governance, controls, skilled manpower and advanced monitoring capabilities. As threat actors become more organised and technologically capable, cybersecurity preparedness will remain a defining priority for banking sector resilience.
IV. OUTLOOK
Indias GDP growth is expected to remain among the highest globally in FY 202627, supported by domestic consumption, public capex, infrastructure spending, manufacturing expansion and increasing private investments. While geopolitical uncertainties remain a risk, the underlying domestic macroeconomic environment continues to provide a favourable base for banking sector growth.
Credit growth is expected to remain in the range of 12-13 per cent in FY 2026-27, led by retail, housing, agriculture, MSME and selective corporate lending. Public Sector Banks are well positioned to benefit from this momentum owing to their extensive branch network, strong deposit franchise, trusted customer relationships and improving technology capabilities.
Deposit mobilisation will remain a key strategic focus area. Banks are expected to deepen CASA penetration, improve customer engagement through digital channels and diversify funding sources. Deposit growth is expected to be in the range of 10 - 11 per cent in the current FY. RBIs calibrated liquidity management through CRR adjustments, open market operations and other tools is expected to support orderly market conditions.
Margins may remain range-bound in the near term due to external uncertainties and competitive deposit pricing. However, operational efficiencies, technology-led productivity gains, fee income growth and treasury opportunities may provide support to profitability.
A notable positive trend has been the improvement in regulatory compliance across the banking sector. Monetary penalties imposed by the RBI on commercial banks declined by around 37 per cent during FY 2025-26 to approximately 19.8 crore, reflecting stronger governance standards, better adherence to KYC norms, improved operational controls and increasing regulatory discipline. This augurs well for long-term institutional credibility and risk culture.
Cybersecurity and future-ready technology are expected to remain priority themes for the sector. Banks are likely to continue strengthening enterprise-wide cyber resilience through advanced Security Operations Centres, threat intelligence platforms, continuous vulnerability assessments and AI-enabled fraud detection systems. Investments in stronger encryption standards, quantum-resistant security frameworks and real-time surveillance capabilities are expected to accelerate as digital transactions scale further.
Industry collaboration through cyber exercises, hackathons, talent development initiatives and partnerships with academic institutions is expected to support innovation in indigenous security solutions aligned with the national vision of digital trust, self-reliance and Viksit Bharat. With strong domestic fundamentals, supportive reforms, resilient institutions and rapid technological progress, the Indian banking sector is expected to remain a key driver of the nations economic progress and will serve as a critical catalyst in propelling the nation toward its $7 trillion economic milestone by 2030.
V. SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE
The performance of major business segments of the Bank is analyzed below:
1. Resource Mobilization
As on 31 st March, 2026, Total Deposits stood at 17,11,126 Crore. CASA Deposits was at 6,09,615 Crore as on 31st March, 2026 as against 5,73,543 Crore as on 31 st March, 2025.
i. Current Deposits was at 79,294 Crore as on 31st March, 2026.
ii. Savings Deposits was at 5,30,321 Crore as on 31st March, 2026.
The share of CASA deposit to Total Domestic deposit stood at 37.00 per cent as at end of March 2026.
Deposit Mobilisation Initiatives undertaken in FY 2025-26:
a) Introduction of PNB Kisan Savings Account Scheme
To empower farmers and promote inclusive financial growth, Punjab National Bank has introduced the PNB Kisan Savings Account Scheme. This specialized savings account is designed to cater to the banking needs of the agricultural community, ensuring easy access to financial services and encouraging savings habits among farmers. The account aims to provide farmers with secure savings options while enabling them to participate in modern banking practices, by offering convenient features and Primary Healthcare services.
b) Revamping of 7 Savings Account Scheme
The Bank revamped its savings account products with attractive and innovative features for all the segments of customers viz., Salary, Defence personnel, Minors, Youth, Farmers, Women, Pensioners and Senior Citizens to provide a more personalized and modern banking experience to the customers. Evolving consumer expectations are being addressed through the integration of value- added benefits such as comprehensive insurance coverage, lifestyle rewards, and health-centric offerings.
Greater inclusivity is ensured for all segments, from students to senior citizens, by simplifying processes and eliminating penal charges for non-maintenance of minimum balances. These enhancements reflect the Banks commitment towards delivering efficient, customer-centric financial solutions and promoting longterm financial well-being.
c) Customized Account Number Facility
The Bank introduced a Customized Account Number Facility for Savings and Current Accounts to offer customers a more personalized banking experience. This initiative enables customers to choose a unique and easy-to-remember account number aligned with their personal or business identity. By moving away from standard number generation practices, the Bank offers a tailored solution that enhances brand recall for businesses and convenience for individual customers.
d) Implementation of Loyalty Rewardz for Deposit Customers
To promote long-term financial engagement and reward customer trust, PNB has launched the Loyalty Rewardz Program for deposit customers. This scheme is designed to deliver value- added benefits by rewarding regular banking activities and maintaining healthy account balances. Customers can earn points through various digital and retail transactions, which can later be redeemed for an array of lifestyle perks and merchant offers, ensuring that banking with PNB is both secure and rewarding.
e) Introduction of Smart GIG Savings Account
Recognizing the rise of the flexible workforce, the PNB Smart Gig Savings Account has been introduced to cater specifically to the needs of freelancers and gig workers. This specialized account offers customized financial solutions, such as flexible credit facilities and insurance protection, designed for individuals with fluctuating income streams. By simplifying account management and offering digital- first features, PNB aims to empower this emerging segment of the economy with efficient and supportive banking options.
f) Relationship Manager Program
The Relationship Manager (RM) Program was introduced to provide high-value customers with personalized banking services. Initially launched as a pilot across select zones, the program is now being scaled nationwide. This initiative is further strengthened by the Virtual Relationship Manager (VRM) model, which extends customer outreach through centralized communication and engagement. Beyond enhancing customer service and retention, the program is also designed to drive growth across CASA, lending, and third- party product portfolios.
g) Institutional Tie-ups & customized Salary Accounts
Salary Saving Scheme has been customized with tailored features as per the requirements of the several corporate and government sectors to secure salary accounts. Through strategic tie-up arrangements, the bank has successfully partnered with major entities including the Central Government, Railways, Indian Army and the State Governments of Jharkhand & Uttrakhand. The Banks growing institutional portfolio also includes leading organizations such as as Coal India Limited, BSNL, CRPF, Railway Protection Force, Shiromani Gurudwara Parbhandhak Committee, MECL and many more.
2. Credit Deployment and Delivery
Gross Domestic Advances of the Bank stood at 11,92,950 Crore as on 31st March 2026 registering a YoY growth of 11.90 per cent.
Banks CD Ratio has improved to 73.55 per cent as on 31st March, 2026 from 71.30 per cent as on 31st March, 2025.
The Banks two-tier organizational structure for Corporate Credit functions as a specialized credit delivery framework
equipped with dedicated credit desks to ensure consistent and responsible lending practices.
The two-tier structure is supported through 2 Extra Large Corporate Branches (ELCBs) and 13 Large Corporate Branches (LCBs) located across different parts of the country.
The structure has been designed to meet customer expectations by augmenting three pillars viz; Customer Ecstasy, Timely delivery and Fair Lending Practices.
Fresh Corporate Sanctions with external rating A and above formed a major part of the sanctions.
3. Retail Credit
The Banks retail lending segment continues to deliver steady and strong growth year- after-year. This strong momentum has been driven by improvements in the economic environment, a rising middle class, increasing urbanization, higher disposable incomes, and technological innovations facilitating product dissemination. At the macro level, a competitive market landscape has further fuelled this growth. Meanwhile, at the micro level, initiatives such as product differentiation, strategic marketing, digital channels for retail loans, specialized verticals and crossselling opportunities have significantly contributed to the expansion of the Retail portfolio. Notably, delinquency levels have remained under control and have declined due to enhanced credit underwriting standards.
During FY 2025-26, the Banks Total Retail Credit portfolio grew to 2,80,779 crore, registering a YoY growth of 8.30 per cent. Within this, the Core Retail Credit portfolio increased to 2,51,729 crore, reflecting a YoY growth of 18.20 per cent.
Key segmental growth within the Core Retail Credit portfolio:
i. Housing Loans grew to 1,17,053 crore from 1,02,657 crore (YoY growth: 14.02 per cent).
ii. Vehicle Loans increased to 35,182 crore from 25,996 crore (YoY growth: 34.0 per cent).
iii. Mortgage Loans increased to 18,144 crore from 16,292 crore (YoY growth:
11.36 per cent).
New Initiatives undertaken in FY 2025-26
The Bank undertook several initiatives
during the year to strengthen and expand
its Retail Credit business:
- PNB Digi Journeys: Expansion of digital loan journeys for Personal Loan, Home Loan, Education Loan, Car Loan, Digi Gold, Rooftop Solar Loan, e-OD/ DL against FDR/RD, Loan against Security, Two-wheeler Loan, and digital top up loan to existing HL borrowers.
- Education Loan Policy Modifications:
Increased nodal officers linked to Quality Higher Education Institutes under PM Vidyalaxmi scheme, with aggressive marketing and campus outreach. A unique strategy is being pursued to enhance the ticket size under the education loan scheme.
- Loan for Rooftop Solar Systems (PM
Surya Ghar Scheme): Consistent
Q-o-Q growth in sanctions and disbursements was witnessed during FY 2025-26. The Bank launched Digi Surya Ghar digital product for quick and easy credit delivery.
- PM Surya Ghar Loan Campaign - 2025: Bank launched PM Surya Ghar Loan Campaign - 2025 in which it garnered 7,074 crore against a target of 17,251 crore (41 per cent achievement).
Monthly/Quarterly Outreach Programs:
Regular customer engagement events across zones, generating thousands of leads and significant sanction amounts.
Product Competitiveness: Continued offering of attractive product features and competitive interest rates across retail asset products.
Focused Campaigns: Adoption of targeted campaigns and customer outreach programs to increase the share of home loans within the retail portfolio.
Strengthened Partnerships: Expanded tie-ups with car dealers, home builders, Marketing Associates (MAs), Marketing Consultants (MCs), Retail Loan Counsellors (RLCs), and increased use of property search portals to ensure a steady flow of quality retail loan leads.
Customer Acquisition Centers (CACs): 57 dedicated CACs have been established across the country to source retail loan leads and forge partnerships with corporate institutions and home builders.
- Government - Aligned Initiatives:
Launch of schemes like PNB Pradhan Mantri Awas Yojana Urban 2.0, PM Vidyalakshmi, PM Suryaghar scheme and Credit Risk Guarantee Home Loan Scheme, promoting affordable housing and education under the Government of Indias sponsorship.
