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Punjab National Bank.

BSE: 532461 Sector: Financials
NSE: PNB ISIN Code: INE160A01022
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VOLUME 642580
52-Week high 231.60
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P/E 26.25
Mkt Cap.(Rs cr) 36,026
Buy Price 0.00
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Sell Price 169.30
Sell Qty 2000.00

Punjab National Bank. (PNB) - Director Report

Company director report

DIRECTORS’ REPORT 2016-17

The Bank’s Global Business reached Rs 1041197 crore as at the end of March’17re ecting a growth of 7.9% on a yearly basis. While the Global Deposits of the Bank at Rs621704 crore grew by 12.4% Global Net Advances recorded growth of 1.7% to reach Rs 419493crore as on 31st March’17. The Bank recorded a CASA growth of 26.5% andthe share of CASA to domestic deposits increased to 46%. In terms of Bottom-lineparameters the Bank’s Operating Pro t increased from Rs 11339 crore as on 31stMarch’16 to Rs 14565 crore as on 31st March’17.

In this backdrop your Directors take pleasure in placing the Bank’s Annual Reportfor FY’17 along with its audited Annual Financial Statements.

Our Performance A. Financial Highlights A.1. Balance Sheet

(Rs crore)

Parameters 31st March’ 16 31st March’17 Growth (%)
Total Business 965377 1041197 7.9
Deposits 553051 621704 12.4
Net Advances 412326 419493 1.7
A. 2. Pro t
(Rs crore)
Parameters FY’16 FY’17 (%)
Operating Pro t 11339 14565 28.4
Provisions 15313 13240 -13.5
Net Pro t -3974 1325 -

A.3. Key Ratios

(%)

Particulars FY’16 FY’17
Cost of Funds 4.93 4.60
Yield on Funds 7.28 6.74
Return on Equity (Net Worth) -ve 3.52
Net Interest Margin (Domestic) 2.95 2.69
Return on Assets -ve 0.19
Cost to Income Ratio 46.79 41.57

B. Operational Highlights i. PNB crossed the Total Business Figures of Rs 10lakh crore. CASA deposits of the Bank also crossed Rs 2.6 lakh crore mark. ii.PNB Tab Banking: Saving Bank Account opening through Tablet PC Based Solution waslaunched to provide quality services to HNIs and NRIs at their door step. It caters to HNIcustomers and family members salary accounts of educational institutions corporatebodies & remotely placed Army cantonments.

iii. Retail Asset Processing Cell (RAPC): The Bank has revamped the Retail CreditDispensation Model and replaced the existing model with RAPC model from 01.04.2016. RAPCsundertake all the activities from receipt of loan application through branches tillsanction of retail loan which has resulted in qualitative improvement in loan processing. iv.Back o ce for account opening: To strengthen our KYC system the Bank has startedopening saving and current account at centrally located Back o ce at each Zone. v. Forbringing more e ciency Financial Inclusion Division (FID) and Priority Sector & LeadBank Division (PS&LB) were merged to form Agri Business & Financial InclusionDivision. Retail Assets Division (RAD) and Resources Mobilization Division (RMD) weremerged to form Retail Banking Division. vi. PNB wallet named as "PNB Kitty"was launched.

vii. PNB also introduced Contactless Credit Cards namely "PNB Wave andPay". Another mobile application PNB

Yuva was launched for the youngsters.

viii. ATM Pro tability Model has been designed for e ective functioning of ATMs.

ix. Mr. Virat Kohli a young and energetic Indian cricketer has been chosen as brandambassador of the Bank because of his mass appeal to the youth of the country.

x. Sector 10 Dwarka Metro Station in New Delhi was branded as PNB Dwarka MetroStation.

C. Asset Quality

The Bank’s Gross NPA stood at Rs 55370 crore in FY’17 (FY’16: Rs 55818crore) and the Net NPA stood at Rs 32702 crore in FY’17 (FY’16: Rs 35423 crore).In terms of ratios Gross NPA ratio stood at 12.53% in FY’17 (FY’16: 12.90%) andNet NPA ratio stood at 7.81% in FY’17 (FY’16: 8.61%).

