Punjab National Bank

Dear Stakeholders,

On behalf of the entire team, I am pleased to present the Annual Report for the Financial Year 2023-24. This year has been the year of both i.e., challenges as well as opportunities and it is a matter of immense pride for all of us that India has emerged stronger than ever.

India's economic performance in FY 2023-24 has been truly remarkable. GDP growth for the FY 2023-24 increased to 8.2 per cent which has consolidated the position of the country as the world's fastest growing economy for the third consecutive year. The growth this year has been fueled by several factors such as strong domestic consumption demand, increase in private spending and uptick in Business confidence.

In line with the performance of the economy, the banking sector also performed well during the year and could exceed its past performance in Business, Profitability and Capital, etc. Financial Year 2023-24 has been the year of growth and recovery for the Banking industry. The Bank could perform as per expectations and delivered commendable growth during the year, strengthening its foothold in the industry. The first and foremost achievement of the Bank during the Financial Year 2023-24 was attaining market capitalization of more than Rs.1 Lakh Crore and scrip price surpassing the mark of Rs.100/. PNB was on the second position as on 1^st April, 2024 in terms of market capitalization amongst Public Sector Banks.

In business terms, Bank surpassed the business figure of Rs. 23.50 Lakh Crore recording a quantum increase of Rs. 1.87 Lakh Crore over the previous year. The Bank has performed admirably in all the quarters. Global Advances recorded double digit growth of 11.2 per cent with Domestic Advances also registering the double digit growth of 10.9 per cent. As on 31^st March, 2024, Global Deposits stood at Rs.13.70 Lakh Crore while Advances stood at Rs.9.83 Lakh Crore.

Amongst Advances, Retail, Agriculture and MSME (RAM) Advances registered the growth of 10.7 per cent. MSME customers who graduated beyond MSME, were reclassified as corporate & others during the year and taking this reclassification into account, RAM advances growth would be 11.7 per cent Year on Year (YoY). Retail advances showed growth of 12.6 per cent YoY. In Retail Segment, Housing Loan, Vehicle Loan and Personal Loan exhibited the YoY growth of 14.5 per cent, 25.6 per cent and 14.4 per cent respectively.

Asset quality of the Bank improved during the year through adoption of robust recovery and enhanced underwriting standards. The Bank's GNPA ratio declined to 5.73 per cent as on 31^st March, 2024 from 8.74 per cent as on 31^st March, 2023. Net NPA ratio also went down to 0.73 per cent as on 31^st March, 2024 from 2.72 per cent as on 31^st March, 2023. Provision Coverage Ratio including Technical Write Off (TWO) of the Bank improved to 95.4 per cent as on 31^st March, 2024 from 86.9 per cent as on 31^st March, 2023.

On the digital front, the Bank has performed remarkably by coming out with more than 100 products, processes and portals. Some of the major products, processes and portals launched during the year include PNB Swagat providing Personal Loan to New to Bank Customers (NTB), Digi Education Loan, Digital Vehicle Loan, Integrated Payment & Collection Services, CMS Auto Debit Mandate, Digital Document Execution, etc. The steps taken towards digitalization could help the Bank scaling newer heights.

Apart from digital thrust, development under Human Resources Transformation also remained at the forefront and UDAAN project took off smoothly covering the officers in higher grades.

"Against this backdrop, your Board of Directors have pleasure in presenting the Annual Report of your Bank for the year ended 31^st March, 2024 (FY 2023-24) along with its audited Annual Financial Statements".

1. Topline

a. Global Business stood at Rs. 23,53,038 Crore vis-a-vis Rs. 21,65,844 Crore, registering YoY growth of 8.6 percent.

b. Global Deposits stood at Rs. 13,69,713 Crore as on 31^st March, 2024 as against Rs. 12,81,163 Crore as on 31^st March 2023, showing the growth of 6.9 percent.

c. CASA Deposits was at Rs. 5,52,499 Crore as on 31^st March, 2024 as against Rs.5,38,015 Crore as on 31^st March, 2023.

i. Current Deposits was at Rs. 72,201 Crore as on 31^st March, 2024

ii. Savings Deposits was at Rs. 4,80,298 Crore as on 31^st March, 2024.

d. Global Advances stood at Rs. 9,83,325 Crore as on 31^st March, 2024 against Rs. 8,84,681 Crore as on 31^st March 2023, recording the growth of

11.2 percent.

e. Retail Advances was at Rs. 2,22,574 Crore as on 31^st March, 2024 registering the growth of

12.6 per cent YoY

f. Agriculture Advances was at Rs. 1,58,188 Crore as on 31^st March, 2024 with growth of

11.3 per cent YoY

g. MSME Advances was at Rs. 1,39,288 Crore as on 31^st March, 2024 as against Rs.1,30,178 Crore as on 31^st March, 2023 showing the growth of 7.0 per cent. During the year, some MSME

customers graduated and got reclassified as Corporates. If this reclassification effect is taken into consideration for last year, then MSME Segment growth would be 12.0 per cent YoY.

h. Retail Agriculture MSME (RAM) Advances was at Rs. 5,20,050 Crore as on 31^st March, 2024 visa-vis Rs.4,69,981 Crore as on 31^st March, 2023, showing the growth of 10.7 per cent YoY Taking into consideration the impact of reclassification, the growth of RAM would be 11.7 per cent YoY

i. Share of RAM w.r.t. Domestic Advances was at

55.2 per cent as on 31^st March, 2024.

2. Bottom Line

a. Net Profit of the Bank was at Rs. 8245 Crore in FY 2023-24 showing YoY growth of 228.8%.

b. Operating Profit of the Bank was at Rs. 24,931 Crore in FY 2023-24 showing YoY growth of

10.7 per cent. It stood at Rs. 22,529 Crore in FY

2022-23

c. Net Interest Income was at Rs. 40,083 Crore in FY 2023-24 vis-a-vis Rs. 34,492 Crore in FY2022- 23, registering the growth of 16.2 per cent YoY

3. Asset Quality

a. Gross NPA of the Bank stood at Rs. 56,343 Crore as on 31^st March, 2024, improving from the level of Rs.77,328 Crore as on 31^st March, 2023.

b. Gross NPA ratio exhibited decline of 301 bps from a level of 8.74 per cent as on 31^st March, 2023 and stood at 5.73 per cent as on 31^st March, 2024.

c. Net NPA of the Bank improved from as high as Rs. 22,585 Crore as on 31^st March, 2023 to Rs. 6,799 Crore as on 31^st March, 2024.

d. Net NPA ratio declined by 199 bps from a level of 2.72 per cent as on 31^st March, 2023 and stood at 0.73 per cent as on 31^st March, 2024.

e. Provision Coverage Ratio (PCR) including TWO increased by 850 bps to 95.4 per cent as on 31^st March, 2024 as against 86.9 per cent as on 31^st March, 2023.

f. Provision Coverage Ratio (PCR) excluding TWO increased by 1710 bps to 87.9 per cent as on 31^st March, 2024 as against 70.8 per cent as on 31^st March 2023

4. Key Ratios (Global)

a. Net Interest Margin improved to 3.09 per cent in FY 2023-24 from 3.06 per cent in FY 2022-23.

b. Cost of Deposits was at 4.91 per cent in FY

2023-24 as against 4.10 per cent in FY 2022-23.

c. Yield on Advances increased to 8.28 per cent in FY 2023-24 from 7.16 per cent in FY 2022-23.

d. Yield on Investment increased to 6.78 per cent in FY 2023-24 from 6.57 per cent in FY 2022-23.

e. Return on Average Assets was at 0.54 per cent in FY 2023-24 from 0.18 per cent in FY 2022-23.

f. Business per employee improved to Rs.23.84 Crore as on 31^st March, 2024 from Rs.21.64 Crore as on 31^st March, 2023.

g. Business per branch improved to Rs.225.25 Crore as on 31^st March, 2024 from Rs.209.53 Crore as on 31^st March, 2023.

5. Capital Position

The capital adequacy of the Bank improved during the financial year on account of capital raising by the Bank coupled with improved profitability. During FY 2023-24, Bank has raised Rs.6012 Crore through Additional Tier I (AT I) Bonds and Rs.3090 Crore through Tier II Bonds. The Bank continued with its focus on sustainable business growth by targeting better rated borrowers with low risk profile. Going forward, the Bank is strategically well placed to meet the growing credit needs of the economy.

Key Highlights

a. The Capital Adequacy Ratio of the Bank recorded increase by 47 bps to reach at 15.97 per cent, as of 31^st March, 2024, with AT-1 capital at 2.13 per cent and Common Equity Tier-1 (CET-1) at

11.04 per cent.

b. Risk Weighted Assets (RWA) of the Bank were optimized to Rs. 7,35,435 Crore as on 31^st March, 2024 on account of focus on better rated accounts and churning of portfolio of the Bank.

6. Compliance Culture

a. In accordance with Reserve Bank of India guidelines, an independent Compliance Function headed by Chief General Manager designated as Group Chief Compliance Officer (GCCO) has been set up in the Bank. The Board approved Group Compliance Policy defining various aspects of compliance function is in place.

b. Compliance Function activities are managed by dedicated officials at Head Office, Zonal Compliance Officers at Zonal Headquarters and Circle Compliance Officers at Circle Headquarters.

c. Highlights of compliance function include:

i. Monitoring of Compliance Risk at Bank level using in-house developed Compliance Risk Assessment Model (CRAM).

ii. Monitoring of compliance to Key Compliance Obligations (KCOs) by individual officers in the Bank using inhouse developed Compliance Monitoring Tool (CMT).

iii. Group Compliance Risk Framework along with Group Compliance Risk Scorecard has been developed to have an effective compliance oversight at Group level.