- Youth-Focused Products: Introduction of PNB Yuva Ghar, PNB Yuva Vahan, and PNB Yuva Sahyog to address the credit needs of the aspirational youth segment (aged 18-35 years).
New Products & Schemes
- Credit Risk Guarantee Home Loan Scheme: Introduced for low-income individuals under the EWS/LIG/MIG categories in urban and metro areas. The Credit Risk Guarantee Home Loan Scheme (CRGHLS), launched under the aegis of the Viksit Bharat @ 2047 initiative of the Government of India, aims to enhance credit accessibility for the urban poor, including gig workers with regular income streams but limited or no documented income proof. The scheme leverages customers digital banking and economic activity footprints to facilitate credit access.
- PNB Guruji Student Credit Card Scheme: A customized education loan scheme introduced for students in Jharkhand. The Guruji Student Credit Card Scheme (GSCC) is an initiative of the Government of Jharkhand aimed at providing financial assistance at concessional interest rates, backed by suitable guarantees to the Bank. The scheme enables eligible students to pursue diploma, undergraduate, postgraduate, professional, doctoral, and post-doctoral programmes at premier institutions such as IITs, IIMs,
AIIMS, NITs, XLRI, BITS, NID, IISc, and others across India. The primary objective of the scheme is to provide meritorious students with access to higher education through affordable financial assistance under reasonable terms and conditions.
- Insta Loan Against Securities - Mutual Funds: Quick loan facility against mutual fund holdings.
- Approval of Builder & Underconstruction Projects via CRM Portal:
Streamlined project approvals digitally. A lead tracking mechanism for approval of builders/ developers and their under-construction Projects (AHPs) is now customized in CRM and the same has been made live.
- Revised Guidelines: For property loans the limit is increased up to 2500.00 lakh. Top-up loans to existing home loan borrowers has been increased up to 50.00 lakh for loans in shape of overdraft and up to 250.00 lakh for loan in shape of Term Loan. Modifications in Digi Home Loan & Digi Car Loan have been made to make the digital journey smoother and customer friendly.
4. Priority Sector
Shouldering the responsibility of social banking, the Bank has surpassed all the Priority Sector goals this year. As per the Economic Survey 2025-26, Indias agriculture sector recorded an average annual growth rate of 4.4 per cent during the last five years. The Bank has contributed significantly towards this growth by extending financial support to the sector.
The outstanding position of Priority Sector, Agriculture and sub-sectors as on 31st March, 2026 on quarterly average basis is as under:
Achievement of National Goals
(Amount in Crore)
| Outstanding Position | No. of Beneficiaries (Nos.) | 31.03.2026 (Amount)* | PSL Target | % Achievement to Adjusted Net Bank Credit (aNbC) |
| Priority Sector Credit | 77,67,085 | 4,55,428 | 40.00% | 41.89% |
| Out of which: | ||||
| Loan to Agriculture Sector | 54,31,568 | 1,96,683 | 18.00% | 18.09% |
| Loan to Small & Marginal farmers | 48,81,408 | 1,14,487 | 10.00% | 10.53% |
| Loan to Micro enterprises | 14,95,308 | 1,05,464 | 7.50% | 9.70% |
| Loan to Weaker Sections | 57,42,137 | 1,49,172 | 12.00% | 13.72% |
| Non-Corporate Farmers | 53,82,590 | 1,52,719 | 14.00% | 14.05% |
including PSLCs
Performance Highlights of FY 2025-26
i. Credit to Priority Sector stood at 4,55,428 Crore as on March 2026. The percentage of Priority Sector Advances to ANBC is 41.89 per cent as against the prescribed National Goal of 40.00 per cent.
ii. Credit to Agriculture sector stood at 1,96,683 Crore as on March 2026. The percentage of Agriculture Advances to ANBC is 18.09 per cent against the prescribed National Goal of 18.00 per cent.
iii. Loans to Small/Marginal Farmers (SF/MF) stood at 1,14,487 Crore as on March 2026. The percentage of advances to SF/MF farmers to ANBC is 10.53 per cent as against the prescribed National Goal of 10.00 per cent.
iv. Credit to Micro (PS) Enterprises stood at 1,05,464 Crore as on March 2026. The percentage of advance to Micro (PS) Enterprises to ANBC is 9.70 per cent as against the prescribed National Goal of 7.50 per cent.
v. Advances to Weaker Section stood at
1,49,172 Crore as on March 2026. The achievement is 13.72 per cent as against the prescribed National goal of 12.00 per cent of ANBC.
vi. Advances to Non-Corporate Farmers stood at 1,52,719 Crore as on March 2026. The achievement is 14.05 per cent as against the prescribed National goal of 14.00 per cent of ANBC.
Government of India (GoI) is launching various programmes for the benefit of farmers from time to time. The schemes like Agriculture Infrastructure Fund (AIF), Animal Husbandry Infrastructure Development Fund (AHIDF) and Pradhan Mantri Formalisation of Micro Food Processing Enterprises Scheme (PMFME) has helped Banks in targeting and financing under various activities under Farm credit and pre & post-harvest management. Since all these schemes are part of Agriculture and priority sector, these have helped in achieving Priority Sector targets also. In addition to these various other programmes like National Rural Livelihood Mission (NRLM), PM-KUSUM, etc. are also helping in increasing the Priority sector advances.
To ensure certainty of returns to the farmers through price support, promote crop diversification and improve market infrastructure, Government is focussing on investment in infrastructure facilities through Agriculture Infrastructure Fund. Up to 31st March 2026, 1,96,570 projects with aggregate sanction of 85,683 Crore were financed under the scheme, out of which PNB has sanctioned 6,237 projects amounting to 9,919 Crore.
Bank has undertaken several initiatives to
boost Agriculture Business as under:
i. Agri. Loan against Gold Ornaments/
Jewellery: Separate Gold Loan vertical, headed by General Manager established at the Head Office. Bank diversified its Gold Loan products. Further, the Bank increased its number of authorized branches for Gold Loans.
Bank will enhance its focus on advertising and publicity and on colending with some reputed NBFCs.
ii. Focus on SHG Financing: To deepen financial inclusion, the Bank will leverage its tie-ups with State Rural Livelihoods Mission (SRLMs), Agri- FinTechs, and aggregators. This partnership ecosystem is centered on expanding fresh credit linkages, offering top-up loans to eligible SHGs, and aggressively financing beneficiaries under the Lakhpati Didi initiative. This entire growth pipeline is being underpinned by a specialized digital journey tailored for efficient SHG financing.
iii. Agriculture Infrastructure & Ancillary
Activities: Our agricultural credit strategy centers on financing agroprocessing infrastructure, such as rice, dal, and edible oil mills and cold storage facilities while aggressively targeting farm mechanization, custom hiring units, and animal husbandry term loans. To accelerate this growth, the Bank is actively leveraging key government schemes, prioritizing loan originations under the Agriculture Infrastructure Fund (AIF), Animal Husbandry Infrastructure Development Fund (AHIDF), and Pradhan Mantri Formalisation of Micro Food Processing Enterprises (PMFME) schemes.
iv. Improved Financing under Cluster Business: The Bank has 39 active clusters currently and it is increasing the number of clusters on continuous basis. 34 Fisheries clusters approved by the GoI is under focus area.
v. Leveraging Newly Launched Digital Journeys/ Other products: Prioritizing high-impact products like Warehouse Receipt (WHR)/e - Negotiable Warehouse Receipt (NWR), cold chain storage, PM-KUSUM, and Kisan Samriddhi Yojana (KSY). This portfolio expansion is being accelerated by deploying newly rolled out digital platforms, specifically Digi Shreshtha, Tractor Xpress, and Griha Vatika, to drive frictionless digital lending in rural markets.
vi. Other Initiatives: The Bank is accelerating its agriculture market share through a three-pronged approach: first, Collaboration with farm machinery manufacturers and mapping of Bank Nodal/Agriculture Officers with local dealers to boost farm mechanization and improve credit outreach; second, executing localized Agri Outreach Programs to drive high- volume lead generation; and third, enforcing strict end-to-end monitoring of credit sanctions and disbursements across all credit delivery verticals (PNB Loan Points, Mid-Corporate Centres, and General Banking Branches).
5. 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 on 31st March 2026, credit to MSME segment stands at 1,95,027 Crore, with YoY growth of 19.90 per cent. The advance to Micro and Small Enterprises stood at 1,61,311 Crore with outstanding in Micro segment at 1,01,413 Crore.
Mudra: The Bank has disbursed 24,553 Crore in FY 2025-26 under the Pradhan Mantri MUDRA Yojana (PMMY) as against 21,236 Crore in FY 2024-25.
SCHEME WISE PERFORMANCE:
1. Flagship Scheme
a) Cash Flow Based Lending (CFL) Schemes: (Amount in Crore)
| Scheme Name | Sanction as on 31.03. 25 | Sanction as on 31.03.26 | YoY | TotalO/s | NPA | per cent NPA | ||
| No | Amt. | No | Amt. | |||||
| GST Express | 17,348 | 12,318 | 18,152 | 18,033 | 46% | 11,473 | 85 | 0.74% |
| PNB Trade Growth | 12,853 | 4,925 | 26,066 | 11,658 | 137% | 8,906 | 36 | 0.40% |
b) Projection Based Lending Schemes:
| Scheme Name | Sanction as on 31.03. 25 | Sanction as on 31.03.26 | YoY | Total O/s | NPA | per cent NPA | ||
| No | Amt. | No | Amt. | |||||
| MSME Prime Plus | 39,594 | 61,875 | 50,767 | 86,465 | 40% | 60,605 | 784 | 1.29% |
| PNB Sampatti | 6,715 | 10,174 | 7,806 | 14,292 | 40% | 10,597 | 60 | 0.57% |
c) Digital Lending Scheme:
| Scheme Name | Sanction Sanction as on 31.03. 25 as on 31.03.26 | YoY | Total O/s | NPA | per cent | |||
| No | Amt. | No | Amt. | NPA | ||||
| e-GST Express | 1,025 | 276 | 1,410 | 414 | 50% | 285 | 1.89 | 0.66% |
| Digi MSME Loan | 15,328 | 934 | 57,689 | 3,472 | 272% | 2,117 | 7.40 | 0.35% |
| E-Vishwakarma | 21,152 | 207 | 28,721 | 281 | 36% | 114 | 44.19 | 38.76% |
| e-PM Svanidhi | 8,15,604 | 1,208 | 8,26,845 | 1,225 | 1% | 270 | 42.61 | 15.78% |
| Total | 8,53,109 | 2,625 | 9,14,665 | 5,392 | 105% | 2,786 | 96.09 | 3.45% |
2. GOVERNMENT SPONSORED SCHEMES: a. Performance under Pradhan Mantri Mudra Yojana:
| Category | FY 2024-25 | FY 2025-26 | YoY | O/S | NPA | NPA% | ||
| Sanc. Disb. | Sanc. Disb. | |||||||
| Shishu | 435 | 431 | 430 | 428 | -1% | 950 | 477 | 50.00% |
| Kishore | 7,114 | 6,987 | 9,109 | 8,991 | 22% | 13,227 | 3,492 | 26.40% |
| Tarun | 13,739 | 13,706 | 14,748 | 14,720 | 7% | 20,512 | 2,818 | 14.00% |
| Tarun Plus | 117 | 111 | 416 | 415 | 73% | 248 | 0.85 | 0.34% |
| Total | 21,405 | 21,236 | 24,703 | 24,553 | 14% | 34,937 | 6,788 | 19.42% |
b. Performance under another Government Sponsored Schemes:
| Scheme Name | Sanction as on 31.03.25 | Sanction as on 31.03.26 | YoY | TotalO/s | NPA | per cent NPA | ||
| No | Amt | No | Amt | |||||
| PM SVANidhi | 7,20,261 | 992 | 8,10,355 | 1197 | 20.69% | 254 | 49.39 | 19.43% |
| PM Vishwakarma | 37,689 | 365 | 42,821 | 416 | 18.78% | 137 | 54.9 | 40.14% |
3. TReDS Scheme Performance: 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). Bank uses all the three platform of TReDS i.e. RXIL, M1xchange & A.Treds.
