Punjab National Bank will sell bad loans worth Rs 5,000 crore to asset reconstruction companies (ARCs) in the current financial year.

The country’s second-largest state-owned bank has identified about 100 non-performing accounts (NPAs) for sale to the ARCs during the fiscal.

"More than 100 accounts we have identified...the book size will be somewhere around Rs 4,000-5,000 crore. That is the outstanding book for sale to ARCs," news agency PTI quoted PNB managing director and CEO Ashok Chandra as saying.

The bank expects the minimum realisation from this sale to be in the range of 40-50%. 

There may be an account where 100% recovery is also going to take place because you have good security now, but in some cases it could be low, Chandra said. 

“The average recovery we are anticipating should be 40-50% minimum", he added.

In FY26, PNB expects to recover Rs 16,000 crore from bad loans. In the first quarter ended June, the lender’s total recovery stood at Rs 3,356 crore. 

PNB is looking to take its total business to Rs 30 lakh crore by the end of the current financial year. Chandra has devised various strategies to achieve this milestone.

The bank’s total business rose by 11.6% to Rs 27.19 lakh crore as on 30 June 2025. The other two state-owned banks who are closely behind are Bank of Baroda with a total business of Rs 26.43 lakh crore and Canara Bank with Rs 25.64 lakh crore.

"We have a target of Rs 29.56 lakh crore for the current financial year. We may do better than our target and can touch Rs 30 lakh crore by March next year, but let me add that we are very mindful that whatever the top line, we are going to build, it should add profit to my bank," PTI quoted Chandra as saying.

In the fiscal first quarter ended June, PNB reported its highest-ever quarterly operating profit at Rs 7,081 crore. The bank’s net profit, though, slumped 48% year-on-year to Rs 1,675 crore June due to a one-time deferred tax of Rs 3,324 crore. 

Chandra is profit-focused. "Whether it is deposit mobilisation or the corporate loan book, everything should add to the bottom line of the bank. So, that is the reason now, bulk deposits have been brought down and corporate deposits have curtailed to a great extent," PTI quoted him as saying.

PNB is targeting a minimum 11-12% credit growth and 9-10% deposit growth in FY26.

Though corporate loan growth has stayed muted in the fiscal first quarter, Chandra is confident that it would pick up in the remaining quarters and register double-digit growth. The bank has a loan pipeline of Rs 1.29 lakh crore, which is in various stages of disbursement. 

For boosting the corporate loan book, PNB assures prompt decisions on loan sanctions. Corporate borrowers are assured that decisions will be taken within 15 days.

"Anything which comes to the head office, within 15 days, we are going to communicate the decision. This has given a lot of confidence to the corporates," Chandra said.

For ramping up project finance, PNB has created a dedicated cell, which is headed by a General Manager.

In the MSME segment, the bank has grown at 17-18% and core retail loans in housing, vehicle and education is expected to continue growing at 17%.

The bank has put a lot of focus on self-help groups (SHGs) as agriculture loans is an important component. “We are seeing that this year, at least 30-40% growth should happen in the SHG portfolio, because that constitutes my small and marginal farmer category and forms part of priority sector lending," PTI quoted Chandra as saying.

For the rural areas, the bank is putting a lot of focus on the food processing sector and infrastructure-related facilities like godowns and cold storage.