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You can view full text of the latest Director's Report for the company.

BSE: 532461ISIN: INE160A01022INDUSTRY: Finance - Banks - Public Sector

BSE   ` 124.35   Open: 123.00   Today's Range 123.00
125.10
+1.60 (+ 1.29 %) Prev Close: 122.75 52 Week Range 44.60
133.00
Year End :2023-03 

Financial Year 2022-23 has seen green shoots of recovery in the global economy and improved supply chain financing despite risk of geo-political conflicts, rising inflation and consequent rate hikes by central banks.

For Indian Economy, it was a year of recovery and growth .The second advance estimates (SAE) released by the National Statistical Office (NSO) placed India's real gross domestic product (GDP) growth at 7.2 per cent in FY 2022-23 majorly driven by private consumption and public investment. The Industry experienced come back in terms of credit and deposits growth. FY 2022-23 experienced favorable business conditions and deleveraging of corporate balances-sheets. The overall size of deposits was around Rs.180 Lakh Crore and credit Rs.137 Lakh Crore yielding a credit deposit ratio of 75.8 per cent Growth in deposits at 9.6 per cent was higher than that of last year which was 8.9 per cent. The increase in interest rates by banks to mop up deposits helped in this effort. The growth in credit remained 15.0 per cent which was 11.2 percent last year. It was due to improvement of economic activities.

Punjab National Bank performed well up to the expectations of its stakeholders and exhibited reinforced performance during FY 2022-23. The Bank's Business reached the level of Rs. 21.66 Lakh Crore with a quantum increase of Rs. 2.35 Lakh Crore over previous year. Total deposits and Gross Advances both showed the double digit growth. As on 31st March, 2023, Deposits stood at Rs. 12.81 Lakh Crore while Gross Advances stood at Rs. 8.85 Lakh Crore.

Amongst Advances, Retail, Agriculture and MSME (RAM) Advances registered the growth of 20.85 per cent wherein Retail showed the growth of 41.62 per cent on YoY basis. In Retail Segment, Flousing Loan, Vehicle Loan and Personal Loan exhibited the growth of 10.92 per cent, 30.62 per cent and 48.87 per cent respectively.

Digitalization remained the focus area of the Bank as Bank came up with 35 Digital journeys towards better customer experience and improved Turn Around Time (TAT). Some of such journeys included Pre-approved Personal Loan, Pre Approved pensioner Loan, Pre Qualified Credit cards, Pre Approved e-mudra Loans, etc. This provided Bank an edge over its competitors in the Industry and enhanced delivery experience for the customers. Customer services remainedz

on top of the agenda of the Bank and digitalization added pace to improve the same in order to remain competitive and growing.

Asset quality of the Bank improved during the year through number of measures adopted by the Bank towards recovery and underwriting standards. The Bank's GNPA per cent came down to 8.74 per cent as on 31st March, 2023 from 11.78 per cent as on 31st March, 2022. Net NPA per cent also went below 3 per cent to 2.72 per cent as on 31st March, 2023 from 4.80 per cent as on 31st March, 2022. Provision Coverage Ratio of the Bank improved to 86.90 percent as on 31st March, 2023 from 81.60 per cent as on 31st March, 2022.

At PNB, Human resources is considered as important ingredient in the success of the organization. FY2022-23 was landmark year for the bank from HR perspective as the bank adopted HR Transformation. It's a tool that will aid the bank in efficiently utilizing its human resource by deploying the skilled staff at the appropriate place. Also, tool will help the bank in differentiating between performer and non performer and provide adequate rewards to the performer and proper skill training and learning to improve performance.

"Against this backdrop, your Board of Directors have pleasure in presenting the Annual Report of your Bank for the year ended 31st March, 2023 (FY2022-23) along with its audited Annual Financial Statements".

BANK'S PERFORMANCE

I. FINANCIAL PERFORMANCE AS ON 31st March, 2023

1. Topline

a. Total Business stood at Rs. 21,65,844 Crore vis-a-vis Rs. 19,31,322 Crore, registering YoYgrowth of 12.14 percent.

b. Total Deposits stood at Rs. 12,81,163 Crore as on 31st March, 2023 as against Rs. 11,46,218 Crore as on 31st March, 2022, showing the growth of 11.77 percent.

c. CASA Deposits was at Rs.5,38,015 Crore as on 31st March 2023 as against Rs. 5,33,654 Crore as on 31st March, 2022.

i. Current Deposits was at Rs.74,028 Crore as on 31st March, 2023

d. Gross Advances stood at Rs. 8,84,681 Crore as on 31st March, 2023 against Rs. 7,85,104 Crore as on 31st March 2022, recording the growth of 12.68 percent.

e. Retail Agriculture MSME (RAM) Advances was at Rs.4,69,981 Crore as on 31st March, 2023 vis-a-vis Rs. 3,88,910 Crore as on 31st March, 2022, showing the growth of more than 20 per cent on YoY basis,

i. Retail Advances was at Rs. 1,97,698 Crore as on 31.03.2023 registered the massive growth of 41.62 per cent on YoY basis.

ii. Agriculture Advances was at Rs. 1,46,105 Crore as on 31.03.2023 with growth on 14.34 per cent on YoY basis.

iii. MSME Advances was at Rs.1,30,178 Crore as on 31.03.2023.

iv. Corporate and other segment was at Rs.

3,79,785 Crore on 31.03.2023

v. Share of RAM w.r.t. Domestic Advances was at

55.3 per cent as on 31st March, 2023 vis-a-vis 51.2 per cent as on 31st March, 2022.

2. Bottom Line

a. Operating Profit of the Bank was at Rs. 22,529 Crore inFY2022-23showingYoYgrowthof 8.5percent. It stood at Rs. 20761 Crore. In FY 2021-22.

b. Net Profit of the Bank was at Rs. 2507 Crore in

FY 2022-23.

c. Net Interest Income was at Rs. 34,492 Crore in FY 2022-23 vis-a-vis Rs. 28,694 Crore, registering the growth of 20.2 per cent on YoY basis.

3. Asset Quality

a. Gross NPA of the Bank stood at Rs. 77,328 Crore as on 31st March, 2023, improving from the level of Rs 92,448 Crore as on 31st March, 2022.

b. Gross NPA % exhibited the decline of 304 bps from a level of 11.78 per cent as on 31st March, 2022 and

c. Net NPA of the Bank improved from as high as Rs. 34,909 Crore as on 31st March, 2022 to Rs. 22,585 Crore as on 31st March, 2023.

d. Net NPA % declined by 208 bps from a level of 4.80 per cent as on 31st March, 2022 and stood at 2.72 per cent as on 31st March, 2023.

4. Key Ratios

a. Net Interest Margin improved to 3.06 per cent in FY 2022-23 from 2.71 percent in FY 2021-22.

b. Cost of Deposits was at 4.10 per cent in FY 2022-23 as against 3.99 per cent in FY 2021-22.

c. Yield on Advances increased to 7.16 per cent in FY 2022-23 from 6.79 per cent in FY 2021-22.

d. Yield on Investment increased to 6.57 per cent in FY 2022-23 from 6.29 per cent in FY 2021-22.

e. Return on Average Assets was at 0.18 per cent in FY 2022-23

f. Business per employee improved to Rs 21.64 Crore as on 31st March, 2023 from Rs. 19.41 Crore in 31st March, 2022.

g. Business per branch improved to Rs. 209.53 Crore as on 31st March, 2023 from Rs. 187.73 Crore as on 31st March, 2022.

5. Capital Position

The capital adequacy of the Bank improved during the financial year on account of capital raising by the Bank coupled with improved profitability. During FY 2022-23, Bankhas raised Rs.4000 Crore through Tier-ll Bondsand Rs. 4214 Crore through AT-1 Bonds. The Bank continued with its focus on sustainable business growth by targeting better rated borrowers with low risk profile. Going forward, the Bank is strategically well placed to meet the growing credit needs of the economy.

Key Highlights

a. The Capital Adequacy Ratio of the Bank recorded increase by 100 bps to reach at 15.50 per cent, as of 31st March, 2023, with AT-1 capital at 1.47 per cent and Common Equity Tier-1 (CET-1) at 11.22 percent.

b. Risk Weighted Assets (RWA) of the Bank were optimized to Rs. 6,58,982 Crore as on 31st March, 2023 on account of focus on better rated accounts and churning of portfolio of the Bank and registered Y-o-Y growth of 9.68 per cent as against 12.68 per cent growth of advances during same period.