| Position As on | Sanctioned A/c | O/S Amt |
| 31.03.2025 | 3,358 | 1,629 |
| 31.03.2026 | 10,456 | 5,524 |
Performance in Existing MSME Schemes:
| SN | Sanction | Actuals | YoY Growth % | |
| 31.03.2025 | 31.03.2026 | |||
| 1 | MSME Prime Plus Scheme | 21,015 | 28,191 | 34.15% |
| 2 | PNB Growth Plus Scheme | 3,867 | 6,263 | 61.96% |
| 3 | Solar Energy Finance Scheme | 255 | 402 | 57.65% |
| 4 | GST Express Scheme | 3,239 | 3,750 | 15.78% |
| 5 | Sampatti Scheme | 4,282 | 5,431 | 26.83% |
| 6 | Sanctions under Cluster Financing | 4,325 | 6,160 | 42.43% |
New Initiatives undertaken in FY 2025-26
During FY 2025-26, the Bank implemented a range of targeted strategies aimed at enhancing the MSME credit portfolio. These initiatives included strengthening outreach programs, streamlining credit appraisal processes, leveraging digital platforms for faster loan sanctions/disbursements, and expanding partnerships with various third- party vendors for quality lead generation. The concerted efforts were design to improve credit accessibility, reduce turnaround time, and support the growth and resilience of the MSME Sector.
a. Initiatives to strengthen Digital Journey:
The Digital journeys has revolutionized credit delivery by introducing a Straight Through Processing (STP) model, enabling eligible borrowers to access credit facilities digitally in just 10 minutes. The process begins when the borrower visits the portal and enters basic KYC, business details, and
GST information. The system then performs automated cross-validation using APIs from GST and Aadhaar, while extracting data from CIC and GST portals. Leveraging this information, the Business Rule Engine (BRE) analyzes the data and provides an instant in-principle sanction.
b. Launch of new Scheme DIGI MSME PRIME:
The Bank launched a new scheme in the name of Digi MSME PRIME by subsuming the feature of PNB MSME Prime Plus scheme & e-GST EXPRESS Scheme. The enhanced DIGI MSME PRIME framework will serve as a standardized lending model for loan amounts ranging above 10.00 lakh to 10.00 crore. The scheme ensures broader eligibility, improved accuracy in credit evaluation, and a more inclusive digital lending ecosystem for MSMEs.
c. Implementation of Collateral Support for Export Credit:
Bank has implemented Government of India, a Special Credit Guarantee Scheme titled Collateral Support for Export Credit for facilitating institutional export credit to eligible Micro, Small and Medium Enterprises (MSME) exporters under the Export Promotion Mission (EPM - Niryat Protsahan).
d. Revamp and realignment of e-GST Scheme:
The e-GST Express Scheme provides financing to GST - registered entities with regular return filings, with limits assessed based on GST return data. Initially capped at 1.00 Crore, the maximum loan limit was enhanced to 5.00 crore. This revision has led to increased traction, with a notable rise in large-ticket advances under the scheme.
e. MSME cluster-based Outreach Programme:
As a strategic initiative, the Bank has launched MSME Cluster Based Outreach program aimed at generating new business opportunities. This initiative will help in focusing on geographically concentrated groups of similar industries, artisans to promote collective growth, increased competitiveness, and shared infrastructure.
f. Launch of PNB Growth Plus Scheme:
The existing PNB Trade Growth Scheme has been revamped and renamed as PNB Growth Plus Scheme, incorporating key changes to enhance its competitiveness in the current market scenario. These changes include, increase in quantum of Finance from 1.00 Cr to 2.00 Cr, Concession in ROI to Youth and Women Entrepreneur, Concession in ROI/ Processing Fee to Zero Defect Zero Effect (ZED) certified MSME Units.
g. Modification in PNB Sampatti Scheme:
Based on feedback from field functionaries, amendments have been introduced in the PNB Sampatti Scheme. These include relaxation in the Loan-to-Value ratio and flexibility in eligible property restrictions,
as per bank guidelines. The changes aim to broaden customer inclusion under the scheme and reduce turnaround time.
6. Financial Inclusion (FI)
The Bank has been the pioneer in taking initiative in the area of financial inclusion. The 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 area. SSA is a cluster of few villages and is linked to one base branch of the Bank.
FI initiatives in FY 2025-26 are as follows:
a. The Bank has implemented Pradhan
Mantri Jan Dhan Yojana (PMJDY) and other financial inclusion initiatives through Bank branches & BCs Pan- India. Overdraft facility up to 10,000 in PMJDY accounts is provided to eligible account holders (age group 18-65).
b. Biometric based e-KYC account opening and Aadhar seeding at BC Locations.
c. Social Security Schemes (SSS), 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, branches, as well as through Internet Banking/ Mobile Banking. The Progress of Social Security Schemes (SSS) since inception till 31st March, 2026 is as under:
| i. PMJJBY: enrolled. | 92.74 | Lakh | customers |
| ii. PMSBY: enrolled. | 351.05 | Lakh | customers |
iii. APY: 57.19 Lakh customers enrolled.
As on 31st March, 2026, Bank has 33,314 BC Agents/Bank Mitras providing basic banking services in Rural, Semi-Urban, Urban and Metro centres depending upon the requirement of the Bank. The BC Agents / Bank Mitras use PAX /Laptop /Desktop etc. for providing the banking services. At present various services like e-KYC account opening, Cash deposit, Cash withdrawal, Fund transfers, KYC updation, cheque collection, loan request initiation, PNB One Oboarding etc. are available at BC locations through Kiosk Banking Solution (KBS):
Further to enhance Financial Inclusion, Bank undertakes training activities for various fields through its training centres.
a. Farmers Training Centres (FTCs):
The Bank has established 12 Farmers Training Centres. FTCs provide training on agriculture & allied activities which include organic farming, fertilizer management, bee keeping, dairy farming, mushroom production, maintenance of tractor and other farm machineries, processing and preservation of fruits and vegetables, computer courses, beauty parlour, candle and soap making, papad making, making of soft toys, cutting, tailoring & embroidery, etc. These Training Centres have been equipped with the Mobile Van and LED for audio visual display of informative video clips to the farmers. During the FY 2025-26, 1,10,061 persons were trained in these centres. Out of which 52,439 were women. Since inception, FTCs have imparted training to 20,42,240 persons, including 5,08,710 were women. The Bank spent 1,294.71 Lakh towards this initiative during FY 2025-26.
b. Rural Self Employment Training Institutes (RSETIs): There are 78 RSETIs under aegis of Ministry of Rural Development (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 upgradation to undertake selfemployment ventures/jobs.
During the FY 2025-26, 69,798
persons were trained at these centres, of which 61,022 belong to Below Poverty Line (BPL) families and 56,769 were women. Total number of trained candidates since inception is 7,51,746 out of which 4,12,623 were from BPL families and 5,23,350 were women.
Our RSETIs are focusing for settlement of participants by ensuring adequate credit for inclusive growth. Total settled candidates are 5,27,399 since inception. The Bank spent 6,175.36 Lakh on this initiative during FY 2025-26.
c. Financial Literacy Centres: The Bank has 163 Financial Literacy Centers (FLCs). The Target groups of the programmes conducted by FLCs are Farmers, Self Help Groups, Micro and Small Entrepreneurs, Senior Citizens etc. Total number of seminars/programmes/ camps conducted by FLCs on Financial Education, Preventive Counselling and Customer Rights from 1st April, 2025 to 31st March, 2026 is 10,810 and number of persons attended these programs are 4,17,254.
VI. Risks & Concerns
Risk is integral part of the Banks business operations. The Bank is exposed to major risks namely credit risk, market risk, operational risk, liquidity risk, interest rate risk, among others and has put in place measures, policies, systems and procedures to manage and mitigate those risks. The Bank also has a reliable internal controlling environment to manage materials risks such as Reputational Risk, Strategic Risk, IT Risk, Cyber Risk, Compliance Risk, ESG Risk, Climate Risk, Conduct Risk and other Residual Risks. The Board of Directors of the Bank has constituted various SubCommittees of Board and/or Functional Committees to look into different areas of strategic importance.
1) Credit Risk Management
The Bank has a robust Credit Risk management framework and has developed comprehensive risk scoring/ rating system that serves as a single point indicator of diverse counterparty risk factors for consistent credit decisionmaking.
The Bank has in-house credit risk rating models for borrower risk assessment and has also developed and implemented scoring models for Retail advances, MSME and Farm sector advances credit scoring models to capture the specific characteristics of lending schemes designed for these segments.
Output of credit rating and scoring models is linked to decision making processes, including credit sanctioning, pricing, loaning powers, audit, review & monitoring of credit portfolio. The Bank has put in place several policies covering various aspects of credit risk management to ensure uniform and effective lending practices.
The Bank has launched E-Renewal Scheme, an automatic/Straight Through Process (STP) mechanism for renewal of working capital credit facilities up to a specific exposure threshold.
The Bank undertakes periodic validation exercise of its credit risk rating and scoring models to ensure their effectiveness. Migration and Default Rate Analysis are also conducted to test robustness of these models.
In line with the overarching objective of process automation and enhanced compliance, the Bank has launched various digital retail lending products targeting different customer segments. These products utilize a rule-based, system- driven underwriting mechaism, enabling automated, end-to-end or near-end-to- end loan evaluation and credit sanctioning. Separate scorecards have been developed to assess the risks for these products.
