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Tag: Punjab National Bank

  • Govt appoints Asheesh Pandey as MD of Union Bank, Kalyan Kumar as head of Central Bank of India

    The government has appointed Asheesh Pandey as managing director (MD) and CEO of Union Bank of India and Kalyan Kumar as head of Central Bank of India for a period of three years.

    The Appointments Committee of the Cabinet headed by the Prime Minister approved these appointments for an initial period of three years, sources said.

    Pandey, currently Executive Director of Bank of Maharashtra, has been appointed as MD and CEO of Union Bank of India for a period of three years with effect from date of assumption of charge of the office.

    Kumar, Executive Director of Punjab National Bank (PNB), will succeed M V Rao as MD and CEO of Central Bank of India after his superannuation in July.

    The Financial Services Institutions Bureau (FSIB) on May 30 recommended Pandey and Kumar for the post of MD and CEO of Union Bank of India (UBI) and Central Bank of India, respectively.


    FSIB is headed by former Department of Personnel and Training Secretary Bhanu Pratap Sharma.

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    Other members of the headhunter are Animesh Chauhan, former chairman and MD of erstwhile Oriental Bank of Commerce, the Reserve Bank‘s former executive director Deepak Singhal, and Shailendra Bhandari, ex-MD of erstwhile ING Vysya Bank.

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  • RBI slaps ₹1.32 crore monetary penalty on PNB

    RBI slaps ₹1.32 crore monetary penalty on PNB

    The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹131.80 lakh on Punjab National Bank (PNB) for non-compliance with its directions issued on ‘Loans and Advances’ and ‘Know Your Customer (KYC)’.

    Based on supervisory findings of non-compliance with its directions (after Statutory Inspection for Supervisory Evaluation with reference to PNB’s financial position as on March 31, 2022) and related correspondence in that regard, RBI said a notice was issued to the bank advising it to show-cause as to why penalty should not be imposed on it for its failure to comply with the directions.

    After considering the bank’s reply to the notice and oral submissions made during the personal hearing, RBI found, inter alia, that the following charges against the bank were sustained, warranting imposition of monetary penalty, the central bank said in a statement.

    RBI noted that the public sector bank (i) sanctioned working capital demand loans to two State government owned Corporations against amounts receivable from government by way of subsidies/refunds/reimbursements, and (ii) failed to preserve the records pertaining to the identification of customers and their addresses obtained during the course of business relationship in certain accounts.

    The central bank said its action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transactions or agreement entered into by the bank with its customers.

    Further, imposition of monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank.

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  • Bank of Maharashtra tops PSU lenders chart in loan, deposit growth in Q1

    Bank of Maharashtra tops PSU lenders chart in loan, deposit growth in Q1

    State-owned Bank of Maharashtra (BoM) has emerged as the top performer among public sector lenders in loan and deposit growth in percentage terms during Q1 FY24.

    The deposit and advances of the Pune-based lender recorded almost 25 per cent rise, the highest by any public sector bank during the April-June quarter.

    With a growth rate of 24.98 per cent, the gross domestic advances of the bank rose to ₹1,75,676 crore at the end of June 2023, according to published quarterly numbers of the public sector banks (PSBs).

    Also read: Bank of Maharashtra cuts home and car loan interest rates

    It was followed by UCO Bank with 20.70 per cent growth, while Bank of Baroda with 16.80 per cent and Indian Overseas Bank with 16.21 per cent growth were at third and fourth spot, respectively.

    Country’s largest lender State Bank of India stood at fifth spot with 15.08 per cent rise in domestic advances growth.

    However, SBI’s total loans were about 16 times higher at ₹28,20,433 crore, as compared to ₹1,75,676 crore of BoM in absolute terms.

    In terms of Retail-Agriculture-MSME (RAM) loans, BoM has the highest growth of 25.44 per cent followed by Punjab & Sind Bank with 19.64 per cent and Punjab National Bank at 19.41 per cent on Y-o-Y basis.

    Also read: Bank of Maharashtra’s advances to grow 1.5 times the banking industry average in FY24: Chief Rajeev

    With regard to deposit growth, BoM witnessed a 24.73 per cent growth and mobilised ₹2,44,365 crore at the end of June 2023.

    Bank of Baroda was in the second place with a 15.50 per cent growth in deposits (₹10,50,306 crore), while Punjab National Bank recorded a 13.66 per cent increase at ₹12,67,002 crore, according to published data.

    BoM retained top position in terms of garnering low-cost Current Account and Savings Account (CASA) deposits with 50.97 per cent followed by Central Bank of India at 49.56 per cent.

    Helped by high growth in loan and deposits, the bank’s total business also recorded the highest growth of 24.84 per cent at ₹420,041 crore, followed by Bank of Baroda at 16.10 per cent at ₹18,62,932 crore at the end of June 2023.

