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CHAPTER-1



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INTRODUCTION TO THE TOPIC

Meaning and definition

Bank is an institution that deals in money and its substitutes and provides crucial

financial services. The principal types of banking in the modern industrial world are

commercial banking & central banking.

Banking Means “Accepting Deposits for the purpose of lending or Investment of deposits

of money from the public, repayable on demand or otherwise and withdraw by cheque,

draft or otherwise”

(Banking Companies (Regulation) Act, 1949)

The concise oxford dictionary has defined a bank as “Establishment for custody of

money which it pays out on customers order." Infact this is the function which the bank

performed when banking originated.

"By banking in the most general sense, is meant the business of receiving, conserving &

utilizing the funds of community or of any special section of it."

--- By H. Wills & J. Bogan

"A banker of bank is a person, a firm, or a company having a place of business where

credits are opened by deposits or collection of money or currency or where money is

advanced and waned.

--- By Findlay Sheras.



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Thus

A bank:

Accept deposits of money from public,

Pays interest on money deposited with it,

Lends or invests money,

Repays the amount on demand,

Allow the money deposited to be with drawn by cheque or draft.

Origin of word bank:

The origin of the word bank is shrouded in mystery. According to one view point the

Italian business house carrying on crude from of banking were called banchi bancheri".

According to another viewpoint banking is derived from German word "branck" which

mean heap or mound. In England, the issue of paper money by the government was

referred to as a 'raising a banks'

Origin of Banking:

Its origin in the simplest form can be traced to the origin of authentic history. After recognizing the benefit of money as a medium of exchange, the importance of banking

was developed as it provides the safer place to store the money. This safe place ultimately

evolved in to financial institutions that accepts deposits and make loans i.e., modern

commercial banks.



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BANKING SYSTEM IN INDIA

A historical perspective:

We can identify there distinct phases in the history of Indian banking:

1. Early phase from 1786-1969.

2. Nationalization of banks and up to 1991 prior to banking sector reforms.

3. New phase of Indian banking with the advent of financial banking.

Banking in India has its origin as early or Vedic period. It is believed that the transitions

from many lending to banking must have occurred even before Manu, the great Hindu

furriest, who has devoted a section of his work to deposit and advances and laid down

rules relating to the rate of interest. During the mogul period, the indigenous banker

played a very important role in lending money and financing foreign trade and

commerce.

During the days of the East India Company it was the turn of agency house to

carry on the banking business. The General Bank of India was the first joint stock bank to

be established in the year 1786. The other which followed was the Bank of Hindustan and

Bengal Bank. The Bank of Hindustan is reported to have continued till 1906. While other two failed in the meantime. In the first half of the 19th century the East India Company

established there banks. The bank of Bengal in 1809, the Bank of Bombay in 1840 and

the Bank of Bombay in 1843. These three banks also known as the Presidency banks

were the independent units and functioned well. These three banks were amalgamated in

1920 and new bank, the Imperial Bank of India was established on 27th

January, 1921.

With the passing of the State Bank of India Act in 1955 the undertaking of the Imperial

Bank of India was taken over by the newly constituted SBI. The Reserve Bank of India

(RBI) which is the Central bank was established in April, 1935 by passing Reserve bank

of India act 1935.The Central office of RBI is in Mumbai and it controls all the other

banks in the country.



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In the wake of swadeshi movement a number of banks with the Indian management were

established in the country namely, Punjab National Bank Ltd., Bank of India Ltd., Bank

of Baroda Ltd., Canara Bank Ltd. on 19th July 1969, 14 major banks of the country were

nationalized and on 15

th

April 1980, 6 more commercial private sector banks were takenover by the government.

TYPES OF BANKS

1. ON THE BASIS OF OWNERSHIP

A) Public sector banks

These are those banks which are owned by the government. The government runs

these banks in India.20 banks were nationalized in 1969 and 1980. All these banks now belong to the public sector category. Their principal objective is social welfare.

B) Private sector banks

These banks are owned and run by the private sector. HDFC, ICICI belong to this

category. An individual has control over these banks in proportion to the shares of the

bank held by him.

C) PNB banks

These banks are those which are jointly run by a group of individuals. Each individual

has an equal share in these banks. Mutual help of the members of PNB banks is their

principal objective.

According to Reserve Bank of India Act, 1935

a) Scheduled banks

These banks have paid up capital of at least as 5 lacks. These are like Joint Stock

Company or a PNB organization. These banks find their mention in the second schedule

of the reserve banks.

b) Non-scheduled banks



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These banks are not mentioned in the second schedule of reserve bank. Paid up capital of

these banks is less than Rs. 5 lacks.