Gross NPA as well as Net NPA percentage has come down. PCR has also improved from51.06% in FY’16 to 58.57% in FY’17. In absolute terms also both Gross NPA andNet NPA as on 31.03.17 reduced as compared to 31.03.16.

Initiatives taken during FY’17

During the year bank initiated "Pan India Recovery Drive" (PIRD) givingtargets for each quarter to each Circle and Zone. These PAN India drives were successfulin increasing cash recovery and upgradation during the year.

The Bank also organized Mega Rin Mukti Shivirs for giving impetus to recovery in smalladvances to expedite the pace of settlement during the year.

As on March’17 1009 borrowers were declared as wilful defaulters as per RBIguidelines.

One Time Settlement (OTS) was also explored as a tool for expediting recovery duringFY’17; OTS in 90165 accounts was approved Rs 906 crore were recovered in approvedOTS cases.

NPA accounts as on 31.03.17 with aggregate outstanding of Rs 2981 crore were upgradedto standard category. Total cash recoveries in NPA accounts amounted to Rs 10677 crore.

During FY’17 the Bank invoked Strategic Debt Restructuring (SDR) in 9accounts with outstanding of Rs 2564 crore as on 31.03.2017.

During FY’17 5/25 scheme was implemented in 10 accounts with outstandingof Rs 2334 crore as on 31.03.2017.

Out of the existing 76 Corporate Debt Restructuring (CDR) restructured accounts(with outstanding Rs 11251 crore as on 31.03.2017) in 14 accounts PNB was assigned therole of Monitoring Institution. During the current year the successful exit was nalizedin 4 CDR accounts with outstanding of Rs 285 crore on payment of recompense amount.

The Bank has adopted the policy for New Framework for Revival and Rehabilitation(FRR) of MSMEs w.e.f. 14.07.2016. During FY’17 12 accounts were restructuredunder FRR for MSME with outstanding of Rs 77 crore.

For MSMEs which cannot be covered under CDR/ SDR/S4A/FRR the Bank put in place atransparent mechanism for restructuring of debts of potentially viable units. DuringFY’17 21 accounts were restructured with outstanding of Rs 2804 crore.

E. Digitalization: Towards ‘Digital PNB’

Moving towards cashless society and paperless banking the Bank undertook severalinitiatives to provide better prompt and e cient services to the customers.

Alternative Delivery Channels:

a. Internet Banking: As on 31.03.2017 around 0.93 crore customers (retailand corporate) were enrolled in internet banking service. During this year many newfeatures were added which included Debit card hot listing and Digital signature as asecond factor of authentication for doing transactions in Retail and Corporate InternetBanking.

b. Mobile Banking: As on 31.03.2017 the Mobile Banking Users were 0.71crore.

c. SMS Alert Services: As on 31.03.2017 around 4.65 crore customerssubscribed to SMS Alert Services. The service was further extended to 5 RRBs. OTP and SMSalert was introduced in multilingual languages.

d. ATMs: During FY’17 1218 new ATMs were installed and as an outcomethe total ATM network reached 10681. E-Surveillance systems were installed at ATMsites.Solar UPS were installed to decrease the downtime of ATMs on account of electricityfailure. ESQ ATM Monitoring System was installed for on line ATM monitoring and to takeprompt corrective/preventive actions in case ATM gets down.

Some of the new initiatives taken during FY’17 are given as under:

Launch of UPI (Uni ed Payment Interface) and BHIM:

A mobile based banking application called UPI was launched wherein the customers wereable to access their Bank accounts opened with di erent Banks in a single App. Totalnumber of Users Registered as on 31.03.2017 were 467475.

Number of PNB accounts registered for BHIM (Mobile app based on UPI) as on 31.03.2017are approximately 600000.

