Driven to Transform Fueled by Ambition - PNB Housing Finance Limited
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Fueled by Ambition
Driven to Transform
26th Annual Report 2013-14
PNB Housing Finance Limited
Now taking a home loan is
Contents
Doing More,
03 Logic Behind New Logo 18 Doing it Differently 52 Auditors’ Report
Transforming with Information
04 Board of Directors 22 Technology 56 Balance Sheet
Transforming Dreams, Transforming the
06 Fueling Realty 26 Financial Landscape 57 Profit and Loss Statement
Fueled by Ambition,
08 Driven to Transform 28 Leadership Team 58 Cash Flow Statement
Management Discussion &
10 Awards and Recognition 29 Analysis 60 Notes to Financial Statements
From the Chairman’s
12 Desk 42 Directors’ Report 89 Events
From the Managing
14 Director’s Desk
50 Comments of C & AG 92 Our Network
01
Corporate
Information
Directors Bankers & Financial
K R Kamath Institutions
Chairman Bank of Baroda
Tejinder Singh Laschar Central Bank of India
G N Bajpai Dena Bank
P K Gupta HDFC Bank Limited
S K Jain HUDCO
S S Bhatia ICICI Bank Limited
Vivek Vig Punjab National Bank
Anand Dorairaj State Bank of India
Sanjaya Gupta Union Bank of India
Managing Director
United Bank of India
Auditors Vijaya Bank
B R Maheshwari & Co.
M-118 Connaught Circus, Registered and
New Delhi - 110 001 Central Support Office
9th Floor, Antriksh Bhawan,
Legal advisors
22, K G Marg
Vaish Associates, Advocates New Delhi - 110 001
Company Secretary
Sanjay Jain
Annual Report 2013-14
02
PNB Housing
Finance Limited
logic behind new logo
Old Logo The old logo of PNB Housing Finance Limited (PNB HFL) faced the unique challenge of
having too much in too little a space. PNB Housing Finance Limited, written out in one
straight line, was not easy to read. A challenge that became particularly severe when one
looked at the logo from a distance. As a direct consequence, the brand message of it being
a housing finance company was getting lost at first glance. This caused a problem as the
Company was poised to make its presence felt in the market and every opportunity had to
be taken to popularize the name – PNB Housing Finance Limited; logo being a vital element
in every marketing communication.
New Logo
To provide a solution to this communication challenge, minor
changes were incorporated into the framework of the existing
logo. These changes ensured better visibility and message
delivery without a total overhaul of the original design.
Maroon and yellow color band at the bottom, emphatically flag off the parentage, which
is PNB. This alone ensures a positive rub-off on our emerging brand; after all the logo
announces the pedigree loud and clear – a pedigree that has come to be trusted across all
spheres of banking and financial services.
PNB Housing is written across the maroon band to the right of the emblem. The available
space allows PNB Housing to be seen clearly, immediately registering the name as a housing
finance company.
The new logo, hence, is ready to enhance this message and visibility in every marketing
communication.
03
Fueled by Ambition, Management
Driven to Transform Discussion & Analysis Statutory Reports Financial Statements
Board
of Directors
Shri Tejinder Singh Laschar
He joined the Indian Economic Services in 1973
and superannuated as Senior Economic Advisor.
He has also held prestigious positions such as
Economic Advisor to the Ministry of Chemicals
and Fertilizers; Member Secretary of the
Working Group on Fertilizers, 10th Five Year Plan;
Additional Economic Advisor, Ministry of Finance
and Director, Ministry of Home Affairs and
Banking Division of the Ministry of Finance.
Shri Ghyanendra Nath Bajpai
He was the Chairman of Life Insurance
He is the Chairman of the Audit Committee and Corporation of India (LIC) and the Chairman of
member of Business Process Committee of the Securities and Exchange Board of India (SEBI).
Board of PNB HFL.
Currently, he is on the Board of many prominent
companies in the capacity of Chairman/
Non-Executive Independent Director. He is
Shri K R Kamath also the Chairman of the National Pension
Chairman of the Board Trust and has written three books. He received
Currently, CMD of Punjab National Bank “Outstanding contribution to the development of
finance” award from Prime Minister of India.
He is a brilliant academician and a banker of
repute. He started his career with Corporation
He is the Chairman of the Marketing Committee
Bank in 1977. At Corporation Bank, he had held
of the Board of PNB HFL.
various senior level positions.
He was appointed as Executive Director of Bank
of India on May 19th, 2006. He became the
Chairman and Managing Director of Allahabad
Bank on August 2nd, 2008. He was appointed as
the Chairman and Managing Director of Punjab
National Bank in November 2009.
He is the Chairman of the Board of PNB HFL. Shri P K Gupta
He started his career with PNB in 1971 and
became General Manager. He was elevated as the
Executive Director of Corporation Bank in 2001.
He became the Chairman & Managing Director of
National Housing Bank in 2004 and the Chairman
& Managing Director of United Bank of India in
2005. He has also held the position of Managing
Director of PNB Capital Services Ltd.
He is member of Audit Committee and
Appointments Committee of the Board
of PNB HFL.
Annual Report 2013-14
04
Shri Anand Dorairaj
He is a Chartered Accountant from the Institute
of Chartered Accountants of India (ICAI). He has
worked with Citigroup International in New York.
After gaining experience as a senior emerging
Shri S K Jain markets specialist with extensive hands on
exposure in mergers and acquisitions, he joined
He is an MBA from Indiana University, USA
New Silk Route Advisors in February 2007 and
(Dean’s List) and a Fulbright scholar. He worked at
focused on private equity opportunities in the
Citibank for 30 years in various capacities in India
Indian sub-continent.
and abroad. He was Senior Credit Officer in Hong
Kong, Taiwan, Philippines, Thailand and Canada
He is a member of the Audit Committee and
with Citibank before retiring in 2001.
Appointments Committee of the Board of
PNB HFL. Shri Sanjaya Gupta, MD
He is currently the Chairman of the Credit
Committee of the Board of PNB HFL. He holds a post graduate degree in Business
Management. He is also a Fellow of the Royal
Institution of Chartered Surveyors.
Throughout his career, which spans over
27 years, he has significantly contributed to
mortgages and allied risk management products
across geographies. He holds the distinction
of establishing Indian mortgage industry’s first
international housing finance branch operations
for HDFC Ltd. He is often consulted by policy
makers on key changes in the sector.
He is an ADB nominated Director on the Board of
HDFC Plc., Maldives and an independent Director
of India Shelter Finance Corporation Ltd., where
he also heads the Audit Committee of the Board.