The Bank has established a separate Industry Research Desk under Credit Intelligence and Support Department (CIaSD), which carries out in-house risk assessment of industries and prepares industry outlook for more than 160 industries based on calculated industry risk scores. The output of this assessment exercise is translated into Industry Handout which presents executive summary and insights into key industry risk parameters. In addition, quarterly trends categorized as Up, Stable, and Down are also provided by encapsulating significant developments across industries during the quarter.
These processes help achieve quicker and more accurate credit delivery and monitoring, bring uniformity in appraisal, and facilitate effective storage and analysis of data.
2) Market Risk and Asset Liability Management
The Bank has established a well-defined organizational structure for Market Risk Management, which oversees the comprehensive management of risks such as interest rate risk, equity price risk, and foreign exchange risk, while implementing methodologies for measuring and monitoring these risks to maintain a healthy and liquid investment portfolio. The investment policy incorporates robust methodologies for the measurement, monitoring, and control of these risks.
An independent Mid Office for Treasury Operations is already functional with a distinct reporting line to Group Chief Risk Officer (GCRO) to ensure independence from Front Office Treasury Operations. Further, the Market Risk Management Committee (MRMC) a functional committee of the Bank is constituted to oversee the overall framework for market risk management. The committee reviews risk exposures and adherence to approved regulatory and internal limits, therbey ensuring prudent and proactive management of market risk.
The Mid Office monitors various risk positions through statistical tools like VaR, stress testing, and sensitivity analysis, including Modified Duration, PV01, exposure limit etc. to ensure effectively management of the Investment portfolio.
For Overseas operations, risk limits like VaR, NOOP, AGL, Interbank Investment Limit, Exposure Limits etc. are continuously monitored by the Mid Office. To strengthen monitoring and make it more system-driven, tools and limits have been integrated and automated within the Finacle Treasury Application for better monitoring and management of market risks. Further, to capture the impact of exposure risk across different countries, Country Risk Premium
has been incorporated into the pricing structure for effective risk-based pricing.
3) Operational Risk Management and IT Risk
Bank has in place a well-defined Governance structure, Operational Risk Management Committee (ORMC) and policies/frameworks for effective management of Operational Risk in the Bank.
The Bank identifies, measures, monitors and mitigate/control Operational Risk using various risk management tools viz. Internal/External Operational Risk Loss Data, Incidents/Near Miss Events, Risk & Control Self-Assessment Surveys (RCSA Surveys), Risk Indicators (RI)/Key Risk Indicators (KRIs), Assessment of Money Laundering & Terrorist Financing Risk and Scenario Analysis.
The Bank has a robust mechanism in place for approval of new product/service/ process/activity/system and modification in existing ones including assessment of inherent and residual risk.
The Bank has also established a comprehensive Business Continuity Management (BCM) and Operational Resilience (OR) Policy outlining the provisions to ensure uninterrupted delivery of critical business services during disruption, including governance structure. In addition, the Banks operational resilience is underpinned by dynamically updated Business Continuity Plans (BCPs) across all critical software applications. This proactive framework mitigates any adverse impacts on the Banks financial health, customer service continuity, operations, market reputation, and regulatory compliance arising from any unforeseen disruptions. The operational resilience of the Bank is steered/reviewed by Business Continuity & Operational Resilience (BCORE) Committee, headed by Executive Director.
The Bank has online SAS Operational Risk Solution to take care of various aspects of data capturing such as Loss Data, Risk & Control Self-Assessment (RCSA), Incident Reporting etc. and Management Information System (MIS) at various levels for effective management of Operational Risk across the Bank.
The Bank has in place a comprehensive IT and Information Security Risk Management Framework to identify, assess, monitor and mitigate IT risk. Further, AI and ML Governance and Risk Management Framework is in place to address the risks associated with AI & ML in the Bank. A well-defined Incident Escalation Matrix is also in place to enable internal oversight, facilitate effective response mechanisms. To effectively manage IT risk, the Bank deploys a comprehensive lifecycle of identification, measurement, monitoring, and mitigation. Key operational activities include regular risk assessments of critical applications and the active monitoring of systemic Risk Indicators (RIs) and Key Risk Indicators (KRIs).
The Bank has also initiated incident Reporting, wherein, any employee of the Bank can report the gaps observed in any p ro d u ct/s e rvi ce/p ro cess/a cti vi ty/syste m as well as any near miss event. An escalation matrix has also been defined for disposal of reported incidents.
Underpinned by a comprehensive Third- Party Risk Management Policy, the Bank governs all vendor relationships across a strict end-to-end lifecycle (Onboarding, Ongoing, and Offboarding). This framework ensures proactive risk identification and mitigation at every stage. Relationships are continuously evaluated based on service criticality and risk profiles, effectively safeguarding operational resilience, ensuring regulatory compliance, and strengthening customer trust.
4) Internal Capital Adequacy Assessment Process (ICAAP) & Stress Testing
The Bank maintains a robust Internal Capital Adequacy Assessment Process (ICAAP) policy, which is subject to an annual review. The ICAAP document is presented to the Board on a semi-annual basis. The ICAAP involves evaluating capital requirements under both normal and stressed conditions, assessing risks in accordance with both Pillar I and Pillar II of the regulatory framework, and providing a comprehensive view of the various risks to which the Bank is exposed. The Bank identifies and evaluates all material Pillar II risks it is exposed to and ensures capital is allocated, wherever necessary, to address these risks appropriately. The risk management processes are thoroughly outlined in the ICAAP document, which is prepared on both a solo and consolidated basis at the group level.
The Bank also has put in place comprehensive Policy on Stress Testing to identify the vulnerabilities and assess capital/liquidity requirements under adverse but plausible scenarios. Stress tests are conducted across whole gamut of risks namely Credit risk, Market risk, Operational risk, Concentration risk, Interest Rate Risk in the Banking Book (IRRBB), Liquidity risk, Country risk, Group risk, Pension Obligation risk, etc. on a regular basis. Impacts estimated in stress testing exercise serves as an input in capital planning exercise of the Bank. Funding requirements under liquidity stress scenarios are also used for setting objectives of Contingency funding plans.
5) Risk Appetite Framework
The Bank has a comprehensive Risk Appetite Framework in place. The Framework sets out the Risk Appetite Statement along with governance and monitoring mechanism for its effective implementation within the Bank. Risk
Appetite has been defined in terms of different key risk parameters along with the Risk limit and Risk threshold level for each parameter. Actual risk levels are monitored against the approved limits on an ongoing basis.
6) Risk and Compliance Culture
A strong risk and compliance culture is fundamental to our operations and ensures the safety and soundness of our business. To continually assess and enhance this culture, the Bank conducts periodical employee surveys to evaluate awareness and engagement with risk and compliance practices. The results of these surveys are analyzed, and action plans are developed to address any gaps and strengthen our approach. Our comprehensive training programs and an incentive/disincentive framework aligned with our risk appetite, help ensure adherence to our risk management principles.
A dedicated, Board-approved policy underpins the commitment to maintaining a robust risk and compliance framework. Additionally, the Bank celebrates Risk and Compliance Awareness Day on 2nd May each year, further reinforcing our dedication to fostering a culture of responsibility and vigilance.
This proactive approach not only mitigates risks but also enhances customer trust, ensuring that our clients experience secure and reliable banking services built on a foundation of transparency and accountability.
7) Group Risk
Risk Management at Group Level is to manage the risks of the Bank as part of the group and assess the potential impact of other group entities on the overall risk profile of the Bank. The Bank has group risk
governance framework/structure which is based on pyramid approach, starting with Group Risk Policy at top and progressing through risk appetite, governance, processes and risk reporting. The Bank has formed a Group Risk Management Committee for effective management of group risk. The Bank has a strong Group Risk oversight of all the group entities, including the group risk assessment of Subsidiaries, Associates and Joint Venture (JVs), Impact of stress testing of subsidiaries and overseas branches on consolidated level, Liquidity Risk Management through Group Liquidity Coverage Ratio (LCR), Consolidated Prudential Report (CPR), Prudential limit and Contingency Funding Plan (CFP). Further Group ICAAP is prepared to assess the various risks (both Pillar I and Pillar II) the group is exposed to, mitigation of these risks and to arrive at an internally computed level of capital adequacy consistent with these risks.
8) Climate Risk
Climate-related risks refer to the potential challenges that may arise from climate change or from the measures undertaken to mitigate its effects, along with the resulting economic and financial consequences. These risks can impact the financial sector primarily through two channels-physical risks and transition risks.
Physical risks encompass the economic costs and financial losses resulting from the increasing frequency and severity of extreme weather events, gradual long-term shifts in climate, and indirect effects such as the degradation of ecosystem services. Transition risks, on the other hand, emerge from the transition towards a low-carbon economy, including changes in policy, legal frameworks, technology, and market dynamics.
To accelerate efforts in this critical area, the Bank has in place a dedicated
Climate Risk Management Cell, tasked with implementing a structured plan focusing on four strategic areas: Net Zero ambition, Risk Management, Operational Integration, and Climate Risk Governance. To strengthen oversight and coordination of sustainability initiatives, the Bank has also constituted a Sustainability and Resilience Committee (SARC).
Furthermore, the Bank has adopted a Green Deposit Policy. It has also established a Financing Framework for Green, Social, and Sustainability-Linked Activities/ Projects, which has undergone an external review, along with a Green Bond issuance Framework to support its sustainable financing objectives.
The Bank has significantly enhanced its internal capabilities for managing climate- related risks. A comprehensive physical risk assessment has been conducted across the lending portfolio to evaluate the vulnerability of underlying assets. In parallel, a transition risk assessment of borrowers has been carried out by capturing their carbon emissions data, including Scope 1 and Scope 2 emissions.
The Bank has implemented a robust Greenhouse Gas (GHG) measurement framework based on the internationally accepted GHG Protocol, along with a methodology for calculating financed emissions in alignment with the Partnership for Carbon Accounting Financials (PCAF) standards. Further, the Bank is PCAF signatory since November2024. In addition, a qualitative climate risk strategy has been formulated, by incorporating global best practices in climate risk management.
In line with global standards, the Bank has introduced a dedicated Climate Risk Management Policy that incorporates the four pillars outlined by the Task Force
on Climate-related Financial Disclosures (TCFD)-Governance, Strategy, Risk Management, and Metrics & Targets.
As part of its borrower support strategy, the Bank has also developed a structured client engagement approach to assist in their decarbonisation journey. In the first phase of this initiative, the Bank released a Client Engagement Handbook designed to equip credit officers with practical tools and insights to help borrowers better understand climate-related requirements and adopt actionable sustainability measures.
