Fraud-hit PNB ranks highest in implementation of 'reforms agenda' in 2018: Study

The bank's net profit rose 7.12 per cent to Rs 247 crore in the three months to December 2018.

​New Delhi: Fraud-hit Punjab National Bank has been ranked first among public sector banks in the implementation of 'reforms agenda', followed by Bank of Baroda and State Bank of India, said a report on Thursday.

The BCG-IBA report – EASE Reforms for Public Sector Banks - measures performance of each PSB on 140 objective metrics across 6 themes, including customer responsiveness, credit off-take and digitalisation.

PNB with a score of 78.4 out of 100 has been ranked first in the EASE (Enhanced Access & Service Excellence)-index, followed by BoB (77.8), SBI (74.6), Oriental Bank of Commerce (69), Canara Bank (67.5) and Syndicate Bank (67.1).

PNB has shown "strong performance" in the parameters like customer responsiveness, responsible banking, credit off-take and financial inclusion.

Releasing the report, Finance Minister Arun Jaitley said such rankings brings about competitiveness and encourages banks to perform better than peers.

Complimenting PNB, Jaitley said: "The bank, which suffered both in terms of finance and transiently, in terms of reputation because of a fraud practice and in 9 months had to set aside Rs 14,000 crore for bad assets, rapidly transformed itself into an evolving institution and after a period of 9 months in last quarter declared a profit. It then emerged as the best performing bank (in EASE reform ranking)".

PNB, which was involved in a Rs 14,356-crore scam by Nirav Modi, swung into black in the October-December quarter after posting losses in the three previous quarters.

The bank's net profit rose 7.12 per cent to Rs 247 crore in the three months to December 2018 on speedier recoveries and a slide in bad loans.

The six PSU banks, which continue to be under the RBI's prompt corrective action (PCA) framework, too have been ranked in the report.

These are Indian Overseas Bank (66.7), UCO Bank (64.1), United Bank of India (60.8), IDBI Bank (60.2), Central Bank of India (55.7) and Dena Bank (53.8).

Department of Financial Services Secretary Rajiv Kumar said the stress in the public sector banks have gone down following the reforms undertaken by these lenders and all the bad loans are not only recognised but also fully provisioned.

"Every year it (EASE Reforms ranking) has to be presented and therefore the reforms agenda is getting institutionalised... It is huge system reboot in which the credit-debtor relationship has changed because of transformative reforms... We are confident we will create globally competitive banks through this process," Kumar said.

While unveiling steps to tackle the bad loan problem plaguing the banking sector, Kumar had in January last year said the government would come out with EASE -Index for ranking of banks. This would increase public accountability of PSBs as independent agencies evaluate and rank PSBs annually on reforms.

The report said reforms in the insolvency and bankruptcy framework and recovery process are leading to large scale NPA resolution and recovery. The PSBs have recovered Rs 2.87 lakh crore from April 2015 till December 2018, including a record recovery of Rs 98,498 crore in current fiscal till December.

Since 2014-15, the government has infused nearly Rs 2.5 lakh crore in PSBs till February 2019. During the period these banks have mobilised Rs 66,000 crore by raising fresh equity capital and through monetisation of non-core assets.

"EASE Index makes first ever independent and objective measurement of each PSBs on 140 metrics across 6 themes. Responsive, Responsible, Clean and customer friendly banking to be the new normal," Kumar tweeted.