Directors Report of Punjab National Bank

Mar 31, 2025

On behalf of the entire team, I am pleased to present the Annual
Report for the Financial Year 2024-25. Financial Year 2024-25
has been a good year in terms of Business growth, asset quality
improvements and profitability.

India''s economic growth in FY 2024-25 has been notable, with
a projected GDP growth 6.5 per cent as per National Statistical
Organization (NSO). Strong rural consumption, increased
government spending, and a revival in private consumption
contributed to the overall growth. However, challenges related to
global trade and industrial performance remain to be addressed.
Key sectors driving this expansion include construction,
trade, and financial services. India''s resilience amidst global
challenges highlights its strong domestic fundamentals and
strategic policy measures.

In FY 2024-25, the Indian banking sector demonstrated strong
performance, with healthy credit growth, improved asset quality,
and increased profitability. The Bank could perform as per
expectations and delivered commendable growth during the
year, strengthening its foothold in the industry. The Bank raised
Rs. 5000 Crore of equity capital through Qualified Institutional
Placements during FY 2024-25.

In business terms, the Bank surpassed the business of Rs.26.83
Lakh Crore as on 31^st March, 2025 recording a quantum
increase of Rs.3.30 Lakh Crore over the previous year.

As on 31^st March, 2025, Global Deposits stood at Rs. 15.67
Lakh Crore registering the growth of 14.4 per cent on year on
year basis. Domestic Depsoits grew by 13.3 per cent to reach
Rs. 15.11 Lakh Crore.

As on 31^st March, 2025, Global Advances stood at Rs.11.17
Lakh Crore registering the growth of 13.6 per cent. Domestic
Advances registered the growth of 13.1 per cent and stood at
Rs.10.66 Lakh Crore.

Amongst Advances, Retail, Agriculture and MSME (RAM)
Advances registered the growth of 15.9 per cent. Under Retail
Segment, Housing Loan, Vehicle Loan and Personal Loan
exhibited the growth of 18.3 per cent, 25.5 per cent and 10.5
per cent respectively year on year basis¹.

Asset quality of the Bank improved during the year through
adoption of robust recovery and enhanced underwriting
standards. The Bank''s GNPA per cent declined to 3.95 per cent
as on 31^st March, 2025 from 5.73 per cent as on 31^st March,
2024. Net NPA per cent also went down to 0.40 per cent as on
31^st March, 2025 from 0.73 per cent as on 31^st March, 2024.
Provision Coverage Ratio including Technical Write Off (TWO)
of the Bank improved to 96.82 per cent as on 31^st March, 2025
from 95.39 per cent as on 31^st March, 2024.

On the digital front, the Bank performed remarkably by coming
out with more than 130 products, processes and portals.

Apart from digital thrust, development under Human Resource
Transformation also remained at the forefront and UDAAN
project continued to evolve with capacity building and coming
out with digital Performance management system.

“Against this backdrop, your Board of Directors have pleasure in
presenting the Annual Report of the Bank for the year ended 31^st March,
2025 (FY 2024-25) along with its audited Annual Financial Statements".

I. FINANCIAL PERFORMANCE AS ON 31^s1 March, 2025

1. Topline

a. Global Business stood at Rs. 26,83,260 Crore
as on 31^st March, 2025 vis-a-vis Rs. 23,53,038
Crore as on 31^st March, 2024, registering year
on year growth of 14.0 per cent.

b. Global Deposits stood at Rs.15,66,623 Crore
as on 31^st March, 2025 as against Rs.13,69,713
Crore as on 31^st March, 2024, showing the year
on year growth of 14.4 per cent.

c. CASA Deposits was at Rs.5,73,543 Crore as
on 31^st March, 2025 as against Rs.5,52,449
Crore as on 31^st March, 2024.

i. Current Deposits was at Rs. 75,114 Crore
as on 31^st March, 2025.

ii. Savings Deposits was at Rs.4,98,429

Crore as on 31^st March, 2025.

d. Global Advances stood at Rs.11,16,637 Crore
as on 31^st March, 2025 against Rs. 9,83,325
Crore as on 31^st March 2024, recording the
growth of 13.6 per cent on year on year basis.

e. Retail Advances was at Rs.2,59,363 Crore as
on 31^st March, 2025 as against Rs. 2,22,574
Crore as on 31^st March, 2024, registering the
year on year growth of 16.5 per cent.

f. Agriculture Advances was at Rs. 1,80,625
Crore as on 31^st March, 2025 as against
Rs.1,58,188 Crore as on 31^st March, 2024,
showing the year on year growth of 14.2 per

cent

g. MSME Advances was at Rs. 1,62,693 Crore
as on 31^st March, 2025 as against Rs.1,39,288
Crore as on 31^st March, 2024 showing the
growth of 16.8 per cent.

h. Retail Agriculture MSME (RAM) Advances

was at Rs.6,02,682 Crore as on 31^st March,
2025 vis-a-vis Rs.5,20,050 Crore as on 31^st

March, 2024 showing the year on year growth of
15.9 per cent.

i. Share of RAM w.r.t. Domestic Advances

was at 56.5 per cent as on 31^st March, 2025 as
against 55.2 per cent as on 31^st March, 2024.

2. Bottom Line

a. Operating Profit of the Bank was at Rs. 26,831
Crore in FY 2024-25 showing year on year
growth of 7.6 per cent.

b. Net Profit of the Bank was at Rs. 16,630 Crore
in FY 2024-25 showing year on year growth of
101.7 per cent.

c. Net Interest Income was at Rs. 42,782 Crore
in FY 2024-25 vis-a-vis Rs. 40,083 Crore in FY
2023-24, registering the growth of 6.7 per cent on
year on year basis.

3. Asset Quality

a. Gross NPA of the Bank stood at Rs. 44,082
Crore as on 31^st March, 2025, reduced from the
level of Rs. 56,343 Crore as on 31^st March, 2024.

b. Gross NPA % exhibited decline of 178 bps from
a level of 5.73 per cent as on 31^st March, 2024
and stood at 3.95 per cent as on 31^st March,
2025.

c. Net NPA of the Bank reduced to Rs.4,291 Crore
as on 31^st March, 2025 from Rs.6,799 Crore as
on 31^st March, 2024.

d. Net NPA % improved by 33 bps and stood at
0.40 per cent as on 31^st March, 2025.

e. Provision Coverage Ratio (PCR) including
TWO increased by 143 bps to 96.82 per cent as
on 31^st March, 2025.

f. Provision Coverage Ratio (PCR) excluding
TWO increased by 234 bps to 90.27 per cent as
on 31^st March, 2025.

4. Key Ratios (Global)

a. Net Interest Margin stood at 2.93 per cent in
FY 2024-25.

b. Cost of Deposits was 5.23 per cent in
FY 2024-25.

c. Yield on Advances stood at 8.34 per cent in
FY 2024-25.

d. Yield on Investment increased to 6.99 per cent
in FY 2024-25.

e. Return on Assets improved to 0.97 per cent in
FY 2024-25 from 0.54 per cent in FY 2023-24.

f. Business Per Employee improved to Rs.26.86
Crore as on 31^st March, 2025 from Rs.23.84
Crore as on 31^st March, 2024.

g. Business Per Branch improved to Rs.253.55
Crore as on 31^st March, 2025 from Rs.225.25
Crore as on 31^st March, 2024.

5. Capital Position

The Capital Adequacy of the Bank improved during
the financial year due to improved profitability as well
as on account of capital raising. During FY 2024-25,
Bank raised Rs. 8,000 Crore of capital.

Under Tier I, Rs. 5,000 Crore (Equity Capital) were
raised via., Qualified Institutional Placement (QIP)
and Rs. 3,000 Crore through Tier II Bonds. The
Bank will continue to focus on growth in Business on
sustainable basis. The Bank has adequate capital
base to meet the growing credit demand of the
economy.

The Capital Adequacy Ratio of the Bank recorded
increase by 104 bps to reach at 17.01 per cent, as of
31^st March, 2025, with Common Equity Tier-1 (CET-1)
at 12.33 per cent and AT-1 capital at 1.72 per cent.

Due to Qualified Institutional Placement
(QIP), the total number of shares increased from
1101.10 Crore to 1149.29 Crore with Government of
India shareholding remaining above 70 per cent as
on 31^st March, 2025.

6. Compliance Culture

a. Compliance Function activities are managed
by dedicated officials at Head Office, Zonal
Compliance Officers at Zonal Offices and Circle
Compliance Officers at Circle Offices.

b. New Initiatives: ''Integrated Compliance
Tool'' developed to meet RBI''s requirements
of implementing comprehensive, integrated,
enterprise-wide and workflow-based solutions/
tool to enhance the effectiveness of Internal
Compliance Monitoring Function by automating
all the compliance activities and integrating it on
single platform.

1. Key Digital Initiatives & Achievements

In FY2024-25, PNB continued to embrace digitalization
and emerged as a frontrunner in the domain of digital
banking services. The Mobile Banking Services and
Internet Banking Services now have 250 features,
catering to diverse customer needs and preferences.
Additionally, the Bank launched a mobile banking
application for corporate customers on 12.09.2024,
which is enriched with 150 features.

Towards customers /borrowers convenience, the
Bank has launched following digital lending journeys:

a. Digital Education Loan: A web and tab-based
journey named ''PNB Pratibha'' for both existing
and new customers made live on 12.04.2024.

b. Digital Vehicle Loan: Offered to the bank''s
Existing to Bank (ETB) and New to Bank (NTB)
customers. It was made live on 12.04.2024.

c. e-PM Vishwakarma Scheme: The Bank was
the first bank to launch this scheme in digital
mode and was made live on 05.07.2024.

d. PM Vidyalaxmi: It is a Government Scheme to
financial support to meritorious students so that
financial constraints do not prevent any youth
of India from pursuing quality higher education.
The scheme was launched on 6^th November,
2024 and portal was launched on 25^th February,
2025.

e. DIGI MSME Loan includes New-to-Bank (NTB)
customers along with Existing to Bank (ETB)
customers, with a maximum loan amount of
Rs.25.00 Lakh, effective from 13.12.2024.

f. GST Express Working Capital for New to
Bank (NTB) customers was made live on
28.02.2025.

Further, to cater to the evolving needs of tech-savvy
customers, the Bank launched WhatsApp Banking
with an initial offering of 5 features. Now, it is having
80 services. During FY 2024-25, several major new
functionalities have been introduced and are available
through WhatsApp Banking including:

a. Public Provident Fund (PPF) & Sukanya
Samridhi Yojana (SSY) balance check

b. Account & Deposit Summary

c. Applying for a Debit Card & Generating Green
PIN OTP

d. Disabling Debit Card & Reducing Debit Card
limits

e. Opening Fixed Deposits

f. Updating email addresses

g. Changing account schemes

h. Submitting Form 15 G/H

The following journeys have been made live on the

Digital Business Platform (DBP):

a. Digital Journey of Self Help Group (SHG)

b. Online Public Provident Fund (ETB & NTB)
account opening

c. New to Bank (NTB) e-Mudra

d. Online Savings Account opening-DIY journey

2. Key Structural Transformations

a. Operational Resilience Command Centre
(ORCC): ORCC has been established at
Head Office for real time monitoring of Banks
critical applications for end-to-end oversight of
applications through dashboard.

b. Formation of Transaction Monitoring

Division (TMD): TMD has been established for
monitoring of transactions at centralized level
with comprehensive approach and to prevent the
frauds.

c. Bank''s Training Structure: Training structure of
Bank revamped for establishing four Advanced
Learning Institutes (ALI) at Delhi, Lucknow, Noida
& Panchkula and re-designing the Learning &
Knowledge Management Centre (LKMC) to the
Centre for Learning & Innovation (CLI) in order
to enhance employee competencies, promote
continuous learning, and maintain a competitive
edge by providing specialized and role-based
training programs.

d. Software Development Cell (SDC) at
^Bengaluru: To facilitate collaboration between

the Bank & Reserve Bank Innovation Hub
(RBIH), Software Development cell at Bengaluru
has been established. This will facilitate
innovation in banking technology and exploring
new possibilities in digital banking & financial

ser.ice;.

e. Centralized Procurement & Partnership
Division (CPPD): The CPPD aims to centralize
and streamline the Bank''s procurement
processes, covering all IT and Non-IT related
procurements. This division is responsible for
ensuring efficient procurement system through
tenders/Request for Proposal (RFPs) or any other
procurement modes, enhancing partnership/
vendor management, optimizing cost efficiencies,
vendor payment & reconciliation and monitoring
of overall procurement function of bank.

f. Data Privacy & Management Division (DPMD):

In accordance with the recommendations of the
Indian Banks'' Association (IBA), DPMD has been
formed for overseeing data quality and customer
data privacy.

g. RAM Initiatives Division at Head Office:

Retail, Agriculture and MSME (RAM) & Financial
Inclusion (FI) Structure has been revamped to
prioritize Retail, Agriculture & MSME lending by
way of formation of RAM Initiative Division,
which consists of Co-lending & Pool Cell,
Financial Supply Management Cell (FSCM)
and Lead Monitoring & Data Management Cell
for augmentation of Bank''s Business.

h. A dedicated Self Help Group (SHG) Monitoring
Cell under Agriculture Division, Head office has
been established with a targeted approach to
focus on lending under Self Help Group (SHG)
segment.

i. ESG/Sustainability Cell at Head Office: ESG/
Sustainability Cell has been established to
enhance long term sustainability opportunities
and to focus on green financing business.

3. Project UDAAN- Transformation to excel and lead

Under the UDAAN project, PNB embarked on a digital

HR transformation journey, achieving the following:

a. Digital Performance Monitoring System
(PMS): Towards transformation of the
appraisal process for officers by emphasizing
transparency, efficiency, and alignment with
strategic objectives. A structured and streamlined
approach has been introduced for performance
evaluation, incorporating methods to define
job roles clearly, set measurable targets, and
monitor progress effectively.

This initiative is aimed at enhancing the overall
efficiency of performance management. It
marks a significant step forward in modernizing
appraisal systems for greater fairness, visibility,
and impact.

b. Capability Building: A comprehensive
Capability Building Framework introduced to
enhance workforce proficiency and adaptability
in an evolving banking landscape. This initiative
is strategically aligned with organizational
objectives, promoting operational efficiency and
sustainable growth through the development of
human capital.

The framework encompasses key advancements,
including structured career development plans,
data-driven succession planning for critical
roles, and leadership development programs
targeting key competencies. The digitalization
of processes such as training, onboarding,
and postings has improved transparency and
streamlined operations.

c. Workforce Development and Optimization:

Other than above, the Bank introduced several
initiatives to strengthen workforce management
and operational planning. These efforts focused
on creating an all-inclusive framework for
employee development, streamlining recruitment
processes, and optimizing manpower allocation.

These measures have not only fostered a culture
of continuous improvement and accountability
but have also strengthened the bank''s ability to
manage its workforce effectively.

d. Implementation of Reward and Recognition
Framework: The Bank has reviewed its existing
rewards & recognition schemes/processes and
has redesigned the framework to identify high
performers and motivate them toward excellence
in their roles.

A digital rewards and recognition platform has
also been developed to objectively recognize
achievements and launch campaigns aimed at
improving business performance.

e. Creation of next-generation talent pool:

Towards cultivating a next-generation talent
pool equipped with market-ready competencies
and ensuring the Bank''s sustained competitive
advantage, 26 skills have been identified to
cover all banking activities.

These skills are divided into current (existing
skills) and future (Next Gen skills) categories.
Furthermore, these skills are subdivided into a
total of 138 unique sub-skills. Each of these sub¬
skills has been meticulously mapped to specific
job roles, ensuring relevance to operational and
strategic needs.

By leveraging this structured approach, the Bank
aims to foster innovation, enhance productivity,
and adapt proactively to emerging industry
trends. This initiative underscores the Bank''s
commitment to talent development as a key
enabler of sustainable growth.

f. Revamping of Learning and Development
(L&D) practices and processes:

The Bank successfully transformed its Learning
and Development (L&D) practices and processes
to create a superior ecosystem for growth and
capability enhancement. Amongst notable
accomplishments included benchmarking with
Centers of Excellence (CoE) from prominent
banks, developing and finalizing SOPs for
streamlined processes, completing L&D talent
gap analysis, and selection of officers for faculty
positions at Advances Leaning Institutes (ALIs)
and Staff Training Centres (STCs). Themes
aligned with job families were mapped to
physical CoEs.

A Next Gen Learning Management System
(LMS) deployed to digitize training operations,
and a Learning & Development (L&D) tool has
been developed to enable tailored training and
assess effectiveness. Learning Dashboard
on the Udaan Portal centralizes the training
journey of officers, seamlessly integrating with
PNB UNIV and HRMS for a two-way flow of
information. The revamping of ALI Delhi was
completed, reinforcing the Bank''s commitment
to fostering a culture of continuous learning and

excellence

g. Manpower Audit: In alignment with the Bank''s
^strategic priorities under the UDAAN project,

a comprehensive manpower audit has been
concluded in second year of project UDAAN. The
audit was conducted by Willis Towers Watson
(WTW) India Private Ltd. WTW submitted
a detailed review report mentioning “No
Discrepancies were found”. The report covers all

offices whose manpower was assessed through
Manpower Assessment Tools developed under
the project “UDAAN”.

4. DIVIDEND

The Board of Directors of the Bank has recommended
a dividend of Rs.2.90 per equity share (145 per cent)
of face value of Rs.2/- each for FY 2024-25, subject
to approval of the shareholders at the 24^th Annual
General Meeting of the Bank.

III. ASSET QUALITY

The Bank was able to reduce Gross NPA from the level
of Rs. 56,343 Crore as on 31^st March, 2024 to Rs. 44,082
Crore as on 31^st March, 2025. Net NPA reduced to
Rs. 4,291 Crore as on 31^st March, 2025 from Rs. 6,799
Crore as on 31^st March, 2024. Focus on asset quality
continues to be one of the topmost priorities for the Bank.
Provision Coverage Ratio (PCR) including TWO is was at
96.82 per cent as on 31^st March, 2025.

1. Recovery & Upgradation: Total Recovery stood at
Rs. 14,336 Crore for FY 2024-25. Of this, Total Cash
Recovery and upgradation stood at Rs. 6,864 Crore.
Rs. 7,472 Crore was recovered in Technical Write Off
Accounts (TWO) and Recorded Interest (RI) in FY
2024-25.

2. Upgradation through Resolution Mechanism:

The Resolution Cell was created to deal exclusively
with restructuring/resolution of NPA accounts and
recovery in National Company Law Tribunal (NCLT)
cases. The details regarding the same is as under:

Restructured Accounts (Amount in Rs. Crore)
	Total Sanctioned
	No. of A/c''s ^	Amount
FY 2024-25	02	147.89

Further, a sum of Rs. 2,032 Crore was recovered in NPA
accounts under IBC in NCLT.

3. Mega e-Auctions: During FY 2024-25, 11,296
properties were uploaded on e-Bikray portal. Out of
which, 1952 Immovable Properties (IPs) were auctioned
successfully.

4. Sale of Assets to Asset Reconstruction Company
(ARC)/National Asset Reconstruction Company
Ltd (NARCL): Details of financial assets sold to
ARCs/NARCL is as under:

Items		FY 2024-25
i.	Number of Accounts sold to ARCs/ NARCL	7
ii.	Book Outstanding of Accounts sold	1134
iii.	Aggregate Consideration received	863

5. Initiatives taken to improve Asset Quality during

FY 2024-25

a. Time bound action under SARFAESI initiated
for taking symbolic/physical possession of
the property and ensuring that all the eligible
properties are put on auction invariably. Proper
publicity of properties was also done for making
e-Auction successful.

b. Popularization of OTS/e-OTS schemes of the
Bank and organization of regular recovery
camps at frequent intervals during the year.
Regular monitoring of OTS proposals at Head
Office for reducing the Turn Around Time (TAT)
& improving/achieving recovery budgets.

c. Promoted the use of SAMARTH portal which
brings all recovery actions on one platform and
comprehensive quantitative analysis is done to
maximize recovery in NPA Accounts.

d. The Bank has also launched campaign
for recovery in NPA for specific segments.
Campaigns to resolve small value accounts and
housing loan was also launched during the year.

e. Initiated CIRP and PIRP in eligible corporate
cases having balance o/s greater than Rs.1
Crore.

f. Regular review of recovery agencies/resolution
agents/supporting agents of the Bank in a
quarter.

g. Active participation in Lok-Adalat was ensured
alongwith continuous monitoring of DRT cases
for vacation of stay and early resolution.

h. Explored ARC sale wherever resolution was not
forthcoming.

IV. GROWING DIGITALISATION

The fusion of technology and banking has revolutionized
the way the Bank is operating. From Mobile Applications to
Artificial Intelligence, the Bank is effectively utilizing them
for bringing convenience to our customers.

S. No	Parameters (in Crore)	As on 31.03.24	As on 31.03.25	Gr% (YoY)
1	No. of Internet Banking Users	4.23	4.42	4.5
2	PNB ONE Activated users	1.73	2.14	23.7
S. No	Parameters (in Crore)	FY 2023-24	FY 2024-25	Gr% (YoY)
1	No. of Digital Transactions	659	997	51.4
2	UPI Transactions	623	963	69.8

The Bank, during FY 2024-25 took up various digital
initiatives towards business growth and customer
convenience:

1. Incorporation of Solar Roof Top scheme
in JanSamarth Portal through Application
Programming Interface (API) Integration: A new API

Integration has been developed with JanSamarth Portal
of the Government for providing loan under PM Surya
Ghar Yojana.

2. Gram Panchayat API Integration (MP Government):

API integration between Bank and National Informatics
Centre (NIC) has been developed for Gram Panchayat
(MP) for fetching UPI transactions. In this project
Management Information System (MIS) data of UPI
transactions in the account of Gram Panchayat provided
by bank can be uploaded on the Panchayat Darpan
Portal without manual intervention.

3. IFMS Odisha Online and OTC Payment-API
Integration: Collection of Odisha treasury challans
(Online and OTC Mode).

4. INSPREM-API Integration: Collection of Insurance
Premium from Partner Insurance Company (Bajaj

Aiiiance,

5. Bharat Aadhaar Seeding Enabler (BASE)-API
Integration: BASE is the interface between various
channels through which Aadhaar seeding request can
be raised, NPCI mapper and the banks. The platform
will use various APIs for the eco system to communicate
online/offline for seeding requests.

6. Sending an SMS to customers on marking of
delivery of Cheque-Books in CBS which are
undelivered and returned to branch: Changes made
for personalized Cheque Book in CBS such that while
marking delivery of Cheque Book undelivered in CBS,
system is automatically sending the SMS to customers
at their registered mobile number

7. Various Services Made Live through WhatsApp

Banking

a. WhatsApp Banking (TDS Certificate, Interest
Certificate, etc.): New features added in the
currently running WhatsApp banking which
includes providing TDS cum Interest Certificate
to on-boarded customers, providing provisional
and final interest certificate for Housing Loan and
Education Loan, etc.

b. WhatsApp Banking Pre-Approved Offers:

Various Pre-approved offers for individual
customers can be viewed by customers through
specific menu in WhatsApp Banking.

8. National Cyber Crime Reporting Portal (NCCRP) API-
Suspect Registry: Cyber Fraud Mitigation Centre has
been established at the Indian Cyber Crime Coordination
Centre (14C) in New Delhi with representatives of major
banks, Financial Intermediaries, Payment Aggregators,
Telecom Service Providers, IT Intermediaries and
States/UTs Law Enforcement Agencies (LEAs). It
aims to take immediate action and ensure seamless
cooperation to tackle online financial crimes. As part of
this initiative, a Suspect Registry of various identifiers
is being created based on NCCRP managed by I4C,
in collaboration with PNB for strengthening fraud risk
management capabilities of financial ecosystem.

9. WhatsApp Banking RRB 1.0: Implementation of
WhatsApp Banking for Regional Rural Banks (RRBs).

10. PNB Hackathon: PNB initiated Hackathon in
collaboration with reputed Educational Institute where a
portal was developed and teams from all over India can
register and submit projects related to Cybersecurity.

11. e-NACH Mandate: National Payment Corporation of
India (NPCI) envisaged to simplify the online registration
of NACH mandates to improve customer experience
and drive digitization. e-mandates will be self-verified
by the customer online using one of the following new
options:

• Aadhaar Number (without UIDAI authentication).

• Permanent Account Number (PAN)

• Customer ID (of customer with destination bank)

The Bank will validate one of the above parameters with
the operative account linked with it. Thereafter, OTP
verification will be done to verify the e-Mandate apart
from other existing business rules. This workflow will be
applicable for mandate of amount up to Rs. 15,000/- per

mandate

The following additional facilities have been given to our

retail borrowers through e-Mandate:

• Amend: Allows the issuer of the mandate to
make changes in the mandate subject to certain
conditions.

• Cancel: Bank customer can cancel the mandate if
account in PNB is closed by the customer.

• Suspend & Revoke: Customer can suspend
a mandate and revoke suspension whenever
required.

V. ANALYTICS CENTRE OF EXCELLENCE (ACoE)

The Analytics Centre of Excellence (ACoE) is a specialized
vertical within the Bank entrusted with the development
of reports, MIS support, and AI/ML-based solutions
(including Gen AI). It plays a pivotal role in driving data-
driven decision-making and digital transformation across
the organization.

In addition to reporting and analytics, ACoE is responsible
for managing several applications and regulatory data
submissions, including:

• CIC Module (Bureau One)

• Data submission to Credit Information Companies

(CICs)

• Central Registry of Securitization Asset Reconstruction

and Security Interest of India (CERSAI)

• National e-Governance Services Ltd (NeSL)

• RBS, CIMS, Data Aggregator/Account Aggregator

• PNB 360 application dashboard

• Enterprise-Wide Data Warehouse (EDW)

• Funnel for the Digital Journeys.

1. Enterprise-Wide Data Warehouse (EDW):

• Central repository of summarized data from
different internal operational systems and external

sources

• Single Source of information having integration
with Bank''s 65 source systems.

• Providing more than 1650 reports covering all¬
business needs across banks verticals.

• Pushing data to more than 35 downstream
applications like OSS, CAML etc.

Established in 2018, the Data Analytics Cell at
Analytical Centre of Excellence (ACoE) was created
to build in-house capabilities in the domain of
Artificial Intelligence and Machine Learning. The
team operates across three strategic verticals:
Business, Control, and Support, with the following
objectives:

• Enhancing value creation

• Driving cross-sell and up-sell opportunities

• Increasing revenue and optimizing costs

• Strengthening product offerings and delivery
channels

• Expanding the Bank''s digital footprint

• Improving risk profiling for both existing and
prospective customers

• Fulfilling analytics-related mandates under the
EASE reforms

The team identifies high-propensity leads by
analyzing customer behavior using parameters such
as demographics, investment profile, relationship with
the Bank, transaction patterns, geographic presence,
digital activity, and product usage.

3. New Initiatives

a. Value Creation using unstructured data: To explore
the capabilities and data insights by conversion
of unstructured data into structured one, below
mentioned use cases have been developed in house
with available tools on pilot basis.

i. Dashboard for Branch reviews on Google:

This online dashboard aggregates and analyzes
branch feedback from Google Reviews and
other online sources, offering PNB employees a
comprehensive view. It includes branch reviews,
sentiment analysis, and another dashboard
regarding financial news insights and the news
sentiment. ensuring employees can quickly
gauge customer sentiments and industry trends.

ii. News Insight: Bank''s corporate website
provides link (https://pnbinsightx.pnb.in/) for
public to access the latest finance-related news,
keeping them -well-informed about industry
trends and developments.

b. GEN AI based use cases: Circular Summarization
and Synthetic Audio Generation: summarize daily
important circulars and generate pdf and audio file
and the same is sent to employee''s email.

c. Statement analyzer: The team has revamped the
analyzer to have better understanding of customer
spending earning and investment behavior to help
Bank make credit decision for individual customers.

d. Transaction based lead generation for HL, VL
and Education: Based on the transaction initiated
by the customers to Vehicle dealers, Builders and
reputed education institutes are used for pitching of
the Bank''s product.

e. Mule Hunter in co-ordination with RBiH: The model
is deployed for saving account for early identification
of accounts being used as mule.

4. Other Key Highlights

a. Account Aggregator & Data Aggregation and
Analytical Services (DAAS): With the fast-paced
lifestyle the customers are having, it has become
pertinent that that the flow of the information for credit
appraisal can be done digitally.

Keeping customer centricity in focus the Bank has
been extensively using “Account Aggregator &
Data Aggregation and Analytical Services” for

accessing the account statement alongwith other
services like Income Tax Return (ITR), Import Export
Code (IEC), Udyam Registration, Bank Statement
Analysis, Vehicle Data Verification, etc. Some of
journeys where these are consumed are below:

• Digital Home Loan (DIGI HL),

• New-to-Bank Personal Loan (NTB PL),

• Digital Car Loan (DIGI CL),

• PNBONE

• ^-"NTB Mudra

• NTB PABL

• DIY Credit Card.

b. PNB 360 and Customer 360 Dashboards: The

Analytics Centre of Excellence (ACoE) has developed
the in-house “PNB 360” dashboard to fast-track data
accessibility where in dashboards are available to

support business monitoring and enables faster,
more informed decision-making. The integrated “Visit
Module” also digitizes branch visit tracking by zonal
and circle officials.

In addition, the “Customer 360” dashboard offers
a consolidated view of high-value customer data,
currently accessible in view-only mode for Central
and State Government departments, PSUs, and
Single Nodal Agency (SNA) accounts. Customers
can download reports in PDF or Excel formats.
The dashboard provides visual summaries of fund
positions, fund movements, interest earned, TDS
deductions, facilities availed, and comparisons over
quarters and financial years on a T 1 basis.

c. Risk-Based Supervision (RBS): The RBS

Portal was developed to automate the end-to-end
submission process for Tranche 1, 2, and 3 data
under Risk-Based Supervision. The portal allows
granular data access, aiding the bank during audits.
ACoE is responsible for the maintenance and data
submission support through the RBS Portal.

d. Centralised Information Management System
(CIMS): CIMS has been instrumental in streamlining
the submission of regulatory returns to the Reserve
Bank of India (RBI). The ACoE team manages this
platform, ensuring timely and accurate regulatory
compliance through centralized data handling.

VI. BRANCH NETWORK

1. Domestic: As on 31^st March, 2025, the number of
domestic branches was at 10,189. The population-
group wise branches along-with the percentage
share are given as under:

2. International: As on 31^st March, 2025, the Bank has
presence in 6 countries with 1 branch at Dubai, 1
branch at GIFT City Gujarat (caters to the international
business of the bank), 2 subsidiaries (London-UK
and Bhutan), 1 joint venture (Nepal), 2 representative
offices (Myanmar and Bangladesh).

As on 31^st March, 2025, the Bank has 259 Authorized
Dealer (AD) branches authorized to handle Foreign
Exchange Business which are routing forex transactions
through 4 Trade Finance Centers (TFCs) functioning
at New Delhi, Chennai, Kolkata & Mumbai. TFCs are
specialized for centralized handling of trade transactions
and International Service Branch (ISB) is specialized for
handling all Inward remittances.

The Bank has 1 Exchange Bureau at Indira Gandhi
International Airport to facilitate encashment of Foreign
Exchange currency notes by foreign tourists/NRIs.

1. Domestic Business

The Bank registered a Foreign Exchange Business
Turnover of Rs.1,50,028 Crore (Exports and Imports
together) for the FY 2024-25.

The Bank has an International Service Branch
(ISB) functioning at New Delhi for handling Inward
Remittances of the Bank as a whole. During FY
2024-25, the Bank handled remittance business of
Rs. 80,527 Crore.

The Bank has Rupee Drawing Arrangements (RDA)
with 8 exchange houses (5 in the Gulf, 1 each in
Singapore, UK and Seychelles) to facilitate remittance
from NRIs.

The Bank also has remittance arrangement under
Money Transfer Service Scheme (MTSS) with Ria
Money Transfer Services Pvt. Ltd.

There is a specialized NRI cell for augmenting NRI
Business, resolution of complaints and Help Desk for
NRI customers.

2. Overseas Business

Overseas Business of the Bank stood at Rs.1,05,877
Crore as on 31^st March, 2025 registering YoY growth
of 37 per cent. The Bank has two international
branches at DIFC Dubai and GIFT City Gandhinagar.
International branches are focusing on High Quality
Medium/ Long term Assets to build a diversified
loan portfolio with low Credit Risk Weight to improve
profitability and remain sustainable.

Both international branches of the Bank are offering
External Commercial Borrowing (ECB), Foreign
Currency Term Loan (FCTL) and Trade Finance
Products to Indian and Overseas customers.

a. NRI Customer Service Centre: To keep up with
the global standards and cater to the needs of
NRIs across the world, NRI Customer Service
Centre (NCSC) has started its operations on
24*7 basis on 23.11.2024.

b. Facility for handling of export documents
without submission of Physical copy through
Trade Finance Redefined Portal (IBPS): A

facility has been provided to customers, wherein,
in case of direct dispatch of export documents
permitted by RBI/Bank, submission of physical
copy of documents has been exempted.

c. New scheme for exporters: A new export credit
scheme-Export Express for MSME customers
was launched with competitive rate of interest,
service charges & exchange margin.

d. The Bank has also opened ten Special Rupee
Vostro Account (SRVA) accounts in Myanmar
and Bangladesh.

e. Multicurrency World Travel Card: The product
has a unique feature of multiple currencies
loaded in a single card. Bank is offering the
cards in 6 foreign currencies.

f. Trade Finance portal for Trade Finance
Products: Exporter and Importer can submit
online all types of trade finance request through
the portal

g. Outward Remittance Facility for Resident
Individuals through IBS & MBS: The Bank
has launched Outward Remittance Facility for
resident individuals for remitting funds under
Liberalised Remittance Scheme (LRS) through
Mobile Banking.

h. 50 branches have been identified as NRI service
branches to increase NRI portfolio.

VIII. BUSINESS DIVERSIFICATION

Insurance Business

1. Life Insurance: The Bank solicits Life Insurance

Business under Corporate Agency Agreement with

the following Life Insurance companies:

a. PNB MetLife India Insurance Co. Ltd (PMLI)

b. Life Insurance Corporation of India (LIC)

During FY 2024-25, income from commission stood

at Rs.358.45 Crore against Rs. 338.24 Crore during

FY 2023-24 showing the YoY growth of 6.0 per cent.

2. Non-Life Insurance: The Bank solicits Non-Life
Insurance Business under Corporate Agency
Agreement with following insurance companies

a. The Oriental Insurance Co. Ltd. (OICL),

b. Bajaj Allianz General Insurance Co. Ltd.
(BAGIC),

c. Cholamandalam MS General Insurance Co. Ltd.
(CHOLA MS),

d. Care Health Insurance Ltd. (CHIL)

e. Star Health & Allied Insurance Co. Ltd. (SHICL).

During FY 2024-25, income from commission is
Rs.113.86 Crore against Rs. 109.69 Crore during FY
2023-24 registering YoY growth of 3.8 per cent.

3. Mutual Funds: The Bank is a distributor of Mutual
Fund products of the Asset Management Companies
namely Sundaram Asset Management Company
Limited, Nippon Life Asset Management Limited, UTI
Asset Management Company Limited, Aditya Birla
Sunlife Asset Management Company Limited, LIC
Mutual Fund Asset Management Limited, DSP Asset
Managers Private Limited and Franklin Templeton
Asset Management (India) Private Limited.

The Bank has partnered with Finwizard Technology
Private Limited (FISDOM) to offer online mutual
fund investment and robo-advisory services to all
its customers. As part of the arrangement, FISDOM
compensates the Bank through a commission on
revenue sharing basis.

During FY 2024-25, income from commission is
Rs.11.27 Crore against Rs. 8.60 Crore during FY
2023-24 showing YoY growth of 31 per cent.

4. Depository Services: The Bank offers Demat
services as a Depository participant of NSDL and
CDSL and trading services through tie-up with four
trading channel partners viz., SMC global Securities
Ltd., Geojit financial Services ltd., Aditya Birla Money
Ltd. and IDBI Capital Market & Securities Ltd.

The Bank is having total 2.19 Lakh Demat account
and 1.02 Lakh trading account as on 31^st March,
2025. Income earned in FY 2024-25 from Depository

ser.ice;. is Rs 6 07 rrore

5. Application Supported by Blocked Amount
(ASBA) & Merchant Banking: The Bank has license
to act as Banker to Issue, Debenture Trustee and
Merchant Banker. During FY 2024-25, 528 number of
issues were handled as against 427 in FY 2023-24.

The amount blocked through ASBA was Rs.1,00,211
Crore in FY 2024-25 against Rs. 45,716 Crore in
FY 2023-24.

During FY 2024-25, income of Rs.2.18 Crore was
earned from ASBA business against Rs.0.78 Crore in
the FY 2023-24.

6. Defense Business: Defense Business Cell (DBC)
is established for strengthening PNB''s banking
business with Indian Armed forces, Paramilitary
and Police forces. During FY 2024-25, the Bank''s
business from Defense Vertical has shown growth
under the heads such as CASA, Term Deposits and
Retail Loans showed the growth of 19.3 per cent,
15.9 per cent and 21.3 per cent respectively.

7. Government Business Vertical (GBV): 21 GBVs
have sourced total new 8,731 Government Accounts;
54,455 new Savings Accounts. GBVs have also
canvassed Retail Loans of Rs.1033 Crore and
Loans & Advances to Government Departments of
Rs. 30,829 Crore were sanctioned.

8. New Initiatives

a. Insurance Business:

i. Telemarketing: Telemarketing service
is now used for new as well as renewal
customers. Earlier the service was used
only for renewal product.

ii. Machine learning: The Bank is working
on AI based machine learning lead for
business growth.

b. Depository & ASBA Business-Discount

brokerage:

i. Bank has launched Single Journey
Demat & trading account opening: In

this Demat account will be opened with
PNB and trading account with trading
channel partner in a seamless journey. The
functionality is live with m/s Aditya Birla
money Ltd in both IBS & MBS.

ii. Bank has launched Lien & trade
product: In this aforesaid facility the client
can enjoy the hassle-free trading facility
up to the amount blocked by them in CBS,
except the upfront cash margin facility. The
amount of fund the client has blocked and
has done trading will only be debited from
their operative linked account at the EOD.
This facility is now live with M/s Aditya Birla
Money Limited.

IX. GOVERNMENT BUSINESS

To take a more proactive role in facilitating fund transfers
from the Centre and States to beneficiaries, the Bank has
set up an exclusive Government Business Department
(GBD). It manages various functions, including pension
processing and disbursement, government small
savings schemes, direct and indirect tax collections, and
currency chest operations. Additionally, the Bank serves
as an accredited banker for nine Central Government
departments and continues to strengthen its collaborations
with State Governments to address their specific financial
needs.

Key Initiatives taken up under Government Business
are as under:

1. The Bank is disbursing pension of approximately
6.15 lakh pensioners i.e. Central Government,
Defense, Railways, Telecom and State Government.

2. National Pension System (NPS): All the Branches
are enabled for NPS transactions. Online facilities for
NPS Registration and Contribution is also available
through website (https://www.pnbindia.in/nps.html)
as well as PNB ONE App. Total number of NPS
subscribers associated as on 31^st March, 2025 is
1,30,685. The Bank is also providing NPS facilities to
27 corporates under Corporate Model.

3. Govt. e-Market Place (GeM): The Bank is providing
the facilities of GPA (GeM Pool Account), e-PBG
(Performance Bank Guarantee) & e-EMD (Earnest
Money Deposit) on Government e-Marketplace to
sellers and purchasers.

4. Public Financial Management System (PFMS):

The Bank has timely disbursed funds of Rs.1671
Crore to about 84 Lakh beneficiaries under PM Kisan
Samman Nidhi through PFMS.

5. Through active marketing, 43,091 PPF, 61,438 SSA
and 71,888 Senior Citizen Savings Accounts were
opened during the FY 2024-25.

6. Integration with various states and collecting online
and offline taxes through their Cyber Treasury Portal.
Collection of VAT is being done in 19 States.

7. Collection of taxes (Direct & Indirect) is being done
through offline and online modes on PAN India Basis.
The Bank is one of the major collectors of taxes for
Central & State Government.

8. PNB Sahayak Portal was launched on 7^th November,
2024 having following functionalities for pensioners:

a) Pension slip and Form 16 through PNB
Corporate website.

b) New EPPO implementation for Civil, Railway
and Defence pensioners.

c) Life Certificate (LC) Status.

d) 6^th and 7^th Central Pay Commission (CPC)
revision.

e) Pension related Frequently Asked Questions
(FAQs) etc.

9. NPS Vatsalya: A saving cum pension scheme
regulated and administered by the PFRDA was
launched for all minor citizens (age below 18 years)
with minimum contribution of Rs.1000/- and there is
no maximum limit.

X. TREASURY OPERATIONS

The Bank''s Gross Domestic Investments stood at
Rs.4,92,305 Crore as on 31^st March, 2025 registering YoY
growth of 16.3 per cent.

1. Overview of System liquidity: In FY 2024-25, the
Indian banking system on an average experienced
surplus liquidity in H1 FY 2024-25. However, it
subsequently turned deficit to as high as Rs.3 Lakh
Crore in H2 FY 2024-25 as RBI sold dollars amid
persistent FII selling in domestic equity market. To
ease the liquidity RBI has taken initiatives such as
Cash Reserve Ratio (CRR) cut by 50 bps, Open
Market Operations (OMO) purchases, daily & long
term Variable Repo Operations (VRR) and USD INR
buy-sell swaps. As a result of which, liquidity situation
gradually improved and ended the financial year
2024-25 in surplus.

2. Fixed Income (SLR/NSLR): The 10 Year benchmark
yield eased by 48 bps from 7.06 per cent as on 31^st
March, 2024 to 6.58 per cent as on 31^st March, 2025
due to increased inflows from inclusion of Government
Securities in JP Morgan Emerging Market Bond Index
and initiation of the Regulator''s rate cutting cycle in
order to support growth. The RBI reduced policy
rate by 25 bps in February 2025 to 6.25 per cent as
inflation eased

The 10-year AAA (Public Sector Undertakings (PSUs)
& Financial Institutions (FIs) & Banks) eased from
7.40 per cent as on 31^st March, 2024 to 7.10 per cent
as on 31^st March, 2025 amidst liquidity improvement
and inflation coming in the RBI target band of 2-6 per
cent.

3. Equity: Equity Market registered its worst monthly
run in 29 years since 1996, extending losses for five
straight months from October 2024-Februaray 2025.
The S&P BSE Sensex closed at 77,414.92, while the
Nifty 50 closed at 23,519.35 on 31^st March, 2025.
Over the past one year, the S&P BSE Sensex gained
5.11 per cent while the Nifty 50 surged by 5.34 per
cent.

4. Forex: The Indian Rupee ended FY 2024-25 at
85.47, registering a fall of 2.48 per cent against the
US dollar.

Likely RBI interventions in different segments of the
foreign exchange market amid continued outflows
made Indian Rupee as one of the most stable
currencies in Calendar Year (CY) 2024.This, however,
resulted in a significant drawdown in forex reserves.

After Trump''s Presidential victory in November 2024,
rupee depreciated to a low of 87.95 in February
2025 amid stronger dollar and persistent Foreign
Institutional Investors (FII) selling from domestic
equities. Notably, the sharper depreciation of the
Indian Rupee by approximately 1.34 per cent in
December 2024 over November 2024 indicates RBI''s
increasing tolerance towards the strengthening of the
dollar amidst tight liquidity till mid-March 2025 in the
domestic banking system and increased volatility in
global markets.

All the major currencies remained volatile amidst
growing geopolitical uncertainties and Trump''s
reciprocal tariff.

XI. CUSTOMER CARE

Customer Service is a business approach that places
the customer at the center of all banking operations and
decisions. It involves tailoring products, services, and
processes to meet the specific needs and preferences of the
bank''s customers. The Bank fully realizes the importance
of customer service and continues to lay utmost priority to
render prompt and efficient service to customers.

The primary responsibility of the Bank is to ensure that
all the grievances directed towards Bank through various
channels like Contact Centre, Post, Email, Centralized
Public Grievance Redress and Monitoring System
(CPGRAMS), Integrated Grievance Redressal

Mechanism (INGRAM), Internet Banking, Mobile Banking,
Website, Social Media, e-mail to MD & CEO, Reserve Bank
of India (RBI), various ministries/forums etc. are entered in
the Online Grievance Portal (CGRMS/CRM) of the Bank.
These complaints are dealt strictly in accordance with
Bank''s Grievance Redressal Policy.

For faster resolution of complaints, the Bank has designated
Chief Customer Executive Officer (CCEO) with the rank
of Dy. General Manager at Zonal Offices (ZOs) and Chief
Manager at Circle Offices who can be approached by the
customers for redressal of their grievances. The contact
details of CCEOs have also been displayed at Bank''s
website.

Customer Service Committees are present in all branches
and Circle Offices to assess the quality of customer
service. These committees meet on monthly basis and
provide platform for staff and customers to engage in open
discussions about service-related issues. These committees
review feedback and suggest improvements for fostering a
better customer experience.

The Bank also has a monthly magazine “Customer
Speaks” in which selected complaints filed by customers
and the action taken/resolution provided to the complainants
are published. We also mention in the magazine about
the appreciation letters received from the customers
appreciating the service of officials of the Bank.

Apart from Theme Based Meetings which are conducted
at monthly intervals in branches on a pre-decided date,
the Bank also conducts Customer Satisfaction Surveys
and take suitable measures based on feedback for better
customer service.

Customer Service Agents (CSAs) at the Call Centre
undergo regular training sessions to enhance their ability
to handle customer calls efficiently. These sessions ensure
they provide accurate and up-to-date information about
products and services, enabling them to effectively resolve
even the minor customer concerns.

The Bank has State-Of-The-Art Primary Contact Centers
at Gurugram and Noida to provide tele-banking services
to its customers on 24 x 7 x 365 basis through two leading
Service Providers. In addition to these two Primary Sites,
the Bank has also established two Secondary Contact
Centers at Dehradun and Bhopal to provide tele-banking
services to its customers in 13 languages.

There are two online portals i.e., CGRMS Portal and
Contact Centre''s CRM Portal. The nature of complaints
received at CGRMS Portal and CRM Portal are largely Non¬
Digital & Digital transaction related respectively.

A total of 16,80,324 complaints were received during the
FY 2024-25, out of which 5,40,494 complaints were resolved
within T 1 days of its receipt. As such, these have not been
treated as complaints in terms of RBI guidelines.

Therefore, the total number of reported complaints
received during the FY 2024-25 is 11,39,830. The details of
complaints received and disposed during FY 2024-25 is as
follows:

Particular	Count*
Number of complaints pending at beginning of the Year	32,351
Number of complaints received during the Year	11,39,830
Number of complaints disposed during the Year	11,43,326
Number of complaints pending at the end of the Year	28,855

Initiatives undertaken during the year for improvement
in customer service

1. Chat with live agent facility introduced to provide latest
information about new/existing service of the Bank.

2. The reward and motivation programme for customer
experience has been developed to track performance
on customer service experience and to reward eligible
branch to foster better customer service at the field
level.

3. To facilitate Divyangjan Customers, facility of booking
time slot was introduced in advance through contact
center for availing services in the branch.

4. Functionality for capturing Customer''s feedback
through Branch has been developed and it has
been integrated with single Digital Platform called
Customer Feedback Portal. This new QR Code
based functionality enables Branches to capture walk
in Customer''s feedback who come to the branch
premises to avail any of the Bank''s services.

5. Hybrid-Squad comprising of bank staff has been set
up in contact centers for providing better customer
service.

(II. IMPLEMENTATION OF OFFICIAL LANGUAGE

Punjab National Bank has been a leader in implementing
Hindi as the official language. The Bank remains dedicated
to complying with directives from the Department of Official
Language, Ministry of Home Affairs, Government of India,
as well as guidelines from the Committee of Parliament
on Official Language and the Department of Financial
Services, Ministry of Finance. It has successfully achieved
most of the targets outlined in the annual program for
the Financial Year 2024-25 issued by the Department of
Official Language, Ministry of Home Affairs, Government
of India

It is immensely a matter of pride to inform that during
the FY 2024-25 the Bank has been awarded the 1^st prize
under the “Rajbhasha Kirti” award for Bank''s in-house
magazine “PNB Pratibha” and 2^nd prize under Banking
category. Further 22 Rajbhasha awards were received
by various Zonal and Circle offices of the Bank from
the Regional Implementation Office of the Ministry of
Home Affairs. Moreover, various offices/staff members
of the Bank have won many awards from various Govt.
Institutes.

1. Actions taken for and progress made in

implementation of the Annual Program for

Progressive Use of Hindi

a. The Bank has a well-organized mechanism for
implementation of the Official Language, which
is functioning well under the supervision of the
Official Language Department established at
the Head Office. Official Language Department
is established in all the Zonal Offices, Circle
Offices and Training Centres, which implement
the official language policy duly approved by the
Board of Directors of the Bank in their offices,
subordinate offices and branches.

b. Intensive monitoring was done to achieve the
targets prescribed in the Annual Programme
of Department of Official Language, Ministry of
Home Affairs. Official Language (OL) Policy of
the Bank and Rajbhasha Corporate Action Plan
are in place.

c. Awards were given to winner offices/employees
under Lala Lajpat Rai Shield Scheme, other
incentive schemes and Rajbhasha competitions
to increase its use in the Bank.

d. The Bank''s quarterly in-house magazine "PNB
Pratibha" and half yearly Hindi magazines
of Zonal Offices & Circle offices are published
regularly. Hindi books were made available in
Rajbhasha Libraries established at various level.

e. All India level Inter Bank Hindi Essay Competition
was organized on the subject “Digital banking”
in August 2024.

f. A total of 11 Hindi books were awarded by the
Bank under the Original Hindi Book Writing
Scheme (for working and retired staff) during the
FY 2024-25.

2. Official Language Committees and their meetings

a. The meetings of the Official Language
Implementation Committee of the Head Office
were held quarterly under the chairmanship
of the Managing Director and Chief Executive

Officer

b. PNB has efficiently discharged the responsibility
of convener of 28 Town Official Language
Implementation Committees across the country.
Half yearly meetings of these committees
were organized and Hindi competitions, Hindi
workshops, Hindi seminars etc. were organized
during the year.

c. Quarterly meetings of official language
committees were organized by all the offices of
the Bank.

3. External Inspection/Official Language Seminar/

Conference

a. A three-day All India Official Language
Conference (19^th-21^st March, 2025) and Review
Meeting of the Official Language Officers of the
Bank was organized in Delhi by the Head Office
under the chairmanship of Executive Director
and in the presence of Mrs. Anshuli Arya, IAS,
Secretary, Department of Official Language,
Ministry of Home Affairs, Government of India.
Intensive monitoring of all offices was done
through official language inspection and annual
review meetings.

b. Rajbhasha Seminar was organized on
20^th March, 2025 by the Head Office on the
topic "Official Language Hindi and Artificial
Intelligence". Shri Vijender Singh Chauhan,
Associate Professor, Zakir Husain College, Delhi
University was present as the chief speaker
in the seminar in Advanced Learning Institute
(ALI).

c. The Bank''s work in Official Language was
appreciated by the Third Sub-Committee of the
Parliamentary ^Official Language Committee
during the inspections of Zonal Office
Hyderabad, Zonal Office Jaipur and Circle Office
Mumbai Western.

d. Rajbhasha (Hindi) Day (4^th October 2024) and
Rajbhasha (Hindi) Month (14^th September to 13^th
October 2024) were celebrated enthusiastically
in the Bank. Lala Lajpat Rai Shield was given
to the winners by Managing Director and Chief
Executive Officer and Executive Directors in
the main official language function organized at
Head Office.

4. Progress made in the use of Hindi in Information

Technology

a. The website of the Bank is completely bilingual
and it opens in Hindi by default.

b. Facility of Hindi and regional languages are
available in ATM.

c. SMS alerts have been sent to customers in
their preferred language (Hindi and regional
language).

d. Online Hindi reporting of all the Branches,
Circles, Zones and Divisions of the Head Office
was done on the ''Rajbhasha web portal''.

e. Bilingualization of Finacle and HRMS was done
through Linguify software updated version.
Along with it, bilingual facility is available to work
on all computers.

f. Mobile banking app ''PNB ONE'' was implemented
in the new revamped look in Hindi and various
regional languages.

g. Internet Banking is available in Hindi as well as
in regional languages.

h. A daily Hindi podcast is being released on
Banking subject.

i. Online Hindi courses were introduced for the
employees on the Bank''s e-learning portal PNB
Univ. based on which the employees are given
marks in Performance Appraisal Form (PAF).

j. Hindi version of WhatsApp Banking is available
for the customers.

5. Special work and programmes regarding the use

of Hindi

a. The Bank organized a conference on 2^nd August,
2024 for the Heads of 28 Nagar Rajbhasha
Karyanvayan Samiti (NARAKAS) in which
the Bank is convener. This conference was
successfully completed under the Chairmanship
of the Managing Director and Chief Executive
Officer and the dignified presence of Secretary,
Smt. Anshuli Arya, Ministry of Home Affairs.

b. The Bank''s stall was set up at Hindi Diwas and All
India Official Language Conference organized
by Department of Official Language, Ministry
of Home Affairs, Government of India at Bharat
Mandapam, New Delhi on 14-15^th September
2024. A quiz competition was organized for
the participants through a mini kiosk at the
stall, which was inaugurated by the Managing
Director and Chief Executive Officer.

c. On the occasion of World Hindi Day, a centralized
workshop was organized on the topic of "Official
Language Hindi and e-Tools" for the senior
officials of the Bank (General Managers and
Chief General Managers).

d. A workshop was organized for Official
Language Officers on the topic "Latest
technical guidelines and e-tools in Official
Language". On this occasion, Joint Director-
Official Language from Ministry of Home Affairs,
Department of Official Language, Mr. Rajesh
Srivastava provided special guidance regarding
"Kanthastha-2.0" and Senior Technical Advisor
Mr. Kewal Krishna provided special guidance
regarding Official Language Reporting.

e. Rajbhasha module of Mobile app “PNB
Arambh” was launched to digitalize the official
language implementation in the Bank.

f. Hindi Training for work in Hindi on Computer and
Translation Tool Kanthasth 2.0 was imparted
to staff members through Hindi workshops,
Unicode Training and Desk Training by Head
Office, Zonal Offices, Circle Offices and Training
Centres.

6. Bilingual status of circulars/forms/other

documents

a. During the year, circulars issued by the divisions
of the Head Office were uploaded on Bank''s
Portal in bilingual form.

b. The forms used by customers are also available
in Hindi/bilingual and 11 regional languages.

c. To facilitate the work in Hindi, “Standard Draft”
of daily letters/office notes related to various
departments is available on the e-portal of the
Bank.

d. Hindi and regional languages were used in
publicity and promotional campaigns related to
the Bank''s schemes and products.

XIII. PNB''S SUBSIDIARIES AND REGIONAL RURAL BANKS

1. DOMESTIC SUBSIDIARIES

a. PNB Gilts Ltd.: The bond market''s performance
in FY-2025 was marked by considerable volatility
and influenced by a combination of global and
domestic factors. Globally, U.S. Treasury yields
experienced fluctuations driven by FOMC policy
decisions, inflation concerns, and uncertainty
surrounding the US President''s policies. These
yields saw both increases and sharp declines
throughout the year. Notably, both the US
FOMC and the European Central Bank initiated
policy rate cuts, signaling a broader trend of
monetary policy easing. Domestically, the Indian
bond market generally witnessed declining
yields. This was attributed to factors such as
the RBI''s transfer of surplus dividends to the
government, increased foreign buying interest,
and expectations of fiscal prudence. The RBI''s
active role in monetary policy, including repo rate
cuts and liquidity management through Open
Market Operations and forex swaps, significantly
impacted bond yields. Furthermore, concerns
about domestic economic growth, highlighted by
lower-than-expected GDP figures, contributed
to expectations of policy easing and downward
pressure on yields. Overall, the Indian 10-year
benchmark bond yield demonstrated a general
downward trajectory, albeit with interim volatility,
moving from 7.06 per cent as on 31^st March
2024 and eventually settling at 6.58 per cent as
on 31^st March 2025.

PNB Gilts Ltd. continued to fulfill all its obligations
as a Primary Dealer mandated by RBI both in
Primary and Secondary market. The Company
posted a Profit Before Tax (PBT) of Rs. 310.95
Crore during FY 2024-25 vis-a-vis PBT of Rs. 99
Crore during FY 2023-24. Profit after Tax (PAT)
amounted to Rs. 233 Crore during FY 2024-25
as against Rs. 69 Crore during FY 2023-24.
Capital Adequacy remains strong with its Capital
to Risk Weighted Assets Ratio (CRAR) at 42.68
per cent as on 31^st March, 2025 well above the
regulatory minimum of 15 per cent for Primary
Dealers (PDs).

b. PNB Investment Services Limited (PNBISL):

During the year ended as on 31^st March, 2025,
the Company registered operational (fee-based)
income of Rs.10.20 Crore and total income of
Rs.13.72 Crore as against a fee- based income
of Rs.8.17 Crore and total income of Rs.11.38
Crore for the year ended as on 31^st March, 2024.
Profit before Tax during the period ended as on
31^st March, 2025 was Rs.7.86 Crore as against
Rs.5.46 Crore as on 31^st March, 2024.

The Company operates in three verticals,
namely Corporate Advisory, Merchant Banking
and Security Trustee. In the Corporate Advisory
Vertical, during the year PNBISL advised many
marquees business groups and corporate
clients on various transactions, including debt
syndication, debt resolution and other corporate
advisory assignments. With in-house expertise
and deep understanding of select sectors,
PNBISL prepared and delivered credible
Techno-Economic Viability (TEV) & LIE (Lenders
Independent Engineer services) reports to its
clients.

In Corporate Advisory Vertical, during FY
2024-25, the Company was able to complete
majorly four Debt Syndication assignments.
The Company has also completed around
70 assignments of U P State Industrial
Development Authorities (UPSIDA) and around
30 TEV/LIE assignments. FY 2024-25 was a
significant year for the Debt Resolution (Swiss
Challenge) practice of the Company and the
Company undertook and completed 4 significant
Debt Resolution. Now with the credentials
already being in place, the Company believes
the business may see an uptrend in FY 2025-26.

In Merchant Banking Vertical, during FY 2024¬
25, the Company has been able to showcase
its strengths to the markets in the form of timely
filing of documents to regulatory authorities in
nearly all the ECM product verticals i.e., Initial
Public Offers (IPOs), Qualified Institutional
Placement (QIP) and Open Offer assignments.
Going forward the Company has strengthened
its Merchant banking team by hiring the
experienced candidates and has good pipeline
in hand. Merchant Banking Vertical is poised for
continued growth and success.

Growth seen in trusteeship segment in
FY 2024-25. The Trusteeship Division
remains well-positioned to capitalize on new
opportunities, given the foundation of strong
client relationships, strategic market positioning,
and an increased focus on quality service
delivery. The Company believes that it will be
further strengthened through continued focus
on business development, client diversification,
and expanding value-added offerings under the
Trusteeship segment.

Looking ahead, the Company is dedicated
to strengthening its expertise across various
business verticals, including credit appraisal,
debt syndication, TEV consultancy, merchant
banking, and security trusteeship. These
initiatives aim to enhance the value offered to
the parent bank and all stakeholders.

c. PNB Cards and Services Limited (PNBCSL):

PNBCSL, a wholly-owned subsidiary of Punjab
National Bank (PNB), was incorporated on
16^th March, 2021 following RBI approval on
7^th December, 2020. Initially focused on non¬
financial support services for PNB''s credit
card business, PNBCSL received further RBI
approval on 13^th January, 2023 to expand
its services. These now include sourcing,
marketing, promoting, publicizing, advertising,
and soliciting deposits and retail products.

Operating across 100 locations with a workforce
exceeding 1,000 employees, PNBCSL has
facilitated housing loans worth over Rs. 1,200
Crore, vehicle loans exceeding Rs. 600 Crore,
issued more than 90,000 credit cards, and
sourced over 50,000 CASA accounts.

PNBCSL maintained its profitability trajectory,
achieving a net profit after tax of Rs. 3.68 Crore
for FY 2024-25, showing YoY growth of 63.6 per
cent, demonstrating its continued contribution to
the Bank''s success.

PNBCSL remains committed to offering high-
quality services and expanding its reach to serve
a broader customer base.

2. INTERNATIONAL

d. PNB International Limited (PNBIL): Punjab
National Bank (International) Limited was
incorporated in the UK on 13^th April, 2006
and registered with the Companies House in
England & Wales. The Bank is authorized by
the Prudential Regulation Authority (''PRA'') and
regulated by Financial Conduct Authority (''FCA'')
to conduct banking Business in UK.

The total deposits increased from Rs.6,664
Crore as on 31^st March, 2024 to Rs.7,688 Crore
as on 31^st March, 2025, showing YoY growth
of 15.37 per cent. Total advance increased
from Rs. 7,726 Crore as on 31^st March, 2024 to
Rs. 8,333 Crore as on 31^st March 2025, showing
YoY growth of 7.86 per cent. In the FY 2024-25,
PNBIL recorded a Net Profit of Rs.196.96 Crore
as per Indian Generally Accepted Accounting
Principles (IGAAP) and Rs. 3.49 Crore as per
International Financial Reporting Standards
(IFRS).

PNBIL''s main business is to provide commercial
and retail banking services to different segments
of customers, with a focus on the Indian
community within the UK. Its offerings include
accepting deposits from both retail and corporate
clients; lending to retail, SMEs and corporate
clients; and transaction banking services such
as currency remittances.

The deposit products primarily include current,
savings, term deposits and Individual Savings
Accounts. Some of these products such as ISAs
(Individual Savings Accounts) and Fixed deposits
are also being availed by a wider audience in the
UK. The lending products includes real estate
lending i.e., Buy to Let Residential, Commercial,
Development Loans and Hotels & Hospitalities,
lending to SME and Term loans backed by
SBLC.

e. Druk PNB Bank Ltd (DPNBL): Druk PNB
Bank Ltd, Bhutan, Banking Company having its
corporate office at Thimphu, Bhutan. It started
its operation on 27^th January, 2010, in Bhutan
as the country''s fourth commercial Bank, with
a component of both Foreign Direct Investment
(FDI) and joint venture in the Banking Sector.
Presently, the Bank has 9 branches and
30 ATMs spread across the country.

Total Deposits of DPNBL increased from
Rs. 2,590 Crore as on 31^st March, 2024 to
Rs.2828 Crore as on 31^st March, 2025 i.e. YoY
increase of 9.18%.

Total Advances of DPNBL increased from
Rs. 1,914 Crore as on 31^st March, 2024 to Rs.
2,103 Crore as on 31^st March, 2025 i.e. YoY
increase of 9.87%.

