Punjab National Bank is aiming to bring down its Gross Non-Performing Assets (GNPA) to below 3%, a milestone it has not reached in years, says MD & CEO Ashok Chandra. In an interview with Sachin Kumar, he outlines the bank’s roadmap for the current financial year, including efforts to boost low-cost deposits through segment-specific CASA schemes and expected surge in credit growth, led by the corporate and RAM (Retail, Agriculture, MSME) sectors.,
What is your outlook on credit growth, and which sectors will drive this growth?
Given the RBI’s accommodative stance, improved liquidity, and government incentives such as tax benefits, we expect a healthy credit growth this year. We already have a strong pipeline of sanctioned loans, including Rs 1.15 lakh crore approved in FY25 and an additional Rs 28,000 crore sanctioned in the current fiscal for the corporate segment. In total, we have Rs 1.35 lakh crore in the corporate loan book, which will be disbursed over the coming quarters. Beyond corporate lending, we are focusing aggressively on the RAM sector—Retail, Agriculture, and MSME—where we expect 14-15% growth.
Our initial guidance was for 11-12% credit growth. We now believe we will surpass this target by the end of the financial year, driven by strong demand across key sectors.
What is your outlook on deposit growth in the current financial year?
The measures taken by the RBI will ensure adequate liquidity in the banking system. We are already seeing a decline in the cost of deposits, and funds are available even at lower rates. As a result, the pressure on deposit mobilisation has eased. Our bank has demonstrated strong performance in deposit mobilisation, achieving a 14% growth in deposits and 13.6% in advances for the full year. Given the current scenario where deposits are available at lower rates, we do not foresee significant challenges in deposit mobilization. However, growing the CASA segment remains a key focus area.
To address this, we launched several customer-centric products on April 12th, our Foundation Day. These include specialised schemes for salaried individuals, non-salaried customers, women, youth, farmers, pensioners, senior citizens, and NRIs. Each of these schemes is designed with tailored benefits to attract different customer segments.
Since the launch, we have already opened 1,80,000 new accounts, contributing Rs 300 crore in fresh CASA deposits. We expect over 1 million new accounts in the next six months, which should add Rs 2,000-3,000 crore to our CASA deposits. With these strategic initiatives, we are confident in achieving robust deposit growth this fiscal year.
Do you plan to revise or cut Fixed Deposit or savings account rates?
We currently have no plans to reduce savings account rates. Regarding fixed deposit rates, we have already reviewed certain segments and made minor adjustments, reducing some slabs by 10-15 basis points. One special FD scheme has been discontinued as part of this realignment.
However, we are closely monitoring market conditions and will take a final decision on further revisions by the second week of June. Our approach remains cautious, ensuring that any changes align with broader economic trends and competitive dynamics.
Will you be able to sustain improvement in your asset quality in this current financial year?
Yes, we are committed to further strengthening our asset quality. For FY26, we have set clear targets. We are going to bring gross NPA below 3% in the current financial year and net NPA down to 0.35%, improving the provision coverage ratio to over 96%, and maintaining credit cost below 0.5%.
We are also targeting total recoveries of Rs 16,000 crore, including Rs 6,000 crore from technical write-offs. Our quarterly recovery goal from this segment is Rs 1,500 crore. Achieving these milestones will mark a significant improvement in PNB’s asset quality, with gross NPA falling below 3% for the first time in several years.
Bond yields are easing. what is your outlook on treasury gains this year?
With bond yields softening, we anticipate a significant boost in treasury income. We project around 10% growth in treasury earnings this fiscal, supported by favourable market conditions. The easing of yields has already contributed to healthy gains in recent quarters, and we expect this trend to continue.
What is the progress on CBDC so far?
The adoption of Central Bank Digital Currency has been progressing well. As of now, we have onboarded 4,29,000 users and processed nearly 6.3 million transactions. The response has been encouraging from our customers.