punjab national bank Management discussions
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
I. Industry Structure & Developments
The global economy in FY 2022-23 showed signs of resilience due to the lower food prices, easing supply chain disruptions, stronger than expected consumption and investment and a buoyant labour market. This is despite the challenges thrown up by the geo political conflicts post Russia-Ukraine War, inflation in majority of the economies leading to rate hikes by major central banks and stress in the US banking sector. As per World Economic Outlook of IMF, the global growth for 2022 is estimated at 3.4 percent.
The Indian economy held strong grounds amidst the global headwinds. India was the fastest growing economy in FY 2022-23 with provisional estimated growth rate of 7.2 per cent (as per National Statistics Office, NSO), higher than the trend rate and the growth of the other major economies. As per the Economic Survey, the economy is expected to grow at the rate of 6.5 per cent in FY 2023-24 on the back of robust revival of agriculture, services, consumption, stable corporate performance and increased capital expenditure by the government. India is currently 5th largest economy in the globe and aspires to be the 3rd largest economy by 2027-28.
Indias underlying growth potential is fundamentally strong and macroeconomic indicators are stable. The current account deficit is modest and inflation is also stabilizing. The financial sector is well- capitalized and sound. Further, Indian currency remained largely stable. The external debt to Gross Domestic Product (GDP) ratio i.e. currently 19.1 per cent at the end of December quarter, is declining and foreign exchange reserves are adequate.
Despite a hostile global financial environment and recent monetary tightening, the Indian banking system has remained resilient with adequate capital buffers and moderate levels of non-performing loans. The banks in USA and Europe are struggling on the backdrop of the rising interest rate scenario, with some of the US major banks collapsing but Indian banks continue to be on strong footing through good regulatory mechanisms and policies. Indian banking system has its inherent strengths and will not be impacted much.
Banks in FY 2022-23 witnessed improved asset quality, higher capital and provision buffers, increased profitability and stronger balance sheets. With the rebound in the economy post-pandemic, the credit growth accelerated to decadal high levels in FY2022-23.
The credit growth was witnessed in all the segments of the economy. After remaining in single digits for three years, credit growth (YoY) by Scheduled Commercial Banks (SCBs) stayed in double digits throughout FY 2022-23, recording the highest growth of 17.5 per cent in September 2022 and in March 2023 slightly moderated to 15 per cent, as per the Reserve Bank of India (RBI) data. Retail, MSME and Agriculture have been the key segments for credit growth. Accumulation of deposits in the past few years has enabled banks to fund the growing credit demand.
The credit growth momentum continued even in the face of rising interest rates in the economy. However, Banks faced pressures in mobilising funds to support the ongoing credit demand. There was a dearth of funds and banks were in a stiff competition to raise the deposits. The interest rates on deposits were increased to make them more attractive.
In FY 2022-23, a sharp rise in Term Deposits was witnessed across the banks and simultaneously Current Account & Savings Account (CASA) deposits growth tapered as the interest differential between the term deposits and CASA widened and funds were shifted from CASA to Term Deposits.
As per our estimates, the credit growth is expected to tame down to 13-14 per cent in the next 3-4 months due to moderating GDP growth, ebbing inflationary pressures which will reduce the working capital needs and base effect. Deposit growth will stay in the range of 9-10 per cent due to higher interest rates. This will reduce the gap between the deposit and the credit growth and thereby ease the liquidity constraints on banks.
The Gross Non-Performing Assets (GNPA) of banks have almost halved to 5.8 per cent as at the end of December 2022 from the highs of 2018, and banks have built up a strong provisioning coverage ratio of more than 70 percent, as per latest data of RBI.
The banks throughout the year continued to post record level profits on the back of higher net interest income and lower provisioning for bad assets. Due to rising interest rates, the asset side of the banks i.e. loans, were repriced immediately while the deposits are being repriced mostly at maturity with a lag. The resulting gap in repricing of assets and liabilities has led to widening of margins. Credit costs also maintained a downward trend across all banks, thus boosting profitability.
All the SCBs are well capitalised and capable of absorbing macroeconomic shocks, even in the absence of any further capital infusion by stakeholders.
The digital banking received a major thrust across the banks in FY 2022-23. UPI transactions hit record levels in the financial year. Payments transactions via the UPI network surged 82.2 per cent in FY 2022-23 to a total of 8,376 Crore transactions aggregating Rs. 139 Lakh Crore, 65.3 per cent higher compared with FY 2021-22, according to data by the National Payments Corporation of India (NPCI). Technological innovations have led to marked improvements in efficiency, productivity, quality, competitiveness in extension of financial services, especially in the area of digital lending and financial inclusion.
To further boost Indias digital economy, deepen financial inclusion and make the monetary system in the country more efficient, the Reserve Bank of India (RBI) launched the Central Bank Digital Currency (CBDC) i.e. Digital rupee in wholesale and retail format. CBDC is aimed to complement current forms of money and envisaged to provide an additional payment avenue to users.
As economic recovery was gaining traction the focus of liquidity management during 2022-23 moved to withdrawal of accommodation in a nondisruptive manner. Besides, withdrawal of post- COVID policy support and regulations was done keeping in mind the needs of regulated entities (REs) and their customers and taken measures like introduction of uniform regulatory framework for microfinance lending by all REs, Provisioning requirement for investment in Security Receipts (SRs), review of definition of Small Business Customers for LCR and NSFR. The Reserve Bank of India also introduced market reforms and regulatory policy changes in coordination with the Government and other stakeholders with a view to developing safe and stable financial markets for eg. International Trade Settlement in Indian Rupees (INR), Liberalization of External Commercial Borrowing (ECB) Policy.
II. Opportunities
Indian economy is at the cusp of sequential growth and banking sector is pivotal to the economic growth of India. Banks have strong fundamentals and are well positioned to play the part.
The credit growth in FY2022-23 has been robust and the trend is expected to continue in FY 2023-24 as well, though the momentum may slow down. The retail credit is expected to grow with rising demand for houses and cars and the burgeoning salaried class.
As per March 2023 sectoral credit data of RBI, Agriculture credit has shown a YoY growth of 15.4 per cent, Micro & Small Industries witnessed a YoY growth of 12.3 per cent while Medium Industries registered a YoY growth of 19.6 per cent. Retail Loans registered a YoYgrowth of 20.6 per cent. Thus, numbers highlight the staggering growth in RAM credit in FY2022-23.
There have been encouraging signs in wholesale lending as well, especially in infrastructure, Production Linked Incentive-related sectors, renewable energy, and MSMEs. The corporate credit is also expected to pick up as the investments in the economy rises. The Corporates are also utilising their unavailed working capital limits.
There has been a consistent gap between the demand and supply of credit to Micro, Small and Medium Enterprises (MSMEs). The Micro, Small and Medium Enterprises (MSME) sector contributes around 30 per cent to Indias GDP, 45 per cent to its manufacturing output and 48 per cent to exports. This has to be seen as an area of opportunity by the banks.
Gradual transition to Transaction based lending based on cash flows of the borrower as against Asset Based Lending for the large borrowers will emerge with lesser reliance on Cash Credit System as a credit delivery mechanism.
The digitisation and modernization of the systems of banks with the introduction of new, agile technologies is carving out new paths of growth for the sector. Banks can augment their operational efficiency by leveraging the technologies like Artificial Intelligence, Machine Learning, and cloud technologies. These would lead to accelerated digital on-boarding of customers and quick loan disbursals. These technologies will be employed as decision-making tools to judge the behavioural aspects of customers. Usage of Al and machine learning in credit appraisal will also help in credit delivery mechanism and will help reduce frauds.
As per the Union Budget 2023-24, digital banking, digital payment innovations have grown at a rapid pace in the country. Taking forward this agenda,
Government has introduced Entity DigiLocker for MSMEs, large businesses and charitable trusts to store and share documents online securely. Currently majority of the banks in India are undergoing digital transformation. RBI has launched a pilot to digitalize Kisan Credit Card (KCC) lending in a bid for efficiency, higher cost savings, and reduction of TAT. This is expected to transform the flow of credit in the rural economy.
With the success of UPI, implementation of the account aggregator (AA) framework and the mass adoption of digital banking services, India is witnessing an emergence of new business models. More and more banks are opening up for collaboration with new age service providers for facilitating customers to make better use of their data and avail a wider and richer set of services.
Adoption of Blockchain in banking will enable revisiting of processes, procedures and internal controls, to create an effective and robust sustainable structure. Adoption of block chain will be gradual and steady, as waves of technological and institutional changes gain momentum.
Green and Sustainable Banking with an endeavour to allocate resources towards avenues that lead to Environment, Social and Governance (ESG) objectives, in line with international standards will be a major theme going forward. Banks are increasingly providing more environment friendly products, like virtual debit and credit cards that are also very easy and efficient to use and are readily available to the customer for usage.
Banks are discovering that pursuing both ESG and digital transformation can have a mutually reinforcing effect, driving progress in both areas simultaneously. Although the challenge of undertaking both digital and ESG transformations may appear formidable, banks can find reassurance in the fact that there are substantial areas of overlap between the two agendas. Moreover, banks that can achieve a reasonable degree of maturity in both areas will have a distinct competitive advantage in the market, with few rivals capable of matching their comprehensive offerings. The successful implementation of dual transformation would require banks to not only modernize their technology systems and business practices, but also to affect a shift in their workforce, culture, organizational structure and in certain cases, their fundamental values.
The huge gap in availability and utilisation of financial services by the urban and rural India is one such challenge. This gives us an immense opportunity as the objective of financial inclusion is not just about giving access to thrift and credit, it is about empowering individuals to realise their true potential and contribute to a thriving economy. Robust and citizen-centric digital public infrastructure plays major role in achieving financial inclusion, social security, health insurance, digital transactions and easy access to credit while providing the building blocks for a productive, resilient and equitable society that will lead to robust nation building.
