State-run Punjab National Bank has received board approval for an IT spending plan of ₹3,400 crore, covering investments in artificial intelligence, large-scale technology upgrades and digital innovation initiatives, said its managing director and chief executive, Ashok Chandra, in an interview on Thursday.
The bank also plans to appoint a consultant for its AI initiatives and to develop a dedicated strategy to tackle emerging cyber-fraud risks, Chandra added.
“The bank is planning to shortly float a request for proposal (RFP) to hire a consultant for generative AI-led initiatives, including data analytics, digital innovation, predictive analytics, customer service automation, cyber-risk management, and fraud-monitoring systems,” he said.
The move comes as banks grapple with increasingly sophisticated cyber fraud and digital scams, including emerging threats such as and AI-enabled phishing. In the last week of April, Union finance minister Nirmala Sitharaman met the chiefs of public sector banks to discuss AI-related risks amid global concerns over Mythos and the potential threat to financial data security.
“We have also created a new vertical called the Strategic Innovation Lab. Under this initiative, we identified more than 200 young engineering professionals within the bank, including talent from IITs and NITs. They will be trained and brought into the head office innovation setup to strengthen our technology and ,” Chandra said.
Q4 performance
While talking about challenges in Casa (current account and savings account) mobilization, he said the bank’s domestic deposits grew 9.1% year-on-year. Casa deposits grew 6.2%, while savings bank individual deposits—which it considers core deposits—grew 9.2%.
“Last year, we completely revamped our Casa and savings bank schemes. Under these revamped products, we mobilized more than 47 lakh (4.7 million) quality accounts, which brought in around ₹22,000 crore of savings bank deposits,” he added.
On margins, he said pressure was visible across most public-sector banks in the March quarter. “The key reason was the faster transmission of repo rate cuts on the lending side, while deposit rates did not decline at the same pace,” he said.
“Our expectation was that deposit rates would soften during Q4, which would offset the impact of lower lending rates. However, that did not happen during the quarter, and therefore margins were impacted across the banking sector,” he said.
In Q4FY26, the bank reported a net profit of ₹5,225 crore, up 14 % from ₹4,567 crore a year ago. Net interest income (NII) slipped 3.5 % to ₹10,380 crore from ₹10,756 crore. Its domestic net interest margin (NIM) stood at 2.61% for the quarter, as compared to 2.96% in the year-ago quarter.
ECLGS 5.0
On the government’s recent announcement on the Emergency Credit Line Guarantee Scheme () 5.0, Chandra said support has come at the right time. “MSMEs (micro, small and medium enterprises) are likely to face some pressure, especially from Q2 onwards, because of the evolving global situation,” he added.
The bank’s MSME advances increased 19.9% on-year to ₹1,95,027 crore.
He further added that wherever accounts are operational and businesses are viable, they need additional support and liquidity. With the credit guarantee now available, banks will be in a position to extend that support.
“At present, we have not seen any major stress in accounts linked to Middle East countries. We have conducted two webinars with exporters connected to those regions. Discussions are ongoing with the Government of India regarding opportunities and challenges arising out of the situation. Whatever support is required, corporates and banks will work together to address it,” he said.