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CHAPTER 1
INTRODUCTION
GENERAL INTRODUCTION
BANKING
Banking, the business of providing financial services to consumers and
businesses. The basic services a bank provides are checking accounts, savings
accounts and time deposits that can be used to save money for future use; loans
that consumers and businesses can use to purchase goods and services; and
basic cash management services such as check cashing and foreign currency
exchange.
TYPES
Four types of banks specialize in offering these basic banking services:
1) commercial banks,
2) savings and loan associations,
3) savings banks, and
4) credit unions.
A broader definition of a bank is any financial institution that receives, collects,
transfers, pays, exchanges, lends, invests, or safeguards money for its
customers. This broader definition includes many other financial institutions that
are not usually thought of as banks . These institutions include finance
companies, investment companies, investment banks, insurance companies,
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pension funds, security brokers and dealers, mortgage companies, and real
estate investment trusts.
PURPOSE
Banking services serve two primary purposes. First, by supplying customers with
the basic mediums-of-exchange (cash, checking accounts, and credit cards),
Second, by accepting money deposits from savers and then lending the money
to borrowers, banks encourage the flow of money to productive use and
investments. This in turn allows the economy to grow.
Enabling the flow of money from savers to investors is called financial
intermediation, and it is extremely important to a free market economy.
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OBJECTIVES OF THE STUDY
The vital objectives of this project are-
To enhance and sharpens skill.
To get awareness about changing business environment in banking.
To understand the retail banking process.
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INDUSTRY PROFILE
ORIGIN AND DEVELOPMENT OF INDUSTRY
Banking in India
Banking in India originated in the first decade of 18th century. The General Bank
of India came into existence in 1786. This was followed by Bank of Hindustan.
Both these banks are now defunct. The oldest bank in existence in India is the
State Bank of India being established as "The Bank of Bengal" in Calcutta in
June 1806. A couple of decades later, foreign banks like Credit Lyonnais started
their Calcutta operations in the 1850s. At that point of time, Calcutta was the
most active trading port, mainly due to the trade of the British Empire, and due to
which banking activity took roots there and prospered. The first fully Indian
owned bank was the Allahabad Bank, which was established in 1865.
By the 1900s, the market expanded with the establishment of banks such as
Punjab National Bank, in 1895 in Lahore and Bank of India, in 1906, in Mumbai -
both of which were founded under private ownership. The Reserve Bank of India
formally took on the responsibility of regulating the Indian banking sector from
1935. After India's independence in 1947, the Reserve Bank was nationalized
and given broader powers.
The banking in India was controlled and dominated by the presidency banks,
namely, the Bank of Bombay, the Bank of Bengal, and the Bank of Madras -
which later on merged to form the Imperial Bank of India, and Imperial Bank of
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India, upon India's independence, was renamed the State Bank of India. The
presidency banks were like the central banks and discharged most of the
functions of central banks. They were established under charters from the British
East India Company. The exchange banks, mostly owned by the Europeans,
concentrated on financing of foreign trade. Indian joint stock banks were
generally under capitalized and lacked the experience and maturity to compete
with the presidency banks, and the exchange banks. There was potential for
many new banks as the economy was growing.
Under these circumstances, many Indians came forward to set up banks, and
many banks were set up at that time, and a number of them set up around that
time continued to survive and prosper even now like Bank of India and
Corporation Bank, Indian Bank, Bank of Baroda, and Canara Bank
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GROWTH AND PRESENT STATUS OF THE INDUSTRY
By the 1960s, the Indian banking industry has become an important tool to
facilitate the development of the Indian economy. At the same time, it has
emerged as a large employer, and a debate has ensued about the possibility to
nationalize the banking industry. Indira Gandhi, the-then Prime Minister of India
expressed the intention of the GOI in the annual conference of the All India
Congress Meeting in a paper entitled "Stray thoughts on Bank Nationalisation."
The paper was received with positive enthusiasm. Thereafter, her move was
swift and sudden, and the GOI issued an ordinance and nationalised the 14
largest commercial banks with effect from the midnight of July 19, 1969.
Jayaprakash Narayan, a national leader of India, described the step as a
"masterstroke of political sagacity." Within two weeks of the issue of the
ordinance, the Parliament passed the Banking Companies (Acquition and
Transfer of Undertaking) Bill, and it received the presidential approval on 9th
August, 1969.
A second dose of nationalisation of 6 more commercial banks followed in 1980.
The stated reason for the nationalisation was to give the government more
control of credit delivery. With the second dose of nationalisation, the GOI
controlled around 91% of the banking business of India.
After this, until the 1990s, the nationalised banks grew at a pace of around 4%,
closer to the average growth rate of the Indian economy.
