Punjab National Bank Faces Governance Compliance Gaps in FY26 Secretarial Audit

New Delhi, May 2026: Punjab National Bank (PNB) has reported several corporate governance and board composition gaps in its Annual Secretarial Compliance Report for the financial year ended March 31, 2026.

The report, issued by Agarwal S. & Associates, Company Secretaries, was prepared under Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Board Composition Non-Compliance Highlighted

The report noted that the bank experienced periodic non-compliance with SEBI LODR board composition norms during the review period due to multiple vacancies.

Key observations include:

The Board did not have the required 50% non-executive directors from:
- June 6, 2025 to August 28, 2025
- November 24, 2025 onwards
The position of an Independent Woman Director remained vacant from April 1, 2025 to August 28, 2025.
The Board lacked the required proportion of independent directors for multiple periods during FY26.

PNB clarified that appointments of directors are made by the Government of India under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, and the bank has regularly requested appointments from the Department of Financial Services.

Delay in Filling Independent Director Vacancies

The report highlighted that vacancies in independent directors were not filled within the prescribed timeline, resulting in non-compliance with Regulation 17(1E) of SEBI LODR.

These vacancies also impacted the composition of various board-level committees.

Vacancies in Government-Nominated Directors

Several positions requiring nomination by the Central Government remained vacant during FY26, including:

Director representing workmen employees
Director representing non-workmen employees
Chartered Accountant Director
Multiple Government-nominated positions

One shareholder director position also remained vacant from June to August 2025 before being filled within the regulatory timeline.

Audit Committee Became Non-Functional Temporarily

Due to board vacancies:

The Audit Committee became non-functional from June 6, 2025 to August 28, 2025.
The committee lacked a member with financial expertise from April 1, 2025 to August 28, 2025.
During this period, the Board discharged the committee’s functions as per regulatory provisions.

The report also noted non-compliance with RBI governance guidelines regarding committee chairperson roles.

Nomination & Remuneration Committee Irregularities

The Nomination and Remuneration Committee:

Became non-functional during parts of FY26
Did not hold any meeting during the financial year

This resulted in non-compliance with Regulation 19 of SEBI LODR.

Risk Management Committee Issues

The Risk Management Committee also faced compliance gaps due to non-availability of members and lack of majority non-executive directors during parts of the review period.

Bank’s Response

PNB stated that it has consistently approached the Department of Financial Services and Ministry of Finance regarding pending board appointments. The bank also informed the Reserve Bank of India about governance constraints arising from board vacancies.

Despite the governance gaps, the report confirmed that the bank complied with SEBI regulations in other areas during the review period.