While most assumed that Punjab National Bank (PNB) would be put under prompt corrective action (PCA) by the Reserve Bank of India for their net losses and non-performing assets, the RBI decided otherwise. Just a few days back, the RBI announced that they would give PNB another quarter to show improvements despite the bank reporting the biggest losses for Q4 of FY 2017-2018 amongst other public sector banks.
According to a report by Economic Times, the Reserve Bank of India has given PNB time till the end of Q1 of FY 2018-2019, to recover their losses from non-performing assets. Given a lifeline by the RBI, PNB announced that they would aim at recovering bad loans amounting to Rs.20,000 crore in the first half of the financial year. A bank executive of PNB said that in the first two months of FY 2018-2019, they have managed to recover Rs.5,600 crore. A little more than half way there, the bank executive of PNB added by saying that their target is to recover Rs.8,000 crore by the end of Q1 of FY 2018-2019.
Attributed to the Nirav Modi-Mehul Choksi loan fraud, Punjab National Bank recorded its biggest quarterly loss in Q4 of FY 2017-2018.. Though the bank ended Q4 of FY 2016-2017 on a positive note with a profit of Rs.1,324.8 crore, due to the loan fraud, PNB ended FY 2017-2018 with a net loss amounting to Rs.12,283 crore.