Project Guide: Mr. Ratan Thakur

…the name you can bank upon!!!…the name you can bank upon!!!

The project includes analysis of various e-banking solutions of the bank like internet banking, mobile banking, ATMs, credit cards, debit cards, etc. and also provides a strategy for re-branding of all these products in order to improve the brand image of the bank in the minds of the customers.

Table of Contents

1. Indian Banking Sector 7

1.1 Overview 7

1.2 Structure of the banking industry 8

1.3 Banking potential in India 9

1.4 Industry segments 9

1.5 Distribution of banks 10

1.6 Major key players 11

1.7 New initiatives by public sector banks 12

2. Electronic banking 12

1.1 Definition12

3. Internet banking 14

3.1 Growth in internet banking 15

3.2 The Indian Saga 18

3.3 The PSU lethargy 19

3.4 Bouquet Strategy 20

3.5 Bank’s key pain points and opportunities in internet banking 21

4. Mobile banking 21

5. ATMs 22

6. Credit Cards 23

7. Debit Cards 25

8. Punjab National Bank 27

8.1 Company profile 27

8.2 Vision 27

8.3 Mission 28

8.4 Overview of the performance as on Mar’10 28

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8.5 Punjab National Bank’s robust technology platform 29

8.6 Punjab National Bank increasing its global footprints 30

8.7 Awards and accolades during the year 30

8.8 Products and services 31

9. PEST analysis32

10. SWOT analysis 33

11. TOWS analysis 34

12. Research Statement 35

12.1 Research problem 35

12.2 Project objectives 35

12.3 Research design, methodology and research statement 35

12.3.1 Research plan 35

12.3.1.1 Primary investigation 35

12.3.1.2 Exploratory study 35

12.3.2 Research design 36

12.4 Analysis and rebranding of PNB internet banking 36

12.4.1 Findings 38

12.4.2 Suggested perception towards internet banking advertisements 38

12.4.3 Developing research plan39

12.4.4 Collection of data 40

12.4.5 Sampling plan……………………………………………………………………………………………………………… 40

12.4.6 Data collection instrument developed 41

12.4.7 Research limitations 41

12.4.8 Questionnaire 42

12.4.9 Analysis and interpretation through EXCEL 46

12.4.10 Other analytical tools 52

12.4.10.1 SWOT analysis 52

12.4.10.2 Porter’s 5 forces model 53

12.4.10.3 Ansoff’s product-market mix 54

12.4.11 Strategies for rebranding PNB internet banking 55

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12.5 Analysis and rebranding of PNB mobile banking 57

12.5.1 Strategies for rebranding PNB mobile banking 58

12.6 Analysis and rebranding of PNB ATMs 59

12.6.1 Strategies for rebranding PNB ATMs 60

12.7 Analysis and rebranding of PNB Credit Cards 61

12.7.1 Strategies for rebranding PNB Credit Cards 62

12.8 Analysis and rebranding of PNB Debit Cards 63

12.8.1 Strategies for rebranding PNB Debit Cards 64

13. Conclusion and recommendations 66

14. Bibliography…………………………………………………………………………………………………………………………………… 68

4

ACKNOWLEDGEMENT

Success is the effort bounded actively, involving the co-operation of all.

To create and formulate this project, I would like to thank one person who served as my guide epitome of knowledge.

I would like to thank Mr. Ratan Thakur, my MBA project guide, for giving me any time and every time guidance and continuous support. His experience and methodology of providing training helped me in not only to perform the desired activity but also to accomplish creativity. I would also like to thank my parents and my family who were always there to support me throughout this project.

I would also like to thank Prof. Bhagyalakshmi and all the other faculty members who are not only a source of inspiration but also a source of constant innovation.

5

DECLARATION

I, Vaishali Lapasia, hereby declare that I have carried out my summer training project in Punjab National Bank. The topic of the project was “Re-branding of banking e-products”.

I further declare that the project work is entirely my original work and no part of this report has been published to or submitted to anybody or university for award of any other diploma or degree.

Ms. VAISHALI LAPASIA

STUDENT: K.J.Somaiya Institute of Management Studies and Research

6

1.1. Indian banking sector:Indian banking sector:

1.1 Overview:1.1 Overview:

Banks, over the years, have become a significant aspect of an economy. In today’s scenario, theBanks, over the years, have become a significant aspect of an economy. In today’s scenario, the

position of banks have become all the more important in the course of working of the money position of banks have become all the more important in the course of working of the money

market and hence the economy of a nation. The banking sector forming a portion of the market and hence the economy of a nation. The banking sector forming a portion of the

financial sector primarily works as a financial intermediary generating money supply. From the financial sector primarily works as a financial intermediary generating money supply. From the

different macro economic models, banks have been found to be a part of the supply side of thedifferent macro economic models, banks have been found to be a part of the supply side of the

economy. However, over time banks have transformed from merely money generating economy. However, over time banks have transformed from merely money generating

organizations to a multi tasking entity. organizations to a multi tasking entity.

India is well positioned to become the fourth-largest economy of India is well positioned to become the fourth-largest economy of

the world by 2025.GDP growth rates of 7-8 per cent a year will be the world by 2025.GDP growth rates of 7-8 per cent a year will be

sustainable going forward if key enabling factors have been put to sustainable going forward if key enabling factors have been put to

place. One of the enablers of robust economic growth is a banking place. One of the enablers of robust economic growth is a banking

sector that is able to adequately and efficiently meet the needs of a sector that is able to adequately and efficiently meet the needs of a

growing economy. The Banking sector in India has always been one growing economy. The Banking sector in India has always been one

of the most preferred avenues of employment. In the current decade, this has emerged as a of the most preferred avenues of employment. In the current decade, this has emerged as a

resurgent sector in the Indian economy. It is projected that the sector has the potential to resurgent sector in the Indian economy. It is projected that the sector has the potential to

account for over 7.7 per cent of GDP withaccount for over 7.7 per cent of GDP with

over Rs.7, 500 billion in market cap, and toover Rs.7, 500 billion in market cap, and to

provide over 1.5 million jobs.provide over 1.5 million jobs.

7

As per the McKinsey report ‘India Banking 2010’, the banking sector index has grown at a compounded annual rate of over 51 per cent since the year 2001, as compared to a 27 per cent growth in the market index during the same period.

Banking Institutions

Regional Rural Banks

Com m ercial Banks

Foreign Banks

Indian

Comm ercial Banks

Public Sector Banks

State Bank Group

Nationalised banks

Punjab National Bank

Private Sector Banks

Co-operative

Banks

State CooperativesCentr

al/D istri

ct Cooperativ

es

Land Develop

m ent Banks

Industrial Develop

m ent Banks

2001-20100%

10%20%30%40%50%60%

IndiaWorld

Today, banks have diversified their activities and are getting into new products and services Today, banks have diversified their activities and are getting into new products and services

that include opportunities in credit cards, consumer finance, wealth management, life and that include opportunities in credit cards, consumer finance, wealth management, life and

general insurance, investment banking, mutual funds, pension fund regulation, stock broking general insurance, investment banking, mutual funds, pension fund regulation, stock broking

services, custodian services, private equity, etc. Further, most of the leading Indian banks are services, custodian services, private equity, etc. Further, most of the leading Indian banks are

going global, setting up offices in foreign countries, by themselves or through their subsidiaries.going global, setting up offices in foreign countries, by themselves or through their subsidiaries.

1.2 Structure of the banking industry:1.2 Structure of the banking industry:

8

Banks have a combined network of over 53,000 branches and 49,000Banks have a combined network of over 53,000 branches and 49,000 ATMs. According to a ATMs. According to a

report by ICRA Limited, a rating agency, the public sector banks hold over 75 percent of total 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% assets of the banking industry, with the private and foreign banks holding 18.2% and 6.5%

respectively.respectively.

Nearly 70% of the total no. of branches of all the commercial banks put together is in rural and Nearly 70% of the total no. of branches of all the commercial banks put together is in rural and

semi- urban areas. Bulk of commercial bank finance is for short term working capital needs of semi- urban areas. Bulk of commercial bank finance is for short term working capital needs of

industry, trade, agriculture and personal segment. Banks are supporting growth in the industry, trade, agriculture and personal segment. Banks are supporting growth in the

economy by financing productive sectors.economy by financing productive sectors.

Due to vibrant competition, market share of various group banks have changed, though public Due to vibrant competition, market share of various group banks have changed, though public

sector banks still dominate the entire market. sector banks still dominate the entire market.

1.3 Banking potential in India:1.3 Banking potential in India:

India has a huge skilled managerial and technical manpower which can boost the India has a huge skilled managerial and technical manpower which can boost the

banking industry to great heights.banking industry to great heights.

Huge middle class population provides India with a distinctive edge in the global Huge middle class population provides India with a distinctive edge in the global

competition.competition.

India has a well established judiciary system and a sophisticated legal and accounting India has a well established judiciary system and a sophisticated legal and accounting

system which can enhance the growth of the banking industry further.system which can enhance the growth of the banking industry further.

India has a user friendly intellectual infrastructure which will ensure rapid growth of theIndia has a user friendly intellectual infrastructure which will ensure rapid growth of the

industry.industry.

Lastly, India has free and vibrant press which ensures the regulations in the banking Lastly, India has free and vibrant press which ensures the regulations in the banking

industry.industry.

1.4 Industry segments:1.4 Industry segments:

9

Nationalized/ Public sector banks:Nationalized/ Public sector banks:

These banks dominate the Indian banking system. There are total 26 public sector banks in These banks dominate the Indian banking system. There are total 26 public sector banks in

India (As on 26-09-2009). Of these 19 are nationalized banks, 6(STATE BANK OF INDORE ALSO India (As on 26-09-2009). Of these 19 are nationalized banks, 6(STATE BANK OF INDORE ALSO

MERGED RECENTLY) belong to SBI & associates group and 1 bank (IDBI Bank) is classified as MERGED RECENTLY) belong to SBI & associates group and 1 bank (IDBI Bank) is classified as

other public sector bank.other public sector bank.

Private Banks:Private Banks:

Private Banks made banking more efficient and customer friendly in India. It led the Private Banks made banking more efficient and customer friendly in India. It led the

transformation of banking from class banking to mass banking.transformation of banking from class banking to mass banking.

Private Banks jolted public sector banks out of complacency and forced them to be more Private Banks jolted public sector banks out of complacency and forced them to be more

competitive.competitive.

Foreign banks:Foreign banks:

Foreign banks have brought latest technology and latest banking practices in India.Foreign banks have brought latest technology and latest banking practices in India.

They have helped make Indian banking system more efficient and competitive.They have helped make Indian banking system more efficient and competitive.

Various e-banking solutions are what these foreign banks has given to the Indian banking Various e-banking solutions are what these foreign banks has given to the Indian banking

industry.industry.

1.5 Distribution of banks:1.5 Distribution of banks:

10

Branches Staff Deposits Advances Net Profits0

10

20

30

40

50

60

70

80

90

100

Public sector banksPrivate sector banksForeign banksASCB total banks

Public sector banksPublic sector banks Private sector banksPrivate sector banks Foreign banksForeign banks ASCB total banksASCB total banks

BranchesBranches 88.4188.41 11.3311.33 0.260.26 100100

StaffStaff 87.2387.23 10.7610.76 2.012.01 100100

DepositsDeposits 75.2475.24 19.4219.42 5.445.44 100100

AdvancesAdvances 73.2573.25 20.2420.24 6.516.51 100100

Net ProfitsNet Profits 73.6273.62 16.9516.95 9.439.43 100100

1.6 Major Key players:1.6 Major Key players:

11

1.7 New initiatives by public sector banks: 1.7 New initiatives by public sector banks:

12

Foreign Banks

ABN AMRO BankAbu Dhabi Commercial Bank LtdAmerican Express Bank LtdBNP ParibasCitibankDBS Bank LtdDeutche BankHSBC LtdStandard CharteredBank

Private BanksICICI BankBank of RajasthanBharat Overseas BankHDFC BankIDBI BankING Vyasya BankKotak Mahindra BankAxis BankYes Bank

Public Sector BanksState Bank of IndiaPunjab National BankAllahbad BankBank of BarodaBank of IndiaBank of MaharashtraCanara BankCentral Bank of IndiaDena bankIndian Overseas BankOriental Bank of Commerce

2.2. Electronic banking:Electronic banking:

2.1 Definition:2.1 Definition:

Electronic banking is an umbrella term for the process by which a customer may perform Electronic banking is an umbrella term for the process by which a customer may perform

banking transactions without visiting a brick – and – motor institution.banking transactions without visiting a brick – and – motor institution.

From the various e-products that the bank offers, this project focuses on the following e-From the various e-products that the bank offers, this project focuses on the following e-

banking facilities:banking facilities:

Internet BankingInternet Banking

Mobile BankingMobile Banking

ATMATM

Debit CardsDebit Cards

Credit CardsCredit Cards

13

1 Specialized branches

2 New products targeted to specific groups

3 Change in structure, systems and procedures involving quick turnaround time to meet the global standards

4 Marketing orientation

5 Change in ambience

6 Recruitment of specialists

7 Tie-ups sharing networks and strategic alliances

Source: ABA - Preferred Banking Method 2007-2009

3.3. INTERNET BANKING:INTERNET BANKING:

“Internet banking” refers to systems that enable bank “Internet banking” refers to systems that enable bank

customers to access accounts and general information oncustomers to access accounts and general information on

bank products and services through a personal computer bank products and services through a personal computer

(PC) or other intelligent device. Internet banking products(PC) or other intelligent device. Internet banking products

and services can include wholesale products for corporate customers as well as retail and and services can include wholesale products for corporate customers as well as retail and

fiduciary products for consumers. Ultimately, the products and services obtained through fiduciary products for consumers. Ultimately, the products and services obtained through

Internet banking may mirror products and services offered through other bank delivery Internet banking may mirror products and services offered through other bank delivery

channels. Some examples of wholesale products and services include:channels. Some examples of wholesale products and services include:

Cash managementCash management

Wire transferWire transfer

Automated clearinghouse (ACH) transactionsAutomated clearinghouse (ACH) transactions

Bill presentment and paymentBill presentment and payment

Examples of retail and fiduciary products and services include:Examples of retail and fiduciary products and services include:

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Balance inquiryBalance inquiry

Funds transferFunds transfer

Downloading transaction informationDownloading transaction information

Bill presentment and paymentBill presentment and payment

Loan applicationsLoan applications

Investment activityInvestment activity

Other value-added servicesOther value-added services

Other Internet banking services may include providing Internet access as an Internet Service Other Internet banking services may include providing Internet access as an Internet Service

Provider (ISP). The OCC has determined that a national bank subsidiary may provide home Provider (ISP). The OCC has determined that a national bank subsidiary may provide home

banking services through an Internet connection to the bank’s home banking system and, banking services through an Internet connection to the bank’s home banking system and,

incidental to that service, may also provide Internet access to bank customers using that incidental to that service, may also provide Internet access to bank customers using that

service. Historically, banks have used information systems technology to process checks (item service. Historically, banks have used information systems technology to process checks (item

processing), drive ATM machines (transaction processing), and produce reports. In the past, processing), drive ATM machines (transaction processing), and produce reports. In the past,

the computer systems that made the information systems operate were rarely noticed by the computer systems that made the information systems operate were rarely noticed by

customers. Today, Web sites, electronic mail, and electronic bill presentment and payment customers. Today, Web sites, electronic mail, and electronic bill presentment and payment

systems are an important way for banks to reach their customers. National banks have systems are an important way for banks to reach their customers. National banks have

experimented with various forms of online banking for many years. Some of the early experimented with various forms of online banking for many years. Some of the early

experiments involved closed systems where the customers accessed banks through a dial-in or experiments involved closed systems where the customers accessed banks through a dial-in or

cable TV connection. These systems limited a bank’s potential customer base because they cable TV connection. These systems limited a bank’s potential customer base because they

required out-of area customers to either incur long-distance charges on their phone bills or required out-of area customers to either incur long-distance charges on their phone bills or

subscribe to a particular cable TV service to access the bank. With the widespread growth of subscribe to a particular cable TV service to access the bank. With the widespread growth of

the Internet, customers can use this technology anywhere in the world to access a bank’s the Internet, customers can use this technology anywhere in the world to access a bank’s

network. The Internet, as an enabling technology, has made banking products and services network. The Internet, as an enabling technology, has made banking products and services

available to more customers and eliminated geographic and proprietary systems barriers. With available to more customers and eliminated geographic and proprietary systems barriers. With

an expanded market, banks also may have opportunities to expand or change their product an expanded market, banks also may have opportunities to expand or change their product

and service offerings.and service offerings.

