State-run Punjab National Bank (PNB) has revised up its credit growth forecast for the current fiscal to 12-13% from 10% projected earlier, given the impressive growth in recent months amid heightened economic activity, its managing director and chief executive Atul Kumar Goel said on Wednesday.
The bank has sought permission to open a special rupee vostro account of the correspondent banks of a partner trading country to facilitate cross-border trade settlement in rupees, in sync with the central bank’s guidelines issued earlier this fiscal, Goel said. Several countries have shown interest in the rupee trade. Goel was speaking to reporters a day after the bank announced its September quarter results.
PNB has identified nine accounts, involving non-performing asset (NPA) of Rs 2,752 crore, for transfer to the National Asset Reconstruction Company (NARCL) in the first phase. The so-called bad bank has given PNB the offer to take over five accounts with NPAs of Rs 1,099 crore, he said. In total, the state-run lender aims to transfer 62 accounts with bad loans of Rs 20,008 crore to the NARCL in phases, he added. In the second phase, it’s planning to sell 11 accounts, with bad loans of Rs 2,685 crore.
PNB’s credit growth hit as much as 12.8% in the September quarter from a year before, prompting the bank to revise its earlier forecast. The bank may cut its excess SLR (statutory liquidity ratio) reserves to further boost credit flow if it so requires, Goel said, given that deposits have been rising at a slower pace of about 7%. The bank has about Rs 50,000 crore in excess SLR, he added. According to the latest RBI data, gross bank credit (food and non-food) grew 16.9% on year in September, against 6.4% a year earlier, reflecting a spurt in economic activity.
Commenting on the curtailing of PNB’s overseas operations, Goel said it booked profits of Rs 260 crore in the September quarter from the operations in Hong Kong, where it has shut shop now. The bank still has operations in Dubai, which it doesn’t plan to close down, Goel added.
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Goel highlighted that the bank’s gross NPA ratio has come down by 315 basis points in the September quarter from a year before to 10.48%. On a quarter-on-quarter basis, the ratio improved by 79 basis points. It’s expected to go down to the single-digit by the end of this fiscal, he added.
The net NPA ratio improved by 169 basis points to 3.80% in the September quarter from a year before, and by 48 basis points from the June quarter.