Shri S S Bhatia
He joined PNB as a Management Trainee in He was appointed Managing Director of the
1977. During his 37-year career with PNB, he Company in June 2010.
Shri Vivek Vig has handled many important assignments.
He is a post graduate from Indian Institute of He has headed large branches, been SRM and
Management (Bangalore). He joined Citibank in later on DGM, Amritsar, DGM (Stressed Assets
1986 and has performed several roles at Citibank, Management Division), Circle Head (Meerut),
including Country Head (Consumer) of Turkey and Field General Manager (Ludhiana) and now
Saudi Arabia. After Citibank, he joined Centurion General Manager, RAD and MSME, HO.
Bank of Punjab in 2004, as Country Head (Retail
Bank). He is now associated with Destimoney He is a member of the Credit Committee and
Group of Companies in the capacity of Managing Marketing Committee of the Board of PNB HFL.
Director & Group CEO.
He is a member of the Credit Committee and
Business Process Committee of the Board
of PNB HFL.
05
Fueled by Ambition, Management
Driven to Transform Discussion & Analysis Statutory Reports Financial Statements
Transforming
Dreams,
Fueling Realty
A dream is a boundless desire, without
necessarily being affordable. For
millions of Indians, owning a home
is a distant reality, rooted in such a
desire. Being the most capital intensive
purchase of their lives, buying a
home is not always realizable, thus
easy access to funding is essential to
transform this dream into reality.
Annual Report 2013-14
06
PNB Housing Finance Limited enables people to realize their dream of owning a home by
providing competitive and easily accessible home loans.
PNB HFL provides home loans (for home purchase, extension, construction, buying a
residential plot of land or home improvement) and non-home loans (loans for commercial
property, loan against property, lease rental discounting and loans to real estate developers).
PNB HFL also offers Public Deposits of different maturities and various interest payment
options for those who have surplus savings to invest in highly rated instruments.
Amongst India’s top five lenders in the housing finance segment,
PNB Housing Finance Limited is driven by its ethos of putting
people first, being customer-centric and operating to the highest
ethical standards.
PNB Housing Finance Limited -
A Self Portrait
We are a subsidiary of one of India’s largest
banks - Punjab National Bank, which
owns 72.6% of the Company’s equity.
Loan book has expanded to
The remaining equity capital is held by
Destimoney Enterprises Private Limited. `10,591 crores during FY 2014,
from `6,619 crores in the
We enjoy high credit ratings - CRISIL previous year.
FAAA with stable outlook for fixed
deposits, CRISIL AA+ with stable outlook
for bank borrowings, CRISIL AA+, CARE Profit After Tax stands at
AA+ and ICRA AA+ for non convertible
debentures (NCDs) and CRISIL A1+ for
`127.44 crores during FY 2014,
commercial papers. from `91.5 crores in the previous year.
Gross non-performing assets (NPAs) are
0.32 % and
at a low of
Net NPAs stand at 0.16 % of loans
outstanding as on March 31st, 2014.
07
Fueled by Ambition, Management
Driven to Transform Discussion & Analysis Statutory Reports Financial Statements
Fueled by Ambition,
Driven to Transform
Annual Report 2013-14
08PNB HFL is driven by an
ambition to be the most
admired housing finance
company in the country,
It is a transformation rooted in excellence and driven by our
not merely in terms of ambition to reach the highest rank in the housing finance sector.
numbers but also for its
quality of service and
strong relationships.
We are in midst of a
comprehensive business
transformation, which will
have a long-term bearing
on our business model.
The technology we use
and the systems that drive
our business accessibility
will be made easier for
prospective customers. The
transformation journey is
steered thoroughly by a well
designed business process
re-engineering (BPR)
program, which is aimed
at amalgamating solidity,
stability and transparency of
the traditional public sector
with nimble responsiveness
of the contemporary private
sector, delivering a robust
and agile corporate entity.
09Fueled by Ambition, Management
Driven to Transform Discussion & Analysis Statutory Reports Financial Statements
Awards are the
Rewards of a Process of
Transformation
In the journey of excellence,
the only entity we compete
against is ourselves. Our
best performance becomes
the benchmark that we try
to better every day. Being
incrementally superior
becomes a way of life, a
way to transform oneself,
and we believe that if
something is worth doing,
it is worth doing well. This
way of looking at business,
as an endeavor to excel in
all that we do, has been
rewarding in more ways
than one. We are the proud
recipient of many awards
from the industry, and each
of these encourages us to
do better every time.
Annual Report 2013-14
10Awards during FY 2014
Organization change story awarded in the category
of ‘Special Commendation Award’ by Best Change
Interventions from Asia Seminar and Study Awards
2013 - organizations successfully designing, executing
and managing change.
Acknowledged by HUDCO for ‘Significant Contribution
to Housing for the FY 2013-14’.
Change management story got published in
‘Switch’, amongst twelve best change management
stories of India.
Awarded by Franchisee India as the
‘Fastest Growing HFC’.
While the transformation is still ongoing, these
awards are milestones that underline our steadfast
progress towards our ultimate goal of excellence -
‘The most admired housing finance company in
the country’.
11Fueled by Ambition, Management
Driven to Transform Discussion & Analysis Statutory Reports Financial Statements
From the
Chairman’s Desk
Our objective is to take this
Company amongst the top 3 HFCs
in a few years’ time. The Company
has drawn up an ambitious business
plan for itself for the next 4 years
Dear Stakeholders,
I am happy to present to you the 26th
Annual Report of your Company. I hope you
will enjoy going through the contents.
I congratulate all the stakeholders on the
momentous occasion of the Company
successfully completing 25 years of its
purposeful existence on November 11th,
2013. This is an opportune time to look
back at PNB HFL, which is one of the fastest
growing subsidiaries of Punjab National
Bank (PNB).