Aadhaar Enabled Payment System: Number of transaction carried out was 90.96 lakhand total amount transacted was Rs 3740.23 crore as on FY’17.

PNB Kitty: Number of users registered for PNB Kitty a mobile wallet as on31.03.2017 were 87144.

Green PIN for Debit Card: Green Pin facility was launched to curb physical pinprinting for debit card except PMJDY accounts. The Bank saved approximately Rs 43.00 croreunder this green initiative.

Business Debit Card: Business Debit Card was launched with enhanced transactionlimit permitting withdrawal up to Rs 1 lakh from ATMs and e-commerce transaction up to Rs3 lakh.

Virtual Card: All wallet users are issued a virtual debit card. This virtualcard can be used for e-Commerce transactions.

Bank introduced Card to card fund transfer facility to transfer funds from one debitcard to another debit card.

Self Service Kiosk: The Bank installed 2561 Cash Deposit /Multifunction Kiosk(including PNB Cash Acceptor cum ATM) and 3378 Pass Book updating Machines across thecountry. The machines installed in E-lobby are made available to customers 24*7. A realtime monitoring tool was implemented for e ective monitoring and to reduce the down time.

F. Management Information System

As per RBI guidelines the Bank implemented Standardized Approach for Credit Risk underBasel III through LADDER (Loans and Advances Data Desk for Evaluation & Reports)system thus enabling calculation of Risk Weighted Assets (RWAs) in respect of Loans &Advances.

During FY’17 1534885 Credit Information Reports (CIRs) of prospective borrowersunder Consumer category and 31555 CIRs under Commercial category were drawn from CIBILExperian High Mark & Equifax databases.

Around 4.70 lakh Immovable Properties (IP) & Movable properties were registeredwith Central Registry of Securitisation Asset Reconstruction and Security Interest ofIndia (CERSAI) by Bank till March’17.

A total of 47 scenarios were implemented in Anti Money Laundering (AML) solutions. AMLsolution for ve Regional Rural Banks (RRBs) which are sponsored by PNB was implementedsuccessfully.

The Bank has one of the largest branch networks of 6937 as on 31.03.2017. To ful ll thebanking needs of unbanked areas 178 new branches were added to the vast network ofbranches during the year.

International Presence

At present Bank has its overseas presence in 9 countries by way of 4 branches (2 HongKong 1 Dubai and 1 OBU-Mumbai) 2 Subsidiaries (London and Bhutan)1 Associate(Kazakhstan) 1 Joint Venture (Nepal) and 4 Representative O ces (Sydney-AustraliaShanghai-China Dhaka-Bangladesh and Dubai-UAE).

H. International Banking

The foreign exchange turnover was Rs 140814 crore for FY’17 with a growth of 5.18%on YoY basis. The Bank also has an International Service Branch in New Delhi for handlinginward remittances. During FY’17 the Bank handled remittance business of more thanRs 58147 crore showing a growth of nearly 0.45% YoY.

The Bank has Rupee Drawing Arrangements (RDA) with 36 Exchange Houses (30 in the Gulf2 in Singapore 2 in the USA 1 in Australia and 1 in Canada) to facilitate remittancefrom NRIs.

I. Operations

Organizational Restructuring: A four tier structure was introduced from 01.04.2016with Zonal o ces linking Head O ce to Circle O ces and branches.

Employee Suggestion Scheme: Around 460 suggestions were perused and cash incentiveswere given to 14 Sta members for suggestions accepted/implemented under the EmployeeSuggestion Scheme.

Demonetization exercise: At the time of demonetization the Bank issued regularguidelines installed suitable checks in Core Banking System and scrutinizedirregularities. Steps were taken to ensure proper implementation of guidelines/ directivesreceived from RBI/MOF. The eld functionaries were sensitized on handling of Speci ed BankNotes and introduction of new series of currency notes and mobile ATMs were placed inHospitals Railway Stations Joggers’ parks Markets Business establishments and Oces etc. Bank could mobilize huge amount of CASA due to the goodwill created during theperiod.