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3.1 Growth in Internet Banking:3.1 Growth in Internet Banking:

Numerous factors — including competitive cost, customer service, andNumerous factors — including competitive cost, customer service, and demographicdemographic

considerations — are motivating banks to evaluate theirconsiderations — are motivating banks to evaluate their technology and assess their electronictechnology and assess their electronic

commerce and Internet bankingcommerce and Internet banking strategies. Many researchers expect rapid growth instrategies. Many researchers expect rapid growth in

customers using onlinecustomers using online banking products and services. The challenge for national banks is tobanking products and services. The challenge for national banks is to

make sure the savings from Internet banking technology more than offset the costsmake sure the savings from Internet banking technology more than offset the costs and risksand risks

associated with conducting business in cyberspace.associated with conducting business in cyberspace. Marketing strategies will vary as nationalMarketing strategies will vary as national

banks seek to expand their marketsbanks seek to expand their markets and employ lower cost delivery channels. Examiners willand employ lower cost delivery channels. Examiners will

need to understandneed to understand the strategies used and technologies employed on a bank-by-bank basis tothe strategies used and technologies employed on a bank-by-bank basis to

assess the risk. Evaluating a bankassess the risk. Evaluating a bank ’’s data on the use of their Web sites, mays data on the use of their Web sites, may help examinershelp examiners

determine the bankdetermine the bank’’s strategic objectives, how well the bank iss strategic objectives, how well the bank is meeting its Internet bankingmeeting its Internet banking

product plan, and whether the business is expectedproduct plan, and whether the business is expected to be profitable.to be profitable.

Some of the market factors that may drive a bankSome of the market factors that may drive a bank’’s strategy include thes strategy include the following:following:

Competition — Competition — Studies show that competitive pressure is the chief drivingStudies show that competitive pressure is the chief driving force force behind behind

increasing use of Internet banking technology, ranking ahead ofincreasing use of Internet banking technology, ranking ahead of cost reduction andcost reduction and

revenue enhancement, in second and third placerevenue enhancement, in second and third place respectively. Banks see Internetrespectively. Banks see Internet

banking as a way to keep existing customersbanking as a way to keep existing customers and attract new ones to the bank.and attract new ones to the bank.

Cost Efficiencies — Cost Efficiencies — National banks can deliver banking services on the InternetNational banks can deliver banking services on the Internet atat

transaction costs far lower than traditional brick-and-mortar branches. Thetransaction costs far lower than traditional brick-and-mortar branches. The actual costsactual costs

to execute a transaction will vary depending on the deliveryto execute a transaction will vary depending on the delivery channel used. For example,channel used. For example,

according to Booz, Allen & Hamilton, as of mid-according to Booz, Allen & Hamilton, as of mid- 1999, the cost to deliver manual1999, the cost to deliver manual

transactions at a branch was typically moretransactions at a branch was typically more than a dollar, ATM and call centerthan a dollar, ATM and call center

transactions cost about 25 cents, andtransactions cost about 25 cents, and Internet transactions cost about a penny. TheseInternet transactions cost about a penny. These

costs are expected to continuecosts are expected to continue to decline.to decline.

National banks have significant reasons to develop the technologies that willNational banks have significant reasons to develop the technologies that will help themhelp them

deliver banking products and services by the most cost-effectivedeliver banking products and services by the most cost-effective channels. Manychannels. Many

bankers believe that shifting only a small portion of thebankers believe that shifting only a small portion of the estimated 19-billion paymentsestimated 19-billion payments

16

mailed annually in the U.S. to electronicmailed annually in the U.S. to electronic delivery channels could save banks and otherdelivery channels could save banks and other

businesses substantial sums ofbusinesses substantial sums of money. However, national banks should use care inmoney. However, national banks should use care in

making product decisions.making product decisions. Management should include in their decision making theManagement should include in their decision making the

development anddevelopment and ongoing costs associated with a new product or service, including theongoing costs associated with a new product or service, including the

technology, marketing, maintenance, and customer support functions. Thistechnology, marketing, maintenance, and customer support functions. This will helpwill help

management exercise due diligence, make more informed decisions, and measure themanagement exercise due diligence, make more informed decisions, and measure the

success of their business venture.success of their business venture.

Geographical Reach — Geographical Reach — Internet banking allows expanded customer contactInternet banking allows expanded customer contact throughthrough

increased geographical reach and lower cost delivery channels.increased geographical reach and lower cost delivery channels. In fact some banks areIn fact some banks are

doing business exclusively via the Internet — they dodoing business exclusively via the Internet — they do not have traditional bankingnot have traditional banking

offices and only reach their customers online.offices and only reach their customers online. Other financial institutions are using theOther financial institutions are using the

Internet as an alternative deliveryInternet as an alternative delivery channel to reach existing customers and attract newchannel to reach existing customers and attract new

customers.customers.

Branding — Branding — Relationship building is a strategic priority for many nationalRelationship building is a strategic priority for many national banks.banks.

Internet banking technology and products can provide a means forInternet banking technology and products can provide a means for national banks tonational banks to

develop and maintain an ongoing relationship with theirdevelop and maintain an ongoing relationship with their customers by offering easycustomers by offering easy

access to a broad array of products and services.access to a broad array of products and services. By capitalizing on brand identificationBy capitalizing on brand identification

and by providing a broad array ofand by providing a broad array of financial services, banks hope to build customerfinancial services, banks hope to build customer

loyalty, cross-sell, andloyalty, cross-sell, and enhance repeat business.enhance repeat business.

Customer Demographics Customer Demographics — Internet banking allows national banks to offer a— Internet banking allows national banks to offer a wide arraywide array

of options to their banking customers. Some customers will rely onof options to their banking customers. Some customers will rely on traditional branchestraditional branches

to conduct their banking business. For many, this is theto conduct their banking business. For many, this is the most comfortable way for themmost comfortable way for them

to transact their banking business. Thoseto transact their banking business. Those customers place a premium on person-to-customers place a premium on person-to-

person contact. Other customers areperson contact. Other customers are early adopters of new technologies that arrive inearly adopters of new technologies that arrive in

the marketplace. Thesethe marketplace. These customers were the first to obtain PCs and the first to employcustomers were the first to obtain PCs and the first to employ

them inthem in conducting their banking business. The demographics of banking customersconducting their banking business. The demographics of banking customers willwill

continue to change. The challenge to national banks is to understand theircontinue to change. The challenge to national banks is to understand their customercustomer

17

base and find the right mix of delivery channels to deliver productsbase and find the right mix of delivery channels to deliver products and servicesand services

profitably to their various market segments.profitably to their various market segments.

ICICI Bank was the first bank to initiate the internet banking revolution in India as early as 1997 ICICI Bank was the first bank to initiate the internet banking revolution in India as early as 1997

under the brand name ‘infinity’.under the brand name ‘infinity’.

Internet banking has gained wide acceptance internationally and seems to be fast catching up Internet banking has gained wide acceptance internationally and seems to be fast catching up

in India with more and more banks entering the fray.in India with more and more banks entering the fray.

As per IDC estimates, the total number of registered users for Internet banking in India is over As per IDC estimates, the total number of registered users for Internet banking in India is over

two million. But this figure needs to be adjusted for dormant users and multiple accounts (a two million. But this figure needs to be adjusted for dormant users and multiple accounts (a

user having accounts with more than one bank). India has a little less than a million active user having accounts with more than one bank). India has a little less than a million active

Internet banking users. And though this is just 0.096 percent of the total population, it Internet banking users. And though this is just 0.096 percent of the total population, it

represents 15 percent of the India’s Internet user population. Thus, indicating that the concept represents 15 percent of the India’s Internet user population. Thus, indicating that the concept

of Internet banking is surely catching on.of Internet banking is surely catching on.

Impressive as these figures might be, the truth is that India lags behind other countries in Impressive as these figures might be, the truth is that India lags behind other countries in

Internet banking. In the US, the number of commercial banks with transactional websites is Internet banking. In the US, the number of commercial banks with transactional websites is

1,275 or 12 percent of the total number of banks. Of these, seven could be called ‘virtual 1,275 or 12 percent of the total number of banks. Of these, seven could be called ‘virtual

banks.’ Ten traditional banks have established Internet branches or divisions that operate banks.’ Ten traditional banks have established Internet branches or divisions that operate

under a unique brand name. At present, in the US approximately 78 percent of all commercial under a unique brand name. At present, in the US approximately 78 percent of all commercial

banks with assets more than $5 billion, 43 percent of banks with $500 million to $5 billion in banks with assets more than $5 billion, 43 percent of banks with $500 million to $5 billion in

assets, and 10 percent of banks under $500 million in assets have transactionalassets, and 10 percent of banks under $500 million in assets have transactional websites.websites.

From the Asian market experience, it is clear that Internet banking is here to stay and will be a From the Asian market experience, it is clear that Internet banking is here to stay and will be a

major channel to acquire and service customers. Markets like Korea and Singapore have nearly major channel to acquire and service customers. Markets like Korea and Singapore have nearly

10 percent of their population banking over the Internet. Though, these markets are way 10 percent of their population banking over the Internet. Though, these markets are way

ahead of India both in terms of Internet penetration and online banking penetration, India is a ahead of India both in terms of Internet penetration and online banking penetration, India is a

big potential market and is fast catching up with its Asian counterparts.big potential market and is fast catching up with its Asian counterparts.

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3.2 The Indian Saga:3.2 The Indian Saga:

In contrast, Indian banks have an insignificant Internet banking record. ICICI Bank kicked off In contrast, Indian banks have an insignificant Internet banking record. ICICI Bank kicked off

online banking way back in 1996 and a host of other banks soon followed suit. But even for the online banking way back in 1996 and a host of other banks soon followed suit. But even for the

Internet as a whole, 1996 to 1998 marked the adoption phase, while usage increased only in Internet as a whole, 1996 to 1998 marked the adoption phase, while usage increased only in

1999—due to lower ISP online charges, increased PC penetration and a tech-friendly 1999—due to lower ISP online charges, increased PC penetration and a tech-friendly

atmosphere.atmosphere.

After ICICI, Citibank, IndusInd Bank and HDFC Bank and Timesbank (now part of HDFC Bank), After ICICI, Citibank, IndusInd Bank and HDFC Bank and Timesbank (now part of HDFC Bank),

were the early ones to bite the technology bullet in 1999. were the early ones to bite the technology bullet in 1999. Initially the Net banking facility was Initially the Net banking facility was

provided in order to meet the information requirements of the customers and gradually it provided in order to meet the information requirements of the customers and gradually it

ventured into fund transfers and third party transfers.ventured into fund transfers and third party transfers.

Though adoption of Internet banking by Indian banks and their customers would not set the Though adoption of Internet banking by Indian banks and their customers would not set the

Arabian Sea on fire, no one can deny the obvious benefits that this service offers. Costs of Arabian Sea on fire, no one can deny the obvious benefits that this service offers. Costs of

banking service through the Internet amount to a fraction of the costs through conventional banking service through the Internet amount to a fraction of the costs through conventional

methods. Industry estimates assume teller cost at Re 1 per transaction, ATM transaction costs methods. Industry estimates assume teller cost at Re 1 per transaction, ATM transaction costs

at Re 0.45, phone banking at Re 0.35, debit cards at Re 0.20 and Internet banking at Re 0.10 at Re 0.45, phone banking at Re 0.35, debit cards at Re 0.20 and Internet banking at Re 0.10

per transaction.per transaction.

The prohibitive costs of real estate would always make Internet banking a much more viable The prohibitive costs of real estate would always make Internet banking a much more viable

option in the long run than physical banks. In today’s environment besides their physical option in the long run than physical banks. In today’s environment besides their physical

branches, banks need to grow non-branch delivery networks as a part of their growth strategy. branches, banks need to grow non-branch delivery networks as a part of their growth strategy.

ATMs are currently the hot favorite for most banks, but Internet banking definitely has the ATMs are currently the hot favorite for most banks, but Internet banking definitely has the

potential to leave the rest behind. Therefore, on the whole, Internet banking increases potential to leave the rest behind. Therefore, on the whole, Internet banking increases

operational efficiencies and reduces costs, besides giving a platform for offering value added operational efficiencies and reduces costs, besides giving a platform for offering value added

services to the customer, thereby fulfilling all the essential prerequisites for a flourishing services to the customer, thereby fulfilling all the essential prerequisites for a flourishing

banking industry.banking industry.

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3.3 The PSU lethargy: 3.3 The PSU lethargy: Like in all forms of technology innovations, PSU banks have remained laggards in the race for Like in all forms of technology innovations, PSU banks have remained laggards in the race for

adopting Internet banking practices. There are very few nationalized banks like State Bank of adopting Internet banking practices. There are very few nationalized banks like State Bank of

India, Punjab National Bank, Bank of Baroda, Allahabad Bank, and Union Bank of India, India, Punjab National Bank, Bank of Baroda, Allahabad Bank, and Union Bank of India,

Syndicate Bank and Bank of India that offer Internet banking services. SBI’s Internet banking Syndicate Bank and Bank of India that offer Internet banking services. SBI’s Internet banking

initiative, launched in July 2001, is in fact doing quite well and has over 18,000 registered initiative, launched in July 2001, is in fact doing quite well and has over 18,000 registered

customers across 150 branches. The enthusiastic response has encouraged the SBI customers across 150 branches. The enthusiastic response has encouraged the SBI

management to extend the service to an additional 500 branches. But despite positive news management to extend the service to an additional 500 branches. But despite positive news

like this, PSU banks still have a lot of catching up to do on the Internet banking services front.like this, PSU banks still have a lot of catching up to do on the Internet banking services front.

Some argue that the primary reason preventing PSUs from increasing their online banking Some argue that the primary reason preventing PSUs from increasing their online banking

services reach has been an absence of a legal framework to back up, and regulate internet services reach has been an absence of a legal framework to back up, and regulate internet

banking operations in the country. Though the Information Technology Act 2000 attempted to banking operations in the country. Though the Information Technology Act 2000 attempted to

address a number of e-commerce regulatory issues, there still are not several grey areas which address a number of e-commerce regulatory issues, there still are not several grey areas which

have been spelt out properly, nor have the courts suggested workable modes of have been spelt out properly, nor have the courts suggested workable modes of

implementation.implementation.

However, not many are willing to buy the argument that it’s the lack of regulations that is However, not many are willing to buy the argument that it’s the lack of regulations that is

preventing the PSU banks from taking the Internet plunge. More than a lack of regulatory preventing the PSU banks from taking the Internet plunge. More than a lack of regulatory

framework, it is lack of zeal and a mindset attuned towards resisting any new technology that isframework, it is lack of zeal and a mindset attuned towards resisting any new technology that is

holding back the nationalized banks.holding back the nationalized banks.