PNB incorporated PNB HFL in 1988, like
many other public sector banks and
insurance companies, when the Indian
Parliament notified the National Housing
Bank Act. Our main objective was that the
Company should efficiently deliver housing
loans to the Indian public at large and
Annual Report 2013-14
12create a niche place for itself in the housing provided limited growth opportunities. The Company has professional and
finance company (HFC) domain. As we During these testing times, the Company experienced manpower drawn from the
went along, it was felt that in order to take recorded a growth of 60% in loans industry, robust policies, seamless system
optimum advantage of a growing market outstanding, 69% in deposits and 39% in solution, secure and convenient sales and
for home loans, the Company needs to be profit after tax. While the industry struggled service branches across the country, solid
professionally driven and given operational to contain NPAs, the Company continued to and trustworthy brand image of the parent
independence. Moreover, in order to attain maintain very high quality of loan portfolio. PNB, gives us the confidence that
leadership position, the Company should The Company has also delivered benchmark PNB HFL is certainly poised to reach greater
have its own cadre of contemporary and standards of customer service and a door- heights in the times to come.
sound human capital, robust operating step delivery model for customer ease and
model, market aligned products & policies convenience. The year ahead has many challenges and
and an effective delivery model. opportunities. The Company is operationally
Our objective is to take this Company ready to meet these challenges and seize
Hence, in September 2008, PNB floated a amongst the top 3 HFCs in a few years’ the opportunities. I am sure that FY 2015
global tender for disinvestment of its stake time. The Company has drawn up an will be another year of excellent growth
in the Company and brought in a private ambitious business plan for itself for the and the Company will be able to once again
equity partner in December 2009. The next 4 years. Complementing the surpass your expectations.
disinvestment was followed by a detailed growth plans of the Company, the Board of
business process re-engineering (BPR) Directors has approved infusion of In the end, I take this opportunity to
program, christened as ‘Project Kshitij’, ` 1,000 crores by way of equity capital thank our shareholders, my colleagues
which was operationalized in July 2010. during the coming two to three years. on the Board who have been valuable
It gives me immense satisfaction that the This will allow the management of the guide in steering PNB HFL to new heights
thought process behind restructuring and Company to focus on quality growth and and the customers who have patronized
re-defining our strategies for the Company’s improving profitability indicators. I am sure the brand PNB HFL to make it the fastest
future is on course to achieve all the specific in the coming years the Company will not growing HFC in the country. A word of
objectives with which we had started this only grow in size but will also be one of the appreciation for the members of the staff
journey of BPR. The same has also been most admired HFCs in the country. of PNB HFL who have wholeheartedly
corroborated by business growth, one of participated in this journey of Business
the industry best asset quality and healthy The Company has customized its lending Process Re-engineering – without their
profitability figures. In a short span of four products and is offering wide range of fixed selfless, dedicated and smart working we
years, the Company has now edged up to and floating rate of interest products, which would not have attained these heights
5th position amongst HFCs with a loan book suit prospective home buyers and insulate of excellence. I also thank our regulator,
of over ` 10,000 crores and profit of over them from macro-economic volatilities. The the National Housing Bank, for their
` 125 crores, while maintaining excellent Company is now developing state-of-the-art continuous and timely guidance.
asset quality with just 0.32% gross NPAs and enterprise system solution, which will not
1.10% total delinquencies. only support the Company’s loan origination
and underwriting but would also enhance Yours sincerely,
Last year was an eventful and challenging customer service and customer interface.
year in terms of slow macro-economic Being in the service industry, our objective
growth, persistent high inflation and high is to provide best-in-class service to the
rate of interest, particularly from July 2013 existing 83,000 loan and deposit customers
onwards. The country recorded moderate and simultaneously grow the customer base
GDP growth of 4.7% for the year, which many times more. K R Kamath
13Fueled by Ambition, Management
Driven to Transform Discussion & Analysis Statutory Reports Financial Statements
From the
Managing Director’s
Desk
We stride forward with tangible and
high level of operational readiness,
which is steered by passionate and
committed people and is rooted in a
new set of system solutions and best
industry practices
Dear Stakeholders,
Your Company, PNB HFL, after two and a
half decades of its existence, is now at a
significant point of inflection. And that is
why the theme of this year’s Annual Report
is ‘Transformation’.
As we move into the next phase of our
business transformation journey, we do so
as a more vibrant, dynamic, people-first,
customer-centric and forward-looking
organization which is entrenched in strong
and deep-rooted values. We stride forward
with tangible and high level of operational
readiness, which is steered by passionate
and committed people and is rooted in
a new set of system solutions and best
industry practices.
As we prepare to take the next big leap
towards becoming a larger and more
significant player in the housing finance
sector, we are cognizant of the need to align
our operations to the constantly evolving
desires of our customers.
Annual Report 2013-14
14Expanding our portfolio with personalized National Housing Bank (NHB) relaxed It included revamping of business processes,
and unique solutions, we are consistently some measures in the second half of organizational restructuring, revisiting
driving our efforts to provide best-in-class FY 2014 - reduction in risk weights for home policies, creating and implementing a
products and service experience to our loans in the ₹ 0.30 crore to ₹ 0.75 crore strong and scalable target operating model
customers. It is our focused commitment category. This resulted in easing of pressure (TOM) and formulation of a detailed five
to ensure customer delight across all our on capital adequacy, thereby enabling year business plan to steer us through the
product lines, through customized solutions better portfolio growth for housing finance journey of transformation.
and door-step service. companies (HFCs).
From FY 2013 we started testing our new
FY 2014 saw us take many steps forward in GROWTH ACTUATORS WERE IN machinery, which included people, processes,
fructifying our customer-focused agenda. PLACE FOR FY 2014 systems, new branch lay-outs, new ways of
When we look back at the year gone by, with sourcing business, centralized underwriting,
Despite slowing down of the economy,
a sense of satisfaction, it was a period of handling recalcitrant customers, augmenting
HFCs displayed healthy growth momentum
successful culmination of our plans –without our networks, system solutions, human
in the home loan segment. The overall
a doubt it has been a year of exciting capital saw a sea change as contemporary
growth in housing credit was 20% in
developments that have transformed practices were implemented – this was a
FY 2014, which is higher than the growth
your Company into a more contemporary, very energy absorbing phase, we had to be
rate for FY 2013. Real estate prices, however,
dynamic and energetic entity. continuously alert and tenacious; as we were
remained subdued, with only a few cities
changing all four wheels of a fast moving car!
reporting a marginal increase.
