Punjab National Bank continues to evolve at 124 years old

Punjab National Bank (PNB) is India's first Swadeshi Bank that commenced its operations on April 12, 1895, from Lahore. An interview with Sunil Mehta, Managing Director and CEO of the bank. Excerpts:

Could you tell us about your bank's overall operations and its recent achievements?
The Bank in its long and cherished history of more than 124 years has evolved with the changing business environment, intensifying competitive scenario and soaring customer expectations.
It has taken up a transformational exercise for Business Excellence namely 'Mission Parivartan' to enhance Efficiency, Productivity and Profitability for long term sustenance and giving it an edge over its competitors. The Bank has a strong franchise value and provides a host of financial products and services to individuals, businesses (corporate, small and medium enterprises), professionals, self-employed, farmers, artisans etc. The Bank has a diverse and vast customer base of more than 100 million customers and more than 70,000 employees. By placing more thrust on Financial Inclusion, the Bank has built up a robust Retail Presence with 62 per cent of its branches located in Rural and Semi-Urban areas.
PNB is the second largest Bank in India with more than 7,000 Domestic Branches and overseas presence with three Foreign offices (Dubai, Hong Kong, OBU in Mumbai), two overseas subsidiaries (PNBIL and Druk PNB Ltd Bhutan) and one joint venture Bank in Nepal (Everest Bank Ltd.). The extensive branch network is supplemented by 9,318 ATMs and 8,101 Banking Correspondents (BCs).
Due to its prudent banking services and constantly evolving business model, the Bank has been able to achieve various landmarks which include attaining the Number One position in Sep'18 amongst Nationalised Banks in India in terms of Global Business, CASA Deposits, Assets and Decline in Gross NPAs and net NPAs. Also, the Bank's Gross Global Business remained at more than Rs. 11 lakh crore in Sep'18 owing to better recoveries in NPAs and sound business practices.

How is the Indian banking sector expected to perform over the coming years?
The overall outlook for the banking sector is positive as economic growth prospects remain healthy, driven by steady investment growth and strong consumption.
A strong revival in bank credit growth during the first half of 2018-19 by private and Public Sector Banks (PSBs) suggests that an overall improvement in the health of banks is on the cards. The continuing revival in credit in 2018-19 may further reinforce this momentum.
As per Financial Stability Report released recently by RBI, Indian Banking Sector has begun to show a declining trend in NPAs. The report indicates that asset quality of banks improved as the GNPA ratio of SCBs (Scheduled Commercial Banks) decreased from 11.5 per cent in March 2018 to 10.8 per cent in September 2018. We expect that this tempo will keep going so that the underlying issues are tackled timely and once the resolution process under Insolvency and Bankruptcy Code (IBC) picks up, it will ensure a significant positive multiplier effect for the entire economy.
The Government had announced a massive recapitalisation plan for PSBs, and there is likelihood of more capital infusion in the near future. This will strengthen the balance sheet of banks enabling them to increase their credit flow to the productive sectors thereby leading to more investments and positive externalities for the economy.
On the technology front, the banking industry will continue to innovate, adopt newer and better technology for superior customer experience. The role of Artificial Intelligence, Block Chain Technology, will be more defined in the coming years in the Indian Banking sector.

Do you see a lot of churn happening in the sector?
The sector is undergoing a massive transformation with lots of regulatory changes, technological innovation, rising customer expectations, high demand for skilled manpower and so on.
The sector has accepted the changes taking place and also adapted to the changing business and competitive scenario. Being a service industry, the sector has to grow constantly and keep innovating to serve the customers' soaring expectations.

Could you tell us about your presence in the UAE?
The Bank has a presence at the Dubai International Financial Centre (DIFC), where the branch is catering to the business requirements of companies incorporated in the UAE and other GCC countries as well as international clientele. In Dubai operations, the Bank is focusing on shifting from short term advances to medium and long-term advances. The Bank is also laying importance on collateralised lending and better Treasury Management and Earnings.

What are the products you offer to NRIs?
The bank has come out with various products and services for NRI customers. In deposits schemes, the Bank has a wide variety of savings accounts products including Non-Resident External (NRE), Non-Resident Ordinary (NRO) and PNB Global Rupee Deposit Scheme (NRE).
The Bank has retail loans for NRIs including for housing. It also provides the facility of Digital Services for the NRIs viz. Internet Banking, Mobile Banking, online opening of FD/RD accounts and missed call balance enquiry on the international number.
It also has a centralised NRI Help desk which is functioning at E-Bay (NRI Cell) to attend to the queries/request of NRI customers. It also has a facility like NRI Help desks set up at all Zonal Offices and select circle Offices.

Tell us about your bank's technological innovations?
Punjab National Bank has always been a front-runner in adapting to change as well as adopting the latest technology. The Bank opened its first Digital Branch, "PNB DIGIHUT" at the Head Office in Dwarka and the concept is being replicated at other major centres. These branches would enable customer's immediate opening of accounts along with instant issuance of Debit cards. The customers can also interact with the Customer Care Executives about the various products and services.
It has also come out with an app PNB ONE, which is an amalgamation of various banking processes being delivered through a single platform. This all in one application allows transfer of funds, view account statement, manage debit card and credit card and many other value-added services at the fingertips.
The Bank continues to offer newer digital products and services and has provided facilities for online availment of Overdraft facility against the fixed deposit, scanning of the merchant QR code with PNB mobile Banking for online transactions with PNB MasterCard, upgradation of mobile banking to unified mobile banking application offering instant account opening in multiple languages.

How much of an impact do NRIs have on the economy of India?
NRIs have a significant impact on the economy especially by way of remittances. The inflow of foreign exchange strengthens the reserves of the country thereby reducing the current account deficit. It also acts as a cushion in times of currency crisis.
As per World Bank report, over the last three years, India registered a significant flow of remittances, from $62.7 billion in 2016 to $65.3 billion 2017. In 2017, remittances constituted 2.7 per cent of India's GDP. Continuing the trend, India is likely to retain its position as the world's top recipient of remittances in 2018 also with its Diaspora sending $80 billion back home.

What are your views on the prospects for the Indian economy in 2019-20?
In FY'19, the Indian economy is likely to grow at its fastest pace as it recovers from the twin shocks of demonetisation and implementation of GST. India will continue to remain the fastest growing major economy in the world with a growth rate projected at 7.5 per cent as per the World Bank's Global Economic Prospects.
The recapitalisation package for public sector banks announced by the Government will help strengthen banks' balance sheets, support credit growth to the private sector and stimulate investment.
Sunil Mehta, Managing Director and CEO, Punjab National Bank.