PNB Expects Slight Impact On NIMs If RBI Cuts Rates

Punjab National Bank anticipates a modest impact on its net interest margin (NIM) if the Reserve Bank of India decides to cut interest rates during the upcoming February Monetary Policy Committee (MPC) meeting, but it is nothing to worry about, according to the public lender’s Executive Director Kalyan Kumar.

Public lender Punjab National Bank reported a marginal decline in its net interest margins to 3.09% as compared to 3.30% in the same quarter a year ago.

Talking to NDTV Profit, Kumar said that while NIMs may be further impacted if RBI cuts its lending rates in February, it will not be substantial.

“In the net interest margin front, I can tell you we are expecting rate cuts. If there is any rate cut in the next MPC, then there might be some slight impact on NIM, but I do not find any significant impact as of March 2025 in the NIM percentage,” he said.

PNB’s asset quality improved on a year-on-year basis. The gross non-performing asset ratio was pegged at 4.09% as compared to 6.23% in the same period last year.

Talking about slippages, Kumar said that PNB only had a slippage of Rs 1,774 crore, which is among the lowest in the industry.

“Slippages, I can tell you, PNB has done a very nice job despite having a book of Rs 11.10 lakh crore. Even with this huge book, our slippage this quarter was only Rs 1,774 crore. And this is, I can tell you, one of the best containments of slippages across the industry,” he said.

“There I can assure you that because most of the things are in order and I don't foresee any more slippages this quarter because we have made our systems very robust,” the top executive added.

The slippages will be even fewer on the back of initiatives taken by the bank.

“We have integrated technology for proactive monitoring. I don't foresee any reason behind more slippages. The way slippages are maintained will be continued,” Kumar said.

He was confident that PNB’s growth momentum would be sustained in the fourth quarter of the ongoing fiscal as well.

“PNB has actually grown nicely in this quarter. And I don't find any reason that this growth will not be sustained in Q4. Because of the kind of prospects we are observing in the market in terms of retail agriculture, the MSME sector, and also in the infrastructure sector, we find a lot of opportunities there,” the top executive said.

Shares of Punjab National Bank were trading 1.56% higher at Rs 99.85 on the NSE as of 11:15 a.m. on Tuesday, while the benchmark Nifty 50 was 0.62% up at 23,505.55 points.