CoC to meet on JSW-Bhushan case in 3 days: PNB MD & CEO Ashok Chandra

The Committee of Creditors (CoC), led by Punjab National Bank in the case of Bhushan Power and Steel Ltd (BPSL), will be meeting with other lenders

Punjab National Bank (PNB) expects clarity on the JSW-Bhushan development loan account in the next three days, said Managing Director and Chief Executive Officer ASHOK CHANDRA in a video interview with Harsh Kumar. The state-owned lender on Wednesday reported a 51.7 per cent year-on-year (Y-o-Y) increase in its net profit to ₹4,567 crore for the fourth quarter of 2024-25. The net profit was ₹3,010 crore in the year-ago period. Edited excerpts:

 

When is the Committee of Creditors (CoC) meeting scheduled to decide the future course of action in the case? And what would be the provision requirement for PNB due to this JSW-Bhushan development? 

The Committee of Creditors (CoC), led by PNB in the case of Bhushan Power & Steel, will be meeting with other lenders with exposure to the account in the next two to three days. We are in regular contact with all other members of the CoC and will take the necessary decisions based on the Supreme Court’s verdict following our upcoming meeting. We have already received ₹3,000 crore from JSW Steel after resolution, which represents 0.25 per cent of the total exposure on our books.

 

What is your guidance for 2025-26 (FY26) for PNB? 

Our guidance for FY26: we are targeting credit growth in the range of 11–12 per cent, which we consider a minimum achievable goal. Deposit growth is projected at roughly 10 per cent, and we aim to maintain the current account-savings account ratio at around 38 per cent.

 

In terms of profitability, operating profit is expected to grow Y-o-Y by around 9 per cent, while net interest income is projected to grow by 7 per cent. We are targeting a net interest margin of 2.8–2.9 per cent.

 

On the asset quality front, we intend to bring gross non-performing assets (NPA) below 3 per cent and net NPA below 0.35 per cent, with a provision coverage ratio of over 96 per cent. Our credit cost is expected to remain below 0.5 per cent. Moreover, we are targeting total recoveries of ₹16,000 crore for FY26. Our aim is to achieve a return on assets of above 1 per cent and to maintain the slippage ratio below 1 per cent.

 

How are you approaching the micro, small and medium enterprise (MSME) sector in FY26? 

This year, our MSME portfolio witnessed robust Y-o-Y growth of 16.8 per cent, and we are targeting a similar trajectory with expected growth of 17–18 per cent in the current financial year. To support this, we have launched several key initiatives, including a nationwide MSME outreach programme focused on major clusters. This began on February 13 and is now conducted every Monday at our lending centres across the country. The initial outreach led to a 1.5x increase in sanctions in March, the highest for the year, and we plan to continue this drive at scale.

 

We have also introduced a cash flow-based digital lending facility offering loans up to ₹25 lakh, available to both existing and new-to-bank customers, aimed at providing easier and faster access to credit.

 

How is the bank’s automated teller machine (ATM) business going so far? 

Today, most customers prefer to conduct their transactions from the comfort of their homes. We are continuing to maintain our existing ATM infrastructure, but it’s important to note the shift in consumer behaviour.

 

With digital adoption rising, the average daily footfall at ATMs has declined markedly. For instance, in Delhi, the average number of transactions per ATM is currently around 100 per day. Some locations see even fewer, between 50 and 100 hits daily. When you average it out, 100 transactions per day per ATM makes it increasingly difficult to sustain operations purely based on usage.

 

If we compare this with pre-pandemic levels in 2019, the difference is quite stark, especially in metro and semi-urban regions, although I don’t have the exact comparative figures at hand.

 

As for new ATM installations, there has been a clear strategic shift. Over the past year, we have not installed any new ATMs, except in cases where new branches are being opened, in which case, one ATM is typically installed. Outside of that, there has been no fresh ATM rollout across our network.

 

What is the status of the Nirav Modi exposure? 

As far as Nirav Modi is concerned, I believe he has been arrested in Belgium. His extradition is being pursued by the Government of India, and the process is ongoing at their level. However, from the bank’s perspective, his return to India does not directly impact the recovery efforts. We have already undertaken all necessary legal and procedural measures to ensure recovery, irrespective of his physical presence. The bank continues to actively pursue all avenues for recovery in this case, and those efforts remain fully on track.

 

How is PNB working on the ongoing situation with Pakistan? 

Regarding our branches located near the border areas from Rajasthan to Kashmir, especially in zones seeing cross-border tensions, we have issued clear instructions prioritising the safety and well-being of our employees — they must not be exposed to any risk. At the same time, we have directed all branches across the country to remain calm and operational, ensuring no disruption in banking services. Branches have been asked to stay open, maintain sufficient cash availability, and keep ATMs functional and stocked. I want to assure everyone that PNB is fully prepared to handle any such situations, and there is no need for panic regarding banking operations.

 

How will PNB go forward on lending rates? 

Whenever there is a repo rate cut, we ensure that the benefit is immediately passed on to all accounts linked to the repo-linked lending rate. This approach will continue in the future as well — any reduction in the policy rate will be promptly transmitted to our borrowers, including those with housing loans.

 

At present, we are closely monitoring further announcements and policy directions. On the deposit side, we have already made some adjustments. For instance, we recently withdrew our special 7.25 per cent deposit scheme and introduced a new one at 7.1 per cent. Despite the rate revision, the new scheme has performed strongly, attracting ₹8,000 crore in retail term deposits within one month.

 

How is PNB working on behavioural issues among bank employees? 

Customer service is our top priority at the bank, and we are deeply focused on improving it. Customer service is becoming the central theme of our efforts. As part of this, we’ve introduced a quick response-based feedback system for customers to rate the service provided by our employees. After completing a transaction, customers will receive a prompt to provide feedback on the service they received, which is integrated with our head office system for real-time tracking and evaluation.

 

In addition to feedback systems, we are also placing a strong emphasis on soft skill development for our employees. To enhance training, we are incorporating conversational artificial intelligence (AI) into our programmes. This AI conducts half-hour sessions where it poses challenging and sometimes difficult questions. It analyses body language, etiquette, and communication skills, providing an in-depth performance matrix and a ranking system to help employees identify areas of improvement.

 

We are integrating augmented reality and virtual reality into our training modules. These technologies will provide a more immersive and realistic learning experience, helping us pinpoint areas where employees need improvement.