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Punjab & Sind Bank.

BSE: 533295 Sector: Financials
NSE: PSB ISIN Code: INE608A01012
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OPEN 18.65
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VOLUME 83830
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Mkt Cap.(Rs cr) 7,477
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OPEN 18.65
CLOSE 18.10
VOLUME 83830
52-Week high 23.79
52-Week low 10.42
P/E
Mkt Cap.(Rs cr) 7,477
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Punjab & Sind Bank. (PSB) - Director Report

Company director report

The Board of Directors have pleasure in presenting the 11th Annual Report ofthe Bank together with the Balance Sheet as on March 2021 and Profit and Loss Account forthe year ended 31st March 2021.

Highlights of Bank's financial performance are given below:

• The total business of the Bank increased by 7.68% reached at Rs.163919.35 croreas on 31.03.2021 from Rs.152231.75 crore as on 31.03.2020.

• CASA deposits increased by 18.90% on Y - o - Y and stood at Rs.31530.39 crore ason 31.03.2021as compared to Rs.26517.30 crore as on 31.03.2020.

• The total deposits of the Bank stood at Rs.96108.18 crore as on 31.03.2021 ascompared to Rs.89667.55 crore as on 31.03.2020. The average cost of deposits of the bankstood at 5.06% (FY 2020-21) as compared to 6.04% (FY 2019-20) in previous year.

• The Bank's Advances registered a growth of 8.39% from Rs.62564.20 crore as on31.03.2020 to Rs.67811.17 crore as on

31.03.2021. The average yield on Advances stood at 7.78% (FY 2020-21) as compared to8.54% (FY 2019-20) during the last year.

• Total Priority Sector Advances increased from Rs. 27872 crore (37.40% of ANBC)as on 31.03.2020 to Rs.28228 Crore (43.95% of ANBC) as on 31.03.2021.

• The Retail Lending portfolio of the Bank grew to Rs.18579 crore as on31.03.2021and registered a growth of 12.25 % over the previous year Rs.16552 crore. Thepercentage of Retail credit (Rs.18579 crore) to Gross Advances (Rs.67811 crore) was 27.39% as on 31.03.2021 compared to 26.45% as on 31.03.2020.

• MSME Credit grew by 7.07% from Rs.10738 crore as on 31.03.2020 to Rs. 11497crore (Including PSLC of Rs. 2130 crore) as on

31.03.2021. The share of MSME Credit to total Advances was 16.95% as on 31.03.2021.

Financial Parameters:

• Operating profit stood at Rs.771.22 crore as on 31.03.2021 against Rs.1096.91crore as on 31.03.2020.

• Net loss stood at Rs.2732.90 crore as on 31.03.2021 as compared to Rs.990.80crore as on 31.03.2020.

• After posting net loss consecutively for eight quarters the Bank registered aNet Profit of Rs. 161 crore for the quarter ended March 2021

• The Return on Assets (ROA) stood at (-) 2.55% (FY 2020-21) as compared to thatat (-) 0.91% (FY 2019-20).

• During the financial year 2020-21 Government of India infused Rs.5500.00 croretowards preferential allotment of Equity shares. Accordingly the bank has allotted3351614868 equity shares of Rs.10/- each fully paid up at an issue price of Rs.16.41(including premium of Rs.6.41 per equity share) Consequently Government of India'sholding in the bank has increased to 97.07% as on 31st March 2021.

• Net Worth of the Bank stood at Rs.5126.25 crore as compared to Rs.2917.44 croreas on 31.03.2020.

• Capital Adequacy Ratio (Basel III) of the Bank is 17.06 % as on 31.03.2021against the minimum stipulated requirement of 10.875%.

• Gross NPAs of the Bank is Rs.9334.00 crore (13.76%) as on 31.03.2021 as comparedto Rs.8874.57 crore (14.18%) as on 31.03.2020

• Net NPAs of the Bank is Rs.2461.95 crore as on 31.03.2021 as compared toRs.4684.15 crore as on 31.03.2020.

• Net NPA percentage improved to 4.04% as on 31.03.2021 from 8.03% as on31.03.2020

• The Board has not recommended any dividend for the year 2020-21.

