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SUMMER TRAINING PROJECT REPORT
PUNJAB NATIONAL BANK
Submitted in partial fulfillment of the requirement of
Bachelors of Business Administration (BBA)
GURU JAMBESHWAR UNIVERSITY,HISAR
PNB WITH THE REFERENCE TO A.T.M & INTERNET BANKING
Training Supervisor: Submitted By:MR. T. P. VERMA AJEET KUMAR VERMA Branch Manager Enrolment no- 06511242517
SESSION 2006 – 2009
GURU JAMBHESHWAR UNIVERSITY
HISAR-125001
PREFACE
Theoretical and practical knowledge are the two different but interrelated
aspects, which makes the concepts clear and vision bright and help in facing
the actual situations. Although theory is first and important step which acts as
a base and creates a picture in mind for a thing but practical knowledge which
bridges the gap between the imaginations and realities, so the practical
knowledge is very important for developing thoughts and giving shape to
them.
This type of training program is very helpful as:
It installs a feeling of belongingness and of expertness.
Development of better understanding of concepts.
Generate morale.
Acquaints student with job performance standards.
This practical training could be taken as a beginning of indoctrinate into
the ways of business organization and it is the first step towards building
a professional career, which would be helpful in future prospects.
This project deals with the analysis of services provided by PNB.
For the ease the whole project has been divided into various chapters:
Starting with the introduction of the banking industry and the profile of
Punjab National Bank with its SWOT analysis.
Next Chapter describes the Objectives, Methodology, scope and
significance around which the entire project study revolves.
Chapter three deals with the services provided by the bank .The conceptual
discussion involves steps, aspects, and tools used by bank. During the
research it is realized that the practical application of various theoretical
1
knowledge gained in the classroom learning is very useful. Then, services
like internet banking and debit card services are explained in every respect.
Next chapter deals with data analysis from where various data has been
collected.
A small set of limitations; conclusions and suggestions have also been
given in the report to make the study useful.
In the way of practical work in the banking operations there was limitation of
time during the training as finance is in itself a very broad area and only a few
aspects have been covered in the duration. I have tried my best to make this
training fruitful and bring various new areas of knowledge.
2
ACKNOWLEDGEMENT
I take this opportunity to express my deep gratitude to my honorable project
guide
for assigning an extremely challenging project thereby giving unique
opportunity to meaning contribution of growing and vibrant bank like Punjab
National Bank
It gives me immense pleasure to take the opportunity to remember and thanks
the personalities who have involved with the project work. I express my
thanks and deep gratitude who are directly and indirectly associated in the
completion of this project
I further like to thank the executive of the bank and libraries without whom
this project would have ever been completed. Finally I thank my friends for
cooperation in this project. Last but not the least, my sincere thanks to my
parents who helped me financially and orally.
AJEET KUMAR VERMA
Enrollment No. 06511242517
Batch – 2006-2009
DATE -
3
INDEX CONTENTS PAGE NO
Chapter 1 – Introduction
1.1. Overview of Industry as a whole 2
1.2. Profile of the Organization 12
1.3. Problems of the Organization 22
1.4. Competition Information 23
1.5. S.W.O.T Analysis of the Organization 24
Chapter 2 - Objective & Methodology
2.1. Significance 26
2.2. Managerial usefulness of the study 26
2.3. Objectives 26
2.4. Scope of the study 26
2.5. Research Methodology 27
Chapter 3 – Conceptual Discussion 28
Chapter 4 - Data Analysis 51
Chapter 5 – Findings and Recommendations 59
ANNEXURES
BIBLIOGRAPHY
4
CHAPTER 1
INTRODUCTION
1
INTRODUCTION
1.1 Overview of the banking sector
Introduction Banks in India
Banking dates back to 1786, the first
bank established in India, then the
nationalization of banks in 1969 and
recently the liberalization of the same
since 1991.
In India the banking sector is segregated
as public or private sector banks,
cooperative banks and regional rural
banks. Foreign banks have been given a
different head followed by upcoming
foreign banks in this section.
Banking Services in India Financial and Banking Sector Reforms
Bouquets of services are at customers
demand in to days banking system.
Different types of accounts and loans,
facilitating with plastic money and
money transfer across the globe.
The last decade experienced a complete
reform in the financial and banking
sector. The capital and financial market,
banking & non-banking organization and
financial instruments was redressed
towards development.
Reserve Bank of India (RBI) IDBI
RBI is the central bank of the country
since 1934. It regulates, controls credit,
issue licenses and functions as banker of
all banks and the government.
Industrial Development Bank of India
(IDBI) is the tenth largest bank in the
world in terms of development.
Easy Banking Banking Services for NRI in India
With the advancement of technology,
banking sector has become more easy,
fast, accurate and also time saving.
ATMs, Mobile Banking, SMS Banking
and Net Banking are only the tip of an
ice-berg.
This section discusses upon the services
provided to the NRI in India through
different dedicated account. FAQ makes
the section more comprehensive.
Indian Banks Association (IBA) Proxy Banking in India
2
The functions of Indian Banks
Association (IBA), its organizational
structure, the addresses and contact
details are discussed in this section.
Only 42% of rural households have bank
accounts. Proxy Banking, a bank through
Kiosk and ATM challenges to penetrate
the untouched population in interior
India.
Providers of financial services:
Retail banks - such as HSBC, RBS and Halifax Bank of Scotland (HBOS).
These are the banks whose branches are generally seen on the high street.
Their services are offered to the locality and in formal terms can be described
as involving the transfer, borrowing and lending of money (sterling and
foreign currency) to private customers and sole traders and partnerships. Retail
banks are companies (normally listed on the stock market) and are owned by
and run for their shareholders. Today, it is commonplace for these banks to
offer the full range of financial services at competitive prices to not just their
own customers but to the public at large.
Commercial banking - this means dealing with corporate or commercial
customers rather than individuals. Many of the major retail banks have
commercial banking arms. Client size can range from small start-up
companies to major corporations. Increasingly, commercial banks are moving
into activities once considered to be the concern of investment banks.
Private banking - these are specialist banks offering services to high net
worth individuals (the wealthy). The range of financial services offered is
wide and can be tailored to the needs of the customer, including asset
management, estate planning, etc. Opportunities to work with these
organizations are available but are fewer, given that this is a smaller sector (e
g compared to retail banking where employment opportunities are greater).
Key players include Coutts and Co and Cater Allen, which are, in turn, part of
the banking groups RBS and Abbey, respectively.
Building societies - financial institutions previously offering mainly savings
accounts and mortgages. In recent years, many have diversified to offer a
range of personal financial services, including current accounts, credit cards,
loans, insurance and estate agency services. Building society branches are
3
based on high streets, much like retail banks. They are mutual institutions with
no external shareholders. Most of their customers who have a savings account
or mortgage have certain rights to vote, as well as attend and speak at
meetings. In recent years, many former building societies converted to banks.
Supermarkets - although the new kids on the block, supermarkets now offer
life insurance, savings accounts, cash mini-ISA’s, credit cards, loans and car,
home and pet insurance. For the 'time poor', the supermarket offers the true
'one stop shop' of the 21st century in a way that banks can't. Customers can
now organize their food, clothes and money matters on one website from the
comfort of their own home. Most of the financial products offered by
supermarkets are actually subsidiaries of big banking groups. For example,
TESCO Personal Finance Limited is part of the RBS group.
Most large retail banks and building societies recruit graduates into graduate training
programs. These can lead to general branch or head office management or specialist
posts. For example, they may train graduates into roles in marketing, human resources
and finance (e.g. accountancy and treasury). They also have a need for IT
professionals, given their reliance on technology to deliver their services. Specific
degree disciplines are not necessarily sought for generalist positions in this sector
though some employers may express a preference for business, economics and
quantitative and analytical degrees or to see these subjects within the degree offered.
For specialist functions, employers may require degree subjects that are directly
relevant and, in some cases, relevant experience, for example, for marketing or IT
positions.
HISTORY
The evolution of the modern commercial banking industry in India can be traced to
1786 with the establishment of bank of Bengal in Calcutta. Three presidency banks
were set up in Calcutta, Bombay, and Madras. In 1860, the limited liability concept
was introduced in banking, resulting in the establishment of joint stock banks like
Allah bad Bank ltd., PNB ltd. bank of Baroda ltd. and bank of India ltd. In 1921, the
three presidency banks were amalgamated to form the Imperial Bank of India, which
took on the role of a commercial bank, a banker’s bank and a banker to the Govt. The
4
establishment of the RBI as the central bank of the country in 1935 ended the quasi-
central banking role of the Imperial Bank of India. In order to serve the economy in
general and the rural sector in particular, the All India Rural Credit Survey Committee
recommended the creation of a state – partnered bank taking over the Imperial Bank
of India and integrating with it, the former state – owned and state –associate banks.
Accordingly, the State bank of India (SBI) was constituted in 1955. Subsequently in
1959, the SBI (Subsidiary Bank) Act was passed, enabling the SBI to take over 8
former state-associate banks as its subsidiaries. In 1969, 14 private banks were
nationalized followed by 6 private banks in 1980. Since 1991 many financial reforms
have been introduced substantially transforming the banking industry in India.
