Punjab National Bank PPT

8/11/2019 Punjab National Bank PPT

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INTRODUCTION

PNB has the distinction of being the firstIndian bank to have been started solely withIndian capital that has survived to the

present. PNB has had the privilege of maintaining

accounts of national leaders suchas Mahatma Gandhi, Shri Jawahar LalNehru, Shri Lal Bahadur Shastri,Shrimati Indira Gandhi, as well as theaccount of the famous Jalianwala

Bagh Committee.


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HISTORY

Punjab National Bank was registered on 19 May1894 under the Indian Companies Act with its office in

Anarkali Bazaar Lahore.

The Bank opened for business on 12 April, 1895.

PNB's founders included several leaders ofthe Swadeshi movement such as Dyal SinghMajithia and Lala HarKishen Lal, Lala Lalchand, ShriKali Prosanna Roy, Shri E.C. Jessawala, Shri Prabhu

Dayal, Bakshi Jaishi Ram, and Lala DholanDass. Lala Lajpat Rai was actively associated withthe management of the Bank in its early years.


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SERVICES

Social Banking

MSME Banking ( service for micro, small,medium enterprise)

Agricultural Banking

1. Agri Business Cell

2. Agricultural Banking

3. Farmers1. Agriculture Credit Schemes2. Central Sector Schemes

3. PNB Farmers Welfare Trust

4. Procedural Guidelines for AgriculturalCredit

Corporate Banking

International Banking NRI

Personal Banking

1. Savings Fund Account1. PNB Prudent Sweep

2. Total Freedom Salary Account

3. PNB Vidyarthi SF Account

4. PNB Mitra SF Account

5. PNB Rakshak Scheme

6. PNB Shikshak Sweep Scheme7. PNB Shikshak Overdraft Scheme

8. Scheme for Providing Overdraft Facility toPensioners

2. Current Account

3. Fixed Deposit Schemes

4. Credit Schemes

5. Doorstep Banking Services

6. Cards7. Nomination Facilities

8. Deceased claim cases

9. Centralised Banking Solution


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PRICE

Initial Deposit at opening of account( curret account)-

saving account initial 500 rs for student 0 rs.

Saving Account Interest Rates : 4.0 % p.a. (w.e.f. 3rd May 2011)

Interest Rates - Loans & Advances : BPLR: 14.25% w.e.f. 01.08.2011

BASE RATE: 10.75% w.e.f. 01.08.2011

Fee and commison for draft .

Area of Branch Amount (Rs.)

Charges for non

maintenance of

QAB per quarter

(Rs.)

Rural 1000 300/-Semi urban 3000 400/-

Urban 5000 700/-

Metropolitan 5000 700/-


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PLACE

5000 branches across 764 cities.

PNB has a banking subsidiary in the UK, as

well as branches in Hong Kong, Dubai

and Kabul, and representative offices

in Almaty, Dubai, Oslo, and Shanghai.

Punjab National Bank ATM - 5,050. till june

2011.


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PROMOTION

1. Advertising - Television, radio, movies,

theatres

2. Print Media- Hoardings, newspaper,

magazines


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PROCESS

Doorstep Banking Services for HNI

customer/corporates.

Various offers for students and senior

citizens.

Standardization of services.


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PEOPLE

Serves over 37 million customers.

Employees - 56,928 (2010)

Employees of a Bank represents theorganization to its customers.


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CORE BANKING ARCHITECTURE

On 30 March 2001, the bank used theservices of Infosys for the deployment ofFinnacle.Finnacleis a software package

consisting of universal banking productswhich are designed to address the corebanking, e-banking, Islamicbanking, treasury, wealth managementand

CRM requirements of retail, corporate anduniversal banks. It is developed by Infosys,and is one of the major players in the arenaof core banking in Indian and Asian banking

domains.
http://en.wikipedia.org/wiki/Treasuryhttp://en.wikipedia.org/wiki/Wealth_managementhttp://en.wikipedia.org/wiki/Infosyshttp://en.wikipedia.org/wiki/Infosyshttp://en.wikipedia.org/wiki/Wealth_managementhttp://en.wikipedia.org/wiki/Treasury


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GAP IN SERVICE QUALITY

Gap between Consumer expectation andmanagement perceptions of consumerexpectation :-

Gap between service quality specificationsand service delivery :-

Gap between service delivery and external

communication : Gap between perceived service and

expected service


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-An insight on the financials of the 3rdlargest Public Sector

Bank in India

Presented by:Prabhsharan Kahlon

MBA


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INTRODUCTION

TIMELINE:

In 1849, Punjab under the British witnessed a period of

development giving rise to a new educated class fired with a

desire for freedom from slavery.