Profit decreased from Rs.49 Crore as on
31^st March, 2024 to Rs.30.41 Crore as on
31^st March, 2025. Paid up capital of the Bank as
on 31^st March, 2025 is Rs.168 Crore.

3. REGIONAL RURAL BANKS (RRBs): As on 31^st
March, 2025, there are 9 RRBs sponsored by the

_bank namely Dakshin Bihar Gramin Bank (DBGB),

Patna; Sarva Haryana Gramin Bank (SHGB), Rohtak;
Himachal Pradesh Gramin Bank (HPGB); Mandi;
Punjab Gramin Bank (PGB), Kapurthala; Prathama
UP Gramin Bank (PUPGB), Moradabad; Assam
Gramin Vikas Bank (AGVB), Guwahati; Bangiya
Gramin Vikas Bank (BGVB), Berhampore; Tripura
Gramin Bank (TGB), Agartala and Manipur Rural
Bank (MRB), Imphal.

These nine RRBs are operating in nine states
namely Bihar, Haryana, Himachal Pradesh, Punjab,
Uttar Pradesh, West Bengal, Assam, Manipur and
Tripura covering 162 districts with a network of 4709
branches.

a. Total Business of sponsored RRBs as on 31^st
March, 2025 is Rs.2,44,946 Crore registering a
YoY growth of 9.52 per cent.

b. Deposits of RRBs are at Rs.1,52,499 Crore
as on 31^st March, 2025. Aggregate Deposits
registered a YoY growth of 8.06 per cent.

c. Advances of the RRBs as on 31^st March, 2025
stood at Rs. 92,447 Crore with a YoY growth of
12.04 per cent.

d. As per RBI guidelines it is mandatory for
RRBs to meet the regulatory requirement of
CRAR of 9 per cent. The RRBs except DBGB
attained CRAR over and above the regulatory
requirement TGB (24.50 per cent), PGB (15.86
per cent), SHGB (15.31 per cent), PUPGB
(13.06 per cent), BGVB (11.78 per cent) and
MRB (10.01 per cent) HPGB (9.09 per cent) and
AGVB (9.54 per cent). CRAR of DBGB is below
the regulatory requirement at (2.99 per cent).

e. The sponsored RRBs are in profit of Rs.1131
Crore. Consolidated Operating profit of RRBs
stood at Rs.2630 Crore as on 31^st March, 2025.

f. The RRBs have cumulatively disbursed Rs.3021
Crore under Pradhan Mantri Mudra Yojana
(PMMY)/MUDRA as on 31^st March, 2025,
achieving 83.93 per cent of targeted budget of
Rs.3,600 Crore for disbursement.

XIV. AWARDS AND ACCOLADES

The Bank''s efforts have been recognized at various
platforms. The Bank has been conferred with the following
for initiatives taken in various fields for FY 2024-25:

1. Under EASE 6.0, PNB was declared winner in two
themes along-with First runner-up in the category
of Top Performing Bank.

a. Tech and Data driven capability building

b. Digital and Analytics driven business
improvement

2. Data Quality Award “PSU Best DQI-FY''25”

in Consumer Segment from Credit Information

Company TransUnion CIBIL (TU CIBIL) during IBA
TransUnion CIBIL Annual Conference of CGMs/GMs
of IT and MIS Departments of Public Sector Banks.

3. Prestigious Silver Shield for Excellence in
Financial Reporting in the category of Public
Sector Banks for the Year 2023-24 by the Institute of
Chartered Accountants of India (ICAI).

4. CIMSME Banking Excellence Awards for:

a. Best Bank for implementing Government
Schemes (Winner)

b. Best MSME Friendly Bank (Runner Up)

5. IBEX India 2025 for 2 entries- I) AARAMBH and II)
PNB ONE Biz.

6. IBA Banking Technology Awards under the
following 2 categories at 20th Annual Banking
Technology Conference, Expo and Citation 2024 by
Indian Banks'' Association (IBA).

a. Best IT Risk Management (Special Mention)

b. Best Fintech and DPI Adoption (Special Mention)

7. SKOCH award for ‘Analytical Model Based
Derived Cash Retention Limit of ATMs'' under BFSI
category during 100th SKOCH Summit.

8. Outstanding Performance in SHG Linkage 2023¬
24 by Deen Dayal Antyodaya Yojana, National Rural
Livelihood Mission, Ministry of Rural Development,
government of India.

9. 1^st Runner up award with SHRM HR Excellence
Awards in the field of Inclusion, Equity & Diversity
under Public Sector Enterprise (PSE) Category by
Society of Human Resource Management (SHRM).

10. Award of Excellence for Outstanding Performance-

2^nd Best Performing Bank under RAPID campaign
under Agriculture Infrastructure fund by Ministry of
Agriculture and Farmer Welfare.

11. Green Ribbon Champions award for Bank''s green
initiatives under project PALASH by News18.

12. Global Fintech Awards 2024 (First prize) in the

category of Green Banking Initiative of the Year for its
PNB ONE onboarding through Aadhaar during Global
Fintech Fest 2024 by Payment Council of India, NPCI
and Fintech Convergence Council (FCC).

13. The Ministry of New and Renewable Energy,
Govt. of India has organized Global Renewable
Energy Investors Meet and Expo (4^th REINVEST)
at Mahatma Mandir, Gandhi Nagar wherein the
Bank was felicitated by the Ministry for contribution
to the ambitious 200 GW Energy Generation from
Renewable Sources.

14. Rajbhasha Kirti Puruskar for 2023-24 (First Prize)

for PNB Pratibha Magazine and 2^nd Prize overall for
our Bank. The award by given away by Department
of Official Language, Ministry of Home Affairs,
Government of India and received by the MD & CEO
from Shri Amit Shah, Minister of Home Affairs.

15. Winner in the following two categories amongst
Indian Public Sector Banks (Large) category in 2^nd
ICC Emerging Asia Banking Conclave & Awards
organized by Indian Chamber of Commerce.

a. Best Performance on Asset Quality

b. Best Performance on Profitability

16. Infosys Finacle Innovation Awards 2024 in
following category:

a. Ecosystem-led Innovation - Platinum Winner
s Krishi Tatkal Rinn

b. Channel Innovation - Gold Winner

s Digital Execution of Locker Agreement

c. Maximizing Customer Engagement - Gold
Winner

s AADHAR-based Mobile Onboarding

17. PSE Award 2024 - Enterprise Applications Category-
Express Computer-The Indian Express Group.

18. TransUnion CIBIL Award:

a. Best Data Quality-PSB Consumer Award
2023-24

b. Best Data Quality-PSB Commercial Award
2023-24

c. TUCIBIL Best Data Quality Award 2023-24

19. Award of achievement to Bank under Mission
Upgrade Campaign for the FY 2023-24.

XV. FUTURE BUSINESS PLAN OF THE BANK

As the Bank embarks on a transformative journey in the
Financial Year 2025-26, it aspires to soar higher and
achieve unprecedented milestones. Guided by a strategic
focus on growth and profitability, the Bank will continue to
prioritize Retail, Agriculture & MSME (RAM) Advances,
enhancing its CASA portfolio and ensuring sustainable
business growth.

The Bank will keep its focus on expanding its horizons
by diversifying its product offerings, exploring new
markets, and tapping into untapped customer segments.
Operational efficiency will remain a core focus, enabling

seamless setSISe dej|.e|V

Accelerating its digital transformation, the Bank will
leverage cutting-edge technologies, including Al-powered
tools, to offer personalized and seamless online and
mobile banking experiences to all our customers.

Customer-centricity will remain at the heart of the
Bank''s approach. By introducing innovative products and
services, strengthening internal processes, and investing
in employee training, the Bank will consistently strive to
exceed customer expectations.

Employee development will be another key pillar of this
journey. The Bank will invest in the holistic growth of its
workforce, fostering a culture of self-driven excellence
through initiatives like the PNB UDAAN project.

FY 2025-26 marks a year of growth and transformation.

By focusing on these strategic areas, the Bank is poised
to solidify its position as a leading financial institution,
delivering value to customers, employees, and
stakeholders alike.

XVI. CHANGES IN BOARD OF DIRECTORS

1. Dr. Rekha Jain, Shareholder Director, completed her
tenure on 11.09.2024.

2. Shri Ambarish Ojha, Shareholder Director, was
deemed elected as Shareholder Director of the Bank
w.e.f., 12.09.2024.

3. Shri Pankaj Joshi, Part-time Non-Official Director,
completed his tenure on 20.12.2024.

4. Shri Sanjeev Kumar Singhal, Part-time Non-Official
Director, completed his tenure on 20.12.2024.

5. Shri Atul Kumar Goel, MD & CEO, completed his
tenure on 31.12.2024 on attaining superannuation.

6. Shri Binod Kumar, Executive Director, vacated
the office on 16.01.2025 upon his appointment as
Managing Director and Chief Executive Officer of

Indian Bank

7. Shri Ashok Chandra was appointed as MD & CEO
of the Bank w.e.f., 16.01.2025.

8. Shri D Surendran was appointed as Executive
Director of the Bank w.e.f. 24.03.2025.

XVII. SECRETARIAL AUDIT REPORT

The Secretarial Auditor in the Reports has made
observations in respect of (i) vacancies of Women Director
under regulation 17(1)(a) of SEBI (LODR) Regulations,
2015, Workmen Employee Director, Employee Director who
is not a workman, CA Director i.e. Directors under section
9(3) (e), (f), (g) and (h), respectively, of Banking Companies
(Acquisition and Transfer of Undertakings) Act, 1970 on the

Board of the Bank and (ii) non-compliance of SEBI (LODR)
Regulations with respect composition of Board of Directors,
Stakeholder Relationship Committee of the Board, Audit
Committee of the Board, Non- submission of prior intimation
of Board Meeting and Chairmanship of Meeting of Risk
Management Committee of the Board.

XVIII. DIRECTORS'' RESPONSIBILITY STATEMENT

The Directors confirm that in the preparation of the annual
accounts for the year ended 31^st March, 2025:

1. The applicable Accounting Standards have been
followed along with proper explanation relating to
material departures, if any;

2. The accounting policies, framed in accordance with
the guidelines of the Reserve Bank of India, were
consistently applied;

3. Reasonable and prudent judgment and estimates
were made so as to give a true and fair view of the
state of affairs of the Bank at the end of the financial
year and of the profit of the Bank for the year ended
31^st March, 2025.

4. Proper and sufficient care was taken for the
maintenance of adequate accounting records in
accordance with the provisions of applicable laws
governing banks in India, and;

5. The accounts have been prepared based on the
principle of “going concern”.

XIX. ACKNOWLEDGEMENT

The Board of Directors thank the shareholders, valued
customers, well-wishers and other stakeholders for their
good-will, patronage and support.

The Board acknowledges with gratitude for the guidance
and support of Government of India, Reserve Bank of
India, Securities & Exchange Board of India, Insurance
Regulatory and Development Authority of India, Central
Vigilance Commission, Stock Exchanges and Statutory
Central Auditors of the Bank, in the functioning of the Bank.

The Board also placed on record its appreciation for the
valuable contribution made by the members of the Bank''s
staff at all levels and is looking forward to their continued
involvement in achieving the future goals.

For and on behalf of Board of Directors

Ashok Chandra

Managing Director & CEO¹

---

Mar 31, 2024

On behalf of the entire team, I am pleased to present the Annual Report for the Financial Year 2023-24. This year has been the year of both i.e., challenges as well as opportunities and it is a matter of immense pride for all of us that India has emerged stronger than ever.

India's economic performance in FY 2023-24 has been truly remarkable. GDP growth for the FY 2023-24 increased to 8.2 per cent which has consolidated the position of the country as the world's fastest growing economy for the third consecutive year. The growth this year has been fueled by several factors such as strong domestic consumption demand, increase in private spending and uptick in Business confidence.

In line with the performance of the economy, the banking sector also performed well during the year and could exceed its past performance in Business, Profitability and Capital, etc. Financial Year 2023-24 has been the year of growth and recovery for the Banking industry. The Bank could perform as per expectations and delivered commendable growth during the year, strengthening its foothold in the industry. The first and foremost achievement of the Bank during the Financial Year 2023-24 was attaining market capitalization of more than Rs.1 Lakh Crore and scrip price surpassing the mark of Rs.100/. PNB was on the second position as on 1^st April, 2024 in terms of market capitalization amongst Public Sector Banks.

In business terms, Bank surpassed the business figure of Rs. 23.50 Lakh Crore recording a quantum increase of Rs. 1.87 Lakh Crore over the previous year. The Bank has performed admirably in all the quarters. Global Advances recorded double digit growth of 11.2 per cent with Domestic Advances also registering the double digit growth of 10.9 per cent. As on 31^st March, 2024, Global Deposits stood at Rs.13.70 Lakh Crore while Advances stood at Rs.9.83 Lakh Crore.

Amongst Advances, Retail, Agriculture and MSME (RAM) Advances registered the growth of 10.7 per cent. MSME customers who graduated beyond MSME, were reclassified as corporate & others during the year and taking this reclassification into account, RAM advances growth would be 11.7 per cent Year on Year (YoY). Retail advances showed growth of 12.6 per cent YoY. In Retail Segment, Housing Loan, Vehicle Loan and Personal Loan exhibited the YoY growth of 14.5 per cent, 25.6 per cent and 14.4 per cent respectively.

Asset quality of the Bank improved during the year through adoption of robust recovery and enhanced underwriting standards. The Bank's GNPA ratio declined to 5.73 per cent as on 31^st March, 2024 from 8.74 per cent as on 31^st March, 2023. Net NPA ratio also went down to 0.73 per cent as on 31^st March, 2024 from 2.72 per cent as on 31^st March, 2023. Provision Coverage Ratio including Technical Write Off (TWO) of the Bank improved to 95.4 per cent as on 31^st March, 2024 from 86.9 per cent as on 31^st March, 2023.

On the digital front, the Bank has performed remarkably by coming out with more than 100 products, processes and portals. Some of the major products, processes and portals launched during the year include PNB Swagat providing Personal Loan to New to Bank Customers (NTB), Digi Education Loan, Digital Vehicle Loan, Integrated Payment & Collection Services, CMS Auto Debit Mandate, Digital Document Execution, etc. The steps taken towards digitalization could help the Bank scaling newer heights.

Apart from digital thrust, development under Human Resources Transformation also remained at the forefront and UDAAN project took off smoothly covering the officers in higher grades.

“Against this backdrop, your Board of Directors have pleasure in presenting the Annual Report of your Bank for the year ended 31^st March, 2024 (FY 2023-24) along with its audited Annual Financial Statements".

BANK’S PERFORMANCEI. FINANCIAL PERFORMANCE AS ON 31^s1 March, 20241. Topline

a.    Global Business stood at Rs. 23,53,038 Crore vis-a-vis Rs. 21,65,844 Crore, registering YoY growth of 8.6 percent.

b.    Global Deposits stood at Rs. 13,69,713 Crore as on 31^st March, 2024 as against Rs. 12,81,163 Crore as on 31^st March 2023, showing the growth of 6.9 percent.

c.    CASA Deposits was at Rs. 5,52,499 Crore as on 31^st March, 2024 as against Rs.5,38,015 Crore as on 31^st March, 2023.

i.    Current Deposits was at Rs. 72,201 Crore as on 31^st March, 2024

ii.    Savings Deposits was at Rs. 4,80,298 Crore as on 31^st March, 2024.

d.    Global Advances stood at Rs. 9,83,325 Crore as on 31^st March, 2024 against Rs. 8,84,681 Crore as on 31^st March 2023, recording the growth of

11.2    percent.

e.    Retail Advances was at Rs. 2,22,574 Crore as on 31^st March, 2024 registering the growth of 12.6 per cent YoY

f.    Agriculture Advances was at Rs. 1,58,188 Crore as on 31^st March, 2024 with growth of

11.3    per cent YoY

g.    MSME Advances was at Rs. 1,39,288 Crore as on 31^st March, 2024 as against Rs.1,30,178 Crore as on 31^st March, 2023 showing the growth of 7.0 per cent. During the year, some MSME customers graduated and got reclassified as Corporates. If this reclassification effect is taken into consideration for last year, then MSME Segment growth would be 12.0 per cent YoY.

h.    Retail Agriculture MSME (RAM) Advances was at Rs. 5,20,050 Crore as on 31^st March, 2024 visa-vis Rs.4,69,981 Crore as on 31^st March, 2023, showing the growth of 10.7 per cent YoY Taking into consideration the impact of reclassification, the growth of RAM would be 11.7 per cent YoY

i.    Share of RAM w.r.t. Domestic Advances was at 55.2 per cent as on 31^st March, 2024.

2.    Bottom Line

a.    Net Profit of the Bank was at Rs. 8245 Crore in FY 2023-24 showing YoY growth of 228.8%.

b.    Operating Profit of the Bank was at Rs. 24,931 Crore in FY 2023-24 showing YoY growth of 10.7 per cent. It stood at Rs. 22,529 Crore in FY 2022-23

c.    Net Interest Income was at Rs. 40,083 Crore in FY 2023-24 vis-a-vis Rs. 34,492 Crore in FY2022-23, registering the growth of 16.2 per cent YoY

3.    Asset Quality

a.    Gross NPA of the Bank stood at Rs. 56,343 Crore as on 31^st March, 2024, improving from the level of Rs.77,328 Crore as on 31^st March, 2023.

b.    Gross NPA ratio exhibited decline of 301 bps from a level of 8.74 per cent as on 31^st March, 2023 and stood at 5.73 per cent as on 31^st March, 2024.

c.    Net NPA of the Bank improved from as high as Rs. 22,585 Crore as on 31^st March, 2023 to Rs. 6,799 Crore as on 31^st March, 2024.

d.    Net NPA ratio declined by 199 bps from a level of 2.72 per cent as on 31^st March, 2023 and stood at 0.73 per cent as on 31^st March, 2024.

e.    Provision Coverage Ratio (PCR) including TWO increased by 850 bps to 95.4 per cent as on 31^st March, 2024 as against 86.9 per cent as on 31^st March, 2023.

f.    Provision Coverage Ratio (PCR) excluding TWO increased by 1710 bps to 87.9 per cent as on 31^st March, 2024 as against 70.8 per cent as on 31^st March 2023

4.    Key Ratios (Global)

a.    Net Interest Margin improved to 3.09 per cent in FY 2023-24 from 3.06 per cent in FY 2022-23.

b.    Cost of Deposits was at 4.91 per cent in FY 2023-24 as against 4.10 per cent in FY 2022-23.

c.    Yield on Advances increased to 8.28 per cent in FY 2023-24 from 7.16 per cent in FY 2022-23.

d.    Yield on Investment increased to 6.78 per cent in FY 2023-24 from 6.57 per cent in FY 2022-23.

e.    Return on Average Assets was at 0.54 per cent in FY 2023-24 from 0.18 per cent in FY 2022-23.

f.    Business per employee improved to Rs.23.84 Crore as on 31^st March, 2024 from Rs.21.64 Crore as on 31^st March, 2023.

g.    Business per branch improved to Rs.225.25 Crore as on 31^st March, 2024 from Rs.209.53 Crore as on 31^st March, 2023.

5.    Capital Position

The capital adequacy of the Bank improved during the financial year on account of capital raising by the Bank coupled with improved profitability. During FY 2023-24, Bank has raised Rs.6012 Crore through Additional Tier I (AT I) Bonds and Rs.3090 Crore through Tier II Bonds. The Bank continued with its focus on sustainable business growth by targeting better rated borrowers with low risk profile. Going forward, the Bank is strategically well placed to meet the growing credit needs of the economy.

Key Highlights

a. The Capital Adequacy Ratio of the Bank recorded increase by 47 bps to reach at 15.97 per cent, as of 31^st March, 2024, with AT-1 capital at 2.13 per cent and Common Equity Tier-1 (CET-1) at

11.04 per cent.

b.    Risk Weighted Assets (RWA) of the Bank were optimized to Rs. 7,35,435 Crore as on 31^st March, 2024 on account of focus on better rated accounts and churning of portfolio of the Bank.

6.    Compliance Culture

a. In accordance with Reserve Bank of India guidelines, an independent Compliance Function headed by Chief General Manager designated as Group Chief Compliance Officer (GCCO) has been set up in the Bank. The Board approved Group Compliance Policy defining various aspects of compliance function is in place.

b.    Compliance Function activities are managed by dedicated officials at Head Office, Zonal Compliance Officers at Zonal Headquarters and Circle Compliance Officers at Circle Headquarters.

c.    Highlights of compliance function include:

i.    Monitoring of Compliance Risk at Bank level using in-house developed Compliance Risk Assessment Model (CRAM).

ii.    Monitoring of compliance to Key Compliance Obligations (KCOs) by individual officers in the Bank using inhouse developed Compliance Monitoring Tool (CMT).

iii.    Group Compliance Risk Framework along with Group Compliance Risk Scorecard has been developed to have an effective compliance oversight at Group level.

II. OPERATIONAL HIGHLIGHTS1.    Key Digital Initiatives & Achievements

a.    The Bank introduced various digital offerings such as Pre-Approved Business Loans (PABL), Digital Kisan Credit Cards through Jan Samarth Portal, Digi Home Loans, Digital Personal Loan to New To Bank (NTB) Customers (PNB-Swagat), e-PM SVANidhi, e-GST Express, e-BG, digitalization of recovery process and various other digital experiences aimed at enhancing customer satisfaction & convenience.

b.    Initiated e-OTS (Express-One Time Settlement)

for E2E digital settlement approval process for NPA Accounts having o/s balance upto Rs.10 Lakh.

c.    Introduced Soundbox device (PNB E-Swar) at merchant location where Bharat QR codes are issued or required for digital transactions which provide immediate audio notification on every successful transaction.

d.    An application “PNB Aarambh” was launched to facilitate acquiring of prospective borrowers customers.

e.    Digital Gold Loan journey has also been initiated since November 2023.

2.    Key Structural Transformations

a. Customer Acquisition Centres (CACs) across 55 locations, extending to over 80 cities have been set up. These CACs facilitated in establishing and deepening relationship with customers through different channels and enhance marketing capabilities in targeted areas.

b.    Leveraging Bank's Subsidiary- PNBCSL in augmenting Retail Products marketing:

The Bank expanded the role of PNB Cards & Services Limited (PNBCSL), a wholly-owned subsidiary, to encompass the marketing and distribution of the bank's retail offerings. This includes sourcing of Housing Loan (above Rs.10 Lakh), Vehicle Loan (above Rs.10 Lakh) and Education Loan (above Rs.7.50 Lakh). Further PNBCSL has also been entrusted with the job of sourcing CASA business.

c.    Centralized PNB Loan Point (C-PLP): A Centralized Processing Centre, C-PLP, was established to handle retail loan leads sourced through PNBCSL. This structure ensures efficient lead management and faster processing, resulting in sanctioning of more than Rs.100 Crore retail loans within a short span of time.

d.    Digital Marketing Cell: Recognizing the untapped potential in digital marketing adoption, the bank has set up Digital Marketing Cell. The aim is to foster awareness, create adoption opportunities and enhancing organizational reputation. The digital marketing team is tasked with maintenance of digital assets, driving traffic, managing consumer sentiment and customer service and facilitating conversions.

3. Customer Service: The Bank accords high importance to Customer Service and constantly taking initiatives to improve it. Some of the initiatives taken during FY 2023-24 are as under:

a.    To improve the visibility of Toll-Free Numbers (TFNs) and to help the customers to easily remember the TFNs, Bank has procured two new 8-Digit numbers i.e. 1800 1800 and 1800 2021.

b.    With effect from 01.11.2023, Doorstep Banking is being offered through PSB Alliance at 4188 branches of the Bank at 610 Centres.

c.    Doorstep Banking Services (DSB) are available to all customers (without any age/ physical disability criteria) through Universal Touch Points (UTPs), i.e., Common mobile application, Common Contact Centre and web portal. The DSB Service booked through these UTPs will be delivered by an authorized agent of the outsourced agency. However, Doorstep Banking Services are more beneficial to senior citizens, differently abled or incapacitated persons and services to such customers is provided in an effective and transparent manner.

d.    To collect the customer feedback, a SMS is triggered to the customer's registered mobile number upon successful processing of Customer Induced transactions above Rs. 10,000/- (cash deposit, withdrawal) through branch, to provide feedback on the quality of service rendered by branch officials.

e.    23 Self-Service options are available on Contact Centre IVR (Interactive Voice Response). Functionalities like facility of Direct access to agent for HNI customers, Blocking of UPI, Mini statement over SMS and Registration of e-mail for account e-statement, through IVR have been recently started.

f.    There is a dedicated team at Contact Centre to handle PNB ONE related issues and flag the technical issues to the back-end team.

4. Project UDAAN- Revolutionizing HR capabilities to transform Bank

HR transformation initiative, PNB UDAAN, was launched to enhance HR functions and processes. This project comprises of various modules and includes establishment of a Human Resource Transformation (HRT) cell. Under the UDAAN project, PNB embarked on a digital HR transformation journey, achieving the following:

a.    Foundational Enhancements: Introduction of end-to-end Digital Performance Management Systems, role clarity, scientific target setting, differentiation of performance scores among employees, and implementation of new systems & policies such as Job Families, Succession planning, 360-degree feedback, etc.

b.    Process Digitization: Digitization of critical processes such as manpower assessment, job role allocation, objective and system-driven performance management, and the implementation of analytics-based dashboards for performance enhancement & robust business reviews.

c.    Unleashing Potential: Maximizing the potential of each employee through a comprehensive learning and development program. This includes various capability-building measures such as redesigning job families for specialization, career paths, succession planning, talent management, individual development and grooming plan including One-on-One coaching.

Project UDAAN is not only about digital processes but also brings with it a major aspect of capability development. A best-in-class Leadership Development Program was conducted and under it, more than 900 senior level managers were imparted leadership training. PNB's flagship LDP is in 3 forums - Leading Self, Leading Team & Leading Transformation. Each forum consists of 2 day classroom training & 90 minutes One-on-One coaching.

Looking at the success of UDAAN 1.0, the Bank is set to take this transformation journey to the next level with UDAAN 2.0.

5. DIVIDEND

Board of Directors of the Bank has recommended a dividend of Rs.1.50 per equity share (75 per cent) of face value of Rs.2/- each for FY 2023-24, subject to declaration/approval of the shareholders at the 23^rd Annual General Meeting of the Bank.

III. ASSET QUALITY

The Bank was able to reduce Gross NPA from the level of Rs. 77,328 Crore as on 31^st March, 2023 to Rs. 56,343 Crore as on 31^st March, 2024. Net NPA of the Bank came down to the level of Rs. 6,799 Crore as on 31^st March, 2024 from Rs. 22,585 Crore as on 31^st March, 2023. Focus on asset quality continues to be one of the topmost priorities for the Bank. Provision Coverage Ratio (PCR) including TWO is at a healthy level of 95.4 per cent as on 31^st March, 2024.

1.    Recovery & Upgradation: Total Recovery stood at Rs. 20,164 Crore for FY 2023-24. Of this, total Cash Recovery (Cash Recovery+ Recovery in Technical Write Off (TWO)+ Recorded Interest (RI)) stood at Rs.16,716 Crore for FY 2023-24.

2.    Upgradation through Resolution Mechanism:

The Resolution Cell was created to deal exclusively with restructuring/resolution of NPA accounts and recovery in National Company Law Tribunal (NCLT) cases. The details regarding the same is as under:

Restructured Accounts (Amount Rs. in Crore)
Â	Total Sanctioned
Â	No. of A/c's	Amount
FY 2023-24	06	3688

Further, a sum of Rs.3603 Crore was recovered in NPA accounts under IBC in NCLT.

3.    Mega e-Auctions: During FY 2023-24,    11,502

properties were uploaded on e-Bikray portal. Out of which, 2081 Immovable Properties (IPs) were auctioned successfully.

4.    Sale of Assets to Asset Reconstruction Company (ARC)/NARCL: Details of financial assets sold to ARCs/NARCL is as under:

(Amount Rs. in Crore)
Items		FY 2023-24
Â	Number of Accounts sold to ARCs	20
ii.	Book Outstanding of Accounts sold	4929
iii.	Aggregate Consideration received	1248

5. Initiatives taken to Improve Asset Quality duringFY 2023-24a.    War against NPA campaign

i.    Dedicated tele-calling campaigns and rigorous field visits to NPA borrowers.

ii.    Head Office provided its full support and involvement for targeted recovery actions.

b.    Digitization of recovery efforts

i.    Launch of re-vamped digital One Time Settlement (OTS) (e-OTS) offering for NPA recovery for eligible a/cs upto Rs 10 Lakh.

ii.    Recovery portal - SAMARTH, 11 out of 17 modules were made live during FY 2023-24.

c.    Digital e-OTS journey for robust recovery

i.    e-OTS is a digital OTS approval process on filtered NPA Accounts having outstanding amount up to Rs.10 Lakh, in which all the steps from applying for OTS to sanctioning of OTS & steps involved thereafter are automated. The solution has been rolled out through PNB official website & PNB ONE App.

ii.    PNB is the first Bank to launch such kind of an online automated OTS approval process.

iii.    To enhance the outreach of available Special One Time Settlement Scheme (SOTS) and to target small NPA Accounts, e-OTS can prove to be a very effective tool in the recovery process.

iv. Settlement approval process shall be expedited for small loan NPA accounts and OTS approval TAT will get reduced substantially.

v.    The recovery generated through this process, will have a positive impact on the overall profitability of the Bank, especially in DB3 and Loss accounts.

vi.    Convenience to eligible NPA Account borrowers under e-OTS process, Sanction Letter and No Dues Certificate shall be generated online.

IV. EXPANDING DIGITAL FOOTPRINTS

Technology continues to drive the Banking sector and with the advent of Fintech in the banking landscape, it has become all the more critical to adopt and imbibe technology in the Bank's day to day operations effectively to remain competitive and grow.

S.No.	Parameters (in Crore)	As on 31.03.23	As on 31.03.24	Gr% (YoY) 31.03.24/ 31.03.23
1	No. of Internet banking Users	3.92	4.23	7.9%
2	PNB One Activated users	1.16	1.74	50.0%
S.No.	Parameters (in Crore)	FY 2022-23	FY 2023-24	Â
1	No of digital transactions	408	659	61.5%
2	UPI transactions	364	622	70.9%

The Bank, during FY 2023-24, took up various digital initiatives towards business growth and customer convenience:

LIABILITY

1.    Online Locker Agreement Execution: A facility is provided to customers for execution of locker agreement online. This involves integration with NeSL for e-stamping.

2.    DIGILOCKER: API Integration for Digi Locker through which the customer can fetch the account statement by providing the necessary inputs like Account Number, Period, Customer Name, etc. The account statement can also be downloaded in PDF format.

3.    Positive Pay System through PNB Website: Positive Pay System through PNB Website has been implemented to get confirmation from customers for clearing of cheques amounting to Rs. 50,000 and above.

4.    e-Mandate as Sponsor Bank Integration: To register e-Mandate as a sponsor Bank, our bank is participating in the National Automated Clearing House (NACH). Bank and its Corporates are accepting NACH Mandate, which is a direction of a customer to honour recurring payments

like insurance, loan installment, Systematic Investment Plan (SIP), etc.

5.    Implementation of Japan Credit Bureau (JCB) Contactless cards- q SPARC: In order to facilitate contactless feature in domestic and international locations, NPCI has enhanced their contactless product specification known as RuPay Contactless Product (q-SPARC) and requested the Bank to enable this feature on JCB card so that JCB card holder can enjoy the seamless tap and pay feature in their JCB card.

6.    E-Mandate Registration and Transaction Processing as Sponsor Bank: Feature of Self E-Mandate registration by customers for their PNB loan Accounts through Bank's Website with authentication as Debit Card, Internet banking and Aadhaar.

7.    RBI Unclaimed Deposit API integration: API integration with the RBI UDGAM portal has been implemented to facilitate the customers for centralized search of unclaimed deposits/inoperative accounts.

8.    Electronic Bank Guarantee: Electronic Bank Guarantee (e-BG) is end-to-end digital product. Bank's CBS system is integrated with NeSL for e-Stamping, e-signing and submission of digitally signed e-BG document on NeSL's depository through middleware developed by Bank.

9.    Online BG Verification Portal: This portal is used as a medium through which the beneficiaries can validate the genuineness of Bank Guarantee.

10.    PNB Secure Savings Account (SSA): PNB Secure Savings Account is a product which offers insurance with savings account. This has been achieved through integration with PNB Metlife through e-Insurance portal for insurance policy generation.

RETAIL

1.    Digital Housing Loan: Under Digital Housing Loan, CBS system has been integrated with onlinepsbloans (OPL), Fintech partner, through middleware developed inhouse. It provides housing loan through end-to-end digital journey to customers who may or may not have customer relationship with our bank.

2.    New to Bank Personal Loan (NTBPL): New to Bank Personal Loan is end-to-end digital product. It provides personal loan through end-to-end digital journey to customers who are not registered with bank or not having any customer relationship with the Bank.

3. Digi Vehicle Loan API Integration: APIs for the Self-Initiated Customer journey in which the customer will initiate the journey through different alternate channels- IBS/PNB ONE, PNB website (URL designed specifically for these products) for purchasing the vehicle for private use.

AGRICULTURE1.    Digital Journey of PNB Krishi Tatkal Rin Yojana: End to

end Digital Journey for PNB Kisan Tatkal Rin Yojana to give hassle free digital experience to small farmer borrowers.

2.    Digital Kisan Credit Card (KCC) journey through Jansamarth Portal: Bank's customers can avail KCC loan up to Rs.1.60 Lakh through Jansamarth Portal.

3.    KCC Review and Drawing Power (DP) Enhancement:

PNB is offering to its existing KCC borrowers to review and enhance (Annual DP) their KCC accounts through the digital portal. It is the customer initiated Straight Through Processing (STP) Digital Journey for which Bank has provided APIs in where review date and DP enhancement will be marked for eligible borrowers.

MSME

1.    Pre-Approved Business Loan (PABL): PABL is launched to offer straight through digital lending business loan facilities above Rs. 1.00 Lakh to Rs. 10.00 Lakh.

2.    Easy renewal up to Rs.10.00 Lakh: End to end digital renewal will be done for all eligible borrowers having exposure upto Rs.10.00 Lakh.

3.    Digital Journey of App Based GST Sahay Scheme: To

provide hassle free loan up to Rs.2.00 Lakh per invoice to GST registered MSMEs engaged in manufacturing, trading and services against GST invoices at competitive rates subject to maximum of Rs. 10.00 Lakh per borrower.

4.    Digital Journey of PNB GST Express Loan: To boost digital lending, e-GST EXPRESS scheme has been launched for loan above Rs.10.00 Lakh to Rs.100.00 Lakh with minimum manual intervention for Existing to Bank (ETB) customers only.

5.    e-PM SVANidhi: To make the PM SVANidhi loan more flexible and easily accessible for all eligible urban street vendors, a new product “e-PM SVANidhi” has been launched. It offers collateral free loan upto Rs. 50,000 to applicants who are having KYC complied CA/SA with our bank based on Aadhar/PAN available in CBS.

FINANCIAL INCLUSION

1. Jansuraksha: API integration with Department of Financial Services (DFS) Jan Suraksha portal to automate the process of enrolment and claim settlement of Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY) from BC location through Internet Banking Services (IBS)/Mobile Banking Services (MBS) and from branch.

GOVERNMENT BUSINESS

1.    Accepting online credit to Public Provident Fund (PPF) & Sukanya Samriddhi Account(SSA) for Bank's own customers and for other than account holder through Mobile Banking Services (MBS).

2.    Bhavishya API Integration for Pension Slip, Life Certificate Status, Form 16 and Due Drawn Arrear present in Government Business Software Solution (GBSS) server to Bhavishya portal.

CUSTOMER SERVICE

1. Centralized Grievance Redressal Monitoring System (CGRMS) API (complaint Re-Opening): Re-opening of digital and non-digital complaint in CGRMS as per customer request. The facility of reopening of complaint with same docket number is developed.

MOBILE BANKING (PNB ONE) & INTERNET BANKING

1.    QR Code Generation through PNB ONE and Retail Internet Banking: Customers can now display QR Code to receive payments instantly through UPI. The QR Code can also be downloaded and shared for receiving payments.

2.    PNB SHOPPE (E-market place) in PNB ONE and Internet Banking: Bank introduced PNB Shoppe in PNB One and Internet Banking. PNB Account holders will now be able to earn extra rewards for their day to day shopping needs.

3.    OTP on E-mail registration facility in PNB ONE: To

facilitate our customers, it has been decided to provide OTP on e-mail facility for users of PNB One.

4.    Bulk fund transfer facility in PNB ONE: Earlier in PNB ONE, funds could only be transferred to single beneficiary at a time. Now, for enhanced user experience and faster payments, Bulk Fund Transfer facility has been introduced in PNB ONE.

5.    Onboarding on Retail Internet Banking using Aadhaar OTP: Online Self-registration and Password Reset facility using Aadhaar OTP has been introduced.

6.    UPI payment using RUPAY credit card in PNB ONE:

Functionality of UPI payment through PNB ONE using Rupay credit card has been started.

7.    Waiver of OTP authentication for fund transaction Intra bank (within PNB) & Interbank, i.e., NEFT & IMPS and UPI transactions amount upto Rs.5000/- through PNB ONE.

1.    The Bank is offering more than 40 services through WhatsApp Banking. Current Account holders, including those in Retail and Corporate categories, can now also utilize WhatsApp Banking with a new functionality to disable IBS/MBS.

2.    The facility of block debit cards on a temporary or permanent basis, register for e-statements and "Block UPI" feature to enhance security has been introduced.

UNIFIED PAYMENT INTERFACE (UPI)

1.    UPI registration for NRO accounts: Facility of UPI has been extended to Non-Resident Ordinary (NRO) customers as well, thereby making it more accessible and convenient for them to make domestic payments in India.

2.    UPI 123PAY: UPI 123PAY is an instant payment system for feature phone users in a safe and secure manner without internet connectivity. Through UPI 123PAY, feature phone users will now be able to undertake a host of UPI transactions through pre-defined IVR number.

3.    Linking of RUPAY credit card on UPI: Customers can use their RuPay Credit card for making payments to merchant through UPI. For this, customer has to link his card to BHIM PNB App or any enabled UPI App.

4.    Interoperable Card-less Cash Withdrawal using UPI (ICCW): ICCW is a facility which enables a customer to withdraw cash from ATM by using UPI platform. There is no need to carry and remember card details. Cash withdrawal by scanning QR code through any ICCW enabled UPI app is now possible.

5.    UPI INTERNATIONAL: To promote UPI payment platform globally, National Payment Corporation of India (NPCI) has introduced the functionality, UPI International (UPI Global) for Foreign Outward Remittance. The functionality can be used by customers visiting abroad who want to make payments to local merchants.

6.    UPI Lite: Customers can make small payments of up to Rs.500 using on-device wallet.

V. ANALYTICS CENTRE OF EXCELLENCE (ACoE)

“Analytics Centre of Excellence” is a dedicated vertical responsible for developing all kind of reports, data reporting, providing Management Information System (MIS) support to other business verticals and developing AI/ML based solution for Bank. Besides these, ACoE is also responsible for maintaining the CIC Module (Bureau One), CIC Data submission, Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI), NeSL, Data aggregator/Account Aggregator, PNB 360 application dashboard and enterprise wide data warehouse.

1.    Enterprise-Wide Data Warehouse (EDW): Bank has operational enterprise data warehouse project catering to various analytical/statutory/regulatory and reporting/dash-boarding requirement with data from 60 plus source systems being integrated into EDW. All downstream applications are receiving data through EDW and also all data requirements for various digital journeys are catered to.

2.    Data Analytics Team: Data Analytics cell at ACoE was conceptualized to develop in house capability in the field of Artificial intelligence. Since then the cell is actively engaged in analysis which is broadly categorized in three broad verticals namely Business, Control and Support. These verticals have been identified with the objective of value-creation, increasing cross-sell, up-sell opportunity, increasing revenue, cost reduction, product enhancement, channel optimization, maximizing digital footprint, plugging revenue leakage and improved risk profiling of the existing as well as prospective customer base.

Analytics based leads are generated for potential customers who have higher propensity to use bank products as compared to other customers. Leads are identified after analyzing various parameters such as customer behavior with reference to their demographic details, investment profile, relationship with bank, transactional data, geographical distribution, digital presence, bank products usage etc.

Since inception, Data analytics team has been working to comply with various analytics related action points pertaining to EASE (3.0 to 6.0). In EASE journey of the Bank, there has been continuous improvement in Bank's position pertaining to analytics.

Going forward, apart from business generation, major focus will be on process improvement, digitalization, detecting revenue leakage and improvement in asset quality and onboarding new customers.

3. New Initiatives

a.    Usage of unstructured data: In order to explore the capabilities of conversion of unstructured data into structured one, below mentioned use cases have been developed in house with available tools on pilot basis.

i.    Use of Social media interaction and feedback for sentiment analysis, product enrichment.

ii.    Extraction of key information embedded in PDF like balance sheet.

b.    Optimization of Cash Retention Limit (CRL) for Bulk Note Acceptor (BNA) and ATM- Time series analytical approach has been used to derive the cash retention limit for ATM/BNA so as to reduce overall cash requirement of the bank.

c.    Procurement and Deployment of full stack analytical tool - Bank has procured and deployed IBM Cloud Pak for Data, a full stack analytical tool/ platform for carrying out Artificial Intelligence (AI) / Machine Learning (ML) studies.

d.    Statement analyzer & spend analyzer- The

team has developed the analyzer to have better understanding of customer spending and earning behavior to supplement credit decision for individual customers.

4. Other Key Highlightsa.    Account Aggregator (AA) Ecosystem: PNB is

live with 11 Account Aggregators as both Financial Information Provider (FIP) and Financial Information User (FIU). Both FIP and FIU modules are live since 11-07-2022 and Bank has already started sharing data with other banks as FIP. As on date following Digital Journeys have been made live with PNB AA such as Digital Home Loan (DIGI HL), New to Bank Personal Loan (NTB PL), Digital Car Loan (DIGI CL), PNB ONE, Lens. Implementation of AA ecosystem for 9 RRBs of PNB has been completed on 31.10.2023.

b.    Data Aggregation and Analytical Services (DAAS): PNB Data Aggregator facilitates to provide data from various public domain sources as well as analyze financial statements of companies and individuals. PNB Data Aggregation & Analytics Services (DAAS) Application not only draws raw data from multiple sources but also analyzes the data and provides information to enable users to take real time decisions.

Current Account Opening using video KYC, Housing loan, NTB PL (new to bank personal loan), Tab banking, SASTRA portal, Digital Vehicle Loan using DAAS APIs from Income Tax Return (ITR), Import Export Code (IEC) & Udyam registration, Bank statement Analysis, IEC, Vehicle data verification, BSA, Employees' Provident Fund Organization (EPFO), 26AA are the services has been made live.

c.    Next Level Reforms: With EDW in place, Bank is well prepared to achieve the action points under next level reforms in PSBs for short term and long-term targets like digital transformation & enhancement, Big Data Analytics, change in banking technology, focused use of Fin-Tech and improvement in employee engagement through analytics.

d.    PNB 360 and Customer 360 Dashboard: ACoE has developed in house Dashboard “PNB 360” for Business Monitoring to set short-term & longterm goals. It improves the speed and efficiency of accessing different data sets and makes it easier for decision-makers to derive insights that guides the business and marketing strategies. Dashboard graphical view helps the management to quickly review the outcomes of initiatives launched and then adjust the strategy to decrease cost and maximize efficiency.

Customer 360 is a dedicated dashboard for high value customers in line with PNB 360 with only view rights. Currently available for Central/State Government institutions/department PUS and SNA accounts. Customer is also given functionality to download reports in PDF/Excel format. Dashboard will provide graphical and pictorial representation of position of fund, movement of funds, Interest earned by customer, TDS deducted, Interest paid, no of facilities availed, Y-o-Y Comparison, Variation from last quarter, Variation from last Financial Year on T+1 basis etc.

VI. BRANCH NETWORK

1. Domestic: As on 31^st March 2024, the number of branches was at 10,136. The population-group wise branches along-with the percentage share are given as under:

2. International: As on 31^st March, 2024, Bank has presence in 6 countries by way of 1 branch at Dubai (another 1 branch at GIFT City Gujarat also caters to the international business of the bank), 2 subsidiaries (London-UK and Bhutan), 1 joint venture (Nepal), 2 representative offices (Myanmar and Bangladesh).

VII. INTERNATIONAL BANKING

As on 31^st March, 2024, the Bank has 255 branches authorized to handle Foreign Exchange Business which are routing forex transactions through 4 Trade Finance Centers (TFCs) functioning at New Delhi, Chennai, Kolkata & Mumbai. TFCs are specialized for centralized handling of trade transactions and International Service branch is specialized for handling all Inward remittances.

The Bank has 1 Exchange Bureau at Indira Gandhi International Airport to facilitate encashment of foreign exchange currency notes by foreign tourists/ Non Resident Indians (NRIs).

1.    DOMESTIC BUSINESS

The Bank registered a Foreign Exchange Business Turnover of Rs.1,34,868 Crore (Exports and Imports together) for the FY 2023-24.

Bank has an International Service Branch (ISB) functioning at New Delhi for handling Inward Remittances of the Bank as a whole. During FY 202324, Bank handled remittance business of Rs.80,893 Crore.

The Bank has Rupee Drawing Arrangements (RDA) with 8 exchange houses (5 in the Gulf, 1 each in Singapore, UK and Seychelles) to facilitate remittance from NRIs.

The Bank also has remittance arrangement under Money Transfer Service Scheme (MTSS) with Transfast Financial Services Pvt. Ltd. and Ria Money transfer services Pvt. Ltd.

There is a specialized NRI cell for augmenting NRI Business, monitoring of complaints and Help Desk for NRI customers.

2.    OVERSEAS BUSINESS

Overseas business of the Bank stood at Rs. 77,282 Crore as on 31^st March, 2024 registering YOY growth of 20.1 per cent. Bank has two international branches at DIFC Dubai & GIFT City Gandhinagar. Overseas branches are focusing on High Quality Medium/ Long term Assets to build a diversified loan portfolio with low Credit Risk Weight to improve profitability.

Both international branches of the Bank are offering External Commercial Borrowing (ECB), Foreign Currency Term Loan (FCTL) and Trade Finance Products to Indian and overseas customers.

3.    NEW INITIATIVESa.    Launch of new scheme for exporters: A new

export credit scheme-Export Express for MSME customers was launched with competetive rate of interest, service charges & exchange margin.

b.    The Bank has also opened two Special Rupee Vostro Acount (SRVA) accounts.

c.    Multicurrency World Travel Card: The product has a unique feature of multiple currencies loaded in a single card. Bank is offering the cards in 6 foreign currencies.

d.    Trade Finance portal for Trade Finance Products: Exporter and Importer can submit online all types of trade finance request through the portal

e.    Outward Remittance Facility for Resident Individuals through IBS & MBS: The Bank has launched Outward Remittance Facility for resident individuals for remitting funds under Liberalised Remittance Scheme (LRS) through Mobile Banking.

f.    50 branches have been identified as NRI service branches to increase our NRI portfolio.

VIII. BUSINESS DIVERSIFICATIONInsurance Business

1.    Life Insurance: The Bank solicits Life Insurance Business under Corporate Agency Agreement with the following Life Insurance companies:

a.    PNB MetLife India Insurance Co. Ltd (PMLI)

b.    Life Insurance Corporation of India (LIC)

2.    Non-Life Insurance: Bank solicits Non-Life Insurance Business under Corporate Agency Agreement with insurance companies such as The Oriental Insurance Co. Ltd. (OICL), Bajaj Allianz General Insurance Co. Ltd. (BAGIC), Cholamandalam MS General Insurance Co. Ltd. (CHOLA MS), Care Health Insurance Ltd. (CHIL) and Star Health & Allied Insurance Co. Ltd. (SHICL).

The Bank's commission income from insurance business (both life & non-life) stood at Rs.448 Crore during FY'2023-24.

3.    Mutual Funds: Bank is a distributor of Mutual Fund products of the Asset Management Companies namely Sundaram Asset Management Company Limited, Nippon Life Asset Management Limited, UTI Asset Management Company Limited, Aditya Birla Sunlife Asset Management Company Limited, LIC Mutual Fund Asset Management Limited, DSP Investment Managers Private Limited and Franklin Templeton Asset Management (India) Private Limited.

Bank has also tie-up with M/s Finwizard Technology Private Limited (FISDOM) for providing online Mutual Fund investment and robo-advisory services to all its customer. FISDOM is providing commission to the bank on revenue sharing basis.

During FY2023-24, income of Rs.8.60 Crore was earned from Mutual Fund business with a YoY growth of 4.11 percent.

4.    Depository Services: As a Depository Participant, Bank opened 18,334 Demat Accounts during FY 2023-24 against 15,314 in FY 2022-23 with a YoY growth of 19.72 per cent and 24,108 Online Trading Accounts in FY 2023-24 against 18,538 in FY 202223 with YoY growth of 30.05 per cent.

Income earned in FY 2023-24 from Depository services was Rs.7.08 Crore against Rs.6.26 Crore in FY 2022-23.

5.    Application Supported by Blocked Amount (ASBA) & Merchant Banking: The Bank has license to act as Banker to Issue, Debenture Trustee and Merchant Banker. During FY 2023-24, 427 number of issues were handled as against 297 in FY 2022-23.

The amount blocked through ASBA was Rs. 45,716 Crore in FY 2023-24 against Rs 8,211 Crore in FY 2022-23.

6.    Government Business Vertical Centers (GBV):

21 GBVs have sourced total new 7,300 Government Accounts; 84,488 new Savings Accounts out of which 10,301 Salary Accounts and 1,415 Rakshak Plus Accounts along with other Saving Accounts were mobilized during the FY 2023-24.

GBVs have also canvassed Retail Loans of Rs. 852 Crore and Loans & Advances to Govt. departments of Rs.25,361 Crore were sanctioned.

7.    New Initiatives

a.    Insurance Business: The Bank launched product Raahat by Bajaj Allianz General Insurance Co. Ltd. which is a customized Personal Accident Policy for PNB customers for sum insured Rs.6.00 Lakh/Rs.4.00 Lakh with 9 annual preventive health check-ups and unlimited Tele-consultation are available at a premium of Rs.155/Rs.125.

b.    Mutual Fund Business: During FY 202324, Bank has introduced online mutual fund investment and robo-advisory services for all its customers through PNB ONE and Internet Banking, in association with M/s Finwizard Technology Pvt Ltd (FISDOM).

c.    Depository & ASBA Business-Discount brokerage: The Bank, in coordination with M/s SMC Global Securities Limited, has introduced discount brokerage facility, which is very popular in the present trading market. It offers Zero Brokerage for delivery and flat Rs.15 for Intraday trading.

i.    Public Fund Management System (PFMS) Business: A separate scheme launched for Single Nodal Agency Accounts (SNA)/ Corporate Nodal Agency (CNA) accounts with customization to offer features catering to Government bodies and institutes. Some of these features include non-deduction of charges, sweep facility, MIS, and linking to PFMS External System.

ii.    Defence Business: Defence Business Cell (DBC) is established for strengthening PNB's banking business with Indian Armed forces, Paramilitary and Police forces. During FY 2023-24, the Bank's business from Defence Vertical are as hereunder:

•    Number of Defence salary/pension accounts under Bank's Rakshak plus scheme grew 6.33 per cent YoY.

•    In real terms the value of business (Deposit+ Advance) under the Rakshak Plus (Salary/ Pension) grew by 28 percent YoY.

IX. GOVERNMENT BUSINESS

With a view to play a more proactive role in the transfer of funds from Centre and States to various beneficiaries, the Bank has an exclusive Government Business Division which is responsible for Pension, Processing & Disbursement, small savings schemes of the Government, Direct & Indirect Taxes Collections and Currency Chest Management. The Bank is also accredited banker to nine different Central government departments post amalgamation. These numbers will further rise. The Bank has been increasing tie-ups with various State governments to cater to their specific needs.

Key Initiatives taken up under Government Business are as under:

1.    The Bank is disbursing pension of approximately 6.5 lakh pensioners i.e. Central Government, Defense, Railways, Telecom and State Government

2.    More than 3 lakh pensioners availed the Digital Life certificate service to submit their Life certificate. This includes biometric authentication as well as face authentication.

3.    TIN2.0: We are one of the first few banks to go live on the new TIN 2.0 platform of Central Board of Direct Taxes (CBDT) from 1^st December, 2022. Direct Taxes can be paid on the website https://eportal.incometax. gov.in through Internet Banking, Debit Card and Over the Counter (Cheque/DD/Cash)

4.    The Bank is integrated with the new Central Board of Indirect Taxes and Customs (CBIC) e-payment platform - Electronic Cash Ledger (ECL) of Indian Customs Electronic Data Interchange Gateway (ICEGATE), through Internet Banking. It was made live on 1^st April, 2023.

5.    Old Government Business Solution Software (GBSS) upgraded to new GBSS system. The new GBSS is robust enough to handle large volume of data for pension processing.

6.    FASTAG: The Bank is providing FASTAG issuance service also to our customers through ONLINE mode and OFFLINE mode (through all branches)

7.    National Pension System (NPS): All the Branches of the Bank are enabled for NPS transactions. Online facilities for NPS Registration and Contribution is also available through our website (https://www.pnbindia. in/nps.html) as well as PNB ONE App. Total number of NPS subscribers associated with the Bank as on 31^st March, 2024 is 1,16,825. The Bank provides NPS facilities to 27 corporates under Corporate Model.

8.    Govt. e-Market Place (GeM): The Bank is providing the facilities of GPA (GeM Pool Account), e-PBG (Performance Bank Guarantee) & e-EMD (Earnest Money Deposit) on Government e-Marketplace to sellers and purchasers.

9.    Public Financial Management System (PFMS):

The Bank has timely disbursed funds of approximately Rs.3893 Crore to about 1.94 Lakh beneficiaries under PM Kisan Samman Nidhi.

10.    Through active marketing more than 64,635 PPF, 68,585 Sukanya Samriddhi Accounts and 91,677 Senior Citizen Saving Accounts were opened during FY 2023-24.

11.    The Bank has implemented new scheme Mahila Samman Savings Certificate 2023 (MSSC 2023) and opened 5665 accounts as on 31st March, 2024.

12.    The Bank is also in process of providing facility of Online Public Provident Fund (PPF) account opening.

13.    The facility to deposit in SSA (Sukanya Samriddhi Account) and PPF (Public Provident Fund) through NEFT from other Bank third party account has been implemented.

14.    Four Series of Sovereign Gold Bond subscription launched by Government of India were marketed by our branches and 1141 Kgs were sold.

15.    The Bank is having integration with various states and collecting online and offline taxes through their Cyber Treasury Portal and collection of VAT is being done in 19 States.

16. The Bank is one of the major collectors of taxes for Central & State Government.

X. TREASURY OPERATIONS

The Bank's Gross Domestic Investments stood at

Rs. 4,23,305 Crore as on 31^st March, 2024 registering YoY

growth of 5.9% with trading profit at Rs.1,354 Crore.

1.    Overview of System liquidity

System liquidity, on average, remained in surplus during first half of FY 2023-24. However, it subsequently turned deficit over the course of next three months and peaked in January 2024. The situation improved with the liquidity deficit moderating to some extent during February - March 2024. Reserve Bank of India remained agile in its liquidity management through main and fine-tuning operations in both repo and reverse repo throughout the year. Incremental Cash Reserve Ratio (I-CRR) was also introduced as a temporary measure to control excess liquidity in the system due to the return of ?2,000 notes.

2.    Fixed Income (SLR/NSLR)

10 year benchmark yield sequentially glided downwards by 35 bps from 7.40 level as on 31^st March, 2023 to 7.05 level as on 31^st March, 2024. The softening was partly attributable to expectation of increased inflows over the next 12-18 months from inclusion of Govt. securities in JP Morgan Emerging Market Bond Index and Bloomberg Emerging Market Local Currency Index. In addition, easing inflation in the last quarter of FY 2023-24 fuelled market's expectation of Fed rate cuts, however, expectations have moderated from erstwhile six rate cuts in Calendar Year 2024 to utmost two on account of favourable data points despite elevated interest rate levels.

Reserve Bank of India also maintained the repo rate at 6.50% during FY 2023-24 after raising it by 250 basis points the previous year i.e. FY 2022-23. Smaller than expected domestic bond borrowing program for FY 2024-25 and pick up in foreign demand after bond index inclusion announcement also contributed to softening of yields.

3.    Equity & Mutual Funds

FY 2023-24 proved to be a good year for equity markets. The buoyancy can be attributed to expectations of policy continuity, chances of interest rate cuts from the US Federal Reserve and RBI, foreign and domestic investment inflows as well as robust domestic economic expansion. The S&P BSE Sensex closed at 73,651.35, while the Nifty 50 closed

at 22,326.90 on 31.03.2024. Over the past one year, the S&P BSE Sensex gained 24.9 per cent while the Nifty surged by 28.6 per cent.

4. Forex

The Indian Rupee ended FY 2023-24 at 83.40, registering a fall of 1.5 per cent against the US dollar as compared to 7.8 per cent decline in FY 2022-23. The Indian Rupee fared better as compared to other emerging market currencies on account of record foreign portfolio inflows. The pair remained stable during the fiscal despite headwinds in the form of surging oil prices amid geo-political escalations.

XI. CUSTOMER CARE

The Bank fully realizes the importance of customer service and continues to lay utmost priority to render prompt and efficient service to customers. In order to achieve the desired objective, the Bank has formulated a robust Grievance Redressal Policy keeping in view the guidelines issued by Reserve Bank of India on Customer Service. The Bank is ensuring the redressal of the grievances of customers within the framework laid down in the said policy.

1.    The Bank has an on-line Grievance Redressal Management Portal called Centralized Grievance Redressal Monitoring System (CGRMS), which is an in-house portal. Through this system, the customer gets an immediate acknowledgement and can keep a track of the complaint also. Customer Grievances are received via various channels such as:

a.    MD & CEO / Chairman/ Ministry of Finance/RBI etc.

b.    Department of Public Grievance such as Centralised Public Grievance Redress and Monitoring Mechanism (CPGRAM)/ Integrated Grievance Redressal Mechanism (INGRAM)

c.    Contact centers (Toll free/ Tolled numbers)

d.    Internet Banking Service / Mobile Banking app / Corporate Website.

e.    Email at [e-mail]

f.    Social Media such as Facebook, Twitter, LinkedIn and other social media platforms

g.    Post

h.    Complaints in Person at Branch Offices

2.    The status of complaints received by the Bank is reviewed by “Customer Service Committee of the Board”, a Sub-Committee of the Board, on quarterly basis.

3.    The Bank has in place an Internal Ombudsman as per the recommendations of the Damodaran Committee. The system ensures greater transparency in the redressal of grievances by the Bank.

4.    For faster resolution of complaints, the Bank has designated Chief Customer Executive Officer (CCEO) with the rank of Deputy General Manager at Zonal Offices and Chief Manager at Circle offices whom can be approached by the customers for redressal of his grievance. The contact details of CCEOs have also been displayed at Bank's website.

5.    Customer Service Committees in all the branches and Circle Offices look into the quality of customer service rendered and critically examine the feedback/ suggestions for improvement in customer service. These committees meet once in a month where staff and the invited customers interact freely on service-related issues.

6.    A monthly magazine “Customer Speaks” is published in which selected complaints filed by customers and the action taken/resolution provided to the complainants are also mentioned. Appreciation letters issued by customers appreciating the service of officials of the bank are also published in the magazine.

7.    Theme Based Meetings are being conducted at monthly intervals in branches on a pre-decided date and theme to improve awareness among field staff about bank's products and services, and to sensitize them about the issues of maximum importance.

8.    Regular training sessions are arranged at Call Centre for Customer Service Agents (CSAs) so that they can handle customer calls properly and resolve their trivial issues by giving correct/latest information that customer wants about the products/services.

9.    The Bank has state-of-the-art Primary Contact Centers at Gurugram and Noida to provide telebanking services to its customers on 24 x 7 x 365 basis through two leading service providers. In addition to these two primary sites, the Bank has also established two Secondary Contact Centers at Dehradun and Bhopal to provide tele-banking services to its customers in 13 languages.

10.    The customer's complaints are stored in two online portals i.e., CGRMS Portal and Contact Centre's Customer Relationship Management (CRM) Portal. The nature of complaints received at CGRMS Portal are largely Non Digital while in CRM Portal, they are largely Digital transaction related.

11. A total of 14,83,719 complaints were received during the FY 2023-24, out of which 3,53,524 complaints were resolved within T+1 days of its receipt. As such, these have not been treated as complaints. Therefore, the total number of reported complaints received during FY 2023-24 is 11,30,195. The details of complaints received and disposed during FY 2023-24 is as follows:

Particular	Count*
Number of complaints pending at beginning of the Year	23,185
Number of complaints received during the Year	11,30,195
Number of complaints disposed during the Year	11,21,029
Number of complaints pending at the end of the Year	32,351
* Excluding complaints which were resolved within T+1 days of the receipt.

(II. IMPLEMENTATION OF OFFICIAL LANGUAGE

Punjab National Bank has always been a pioneer in the implementation of Official language Hindi. Your Bank continued to make concerted efforts to comply with the instructions received from Department of Official Language, Ministry of Home Affairs, Government of India, Committee of Parliament on Official Language and Department of Financial Services, Ministry of Finance. Your Bank has achieved most of the targets prescribed in annual programme for the Financial Year 2023-24 issued by Department of Official Language, Ministry of Home Affairs, Government of India.

It is the matter of pleasure to inform that during the financial year 2023-24 the Bank has been awarded the 1^st prize under the “Rajbhasha Kirti” award of the Government of India for “A” Region and 2^nd prize given for Bank's in-house magazine “PNB Pratibha”. Five awards were received by various offices of the Bank from the Regional Implementation Office of the Ministry of Home Affairs. Further various offices/staff members of the Bank have won a large number of awards from various Govt. Institutes

1. Actions taken for and progress made in implementation of the Annual Program for Progressive Use of Hindi

a.    The Bank has a well-organized mechanism for implementation of the Official Language, which is functioning well under the supervision of the Official Language Department established at the Head Office. Official Language Department is established in all the zonal offices, circle offices and training centres, which implement the official language policy duly approved by the Board of Directors of the Bank in their offices and subordinate offices and branches.

b.    Intensive monitoring was done to achieve the targets prescribed in the Annual Programme of Department of Official Language, Ministry of Home Affairs. Official Language (OL) Policy of the Bank and Rajbhasha Corporate Action Plan are in place.

c.    Awards were given to winner offices/employees under Lala Lajpat Rai Shield Scheme, other incentive schemes and Hindi competitions to increase the use of Hindi in the Bank.

d.    The Bank's quarterly in-house magazine "PNB Pratibha" and half yearly Hindi magazines of Zonal Offices & other offices are published regularly. Hindi books were made available in Hindi libraries established at various level.

e.    All India level Inter Bank Hindi Essay Competition was organized on the subject “Digital transformation of banking”.

f.    A total of 8 Hindi books were awarded by the Bank under the Original Hindi Book Writing Scheme (for working and retired staff) during the year 2023-24.