Social media is an alternative platform for reaching millions of customers. The number of social media users has been growing steadily. The analysis of social media use has the potential to help banks in reviewing their strategies in terms of customer segmentation, customer acquisition and furthering financial inclusion plans. Social media can also be used in customer grievance redressal management.
III. Threats
Even as the outlook of credit growth looks positive in FY 2023-24, the recent rapid rate hikes may have a dampening impact on credit demand. Further, the El-Nino factor is likely to have an impact on the agriculture sector. Also, given the global downturn, its effect on exports and inadequate capacity utilisation of corporates that inhibits future expansion and a delayed pick-up in the capex cycle may possibly impair its momentum.
Banks are also facing challenge on deposit front as banks are competing against each other to garner deposits to fund the credit growth. The funds are shifting from CASA to term deposits as the latter is offering higher interest rate. Consequently, majority of the banks have witnessed a dip in their CASA ratios in the past few quarters. The key challenges for Indian banking will be to mobilize required deposits without compromising on margins.
Going ahead, banks will also face pressure on their interest margins as the deposits of the bank upon maturity will be repriced at the higher rate. Thus banks will have to be proactive in adjusting their deposit and lending portfolios so as to maintain their margins.
Banks are also facing an increased competition from the burgeoning FinTechs and digital lending apps that are providing instant credit to the customers and are willing to take higher risks. Banks will have to quickly adapt their systems and platforms to compete with such platforms.
Large tech firms are also presenting an increasing threat to banks. In fact, the fintechs are innovating a lot in the payments space especially for merchants and kirana stores. So, the banks have to continuously stay ahead of tech to capture the new emerging opportunities, as GST returns and formalisation have created a new market for payments, savings, investments and lending.
As more and more financial service providers are entering the market and new products being launched every other day, customer retention poses a major challenge. Todays consumer is smarter, sawier, and more informed than ever before and expects a high degree of personalization and convenience out of their banking experience. With each new generation of banking customers comes a more innate understanding of technology and, as a result, an increased expectation of digitized experiences. While the older generation, still prefers human interaction. Thus, banks today have to operate in a hybrid model that integrates digital experiences into traditional bank branches.
On the backdrop of changing customer demographics and expectations, customer retention poses a major challenge. For this, excellent customer service is the key. If customer service is given keeping customer delight in mind, customers will be happy to deal with the bankand will utilize maximum services. Also, if a customer is happy, the bank will be able to cross sell the products to the customer and develop a long term relation with the customer.
Cybersecurity is the most significant unknown risk to the banking sector. Many factors are leading to increased Cyber Security threats like - collaborative approach used by banks and fintechs has exposed the system to third-party scrutiny, expansion of digital banking, fraudsters changing their modus operandi very often so that the situation should look more realistic, lack of awareness amongst customers, dark web etc.
Cyber crimes lead to financial loss, infringement of confidential information, legal, reputational and operational risks to the bank.
Banks in India have undertaken various measures to curtail cyber-crimes but Cybersecurity threats are constantly evolving, and organizations need to stay up-to-date with the latest trends and technologies to protect themselves. This includes investing in new security solutions and regularly reviewing and updating their cybersecurity policies and procedures.
The recent fallout of banks in US and Europe, cemented the argument of best risk management practices at the banks. Banks need to urgently build balance sheet modeling, stress testing, and scenario analysis capabilities that transcend organizational risk and balance sheet silos and link to their strategic planning process. Banks must assess the concentration risk (industries, geographies and archetypes) not just for loan portfolios but also in their deposit portfolios and, as a result, more aggressively challenge net liquidity outflow assumptions in times of market stress. There should be zero tolerance for non-compliance of regulatory and statutory guidelines, as the same has spill over effect over reputational risk of the bank.
Banks in India also need to be watchful of the stress in books due to MSME and Retail Loans, due to rising interest rates scenario. Banks will have to be proactive in recognizing stress and taking actions.
IV. Outlook
The Indian economy is poised to be the fastest growing economy in the world in FY 2023-24 on the back of robust consumption, increased government capex and strong macro fundamentals.
The outlook for 2023-24 for the banking sector is largely positive, with room for easing rates and continuing the growth cycle for banks credit growth and improving asset quality. Indias banking sector remains stable and is supported by economic growth and improved financials. Banks will continue to support the various Government scheme and carry out government business activities and thus support nation building.
The corporate sector is likely to see a pick-up as the focus on infrastructure will revive owing to the Governments push on the sector. The manufacturing, export, renewables, batteries and Electric Vehicle segments are likely to be the key growth drivers. The rural sector is also witnessing an improvement due to Agri startups, which, along with
SME value chains, are focusing on improving the efficiency. Overall, loan growth is likely to moderate from the current level of 15-16 per cent to 12-13 per cent in FY 2023-24.
Banks profitability might have peaked in FY2022-23 and is expected to moderate and stabilise in FY 2023-24. Banks capital, funding and liquidity will be stable and supportive of credit growth.
However, with continuous rising interest rate scenario globally, persistent high inflationary tendencies and spillovers from the global slowdown are some of the risk factors to be watchful of.
V. Segment-wise or Product wise Performance
The performance of major business segments of the Bank is analyzed below:
1. Resource Mobilization
The Domestic deposits of the Bank increased to Rs. 12,51,708 Crore as at end of March 2023 with YoY growth of 11.26 per cent. Savings deposits increased to Rs. 4,63,987 Crore, while CASA increased to FIs. 5,38,015 Crore. The share of CASA deposit to Domestic deposit stood at 43.0 per cent as at end of March 2023.
In the current banking scenario of mounting competition, Retail banking products play a major role in enhancing the business growth of the Bank. In order to remain competitive, the Bank has identified anchor products and special focus is given to mobilize more business under the segment. The deposit under customer specific segment viz. PNB Power savings account (for women) increased to Rs. 9,871 Crore with YoY growth of 16 per cent, PNB Rakshak for army personnel increased to Rs. 2,092 Crore with YoYgrowth of 3 percent.
Further, under Term deposit, PNB Sugam Term Deposit scheme has been identified as an anchor product, where the deposit increased to Rs. 2,94,417 Crore with YoYgrowth of 16 percent.
New Schemes
Bank has launched following new deposit schemes forvarious segments of the society:
a. SB ELITE scheme: PNB Elite Saving Fund Scheme with four variants namely - Premium,
Executive, Grand and Royal is launched. Introduction of the Scheme will enable field in mobilizing significant deposit, as HNI segment has adequate potential. Further this segment can also be tapped for cross sell/upsell of other products of the Bank.
b. New Variant "BRONZE" under PNB MYSALARY scheme: The Scheme is introduced for the Contractual employees hired by Central/State Govt/PSU/Semi-Govt organizations. It covers Personal Accidental Insurance of Rs. 10 Lakh.
c. SB AROGYA Scheme: With the objective to provide exclusive benefit of Health Insurance coverage to our customers along with a complete banking convenience and financial package, the Bank has launched PNB "AROGYA" saving scheme (Age Group 18 - 60 years) with Care Health Insurance. The benefits of the scheme may be availed by the existing customers of the Bank also.
Digital Initiatives
Comprehensive end to end digital products were introduced which helped in enhancing customer experiences:
a. Opening of current account (individual) through TAB Banking.
b. Opening of savings account in TAB, of existing customers.
c. Change of nomination through PNB One.
d. Online submission of claim (Deceased cases).
2. Credit Deployment and Delivery
Gross Domestic Advances of the Bank stood at Rs. 8,49,766 Crore in March 2023 registering a YoY growth of 11.93 per cent. Fresh Corporate Sanctions with external rating A and above formed a major part of the sanctions. Similarly, Bank has improved its quality of exposures as indicated by a decline in the percentage of Total Risk Weighted Asset over Global Advances to 74.5 per cent as on March 2023 from 76.5 percent as on March 2022.
Corporate Credit organizational structure focused on delivery of credit through 2 tier structure equipped with skilled staff and is functioning to reduce overall TAT, to improve efficiency of appraisal, provide scope for focused monitoring of accounts along with service delivery. This 2 tier structure is being catered by 2 Extra Large Corporate Branches (ELCBs) / 13 Large Corporate Branches (LCBs) in different parts of the country. ELCBs (Delhi & Mumbai) are headed by General Managers (GMs) & rest LCBs are headed by Deputy General Managers (DGMs). These 15 ELCB/LCB constitute approx. 50 per cent of total Domestic credit.
3. Retail Credit
Overall improvement in economic condition are fuelling confidence in customers to spend more. Digitization with technological help is driving penetration of retail credit among customers in one touch & hassle-free manner. This is resulting in increased customer convenience and retail credit portfolio. Also, marketing strategies such as association with Retail Loans Counsellors/Marketing Consultant/House Builders/Car Dealers/Education Institutes are adding to the efforts in increasing retail credit portfolio.
During the FY 2022-23, Total Retail Credit portfolio of the Bank increased to Rs.1,97,698 Crore registering a robust growth of 41.62 per cent. Out of this, the Core Retail Credit has increased to Rs. 1,37,335 Crore in FY 2022-23 showing a YOY growth of 15.21 percent.
Within the Core Retail Credit Portfolio, Housing Loan increased to Rs. 81,863 Crore from Rs. 73,805 Crore, Car/Vehicle Loan increased to Rs. 16,478 Crore from Rs. 12,615 Crore and the Personal Loan was at Rs. 18,152 Crore from Rs. 12,193 Crore.
New Initiatives
a. The Bank is offering one of the best-in-class rates of interests in various retail segments like Home loans, Vehicle loans, Education loans and Personal loans.
b. Tie-ups with reputed builders and property search sites for lead generation.
c. Onboarding of Home Loan Counsellors (Marketing Associates (MAs) / Marketing Consultants (MCs) / Retail Loan Counsellors (RLCs)) for Home Loan leads to garner maximum Home Loan business.
d. For enhancing education loans, liasoning with premier education institutes, and organising aggressive campaigns during admission seasons are taken into account. Also, end to end digital education loan is under process.
e. A new scheme PNB Green Car has been launched offering attractive rate of interest and longer repayment period.
f. The Bank is having Tie Ups for Car loans with major Car manufacturers which covered 85 per cent of market share for Car sales market.
g. In order to increase Gold Loan bucket, Rate of Interest (Rol) has been made competitive.