According to functions

a) Commercial banks

These banks provide short term loans to the public and business establishments and keep

their deposits with them. PNB, HDFC are egs. of such banks.

b) Foreign Exchange Banks

These banks after credit only for foreign trade & their principle function are to make

credit arrangement for export and import of the country & they convert the domesticcurrency into foreign currencies and vice-versa.

c) Saving Bank

Principle function of these banks is to collect small savings across the country & put

them into productive use. In India department of post officer function as saving bank.

d) Agricultural Bank

These are those banks which give credit to agricultural sector of the economy. To fulfill

agriculture credit needs at the national level, national Bank for Agricultural and Rural

Development (NABARD) has been established.

(e) Central Bank

Central bank is the apex Bank of the banking system of the country performs central

banking functions & controls all the other banks in the country. RBI is the central Bank

of India established in 1935. It‟s central office in Mumbai.

F) Indigenous Bank

These banks contributed to the development of agricultural & industrial sector before

independence. Mahagans, rural money lenders have been the fore runner of these banks

in India.



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FUNCTIONS OF BANKS

Primary functions

Acceptance of deposits

Making loans & advances

Loans

Overdraft

Cash credit

Discounting of bills of exchange

Secondary functions

Agency functions

Collection of cheques & bills etc.

Collection of interest and dividends.

Making payment on behalf of customers

Purchase & sale of securities

Facility of transfer of funds

To act as trustee & executor.

Utility functions

Safe custody of customer‟s valuable articles & securities.

Underwriting facility.

Issuing of traveler‟s cheque & letter of credit.

Facility of foreign exchanges

Providing trade information

Provide information regarding credit worthiness of their customer.



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GENERAL BANKING OPERATIONS

Cashiering

i) Receipts

ii) Payments

Clearing

i) Inward

ii) Outward

Account Opening

i) Current Account

ii) Saving Account

iii) Recurring Deposits

iv) Fixed Deposit

Transfer Entries

Passbook Entries

vouchering

Demand Drafts/Pay Orders

Safe Deposit Vaults



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CASHIERING

One of the most important functions of general banking is to receive cash and make

payment of cash. Receipt of cash may be for different purposes and from different

persons. Bank accepts only genuine notes and coins.

Features of genuine currency notes:-

The printing of a currency note is exceptionally good

The printed surface on the front and back of a genuine note exactly cover each

other.

Every genuine currency note of the denomination of Rs. 5/- and above has a

security thread placed inside the paper.

Every genuine currency note has a water mark of Ashoka emblem in its window

portion.

In every genuine note an inscription in figure or letters in brown colour is

incorporated in the paper. It is not visible to the naked eye but can always be seen by holding the note against bright light.

Features of a genuine coin: -

A genuine coin has generally uniform thickness.

The impressions on the two sides are clear and well defined, especially at the

edges.

The surface of a genuine coin, on the side not occupied by any design or letters, is

absolutely smooth and even and is free from blemishes.

If any of the characteristics is not present in the currency note and coin, it is a forged

note. Bank doesn‟t accept Defective notes and coins.



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DEPOSIT PROCEDURE: -

DEPOSITORS PROCEDURE

Depositors have to fill a deposit slip or pay-in-slip to deposit the amount in which he

have to fill:

Name of the account holder

Account number

Amount in figures and words

Date

Detail of notes and coins

After filling slip depositor deposits the amount on cash counter.

BANK PROCEDURE

After receiving the pay- in- slip and cash, teller counts the amount and checks for

fake currency.

Than bank do the entry in computer by crediting the account of the holder.

and debit the cash account of bank.

IN CASE OF CHEQUE DEPOSIT

Cheque has to be attached with pay-in-slip and submitted to cash counter, if the cheque is

not crossed than he/she can withdraw cash but if the cheque is crossed the amount will be

credited to holder account.

PAYMENT PROCEDURE: -



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If account holder wants to withdraw amount from his account than he/she has to issue

“Self Cheque” from his own cheque book or by filling withdrawal form and simply

withdraw the amount from the cash counter.

BANK PROCEDURE

After receiving the withdrawal form, the teller checks the signature at back side

and give the token.

Then teller pass the slip to higher authority, they check the signature of the

receiver whether they are original or not, if it is ok, they he write pay cash.

Then the receiver has to go to cash counter, the cashier will take another sign and

check whether the receiver is same or not.

Finally give cash to the receiver and debit the account of the holder and credit the

cash account of bank.

So this is all about “Cashiering” which is an important part of the general banking

operation.



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CLEARING

Clearing is another very important general banking operation.

It is a process by which bankers exchange cheques drawn on each other which are

received by them for collection or clearing from their customers.

INSTRUMENTS THAT CAN BE PRESENTED IN THE CLEARING

Cheques, Demand drafts, Dividend warrants, Bankers‟ Cheques, Income tax refund

vouchers etc. drawn on the local branches of the member banks are generally presented

through clearing.

ADVANTAGES OF CLEARING HOUSE

Substantial reduction in labour and expenditure and avoidance of delay and risk, which

otherwise would be involved if each bank has to present the cheques etc. of its customers

at the counters of the drawee banks are the advantages of clearing house.