2.    Official Language Committees and their meetings

a.    The meetings of the Official Language Implementation Committee of the Head Office were held quarterly under the chairmanship of the Managing Director and Chief Executive Officer.

b.    PNB has efficiently discharged the responsibility of convener of 28 Town Official Language Implementation Committees across the country. Half yearly meetings of these committees were organized regularly and Hindi competitions, Hindi workshops, Hindi seminars etc. were organized during the year.

c.    Quarterly meetings of official    language

committees were organized regularly by all the offices of the Bank.

3.    External Inspection/Official Language Seminar/

Conference

a. A three-day All India Official Language Conference and Review Meeting of the Official Language Officers of the Bank was organized in Delhi by the Head Office under the chairmanship of Executive Director Shri Binod Kumar and in the presence of Mrs. Anshuli Arya, IAS, Secretary, Department of Official Language, Ministry of Home Affairs, Government of India. Intensive monitoring of all offices was done through official language inspection and annual review meetings.

b.    Rajbhasha Seminar was organized by the Head Office on the topic “Global Perspective of Official Language Hindi”. Ms. Kumud Sharma, Vice President Sahitya Akademi and Head of the Department, Hindi Department, Delhi University was present as the chief speaker in the seminar.

c.    Official language implementation was appreciated during the inspections of the Head Office by the Ministry of Finance, Department of Financial Services.

d.    The work done in Hindi was appreciated by the Third Sub-Committee of the Parliamentary Official Language Committee during the inspections of Circle Office: Shimla, Circle Office: Thane, Circle Office: Jaipur, Circle Office: Rajkot and Circle Office: Panipat.

e.    Rajbhasha inspection of Zonal Office, Agra, Circle Office, Bardhaman and Circle Office, Rohtak was done by the Draft and Evidence Subcommittee of the Parliamentary Official Language Committee.

f.    Hindi Day and Hindi Month were celebrated enthusiastically in the Bank. Lala Lajpat Rai Shield was given to the winners by Managing Director and Chief Executive Officer and Executive Directors in the main official language function organized at Head office. Kavi Sammelan was organized and a captivating presentation was given by eminent poets Dr. Ashok Chakradhar and Ms. Madhumohini Upadhyay.

4. Progress made in the use of Hindi in Information

Technology

a.    The website of the Bank is completely bilingual and it opens in Hindi by default.

b.    Facility of Hindi and regional languages are available in ATM.

c.    SMS alerts have been sent to customers in their preferred language (Hindi and regional language).

d.    Online Hindi reporting of all the Branches, Circles, Zones and Divisions of the Head Office was done on the 'Rajbhasha web portal'.

e.    Bilingualization of Finacle and HRMS was done through Linguify software updated version. Along with it, Bilingual facility is available to work on all computers.

f.    Mobile banking app 'PNB ONE' was implemented in the new revamped look in various regional languages including Hindi.

g.    Internet Banking is available in Hindi as well as in regional languages.

h.    A daily Hindi podcast is being released on Banking subject.

i.    Online Hindi courses were introduced for the employees on the Bank's e-learning portal PNB Univ, on passing which the employees are given marks in PAF.

j. Hindi version of WhatsApp Banking is available for the customers.

5.    Special work and programmes regarding the use

of Hindi

a.    The Bank, for the first time, organized a conference for the Heads of 28 Nagar Rajbhasha Karyanvayan Samiti (NARAKASES) in which our Bank is convener. This conference was successfully completed under the chairmanship of Managing Director and Chief Executive Officer of the Bank, Mr. Atul Kumar Goel and the dignified presence of Secretary, Mrs. Anshuli Arya, Ministry of Home Affairs.

b.    A brief booklet of Official Language Policy 'Rajbhasha Path-Pradarshak' was published by the Bank, which was launched by Managing Director and Chief Executive Officer Mr. Atul Kumar Goel and Mrs. Anshuli Arya, (IAS) Secretary, Department of Official Language. This booklet was distributed to all the participants at the third All India Official Language Conference Pune organized by Department of Official Language, Ministry of Home Affairs, Government of India.

c.    Rajbhasha module of Mobile app “PNB Pride” was launched to digitalize the official language implementation in the Bank.

d.    Online module of Hindi knowledge roaster was added in HRMS and other modules including salary slip were made available in bilingual form.

e.    Booklets to learn Hindi through regional languages Gujarati, Punjabi, Bengali, Assamese were published for employees.

f.    Arrangements for training/workshop and translation: Hindi Training was imparted to staff members through Hindi workshops, Unicode Training and Desk Training by HO.ZO.CO and Training Centres.

6.    Bilingual status of circulars/forms/other

documents

a.    During the year, circulars issued by the divisions of the Head Office were uploaded on Bank's Portal in bilingual form

b.    The forms used by customers are also available in Hindi/bilingual and regional languages.

c.    To facilitate the work in Hindi, “Standard Draft” of daily letters/office notes related to various departments is available on the e-portal of the Bank.

d.    Hindi and regional languages were used in publicity and promotional campaigns related to the Bank's schemes and products.

XIII. PNB'S SUBSIDIARIES AND REGIONAL RURAL BANKS 1. DOMESTIC SUBSIDIARIES

a. PNB Gilts Ltd.: FY 2023-24 started with the bond markets witnessing gains, reflecting strong demand for government securities on expectation of a likely shift of stance after the Monetary Policy Committee's (MPC) largely unanticipated move to pause on the policy repo rate. The decline in the US treasury yields also supported the market sentiments. However, yields hardened during the end of the first quarter following MPC's focus on aligning inflation with the target of 4 per cent, which was perceived to be hawkish by the market participants. Domestic bond yields started the second quarter with a hardening bias in response to rising US treasury yields and a strong US GDP data. Towards the end of the second quarter, higher inflation prints and strong economic data led to firming of domestic yields. Third quarter also saw a hardening bias in response to rising US treasury yields, with the domestic 10-yr yield peaking at 7.38 per cent as on 23^rd October, 2023. Towards the end of the third quarter, US yields plunged on the back of dovish tone of the Fed Reserve in its December policy meet and expectation of rate cuts in the coming year. Q4 FY 2023-24 marked some significant moves in both domestic and global bond markets. The 10-year US treasury yields hovered in the range of 4.18 per cent to 4.32 per cent during the quarter, ending the quarter at 4.19 per cent. The swing in yields was broadly in response to the Federal Open Market Committee (FOMC) keeping the policy rates unchanged, thus reinforcing the bets of no further rate hikes by the Fed and a rise in the odds of a rate cut by the Fed in March 2024. On the other hand, the Indian 10-year benchmark bond yields eased from 7.21 per cent to 7.14 percent during January end as Bloomberg Index Services proposed including some Indian bonds in its emerging market local currency index from September 2024 and saw another sharp drop in yields to 7.06 per cent following the announcement of the Interim Budget on 1^st February, 2024. Indian bond yields were range bound for most of March, ending the quarter (Q4) at 7.05 per cent.

During the year, the 10-yr benchmark yield touched a high and low of 7.38 per cent and 6.96 per cent respectively and closed at 7.05 per cent as on 31^st March, 2024. Against the backdrop of uncertain market conditions, PNB Gilts Ltd continued to fulfill all its obligations as a Primary Dealer mandated by RBI both in Primary and

Secondary market. Company posted a Profit Before Tax (PBT) of Rs. 99 Crore during FY 2023-24 vis-a-vis PBT of Rs. (85) Crore during FY 2022-23. Profit after Tax (PAT) amounted to Rs. 69 Crore during FY 2023-24 as against Rs. (77) Crore during FY 2022-23. Capital adequacy remains strong with its Capital to Risk Weighted Assets Ratio (CRAR) at 34.0 per cent as on 31^st March, 2024 well above the regulatory minimum of 15 per cent for Primary Dealers (PDs).

b. PNB Investment Services Limited (PNBISL):

The Company is a profit-making company from the very first year of its operations. During the year ended as on 31^st March, 2024, the Company registered operational (fee-based) income of Rs.8 Crore and total income of Rs.11 Crore as against a fee- based income of Rs.7 Crore and total income of Rs.10 Crore for the year ended as on 31^st March, 2023. Profit before Tax during the period ended as on 31^st March, 2024 was Rs.5.50 Crore as against Rs.5 Crore for the period ended as on 31^st March, 2023.

The Company operates in three verticals, namely Corporate Advisory, Merchant Banking and Security Trustee. In the Corporate Advisory Vertical, during the year PNBISL advised many marquees business groups and corporate clients on various transactions, including debt syndication, debt resolution and other corporate advisory assignments. With in-house expertise and deep understanding of select sectors, PNBISL prepared and delivered credible Techno-Economic Viability (TEV) & Lenders Independent Engineer services (LIE) reports to its clients.

In Corporate Advisory Vertical, during the FY

2023- 24, the company able to complete majorly two Debt Syndication assignments. Company has also completed approx. 20 assignments of U P State Industrial Development Authorities (UPSIDA). Company is now part of Mahatma Phule Renewable Energy and Infrastructure Technology Ltd (MAHAPREIT) Alternative Investment Fund (AIF) promoted by Government of Maharashtra. FY 2023-24 was a significant year for the Debt Resolution (Swiss Challenge) practice of the Company and the Company undertook and completed 8 significant Debt Resolution leading v/s 3 such transactions done in the whole of FY 2022-23. Now with the credentials already being in place company believes the business will only increase in FY

2024- 25.

In Merchant Banking Vertical, during the FY 2023-24, company able to showcase its strengths to the markets in the form of timely filing of documents to regulatory authorities in nearly all the Equity Capital Market (ECM) product verticals i.e., Initial Public Offers (IPOs), Rights Issue and Open Offer assignments.

The Company successfully completed the IPO mandate of Pyramid Technoplast Ltd, raising Rs.153 Crore with the issue being oversubscribed. Apart from this IPO Assignment, the company also completed two other assignments i.e., a small rights issue and open offer assignment.

The growth for trusteeship segment in FY 2023-24 was stagnant and the revenue took a significant hit in the financial year owing to various reasons including the reduction in the overall market pricing of the security trustee assignments, increase in competition.

However, the segment has tried to overcome the challenge by expanding the range of products offered as per the market trends by rendering the services of escrow trustee for one of the major NBFCs. The Company continues to add on new clients and build on its strategy to be a trusted partner of leading banks and corporates.

Going forward, the company is committed to build on its capabilities across business verticals such as credit appraisal & debt syndication services, TEV consultancy, Merchant Banking services and Security Trusteeship services to offer greater value to the parent bank and all its stake holders.

c. PNB Cards and Services Limited (PNBCSL):

PNBCSL is a wholly-owned subsidiary of Punjab National Bank (PNB) incorporated on 16^th March, 2021 in terms of RBI approval letter dated 7th December, 2020 to undertake the non-financial support services related to credit card business of the Punjab National Bank. RBI vide letter dated 13^th January, 2023, has conveyed their approval to PNB for undertaking additional non-financial support services by PNBCSL. As per their approval, PNBCSL may provide the following non-financial support services viz. sourcing, marketing, promoting, publicizing, advertising, soliciting distributing Deposit (Current and Saving Accounts etc.) and Retail Loan Products (Housing Loan, Loan against property, Vehicle Loan, Education loan, Personal loan etc.).

Accordingly, to Leverage its existing infrastructure and expertise, PNBCSL has successfully commenced sourcing for Housing Loans, Vehicle Loans, Education Loans, and CASA products in FY 2023-24.

PNBCSL's geographic footprint grew significantly having 7 Territory offices with a presence in over 50 locations nationwide. This expansion is supported by a team exceeding 400 personnel dedicated to delivering exceptional service to the customers.

PNBCSL played a pivotal role in acquiring customers for the Bank. During FY 2023-24, the Company has served to more than 2.15 Lakh customers, surpassing the 2 Lakh credit card approvals and clocked fresh sanctions of more than Rs.500 Crore in Retail segment.

PNBCSL maintained its profitability trajectory, achieving a net profit after tax of Rs.2.25 Crore for FY 2023-24, demonstrating its continued contribution to the Bank's success.

PNBCSL remains committed to offering high-quality services and expanding its reach to serve a broader customer base.

2. INTERNATIONAL SUBSIDIARIES

a. PNB International Limited (PNBIL): Punjab National Bank (International) Limited was incorporated in the UK on 13^th April, 2006 and registered with the Companies House in England & Wales. The Bank is authorized by the Prudential Regulation Authority ('PRA') and regulated by Financial Conduct Authority ('FCA') to conduct banking Business in UK.

The total deposits increased from Rs. 6,644 Crore as on 31^st March, 2023 to Rs. 6,664 Crore as on 31^st March, 2024, showing YoY growth of 0.30 per cent. Total advance increased from Rs. 7,572 Crore as on 31^st March, 2023 to Rs. 7,726 Crore as on 31^st March 2024, showing YoY growth of 2.0 per cent. In the FY 2023-24, PNBIL recorded a Net Profit of Rs. 90.42 Crore as per Indian Generally Accepted Accounting Principles (IGAAP) and Rs.52.46 Crore as per International Financial Reporting Standards (IFRS).

PNBIL's main business is to provide commercial and retail banking services to different segments of customers, with a focus on the Indian community within the UK. This includes accepting deposits from both retail and corporate clients; lending to retail, SME, and corporate clients; and transaction banking services such as currency remittances. The deposit products primarily include current, savings, term deposits and Individual Saving Accounts. Some of these products such as ISAs (Individual Savings Accounts) and Fixed deposits are also being availed by a wider audience in the UK. The lending products includes real estate lending i.e., Buy to Let- Residential, Commercial, Development Loans and Hotels & Hospitalities, lending to SME and Term loans backed by SBLCs.

b. Druk PNB Bank Ltd (DPNBL): Druk PNB Bank Ltd, Bhutan, Banking Company having its corporate office at Thimphu, Bhutan. It started its operation on 27^th January, 2010, in Bhutan as the country's fourth commercial Bank, with a component of both FDI and joint venture in the Banking Sector. Presently, the Bank has 9 branches and 30 ATMs spread across the country.

Total advances of DPNBL increased from Rs.1,706 Crore as on 31^st March, 2023 to Rs.1,914 Crore as on 31^st March, 2024 i.e. YoY increase of 12.2 per cent.

Total deposits of DPNBL increased from Rs. 2,459 Crore as on 31^st March, 2023 to Rs. 2,590 Crore as on 31^st March, 2024 i.e. YoY increase of 5.3 per cent.

Profit of the Bank has increased to Rs.49 Crore as on 31^st March, 2024 from Rs.33 Crore as on 31^st March 2023. Paid up capital of the Bank as on 31^st March, 2024 is Rs.168 Crore increased from Rs. 84 Crore as on 31^st March 2023 after rights issue in July 2023

3. REGIONAL RURAL BANKS (RRBs): As on 31^st March, 2024, there are nine RRBs sponsored by the bank namely Dakshin Bihar Gramin Bank (DBGB), Patna; Sarva Haryana Gramin Bank (SHGB), Rohtak; Himachal Pradesh Gramin Bank (HPGB); Mandi; Punjab Gramin Bank (PGB), Kapurthala; Prathama UP Gramin Bank (PUPGB), Moradabad; Assam Gramin Vikas Bank (AGVB), Guwahati; Bangiya Gramin Vikas Bank (BGVB), Berhampore; Tripura Gramin Bank (TGB), Agartala and Manipur Rural Bank (MRB), Imphal. These nine RRBs are operating in 9 states namely Bihar, Haryana, Himachal Pradesh, Punjab, Uttar Pradesh, West Bengal,

Assam, Manipur and Tripura covering 185

districts with a network of 4671 branches.

a.    Total Business of sponsored RRBs as on 31^st March, 2024 is Rs. 2,23,646 Crore registering a YoY growth of 9.2 per cent.

b.    Deposits of RRBs are at Rs. 1,41,131 Crore as on 31^st March, 2024. Aggregate Deposits registered a YoY growth of 8.3 per cent.

c.    The Advances of the RRBs as on 31^st March, 2024 stood at Rs. 82,515 Crore with a YoY growth of 10.7 per cent.

d.    As per RBI guidelines it is mandatory for RRBs to meet the regulatory requirement of CRAR of 9 per cent. The RRBs attaining CRAR over and above the regulatory requirement are TGB (24.35 per cent), PGB (16.47 per cent), SHGB (14.87 per cent), PUPGB (13.32 per cent), BGVB (12.48 per cent) and MRB (10.73 per cent). The RRBs having CRAR less than the regulatory requirement are DBGB (2.44 per cent), HPGB (8.16 per cent) and AGVB (8.70 per cent). As an outcome of operational efficiency of 2 RRBs are expected to achieve CRAR of 9 per cent in the next financial year, however more time is needed for DBGB. The recapitalization assistance by Centre/ State will help in improving CRAR.

e.    The sponsored RRBs are in profit (except MRB Imphal). Operating profit of RRBs as a whole stood at Rs.2648 Crore as on 31^st March, 2024.

f.    The RRBs have cumulatively disbursed Rs. 2760 Crore under PMMY/ MUDRA as on 31^st March, 2024, achieving 70.77% of targeted budget of Rs 3900 Crores for disbursement.

XIV. AWARDS AND ACCOLADES

The Bank's efforts have been recognized at various platforms. The Bank has been conferred with the following for initiatives taken in various fields for FY 2023-24:

1.    Awards Certificate for Treasury Strategist of the

Year for leadership and contribution to the Treasury Management by Treasury Summit & Awards 2024 by India Treasury Summit & Awards

2.    Overall 3^rd Rank under EASE Reforms 5.0 with 1^st Runners Up in the themes such as Digital Enabled Customer Offerings and Big Data & Analytics.

3. 9^th Innovative CIOs Awards & Symposium 2024 for 2 projects such as e-BG and PNB Aarambh by CIO Axis.

4.    Best MSME Bank in 10^th MSME Excellence Awards 2024 by ASSOCHAM

5.    Award for "Best Data Quality in Commercial Bureau Segment” for 2023-24 during the Annual Conference of General Managers of PSBs organized by IBA & TransUnion (TU) CIBIL in Mumbai.

6.    Data Excellence Award in Consumer Bureau segment by CRIF Highmark during CRIF InFocus Seminar.

7.    Best MSME Friendly Bank by Chamber of Indian MSME (CIMSME).

8.    At the 19^th Annual Banking Technology Conference, Expo and Awards 2023 Runner-up award for the Best Fintech and DPI Adoption by Indian Banks' Association (IBA).

9.    Excellence in Gender Inclusion Award by Jury of International Inclusion Alliance.

10.    SCOPE Meritorious Award for innovative Practices in Women Empowerment 2016-17-Commendation Certificate.

11.    Warehousing Development and Regulatory Authority has been felicitated for attaining Second position in the category of Public Sector Banks with Highest Pledge Finance.

12.    Recognition for Excellence in Customer Service

at Index of Service Excellence of India (iSEI) Event 2023. Jagdish Sheth School of Management (JAGSoM) has introduced this index.

13.    IBSi Global Fintech Innovation Awards under following 2 categories:

a.    Best Digital Channel/Platform Implementation: Best Adopted Tools & Practices for the PNB ONE-Super App Initiative.

b.    Best Transaction Banking Implementation.

14.    23^rd Greentech Environment Award 2023” for outstanding achievements in "Environmental Excellence" category.

15.    'Green Ribbon Champions' award under the category-'CSR Green Initiative of the Year' for planting more than 1 lakh trees under the project PNB Palaash.

16.    Rajbhasha Kirti First Prize FY 2022-23 at the Hindi Diwas Celebrations held during Third All India Official Language Conference 2023. Rajbhasha Kirti Second

prize for the FY 2022-23 for their in-house magazine PNB Pratibha.

17.    Infosys Finacle Innovation Awards 2023 in Finacle India Banking Connect 2023

a.    Maximizing Customer Engagement - Platinum winner-PNB One - Super App.

b.    Channel Innovation - Gold winner-e-OTS.

18.    APY National Championship and Annual Target Achievement Award.

XV.    FUTURE BUSINESS PLAN OF THE BANK

As the Bank embarks on new journey in the Financial Year 2024-25, it will continue to soar higher and achieve better than before. The Bank will remain focused on business growth by way of small ticket advances and enhancing CASA portfolio.

Growth and Profitability will continue to drive our approach. The Bank will cater to a wider range of financial needs by expanding its product portfolio, exploring newer markets and customer segments, and optimizing operational efficiency.

The Bank will accelerate its digital journey offering seamless online and mobile banking experience. PNB will ensure to utilize AI-powered tools for providing personalized financial solutions to all the customers.

Customer Centricity will be one of the key areas where Bank will pay more attention. Through substantial efforts, PNB will continue to exceed customer expectations by way of offering innovating products and services, investing in employee training and strengthening internal processes.

The Bank will continue to provide adequate attention to overall growth and development of all its employees by investing in training and grooming its people. PNB UDAAN project has been intended to deliver the outcomes by way of self-driven employees of the Bank.

FY 2024-25 promises to be a year of exciting growth and transformation. By focusing on these areas, the Bank will solidify its position in the industry as a leading financial institution.

XVI.    BOARD OF DIRECTORS

1.    Shri Anil Kumar Misra, RBI Nominee Director, ceased to be director w.e.f. 14.07.2023.

2.    Smt. Uma Sankar has been appointed as RBI Nominee Director of the Bank w.e.f. 14.07.2023.

3.    Shri Vijay Dube, Executive Director, completed his tenure on 31.08.2023.

4.    Shri Gautam Guha, Shareholder Director, completed his tenure on 05.10.2023.

5.    Shri Jatinder Singh Bajaj, Shareholder Director, has been elected as Shareholder Director of the Bank w.e.f. 06.10.2023.

6.    Shri Bibhu Prasad Mahapatra has been appointed as Executive Director of the Bank w.e.f. 09.10.2023.

XVII. SECRETARIAL AUDIT REPORT

The Secretarial Auditor in the Reports has made observations in respect of (i) vacancies of Workmen Employee Director, Officer Employee Director, CA Director and one Part-Time Non-Official Director on the Board of the Bank and (ii) non-compliance of Securities & Exchange Board of India (SEBI) Listing Obligations & Disclosure Requirements (LODR) Regulations with respect to composition of the Audit Committee of the Board for the period 01.04.2023 to 18.07.2023. However, with effect from 19.07.2023, the composition of the Audit Committee of the Board is in compliance of SEBI (LODR) Regulations, 2015.

XVIII.    DIRECTORS' RESPONSIBILITY STATEMENT

The Directors confirm that in the preparation of the annual accounts for the year ended 31^st March, 2024:

1.    The applicable Accounting Standards have been followed along with proper explanation relating to material departures, if any;

2.    The accounting policies, framed in accordance with the guidelines of the Reserve Bank of India, were consistently applied;

3.    Reasonable and prudent judgment and estimates were made so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit of the Bank for the year ended 31^st March, 2024.

4.    Proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of applicable laws governing banks in India, and;

5.    The accounts have been prepared based on the principle of “going concern”.

XIX.    ACKNOWLEDGEMENT

The Board of Directors thank the shareholders, valued customers, well-wishers and other stakeholders for their goodwill, patronage and support.

The Board acknowledges with gratitude for the guidance and support of Government of India, Reserve Bank of India, Securities & Exchange Board of India, Insurance

Regulatory and Development Authority of India, Central Vigilance Commission, Stock Exchanges and Statutory Central Auditors of the Bank, in the functioning of the Bank.

The Board also placed on record its appreciation for the valuable contribution made by the members of the Bank's staff at all levels and looks forward to their continued involvement in achieving the future goals.

---

Mar 31, 2023

Financial Year 2022-23 has seen green shoots of recovery in the global economy and improved supply chain financing despite risk of geo-political conflicts, rising inflation and consequent rate hikes by central banks.

For Indian Economy, it was a year of recovery and growth .The second advance estimates (SAE) released by the National Statistical Office (NSO) placed India''s real gross domestic product (GDP) growth at 7.2 per cent in FY 2022-23 majorly driven by private consumption and public investment. The Industry experienced come back in terms of credit and deposits growth. FY 2022-23 experienced favorable business conditions and deleveraging of corporate balances-sheets. The overall size of deposits was around Rs.180 Lakh Crore and credit Rs.137 Lakh Crore yielding a credit deposit ratio of 75.8 per cent Growth in deposits at 9.6 per cent was higher than that of last year which was 8.9 per cent. The increase in interest rates by banks to mop up deposits helped in this effort. The growth in credit remained 15.0 per cent which was 11.2 percent last year. It was due to improvement of economic activities.

Punjab National Bank performed well up to the expectations of its stakeholders and exhibited reinforced performance during FY 2022-23. The Bank''s Business reached the level of Rs. 21.66 Lakh Crore with a quantum increase of Rs. 2.35 Lakh Crore over previous year. Total deposits and Gross Advances both showed the double digit growth. As on 31^st March, 2023, Deposits stood at Rs. 12.81 Lakh Crore while Gross Advances stood at Rs. 8.85 Lakh Crore.

Amongst Advances, Retail, Agriculture and MSME (RAM) Advances registered the growth of 20.85 per cent wherein Retail showed the growth of 41.62 per cent on YoY basis. In Retail Segment, Flousing Loan, Vehicle Loan and Personal Loan exhibited the growth of 10.92 per cent, 30.62 per cent and 48.87 per cent respectively.

Digitalization remained the focus area of the Bank as Bank came up with 35 Digital journeys towards better customer experience and improved Turn Around Time (TAT). Some of such journeys included Pre-approved Personal Loan, Pre Approved pensioner Loan, Pre Qualified Credit cards, Pre Approved e-mudra Loans, etc. This provided Bank an edge over its competitors in the Industry and enhanced delivery experience for the customers. Customer services remainedz

on top of the agenda of the Bank and digitalization added pace to improve the same in order to remain competitive and growing.

Asset quality of the Bank improved during the year through number of measures adopted by the Bank towards recovery and underwriting standards. The Bank''s GNPA per cent came down to 8.74 per cent as on 31^st March, 2023 from 11.78 per cent as on 31^st March, 2022. Net NPA per cent also went below 3 per cent to 2.72 per cent as on 31^st March, 2023 from 4.80 per cent as on 31^st March, 2022. Provision Coverage Ratio of the Bank improved to 86.90 percent as on 31^st March, 2023 from 81.60 per cent as on 31^st March, 2022.

At PNB, Human resources is considered as important ingredient in the success of the organization. FY2022-23 was landmark year for the bank from HR perspective as the bank adopted HR Transformation. It''s a tool that will aid the bank in efficiently utilizing its human resource by deploying the skilled staff at the appropriate place. Also, tool will help the bank in differentiating between performer and non performer and provide adequate rewards to the performer and proper skill training and learning to improve performance.

"Against this backdrop, your Board of Directors have pleasure in presenting the Annual Report of your Bank for the year ended 31^st March, 2023 (FY2022-23) along with its audited Annual Financial Statements".

BANK''S PERFORMANCE

I. FINANCIAL PERFORMANCE AS ON 31^st March, 2023

1. Topline

a. Total Business stood at Rs. 21,65,844 Crore vis-a-vis Rs. 19,31,322 Crore, registering YoYgrowth of 12.14 percent.

b. Total Deposits stood at Rs. 12,81,163 Crore as on 31^st March, 2023 as against Rs. 11,46,218 Crore as on 31^st March, 2022, showing the growth of 11.77 percent.

c. CASA Deposits was at Rs.5,38,015 Crore as on 31^st March 2023 as against Rs. 5,33,654 Crore as on 31^st March, 2022.

i. Current Deposits was at Rs.74,028 Crore as on 31^st March, 2023

d. Gross Advances stood at Rs. 8,84,681 Crore as on 31^st March, 2023 against Rs. 7,85,104 Crore as on 31^st March 2022, recording the growth of 12.68 percent.

e. Retail Agriculture MSME (RAM) Advances was at Rs.4,69,981 Crore as on 31^st March, 2023 vis-a-vis Rs. 3,88,910 Crore as on 31^st March, 2022, showing the growth of more than 20 per cent on YoY basis,

i. Retail Advances was at Rs. 1,97,698 Crore as on 31.03.2023 registered the massive growth of 41.62 per cent on YoY basis.

ii. Agriculture Advances was at Rs. 1,46,105 Crore as on 31.03.2023 with growth on 14.34 per cent on YoY basis.

iii. MSME Advances was at Rs.1,30,178 Crore as on 31.03.2023.

iv. Corporate and other segment was at Rs.

3,79,785 Crore on 31.03.2023

v. Share of RAM w.r.t. Domestic Advances was at

55.3 per cent as on 31^st March, 2023 vis-a-vis 51.2 per cent as on 31^st March, 2022.

2. Bottom Line

a. Operating Profit of the Bank was at Rs. 22,529 Crore inFY2022-23showingYoYgrowthof 8.5percent. It stood at Rs. 20761 Crore. In FY 2021-22.

b. Net Profit of the Bank was at Rs. 2507 Crore in

FY 2022-23.

c. Net Interest Income was at Rs. 34,492 Crore in FY 2022-23 vis-a-vis Rs. 28,694 Crore, registering the growth of 20.2 per cent on YoY basis.

3. Asset Quality

a. Gross NPA of the Bank stood at Rs. 77,328 Crore as on 31^st March, 2023, improving from the level of Rs 92,448 Crore as on 31^st March, 2022.

b. Gross NPA % exhibited the decline of 304 bps from a level of 11.78 per cent as on 31^st March, 2022 and

c. Net NPA of the Bank improved from as high as Rs. 34,909 Crore as on 31^st March, 2022 to Rs. 22,585 Crore as on 31^st March, 2023.

d. Net NPA % declined by 208 bps from a level of 4.80 per cent as on 31^st March, 2022 and stood at 2.72 per cent as on 31^st March, 2023.

4. Key Ratios

a. Net Interest Margin improved to 3.06 per cent in FY 2022-23 from 2.71 percent in FY 2021-22.

b. Cost of Deposits was at 4.10 per cent in FY 2022-23 as against 3.99 per cent in FY 2021-22.

c. Yield on Advances increased to 7.16 per cent in FY 2022-23 from 6.79 per cent in FY 2021-22.

d. Yield on Investment increased to 6.57 per cent in FY 2022-23 from 6.29 per cent in FY 2021-22.

e. Return on Average Assets was at 0.18 per cent in FY 2022-23

f. Business per employee improved to Rs 21.64 Crore as on 31^st March, 2023 from Rs. 19.41 Crore in 31^st March, 2022.

g. Business per branch improved to Rs. 209.53 Crore as on 31^st March, 2023 from Rs. 187.73 Crore as on 31^st March, 2022.

5. Capital Position

The capital adequacy of the Bank improved during the financial year on account of capital raising by the Bank coupled with improved profitability. During FY 2022-23, Bankhas raised Rs.4000 Crore through Tier-ll Bondsand Rs. 4214 Crore through AT-1 Bonds. The Bank continued with its focus on sustainable business growth by targeting better rated borrowers with low risk profile. Going forward, the Bank is strategically well placed to meet the growing credit needs of the economy.

Key Highlights

a. The Capital Adequacy Ratio of the Bank recorded increase by 100 bps to reach at 15.50 per cent, as of 31^st March, 2023, with AT-1 capital at 1.47 per cent and Common Equity Tier-1 (CET-1) at 11.22 percent.

b. Risk Weighted Assets (RWA) of the Bank were optimized to Rs. 6,58,982 Crore as on 31^st March, 2023 on account of focus on better rated accounts and churning of portfolio of the Bank and registered Y-o-Y growth of 9.68 per cent as against 12.68 per cent growth of advances during same period.

II. OPERATIONAL HIGHLIGHTS

1. Key Digital Initiatives & Achievements

PNB has embarked upon an ambitious digital transformation program. PNB has designed more than 35 digital initiatives across lending (Retail, MSME, Agri and Corporate), liabilities, Third-party products, and Asset Quality. Of these, The Bank is "Industry Leader" in the following digital initiatives

a. E-OTS (Express-One Time Settlement) for E2E digital settlement approval process for NPA Accounts having o/s balance upto Rs. 10 Lakh.

b. Digital journey for New To Bank (NTB) Credit Card:

Web-based interface for NTB customers to apply for Credit Card online

c. Credit Card Linkage to UPI: Enablement of Credit Card linkage to UPI through Virtual Payment Address (VPA)

d. Credit Card against Fixed Deposit: E2E digital journey for Existing to Bank (ETB) customers to avail the facility of Credit Card against FD

e. Co-Lending portal: Simplified Straight Through Processing (STP) based solution aiding collaboration with NBFCs having low API capabilities

f. Aadhar-based registration on Mobile App PNB ONE:

''Self-register'' method allowing customers to register on PNBOnevia Aadharauthentication

g. Fintech on-tap portal: Platform to evaluate and empanel FinTechs on a unified digital interface

h. Bharat Bill Payment System (BBPS) for loan EMI: EMI

repayment using BHIM App and other BBPS supported apps like GPay, PayTM, PhonePe, etc.

i. New TIN (Tax Identification Number) 2.0 platform:

We are one of the first banks to go live on the new TIN 2.0 platform of Central Board of Direct Taxes (CBDT) from 1^st December, 2022.

2. Key Structural and Cost Rationalization Initiatives

a. Three Divisions such as Customer Acquisition, Retail Liability Business and Credit Card & Merchant Acquiring Business have been merged to form Business Acquisition and Relationship Management Division (BA and RM Division) to provide focused approach on acquisition of liability side Business and Marketing of Bank''s Products and Services. New vertical like Digital Banking Transformation was also formed to give focused attention to digitalization.

b. Rationalization of 2 Zonal Offices, 23 Circle Offices to achieve cost-efficient admin structure.

c. Rationalization of 431 unprofitable offsite ATMs completed; another 500 planned.

d. Rationalization of more than 140 branch offices during FY'' 2022-23

e. Rationalization of 20 cr monthly SMSs to reduce cost overhead.

3. HRTransformation-Key Initiatives

Human resource is the most important asset for any organization involved in providing service and therefore it is essential that organization undertakes steps for skilling, upskilling, reskilling, increasing efficiency of human assets for overall growth of the organization. The Bank assigns high importance to the same and takes up various initiatives from time to time to develop the human resources for taking up higher and newer roles and responsibilities.

Taking a step further in this direction, a comprehensive HR Transformation process has been initiated in the Bank with the focus on improving employee productivity, strengthening various systems and procedures through system driven data & tools in the following ways:

a. Market-linked targets for each branch and Clarity of roles & expectations from each employees with well-defined, measurable Key Responsibility Areas (KRA).

b. Comprehensive leadership development program to prepare future Bank leaders on functional and behavioral aspects.

c. Personalized, role-based training interventions to upskill functional capabilities and Performance linked rewards to acknowledge & motivate contributors.

4. DIVIDEND

Board of Directors of the Bank has recommended a dividend of Rs.0.65 per equity share (32.5 per cent) of face value of Rs.2/- each for FY 2022-23, subject to declaration/approval of the shareholders at the 22^nd Annual General Meeting of the Bank.

III. ASSET QUALITY

The Bank was able to reduce Gross NPAfrom the level of Rs.92,448 Crore as on 31^st March, 2022 to Rs.77,328 Crore as on 31^st March, 2023. Focus on asset quality continues to be one of the top priorities for the Bank. Provision Coverage Ratio (PCR) including TWO continued at satisfactory level of 86.90 per cent as on 31^st March, 2023.

1. Recovery & Upgradation: Total Recoveries improved to Rs. 24,576 Crore for FY 2022-23 from Rs. 21,041 Crore in FY 2021-22. Of this, total Cash Recoveries (Cash Recovery Recovery in TWO Rl) improved to Rs. 19,806 Crore for FY 2022-23 from Rs. 15,788 Crore in FY 2021-22.

2. Upgradation through Resolution Mechanism: The Resolution Cell was created to exclusively deal with Restructuring/Resolution of NPA accounts and recovery in National Company Law Tribunal (NCLT) cases. The details regardingthe same is as under:

Restructured Accounts (Amount Rs. in Crore)
	Total Sanctioned
	No. of A/c''s	Amount
FY 2022-23	09	1129.06

Further, a sum of Rs.3,206 Crore was recovered in NPA accounts under IBC in NCLT.

3. Mega E-auctions: During FY 2022-23, 23,315 properties were uploaded on e-Bikray portal. Out of which, 1,657 Immovable Properties (IPs) were auctioned successfully.

4. Sale of Assets to Asset Reconstruction Company (ARC): Details of financial assets sold to Securitization/ Reconstruction Company (SC/RC) for Asset Reconstruction is as under:

(Amount Rs. in Crore)
Items		FY 2022-23
i.	Number of Accounts sold to ARCs	7
ii.	Book Outstanding of Accounts sold	1409.12
iii.	Aggregate Consideration received	617.71

5. Initiatives taken to Improve Asset Quality during FY 2022-23

a. War against NPA campaign

i. Dedicated tele-calling campaigns and rigorous field visits to N PA borrowers

ii. Field functionaries are Involved for targeted recovery actions

iii. Launched 21 SASTRA booklets containing strategy and tactical procedures to increase recovery

b. Digitization of recovery efforts

i. Launch of industry-first digital OTS offering for NPA recovery for eligible a/cs upto Rs 10 lakh.

ii. Recovery portal -SAMARTH underdevelopment

c. Digital e-OTS journey for robust recovery- This

provide instant and easyloan repayment option.

i. e-OTS is a digital OTS approval process on filtered NPAAccounts having outstanding amount up to Rs.10 Lakh, in which all the steps from applying for OTS to sanctioning of OTS & steps involved thereafter are automated. The solution has been rolled out through PN B official website & PN B ON E App.

ii. PNB is the first Bank to launch such kind of an online automated OTS approval process.

iii. To enhance the outreach of available Special OneTime Settlement Scheme (SOTS) and to target small NPA Accounts, e-OTS can prove to be a very effective tool in the recovery process.

iv. Settlement approval process shall be expedited for small loan NPA accounts and OTS approval TAT will get reduced substantially.

v. The recovery generated through this process, will have a positive impact on the overall profitability of the Bank, especially in DB3and Loss accounts.

vi. Convenience to eligible NPA Account borrowers as under e-OTS process, Sanction Letter and No Dues Certificate shall be generated online.

d. Overhaul of Outbound Call Center

i. Technology and process enablement of outbound Call Centres to increase efficiency.

ii. Agent ramp-up & robust Standard Operating Procedure (SOP) for SMAO, SMA1, and SMA2 calling.

IV. INFORMATION TECHNOLOGY (IT) AND

DIGITALIZATION

Progress in Digital Banking

(Number in Lakh)
Channels	31.03.22	31.03.23	Growth
			Absolute	%
Internet Banking Users	340	392	52	15.3
Mobile Banking Users	338	406	68	20.1

Digital initiatives and journeys: For delivering superior customer experience and process excellence following initiative were taken.

LIABILITY:

1. In order to reduce TAT and improve customer service, the Bank introduced the following three products:

a. Tab Based Saving Account (SA) Opening

b. Insta Saving Bank (SA) Account

c. Tab based Current Account (CA) Opening

2. Public Financial Management System (PFMS) 2.0 Integration with PFMS External System Model 1

3. FIP (Financial Information Provider) Account Aggregator: Enablement of account aggregation service for PNB.

4. Implementation of Finger Print Image Recognition (FIR) Finger Miniature Record (FMR) in Aadhaar based biometric authentication at BC Location.

5. Deposits in PPF accounts through NEFT: A new

facility has been provided to customers for depositingin PPFaccountthrough NEFT.

6. Customize single API call for Instant eKYC through BC location

7. CKYC bulk email: Now the customers receive mails on their registered email ids intimating their CKYC details as per PMLA(Maintenance of Records) Rules, 2005.

8. Implementation of SMS to waitlist customer in Locker Module

9. Cash Deposit off-us facility has been made live and through this facility our bank customer visits other bank''s BC location fordepositingcash &vice versa.

lO.Implementation of Green PIN functionality in case of World Travel Card and Prepaid cards

ll.Standardization of SMS Alerts to customers: SMS

alerts be sent when our bank customer visits other banks BC location fordepositing cash&vice versa.

RETAIL

1. Pre-Approved Personal Loan to existing customers (Central Govt. /State Govt. / PSU/ PVT.

Employees) in Internet Banking & PNB ONE:

Financial assistance to the Bank''s existing customers who are salaried (Govt, employees /PSU''s)fortheir personal needs.

2. Pre-Approved Personal Loan on the basis of Total Relationship Value (TRV), Quarterly Average Balance (QAB) and Top Up Digital Personal Loan to existing Housing Loan/Vehicle Loan/Personal Loan Borrowers: In order to give boost to digital lending, new variant of “Pre-Approved Personal loan to existing Car loan, Home loan and Personal loan borrowers, in addition to Pre-Approved Personal Loan facility to existing customers (Central Govt./ State Govt./PSU/PVT. Employees and Pensioners) has been launched by the Bank

3. Pre-Approved Pensioner Loan: Financial assistance (through Personal Loan) to the Bank''s Customers whose pension is drawn through our Bank.

4. Pre-Qualified Credit Card : To strengthen and broaden our credit card portfolio and also in an endeavor to extend our digital products, the Bank launched Pre-Qualified Credit Card through which selected customers of PNB can apply PNB Credit Card in just few clicks

5. e-OD against offline FD: Online Overdraft Facility (e- OD) through PNB ONE against offline fixed Deposit also.

6. Credit Card Digital On-boarding

7. Debit Card EMI (Buy now Pay Later): Debit Card EMI (Offline) on POS machine

8. PNBAgni-RakshakforPNB Rakshak Plus scheme-SBARK made live.

MSME

1. Pre-approved e-Mudra loans: Financial assistance to the Bank''s existing customers/entrepreneur with Maximum Amount of Rs. 50,000/-

2. Pre-approved Business Loan: To offer straight through digital lending loan facilities above Rs. 1.00 Lac to Rs. 10 Lakh under Business Loan

3. PNB e-Mudra Scheme: End to end digital lending upto Rs.1.00 Lakh has been launched.

AGRICULTURE

1. Digital Journey of Agriculture Loan Segment: KCC

Renewal < Rs.1.6 Lakh: Digital Renewal of KCC has been started on the following channels also:

a. Through SMS/Missed Call/ Outbound Interactive Voice Response (OIVR)

b. Through PNB ONE App; PNB Internet Banking & PNB Corporate Website.

2. Easy Renewal upto Rs 10.00 Lakh : End to end digital renewal will be done for all eligible borrowers having exposure upto Rs.10.00 lakh.

3. Digital Journey of PNB Kisan Tatkal Rin Yojana: End to end Digital Journey for PNB Kisan Tatkal Rin Yojana to give hassle free digital experience and ease to small farmer borrowers.

4. Digital KCC journey through Jansamarth Portal:

Bank customers can avail KCC loan up to Rs. 1.60 Lakh through Jansamarth Portal. Entire loan journey from loan application till KCC account opening completes within Jansamarth portal in a paperless and hassle free manner.

ASSET QUALITY& RECOVERY

1. Loan Repayment through Corporate Website: To facilitate Term Loan EMI Repayment through PNB Corporate Website, customer can visit PNB Corporate website, click on link and enter loan account number and amount to be paid and make payment.

2. Express One Time Settlement (e-OTS) Portal: The Bank launched first of its kind End to End Pre-Approved One Time Settlement (PAOTS) system with focus to automate the OTS process in NPA Accounts up to Rs.10 Lakh.

3. RinnSetu Co-Lending Development Platform (CLDP) Portal: Web Portal has been developed through which leads are going to be generated through various Co-Lending partners, and those leads shall be processed through this portal for sanctioning of loans.

GOVERN M ENT BUSIN ESS

1. SMS alerts to Customers for informing date of maturity of PPF accounts

2. 24*7 deposit in Public Provident Fund (PPF) &

Sukanya Samridhi Accounts (SSA) through internet banking/PNB ONE Passbook Printing with Additional Transaction Information.

FOREX

1. Dubai International Financial Centre(DIFC): Separate website created for overseas branch-PN B Dubai Website- https://pnbdubai.com

2. New facility has been implemented for TDS certificate (26Q) generation on request of customers using the Bank''s IVR.

3. Implementation of TIN 2.0 (Tax Information Network) for Online and Over The Counter (OTC) Mode of Payments.

4. CBS Trade Finance module for sending payment advice in the email to customer through Bulk mail solution: Changes has been made in existing system to link the payment advice through mail automatically on realization of Bills & Remittance in CBS.

MOBILE BANKING (PNB ONE) & INTERNET

BANKING

1. PNB ONE Registration Without Debit Card: With introduction of this alternate on boarding process, customers can avail PNB ONE without any hindrance and can enjoy banking services from anywhere

2. In PNB ONE - Scan & Pay and UPI Payment Using IFSC & Account Number: Keeping in view of emerging need of customers for quick payment, Scan & Pay feature has been provided to allow users to transfer money using QR code - Bharat QR code & U PI QR code through PN B ON E.

3. Onboarding for PNB ONE Using Aadhaar OTP: To

increase the adoption of PNB ONE and further facilitate the customers, “Aadhaar OTP" as additional authentication medium for Self Registration in PNB One has been introduced.

4. Replacement of Transaction Password with Transaction Pin (TPIN) For PNB ONE: To make PNB One more user friendly, Transaction Password has been replaced with 4-digit Transaction PIN (TPIN).

5. CASH @ PNB- CARDLESS cash Withdrawal:

Card-less Cash Withdrawal is a service which

enables customer to withdraw cash at PNB ATMs without holding any physical or virtual card. The facility is available to customers registered for IBS and PNB One.

6. OTP Waiver upto Rs. 5000/- in SCAN and PAY in PNB One: For customer''s ease & to increase use of PNB One, all QR payments up to Rs.5000/- can be done using 4-digit Transaction PIN (TPIN) only instead of TPIN & OTP both.

7. Loan repayment facility through Bharat Bill Payment Services (BBPS) and PNB corporate website: With these two newly added channels a customer can repay the Term Loan from accounts of other banks also.

8. Online Self Registration of Sole Proprietor in Retail Internet Banking & PNB One: To enhance digital services to customers, the facility has been extended to proprietorship concern also.

9. OTP on E-MAIL in Retail Internet Banking: To

facilitate our customers, users of Retail Internet Banking get OTP over E-mail

10.SAFETY RING in PNB One & Internet Banking:

This enables a customer to set limit on maximum withdrawal of funds from total amount of Term Deposit accounts through all digital channels. Once the limit is set, the Term Deposits will not be broken/withdrawn/used for loan against Term Deposits through IBS/MBS beyond the limit set by the customer, unless a modification for the same is done.

ll.Customer can now check his/her KYC Status like KYC Date, CKYC Number and KYC Due Date through PNB One.

12.lmmediate Payment Service (IMPS) or Quick Fund Transfer using IFSC and account number through PNB One /Internet Banking: PNB One/ Internet Banking now allows Quick Fund Transfer up to Rs. 10,000/- without adding beneficiary using IMPS-IFSC& within Bank.

13. Addition/Updation of Nominee functionality in IBS/M BS for convenience of customers.

14. Debit Freezing of Account through IBS/MBS as a security measure for safety of customer.

15.lmmediate Payment Service (IMPS) for Corporate IBS Customers.

16.Showing emergency Services in one Tab in PNB One.

a. Earlier services: Hotlist Debit Card, Stop Cheque, Generate Green Pin.

b. Addition: Report Lost Credit Card, Set Limits, Block UPI, Debit Freeze, Restrict FDfore-OD.

17. PNB SHOPPE (E-market place) in PNB One and Internet Banking: Bank introduced PNB Shoppe in PNB One and Internet Banking. PNB Account holders will now be able to earn extra rewards for their day to day shopping needs

18. QR code generation through PNB One and Retail Internet Banking: QR Code Generation facility has been introduced in PNB One and Retail Internet Banking. Customers can now display QR Code to receive payments instantly through UPI

19. Banking Services through WhatsApp: Bank has introduced Banking Services through one of the most popular application - WhatsApp (in Hindi & English Language) with features such as Balance Inquiry, Last 5 Transactions, Cheque Book Registration and Stop Cheque Facility.

UPI

1. Credit on UPI- Enable linking of RuPay Credit Card on UPI for making merchant payments.

2. UPI Lite-The customers can make small payments of up to Rs 200/- using on-device "wallet”.

3. Onboarding in UPI Using Aadhar OTP-

Authentication In lieu of Debit Card for Customer On-boarding on UPI. In lieu of debit card, customers can now set UPI pin using Aadhaar number registered in bank.

4. Aadhaar OTP Based On-boarding in lieu of Debit Cards: Customers can set UPI pin using Aadhaar numberand OTP.

5. Unified Dispute and Issue Resolution (UDIR)-Enhancing complaint handling & resolution process for all UPI users: With Implementation of UDIR, customers can initiate status enquiry & online settlement for UPI suspect/time-out transaction instead of waiting for reconciliation on

T lday.

6. Set UPI PIN through Virtual Debit Card:

Customers can set UPI PIN through virtual debit card, in addition to physical debit card and Aadhaar.

7. Implementation of Operating Circular (OC)-153: Geo-location capturing in BHIM PNBApp.

8. BHIM 2.0: Implementation of recurring mandates in BHIM PNBApp.

9. Blocking UPI through IVR: Customers can block UPI through bank''s IVR number

10. e-RUPI for Department of Tribal Welfare, Tripura:

As per government initiative to issue E-RUPI vouchers for various DBT schemes, bank has partnered with Department of Tribal Welfare, Tripura for providing assistance to tribal students for hostel accommodation.

11. UPI 123PAY: Customers can use UPI through IVR based channel, which would benefit the feature phone users and customers in low connectivity zone

12. Auto-Pay functionality in BHIM PNB app:

Customers can create recurring mandates through BHIM PNB app for scheduled/recurring payments

13. BHIM 2.0- Implementation of recurring mandates in BHIM PNBapp.

Cash Management Services (CMS)

Integrated payments and collection services (iPaCS) for corporate and institutional customers: The first module of iPaCS system to go live is the Integrated Payments services which enables the corporate/ institutional customers to initiate bulk payment transactions through various modes by way of a file-upload through the Corporate Front-end or by automating the entire process by way of dedicated Host-to-Host (H2H) interface (both Secure File Transfer Protocol (SFTP) and Application Programming Interface (API) based) with their Enterprise Resource Planning (ERP) systems.

Fintech Portal

Web based Fintech portal enabling fintechs to request for empanelment in bank: Fintech companies to register on Bank''s Fintech portal as per selection criteria and submit their proposal for empanelment in our Bank. This facility will help bank to engage with new FinTech Companies by onboarding them via empanelment process and on tap basis to cater to bank''s requirement in various segments/domains.

V. MANAGEMENT INFORMATION SYSTEM

Analytics Centre of Excellence (ACoE): Bank believes in harnessing the power of both big data and small data not only to drive decision-making and operational excellence but also to provide personalized experiences to increase customer delight. Bank also aims to set-up analytical function in the Bank and move towards data-driven organization.

To align with the present and future strategic business requirements of PNB, to gain competitive edge and to cater to the needs of creating advanced digital capabilities for Bank, Model based business leads are being generated on various personal segment.

Enterprise-Wide Data Warehouse (EDW): The Bank has operational Enterprise Data Warehouse project catering various analytical/statutory/ regulatory and reporting/ dash-boarding requirement with data from 60 plus source systems being integrated into EDW. All downstream applications are receiving data through EDW and also all data requirements for various digital journeys are catered.

Data Analytics: The Bank has set up a Data Analytics Centre of Excellence (CoE) with an objective of setting-up analytical function to provide insights. Analytics is being conducted on broadly three verticals- Business, Control and Support, with objective of new value-creation, cross-sell and up-sell opportunity, increasing revenue, cost reduction, product enhancement, channel optimization, default loan prediction, maximizing digital footprint and improve risk profiling of the customer base. Data Analytics has also initiated steps towards setting up of analytical functions in the bank which is to be aligned with business strategy. Analytics 360 is a step towards bringing insights in day to day business decision making. Statement analyzer, Customer''s propensity score, customer''s digital profile score & collection propensity score are few initial use cases being developed. Analytics driven various digital journey have been undertaken such as Pre Approved Personal Loans (PAPL), Pre Approved Business Loan (PABL), Debit Card EMI, e-

RENEWAL, e-GST EXPRESS, Pre Qualified Credit Card (PQCC) etc.

Next Level Reforms: With EDW in Place, the Bank is well prepared to achieve the Action Points under next level reforms in PSBs for short Term and Long-Term targets like digital transformation & enhancement, Big Data Analytics, adoption of change in Banking Technology, focused use of Fin-Tech and improvement in Employee engagement through Analytics.

VI. BRANCH NETWORK

1. Domestic Presence: As on 31^st March, 2023, the number of branches were at 10,076. The population-group wise branches along-with the percentage share are given as under:

2. International Presence: As on 31^st March, 2023, Bank has its overseas presence in 6 Countries by way of 1 branch at Dubai (another 1 branch at GIFT City Gujarat also caters to the international business of the bank), 2 Subsidiaries (London-UK and Bhutan), 1 Joint Venture (Nepal), 2 Representative Offices (Myanmar and Bangladesh).

VII. INTERNATIONAL BANKING

As on 31^s1 March, 2023, there were 233 branches authorized to handle Foreign Exchange Business and 4 Trade Finance Centers functioning at New Delhi, Chennai, Kolkata & Mumbai specialized for centralized handling of trade transactions and International Service branch for all Inward remittances. The Bank has 6 Exchange Bureaus at important tourist centers to facilitate encashment of Foreign Exchange Currency Notes by foreign tourists/NRIs.

1. Domestic Business

The Bank registered a Foreign Exchange Business Turnover of Rs.1,39,990 Crore (Exports and Imports together) for the FY 2022-23 registering YOYgrowth of 11 percent.

We have an International Service Branch (ISB) functioning at New Delhi for handling Inward Remittances of the Bank as a whole. During FY 2022-23, Bank handled remittance business of Rs.67,805 Crore.

Our Bank has Rupee Drawing Arrangements (RDA) with 13 exchange Houses (7 in the Gulf, 1 in Singapore, 2 in the USA, 1 each in UK, Canada and Seychelles) to facilitate remittance from NRIs.

The Bank also has remittance arrangement under Money Transfer Service Scheme (MTSS) with Transfast Financial services Pvt. Ltd. and Ria Money transfer services Pvt. Ltd.

2. Overseas Business

Overseas business of the Bank stood at Rs.64,440 Crore as on 31^st March, 2023 registering YOY growth of 37 per cent. Overseas branches are focusing on High Quality Medium/ Long term Assets to build a diversified loan portfolio with low Credit Risk Weight to improve profitability.

3. Steps Initiated for Forex Business growth:

a. 87 Export Promotion Council (EPCs) have been visited on Pan India basis during the FY 2022-23. Further, all the Zonal offices continue liasoning with Export promotion councils for sourcing new relationships.

b. 153 Exporter/ Importer meets were conducted on Pan India basis to address their grievances in respect of Forex business during FY2022-23.

c. Trade Finance portal forTrade Finance Products:

Exporter and Importer can submit all types of tradefinance request through the portal.

d. Outward remittance facility for Resident Individuals through Net-Banking: The Bank launched Outward Remittance Facility for resident individuals for remitting funds under LRS through Internet Banking. This gives ease to retails customers for remitting for the purpose of Gift, Donation, Travel (Business, Pilgrimage, Medical Treatment and Education) and Maintenance of close relatives.

e. A facility of sending direct intimation to customers in respect of Inward remittance was introduced. International Service Branch (ISB) has started sending mails directly to customers with respect to their inward remittances which reduces the TAT of inward remittance transactions.

f. Dedicated customer care desks are made available in all Trade Finance Centres (TFCs) to help trade finance customers. The contact details are also placed on PNB Corporate website.

g. A dedicated email ID [e-mail] has been created exclusively for trade finance customers for their forex related operational issues which is directly being handled at Head Office.

h. International Banking Unit (IBU), GIFT City Gandhinagar branch of the Bank was opened on 08.04.2022. The major products offers in the branch are Cash Management Service, Forex Services, External Commercial Borrowings, Foreign Currency Term Loan, Trade Finance etc,. Branch booked profit of Rs.28.85 Crore in FY 2022-23.

VIII. BUSINESS DIVERSIFICATION

Insurance Business

1. Life Insurance: The Bank solicits Life Insurance Business under Corporate Agency Agreement with the following Life Insurance companies:

a. PNB MetLife India Insurance Co. Ltd (PM LI)

b. Life Insurance Corporation of India (LIC)

2. Non-Life Insurance: Bank solicits Non-Life Insurance Business under Corporate Agency Agreement with the following insurance companies:

a. The Oriental Insurance Co. Ltd. (OICL)

b. Bajaj Allianz General Insurance Co. Ltd. (BAGIC)

c. Cholamandalam MS General Insurance Co. Ltd. (CHOLAMS)

d. Care Health Insurance Ltd. (CHIL)Star Health & Allied Insurance Co. Ltd. (SHICL)

Bank''s commission income from insurance business (both life & non-life) stood at tentative Rs. 428 Crore during FY 2022-23. During FY 2022-23, Bank registered a YoY growth of 8.6 per cent in such income.

3. Mutual Funds: Bank is a distributor of Mutual Fund products of the following Asset Management Companies:

a M/s Sundaram Asset Management Pvt. Ltd (previously known as Principal Asset Management Pvt. Ltd).

b. M/s Nippon Life Asset Management Ltd.

c. M/s UTI Asset Management Company Ltd.,

d. M/s Aditya Birla Sunlife Asset Management Company Ltd.

e. M/s LIC Mutual Fund Asset Management Ltd.

f. M/s DSP Investment Managers Pvt. Ltd.

g. M/s Franklin Templeton Asset Management (India) Pvt. Ltd.

h. FISDOM is also providing MF Aggregator and Robo-Advisory services to existing invested customers only and providing commission to the bank on revenue sharing basis.

During FY 2022-23, Income of Rs. 8.26 Crore was earned with YoYgrowth was 34.3 percent

4. Depository Services: As a Depository Participant, Bank opened 15,314 Demat Accounts during FY 2022-23 against 11,627 in FY 2021-22 with a YoY growth of 31.7 per cent and 18,538 Online Trading Accounts in FY2022-23 against 12,016 in FY2021-22 with YoY growth of 54.3 percent.

Out of 15,314 Demat Accounts, around 9466 i.e., 62 per cent of De-mat accounts was opened digitally through Insta-Demat available on IBSand MBS.

Income earned in FY 2022-23 from Depository services was Rs. 5.71 Crore against Rs.3.48 Crore in FY2021-22.

5. Application Supported by Blocked Amount (ASBA) & Merchant Banking: Bank has license to act as Banker to Issue, Debenture Trustee and Merchant Banker. During FY 2022-23, 297 number of issues were handled against 217 in FY 2021-22 with a YoY growth of 36.9 percent.

The amount blocked through ASBA was Rs.8211 Crore in FY 2022-23 against Rs.5442 Crore in FY 2021-22 with a YoY growth of 50.9 per cent and Income of Rs.2 Crore was earned during FY2022-23 against Rs.0.61 Crore during FY2021-22.

6. New Initiatives

a. Life Insurance: Bank has added two new Life Insurance Products in its bouquet:

i. PNB MetLife Grand Assured Income Plan - An annuity product for regular income to customer.

ii. PNB MetLife Mera Term Plan Plus - A pure Term plan forcomplete Life riskcover.

b. Non-Life Insurance Business

i. On the basis of Request for Proposal (RFP), fresh Agreement with two companies has been executed, Star Health & Allied Insurance Co. Ltd for Health Insurance & Cholamandalam MS general Insurance Co Ltd for General Insurance business fora period of3years.

ii. Launched Travel Insurance product covering the financial loss caused to the Bank customers during travel or journey within India.

iii. Credit Linked Health & Group Personal Accident Insurance Product providing financial assistance to borrowers and protect the loan accounts covering entire Sum assured/EMI to the loan account holders in case of detection of Critical illness or unfortunate events such as Permanent Total Disability (PTD)/Personal accident, hospitalization, loss of job etc.

iv. Motor Insurance product “Pay as you consume” gives an option to the insured to covertheir private car as per the usage and get rewarded for Safe Driving.

v. Incorporation of “Exception Check” in Finacle during verification of Asset Insurance Bank financed assets wherein non partner option is selected which has increased our Asset Insurance business byapprox. 2 percent.

vi. Analytical leads on various parameters for potential business generation is shared to field.

c. Depository &ASBA Business:

i. Discount brokerage: The Bank in coordination with M/s SMC Global Securities Limited has introduced discount brokerage facility, which is very popular in the present trading market. It offers Zero Brokerage for delivery and flat Rs.15 for Intra-day trading.

ii. Online mutual fund conversion and redemption:

It has been proposed to make available a facility in retail IBS and MBS, using which Bank''s NSDL Demat account holders can convert their singly held Mutual fund units to Demat form and Customers can request for redemption of their singly held Mutual Fund units in Demat accounts online. The facility once developed will reduce TAT for such requests, in comparison to presently available physical mutual fund conversion and redemption request process.

d. Lead Management System: A new channel i.e. Branch Walk-in for capturing customers request through Finacle-CBS, has been made effective during FY 2022-23, through this facility leads of customers who shows interest in Third Party Products are captured.

Bank has also initiated the process of procuring new CRM system (through RFP), which would be more advance, feature loaded and would be at par with other applications used in the industry.

e. Defence Business: Defence Business Cell (DBC) is established for strengthening PNB''s banking business with Indian Armed forces, Paramilitary and Police forces.

The Bank has already engaged retired Major General as Chief Defence Banking Advisor and expansion of DBC is underway by engaging more retired Defence Officials as advisors to be deputed at different locations across nation mapped with major defence establishments.

During the previous financial year, Bank has entered into MOU for the first time with Assam Rifles, Indian Air Force, Himachal Pradesh Police and also renewed MOUs with Indian Army, Indian Navy, Indian Coastguard for extending Banks flagship products for defence personnel.

The Bank solicits business from Defence Forces personnel and organizations through its network of offices and terms in the field. During the year, the bank''s business from Defence Vertical gained as mentioned hereunder:

i. Defence salary/pension accounts under Bank''s flagship Rakshak plus scheme grew 2.6 per cent on YoY basis.

ii. In real terms the value of business under the Defence Segment (Salary / Pension) grew by 2 percent on YoY basis.

iii. The gross relationship value which includes salary / pensions as well as organization accounts, is over 3700 crores as on 31^s1 March, 2023.

