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Punjab National Bank.

BSE: 532461 Sector: Financials
NSE: PNB ISIN Code: INE160A01022
BSE 00:00 | 04 Jul 30.00 0.55
(1.87%)
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29.50

HIGH

30.10

LOW

29.45

NSE 00:00 | 04 Jul 30.00
(%)
OPEN

29.45

HIGH

30.10

LOW

29.45

OPEN 29.50
PREVIOUS CLOSE 29.45
VOLUME 1178435
52-Week high 47.60
52-Week low 28.05
P/E 9.58
Mkt Cap.(Rs cr) 33,033
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 29.50
CLOSE 29.45
VOLUME 1178435
52-Week high 47.60
52-Week low 28.05
P/E 9.58
Mkt Cap.(Rs cr) 33,033
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Punjab National Bank. (PNB) - Director Report

Company director report

Financial Year (FY) 2021-22 was yet another challenging year for the entire bankingsector but the industry players could sail through it successfully owing to betterpreparedness and conducive business conditions. The economic scenario improved during theyear which provided ample opportunities for credit growth. PNB in line with the economictrend continued to scale greater heights and put up good performance in terms of businessgrowth during FY 2021-22. The Bank continued to emphasize on Retail Credit to enhance thecredit portfolio and with the added strength in terms of manpower and branches PNBexhibited the reinforced performance. During the year the Bank also streamlined thereporting structure of Mid Corporate Centres (MCC) and PNB Loan Points (PLPs) whileloaning power and other guidelines were revised to support quicker decision making.

The Bank also kept the focus on the asset quality throughout the year which resultedinto improved recoveries reined in slippages and lower NPA ratios. In addition to it theBank continued to innovate in order to serve the customers better and expediently.Digitalization remained a buzzword as Bank added to the kitty of products and services andexplored tie- ups with the fintechs to provide the seamless banking to the customers inthe convenient manner. The Bank kept its focus on Human Resource Development by way ofup-skilling them in line with the changing requirements of the industry.

As at the end of 31st March 2022 Bank's Gross Global Business stood at Rs.1931322Crore with Gross Global Advances at Rs. 785104 Crore and Gross Global Deposit atRs.1146218 Crore. Current and Saving Deposits (CASA) was at Rs. 533654 Crore withdomestic CASA share at 47.43 per cent. In addition Bank's Operating Profit was at Rs.20762 Crore with the Net Profit of Rs. 3457 Crore for the FY 2021-22. As at the end of31st March 2022 Gross Non-Performing Assets (GNPA) ratio declined to 11.78per cent and Net NPA ratio declined to 4.80 per cent. While Global Net Interest Margin(NIM) was at 2.71 per cent in FY 2021-22 Capital to Risk Weighted Assets Ratio (CRAR) wascomfortable at 14.50 per cent.

During FY 2021-22 Bank's efforts and achievements were recognized on many prestigiousplatforms. The Bank was adjudged "Best MSME Bank (PSU) in 8th MSMEExcellence Awards by ASSOCHAM". Under EASE PNB was declared Runners-up in twotheme-wise awards i.e. Governance & Outcome centric HR & InstitutionalizingPrudent Banking and Second runner-up in the best improvement category i.e. 42%improvement over baseline. Further the initiatives taken by bank in the area oftechnology was duly appreciated as PNB won "The Asian Banker Financial TechnologyInnovation Award 2021 for "Best Core-banking Technology Implementation.". TheBank was also (adjudged 2nd Best Bank in SHG Credit Linkage under NRLM schemeby Ministry of Rural Development (MoRD)). The Bank secured 1st position amongstpeer banks under Agriculture Infrastructure Fund (AIF) campaign launched by Ministry ofAgriculture and Farmers Welfare. PNB also bagged 3rd Position for itsperformance in implementing the Government scheme PMEGP for the FY 2020-21. The Bank wonDr. Ambedkar Business Excellence Awards under the Category "Most Significant LenderSupporting SC Entrepreneurs".

"Against this backdrop your Directors have pleasure in presenting the AnnualReport of your Bank for the year ended 31st March 2022 (FY 2021-22) along withits audited Annual Financial Statements".

OUR PERFORMANCE

A. Financial Performance Assets and Liabilities

Total Assets of the Bank was at Rs.1314805 Crore as at 31st March 2022. While theNet Advances stood at Rs. 728186 Crore Investment was at Rs. 372168 Crore.

On the Liabilities side Deposits stood at Rs. 1146219 Crore while the Borrowings wasat Rs. 45681 Crore as on 31st March 2022.

Net Interest Income

The Net Interest Income of your Bank stood at Rs. 28694 Crore during FY 2021-22. WhileTotal Interest Income stood at Rs. 74880 Crore Interest Expenses was at Rs. 46185Crore.

Operating Profit

Operating Profit of your Bank during the FY 2021-22 stood at Rs. 20761 Crore. While thetotal Income stood at Rs.87200 Crore during FY 2021-22 total Expenses was Rs.66438Crore in FY 2021-22.

Net Profit

Bank has earned a Net Profit of Rs.3457 Crore in FY 2021-22 vis-a-vis Rs.2022 Crorein FY 2020-21.

Provisions and Conti'ngencies

Total Provisions (other than tax) made during FY 2021-22 were at Rs.16445 Crore withProvision for NPA at Rs.14159 Crore. Provision Coverage Ratio (PCR) including TWO of theBank was at a robust 81.60 per cent as at 31st March 2022 and PCR excluding TWO was at62.24 percent.

B. OPERATIONAL HIGHLIGHTS

Some of the operational highlights of the Bank during FY 202122 are listed below:

Financial

• Bank's Global Business reached the mark of Rs.1931322 Crore in 31st March2022 which was second highest among Public Sector Banks (PSBs).

• CASA Deposits at Rs.533654 Crore also remained second highest amongst PSBswith 47.43 per cent share in Domestic Deposits.

• Savings Deposit grew to Rs. 451680 Crore as on 31st March 2022. Retail TermDeposit was at Rs. 515751 Crore as on 31st March 2022.

• Within Core Retail Credit Portfolio Housing Loan increased to Rs.73805 CroreCar/Vehicle Loan increased to Rs.12615 Crore and Mortgage Loan was at Rs.12232 Crore.MSME loan grew to Rs. 125032 Crore as on 31st March 2022

• Return on Equity improved to 5.96 per cent in FY 2021-22 hence showing theimprovement of 208 bps over FY 2020-21.

• The Board of Directors have recommended a dividend of Rs. 0.64 per equity share(32%) for the year ended 31st March 2022 subject to requisite approvals.

Capital

The capital adequacy of the Bank improved during the financial year on account ofcapital raising by the Bank coupled with improved profitability. During FY 2021-22 Bankhas raised equity of Rs.1800 Crore through QIP Rs.1919 Crore through Tier-II Bonds andRs.3971 Crore through AT-1 Bonds. The Bank continued with its focus on sustainablebusiness growth by targeting better rated borrowers with low risk profile. Going forwardthe Bank is strategically well placed to meet the growing credit needs of the economy.

Key Highlights

• The Capital Adequacy Ratio of the Bank stood at 14.50 per cent as of 31stMarch 2022 with Tier-1 capital at 11.73 per cent and Common Equity Tier-1 (CET-1) at10.56 per cent.

• The Credit Risk Weighted Assets (RWA) of the Bank were optimized to Rs.488969Crore in March 2022 on account of focus on better rated accounts and churning of portfolioof the Bank.

Major Initiatives

a) Learning & Development

The Bank has always kept up-skilling of manpower in the forefront and adoptedinnovative measures. At the same time the Bank has also ensured consistent delivery ofenhanced learning experience. Further Bank remodeled On Job Trainings (OJT) andintroduced workbooks for Management Trainees to facilitate them during OJTs. Bank alsoupgraded Delivery through Online Channel.

b) Promoting inclusivity

Seminars to motivate the workforce were undertaken by the Bank under which Women'sConclave for lady executives in the Bank was organised where Madam Arundhati Bhattacharya(former chairperson SBI) joined in for keynote address. This was aimed at motivatingfemale officers to rise up in the career ladder.

c) Cultural integrati'on

As part of the cultural integration PF numbers of all the employees of PNB 1.0 e-OBCand e-UNI have been harmonized.