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Liberalisation
In the early 1990s the then Narasimha Rao government embarked on a policy of
liberalisation and gave licenses to a small number of private banks, which came
to be known as New Generation tech-savvy banks, which included banks such
as UTI Bank (the first of such new generation banks to be set up), ICICI Bank
and HDFC Bank. This move along with the rapid growth in the economy of India,
kick started the banking sector in India, which has seen rapid growth with strong
contribution from all the three sectors of banks, namely, government banks,
private banks and foreign banks.
The next stage for the Indian banking has been setup with the proposed
relaxation in the norms for Foreign Direct Investment, where all Foreign Investors
in banks may be given voting rights which could exceed the present cap of
10%,at present it has gone up to 49% with some restrictions.
The new policy shook the Banking sector in India completely. Bankers, till this
time, were used to the 4-6-4 method (Borrow at 4%; Lend at 6%; Go home at 4)
of functioning. The new wave ushered in a modern outlook and tech-savvy
methods of working for traditional banks. All this led to the retail boom in India.
People not just demanded more from their banks but also received more.
Current scenario
Currently (2008), overall, banking in India is considered as fairly mature in terms
of supply, product range and reach. Even though reach in rural India still remains
a challenge for the private sector and foreign banks. Even in terms of quality of
assets and capital adequacy, Indian banks are considered to have clean, strong
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and transparent balance sheets-as compared to other banks in comparable
economies in its region.
Indian economy is expected to be strong for long time-especially in its services
sector. The demand for banking services-especially retail banking, home loans
and investment services are expected to be strong.
In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase its
stake in Kotak Mahindra Bank (a private sector bank) to 10%. This is the first
time an investor has been allowed to hold more than 5% in a private sector bank.
Currently, India has 88 scheduled commercial banks (SCBs) - 28 public sector
banks (that is with the Government of India holding a stake), 29 private banks
(these do not have government stake) and 31 foreign banks.
They have a combined network of over 55,000 branches and 17,000 ATMs.
According to a report by ICRA Limited, a rating agency, the public sector banks
hold over 75 percent of total assets of the banking industry, with the private and
foreign banks holding 18.2% and 6.5% respectively.
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Total Income Wise Listing1
Bank Name Number of BranchesNo.of
Employees
Total Income(Rs
Mn)
Net Profit
(Rs Mn) State Bank of India 9143 198774 431836 44067
ICICI Bank Limited 557 25479 187676 25401
Punjab National Bank 4066 58047 108153 14393
Canara Bank 2532 46893 100890 13432
Bank of Baroda 2687 38737 82917 8270
Bank of India 2563 41808 82131 7014
Industrial Development Bank of India Limited
173 4548 66612 5609
Union Bank of India 2095 25421 64888 6752
Central Bank of India 3143 37241 59164 2574
HDFC Bank Limited 515 14878 55993 8708
Indian Overseas Bank 1523 24178 51345 7834
UCO Bank 1749 24510 48183 1966
Oriental Bank of Commerce 1161 14962 46717 5572
Syndicate Bank 1897 24624 46420 5365
Allahabad Bank 1932 18742 43739 7061
1 Source : http://www.dnb.co.in/topbanks/company_listing.asp?q=Total_Income
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FUTURE OF THE INDUSTRY
A healthy banking system is essential for any economy striving to achieve good
growth and yet remain stable in an increasingly global business environment.
The Indian banking system, with one of the largest banking networks in the
world, has witnessed a series of reforms over the past few years like the
deregulation of interest rates, dilution of the government stake in public sector
banks (PSBs), and the increased participation of private sector banks. The
growth of the retail financial services sector has been a key development on the
market front. Indian banks (both public and private) have not only been keen to
tap the domestic market but also to compete in the global market place. New
foreign banks have been equally keen to gain a foothold in the Indian market.
The momentum in credit growth has been maintained during 2005-06 due to two
factors: The corporate sector has stepped up its demand for credit to fund its
expansion plans; there has also been a growth in retail banking. However, even
as the opportunities increase, there are some issues and challenges that Indian
banks will have to contend with if they are to emerge successful in the medium to
long term. This report discusses these issues and challenges -- both intrinsic and
external, such as
Risk management and Basel II
The future of banking will undoubtedly rest on risk management dynamics. Only
those banks that have efficient risk management system will survive in the
market in the long run. The effective management of credit risk is a critical
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component of comprehensive risk management essential for long-term success
of a banking institution.
Although capital serves the purpose of meeting unexpected losses, capital is not
a substitute for inadequate decontrol or risk management systems. Coming years
will witness banks striving to create sound internal control or risk management
processes.
With the focus on regulation and risk management in the Basel II framework
gaining prominence, the post-Basel II era will belong to the banks that manage
their risks effectively. The banks with proper risk management systems would not
only gain competitive advantage by way of lower regulatory capital charge, but
would also add value to the shareholders and other stakeholders by properly
pricing their services, adequate provisioning and maintaining a robust financial
structure.
‘The future belongs to bigger banks alone, as well as to those which have
minimised their risks considerably.’