IX. GOVERNMENT BUSINESS

With a view to play a more proactive role in the transfer of funds from Centre and States to various beneficiaries, the Bank has a an exclusive Government Business Division (GBD) which is one of the Business Divisions of the Bank. The GBD looks after various functions such as Pension, Processing & Disbursement, small savings schemes of the Government, Direct & Indirect Taxes Collections and Currency Chest Management. Bank is also accredited banker to nine different Central government departments post amalgamation. These numbers will further rise. Bank has been increasing tie-ups with various State governments to caterto their specific needs.

Key Initiatives taken up under Government Business are as under:

1. Fastag: National Electronic Toll Collection Project has been implemented and all branches have been enabled for issuance of Fastags.

2. TIN2.0: We are one of the first banks to go live on the new TIN 2.0 platform of Central Board of Direct Taxes (CBDT) from December 1, 2022. Direct Taxes can be paid on the website https://eportal.incometax.gov.in through Internet Banking, Debit Card and Over the Cou nter (Cheque/ D D/Cash).

3. Bank has integrated with the new Central Board of Indirect Taxes and Customs (CBIC) e-payment platform - Electronic Cash Ledger (ECL) of Indian Customs Electronic Data Interchange Gateway (ICEGATE), through Internet Banking. It was made live on 1^st April, 2023.

4. Old Government Business Solution Software (GBSS) upgraded to new GBSS system and it was made live on 15.03.2023. The new GBSS is robust enough to handle large volume of data for pension processing.

5. Our Bank is disbursing pension of approximately 8.5 lakh pensioners i.e. Central Govt, Defense, Railways,Telecom and state Government.

6. National Pension System (NPS): All the Branches of our Bank are enabled for NPS transactions. Online facilities for NPS Registration and Contribution is also available through our website (https://www.pnbindia.in/nps.html) as well as PNB ONE App. Total number of NPS subscribers associated with our Bank as on 31^st March, 2023 is 116825. The Bank is also providing NPS facilities to 27 corporates under Corporate Model.

7. Govt. e-Market Place (GeM): The Bank is providing facilities of GeM pool account, e-PBG (Performance Bank Guarantee) & e-EMD (Earnest Money Deposit) on Government e-market place to sellers and purchasers.

8. Public Financial Management System (PFMS): The Bank has timely disbursed funds of approximately Rs. 3704 Crore to about 66 lakh beneficiaries under PM Kisan Samman Nidhi.

9. Through active marketing, more than 80861 PPF, 69596 Sukanya Samridhi Accounts and 48981 Senior Citizen Saving accounts were opened duringthe FY2022-23.

10. Four Series of Sovereign Gold Bond subscription launched by Government of India were marketed by our branches and 683 Kgs were sold.

11. We are having integration with various states and collecting online and offline taxes through their Cyber Treasury Portal and collection of VAT is done in 19 States.

12. Collection of taxes (Direct & Indirect) is being done through offline and online on PAN India Basis. We are one of the major collectors of taxes for Central & State Government.

X. TREASURYOPERATIONS

The liquidity remained mostly comfortable in FY 2022-23 in the Banking system. However, to contain the rising inflation, Reserve Bank of India (RBI) has increased the Cash Reserve Ratio (CRR) to 4.50 per cent from 4.00 per cent of NDTL in May''22. Further, RBI has also absorbed liquidity from the system through various tools such as Variable Reverse Repo Rate(VRRR).Atthesametime, RBI was always there to infuse liquidity, whenever, it was required through variable repo rate auction.

Our Gross Domestic Investments stood at Rs.3,99,830 crore as on 31^s1 March, 2023 with YoY growth of 6.6 per cent.

The Bank actively traded in SLR and Non-SLR securities throughout the financial year. Total Trading Profit for FY2022-23 was Rs.1047 Crore.

1. Fixed Income (SLR/NSLR)

Easy monetary policies across the globe during the pandemic period and the conflict between Russia and Ukraine, which disrupted supply chains and caused a rise in energy and other commodity prices sent inflation rates worldwide above the Central Banks'' targeted range.

This forced Central banks across the globe to tighten financial conditions by increasing policy rates. The Reserve Bank of India (RBI) was no exception. To combat sticky inflation, the RBI increased the repo rate by 250 basis points from 4.00 per cent to 6.50 per cent in FY 2022-23, which reduced liquidity from almost Rs.7 Lakh Crore in the beginning of Financial Year to Rs. 1 Lakh Crore by the end of Financial Year as per RBI data. This resulted in hardening of yields across the curve with 1-year T Bill reaching a high of 7.48 per cent and 10-year benchmark G-sec yields touched the high of 7.62 percent.

In the Union Budget for the FY 2023-24, estimated gross borrowing of the Central government was announced at Rs.15.43 Lakh Crore, largely in line with the market expectation and the gross fiscal deficit was estimated at 5.9 per cent of GDP. Overall, a fiscal consolidation of 50 basis points has been achieved, along with a push on investment.

2. Equity & Mutual Funds

FY 2022-23 proved to be a rough year for equity markets. The turbulence can be attributed to interest rate hikes, liquidity tightening, foreign investment outflows, geo political tension and the resulting soaring of fuel and food prices.

The S&P BSE Sensex closed at 58,991.52, while the Nifty 50 closed at 17,359.75 on 31^sl March, 2023. Over the past one year, the S&P BSE Sensex gained

0.72 per cent while the Nifty 50 declined 0.6 per cent during the same period.

3. Forex

USD/INR traded in the range of 76 to 83 per dollar during the year. The Indian Rupee depreciated against USD during the year on account of geopolitical tensions, rate hikes by US FED to contain rising inflation, hardening US treasury yields, which led to outflows of USD from Indian economy. However, rupee performed better than most of the other emerging market currencies. It finally closed at USD/INR 82.1750 on 31^st March, 2023.

XI. CUSTOMERCARE

The Bank fully realizes the importance of customer service and continues to lay utmost priority to render prompt and efficient service to customers. To achieve the objective, the bank has introduced many digital initiatives in the past year to enhance the customer experience like online debit and credit card, preapproved personal loan, whatsapp banking, revamped PNB One with many added features etc. In order to achieve the desired objective, the Bank has formulated a robust Grievance Redressal Policy keeping in view the guidelines issued by Reserve Bank of India on Customer Service. The Bank is ensuring the redressal of the grievances of customers within the framework laid down in the said policy.

The Bank has an on-line Grievance Redressal Management Portal called Centralized Grievance Redressal Management System (CGRMS), which is in-house Portal. Through this system, the customer gets an immediate acknowledgement and can keep a track of the complaint also. Customers can lodge their requests/complaints in the CGRMS through Bank''s website, Internet Banking Service, Mobile Banking Service and Mobile App.

The status of complaints received by the Bank is reviewed by “Customer Service Committee of the Board”, a Sub-Committee of the Board, on quarterly basis. The meetings of the Committee are presided over by Managing Director & CEO.

The Bank has in place an Internal Ombudsman as per the recommendations of the Damodaran Committee. The system ensures greater transparency in the redressal of grievances bythe Bank.

Customer Service Committees in all the branches and Circle Offices look into the quality of customer service rendered and critically examine the feedback/suggestions for improvement in customer service. These committees meet once in a month where staff and the invited customers interact freely on service-related issues.

A monthly magazine “Customer Speaks” is published in which selected complaints filed by customers and the action taken/resolution provided to the complainants are also mentioned. Appreciation letters issued by customers appreciating the service of officials of the bank are also published in the magazine. Bank''s guidelines on important issues pertaining to customer service, products and services are highlighted in the magazine forthe benefit of field staff.

Theme Based Meetings are being conducted at monthly intervals in all branches on a pre-decided date and theme to improve awareness among field staff about bank''s products and services, and to sensitize them about the issues of maximum importance.

For faster resolution of complaints Bank has designated Chief Customer Executive Officer (CCEO) with the rank of Dy. Zonal Manager /Dy. Circle Head at all ZOs/COs level whom a customer can approach for redressal of his grievance. The contact details of CCEOs have also been displayed at Bank''s website.

Regular training sessions are arranged at Call Centre for Customer Service Agents (CSAs) so that they can handle customers call properly & resolve their trivial

issues by giving correct/latest information that customerwants about the products/services.

The Bank has state-of-the-art Primary Contact Centers at Gurugram and Noida to provide telebanking services to its customers on 24 x 7 x 365 basis through two leading Service Providers. In addition to these two Primary Sites, the Bank has also established two Secondary Contact Centers at Dehradun and Bhopal to provide tele-banking services to its customers in 13 languages.

The customer''s complaints are received and stored in two online portals i.e CGRMS Portal and Contact Centre''s CRM Portal. The nature of complaints received at CGRMS Portal and CRM Portal are largely Non- Digital & Digital transaction related respectively

A total of 17,06,462 complaints were received during the FY 2022-23, out of which 3,51,425 complaints were resolved within T l days of its receipt. As such, these have not been treated as complaints. Therefore, the total number of reported complaints received during the FY 2022-23 is 13,55,037. The portal wise break-up of the same is as under:

• During FY 2022-23, out of a total number of 1,24,048 complaints (i.e., 907 complaints outstanding as on 31^st March, 2022, and 1,23,141 complaints received during FY 2022-23), 1,22,805 complaints were resolved up to the satisfaction of the complainant, till 31^st March, 2023 in CGRMS Portal.

• Further, during FY 2022-23, out of a total number of 12,61,591 complaints (i.e., 29,695 complaints outstanding as on 31^st March, 2022, and 12,31,896 complaints received during FY 2022-23), 12,39,649 complaints were resolved up to the satisfaction of the complainant, till 31^st March, 2023 in Customer Relationship Management Portal (CRM).

Initiatives undertaken for improvement in customer service

1. To augment the capabilities of Contact Centre and facilitate self-service for customers, the number of self-services through IVR have been increased to 16 during FY 2022-23 including facility of marking debit-freeze their account in case of suspicious & unauthorized transaction and issuance of TDS Certificate.

2. The Bank has constituted teams of officials at

Customer Care Centre at Head Office, Zonal Offices and Circle Offices to pay surprise visits to branches to assess standard of service. During FY 2022-23, officials of the Bank made 18,562 surprise visits across India. Deficiencies pointed out by the visiting officials are being shared with the concerned branches/Circle Offices for taking corrective steps.

3. Special Campaign for increasing nomination in accounts was launched through social media, Contact Centre''s, Email & SMS, during the month of Feb-Mar 2023. In order to make customers aware about nomination, creatives are shared on Social Media, SMS are sent to such account holders and message is displayed at Bank''s website and on Statement of account being sent through email.

4. Creatives are published at Social Media (Facebook &Twitter) on regular basis to educate customer about Banks service such as, Balance enquiry on Missed Call, and not to share their credentials over fraudulent calls and for registering nomination in deposit account.

5. Facility of Door Step Banking Services has been extended to customers, wherein they can avail the listed financial/non-financial banking services at the convenience of theirhome.

XII. IMPLEMENTATION OF OFFICIAL LANGUAGE

Punjab National Bank has always been pioneer in implementation of Official language Hindi.Your Bank continued to make concerted efforts to comply with the instructions received from Department of Official Language, Ministry of Home Affairs, Government of India, Committee of Parliament on Official Language and Department of Financial Services, Ministry of Finance. Your Bank has achieved most of the targets prescribed in annual programme for the Financial Year 2022-23 issued by Department of Official Language, Ministry of Home Affairs, Government of India.

We are pleased to inform that during FY 2022-23, your Bank has been awarded 2^nd Prize under the highest "Rajbhasha Kirti” award of the Government of India for “A” Region and Delhi Bank Narakas, Whose convener is Punjab National Bank, was given first prize “Rajbhasha Kirti” award. A total of 11 award have been received by various offices of the bank from the Regional Implementation Office of the Ministry of Home Affairs. Also, more than 265 awards from various institution have been received by various offices/staff members of our Bank.

1. Special works done in the field of official language implementation:

During the FY 2022-23, Punjab National Bank continued to make effective efforts to further increase the progressive use of official language in the bank.

a. Intensive monitoring was done to achieve the targets prescribed in the Annual Program of Department of Official Language, Ministry of Home Affairs and Rajbhasha Corporate Action Plan duly approved by the Board.

b. Awards were given to winner offices/employees of Lala Lajpat Rai Rajbhasha Shield Scheme, other incentive schemes and Hindi competitions to increase the use of Hindi in the bank.

c. Bank''s quarterly home magazine "PNB Pratibha" and half yearly Hindi magazines of Zonal Offices were published regularly. Hindi books were made available in Hindi libraries established atvarious level.

d. PNB has efficiently discharged the responsibility of convener of 28 Town Official Language Implementation Committees across the country. Half yearly meetings of these committees were organized regularly and Hindi competitions, Hindi workshops, Hindi seminars etc. were organized during theyear.

e. All India level Inter Bank Hindi Essay Competition was organized on the subject "Contribution of MSMEs in building Atmanirbhar Bharat”.

f. A total of 7 books were awarded by the Bank under the Original Book Writing Scheme (for working and retired staff) during the FY2022-23.

g. The eligible offices of PNB were notified in the Government of India Gazette under Rule 10(4) of the Official Language Rules, 1976.

h. Hindi and regional languages were used in publicity and promotional campaigns related to the Bank''s schemes and products.

i. In May 2022, under the direction of the Ministry of Finance, one day workshop was organized for all the banks and financial institutions/insurance companies located in Delhi.

j. An incentive scheme was implemented on obtaining higher degree in Hindi for working employees of the bank.

2. External Inspection/Official Language Seminar/

Conference:

a. Smt. Anshuli Arya, (IAS), Secretary, Rajbhasha Vibhag, Ministry of Home Affairs awarded the winner of Member Banks/lnstitutions on 22.12.2022 in Annual Function of Delhi Bank Narakas in Bank''s STC and appreciated the work done in Hindi bythe Bank.

b. Implementation of official language was appreciated by officials of Ministry of Finance, Department of Financial Services during inspections of Head Office and Madurai Branch.

c. The official language inspection of Sonepat main branch was done by the Draft and Evidence subcommittee of the Parliamentary Committee on Official Language.

d. The work done in Hindi was appreciated by The Third Sub-Committee of the Parliamentary Committee on Official Language during the inspections of Bank''s branch: Rudraprayag, Circle Office: Srinagar, Circle Office: Udaipur and Zonal Office: Bhopal.

e. Hindi Day and Hindi Month were celebrated enthusiastically in the Bank. Lala Lajpat Rai Shield was given to the winners by Managing Director and Chief Executive Officer and Executive Directors in the main official language function organized at Head office. Kavi Sammelan was also organized, which was graced by renowned poet Surendra Sharma and poetess Prof. Sita Sagar.

f. All India Conference cum Review Meeting of Official Language Officers of the Bank was organized for Zone ''A ''B'' and ''C'' at Lucknow, Chandigarh and Chennai respectively. Intensive monitoring was done through official language inspections and annual review meetings of all the offices.

3. Progress made in the use of Hindi in Information

Technology:

a. Online module of Hindi Knowledge Roster added in HRMS.

b. "Standard Draft" of routine letters/office notes related to various department for easily doing work in Hindi is available on Bank''s e-portal.

c. Hindi version of new product WhatsApp Banking has been launched to provide the facility of doing banking in Hindi to the customers.

d. Hindi and regional language are available in ATM.

e. SMS alerts have been sent to customers in their preferred language (Hindi and regional language).

f. The Bank''s website is available bilingually in Hindi and English. "Pihu Chatbot” is also available in Hindi.

g. Online Hindi reporting of all the Branches, Circles, Zones and Divisions of the Head Office was done on the ''Rajbhasha web portal''.

h. Bilingualization of Finacle and HRMS was done through Linguify software updated version, through which customers can get passbook, CDR/FDR etc. in Hindi also.

I. Staff members were given training of e-tools to work in Hindi on computer.

j. PNB ONE'' was implemented in the new revamped look in various regional languages including Hindi.

k. Internet Banking available in Hindi as well as in regional languages.

l. A daily Hindi podcast is being released on banking subject.

m. For the employees, 3 online Hindi courses were introduced on the bank''s e-learning portal PNB Univ, on passing which the employees are given marks in Performance Appraisal.

n. Forms to be used by customers are available in Hindi and regional languages.

XIII.PNB S SUBSIDIARIES AND REGIONAL RURAL

BANKS

1. DOMESTIC

a. PNB Gilts Ltd.: FY 2022-23 was characterized by firming up of yields for most of the year, and witnessed some moderation while approaching towards the end. The year began with hardening of the benchmark yield by 61 bps due to higher crude oil prices and monetary policy tightening across the major global economies amid persisting inflationary pressure. During the end of Q2 FY 2022-23, yields increased intermittently on the back of hawkish commentary by Fed officials on US monetary

policy, which was however, offset by ease in crude oil prices and rising expectations over likely inclusion of India''s bond in global bond indices. During the second half, G-sec yields hardened in the beginning, taking cues from the sharp surge in US treasury yields following the 75 bps rate hike by the US Fed and its hawkish forward guidance, followed by the policy repo rate hike by the Reserve Bank. Subsequently, the market sentiment was also dented after JP Morgan held off the inclusion of Indian government bonds in its widely tracked emerging market bond index. Towards the end of the third quarter, bond yields extended a softening bias in tandem with the easing of US treasury yields and the decline in international crude oil prices. The last quarter marked the range bound trading in the mid and longer dated segment, while shorter dated yields firmed up significantly due to continued rate hike expectations. In March 2023, the yields softened, taking cues from US yields following bank collapses, which drove investors to safe assets, which had a salutary impact on Indian yields as well.

During the year, the 10-yr benchmark yield touched a high and low of 7.62 per cent and 6.84 per cent respectively and closed at 7.32 per cent as on 31^st March, 2023.

Against the backdrop of deteriorating market conditions, PNB Gilts Ltd continued to fulfill all its obligations as a Primary Dealer mandated by RBI both in Primary and Secondary market. Company posted a Profit Before Tax (PBT) of Rs. (85.07) Crore during FY 2022-23 vis-a-vis PBT of Rs. 210.15 Crore during FY 2021-22. Profit after Tax (PAT) amounted to Rs. (77.22) Crore during FY 2022-23 as against Rs. 165.71 Crore during FY 2021-22. Capital adequacy remains strong with its Capital to Risk Weighted Assets Ratio (CRAR) at 31.83 per cent as on 31^st March, 2023 well above the regulatory minimum of 15 per cent for Primary Dealers (PDs).

b. PNB Investment Services Limited (PNBISL):

The Company is a profit-making company from the very first year of its operations. During the year ended as on 31^st March, 2023, the Company registered operational (fee-based) income of Rs.7.35 Crore and total income of Rs.9.98 Crore as against a fee- based income of Rs.9.59 Crore and total income of Rs.12.10 Crore for the year ended as on 31^sl March, 2022. Profit before Tax during the period ended as on 31^s1 March 2023 was Rs.4.85 Crore as against Rs.6.10 Crore for the period ended as on 31^st March, 2022.

The company operates in three verticals, namely Corporate Advisory, Merchant Banking and Security Trustee. In the Corporate Advisory Vertical, during the year PNBISL advised many marquees business groups and corporate clients on various transactions, including debt syndication, debt resolution and other corporate advisory assignments. With in-house expertise and deep understanding of select sectors, PNBISL prepared and delivered credible Techno-Economic Viability (TEV) reports to its clients.

In Merchant Banking Vertical, PNBISL actively participated in financial closure of ARCIL stake sale Transaction. The Equity Capital Market team also commenced participating in placement of Tier 1 Bonds Issuances and NCDs Issuances mobilizing Rs. 1000 Crore plus funds for Banks/NBFCs. The Company had commenced this placement for the first time in a small way. The company also filed with SEBI an IPO (approx Rs. 130- Rs. 150 Crore), Rights Issue (approx. Rs. 25 Crore) with BSE and an open offer assignment during the year generating reasonable revenues.

In the Trusteeship business, PNBISL was able to permeate into the second & third Tier cities offering its services to medium scale businesses as well. With its prompt and quality service as also realigning the card rates with market requirement, the company continues to add on new clients and build on its strategy to be a trusted partner of leading banks and corporates.

Going forward, the company is committed to build on its capabilities across business verticals such as credit appraisal & debt syndication services, TEV consultancy, Merchant Banking services and Security Trusteeship services to offer greater value to the parent bank and all its stake holders.

c. PNB Cards and Services Limited (PNBCSL):

PNBCSL is a wholly-owned subsidiary of Punjab National Bank (PNB) incorporated on March 16, 2021 in terms of RBI approval letter dated December 7, 2020 to undertake the non-financial support services related to credit card business of the Punjab National Bank.

PNBCSL operates on a feet-on-street model with its sales executives for sourcing of credit cards in the potential market. The company is also using digital onboarding platforms for better customerexperience.

The Company has been profitable since the very first year it has been in business. The company reported a net profit after taxes of Rs. 1.20 Crore for the FY 2022-23 and Rs. 0.13 Crore for the FY 2021-22. This shows that the company is on the right track and is well-positioned to grow in the future.

During the current Financial Year, the Board of the Company has accorded its approval for diversification of Business of the company. RBI vide letter dated January 13,2023, has conveyed their approval to PNB for undertaking additional non-financial support services by PNBCSL. As per their approval, PNBCSL may provide the following non-financial support services viz. sourcing, marketing, promoting, publicizing, advertising, soliciting distributing Deposit (Current and Saving Accounts etc.) & Retail Loan Products (Housing Loan, Loan against property, Vehicle Loan, Education loan, Personal loan etc.) of Punjab National Bank.

The approval from RBI is a significant development for PNBCSL. It will enable the company to grow and compliment Parent Bank business with a larger choice of services. The Company will increase its geographic reach by opening new Territory offices at multiple locations to serve the various business verticals, including Credit Card, Housing Loan, Vehicle Loan and Deposit Products. PNBCSL is dedicated to offering consumers high-quality services, and this approval will assist the Company in achieving its objectives.

2. INTERNATIONAL

a. PNB International Limited (PNBIL): Punjab National Bank (International) Limited was incorporated in the UK on April 13, 2006 and registered with the Companies House in England & Wales. The Bank is authorized by the Prudential Regulation Authority (''PRA'') and regulated by Financial Conduct Authority (''FCA'') to conduct banking Business in UK.

The total deposits increased from Rs. 6471 Crore as on 31^s1 March, 2022 to Rs. 6644 Crore as on 31^st March, 2023, showing growth of 2.7 per cent. The net advance increased from Rs. 5153 Crore as on 31^st March, 2022 to Rs. 5411 Crore as on 31^sl March, 2023, showing growth of 5.0 per cent. In the FT 2022-23, PNBIL recorded a Net Profit of Rs. 136.34 Crore, representing a growth of 32.1 per cent compared to the previous financial year''s net profit of Rs. 103.22 Crore.

PNBIL''s main business is to provide commercial and retail banking services to different segments of customers, with a focus on the Indian community within the UK. This includes accepting deposits from both retail and corporate clients; lending to retail, SME''s, and corporate clients; and transaction banking services such as currency remittances. The deposit products primarily include current, savings, term deposits and Individual Saving Accounts. Some of these products such as ISAs and Fixed deposits are also being availed by a wider audience in the UK. The lending products includes real estate lending i.e., Buy to Let-Residential, Commercial, Development Loans and Hotels & Hospitalities, lending to SME and Term loans backed bySBLCs.

b. Druk PNB Bank Ltd (DPNBL): Druk PNB Bank Ltd, Bhutan, Banking Company having its corporate office at Thimphu, Bhutan. It started its operation on 27th January, 2010, in Bhutan as the country''s fourth commercial Bank, with a component of both FDI and joint venture in the Banking Sector. Presently, the Bank has 9 branches and 30 ATMs spread across the country. Total Business of the DPNBL increased to Rs.4,627 Crore as on 31^st March, 2023 from Rs.3,125 Crore as on 31^s1 March, 2022 showing YoY growth of 48.1 per cent. CASA Ratio of the Bank stood at 43.3 per cent as on 31^st March, 2023. Profit of the Bank has increased to Rs.32.53 Crore as on 31^s1 March, 2023 from Rs.22.30 Crore as on 31^st March 2022. Paid up capital of the Bank as on 31^s1 March, 2023 is Rs.84 Crore.

3. REGIONAL RURAL BANKS (RRBs): As on 31^st March, 2023, there are 9 RRBs sponsored by the bank namely Dakshin Bihar Gramin Bank (DBGB), Patna; Sarva Haryana Gramin Bank (SHGB), Rohtak; Himachal Pradesh Gramin Bank(HPGB); Mandi; Punjab Gramin Bank (PGB), Kapurthala; Prathama UP Gramin Bank

(PUPGB), Moradabad; Assam Gramin Vikas Bank

(AGVB), Guwahati; Bangiya Gramin Vikas Bank

(BGVB), Berhampore; Tripura Gramin Bank (TGB),

Agartalaand Manipur Rural Bank(MRB), Imphal.

4. These 9 RRBs are operating in 9 states namely Bihar,

Haryana, Himachal Pradesh, Punjab, Uttar Pradesh,

West Bengal, Assam, Manipur and Tripura covering

185 districts with a network of4642 branches.

a. Total Business of sponsored RRBs as on 31^sl March, 2023 is Rs. 2,04,907 Crore registering a YoYgrowth of 8.71 percent.

b. Deposits of RRBs are at Rs. 1,30,369 Crore as on 31^st March, 2023. Aggregate Deposits registered a YoY growth of 7.16 per cent.

c. The Advances of the RRBs as on 31^s1 March, 2023 stood at Rs. 74, 537 Crore with a YoY growth of 11.53 percent.

d. As per RBI guidelines it is mandatory for RRBs to meet the regulatory requirement of CRAR of 9 per cent. The RRBs attaining CRAR over and above the regulatory requirement are TGB (26.77 per cent), PGB (15.61 per cent), PUPGB (14.64 per cent), SHGB (14.17 per cent) and BGVB (11.63 per cent). The RRBs having CRAR less than the regulatory requirement are DBGB (-0.27 per cent), MRB (6.93 per cent), AGVB (7.82 per cent) and HPGB (8.24 per cent). As an outcome of recapitalization assistance to the RRBs by Centre/ States / Sponsor Bank and improvement in operational efficiency these RRBs are expected to achieve CRAR of 9 percent inthecomingyears.

e. The sponsored RRBs are in profit (except DBGB Patna, AGVB Guwahati and MRB Imphal). Operating profit of RRBs as a whole stood at Rs. 2527 Crore as on 31^st March, 2023 with YoY growth of 15.0 percent.

f. The RRBs have cumulatively disbursed Rs. 2760.30 Crores under PM MY/ MUDRA as on 31^s1 March, 2023, with YoY growth of 24.32 per cent under disbursement.

g. The RRBs have cumulatively opened 2,12,04,663 accounts under Pradhan Mantri Jan Dhan Yojana (PM J DY) as on 31^st March, 2023.

XIV. AWARDSANDACCOLADES

The Bank''s efforts have been recognized at various

platforms. The Bank has been conferred the

following awards for initiatives taken in various

fields for FY2022-23

1. The Bank was awarded with achievement award for "Excellent Guarantee Coverage (number)" for FY 2022-23 by Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).

2. The Bank stood Third in NPS Reward Recognition Programme (Maximum number of fresh Subscriber Registration) for FY 2022-23 by Pension Fund Regulatory and Development Authority (PFRDA).

3. The Bank was felicitated with ET Best BFSI Brands by EconomicTimes.

4. The Bank was felicitated with Best MSME Bank (Runner UP) at 9^th MSME Excellence Awards and Summit Associated Chambers of Commerce & Industry of India (ASSOCHAM).

5. The Bank was awarded Best MSME Bank, MSME Friendly Bank, Government Schemes implementing Bank and Implementing COVID related scheme Bank in MSME Banking Excellence Award 2022 ceremony organized by Chamber of Indian Micro, Small and Medium Enterprises (Cl MSM E).

6. The Bank awarded first prize for outstanding contribution under Prime Minister''s Employment Generation Program in Uttar Pradesh by Government of Uttar Pradesh.

7. The Bank won Award of Excellence award in circle of excellence campaign launched for APY enrolment by Pension Fund Regulatory and Development Authority (PFRDA).

8. At the 18^th Annual Banking Technology Conference, Expo and Awards 2022, the Bank was felicitated by IBAwith

a. Runner-up award for the Best Fintech Collaboration

b. Special award for BestAI& ML Bank.

9. NCDEX felicitated Punjab National Bank for their contribution as an emerging Banks in the e-NWR space.

10. "Rajbhasha Kirti” 2^nd prize for the FY 2021-22 by Department of Official Language, Ministry of Home Affairs, Government of India.

11. The Bank was declared winner under 2 Themes of EASE 4.0 awards by DFS, Ministry of Finance, Government of India.

• Tech Enabled Banking-l^sl Runner Up

• GovernanceandHR-l^stRunnerUp

12. First Prize-Best Core Banking System Initiative-13^th Annual Retail Banker International Trailblazer Awards by Retail Banker International.

13. "Highly Recommended-Most Innovative Branch Offering”-13^th Annual Retail Banker International Trailblazer Awards

14. Recognized by PFRDA for performance under National Pension System (NPS) in Quarterly Award Recognition Programme for Q4 FY2022-23.

15. National MSME Awards-2022 to Banks for Outstanding Contribution in the Promotion and Development of MSME Sector - 3^rd Prize Winner by Ministry of MSME.

XV. FUTURE BUSINESS PLAN OFTHE BANK

The Bank has a carefully prepared strategy to define & achieve its future goals. Strategies lay down specific measurable parameters on day to business, profitability & Asset Quality that is being strictly monitored against targets.

The Bank will continue to focus on building Business through traditional and digital banking. Mobilization of Low-Cost Deposits remain a focus area. Mobilization of Current Accounts will be the area of thrust for FY 2023-24. The Bank will ensure that all the Business units of the Bank function as the profit centers for the Bank. The Bank will strive to regain the lost share in the system and continue to make efforts towards new customer acquisition. The Bank will continued focus on customer service through product differentiation & value addition at every step. Digitalisation of products & services will also contribute to that effect and will be prioritized.

In the area of Asset Quality, the Bank will deploy all the out effort to arrest slippage and will aim at

doubling recoveries over the amount of slippage.

Nation building byway of implementing Government Schemes & Financial Inclusion been the spirit of the Bank. As of now, PNB has lived up to the expectations of the Government and of the society at large particularly the underprivileged sections.

The markets are buoyant with positive sentiments for the Bank. Further, with the anticipation of RBI not taking any further rate hike action as of now, we may have reached the end of this cycle of peak interest rates. In FY 2023-24 growth in deposits should be higher while that in credit marginally lower which should assuage the liquidity situation. The Bank will continue on sustained growth trajectory.

All in all, there are expectations of evolution of positive business sentiments which may provide ample opportunities for business growth of the Bank. Further with the anticipation of RBI not taking any further rate hike action as of now hence we may have reached the end of this cycle of peak interest rates. In FY 2023-24 growth in deposits should be higher while that in credit marginally lower which should assuage the liquidity situation. Therefore, the picture should be steady going ahead with rates probably tending to move downwards than upwards given that inflation projections for FY 2023-24 are in the 5.5 percent band.

XVI. BOARD OF DIRECTORS

1. Shri Pankaj Jain, Govt. Nominee Director, ceased to be directorw.e.f. 11.04.2022.

2. Shri Pankaj Sharma has been appointed as Govt. Nominee Director of the Bankw.e.f 11.04.2022.

3. Shri Swarup Kumar Saha, Executive Director, was elevated to MD & CEO of Punjab and Sind Bank on 03.06.2022

4. Shri K. G. Ananthakrishnan has been appointed as Non-Executive Chairman of the Bank w.e.f.

07.11.2022.

5. Shri Binod Kumar has been appointed as Executive Director of the Bank w.e.f.

21.11.2022.

6. Shri Sanjay Kumar, Executive Director, completed his tenure on 30.11.2022.

7. Shri M. Paramasivam has been appointed as Executive Director of the Bank w.e.f.

01.12.2022.

XVII. DIRECTORS'' RESPONSIBILITYSTATEMENT

The Directors confirm that in the preparation of the annual accounts forthe year ended 31^s1 March, 2023:

1. The applicable Accounting Standards have been followed along with proper explanation relating to material departures, if any;

2. The accounting policies, framed in accordance with the guidelines of the Reserve Bank of India, were consistently applied;

3. Reasonable and prudent judgment and estimates were made so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit of the Bank forthe year ended 31^s1 March. 2023.

4. Proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of applicable laws governing banks in India, and;

5. The accounts have been prepared based on the principle of “going concern”.

XVIII. ACKNOWLEDGEMENT

The Board of Directors thank the shareholders, valued customers, well-wishers and other stakeholders for their goodwill, patronage and support.

The Board acknowledges with gratitude for the guidance and support of Government of India, Reserve Bank of India, Securities & Exchange Board of India, Insurance Regulatory and Development Authority of India, Central Vigilance Commission, Stock Exchanges and Statutory Central Auditors of the Bank, in the functioning of the Bank.

The Board also placed on record its appreciation for the valuable contribution made by the members of the Bank''s staff at all levels and looks forward to their continued involvement in achieving the future goals.

For and on behalf of Board of Directors

Atul KumarGoel

Managing Director&CEO

---

Mar 31, 2022

Financial Year (FY) 2021-22 was yet another challenging year for the entire banking sector but the industry players could sail through it successfully owing to better preparedness and conducive business conditions. The economic scenario improved during the year which provided ample opportunities for credit growth. PNB in line with the economic trend continued to scale greater heights and put up good performance in terms of business growth during FY 2021-22. The Bank continued to emphasize on Retail Credit to enhance the credit portfolio and with the added strength in terms of manpower and branches, PNB exhibited the reinforced performance. During the year, the Bank also streamlined the reporting structure of Mid Corporate Centres (MCC) and PNB Loan Points (PLPs) while loaning power and other guidelines were revised to support quicker decision making.

The Bank also kept the focus on the asset quality throughout the year which resulted into improved recoveries, reined in slippages and lower NPA ratios. In addition to it, the Bank continued to innovate in order to serve the customers better and expediently. Digitalization remained a buzzword as Bank added to the kitty of products and services and explored tie-ups with the fintechs to provide the seamless banking to the customers in the convenient manner. The Bank kept its focus on Human Resource Development by way of up-skilling them in line with the changing requirements of the industry.

As at the end of 31^st March, 2022, Bank''s Gross Global Business stood at Rs. 19,31,322 Crore with Gross Global Advances at Rs. 7,85,104 Crore and Gross Global Deposit at Rs. 11,46,218 Crore. Current and Saving Deposits (CASA) was at Rs. 5,33,654 Crore with domestic CASA share at 47.43 per cent. In addition, Bank''s Operating Profit was at Rs. 20,762 Crore with the Net Profit of Rs. 3,457 Crore for the FY 2021-22. As at the end of 31^st March, 2022, Gross Non-Performing Assets (GNPA) ratio declined to 11.78 per cent and Net NPA ratio declined to 4.80 per cent. While Global Net Interest Margin (NIM) was at 2.71 per cent in FY 2021-22, Capital to Risk Weighted Assets Ratio (CRAR) was comfortable at 14.50 per cent.

During FY 2021-22, Bank''s efforts and achievements were recognized on many prestigious platforms. The Bank was adjudged "Best MSME Bank (PSU) in 8^th MSME Excellence Awards by ASSOCHAM". Under EASE, PNB was declared Runners-up in two theme-wise awards i.e., Governance & Outcome centric HR & Institutionalizing Prudent Banking and Second runner-up in the best improvement category i.e., 42% improvement over baseline. Further, the initiatives taken by bank in the area of technology was duly appreciated as PNB won "The Asian Banker Financial Technology Innovation Award 2021 for "Best Core-banking Technology Implementation.". The Bank was also (adjudged 2^nd Best Bank in SHG Credit Linkage under NRLM scheme by Ministry of Rural Development (MoRD)). The Bank secured 1^st position amongst peer banks under Agriculture Infrastructure Fund (AIF) campaign launched by Ministry of

Agriculture and Farmers Welfare. PNB also bagged 3^rd Position for its performance in implementing the Government scheme PMEGP for the FY 2020-21. The Bank won Dr. Ambedkar Business Excellence Awards under the Category "Most Significant Lender Supporting SC Entrepreneurs".

"Against this backdrop, your Directors have pleasure in presenting the Annual Report of your Bank for the year ended 31^st March, 2022 (FY 2021-22) along with its audited Annual Financial Statements".

OUR PERFORMANCEA. Financial Performance Assets and Liabilities

Total Assets of the Bank was at Rs. 13,14,805 Crore as at 31^st March, 2022. While the Net Advances stood at Rs. 7,28,186 Crore, Investment was at Rs. 3,72,168 Crore.

On the Liabilities side, Deposits stood at Rs. 11,46,219 Crore while the Borrowings was at Rs. 45,681 Crore as on 31st March, 2022.

Net Interest Income

The Net Interest Income of your Bank stood at Rs. 28,694 Crore during FY 2021-22. While Total Interest Income stood at Rs. 74,880 Crore, Interest Expenses was at Rs. 46,185 Crore.

Operating Profit

Operating Profit of your Bank during the FY 2021-22 stood at Rs. 20761 Crore. While the total Income stood at Rs.87,200 Crore during FY 2021-22, total Expenses was Rs.66,438 Crore in FY 2021-22.

Net Profit

Bank has earned a Net Profit of Rs.3,457 Crore in FY 2021-22 vis-a-vis Rs.2,022 Crore in FY 2020-21.

Provisions and Contingencies

Total Provisions (other than tax) made during FY 2021-22 were at Rs.16,445 Crore with Provision for NPA at Rs 14,159 Crore. Provision Coverage Ratio (PCR) including TWO of the Bank was at a robust 81.60 per cent as at 31^st March, 2022 and PCR excluding TWO was at 62.24 percent.

B. OPERATIONAL HIGHLIGHTS

Some of the operational highlights of the Bank during FY 202122 are listed below:

Financial

• Bank''s Global Business reached the mark of Rs.19,31,322 Crore in 31st March, 2022, which was second highest among Public Sector Banks (PSBs).

• CASA Deposits at Rs. 5,33,654 Crore also remained second highest amongst PSBs with 47.43 per cent share in Domestic Deposits.

• Savings Deposit grew to Rs. 4,51,680 Crore as on 31^st March, 2022. Retail Term Deposit was at Rs. 5,15,751 Crore as on 31^st March, 2022.

• Within Core Retail Credit Portfolio, Housing Loan increased to Rs. 73,805 Crore, Car/Vehicle Loan increased to Rs. 12,615 Crore and Mortgage Loan was at Rs. 12,232 Crore. MSME loan grew to Rs. 1,25,032 Crore as on 31^st March, 2022

• Return on Equity improved to 5.96 per cent in FY 2021-22 hence showing the improvement of 208 bps over FY 2020-21.

• The Board of Directors have recommended a dividend of Rs. 0.64 per equity share (32%) for the year ended 31^st March, 2022 subject to requisite approvals.

Capital

The capital adequacy of the Bank improved during the financial year on account of capital raising by the Bank coupled with improved profitability. During FY 2021-22, Bank has raised equity of Rs. 1800 Crore through QIP, Rs. 1919 Crore through Tier -II Bonds and Rs. 3971 Crore through AT-1 Bonds. The Bank continued with its focus on sustainable business growth by targeting better rated borrowers with low risk profile. Going forward, the Bank is strategically well placed to meet the growing credit needs of the economy.

Key Highlights

• The Capital Adequacy Ratio of the Bank stood at 14.50 per cent, as of 31^st March, 2022, with Tier-1 capital at 11.73 per cent and Common Equity Tier-1 (CET-1) at 10.56 per cent.

• The Credit Risk Weighted Assets (RWA) of the Bank were optimized to Rs. 4,88,969 Crore in March 2022 on account of focus on better rated accounts and churning of portfolio of the Bank.

Major Initiatives

a) Learning & Development

The Bank has always kept up-skilling of manpower in the forefront and adopted innovative measures. At the same time, the Bank has also ensured consistent delivery of enhanced learning experience. Further, Bank remodeled On Job Trainings (OJT) and introduced workbooks for Management Trainees to facilitate them during OJTs. Bank also upgraded Delivery through Online Channel.

b) Promoting inclusivity

Seminars to motivate the workforce were undertaken by the Bank under which Women''s Conclave for lady executives in the Bank was organised, where Madam Arundhati Bhattacharya (former chairperson SBI) joined in for keynote address. This was aimed at motivating female officers to rise up in the career ladder.

c) Cultural integration

As part of the cultural integration, PF numbers of all the employees of PNB 1.0, e-OBC and e-UNI have been harmonized.

Other Key Initiatives

? PNB Pride: For real time monitoring and record account visits details Mobile application-PNB Pride has been developed for field functionaries. User can enter visit details like name of contact persons, status of the unit, uploading photo, report by the visiting officials, recovery details, promise date etc.

? Mtouch app: A Digital Mobile Application PNB Mtouch cum Web Portal has been developed to capture the records of all field visits made by the Branch Officials for recovery of overdue amount.

? PNB FASTag: An app was launched in November 2021 for Apple and Android devices to facilitate application for tags, recharge and viewing transaction history on mobile devices.

? Opening of Online & Instant Savings Account with Video KYC: The Bank launched Instant Customer On-Boarding Platform through Video KYC to facilitate the customers for opening account with KYC-verification on-line and to attract techno-savvy new-age customers.

? Submission of life certificate for central/state govt. Pensioners through Video Based Customer Identification Process (V-CIP): To enable the pensioners to submit Life Certificate at their convenience and comfort, the Bank launched an online web-based platform for Central/State Govt. Pensioners for submission of Life Certificate online using Video based Customer Identification Process on 30^th December 2021.

? Setting up 5 CASA Back Offices for opening of CASA accounts centrally: In order to address KYC compliance and to achieve better customer service Bank has setup, 5 CASA Back Offices for opening of CASA accounts centrally. It was operationalised in September 2021. These CASA Back Offices are located at Kolkata, Mumbai, Panchkula, Bhubaneswar and Faridabad.

? PNB Virtual Debit Cards: Virtual Debit cards were launched by the Bank thereby eliminating the need for carrying the physical Debit cards.

? PNB 360 portal: Bank has launched PNB-360 Portal which is a Dashboard available for All Bank employee at their onPremise desktop and at Tab with auto-refresh, one stop solution for Management and field functionaries.

? Trade Finance Portal: The Bank has launched 2^nd phase of Trade Finance Portal to allow import customers to scan and send documents directly to Bank covering Import documents, Foreign Letter of Credit and Foreign Letter of guarantee.

? ASBA Service in PNB ONE: ASBA services has been introduced in MBS (PNB ONE). It is popularly hassle free and user friendly approach for IPO application in few clicks in less than a minute. Now, ASBA services can be availed through Branches, Internet Banking, UPI and Mobile Banking i.e., PNB ONE.

C. ASSET QUALITY

Despite disruptions in economy due to 2^nd and 3^rd wave of Covid-19 pandemic, Bank was able to reduce Gross NPA from the level of Rs. 1,04,423 Crore as on 31^st March, 2021 to Rs. 92,448 Crore as on 31^st March, 2022. Focus on asset quality continues to be one of the top priorities for the Bank. Provision Coverage Ratio (PCR) including TWO continued at satisfactory level of 81.60 per cent as on 31^st March 2022.

? Cash Recoveries: Total Cash Recovery improved to Rs. 15,788 Crore for FY 2021-22 from Rs. 11,442 Crore in FY 2020-21.

? Upgradation: Upgradation for FY 2021-22 improved to Rs. 5,253 Crore from Rs. 2,363 Crore in FY 2020-21.

? Upgradation through Resolution Mechanism: The

Resolution Cell was created to exclusively deal with Restructuring/Resolution of NPA accounts and recovery in National Company Law Tribunal (NCLT) cases. The details regarding the same is as under:

Restructured Accounts

(Amount Rs. in Crore)
	Total Sanctioned
	No. of A/c''s	Amount
FY 2021-22	06	347

Further, a sum of Rs. 2,703 crore was recovered in NPA accounts under IBC in NCLT.

? Mega E-auctions: During FY 2021-22, 23,771 properties were uploaded on e-Bikray portal. Out of which 1,319

Immovable Properties (IPs) were auctioned successfully with success rate of 5.54 per cent.

* Sale of Assets to Asset Reconstruction Company (ARC): Details of financial assets sold to Securitization/ Reconstruction Company (SC/RC) for Asset Reconstruction is as under:

(Amount Rs. in Crore)
Items		FY 2021-22
i.	No. of Accounts sold to ARCs	4
ii.	Book Outstanding of Accounts Sold	2421
iii.	Aggregate consideration received	1058
	(100 per cent cash)

* Initiatives taken to Improve Asset Quality during FY

2021-22

S In order to support recovery efforts of field functionaries, a common recovery portal i.e. SASTRA Portal was rolled out during the year. The portal is having 5 different modules like One Time Settlement (OTS), Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI), Debts Recovery Tribunals (DRT), National Company Law Tribunal (NCLT) & Wilful Default. Through this common recovery portal, status of major recovery actions of a Borrower can be ascertained at a single place. OTS Module provides an automated platform for online processing of settlement proposals.

S For effective monitoring, standalone DRT and SARFAESI Portals have been re-configured as separate modules in the SASTRA Portal.

S All the NCLT cases are being monitored through NCLT Module which captures the latest status of each case. Wilful defaulter database of the Bank has been loaded through a separate module.

S Further, for effective monitoring and follow-up of NPA Accounts, PNB Pride App was also rolled out in all the SASTRA Centres and Branches. This Geo Tagging enabled App records field functionaries visit details and captures visit location.

S Further, Bank has initiated steps for development of a new comprehensive. Application Software for Digitalization & Automation of Bank''s Recovery & Litigation functions is being developed which will provide End-to-end processing of all major recovery actions in NPA Accounts.

? Exclusive Vertical for recovery of NPA Accounts: As part of the Organizational restructuring, a separate vertical called SASTRA Vertical has been created for exclusive & focused recovery operations. The vertical operates with officers posted at different levels in the field who are exclusively working for recovery.

? Special OTS Scheme: During the year, Bank has put more

focus on accounts with outstanding up to Rs. 5.00 Crore which constitutes the largest segment of the NPA Portfolio. For more recovery, the Bank has launched special OTS Scheme for this segment. The scheme is of Check box model-non-discriminatory and non-discretionary. More powers have been delegated at the field level for speedy & transparent one-time settlement in this segment. During FY 2021-22, 1,64,969 NPA accounts with

outstanding of Rs. 3,016 Crore were resolved under the said scheme. Suitable amendments were done to resolve accounts under Agriculture and MUDRA NPA Accounts.

D. INFORMATION TECHNOLOGY (IT) AND DIGITALIZATION

Technology continues to drive the Banking sector and with the advent of Fintech on the banking landscape, it has become all the more critical to adopt and imbibe technology in the Bank''s day to day operations effectively to remain competitive and grow. In this regards, the Bank, during FY'' 2021-22, took up various initiatives which are enumerated as under:

? Implementation of Bharat Bill Payment System (BBPS) in IBS/MBS- Through BBPS option in PNBOne, now customer can make payments towards variety of utility service providers/billers under different categories like - Mobile, Landline, DTH, electricity, gas, education fees etc. In addition to Bill Payment, there are several other options such as:

• Repeat your last 10 bill payment.

• Enroll for Standing Instruction

• Enable Notification button to receive monthly/ quarterly or yearly notification of bill payment to never miss it

? Positive Pay in IBS: An electronic authentication system will allow customers to share the cheque details with bank before the bank processes it. With Positive Pay System every account holder now can enter details of cheque (date, amount etc.) issued by him through PNB ONE for secondary authentication.

? Online reset of IBS Password of NRI without Debit card:

Internet Banking users having active debit card can online reset the password(s).

? Opening of Demat A/c via PNB ONE: Through this feature, Demat Account can be opened instantly by submitting the required customer related information.

? Delivery of Debit card at customer address: In order to reduce the footfall in branches and to facilitate the customers to get the Debit Card delivery at their registered address, customers have been facilitated to activate the Debit Card delivered at their registered address through setting Debit Card PIN without the need to visit the branch. All other transactions shall be allowed after successful PIN set transaction.

? Internet Banking Services (IBS) facility for visually impaired: The visually impaired customers by using screen reading software like JAWS (Job Access With Speech) which facilitates Text to Speech, can avail internet banking services.

? Voice assistant in PNB ONE: Voice Assist enabled through PNB One provides a voice driven feature for the following functionalities:

• Mini Statement

• Last transaction inquiry

• Balance Inquiry

• Cheque book request

• Debit card issuance through IVR

? Acceptance of RuPay card in Singapore: Domestic RuPay Debit Cards accepted at all Network for Electronic Transfers (NETS) enabled POS terminals in Singapore.

? Virtual Debit card through PNB ONE: Bank has launched Virtual Debit Card which can be used for e-Comm transactions at all merchant sites through Second factor authentication (OTP).

? E-Mandate on Debit cards: Bank has tied up with NPCI to provide e-mandate facility for Recurring payments on RuPay Debit Cards.

? PNB Personal Advisor (PA): In order to provide ease of access to the customer and non-customers for various applications and services offered by the Bank, an umbrella application namely PNB Personal Advisor (PNB PA) was launched. Phase-I made LIVE by 1^st November 2021 and has been downloaded by more than 18,000 users.

? Captcha for login into Retail & Corporate: In order to enhance security in Retail and Corporate Internet Banking Bank introduced strong CAPTCHA at the time of login.

? Implementation of e-FRM in MBS & IBS: In order to check fraudulent transactions, the e-FRM has been implemented in Mobile Banking and Internet Banking Solution.

? Specific category UPI enhancement: Transaction value limit in UPI has been enhanced from Rs. 2 Lakh to Rs. 5 Lakh for use-cases qualifying under the following business:

• Category Identifier

• Initial Public Offering (IPO) Purpose Code 01 MCC-6211

• G Sec through RBI Retail Direct Scheme

• (RDS) Purpose Code 25 MCC- 6211

? Transaction Alerts on E-mail: The customers have now been given option to get the transaction alerts on e-Mail.

? SIM Binding: To enhance the security feature, SIM Binding is implemented in PNB ONE App. With the SIM binding feature, PNB ONE will be activated only on the device which have the SIM Card of Registered Mobile Number (RMN).

Other initiatives

a) Empanelment of vendors for Development/Customization/ Maintenance/ Testing/Support of software solutions upto Rs. 35 Lakh. Development of four products/ solutions (PNB PA, LIC Generic Module, C-KYC, PFMS) are done using said empanelled vendors.

b) Online savings Account with Video KYC In terms of RBI guidelines, Online Account opening with Video KYC functionality was implemented to provide remote customer on boarding. It was made live on 12^th April 2021.

c) Pre-approved Personal Loan: Implementation of Digital customer Journey for Pre-Approved Personal Loans to existing customers of the Bank. It has been made live on 12^th April 2021.

d) Digital e-Mudra (Shishu) loans: Implementation of Digital Customer Journey for online Shishu MUDRA loans. It was made live on 19^th August 2021. Further, implementation of Digital customer Journey for online Tarun and Kishor Mudra loans is underway.

e) CKYC Mobile Application for Scanning KYC Documents of old Accounts. The project has been live since 24^th November, 2021.

f) Life Certificate Facility to pensioners through Video KYC:

The project was made live on 30^th December, 2021.

g) Tie-up with Paisa bazaar: The Bank entered into Partnership with loan marketplaces for sourcing of leads (Housing Loans).

h) Indian Bank''s Block Chain Infrastructure Company (IBBIC):

The Bank has joined IBBIC as one of its founding members. IBBIC will explore banking related use cases with Blockchain technology. IBBIC and its members have decided to start use of Blockchain for Domestic Letter of Credit (LC).

E. MANAGEMENT INFORMATION SYSTEM

The Bank believes in harnessing the power of both big data and small data not only to drive decision-making and operational excellence but also to provide personalized experiences to increase customer delight.

Enterprise-Wide Data Warehouse (EDW)

Data is the new cynosure of any form of organization and Banking is no exception to it. Data when stored, arranged, structured and mined, it provides Information; which in turn generates persistent Knowledge resulting in wisdom as final product. PNB has made its Enterprise-wide Data Warehouse (EDW) live, as Single Source of Truth for operational, management information system, decision support system, informative and analytics of Banks data for Descriptive, Diagnostic, Predictive and Prescriptive manner to achieve the targeted growth in Business. EDW is now one stop information source for regulatory ADF/ CIMS project.

Data Analytics

The Bank has set up a Data Analytics Centre of Excellence (CoE). Analytics is being conducted on broadly three verticals-Business, Control and Support, with objective of new value-creation, cross-sell and up-sell opportunity, increasing revenue, cost reduction, product enhancement, channel optimization, default loan prediction, maximizing digital footprint and improve risk profiling of the customer base.

Next Level Reforms: With EDW in place, Bank is well prepared to achieve the Action Points under next level reforms in PSBs for short Term and Long Term Target like digital enhancement, Big Data Analytics, adoption of change in Banking Technology, focused use of Fin techs and improvement in Employee engagement through Analytics.

To align with the present and future strategic business requirements of PNB, to gain competitive edge and to cater to the needs of creating advanced digital capabilities for Bank, Model based business leads are being generated on various personal segment. Team is also geared up for analytics-based credit and non-credit offers. Process and systemic optimization

through promotion of Digitization driven by analytics is another avenue being pursued by analytics team.

F. BRANCH NETWORK

Domestic Presence: The Bank has one of the largest networks of 10098 branches as on 31^st March, 2022, comprising of 1753 Metropolitan, 2035 Urban, 2457 Semi Urban and 3853 Rural branches. Rural and Semi Urban Branches (RUSU) comprise around 63 per cent of the Total Branch Network.

International Presence: At present Bank has its overseas presence in 7 Countries by way of 3 branches (1 at Hong Kong (about to be closed), 1 at Dubai and 1 at GIFT City Gujarat), 2 Subsidiaries (London and Bhutan), 1 Joint Venture (Nepal), 2 Representative Offices (Myanmar and Bangladesh).

G. INTERNATIONAL BANKING

As on 31^st March, 2022, there were 232 branches authorized to handle Foreign Exchange Business and 4 Trade Finance Centers functioning at New Delhi, Chennai, Kolkata & Mumbai specialized for centralized handling of trade transactions and International Service Branch for all inward remittances. In addition to it, the Bank has 6 Exchange Bureaus at important tourist centers to facilitate encashment of Foreign Exchange Currency Notes by foreign tourists/NRIs.

? Domestic Forex Business

The Bank has registered a Foreign Exchange Business Turnover of Rs. 1,24,172 Crore (Exports and Imports together) for the FY 2021-22 registering the growth of 37 per cent.

The Bank has an International Service Branch (ISB)

functioning at New Delhi for handling Inward Remittances. During FY 2021-22, the Bank has handled remittance business of Rs. 51,191 Crore.

The Bank has Rupee Drawing Arrangements (RDA) with 16 exchange Houses (10 in the Gulf, 1 in Singapore, 2 in the USA, 1 each in UK, Canada and Seychelles) to facilitate remittance from NRIs.

The Bank also has remittance arrangement under Money Transfer Service Scheme (MTSS) with Transfast Worldwide.

? Overseas Business

Overseas business of the Bank stood at Rs. 47,060 Crore as on 31^st March, 2022 registering YoY growth of 8.77 per cent. Overseas branches are focusing on High Quality Medium/ Long term Assets to build a diversified loan portfolio with low Credit Risk Weight to improve profitability.

Steps Initiated for Forex Business growth

• 55 Export Promotion Councils (EPCs) have been visited on Pan India basis during the FY 2021-22. Further, all the Zonal Offices were advised to continue liasioning with Export Promotion Councils (EPCs) for sourcing new relationships.

• 105 Exporter/Importer meets were conducted on Pan India basis to address their grievances in respect of Forex business during FY 2021-22.

• The Bank generated 185 new leads of forex customers during FY 2021-22. Further, 149 relationships have been converted into business.

• Trade Finance Platforms for Exporters/Importer:

Subsequent to launch of Export module, recently, the Bank launched 2^nd phase of Trade Finance Portal covering Import documents, Foreign Letter of Credit and Foreign Letter of guarantee to allow import customers to initiate transactions.

• Outward remittance facility for Resident Individuals through Net-Banking: The Bank launched Outward Remittance Facility for resident individuals for remitting funds under LRS through Internet Banking. This gives ease to retail customers for remitting for the purpose of Gift, Donation, Travel (Business, Pilgrimage, Medical Treatment, Education and Maintenance of close relatives).

• A facility for sending direct intimation to customers in respect of Inward remittance has been introduced.

• International Service Branch (ISB) has started sending mails directly to customers with respect to their inward remittances which reduces the TAT.

• Dedicated customer care desks are made available at all TFCs to help trade finance customers. The contact details are also placed on PNB Corporate website.

• A dedicated email ID [e-mail] has been created exclusively for trade finance customers for their forex related operational issues.

• International Banking Unit (IBU), GIFT City Gandhinagar, Gujarat has been operationalised w.e.f., 8^th April 2022. It will offer services like an overseas branch of the bank under regulator International Financial Services Centres Authority (IFSCA). The major products offered will be ECB, Buyers credit to Indian borrowers and Term Loan, Working Capital, Trade Finance and FLC/FLG to overseas entities. Branch will trade in Foreign currencies in overseas market, raise funds in foreign currency as deposits and borrowings from non-resident sources and provide loan and liability products for the clients.

H. BUSINESS DIVERSIFICATION Insurance Business

? Life Insurance: Bank has tie-up with the following Insurance companies (FY 2021-22), Life Insurance Corporation of India (LIC), PNB MetLife India Insurance Co. Ltd (PMLI) and Canara HSBC Oriental Bank of Commerce Life Insurance Co. Ltd (CHOICe). Presently, Bank is continuing tie-up with only two companies:

1. PNB Metlife India Insurance Co. Ltd (PMLI)

2. Life Insurance Corporation of India (LIC)

The Bank''s earnings from Life Insurance business grew by 6.45 % during FY 2021-22 to Rs. 294 Crore from Rs. 276 Crore during FY 2021-22.

? Non-Life Insurance: The Bank has tie-up with the following Insurance companies:

1. The Oriental Insurance Co. Ltd. (OICL)

2. Bajaj Allianz General Insurance Co. Ltd. (BAGIC)

3. Cholamandalam MS General Insurance Co. Ltd. (CHOLA)

4. Care Health Insurance Co. Ltd. (CHICL)

5. Star Health & Allied Insurance Co. Ltd. (SHICL)

The Bank''s Commission Income stood at Rs. 101 Crore during FY 2020-21 (Health Insurance- Rs. 66 Crore & Asset Insurance- Rs. 35 Crore) against Rs. 93 Crore in FY 2020-21 (which included Income of around Rs. 4.41 Crore pertaining to Crop Insurance and the same is not included in FY 2020-21). During the FY 2020-21, the Bank registered a YoY growth of 14.1 per cent in income (excluding Crop Insurance). The following new segment specific products were launched during FY''2020-21:

a. Women Specific health insurance products covering critical illness (specifically related to women).

b. Personal Accidental Insurance cover for customers falling in Lower income group.

? Mutual Funds: Bank is distributing and marketing Mutual Fund products of the following Asset Management Companies:

1. M/s Sundaram Asset Management Pvt. Ltd (previously known as Principal Asset Management Pvt Ltd).

2. M/s Nippon Life Asset Management Ltd.

3. M/s UTI Asset Management Company Ltd.,

4. M/s Aditya Birla Sunlife Asset Management Company Ltd.

5. M/s LIC Mutual Fund Asset Management Ltd.

6. M/s DSP Investment Managers Pvt. Ltd.

7. M/s Franklin Templeton Asset Management (India) Pvt Ltd.

8. FISDOM is also providing MF Aggregator and Robo-Advisory services to existing eOBC customers on revenue sharing basis.

During FY 2021-22, Income of Rs. 5.72 crore was earned against the target of Rs. 7.00 crore and YoY growth was 50.13 per cent.

? Depository Services: As a Depository Participant, Bank opened 11,627 Demat Accounts during FY 2021-22 against 5,539 in FY 2020-21 and 12,016 Online Trading Accounts in FY'' 2021-22 against 7,514 in FY 2020-21. Out of 11,627 Demat Accounts, around 9,022 i.e., 78 per cent of Demat accounts was opened digitally through Insta Demat available on IBS and MBS. Income earned in FY 2021-22 from Depository services was Rs. 5.70 Crore

? ASBA & Merchant Banking: Bank has license to act as Banker to issue, debenture trustee and merchant Banker. During FY 2021-22, 217 issues were handled. The amount blocked through ASBA was Rs. 5442 Crore and Income of Rs. 0.45 Crore was earned during FY 2021-22.

New Initiatives

a. Life Insurance & Non-Life Insurance Business: In order to reach out to Bank''s customers using the Bank''s digital channels like Corporate website, Net Banking & Mobile Banking App to conduct their banking activities, the Bank introduced facility of soliciting its insurance products through Insurance Self-Networking Platform (ISNP) on Bank''s Website/IBS/MBS w.e.f., 27^th April, 2021.

b. Depository & ASBA Business: e-DIS services is proposed to be introduced for our trading customers to eliminate the POA (Power of Attorney) submission to trading members for performing share trading. With the introduction of e-DIS services, customers can start share trading instantly after opening of trading account with the channel partners.

ASBA services has been introduced in MBS (PNB ONE). It is hassle free and user friendly approach for IPO application in just few clicks. Now, ASBA services can be availed through Branches, Internet Banking, UPI and Mobile Banking i.e., PNB ONE.

c. Lead Management System: Introduction of two new

channels for lodging customer request through lead management system of CRM has been made effective from March 2022 through which customers can express their interest in Bank Products. Bank has also added two new number for lodging Asset & Digital products by missed call.

d. Customer Acquisition Centres (CAC) and Government Business Vertical Centres (GBV): In the new revamped structure of PNB, 57 Customer Acquisition Centres (CACs) at major locations & 21 Government Business Vertical Centres (GBVs) at State Capitals across India became operational since July 2020.

The main objective of these above mentioned set up is to give focused approach to generate bulk business through strategic tie ups with existing/new Corporate/ Institutional/ Govt./Defence & PSU clients, by exploring cross sell/up sell bouquet of various Bank products, Third Party Products (TPP). In addition, this structure also focus on deepening relationship with HNI/NRI clients by exploring up sell/cross sell opportunities.

e. Defence Business: Defence Business Cell was conceived as a distinct vertical under Customer Acquisition Division with the sole purpose of functioning as a forearm of PNB''s banking business with Indian Armed forces, State police forces, Paramilitary. PNB will sign MOU with Indian Airforce and Assam Rifles. Existing MOUs with Indian Army, Navy, Coastguard will have, added and unique features under the flagship produc such as Rakshak Plus scheme.

