Finsamudra Desk
Under MD & CEO Ashok Chandra, Punjab National Bank is moving away from large corporate loans toward RAM lending, backed by a push for low-cost CASA deposits.
Punjab National Bank is recalibrating its lending strategy under MD & CEO Ashok Chandra, moving away from large, concentrated corporate loans toward the Retail, Agriculture and MSME (RAM) segment.
RAM now accounts for 56.6% of PNB's domestic advances, reflecting a deliberate shift toward smaller, granular borrowers rather than high-ticket corporate exposures.
The bank's rationale rests on three pillars: diversifying NPA risk across millions of smaller loans instead of concentrated corporate debt, capturing better yield margins on retail and MSME lending compared to corporate debt restructuring, and funding this growth through low-cost CASA deposits.
Chandra has made accelerating CASA (Current & Savings Account) deposits a top priority, aiming to lower PNB's overall cost of funds so the RAM lending push remains profitable at scale.
For DSAs, connectors, and loan agents, a large PSB doubling down on RAM signals sustained sourcing demand for retail, MSME, and agri loans rather than corporate deals — a segment where distribution networks and Sub-DSAs play a direct origination role.
If PNB successfully lowers its cost of funds via CASA growth, it can price RAM loans more competitively, which affects the margins and volumes available to intermediaries channeling borrowers into this segment. The open question — whether PNB can scale RAM without a corresponding rise in NPAs — will shape how aggressively banks compete for retail and MSME loan volumes going forward.
More on PNB
Sources
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