Punjab National Bank has started shifting most of its the borrowal accounts above Rs 50 crore to over 60 branches across the country, which are being turned into Systemically Important Branches (SIBs), the bank said Wednesday. The bank said it has embarked upon a credit restructuring exercise that will ensure that large accounts and lending operations are concentrated in a few specially designated branches.
“Creation of these branches will not only mean better servicing of these accounts but will also ensure better checks and balances over large accounts. The bank is in the process of shifting most of the large accounts to SIBs,” the bank said. Apart from these SIBs, most of the bigger accounts will be operated from branches designated as Large Corporate Branches (LCBs) while regular branches will concentrate on regular accounts.
The state-owned lender started rejigging its branch operations and is in recovery mode after it was hit by a loan scandal over Rs 14,000 crore in February which originated in a single mid-corporate Brady House branch. The bank will designate two to three branches as SIBs in metropolitan cities depending upon geographical convenience.
The bank said it has no plans to close operations in branches like the Brady House branch. “Reallocation of some of the accounts is part of the restructuring process aimed at centralization of critical functions and large corporate accounts. Retail operations for PNB customers continue to operate from the branches like Brady House,” it said.
PNB posted a net loss of Rs 13,416.91 crore for the January-March quarter, the biggest ever by any domestic lender.