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PUNJAB NATIONAL BANK

30 November 2021 | 10:44

Industry >> Finance - Banks - Public Sector

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ISIN No INE160A01022 52Week High 48 Book Value (Rs.) 79.13 Face Value 2.00
Bookclosure 26/07/2021 52Week Low 31 EPS 2.33 P/E 16.48
Market Cap. 42227.24 Cr. P/BV 0.48 Div Yield (%) 0.00 Market Lot 1.00
Security Type Other

DIRECTOR'S REPORT

You can view full text of the latest Director's Report for the company.
Year End :2021-03 

During the Financial Year (FY) 2020-21, Punjab National Bank (PNB) continued its journey towards excellence backed by its inherent strengths and 126 years of banking experience. The global economic outlook was shrouded with uncertainty in view of the new waves of infections and mutant strains of COVID-19. The Indian economy, after having regained positive growth, faced renewed challenges on account of the second wave of the pandemic. Despite the unprecedented situation, Bank continuously rendered banking services to its customers and continuously reinvented itself to adapt to the new emerging landscape. The highlights of the performance during the financial year are strengthened organization structure, profitability and the improved capital position. The revamped organizational structure, along with the verticalized, customer centric & digital credit delivery model has improved credit underwriting, efficiency and turnaround time (TAT). Having completed Business, Human Resource and Information Technology (IT) integration under amalgamation, Bank's endeavor is to provide greater thrust towards improving business.

During the year, PNB was one of the first among amalgamated Public Sector Banks (PSBs) to carry out CBS migration of the eOBC and eUBI without affecting customer services. While the synergies out of amalgamation are being realized, Bank under took various new initiatives to transform and align with the changing financial environment and customer needs.

As at the end of March, 2021, Bank's Gross Global Business stood at Rs. 18,45,739 Crore with Gross Global Advances at Rs. 7,39,407 Crore and Gross Global Deposit at Rs. 11,06,332 Crore. Current and Saving Deposits (CASA) was at Rs. 4,92,782 Crore with domestic CASA share at 45.5 per cent. In addition, Bank's Operating Profit was at Rs. 22,980 Crore with the Net Profit of Rs. 2022 Crore for the FY 2020-21. As at the end of 31st March, 2021, Gross Non Performing Assets (GNPA) ratio stood at 14.12 per cent and Net NPA ratio was at 5.73 per cent. While Global Net Interest Margin (NIM) was at 2.88 per cent in FY21, Capital to Risk Weighted Assets ratio (CRAR) was comfortable at 14.32 per cent.

Bank’s manifold achievements have been acknowledged at diverse prestigious national and international platforms. Among other accolades, your Bank was adjudged as the “Most Innovative Public Sector Bank of the year” in the ET-BFSI Excellence awards 2020. PNB was Joint runner-up in the IBA Banking technology Awards 2019-20 and received awards under categories of ‘Best Digital Financial Inclusion Initiatives’ and ‘Best IT Risk & Cyber Security initiatives’. Bank also secured overall 4th Place among all PSBs in Enhanced Access & Service Excellence (EASE) 2.0 index and got highest number of awards amongst all PSU Banks in different themes.

"Against this backdrop, your Directors have pleasure in presenting the Annual Report of your Bank for the year ended 31st March, 2021 (FY 2020-21) along with its audited Annual Financial Statements".

OUR PERFORMANCE A. FINANCIAL PERFORMANCE Assets and Liabilities

Total Assets of the Bank was at Rs. 12,60,633 Crore as at 31st March, 2021. While the Net Advances stood at Rs. 6,74,230 Crore, Investment was at Rs. 3,92,983 Crore.

On the Liabilities side, Deposits stood at Rs. 11,06,332 Crore while the Borrowings was at Rs 42,840 Crore as on 31st March, 2021.

Net Interest Income

The Net Interest Income of your Bank stood at Rs. 30,477 Crore during FY 2020-21. While Interest Income stood at Rs. 80,750 Crore, Interest Expenses was at Rs. 50,273 Crore.

Operating Profit

Operating Profit of your Bank during the FY 2020-21 stood at Rs. 22,980 Crore. While the total Income stood at Rs.93,562 Crore during FY 2020-21, total Expenses was Rs. 70,582 Crore in FY 2020-21.

Net Profit

Bank has earned a Net Profit of Rs. 2022 Crore in FY 2020-21.

Provisions and Contingencies

Total provisions made during FY 2020-21 were at Rs. 20,959 Crore with Provision for NPA at Rs 17,060 Crore. Provision Coverage Ratio (incl. TWO) of the Bank was at a robust 80.14 per cent as at 31st March, 2021 and PCR without TWO was at 63.06 percent.

B. OPERATIONAL HIGHLIGHTS

Some of the operational highlights of the Bank during FY 2020-21 are listed below:

Financial

• Bank's Global Business reached the mark of Rs.18,45,739 Crore in 31st March, 2021, which was second highest amount among Public Sector Banks (PSBs).

• CASA Deposits at Rs. 4,92,782 Crore also remained second highest amongst PSBs with 45.5 per cent share in Domestic Deposits.

• Savings Deposit grew to Rs. 4,17,236 Crore as on March' 21. Retail Term Deposit was at Rs. 5,05,975 Crore as on 31st March'21.

• Core Retail Loans stood at Rs. 1,13,047 Crore as on 31st March'21. MSME loan grew to Rs. 1,25,966 Crore in March'21.

• Cost to Income Ratio improved to 46.91 per cent in FY21.

Capital

The capital adequacy of the Bank improved during the financial year on account of capital raising by the Bank coupled with improved profitability. During FY 2020-21, Bank has raised equity of Rs. 3,788 Crore through QIP, Rs. 3,994 Crore through Tier -II Bonds and Rs 495 Crore through AT-1 Bonds. Further, Bank has also raised equity of Rs. 1800 Crore through QIP on 15th May, 2021. The Bank continued with its focus on sustainable business growth by targeting better rated borrowers with low risk profile. Going forward, the Bank is strategically well placed to meet the growing credit needs of the economy.

Key Highlights

• The Capital Adequacy ratio of the Bank stood at 14.32 per cent, as of 31st March, 2021, with Tier-1 capital at 11.50 per cent and Common Equity Tier-1 (CET-1) at 10.62 percent, with raising of Rs. 3,788 Crore through QIP.

• Bank raised Tier-II Bonds of Rs.3,994 Crore during the year and Tier II capital stood at 2.82 per cent as on 31st March, 2021.

• The Credit Risk Weighted Assets (RWA) of the Bank were optimized to Rs. 4,90,310 Crore in March 2021 on account of focus on better rated accounts and churning of portfolio of the Bank.