PNB Tab Banking: Saving Bank Account opening through Tablet PC Based Solution waslaunched as a step further to provide quality services to HNIs and NRIs at their doorstep. It caters to HNI customers and family members salary accounts of educationalinstitutions corporate bodies & remotely placed Army Cantonments.

Retail Asset Processing Cell (RAPC): The Bank has revamped the Retail CreditDispensation Model and replaced the existing model with the introduction of RAPC modelmade e ective from 01.04.2016. RAPCs undertake all the activities from receipt of loanapplication through branches till sanction of retail loan.

Back o ce for account opening: To strengthen our KYC system the Bank has startedopening saving and current account at centrally located Back o ce at each Zone

J. Indian Accounting Standards (IND AS)

The Bank has commenced the process of IND AS (Indian Accounting Standards)implementation for FY’17 and made a diagnostic study to identify the di erencesbetween the current accounting framework and IND AS. Bank has quanti ed the impact and ledthe pro-forma nancial statements for the half year ended September 2016 with the ReserveBank of India.

K. New Initiatives Division

The Bank already has its presence on Twitter and LinkedIn. Further the Bank opened ocial Facebook page for the public in the name of ‘Punjab National Bank HO NewDelhi’. Virtual debit cards were made available on mobile app PNB Kitty. L. BusinessDiversi cation

Mutual Fund: During FY’17 the Bank mobilized total amount of Rs 4545crore Asset under Management (AUM) stood at Rs 814 crore and brokerage earned was Rs 4crore.

Insurance Business

1. Life Insurance Business: Bank’s earnings from Life-Insurance businessduring FY’17 amounted to Rs 110 crore as against Rs 86 crore during FY’16showing growth of 28%. Total Business mobilized under Life Insurance since inception wasRs 4152 crore from 566667 policies and thus total earnings amounted to Rs 358 crore.

2. Non-Life Insurance Business: The revenue earned during FY’17 wasRs 28 crore as against Rs 25 crore during FY’16 showing a growth of 15%. Under‘PNB-Oriental Royal Mediclaim’ a customized health insurance policy 181913policies were sourced during FY’17 as against 158175 policies sourced duringFY’16.

Depository Services: The Bank earned an income of Rs 76 lakh during FY’17for providing Depository Services.

Online Trading Services: An income of Rs 28 lakh was received from Associates onaccount of Online Trading Activities during FY’17.

Merchant Banking: During FY’17 the Bank handled more than 454000Application Supported by Blocked Amount (ASBA) applications against 85 issues blocking anamount of Rs 2597 crore and earning Notional Income more than Rs 6.15 crore.

Credit Card: Among the PSBs the Bank is the largest issuer of credit cards andachieved a growth rate of 31% in issuance of credit cards in FY’17. To enhance thesecurity level of Bank’s credit cards EMV Chip cards with PIN were issued. As aresult of issuance of credit cards the Bank’s fee based income increased to Rs 14crore.

PNB Genie an app full of features was launched. It will act as singlepoint destination for cardholders to operate their PNB Credit Card seamlessly and withouthassles.

PNB National Electronic Toll Collection: PNB FASTag program is part ofNational Electronic Toll Collection (NETC) initiative rolled out by NPCI. FASTag is asimple to use reloadable tag which enables automatic deduction of toll charges

Merchant Acquiring Business: The Bank installed 38841 PoS terminals andintegrated 217 Internet Payment Gateways.

M. Government Business

The Bank partnered with India Post Payments Bank (IPPB) and provided technologyplatform alongwith managerial support at their o ces opened in Ranchi and Raipur.

Centralised on-line Collection & Disbursement (COCD) Portal was developed forthe Government for collecting Interest subsidy Margin Money CGTMSE Fee etc. Thisfacility will also bene t weavers to get instant Margin Money Credit directly to theiraccounts. Other developments are as under:

1. New Pension Scheme (NPS) was made live in o -line mode i.e. application will becollected through the Branches which are acting as POP-SP (Point of Presence ServiceProvider).