Consolidation
Consolidation, which has been on the counter over the last year or so, is likely to
gather momentum in the coming years. Post April 2009, when the restrictions on
operations of foreign banks will go, the banking landscape is expected to change
dramatically. Foreign banks, which currently account for 5% of total deposits and
8% of total advances, are devising new business models to capture the Indian
market. Their full-fledged entry is expected to transform the business of banking
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in many ways, which would be reflected in terms of greater breadth of products,
depth in delivery channels and efficiency in operations.
Thus Indian banks have less than three years to consolidate their position.
Despite the stiff resistance from certain segments, consolidation holds the key to
future growth. This view is underpinned by the following:
► Owing to greater scale and size, consolidation can help save costs and
improve operational efficiency.
► Banks will also have to explore different avenues for raising capital to meet
norms under Basel-II
► Owing to the diversified operations and credit profiles of merging banks,
consolidation is likely to serve as a risk-mitigation exercise as much as a growth
engine.
Though there is no confirmation yet, speculative signals arising from the market
point to the prospect of consolidation involving banks such as Union Bank of
India, Bank of India, Bank of Baroda, Dena Bank, State Bank of Patiala, and
Punjab and Sind Bank. Further, the case for merger between stronger banks has
also gained ground — a clear deviation from the past when only weak banks
were thrust on stronger banks. There is a case being made for mergers between
banks with a distinct geographical presence coming together to leverage their
respective strengths.
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GLOBALIZATION/ OVERSEAS EXPANSION
Growing integration of economies and the markets around the world is making
global banking a reality. The surge in globalization of finance has already begun
to gain momentum with the technological advancements which have effectively
overcome the national borders in the financial services business. Widespread
use of internet banking will widen frontiers of global banking, and make
marketing of financial products and services on a global basis possible. In the
coming years globalization will spread further on account of the likely opening up
of financial services under WTO. India is one of the 104 signatories of Financial
Services Agreement (FSA) of 1997. This gives India’s financial sector including
banks an opportunity to expand their business on a quid pro quo basis.
As per Indian Banks' Association report ‘Banking Industry Vision 2010’, there
would be greater presence of international players in Indian financial system and
some of the Indian banks would become global players in the coming years. So,
the new mantra for Indian banks is to go global in search of new markets,
customers and profits.
TECHNOLOGY
There is an imperative need for not mere technology upgradation but also its
integration with the general way of functioning of banks to give them an edge in
respect of services provided to their constituents, better housekeeping,
optimizing the use of funds and building up of MIS for decision making, better
management of assets & liabilities and the risks assumed which in turn have a
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direct impact on the balance sheets of banks as a whole. Technology has
demonstrated potential to change methods of marketing, advertising, designing,
pricing and distributing financial products and services and cost savings in the
form of an electronic, self-service product delivery channel. These challenges call
for a new, more dynamic, aggressive and challenging work culture to meet the
demands of customer relationships, product differentiation, brand values,
reputation, corporate governance and regulatory prescriptions. Technology holds
the key to the future success of Indian Banks.
Internet, wireless technology and global straight-through processing have
created a paradigm shift in the banking industry. The explosive growth of both
the Internet and mobile and wireless technology is revolutionizing the way the
financial industry conducts business. The overall wireless technology market is
expected to grow profoundly in the coming years.
REGULATIONS
The RBI's approval for banks to raise funds abroad through innovative capital
instruments holds great significance. Such fund-raising, which includes
preference shares, will, however, not just substitute equity; it could have
unintended consequences on the strategies of banks and their profitability. While
the cost of raising monies through such instruments is likely to be higher (close to
10 per cent), the consequent higher leverage on equity funds is likely to result in
expansion of return on net worth. This is because the same amount of capital
supports a higher volume of business, generating higher profits.
Banks are likely to be able to raise long-term preference shares at coupon rates
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between six per cent and eight per cent. The positive impact on bank profitability
could thus be significant.
Preference capital can be used as the currency for acquisition. The advantage
for public sector banks is that they no longer need to bother about government
stake falling below 51 per cent. Banks such as Dena Bank, Oriental Bank of
Commerce and Andhra Bank are most likely to benefit from this move.
SKILLED MANPOWER
There will be a sea change for employees too. Secure jobs will be replaced by
contractual appointments, for a specified period of time. The unions will merge
into the shadows and bank managements will turn effective. As a result there will
be swifter turn over of personnel in banks. But at the same time, skilled
personnel from other disciplines will enter banks in increasing numbers.
Factors like skills, attitudes and knowledge of the human capital play a crucial
role in determining the competitiveness of the financial sector. The quality of
human resources indicates the ability of banks to deliver value to customers.
Capital and technology are replicable but not the human capital which needs to
be valued as a highly valuable resource for achieving that competitive edge.
Business model, which comprises a comprehensive range of business solutions
delivered through a unique balance of portfolio and relationship management
must be incorporated.
