This was stated by PNB's chairman and managing director, SS Kohli, while addressing a press conference after the inauguration of the banks second `Large Corporate Branch' (LCB) in south Mumbai in line with the recommendations of Boston Consulting Group (BCG).

"PNB Capital is just meeting the expenses. We are trying to make it profitable, but we will not close it down", Mr Kohli said. Additionally, the bank is also focussing on expanding and liberalising its educational loans tracking the trend at the upper-end of the educational sector.

Talking about the bank's second `LCB' Mr Kohli said: "The bank has accepted the recommendations of BCG, which suggested restructuring of the bank based on products, process and profitability to reposition the bank as `a most profitable universal bank'".

The bank has already started an LCB in New Delhi, and shall be introducing five more similar corporate outlets at Calcutta, Chennai, Chandigarh, Ludhiana and Bangalore. This will cover approximately 75 per cent of the corporate credit business of the bank. These branches will provide credit facilities of Rs 25 crore and above, and shall have a direct reporting relationship with head office. These branches are accredited with `ISO 9002' certification. On the bank's voluntary retirement scheme (VRS), Mr Kohli said that the numbers (response) depended on the man-power planning as well as the amount of amortisation to be approved by the government towards VRS expenditure. As per the common norm, all public sector banks are looking at reducing their man-power strength by 10 per cent of their total employees.

PNB has a work-force of 65,000, of which all 6,000 VRS applicants are likely to be obliged with.Out of these 6,000 applications, nearly 2,000 employees - including experienced officers - had already been relieved from the bank. On an average, each employee has received consideration of Rs 6-7 lakh (50 per cent in cash and 50 per cent in bonds) under the VRS. Employees who opted for the VRS can take a new job after getting the bank's permission.

Meanwhile, PNB has recovered Rs 40 crore of its non-performing assets (NPAs) through a one-time-settlement scheme out of the total recovery of Rs 285 crore upto September this year. Net-NPAs of the bank is currently around 8.5 per cent. which is likely to come down to 7 per cent by the end of March, 2001.

The bank achieved an operating profit of 20 per cent in the first-half of the year. It is likely to have a business volume of over Rs 1,00,000 crore by end-March' 2001. Currently, it has a business volume of Rs 75,000 crore.