TYPES OF CLEARING:

Inward clearing: When the cheques of our bank go to other bank for clearing

purpose is called inward clearing

Outward clearing: When cheques of other banks comes to our banks for clearing

purpose is called outward clearing



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Outstation cheques/outstation clearing: The cheques concerning with other

cities or other stations are called outstation cheques as well as outstation clearing.

CLEARING HOUSE:It is a place where all the member banks‟ representatives meet to exchange instruments

and to arrive at the net position regarding receipt or payment in order to settle their dues.

Each of these banks maintains an account with „Supervising Bank‟ who settle dues by

debiting or crediting the account of the respective banks. Usually Reserve Bank of India

or State Bank of India or a subsidiary of State Bank of India acts as the supervisor bank.

It is at the place of this bank, which is known as the „clearing house‟ where all the banks‟

representatives meet everyday during specified hours. The RBI has extended „MICR‟

clearing too many cities and some nationalized bank have been made „supervising bank‟.

CLEARING ADJUSTMENT ACCOUNT

This is an account maintained in the General Ledger of the branch to record both debit

and credit differences in respect of clearing transactions. All returns over the counters by

the branches to the other banks and short/excess claims due from other banks are to be

routed through this account only. Entries in respect of return to the clearing house

directly are not to be passed through this account only. No entries except those relating to

clearing transactions are to be passed through this account. Entries in which debit

precedes credit should be specially taken care of. A subsidiary register should be

maintained, wherein details of all debits and credit (also showing balance) passed through

this account is recorded. Follow-up is necessary so that the entries get adjusted within,

say 2 to 3 days. Cheques which are to be re-presented in clearing due to some technical

mistakes can be debited to clearing Adjustment Account.



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ACCOUNT OPENING

The relationship between a banker and his customer begins with opening of an account

by the former in the name of latter.

Initially all accounts are opened with deposit of money by the customer and hence all

accounts are called Deposit Accounts.

The Bank provides certain options to public regarding account opening according to their

requirement. These are:

Saving Account

Current Account

Recurring Deposits

Fixed Deposits

Let us discuss these accounts in detail:



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SAVING ACCOUNT:

A saving bank account is meant for the people of the lower and middle classes who

wish to save a part of their current incomes to meet their future needs and also intend

to earn an income from their savings.

The aim of these accounts is to encourage mobilizing small savings of the public.

Certain restrictions are imposed on the depositors regarding number of withdrawals.

TYPES OF SAVING ACCOUNTS OFFERED BY PNB BANK

REGULAR

SAVINGS

ACCOUNT

SAVING PLUS

ACCOUNT

SALARY

ACCOUNT

SAVING ACCOUNT



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CURRENT ACCOUNT

A current is a running and active account which may be operated upon any

number of times during a working day. There is no restriction on the number and

amount of withdrawals from a current account.

As the banker is under an obligation to repay these deposits on Demand liabilities

The banker keeps sufficient cash reserves against such deposits vis-à-vis the

Savings and the fixed deposits. Current accounts suit the requirements of big

Businessmen, joint stock companies, institutions, public authorities and public

Corporations etc.

Generally no interest is payable on current accounts.

TYPES OF CURRENT ACCOUNTS OFFERED BY THIS BANK

CURRENT

ACCOUNT

TRADE CURRENT

ACCOUNT

PREMIUM

CURRENT

REGULAR

CURRENTACCOUNT

PLUS CURRENT

ACCOUNT



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RECURRING DEPOSITS:

RD is a facility for depositors to save at their convenience by paying a fixed sum of money every month for a predetermined period. This is called recurring deposit.

The purpose of these accounts is to encourage regular savings by the public,

particularly by the fixed income group.

This deposit is of recurring nature. The depositor while opening the account has to

stipulate the period of deposit and the amount of monthly installments. Interest is

compounded half-yearly.

INTEREST CALCULATION:

N*P*R

100

N= No. of months

P=Period interest calculation

R =Rate of interest charged in paise



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FIXED DEPOSITS ACCOUNT

In this category are included the deposit with bank for a fix period which is specified at

the time of making deposits. Such deposits are called FIXED DEPOSITS.

A Fixed deposit is repayable on the expiry of a specified period, chosen by the

depositor to suit his purpose and to enable him to get the money as and when he needs it.

FEATURES OF FIXED DEPOSITS

INTEREST RATES: A fixed deposit holder can earn attractive interest rates.

FLEXIBILITY: An individual can choose fixed deposit period as per their

requirement.

AUTO RENEWAL: It‟s likely that you might forget the maturity date of your

deposit. With the auto renewal facility, your deposit will be automatically renewed

for a period equal to original tenure at the interest rates prevailing on the date of

renewal.

OVERDRAFT AGAINST FIXED DEPOSIT: There is no need of breaking

your fixed deposit in case of emergency. Just avail of an overdraft against your

fixed deposits and continue to earn interest on the deposit.