Synergies under Amalgamation

i) Harmonisation of all products and processes:

All the products, policies and processes across PNB, erstwhile Oriental Bank of Commerce (eOBC) and United Bank of India (eUNI) have been harmonized and the best products and policies across the three banks have been adopted taking into account customer and employee needs along with the business interests and communicated to its employees and customers. Change in Rate of Interest and Service charges, wherever affected for the Amalgamated Bank were communicated to all the customers well before time.

ii) Integration of the payment systems: Integration of all major payment systems like Core banking Solution (CBS), Automated Teller Machine (ATM) switch, Debit Card Management, Internet Banking, Mobile Banking, Unified payment Interface (UPI), National Electronic fund Transfer (NEFT)/ Real Time gross Settlement (RTGS) interface, Immediate Payment Service (IMPS) switch, Public Financial Management System (PFMS) Module, SWIFT Module has been successfully completed. Migration of ATMs, BNAs of eOBC & eUNI to PNB Network has also been completed.

iii) Data integration / migration of all other applications: Integration of all major applications/ systems and networking has been successfully completed. Bank is in process of migration of identified surround applications in amalgamated entity.

iv) Human Resource (HR) Integration: The

amalgamation of eOBC and eUNI into PNB has completed one year. During the course of this year, the Bank has reviewed and harmonized all of its staff welfare and benefit schemes based on the “Best of three” principle and aligned HR with the business strategy of the Bank to boost performance and enhance the satisfaction of the employees. Bank has started to realize the expected HR synergies by way of reduction in recruitments.

v) Other Synergies from amalgamation: Bank has identified different operating segments like Branch/ ATM rationalization, Redeployment of staff to sales, Sale of identified premises, Savings in IT cost arising due to harmonized processes etc. for synergy benefits. Bank has initiated implementation for realization of synergy in the identified areas.

Major Initiatives:

Revamping of Organizational Structure: Bank has revamped its organization structure along with formation of various business verticals for efficient credit delivery, improved credit underwriting and Turnaround Time (TAT). Rollout of the revamped structure has been made with effect from 1st July, 2020 with the three Banks functioning as a single unit. While the layering structure continue to be four tiered involving Branch, Circle, Zone and Head Office, some new verticals have also been formed. The revamped structure of Bank is segmented into:

• Business/Support/Control Verticals at Head Office

• Zonal Offices

• Zonal Audit Offices

• Circle Offices

• General Banking Branches, PNB Loan Points(PLPs),

Mid Corporate Centre (MCC), Large Corporate Branches (LCB) / Extra Large Corporate Branches (e-LCB)

Verticalized Credit Delivery Model under new Organizational Structure: Credit Underwriting Model has been revamped to improve efficiency and TAT:

Type of Vertical

Definition

Extra Large Corporate Branches/ Large Corporate Branches (ELCB/LCB)

Complete Branch, specifically designed to handle Corporate Credit Accounts above Rs. 50 Crore (ELCBs to handle above Rs. 500 Crore).

113 Mid Corporate Centers (MCC)

Processing Centers for Credit, handling PreSanction Appraisal and Post Sanction Monitoring of Corporate, Agriculture & MSME Accounts above Rs. 1 Crore and upto Rs. 50 Crore.

135 PNB Loan Point (RAM/iRAM)

Processing Centers for Credit, handling Pre-Sanction Appraisal of Retail, Corporate MSME & Agriculture Accounts above Rs. 10 Lakh and upto Rs. 1 Crore.

Bank has revamped Business/Support vertical as under:

Vertical

Catering Segment

Recovery, Resolution, NCLT & Legal Centre (SASTRA)

Improve efficiency and reduce TAT in Recovery actions

24 Zonal Risk Management Centre (ZRMC)

Risk Analysis (Rating & Operations Risk)-Independent risk vertical to segregate and strengthen Risk Assessment processes (approval of rating upto Rs. 10 Crore).

CASA Back Office

Account Opening

Government Business Vertical (GBV)

Acquiring of Government Business

Customer Acquisition Centre (CAC)

Acquiring of Institutional Business - Focuses on liabilities business from Corporates, Institutions, HNIs, and NRIs

Trade Finance Centre (TFC)

International Trade Finance & Outward Remittance

a) Cultural Integration: Cultural integration and managing cultural differences are major challenges in achieving the progressive synergies in amalgamation of the organizations. Post amalgamation the Bank is committed towards nurturing work environment and smooth integration of culture of all three banks in PNB 2.0. In view of the same, Bank initiated Cultural Integration Program. Main purpose behind the Cultural Integration plan is to align the strategic shifts of the amalgamated entity with employee's expectations, which will further help in realizing synergy benefits. In Cultural Integration process the bank has included each layer of the organization so that Bank's culture can be derived as per the employee's aspirations.

b) Technological Initiatives in HR: Bank has successfully integrated its Human Resources Management System (HRMS) for enhancing ease of access & extending guidance to its rich talent pool of 1,00,000 employees. During the year, Bank has implemented its digital Performance Management System (PMS) for officers of the amalgamated entity for better planning, monitoring & evaluating the performance to unlock their potential and improve their efficiency and effectiveness.

c) Learning & Development: Bank has always believed that learning and development plays an important role in shaping and transforming the human capital. Agility of the human capital in learning, unlearning and relearning plays a decisive role in any organization's success. In view of the Covid-19 pandemic, Bank has changed the workplace learning and has shifted from classroom trainings and imparted training

through virtual mode by converting existing classroom material into robust rapid e-learning solutions having unmatched speed, scale and quality.

d) Career Progression: Bank expedited the promotion exercise and completed the process for FY 2021-22 before March 2021 to ensure uninterrupted Banking operations. Furthermore, the Bank is continuously updating its policies to keep up with the aspirations of its employees and attuning it with the business needs of the Bank. During the year, the Bank has updated various HR policies such as Promotion Policy, Transfer Policy, Training Policy, and Overseas Placement Policy etc.

e) Covid-19 induced initiatives: Bank has taken number of initiatives like extending Work from Home (WFH) facility, introduced the facility of special leave, one time compensation in case of death due to Covid-19 etc to support its employees.

f) PNB Lens: Bank has launched an IT based solution for loan management christened as PNB LenS- the Lending Solution. This system is being implemented in phased manner for all kind of loans (MSME, Agriculture, and Retail & Other Credit). The objective is to speed up and maintain consistency in underwriting standards in loan processing and sanctioning of credit proposals.

g) Surveys and Feedback from field: The bank has initiated steps to capture feedback/suggestions, through survey, to get a better understanding of employee's honest feedback on impact of changes in products & processes made by the Bank post amalgamation. On the basis of outcomes of the employee's survey, necessary modification have been incorporated in the processes.

Other Key New Initiatives Undertaken:

? Gram Sampark Abhiyan - (Launched on 2nd October 2020): 11 Lakh customers were contacted in around 29973 camps with increased credit facilities, digital on boarding and enrolment for social security.

? To accelerate the growth of forex business, Bank launched Trade Finance Redefined Portal. Fx-Retail portal is also being popularized for direct access to Interbank market.

? Fintech Initiative: PNB joined hands with IIT Kanpur to set up Fintech Innovation Centre to conduct research and develop technological solutions for addressing the challenges & explore opportunities in BFSI gamut.

? Digital Apnayen Campaign- Launched on 15th August 2020, more than 83 Lakh customers on-boarded on digital channels. Rs 4.20 Crore donated to PM CARES Fund on behalf of customers for Digital On-boarding since launch on 15th August 2020.

? PNB Cards & Services: A Wholly owned subsidiary of the bank namely, PNB Cards & Services has been incorporated to undertake the non financial support related to credit card business of the bank.

ASSET QUALITY

Despite Covid-19 scenario during most of the period (during FY 20-21), Bank is able to maintain Gross NPA at the level of Rs. 1,04,423 Crore as on 31st March 2021. Focus on asset quality continues to be one of the top priorities for the Bank. Provision Coverage Ratio (PCR) continues to satisfactory level of 80.14 per cent as on 31st March 2021.

Cash Recoveries

Total Cash Recovery for the FY 20-21 have been Rs. 11,442 Crore.

• Upgradation

Upgradation for FY 20-21 have been Rs. 2,363 Crore.