Digital Initiatives
a. In order to meet the emergent needs of our existing customers digitally, the Bank has launched different variants of Digital Pre approved personal loan (PAPL). End to end digital journey of pre-approved Personal Loan to Pensioners have been started.
b. As on 1st July, 2022, outstanding under PAPL was Rs. 57 Crore then PAPL was revamped and outstanding increased to more than Rs. 3,000 Crore as on 31st March, 2023. More than 1.4 Lakh customers availed PAPL.
c. End to end digital journey of e-Overdraft (e- ODFD) against online as well as offline Fixed Deposit Receipts (FDRs) launched.
4. Priority Sector
Shouldering the responsibility of social banking, the Bank has surpassed all the Priority Sector goals this year too. As per the Economic Survey 2022-23, the agriculture sector in India has grown at an average annual growth rate of 4.6 per cent during the last six years. And the Bank has major contribution in this development through providing finance to this sector.
The outstanding position of Priority Sector, Agriculture and sub-sectors as on 31st March, 2023 on quarterly average basis is as under:
PNB‘s achievement of national goals.
(Amt. in Rs. Crore) |
||||
| Outstanding Position | No. of Beneficiaries |
31.03.2023 |
PSL Target |
% Achievement to Adjusted Net Bank Credit (ANBQ |
| Priority Sector Credit | 65,62,344 |
2,82,322 |
40.00% |
41.22% |
| Out of which: | ||||
| Loan to Agriculture Sector | 46,48,669 |
1,24,347 |
18.00% |
18.16% |
| Loan to Small & Marginal farmers | 36,49,832 |
65,476 |
9.50% |
9.56% |
| Loan to Micro enterprises | 12,10,405 |
52,536 |
7.50% |
7.67% |
| Loan to Weaker Sections | 45,41,875 |
90,813 |
11.50% |
13.26% |
Performance Highlights of FY 2022-23
a. Credit to Priority Sector stood at Rs. 2,82,322 Crore as on March 2023. The percentage of Priority Sector Advances to ANBC is 41.22 per cent as against the prescribed National Goal of 40 percent.
b. Credit to Agriculture sector stood at Rs. 1,24,347 Crore as on March 2023. The percentage of Agriculture Advances to ANBC is 18.16 per cent against the prescribed National Goal of 18 percent.
c. Loans to Small/Marginal Farmers (SF/MF) stood at Rs. 65,476 Crore as on March 2023. The percentage of advances to SF/MF farmers to ANBC is 9.56 per cent as against the prescribed National Goal of 9.50 percent.
d. Credit to Micro (PS) Enterprises stood at Rs.52,536 crore as on March 2023. The percentage of advance to Micro (PS) Enterprises to ANBC is 7.67 per cent as against the prescribed National Goal of 7.50 percent.
e. Advances to Weaker Section stood at Rs. 90,813 Crore as on March 2023. The achievement is 13.26 per cent as against National goal of 11.50 per cent of ANBC.
Government of India is launching various programmes for the benefit of farmers from time to time. KCC Saturation campaign was launched in February 2020. Govt, of India has also launched various schemes under Atma Nirbhar Bharat package in 2020. The schemes like Agriculture Infrastructure Fund (AIF), Animal Husbandry Infrastructure Development Fund (AHIDF), Pradhan Mantri Formalisation of Micro Food Processing Enterprises Scheme (PMFME) and Fisheries and Aquaculture Infrastructure Development Fund (FIDF) has helped Banks in targeting and financing under various activities under Farm credit and pre and 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 this various other programmes like National Rural Livelihoods Mission (NRLM), National Urban Livelihoods Mission (NULM), etc. are also helping in increasing the Priority sectoradvances.
Agriculture Infrastructure Fund (AIF)
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.
27,440 projects with aggregate sanction of Rs. 22,618 Crore were financed under the scheme, out of which PNB sanctioned 2,098 projects amounting Rs. 2,288 Crore upto 31st March, 2023.
Kisan Credit Card Scheme (KCC)
In order to bring all the farmers under the ambit of availing KCC facility, Government of India (GOI) launched KCC-Saturation drive w.e.f. Is1 February, 2020. The Total accounts sanctioned by the Bank till 31sl March, 2023 under KCC-Saturation is 13,80,360 accounts amounting to Rs. 18,582 Crore.
Strategies to enhance Agriculture Credit:
a. To augment business under Agriculture investment credit, following schemes are being focussed:
i. Cold Storage Units
ii. Food and Agro Units
iii. Custom Hiring
iv. Financing under e-NWR (Electronic Negotiable Warehouse Receipt)
v. The various scheme under Aatmanirbhar Bharat Package will help in procuring business.
b. Utilization of Business Correspondent (BC) agents for lead generation: Utilization of BC Agents for sourcing of leads, will be leveraged under Agriculture. Presently, the Bank is having good scope of garnering business through BC agents since we have approx. 25,000 BCs attached with us.
c. Area Based Financing : Area based and activity based Clusters are identified as per the potential and geographical area. The areas have been identified on the basis of potential in that area for example gold loan in Southern States, SHG and cold storage in North East, and will be targeted accordingly.
d. SHG Financing: Credit linkage of SHG is another growing segment. Recently, RBI has modified NRLM scheme and increased limit for Is1 and 2nd doze. SHG portfolio in PNB stood at Rs. 6,111 Crore in 3,85,646 accounts as on 31s1 March, 2023 as against Rs. 4,886 Crore in 3,66,393 as on 31sl March, 2022.
Digital Initiatives or Lending through Digital Platform
a. Leveraging of Krishi Tatkal Rin as end to end digital journey for existing KCC customers for loan upto Rs. 50,000.
b. Digital journey of gold loan "PNB DIGITAL GOLD LOAN"- Joint journey of Agriculture Gold Loan & Retail Gold Loan Scheme is conceptualized.
c. STP journey of KCC upto Rs. 1.60 Lakh through Jan Samarth portal in Karnataka State.
Corporate Social Responsibility (CSR) Activities
a. Farmers Training Centres (FTCs): 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 having Soil testing facilities at the farmers fields and LED for audio visual display of informative video clips to the farmers. The Bank spent Rs. 326.54 Lakh under this during FY 2022-23. Since inception, FTCs have imparted training to 17,31,070 persons by conducting 57,912 training programs.
b. Rural Self Employment Training Institutes (RSETIs):
There are 76 RSETIs (under aegis of MoRD) and 2 Rural Development Centres (PNB initiatives) operating in India which are engaged in providing training to rural population and their families for skill upgradation to undertake self-employment ventures/jobs. During the FY 2022-23, 51,618 persons were trained in these centers out of which 36,911 belong to BPL families and 40,810 were women. Total number of trained candidates since inception is 5,44,067 out of which 2,43,152 were from BPL families and 3,56,666 were women. Our RSETIs are focusing on settlement of participants by ensuring adequate credit for inclusive growth. Total settled candidates are 3,69,207 since inception. The Bank spent Rs. 3,321.57 Lakh under this during FY2022-23.
c. Financial Literacy Centres: Bank has 175 Financial Literacy Centers (FLCs). Total number of enquiries made during the period from 1st April, 2022 to 31st March, 2023 is 2,21,762. 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, 2022 to 31st March, 2023 is 7,653 and number of persons attended these programs are 3,08,680.
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 at the end of the March 2023, credit to MSME segment stands at Rs.1,30,178 Crore. The advance to Micro and Small Enterprises stood at Rs.1,02,557 Crore with outstanding in Micro segment at Rs. 55,936 Crore.
Mudra: The Disbursement budget allotted under PM MY for FY 2022-23 was Rs. 19,700 Crore against which the Bank has disbursed Rs. 20,367 Crore and achieved 103.39 percent of its annual budget.
a. Details of initiatives being taken to boost MSME business
i. Cluster Based Financing: The Bank has adopted the Cluster based lending approach and 90 clusters have already been approved with customized schemes having concessional pricing, service charges, relaxed lending norms etc. As on 31s1 March, 2023 total 1,114 accounts of Rs. 3,935 Crore has been sanctioned.
ii. Partnership-led growth: The Bank is endeavouring to increase market presence and expand the outreach through entering into partnership agreement with different market players. The details are mentioned below:
• Tie-Ups with OEMs (Original Equipment manufacturers) for Commercial Vehicle/ Construction Equipment (CV/CE): The Bank has tie-up arrangement with 16 reputed Commercial Vehicle/Construction Equipment Manufacturers to position the Bank as preferred financier for financing customers intending to purchase the vehicles of the aforementioned companies. Further, the Bank is under process of having more such tie up arrangements. As on 31st March, 2023, 2,847 accounts for Rs. 190 Crore have been sanctioned under Tie-Ups with OEMs for Commercial Vehicle & Commercial Equipment (CV/CE). •
• Tie-up arrangement for Supply Chain financing to the dealers of RMCs (Reputed Manufacturing Companies): The Bank has made tie up arrangement with major corporates namely, Indian Oil Corporation
Ltd, Ashok Leyland Limited, Action Construction Equipment Limited (ACEL), Patanjali Ayurved Ltd, Daimler India Commercial Vehicle Limited and Steel Authority of India limited. As on 31s1 March, 2023,1572 accounts for Rs. 1195 Crore has been sanctioned. Further, the Bank is under process of entering into more such tie ups.