The average customer profile of PSU banks is also comfortable with the traditional banking The average customer profile of PSU banks is also comfortable with the traditional banking

system and is not too keen on adopting an online model. Typically, most PSU banks have the system and is not too keen on adopting an online model. Typically, most PSU banks have the

majority of their customer base in the smaller cities or towns and even in remote villages. Even majority of their customer base in the smaller cities or towns and even in remote villages. Even

in bigger cities, a large proportion of their customers are either senior citizens or at least 50+ in bigger cities, a large proportion of their customers are either senior citizens or at least 50+

who have a natural aversion towards adopting new technology. This not the case with private who have a natural aversion towards adopting new technology. This not the case with private

or MNC banks, where the clientele is mostly urban-based falling in the 20-40 age group and or MNC banks, where the clientele is mostly urban-based falling in the 20-40 age group and

who have a higher exposure to technology.who have a higher exposure to technology.

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Even the IDC survey seems to confirm this premise. Among the elite Internet banking users, Even the IDC survey seems to confirm this premise. Among the elite Internet banking users,

that is, those customers who belong to Socio-Economic Class A1 (SEC A1) in the top five cities, that is, those customers who belong to Socio-Economic Class A1 (SEC A1) in the top five cities,

it has been found that people access their account through the Internet once every week. it has been found that people access their account through the Internet once every week.

Similarly users visit their ATM centre on an average of two times per week. The workplace Similarly users visit their ATM centre on an average of two times per week. The workplace

happens to be the most favored place to access Internet for banking purposes. The home happens to be the most favored place to access Internet for banking purposes. The home

comes a close second while cybercafés take the third place. ATM in the close vicinity to the comes a close second while cybercafés take the third place. ATM in the close vicinity to the

office is the most preferred place among users for banking. The users (24 percent) who access office is the most preferred place among users for banking. The users (24 percent) who access

the ATM near their office mostly go during the first half of the day, between 9 AM to 12 PM, the ATM near their office mostly go during the first half of the day, between 9 AM to 12 PM,

but most preferred time by all users (41 percent) is between 6-9 PM.but most preferred time by all users (41 percent) is between 6-9 PM.

3.4 Bouquet strategy: 3.4 Bouquet strategy: This, probably, explains why more and more banks are looking at Internet banking as another This, probably, explains why more and more banks are looking at Internet banking as another

attractive addition to their bouquet of delivery channels. At least in urban areas, ATMs are attractive addition to their bouquet of delivery channels. At least in urban areas, ATMs are

already fast becoming the most popular mode of banking, while phone banking and mobile already fast becoming the most popular mode of banking, while phone banking and mobile

banking are also on the upswing as the user base grows. Internet banking now seems to be the banking are also on the upswing as the user base grows. Internet banking now seems to be the

perfect model to complement the whole system.perfect model to complement the whole system.

What is ultimately emerging is that though there is certainly a high level of importance What is ultimately emerging is that though there is certainly a high level of importance

attached to Internet banking, it is at present not necessarily a priority for all banks. As far as attached to Internet banking, it is at present not necessarily a priority for all banks. As far as

banks are concerned, migrating customers to any self-directed channel is the main goal. banks are concerned, migrating customers to any self-directed channel is the main goal.

However, the future of banking will be one in which customers can address most of their needsHowever, the future of banking will be one in which customers can address most of their needs

through self-directed means and the key differentiator will be how effective a bank is in getting through self-directed means and the key differentiator will be how effective a bank is in getting

its customers online and deriving measurable value from this presence. One can sum up the its customers online and deriving measurable value from this presence. One can sum up the

whole Internet banking scenario with the adage, whole Internet banking scenario with the adage,

“For while winners may not see massive gains, the losers will fade from view as their ability to “For while winners may not see massive gains, the losers will fade from view as their ability to

compete is eroded with every mouse click.”compete is eroded with every mouse click.”

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3.5 Banks’ key pain points and opportunities in internet banking:3.5 Banks’ key pain points and opportunities in internet banking:

4.4. MOBILE BANKING:MOBILE BANKING:

MobileMobile bankingbanking is a way for the customer to perform is a way for the customer to perform bankingbanking actions on his or her cell phone actions on his or her cell phone

or other or other mobilemobile device. It is a quite popular method of device. It is a quite popular method of bankingbanking that fits in well with a busy, that fits in well with a busy,

technologically oriented lifestyle. It might also be referred to as M-technologically oriented lifestyle. It might also be referred to as M-bankingbanking or or SMSSMS bankingbanking. .

The amount of The amount of bankingbanking you are able to do on your cell phone varies depending on the you are able to do on your cell phone varies depending on the bankingbanking

institution you use. Some banks offer only the option of institution you use. Some banks offer only the option of text alertstext alerts, which are messages sent to, which are messages sent to

your cell phone that alert you to activity on your account such as deposits, withdrawals, andyour cell phone that alert you to activity on your account such as deposits, withdrawals, and

ATM or ATM or credit cardcredit card use. This is the most basic type of use. This is the most basic type of mobilemobile bankingbanking..

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Internet banking user experience & functionality not comprehensive

Internet banking solution not stable/ scalable/ flexible enough

Consumer confidence in security starts to reduce

Internet banking processes not realized as STP

Enhancing internet banking to become a sales channel

Develop products and services customized to the internet channel

Internet banking can be a driving part of an integrated channel mix

A more involved type of mobile banking allows the user to log into his or her account from aA more involved type of mobile banking allows the user to log into his or her account from a

cell phone, and then use the phone to make payments, check balances, transfer moneycell phone, and then use the phone to make payments, check balances, transfer money

between accounts, notify the bank of a lost or stolen credit card, stop payment on a check,between accounts, notify the bank of a lost or stolen credit card, stop payment on a check,

receive a new PIN, or view a monthly statement, among other transactions. This type ofreceive a new PIN, or view a monthly statement, among other transactions. This type of

banking is meant to be more convenient for the consumer than having to physically go into abanking is meant to be more convenient for the consumer than having to physically go into a

bank, log on from their home computer, or make a phone call. While all of this is true, somebank, log on from their home computer, or make a phone call. While all of this is true, some

are concerned about the security of mobile banking.are concerned about the security of mobile banking.

Most experts advise against performing any large transactions over mobile banking, which isMost experts advise against performing any large transactions over mobile banking, which is

good advice. However, it is equally important to use an alphanumeric password and to keepgood advice. However, it is equally important to use an alphanumeric password and to keep

your PIN safe. Change your password often, and do not use your pets' names, your child'syour PIN safe. Change your password often, and do not use your pets' names, your child's

name, or any birthdays. This advice applies to all passwords, not just those used for mobilename, or any birthdays. This advice applies to all passwords, not just those used for mobile

banking. Though you are logging on to a secure server at the bank through your cell phone, youbanking. Though you are logging on to a secure server at the bank through your cell phone, you

need to do your part to protect your information. For this reason, many banks are now sendingneed to do your part to protect your information. For this reason, many banks are now sending

one-time use passwords for an extra step in security.one-time use passwords for an extra step in security.

A one-time use password might be sent to a cell phone or other device when you wish to logA one-time use password might be sent to a cell phone or other device when you wish to log

into your account. You will then usually need to enter both the password you have already set,into your account. You will then usually need to enter both the password you have already set,

along with the one-time use password, within a certain period of time. The one-time usealong with the one-time use password, within a certain period of time. The one-time use

password expires, naturally, after it is used once or after a time limit has passed. Using twopassword expires, naturally, after it is used once or after a time limit has passed. Using two

passwords increases the security of the account, an important concern with mobile banking.passwords increases the security of the account, an important concern with mobile banking.

5.5. ATMsATMs

Automated Teller Machine is a computerized machine that provides the customers of banksAutomated Teller Machine is a computerized machine that provides the customers of banks

the facility of accessing their accounts for drawing cash and to carry out other financialthe facility of accessing their accounts for drawing cash and to carry out other financial

transactions without the need of actually visiting a bank branch.transactions without the need of actually visiting a bank branch.

ATM cards/debit cards, credit cards and prepaid cards (that permit cash withdrawal) can beATM cards/debit cards, credit cards and prepaid cards (that permit cash withdrawal) can be

used at ATMs for various transactions.used at ATMs for various transactions.

In addition to cash dispensing, ATMs have following services/facilities:In addition to cash dispensing, ATMs have following services/facilities:

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Balance EnquiryBalance Enquiry

Cash Deposit Cash Deposit

Funds Transfer Funds Transfer

Prepaid Mobile RechargePrepaid Mobile Recharge

Mini/Short Statement Mini/Short Statement

PIN Change etc.PIN Change etc.

The services offered may vary from bank to bank, or may depend on the capacity of theThe services offered may vary from bank to bank, or may depend on the capacity of the

machine at the ATM outlet to provide such services.machine at the ATM outlet to provide such services.

6.6. CCREDIT CARDS:REDIT CARDS:

Credit card is given by the banker to the customers in whom the name of the customer isCredit card is given by the banker to the customers in whom the name of the customer is

embossed in blocks letters, the name of the bank of issues and expiry are also mentioned onembossed in blocks letters, the name of the bank of issues and expiry are also mentioned on

the field the reverse side of the card will bear the specimen signature of the customers. A list ofthe field the reverse side of the card will bear the specimen signature of the customers. A list of

vendors or sellers will be given by the banker to the customers.vendors or sellers will be given by the banker to the customers.

TYPES OF CREDIT CARDSTYPES OF CREDIT CARDS

Charge cardCharge card

oo In this card, the cardholder has to make full payment of the charge by the due In this card, the cardholder has to make full payment of the charge by the due

date. Unlike other credit cards, here dues are not allowed to carry forward.date. Unlike other credit cards, here dues are not allowed to carry forward.

Affinity cardAffinity card

oo A card offered by two organizations of which one is a lending institution and the A card offered by two organizations of which one is a lending institution and the

other a non financial group. Here schools, nonprofit groups, airlines, petroleum other a non financial group. Here schools, nonprofit groups, airlines, petroleum

companies issue affinity cards. These cards carry special discounts.companies issue affinity cards. These cards carry special discounts.

Standard cardStandard card

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oo It is a normal credit card which carries limit on transactions, according to the It is a normal credit card which carries limit on transactions, according to the

credit worthiness of the card holder.credit worthiness of the card holder.

Classis card.Classis card.

oo A credit card issued by visa, carrying the logo of visa.A credit card issued by visa, carrying the logo of visa.

Gold cardGold card

oo A credit card that offers a higher line of credit than a standard card. Income A credit card that offers a higher line of credit than a standard card. Income

eligibility is also higher. In addition, issuers provide extra perks or incentives to eligibility is also higher. In addition, issuers provide extra perks or incentives to

cardholder.cardholder.

Platinum cardPlatinum card

oo A credit card with a higher limit and additional perks than a gold card.A credit card with a higher limit and additional perks than a gold card.

Titanium cardTitanium card

oo A card with a even higher limit than a platinum card.A card with a even higher limit than a platinum card.

Secured cardSecured card

oo A credit card is given to a card holder who has savings deposit which willA credit card is given to a card holder who has savings deposit which will

take care of his outstanding balance, in case of his default on payment.take care of his outstanding balance, in case of his default on payment.

Smart cardSmart card

oo Smart cards, sometimes called chip[ cards, contains a computer chipSmart cards, sometimes called chip[ cards, contains a computer chip

embedded in the plastic where a typical credit card's magnetic strip can holdembedded in the plastic where a typical credit card's magnetic strip can hold

only a few dozen characters, strip can hold only a few dozen characters,only a few dozen characters, strip can hold only a few dozen characters,

smarty cards are now available with 16k of memory. When read buy asmarty cards are now available with 16k of memory. When read buy a

special terminals, the cardsspecial terminals, the cards can perform a number of functions or accesscan perform a number of functions or access

data stored in the chip. These cards can be used as cash cards or as creditdata stored in the chip. These cards can be used as cash cards or as credit

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cards with a present credit limit, or used as ID cards with stored – incards with a present credit limit, or used as ID cards with stored – in

passwords.passwords.

7.7. DDEBIT CARDS:EBIT CARDS:

A A debit carddebit card (also known as a (also known as a bank cardbank card or or check cardcheck card) is a plastic card that provides an) is a plastic card that provides an

alternative payment method to alternative payment method to cashcash when making purchases. Functionally, it can be called an when making purchases. Functionally, it can be called an

electronic cheque, as the funds are withdrawn directly from either the electronic cheque, as the funds are withdrawn directly from either the bank accountbank account or from or from

the remaining balance on the card. In some cases, the cards are designed exclusively for use onthe remaining balance on the card. In some cases, the cards are designed exclusively for use on

the Internet, and so there is no physical card. Debit cards may also allow for instant withdrawalthe Internet, and so there is no physical card. Debit cards may also allow for instant withdrawal

of cash, acting as the of cash, acting as the ATM cardATM card for withdrawing cash and as a for withdrawing cash and as a cheque guarantee cardcheque guarantee card..

Merchants may also offer Merchants may also offer cash backcash back facilities to customers, where a customer can withdraw facilities to customers, where a customer can withdraw

cash along with their purchase.cash along with their purchase.

Debit Card TypesDebit Card Types

There are two types of debit card categories. These are the virtual debit cards and theThere are two types of debit card categories. These are the virtual debit cards and the

physical debit cards. A wide range of debit card products are offered under these categories.physical debit cards. A wide range of debit card products are offered under these categories.

These cards are provided with a number of features. These cards are provided with a number of features.

Virtual Debit CardsVirtual Debit Cards

These cards have been designed as a measure to check the fraudulent activities that areThese cards have been designed as a measure to check the fraudulent activities that are

done through the Internet. There are a number of virtual credit cards offered by thedone through the Internet. There are a number of virtual credit cards offered by the

companies. Some of these cards are as follows: companies. Some of these cards are as follows:

Gift CardsGift Cards

Payroll CardsPayroll Cards

Merchant CardsMerchant Cards

Incentive CardsIncentive Cards

Student Cards Student Cards

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Services Offered by Different Types of Virtual Debit CardsServices Offered by Different Types of Virtual Debit Cards

Payments Through InternetPayments Through Internet

SMS TransfersSMS Transfers

Offline PaymentsOffline Payments

Money TransferMoney Transfer

Depository ServicesDepository Services

Physical Debit CardsPhysical Debit Cards

These cards are similar to other plastic cards but the main difference is that the cardholdersThese cards are similar to other plastic cards but the main difference is that the cardholders

should put the money in the card account before using the card. Different types of Physicalshould put the money in the card account before using the card. Different types of Physical

Debit Cards are provided by the card companies. Some of these are the following: Debit Cards are provided by the card companies. Some of these are the following:

Re-Loadable Debit Cards:Re-Loadable Debit Cards: There are a number of cards that are provided as Re-Loadable Debit There are a number of cards that are provided as Re-Loadable Debit

Cards. These are Payment Cards, Merchant Cards, Student Cards, Payroll Cards, andCards. These are Payment Cards, Merchant Cards, Student Cards, Payroll Cards, and

Government Payment Cards and so onGovernment Payment Cards and so on

Disposable Debit Cards:Disposable Debit Cards: Some of these cards are Incentive Cards, Gift Cards and so on. Some of these cards are Incentive Cards, Gift Cards and so on.

