Fraud-hit PNB targets over 10% growth in FY19 to $180 billion, outlines steps to prevent frauds
will split the process of credit underwriting into four divisions with different employees focused on sourcing, appraisal, process and underwriting, documentation and disbursement, and recovery
New Delhi: Fraud-hit lender Punjab National Bank (PNB) said on Sunday it aimed to expand its total business 10.8 percent to 12 trillion rupees ($180 billion) in the year to March 2019 and outlined steps to prevent more such frauds.
The second-largest state-run bank in February disclosed that two jewellery groups had defrauded it of more than $2 billion by raising credit from overseas branches of other Indian banks using illegal guarantees issued by rogue PNB staff at a Mumbai branch over several years.
While investigation continues into what has been called the biggest fraud in India’s banking history, PNB said after a board meeting that it had strengthened the process of underwriting credit to minimise the possibility of fraud.
The New Delhi-headquartered bank will split the process of credit underwriting into four divisions with different employees focused on sourcing, appraisal, process and underwriting, documentation and disbursement, and recovery, it said in a statement.
The bank will also rely more on an off-site monitoring mechanism and reduce its dependence on physical inspection and audit to identify risks, it added.
PNB has constituted a specialised stressed-assets management vertical for early identification of bad loans, the bank said.
India’s banks, already burdened by a 9.5 trillion-rupee soured-loan mountain as of last year, are staring at a further rise in bad loans after the central bank tightened rules earlier this year.
Subscribe to Moneycontrol Pro at ₹499 for the first year. Use code PRO499. Limited period offer. *T&C apply
ICRA principal economist Aditi Nayar said a deeper disinflation in primary food articles helped to cushion the impact of the sharp rise in core inflation, which reached a 27-month high of 5.1 percent in January
The board, in its meeting, reviewed various areas of operations of the RBI, including ways to strengthen grievance redressal mechanisms in banks
The RBI governor said: 'We have certain major concerns about cryptocurrencies. We have communicated them to the government. It is under consideration in the government and I do expect and I think sooner or later the government will take a call and if required Parliament also will consider and decide'