II. OPERATIONAL HIGHLIGHTS

1. Key Digital Initiatives & Achievements

PNB has embarked upon an ambitious digital transformation program. PNB has designed more than 35 digital initiatives across lending (Retail, MSME, Agri and Corporate), liabilities, Third-party products, and Asset Quality. Of these, The Bank is "Industry Leader" in the following digital initiatives

a. E-OTS (Express-One Time Settlement) for E2E digital settlement approval process for NPA Accounts having o/s balance upto Rs. 10 Lakh.

b. Digital journey for New To Bank (NTB) Credit Card:

Web-based interface for NTB customers to apply for Credit Card online

c. Credit Card Linkage to UPI: Enablement of Credit Card linkage to UPI through Virtual Payment Address (VPA)

d. Credit Card against Fixed Deposit: E2E digital journey for Existing to Bank (ETB) customers to avail the facility of Credit Card against FD

e. Co-Lending portal: Simplified Straight Through Processing (STP) based solution aiding collaboration with NBFCs having low API capabilities

f. Aadhar-based registration on Mobile App PNB ONE:

'Self-register' method allowing customers to register on PNBOnevia Aadharauthentication

g. Fintech on-tap portal: Platform to evaluate and empanel FinTechs on a unified digital interface

h. Bharat Bill Payment System (BBPS) for loan EMI: EMI

repayment using BHIM App and other BBPS supported apps like GPay, PayTM, PhonePe, etc.

i. New TIN (Tax Identification Number) 2.0 platform:

We are one of the first banks to go live on the new TIN 2.0 platform of Central Board of Direct Taxes (CBDT) from 1st December, 2022.

2. Key Structural and Cost Rationalization Initiatives

a. Three Divisions such as Customer Acquisition, Retail Liability Business and Credit Card & Merchant Acquiring Business have been merged to form Business Acquisition and Relationship Management Division (BA and RM Division) to provide focused approach on acquisition of liability side Business and Marketing of Bank's Products and Services. New vertical like Digital Banking Transformation was also formed to give focused attention to digitalization.

b. Rationalization of 2 Zonal Offices, 23 Circle Offices to achieve cost-efficient admin structure.

c. Rationalization of 431 unprofitable offsite ATMs completed; another 500 planned.

d. Rationalization of more than 140 branch offices during FY' 2022-23

e. Rationalization of 20 cr monthly SMSs to reduce cost overhead.

3. HRTransformation-Key Initiatives

Human resource is the most important asset for any organization involved in providing service and therefore it is essential that organization undertakes steps for skilling, upskilling, reskilling, increasing efficiency of human assets for overall growth of the organization. The Bank assigns high importance to the same and takes up various initiatives from time to time to develop the human resources for taking up higher and newer roles and responsibilities.

Taking a step further in this direction, a comprehensive HR Transformation process has been initiated in the Bank with the focus on improving employee productivity, strengthening various systems and procedures through system driven data & tools in the following ways:

a. Market-linked targets for each branch and Clarity of roles & expectations from each employees with well-defined, measurable Key Responsibility Areas (KRA).

b. Comprehensive leadership development program to prepare future Bank leaders on functional and behavioral aspects.

c. Personalized, role-based training interventions to upskill functional capabilities and Performance linked rewards to acknowledge & motivate contributors.

4. DIVIDEND

Board of Directors of the Bank has recommended a dividend of Rs.0.65 per equity share (32.5 per cent) of face value of Rs.2/- each for FY 2022-23, subject to declaration/approval of the shareholders at the 22nd Annual General Meeting of the Bank.

III. ASSET QUALITY

The Bank was able to reduce Gross NPAfrom the level of Rs.92,448 Crore as on 31st March, 2022 to Rs.77,328 Crore as on 31st March, 2023. Focus on asset quality continues to be one of the top priorities for the Bank. Provision Coverage Ratio (PCR) including TWO continued at satisfactory level of 86.90 per cent as on 31st March, 2023.

1. Recovery & Upgradation: Total Recoveries improved to Rs. 24,576 Crore for FY 2022-23 from Rs. 21,041 Crore in FY 2021-22. Of this, total Cash Recoveries (Cash Recovery Recovery in TWO Rl) improved to Rs. 19,806 Crore for FY 2022-23 from Rs. 15,788 Crore in FY 2021-22.

2. Upgradation through Resolution Mechanism: The Resolution Cell was created to exclusively deal with Restructuring/Resolution of NPA accounts and recovery in National Company Law Tribunal (NCLT) cases. The details regardingthe same is as under:

Restructured Accounts (Amount Rs. in Crore)

Total Sanctioned

No. of A/c's

Amount

FY 2022-23

09

1129.06

Further, a sum of Rs.3,206 Crore was recovered in NPA accounts under IBC in NCLT.

3. Mega E-auctions: During FY 2022-23, 23,315 properties were uploaded on e-Bikray portal. Out of which, 1,657 Immovable Properties (IPs) were auctioned successfully.

4. Sale of Assets to Asset Reconstruction Company (ARC): Details of financial assets sold to Securitization/ Reconstruction Company (SC/RC) for Asset Reconstruction is as under:

(Amount Rs. in Crore)

Items

FY 2022-23

i.

Number of Accounts sold to ARCs

7

ii.

Book Outstanding of Accounts sold

1409.12

iii.

Aggregate Consideration received

617.71

5. Initiatives taken to Improve Asset Quality during FY 2022-23

a. War against NPA campaign

i. Dedicated tele-calling campaigns and rigorous field visits to N PA borrowers

ii. Field functionaries are Involved for targeted recovery actions

iii. Launched 21 SASTRA booklets containing strategy and tactical procedures to increase recovery

b. Digitization of recovery efforts

i. Launch of industry-first digital OTS offering for NPA recovery for eligible a/cs upto Rs 10 lakh.

ii. Recovery portal -SAMARTH underdevelopment

c. Digital e-OTS journey for robust recovery- This

provide instant and easyloan repayment option.

i. e-OTS is a digital OTS approval process on filtered NPAAccounts having outstanding amount up to Rs.10 Lakh, in which all the steps from applying for OTS to sanctioning of OTS & steps involved thereafter are automated. The solution has been rolled out through PN B official website & PN B ON E App.

ii. PNB is the first Bank to launch such kind of an online automated OTS approval process.

iii. To enhance the outreach of available Special OneTime Settlement Scheme (SOTS) and to target small NPA Accounts, e-OTS can prove to be a very effective tool in the recovery process.

iv. Settlement approval process shall be expedited for small loan NPA accounts and OTS approval TAT will get reduced substantially.

v. The recovery generated through this process, will have a positive impact on the overall profitability of the Bank, especially in DB3and Loss accounts.

vi. Convenience to eligible NPA Account borrowers as under e-OTS process, Sanction Letter and No Dues Certificate shall be generated online.

d. Overhaul of Outbound Call Center

i. Technology and process enablement of outbound Call Centres to increase efficiency.

ii. Agent ramp-up & robust Standard Operating Procedure (SOP) for SMAO, SMA1, and SMA2 calling.

IV. INFORMATION TECHNOLOGY (IT) AND

DIGITALIZATION

Progress in Digital Banking

(Number in Lakh)

Channels

31.03.22

31.03.23

Growth

Absolute

%

Internet Banking Users

340

392

52

15.3

Mobile Banking Users

338

406

68

20.1

Digital initiatives and journeys: For delivering superior customer experience and process excellence following initiative were taken.

LIABILITY:

1. In order to reduce TAT and improve customer service, the Bank introduced the following three products:

a. Tab Based Saving Account (SA) Opening

b. Insta Saving Bank (SA) Account

c. Tab based Current Account (CA) Opening

2. Public Financial Management System (PFMS) 2.0 Integration with PFMS External System Model 1

3. FIP (Financial Information Provider) Account Aggregator: Enablement of account aggregation service for PNB.

4. Implementation of Finger Print Image Recognition (FIR) Finger Miniature Record (FMR) in Aadhaar based biometric authentication at BC Location.

5. Deposits in PPF accounts through NEFT: A new

facility has been provided to customers for depositingin PPFaccountthrough NEFT.

6. Customize single API call for Instant eKYC through BC location

7. CKYC bulk email: Now the customers receive mails on their registered email ids intimating their CKYC details as per PMLA(Maintenance of Records) Rules, 2005.

8. Implementation of SMS to waitlist customer in Locker Module

9. Cash Deposit off-us facility has been made live and through this facility our bank customer visits other bank's BC location fordepositingcash &vice versa.

lO.Implementation of Green PIN functionality in case of World Travel Card and Prepaid cards

ll.Standardization of SMS Alerts to customers: SMS

alerts be sent when our bank customer visits other banks BC location fordepositing cash&vice versa.

RETAIL

1. Pre-Approved Personal Loan to existing customers (Central Govt. /State Govt. / PSU/ PVT.

Employees) in Internet Banking & PNB ONE:

Financial assistance to the Bank's existing customers who are salaried (Govt, employees /PSU's)fortheir personal needs.

2. Pre-Approved Personal Loan on the basis of Total Relationship Value (TRV), Quarterly Average Balance (QAB) and Top Up Digital Personal Loan to existing Housing Loan/Vehicle Loan/Personal Loan Borrowers: In order to give boost to digital lending, new variant of “Pre-Approved Personal loan to existing Car loan, Home loan and Personal loan borrowers, in addition to Pre-Approved Personal Loan facility to existing customers (Central Govt./ State Govt./PSU/PVT. Employees and Pensioners) has been launched by the Bank

3. Pre-Approved Pensioner Loan: Financial assistance (through Personal Loan) to the Bank's Customers whose pension is drawn through our Bank.

4. Pre-Qualified Credit Card : To strengthen and broaden our credit card portfolio and also in an endeavor to extend our digital products, the Bank launched Pre-Qualified Credit Card through which selected customers of PNB can apply PNB Credit Card in just few clicks

5. e-OD against offline FD: Online Overdraft Facility (e- OD) through PNB ONE against offline fixed Deposit also.