RESERVE BANK OF INDIA
The RBI is the central banking and monetary authority in India. The RBI manages the
country’s money supply and foreign exchange and also serves as a bank for the GOI
and for the country’s commercial banks. In addition to these traditional central-
banking roles, the RBI undertakes certain developmental and promotional activities.
RBI issues guidelines, notifications, and circulars on various areas including exposure
standards, income recognition, asset classification, provisioning for non- performing
assets, investment valuation and capital adequacy standards for commercial banks,
long-term lending institute. And non- banking finance companies. The RBI requires
these institute to furnish information relating to their businesses to the RBI on a
regular basis.
COMMERCIAL BANKS
Commercial Banks in India have traditionally focused on meeting the short-term
financial needs of the industry, trade and agriculture. At the end of Sept. 2007, there
were 291 scheduled commercial banks in the country, with a network of 67221
branches. Scheduled commercial banks are banks that are listed in the II Scheduled to
the RBI Act, 1934, & may further be classified as PSU, Private sector banks &
foreign banks. IDBI was converted into a banking company by the name of
INDUSTRIAL DEVELOPMENT BANK OF INDIA LTD. with effect from Oct.
2007 & is a scheduled commercial bank. Scheduled Commercial bank has a presence
5
throughout India, with nearly 70.1% of bank branches located in rural or Semi- urban
areas of the country. A large no. of these branches belongs to the Public Sector Banks.
PUBLIC SECTOR BANKS
Public Sector banks make up the largest category of banks in the Indian Banking
System. There are 27 public sector banks in India. They include the SBI & its
associate banks & 19 nationalized banks. Nationalized banks are governed by the
banking companies (Acquisition & transfer of U/T) Act, 1970 & 1980. The banks
nationalized under the banking companies (Acquisition & transfer of U/T) Act, 1970
are referred to as “Corresponding new banks”. PNB is a public sector bank
nationalized in 1969 and a corresponding new bank under the bank acquisition Act.
At the end of Sept. 2007, public sector banks had 46782 branches & accounted for
74.9% of the aggregate deposits & 70.5% of the outstanding Gross bank credit of the
scheduled commercial banks
REGIONAL RURAL BANKS
Regional Rural banks were established from 1976 to 1987 jointly by the central
Govt. , State Govt. and sponsoring public sector commercial banks with a view to
develop the rural economy. Regional rural banks provide credit to small farmers,
artisans, small entrepreneurs & agricultural laborers. There were 196 regional rural
banks at the end of Sept. 2007 with 144430 branches, accounting for 3.6% of
aggregate deposits and 3.0% of gross bank credit outstanding of scheduled
commercial banks.
PRIVATE SECTOR BANKS
After the first phase of bank nationalization was completed in 1969, the majority of
Indian Banks were public sector banks. Some of the existing private sector banks,
which showed signs of an eventual default, were merged with state- owned banks. In
July 1993, as part of the banking reforms process and as a measure to induce
competition in the banking sector, the RBI permitted entry by the private sector into
the banking system. This resulted in the introduction of 9 private sector banks. These
6
banks are collectively known as the “new “private sector banks. There are 9 “new
“private sector banks operating at present.
FOREIGN BANKS
At the end of June 2007, there were 32 foreign banks with 217 branches operating in
India, accounting for 4.6% of aggregate deposits and 7.0% of outstanding gross banks
credit of scheduled commercial banks. The Govt. of India permits foreign banks to
operate through (i) branches (ii) a wholly owned subsidiary (iii) a subsidiary with
aggregate foreign investment of up to 74% in a private bank. The primary activity of
most foreign banks in India has been in the corporate segment. However, some of the
larger foreign banks have made consumer financing a significant part of their
portfolios. These banks offer products such as automobile finance, home loans, credit
cards and household consumer finance. The GOI in 2006 announced that wholly
owned subsidiaries of foreign banks would be permitted to incorporate wholly owned
subsidiaries in India. Subsidiaries of foreign banks will have to adhere to all banking
regulations, including priority sector lending norms, applicable to domestic banks .In
March 2007, the Ministry of Commerce and industry, GOI announced that the foreign
direct investment limit in private sector banks has been raised to 74% from the
existing 49% under the automatic route including investment by FII .The
announcement also stated that the aggregate of foreign investment in a private bank
from all sources would be allowed up to a maximum of 74% of the paid up capital of
the bank .The RBI notification increasing the limit to 74% is however still awaited.
CO-OPERATIVE BANKS
Cooperative banks cater to the financing needs of agriculture; small industry and self
employed businessmen in urban and semi urban areas of India. The State land
development banks and the primary land development banks provide long-term credit
for agriculture. In light of the liquidity and insolvency problems experienced by some
cooperative banks in fiscal 2001, the RBI undertook several interim measures to
address the issues, pending formal legislative changes, including measures related to
lending against shares, borrowings in the call market and term deposits placed with
other urban cooperative banks. The RBI is currently responsible for supervision and
regulation of urban co-operative societies, the National Bank for agriculture and Rural
7
Development, state co-operative banks and district central co-operative banks. The
banking Regulation (Amendment) and Miscellaneous Provision Bill, 2003, which was
introduced in the parliament in 2003, proposed the regulation of all co-operative
banks by the RBI. The Bill has not ye been ratified by the Indian parliament and is not
in force.
TERM LENDING INSTITUTIONS
Term lending Institutions were established to provide medium- term and long-term
financial assistance to various industries for setting up new projects and for the
expansion and modernization of existing facilities. These institutes Provide fund-
based and non- fund based assistance to industry in the form of loans, underwriting,
direct subscription to shares, debentures and guarantees. The primary long-term
lending institutes. Include IDBI (converted into a banking company with effect from
Oct, 2007), IFCI Ltd. Infrastructure development Finance Company Ltd. And
Industrial Investment Bank of India and Industrial Credit Corporation of India Ltd.
(prior to its amalgamation). The term lending Institutions were expected to play a
critical role in industrial growth in India and, accordingly, had access to concessional
govt. funding. However, in recent years, the operating environment of the term
lending institutions has changed substantially. Although the initial role of these
institutions. Was largely limited to providing a channel for Govt. funding to industry,
the reform process required them to expand the scope of their business activities.
Their new activities include:
Fee – based activities like investment banking and advisory services
Short-term lending activity including loans and working capital loans.
CLASSIFICATION OF BANKS:
The Indian Banking industry consisted of 97 commercial banks, 196 regional banks,
52 Scheduled urban Co-operative banks, and 16 Scheduled state Co-operative banks.
At present, the banking system can be classified into the following categories:
1. PUBLIC SECTOR BANKS
Reserve Bank of India
State Bank of India and its 7 associate banks
Nationalized Banks
Regional rural Banks Sponsored by Public Sector Banks
8
2. PRIVATE SECTOR BANKS
Old Generation Private banks
New Generation Private Bank
Foreign banks in India
Scheduled Co-operative Banks
Non- Scheduled Banks
3. CO-OPERATIVE SECTOR BANKS
State Co-operative Banks
Central Co-operative Banks
Primary Agriculture Credit Societies
Land development Banks
Urban co-operative Banks
State Land Development Banks
4. DEVELOPMENT BANKS
IFCI
IIBI
SIDBI
NABARD
EXIM
SCICI
In India the concept of Development Banks is being to be diluted as no of banks like
ICICI, IDBI have converted into general banks.
The RBI has a centralized control over all these banks. It performs a wide range of
functions to:
Issue Bank notes
Supervise & administer exchange control and banking regulations and
administer the Govt. policy
Issue licenses to the foreign banks for operations in India
Approve the licenses of operation for the private banks
Grant licenses to new banks and new bank branches.
Globalization, financial deregulation and improvement in technology have had a
profound effect on the financial landscape in recent years. These developments have
9
intensified competition and resulted in financial engineering through product
innovation and business strategies. While market participants have now greater scope
to diversify risk and manage it efficiently, this has also posed new risks and
challenges to the financial system. Growth of financial firms across different business
lines and across national boundaries has made the task of designing appropriate
policies more challenging. Regulatory and supervisory policies are, therefore,
constantly assessed regarding their capabilities to meet the challenges of containing
systemic risk in the financial system. The main challenge for the supervisory
authorities has been to maintain financial stability without curtailing the incentive to
innovate.
Keeping in view the changing landscape in the financial sector, the Reserve Bank has
been suitably focusing its regulatory and supervisory framework to promote a stable
and efficient financial sector. The main focus of the Reserve Bank’s recent regulatory
and supervisory initiatives has been on prudential regulation and financial
infrastructure broadly in line with international best practices. However, while
focusing on a globally competitive and the robust banking sector, the Reserve Bank
has also emphasized financial inclusion, whereby banking services are accessed easily
by the underprivileged sections of the society. The overall approach to reforms has
been sequenced and arrived at through consultative process with all the stakeholders.
