Punjab National Bank has revised its projections on asset quality, with the gross non-performing assets ratio (GNPA) expected to reach 6.5 per cent by March 2024. The net NPA ratio for March 2024 is estimated at 1 per cent and below. The public sector lender had last seen a GNPA ratio of 6.5 per cent in March 2014 and the asset quality has consistently improved after GNPA topped 18.38 per cent in March 2018 amid the Nirav Modi-controversy. The net NPA of the bank was below 1 per cent in March 2011. “Last time I gave the guidance that by March 2024, we will be in a position to reduce the gross NPA to 7 per cent. Since we have already achieved 7.73 per cent in Q1FY24, I am revising my guidance to 6.5 per cent by March 2024. The net NPA guidance was in the range of 2 per cent. “Since we have already achieved this in Q1FY24, we are further revising our guidance to 1 per cent or below by March 2024,” said the bank’s managing director and CEO Atul Kumar Goel. Goel said that a combination of having fresh addition to stressed assets below the recovery numbers along with steps taken to improve underwriting and collection efficiency has been key to the improvement in asset quality of the bank. “We have set a target for the current financial year to have Rs 22,000 crore recovery. If we divide by four, every quarter the recovery is around 5,500 crore. “Against Rs 5,500 crore we have registered a recovery of Rs 5,417 crore in Q1FY24 whereas the addition was
Rs 2,390 crore. The target is our recovery should be
double that of addition in the current financial year,” Goel said. “Steps have also been taken to improve underwriting and collection efficiency. Every month we are monitoring the underwriting standards. “In the last three years, we have sanctioned credit of around Rs 6.16 lakh crore out of which disbursement was Rs 5.63 lakh crore against which outstanding as on date is Rs 4.40 lakh crore. The NPA in new underwriting is hardly Rs 1,259 crore which is 0.22 per cent of new underwriting,” he said.