Fraud-hit Punjab National Bank Ltd. has decided to designate 60 systematically important branches that will carry out all lending operations of above Rs 50 crore to ensure better checks and balances over large accounts.
“The bank is in the process of shifting most of the large accounts to SIBs,” the state-run lender said in a release today. The bank will create these SIBs across the country as part of its credit restructuring exercise.
The lender suffered huge losses of over $2 billion fraud perpetrated by diamantaire Nirav Modi in connivance with a few bank officials.
PNB has embarked upon a credit restructuring exercise that will ensure that large accounts as well as lending operations are concentrated in a few specially designated branches.Punjab National Bank
The public sector lender said creation of these 60 SIBs across the country will ensure better checks and balances over large accounts. Besides, most of the bigger accounts will be operated from branches designated as Large Corporate Branches (LCBs) and regular branches will concentrate on regular savings accounts and CASA (current account savings account).
For centres located in metropolitan cities, in addition to LCBs, two to three branches will be designated as SIBs depending upon geographical convenience. “Reallocation of some of the accounts is part of the restructuring process aimed at centralisation of critical functions and large corporate accounts,” a senior PNB official said. “Retail operations for PNB customers continue to operate from the branches like Brady House.”
Also Read: How Nirav Modi Pulled Off The PNB Fraud
The bank said it will establish centralised loan processing centres across the country in a phased manner for processing of loans above Rs 50 lakh as part of its ‘Mission Parivartan’. Presently, the bank has one central loan processing centre at its Connaught Place branch in New Delhi, that enables qualitative credit assessment. It also segregates pre and post sanction responsibility as well as shortens the turn-around time and facilitates efficient monitoring.