Tag: pnb

Here’s a recap of key managerial announcements in top public sector banks so far, BFSI News, ET BFSI

Banking & Finance

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Public sector banks have been witnessing many changes in their top management, be it extension of tenure or appointment of new key managerial personnel.

The finance ministry had in July asked the Department of Personnel and Training (DoPT) to extend the tenure of a number of managing directors and executive directors to ensure stability and continuity at state-owned lenders.

The Appointments Committee of the Cabinet (ACC), headed by Prime Minister Narendra Modi, has extended the tenure for three managing directors and chief executive officers, and 10 executive directors of public sector banks.

Only one bank, Indian Bank, has appointed its new MD and CEO so far..

Here’s a quick recap of all the noteworthy movements, recommendations and tenure extensions of top PSB officials:

Indian Bank

Shanti Lal Jain was appointed the Managing Director and Chief Executive Officer of Indian Bank for a period of three years. His tenure started from September 1, 2021, and is extendable for two years or until attaining the age of retirement, whichever is earlier.

He replaced Padmaja Chunduru, whose term with the bank ended on August 31. Jain was previously working as the Executive Director of Bank of Baroda.

Meanwhile, the ACC extended the term of Shenoy Vishwanath Vittal, executive director, till the age of superannuation.

PNB

BBB last month recommended Atul Kumar Goel as the MD & CEO of Punjab National Bank, after interviewing 11 candidates.

Apart from this, BBB has kept Ajay Kumar Shrivastava on the reserve list for the post.

Currently, Goel is serving as the MD & CEO of Kolkata-based UCO Bank. He is also on the boards of Star Union Dai-ichi Life Insurance and The New India Assurance.

The government in August extended the term of S S Mallikarjuna Rao, the existing MD & CEO of PNB chief till January 31, 2022. Rao’s term was supposed to end on September 18, 2021.

Further, terms of Sanjay Kumar and Vijay Dube, executive directors, have been extended until their age of superannuation.

UCO Bank

The government may appoint Soma Sankara Prasad, currently the deputy managing director of State Bank of India, as managing director of UCO Bank.

According to PTI, since Prasad was in the reserve list for the post of managing director at Indian Bank, he has been recommended to head UCO Bank. The final decision will be taken by the ACC.

The government had extended the tenure of Atul Kumar Goel for two years. His term was scheduled to end on November 1, 2021.

Bank of Maharashtra

The government extended the tenure of AS Rajeev, MD and CEO of Bank of Maharashtra, for a two years beyond the notified term, expiring on December 1, 2021.

Bank of Baroda

The tenure of Ajay Khurana as executive director has been extended by two years. He is also on the reserve list for PNB’s MD and CEO post. Meanwhile, the tenure of Vikramaditya Singh Khichi, another ED, has been extended until his age of superannuation.

Canara Bank

The tenure of A Manimekhalai, executive director, has been extended by two years.

Bank of India

The tenure of P R Rajagopal, executive director, has been extended by two years. .

Union Bank of India

The government has extended the terms of Gopal Singh Gusain and Manas Ranjan Biswal as executive directors until their age of retirement.

Central Bank of India

The tenure of Alok Srivastava has been extended until his age of superannuation.



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Moody’s raises rating outlook to stable for 18 corporates, banks, BFSI News, ET BFSI

Banking & Finance

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Moody’s Investors Service on Wednesday raised the rating outlook for 18 Indian corporates and banks, including Reliance Industries, Infosys, SBI and Axis Bank, to ‘stable’ from ‘negative’. This follows the upgrade by the US-based rating agency in India’s sovereign rating outlook to ‘stable’ from ‘negative’ on Tuesday. The agency had affirmed the sovereign rating at ‘Baa3’.

The nine companies whose rating outlook has been revised upwards are RIL, TCS, Infosys, ONGC, Petronet LNG Ltd, UltraTech Cement, Oil India, Indian Oil Corporation and Hindustan Petroleum Corporation Ltd (HPCL).

The agency also affirmed the rating on privatisation-bound Bharat Petroleum Corporation (BPCL), but maintained the ‘negative’ outlook.

The nine banks whose outlook has been revised to ‘stable’ are SBI, Axis Bank, Bank of Baroda, Canara Bank, Axis Bank, HDFC Bank, ICICI Bank, PNB, Union Bank and EXIM Bank.

