PNB to sell Rs 5,000 crore NPAs to ARCs; targets 50% minimum recovery in FY'26

New Delhi: Punjab National Bank (PNB), the country’s second-largest public sector lender, has identified over 100 non-performing asset (NPA) accounts worth Rs 4,000– Rs 5,000 crore for sale to asset reconstruction companies (ARCs) in the current financial year, with a targeted minimum recovery rate of 40–50 percent.

PSU Watch is now on Whatsapp Channels. Click here to join

Speaking to PTI, PNB Managing Director and CEO Ashok Chandra said the bank is optimistic about its recovery drive, with some accounts potentially yielding full recovery due to strong security cover. “We expect to recover something in the range of 40–50 percent minimum… through that route also, we are expecting a good recovery should happen this financial year,” Chandra said.

Business milestone in sight

PNB is also aiming to touch Rs 30 lakh crore in total business by March 2026, surpassing its current target of Rs 29.56 lakh crore. As of June 30, 2025, the bank’s total business stood at Rs 27.19 lakh crore, up 11.6 percent year-on-year, closely trailing Bank of Baroda and Canara Bank.

“We are very mindful that whatever top line we are going to build, it should add profit to my bank,” Chandra said, adding that PNB posted its highest-ever quarterly operating profit of Rs 7,081 crore in Q1 FY26.

Growth strategy and sector focus

To meet its business goals, the bank has set a credit growth target of 11–12 percent and deposit growth of 9–10 percent for FY26. Its corporate loan pipeline stands at Rs 1.29 lakh crore, with disbursements at various stages. Chandra emphasised that PNB has shifted away from low-yielding corporate loans and bulk deposits to focus on profitability.

The lender is aiming for double-digit growth in the corporate loan segment from Q2 onwards and has committed to making lending decisions within 15 days to build confidence among corporate borrowers. A dedicated project finance cell headed by a General Manager has been created to boost funding for infrastructure and large projects.

Retail, MSME, and agriculture push

PNB has recorded 17–18 percent growth in the MSME segment and expects this trend to continue. Core retail loans, including housing, vehicle, and education finance, are projected to grow by 17 percent in FY'26. The bank is also betting on a 30–40 percent expansion in its self-help group lending portfolio, which supports small and marginal farmers and qualifies for priority sector lending.

Additionally, the bank is focusing on the food processing sector and rural infrastructure facilities such as godowns and cold storage. Regular loan outreach programmes are being organised for MSME and agriculture sectors to stimulate credit growth.

(PSU Watch– India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy is now on Google News. Click here to follow. Also, join PSU Watch Channel in your Telegram. You may also follow us on Twitter here and stay updated.)