CHAPTER 1

INTRODUCTION

GENERAL INTRODUCTION

BANKING

Banking, the business of providing financial services to consumers and

businesses. The basic services a bank provides are checking accounts, savings

accounts and time deposits that can be used to save money for future use; loans

that consumers and businesses can use to purchase goods and services; and

basic cash management services such as check cashing and foreign currency

exchange.

TYPES

Four types of banks specialize in offering these basic banking services:

1) commercial banks,

2) savings and loan associations,

3) savings banks, and

4) credit unions.

A broader definition of a bank is any financial institution that receives, collects,

transfers, pays, exchanges, lends, invests, or safeguards money for its

customers. This broader definition includes many other financial institutions that

are not usually thought of as banks . These institutions include finance

companies, investment companies, investment banks, insurance companies,

1
pension funds, security brokers and dealers, mortgage companies, and real

estate investment trusts.

PURPOSE

Banking services serve two primary purposes. First, by supplying customers with

the basic mediums-of-exchange (cash, checking accounts, and credit cards),

Second, by accepting money deposits from savers and then lending the money

to borrowers, banks encourage the flow of money to productive use and

investments. This in turn allows the economy to grow.

Enabling the flow of money from savers to investors is called financial

intermediation, and it is extremely important to a free market economy.

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 OBJECTIVES OF THE STUDY

The vital objectives of this project are-

 To enhance and sharpens skill.

 To get awareness about changing business environment in banking.

 To understand the retail banking process.

3
 INDUSTRY PROFILE

ORIGIN AND DEVELOPMENT OF INDUSTRY

Banking in India

Banking in India originated in the first decade of 18th century. The General Bank

of India came into existence in 1786. This was followed by Bank of Hindustan.

Both these banks are now defunct. The oldest bank in existence in India is the

State Bank of India being established as "The Bank of Bengal" in Calcutta in

June 1806. A couple of decades later, foreign banks like Credit Lyonnais started

their Calcutta operations in the 1850s. At that point of time, Calcutta was the

most active trading port, mainly due to the trade of the British Empire, and due to

which banking activity took roots there and prospered. The first fully Indian

owned bank was the Allahabad Bank, which was established in 1865.

By the 1900s, the market expanded with the establishment of banks such as

Punjab National Bank, in 1895 in Lahore and Bank of India, in 1906, in Mumbai -

both of which were founded under private ownership. The Reserve Bank of India

formally took on the responsibility of regulating the Indian banking sector from

1935. After India's independence in 1947, the Reserve Bank was nationalized

and given broader powers.

The banking in India was controlled and dominated by the presidency banks,

namely, the Bank of Bombay, the Bank of Bengal, and the Bank of Madras -

which later on merged to form the Imperial Bank of India, and Imperial Bank of
4
India, upon India's independence, was renamed the State Bank of India. The

presidency banks were like the central banks and discharged most of the

functions of central banks. They were established under charters from the British

East India Company. The exchange banks, mostly owned by the Europeans,

concentrated on financing of foreign trade. Indian joint stock banks were

generally under capitalized and lacked the experience and maturity to compete

with the presidency banks, and the exchange banks. There was potential for

many new banks as the economy was growing.

Under these circumstances, many Indians came forward to set up banks, and

many banks were set up at that time, and a number of them set up around that

time continued to survive and prosper even now like Bank of India and

Corporation Bank, Indian Bank, Bank of Baroda, and Canara Bank

5
 GROWTH AND PRESENT STATUS OF THE INDUSTRY

By the 1960s, the Indian banking industry has become an important tool to

facilitate the development of the Indian economy. At the same time, it has

emerged as a large employer, and a debate has ensued about the possibility to

nationalize the banking industry. Indira Gandhi, the-then Prime Minister of India

expressed the intention of the GOI in the annual conference of the All India

Congress Meeting in a paper entitled "Stray thoughts on Bank Nationalisation."

The paper was received with positive enthusiasm. Thereafter, her move was swift

and sudden, and the GOI issued an ordinance and nationalised the 14 largest

commercial banks with effect from the midnight of July 19, 1969. Jayaprakash

Narayan, a national leader of India, described the step as a "masterstroke of

political sagacity." Within two weeks of the issue of the ordinance, the Parliament

passed the Banking Companies (Acquition and Transfer of Undertaking) Bill, and

it received the presidential approval on 9th August, 1969.

A second dose of nationalisation of 6 more commercial banks followed in 1980.

The stated reason for the nationalisation was to give the government more

control of credit delivery. With the second dose of nationalisation, the GOI

controlled around 91% of the banking business of India.

After this, until the 1990s, the nationalised banks grew at a pace of around 4%,

closer to the average growth rate of the Indian economy.