“Stabilization in asset quality and improved capital are the main drivers of this rating action,” Moody’s said.

Also, the rating outlook has been revised to ‘stable’ from ‘negative’ on 10 Indian infrastructure issuers, including NTPC, NHAI, PGCIL, Gail, Adani Transmission and Adani Ports and Special Economic Zone Limited (APSEZ). PTI JD ABM ABM



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Ahead of festive season, banks slash interest rate on home loans. Get the details here, BFSI News, ET BFSI

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Festive season has commenced and banks as well as non-banking financial institutions have already rolled out a plethora of festival offers like lower interest rates on loans and waiver of processing fees.

Ahead of the festive season, many top banks have announced offers and discounts on home loans.

State Bank of India (SBI), ICICI Bank, Punjab National Bank (PNB), Kotak Mahindra, Bank of Baroda (BoB) and Yes Bank are among the banks offering home loans at attractive rates.

The offer is for a limited time period.

Bank Women Others Effective Rate of Interest Offer valid upto
SBI – – 6.70% onwards –
ICICI Bank – – 6.70% onwards –
Yes Bank 6.65% onwards (salaried) – 6.70% onwards 1-Oct to 31 Dec 2021
Kotak Mahindra Bank – – 6.50% onwards 10-Sep to 8-Nov-21
Punjab National Bank – – 6.60% onwards

Source: Official Websites

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Ahead of festive season, banks slash interest rate on home loans. Get the details here, BFSI News, ET BFSI

Banking & Finance

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Festive season has commenced and banks as well as non-banking financial institutions have already rolled out a plethora of festival offers like lower interest rates on loans and waiver of processing fees.

Ahead of the festive season, many top banks have announced offers and discounts on home loans.

State Bank of India (SBI), ICICI Bank, Punjab National Bank (PNB), Kotak Mahindra, Bank of Baroda (BoB) and Yes Bank are among the banks offering home loans at attractive rates.

The offer is for a limited time period.

Bank Women Others Effective Rate of Interest
SBI – – 6.70% onwards
ICICI Bank – – 6.70% onwards
Yes Bank 6.65% onwards (salaried) – 6.70% onwards
Kotak Mahindra Bank – – 6.50% onwards
Punjab National Bank – – 6.60% onwards

Source: Official Websites

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Soma Sankara Prasad likely to be next UCO Bank MD, BFSI News, ET BFSI

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The government is considering appointing Soma Sankara Prasad, the deputy managing director of State Bank of India, as managing director of Kolkata-based UCO Bank. The Banks Board Bureau (BBB) has suggested the name of UCO Bank Managing Director Atul Kumar Goel for heading Punjab National Bank as MD. The managing director position of PNB will fall vacant after the superannuation of S S Mallikarjuna Rao in January.

According to sources, since Prasad was in the reserve list when the interview for appointment for managing director of Indian Bank took place earlier this year, he has been recommended to head UCO Bank subject to various clearances including vigilance.

The final view in this regard would be taken by the Appointments Committee of the Cabinet (ACC) headed by the Prime Minister, sources said.

The BBB, the headhunter for state-owned banks and financial institutions, in May had conducted interviews for the position of MD of Indian Bank. Post interview, Shanti Lal Jain was recommended for the post while Prasad was the candidate on the reserve list.

Last month, the Reserve Bank removed UCO Bank from its Prompt Corrective Action (PCA) Framework following improvement in various parameters and a written commitment that the state-owned lender will comply with the minimum capital norms.

The lender also apprised the RBI of the structural and systemic improvements that it has put in place, which would help the bank in continuing to meet the financial commitments. The public sector bank plunged under PCA in May 2017.

PCA is triggered when banks breach certain regulatory requirements such as return on asset, minimum capital and quantum of the non-performing asset.

The restrictions disable banks in several ways to lend freely and force them to operate under a restrictive environment that turns out to be a hurdle to growth.

UCO Bank had posted over a four-fold jump in its net profit to Rs 101.81 crore for the first quarter of the fiscal ended June 30, as bad loans fell significantly.

The lender trimmed its gross non-performing assets (NPAs or bad loans) significantly to 9.37 per cent of the gross advances as of June 30, 2021, as against 14.38 per cent at June-end 2020.

