PNB moves to calm frayed nerves as customers queue up

Facing customer anxiety and possible flight of deposits following the Rs 11,300 crore scam, Punjab National Bank (PNB) is engaging its senior staff on a damage control exercise.

Senior officials are touring the branches across the country trying to calm down customers who are coming to enquire about the health of the bank and wanting to withdraw money from their accounts.

Apart from the deep hole created by the fraudulent letters of undertaking (LoU) to a group of firms promoted by Nirav Modi and his maternal uncle Mehul Choksi, India's second-largest public sector bank is worried that its Rs 647,998 crore deposit base by the end of December 2017 could shrink.

Stepping up reassurance signals, PNB has sent out letters to customers and its employees to help the bank tide over this 'short-term crisis. With an asset base of Rs 771,278 crore until December 31, 2017, the bank has a strength of around 70,000 people.

A senior manager said, "I am back in office after visiting six branches and meeting customers to arrest their fears while addressing a wide range of queries. But so far there is no scramble for withdrawing deposits."

Though it is not clear yet if deposits are going to erode, surely many customers are fearing about the safety of their money.

Another senior PNB official said, "We are making the customers understand the issue and explaining to them the loss they would face if they withdraw the money. But if they still want to withdraw money we are not stopping them.We are adequately capitalised to meet all our customer needs."

The PNB management is also explaining to the customers that it is one among the three public sector banks that reported profit for the fiscal-third quarter ended December 31, 2017. The bank had reported a net profit of Rs 230 crore. The operating profit for the bank is about Rs 16,000 crore annually, which works out to Rs 4,000 crore every quarter.

"We are setting all this in context while persuading our customers to continue banking with us. We have about 6,957 branches across the country and the problem was only from the Brady House branch in Mumbai," the senior PNB official said.

In an advisory to customers, PNB has said, "We assure you that the bank is safe and we have the capability to come out of the situation. We would never break the trust of millions of our customers who have been our companions in this long journey of 123 years. The time is definitely tough, but remember the tough times do not last, tough people do."

The bank has also tweaked its logo while engaging its employees as part of the brand campaign. "PNB is Strong. I am with PNB. Don't Panic, Be with PNB." Many of the employees of the bank, including retired staff, are putting this as their whatsapp profile to reassure that the bank is capable to coming out of the crisis.