What makes this journey even more
gratifying is the way we grew in contrast to FY 2014 (year under review) was the first
FUELED BY AMBITION, DRIVEN TO
the prevailing macro business environment, year when we could test, over-load and
TRANSFORM
which was not favorable to the growth of trust, wing to wing, all elements of change
the sector. Let me share with you the panoramic insight which were brought in under Kshitij.
to our business process re-engineering
SOFTENING ECONOMY, HARDENING program (BPR), launched under the banner I am happy to report that most of the
RATE OF INTEREST ‘Project Kshitij’, and how the initiatives have initiatives are in the final stages of
been successfully executed to bring about implementation and their results are already
Amid a continuing slowdown of the dramatic changes to the brand image. evident. The BPR exercise has transformed
economy, India recorded the decade’s the face of PNB HFL and has resulted in
lowest annual GDP growth rate of 4.7% This exercise was planned to span over four significant improvements in our competitive
during the fiscal gone by. From mid July, years starting from FY 2011 – the year was position and scale of operations.
the industry faced a steep rise in rates of absorbed in discovering our own selves and
interest, resulting in some large lenders determining our value proposition and where With the agenda of using technology
increasing rate of interest on home loans by ‘we want to be’ in medium and long term time extensively, we have remarkably improved
20-35 bps. This mainly impacted the existing frame. Primarily we designed our own destiny. our internal and external delivery model,
customers, most of the lenders offered human resource (HR) and customer
discounts in the range of 15-25 bps for new The second year (FY 2012) was spent relationship management (CRM),
customers through special schemes. Hence, at strengthening our business and thereby enabling us to emerge as a
rates of interest for new customers were financial risk profiles by creating a robust, customer-centric organization, across
back to the pre-July 2013 levels. growth-oriented business model. products and services.
15Fueled by Ambition, Management
Driven to Transform Discussion & Analysis Statutory Reports Financial Statements
What is emerging as a result of these FOCUS ON INTERNAL OPERATIONAL
The results of initiatives is an entity that is technology READINESS
our efforts are savvy, customer-friendly, competitive in
borrowing and lending, as well as proactive
The weak external environment did not
distract us, we focused our energies on
palpable and in communicating its value proposition
getting various aspects of our organizational
while maintaining its relevance to its target
evident in our market segments. Our ambition is to strive
transformation in place. While the human
capital continued to play a vital role in taking
performance. for excellence and not merely growth in
our agenda forward, we also successfully
numbers. We aspire for nothing less than
Notwithstanding being the best-in-class HFC in the country.
enhanced our operational readiness through
revamped business strategy, processes,
uncertainties in infrastructure and systems.
A first for the Company, PNB HFL has
the rate of interest gone live on radio, newspaper, television
SUSTAINED INCREASE IN ASSET SIZE
regime and a and Internet to generate better brand
recall, gain consumer mind share and The results of our efforts are palpable
slowing economy, communicate our new and improved value and evident in our performance.
Notwithstanding uncertainties in the rate
your Company has add to the brand and services. This is a
step which, I believe, shall go a long way in of interest regime and a slowing economy,
more than doubled strengthening your Company’s brand power your Company has more than doubled its
loan asset size to `10,591 crores over the
its loan asset size and reputation.
past two years. Adhering to the strategy to
to `10,591 crores Only after the final quality checks were strengthen our competitive position, I am
confident that your Company will continue
over the past two satisfactory, your Company dared to go all
out in the market to seize opportunities to to maintain above average industry growth
years grow faster than its peers - which was from rate for quite a few years to come.
FY 2013.
CHANGING PROFILE OF CUSTOMERS
To share with you the key factors which As we move towards evolving into a more
brought about this change in culture and way resurgent and dynamic entity, we are
of life within PNB HFL – the elements are: geared to leverage the immense potential
of future growth. This growth comes with a
PEOPLE LEADING THE CHANGE renewed focus on customer centricity.
This transformation would not have been
possible but for the dedicated involvement Customers have always been at the core of
our growth philosophy and our business
of our people, who have moved in
model is built around customer needs and
harmony with our journey of positive
desires. We have re-defined our target
change. They have been active participants
customer segment with focus on young,
in this process; firstly, by changing their
ambitious and upwardly mobile customers
own beliefs and philosophy, aligning
in existing and emerging urban centers.
these with the Company’s ethos, and
secondly, by becoming agents of change to
CORPORATE WITH A HEART
percolate the upgraded agenda across the
organization, including the new We strongly believe in fostering meaningful
family members. relations with all those who fall within
Annual Report 2013-14
16our periphery of activity, especially the I am thankful to our parent body PNB
underprivileged, so that development and the co-investor Destimoney Enterprises
becomes a universal phenomenon. Pvt. Ltd. for their continued support
and guidance.
As a responsible corporate citizen, we
see a role for ourselves in promoting The PNB brand makes our journey smooth;
development of the society in a holistic it inspires us to whole-heartedly contribute
manner and act towards this end. We have to the national wealth and be a good
collaborated with NGOs that promote corporate citizen.
child-care, general wellness and health care
for the underprivileged. I thank our regulator National Housing
Bank, our customers, our lenders, our rating
SETTING THE AGENDA FOR THE agencies, our lawyers and several business
FUTURE partners whose continued trust in the
Company keeps us going and achieving
As we move forward, I see a huge
new milestones. They are our reason
potential for growth in the relatively under
of existence – I thank them all to have
penetrated housing finance sector in India.
associated with us and am sure we
Your Company is well poised to leverage
will cement our relationships in the years
the opportunities that are before us. This
to come.
transformation augurs well for our future
and going forward it paves the way for a
Finally, I take this opportunity to thank
more ambitious growth agenda.
our management team and express my
gratitude to all our employees, without
Transparency, integrity and care are key
whose relentless support we could not
drivers of our growth strategy. We are
have steered this journey to new milestones
committed to becoming a truly
within a limited time frame. I also welcome
customer-oriented organization rooted in
aboard the new team members who have
the ethos of our ‘Ghar Ki Baat’ positioning.
recently joined PNB HFL to carry forward
our agenda.
In the following pages a detailed
commentary on this heart transplant has
Thanking you,
been compiled, to show case to you how
much micro planning and execution prowess Yours sincerely,
has been utilized to make this journey a
successful model; may be worth replicating.
Sanjaya Gupta
I thank the Board of Directors for their
continued support and guidance, who have
inspired us to build new roads.
17Fueled by Ambition, Management
Driven to Transform Discussion & Analysis Statutory Reports Financial Statements
Doing More,
Doing it Differently
Transformation or business And we did it with the support of an energized team which worked in tandem with the
Company’s ambitious goals. Various initiatives that have given a thrust to transforming
process re-engineering is the organization have happened at several levels – people, information technology,
an energy intensive task. infrastructure, customers, capital, risk management, business strategy and processes.