NOMINATION FACILITY: Nomination facility is also available on fixed

deposit.



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TAX DEDUCTION: There is Tax benefit available at fixed deposits.

TYPES OF FIXED DEPOSITS

SUPER SAVER

ACCOUNT

QUARTERLY

INTEREST

CUMULA-

TIVE

FIXED DEPOSIT

REGULAR

FIXED

DEPOSIT



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CLOSING OF BANK ACCOUNT

The relationship between the banker and his customer is contractual and continues as

long as both of them so desire. The relationship may be terminated by either of them by

giving notice of his intention to the other party. Moreover the banker is bound to suspend

payment out of customers account under the compulsion of the law.

The rights and obligations of banker in this regard are as follows:

a) If a customer directs the banker in writing to close his account, the banker is

bound to comply with such direction. The latter need not ask the reason for the

formers direction. The account must be closed with immediate effect and the

customer is required to return the unused cheques.

b) If an account remains unoperated for a very long time the banker may request the

customer to withdraw the money, under the presumption that the customer no

longer needs the account. If the customer could not be traced after a reasonable

effort, the banker usually transfers the balance to an “Unclaimed DepositAccount”, and the account is closed. The balance is paid to the customer as and

when he is traced.

c) The banker is also competent to terminate his relationship with the customer, if he

finds that the latter is no more a desirable The banker takes this extreme step in

circumstances when the customer is guilty of conducting his account in an

unsatisfactory manner i.e.; if the customer is convicted for forging funds or does

not fulfill his commitment to pay back the loans or overdrafts etc. The banker may

take the following steps for closing his account:



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TRANSFER ENTRIES

Another general banking operation of PNB Bank is to transfer entries. When one account

holder of bank issue cheque for another account holder of same bank than bank does this

function of transfer entries.

Bank debit the account of issuer of the cheque and credit the account of depositor of the

cheque. The transfer entries are immediate function of the Banking operation.

PASS BOOK ENTRIES

Pass book entry is also the primary function of the bank.when one or two account holder

deposit and withdraw the amount of his or her account then a customer want to know the

transaction of his account .pass book entry is the record of the all the transaction done by

bank .this is the record book of the customer account.



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DEMAND DRAFTS/ PAY ORDERS

DEMAND DRAFTS: Section 85-A of Negotiable Instruments Act defines a bank draft

as” A bank draft is an order to pay money, drawn by one office of a bank upon another

office of same bank for a sum of money payable to order on demand”.

A bank draft is an order from one branch to another of same bank to pay a specified sum

of money to the person named therein or to his order. A draft is always payable on

demand.

There are three parties to a bank draft:

The Drawer branch

The Drawee branch

The Payee

The purchaser of the bank draft does remain a party to the instrument; he acquires the

instrument after paying consideration thereof.

It is to be noted that banks extends this service to public in general, it is not necessary

that the purchaser of the draft must be the Customer or the Account -Holder of the

bank.

PAY ORDERS: Pay orders are similar to demand drafts. The only difference is that pay

orders payment is made locally. An individual can make pay order either through his

bank account or through paying cash.



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SAFE DEPOSIT LOCKERS

PNB Bank provides safe deposit vaults to the public at their selected branches. For this

purpose, the bank provides strong rooms equipped with safe deposit lockers. These

lockers are at of different size and hired by people at reasonable prices.

Advantages / Key Benefits

Wide Availability, Lockers available in various sizes. I.e. Small, Medium, Large and

Extra Large with varying rents.

Lockers are rented out for a minimum period of one year. Rent is payable in advance.

No deposits are required to avail a locker. Just open an account and get the locker facility

OR

The rent may be conveniently paid from your deposit account with us.

Direct debits for locker rentals from your account rid you of the hassles in writing out

cheques.

There is a nominal annual charge, which depends on the size of the locker and the centre

in which the branch is located.

Eligibility

An individual (not minor), firms, limited company, associations, clubs, trusts, societies,

etc may hire a locker.

Nomination for Safe Deposit Locker



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The Lockers and their contents can be nominated to people near and dear to you.

Nomination facility is available to individual hirer of Safe Deposit Locker.

In the case of a sole hirer of a safe deposit locker, nomination can be made in favour of only one individual.

Where the safe deposit locker is hired in the name of a minor, the nomination shall be

made by a person lawfully entitled to act on behalf of the minor.

Terms & Conditions

For obtaining a Locker at PNB. Bank you must be an account holder with our Bank.

Lockers can be allotted individually as well as jointly.

The Locker holder is permitted to add or delete names from the list of persons who can

operate the Locker and can have access to it.

Loss of Key is to be immediately informed to the concerned Branch.

The procedure for deposit vault transactions is as follows:

1. A locker may be hired by any individual, but bank insist that the intended hirer must

have a saving bank account with it where in a minimum balance is always maintained.