• Tie-up with Fin-Tech Companies: For end- to-end lending (sourcing to collection & recovery), the Bank has Tie-ups with M/s Atyati Technologies Private Ltd. for Joint Liability Group and with M/s Integra Micro System Pvt. Ltd for PM SVANidhi.
iii. Lending through TReDS Platform: Our Bank is using all the three platform of TReDS i.e. (1) RXIL (2) Mlxchange & (3) A.TReDS, an institutional mechanism set up for financing of trade receivables of MSM Es from corporate and other buyers including Government Departments and Public Sector Undertakings (PSUs). Centralized Hub at Delhi has been established to undertake operations on TReDS platform effectively. As on 31s1 March, 2023, total 2,060 bills amounting Rs. 852 Crore is outstanding on TReDS.
iv. Cash Flow based Financing - GST Express: The scheme provides hassle free credit to meet working capital requirement to GST registered business enterprises. Unique feature of the scheme is that there is no requirement of submitting financial statements and the quantum of loan permitted is above Rs. 10 Lakh to Rs. 200 Lakh.
Under the scheme, the system uses sophisticated algorithms to read and analyse data points from various sources such as IT returns, GST data, Bank statement, MCA 21 etc. in less than an hour, while capturing the basic details using smart analytics from available documents.
The system simplifies the decision making process for bank officials as the final output provides a summary of financials captured on a userfriendly dashboard on real time basis.
As on 31s1 March, 2023, 9,735 accounts for Rs. 5,094 Crore is sanctioned underthe scheme.
Further, the Bank is in a process to launch the product digitally as under-
• e-GST: The proposed module is a near to STP product having loan amount Rs.10 Lakh to 1 Crore, wherein Cash Credit Facility shall be allowed based on 25 per cent of the sales reported in the GST returns (GSTR-3B) or the trade related credit summation in current accounts in the last one year (last 12 months) whichever is lower.
• GST Sahay: The proposed module is an App based Lending solution to provide invoice based financing upto 2 Lakhs per invoice and Rs. 10 Lakh per borrower. Online system based Business Rule Engine (BRE) will analyse the Account Statement, Credit Bureau Score, GST return of the Borrower and where all BRE parameters will be complied, 85 per cent of the invoice amount will be financed.
v. PNB Tatkal: The scheme provides hassle free credit from Rs. 1 Lakh to Rs. 25 Lakh to meet financial requirements related to business activity or expansion of business wherein proposals are invariably routed through "www.pslbloansin59minutes.com" portal and borrower gets in-principle sanction in 59 minutes.
During FY 2022-23,1,934 accounts for Rs. 306 Crore is sanctioned under the scheme.
vi. MSME Prime Plus: A flag ship scheme under the name of MSME Prime Plus has been launched by consolidating four MSME schemes namely, PNB Udyog Scheme, PNB Seva Scheme, PNBVyapar Scheme and PNB Contractor Scheme.
To be more competitive and acceptable in the market, the Bank is offering Concessional Rate of Interest and Service Charges, relaxed collateral norms and margin criteria, features like MSME Vishesh (Auto increase of Working Capital Limits), Open Term Loan (A pre-approved term loan facility which provides flexibility to the good existing units enjoying credit facilities from the Bank and Car Loan in the name of Firm/Company for personal use).
During FY 2022-23, 10,902 accounts for Rs. 15,413 Crore are sanctioned underthe scheme.
vii. Simplification/Launching of new schemes/ Sector specific schemes such as:
• Health Care Segment
o PNBJeevan Rakshak
o Loan Guarantee Scheme for Covid Affected Sector (LGSCAS)
o Sanjeevani
• Hotel Industry: PNB Satkar Scheme to meet credit requirements to purchase land & building and/or set up/renovate unit for business of Hotels, Restaurants, Lodge etc.
• PNB is also catering to the populace through State specific schemes launched by State Government:
o PNB Shikara & Houseboat Scheme for Kashmir valley - The Scheme is applicable only in Union Territories of Jammu & Kashmir and Ladakh to meet various credit requirements i.e. short term as well as long term for the MSMEs, specifically for Hotel Industries, Tour & Travel, Transport, Manufacturing Industries, Export of goods and services, Ship/Boat /Shikara Industry, etc.
o Mukhya Mantri Saur Swarojgar Yojana for Uttarakhand State - The scheme is launched by the Government of Uttarakhand to meet energy needs of rural areas and develop alternate sources of energy with the aim of providing selfemployment opportunity to the entrepreneurial youths, migrants & farmers and for overall development of the State.
o Mukhya Mantri Udyam Kranti Yojana for Madhya Pradesh-The scheme is launched by the Government of Madhya Pradesh to provide employment/self-employment opportunities to unemployed youths of Madhya Pradesh. The target of this scheme is to provide self-employment opportunities for becoming selfreliant by setting new unit in manufacturing and service sector.
o Mukhya Mantri Gramin Path Vikreta for Madhya Pradesh–The Government of Madhya Pradesh has launched a new scheme on the lines of PM SVANidhi scheme for urban street vendors, namely Mukhya Mantri Gramin Path Vikreta Yojana, a special micro credit facility scheme for providing working capital loan to street vendors working in rural areas to help them resume their business that have been adversely affected due to Covid-19 pandemic and consequent lockdown.
o Indira Gandhi Urban Credit Card Scheme for Rajasthan State – The scheme is launched by the Government of Rajasthan to provide employment/self-employment opportunities in urban areas and to provide financial resources for business needs and the scheme is implemented across the State of Rajasthan.
o "Pandit Deen Dayal Griha Awas (Homestay) Yojana - PDDGAY" for the state of Uttarakhand - Uttarakhand Government has launched the scheme for providing employment opportunities to local people of the State by furnishing and re-developing the residential house which will be used to provide accommodation to tourists coming from different cities.
o Sant Ravidas Swarozgar Yojana for Madhya Pradesh - To provide selfemployment opportunities to youths of Madhya Pradesh falling under Schedule Caste (SC) category, Government of Madhya Pradesh, Schedule Caste Welfare Department has launched a new scheme "Sant Ravidas Swarozgar Yojana" (SRSY) to be implemented across the State of Madhya Pradesh.
o Dr. Bhimrao Ambedkar Arthik Kalyan Yojana for Madhya Pradesh - To provide self-employment opportunities to youths of Madhya Pradesh falling under Schedule caste (SC) category, Government of Madhya Pradesh, Schedule Caste Welfare Department has launched a new scheme "Dr. Bhimrao Ambedkar Arthik Kalyan Yojana" (BAAKY) to be implemented across the State of Madhya Pradesh.
o Bhagwan Birsa Munda Swarozgar Yojana for Madhya Pradesh – To provide self-employment opportunities to youths of Madhya Pradesh felling under Schedule Tribe (ST) category, Government of Madhya Pradesh, Department of Tribal Work has launched a new scheme "BHAGWAN BIRSA MUNDA SWAROZGAR YOJANA" (BBMSY) to be implemented across the State of Madhya Pradesh.
o Tantya Mama Arthik Kalyan Yojana for Madhya Pradesh - To provide self-employment opportunities to youths of Madhya Pradesh falling under Schedule Tribe (ST) category, Government of Madhya Pradesh, Department of Tribal Work has launched a new scheme "Tantya Mama Arthik Kalyan Yojana" (TMAKY) to be implemented across the State of Madhya Pradesh.
viii. Pre-approved Business Loan (PABL): This module is a straight through digital lending to MSME segment to provide loan facility above Rs.l Lakh to Rs. 10 Lakh under Business loan to our customers who are maintaining current account with us and it will be completely system driven. Loan assessment will be based on Trade Related Credits (TRC) arrived in current accounts through credit summation in last 12 months and the PABL Score. Keeping in view of the success of PAPL, it is expected to garner a good number of business under this module.
ix. e-RENEWAL Scheme: To increase efficiency of the appraisal process, reduce TAT and to provide ease to small borrowers, e-RENEWAL Scheme has been implemented. It is a process of automatic renewal of working capital limit having exposure up to Rs. 10 Lakh.
Further, a functionality of straight through process of easy renewal has been implemented where customer will give his/her consent through SMS only and the entire journey will be completed digitally without any Branch involvement.
During the FY 2022-23, total 51,011 accounts for Rs. 1,628 Crore were renewed.
x. PNB e-Mudra Scheme: To meet out credit need of the Micro and Small entrepreneur through Digital platform, a straight through process, e- Mudra Scheme for loan up to Rs. 1,00,000 has been implemented and made live in July 2022. The module is rule based processing & sanctioning, which is completely system driven.
During FY 2022-23, total 25 accounts were disbursed for Rs. 24 Lakh.
xi. Co-lending of loans with NBFCs: Bank has tie up arrangement with M/s Lendingkart Finance Ltd, M/s Paisalo Digital Ltd, M/s Vedika Credit Capital Ltd.and M/s IIFLforco-lending.
During FY 2022-23, total 3,784 accounts for Rs. 170.52 Crore were sanctioned.
xii. Extensive use of PNB LenS: Bank had developed/customized IT based solution i.e. PNB LenS - The Lending Solution for loan management. After implementation of LMS, assessment process is standardized which has strengthened the credit underwriting. Now, the module for processing of the application under Mudra and MSME loans (fresh/renewal/ enhancement/review) upto Rs. 25 Crore are available through PNB LenS. Total 2,34,283 applications (MSME + Mudra) have been sanctioned amounting Rs. 70,406 Crore from 1st April, 2022 to 31st March, 2023.
b. Government Sponsored Schemes
Special economic and comprehensive package of Rs. 20 Lakh Crore to fight COVID-19 pandemic in India was announced by Honble Prime Minister under the
Aatma Nirbhar Bharat Abhiyan.
To provide relief to stressed sectors by helping sustaining the employment and meet liabilities, Bank has taken various initiatives to enable MSMEs to promptly address their business continuity and remain firmly on their feet during the crisis and also enable them to move forward in its aftermath, such as:
i. Guaranteed Emergency Credit Line (GECL) scheme: The scheme was implemented in 4 phases (GECL 1.0, 2.0, 3.0 and 4.0) to support the various business activities affected by Covid-19 pandemic.