1. Key Digital Initiatives & Achievements

a. The Bank introduced various digital offerings such as Pre-Approved Business Loans (PABL), Digital Kisan Credit Cards through Jan Samarth Portal, Digi Home Loans, Digital Personal Loan to New To Bank (NTB) Customers (PNB- Swagat), e-PM SVANidhi, e-GST Express, e-BG, digitalization of recovery process and various other digital experiences aimed at enhancing customer satisfaction & convenience.

b. Initiated e-OTS (Express-One Time Settlement)

for E2E digital settlement approval process for NPA Accounts having o/s balance upto Rs.10 Lakh.

c. Introduced Soundbox device (PNB E-Swar) at merchant location where Bharat QR codes are issued or required for digital transactions which provide immediate audio notification on every successful transaction.

d. An application "PNB Aarambh" was launched to facilitate acquiring of prospective borrowers customers.

e. Digital Gold Loan journey has also been initiated since November 2023.

2. Key Structural Transformations

a. Customer Acquisition Centres (CACs) across 55 locations, extending to over 80 cities have been

set up. These CACs facilitated in establishing and deepening relationship with customers through different channels and enhance marketing capabilities in targeted areas.

b. Leveraging Bank's Subsidiary- PNBCSL in augmenting Retail Products marketing:

The Bank expanded the role of PNB Cards & Services Limited (PNBCSL), a wholly-owned subsidiary, to encompass the marketing and distribution of the bank's retail offerings. This includes sourcing of Housing Loan (above Rs.10 Lakh), Vehicle Loan (above Rs.10 Lakh) and Education Loan (above Rs.7.50 Lakh). Further PNBCSL has also been entrusted with the job of sourcing CASA business.

c. Centralized PNB Loan Point (C-PLP): A Centralized Processing Centre, C-PLP, was established to handle retail loan leads sourced through PNBCSL. This structure ensures efficient lead management and faster processing, resulting in sanctioning of more than Rs.100 Crore retail loans within a short span of time.

d. Digital Marketing Cell: Recognizing the

untapped potential in digital marketing adoption, the bank has set up Digital Marketing Cell. The aim is to foster awareness, create adoption opportunities and enhancing organizational reputation. The digital marketing team is tasked with maintenance of digital assets, driving traffic, managing consumer sentiment and customer service and facilitating conversions.

3. Customer Service: The Bank accords high

importance to Customer Service and constantly taking initiatives to improve it. Some of the initiatives taken during FY 2023-24 are as under:

a. To improve the visibility of Toll-Free Numbers (TFNs) and to help the customers to easily remember the TFNs, Bank has procured two new 8-Digit numbers i.e. 1800 1800 and 1800 2021.

b. With effect from 01.11.2023, Doorstep Banking is being offered through PSB Alliance at 4188 branches of the Bank at 610 Centres.

c. Doorstep Banking Services (DSB) are available to all customers (without any age/ physical disability criteria) through Universal Touch Points (UTPs), i.e., Common mobile application, Common Contact Centre and web portal. The DSB Service booked through these UTPs will be delivered by an authorized agent of the

outsourced agency. However, Doorstep Banking Services are more beneficial to senior citizens, differently abled or incapacitated persons and services to such customers is provided in an effective and transparent manner.

d. To collect the customer feedback, a SMS is triggered to the customer's registered mobile number upon successful processing of Customer Induced transactions above Rs. 10,000/- (cash deposit, withdrawal) through branch, to provide feedback on the quality of service rendered by branch officials.

e. 23 Self-Service options are available on Contact Centre IVR (Interactive Voice Response). Functionalities like facility of Direct access to agent for HNI customers, Blocking of UPI, Mini statement over SMS and Registration of e-mail for account e-statement, through IVR have been recently started.

f. There is a dedicated team at Contact Centre to handle PNB ONE related issues and flag the technical issues to the back-end team.

4. Project UDAAN- Revolutionizing HR capabilities to transform Bank

HR transformation initiative, PNB UDAAN, was launched to enhance HR functions and processes. This project comprises of various modules and includes establishment of a Human Resource Transformation (HRT) cell. Under the UDAAN project, PNB embarked on a digital HR transformation journey, achieving the following:

a. Foundational Enhancements: Introduction of end-to-end Digital Performance Management Systems, role clarity, scientific target setting, differentiation of performance scores among employees, and implementation of new systems & policies such as Job Families, Succession planning, 360-degree feedback, etc.

b. Process Digitization: Digitization of critical processes such as manpower assessment, job role allocation, objective and system- driven performance management, and the implementation of analytics-based dashboards for performance enhancement & robust business reviews.

c. Unleashing Potential: Maximizing the potential of each employee through a comprehensive learning and development program. This includes various capability-building measures such as

redesigning job families for specialization, career paths, succession planning, talent management, individual development and grooming plan including One-on-One coaching.

Project UDAAN is not only about digital processes but also brings with it a major aspect of capability development. A best-in-class Leadership Development Program was conducted and under it, more than 900 senior level managers were imparted leadership training. PNB's flagship LDP is in 3 forums - Leading Self, Leading Team & Leading Transformation. Each forum consists of 2 day classroom training & 90 minutes One-on-One coaching.

Looking at the success of UDAAN 1.0, the Bank is set to take this transformation journey to the next level with UDAAN 2.0.

5. DIVIDEND

Board of Directors of the Bank has recommended a dividend of Rs.1.50 per equity share (75 per cent) of face value of Rs.2/- each for FY 2023-24, subject to declaration/approval of the shareholders at the 23^rd Annual General Meeting of the Bank.

III. ASSET QUALITY

The Bank was able to reduce Gross NPA from the level of Rs. 77,328 Crore as on 31^st March, 2023 to Rs. 56,343 Crore as on 31^st March, 2024. Net NPA of the Bank came down to the level of Rs. 6,799 Crore as on 31^st March, 2024 from Rs. 22,585 Crore as on 31^st March, 2023. Focus on asset quality continues to be one of the topmost priorities for the Bank. Provision Coverage Ratio (PCR) including TWO is at a healthy level of 95.4 per cent as on 31^st March, 2024.

1. Recovery & Upgradation: Total Recovery stood at Rs. 20,164 Crore for FY 2023-24. Of this, total Cash Recovery (Cash Recovery+ Recovery in Technical Write Off (TWO)+ Recorded Interest (RI)) stood at Rs.16,716 Crore for FY 2023-24.

2. Upgradation through Resolution Mechanism:

The Resolution Cell was created to deal exclusively with restructuring/resolution of NPA accounts and recovery in National Company Law Tribunal (NCLT) cases. The details regarding the same is as under:

Further, a sum of Rs.3603 Crore was recovered in NPA accounts under IBC in NCLT.

3. Mega e-Auctions: During FY 2023-24, 11,502 properties were uploaded on e-Bikray portal. Out of which, 2081 Immovable Properties (IPs) were auctioned successfully.

4. Sale of Assets to Asset Reconstruction Company (ARC)/NARCL: Details of financial assets sold to ARCs/NARCL is as under:

(Amount Rs. in Crore)

a. War against NPA campaign

i. Dedicated tele-calling campaigns and rigorous field visits to NPA borrowers.

ii. Head Office provided its full support and involvement for targeted recovery actions.

b. Digitization of recovery efforts

i. Launch of re-vamped digital One Time Settlement (OTS) (e-OTS) offering for NPA recovery for eligible a/cs upto Rs 10 Lakh.

ii. Recovery portal - SAMARTH, 11 out of 17 modules were made live during FY 2023-24.

c. Digital e-OTS journey for robust recovery

i. e-OTS is a digital OTS approval process on filtered NPA Accounts having outstanding amount up to Rs.10 Lakh, in which all the steps from applying for OTS to sanctioning of OTS & steps involved thereafter are automated. The solution has been rolled out through PNB official website & PNB ONE App.

ii. PNB is the first Bank to launch such kind of an online automated OTS approval process.

iii. To enhance the outreach of available Special One Time Settlement Scheme (SOTS) and to target small NPA Accounts, e-OTS can prove to be a very effective tool in the recovery process.

iv. Settlement approval process shall be expedited for small loan NPA accounts and OTS approval TAT will get reduced substantially.

v. The recovery generated through this process, will have a positive impact on the overall profitability of the Bank, especially in DB3 and Loss accounts.

vi. Convenience to eligible NPA Account borrowers under e-OTS process, Sanction Letter and No Dues Certificate shall be generated online.

IV. EXPANDING DIGITAL FOOTPRINTS

Technology continues to drive the Banking sector and with the advent of Fintech in the banking landscape, it has become all the more critical to adopt and imbibe technology in the Bank's day to day operations effectively to remain competitive and grow.

The Bank, during FY 2023-24, took up various digital initiatives towards business growth and customer convenience:

1. Online Locker Agreement Execution: A facility is provided to customers for execution of locker agreement online. This involves integration with NeSL for e-stamping.

2. DIGILOCKER: API Integration for Digi Locker through which the customer can fetch the account statement by providing the necessary inputs like Account Number, Period, Customer Name, etc. The account statement can also be downloaded in PDF format.

