Punjab National Bank (PNB) will have an impact of Rs 9,000 crore under the Reserve Bank of India’s (RBI) new credit loss framework, according to an internal preliminary estimate made by the state-owned lender.

The bank’s additional provisioning requirement will be spread over a five-year period starting 1 April 2027, as mandated by the RBI. 

PNB expects challenges to come from stage-two assets, which show rising risk but are not yet defaulting loans. For stage-three assets, the bank has a provision coverage ratio (PCR) of 96%. 

“Our rough estimate is that we will have an impact of around 0.80 percentage points come on our capital to risk-weighted assets ratio (CRAR). We are well-prepared for that and, anyway, that has to split over five years,” said PNB managing director and CEO Ashok Chandra. 

The state-owned bank’s CRAR was at 17.19% as of 30 September 2025. 

As per RBI’s draft guidelines, banks are required to move to an expected credit loss (ECL) framework where they have to set aside funds to cover anticipatory risk of default, over a five-year period starting 1 April 2027. The bank loans will need to be classified into three stages of credit risk.

Under the current model, provisions are made by banks after defaults occur.  

Chandra said the bank’s profits will provide “enough cushion” and “we will be able to bridge those gaps”. 

PNB expects to clock a net profit of over Rs 15,000 crore in the current financial year, which will go to strengthen its capital buffers and offset the impact of ECL. For the fiscal second quarter, the lender reported a net profit of Rs 4,904 crore, up 14% from the year-ago period.