Credit Rating

Ref No: PSB/HO/Shares Cell / 46 /2026-27 September 10, 2026 BSE Limited, National Stock Exchange of India Ltd., Department of Corporate Services, Exchange Plaza, C – 1, Block – G, 25th floor, Phiroze Jeejeebhoy Towers, Bandra Kurla Complex, Bandra (East), Dalal Street, Fort, Mumbai – 400 051. Mumbai – 400 001. SYMBOL: PSB SERIES: EQ SCRIP ID : PSB SCRIP CODE : 533295 Dear Sir, Reg: Rating by CRISIL Ratings We hereby inform that CRISIL Ratings vide rating rationale dated September 09, 2026 has reaffirmed the Rating of the Bonds issued by the Bank as detailed hereunder: Instrument Type Rating / Outlook Infrastructure Bonds of Rs 3000 crore CRISIL AA/Stable (Reaffirmed) Tier II Bond Series XIV of Rs 500 crore CRISIL AA/Stable (Reaffirmed) Tier II Bond Series XVI of Rs 500 crore CRISIL AA/Stable (Reaffirmed) The Rating Rationale is enclosed for reference. We request you to take note of the above pursuant to Regulation 30 and 51 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Yours faithfully Saket Mehrotra Company Secretary Head Office: 21, Rajendra Place, New Delhi-110008 Corporate Office: NBCC Office Complex, Block 3, East Kidwai Nagar, New Delhi – 110023 Email: complianceofficer@psb.bank.in 10/09/2026, 11:16 Rating Rationale Rating Rationale September 09, 2026 | Mumbai Punjab and Sind Bank Rating reaffirmed at 'Crisil AA/Stable' Rating Action Regulator of the Name Of Instrument Rating Outstanding with Outlook instrument Rs.3000 Crore Infrastructure Bonds Crisil AA/Stable (Reaffirmed) SEBI Rs.500 Crore Tier II Bonds (Under Basel Crisil AA/Stable (Reaffirmed) SEBI III) Rs.500 Crore Tier II Bonds (Under Basel Crisil AA/Stable (Reaffirmed) SEBI III) Note: None of the Directors on Crisil Ratings Limited’s Board are members of rating committee and thus do not participate in discussion or assignment of any ratings. The Board of Directors also does not discuss any ratings at its meetings. 1 crore = 10 million Refer to Annexure for Details of Instruments & Bank Facilities Detailed Rationale Crisil Ratings has reaffirmed its ‘Crisil AA/Stable’ rating on Infrastructure Bonds and Tier-II Bonds (under Basel III) of Punjab & Sind Bank (P&SB). The rating continues to reflect the expectation of strong support from the Government of India (GoI) and the bank’s adequate capitalisation levels. The rating is constrained by the company’s relatively modest market position as well as its modest, albeit improving asset quality and earnings profile. Capital position is supported by regular fund infusion and expectation of strong support from the majority stakeholder, the Government of India (GoI). In fiscals 2021 and 2022, the bank received Rs 5,500 crore and Rs 4,600 crore, respectively, from the GoI. Capitalisation metrics maintain an improving trend with Tier 1 and overall capital adequacy ratio (CAR) improved to 16.56% and 17.61%, respectively, as on June 30, 2026, from 16.02% and 17.9%, a year earlier. As a result, the bank was able to build a sufficient buffer for its non-performing assets (NPAs), with a provision coverage ratio of 67.54% as on March 31, 2026 (72.2% as on March 31, 2025). Asset quality has seen sequential improvement with gross NPAs (GNPAs) at 2.21% as on June 30, 2026, compared with 2.4% as on March 31, 2026, and 3.38% as on March 31, 2025. This gradual improvement was driven by controlled slippages as well as write offs. The earnings profile remains modest exhibiting some volatility across years. Notably, the bank has been profitable since fiscal 2022. The profit after tax (PAT) had declined to Rs 595 crore in fiscal 2024, compared to Rs 1,313 crore in fiscal 2023, attributable to wage revision and, absence of any large recoveries and higher cost of funds. Subsequently, PAT recovered to Rs 1,016 crore in fiscal 2025 and further to Rs 1,323 crore in fiscal 2026, driven by higher net interest income. With increasing contribution towards retail, agriculture and micro small and medium enterprises (MSME), together referred to as RAM