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FUTURE CHALLENGES & SUGGESTIONS
Competition
Challenges
Customer Retention
Globalization
Shrinking Margin
SUGGESTIONS
Strong In-house research & market Intelligence
Focused marketing- Focus on region-specific campaigns rather than
national media campaigns
The growth of the retail financial services sector has been a key development on
the market front. Indian banks (both public and private) will not only be keen to
tap the domestic market but also to compete in the global market place. New
foreign banks will be equally keen to gain a foothold in the Indian market.
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ORIGIN OF THE ORGANIZATION
Punjab National Bank was established in the year 1895 found by Punjab Kesari
Shri Lala Lajpat Rai at Lahore (now in Pakistan) as a joint stock company. After
the partition in 1947, the bank grew steadily with its presence at the important
centers and metropolitan cities of the country and emerged as one of the big five
Indian banks during pre-nationalized period.
The bank was nationalized in 1969 along with 13 other banks. Subsequently, in
1993 it took over the New Bank of India, another bank that was nationalized in
1980. In 2003 the Nedungadi Bank Ltd., a south based private sector bank also
merged the bank. Thus the bank, which previously had its main business area
around the Indo-Gangetic belt and major metros, could ensure its remarkable
presence in the entire country.
Presently, it is the second largest bank of the country rendering a wide variety of
banking services (corporate/personal/industrial finance/agriculture
finance/financing of trade and commerce/international banking). It has a broad
clientele base like Multi National Corporation, Indian Conglomerates,
medium/small industrial units and NRI’s. As a bank with global standard, it was
ranked 416th among the biggest bank in the world by the banker’s Almanac in
2002.The bank is member of the SWITY (society for Worldwide International
Financial Telecommunication) and has strong correspondent relationship with the
leading international banks. Continued financial sector reforms led to greater
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alignment of financial sector to the competition business environment.
Operational and supervisory practices in the sector have been progressively
matching international standards. In the process Indian banking system is
becoming increasingly mature in terms of transformation of business process and
risk management. The head office of the Bank is at, Bhikaji Cama Place, New
Delhi.
The bank also has subsidiaries like PNB Gilts Ltd., PNB Housing Finance Ltd.,
PNB Capital Services Ltd., PNB Assets Management Co .Ltd.
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GROWTH AND DEVELOPMENT OF THE ORGANIZATION
To evolve and position the bank as a world class, progressive, cost-effective and
customer friendly institution providing comprehensive financial and related
services: integrating frontiers of technology and serving various segment of
society especially the weaker section of the society: committed to excellence in
serving the public and also excelling in the corporate values.
Corporate excellence emanate from good corporate governance exercised by
adopting standard of transparency, accountability, professionalism, social
responsiveness, and ethical business practices with this in view, the has been
making efforts for adopting the best practices. The bank commitment towards
corporate governance is to bestow greater transparency and openness in the
management and to ensure best performance by staff atall the levels to
maximize the operational efficiency. Adopting the corporate governance as a
work ethos, the bank is committed to enhancing the stakeholders value.
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PRESENT STATUS OF THE ORGANIZATION
With its presence virtually in all the important centers of the country, Punjab
National Bank offers a wide variety of banking services which include corporate
and personal banking, industrial finance, agricultural finance, financing of trade
and international banking. Among the clients of the Bank are Indian
conglomerates, medium and small industrial units, exporters, non-resident
Indians and multinational companies. The large presence and vast resource
base have helped the Bank to build strong links with trade and industry.
Punjab National Bank is serving over 3.5 crore customers through 4540 Offices
including 421 extension counters - largest amongst Nationalized Banks.
Punjab National Bank with 112 year tradition of sound and prudent banking is
one among 300 global companies and seven Indian companies which are
expected to emerge as challengers to World’s leading blue chip companies.
While among top 1000 world banks, “The Banker”, the leading magazine in
London, has placed PNB at the 248th position, the bank features at 1308th
position among Forbe’s Global 2000 list of global giants and fast growing
companies.
At the same time, the bank has been conscious of its social responsibilities by
financing agriculture and allied activities and small scale industries (SSI).
Considering the importance of small scale industries bank has established 31
specialised branches to finance exclusively such industries.
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Strong correspondent banking relationship which Punjab National Bank
maintains with over 200 leading international banks all over the world enhances
its capabilities to handle transactions world-wide. Besides, bank has Rupee
Drawing Arrangements with 15 exchange companies in the Gulf and one in
Singapore. Bank is a member of the SWIFT and over 150 branches of the bank
are connected through its computer- based terminal at Mumbai. With its state-of-
art dealing rooms and well-trained dealers, the bank offers efficient forex dealing
operations in India.
The bank has been focusing on expanding its operations outside India and has
identified some of the emerging economies which offer large business potential.