I. GOVERNMENT BUSINESS

With a view to play a more proactive role in the transfer of funds from Centre and States to various beneficiaries, Bank has been making efforts to have a sizeable number of Public Financial Management System (PFMS) agency accounts. Bank is also accredited banker to nine different Central government departments, post amalgamation. Bank has been increasing tie-ups with various State governments to cater to their specific needs.

New Initiatives

? Fastag: National Electronic Toll Collection Project has been implemented and all branches have been enabled for issuance of Fastags.

? National Pension System (NPS): Four Regional Rural Banks sponsored by the Bank have been on-boarded for NPS remittance.

? Govt. e-Market Place (GeM): Bank is first amongst nationalized banks to be present on GeM portal for providing services to vendors, i.e. sellers and purchaseRs. These services include GeM pool account, e-PBG (Performance Bank Guarantee) & e-EMD (Earnest Money Deposit).

? Public Financial Management System (PFMS): Bank has timely disbursed funds of approximately Rs. 4080 Crore to about 68 lakh beneficiaries under PM Kisan Samman Nidhi.

? Integration with Cochin Port Trust through Payment gateway has been carried out.

? The account of Rural Electrification Corporation Ltd. has been sourced for the government scheme SAHYOG and PFMS integration has been implemented.

? The government account for Deen Dayal Upadhyaya Grameen Jyoti Yojana has been sourced.

? Through active marketing, 1,39,544 PPF, 76,357 Sukanya Samridhi accounts and 61,031 Senior Citizen Saving accounts were opened during the FY 2021-22.

? Ten Series of Sovereign Gold Bond subscription launched by Govt. of India were marketed by branches and 1229 Kilograms were sold.

? The Bank is disbursing pension of approximately 10.7 lakh pensioners i.e. Central Govt. Defence, Railways, Telecom and state Government.

? The Bank is having integration with various states and we are collecting online and offline taxes through their Cyber Treasury Portal and collection of VAT is done in 21 States.

? Collection of taxes (Direct & Indirect) is being done through offline and online mode on PAN India Basis. We are one of the major collectors of taxes for Central & State Government

J. TREASURY OPERATIONS

Gross Domestic Investments stood at Rs. 3,75,006 Crore as on 31^st March, 2022 while average investments were at Rs. 3,81,098 Crore in as on 31^st March, 2022. Interest income from the investment portfolio (Domestic) stood at Rs. 23,399 crore for FY 2021-22.

The Bank actively traded in SLR and Non-SLR securities throughout the financial year. Total trading profit (domestic) for FY 2021-22 is Rs. 3150 Crore.

The liquidity remained comfortable throughout the year in the banking system due to lack of desirable credit off-take, despite the fact that Cash Reserve Ratio (CRR) was restored to pre-pandemic level of 4 per cent. Liquidity surplus in the banking system reached record levels in September with average liquidity of around Rs. 6.5 lakh crore due to increase in Government spending and absence of additional borrowing for GST compensation. RBI continued to provide liquidity support through OMOs and G-SAP 2.0 operations in order to ensure orderly execution of the Government borrowing plan.

RBI announced various liquidity support measures during the year such as:

• On Tap Special Long-Term Repo Operations (SLTRO) for Small Finance Banks (SFBs) was extended till 31^st December, 2021.

• The TLTRO on Tap Scheme was extended by a period of six months, i.e., till 30^th September, 2021 and further till 31^st December, 2021.

• RBI extended fresh support of Rs 50,000 Crore to the AIFIs for new lending in FY'' 2021-22.

• The MSF relaxation continued up to 31^st December, 2021 and was restored to the normal dispensation whereby banks will be able to dip up to 2% of NDTL for overnight borrowing under the MSF from 1^st January, 2022.

• RBI to conduct fortnightly Variable Rate Reverse Repo (VRRR) auctions as well as auctions for longer duration maturities, however the 14-day VRRR auction would be the main liquidity management operation and shall coincide with the CRR maintenance cycle.

RBI reitereted its stance to remain accommodative as long as necessary to revive and sustain growth on a durable basis. RBI commenced normalizing liquidity conditions by discontinuing its G-SAP operations and resuming its long term VRRR from 4^th quarter onwards and gradually started draining out excess liquidity from the system. RBI''s currency swap further drained durable rupee liquidity from the system. The recent CRR hike of 50 bps will drain a further Rs. 87,000 Crore of liquidity.

• Fixed Income (SLR/NSLR)

Reserve Bank of India (RBI) tried to balance its objective of sustaining growth with price stability and that of managing the Central and State Governments'' massive borrowings amid multiple waves of the pandemic and uncertain global macro environment. The Indian bond market was

well supported by RBI through both conventional and unconventional measures including differentiated auction methodology, GSAP 1.0 and GSAP 2.0 program. However, during second half of the Financial Year, yields inched up significantly due to expectations of rate hikes by central banks in all major developed economies of the world on account of high inflation expectations due to surging commodity prices, and the Indian bond market yields were no exception.

During FY 2021-22, the 10 year benchmark G Sec yields rose to 6.95 per cent after the announcement of budgeted market borrowing of Rs. 14.95 Lakh Crore. However as per the revised borrowing calendar, gross market borrowing was pegged at Rs.14.31 Lakh Crore. As a result, the Central Government''s borrowing programme for FY 2021-22 came to an end on 25^th February 2022 and the total auctions were much lower than expected due to cancellations of scheduled auctions for the month of March 2022. This cooled off the yields temporarily, but in the recently conducted unscheduled MPC meeting (May 2022), RBI raised the benchmark repo rate by 40 bps due to concerns regarding domestic inflation along with a 50 bps CRR hike to drain out excess liquidity. This resulted in benchmark yields touching a high 7.49 per cent and it continues to be at elevated levels. The short term yield also spiked considerably with 1 year T Bill reaching a high 5.95 per cent on expectations of further hikes in the forthcoming MPC Meetings.

Since the advent of COVID-19 pandemic, the government''s borrowing has almost doubled, but the pool of domestic investors has not kept pace with the same and still much needs to be done before domestic sovereign bonds are listed on global indices. Hence, the challenges for the smooth conduct of massive borrowings for the third consecutive year are galore. The same is further intensified by the gloomy outlook on yields aggravated by reversal of accommodative stance by central banks across the globe. Russian invasion of Ukraine and other expected geo-political tensions including COVID-19 lockdowns in many parts of the world including China, are further expected to make things difficult for the bond markets. The near-term outlook on India''s external sector has also worsened considerably. Bond yields have hardened across the maturities as geo-political factors have clouded the outlook on inflation, further compounding the challenges for the smooth conduct of the massive borrowing planned by the Centre and the States for FY 2022-23.

* Equity & Mutual Funds

Indian equity markets have seen one of the steepest rallies from the lows of the pandemic in the last Financial Year, however the current financial year has been marred by rate hikes in developed markets, inflationary pressures, supply bottlenecks, commodity shortages and geo political

tensions. As a result, foreign investors have been net sellers of Indian equities for the entire year, but domestic retail and institutional investors have been more or less resilient to selling pressures. However, in the next fiscal year, equity markets are expected to be more or less muted in absence of any fresh positive triggers. Also, uncertainties regarding COVID-19, further flare up of tensions between nations and steep rise in inflation, are expected to keep the markets on the offered side only.

? Forex

Net forex income of the Bank for FY 2021-22 was Rs. 1,866 Crore. The Indian Rupee remained largely stable throughout the year and traded in a broad range of USD/INR 74-76. However, it experienced a knee jerk depreciation during 7^th March 2022 pushing it to USD/INR 77.01 on account of abnormal rise in crude oil prices due to geo-political tensions. However, RBI continued to be active in markets to smoothen out the volatility. It finally closed at USD/INR 75.92 on 31^st March, 2022.

K. CUSTOMER CARE

The Bank fully realizes the importance of customer service and continues to lay utmost priority to render prompt and efficient service to customers. In order to achieve the desired objective, the Bank has formulated a robust Grievance Redressal Policy keeping in view the guidelines issued by Reserve Bank of India on Customer Service. The Bank is ensuring the redressal of the grievances of customers within the framework laid down in the said policy.

Initiatives undertaken during the year for improvement in customer service

? The Bank has an On-line Grievance Redressal Management Portal called Centralized Grievance Redressal Management System (CGRMS), which is in-house Portal. Through this system, the customer gets an immediate acknowledgement and can keep a track of the complaint also. Customers can lodge their requests/complaints in the CGRMS through Bank''s website, Internet Banking Service, Mobile Banking Service and Mobile App.

? The Bank has state-of-the-art Primary Contact Centers at Gurugram and Noida to provide tele-banking services to its customers on 24 x 7 x 365 basis through two leading Service Providers. In addition to these two Primary Sites, the Bank has also established two Secondary Contact Centers at Dehradun and Bhopal to provide tele-banking services to its customers in 13 languages (During the FY 2021-22, 2 languages were incorporated over IVR in addition to existing 11 languages).

? Further, the number of self-services extended to 14 by Contact Centre through IVR during FY 2021-22 thereby making them more customer friendly.

? The Bank has constituted teams of officials at Customer Care Centre at Head Office, Zonal Offices and Circle Offices to pay incognito visit to branches to assess standard of service. During FY 2021-22, officials of the Bank made 14,576 incognito visits to branches pan India. Deficiencies pointed out by the visiting officials are being shared with the concerned branches/Circle Offices for taking corrective steps.

? The status of complaints received by the Bank is reviewed by "Customer Service Committee of the Board", a SubCommittee of the Board, on quarterly basis. The meetings of the Committee are presided over by Managing Director & CEO.

? The Bank has in place an Internal Ombudsman as per the recommendations of the Damodaran Committee. The system ensures greater transparency in the redressal of grievances by the Bank.

? Customer Service Committees in all the branches and Circle Offices look into the quality of customer service rendered and critically examine the feedback/suggestions for improvement in customer service. These committees meet once in a month where staff and the invited customers interact freely on service-related issues.

? A monthly magazine "Customer Speaks" is published in which selected complaints filed by customers and the action taken/resolution provided to the complainants are also mentioned. Appreciation letters issued by customers appreciating the service of officials of the bank are also published in the magazine. Bank''s guidelines on important issues pertaining to customer service, products and services are highlighted in the magazine for the benefit of field staff.

? Theme Based Meetings are being conducted at monthly intervals in all branches on a pre-decided date and theme to improve awareness among field staff about bank''s products and services, and to sensitize them about the issues of maximum importance.

? Door Step banking services is available in the Bank. It is a facility by which customers can avail many of the financial/non-financial banking services at home through the Vendors at 100 centers. It provides convenience to the customers to access different type of banking services from their Door Step.

? For faster resolution of complaints Bank has designated Chief Customer Executive Officer (CCEO) with the rank of Dy. Zonal Manager/Dy. Circle Head at all ZOs/COs level whom a customer can approach for redressal of his grievance. The contact details of CCEOs have also been displayed at Bank''s website.

? Selected complaints along with their solutions are displayed through Today''s Mantra- ''SAMASYA & SAMADHAAN'' on regular basis, so that field functionaries can provide quick/ on the spot resolution to customers on complaints of the similar nature.

? Regular training sessions are arranged at Call Centre for CSAs so that they can handle customers call properly & resolve their trivial issues by giving correct/latest information that customer wants about the products/ services.

? Creatives have been published at Social Media (Facebook &Twitter) on regular basis to educate customer about Banks service such as, Balance enquiry on Missed Call, and not to share their credentials over fraudulent calls and for registering nomination in deposit account.

? During FY 2021-22, out of a total number of 1,46,759 complaints (i.e., 7,175 complaints outstanding as on 31^st March, 2021, and 1,39,584 complaints received during FY 2021-22), 1,45,852 complaints were resolved up to the satisfaction of the complainant, till 31^st March, 2022 in CGRMS Portal.

? Further, during FY 2021-22, out of a total number of 16,80,065 complaints (i.e., 81,389 complaints outstanding as on 31^st March, 2021, and 15,98,676 complaints received during FY 2021-22), 16,50,370 complaints were resolved up to the satisfaction of the complainant, till 31^st March, 2022 in CRM Portal.

L. IMPLEMENTATION OF OFFICIAL LANGUAGE

Punjab National Bank has always been a pioneer in the implementation of the Official Language Hindi. During the Financial Year 2021-22, Bank continued to make concerted efforts to increase the use of Hindi and compliance of guidelines received from Department of Official Language, Ministry of Home Affairs, GoI, Committee of Parliament on Official Language and Department of Financial Services, Ministry of Finance. Concrete and effective steps were taken by the Bank to achieve various region wise targets set in the Annual Program 2021-22 issued by the Department of Official Language, Ministry of Home Affairs, Government of India, as a result, most of the targets have been achieved.

Special works done in the Field of Official Language Implementation

Hindi and Regional Languages were used in publicity and promotional campaigns related to the schemes and products of the Bank.

S Online Hindi quiz for staff members was conducted on Bank''s e-Learning portal PNB UNIV.

S Cyber Security Glossary prepared in Hindi.

S "Noting Sahayika" was prepared to help the officers in Hindi noting which was released by Dr. Sumeet Jerath, IAS, Secretary, Official Language, Ministry of Home Affairs, Government of India.

S Inter Bank Hindi Essay Competition was organized at All India level.

S During FY 2021-22, total 4 books were awarded by the Bank under the Original Hindi Book Writing Scheme.

S Intensive monitoring was done to achieve targets set in Annual Programme and Corporate Action Plan of Official Language duly approved by the Board

S Prizes were awarded to offices/staff doing excellent work in Hindi under Lala Lajpat Rai Shield Yojana and various other incentive schemes to increase the use of Hindi in the Bank.

S Quarterly house magazine of the Bank "PNB Pratibha" and half yearly Hindi magazines of the Zonal Offices were published regularly.

S During the FY 2021-22, the Bank celebrated the month of September 2021 as Hindi month and on 14^th September 2021, a grand celebration of Hindi Diwas was organized in Head Office and its various offices. During this period various programs/competitions were organized and prizes were given to the winners by the Managing Director and CEO and Heads of the Offices.

S PNB has efficiently discharged the responsibility of convener of 29 Town Official Language Implementation Committees across the country. Half yearly meetings of these committees were held regularly and Hindi competitions, Hindi workshops, Hindi seminars etc. were organized during the year.

External Inspection / Official Language Seminar/Conference

S A discussion meeting was organized on 3^rd March, 2022 by the Drafting and Evidence Sub-Committee of Parliament on Official Language with the Chairman of Delhi Bank Nagar Rajbhasha Karyanvayan Samiti (NARAKAS) (Convener PNB) and its 5 member offices. Apart from this, the official language inspections of Bank''s various Zonal/Circle Offices were also done by the Ministry of Finance and the Ministry of Home Affairs and the work was being done by the bank towards the progressive development of Hindi was appreciated.

S In the graceful presence of Dr. Sumeet Jerath, IAS, Secretary, Official Language, Ministry of Home Affairs, Government of India & under the Chairmanship of MD & CEO an All India Official Language Seminar was organized on 29^th June, 2021 at Head Office, Dwarka for the top Management and Executives of the Bank & Zonal Managers and Official Language Officers from the field in which detailed information was given on the strategy of ''123'', ''Leela'' app and memory based translation tool KANTHASTH.

S A two-days All India "Rajbhasha Sammelan cum Review Meeting" was organized by the Bank at Staff Training Collage, Civil Lines, New Delhi on 14^th March, 2022 and 15^th March, 2022 for the Official Language Officers posted in the Bank''s offices located in Region ''A'' and Region ''B'' and second two-days All India "Rajbhasha Sammelan cum Review Meeting" was organized by the Bank in Lucknow on 24^th March, 2022 and 25^th March, 2022 for Official Language Officers posted in the Bank''s offices located in Region ''B'' and Region ''C''.

S Online Annual review meetings of all the Zonal Offices were organized by the Bank for Zone wise official language review, in which all the subordinate Circle Offices of respective zones also participated.

Progress made in the use of Hindi in Information Technology

S Internet banking facility was made available to the customers in 7 regional languages besides Hindi and English.

S Option of Hindi and regional languages and facility to print transaction slip in Hindi is available for customers at ATMs.

S Facility to make transactions in 10 Regional Languages apart from Hindi and English has been made available to the customers in the mobile application "PNB ONE".

S The Bank provides an option to its customers to receive banking SMS alerts in their mother tongue (Hindi, Bangla, Gujarati, Kannada, Malayalam, Marathi, Odia, Punjabi, Tamil, Telugu and Urdu) and SMS send in the language chosen by the customer.

S Bank''s website is in bilingual form and Hindi language option has been made available to the customers in the Bank''s "Pihu Chatbot".

S Every day a podcast on a Banking topic in Hindi is released by the bank for the employees.

S Online Hindi reporting of all Branches, Circles, Zones and Divisions of Head Office was done on the Official Language web portal.

S Due to COVID-19 pandemic, virtual Hindi workshops, competitions, e-webinars, e-Inspections were organized through digital platforms apart from physical mode.

S Facility is available to print Passbook, CDR/FDR in Hindi and doing service related work of staff members in Hindi through bilingual software in Finacle and HRMS.

S Trainings were given to the staff members to work in Hindi on computer and various e-Tools of Hindi.

M. PNB''S SUBSIDIARIES AND REGIONAL RURAL BANKS

? DOMESTIC

i. PNB Gilts Ltd: During FY 2021-22, debt market was characterised with gradual firming up of yields, with accentuated firming in the second half of the year. In the first half of the year, yields remained largely anchored as the monetary policy committee (MPC) continued with its accommodative growth-supportive stance and also undertook government securities purchases through G-SAP. During H1FY 2021-22, RBI purchased securities aggregating Rs. 1,90,000 Crore on a net basis, which helped create demand for the large scheduled government securities issuances for the year. In the second half of the year, however, yields remained largely upward bound, with Q4 witnessing a sharp spike in yields. A sharp rise in global crude oil prices and reversal of monetary policy by various emerging market and advanced economies pushed both global and domestic yields higher during Q4 FY 2021-22. The rise in yields was aggravated by higher-than-expected indicative calendar of market borrowings of State Governments/Union Territories, planned market borrowings by the Centre indicated in the Union Budget 2022-23. The cancellation of two consecutive central government bond auctions, however, tempered the hardening of domestic yields towards the close of the Financial Year.

During the year, the 10-yr benchmark yield touched a high and low of 6.95 per cent and 5.97 per cent respectively and closed at 6.86 per cent as on 31^st March,2022.

Against the backdrop of deteriorating market conditions, PNB Gilts Ltd. continued to fulfil all its obligations as a Primary Dealer mandated by RBI both in Primary and Secondary market. Company posted a Profit before Tax (PBT) of Rs. 210.15 Crore during FY 2021-22 vis-a-vis PBT of Rs. 614.35 Crore during FY 2020-21. Profit after Tax (PAT) amounted to Rs. 165.71 Crore during FY 2021-22 as against Rs. 454.12 Crore during FY 2020-21. Capital adequacy remains strong with its capital to risk weighted assets ratio (CRAR) at 66.41 per cent as on 31^st March, 2022 (45.58 per cent as on 31^st March, 2021) well above the regulatory minimum of 15 per cent for PDs.

ii. PNB Investment Services Ltd: The Company is a profitmaking company from the very first year of its operations. During the year ended 31^st March, 2022 the Company registered operational (fee-based) income of Rs. 9.59 Crore and total income of Rs. 12.10 Crore as against a fee-based income of Rs. 5.33 Crore and total income of Rs. 8.02 Crore for the year ended 31^st March, 2021. Profit before Tax during the period ended 31^st March, 2022 was Rs. 6.10 Crore as against Rs. 1.87 Crore for the period ended 31^st March, 2021.

The company operates in three verticals, namely Corporate Advisory, Merchant Banking and Security Trustee. In the Corporate Advisory Vertical, during the year PNBISL advised many marquees business groups and corporate clients on various transactions, including debt syndication, debt resolution and other corporate advisory assignments. With in-house expertise and deep understanding of select sectors, PNBISL prepared and delivered credible TechnoEconomic Viability (TEV) reports to its clients.

In Merchant Banking Vertical, PNBISL actively participated in PNB''s fund-raising transactions of Qualified Institutional Placement (QIP) and Tier II Bonds. The involvement in these transactions varied from advising on compliance requirements, drafting of offer documents and marketing of the offerings.

In the Trusteeship business, despite intense competition from entrants not having long standing in the business by slashing fees, the company has been able to maintain the clients by providing quality of services. A cautious strategy has been adopted while selecting the clients, so as to ensure only credible clients are on-boarded. With its prompt and quality service as also realigning our card rates with market requirement, the company continues to add on new clients and build on its strategy to be a trusted partner of leading banks and corporates.

Going forward, the company is poised to build on its capabilities across business verticals such as credit appraisal & debt syndication services, TEV consultancy, Merchant Banking services and Security Trusteeship services to offer greater value to the parent bank and all its stake holders.

iii. PNB Cards & Services Limited: The Company has been incorporated on 16^th March, 2021 as a Non-Financial Entity for providing Business Support services related to Credit Card Business of the Bank. Currently, the company is providing its services for customer acquisition and merchant tie ups. During FY'' 2021-22, being the first year of operations, the company has earned revenue from operations of Rs. 2.60 Crore and Net profit after Tax of Rs. 0.13 Crore. The company will operate on feet-on-street model with its sales executives sourcing of Credit Cards in the potential market along with digital on boarding platforms for better customer experience.

? INTERNATIONAL

i. PNB International Limited (PNBIL): PNBIL continues to serve its customers in London and Midlands through network of seven branches located at Moorgate, Ilford, Wembley, Southall, Leicester, Birmingham and Wolverhampton.

Even during the COVID pandemic the Bank ensured to provide all services to customers in smooth and safe manner. During FY 2021-22, the total business of PNBIL increased from 1755 USD Million to 1825 USD Million thus showing growth of 4 per cent under challenging circumstances with healthy profitability.

The Bank continues to grow the UK based business book and diversify within the product variants in secured lending book in line with its strategy. Customer retention has been the focus for the Bank and the Bank is also developing Alternate channel to raise low cost retail deposits.

ii. Druk PNB Bank Ltd: Druk PNB Bank Ltd, Bhutan, Banking Company having its corporate office at Thimphu, Bhutan. It started its operation on 27^th January, 2010, in Bhutan as the country''s fourth commercial Bank, with a component of both FDI and joint venture in the Banking Sector. Presently Bank has 8 branches and 30 ATMs spread across the country. Total Business of the DPNBL increased to to Rs. 3,125 Crore as on 31^st March, 2022 from from Rs. 2,780 Crore as on 31^st March, 2021 showing YoY growth of 12.41 per cent. CASA Ratio of the Bank stood at 42.27 per cent as on 31^st March, 2022. Profit of the Bank has increased to Rs. 22.30 Crore as on 31^st March, 2022 from Rs. 19.56 Crore as on 31^st March 2021. Paid up capital of the Bank as on 31^st March, 2022 is Rs.84 Crore.

? REGIONAL RURAL BANKS (RRBs): As on 31^st March, 2022, there are 9 RRBs sponsored by the bank namely Dakshin Bihar Gramin Bank (DBGB), Patna; Sarva Haryana Gramin Bank (SHGB), Rohtak; Himachal Pradesh Gramin Bank (HPGB); Mandi; Punjab Gramin Bank (PGB), Kapurthala; Prathama UP Gramin Bank (PUGB), Meerut; Assam Gramin Vikas Bank (AGVB), Assam; Bangiya Gramin Vikas Bank (BGVB), West Bengal; Tripura Gramin Bank (TGB), Agartala and Manipur Rural Bank (MRB), Imphal.

These 9 RRBs are operating in 9 states namely Bihar, Haryana, Himachal Pradesh, Punjab, Uttar Pradesh, West Bengal, Assam, Manipur and Tripura covering 185 districts with a network of 4613 branches.

i. Total Business of sponsored RRBs as on 31^st March, 2022 is Rs. 1,88,493 Crore registering a YoY growth of 7.59 per cent.

ii. Deposits of RRBs are at Rs. 1,21,659 Crore as on 31^st March, 2022. Aggregate Deposits registered a YoY growth of 8.20 per cent. The CASA deposits of the RRBs have increased to Rs. 75,143 Crore as on 31^st March, 2022 from Rs. 68,747 Crore as on 31^st March, 2021 with a YoY growth of 9.30 per cent.

iii. The advances of the RRBs as on 31^st March, 2022 stood at Rs. 66,834 Crore with a YoY growth of 6.51 per cent.

iv. As per RBI guidelines it is mandatory for RRBs to meet the regulatory requirement of CRAR 9 per cent. The RRBs attaining CRAR over and above the regulatory requirement are HPGB (9.47 per cent), PGB (15.56 per cent), PUPGB (13.49 per cent), SHGB (14.10 per cent) and TGB (30.87 per cent). The RRBs having CRAR less than the regulatory requirement are AGVB (7.59 per cent), DBGB (8.35 per cent) MRB (7.24 per cent) and BGVB (8.89 per cent) As an outcome of recapitalization assistance to the RRBs by Centre/ States / Sponsor Bank and improvement in operational efficiency these RRBs are expected to achieve CRAR of 9 per cent in the coming years.

v. The sponsored RRBs are in profit (except DBGB Patna and MRB Imphal) and combined Net profit of the RRBs during the FY 2021-22 is Rs. 184 Crore.

vi. The RRBs have shown a remarkable growth of 59.85 per cent in enrollment under Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY).

N. AWARDS AND ACCOLADES

Bank''s effort have been recognized at various platforms. The

Bank has been conferred the following awards for initiatives

taken in various fields for the year 2021-22:

? Special Commemorative Award FY'' 2021 by NABARD Best

PSU in the fields of Agriculture Credit, Micro Finance,

Financial Inclusion and Technology Adoption.

? Finacle Client Innovation Award by Infosys- Runner Up for

PNB''s path breaking "Process Innovations".

? ASSOCHAM Runner Up under Digital service under PSB

Merged Category

? EASE 3.0 AWARDS

o Runner up under Theme 3 Institutionalizing Prudent Banking

o Runner up under Theme 4 Governance and Outcome Centric HR

o Amongst Top 3 Banks in Improvement from March baseline

? The Asian Banker Financial Technology Innovation Award 2021 "Best Core-banking Technology Implementation.

? Rajbhasha Kirti Award for the year 2020-21, promoting Official language Hindi.

? 2^nd highest percentage of digital payment Transactions "Utkarsh Puraskar" Digi-Dhan Award 2019-20 by Ministry of Electronics & Information Technology

? 2^nd Best Bank in SHG Credit Linkage under NRLM scheme by Ministry of Rural Development (MoRD).

? 1^st position amongst peer banks under Agriculture Infrastructure Fund (AIF) campaign launched by Ministry of Agriculture and Farmers Welfare.

? 3^rd Position for its performance in implementing the Government scheme PMEGP for 2020-21.

? Best MSME Bank (PSU) in 8^th MSME Excellence Awards by ASSOCHAM

? Felicitated by Pension Fund Regulatory and Development Authority (21.12.2021) for contribution towards NPS Diwas (01.10.2021).

? "Global Banking & Finance Awards 2021" in the category "Initiative Core Amalgamation" jointly with M/s Infosys.

? Award of Excellence in Campaign Atal Pension Yojana (APY) Leadership Capital launched by Pension Fund Regulatory & Development Authority (PFRDA)

? Dr. Ambedkar Business Excellence Awards under the Category "Most Significant Lender Supporting SC Entrepreneurs" by Ministry of Social Justice and Empowerment.

O. FUTURE BUSINESS PLAN OF THE BANK

Bank has been able to survive in all the tough conditions successfully with well-defined strategy. Bank during the year continued to provide superior banking experience to its customers. Bank also successfully completed its amalgamation exercise through smooth integration of people and processes within timeframe.

There has been immense opportunities awaiting the Banking sector going forward. First of all the Bank will keep its focus on the diversified credit growth as it is expected that the huge demand will erupt from MSME and Retail segment in FY 2022-23. With the expected pick up in the credit growth, interest income may also see an uptick. CASA growth is also one of the areas where the Bank will remain focused for higher profitability. The Bank would scale up collaborations and partnerships for better results.

Asset quality will continue to be the buzzword for us and the Bank will take up action oriented plans to keep the NPAs low so that the capital remains available for business growth. Strong recovery measures will be driving the improvement in Asset quality for FY'' 2022-23 as well. The thrust area of the Bank would be credit monitoring through proactive steps on the basis of various early warning signals and address the stress upfront.

On Digitalization front, Bank will continue to build upon strong technological platforms and innovate to provide convenient banking services to all the customers especially tech savvy ones. Bank will tread the path with well delineated strategy so that the potential of the branches may be utilized to the maximum.

Bank considers its HR as its most important resource to drive the business growth and will continue to up skill it for holistic HR Transformation. Further, Customer Service and Customer convenience to be on the priority and Bank will ensure that customer needs are responded promptly and in a positive manner. It shall be the endeavor of the Bank to remain a customer friendly bank with minimal grievances.

P. BOARD OF DIRECTORS

Board of the Bank compromises of 11 Directors including 05 whole time Directors i.e. One Managing Director & CEO and four Executive Directors as on 31^st March, 2022. During the Financial Year 2021-22, the following changes took place in the composition of Board of Directors:

♦♦♦ Shri Agyey Kumar Azad completed his tenure as Executive Director on 30.04.2021.

♦♦♦ Dr. Asha Bhandarker, Shareholder Director, completed her tenure on 11.09.2021.

♦♦♦ Dr. Rekha Jain, has been elected as Shareholder Director on the Board of Bank w.e.f. 12.09.2021.

♦♦♦ Shri Kalyan Kumar has been appointed as Executive Director on the Board of Bank w.e.f. 21.10.2021.

♦♦♦ Shri Pankaj Joshi has been appointed as Part time NonOfficial Director on the Board of Bank w.e.f. 21.12.2021.

♦♦♦ Shri Sanjeev Kumar Singhal has been appointed as Part time Non-Official Director on the Board of Bank w.e.f. 21.12.2021.

♦♦♦ Shri CH S.S. Mallikarjuna Rao completed his tenure as MD & CEO on 31.01.2022.

♦♦♦ Shri Atul Kumar Goel has been appointed as MD & CEO w.e.f. 01.02.2022.

♦♦♦ Shri Vivek Aggarwal, RBI Nominee Director, completed his tenure on 25.02.2022.

♦♦♦ Shri Anil Kumar Misra has been appointed as RBI Nominee Director on the Board of Bank w.e.f. 25.02.2022 (After Business Hours).

The Board wishes to place on record its appreciation for the valuable contribution made by Shri Agyey Kumar Azad (Executive Director), Dr. Asha Bhandarker (Shareholder Director), Shri CH S.S. Mallikarjuna Rao (MD & CEO) and Shri Vivek Aggarwal (RBI Nominee Director).

Q. DIRECTORS'' RESPONSIBILITY STATEMENT

The Directors confirm that in the preparation of the annual accounts for the year ended 31^st March, 2022:

• The applicable Accounting Standards have been followed along with proper explanation relating to material departures, if any;

• The accounting policies, framed in accordance with the guidelines of the Reserve Bank of India, were consistently applied;

• Reasonable and prudent judgment and estimates were made so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit of the Bank for the year ended 31^st March, 22.

• Proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of applicable laws governing banks in India, and;

• The accounts have been prepared based on the principle of "going concern".

R. ACKNOWLEDGEMENT

The Board expresses thanks to the Government of India, Reserve Bank of India, Securities and Exchange Board of India, Stock Exchanges, Bank''s customers, Public and all other Stakeholders for valuable support, continued patronage and confidence reposed in the Bank.

The Board also placed on record its appreciation for the valuable contribution made by the members of the Bank''s staff at all levels and looks forward to their continued involvement in achieving the future goals.

For and on behalf of Board of Directors

Atul Kumar Goel

Managing Director & CEO

---

Mar 31, 2021

During the Financial Year (FY) 2020-21, Punjab National Bank (PNB) continued its journey towards excellence backed by its inherent strengths and 126 years of banking experience. The global economic outlook was shrouded with uncertainty in view of the new waves of infections and mutant strains of COVID-19. The Indian economy, after having regained positive growth, faced renewed challenges on account of the second wave of the pandemic. Despite the unprecedented situation, Bank continuously rendered banking services to its customers and continuously reinvented itself to adapt to the new emerging landscape. The highlights of the performance during the financial year are strengthened organization structure, profitability and the improved capital position. The revamped organizational structure, along with the verticalized, customer centric & digital credit delivery model has improved credit underwriting, efficiency and turnaround time (TAT). Having completed Business, Human Resource and Information Technology (IT) integration under amalgamation, Bank''s endeavor is to provide greater thrust towards improving business.

During the year, PNB was one of the first among amalgamated Public Sector Banks (PSBs) to carry out CBS migration of the eOBC and eUBI without affecting customer services. While the synergies out of amalgamation are being realized, Bank under took various new initiatives to transform and align with the changing financial environment and customer needs.

As at the end of March, 2021, Bank''s Gross Global Business stood at Rs. 18,45,739 Crore with Gross Global Advances at Rs. 7,39,407 Crore and Gross Global Deposit at Rs. 11,06,332 Crore. Current and Saving Deposits (CASA) was at Rs. 4,92,782 Crore with domestic CASA share at 45.5 per cent. In addition, Bank''s Operating Profit was at Rs. 22,980 Crore with the Net Profit of Rs. 2022 Crore for the FY 2020-21. As at the end of 31^st March, 2021, Gross Non Performing Assets (GNPA) ratio stood at 14.12 per cent and Net NPA ratio was at 5.73 per cent. While Global Net Interest Margin (NIM) was at 2.88 per cent in FY21, Capital to Risk Weighted Assets ratio (CRAR) was comfortable at 14.32 per cent.

Bank’s manifold achievements have been acknowledged at diverse prestigious national and international platforms. Among other accolades, your Bank was adjudged as the “Most Innovative Public Sector Bank of the year” in the ET-BFSI Excellence awards 2020. PNB was Joint runner-up in the IBA Banking technology Awards 2019-20 and received awards under categories of ‘Best Digital Financial Inclusion Initiatives’ and ‘Best IT Risk & Cyber Security initiatives’. Bank also secured overall 4^th Place among all PSBs in Enhanced Access & Service Excellence (EASE) 2.0 index and got highest number of awards amongst all PSU Banks in different themes.

"Against this backdrop, your Directors have pleasure in presenting the Annual Report of your Bank for the year ended 31^st March, 2021 (FY 2020-21) along with its audited Annual Financial Statements".

OUR PERFORMANCE A. FINANCIAL PERFORMANCE Assets and Liabilities

Total Assets of the Bank was at Rs. 12,60,633 Crore as at 31^st March, 2021. While the Net Advances stood at Rs. 6,74,230 Crore, Investment was at Rs. 3,92,983 Crore.

On the Liabilities side, Deposits stood at Rs. 11,06,332 Crore while the Borrowings was at Rs 42,840 Crore as on 31^st March, 2021.

Net Interest Income

The Net Interest Income of your Bank stood at Rs. 30,477 Crore during FY 2020-21. While Interest Income stood at Rs. 80,750 Crore, Interest Expenses was at Rs. 50,273 Crore.

Operating Profit

Operating Profit of your Bank during the FY 2020-21 stood at Rs. 22,980 Crore. While the total Income stood at Rs.93,562 Crore during FY 2020-21, total Expenses was Rs. 70,582 Crore in FY 2020-21.

Net Profit

Bank has earned a Net Profit of Rs. 2022 Crore in FY 2020-21.

Provisions and Contingencies

Total provisions made during FY 2020-21 were at Rs. 20,959 Crore with Provision for NPA at Rs 17,060 Crore. Provision Coverage Ratio (incl. TWO) of the Bank was at a robust 80.14 per cent as at 31^st March, 2021 and PCR without TWO was at 63.06 percent.

B. OPERATIONAL HIGHLIGHTS

Some of the operational highlights of the Bank during FY 2020-21 are listed below:

Financial

• Bank''s Global Business reached the mark of Rs.18,45,739 Crore in 31^st March, 2021, which was second highest amount among Public Sector Banks (PSBs).

• CASA Deposits at Rs. 4,92,782 Crore also remained second highest amongst PSBs with 45.5 per cent share in Domestic Deposits.

• Savings Deposit grew to Rs. 4,17,236 Crore as on March'' 21. Retail Term Deposit was at Rs. 5,05,975 Crore as on 31^st March''21.

• Core Retail Loans stood at Rs. 1,13,047 Crore as on 31^st March''21. MSME loan grew to Rs. 1,25,966 Crore in March''21.

• Cost to Income Ratio improved to 46.91 per cent in FY21.

Capital

The capital adequacy of the Bank improved during the financial year on account of capital raising by the Bank coupled with improved profitability. During FY 2020-21, Bank has raised equity of Rs. 3,788 Crore through QIP, Rs. 3,994 Crore through Tier -II Bonds and Rs 495 Crore through AT-1 Bonds. Further, Bank has also raised equity of Rs. 1800 Crore through QIP on 15^th May, 2021. The Bank continued with its focus on sustainable business growth by targeting better rated borrowers with low risk profile. Going forward, the Bank is strategically well placed to meet the growing credit needs of the economy.

Key Highlights

• The Capital Adequacy ratio of the Bank stood at 14.32 per cent, as of 31^st March, 2021, with Tier-1 capital at 11.50 per cent and Common Equity Tier-1 (CET-1) at 10.62 percent, with raising of Rs. 3,788 Crore through QIP.

• Bank raised Tier-II Bonds of Rs.3,994 Crore during the year and Tier II capital stood at 2.82 per cent as on 31^st March, 2021.

• The Credit Risk Weighted Assets (RWA) of the Bank were optimized to Rs. 4,90,310 Crore in March 2021 on account of focus on better rated accounts and churning of portfolio of the Bank.

Synergies under Amalgamation

i) Harmonisation of all products and processes:

All the products, policies and processes across PNB, erstwhile Oriental Bank of Commerce (eOBC) and United Bank of India (eUNI) have been harmonized and the best products and policies across the three banks have been adopted taking into account customer and employee needs along with the business interests and communicated to its employees and customers. Change in Rate of Interest and Service charges, wherever affected for the Amalgamated Bank were communicated to all the customers well before time.

ii) Integration of the payment systems: Integration of all major payment systems like Core banking Solution (CBS), Automated Teller Machine (ATM) switch, Debit Card Management, Internet Banking, Mobile Banking, Unified payment Interface (UPI), National Electronic fund Transfer (NEFT)/ Real Time gross Settlement (RTGS) interface, Immediate Payment Service (IMPS) switch, Public Financial Management System (PFMS) Module, SWIFT Module has been successfully completed. Migration of ATMs, BNAs of eOBC & eUNI to PNB Network has also been completed.

iii) Data integration / migration of all other applications: Integration of all major applications/ systems and networking has been successfully completed. Bank is in process of migration of identified surround applications in amalgamated entity.

iv) Human Resource (HR) Integration: The

amalgamation of eOBC and eUNI into PNB has completed one year. During the course of this year, the Bank has reviewed and harmonized all of its staff welfare and benefit schemes based on the “Best of three” principle and aligned HR with the business strategy of the Bank to boost performance and enhance the satisfaction of the employees. Bank has started to realize the expected HR synergies by way of reduction in recruitments.

v) Other Synergies from amalgamation: Bank has identified different operating segments like Branch/ ATM rationalization, Redeployment of staff to sales, Sale of identified premises, Savings in IT cost arising due to harmonized processes etc. for synergy benefits. Bank has initiated implementation for realization of synergy in the identified areas.

Major Initiatives:

Revamping of Organizational Structure: Bank has revamped its organization structure along with formation of various business verticals for efficient credit delivery, improved credit underwriting and Turnaround Time (TAT). Rollout of the revamped structure has been made with effect from 1^st July, 2020 with the three Banks functioning as a single unit. While the layering structure continue to be four tiered involving Branch, Circle, Zone and Head Office, some new verticals have also been formed. The revamped structure of Bank is segmented into:

• Business/Support/Control Verticals at Head Office

• Zonal Offices

• Zonal Audit Offices

• Circle Offices

• General Banking Branches, PNB Loan Points(PLPs),

Mid Corporate Centre (MCC), Large Corporate Branches (LCB) / Extra Large Corporate Branches (e-LCB)

Verticalized Credit Delivery Model under new Organizational Structure: Credit Underwriting Model has been revamped to improve efficiency and TAT:

Type of Vertical	Definition
Extra Large Corporate Branches/ Large Corporate Branches (ELCB/LCB)	Complete Branch, specifically designed to handle Corporate Credit Accounts above Rs. 50 Crore (ELCBs to handle above Rs. 500 Crore).
113 Mid Corporate Centers (MCC)	Processing Centers for Credit, handling PreSanction Appraisal and Post Sanction Monitoring of Corporate, Agriculture & MSME Accounts above Rs. 1 Crore and upto Rs. 50 Crore.
135 PNB Loan Point (RAM/iRAM)	Processing Centers for Credit, handling Pre-Sanction Appraisal of Retail, Corporate MSME & Agriculture Accounts above Rs. 10 Lakh and upto Rs. 1 Crore.

Bank has revamped Business/Support vertical as under:
Vertical	Catering Segment
Recovery, Resolution, NCLT & Legal Centre (SASTRA)	Improve efficiency and reduce TAT in Recovery actions
24 Zonal Risk Management Centre (ZRMC)	Risk Analysis (Rating & Operations Risk)-Independent risk vertical to segregate and strengthen Risk Assessment processes (approval of rating upto Rs. 10 Crore).
CASA Back Office	Account Opening
Government Business Vertical (GBV)	Acquiring of Government Business
Customer Acquisition Centre (CAC)	Acquiring of Institutional Business - Focuses on liabilities business from Corporates, Institutions, HNIs, and NRIs
Trade Finance Centre (TFC)	International Trade Finance & Outward Remittance

a) Cultural Integration: Cultural integration and managing cultural differences are major challenges in achieving the progressive synergies in amalgamation of the organizations. Post amalgamation the Bank is committed towards nurturing work environment and smooth integration of culture of all three banks in PNB 2.0. In view of the same, Bank initiated Cultural Integration Program. Main purpose behind the Cultural Integration plan is to align the strategic shifts of the amalgamated entity with employee''s expectations, which will further help in realizing synergy benefits. In Cultural Integration process the bank has included each layer of the organization so that Bank''s culture can be derived as per the employee''s aspirations.

b) Technological Initiatives in HR: Bank has successfully integrated its Human Resources Management System (HRMS) for enhancing ease of access & extending guidance to its rich talent pool of 1,00,000 employees. During the year, Bank has implemented its digital Performance Management System (PMS) for officers of the amalgamated entity for better planning, monitoring & evaluating the performance to unlock their potential and improve their efficiency and effectiveness.

c) Learning & Development: Bank has always believed that learning and development plays an important role in shaping and transforming the human capital. Agility of the human capital in learning, unlearning and relearning plays a decisive role in any organization''s success. In view of the Covid-19 pandemic, Bank has changed the workplace learning and has shifted from classroom trainings and imparted training

through virtual mode by converting existing classroom material into robust rapid e-learning solutions having unmatched speed, scale and quality.

d) Career Progression: Bank expedited the promotion exercise and completed the process for FY 2021-22 before March 2021 to ensure uninterrupted Banking operations. Furthermore, the Bank is continuously updating its policies to keep up with the aspirations of its employees and attuning it with the business needs of the Bank. During the year, the Bank has updated various HR policies such as Promotion Policy, Transfer Policy, Training Policy, and Overseas Placement Policy etc.

e) Covid-19 induced initiatives: Bank has taken number of initiatives like extending Work from Home (WFH) facility, introduced the facility of special leave, one time compensation in case of death due to Covid-19 etc to support its employees.

f) PNB Lens: Bank has launched an IT based solution for loan management christened as PNB LenS- the Lending Solution. This system is being implemented in phased manner for all kind of loans (MSME, Agriculture, and Retail & Other Credit). The objective is to speed up and maintain consistency in underwriting standards in loan processing and sanctioning of credit proposals.

g) Surveys and Feedback from field: The bank has initiated steps to capture feedback/suggestions, through survey, to get a better understanding of employee''s honest feedback on impact of changes in products & processes made by the Bank post amalgamation. On the basis of outcomes of the employee''s survey, necessary modification have been incorporated in the processes.

Other Key New Initiatives Undertaken:

? Gram Sampark Abhiyan - (Launched on 2nd October 2020): 11 Lakh customers were contacted in around 29973 camps with increased credit facilities, digital on boarding and enrolment for social security.

? To accelerate the growth of forex business, Bank launched Trade Finance Redefined Portal. Fx-Retail portal is also being popularized for direct access to Interbank market.

? Fintech Initiative: PNB joined hands with IIT Kanpur to set up Fintech Innovation Centre to conduct research and develop technological solutions for addressing the challenges & explore opportunities in BFSI gamut.

? Digital Apnayen Campaign- Launched on 15th August 2020, more than 83 Lakh customers on-boarded on digital channels. Rs 4.20 Crore donated to PM CARES Fund on behalf of customers for Digital On-boarding since launch on 15th August 2020.

? PNB Cards & Services: A Wholly owned subsidiary of the bank namely, PNB Cards & Services has been incorporated to undertake the non financial support related to credit card business of the bank.

ASSET QUALITY

Despite Covid-19 scenario during most of the period (during FY 20-21), Bank is able to maintain Gross NPA at the level of Rs. 1,04,423 Crore as on 31^st March 2021. Focus on asset quality continues to be one of the top priorities for the Bank. Provision Coverage Ratio (PCR) continues to satisfactory level of 80.14 per cent as on 31^st March 2021.

Cash Recoveries

Total Cash Recovery for the FY 20-21 have been Rs. 11,442 Crore.

• Upgradation

Upgradation for FY 20-21 have been Rs. 2,363 Crore.

• Upgradation Through Resolution Mechanism

The Resolution Cell was created to exclusively deal with Restructuring/Resolution of NPA accounts and recovery in National Company Law Tribunal (NCLT) cases. The details regarding the same are as under:

(Amount in Rs. Crore)
Restructured Accounts
Total Sanctioned
	No. of A/c''s	Amount
FY 2020-21	4	3119

Further, a sum of Rs 4,220 Crore was recovered in NPA accounts under IBC in NCLT.

• Mega E-auctions

During FY 20-21, 10,370 properties were uploaded on e-Bikray portal. Out of which 1052 Immovable Properties (IPs) were auctioned successfully with success rate of 10.14 per cent.

• Sale of Assets to Asset Reconstruction Company (ARC)

Details of financial assets sold to Securitization/ Reconstruction Company (SC/RC) for Asset Reconstruction is as under:

(Amount in Rs. Crore)
Items		FY 2020-21
i.	No. of Accounts sold to ARCs	1
ii.	Book Outstanding of Accounts Sold	18.31
iii.	Aggregate consideration received (100 per cent cash)	11.01

• Initiatives taken to Improve Asset Quality during FY 2020-21

In order to support recovery efforts of field functionaries, a common recovery portal i.e. SASTRA Portal has been rolled out which is having 5 different modules like One Time Settlement (OTS), Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI), Debts Recovery Tribunals (DRT), National Company Law Tribunal (NCLT) & Wilful Defaulter. Through this common recovery portal, status of major recovery actions of a Borrower can be ascertained at a single place. OTS Module provides an automated platform for online processing of settlement proposals. For effective monitoring, standalone DRT and SARFAESI Portals have been re-configured as separate modules in the SASTRA Portal. All the NCLT cases are being monitored through NCLT Module which captures the latest status of each case. Wilful defaulter database of the Bank has been loaded through a separate module.

Further, for effective monitoring and follow-up of NPA Accounts, PNB Pride App was also rolled out in all the SASTRA Centres and Branches. This Geo Tagging enabled App helps in recording of field functionaries visit details and captures visit location of the visiting Officials.

Exclusive Vertical for recovery of NPA Accounts - As part of the Organizational restructuring, a separate vertical called SASTRA Vertical has been created for exclusive & focussed recovery operations. The Vertical operates with officers posted at different levels in the field who are exclusively working for recovery.

Special OTS Scheme - During the year the Bank has put more focus on accounts with outstanding up to Rs.5.00 Crore which constitutes the largest segment of the NPA Portfolio. For more recovery, the Bank has launched special OTS Scheme for this segment. The scheme is of Check box model - non-discriminatory and non-discretionary. More powers have been delegated at the field level for speedy & transparent one-time settlement in this segment. During FY 20-21,54,134 NPA accounts with O/S of Rs.1,346 Crores were resolved under the scheme.

D. INFORMATION TECHNOLOGY (IT) AND DIGITALIZATION

IT Amalgamation:

In a bid to create "NextGen Banks" with strong national presence and global reach, on 30th August, 2019, Honorable Finance Minister announced amalgamation of ten public sector banks into four. It was announced to amalgamate Oriental Bank of Commerce and United Bank of India with Punjab National Bank as anchor bank to give birth to India''s second largest public sector bank with effect from 1^st April, 2020.

This was also the year when the whole world was hit by Covid-19 and the lockdown that ensued.

Initial four to five months of FY 2020-21, Bank was working with lesser number of staff onsite, considering COVID guidelines. Vendors were working offsite. Challenges were abound. But Bank was sure of overcoming it.

Following activities were completed on Day 0 i.e. 1^st of April, 2020:

• Scheme codes, interest rates and charges were harmonized in all individual CBSs (Finacle 10 of PNB1.0, Finacle 7 of eOBC/eUNI).

• Enabled 14 interoperable services across all the branches of all the three banks for ensuring uniform standard basic critical services for the customers.

• A common landing page for Internet & Mobile Banking was built with an option to select & navigate to respective banks. Individual links got disabled.

Bank not only had smooth technology amalgamation but also it was the first among amalgamated PSBs to carry out CBS migration of the other two entities without affecting customer services. The whole program was executed by bank with its partners without hiccups. Further 196 surround applications were also made live for amalgamated entity during the financial year.

Other initiatives implemented during the FY 2020-21 are as follows:

a) PNB One and IBS in Regional Languages: PNB

One and IBS is now available in 9 languages:-Hindi, English, Tamil, Gujarati, Punjabi, Marathi, Bengali, Telugu and Malayalam.

b) Online Overdraft (OD) Against Fixed Deposit (FD): Customer can now avail the facility of Overdraft against Fixed Deposits using Mobile Banking application.

c) Auto Linking of Public Provident Funds (PPF) and Sukanya Samriddhi Accounts (SSY) Accounts: The PPF & SSY Accounts are auto-linked to Internet Banking Services (IBS) and Mobile Banking Services (MBS) on creation in GBM.

d) Implementation of Insurance Module in IBS Retail: Insurance products have been made available for Customers through Internet Banking Retail from following Insurance Providers for Life, Non-Life and General Insurance respectively:

• PNB MetLife

• Bajaj Allianz General Insurance Company Ltd

• Canara HSBC Oriental Bank of Commerce Life Insurance

e) Bharat Bill Payment System (BBPS) in Internet Banking: BBPS is now available on PNB Internet Banking Retail post login. It is featured with new functionalities of:

• Bill Payment

• Standing instructions

• Redo Last 10 Transactions

• Register Complaint

• Track Complaint

f) One Time Password (OTP) as Second Factor Authentication in Mobile Banking: OTP has been added as second factor of authentication in addition to transaction password for transactions through Mobile Banking.

g) Facility to update Limits of Debit cards through PNB One, the mobile banking app: Customization have been made in PNB One for providing the facility to customers for Debit Card Personalization, enabling them to update/ change Transaction Limit of their Debit cards for various channels viz ATM, POS, ECOM & Contactless separately. Further, Transaction Limits for Card enabled for International Transactions can also be updated/ modified.

h) Instant Demat Account Opening through IBS Retail: Facility of opening of Demat Account Instantly from NSDL has been provided to Internet Banking Retail customers.

i) Submission of Form 15G/15H using Internet Banking: Facility has been provided to Internet Banking Retail Customers for submission of Form 15G/15H using Internet Banking Retail.

j) Cardless Cash Withdrawal through ATM: In this functionality, customer is provided with an interface in IBS/MBS (presently live for PNBONE and in Closed User group (CUG) for IBS) for entering amount and also to set four digit TPIN (Transaction PIN) manually for cardless cash withdrawal facility. After doing the same, a reference number will be sent to customer''s registered mobile number, which will remain valid for 2 hours. Customer can withdraw the entered amount from any PNB ATM within 2 hours. Transaction will be validated by TPIN and reference number. Daily withdrawal limit with this facility is Rs. 10,000.

k) OTP Based Cash Withdrawal at Night: Bank has implemented additional security feature i.e. OTP based cash withdrawal at night for transactions done between 08:00PM to 08:00AM if amount is greater than Rs. 10,000/- for a single transaction. Customer has to use OTP, which is sent on his registered mobile number as an additional factor of authentication along with ATM PIN. This functionality is applicable for fast cash transactions also. The functionality is available for ONUS transactions only.

l) Monetary relief under Pradhan Mantri Garib Kalyan Yojna (PMGKY): Customization & Implementation of new Process for distribution of funds to 1.24 Crore women beneficiaries as per guidelines issued by Govt. of India.

m) Network Access Control (NAC): NAC was

implemented successfully in 2020-21 which has the capability to restrict unauthorized access.

n) Loan Account Opening through Application Programming Interface (API): This is a FINTECH project. M/S Jacota is the vendor approved for the

implementation. In this project currently SVANidhi loan account opening, Security Register Maintenance (SRM) creation, disbursement and Standing Instruction (SI) for the EMI all is done through API.

o) Finacle 10 migration of Manipur Rural Bank and On-Boarding on PFMS RRB: Along with CBS migration this RRB also on-boarded to PFMSRRB portal which is already being used by other RRBs sponsored by PNB. This is because their existing PFMS system will become incompatible with Finacle 10 and our solution is already running for RRBs which are also on Finacle 10.

p) PM SVANidhi: PM Street Vendor''s AtmaNirbhar Nidhi (PM SVANidhi) is a scheme where loan up to Rs. 10,000 is provided to street vendors. Bank has developed integration services to process the leads received by Small Industries Development Bank of India (SIDBI) portal under SVANidhi scheme. All the leads received by bank are processed instantaneously using the API exposed by bank for loan account opening, Customer details pull, amount Transfer and collection API to complete the cycle of PM SVANidhi.

q) Application Programming Interface (API) for Joint Liability group (JLG): Joint Liability group is a concept established by rural development agency and NABARD to provide institutional credit to small farmers. This scheme was a product in eUNI which is migrated to PNB environment after amalgamation of eUNI Core to PNB Finacle 10. The platform is developed by Fintech Empaneled Vendor M/S Jacota and Integration API has been developed by PNB team for integration with Jacota system to perform loan account creation, fetch additional information about customers, loan disbursal, collection and PAN validation.

r) Security Interest Charge Registration with Central Registry of Securitisation Asset Reconstruction and Security Interest (CERSAI) in real time basis: Portal has been developed which has integration with CBS to fetch the data already present in CBS for creation of security interest charge between PNB and CERSAI for immovable assets through API integration.

s) Central Grievance Redressal Management System (CGRMS) Portal- It is an in-house web based system (web application and web APIs) used to lodge complaints and service requests. Following improvements have been made in CGRMS portal: -

• Lodging of digital (transactional) complaints for failed/ fraudulent transactions

• Implementation of ODR (Online Disputes Redressal) in CGRMS where all complaints lodged (including those lodged at Contact Centers) can be tracked from all ADCs.

t) API for Preapproved Personal Loan: Customers are selected based on pre-defined criteria and such customer can avail pre-approved personal loan using the app developed where in loan up to Rs. 2,00,000 can be availed by such customers. API helps in pushing the request generated by Fintech Portal to CBS for Loan disbursal, Loan account creation, collateral creation, Standing Instruction (SI) creation and Permanent Account Number (PAN) validation.

E. MANAGEMENT INFORMATION SYSTEM

The Bank believes in harnessing the power of both big data and small data not only to drive decision-making and operational excellence but also to provide personalized experiences to increase customer delight.

Enterprise-Wide Data Warehouse (EDW): EDW is a

database that centralizes business''s information from multiple sources and applications and makes it available for operational, strategic, informative and analytics purpose to cater the need of management information system, decision support system & data mining. It is a single source of truth for organizational data and ultimate utilization of EDW is Regulatory, MIS reporting and ad-hoc data requirement for obligatory, strategic, operational and analytical purposes.

Data Analytics: The Bank has set up a Data Analytics Centre of Excellence (CoE). Analytics is being conducted on broadly three verticals- Business, Control and Support, with objective of new value-creation, cross-sell and up-sell opportunity, increasing revenue, cost reduction, product enhancement, channel optimization, default loan prediction, maximizing digital footprint and improve risk profiling of the customer base.

To align with the present and future strategic business requirements of PNB, to gain competitive edge and to cater to the needs of creating advanced digital capabilities for Bank under EASE agenda, Model based business leads are being generated on various personal segment. Team is also geared up for analytics based credit and non-credit offers to existing customers.

F. BRANCH NETWORK Domestic Presence

The Bank has one of the largest networks of 10769 branches as on 31^st March, 2021, comprising of 1931 Metropolitan, 2257 Urban, 2680 Semi Urban and 3901 Rural branches. Rural and Semi Urban Branches (RUSU) comprise around 61 per cent of the Total Branch Network.

International Presence

At present Bank has its overseas presence in 7 Countries by way of 2 branches (1 at Hong Kong and 1 at Dubai), 2 Subsidiaries (London and Bhutan), 1 Joint Venture (Nepal) and 2 Representative Offices (Myanmar and Bangladesh).

G. INTERNATIONAL BANKING

As on 31^st March, 2021, there were 240 branches authorized to handle Foreign Exchange Business and 4 Trade Finance Centers functioning at New Delhi, Chennai, Kolkata and Mumbai specialized for centralized handling of trade transactions. Bank has 9 Exchange Bureaus at important tourist centers to facilitate encashment of Foreign Exchange Currency Notes by foreign tourists/NRIs.

DOMESTIC FOREX BUSINESS

Bank has registered a Foreign Exchange Business Turnover of Rs. 90,105 Crore (Exports and Imports together) for the FY 2020-21.

Bank has an International Service Branch (ISB) functioning at New Delhi for handling Inward Remittances of the Bank as a whole. During FY 2020-21, Bank has handled remittance business of Rs. 42,718 Crore.

Bank also has Rupee Drawing Arrangements (RDA) with 17 exchange Houses (11 in the Gulf, 1 in Singapore, 2 in the USA, 1 each in UK, Canada and Seychelles) to facilitate remittance from NRIs.

The Bank also has remittance arrangement under Money Transfer Service Scheme (MTSS) with Transfast Worldwide.

OVERSEAS BUSINESS

Overseas business of the Bank stood at Rs. 43,266 Crore as at March 2021. Overseas branches are focusing on High Quality Medium/Long term Assets to build a diversified loan portfolio with low Credit Risk Weight to improve profitability.

Steps Initiated for Forex Business growth:

• 65 Exporter/ Importer meets were conducted on PAN India basis to address their grievances in respect of Forex business during FY 2020-21.

• Trade Finance Redefined Portal: Bank has launched a portal to allow export customers to scan and send documents directly to Bank improving TAT. It simultaneously offers other features like information dashboard which contains limit availability, due date calender of bills, real time tracking of transaction status etc.

• Forex Service Charges: The forex service charges have been rationalized with respect to advance receipt, inward remittance (other than export), outward remittance (other than import) for individual, Foreign Currency Demand Draft FCY-DD (issue)/ Telegraphic Transfer (TT) from Exchange Earners'' Foreign Currency (EEFC), transfer of amount from EEFC to Current Account (CA)/ Packing Credit Loan in Foreign Currency (PCFC)/FCBRD.

• Interest rate on Export Credit has been aligned with Rating of the borrower.

• Dedicated customer care desks are made available at all Trade Finance Centre (TFCs) to help trade finance customers. The contact details are also placed on PNB Corporate website.

• A dedicated email ID [e-mail] has been created exclusively for trade finance customers for their forex related operational issues which is under the direct monitoring of IBD.

H. BUSINESS DIVERSIFICATION Insurance Business:• Life Insurance:

Under Life Insurance, Bank has tie-up with the following Insurance companies, Life Insurance Corporation of India (LIC), PNB MetLife India Insurance Co. Ltd (PMLI) and Canara HSBC Oriental Bank of Commerce Life Insurance Co. Ltd (CHOICe).

The Bank''s earnings from Life Insurance business grew by 2.94 per cent during FY 2020-21 to Rs. 276.22 Crore.

New Products:

1. POS Suraksha by PNB Metlife.

2. Century Plan by PNB Metlife

3. Guaranteed Income 4 Life by CHOICe

4. Pension 4 Life by CHOICe.

• Non-Life Insurance:

Under the Non-Life Insurance, the Bank has tie-up with the following Insurance companies, The Oriental Insurance Co. Ltd. (OICL), Bajaj Allianz General Insurance Co. Ltd. (BAGIC), Cholamandalam MS General Insurance Co. Ltd. (CHOLA), Care Health Insurance Co. Ltd. (CHICL), and Star Health & Allied Insurance Co. Ltd. (SHICL).

Bank''s Commission Income stood at Rs. 92.65 Crore during FY 2020-21 (Health Insurance - Rs. 53.59 Crore & Asset Insurance - Rs. 39.06 Crore). During FY 2020-21, Bank registered a YOY growth of 6.92 per cent in income.

New Products:

1. Equated Monthly Installment (EMI) protection plan for protecting retail loans by Care Health Insurance.

2. First of its kind COVID 19 benefit plan by CHOLA MS which pays an upfront amount of Rs. 50,000 per person covered under the policy simply on diagnosis of COVID of the insured.

3. Group Personal Accidental Insurance by Bajaj Allianz which provides a Sum Insured of Rs. 4 Lakh

at a premium of Rs. 68 only.

4. Group Care 360 - Rural: A comprehensive Health Insurance product has been designed for rural customers at a subsidized rate.

• Mutual Funds:

The Bank is distributing and marketing Mutual Fund products of M/s Principal Asset Management Pvt. Ltd., M/s Nippon Life Asset Management Ltd., M/s UTI Asset Management Company Ltd., M/s Aditya Birla Sunlife Asset Management Company Ltd., M/s LIC Mutual Fund Asset Management Ltd, M/s DSP Investment Managers Pvt Ltd and M/s Franklin Templeton Asset Management (India) Pvt Ltd. During FY 2020-21, Income of Rs.3.81 Crore was earned.

• Depository Services:

As a Depository Participant, bank opened 5,539 Demat Accounts and 7,514 Online Trading Accounts in FY 2020-21. Insta Demat facility was introduced in September 2020. 3,268 accounts were opened through this facility in FY 2020-21.