Undertaking a massive
Transforming people, Value driven growth
and comprehensive
Cultural transformation
process of change, while
conducting routine work Vision and Values
of a growing organization, Institutionalize HR Processes
TRANSPARENCY
makes it enormously energy
Execution
consuming. Yet, that was the Integration of
Resources
Role
Alignment
Performance
Management
Training &
Development
agenda on the operations
side of our business. Competency Reward &
Framework Recognition
The task at hand was to
do more - generate and
Commitment Empowerment
transact more business in
both loans and deposits -
The success of our journey is hinged on As a part of this journey, we focused on
while doing it differently. bringing about a cultural transformation of the vertical and horizontal integration of
It involved extensive our people, driven by our vision and values. our people and processes through their
It was important to align our people’s beliefs alignment with organization’s medium and
training while working, with our value system and business ethos, long-term strategic objectives. This ensured
learning and competing. enabling them to seamlessly embrace the our self-driven commitment to walk that
ideology and philosophy underpinning extra mile.
this process.
Our inclusive and value-led people strategy
Sustainable and profitable growth can outlined our commitment in creating a
only be achieved with the right people work environment which respects and
working in an organization that is fit to values people, while recognizing changing
win, with trust and transparency being the dynamics of the industry. By fostering a
foundation of organizational culture. We are sense of inclusiveness, the HR process
increasingly becoming an agile and diverse successfully saw employees appreciate how
but cohesive business enterprise, with our their work could contribute meaningfully to
people empowered and motivated to do the overall enterprise strategy.
things right. We are building capability
and leadership quality among our people We focused on ingraining our beliefs within
and attracting some of the best talent in our employees and energizing them to
the industry. become change agents by effectively
Annual Report 2013-14
18understanding the needs of our customers
and delivering on the promises made to
them. Speed and accuracy of execution
has become the hallmark and major
differentiator of the Company’s culture.
Efforts were successfully geared towards
creating a strong sense of belonging among
employees and ensuring that they became
integral to the change process.
Changing the physical ourselves to handle large volumes of wherewithal to fulfill their aspirations.
infrastructure business. These two segments have shown sustained
demand, with adequate repayment
Refurbishment and standardization of brick
Changing our Target capacity, and have thus emerged as key
and mortar infrastructure is an integral part
Customer Segment, target groups for our business focus.
of our change journey. Welcoming look and
transforming our
feel of all branches was necessary to ensure
possibilities It is a strategic shift that is already showing
consistency in customer experience. More
benefits across our business and has
than 80% of the offices have already been Along with our own people, customer
unfolded immense possibilities for
renovated and rest are underway. service and customer delight was on top of
future growth.
our minds. Moving into the implementation
Our revamped offices ensure friendliness and phase, we are taking a close look at our
Infusing customer centricity,
comfort and highlight the values of our brand. customer segments and have identified
transforming
groups that we could serve in the long run.
the ORGANIZATION
From a minuscule 48,000 sq.ft. in FY 2012, In the last two decades, we have seen the
we will increase our office space to 1,42,000 emergence of a resurgent middle and upper Today, customers have more options to
sq.ft. by end of FY 2015. We are gearing middle class, with high aspirations and choose from than ever before. We have
19Fueled by Ambition, Management
Driven to Transform Discussion & Analysis Statutory Reports Financial Statements
augmented our capability to fulfill growing Communicating effectively
aspirations and demands of our customers with our potential customers
and provide them with a lasting good
An important aspect of our customer
experience throughout their journey
engagement process is to redesign our
with us.
communication strategy; we have created
sales and marketing collaterals in the
We are developing an organization common man’s language. These collaterals
wherein every team member is a member demystify the business of borrowing and
of the customer service team. We believe lay out everything with transparency and
the job of each one of us is to meet without small print. Our communication is
customer expectations, to improve our aligned with, and supports our positioning
relationship and foster customer delight. of ‘Ghar Ki Baat’, which aims to make
The organization-wide focus on ensuring customers feel at home across every part
highest levels of service competency is of their relationship with the Company,
fueled by our ambition to be the most beginning with the first touch point of
admired housing finance company. sales and marketing.
The thought that we imbibe and We have developed our communication
subscribe to in our customer interactions collaterals with an aim to capture the
is – “I care, and I do.” So what we pursue in customer’s mind share by creating a new
our service suite is personalized delivery brand experience through harmonious look
engagement – from the first interaction and feel of all published communication in
till completion of the loan cycle. line with our corporate image.
In our belief, any technology-based Thriving in a competitive
innovation can stand only second to environment through
one-on-one interaction, and while we efficient risk management
use technology to better our service Sourcing and underwriting a high quality
delivery standards, we never neglect portfolio in a competitive environment
the human element. calls for a responsive and efficient risk
Annual Report 2013-14
20management infrastructure. We have performance indicators. As on March 2014, resources for business requirements, in the
significantly enhanced our risk management our Gross NPAs were at 0.32% and Net most testing times.
capabilities to meet this challenge. We are NPAs at 0.16%. These levels are amongst
now in a position to respond to market the lowest in the industry - less than half The Company has been raising money
situations that call for business actions the industry average of 1% for the home through bank loans, NCDs, NHB refinance
quickly and effectively, while upholding loan sector. and deposits, besides short-term funds
quality of the portfolio. through commercial paper. Our borrowing
We have a trained team to handle recoveries mix at the end of the year is well balanced
Our risk management begins with and manage delinquencies supported by from the point of view of liquidity and when
a well documented policy, which is well laid-out systems and procedures. This matched with maturity profile of assets.
implemented by our team of experienced team harnesses data in a timely manner to
and empowered industry professionals. connect with customers appropriately in With overall improvement in business,
Our people who occupy key positions case of defaults. Our recoveries philosophy credit quality, risk management and
in this function come with professional is driven by core principles of integrity, operations, the credit rating on various
qualifications such as CA or MBA. Our transparency and respect for our customers. financial instruments, such as deposits, bank
risk management processes combine borrowings and NCDs, has also improved
the tested templates and procedures Details of various risk management during the year.
for financial analysis in case of retail initiatives undertaken in recent years are
transactions and use innovative deal carried in the Management Discussion & PNB HFL is one of the few select HFCs
based structuring for complex high- Analysis section. which has been given approval by
value transactions. Extensive personal Reserve Bank of India (RBI) for raising
discussions with the customers are Ensuring a steady supply of funds of $100 million through the ECB
conducted to assess their overall financial route. Our focus would continue to
resources and capital
health and sustainability of their income. maintain a well balanced mix of equity
Long-term funds at competitive cost are
and borrowings. The Company has
We have a strong system to capture, store the key to sustained growth. Over the
planned infusion of equity capital at
and analyze data related to the customers, years, treasury has kept pace with loan
appropriate times in tandem with
supported by quality underwriting. disbursements for raising funds well in time
business requirements.
