PNB-Nirav Modi scam: Bank hopes to recover in 6 months

Punjab National Bank (PNB) said on Tuesday that it will recover from the impact of the recent Rs 13,000 crore fraud in the next 6 months. The bank is working to improve its internal systems by incorporating analytics and artificial intelligence.

"With the help of third-party analytics, PNB will get access to contact information of PNB defaulters who have good credit record with other lenders and identify and automate profitable lending strategies and minimize credit and fraud risk," said Sunil Mehta, CEO and Managing Director at PNB.

Mehta spoke at the bank's circle heads' conference at its headquarters in Delhi.

Growth guidance from PNB's leadership for FY19 is pegged at Rs 12 lakh crore, which will account for a 10.8 percent year-on-year growth.

In a letter to employees, the PNB chief had mentioned that the bank has already reached a milestone by registering a 7.9 percent growth for 2017-18.

On February 14, PNB had disclosed that a Rs 11,400 crore fraud was detected at the bank involving diamantaire Nirav Modi and his uncle Mehul Choksi - both of whom are on the run from law enforcement officials.

Meanwhile, Mehta pointed out that PNB has "the capability and capacity to come out of this situation".

Niti Aayog CEO Amitabh Kant, who was present as the keynote speaker at the meet, ruled out privatisation of public sector banks (PSBs).

He said that the bigger challenge was the advent of new players in banking sector and emphasized the role that PSBs play in nation-building.

Further, the bank said that it has strengthened the process of underwriting credit to wean out the possibility of fraud and ensure fair evaluation.

The process has been divided into components with employees focusing on sourcing; appraisal, processing and underwriting; documentation and disbursement; and recovery.