As on 31st March, 2023, the Bank has sanctioned 4,52,098 accounts amounting to Rs. 21,872 Crore, out of which 2,03,928 accounts for Rs. 19,198 Crore were disbursed.
ii. Credit Guarantee Scheme for Subordinate Debt for Stressed MSMEs: Ministry of MSME, Govt, of India through CGTMSE has introduced "Credit Guarantee Scheme for Subordinate Debt (CGSSD) to provide personal loan to the promoters of Stressed MSMEs for infusion as equity/quasi equity in the business, eligible for restructuring as per RBI guidelines for restructuring of stressed MSME advances".
During FY 2022-2023, the Bank has sanctioned 274 accounts amounting to Rs. 21 Crore, out of which 158 accounts for Rs.16.37 Crore were disbursed.
iii. PM Street Vendors Atma Nirbhar Nidhi (PM SVANidhi): This is a Central Government Scheme launched by Ministry of Housing and Urban Affairs formalized for Street vendors providing finance upto Rs 10,000 which opened up new opportunities for this section to move up the economic ladder. For a country like India, where the informal sector still employs a large chunk of the employable population, this scheme mainly aimed at informal sector to become popular. The scheme was launched on 2nd July, 2020 and it is available to all street vendors engaged in urban areas as on or before 24th March, 2020. Lending under the PM SVANidhi Scheme is extended till December 2024. Credit Guarantee and interest Subsidy claims on all loans will be paid till March 2028.
In addition to this, Ministry of Housing and Urban Affairs has extended the benefit of existing scheme to provide enhanced loan (2nd tranche of Rs. 20,000 and 3rd tranche of Rs. 50,000) to PM SVANidhi beneficiaries on timely repayment of earlier loan under PM SVANidhi Scheme.
As on 31s1 March, 2023,3,30,080 applications have been sanctioned out of which 3,07,990 (93.31 percent) have been disbursed.
iv. Restructuring of Advances: In terms of RBI guidelines dated 1st January, 2019, 11th February, 2020, 6th August, 2020 and Resolution Framework 2.0 under RBIs guidelines dated 5lh May, 2021, the Bank had approved the guidelines prescribed by RBI for One Time Restructuring & Resolution Framework 2.0 in all the eligible units which are under stress in MSMEs having borrower exposure upto Rs. 50 Crore.
Through implementation of guidelines in all the eligible units, total 1,22,886 accounts for Rs. 6,688 Crore were restructured.
v. Contactless loan through Psbloansin59minutes.com: A portal for inprinciple approval for MSME loans upto Rs. 5 Crore within 59 minutes is in place in the name of psbloansin59minutes.com. The Bank has on-boarded this portal and it has been made live in PN B. Further, the Bank has also on boarded Mudra loans on the Mudra Portal launched by M/s Online PSB Loans Ltd. Performance under this segment of business has remained good for the Bank. We have already configured all our flagship MSME products on this portal to maximize in-principle sanctions.
As on 31sl March, 2023, total 53,536 applications were disposed off, out of 56,403 applications received for MSME & MUDRA loans.
c. Awards received during the quarter
i. PNB won Best MSME Bank (Runner Up) for 9th MSME ExcellenceAwards: Punjab National Bank was felicitated with Best MSME Bank (Runner Up) at 9th MSME ExcellenceAwards and Summit organized byAssocham on 21st March, 2023.
ii. PNB won First Prize for Outstanding Contribution to PMEGP in Uttar Pradesh: The
Bank has been awarded first prize for outstanding contribution under Prime Ministers Employment Generation Program in Uttar Pradesh during Uttar Pradesh Global Investors Summit (UPGIS) 2023 held in Lucknow, 10th-12th February, 2023.
iii. MSME Banking Excellence Award 2022 ceremony organized by Chamber of Indian Micro, Small and Medium Enterprises (CIMSME), New Delhi: Punjab National Bank has been awarded in MSME Banking Excellence Award 2022 Ceremony organized by Chamber of Indian Micro, Small and Medium Enterprises (CIMSME), New Delhi for the following categories:
• Best MSME Bank
• MSME Friendly Bank
• Government Schemes implementing Bank
• Implementing Covid related Schemes 6. Financial Inclusion
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.
a. The Bank has implemented Pradhan Mantri Jan Dhan Yojana (PMJDY) and other financial inclusion services through BCs on PAN India basis. Overdraft facilities up to Rs. 10,000 in PMJDY accounts provided to eligible account holders (age group 18-65).
b. Biometric based eKYC account opening and Aadharseedingat BC Locations.
c. Social security schemes, i.e. Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), Pradhan Mantri Suraksha Bima Yojana (PMSBY) and Atal Pension Yojana (APY) facilities, are available at BC locations as well as branches and through Internet Banking/Mobile Banking. The Progress of Social Security Schemes till 31s1 March, 2023 is as under:
i. PMJJBY: 54.98 Lakh customers enrolled.
ii. PMSBY: 210.66 Lakh customers enrolled.
iii. APY: 28.11 Lakh customers enrolled.
As on 31s1 March, 2023, Bank is providing basic banking services through 24,227 BC Agents/Bank Mitras (PAN India) in Rural, Semi-Urban, Urban and Metro centres depending upon the requirement of the Bank. The BC Agents/Bank Mitras use Micro ATM/Laptop/Desktop/Mobile/Tab etc. for providing the banking services. At present following services as per EASE agenda of Department of Financial Services (DFS) is available at BC locations through Kiosk Banking Solution:
a. SavingsAccountOpening
b. Term Deposit Receipt (TDR)/ Recurring Deposit (RD) opening, RenewTD/RD
c. Cash Deposit (own bank)
d. Cash Withdrawal (on us), Cash withdrawal (off us)
e. Fund transfer (own bank), Fund transfer (other Bank—Aadhaar Enabled Payment System (AEPS)/RuPaycard)
f. Immediate Payment Service (IMPS), National Electronic Funds Transfer (NEFT), Indo-Nepal Remittance
g. Balance enquiry (own bank), Balance enquiry (other bank)
h. ApplyforRuPaydebitcards, Block debit card
i. Enroll for social security schemes i.e. micro accidental death insurance (PMSBY), micro life insurance (PMJJBY), pension scheme (APY)
j. Aadhaarseeding
k. Self Help Group (SHG) & Joint Liability Group (JLG): For formation & promotion, including credit linkage
l. Passbook update, Mini statement
m. Cheque collection
n. Request new cheque book, Stop payment of cheque, Cheque status enquiry
o. Request for SMS alert / email statement (registered mobile number/email).
p. Bharat Bill Payment System (BBPS)
q. Recovery/Collection up to bank approved limits
r. Loan request initiation for Retail/Mudra/ Agriculture
s. Request initiation for Current account opening
t. Request initiation forThird Party Products
u. PNB ONE adoption through BCAgents
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 and interest rate risk and has put in place measures, policies, systems, and procedures to manage and mitigate those risks. Apart from these risks, the Bank has a reliable internal controlling environment to manage materials risks such as Reputational risk, Strategic Risk, IT Risk, Cyber Risk, Compliance Risk, ESG Risk, Conduct Risk and other residual risks. The Board of Directors of the Bank has constituted various Sub-Committees of Board and/or Functional Committees to look into different areas of strategic importance.
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 risk factors of counterparties for taking credit decisions in a consistent manner. Bank has in-house credit risk rating models for risk assessment of borrowers and has also developed and implemented scoring models in respect of Retail advances and MSME & Farm sector advances. In addition, the Bank has developed separate credit scoring models to capture the peculiarity of specific lending schemes designed for a particular segment such as PNB Sampatti, PNB GST express loan, PreApproved Personal Loan scheme, e-Mudra and lending under co-lending arrangements with NBFCs.
The Bank undertakes periodic validation exercise of its credit risk rating and scoring models to ensure their efficacy. The Bank also conducts migration and default rate analysis to test robustness of its credit risk rating models. Output of credit rating and scoring models is linked to decision making which includes credit sanctioning, pricing, loaning powers besides audit, review & monitoring of credit portfolio.
The Bank has put in place several policies covering various aspects of credit risk management to have a uniform set of effective lending practices.
In pursuance of overarching objective of automation of processes and increased compliance, the Bank has launched various digital retail lending products targeting different customer segments. These products are based on rule-based processing & sanctioning, which shall be end-to-end or near end- to-end system driven and separate scorecards have been developed to assess the risks for these products.
The Bank has also launched e-Renewal Scheme, an automatic/Straight through Process (STP) for renewal of working capital credit facilities having exposure up to a certain threshold.
The Bank has in place an Early Warning monitoring tool PNB SAJAG (Early Warning Signal+ Preventive Monitoring System) for effective monitoring of advances above Rs. 1 Crore and early detection of deterioration in health of borrowal accounts. The system monitors the accounts on 136 Early Warning Signals including 42 signals prescribed by RBI, 84 signals prescribed by Department of Financial Services (DFS) and 10 bank specific signals.
To improve the EWS mechanism, the Bank has implemented a fully automated Early Warning Signal (EWS) and Intelligent Transaction Monitoring system (ITMS) in the name of PNB SAJAG 2.0 which has been integrated with multiple data sources (internal, external as well as system analyzed) to automate the dataflow. Phase-1 of this system (OEMs standard solution) has already been rolled out w.e.f. 24th November, 2022 on pilot basis. The customized application (Phase-ll) as perthe Banks requirements is on course of making live on Pan India basis.
The Bank has established a separate Industry Research Desk vertical, which carries out in-house risk assessment of industries and prepares industry outlooks for more than 150 industries based on calculated industry risk scores. Output of industry risk assessment exercise is translated into Industry Handout which presents executive summary and brief of various industry risk parameters. Further, Up,Stableand Downtrends in Industry Outlook is also provided by encapsulating significant developments in industries during the quarter.
