PNB CEO optimistic about reaching $2.5 billion FCNR(B) target by September

Punjab National Bank (PNB) CEO Ashok Chandra has expressed optimism about meeting the bank’s $2.5 billion target under the Foreign Currency Non-Resident (Bank) [FCNR(B)] deposit scheme by September 30. Speaking to The Indian Express, Chandra revealed that the bank has already mobilised $425 million and expects the majority of inflows to materialize during August and September.

Industry-Wide Optimism for $50 Billion Goal

Chandra also shared his belief that the banking industry as a whole is on track to achieve its broader target of mobilising over $50 billion through the FCNR(B) scheme. He noted that the scheme is particularly attractive to customers bringing fresh overseas deposits, rather than converting existing Non-Resident External (NRE) deposits, which would incur losses under current rates.

Strategic Outreach to NRIs Boosts Deposits

PNB has expanded its outreach to a larger base of Non-Resident Indian (NRI) customers across multiple countries. Chandra highlighted that while the cost structure for deposits has risen, it has not posed significant challenges due to the bank’s proactive engagement with its overseas clientele. This broader strategy aims to diversify the deposit base rather than relying on a limited pool of customers.

Why This Matters

The FCNR(B) scheme is a critical tool for Indian banks to attract foreign currency deposits, particularly in the face of global economic uncertainties. Achieving the $50 billion industry-wide target could bolster India’s foreign exchange reserves and enhance liquidity in the banking system. PNB’s progress reflects the broader confidence in the sector’s ability to meet these ambitious goals.

Focus on Lending Growth and Key Sectors

Beyond deposits, Chandra highlighted PNB’s strong lending performance across retail, agriculture, and MSME segments, which saw growth rates of 17.5%, 16.4%, and nearly 20%, respectively, in the last financial year. Renewable energy has emerged as a “champion area” for corporate lending, with the bank reporting 30% growth in this sector. Other high-demand areas include infrastructure, data centres, and agriculture-related businesses.

AI Adoption Without Job Cuts

PNB is also investing heavily in technology, including Artificial Intelligence (AI), Generative AI, and quantum technology, to improve customer experience and operational efficiency. Chandra assured that AI adoption will not lead to job losses, as the bank is committed to reskilling its workforce to work alongside these innovations.

Outlook for the Financial Year

Looking ahead, PNB plans to evaluate overseas borrowing options, such as issuing Medium-Term Notes (MTNs), after September. However, Chandra clarified that no board approval has been sought for this initiative yet.

With robust strategies in place for deposit mobilisation, lending growth, and technological advancements, PNB appears well-positioned to meet its financial targets while contributing to the broader stability of India’s banking sector.

Source: Indian Express