Services Offered by Physical Debit CardsServices Offered by Physical Debit Cards

ATM ServicesATM Services

Money Transfer ServicesMoney Transfer Services

Online/Offline PaymentsOnline/Offline Payments

Depository ServicesDepository Services

POS TerminalsPOS Terminals

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8.8. Punjab National Bank:Punjab National Bank:

8.1 Company Profile:8.1 Company Profile:

Punjab National Bank is one of the oldest banks in India. It was registered under the Indian Punjab National Bank is one of the oldest banks in India. It was registered under the Indian

Companies Act in 1894. This bank is government owned and is the second largest commercial Companies Act in 1894. This bank is government owned and is the second largest commercial

bank owned by the government of India. With over 56 million satisfied customers and 5002 bank owned by the government of India. With over 56 million satisfied customers and 5002

offices, PNB has continued to retain its leadership position amongst the nationalized banks. Theoffices, PNB has continued to retain its leadership position amongst the nationalized banks. The

bank enjoys strong fundamentals, large franchise value and good brand image. Besides being bank enjoys strong fundamentals, large franchise value and good brand image. Besides being

ranked as one of India's top service brands, PNB has remained fully committed to its guiding ranked as one of India's top service brands, PNB has remained fully committed to its guiding

principles of sound and prudent banking. Apart from offering banking products, the bank has principles of sound and prudent banking. Apart from offering banking products, the bank has

also entered the credit card & debit card business; bullion business; life and non-life insurance also entered the credit card & debit card business; bullion business; life and non-life insurance

business; Gold coins & asset management business, etc.business; Gold coins & asset management business, etc.

Since its humble beginning in 1895 with the distinction of being the first Indian bank to have Since its humble beginning in 1895 with the distinction of being the first Indian bank to have

been started with Indian capital, PNB has achieved significant growth in business which at the been started with Indian capital, PNB has achieved significant growth in business which at the

end of March 2010 amounted to Rs 435931 crore. Today, with assets of more than Rs 2, 96,633end of March 2010 amounted to Rs 435931 crore. Today, with assets of more than Rs 2, 96,633

crore, PNB is ranked as the 3rd largest bank in the country (after SBI and ICICI Bank) and has crore, PNB is ranked as the 3rd largest bank in the country (after SBI and ICICI Bank) and has

the 2nd largest network of branches (5002 offices including 5 overseas branches)the 2nd largest network of branches (5002 offices including 5 overseas branches)

8.2VISION8.2VISION

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"To be a Leading Global Bank with Pan India footprints and become a household brand in the"To be a Leading Global Bank with Pan India footprints and become a household brand in the

Indo-Gangetic Plains providing entire range of financial products and services under one Indo-Gangetic Plains providing entire range of financial products and services under one

roof"roof"

8.3 MISSION8.3 MISSION

"Banking for the unbanked""Banking for the unbanked"

8.4 Overview of the performance as on Mar’10:8.4 Overview of the performance as on Mar’10:

40.85% share of CASA deposits40.85% share of CASA deposits Capital adequacy ratio – 14.16%Capital adequacy ratio – 14.16%

Gross NPA ratio – 1.71%Gross NPA ratio – 1.71% Net NPA ratio – 0.53%Net NPA ratio – 0.53%

NIM – 3.57%NIM – 3.57% Return on Assets – 1.44%Return on Assets – 1.44%

Earning Per Share – Rs. 123.98Earning Per Share – Rs. 123.98 Book Value Per Share – Rs. 514.77Book Value Per Share – Rs. 514.77

Punjab National Bank continues to maintain its frontline position in the Indian bankingPunjab National Bank continues to maintain its frontline position in the Indian banking

industry. In particular, the bank has retained its NUMBER ONE position among the nationalizedindustry. In particular, the bank has retained its NUMBER ONE position among the nationalized

banks in terms of number of branches, Deposit, Advances, total Business, Assets, Operatingbanks in terms of number of branches, Deposit, Advances, total Business, Assets, Operating

and Net profit in the year 2009-10. The impressive operational and financial performance hasand Net profit in the year 2009-10. The impressive operational and financial performance has

been brought about by Bank’s focus on customer based business with thrust on CASA deposits,been brought about by Bank’s focus on customer based business with thrust on CASA deposits,

Retail, SME & Agri Advances and with more inclusive approach to banking; better asset liabilityRetail, SME & Agri Advances and with more inclusive approach to banking; better asset liability

management; improved margin management, thrust on recovery and increased efficiency inmanagement; improved margin management, thrust on recovery and increased efficiency in

core operations of the Bank. The performance highlights of the bank in terms of business andcore operations of the Bank. The performance highlights of the bank in terms of business and

profit are shown below: profit are shown below:

Operating ProfitOperating Profit :: Rs. 7326 CrRs. 7326 Cr 28.80%28.80%

Net ProfitNet Profit :: Rs. 3905 CrRs. 3905 Cr 26.40%26.40%

Total BusinessTotal Business :: Rs. 435931 CrRs. 435931 Cr 19.60%19.60%

DepositsDeposits :: Rs. 249330 CrRs. 249330 Cr 18.90%18.90%

CreditsCredits :: Rs. 186601 CrRs. 186601 Cr 20.60%20.60%

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Total AssetsTotal Assets :: Rs. 296633 CrRs. 296633 Cr 20.10%20.10%

8.5 Punjab National Bank’s robust technology platform:8.5 Punjab National Bank’s robust technology platform:

PNB has always looked at technology as a key facilitator to provide better customer service andPNB has always looked at technology as a key facilitator to provide better customer service and

ensured that its ‘IT strategy’ follows the ‘Business strategy’ so as to arrive at “Best Fit”. The ensured that its ‘IT strategy’ follows the ‘Business strategy’ so as to arrive at “Best Fit”. The

bank has made rapid strides in this direction.bank has made rapid strides in this direction.

All branches of the Bank are under Core Banking Solution (CBS) since Dec’08, thus All branches of the Bank are under Core Banking Solution (CBS) since Dec’08, thus

covering 100% of its business and providing ‘Anytime Anywhere’ banking facility to all covering 100% of its business and providing ‘Anytime Anywhere’ banking facility to all

customers including customers of more than 3000 rural & semi urban branches.customers including customers of more than 3000 rural & semi urban branches.

The bank has also been offering Internet banking services to the customers of CBS The bank has also been offering Internet banking services to the customers of CBS

branches like booking of tickets, payment of bills of utilities, purchase of airline tickets branches like booking of tickets, payment of bills of utilities, purchase of airline tickets

etc. Towards developing a cost effective alternative channels of delivery, the bank with etc. Towards developing a cost effective alternative channels of delivery, the bank with

more than 350 ATMs has the largest ATM network amongst Nationalized Banks.more than 350 ATMs has the largest ATM network amongst Nationalized Banks.

CBS platform is upgraded with Oracle RAC (Real Application Cluster) to meet scalability CBS platform is upgraded with Oracle RAC (Real Application Cluster) to meet scalability

and availability. First Finacle CBS setup to have RAC.and availability. First Finacle CBS setup to have RAC.

5116 service outlets (SOLs) at 2694 centers across the country facilitating around 56 5116 service outlets (SOLs) at 2694 centers across the country facilitating around 56

million account holders with “Anytime and Anywhere Banking”.million account holders with “Anytime and Anywhere Banking”.

A world class security operations centre to monitor, manage the security setup of the A world class security operations centre to monitor, manage the security setup of the

bank’s centralized technology activities, first of its kind for any bank in the country.bank’s centralized technology activities, first of its kind for any bank in the country.

First nationalized bank to implement the enterprise-wide data warehouse to integrate First nationalized bank to implement the enterprise-wide data warehouse to integrate

data from multiple source systems and provide MIS and data feed to anti money data from multiple source systems and provide MIS and data feed to anti money

laundering and operational risk solution.laundering and operational risk solution.

Operational risk solution operationalized to monitor compliance with BASEL II Operational risk solution operationalized to monitor compliance with BASEL II

requirements.requirements.

Effective and seamless integration with payment systems like RTGS, NEFT, ECS facility Effective and seamless integration with payment systems like RTGS, NEFT, ECS facility

enabled at all 49 centers.enabled at all 49 centers.

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All 6 PNB sponsored RRBs 100% CBS compliant covering 1416 SOLs.All 6 PNB sponsored RRBs 100% CBS compliant covering 1416 SOLs.

8.6 Punjab National Bank increasing its global footprints:8.6 Punjab National Bank increasing its global footprints:

Bank is in the process of:Bank is in the process of:

Upgrading its Representative Offices in China and Norway to branch.Upgrading its Representative Offices in China and Norway to branch.

Setting up of representative office in Sydney, Australia.Setting up of representative office in Sydney, Australia.

Acquiring 63.64% stake with management control in JSC Dana Bank in Kazakhstan.Acquiring 63.64% stake with management control in JSC Dana Bank in Kazakhstan.

Setting up a wholly owned subsidiary in Canada, head quartered at Vancouver.Setting up a wholly owned subsidiary in Canada, head quartered at Vancouver.

8.7 8.7 Bank has been a recipient of many awards and accolades duringBank has been a recipient of many awards and accolades during

the year:-the year:-

Gold trophy of SCOPE Meritorious Award for Excellence in Corporate Governance 2009Gold trophy of SCOPE Meritorious Award for Excellence in Corporate Governance 2009

by Standing Conference of Public Enterprisesby Standing Conference of Public Enterprises

As per Financial Express-Ernest & young (FE-EY) India’s Best Banks Survey, PNB isAs per Financial Express-Ernest & young (FE-EY) India’s Best Banks Survey, PNB is

identified as the best bank among the nationalized banks in terms of overall ranking.identified as the best bank among the nationalized banks in terms of overall ranking.

As per HT-Mars Survey on Customer Satisfaction, PNB stood NUMBER ONE in Delhi andAs per HT-Mars Survey on Customer Satisfaction, PNB stood NUMBER ONE in Delhi and

Chennai in terms of customer satisfaction.Chennai in terms of customer satisfaction.

As per the Forbes Annual list of 2000 global giants, PNB tops the list of nationalizedAs per the Forbes Annual list of 2000 global giants, PNB tops the list of nationalized

banks with a global ranking of 695, substantial improvement over last year’s placementbanks with a global ranking of 695, substantial improvement over last year’s placement

at 946th position.at 946th position.

The Economic Times has ranked CEO of PNB as the 32nd Most Powerful CEO of 2010.The Economic Times has ranked CEO of PNB as the 32nd Most Powerful CEO of 2010.

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Skoch Challenge Award 2010 for “Livelihood Linkage” of the milk producers inSkoch Challenge Award 2010 for “Livelihood Linkage” of the milk producers in

Bulandshahr District, Uttar Pradesh.Bulandshahr District, Uttar Pradesh.

IDC Financial Insights Innovation awards 2010 by IDC Financial InsightsIDC Financial Insights Innovation awards 2010 by IDC Financial Insights

8.8 Products and services:8.8 Products and services:

Punjab National Bank offers a wide range of products and services in Personal banking, Punjab National Bank offers a wide range of products and services in Personal banking,

corporate banking and home loans segment.corporate banking and home loans segment.

Savings Fund Account Savings Fund Account Total Freedom Salary Account, PNB Total Freedom Salary Account, PNB

Prudent Sweep, PNB Vidyarthi SF Account, PNBPrudent Sweep, PNB Vidyarthi SF Account, PNB

Mitra SF Mitra SF

Account Current Account Account Current Account PNB Vaibhav, PNB Gaurav, PNB Smart PNB Vaibhav, PNB Gaurav, PNB Smart

RoamerRoamer

Fixed Deposit Schemes Fixed Deposit Schemes Spectrum Fixed Deposit Scheme, Anupam Spectrum Fixed Deposit Scheme, Anupam

Account, Mahabachat Schemes, Multi BenefitAccount, Mahabachat Schemes, Multi Benefit

Deposit Deposit

Scheme Credit Schemes Scheme Credit Schemes Flexible Housing Loan, Car Finanace, Flexible Housing Loan, Car Finanace,

Personal Loan, Credit CardsPersonal Loan, Credit Cards

Social Banking Social Banking Mahila Udyam Nidhi Scheme, Krishi Card, Mahila Udyam Nidhi Scheme, Krishi Card,

PNB Farmers Welfare TrustPNB Farmers Welfare Trust

Corporate Banking Corporate Banking Gold Card scheme for exporters, EXIM Gold Card scheme for exporters, EXIM

financefinance

Business Sector Business Sector PNB Karigar credit card, PNB Kushal PNB Karigar credit card, PNB Kushal

32

Udhami, PNB Pragati Udhami, PNB Vikas UdhamiUdhami, PNB Pragati Udhami, PNB Vikas Udhami

9.9. PEST Analysis:PEST Analysis:

33

Political

Regulatory Bodies

Govt. policies

International legislation

Technological

Competent technology development

IT

Global communication

Innovation potential

Economic

Economic trends (Indian & Global)

Seasonality and weather issues

Interest and exchange rates

Social

Lifestyle trends

Customer attitudes and opinions

Media views

Brand image

Advertising and publicity

10.10. SWOT Analysis:SWOT Analysis:

STRENGHTHSLoyal customersBrand imageLow opening balance requiredSpeedy transactionsEasy Availability of loans at low cost of interest100% CBS enabled branchesLess affected by the depreciation of other currencies than the foreign banks

WEAKNESSPoor ATM servicesNot so attractive ambienceAttendance of queries over the phoneIneffective marketing of financial productsGrievances of increasing rates for locker servicesRelationship managers not very visibleFrequent link failures bringing activities to halt

OPPORTUNITYFurther developments in internet bankingTraining staff in using computer aided softwaresSelling more of self branded products than third party productsProper implementation of CRM

THREATPrivate sector banksOther public sector banks offering higher rates of interest on depositsYoung generation does not have a very positive image about the branch (obsolete and not eye catching) so they are reluctant to open their accounts.

34

Social

Lifestyle trends

Customer attitudes and opinions

Media views

Brand image

Advertising and publicity

11.11. TOWS Analysis: TOWS Analysis:

35

12.12. Research Statement:Research Statement:

12.1 Research Problem:12.1 Research Problem:

36

With more and more banks coming up the competition level is soaring high. The research With more and more banks coming up the competition level is soaring high. The research

attempts to understand how its existing customers rate the various parameters and where theyattempts to understand how its existing customers rate the various parameters and where they

expect improvements. This research paper is directed towards re-branding suggestions for expect improvements. This research paper is directed towards re-branding suggestions for

various PNB e-products like internet banking, mobile banking, ATMs, Debit cards, Credit cards.various PNB e-products like internet banking, mobile banking, ATMs, Debit cards, Credit cards.

12.2 Project Objectives:12.2 Project Objectives:

To study the e-banking potential in India in the current scenario.To study the e-banking potential in India in the current scenario.

To study brand image of various e-products at PNB in the minds of the customers.To study brand image of various e-products at PNB in the minds of the customers.

To measure the customer satisfaction through a questionnaire generating customer To measure the customer satisfaction through a questionnaire generating customer

responses.responses.

To analyze the correlation between the quantitative and the qualitative factors in To analyze the correlation between the quantitative and the qualitative factors in

overall customer satisfaction.overall customer satisfaction.

To recommend better practices as felt through observations and customer suggestions.To recommend better practices as felt through observations and customer suggestions.

To give PNB e-banking a completely new and fresh look.To give PNB e-banking a completely new and fresh look.

12.3 Research design, methodology and research instrument:12.3 Research design, methodology and research instrument:

12.3.1 Research Plan:12.3.1 Research Plan:

12.3.1.1Primary Investigation:12.3.1.1Primary Investigation:

In which data on the situation surrounding the problem will be gathered in order to arrive at In which data on the situation surrounding the problem will be gathered in order to arrive at

the correct definition of the problem.the correct definition of the problem.