The Financial performance of the Bank for the year 2020-21 is summarized as below:

(Rs. Crores)
Particulars 2020-21
Net Interest Income 2261.91
Non-Interest Income 902.81
Operating Expenses 2393.50
Operating Profit 771.22
Provisions / Contingencies 3504.12
Net Profit/ Loss (2732.90)
Earnings per share (Rs.) (35.71)
Book Value per share (Rs.) 12.65

Key Financial Ratios for the year 2020-21 are as under:

(Percentage - %]
Particulars 2020-21
Yield on Advances 7.78
Yield on Investments 7.17
Cost of Deposits 5.06
Net Interest Margin 2.11
Cost to Income Ratio 75.63

MANAGEMENT DISCUSSION AND ANALYSIS Global Outlook:

Global growth is gradually recovering from the slowdown but it remains uneven acrosscountries and is supported by ongoing vaccination drives sustained accommodative monetarypolicies and further sizeable fiscal stimulus. World output is projected by theOrganization for Economic Co-operation and Development (OECD) to reach its pre-pandemiclevel by mid-2021 though it will be largely contingent on the pace of vaccinedistribution and its efficacy against emerging variants of the virus.

The International Monetary Fund projected strong economic recovery in 2021 and expectsworld economy to grow by 6% in 2021 and 4.4% in 2022.

Domestic Outlook:

The rebound from the COVID-19 induced slump has been sharper than anticipated. Real GDPgrowth turned positive in Q3 2020-21. RBI projected real GDP growth for 2021-22 at 10.5 %from contraction of 8% (2020-21). Going forward rural demand is likely to remainresilient which is a good prospect for the agriculture sector. Urban demand and demandfor contact-intensive services is also expected to strengthen with the spread ofvaccination.

At present second wave has disrupted the entire system of our country impactinghealth and economic condition of everyone. There are record number of daily cases curfewsand lockdowns in most of the states that poses a risk to the domestic growth outlook. Butfiscal and monetary authorities stand ready to act in a coordinated manner to limit itsspillovers to the economy at large and contain its fallout on the ongoing recovery. RBI onMay 5th 2021 took some steps to support Health sector and initiated some stepsto support MSMEs and Individual borrowers.

Though second wave of COVID-19 has posed a downside risk to economic activity in thefirst quarter of FY 2021-22 yet there are reasons to expect a muted economic impact ascompared to the first wave. Learning to "operate with COVID-19" as borne byinternational experience provides a silver lining of economic resilience amidst thesecond wave.

Banking Sector:

SCBs registered a credit growth of 5.56% and Deposit growth of 11.3% in 2020-21. Creditoff take was minimal due to disruption caused by COVID-19. Our Bank registered a creditgrowth of Rs.5247.00 crore and Deposit growth of Rs.6440.00 crore in 2020-21.

SCBs Bank Credit is expected to be normal this financial year too with the second andexpected third wave of COVID-19. SCBs deposits are expected to grow moderately in 2021-22.

Capital and Reserves:

During the year Bank has raised fresh capital of Rs 5500 crore by issue ofpreferential shares to the Government.

Date of issue No. of shares Price Amount (Crores) Details
25.03.2021 3351614868 16.41 (including premium of 5500 Preferential issue to the
Rs.6.41 per equity share) Govt. of India

Capital Adequacy

• As per Basel III framework the Bank's Capital Adequacy Ratio is 17.06% which ishigher than the regulatory requirement of 10.875%

• Details of Capital Adequacy (BASEL III) are:

(Rs. In Crores)

Particulars

BASEL - III

31.03.2020

31.03.2021

CET 1 CRAR 3806 7.59 6243 12.05%
AT1CRAR 1000 1.99 1000 1.93%
Tier I Capital 4806 9.58 7243 13.98%
Tier II Capital 1592 3.18 1598 3.08%
Total Capital 6398 12.76 8841 17.06%
Risk Weighted Assets 50138 - 51790 -

Business Initiatives:

During the current financial year Bank has implemented various initiatives as toenhance customer convenience and boost

competitive edge of the Bank. The prominent among them are:

• The Project "CBS Upgrade" i.e. upgradation of technology platformfrom Finacle 7 to Finacle 10 which is already in process will be rolled out during FY2022-23. Among others two significant IT enabled solutions i.e. tracking of "RealTime Transaction Monitoring System (RTTS)" and "OMNI CHANNEL" a singleplatform for all digital channels like Internet Banking/Mobile Banking/UPI are in theprocess of implementation and will be activated soon.