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Liberalisation

In the early 1990s the then Narasimha Rao government embarked on a policy of

liberalisation and gave licenses to a small number of private banks, which came

to be known as New Generation tech-savvy banks, which included banks such

as UTI Bank (the first of such new generation banks to be set up), ICICI Bank

and HDFC Bank. This move along with the rapid growth in the economy of India,

kick started the banking sector in India, which has seen rapid growth with strong

contribution from all the three sectors of banks, namely, government banks,

private banks and foreign banks.

The next stage for the Indian banking has been setup with the proposed

relaxation in the norms for Foreign Direct Investment, where all Foreign Investors

in banks may be given voting rights which could exceed the present cap of

10%,at present it has gone up to 49% with some restrictions.

The new policy shook the Banking sector in India completely. Bankers, till this

time, were used to the 4-6-4 method (Borrow at 4%; Lend at 6%; Go home at 4)

of functioning. The new wave ushered in a modern outlook and tech-savvy

methods of working for traditional banks. All this led to the retail boom in India.

People not just demanded more from their banks but also received more.

Current scenario

Currently (2008), overall, banking in India is considered as fairly mature in terms

of supply, product range and reach. Even though reach in rural India still remains

a challenge for the private sector and foreign banks. Even in terms of quality of

assets and capital adequacy, Indian banks are considered to have clean, strong

7
and transparent balance sheets-as compared to other banks in comparable

economies in its region.

Indian economy is expected to be strong for long time-especially in its services

sector. The demand for banking services-especially retail banking, home loans

and investment services are expected to be strong.

In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase its

stake in Kotak Mahindra Bank (a private sector bank) to 10%. This is the first

time an investor has been allowed to hold more than 5% in a private sector bank.

Currently, India has 88 scheduled commercial banks (SCBs) - 28 public sector

banks (that is with the Government of India holding a stake), 29 private banks

(these do not have government stake) and 31 foreign banks.

They have a combined network of over 55,000 branches and 17,000 ATMs.

According to a report by ICRA Limited, a rating agency, the public sector banks

hold over 75 percent of total assets of the banking industry, with the private and

foreign banks holding 18.2% and 6.5% respectively.

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Total Income Wise Listing1

Total Net
No.of
Bank Name Number of Branches Income(Rs Profit
Employees
Mn) (Rs Mn)
State Bank of India 9143 198774 431836 44067
ICICI Bank Limited 557 25479 187676 25401
Punjab National Bank 4066 58047 108153 14393
Canara Bank 2532 46893 100890 13432
Bank of Baroda 2687 38737 82917 8270
Bank of India 2563 41808 82131 7014
Industrial Development 173 4548 66612 5609
Bank of India Limited
Union Bank of India 2095 25421 64888 6752
Central Bank of India 3143 37241 59164 2574
HDFC Bank Limited 515 14878 55993 8708
Indian Overseas Bank 1523 24178 51345 7834
UCO Bank 1749 24510 48183 1966
Oriental Bank of Commerce 1161 14962 46717 5572
Syndicate Bank 1897 24624 46420 5365
Allahabad Bank 1932 18742 43739 7061

1
Source : http://www.dnb.co.in/topbanks/company_listing.asp?q=Total_Income
9
 FUTURE OF THE INDUSTRY

A healthy banking system is essential for any economy striving to achieve good

growth and yet remain stable in an increasingly global business environment.

The Indian banking system, with one of the largest banking networks in the

world, has witnessed a series of reforms over the past few years like the

deregulation of interest rates, dilution of the government stake in public sector

banks (PSBs), and the increased participation of private sector banks. The

growth of the retail financial services sector has been a key development on the

market front. Indian banks (both public and private) have not only been keen to

tap the domestic market but also to compete in the global market place. New

foreign banks have been equally keen to gain a foothold in the Indian market.

The momentum in credit growth has been maintained during 2005-06 due to two

factors: The corporate sector has stepped up its demand for credit to fund its

expansion plans; there has also been a growth in retail banking. However, even

as the opportunities increase, there are some issues and challenges that Indian

banks will have to contend with if they are to emerge successful in the medium to

long term. This report discusses these issues and challenges -- both intrinsic and

external, such as

Risk management and Basel II

The future of banking will undoubtedly rest on risk management dynamics. Only

those banks that have efficient risk management system will survive in the

market in the long run. The effective management of credit risk is a critical
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component of comprehensive risk management essential for long-term success

of a banking institution.

Although capital serves the purpose of meeting unexpected losses, capital is not

a substitute for inadequate decontrol or risk management systems. Coming years

will witness banks striving to create sound internal control or risk management

processes.

With the focus on regulation and risk management in the Basel II framework

gaining prominence, the post-Basel II era will belong to the banks that manage

their risks effectively. The banks with proper risk management systems would not

only gain competitive advantage by way of lower regulatory capital charge, but

would also add value to the shareholders and other stakeholders by properly

pricing their services, adequate provisioning and maintaining a robust financial

structure.

‘The future belongs to bigger banks alone, as well as to those which have

minimised their risks considerably.’

