One year after being hit by a $2 billion scam, Punjab National Bank (PNB) has topped the list of public sector banks which have shown the best performance based on the government’s EASE (Enhanced Access and Service Excellence) reform index. EASE index, which is prepared by the Indian Banking Association (IBA) and Boston Consulting Group, commissioned by the Finance Ministry, is a framework that was adopted last year to strengthen public sector banks, and rank them on metrics such as responsible banking, financial inclusion, credit offtake and digitisation.
Punjab National Bank, headed by Sunil Mehta, who is also the chairman of the IBA topped the list, it was followed by Bank of Baroda, State Bank of India (SBI), and Oriental Bank of Commerce.
PNB also topped the list of PSBs in three out of six key areas of strong performance assessed by the report. These include responsible banking, credit offtake, or increase in credit growth, and customer responsiveness.
The report also found PNB to follow the best practices in terms of stressed asset management, the EASE Index report noted bank’s creation of war chest for tracking non-performing assets and a mobile app for recovery officials.
The EASE Index report also noted PSU banks’ strengthening of the bad-loan recovery process, pointing to the success of the Insolvency and Bankruptcy Code (IBC) in fast-tracking the resolution process.
NPA recovery stood at Rs. 98,493 crore for current financial year till December, up 27 per cent from Rs. 77, 563 recovered in FY18. According to data shared by IBBI (Insolvency and Bankruptcy Board of India), PSU banks have recovered about Rs. 80,000 crore by 66 debtors so far.
Out of the 11 banks originally placed under the RBI’s Prompt Corrective Action (PCA) framework, only five now remain, with the two most recent exits being Allahabad Bank and Corporation Bank, and lending restrictions being raised from Dhanlaxmi Bank.