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Punjab National Bank (PNB) is aiming to recover 32,000 crore worth of bad loans this fiscal, according to managing director and chief executive Kumar Goel. The public sector bank is also looking to reduce its net non-performing assets (NPA) ratio as a percentage of total assets to 3.5% by March-end, from 4.28% at the end of the June quarter.

“There was 7,000 crore worth of recovery in Q1. During the remaining financial year, there will be recovery worth 8,000-9,000 crore during every quarter. There will be more addition than recovery at every quarter," Goel said at a news conference to discuss the bank’s June quarter earnings.

To achieve its loan recovery target, PNB has formed a team of about 300 officials who will be monitoring all NPA accounts. It is attempting to boost bad loan recoveries and is monitoring all accounts including those on which Sarfaesi or National Company Law Tribunal (NCLT) proceedings are underway, Goel said.

The bank’s net NPAs fell to 4.28% in the June quarter from 5.84% a year earlier and 4.8% in the March quarter. In absolute terms, net NPAs declined to 31,744 crore as of June-end, from 38,581 crore a year earlier. Gross NPAs reduced to 11.27% at the end of the June quarter from 14.33% a year ago. Gross NPAs, in absolute terms, stood at 90,167 crore on 30 June compared to 1.04 trillion a year earlier.

PNB is also looking to transfer 2,486 crore of bad loans to the National Asset Reconstruction Company Ltd. All banks are expected to transfer bad loans worth 50,000 crore to NARCL by September, said Goel, who is also chairman of the Indian Banks Association.

In the June quarter, PNB posted a 70% drop in net profit to 308 crore due to higher provisioning for bad loans and impact on treasury income. It incurred market to mark-to-market (MTM) losses of 1,409 crore in Q1, compared to a reversal of MTM of about 301 crore a year ago. While PNB lagged its peers in both credit and deposit growth in the quarter, it is aiming for a credit growth of 10-11% this fiscal, led by retail assets.

Goel also clarified that the bank has no plan to sell stake in PNB Housing Finance and would instead invest 500 crore in the rights issue of the housing finance subsidiary to meet regulatory norms. The norms stipulate that PNB has to maintain its stake in PNB Housing at more than l26% but less than 30%.

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