Various reform measures initiated from time to time have imparted resilience to the
financial system.
The Reserve Bank had indicated on February 15, 2005 that banks in India would start
implementing Basel II with effect from March 31, 2007. Several initiatives, therefore,
were taken during the year to facilitate the smooth transition to Basel II. The Reserve
Bank permitted banks to raise capital through new instruments to enable them to meet
capital requirements prescribed under Basel II. The Reserve Bank also issued a
guidance note for operational risk management. Taking into account the state of
preparedness of the banking system, however, it was announced in the Midterm
Review of the Annual Policy for 2006-07 on October 31, 2008 that Indian banks with
presence outside India and foreign banks operating in India would be required to
migrate to Basel II framework with effect from March 31, 2008, while all other Indian
banks would be encouraged to migrate to these norms by March 31, 2009.
10
With a view to providing basic banking services to common man, the Reserve Bank
took several measures to incentives banks. Improvement in customer service was
another area of focus of the Reserve Bank’s regulatory Policy.
1.2 PROFILE OF THE ORGANIZATION
PUNJAB NATIONAL BANK
The Bank started out as Punjab National Bank Limited, incorporated in the year
1894 and it commenced operations in the year 1895. Consequent upon nationalization
in 1969, the corresponding new bank was named as Punjab National Bank (PNB).
From its modest beginning, the Bank has grown in size and stature to become a
leading banking institution in India. During its existence of over one hundred years,
PNB has successfully faced many challenges including that of partition. The number
of branches of the Bank rose from 619 at the time of nationalization in 1969 to reach
3,861 by December 2001. As many as 6 banks have merged with PNB, the last being
the erstwhile New Bank of India, a loss making nationalized bank. The merger with
New Bank of India was the first ever merger of a nationalized bank with another.
PNB has diversified into other banking related areas through its various subsidiaries:
11
PNB Capital Services Ltd. (PNB Caps), the first fully owned subsidiary of the
Bank, established in 1988, is registered with RBI as a non-banking finance
company and also with SEBI as Merchant Banker and as a Debenture Trustee.
PNB Caps is a member of Delhi Stock Exchange and Over The Counter
Exchange of India (OTCEI). PNB Caps is engaged in securities related
business and offers services in investment banking, project appraisal, loan
syndication and corporate advisory activities.
PNB Housing Finance Company Ltd., another subsidiary of the Bank, was
also established in 1988 and is engaged in financing housing activities.
PNB Asset Management Co. Ltd., the third subsidiary of PNB, manages the
mutual fund business.
PNB Gilts Ltd. is a primary dealer in Government securities and deals with
money market instruments. The company has received ISO 9002 certification
from British Standard Institution, making it the first primary dealer in India to
achieve this certification for its quality management systems.
PNB Gilts came out with an Initial Public Offering of 3.5 cores equity shares
at Rs. 30/- per share (premium of Rs. 20/- per share) in July 2000.
The Bank has sponsored 19 Regional Rural Banks (RRB) as a part of fulfillment of its
social responsibilities towards rural development and poverty alleviation. Further, the
Bank has 20% equity participation in Everest Bank Ltd., Katmandu, Nepal.
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 3.7 crore customers through 4500 branches and
674 extension counters - largest amongst Nationalized Banks. The Bank was recently
12
ranked 21st amongst top 500 companies by the leading financial daily, Economic
Times. PNB attempts at providing best customer service has earned it 4 th place among
India’s Most Trusted top 50 service brands in Economic Times- A.C Nielson Survey.
PNB is also ranked 248 amongst the top 1000 banks in the world according to "The
Banker" London.
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
specialized branches to finance exclusively such industries. 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
worldwide. 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 in Kazakhstan, Shanghai in 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 2000 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, anywhere
13
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.
The Bank functions under the supervision of its Board of Directors consisting of the
Chairman and Managing Director, the Executive Director and other Directors as
nominated by the Government of India. The Bank has constituted various committees
like Management Committee, Audit Committee, Asset Liability Management
Committee etc. in line with the RBI guidelines.
The Bank has a four-tier organization structure with the Head Office, 12 Zonal
Offices and 66 Regional Offices, which control the branches. To meet the challenges
of competition and to maintain its front-line position, the Bank has brought about
suitable modifications in its organization structure.
Accordingly, seven of the zones namely Chandigarh, Delhi, Ludhiana, Mumbai,
Patna, Kolkatta and Lucknow which cover the strategic business areas for the Bank
have been specifically chosen to act as potential growth centers and such zones are
headed by a senior executive in the rank of General Manager with adequate
delegation of powers. Similarly, Senior Regional Managers have been placed in about
one-fourth of the regional offices. Decision making in respect of credit sanctions and
other operational matters are decentralized up to the branch level.
Management of the Bank
The overall supervision and control of the Bank’s functions rests with the Board of
Directors which consists of the Chairman and Managing Director and Executive
Director, both appointed by the GOI, other directors representing the Government,
Reserve Bank of India, Employees and Officers of the Bank. The day-to-day affairs of
the Bank are managed by the Chairman and Managing Director, the Executive
Director, the Bank’s General Managers, Deputy General Managers who are assisted
by a team of competent professionals.
14
HISTORY
Punjab National Bank (PNB), established in 1895 in Lahore, then a part of undivided
India, is the second largest public sector commercial bank in India with about 4500
branches and offices throughout the country. The Government of India nationalized
the bank, along with 13 other major commercial banks of India, on July 19, 1969.
History
1895: PNB established in Lahore.
1904: PNB established branches in Karachi and Peshawar.
1939: PNB acquired Bhagwandas Bank.
1947: Partition of India and Pakistan at Independence. PNB may had lost its
premises in Lahore, but continued to operate in Pakistan.
1961: PNB acquired Universal Bank of India.
1963: the Government of Burma nationalized PNB branch in Rangoon (Yangon).
September 1965: After the Indo-Pak war the government of Pakistan seized all the
offices in Pakistan of Indian banks, including PNB's head office, which may
have moved to Karachi. PNB also had one or more branches in East Pakistan
(Bangladesh).
1969: The Government of India (GOI) nationalized PNB and 13 other top banks.
1960s: PNB amalgamated Indo Commercial Bank (est. 1933).
1976 or 1978: PNB opened a branch in London.
1986 The Reserve Bank of India required PNB to transfer its London branch to
State Bank of India after the branch was involved in a fraud scandal. However,
PNB acquired Hindustan Commercial Bank in a rescue.
15
1993: PNB acquired New Bank of India, which the GOI had nationalized in 1980.
1998: PNB set up a representative office in Almaty, Kazakhstan.
2003: PNB took over Nedungadi Bank, the oldest private sector bank in Kerala.
Rao Bahadur T.M. Appu Nedungadi, author of Kundalatha, one of the earliest
novels in Malayalam, had established the bank in 1899. It was incorporated in
1913, and in 1965 had acquired selected assets and deposits of the Coimbatore
National Bank.
16
HISTORY AND DEVELOPMENT
The Bank started out as Punjab National Bank Limited, incorporated in the year 1894
and it commenced operations in the year 1895. Consequent upon nationalization in
1969, the corresponding new bank was named as Punjab National Bank (PNB). From
its modest beginning, the Bank has grown in size and stature to become a leading
banking institution in India. During its existence of over one hundred years, PNB has
successfully faced many challenges including that of partition. The number of
branches of the Bank rose from 619 at the time of nationalization in 1969 to reach
3,861 by December 2001. As many as 6 banks have merged with PNB, the last being
the erstwhile New Bank of India, a loss making nationalized bank. The merger with
New Bank of India was the first ever merger of a nationalised bank with another.
PNB has diversified into other banking related areas through its various subsidiaries:
PNB Capital Services Ltd. (PNB Caps), the first fully-owned subsidiary of the
Bank, established in 1988, is registered with RBI as a non-banking finance
company and also with SEBI as Merchant Banker and as a Debenture Trustee.
PNB Caps is a member of Delhi Stock Exchange and Over The Counter
Exchange of India (OTCEI). PNB Caps is engaged in securities related
business and offers services in investment banking, project appraisal, loan
syndication and corporate advisory activities.
PNB Housing Finance Company Ltd., another subsidiary of the Bank, was
also established in 1988 and is engaged in financing housing activities.
PNB Asset Management Co. Ltd., the third subsidiary of PNB, manages the
mutual fund business.
PNB Gilts Ltd. is a primary dealer in Government securities and deals with money
market instruments. The company has received ISO 9002 certification from British
Standard Institution, making it the first primary dealer in India to achieve this
certification for its quality management systems. PNB Gilts came out with an Initial
Public Offering of 3.5 crores equity shares at Rs. 30/- per share (premium of Rs. 20/-
per share) in July 2000.