Bank has set up representative offices at Almaty: Kazakhistan, Shanghai: China
and in London. Besides, Bank has opened a full fledged Branch in Kabul,
Afghanistan.
Keeping in tune with changing times and to provide its customers more efficient
and speedy service, the Bank has taken major initiative in the field of
computerization. All the Branches of the Bank have been computerized. The
Bank has also launched aggressively the concept of "Any Time, Any Where
Banking" through the introduction of Centralized Banking Solution (CBS) and
over 2409 offices have already been brought under its ambit.
PNB also offers Internet Banking services in the country for Corporate as well as
individuals. Internet Banking services are available through all Branches of the
Bank networked under CBS. Providing 24 hours, 365 days banking right from the
PC of the user, Internet Banking offers world class banking facilities like anytime,
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anywhere access to account, complete details of transactions, and statement of
account, online information of deposits, loans overdraft account etc. PNB has
recently introduced Online Payment Facility for railway reservation through
IRCTC Payment Gateway Project and Online Utility Bill Payment Services which
allows Internet Banking account holders to pay their telephone, mobile,
electricity, insurance and other bills anytime from anywhere from their desktop.
Another step taken by PNB in meeting the changing aspirations of its clientele is
the launch of its Debit card, which is also an ATM card. It enables the card holder
to buy goods and services at over 99270 merchant establishments across the
country. Besides, the card can be used to withdraw cash at more than 25000
ATMs, where the 'Maestro' logo is displayed, apart from the PNB's over 1094
ATMs and tie up arrangements with other Banks
Latest Quarterly/Half yearly Income statement 2
As on(Months) 31-Mar-08(3) 31-Mar-07(3) % Change
Interest Income 38797.90 31944.00 21.46
Other Income 5372.10 5183.90 3.63
Total Income 44170.00 37127.90 18.97
Interest Expenses 23625.10 17713.70 33.37
Other Expenses 8277.10 10590.70 -21.85
Provision & Contingencies 1676.70 6126.90 -72.63
OPBDT 10591.10 2696.60 292.76
Depreciation 0.00 0.00 --
Extra-Ordinary / Cash Adjustment 0.00 0.00 --
Provision for Tax 5153.50 319.60 1512.48
After tax Profit 5437.60 2377.00 128.76
Equity Capital 3153.00 3153.00 0.00Reserves 104673.50 98263.10 6.52
22source:http://www.dnb.co.in/topbanks/company_listing.asp?q=Total_Income
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FUTURE PLANS OF THE ORGANIZATION
To provide excellent professional services and improve its position as a leader in
the field of finance and related service, build and maintain a team of motivated
and committed workforce with high work ethos; uses latest technology aimed at
customer satisfaction and act as effective catalyst for socio-economic
development.
The bank is committed to its corporate mission to provide excellent professional
services and improve its position as leader in the field of financial and related
services, build, maintain a team of motivation and committed workforce with high
work ethos, use latest technology, aimed at customers and act as an effective
catalyst of socio-economic development.
Punjab National Bank has focused quite a bit in rural areas, which is actually
needed for our country. Their ATMs are given the facility of English, National
Language Hindi and the local language of the state. They also provide mobile
top-up facility.
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FUNCTIONAL DEPARTMENTS OF THE ORGANIZATION
Executive cards of the organization. They are Executive Director, General
Manager (GM), Deputy General Managers (DGM), assistant General Managers
(AGM), Chief Managers (CM), Managers and other officers are in the hierarchy
at the head office level functioning in various Departments.
The Zonal Manager and regional Managers head the Zonal Offices and Regional
Officers respectively who are assisted by other down in the hierarchy. The
Branch is headed by AGM\CM\ Senior Managers\Managers depending upon the
size of the Branch activities and rendering of satisfactory customer service.
The bank has a very good system of delegating power to the different
functionaries in the hierarchy to facilitate speedy decision- making process even
up to the branch Level.
HEAD OFFICE
ZONAL OFFICES
REGIONAL OFFICES
BRANCHES
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2.6 Organization chart 3
PRODUCT AND SERVICE PROFILE OF THE ORGANIZATION
3 Source : Bank administration
Mr. C.S. Kshatriya (Dy. Manager)
Mr. Rajesh Menon(C.T.O)
Mr. S.K Jindal(C.T.O)
Mr. Ajit Singh Rana
(Clerk)
Mr. J.D Mittal(Clerk)
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Mr. O.P Arora(Branch Manager)
Mr. Rajbir Singh (Manager)
Presently, it is the second largest bank of the country rendering a wide variety of
banking services:
CENTRALISED BANKING SOLUTION (CBS)
CBS, an inter-branch networking and data-sharing platform helps
to operate account from any city in India having CBS networked
branches. Changing status from Customer of the Branch’ to ‘Customer of the
Bank’, presently, there are over 2,616 CBS networked brandies in 820 cites,
NRI’S & TOURISTS
Currency exchange services are being provided by our 68
Exchange Bureau’s spread throughout the country
ONLINE TAX PAYMENT
PNB provides the facility of online payment of service tax, excise
duty, DGFT, custom duty & all charges urlderMCA2l
CASH MANAGEMENT SERVICE (CMS)
PNB’s CMS facilitates management of receivables and payments
in technology driven environment, ensuring availability of funds at
reduced cost, helping reconciliation at multi location accounts
besides providing customized MIS.