• Upgradation Through Resolution Mechanism

The Resolution Cell was created to exclusively deal with Restructuring/Resolution of NPA accounts and recovery in National Company Law Tribunal (NCLT) cases. The details regarding the same are as under:

(Amount in Rs. Crore)

Restructured Accounts

Total Sanctioned

No. of A/c's

Amount

FY 2020-21

4

3119

Further, a sum of Rs 4,220 Crore was recovered in NPA accounts under IBC in NCLT.

• Mega E-auctions

During FY 20-21, 10,370 properties were uploaded on e-Bikray portal. Out of which 1052 Immovable Properties (IPs) were auctioned successfully with success rate of 10.14 per cent.

• Sale of Assets to Asset Reconstruction Company (ARC)

Details of financial assets sold to Securitization/ Reconstruction Company (SC/RC) for Asset Reconstruction is as under:

(Amount in Rs. Crore)

Items

FY 2020-21

i.

No. of Accounts sold to ARCs

1

ii.

Book Outstanding of Accounts Sold

18.31

iii.

Aggregate consideration received (100 per cent cash)

11.01

• Initiatives taken to Improve Asset Quality during FY 2020-21

In order to support recovery efforts of field functionaries, a common recovery portal i.e. SASTRA Portal has been rolled out which is having 5 different modules like One Time Settlement (OTS), Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI), Debts Recovery Tribunals (DRT), National Company Law Tribunal (NCLT) & Wilful Defaulter. Through this common recovery portal, status of major recovery actions of a Borrower can be ascertained at a single place. OTS Module provides an automated platform for online processing of settlement proposals. For effective monitoring, standalone DRT and SARFAESI Portals have been re-configured as separate modules in the SASTRA Portal. All the NCLT cases are being monitored through NCLT Module which captures the latest status of each case. Wilful defaulter database of the Bank has been loaded through a separate module.

Further, for effective monitoring and follow-up of NPA Accounts, PNB Pride App was also rolled out in all the SASTRA Centres and Branches. This Geo Tagging enabled App helps in recording of field functionaries visit details and captures visit location of the visiting Officials.

Exclusive Vertical for recovery of NPA Accounts - As part of the Organizational restructuring, a separate vertical called SASTRA Vertical has been created for exclusive & focussed recovery operations. The Vertical operates with officers posted at different levels in the field who are exclusively working for recovery.

Special OTS Scheme - During the year the Bank has put more focus on accounts with outstanding up to Rs.5.00 Crore which constitutes the largest segment of the NPA Portfolio. For more recovery, the Bank has launched special OTS Scheme for this segment. The scheme is of Check box model - non-discriminatory and non-discretionary. More powers have been delegated at the field level for speedy & transparent one-time settlement in this segment. During FY 20-21,54,134 NPA accounts with O/S of Rs.1,346 Crores were resolved under the scheme.

D. INFORMATION TECHNOLOGY (IT) AND DIGITALIZATION

IT Amalgamation:

In a bid to create "NextGen Banks" with strong national presence and global reach, on 30th August, 2019, Honorable Finance Minister announced amalgamation of ten public sector banks into four. It was announced to amalgamate Oriental Bank of Commerce and United Bank of India with Punjab National Bank as anchor bank to give birth to India's second largest public sector bank with effect from 1st April, 2020.

This was also the year when the whole world was hit by Covid-19 and the lockdown that ensued.

Initial four to five months of FY 2020-21, Bank was working with lesser number of staff onsite, considering COVID guidelines. Vendors were working offsite. Challenges were abound. But Bank was sure of overcoming it.

Following activities were completed on Day 0 i.e. 1st of April, 2020:

• Scheme codes, interest rates and charges were harmonized in all individual CBSs (Finacle 10 of PNB1.0, Finacle 7 of eOBC/eUNI).

• Enabled 14 interoperable services across all the branches of all the three banks for ensuring uniform standard basic critical services for the customers.

• A common landing page for Internet & Mobile Banking was built with an option to select & navigate to respective banks. Individual links got disabled.

Bank not only had smooth technology amalgamation but also it was the first among amalgamated PSBs to carry out CBS migration of the other two entities without affecting customer services. The whole program was executed by bank with its partners without hiccups. Further 196 surround applications were also made live for amalgamated entity during the financial year.

Other initiatives implemented during the FY 2020-21 are as follows:

a) PNB One and IBS in Regional Languages: PNB

One and IBS is now available in 9 languages:-Hindi, English, Tamil, Gujarati, Punjabi, Marathi, Bengali, Telugu and Malayalam.

b) Online Overdraft (OD) Against Fixed Deposit (FD): Customer can now avail the facility of Overdraft against Fixed Deposits using Mobile Banking application.

c) Auto Linking of Public Provident Funds (PPF) and Sukanya Samriddhi Accounts (SSY) Accounts: The PPF & SSY Accounts are auto-linked to Internet Banking Services (IBS) and Mobile Banking Services (MBS) on creation in GBM.

d) Implementation of Insurance Module in IBS Retail: Insurance products have been made available for Customers through Internet Banking Retail from following Insurance Providers for Life, Non-Life and General Insurance respectively:

• PNB MetLife

• Bajaj Allianz General Insurance Company Ltd

• Canara HSBC Oriental Bank of Commerce Life Insurance

e) Bharat Bill Payment System (BBPS) in Internet Banking: BBPS is now available on PNB Internet Banking Retail post login. It is featured with new functionalities of:

• Bill Payment

• Standing instructions

• Redo Last 10 Transactions

• Register Complaint

• Track Complaint

f) One Time Password (OTP) as Second Factor Authentication in Mobile Banking: OTP has been added as second factor of authentication in addition to transaction password for transactions through Mobile Banking.

g) Facility to update Limits of Debit cards through PNB One, the mobile banking app: Customization have been made in PNB One for providing the facility to customers for Debit Card Personalization, enabling them to update/ change Transaction Limit of their Debit cards for various channels viz ATM, POS, ECOM & Contactless separately. Further, Transaction Limits for Card enabled for International Transactions can also be updated/ modified.

h) Instant Demat Account Opening through IBS Retail: Facility of opening of Demat Account Instantly from NSDL has been provided to Internet Banking Retail customers.

i) Submission of Form 15G/15H using Internet Banking: Facility has been provided to Internet Banking Retail Customers for submission of Form 15G/15H using Internet Banking Retail.

j) Cardless Cash Withdrawal through ATM: In this functionality, customer is provided with an interface in IBS/MBS (presently live for PNBONE and in Closed User group (CUG) for IBS) for entering amount and also to set four digit TPIN (Transaction PIN) manually for cardless cash withdrawal facility. After doing the same, a reference number will be sent to customer's registered mobile number, which will remain valid for 2 hours. Customer can withdraw the entered amount from any PNB ATM within 2 hours. Transaction will be validated by TPIN and reference number. Daily withdrawal limit with this facility is Rs. 10,000.

k) OTP Based Cash Withdrawal at Night: Bank has implemented additional security feature i.e. OTP based cash withdrawal at night for transactions done between 08:00PM to 08:00AM if amount is greater than Rs. 10,000/- for a single transaction. Customer has to use OTP, which is sent on his registered mobile number as an additional factor of authentication along with ATM PIN. This functionality is applicable for fast cash transactions also. The functionality is available for ONUS transactions only.

l) Monetary relief under Pradhan Mantri Garib Kalyan Yojna (PMGKY): Customization & Implementation of new Process for distribution of funds to 1.24 Crore women beneficiaries as per guidelines issued by Govt. of India.