In compliance to Malegam Committees recommendations, a dedicated Market Intelligence Unit is created within Integrated Risk Management Division of the Bank. The unit provides Market Intelligence Report on different classes of borrowers above certain threshold.
These processes help to achieve quick & accurate delivery and monitoring of credit, bring uniformity in the appraisal and facilitate storage of data & analysis thereof.
Market risk and Asset Liability Management
The Bank has in place a well-defined organizational structure for market risk management which looks into the process of overall management of market risk viz. interest rate risk, equity price risk and foreign exchange risk, and implements methodologies for measuring and monitoring the same to keep the investment portfolio healthy and liquid.
Mid-Office (of Treasury Operations), looks after market risk of the investment Portfolio of the Bank and reports to Group Chief Risk Officer (GCRO) to ensure the independence of its functioning from treasury operations. Further, Market Risk Management Committee (MRMC) a functional committee of the Bank, is also in place to look after the overall management of Market Risk.
Mid-Office monitors various risk positions through statistical tools like VaR, stress tests, risk limits like M-Duration, PV01, exposure limit etc. to effectively manage the investment portfolio. In order to make the monitoring robust and system driven, tools/limits have been automated in Finacle treasury application for better monitoring and management of Market Risk. Further, in order to incorporate the impact of riskiness of exposure in different countries, Country Risk Premium has been incorporated in the pricing structure for effective pricing.
The Bank has a separate Asset Liability Management Cell that manages and monitors liquidity risk and interest rate risk proactively. To assess funding liquidity risk for short term resilience, the Bank computes and monitors Liquidity Coverage Ratio (LCR) on daily basis. For long term resilience, the Bank computes and monitors Net Stable Funding Ratio (NSFR) on monthly basis.
The Bank keeps a close eye on development in the global markets and scan its portfolio on regular basis to protect itself from similar kind of risk incidents. Post recent failure of global banks, the Bank carried out detailed stress testing of its investments book
i.e. banking book (HTM categories) and trading book (AFS and HFT). Both the portfolio were subjected to stress test using severe but plausible scenarios and its impact on capital was assessed under low, medium and high stress scenario. Similarly, the Bank also conducted liquidity stress testing and impact on LCR was assessed followed by preparing of Contingency Funding Plan to tide over liquidity crunch if at all it arises. The Bank manages its assets on a continuous basis in a way to withstand liquidity requirements at all times.
The Bank is in the process to implement Interest Rate Risk in Banking Book (IRRBB) from quarter ending June 2023 as per new RBI guideline dated 17th February, 2023. IRRBB refers to current and prospective risk to banks capital and earnings arising from adverse movement in interest rates that affects its banking book position.
Operational Risk Management
The Bank has in place a well-defined organizational structure and framework for operational risk management functions. The Bank is identifying, measuring, monitoring and controlling/mitigating the operational risk through tools viz. Internal/External Loss Data, Near Miss Events, Risk Control & Self-Assessment surveys (RCSAs), Key Risk Indicators (KRIs), Risk Based Assessment for Money Laundering & Terrorist Financing Risk and Scenario Analysis. The Bank has robust mechanism in place to analyse the operational risk in product/activities/process and systems before introducing/modifying existing processes through approvals at various levels. The Bank has in place sound and responsive practices to ensure effective oversight, due diligence and management of risk arising from outsourcing of financial services along with Business Continuity Plan to be in readiness to tackle serious business disruption. The Bank has implemented Statistical Analysis Software (SAS), an online Operational Risk Solution under Enterprise wide Data Warehouse Project and placed it on central server to take care of various aspects of data capturing and management information system at various levels to provide technological support for managing entire Operational Riskofthe Bank.
Internal Capital Adequacy Assessment Process (ICAAP) & Stress Testing
The Bank has put in place a comprehensive policy on Internal Capital Adequacy Assessment Process (ICAAP), which is reviewed annually and ICAAP document is put up to Board on half yearly basis. ICAAP addresses both the Pillar-1 and Pillar-11 risks and to have a holistic view of impact of various risks which the Bank is exposed to, an exercise is carried out to quantify/assess all such risks. The risk management processes are covered at length in the ICAAP document. The document is prepared on both solo and consolidated basis at the group level.
The Bank also has put in place Board approved comprehensive Policy on Stress Test 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, IRRBB, Liquidity risk, Country risk, Group risk Pension Obligation risk, etc. on a regular basis. The Bank has recently upgraded the stress testing framework to make the estimates more accurate, forward looking and granular. The retail and MSME portfolios have been further segregated into 1000+ risk homogeneous micro clusters (based on account characteristics, demographics etc.) and linked with macroeconomic variables.
RiskAppetite Framework
The Bank has a Board approved 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.
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 management framework 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) to which the group is exposed to, how the bank mitigates these risks, and to arrive at an internally computed level of capital adequacy consistent with these risks.
ESG Risk
The Bank recognizes the need and importance of ESG and climate risks and is committed to managing these risks with the overarching aim of moving towards responsible banking. To promote green economy, the Bank has introduced various financing schemes viz. PNB Saur Urja Yojana (PNB Solar Energy Scheme), Scheme for Financing e-Rickshaws - PNB GREEN RIDE, Scheme for Financing Setting Up of Bio-Gas Units, Solar Power Project Financing, soil conservation, schemes for installation of solar water pumping system, etc. The Bank has also issued guidelines on financing units producing clean energy such as solar power, wind power and hydro power which help in containing the Greenhouse Gases (GHG) emissions leading to clean environment. The Bank has put restrictions on extending finance for setting up of new units consuming/producing the Ozone Depleting Substances (ODS).
The Bank has elaborate frameworks, policies and practices viz. customer rights policy, grievance redressal policy, Customer Compensation Policy on Promotion/Recruitment of Officers etc which dictate how the Bank maintains and manages the expectations of its various stakeholders.
Risk Management Committee drives the ESG initiatives of the Bank and supports the Board on ESG developments, stringing capabilities and speed up integration of climate consideration into risk management practices.
Further, the Bank is in the process of developing climate risk assessment framework which would include methods to integrate climate risk in the risk management framework and testing the resilience of the lending portfolio to transition and physical risks.
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 reporting its capital and RWA as per Foreign Investment Review Board (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. Necessary actions required in this regard have been initiated.
The Bank is calculating Expected Credit Loss (ECL) under Indian Accounting Standard (Ind AS)-109 as per the draft guidelines of Reserve Bank of India on quarterly basis and the results are submitted to the Reserve Bank of India on prescribed Proforma.
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.
VII. Cyber Security Centre of Excellence (CCoE)
With a view to improve the cyber security posture in Bank and to bring in efficiency in operations, Cyber Security Centre of Excellence (CCoE) was setup on 12th April, 2023 at Banks Data Center, Delhi. The CCoE team is entrusted to manage more than 30 end to end security technology product for detecting, preventing and monitoring cyber security threats, along with dedicated Cyber Security Analytics Center (CSAC) for monitoring security alerts. Management of such devices is in line with RBI Circular and recommended by high level technical amalgamation committee.
In this new setup, the Banks cyber security setup is divided into following 5 wings:
1. Cyber Security Command and Operation Control Centre (CCOC),
2. Cyber Security Analytics Centre (CSAC),
3. Security Cum Functional Audit Center (SCFAC),
4. Compliance, Audit and Reporting Center (CARC), and
5. Cyber Security Awareness and Innovation Centre (CAIC).
In pursuit to achieve excellence, efficiency in operations and to enhance its cyber security posture in the Bank, new cyber security products are being planned to be implemented during the current year. Amongst others, the major projects include Next Generation (NG-SOC) with Artificial Intelligence (Al), Machine learning (ML) and data lake facility, upgradation of Perimeter Security (both Internal and External), Red Team Exercise by M/s E&Y, implementation of E-Mail security solution, upgradation of Active Directory System with enhanced securityand reporting feature.
Cyber Security Centre of Excellence (CCoE) with its wings, shall carry out monitoring activity on 24x7x365 basis by mix of both Bank officials and cybersecurity experts from the industry.
The major roles of CCoE shall include the following:
1. Cyber Security Centre of Excellence (CCoE) through its Command and Operation Control Centre (CCOC) will focus on implementation, fine tuning, monitoring of the cyber security components of the Bank and continuing to upgrade/on-board advanced technologies for safeguarding Banks IT infrastructure.
2. Cyber Security Analytics Centre (CSAC) shall focus on strengthening Security Analytics, monitoring of Attack surface monitoring, Threat Intel operation and proactive monitoring, Security Incident Management and Response and implement Next Generation (NG-SOC) with Artificial Intelligence (Al) Machine learning (ML) and data lake facility.
3. Compliance, Audit and Reporting Center (CARC), shall focus on compliances and mapping Information Security management framework into specific policies, processes and procedures which shall be implemented in the Bank and compliance of RBI Circulars, advisories & alerts issued by various agencies like National Critical Information Infrastructure Protection Centre (NCIIPC), Computer Emergency Response Team (CERT) etc.
4. Cyber Security shall be enhanced by conducting and getting IS Audit conducted for applications before Go-Live and this will be achieved through Security Cum Functional Audit Center (SCFAC) vertical of CCOE.
5. Focus of Customer Awareness and identification of latest technologies in Cyber Security world shall be achieved through Cyber Security Awareness and Innovation Centre.
VIII. Internal Control System
1. Internal Audit
During FY 2022-23, Risk Based Internal Audit (RBIA) was commenced/conducted in 8,994 branches/offices. Concurrent/Continuous audit was conducted in 1,592 branches/offices during FY 2022-23, by Internal/External Auditors (CA Firms & Empanelled Retired Officers), covering 49.88 per cent of the total business of the Bankas at 31s1 March, 2022.
Information Security (IS) Audit was conducted in 225 office/units. FEMA Audit was conducted in 238 eligible branches/offices i.e. Authorized Dealer (AD) branches & Trade Finance Centres. All branches were subject to revenue audit.