Other Key Initiatives

• PNB Pride: For real time monitoring and record account visits details Mobileapplication-PNB Pride has been developed for field functionaries. User can enter visitdetails like name of contact persons status of the unit uploading photo report by thevisiting officials recovery details promise date etc.

• Mtouch app: A Digital Mobile Application PNB Mtouch cum Web Portal has beendeveloped to capture the records of all field visits made by the Branch Officials forrecovery of overdue amount.

• PNB FASTag: An app was launched in November 2021 for Apple and Android devicesto facilitate application for tags recharge and viewing transaction history on mobiledevices.

• Opening of Online & Instant Savings Account with Video KYC: The Banklaunched Instant Customer On-Boarding Platform through Video KYC to facilitate thecustomers for opening account with KYC-verification on-line and to attract techno-savvynew-age customers.

• Submission of life certificate for central/state govt. Pensioners through VideoBased Customer Identification Process (V-CIP): To enable the pensioners to submit LifeCertificate at their convenience and comfort the Bank launched an online web-basedplatform for Central/State Govt. Pensioners for submission of Life Certificate onlineusing Video based Customer Identification Process on 30th December 2021.

• Setting up 5 CASA Back Offices for opening of CASA accounts centrally: In orderto address KYC compliance and to achieve better customer service Bank has setup 5 CASABack Offices for opening of CASA accounts centrally. It was operationalised in September2021. These CASA Back Offices are located at Kolkata Mumbai Panchkula Bhubaneswar andFaridabad.

• PNB Virtual Debit Cards: Virtual Debit cards were launched by the Bank therebyeliminating the need for carrying the physical Debit cards.

• PNB 360 portal: Bank has launched PNB-360 Portal which is a Dashboard availablefor All Bank employee at their on Premise desktop and at Tab with auto-refresh one stopsolution for Management and field functionaries.

• Trade Finance Portal: The Bank has launched 2nd phase of TradeFinance Portal to allow import customers to scan and send documents directly to Bankcovering Import documents Foreign Letter of Credit and Foreign Letter of guarantee.

• ASBA Service in PNB ONE: ASBA services has been introduced in MBS (PNB ONE). Itis popularly hassle free and user friendly approach for IPO application in few clicks inless than a minute. Now ASBA services can be availed through Branches Internet BankingUPI and Mobile Banking i.e. PNB ONE.

C. ASSET QUALITY

Despite disruptions in economy due to 2nd and 3rd wave ofCovid-19 pandemic Bank was able to reduce Gross NPA from the level of Rs.104423 Croreas on 31st March 2021 to Rs.92448 Crore as on 31st March 2022. Focus on asset qualitycontinues to be one of the top priorities for the Bank. Provision Coverage Ratio (PCR)including TWO continued at satisfactory level of 81.60 per cent as on 31st March 2022.

• Cash Recoveries: Total Cash Recovery improved to Rs.15788 Crore for FY 2021-22from Rs.11442 Crore in FY 2020-21.

• Upgradation: Upgradation for FY 2021-22 improved to Rs. 5253 Crore from Rs.2363 Crore in FY 2020-21.

• Upgradation through Resoluti'on Mechanism: The Resolution Cell was created toexclusively deal with Restructuring/Resolution of NPA accounts and recovery in NationalCompany Law Tribunal (NCLT) cases. The details regarding the same is as under:

Restructured Accounts

(Amount Rs. in Crore)

Total Sanctioned

No. of A/c's Amount
FY 2021-22 06 347

Further a sum of Rs. 2703 crore was recovered in NPA accounts under IBC in NCLT.

• Mega E-aucti'ons: During FY 2021-22 23771 properties were uploaded on e-Bikrayportal. Out of which 1319

Immovable Properties (IPs) were auctioned successfully with success rate of 5.54 percent.

• Sale of Assets to Asset Reconstruction Company (ARC): Details of financialassets sold to Securitization/ Reconstruction Company (SC/RC) for Asset Reconstruction isas under:

(Amout Rs. in Crore)
Items FY 2021-22
i. No. of Accounts sold to ARCs 4
ii. Book Outstanding of Accounts Sold 2421
iii. Aggregate consideration received (100 per cent cash) 1058

• Initiatives taken to Improve Asset Quality during FY 2021-22

• In order to support recovery efforts of field functionaries a common recoveryportal i.e. SASTRA Portal was rolled out during the year. The portal is having 5 differentmodules like One Time Settlement (OTS) Securitization and Reconstruction of FinancialAssets and Enforcement of Security Interest (SARFAESI) Debts Recovery Tribunals (DRT)National Company Law Tribunal (NCLT) & Wilful Default. Through this common recoveryportal status of major recovery actions of a Borrower can be ascertained at a singleplace. OTS Module provides an automated platform for online processing of settlementproposals.

• For effective monitoring standalone DRT and SARFAESI Portals have beenre-configured as separate modules in the SASTRA Portal.

• All the NCLT cases are being monitored through NCLT Module which captures thelatest status of each case. Wilful defaulter database of the Bank has been loaded througha separate module.

• Further for effective monitoring and follow-up of NPA Accounts PNB Pride Appwas also rolled out in all the SASTRA Centres and Branches. This Geo Tagging enabled Apprecords field functionaries visit details and captures visit location.

• Further Bank has initiated steps for development of a new comprehensive.Application Software for Digitalization & Automation of Bank's Recovery &Litigation functions is being developed which will provide End-to-end processing of allmajor recovery actions in NPA Accounts.

• Exclusive Vertical for recovery of NPA Accounts: As part of the Organizationalrestructuring a separate vertical called SASTRA Vertical has been created for exclusive& focused recovery operations. The vertical operates with officers posted at differentlevels in the field who are exclusively working for recovery.

• Special OTS Scheme: During the year Bank has put more focus on accounts withoutstanding up to Rs. 5.00 Crore which constitutes the largest segment of the NPAPortfolio. For more recovery the Bank has launched special OTS Scheme for this segment.The scheme is of Check box model-non-discriminatory and non-discretionary. More powershave been delegated at the field level for speedy & transparent one-time settlement inthis segment. During FY 2021-22 164969 NPA accounts with outstanding of Rs. 3016 Crorewere resolved under the said scheme. Suitable amendments were done to resolve accountsunder Agriculture and MUDRA NPA Accounts.

D. INFORMATION TECHNOLOGY (IT) AND DIGITALIZATION

Technology continues to drive the Banking sector and with the advent of Fintech on thebanking landscape it has become all the more critical to adopt and imbibe technology inthe Bank's day to day operations effectively to remain competitive and grow. In thisregards the Bank during FY' 2021-22 took up various initiatives which are enumerated asunder:

• Implementati'on of Bharat Bill Payment System (BBPS) in IBS/MBS- Through BBPSoption in PNBOne now customer can make payments towards variety of utility serviceproviders/billers under different categories like-Mobile Landline DTH electricity gaseducation fees etc. In addition to Bill Payment there are several other options such as:

• Repeat your last 10 bill payment.

• Enroll for Standing Instruction

• Enable Notification button to receive monthly/ quarterly or yearly notificationof bill payment to never miss it

• Positive Pay in IBS: An electronic authentication system will allow customers toshare the cheque details with bank before the bank processes it. With Positive Pay Systemevery account holder now can enter details of cheque (date amount etc.) issued by himthrough PNB ONE for secondary authentication.

• Online reset of IBS Password of NRI without Debit card:

Internet Banking users having active debit card can online reset the password(s).

• Opening of Demat A/c via PNB ONE: Through this feature Demat Account can beopened instantly by submitting the required customer related information.