6. Credit Card Digital On-boarding

7. Debit Card EMI (Buy now Pay Later): Debit Card EMI (Offline) on POS machine

8. PNBAgni-RakshakforPNB Rakshak Plus scheme-SBARK made live.

MSME

1. Pre-approved e-Mudra loans: Financial assistance to the Bank's existing customers/entrepreneur with Maximum Amount of Rs. 50,000/-

2. Pre-approved Business Loan: To offer straight through digital lending loan facilities above Rs. 1.00 Lac to Rs. 10 Lakh under Business Loan

3. PNB e-Mudra Scheme: End to end digital lending upto Rs.1.00 Lakh has been launched.

AGRICULTURE

1. Digital Journey of Agriculture Loan Segment: KCC

Renewal < Rs.1.6 Lakh: Digital Renewal of KCC has been started on the following channels also:

a. Through SMS/Missed Call/ Outbound Interactive Voice Response (OIVR)

b. Through PNB ONE App; PNB Internet Banking & PNB Corporate Website.

2. Easy Renewal upto Rs 10.00 Lakh : End to end digital renewal will be done for all eligible borrowers having exposure upto Rs.10.00 lakh.

3. Digital Journey of PNB Kisan Tatkal Rin Yojana: End to end Digital Journey for PNB Kisan Tatkal Rin Yojana to give hassle free digital experience and ease to small farmer borrowers.

4. Digital KCC journey through Jansamarth Portal:

Bank customers can avail KCC loan up to Rs. 1.60 Lakh through Jansamarth Portal. Entire loan journey from loan application till KCC account opening completes within Jansamarth portal in a paperless and hassle free manner.

ASSET QUALITY& RECOVERY

1. Loan Repayment through Corporate Website: To facilitate Term Loan EMI Repayment through PNB Corporate Website, customer can visit PNB Corporate website, click on link and enter loan account number and amount to be paid and make payment.

2. Express One Time Settlement (e-OTS) Portal: The Bank launched first of its kind End to End Pre-Approved One Time Settlement (PAOTS) system with focus to automate the OTS process in NPA Accounts up to Rs.10 Lakh.

3. RinnSetu Co-Lending Development Platform (CLDP) Portal: Web Portal has been developed through which leads are going to be generated through various Co-Lending partners, and those leads shall be processed through this portal for sanctioning of loans.

GOVERN M ENT BUSIN ESS

1. SMS alerts to Customers for informing date of maturity of PPF accounts

2. 24*7 deposit in Public Provident Fund (PPF) &

Sukanya Samridhi Accounts (SSA) through internet banking/PNB ONE Passbook Printing with Additional Transaction Information.

FOREX

1. Dubai International Financial Centre(DIFC): Separate website created for overseas branch-PN B Dubai Website- https://pnbdubai.com

2. New facility has been implemented for TDS certificate (26Q) generation on request of customers using the Bank's IVR.

3. Implementation of TIN 2.0 (Tax Information Network) for Online and Over The Counter (OTC) Mode of Payments.

4. CBS Trade Finance module for sending payment advice in the email to customer through Bulk mail solution: Changes has been made in existing system to link the payment advice through mail automatically on realization of Bills & Remittance in CBS.

MOBILE BANKING (PNB ONE) & INTERNET

BANKING

1. PNB ONE Registration Without Debit Card: With introduction of this alternate on boarding process, customers can avail PNB ONE without any hindrance and can enjoy banking services from anywhere

2. In PNB ONE - Scan & Pay and UPI Payment Using IFSC & Account Number: Keeping in view of emerging need of customers for quick payment, Scan & Pay feature has been provided to allow users to transfer money using QR code - Bharat QR code & U PI QR code through PN B ON E.

3. Onboarding for PNB ONE Using Aadhaar OTP: To

increase the adoption of PNB ONE and further facilitate the customers, “Aadhaar OTP" as additional authentication medium for Self Registration in PNB One has been introduced.

4. Replacement of Transaction Password with Transaction Pin (TPIN) For PNB ONE: To make PNB One more user friendly, Transaction Password has been replaced with 4-digit Transaction PIN (TPIN).

5. CASH @ PNB- CARDLESS cash Withdrawal:

Card-less Cash Withdrawal is a service which

enables customer to withdraw cash at PNB ATMs without holding any physical or virtual card. The facility is available to customers registered for IBS and PNB One.

6. OTP Waiver upto Rs. 5000/- in SCAN and PAY in PNB One: For customer's ease & to increase use of PNB One, all QR payments up to Rs.5000/- can be done using 4-digit Transaction PIN (TPIN) only instead of TPIN & OTP both.

7. Loan repayment facility through Bharat Bill Payment Services (BBPS) and PNB corporate website: With these two newly added channels a customer can repay the Term Loan from accounts of other banks also.

8. Online Self Registration of Sole Proprietor in Retail Internet Banking & PNB One: To enhance digital services to customers, the facility has been extended to proprietorship concern also.

9. OTP on E-MAIL in Retail Internet Banking: To

facilitate our customers, users of Retail Internet Banking get OTP over E-mail

10.SAFETY RING in PNB One & Internet Banking:

This enables a customer to set limit on maximum withdrawal of funds from total amount of Term Deposit accounts through all digital channels. Once the limit is set, the Term Deposits will not be broken/withdrawn/used for loan against Term Deposits through IBS/MBS beyond the limit set by the customer, unless a modification for the same is done.

ll.Customer can now check his/her KYC Status like KYC Date, CKYC Number and KYC Due Date through PNB One.

12.lmmediate Payment Service (IMPS) or Quick Fund Transfer using IFSC and account number through PNB One /Internet Banking: PNB One/ Internet Banking now allows Quick Fund Transfer up to Rs. 10,000/- without adding beneficiary using IMPS-IFSC& within Bank.

13. Addition/Updation of Nominee functionality in IBS/M BS for convenience of customers.

14. Debit Freezing of Account through IBS/MBS as a security measure for safety of customer.

15.lmmediate Payment Service (IMPS) for Corporate IBS Customers.

16.Showing emergency Services in one Tab in PNB One.

a. Earlier services: Hotlist Debit Card, Stop Cheque, Generate Green Pin.

b. Addition: Report Lost Credit Card, Set Limits, Block UPI, Debit Freeze, Restrict FDfore-OD.

17. PNB SHOPPE (E-market place) in PNB One and Internet Banking: Bank introduced PNB Shoppe in PNB One and Internet Banking. PNB Account holders will now be able to earn extra rewards for their day to day shopping needs

18. QR code generation through PNB One and Retail Internet Banking: QR Code Generation facility has been introduced in PNB One and Retail Internet Banking. Customers can now display QR Code to receive payments instantly through UPI

19. Banking Services through WhatsApp: Bank has introduced Banking Services through one of the most popular application - WhatsApp (in Hindi & English Language) with features such as Balance Inquiry, Last 5 Transactions, Cheque Book Registration and Stop Cheque Facility.

UPI

1. Credit on UPI- Enable linking of RuPay Credit Card on UPI for making merchant payments.

2. UPI Lite-The customers can make small payments of up to Rs 200/- using on-device "wallet”.

3. Onboarding in UPI Using Aadhar OTP-

Authentication In lieu of Debit Card for Customer On-boarding on UPI. In lieu of debit card, customers can now set UPI pin using Aadhaar number registered in bank.

4. Aadhaar OTP Based On-boarding in lieu of Debit Cards: Customers can set UPI pin using Aadhaar numberand OTP.

5. Unified Dispute and Issue Resolution (UDIR)-Enhancing complaint handling & resolution process for all UPI users: With Implementation of UDIR, customers can initiate status enquiry & online settlement for UPI suspect/time-out transaction instead of waiting for reconciliation on

T lday.

6. Set UPI PIN through Virtual Debit Card:

Customers can set UPI PIN through virtual debit card, in addition to physical debit card and Aadhaar.

7. Implementation of Operating Circular (OC)-153: Geo-location capturing in BHIM PNBApp.

8. BHIM 2.0: Implementation of recurring mandates in BHIM PNBApp.

9. Blocking UPI through IVR: Customers can block UPI through bank's IVR number

10. e-RUPI for Department of Tribal Welfare, Tripura:

As per government initiative to issue E-RUPI vouchers for various DBT schemes, bank has partnered with Department of Tribal Welfare, Tripura for providing assistance to tribal students for hostel accommodation.

11. UPI 123PAY: Customers can use UPI through IVR based channel, which would benefit the feature phone users and customers in low connectivity zone

12. Auto-Pay functionality in BHIM PNB app:

Customers can create recurring mandates through BHIM PNB app for scheduled/recurring payments

13. BHIM 2.0- Implementation of recurring mandates in BHIM PNBapp.

Cash Management Services (CMS)

Integrated payments and collection services (iPaCS) for corporate and institutional customers: The first module of iPaCS system to go live is the Integrated Payments services which enables the corporate/ institutional customers to initiate bulk payment transactions through various modes by way of a file-upload through the Corporate Front-end or by automating the entire process by way of dedicated Host-to-Host (H2H) interface (both Secure File Transfer Protocol (SFTP) and Application Programming Interface (API) based) with their Enterprise Resource Planning (ERP) systems.

