PNB looking for afresh start into insurance business

Punjab National Bank (PNB) is looking for a fresh start into insurance business. A board-level committee has been set up for the same.

In a communication with The Hindu Mohan V. Tanksale, Executive Director, said, a decision in this regard was taken at the last meeting of the board.

The panel will look into all possibilities for its entry into the insurance field. The scope of banks entry into insurance can be either as a corporate agent or work as a multi-product distributor or be a product manufacturer. The panel has been asked to give recommendation on the right business model for the bank’s foray into the insurance segment.

Mr. Tanksale told that the panel will be giving its recommendations in three months.

Several large Indian banks as well as foreign banks have entered the Indian life insurance space, but PNB remained out of this segment. Earlier PNB had planned to enter insurance segment in a multi-way joint venture with Vijaya Bank, Principal and Berger Paints but an exclusivity clause forced it to restrain from pursuing any kind of insurance activity, either underwriting or distribution. Mr. Tanksale told, the problem has been solved.

He told PNB is expecting to achieve a 40% growth in fee-based income during the current financial year. During 2009-10 bank fee-based income amounted at Rs 3,565 crore around 11-12 per cent of the bank’s total income. Mr. Tanksale said PNB has been interested in increasing fee-based income this year to 15 per cent.

The Executive Director has a target of achieving a 20-22 per cent credit growth this year. He disclosed that bank in general is being selective and cautious in lending to commercial real estate business. He relates this to the high risk weight assigned to commercial real estate loans. He informed bank is doing well in auto (cars, in particular), retail home and education segments in terms of credit disbursal. Bank auto loan portfolio is worth around Rs. 3,000 crore, the home segment Rs. 8,000 crore and education Rs. 2,000 crore.

Mr. Tanksale said the credit offtake in case of infrastructure projects is a bit slow. But he quickly said, the sanctions for this are happening. He said, in this case there is a usual delay in time between sanctions and loan availing. In the farm sector the debt closure as already taken place and as the monsoon is normal, thus he expects increase in agriculture credit pick up.

Mr. Tanksale argues that fixing a base rate will not make some borrowers to pay more. He said switch to base rate will force banks to focus on managing the cost of operations.

PNB issue security alerts about phishing attempts

Customers of Punjab National Bank received security alerts from the bank. The bank has alerted its customer to be alert of phishing attempts. The alert stated that recently login attempts into their customers’ accounts have been tracked which were made from certain blacklisted IP addresses.

To keep check on such attempts currently bank has blocked access to accounts through internet banking. To provide more security PNB’s security team has added an extra verification process for all its net banking users.

The bank has also informed its customers that it does not send any email requesting for customer's account information or passwords. And has told its customers not to give away any such information and they should inform bank about in case they receive any such mails