Amongst the cherished desires of this new class was also an

overriding ambition to start a SWADESHI BANK with the Indian

Capital and Management representing all sections of the Indian

community.

The idea was first mooted by Rai Mool Raj, who had a long

cherished idea that Indians should have a national bank of their

own.

R i M l R j L l L j t R i t d i l i iti


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Rai Mool Raj , Lala Lajpat Rai sent around circular inviting

selected friends insisting on a joint stock bank as the first step in

the genesis of this bank.

On May 23, 1894, the efforts materialized. The founding boardwas drawn from different parts of the country with a common

objective of a national bank which would further boost the

economic interest of the country.

The bank opened for business on 12thApril 1895.

A maiden dividend of 4% was declared after ONLY 7 months of

operation.

With its Ups and Lows , during independence PNB as a symbol

of trust and a name you can bank upon repaid many deposits of

its customer who were on the other side of the boarder.


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In 1951, the bank took over Bharat Bank Ltd. and became the 2nd

largest bank in the private sector.

In 1969 Government of India Nationalized PNB

1986 witnessed another acquisition, Hindustan Commercial Bank

which added 142 branches to PNBs network.

1990s saw the rise in opening foreign branches like London,Leicester, South Hall, Bhutan

Forbes Global 2000 RankingPNB was ranked #1243 in 2006.

Fortune India 500 Ranking- PNB was ranked #26 in 2011


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BANKING CONCEPTSCash Reserve Ratio (CRR)- is the amount of funds that all Scheduled Commercial Banks(SCB) excluding Regional Rural Banks (RRB) are required to maintain without any floor or ceiling

rate with RBI with reference to their total net Demand and Time Liabilities (DTL) to ensure theliquidity and solvency of Banks (Section 42 (1) of RBI Act 1934). The current CRR is 4.75% and at

present no incremental CRR is required to be maintained by the banks.

Statutory Liquidity Ratio (SLR)- Apart from CRR, every bank is required to maintain inIndia at the close of business every day, a minimum proportion of their Net Demand and Time

Liabilities as liquid assets in the form of cash, gold and un-encumbered approved securities. Theratio of liquid assets to demand and time liabilities is known as Statutory Liquidity Ratio (SLR).

Present SLR is 23%. (Reduced w.e.f. 11/08/2012 from earlier 24%). RBI is empowered to increasethis ratio up to 40%. An increase in SLR also restricts the banks leverage position to pump more

money into the economy.

Rs.

(Crs.)

MAR 12 MAR 11 MAR 10

CASHWITH

RBI

16,557.73

22,053.34

16,997.20

SLR 7,029.97 5,804.71 4,690.22

R & I


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1.) Repo Rate-The rate at which the RBI lends money to commercial banks is calledrepo rate. It is an instrument of monetary policy. Whenever banks have any

shortage of funds they can borrow from the RBI.A reduction in the repo rate helps

banks get money at a cheaper rate and vice versa.The current Indian interest rate RBI (base rate) is 7.75%

2.) Interest Rate-

Fixed Deposits- Fixed Deposit, also called Term Deposit is an investment where the

interest rate is guaranteed not to change for the nominated term, so you know

exactly what your investment is worth.

The current rates is 4.00% to 9.00% depending upon the time period

Loans & Advances-

a.) Benchmark Prime Lending Rate (BPLR) -According to the Reserve Bank of

India (RBI), banks are free to fix the Benchmark Prime Lending Rate (BPLR) with

the approval of their respective Boards. Banks are free to decide the BPLR but their

interest rates have to have a reference to the BPLR fixed. The BPLR is the interest

rate that commercial banks charge their most credit-worthy customers.

BPLR is 14% w.e.f 01.05.2012

Rates & Interest


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b.) BASE RATE :The Base Rate is the minimum interest rate of a Bank below which it

cannot lend, except in cases allowed by RBI.

The Base Rate w.e.f 9.02.2013 is 10.25%

c.) Bulk Deposit Rate: Rate of Interest for Single deposit of above Rs.10 Crore

(Wholesale Deposit).