m) Network Access Control (NAC): NAC was

implemented successfully in 2020-21 which has the capability to restrict unauthorized access.

n) Loan Account Opening through Application Programming Interface (API): This is a FINTECH project. M/S Jacota is the vendor approved for the

implementation. In this project currently SVANidhi loan account opening, Security Register Maintenance (SRM) creation, disbursement and Standing Instruction (SI) for the EMI all is done through API.

o) Finacle 10 migration of Manipur Rural Bank and On-Boarding on PFMS RRB: Along with CBS migration this RRB also on-boarded to PFMSRRB portal which is already being used by other RRBs sponsored by PNB. This is because their existing PFMS system will become incompatible with Finacle 10 and our solution is already running for RRBs which are also on Finacle 10.

p) PM SVANidhi: PM Street Vendor's AtmaNirbhar Nidhi (PM SVANidhi) is a scheme where loan up to Rs. 10,000 is provided to street vendors. Bank has developed integration services to process the leads received by Small Industries Development Bank of India (SIDBI) portal under SVANidhi scheme. All the leads received by bank are processed instantaneously using the API exposed by bank for loan account opening, Customer details pull, amount Transfer and collection API to complete the cycle of PM SVANidhi.

q) Application Programming Interface (API) for Joint Liability group (JLG): Joint Liability group is a concept established by rural development agency and NABARD to provide institutional credit to small farmers. This scheme was a product in eUNI which is migrated to PNB environment after amalgamation of eUNI Core to PNB Finacle 10. The platform is developed by Fintech Empaneled Vendor M/S Jacota and Integration API has been developed by PNB team for integration with Jacota system to perform loan account creation, fetch additional information about customers, loan disbursal, collection and PAN validation.

r) Security Interest Charge Registration with Central Registry of Securitisation Asset Reconstruction and Security Interest (CERSAI) in real time basis: Portal has been developed which has integration with CBS to fetch the data already present in CBS for creation of security interest charge between PNB and CERSAI for immovable assets through API integration.

s) Central Grievance Redressal Management System (CGRMS) Portal- It is an in-house web based system (web application and web APIs) used to lodge complaints and service requests. Following improvements have been made in CGRMS portal: -

• Lodging of digital (transactional) complaints for failed/ fraudulent transactions

• Implementation of ODR (Online Disputes Redressal) in CGRMS where all complaints lodged (including those lodged at Contact Centers) can be tracked from all ADCs.

t) API for Preapproved Personal Loan: Customers are selected based on pre-defined criteria and such customer can avail pre-approved personal loan using the app developed where in loan up to Rs. 2,00,000 can be availed by such customers. API helps in pushing the request generated by Fintech Portal to CBS for Loan disbursal, Loan account creation, collateral creation, Standing Instruction (SI) creation and Permanent Account Number (PAN) validation.

E. MANAGEMENT INFORMATION SYSTEM

The Bank believes in harnessing the power of both big data and small data not only to drive decision-making and operational excellence but also to provide personalized experiences to increase customer delight.

Enterprise-Wide Data Warehouse (EDW): EDW is a

database that centralizes business's information from multiple sources and applications and makes it available for operational, strategic, informative and analytics purpose to cater the need of management information system, decision support system & data mining. It is a single source of truth for organizational data and ultimate utilization of EDW is Regulatory, MIS reporting and ad-hoc data requirement for obligatory, strategic, operational and analytical purposes.

Data Analytics: The Bank has set up a Data Analytics Centre of Excellence (CoE). Analytics is being conducted on broadly three verticals- Business, Control and Support, with objective of new value-creation, cross-sell and up-sell opportunity, increasing revenue, cost reduction, product enhancement, channel optimization, default loan prediction, maximizing digital footprint and improve risk profiling of the customer base.

To align with the present and future strategic business requirements of PNB, to gain competitive edge and to cater to the needs of creating advanced digital capabilities for Bank under EASE agenda, Model based business leads are being generated on various personal segment. Team is also geared up for analytics based credit and non-credit offers to existing customers.

F. BRANCH NETWORK Domestic Presence

The Bank has one of the largest networks of 10769 branches as on 31st March, 2021, comprising of 1931 Metropolitan, 2257 Urban, 2680 Semi Urban and 3901 Rural branches. Rural and Semi Urban Branches (RUSU) comprise around 61 per cent of the Total Branch Network.

International Presence

At present Bank has its overseas presence in 7 Countries by way of 2 branches (1 at Hong Kong and 1 at Dubai), 2 Subsidiaries (London and Bhutan), 1 Joint Venture (Nepal) and 2 Representative Offices (Myanmar and Bangladesh).

G. INTERNATIONAL BANKING

As on 31st March, 2021, there were 240 branches authorized to handle Foreign Exchange Business and 4 Trade Finance Centers functioning at New Delhi, Chennai, Kolkata and Mumbai specialized for centralized handling of trade transactions. Bank has 9 Exchange Bureaus at important tourist centers to facilitate encashment of Foreign Exchange Currency Notes by foreign tourists/NRIs.

DOMESTIC FOREX BUSINESS

Bank has registered a Foreign Exchange Business Turnover of Rs. 90,105 Crore (Exports and Imports together) for the FY 2020-21.

Bank has an International Service Branch (ISB) functioning at New Delhi for handling Inward Remittances of the Bank as a whole. During FY 2020-21, Bank has handled remittance business of Rs. 42,718 Crore.

Bank also has Rupee Drawing Arrangements (RDA) with 17 exchange Houses (11 in the Gulf, 1 in Singapore, 2 in the USA, 1 each in UK, Canada and Seychelles) to facilitate remittance from NRIs.

The Bank also has remittance arrangement under Money Transfer Service Scheme (MTSS) with Transfast Worldwide.

OVERSEAS BUSINESS

Overseas business of the Bank stood at Rs. 43,266 Crore as at March 2021. Overseas branches are focusing on High Quality Medium/Long term Assets to build a diversified loan portfolio with low Credit Risk Weight to improve profitability.

Steps Initiated for Forex Business growth:

• 65 Exporter/ Importer meets were conducted on PAN India basis to address their grievances in respect of Forex business during FY 2020-21.

• Trade Finance Redefined Portal: Bank has launched a portal to allow export customers to scan and send documents directly to Bank improving TAT. It simultaneously offers other features like information dashboard which contains limit availability, due date calender of bills, real time tracking of transaction status etc.

• Forex Service Charges: The forex service charges have been rationalized with respect to advance receipt, inward remittance (other than export), outward remittance (other than import) for individual, Foreign Currency Demand Draft FCY-DD (issue)/ Telegraphic Transfer (TT) from Exchange Earners' Foreign Currency (EEFC), transfer of amount from EEFC to Current Account (CA)/ Packing Credit Loan in Foreign Currency (PCFC)/FCBRD.

• Interest rate on Export Credit has been aligned with Rating of the borrower.

• Dedicated customer care desks are made available at all Trade Finance Centre (TFCs) to help trade finance customers. The contact details are also placed on PNB Corporate website.

• A dedicated email ID eximcust@pnb.co.in has been created exclusively for trade finance customers for their forex related operational issues which is under the direct monitoring of IBD.

H. BUSINESS DIVERSIFICATION Insurance Business:• Life Insurance:

Under Life Insurance, Bank has tie-up with the following Insurance companies, Life Insurance Corporation of India (LIC), PNB MetLife India Insurance Co. Ltd (PMLI) and Canara HSBC Oriental Bank of Commerce Life Insurance Co. Ltd (CHOICe).