17
OBJECTIVE OF THE PNB
Merchant Banking
Under the Merchant Banking Portfolio, The Bank handled 28 assignments as Banker
to Issue and 122 payment assignments of Dividend Warrants/Interest
Warrants/Refund Orders during the financial year 2000-01. For the 6 months period
upto September 30 2001, 4 assignments of Bankers to Issue and 48 payment
assignments have been handled by the Bank. There are 24 existing Debenture Trustee
Assignments of 14 Companies with a trusteeship amount of Rs. 517.76 crores. Bank
is also providing Depository Services and is the Depository Participant of National
Securities Depository Ltd. As on 30th September 2007, there were 10,740 Demat
Accounts. The Depository Services are being provided by 11 branches in Delhi and 8
branches in other parts of the country.
Foreign Exchange Business
The Bank through its network of 103 Authorized Branches, 43 Special Export
Promotion Branches and 40 Limited Authorization Branches, has been catering to
Foreign Exchange Business requirements of its customers. The Bank has established
10 international banking branches at Delhi, Mumbai, Kolkata, Amritsar, Jalandhar,
Ludhiana, Jaipur, Agra, Ahmedabad and Morabadad in order to introduce concept of
Single Window Banking and for providing excellent services exclusively for exporter
and importer clients. All these offices have been accredited with ISO 9002
certification.
All branches authorized for handling Foreign Exchange Business have been provided
with modern infrastructure like Telex, Fax etc. while 75 branches have been provided
with two way SWIFT (Society for World wide Inter bank Financial
Telecommunication) connectivity which is the fastest mode available for transmission
of financial message between the banks worldwide. The Export and Import Turnover
of the Bank has grown steadily over the years and it has reached a level of Rs.25,761
crores upto September 30, 2007. The Bank has earned an income of Rs.164.79 crores
from the foreign exchange business upto September 30, 2007.
18
Non- Resident Deposits
Non- Resident Deposits of the Bank consist of Non- Resident Non-Reportable
(NRNR) deposits, Foreign Currency Non-Resident (FCNR) Deposits, Non- Resident
External (NRE) Accounts, Non-Resident Special Resident (NRSR) Accounts, Non-
Resident Ordinary (NRO) Accounts. The total Non-Resident Deposits of the Bank
have reached a level of Rs. 2,136.98 crores as on September 30, 2001.
Correspondent Relations
The Bank has a strong network of 204 correspondent banks spread over 81 countries.
Rupee Drawing Arrangements have been put in place with M/s. UAE Exchange
Centre, UAE; Thomas Cook Al Rostamani Exchange Co., UAE; Bahrain Exchange
Company Kuwait; Bahrain Finance Company, Bahrain; Musandam Exchange,
Sultanate of Oman; Oman and UAE Exchange Co., Sultanate of Oman and Al-Fardan
Exchange Company, Qatar to help Indian expatriated in these countries to remit funds
to India.
Overseas Operations
The Bank has equity participation to the extent of 20% in Everest Bank Ltd. (EBL),
Kathmandu, Nepal. The Bank is providing technical and other management services
to EBL by deputing the Bank’s personnel. EBL came under the Bank’s Management
since January 1997 and has earned a net profit of Nepalese Rupee (NPR) 36.97 crores
during 2006-07 against a loss of NPR 1.10 crores during 1996-97. Deposits and
advances of EBL which stood at NPR 17.0 crores and NPR 4.9 crores at the end of
1995-96, the year prior to commencement of the joint venture with the Bank, has
increased to NPR 757.45 crores and NPR 595.94 crores at the end of year July 2007
respectively. Further, the Bank has established a Representative Office at
Almaty, Khazakhistan.
19
Dealing Rooms
The Bank has integrated Rupee and Forex desks of the treasury and centralized inter-
bank forex desk at the corporate office. The new dealing room at New Delhi with
state of the art technology is well equipped for instantly netting foreign currency
positions offloaded by different extended arms and offer bigger lots in the inter-bank
forex markets. The integration has helped the Bank to exploit arbitraged opportunities
in rupee and forex market.
Gold Business
PNB commenced its Gold Business in the form of Gold Import Scheme in September
2000. The scheme offers international quality gold for sale to the Bank’s clientele
consisting of exporters and others at competitive prices. The Gold Import Scheme is
available at select branches in seven centers – Delhi, Mumbai, Chennai, Ahmedabad,
Jaipur, Amritsar and Ludhiana, comprising of important bullion markets in India. The
gold is procured from some of the leading suppliers of precious metal. The Bank has
achieved a turnover of Rs.10,134 crores upto March 31, 2007 and Rs.11,212 upto
September 30, 2007mainly by providing various value added services such as late
hour dealing facility, door-to-door delivery of bullion, delivery of unfix price basis,
direct dealing facility, etc.
Credit Card Business
The Bank entered the credit card business in association with HSBC and launched the
PNB International Credit Card on November 24, 2000 under the MasterCard and Visa
franchisee. The co-branded credit card was launched in 14 cities representing major
centers. The credit card comes in two categories – Gold for high net worth customers
and Classic Card for other individuals. So far, the Bank has issued over 68,000 cards
and the product is being offered at 21 centers. The Bank uses its vast retail reach to
collects applications and shares the revenues with HSBC. Thereafter, the entire
responsibility for processing the applications and collection of credit card payments
along with the credit risk is with HSBC.
20
Insurance Business
PNB has decided to enter into insurance business by participating in the insurance
Joint Venture ("JV") with Zurich Financial Services, Switzerland, DCM Shriram
Consolidated Limited and Vijaya Bank as partners. The JV is proposed for three
separate companies one each for life, non-life insurance and a third for distribution
and services company. Bank is expected to take up 26% equity in all the three
companies and invest a sum of Rs.61.88 crores. RBI has been approached for its
approval.
Centralized Banking Solution
The proposed Centralized Banking Solution will cover around 1500-2000 branches
in 10-12 clusters covering Bank’s Major business centers including top 100 banking
centers in the country. The Centralized Banking Solution will take about 2-3 years for
full implementation. Centralized banking solution besides providing State of the Art
value added services to the customers would help in centralized and effective
Management Information Systems.
Anywhere Branch Banking / Anytime Banking is proposed to be introduced at
around 100 branches / ATMs in 4 metros and is expected to be implemented in
around 6 months. The branches and ATMs will be networked and the facility will
enable Customers of these branches to transact banking business from any of these
100 locations.
21
1.3 PROBLEMS OF THE BANK
Fewer locations as compared with HDFC and ICICI Bank
Service delivery / Logistics perception is weak
Negative Environment
High interest rate as compared to others housing finance institution.
Top management takes large amount of time to approve high value loan
borrowers.
22
1.4 COMPETITION INFORMATION
The following are best banks which are currently operating in India under the guidelines of Reserve Bank of India (RBI)
Abn Amro Bank In IndiaAllahabad Bank In IndiaAmerican Express Bank In IndiaAndhra Bank In IndiaBank Of IndiaCanara BankCentral Bank Of IndiaCITI BankCorporation BankHDFC Bank
HSBC BankICICI BankIDBIIndian Overseas BankOriental Bank Of CommercePunjab National BankState Bank Of India (SBI)Standard Chartered BankUnited Bank Of IndiaAxis bank
1.5 S.W.O.T. ANALYSIS
23
Strengths:
Well Reputed Bank
Expanding into New Location
Well-Covered Market in Delhi
Competitive Products
Relatively New Team
Appraisal techniques are used.
Weaknesses:
HDFC Bank, ICICI Bank, SBI Bank and Citibank dominate players in the
Market
Fewer locations as compared with HDFC and ICICI Bank
Service delivery / Logistics perception is weak
Negative Environment
High interest rate as compared to others housing finance institution.
Opportunities:
PNB can offer a complete relationship
Advantage of large network over other bank’s
Opportunity to pitch in for National and International convenience
Special rates of interest are offered during exhibitions.
Product life cycle is to be reviewed.
Threats:
Other Banks offering lower AQB
People looking for change (?)
The competition in market is very high due to the private players.
The rates of interest of other players are quite low.
Innovative schemes from other players.
24
Chapter 2
Research
Methodology
25
OBJECTIVE AND METHODOLOGY
2.1 SIGNIFICANCE
The Appraisal also signifies the present state of affairs of industry, demand &
supply, marketing scenario, Regulatory requirements as well as national &
International state of affairs of that particular product/ industry.
The Appraisal also signifies a proper format in which any credit & project
appraisal to be placed before the final decision takers.
For specialist functions, employers may require degree subjects that are
directly relevant and, in some cases, relevant experience, for example, for
marketing or IT positions.
2.2 MANAGERIAL USEFULNESS OF THE STUDY
The study provides a complete knowledge of various fundamental concept
related to services provided by the bank.
The suggestions to the Branch Managers will help management to make
changes in the desired field.
2.3 OBJECTIVES
This project is a compilation of the work that is taken up by a financial Institution
while financing an industrial project. The basic theme of the study is:
To check the awareness about ATM AND Internet banking facility.
To know all the factors influencing choice of banking.
Familiarization with the services provided by PNB.
2.4 SCOPE OF THE STUDY
Scope of the study is to collect information regarding the account opening
and ATM facility provided by the bank
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2.5 RESERACH METHODOLOGY
Data used to analysis the services in PNB was of primary and secondary .The primary
data has been collected through questionnaires. The secondary source included
brochures, annual reports, magazines, employee’s handbook, magazines and journals.