2. The person intended to hire a locker is require to execute a lease agreement which

contains all terms and conditions on which a locker is hired

3. A locker may be hired in joint names of two or more persons. In such cases, the

banker must take clear instructions.

4. Banker make a safe deposit register, where in record of all the dealings in respect of

locker hired to a particular customer is made on separate page. The banker takes

specimen signature of hirer with his full name and address.



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5. Each locker can be opened by application of double keys-one of which is retained

with hirer and other is retained with banker himself.

6. The banker does not know about the contents of locker. He maintains the record of

visit of hirer for opening his locker and latter is required to sign the safe deposit vaultregister every time he visits the bank for this purpose.



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WHAT IS A BANK

Financial institution that uses funds deposited with it to lend money to companies or

individuals, and also provides financial services to its customers. The first banks opened

in Italy and Cataluña around 1400.

In 1900, half of the world's top ten banks were British; by 1950, the dominant banking

nation had become the USA, with half of the world's top ten banks based there. In terms

of assets, seven of the world's top ten banks in 1988 were Japanese.

Just too many players 27 Public sector banks, 31 Private banks and 29 foreign banks. The

Indian banking sector is headed for consolidation. The presence of many regional players

will see few banks emerging as global competitors.

Will the government remove the CAP on voting rights? The anticipated removal

of CAP of 10% on voting rights will see foreign banks establish themselves in the

Indian market.

What do the numbers say? Likely rise in interest rates will see bank margins under

pressure. Treasury gains to wilt in the current scenario. Bank profits in the future

to be driven by Core income.

How far is the retail boom sustainable? Retail market to grow at a CAGR of 8%

till 2007. Corporate lending to rise on back of planned fresh capacities, to improve

credit off take.



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COMPANY PROFILE



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COMPANY PROFILE With more than 119 years of strong existence and over 6000 branches including 5

overseas branches, 6460 ATMs, 5047 Business Correspondents and 2165 Ultra Small

Branches, Punjab National Bank is serving more than 82 million esteemed customers.

PNB, being one of the largest nationalized banks, has continued to provide prudent and

trustworthy banking services to its customers. The Bank enjoys strong fundamentals,

large franchise value and good brand image. To meet the growing aspirations of the

people and compete in these tough conditions, the Bank offers wide range of products

and services.

Punjab National Bank (PNB) is an India-based bank. The Company offers banking

products, and also operates in the credit card, debit card; bullion business; life and non-

life insurance; gold coins, and asset management business. During the fiscal year ended

March 31, 2012 (fiscal 2012), it distributed and marketed mutual fund products of PNB

AMC & UTI AMC. In fiscal 2012, PNB under the Gold Coin scheme sold gold coins of

two, five, eight, 10 and 20 grams. As of March 31, 2012, it provided depository services

through 659 authorized branches, covering 259 centers across India. In fiscal 2012, its

total domestic branches were 5670, including six extension counters. It comprises 2193

rural, 1325 semi-urban, 1219 urban and 933 metropolitan branches. PNB has more than

520 specialized branches that include micro finance branches, retail asset branches,

agricultural branches, small and medium enterprise branches, international banking

branches and asset recovery management branches.

Awards and Recognitions:

Owing to its performance during the year 2012-13, Bank earned many laurels and

accolades in recognition to its service towards doing good to society and on its overall

performance. Recently, PNB was awarded with “IDRBT Banking Technology

Excellence Award under customer Management and Intelligence Initiatives‟. Bank also



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bagged “Golden Peacock Business Excellence Award” 2013 by Institute of Directors.

Bank has been recognized as „Best Public Sector Bank' by CNBC TV 18. The Bank has

also been recognized as “Most Socially Responsive Bank” consecutively for second year

by Business World and PwC. Further, The Sunday FINWIZ 2012 declared Bank the“Best Banker in Agriculture Credit (Large)”.The Bank was also conferred with National

Award for Excellent Performance in Lending under PMEGP Scheme of KVIC in North

Zone by Ministry for MSME, GOI. Apart from this, Bank was also bestowed with the

IBA Banking Technology Awards 2012 under the categories of “Best Use of Business

Intelligence” and “Best Risk Management and Security Initiatives”.

Globally, 'The Banker' Magazine, London has ranked PNB at 170th position amongst

World's Top 1000 Banks in 2013, up from 175th

position in 2012. Forbes Magazine has

placed PNB at 668th place amongst 2000 global giants. The Bank has also been ranked at

26 amongst FE 500 India's Finest Companies.