Fintech Portal

Web based Fintech portal enabling fintechs to request for empanelment in bank: Fintech companies to register on Bank's Fintech portal as per selection criteria and submit their proposal for empanelment in our Bank. This facility will help bank to engage with new FinTech Companies by onboarding them via empanelment process and on tap basis to cater to bank's requirement in various segments/domains.

V. MANAGEMENT INFORMATION SYSTEM

Analytics Centre of Excellence (ACoE): Bank believes in harnessing the power of both big data and small data not only to drive decision-making and operational excellence but also to provide personalized experiences to increase customer delight. Bank also aims to set-up analytical function in the Bank and move towards data-driven organization.

To align with the present and future strategic business requirements of PNB, to gain competitive edge and to cater to the needs of creating advanced digital capabilities for Bank, Model based business leads are being generated on various personal segment.

Enterprise-Wide Data Warehouse (EDW): The Bank has operational Enterprise Data Warehouse project catering various analytical/statutory/ regulatory and reporting/ dash-boarding requirement with data from 60 plus source systems being integrated into EDW. All downstream applications are receiving data through EDW and also all data requirements for various digital journeys are catered.

Data Analytics: The Bank has set up a Data Analytics Centre of Excellence (CoE) with an objective of setting-up analytical function to provide insights. Analytics is being conducted on broadly three verticals- Business, Control and Support, with objective of new value-creation, cross-sell and up-sell opportunity, increasing revenue, cost reduction, product enhancement, channel optimization, default loan prediction, maximizing digital footprint and improve risk profiling of the customer base. Data Analytics has also initiated steps towards setting up of analytical functions in the bank which is to be aligned with business strategy. Analytics 360 is a step towards bringing insights in day to day business decision making. Statement analyzer, Customer's propensity score, customer's digital profile score & collection propensity score are few initial use cases being developed. Analytics driven various digital journey have been undertaken such as Pre Approved Personal Loans (PAPL), Pre Approved Business Loan (PABL), Debit Card EMI, e-

RENEWAL, e-GST EXPRESS, Pre Qualified Credit Card (PQCC) etc.

Next Level Reforms: With EDW in Place, the Bank is well prepared to achieve the Action Points under next level reforms in PSBs for short Term and Long-Term targets like digital transformation & enhancement, Big Data Analytics, adoption of change in Banking Technology, focused use of Fin-Tech and improvement in Employee engagement through Analytics.

VI. BRANCH NETWORK

1. Domestic Presence: As on 31st March, 2023, the number of branches were at 10,076. The population-group wise branches along-with the percentage share are given as under:

2. International Presence: As on 31st March, 2023, Bank has its overseas presence in 6 Countries by way of 1 branch at Dubai (another 1 branch at GIFT City Gujarat also caters to the international business of the bank), 2 Subsidiaries (London-UK and Bhutan), 1 Joint Venture (Nepal), 2 Representative Offices (Myanmar and Bangladesh).

VII. INTERNATIONAL BANKING

As on 31s1 March, 2023, there were 233 branches authorized to handle Foreign Exchange Business and 4 Trade Finance Centers functioning at New Delhi, Chennai, Kolkata & Mumbai specialized for centralized handling of trade transactions and International Service branch for all Inward remittances. The Bank has 6 Exchange Bureaus at important tourist centers to facilitate encashment of Foreign Exchange Currency Notes by foreign tourists/NRIs.

1. Domestic Business

The Bank registered a Foreign Exchange Business Turnover of Rs.1,39,990 Crore (Exports and Imports together) for the FY 2022-23 registering YOYgrowth of 11 percent.

We have an International Service Branch (ISB) functioning at New Delhi for handling Inward Remittances of the Bank as a whole. During FY 2022-23, Bank handled remittance business of Rs.67,805 Crore.

Our Bank has Rupee Drawing Arrangements (RDA) with 13 exchange Houses (7 in the Gulf, 1 in Singapore, 2 in the USA, 1 each in UK, Canada and Seychelles) to facilitate remittance from NRIs.

The Bank also has remittance arrangement under Money Transfer Service Scheme (MTSS) with Transfast Financial services Pvt. Ltd. and Ria Money transfer services Pvt. Ltd.

2. Overseas Business

Overseas business of the Bank stood at Rs.64,440 Crore as on 31st March, 2023 registering YOY growth of 37 per cent. Overseas branches are focusing on High Quality Medium/ Long term Assets to build a diversified loan portfolio with low Credit Risk Weight to improve profitability.

3. Steps Initiated for Forex Business growth:

a. 87 Export Promotion Council (EPCs) have been visited on Pan India basis during the FY 2022-23. Further, all the Zonal offices continue liasoning with Export promotion councils for sourcing new relationships.

b. 153 Exporter/ Importer meets were conducted on Pan India basis to address their grievances in respect of Forex business during FY2022-23.

c. Trade Finance portal forTrade Finance Products:

Exporter and Importer can submit all types of tradefinance request through the portal.

d. Outward remittance facility for Resident Individuals through Net-Banking: The Bank launched Outward Remittance Facility for resident individuals for remitting funds under LRS through Internet Banking. This gives ease to retails customers for remitting for the purpose of Gift, Donation, Travel (Business, Pilgrimage, Medical Treatment and Education) and Maintenance of close relatives.

e. A facility of sending direct intimation to customers in respect of Inward remittance was introduced. International Service Branch (ISB) has started sending mails directly to customers with respect to their inward remittances which reduces the TAT of inward remittance transactions.

f. Dedicated customer care desks are made available in all Trade Finance Centres (TFCs) to help trade finance customers. The contact details are also placed on PNB Corporate website.

g. A dedicated email ID eximcust@pnb.co.in has been created exclusively for trade finance customers for their forex related operational issues which is directly being handled at Head Office.

h. International Banking Unit (IBU), GIFT City Gandhinagar branch of the Bank was opened on 08.04.2022. The major products offers in the branch are Cash Management Service, Forex Services, External Commercial Borrowings, Foreign Currency Term Loan, Trade Finance etc,. Branch booked profit of Rs.28.85 Crore in FY 2022-23.

VIII. BUSINESS DIVERSIFICATION

Insurance Business

1. Life Insurance: The Bank solicits Life Insurance Business under Corporate Agency Agreement with the following Life Insurance companies:

a. PNB MetLife India Insurance Co. Ltd (PM LI)

b. Life Insurance Corporation of India (LIC)

2. Non-Life Insurance: Bank solicits Non-Life Insurance Business under Corporate Agency Agreement with the following insurance companies:

a. The Oriental Insurance Co. Ltd. (OICL)

b. Bajaj Allianz General Insurance Co. Ltd. (BAGIC)

c. Cholamandalam MS General Insurance Co. Ltd. (CHOLAMS)

d. Care Health Insurance Ltd. (CHIL)Star Health & Allied Insurance Co. Ltd. (SHICL)

Bank's commission income from insurance business (both life & non-life) stood at tentative Rs. 428 Crore during FY 2022-23. During FY 2022-23, Bank registered a YoY growth of 8.6 per cent in such income.

3. Mutual Funds: Bank is a distributor of Mutual Fund products of the following Asset Management Companies:

a M/s Sundaram Asset Management Pvt. Ltd (previously known as Principal Asset Management Pvt. Ltd).

b. M/s Nippon Life Asset Management Ltd.

c. M/s UTI Asset Management Company Ltd.,

d. M/s Aditya Birla Sunlife Asset Management Company Ltd.

e. M/s LIC Mutual Fund Asset Management Ltd.

f. M/s DSP Investment Managers Pvt. Ltd.

g. M/s Franklin Templeton Asset Management (India) Pvt. Ltd.

h. FISDOM is also providing MF Aggregator and Robo-Advisory services to existing invested customers only and providing commission to the bank on revenue sharing basis.

During FY 2022-23, Income of Rs. 8.26 Crore was earned with YoYgrowth was 34.3 percent

4. Depository Services: As a Depository Participant, Bank opened 15,314 Demat Accounts during FY 2022-23 against 11,627 in FY 2021-22 with a YoY growth of 31.7 per cent and 18,538 Online Trading Accounts in FY2022-23 against 12,016 in FY2021-22 with YoY growth of 54.3 percent.

Out of 15,314 Demat Accounts, around 9466 i.e., 62 per cent of De-mat accounts was opened digitally through Insta-Demat available on IBSand MBS.

Income earned in FY 2022-23 from Depository services was Rs. 5.71 Crore against Rs.3.48 Crore in FY2021-22.

5. Application Supported by Blocked Amount (ASBA) & Merchant Banking: Bank has license to act as Banker to Issue, Debenture Trustee and Merchant Banker. During FY 2022-23, 297 number of issues were handled against 217 in FY 2021-22 with a YoY growth of 36.9 percent.

The amount blocked through ASBA was Rs.8211 Crore in FY 2022-23 against Rs.5442 Crore in FY 2021-22 with a YoY growth of 50.9 per cent and Income of Rs.2 Crore was earned during FY2022-23 against Rs.0.61 Crore during FY2021-22.

