State-owned Punjab National Bank (PNB) is rechecking operations of its mobile app, PNB One, to ensure safeguards in the aftermath of the Bank of Baroda (BOB) World App case , Managing Director and Chief Executive Officer (CEO) Atul Kumar Goel said.
"When we got to know about the BOB World case, as a cautionary measure, we started rechecking our whole digital app system," Goel told Moneycontrol in an exclusive interview on October 27.
About the Nirav Modi case, he said the bank has so far recovered Rs 100 crore. Fugitive diamond merchant Modi has defaulted loans to the tune of Rs 14,000 crore cr. He is on the run now .
After the BOB case, Goel said that PNB has stipulated that a single mobile number cannot be put in more than five accounts.
"We have been taking such measures even before the BOB news came into our knowledge," Goel said. "So far, in our initial inspection, we have not found any irregularities in our app at any level," said Goel.
On October 25, 2023, Moneycontrol had reported that at least four state-owned banks have started conducting internal audits of their digital apps in the aftermath of the BOB World App case.
The report quoted at least four people from different state-led banks on condition of anonymity.
The Reserve Bank of India (RBI), on October 10, directed the state-led lender Bank of Baroda (BoB) to stop onboarding new customers through BoB World, the lender’s digital banking app.
Goel said that to restrain unethical practices by Business Correspondents, PNB is holding regular meetings with its business correspondents or BCs.
Edited excerpts:
What are the learnings from the BOB World App case?
When we got to know about it, as a cautionary measure, we started rechecking our digital app system, PNB One. We were stringent on such issues even before this news came to our knowledge. So far, in our inspections, we have not found any irregularity in our app at any level.
PNB has stipulated a condition that a single mobile number cannot be put in more than five accounts.
Any update on the Nirav Modi scam?
So far, we have recovered Rs 100 crore. As we have put some of the property on sale and we have got the bidder, remaining action may take some time. But we have started recovery in that account also. This I can tell you.
Recently some concerns were raised about the operations of BCs. Your views?
You are right, there were some concerns related to Business Correspondent's functionalities. In PNB, we have a separate department for financial closure. That department is having regular meetings with BCs. This way, we are closely monitoring them. However, we are looking at the transactions done by the BCs.
You have a recovery of Rs 5,532 crore in Q2 of FY24. Where did you see the recoveries mainly?
The recovery of the Rs 5,532 crore is not from a particular segment. It is in all accounts -- in MSMEs, agriculture, and the corporate side. We are not making the category division of recoveries coming. We have to see what the percentage of that particular sector is. The NPA percentage in all the sectors has reduced as compared to the June quarter.
Your write-off for this quarter is Rs 2,614 crore. What is your outlook for the end of this year?
I think it should remain within Rs 2,500 crore- Rs 3,000 crore every quarter.
What are your fund-raising plans?
If you see my capital allocation, it is more than 15 percent. Even if you see my Tier 1 capital, it is 12 percent. So, immediately there is no requirement for capital. Even the profit of Rs 3,000 crore that we have added in the first half has not been included in the calculation of the capital adequacy ratio.
So, as of date, there is no immediate requirement. We have already raised Rs Rs 3,000 crore. We are just watching the rates. If the rate is within our comfort level, obviously we will hit the market, otherwise not.
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