3. Positive Pay System through PNB Website: Positive Pay System through PNB Website has been implemented to get confirmation from customers for clearing of cheques amounting to Rs. 50,000 and above.

4. e-Mandate as Sponsor Bank Integration: To register e-Mandate as a sponsor Bank, our bank is participating in the National Automated Clearing House (NACH). Bank and its Corporates are accepting NACH Mandate, which is a direction of a customer to honour recurring payments

like insurance, loan installment, Systematic Investment Plan (SIP), etc.

Contactless cards- q SPARC: In order to facilitatecontactless feature in domestic and international locations, NPCI has enhanced their contactless product specification known as RuPay Contactless Product (q-SPARC) and requested the Bank to enable this feature on JCB card so that JCB card holder can enjoy the seamless tap and pay feature in their JCB card.

6. E-Mandate Registration and Transaction Processing as Sponsor Bank: Feature of Self E-Mandate registration by customers for their PNB loan Accounts through Bank's Website with authentication as Debit Card, Internet banking and Aadhaar.

7. RBI Unclaimed Deposit API integration: API integration with the RBI UDGAM portal has been implemented to facilitate the customers for centralized search of unclaimed deposits/inoperative accounts.

8. Electronic Bank Guarantee: Electronic Bank Guarantee (e-BG) is end-to-end digital product. Bank's CBS system is integrated with NeSL for e-Stamping, e-signing and submission of digitally signed e-BG document on NeSL's depository through middleware developed by Bank.

9. Online BG Verification Portal: This portal is used as a medium through which the beneficiaries can validate the genuineness of Bank Guarantee.

10. PNB Secure Savings Account (SSA): PNB Secure Savings Account is a product which offers insurance with savings account. This has been achieved through integration with PNB Metlife through e-Insurance portal for insurance policy generation.

1. Digital Housing Loan: Under Digital Housing Loan, CBS system has been integrated with onlinepsbloans (OPL), Fintech partner, through middleware developed inhouse. It provides housing loan through end-to-end digital journey to customers who may or may not have customer relationship with our bank.

2. New to Bank Personal Loan (NTBPL): New to Bank Personal Loan is end-to-end digital product. It provides personal loan through end-to-end digital journey to customers who are not registered with bank or not having any customer relationship with the Bank.

3. Digi Vehicle Loan API Integration: APIs for the Self- Initiated Customer journey in which the customer will initiate the journey through different alternate channels- IBS/PNB ONE, PNB website (URL designed specifically for these products) for purchasing the vehicle for private use.

1. Digital Journey of PNB Krishi Tatkal Rin Yojana: End to

end Digital Journey for PNB Kisan Tatkal Rin Yojana to give hassle free digital experience to small farmer borrowers.

2. Digital Kisan Credit Card (KCC) journey through Jansamarth Portal: Bank's customers can avail KCC loan up to Rs.1.60 Lakh through Jansamarth Portal.

3. KCC Review and Drawing Power (DP) Enhancement:

PNB is offering to its existing KCC borrowers to review and enhance (Annual DP) their KCC accounts through the digital portal. It is the customer initiated Straight Through Processing (STP) Digital Journey for which Bank has provided APIs in where review date and DP enhancement will be marked for eligible borrowers.

1. Pre-Approved Business Loan (PABL): PABL is launched to offer straight through digital lending business loan facilities above Rs. 1.00 Lakh to Rs. 10.00 Lakh.

2. Easy renewal up to Rs.10.00 Lakh: End to end digital renewal will be done for all eligible borrowers having exposure upto Rs.10.00 Lakh.

3. Digital Journey of App Based GST Sahay Scheme: To

provide hassle free loan up to Rs.2.00 Lakh per invoice to GST registered MSMEs engaged in manufacturing, trading and services against GST invoices at competitive rates subject to maximum of Rs. 10.00 Lakh per borrower.

4. Digital Journey of PNB GST Express Loan: To boost digital lending, e-GST EXPRESS scheme has been launched for loan above Rs.10.00 Lakh to Rs.100.00 Lakh with minimum manual intervention for Existing to Bank (ETB) customers only.

5. e-PM SVANidhi: To make the PM SVANidhi loan more flexible and easily accessible for all eligible urban street vendors, a new product "e-PM SVANidhi" has been launched. It offers collateral free loan upto Rs. 50,000 to applicants who are having KYC complied CA/SA with our bank based on Aadhar/PAN available in CBS.

1. Jansuraksha: API integration with Department of Financial Services (DFS) Jan Suraksha portal to automate

the process of enrolment and claim settlement of Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY) from BC location through Internet Banking Services (IBS)/Mobile Banking Services (MBS) and from branch.

GOVERNMENT BUSINESS

1. Accepting online credit to Public Provident Fund (PPF) & Sukanya Samriddhi Account(SSA) for Bank's own customers and for other than account holder through Mobile Banking Services (MBS).

2. Bhavishya API Integration for Pension Slip, Life Certificate Status, Form 16 and Due Drawn Arrear present in Government Business Software Solution (GBSS) server to Bhavishya portal.

1. Centralized Grievance Redressal Monitoring System (CGRMS) API (complaint Re-Opening): Re-opening of digital and non-digital complaint in CGRMS as per customer request. The facility of reopening of complaint with same docket number is developed.

1. QR Code Generation through PNB ONE and Retail Internet Banking: Customers can now display QR Code to receive payments instantly through UPI. The QR Code can also be downloaded and shared for receiving payments.

2. PNB SHOPPE (E-market place) in PNB ONE and Internet Banking: Bank introduced PNB Shoppe in PNB One and Internet Banking. PNB Account holders will now be able to earn extra rewards for their day to day shopping needs.

3. OTP on E-mail registration facility in PNB ONE: To

facilitate our customers, it has been decided to provide OTP on e-mail facility for users of PNB One.

4. Bulk fund transfer facility in PNB ONE: Earlier in PNB ONE, funds could only be transferred to single beneficiary at a time. Now, for enhanced user experience and faster payments, Bulk Fund Transfer facility has been introduced in PNB ONE.

5. Onboarding on Retail Internet Banking using Aadhaar OTP: Online Self-registration and Password Reset facility using Aadhaar OTP has been introduced.

6. UPI payment using RUPAY credit card in PNB ONE:

Functionality of UPI payment through PNB ONE using Rupay credit card has been started.

7. Waiver of OTP authentication for fund transaction Intra bank (within PNB) & Interbank, i.e., NEFT & IMPS and UPI transactions amount upto Rs.5000/- through PNB ONE.

WHATSAPP BANKING

1. The Bank is offering more than 40 services through WhatsApp Banking. Current Account holders, including those in Retail and Corporate categories, can now also utilize WhatsApp Banking with a new functionality to disable IBS/MBS.

2. The facility of block debit cards on a temporary or permanent basis, register for e-statements and "Block UPI" feature to enhance security has been introduced.

1. UPI registration for NRO accounts: Facility of UPI has been extended to Non-Resident Ordinary (NRO) customers as well, thereby making it more accessible and convenient for them to make domestic payments in India.

2. UPI 123PAY: UPI 123PAY is an instant payment system for feature phone users in a safe and secure manner without internet connectivity. Through UPI 123PAY, feature phone users will now be able to undertake a host of UPI transactions through pre-defined IVR number.

3. Linking of RUPAY credit card on UPI: Customers can use their RuPay Credit card for making payments to merchant through UPI. For this, customer has to link his card to BHIM PNB App or any enabled UPI App.

4. Interoperable Card-less Cash Withdrawal using UPI (ICCW): ICCW is a facility which enables a customer to withdraw cash from ATM by using UPI platform. There is no need to carry and remember card details. Cash withdrawal by scanning QR code through any ICCW enabled UPI app is now possible.

5. UPI INTERNATIONAL: To promote UPI payment platform globally, National Payment Corporation of India (NPCI) has introduced the functionality, UPI International (UPI Global) for Foreign Outward Remittance. The functionality can be used by customers visiting abroad who want to make payments to local merchants.

6. UPI Lite: Customers can make small payments of up to Rs.500 using on-device wallet.

V. ANALYTICS CENTRE OF EXCELLENCE (ACoE)

"Analytics Centre of Excellence" is a dedicated vertical responsible for developing all kind of reports, data reporting, providing Management Information System (MIS) support to other business verticals and developing AI/ML based solution for Bank. Besides these, ACoE is also responsible for maintaining the CIC Module (Bureau One), CIC Data submission, Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI), NeSL, Data aggregator/Account Aggregator, PNB 360 application dashboard and enterprise wide data warehouse.

1. Enterprise-Wide Data Warehouse (EDW): Bank has operational enterprise data warehouse project catering to various analytical/statutory/regulatory and reporting/dash-boarding requirement with data from 60 plus source systems being integrated into EDW. All downstream applications are receiving data through EDW and also all data requirements for various digital journeys are catered to.

2. Data Analytics Team: Data Analytics cell at ACoE was conceptualized to develop in house capability in the field of Artificial intelligence. Since then the cell is actively engaged in analysis which is broadly categorized in three broad verticals namely Business, Control and Support. These verticals have been identified with the objective of value-creation, increasing cross-sell, up-sell opportunity, increasing revenue, cost reduction, product enhancement, channel optimization, maximizing digital footprint, plugging revenue leakage and improved risk profiling of the existing as well as prospective customer base.

