Hopes to recover Rs 200 crore from bad loans in 2005-06. | |
| As part of its turnaround strategy, Punjab & Sindh Bank (P&S Bank) aims to bring down its net non-performing assets (NPAs) to 2 per cent by March 2008 from 8 per cent in the beginning of the current financial year. |
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| The bank has recovered nearly Rs 100 crore from bad loans in the first six month of this year and expects to end 2005-06 with net NPA levels below 6 per cent. |
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| "The bank is committed to turnaround by March 2008," a senior government official said. It had a loss of Rs 71 crore in 2004-05 but expects to register a profit of about Rs 50 crore for the half year ended 30 September. |
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| With the Rs 500 crore capital infusion by the government taking care of Punjab & Sindh Bank's capital requirement, as per the Basel II norms, the bank is focusing on improving productivity and increasing business. |
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| It has entered into a memorandum with its employees, according to which the latter's working hours have been extended by two hours. Overtime, too, has been done away with. |
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| As part of its information technology initiative, Punjab & Sindh Bank plans to float a request for proposal (RFP) for implementing core banking solution (CBS) to link about 200 of its branches within the next 12 months. |
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| "We expect to recover about Rs 200 crore from bad loans in 2005-06 and further upgrade outstanding of Rs 150 crore from bad loans to regular by recovery of overdue instalments," a senior bank executive said. |
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| The bank is seeking fortnightly reports from its zones on the progress on recoveries and has reactivated a committee, which independently examines each compromise case where a concession of Rs 50 lakh or more is proposed. |
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| The bank has 669 cases pending with the debt recovery tribunal (DRT) with outstanding worth Rs 825 crore. Besides, the bank is pursuing settlement through compromise and securitisation. |
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| As part of the restructuring, Punjab & Sindh Bank plans to relocate some of its branches to maximise reach. |
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| For instance, Punjab & Sindh Bank plans to relocate some of its branches located in the congested areas of the capital to outer areas. |
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| The bank aims to increase its business, as with a staff strength of 9,600, its advances at Rs 6,322 crore in March 2005 were considerably low. |
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| In comparison, Oriental Bank of Commerce with about 15,000 employees had advances of Rs 27,500 crore as in June 2005. |
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| THE RECOVERY ROADMAP |
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| Plans for an initial public issue in 2007-08 The bank plans to bring net NPAs below 6 per cent March 2006, below 4 per cent by March 2007 and below 2 per cent by March 2008 Targeting a net profit of Rs 100 crore in 2005-06 P&S Bank re-activated monitoring mechanism for recovery of bad loans, Actively pursuing cases through compromise and the debt recovery tribunal Signed a memorandum with employees to increase working hours Targeting a net profit of Rs 100 crore in 2005-06 To invite proposals to implement Core Banking Solution across 300 branches |
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