• Delivery of Debit card at customer address: In order to reduce the footfall inbranches and to facilitate the customers to get the Debit Card delivery at theirregistered address customers have been facilitated to activate the Debit Card deliveredat their registered address through setting Debit Card PIN without the need to visit thebranch. All other transactions shall be allowed after successful PIN set transaction.

• Internet Banking Services (IBS) facility for visually impaired: The visuallyimpaired customers by using screen reading software like JAWS (Job Access With Speech)which facilitates Text to Speech can avail internet banking services.

• Voice assistant in PNB ONE: Voice Assist enabled through PNB One provides avoice driven feature for the following functionalities:

• Mini Statement

• Last transaction inquiry

• Balance Inquiry

• Cheque book request

• Debit card issuance through IVR

• Acceptance of RuPay card in Singapore: Domestic RuPay Debit Cards accepted atall Network for Electronic Transfers (NETS) enabled POS terminals in Singapore.

• Virtual Debit card through PNB ONE: Bank has launched Virtual Debit Card whichcan be used for e-Comm transactions at all merchant sites through Second factorauthentication (OTP).

• E-Mandate on Debit cards: Bank has tied up with NPCI to provide e-mandatefacility for Recurring payments on RuPay Debit Cards.

• PNB Personal Advisor (PA): In order to provide ease of access to the customerand non-customers for various applications and services offered by the Bank an umbrellaapplication namely PNB Personal Advisor (PNB PA) was launched. Phase-I made LIVE by 1stNovember 2021 and has been downloaded by more than 18000 users.

• Captcha for login into Retail & Corporate: In order to enhance security inRetail and Corporate Internet Banking Bank introduced strong CAPTCHA at the time of login.

Implementation of e-FRM in MBS & IBS: In order to check fraudulenttransactions the e-FRM has been implemented in Mobile Banking and Internet BankingSolution.

Specific category UPI enhancement: Transaction value limit in UPI hasbeen enhanced from Rs. 2 Lakh to Rs. 5 Lakh for use-cases qualifying under the followingbusiness:

• Category Identifier

• Initial Public Offering (IPO) Purpose Code 01 MCC- 6211

• G Sec through RBI Retail Direct Scheme

• (RDS) Purpose Code 25 MCC- 6211

Transacti'on Alerts on E-mail: The customers have now been givenoption to get the transaction alerts on e-Mail.

SIM Binding: To enhance the security feature SIM Binding is implementedin PNB ONE App. With the SIM binding feature PNB ONE will be activated only on the devicewhich have the SIM Card of Registered Mobile Number (RMN).

Other initi'ati'ves

a) Empanelment of vendors for Development/Customization/ Maintenance/ Testing/Supportof software solutions upto Rs. 35 Lakh. Development of four products/ solutions (PNB PALIC Generic Module C-KYC PFMS) are done using said empanelled vendors.

b) Online savings Account with Video KYC In terms of RBI guidelines Online Accountopening with Video KYC functionality was implemented to provide remote customer onboarding. It was made live on 12th April 2021.

c) Pre-approved Personal Loan: Implementation of Digital customer Journey forPre-Approved Personal Loans to existing customers of the Bank. It has been made live on 12thApril 2021.

d) Digital e-Mudra (Shishu) loans: Implementation of Digital Customer Journeyfor online Shishu MUDRA loans. It was made live on 19th August 2021. Furtherimplementation of Digital customer Journey for online Tarun and Kishor Mudra loans isunderway.

e) CKYC Mobile Applicati'on for Scanning KYC Documents of old Accounts. Theproject has been live since 24th November 2021.

f) Life Certificate Facility to pensioners through Video KYC:

The project was made live on 30th December 2021.

g) Tie-up with Paisa bazaar: The Bank entered into Partnership with loanmarketplaces for sourcing of leads (Housing Loans).

h) Indian Bank's Block Chain Infrastructure Company (IBBIC):

The Bank has joined IBBIC as one of its founding members. IBBIC will explore bankingrelated use cases with Blockchain technology. IBBIC and its members have decided to startuse of Blockchain for Domestic Letter of Credit (LC).

E. MANAGEMENT INFORMATION SYSTEM

The Bank believes in harnessing the power of both big data and small data not only todrive decision-making and operational excellence but also to provide personalizedexperiences to increase customer delight.

Enterprise-Wide Data Warehouse (EDW)

Data is the new cynosure of any form of organization and Banking is no exception to it.Data when stored arranged structured and mined it provides Information; which in turngenerates persistent Knowledge resulting in wisdom as final product. PNB has made itsEnterprise-wide Data Warehouse (EDW) live as Single Source of Truth for operationalmanagement information system decision support system informative and analytics of Banksdata for Descriptive Diagnostic Predictive and Prescriptive manner to achieve thetargeted growth in Business. EDW is now one stop information source for regulatory ADF/CIMS project.

Data Analytics

The Bank has set up a Data Analytics Centre of Excellence (CoE). Analytics is beingconducted on broadly three verticals- Business Control and Support with objective of newvalue- creation cross-sell and up-sell opportunity increasing revenue cost reductionproduct enhancement channel optimization default loan prediction maximizing digitalfootprint and improve risk profiling of the customer base.

Next Level Reforms: With EDW in place Bank is well prepared to achieve the ActionPoints under next level reforms in PSBs for short Term and Long Term Target like digitalenhancement Big Data Analytics adoption of change in Banking Technology focused use ofFin techs and improvement in Employee engagement through Analytics.

To align with the present and future strategic business requirements of PNB to gaincompetitive edge and to cater to the needs of creating advanced digital capabilities forBank Model based business leads are being generated on various personal segment. Team isalso geared up for analytics-based credit and non-credit offers. Process and systemicoptimization through promotion of Digitization driven by analytics is another avenue beingpursued by analytics team.

F. BRANCH NETWORK

Domestic Presence: The Bank has one of the largest networks of 10098 branches as on31st March 2022 comprising of 1753 Metropolitan 2035 Urban 2457 Semi Urban and 3853Rural branches. Rural and Semi Urban Branches (RUSU) comprise around 63 per cent of theTotal Branch Network.

International Presence: At present Bank has its overseas presence in 7 Countries by wayof 3 branches (1 at Hong Kong (about to be closed) 1 at Dubai and 1 at GIFT CityGujarat) 2 Subsidiaries (London and Bhutan) 1 Joint Venture (Nepal) 2 RepresentativeOffices (Myanmar and Bangladesh).

G. INTERNATIONAL BANKING

As on 31st March 2022 there were 232 branches authorized to handle Foreign ExchangeBusiness and 4 Trade Finance Centers functioning at New Delhi Chennai Kolkata &Mumbai specialized for centralized handling of trade transactions and InternationalService Branch for all inward remittances. In addition to it the Bank has 6 ExchangeBureaus at important tourist centers to facilitate encashment of Foreign Exchange CurrencyNotes by foreign tourists/NRIs.

• Domestic Forex Business

The Bank has registered a Foreign Exchange Business Turnover of Rs.124172 Crore(Exports and Imports together) for the FY 2021-22 registering the growth of 37 per cent.

The Bank has an International Service Branch (ISB) functioning at New Delhi forhandling Inward Remittances. During FY 2021-22 the Bank has handled remittance businessof Rs. 51191 Crore.

The Bank has Rupee Drawing Arrangements (RDA) with 16 exchange Houses (10 in the Gulf1 in Singapore 2 in the USA 1 each in UK Canada and Seychelles) to facilitateremittance from NRIs.

The Bank also has remittance arrangement under Money Transfer Service Scheme (MTSS)with Transfast Worldwide.

• Overseas Business

Overseas business of the Bank stood at Rs.47060 Crore as on 31st March2022 registering YoY growth of 8.77 per cent. Overseas branches are focusing on HighQuality Medium/Long term Assets to build a diversified loan portfolio with low Credit RiskWeight to improve profitability.

Steps Initiated for Forex Business growth

• 55 Export Promotion Councils (EPCs) have been visited on Pan India basis duringthe FY 2021-22. Further all the Zonal Offices were advised to continue liasioning withExport Promotion Councils (EPCs) for sourcing new relationships.