12.3.1.2 Exploratory Study:12.3.1.2 Exploratory Study:

Determine the approximate area where the problem liesDetermine the approximate area where the problem lies

12.3.2 Research Design:12.3.2 Research Design:

Research was initiated by examining the secondary data to gain insight into the problem. By Research was initiated by examining the secondary data to gain insight into the problem. By

analyzing the secondary data, the study aim is to explore the short comings of the present analyzing the secondary data, the study aim is to explore the short comings of the present

37

system and primary data will help to validate the analysis of secondary data besides on system and primary data will help to validate the analysis of secondary data besides on

unrevealing the areas which calls for improvement.unrevealing the areas which calls for improvement.

12.412.4 Analysis and Rebranding of PNB Internet Banking:Analysis and Rebranding of PNB Internet Banking:

PNB – Prefect Net BankingPNB – Prefect Net Banking

Enjoy the benefits of internet banking 24x7x365Enjoy the benefits of internet banking 24x7x365

PNB offers Internet Banking services for both to the Corporate and Individuals. It provides 24PNB offers Internet Banking services for both to the Corporate and Individuals. It provides 24

hours, 365 days banking from the PC of the user. A user can operate anytime and fromhours, 365 days banking from the PC of the user. A user can operate anytime and from

anywhere its accounts. The following are some of the services available online:anywhere its accounts. The following are some of the services available online:

Access to accountAccess to account

Complete details of transactions and statement of accountComplete details of transactions and statement of account

Online information of deposits, loans overdraft account etc.Online information of deposits, loans overdraft account etc.

Online Payment Facility for railway reservation through IRCTC Payment Gateway ProjectOnline Payment Facility for railway reservation through IRCTC Payment Gateway Project

Online Utility Bill Payment Services which allows Internet Banking account holders toOnline Utility Bill Payment Services which allows Internet Banking account holders to

pay their telephone, mobile, electricity, insurance and other bills anytime frompay their telephone, mobile, electricity, insurance and other bills anytime from

anywhere from their desktop. anywhere from their desktop.

In order to avail internet banking, the consumers have to agree to certain conditions toIn order to avail internet banking, the consumers have to agree to certain conditions to

use the internet banking facility continuously without any problems. The most importantuse the internet banking facility continuously without any problems. The most important

condition of all is the software which has to be availed by the consumer for himself which iscondition of all is the software which has to be availed by the consumer for himself which is

given below:given below:

38

Software applications used for using

Internet banking

RTGS N EFT

PN B Internet Explorer 5.5 or above Yes Yes

SBI Microsoft Internet Explorer 7 and

above or Mozilla 3 and above

Yes Yes

Axis Internet explorer Ver. 5.5 & above Yes Yes

BOB Internet explorer Ver. 5.0 Yes Yes

HDFC Internet Explorer Version 5.5 and

above Netscape Navigator Version 4.7

and above.

Yes Yes

IC IC I Internet Explorer Ver. 5.5 and Ver. 6 or

Firefox Ver. 1.5 with a resolution of

1024x768.

Yes Yes

Standard C hartered Minimum software required to access

internet

Yes Yes

C itibank Any browser Yes Yes

The Bank requirements for software in order to let the consumers use internet banking differsThe Bank requirements for software in order to let the consumers use internet banking differs

as per their technology usage. The foreign banks don’t find any problems as far as technology isas per their technology usage. The foreign banks don’t find any problems as far as technology is

concerned whereas nationalized banks require particular software for the consumers to useconcerned whereas nationalized banks require particular software for the consumers to use

their internet banking services. their internet banking services.

The internet banking facility provided by PNB is overall good as compared to the other banksThe internet banking facility provided by PNB is overall good as compared to the other banks

but requires a few changes in terms of its looks and ease in complexities which would attractbut requires a few changes in terms of its looks and ease in complexities which would attract

the consumers to use more and more internet banking. the consumers to use more and more internet banking. The aesthetics of the webpage are notThe aesthetics of the webpage are not

very pleasing.very pleasing.

The current positioning of PNB internet banking defines it as a perfect banking solution forThe current positioning of PNB internet banking defines it as a perfect banking solution for

internet users. It says that no matter what the time is, customers can use internet bankinginternet users. It says that no matter what the time is, customers can use internet banking

facilities any time as per their convenience. This also indicates the PNB culture that customersfacilities any time as per their convenience. This also indicates the PNB culture that customers

are a priority for all PNB employees. This goes in line with the PNB tag line, ’the name you canare a priority for all PNB employees. This goes in line with the PNB tag line, ’the name you can

39

bank upon.’ It suggests to the customers that Punjab National Bank is the one which Indiansbank upon.’ It suggests to the customers that Punjab National Bank is the one which Indians

have always trusted and with the advancement of technology PNB has improved itself for thehave always trusted and with the advancement of technology PNB has improved itself for the

better. Safety and security of customers is equally important for PNB.better. Safety and security of customers is equally important for PNB.

The brochure displays a human hand pressing the enter key of a laptop on which the words The brochure displays a human hand pressing the enter key of a laptop on which the words

PNB Safe Net Banking are highlighted. The screen of the laptop shows the PNB online website. PNB Safe Net Banking are highlighted. The screen of the laptop shows the PNB online website.

The brochure also says that the bank caters to two types of customers:The brochure also says that the bank caters to two types of customers:

Retail customersRetail customers

Corporate customersCorporate customers

The brochure also lists down various facilities that are made available to both types of The brochure also lists down various facilities that are made available to both types of

customers. There is also a mention of Help Desk.customers. There is also a mention of Help Desk.

As PNB has basically catered to a huge number of lower and middle class citizens of India, the As PNB has basically catered to a huge number of lower and middle class citizens of India, the

brochure is also printed in Hindi when we flip the advertisement to other side, in order to makebrochure is also printed in Hindi when we flip the advertisement to other side, in order to make

it convenient for the customers to understand the advertisement.it convenient for the customers to understand the advertisement.

12.4.1 Findings:12.4.1 Findings:

The PNB advertising just touches upon the ‘Safe Net Banking’ positioning. In other parts of the The PNB advertising just touches upon the ‘Safe Net Banking’ positioning. In other parts of the

advertisement we nowhere see how PNB projects itself as safe and secured. We see that most advertisement we nowhere see how PNB projects itself as safe and secured. We see that most

of the advertisement is revolving around the 24x7x365 online access and the variety of facilitiesof the advertisement is revolving around the 24x7x365 online access and the variety of facilities

that it provides. We can say that advertisement is directed towards providing information to that it provides. We can say that advertisement is directed towards providing information to

the customers rather than persuading them to use internet banking services of PNB.the customers rather than persuading them to use internet banking services of PNB.

12.4.2 Suggested perception towards Internet Banking 12.4.2 Suggested perception towards Internet Banking

Advertisements:Advertisements:

Internet banking is very much new to India when we compare it with other countries. Indian Internet banking is very much new to India when we compare it with other countries. Indian

culture will still need time to adjust to the changing technology. Though internet banking in culture will still need time to adjust to the changing technology. Though internet banking in

India is picking up fast pace and the day is not far when almost all banking transactions will be India is picking up fast pace and the day is not far when almost all banking transactions will be

possible virtually, yet PNB should be very careful to lay down its positioning in a market where possible virtually, yet PNB should be very careful to lay down its positioning in a market where

40

internet banking has already become a part of all the competitors’ banks. The facilities that internet banking has already become a part of all the competitors’ banks. The facilities that

PNB advertises are now-a-days given by almost all the banks. Therefore it is very difficult to PNB advertises are now-a-days given by almost all the banks. Therefore it is very difficult to

differentiate oneself from the competitors when there is less scope for point of differentiation.differentiate oneself from the competitors when there is less scope for point of differentiation.

The advertisements that PNB creates should therefore be able to position it in such a way that The advertisements that PNB creates should therefore be able to position it in such a way that

it makes an impact in the minds of customers and helps in creating brand loyalty. I suggest thatit makes an impact in the minds of customers and helps in creating brand loyalty. I suggest that

PNB should bank upon one or two attributes in order to leave an impact in minds of the PNB should bank upon one or two attributes in order to leave an impact in minds of the

customers. Following are some of the suggested attributes on which further detailed research customers. Following are some of the suggested attributes on which further detailed research

is carried on:is carried on:

Safety and securitySafety and security

User friendlyUser friendly

Quickness of transactionsQuickness of transactions

Improved technologyImproved technology

Better servicesBetter services

All solutions in oneAll solutions in one

12.4.3 Developing Research Plan:12.4.3 Developing Research Plan:

The data for this research project has been collected through self administration. Due to time The data for this research project has been collected through self administration. Due to time

limitation and other constraints direct personal interview method is used. A structured limitation and other constraints direct personal interview method is used. A structured

questionnaire was framed as it is less time consuming, generates specific and to the point questionnaire was framed as it is less time consuming, generates specific and to the point

information, easier to tabulate and interpret. Moreover respondents prefer to give direct information, easier to tabulate and interpret. Moreover respondents prefer to give direct

answers. The questionnaire has been close ended but suggestions from the customers have answers. The questionnaire has been close ended but suggestions from the customers have

been framed as the solo open ended questions. Any special remarks which customers gave been framed as the solo open ended questions. Any special remarks which customers gave

regarding any of the aspects of the close ended questions has been noted and presented in regarding any of the aspects of the close ended questions has been noted and presented in

recommendations or reflected in company’s strengths (if the comment is positive).recommendations or reflected in company’s strengths (if the comment is positive).

41

12.4.4 Collection of data:12.4.4 Collection of data:

Secondary data:Secondary data:

It was collected from internal sources. The secondary data was collected on the basis of It was collected from internal sources. The secondary data was collected on the basis of

organizational profile, official records, news papers, magazines, management books, preserved organizational profile, official records, news papers, magazines, management books, preserved

information in company database and website of the company.information in company database and website of the company.

Primary data:Primary data:

The customers who visited the bank were interviewed (those already having an account with The customers who visited the bank were interviewed (those already having an account with

PNB). They were the main source of primary data. The method of collection of primary data PNB). They were the main source of primary data. The method of collection of primary data

was direct personal interview through a structured questionnaire.was direct personal interview through a structured questionnaire.

12.4.5Sampling plan:12.4.5Sampling plan:

Since it is not possible to study whole universe, it becomes necessary to take sample from the Since it is not possible to study whole universe, it becomes necessary to take sample from the

universe to know about its characteristics.universe to know about its characteristics.

Sampling Units:Sampling Units: Customers of Punjab National Bank visiting the branches Customers of Punjab National Bank visiting the branches

Sample Technique:Sample Technique: Random Sampling. Random Sampling.

Research Instrument:Research Instrument: Structured Questionnaire. Structured Questionnaire.

Contact Method:Contact Method: Personal Interview. Personal Interview.

Sampling size: Sampling size: My sample size for this project was 30 respondents. Since it was not possible to My sample size for this project was 30 respondents. Since it was not possible to

cover the whole universe in the available time period, it was necessary for me to take a sample cover the whole universe in the available time period, it was necessary for me to take a sample

size of 30 respondents.size of 30 respondents.

42

12.4.6 Data collection instrument developed:12.4.6 Data collection instrument developed:

The mode of collection of data will be based on survey method. Primary data collection will be The mode of collection of data will be based on survey method. Primary data collection will be

based on personal interview. The questionnaire has been prepared accordingly to generate thebased on personal interview. The questionnaire has been prepared accordingly to generate the

amount of information which account to customer satisfaction in internet banking.amount of information which account to customer satisfaction in internet banking.

12.4.7 Research limitations:12.4.7 Research limitations:

The research is confined to a sample of population only and does not necessarily shows The research is confined to a sample of population only and does not necessarily shows

a pattern applicable to the entire population. The time period being about 56 days it a pattern applicable to the entire population. The time period being about 56 days it

becomes impossible to cover a large number of population.becomes impossible to cover a large number of population.

In a rapidly changing industry, analysis on one day or in one segment can change very In a rapidly changing industry, analysis on one day or in one segment can change very

quickly. The environmental changes are vital to be considered in order to assimilate the quickly. The environmental changes are vital to be considered in order to assimilate the

findings and in such a short duration an accurate analysis was not possible.findings and in such a short duration an accurate analysis was not possible.

Some respondents were reluctant to even respond. Many respondents were very casualSome respondents were reluctant to even respond. Many respondents were very casual

in their answering of the questionnaire and did not give due attention while answering.in their answering of the questionnaire and did not give due attention while answering.

Many data, which would have refined the project, were unavailable.Many data, which would have refined the project, were unavailable.

43

12.4.8 12.4.8 QuestionnaireQuestionnaire

1.1. Do you use internet banking services of PNB?Do you use internet banking services of PNB?

YesYes NoNo

2.2. If not, what is/are the reasons for not availing this facility?If not, what is/are the reasons for not availing this facility?

Not aware that such a service existsNot aware that such a service exists Complex procedures for startingComplex procedures for starting

Difficulty in operationsDifficulty in operations Internet Banking of PNB is not user friendlyInternet Banking of PNB is not user friendly

Transactions are not speedyTransactions are not speedy Information is not available easily Information is not available easily

Security Issues are a concernSecurity Issues are a concern

OtherOther

3.3. Would you use these facilities if you are given assistance that you require to use it? Would you use these facilities if you are given assistance that you require to use it?

DefinitelyDefinitely ProbablyProbably UncertainUncertain

Probably notProbably not Definitely notDefinitely not

4.4. If you require assistance we would appreciate if you provide us with your contact details. If you require assistance we would appreciate if you provide us with your contact details.

(Optional)(Optional)

44

Questionnaire for people using PNB internet bankingQuestionnaire for people using PNB internet banking

1.1. Please Mark √ Please Mark √ for your choices.for your choices.

I am aware.I am aware. I have used at least once.I have used at least once. I use frequently.I use frequently.

Account ViewingAccount Viewing

e-Pay for Billse-Pay for Bills

e-Remit/Fund Transfere-Remit/Fund Transfer

e-Tradinge-Trading

e-Payment of Direct Taxese-Payment of Direct Taxes

e-Payment of Central Excise e-Payment of Central Excise

and Service Taxesand Service Taxes

e-Ticket for Air or Rail Travele-Ticket for Air or Rail Travel

2.2. How much are you satisfied with Internet Banking of PNB?How much are you satisfied with Internet Banking of PNB?

Very Much SatisfiedVery Much Satisfied SatisfiedSatisfied neither Satisfied nor Dissatisfiedneither Satisfied nor Dissatisfied

DissatisfiedDissatisfied Very Much DissatisfiedVery Much Dissatisfied

3.3. How frequently do you encounter problem in PNB-Internet Banking?How frequently do you encounter problem in PNB-Internet Banking?

Very frequentlyVery frequently FrequentlyFrequently Not oftenNot often

RarelyRarely Very rarelyVery rarely

4.4. What problems do you generally encounter while using the Internet Banking of PNB?What problems do you generally encounter while using the Internet Banking of PNB?

5.5. Please Mark √ Please Mark √ for your choices.for your choices.

45

Strongly Strongly

AgreeAgree

AgreeAgree NeutralNeutral DisagreeDisagree Strongly Strongly

DisagreeDisagree

Internet Banking section of PNB Internet Banking section of PNB

website is informative.website is informative.

Internet Banking section of PNB Internet Banking section of PNB

website is cluttered with contentwebsite is cluttered with content

Requests and complaints are timelyRequests and complaints are timely

addressed.addressed.

PNB Staff associated with Internet PNB Staff associated with Internet

Banking is helpful.Banking is helpful.