• Merchant Banking:

Bank has license to act as a Banker to Issue, Debenture Trustee and Merchant Banker. During FY 2020-21, 109 IPOs were launched whereas 105 IPOs were launched in FY 2019-20. However, the amount blocked in ASBA increased to Rs. 4,969.91 Crore during FY 2020-21.

New Initiatives during FY 2020-21

a. Life Insurance & Non-Life Insurance Business:

1. The facility for online purchase of Insurance Policies under Life insurance has been made operational through Internet Banking.

2. Online Solicitation of Asset & Health Insurance has been launched through Internet / Mobile Banking.

b. Depository Business:

1. Insta Demat facility to open Demat Account instantly through Digital Channel was launched in collaboration with NSDL.

2. 8 Webinars held on Depository Services in collaboration with NSDL for prospective customers to create awareness.

c. Lead Management System:

Addition of missed call channel in Lead Management System of CRM with effect from October 2020 through which customer can express interest in bank product by giving a missed call and will receive a call back from bank.

d. Customer Acquisition Centres (CAC) and Government Business Vertical Centres (GBV):

In the new revamped structure of PNB, 57 Customer Acquisition Centres (CACs) at major locations & 21 Government Business Vertical Centres (GBVs) at State Capitals across India became operational since July 2020.

The main objective of these vertical centres is for focused approach to generate bulk business through strategic tie ups with existing/new Corporate/ Institutional/Govt./

Defence & PSU clients, especially those enjoying credit facilities from us by exploring cross sell/up sell bouquet of various Bank products, especially Third Party Product (TPP). In addition, structure also focus on deepening relationship with HNI/NRI clients by exploring up sell/ cross sell opportunities.

I. GOVERNMENT BUSINESS

With a view to play a more proactive role in the transfer of funds from Centre and States to various beneficiaries, Bank has been making efforts to have a sizeable number of Public Financial Management System (PFMS) agency accounts. As on 31^st March, 2021, there were 3.44 lakh agency accounts PAN India. Bank is also an accredited banker to nine different Central government departments post amalgamation. These numbers will further rise. Bank has been increasing tie-ups with various State governments to cater to their specific needs.

Some of the initiatives taken up by the Bank under Govt. Business during the year are given as under:

? Govt. E-Market Place (GeM): Bank is the first among nationalized banks to be available on GeM portal for providing our services to vendors, i.e. sellers and purchasers. These services include GeM pool account, e-PBG (Performance Bank Guarantee) & e-EMD (Earnest Money Deposit).

? Fastag: National Electronic Toll Collection Project has been implemented and all branches have been enabled for issuance of Fastags.

? National Pension System (NPS): Four Regional Rural Banks sponsored by our bank have been on-boarded for NPS remittance.

? Public Financial Management System (PFMS): Bank has timely disbursed funds of approximately Rs. 3,720 Crores to about 62 lakh beneficiaries under PM Kisan Samman Nidhi.

? Through active marketing, more than 1.21 lakh PPF, more than 61,000 Sukanya Samridhi Accounts and more than 53,000 Senior Citizen Saving Accounts were opened during the FY 2020-21

? Series of Sovereign Gold Bond subscription launched by Govt of India were marketed by our branches and 1598 Kgs were sold.

? Bank is disbursing pension of approximately 10 lakh pensioners i.e. Central Govt, Defence, Railways, Telecom and state Government.

? Bank is having integration with various states and is collecting online and offline taxes through their Cyber Treasury Portal and collection of VAT is done in 21 States.

? Collection of taxes (Direct & Indirect) is being done through offline and online on PAN India Basis. Bank is one of the major collectors of taxes for Central & State Government.

J. TREASURY OPERATIONS

Gross Domestic Investments grew to Rs. 3,94,889 Crore as on 31^st March, 2021 with the averageinvestments at Rs. 3,88,418 Crore. Interest income from the investment portfolio stood at Rs. 24,566 Crore for FY 2020-21.

The Bank actively traded in SLR and Non-SLR securities throughout the financial year. Total trading profit for the FY 2020-21 is Rs. 4,350 Crore.

System liquidity continued to be in surplus during 2020-21 on account of various liquidity augmenting measures undertaken by the Reserve Bank of India in the post-COVID-19 period. From April 2020 onwards there has been a surplus liquidity in the Banking system which has continued till 31^st March, 2021 with average daily liquidity to the tune of Rs. 5 Lakh Crore. RBI took many liquidity augmenting measures such as Targeted Long Term Repo Operations (TLTRO) of Rs. 1,00,000 Crore and TLTRO 2.0 of Rs. 13,000 Crore against announcement of Rs. 50,000 Crore. It also actively used several instruments to manage liquidity like repo, fixed as well as variable rate reverse repo and MSF under the Liquidity Adjustment Facility (LAF). Numerous open market operations (OMOs) of G-Secs as well as State Development Loans (SDLs) including special OMOs involving simultaneous sale and purchase were conducted throughout the year amounting to Rs. 3,13,295 Crore.

The liquidity position of the bank remained surplus during FY 2020-21 which was deployed majorly through reverse repo operations with RBI as well as in various money market instruments like Call, Tri-party Repo Order Matching Platform (TREPS) and Clear Corp Repo Order Matching System (CROMS).

• Fixed Income (SLR/NSLR)

During FY 2020-21, Bank booked trading profit of Rs. 4,100 Crore from purchase and sale of fixed income instruments and other investments.

Bond market witnessed a lot of volatility in FY 2020-21 primarily due to the outbreak of COVID-19 pandemic.

Declining trend of yield was seen till mid of July 2020 due to repo rate cut of 75 basis points by Reserve Bank of India on 27th March, 2020 along with reduction of CRR by 100 bps.

This was followed by another rate cut of 40 basis points on 22nd May, 2020 bringing the repo rate to its present level of 4 per cent. However, revision of market borrowing by Central Government for FY 2020-21 from the budgeted Rs. 7.80 Lakh Crore to around Rs. 12 Lakh crore to mitigate the unfolding impact of COVID-19 dented risk appetite of the investors leading to the hardening of yields for a brief period.

Since mid of July 2020, barring some brief period of volatility, bond markets mostly remained range bound. While steady increase in Brent crude oil prices since May 2020 and continuous hardening of U.S. treasury yield since August 2020 exerted pressure on bond markets, but throughout the period RBI remained supportive with the announcement of outright/special

OMOs which even included the OMO purchase in State development loans. For addressing the larger supply of dated securities, RBI granted a special dispensation of enhanced HTM limit of 22 per cent of NDTL till 31^st March 2023, for SLR securities acquired between 1^st September, 2020 and 31^st March, 2022 through a series of notifications.

On 1^st February, 2021, Union Budget for FY 2021-22 pegged the gross market borrowing for FY 2021-22 at around Rs.12.06 Lakh Crore, but at the same time, increased the market borrowing for FY 2020-21 by Rs. 80,000 Crore sending jitters in the bond market. This extra borrowing for FY 2020-21 was in addition to the Rs.1.10 Lakh Crore announced earlier by the Government of India to functionalize the special window for compensating the States to meet the GST shortfall.

Despite inflationary pressures, which manifested in CPI based inflation data till November 2020, the Reserve Bank of India Monetary Policy Committee maintained its accommodative stance and indicated the availability of policy space which would be used judiciously once inflation cools down. Growth, which contracted massively by around 24.4 per cent in Q1 and then again by around 7.4 per cent in Q2, finally expanded marginally by around 0.5 per cent in Q3 and by 1.6 per cent in Q4 of FY 2020-21, raising hopes for growth revival in the days ahead.

• Equity & Mutual Funds

Bank earned a profit of Rs. 227 Crore in FY 2020-21 from trading in equity shares and investment in mutual funds. Indian equity markets crashed due to the sudden announcement of a nationwide lockdown in March 2020 in order to control the spread of the virus by the Union government. However, Nifty 50 and Sensex have rebounded sharply from its lows and continue to trade at all-time highs as of now.

It appears that the present market has already discounted the worst and is anticipating significant improvement in earnings in the coming quarters due to a strong revival in demand post the mass vaccination drive being carried out across the country. Economic indicators like GST tax collections have also shown significant improvement.

• Forex

Net forex income of the bank for FY 2020-21 was Rs. 1,395 Crore. The Indian Rupee remained largely stable throughout the year and traded in a broad range of 72.26-76.92. It experienced a knee jerk depreciation during April 2020 pushing it to 76.92 but recovered on the back of record FDI inflows received by the country. It finally closed at 73.11 on 31^st March, 2021.

K. CUSTOMER CARE

Being a service organization, providing quality customer service and ensuring customer satisfaction are the prime concerns of the bank. The Bank believes that providing prompt and efficient service is essential not only to attract new customers, but also to retain existing ones. Aim of the Bank is to minimize the instances of customer complaints and grievances through proper customer service delivery and review mechanism and to ensure prompt redressal of any customer complaints and grievances that may arise despite this.

Initiatives undertaken during the year for improvement in customer service

• The Bank has an On-line Grievance Redressal Management Portal called Centralized Grievance Redressal Management System (CGRMS), which was earlier managed by the vendor and during the period in-house Portal is developed and made operational from 1^st July, 2020. Through this system, the customer gets an immediate acknowledgement and can keep a track of the complaint also.

• Customers can lodge their requests/complaints in the CGRMS through Bank''s website, Internet Banking Service, Mobile Banking Service and Mobile App.

• New features are implemented in the CGRMS which are differentiated processing flows and time frames for resolution for each sub-category of complaint, Auto-escalations to respective supervisory levels, Standardized status types for customers with proactive communication at major steps.

• The Bank has state-of-the-art Contact Centers at Gurugram and Noida to provide tele-banking services to its customers on 24 x 7 x 365 basis through two leading Service Providers. In addition to these two Primary Sites, the Bank has also established two Secondary Contact Centers at Dehradun and Bhopal to provide tele-banking services to its customers in 11 languages. The number of services extended to 11 by Contact Centre through IVR during FY 2020-21 thereby making them more customer friendly.

• The Bank has constituted teams of officials at Customer Care Centre at Head Office, Zonal Offices and Circle Offices to pay incognito visit to branches to assess standard of service. During FY 2020-21, officials of the Bank made 8,496 incognito visits to branches PAN India. Deficiencies pointed out by the visiting officials are being shared with the concerned branches/Circle Offices for taking corrective steps.

• The status of complaints received by the Bank is reviewed by “Customer Service Committee of the Board”, a Sub-Committee of the Board, on quarterly basis. The meetings of the Committee are presided over by Managing Director & CEO.

• The Bank has a “Standing Committee on Customer Service”, which also reviews customer service of the bank as well as implementation of the Code of Bank''s Commitments to Customers of Banking Codes and Standards Board of India (BCSBI).

• The Bank has in place an Internal Ombudsman as per the recommendations of the Damodaran Committee. The system ensures greater transparency in the redressal of grievances by the Bank.

• Customer Service Committees in all the branches and Circle Offices look into the quality of customer service rendered and critically examine the feedback/ suggestions for improvement in customer service. These committees meet once in a month where staff and the invited customers interact freely on service related issues.

• Theme Based Meetings are being conducted at monthly intervals in all branches on a pre-decided date and theme to improve awareness among field staff about bank''s products and services, and to sensitize them about the issues of maximum importance.

• Door Step Banking services started by the Bank from 9th September, 2020. It is a facility by which customers can avail many of the financial/non-financial banking services through the two Vendors at 100 centers. It provides convenience to the customers to access different type of banking services from their Door Step.

• For FY 2020-21, out of a total number of 1,37,262 complaints (i.e. 1,876 complaints outstanding as on 31^st March, 2020, and 1,35,386 complaints received during FY 2020-21), 1,30,087 complaints were resolved up to the satisfaction of the complainant, till 31^st March, 2021.

L. IMPLEMENTATION OF OFFICIAL LANGUAGE

Punjab National Bank has always been a pioneer in the implementation of the Official Language Hindi in the Bank. Bank has ensured compliance of the instructions received from the Government of India, Ministry of Home Affairs, Department of Official Language, Parliamentary Official Language Committee and Ministry of Finance, Department of Financial Services. Bank has achieved most of the targets prescribed in the Annual Programme for the FY 2020-21 issued by the Government of India, Ministry of Home Affairs and Department of Official Language.

We have pleasure to inform that during FY 2020-21, the Bank has received 1^st prize under the Government of India''s highest "Rajbhasha Kirti" award for ''A'' region. Total 12 prizes were awarded to Bank''s various Zonal/ Circle Offices by Regional Implementation Offices of the Ministry of Home Affairs, Department of Official Language and Chandigarh TOLIC where the Bank is convener, won second Prize. During financial year 2020-21, total 196 awards from Government of India, Ministry of Home Affairs, Department of Official Language and various Town Official Language Implementation Committees have been received by various offices / staff members of our Bank.

During the financial year 2020-21, Punjab National Bank has made concerted efforts to increase the progressive use of Official Language in the Bank. Hindi and Regional Languages were used in publicity and promotional campaigns related to the schemes and products of the Bank. Intensive monitoring was done to achieve targets

set in Annual Programme and Corporate Action Plan of Official Language duly approved by the Board. Prizes were awarded to offices/staff doing excellent work in Hindi under Lala Lajpat Rai Shield Yojana and various other incentive schemes to increase the use of Hindi in the Bank. Quarterly bilingual house magazine of the Bank "PNB Pratibha" and half yearly Hindi magazines of the Zonal Offices were published regularly. PNB has efficiently discharged the responsibility of coordinating 29 Town Official Language Implementation Committees across the country.

Half yearly meetings of these committees were held regularly and Hindi competitions, Hindi workshops, Hindi seminars etc. were organized during the year.

Progress made in the use of Hindi in Information Technology:

• Facility of Hindi and other Regional Languages has been provided in Internet Banking and ATMs and mobile applications i.e. PNB One, Bhim PNB.

• Facility to print customer name in Hindi on debit card was provided.

• Customers have been provided the facility to generate ATM transaction slips in Hindi.

• SMS alerts were sent to customers in Hindi and regional languages.

• The Bank''s website is available in bilingual form in Hindi and English.

• Online Hindi reporting of all Branches, Circles, Zones and Divisions of Head Office was done on the Official Language web portal.

• Due to COVID-19 pandemic, virtual Hindi workshops, competitions, e-webinars, e-Inspections were organized through digital platforms apart from physical mode.

• Bilingualisation of Finacle and HRMS was done through Linguify software, through which customers can get passbook, CDR / FDR etc. and staff members can get their Bio Data, Salary Slip, Pension and Gratuity details etc. in Hindi also.

• Staff members were provided training on working in Hindi on computer.

During the financial year 2020-21, the Bank celebrated September 2020 as Hindi month all over India and the winners of Hindi competitions were felicitated by Managing Director and CEO in Hindi Diwas Samaroh organized at Head office and by field functionaries at field level.

M. PNB''S SUBSIDIARIES AND REGIONAL RURAL BANKS 1. DOMESTIC

i. PNB Gilts Ltd: During FY 2020-21, debt market remained volatile amidst positive factors such as successive policy rate cuts by RBI on account of growth concerns and adverse factors like Covid 19 pandemic, fiscal deficit concerns and sharp increase in CPI inflation.

The 10-yr benchmark yield touched a high and low of 6.50 per cent and 5.73 per cent respectively during the year and closed at 6.18 per cent as on 31.03.21.

Against the backdrop of volatile market conditions, PNB Gilts Ltd continued to fulfill all its obligations as a Primary Dealer mandated by RBI both in Primary and Secondary market. Alongside, the major focus of the company remained on enhancing the scale of operations and also undertaking new activities so as to utilise capital efficiently. Balance sheet size increased considerably. Marketing and sales functions were strengthened.

Company also forayed into Debt capital market (DCM) business as arrangers to Corporate Primary Issuances and entered into the top ten ranking (7th rank) in the prime ranking league table.

As a result of all the above, despite volatility, Company posted a Profit Before Tax (PBT) of Rs. 614.35 Crore during FY 2020-21 vis-a-vis PBT of Rs. 249.81 Crore during FY 2019-20. Profit After Tax (PAT) amounted to Rs. 454.12 Crores during. FY 2020-21 as against Rs. 186.35 Crore in the previous FY 2019-20. This is the highest PAT achieved by the Company since inception. Capital adequacy remains strong with its capital to risk weighted assets ratio (CRAR) at 45.58 per cent as on 31^st March, 2021 (32.47 per cent as on 31^st March, 2020), well above the regulatory minimum of 15 per cent for PDs.

ii. PNB Investment Services Ltd: The Company is a profit-making company from the first year of its operations. During the year ended March 2021, the Company earned a fee-based income of Rs. 5.33 Crore with a total income of Rs. 8.02 Crore as against a fee based income of Rs. 4.66 Crore and a total income of Rs. 7.47 Crore respectively for the year ended March 2020. Profit before Tax during the period ended March 2021 was Rs. 1.87 Crore as against Rs. 0.82 Crore for the period ended March 2020.

The company operates in three verticals, namely Corporate Advisory, Equity Capital Market and Security Trustee. In the Corporate Advisory Vertical, during the year PNBISL advised many marquee business groups and corporate clients on various transactions, including debt syndication, debt resolution and other corporate advisory assignments. With in-house expertise and deep understanding of select sectors, PNBISL prepared and delivered credible techno-economical viability (TEV) reports to its clients.

In Equity Capital Market Vertical, PNBISL actively participated in PNB''s fundraising transactions of Qualified Institutional Placement (QIP), Tier II Bonds and Additional Tier I Bonds.

The involvement in these transactions varied from advising on compliance requirements, drafting of offer documents and marketing of the offerings.

In the Trusteeship business, the market is highly competitive and the per-case fee levels are on a downward trajectory. Despite intense competition, the company has been able to maintain growth without compromising on the quality of clients. A cautious strategy has been adopted while selecting the clients, so as to ensure only credible clients are on-boarded. With its prompt and quality service, the company continues to build on its strategy to be a trusted partner of leading banks and corporates.

With the completion of one year of amalgamation and smooth transitioning of three banks into one, PNB has emerged as a stronger bank with an increased capability to offer credit of different ticket sizes. PNBISL with aggressive client identification and excellent execution strategies is well placed to translate this strength of the amalgamated entity into increased outreach of the bank with a diversified lending book.

2. INTERNATIONAL

i. PNB International Limited (PNBIL): PNBIL continues to serve its customers in London and Midlands through network of seven branches located at Moorgate, Ilford, Wembley, Southall, Leicester, Birmingham and Wolverhampton.

Even during the Covid pandemic the bank ensured to provide all services to customers in smooth and safe manner. During FY 2020-21, the total business of PNBIL increased from 1,523 USD Million to 1,755 USD Million thus showing growth of 15 per cent under challenging circumstances.

The bank continues its efforts at product diversification and digitalization in order to enhance its services. During the year PNBIL introduced new credit products like Buy-to-Sell, Fixed Interest loans etc. to provide more options to its customers. A new software has been implemented in order to strengthen the compliance framework. The bank''s website has been revamped for better customer experiences. The bank is also working on “Aggregator Concept” for deposit mobilization in order to enhance its outreach and better liquidity management.

ii. Druk PNB Bank Ltd: Druk PNB Bank Ltd, Bhutan, Banking Company having its corporate office at Thimphu, Bhutan. Druk PNB Bank Ltd has started its operation on 27th January, 2010, in Bhutan as the country''s fourth commercial Bank, with a component of both FDI and joint venture in the Banking Sector. Presently Bank has 8 branches and 30 ATMs spread across the country.

Total Business of the DPNBL increased to Rs. 2,780.01 Crore as on 31^st March, 2021 from Rs. 2,534.39 Crore as on 31^st March, 2020 showing YOY growth of 9.69 per cent. CASA Ratio of the Bank stood at 38.7 per cent as on 31^st March, 2021. Profit of the Bank has increased to Rs. 19.56 Crore as on 31^st March, 2021 from Rs. 18.48 Crore as on March 31,2020. Paid up capital of the Bank as on 31^st March, 2021 is Rs. 84 Crore.

3. REGIONAL RURAL BANKS (RRBs)

As on 31^st March, 2021, there are 9 RRBs sponsored by the bank operating in 9 states namely Bihar, Haryana, Himachal Pradesh, Punjab, Uttar Pradesh, West Bengal, Assam, Manipur and Tripura including eUNI amalgamated RRBs covering 185 districts with a network of 4,590 branches

i. Total business of sponsored RRBs as on 31^st March, 2021 is Rs. 1,75,224 Crore.

ii. Deposits of RRBs are at Rs. 1,12,446 Crore as on 31^st March, 2021. The CASA deposits of the RRBs have increased to Rs. 68765 Crore as on 31^st March, 2021.

iii. The advances of the RRBs as on 31^st March, 2021 stood at Rs. 62,778 Crore.

iv. The sponsored RRBs are in profit (except DBGB Patna, AGVB Guwahati and MRB Imphal) and combined Net profit of the RRBs during the FY 2020-21 is Rs. 550 Crore.

v. The RRBs have cumulatively opened 1,87,13,273 accounts under Pradhan Mantri Jan Dhan Yojna (PMJDY) as on 31^st March, 2021 with Rupay ATM Cards issued in 60,23,759 accounts.

There is a decline in Net NPA to total advances of RRBs to 4.91 per cent in March 2021.

Financial Performance of RRBs as on 31^st March, 2021:(Amount in Rs. Crore)Particulars 31.03.2020 31.03.2021

Total Business 161918 175224

Aggregate Deposits 104472 112446

Aggregate Advances 57445 62778

Net profit -472 550

Operating Profit 1648 3063

N. AWARDS AND ACCOLADES

Bank''s effort have been recognized at various platforms. The Bank has been conferred the following awards for initiatives taken in the field of Information & Technology for the year 2020-21:

? Bank secured overall 4^th Place among all PSBs in EASE 2.0 index. Bank received highest number of awards amongst all PSU Banks in different themes as under:

• Responsible Banking-2^nd runner up

• Deepening FI & Digitalisation - 2^nd runner up

• Governance and HR - 2^nd runner up

? ET-BFSI (part of renowned Economic Times Group) judged PNB as the “Most Innovative Public Sector Bank of the Year" in the ET-BFSI Excellence awards 2020.

? PNB was Joint runner-up in the IBA Banking technology 2019-20 awards for the following categories:

• Best Digital Financial Inclusion initiatives

• Best IT Risk & Cyber Security initiatives

? M/s Infosys awarded PNB with “Runner Up Award” in Finacle Client Innovation Awards 2020 for PNB''s path breaking “Process Innovations”

? DSCI Excellence Awards 2020 under the category “Security Leader of the Year in Banking”

? Assocham Awards - Runner up under Digital Service under PSB merged category.

? Indian Society for Training and Development (ISTD) Awards for Innovative Training Practices 2019-20 -Second Prize in Services (BFSI & IT/ITES Category).

? Skoch Gold Award - Response to COVID Guaranteed Emergency Credit Line (GECL). Also Bank won Skoch Order of Merit Award 2021 in the following categories:

• Amalgamation of Security Solutions of the merging entities.

• Guaranteed Emergency Credit Line (GECL)

• Chatbot in PNB Internet Banking and Mobile Banking

• Reduction in Technical Decline in Aadhar enabled Payment system ( AePS)

? Bank''s mobile App, PNB Verify won Finnoviti Award 2021 for its various features enhancing the security of PNB Retail Internet Banking and debit card transactions.

O. FUTURE BUSINESS PLAN OF THE BANK

Despite the challenges due to COVID-19 pandemic, Bank continued providing uninterrupted services to the customers in these testing times.

Post amalgamation, PNB has new opportunities due to wider customer base and their credit demands and is well positioned with scaling up to devise better risk management and corporate governance practices. Changes in the organization structure in sync with the increased number of branches, service centres and introduction of new verticals have strengthened the last mile delivery and credit underwriting. Going forward, strategic thrust areas for the Bank will be in the area of 1) Customer: Customer segmentation for better customer convenience, 2)Channel: Thrust on contactless banking, strategic partnerships to grow in underpenetrated markets and migrating customers to new age channels 3) Product: Reposition/refine products based on customer segment and value proposition, 4)Operating Model: Transform branch as a sales & service centre, 5) Technology & Analytics 6) Align Human Resource Strategy & Re-imagine collections with recovery as Profit Centre.

Overall, Bank''s focus will remain on Customer Centricity, Strengthening Balance Sheet, Technology & Digital Delivery and Human Resources. Bank aspires to be

digitally well-equipped to face the emerging situation and will strive to engage customers through digital channels, encourage automation and digitalization of processes.

Bank is always committed to ensure optimum use of resources to the benefit and create value for all our stakeholders, be it customers, employees or investors. Greater customer convenience and employee safety will always remain our topmost priority. Bank shall endeavor to make more value added transformations through new innovations, products and processes to create more value for stakeholders.

P. BOARD OF DIRECTORS

The Board of the Bank comprises of 9 Directors including 5 whole time Directors i.e. One Managing Director & CEO and four Executive Directors as on 31^st March, 2021.

During the FY 2020-21, the following changes took place in the composition of Board of Directors:

? Shri Sanjay Kumar has been appointed as Executive Director on the Board of Bank with effect from 1^st April, 2020.

? Shri Vijay Dube has been appointed as Executive Director on the Board of Bank with effect from 1^st April, 2020.

? Shri Sanjay Verma, Shareholder Director completed his tenure on 14th June, 2020.

? Dr. R. K. Yaduvanshi, Executive Director completed his tenure on 8th October, 2020.

? Shri Swarup Kumar Saha, has been appointed as Executive Director on the Board of Bank with effect from 10th March, 2021.

? Shri Gautam Guha, has been appointed as Shareholder Director on the Board of Bank with effect from 18th March, 2021.

The Board wishes to place on record its appreciation for the valuable contribution made by Shri Sanjay Verma (Shareholder Director) and Dr. R. K. Yaduvanshi (Executive Director).

Q. DIRECTORS'' RESPONSIBILITY STATEMENT

The Directors confirm that in the preparation of the annual accounts for the year ended 31^st March''2021:

• The applicable Accounting Standards have been followed along with proper explanation relating to material departures, if any;

• The accounting policies, framed in accordance with the guidelines of the Reserve Bank of India, were consistently applied;

• Reasonable and prudent judgment and estimates were made so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit of the Bank for the year ended 31^st March''21.

• Proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of applicable laws governing banks in India, and;

• The accounts have been prepared based on the principle of “going concern”.

• The Internal Financial Controls had been laid down and that in all material respect, the Bank has adequate Internal Financial Controls except certain area of improvements in Risk Control matrix (RCM) and such Internal Financial Controls over Financial Reporting were operating effectively as at 31st March 2021.

R. ACKNOWLEDGEMENT

The Board expresses thanks to the Government of India, Reserve Bank of India, Securities and Exchange Board of India, Stock Exchanges, Bank''s customers, Public and all other Stakeholders for valuable support, continued patronage and confidence reposed in the Bank.

The Board also placed on record its appreciation for the valuable contribution made by the members of the Bank''s staff at all levels and looks forward to their continued involvement in achieving the future goals.

For and on behalf of Board of DirectorsCH. S. S. Mallikarjuna Rao

Managing Director & CEO

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Mar 31, 2019

DIRECTORS’ REPORT 2018-19

The Financial Year 2019 was a year of reckoning for Punjab National Bank. Despite numerous challenges, your Bank displayed resilience and overcame the adverse impact in the most resolute manner. A series of measures and strategic initiatives were undertaken in the Bank ranging from strengthening of systems, procedures and control measures to realignment of business strategy. Efforts were also channelized towards improving recovery, capital conservation and incorporating structural changes in the Bank.

Due to the swift action and strategy, your Bank could make a good progress and deliver commendable operating performance. The highlight of the performance was addressing of the key challenges, namely improvement in asset quality, improving the operating profit and capital optimization without any adverse impact on its business. There has been an improvement in the crucial performance parameters in FY’19. There has been decline in Gross Non Performing Assets and Net Non Performing Assets helped by record Gross Recovery of more than Rs.20,000 crore in FY’19 as against the Recovery of Rs.9666 crore during FY’18 and YOY increase of 26.2% in Bank’s Operating Profit to Rs. 12995 crore.

The Bank’s Gross Domestic Business increased by over Rs 1 lakh crore during the financial year to reach the landmark figure of Rs 11.45 lakh crore as at March’19 showing a YOY growth of 11.1%. While Gross Domestic Advances recorded YOY growth of 14.1% to reach Rs. 4.91 lakh crore, Domestic Deposits at Rs. 6.54 lakh crore grew YOY by 9.0%. The Bank’s CASA Deposits stood at Rs. 2.85 lakh crore and the share of CASA to Domestic Deposits was at 43.51 %.

To summarize, Financial Year 2018-19 was indeed an eventful year for the Bank, wherein we successfully left the adversity behind reflecting a clear triumph of self belief and trust of our customers and stakeholders. Bank’s performance has been recognized at diverse prestigious platforms and your Bank was adjudged as the ‘Best Performing Bank’ amongst all Public Sector Banks and conferred with “EASE Reforms Excellency’ Award. Besides, in terms of customer satisfaction ratings, your Bank has been ranked 2nd among all Public Sector Banks in India in the recent Forbes magazine survey for assessing "The World''s Best Banks 2019”.

Against this backdrop, your Directors have pleasure in presenting the Annual Report of your Bank for the year ended March 31, 2019 (FY’19) along with its audited Annual Financial Statements.

OUR PERFORMANCE

A. FINANCIAL PERFORMANCE

Assets and Liabilities

Total Assets of the Bank increased YOY by 1.19% to Rs 7.75 lakh crore as at 31st March 2019 from Rs 7.65 lakh crore as at 31st March 2018. During the period, the Net Advances of the Bank increased by 5.65% to Rs 4.58 lakh crore from Rs 4.34 lakh crore. Investment increased by 0.91 % to Rs. 2.01 lakh crore from Rs 2.00 lakh crore as at 31st March 2018.

On the Liabilities side, Global Deposits rose by 5.26 % from Rs.6.42 lakh crore to Rs 6.76 lakh crore during this period. Borrowings declined YOY by 35.3% to Rs 39326 crore from Rs 60851 crore in March 2018.

Net Interest Income

Net Interest Income of your Bank increased YOY by 15% to Rs 17156 crore during FY''19. While Interest Income grew 6.9% YOY to Rs.51310 crore, Interest Expenses growth was contained at 3.3% to Rs.34154 crore.

Operating Profit

Operating Profit of your Bank grew by a robust 26.2% YOY during the FY to Rs 12995 crore. Core Operating Profit excluding gains from treasury operations grew YOY by 69.1% to Rs 11903 crore. Total Income of your Bank increased from Rs.56877 crore in FY’18 to Rs 58688 crore during FY’19. Total Expenses declined from Rs.46582 crore in FY’18 to Rs. 45692 crore in FY’19.

Net Profit/Loss

Bank has narrowed down its net loss to Rs 9975 crore in FY’19 against the loss of Rs.12283 crore during FY’18. Total provision stood at Rs 22971 crore in FY’19 including a provision of Rs. 7167 crore towards the one off incident.

Provisions and Contingencies

During FY’19, your Bank has booked provision (other than tax) of Rs 28,341 crore compared to Rs. 29,869 crore last year. Provision for NPA stood at Rs 24,435 crore in FY’19. Provision Coverage Ratio of the Bank improved to a robust 74.50% as at Mar’19 from 58.42% in Mar’18.

B. OPERATIONAL HIGHLIGHTS

Despite challenging circumstances, the Bank performed creditably and reached several new milestones. Some of the operational highlights of FY ‘19 are listed below:

Financial

- Bank achieved a new landmark with Gross Domestic Business at Rs 11.45 lakh crore in 31.03.2019.

- The Bank has the highest Net Global Business amongst Nationalized Banks as at 31st March 2019.

- CASA Deposits at Rs 2.85 lakh crore remained the highest amongst nationalized banks with 43.51 % share in Domestic Deposits.

- Retail Advances grew by 21.7% during the year with 25.4% growth in Housing Loan Segment.

- All major National Goals under Priority Sector were achieved as at 31.03.2019.

- Cost of Domestic Deposits declined from 5.25% in March 2018 to 5.24% in March 2019.

- Domestic Net Interest Margin increased from 2.42% in FY’18 to 2.59% in FY’19.

Capital

- In order to ensure business growth under capital constraints, churning of the portfolio was undertaken towards better rated borrowers with low risk profile. The strategic approach ensured a strengthened balance sheet with capital conservation.

- To instill a sense of belongingness towards the Bank, the Employee Share Purchase Scheme (ESPS) was implemented which garnered an impressive more than 90% subscription. The capital infusion by the Government under the Recapitalization plan further strengthened the CRAR. The Bank’s CRAR stood at 9.73% as on Mar¹19 constituting Tier I capital of 7.49% and Tier II capital of 2.24%.

IT and Digital Initiatives

- Your bank believes in leveraging technology for delivering best customer experience. Bank continues to invest in automation of our internal processes to improve efficiency, risk management and reduce cost of operations. Bank has introduced different digital applications in order to facilitate digital transactions such as PNB M-Passbook, BHIM PNB, PNB MobiEase etc.

- Recently Bank has launched “PNB ONE” by unifying all Mobile Apps under one App for providing various banking processes through a single platform. Bank endeavours to enable all the eligible financial transactions and Value Added Services through this App.

- As a result of Bank''s efforts towards digitalization, digital transactions have recorded more than 100% YoY growth in FY''19. Bank has achieved about 120% of the annual target set up by Ministry of Electronics and Information Technology(MeitY) in February 2019 itself.

Transformation Exercise

- Under the comprehensive in-house transformation exercise, Mission PARIVARTAN, Bank aims to transform itself into a future ready Bank of the country. In this direction, various initiatives were taken to implement structural changes in the Bank through the three Ps i.e., People, Processes and Products (PPP).

- Centralized Loan Processing Centres (CLPC) were operationalised in line with the Govt, of India''s EASE program in order to strengthen the credit processes including credit origination, appraisal, underwriting and processing. These CLPCs are manned with specialist workforce to improve credit quality and Turn Around Time (TAT). CLPCs have also ensured robust internal systems, processes and efficient monitoring through segregation of pre- and post- sanction responsibilities, qualitative credit assessment and efficient monitoring. 18 CLPCs were opened all over India to ensure improved turnaround time and qualitative credit assessment.

- Besides the above, initiatives like revamping of Marketing Structure, digitization of Trade Finance operations, branch rationalization and strengthening inspection & audit system were also undertaken.

C. ASSET QUALITY

Recovery of stressed assets continues to be one of the top priorities for the Bank. As a result of focused efforts in this direction, Gross NPAs of the Bank declined to Rs. 78473 crore as at 31st March 2019 from Rs.86,620 crore in 31st March 2018. Similarly, Net NPAs declined to Rs.30038 crore as on 31st March 2019 from Rs.48,684 crore in Mar’18. In terms of ratios, Gross NPA ratio declined to 15.50% from 18.38% in Mar’18 and Net NPA ratio declined to 6.56% from 11.24% in Mar’18. Provision Coverage Ratio (PCR) improved to 74.50% as on 31st March 2019 from 58.42% in 31st March 2018. Besides, fresh advances have been made in better rated accounts to improve the asset quality.

Initiatives taken to Improve Asset Quality during FY’19

- Stressed Assets Management Vertical (SAMV) was created for enhanced and timely recovery through a dedicated, specialized and motivated team spread all across the country.

- During FY’19, a new scheme was launched, namely “Special Scheme for One Time Settlement for NPA accounts 2018” for accounts with balance outstanding up to Rs. 25 crore empowering various field level functionaries to accelerate recovery in this segment. Under the said scheme, 53,255 OTS proposals were approved.

- A scheme for Recovery in Specifically Identified Accounts, was also launched from 05.12.2018 to 31.03.2019. The accounts identified for the scheme carried 100% provision.

- A specialized online OTS portal was launched for real time monitoring of OTS proposals and Specialized Asset Recovery Management Branches were created as part of the vertical for management of NPA accounts with exposure more than Rs 50 lakh.

- Bank also organized Mega Rin Mukti Shivirs for giving impetus to recovery especially in small advances, to expedite the pace of settlement.

- Concept of “Recovery Champions” was introduced to felicitate the outstanding performers in the field of recoveries in NPA accounts on monthly and yearly basis.

- Bank also took initiative in identifying Wilful Defaulters and notices were issued to various borrowers who were found to have committed an act of Wilful Default. As a result, as on 31.03.2019, 1142 borrowers were declared as Wilful Defaulters.

- Key Responsibility Areas (KRAs) were formalized for staff working in ARMBs, recovery teams at CO/ZO level and in the 50 identified branches having large concentration of NPAs.

- Recovery War room set up last year comprising of 5 senior officers is in operation for constant and vigorous follow up with field staff on daily basis.

- Bank took another constructive initiative "Mission Gandhigiri" to put moral pressure on the defaulters to payout/clear the dues. It included a peaceful dhama before the Borrowers'' place.

- Bank has been running successfully e-Auction portal for sale of assets under SARFAESI Provisions. It resulted in quick, hassle free and undisputed realization of sale of securitized asset.

D. INFORMATION TECHNOLOGY AND DIGITALIZATION

In today’s digitalized world with an unprecedented penetration of internet, it is very imperative to be tech savvy. In alignment with Government of India''s initiative of a Digital India, Bank has incorporated digitization at all levels and across all customer segments to provide a seamless banking experience. Against a target of 71 crore Digital Transactions for the financial year 2018-19, Bank has achieved 85.4 crores digital transactions (120% of the target) in Feb 2019 itself against the ambitious target set up by MeitY.

Alternative Delivery Channels

a) Internet Banking Services (IBS): As on 31st March 2019, Bank showed a YoY growth of 21% in respect of IBS users. Bank has introduced Overdraft (OD) against Fixed Deposit (FD) through Internet Banking Account.

b) Mobile Banking: As on 31st March 2019, there is a YOY growth of 55% users in mobile banking application of the Bank. With an aim to provide superior customer experience and simplified banking, Bank has recently launched a unified mobile application “PNB One” to facilitate multiple features through single platform. This, all- in- one application, allows users to transfer funds, view account statements, manage debit card & credit card and many other value added services at fingertips.

c) ATMs: In order to cater to the banking needs of customers, Bank has a vast Network of 9255 ATMs across the country and a strong card base of more than 7.42 crore.

Digital Initiatives during FY’19

Bank has been a pioneer in providing 100% CBS solutions in the banking industry across the country. All the bank’s service outlets/centers are working under CBS thereby extending convenient “anywhere anytime banking” to all customers.

Few of the digital initiatives taken during the year are enlisted below:

- Bank has recently launched NCMC Debit Card as per GOI directives which would enable a single interoperable digital payment mode in Metros, Railways and Bus services to fulfill Govt, of India''s vision of “One Nation One Card”. Besides, PNB DAV United Co branded Debit Card has also been launched during the year.

- The Bank has revamped the Rakshak plus Debit Card which will be providing additional befifit to Customers who are serving in Indian Army /Navy/Airforce & Indian Costguard.

- Bank last year opened a Digital branch under the brand name of “DigiHut” under the concept “Do it yourself. During FY’19, 4 more DigiHuts were opened.

- The Bank was selected as Digital partner in Kumbh Mela 2019, the biggest religious congregation at Prayagraj, wherein Bank provided services of its patented product, E Rupaya for digital payments, Mobile ATMs and Cash Deposit Machines to the pilgrims.

- The Bank has integrated with NPCI to work as an operating unit under Bharat Bill Payment Operating Unit (BBPOU) and it was made live in September 2017. Now the Bank is working as BBPOU-CU as well as BBPOU-CU on BBPS platform as the Bank started on-boarding of Merchant bill unit.

E. MANAGEMENT INFORMATION SYSTEM

Enterprise-wide Data Warehouse (EDW) has been successfully implemented in the Bank and has evolved into a single source of data catering to numerous requirements related to data/reports of the Bank facilitating meaningful decision making at all levels of the Bank.

Data Analytics: Data Analytics activities have been carried out with an objective of business development and sustainability by taking more accurate and informed decisions based on analytical studies on various topics/ products. Various analytics studies of descriptive and predictive nature were carried out during the year.

F. BRANCH AND OFFICE NETWORK

Domestic Network

The Bank has one of the largest networks of 6989 branches as on 31.03.2019 comprising of 1280 Metropolitan, 1387 Urban, 1727 Semi Urban and 2595 Rural branches. Rural and Semi Urban Branches (RUSU) comprise around 62% of the Total Branch Network.

International Presence

At present, Bank has its overseas presence in 6 countries by way of 2 branches (1 Hong Kong & 1 Dubai), 2 Subsidiaries (London & Bhutan), 1 Associate (at Kazakhstan), 1 Joint Venture (at Nepal).

G. INTERNATIONAL BANKING

At present, the Bank has 145 branches authorised to handle Foreign Exchange Business and 2 Trade Finance Centres at New Delhi & Chennai specialized in centralized handling of trade transactions. The Bank also has Specialized Export Permission (SEPs) branches at major export centres for extending services to the Import/Export customers. Besides, Bank has 21 Exchange Bureaus at important tourist centres to facilitate encashment of Foreign Exchange Currency Notes/Traveller Cheques by foreign tourists/NRIs.

The Bank is having International Service Branch (ISB) at New Delhi for handling Inward Remittances for the Bank as a whole. During FY’19, the Bank has handled remittance business of Rs.46,336 crore. The Bank also has Rupee Drawing Arrangements (RDA) with 32 exchange Houses (24 in the Gulf, 2 in Singapore, 2 in the USA, 1 each in UK, Australia, Canada and Japan) to facilitate remittance from NRIs. Apart from this, the Bank also has remittance arrangements under Money Transfer Service Scheme (MTSS) with 2 Money Transfer Organisations Worldwide.

H. BUSINESS DIVERSIFICATION

- Insurance Business

Life Insurance: The Bank mobilized premium of Rs. 2226 crore from 1,35,957 policies, as against total premium of Rs.1728 crore mobilized during FY’18, thus showing a growth of 28.82 %.

The Bank’s earnings from Life-Insurance business during FY’19 amounted to Rs.178 crore as against Rs.144 crore during FY’18, showing YoY growth of 23.61%.

Total business mobilized under Life Insurance business since inception is Rs.8106 crore, from 8,13,068 policies and total earning amounted to Rs.679 crore.

Non Life Insurance: Under the Non-Life Insurance, the Bank has a tie-up with The Oriental Insurance Company Limited, The New India Assurance Company Limited, Bajaj Allianz General Insurance Company Limited & Religare Health Insurance Company Limited (Stand alone Health Insurance).

The Bank’s Gross written premium stood at Rs. 357 crore from 8.30 lakh policies for FY’19 vis-a-vis Rs.262 crore from 7.12 lakh policies for FY’18. Further, the revenue earned during FY’19 was Rs. 48 crore as against Rs. 36 crore during FY’18, showing a growth of 34%. 2,17,356 health insurance policies were sourced in FY’19 as against 2,12,612 policies sourced in FY’18.

- Mutual Funds: The Bank is distributing and marketing Mutual Fund products of Principal Asset Management Pvt. Ltd, UTI Asset Management Company Ltd, Reliance Nippon Life Asset Management Company Ltd, TATA Asset Management Company Ltd, Aditya Birla Sun Life Asset Management Company Ltd. and LIC Asset Management Company Ltd. During Fy’19, the Bank mobilized a sum of Rs. 3445 crore.

- Depository Services: The Bank was awarded “Top Performer in New Account opened” under Bank category from NSDL as Depository Participant. As a Depository Participant, bank opened 47582 Demat accounts in FY’19.

- Merchant Banking: During FY’19, Bank handled more than 1,76,974 ASBA applications against 139 issues.

- Credit Card: Bank is holding a leading position in the banking Industry with a customer base of 3.34 lakh in credit cards as on 31.03.2019. To enhance the security level of the credit cards, the Bank is issuing only EMV Chip cards with PIN. Issuance activity became an independent profit centre. Profit from credit card issuance business increased from Rs.25 crore as at 31.03.2018 to Rs. 47 crore as on 31.03.2019.

During FY’19, the Bank implemented Long Code Pull SMS facility for customer convenience. The Bank also introduced Instant Issuance Credit Card & Debit Card kiosks at Digi-hut branches for instant issuance of cards to walk-in customers.

- Merchant Acquiring Business: The Bank is undertaking merchant acquiring business through various platforms including Point of Sale (POS), Quick Response Code (BHIM/Bharat QR Code), BHIM Aadhar Pay and Internet Payment Gateway. Punjab Govt. Food Procurement business through PUNGRAIN was also undertaken successfully.

A total of 47,463 merchants on various platforms were on-boarded through POS, QR & BHIM Aadhaar.

New Initiatives during FY’19

- Lead Tracking System (LTS) was implemented for generation of merchant leads from fields on various platforms and facilitating centralized reporting reducing turn around time TAT.

- De-installation and re-mapping of accounts for merchants were facilitated through LTS.

- Personal Executive (PE) Model was introduced to maintain long term relationship with High Networth Individuals (HNIs),

- A new version of “Performance Mirror''¹ portal for tracking progress of PEs mapped was brought into effect.

- IT integration with PNB Metlife India Ltd. for online payment through “PAYPREM” was made live.

I. GOVERNMENT BUSINESS

In order to focus on Govt, business, various new initiatives were implemented in the Bank. The Bank has been increasing tie-ups with various State Governments for capturing their transactions through e-GRAS (Government Receipts Accounting System) which facilitates the Taxpayers to make payments due to the Government such as Sales tax, Road tax, Taxes and Duties including penalties. This was enabled in the States/UT of Chandigarh, Rajasthan, and Jharkhand etc. Bank has also successfully integrated with National Health Authority for PMJAY (Prime Minister Jan Aroyogya Yojna) Scheme. The Bank was one of the two public sector banks integrating with them.

Bank launched a tax collection campaign and tied up with GeM(Govemment Market Place) for integration with the Bank’s systems for seamless e-procurement by Government departments. During FY’19, the Bank launched PPF campaign during the months of Dec 2018 to March 2019 and more than 1.20 lakh new PPF accounts were opened during the campaign.

Apart from the above, the Bank signed MoU with India Post Payments Bank(IPPB) for technical support and offering retail loan products at very attractive rates to Dak Sewaks. The Bank digitized the Prayagraj Kumbh Mela 2019 through PNB e-Rupaya card for which PNB was accorded the status of Digital Partner for the entire event lasting for two months where approximately 2.5 crore pilgrims visited.

Some of the initiatives taken up by the Bank under Govt. Business during the year are given as under:

1. Defence Bank Cell (DBC) at HO and Veteran Facilitation Centres created at various places Pan India as part of the strategy to garner defence accounts (salary and pension) and to facilitate Veterans by attending to their queries for on the spot resolution.

2. A CPPC (Central Pension Processing Centre) set up within PCDA (P) Allahabad for handling all new defence pension accounts. This is an effective marketing tool without incurring additional cost and will boost Defence business.

3. Systems have been customized for sending SMS alert for submission of Life Certificate, credit of pension with details, automatic release of additional old age pension and restoration of commutation.

4. Customized pension processing through CBS has been enabled for smooth, accurate and timely processing.

5. The Rakshak Scheme has been revamped as the Rakshak Plus Scheme with several enhanced facilities for Defence and Para Military Forces including increased Personal Accident Insurance and Air Accident Insurance. Presentations are being given at various Military Establishments to disseminate the information regarding this scheme so that maximum defence personnel can avail of it.

6. A MoU was signed with Everest Bank Limited (EBL) Nepal, to extend special banking facilities to Nepal Domiciled Gorkha soldiers of Indian Army (serving and pensioners) having Rakshak Plus accounts.

7. Presentations are being given at Army and Air Force establishments to prospective defence veterans with regard to the avenues/ financial products available to them for investing their funds.

8. Payments to the beneficiaries have been facilitated under Pradhan Mantri Kisan Nidhi Yojna through system integration.

9. System integrated for online process for Sukanya Samridhi Accounts, PPF accounts.

10. Bank has also become POP (Point of Presence) for online opening of accounts under NPS (National Pension Scheme).

J. TREASURY OPERATIONS

Gross Investment of the Bank as on 31 st March 2019 stood at Rs 2.01 lakh crore increasing from Rs 2.00 lakh crore as on 31st March 2018. The Interest income from investment portfolio increased to Rs.13,941 crore as in FY’19 from Rs 13,806 crore in FY’18.

The Bank actively traded in sovereign bonds, Non-SLR bonds and equity throughout the financial year. The liquidity position of the Bank was comfortable during first H1 FY’19. However, during second half of FY’19, system liquidity remained neutral to negative. The Bank managed the funds through CBLO, Repo, CD etc. and complied with all the requirements of CRR/SLR stipulated by the Regulator. Total Trading profit (including derivative) stood at Rs1093 crore in FY’19.

Fixed Income (SLR/NSLR)

During FY’19, the Bank booked trading profit of Rs.747 crore from sale of investments in fixed income against Rs.1455 crore during FY’18.

FY’19 started on a positive note witnessed by softening of yields which touched the year’s low. However, risks arising due to the impact of Minimum Support Price (MSP) and other factors on inflation along with higher crude oil prices weighed on the bond market. Continuous rise in crude oil prices and rupee touching an all time high dampened the market sentiments in the first half of the financial year. Additionally, US yields surged to a level unseen in the past several years, which weighed on the bond market and caused yields on the domestic bonds to harden further.

Equity

The Bank booked Gross Profit of Rs193 crore in FY’19. The profit included profit of Rs107 crore arising from stake sale in ICRA. The dividend income for FY19 stood at Rs 149 crore.

Forex

Rupee had started its journey from Rs.65 per Dollar on April 2018 and touched an all time high of Rs.74.48 during the month of October 2018 due to high international Oil prices. There was wide fluctuations due to global factors requiring RBI intervention. Net Forex income has increased from Rs.1790 crore in FY’18 to Rs.1881 crore in FY’19 on account of better utilization of foreign currency resources in hand.

K. CUSTOMER CARE

The Bank fully realizes the importance of customer service and continues to lay utmost priority to rendering prompt and efficient service to customers. In order to achieve the desired objective, the Bank has formulated a robust Grievance Redressal Policy.

Initiatives undertaken during the year for improvement in customer service:

- The Bank has an On-line Grievance Redressal Management Portal called Centralized Grievance Redressal Management System (CGRMS). Customers can lodge their requests/complaints in the CGRMS through Bank''s website, Internet Banking Service, Mobile Banking Service and Mobile App. Complaints are also received at Head Office, all the Circle Offices and over 1,856 SAP-CRM enabled branches. These are entered in CGRMS. Through this system, the customer gets an immediate automatic acknowledgement and can keep a track of the complaint also.

- The Bank has state-of-the-art Contact Centers at Gurgaon and NOIDAto provide tele-banking services to its customers on 24 x 7 x 365 basis through two leading Service Providers. In addition to these two Primary Sites, the Bank has also established two Secondary Contact Centers at Hyderabad and Bhopal to provide tele-banking services to its customers in 11 languages. The number of services extended by Contact Centre through Tele Banking increased from 6 to 25 during FY’19 thereby making them more customers friendly.

- The Bank has constituted teams of officials at Customer Care Centre at Head Office, Circle Offices and Zonal Offices to pay incognito visit to branches to assess standard of service. During FY''19, officials of the Bank made 7575 incognito visits to branches pan India and deficiencies pointed out were taken up for taking corrective steps to improve customer service.

- The status of complaints received by the Bank is reviewed by “Customer Service Committee of the Board” a Sub-Committee of the Board, on quarterly basis. The meetings of the Sub-Committee are presided over by the Managing Director and CEO.

- The Bank has a “Standing Committee on Customer Service”, which also reviews customer service of the bank as well as implementation of the Code of Bank’s Commitments to Customers of Banking Codes and Standards Board of India (BCSBI).

- The Bank has in place an Internal Ombudsman as per the recommendations of the Damodaran Committee. The system ensures greater transparency in the redressal of grievances by the Bank.

- Customer Service Committees in all the branches and Circle Offices look into the quality of customer service rendered and critically examine the feedback/ suggestions for improvement in customer service. These committees meet once in a month where staff and the invited customers interact freely on service related issues.

- Theme Based Meetings are conducted at monthly intervals in all branches on a pre-decided date and theme to improve awareness among field staff about bank’s products and services and to sensitize them about the issues of maximum importance.

Out of a total number of 64,401 complaints (i.e.1862 complaints outstanding as on 01.04.2018 and 62,539 complaints received during FY’19), 63,435 complaints were resolved up to the satisfaction of the complainant, till 31st March, 2019.

L. IMPLEMENTATION OF OFFICIAL LANGUAGE

Your Bank accomplished various parameters fixed by the Govt, of India, Ministry of Home Affairs, Deptt. of Official Language for FY’19. The Bank is using ‘Unicode’ fonts for Hindi correspondence etc. at all levels.

During FY’19, the Bank was awarded several prizes for its excellent performance in the use of Hindi which included the prestigious First prize namely ‘Rajbhasha Kirti Shield’ the top most prize scheme of Government of India. The Bank was awarded 12 prizes in the field of Rajbhasha during FY’19 from Government of India, Ministry of Home Affairs and Rajbhasha Vibhag, which is a record of sorts.

In addition to this, Town Official Language Implementation Committees situated in different locations of the country and other Non-Government Organizations also awarded 106 prizes in region ‘A’, 24 prizes in region ‘B’ and total 13 prizes in region ‘C’ to our bank. Our staff members have also received 120 prizes on Individual basis. During the FY’19, the third sub-committee of Parliament on Official Language visited our Branch Office- Srinagar (Garhwal), Circle Office-Surat, and Circle Office-lndore. Drafting and Evidence Sub-Committee of the Committee of Parliament on Official Language inspected the Zonal Office-Delhi, Circle office-Mumbai and Branch Office-Palwal.

During the FY’19 also, the Bank celebrated ‘Hindi Month’ during Sept. 2018 and also organized ‘Hindi Diwas’ on 14th Sept. 2018. Several programmes/competitions were organized and awards & prizes were given during the month.

M. PNB SUBSIDIARIES AND REGIONAL RURAL BANKS

DOMESTIC

i) PNB Gilts Limited: Debt market started the year on a bearish note on the back of inflation concerns, elevated crude prices and absence of demand for government securities by investors. This was further accentuated by repo rate changes by RBI.

Despite the heightened volatility, Company managed to post a Profit before Tax of Rs. 83 crore in FY’19. Additionally, Company fulfilled all its obligations as a Primary Dealer in both primary and secondary market. With regard to Treasury Bills commitment, the Company exceeded the stipulated success ratio of 40%, achieving 41.16% and 40.40% in H1 and H2 respectively. In G-sec category, Company fulfilled the underwriting commitments, thereby supporting the government borrowing program. The Company’s total turnover ratio (secondary market) stands at 179 times for treasury bills and 303 times for government-dated securities as on March 31, 2019 against the minimum RBI stipulation of 10 times and 5 times respectively.

ii) PNB Investment Services Limited: The Company is a profit making company from the first year of its operations. During the year ended March 2019, the Company earned fee based income of Rs. 5.80 crore with a total income of Rs.8.70 crore as against a fee of Rs. 6.00 crore and total income of Rs. 9.20 crore respectively for the year ending March 2018. Profit before Tax, during the period ending March 2019 was Rs. 2.41 crore as against Rs. 3.90 crore for the period ending March 2018.

Post withdrawal of RBI Guidelines on Stressed Assets w.e.f., 12th February 2018, there was a significant decline in debt restructuring assignments for the entire FY’19 thereby impacting the overall revenue. The Company took initiative to develop and strengthen the debt syndication business in the period under consideration. During FY’19, PNBISL was involved in successfully executing four non core asset disinvestment mandates on behalf of PNB. The trusteeship business of the company recorded steady growth in number of clients in FY’19.

INTERNATIONAL

iii) PNB International Limited (PNBIL): PNBIL is focusing on diversifying the loan book through syndicated loan and financial institution business apart from providing new products and services to the community with emphasis on non-lending revenue from remittance business. It is also strengthening its technology platform to offer Mobile Banking and online remittance facilities to the customers in UK. Having reduced the legacy portfolio and having prudent risk management in place, PNBIL has also strengthened the governance practices in the Bank.

PNBIL is having customer deposit of $723mn and advances of $917mn. The Operating Profit before provision, tax and dividends for FY’19 stood at $16.43 mn, which is higher from $11.93 mn in FY’18. Total income for FY’19 stood at $47.02 mn and Net interest Income was at $33.53 mn.Net trading income stood at $1.3 mn for FY’19. Net profit (before tax) for FY’19 was $7.37mn against $5.89 mn of FY’18.

With Brexit impacting the UK economy, businesses and investors are adopting a cautious approach resulting in subdued demand in general, thereby impacting overall credit demand.

iv) Druk PNB Bank Limited: Total business of the Bank as on 31.3.2019 increased to Rs. 2141 crore from Rs.1726 crore as on 31.3.2018, showing a YOY growth of 24.04%. The network of the subsidiary comprises of 7 branches and 22 ATMs. On the profitability front, the subsidiary showed good earnings, and the profit of the Bank has increased from Rs.19 crore during FY’18 to Rs. 28 crore during FY’19, registering a growth of 45% on YoY basis. During FY’19, the Bank successfully increased its paid up capital from Rs.45 crore to Rs.70 crore through rights issue. The Bank also migrated to FinaclelOx and integrated its Swift operations with Core Banking Solution (CBS).

v) REGIONAL RURAL BANKS (RRBs)

At present, five RRBs are sponsored by the Bank which are operating in five States, namely, Bihar, Haryana, Himachal Pradesh, Punjab and Uttar Pradesh covering 93 districts with a network of 2937 branches.

Total Business of PNB sponsored RRBs as on 31.03.2019 stood at Rs.91293 crore. Total Deposits of RRBs were Rs.56546 crore and advances were Rs. 34747 crore as on 31.03.2019. All PNB Sponsored RRBs remained in Profit and combined Net Profit of RRBs during the period ended Mar''19 stood at Rs. 185.96 crore. RRBs have cumulatively opened 58,81,415 accounts under Pradhan Mantri Jan Dhan Yojana (PMJDY) as on 31.03.19. RuPay ATM cards were issued to 37,18,902 account holders.

Financial Performance of RRBs as on 31.03.2019 (Un-audited)

(Amt. in Rs. Crore)

SI.	Performance of RRBs	31st Mar’18 (Audited)	31st Mar119 (Un-Audited)	YoY Growth %
1	Aggregate Deposits	51843	56546	9.07
2	Aggregate Advances	31250	34746	11.19
3	Aggregate Net Profit	246	186	-24.32
4	Branches under CBS	100%	100%
5	Profit Per Employee (Rs lakh)	2.08	1.52	-26.90
6	No. of Loss Making Branches (being 12 month old or more)	160	72

N. AWARDS AND ACCOLADES

Despite being a challenging year, your Bank has been able to perform well and engineer turnaround in the shortest possible time. The Bank also continued to restructure its business model to remain competitive and profitable in the times to come. All these efforts of the Bank were recognized at various platforms and also brought the Bank many laurels.

PNB was adjudged overall “Best Performing Bank” among all Public Sector Banks under EASE (Enhanced Access & Service Excellence), an agenda of reforms launched by DFS, Govt, of India. In addition, the Bank received recognition in four out of the six key themes envisioned under EASE i.e., Customer Responsiveness (Winner), Responsible Banking (Winner), Credit Off-take (Winner) and Deepening Financial Inclusion & Digitalization (Runner Up) based on an independent assessment by Boston Consultancy Group.

In addition to the above, the Bank has been recognized as “Best in Financial Inclusion” by Business Today and KPMG. Further, the UIDAI, Govt, of India has also acknowledged our efforts by awarding “Aadhar Excellence Award” as the 2nd Best Performing Public Sector Bank in terms of Aadhar Generation and Update. The Bank has also been bestowed with the “IBA Banking Technology Award 2019” for “Most Customer Centric Initiatives Using Technology (Runner Up) among large Banks". In appreciation of efforts, NSDL, Delhi adjudged the Bank as “Best Performer in Account Growth Rate (Top Depository Participant)”and “Top Performer in New Accounts opened (Bank Category)". Top Rankers Management Club conferred “Top Rankers Excellence Award for Entrepreneurial Path Breaker” to the Bank.

Recently, Bank was also recognized as “Best Bank For Corporate Social Responsibility” and bestowed with Asiamoney Banking Awards 2019.

In the Forbes survey for assessing “The World''s Best Banks 2019” in terms of customer satisfaction ratings, PNB was ranked 2nd among all Public Sector Banks & 7th among 30 Banks (including Private and Foreign Banks) in India. The survey was carried in partnership with market research firm Statista by surveying more than 40,000 customers across 23 countries around the globe. Customers were asked to rate banks on overall recommendation and satisfaction, as well as 5 key attributes or ‘sub-dimensions’ of 1) trust, 2) terms and conditions 3) customer service 4) digital service and 5) financial advice.

O. FUTURE BUSINESS PLAN OF THE BANK

Bank’s performance in FY’19 despite the challenges is a testimony to our continued resilience. Going ahead, this gives us the confidence that Bank will carry forward the performance momentum. Bank will continue its focus on best customer service, improvement in quality of assets, building a strong IT platform, rationalizing costs and expanding its dimensions. We will realign our business model to capture opportunities, strengthen balance sheet, increase revenue pool, further our digital agenda by launching new innovative products to press ahead with customer journeys and become more data-driven. These initiatives will enable us to forge ahead in our quest to re-imagine banking, register higher business growth and achieve efficiency and profitability.

The Bank has always perceived employees as its most valuable assets. In order to develop human capital, key focus areas include succession planning, developing a talent pool for critical positions, leadership development besides continuously recruiting and training staff to augment skill set. We value the diversity in our team and strongly believe in reverse mentoring as younger employees come with diverse learnings & skills and their presence adds pace, fresh perspectives and new ideas to address changes and challenges.

We shall continue to make important progress in transforming the bank through the transformation exercise, Mission Parivartan. Bank has a portal, Lead the PARIVARTAN that encourages employees to pitch in ideas for improving performance. Bank ensures that the workable ideas are translated into action and execution. Several new ideas have been implemented and going forward we intend to continue with the drive.

We have the strength of numbers with the largest branch network, a loyal customer base of over 11 lakh, 70000 dedicated employees determined to carry forward the success story of our decades of service to the nation and customers. Our vision in the next phase of growth is to make this strength of numbers count more and more through quick response and innovation to deliver simple, fast and contextual banking in the digital age. As we step into 125th year of service, we remain committed to strengthening the legacy of PNB by staying true to our core values and key tenets upon which our Bank is founded, enhancing our role and commitment towards People and Nation building.

P. BOARD OF DIRECTORS

Board of the Bank compromises of 9 Directors including 3 whole time Directors i.e. One Managing Director & CEO and two Executive Directors as on 31.03.2019. During FY''19, the following changes took place in the composition of Board of Directors:

- Ms. Hiroo Mirchandani, Director under Shareholder category completed her tenure on 01.05.2018.