2. NPS contribution was made live through on-line mode for existing PRAN (PermanentRetirement Account Number) holders.

3. EPFO collections were made live through on-line mode and generation of ElectronicVeri cation Code (EVC) for Income Tax return ling.

4. Non-Tax Revenue Portal (NTRP) was introduced to facilitate all banks’ customersto pay their dues (other than taxes) to GoI and Payment of Equalization Levy through IBS(Online and O ine - both).

5. To bring e ciency in pension disbursement following facilities were introduced:

• Pension slips were made available in the pension server.

• An e-lobby cum veteran facilitation centre was set up at DiAV Delhi Cantt.& at Chandimandir Chandigarh.

• PCDA allocated space for setting up Centralized Pension Processing Cell (CPPC)at Allahabad in its campus.

N. Treasury Operations

Gross Domestic Investment as on 31st March’17 stood at Rs 183297 croreup from Rs 154727 crore as on 31st March’16 and registered a YoY growth of18.46%. The average investment as on 31st March’17 was Rs 175774 crore asagainst Rs 162548 crore in the corresponding period last year. Interest income frominvestment portfolio increased from Rs 11935 crore for FY’16 to Rs 12439 crore forFY’17. Total Trading Pro t (including derivative) increased from Rs 999 crore forFY’16 to Rs 2654 crore for FY’17.

Fixed Income (SLR/NSLR): During FY’17 Bank booked a Trading Pro t of Rs 2214crore from sale of investments in xed income up from Rs 504 crore during the correspondingperiod of previous year.

Equity: The Bank booked Rs 168 crore Trading Pro t in Equity segment and Dividendincome of Rs 96 crore.

Forex: Net Forex income decreased from Rs 1320 crore during FY’16 to Rs 1155crore during FY’17. However Exchange Pro t from treasury operations increased fromRs 386 crore in FY’16 to Rs 547 crore in FY’17.

O. Customer Care

Initiatives undertaken during FY’17 for improvement in customer service included:

• Four Sub-Committee meetings were conducted.

• The Standing Committee on Customer Service held four meetings.

• O cials of the Bank made 1353 incognito visits to branches pan India. Circle Oces took corrective steps to plug the loopholes pointed out by the visiting o cials.

Due to increased transparency the number of complaints received during FY’17increased to 35257 as compared to 29654 complaints received during FY’16. 217complaints were outstanding as on 01.04.2016 and out of total number of 35474 complaints35159 complaints were redressed as on 31st March’17. The number ofcomplaints pending as on 31.03.2017 was 315 which have since been resolved.

Two awards were passed by o ce of the Banking Ombudsman during FY’17. Appeals wereled against the two awards. Appellate Authority has set aside one award passed by BankingOmbudsman Kanpur while decision is pending under second appeal.

P. Implementation of O cial Language Policy

For FY’17 the Bank achieved all the targets in the parameters xed by the Govt. ofIndia Ministry of Home A airs Department of O cial Language.

During FY’17 the Bank received more than 120 awards for its excellent performancein the use of Hindi which included prestigious Rajbhasha Kirti Shield a top mostaward scheme of Govt. of India besides RBI Rajbhasha Shield (Consolation Prize in region‘A’ & ‘C’ Third Prize in region ‘B’ and Second Prizefor PNB PRATIBHA in Bilingual Magazine Category) and other Regional Level Awards ofMinistry of Home A airs.

Articles received under various competitions organized during the year 2016 werecompiled in the book ‘PNB PRAVAH- Sarjna Ke Naye Aayam’.