Bank has published its inaugural Sustainability report 2025 on its website marking an important step in its Climate/ ESG journey The Bank has set a Net Zero target year of FY2031 for Scope 1 and Scope 2 emissions, and a Net Zero target year of 2060 for Scope 1, Scope 2, and Scope 3 emissions.
The Bank is participating in the RBI Regulatory Sandbox initiative to integrate climate risk into credit risk assessment, with a specific focus on the home loan portfolio.
Further, the Bank has onboarded Knowledge partner to support emissions calculation and automation, deployment of the tool for climate-related dashboards, climate risk assessment and stress testing, exploration of sustainable finance opportunities, preparation of the Banks sustainability report, overall ESG reporting, and consultancy support for developing a granular roadmap towards achieving the Banks Net Zero commitments.
Despite these advancements, the Bank continues to face challenges, such as limited availability of India-specific data, absence of a standardized Indian taxonomy for green activities, and insufficient
evidence regarding the commercial viability and returns potential of emerging green sectors. Nevertheless, the Bank remains committed to addressing these constraints while advancing its climate risk management agenda.
Regulatory Guidelines
The 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 norms.
The 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 calculating capital and RWA as per Foundation Internal Ratings Based (FIRB) to RBI on quarterly basis. The Bank has submitted a formal Letter of Intent for adoption of Advanced Internal Rating Based (AIRB) Approach for Credit Risk and Internal Models Approach (IMA) for Market risk.
The Bank is calculating Expected Credit Loss (ECL) as per Indian Accounting Standard (Ind AS)-109 on quarterly basis and the results are submitted to RBI in prescribed Proforma on half-yearly basis. Further, Bank is in process of automating the entire ECL calculation and reports through vendor-based solution.
The Bank has developed Risk Adjusted Return on Capital (RAROC) framework which provides the Bank with a single scale for comparing the return on capital for a credit proposal to enable credit decisions. The framework helps in assessing whether returns generated by the business proposition are commensurate with the risk perceived, thereby maximizing the value of shareholders equity.
New Initiatives undertaken during FY 2025-26 are as under: -
1. Operational Risk and IT Risk Management
a. AI and ML Governance and Risk Management framework is a structured approach for identifying, assessing, and managing the various risks associated with the use of AI and Gen Al within the Bank. It provides a systematic way to understand, prioritize, and mitigate risks to ensure the security, reliability, and resilience of AI and ML.
b. Revamping of IT Risk Scorecard: The IT Risk Scorecard has been comprehensively revamped. Scope has been expanded to all applications and information assets, with emphasis on critical and significantly important applications.
c. Risk Indicator/Key Risk Indicator (RI/ KRIs) related to IT & Cyber Security are identified and reviewed to observe, monitor, and oversee IT and Information Security risk.
d. To assess IT risks before conceptualizing or approving new or updated products or processes, a standard Risk Assessment Committee (RAC) mechanism has been introduced.
e. Standardized the existing process
of Risk Side Clearance of UAT by defining the checklist for evaluation. The purpose of this checklist is to comprehensively evaluate the products/processes/systems to
ensure their quality and reliability, thereby reducing the likelihood of faults occurring in a live production environment.
2. Credit Risk
a. Bank is in process of implementing the
ECL framework as per RBI guidelines.
b. Development of RWA as per revised RBI guidelines of capital charge for Credit Risk under Standardized approach in in process.
3. Policy
a. Formulated new Guidelines for financing to Champion Sectors (Renewable Energy and Power Transmission), Green Hydrogen and its derivatives and Small Modular Reactors (SMRs).
4. ALM
a. Bank has adopted Internal Liquidity Adequacy Assessment Process (ILAAP) comprehensive framework to identity, measure, monitor, forecast and manage the liquidity position under normal and various stress scenarios.
b. Automation of Liquidity Coverage Ratio (LCR) and Net Stability Funding Ratio (NSFR) reports under project OFSAA.
5. Market Risk
a. The computation of capital charge has been fully automated in system ensuring accuracy, consistency and real time calculation in line with regulatory requirement.
b. Investment Portfolio Dashboard has been developed and automated within EDW to enable real time tracking of investment portfolio.
c. Country Risk Exposure Dashboard has also been developed in EDW to track the exposure to various country in real time basis.
6. Group Risk
a. Risk Management Framework for BO: IBU Gift City Acting as Trading and Clearing Member On India International Bullion Exchange IFSC Limited (IIBX).
b. Framing of new policies/framework for group entities i.e New Product Approval, Incident Response Framework, Climate Risk & Environmental, Social, and Governance (ESG) Risk. These policies/ Framework serves as a broad guiding document for group entities for formulating policies/framework at their respective level, keeping in view of their area of operation, line of business and organizational structure.
c. In- house Incident Reporting Portal for group entities to submit critical incident reports.
VII. Cyber Security Centre of Excellence (CCoE)
The Bank places a strong emphasis on cybersecurity, with oversight provided by the Group Chief Information Security Officer (GCISO) and execution managed by the dedicated Cyber Information Security Division (CISD). It is looking after the entire cybersecurity lifecycle, from the implementation and deployment of controls to continuous monitoring, ensuring robust protection of the IT infrastructure against a wide range of cyber threats.
To reinforce our defences, the Bank keeps upgrading its cybersecurity components. These efforts are complemented by a dedicated Cybersecurity Compliance Team, which ensures strict adherence to regulatory mandates. The Attack Surface Management (ASM) program plays a key role by providing continuous identification and remediation of vulnerabilities in publicfacing applications.
Key initiatives include aggregating various threat intelligence feeds into a Threat Intelligence Platform and integrating it with the Next-Generation Security Operations Centre (NGSOC) to enable proactive threat prediction and management.
Next-Gen SOC is an advanced security framework that uses automation, AI, and integrated technology to proactively detect, analyse, and respond to cyber threats in real-time, improving traditional SOCs by reducing alert noise, speeding up incident response, and optimizing resource allocation.
The Bank is also strengthening security of public-facing assets through SSL/TLS assessments using SSL scanning tool to identify weak configurations and improve cyber resilience.
An independent second line of defence is provided by the Information and Communication Technology Risk function, ensuring a balanced risk management approach. Further independent assurance is offered by the Internal IS Audit team within the Audit and Inspection Department.
Under the One State, One RRB policy effective 01.05.2025, PNB-sponsored RRBs now include West Bengal Gramin Bank (merger of BGVB, PBGB & UBKGB) and Bihar Gramin Bank (merger of DBGB & UBGB). Cybersecurity integration of these entities with Banks infrastructure is being undertaken in a phased manner. A comprehensive assessment of the cybersecurity risk posture of individual Regional Rural Banks (RRBs) was undertaken based on the Financial Services Sector Coordinating Council (FSSCC) Cybersecurity Assessment Model, adapted from the Federal Financial Institutions Examination Council (FFIEC) Cybersecurity Assessment Tool (CAT).
Bank is set to host the PSB Cybersecurity Hackathon 2026, in collaboration with the prestigious Indian Institute of Technology (IIT), Kanpur. This initiative is supported by the Department of Financial Services (DFS), Ministry of Finance (MoF). The proposed theme of the event is Quantum-
Proof Systems which will aim to develop a software scanner by the participating students, to validate deployment of Quantum proof cipher (QPC) and create cryptographic bill of material inventory for pubic facing applications (Web server, API, systems).This initiative is in line with the Government of Indias Vision of Viksit Bharat and Self-reliance.
VIII. Physical Security
The Bank has well established security and fire safety set-up with clear-cut delegation of authority and responsibility to the Security Officers functioning at Head Office and at the field level.
Security Division functions through various instructions/guidelines which are consolidated in the form of Physical Security Policy and Fire Safety Policy. Security Division ensures physical safeguarding of the Banks asset, its fire safety arrangements and safety of its staff/customers.
All the Banks branches are strengthened with the latest security and fire safety gadgets such as Closed-Circuit Television (CCTV) System with minimum 90 days recording, Burglar Alarm System, Fire Alarm System, auto dialers, Passive Infrared (PIR) sensors, light sensors, portable fire extinguishers, modular fire extinguishers etc. Furthermore, Branches dealing with locker facility are strengthened with additional CCTV cameras and hard disc with a provision to store CCTV recording till 180 days.
The Bank has a system of guarding all the branches as per their Physical Security Risk profile categorized into High Risk, Medium Risk and Low Risk branches and there is a provision to post security guards in High Risk branches.
For the safety of vital installations like Server Rooms, DR Sites, two layer physical security arrangements, Early Fire Detection
and Alarm System, Fixed Firefighting System, Clean Gas based Fire Suppression System in server rooms and various types of Fire-Extinguishers are provided.
In accordance with the Standard Operating Procedures on Hiring of Customized Cash Vans, adequate number of Customized Cash Vans are hired in each Zone which are equipped with Global Positioning System (GPS) tracking system, fire extinguisher and CCTV system. The movement of Cash vans is controlled at Currency Chest level.
In order to meet any kind of disaster, the Bank has a well-established Business Continuity & Contingency Plan (Non-IT). Offices upto Branch level have Emergency Response Team to respond immediately to any kind of contingency like Fire incident, Earthquake, Terrorist attack, etc. Arrangements have been made to train Bank staff at training centers through Security and Fire Safety videos. Moreover, Demonstration boards for Security and Fire safety have been set up at major training centers. In addition to above, firefighting and evacuation drills are carried out by the Banks Fire Officers and Security Officers at all Admin offices once a year and when visiting branches/other offices.
A team of dedicated Security Officers and Fire Officers are posted at Zonal Offices & Circle Offices with prime responsibility to carry out audit of physical security measures at branches, installation and maintenance of Security gadgets and to liaison with Police/State authorities in respect to Physical Security and Fire Safety. They act as advisor to respective Zonal Head/Circle Head in all matters related to Physical Security/safety, movement of cash and Fire Safety.
New Initiatives undertaken by the Bank in FY 2025-26:
i. The Disaster mock drills (non-IT) are conducted with NDRF/ SDRF/ DDMA authorities to improve the disaster
resilience of the Bank. A DR mock drill at HO Dwarka building was conducted in coordination with NDRF/ DDMA on 30.11.2025. Further, mock drills are conducted at all the field offices with the help of such authorities at least once in a year to improve disaster resilience of the Bank.
IX. Internal Control System
a) Internal Audit
During FY 2025-26, Risk Based Internal Audit (RBIA) was commenced/conducted in 9,003 branches/offices. During FY 202526, 1527 branches/offices were covered under Concurrent/Continuous audit, covering 72.35 per cent of the advances and 37.15 per cent of Banks Deposits as on 31st March, 2025.