6. New Initiatives

a. Life Insurance: Bank has added two new Life Insurance Products in its bouquet:

i. PNB MetLife Grand Assured Income Plan - An annuity product for regular income to customer.

ii. PNB MetLife Mera Term Plan Plus - A pure Term plan forcomplete Life riskcover.

b. Non-Life Insurance Business

i. On the basis of Request for Proposal (RFP), fresh Agreement with two companies has been executed, Star Health & Allied Insurance Co. Ltd for Health Insurance & Cholamandalam MS general Insurance Co Ltd for General Insurance business fora period of3years.

ii. Launched Travel Insurance product covering the financial loss caused to the Bank customers during travel or journey within India.

iii. Credit Linked Health & Group Personal Accident Insurance Product providing financial assistance to borrowers and protect the loan accounts covering entire Sum assured/EMI to the loan account holders in case of detection of Critical illness or unfortunate events such as Permanent Total Disability (PTD)/Personal accident, hospitalization, loss of job etc.

iv. Motor Insurance product “Pay as you consume” gives an option to the insured to covertheir private car as per the usage and get rewarded for Safe Driving.

v. Incorporation of “Exception Check” in Finacle during verification of Asset Insurance Bank financed assets wherein non partner option is selected which has increased our Asset Insurance business byapprox. 2 percent.

vi. Analytical leads on various parameters for potential business generation is shared to field.

c. Depository &ASBA Business:

i. Discount brokerage: The Bank in coordination with M/s SMC Global Securities Limited has introduced discount brokerage facility, which is very popular in the present trading market. It offers Zero Brokerage for delivery and flat Rs.15 for Intra-day trading.

ii. Online mutual fund conversion and redemption:

It has been proposed to make available a facility in retail IBS and MBS, using which Bank's NSDL Demat account holders can convert their singly held Mutual fund units to Demat form and Customers can request for redemption of their singly held Mutual Fund units in Demat accounts online. The facility once developed will reduce TAT for such requests, in comparison to presently available physical mutual fund conversion and redemption request process.

d. Lead Management System: A new channel i.e. Branch Walk-in for capturing customers request through Finacle-CBS, has been made effective during FY 2022-23, through this facility leads of customers who shows interest in Third Party Products are captured.

Bank has also initiated the process of procuring new CRM system (through RFP), which would be more advance, feature loaded and would be at par with other applications used in the industry.

e. Defence Business: Defence Business Cell (DBC) is established for strengthening PNB's banking business with Indian Armed forces, Paramilitary and Police forces.

The Bank has already engaged retired Major General as Chief Defence Banking Advisor and expansion of DBC is underway by engaging more retired Defence Officials as advisors to be deputed at different locations across nation mapped with major defence establishments.

During the previous financial year, Bank has entered into MOU for the first time with Assam Rifles, Indian Air Force, Himachal Pradesh Police and also renewed MOUs with Indian Army, Indian Navy, Indian Coastguard for extending Banks flagship products for defence personnel.

The Bank solicits business from Defence Forces personnel and organizations through its network of offices and terms in the field. During the year, the bank's business from Defence Vertical gained as mentioned hereunder:

i. Defence salary/pension accounts under Bank's flagship Rakshak plus scheme grew 2.6 per cent on YoY basis.

ii. In real terms the value of business under the Defence Segment (Salary / Pension) grew by 2 percent on YoY basis.

iii. The gross relationship value which includes salary / pensions as well as organization accounts, is over 3700 crores as on 31s1 March, 2023.

IX. GOVERNMENT BUSINESS

With a view to play a more proactive role in the transfer of funds from Centre and States to various beneficiaries, the Bank has a an exclusive Government Business Division (GBD) which is one of the Business Divisions of the Bank. The GBD looks after various functions such as Pension, Processing & Disbursement, small savings schemes of the Government, Direct & Indirect Taxes Collections and Currency Chest Management. Bank is also accredited banker to nine different Central government departments post amalgamation. These numbers will further rise. Bank has been increasing tie-ups with various State governments to caterto their specific needs.

Key Initiatives taken up under Government Business are as under:

1. Fastag: National Electronic Toll Collection Project has been implemented and all branches have been enabled for issuance of Fastags.

2. TIN2.0: We are one of the first banks to go live on the new TIN 2.0 platform of Central Board of Direct Taxes (CBDT) from December 1, 2022. Direct Taxes can be paid on the website https://eportal.incometax.gov.in through Internet Banking, Debit Card and Over the Cou nter (Cheque/ D D/Cash).

3. Bank has integrated with the new Central Board of Indirect Taxes and Customs (CBIC) e-payment platform - Electronic Cash Ledger (ECL) of Indian Customs Electronic Data Interchange Gateway (ICEGATE), through Internet Banking. It was made live on 1st April, 2023.

4. Old Government Business Solution Software (GBSS) upgraded to new GBSS system and it was made live on 15.03.2023. The new GBSS is robust enough to handle large volume of data for pension processing.

5. Our Bank is disbursing pension of approximately 8.5 lakh pensioners i.e. Central Govt, Defense, Railways,Telecom and state Government.

6. National Pension System (NPS): All the Branches of our Bank are enabled for NPS transactions. Online facilities for NPS Registration and Contribution is also available through our website (https://www.pnbindia.in/nps.html) as well as PNB ONE App. Total number of NPS subscribers associated with our Bank as on 31st March, 2023 is 116825. The Bank is also providing NPS facilities to 27 corporates under Corporate Model.

7. Govt. e-Market Place (GeM): The Bank is providing facilities of GeM pool account, e-PBG (Performance Bank Guarantee) & e-EMD (Earnest Money Deposit) on Government e-market place to sellers and purchasers.

8. Public Financial Management System (PFMS): The Bank has timely disbursed funds of approximately Rs. 3704 Crore to about 66 lakh beneficiaries under PM Kisan Samman Nidhi.

9. Through active marketing, more than 80861 PPF, 69596 Sukanya Samridhi Accounts and 48981 Senior Citizen Saving accounts were opened duringthe FY2022-23.

10. Four Series of Sovereign Gold Bond subscription launched by Government of India were marketed by our branches and 683 Kgs were sold.

11. We are having integration with various states and collecting online and offline taxes through their Cyber Treasury Portal and collection of VAT is done in 19 States.

12. Collection of taxes (Direct & Indirect) is being done through offline and online on PAN India Basis. We are one of the major collectors of taxes for Central & State Government.

X. TREASURYOPERATIONS

The liquidity remained mostly comfortable in FY 2022-23 in the Banking system. However, to contain the rising inflation, Reserve Bank of India (RBI) has increased the Cash Reserve Ratio (CRR) to 4.50 per cent from 4.00 per cent of NDTL in May'22. Further, RBI has also absorbed liquidity from the system through various tools such as Variable Reverse Repo Rate(VRRR).Atthesametime, RBI was always there to infuse liquidity, whenever, it was required through variable repo rate auction.

Our Gross Domestic Investments stood at Rs.3,99,830 crore as on 31s1 March, 2023 with YoY growth of 6.6 per cent.

The Bank actively traded in SLR and Non-SLR securities throughout the financial year. Total Trading Profit for FY2022-23 was Rs.1047 Crore.

1. Fixed Income (SLR/NSLR)

Easy monetary policies across the globe during the pandemic period and the conflict between Russia and Ukraine, which disrupted supply chains and caused a rise in energy and other commodity prices sent inflation rates worldwide above the Central Banks' targeted range.

This forced Central banks across the globe to tighten financial conditions by increasing policy rates. The Reserve Bank of India (RBI) was no exception. To combat sticky inflation, the RBI increased the repo rate by 250 basis points from 4.00 per cent to 6.50 per cent in FY 2022-23, which reduced liquidity from almost Rs.7 Lakh Crore in the beginning of Financial Year to Rs. 1 Lakh Crore by the end of Financial Year as per RBI data. This resulted in hardening of yields across the curve with 1-year T Bill reaching a high of 7.48 per cent and 10-year benchmark G-sec yields touched the high of 7.62 percent.

In the Union Budget for the FY 2023-24, estimated gross borrowing of the Central government was announced at Rs.15.43 Lakh Crore, largely in line with the market expectation and the gross fiscal deficit was estimated at 5.9 per cent of GDP. Overall, a fiscal consolidation of 50 basis points has been achieved, along with a push on investment.

2. Equity & Mutual Funds

FY 2022-23 proved to be a rough year for equity markets. The turbulence can be attributed to interest rate hikes, liquidity tightening, foreign investment outflows, geo political tension and the resulting soaring of fuel and food prices.

The S&P BSE Sensex closed at 58,991.52, while the Nifty 50 closed at 17,359.75 on 31sl March, 2023. Over the past one year, the S&P BSE Sensex gained

0.72 per cent while the Nifty 50 declined 0.6 per cent during the same period.

3. Forex

USD/INR traded in the range of 76 to 83 per dollar during the year. The Indian Rupee depreciated against USD during the year on account of geopolitical tensions, rate hikes by US FED to contain rising inflation, hardening US treasury yields, which led to outflows of USD from Indian economy. However, rupee performed better than most of the other emerging market currencies. It finally closed at USD/INR 82.1750 on 31st March, 2023.

XI. CUSTOMERCARE

The Bank fully realizes the importance of customer service and continues to lay utmost priority to render prompt and efficient service to customers. To achieve the objective, the bank has introduced many digital initiatives in the past year to enhance the customer experience like online debit and credit card, preapproved personal loan, whatsapp banking, revamped PNB One with many added features etc. In order to achieve the desired objective, the Bank has formulated a robust Grievance Redressal Policy keeping in view the guidelines issued by Reserve Bank of India on Customer Service. The Bank is ensuring the redressal of the grievances of customers within the framework laid down in the said policy.