Analytics based leads are generated for potential customers who have higher propensity to use bank products as compared to other customers. Leads are identified after analyzing various parameters such as customer behavior with reference to their demographic details, investment profile, relationship with bank, transactional data, geographical distribution, digital presence, bank products usage etc.

Since inception, Data analytics team has been working to comply with various analytics related action points pertaining to EASE (3.0 to 6.0). In EASE journey of the Bank, there has been continuous improvement in Bank's position pertaining to analytics.

Going forward, apart from business generation, major focus will be on process improvement, digitalization, detecting revenue leakage and improvement in asset quality and onboarding new customers.

a. Usage of unstructured data: In order to explore the capabilities of conversion of unstructured data into structured one, below mentioned use cases have been developed in house with available tools on pilot basis.

i. Use of Social media interaction and feedback for sentiment analysis, product enrichment.

ii. Extraction of key information embedded in PDF like balance sheet.

b. Optimization of Cash Retention Limit (CRL) for Bulk Note Acceptor (BNA) and ATM- Time series analytical approach has been used to derive the cash retention limit for ATM/BNA so as to reduce overall cash requirement of the bank.

c. Procurement and Deployment of full stack analytical tool - Bank has procured and deployed IBM Cloud Pak for Data, a full stack analytical tool/ platform for carrying out Artificial Intelligence (AI) / Machine Learning (ML) studies.

d. Statement analyzer & spend analyzer- The team has developed the analyzer to have better understanding of customer spending and earning behavior to supplement credit decision for individual customers.

a. Account Aggregator (AA) Ecosystem: PNB is live with 11 Account Aggregators as both Financial Information Provider (FIP) and Financial Information User (FIU). Both FIP and FIU modules are live since 11-07-2022 and Bank has already started sharing data with other banks as FIP. As on date following Digital Journeys have been made live with PNB AA such as Digital Home Loan (DIGI HL), New to Bank Personal Loan (NTB PL), Digital Car Loan (DIGI CL), PNB ONE, Lens. Implementation of AA ecosystem for 9 RRBs of PNB has been completed on 31.10.2023.

b. Data Aggregation and Analytical Services (DAAS): PNB Data Aggregator facilitates to provide data from various public domain sources as well as analyze financial statements of companies and individuals. PNB Data Aggregation & Analytics Services (DAAS) Application not only draws raw data from multiple sources but also analyzes the data and provides information to enable users to take real time decisions.

Current Account Opening using video KYC, Housing loan, NTB PL (new to bank personal loan), Tab banking, SASTRA portal, Digital Vehicle Loan using DAAS APIs from Income Tax Return (ITR), Import Export Code (IEC) & Udyam registration, Bank statement Analysis, IEC, Vehicle data verification, BSA, Employees' Provident Fund Organization (EPFO), 26AA are the services has been made live.

c. Next Level Reforms: With EDW in place, Bank is well prepared to achieve the action points under next level reforms in PSBs for short term and long-term targets like digital transformation & enhancement, Big Data Analytics, change in banking technology, focused use of Fin-Tech and improvement in employee engagement through analytics.

d. PNB 360 and Customer 360 Dashboard: ACoE has developed in house Dashboard "PNB 360" for Business Monitoring to set short-term & longterm goals. It improves the speed and efficiency of accessing different data sets and makes it easier for decision-makers to derive insights that guides the business and marketing strategies. Dashboard graphical view helps the management to quickly review the outcomes of initiatives launched and then adjust the strategy to decrease cost and maximize efficiency.

Customer 360 is a dedicated dashboard for high value customers in line with PNB 360 with only view rights. Currently available for Central/State Government institutions/department PUS and SNA accounts. Customer is also given functionality to download reports in PDF/Excel format. Dashboard will provide graphical and pictorial representation of position of fund, movement of funds, Interest earned by customer, TDS deducted, Interest paid, no of facilities availed, Y-o-Y Comparison, Variation from last quarter, Variation from last Financial Year on T+1 basis etc.

1. Domestic: As on 31^st March 2024, the number of branches was at 10,136. The population-group wise branches along-with the percentage share are given as under:

2. International: As on 31^st March, 2024, Bank has presence in 6 countries by way of 1 branch at Dubai (another 1 branch at GIFT City Gujarat also caters to the international business of the bank), 2 subsidiaries (London-UK and Bhutan), 1 joint venture (Nepal), 2 representative offices (Myanmar and Bangladesh).

VII. INTERNATIONAL BANKING

As on 31^st March, 2024, the Bank has 255 branches authorized to handle Foreign Exchange Business which are routing forex transactions through 4 Trade Finance Centers (TFCs) functioning at New Delhi, Chennai, Kolkata & Mumbai. TFCs are specialized for centralized handling of trade transactions and International Service branch is specialized for handling all Inward remittances.

The Bank has 1 Exchange Bureau at Indira Gandhi International Airport to facilitate encashment of foreign exchange currency notes by foreign tourists/ Non Resident Indians (NRIs).

1. DOMESTIC BUSINESS

The Bank registered a Foreign Exchange Business Turnover of Rs.1,34,868 Crore (Exports and Imports together) for the FY 2023-24.

Bank has an International Service Branch (ISB) functioning at New Delhi for handling Inward Remittances of the Bank as a whole. During FY 202324, Bank handled remittance business of Rs.80,893 Crore.

The Bank has Rupee Drawing Arrangements (RDA) with 8 exchange houses (5 in the Gulf, 1 each in Singapore, UK and Seychelles) to facilitate remittance from NRIs.

The Bank also has remittance arrangement under Money Transfer Service Scheme (MTSS) with Transfast Financial Services Pvt. Ltd. and Ria Money transfer services Pvt. Ltd.

There is a specialized NRI cell for augmenting NRI Business, monitoring of complaints and Help Desk for NRI customers.

2. OVERSEAS BUSINESS

Overseas business of the Bank stood at Rs. 77,282 Crore as on 31^st March, 2024 registering YOY growth of 20.1 per cent. Bank has two international branches at DIFC Dubai & GIFT City Gandhinagar. Overseas branches are focusing on High Quality Medium/ Long term Assets to build a diversified loan portfolio with low Credit Risk Weight to improve profitability.

Both international branches of the Bank are offering External Commercial Borrowing (ECB), Foreign Currency Term Loan (FCTL) and Trade Finance Products to Indian and overseas customers.

a. Launch of new scheme for exporters: A new

export credit scheme-Export Express for MSME customers was launched with competetive rate of interest, service charges & exchange margin.

b. The Bank has also opened two Special Rupee Vostro Acount (SRVA) accounts.

c. Multicurrency World Travel Card: The product has a unique feature of multiple currencies loaded in a single card. Bank is offering the cards in 6 foreign currencies.

d. Trade Finance portal for Trade Finance Products: Exporter and Importer can submit online all types of trade finance request through the portal

e. Outward Remittance Facility for Resident Individuals through IBS & MBS: The Bank has launched Outward Remittance Facility for resident individuals for remitting funds under Liberalised Remittance Scheme (LRS) through Mobile Banking.

f. 50 branches have been identified as NRI service branches to increase our NRI portfolio.

1. Life Insurance: The Bank solicits Life Insurance Business under Corporate Agency Agreement with the following Life Insurance companies:

a. PNB MetLife India Insurance Co. Ltd (PMLI)

b. Life Insurance Corporation of India (LIC)

2. Non-Life Insurance: Bank solicits Non-Life Insurance Business under Corporate Agency Agreement with insurance companies such as The Oriental Insurance Co. Ltd. (OICL), Bajaj Allianz General Insurance Co. Ltd. (BAGIC), Cholamandalam MS General Insurance Co. Ltd. (CHOLA MS), Care Health Insurance Ltd. (CHIL) and Star Health & Allied Insurance Co. Ltd. (SHICL).

The Bank's commission income from insurance business (both life & non-life) stood at Rs.448 Crore during FY'2023-24.

3. Mutual Funds: Bank is a distributor of Mutual Fund products of the Asset Management Companies namely Sundaram Asset Management Company Limited, Nippon Life Asset Management Limited, UTI Asset Management Company Limited, Aditya Birla Sunlife Asset Management Company Limited, LIC Mutual Fund Asset Management Limited, DSP Investment Managers Private Limited and Franklin Templeton Asset Management (India) Private Limited.

Bank has also tie-up with M/s Finwizard Technology Private Limited (FISDOM) for providing online Mutual Fund investment and robo-advisory services to all its customer. FISDOM is providing commission to the bank on revenue sharing basis.

During FY2023-24, income of Rs.8.60 Crore was earned from Mutual Fund business with a YoY growth of 4.11 percent.

4. Depository Services: As a Depository Participant, Bank opened 18,334 Demat Accounts during FY 2023-24 against 15,314 in FY 2022-23 with a YoY growth of 19.72 per cent and 24,108 Online Trading Accounts in FY 2023-24 against 18,538 in FY 202223 with YoY growth of 30.05 per cent.

Income earned in FY 2023-24 from Depository services was Rs.7.08 Crore against Rs.6.26 Crore in FY 2022-23.

5. Application Supported by Blocked Amount (ASBA) & Merchant Banking: The Bank has license to act as Banker to Issue, Debenture Trustee and Merchant Banker. During FY 2023-24, 427 number of issues were handled as against 297 in FY 2022-23.

