SS Mallikarjuna Rao, MD and CEO, Punjab National Bank

For the 18 crore customers of the newly amalgamated Punjab National Bank (PNB)— which included Oriental Bank of Commerce ( OBC) and United Bank of India under its fold from April 1 — it is business as usual, said SS Mallikarjuna Rao, Managing Director & CEO, PNB. The three-way amalgamation, despite the Covid-19-induced lockdown, has got off to a smooth start for the customers, although footfalls in branches have dropped, Rao told BusinessLine in an interaction. Edited excerpts:

How has the merger with OBC and United Bank played out in the current Covid-19 times?

There are three dimensions to this merger — business integration, technology integration and human integration. Business integration has already happened — all three banks have provided similar products and services; human integration will take place and there could be a spillover of one month from the planned date of April 30. Technology integration was anyway milestone-based, and planned to be over by December 2020. Amalgamation has gone off well. For customers, it is business as usual, though footfall is very less at the branch level, due to the lockdown.

At what stage is the human integration?

Human integration, we had planned by April 30. It may have a spillover of a month. Transfer of various leaders in the field that were to happen between April 15 and 30 may get postponed by 30 days. We had planned massive restructuring of the bank in terms of circle offices, zonal offices and processing centres. They are going to be operationalised from May 1 because of Covid-19, provided the pandemic impact and lockdown tapers off.

Do you think Covid-19 will badly affect the economy?

I feel the economy will bounce back strongly from Covid-19. This is a wonderful opportunity for domestic MSMEs to play a critical role and bring down the cost of production for our manufacturers of finished goods. MSMEs will have an important position.

How are you helping farmers and MSMEs in solving cash-flow mismatch in the current Covid-19 times?

Over the last 10 days, PNB has come up with four schemes to help farmers, special help groups, individuals in the salaried class and corporates tide over the cash crunch that they may face in these times. For Kisan Credit Card holders, we are giving emergency credit funding of 25 per cent of existing credit limit up to ₹50,000. Based on a simple request letter, we are crediting it to them to tide over their cash problems. Similarly, for SHGs, we are providing ₹5,000 per member and maximum ₹1 lakh per group. For personal loans, we are providing three times of monthly average salary up to ₹3 lakhs. All these can be repaid in 36 months. We are increasing working capital limits by 10 per cent for corporates.

Small and medium NBFCs are anguished that banks like yours could be tight-fisted in extending RBI announced moratorium...

I don’t agree that banks will be risk averse. They (NBFCs) also need to put their house in order. The liquidity window is open to NBFCs through the RBI-announced TLTRO. We are also open to look at their requirements on a case-by-case basis. We have made available a two-page application on our corporate website. Small and medium NBFCs need to engage with banks properly rather than having a dejected opinion that banks will not give them credit.

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Published on April 12, 2020