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  • AT-1 Bonds: Market has become polarised towards larger/ quality banks, says Jefferies

    AT-1 Bonds: Market has become polarised towards larger/ quality banks, says Jefferies

    The Additional Tier (AT)-1 bond market has polarised towards large/quality banks post the writedown of these bonds aggregating ₹8,415 crore by Yes Bank in the fourth quarter of FY20, according to Jefferies.

    This observation comes in the backdrop of UBS’ acquisition of the troubled Credit Suisse entailing a write-down of the latter’s AT-1 bonds aggregating $17.2 billion.

    Explained: How will the Credit Suisse crisis impact India?
         Explained: How will the Credit Suisse crisis impact India?
     

    “India had a Credit Suisse-like AT-1 bond issue right around Covid when Yes Bank wrote-down AT-1 bonds and still there was some franchise value assigned to equity through capital infusion by leading banks/ NBFC.

    “Since then, the issuances have been lower and market has become polarised towards larger/ quality banks,” Brokerage firm Jefferies said in a report.

    Top contributors

    Among banks, the top three issuers are the State Bank of India (SBI), HDFC Bank, and Canara Bank with public sector banks (PSBs) having higher contribution from this.

    PSBs have a higher share of AT-1 bonds in capital structure compared to private sector peers, Jefferies said.

    Among PSBs, SBI had AT-1 capital of ₹41,500 crore, followed by Canara Bank (₹12,400 crore), Punjab National Bank (₹8,700 crore), Bank of India (₹2,900 crore), and Indian Bank (₹2,000 crore), the firm said.

    Among private sector banks, HDFC Bank had AT-1 capital of ₹12,300 crore, followed by ICICI Bank (₹5,100 crore), Axis Bank (₹4,800 crore), IndusInd Bank (₹1,500 crore), and Kotak Bank (₹500 crore)

    “Interestingly, smaller banks have a lower contribution from AT-1 bonds. Local bond market investors aren’t really seeing risks here for Indian stocks,” Jefferies said.

    ‘Better-placed’

    The report observed that Indian financials (banks and NBFCs) have also borne the rub-off effect of global dislocations. But, they are better placed with a higher share of retail deposits, limited ALM (asset-liability mismatch) gap & MTM (mark-to-market), limited dependence on AT-1 bonds, and lower exposure to riskier segments like promoter/acquisition finance.

    While equities and global bonds saw pressure off late, the local bond market is stable. Post correction, valuations of some are near/below Covid lows, the firm said.

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  • Use of technology in banking, its obstacles explained by top Indian bank CEOs

    Use of technology in banking, its obstacles explained by top Indian bank CEOs

    Sanjiv Chadha, MD & CEO of Bank of Baroda, says the usual link between growing the business and growing the physical footprint has broken for all times to come. “The mobile channel is pretty much the bank for sourcing, distribution, and servicing,” says Chadha.

    Chadha gave the example that the public sector bank has grown its business by 35-40 per cent in the last three years, but the number of branches has come down by 15 per cent and staff has not grown at all. “That means enormous operating leverage can be created through technology if you get your act together,” he adds.

    V Vaidyanathan, CEO of IDFC First Bank, says growing credit is easy, but the role of technology is to enable a seamless experience, reach out to underserved people, and help build a quality portfolio.

    Dinesh Khara, Chairman of SBI, says, ”what we see on the face is the customer’s convenience, but there are other elements like the risk and payback period.” Khara was amongst the panellist in an IBA seminar on banking technology here today.

    AK Goel, MD & CEO of Punjab National Bank, touched upon the issue of technology creating ’affordability’ for the masses. IDFC First’s Vaidyanathan pointed out that one of the biggest paradoxes of banking is that the poorer you are, the higher the interest rate you end up paying. “The big role technology should and can play is by reducing the cost of operations at the bottom of the pyramid,” says Vaidyanathan.

    PD Singh, CEO of JP Morgan Chase Bank, says that the foreign bank spent over US $12 billion last year, which is more than the size of many tech companies. “That’s how important it (technology) has become,” says Singh.

    In terms of IT skills and talent, the largest bank has created a new cadre within the bank.

    “We are also hiring IT talent from the market,” says Khara. In fact, the SBI made a senior lateral hire in Nitin Chugh, the deputy MD and Head of Digital Banking. Chugh previously served as the CEO of Ujjivan Small Finance Bank and as the digital head of the private-sector HDFC Bank.

    Chadha says that the technology partner could help you bring a change to the organisation, but embedding the change doesn’t come easily. “That’s where bringing in lateral talent and allowing it to grow is fundamental to that change,” believes Chadha.

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