2019 is going to be a profitable year for PNB: Sunil Mehta

Sunil Mehta, managing director & chief executive officer, Punjab National Bank (PNB), speaks about the April-June quarter results, fraud at Bhushan Power & Steel and non-performing assets during an interview with Dimpy Kalra.

PNB has reported positive results in the first quarter of this fiscal, and this revival also brings a challenge. What is your view on it?

Yes, I think that we have already labelled it as a year of profitability and creating value. We are confident that this year is going to be a profitable year for us.

Update us on Bhushan Power & Steel account.

As far as Bhushan Power and Steel is concerned, it was mentioned in the first list of the Reserve Bank of India (RBI) that included 12 accounts. Under the scheme, every bank that went to National Company Law Tribunal (NCLT) had provisioned 50% for the account. In addition, going by the government's requirement, the account was also sent for a forensic audit, where it was found that there are certain diversions and that's why the bank went for filing of the case with the investigating agency. So, we have worked in this direction. At the same time, I would like to say that this account has reached an advanced stage in the NCLT resolution process, and we hope the resolution will be completed soon, as bids have been invited for it, which will be followed by good bids. So, we expect a good recovery from this account.

Have you provided for accounts such as DHFL and Jet Airways in your books? If yes, what is the quantum?

Fresh lending, sickening of accounts and turning NPAs is a regular process. In fact, as far as there is an economy, there will be fresh lending and slippages of some accounts. But things will depend on the magnitude of the slippage. So, amid the existing trend, I can just say that the worst is behind us, where slippages of heavy amount were happening. You would have seen in our numbers that our quarter-on-quarter slippages have come down, that is slippages of this quarter are less than the same quarter of the corresponding year as well as the previous March quarter. This shows there is a substantial improvement in our asset quality and reduction in fresh slippages. In addition, there is an absolute reduction in our gross as well as net NPAs. In fact, our gross and net NPAs have gone down in all the five quarters since March 2018.

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