Punjab National Bank (PNB), India's second largest public sector lender, is targeting a $2.5 billion mop-up from Foreign Currency Non-Resident Bank (FCNR(B)) deposits and has raked in $425 million so far, according to Managing Director Ashok Chandra.
FCNR(B) Fundraising Target and Progress
The FCNR(B) scheme aims at attracting foreign funds, backed by incentives. "We are getting major traction from the UK, Dubai and GIFT City. The demand is quite good," Chandra told TOI. The bank has already raised $425 million towards its $2.5 billion target.
Demand Traction and Profit Growth
PNB reported a three-fold jump in first-quarter profits. Chandra is hopeful of the momentum sustaining, with deposit and credit growth being on track. The state-owned lender is seeing sustained demand in its strongholds of north and north-western India, though the disbursement cycle is seeing a marked shift from June to July, as the monsoon sees a delayed onset year after year.
"As of now, there is no stress visible (on our books). If the monsoon doesn't recover in the coming two months, in the long-run there may be some impact. Agriculture is still a mainstay for large number of people; hence some sign of stress might start coming in Q3 (Oct-Dec)." - Ashok Chandra, MD, PNB
Monsoon Risk and Agricultural Impact
Government data showed that sowing of kharif crops like rice, pulses, oilseeds and cotton is down 16% to 53.1 million hectares (mha) as of July 10 due to deficient rains. Chandra said he keeps close tabs on the monsoon, which has so far not had any impact on the bank.
Digitalization and Geographic Expansion
The bank is pushing for digitalisation, with every second loan being disbursed through online channels. PNB is also looking to make forays into the southern states.
| Metric | Value |
|---|---|
| FCNR(B) Target | $2.5 billion |
| Raised So Far | $425 million |
| Q1 Profit Growth | Three-fold |
| Kharif Sowing (as of July 10) | 53.1 mha (down 16% YoY) |
The FCNR(B) inflows bolster PNB's foreign currency deposit base, supporting its lending operations and balance sheet strength as the bank navigates monsoon-related agricultural risks.
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