The Punjab National Bank (PNB) is expected to turn profitable this fiscal and is poised for growth, its managing director Sunil Mehta said on Tuesday, asserting that the Rs 14,000-crore Nirav Modi-scam is a bygone.
Mehta said he hoped that the PNB will be back into the black during 2018-19 due to the various efforts taken by the bank after the fraud came to light in January this year.
“The bank has demonstrated its capability to absorb such a shock and hopefully it would be back into the black during this financial year itself,” he said.
The bank is slowly getting on to the growth path, he said adding that credit growth is picking up and has surpassed industry average. The PNB suffered a loss of Rs 940 crore for the June quarter of 2018-19 financial year. It clocked a profit of Rs 343.40 crore in the same quarter of 2017-18. To give fillip to expansion, the bank’s board has sought Rs 5,431 crore capital support from the government through the issuance of preferential shares.
The proposed funds infusion would support growth initiatives of the bank. The previous cash infusion of Rs 2,816 crore earlier this year was for meeting regulatory ratios, he said. So in all, the PNB is set to get Rs 8,247 crore funds support out of Rs 65,000 crore earmarked for the entire public sector banking system for the current fiscal.
After clearance from the extraordinary general meeting (EGM) to be held on October 30 and other regulatory approvals, the funds infusion would be made in the bank.
Nirav Modi and his uncle Mehul Choksi duped the PNB of Rs 14,000 crore through the issuance of fraudulent letters of undertaking (LoUs), in connivance with certain bank officials. A Mumbai branch of the PNB had fraudulently issued LoUs for the group of companies belonging to Modi since March 2011.
Talking about PNB’s initiative for flood-ravaged Kerala, Mehta said: “PNB has always shown commitment for the national cause. The major havoc flood has played in Kerala needs sympathetic consideration from all in the country and PNB cannot be behind.”
As part of the initiative, PNB’s employees and retirees have collected Rs 5 crore for flood relief and rehabilitation.
