‘We plan to launch new initiatives, including cash flow-based lending, to ensure borrowers are not burdened and can access funds more quickly.’

Punjab & Sind Bank expects total recovery of more than Rs 1,000 crore in FY25.

Managing director (MD) and chief executive officer (CEO) Swarup Kumar Saha, in an interview with Harsh Kumar/Business Standard in Delhi, says the public sector bank aspires to increase retail, agriculture, and micro, small and medium, enterprise (MSME) lending to around 60 per cent next year.

What were the reasons for the surge in Q3FY25 profit for the bank?

The bank has achieved significant growth, with total advances increasing by 14.73 per cent, signalling a return to positive growth trajectory.

We are actively rebalancing our portfolio, directing more resources towards the retail, agriculture, and MSME segment.

It now accounts for 54.20 per cent of our total advances.

This shift is part of our strategy to enhance our balance sheet.

We’ve also seen excellent recoveries and upgrades, particularly from key sectors like infrastructure and hospitality.

In Q3, we achieved recoveries totalling approximately Rs 565 crore, contributing to a nine-month total of Rs 944 crore.

Notably, we upgraded around Rs 60 crore from infrastructure projects and Rs 127 crore from the hospitality sector.

And, we are expecting more than Rs 1,000 crore of recoveries in FY25.

How do you plan to go ahead in corporate lending?

We are very selective when it comes to the sectors we engage with, particularly in the corporate space.

Given Punjab & Sind Bank’s size, geographical presence, and historical context, we maintain a cautious approach.

Ideally, we aim for a 60-40 ratio between retail, agriculture, MSME and corporate lending.

In the recent quarter, corporate lending grew by 8.25 per cent, compared to 4 per cent in the previous quarter, but we will remain choosy to ensure that retail, agriculture, and MSME growth continues as well.

Our aspiration is to increase the retail, agriculture, and MSME segment to around 58-60 per cent over the next year.

While we plan to grow in the corporate sector, we will focus on churning our existing corporate portfolio.

Corporates are becoming increasingly demanding, and with our deposit costs at around 5.8 per cent, we cannot afford to lend at lower rates.

How is PSB working to grow deposits?

In terms of innovation, we are also exploring digital lending solutions, particularly in the MSME sector.

We plan to launch new initiatives, including cash flow-based lending, to ensure borrowers are not burdened and can access funds more quickly.

For example, we recently introduced a digital car loan product that allows customers to secure a loan from the comfort of their homes in just 15 minutes.

This is part of our strategy to enhance digital engagement and streamline the lending process.

We believe that with these improvements and a focus on digital tools, we can better serve our customers and adapt to their needs effectively.

Our focus on current account savings account (Casa) growth is crucial for funding our lending operations.

However, we are currently facing liquidity challenges due to a significant outflow of funds to the market and mutual funds, which is impacting deposit growth.

To address this, we’ve implemented various innovative strategies, including salary packages that attract customers.

We have established numerous pacts with the Indian Army, Air Force, Navy, Coast Guard, the Central Industrial Security Force (CISF) and Assam Rifles to capture this demography.

These partnerships are starting to yield results as we actively promote our services, especially on Indian Army Day, where we are conducting various outreach campaigns.

How are you working on the digital front?

Regarding our digital initiatives, we are making substantial investments this financial year and next, especially in light of recent cybersecurity incidents that have heightened awareness around security measures.

We are prioritising these enhancements to ensure the safety and reliability of our digital services.

While I don’t have specific figures, I can assure you that we are committed to investing heavily in this area.

In addition, we have launched new current account and digital products to enhance customer appeal.

Our mobile app has received a high rating of 4.7 on the Play Store, reflecting our commitment to improving user experience.

We now offer over 150 services and are continually expanding this range to increase customer loyalty.

Feature Presentation: Aslam Hunani/Rediff.com