Punjab National Bank intensifies ‘Gandhigiri’ efforts to recover loans

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26 Aug, 2025 12:21

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Punjab National Bank's (PNB), one of the top three government lenders, is focussing on ‘Gandhigiri’ to help double its recoveries and reduce non-performing assets (NPAs).

In 2015, Andhra Bank and United Bank of India’s employee unions had resorted to 'Gandhigiri' – made famous by Bollywood movie Lage Raho Munna Bhai which endorses a less aggressive approach in dealing with debtors – to recover loans from wilful defaulters.

Sunil Mehta, the newly appointed CEO and Managing Director of the PNB, is aggressively stepping up its recovery mechanism by incentivising employees and reviving innovative ideas to tackle bad loans.

“We have created a few very good incentive schemes where our staff will work as recovery champions and we will revive and concentrate on Gandhigiri. For recovery championship, every circle will have 5-6 identified employees… Their job will be to park the car or jeep (outside the borrowers’ offices) and stand with banners or placards while our recovery team inside the car will be going to the borrowers… The banners and placards will say, it is public money, please repay the loans,” Mehta said, stating one of his 3-pronged strategies to strengthen the recovery process.

‘Gandhigiri’ was started off by Mehta’s predecessor Usha Ananathasubramanium and employees carried out such campaigns for a few months.

The loan defaulters were being greeted by the PNB staff with flowers and requests to return the public money given as loan to them. A greeting such as ‘Get Well Soon Financially' is said to the defaulters.

Mehta said the bank has observed that this strategy has helped them make good recoveries and it plans to encourage its staff to work on the same.

During the year, PNB made cash recoveries worth Rs 10677 crore, up over 150 percent as against a recovery of Rs 4,262 crore in FY16 and Rs 1,958 crore in FY15.

The bank’s fresh slippages also halved to Rs 22,415 crore as against Rs 42,252 crore in the same period last year.

Mehta, who was previously with Executive Director at Corporation Bank, is also rewarding the employees taking the efforts and motivating them further with incentives of foreign trips.

“So, all our employees showing results and doing a good job of recoveries will be made members of the MD and CEO club which we have revived where they will be sent abroad for training. So, this will also motivate them to work harder," Mehta said.

According to him, recovery will be a key performance indicator for performance appraisal. This will go a long way for the employees and also improve the culture of recovery and lower slippages, going forward.

PNB, which turned around its results, posted a net profit of Rs 262 crore in the January-March quarter as against a net loss of Rs 5,366 crore a year ago.

For the full year FY17 too, the bank made a net profit of Rs 1,325 crore as against net loss of Rs 3,974 crore in FY16.

Further, Mehta said the bank already has a war room to check every-day delinquencies. "We discuss with the borrowers, bankers and other stakeholders and additionally separate monitoring verticals are created for every zone to work proactively to avoid slippages and help upgrades."