Internet Banking of PNB is secured.Internet Banking of PNB is secured.

Internet Banking of PNB caters to Internet Banking of PNB caters to

all my banking needs.all my banking needs.

6.6. What changes do you suggest for website of PNB internet banking in terms of its appearance?What changes do you suggest for website of PNB internet banking in terms of its appearance?

7.7. Helpline Assistance provided with Internet Banking:Helpline Assistance provided with Internet Banking:

Very Very

SatisfiedSatisfied

SatisfiedSatisfied NeutralNeutral DissatisfiedDissatisfied Very Very

DissatisfiedDissatisfied

Call handled properly and not Call handled properly and not

kept on holdkept on hold

Courteous and Professional Courteous and Professional

manners shown on call.manners shown on call.

Quickly AnsweredQuickly Answered

8.8. Kindly put the tick on the word which you feel appropriate for Internet Banking Service of PNB:Kindly put the tick on the word which you feel appropriate for Internet Banking Service of PNB:

46

Easy Easy ComplicatedComplicated

SafeSafe RiskyRisky

Quick/ PromptQuick/ Prompt Slow/ DelayedSlow/ Delayed

ExcellentExcellent PoorPoor

9.9. Have you used Internet Banking of any other bank?Have you used Internet Banking of any other bank?

YesYes NoNo

10.10. How do you describe PNB internet Banking compared to the other banks?How do you describe PNB internet Banking compared to the other banks?

Very GoodVery Good GoodGood At ParAt Par PoorPoor Very PoorVery Poor

11.11. Do you have any suggestions for PNB which can help PNB improve the service level? Please do Do you have any suggestions for PNB which can help PNB improve the service level? Please do

mention your suggestions regarding the Internet Banking Products you would expect from Bankmention your suggestions regarding the Internet Banking Products you would expect from Bank

which are not currently Provided.which are not currently Provided.

12.12. Would you recommend Internet Banking of PNB to your friend, relative or an associate?Would you recommend Internet Banking of PNB to your friend, relative or an associate?

DefinitelyDefinitely ProbablyProbably UncertainUncertain

Probably notProbably not definitely notdefinitely not

47

12.4.9 Analysis and interpretation through EXCEL:12.4.9 Analysis and interpretation through EXCEL:

1)1)

12

18

PNB customers using internet banking services

YESNO

Interpretation: Interpretation: Only 40% of the PNB customers actually use PNB internet banking Only 40% of the PNB customers actually use PNB internet banking

facilities. This shows us that PNB has not been able to attract its existing customers to facilities. This shows us that PNB has not been able to attract its existing customers to

internet banking, let alone be new customers. This data was taken from an urban area, internet banking, let alone be new customers. This data was taken from an urban area,

in which PNB customers are more techsavy as compared to the rural areas where PNB in which PNB customers are more techsavy as compared to the rural areas where PNB

has maximum no. of customers but these are not that techsavy as yet.has maximum no. of customers but these are not that techsavy as yet.

48

2)2)

12

2

4

8

1

Reason for not using PNB internet banking facilities

Complex procedures for starting

Difficulty in operations

Internet banking of PNB not user friendly

Transactions not speedy

Security issues are a concern

Do not need

Interpretation: Interpretation: From the above chart it can be clearly understood that security issues is From the above chart it can be clearly understood that security issues is

an area of concern for PNB internet banking. Other area of concern is slowness of an area of concern for PNB internet banking. Other area of concern is slowness of

transactions. Personal interaction with customers and the Customer Care Officers gave transactions. Personal interaction with customers and the Customer Care Officers gave

us the actual problem area and the suggested solution to this issue.us the actual problem area and the suggested solution to this issue.

Phishing scams in Internet Banking:Phishing scams in Internet Banking:

Fraudsters can get personal information from bank’s customers through emails and Fraudsters can get personal information from bank’s customers through emails and

phones. These are very cleverly camouflaged and appear to be originating from the phones. These are very cleverly camouflaged and appear to be originating from the

bank itself.bank itself.

Information could also get siphoned off while the customer is logged on to the bank’s Information could also get siphoned off while the customer is logged on to the bank’s

website. This happens through pop-ups, which appear alongside bank’s webpage askingwebsite. This happens through pop-ups, which appear alongside bank’s webpage asking

unsuspecting users to disclose confidential information.unsuspecting users to disclose confidential information.

Other requests might draw the customers to be a part of the survey.Other requests might draw the customers to be a part of the survey.

The convenience of internet banking can be compared to electricity. It has to be used The convenience of internet banking can be compared to electricity. It has to be used

with care to prevent rude shocks. with care to prevent rude shocks.

Problems regarding speed of the transactions:Problems regarding speed of the transactions:

49

The customers are of the opinion that PNB internet banking is not the speedy. There The customers are of the opinion that PNB internet banking is not the speedy. There

are server problems where internet banking facility doesn’t work effectively. This are server problems where internet banking facility doesn’t work effectively. This

problem occurs especially on Sundays. When the banks are also closed, so it becomes problem occurs especially on Sundays. When the banks are also closed, so it becomes

very difficult for the customers to fulfill their needs as they had trusted on the PNB Net very difficult for the customers to fulfill their needs as they had trusted on the PNB Net

Banking 24x7x365 days service and they get disappointed.Banking 24x7x365 days service and they get disappointed.

3)3)

I am aware I ave used atleast once

I use frequently0

2

4

6

8

10

1212

2

10

12

2

10

8

55

4 4

10

8

Account viewingE-pay for billsE-remit/funds transferE-tradingE-payment of direct taxesE-payment of central excise & service taxE-ticket for air & rail travel

Interpretation: Interpretation: the above chart shows that almost all the PNB Net Banking users are the above chart shows that almost all the PNB Net Banking users are

aware of the various facilities the PNB offers. E-trading and E-payment of taxes are the aware of the various facilities the PNB offers. E-trading and E-payment of taxes are the

ones that none of the PNB customers have tried. ones that none of the PNB customers have tried.

50

4)4)

3

22

4

1

Satisfaction level of PNB Internet Banking users

Very much satisfiedSatisfiedNeither satisfied nor dissatisfiedDissatisfiedVery much dissatisfied

Interpretation: Interpretation: We have got mixed views regarding PNB internet banking satisfaction ofWe have got mixed views regarding PNB internet banking satisfaction of

the customers. Nothing can be interpreted out of this chart. The only conclusion we canthe customers. Nothing can be interpreted out of this chart. The only conclusion we can

draw is that PNB has failed to satisfy maximum no. of its customers for internet draw is that PNB has failed to satisfy maximum no. of its customers for internet

banking.banking.

5)5)

Strongly agreeStrongly agree AgreeAgree NeutralNeutral DisagreeDisagree Strongly disagreeStrongly disagree

Website is Website is

informativeinformative

1212

Website is clutteredWebsite is cluttered

with contentwith content

88 11 33

Complaints are Complaints are

timely addressedtimely addressed

66 44 22

Staff is helpfulStaff is helpful 99 33

Net Banking is Net Banking is

securedsecured

88 22 22

Caters to all the Caters to all the 44 66 22

51

banking needsbanking needs

6) Words appropriate for PNB Net Banking:6) Words appropriate for PNB Net Banking:

8

4

EasyCom-pli-cated

5

7

SafeRisky

66

Quick/Prompt

10

2

ExcellentPoor

Interpretation: Interpretation: In the minds of the customers, internet banking of PNB is In the minds of the customers, internet banking of PNB is easy and excellent, easy and excellent,

but at the same time it is a bit but at the same time it is a bit risky.risky.

52

7)7)

2

3

5

11

Description of PNB Net Banking Services

Very goodGoodAt parPoorVery poor

Interpretation: Interpretation: PNB Net Banking has created an average image in the minds of the customers. PNB Net Banking has created an average image in the minds of the customers.

Customers do not see anything extra given to them by PNB Net Banking. The facilities given by Customers do not see anything extra given to them by PNB Net Banking. The facilities given by

PNB are given by other banks also. In order to distinguish itself from the competitors PNB PNB are given by other banks also. In order to distinguish itself from the competitors PNB

should come up with strategies that will ensure a better and a distinctive brand image in the should come up with strategies that will ensure a better and a distinctive brand image in the

minds of the customers.minds of the customers.

53

12.4.10 Other Analytical Tools: 12.4.10 Other Analytical Tools:

12.4.10.1 SWOT Analysis:12.4.10.1 SWOT Analysis:

54

Strengths

Easy to transactStrong brand imageLess complicated24x7x365 days availabilityTech savyHighly volatile CBS system

Weakness

Poor infrastructure which cause server problemsLess no. of tech savy customersPoorly defined target groupIneffective marketing of internet bankingFrequent link failures bringing activities to halt

Opportunities

Further development in internet bankingTraining staff using computer aided softwaresHuge netowrk of traditional banking customersMore and more Indians becoming tech savyIncreasing youth poulation which prefer e-banking over traditional banking solutions

Threats

Private sector banks more consumer friendlyInternet banking of SBI more popular over PNBYoung generation does not have a very positive image about the bank (obsolete and not eye catching) so they are reluctant to use PNB internet bankingPNB not very as popular in urban areas as in rural areas

12.4.10.2 Porter’s 5 forces model:12.4.10.2 Porter’s 5 forces model:

Intensity of rivalry among the industry is Intensity of rivalry among the industry is

high high as State Bank of India and ICICI Bank as State Bank of India and ICICI Bank

are its main competitors. The services are its main competitors. The services

offered are undifferentiated. There are too offered are undifferentiated. There are too

many players in the market and the many players in the market and the

customer prefers internet banking wherevercustomer prefers internet banking wherever

he gets better facilities and improved he gets better facilities and improved

services.services.

Bargaining power of buyers is highBargaining power of buyers is high because switching costs are low for the net users. People because switching costs are low for the net users. People

use more than one internet bank account and thus avail the facilities of more than one bank. use more than one internet bank account and thus avail the facilities of more than one bank.

Bargaining power of suppliers is moderateBargaining power of suppliers is moderate as the switching cost is not very high. Also there as the switching cost is not very high. Also there

are many players offering similar services, thus the services are generally undifferentiated. But are many players offering similar services, thus the services are generally undifferentiated. But

long associations with a particular bank generate customer loyalty and unwillingness to switch. long associations with a particular bank generate customer loyalty and unwillingness to switch.

This aspect is more to do with the behavioral aspect of customer.This aspect is more to do with the behavioral aspect of customer.

Threat of substitutes is moderateThreat of substitutes is moderate because we see more and more foreign banks having tie ups because we see more and more foreign banks having tie ups

with Indian companies and coming up with more and more techsavy solutions to traditional with Indian companies and coming up with more and more techsavy solutions to traditional

banking. However the legal framework of India has prevented this threat to a large extent.banking. However the legal framework of India has prevented this threat to a large extent.

Risk of entry by potential competitors is lowRisk of entry by potential competitors is low because the cost of entry is very high, experience because the cost of entry is very high, experience

curve, there are too much legal compliances to be met, government legislations are high, brandcurve, there are too much legal compliances to be met, government legislations are high, brand

identity is strong and distribution channels (number of branches) require time and capital to beidentity is strong and distribution channels (number of branches) require time and capital to be

developed.developed.

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12.4.10.3 Ansoff’s Product- Market Mix:12.4.10.3 Ansoff’s Product- Market Mix:

Existing ProductsExisting Products New ProductsNew Products

ExistingExisting

MarketsMarkets

Market PenetrationMarket Penetration Product DevelopmentProduct Development

NewNew

MarketsMarkets

Market DevelopmentMarket Development DiversificationDiversification

The proposed strategy is The proposed strategy is market penetrationmarket penetration because: because:

Products offered cannot be differentiated too much, so there is less scope for product Products offered cannot be differentiated too much, so there is less scope for product

development.development.

Highly competitive industry as the number of rivals is very high trying to snatch over theHighly competitive industry as the number of rivals is very high trying to snatch over the

competitor’s customers.competitor’s customers.

The industry demands a long term relationship based on customer trust and The industry demands a long term relationship based on customer trust and

convenience so if the bank goes on increasing its customer base without serving to the convenience so if the bank goes on increasing its customer base without serving to the

needs of existing customers adequately they might shift to competitors. It is important needs of existing customers adequately they might shift to competitors. It is important

to practice retention marketing here.to practice retention marketing here.

Market developmentMarket development is also a strategy that should be adopted but not at the cost of the is also a strategy that should be adopted but not at the cost of the

existing customers because new market segments emerge due to changes in consumer existing customers because new market segments emerge due to changes in consumer

lifestyles or demographics. It should try and appeal to market segments it is not yet satisfying- lifestyles or demographics. It should try and appeal to market segments it is not yet satisfying-

young professionals.young professionals.

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12.4.1112.4.11 Strategies for rebranding of PNB Net Banking: Strategies for rebranding of PNB Net Banking:

If PNB wants to increase its reach in India, it has to target the untapped market. PNB If PNB wants to increase its reach in India, it has to target the untapped market. PNB

should reach the Indian youth so as to increase its customer base. Today’s youth is should reach the Indian youth so as to increase its customer base. Today’s youth is

techsavy and can understand the PNB internet banking better. The youth today is very techsavy and can understand the PNB internet banking better. The youth today is very

skeptical about PSUs. They are of the opinion that private banks are more convenient skeptical about PSUs. They are of the opinion that private banks are more convenient

and more consumer friendly. In order to change this attitude of the youth and make and more consumer friendly. In order to change this attitude of the youth and make

them adaptable to PSUs, PNB should initiate huge advertising campaigns which will be them adaptable to PSUs, PNB should initiate huge advertising campaigns which will be

targeted to the youth and which will spread the message of convenience. targeted to the youth and which will spread the message of convenience.

Suggested tag lines for PNB Net Banking:Suggested tag lines for PNB Net Banking:

Your money…just a click away!!!Your money…just a click away!!!

Banking now just a click away!!!Banking now just a click away!!!

Security is our priority…convenience is your right,Security is our priority…convenience is your right,

Together we make your banking experience bright!!!Together we make your banking experience bright!!!

In order to reach out to the youth social networking sites like Face book, Twitter, Orkut, In order to reach out to the youth social networking sites like Face book, Twitter, Orkut,

LinkedIn can be of great use. LinkedIn can be of great use.

The best way to reach out to the target customers is to make PNB more user- friendly. The best way to reach out to the target customers is to make PNB more user- friendly.

In order to do this the employees will have to be trained about the working of the In order to do this the employees will have to be trained about the working of the

internet banking website so that they can help solve the customer queries better. internet banking website so that they can help solve the customer queries better.

One more strategy could be to go for retention marketing, especially for diamond One more strategy could be to go for retention marketing, especially for diamond

customers, rather than targeting customers low on net worth. customers, rather than targeting customers low on net worth.

The trend suggests that PNB has always been low on advertising. It hasn’t advertised The trend suggests that PNB has always been low on advertising. It hasn’t advertised

much for its traditional banking facilities as well. Let alone be the newly initiated much for its traditional banking facilities as well. Let alone be the newly initiated

services like e-banking. A rebranding exercise will be successful only when PNB invests services like e-banking. A rebranding exercise will be successful only when PNB invests

in heavy advertisement campaigns for its e-banking facilities. This facilities are at a very in heavy advertisement campaigns for its e-banking facilities. This facilities are at a very

nascent stage and in order to survive in the race of being the most techsavy bank, PNB nascent stage and in order to survive in the race of being the most techsavy bank, PNB

will have to take help of huge advertising in:will have to take help of huge advertising in:

Print media and televisionPrint media and television

InternetInternet

Hoarding and bannersHoarding and banners

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Stalls in trade fairsStalls in trade fairs

Distribution of leaflets containing detailed informationDistribution of leaflets containing detailed information

Employees in PSUs are always considered to be a little calm in their working as Employees in PSUs are always considered to be a little calm in their working as

compared to private banks. A good way to motivate them would be to give them compared to private banks. A good way to motivate them would be to give them

enough incentives so as to increase sales and give them recognition for the same.enough incentives so as to increase sales and give them recognition for the same.