Financial Inclusion:

Apart from financial performance, the Bank has been able to achieve new landmarks in

operational performance. Recently the Bank crossed the landmark of 6000 branches with

the opening of a branch in unbanked rural area of Alangudi in Tamil Nadu. This is

testimony to the fact that the Bank has been a frontrunner in the industry so far as the

initiatives for Financial Inclusion is concerned. Bank has extensively used technology to

reach out to those which have remained away from formal banking set up. Further, the

Bank is actively participating in the Direct Benefit Transfer (DBT) Programme of the

Government leading to seamless transfer of cash benefits into the accounts of

beneficiaries,

Alternative Delivery Channels:



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The Bank has made rapid strides in banking sector with the help of various technology

enabled products and services which are providing convenient banking to all the

customers including young generation which are techno savvy to the core. The Bank hasthe vast network of branches including specialised branches which are offering multiple

products and services to its customers. Bank also has a large network of ATMs which

provides facilities like Fund Transfer, Bill Payments mobile registration for generation of

SMS alerts, Direct Tax Payment request for stop payment of cheques, etc. The Bank is

offering Internet Banking Services to its customers, which includes online bills payment

of utility services; on line Railways/air ticket booking, e payment towards services like

Excise Duty and service tax, etc. It is also providing on line trading activity to its

customers and de‟mat accounts are also getting available to the customers. Bank has

come out with SMS Alert and Mobile Banking Options to the customers, which has led to

tendering of Anytime Anywhere banking facility to the customers and keeping the

customers updated about all their financial transactions. All the branches of the Bank are

Real Time Gross Settlement (RTGS) /National Electronic Fund Transfer (NEFT) enabled

wherein customers can transfer funds at the click of the mouse.

Wealth Management Products:

In the intense competitive environment, which is set to intensify further with the entry of

new players, the Bank is diversifying its revenue streams. During the FY'13, the Bank

acquired 30% stake in MetLife India Insurance Company Ltd., creating a new entity

named PNB MetLife India Insurance Company Ltd. Apart from it, Bank is offering credit

& debit card, Gold Business, Merchant Banking, Mutual Fund, Factoring Services, etc.

PNB Pragati:



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In Bank's quest for excellence in delivering banking services to its customers, last year

the Bank initiated an organizational transformation exercise called PNB Pragati. Under

this, the Bank has converted more than 363 branches into “Pragati Branches”. The layoutof these branches has been modified and the flows have been streamlined, so as to offer

customers a better banking experience. A queue management system has been put in

place and a self-service area equipped with a Passbook Printing Terminal, Cash and

Cheque Deposit Machine and ATM has been created. The new layout with self service

area, reception area and HNI area has enabled speedy and convenient delivery of service

to customers in an excellent ambience.

Global Reach (Branches and Subsidiaries):

Backed by strong domestic performance, the Bank has its global aspirations as well.

Bank has expanded its footprint into 10 countries. Bank also has 5 overseas branches in

Hong Kong, Dubai & Afghanistan and an Offshore Banking Unit (OBU) Branch in

SEEPZ, Mumbai. Bank has three subsidiaries viz. PNB International Ltd. (UK), Druk

PNB Bank Ltd, Bhutan and JSC SB PNB Kazakhstan. Also Bank has a joint venture with

Everest Bank Limited, Nepal with 48 branches. The Bank has Five Representative

Offices each in Sydney (Australia), Dubai (UAE), Almaty (Kazakhstan), Shanghai

(China) & Oslo (Norway). Bank is also exploring the presence in Bangladesh, Canada,

Maldives, Mozambique and Pakistan.



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OBJECTIVES OF THE

STUDY



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OBJECTIVES OF THE STUDY

To explore various schemes offered under savings, FD and Mmc Account by PNB

bank.

To know which is the most popular scheme of the bank.

To know problems faced by the customers in the banks.

To find out awareness level & reaction of customers towards direct banking channels

provided by bank.

To find main causes of dissatisfaction if any about Direct Banking Channels.

To provide suggestion for improvement in different schemes provided by PNB bank



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CHAPTER-2

RESEARCH METHODOLOGY



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RESEARCH METHODOLOGY

Research Methodology in a way is systematic representation of research or any other

problem. It is a written game plan for conducting research. It tends to describe the step

taken by a researcher in studying the research problem along with a logical background.

It tends to describe methodology for solution of the problem that has been taken for the

purpose of study .This project focuses on the methodology for technique used for the

collection, classification & tabulation of the data. This plan throws light on the research

problem, the objective of the study & Limitation of the study. Therefore, In order to solve

a problem, it is necessary to design a Research Methodology for problem as the same

way differs from problem to problem.

The Project

The Project undertaken during the summer training at “PNB” was “General

Banking Operations”

The main aim of the study is to understand the “General Banking Operations” in

“PNB”

It is the bank which understands the need of customers & provided them best

facility.

The main motive behind this research is to know the customer satisfaction level

regarding the General Banking Operations and Services provided by the bank.

Nature of the studyThe nature of study is that it has an applied base. The statement indicates that results

obtained from the study, inference drawn from the study can actually be applied

practically and can be of great help to the customers to know about general banking in

more comprehensive way.



36

Scope of study

The study is restricted to KURUKSHETRA itself. It aims at getting an insight in to

General Banking. It also aims at familiarized with the role of banking providing services.