Q. PNB’s Subsidiaries and Regional Rural Banks

a. PNB Gilts Limited

The Bank has an ownership of 74.07% in PNB Gilts Limited as on 31.03.2017. DuringFY’17 Company ful lled all its obligations as a Primary Dealer in both primary andsecondary market. During the year its Pro t before Tax stood at Rs 257 crore which isthe highest since inception. It made an impressive Trading Pro t of Rs 186 crore due toincreased churning of portfolio which led to total secondary market outright turnover ofRs 6.5 lakh crore as against Rs 3.8 lakh crore in FY’16. b. Punjab National BankInternational Limited (PNBIL)

PNBIL is a wholly owned subsidiary of Punjab National Bank. Total Business of theCompany decreased from $2834 million as at 31st March 2016 to $2212 million as at 31stMarch 2017 a year-on-year decrease of 21.95% due to the consolidation exerciseundertaken.

The Operating Pro t before provisions tax and dividends for FY’17 decreased by47.26% to $20.05 million from $38.26 million in FY’16. The Total Income decreased by$19.16 million (35.20%) from $54.43 million to $35.27 million. Net Interest Income fell by$12.59 million and Net Trading Income by $6.65 million. The expenditure to income ratioincreased to 43.16% from 29.71% despite slight reduction in cost due to lower income.

Gross impaired advances increased to $299.39 million ($144.99 million in 2016) leadingto additional impairment provisions of $153.39 million. The net impaired advancesincreased to $40.83 million in 2017 from $36.37 million in 2016. As a result the Companydeclared a loss before tax of $133.34 million.

The Company had a CRAR of 21.70% as on 31st March’17 and met all otherCET1 and Tier 1 regulatory capital requirements (PNB infused $100 million).

c. Punjab National Bank Investment Services Limited (PNBISL)

PNB has 100% ownership in PNBISL. During the year ended March’17 the Companyearned fee based income of Rs 9.03 crore with a total income of Rs 12.14 crore. Pro tbefore Tax for FY’17 stood at Rs 6.33 crore as against Rs 6.12 crore for FY’16.

d. DRUK PNB Bank Ltd. Bhutan

PNB has 51% ownership in DRUK PNB Bank Ltd. Bhutan. The Bank is currently operatingwith a network of 6 branches and 18 ATMs. Pro t of the Bank increased from Rs 22 croreduring FY’16 to Rs 25 crore during the FY’17 showing a YoY growth of15.25%. Total Business of the Bank stood at Rs 1435 crore as on 31.03.2017. CASA Ratio ofthe Bank stood at 57.38% as on 31.03.2017.

Gross Non Performing Loans (NPL) Ratio of the Bank decreased to 3.30% as on 31.03.2017from 3.96% as on 31.03.2016. The Net NPL ratio of the Bank stood at 1.99% as on31.03.2017. The Return on Equity (ROE) as on 31.03.2017 stood at 15.99% and Earning pershare was Rs 3.92 as on 31.03.17.

e. PNB held 51% share in PNB Housing Finance Ltd (PNBHFL) a subsidiary ofthe Bank. Subsequent to the IPO of PNBHFL on 06.11.2016 this changed to 39.08%

f. Regional Rural Banks

At present ve RRBs are sponsored by the Bank. These RRBs are operating in ve Statesnamely Bihar Haryana Himachal Pradesh Punjab and Uttar Pradesh covering 75 districtswith a network of 2386 branches.

S.N Name of Regional Rural Banks / Other Associates Proportion of Ownership
(%)
1 Madhya Bihar Gramin Bank Patna 35
2 Sarva Haryana Gramin Bank Rohtak 35
3 Himachal Gramin Bank Mandi 35
4 Punjab Gramin Bank Kapurthala 35
5 Sarva UP Gramin Bank Meerut 35

The aggregate paid-up capital of these Regional Rural Banks is Rs 199 crore. CentralGovernment State Governments and PNB contributed in paid-up capital of these RRBs in theratio of 50:15:35 respectively. The Bank’s contribution towards capital of these RRBsis Rs 69.76 crore. The combined Networth of RRBs as on 31st March’17 is Rs3479 crore.