The amount blocked through ASBA was Rs. 45,716 Crore in FY 2023-24 against Rs 8,211 Crore in FY 2022-23.

6. Government Business Vertical Centers (GBV):

21 GBVs have sourced total new 7,300 Government Accounts; 84,488 new Savings Accounts out of which 10,301 Salary Accounts and 1,415 Rakshak Plus Accounts along with other Saving Accounts were mobilized during the FY 2023-24.

GBVs have also canvassed Retail Loans of Rs. 852 Crore and Loans & Advances to Govt. departments of Rs.25,361 Crore were sanctioned.

a. Insurance Business: The Bank launched product Raahat by Bajaj Allianz General Insurance Co. Ltd. which is a customized Personal Accident Policy for PNB customers for sum insured Rs.6.00 Lakh/Rs.4.00 Lakh with 9 annual preventive health check-ups and unlimited Tele-consultation are available at a premium of Rs.155/Rs.125.

b. Mutual Fund Business: During FY 202324, Bank has introduced online mutual fund investment and robo-advisory services for all its customers through PNB ONE and Internet Banking, in association with M/s Finwizard Technology Pvt Ltd (FISDOM).

c. Depository & ASBA Business-Discount brokerage: The Bank, in coordination with M/s SMC Global Securities Limited, has introduced discount brokerage facility, which is very popular in the present trading market. It offers Zero Brokerage for delivery and flat Rs.15 for Intraday trading.

i. Public Fund Management System (PFMS) Business: A separate scheme launched for Single Nodal Agency Accounts (SNA)/ Corporate Nodal Agency (CNA) accounts with customization to offer features catering to Government bodies and institutes. Some of these features include non-deduction of charges, sweep facility, MIS, and linking to PFMS External System.

ii. Defence Business: Defence Business Cell (DBC) is established for strengthening PNB's banking business with Indian Armed forces, Paramilitary and Police forces. During FY 2023-24, the Bank's business from Defence Vertical are as hereunder:

• Number of Defence salary/pension accounts under Bank's Rakshak plus scheme grew 6.33 per cent YoY.

• In real terms the value of business (Deposit+ Advance) under the Rakshak Plus (Salary/ Pension) grew by 28 percent YoY.

IX. GOVERNMENT BUSINESS

With a view to play a more proactive role in the transfer of funds from Centre and States to various beneficiaries, the Bank has an exclusive Government Business Division which is responsible for Pension, Processing & Disbursement, small savings schemes of the Government, Direct & Indirect Taxes Collections and Currency Chest Management. The Bank is also accredited banker to nine different Central government departments post amalgamation. These numbers will further rise. The Bank has been increasing tie-ups with various State governments to cater to their specific needs.

Key Initiatives taken up under Government Business are as under:

1. The Bank is disbursing pension of approximately 6.5 lakh pensioners i.e. Central Government, Defense, Railways, Telecom and State Government

2. More than 3 lakh pensioners availed the Digital Life certificate service to submit their Life certificate. This includes biometric authentication as well as face authentication.

3. TIN2.0: We are one of the first few banks to go live on the new TIN 2.0 platform of Central Board of Direct Taxes (CBDT) from 1^st December, 2022. Direct Taxes can be paid on the website https://eportal.incometax. gov.in through Internet Banking, Debit Card and Over the Counter (Cheque/DD/Cash)

4. The Bank is integrated with the new Central Board of Indirect Taxes and Customs (CBIC) e-payment platform - Electronic Cash Ledger (ECL) of Indian Customs Electronic Data Interchange Gateway (ICEGATE), through Internet Banking. It was made live on 1^st April, 2023.

5. Old Government Business Solution Software (GBSS) upgraded to new GBSS system. The new GBSS is robust enough to handle large volume of data for pension processing.

6. FASTAG: The Bank is providing FASTAG issuance service also to our customers through ONLINE mode and OFFLINE mode (through all branches)

7. National Pension System (NPS): All the Branches of the Bank are enabled for NPS transactions. Online facilities for NPS Registration and Contribution is also available through our website (https://www.pnbindia. in/nps.html) as well as PNB ONE App. Total number of NPS subscribers associated with the Bank as on 31^st March, 2024 is 1,16,825. The Bank provides NPS facilities to 27 corporates under Corporate Model.

8. Govt. e-Market Place (GeM): The Bank is providing the facilities of GPA (GeM Pool Account), e-PBG (Performance Bank Guarantee) & e-EMD (Earnest Money Deposit) on Government e-Marketplace to sellers and purchasers.

9. Public Financial Management System (PFMS):

The Bank has timely disbursed funds of approximately Rs.3893 Crore to about 1.94 Lakh beneficiaries under PM Kisan Samman Nidhi.

10. Through active marketing more than 64,635 PPF, 68,585 Sukanya Samriddhi Accounts and 91,677 Senior Citizen Saving Accounts were opened during FY 2023-24.

11. The Bank has implemented new scheme Mahila Samman Savings Certificate 2023 (MSSC 2023) and opened 5665 accounts as on 31st March, 2024.

12. The Bank is also in process of providing facility of Online Public Provident Fund (PPF) account opening.

13. The facility to deposit in SSA (Sukanya Samriddhi Account) and PPF (Public Provident Fund) through NEFT from other Bank third party account has been implemented.

14. Four Series of Sovereign Gold Bond subscription launched by Government of India were marketed by our branches and 1141 Kgs were sold.

15. The Bank is having integration with various states and collecting online and offline taxes through their Cyber Treasury Portal and collection of VAT is being done in 19 States.

16. The Bank is one of the major collectors of taxes for Central & State Government.

X. TREASURY OPERATIONS

The Bank's Gross Domestic Investments stood at Rs. 4,23,305 Crore as on 31^st March, 2024 registering YoY growth of 5.9% with trading profit at Rs.1,354 Crore.

1. Overview of System liquidity

System liquidity, on average, remained in surplus during first half of FY 2023-24. However, it subsequently turned deficit over the course of next three months and peaked in January 2024. The situation improved with the liquidity deficit moderating to some extent during February - March 2024. Reserve Bank of India remained agile in its liquidity management through main and fine-tuning operations in both repo and reverse repo throughout the year. Incremental Cash Reserve Ratio (I-CRR) was also introduced as a temporary measure to control excess liquidity in the system due to the return of ?2,000 notes.

2. Fixed Income (SLR/NSLR)

10 year benchmark yield sequentially glided downwards by 35 bps from 7.40 level as on 31^st March, 2023 to 7.05 level as on 31^st March, 2024. The softening was partly attributable to expectation of increased inflows over the next 12-18 months from inclusion of Govt. securities in JP Morgan Emerging Market Bond Index and Bloomberg Emerging Market Local Currency Index. In addition, easing inflation in the last quarter of FY 2023-24 fuelled market's expectation of Fed rate cuts, however, expectations have moderated from erstwhile six rate cuts in Calendar Year 2024 to utmost two on account of favourable data points despite elevated interest rate levels.

Reserve Bank of India also maintained the repo rate at 6.50% during FY 2023-24 after raising it by 250 basis points the previous year i.e. FY 2022-23. Smaller than expected domestic bond borrowing program for FY 2024-25 and pick up in foreign demand after bond index inclusion announcement also contributed to softening of yields.

3. Equity & Mutual Funds

FY 2023-24 proved to be a good year for equity markets. The buoyancy can be attributed to expectations of policy continuity, chances of interest rate cuts from the US Federal Reserve and RBI, foreign and domestic investment inflows as well as robust domestic economic expansion. The S&P BSE Sensex closed at 73,651.35, while the Nifty 50 closed at 22,326.90 on 31.03.2024. Over the past one year, the S&P BSE Sensex gained 24.9 per cent while the Nifty surged by 28.6 per cent.

4. Forex

The Indian Rupee ended FY 2023-24 at 83.40, registering a fall of 1.5 per cent against the US dollar as compared to 7.8 per cent decline in FY 2022-23.

The Indian Rupee fared better as compared to other emerging market currencies on account of record foreign portfolio inflows. The pair remained stable during the fiscal despite headwinds in the form of surging oil prices amid geo-political escalations.

XI. CUSTOMER CARE

The Bank fully realizes the importance of customer service and continues to lay utmost priority to render prompt and efficient service to customers. In order to achieve the desired objective, the Bank has formulated a robust Grievance Redressal Policy keeping in view the guidelines issued by Reserve Bank of India on Customer Service.

The Bank is ensuring the redressal of the grievances of customers within the framework laid down in the said policy.

1. The Bank has an on-line Grievance Redressal Management Portal called Centralized Grievance Redressal Monitoring System (CGRMS), which is an in-house portal. Through this system, the customer gets an immediate acknowledgement and can keep a track of the complaint also. Customer Grievances are received via various channels such as:

a. MD & CEO / Chairman/ Ministry of Finance/RBI etc.

b. Department of Public Grievance such as Centralised Public Grievance Redress and Monitoring Mechanism (CPGRAM)/ Integrated Grievance Redressal Mechanism (INGRAM)

c. Contact centers (Toll free/ Tolled numbers)

d. Internet Banking Service / Mobile Banking app / Corporate Website.

e. Email at care@pnb.co.in

f. Social Media such as Facebook, Twitter,LinkedIn and other social media platforms

g. Post

h. Complaints in Person at Branch Offices

2. The status of complaints received by the Bank is reviewed by "Customer Service Committee of the Board", a Sub-Committee of the Board, on quarterly basis.