• Inhouse developed Application for Public Financial Management System (PFMS)having Integration with PAHAL - Direct Benefit Transfer for LPG (DBTL) Account ValidationService Sukanya Samridhi Yojna Senior Citizens Saving Scheme Pension Provident Fund andNational Small Saving Fund.

• Bank has launched LOS (Loan Originating System) for retail banking products toease the loan process for customers and minimize the turnaround time.

• New Rupay Platinum Debit Card has been launched with Cash withdrawal limit inATMs Rs.40000/- and Transaction limit at POS & ECOM Rs.150000/-.

• Bank rolled out and implemented various COVID - 19 Relief schemes for itscustomers whose operations have been impacted by Covid-19 pandemic.

• Bank extended the benefits of RBI's Regulatory Package for Covid-19 relatedstress by providing moratorium benefit from 01.03.2020 to 31.08.2020 to all eligiblecustomers.

• Creation of War Room for focussed monitoring of NPA/ TWO (Technically WrittenOff) accounts and to curtail fresh slippage and improve recovery.

• Initiating a campaign on the basis of ABC analysis of NPA captioned as startedMission 520 in which each zone including SAMverT has selected majorly focussed 20accounts of their zones for recovery.

• Observing every working Saturday as Recovery Day to make focussed efforts forrecovery in bad assets by organising Recovery Camps Mega Auctions etc.

• Creating a non-discriminatory & non-discretionary liberalized schemecaptioned PSB Krishi Samadhan which deals exclusively with the settlement of NPA and TWOagriculture accounts.

• Conducting Mega E-auctions on Pan-India basis to fast forward the process ofrecovery.

• The Bank adopted a Multi-media strategy to build up its image in public. ThePublicity Budget was centralized to decide proper utilization and effective control. Banklaunched Digital Calendar 2021.

• Bank introduced "PSB KRISHI RAKSHAK RIN" an instant credit forfarming community to meet the emergency requirements for Agriculture and allied activitiesand Household needs for tiding over temporary difficulties arose due to COVID-19 outbreak.

• Bank introduced "PSB SHG TATKAL RIN" to meet emergent needs of SHG(Self Help Group) members in the wake of COVID-19 outbreak.

• Bank introduced a centrally sponsored Scheme "PM Formalization of MicroFood Processing Enterprises Scheme (PM FME Scheme)" for providing financialtechnical and business support for up gradation of existing micro food processingenterprises.

• Bank introduced a central Sector Scheme "PSB Scheme for Animal HusbandryInfrastructure Development (PSB-AHID)" for

incentivizing investments by individual entrepreneurs private companies MSME FarmersProducers Organizations (FPOs) etc.

• Bank introduced a central Sector Scheme "PSB Agriculture InfrastructureFund (PSB-AIF)" to mobilize a medium - long term debt financing facility forinvestment in viable project relating to post-harvest management infrastructure andcommunity farming assets through incentives and financial support.

• In order to bring Agri jewel loan customers to bank and to meet working capitalrequirements of the farmers bank launched "PSB Krishi Swarn Kanti Scheme".

• Bank introduced a new scheme "PSB Scheme for Financing Poultry Farming (PSBPoultry)" for meeting working capital and investment credit requirements of thefarmers who are directly engaged in Poultry Farming.

• A new scheme "PSB Scheme on Financing Piggery Units (PSB Piggery)" waslaunched for meeting working capital and investment credit requirements of the farmers whoare directly engaged in Pig Farming.

• "PSB Scheme on Financing Apiculture/Bee Keeping (PSB Apiculture)" waslaunched for meeting working capital and investment credit requirements of the farmers whoare directly engaged in apiculture (Bee keeping).

• Bank has launched a new Scheme for Financing Solar Projects under PM KUSUM withan objective of increasing farmers' income provide reliable source for irrigation andde-dieselise the farm sector.

• A new scheme "PSB Scheme for Financing Minor Irrigation" was launchedto meet the term loan requirement of the farmers associated with minor irrigationactivities.

• A new MSME Loan product "PSB Professional Assist" was launched forproviding opportunities to professionally qualified persons to set up/ enhance theirpractice/ business or to take up self- employment.

• A new MSME Loan product "PSB GST Ease Loan" was launched for providinghassle free credit to GST registered units to meet their working capital requirement.