The robustness and effectiveness of our and at competitive rates from the market.
risk management practices can be best The Company has developed professional
understood through our key portfolio capabilities to supply steady flow of
21Fueled by Ambition, Management
Driven to Transform Discussion & Analysis Statutory Reports Financial Statements
Transforming
with Information
Technology
Information technology (IT) PNB HFL started IT transformation with BPR - Project Kshitij. The first step of the journey was
creation and finalization of the IT transformation roadmap. The roadmap includes business
will play an important role in process change enablement, application development and IT infrastructure deployment,
monitoring of key performance indicators and behavioral change of management
modernization of PNB HFL.
through training.
In order to be an industry
IT Transformation journey
leader, there was a need for
a paradigm shift as IT could
no longer be viewed as an
p IT as
ma
ancillary unit which only IT r
oad Strategic
Partner
assists business processes.
IT as
It needed to be viewed as Business
Process Implementation of enterprise
an integral component of core business suite with data
Value Generation
Change
Enabler center and disaster recovery
the machinery, capable of center started
IT as End point security
spearheading structural Supplier
Centralized management information system (MIS) portal for
and cultural changes within single source of truth
Loan application tracking system
the organization, thereby Secured server room Enhancement and centralization of existing loan management
setup at central support solution to support hub & spoke business model
driving business growth and office (CSO)
Setup of sales contact center
Refurbishment of branch
innovation. IT infrastructure Binary watchdog-centralized application and link monitoring tool
Implementation of Cloud-based, email and unified communication system
secured enterprise Customer application and request tracking system
network link [MPLS
– multiprotocol label Video conferencing facility at CSO and hubs
switching and internet]
at all locations
2012 2013 2014
Annual Report 2013-14
2223
Fueled by Ambition, Management
Driven to Transform Discussion & Analysis Statutory Reports Financial Statements
In the first phase, IT was to act as a manual data sharing with the CSO, which
supplier by putting basic infrastructure did not guarantee authenticity of data.
in place, such as server room setups, Our present branch infrastructure is
refurbishment of branch IT infrastructure, designed in such a manner that all offices
end user hardware replacement etc. are interconnected, with redundancy
Earlier, branches operated on local and fail over for critical components. This
broadband in standalone mode (no ensures scalability, assures security and
captive central network) and there was legitimacy of data.
The second phase required IT to play the IT has enhanced monitoring and efficiency
role of a business enabler; the focus was through centralization and automation
to build point solutions for automation in various business processes across all
of processes and bring in efficiencies functions, such as issuance of interest
through various initiatives. These warrant, electronic clearing system (ECS)
initiatives included inter-networking and presentation, expense processing, issuance
enhancement of existing distributed loan of certificates under Income Tax Act, etc.
management applications to support a
Hub and Spoke model; implementation Another major change during the
of a centralized MIS portal for single truth second phase was redesigning of the
across the organization; an application corporate website. It has been made more
tracking system (ATS) to track file progress customer-centric, a change which has
right from log-in to sanction stage; a received positive reviews.
customer application and request tracking
system (CARTS) for customer service, and In the third and current phase, IT is acting
a unified messaging and communication as a strategic value partner, contributing
system for secure and effective towards creation of a cohesive and efficient
communication system. business ecosystem.
Annual Report 2013-14
24The focus for the coming year is to with an integrated accounting and
implement enterprise core business suite HR management system. Adoption of
(ECBS), an end-to-end solution that will this suite will lead to automation of all
cover all business activities, including processes, and result in improved efficiency
lead management, loan origination, and quality. This will make overall business
loan servicing and collections, along model more secure, scalable and agile.
Distribution
Customer Contact
Channel
Branch Email Internet Mobile External World
Service Portal Center
Multi Channel Framework Allied Solutions Customers
Application Landscape
Lead Loan Deposit Regulatory
Loan Origination Loan Collections Reporting Credit Bureaus
Management Management Management
System System
System System System MIS and Business
Intelligence
Business Partners
Lead Generation Origination Repayment Creation Follow-up Anti Money
Lead Follow-up Appraisal Re-schedulement Maintenance Litigation Laundering
Lead Conversion Disbursal Closure Maturity Closure SARFAESI Regulators
Asset Liability
Management
Common Services
Component
Document Rating Agencies
Master Data User Definition Integrated Accounting Human Resource Management
Shared
Imaging
Collaborative
Infrastructure Services Messaging
Data Center and Data Recovery Center Security Networking Market Feeds
Solution
In the coming years, the current set of
changes will ensure improved analytics
and decision-making, better time-
to-market and customer service, and
reduction in cost of operations. Going
forward, our IT transformation journey
will also consider implementing new
technologies, such as CRM mobility and
cloud, for process simplification to further
enhance operational readiness and propel
sustainable business growth.