Security of net banking is one of the greatest concerns why PNB Net Banking is not very Security of net banking is one of the greatest concerns why PNB Net Banking is not very

popular. In order to build more trust in the minds of the customers, I would suggest popular. In order to build more trust in the minds of the customers, I would suggest

PNB Net Banking should be more secured and trust worthy. One important strategy PNB Net Banking should be more secured and trust worthy. One important strategy

would be to leverage the privacy of mobile phones and associated it with internet would be to leverage the privacy of mobile phones and associated it with internet

banking. banking.

Customers who transact via PNB Net Banking will receive a password on their mobile Customers who transact via PNB Net Banking will receive a password on their mobile

phone through SMS facility. This password will have to be entered in the Net Banking phone through SMS facility. This password will have to be entered in the Net Banking

system within 2 minutes of receiving. If a customer fails to enter the password within system within 2 minutes of receiving. If a customer fails to enter the password within

the time limit, the transaction will fail to be successful and the customer would be out the time limit, the transaction will fail to be successful and the customer would be out

of the system because the fail of transaction would indicate that the customer is not of the system because the fail of transaction would indicate that the customer is not

authentic. authentic.

Thus, in order to transact via PNB Net Banking customer will have to go through a highlyThus, in order to transact via PNB Net Banking customer will have to go through a highly

sophisticated techsavy secured procedure of two-password system. One password will sophisticated techsavy secured procedure of two-password system. One password will

be a permanent one which will serve as the customer identity and the other password be a permanent one which will serve as the customer identity and the other password

will change for every transaction which will ensure that PNB Net Banking is secured will change for every transaction which will ensure that PNB Net Banking is secured

from scams like phishing.from scams like phishing.

This type of high tech security would make PNB Net Banking free from phishing which isThis type of high tech security would make PNB Net Banking free from phishing which is

now a days the most concerned area in internet banking.now a days the most concerned area in internet banking.

The servers linked to internet banking should be maintained properly and should be The servers linked to internet banking should be maintained properly and should be

checked from time to time. Convenience of the customers should always be the checked from time to time. Convenience of the customers should always be the

priority.priority.

PNB will have to develop a strong brand image especially in the minds of young PNB will have to develop a strong brand image especially in the minds of young

professionals who prefer private banks by stressing on the key features like professionals who prefer private banks by stressing on the key features like

transparency and reliability.transparency and reliability.

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12.5 12.5 Analysis and Rebranding of PNB Mobile Banking:Analysis and Rebranding of PNB Mobile Banking:

Mobile banking in PNB is a product which was recently introduced on 12Mobile banking in PNB is a product which was recently introduced on 12 thth Feb, 2010. Being a Feb, 2010. Being a

newly launched product it has covered a lot of points which are very beneficial to thenewly launched product it has covered a lot of points which are very beneficial to the

corporates or individuals of service class.corporates or individuals of service class.

PNB Mobile Banking would enable PNB customers in accessing banking servicesPNB Mobile Banking would enable PNB customers in accessing banking services

anytime/anywhere on-the-move through mobile phones. It is compatible with popular mobileanytime/anywhere on-the-move through mobile phones. It is compatible with popular mobile

devices across most GSM & CDMA operators with easy to operate features. devices across most GSM & CDMA operators with easy to operate features.

The Mobile Banking Services are being offered in line with the guidelines of the Reserve BankThe Mobile Banking Services are being offered in line with the guidelines of the Reserve Bank

of India. PNB Mobile Banking offers services like checking account balances, transfer of funds,of India. PNB Mobile Banking offers services like checking account balances, transfer of funds,

stop-payment of cheques, request for a cheque book and many more add-ons features. stop-payment of cheques, request for a cheque book and many more add-ons features.

Comparing the mobile banking services of PNB with other banks. It has all the basic amenitiesComparing the mobile banking services of PNB with other banks. It has all the basic amenities

of mobile banking but since it is at its infant stage, it requires a lot of improvements. of mobile banking but since it is at its infant stage, it requires a lot of improvements.

When the services are being compared to the banks, we have compared it on the basis of threeWhen the services are being compared to the banks, we have compared it on the basis of three

parametersparameters

1.1. Services provided for bank accountsServices provided for bank accounts

2.2. Services provided for credit cardsServices provided for credit cards

3.3. Other servicesOther services

On comparing the banks we get to know that PNB has all sorts of individual/ corporateOn comparing the banks we get to know that PNB has all sorts of individual/ corporate

facility of keeping a track of the account, balance enquiry, checque book etc. Some offacility of keeping a track of the account, balance enquiry, checque book etc. Some of

the banks do not have these services, which is giving an edge to the bank. It shows thatthe banks do not have these services, which is giving an edge to the bank. It shows that

the bank is very particular about its conusmers getting the major accounting facilities. Itthe bank is very particular about its conusmers getting the major accounting facilities. It

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also shows the professional attitude of the bank which is very particular about itsalso shows the professional attitude of the bank which is very particular about its

consumers which majorly belong to the middle income group section.consumers which majorly belong to the middle income group section.

The major features that a conusmer would like to knvow when he swaps his credit cardThe major features that a conusmer would like to knvow when he swaps his credit card

is how much he has used and what he has paid to cover his dues and when he has paidis how much he has used and what he has paid to cover his dues and when he has paid

the dues. Here PNB lacks in this segment, being an infant it has not yet covered thethe dues. Here PNB lacks in this segment, being an infant it has not yet covered the

credit card and other sections. Whereas the other banks like the private sector bankscredit card and other sections. Whereas the other banks like the private sector banks

HDFC, ICICI and the foreign banks like Standard chartered bank and Citibank have allHDFC, ICICI and the foreign banks like Standard chartered bank and Citibank have all

these facilities to cater its target audience.these facilities to cater its target audience.

Coming on to the other services, PNB lacks in this section completely. The reason beingComing on to the other services, PNB lacks in this section completely. The reason being

the same, since it is newly launched, it would take some time to come at par with thethe same, since it is newly launched, it would take some time to come at par with the

other banks. All these facilities are more for youngsters or the new employees who likeother banks. All these facilities are more for youngsters or the new employees who like

to do things faster which helps them to save both time and energy and also it givesto do things faster which helps them to save both time and energy and also it gives

them a lot of facilities. This section too is being well established by other banks makingthem a lot of facilities. This section too is being well established by other banks making

more space in their pockets for the new consumers.more space in their pockets for the new consumers.

12.5.112.5.1 Strategies for Rebranding of PNB Mobile Banking:Strategies for Rebranding of PNB Mobile Banking:

PNB mobile banking being at its initial stages of development has to be backed up with PNB mobile banking being at its initial stages of development has to be backed up with

good advertising strategy in order to attract more and more customers. good advertising strategy in order to attract more and more customers.

Techsavy, convenient and secured should be the attributes PNB should bank upon so as Techsavy, convenient and secured should be the attributes PNB should bank upon so as

to increase its reach. to increase its reach.

Rural marketing can be a good strategy as mobile banking can be quite popular in rural Rural marketing can be a good strategy as mobile banking can be quite popular in rural

markets with the rare availability of internet facilities and less no. of bank branches in markets with the rare availability of internet facilities and less no. of bank branches in

the most remote areas.the most remote areas.

Suggested taglines for PNB Mobile Banking:Suggested taglines for PNB Mobile Banking:

For urban areas: “a very ‘mobile’ future of banking”For urban areas: “a very ‘mobile’ future of banking”

For rural areas: “aapki suvidha humari zimmedari”For rural areas: “aapki suvidha humari zimmedari”

For rural areas: “aapka bank…ab aapke paas…kabhi bhi, kahi bhi”For rural areas: “aapka bank…ab aapke paas…kabhi bhi, kahi bhi”

The T.V. advertisements should be aired on national channels, especially doordarshan.The T.V. advertisements should be aired on national channels, especially doordarshan.

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As PNB already has a strong hold in north India, it should leverage this opportunity to As PNB already has a strong hold in north India, it should leverage this opportunity to

do test marketing of its mobile banking with a strong brand identity. This will do test marketing of its mobile banking with a strong brand identity. This will

strengthen its hold in mobile banking era.strengthen its hold in mobile banking era.

12.6 12.6 Analysis and Rebranding of PNB ATMs:Analysis and Rebranding of PNB ATMs:

Punjab National Bank ATMs are one of the ATMs which are used by a large number of peoplePunjab National Bank ATMs are one of the ATMs which are used by a large number of people

because the ATMs are located in all the major cities of India. The Punjab National Bank ATMsbecause the ATMs are located in all the major cities of India. The Punjab National Bank ATMs

are located in Delhi, Kolkata, Chennai, Mumbai, Bangalore, Hyderabad, Pune, Gurgaon, Uttarare located in Delhi, Kolkata, Chennai, Mumbai, Bangalore, Hyderabad, Pune, Gurgaon, Uttar

Pradesh as well as Ghaziabad. The Punjab National Bank ATMs are one of the well equippedPradesh as well as Ghaziabad. The Punjab National Bank ATMs are one of the well equipped

ATMs thereby it has become extremely easier for the people to withdraw cash. It is also easierATMs thereby it has become extremely easier for the people to withdraw cash. It is also easier

to operate the Punjab National Bank ATMs as well.to operate the Punjab National Bank ATMs as well.

The Punjab National Bank ATMs are known for the large number of facilities that it offers to itsThe Punjab National Bank ATMs are known for the large number of facilities that it offers to its

customers. The Punjab National Bank ATMs are opened all the year round on a 24X7 basis. Thecustomers. The Punjab National Bank ATMs are opened all the year round on a 24X7 basis. The

ATMs are not closed even on the holidays. Thus you can access your account as and when youATMs are not closed even on the holidays. Thus you can access your account as and when you

require it. Cash withdrawals have been thus made extremely easier because of this. The Punjabrequire it. Cash withdrawals have been thus made extremely easier because of this. The Punjab

National Bank ATMs are located at all the important parts of the cities such as near theNational Bank ATMs are located at all the important parts of the cities such as near the

hospital, market places, major offices and others. Thus, you will not have to carry hard cashhospital, market places, major offices and others. Thus, you will not have to carry hard cash

with you whenever you go out. Thus it has extremely safe as well. Both the credit cards as wellwith you whenever you go out. Thus it has extremely safe as well. Both the credit cards as well

as the debit cards offered by the Punjab national bank can be used in any of the Punjabas the debit cards offered by the Punjab national bank can be used in any of the Punjab

National Bank ATMs. They can be used in other ATMs as well. The banks have made up such tieNational Bank ATMs. They can be used in other ATMs as well. The banks have made up such tie

ups with other banks in order to provide the best facilities to the customers.ups with other banks in order to provide the best facilities to the customers.

The Punjab National Bank ATMs you can also deposit the cheques. The Punjab National BankThe Punjab National Bank ATMs you can also deposit the cheques. The Punjab National Bank

ATMs are one of the best in terms of security. So your cheques will be properly deposited.ATMs are one of the best in terms of security. So your cheques will be properly deposited.

When you withdraw cash from the Punjab National Bank ATMs, do not forget to collect theWhen you withdraw cash from the Punjab National Bank ATMs, do not forget to collect the

card, money as well as the mini statement they offer. This will help you keep a track of yourcard, money as well as the mini statement they offer. This will help you keep a track of your

transactions. Once you visit the Punjab National Bank ATMs, you will be able to know moretransactions. Once you visit the Punjab National Bank ATMs, you will be able to know more

about the limits of cash that you can withdraw from the ATM at one go. Thus withdrawing cashabout the limits of cash that you can withdraw from the ATM at one go. Thus withdrawing cash

has become extremely easier with the Punjab National Bank ATMs.has become extremely easier with the Punjab National Bank ATMs.

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When we compare PNB ATMs with the others, we can see that PNB like many other banks, When we compare PNB ATMs with the others, we can see that PNB like many other banks,

gives all the facilities be it balance enquiry, cash withdrawals, PIN change, Mini statement, or gives all the facilities be it balance enquiry, cash withdrawals, PIN change, Mini statement, or

payment of utility bills. But it does not provide facilities like cheque deposits and ordering a payment of utility bills. But it does not provide facilities like cheque deposits and ordering a

cheque book. These facilities are provided by Axis Bank, HDFC Bank, ICICI Bank, Standard cheque book. These facilities are provided by Axis Bank, HDFC Bank, ICICI Bank, Standard

Chartered, Citi Bank. It is worth noting that SBI being the largest among all, be it for network Chartered, Citi Bank. It is worth noting that SBI being the largest among all, be it for network

coverage or for worthiness, does not provide these facilities through its mobile banking. coverage or for worthiness, does not provide these facilities through its mobile banking.

We can thus analyze that Public Sector Banks are thus to improve a bit on their mobile banking We can thus analyze that Public Sector Banks are thus to improve a bit on their mobile banking

services if they want to compete at par with the Private Sector Banks.services if they want to compete at par with the Private Sector Banks.

12.6.1 Strategies for Rebranding PNB ATMs:12.6.1 Strategies for Rebranding PNB ATMs:

PNB provides very basic services of ATMs as compared to other banks, especially ICICI PNB provides very basic services of ATMs as compared to other banks, especially ICICI

Bank and Standard Chartered Bank who provide variety of other services through ATMs Bank and Standard Chartered Bank who provide variety of other services through ATMs

like Mutual Fund payment, Insurance Premium payment, donations, internet packs, like Mutual Fund payment, Insurance Premium payment, donations, internet packs,

flexi top-ups, money transfer between linked accounts, mobile phones recharge, etc.flexi top-ups, money transfer between linked accounts, mobile phones recharge, etc.

The Bank of Baroda recent advertisements of ATMs are very eye-catchy and effective. The Bank of Baroda recent advertisements of ATMs are very eye-catchy and effective.

They have used animated characters to show that BOB has ATM services anywhere and They have used animated characters to show that BOB has ATM services anywhere and

everywhere. everywhere.

Axis Bank has also recently advertised a lot for their ATM services. Their advertisementsAxis Bank has also recently advertised a lot for their ATM services. Their advertisements

give major emphasis to the symbol ‘A’ of Axis Bank to create a distinguished brand give major emphasis to the symbol ‘A’ of Axis Bank to create a distinguished brand

identity.identity.

PNB should be very aggressive in its advertising campaigns for the ATM services. The PNB should be very aggressive in its advertising campaigns for the ATM services. The

advertisements should convey the message of PNB tag line: the name you can bank advertisements should convey the message of PNB tag line: the name you can bank

upon. This would ensure better footfall in PNB ATMs as the tag line is already very upon. This would ensure better footfall in PNB ATMs as the tag line is already very

popular all over India. The identity of PNB can be associated with its tag line which will popular all over India. The identity of PNB can be associated with its tag line which will

be a driving factor of PNB’s advertising campaign’s success.be a driving factor of PNB’s advertising campaign’s success.

One more strategy to be suggested is setting up of a computer in each of the ATMs. TheOne more strategy to be suggested is setting up of a computer in each of the ATMs. The

computer should give the customers access to PNB website and PNB internet banking computer should give the customers access to PNB website and PNB internet banking

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facility. This type of strategy is called co-branding where in PNB will be able to facility. This type of strategy is called co-branding where in PNB will be able to

distinguish itself from the competitors by providing internet banking as well as ATM distinguish itself from the competitors by providing internet banking as well as ATM

facility all at one place. The advertisements of PNB should also convey this dual facility facility all at one place. The advertisements of PNB should also convey this dual facility

message. message.

