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

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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.

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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 -

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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

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CHAPTER 1

INTRODUCTION

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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

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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

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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

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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

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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

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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

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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

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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

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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.

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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

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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

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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.

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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.

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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.

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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.

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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: itdibs@pnb.co.in

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.

42

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