The interaction with the customers during the market survey help me a lot inunderstanding the practical aspect of the general banking as a whole

TYPES OF RESEARCH

Research methodology is a way to systematic solve the Research Problem. It is a

procedure, which is following Red step by step to solve a particular research problem.

There are basically four types of researches:

EXPLORATIVE RESEARCH

DESCRIPTIVE RESEARCH

DIAGNOSTIC RESEARCH

HYPOTHESIS TESTING RESEARCH

Explorative Research:

To gain familiarity with phenomenon or to achieve an insight into it.

Descriptive Research:

To poetry accurately the characteristics of the particular individual situation or a group.

Diagnostic Research:

To determine the frequency with which something occurs or with which it is associated

with something else.

Hypothesis Testing Research:

To test a hypothesis of casual relationship between variables.

The present project is Descriptive in nature. It is done to poetry accurately the

characteristics of a particular individual situation or a group. The major purpose of the

descriptive research is the description of the state of the affairs as it exits at resent. The



37

main characteristics of this method are that the researcher has no control over the

variables; he can only report what has happened or what is happening.

RESEARCH PROCESS

Specifying the Research objective

Preference the list of needed information

Research Design

Collection of Data

Analysis of Data

Report Writing



38

There Are Six Steps Of Designing A Research Report:-

1. Specifying the Research objective

As my research project is about the comprehensive study of general banking operations

in PNBBank providing them so first of all the various objectives of the project were

specified.

2. Preference the list of needed information:

The second step in designing the project work is the preparation of list of need

information. There is basic information on which the research project is to structure. In

this project, the various information is headed in starting of the project. These are as

follows:-

Q: What is the study about?

Ans: Comparative study of General Banking Operations.

Q. Why is the study being made?

Ans: To understand the services provided by PNB

Q. Where will the study be carried out?

Ans: Kurukshetra Only

Q. What type of data is required?

Ans: Primary as well as Secondary

Q. Where can the required data be found?

Ans: Primary Data through questionnaire from the customers & secondary data through

magazines, newspaper etc.



39

3. Designing the data collection process:

During the data collection process a questionnaire was made for the collection of the data

from the customers personally. Because in the research project both primary as well as

secondary data is required. So primary data was collected with the help of thequestionnaires.

The following types of question were asked from the customers.

Dichotomous

A question with two possible answers says Yes or No.

Multiple Choices

A question with three or more answers.

Selecting the sample size

Taking the sample of the study was not an easy task. The objective and the limitation of

the study have to be kept in mind before deciding about the sample type.

In the sample type all levels of its customers have been covered. Basically the present

customers as well as prospective customers were questioned with help of the

questionnaire.

5. Analysis of data:

After deciding upon the sample size & preparing the questionnaire, the fieldwork had to

be carried out. In the field work the place had to be chosen where you want to do your

study. The project survey work was carried out in the KURUKSHETRA City.

6. Analyzing the collected data & reporting the finding:

After the survey work was over & the data had been collected the analysis of the data was

must & its graphical representation was needed. So after the data collection process step

by step analysis of data was done on the basis of the analysis.



40

CHAPTER-3



41

DATA COLLECTION

SOURCES OF DATA COLLECTION

To make the research complete it is very necessary to have useful and authentic

data there are two types of data collection sources.

PRIMARY SOURCE OF DATA COLLECTION

Primary data are those which are collected afresh & for the first time, & this

happens to be original in character. Simple well drafted questionnaire was circulated

among all respondents full freedom was provided to an individual to answer the

questions.

Personal & Telephonic Interviews & observation of the respondents about the

various schemes helped in completion of the project.

SECONDARY SOURCES OF DATA COLLECTION

These are those which are collected by someone else & which have been pass-

through statically process.

Brochures, Manuals, Magazines, Site of Bank and various Articles provided lot

many inputs for successful completion of project.



42

DATA ANALYSIS

&

INTERPRETATION



43

Q.1 DURATION OF ACCOUNTS OF CUSTOMERS WITH

PNB BANK

A

Analysis: This graph shows 16 people have their bank account with this bank from

last 0-1 year , 34 people have from last 1-2 years , 28 people have from last 2-5

years , 22 people have from last more than 5 years.

16

34

2822

0

5

10

15

20

2530

35

40

0--1 1--2 2--5 morethan 5

N o . O

f P e o p l e

Years

0-1 yr.

1-2 yrs.

2-5 yrs.

more than 5 yrs.



44

Q.2 CUSTOMER SATISFACTION WITH INTEREST RATES OFFERED

BY PNB BANK

Analysis: This graph shows 68 people are satisfied with interest rate offered by

PNB bank and 32 people are not satisfied with interest rate offered by PNB bank.