MUM

3. The Bank has in place an Internal Ombudsman as per the recommendations of the Damodaran Committee. The system ensures greater transparency in the redressal of grievances by the Bank.

4. For faster resolution of complaints, the Bank has designated Chief Customer Executive Officer (CCEO) with the rank of Deputy General Manager at Zonal Offices and Chief Manager at Circle offices whom can be approached by the customers for redressal of his grievance. The contact details of CCEOs have also been displayed at Bank's website.

5. Customer Service Committees in all the branches and Circle Offices look into the quality of customer service rendered and critically examine the feedback/ suggestions for improvement in customer service. These committees meet once in a month where staff and the invited customers interact freely on service- related issues.

6. A monthly magazine "Customer Speaks" is published in which selected complaints filed by customers and the action taken/resolution provided to the complainants are also mentioned. Appreciation letters issued by customers appreciating the service of officials of the bank are also published in the magazine.

7. Theme Based Meetings are being conducted at monthly intervals in branches on a pre-decided date and theme to improve awareness among field staff about bank's products and services, and to sensitize them about the issues of maximum importance.

8. Regular training sessions are arranged at Call Centre for Customer Service Agents (CSAs) so that they can handle customer calls properly and resolve their trivial issues by giving correct/latest information that customer wants about the products/services.

9. The Bank has state-of-the-art Primary Contact Centers at Gurugram and Noida to provide telebanking services to its customers on 24 x 7 x 365 basis through two leading service providers. In addition to these two primary sites, the Bank has also established two Secondary Contact Centers at Dehradun and Bhopal to provide tele-banking services to its customers in 13 languages.

10. The customer's complaints are stored in two online portals i.e., CGRMS Portal and Contact Centre's Customer Relationship Management (CRM) Portal. The nature of complaints received at CGRMS Portal are largely Non Digital while in CRM Portal, they are largely Digital transaction related.

11. A total of 14,83,719 complaints were received during the FY 2023-24, out of which 3,53,524 complaints were resolved within T+1 days of its receipt. As such, these have not been treated as complaints. Therefore, the total number of reported complaints received during FY 2023-24 is 11,30,195. The details of complaints received and disposed during FY 2023-24 is as follows:

* Excluding complaints which were resolved within T+1 days of the receipt.

XII. IMPLEMENTATION OF OFFICIAL LANGUAGE

Punjab National Bank has always been a pioneer in the implementation of Official language Hindi. Your Bank continued to make concerted efforts to comply with the instructions received from Department of Official Language, Ministry of Home Affairs, Government of India, Committee of Parliament on Official Language and Department of Financial Services, Ministry of Finance. Your Bank has achieved most of the targets prescribed in annual programme for the Financial Year 2023-24 issued by Department of Official Language, Ministry of Home Affairs, Government of India.

It is the matter of pleasure to inform that during the financial year 2023-24 the Bank has been awarded the 1^st prize under the "Rajbhasha Kirti" award of the Government of India for "A" Region and 2^nd prize given for Bank's in-house magazine "PNB Pratibha". Five awards were received by various offices of the Bank from the Regional Implementation Office of the Ministry of Home Affairs. Further various offices/staff members of the Bank have won a large number of awards from various Govt. Institutes

1. Actions taken for and progress made in implementation of the Annual Program for Progressive Use of Hindi

a. The Bank has a well-organized mechanism for implementation of the Official Language, which is functioning well under the supervision of the Official Language Department established at the Head Office. Official Language Department is established in all the zonal offices, circle offices and training centres, which implement the official language policy duly approved by the Board of Directors of the Bank in their offices and subordinate offices and branches.

b. Intensive monitoring was done to achieve the targets prescribed in the Annual Programme of Department of Official Language, Ministry of Home Affairs. Official Language (OL) Policy of the Bank and Rajbhasha Corporate Action Plan are in place.

c. Awards were given to winner offices/employees under Lala Lajpat Rai Shield Scheme, other incentive schemes and Hindi competitions to increase the use of Hindi in the Bank.

d. The Bank's quarterly in-house magazine "PNB Pratibha" and half yearly Hindi magazines of Zonal Offices & other offices are published regularly. Hindi books were made available in Hindi libraries established at various level.

e. All India level Inter Bank Hindi Essay Competition was organized on the subject "Digital transformation of banking".

f. A total of 8 Hindi books were awarded by the Bank under the Original Hindi Book Writing Scheme (for working and retired staff) during the year 2023-24.

2. Official Language Committees and their meetings

a. The meetings of the Official Language Implementation Committee of the Head Office were held quarterly under the chairmanship of the Managing Director and Chief Executive Officer.

b. PNB has efficiently discharged the responsibility of convener of 28 Town Official Language Implementation Committees across the country. Half yearly meetings of these committees were organized regularly and Hindi competitions, Hindi workshops, Hindi seminars etc. were organized during the year.

c. Quarterly meetings of official language committees were organized regularly by all the offices of the Bank.

Conference

a. A three-day All India Official Language Conference and Review Meeting of the Official Language Officers of the Bank was organized in Delhi by the Head Office under the chairmanship of Executive Director Shri Binod Kumar and in the presence of Mrs. Anshuli Arya, IAS, Secretary, Department of Official Language, Ministry of Home Affairs, Government of India. Intensive monitoring of all offices was done through official language inspection and annual review meetings.

b. Rajbhasha Seminar was organized by the Head Office on the topic "Global Perspective of Official Language Hindi". Ms. Kumud Sharma, Vice President Sahitya Akademi and Head of the Department, Hindi Department, Delhi University was present as the chief speaker in the seminar.

c. Official language implementation was appreciated during the inspections of the Head Office by the Ministry of Finance, Department of Financial Services.

d. The work done in Hindi was appreciated by the Third Sub-Committee of the Parliamentary Official Language Committee during the inspections of Circle Office: Shimla, Circle Office: Thane, Circle Office: Jaipur, Circle Office: Rajkot and Circle Office: Panipat.

e. Rajbhasha inspection of Zonal Office, Agra, Circle Office, Bardhaman and Circle Office, Rohtak was done by the Draft and Evidence Subcommittee of the Parliamentary Official Language Committee.

f. Hindi Day and Hindi Month were celebrated enthusiastically in the Bank. Lala Lajpat Rai Shield was given to the winners by Managing Director and Chief Executive Officer and Executive Directors in the main official language function organized at Head office. Kavi Sammelan was organized and a captivating presentation was given by eminent poets Dr. Ashok Chakradhar and Ms. Madhumohini Upadhyay.

4. Progress made in the use of Hindi in InformationTechnology

a. The website of the Bank is completely bilingual and it opens in Hindi by default.

b. Facility of Hindi and regional languages are available in ATM.

c. SMS alerts have been sent to customers in their preferred language (Hindi and regional language).

d. Online Hindi reporting of all the Branches, Circles, Zones and Divisions of the Head Office was done on the 'Rajbhasha web portal'.

e. Bilingualization of Finacle and HRMS was done through Linguify software updated version. Along with it, Bilingual facility is available to work on all computers.

f. Mobile banking app 'PNB ONE' was implemented in the new revamped look in various regional languages including Hindi.

g. Internet Banking is available in Hindi as well as in regional languages.

h. A daily Hindi podcast is being released on Banking subject.

i. Online Hindi courses were introduced for the employees on the Bank's e-learning portal PNB Univ, on passing which the employees are given marks in PAF.

j. Hindi version of WhatsApp Banking is available for the customers.

5. Special work and programmes regarding the useof Hindi

a. The Bank, for the first time, organized a conference for the Heads of 28 Nagar Rajbhasha Karyanvayan Samiti (NARAKASES) in which our Bank is convener. This conference was successfully completed under the chairmanship of Managing Director and Chief Executive Officer of the Bank, Mr. Atul Kumar Goel and the dignified presence of Secretary, Mrs. Anshuli Arya, Ministry of Home Affairs.

b. A brief booklet of Official Language Policy 'Rajbhasha Path-Pradarshak' was published by the Bank, which was launched by Managing Director and Chief Executive Officer Mr. Atul Kumar Goel and Mrs. Anshuli Arya, (IAS) Secretary, Department of Official Language. This booklet was distributed to all the participants at the third All India Official Language Conference Pune organized by Department of Official Language, Ministry of Home Affairs, Government of India.

c. Rajbhasha module of Mobile app "PNB Pride" was launched to digitalize the official language implementation in the Bank.

d. Online module of Hindi knowledge roaster was added in HRMS and other modules including salary slip were made available in bilingual form.

e. Booklets to learn Hindi through regional languages Gujarati, Punjabi, Bengali, Assamese were published for employees.

f. Arrangements for training/workshop and translation: Hindi Training was imparted to staff members through Hindi workshops, Unicode Training and Desk Training by HO.ZO.CO and Training Centres.

6. Bilingual status of circulars/forms/otherdocuments

a. During the year, circulars issued by the divisions of the Head Office were uploaded on Bank's Portal in bilingual form

b. The forms used by customers are also available in Hindi/bilingual and regional languages.

c. To facilitate the work in Hindi, "Standard Draft" of daily letters/office notes related to various departments is available on the e-portal of the Bank.

d. Hindi and regional languages were used in publicity and promotional campaigns related to the Bank's schemes and products.