The Bank has an on-line Grievance Redressal Management Portal called Centralized Grievance Redressal Management System (CGRMS), which is in-house Portal. Through this system, the customer gets an immediate acknowledgement and can keep a track of the complaint also. Customers can lodge their requests/complaints in the CGRMS through Bank's website, Internet Banking Service, Mobile Banking Service and Mobile App.

The status of complaints received by the Bank is reviewed by “Customer Service Committee of the Board”, a Sub-Committee of the Board, on quarterly basis. The meetings of the Committee are presided over by Managing Director & CEO.

The Bank has in place an Internal Ombudsman as per the recommendations of the Damodaran Committee. The system ensures greater transparency in the redressal of grievances bythe Bank.

Customer Service Committees in all the branches and Circle Offices look into the quality of customer service rendered and critically examine the feedback/suggestions for improvement in customer service. These committees meet once in a month where staff and the invited customers interact freely on service-related issues.

A monthly magazine “Customer Speaks” is published in which selected complaints filed by customers and the action taken/resolution provided to the complainants are also mentioned. Appreciation letters issued by customers appreciating the service of officials of the bank are also published in the magazine. Bank's guidelines on important issues pertaining to customer service, products and services are highlighted in the magazine forthe benefit of field staff.

Theme Based Meetings are being conducted at monthly intervals in all branches on a pre-decided date and theme to improve awareness among field staff about bank's products and services, and to sensitize them about the issues of maximum importance.

For faster resolution of complaints Bank has designated Chief Customer Executive Officer (CCEO) with the rank of Dy. Zonal Manager /Dy. Circle Head at all ZOs/COs level whom a customer can approach for redressal of his grievance. The contact details of CCEOs have also been displayed at Bank's website.

Regular training sessions are arranged at Call Centre for Customer Service Agents (CSAs) so that they can handle customers call properly & resolve their trivial

issues by giving correct/latest information that customerwants about the products/services.

The Bank has state-of-the-art Primary Contact Centers at Gurugram and Noida to provide telebanking services to its customers on 24 x 7 x 365 basis through two leading Service Providers. In addition to these two Primary Sites, the Bank has also established two Secondary Contact Centers at Dehradun and Bhopal to provide tele-banking services to its customers in 13 languages.

The customer's complaints are received and stored in two online portals i.e CGRMS Portal and Contact Centre's CRM Portal. The nature of complaints received at CGRMS Portal and CRM Portal are largely Non- Digital & Digital transaction related respectively

A total of 17,06,462 complaints were received during the FY 2022-23, out of which 3,51,425 complaints were resolved within T l days of its receipt. As such, these have not been treated as complaints. Therefore, the total number of reported complaints received during the FY 2022-23 is 13,55,037. The portal wise break-up of the same is as under:

• During FY 2022-23, out of a total number of 1,24,048 complaints (i.e., 907 complaints outstanding as on 31st March, 2022, and 1,23,141 complaints received during FY 2022-23), 1,22,805 complaints were resolved up to the satisfaction of the complainant, till 31st March, 2023 in CGRMS Portal.

• Further, during FY 2022-23, out of a total number of 12,61,591 complaints (i.e., 29,695 complaints outstanding as on 31st March, 2022, and 12,31,896 complaints received during FY 2022-23), 12,39,649 complaints were resolved up to the satisfaction of the complainant, till 31st March, 2023 in Customer Relationship Management Portal (CRM).

Initiatives undertaken for improvement in customer service

1. To augment the capabilities of Contact Centre and facilitate self-service for customers, the number of self-services through IVR have been increased to 16 during FY 2022-23 including facility of marking debit-freeze their account in case of suspicious & unauthorized transaction and issuance of TDS Certificate.

2. The Bank has constituted teams of officials at

Customer Care Centre at Head Office, Zonal Offices and Circle Offices to pay surprise visits to branches to assess standard of service. During FY 2022-23, officials of the Bank made 18,562 surprise visits across India. Deficiencies pointed out by the visiting officials are being shared with the concerned branches/Circle Offices for taking corrective steps.

3. Special Campaign for increasing nomination in accounts was launched through social media, Contact Centre's, Email & SMS, during the month of Feb-Mar 2023. In order to make customers aware about nomination, creatives are shared on Social Media, SMS are sent to such account holders and message is displayed at Bank's website and on Statement of account being sent through email.

4. Creatives are published at Social Media (Facebook &Twitter) on regular basis to educate customer about Banks service such as, Balance enquiry on Missed Call, and not to share their credentials over fraudulent calls and for registering nomination in deposit account.

5. Facility of Door Step Banking Services has been extended to customers, wherein they can avail the listed financial/non-financial banking services at the convenience of theirhome.

XII. IMPLEMENTATION OF OFFICIAL LANGUAGE

Punjab National Bank has always been pioneer in implementation of Official language Hindi.Your Bank continued to make concerted efforts to comply with the instructions received from Department of Official Language, Ministry of Home Affairs, Government of India, Committee of Parliament on Official Language and Department of Financial Services, Ministry of Finance. Your Bank has achieved most of the targets prescribed in annual programme for the Financial Year 2022-23 issued by Department of Official Language, Ministry of Home Affairs, Government of India.

We are pleased to inform that during FY 2022-23, your Bank has been awarded 2nd Prize under the highest "Rajbhasha Kirti” award of the Government of India for “A” Region and Delhi Bank Narakas, Whose convener is Punjab National Bank, was given first prize “Rajbhasha Kirti” award. A total of 11 award have been received by various offices of the bank from the Regional Implementation Office of the Ministry of Home Affairs. Also, more than 265 awards from various institution have been received by various offices/staff members of our Bank.

1. Special works done in the field of official language implementation:

During the FY 2022-23, Punjab National Bank continued to make effective efforts to further increase the progressive use of official language in the bank.

a. Intensive monitoring was done to achieve the targets prescribed in the Annual Program of Department of Official Language, Ministry of Home Affairs and Rajbhasha Corporate Action Plan duly approved by the Board.

b. Awards were given to winner offices/employees of Lala Lajpat Rai Rajbhasha Shield Scheme, other incentive schemes and Hindi competitions to increase the use of Hindi in the bank.

c. Bank's quarterly home magazine "PNB Pratibha" and half yearly Hindi magazines of Zonal Offices were published regularly. Hindi books were made available in Hindi libraries established atvarious level.

d. PNB has efficiently discharged the responsibility of convener of 28 Town Official Language Implementation Committees across the country. Half yearly meetings of these committees were organized regularly and Hindi competitions, Hindi workshops, Hindi seminars etc. were organized during theyear.

e. All India level Inter Bank Hindi Essay Competition was organized on the subject "Contribution of MSMEs in building Atmanirbhar Bharat”.

f. A total of 7 books were awarded by the Bank under the Original Book Writing Scheme (for working and retired staff) during the FY2022-23.

g. The eligible offices of PNB were notified in the Government of India Gazette under Rule 10(4) of the Official Language Rules, 1976.

h. Hindi and regional languages were used in publicity and promotional campaigns related to the Bank's schemes and products.

i. In May 2022, under the direction of the Ministry of Finance, one day workshop was organized for all the banks and financial institutions/insurance companies located in Delhi.

j. An incentive scheme was implemented on obtaining higher degree in Hindi for working employees of the bank.

2. External Inspection/Official Language Seminar/

Conference:

a. Smt. Anshuli Arya, (IAS), Secretary, Rajbhasha Vibhag, Ministry of Home Affairs awarded the winner of Member Banks/lnstitutions on 22.12.2022 in Annual Function of Delhi Bank Narakas in Bank's STC and appreciated the work done in Hindi bythe Bank.

b. Implementation of official language was appreciated by officials of Ministry of Finance, Department of Financial Services during inspections of Head Office and Madurai Branch.

c. The official language inspection of Sonepat main branch was done by the Draft and Evidence subcommittee of the Parliamentary Committee on Official Language.

d. The work done in Hindi was appreciated by The Third Sub-Committee of the Parliamentary Committee on Official Language during the inspections of Bank's branch: Rudraprayag, Circle Office: Srinagar, Circle Office: Udaipur and Zonal Office: Bhopal.

e. Hindi Day and Hindi Month were celebrated enthusiastically in the Bank. Lala Lajpat Rai Shield was given to the winners by Managing Director and Chief Executive Officer and Executive Directors in the main official language function organized at Head office. Kavi Sammelan was also organized, which was graced by renowned poet Surendra Sharma and poetess Prof. Sita Sagar.

f. All India Conference cum Review Meeting of Official Language Officers of the Bank was organized for Zone 'A 'B' and 'C' at Lucknow, Chandigarh and Chennai respectively. Intensive monitoring was done through official language inspections and annual review meetings of all the offices.