The current rate is 7.00% to 9.25% depending on the time period


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RATIO ANALYSIS1. CURRENT RATIO:

CURRENT ASSETS

CURRENT LIABILITIES

Meaning:

It establishes the short term solvency of a firm. It means how much cash

Money or easily convertible cash assets the company has to pay back the

Current Liabilities.

Rs(Crs.)YEAR MAR 12 MAR 11 MAR 10

CURRENT ASSETS 182,228.02 152,441.74 112,000.71

CURRENT LIABILITIES 393,112.66 325,227.00 259,647.49

CURRENT RATIO 0.46 0.47 0.43


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2. Operating Profit Ratio:

(Net Income-Operating Expenses/Total Income) X 100

MeaningThis gives the profit only after deducting the operating expenses.

It does not take into account of any other expenses.

YEAR

RS. (Crs.) Mar 12 Mar 11 Mar 10

NetIncome 17,617.04 15,419.92 12,088.20

Operating Expense 9,405.85 8,367.96 5,761.36

Operating profit 8,211.19 7,051.96 6,326.84

Operating profit

ratio35.68% 46.46% 48.88%


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3. NET PROFIT RATIO:

NET PROFIT /TOTAL INCOME x 100

Meaning: It gives the profit margin to total income. As in what part of totalincome is left with the company after deducting the expenses.

YEAR

(Rs. Crs.)

12-Mar 11-Mar 10-Mar

NET PROFIT 4,884.20 4,433.50 3,905.36

TOTAL INCOME 40,630.63 30,599.06 25,032.22

Net Profit Ratio 12.02% 14.49% 15.60%

15 60


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0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

9-Mar 10-Mar 11-Mar

15.60% 14.49

%

12.02

%

Net

ProfitRatio

The total income of the bank is increasing

but the net profit is not increasing because

of increase in operating expenses,employee cost, depreciation, and other

indirect cost.


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4.Net Interest Margin

(Interest earnedinterest expended)/Earning Assets)X100

Meaning:

The use of net interest margin is helpful in tracking the profitability of a banks investing

and lending activities over a specific course of time.

Year

Rs.(Crs.)

Mar 12 Mar 11 Mar 10

Net Interest 13,414.44 11,807.34 8,522.89

Earning AssetsCash Credit, Overdraft &

Loans143,607.10 114,491.10 82,207.07

Term Loans 142,747.12 120,675.59 99,935.36

Government Securities 99,759.45 79,501.72 65,970.43

Other Approved Secutires 223.27 373.86 492.18

Debentures & Bonds 7,636.75 4,862.89 3,032.68

Total 393,973.69 319,905.16 251,637.72

Net Interest Margin 3.40% 3.69% 3.39%

NPA Non Performing Assets


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NPA- Non Performing Assets

An asset is classified as non-performing asset (NPAs) if dues in the form ofprincipal and interest are not paid by the borrower for a period of 90 days.

Increasing NPAs have a direct impact on banks profitability as legally banks

are not allowed to book income on such accounts and at the same time banks

are forced to make provision on such assets as per the Reserve Bank of India(RBI) guidelines.


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Gross NPA:The amount of principal + interest outstanding is the gross NPA

of the bank.

Net NPA: The amount of principal of loan due is the net NPA of the bank.

Interest is deducted from the gross NPA to take out the NET NPA

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

20122011

2010

Rs(Crs.)

8719

4379

3214

4454

2038

981

GROSS NPANET NPA

Year

Rs(Crs.)

2012 2011 2010

GROSS NPA 8719 4379 3214

NET NPA 4454 2038 981

INDUSTRY ANALYSIS


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INDUSTRY ANALYSIS

Public Sector Banks are banks where the majority stake (more than

50%) is held by the Government.

There are 26 Public Sector Banks in India.

PNB

SBI

Bank ofBaroda

CanaraBank

Bank ofIndia

No. of

branches

in India5000

20193

4171

3000

3079


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CURRENT RATIOIndustry Analysis

MAR 12

Rs.(Crs.) PNB SBI Bank of Baroda Canara Bank Bank of India

CURRENT

ASSETS182,228.02 526,309.59 172,198.13 144,543.87 156,113.65

CURRENT

LIABILITIES393,112.66 1,124,562.45 402,271.56 335,924.85 331,459.46

CURRENT

RATIO

0.46 0.47 0.43 0.43 0.47

Industry Average considering these big players is 0.45 and so far as PNB is considered the current ratio is

similar to that of the industry average.