1. DOMESTIC SUBSIDIARIES

a. PNB Gilts Ltd.: FY 2023-24 started with the bond markets witnessing gains, reflecting strong demand for government securities on expectation of a likely shift of stance after the Monetary Policy Committee's (MPC) largely unanticipated move to pause on the policy repo rate. The decline in the US treasury yields also supported the market sentiments. However, yields hardened during the end of the first quarter following MPC's focus on aligning inflation with the target of 4 per cent, which was perceived to be hawkish by the market participants. Domestic bond yields started the second quarter with a hardening bias in response to rising US treasury yields and a strong US GDP data. Towards the end of the second quarter, higher inflation prints and strong economic data led to firming of domestic yields. Third quarter also saw a hardening bias in response to rising US treasury yields, with the domestic 10-yr yield peaking at 7.38 per cent as on 23^rd October, 2023. Towards the end of the third quarter, US yields plunged on the back of dovish tone of the Fed Reserve in its December policy meet and expectation of rate cuts in the coming year. Q4 FY 2023-24 marked some significant moves in both domestic and global bond markets. The 10-year US treasury yields hovered in the range of 4.18 per cent to 4.32 per cent during the quarter, ending the quarter at 4.19 per cent. The swing in yields was broadly in response to the Federal Open Market Committee (FOMC) keeping the policy rates unchanged, thus reinforcing the bets of no further rate hikes by the Fed and a rise in the odds of a rate cut by the Fed in March 2024. On the other hand, the Indian 10-year benchmark bond yields eased from 7.21 per cent to 7.14 percent during January end as Bloomberg Index Services proposed including some Indian bonds in its emerging market local currency index from September 2024 and saw another sharp drop in yields to 7.06 per cent following the announcement of the Interim Budget on 1^st February, 2024. Indian bond yields were range bound for most of March, ending the quarter (Q4) at 7.05 per cent.

During the year, the 10-yr benchmark yield touched a high and low of 7.38 per cent and 6.96 per cent respectively and closed at 7.05 per cent as on 31^st March, 2024. Against the backdrop of uncertain market conditions, PNB Gilts Ltd continued to fulfill all its obligations as a Primary Dealer mandated by RBI both in Primary and

Secondary market. Company posted a Profit Before Tax (PBT) of Rs. 99 Crore during FY 2023-24 vis-a-vis PBT of Rs. (85) Crore during FY 2022-23. Profit after Tax (PAT) amounted to Rs. 69 Crore during FY 2023-24 as against Rs. (77) Crore during FY 2022-23. Capital adequacy remains strong with its Capital to Risk Weighted Assets Ratio (CRAR) at 34.0 per cent as on 31^st March, 2024 well above the regulatory minimum of 15 per cent for Primary Dealers (PDs).

b. PNB Investment Services Limited (PNBISL):

The Company is a profit-making company from the very first year of its operations. During the year ended as on 31^st March, 2024, the Company registered operational (fee-based) income of Rs.8 Crore and total income of Rs.11 Crore as against a fee- based income of Rs.7 Crore and total income of Rs.10 Crore for the year ended as on 31^st March, 2023. Profit before Tax during the period ended as on 31^st March, 2024 was Rs.5.50 Crore as against Rs.5 Crore for the period ended as on 31^st March, 2023.

The Company operates in three verticals, namely Corporate Advisory, Merchant Banking and Security Trustee. In the Corporate Advisory Vertical, during the year PNBISL advised many marquees business groups and corporate clients on various transactions, including debt syndication, debt resolution and other corporate advisory assignments. With in-house expertise and deep understanding of select sectors, PNBISL prepared and delivered credible Techno-Economic Viability (TEV) & Lenders Independent Engineer services (LIE) reports to its clients.

In Corporate Advisory Vertical, during the FY2023- 24, the company able to complete majorly two Debt Syndication assignments. Company has also completed approx. 20 assignments of U P State Industrial Development Authorities (UPSIDA). Company is now part of Mahatma Phule Renewable Energy and Infrastructure Technology Ltd (MAHAPREIT) Alternative Investment Fund (AIF) promoted by Government of Maharashtra. FY 2023-24 was a significant year for the Debt Resolution (Swiss Challenge) practice of the Company and the Company undertook and completed 8 significant Debt Resolution leading v/s 3 such transactions done in the whole of FY 2022-23. Now with the credentials already being in place company believes the business will only increase in FY

2024- 25.

In Merchant Banking Vertical, during the FY 2023-24, company able to showcase its strengths to the markets in the form of timely filing of documents to regulatory authorities in nearly all the Equity Capital Market (ECM) product verticals i.e., Initial Public Offers (IPOs), Rights Issue and Open Offer assignments.

The Company successfully completed the IPO mandate of Pyramid Technoplast Ltd, raising Rs.153 Crore with the issue being oversubscribed. Apart from this IPO Assignment, the company also completed two other assignments i.e., a small rights issue and open offer assignment.

The growth for trusteeship segment in FY 2023-24 was stagnant and the revenue took a significant hit in the financial year owing to various reasons including the reduction in the overall market pricing of the security trustee assignments, increase in competition.

However, the segment has tried to overcome the challenge by expanding the range of products offered as per the market trends by rendering the services of escrow trustee for one of the major NBFCs. The Company continues to add on new clients and build on its strategy to be a trusted partner of leading banks and corporates.

Going forward, the company is committed to build on its capabilities across business verticals such as credit appraisal & debt syndication services, TEV consultancy, Merchant Banking services and Security Trusteeship services to offer greater value to the parent bank and all its stake holders.

c. PNB Cards and Services Limited (PNBCSL):

PNBCSL is a wholly-owned subsidiary of Punjab National Bank (PNB) incorporated on 16^th March, 2021 in terms of RBI approval letter dated 7th December, 2020 to undertake the non-financial support services related to credit card business of the Punjab National Bank. RBI vide letter dated 13^th January, 2023, has conveyed their approval to PNB for undertaking additional non-financial support services by PNBCSL. As per their approval, PNBCSL may provide the following non-financial support services viz. sourcing, marketing, promoting, publicizing, advertising, soliciting distributing Deposit (Current and Saving Accounts etc.) and Retail Loan Products (Housing Loan, Loan against property, Vehicle Loan, Education loan, Personal loan etc.).

Accordingly, to Leverage its existing infrastructure and expertise, PNBCSL has successfully commenced sourcing for Housing Loans, Vehicle Loans, Education Loans, and CASA products in FY 2023-24.

PNBCSL's geographic footprint grew significantly having 7 Territory offices with a presence in over 50 locations nationwide. This expansion is supported by a team exceeding 400 personnel dedicated to delivering exceptional service to the customers.

PNBCSL played a pivotal role in acquiring customers for the Bank. During FY 2023-24, the Company has served to more than 2.15 Lakh customers, surpassing the 2 Lakh credit card approvals and clocked fresh sanctions of more than Rs.500 Crore in Retail segment.

PNBCSL maintained its profitability trajectory, achieving a net profit after tax of Rs.2.25 Crore for FY 2023-24, demonstrating its continued contribution to the Bank's success.

PNBCSL remains committed to offering high- quality services and expanding its reach to serve a broader customer base.

a. PNB International Limited (PNBIL): Punjab National Bank (International) Limited was incorporated in the UK on 13^th April, 2006 and registered with the Companies House in England & Wales. The Bank is authorized by the Prudential Regulation Authority ('PRA') and regulated by Financial Conduct Authority ('FCA') to conduct banking Business in UK.

The total deposits increased from Rs. 6,644 Crore as on 31^st March, 2023 to Rs. 6,664 Crore as on 31^st March, 2024, showing YoY growth of 0.30 per cent. Total advance increased from Rs. 7,572 Crore as on 31^st March, 2023 to Rs. 7,726 Crore as on 31^st March 2024, showing YoY growth of 2.0 per cent. In the FY 2023-24, PNBIL recorded a Net Profit of Rs. 90.42 Crore as per Indian Generally Accepted Accounting Principles (IGAAP) and Rs.52.46 Crore as per International Financial Reporting Standards (IFRS).

PNBIL's main business is to provide commercial and retail banking services to different segments of customers, with a focus on the Indian community within the UK. This includes accepting deposits from both retail and corporate clients; lending to retail, SME, and corporate clients; and transaction banking services such as currency remittances. The deposit products primarily include current, savings, term deposits and Individual Saving Accounts. Some of these products such as ISAs (Individual Savings Accounts) and Fixed deposits are also being availed by a wider audience in the UK. The lending products includes real estate lending i.e., Buy to Let- Residential, Commercial, Development Loans and Hotels & Hospitalities, lending to SME and Term loans backed by SBLCs.

b. Druk PNB Bank Ltd (DPNBL): Druk PNB Bank Ltd, Bhutan, Banking Company having its corporate office at Thimphu, Bhutan. It started its operation on 27^th January, 2010, in Bhutan as the country's fourth commercial Bank, with a component of both FDI and joint venture in the Banking Sector. Presently, the Bank has 9 branches and 30 ATMs spread across the country.

Total advances of DPNBL increased from Rs.1,706 Crore as on 31^st March, 2023 to Rs.1,914 Crore as on 31^st March, 2024 i.e. YoY increase of 12.2 per cent.

Total deposits of DPNBL increased from Rs. 2,459 Crore as on 31^st March, 2023 to Rs. 2,590 Crore as on 31^st March, 2024 i.e. YoY increase of 5.3 per cent.