MUTUAL FUNDS & INSURANCE
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The bank has tied-up with Principal Financial Group for providing Mutual Funds
and Insurance services & also tied up for distribution & marketing of UTI Mutual
Funds.
NRI SERVICES
NRE, FCNR, RFC, NRO Deposit a/c investment Management &
Housing Loan facilities for NRI’s.
FOREIGN EXCHANGE
PNB has 150 branches authorized for handling foreign exchange
business and these branches have been provided with SWIFT
connectivity to ensure faster realisation of funds.
e-MONEYINDIA
Send money to the loved ones in India through PNB’s e-
MoneyIndia service. Draft delivery across 4,038 locations and
Bank Credit to over 2,500 branches in India.
ONLINE RAILWAY RESERVATION/AIR TICKET BOOKING
Say goodbye to long queues. PNB offers online booking &
information through IRCTC payment gateway. Just click and
travel comfortably.
DEPOSITORY SERVICE
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PNB Depository service provides the facility of having shares & securities in
Demat form & executes transactions of sales & purchase hassle free
electronically.
LOCKERS
Now, customer can relax with assurance of having your locker at
the PNB branch nearest to their home.
CUSTOMER CARE FACILITY
All the banking queries and problems are just a call away! PNB
presents 24 hr. customer care facility. Call at toll free no. at 1800
180 2222 from MTNL/BSNL or 0124-2340000 from other no.s
PNB GOLD COIN
PNB gives opportunity to dazzle the well wishers, patrons,
partners and acquaintances with the mystical charisma of PNB’s
999.9 fineness pure 24-carat gold coins and to convey the true
value of treasured relationship. Enjoy guarantee of purity & weight of hallmarked
gold coins.
ELECTRONIC CLEARING SERViCE (ECS) & ELECTRONIC FUNDS
TRANSFER (EFT)
Avail ECS for quick movement of funds in a paperless mode & EFT to ensure an
expeditious transfer of funds by using electronic media.
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WEALTH MANAGEMENT SERVICE
PNB provides customized financial advisory services for
individuals that includes Mutual Funds, insurance, Retirement
Planning, Tax planning, & Debt Management to customers for
wealth maximization
ONLINE BILL PAYMENT
No more queues to pay your bills. Now pay telephone, mobile,
electricity, insurance & several other bills 24 hours, 365 days,
from the desktop.
LOANS
CAR LOAN/2 WHEELER LOAN
Drive dream car/bike home. PNB gives loan for the purchase of
new/old car, van or jeep, new bike at very attractive interest rates
with a convenient repayment period.
LOAN AGAINST JEWELLERY
Loan against Gold & Jewellery for individuals/business
enterprises, both for business & personal needs.
TRADERS LOAN
Maximize business turnover with PNB traders loan with minimum
paper work and attractive rate of interest, for whole sellers,
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dealers, distributors, individuals, firms, registered cooperative societies &
companies. Loans also available for purchase of shop /showroom.
HOUSING LOAN
Bring own dream home to life. Avail ‘flexi’ housing loan and have
the advantage of substantial savings on the interest component.
Insurance cover for home loan borrowers available.
PERSONAL LOANS
A scheme to meet all types of personal needs, for
permanent/confirmed employees/Defence Personnel and
Professionally Qualified Doctors.
CORPORATE LOANS
Corporate can expand & diversify with user friendly Corporate
Loans Products Working Capital, Term Loan, Bank Guarantee,
Letter of Credit & others.
EDUCATIONAL LOAN
Avail “Sarvottam Shiksha & Vidyalakshyapurti” schemes for
studies In India & abroad and ensure a great career for child.
PNB GRAMIN CHIKITSAK
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Scheme for financing qualified medical practitioners for setting up clinics in rural
areas at concessional rate of interest.
LOAN TO PENSIONERS
PNB values the traditions of India by giving special benefits to the
senior citizens.
LOANS TO WOMEN
PNB’s “Mahila Sashaktikaran Abhiyaan” & “Mahila Samridhi
Yojana” give special benefits to women customers that help in
building their confidence & self-esteem.
DEPOSITS
PNB MET LIFE
Delighting depositors with life insurance by extending the facility
of insurance cover (death only) to all Saving Fund & Current
Account (Individuals) holders.
PNB VIDYARTHI ACCOUNT
Empowering the young generation with a zero balance account
for students with overdraft facility.