Information Security (IS) Audit was conducted in 163 offices/ units. FEMA Audit was conducted in 267 eligible branches/offices i.e. Authorized Dealer (AD) branches & Trade Finance Centers All branches were subject to revenue audit.
b) Offsite Monitoring
To strengthen Offsite Monitoring of branches/offices, bank has constituted a dedicated Data Analytics team, namely the Offsite Surveillance Unit (OSU). The OSU conducts regular data dump analysis and recommends enhancements in systems and procedures for mitigation of identified operational risks.
During FY 2025-26, the team undertook 245 studies and recommended 177 system-level enhancements, out of which 61 enhancements have already been implemented.
Further, the OSU module is being utilised in CISAP portal, resulting in improved MIS generation, and enhanced inter-divisional communication. Studies are classified based on criticality levels, namely High, Medium, and Low.
c) Risk Based Internal Audit of Administrative Office
The Bank has prescribed Risk Based Internal Audit system for conducting audit of its Administrative Offices.
The audit captures risk perceptions inherent in various areas of functioning of administrative offices including decision making process, communication systems, efficient resource utilization and ways & means used to achieve the goals, etc.
All HO Divisions (Except Vigilance Division), Zonal Offices, Circle Offices, Domestic & Overseas subsidiaries to be audited on annual basis. All other administrative offices will be audited on annual basis except Low risk rated offices, which will be subject to audit once in two years. The Inspection and Audit Division will be subject to audit once in three years by external Auditor.
During FY 2025-26, audit of 247 administrative offices comprising 138 Circle Offices, 22 Zonal Offices, 22 ZAOs, 14 STCs/ALIs, 8 Regional Rural Banks, 37 Head Office Divisions, 3 domestic subsidiaries, 2 overseas subsidiaries and 1 Office of the Internal ombudsman was conducted.
d) Credit Audit and Review
During FY 2025-26, Credit Audit has been undertaken for a total of 5,173 loan accounts both domestic and overseas. In terms of Credit Audit & Review Policy, during FY 2025-26, the coverage of Credit Audit is 66.63 per cent of the Banks total credit portfolio as on 31st March 2025 against RBI and our Banks policy requirement of at least 30 to 40 per cent in a year. The Bank is conducting credit audit through online Credit Audit module, which is a transparent, effective, accurate and time saving tool for better monitoring of Credit Audit.
e) Know Your Customer (KYC)/Anti Money Laundering (AML)
To ensure meticulous compliance with RBIs KYC guidelines across all branches and offices, the Bank has adopted a Board- approved Know Your Customer (KYC) Policy. The policy covers key parameters such as KYC updation, identification of beneficial owners, UCIC, and CKYC compliance, and is implemented in both letter and spirit.
For centralized account opening, the Bank has established CASA Back Offices, while a Document Management System (DMS) has been deployed to digitize customer records. Additionally, an AML system is in place to monitor transactions for potential money laundering, generate AML alerts, and screen customers against global sanctions lists.
To enhance staff awareness, an online basic KYC course on PNB UNIV has been made mandatory for branch employees, and every training program at Bank training centres includes a dedicated session on KYC/AML compliance.
In case of no change in KYC details of the customer, convenient KYC updation facility through SMS, WhatsApp, ATMs and BCs has also been introduced.
f) Central KYC Registry (CKYCR):
For establishing an account-based relationship, updation/ periodic updation or for verification of identity of a customer, the Bank shall seek the KYC Identifier from the customer. The Bank can retrieve the KYC Identifier, if available, from the CKYCR and proceed to obtain KYC records online by using such KYC Identifier and shall not require a customer to submit the same KYC records. At the time of customer onboarding, CKYCR search and download has been implemented on all account
opening channels to facilitate account opening using CKYCR number.
To further promote CKYCR adoption, the CKYCR number is displayed on account statements, passbooks, Internet Banking, PNB ONE, the corporate website, and other customer interfaces.
g) Data Governance & Data Quality Index (DQI):
With reference to recommendation of IBA EASE Steering Committee for Data Quality Improvement in PSBs, bank aimed at developing a uniform Framework to be adopted for a robust Data Quality Program in bank.
Data Governance Policy has been approved by the board. Main highlights of this new policy are: -
o Chief Data Management Officer (CDMO) - Responsible for overseeing data quality and customer data privacy in the Bank
o Head Office Data Governance
Committee (HODGC)- The supreme body sponsoring the overall Data Governance Initiative, establishing directives and decisions related to data within the bank.
o Division/Vertical Data Governance Committee (DDGC)- Data Governance Initiative implementation as per Data Governance Policy and HODGC directive.
o Zonal Office Data Governance
Committee (ZODGC)- Data Governance Initiative Implementation Monitoring
o Circle Office Data Governance
Committee (CODGC)- Data Governance Initiative Implementation Monitoring
o Data governance officer (DGO) at different level i.e. HO Division, ZO, CO and Branches. DGOs will be the Single point of Contact (SPOC) for any Data Governance activity at respective level.
As per IBA sub-committee recommendation, all 25 DQI Parameters implemented through Dashboard for data quality improvement. Dashboard is available to all HO Divisions, ZOs, COs and Branches for rectification and monitoring. Further, 5 new DQI parameters have been added in the Dashboard w.e.f. 1st September 2025.
h) Data Privacy:
In compliance with the Digital Personal Data Protection (DPDP) Act, 2023, the Bank strengthened its data privacy framework during the financial year. The key initiatives undertaken are as follows:
1. The Policy on Digital Personal Data Protection was approved by the Board of Directors.
2. Data Protection Officer (DPO) has been appointed to oversee the implementation and ensure ongoing compliance with the provisions of the DPDP Act, 2023, across the Bank.
3. A comprehensive Bank-wide gap assessment was conducted, covering all divisions, technology systems and operational processes to study and analyse the prevailing provisions of the DPDP Act, 2023 with the objective of ensuring effective adherence to the Banks regulatory obligations as a Data Fiduciary
4. The assessment facilitated the identification of key compliance gaps and the development of a detailed remediation roadmap, which is currently being implemented across the Bank.
These proactive initiative underscores the Banks commitment to fulfilling its obligations under the DPDP Act, including lawful processing of digital personal data, effective management of Data Principal Rights, implementation of reasonable
security safeguards and establishment of robust data protection governance, thereby safeguarding customer privacy and reinforcing regulatory compliance in the digital banking ecosystem.
i) Vigilance
Vigilance is a fundamental management function vital for nurturing transparency, accountability and ethical practices within the organization. It promotes efficiency in both personal and professional spheres, preventing immoral activities, fostering a safe environment to build an effective organizational management.
At Punjab National Bank, we prioritize integrity and transparency in all our operations. Our Vigilance Department plays a crucial role in maintaining the highest standards of ethics and compliance.
The Bank is committed towards prevention and detection of fraud, identifying potential risks and taking proactive measures to mitigate them. The Bank ensures Compliance and Monitoring by adhering to regulatory guidelines, policies, and procedures that are formulated/ designed to ensure that bank operates with the highest standard of integrity and transparency at all the times.
Due to efficiency achieved through preventive vigilance measure, effective monitoring mechanism and supervisory oversight over cases, bank is able to dispose-off 499 cases out of 537 cases registered during FY 2025-26 i.e. 92.92 per cent.
Bank has taken various initiatives to improve the efficiency of Vigilance Administration like publishing of Magazine, PNB Vigil. The Vigilance Department is conducting online quizzes on Banks products, circulars, operative guidelines, vigilance advisories and general banking awareness on regular basis. Further, various training sessions/
seminars have been organized on PAN- India basis, wherein officials from Vigilance Department participated and interacted with participants on Vigilance matters.
In addition to the above, the Bank is proactively working and using innovative ideas for strengthening vigilance
administration and compliance. In FY 20252026; the Bank worked on the following activities: -
a. Revamping and Transforming the
Preventive Vigilance Monitoring
Committee (PVMC) Portal to give a fair view of branchs business data/inspection ratings through integration of Portal with Enterprise Data Warehouse (EDW) and implementation ofBiometricAuthentication of Committee Members, through Human Resources Management System (HRMS) and Biometric Authentication System (BAS), to enable the Committee Members to authenticate the minutes of meeting in true spirit.
Further, in order to make the Portal more efficacious/effective, the functionality of confirming Senior Officials visit to branch and closure of observations made by them have been enabled therein.
The verticals including International Service Branches (ISBs) and Centralised PNB Loan Point have also been brought under the ambit of PVMC portal.
b. Systemic Improvements related to identification of sensitive posts and disabling of CBS user ID of employees during their leave/absence have been implemented in all the 8 Regional Rural Banks, sponsored by our Bank.
c. Punjab National Bank observed Vigilance Awareness Week (VAW) 2025 from 27th October,2025 to 2nd November,2025 with the theme Vigilance: Our Shared Responsibility. During the campaign, approximately 7.22 crore impressions
were generated among the public through workshops, walkathons, seminars, public gatherings, nukkad nataks, preventive vigilance activities, CSR initiatives, blood donation camps, and other outreach programmes, compared to 4.90 crore impressions during the previous year.
Highlights of Vigilance Awareness Week,
2025: X.
i. PAN India Blood Donation camp was organized during VAW Week, wherein more than 4,709 units of blood was donated.
ii. A total of 8,773 Gram Sabhas, involving 1,66,170 participants, were conducted in rural and semi-urban areas.
iii. Three quizzes on Preventive Vigilance were conducted for the staff members,
with a total participation of 1,77,062 XI. staff members.
iv. Various outreach activities were conducted in 1,970 schools & colleges across PAN India.
v. Approximately 20,000 Business Correspondents were imparted online vigilance training.
vi. A total of 25,980 employees completed Stress Management course on iGOT Karmayogi Portal.
vii. A total of 11,847 employees were imparted training by Master Trainers on Investigation & Report, Framing of Chargesheet, Conducting CTE Type Intensive Examinations. Further, various trainings on preventive vigilance topics were also conducted during the VAW.
viii. 16 Systemic Improvements related to different fields viz., HRD, DAC, Advances, Operations, Alternate
Delivery Channels, etc., were identified and implemented in our Bank during the precursor period to Vigilance Awareness Week i.e., Three-month campaign period from 18.08.2025 to 17.11.2025 launched by Honble Central Vigilance Commission on Preventive Vigilance.
Right to Information (RTI) Act
The Bank recognises that transparency is essential for establishing and maintaining sustainable trust with both current and prospective customers. To uphold this commitment, the Bank diligently implements the provisions of the RTI Act, both in principle and in practice.
During the period of 1st April 2025 to 31st March 2026, the Bank received 7,014 RTI related applications.
