Punjab & Sind Bank MD & CEO, Swarup Kumar Saha

Punjab & Sind Bank has begun closely tracking its MSME borrowers for early signs of stress as uncertainty arising from the conflict in West Asia raises concerns over future cash flows for small businesses dependent on larger corporates. While the bank’s asset quality remains stable and collection efficiency strong, Managing Director and CEO Swarup Kumar Saha said a prolonged disruption could eventually impact parts of the MSME sector.

“At the current juncture there is no situation that is alarming for us. But what we can foresee is that if this lingers a bit longer then there will be an impact. Some of the MSMEs that are dependent on the corporates will see their cash flows getting impacted. MSMEs will have some impact going forward,” Saha told businessline on the sidelines of a customer meet in Ahmedabad on Monday evening.

“We are hopeful that the situation will be resolved quickly. At the same time, we are monitoring our accounts much more closely now, trying to understand whether customers are entering a stressful situation and provide whatever support we can as a bank,” he added. Saha’s comments are consistent with the caution he expressed during the bank’s recent earnings call, where he said that Punjab & Sind Bank has relatively limited exposure to foreign exchange-linked business and is therefore somewhat insulated from direct external shocks. However, prolonged uncertainty could eventually affect smaller businesses through weaker cash flows and slower economic activity.

Despite the caution, the bank’s collection performance remains robust. “In MSMEs, our collection efficiency is around 92 per cent. Collection efficiency has improved steadily over the last three years. But internally, we feel we have to be very careful. We are mindful of the fact that if the conflict extends, there can be an impact,” Saha said. The improvement is even more pronounced at the overall bank level. Collection efficiency has risen from 67 per cent in March 2022 to 96 per cent in March 2026, reflecting stronger credit monitoring and recovery efforts. The bank has also proactively recognised some weaker accounts and strengthened monitoring systems to identify emerging stress at an early stage.

The lender reported its highest-ever annual profit in FY26, underscoring the progress made in strengthening its balance sheet and improving operational efficiency. Net profit rose 30.12 per cent to ₹1,322 crore, the highest in the bank’s history. Total business grew 14.94 per cent to ₹2.64 lakh crore, while deposits increased 12.37 per cent and gross advances expanded by 18.29 per cent during the year. The bank’s growth was driven by strong momentum across its Retail, Agriculture and MSME (RAM) businesses, which now account for nearly 59 per cent of its portfolio. Retail advances grew more than 24 per cent, agriculture advances over 23 per cent and MSME advances nearly 29 per cent during FY26.

While Punjab & Sind Bank plans to increase its branches from the current 1,654 to 2,000 — by FY29 — across the country, Saha said the focus is increasingly on productivity rather than merely expanding the network. “Most of the branches of our bank are in the northern part of the country. So there is a degree of saturation. We therefore look for opportunities where we can rationalise by merging branches,” he said, adding that the bank has targeted to clock ₹4 lakh crore of business by FY29.

At the same time, the lender is expanding in Maharashtra, Chhattisgarh, Gujarat, Karnataka, Tamil Nadu, Andhra Pradesh, Telangana, Odisha and Jharkhand. The bank has engaged a global consultant to identify high-potential locations and support its expansion strategy. According to Saha, nearly 80 per cent of India’s banking business is concentrated in around 200 districts. Punjab & Sind Bank currently operates in approximately 163 of these districts, leaving immediate scope for expansion into another 37 districts. The lender is also strengthening its network through additional zonal and regional offices.

A key focus area for management is improving branch productivity. Business per branch has increased from ₹112 crore four years ago to around ₹159 crore currently. “If you see the progress over the last four years, business per branch has improved from ₹112 crore to ₹159 crore. By FY29, we should be reaching ₹200 crore of business per branch,” Saha said. The productivity push is expected to complement the bank’s expansion plans and improve operating efficiency across the network.

Among the states identified for expansion, Gujarat has emerged as one of the bank’s strongest-performing markets. “Expansion in Gujarat is a key strategy for the bank as the state accounts for 31 per cent of our total business growth, which is more than double the bank’s overall business growth rate of around 15 per cent. Gujarat is among our top three states,” Saha said.

The lender plans to deepen its presence in the state as part of its broader strategy to diversify beyond its traditional northern India stronghold. Punjab & Sind Bank is also preparing to establish an International Banking Unit (IBU) at GIFT City in Gujarat. “We should be in GIFT City in the second half of the year,” Saha said. The proposed IBU is expected to strengthen the bank’s offshore banking, trade finance and international business capabilities while enabling it to participate more actively in cross-border financial transactions from India’s international financial services hub.

Published on June 9, 2026