DATA COLLECTION
PRIMARY DATA:
The primary data that I collected were the first hand information, which I received
through personal interviews with the consumers and through questionnaires. This data
gave the most vital information for making my analysis of the prevailing banking
behavior of the consumers
SECONDARY DATA:
Secondary data involved in my research were the information that I collected through
the Punjab National Bank’s Internet service and through the various brochures and
pamphlets of the bank.
Sampling Plan / Fieldwork Plan
“Every customer is a suspect but you’ve got to find the prospective one.”
To accomplish this task I use to fix appointments over the telephone, with the help of
a telephone directory. I also use to go for cold calls in various offices building in the
various parts of the Delhi.
I also use to go for the promotion of our Bank through our ‘scratch & win’ contest
that we used to conduct in some specific areas, especially in those having a branch.
27
CHAPTER 3
CONCEPTUAL
DISCUSSION
28
CONCEPTUAL DISCUSSION
ATM CUM DEBIT CARD
INTRODUCTION OF ATM
Punjab National Bank is in the process of creating a large network of ATMs in
partnership with individuals / organizations willing to provide prominent space, install
ATMs; take active interest in increasing number of transactions on these ATMs and
also to take care of ATM maintenance besides development, upkeep and security of
the site. The scheme is based on Revenue Sharing model. The entity deploying
ATMs hereinafter called “Participant” shall get revenue on per transactions basis as
defined in REVENUE’ clause.
SCOPE
Participation in the PNB is exclusively available to select Participants that Bank
decides to enter into a partnership with. The “Participant” selection and participation
is the prerogative of the by the bank.
29
USERS
Bank only, No correspondence shall be entertained from the applicants not found
suitable.
PNB ATM / Debit / Credit / Smart card holders
ATM / Debit Card holders of MITR / NFS member Banks.
ATM / Debit Card holders of other banks with whom PNB has ATM sharing
arrangement(s) or enters in to from time to time.
MasterCard enabled cards.
PARTICIPANT
A commercial organization / trust / or an individual which has/ arranges space with
independent access in a commercial / market / public place as found suitable for ATM
deployment by Bank. The roof rights should also be available in case V-SAT is
required to be installed. Preference shall be given to individuals.
ELIGIBILITY
The Participant should have space for installation of ATMs at Corporate outlets,
shopping malls, Cinema theatres, hospitals, petrol pumps, educational institutions etc.,
that are found suitable by Bank for installation of ATM. The Participant should
provide credentials to meet investment and operational cost. Decision of the bank
shall be binding and final.
TERMS AND CONDITIONS
Bank shall have the discretion to select or reject a particular site offered by the
prospective Participant, without assigning any reason.
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REVENUE
The Participant will be entitled for per-successful-transaction income (Rs.11* for
Cash withdrawal & Rs.4* for Balance Enquiry) from the Bank.
* Including Service Tax.
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SUBMISSION OF APPLICATION FORM
In case the Participant is not able to submit details on-line he may send his application
form (available at our site www.pnbindia.com) at the following address. A Demand
Draft / Pay order of Rs. 1000/- in favour of “PUNJAB NATIONAL BANK”,
payable at Delhi is required to be submitted towards processing fee for each site by
all applicants whether on-line(with Registration No.) or through submission of
application form. This processing fee shall be non-refundable even if the bank does
not consider his application. The last date for submission of application is 30-04-
2006.
The Chief
Punjab National Bank,
Back Office Operations Division, 4th Floor,
HO: 5,Sansad Marg, New Delhi – 110001.
OBLIGATIONS
The Participants agree that they bear obligations as mentioned herein.
Preferably provide a comprehensive insurance of the ATM, ATM Site and other
equipments.
Provide security at ATM Site.
The ATM shall be encumbrance free. Incase of attachment of ATMs, the
Participant shall be responsible for the cash that was lying in the ATMs.
Marketing of the ATM services at local level in order to enhance usage of the
services and its revenue.
Maintain over 99% of uptime of the services throughout the year.
Ensure that site shall bear logo, display board, design, publicity material of PNB
like any other ATM owned by PNB.
32
Allow the authorized personnel of the Bank including the external auditors,
consultants etc. to visit the ATM site.
Pay service taxes and other applicable taxes.
The Participants selected will enter in to an agreement for the purpose.
BANKS’ OBLIGATIONS
Assist the Participant by providing the technical
specifications and Banks’ approved rates for the ATMs (selected models),
ATM site preparation, Air conditioners and other equipments. The Participant
will procure the equipments as per technical specifications approved by the
Bank.
Monitor remotely each ATM for its functioning.
Provide necessary connectivity for connecting the ATM to
its ATM switch. All usage and other charges relating to connectivity will be
borne by the Bank.
Monitoring and maintenance of the connectivity between
the ATM and its ATM Switch.
Provide and replenish cash at the ATM.
Take care of the ATM card issuance / management related
work and also handle its customer queries and complaints pertaining to the
Bank.
Reconciliation & settlement of transactions shall be done by
Bank
Procure the necessary license / authentication from Reserve
Bank of India.
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The authentication / license for ATM services shall be in
the name of the Bank.
34
SERVICE ENGAGEMENT
Bank and the Participant shall enter into an agreement (including service level
agreement) for providing the ATM services. The service engagement shall be for 3
years period from the date of launch of services at the designated site. After 3 years,
the Bank may renew the contract on same terms & conditions or buy back the ATMs
along with site infrastructure at mutually agreeable terms. The Participant shall not
use the site for ATMs of other Bank, at least for one year after termination of the
contract.
In case of violation of any terms, bank can terminate the services and / or levy suitble
penalty commensurate with the quantum of loss(tangible or intangible) to the bank.
Bank shall not be responsible for loss, if any to the Participant on account of
termination etc.
35
INTERNET BANKING
What is Internet Banking?
You can do banking using Internet as medium. It is available 24 hours a day, 365 days
a year and you can operate your account anytime / anywhere at your convenience.
You need a PC with minimum PII processor, 32 MB RAM with Internet Explorer 5.0
or above. You need to have an account at any of our CBS (Centralize Banking
Solution) branch. Then you need to register for the Internet Banking Services with the
branch by filling our request form. We shall be sending you the passwords at the
address given by you in the request form with the user guide and acknowledge letter.
Please submit the acknowledgement letter and collect your user-id and password,
please logon to www.pnbindia.com using the user-id and password in your possession
to access your account information. During the first login, you have to change
passwords. Kindly download the request form, fill in the details and submit it to your
branch. After authentication of your particulars your registration formalities will be
completed.
User - id and password will be generated in a secure environment. Passwords will be
couriered at the address specified by you in the request form and to ensure the highest
security and safety you have to collect your user-id from your concerned branch.
While collecting user-id from the branch, please submit the acknowledgement letter
duly signed in the branch. The machine generates User-id and passwords for your first
time access randomly and we have no control over it. It is mandatory to define your
own passwords at first login. It is mandatory for you to change the machine-generated
passwords with your own convenient passwords at first login. Later on at any time
you can change your passwords but not the user-id. Passwords can be changed any
time and any number of times. In fact we recommend it should be changed often to
secure your access to your accounts through Internet. Please ensure to use at least one
special character (like @, #, $ etc) in your password otherwise system will not accept
your passwords. You are requested to choose a password that is not a dictionary word
and not guessable from your personal information known to others such names in the
family, vehicle numbers etc. You should change your password frequently. Please try
to remember the password and do not write it down or paste it somewhere.
36
Last but not the least does not divulge your password to anybody even if they claim to
be from the bank. Nothing to worry. Just click on "forgot password" at the login page
and print the request form. After printing, fill in all desired information and submit the
form in the Branch. We in turn will send you new passwords. If you forget the
username for Internet Banking Services, kindly contact your branch.
I am unable to login with the couriered Password and allotted User-id.
Passwords are case sensitive. Kindly be a little more careful while typing the
system-generated passwords for the first time.
It may that your Internet Banking account has not been activated. Please
attempt logging in after 24 hours of your submitting acknowledgement .If the
problem persists please get in touch with the branch. Please check the cipher
strength of your system. You may check cipher strength of your computer by
clicking "About Internet Explorer" in the "Help" menu option of Internet
Explorer. If it does not show cipher strength of 128-bit then please update the
same by clicking "Update Information" button. Yes, provided you do not
disclose your passwords and logout in proper way. Please ensure to logout in
proper way. However, if you abruptly close your Internet Banking page, your
session will end. Kindly do not leave your system in between doing Internet
Banking, as this will give opportunity to others around you to operate your
accounts. Accounts maintained by you in any of the CBS branches can be
attached to your existing Internet Banking Services. You may submit your
request at any of the CBS branches where you have accounts. Standard format
for this request is also available on the login page under Add more Accounts.
How can contact the helpdesk of Internet Banking?