2. Offsite Monitoring
For strengthening of Offsite Monitoring of branches/offices, the Bank has implemented an Alert System i.e. Offsite Surveillance System (OSS) & also formed Data Analytics team i.e. Offsite Surveillance Unit (OSU).
a. Offsite Surveillance System (OSS): Internal audit functions of PNB and Offsite Surveillance System (OSS), have been automated through an online application i.e. eTH 1C to bring out fairness, objectivity, transparency and innovation in the Internal Audit System.
During FY 2022-23, under OSS, 63 scenarios have been identified by the bank at the Head Office level based on various activities being undertaken by the officials at all SOLs in CBS in the form of transactions for customers as well as Office accounts.
b. Offsite Surveillance Unit (OSU): OSU is a dedicated Data Analytics Team which is conducting data dump analysis on regular basis and suggesting enhancement in system & procedure for mitigating the identified operational risk.
3. Risk Based Internal Audit (RBIA) of Administrative Offices
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 system, efficient resource utilization and ways & means used to achieve the goals, etc. All administrative offices under the scope of RBIA for administrative offices are audited on annual basis except Low rated offices (other than Head Office divisions and Banks subsidiaries), which are subject to audit once in two years.
During FY 2022-23, based on approved Annual Plan, Inspection & Audit Division (IAD) conducted audit of 186 offices comprising 149 Circle Offices, 24 Zonal Offices, 9 Regional Rural Banks, 2 overseas subsidiaries and 2 domestic subsidiaries.
4. Credit Audit and Review
During FY 2022-23, Credit Audit has been undertaken for all eligible loan accounts both domestic and overseas. In terms of Loan Review Mechanism (LRM) Policy, during FY2022-23, the coverage of audit is 56.59 per cent of Banks total credit portfolio as on 31st March, 2022 against Reserve Bank of India and Banks policy requirement of at least 30-40 per cent in a year. The Bank has also digitalized Credit Audit process under Credit Audit Online Program (Credit Audit Module) under eTHIC which is a paperless, effective, accurate and time saving tool of Credit Audit.
5. Know Your Customer (KYC)/Anti Money Laundering (AML)
To ensure meticulous compliance by all Branches/Offices while dealing with new as well as existing customers, the Bank has put in place a Board approved and transparent Know Your Customer (KYC) Policy. RBI guidelines on various KYC related parameters such as KYC Updation, Identification of Beneficial Owners, UCIC, CKYC etc. are implemented in form and content. For strict compliance of extant KYC guidelines, CASA Back offices have been established for centralized opening of Savings & Current accounts. Further, Document Management System (DMS) has been procured for digitalization of customer documents. An AML System has been implemented in Bank for monitoring of customers transactions from money laundering perspective through AML alerts and for scanning customers against various sanctions lists.
To bring greater awareness amongst the Bank staff about KYC and AML/CFT compliances, Online basic course on KYC in PNB UNIV has been made mandatory for staff members at branches and one session is mandatorily taken on KYC/AML in every training program at training centres.
Digital Initiative
An online facility for KYC updation through V-CIP application has been made available in Internet Banking Services and PNB One Mobile Banking Services of the Bank for those individual customers who are due for periodic KYC updation or who are KYC non-compliant. The eligible customers shall be redirected from IBS and PNB One to V-CIP channel on clicking linkfor KYC updation given in IBS and PNB One. This shall provide customers an opportunity to get their KYC updated online without visiting the Bank.
6. Vigilance
Punjab National Bank believes that an organisation is only as strong and honest as its people. The employees are the face of the organisation and the Bank assures all its stakeholders that the entire team of PNB is committed to work with integrity and probity in all types of official dealings and conducts.
Punjab National Bank is committed towards maintaining the highest standards of integrity in all its operations, which can be reflected in its policies, procedures, and practices, which are designed to ensure that Bank operates with the highest standard of integrity and transparency at all times.
Due to efficiency achieved through preventive Vigilance measures, effective monitoring mechanism and supervisory oversight over cases, the Bank is able to dispose-off 154 cases out of 172 cases outstanding as on March 2022, i.e., 89.53 per cent cases.
In addition to the above, the Bank has taken various initiatives to improve the efficiency of Vigilance Administration in the FY2022-23 like:
a. Launching of Vigilance Manual 2022 in line with the CVC guidelines as a ready reckoner for Vigilance related matters.
b. Formulation of Vigilance Dashboard, which is likely to provide effective tool for all officials of vigilance department upto the level of Chief Vigilance Officer for effective control and supervision mechanism.
c. Banks Inspection and Audit Division has developed a portal for an end-to-end Staff Accountability Process to curtail the delay, improve efficiency and accuracy by use of technology and to achieve the imperatives of Vigilance Administration.
In addition, various training sessions/seminars have been organized on Pan-India basis wherein the Chief Vigilance Officer, as well senior officials from Vigilance Department have participated to interact on Vigilance matters. Preventive Vigilance Sessions are made part of induction of Management Trainees and Mid-Career training programmes. Total of 304 training sessions have been conducted on preventive/punitive vigilance in the last one year.
The Vigilance Department of the Bank has been publishing an e-magazine, "PNB Vigil", and is conducting online monthly quiz on preventive vigilance for staff for deeper awareness of issues of importance leading to efficiency in operations and thereby adding value to the customer satisfaction and better compliance culture in the organisation.
Vigilance Awareness Week (VAW) 2022 was observed by Punjab National Bank from 31sl October 2022 to 6th November 2022 with the theme "Corruption Free India For a Developed Nation" to promote awareness as well as commitment of Bank towards integrity and transparency. During the VAW total of approx. 4.50 Lakh Integrity Pledges were administered by Bank and various awareness activities conducted which includes Gram Sabhas, Financial Literacy Programmes, Online Quiz Competitions, Awareness through Social Media Handles and various other online awareness activities at Schools and Colleges wherein approx. 6.50 Lakh people have actively participated. In addition to the above, the Bank was able to reach approx. 2.82 Crore public during the VAW, through Internet Banking logins, Mobile Banking, SMSs and Social Media Handles.
IX. RighttoInformationAct
During the period from 1st April, 2022 to 31sl March, 2023, Punjab National Bank received 6,797 RTI applications, out of these 5,575 applications were duly disposed of as per the provisions of Right to Information Act, 2005. Further, 67 applications are pending for disposal as on date i.e. 24th May, 2023.
X. Discussion on Financial performance with respect to operational performance
As at the end of 31s1 March, 2023, Banks Gross Global Business stood at Rs. 21,65,844 Crore with Gross Global Advances at Rs. 8,84,681 Crore and Gross Global Deposit at Rs. 12,81,163 Crore. Current and Saving Deposits (CASA) was at Rs. 5,38,015 Crore with domestic CASA share at 43.0 per cent. In addition, Banks Operating Profit was at Rs. 22,529 Crore with the Net Profit of Rs. 2,507 Crore for the FY 2022-23.
XI. Material Developments in Human Resources/ Industrial Relations front including number of people employed
1. Human Resources Management
Total number of employees: Staff strength/ Employees given in the following table are for PNB for March 2022 and for March 2023 including those on deputation in the subsidiaries.
Cadre-wise Staff Strength
March 2022 (31.03.2022) |
March 2023 (31.03.2023) |
|||
Number |
% of Total Staff |
Number |
% of Total Staff |
|
| Officer | 51812 |
50.23% |
51309 |
49.28% |
| Clerks | 29881 |
28.97% |
28984 |
27.84% |
| Sub Staff (incl. PTS) | 21451 |
20.79% |
23827 |
22.88% |
| Total | 103144 |
100.0% |
104120 |
100.0% |
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
March 2022 |
March 2023 |
|||||||
SC |
ST |
OBC |
PWD |
SC |
ST |
OBC |
PWD |
|
| Officer | 10383 |
3992 |
12273 |
923 |
10256 |
3956 |
12749 |
1064 |
| Clerks | 6104 |
1686 |
7683 |
715 |
5845 |
1684 |
7641 |
732 |
| SubStaff | 8465 |
1448 |
5007 |
432 |
9042 |
1639 |
5949 |
559 |
| Total | 24952 |
7126 |
24963 |
2070 |
25143 |
7279 |
26339 |
2355 |
Age Profile of the Employees
The average age of overall employees has come down over the years. The movement of cadre-wise average age in the last five years is as under: (Average age in years)
| Average Age as on | Officer |
Clerical |
Sub Staff |
Over All |
| March 2019 | 42.70 |
38.27 |
36.90 |
39.67 |
| March 2020 | 40.58 |
39.05 |
37.13 |
39.30 |
| March 2021 | 39.34 |
38.90 |
39.69 |
39.28 |
| March 2022 | 39.24 |
38.28 |
38.03 |
38.71 |
| March 2023 | 39.23 |
38.40 |
36.86 |
38.46 |
Standalone PNB for March 2019 & 2020 and amalgamated PNB for March 2021,2022 & 2023.
Industrial relations
Industrial Relations in the bank continued to be cordial with workmen union/Officers association. Due to COVID Pandemic various physical meetings including IRM/MRM were not held with representatives of majority Officers Association/Workmen during theyear. However, issues raised by union/association have been resolved promptly.
2. Training Activities
The rapidly changing dynamics in banking sector and the constant challenges it poses makes it imperative to continuously enhance and improve knowledge and skill sets among the workforce. Recognizing the importance of skill upgradation and acquiring newskillsets in the constantly evolving business environment, Training vertical has built strong capabilities in training and development to build competencies across various segments. Trainings are imparted through Phygital training programs (classroom as well as online trainings) and internet-based training modules (self-paced e-learning modules). Special programs on functional training and leadership development are also conducted to build knowledge as well as management ability at a dedicated training facility. These training programs are monitored through Planning and monitoring desk which identifies target participants for a program in consultation with HO Divisions/Verticals/Zones. Efficacy of Training Programs is gauged through entry-exit tests for the participants in programs of duration 2 days or more. Training programs are evaluated for content and faculty feedback, both on qualitative and quantitative aspects with a view to ensure relevance and enhancements in co-ordination with owner Divisions.
