Saturday, December 9, 2023
Home > Finance News > Moratorium shouldn’t be extended beyond August, says Punjab National Bank

Moratorium shouldn’t be extended beyond August, says Punjab National Bank


The Reserve Bank of India (RBI) should not extend the moratorium facility beyond August as the economic recovery process had already started, said Mallikarjuna Rao, MD and CEO of Punjab National Bank (PNB) during a virtual press conference on Monday.

“The moratorium should not be extended because moratoriums are given only when the situation is uncertain and one cannot ascertain the impact,” Rao said, adding that green shoots were already visible in the economy.

Rao expected a broader revival, encompassing more sectors of the economy, to be more effective from October onward.

The country’s second largest lender saw about 5-6% of its total loan book as eligible under the one-time loan restructuring scheme announced by the RBI, however, this would depend on the guidelines from the KV Kamath committee on the implementation of the scheme.

“A rough estimate of what we are seeing is maybe anything around 5-6% of the credit book may be eligible under the restructuring profile,” Rao said, adding “ It will be clear by September end, by which time we will receive the guidelines from Kamath committee as well.”

Of this amount, at least half is expected to come from its corporate loan book.

The bank was open to making the loan restructuring facility open to those facing cash flow issues on account of salary cuts. “We will try to keep the restructuring window open for those who’s future cash flows will be impacted for a few days or years due to salary cuts,” Rao said.

However, this facility will not be provided to wilful defaulters, he added.

According to the results declared on Friday, PNB’s net profits for the quarter ended June stood at Rs 308 crore, as against Rs 1,019 crore reported for the same quarter last year.

The state-owned bank said this was not comparable as it merged with the Oriental Bank of Commerce and United Bank of India from April 1 onward.

On the merger, Rao said there would be no decrease in the 130,000 strong workforce of the amalgamated entity. Only branches with 500 meters of each other would be merged and the extra licenses would be considered to set up branches elsewhere.


Source link

Leave a Reply

Your email address will not be published. Required fields are marked *