• 105 Exporter/Importer meets were conducted on Pan India basis to address theirgrievances in respect of Forex business during FY 2021-22.

• The Bank generated 185 new leads of forex customers during FY 2021-22. Further149 relationships have been converted into business.

Trade Finance Platforms for Exporters/Importer:

Subsequent to launch of Export module recently the Bank launched 2nd phaseof Trade Finance Portal covering Import documents Foreign Letter of Credit and ForeignLetter of guarantee to allow import customers to initiate transactions.

Outward remittance facility for Resident Individuals through Net-Banking:

The Bank launched Outward Remittance Facility for resident individuals for remittingfunds under LRS through Internet Banking. This gives ease to retail customers forremitting for the purpose of Gift Donation Travel (Business Pilgrimage MedicalTreatment Education and Maintenance of close relatives).

• A facility for sending direct intimation to customers in respect of Inwardremittance has been introduced.

• International Service Branch (ISB) has started sending mails directly tocustomers with respect to their inward remittances which reduces the TAT.

• Dedicated customer care desks are made available at all TFCs to help tradefinance customers. The contact details are also placed on PNB Corporate website.

• A dedicated email ID eximcust@pnb.co.in has been created exclusively fortrade finance customers for their forex related operational issues.

International Banking Unit (IBU) GIFT City Gandhinagar Gujarat has beenoperationalised w.e.f. 8*h April 2022. It will offer services like an overseasbranch of the bank under regulator International Financial Services Centres Authority(IFSCA). The major products offered will be ECB Buyers credit to Indian borrowers andTerm Loan Working Capital Trade Finance and FLC/FLG to overseas entities. Branch willtrade in Foreign currencies in overseas market raise funds in foreign currency asdeposits and borrowings from non-resident sources and provide loan and liability productsfor the clients.

H. BUSINESS DIVERSIFICATION

Insurance Business

• Life Insurance: Bank has tie-up with the following Insurance companies (FY2021-22) Life Insurance Corporation of India (LIC) PNB MetLife India Insurance Co. Ltd(PMLI) and Canara HSBC Oriental Bank of Commerce Life Insurance Co. Ltd (CHOICe).Presently Bank is continuing tie-up with only two companies:

1. PNB Metlife India Insurance Co. Ltd (PMLI)

2. Life Insurance Corporation of India (LIC)

The Bank's earnings from Life Insurance business grew by 6.45 % during FY 2021-22 toRs. 294 Crore from Rs. 276 Crore during FY 2021-22.

• Non-Life Insurance: The Bank has tie-up with the following Insurance companies:

1. The Oriental Insurance Co. Ltd. (OICL)

2. Bajaj Allianz General Insurance Co. Ltd. (BAGIC)

3. Cholamandalam MS General Insurance Co. Ltd. (CHOLA)

4. Care Health Insurance Co. Ltd. (CHICL)

5. Star Health & Allied Insurance Co. Ltd. (SHICL)

The Bank's Commission Income stood at Rs. 101 Crore during FY 2020-21 (HealthInsurance- Rs. 66 Crore & Asset Insurance- Rs. 35 Crore) against Rs. 93 Crore in FY2020-21 (which included Income of around Rs. 4.41 Crore pertaining to Crop Insurance andthe same is not included in FY 2020-21). During the FY 2020-21 the Bank registered a YoYgrowth of 14.1 per cent in income (excluding Crop Insurance). The following new segmentspecific products were launched during FY'2020-21:

a. Women Specific health insurance products covering critical illness (specificallyrelated to women).

b. Personal Accidental Insurance cover for customers falling in Lower income group.

• Mutual Funds: Bank is distributing and marketing Mutual Fund products of thefollowing Asset Management Companies:

1. M/s Sundaram Asset Management Pvt. Ltd (previously known as Principal AssetManagement Pvt Ltd).

2. M/s Nippon Life Asset Management Ltd.

3. M/s UTI Asset Management Company Ltd.

4. M/s Aditya Birla Sunlife Asset Management Company Ltd.

5. M/s LIC Mutual Fund Asset Management Ltd.

6. M/s DSP Investment Managers Pvt. Ltd.

7. M/s Franklin Templeton Asset Management (India) Pvt Ltd.

8. FISDOM is also providing MF Aggregator and Robo- Advisory services to existing eOBCcustomers on revenue sharing basis.

During FY 2021-22 Income of Rs. 5.72 crore was earned against the target of Rs. 7.00crore and YoY growth was 50.13 per cent.

• Depository Services: As a Depository Participant Bank opened 11627 DematAccounts during FY 2021-22 against 5539 in FY 2020-21 and 12016 Online Trading Accountsin FY' 2021-22 against 7514 in FY 2020-21. Out of 11627 Demat Accounts around 9022i.e. 78 per cent of Demat accounts was opened digitally through Insta Demat available onIBS and MBS. Income earned in FY 2021-22 from Depository services was Rs. 5.70 Crore

• ASBA & Merchant Banking: Bank has license to act as Banker to issuedebenture trustee and merchant Banker. During FY 2021-22 217 issues were handled. Theamount blocked through ASBA was Rs. 5442 Crore and Income of Rs. 0.45 Crore was earnedduring FY 2021-22.

New Initiatives

a. Life Insurance & Non-Life Insurance Business: In order to reach out to Bank'scustomers using the Bank's digital channels like Corporate website Net Banking &Mobile Banking App to conduct their banking activities the Bank introduced facility ofsoliciting its insurance products through Insurance Self-Networking Platform (ISNP) onBank's Website/IBS/MBS w.e.f. 27th April 2021.

b. Depository & ASBA Business: e-DIS services is proposed to be introduced for ourtrading customers to eliminate the POA (Power of Attorney) submission to trading membersfor performing share trading. With the introduction of e-DIS services customers can startshare trading instantly after opening of trading account with the channel partners.

ASBA services has been introduced in MBS (PNB ONE). It is hassle free and user friendlyapproach for IPO application in just few clicks. Now ASBA services can be availed throughBranches Internet Banking UPI and Mobile Banking i.e. PNB ONE.

c. Lead Management System: Introduction of two new channels for lodging customerrequest through lead management system of CRM has been made effective from March 2022through which customers can express their interest in Bank Products. Bank has also addedtwo new number for lodging Asset & Digital products by missed call.

d. Customer Acquisition Centres (CAC) and Government Business Vertical Centres (GBV):In the new revamped structure of PNB 57 Customer Acquisition Centres (CACs) at majorlocations & 21 Government Business Vertical Centres (GBVs) at State Capitals acrossIndia became operational since July 2020.

The main objective of these above mentioned set up is to give focused approach togenerate bulk business through strategic tie ups with existing/new Corporate/Institutional/ Govt./Defence & PSU clients by exploring cross sell/up sell bouquet ofvarious Bank products Third Party Products (TPP). In addition this structure also focuson deepening relationship with HNI/NRI clients by exploring up sell/cross sellopportunities.

e. Defence Business: Defence Business Cell was conceived as a distinct vertical underCustomer Acquisition Division with the sole purpose of functioning as a forearm of PNB'sbanking business with Indian Armed forces State police forces Paramilitary. PNB willsign MOU with Indian Airforce and Assam Rifles. Existing MOUs with Indian Army NavyCoastguard will have added and unique features under the flagship produc such as RakshakPlus scheme.

I. GOVERNMENT BUSINESS

With a view to play a more proactive role in the transfer of funds from Centre andStates to various beneficiaries Bank has been making efforts to have a sizeable number ofPublic Financial Management System (PFMS) agency accounts. Bank is also accredited bankerto nine different Central government departments post amalgamation. Bank has beenincreasing tie-ups with various State governments to cater to their specific needs.

New Initiatives

• Fastag: National Electronic Toll Collection Project has been implemented and allbranches have been enabled for issuance of Fastags.

National Pension System (NPS): Four Regional Rural Banks sponsored by theBank have been on-boarded for NPS remittance.