Consolidation

Consolidation, which has been on the counter over the last year or so, is likely to

gather momentum in the coming years. Post April 2009, when the restrictions on

operations of foreign banks will go, the banking landscape is expected to change

dramatically. Foreign banks, which currently account for 5% of total deposits and

8% of total advances, are devising new business models to capture the Indian

market. Their full-fledged entry is expected to transform the business of banking

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in many ways, which would be reflected in terms of greater breadth of products,

depth in delivery channels and efficiency in operations.

Thus Indian banks have less than three years to consolidate their position.

Despite the stiff resistance from certain segments, consolidation holds the key to

future growth. This view is underpinned by the following:

► Owing to greater scale and size, consolidation can help save costs and

improve operational efficiency.

► Banks will also have to explore different avenues for raising capital to meet

norms under Basel-II

► Owing to the diversified operations and credit profiles of merging banks,

consolidation is likely to serve as a risk-mitigation exercise as much as a growth

engine.

Though there is no confirmation yet, speculative signals arising from the market

point to the prospect of consolidation involving banks such as Union Bank of

India, Bank of India, Bank of Baroda, Dena Bank, State Bank of Patiala, and

Punjab and Sind Bank. Further, the case for merger between stronger banks has

also gained ground — a clear deviation from the past when only weak banks

were thrust on stronger banks. There is a case being made for mergers between

banks with a distinct geographical presence coming together to leverage their

respective strengths.

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GLOBALIZATION/ OVERSEAS EXPANSION

Growing integration of economies and the markets around the world is making

global banking a reality. The surge in globalization of finance has already begun

to gain momentum with the technological advancements which have effectively

overcome the national borders in the financial services business. Widespread

use of internet banking will widen frontiers of global banking, and make

marketing of financial products and services on a global basis possible. In the

coming years globalization will spread further on account of the likely opening up

of financial services under WTO. India is one of the 104 signatories of Financial

Services Agreement (FSA) of 1997. This gives India’s financial sector including

banks an opportunity to expand their business on a quid pro quo basis.

As per Indian Banks' Association report ‘Banking Industry Vision 2010’, there

would be greater presence of international players in Indian financial system and

some of the Indian banks would become global players in the coming years. So,

the new mantra for Indian banks is to go global in search of new markets,

customers and profits.

TECHNOLOGY

There is an imperative need for not mere technology upgradation but also its

integration with the general way of functioning of banks to give them an edge in

respect of services provided to their constituents, better housekeeping,

optimizing the use of funds and building up of MIS for decision making, better

management of assets & liabilities and the risks assumed which in turn have a

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direct impact on the balance sheets of banks as a whole. Technology has

demonstrated potential to change methods of marketing, advertising, designing,

pricing and distributing financial products and services and cost savings in the

form of an electronic, self-service product delivery channel. These challenges call

for a new, more dynamic, aggressive and challenging work culture to meet the

demands of customer relationships, product differentiation, brand values,

reputation, corporate governance and regulatory prescriptions. Technology holds

the key to the future success of Indian Banks.

Internet, wireless technology and global straight-through processing have

created a paradigm shift in the banking industry. The explosive growth of both the

Internet and mobile and wireless technology is revolutionizing the way the

financial industry conducts business. The overall wireless technology market is

expected to grow profoundly in the coming years.

REGULATIONS

The RBI's approval for banks to raise funds abroad through innovative capital

instruments holds great significance. Such fund-raising, which includes

preference shares, will, however, not just substitute equity; it could have

unintended consequences on the strategies of banks and their profitability. While

the cost of raising monies through such instruments is likely to be higher (close to

10 per cent), the consequent higher leverage on equity funds is likely to result in

expansion of return on net worth. This is because the same amount of capital

supports a higher volume of business, generating higher profits.

Banks are likely to be able to raise long-term preference shares at coupon rates
14
between six per cent and eight per cent. The positive impact on bank profitability

could thus be significant.

Preference capital can be used as the currency for acquisition. The advantage

for public sector banks is that they no longer need to bother about government

stake falling below 51 per cent. Banks such as Dena Bank, Oriental Bank of

Commerce and Andhra Bank are most likely to benefit from this move.

SKILLED MANPOWER

There will be a sea change for employees too. Secure jobs will be replaced by

contractual appointments, for a specified period of time. The unions will merge

into the shadows and bank managements will turn effective. As a result there will

be swifter turn over of personnel in banks. But at the same time, skilled

personnel from other disciplines will enter banks in increasing numbers.

Factors like skills, attitudes and knowledge of the human capital play a crucial

role in determining the competitiveness of the financial sector. The quality of

human resources indicates the ability of banks to deliver value to customers.

Capital and technology are replicable but not the human capital which needs to

be valued as a highly valuable resource for achieving that competitive edge.

Business model, which comprises a comprehensive range of business solutions

delivered through a unique balance of portfolio and relationship management

must be incorporated.