Profit of the Bank has increased to Rs.49 Crore as on 31^st March, 2024 from Rs.33 Crore as on 31^st March 2023. Paid up capital of the Bank as on 31^st March, 2024 is Rs.168 Crore increased from Rs. 84 Crore as on 31^st March 2023 after rights issue in July 2023

3. REGIONAL RURAL BANKS (RRBs): As on 31^st March, 2024, there are nine RRBs sponsored by the bank namely Dakshin Bihar Gramin Bank (DBGB), Patna; Sarva Haryana Gramin Bank (SHGB), Rohtak; Himachal Pradesh Gramin Bank (HPGB); Mandi; Punjab Gramin Bank (PGB), Kapurthala; Prathama UP Gramin Bank (PUPGB), Moradabad; Assam Gramin Vikas Bank (AGVB), Guwahati; Bangiya Gramin Vikas Bank (BGVB), Berhampore; Tripura Gramin Bank (TGB), Agartala and Manipur Rural Bank (MRB), Imphal. These nine RRBs are operating in 9 states namely Bihar, Haryana, Himachal Pradesh, Punjab, Uttar Pradesh, West Bengal,

Assam, Manipur and Tripura covering 185districts with a network of 4671 branches.

a. Total Business of sponsored RRBs as on 31^st March, 2024 is Rs. 2,23,646 Crore registering a YoY growth of 9.2 per cent.

b. Deposits of RRBs are at Rs. 1,41,131 Crore as on 31^st March, 2024. Aggregate Deposits registered a YoY growth of 8.3 per cent.

c. The Advances of the RRBs as on 31^st March, 2024 stood at Rs. 82,515 Crore with a YoY growth of 10.7 per cent.

d. As per RBI guidelines it is mandatory for RRBs to meet the regulatory requirement of CRAR of 9 per cent. The RRBs attaining CRAR over and above the regulatory requirement are TGB (24.35 per cent), PGB (16.47 per cent), SHGB (14.87 per cent), PUPGB (13.32 per cent), BGVB (12.48 per cent) and MRB (10.73 per cent). The RRBs having CRAR less than the regulatory requirement are DBGB (2.44 per cent), HPGB (8.16 per cent) and AGVB (8.70 per cent). As an outcome of operational efficiency of 2 RRBs are expected to achieve CRAR of 9 per cent in the next financial year, however more time is needed for DBGB. The recapitalization assistance by Centre/ State will help in improving CRAR.

e. The sponsored RRBs are in profit (except MRB Imphal). Operating profit of RRBs as a whole stood at Rs.2648 Crore as on 31^st March, 2024.

f. The RRBs have cumulatively disbursed Rs. 2760 Crore under PMMY/ MUDRA as on 31^st March, 2024, achieving 70.77% of targeted budget of Rs 3900 Crores for disbursement.

XIV. AWARDS AND ACCOLADES

The Bank's efforts have been recognized at various platforms. The Bank has been conferred with the following for initiatives taken in various fields for FY 2023-24:

1. Awards Certificate for Treasury Strategist of the Year for leadership and contribution to the Treasury Management by Treasury Summit & Awards 2024 by India Treasury Summit & Awards

2. Overall 3^rd Rank under EASE Reforms 5.0 with 1^st Runners Up in the themes such as Digital Enabled Customer Offerings and Big Data & Analytics.

3. 9^th Innovative CIOs Awards & Symposium 2024 for 2 projects such as e-BG and PNB Aarambh by CIO Axis.

4. Best MSME Bank in 10^th MSME Excellence Awards 2024 by ASSOCHAM

5. Award for "Best Data Quality in Commercial Bureau Segment" for 2023-24 during the Annual Conference of General Managers of PSBs organized by IBA & TransUnion (TU) CIBIL in Mumbai.

6. Data Excellence Award in Consumer Bureau segment by CRIF Highmark during CRIF InFocus Seminar.

7. Best MSME Friendly Bank by Chamber of Indian MSME (CIMSME).

8. At the 19^th Annual Banking Technology Conference, Expo and Awards 2023 Runner-up award for the Best Fintech and DPI Adoption by Indian Banks' Association (IBA).

9. Excellence in Gender Inclusion Award by Jury of International Inclusion Alliance.

10. SCOPE Meritorious Award for innovative Practices in Women Empowerment 2016-17-Commendation Certificate.

11. Warehousing Development and Regulatory Authority has been felicitated for attaining Second position in the category of Public Sector Banks with Highest Pledge Finance.

12. Recognition for Excellence in Customer Service

at Index of Service Excellence of India (iSEI) Event 2023. Jagdish Sheth School of Management (JAGSoM) has introduced this index.

13. IBSi Global Fintech Innovation Awards under following 2 categories:

a. Best Digital Channel/Platform Implementation: Best Adopted Tools & Practices for the PNB ONE-Super App Initiative.

b. Best Transaction Banking Implementation.

14. 23^rd Greentech Environment Award 2023" for outstanding achievements in "Environmental Excellence" category.

15. 'Green Ribbon Champions' award under the category- 'CSR Green Initiative of the Year' for planting more than 1 lakh trees under the project PNB Palaash.

16. Rajbhasha Kirti First Prize FY 2022-23 at the Hindi Diwas Celebrations held during Third All India Official Language Conference 2023. Rajbhasha Kirti Secondprize for the FY 2022-23 for their in-house magazine PNB Pratibha.

17. Infosys Finacle Innovation Awards 2023 in Finacle India Banking Connect 2023

a. Maximizing Customer Engagement - Platinum winner-PNB One - Super App.

b. Channel Innovation - Gold winner-e-OTS.

18. APY National Championship and Annual Target Achievement Award.

XV. FUTURE BUSINESS PLAN OF THE BANK

As the Bank embarks on new journey in the Financial Year 2024-25, it will continue to soar higher and achieve better than before. The Bank will remain focused on business growth by way of small ticket advances and enhancing CASA portfolio.

Growth and Profitability will continue to drive our approach. The Bank will cater to a wider range of financial needs by expanding its product portfolio, exploring newer markets and customer segments, and optimizing operational efficiency.

The Bank will accelerate its digital journey offering seamless online and mobile banking experience. PNB will ensure to utilize AI-powered tools for providing personalized financial solutions to all the customers.

Customer Centricity will be one of the key areas where Bank will pay more attention. Through substantial efforts, PNB will continue to exceed customer expectations by way of offering innovating products and services, investing in employee training and strengthening internal processes.

The Bank will continue to provide adequate attention to overall growth and development of all its employees by investing in training and grooming its people. PNB UDAAN project has been intended to deliver the outcomes by way of self-driven employees of the Bank.

FY 2024-25 promises to be a year of exciting growth and transformation. By focusing on these areas, the Bank will solidify its position in the industry as a leading financial institution.

XVI. BOARD OF DIRECTORS

1. Shri Anil Kumar Misra, RBI Nominee Director, ceased to be director w.e.f. 14.07.2023.

2. Smt. Uma Sankar has been appointed as RBI Nominee Director of the Bank w.e.f. 14.07.2023.

3. Shri Vijay Dube, Executive Director, completed his tenure on 31.08.2023.

4. Shri Gautam Guha, Shareholder Director, completed his tenure on 05.10.2023.

5. Shri Jatinder Singh Bajaj, Shareholder Director, has been elected as Shareholder Director of the Bank w.e.f. 06.10.2023.

6. Shri Bibhu Prasad Mahapatra has been appointed as Executive Director of the Bank w.e.f. 09.10.2023.

XVII. SECRETARIAL AUDIT REPORT

The Secretarial Auditor in the Reports has made observations in respect of (i) vacancies of Workmen Employee Director, Officer Employee Director, CA Director and one Part-Time Non-Official Director on the Board of the Bank and (ii) non-compliance of Securities & Exchange Board of India (SEBI) Listing Obligations & Disclosure Requirements (LODR) Regulations with respect to composition of the Audit Committee of the Board for the period 01.04.2023 to 18.07.2023. However, with effect from 19.07.2023, the composition of the Audit Committee of the Board is in compliance of SEBI (LODR) Regulations, 2015.

XVIII. DIRECTORS' RESPONSIBILITY STATEMENT

The Directors confirm that in the preparation of the annual accounts for the year ended 31^st March, 2024:

1. The applicable Accounting Standards have been followed along with proper explanation relating to material departures, if any;

2. The accounting policies, framed in accordance with the guidelines of the Reserve Bank of India, were consistently applied;

3. Reasonable and prudent judgment and estimates were made so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit of the Bank for the year ended 31^st March, 2024.

4. Proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of applicable laws governing banks in India, and;

5. The accounts have been prepared based on the principle of "going concern".

XIX. ACKNOWLEDGEMENT

The Board of Directors thank the shareholders, valued customers, well-wishers and other stakeholders for their goodwill, patronage and support.

The Board acknowledges with gratitude for the guidance and support of Government of India, Reserve Bank of India, Securities & Exchange Board of India, Insurance

Regulatory and Development Authority of India, Central Vigilance Commission, Stock Exchanges and Statutory Central Auditors of the Bank, in the functioning of the Bank.

The Board also placed on record its appreciation for the valuable contribution made by the members of the Bank's staff at all levels and looks forward to their continued involvement in achieving the future goals.

Atul Kumar Goel

Managing Director & CEO