011-23765434 e-mail: [email protected]
I am getting a message "You are viewing this page due to the following reasons"
while I am working on The Internet Banking site.
It is likely that your system has been idle for long.
37
It is also possible that your Internet connection is slow and the session gets timed out.
The services may be down from our end. In this case you may please try after a few
minutes. After logging in, click on transfers. You have 2 options
1. Transfer funds between your own accounts.
2. Transfer funds to other accounts.
If you have chosen option 1 then you are shown a list of credit & debit accounts. You
may choose the relevant account and click on Transfer button.
If you have chosen option 2 then you are shown a list of your own accounts to be
debited. You are expected to type the 16-digit beneficiary account number and click
on Transfer Button. In both cases to complete the transaction you would be prompted
for user id and transaction password. It is recommended that both passwords are
different so that there is no possibility of misuse.
I just made an ATM transaction but show balance is not reflecting the same. In order
to view your current balance you may click on Online Details. Show Balance would
reflect balance as on the start of ant given day. Railway Ticketing: In order to use this
you will have to log on to www.irctc.co.in, plan your journey, choose make payments,
and choose PNB as the payment channel. Thereafter you will be prompted for your
Internet Banking user id and password. Airline Ticketing, Telephone bill payment etc
would the other services in the near future. Currently Internet Banking services are
available for free. However it may be understood that for fund transfer between
accounts of different branches, the charges applicable as in the case of normal
transactions would be levied. As regards to Railway Ticketing services, presently
there are no charges levied by the Bank. Practically all accounts can be provided with
an Internet Banking user id. Loan accounts, FD Accounts, Deposit Accounts. If your
accounts are in CBS branches and if you have the same customer id then
automatically all accounts would be displayed by a single Internet Banking user id.
However if you have accounts in different customer ids, you may request that the
other account also be attached to your Internet Banking user id. In case the account is
of the individual accounts of the same person, it is better to have a single user id so
that all accounts can be monitored in one shot. If you have joint account & individual
accounts you may opt for separate user ids.
38
"Terms and conditions for Internet Banking Subscribers -
(For Individuals / Sole Proprietorship)
Definitions In this document the following words and phrases have the meaning set
opposite them unless the context indicates otherwise:
BANK refers to Punjab National Bank, its successors and assigns, a body corporate
constituted in India under the Banking Companies (Acquisition and Transfer of
Undertakings) Act No. 5 of 1970 and having its Head Office at 7, Bhikhaiji Cama
Place, New Delhi 110066.
WEBSITE means website of the Bank.
USER refers to a customer of the BANK authorized to use Internet Banking Services.
Internet Banking Account refers to the User’s Savings and/ or Current Account and/
or any other type of account so designated by the BANK to be eligible account(s) for
operations through the use of Internet Banking Channel.
PERSONAL INFORMATION refers to the information about the USER obtained in
connection with the Internet Banking Service. TERMS refer to Terms and Conditions
for use of Internet Banking Services as specified in this document.
1. Applicability of TERMS These TERMS form the contract between the USER
using the Internet Banking services and the BANK. By applying for Internet
Banking Services and accessing the service the USER acknowledges and
accepts these TERMS. Any conditions relating to the accounts of the customer
other than these TERMS will continue to apply except that in the event of any
conflict between these TERMS and the account conditions, these TERMS will
continue to prevail. The agreement shall remain valid until it is replaced by
another agreement or terminated by either party or the account is closed ,
whichever is earlier.
39
2. Requirement of Minimum Balance the USER shall maintain, at all times, such
minimum balance in Internet Banking account(s), as the BANK may stipulate
from time to time. The BANK may, at its discretion, levy penal charges for
non-maintenance of the minimum balance. The BANK may withdraw the
Internet Banking Services facility, if at any time the amount of deposit falls
short of the required minimum as aforesaid and/ or if the other charges remain
unpaid, without giving any further notice to the USER and/ or without
incurring any liability or responsibility whatsoever by reason of such
withdrawal
3. Funds Transfer the USER shall not use or attempt to use Internet Banking
Services for funds transfer - as and when the facility is made available -
without sufficient funds in the relative Internet Banking Services -account or
without a pre-existing arrangement with the Bank for the grant of an overdraft
The BANK will endeavor to effect such funds transfer transactions received
through Internet Banking Services provided there are sufficient funds
available in the User’s account. The BANK shall not be liable for any
omission to make all or any of the payments or for late payments due to
circumstances beyond the reasonable control of the Bank the event of
overdraft created due to oversight/inadvertently, the USER will be liable to
pay the interest on such over drawn amount, as decided by the BANK.
4. Authority to the Bank Banking transactions in the User's account(s) are
permitted through Internet, only after authentication of the User-id and
password of the USER. The USER (along with the joint account holder, if
any) grants express authority to the BANK for carrying out the banking
transactions performed by him through Internet Banking Services. The BANK
shall have no obligation to verify the authenticity of any transaction received
from the USER through Internet Banking Service or purporting to have been
sent by the USER via Internet Banking Services, other than by means of
verification of the User-id and the password. The display or printed output that
is generated by the USER at the time of operation of Internet Banking
Services is a record of the operation of the Internet access and shall not be
construed as the Bank's record of the relative transactions.
40
5. The Bank's own records of transactions maintained through computer systems
or otherwise shall be accepted as conclusive and binding for all purposes. All
transactions arising from the use of Internet Banking Services to operate a
joint account, shall be binding on all the joint account holders, jointly and
severally, notwithstanding that one amongst such joint account holders only
operates the accounts through Internet Banking Services
6. Accuracy of Information the USER is responsible for the correctness of
information supplied to the BANK through the use of Internet Banking
Services or through any other means such as electronic mail or written
communication. The BANK accepts no liability for the consequences arising
out of erroneous information supplied by the USER. If the USER suspects that
there is an error in the information supplied to the BANK by him, he shall
advise the BANK at the earliest. The BANK will endeavor to correct the error
wherever possible on a 'best efforts' basis. If the USER notices an error in the
account information supplied to him through Internet Banking Service, he
shall advise the BANK at the earliest. The BANK will endeavor to correct the
error promptly and adjust any interest or charges arising out of the error.
7. Liability of the USER and the BANK If the USER has complied with the
TERMS and advises the BANK in writing under acknowledgment of an
authorized person of the Bank, immediately after he/she suspects that his/her
User-id or password is known to another person and/ or notices an
unauthorized transaction(s) in his account, he/she shall not be liable for losses
arising out of the unauthorized transaction(s) occurring in the accounts after
the receipt of such advice by the BANK. The USER shall be liable for some or
all loss from unauthorized transactions in the account(s) if he/she has breached
the Terms and conditions or contributed or caused the loss by negligent
actions such as the following:
In disclosing or failing to take all reasonable steps to prevent disclosure of the
User-id and/or password to anyone including BANK staff and/ or failing to
advise the BANK of such disclosure within a reasonable time Not advising the
BANK in a reasonable time about unauthorized access to or erroneous
41
transactions in the account(s) through the Internet Banking Services The
BANK shall not be liable for any unauthorized transaction(s) occurring
through the use of Internet Banking Services which can be attributed to the
fraudulent or negligent conduct of the USER. The BANK shall not be liable to
the account holder(s) for any damages whatsoever whether such damages are
direct, indirect, incidental, consequential and irrespective of whether any claim
is based on loss of revenue, investment, production, goodwill, profit,
interruption of business or any other loss of any character or nature
whatsoever and whether sustained by the account holder(s) or any other
person, if Internet Banking Services access is not available in the desired
manner for reasons including but not limited to natural calamity, floods, fire
and other natural disasters, legal restraints, faults in the telecommunication
network or Internet or network failure, software or hardware error or any other
reason(s) beyond the control of the BANK. The Bank shall endeavor to take
all possible steps to maintain secrecy and confidentiality of its customers'
account(s) but shall not be liable to the account holder(s) for any damages
whatsoever caused on account of breach of secrecy/ confidentiality due to
hacking or technological lapses in the system. The bank shall not be liable for
any loss due to unauthorized transfer of funds through hacking etc.
8. Indemnity
The USER shall indemnify and hold the BANK harmless against any loss
suffered by the BANK, if any claim or action brought by a third party which is
in any way the result of the improper use of Internet Banking Services by the
USER.
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9. Disclosure of PERSONAL INFORMATION
The USER agrees that the BANK or its contractors may hold and process his
PERSONAL INFORMATION on computer or otherwise in connection with
Internet Banking Services as well as for statistical analysis and credit scoring.
The USER also agrees that the BANK may disclose, in strict confidence, to
other institutions, such PERSONAL INFORMATION as may be reasonably
necessary for reasons inclusive of, but not limited to, the following: · for
participation in any telecommunication or electronic clearing network · in
compliance with a legal directive · for credit rating by recognized credit rating
agencies · for fraud prevention purposes
10. Proprietary Rights
The USER acknowledges that the software underlying the Internet Banking
Services as well as other Internet related software which are required for
accessing Internet Banking Services are the legal property of the respective
vendors. The permission given by the BANK to access Internet Banking
Services will not convey any proprietary or ownership rights in the above
software.