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FUTURE CHALLENGES & SUGGESTIONS

 Competition

 Challenges

 Customer Retention

 Globalization

 Shrinking Margin

SUGGESTIONS

 Strong In-house research & market Intelligence

 Focused marketing- Focus on region-specific campaigns rather than

national media campaigns

The growth of the retail financial services sector has been a key development on

the market front. Indian banks (both public and private) will not only be keen to

tap the domestic market but also to compete in the global market place. New

foreign banks will be equally keen to gain a foothold in the Indian market.

16
 ORIGIN OF THE ORGANIZATION

Punjab National Bank was established in the year 1895 found by Punjab Kesari

Shri Lala Lajpat Rai at Lahore (now in Pakistan) as a joint stock company. After

the partition in 1947, the bank grew steadily with its presence at the important

centers and metropolitan cities of the country and emerged as one of the big five

Indian banks during pre-nationalized period.

The bank was nationalized in 1969 along with 13 other banks. Subsequently, in

1993 it took over the New Bank of India, another bank that was nationalized in

1980. In 2003 the Nedungadi Bank Ltd., a south based private sector bank also

merged the bank. Thus the bank, which previously had its main business area

around the Indo-Gangetic belt and major metros, could ensure its remarkable

presence in the entire country.

Presently, it is the second largest bank of the country rendering a wide variety of

banking services (corporate/personal/industrial finance/agriculture

finance/financing of trade and commerce/international banking). It has a broad

clientele base like Multi National Corporation, Indian Conglomerates,

medium/small industrial units and NRI’s. As a bank with global standard, it was

ranked 416th among the biggest bank in the world by the banker’s Almanac in

2002.The bank is member of the SWITY (society for Worldwide International

Financial Telecommunication) and has strong correspondent relationship with the

leading international banks. Continued financial sector reforms led to greater

17
alignment of financial sector to the competition business environment.

Operational and supervisory practices in the sector have been progressively

matching international standards. In the process Indian banking system is

becoming increasingly mature in terms of transformation of business process and

risk management. The head office of the Bank is at, Bhikaji Cama Place, New

Delhi.

The bank also has subsidiaries like PNB Gilts Ltd., PNB Housing Finance Ltd.,

PNB Capital Services Ltd., PNB Assets Management Co .Ltd.

18
 GROWTH AND DEVELOPMENT OF THE ORGANIZATION

To evolve and position the bank as a world class, progressive, cost-effective and

customer friendly institution providing comprehensive financial and related

services: integrating frontiers of technology and serving various segment of

society especially the weaker section of the society: committed to excellence in

serving the public and also excelling in the corporate values.

Corporate excellence emanate from good corporate governance exercised by

adopting standard of transparency, accountability, professionalism, social

responsiveness, and ethical business practices with this in view, the has been

making efforts for adopting the best practices. The bank commitment towards

corporate governance is to bestow greater transparency and openness in the

management and to ensure best performance by staff atall the levels to

maximize the operational efficiency. Adopting the corporate governance as a

work ethos, the bank is committed to enhancing the stakeholders value.

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 PRESENT STATUS OF THE ORGANIZATION

With its presence virtually in all the important centers of the country, Punjab

National Bank offers a wide variety of banking services which include corporate

and personal banking, industrial finance, agricultural finance, financing of trade

and international banking. Among the clients of the Bank are Indian

conglomerates, medium and small industrial units, exporters, non-resident

Indians and multinational companies. The large presence and vast resource

base have helped the Bank to build strong links with trade and industry.

Punjab National Bank is serving over 3.5 crore customers through 4540 Offices

including 421 extension counters - largest amongst Nationalized Banks.

Punjab National Bank with 112 year tradition of sound and prudent banking is

one among 300 global companies and seven Indian companies which are

expected to emerge as challengers to World’s leading blue chip companies.

While among top 1000 world banks, “The Banker”, the leading magazine in

London, has placed PNB at the 248th position, the bank features at 1308th

position among Forbe’s Global 2000 list of global giants and fast growing

companies.

At the same time, the bank has been conscious of its social responsibilities by

financing agriculture and allied activities and small scale industries (SSI).

Considering the importance of small scale industries bank has established 31

specialised branches to finance exclusively such industries.

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Strong correspondent banking relationship which Punjab National Bank

maintains with over 200 leading international banks all over the world enhances

its capabilities to handle transactions world-wide. Besides, bank has Rupee

Drawing Arrangements with 15 exchange companies in the Gulf and one in

Singapore. Bank is a member of the SWIFT and over 150 branches of the bank

are connected through its computer- based terminal at Mumbai. With its state-of-

art dealing rooms and well-trained dealers, the bank offers efficient forex dealing

operations in India.

The bank has been focusing on expanding its operations outside India and has

identified some of the emerging economies which offer large business potential.

Bank has set up representative offices at Almaty: Kazakhistan, Shanghai: China

and in London. Besides, Bank has opened a full fledged Branch in Kabul,

Afghanistan.