Govt. e-Market Place (GeM): Bank is first amongst nationalized banks tobe present on GeM portal for providing services to vendors i.e. sellers and purchases.These services include GeM pool account e-PBG (Performance Bank Guarantee) & e-EMD(Earnest Money Deposit).

Public Financial Management System (PFMS): Bank has timely disbursedfunds of approximately Rs. 4080 Crore to about 68 lakh beneficiaries under PM Kisan SammanNidhi.

• Integration with Cochin Port Trust through Payment gateway has been carried out.

• The account of Rural Electrification Corporation Ltd. has been sourced for thegovernment scheme SAHYOG and PFMS integration has been implemented.

• The government account for Deen Dayal Upadhyaya Grameen Jyoti Yojana has beensourced.

• Through active marketing 139544 PPF 76357 Sukanya Samridhi accounts and61031 Senior Citizen Saving accounts were opened during the FY 2021-22.

• Ten Series of Sovereign Gold Bond subscription launched by Govt. of India weremarketed by branches and 1229 Kilograms were sold.

• The Bank is disbursing pension of approximately 10.7 lakh pensioners i.e.Central Govt. Defence Railways Telecom and state Government.

• The Bank is having integration with various states and we are collecting onlineand offline taxes through their Cyber Treasury Portal and collection of VAT is done in 21States.

• Collection of taxes (Direct & Indirect) is being done through offline andonline mode on PAN India Basis. We are one of the major collectors of taxes for Central& State Government

J. TREASURY OPERATIONS

Gross Domestic Investments stood at Rs.375006 Crore as on 31st March 2022 whileaverage investments were at Rs.381098 Crore in as on 31st March 2022. Interest incomefrom the investment portfolio (Domestic) stood at Rs. 23399 crore for FY 2021-22.

The Bank actively traded in SLR and Non-SLR securities throughout the financial year.Total trading profit (domestic) for FY 2021-22 is Rs. 3150 Crore.

The liquidity remained comfortable throughout the year in the banking system due tolack of desirable credit off-take despite the fact that Cash Reserve Ratio (CRR) wasrestored to pre-pandemic level of 4 per cent. Liquidity surplus in the banking systemreached record levels in September with average liquidity of around Rs. 6.5 lakh crore dueto increase in Government spending and absence of additional borrowing for GSTcompensation. RBI continued to provide liquidity support through OMOs and G-SAP 2.0operations in order to ensure orderly execution of the Government borrowing plan.

RBI announced various liquidity support measures during the year such as:

• On Tap Special Long-Term Repo Operations (SLTRO) for Small Finance Banks (SFBs)was extended till 31st December 2021.

• The TLTRO on Tap Scheme was extended by a period of six months i.e. till 30thSeptember 2021 and further till 31st December 2021.

• RBI extended fresh support of Rs 50000 Crore to the AIFIs for new lending inFY' 2021-22.

• The MSF relaxation continued up to 31st December 2021 and was restored to thenormal dispensation whereby banks will be able to dip up to 2% of NDTL for overnightborrowing under the MSF from 1st January 2022.

• RBI to conduct fortnightly Variable Rate Reverse Repo (VRRR) auctions as well asauctions for longer duration maturities however the 14-day VRRR auction would be the mainliquidity management operation and shall coincide with the CRR maintenance cycle.

RBI reitereted its stance to remain accommodative as long as necessary to revive andsustain growth on a durable basis. RBI commenced normalizing liquidity conditions bydiscontinuing its G-SAP operations and resuming its long term VRRR from 4th quarteronwards and gradually started draining out excess liquidity from the system. RBI'scurrency swap further drained durable rupee liquidity from the system. The recent CRR hikeof 50 bps will drain a further Rs. 87000 Crore of liquidity.

• Fixed Income (SLR/NSLR)

Reserve Bank of India (RBI) tried to balance its objective of sustaining growth withprice stability and that of managing the Central and State Governments' massive borrowingsamid multiple waves of the pandemic and uncertain global macro environment. The Indianbond market was well supported by RBI through both conventional and unconventionalmeasures including differentiated auction methodology GSAP 1.0 and GSAP 2.0 program.However during second half of the Financial Year yields inched up significantly due toexpectations of rate hikes by central banks in all major developed economies of the worldon account of high inflation expectations due to surging commodity prices and the Indianbond market yields were no exception.

During FY 2021-22 the 10 year benchmark G Sec yields rose to 6.95 per cent after theannouncement of budgeted market borrowing of Rs.14.95 Lakh Crore. However as per therevised borrowing calendar gross market borrowing was pegged at Rs.14.31 Lakh Crore. As aresult the Central Government's borrowing programme for FY 2021-22 came to an end on 25thFebruary 2022 and the total auctions were much lower than expected due to cancellations ofscheduled auctions for the month of March 2022. This cooled off the yields temporarilybut in the recently conducted unscheduled MPC meeting (May 2022) RBI raised the benchmarkrepo rate by 40 bps due to concerns regarding domestic inflation along with a 50 bps CRRhike to drain out excess liquidity. This resulted in benchmark yields touching a high 7.49per cent and it continues to be at elevated levels. The short term yield also spikedconsiderably with 1 year T Bill reaching a high 5.95 per cent on expectations of furtherhikes in the forthcoming MPC Meetings.

Since the advent of COVID-19 pandemic the government's borrowing has almost doubledbut the pool of domestic investors has not kept pace with the same and still much needs tobe done before domestic sovereign bonds are listed on global indices. Hence thechallenges for the smooth conduct of massive borrowings for the third consecutive year aregalore. The same is further intensified by the gloomy outlook on yields aggravated byreversal of accommodative stance by central banks across the globe. Russian invasion ofUkraine and other expected geo-political tensions including COVID-19 lockdowns in manyparts of the world including China are further expected to make things difficult for thebond markets. The near-term outlook on India's external sector has also worsenedconsiderably. Bond yields have hardened across the maturities as geo-political factorshave clouded the outlook on inflation further compounding the challenges for the smoothconduct of the massive borrowing planned by the Centre and the States for FY 2022-23.

• Equity & Mutual Funds

Indian equity markets have seen one of the steepest rallies from the lows of thepandemic in the last Financial Year however the current financial year has been marred byrate hikes in developed markets inflationary pressures supply bottlenecks commodityshortages and geo political tensions. As a result foreign investors have been net sellersof Indian equities for the entire year but domestic retail and institutional investorshave been more or less resilient to selling pressures. However in the next fiscal yearequity markets are expected to be more or less muted in absence of any fresh positivetriggers. Also uncertainties regarding COVID-19 further flare up of tensions betweennations and steep rise in inflation are expected to keep the markets on the offered sideonly.

Forex

Net forex income of the Bank for FY 2021-22 was Rs.1866 Crore. The Indian Rupeeremained largely stable throughout the year and traded in a broad range of USD/INR 74-76.However it experienced a knee jerk depreciation during 7*h March 2022 pushingit to USD/INR 77.01 on account of abnormal rise in crude oil prices due to geo-politicaltensions. However RBI continued to be active in markets to smoothen out the volatility.It finally closed at USD/INR 75.92 on 31st March 2022.

K. CUSTOMER CARE

The Bank fully realizes the importance of customer service and continues to lay utmostpriority to render prompt and efficient service to customers. In order to achieve thedesired objective the Bank has formulated a robust Grievance Redressal Policy keeping inview the guidelines issued by Reserve Bank of India on Customer Service. The Bank isensuring the redressal of the grievances of customers within the framework laid down inthe said policy.

Initiatives undertaken during the year for improvement in customer service

• The Bank has an On-line Grievance Redressal Management Portal called CentralizedGrievance Redressal Management System (CGRMS) which is in-house Portal. Through thissystem the customer gets an immediate acknowledgement and can keep a track of thecomplaint also. Customers can lodge their requests/complaints in the CGRMS through Bank'swebsite Internet Banking Service Mobile Banking Service and Mobile App.