The Bank's earnings from Life Insurance business grew by 2.94 per cent during FY 2020-21 to Rs. 276.22 Crore.

New Products:

1. POS Suraksha by PNB Metlife.

2. Century Plan by PNB Metlife

3. Guaranteed Income 4 Life by CHOICe

4. Pension 4 Life by CHOICe.

• Non-Life Insurance:

Under the Non-Life Insurance, the Bank has tie-up with the following Insurance companies, The Oriental Insurance Co. Ltd. (OICL), Bajaj Allianz General Insurance Co. Ltd. (BAGIC), Cholamandalam MS General Insurance Co. Ltd. (CHOLA), Care Health Insurance Co. Ltd. (CHICL), and Star Health & Allied Insurance Co. Ltd. (SHICL).

Bank's Commission Income stood at Rs. 92.65 Crore during FY 2020-21 (Health Insurance - Rs. 53.59 Crore & Asset Insurance - Rs. 39.06 Crore). During FY 2020-21, Bank registered a YOY growth of 6.92 per cent in income.

New Products:

1. Equated Monthly Installment (EMI) protection plan for protecting retail loans by Care Health Insurance.

2. First of its kind COVID 19 benefit plan by CHOLA MS which pays an upfront amount of Rs. 50,000 per person covered under the policy simply on diagnosis of COVID of the insured.

3. Group Personal Accidental Insurance by Bajaj Allianz which provides a Sum Insured of Rs. 4 Lakh

at a premium of Rs. 68 only.

4. Group Care 360 - Rural: A comprehensive Health Insurance product has been designed for rural customers at a subsidized rate.

• Mutual Funds:

The Bank is distributing and marketing Mutual Fund products of M/s Principal Asset Management Pvt. Ltd., M/s Nippon Life Asset Management Ltd., M/s UTI Asset Management Company Ltd., M/s Aditya Birla Sunlife Asset Management Company Ltd., M/s LIC Mutual Fund Asset Management Ltd, M/s DSP Investment Managers Pvt Ltd and M/s Franklin Templeton Asset Management (India) Pvt Ltd. During FY 2020-21, Income of Rs.3.81 Crore was earned.

• Depository Services:

As a Depository Participant, bank opened 5,539 Demat Accounts and 7,514 Online Trading Accounts in FY 2020-21. Insta Demat facility was introduced in September 2020. 3,268 accounts were opened through this facility in FY 2020-21.

• Merchant Banking:

Bank has license to act as a Banker to Issue, Debenture Trustee and Merchant Banker. During FY 2020-21, 109 IPOs were launched whereas 105 IPOs were launched in FY 2019-20. However, the amount blocked in ASBA increased to Rs. 4,969.91 Crore during FY 2020-21.

New Initiatives during FY 2020-21

a. Life Insurance & Non-Life Insurance Business:

1. The facility for online purchase of Insurance Policies under Life insurance has been made operational through Internet Banking.

2. Online Solicitation of Asset & Health Insurance has been launched through Internet / Mobile Banking.

b. Depository Business:

1. Insta Demat facility to open Demat Account instantly through Digital Channel was launched in collaboration with NSDL.

2. 8 Webinars held on Depository Services in collaboration with NSDL for prospective customers to create awareness.

c. Lead Management System:

Addition of missed call channel in Lead Management System of CRM with effect from October 2020 through which customer can express interest in bank product by giving a missed call and will receive a call back from bank.

d. Customer Acquisition Centres (CAC) and Government Business Vertical Centres (GBV):

In the new revamped structure of PNB, 57 Customer Acquisition Centres (CACs) at major locations & 21 Government Business Vertical Centres (GBVs) at State Capitals across India became operational since July 2020.

The main objective of these vertical centres is for focused approach to generate bulk business through strategic tie ups with existing/new Corporate/ Institutional/Govt./

Defence & PSU clients, especially those enjoying credit facilities from us by exploring cross sell/up sell bouquet of various Bank products, especially Third Party Product (TPP). In addition, structure also focus on deepening relationship with HNI/NRI clients by exploring up sell/ cross sell opportunities.

I. GOVERNMENT BUSINESS

With a view to play a more proactive role in the transfer of funds from Centre and States to various beneficiaries, Bank has been making efforts to have a sizeable number of Public Financial Management System (PFMS) agency accounts. As on 31st March, 2021, there were 3.44 lakh agency accounts PAN India. Bank is also an accredited banker to nine different Central government departments post amalgamation. These numbers will further rise. Bank has been increasing tie-ups with various State governments to cater to their specific needs.

Some of the initiatives taken up by the Bank under Govt. Business during the year are given as under:

? Govt. E-Market Place (GeM): Bank is the first among nationalized banks to be available on GeM portal for providing our services to vendors, i.e. sellers and purchasers. These services include GeM pool account, e-PBG (Performance Bank Guarantee) & e-EMD (Earnest Money Deposit).

? Fastag: National Electronic Toll Collection Project has been implemented and all branches have been enabled for issuance of Fastags.

? National Pension System (NPS): Four Regional Rural Banks sponsored by our bank have been on-boarded for NPS remittance.

? Public Financial Management System (PFMS): Bank has timely disbursed funds of approximately Rs. 3,720 Crores to about 62 lakh beneficiaries under PM Kisan Samman Nidhi.

? Through active marketing, more than 1.21 lakh PPF, more than 61,000 Sukanya Samridhi Accounts and more than 53,000 Senior Citizen Saving Accounts were opened during the FY 2020-21

? Series of Sovereign Gold Bond subscription launched by Govt of India were marketed by our branches and 1598 Kgs were sold.

? Bank is disbursing pension of approximately 10 lakh pensioners i.e. Central Govt, Defence, Railways, Telecom and state Government.

? Bank is having integration with various states and is collecting online and offline taxes through their Cyber Treasury Portal and collection of VAT is done in 21 States.

? Collection of taxes (Direct & Indirect) is being done through offline and online on PAN India Basis. Bank is one of the major collectors of taxes for Central & State Government.

J. TREASURY OPERATIONS

Gross Domestic Investments grew to Rs. 3,94,889 Crore as on 31st March, 2021 with the averageinvestments at Rs. 3,88,418 Crore. Interest income from the investment portfolio stood at Rs. 24,566 Crore for FY 2020-21.

The Bank actively traded in SLR and Non-SLR securities throughout the financial year. Total trading profit for the FY 2020-21 is Rs. 4,350 Crore.

System liquidity continued to be in surplus during 2020-21 on account of various liquidity augmenting measures undertaken by the Reserve Bank of India in the post-COVID-19 period. From April 2020 onwards there has been a surplus liquidity in the Banking system which has continued till 31st March, 2021 with average daily liquidity to the tune of Rs. 5 Lakh Crore. RBI took many liquidity augmenting measures such as Targeted Long Term Repo Operations (TLTRO) of Rs. 1,00,000 Crore and TLTRO 2.0 of Rs. 13,000 Crore against announcement of Rs. 50,000 Crore. It also actively used several instruments to manage liquidity like repo, fixed as well as variable rate reverse repo and MSF under the Liquidity Adjustment Facility (LAF). Numerous open market operations (OMOs) of G-Secs as well as State Development Loans (SDLs) including special OMOs involving simultaneous sale and purchase were conducted throughout the year amounting to Rs. 3,13,295 Crore.

The liquidity position of the bank remained surplus during FY 2020-21 which was deployed majorly through reverse repo operations with RBI as well as in various money market instruments like Call, Tri-party Repo Order Matching Platform (TREPS) and Clear Corp Repo Order Matching System (CROMS).