Keeping in tune with changing times and to provide its customers more efficient

and speedy service, the Bank has taken major initiative in the field of

computerization. All the Branches of the Bank have been computerized. The

Bank has also launched aggressively the concept of "Any Time, Any Where

Banking" through the introduction of Centralized Banking Solution (CBS) and

over 2409 offices have already been brought under its ambit.

PNB also offers Internet Banking services in the country for Corporate as well as

individuals. Internet Banking services are available through all Branches of the

Bank networked under CBS. Providing 24 hours, 365 days banking right from the

PC of the user, Internet Banking offers world class banking facilities like anytime,
21
anywhere access to account, complete details of transactions, and statement of

account, online information of deposits, loans overdraft account etc. PNB has

recently introduced Online Payment Facility for railway reservation through

IRCTC Payment Gateway Project and Online Utility Bill Payment Services which

allows Internet Banking account holders to pay their telephone, mobile,

electricity, insurance and other bills anytime from anywhere from their desktop.

Another step taken by PNB in meeting the changing aspirations of its clientele is

the launch of its Debit card, which is also an ATM card. It enables the card holder

to buy goods and services at over 99270 merchant establishments across the

country. Besides, the card can be used to withdraw cash at more than 25000

ATMs, where the 'Maestro' logo is displayed, apart from the PNB's over 1094

ATMs and tie up arrangements with other Banks

Latest Quarterly/Half yearly Income statement2

As on(Months) 31-Mar-08(3) 31-Mar-07(3) % Change

Interest Income 38797.90 31944.00 21.46
Other Income 5372.10 5183.90 3.63
Total Income 44170.00 37127.90 18.97
Interest Expenses 23625.10 17713.70 33.37
Other Expenses 8277.10 10590.70 -21.85
Provision & Contingencies 1676.70 6126.90 -72.63
OPBDT 10591.10 2696.60 292.76
Depreciation 0.00 0.00 --
Extra-Ordinary / Cash Adjustment 0.00 0.00 --
Provision for Tax 5153.50 319.60 1512.48
After tax Profit 5437.60 2377.00 128.76
Equity Capital 3153.00 3153.00 0.00
Reserves 104673.50 98263.10 6.52

22
source:http://www.dnb.co.in/topbanks/company_listing.asp?q=Total_Income
22
 FUTURE PLANS OF THE ORGANIZATION

To provide excellent professional services and improve its position as a leader in

the field of finance and related service, build and maintain a team of motivated

and committed workforce with high work ethos; uses latest technology aimed at

customer satisfaction and act as effective catalyst for socio-economic

development.

The bank is committed to its corporate mission to provide excellent professional

services and improve its position as leader in the field of financial and related

services, build, maintain a team of motivation and committed workforce with high

work ethos, use latest technology, aimed at customers and act as an effective

catalyst of socio-economic development.

Punjab National Bank has focused quite a bit in rural areas, which is actually

needed for our country. Their ATMs are given the facility of English, National

Language Hindi and the local language of the state. They also provide mobile

top-up facility.

23
FUNCTIONAL DEPARTMENTS OF THE ORGANIZATION

HEAD OFFICE

ZONAL OFFICES

REGIONAL OFFICES

BRANCHES
Executive cards of the organization. They are Executive Director, General

Manager (GM), Deputy General Managers (DGM), assistant General Managers

(AGM), Chief Managers (CM), Managers and other officers are in the hierarchy

at the head office level functioning in various Departments.

The Zonal Manager and regional Managers head the Zonal Offices and Regional

Officers respectively who are assisted by other down in the hierarchy. The

Branch is headed by AGM\CM\ Senior Managers\Managers depending upon the

size of the Branch activities and rendering of satisfactory customer service.

The bank has a very good system of delegating power to the different

functionaries in the hierarchy to facilitate speedy decision- making process even

up to the branch Level.

24
2.6 Organization chart3

Mr. O.P Arora

(Branch Manager)

Mr. Rajbir Singh

(Manager)

Mr. C.S. Kshatriya

(Dy. Manager)

Mr. Rajesh Mr. S.K Jindal

Menon (C.T.O)
(C.T.O)

Mr. Ajit Singh Mr. J.D Mittal

Rana (Clerk)
(Clerk)

PRODUCT AND SERVICE PROFILE OF THE ORGANIZATION

3
Source : Bank administration
25
Presently, it is the second largest bank of the country rendering a wide variety of

banking services:

 CENTRALISED BANKING SOLUTION (CBS)

CBS, an inter-branch networking and data-sharing platform helps

to operate account from any city in India having CBS networked

branches. Changing status from Customer of the Branch’ to ‘Customer of the

Bank’, presently, there are over 2,616 CBS networked brandies in 820 cites,

 NRI’S & TOURISTS

Currency exchange services are being provided by our 68

Exchange Bureau’s spread throughout the country

 ONLINE TAX PAYMENT

PNB provides the facility of online payment of service tax, excise

duty, DGFT, custom duty & all charges urlderMCA2l

 CASH MANAGEMENT SERVICE (CMS)

PNB’s CMS facilitates management of receivables and payments

in technology driven environment, ensuring availability of funds at

reduced cost, helping reconciliation at multi location accounts

besides providing customized MIS.