The net NPAs were down at 3.85 per cent (Rs 4,387.25 crore) from 4.95 per cent (Rs 5,138.18 crore). PTI DP ANZ MR



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SBI, Union Bank, PNB pick up stake in NARCL, BFSI News, ET BFSI

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Three state-owned lenders — SBI, Union Bank of India and PNB — picked up over 12 per cent stake each in the proposed bad bank NARCL on Thursday, and said their holdings will be brought down by December. While State Bank of India (SBI) and Union Bank of India picked up 13.27 per cent stake each, representing a cumulative 3.88 crore shares in the National Asset Reconstruction Company Ltd (NARCL), PNB subscribed to 12.06 per cent stake (1,80,00,000 shares).

In a regulatory filing on the subscription to 1,98,00,000 shares of NARCL (pending execution of the investment agreement), the country’s largest lender SBI said the “investment of equity stake of 13.27 per cent by State Bank of India to be reduced to 9.90 per cent by 31st December 2021”.

Union Bank of India, in its regulatory filing, said it has subscribed to 1,98,00,000 shares of NARCL (pending execution of investment agreement).

The lender said it will bring down its stake of 13.27 per cent to 9.90 per cent by December 2021 on subscription by other public sector banks (PSBs)/ financial institutions.

“Punjab National Bank has subscribed to 1,80,00,000 shares of National Asset Reconstruction Company Ltd (pending execution of investment agreement),” the bank said in a separate filing.

PNB said it will bring down its stake from 12.06 per cent to 9 per cent by December 31, 2021.

NARCL, which is yet to become operational, will take over the bad assets of banks in its own account for speedy resolution of sour loans.

All the three lenders have subscribed to the equity in NARCL at Rs 10 per share. The completion of the acquisition by them is expected by March 2022.

Earlier this month, the Cabinet cleared a proposal to provide government guarantee worth Rs 31,000 crore to security receipts issued by the NARCL.

Incorporated on July 7, 2021, NARCL will pay up to 15 per cent of the agreed value for the bad loans in cash and the remaining 85 per cent would be government-guaranteed security receipts.

It will be 51 per cent owned by PSBs and the remaining by private sector lenders. State-owned Canara Bank has expressed its intent to be the lead sponsor of NARCL with a 12 per cent stake. PTI KPM ABM ABM



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BoI, Union Bank, PNB may gain most from bad bank, BFSI News, ET BFSI

Banking & Finance

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The National Asset Reconstruction Company (NARCL) will have maximum impact on loan books of Bank of India (BoI), Union Bank and Punjab National Bank (PNB), which will sell over 1% of their loans to the bad bank. According to rating agency Crisil, the bad bank, or NARCL, will lower the NPA level of banks by 20-25% over time.

However, the immediate impact on the bottom line will be limited as lenders who sell loans in the first phase will receive just around Rs 2,700 crore upfront cash payment as against the Rs 90,000 crore of bad loans they sell to the corporation. Also, investing in the security receipts issued by NARCL will not increase the capital requirement of banks due to the government guarantee.

Of the Rs 2 lakh crore of bad loans to be transferred to NARCL, around Rs 30,600 crore will be guaranteed for five years. NARCL will pay 15% of whatever amount the loans are valued at, in cash. The remaining 85% will be paid using security receipts. According to a Jefferies report, the government guarantee will keep the security capital neutral as without the guarantee banks will have to set aside funds towards provisions. A sovereign guarantee being risk-free does not attract similar capital requirements.

“For the guaranteed part, banks will recognise the value as an investment but that will not require any capital for 5 years as there is government guarantee. For non-guaranteed part, banks might not recognise value until actual recovery is made,” the Jefferies report said.

According to the report, of the first lot, SBI will be transferring the biggest chunk of loans at Rs 20,000 crore. However, given the size, the sale will be only 0.8% of its loan book. While BoI, Union Bank and PNB will be selling much less at Rs 5,500 crore, Rs 7,800 crore and Rs 8,000 crore, their loans will be a much bigger chunk of their balance sheet. For BoI, the loans sold will be 1.5% of its book, 1.3% for Union Bank and 1.2% for PNB, Jefferies said.

“The sovereign guarantee will cushion security receipt investors against potential lower recoveries. This could, in turn, potentially enable the development of a secondary market in security receipts, which has proved elusive so far,” said Crisil senior director and deputy chief ratings officer Krishnan Sitaraman.

