India's second-largest PSU lender Punjab National Bank (PNB) is maintaining a Liquidity Coverage Ratio (LCR) of over 130%, far exceeding the required 100%, CEO Ashok Chandra said on January 31, assuring that there will be no major impact on the bank's operations.
The draft LCR norms are scheduled to come into effect from April 1, 2025.
"We have calculated the potential impact based on the draft guidelines and factored in all components, including digital transactions. While the LCR may decrease by around 13-14 basis points, it will still remain well above the required 100%," PNB CEO has said.
The Liquidity Coverage Ratio (LCR) is a measure of a lender's ability to meet short-term financial obligations, held as highly-liquid assets.
CEO Ashok Chandra added that the bank's financial position remains stable, and well within regulatory compliance, ensuring no disruption to overall operations.
Under the LCR requirement, lenders are expected to hold liquid assets sufficient to cover net cash outflows over a 30-day period. The minimum LCR requirement set by regulators is 100 percent, implying banks must have enough liquidity to meet their obligations during a liquidity crisis, without needing external support.
PNB reported its financial results for Q3FY25, more than doubling its standalone net profit by by 102% to Rs 4,508 crore, compared to Rs 2,223 crore a year ago. Bank's total income increased to Rs 34,752 crore in the third quarter from Rs 29,962 crore in the year-ago period, Punjab National Bank said in a regulatory filing on January 31.
During the quarter, PNB's interest income rose to Rs 31,340 crore from Rs 27,288 crore in the same period last fiscal, and its Net Interest Income (NII) grew 7.17% to Rs 11,032 crore.
Shares of PNB jumped 5.54% on the back of strong quarterly earnings, to hit an intraday high of Rs 101.87 per share on the NSE.
Punjab National Bank (PNB) is looking to ramp up recovery of bad assets in the fourth quarter in order to meet its ambitious target of Rs 18,000 crore for the fiscal, after facing a slowdown in asset recovery during Q3FY25.
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