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Global financial meltdown impacts Indian banking industry: PNB chief

BS Reporter  |  Kolkata/ Berhampur 

The global financial meltdown is likely to impact the Indian banking industry, feels KC Chakrabarty, chairman and managing director of Punjab National Bank, the second largest public sector bank in the country.

"When the entire world is in crisis, we cannot expect to be safe", said Chakrabarty.

Chakrabarty was here to inaugurate the 62nd branch of PNB in the state. He also launched the technology based financial inclusion initiative of the bank in Kandhamal, the riot hit district in south Orissa.

“Although there is no direct impact on the Indian banking industry at present, it will certainly be affected in the future if the crisis deepens and continues for long. The gross NPAs (non performing assets) of the banks would increase and some banks might be reluctant for lending”, he added.

However, the PNB chairman clarified that the banks are yet to report any rise in NPAs and there is also no liquidity crunch.

PNB was giving emphasis on arresting slippages, recovery and upgradation of NPA accounts. As a result, the ratio of gross NPAs to gross advances stood at 2.37 per cent, by the end of September 2008, as against 4.57 per cent in September last year, said a senior officer of the bank.

The PSU bank had achieved a total business of Rs 3, 16,747 crore by the end of September this year, thereby registering a growth of 25.96 per cent.

Meanwhile, PNB has launched a pan India campaign for school students to inculcate banking and saving habits in them. During this campaign, school students are being persuaded through special camps and other activities to open savings fund accounts.

“The bank is offering zero balance savings fund account for students of the age of 10 years and above”, Bimal Prasad Sharma, head of PNB’s Orissa circle said in a release. Students above 18 years of age are also eligible for overdraft facility.

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First Published: Thu, November 20 2008. 00:00 IST