PNB Bad Loan: The country's second largest government bank, Punjab National Bank (PNB) has made a big announcement to deal with Bad Loans. The bank has decided that it will sell about 100 such big accounts this year, for which loan recovery is not possible. The total money stuck in these accounts is between ₹4,000 to ₹5,000 crores. This step is a part of PNB's 'Maha-Plan' under which the bank wants to touch the huge figure of total business of ₹30 lakh crores by the end of this year. So let's understand this whole news in simple language that why the bank is doing this 'cleaning' and what effect will it have on you, i.e. customers.

What are NPA accounts and why is PNB selling them?

First of all, it is important to know what these NPA accounts are. NPA means 'non-performing asset', that is, such an asset (loan) of the bank which is no longer earning any income (interest). In common language it is called 'stuck loan' or 'bad account'. When a person or company does not pay its loan installment or interest for 90 days, the bank declares that account as NPA.

PNB MD and CEO, Ashok Chandra said in an interview, "We have identified more than 100 such accounts... whose total outstanding amount will be around ₹ 4,000-₹ 5,000 crores."

To whom will these accounts be sold?

The bank will sell these bad loans to 'Asset Reconstruction Companies' (ARCs). These are special companies that buy bad loans from banks at a discount and then recover the money in their own way.

How much money will be recovered?

Ashok Chandra said, "We expect at least 40-50% recovery." He also said that in some cases 100% recovery can also be done because good security is kept in exchange for those loans.

What is PNB's ₹ 30 lakh crore 'Mission Impossible'?

Selling NPA is just a part. The real target is very big. PNB wants to touch the milestone of total business of ₹ 30 lakh crore by the end of this financial year (by March 2026). In this, both the total loans given by the bank (advances) and the total amount deposited in the bank (deposits) are added. At the end of June 2025, PNB's total business was ₹ 27.19 lakh crore.

Ashok Chandra said, "Our target is ₹ 29.56 lakh crore, but we can reach ₹ 30 lakh crore by performing better than this."

How will this mega-target be achieved? PNB's 3-point strategy

Punjab National Bank has made an aggressive strategy to achieve such a big target:

1. Full speed now on corporate loans:

The bank is now showing great speed in giving loans to big companies.

Loans worth ₹ 1.29 lakh crore ready: Chandra said that corporate loans worth ₹ 1.29 lakh crore are in the pipeline, which will be distributed soon.

Decision in just 15 days: The bank has assured the companies that a decision will be taken on any loan application received at the head office within just 15 days.

Special team for project finance: A dedicated cell headed by a general manager has also been formed to finance large infrastructure projects.

2. Growth engines of MSME and retail loans:

The bank is seeing a spectacular growth of 17-18% in loans given to small and medium industries (MSME) and this will continue.

There is also a target of 17% growth in home, vehicle and education loans taken by common people.

3. New focus on farming:

The bank is now paying special attention to the agriculture sector as well.

Beat on Self-Help Group (SHG): The bank's biggest focus is on self-help groups, where the target is 30-40% growth this year.

Infrastructure in villages: The bank is also emphasizing on giving loans for facilities like food processing, warehouse and cold storage in rural areas.

Profit is the real 'king'

PNB MD said a very important thing. He stressed that we will not only increase the business figures, but will also ensure that the bank's profits increase from every work.

Record operating profit:

As a result of this thinking, the bank has recorded its highest ever operating profit of ₹ 7,081 crore in the first quarter itself.

Saying 'no' to expensive deposits:

Chandra said that the bank has now reduced bulk deposits (depositing a large amount at once) and corporate deposits to a great extent, because the bank had to pay more interest on these, which reduced profits.

Conclusion

Punjab National Bank is currently on a dual mission. On the one hand, it is cleaning the 'garbage' of its old stuck loans, while on the other hand it is building a huge and profitable building for the future. The target of ₹ 30 lakh crore business shows the aggressive intentions of the bank. By focusing on every segment, from corporate to farmers, PNB not only wants to remain the second largest public sector bank in the country, but also wants to become one of the most profitable banks. This move is a positive sign not only for the bank, but for the entire Indian economy.

Frequently Asked Questions (FAQs)

Question 1: What is NPA?

Answer: NPA means 'Non-Performing Asset'. It is a loan given by the bank, on which installment or interest is not recovered for 90 days. It is also called stuck or bad debt.

Question 2: What does ARC (Asset Reconstruction Company) do?

Answer: It is a company that buys NPA (stuck loan) from banks at a discount and then works to recover that money from the borrowers through legal means.

Question 3: What will be the impact of this move of PNB on common customers?

Answer: It will not have any direct impact on the customers. Rather, when the financial health of the bank improves, it will be in a position to provide better services and attractive interest rates to the customers.

Question 4: How big is the total business of ₹ 30 lakh crore?

Answer: This is a very big figure. For comparison, at the end of June 2025, Bank of Baroda had a total business of ₹26.43 lakh crore and Canara Bank had a total business of ₹25.64 lakh crore.

Question 5: Can PNB overtake SBI?

Answer: No, State Bank of India (SBI) is the largest bank in the country and its total business is much higher than PNB. PNB is currently the second largest public sector bank in the country.