India Ratings Reaffirms Punjab National Bank's AAA Ratings, Citing Strong Capital Position

Punjab National Bank (PNB) has received rating reaffirmation from India Ratings and Research Pvt. Ltd., which maintained the bank's INDAAA/Stable ratings across various debt instruments. This rating action, dated December 11, 2025, underscores PNB's robust financial position, strong government support, and improving operational metrics.

Rating Reaffirmation Details

India Ratings has affirmed PNB's ratings across multiple instrument categories:

Instrument Type:	Rating/Outlook
Long-Term Issuer Rating:	INDAAA/Stable
Basel III Additional Tier 1 Bonds:	INDAAv/Stable
Fixed Deposits:	INDAAA/Stable
Basel III Tier 2 Bonds:	INDAAA/Stable
Senior Infrastructure Bonds:	INDAAA/Stable
Certificates of Deposit:	INDA1+

Strong Capital Position

PNB maintains a well-capitalized position with comfortable capital buffers above regulatory requirements:

Capital Metric:	Q2 FY26	Previous Period
Common Equity Tier-1 Ratio:	12.75%	12.33% (FY25)
Capital Adequacy Ratio:	17.19%	17.01% (FY25)
Return on Assets:	0.71%	0.97% (FY25)

The bank has demonstrated significant improvement in internal accruals, with management targeting to exceed 1.00% ROA in the medium term. PNB's capital raising ability was further demonstrated through three qualified institutional placements totaling ₹105.90 billion across FY21, FY22, and September 2024.

Asset Quality Improvement

PNB has shown consistent improvement in asset quality metrics:

Asset Quality Indicator:	Q2 FY26	FY25	FY24
Gross NPAs:	3.45%	3.95%	5.73%
Net NPAs:	0.36%	0.40%	0.73%
Provision Coverage Ratio:	90.02%	90.27%	87.93%

The bank maintains almost 100.00% provisions against its exposures to NCLT-1 and NCLT-2 lists, demonstrating prudent risk management practices.

Operational Performance

PNB's operational metrics reflect stability and growth:

Performance Metric:	FY25	Growth (YoY)
Pre-provisioning Operating Profit:	₹268.30 billion	+7.60%
Net Interest Income Growth:	-	+6.70%
Net Loan Growth:	-	+15.30%
Global Net Interest Margins:	2.93%	-16 bps

The bank's deposit franchise remains stable with CASA ratio at 36.10% in Q2 FY26, maintaining its position as the second-largest PSB in terms of deposit market share.

Systemic Importance and Government Support

India Ratings factors in PNB's systemically important position and likelihood of continuous financial support from the Government of India, which holds a 70.08% stake. The bank maintains significant market presence with 6.90% market share in total deposits and 5.90% in gross advances on an amalgamated basis.

PNB operates through an extensive network of 10,228 domestic branches, two international branches, 11,187 ATMs, and 32,278 business correspondents, reinforcing its pan-India franchise.

Outlook and Key Monitorables

The stable outlook reflects expectations of continued steady growth in advances and deposits while maintaining healthy profitability. Key areas for monitoring include the bank's ability to enhance retail exposure, improve low-cost CASA franchise, and prepare for Expected Credit Loss (ECL) provisions implementation.

With superior liquidity position including a liquidity coverage ratio of 132.73% and 23.20% of total assets in RBI balances and government securities, PNB remains well-positioned to meet funding requirements and support future growth initiatives.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
+0.20%	-3.20%	-3.79%	+9.06%	+9.27%	+185.60%

Punjab National Bank (PNB), one of India's leading public sector banks, has been hit with a significant penalty while simultaneously demonstrating financial growth, according to recent reports and financial data.

Penalty Imposed by Appellate Tribunal

The Appellate Tribunal under SAFEMA (Smugglers and Foreign Exchange Manipulators Act) has imposed a monetary penalty of Rs 15.37 crore on Punjab National Bank. This penalty stems from an appeal against an order by the Financial Intelligence Unit-India (FIU-IND) related to violations of the Prevention of Money Laundering Act (PMLA) during the period from April 2016 to November 2017.

Key points regarding the penalty:

Amount: Rs 15.37 crore (Rs 15,37,50,000)
Imposing Authority: Appellate Tribunal under SAFEMA
Original Order: Issued by FIU-IND on 29.07.2019
Violation Period: 01.04.2016 to 30.11.2017

PNB has stated that it has already implemented necessary corrective measures and system checks to prevent such non-compliances in the future. The bank also asserts that there is no material impact on its financial position or operations due to this penalty, as the amount has been fully provided for in accounts.

Financial Performance Highlights

Despite the regulatory setback, Punjab National Bank's financial data reveals growth over the past few years. Here's a snapshot of key financial metrics:

Metric	Current Year	1 Year Ago	3 Years Ago	5 Years Ago
Total Assets	1,857,543.60	1,598,636.00	1,493,649.00	1,279,725.00
Total Equity	133,766.40	110,947.50	103,339.90	93,021.10
Investments	524,840.30	446,421.30	416,913.80	404,369.00
Current Assets	212,198.60	175,149.00	203,218.70	157,940.20

The bank has shown growth across various financial parameters:

Total Assets: Increased by 45.15% over the past five years
Total Equity: Grew by 43.80% in the same period
Investments: Expanded by 29.79% since five years ago
Current Assets: Rose by 34.35% compared to five years ago

Conclusion

While the Rs 15.37 crore penalty highlights the need for stringent compliance with anti-money laundering regulations, Punjab National Bank's financial performance suggests that the bank remains on a growth path. The implementation of corrective measures and system checks indicates PNB's commitment to addressing regulatory concerns while continuing to expand its business operations.

Investors and stakeholders may keep a close eye on how PNB balances regulatory compliance with its growth strategies in the coming years.