• Fixed Income (SLR/NSLR)

During FY 2020-21, Bank booked trading profit of Rs. 4,100 Crore from purchase and sale of fixed income instruments and other investments.

Bond market witnessed a lot of volatility in FY 2020-21 primarily due to the outbreak of COVID-19 pandemic.

Declining trend of yield was seen till mid of July 2020 due to repo rate cut of 75 basis points by Reserve Bank of India on 27th March, 2020 along with reduction of CRR by 100 bps.

This was followed by another rate cut of 40 basis points on 22nd May, 2020 bringing the repo rate to its present level of 4 per cent. However, revision of market borrowing by Central Government for FY 2020-21 from the budgeted Rs. 7.80 Lakh Crore to around Rs. 12 Lakh crore to mitigate the unfolding impact of COVID-19 dented risk appetite of the investors leading to the hardening of yields for a brief period.

Since mid of July 2020, barring some brief period of volatility, bond markets mostly remained range bound. While steady increase in Brent crude oil prices since May 2020 and continuous hardening of U.S. treasury yield since August 2020 exerted pressure on bond markets, but throughout the period RBI remained supportive with the announcement of outright/special

OMOs which even included the OMO purchase in State development loans. For addressing the larger supply of dated securities, RBI granted a special dispensation of enhanced HTM limit of 22 per cent of NDTL till 31st March 2023, for SLR securities acquired between 1st September, 2020 and 31st March, 2022 through a series of notifications.

On 1st February, 2021, Union Budget for FY 2021-22 pegged the gross market borrowing for FY 2021-22 at around Rs.12.06 Lakh Crore, but at the same time, increased the market borrowing for FY 2020-21 by Rs. 80,000 Crore sending jitters in the bond market. This extra borrowing for FY 2020-21 was in addition to the Rs.1.10 Lakh Crore announced earlier by the Government of India to functionalize the special window for compensating the States to meet the GST shortfall.

Despite inflationary pressures, which manifested in CPI based inflation data till November 2020, the Reserve Bank of India Monetary Policy Committee maintained its accommodative stance and indicated the availability of policy space which would be used judiciously once inflation cools down. Growth, which contracted massively by around 24.4 per cent in Q1 and then again by around 7.4 per cent in Q2, finally expanded marginally by around 0.5 per cent in Q3 and by 1.6 per cent in Q4 of FY 2020-21, raising hopes for growth revival in the days ahead.

• Equity & Mutual Funds

Bank earned a profit of Rs. 227 Crore in FY 2020-21 from trading in equity shares and investment in mutual funds. Indian equity markets crashed due to the sudden announcement of a nationwide lockdown in March 2020 in order to control the spread of the virus by the Union government. However, Nifty 50 and Sensex have rebounded sharply from its lows and continue to trade at all-time highs as of now.

It appears that the present market has already discounted the worst and is anticipating significant improvement in earnings in the coming quarters due to a strong revival in demand post the mass vaccination drive being carried out across the country. Economic indicators like GST tax collections have also shown significant improvement.

• Forex

Net forex income of the bank for FY 2020-21 was Rs. 1,395 Crore. The Indian Rupee remained largely stable throughout the year and traded in a broad range of 72.26-76.92. It experienced a knee jerk depreciation during April 2020 pushing it to 76.92 but recovered on the back of record FDI inflows received by the country. It finally closed at 73.11 on 31st March, 2021.

K. CUSTOMER CARE

Being a service organization, providing quality customer service and ensuring customer satisfaction are the prime concerns of the bank. The Bank believes that providing prompt and efficient service is essential not only to attract new customers, but also to retain existing ones. Aim of the Bank is to minimize the instances of customer complaints and grievances through proper customer service delivery and review mechanism and to ensure prompt redressal of any customer complaints and grievances that may arise despite this.

Initiatives undertaken during the year for improvement in customer service

• The Bank has an On-line Grievance Redressal Management Portal called Centralized Grievance Redressal Management System (CGRMS), which was earlier managed by the vendor and during the period in-house Portal is developed and made operational from 1st July, 2020. Through this system, the customer gets an immediate acknowledgement and can keep a track of the complaint also.

• Customers can lodge their requests/complaints in the CGRMS through Bank's website, Internet Banking Service, Mobile Banking Service and Mobile App.

• New features are implemented in the CGRMS which are differentiated processing flows and time frames for resolution for each sub-category of complaint, Auto-escalations to respective supervisory levels, Standardized status types for customers with proactive communication at major steps.

• The Bank has state-of-the-art Contact Centers at Gurugram and Noida to provide tele-banking services to its customers on 24 x 7 x 365 basis through two leading Service Providers. In addition to these two Primary Sites, the Bank has also established two Secondary Contact Centers at Dehradun and Bhopal to provide tele-banking services to its customers in 11 languages. The number of services extended to 11 by Contact Centre through IVR during FY 2020-21 thereby making them more customer friendly.

• The Bank has constituted teams of officials at Customer Care Centre at Head Office, Zonal Offices and Circle Offices to pay incognito visit to branches to assess standard of service. During FY 2020-21, officials of the Bank made 8,496 incognito visits to branches PAN India. Deficiencies pointed out by the visiting officials are being shared with the concerned branches/Circle Offices for taking corrective steps.

• The status of complaints received by the Bank is reviewed by “Customer Service Committee of the Board”, a Sub-Committee of the Board, on quarterly basis. The meetings of the Committee are presided over by Managing Director & CEO.

• The Bank has a “Standing Committee on Customer Service”, which also reviews customer service of the bank as well as implementation of the Code of Bank's Commitments to Customers of Banking Codes and Standards Board of India (BCSBI).

• The Bank has in place an Internal Ombudsman as per the recommendations of the Damodaran Committee. The system ensures greater transparency in the redressal of grievances by the Bank.

• Customer Service Committees in all the branches and Circle Offices look into the quality of customer service rendered and critically examine the feedback/ suggestions for improvement in customer service. These committees meet once in a month where staff and the invited customers interact freely on service related issues.

• Theme Based Meetings are being conducted at monthly intervals in all branches on a pre-decided date and theme to improve awareness among field staff about bank's products and services, and to sensitize them about the issues of maximum importance.

• Door Step Banking services started by the Bank from 9th September, 2020. It is a facility by which customers can avail many of the financial/non-financial banking services through the two Vendors at 100 centers. It provides convenience to the customers to access different type of banking services from their Door Step.

• For FY 2020-21, out of a total number of 1,37,262 complaints (i.e. 1,876 complaints outstanding as on 31st March, 2020, and 1,35,386 complaints received during FY 2020-21), 1,30,087 complaints were resolved up to the satisfaction of the complainant, till 31st March, 2021.

L. IMPLEMENTATION OF OFFICIAL LANGUAGE

Punjab National Bank has always been a pioneer in the implementation of the Official Language Hindi in the Bank. Bank has ensured compliance of the instructions received from the Government of India, Ministry of Home Affairs, Department of Official Language, Parliamentary Official Language Committee and Ministry of Finance, Department of Financial Services. Bank has achieved most of the targets prescribed in the Annual Programme for the FY 2020-21 issued by the Government of India, Ministry of Home Affairs and Department of Official Language.