• The Bank has state-of-the-art Primary Contact Centers at Gurugram and Noida toprovide tele-banking services to its customers on 24x7x365 basis through two leadingService Providers. In addition to these two Primary Sites the Bank has also establishedtwo Secondary Contact Centers at Dehradun and Bhopal to provide tele-banking services toits customers in 13 languages (During the FY 2021-22 2 languages were incorporated overIVR in addition to existing 11 languages).

• Further the number of self-services extended to 14 by Contact Centre throughIVR during FY 2021-22 thereby making them more customer friendly.

• The Bank has constituted teams of officials at Customer Care Centre at HeadOffice Zonal Offices and Circle Offices to pay incognito visit to branches to assessstandard of service. During FY 2021-22 officials of the Bank made 14576 incognito visitsto branches pan India. Deficiencies pointed out by the visiting officials are being sharedwith the concerned branches/Circle Offices for taking corrective steps.

• The status of complaints received by the Bank is reviewed by "CustomerService Committee of the Board" a SubCommittee of the Board on quarterly basis. Themeetings of the Committee are presided over by Managing Director & CEO.

• The Bank has in place an Internal Ombudsman as per the recommendations of theDamodaran Committee. The system ensures greater transparency in the redressal ofgrievances by the Bank.

• Customer Service Committees in all the branches and Circle Offices look into thequality of customer service rendered and critically examine the feedback/suggestions forimprovement in customer service. These committees meet once in a month where staff and theinvited customers interact freely on service-related issues.

• A monthly magazine "Customer Speaks" is published in whichselected complaints filed by customers and the action taken/resolution provided to thecomplainants are also mentioned. Appreciation letters issued by customers appreciating theservice of officials of the bank are also published in the magazine. Bank's guidelines onimportant issues pertaining to customer service products and services are highlighted inthe magazine for the benefit of field staff.

• Theme Based Meetings are being conducted at monthly intervals in all branches ona pre-decided date and theme to improve awareness among field staff about bank's productsand services and to sensitize them about the issues of maximum importance.

• Door Step banking services is available in the Bank. It is a facility by whichcustomers can avail many of the financial/non-financial banking services at home throughthe Vendors at 100 centers. It provides convenience to the customers to access differenttype of banking services from their Door Step.

• For faster resolution of complaints Bank has designated Chief Customer ExecutiveOfficer (CCEO) with the rank of Dy. Zonal Manager/Dy. Circle Head at all ZOs/COs levelwhom a customer can approach for redressal of his grievance. The contact details of CCEOshave also been displayed at Bank's website.

• Selected complaints along with their solutions are displayed through Today'sMantra- 'SAMASYA & SAMADHAAN' on regular basis so that field functionaries canprovide quick/ on the spot resolution to customers on complaints of the similar nature.

• Regular training sessions are arranged at Call Centre for CSAs so that they canhandle customers call properly & resolve their trivial issues by giving correct/latestinformation that customer wants about the products/ services.

• Creatives have been published at Social Media (Facebook &Twitter) on regularbasis to educate customer about Banks service such as Balance enquiry on Missed Call andnot to share their credentials over fraudulent calls and for registering nomination indeposit account.

• During FY 2021-22 out of a total number of 146759 complaints (i.e. 7175complaints outstanding as on 31st March 2021 and 139584 complaints receivedduring FY 2021-22) 145852 complaints were resolved up to the satisfaction of thecomplainant till 31st March 2022 in CGRMS Portal.

• Further during FY 2021-22 out of a total number of 1680065 complaints (i.e.81389 complaints outstanding as on 31st March 2021 and 1598676 complaintsreceived during FY 2021-22) 1650370 complaints were resolved up to the satisfaction ofthe complainant till 31st March 2022 in CRM Portal.

L. IMPLEMENTATION OF OFFICIAL LANGUAGE

Punjab National Bank has always been a pioneer in the implementation of the OfficialLanguage Hindi. During the Financial Year 2021-22 Bank continued to make concertedefforts to increase the use of Hindi and compliance of guidelines received from Departmentof Official Language Ministry of Home Affairs GoI Committee of Parliament on OfficialLanguage and Department of Financial Services Ministry of Finance. Concrete and effectivesteps were taken by the Bank to achieve various region wise targets set in the AnnualProgram 2021-22 issued by the Department of Official Language Ministry of Home AffairsGovernment of India as a result most of the targets have been achieved.

Special works done in the Field of Official Language Implementation

Hindi and Regional Languages were used in publicity and promotional campaigns relatedto the schemes and products of the Bank.

• Online Hindi quiz for staff members was conducted on Bank's e-Learning portalPNB UNIV.

• Cyber Security Glossary prepared in Hindi.

• "Noting Sahayika" was prepared to help the officers in Hindi notingwhich was released by Dr. Sumeet Jerath IAS Secretary Official Language Ministry ofHome Affairs Government of India.

• Inter Bank Hindi Essay Competition was organized at All India level.

During FY 2021-22 total 4 books were awarded by the Bank under the Original Hindi BookWriting Scheme.

• Intensive monitoring was done to achieve targets set in Annual Programme andCorporate Action Plan of Official Language duly approved by the Board

• Prizes were awarded to offices/staff doing excellent work in Hindi under LalaLajpat Rai Shield Yojana and various other incentive schemes to increase the use of Hindiin the Bank.

• Quarterly house magazine of the Bank "PNB Pratibha" and halfyearly Hindi magazines of the Zonal Offices were published regularly.

During the FY 2021-22 the Bank celebrated the month of September 2021 as Hindi monthand on 14th September 2021 a grand celebration of Hindi Diwas was organized inHead Office and its various offices. During this period various programs/competitions wereorganized and prizes were given to the winners by the Managing Director and CEO and Headsof the Offices.

• PNB has efficiently discharged the responsibility of convener of 29 TownOfficial Language Implementation Committees across the country. Half yearly meetings ofthese committees were held regularly and Hindi competitions Hindi workshops Hindiseminars etc. were organized during the year.

External Inspection / Official Language Seminar/Conference

• A discussion meeting was organized on 3rd March 2022 by the Draftingand Evidence Sub-Committee of Parliament on Official Language with the Chairman of DelhiBank Nagar Rajbhasha Karyanvayan Samiti (NARAKAS) (Convener PNB) and its 5 member offices.Apart from this the official language inspections of Bank's various Zonal/Circle Officeswere also done by the Ministry of Finance and the Ministry of Home Affairs and the workwas being done by the bank towards the progressive development of Hindi was appreciated.

• In the graceful presence of Dr. Sumeet Jerath IAS Secretary OfficialLanguage Ministry of Home Affairs Government of India & under the Chairmanship of MD& CEO an All India Official Language Seminar was organized on 29th June2021 at Head Office Dwarka for the top Management and Executives of the Bank & ZonalManagers and Official Language Officers from the field in which detailed information wasgiven on the strategy of '123' 'Leela' app and memory based translation tool KANTHASTH.

• A two-days All India "Rajbhasha Sammelan cum Review Meeting" wasorganized by the Bank at Staff Training Collage Civil Lines New Delhi on 14thMarch 2022 and 15th March 2022 for the Official Language Officers posted inthe Bank's offices located in Region 'A' and Region 'B' and second two-days All India"Rajbhasha Sammelan cum Review Meeting" was organized by the Bank in Lucknow on24th March 2022 and 25th March 2022 for Official Language Officersposted in the Bank's offices located in Region 'B' and Region 'C'.

• Online Annual review meetings of all the Zonal Offices were organized by theBank for Zone wise official language review in which all the subordinate Circle Officesof respective zones also participated.

Progress made in the use of Hindi in Information Technology

• Internet banking facility was made available to the customers in 7 regionallanguages besides Hindi and English.

• Option of Hindi and regional languages and facility to print transaction slip inHindi is available for customers at ATMs.

• Facility to make transactions in 10 Regional Languages apart from Hindi andEnglish has been made available to the customers in the mobile application "PNBONE".

