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Atul Kumar Goel, Managing Director and CEO of Punjab National Bank, emphasises the critical role of remittances in supporting and stabilising the Indian economy
Atul Kumar Goel, Managing Director and CEO, Punjab National Bank.
As one of India’s foremost public sector banks, Punjab National Bank (PNB) has consistently played a pivotal role in the nation’s financial landscape since its establishment in 1895.
In addition to its impressive financial metrics, including a significant reduction in credit costs and enhanced capital adequacy, PNB is at the forefront of digital transformation.
Atul Kumar Goel, Managing Director and CEO of PNB, highlighted the bank’s innovative initiatives, such as a plethora of digital products and streamlined services, and said PNB is enhancing customer experience and expanding accessibility.
"PNB is committed to enhancing customer experience through innovative banking solutions and digital transformation," Goel said during an interview.
Excerpts from the interview:
Could you provide an update on the current status and performance of your bank?
PNB, the second-largest public sector bank in India, has been a leading force in the financial sector since its inception in 1895. The bank has significantly contributed to the upliftment of the Indian economy and pioneered financial inclusion. PNB continues to uphold its legacy as one of India's premier public sector banks, consistently delivering strong performance across various parameters.
Recently, PNB announced its first quarter of FY25 financial results, showcasing significant improvements in key financial metrics, business growth, asset quality, capital adequacy, and profitability. The bank's business grew by 10 per cent, reaching ₹24.36 trillion in June 2024. The operating profit and net profit of ₹6,581 crore and ₹3,252 crore, respectively, are the highest quarterly numbers since the amalgamation with two other public sector banks in April 2020.
Enhanced underwriting and data analytics-based collection and monitoring have reduced the bank's credit cost to 0.32 per cent in the June 2024 quarter. Focused recovery efforts brought down the Gross Non-Performing Assets (GNPA) ratio to 4.98 per cent and the Net NPA ratio to 0.60 per cent. The bank’s Provision Coverage Ratio (PCR) also improved to 95.90 per cent in June 2024. PNB remains well-capitalised, with a Capital to Risk (Weighted) Assets Ratio (CRAR) of 15.79 per cent, well above the regulatory requirement of 11.50 per cent. These indicators reflect the strong financial health of the bank.
PNB is committed to enhancing customer experience through innovative banking solutions and digital transformation. Over the past two years, the bank has launched more than 100 digital products and processes. Notable digital initiatives include end-to-end digital journeys such as pre-approved personal loans, pre-approved business loans, and Krishi Tatkal Rin. The Liberalised Remittance Scheme (LRS) through Mobile Banking (PNB ONE) and Internet Banking offers convenient and secure banking anytime, anywhere.PNB plans to introduce a Digital Business Platform consolidating all digital journeys on a single platform and a Gen Next Call Centre.
Additionally, the bank has launched Project UDAAN to ensure objective and merit-based assessment of human resources and enhance productivity. PNB’s multi-directional efforts and remarkable work have earned the bank various awards and accolades. The bank received the ET BFSI Award from Economic Times and was ranked second overall under EASE 6.0. PNB also won the TransUnion CIBIL Award for Best Data Quality.
Are NRIs sending significant funds to India, and which schemes are they primarily opting for?
Yes, NRIs are remitting funds due to the presence of a large Indian diaspora. To tap into these funds, the bank is offering various schemes to benefit NRI customers. Besides sending funds to support their families, NRI customers are also investing in India to earn higher interest rates, with a preference for deposit schemes such as NRE and FCNR (B).
PNB offers all regulator-permitted deposits and other schemes. The bank provides attractive interest rates on NRE and FCNR (B) deposits. FCNR (B) deposits are available in six major currencies: USD, AUD, GBP, CAD, EUR, and JPY. These schemes are preferred by NRIs due to the additional benefits provided by PNB. Additionally, PNB offers international debit cards, internet banking, and mobile banking, which can be accessed globally for customer convenience.
What unique value propositions does your bank offer to attract the maximum number of NRIs?
The bank has taken numerous steps to enhance convenience for NRIs by providing a wide range of products and services. PNB allows NRIs to open accounts at any of its branches across the country. Additionally, the bank has 50 specialised NRI branches dedicated to serving NRIs. A 24/7 NRI Customer Service Centre (NCSC) has also been established to facilitate account opening, KYC updates, debit card issuance, account statements, and internet/mobile banking registration. The bank also offers WhatsApp Banking for NRIs. To address queries and concerns, PNB has dedicated toll-free numbers across various countries, including the US, UK, UAE, Saudi Arabia, Italy, Philippines, and Canada. Moreover, PNB provides a callback request facility for NRI customers through PNB ONE.
Looking ahead, the bank plans to introduce Dedicated Relationship Managers for NRI customers and a Forward Premium Linked FCNR (B) scheme to offer better interest rates on NRE deposits.
What do you say about the internationalisation of the rupee, and what efforts is your bank making to support this initiative?
The Reserve Bank of India (RBI) published a report on the internationalisation of the Rupee, submitted by the Inter-Departmental Group (IDG), on July 5, 2023. The IDG believes that the INR has the potential to become an internationalised currency, given India's status as one of the world's fastest-growing economies. The RBI is already taking various steps to facilitate this transformation and enhance the currency's global acceptability. These steps include regulatory changes for non-residents and bolstering the appeal of GIFT City compared to other international financial centers. In support of the internationalisation of the INR, PNB has opened Special Rupee Vostro Accounts (SRVA) with neighboring countries. The bank has begun opening current accounts for customers to settle export and import transactions through SRVA, offering special concessions on export-related transactions routed through these accounts.
How do remittances play their part in stabilising the Indian economy?
According to a report released by the RBI on Currency and Finance, global remittances have seen significant growth, led by India ($115.3 billion), Mexico ($66.2 billion), China ($49.5 billion), and the Philippines ($39.1 billion). India's remittance ratio to GDP has increased from 2.8 per cent in 2000 to 3.2 per cent in 2023, providing substantial support to the Indian economy.
The primary sources of remittances to India include Indian expatriates working in countries such as the US, the UAE, Saudi Arabia, and other Gulf nations, as well as Indian diaspora communities worldwide. To facilitate these remittances, the bank has established Rupee Drawing Arrangements (RDA) in the Middle East and other regions with high concentrations of NRIs.
As the largest recipient of remittances, India has taken various steps to strengthen these inflows. The country has implemented policies and initiatives to streamline remittance processes, including liberalising foreign exchange regulations, enhancing digital payment infrastructure, and offering incentives for remitters and recipient families. Additionally, the government has partnered with financial institutions and fintech companies to promote cost-effective and efficient remittance channels.
Digitalisation has transformed cross-border remittances and global capital flows by lowering costs, increasing transparency and efficiency, fostering financial inclusion, and aiding in coordination and risk management, thereby boosting the Indian economy. Recently, India has also partnered with countries such as Singapore and the UAE to enable payments through Unified Payments Interface, accelerating the remittance process for people living abroad.
— kushmita@khaleejtimes.com
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