We have pleasure to inform that during FY 2020-21, the Bank has received 1st prize under the Government of India's highest "Rajbhasha Kirti" award for 'A' region. Total 12 prizes were awarded to Bank's various Zonal/ Circle Offices by Regional Implementation Offices of the Ministry of Home Affairs, Department of Official Language and Chandigarh TOLIC where the Bank is convener, won second Prize. During financial year 2020-21, total 196 awards from Government of India, Ministry of Home Affairs, Department of Official Language and various Town Official Language Implementation Committees have been received by various offices / staff members of our Bank.

During the financial year 2020-21, Punjab National Bank has made concerted efforts to increase the progressive use of Official Language in the Bank. Hindi and Regional Languages were used in publicity and promotional campaigns related to the schemes and products of the Bank. Intensive monitoring was done to achieve targets

set in Annual Programme and Corporate Action Plan of Official Language duly approved by the Board. Prizes were awarded to offices/staff doing excellent work in Hindi under Lala Lajpat Rai Shield Yojana and various other incentive schemes to increase the use of Hindi in the Bank. Quarterly bilingual house magazine of the Bank "PNB Pratibha" and half yearly Hindi magazines of the Zonal Offices were published regularly. PNB has efficiently discharged the responsibility of coordinating 29 Town Official Language Implementation Committees across the country.

Half yearly meetings of these committees were held regularly and Hindi competitions, Hindi workshops, Hindi seminars etc. were organized during the year.

Progress made in the use of Hindi in Information Technology:

• Facility of Hindi and other Regional Languages has been provided in Internet Banking and ATMs and mobile applications i.e. PNB One, Bhim PNB.

• Facility to print customer name in Hindi on debit card was provided.

• Customers have been provided the facility to generate ATM transaction slips in Hindi.

• SMS alerts were sent to customers in Hindi and regional languages.

• The Bank's website is available in bilingual form in Hindi and English.

• Online Hindi reporting of all Branches, Circles, Zones and Divisions of Head Office was done on the Official Language web portal.

• Due to COVID-19 pandemic, virtual Hindi workshops, competitions, e-webinars, e-Inspections were organized through digital platforms apart from physical mode.

• Bilingualisation of Finacle and HRMS was done through Linguify software, through which customers can get passbook, CDR / FDR etc. and staff members can get their Bio Data, Salary Slip, Pension and Gratuity details etc. in Hindi also.

• Staff members were provided training on working in Hindi on computer.

During the financial year 2020-21, the Bank celebrated September 2020 as Hindi month all over India and the winners of Hindi competitions were felicitated by Managing Director and CEO in Hindi Diwas Samaroh organized at Head office and by field functionaries at field level.

M. PNB'S SUBSIDIARIES AND REGIONAL RURAL BANKS 1. DOMESTIC

i. PNB Gilts Ltd: During FY 2020-21, debt market remained volatile amidst positive factors such as successive policy rate cuts by RBI on account of growth concerns and adverse factors like Covid 19 pandemic, fiscal deficit concerns and sharp increase in CPI inflation.

The 10-yr benchmark yield touched a high and low of 6.50 per cent and 5.73 per cent respectively during the year and closed at 6.18 per cent as on 31.03.21.

Against the backdrop of volatile market conditions, PNB Gilts Ltd continued to fulfill all its obligations as a Primary Dealer mandated by RBI both in Primary and Secondary market. Alongside, the major focus of the company remained on enhancing the scale of operations and also undertaking new activities so as to utilise capital efficiently. Balance sheet size increased considerably. Marketing and sales functions were strengthened.

Company also forayed into Debt capital market (DCM) business as arrangers to Corporate Primary Issuances and entered into the top ten ranking (7th rank) in the prime ranking league table.

As a result of all the above, despite volatility, Company posted a Profit Before Tax (PBT) of Rs. 614.35 Crore during FY 2020-21 vis-a-vis PBT of Rs. 249.81 Crore during FY 2019-20. Profit After Tax (PAT) amounted to Rs. 454.12 Crores during. FY 2020-21 as against Rs. 186.35 Crore in the previous FY 2019-20. This is the highest PAT achieved by the Company since inception. Capital adequacy remains strong with its capital to risk weighted assets ratio (CRAR) at 45.58 per cent as on 31st March, 2021 (32.47 per cent as on 31st March, 2020), well above the regulatory minimum of 15 per cent for PDs.

ii. PNB Investment Services Ltd: The Company is a profit-making company from the first year of its operations. During the year ended March 2021, the Company earned a fee-based income of Rs. 5.33 Crore with a total income of Rs. 8.02 Crore as against a fee based income of Rs. 4.66 Crore and a total income of Rs. 7.47 Crore respectively for the year ended March 2020. Profit before Tax during the period ended March 2021 was Rs. 1.87 Crore as against Rs. 0.82 Crore for the period ended March 2020.

The company operates in three verticals, namely Corporate Advisory, Equity Capital Market and Security Trustee. In the Corporate Advisory Vertical, during the year PNBISL advised many marquee business groups and corporate clients on various transactions, including debt syndication, debt resolution and other corporate advisory assignments. With in-house expertise and deep understanding of select sectors, PNBISL prepared and delivered credible techno-economical viability (TEV) reports to its clients.

In Equity Capital Market Vertical, PNBISL actively participated in PNB's fundraising transactions of Qualified Institutional Placement (QIP), Tier II Bonds and Additional Tier I Bonds.

The involvement in these transactions varied from advising on compliance requirements, drafting of offer documents and marketing of the offerings.

In the Trusteeship business, the market is highly competitive and the per-case fee levels are on a downward trajectory. Despite intense competition, the company has been able to maintain growth without compromising on the quality of clients. A cautious strategy has been adopted while selecting the clients, so as to ensure only credible clients are on-boarded. With its prompt and quality service, the company continues to build on its strategy to be a trusted partner of leading banks and corporates.

With the completion of one year of amalgamation and smooth transitioning of three banks into one, PNB has emerged as a stronger bank with an increased capability to offer credit of different ticket sizes. PNBISL with aggressive client identification and excellent execution strategies is well placed to translate this strength of the amalgamated entity into increased outreach of the bank with a diversified lending book.

2. INTERNATIONAL

i. PNB International Limited (PNBIL): PNBIL continues to serve its customers in London and Midlands through network of seven branches located at Moorgate, Ilford, Wembley, Southall, Leicester, Birmingham and Wolverhampton.

Even during the Covid pandemic the bank ensured to provide all services to customers in smooth and safe manner. During FY 2020-21, the total business of PNBIL increased from 1,523 USD Million to 1,755 USD Million thus showing growth of 15 per cent under challenging circumstances.

The bank continues its efforts at product diversification and digitalization in order to enhance its services. During the year PNBIL introduced new credit products like Buy-to-Sell, Fixed Interest loans etc. to provide more options to its customers. A new software has been implemented in order to strengthen the compliance framework. The bank's website has been revamped for better customer experiences. The bank is also working on “Aggregator Concept” for deposit mobilization in order to enhance its outreach and better liquidity management.

ii. Druk PNB Bank Ltd: Druk PNB Bank Ltd, Bhutan, Banking Company having its corporate office at Thimphu, Bhutan. Druk PNB Bank Ltd has started its operation on 27th January, 2010, in Bhutan as the country's fourth commercial Bank, with a component of both FDI and joint venture in the Banking Sector. Presently Bank has 8 branches and 30 ATMs spread across the country.

Total Business of the DPNBL increased to Rs. 2,780.01 Crore as on 31st March, 2021 from Rs. 2,534.39 Crore as on 31st March, 2020 showing YOY growth of 9.69 per cent. CASA Ratio of the Bank stood at 38.7 per cent as on 31st March, 2021. Profit of the Bank has increased to Rs. 19.56 Crore as on 31st March, 2021 from Rs. 18.48 Crore as on March 31,2020. Paid up capital of the Bank as on 31st March, 2021 is Rs. 84 Crore.