• Post outbreak of COVID-19 Bank has introduced the following products forCOVID-19 affected MSME borrowers:

a) PSB Guaranteed Emergency Credit line (PSB -GECL) for business enterprises /MSMEs".

b) PM street vendor's Atma Nirbhar Nidhi (PM SVANidhi)" scheme.

c) PSB Credit Guarantee Scheme for Subordinate Debt (PSB-CGSSD).

• Bank launched special Home Loan and Vehicle Loan products for Government/PSUemployees with attractive features including concession in Rate of Interest (ROI).

• This FY Bank has introduced PSB Digital Learning Portal and has digitizedprocess for Performance Appraisal Management.

• The Bank has also launched PSB Performers' League (PPL) as a motivationalcampaign to create competitive environment amongst branches and to generate more RetailLending business during the campaign period.

• Bank has put in place a comprehensive Credit Risk Management Policy to managethe credit risk effectively. It has introduced a robust system for appraisal of loan /credit proposals a software based internal rating modal internal limits and triggers formonitoring of credit concentration across products and segments. Steps have been taken toimprove underwriting standards and strategy to arrest slippages and credit monitoringmechanisms.

Awards & Achievements

Bank has been awarded with

1. Shine & Succeed Campaign organized for the General Manager of the Banks by PFRDAfor promoting APY (Atal Pension Yojana). The achievement of the Campaign was 101%.

2. Makers of Excellence 4.0 Campaign organized for the Executive Director of the Banksby PFRDA. The achievement of the Campaign was 108%.

3. Leadership Capital 3.0 Campaign organized for MD & CEO of the Banks by PFRDA.The achievement of the Campaign was 105%.

4. 'Best Digital Financial Inclusion Initiatives in 2019 -20' by IBA for in 'Small BankCategory' in March'2021.

5. Kirti Award by GOI Ministry of Home Affairs Department of Official Language ofRegion 'A' under the category of Banks and Financial Institutions for the bestimplementation of the Official Language Policy in the financial year 2019-20.

6. Bank's quarterly Hindi e-magazine "Rajdeep" got the first position in theInter Bank Hindi E-magazine Competition 2019-20. Vision and Strategy of the Bank

Vision - To be a Strong Bank with commitment to excellence and focus on adding value tostakeholders with adherence to best practices and core institutional values sharedthroughout the organization.

During the Financial Year 2020-21 Bank has adopted a Strategy to turnaround the Bankand rebuild confidence among its investors. In the past few years Bank's performance hasremained subdued due to a variety of reasons. Further the FY 2020-21 was dominated by anexternal seminal event i.e. COVID-19 which has affected the global economy and also theBank's performance adversely. The Bank faced inherent issues which plagued the growth ofthe Bank.

In order to turnaround the Bank an appropriate long-term strategy has been drawn toachieve the projected business plan. The

Bank has prepared a business plan and strategy on different business parameters and anaction plan for achieving the same.

Through its strategy Bank has tried to shape all the specific activities undertaken byit to overcome the challenges and has defined

all the logical steps that Bank will take from end to end.

The Turnaround strategy aims at achieving the vision of Bank by taking followingactions:

• Shifting the business focus from Liability to Asset base via addressing assetquality concerns opting cost reduction measures conserving resources improving non -interest income and containing NPA.

• Special Focus on MSME Accelerating Agriculture and Revitalising Retail Credit.

• Leveraging Technology through defined short term and long-term initiatives.

• Better Risk Management through RWA Optimisation resulting in improvement ofCRAR building Capital Lite Model rationalization of existing Risk Management Policiesand Spreading Risk Culture across the organization.

• Organisational restructuring and better Human Resource Management

DIRECTORS' RESPONSIBILITY STATEMENT:

The Directors confirm that in the preparation of the annual accounts for the year endedMarch 31 2021:

a) The applicable accounting standards have been followed along with proper explanationrelating to material departures if any

b) The accounting policies framed in accordance with the guidelines of the Reserve Bankof India were consistently applied. Reasonable and prudent judgments and estimates weremade so as to give a true and fair view of the state of affairs of the Bank at the end ofthe financial year and of the profit and loss of the Bank for the year ended March 312021.

c) Proper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of applicable laws governing banks in India forsafeguarding the assets of the Bank and for preventing and detecting fraud and otherirregularities

d) Annual accounts have been prepared on a going concern basis

e) Internal financial controls system to be followed by the Bank were laid down andthat such internal financial controls are adequate and were operating effectively

f) Proper systems have been devised to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.

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