The History of Punjab National Bank (From 1894 to Present)

Punjab National Bank (PNB) is a large Indian bank with a market value of Rs. 1,18,324.37 crore (as of September 12, 2024). Its main sources of income are interest from loans, advances, and investments. As of June 2024, the bank reported zero gross and net Non-Performing Assets (NPAs). This is a clear indication of “no bad loans”.

When it comes to financial performance, the bank PNB earned Rs. 32,759.89 crore (for the quarter ending June 2024). This was slightly down from the previous quarter but up 12.84% from the same period in 2023. Also, the bank’s net profit after tax for the quarter was Rs. 4,006.90 crore.

In this article, let’s understand the PNB history in detail covering both pre-independence and post-independence eras. We will also check some key milestones achieved by the bank starting from 1894.

• PNB was founded in 1894 as India's first indigenous bank.
• After 1947, PNB grew through acquisitions. Notably, it acquired the Bharat Bank in 1951, the Hindustan Commercial Bank in 1988, and the New Bank of India in 1993.
• PNB celebrated its 130th anniversary in 2024.

Punjab National Bank (PNB) was established in 1894 in Lahore, which is now part of Pakistan. It was launched by leaders of the Swadeshi movement, which promoted Indian-made goods and institutions. Some notable founders of the bank are:

• Sardar Dayal Singh Majithia
• Lala Harkishen Lal
• Lala Dholan Das
   

Their goal was to create a financial institution that would help India grow and prosper once it gained independence. Lala Lajpat Rai, a key freedom fighter, was involved with the bank's early administration and opened its first account.

PNB was the first truly Indian-owned bank and opened its first branch in Lahore in 1895. It quickly expanded into other regions, including Sindh and the North-West Frontier Province. Later more branches were opened in other parts of India, including Burma (now Myanmar).

In 1943, Lala Yodh Raj became head of PNB. Foreseeing the upcoming partition of India, he decided to move the bank’s headquarters from Lahore to Delhi in 1947, just before the partition. This move saved PNB from becoming part of Pakistan.

After India gained independence, PNB expanded by acquiring Bharat Bank Ltd. In 1951, PNB became the second-largest private sector bank of that time. However, in 1953, control of PNB shifted from the Punjabis to the Dalmia and Jain families when they bought a majority of the bank's shares. Lala Yodh Raj, the previous leader of the bank, left, and Shiriyans Prasad Jain took charge.

In 1969, under Prime Minister Indira Gandhi's leadership, fourteen major banks, including PNB, were nationalised. Notably, over the years, PNB has had the honour of managing accounts for prominent Indian leaders like Mahatma Gandhi, Jawaharlal Nehru, and Indira Gandhi, as well as for the Jallianwala Bagh Committee.

Below are some milestones in PNB history starting from its inception in 1894:
 

• 1894: PNB was founded on May 19, 1894, in Lahore (now Pakistan). It was the first Indian bank entirely owned by Indians.
• 1895: PNB began operations on April 12, 1895. Initially, it served local businesses and individuals in Lahore.
• 1904: The bank expanded beyond Lahore. It opened branches in Karachi and Peshawar.
• 1939: This was the first acquisition in PNB history when it acquired Bhagwan Dass Bank Limited.
• 1947: Following India's partition, PNB lost its Lahore headquarters but continued operations in Pakistan.
• 1960: PNB merged with Indo-Commercial Bank Limited.
• 1961: PNB acquired Universal Bank of India.
• 1963: The Government of Burma (now Myanmar) nationalised PNB’s branch in Rangoon. This led to a loss of overseas operations in Burma.
• 1965: After the Indo-Pak war, the Pakistani government seized Indian banks. PNB lost its Karachi branch and other offices in East Pakistan (now Bangladesh).
• 1969: The Indian government nationalised PNB along with 13 other major banks.
• 1978: PNB opened its first international branch in London.
• 1986: Due to a fraud scandal at PNB’s London branch, the RBI directed PNB to transfer the branch's operations to the State Bank of India.
• 1988: PNB rescued and acquired Hindustan Commercial Bank.
• 1993: PNB acquired the New Bank of India.
• 2003: PNB took over Nedungadi Bank, the oldest private bank in Kerala.
• 2008: PNB opened its first subsidiary, PNB International, in the UK.
• 2010: The bank entered a strategic joint venture with MetLife to offer life insurance services.
• 2017: PNB implemented core banking solutions (CBS) across all its branches.
• 2018: This is an important year in PNB history as the bank got involved in a high-profile $1.8 billion fraud case involving Nirav Modi.
• 2020: PNB merged with the Oriental Bank of Commerce and the United Bank of India. The merged entity became the second-largest public sector bank in India.
• 2021: The bank launched a PNB One mobile app to expand its digital banking services.
• 2024: PNB celebrated its 130th anniversary.