At least 5% of PNB's Rs 7.21 trillion loan book may be restructured

Topics PNB | Debt recast

Till date, the bank has allowed loan restructuring to the tune of Rs 1,300 crore for MSME accounts
India’s second largest state-owned bank Punjab National Bank (PNB) is expecting at least five per cent of its loan book to undergo restructuring.

“In respect of loan book size, our rough estimate is that 5-6 per cent of the credit book may be eligible under the restructuring profile. But we will be able to get a better estimate by the end of September,” PNB managing director and chief executive officer SS Mallikarjuna Rao said in a press conference on Monday.

At the end of June, PNB’s loan book size stood at Rs 7.21 trillion. So, the bank expects loans worth Rs 36,000-Rs 38,000 crore to avail the restructuring window provided by the Reserve Bank of India (RBI). Rao said that majority of the restructured loan accounts would belong to the corporate segment. He added that the bank does not expect a large number of micro, small and medium enterprises (MSMEs) and personal account holders to go for loan restructuring.

“Out of the total loan book of Rs 7.21 trillion, Rs 1.27 trillion belongs to the MSME categories. Out of this, around 14 per cent is under non-performing assets (NPA) category so the remaining MSME accounts will be eligible which is not expected to be high in terms of value,” Rao added.


Till date, the bank has allowed loan restructuring to the tune of Rs 1,300 crore for MSME accounts. The RBI had allowed banks to go for restructuring of MSME accounts last year due to economic stress.

The RBI had earlier this month announced a loan restructuring scheme for all types of borrowers–-corporate, MSME and personal loan segments. For non-MSME account holders, such restructuring can be sought till December 31 this year, provided that the borrower is not in default for more than 30 days as of March 1, 2020.

Rao added that the bank will get a clearer picture on restructuring after examining the recommendations to be made by the RBI-appointed committee headed by veteran banker K V Kamath on loan accounts above Rs 100 crore in value. PNB will take approval from its board on the modalities of restructuring by the end of this month.

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