- Dr. Asha Bhandarker has been elected as Shareholder Director on the Board of the Bank for a period of three years w.e.f., 12.09.2018.

- Shri Sudhir Nayar, Director under Shareholder category completed his tenure on 18.12.2018.

- As per DFS notification F. No. 16/13/2018-B0.l dated 18.01.2019, Shri K. V. Brahmaji Rao cease to be the Executive Director of PNB w.e.f. 18.01.2019.

- As per DFS notification F. No. 16/13/2018-B0.l dated 18.01.2019, Shri Sanjiv Sharan cease to be the Executive Director of PNB w.e.f. 18.01.2019

- Shri Agyey Kumar Azad was appointed as Executive Director on Board of the Bank w.e.f., 22.01.2019.

The Board wishes to place on record its appreciation for the valuable contribution made by Ms. Hiroo Mirchandani and Shri Sudhir Nayar.

Q. DIRECTORS’ RESPONSIBILITY STATEMENT

The Directors confirm that in the preparation of the annual accounts for the year ended 31st March’19:

- The applicable Accounting Standards have been followed along with proper explanation relating to material departures, if any;

- The accounting policies, framed in accordance with the guidelines of the Reserve Bank of India, were consistently applied;

- Reasonable and prudent judgment and estimates were made so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit of the Bank for the year ended 31st March’19;

- Proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of applicable laws governing banks in India, and;

- The accounts have been prepared based on the principle of “going concern”.

R. ACKNOWLEDGEMENT

The Board expresses its thanks to the Government of India, Reserve Bank of India, Securities and Exchange Board of India, Stock Exchanges, Bank’s customers, Public and the Shareholders for valuable support, continued patronage and confidence reposed in the Bank.

The Board wishes to place on record its appreciation for the valuable contribution made by the Bank’s staff at all levels and looks forward to their continued involvement in achieving the future goals.

For and on behalf of Board of Directors

Sunil Mehta

Managing Director & CEO

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Mar 31, 2018

DIRECTORS’ REPORT

The Directors take pleasure in placing the Bank’s Annual Report for FY’18 along with its audited Annual Financial Statements.

A. Financial Performance Assets and Liabilities

Total Assets of the Bank increased by 6.32% from Rs, 7,20,331 crore as at 31st March 2017 to Rs, 7,65,830 crore as at 31st March 2018. During the period, the loan portfolio of the Bank increased by 3.39% from Rs, 4,19,493 crore to Rs, 4,33,735 crore. Net Investment increased by 7.27% from Rs, 1,86,725 crore to Rs, 2,00,306 crore as at 31st March 2018. A major portion of the investment was in the Domestic Market in Government Securities.

Your Bank’s Aggregate Liabilities (excluding Capital and Reserves) rose by 6.86% to Rs, 7,24,755 crore as at 31st March 2018. The Deposits rose by 3.3% from Rs, 6,21,704 crore to Rs, 6,42,226 crore during this period.

Net Interest Income

Net Interest Income of your Bank stood at Rs,14,922 crore during FY’18. Interest Income during the year was Rs, 47,996 crore. Interest Expenses was Rs, 33,073 crore out of which Interest expenses on Deposits was Rs, 30,456 crore.

Interest Earned on Investments showed a growth of 10.9% during FY’18. Fee Based Income of the Bank also registered a growth of 10% while Income from Trading Profit recorded a growth of 22.7%.

Operating Profit

Total Income of your Bank increased from Rs, 56,227 crore in FY’17 to Rs, 56,877 crore during FY’18 while Total Expenses increased from Rs, 41,662 crore in FY’17 to Rs, 46,582 crore in FY’18 resulting in an overall Operating Profit of Rs, 10,294 crore during FY’18. However, Bank has posted a Net Loss of Rs, 12,283 crore during FY’18 due to the higher provisioning for Non Performing Assets, MTM losses in treasury portfolio and provisioning on fraud.

Provisions and Contingencies

During FY’18, your Bank has created a higher amount of provisions (other than tax) of Rs, 29,869 crore compared to Rs, 12,554 crore last year. The increase was primarily due to increase in provisions on Non Performing Assets of Rs, 24,453 crore against Rs, 12,704 crore in FY’17 and depreciation on investment of Rs, 2027 crore against Rs, 487 crore last year. Provision Coverage Ratio of the Bank was 58.42% as at 31st March 2018.

Progress on Implementation of IND AS (Indian Accounting Standards)

RBI has deferred implementation of IND AS to FY 2019-20 vide Press Release (2017-18/2642) dated 5^th April 2018. The Bank has already commenced the process of IND

AS (Indian Accounting Standards) implementation from financial year 2016-17.

A Steering Committee headed by the Executive Director and comprising of General Managers from various cross functional areas of the Bank has been formed to monitor the progress of the implementation of IND AS and substantial progress has been made in its implementation. Your Bank is now assessing the changes, wherever required in the core banking system and has already initiated formulation of Expected Credit Loss Models.

B. Operational Highlights

During the last quarter of FY’ 18, the Bank faced a serious setback due to a fraud of Rs,14,357 crore at Brady House branch in Mumbai. Despite trying circumstances, the Bank performed creditably and reached several new milestones. Some of the operational highlights of FY ‘18 are listed below:

Financial

- Bank achieved a new landmark with Domestic Business crossing ''10 lakh crore.

- CASA Deposits remained highest amongst PSBs with 43.85% share in Domestic Deposits.

- Cost of Deposits declined from 5.33% to 4.96%.

- Retail Advances grew by 15.5% during FY’18 with 16.6% growth in Housing Loan Segment.

- All major goals under Priority Sector achieved during FY’18.

Capital

- During the year, Bank raised Rs, 5000 crore through Qualified Institutional Placement (QIP) to boost capital. Further, the Govt. infused Rs, 5473 crore in March 2018.

Wealth Management Services

- To serve growing financial needs of its customeers,, the Bank entered into new distribution arrangements with 3 Insurance Companies and 4 Mutual Funds AMCs (Asset Management Companies). The Bank is well positioned to cross-sell and up-sell a full suite of financial products to its customers.

- Income from Insurance and Mutual Funds (MFs) increased by 31.1% during FY’18.

IT and Digital Initiatives

- Successfully upgraded the CBS platform to Finacle 10.x version for better customer experience.

- The Bank increased its Digital Base with more than 35% rise in Internet Banking Users and more than 45% in Mobile Banking Users. In this direction, the Bank also opened first fully digitalized branch ‘PNBDIGIHUT’.

- Bank launched number of innovative mobile apps in order to facilitate digital transactions such as PNB MobiEase, PNB Rewards, PNB Fin Literacy, PNB Yuva, PNB ATM Assist, PNB m-Banking, PNB Kitty, etc. Further, PNB M-Passbook was launched in FY’18 for customers to access their account statement on mobile phones.

- SWIFT was integrated with Core Banking Solution (CBS), wherein all outward payment SWIFT messages are automatically generated through CBS without any manual intervention.

Transformational Exercise

- Mission PARIVARTAN, a transformational exercise for Business Excellence launched to align Bank’s activities relating to people, process & products more aligned to the Board approved business strategy & vision.

- To ensure a structured approach for implementation of the Mission PARIVARTAN, an independent Division named ‘Mission Parivartan’ has been started. This Division acts as Think Tank of the Bank providing both directional / policy inputs. It acts as a platform to enhance ownership, commitment and involvement of HO Divisions & all internal stakeholders in the policy-development process using a bottom-up approach.

C. Recent developments and steps taken

The fraud at Brady House, Mumbai Branch of the Bank involved certain accounts in the Gems & Jewellery sector where Letters of Undertaking (LOUs)/Foreign Letter of Credit (FLCs) were issued fraudulently and in an unauthorized manner to certain overseas branches of Indian Banks through the misuse of SWIFT system of the Bank.

The fraud is under investigation by various central investigating agencies. The liabilities amounting to Rs, 6586.11 crore on account of LOUs/ FLCs which became due on 31.03.2018 have been fully honoured and paid by the Bank. Further, as a prudent measure Bank has created liability amounting to Rs, 6959.79 crore in the books in respect of balance LOUs/FLCs relating to this fraud which are becoming due after 31.03.2018. After including outstanding amounts under other credit facilities to the above entities, the amount involved works out to Rs, 14356.84 crore. The slippages due to fraud in March''18 were Rs, 7579 crore.

RBI permitted the Bank to make provisions against this fraud @ 25% without debiting "Other Reserves" and provide remaining amount during the first three quarters of the ensuing financial year. However, Bank has made higher than required provisions @ 50% of Rs, 14356.84 crore amounting to Rs, 7178.42 crore.

As soon as the fraud was detected, the Bank took immediate corrective action as required. Further, the Bank is taking appropriate steps against erring employees, legal action against the fraud perpetrators and closely cooperating with the regulators and law enforcement agencies.

The systems and controls have been further strengthened. SWIFT was integrated with Core Banking Solution (CBS), whereby all outward payment SWIFT messages are now automatically generated through CBS without any manual intervention. Besides, additional measures of placing an additional tier of 3rd level authentication, at SWIFT Centre, Mumbai for re-authentication of all outward financial messages only after cross checking details of transactions in CBS and thereafter, allowed to pass through SWIFT Gateway server have been put in place. The concept of Maker-Checker in CBS, Verifier/Authorizer and Re-authorizer in SWIFT application has led to implementation of 8 eyes principle. Auditors were instructed to ensure that 100% messages are cross-checked with CBS.

Technology based offsite audit system for monitoring alerts in CBS is in operation now. Loan appraisal and monitoring system have been segregated. Different verticals have been created for sourcing, initial due diligence, processing, monitoring and recovery of loans for reducing people risk, operational risk and credit risk.

A comprehensive review of the Bank’s Audit system is being undertaken through a reputed institution, National Institute of Banking and Management (NIBM), Pune. Suggested improvements will be incorporated in the Audit System of the Bank to make it more robust and reliable.

D. Asset Quality

The Bank’s Gross NPA stood at Rs, 86,620 crore as at 31st Mar''18 (Rs, 55,370 crore as at 31st Mar’17) and the Net NPA stood at Rs, 48,684 crore as at 31st Mar’18 (Rs, 32,702 crore as at 31st Mar’17). In terms of ratios, Gross NPA ratio stood at 18.38% in Mar’18 (Mar’17:12.53%) and Net NPA ratio stood at 11.24% in Mar’18 (Mar’17: 7.81%).

Initiatives taken during FY’18

- During the year, the Bank formulated two special OTS schemes resulting in the recovery of Rs, 1544 crore in 2,70,633 OTS approved cases with balance outstanding of Rs, 2299 crore.

- The Bank organized Mega Rin Mukti Shivirs to give impetus to recovery especially in small advances.

- Mission Gandhigiri was launched for recovery from borrowers wherein silent protests/demonstrations were made in front of premises of recalcitrant borrowers.

- Key Responsibility Areas (KRAs) have been identified for staff working in Asset Recovery Management Branches (ARMBs), Recovery Teams at CO/ZO level and in the 50 identified branches having large concentration of NPAs.

- As per Reserve Bank of India guidelines, notices were issued to various borrowers identified as willful defaulters. This exercise resulted in declaration of 1089 Wilful Defaulters as on

31.03.2018. Special Desks set up for account specific monitoring which are headed by 3 AGMs who are monitoring all NPAs of Rs, 1 crore & above and ensuring compliance of recovery actions in individual accounts.

E. Industrial Restructuring

The extant instructions on Resolution of Stressed Assets such as Framework for Revitalizing Distressed Assets, Corporate Debt Restructuring Scheme, Flexible Structuring of Existing Long Term Project Loans, Strategic Debt Restructuring Scheme (SDR), Change in Ownership outside SDR and Scheme for Sustainable Structuring of Stressed Assets (S4A) stand withdrawn w.e.f.12.02.2018.

All accounts, including those where any of the schemes have been invoked but not yet implemented, will be governed by the revised framework. Following accounts will continue to be governed under the old framework as the existing resolution schemes have already been implemented.

Sr. No	Name of the scheme	No. of accounts as on 31.03.2018	Amount outstanding as on 31.03.2018 (in '' Crore)
1	Corporate Debt restructuring	43	4484
2	Scheme for Sustainable Structuring of Stressed Asset	09	1248
3	Change of Ownership outside SDR	02	118
4	Flexi Structuring of Long Term Projects	30	120181

*Amount of loan refinanced

(i) Framework for Revival and Rehabilitation of Micro, Small and Medium Enterprises (FRR for MSMEs)

In order to provide a simpler and faster mechanism to address the stress in MSME accounts and their revival, Bank has adopted the policy under New Framework for Revival and Rehabilitation (FRR) of MSMEs w.e.f. 14.07.2016 in place of Debt Restructuring Mechanism (DRM) for Small and Medium Enterprises.

During FY’18, 12 accounts, with outstanding of Rs, 55 crore, were restructured under FRR for MSME.

(ii) Restructuring-Others

The Bank has also in place, a transparent mechanism for restructuring of debts of potentially viable units, which are facing temporary problems due to factors beyond their control. This covers the cases which cannot be governed in the schemes under the old framework.

During FY’18, 846 such accounts with outstanding of Rs, 1099 crore have been restructured.

As on 31.03.2018, outstanding in 892 implemented restructured accounts stood at Rs, 7584 crore.

F. IT and Digitalization

The Bank’s journey towards digitalization continues through constant innovations and up gradations of its existing products and services. The Bank has been providing hassle free and convenient banking services to all its customers. Total Number of digital transactions in FY’18 registered growth of more than 25% on YoY basis and the share of digital transactions in total transactions stood at 69%.

Alternative Delivery Channels

a) Internet Banking: As at 31st March 2018, under its retail and corporate segments, the Bank has shown growth of 37% in respect of IBS users. In order to further upgrade the existing models, the Bank has introduced Aadhar seeding, PAN seeding and updating E-mail id into accounts through Internet Banking.

b) Mobile Banking: There was a growth of 46% in Mobile banking users during FY’18. Mobile Banking for the customers of DrukPNB, Bhutan was also introduced.

c) ATMs: The Bank has a vast Network of 9668 ATMs with a strong card base of more than 6 crore. The Bank has introduced Dynamic Currency Conversion, Aadhar seeding through pop-up in ATMs and JCB/ UPI card transaction on PNB ATMs. The Bank is offering a host of other services apart from providing basic ATM transaction services.

d) Bank has introduced different digital applications in order to facilitate digital transactions such as PNB

MobiEase, PNB Rewards, PNB Fin Literacy, PNB Yuva, PNB ATM Assist, PNB m-Banking, PNB Kitty, etc. Further, PNB M-Passbook was launched in FY’18 for customers to access their account statement on mobile phone itself.

Important Developments

- The Bank has started initiative of paperless Green PIN instead of printed ATM PIN, Instant Hot-listing of Debit Cards through SMS, Internet Banking and through Interactive Voice Response System (IVRS) at call centers.

- The Bank launched Integrated Fee Portal (IFP) in which the customers are on-boarded for fee payments through Internet Banking Gateway. Customers can make these payments through Internet Banking, Debit card and Credit card anytime.

- The Bank has integrated with NPCI to work as an operating unit under Bharat Bill Payment Operating Unit and it was made live in September 2017.

- The Bank has provided Micro ATM facilities at BC locations for both i.e., On-US and Off-US transactions.

- Information Security: The Bank has Information Security Policy and a well delineated Cyber Security Policy. The Bank has a Cyber Crisis Management Plan to handle any kind of cyber incident.

- Data Centre of the Bank, Network Operating Centres (NOC) and Disaster Recovery (DR) site are ISO 27001:2013 certified for the period 2016-19.

- The Bank organized various Digital Campaigns and Digital Days for increasing the usage of digital products.

- The Bank also launched a first Proof of Concept Model of Digital Branch PNB DIGIHUT at Head Office, Dwarka.

G. Management Information System

During FY’18, 17,40,263 Credit Information Reports (CIRs) of prospective borrowers under Consumer category and around 35,000 CIRs under Commercial category were drawn from CIBIL, Experian, High Mark & Equifax databases.

Around 5.29 lakh Immovable Properties (IP) & Movable properties were registered with Central Registry of Securitization Asset Reconstruction and Security Interest of India (CERSAI) by Bank till March’18.

In PNB Anti Money Laundering (AML), a total of 79 scenarios implemented in production server while in PNB Sponsored Regional Rural Banks (RRBs), a total of 55 scenarios were implemented.

H. Branch and Office Network Domestic Presence

The Bank has the second largest branch network amongst PSBs with 6983 domestic branches as on 31.03.2018 comprising of 1283 Metropolitan, 1392 Urban, 1731 Semi-Urban and 2577 Rural branches. Rural and Semi Urban Branches (RUSU) comprise 62% of the Total Branch Network.

International Presence

At present, Bank has its overseas presence in 8 countries by way of 4 branches (2 in Hong Kong, 1 in Dubai and 1 Offshore Banking Unit (OBU) in Mumbai), 2 Subsidiaries (London & Bhutan), 1 Associate (at Kazakhstan), 1 Joint Venture (at Nepal) and 3 Representative Offices (Shanghai-China, Dhaka-Bangladesh and Dubai-UAE).

I. International Banking

The foreign exchange turnover for FY’18 was Rs,1,46,683 crore registering a growth of 4.17% on YoY basis. As at 31st March 2018, the Bank had 204 branches authorized to handle foreign exchange business and a specialized Centralized Back Office for Trade Finance at New Delhi for handling of trade transactions. The Bank has specialized International Banking Branches at major export centres for extending services to the importer/exporter. Besides, the Bank has 22 Exchange Bureaus at important tourist centres to facilitate encashment of foreign exchange currency notes/traveller cheques by foreign tourists/NRIs.

The Bank is also having an International Service Branch at New Delhi for handling inward remittances for the Bank as a whole. During FY ’18, the Bank handled remittance business of more than Rs, 54,000 crore.

J. Business Diversification

- Mutual Fund: Besides the existing tie-ups, the Bank during FY’18 tied-up with four new Mutual fund Asset Management Companies namely LIC Mutual Fund Asset Management Limited, Reliance Nippon Life Asset Management Limited, Tata Asset Management Limited and Birla Sun Life Mutual Fund.

During FY’18, the Bank mobilized Total Business of Rs,8242 crore and as at 31st March 2018, Assets under Management (AUM) stood at Rs,812 crore. The Bank earned brokerage of Rs,6 crore via. Mutual funds selling.

- Insurance Business

1. Life Insurance Business: The Bank’s earnings from Life-Insurance business during FY’18 amounted to Rs, 144 crore as against Rs,110 crore during FY’17, showing growth of 31%. Total Business mobilized since inception was Rs, 5880 crore from 709714 policies and total earnings amounted to Rs,502 crore.

2. Non-Life Insurance Business: During FY’18, the Bank entered into tie-ups with three Companies for Non Life Insurance i.e., New India Assurance Co. Ltd, Bajaj Allianz General Insurance Co. Ltd & Religare Health Insurance Co. Ltd. The revenue earned increased 29% from Rs, 28 crore in FY’17 to Rs, 36 crore during FY’18.

- Depository Services: The Bank earned an income of Rs,74 lakh during FY ’18 for providing Depository Services.

- Online Trading Services: An income of Rs, 33.17 lakh was received from the Associates such as M/s. SMC Global Securities Ltd., M/s. IDBI Capital Services Ltd. and M/s. Net worth Stock Broking Ltd. on account of Online Trading Activities during FY’18.

- Merchant Banking: During FY ’18, the Bank handled more than 9,98,000 ASBA applications against 187 issues, thereby blocking an amount of Rs, 2952 crore and earning notional income of more than Rs, 5 crore with commission income of Rs, 1.05 crore.

- Credit Card: There was 25% growth in Credit Card issuance. The Bank’s credit card base of 3,19,641 as at 31.3.2018,is the 2nd largest amongst PSBs.

During FY ’18, the Bank launched its new credit card variant i.e., PNB RuPay Platinum Credit Card with significant customer benefits including accidental death/total disability insurance cover. The Bank also launched PNB INSTA PAY EMI at POS and E-commerce scheme i.e. PRE-PURCHASE EMI towards facilitating cardholders to convert purchases into EMI at the time of purchase of products itself.

The Bank earned a Net Profit of Rs, 25 crore from the credit card issuance business.

- Merchant Acquiring Business: As at 31st March

2018, the Bank has installed 56,746 PoS terminals and integrated 493 Internet Payment Gateways.

- Multi level EMI facility in PoS terminals: PoS

terminals are customized with Multi Level EMI facility which is activated by the service provider of the Bank on the specific request of the merchant.

who are non-account holders are provided Internet Payment Gateway Services under this tie-up.

- BHARAT QR CODE & BHIM AADHAAR PAY: The

Bank launched Bharat QR Code and BHIM Aadhaar Pay platforms, a new Government driven project towards creation of a less cash economy. Under the platform, 47,535 merchants were on-boarded.

K. Government Business

National Highways Authority of India (NHAI) launched E-Toll collection programme for hassle free transit at toll plazas by issuing FAStags to vehicle owners. Accordingly, the Bank successfully implemented the National Electronic Toll Collection (NETC) programme of NHAI. The Bank is participating in NETC as issuer for issuing FAStags to vehicle owner and has already acquired one Toll Plaza (Mada-Nasri, Jammu) on pilot basis with plans to acquire more in the near future.

Further developments under Government Business are as under:

1. Tie-up with Government e-Market for integration of systems for seamless e-procurement by Government Departments.

2. Talks are at an advanced stage for the partnership with Indian Postal Payments Bank (IPPB) for distributing of credit products.

3. Centralised on-line Collection & Disbursement (COCD) Portal extended to Department of Handicrafts for disbursing Interest subsidy, Margin Money, CGTMSE Fee, etc.

L. Treasury Operations

Gross Investment as at 31st March 2018 stood at Rs, 1,97,328 crore up from Rs, 1,83,297 crore as at 31st March 2017 registering a YoY growth of 7.65%. The average investments in FY’18 were Rs, 2,03,844 crore as against Rs, 1,75,774 crore in corresponding period last year. The Interest income from investment portfolio increased to Rs,13,806 crore in FY’18 from Rs, 12,439 crore in FY’17. The Bank actively traded in sovereign bonds, Non-SLR bonds and Equity throughout the financial year. Total Trading profit (including derivatives) increased from Rs,2654 crore in FY’17 to Rs, 3254 crore in FY’18.

Fixed Income (SLR/NSLR): During FY’18, the Bank booked trading profit of Rs, 1455 crore from sale of investments in fixed income against Rs, 2214 crore during corresponding period previous year as yields started moving northwards during later half of FY’18.

Equity: The Bank booked Rs, 340 crore trading profit registering a growth of 102.9% over previous year. Apart from that the Bank also booked one time profit of Rs, 1232 crore from sale of stake in PNB-Housing Finance Limited (PNBHFL). Total Profit in the equity segment amounted to Rs, 1573 crore while the dividend income for FY’18 stood at Rs, 139 crore.

Forex: Exchange Profit increased from Rs, 547 crore in FY’17 to Rs, 724 crore in FY ’18 due to thrust on increasing merchant turnover and volume, and also due to various customer-centric initiatives.

M. Customer Care

During FY’18, the Bank introduced an On-line Grievance Redressal Management Program called Centralized Grievance Redressal Management System (CGRMS). Customers can lodge their requests/complaints in the CGRMS through Bank’s website, Internet Banking Service, Mobile Banking Service and Mobile App.

All Circle Offices and over 1862 SAP enabled branches are entered in CGRMS wherein the customer gets an immediate automatic acknowledgement and can keep a track of his complaint also.

- Customer Service Committees have been set up in all the branches and Circle Offices to look into the quality of services rendered and to critically examine the feedback/suggestions for improvement.

- The Bank has constituted teams of officials at Customer Care Centre at various administrative levels to pay incognito visit to branches to assess their standard of service. During FY’18, 6695 such visits were made across India and observations of the visiting officials shared with the concerned branch and the Circle Office for taking corrective steps.

All 53,331 complaints (i.e. 315 complaints outstanding as on 1.4.2017 and 53,016 complaints received during FY ’18), were redressed to the satisfaction of the complainants. 1862 complaints pending as on 31.03.2018 have since been resolved.

N. Implementation of Official Language Policy

The Bank achieved most of the parameters fixed by the Government of India, Ministry of Home Affairs, Department of Official Language for FY’18.

During FY’18, the Bank was awarded several prizes for its excellent performance in the use of Hindi which includes ‘Rajbhasha Kirti shield’- the top most prize scheme of Govt. of India. In addition, Town Official Language Implementation Committees situated in different locations of the country and other Non-Government Organizations also awarded 72 prizes in ‘A’ region, 71 prizes in region ‘B’ and total 27 prizes in region ‘C. The staff members also received 40 prizes in individual capacities.

O. PNB’s Subsidiaries and Regional Rural Banks

a. PNB Gilts Limited

The Company’s Profit before Tax stood at Rs, 55.28 crore during FY’18. In Treasury Bills, the Company exceeded the committed ratio of 40%, achieving 42.48% and 40.91% in H1 and H2 respectively. The Company’s total turnover ratio (secondary market) stands at 83 times for treasury bills and 284 times for government-dated securities as on March 31, 2018 against the minimum RBI stipulation of 10 times and 5 times respectively.

b. Punjab National Bank International Limited (PNBIL)

The Operating Profit before provisions, tax and dividends for FY’18 decreased by $6.87 million to $11.93 million in FY’18 from $18.80 million in FY’17. The total income decreased by $21.52 million (32.27%) from $ 66.68 million to $ 45.16 million. Net Interest Income fell by $.4.51 million and Net trading income by $ 2.30 million. The Cost to Income Ratio increased to 56.39% from 46.70% due to lower income and slight reduction in cost.

c. Punjab National Bank Investment Services Limited (PNBISL)

During the year ended as on 31st March’18, the Company earned Fee Based Income of Rs, 6.00 crore with a total income of Rs, 9.21 crore. Profit before Tax (PBT) for FY’18 stood at Rs, 3.90 crore as against Rs,6.33 crore for FY ’17.

d. PNB Housing Finance Limited (PNBHFL)

During the year, the Company sanctioned loans of Rs, 55,582 crore in respect of 1.02 lakh applications as compared to Rs, 32,225 crore in respect of 0.64 lakh applications in the previous year, recording a growth of 72% in sanction amount.

Total loans outstanding as at 31st March 2018 were Rs, 57,014 crore recording a growth of 48% over the last year. The company’s Total income earned was Rs, 5517 crore showing YoY growth of 41% while Net Interest Income for the year stood at Rs, 1593 crore showing YoY growth of 54%.

e. DRUK PNB Bank Ltd. Bhutan

Total Business of the Bank increased to Rs, 1726 crore as on 31.03.2018 from Rs,1435 crore as on 31.03.2017, showing a YoY growth of 20.23%. CASA Ratio of the Bank stood at 47.85% as on 31.03.2018. The Bank is currently operating with a network of 7 Branches and 21 ATMs. Profit of the Bank increased from Rs, 17.62 crore during FY’17 to Rs, 18.99 crore during FY’18, showing a YoY growth of 7.78%.

f. Regional Rural Banks (RRBs)

There are Five Regional Rural Banks which are sponsored by the Bank and PNB’s proportion of ownership is 35% in each RRB.

Performance of RRBs as on 31.03.2018

(Amt. in Rs, crore)

Performance of RRBs	31st March’17 (Audited)	31st March’18 (Audited)	YoY Growth%
Aggregate Deposits	40092	44523	11.05
Aggregate Advances	21791	25965	19.15
Aggregate Net Profit	280	311	10.99
Branches under CBS	100%	100%
Profit Per Employee ('' lakh)	3.13	3.19	1.99
No. of Loss Making Branches (being 12 month old or more)	127	59

P. Awards and Accolades

The Bank won many prestigious awards from prestigious domestic and overseas institutions, prominent ones being, Dun & Bradstreet Banking Awards 2017 for Best Public Sector Bank under Government Scheme participation-Pradhan Mantri Mudra Yojana (PMMY) and National Award in SHG-Bank Linkage for the year 2016-17 under Large Category Bank by Ministry of Rural Development, Govt. of India.

PNB regained its Number One slot amongst Nationalized Banks and 2nd place amongst Public Sector Banks (PSBs) with overall rank at 191st amongst Top 1000 World Banks by ‘The Banker’ in 2017.

Q. Future Business Plan of the Bank

The FY’18 was a year of reforms and revival. On the economic front, global conditions improved while the Indian economy showed signs of greater growth momentum in the second half of FY ’18. On the banking front, a host of measures were announced to revamp the Indian banking model.

The reform process in the banking sector started with the announcement of recapitalization package of Rs,2.11 lakh crore for Public Sector Banks (PSBs). The Government and the Regulator also focussed on tackling the stressed assets under the Insolvency & Bankruptcy Code (IBC) with emphasis on quick resolution.

Many international agencies have forecast a favorable outlook for the Indian Economy with improved growth on the back of continued implementation of structural reforms that aim at raising productivity and incentivizing private investment. This augurs well for the Indian banking sector considering the strong linkages between the financial sector and the real economy.

The various reform measures including recapitalization plan and announcements in the Union Budget have set detailed contours for ‘Enhanced Access and Services Excellence (EASE)’ towards responsive and responsible banking. The Bank launched “MISSION PARIVARTAN” a People, Processes & Products transformation exercise for business excellence encompassing ten focus areas having thrust on enhanced profitability through improved access, efficiency and productivity.

The Bank with its large size, extensive distribution network and strong push towards digitalization is well positioned to take advantage of the growth opportunities across the economy. Under the present circumstances, the Bank is focusing on adjustments that are conducive to improving risk management, improved accountability and profitability. The Bank is also re-engineering its internal processes, making them more efficient, robust and leveraged on innovative technology advancements to enhance customers’ experience.

The Business Strategy for next year will be based upon ''Business Growth with capital conservation''. The thrust will be on conservation of Capital through focus on Retail Credit growth, recovery, churning of portfolio and increasing quality assets. Nearly 63% of the bank branches are in rural and semi-urban areas and with the rural consumption story being robust Tier 3 and Tier 4 cities will be targeted for rural financing. Rural credit will provide opportunities in both Agri-financing and in rural retail segments.

Going forward, the Bank will continue its concerted efforts in addressing the asset quality concerns and strengthening its balance sheet to reinvigorate credit growth. The Bank will also maintain focus on strengthening supervisory, monitoring and audit systems besides nurturing competitive efficiency. Simultaneously, it shall strive for promoting digitalization, managing technology-enabled financial innovations and dealing with cyber-security risks through targeted strategic initiatives. These actions are the prerequisite for delivering better returns to the stakeholders, in a tangible and sustainable way.

R. Board Of Directors

As on 31st March 2018, there were 11 Directors including 4 whole time Directors i.e. One Managing Director & CEO and three Executive Directors as on 31.03.2018.

During FY’18, the following changes took place in the composition of Board of Directors:

- Shri Sunil Mehta was appointed as Managing Director & CEO of the Bank w.e.f. 05.05.2017 in place of Smt. Usha Ananthasubramanian. He assumed the office on 05.05.2017.

- Smt. Usha Ananthasubramanian demitted office of Managing Director & CEO on 05.05.2017 on account of her appointment as Managing Director & CEO in Allahabad Bank.

- Dr. Ram S. Sangapure completed his tenure as Executive Director and demitted office on attaining the age of superannuation on 28.02.2018.

- Shri Ravi Mital was appointed as Government Nominee Director on the Board of the Bank w.e.f. 04.07.2017 in place of Shri Anil Kumar Khachi who ceased to be Director from 04.07.2017.

- Shri Sanjay Verma was elected as Shareholders’ Director on the Board of the Bank for a period of three years w.e.f.15.06.2017.

The Board wishes to place on record its appreciation for the valuable contribution made by Smt. Usha Ananthasubramanian, Managing Director & CEO, Dr. Ram

S Sangapure, Executive Director and Shri Anil Kumar Khachi, Government Nominee Director.

S. Directors’ Responsibility Statement

The Directors confirm that in the preparation of the annual accounts for the year ended 31st March’18:

- The applicable Accounting Standards have been followed alongwith proper explanation relating to material departures, if any;

- The accounting policies, framed in accordance with the guidelines of the Reserve Bank of India, were consistently applied;

- Reasonable and prudent judgment and estimates were made so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit of the Bank for the year ended 31st March’18;

- Proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of applicable laws governing banks in India, and;

- The accounts have been prepared on the principle of “going concern” basis.

T. Acknowledgement

The Board expresses thanks to the Government of India, Reserve Bank of India, Securities and Exchange Board of India, Stock Exchanges, Bank’s customers, public and the shareholders for valuable support, continued patronage and confidence reposed in the Bank.

The Board wishes to place on record its appreciation for the valuable contribution made by the members of the Bank’s staff at all levels and looks forward to their continued involvement in achieving the future goals.

For and on behalf of Board of Directors

Sunil Mehta

Managing Director & CEO

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Mar 31, 2017

DIRECTORS’ REPORT 2016-17

The Bank''s Global Business reached Rs,1041197 crore as at the end of March''17 reflecting a growth of 7.9% on a yearly basis. While the Global Deposits of the Bank at Rs,621704 crore grew by 12.4%, Global Net Advances recorded growth of 1.7% to reach Rs,419493 crore as on 31^st March''17. The Bank recorded a CASA growth of 26.5% and the share of CASA to domestic deposits increased to 46%.

In terms of Bottom-line parameters, the Bank''s Operating Profit increased from Rs,11339 crore as on 31^st MarchRs,16 to Rs,14565 crore as on 31^st March''17.

In this backdrop, your Directors take pleasure in placing the Bank’s Annual Report for FY’17 along with its audited Annual Financial Statements.

Our Performance A. Financial Highlights A.1. Balance Sheet

(Rs, crore)

Parameters	31st March’ 16	31st March’17	Growth (%)
Total Business	965377	1041197	7.9
Deposits	553051	621704	12.4
Net Advances	412326	419493	1.7

A. 2. Profit

(Rs, crore)

Parameters	FY’16	FY’17	(%)
Operating Profit	11339	14565	28.4
Provisions	15313	13240	-13.5
Net Profit	-3974	1325	-

A.3. Key Ratios

(%)

Particulars	FY’16	FY’17
Cost of Funds	4.93	4.60
Yield on Funds	7.28	6.74
Return on Equity (Net Worth)	-ve	3.52
Net Interest Margin (Domestic)	2.95	2.69
Return on Assets	-ve	0.19
Cost to Income Ratio	46.79	41.57

B. Operational Highlights

i. PNB crossed the Total Business Figures of Rs,10 lakh crore. CASA deposits of the Bank also crossed Rs,2.6 lakh crore mark.

ii. PNB Tab Banking: Saving Bank Account opening through Tablet PC Based Solution was launched to provide quality services to HNIs and NRIs at their door step. It caters to HNI customers and family members, salary accounts of educational institutions, corporate bodies & remotely placed Army cantonments.

iii. Retail Asset Processing Cell (RAPC): The Bank has revamped the Retail Credit Dispensation Model and replaced the existing model with RAPC model from

01.04.2016. RAPCs undertake all the activities from receipt of loan application through branches till sanction of retail loan which has resulted in qualitative improvement in loan processing.

iv. Back office for account opening: To strengthen our KYC system, the Bank has started opening saving and current account at centrally located Back office at each Zone.

v. For bringing more efficiency, Financial Inclusion Division (FID) and Priority Sector & Lead Bank Division (PS&LB) were merged to form Agri Business & Financial Inclusion Division. Retail Assets Division (RAD) and Resources Mobilization Division (RMD) were merged to form Retail Banking Division.

vi. PNB wallet named as “PNB Kitty” was launched.

vii. PNB also introduced Contactless Credit Cards namely “PNB Wave and Pay”. Another mobile application, PNB Yuva was launched for the youngsters.

viii. ATM Profitability Model has been designed for effective functioning of ATMs.

ix. Mr. Virat Kohli, a young and energetic Indian cricketer has been chosen as brand ambassador of the Bank because of his mass appeal to the youth of the country.

x. Sector 10, Dwarka Metro Station in New Delhi was branded as PNB Dwarka Metro Station.

C. Asset Quality

The Bank''s Gross NPA stood at Rs,55370 crore in FY''17 (FY''16: Rs,55818 crore) and the Net NPA stood at Rs,32702 crore in FY''17 (FY''16: Rs,35423 crore). In terms of ratios, Gross NPA ratio stood at 12.53% in FY''17 (FY''16: 12.90%) and Net NPA ratio stood at 7.81% in FY''17 (FY''16: 8.61%).

Gross NPA as well as Net NPA percentage has come down. PCR has also improved from 51.06% in FY''16 to 58.57% in FY''17. In absolute terms also both Gross NPA and Net NPA as on 31.03.17 reduced as compared to 31.03.16.

Initiatives taken during FY’17

- During the year, bank initiated “Pan India Recovery Drive” (PIRD) giving targets for each quarter to each Circle and Zone. These PAN India drives were successful in increasing cash recovery and up gradation during the year.

- The Bank also organized Mega Rin Mukti Shivirs for giving impetus to recovery in small advances to expedite the pace of settlement during the year.

- As on March''17, 1009 borrowers were declared as willful defaulters as per RBI guidelines.

- One Time Settlement (OTS) was also explored as a tool for expediting recovery during FY''17; OTS in 90165 accounts was approved, Rs,906 crore were recovered in approved OTS cases.

- NPA accounts as on 31.03.17 with aggregate outstanding of Rs, 2981 crore were upgraded to standard category. Total cash recoveries in NPA accounts amounted to Rs,10677 crore.

D. Industrial Restructuring

- Under the Scheme for Sustainable Structuring of Stressed Assets (S4A), the Bank mandated 12 accounts with outstanding of Rs, 2955 crore as on 31.03.2017.

- During FY''17, the Bank invoked Strategic Debt Restructuring (SDR) in 9 accounts with outstanding of Rs, 2564 crore as on 31.03.2017.

- During FY''17, 5/25 scheme was implemented in 10 accounts with outstanding of Rs,2334 crore as on 31.03.2017.

- Out of the existing 76 Corporate Debt Restructuring (CDR) restructured accounts (with outstanding Rs,11251 crore as on 31.03.2017), in 14 accounts, PNB was assigned the role of Monitoring Institution. During the current year, the successful exit was finalized in 4 CDR accounts with outstanding of Rs,285 crore on payment of recompense amount.

- The Bank has adopted the policy for New Framework for Revival and Rehabilitation (FRR) of MSMEs w.e.f.

14.07.2016. During FY''17, 12 accounts were restructured under FRR for MSME with outstanding of Rs,77 crore.

- For MSMEs, which cannot be covered under CDR/ SDR/S4A/FRR, the Bank put in place a transparent mechanism for restructuring of debts of potentially viable units. During FY''17, 21 accounts were restructured with outstanding of Rs,2804 crore.

E. Digitalization: Towards ‘Digital PNB’

Moving towards cashless society and paperless banking, the Bank undertook several initiatives to provide better, prompt and efficient services to the customers.

Alternative Delivery Channels:

a. Internet Banking: As on 31.03.2017, around 0.93 crore customers (retail and corporate) were enrolled in internet banking service. During this year, many new features were added which included Debit card hot listing and Digital signature as a second factor of authentication for doing transactions in Retail and Corporate Internet Banking.

b. Mobile Banking: As on 31.03.2017, the Mobile Banking Users were 0.71 crore.

c. SMS Alert Services: As on 31.03.2017, around 4.65 crore customers subscribed to SMS Alert Services. The service was further extended to 5 RRBs. OTP and SMS alert was introduced in multilingual languages.

d. ATMs: During FY''17, 1218 new ATMs were installed and as an outcome, the total ATM network reached 10681. E-Surveillance systems were installed at ATM sites.Solar UPS were installed to decrease the downtime of ATMs on account of electricity failure. ESQ ATM Monitoring System was installed for on line ATM monitoring and to take prompt corrective/preventive actions in case ATM gets down.

Some of the new initiatives taken during FY''17 are given as under:

- Launch of UPI (Unified Payment Interface) and BHIM:

A mobile based banking application, called UPI was launched wherein the customers were able to access their Bank accounts opened with different Banks in a single App. Total number of Users Registered as on 31.03.2017 were 467475.

Number of PNB accounts registered for BHIM (Mobile app based on UPI) as on 31.03.2017 are approximately 600000.

- Aadhaar Enabled Payment System: Number of transaction carried out was 90.96 lakh and total amount transacted was ''3740.23 crore as on FY''17.

- PNB Kitty: Number of users registered for PNB Kitty, a mobile wallet, as on 31.03.2017 were 87144.

- Green PIN for Debit Card: Green Pin facility was launched to curb physical pin printing for debit card except PMJDY accounts. The Bank saved approximately Rs, 43.00 crore under this green initiative.

- Business Debit Card: Business Debit Card was launched with enhanced transaction limit permitting withdrawal up to Rs,1 lakh from ATMs and e-commerce transaction up to Rs,3 lakh.

- Virtual Card: All wallet users are issued a virtual debit card. This virtual card can be used for e-Commerce transactions.

- Bank introduced Card to card fund transfer facility to transfer funds from one debit card to another debit card.

- Self Service Kiosk: The Bank installed 2561 Cash Deposit /Multifunction Kiosk (including PNB Cash Acceptor cum ATM), and 3378 Pass Book updating Machines across the country. The machines installed in E-lobby are made available to customers 24*7. A real time monitoring tool was implemented for effective monitoring and to reduce the down time.

F. Management Information System

As per RBI guidelines the Bank implemented Standardized Approach for Credit Risk under Basel-III through LADDER (Loans and Advances Data Desk for Evaluation & Reports) system thus enabling calculation of Risk Weighted Assets (RWAs) in respect of Loans & Advances.

During FY''17, 1534885 Credit Information Reports (CIRs) of prospective borrowers under Consumer category and 31555 CIRs under Commercial category were drawn from CIBIL, Experian, High Mark & Equifax databases.

Around 4.70 lakh Immovable Properties (IP) & Movable properties were registered with Central Registry of Securitization Asset Reconstruction and Security Interest of India (CERSAI) by Bank till March''17.

A total of 47 scenarios were implemented in Anti Money Laundering (AML) solutions. AML solution for five Regional Rural Banks (RRBs), which are sponsored by PNB, was implemented successfully.

The Bank has one of the largest branch networks of 6937 as on 31.03.2017. To fulfill the banking needs of unbanked areas, 178 new branches were added to the vast network of branches during the year.

International Presence

At present, Bank has its overseas presence in 9 countries by way of 4 branches (2 Hong Kong, 1 Dubai and 1 OBU-Mumbai), 2 Subsidiaries (London and Bhutan),1 Associate (Kazakhstan), 1 Joint Venture (Nepal) and 4 Representative Offices (Sydney-Australia, Shanghai-China, Dhaka-Bangladesh and Dubai-UAE).

H. International Banking

The foreign exchange turnover was Rs,140814 crore for FY''17 with a growth of 5.18% on YoY basis. The Bank also has an International Service Branch in New Delhi for handling inward remittances. During FY''17, the Bank handled remittance business of more than Rs,58147 crore, showing a growth of nearly 0.45% YoY.

The Bank has Rupee Drawing Arrangements (RDA) with 36 Exchange Houses (30 in the Gulf, 2 in Singapore, 2 in the USA, 1 in Australia and 1 in Canada) to facilitate remittance from NRIs.

I. Operations

Organizational Restructuring: A four tier structure was introduced from 01.04.2016 with Zonal offices linking Head Office to Circle Offices and branches.

Employee Suggestion Scheme: Around 460 suggestions were perused and cash incentives were given to 14 Staff members for suggestions accepted/implemented under the Employee Suggestion Scheme.

Demonetization exercise: At the time of demonetization, the Bank issued regular guidelines, installed suitable checks in Core Banking System and scrutinized irregularities. Steps were taken to ensure proper implementation of guidelines/ directives received from RBI/MOF. The field functionaries were sensitized on handling of Specified Bank Notes and introduction of new series of currency notes and mobile ATMs were placed in Hospitals, Railway Stations, Joggers'' parks, Markets, Business establishments and Offices, etc. Bank could mobilize huge amount of CASA due to the goodwill created during the period.

PNB Tab Banking: Saving Bank Account opening through Tablet PC Based Solution was launched as a step further to provide quality services to HNIs and NRIs at their door step. It caters to HNI customers and family members, salary accounts of educational institutions, corporate bodies & remotely placed Army Cantonments.

Retail Asset Processing Cell (RAPC): The Bank has revamped the Retail Credit Dispensation Model and replaced the existing model with the introduction of RAPC model made effective from 01.04.2016. RAPCs undertake all the activities from receipt of loan application through branches till sanction of retail loan.

Back office for account opening: To strengthen our KYC system, the Bank has started opening saving and current account at centrally located Back office at each Zone

J. Indian Accounting Standards (IND AS)

The Bank has commenced the process of IND AS (Indian Accounting Standards) implementation for FY''17 and made a diagnostic study to identify the differences between the current accounting framework and IND AS. Bank has quantified the impact and filed the pro-forma financial statements for the half year ended September 2016 with the Reserve Bank of India.

K. New Initiatives Division

The Bank already has its presence on Twitter and LinkedIn. Further, the Bank opened official Face book page for the public, in the name of ‘Punjab National Bank, HO, New Delhi''. Virtual debit cards were made available on mobile app PNB Kitty.

L. Business Diversification

- Mutual Fund: During FY''17, the Bank mobilized total amount of Rs, 4545 crore, Asset under Management (AUM) stood at Rs,814 crore and brokerage earned was Rs, 4 crore.

- Insurance Business

1. Life Insurance Business: Bank''s earnings from Life-Insurance business during FY''17 amounted to Rs,110 crore as against Rs,86 crore during FY''16, showing growth of 28%. Total Business mobilized under Life Insurance since inception was Rs,4152 crore from 566667 policies and thus total earnings amounted to Rs,358 crore.

2. Non-Life Insurance Business: The revenue earned during FY''17 was Rs, 28 crore as against Rs, 25 crore during FY''16, showing a growth of 15%. Under ‘PNB-Oriental Royal Mediclaim'', a customized health insurance policy, 181913 policies were sourced during FY''17 as against 158175 policies sourced during FY''16.

- Depository Services: The Bank earned an income of Rs,76 lakh during FY''17 for providing Depository Services.

- Online Trading Services: An income of 28 lakh was received from Associates on account of Online Trading Activities during FY''17.

- Merchant Banking: During FY''17, the Bank handled more than 454000 Application Supported by Blocked Amount (ASBA) applications against 85 issues, blocking an amount of Rs,2597 crore and earning Notional Income more than Rs,6.15 crore.

- Credit Card: Among the PSBs, the Bank is the largest issuer of credit cards and achieved a growth rate of 31% in issuance of credit cards in FY''17. To enhance the security level of Bank''s credit cards, EMV Chip cards with PIN were issued. As a result of issuance of credit cards, the Bank''s fee based income increased to Rs,14 crore.

- PNB Genie, an app full of features was launched. It will act as single point destination for cardholders to operate their PNB Credit Card seamlessly and without hassles.

- PNB National Electronic Toll Collection: PNB

FASTag program is part of National Electronic Toll Collection (NETC) initiative rolled out by NPCI. FASTag is a simple to use, reloadable tag which enables automatic deduction of toll charges

- Merchant Acquiring Business: The Bank installed 38841 PoS terminals and integrated 217 Internet Payment Gateways.

M. Government Business

The Bank partnered with India Post Payments Bank (IPPB)

and provided technology platform alongwith managerial support

at their offices opened in Ranchi and Raipur.

Centralised on-line Collection & Disbursement (COCD)

Portal was developed for the Government for collecting Interest subsidy, Margin Money, CGTMSE Fee, etc. This facility will also benefit weavers to get instant Margin Money Credit directly to their accounts. Other developments are as under:

1. New Pension Scheme (NPS) was made live in offline mode i.e. application will be collected through the Branches which are acting as POP-SP (Point of Presence-Service Provider).

2. NPS contribution was made live through on-line mode for existing PRAN (Permanent Retirement Account Number) holders.

3. EPFO collections were made live through on-line mode and generation of Electronic Verification Code (EVC) for Income Tax return filing.

4. Non-Tax Revenue Portal (NTRP) was introduced to facilitate all banks'' customers to pay their dues (other than taxes) to GoI and Payment of Equalization Levy through IBS (Online and Offline - both).

5. To bring efficiency in pension disbursement, following facilities were introduced:

- Pension slips were made available in the pension server.

- An e-lobby cum veteran facilitation centre was set up at DiAV, Delhi Cantt. & at Chandimandir, Chandigarh.

- PCDA allocated space for setting up Centralized Pension Processing Cell (CPPC) at Allahabad in its campus.

N. Treasury Operations

Gross Domestic Investment as on 31^st March''17 stood at Rs, 183297 crore up from Rs, 154727 crore as on 31^st March''16 and registered a YoY growth of 18.46%. The average investment as on 31^st March''17 was Rs,175774 crore as against Rs,162548 crore in the corresponding period last year. Interest income from investment portfolio increased from Rs,11935 crore for FY''16 to Rs, 12439 crore for FY''17. Total Trading Profit (including derivative) increased from Rs, 999 crore for FY''16 to Rs, 2654 crore for FY''17.

Fixed Income (SLR/NSLR): During FY''17, Bank booked a Trading Profit of Rs,2214 crore from sale of investments in fixed income up from Rs,504 crore during the corresponding period of previous year.

Equity: The Bank booked Rs,168 crore Trading Profit in Equity segment and Dividend income of Rs,96 crore.

Forex: Net Forex income decreased from Rs,1320 crore during FY''16 to Rs,1155 crore during FY''17. However, Exchange Profit from treasury operations increased from Rs,386 crore in FY''16 to Rs,547 crore in FY''17.

O. Customer Care

Initiatives undertaken during FY''17 for improvement in customer service included:

- Four Sub-Committee meetings were conducted.

- The Standing Committee on Customer Service held four meetings.

- Officials of the Bank made 1353 incognito visits to branches pan India. Circle Offices took corrective steps to plug the loopholes pointed out by the visiting officials.

Due to increased transparency, the number of complaints received during FY''17 increased to 35257 as compared to 29654 complaints received during FY''16. 217 complaints were outstanding as on 01.04.2016 and out of total number of 35474 complaints, 35159 complaints were redressed as on 31^st March''17. The number of complaints pending as on 31.03.2017 was 315 which have since been resolved.

Two awards were passed by office of the Banking Ombudsman during FY''17. Appeals were filed against the two awards. Appellate Authority has set aside one award passed by Banking Ombudsman, Kanpur while decision is pending under second appeal.

P. Implementation of Official Language Policy

For FY''17, the Bank achieved all the targets in the parameters fixed by the Govt. of India, Ministry of Home Affairs, Department of Official Language.

During FY''17, the Bank received more than 120 awards for its excellent performance in the use of Hindi which included prestigious Rajbhasha Kirti Shield - a top most award scheme of Govt. of India, besides RBI Rajbhasha Shield (Consolation Prize in region ‘A'' & ‘C'', Third Prize in region ‘B'' and Second Prize for PNB PRATIBHA in Bilingual Magazine Category) and other Regional Level Awards of Ministry of Home Affairs.

Articles received under various competitions organized during the year 2016, were compiled in the book ‘PNB PRAVAH-Sarjna Ke Naye Aayam’.

Q. PNB’s Subsidiaries and Regional Rural Banks a. PNB Gilts Limited

The Bank has an ownership of 74.07% in PNB Gilts Limited as on 31.03.2017. During FY''17, Company fulfilled all its obligations as a Primary Dealer in both primary and secondary market. During the year, its Profit before Tax stood at Rs, 257 crore, which is the highest since inception. It made an impressive Trading Profit of Rs,186 crore due to increased churning of portfolio which led to total secondary market outright turnover of Rs,6.5 lakh crore as against Rs, 3.8 lakh crore in FY''16.

b. Punjab National Bank International Limited (PNBIL)

PNBIL is a wholly owned subsidiary of Punjab National Bank. Total Business of the Company decreased from $2,834 million as at 31st March 2016 to $2,212 million as at 31st March 2017, a year-on-year decrease of 21.95% due to the consolidation exercise undertaken.

The Operating Profit before provisions, tax and dividends for FY''17 decreased by 47.26% to $20.05 million from $38.26 million in FY''16. The Total Income decreased by $19.16 million (35.20%) from $54.43 million to $35.27 million. Net Interest Income fell by $12.59 million and Net Trading Income by $6.65 million. The expenditure to income ratio increased to 43.16% from 29.71% despite slight reduction in cost due to lower income.

Gross impaired advances increased to $299.39 million ($144.99 million in 2016) leading to additional impairment provisions of $153.39 million. The net impaired advances increased to $40.83 million in 2017 from $36.37 million in 2016. As a result, the Company declared a loss before tax of $133.34 million.

The Company had a CRAR of 21.70% as on 31^st March''17, and met all other CET1 and Tier 1 regulatory capital requirements (PNB infused $100 million).

c. Punjab National Bank Investment Services Limited (PNBISL)

PNB has 100% ownership in PNBISL. During the year ended March''17, the Company earned fee based income of Rs,9.03 crore with a total income of Rs,12.14 crore. Profit before Tax for FY''17 stood at Rs,6.33 crore as against Rs,6.12 crore for FY''16.

d. DRUK PNB Bank Ltd. Bhutan

PNB has 51% ownership in DRUK PNB Bank Ltd. Bhutan. The Bank is currently operating with a network of 6 branches and 18 ATMs. Profit of the Bank increased from Rs,22 crore during FY''16 to Rs,25 crore during the FY''17, showing a YoY growth of 15.25%. Total Business of the Bank stood at Rs,1435 crore, as on 31.03.2017. CASA Ratio of the Bank stood at 57.38% as on 31.03.2017.

Gross Non Performing Loans (NPL) Ratio of the Bank decreased to 3.30% as on 31.03.2017 from 3.96% as on 31.03.2016. The Net NPL ratio of the Bank stood at 1.99% as on 31.03.2017. The Return on Equity (ROE) as on 31.03.2017 stood at 15.99% and Earning per share was ''3.92 as on 31.03.17.

e. PNB held 51% share in PNB Housing Finance Ltd

(PNBHFL) a subsidiary of the Bank. Subsequent, to the IPO of PNBHFL on 06.11.2016 this changed to 39.08%

f. Regional Rural Banks

At present, five RRBs are sponsored by the Bank. These RRBs are operating in five States, namely, Bihar, Haryana, Himachal Pradesh, Punjab and Uttar Pradesh covering 75 districts with a network of 2386 branches.

S.N	Name of Regional Rural Banks / Other Associates	Proportion of Ownership (%)
1	Madhya Bihar Gramin Bank, Patna	35
2	Sarva Haryana Gramin Bank, Rohtak	35
3	Himachal Gramin Bank, Mandi	35
4	Punjab Gramin Bank, Kapurthala	35
5	Sarva UP Gramin Bank, Meerut	35

The aggregate paid-up capital of these Regional Rural Banks is Rs, 199 crore. Central Government, State Governments and PNB contributed in paid-up capital of these RRBs in the ratio of 50:15:35 respectively. The Bank''s contribution towards capital of these RRBs is Rs,69.76 crore. The combined Net worth of RRBs as on 31^st March''17 is Rs, 3479 crore.

Performance of RRBs as on 31.03.2017

(Amt. in Rs,crore)

Performance of RRBs	31st March’16	31st March’17	YoY Growth %
Aggregate Deposits	33492	40092	19.71
Aggregate Advances	19832	21792	9.88
Aggregate Net Profit	286.21	279.96	-2.18
Branches under CBS	100%	100%
Profit Per Employee (Rs, lakh)	3.28	3.13	-4.57
No. of Loss Making Branches (being 12 month old or more)	84	127

R. Awards and Accolades

During FY''17, in recognition of its performance and initiatives,

PNB received various awards, some of which are:

1. Best MSME Bank Award-Winner (Large Category) by CIMSME.

2. Vigilance Service Excellence Award 2016-17 by Institute of Public Enterprises (IPE) Hyderabad.

3. BFSI Tech Maestro Awards 2016 in Application category for four node cluster by Bitstream Mediaworks Pvt. Ltd.

4. National Payments Excellence Awards 2016 for Aadhaar Enabled Payments System (AEPS) by National Payments Corporation of India (NPCI).

5. Outlook Money Awards 2016- Education Loan Provider (Runners Up) by Outlook Money.

6. CSR Initiatives & Business Responsibility Award-Runner-Up (Large Category) by CIMSME.

S. Future Business Plan of the Bank

Against the backdrop of robust macroeconomic stability, demonetization derailed the growth momentum partially. With the Government reforms measures, however, opportunities across all segments are expected to increase. The Bank did well in challenging situation. The asset quality improved but profitability and credit emerged as other big challenges. The Bank has the potential to deliver more to the shareholders and the strategy for FY''18 is designed to deliver that potential.

For the next year, the focus areas and objectives would be profitability with stable growth, improvement in asset quality, reduction in risk-weighted assets, sustenance of CASA growth momentum and acceleration in pace of digitalization to align businesses more closely around the needs of the customers. For credit, the Bank will target semi-urban and rural areas where the Bank has significant presence and focus will be on small ticket advances in MSME, Agriculture, Retail, etc. The focus will continue to be maintained on getting qualitative accounts rather than quantitative numbers.

Technology is transforming the way Bank reaches its customers. Increasingly, customers connect with the Bank through smart phones, laptops, tablets and other mobile devices. This is an opportunity we are determined to avail. The Bank through digitization of internal processes will bring in benefits of reduced cycle time, fewer exceptions and lesser costs resulting in greater efficiency. Also, under present circumstances digitalization offers business potentials in terms of installing POS machines, introducing new credit and debit cards, e-wallets, etc.

Looking ahead, we see FY''18 as another year of challenges, of disciplined implementation of our Strategy to build on the momentum and make decisive progress towards better growth and higher profitability. With focus on cashless economy, Bank will constantly innovate and come up with faster solution for every business need.Hopefully, FY''18 will be a year where the Bank will take a quantum leap when it comes to digitalization and retail and will emerge as PNB Retail Express on Digital lines.

T. Directors’ Responsibility Statement

The Directors confirm that in the preparation of the annual accounts for the year ended 31st March''17:

- The applicable Accounting Standards have been followed along with proper explanation relating to material departures, if any;

- The accounting policies, framed in accordance with the guidelines of the Reserve Bank of India, were consistently applied;

- Reasonable and prudent judgment and estimates were made so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit of the Bank for the year ended 31st March''17;

- Proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of applicable laws governing banks in India, and;

- The accounts have been prepared on the principle of “going concern” basis.

U. Acknowledgement

The Board expressed thanks to the Government of India, Reserve Bank of India, Securities and Exchange Board of India, Stock Exchanges, Bank''s customers, public and the shareholders for valuable support, continued patronage and confidence reposed in the Bank.

The Board wishes to place on record its appreciation for the valuable contribution made by the members of the Bank''s staff at all levels and look forward to their continued involvement in achieving the future goals.

For and on behalf of Board of Directors Sunil Mehta

Managing Director& CEO

---

Mar 31, 2015

Dear Members,

2014-15

The Financial year 2015 was a challenging year for Punjab National Bank. Amid the challenges, your Bank made significant achievements and aligned its business strategy to the macroeconomic scenario of the country. The core strategy of the Bank was ''Profitable Growth from the grass-roots'' by garnering low cost deposits on the liability side and extending qualitative credit on the assets side. Due to this strategy, the Bank stands tall amongst its competitors in terms of Domestic Business, Domestic Deposits, Domestic Advances, CASA Deposits and Operating Profit during FY''15.

During FY''15, the Bank has crossed several milestones i.e., Rs. 8.80 lakh crore Global Business, Rs. 6.00 lakh crore Global Assets, Rs. 5 lakh crore Global Deposits, Rs. 1.80 lakh crore CASA Deposits and Rs. 1 lakh crore Overseas Business. The Bank''s Global Business reached close to Rs. 8.82 lakh crore as at end of March''15 reflecting a growth of 10.1% on yearly basis. The Bank''s International business crossed the landmark of Rs. 1,00,000 crore and reached Rs. 1,00,785 crore while recording a robust YoY growth of 37.2%. While the Global Deposits of the Bank at Rs. 5.01 lakh crore grew by 11.1%, Net Advances recorded growth of 9.0% to reach Rs. 3.81 lakh crore as on 31st March 2015.

In terms of Bottom-line parameters, the Bank''s Operating Profit increased from Rs. 1 1384 crore as at 31st March''14 to Rs. 1 1955 crore as at 31st March''15. However due to higher provisions, the Net Profit stood at Rs. 3062 crore. In terms of key ratios, Net Interest Margin at over 3% for the Financial Year ended March''15 remained one of the highest amongst nationalized banks. Further, the CRAR of the Bank at 12.21% stood above the stipulated level.

To summarize, Financial Year 2014-15 was a year in which we focused on further strengthening our businesses, bottom line parameters, network, technological capabilities and operating parameters. With continued improvements in its key financial parameters, vast network, large customer base and a healthy capital position, the Bank has created a platform for achieving and sustaining robust growth in the future.

In this backdrop, your Directors take pleasure in placing the Bank''s Annual Report for 2014-15 along with its audited annual financial statements.

OUR PERFORMANCE

A. FINANCIAL HIGHLIGHTS

A.1. BALANCE SHEET

( Rs. crore)

Particulars 31st Mar''14 31st Mar''15 Growth (%)

Total Business 800666 881913 10.1

Deposits 451397 501379 11.1

Advances 349269 380534 9.0

A.2. PROFIT

< Rs. crore)

Mar''14 Mar''15 (%)

Parameters

11384 11955 5.0 Operating Profit

8042 8893 10.6 Provisions

3343 3062 -8.4 Net Profit

A.3. KEY RATIOS

(%)

Particulars 2013-14 2014-15

Cost of Funds 5.20 5.14

Yield on Funds 8.31 8.00

Return on Equity 9.69 8.12

Net Interest Margin 3.44 3.15

Return on Assets 0.64 0.53

Cost to Income Ratio 45.06 46.74

Operating Expenses to Average Working Funds 1.79 1.81

Operating Profit to Average Working Funds 2.19 2.06

Earnings per share (Rs)* 18.78 16.91

Book value per share (Rs)* 190.50 203.24

Provision Coverage Ratio 59.07 58.21

CRAR - Basel III 11.52 12.21

* Face Value of share after splitting is Rs. 2/-

B. OPERATIONAL HIGHLIGHTS

- Towards bringing efficiency in pension disbursement, the Bank introduced a new facility i.e. Digital life certificate. Further, the Bank started working in coordination with the Government to be in pilot run of e-PPOs (Electronic Pension Payment Orders). In order to avoid delay in submission of Life Certificates by Pensioners in November every year, the Bank initiated the process of sending SMS reminders to pensioners to submit Life Certificate and taking lead in developing life certificate schemes.