 MUTUAL FUNDS & INSURANCE

26
The bank has tied-up with Principal Financial Group for providing Mutual Funds

and Insurance services & also tied up for distribution & marketing of UTI Mutual

Funds.

 NRI SERVICES

NRE, FCNR, RFC, NRO Deposit a/c investment Management &

Housing Loan facilities for NRI’s.

 FOREIGN EXCHANGE

PNB has 150 branches authorized for handling foreign exchange

business and these branches have been provided with SWIFT

connectivity to ensure faster realisation of funds.

 e-MONEYINDIA

Send money to the loved ones in India through PNB’s e-

MoneyIndia service. Draft delivery across 4,038 locations and

Bank Credit to over 2,500 branches in India.

 ONLINE RAILWAY RESERVATION/AIR TICKET BOOKING

Say goodbye to long queues. PNB offers online booking &

information through IRCTC payment gateway. Just click and

travel comfortably.

 DEPOSITORY SERVICE

27
PNB Depository service provides the facility of having shares & securities in

Demat form & executes transactions of sales & purchase hassle free

electronically.

 LOCKERS

Now, customer can relax with assurance of having your locker at

the PNB branch nearest to their home.

 CUSTOMER CARE FACILITY

All the banking queries and problems are just a call away! PNB

presents 24 hr. customer care facility. Call at toll free no. at 1800

180 2222 from MTNL/BSNL or 0124-2340000 from other no.s

 PNB GOLD COIN

PNB gives opportunity to dazzle the well wishers, patrons,

partners and acquaintances with the mystical charisma of PNB’s

999.9 fineness pure 24-carat gold coins and to convey the true

value of treasured relationship. Enjoy guarantee of purity & weight of hallmarked

gold coins.

 ELECTRONIC CLEARING SERViCE (ECS) & ELECTRONIC FUNDS

TRANSFER (EFT)

Avail ECS for quick movement of funds in a paperless mode & EFT to ensure an

expeditious transfer of funds by using electronic media.

28
  WEALTH MANAGEMENT SERVICE

PNB provides customized financial advisory services for

individuals that includes Mutual Funds, insurance, Retirement

Planning, Tax planning, & Debt Management to customers for wealth

maximization

 ONLINE BILL PAYMENT

No more queues to pay your bills. Now pay telephone, mobile,

electricity, insurance & several other bills 24 hours, 365 days,

from the desktop.

 LOANS

 CAR LOAN/2 WHEELER LOAN

Drive dream car/bike home. PNB gives loan for the purchase of

new/old car, van or jeep, new bike at very attractive interest rates

with a convenient repayment period.

 LOAN AGAINST JEWELLERY

Loan against Gold & Jewellery for individuals/business

enterprises, both for business & personal needs.

 TRADERS LOAN

Maximize business turnover with PNB traders loan with minimum

paper work and attractive rate of interest, for whole sellers,

29
dealers, distributors, individuals, firms, registered cooperative societies &

companies. Loans also available for purchase of shop /showroom.

 HOUSING LOAN

Bring own dream home to life. Avail ‘flexi’ housing loan and have

the advantage of substantial savings on the interest component.

Insurance cover for home loan borrowers available.

 PERSONAL LOANS

A scheme to meet all types of personal needs, for

permanent/confirmed employees/Defence Personnel and

Professionally Qualified Doctors.

 CORPORATE LOANS

Corporate can expand & diversify with user friendly Corporate

Loans Products Working Capital, Term Loan, Bank Guarantee,

Letter of Credit & others.

 EDUCATIONAL LOAN

Avail “Sarvottam Shiksha & Vidyalakshyapurti” schemes for

studies In India & abroad and ensure a great career for child.

 PNB GRAMIN CHIKITSAK

30
Scheme for financing qualified medical practitioners for setting up clinics in rural

areas at concessional rate of interest.

 LOAN TO PENSIONERS

PNB values the traditions of India by giving special benefits to the

senior citizens.

 LOANS TO WOMEN

PNB’s “Mahila Sashaktikaran Abhiyaan” & “Mahila Samridhi

Yojana” give special benefits to women customers that help in

building their confidence & self-esteem.

 DEPOSITS

 PNB MET LIFE

Delighting depositors with life insurance by extending the facility

of insurance cover (death only) to all Saving Fund & Current

Account (Individuals) holders.

 PNB VIDYARTHI ACCOUNT

Empowering the young generation with a zero balance account

for students with overdraft facility.

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  TOTAL FREEDOM SALARY ACCOUNT

Discover the freedom of flexibility with PNB’s Total Freedom

Account. A zero balance account for employees having salary

account in the bank, with overdraft facility.

 PNB TAX SAVER

PNB offers term deposit scheme to avail tax benefit under Sec

80(C)2 (xxi) of income Tax Act.

