PNB banks on corp, retail loan flow to boost growth

NEW DELHI: Punjab National Bank, the country's second-largest state-run lender, will focus on renewable energy, defence, roads, engineering, and transmission as it seeks to build upon the over Rs 1.3 lakh crore corporate loans that are in the pipeline.

"We are beefing up our focus on three to four sectors in the large corporate segment. We have a very strong pipeline of over Rs 1.1 lakh crore corporate loans that were sanctioned last year but were not disbursed, and another Rs 21,000 crore were approved in April," PNB chief executive & MD Ashok Chandra told TOI.

He said that so far, there was little impact of tariffs. "From the corporate loan sanctions, you can see there is a lot of activity. The growth can be 15-16%. Lower interest rates will also help the offtake of corporate and retail loans," he said, adding that the bank has lined up a strong retail push, apart from agriculture and MSMEs.

While it looks to double its exposure to self-help groups to over Rs 20,000 crore this year, PNB is also focusing on retail loans, tapping into govt's focus and expects its Rs 8,500-crore education loan portfolio to expand significantly. Besides, it will tap into the growing demand for home loans, promising to sanction loans within 48-72 hours for projects that have received RERA approval. Lower rates are expected to be especially useful, given that PNB has lowered rates to 7.95%.

A healthy growth in the retail loan segment is expected to help the bank reduce the weight of low-yielding corporate loans. In the last quarter, it shed Rs 30,000-35,000 crore of such loans from its corporate portfolio, and the plan is to reduce it by another Rs 10,000-15,000 crore.

Chandra said the bank is generating a healthy flow of term deposits to meet its credit flow requirements, and the recently launched deposit schemes that come with special offers such as cancer or health cover will help it mop up current and savings account balances. Since April 13, nearly 1.8 lakh accounts were opened, raising Rs 300 crore, and the target is to open 10 lakh such accounts in three months to rake in Rs 2,000-3,000 crore in a year.

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