The USER shall not attempt to modify, translate, disassemble, decompile or
reverse engineer the software underlying Internet Banking Services or create
any derivative product based on the software.
11. Change of Terms and Conditions The BANK has the absolute discretion to
amend or supplement any of the TERMS at any time and will endeavor to give
prior notice of reasonable time for such changes wherever feasible. The
BANK may introduce new services within Internet Banking Services from
time to time. The existence and availability of the new functions will be
notified to the USER as and when they become available. By using these new
services, the USER agrees to be bound by the terms and conditions applicable.
43
12. Non-Transferability
The grant of facility of Internet Banking Services to a USER is not
transferable under any circumstance and shall be used only by the USER.
13. Termination of Internet Banking Service
The USER may request for termination of the Internet Banking Services
facility any time by giving a written notice. The USER will remain responsible
for any transactions made on his/her account(s) prior to the time of such
cancellation of the Internet Banking Services.
The bank may withdraw the Internet Banking facility anytime after giving
reasonable notice under the circumstances to the user through the web-site.
The closure of account by the user will automatically terminate the Internet
Banking Services.
The bank may suspend or terminate the Internet Banking Services without
prior notice if the user has committed breach of these terms and conditions or
the Bank learns of the death, bankruptcy legal incapacity of the user.
14. Notices
Notices under these terms and conditions may be given by the Bank and the
user: Electronically to the mailbox of either party, such notices will be
regarded as being in writing. By delivering them by hand or by sending them
by post to the user address as per our records and in case of Bank to the
address mentioned below-
Internet Banking Section
Information Technology Division
Punjab National Bank
Head office-5, Sansad Marg New Delhi-110001.
44
Bank may also publish notices of general nature applicable to all users of
Internet Banking Services on its website such notices will have the same effect
as a notice served individually to each user.
15. Governing laws these terms and conditions and/or operations in the accounts
of the user maintained by the bank and/or the use of services provided through
Internet Banking Services shall be governed by the laws of Republic of India.
Bank accepts no liability whatsoever, direct or indirect for non-compliance
with the laws of any country other than Republic of India. The mere fact that
Internet Banking Service can be accessed through Internet by a user from a
country other than India shall not be interpreted to imply that the laws of the
said country govern these terms and conditions and/or the operations in the
accounts of the user through Internet and/or the use of Internet Banking
Services.
The user agrees to abide by prevailing laws in respect of Internet Banking
Services applicable in Republic of India. It is the responsibility of the user to
comply with any regulations prevailing in the country from where he is
accessing the Internet
USER GUIDE
How to access Internet Banking Services: To access Internet banking Service you
need a PC (preferably Pentium with Windows 95 or above with a mouse), a
connection to the Internet and a Browser (Microsoft Internet Explorer 5.0 or Netscape
Navigator 5.0 or later versions). You will also need your Internet Banking Service
User Id and passwords that have been provided to you by the bank. Once you are
connected to the Internet, visit the Bank's Web site, www.netpnb.com or
www.pnbindia.com and click on INTERNET BANKING SERVICES button. The
Internet Banking Sign on page will be displayed. As a part of security feature, the
"BACK" and "REFRESH" buttons on the browser are disabled and pressing of this
will result in an internal error. For going to the previous screen, use the "PREVIOUS"
button within the services.
45
Login To Services:
You have been provided with one User-Id and two passwords:
1) Login password: this will help you to enter into the Internet Banking Services.
2) Transaction Password: this password is required to confirm your transactions
such as Transfer of funds/ Stop payment of cheques.
Remember:
Keep Your Password Secure:
1) The passwords are case sensitive i.e. p (small) is different from P (capital)
2) The eight (8) characters password sent to you will be randomly generated by
the system. This should be changed immediately on logging in the system for
the first time.
3) The password selected by you should contain a minimum of 6 characters and
maximum of 28 characters and should be in conformity to the rules displayed
on the screen.
4) The password can be changed as frequently as you wish (using the facility
available in the customize option). Every 90 days the system will force a
change of passwords. An alert will inform before expiring of the password, the
moment you log in. Please change both your login and transaction passwords
when the system prompts you to do so.
5) Non-usage of the services will disable the password after a fixed period of
time i.e. 90 days.
46
Using Internet Banking Services:
Once you enter the user-id and the password, the system will check for the correctness
and allow you to enter the services. Here the screen will display various options in the
form of buttons/icons. These buttons/icons will have different functions and selecting
or clicking on the respective button/icon will activate the function. You can use Tab
key, Mouse clicks, Scroll bar to navigate within the screen/pages. To go to previous
page/screen don't use BACK button on your browser, but use PREVIOUS button on
the screen. A "Help" button will be available to view on-line help available in the
system, this "help" will guide you in using the Internet Banking Services. This "help"
will open as a separate window and after using the "help" please close the window by
clicking on the close button. The Internet Banking Services will display messages on
top of each screen. These messages will indicate successful acceptance or any type of
errors. Don't forget to look there if you do not get the expected result after selecting
an option.
Internet Banking Services - features:
The Internet Banking Services offer you variety of features on your finger tips. Main
Menu, besides welcoming you will display list of available options which will be in
the form of buttons/icons. Presently, the features available are
(i) Accounts
(ii) Transfer of funds
(iii) Requests
(iv) Mails
(v) Customize
Logout Depending upon your account profile, all or some of the options from this list
will be available for your access. You can choose your option by clicking the
respective icon/button. The brief features available under each head are as under:
47
Accounts will cover
1. Details of all accounts of the user.
2. Details of transactions
3. Statement of accounts
4. Schedule of deposits/loans
5. Online information of transactions-deposit/loan
6. Status of cheques, on-line stop payment of cheques
7. Transfer of funds will cover
a) online transfer of funds between own accounts
b) online transfer of funds stuck between own and other accounts
c) status of transfers
Requests will cover
1. Closure of accounts
2. Opening of a new Savings/current account
3. Opening of a new term Deposit account
4. Request for Statement of account
5. Request for Transfer of accounts
6. Request for chequebook
7. Request for ATM/Credit cards
8. Request for issue of TDS/Interest, No dues certificate
9. Request for locker
10. Request for gift cheque
11. Request for demand draft/cash order
12. Request for Duplicate passbook
13. Request for change of address
48
14. Request for transfer of funds
15. Reporting of loss of drafts/cash order
49
FORMAT FOR LOSS OF USER ID AND PASSWORD
"ANNEXURE-IBS
Date:
Ref. No:
To,
In charge - BO* :___________
Punjab National Bank
___________________
___________________
___________________
Reg.: Internet Banking Subscriber - Request for generation of new passwords
user id
As I have (Please tick)
A) forgotten
my password or it has been
B) disabled
You are requested to reset my password and inform me at the address given below.
50
My account details are as follows -
S. No Account Number (16 digit number)
The accounts are in my name and I am eligible to operate accounts, being an
authorized signatory.
Signature
Name: ____________________ Phone:______________________
Address#:__________________ E-mail:______________________
___________________________ (if any)
_________________________________
# as per application form (PNB1063)
51
CHAPTER 4
DATA ANALYSIS
52
FINANCIAL STATEMENT
Sl No
PARTICULARS Quarter Ended Year ended
31.03.2007(Audited)
31.03.2006(Audited)
31.03.2007(Audited)
31.03.2006(Audited)
1 INTEREST EARNED (a+b+c+d)
2184.65 2027.46 8459.85 7778.94
a) Interest/ discount on advances/ bills
1079.83 995.31 4246.12 3876.01
b) Income on Investments
1022.16 969.31 3974.05 3680.22
c) Interest on Balances with RBI & other Inter Bank Funds
55.00 45.08 164.25 113.13
d) Others 27.66 17.76 75.43 109.58
2 Other Income 377.35 390.11 1675.68 1867.63
A TOTAL INCOME (1+2)
2562.00 2417.57 10135.53 9646.57
3 Interest Expended 1112.57 1011.18 4453.11 4154.99
4 Operating Expenses (e+f)
922.45 707.91 2975.21 2370.72
e) Payments to and provisions for employees
622.43 486.96 2121.23 1654.06
f) Other Operating Expenses
300.02 220.95 853.98 716.66
B TOTAL EXPENSES (3+4) (excluding Provisions & Contingencies)
2035.02 1719.09 7428.32 6525.71
C Operating Profit (A-B)(Profit before Provisions & Contingencies)
526.98 698.48 2707.21 3120.86
53
Total Provisions & Contingencies
166.35 401.86 1297.09 2012.17
D Other Provisions and Contingencies (Net)
52.70 246.78 801.60 1351.38
-of which provision for Non- Performing Assets
194.61 391.43 425.79 1401.00
E Provision for Taxes 113.65 155.08 495.49 660.79
F NET PROFIT (C-D-E) 360.63 296.62 1410.12 1108.69
5 Paid up equity Share Capital
315.30 265.30 315.30 265.30
6 Reserves excluding Revaluation Reserves
7533.51 4425.46 7533.51 4425.46
7 Analytical Ratios
(i) Share holding of Govt. of India (%)
57.80 80 57.80 80
(ii) Capital Adequacy Ratio (%)
14.78 13.10 14.78 13.10
(iii) Earning per Share in Rs. (Non-Annualized, at face value of Rs 10/-)
13.54 11.21 52.93 41.79
(iv) (a) Amount of gross non-performing assets
3741.34 4670.13 3741.34 4670.13
(b) Amount of net non-performing assets
119.44 448.96 119.44 448.96
(c) % of gross NPA 5.96 9.35 5.96 9.35
(d) % of net NPA 0.20 0.98 0.20 0.98
(v) Return on Assets % *(Annualized)
1.14* 1.16* 1.12 1.08
8 Aggregate of Non-Promoter Share holding
(i) No. of Shares 133061200 53061200 133061200 53061200
(ii)Percentage of Share Holding
42.20 20.00 42.20 20.00
54
Segment Reporting Mar'0 7
Notes:
The above financial results were taken on record by the Board of Directors in its
meeting held on 29.04.2006.