 PNBMITRA

PNB offers no frill saving account for financial inclusion -

32
 MARKET PROFILE OF THE ORGANIZATION

Today, PNB operates 4,070 branches and 443 service counters across the

country, consolidating its position as one of the top nationalized banks of India.

PNB has been ranked at395Th position amongst the top 1000 global banks by

the prestigious international publication The Banker.

Like other scheduled banks in India, the PNB also comes under the guidance of

the Reserve Bank of India (RBI) and as a government establishment, it has to

follow directions of the government. Two directives, one from the Reserve Bank

of India and the other from India’s Department of Official languages are key in

this context. In 1985, the Department of Official Languages mandated that all

electronic equipment used in ministries and departments of the government and

their attached and subordinate offices would need to be bilingual. That is, they

should be able to handle both Hindi and English. By the year 2000, the Reserve

Bank of India had mandated that banks should have a clear IT plan that should

be implemented: that at least 7O percent of all branches should be

computerized.

With technology emerging as a key driver of business growth, the bank has taken

a number of IT initiatives to provide its large clientele spread all across the

country with the best of technology while retaining the all- essential human

warmth. Its core banking system (CBS) already acts as a single data bank, a

backbone to 2,108 service outlets with internet banking services spread over 28

33
states in the country. This deployment has lent PNB the status of being the

largest core banking system in Asia.

The bank has 676 ATMs and also coordinates with the MITR group of six banks

with 2,200 ATMs. PNB is a member of Institute Development and Research in

Banking Technology (IDRBT)-sponsored National Financial Switch (NFS) for

mutual ATM transactions. NFS at present has 18 banks and a pool of 6,197

ATMs. PNB has also pioneered the cheque truncation system in India. Other

software fuelling the systems are instant fund transfer mechanism, data

warehouse for decision control and MIS and risk management software based on

Basel II guidelines set by the Bank for International Settlements.

About 77 percent of its business is connected through leased lines, ISDN and

VPN. Other services such as mobile banking utility bill payments, funds transfer,

e-commerce and CRM through mobile shall be introduced for the PNB branches

including setting up a network operating centre (NOC) to monitor the CBS

network.

RELATIVE PERFORMANCE

⇒ Spreads: PNB has the best margins in the banking sector.

⇒ Return Parameters: On both the return parameters i.e. return on average

asset and return on average networth, PNB is close to the average of the

peer set.

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 ⇒ Asset Quality: PNB’s asset quality as measured by the net NPA ratio is

on the higher side. It is just better than the largest scheduled commercial

bank i.e. SBI.

⇒ Coverage Ratio: The provision coverage ratio third best after HDFC Bank

and OBC in our set of banks.

⇒ Operating Efficiency: PNB’s cost to income ratio is higher than the

average of the peer set. However, we believe that once the technological

platforms are put in place, the bank will be able to bridge the gap with the

numero uno in this regard.

CHART FOR RELATIVE PERFORMANCE OF BANKS2

35
 CHAPTER 3

DISCUSSION ON TRAINING

STUDENT’S WORK PROFILE (ROLE AND RESPONSIBILITY)

I worked as a management trainee in Punjab National Bank, Mukundpur Branch,

I was responsible for multiple type of work involved in banking which our services

best in the industry.

♦ Customers Service

This is the counter where customer interacts with the bank personnel firstly.

Here, I got a chance to know about the different problems of the customers

visiting the bank. I helped them to solve their different problems which are as

follows:-

 Query solutions:

Solving their Different queries such as:-

 Document required for new a/c

 Documents for loan

 Requirement for new ATM card

 Providing different forms for different purposes

 Documents for Micro finance

 New account opening:

To help the customer in opening the new account by filling up their forms along

with scrutinizing their documents. This includes checking of residence proof,

36
address proof and witness required. Then generating account number and

customer Id in the presence of banking employee.

♦ Frills Account

They are also known as PNB MITR account. These are the zero balance account

specially created for these poor peoples. This account has the facility to avail the

overdraft limit of up to Rs.3,000. The branch has opened 40,000 accounts by 30

June.

♦ Cheque clearing

This includes checking the cheque details like date of cheque, account number of

the customer, signature of the customer.

♦ Loan department

It includes clearing of various types of loans including personal loans, vehicle

loan, home loan etc. In the branch I got a chance to visit the working site of the

loan applicant with the bank personnel.

37
 DESCRIPTION OF LIVE EXPERIENCE

The first day in this industry made me feeling like in a heaven because this was

my first step toward my dream and this was a new thing for me, this was practical

exposure because till now I read only in books about banking ,first day when I

reached bank premises at 9:30 am ,I saw crowd of over 100 people waiting

outside the bank .

I usually worked under the supervision and direction of the asst. manager

Mr.Rajveer Singh. He gave me different responsibilities as per the need, and at

the end of the day I had to report the full day’s work to him.