The loans sold to the bad bank include Rs 22,500-crore exposure to Videocon Oil Ventures, where SBI is the lead bank. Another large account is Union Bank-led account of Amtek Auto, which has Rs 9,014 crore of bank loans. IDBI is the lead banker in three large accounts — Reliance Naval, Jaypee Infra and GTL.



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Banking… Not without a glitch?, BFSI News, ET BFSI

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Not just server down, but ‘technical glitches’ seems to have become a common term for banks.

The number of glitches in the online banking space seems to be rising, with recent cases surprising everyone – large sums being transferred to wrong bank accounts.

So far, two cases from Bihar have actually uncovered the system issues in the banking system.

A glitch that credited funds

A private tutor in Khagaria was erroneously credited Rs 5.5 lakh in his bank account by the South Bihar Gramin Bank, and two school students in Katihar were credited Rs 960 crore overnight by the North Bihar Gramin Bank.

The tutor has been arrested for not returning the money, according to The Hindu, while the incident that happened with the two school students is under investigation.

For the Katihar case, the bank’s branch manager said that there was some glitch in the computerised system of sending money. The amount was visible in their statements but the actual money wasn’t in their account. For the Khagaria case, however, the money was credited and the tutor claimed that he did not return the money because it was government relief sent to him.

The two incidents have caused havoc, making villagers run to ATMs to check if they too had been struck with such luck, according to NDTV. But, so far, only two such incidents have been reported.

This is, however, not the first time such a ‘glitch’ has happened.

Banking... Not without a glitch?

Glitches by Citi, HDFC, PNB

In February, one of the world’s largest banks – Citibank – accidentally transferred $900 million to cosmetic company Revlon’s lenders. Citi was serving as the administrative agent or loan agent between Revlon, the embattled cosmetics company, and its creditors.

The bank accidentally paid those lenders much more than it had to. The bank had to credit only $8 million, but ended up transferring $900 million, according to reports.

The US District Court judge termed this to be the “biggest blunder in banking history”, after the bank had moved the court, because it still had not received $500 million from the accidental transfer.

Apart from erroneous transfers, there have been other incidents of continuous technical glitches to an extent that the Reserve Bank of India banned a top private bank from issuing new credit cards – the bank’s best seller.

HDFC Bank was the bank that was banned for eight months from issuing new credit cards.

The RBI had taken this step after customers faced multiple glitches in the bank’s internet and mobile banking systems for over two years.

On Friday, Punjab National Bank‘s Twitter account was seen flooded with complaints from several customers. They raised concerns over the technical glitches they have been facing throughout this week.

Below are two of the many instances from PNB’s Twitter account –

“Dear customer, we regret the inconvenience caused to you. Our App service is facing glitches due to some technical difficulty. However, our team is working on the same and it will be resolved soon.” – has been the bank’s standard reply to all such complaints.

Glitches in the PNBONE mobile application have been rising. This could be because of the newly built app “PNBONE” after the mega merger of Oriental Bank of Commerce, United Bank of India with Punjab National Bank, sources, who did not wish to be named, said, adding that the tech team is looking to help resolve all the issues for a better banking experience.

At times, customers face technical glitches when banks go for maintenance activities. Failed transactions and reconciliation takes its own time and customers have no choice than waiting and hoping for the seamless service.

Check out our entire coverage on banking sector here



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PNB cuts repo-linked lending rate by 25 bps to 6.55%

Banking & Finance

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Punjab National Bank (PNB) on Friday said it has reduced its the repo-linked lending rate (RLLR) by 25 basis points (bps) to 6.55 per cent from 6.80 per cent earlier.

“The repo-linked lending rate (RLLR) has been changed from 6.80 per cent to 6.55 per cent, with effect from September 17, 2021 (Friday),” PNB said in a regulatory filing with the bourses.

This is expected to push retail lending as it comes ahead of the upcoming festival season.

The RLLR, which was introduced in October 2019, is a floating rate-based and is linked to the repo rate of the Reserve Bank of India (RBI).

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Punjab National Bank’s board approves raising Rs 6,000 crore, BFSI News, ET BFSI

Banking & Finance

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New Delhi: Punjab National Bank (PNB) on Friday said its board has approved raising up to Rs 6,000 crore by issuing bonds. The decision was taken at the meeting of the board of directors on Friday.

In a regulatory filing, the bank said its board has “approved raising of capital through issue of Basel III additional Tier-1 (AT-1) bonds or Tier II bonds or a combination of both in one or more tranches up to an amount of Rs 6,000 crore”.

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