Performance of RRBs as on 31.03.2017

(Amt. in Rs crore)

Performance of RRBs 31st March’16 31st March’17 YoY Growth
%
Aggregate Deposits 33492 40092 19.71
Aggregate Advances 19832 21792 9.88
Aggregate Net Pro t 286.21 279.96 -2.18
Branches under CBS 100% 100%
Pro t Per Employee (Rs lakh) 3.28 3.13 -4.57
No. of Loss Making Branches 84 127
(being 12 month old or more)

R. Awards and Accolades

During FY’17 in recognition of its performance and initiatives PNB receivedvarious awards some of which are:

1. Best MSME Bank Award-Winner (Large Category) by CIMSME.

2. Vigilance Service Excellence Award 2016-17 by Institute of Public Enterprises (IPE)Hyderabad.

3. BFSI Tech Maestro Awards 2016 in Application category for four node cluster byBitstream Mediaworks Pvt. Ltd.

4. National Payments Excellence Awards 2016 for Aadhaar Enabled Payments System (AEPS)by National Payments Corporation of India (NPCI).

5. Outlook Money Awards 2016- Education Loan Provider (Runners Up) by Outlook Money.

6. CSR Initiatives & Business Responsibility Award-Runner-Up (Large Category) byCIMSME.

S. Future Business Plan of the Bank

Against the backdrop of robust macroeconomic stability demonetization derailed thegrowth momentum partially. With the Government reforms measures however opportunitiesacross all segments are expected to increase. The Bank did well in a challengingsituation. The asset quality improved but pro tability and credit emerged as other bigchallenges. The Bank has the potential to deliver more to the shareholders and thestrategy for FY’18 is designed to deliver that potential.

For the next year the focus areas and objectives would be pro tability with stablegrowth improvement in asset quality reduction in risk-weighted assets sustenance ofCASA growth momentum and acceleration in pace of digitalization to align businesses moreclosely around the needs of the customers. For credit the Bank will target semi-urban andrural areas where the Bank has signi cant presence and focus will be on small ticketadvances in MSME Agriculture Retail etc. The focus will continue to be maintained ongetting qualitative accounts rather than quantitative numbers.

Technology is transforming the way Bank reaches its customers. Increasingly customersconnect with the Bank through smart phones laptops tablets and other mobile devices.This is an opportunity we are determined to avail. The Bank through digitization ofinternal processes will bring in bene ts of reduced cycle time fewer exceptions andlesser costs resulting in greater e ciency. Also under present circumstancesdigitalization o ers business potentials in terms of installing POS machines introducingnew credit and debit cards e-wallets etc.

Looking ahead we see FY’18 as another year of challenges of disciplinedimplementation of our Strategy to build on the momentum and make decisive progress towardsbetter growth and higher pro tability. With focus on cashless economy Bank willconstantly innovate and come up with faster solution for every business need.HopefullyFY’18 will be a year where the Bank will take a quantum leap when it comes todigitalization and retail and will emerge as PNB Retail Express on Digital lines.

T. Directors’ Responsibility Statement

The Directors con rm that in the preparation of the annual accounts for the year ended31st March’17:

The applicable Accounting Standards have been followed along with proper explanationrelating to material departures if any;

The accounting policies framed in accordance with the guidelines of the Reserve Bankof India were consistently applied;

Reasonable and prudent judgment and estimates were made so as to give a true and fairview of the state of a airs of the Bank at the end of the nancial year and of the pro t ofthe Bank for the year ended 31st March’17;

Proper and su cient care was taken for the maintenance of adequate accounting recordsin accordance with the provisions of applicable laws governing banks in India and;

The accounts have been prepared on the principle of "going concern" basis.

U. Acknowledgement

The Board expressed thanks to the Government of India Reserve Bank of IndiaSecurities and Exchange Board of India Stock Exchanges Bank’s customers public andthe shareholders for valuable support continued patronage and con dence reposed in theBank.

The Board wishes to place on record its appreciation for the valuable contribution madeby the members of the Bank’s sta at all levels and look forward to their continuedinvolvement in achieving the future goals.

For and on behalf of Board of Directors

Sunil Mehta

Managing Director& CEO