Pedestrians walk past an advertisement for Punjab National Bank in Mumbai. (Photographer: Dhiraj Singh/Bloomberg)

PNB Recovered Rs 8,450 Crore, Will Bounce Back In Six Months: CEO

Punjab National Bank’s recoveries from stressed assets in the quarter ended June has crossed Rs 8,450 crore, its Chief Executive Officer Sunil Mehta told BloombergQuint.

The strong recovery has been backed by resolution of two cases under the Insolvency and Bankruptcy Code, Mehta said. PNB’s loan exposure to insolvent Bhushan Steel Ltd. and Electrosteel Steels Ltd. were around Rs 4,900 crore and Rs 874 crore, respectively.

Mehta said the recoveries in June quarter have been more than the amount recovered from stressed assets in the previous year. Cash recoveries for the year ended March were Rs 4,443 crore and stressed accounts that were upgraded to standard accounts amounted to Rs 1,174 crore, according to the bank’s analyst presentation.

“So, with this pace of recovery, we’re totally optimistic of bouncing back in six months,” Mehta said. The bank was hit by the country’s biggest banking fraud amounting to nearly $2 billion (Rs 13,000 crore) involving diamantaire Nirav Modi and his uncle Mehul Choksi.

Also read: How Nirav Modi Pulled Off The PNB Fraud 

The state-run lender has created a “strong” asset management vertical headed by four general managers of the bank, Mehta said. About 2,000 officers from different operational departments are working together with the recovery team and that has aided recoveries in the quarter ended June, Mehta said.

Mehta also said PNB is helping all enforcement agencies in the best way possible to extradite Nirav Modi to India. The Interpol has issued a red corner notice against Modi — which empowers 192 member-countries to provisionally arrest him — in connection with the PNB scam.

Also read: RBI On Nirav Modi Fraud: The Buck Stops With PNB’s Board