• The Bank provides an option to its customers to receive banking SMS alerts intheir mother tongue (Hindi Bangla Gujarati Kannada Malayalam Marathi Odia PunjabiTamil Telugu and Urdu) and SMS send in the language chosen by the customer.

• Bank's website is in bilingual form and Hindi language option has been madeavailable to the customers in the Bank's "Pihu Chatbot".

• Every day a podcast on a Banking topic in Hindi is released by the bank for theemployees.

• Online Hindi reporting of all Branches Circles Zones and Divisions of HeadOffice was done on the Official Language web portal.

• Due to COVID-19 pandemic virtual Hindi workshops competitions e-webinarse-Inspections were organized through digital platforms apart from physical mode.

• Facility is available to print Passbook CDR/FDR in Hindi and doing servicerelated work of staff members in Hindi through bilingual software in Finacle and HRMS.

• Trainings were given to the staff members to work in Hindi on computer andvarious e-Tools of Hindi.

M. PNB'S SUBSIDIARIES AND REGIONAL RURAL BANKS

DOMESTIC

i. PNB Gilts Ltd: During FY 2021-22 debt market was characterised with gradualfirming up of yields with accentuated fi'rming in the second half of the year. In thefi'rst half of the year yields remained largely anchored as the monetary policy committee(MPC) continued with its accommodative growth-supportive stance and also undertookgovernment securities purchases through G-SAP. During H1FY 2021-22 RBI purchasedsecurities aggregating Rs. 190000 Crore on a net basis which helped create demand forthe large scheduled government securities issuances for the year. In the second half ofthe year however yields remained largely upward bound with Q4 witnessing a sharp spikein yields. A sharp rise in global crude oil prices and reversal of monetary policy byvarious emerging market and advanced economies pushed both global and domestic yieldshigher during Q4 FY 2021-22. The rise in yields was aggravated by higher- than-expectedindicative calendar of market borrowings of State Governments/Union Territories plannedmarket borrowings by the Centre indicated in the Union Budget 2022-23. The cancellation oftwo consecutive central government bond auctions however tempered the hardening ofdomestic yields towards the close of the Financial Year.

During the year the 10-yr benchmark yield touched a high and low of 6.95 per cent and5.97 per cent respectively and closed at 6.86 per cent as on 31st March2022.

Against the backdrop of deteriorating market conditions PNB Gilts Ltd. continued tofulfil all its obligations as a Primary Dealer mandated by RBI both in Primary andSecondary market. Company posted a Profit before Tax (PBT) of Rs. 210.15 Crore during FY2021-22 vis-a-vis PBT of Rs. 614.35 Crore during FY 2020-21. Profit after Tax (PAT)amounted to Rs. 165.71 Crore during FY 2021-22 as against Rs. 454.12 Crore during FY2020-21. Capital adequacy remains strong with its capital to risk weighted assets ratio(CRAR) at 66.41 per cent as on 31st March 2022 (45.58 per cent as on 31stMarch 2021) well above the regulatory minimum of 15 per cent for PDs.

ii. PNB Investment Services Ltd: The Company is a profitmaking company from thevery first year of its operations. During the year ended 31st March 2022 theCompany registered operational (fee-based) income of Rs. 9.59 Crore and total income ofRs. 12.10 Crore as against a fee-based income of Rs. 5.33 Crore and total income of Rs.8.02 Crore for the year ended 31s* March 2021. Profit before Tax during theperiod ended 31s* March 2022 was Rs. 6.10 Crore as against Rs. 1.87 Crore forthe period ended 31s* March 2021.

The company operates in three verticals namely Corporate Advisory Merchant Bankingand Security Trustee. In the Corporate Advisory Vertical during the year PNBISL advisedmany marquees business groups and corporate clients on various transactions includingdebt syndication debt resolution and other corporate advisory assignments. With in-houseexpertise and deep understanding of select sectors PNBISL prepared and delivered credibleTechnoEconomic Viability (TEV) reports to its clients.

In Merchant Banking Vertical PNBISL actively participated in PNB's fund-raisingtransactions of Qualified Institutional Placement (QIP) and Tier II Bonds. The involvementin these transactions varied from advising on compliance requirements drafting of offerdocuments and marketing of the offerings.

In the Trusteeship business despite intense competition from entrants not having longstanding in the business by slashing fees the company has been able to maintain theclients by providing quality of services. A cautious strategy has been adopted whileselecting the clients so as to ensure only credible clients are on-boarded. With itsprompt and quality service as also realigning our card rates with market requirement thecompany continues to add on new clients and build on its strategy to be a trusted partnerof leading banks and corporates.

Going forward the company is poised to build on its capabilities across businessverticals such as credit appraisal & debt syndication services TEV consultancyMerchant Banking services and Security Trusteeship services to offer greater value to theparent bank and all its stake holders.

iii. PNB Cards & Services Limited: The Company has been incorporated on 16*hMarch 2021 as a Non-Financial Entity for providing Business Support services related toCredit Card Business of the Bank. Currently the company is providing its services forcustomer acquisition and merchant tie ups. During FY' 2021-22 being the first year ofoperations the company has earned revenue from operations of Rs. 2.60 Crore and Netprofit after Tax of Rs. 0.13 Crore. The company will operate on feet-on-street model withits sales executives sourcing of Credit Cards in the potential market along with digitalon boarding platforms for better customer experience.

• INTERNATIONAL

i. PNB International Limited (PNBIL): PNBIL continues to serve its customers in Londonand Midlands through network of seven branches located at Moorgate Ilford WembleySouthall Leicester Birmingham and Wolverhampton.

Even during the COVID pandemic the Bank ensured to provide all services to customers insmooth and safe manner. During FY 2021-22 the total business of PNBIL increased from 1755USD Million to 1825 USD Million thus showing growth of 4 per cent under challengingcircumstances with healthy profitability.

The Bank continues to grow the UK based business book and diversify within the productvariants in secured lending book in line with its strategy. Customer retention has beenthe focus for the Bank and the Bank is also developing Alternate channel to raise low costretail deposits.

ii. Druk PNB Bank Ltd: Druk PNB Bank Ltd Bhutan Banking Company having its corporateoffice at Thimphu Bhutan. It started its operation on 27th January 2010 inBhutan as the country's fourth commercial Bank with a component of both FDI and jointventure in the Banking Sector. Presently Bank has 8 branches and 30 ATMs spread across thecountry. Total Business of the DPNBL increased to to Rs. 3125 Crore as on 31stMarch 2022 from from Rs. 2780 Crore as on 31st March 2021 showing YoY growthof 12.41 per cent. CASA Ratio of the Bank stood at 42.27 per cent as on 31stMarch 2022. Profit of the Bank has increased to Rs. 22.30 Crore as on 31stMarch 2022 from Rs. 19.56 Crore as on 31s* March 2021. Paid up capital of theBank as on 31st March 2022 is Rs.84 Crore.

• REGIONAL RURAL BANKS (RRBs):

As on 31st March 2022 there are 9 RRBs sponsored by the bank namely Dakshin BiharGramin Bank (DBGB) Patna; Sarva Haryana Gramin Bank (SHGB) Rohtak; Himachal PradeshGramin Bank (HPGB); Mandi; Punjab Gramin Bank (PGB) Kapurthala; Prathama UP Gramin Bank(PUGB) Meerut; Assam Gramin Vikas Bank (AGVB) Assam; Bangiya Gramin Vikas Bank (BGVB)West Bengal; Tripura Gramin Bank (TGB) Agartala and Manipur Rural Bank (MRB) Imphal.