- A new system driven Preventive Monitoring System (Early Warning) was operationalised in the Bank w.e.f. July 201 4 for better monitoring of borrowers'' financial health and taking timely action for reduction/containment of NPAs.

- The Bank was under parallel run for adoption of Foundation Internal Rating Based Approach (FIRB) for Credit Risk and The Standardized Approach (TSA) for Operational Risk. The Bank also submitted formal Letter of Intent for adoption of Advanced Measurement Approach (AMA) for Operational Risk and Internal Models Approach (IMA) for Market risk.

- The Bank initiated the concept of designating certain major cities as Pragati cities where all branches were opened under Pragati Model. Presently three cities namely Bhopal, Noida and Patiala have attained Pragati City status.

- Moving towards digitalization, the Bank developed another platform for redemption of card loyalty points earned on usage of debit cards known as "PNB Rewardz Mobile App". With the help of this Mobile App, customers can register for PNB Rewards, check their reward points, redeem online and get alerts for deals & discounts.

- The Bank put in place a proper marketing structure and separate vertical based on "Feet on Street" concept to acquire fresh business. This would facilitate the effective publicity of products of the Bank.

C. DIVIDEND

The Board of Directors in its meeting held on 8th May 2015 recommended dividend of Rs. 3.30 per equity share of Rs. 2 each (i.e. 165%) for FY''15.

16. Right To Information Act

The Right to Information Act was implemented by the Bank. The relevant information as per Right to Information Act was posted on the Bank''s website (www.pnbindia.in). During FY''15, the Bank received 7517 applications and provided requisite information to 5388 applicants and 2121 applications were found exempted under the provisions of the Act. 224 applications were outstanding as on 31.03.2015 for disposal within the prescribed timeframe.

17. Implementation of Official Language Policy

The Bank has always been leading in the area of i mplementation of Official Language as in other areas of the Bank. The Bank achieved almost all the targets in all parameters fixed by the Govt. of India, Ministry of Home Affairs, Department of Official Language for the year 2014-15. All the bilingual CBS and HRMS computers were under Hindi Interface. By adopting this bilingual system, implementation of Rajbhasha increased a lot. In addition, the Bank used Unicode fonts for Hindi correspondence etc. at all levels.

During FY''15, the Bank was awarded with 34 awards for its excellent performance in the use of Hindi which includes some of very significant awards namely Indira Gandhi Rajbhasha Shield - a top most award scheme of Govt. of India, RBI Rajbhasha Shield and other Regional level awards of Ministry of Home Affairs. In addition, Town Official Language Implementation Committees situated in different locations of the country and other Non-Govt. Organizations also awarded the Bank offices. The Bank successfully convened the Town Official Language Implementation Committees constituted by Govt. of India in Delhi, Bharatpur, Kanpur, Chandigarh, Dharamshala, Sriganganagar, Bulandshahar, Dehradun, Gorakhpur, Kurukshetra, Rohtak, Muzaffarnagar and Hoshiarpur.

The third sub-committee of Committee of Parliament on Official Language visited the Ernakulum Circle Branch Office- Kottayam of the Bank on 19th January, 2015 and Draft & Evidence Committee of Parliament on Official Language inspected Delhi Bank Narakas Members on 1st April, 2015, convenor of Delhi TOLIC being Punjab National Bank. The Committee not only expressed satisfaction but also appreciated the efforts made by the Bank for progressive use of Hindi.

The Bank celebrates ''Hindi Maah'' in the month of September every year. Various competitions were organised at all India, local and Circle levels in which staff members of all cadres participate enthusiastically. The winners are awarded with prizes in the Rajbhasha Function. Bank has its own Lala Lajpat Rai Rajbhasha Shield Yojana for its various HO Divisions and Circle Offices, Training Centres, Zonal Audit Offices, etc. Under the scheme, every year offices were awarded with prizes for doing excellent work in the area of Rajbhasha implementation. This year also, the Bank organised Hindi Maah & other programmes/competitions and awards & prizes were given. Fifth collection of articles received in the competitions on creative writing is going to be published. Under Moulik Hindi Pustak Lekhan Yojana of the Bank, cash incentives were awarded to the staff members for writing original books in Hindi on Banking and Non-banking subjects. All the staff members including the employees retired from the Bank''s services, participated under this scheme.

18. Customer Care

The Bank continues to lay greater emphasis on providing prompt and efficient service to its customers. With a view to achieve this end, the Bank has established Customer Care Centre at each Circle Office and Head Office. Customer Care Centre at Head Office is headed by a General Manager, who is assisted by a Deputy General Manager, two Chief Managers and several other officers. Every endeavour is made to redress the complaints within the timeframe fixed under the Grievance Redressal Policy formulated by the Bank and complainant is invariably apprised of the response of the Bank. In the Bank, systems and procedures are reviewed at regular intervals to remove systemic deficiency, if any, which help in further improving the customer service.

Due to constant efforts made by the Bank to improve the customer service, the number of complaints received during FY''15 came down from 38,869 in FY''14 to 29,759. Out of total number of 29,951 complaints, 192 complaints were outstanding as on 01.04.2014 and 29759 complaints were received during FY''15. The number of complaints redressed was 29,778 as at 31st March 2015. 1 73 complaints were pending as on 31.03.2015, which stood resolved.

The number of unimplemented awards as at 01.04.2014 was 4. The awards passed by Banking Ombudsman during FY''15 were 7 while the awards implemented during same period were 10. One award remained unimplemented as at 31st March 2015, in respect of which appeal was filed with the Appellate Authority.

Initiatives undertaken during the year for improvement in customer service

- The Bank constituted a team of officials at Customer Care Centre at Head Office to pay incognito visit to branches in Delhi NCR area to assess their standard of service. Deficiencies pointed out by the visiting officials are being shared with the concerned branch and the Circle Office for taking corrective steps for removal of the same. Similar system was introduced in other Circle Offices of the Bank on pan India basis. This helped in further improvement in customer service.

- The Bank established state-of-the-art Contact Centres at Gurgaon and Noida to provide tele-banking services to its customers on 24 x 7 x 365 basis through two renowned Service Providers viz., (i) M/s Aegis Limited and (ii) M/s Mphasis Limited. In addition to above two Primary Sites, the Bank established two Secondary Contact Centres at Mangalore and Bhopal to provide tele-banking services to its customers in regional languages also.

- The Bank publishes a monthly magazine titled "Customer Speak" in which gist of the selected complaints made by the customers is published and the action taken and resolution provided to the complainant is also mentioned. Besides, the Bank''s guidelines on important issues pertaining to customer service are highlighted for the benefit of the field staff.

- Theme Based Meetings were conducted in all branches on a common date at monthly intervals to bring about awareness of the Bank''s products and schemes and for improving knowledge and skills of the field staff.

19. PNB''s Subsidiaries and Regional Rural Banks

a. PNB Housing Finance Limited (PNBHFL)

FY''15 was a year of high growth once again under all the parameters. The Company achieved good growth in fresh loans, outstanding loan book, profitability and it further reduced Non-Performing loans. The Company''s Total Loans sanctioned during the year were Rs.15,076 crore showing YoY growth of 71% in FY''15. During the year, the total loan disbursements was Rs. 9440 crore showing YoY growth of 72% in FY''15. The Loans outstanding as on 31st March 2015 was Rs. 16,819 crore registering the growth of 59% over FY''14.

The Company''s Gross Non-Performing Assets stood at 0.20% while Net Non-Performing Assets stood at 0.07% which was lowest in the Industry. Profit before Tax stood at Rs. 295.46 crore, showing YoY growth of 68% over FY''14. The Profit after Tax reached at Rs. 196.11 crore showing YoY growth of 54% over FY''14.

The Company faced tough competition in the market, with regard to declining margins and takeover of portfolio by the competitors. This challenge was met with efficient funds management and improved service to the customers. The Company improved the borrowing mix during the year, which has enabled it not only to reduce borrowing cost but also better net interest margin as compared to last year. Public deposits of the Company grew by over 186% at Rs. 4897 crore. The deposits contributed over 28% of the loan assets as compared to 16% a year ago.

The Company introduced online state-of-art Enterprise System Solution. The Company will soon introduce web enabled services for its customers and business associates. During the year, the Company opened six new branches taking the total network to 38 branches. These branches were supported by 15 zonal and regional underwriting hubs. The hub structure scalable up to 60-65 branches would enable future growth of business. By 31st March 2015, the Company was 5th largest Housing Finance Company and 2nd largest deposit taking Housing Finance Company.

b. PND Gilts Limited

During FY''15, Indian financial markets continued to be guided by a host of varying factors, like commitment to inflation management, reasonable stability on currency front, current account deficit under control and on fiscal consolidation path. Further, fast changing geo-political landscape, weakening commodity prices including plummeting crude prices, weakening Euro Zone economy, signs of strengthening US economy, growth slowdown in China and positive macro economic developments in India were shaping the contours of Indian financial markets. In the wake of these developments, a revised liquidity management framework was introduced to manage liquidity condition on an ongoing basis while the statutory liquidity ratio (SLR) was reduced to 21.5% of NDTL. In tune with the falling retail inflation, RBI also cut the repo rate by 50 bps to 7.50%. As a result of all these factors, the yield on ten year Sovereign benchmark paper declined to the level of 7.74% as on 31st March 2015.

Against the above developments, PNB Gilts Ltd. fulfilled all its obligations as a primary dealer in both the Primary and Secondary markets. Profit before Tax (PBT) amounted to Rs. 134 crore as against Rs. 91 crore in FY''14 The increase in profit was due to the company''s extra vigilance on market movement with a suitable trading strategy within the risk parameters set by the Board to keep the market risk under check. The trading income amounted to Rs. 76 crore during FY''15 as against Rs. 31 crore in FY''14. Further the total outright turnover increased to Rs. 4.71 lakh crore as against Rs. 3.08 lakh crore in FY''14. This is the highest turnover achieved by the company since inception. The Total Net worth of the company stood at Rs. 718.06 crore as on 31st March 2015.

c. Punjab National Bank International Limited (PNBIL)

During FY''15, Total Business of PNBIL increased from $2818 million (as on 31st March 2014) to $ 2975.1 7 million (as on 31st March 2015), registering a YoY growth of 5.58%.

Deposits increased to $1421 million (2014: $1331 million), while Advances increased to $1554 million (2014: $1487 million), registering YoY growth of 6.74% and 4.50%, respectively. The major growth under deposits came in retail deposits, which grew from $683 million to $722 million. Operating Profit went up from $27 million to $41 million, registering growth of 52%. Total Comprehensive Income attributable to equity shareholders was $ 9.91 million (2014: $8.63 million). Offering basic banking products and relationship banking continues to be the strong selling point for the Bank. The Indian Rupee (INR) Remittance scheme of the Bank stabilized and gained popularity among the ethnic population. The Bank built a strong brand image in the UK market.

Cash ISA product launched by PNBIL with variants of Variable Rate Cash ISA and Fixed Rate Cash ISA, has gained popularity and the Company attracted over USD 100 million deposits under the scheme. Helpline service established by the Bank during previous year has stabilized and contributed in improving the customer service. The Bank switched over from Maestro Card to contact-less Master card. Debit card holders of PNBIL have the option to withdraw money from any ATM having Master Card logo. PNBIL is the first Indian Bank to issue contactless debit card and few among the local banks to do so. Strategic integration, parental support, continuous innovation, customer centric approach, niche positioning and competitive advantage in its targeted customer base are the key strengths the Bank is enjoying in UK. The Bank has in place well defined and clearly laid down policies on Risk Management, Audit and Compliance. The Bank has its own dedicated treasury at London and a back office in India. The Bank complies with all regulatory and capital adequacy guidelines of Prudential Regulation Authority of UK.

d. Punjab National Bank Investment Services Limited (PNBISL)

PNB Investment Services Ltd. (PNBISL) is a wholly owned subsidiary of Punjab National Bank. It is engaged in providing Merchant Banking and other Corporate Advisory services in the streams of Financial Appraisal/Techno-Economic viability Study, Debt Syndication and undertaking Corporate Debt Restructuring (CDR) besides providing Trusteeship services to various Corporate Clients.

The Company is having Corporate Office at Mumbai and registered office at Delhi. At both these offices all gamut of services are being rendered. The Company is also having three other Representative Offices at Chennai, Hyderabad and Ahmedabad. Besides generating business leads for Mumbai and Delhi Offices, these Representative Offices also undertake Security Trustee and Loan Syndication activities. Chennai Representative Office is also equipped to handle conducting of Techno-economic viability studies.

In the financial year ended on 31st March 2015, the overall performance of the Company was good. During the year ended March 2015, the Company earned total fee based business income of Rs. 11.13 crore as against last year corresponding fee of Rs. 8.08 crore registering YoY growth of about 38%. Total Income of the Company increased from Rs. 11.15 crore to Rs. 14.53 crore at a growth rate of 30%. Profit before tax, during this period, improved from Rs. 8.06 crore to Rs. 10.70 crore, registering YoY growth of 33%.

During the period, the Company under Merchant Banking stream filed Draft Red Herring Prospectus (DRHP) for one of reputed company engaged in Infrastructure development for its proposed Initial Public Offer (IPO). The Company was also in process of conducting due diligence for filing DRHP in another Merchant Banking assignment of a reputed company engaged in Automobile components for its proposed IPO. During the period, the ambit of CDR Advisory Services was increased to cover bilateral restructurings apart from restructuring under CDRa EG aegis. The Company is now planning to further expand the scope of the services to include debt resolution through take-out financing, refinancing options and providing corporate advisory services to arrange finance for big Infrastructure Projects, which could not achieve commercial operation as envisaged at the time of their financial closure. Further, the Company was also planning to take steps for providing corporate advisory services to the lenders and borrowers through rectification route under JLF mechanism, where the private equity/strategic capital is to be arranged.

With slew of reform and forward looking Central budget coupled with supporting Monetary policy, of the Regulator Bank, there is a positive outlook in financial and Stock Markets. PNBISL is confident to get benefit of the positive sentiments and hopeful to do better in FY''16. The Company was also in process of strengthening its team through recruitment of some senior officials under Merchant Banking and Restructuring segments and is confident to get many more Merchant Banking assignments to broaden its visibility in the financial market.

The Company aims to blossom into an Investment Bank by offering the entire gamut of investment banking and corporate advisory services like venture capital advisory, project advisory, buy and sell-side advisory, accessing financial markets to raise capital and restructuring advisory.

e. Regional Rural Banks

As on 31st March 2015, five RRBs, sponsored by Punjab National Bank, were operating in five States, namely, Bihar, Haryana, Himachal Pradesh, Punjab and Uttar Pradesh covering 74 districts with a network of 2144 branches.

The aggregate paid-up capital of these Regional Rural Banks stood at Rs. 199.30 crore. Central Government, State Governments and PNB contributed in paid-up capital of these RRBs in the ratio of 50: 15: 35 respectively. The Bank''s contribution towards capital of these RRBs was Rs. 69.76 crore. The combined net worth of PNB sponsored RRBs as on March 2015 was Rs. 2809.85 crore.

During FY''15, the Aggregate Business of all RRBs increased from Rs. 40531 crore to Rs. 45630 crore showing a growth of Rs. 5099 crore (12.58%). The Aggregate Deposits and Aggregate Advances as on 31.03.2015 stood at Rs. 29194 crore (YoY 14.01%) and Rs. 16436 crore (YoY 10.13%), respectively. The Aggregate Net Profit of the RRBs as on 31.03.2015 stood at Rs. 331.25 crore (YoY 9.05%). All the sponsored RRBs are in Profit.

The Gross NPAs of the RRBs stood at Rs. 692 crore (4.21% of Total Advances) during the period. Further, Net NPAs stood at Rs. 338 crore (i.e. 2.15% of Net Advances) as on 31.03.2015.

During the year, 217 new branches were opened by RRBs, taking the Total Network of branches to 2144 with all being on CBS and total numbers of employees stood at 8675.

Progress in opening of accounts under Pradhan Mantri Jan Dhan Yojana (PMJDY) as on 31.03.15 was 23,88,792 accounts, out of which RuPay debit cards were issued in 5,34,122 accounts. Balance outstanding in these accounts stood at Rs. 354.9 crore. The survey of allotted wards & Sub Service Areas (SSAs) was completed by all RRBs in time.

The RRBs sponsored by the Bank actively participated in economic development of the areas of their presence. With the implementation of Core Banking Solution (CBS), rural customers also received the benefits of latest technology, thus providing services to the rural poor under Financial Inclusion Plan at their doorsteps.

RRBs also opened NRE/NRO accounts. The facility of NEFT, RuPay ATM cards & KCC cards, KIOSK banking solution (KBS) under Financial Inclusion Plan, Aadhaar Payment Bridge System (ABPS) under DBT, etc., were also being provided to customers in all the RRBs. The Bank achieved all the SOI targets given by the Ministry of Finance, Govt. of India, DFS to the Bank for March 2015.

Performance of RRBs as on 31.03.2015

(Amt. In Rs. Crore)

S. No. Performance of RRBs Mar''14 Mar''15 YoY (Audited) (Audited) growth%

1 Aggregate deposits 25607 29194 14.01

2 Aggregate Advances 14924 16436 10.13

3 Aggregate Net Profit 304 331 9.05

4 Branches under CBS 100% 100% -

5 Profit Per Employee (Rs lakh) 3.98 4.04 1.52

No. of Loss Making 41 93 -

Branches (being 12 month old or more)

20. Awards and Accolades

During Financial Year 2015, in recognition of its performance and initiatives, PNB received various awards, some of which are: -

- BFSI Awards for Bank with leading Financial Inclusion Initiatives 2015 by ABP News.

- IBA Banking Technology awards 2014-15 for the Bank with "Best Risk Management Initiatives" by Indian Banks'' Association.

- Corporate Vigilance Excellence Award 2014-15 by Institute of Public Enterprises, Hyderabad.

- IBA Banking Technology Awards 2014-15 for the bank with "Best Training and Human Resources, e-Learning initiatives (PSU)" -Second Runners Up by Indian Banks'' Association.

- Skoch Renaissanace Award for people management: Skill Development & Employment generation - Certificate for Commendable Contribution.

- MSME Banking Excellence Awards 2014- Best Bank for Financial inclusion -Runners Up by Chambers of Indian Micro Small and Medium Enterprises.

- Banking Frontiers: Inspiring Work Place by Banking Frontiers Magazines.

- Golden Peacock Business Excellence Award 2014 by Institute of Directors.

- Golden Peacock Innovative Product/Service Award 2014 by Institute of Directors.

- Pradhan Mantri Jan Dhan Yojana Awards for Excellence by Federation of Trade Services.

- PSU Awards - Financial Inclusion and Payment Systems Award by Elets Technomedia Pvt. Ltd.

21. Board of Directors

As on 31.03.2015, there were 8 Directors on the Board of the Bank including 3 whole time Directors i.e. Managing Director & Chief Executive Officer and two Executive Directors. During FY''15, the following changes took place in the composition of Board of Directors:

- Shri K. R. Kamath demitted the office of Chairman & Managing Director of the Bank w.e.f. 28.10.2014 on completion of his tenure of five years on 27.10.2014.

- Shri Rajesh Aggarwal was appointed in place of Shri Anurag Jain as Government of India Nominee Director on the Board of the Bank w.e.f. 29.01.2015.

- Shri Gauri Shankar, Executive Director entrusted with additional Charge of the Managing Director & Chief Executive Officer of the Bank for a period of three months, assumed charge of the office w.e.f. 09.02.2015.

- Shri B.B. Chaudhry, Shri M.A. Antulay, Shri M.N. Gopinath and Shri D.K. Singla, Directors completed their tenure on the Board of the Bank during FY''15.

- Dr. Sunil Gupta and Smt. Aradhana Misra, Directors resigned from the Board of the Bank during FY''15.

The Board wishes to place on record its appreciation for the valuable contribution made by Shri K.R. Kamath, CMD, Shri Anurag Jain, Shri B.B. Chaudhry, Shri M.A. Antulay, Smt. Aradhana Misra, Dr. Sunil Gupta, Shri M.N. Gopinath and Shri D.K. Singla, Directors.

22. Directors'' Responsibility Statement

The Directors confirm that in the preparation of the annual accounts for the year ended March 31, 2015: -

- The applicable Accounting Standards have been followed along with proper explanation relating to material departures, if any;

- The accounting policies, framed in accordance with the guidelines of the Reserve Bank of India, were consistently applied;

- Internal financial controls have been laid down by the Bank for ensuring orderly conduct of business;

- Reasonable and prudent judgment and estimates were made so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit of the Bank for the year ended March 31, 2015;

- Proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of applicable laws governing banks in India, and

- The accounts have been prepared on the principle of "going concern" basis.

23. Acknowledgement

The Board expressed thanks to the Government of India, Reserve Bank of India, Securities and Exchange Board of India, Stock Exchanges, Bank''s customers, Public and the shareholders for valuable support, continued patronage and confidence reposed in the Bank.

The Board wishes to place on record its appreciation for the valuable contribution made by the staff of the Bank at all levels and look forward to their continued involvement in achieving the future goals.

For and on behalf of Board of Directors

(Gauri Shankar) Managing Director & CEO

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Mar 31, 2013

To The Members

PNB has delivered a satisfactory performance during FY''13 despite challenging macroeconomic environment. Bank continued to be one of the leading nationalized banks with more than 80 million valued customers. During the FY''13, Bank has crossed various new landmarks of Rs. 7 lakh crore Business, Rs. 3 lakh crore Net Advances, Rs. 3 lakh crore Total Domestic Core Deposits, Rs. 1.50 lakh crore CASA Deposits and Rs. 30,000 crore Networth. This performance is combined with the highest Net Interest Margin, consistently higher Return on Equity, Book Value per share and Price to Earnings ratio. This performance was largely due to the Bank''s focus on ''Building a Superior Customer Experience'' with thrust on Retail, SMEs, Agriculture, Inclusive approach to Banking, Cost effective Organizational Structure, Better Asset Liability Management, prudent Risk Management, strengthening Recovery Mechanisms and various Cost Control Measures.

Today, PNB has a countrywide presence with a network of more than 5800 branches and more than 6000 ATMs that provide its 80 million customers a unique banking experience. This has also earned the Bank strong brand equity and customers'' loyalty. Further to take the customer experience to new heights, Bank has initiated a number of revitalization activities such as Centralized Public Grievances Redressal Mechanism and appointment of Chief Customer Service Officer who will work as Internal Ombudsman for resolution of customers'' grievances.

The exemplary performance has been duly recognized by the market. During the FY''13, Bank has been recognized as the "Best Public sector Bank" by CNBC TV 18. The Bank has also been recognised as the ''Most Socially Responsive Bank'' consecutively for second year by Business World and PwC. Further, The Sunday FINWIZ 2012 finds Bank the "Best Banker in Agriculture Credit (Large)". PNB has recently been conferred with National Award for excellent performance in lending under PMEGP Scheme of KVIC in North Zone by MSME Ministry, GOI. Bank has been awarded "Golden Peacock Business Excellence Award 2013" by Institute of Directors. Apart from this, the Bank has also been bestowed the IBA Banking Technology Awards 2012 under the categories of "Best Use of Business Intelligence" and "Best Risk Management and Security Initiatives".

In this backdrop, your Directors take pleasure in placing the Bank''s Annual Report for 2012-13 along with its audited annual financial statements.

OUR PERFORMANCE

1. FINANCIAL HIGHLIGHTS

1. BALANCE SHEET

(Rs. crore)

PARTICULARS 2011-12 2012-13 Growth (%)

Capital and Reserves 27815 32677 17.5

Total Business 673363 700285 4.0

Deposits 379588 391560 3.2

Low Cost Deposits (Savings and Current) 134129 153344 14.3

Advances 293775 308725 5.1

Retail Credit 29196 31310 7.2

Priority Sector Credit 95898 91427 -4.7

Agricultural Credit 45917 38055 -17.1

1.2. PROFIT

(Rs. crore)

PARTICULARS FY 2011-12 FY 2012-13 Growth (%)

Operating Profit 10614 10907 2.8

Provisions 5730 6160 7.5

Net Profit 4884 4748 -2.8

1.3 INCOME & EXPENDITURE

(Rs. crore)

PARTICULARS FY 2011-12 FY 2012-13 Growth (%)

Interest Income 36476 41893 14.9

- Intrest/discount and advances/bills 28435 31855 12.0

- Income on Investments 7739 9530 23.1

Non-Interest Income 4203 4216 0.3

Commission, Exchange and Brokerage 2375 2337 -1.6

Net Interest Income 13414 14857 10.8

Total Income 40679 46109 13.3

Interest Expended 23062 27037 17.2

Interest Paid on Deposits 21396 25501 19.2

Total Operating Expenses 7003 8165 16.6

Establishment Expenses 4723 5675 20.1

Total Expenses 30064 35202 17.1

1.4. KEY RATIOS

(Percentage)

PARTICULARS 2011-12 2012-13

Cost of Funds 5.62 5.70

Yield on Funds 8.89 8.83

Return on Equity 18.52 15.19

Net Interest Margin 3.84 3.52

Return on Assets 1.19 1.00

Cost to income Ration 39.75 42.81

Operating Expenses to Average Working Funds 1.71 1.72

Operating Profit to Average Working Funds 2.59 2.30

Earnings per share 154.02 139.52

Book value per share 777.35 884.03

Ratio of Net NPAs to Net advances 1.52 2.35

NPA Coverage ratio 62.73 58.83

CRAR-Basel II 12.63 12.72

2. OPERATIONAL HIGHLIGHTS

- Under PNB Pragati-Organizational Transformational Exercise of the Bank, operational excellence is one of the important pillars amongst three pillars on which this programme stands.

- The Bank has expanded its Wealth Management Services by forming PNB MetLife India Insurance Co. Ltd. after acquiring 30% stake in MetLife India Insurance Company Ltd.

- The Bank has set up its Corporate Office Building named ''PNB Pragati Tower'' housing the integrated Treasury office and Circle Office at Bandra Kurla Complex, Mumbai.

- The Bank has expanded its international presence to Sydney, Australia its 10th international destination. Further, the Bank is exploring possibilities for establishing its presence in Maldives, South Africa, Bangladesh, Myanmar and Singapore.

- The Bank is steadily adding to the kitty of its products and services. PNB RuPay Card is one such step in this direction.

- The Bank has launched PNB Express Money Remit Card and approximately 1 5,000 cards have been issued so far to beneficiaries of Inward remittance from Middle East.

- The Bank also modified the existing schemes and launched several new schemes of loans for meeting the growing aspirations of customers.

3. DIVIDEND

The Board of Directors has recommended a dividend of 270% for the year 2012-13.

4. CORPORATE GOVERNANCE

The Bank is committed to best practices in corporate governance by adhering to high standards of transparency and accountability in the interests of all the stakeholders.

As a listed entity, the Bank is complying with various regulatory requirements and with the government guidelines on the matters relating to corporate governance, which has been examined by the Statutory Central Auditors.

PNB follows practices that provide its financial stakeholders a high level of assurance on the quality of corporate governance. These best practices are reaffirmed by CGR-2 rating of the rating agency, ICRA Ltd., reflecting a high level of assertion on the quality of corporate governance of the Bank.

5. BOARD OF DIRECTORS

During the Year 2012-13, the following changes took place in the composition of Board of Directors:

- Shri S.R. Bansal was appointed as an Executive Director of the Bank on 18.06.2012.

- Shri N.S. Vishwanathan was appointed in place of Shri Jasbir Singh as RBI Nominee Director on 06.09.2012.

6. Details of various meetings held up to 31st March, 2013:

S. Meeting Number of S. Meeting Number of No. meetings No. meetings held held

1 Board Meeting 12 11 Share Transfer 25 Committee

2 Management 14 12 Shareholders''/ 6 Committee Investors'' Grievances Committee

3 Committee of 4 13 Directors Promotion 3 Directors to review Committee vigilance and non-vigilance cases

4 Audit Committee 11 14 Appellate and - of Board Reviewing Authority

5 Risk Management 4 15 Steering Committee 4 Vision 2013

6 Special Committee 9 16 Nomination Committee - of Board to Monitor and Follow Fraud cases of Rs. 1.00 crore and above

7 IT Committee of the 4 17 Insurance Joint - Board Venture Committee

8 P.A. Committee 9 18 Head Office 40 Credit Approval Committee Level-III

9 Remuneration 2 19 Election of - Committee Shareholders Directors - Voting by Public Sector Banks

10 Customer Service 4 20 Committee of 1 Committee Board to monitor the progress in recovery

- Shri M.P. Singh ceased to be Workmen Employee Director on 27.01.2013 on completion of his tenure on the Board of the Bank.

- Shri T.C. Jhalani was appointed as Workmen Employee Director on the Board of the Bank vide notification dated 08.03.2013.

- Shri Pradeep Kumar ceased to be Non Workmen Employee Director on 14.02.2013 on completion of his tenure on the Board of the Bank.

The Board welcomed Shri S.R. Bansal, Executive Director, Shri N.S. Vishwanathan, RBI Nominee Director and Shri T.C. Jhalani, as Workmen Employee Director on the Board of Directors of the Bank. The Board also wishes to place on record its appreciation for the valuable contribution made by Shri Jasbir Singh, RBI Nominee Director, Shri M.P. Singh, Workmen Employee Director and Shri Pradeep Kumar as Non-workmen Employee Director.

7. ACKNOWLEDGEMENTS

The Board of Directors thanks the Government of India, Reserve Bank of India, Securities and Exchange Board of India, Stock Exchanges, Bank''s customers, public and the shareholders for the valuable support, continued patronage and confidence reposed in the Bank.

The Board wishes to place on record its appreciation for the valuable contribution made by the members of the Bank''s staff at all levels and look forward to their continued involvement in achieving the future goals.

For and on behalf of Board of Directors

Chairman & Managing Director

---

Mar 31, 2012

PNB remained frontrunner in the Indian Banking with its Total Business, Total Deposits and Total Advances growing over 21% on YoY basis. This is higher than the growth achieved by the Banking System in India. This performance is combined with the consistently higher Book Value per Share and Earnings per Share. This impressive performance was largely due to the Bank's focus on 'Building a Customer Experience' with thrust on Retail, SMEs, Agriculture, Students, Inclusive approach to Banking, Cost effective Organizational Structure, Better Asset Liability Management, prudent Risk Management, strengthening Recovery Mechanisms and various Cost Control Measures.

We believe that Customer Experience is not just about Customer Service. It is also about physical as well as emotional elements. When both these elements are measured against customers' expectations, one can have the Best Customer Experience. For this, 'Customer Loyalty' is our watchword. Today PNB has a country wide presence with a network of 5670 branches and more than 6000 ATMs that provide its 7.2 crore customers a unique banking experience. This has also earned the Bank a strong brand equity and customers' loyalty.

PNB is amongst India's most trusted brands and features at the 25th place amongst the Top 50 most valuable corporate brands by Brand Finance-ET and 195th amongst top 500 global banks as per Brand Finance Global Banking 500 for 2011. More importantly, during 2011-12, PNB has been recognized as the 'Best in Corporate Social Responsibility (CSR) Overall' by World HRD Congress and been recognized as the 'Best Socially Responsive Bank' by Business World & PwC. Besides, Golden Peacock National Training Award has also been conferred upon the Bank by the Institute of Directors. Above all, the Bank was recognized as the 'Best Bank' by Business India.

In this backdrop, your Directors take pleasure in placing the Bank's Annual Report for 2011-12 along with its audited annual financial statements.

OUR PERFORMANCE

1. FINANCIAL HIGHLIGHTS

1.1. BALANCE SHEET

(Crore)

Particulars 2010-11 2011-12 (%)/Growth (%)

21509 27818 29.3

Capital & Reserves

555005 673363 21.3

Total Business

312899 379588 21.3

Deposits

120325 134129 11.5

Low cost Deposits (Savings and Current)

242107 293775 21.3

Advances

23621 29196 23.6

Retail Credit

75652 95898 26.8

Priority Sector Credit

40.67 40.70 -

-% of Adjusted Net Bank Credit (ANBC)

35462 45917 29.5

Agricultural credit

- 19.30 19.34 -

-% of Adjusted Net Bank Credit (ANBC)

1.2. PROFIT

(Crore) 2010-11 2011-12 Particulars FY 2010-11 FY 2011-12 Growth (%)

9056 10614 17.2

Operating profit

4622 5730 24.0

Provisions

4433 4884 10.2

Net profit

1.3. INCOME & EXPENDITURE

(Crore)

2010-11 2011-12 (%)

Particulars FY 2010-11 FY 2011-12 Growth (%)

26986 36428 35.0

Interest income

- 21105 28447 34.8

- Interest/discount on advances/bills

- 5638 7692 36.4

- Income on investments

3613 4203 16.3

Non-interest income

2045 2375 16.1

Commission, Exchange & Brokerage

11807 13414 13.6

Net Interest Income

30599 40631 32.8

Total Income

15179 23014 51.6

Interest expended

- 13795 21396 55.1

- Interest paid on deposits

6364 7003 10.0

Total Operating expenses

- 4461 4723 5.9

- Establishment expenses

21543 30016 39.3

Total Expenses

9056 10614 17.2

Operating profit

4622 5730 24.0

Provisions and contingencies

4433 4884 10.2

Net profit

Note: Difference in totals is due to rounding off

1.4 KEY RATIOS

(Percentage)

PARTICULARS 2010-11 2011-2012

4.57 5.62

Average cost of funds

8.12 8.89

Average yield on funds

22.13 18.52

Return on Equity

3.96 3.84

Net Interest Margin

1.34 1.19

Return on Assets

41.27 39.75

Cost to Income Ratio

1.91 1.71

Operating expenses to Average Working Funds

2.72 2.59

Operating profit to Average Working Funds

140.6 154.2

Earnings per share (Rs)

632.5 777.4

Book value per share (Rs)

0.85 1.52

Net NPAs to Net advances

73.21 62.73

Provision Coverage Ratio

12.42 12.63

CRAR - Basel II

2. OPERATIONAL HIGHLIGHTS DURING THE YEAR

- Bank has expanded its wealth management services by foraying into Life Insurance business and tie-up with Metlife India Insurance Company Ltd.

- Bank has expanded its international foray to 10th destination viz. Sydney, Australia. Further we are exploring possibilities for presence in Maldives, South Africa, Bangladesh, Myanmar, Singapore and Brazil.

- Taking forward its mission of "Banking for the unbanked", under Financial Inclusion Plan, Bank has covered all its 4588 villages allotted under the Swabhiman campaign of Govt. of India through Business Correspondents.

- Bank has made a positive contribution towards community by further streamlining its CSR activities. Towards this, 'PNB Prerna', an association/body of wives of top executives of the Bank to carry forward the CSR agenda of the Bank, has completed one year of its existence.

- Bank is establishing e-lobbies for providing 24 x 7 banking Services and is also opening GenNext Branches to cater to the needs of younger generation.

- Bank has made its technology platform more robust with necessary up-gradations. It has successfully migrated to next version of Finacle (7.0.25) for better Customer service.

- Various customer friendly initiatives were introduced by the Bank to provide quality experience to our esteemed customers, like Introduction of Cash Deposit machines, Self Service passbook printing terminals, SMS alerts, 'PNB Welcome Kit' for HNI / salaried account holders, etc.

- Bank continued its expansion by adding over 450 branches and 950 ATMs during the year.

- Bank introduced many new customized offers targeting special customer segments like new education loan scheme 'PNB Pratibha', MSME schemes like 'PNB weavers Credit card' and 'PNB Super Trade', new term deposit product like 'PNB 1111 days', 'prospective senior citizen scheme', etc.

3. DIVIDEND

The Board of Directors has recommended a dividend of 220% for the year 2011-12.

4. CORPORATE GOVERNANCE

The Bank is committed to best practices in Corporate Governance by adhering to high standards of transparency, accountability, ethical business practices, operational efficiencies and social responsiveness for maximizing interest of all the stakeholders.

As a listed entity, Bank is complying with various regulatory requirements. Bank has complied with the guidelines of Reserve Bank of India and SEBI on the matters relating to Corporate Governance, which has been examined by the Statutory Central Auditors.

PNB follows practices that provide its financial stakeholders a high level of assurance on the quality of Corporate Governance. These best practices are reaffirmed by CGR-2 rating of the rating agency, ICRA Ltd reflecting a high level of assertion on the quality of corporate governance of the Bank.

5. BOARD OF DIRECTORS

As on 31.03.2012, there are 12 Directors on the Board of the Bank including 3 whole time Directors, i.e Chairman and Managing Director and two Executive Directors.

During the Year 2011-12, the following changes took place in the composition of Board of Directors:

- Shri M.A. Antulay, part time non official Director was re- appointed on 20.05.2011.

- Shri M.V. Tanksale, Executive Director demitted the office on

28.06.2011 on his elevation as Chairman & Managing Director of Central Bank of India.

- Smt. Usha Ananthasubramanian was appointed as Executive Director of the Bank on 18.07.2011.

- Shri Anurag Jain, GOI Nominee Director was nominated by the Govt. of India on 03.08.2011 in the position earlier held by Smt. Ravneet Kaur.

- Shri B.B. Choudhary, Director under Chartered Accountant category, was appointed by the Govt. of India on 23.09.2011.

- Shri V.K. Mishra, part time non official Director ceased to be Director on the Board of the Bank w.e.f. 05.12.2011 on completion of his tenure.

- Shri D.K. Singla, Shri T.N. Chaturvedi and Shri G.R. Sundaravadivel, Shareholder Directors, demitted their offices on 27.12.2011 on completion of their tenure on the Board of the Bank.

- 3 new Shareholder Directors namely, Shri M.N. Gopinath, Shri D.K. Singla and Dr. Sunil Gupta have been elected as Shareholder Directors in the EGM held on 20.03.2012.

The Board welcomes Smt. Usha Ananthasubramanian, Executive Director, Shri Anurag Jain, Shri B.B. Choudhary and Shri M.A. Antulay (re-nominated), Shri M.N. Gopinath, Shri D.K. Singla (re-elected) and Dr. Sunil Gupta, as Directors on the Board of the Bank. The Board also wishes to place on record its appreciation for the valuable contributions made by Shri M.V. Tanksale, the then Executive Director, Shri V.K. Mishra, Shri T.N. Chaturvedi and Shri G.R. Sundaravadivel, the Directors.

6. Details of various meetings held up to 31st March, 2012:

S. Meeting Number of S. Meeting Number of No. Meetings No. Meetings held upto held upto March, 2012 March, 2012

1 Board Meeting 13 11 Share Transfer 24 Committee

2 Management 19 12 Shareholders'/ Investors' 6 Committee Grievances Committee

3 Committee of Directors 4 13 Directors Promotion 1 to review vigilance & Committee non-vigilance cases

4 Audit Committee of Board 11 14 Appellate & Reviewing - Authority

5 Risk Management 4 15 Steering Committee 4 Committee Vision 2013

6 Special Committee of 9 16 Nomination Committee 1 Board to Monitor and

Follow Fraud cases of Rs. 1.00 crore and above

7 IT Committee of the Board 4 17 Insurance Joint Venture 5

Committee

8 PA. Committee 6 18 Organisational 2

Transformation &

Business Excellence

Programme

9 Remuneration Committee 1 19 Credit Approval Committee 8

10 Customer Service Committee 4

7. ACKNOWLEDGMENTS

The Board of Directors thank the Government of India, Reserve Bank of India, Securities and Exchange Board of India, Stock Exchanges, Bank's customers, public and the shareholders for valuable support, continued patronage and confidence reposed in the bank.

The Board also wishes to place on record its appreciation for the valuable contribution of the members of the Bank's staff at all levels and look forward to their continued involvement in achieving the future goals.

For and on behalf of Board of Directors CHAIRMAN AND MANAGING DIRECTOR

---

Mar 31, 2011

Punjab National Bank with a rich legacy spanning 117 years has emerged as the second largest bank in the country. Today, PNB is a well established brand with a strong technological base touching the lives of millions of customers. The Bank has worked assiduously to build its front line position, constantly reinventing itself to keep pace with the changing banking landscape and customer preferences. While successfully managing change, the Bank has remained deeply rooted in the principles of good banking. Resultantly, the fundamentals of the Bank have strengthened which augur well for a bright future.

A network of 5189 branches, 5050 ATMs and a customer base of over 60 million add considerably to the franchise value the Bank enjoys. Technology has played an important role in expanding its franchise value through customer acquisition and retention, carrying out faster and efficient financial transactions in a secure manner and in improving customer convenience.

The awards and recognitions received by the Bank bear testimony to the efforts and initiatives to remain highly customer-focused, adoption of good business practices and extending the reach to the unbanked. It is also a reflection of how the Bank has been able to successfully pursue business opportunities with acumen while continuing to fulfill its social responsibilities.

Organization Structure

Pursuit of strategy requires that organization structure is closely aligned with business goals. During the year, Bank took various measures aimed at improving organization structure to support effective execution of strategy. The Retail Banking Division was bifurcated into Retail Assets Division and Resource Mobilization Division. Further, the Retail Hubs were reorganized into Retail Asset Branches (RAB) to meet the requirements of the retail borrowers and ensure faster delivery of retail credit. Presently, 73 RABs are functioning successfully. Budgeting process was further strengthened by linking with systems growth in a particular area as well as available potential. To face the HR challenges in a proactive manner, routine administrative functions relating to human resource management were hived-off into a separate Personnel Administration Division.

Your Directors take pleasure in placing the Banks Annual Report for 2010-11 along with its audited annual financial statements.

OUR PERFORMANCE

1. FINANCIAL HIGHLIGHTS

1.1 BALANCE SHEET

(Rs Crore) 2009-10 2010-11 Growth %

PARTICULARS

Capital & Reserves 17723 21509 21.36

Total Business 435931 555005 27.31

Deposits 249330 312899 25.50

Low cost Deposits (Savings and Current) 101850 120325 18.14

Advances 186601 242107 29.75

Retail Credit 19214 23621 22.94

Priority Sector Credit 63769 75652 18.63

-% of Adjusted Net Bank Credit (ANBC) 40.55 40.67 -

Agreecultural Credit 30207 35462 17.40

-% of Adjusted Net Bank Credit (ANBC) 19.53 19.3 -

1.2 PROFIT

(Rs Crore)

PARTICULARS FY 2009-2010 FY 2010-2011 Growth%

Operating profit 7326 9056 23.61

Provisions 3421 4622 35.11

Net profit 3905 4433 13.53

1.3 INCOME & EXPENDITURE

(Rs Crore)

PARTICULARS FY 2009-2010 FY 2010-2011 Growth%

Interest income 21422 26986 25.97

- Interest/discount on advances/bills 16677 21105 26.55

- Income on investments 4556 5638 23.75

Non-interest income 3610 3613 0.08

Commission, Exchange & Brokerage 1682 2045 21.58

Net Interest Income 8478 11807 39.27

Total Income 25032 30599 22.24

Interest expended 12944 15179 17.27

- Interest paid on deposits 11966 13795 15.28

Total Operating expenses 4762 6364 33.64

- Establishment expenses 3121 4461 42.93

Total Expenses 17706 21543 21.67

Operating profit 7326 9056 23.61 Provisions and contingencies 3421 4622 35.11

Net profit 3905 4433 13.53

Note: Difference in total is due to rounding off

1.4. KEY RATIOS (Percent)

PARTICULARS 2009-10 2010-11

Average cost of funds 4.76 4.57

Average yield on funds 7.88 8.12

Return on Equity 24.59 22.13

Net Interest Margin 3.57 3.96

Return on Assets 1.44 1.34

Cost to Income Ratio 39.39 41.27

Operating expenses to average Working Funds 1.70 1.91

Operating profit to average Working Funds 2.62 2.72

Earnings per share (Rs.) 123.86 140.60

Book value per share (Rs.) 514.77 661.20

Ratio of Net NPAs to Net advances 0.53 0.85

NPA coverage ratio 81.17 73.21

CRAR - Basel II 14.16 12.42

2. OPERATIONAL HIGHLIGHTS

- Bank leveraged on its 5180 plus branch network to build deep, enduring relationships with its 60 million plus customers across all the segments.

- Bank’s network of 5050 ATMs along with alternate delivery channels account for more than 28% of transactions.

- New set of products and services like PNB Uphaar, PNB Suvidha, World Travel Card, etc were introduced during the year.

- In addition to international presence in 9 countries, Bank acquired equity stake in Dana Bank of Kazakhstan and is in the process of setting up presence in Australia and Canada.

- Under the performance management system, employee performance was recognized and incentivized.

- Strengthened pool of management talent as part of succession planning exercise with Team 2020 initiatives.

- Streamlined CSR activities to move forward and to make a positive contribution towards community.

3. DIVIDEND

The Board of Directors has recommended a dividend of 220% for the year 2010-11.

4. CORPORATE GOVERNANCE

The Bank is committed to best practices in corporate governance and recognizes that transparency, ethical behavior, integrity and protection of interests of all stakeholders form the keystones of governance. Being in the business of financial intermediation, the Bank is fully aware of the risks involved. To address this, the Bank has put in place elaborate system of risk identification, measurement and mitigation. A Risk Management Committee at the Board level monitors the risk management process in the Bank. The Board of Directors has oversight on the Bank and ensures that there is right balance between business and risk. Further through the Audit Committee, the Board ensures strong system of internal control and corporate reporting including financial reporting. As a listed entity, the Bank is complying with various regulatory requirements. Disclosures are made in the financial statements in compliance with Section 29 of Banking Regulation Act, 1949, RBI guidelines, Section 49 of the Listing Agreement and Accounting Standards and Guidelines issued by the Institute of Chartered Accountants of India. These inter-alia, include segment reporting, related party disclosures, lending to sensitive sectors, restructured loan assets, key business ratios, risk management, performance of Bank’s share price, etc.

PNB follows practices that provide its financial stakeholders a high level of assurance on the quality of Corporate Governance. This is reflected in the ICRA Ltd’s CGR 2 rating which is the highest rating assigned to a financial institution in India.

5. BOARD OF DIRECTORS

As on 31.03.2011 there were 11 Directors on the Board of the Bank including Chairman and Managing Director and two Executive Directors.

At the time of appointment/nomination of any Director, the guidelines defining the roles and responsibilities of Directors as circulated by Government of India/ Ministry of Finance from time to time are made available to them. A declaration of “Model Code of Conduct” is being obtained from all the Directors in April every year. Deeds of covenants as recommended by Ganguly Committee are being entered into with the elected directors on the Board of the Bank in terms of instructions of Reserve Bank of India/ Government of India every year.

As per recommendations of Ganguly Committee, Directors are imparted training to make them more responsive to the organization, the business environment and emerging developments/challenges in the banking sector. As part of their

training, Directors are nominated to training programmes in reputed Institutions like Centre for Corporate Research and Training (CCRT), Navi Mumbai, Institute of Company Secretaries of India, Institute of Directors, etc.

During the Financial Year 2010-11, four Directors were nominated for various training programmes viz. “Masterclass for Directors leading to Certified Corporate Directorship”, “Conference on Corporate Compliance” and “Role of Independent Directors - Issues & Solutions”.

6. CHANGES IN THE BOARD OF DIRECTORS

During the year 2010-11, the following changes took place in the composition of Board of Directors of the Bank:

- Shri L.M. Fonseca, RBI Nominee Director ceased to be Director on 30.07.2010 on expiry of his term.

- Shri Jasbir Singh, RBI Nominee Director was appointed on the Board of the Bank on 30.07.2010.

- Shri Nagesh Pydah, Executive Director, demitted the office on 31.12.2010 on his elevation as Chairman & Managing Director of Oriental Bank of Commerce.

- Shri Rakesh Sethi was appointed as Executive Director of the Bank on 01.01.2011.

- Shri M.A. Antulay, part time non-official Director ceased to be Director w.e.f 27.02.2011 on completion of his tenure.

- Shri G.P. Khandelwal, part time non-official Director ceased to be Director w.e.f 27.02.2011 on completion of his tenure.

The Board welcomes Shri Rakesh Sethi, new Executive Director and Shri Jasbir Singh, new Director and wishes to place on record the valuable services rendered by Sh. Nagesh Pydah, Sh. L.M. Fonseca, Sh. M.A. Antulay and Sh. G.P. Khandelwal.

BOARD COMMITTEES

(As on 31.03.2011)

No. NAME OF THE COMMITTEE

1. Management Committee

2. Audit Committee of Board

3. Risk Management Committee

4. Share Transfer Committee

5. Shareholders’ /Investors’ Grievance Committee

6. Customer Service Committee

7. I.T. Committee

8. PA Committee

9. Director’s Promotion Committee

10. Appellate Authority and Reviewing Authority

11. Special Committee of Board to monitor and follow up fraud cases involving Rs.1.00 crore and above.

12. Committee of Directors to Review Vigilance and Non Vigilance cases

13. HRD Committee of Directors

14. Remuneration Committee

15. Nomination Committee

16. Steering Committee for Vision 2013

17. Insurance Joint Venture Committee

The details of various meetings held up to 31st March, 2011 are as follows:

S. Meeting Number of No Meetings

1 Board Meeting 15

2 Management Committee 22

3 Committee of Directors 4 to review vigilance & non-vigilance cases

4 Audit Committee of Board 10



5 Risk Management Committee 4

6 Special Committee 6 of Board to Monitor and Follow Fraud cases of Rs. 1.00 crore and above

7 IT Committee of the Board 5

8 P.A. Committee 5

9 Customer Service 4 Committee

10 Share Transfer Committee 24

11 Shareholders/ Investors 6 Grievances Committee

12 Directors Promotion 2 Committee

13 Steering Committee 4 Vision 2013

14 Insurance Joint Venture 4 Committee

7. ACKNOWLEDGMENTS

The Board of Directors thank the Government of India, Reserve Bank of India, Securities and Exchange Board of India, Stock Exchanges, Bank’s customers, public and the shareholders for valuable support, continued patronage and confidence reposed in the bank.

The Board also wishes to place on record its appreciation for the valuable contribution of the members of the Bank’s staff at all levels and look forward to their continued enthusiasm in meeting the future goals.

For and on behalf of Board of Directors CHAIRMAN AND MANAGING DIRECTOR

---

Mar 31, 2010

The brand PNB commands respect and confidence in the eyes of public and shareholders today. PNB with its sound and strong fundamentals remained unscathed by the economic slowdown and global financial crisis of 2008-09. PNB, not only maintained its leading position among the Nationalized Banks in the above turbulent period, but is once again poised to excel in its business as the economy shows signs of improvement. The image and perception of PNB in the Government, industry and public is aptly reflected in the awards and accolades it has won for itself recently.

PNB was declared the “Best Public Sector Bank” by a survey conducted by The Financial Express and Ernst & Young. PNB was ranked 26th amongst India’s top 500 listed companies by “ET 500”. Globally, the “The Banker Magazine” (London) placed PNB at 239th position amongst the top 1000 Global Banks while Forbes’ ranking of 2000 global giants placed it at 695th position.

The Bank was conferred with the “Best Corporate Social Responsibility Practice” award by Bombay Stock Exchange. The Bank was also declared the winner of the Gold trophy of SCOPE Meritorious Award for Excellence in Corporate Governance 2009 by Standing Conference of Public Enterprises amongst the Public Sector Enterprises, a coveted award received by the Bank from the the hands of the Hon’ble President of India. The Bank also received the Golden Peacock Award for Excellence in Corporate governance for 2009 from the Institute of Directors. The ‘Dainik Bhaskar’ in association with ‘Daily News and Analysis’ presented PNB with India Pride Awards for excellence in PSU category in the year 2009, while Dun & Bradstreet Award for “Priority Sector Lending including Financial Inclusion” was also bagged by the Bank.

BUILDING STABLE BUSINESS

PNB is committed to build business through long term sustained relationships with its customers. PNB has been recognized as the Bank offering highest levels of customer satisfaction in Delhi and Chennai. Our customer base as of today stands at around 56 million which we aim to grow to 150 million by the year 2013. We are considered to be the Bank that cares about needs & ambitions of customers. We believe in partnering growth of our clients over generations which is properly reflected in our tagline “Bharose ka Prateek”. This approach to business is characteristic of PNB’s 116 year history of banking with growth.

RATIONALIZATION OF THE CIRCLE OFFICES

Bank’s 4 tier structure was reduced to 3 tiers to improve upon efficiency in decision making and to cut on administrative costs.

An opportunity was identified in rationalizing the administrative structure of the Bank, in the backdrop of economic downturn, to bring in more efficiency and team spirit in the overall work culture of the bank. The objectives for this rationalization accordingly aimed at decentralizing the decision making and reporting functions, better transient speeds and responses, higher transparency, effective monitoring, shared vision and reliance upon each other, easy accessibility and greater control. Rationalization of circles was done to remove the disparity in number of branches allocated among various circles. New circles were created in Delhi, Rajasthan, Kerala, Haryana, UP and Punjab. The number of Field General Managers (FGM) was also increased from 5 to 10 ensuring pan-India presence and control of FGMs. This new structure has been implemented w.e.f. 1st April, 2010.

PNB has the largest domestic network of 4997 offices, including 46 extension counters among Nationalized Banks. All our branches offer Core/Centralized Banking Solution (CBS) along with a variety of financial products catering to different market segments. PNB offers its customers a warm and friendly banking experience by serving them with a characteristic Indian emotional touch. This commitment showcases the intent of the bank to be closely involved in the lives of its customers. To facilitate our customers and to focus our deliverables uniquely to specific market segments, branches have been classified as Agriculture, Retail, MSME and Commercial/Corporate.

Today, PNB has both the strength and the capability to expand in the international arena but will go full throttle for this expansion only after it makes an excellent business case. Bank has international presence in 9 countries. Bank constantly innovates and reorients strategies, and realigns business processes with advanced technology to serve its customers better to earn strong brand loyalty and recall value.

Your Directors take pleasure in placing the Bank’s Annual Report for 2009-10 along with its audited annual financial statements.

OUR PERFORMANCE IN THE YEAR 2009-10

1. FINANCIAL HIGHLIGHTS

1(a) BALANCE SHEET

(Rs crore)

PARTICULARS 2009-10 yoy growth %

Capital & Reserves 17723 20.95

Total business 435931 19.61

Deposits 249330 18.86

Low cost Deposits (Savings and Current)101850 25.0

Advances 186601 20.6

Retail credit 19214 20.5

Priority Sector Credit 63769 25.5

-Percent of adjusted Net bank credit (ANBC) 40.55% (National goal - 40%)

Agricultural credit 30207 25.56

-Percent of adjusted Net bank credit (ANBC) 19.53% (National goal - 18%)

1(b) PROFIT

(Rs. crore)

PARTICULARS 2009-10 yoy growth %

Operating profit 7326 28.8

Provisions 3421 31.58

Net profit 3905 26.4

1(c) INCOME & EXPENDITURE

(Rs. crore)

PARTICULARS 2009-10 yoy growth %

Interest income 21467 12.2

- Interest/discount on advances/bills 16701 14.5

- Income on investments 4577 7.3 Non-interest income 3565 16.3 CEB 1682 22.2 Net Interest Income 8523 24.8 Total Income 25032 12.8 Interest expended 12944 5.3

- Interest paid on deposits 11966 3.5 Total Operating expenses 4762 13.2

- Establishment expenses 3121 6.7 Total Expenses 17706 7.3 Operating profit 7326 28.8 Provisions and contingencies 3421 31.6 Net profit 3905 26.4 Note: Difference in total is due to rounding off

1(d) KEY RATIOS

(per cent)

Particulars 2008-09 2009-10

Average cost of funds 5.51 4.75

Average yield on funds 8.43 7.89

Return on Equity 23.52 24.54

Net Interest Margin 3.52 3.57

Return on Assets 1.39 1.44

Cost to Income Ratio 42.50 39.39

Staff expenses to average Working Funds 1.29 1.15

Operating profit to average Working Funds 2.52 2.70

Earnings per share (Rs) 98.03 123.86

Book value per share (Rs) 416.74 514.77

Ratio of Net NPAs to Net advances * 0.17 0.53

NPA coverage ratio* 93.51 81.17

CRAR - Basel II 14.03 14.16

*Excluding Rs 338 Crore impact of slippage from Debt relief, Net NPA ratio and NPA coverage ratio in 2009-10 will be 0.35% and 86.80 %, respectively.

2) NON FINANCIAL-HIGHLIGHTS

- Customer centric business through Robust Technology platform.

- Continued to expand, adding over 500 branches and 1400 ATMs while improving internet and mobile banking capabilities.

- Expanding International forays to newer destinations like Australia and Canada in addition of international presence in 9 countries.

- Strong revenue growth across all client segments, geographies and products despite the challenging conditions during the stressed economic conditions.

- Created a competitive advantage through the efficient management of our capital and liquidity.

- Significantly strengthened our pool of management talent as part of succession planning exercise.

- Streamlined CSR activities in the Bank to move forward in a planned way in this direction.

3) DIVIDEND

The Board of Directors has recommended a dividend of 220 percent for the year 2009-10.

4) CORPORATE GOVERNANCE

The Bank stresses on implementing best practices in Corporate governance as we believe in following

- Full transparency in all our operations and policies which has earned us the customers’ trust over the years and our customers have stayed with us for generations which may seem unrealistic to many in these times of declining brand loyalty.

- Zero tolerance for any malpractices which has made the institution fundamentally stronger and has withstood many testing times.

- All our decisions are consensus decisions involving voice of our stakeholders. We take the opinions of our customers while deciding the roadmap and future directions of the Bank.

- The Bank being a financial intermediary has to undertake risks while managing assets and liabilities, making risk mitigation the most crucial aspect of our functioning. Towards understanding, measuring and managing various risks and ensuring a sustained growth of healthy asset portfolio, the bank has put in place a robust risk management system.

- The Bank is guided (to the extent possible/applicable) by the acclaimed OECD (Organization for Economic co-operation and Development) principles of corporate governance as far as responsibilities of the Board of Directors, governance infrastructure, rights of shareholders, equitable treatment of shareholders, role of shareholders in governance and disclosures and transparency are concerned.

- The Bank has a strong and committed Board of Directors with specialists from various fields; a robust risk management framework; audit committee including Management audit committee, etc. The Bank is a listed entity and ensures that the Shareholders are satisfied with Bank’s performance and are kept well informed about the performance of the Bank. The Bank has a consistent track record of paying dividends.

- The Bank ensures ‘disclosure & transparency’ in financial statements as per section 29 of Banking Regulation Act, 1949; RBI guidelines; section 49 of the Listing Agreement; Accounting Standards and Guidelines issued by the Institute of Chartered Accountants of India, etc. Disclosures as per RBI guidelines & ICAI Accounting Standards (AS) include Segment reporting, Related Party Disclosures, Lending to sensitive sectors, Loan assets restructured, ALM, Key Business Ratios and Performance of bank’s share price vis-à-vis NIFTY/ Bank index. In addition to the statutory disclosures, the Bank discloses voluntarily additional information by way of Directors’ Report about the bank’s overall performance, business strategies, products & services, Risk Management etc.

The Bank gives high priority to good Corporate Governance. ICRA Ltd, the rating Agency has reaffirmed the CGR 2 rating (on a rating scale of CGR1 to CGR 6, where CGR 1 denotes the highest rating) to the Bank in February 2010, which reflects that PNB has adopted and follows such practices, conventions and codes as would provide its financial stake holders a high level of assurance on the quality of Corporate Governance. This is the highest rating assigned to a financial institution in India.

The Bank has complied with the guidelines of Reserve Bank of India and SEBI on the matters relating to Corporate Governance, which has been examined by the Statutory Central Auditors.

5) CHANGES IN BOARD OF DIRECTORS

During the year 2009-10, the following changes took place in the composition of Board of Directors.

- Dr. K.C. Chakrabarty, CMD demitted the office on 15.06.2009 on his elevation as Dy. Governor of RBI.

- Shri M.L. Bagga, Director representing Workmen Employee ceased to be Director on 25.09.2009.

- Shri K.R. Kamath took over as Chairman & Managing Director of the Bank on 28.10.2009.

- Shri S.R. Khurana, Director representing CA Category ceased to be Director on 2.01.2010.

- Shri M.P. Singh, Director representing Workmen Employee was appointed on the Board of the Bank by Govt. of India under clause 9(3)(e) of Banking Companies Acquisition and Transfer of Undertakings Act w.e.f. 28.01.2010.

- Shri Pardeep Kumar, Director representing Officer Employee was appointed on the Board of the Bank by Govt. of India under clause 9(3)(f) of Banking Companies Acquisition and Transfer of Undertakings Act w.e.f. 15.02.2010.

BOARD COMMITTEES:

(As on 31.03.2010)

S. No. NAME OF THE COMMITTEE

1. Management Committee

2. Audit Committee of Board

3. Risk Management Committee

4. Share Transfer Committee

5. Shareholders’ /Investors’ Grievance Committee

6. Customer Service Committee

7. I.T. Committee

8. PA Committee

9. Director’s Promotion Committee

10. Appellate Authority and Reviewing Authority

11. Special Committee of Board to monitor and follow up fraud cases involving Rs.1.00 Cr. and above.

12. Committee of Directors to Review Vigilance and Non Vigilance cases

13. HRD Committee of Directors

14. Remuneration Committee

15. Nomination Committee

16. Steering Committee for Vision 2013

The details of various meetings held up to March, 2010:

S. Meeting Number of S. Meeting Number of No. Meetings No. Meetings Held Upto Held Upto March, 2010 March, 2010

1 Board Meeting 14 9 HRD Committee 1

2 Management 23 10 Remuneration 1 Committee Committee

3 Committee of 4 11 Customer Service 4 Directors to review Committee vigilance & non- vigilance cases

4 Audit Committee 14 12 Share Transfer 24 of Board Committee

5 Risk Management 5 13 Shareholders’/ Investors’ 6 Committee Grievances Committee

6 Special Committee of 5 14 Directors Promotion Board to Monitor and Committee 1 Follow Fraud cases of Rs. 1.00 crore and above

7 IT Committee of the 4 15 Steering Committee 3 Board Vision 2013

8 P.A. Committee 4

The Board welcomes new CMD, Shri K R Kamath and other new Directors and places on record the valuable services rendered by former CMD, Dr. K.C. Chakrabarty and Directors, Shri M.L. Bagga and Shri S.R. Khurana.

6) ACKNOWLEDGMENTS

The Board of Directors thank the Government of India, Reserve Bank of India, Securities and Exchange Board of India, Stock Exchanges, Bank’s customers, public and the shareholders for valuable support, continued patronage and confidence reposed in the bank.

The Board also wishes to place on record its appreciation for the valuable contribution of the members of the Bank’s staff at all levels and look forward to their continued enthusiasm in meeting the future goals set in “VISION 2013”.

For and on behalf of Board of Directors CHAIRMAN AND MANAGING DIRECTOR