25Fueled by Ambition, Management
Driven to Transform Discussion & Analysis Statutory Reports Financial Statements
Transforming the
Financial Landscape
5-YEAR Performance at a Glance (` in Crores)
Year Mar-10 Mar-11 Mar-12 Mar-13 Mar-14
Loan Approvals 850 1,391 1,668 6,091 8,840
Loan Disbursements 805 1,267 1,508 3,682 5,500
Loan Outstanding 2,507 3,167 3,970 6,620 10,591
Deposit Outstanding 304 220 363 1,051 1,712
Total Income 316 364 463 661 1,116
Profit Before Tax 94 97 103 126 176
Profit After Tax 67 69 75 91 127
Dividend (%) 20 22 22 25 30
Earning Per Share (`) 22 23 25 22 25
Net Worth 267 326 392 609 920
Write off 0.10 5.22 2.77 2.55 7.99
Gross NPAs 31.39 41.50 41.27 37.09 33.72
Net NPAs 24.10 29.44 26.61 23.40 16.40
GNPA to Gross Advances (%) 1.25 1.31 1.04 0.56 0.32
NNPA to Net Advances (%) 0.96 0.94 0.67 0.35 0.16
Total Income (` in Crores) Profit Before Tax (` in Crores) Profit After Tax (` in Crores)
1,116 176 127
126 91
661 103 75
94 97 67 69
463
364
316
Mar’ 10 Mar’ 11 Mar’ 12 Mar’ 13 Mar’ 14 Mar’ 10 Mar’ 11 Mar’ 12 Mar’ 13 Mar’ 14 Mar’ 10 Mar’ 11 Mar’ 12 Mar’ 13 Mar’ 14
Annual Report 2013-14
26Deposit Outstanding (` in Crores) Net Worth (` in Crores)
1,712 920
609
1,051
392
326
267
363
304
220
Mar’ 10 Mar’ 11 Mar’ 12 Mar’ 13 Mar’ 14 Mar’ 10 Mar’ 11 Mar’ 12 Mar’ 13 Mar’ 14
Gross and Net npas (` in Crores) GNPA to Gross Advances & NNPA to Net Advances (%)
41.50 41.27 1.31
1.25
37.09
33.72 1.04
31.39 0.96 0.94
29.44
26.61
24.10 23.40
0.67
0.56
16.40
0.35 0.32
0.16
Mar’ 10 Mar’ 11 Mar’ 12 Mar’ 13 Mar’ 14 Mar’ 10 Mar’ 11 Mar’ 12 Mar’ 13 Mar’ 14
Gross NPAs Net NPAs GNPA to Gross Advances NNPA to Net Advances
DIVIDEND (%)
30
25
22 22
20
Mar’ 10 Mar’ 11 Mar’ 12 Mar’ 13 Mar’ 14
27Fueled by Ambition, Management
Driven to Transform Discussion & Analysis Statutory Reports Financial Statements
Leadership
Team
Ajay Gupta
Chief Risk Officer
Nitant Desai
Chief Operations & Technology Officer
Shaji Varghese
Business Head
Anshul Bhargava
Chief People Officer
Sanjay Jain
Company Secretary & Chief Finance Officer
Annual Report 2013-14
28Management Discussion & Analysis
Fueled by Ambition, Management
Driven to Transform Discussion & Analysis Statutory Reports Financial Statements
Management
Discussion & Analysis
and delayed clearance of projects, adversely
impacted fresh project investment as well as
consumption.
High Inflation Leads to Tight
Monetary Stand
Inflation ruled high for most part of FY 2014.
Growth in the consumer price index (CPI),
one of the risk factors to value of the rupee,
averaged around 10% from April 2013 to
December 2013. It was only in January 2014
that consumer inflation moved marginally
Economic Overview Although downside risks have diminished below 10%. However, core inflation,
overall, they continue to dominate the excluding food and fuel, continued to be
Global Economy - at a Threshold
global growth outlook, notwithstanding high. Since taming inflation remained a
Global economic growth remained sluggish positivity in the US, the UK and Germany. priority over promoting growth, RBI did not
and erratic for the first six months of Major concerns include risks from low change its tight monetary policy stance. In
FY 2013. However, the later months inflation and possibility of protracted low its latest bid to curb inflation, RBI, in January
witnessed strengthening of global business, growth, especially in the EU and Japan. 2014, increased the policy repo rate by
with much of the growth impetus flowing Increased financial volatility in emerging 25 basis points - from 7.75% to 8.0%, a move
from advanced economies. Global growth market economies, and increase in the cost which increased borrowing cost. It helped
averaged at about 3.67% in the second half of capital is likely to dampen investment reduce the CPI inflation to 8.3% as on
of FY 2013, a marked uptick from 2.67% prospects and weigh on their growth, end-March 20143.
recorded during the previous six months. moving forward. Growth in emerging market
Improved growth in the US was largely due economies too is projected to pick up only India’s Housing Finance Sector
to strong exports and temporary increase in modestly. Overall, global growth is projected The fast growing housing finance sector
inventory demand. In the EU, growth turned to be slightly higher in FY 2014 at around in India is served by multiple institutions,
positive in a select few economies; however, 3.6% and rise to 3.9% in FY 2015.1 comprising banks, housing finance
stress continued in countries outside the companies (HFCs) and non-banking
core EU regions as they slowly moved out of Indian Economy - in need of Transformation
finance companies (NBFCs). The volume
the long recessionary phase. In contrast to FY 2014 was yet another challenging of housing loans has witnessed sustained
the advanced economies, many emerging year for the Indian economy. Internal multi-fold growth, from ` 0.43 lac crores
market economies faced an unfavorable challenges, inflation, rupee depreciation as on March 2000 to ` 9.03 lac crores as
external financial environment even as and consequent hike in interest charges on March 20144.
they dealt with domestic challenges such contributed to current account deficit.
as structural bottlenecks in infrastructure, This, along with threat of a sovereign At present, about 65-66% of total home
labor market rigidities and a worsening downgrade by rating agencies and global funding is contributed by banks and the
investment outlook, which derailed headwinds, impacted business sentiments rest comes from HFCs and NBFCs. The
growth. Yet, despite lower growth rates, and resulted in muted GDP growth. For number of housing finance institutions
the emerging economies continued to the second year in a row, annual GDP was registered with National Housing Bank
contribute more than two-thirds of sub 5% (4.7%)2, amongst the lowest in this (NHB) has grown at a significant pace and
the global growth. decade. The sluggishness in the economy currently stands at 57.
Annual Report 2013-14
30Demand for Housing Finance by various tax incentives, such as Trends in the Housing Sector
Growth of housing finance sector in India deductions for payment of interest
Despite huge potential in housing finance
can be attributed to multiple factors, some on housing loans and rebate on
sector, there has been a stagnant growth
of which are: repayment of principal, under the
rate due to high inflation and slower real
Income Tax Act. The concept of nuclear
Burgeoning Population – India is likely income growth (real income = nominal
family is picking up with young urban
to reach a population of 1.4 billion by income/price level).
population who now avail housing
FY 2026, with a significant proportion
finance to actualize their dream of
of the populace belonging to young Twin Concerns of High Inflation and Slow
home ownership.
and working category. According to the Income Growth
census of FY 2011, India has more than Low Penetration – Mortgage lending The high interest rate environment and
50% of its population below the age of has significantly contributed to the lower income growth has adversely
25 and more than 65% below the age growth of housing and construction. impacted purchasing power of consumers
of 35. It is expected that, in FY 2020, the Outstanding mortgage loans contribute and lower discretionary spending.
average age of an Indian will be only 8% to India’s GDP, which is a very The prevailing sentiment has resulted
29 years, compared to 37 years for low number when compared to the in prospective buyers withholding big
China and 48 years for Japan; and by GDP of many other countries. There is
ticket purchases, particularly homes, in
FY 2030, India’s dependency ratio should an adequate headroom for increasing
expectation of some correction in prevalent
be just over 0.4. The rising population, mortgage lending penetration in Tier II
realty prices. Consequently, property
accompanied by an increase in the and Tier III cities in India.
proportion of working population, is demand has been sluggish, with oversupply
likely to precipitate high demand for situation prevailing in some micro markets.
housing finance5.