EASE Performance
The Enhanced Access & Service Excellence (EASE) initiative, launched by the Department of Financial Services under the Ministry of Finance, has become a cornerstone of Public Sector Bank (PSB) reforms since 2018. Over its eight iterations, EASE has progressively transformed PSBs from being responsive and responsible institutions in EASE 1.0, to clean and smart banking in EASE 2.0, smarttech enabled banking in EASE 3.0, techenabled simplified and collaborative banking in EASE 4.0, enhanced digital and data-driven banking in EASE 5.0, customer- friendly modern banking in EASE 6.0, and banking aligned with national goals in EASE 7.0. In its current edition, EASE 8.0 has been designed as a forwardlooking framework structured around four themes; - Risk & Resilience, Innovation, SocioEconomic Impact, and Excellence, ensuring that PSBs remain competitive, resilient, and customercentric.
The bank has consistently performed strongly under the EASE agenda, securing 3rd rank in EASE 5.0, 2nd in EASE 6.0, and 4th in EASE 7.0.
The bank has made notable progress under the EASE 8.0 initiative. It achieved 2nd rank among 12 PSBs during the December quarter, with 1st rank in Risk & Resilience and 3rd in Excellence showing 134 per cent improvement in its score from the baseline. This performance is supported by a wide range of initiatives that enhance customer experience, operational efficiency, inclusivity, sustainability, and employee wellbeing.
Key achievements include - Customer centric measures like a dedicated Customer Experience Centre for feedback collection & usage of analytics to improve customer service, setting-up Net Promoter Score (NPS) & Customer Satisfaction (CSAT) framework to collect and process feedback for distinct services availed at branch & through digital channels, multilingual services in 11 regional languages and the rollout of digital innovations such as UPI Circle in mobile banking app. Operational Resilience has been Strengthened with additional features in the Operational Risk Management System (ORMS) tool.
A centralized Cost Map dashboard showcasing Operating Expenses has been designed to track and allocate operating expenditure at granular levels. Accessibility has been prioritized through Divyangjan Accessible Centres, creation of an accessibility cell within the bank to cater to the needs of the physically challenged customers and employees,
roll-out of Braille-enabled cards, and regional language training for employees posted in diverse linguistic regions. Further, customer facing applications such as ATMs, Websites and employee facing applications such as HRMS and Knowledge centre have been made compliant with accessibility standards of WCAG 2.2. Sustainability initiatives such as adoption of electric vehicles and implementation of Building Management Systems have been undertaken. In clusterbased agricultural financing - new clusters along with value chains in existing clusters have been identified and monitoring is being done through dashboard. Employee engagement has been reinforced through frameworks such as Employee Happiness Index (EHI), alongside emotional wellbeing assessments and mentorship programs. Further, bank has obtained accreditation of training centers under ISO 9001:2015 and ISO 21001:2018 standards. Also, it has formed Apex training institution collaborating with top notch institutions for providing quality training to its employees as well as participants from other institutions.
The foregoing initiatives underscore the banks commitment towards EASE reform agenda. Starting from 2018 onward bank has continuously aligned itself with the EASE priorities enhancing customer experience and operational efficiency. These efforts ensure that the bank maintains a robust and competitive presence among public sector banks, reinforcing its position amongst top performing banks under EASE Reform Agenda.
XII. Material Developments in Human Resources (HR)/Industrial Relations front including number of people employed
Human Resources Management
Total number of employees: Staff strength/Employees given in the following table are for March 2025 and for March 2026 including those on deputation in the Banks subsidiaries.
Cadre wise Staff Strength
| 31.03.2025 | 31.03.2026 | |||
| Cadre | Number | Per cent of Total Staff | Number | Per cent of Total Staff |
| Officer | 53,137 | 51.72% | 54,614 | 52.93% |
| Clerks | 28,013 | 27.26% | 28,129 | 27.26% |
| Sub Staff (incl. PTS) | 21,596 | 21.02% | 20,441 | 19.81% |
| Total | 1,02,746 | 100.00% | 1,03,184 | 100% |
Reservation Policy
The Bank follows the reservation policy for SCs, STs, OBCs and PWD as prescribed by Government of India from time to time. Besides as per norms the bank has taken various steps like maintaining reservation roster, separate liasoning officer etc.
Strength of SC/ST/OBC/PWD Employees (in numbers)
| Cadre | 31.03.2025 | 31.03.2026 | ||||||
| SC | ST | OBC | PWD | SC | ST | OBC | PWD | |
| Off i cer | 10,517 | 4,049 | 14,266 | 1,546 | 10,718 | 4,140 | 15,256 | 1,501 |
| Clerks | 5,572 | 1,568 | 7,782 | 884 | 5,560 | 1,571 | 8,035 | 869 |
| Sub Staff | 8,361 | 1,515 | 5,471 | 495 | 8,004 | 1,476 | 5,197 | 491 |
| Total | 24,450 | 7,132 | 27,519 | 2,925 | 24,282 | 7,187 | 28,488 | 2,861 |
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 | Off i cer | Clerical | Sub Staff | Over All |
| March 2022 | 39.24 | 38.28 | 38.03 | 38.71 |
| March 2023 | 39.23 | 38.40 | 36.86 | 38.46 |
| March 2024 | 39.28 | 38.67 | 37.45 | 38.70 |
| March 2025 | 39.12 | 38.70 | 38.17 | 38.81 |
| March 2026 | 38.58 | 38.31 | 38.44 | 38.48 |
New Initiatives undertaken during FY
2025-26 are as under: -
a) Digitization Initiatives for HR:
- Introduction Of Mobile Attendance Application- PNB Aagman: a Mobile Attendance Application- PNB AAGMAN is being introduced. The app will only allow attendance marking within the office premises, ensuring that attendance can be marked only by employees physically present at their respective office. The application is fully integrated with HRMS, and only those employees with a registered mobile number in HRMS can use the app.
- Reduction of Staff Clean OD Limit through HRMS:
- Staff can now apply for a reduction also in their existing Staff clean OD/DL limit through HRMS, and the updated limit will be reflected in the system after fresh documentation (which can be downloaded from HRMS) at the branch where borrowing Staff maintains the account and processing of the reduced limit in HRMS.
- Digitalization of Banks Flat Allocation.
- Reimbursement of Staff
welfare (Cleansing, Business Attire, Briefcase, Stationary Expenses, Electricity Bill, Fuel, Telephone bills & Entertainment Allowance) through CBDC Wallet.
- To promote digitization in Staff loans, it has been decided to adopt and implement system driven approach in staff housing scheme loan for processing of application through HRMS.
b) Empowering Employees through NPS
Flexibility:
- In line with the Banks commitment
to employee welfare and financial empowerment, Punjab National Bank has introduced a significant enhancement under the National Pension System (NPS). Effective 1st November 2025, employees covered under NPS have the option to select their Pension Fund Manager (PFM) and flexibility to adopt either Active Choice (self-directed allocation across Equity, Corporate Bonds, Government Securities and AIFs) or Auto Choice (age-based life cycle funds) or Balanced Life Cycle Funds to optimize their returns.
c) Centralization of Disciplinary Authority for officers and clerical: In order to bring uniformity, transparency and consistency in the disciplinary process across all field offices, the Bank has decided that disciplinary proceedings be dealt centrally at Head office.
New Staff Welfare Schemes:
a) PNB UDBHAV- Welcoming of female employees post maternity leave:
Bankhas taken a new initiative- PNB UDBHAV to attenuate and to make returning female employees feel happy and welcomed on rejoining. The returning mother is guided by the Nodal Officer/ERG Member about PNB SPARSH (Banks Teleconsulting facility for women employees Post Maternity Leave) and encourage them to avail the facility as the same may help in removing the fears, apprehensions and also help them to smoothly transition into their roles at workplace.
b) PNB ARPAN: A new initiative has been launched named PNB ARPAN under which a lump sum one-time payment is given to the family of the retired deceased employees.
c) Women employees in senior positions - FIVE YEAR ROADMAP: Five years roadmap to ensure increased representation of
women at senior positions with a view that enabling environment be provided to women employees desirous of moving ahead in professional career, through appropriate grooming has created.
d) Reimbursement of vaccination charges for Cervical Cancer to women employees of the Bank: The initiative aims to encourage early preventive measures, increase awareness regarding womens health, and reduce the long-term risk and financial burden associated with cervical cancer treatment, while reinforcing the banks commitment to employee welfare and a supportive, health-conscious workplace.
e) Reimbursement of 1st time school admission expenses for one girl child of employees: To provide assistance to employees by reimbursing 1st time school admission expenses for one girl child in formal school as the education of the girl child is a cornerstone of a progressive society.
f) PNB SAMPARK- A grievance redressal
portal for employees belonging to SC/ ST/OBC/PWD/Minorities: To provide
an exclusive platform for redressal of grievances of employees belonging to SC/ ST/OBC/PwD/Minority Categories, a new Grievance Redressal Mechanism named PNB SAMPARK has been developed.
Industrial relations
Industrial Relations in the bank continued to be cordial with workmen union/Officers association. Various physical meetings at Circle/ Zonal/ HO level were held with representatives of Officers Association/ Workmen Unions during the year to promptly resolve the issues raised by union/association.
Training Activities
In an increasingly dynamic and technology- driven banking environment, continuous learning remains central to sustaining competitive advantage and ensuring regulatory alignment. During FY 202526, the Banks training architecture was thoughtfully designed to be both agile and strategically aligned with organizational priorities. The training calendar emphasised job family and role-based learning, delivered through structured interventions across training centres, with a strong focus on enhancing functional expertise, leadership capabilities, and customercentric service delivery. Notably, during this financial year, the Bank successfully completed training for 90.56 percent of its employees in physical mode, underscoring our commitment to comprehensive skill development and hands-on learning.
The organisation prioritised targeted development initiatives, including dedicated pre-promotion trainings, reinforcing the Banks commitment to cadre progression and leadership readiness. These initiatives ensured that employees transitioning into higher roles were adequately equipped with the competencies required to perform effectively in an evolving financial landscape.
At PNB, a robust HR framework ensures robust capability-building framework, integrating classroom training, e-learning, mentoring, and experiential learning. From induction programmes for new entrants to continuous upskilling for existing employees, all learning interventions are aligned with both individual career progression and the Banks strategic objectives. The adoption of innovative learning methodologies during the year further strengthened leadership pipelines, enhanced workforce capabilities, and reinforced the Banks commitment to nurturing talent and driving excellence.
a. Grooming Plans
- Leadership Development program under PNB Udaan- A refresher
programme under the title Udaan Elevate was conducted for executives who attended the program last year and there was a 65 per cent positive variation is seen in the behavioural competencies of the said officers Further, under Project Udaan, the Leadership Development Program Igniting Potential was extended to Scale IV officers The program focused on functional competencies and behavioural skills, with an emphasis on impact-oriented working and customer centricity.
