Ashok Chandra, the MD & CEO of Punjab National Bank (PNB), has shared a positive outlook for the bank's future. Even though Net Interest Income (NII) [the difference between the interest a bank earns from loans and what it pays on deposits] grew by only 2.1% in the first quarter, the bank is aiming for a 7% growth for financial year 2027. Mr. Chandra believes that focusing on high-quality loans and reducing the cost of deposits will help reach this goal.

A major part of this plan involves Foreign Currency Non-Resident (B) deposits, known as FCNR (B) [fixed deposits for NRIs held in foreign currency]. PNB wants to raise $2.5 billion through these deposits by September 2026. The bank is aggressively connecting with its NRI customer base to explain the benefits of these accounts. Interestingly, these deposits do not require the bank to maintain CRR or SLR [mandatory reserves banks must keep with the RBI or in liquid assets], which helps lower the overall cost of funds for the bank.

Regarding operating profits, the CEO is targeting a 9-10% growth. This is higher than the 6.2% seen in the latest quarter. PNB is counting on three new business lines to drive this: supply chain financing, cash management services, and its credit card division. These units were stabilized late last year and are now expected to bring in fresh revenue. The bank has also removed low-earning advances [loans that give very little profit] from its balance sheet to make room for better assets.

On the topic of Net Profit, PNB reported a massive jump compared to last year. While some analysts think growth is slowing down, Mr. Chandra explained that the bank is intentionally setting aside money as a safety net. Specifically, they kept ₹390 crore aside this quarter for ECL provisions [Expected Credit Loss, a method of setting aside funds for potential future loan defaults]. The bank now has a total "floating provision" of ₹2435 crore to ensure a smooth transition when new RBI rules start in 2027.

There has been a lot of talk about the "deposit war" in India, where credit [loans] is growing faster than deposits. At PNB, credit grew at 12.7% while deposits grew at 8.5%. However, the bank is not worried because its CD ratio [Credit-to-Deposit ratio, showing how much of the bank's deposits are lent out] is at 73.4%. They have enough room to reach 77-78% before they need to worry about raising more money.

For bank staff and aspirants, this news shows that PNB is shifting its focus from just getting "bulk deposits" to quality growth. The bank is refusing to take expensive deposits that don't help the bottom line. Instead, the focus will stay on recovery, digital services, and NRI business. Moving forward, the industry should watch how PNB manages its NII as interest rates in the market fluctuate and the 2027 ECL deadline approaches.