Mixed Trends in Property Prices
Initiatives Proposed in Union
Urbanization – With rapid Budget 2014-15 In FY 2014, housing prices continued to rule
industrialization and development high, except in a few pockets, probably due
of Tier II and Tier III cities, growth in Deduction of interest on housing
to holding power of real estate developers.
urban population is likely to outpace loans to be raised to ` 2 lacs from
NHB Residex, an index that tracks
overall growth in population. Growth in ` 1.5 lacs previously.
movement of residential prices across
urbanization is estimated at a CAGR The total deduction allowed for 26 cities, indicated that for the period
of 2.1% over the period FY 2012-50. repayment of principal amount has October 2013 to December 2013, the
been increased from ` 1 lac to prices marked an increase in 16 cities. The
Rapid Urbanization in India ` 1.5 lacs. increase ranged from 8% in Nagpur to 1.1%
Urban Population in Million
425 Allocation to Rural Housing Fund, in Dehradun. For Delhi, it was 3.2%, Patna
388 run by National Housing Bank (NHB), 6% and Faridabad 2.5%. Prices declined
351
314 to be increased to ` 8,000 crores in only 8 cities, including Lucknow 3.2%
286
this fiscal. and Chandigarh 2%. Prices in Mumbai and
Ludhiana have remained stagnant.
An additional ` 4,000 crores
earmarked for NHB to enable it to
Low Demand for Housing Impacts
increase the flow of cheaper credit
Disbursements
towards affordable housing for
FY 2001 FY 2005 FY 2010 FY 2015 FY 2020 urban poor. Faced with lower demand and oversupply,
(Source: Census of India, Housing Microfinance) the real estate developers delayed launch
Government to spend ` 7,060 crores
of new projects during first half of the year.
on developing 100 smart cities as
Improved Affordability – Over last This has checked downward spiral
satellite towns of larger cities and
two decades, average cost of buying by modernizing existing of housing prices, but it has resulted in
a property has reduced to 4-5 times mid-sized cities. slower growth in home purchases.
of annual income. This is due to HFCs have reported moderate growth
rising disposable income supported in FY 2014.
31Fueled by Ambition, Management
Driven to Transform Discussion & Analysis Statutory Reports Financial Statements
The total outstanding amount of home whose loans are being taken over, this is a program has restructured PNB HFL into
loans was ` 9.03 lac crores as on March 2014 big loss as they have to bear high boarding a contemporary HFC with robust top line
as compared to ` 7.51 lac crores as on cost besides losing on business. growth and sound portfolio quality.
March 20136. The growth rate of HFCs and PNB HFL has been able to improve its earlier
NBFCs has declined from 28% in FY 2013 Pricing and Profitability track record and consolidate its position
to 23% for FY 2014. Banks have witnessed Expected Movement of Growth Rate in the industry through transformation,
growth rate of 18% over the same period. encompassing its entire business landscape
The overhang of slowing economy of last
- from people, infrastructure, IT, risk
two years will continue in FY 2015 even
Policy Initiatives management, and to delivery model.
though marginal recovery is expected.
Major part of FY 2014 has been characterized Moderation in growth is expected Restructuring Benefits
by high rate of interest and a depreciating due to stress in the overall economic
rupee. The liquidity across sectors was tight. Post restructuring, the Company has
environment, high rate of interest, price
been transformed from a low volume
corrections etc.
In order to check depreciating rupee, the RBI boutique player to the 5th largest HFC in
clamped down on foreign exchange outflows. However, long-term prospects for business India. Its organizational change story has
It only allowed banks to undertake gold continue to be encouraging. The growth been well appreciated and its efforts have
imports, on consignment basis, specifically rate is estimated to go up to 24% for HFCs been recognized by various prestigious
to meet genuine needs of exporters of and 14% for banks over the next few years. organizations.
gold jewelry. It also reduced the limit for Large part of growth is expected to emanate
remittances made by resident individuals Higher Growth and Expansion
from Tier II/III locations and affordable
under the liberalized remittances scheme housing segment. In FY 2014, PNB HFL registered a top line
(LRS), from $200,000 to $75,000 per year. growth of 68%, besides sustaining healthy
Asset Quality growth momentum of the previous years.
NHB gave some relief to HFCs after relaxing The Company has built a solid asset base of
Asset quality of HFCs has been largely stable
provisioning norms and reduced risk over ` 10,000 crores which has more than
with gross NPAs of 0.73% as on March, 2014
weightage for property and housing loans. doubled over the last 2 years. The Company
as against 0.72% as on March, 2013.
This has eased requirement of fresh capital is expected to maintain its growth at a level
to meet capital adequacy norms. that is significantly higher than the industry
Industry Growth Trends – Quick Facts
RBI allowed HFCs to raise funds through ECB average in medium term. In terms of
FY 2014
route for affordable housing segment. HFCs geographical expansion, the Company has
have raised a sum of $600 million through Overall Gross NPA% of HFCs: 0.73% expanded across India with new branches
this route during FY 2014. The Government Marginal decline in NIMs and stable being opened in South and West India. In
has allowed NHB to raise tax free bonds, operating expense levels North, where brand PNB is very strong, the
which will ease refinance rates. Company’s operations continue to be on a
RoTA level 2.29%
rapid growth trajectory.
Response to policy initiatives RoE level 20.54%
These favorable policy initiatives have (Source: ICRA’s Indian Mortgage Improved NPAs
resulted in easing fund crunch and enabled Finance Market, FY2014). PNB HFL has put in place robust tools
HFCs to grow steadily despite difficult for credit underwriting, monitoring and
macroeconomic conditions.
Emerging Stronger through collection processes. There has been a
transformation steady decline in Gross NPAs from 0.56% as
Besides these positive developments, In FY 2011, PNB HFL embarked on a on March 31st, 2013 to 0.32% as on March
there were some adverse developments, transformation. Accordingly, it designed a 31st, 2014. It was driven by strong focus
such as, increase in the number of balance multi-faceted business process on curbing delinquencies in the erstwhile
transfer cases in the industry. Some lenders re-engineering program as a roadmap. portfolio. In addition, the Company has
have lured existing customers by offering focused on improving quality vectors of
discounts on processing fee and offering Despite macro economic environment its portfolio and built a balanced portfolio
lower rates of interest to them. For HFCs, challenges, the implementation of this mix. The pre-BPR portfolio has been cured
Annual Report 2013-14
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