Punjab & Sind Bank

Dear Stakeholders,

I am pleased to present before you the Annual Report of the Bank for the Financial Year 2023-24. Your Bank's Total Business crossed the Rs. 2 lakh crore mark as on March '24 despite challenges on geo-political and domestic fronts. Bank has made progress in several key areas and has successfully implemented new initiatives for the benefit of customers. During the year, Bank has successfully upgraded its Core Banking Solution from Finacle 7 to 10 and its Treasury Solution for better performance and efficiency.

The global economy exhibited resilience and showed a gradual resurgence achieving a growth rate of 3.2 per cent in 2023 against 3.5 per cent in 2022 amidst heightened risks and uncertainties. Global economic uncertainty, including higher energy and food prices coupled with volatile markets posed a challenge for almost all nations. According to the projections, as per IMF latest report, growth for 2024 and 2025 will hold steady around 3.2 percent, with median headline inflation declining from 2.8 percent at the end of 2024 to 2.4 percent at the end of 2025. This stability is primarily attributed to the higher interest rates set by Central Banks to curb inflation and gradual reduction in fiscal support. In most regions, global inflation is declining at a faster pace than initially anticipated, propelled by the resolution of supply-side challenges and the implementation of tighter monetary policies.

The domestic economy is gaining strong momentum, with inflation beginning to ease. In March 2024, retail inflation fell to 4.85 per cent, down from 5.09 per cent in February 2024. The GDP grew by 8.2 per cent in the fiscal year 2023-24, driven by mining, manufacturing, and financial sectors. This marks the third consecutive year of GDP growth at 7 per cent or higher, following expansion of 9.7 per cent in 2021-22 and 7.0 per cent in 2022-23.

The Reserve Bank of India (RBI) has projected a GDP growth of 7.20 per cent for the fiscal year 2024-25, citing several supportive factors. This includes healthier balance sheets of Banks and corporates, progress in fiscal consolidation, manageable external balance, and ample forex reserves acting as a safeguard against external uncertainties. Further, on the demand side, there's sustained growth in manufacturing, a thriving construction sector and strong rural growth.

According to the Reserve Bank of India (RBI), India's Banking sector is adequately capitalized and effectively

regulated.

The Indian Banking sector has experienced significant growth, fuelled by robust economic expansion, higher disposable incomes, growing consumerism, and improved credit accessibility. Key drivers of this growth include the vast consumption market, rural digitization initiatives, and the proliferation of digital products and solutions.

Scheduled Commercial Banks (SCBs) exhibit robust balance sheets, indicating their health and soundness.

During FY 23-24, Schedules Commercial Banks registered deposits and advances growth of 13.50 per cent and

19.20 per cent respectively. As per RBI, the asset quality of Scheduled Commercial Banks recorded sustained improvement and their GNPA ratio moderated to a 12-year low in March 2024 at 2.8 per cent. Their NNPA ratio too improved to a record low at 0.6 per cent. In FY 24-25, Scheduled Commercial Banks are expected to grow by

13.5 per cent under the credit segment.

The Bank strives to adopt the best Corporate Governance practices which rests on the essential principles of independence, accountability, responsibility, transparency, fair and timely disclosures which have built credibility over the years. The Board and its various Committees meet at regular intervals throughout the year giving them an opportunity to take stock of various aspects of critical importance to the Bank. These Committees enabled the Board members to perform their governance and supervisory duties and have an oversight on the performance of senior management.

The brief highlights of the performance of your Bank during the year 2023-24 are as under:

The Total Business of your Bank grew by 7.72 per cent to Rs.2.05 lakh crore with Deposit and Advances growth of 8.89 per cent and 6.15 per cent respectively. Bank has continued diversification in the loan book and the percentage of RAM (Retail, Agriculture and MSME) advances, increased to 51.73 per cent in FY 2023-24 driven by a Retail growth of 14.96 per cent.

The asset quality of the Bank improved with the Gross & Net NPA ratio of 5.43 per cent and 1.84 per cent respectively. The Provision Coverage Ratio stood at 88.69 per cent driven by strong recovery in Technical Written- Off (TWO) accounts of Rs.758 crore.

Bank registered an Operating Profit of Rs.1131 crore and Net Profit of Rs.595 crore during FY 2023-24. I am happy to announce that the Board of your Bank has declared a dividend of Rs.0.20/- per equity share for the Financial Year ended March 31, 2024. Your Bank is adequately capitalized with Capital Adequacy ratio (CRAR) of

17.16 per cent and CET-1 ratio of 14.74 per cent as on March '24.

Going forward, your Bank will play an active role in the vision of Viksit Bharat by extending credit support to all sectors of the economy including Retail, Agriculture, MSME. On the digital front, we are adding new products and services on an ongoing basis. We are constantly collaborating with the Fintech ecosystem to pave the way for a more inclusive financial service landscape. Further, with a stronger IT platform, Bank is better placed to provide more value added services and take initiatives to cater to the evolving customer expectations for a sustainable growth. Bank will focus on remaining strong and resilient while seeking to maintain sustainable, risk- calibrated and profitable growth in business.

I sincerely thank all the stakeholders, customers for their continued support and trust in the Bank. I would also like to take this opportunity to thank Reserve Bank of India and the Government of India for their support and guidance.