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TOTAL FREEDOM SALARY ACCOUNT
Discover the freedom of flexibility with PNB’s Total Freedom
Account. A zero balance account for employees having salary
account in the bank, with overdraft facility.
PNB TAX SAVER
PNB offers term deposit scheme to avail tax benefit under Sec
80(C)2 (xxi) of income Tax Act.
PNBMITRA
PNB offers no frill saving account for financial inclusion -
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MARKET PROFILE OF THE ORGANIZATION
Today, PNB operates 4,070 branches and 443 service counters across the
country, consolidating its position as one of the top nationalized banks of India.
PNB has been ranked at395Th position amongst the top 1000 global banks by
the prestigious international publication The Banker.
Like other scheduled banks in India, the PNB also comes under the guidance of
the Reserve Bank of India (RBI) and as a government establishment, it has to
follow directions of the government. Two directives, one from the Reserve Bank
of India and the other from India’s Department of Official languages are key in
this context. In 1985, the Department of Official Languages mandated that all
electronic equipment used in ministries and departments of the government and
their attached and subordinate offices would need to be bilingual. That is, they
should be able to handle both Hindi and English. By the year 2000, the Reserve
Bank of India had mandated that banks should have a clear IT plan that should
be implemented: that at least 7O percent of all branches should be
computerized.
With technology emerging as a key driver of business growth, the bank has taken
a number of IT initiatives to provide its large clientele spread all across the
country with the best of technology while retaining the all- essential human
warmth. Its core banking system (CBS) already acts as a single data bank, a
backbone to 2,108 service outlets with internet banking services spread over 28
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states in the country. This deployment has lent PNB the status of being the
largest core banking system in Asia.
The bank has 676 ATMs and also coordinates with the MITR group of six banks
with 2,200 ATMs. PNB is a member of Institute Development and Research in
Banking Technology (IDRBT)-sponsored National Financial Switch (NFS) for
mutual ATM transactions. NFS at present has 18 banks and a pool of 6,197
ATMs. PNB has also pioneered the cheque truncation system in India. Other
software fuelling the systems are instant fund transfer mechanism, data
warehouse for decision control and MIS and risk management software based on
Basel II guidelines set by the Bank for International Settlements.
About 77 percent of its business is connected through leased lines, ISDN and
VPN. Other services such as mobile banking utility bill payments, funds transfer,
e-commerce and CRM through mobile shall be introduced for the PNB branches
including setting up a network operating centre (NOC) to monitor the CBS
network.
RELATIVE PERFORMANCE
Spreads: PNB has the best margins in the banking sector.
Return Parameters: On both the return parameters i.e. return on average
asset and return on average networth, PNB is close to the average of the
peer set.
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Asset Quality: PNB’s asset quality as measured by the net NPA ratio is
on the higher side. It is just better than the largest scheduled commercial
bank i.e. SBI.
Coverage Ratio: The provision coverage ratio third best after HDFC Bank
and OBC in our set of banks.
Operating Efficiency: PNB’s cost to income ratio is higher than the
average of the peer set. However, we believe that once the technological
platforms are put in place, the bank will be able to bridge the gap with the
numero uno in this regard.
CHART FOR RELATIVE PERFORMANCE OF BANKS 2
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CHAPTER 3
DISCUSSION ON TRAINING
STUDENT’S WORK PROFILE (ROLE AND RESPONSIBILITY)
I worked as a management trainee in Punjab National Bank, Mukundpur Branch,
I was responsible for multiple type of work involved in banking which our services
best in the industry.
Customers Service
This is the counter where customer interacts with the bank personnel firstly.
Here, I got a chance to know about the different problems of the customers
visiting the bank. I helped them to solve their different problems which are as
follows:-
Query solutions:
Solving their Different queries such as:-
Document required for new a/c
Documents for loan
Requirement for new ATM card
Providing different forms for different purposes
Documents for Micro finance
New account opening:
To help the customer in opening the new account by filling up their forms along
with scrutinizing their documents. This includes checking of residence proof,
address proof and witness required. Then generating account number and
customer Id in the presence of banking employee.
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Frills Account
They are also known as PNB MITR account. These are the zero balance account
specially created for these poor peoples. This account has the facility to avail the
overdraft limit of up to Rs.3,000. The branch has opened 40,000 accounts by 30
June.
Cheque clearing
This includes checking the cheque details like date of cheque, account number of
the customer, signature of the customer.
Loan department
It includes clearing of various types of loans including personal loans, vehicle
loan, home loan etc. In the branch I got a chance to visit the working site of the
loan applicant with the bank personnel.
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DESCRIPTION OF LIVE EXPERIENCE
The first day in this industry made me feeling like in a heaven because this was
my first step toward my dream and this was a new thing for me, this was practical
exposure because till now I read only in books about banking ,first day when I
reached bank premises at 9:30 am ,I saw crowd of over 100 people waiting
outside the bank .