38
Procedural Chart for new account opening:-

New customers at help desk

Documents Provided

Documents checking
If Yes
If No
Documents as per rule

Fill up the form and Ask for the necessary

send for verification documents

Verification by
If approved Mr.Rajveer If Not

Customer ID & A/C Application rejected

No. generated

Pass Book, ATM Card &

Check Book issued

39
 STUDENT’S CONTRIBUTION TO ORGANIZATION

As a Management Trainee I worked in all of teams, as a team member my role

was such as follows:-

 Marketing

To collect data from the:

 Local community

 their existing customers

 NGOs and SHG(Self Help Groups).

 Cheque clearance

It includes:

 Inward cheque clearance

 Outward cheques

 Verifying Cheque details like date of cheque, a/c no. of the customer,

signature of the customer, cutting on cheque if any.

 Loan clearance

It includes:-

 Document verification

 Site visit with bank employee for Micro loans

 Clearance of various types of loans including Micro loan, personal loans,

vehicle loan, etc.

40
  Customer relationship

Provide information such as:

 Providing information about different products such as FD(Fixed

Deposit),RD(Recurring Deposit),mutual funds, Flexible Deposit.

 Help in solving problems of customers.

 Procedure and conditions for getting loan

41
 SUMMARY AND CONCLUSIONS

SUMMARY OF LEARNING EXPERIENCE

While working in Punjab National Bank’s 1st Micro Branch of India I got in-depth

knowledge about Micro finance. I recognize that there is a lot more to discover

and learn, I learned to be more responsible, have more patience and most

important it helped me to learn how to handle the work pressure.

I got to know what all different types of question can be asked by a banking

customer, as the branch was in the village area with population of 2 lakh peoples

where there was no other bank’s branch, it was difficult to handle minimum 500-

700 per day with the queries like :

ℵ What’s the procedure to open an account?

ℵ What’s the procedure to get an ATM card?

ℵ What’s the procedure to get a pass book?

ℵ What’s the procedure to get a cheque book?

ℵ How to fill ATM form?

ℵ How to fill all other different forms like cheque clearance form, cash

deposit form, cash withdrawal form, etc.?

Besides the query solution I also filled up the form for the illiterate and old

peoples and helping them for their requirements.

Apart from customer service I got to know about the micro finance and the

procedure and all document required for it and types of people who can get the

micro loan.

42
 OBSERVATIONS AND RECOMMENDATIONS

It has been observed that to put a new organization into a running position is

much more difficult than to handle a already working organization, manager’s

task is difficult in a banking industry he is the person who is completely liable for

the working of branch. To put a right person at a right job is not an easy task for

the manager.

I observed some of the factors in my branch such as:

ϒ Lack of staff

ϒ lack of Efficient staff

ϒ Brach working space

ϒ lack of speed

ϒ Lack of quality service

ϒ Complicated work procedure

ϒ Not providing service on time

Beside all these factors the branch has also achieved some achievements such

as 12000 accounts in 2 days and distribute micro loan of around 5 crore rupees

to different 55 Self Help Groups to start their small businesses.

43
Opening of 1st Micro branch in India is also a achievement and it is a starting of

new type of banking revolution which can change the life of villagers which

depends on the “MAHAJAN” to lend them money at high interest rate.

Recommendations:-

With the changing banking system, this branch has also to adapt the new ways

of banking such as:

ψ Shifting new and young staff to this branch

ψ Give them good incentives so that they stay their for longer time period as

per the location

ψ Complicated form should be replace with easy forms

ψ Provide easy norms for new account opening.

ψ Well trained staff be placed to increase work pace and to decrease per

transaction time also.

ψ Local people should be appointed to handle the customers.

44
 (Annexure)

VARIOUS FORMS USED IN PNB:

45
FORM No.60 (For person not having PAN card)

ACCOUNT OPENING FORM

46
 Page 1 of 4

47
 Page 2 of 4

48
 Page 3 of 4

49
 Page 4 of 4

CUSTOMER MASTER FORM

Page 1 of 4

50
 Page 2 of 4

51
 Page 3 of 4

52
 Page 4 of 4

53
54
List of tables:-
Page no.

Table 1:- Total Income Wise Listing of banks -9

Table 2:- Latest Quarterly/Half yearly Income statement - 22

List of Charts:-

Chart1:- Graphical organizational structure - 25

Chart2:- Chart for relative performance of banks - 35

Chat 3:- Procedural Chart for new account opening - 39

55
 BIBLIOGRAPHY

Websites:-

www.finance.indiamart.com

www.allbusiness.com

www.ficci.com

www.business.mapsofindia.com

www.pnbindia.com

www.gyanguru.org

www.info.gov.hk

www.indiainfoline.com

www.indiaearnings.moneycontrol.com

www.assamagribusiness.nic.in

www.bna.com/

www.corporateinformation.com

www.outlookmoney.com

www.business-standard.com

Magazine:-

India today

Business world

Businesstoday

END OF REPORT

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