PNB Aims for 58% of Loan Portfolio from RAM Segment by FY26
State-owned Punjab National Bank (PNB) is set to increase its lending to the Retail, Agriculture, and MSME (RAM) sectors, aiming for these categories to constitute 58% of its total loan portfolio in the current financial year. This marks an increase from 56% in FY25, as stated by Managing Director and CEO Ashok Chandra. The bank’s strategy is designed to mitigate the impact of margin pressures resulting from interest rate cuts in corporate lending and repo-linked lending rates.
Current Loan Portfolio and Future Goals
As of the end of FY25, PNB’s loans in the RAM segment totaled ₹6,02,682 crore, representing 56% of its overall advances. Chandra emphasized that the planned increase to 58% will provide a buffer against income losses due to declining interest rates in the corporate and repo-linked loan segments. He noted that the anticipated growth in RAM lending will help offset any potential income shortfall resulting from these interest rate reductions. The bank’s proactive approach aims to ensure financial stability while continuing to support vital sectors of the economy.
Outreach Initiatives to Boost Lending
To enhance its lending capabilities, PNB has undertaken nationwide outreach initiatives, particularly in February, which have proven effective in boosting retail and MSME lending. Chandra reported that the bank achieved nearly 1.5 times its average monthly lending volume in March, thanks to these outreach efforts. He indicated that the bank plans to maintain these initiatives throughout the current financial year to further stimulate growth in these critical sectors. This commitment reflects PNB’s dedication to fostering economic development and supporting small businesses across the country.
Innovative Lending Solutions for MSMEs
In a bid to strengthen its support for MSMEs, PNB has introduced a cash flow-based digital lending facility for loans up to ₹25 lakh. This new service allows applicants to apply for MSME loans online by providing minimal information. Chandra highlighted that, through partnerships with account aggregators and fintech companies, the bank can approve loans for existing customers within just 5 to 7 minutes. This swift process aims to enhance accessibility and efficiency for small business owners seeking financial assistance.
Streamlining Home Loan Processing
On the retail lending front, PNB is actively working to establish partnerships with housing projects nationwide to simplify the home loan application process. Chandra explained that by approving housing projects in advance, applicants will not need to undergo separate legal evaluations or property valuations when applying for loans related to these projects. This initiative is expected to significantly reduce the turnaround time for loan approvals, with the bank aiming to sanction loans within 48 to 72 hours for approved projects. This streamlined approach is designed to make home financing more accessible and efficient for potential homeowners.
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