3. Progress made in the use of Hindi in Information

Technology:

a. Online module of Hindi Knowledge Roster added in HRMS.

b. "Standard Draft" of routine letters/office notes related to various department for easily doing work in Hindi is available on Bank's e-portal.

c. Hindi version of new product WhatsApp Banking has been launched to provide the facility of doing banking in Hindi to the customers.

d. Hindi and regional language are available in ATM.

e. SMS alerts have been sent to customers in their preferred language (Hindi and regional language).

f. The Bank's website is available bilingually in Hindi and English. "Pihu Chatbot” is also available in Hindi.

g. Online Hindi reporting of all the Branches, Circles, Zones and Divisions of the Head Office was done on the 'Rajbhasha web portal'.

h. Bilingualization of Finacle and HRMS was done through Linguify software updated version, through which customers can get passbook, CDR/FDR etc. in Hindi also.

I. Staff members were given training of e-tools to work in Hindi on computer.

j. PNB ONE' was implemented in the new revamped look in various regional languages including Hindi.

k. Internet Banking available in Hindi as well as in regional languages.

l. A daily Hindi podcast is being released on banking subject.

m. For the employees, 3 online Hindi courses were introduced on the bank's e-learning portal PNB Univ, on passing which the employees are given marks in Performance Appraisal.

n. Forms to be used by customers are available in Hindi and regional languages.

XIII.PNB S SUBSIDIARIES AND REGIONAL RURAL

BANKS

1. DOMESTIC

a. PNB Gilts Ltd.: FY 2022-23 was characterized by firming up of yields for most of the year, and witnessed some moderation while approaching towards the end. The year began with hardening of the benchmark yield by 61 bps due to higher crude oil prices and monetary policy tightening across the major global economies amid persisting inflationary pressure. During the end of Q2 FY 2022-23, yields increased intermittently on the back of hawkish commentary by Fed officials on US monetary

policy, which was however, offset by ease in crude oil prices and rising expectations over likely inclusion of India's bond in global bond indices. During the second half, G-sec yields hardened in the beginning, taking cues from the sharp surge in US treasury yields following the 75 bps rate hike by the US Fed and its hawkish forward guidance, followed by the policy repo rate hike by the Reserve Bank. Subsequently, the market sentiment was also dented after JP Morgan held off the inclusion of Indian government bonds in its widely tracked emerging market bond index. Towards the end of the third quarter, bond yields extended a softening bias in tandem with the easing of US treasury yields and the decline in international crude oil prices. The last quarter marked the range bound trading in the mid and longer dated segment, while shorter dated yields firmed up significantly due to continued rate hike expectations. In March 2023, the yields softened, taking cues from US yields following bank collapses, which drove investors to safe assets, which had a salutary impact on Indian yields as well.

During the year, the 10-yr benchmark yield touched a high and low of 7.62 per cent and 6.84 per cent respectively and closed at 7.32 per cent as on 31st March, 2023.

Against the backdrop of deteriorating market conditions, PNB Gilts Ltd continued to fulfill all its obligations as a Primary Dealer mandated by RBI both in Primary and Secondary market. Company posted a Profit Before Tax (PBT) of Rs. (85.07) Crore during FY 2022-23 vis-a-vis PBT of Rs. 210.15 Crore during FY 2021-22. Profit after Tax (PAT) amounted to Rs. (77.22) Crore during FY 2022-23 as against Rs. 165.71 Crore during FY 2021-22. Capital adequacy remains strong with its Capital to Risk Weighted Assets Ratio (CRAR) at 31.83 per cent as on 31st March, 2023 well above the regulatory minimum of 15 per cent for Primary Dealers (PDs).

b. PNB Investment Services Limited (PNBISL):

The Company is a profit-making company from the very first year of its operations. During the year ended as on 31st March, 2023, the Company registered operational (fee-based) income of Rs.7.35 Crore and total income of Rs.9.98 Crore as against a fee- based income of Rs.9.59 Crore and total income of Rs.12.10 Crore for the year ended as on 31sl March, 2022. Profit before Tax during the period ended as on 31s1 March 2023 was Rs.4.85 Crore as against Rs.6.10 Crore for the period ended as on 31st March, 2022.

The company operates in three verticals, namely Corporate Advisory, Merchant Banking and Security Trustee. In the Corporate Advisory Vertical, during the year PNBISL advised many marquees business groups and corporate clients on various transactions, including debt syndication, debt resolution and other corporate advisory assignments. With in-house expertise and deep understanding of select sectors, PNBISL prepared and delivered credible Techno-Economic Viability (TEV) reports to its clients.

In Merchant Banking Vertical, PNBISL actively participated in financial closure of ARCIL stake sale Transaction. The Equity Capital Market team also commenced participating in placement of Tier 1 Bonds Issuances and NCDs Issuances mobilizing Rs. 1000 Crore plus funds for Banks/NBFCs. The Company had commenced this placement for the first time in a small way. The company also filed with SEBI an IPO (approx Rs. 130- Rs. 150 Crore), Rights Issue (approx. Rs. 25 Crore) with BSE and an open offer assignment during the year generating reasonable revenues.

In the Trusteeship business, PNBISL was able to permeate into the second & third Tier cities offering its services to medium scale businesses as well. With its prompt and quality service as also realigning the card rates with market requirement, the company continues to add on new clients and build on its strategy to be a trusted partner of leading banks and corporates.

Going forward, the company is committed to build on its capabilities across business verticals such as credit appraisal & debt syndication services, TEV consultancy, Merchant Banking services and Security Trusteeship services to offer greater value to the parent bank and all its stake holders.

c. PNB Cards and Services Limited (PNBCSL):

PNBCSL is a wholly-owned subsidiary of Punjab National Bank (PNB) incorporated on March 16, 2021 in terms of RBI approval letter dated December 7, 2020 to undertake the non-financial support services related to credit card business of the Punjab National Bank.

PNBCSL operates on a feet-on-street model with its sales executives for sourcing of credit cards in the potential market. The company is also using digital onboarding platforms for better customerexperience.

The Company has been profitable since the very first year it has been in business. The company reported a net profit after taxes of Rs. 1.20 Crore for the FY 2022-23 and Rs. 0.13 Crore for the FY 2021-22. This shows that the company is on the right track and is well-positioned to grow in the future.

During the current Financial Year, the Board of the Company has accorded its approval for diversification of Business of the company. RBI vide letter dated January 13,2023, has conveyed their approval to PNB for undertaking additional non-financial support services by PNBCSL. As per their approval, PNBCSL may provide the following non-financial support services viz. sourcing, marketing, promoting, publicizing, advertising, soliciting distributing Deposit (Current and Saving Accounts etc.) & Retail Loan Products (Housing Loan, Loan against property, Vehicle Loan, Education loan, Personal loan etc.) of Punjab National Bank.

The approval from RBI is a significant development for PNBCSL. It will enable the company to grow and compliment Parent Bank business with a larger choice of services. The Company will increase its geographic reach by opening new Territory offices at multiple locations to serve the various business verticals, including Credit Card, Housing Loan, Vehicle Loan and Deposit Products. PNBCSL is dedicated to offering consumers high-quality services, and this approval will assist the Company in achieving its objectives.

2. INTERNATIONAL

a. PNB International Limited (PNBIL): Punjab National Bank (International) Limited was incorporated in the UK on April 13, 2006 and registered with the Companies House in England & Wales. The Bank is authorized by the Prudential Regulation Authority ('PRA') and regulated by Financial Conduct Authority ('FCA') to conduct banking Business in UK.

The total deposits increased from Rs. 6471 Crore as on 31s1 March, 2022 to Rs. 6644 Crore as on 31st March, 2023, showing growth of 2.7 per cent. The net advance increased from Rs. 5153 Crore as on 31st March, 2022 to Rs. 5411 Crore as on 31sl March, 2023, showing growth of 5.0 per cent. In the FT 2022-23, PNBIL recorded a Net Profit of Rs. 136.34 Crore, representing a growth of 32.1 per cent compared to the previous financial year's net profit of Rs. 103.22 Crore.

PNBIL's main business is to provide commercial and retail banking services to different segments of customers, with a focus on the Indian community within the UK. This includes accepting deposits from both retail and corporate clients; lending to retail, SME's, and corporate clients; and transaction banking services such as currency remittances. The deposit products primarily include current, savings, term deposits and Individual Saving Accounts. Some of these products such as ISAs and Fixed deposits are also being availed by a wider audience in the UK. The lending products includes real estate lending i.e., Buy to Let-Residential, Commercial, Development Loans and Hotels & Hospitalities, lending to SME and Term loans backed bySBLCs.

b. Druk PNB Bank Ltd (DPNBL): Druk PNB Bank Ltd, Bhutan, Banking Company having its corporate office at Thimphu, Bhutan. It started its operation on 27th January, 2010, in Bhutan as the country's fourth commercial Bank, with a component of both FDI and joint venture in the Banking Sector. Presently, the Bank has 9 branches and 30 ATMs spread across the country. Total Business of the DPNBL increased to Rs.4,627 Crore as on 31st March, 2023 from Rs.3,125 Crore as on 31s1 March, 2022 showing YoY growth of 48.1 per cent. CASA Ratio of the Bank stood at 43.3 per cent as on 31st March, 2023. Profit of the Bank has increased to Rs.32.53 Crore as on 31s1 March, 2023 from Rs.22.30 Crore as on 31st March 2022. Paid up capital of the Bank as on 31s1 March, 2023 is Rs.84 Crore.

