Budget 2026 to Boost Infrastructure, MSMEs & Rural Growth, Says PNB Chief

Speaking to ANI, Chandra said recent budgets have shown "consistency" and that the government is expected to continue with similar priorities this year.

"Over the last few years, there has been consistency in budget announcements. This year too, I am expecting the thrust areas will be MSME, rural infrastructure, rural growth, and capex growth, which will help infuse new entrepreneurs and attract capital into the market," Chandra said, talking to ANI.

He added that the focus would be on initiatives that ignite growth and bring infrastructure development to the forefront.

Discussing the bank's highest-ever quarterly profit, Chandra attributed the success to three key factors.

First, the bank's focus on core segments--MSME, retail and agriculture--has yielded strong results.

MSME loans are growing at over 19 per cent, retail housing at more than 15 per cent, and vehicle loans at over 35 per cent.

Agriculture lending is expanding at 10-11 per cent.

"We envisaged at the beginning of the financial year driving business through branches, and that has worked very well from a profitability perspective," he said.

Second, recoveries totalling Rs 4,100 crore during the quarter provided significant support.

Third, new verticals launched this year have begun contributing meaningfully, he said.

The supply chain vertical, created with a full digital stack four months ago, has established arrangements with vehicle manufacturers and now has a sanction pool of Rs 4,500 crore.

The cash management services vertical, focusing on corporate and NBFC receivables, is also operational under a general manager.

The bank has entered the premium credit card segment with the launch of Luxura, appointing cricketer Harmanpreet Kaur as brand ambassador.

"Credit cards present a wonderful opportunity with low penetration in India. We are going big in this market," Chandra said.

PNB currently has over seven lakh general credit cards and expects to cross 10,000 Luxura credit card customers by March 2026.

The 125 basis point repo rate cut has impacted profitability, particularly Net Interest Income and Net Interest Margin, Chandra acknowledged. Since 50 per cent of PNB's loans are repo-linked, the impact was immediate.

However, deposit rates were reduced by only 50 basis points, considering depositor interests.

Despite thin margins in corporate lending, the bank has sanctioned Rs 3.12 lakh crore in corporate loans this financial year, with Rs 1 lakh crore yet to be disbursed. PNB expects total corporate loan sanctions to exceed Rs 4 lakh crore this year, double the previous year's Rs 2 lakh crore.

Improved NPA ratios stem from effective slippage management and strong recoveries. The bank is maintaining slippages below the 1 per cent guidance, with quarterly slippages around Rs 1,800-1,900 crore.

With a recovery target of Rs 16,000 crore for the financial year, PNB has already recovered over Rs 11,000 crore in the first nine months.

The bank expects to recover more than Rs 4,000 crore in the fourth quarter, following Rs 4,100 crore in recoveries during the third quarter.

"All these factors together have brought down both gross and net NPAs," Chandra added.

- ANI