During the year, the Bank took a slew of innovative measures to promote learning and development among workforce while ensuring consistent delivery of an enhanced learning experience. The training system has been strategically aligned with the long term corporate goals, manifested in the backdrop of global, financial and economic scenario.
To promote all round development of the workforce, following measures were taken in the FY 2022-23 to make learning a continuous and more engaging experience so as to enhance productivity:
a. Enablers to prepare for new roles
i. Joining kits containing welcome booklets illustrating birds eye view of organization were prepared for new inductees.
ii. Ready Reckoners for First Time Circle Heads and First Time Branch Heads were prepared to facilitate them in discharging their newly assumed responsibilities as per corporate expectations. This helped their transition to new roles seamlessly.
b. Promoting experiential learning
i. In order to promote experiential learning and facilitate delivery engagement in training programs, Group Discussions, presentations, role plays, case studies, simulations etc. have been included in training programs. This ensures practical exposure and more productive training experience.
c. Management/Leadership Development
i. To make a positive difference at the leadership level, Management Development Program and Leadership Development Programs are conducted for the newly promoted officers in Scale IV-VI in-house in collaboration with expert trainers. 806 executives were imparted Leadership and Management Development Trainings through programs conducted in 17 batches. Further, 40 newly promoted executives in Scale VII and VIII were also sent for Senior Leadership Program conducted by SBIL Kolkata.
ii. Mid-Career Program for officers in Scale IV and V having service length of 14-21 years, with residual service of minimum 10 years and above, in line with recommendation from CVC was also conducted for the first time ever for 39 officers to prepare them for future roles.
iii. Circle Heads being the focal point for any business command area, it is necessary that they should be able to drive businesses that are both sustainable and profitable. Towards this end, for handholding, a Workshop was conducted last year for 41 first time Circle Heads. The Workshop also gave a platform to Circle Heads to voice their concerns and the feedback given by them to support business growth were discussed in the Top Management discussion forum and feasible ideas were implemented as well.
d. Emphasis on Behavioral Skills and Digital Products
i. Behavioral skills are vital for employees of any organisation, but in service industry where there is direct customer dealing on daily basis, this becomes a quintessential skill to work upon and towards this end, capsule programs on Soft Skills and Digital Products were conducted in FY 2022-23 to inculcate attitudinal change in frontline staff for enhanced customer experience. On Location Programs (OLPs) were also conducted at Complaint Prone Branches. A total of 169 OLPs were conducted sensitizing employees on soft skills and customer service. Soft Skills, customer service and behavioural skills were covered in 24 training programs (both exclusive programs or as a part of other programs) through which 46,285 employees were trained in several batches.
ii. The Bank has taken the path of Digital Transformation and with many digital innovations in our kitty, we have been able to register our presence in the Digital sphere. We have enhanced our lending experience by coupling our Digital Journeys with the lending platforms. Recently, we have revamped PNB One- our flagship mobile app. To improve the outreach of these digital initiatives, frontline staff is being imparted trainings on Digital products. The impact of trainings was visible in the strong growth in PNB One adoption last year. Average daily active users of PNB One increased from 3.3 Lakh as on 31st March, 2022 to 6.3 Lakh as on 31st March, 2023. Digital transactions as a whole increased from 69 per cent to 85 per cent in last Financial Year. Further, e-learning modules are also available for all staff on Digital initiatives to keep them updated of the latest changes happening in the Bank.
e. Promoting inclusivity
i. Agenda of Learning & Development vertical is not just to cater to functional learning of staff, but also to motivate the workforce by different methods such as seminars as a part of training agenda. One such initiative taken last year (FY 2022-23) was conducting Womens Conclave for lady executives in the Bank. The Workshop was aimed at motivating the female officers on career progression. 812 female officers were covered under the initiative including 297 senior lady officers. Gynaecologists were called in such Workshops to sensitize women on health issues.
ii. Bank is also looking at ways to make differently abled staff more productive by honing their skills under initiative of finding ability in disability by conducting training programs for specially-abled staff. Such training programs ensure maximum contribution of human resource of the Bank in business growth. A total of 174 specially-abled (Visually Impaired and Orthopedically Challenged) employees were trained in 2 batches in program for Follow-up for irregular loan accounts. The group made 8,000 to 12,000 calls per working day averaging more than 10,000 each day. The total calls were more than 25,00,000 during the financial year 2022-23. As a result of follow-ups by this group, SMA 0 & SMA 1 accounts were regularized. With an objective to empower the specially-abled, a training program to create awareness about Bank Products was also conducted for 21 Speech and Hearing impaired staff.
iii. As per statutory requirement, pre-promotion training was imparted to 16,629 eligible employees in FY2022-23.
f. Transcending the limits of traditional lecture/ module based learning
i. With Banks increasing focus on Digitalization and many Digital journeys being introduced, LKMC has prepared 36 interactive Do It Yourself (DIY) and educative videos to promote better understanding of its features amongst staff as well as customers.
ii. Training vertical has also taken initiative of curating booklets in the past FY for facilitating field functionaries with consolidated guidelines/SOPs/FAQs/common errors in Recovery Functions. Further, booklets with SOPs for the Digital Journeys being launched were also prepared by the Training vertical of the Bank. A total of 36 booklets were prepared to guide the field functionaries. The impact of quick knowledge dissemination can be seen in strong progress across key business metrics leveraging digital in FY2022-23.
iii. To sensitize the customers on Cyber Security and to make them aware of modus operandi used by fraudsters, a booklet on Cyber Security was also prepared which is available on Corporate Website forthe benefit of ourcustomers.
WAY FORWARD
Going ahead, the world of banking is expected to be more collaborative as well as competitive, with newer players offering innovative financial products. Instead of competing with the fintech firms, banks will look for partnerships in the near future, which will enable banks to reduce costs, increase operating efficiency, and create better customer experiences. Banks also need to prepare themselves for facing the dynamic environment, while keeping their focus on appropriate business models, sustainability, stability and consumer centrality. More importantly, good governance remains fundamental to success and should not be compromised. Due care needs to be taken to protect the stakeholders from digital frauds, data breaches and cybercrimes.
The most important factor which will decide the future of the banks would be Customer Experience and Service. Providing real time supports, delivering personalized experiences, soliciting customer feedbacks, revitalizing digital experiences, etc., would be some of the key parameters which will play the active roles in customer attrition and retention.
The banking sector is going through a period of churning. The future of banking would witness a major shift in customers choices and preferences with enhanced expectations from the banking industry. To be future ready, banks and financial institutions need to earn the trust of their current as well as prospective customers. With greater openness of the economy and faster transmission of information and capital flows on account of advent of technology, it has become even more necessary to ensure credibility and confidence in the system and uphold business ethics in a compliant manner.
It is expected that Account Aggregator framework would accelerate the development of alternative lending models. This would enable small businesses, including street vendors that may not have traditional collateral, to secure a loan. As technology continues to advance, we expect more innovative models to emerge that leverage data, automation, and artificial intelligence to transform the lending landscape.
At Punjab National Bank, "Doing well by doing good" is more than just a phrase. We strongly believe that the Banks success stems from communities it is serving. The Bank will continue to cater to the cause of financial inclusion through its innovative products.
Going forward, Punjab National Bank shall continue to evolve and innovate to achieve its vision of being the best bank in the industry and being the employer of choice. The Bankwill continue to invest in technology and launch new digital journeys to provide a seamless experience to the customers. Furthermore, the Bank recognises that digitisation is not just about technology, but also about changing the way we work and interact with our customers. Accordingly, the Bank is committed to ensure that our customers benefit from the latest digital technologies and solutions and provide them with a truly world-class banking experience. The Bank will put more emphasis on ethical Banking, thereby giving importance to society and environment as well, instead of only increasing financial revenue as its end target.
The Bank will keep implementing robust credit underwriting and strong recovery measures to improve the asset quality. These measures will lead to sustainable growth in business and profitability of the Bank. The continuous targeted efforts of all the employees will improve the brand value and will reinforce Punjab National Bankas "the name you can Bank upon".
All the above factors will help the Bank to achieve its mission of offering "quality financial services by leveraging technology to create value for customers and other stakeholders, opportunities for employees and thus, contributing to the economic growth of nation" and fulfilling its vision of becoming "a globally trusted banking partner through customer-centric innovations, empowering employees and enriching lives of all stakeholders."
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ATTENTION INVESTORS
- Prevent Unauthorized Transactions in your demat / trading account Update your Mobile Number/ email Id with your stock broker / Depository Participant. Receive information of your transactions directly from Exchanges on your mobile / email at the end of day and alerts on your registered mobile for all debits and other important transactions in your demat account directly from NSDL/ CDSL on the same day." - Issued in the interest of investors.
- KYC is one time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary.
- No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorise your bank to make payment in case of allotment. No worries for refund as the money remains in investor's account."
www.indiainfoline.com is part of the IIFL Group, a leading financial services player and a diversified NBFC. The site provides comprehensive and real time information on Indian corporates, sectors, financial markets and economy. On the site we feature industry and political leaders, entrepreneurs, and trend setters. The research, personal finance and market tutorial sections are widely followed by students, academia, corporates and investors among others.
Risk Disclosure on Derivatives
- 9 out of 10 individual traders in equity Futures and Options Segment, incurred net losses.
- On an average, loss makers registered net trading loss close to Rs. 50,000.
- Over and above the net trading losses incurred, loss makers expended an additional 28% of net trading losses as transaction costs.
- Those making net trading profits, incurred between 15% to 50% of such profits as transaction cost.
Copyright © IIFL Securities Ltd. All rights Reserved.
Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213, IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248
We are ISO 27001:2013 Certified.
This certificate demonstrates that IIFL as an organization has defined and put in place best-practice information security processes.