I usually worked under the supervision and direction of the asst. manager
Mr.Rajveer Singh. He gave me different responsibilities as per the need, and at
the end of the day I had to report the full day’s work to him.
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Procedural Chart for new account opening:-
Fill up the form and send for verification
Ask for the necessary documents
If approved If Not
New customers at help desk
Documents checking
Customer ID & A/C No. generated
Verification by Mr.Rajveer
Documents as per rule
If YesIf No
Documents Provided
Application rejected
Pass Book, ATM Card & Check Book issued
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STUDENT’S CONTRIBUTION TO ORGANIZATION
As a Management Trainee I worked in all of teams, as a team member my role
was such as follows:-
Marketing
To collect data from the:
Local community
their existing customers
NGOs and SHG(Self Help Groups).
Cheque clearance
It includes:
Inward cheque clearance
Outward cheques
Verifying Cheque details like date of cheque, a/c no. of the customer,
signature of the customer, cutting on cheque if any.
Loan clearance
It includes:-
Document verification
Site visit with bank employee for Micro loans
Clearance of various types of loans including Micro loan, personal loans,
vehicle loan, etc.
Customer relationship
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Provide information such as:
Providing information about different products such as FD(Fixed
Deposit),RD(Recurring Deposit),mutual funds, Flexible Deposit.
Help in solving problems of customers.
Procedure and conditions for getting loan
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SUMMARY AND CONCLUSIONS
SUMMARY OF LEARNING EXPERIENCE
While working in Punjab National Bank’s 1st Micro Branch of India I got in-depth
knowledge about Micro finance. I recognize that there is a lot more to discover
and learn, I learned to be more responsible, have more patience and most
important it helped me to learn how to handle the work pressure.
I got to know what all different types of question can be asked by a banking
customer, as the branch was in the village area with population of 2 lakh peoples
where there was no other bank’s branch, it was difficult to handle minimum 500-
700 per day with the queries like :
What’s the procedure to open an account?
What’s the procedure to get an ATM card?
What’s the procedure to get a pass book?
What’s the procedure to get a cheque book?
How to fill ATM form?
How to fill all other different forms like cheque clearance form, cash
deposit form, cash withdrawal form, etc.?
Besides the query solution I also filled up the form for the illiterate and old
peoples and helping them for their requirements.
Apart from customer service I got to know about the micro finance and the
procedure and all document required for it and types of people who can get the
micro loan.
OBSERVATIONS AND RECOMMENDATIONS
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It has been observed that to put a new organization into a running position is
much more difficult than to handle a already working organization, manager’s
task is difficult in a banking industry he is the person who is completely liable for
the working of branch. To put a right person at a right job is not an easy task for
the manager.
I observed some of the factors in my branch such as:
Lack of staff
lack of Efficient staff
Brach working space
lack of speed
Lack of quality service
Complicated work procedure
Not providing service on time
Beside all these factors the branch has also achieved some achievements such
as 12000 accounts in 2 days and distribute micro loan of around 5 crore rupees
to different 55 Self Help Groups to start their small businesses.
Opening of 1st Micro branch in India is also a achievement and it is a starting of
new type of banking revolution which can change the life of villagers which
depends on the “MAHAJAN” to lend them money at high interest rate.
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Recommendations : -
With the changing banking system, this branch has also to adapt the new ways
of banking such as:
Shifting new and young staff to this branch
Give them good incentives so that they stay their for longer time period as
per the location
Complicated form should be replace with easy forms
Provide easy norms for new account opening.
Well trained staff be placed to increase work pace and to decrease per
transaction time also.
Local people should be appointed to handle the customers.
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( Annexure)
VARIOUS FORMS USED IN PNB:
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FORM No.60 (For person not having PAN card)
ACCOUNT OPENING FORM
46
Page 1 of 4
47
Page 2 of 4
48
Page 3 of 4
49
Page 4 of 4
CUSTOMER MASTER FORM
Page 1 of 4
50
Page 2 of 4
51
Page 3 of 4
52
Page 4 of 4
53
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List of tables:- Page no.
Table 1:- Total Income Wise Listing of banks - 9
Table 2:- Latest Quarterly/Half yearly Income statement - 22
List of Charts:-
Chart1:- Graphical organizational structure - 25
Chart2:- Chart for relative performance of banks - 35
Chat 3:- Procedural Chart for new account opening - 39
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BIBLIOGRAPHY
Websites:-
www.finance.indiamart.com
www.allbusiness.com
www.ficci.com
www.business.mapsofindia.com
www.pnbindia.com
www.gyanguru.org
www.info.gov.hk
www.indiainfoline.com
www.indiaearnings.moneycontrol.com
www.assamagribusiness.nic.in
www.bna.com/
www.corporateinformation.com
www.outlookmoney.com
www.business-standard.com
Magazine:-
India today
Business world
Businesstoday
END OF REPORT
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