segments, adequate provisions and lower slippages, the bank is expected to maintain profitability over the medium term. Analytical Approach Crisil Ratings has evaluated the standalone business and financial risk profiles for Punjab and Sind bank. Crisil Ratings has also factored in expectation of support that Punjab and Sind bank is expected to receive from Government of India, both on an ongoing basis, and in the event of distress as GoI is the majority shareholder with 93.85% stake. Key Rating Drivers - Strengths Expectation of strong support from GoI The rating continues to factor in the expectation of strong government support, both on an ongoing basis and in case of distress. This is because GoI is both a majority shareholder in public sector banks (PSBs), and the guardian of India's financial system. Stability of the banking sector is of prime importance to the government, given its criticality to the economy, strong public perception of sovereign backing for PSBs, and severe implications of any PSB failure, in terms of political fallout, systemic stability, and investor confidence. The majority ownership creates a moral obligation on GoI to support PSBs, including P&SB. As part of the Indradhanush framework, the government had pledged to infuse at least Rs 70,000 crore in PSBs over fiscals 2015 to 2019, of which Rs 25,000 crore each was infused in fiscals 2016 and 2017. Furthermore, in October 2017, the government had outlined a recapitalisation package of Rs 2.11 lakh crore over fiscals 2018 and 2019. P&SB received Rs 785 crore in fiscal 2018 under this package. Also, GoI allocated Rs 70,000 crore in fiscal 2020, of which Rs 787 crore was received by P&SB. In fiscals 2021 and 2022, the bank received Rs 5,500 crore and Rs 4,600 crore, respectively, from GoI. Thus, over the past five fiscals, GoI has infused around Rs 11,672 crore into P&SB. https://www.crisilratings.com/mnt/winshare/Ratings/RatingList/RatingDocs/PunjabandSindBank_September 09_ 2026_RR_398646.html 1/8 10/09/2026, 11:16 Rating Rationale The bank’s Tier 1 and overall capital adequacy ratio (CAR) improved to 16.56% and 17.61%, respectively, as on June 30, 2026, from 16.02% and 17.9%, the bank has further received board approval for raising up to Rs 3,000 crore from qualified institutional placement. Key Rating Drivers - Weaknesses Modest market position The bank has a modest market position in the Indian banking sector as a mid-sized public sector bank, notwithstanding the healthy growth in its business volumes. Gross advances increased by 18.3% to Rs. 1,17,823 crore in fiscal 2026, driven by growth across the retail, agriculture and MSME segments, which expanded by 24.6%, 23.4% and 29.7%, respectively. Consequently, RAM advances accounted for nearly 59% of total advances as on March 31, 2026, with the balance comprising the corporate portfolio. The diversified loan mix and continued focus on RAM segments support granularity in the credit portfolio, while sustained business growth is expected to gradually strengthen the bank's market position over the medium term. Average resource profile The bank's resource profile remains average, with a CASA ratio that remains lower than that of larger banking peers. CASA deposits constituted 30.8% of total deposits as on March 31, 2026 and 30.1% as on June 30, 2026, compared with 31.4% for fiscal 2025 and 32.4% for fiscal 2024. The bank benefits from a geographically diversified deposit base, supported by its network of 1,654 branches as on March 31, 2026. Deposits grew by 12.4% in fiscal 2026 to Rs 1,45,829 crore as on March 31, 2026, and further grew by 12.16% to Rs 1,47,130 crore as on June 30, 2026. The bank continues to strengthen its deposit franchise through branch expansion, digitalisation initiatives and productivity enhancement measures. The cost of funds improved to 5.34% as on March 31, 2026 from 5.64% a year earlier and remained broadly stable at 5.33% during the first quarter [Showing first 8,000 characters — download PDF for full document]