0

10

20

30

40

50

60

70 68

32 N o . o f P e o p l e

Level of Satisfaction

Satisfy Unsatisfy



45

Q.3 CUSTOMER SATISFACTION WITH PROCESSING FEES

CHARGED BY PNB BANK

Analysis: This graph shows 62 people are satisfied with processing fees charged

by PNB bank and 38 people are not satisfied with processing fees charged by PNB

bank.

0

10

20

30

40

50

60

7062

38

N

o . o f P e o p l e

Level of Satisfaction

Satisfied

Unsatisfied



46

Q.4 WHAT IS STANDARD OF SERVICES PROVIDED BY

THIS BANK

Analysis:

This graph shows 32 people said standard of services provided by this bank is

excellent, 39 people said standard of services provided by this bank is

Very good, 18 people said that it is good and 11 people said that it is fair and bank

can improve the quality to a further extent.

0

5

10

15

20

25

30

35

40

32

39

18

11

N o . o

f P e o p l e

Nature of Services

Excellent

Very Good

Good

Fair



47

Q.5 WHAT IS STRONGEST POINT OF

THIS BANK

Analysis:

This graph shows 28 people said strongest point of this bank is efficient staff, 40

people said strongest point of this bank is attractive schemes, 20 people said that

is excellent customer services and 12 people said that it is branch ambience and

bank can improve the quality to a further extent.

0

5

10

15

20

25

30

35

40

28

40

20

12

N o . o

f P e o p l e

Strongest Point

Efficient staff

Attractive Schemes

Excellent Customer Service

Branch Embience



48

CHAPTER-4



49

FINDINGS & SUGGESTIONS

They should emphasis deepening of old relationship.

They should provide proper training of employees from time to time

They can improve their business by introducing new and attractive investment

policies.

They should provide Minimum balance account schemes so that more and more

customers come to them for account opening.

They should revise interest rates time to time so that no other bank can capture

their market.

They should improve their services so that faster services will be provided to the

customers.

They should revise their processing fees so that other banks can‟t compete them.

Bank should provide some marketing executives who can give information of

market and other banks. These executives can give report to the head office

directly for timely processing so that as early as possible, market can be fully

captured. .



50

RESULTS

The study of general banking operations bring many types of services which are of great

help to customers. Account opening, cash receipt and payments, clearing of cheques are

various services which makes life easier for the customers.

Best Services:-

Clearing of cheques

Queries of customers being solved

Provide information to customers about their accounts

Immediate payment through self cheques

The analysis of the questionnaire that was circulated to as certain the

views and awareness is as follows:

Maximum number of customers are satisfied with the interest rates provided by

the bank

Maximum number of customers are satisfy with the processing fees charged by the

bank

Most of the customers are satisfied with the clearing time taken by the bank

All the queries of customers being solved timely

No hidden charges being debited from customer‟s account

The strongest point of PNB Bank is that it offers attractive schemes for customers

time to time.



51

CONCLUSION

PNB Bank is one of the leading banks. PNB Bank enjoys such a great reputation that it

can very well and sells its products to the outside customers and be a winner. These are

the responses of the people who knew about the PNB Bank but those of them who did not

know they felt very happy when they came to know that Group, PNB Bank has come out

with new ventures. The only point now is that when the company enjoys such a great

reputation, what it has got to do is to provide its product to the people at a very

competitive price and make them sure that their investment in the company is absolutely

secure.

The project was based on General Banking Operations which includes:

Cashiering

Clearing

Account Opening

Demand Drafts/ Pay Orders

Safe Deposit Vaults

PNB Bank provides very efficient services to its customers. Bank performs its general

banking operations very efficiently and effectively.

Most of the customers are satisfy with the services and other functions of the bank.

They are satisfied with the processing fees and other charges of Bank.

Somehow Bank also has drawback at various functions. They are on the path of

improving those functions so that they satisfy will satisfy their customers with full

satisfaction level.



52

BIBLIOGRAPHY

BOOKS

Kothari, C.R., Research Methodology, Vishaka Prakashan, New Delhi, 1990.

Avadhani V.A., Marketing and financial services, Himalayas publishing house pvt.

Ltd., 2002.

Banking law and practice, P.N Varshney, Sultan Chand and sons,

Educational Publishers, New Delhi

MAGAZINES AND NEWSPAPER

Annual report of PNB Bank.

Times of India.

PNB Bank circulars and Instructions.

WEBSITES

www.google.com

www.pnbindia.com

www.pnbindia.in/

http://www.google.com/





ANNEXURE

Q.1 DURATION OF ACCOUNTS OF CUSTOMERS WITH

PNB BANK

Q.2 CUSTOMER SATISFACTION WITH INTEREST RATES OFFERED BY PNB

BANK

Q.3 CUSTOMER SATISFACTION WITH PROCESSING FEES CHARGED BY PNB

BANK

Q.4 WHAT IS STANDARD OF SERVICES PROVIDED BY

THIS BANK

Q.5 WHAT IS STRONGEST POINT OF

THIS BANK

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