PNB ATMs should have a distinguished tagline which can be used to create a different PNB ATMs should have a distinguished tagline which can be used to create a different

brand identity.brand identity.

Suggested taglines for PNB ATMs:Suggested taglines for PNB ATMs:

‘ab aapke paise aapke haath mein…kabhi bhi, kahi bhi’‘ab aapke paise aapke haath mein…kabhi bhi, kahi bhi’

‘Hum hamesha saath nibhayenge’‘Hum hamesha saath nibhayenge’

‘aapka dost aapke saath…har pal,har jaga’‘aapka dost aapke saath…har pal,har jaga’

Suggested taglines for PNB ATMs and Internet Banking (dual facility):Suggested taglines for PNB ATMs and Internet Banking (dual facility):

‘aapki suvidha ke liye hum hai na’‘aapki suvidha ke liye hum hai na’

‘hamesha aapka saath nibhayenge’‘hamesha aapka saath nibhayenge’

‘sirf ATM hi nahi…pura bank ab aapki muthi mein’‘sirf ATM hi nahi…pura bank ab aapki muthi mein’

12.712.7 Analysis and Rebranding of PNB Credit Cards:Analysis and Rebranding of PNB Credit Cards:

Credit cards have been in India for well over two and half decades. Over the last five yearsCredit cards have been in India for well over two and half decades. Over the last five years

though, they have literally taken over the market and then came down due to increase inthough, they have literally taken over the market and then came down due to increase in

number of debit card usage. The transactions through debit cards jumped by 42 per cent at Rsnumber of debit card usage. The transactions through debit cards jumped by 42 per cent at Rs

26,418 Cr in the last fiscal from Rs 18,547 Cr in 2008-09, it slipped by 4 per cent for credit cards26,418 Cr in the last fiscal from Rs 18,547 Cr in 2008-09, it slipped by 4 per cent for credit cards

to Rs 62,852 Cr from Rs 65,356 Cr. The total number of credit cards went down to 23.4 Cr into Rs 62,852 Cr from Rs 65,356 Cr. The total number of credit cards went down to 23.4 Cr in

2009-10 from 25.9 Cr in 2008-09.2009-10 from 25.9 Cr in 2008-09.

Downturn in the economy was the major reason for negative trend in credit cards. “During theDownturn in the economy was the major reason for negative trend in credit cards. “During the

slowdown, banks became cautious in issuing new credit cards to check defaults. Also, last yearslowdown, banks became cautious in issuing new credit cards to check defaults. Also, last year

many lost their jobs which led to the decline in spending through credit cardsmany lost their jobs which led to the decline in spending through credit cards

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Total credit cards sold in the market:Total credit cards sold in the market:

29%

26%

16%

14%

1% 3%

3% 7%

Credit cards sold

ICICIHDFCSBICitibankPNBAxis bankBOBStandard Chartered

ICICI is the clear market leader in this segment with almost 29% of the credit cards sold.ICICI is the clear market leader in this segment with almost 29% of the credit cards sold.

Whereas PNB is merely 1% of the whole credit card segments which points out towardsWhereas PNB is merely 1% of the whole credit card segments which points out towards

necessities for improvement and coming up with more new cards and types so that it attractsnecessities for improvement and coming up with more new cards and types so that it attracts

more consumers.more consumers.

12.7.112.7.1 Strategies for Rebranding of PNB Credit Cards:Strategies for Rebranding of PNB Credit Cards:

PNB credit Cards should be targetted to the elite group of people who are flamboyant inPNB credit Cards should be targetted to the elite group of people who are flamboyant in

their spendings. their spendings.

In todays times, PNB has a huge customer base of lower middle class and middle classIn todays times, PNB has a huge customer base of lower middle class and middle class

people. This segment may not prefer credit card usage. people. This segment may not prefer credit card usage.

PNB will have to first build a customer base which is strong enough in upper middlePNB will have to first build a customer base which is strong enough in upper middle

class and upper class segment in order to make a mark in the credit cards segments.class and upper class segment in order to make a mark in the credit cards segments.

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The major players in the credit cards segment are foreign banks due to the perceptionThe major players in the credit cards segment are foreign banks due to the perception

that they are more convinient, offer better rates and are acceptable throughout thethat they are more convinient, offer better rates and are acceptable throughout the

globe.globe.

Rebranding PNB Credit Card will be a challenge to this perception. Rebranding PNB Credit Card will be a challenge to this perception.

This will require strong advertising backed up with a strong CRM system. The facilitiesThis will require strong advertising backed up with a strong CRM system. The facilities

and the rates that PNB Credit Cards offer should also be upgraded in order to meet theand the rates that PNB Credit Cards offer should also be upgraded in order to meet the

needs of the time.needs of the time.

Suggested slogans for PNB Credit Cards:Suggested slogans for PNB Credit Cards:

because your shopping experience should be care free…because your shopping experience should be care free…

your convinience is our priority…your convinience is our priority…

12.8 12.8 Analysis and Rebranding of PNB Debit Cards:Analysis and Rebranding of PNB Debit Cards:

Debit cards are the faster growing card-based payment segment in India, given the credit-Debit cards are the faster growing card-based payment segment in India, given the credit-

averse nature of many consumers. Debit cards made their entry in India late 1998. Due to theaverse nature of many consumers. Debit cards made their entry in India late 1998. Due to the

nature of the product (buy now, pay now), it has experienced exponential growth.nature of the product (buy now, pay now), it has experienced exponential growth. Indians areIndians are

using more of debit cards than credit cards for their banking transactions, says the Reserve Bank ofusing more of debit cards than credit cards for their banking transactions, says the Reserve Bank of

India (RBI) data for the year ended 2009-10. While the transactions through debit cards jumped by 42India (RBI) data for the year ended 2009-10. While the transactions through debit cards jumped by 42

per cent at Rs 26,418 Cr in the last fiscal from Rs 18,547 Cr in 2008-09, it slipped by 4 per cent for creditper cent at Rs 26,418 Cr in the last fiscal from Rs 18,547 Cr in 2008-09, it slipped by 4 per cent for credit

cards to Rs 62,852 Cr from Rs 65,356 Cr. cards to Rs 62,852 Cr from Rs 65,356 Cr. In the same period, the number of debit cards inIn the same period, the number of debit cards in

circulation has also increased by 33 per cent as compared to a fall in credit card circulation bycirculation has also increased by 33 per cent as compared to a fall in credit card circulation by

10 per cent over the previous year. 10 per cent over the previous year. The total number of debit cards increased to 17 Cr in 2009-The total number of debit cards increased to 17 Cr in 2009-

10 from 12.8 Cr in 2008-0910 from 12.8 Cr in 2008-09. .

In April this year, debit card payments increased to Rs 2,508 crore from Rs 1,778 crore in theIn April this year, debit card payments increased to Rs 2,508 crore from Rs 1,778 crore in the

corresponding month last year, according to the central bank's monthly bulletin.corresponding month last year, according to the central bank's monthly bulletin. TransactionsTransactions

made through these cards in the country rose to Rs 5,473 crore from Rs 4,932 crore in themade through these cards in the country rose to Rs 5,473 crore from Rs 4,932 crore in the

corresponding month of the previous fiscal.corresponding month of the previous fiscal.

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Total No of Debit Cards sold in the market:Total No of Debit Cards sold in the market:

SBI is the clear market leader in this segment with almost 37% of the debit cards sold. WhereasSBI is the clear market leader in this segment with almost 37% of the debit cards sold. Whereas

PNB is 6% of the whole debit card segments which is better than the credit cards but still has aPNB is 6% of the whole debit card segments which is better than the credit cards but still has a

long way to go inorder to gain some substancial base in the market.long way to go inorder to gain some substancial base in the market.

12.8.1 Strategies for Rebranding PNB Debit Cards:12.8.1 Strategies for Rebranding PNB Debit Cards:

PNB issues three types of debit cards:PNB issues three types of debit cards:

Classic Debit CardClassic Debit Card

Gold Debit CardGold Debit Card

Free issue of PNB Gold debit cards to premium customers who have been associated Free issue of PNB Gold debit cards to premium customers who have been associated

with PNB for more than 6 years can be an honor for the customers. These customers with PNB for more than 6 years can be an honor for the customers. These customers

are any ways very happy of being associated with PNB. If we give them such add-on are any ways very happy of being associated with PNB. If we give them such add-on

privileges, the brand loyalty of the bank will increase. The advertising that PNB will get privileges, the brand loyalty of the bank will increase. The advertising that PNB will get

by way of word-of-mouth publicity will be additional advantage for PNB. by way of word-of-mouth publicity will be additional advantage for PNB.

The website of PNB when advertises about its Debit Cards should have a picture of the The website of PNB when advertises about its Debit Cards should have a picture of the

actual debit cards it issues. This will help them in brand recall.actual debit cards it issues. This will help them in brand recall.

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16%

12%

37%

10%

6%

10%

3% 6%

Debit cards sold

ICICIHDFCSBICitibankPNBAxis bankBOBStandard Chartered

Debit Cards are most often used in shopping malls and movie theatres or online Debit Cards are most often used in shopping malls and movie theatres or online

booking of tickets. In order to increase its presence in the advertisements, the best booking of tickets. In order to increase its presence in the advertisements, the best

places to advertise will be:places to advertise will be:

Shopping malls and hypermarketsShopping malls and hypermarkets

This should be targeted to women. A special type of debit cards should This should be targeted to women. A special type of debit cards should

be issued which can take care of the needs of a typical woman, especiallybe issued which can take care of the needs of a typical woman, especially

a house-wife.a house-wife.

InternetInternet

This should be targeted to young professionals who are so busy in their This should be targeted to young professionals who are so busy in their

routine that they prefer online shopping rather than physically going in routine that they prefer online shopping rather than physically going in

the shops to buy products.the shops to buy products.

Suggested slogans for PNB Debit Cards:Suggested slogans for PNB Debit Cards:

Classic Card. They key to everything!!!Classic Card. They key to everything!!!

Wherever you go…we accompany you!!!Wherever you go…we accompany you!!!

Har kisi ko Gold Card nahi milta…aap khaas haiHar kisi ko Gold Card nahi milta…aap khaas hai

For Debit Cards targeted at womenFor Debit Cards targeted at women

Kuch kharidne ke liye paiso ki kya zarurat…Kuch kharidne ke liye paiso ki kya zarurat…

Naya zamana…nayi soch…Naya zamana…nayi soch…

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13.13. Conclusion and Recommendation:Conclusion and Recommendation:

Even in this techsavy world, a good segment of consumers still prefer to bank withEven in this techsavy world, a good segment of consumers still prefer to bank with

PSUs. This result can be very well explained by the fact that nationalized banks arePSUs. This result can be very well explained by the fact that nationalized banks are

acquainted with the Government and that ups and downs in business will not affect theacquainted with the Government and that ups and downs in business will not affect the

existence of the bank. Also the RBI too has good control over the working of theseexistence of the bank. Also the RBI too has good control over the working of these

banks and there for the customers feel a sense of security in investing in these banks.banks and there for the customers feel a sense of security in investing in these banks.

However it is also seen that a good percentage of people also opt for private banks suchHowever it is also seen that a good percentage of people also opt for private banks such

as ICICI, bearing in mind the amount of experience they posses in the field of banking.as ICICI, bearing in mind the amount of experience they posses in the field of banking.

These private banks, even though living with nationalized banks, which have the lion’sThese private banks, even though living with nationalized banks, which have the lion’s

share, appear to be huge market players and market turners.share, appear to be huge market players and market turners.

On a global scale technological innovations have been the main reasons forOn a global scale technological innovations have been the main reasons for

International banks to become market drivers and leaders, but the same cannot be saidInternational banks to become market drivers and leaders, but the same cannot be said

about India. Here improvement of technology has not yet played over the minds of theabout India. Here improvement of technology has not yet played over the minds of the

people. It can be said that only the higher society of the Indian population wouldpeople. It can be said that only the higher society of the Indian population would

consider technological innovations to be very important in terms of deciding theconsider technological innovations to be very important in terms of deciding the

importance of the bank. The other parts of India would hardly consider it to be reasonimportance of the bank. The other parts of India would hardly consider it to be reason

in selecting the bank.in selecting the bank.

Keeping in mind the analysis in this paper we can note that consumers are hardly awareKeeping in mind the analysis in this paper we can note that consumers are hardly aware

of the PNB Net Banking facilities.of the PNB Net Banking facilities.

Only rebranding a particular product will not help. PNB will have to rebrand itsOnly rebranding a particular product will not help. PNB will have to rebrand its

corporate image in the minds of the customers.corporate image in the minds of the customers.

The picture of PNB as a bank for the poor should no more be the brand identity of theThe picture of PNB as a bank for the poor should no more be the brand identity of the

bank. bank.

PNB should target the young professionals for all its branding requirements. PNB should target the young professionals for all its branding requirements.

At the same time PNB should not forget its original grounds on which it has been ableAt the same time PNB should not forget its original grounds on which it has been able

to become the second largest nationalised bank in the country.to become the second largest nationalised bank in the country.

The poor has always been PNBs strong customer base and it should leverage upon thisThe poor has always been PNBs strong customer base and it should leverage upon this

factor to increase its strength in this sector.factor to increase its strength in this sector.

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Till recent times mobile banking and net banking were Greek and Latin to many Indians.Till recent times mobile banking and net banking were Greek and Latin to many Indians.

Such people would not keep technology in mind to select the bank. But on the otherSuch people would not keep technology in mind to select the bank. But on the other

hand the people who understand the importance of technology recognized the varioushand the people who understand the importance of technology recognized the various

services that are provided and also mentioned that technology today in India has madeservices that are provided and also mentioned that technology today in India has made

banking easier. However a huge section of the people knows the importance of an ATMbanking easier. However a huge section of the people knows the importance of an ATM

or Credit cards, but the service provision for these products was not found to be up toor Credit cards, but the service provision for these products was not found to be up to

the mark.the mark.

PNB should improve its service proposition to the core so that not even a singlePNB should improve its service proposition to the core so that not even a single

customer will have any complaints from the bank.customer will have any complaints from the bank.

To sum up what can be said about PNB is it is still on a growth stage as it is introducingTo sum up what can be said about PNB is it is still on a growth stage as it is introducing

new credit and debit cards (platinum cards) and infant stage for mobile bankingnew credit and debit cards (platinum cards) and infant stage for mobile banking

services. In mobile banking it has a long way to go, whereas for internet banking, it isservices. In mobile banking it has a long way to go, whereas for internet banking, it is

developed but needs modification in its services being offered.developed but needs modification in its services being offered.

Suggested taglines for PNB E-Banking Umbrella:Suggested taglines for PNB E-Banking Umbrella:

Your convenience is our priorityYour convenience is our priority

We all change for the ones we loveWe all change for the ones we love

We are BACK and with a BANG!!!We are BACK and with a BANG!!!

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14. Bibliography:

www.google.co.in

www.rbi.org

www.pnbindia.com

www.theeconomictimes.com

www.banknetindia.com

www.rupeetimes.com

www.crminfoline.com

Other references include:Other references include:

Company pamphletsCompany pamphlets

Interaction with company officialsInteraction with company officials

Branch visit at PNB ThaneBranch visit at PNB Thane

Interactions with customersInteractions with customers

Dummy customer visit at branches of SBI and ICICI BankDummy customer visit at branches of SBI and ICICI Bank

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