3. REGIONAL RURAL BANKS (RRBs): As on 31st March, 2023, there are 9 RRBs sponsored by the bank namely Dakshin Bihar Gramin Bank (DBGB), Patna; Sarva Haryana Gramin Bank (SHGB), Rohtak; Himachal Pradesh Gramin Bank(HPGB); Mandi; Punjab Gramin Bank (PGB), Kapurthala; Prathama UP Gramin Bank

(PUPGB), Moradabad; Assam Gramin Vikas Bank

(AGVB), Guwahati; Bangiya Gramin Vikas Bank

(BGVB), Berhampore; Tripura Gramin Bank (TGB),

Agartalaand Manipur Rural Bank(MRB), Imphal.

4. These 9 RRBs are operating in 9 states namely Bihar,

Haryana, Himachal Pradesh, Punjab, Uttar Pradesh,

West Bengal, Assam, Manipur and Tripura covering

185 districts with a network of4642 branches.

a. Total Business of sponsored RRBs as on 31sl March, 2023 is Rs. 2,04,907 Crore registering a YoYgrowth of 8.71 percent.

b. Deposits of RRBs are at Rs. 1,30,369 Crore as on 31st March, 2023. Aggregate Deposits registered a YoY growth of 7.16 per cent.

c. The Advances of the RRBs as on 31s1 March, 2023 stood at Rs. 74, 537 Crore with a YoY growth of 11.53 percent.

d. As per RBI guidelines it is mandatory for RRBs to meet the regulatory requirement of CRAR of 9 per cent. The RRBs attaining CRAR over and above the regulatory requirement are TGB (26.77 per cent), PGB (15.61 per cent), PUPGB (14.64 per cent), SHGB (14.17 per cent) and BGVB (11.63 per cent). The RRBs having CRAR less than the regulatory requirement are DBGB (-0.27 per cent), MRB (6.93 per cent), AGVB (7.82 per cent) and HPGB (8.24 per cent). As an outcome of recapitalization assistance to the RRBs by Centre/ States / Sponsor Bank and improvement in operational efficiency these RRBs are expected to achieve CRAR of 9 percent inthecomingyears.

e. The sponsored RRBs are in profit (except DBGB Patna, AGVB Guwahati and MRB Imphal). Operating profit of RRBs as a whole stood at Rs. 2527 Crore as on 31st March, 2023 with YoY growth of 15.0 percent.

f. The RRBs have cumulatively disbursed Rs. 2760.30 Crores under PM MY/ MUDRA as on 31s1 March, 2023, with YoY growth of 24.32 per cent under disbursement.

g. The RRBs have cumulatively opened 2,12,04,663 accounts under Pradhan Mantri Jan Dhan Yojana (PM J DY) as on 31st March, 2023.

XIV. AWARDSANDACCOLADES

The Bank's efforts have been recognized at various

platforms. The Bank has been conferred the

following awards for initiatives taken in various

fields for FY2022-23

1. The Bank was awarded with achievement award for "Excellent Guarantee Coverage (number)" for FY 2022-23 by Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).

2. The Bank stood Third in NPS Reward Recognition Programme (Maximum number of fresh Subscriber Registration) for FY 2022-23 by Pension Fund Regulatory and Development Authority (PFRDA).

3. The Bank was felicitated with ET Best BFSI Brands by EconomicTimes.

4. The Bank was felicitated with Best MSME Bank (Runner UP) at 9th MSME Excellence Awards and Summit Associated Chambers of Commerce & Industry of India (ASSOCHAM).

5. The Bank was awarded Best MSME Bank, MSME Friendly Bank, Government Schemes implementing Bank and Implementing COVID related scheme Bank in MSME Banking Excellence Award 2022 ceremony organized by Chamber of Indian Micro, Small and Medium Enterprises (Cl MSM E).

6. The Bank awarded first prize for outstanding contribution under Prime Minister's Employment Generation Program in Uttar Pradesh by Government of Uttar Pradesh.

7. The Bank won Award of Excellence award in circle of excellence campaign launched for APY enrolment by Pension Fund Regulatory and Development Authority (PFRDA).

8. At the 18th Annual Banking Technology Conference, Expo and Awards 2022, the Bank was felicitated by IBAwith

a. Runner-up award for the Best Fintech Collaboration

b. Special award for BestAI& ML Bank.

9. NCDEX felicitated Punjab National Bank for their contribution as an emerging Banks in the e-NWR space.

10. "Rajbhasha Kirti” 2nd prize for the FY 2021-22 by Department of Official Language, Ministry of Home Affairs, Government of India.

11. The Bank was declared winner under 2 Themes of EASE 4.0 awards by DFS, Ministry of Finance, Government of India.

• Tech Enabled Banking-lsl Runner Up

• GovernanceandHR-lstRunnerUp

12. First Prize-Best Core Banking System Initiative-13th Annual Retail Banker International Trailblazer Awards by Retail Banker International.

13. "Highly Recommended-Most Innovative Branch Offering”-13th Annual Retail Banker International Trailblazer Awards

14. Recognized by PFRDA for performance under National Pension System (NPS) in Quarterly Award Recognition Programme for Q4 FY2022-23.

15. National MSME Awards-2022 to Banks for Outstanding Contribution in the Promotion and Development of MSME Sector - 3rd Prize Winner by Ministry of MSME.

XV. FUTURE BUSINESS PLAN OFTHE BANK

The Bank has a carefully prepared strategy to define & achieve its future goals. Strategies lay down specific measurable parameters on day to business, profitability & Asset Quality that is being strictly monitored against targets.

The Bank will continue to focus on building Business through traditional and digital banking. Mobilization of Low-Cost Deposits remain a focus area. Mobilization of Current Accounts will be the area of thrust for FY 2023-24. The Bank will ensure that all the Business units of the Bank function as the profit centers for the Bank. The Bank will strive to regain the lost share in the system and continue to make efforts towards new customer acquisition. The Bank will continued focus on customer service through product differentiation & value addition at every step. Digitalisation of products & services will also contribute to that effect and will be prioritized.

In the area of Asset Quality, the Bank will deploy all the out effort to arrest slippage and will aim at

doubling recoveries over the amount of slippage.

Nation building byway of implementing Government Schemes & Financial Inclusion been the spirit of the Bank. As of now, PNB has lived up to the expectations of the Government and of the society at large particularly the underprivileged sections.

The markets are buoyant with positive sentiments for the Bank. Further, with the anticipation of RBI not taking any further rate hike action as of now, we may have reached the end of this cycle of peak interest rates. In FY 2023-24 growth in deposits should be higher while that in credit marginally lower which should assuage the liquidity situation. The Bank will continue on sustained growth trajectory.

All in all, there are expectations of evolution of positive business sentiments which may provide ample opportunities for business growth of the Bank. Further with the anticipation of RBI not taking any further rate hike action as of now hence we may have reached the end of this cycle of peak interest rates. In FY 2023-24 growth in deposits should be higher while that in credit marginally lower which should assuage the liquidity situation. Therefore, the picture should be steady going ahead with rates probably tending to move downwards than upwards given that inflation projections for FY 2023-24 are in the 5.5 percent band.

XVI. BOARD OF DIRECTORS

1. Shri Pankaj Jain, Govt. Nominee Director, ceased to be directorw.e.f. 11.04.2022.

2. Shri Pankaj Sharma has been appointed as Govt. Nominee Director of the Bankw.e.f 11.04.2022.

3. Shri Swarup Kumar Saha, Executive Director, was elevated to MD & CEO of Punjab and Sind Bank on 03.06.2022

4. Shri K. G. Ananthakrishnan has been appointed as Non-Executive Chairman of the Bank w.e.f.

07.11.2022.

5. Shri Binod Kumar has been appointed as Executive Director of the Bank w.e.f.

21.11.2022.

6. Shri Sanjay Kumar, Executive Director, completed his tenure on 30.11.2022.

7. Shri M. Paramasivam has been appointed as Executive Director of the Bank w.e.f.

01.12.2022.

XVII. DIRECTORS' RESPONSIBILITYSTATEMENT

The Directors confirm that in the preparation of the annual accounts forthe year ended 31s1 March, 2023:

1. The applicable Accounting Standards have been followed along with proper explanation relating to material departures, if any;

2. The accounting policies, framed in accordance with the guidelines of the Reserve Bank of India, were consistently applied;

3. Reasonable and prudent judgment and estimates were made so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit of the Bank forthe year ended 31s1 March. 2023.

4. Proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of applicable laws governing banks in India, and;

5. The accounts have been prepared based on the principle of “going concern”.

XVIII. ACKNOWLEDGEMENT

The Board of Directors thank the shareholders, valued customers, well-wishers and other stakeholders for their goodwill, patronage and support.

The Board acknowledges with gratitude for the guidance and support of Government of India, Reserve Bank of India, Securities & Exchange Board of India, Insurance Regulatory and Development Authority of India, Central Vigilance Commission, Stock Exchanges and Statutory Central Auditors of the Bank, in the functioning of the Bank.

The Board also placed on record its appreciation for the valuable contribution made by the members of the Bank's staff at all levels and looks forward to their continued involvement in achieving the future goals.

For and on behalf of Board of Directors

Atul KumarGoel

Managing Director&CEO