Net profits of the banks and Net profit ratio


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Net profits of the banks and Net profit ratio

Banks

Rs(Crs.)PNB SBI

Bank of

BarodaCanara Bank Bank of India

Net Profit for

the Year

Mar 12 4,884.20 11,686.01 5,006.96 3,282.71 2,677.52

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

12-Mar12-Mar

12-Mar12-Mar

12-MarPNB

SBIBank ofBaroda

CanaraBank Bank of

India

12.02%

9.67%

15.13%

9.71%

8.42%

Net Profit

Ratio


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DEBT EQUITY RATIO

Meaning:

What is the ratio of the total long term borrowing to your net worth? It

also shows the leverage of the banks.It gives the solvency of thefirms.

=LONG TERM DEBTS/NET WORTH

PNB SBIBank of

Baroda

Canara

Bank

Bank of

India

Debts (Rs. Crs.) 37,264.27 127,005.57 23,573.05 15,525.39 32,114.23

Net Worth(Rs.

Crs) 27,817.08 83,951.20 27,476.85 22,689.96 20,961.79Debt Equity

Ratio 1.34 1.51 0.86 0.68 1.53

Average of the Industry if you take these big players = 1.19 (Mar 12)


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STRENGTHS

1) The bank personnel would be able to readily embrace the use of IT.

2) An existing pool of qualified knowledge-based personnel wouldcontribute largely to the IT initiatives.

3) The financial position of the bank was very sound. There would not beany constraint of funds to facilitate IT initiatives.

4) The bank wasn't bound to too much legacy systems and equipment.

WEAKNESSES

1) Different Unix OS flavors in different branches.

2) Different standalone financial applications on PCs at different branches.

3) Lack of interoperability due to disparity in systems.

4) Limited expertise on the software packages currently deployed. Thisincreased dependence on vendors.

5) Systems audits were pending.

6) Most branches did not have a proper LAN in place.

7) There was almost no WAN connectivity.

OPPORTUNITIES

1) More control through Dashboard for Senior Management covering allKPIs related to Deposits, Advances, Profits, NPAs, etc

2) Data Mining Infrastructure Capabilities for mathematical and statisticalmodelling to determine and predict correlation, patterns, and trends amonga variety of measures.

3)Compete more effectively with Private players through CustomerAnalytics covering Customer Profiling, Customer Segmentation, Lead

Analysis & Cross Sell Analysis

THREATS

1) Lack of continuous Support from Management

2) Lack of consistent data for implementing the project

3) Lack of support from Managers to go online and use of new technology

SWOT


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STRENGTHS

1) The bank personnel would be able to readilyembrace the use of IT.

2) An existing pool of qualified knowledge-based

personnel would contribute largely to the ITinitiatives.

3) The financial position of the bank was verysound. There would not be any constraint of funds

to facilitate IT initiatives.

4) The bank wasn't bound to too much legacysystems and equipment.


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WEAKNESSES

1) Different Unix OS flavors in different branches.

2) Different standalone financial applications on PCs atdifferent branches.

3) Lack of interoperability due to disparity in systems.

4) Limited expertise on the software packages currentlydeployed. This increased dependence on vendors.

5) Systems audits were pending.6) Most branches did not have a proper LAN in place.

7) There was almost no WAN connectivity.


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OPPORTUNITIES

1) More control through Dashboard for SeniorManagement covering all KPIs related to Deposits,

Advances, Profits, NPAs, etc

2) Data Mining Infrastructure Capabilities formathematical and statistical modelling to determineand predict correlation, patterns, and trends among avariety of measures.

3)Compete more effectively with Private playersthrough Customer Analytics covering CustomerProfiling, Customer Segmentation, Lead Analysis &Cross Sell Analysis


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THREATS

1) Lack of continuous Support from

Management2) Lack of consistent data forimplementing the project

3) Lack of support from Managers to goonline and use of new technology


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CONCLUSION

Forbes Global 2000 Ranking : PunjabNational Bank was ranked 1243 inthe Forbes Global 2000.

The bank has been ranked 248th biggestbank in the world by the Bankers Almanac,London.

Punjab National Bank is one of the BigFour banks of India, along with ICICIBank, State Bank of India, Bank ofBaroda and HDFC Bankits main

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Punjab National Bank PPT