Punjab National Bank (PNB) is preparing for a major financial impact of around ₹9,000–10,000 crore due to the Reserve Bank of India’s (RBI) new Expected Credit Loss (ECL) framework. The change, aimed at making banks more transparent and resilient, will require PNB and other lenders to set aside higher provisions for potential loan losses.
According to PNB Managing Director and CEO Atul Kumar Goel, the one-time adjustment under the new system is expected to affect the bank’s net worth, but will be absorbed over time as part of the transition process.
The RBI introduced the ECL-based provisioning system to replace the earlier incurred loss model, aligning Indian banks with global accounting standards (IFRS 9). This shift means banks must estimate future credit losses in advance, rather than waiting for defaults to occur.
Goel added that PNB has already conducted internal assessments and is in talks with auditors to finalize the impact. He also assured that the bank’s capital adequacy remains strong, supported by healthy growth in advances and deposits.
PNB reported a 13% year-on-year rise in advances and strong asset quality improvements in the last quarter, indicating that the bank is well-positioned to manage the new regulatory burden.
Summary Table
| Particulars | Details |
|---|---|
| Bank | Punjab National Bank (PNB) |
| Impact Amount | ₹9,000–10,000 crore |
| Reason | RBI’s new Expected Credit Loss (ECL) framework |
| Model Shift | From incurred loss model to expected credit loss model |
| CEO Statement | Impact will be absorbed over time; capital position remains strong |
| ECL Objective | To make banks more transparent and globally aligned |
| PNB’s Growth | 13% YoY growth in advances; improvement in asset quality |
