PNB brass to monitor high-value NPA accounts

Fraud-hit Punjab National Bank( P NB) has strengthened its mechanism for recovering bad loans by asking all its general managers (GMs) and deputy general managers (DG Ms) at its headquarters to monitor all N PA accounts above ~50 million. D GM sat its headquarters in Delhi will monitor loan accounts in the range~50-250million, while GMs will look after N PA accounts above ~250 million.

Fraud-hit Punjab National Bank (PNB) has strengthened its mechanism for recovering bad loans by asking all its general managers ( GMs) and deputy general managers (DGM) at its headquarters to monitor all non-performing asset (NPA) accounts above ~50 million.

“All GMs and DGMs working in the PNB corporate office will share the responsibility of monitoring bad loans and their recovery. Each GM and DGM will have an oversight of 10-15 NPA accounts and there are 1,100 such accounts overall,” a senior PNB executive said.

DGMs at PNB’s headquarters in Delhi will monitor loan accounts in the range ~50-250 million, while GMs will look after NPA accounts above ~250 million. The PNB headquarters has 27 GMs and 35 DGMs.

“The intrinsic involvement of all GMs and DGMs to accelerate recovery means that all other projects except recovery and CASA [current account, savings account] have been put on hold,” an official said.

Separately, the bank has shifted over 3,000 officials from operations departments across the country to a stressed assets vertical, which started functioning on June 1.

Four GMs have been tasked with heading the recovery vertical as part of the bank's strategy to fast-track recovery of NPAs. This follows recommendations from the finance ministry, which has asked all public sector banks to create a stressed assets management vertical for focus on recovery “through a dedicated, specialised and motivated team”.

In the first quarter of this financial year, PNB expects to complete recovering NPAs worth ~80 billion. “While PNB had recovered ~56 billion in the whole of last year, the bank’s recovery stood at ~60 billion at the end of the first week of June,” the PNB executive said.

The resolution of the insolvency of Bhushan Steel has helped PNB. The bank hopes bad debts will fall by ~38.57 billion. PNB Managing Director and Chief Executive Officer Sunil Mehta has been visiting all the metros to settle stressed accounts, according to an executive. The bank expects a recovery of ~33 billion from the resolution of NPA cases pending before the National Company Law Tribunal (NCLT). That includes ~14 billion of Bhushan Power and Steel and ~13 billion of Essar Steel.

PNB had recorded the highest-ever quarterly loss by any domestic bank, at ~134 billion, in the fourth quarter of 2017-18. This was mainly due to fraudulent loans, amounting to ~143 billion, to firms belonging to Nirav Modi and Mehul Choksi and the Reserve Bank of India’s (RBI’s) new provisioning norms. The bank is aiming to clock its largest-ever quarterly profit of ~55 billion in the July-August period this financial year.