3. REGIONAL RURAL BANKS (RRBs)

As on 31st March, 2021, there are 9 RRBs sponsored by the bank operating in 9 states namely Bihar, Haryana, Himachal Pradesh, Punjab, Uttar Pradesh, West Bengal, Assam, Manipur and Tripura including eUNI amalgamated RRBs covering 185 districts with a network of 4,590 branches

i. Total business of sponsored RRBs as on 31st March, 2021 is Rs. 1,75,224 Crore.

ii. Deposits of RRBs are at Rs. 1,12,446 Crore as on 31st March, 2021. The CASA deposits of the RRBs have increased to Rs. 68765 Crore as on 31st March, 2021.

iii. The advances of the RRBs as on 31st March, 2021 stood at Rs. 62,778 Crore.

iv. The sponsored RRBs are in profit (except DBGB Patna, AGVB Guwahati and MRB Imphal) and combined Net profit of the RRBs during the FY 2020-21 is Rs. 550 Crore.

v. The RRBs have cumulatively opened 1,87,13,273 accounts under Pradhan Mantri Jan Dhan Yojna (PMJDY) as on 31st March, 2021 with Rupay ATM Cards issued in 60,23,759 accounts.

There is a decline in Net NPA to total advances of RRBs to 4.91 per cent in March 2021.

Financial Performance of RRBs as on 31st March, 2021:(Amount in Rs. Crore)Particulars 31.03.2020 31.03.2021

Total Business 161918 175224

Aggregate Deposits 104472 112446

Aggregate Advances 57445 62778

Net profit -472 550

Operating Profit 1648 3063

N. AWARDS AND ACCOLADES

Bank's effort have been recognized at various platforms. The Bank has been conferred the following awards for initiatives taken in the field of Information & Technology for the year 2020-21:

? Bank secured overall 4th Place among all PSBs in EASE 2.0 index. Bank received highest number of awards amongst all PSU Banks in different themes as under:

• Responsible Banking-2nd runner up

• Deepening FI & Digitalisation - 2nd runner up

• Governance and HR - 2nd runner up

? ET-BFSI (part of renowned Economic Times Group) judged PNB as the “Most Innovative Public Sector Bank of the Year" in the ET-BFSI Excellence awards 2020.

? PNB was Joint runner-up in the IBA Banking technology 2019-20 awards for the following categories:

• Best Digital Financial Inclusion initiatives

• Best IT Risk & Cyber Security initiatives

? M/s Infosys awarded PNB with “Runner Up Award” in Finacle Client Innovation Awards 2020 for PNB's path breaking “Process Innovations”

? DSCI Excellence Awards 2020 under the category “Security Leader of the Year in Banking”

? Assocham Awards - Runner up under Digital Service under PSB merged category.

? Indian Society for Training and Development (ISTD) Awards for Innovative Training Practices 2019-20 -Second Prize in Services (BFSI & IT/ITES Category).

? Skoch Gold Award - Response to COVID Guaranteed Emergency Credit Line (GECL). Also Bank won Skoch Order of Merit Award 2021 in the following categories:

• Amalgamation of Security Solutions of the merging entities.

• Guaranteed Emergency Credit Line (GECL)

• Chatbot in PNB Internet Banking and Mobile Banking

• Reduction in Technical Decline in Aadhar enabled Payment system ( AePS)

? Bank's mobile App, PNB Verify won Finnoviti Award 2021 for its various features enhancing the security of PNB Retail Internet Banking and debit card transactions.

O. FUTURE BUSINESS PLAN OF THE BANK

Despite the challenges due to COVID-19 pandemic, Bank continued providing uninterrupted services to the customers in these testing times.

Post amalgamation, PNB has new opportunities due to wider customer base and their credit demands and is well positioned with scaling up to devise better risk management and corporate governance practices. Changes in the organization structure in sync with the increased number of branches, service centres and introduction of new verticals have strengthened the last mile delivery and credit underwriting. Going forward, strategic thrust areas for the Bank will be in the area of 1) Customer: Customer segmentation for better customer convenience, 2)Channel: Thrust on contactless banking, strategic partnerships to grow in underpenetrated markets and migrating customers to new age channels 3) Product: Reposition/refine products based on customer segment and value proposition, 4)Operating Model: Transform branch as a sales & service centre, 5) Technology & Analytics 6) Align Human Resource Strategy & Re-imagine collections with recovery as Profit Centre.

Overall, Bank's focus will remain on Customer Centricity, Strengthening Balance Sheet, Technology & Digital Delivery and Human Resources. Bank aspires to be

digitally well-equipped to face the emerging situation and will strive to engage customers through digital channels, encourage automation and digitalization of processes.

Bank is always committed to ensure optimum use of resources to the benefit and create value for all our stakeholders, be it customers, employees or investors. Greater customer convenience and employee safety will always remain our topmost priority. Bank shall endeavor to make more value added transformations through new innovations, products and processes to create more value for stakeholders.

P. BOARD OF DIRECTORS

The Board of the Bank comprises of 9 Directors including 5 whole time Directors i.e. One Managing Director & CEO and four Executive Directors as on 31st March, 2021.

During the FY 2020-21, the following changes took place in the composition of Board of Directors:

? Shri Sanjay Kumar has been appointed as Executive Director on the Board of Bank with effect from 1st April, 2020.

? Shri Vijay Dube has been appointed as Executive Director on the Board of Bank with effect from 1st April, 2020.

? Shri Sanjay Verma, Shareholder Director completed his tenure on 14th June, 2020.

? Dr. R. K. Yaduvanshi, Executive Director completed his tenure on 8th October, 2020.

? Shri Swarup Kumar Saha, has been appointed as Executive Director on the Board of Bank with effect from 10th March, 2021.

? Shri Gautam Guha, has been appointed as Shareholder Director on the Board of Bank with effect from 18th March, 2021.

The Board wishes to place on record its appreciation for the valuable contribution made by Shri Sanjay Verma (Shareholder Director) and Dr. R. K. Yaduvanshi (Executive Director).

Q. DIRECTORS' RESPONSIBILITY STATEMENT

The Directors confirm that in the preparation of the annual accounts for the year ended 31st March'2021:

• The applicable Accounting Standards have been followed along with proper explanation relating to material departures, if any;

• The accounting policies, framed in accordance with the guidelines of the Reserve Bank of India, were consistently applied;

• Reasonable and prudent judgment and estimates were made so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit of the Bank for the year ended 31st March'21.

• Proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of applicable laws governing banks in India, and;

• The accounts have been prepared based on the principle of “going concern”.

• The Internal Financial Controls had been laid down and that in all material respect, the Bank has adequate Internal Financial Controls except certain area of improvements in Risk Control matrix (RCM) and such Internal Financial Controls over Financial Reporting were operating effectively as at 31st March 2021.

R. ACKNOWLEDGEMENT

The Board expresses thanks to the Government of India, Reserve Bank of India, Securities and Exchange Board of India, Stock Exchanges, Bank's customers, Public and all other Stakeholders for valuable support, continued patronage and confidence reposed in the Bank.

The Board also placed on record its appreciation for the valuable contribution made by the members of the Bank's staff at all levels and looks forward to their continued involvement in achieving the future goals.

For and on behalf of Board of DirectorsCH. S. S. Mallikarjuna Rao

Managing Director & CEO