These 9 RRBs are operating in 9 states namely Bihar Haryana Himachal Pradesh PunjabUttar Pradesh West Bengal Assam Manipur and Tripura covering 185 districts with anetwork of 4613 branches.

i. Total Business of sponsored RRBs as on 31st March 2022 is Rs.188493 Croreregistering a YoY growth of 7.59 per cent.

ii. Deposits of RRBs are at Rs.121659 Crore as on 31st March 2022.Aggregate Deposits registered a YoY growth of 8.20 per cent. The CASA deposits of the RRBshave increased to Rs. 75143 Crore as on 31st March 2022 from Rs. 68747 Croreas on 31st March 2021 with a YoY growth of 9.30 per cent.

iii. The advances of the RRBs as on 31st March 2022 stood at Rs. 66834 Crore with aYoY growth of 6.51 per cent.

iv. As per RBI guidelines it is mandatory for RRBs to meet the regulatory requirementof CRAR 9 per cent. The RRBs attaining CRAR over and above the regulatory requirement areHPGB (9.47 per cent) PGB (15.56 per cent) PUPGB (13.49 per cent) SHGB (14.10 per cent)and TGB (30.87 per cent). The RRBs having CRAR less than the regulatory requirement areAGVB (7.59 per cent) DBGB (8.35 per cent) MRB (7.24 per cent) and BGVB (8.89 per cent) Asan outcome of recapitalization assistance to the RRBs by Centre/ States / Sponsor Bank andimprovement in operational efficiency these RRBs are expected to achieve CRAR of 9 percent in the coming years.

v. The sponsored RRBs are in profit (except DBGB Patna and MRB Imphal) and combined Netprofit of the RRBs during the FY 2021-22 is Rs. 184 Crore.

vi. The RRBs have shown a remarkable growth of 59.85 per cent in enrollment underPradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY).

N. AWARDS AND ACCOLADES

Bank's effort have been recognized at various platforms. The Bank has been conferredthe following awards for initiatives taken in various fields for the year 2021-22:

• Special Commemorative Award FY' 2021 by NABARD Best PSU in the fields ofAgriculture Credit Micro Finance Financial Inclusion and Technology Adoption.

• Finacle Client Innovation Award by Infosys- Runner Up for PNB's path breaking"Process Innovations".

• ASSOCHAM Runner Up under Digital service under PSB Merged Category

• EASE 3.0 AWARDS

o Runner up under Theme 3 Institutionalizing Prudent Banking

o Runner up under Theme 4 Governance and Outcome Centric HR

o Amongst Top 3 Banks in Improvement from March baseline

• The Asian Banker Financial Technology Innovation Award 2021 "BestCore-banking Technology Implementation.

• Rajbhasha Kirti Award for the year 2020-21 promoting Official language Hindi.

• 2nd highest percentage of digital payment Transactions "UtkarshPuraskar" Digi-Dhan Award 2019-20 by Ministry of Electronics & InformationTechnology

• 2nd Best Bank in SHG Credit Linkage under NRLM scheme by Ministry ofRural Development (MoRD).

• 1st position amongst peer banks under Agriculture Infrastructure Fund(AIF) campaign launched by Ministry of Agriculture and Farmers Welfare.

• 3rd Position for its performance in implementing the Governmentscheme PMEGP for 2020-21.

• Best MSME Bank (PSU) in 8*h MSME Excellence Awards by ASSOCHAM

• Felicitated by Pension Fund Regulatory and Development Authority (21.12.2021)for contribution towards NPS Diwas (01.10.2021).

• "Global Banking & Finance Awards 2021" in the category"Initiative Core Amalgamation" jointly with M/s Infosys.

• Award of Excellence in Campaign Atal Pension Yojana (APY) Leadership Capitallaunched by Pension Fund Regulatory & Development Authority (PFRDA)

• Dr. Ambedkar Business Excellence Awards under the Category "MostSignificant Lender Supporting SC Entrepreneurs" by Ministry of Social Justice andEmpowerment.

O. FUTURE BUSINESS PLAN OF THE BANK

Bank has been able to survive in all the tough conditions successfully withwell-defined strategy. Bank during the year continued to provide superior bankingexperience to its customers. Bank also successfully completed its amalgamation exercisethrough smooth integration of people and processes within timeframe.

There has been immense opportunities awaiting the Banking sector going forward. Firstof all the Bank will keep its focus on the diversified credit growth as it is expectedthat the huge demand will erupt from MSME and Retail segment in FY 2022-23. With theexpected pick up in the credit growth interest income may also see an uptick. CASA growthis also one of the areas where the Bank will remain focused for higher profitability. TheBank would scale up collaborations and partnerships for better results.

Asset quality will continue to be the buzzword for us and the Bank will take up actionoriented plans to keep the NPAs low so that the capital remains available for businessgrowth. Strong recovery measures will be driving the improvement in Asset quality for FY'2022-23 as well. The thrust area of the Bank would be credit monitoring through proactivesteps on the basis of various early warning signals and address the stress upfront.

On Digitalization front Bank will continue to build upon strong technologicalplatforms and innovate to provide convenient banking services to all the customersespecially tech savvy ones. Bank will tread the path with well delineated strategy so thatthe potential of the branches may be utilized to the maximum.

Bank considers its HR as its most important resource to drive the business growth andwill continue to up skill it for holistic HR Transformation. Further Customer Service andCustomer convenience to be on the priority and Bank will ensure that customer needs areresponded promptly and in a positive manner. It shall be the endeavor of the Bank toremain a customer friendly bank with minimal grievances.

P. BOARD OF DIRECTORS

Board of the Bank compromises of 11 Directors including 05 whole time Directors i.e.One Managing Director & CEO and four Executive Directors as on 31st March 2022.During the Financial Year 2021-22 the following changes took place in the composition ofBoard of Directors:

• Shri Agyey Kumar Azad completed his tenure as Executive Director on 30.04.2021.

• Dr. Asha Bhandarker Shareholder Director completed her tenure on 11.09.2021.

• Dr. Rekha Jain has been elected as Shareholder Director on the Board of Bankw.e.f. 12.09.2021.

• Shri Kalyan Kumar has been appointed as Executive Director on the Board of Bankw.e.f. 21.10.2021.

• Shri Pankaj Joshi has been appointed as Part time NonOfficial Director on theBoard of Bank w.e.f. 21.12.2021.

• Shri Sanjeev Kumar Singhal has been appointed as Part time Non-Official Directoron the Board of Bank w.e.f. 21.12.2021.

• Shri CH S.S. Mallikarjuna Rao completed his tenure as MD & CEO on31.01.2022.

• Shri Atul Kumar Goel has been appointed as MD & CEO w.e.f. 01.02.2022.

• Shri Vivek Aggarwal RBI Nominee Director completed his tenure on 25.02.2022.

• Shri Anil Kumar Misra has been appointed as RBI Nominee Director on the Board ofBank w.e.f. 25.02.2022 (After Business Hours).

The Board wishes to place on record its appreciation for the valuable contribution madeby Shri Agyey Kumar Azad (Executive Director) Dr. Asha Bhandarker (Shareholder Director)Shri CH S.S. Mallikarjuna Rao (MD & CEO) and Shri Vivek Aggarwal (RBI NomineeDirector).

Q. DIRECTORS' RESPONSIBILITY STATEMENT

The Directors confirm that in the preparation of the annual accounts for the year ended31st March 2022:

• The applicable Accounting Standards have been followed along with properexplanation relating to material departures if any;

• The accounting policies framed in accordance with the guidelines of the ReserveBank of India were consistently applied;

• Reasonable and prudent judgment and estimates were made so as to give a true andfair view of the state of affairs of the Bank at the end of the financial year and of theprofit of the Bank for the year ended 31st March 22.

• Proper and sufficient care was taken for the maintenance of adequate accountingrecords in accordance with the provisions of applicable laws governing banks in Indiaand;

• The accounts have been prepared based on the principle of "goingconcern".

R. ACKNOWLEDGEMENT

The Board expresses thanks to the Government of India Reserve Bank of IndiaSecurities and Exchange Board of India Stock Exchanges Bank's customers Public and allother Stakeholders for valuable support continued patronage and confidence reposed in theBank.

The Board also placed on record its appreciation for the valuable contribution made bythe members of the Bank's staff at all levels and looks forward to their continuedinvolvement in achieving the future goals.

For and on behalf of Board of Directors

Atul Kumar Goel

Managing Director & CEO.

.