URJA Programme - Conducted during May-June 2025, this large-scale initiative covered 24,436 Customer Service Associates (CSAs). Through interactive and practice-oriented sessions, the programme significantly strengthened service quality, operational efficiency, and customer engagement.
CASA Back Office & Nodal Officers Training- Specialized programmes were conducted to enhance process efficiency, compliance adherence, and service quality in CASA operations. These interventions contributed towards improved Turnaround Time (TAT), reduced customer grievances, and seamless transaction handling.
Strategic Edge Initiative - To ensure leadership readiness, mandatory development programmes were introduced as a pre-requisite for promotions, equipping senior officials with the skills required to handle enhanced responsibilities.
Executive Development & Foreign Exposure - Senior executives were nominated for overseas training programmes and premier domestic institutes such as IIMs, ISB, MDI, ASCI, and IDRBT, based on role and performance, thereby enabling exposure to global best practices.
Linguistic Training Programmes - To support employees in non-native regions, linguistic training was introduced, focusing on practical communication skills and cultural sensitivity, thereby enhancing customer interaction and workplace collaboration.
Professor of Practice: The Bank empanelled 29 Professors of Practice from leading academic institutions to bridge the gap between theory and practice. These experts are contributing to specialized modules on leadership, innovation, and emerging banking trends.
PNB Manthan - Case Study Competition Conducted in collaboration with the Indian Banks Association (IBA), this initiative fostered analytical thinking, innovation, and problem-solving capabilities among employees.
Cross Bank Training programs -
During FY 2025-26, cross bank training programs were introduced to foster knowledge exchange, sharing best practices, and enhancing exposure to diverse operational frameworks across institutions.
Unnati Path: Women Conclave-A targeted initiative for women officers was held, providing training to 6,358 participants.
Employee Learning Dashboard - A new Employee Learning Dashboard was introduced to offer personalized training recommendations based on profile, learning history, and skill assessment.
AR/VR-Based Learning - The Bank initiated steps towards immersive learning through simulation-based training and upcoming AR/VR integration, enabling experiential, risk- free learning and improved decisionmaking capabilities.
b. Knowledge Enablers
I. PNB Knowledge Centre -
- RAHEE Chatbot introduced to provide quick and easy knowledge assistance to staff members by providing responses based on the circulars and guidelines available in Banks repository.
- Recordings of monthly webinar being conducted on every fourth Saturday of each month on thematic subjects and key developments in the banking sector are also being uploaded under Knowledge Repository in Knowledge Centre.
Additionally, DIY Videos for customer
awareness on various Digital products are available on our website and social media platforms.
II. PNB UNIV- Our bank has been extensively leveraging the e-Learning platform PNB UNIV to promote the culture of selflearning. Courses on various functional competencies are made available on PNBUNIV. The course allocation on PNB UNIV is in line with the assigned job- families of respective officers 212. Courses have been uploaded in knowledge centre as on 31.03.2026.
In addition to this, following Tailor-made training programs to suit employees life cycle have been conducted:
- Programs ranging from induction
to cadre change, role change and upskilling were conducted for
employees of the Bank across all
cadres and scales.
- Customized programs for First Time
Circle Heads and First Time Branch Heads were conducted to facilitate their seamless switch to new roles.
Second Innings programs were conducted for superannuating employees along with their spouses to help them transition to post-retirement life.
On demand programs such as Training on Climate Risk & Sustainability, Vigilance, Cyber Security, SARFAESI provisions, Risk Rating, DMS, etc. was conducted.
Diversity, Equity & Inclusion initiatives
which included dedicated women conclaves across the Bank for all women officers and program for Differently abled Officials.
Refresher training for women returning from sabbatical or maternity leave were organised so that they can reintegrate smoothly into the system and quickly update themselves on new policies and products.
Additional sessions covered essential topics like time management, work- life balance, mental health, stress management, and motivation to support holistic development.
External Trainings - With rapid changes in IT, IBC, cybersecurity, AI, automation, and evolving customer expectations, skill requirements in banking are constantly evolving. To address this, 3122 employees were trained till 31.03.2026 for specialized training at premier institutes like NIBM, IDRBT, CAB (RBI), IIBF, etc.
Capacity Building beyond classroom - The Bank, while recognizing the need for continuous up-gradation of knowledge of its employees, offers incentive to staff members on their acquiring specific higher/ professional qualifications in terms of the approved scheme. The number of approved courses under the Scheme for providing incentive to Staff
Members for acquiring Specialized Qualifications/qualifying Specific Courses, were increased. Additionally, an individual learning dashboard was introduced, enabling personalised course suggestions based on the unique requirements of each employee.
WAY FORWARD
The global economic outlook is characterized by a steady but underwhelming recovery as the world navigates the long-tail effects of geopolitical conflicts and shifting trade policies. The global economy faces real threat of stagflation due to supply chain disruptions and growth is expected to be below pre-pandemic average. Central Banks have an arduous task of stabilising inflation while minimising impact on growth. Due to recent volatility in global financial markets, the US dollar has strengthened, supported by increased safe- haven demand that has placed downward pressure on the currencies of emerging economies. The primary downside risks to the global outlook continue to be the prolongation and geographical expansion of the conflict.
The Indian Economy is expected to maintain robust growth in the current year driven by strong macro-economic fundamentals. Strong domestic consumption, investments and governments public expenditure and infrastructure expansion continues to support the Indias growth momentum.
The prospects for agriculture present a contrasting landscape. While the sector remains fundamentally stable, a developing El-Nino and the resulting forecast of a below- normal monsoon cast a shadow over near-term productivity. However,this risk is being mitigated by a structural shift toward horticulture and technology-driven farming, a transformation specifically engineered to insulate and boost farm incomes against traditional climatic dependencies. Manufacturing is poised to remain on a remarkably strong footing. The sector is currently reaping the rewards of aggressive Government interventions and strategic support frameworks finalized in
the FY2026-27 Union Budget, which have prioritized domestic capacity building and supply chain integration to solidify Indias position as a global production alternative. The service sector remains the economys powerhouse, contributing more than 50 per cent of GDP. It is undergoing a fundamental metamorphosis from a low-cost back office into a high-value global innovation hub. Propelled by the Union Budget 2026-27 and a pervasive surge in digital transformation, this sector continues to significantly outperform the broader economy, leveraging Indias maturing digital public infrastructure.
The Indian economy though faces multi-layered set of risks from prevailing geopolitical conflicts. The near-term outlook remains uncertain, with external shocks posing downside risks to growth through higher input costs and supply constraints, even as domestic demand may help cushion the impact.
In an increasingly uncertain global environment, the resilience of the Indian economy will depend on the strengthening of domestic fundamentals. This will require sustained focus on structural reforms to enhance competitiveness, achieve efficiency gains, and drive investment. At the same time, emphasis on preparedness, policy coordination, and domestic capacity development will remain important for navigating evolving global uncertainties and supporting growth.
The Indian Banking sectors health is expected to remain robust in FY 2026-27. Banks enter the financial year with low NPAs, strong profitability and capital buffers. Retail, MSME and selective corporate demand is expected to keep the credit growth in double digits. Deposit growth is expected to improve though it will continue to lag credit growth.
Banks will continue to leverage the Indias Digital Public Infrastructure and data analytics to build sophisticated and hyper personalized products and services. By leveraging the Account Aggregator (AA) ecosystem and advanced data analytics, banks are shifting from collateral- based lending to cash-flow-based lending. This allows for real-time credit assessments of previously underserved MSMEs.The traditional banking apps are being supplemented by Embedded Finance and Banking as a Service (BaaS) models. Further, Banks are harnessing Fintech synergies with tie ups.
Sustainable Finance is transitioning from a niche ESG requirement to a mainstream asset class. Banks are aggressively expanding their green portfolios, offering preferential interest rates for renewable energy projects, electric vehicle (EV) ecosystems, and climate-resilient infrastructure.
Further, strategic shifts in RBIs policies has allowed banks to expand their lending portfolios in Mergers & Acquisitions (M&A) and Real Estate Investment Trusts (REITs) & InvITs.
Declining Current Account and Savings Account (CASA) ratios are a major concern for banks, as they signal a shift from low-cost, stable deposits to more expensive funding sources, compressing Net Interest Margins (NIMs). Further, the geopolitical uncertainties may cast a shadow over credit portfolios which may push up the slippages, leading to slight increase in Gross NPA though it is expected to remain benign.
Punjab National Bank (PNB) is poised to serve as a vital catalyst in Indias journey toward Viksit Bharat, leveraging its expanded balance sheet to support massive infrastructure and industrial mandates.
Through continuous product innovation and optimization, the Bank will continue to cater to the evolving aspirations of younger demographics, empowering them with tailored credit solutions for housing, vehicles, and education.
To support the MSME ecosystem, the Bank will continue to ensure seamless and timely access to credit, driven by automated digital platforms and predictive cash-flow financing models.
To sustainably expand its low-cost deposit base and improve the overall cost of funds, the Bank is aggressively deploying its suite of specialized, segment-focused CASA products. Moving forward, our strategy
centers on moving away from a one-size- fits-all approach to target distinct, high- value customer ecosystems through tailored propositions, customized savings accounts for women, farmers, students and senior citizens, and digital-first variants for tech-savvy youth. Simultaneously, our current account variants are designed to cater to the specific transaction logic and cash-management requirements of MSMEs, retail traders, and institutional clients. By pairing these specialized product offerings with dedicated relationship-led sales teams and enhanced digital onboarding journeys, the Bank is uniquely positioned to deepen primary banking relationships, accelerate new-to-bank customer acquisition, and drive high-velocity momentum in sustainable CASA growth.
The Banks long-term success is anchored in the trust and satisfaction of our customers. Moving forward, we will continue to strengthen our customer service framework by investing heavily in specialized frontline training, empowering our teams to deliver personalized financial guidance with greater agility. To ensure absolute inclusivity, we are modernizing our customer service channels to cater effectively to both tech-savvy urban millennials and digitally emerging rural demographics. By refining our customer feedback mechanisms and simplifying grievance redressal workflows, the Bank is dedicated to transforming standard transactions into deeply embedded, value- driven relationships that support our clients through every stage of their financial journey.
With these priorities, the Bank aims to enhance its market share and maintain strong, consistent profitability.
Through its Banking for Viksit Bharat
initiatives, PNB ensures that its growth is not just rapid, but grounded in financial discipline, making it a dependable pillar for both rural inclusion and corporate expansion.
For and on behalf of Board of Directors
Ashok Chandra
Managing Director & CEO
IIFL Customer Care Number
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1860-267-3000 / 7039-050-000
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