How Punjab National Bank evaluates a settlement proposal

Punjab National Bank's recovery workflow runs through moderate — active ots schemes at circle level. Committees benchmark every proposal against realisable value under SARFAESI, the age of NPA and PNB's internal sacrifice matrix. Below is the exact stage-by-stage playbook for a Punjab National Bank settlement — with who acts, how long each stage takes, and the PNB-specific behaviour at that stage.

End-to-end PNB settlement process

1
NPA classification
Account crosses 90-day overdue; system-marked sub-standard.
Bank system (auto) · Day 90
2
Reminder & collection
Telephonic + written reminders; recovery agency assigned for retail.
Collections / recovery cell · Day 90–150
3
Demand notice (13(2))
PNB's Stressed Assets Vertical (SAV) at Circle level issues 13(2); pace varies materially across Circles.
Bank's authorised officer · Day 150–240
4
OTS proposal filed
Borrower files written OTS proposal with financial justification and source-of-funds plan.
Borrower / advisor · Any time after NPA
5
Internal review
Recovery cell prepares committee note: outstanding, security value, sacrifice, comparable settlements.
Recovery officer · 10–25 days
6
Negotiation rounds
Circle GM chairs OTS committee; ≥₹5 cr moves to HO Board Sub-Committee.
Recovery committee · 20–40 days
7
OTS sanction letter
PNB sanction letter carries 60-day validity; extension needs re-approval at same level.
Sanctioning authority · 5–10 days
8
Payment
Borrower pays as per sanction — usually lump sum or 2–3 tranches within validity.
Borrower · 60–150 days
9
NOC & security release
No Objection Certificate issued; mortgage / hypothecation released; original documents returned.
Bank (release cell) · 15–30 days post-payment
10
CIBIL update to 'Settled'
Bank reports status 'Settled' to all bureaus in the next reporting cycle.
Bank credit-reporting · 30–45 days post-NOC

Punjab National Bank sanctioning matrix — who approves what

Punjab National Bank's approval hierarchy determines both the discount ceiling and the timeline. Filing at the wrong tier is the single biggest reason PNB OTS proposals stall.

Authority	Exposure limit	Timeline	Decision criteria
Branch Manager	Up to ₹5 lakh (retail unsecured only)	10–20 days	Security cover, prior payment record
Regional Office (RO)	₹5 lakh – ₹50 lakh	15–30 days	Sacrifice vs realisable value under SARFAESI
Zonal Office (ZO) — DGM chaired	₹50 lakh – ₹5 crore	35–60 days	Circle Head of Stressed Assets + Zonal Legal
Head Office Committee — GM chaired	₹5 crore – ₹50 crore	45–90 days	HO Stressed Assets Vertical + Chief Risk Officer
Managing Committee (MC)	₹50 crore – ₹500 crore	60–120 days	Recoverable value, ARC route economics
Board of Directors	Above ₹500 crore	90–180 days	Full commercial view + regulatory disclosures

PNB settlement timeline

Case assessment· 1–3 days

Statement + SARFAESI stage review

Proposal drafting· 5–10 days

PNB SAV format with sacrifice justification

RO / ZO negotiation· 20–40 days

2–3 rounds; wider Circle discretion vs SBI

Committee sanction· 10–20 days

Sanction letter, 60-day validity

Payment· 45–60 days

Lump sum or 2 tranches

NOC + CIBIL· 30 days post-payment

Common PNB rejection reasons — and how to fix them

Circle-scheme mismatch

Why PNB rejects: PNB runs periodic Circle-level OTS schemes; proposals filed outside the scheme window face stiffer criteria

Fix: Time the OTS filing to align with the Circle's announced OTS scheme

Under-valuation of property

Why PNB rejects: PNB's panel valuers tend to conservative estimates

Fix: Attach 2 independent valuations from panel valuers

MSME with CGTMSE claim pending

Why PNB rejects: Committee waits for CGTMSE claim before OTS

Fix: Parallel CGTMSE claim invocation with intimation letter

Wilful default flag

Why PNB rejects: PNB's post-Nirav-Modi caution heightened

Fix: Contest classification separately

Consortium account

Why PNB rejects: Lead-bank alignment required

Fix: File consortium-level OTS with lead bank

PNB product-specific settlement timelines

Product	Typical settlement	Timeline
PNB Housing Finance (co-branded) + PNB Home Loans	60–78% of principal	90–150 days
PNB Personal Loan	35–55% of outstanding	45–90 days
PNB Sanjeevani / MSME Term Loan	55–75% of principal	90–180 days
PNB Mudra / SME Smart Advance	50–72%	75–150 days
Cash Credit / Working Capital	50–70% of drawn limit	90–180 days
PNB LAP	58–75%	90–150 days
Cash Credit (agri / SME)	50–70%	90–180 days
Overdraft	45–65%	60–120 days
PNB Car / CV Loan	50–72% post-repo	45–90 days
PNB Saraswati / Pratibha	40–60%	60–120 days
PNB Credit Card	30–50%	30–60 days

PNB case studies — anonymised timelines & outcomes

Live examples of the PNB process working end-to-end — same stages as above, mapped to real timelines, discounts and committee outcomes. Client details are anonymised.

Case PNB-24-0334

MSME term loan

Ludhiana

45%

discount

Outstanding

₹1.86 crore

Settled at

₹1.02 crore

Timeline3 months

Challenge:: Circle scheme window closing in 30 days
Strategy:: Fast-tracked proposal aligned to Circle scheme with 2 panel valuations
Outcome:: Sanctioned at 55% principal within the scheme window

Case PNB-23-0912

Home loan

Delhi

34%

discount

Outstanding

₹64 lakh

Settled at

₹42 lakh

Timeline5 months

Challenge:: Auction notice published, valuation dated
Strategy:: Fresh valuation + DRT-SA + OTS
Outcome:: OTS at 66% principal; auction withdrawn

Case PNB-24-0287

Personal loan + Card

Chandigarh

65%

discount

Outstanding

₹5.4 lakh

Settled at

₹1.9 lakh

Timeline2 months

Challenge:: Recovery-agency harassment
Strategy:: Consolidated OTS + FPC complaint to PNB CGM
Outcome:: OTS at 35%; agency withdrawn

Client names and identifying details are anonymised. Amounts rounded. Outcomes reflect approved PNB settlements handled by NPA Experts and do not guarantee similar results — every case turns on documentation and committee discretion.

Why cases like these get rejected at PNB

Even a clean process fails when these PNB-specific gaps surface at committee review. Address them before your OTS is tabled.

Circle-scheme mismatch
Why PNB rejects: PNB runs periodic Circle-level OTS schemes; proposals filed outside the scheme window face stiffer criteria
How to fix: Time the OTS filing to align with the Circle's announced OTS scheme
Under-valuation of property
Why PNB rejects: PNB's panel valuers tend to conservative estimates
How to fix: Attach 2 independent valuations from panel valuers
MSME with CGTMSE claim pending
Why PNB rejects: Committee waits for CGTMSE claim before OTS
How to fix: Parallel CGTMSE claim invocation with intimation letter
Wilful default flag
Why PNB rejects: PNB's post-Nirav-Modi caution heightened
How to fix: Contest classification separately
Consortium account
Why PNB rejects: Lead-bank alignment required
How to fix: File consortium-level OTS with lead bank

PNB settlement process — city coverage

Deep-dive city hubs for Punjab National Bank settlement process. Every link uses the same PNB + city anchor pattern so search engines can map our coverage: