Indian bank chief Punjab & Sind declares war on bad debts

MUMBAI, Aug 2 (Reuters) – India’s Punjab & Sind Bank (PUNA.NS) is aiming to reduce its bad debts and improve recoveries to ensure gross non-performing assets fall below 10% by the end of FY23, the state – the lender’s chief said on Tuesday.

“We have declared a war on non-performing assets and also aim to keep slippage low,” Swarup Kumar Saha, managing director of Punjab & Sind Bank, who took office in June, told Reuters. “We are also carrying out aggressive recovery campaigns and expect to recover 25 billion rupees ($317.91 million) in loans this financial year.”

The bank will also transfer bad debts worth more than five billion rupees to a national bad debt bank, which will also help reduce toxic assets.

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The bank’s gross non-performing assets for the June quarter were 11.34%, up from its peers.

Also at the system level, bad loans have declined and were at a six-year low of 5.9% in March 2022, which the country’s central bank expects to fall further. Read more

Saha said the lender also intends to improve its credit growth by focusing on retail, agriculture and small and medium-sized business lending to bring the bank back onto the growth curve after a moderate performance in recent years.

“Overall, we expect credit growth to be above 15% for FY23. , but now we are also focused on growing business loans,” he said. added.

The bank’s gross advances rose 7%, while deposits rose just 3% in the quarter ended June.

To improve deposit growth, the lender has launched new products at competitive rates and may increase deposit rates further in the coming weeks.

The bank remains well capitalized and management will raise funds after the September quarter, Saha added.

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Reporting by Nupur Anand; Editing by Shailesh Kuber

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