PNB Plans to Sell Non-Performing Assets Worth 50 Billion Rupees to Asset Reconstruction Companies, Aiming for a Minimum Recovery of 50%: MD Ashok Chandra (paraphrased)
Punjab National Bank (PNB) is gearing up for a significant change in its financial strategy in the ongoing financial year, FY26. The bank has announced its intention to sell over 100 non-performing asset (NPA) accounts, valued between Rs 4,000 crore and Rs 5,000 crore, to asset reconstruction companies (ARCs) [1][2][3][4][5].
This move is part of PNB's broader strategy to strengthen recoveries, clean up its balance sheet, and support its credit growth and profitability goals for the year. The bank expects a recovery rate of at least 40-50% from this sale, with some accounts potentially yielding 100% recovery due to strong collateral [1][2][3][4][5].
The sale of these NPA accounts is aligned with PNB’s FY26 business target to cross Rs 30 lakh crore in total business. The strategy also supports PNB’s plans for 11–12% credit growth and 9–10% deposit growth in FY26 [1][2][3][4][5].
PNB has been very conscious of the operating profit and is mindful that whatever the top line, it should add profit to the bank. In this regard, the bank is aiming for a significant contribution to the operating profit from the corporate loan book [1][2][3][4][5].
The bank has recorded the highest ever operating profit of Rs 7,081 crore in the first quarter of the current financial year. PNB's total business rose by 11.6% to Rs 27.19 crore at the end of the first quarter of the current financial year [1][2][3][4][5].
In terms of lending, PNB is very aggressive and aims to make decisions within 15 days. The bank has a good pipeline of corporate loan book worth Rs 1.29 lakh crore [1][2][3][4][5]. Chandra, the bank's managing director, has expressed confidence in double-digit growth from Q2 onwards in the corporate loan segment [1][2][3][4][5].
PNB is also focusing on self-help groups, food processing, and infrastructure-related facilities for rural areas. The bank's MSME segment has grown at 17-18% and will continue to grow [1][2][3][4][5].
It's worth noting that PNB's total business is currently lower than some of its competitors. As of June 30, 2025, Bank of Baroda had a total business of Rs 26.43 lakh crore, closely followed by Canara Bank at Rs 25.64 lakh crore [1][2][3][4][5]. PNB has set a target of Rs 29.56 lakh crore for the current financial year [1][2][3][4][5].
To further boost its corporate lending, PNB has created a dedicated cell for project financing. The bank is also very active in the retail sector, with core retail loans in housing, vehicle, and education growing at 17% [1][2][3][4][5].
In a bid to curtail corporate deposits significantly, PNB has been focusing on retail deposits to ensure that everything contributes to the bottom line of the bank [1][2][3][4][5].
In a positive development, PNB has managed to keep its attrition rate low. ICICI Bank reported an 18% attrition rate in FY25, the lowest among large private lenders [1][2][3][4][5].
In conclusion, PNB's strategy for the ongoing financial year is centred around cleaning up stressed assets, boosting recoveries, and fuelling future business expansion. The bank is actively working towards its goals, with a focus on corporate lending, retail growth, and improving its balance sheet.
- PNB's resolution to sell over 100 NPA accounts is part of its broader strategy to strengthen recoveries, clean up its balance sheet, and support its growth objectives in the financial industry.
- PNB aims to make a significant contribution to its operating profit from the corporate loan book, as it records the highest ever operating profit of Rs 7,081 crore in the first quarter of FY26.
- To further boost its corporate lending, PNB has created a dedicated cell for project financing and is very active in the retail sector, with core retail loans growing at 17%.
- PNB has set a personal-finance target of Rs 29.56 lakh crore for the current financial year, with a focus on double-digit growth from Q2 onwards in the corporate loan segment.
- In the finance and banking industry, PNB's strategy for FY26 is centered on cleaning up stressed assets, boosting recoveries, and fueling future business expansion, all while maintaining a low attrition rate.
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