During the year Bank has paid interim dividend @ 30% on the then Capital
amounting Rs. 265.30 crore and has proposed a final dividend @ 30% on
enhanced Capital amounting Rs.315.30 crore.
Results include Rs.207.70 crores on account of depreciation on certain Govt.
securities transferred from AFS to HTM category in terms of RBI guidelines.
The figures of the corresponding period are not comparable to that extent.
Financial results have been arrived at after considering provisions for loan losses
and Standard Assets, depreciation on Investments and Fixed assets, Gratuity,
Pension, Bonus, Leave Encashment, Tax on Income and amortization of
deferred expenditure on VRS-2000.
Based on best estimates of liability, the Management has made a provision of Rs.
302.75 crores in respect of wage arrear.
During the year, the Bank has come out with a follow on public issue of 8 crores
equity shares of Rs. 10 each at a price of Rs. 390/- per equity share. In
accordance with the terms stipulated in letter dated 7th January 2005 from the
Ministry of Finance, Govt. of India, the Bank has returned to the Govt. of
India an aggregate amount of Rs. 1153.01 crores representing the amount
raised for 3 crores equity shares of Rs 10 each at issue price net of the
proportionate cost of public offer.
PNB Assets Management Company Ltd. wholly owned subsidiary of the Bank,
was amalgamated with the Bank, on appointed date i.e. 1st October 2004. The
accumulated losses amounting to Rs. 4.42 crores (net of Reserves) have been
debited to 'Revenue and other Reserves'.
55
FINDING & ANALYSIS
My analysis is based primarily on the information collected through 50 questionnaires
that I obtained during the promos in Yamuna Vihar. A copy of the questionnaires that
was used has been attached in the appendix.
The analysis is made are as follows:
THE BANKING HABIT OF THE CONSUMERS
A. Types of bank in which the consumer have their accounts based on 50
questionnaires that were collected.
NATIONALIZEDBANKS
PRIVATE BANKS
MULTI NATIONALBANKS
The above charts shows that of the 70 consumers questioned, 70% of them had their
accounts in Nationalized Banks, 10% in private banks, and 20% had their accounts in
Multinational Banks.
This shows that the consumers still have full belief on the Nationalized Banks. The
shares of the MNC’s are only 20%. Their share has been increasing since the past
years but they have to provide more services and commitment to gain more
customers.
56
B. USE OF THE DEBIT CARD
Based on 50 questionnaires that were collected
YES
NO
We find that out of 70 customers, 25% of them still not use the Debit Card. Now we
should make the consumers aware of the facilities that they can acquire through the
use of the Debit Card. The Bank should also bring in lucrative offers along with their
debit card, like purchase of cinema tickets with the help of a debit card, increase in the
discount rate from around 10% to around 20% on the purchases made through a debit
card. A consumer will surely be attracted towards a bank giving these benefits along
with there debit card.
57
C. STANDING OF PUNJAB NATIONAL BANK AMONG
VARIOUS BANKS:
Based on 50 questionnaires that were collected.
PNB
ICICI
SBI
HDFC
CITI BANK
From above chart we find that out of 70 consumers, only 22% had there account with
PNB, 25% had it with ICICI, 35% with SBI, 10% with HDFC & 8% with CITI
BANK. With the help of the chart we can see the Punjab National Bank have to go a
long way to penetrate into the life style of the consumers. They have to beat their
competitors by providing more services that are given by them, & increase its services
by making its debit card freely usable in any bank’s ATM machine.
58
CHAPTER-5
FINDINGS AND
RECOMMENDATIONS
59
FINDINGS AND RECOMMENDATIONS
FINDINGS
Punjab National Bank bas a great learning experience for me and in the due course of
my project I found out that the consumers go for the Punjab National Bank for a status
symbol and not merely for baking process. It’s a prestigious issue for the customers
that they hold Punjab National Bank account and so the bank should try and meet its
commitment and keep the faith of the customers.
Punjab National Bank should maintain good relationship with it’s customers like
providing reliable services so that the customers can build their faith in the bank and
bring in more references to join the Punjab National Bank (PNB)
1. Direct door to door interview.
2. Spreading, expanding the need & awareness of banking among the people through
different means of communication.
3. Introducing new policies according to the customer needs.
4. Improving the various customer services by using more efficient customer relation
management, thereby which will lead to improvement in the overall banking
of PNB Bank.
60
RECOMMENDATIONS
Punjab National Bank gave me a great opportunity to explore the banking sector in
the economy. It really does have a lot of positive aspect, which are so lucrative that
anybody would be attracted towards having a deposit with the Bank.
Still I feel that are some areas where Punjab National Bank have to improve upon to
have the complete faith of the consumers. These areas are highlighted as:
Punjab National Bank seems to have been concentrating more on numbers (the
numbers of deposits) specially saving / current account that they can produce
and in the process the “After Sale” services has lagged behind.
The sales term has gone far ahead of the customers care unit and so Punjab
National Bank have to do something to improve the services that they provide
to the customer.
The customer satisfaction is not there. Once an account is opened, many a
time they are considered as permanent and the customer services is relaxed.
The bank should remember that a single satisfied customer could be a great
help in bringing in new accounts for the bank by giving reference.
There are so many PNB’s ATM’s. A customer feels proud in visiting their
own banks ATM. It’s all right that PNB account holder can access their
account through other banks ATM as well, but that appeal of belongingness
does not exist when a customer goes into other banks ATM. The customer
feels proud of Punjab National Bank account, it’s hottest brand name and they
want other people to see them enter into a Punjab National Bank ATM to
access their account and so the management should try and increase the
number of PNB’s own ATM centers, especially in and around cinema halls
like PVR, shopping complexes etc.
Fixed deposit rates have goes down very much; PNB should create some
mechanism to bring about some kind of stability in the interest rates.
61
ANNEXURE
62
QUESTIONNAIRE
Name:
Phone off: Phone Res.
Occupation
Office Address
Monthly Income: 5000 – 10000 10000 – 20000
And above
Type of Bank’s you are holding saving account with-
Nationalized / co-operative
Private
Multinational
How long have you been banking with them?
Less than 1 year
1-2 year
3 year and above
How would you rate your experience with your
current bankers?
Excellent
Good
Fair
Poor
Do you presently hold a Debit
Card?
Yes
63
No
Does your bank
charges you on the transaction that you do on the Debit Card?
Yes
No
Which of these factors influenced your decision to open an account with your current bank?
Facilities provided by the Bank
Recommendation by friend / relatives
Advertisement
Brand
ATM’s
Branch timing
Bank which can be accessed at over 1450 ATM’s all over the country for
free*
Yes
No
64
How important are the banking facilities for
you?
Services Not Important Average Important Very ImportantA.T.M
PHONE BANKING
LOCKER FACILITIES
CASH/CHEQUE PICK UP
INSURANCE
FACILITIES WITH YOUR ACCOUNT
BANKING HOURS
DISCOUNT IN RESTAURANT &
SHOPPING MALLS
FREE DRAFT/PAY ORDER
365 DAYS BRANCH BANKING
Signature:
65
DOMESTIC TERM DEPOSIT RATE
W.E.F. 24.6.2008
15 DAYS &UPTO 29 DAYS 4.75%
30 DAYS TO 60 DAYS 5.25%
61 DAYS TO 90 DAYS 5.50%
91 DAYS TO < 1 YEAR 6.00%
1 YEAR TO < 18 MONTHS 6.25%
18 MONTHS TO < 24 MONYHS 7.00%
2 YEAR TO < 3 YEARS 7.50%
3 YEARS TO < 5 YEARS 9.72%
66
BIBLIOGRAPHY
67
BIBLIOGRAPHY
Books
Gupta, C. B. Human Resource Management,
Kothari C. R. Research Methodology,
Web Sites
http://www.google.com
http://www.pnb.com
http://www.pnb.india.com
http://www.answes/pnb.com
Magazines and Broachers
Punjab National Bank’s Broachers & Services
68