CONTENTS

TITLE

PREFACE

ACKNOWLEDGEMENT

Chapter: 1 INTRODUCTION
 Backdrops
 Topic of the study
 Objective of the study
 Methodology
 Plan of the study
 Limitations of the study

Chapter: 2 CONCEPTUAL EXPOSITION OF THE TOPIC: LENDING POLICY

 Different facts of lending policy
 Nationalization

 Objective of the Nationalization

 Modest banking Policy
 Lending Policy- A tool of Banking Policy
 Management of Loans in Commercial Banks
 Characteristics of Bank Loans
 cardinal Principal of sound bank Lending
 Formulating loan policy in a commercial bank
 Factors influencing loan policy
 Contents of loan policy
 Evaluating credit Applicant
 Supervision of loans
 Organization of Bank lending
 Schemes of Bank finance to different sectors
 Maximum permissible bank finance

Chapter: 3 PUNJAB NATIONAL BANK – A BRIEF PROFILE

 Genesis
 Vision
 Mission
 Performance of the bank regarding credit & others
 PNB credit schemes
 Executive position in the PNB
 Organizational structure of the PNB-3939 Bettiah Branch
 Milestones

Chapter: 4 LENDING POLICY OF PNB: A STUDY OF 3939 BRANCH

 Lending Portfolio of PNB: General lending portfolio of PNB Branch
(3939)

Chapter: 5 Findings and Suggestions

Bibliography
PREFACE

Financial institution with their role as a mobilizer of the community’s saving and a
channelizer of these savings into productive outlets play a crucial role in the
economic development of the country.

The important of the financial institutions can hardly be over emphasized in

the growing internationalization on Indian business at very rapid pace in recent few
years following the government policy of economic liberalization and globalization
coupled with depending technology and fierce competition.

In, fact financial institutions are categorized broadly into two groups Money
market and Capital market.

Capital market comprises institutions which grant long-term loans and invest
in securities in different forms for different industrial purposes.

Money market is composed of commercial and other types of banks and

agencies catering to short-term capital requirements in different sectors of the
economy.

After nationalization of commercial banks in 1969 revealed the suitable

definition of commercial banks.

“Acceptance of deposit for the purpose of lending”.

In this way, lending is one of the two principle functions of commercial banks
not only because of their social obligation to cater to the credit needs but also
because lending is the most profitable for the interest rates realized on business
loans.

Loans are provided in a variety of ways to different sections of the economy

according to the form security, maturity, method of repayment origin and purpose.
An understanding of different winds of loans would provide an insight into the
lending activities of banks.
CHAPTER - 1
INTRODUCTION
 INTRODUNCTION
Lending is the most profitable business of any commercial bank. The main functions of
commercial bank are to accept deposits and grant loans. In the Balance Sheet of the
commercial bank deposits are at Liabilities side and the loans and Advances are at
Assets side. The deposit in any form taken by the bank from the customer is treated as
the liability of the bank and similar as that the loan and advances lent to the customer is
treated as assets of the bank. The term “Evaluation” arises at the time of lending of loan.
When bank goes to finance any proposal, it wants to know whether the proposal is
economically and technically viable or not. It is also required to be tested whether the
party (who will take the loan) is able to repay the loan amount with interest component at
stipulated time period or not. Thus the “Evaluation of lending policy” refers to the
measurement of credibility of the loan repayment. It helps the bank to mobilize their
funds in prudent manner.
In the current scenario, most of the bank loans are face it the heat
of recession and they go bad and become NPAs (Non-Performing Assets). Repayment of
the loan in form of EMI (Equated Monthly Installment) is not take place. To overcome
from this situation bank has decided restructuring of the loans by converting the working
capital loan to term loan and not to take interest for the one year/ two year and make
another loan account with the same FITL (Funding Interest to Term Loan) and so on. On
basis of Evaluation a banker can analyzes the all aspects like economics technical,
managerial, market risk, financial risk, business risk, etc of the related proposal. It helps
the bank to be more competitive in the market and get the reward of the prudent decision
of lending as a fair interest.
To know how to determine the “Evaluation of Lending Policy” for the
purpose and how the bank maintain its Assets and Liabilities, I joined Punjab National
Bank” as a management trainee to learn the facts related to caption completion of my
summer training.

TOPIC OF THE STUDY

The study comprise of project report dealing with the subject “AN
EVALUATION OF LENDING POLICY OF PNB”.

OBJECTIVES OF THE STUDY

The study primarily attempts to know about management of loan and advances
made by 3939 Branch PNB, Bettiah
The following are the main objectives of the proposed summer training project:

1. To analyze the process of loans/advances for bank to enhance its business

turnover.
 2. To identify the components through which the sources of finance ascertain.
3. To calculate the real benefits provided by the bank to its creditworthy and potent
customers.
4. To calculate the exact permissible Bank Finance

METHODOLOGY OF THE PRESENT STUDY

Keeping in mind this the limited timeframe framed under MFC course I have
through a particular branch situated in the urban area. The total observation and analysis
is based on the data provided by the branch office from its records. So project work is
based on purely secondary data available in the records of Punjab National Bank, 0108
Branch, Darbhanga, I have tried my best to present, analyze and draw conclusion about
its lending policy. The database taken for the project are financial statement of last five
years of the branch booklet published etc.

PLAN OF THE STUDY

The proposed summer training report shall be tentatively divided into following
chapters.

CHAPTER I : Introduction

CHAPTER II : Conceptual Exposition of the topic

CHAPTER III : PNB – A Brief Profile

CHAPTER IV : Lending Policy of PNB – A study of 0108 branch

CHAPTER V : Finding and suggestions

BIBLIOGRAPHY

LIMITATIONS OF THE STUDY

No Study or assignment can be free from its limitation. The main
limitations are:
 Six week time is very less for analyzing the each and every aspect of Lending
Policy of Punjab National Bank.
 Respondents were reluctant in furnishing clear clues of information.
 Secrecy factor.
 Data and information is collected from small part of sector.
 CHAPTER -2
THEORITICAL EXPOSITION

OF THE TOPIC: LENDING

POLICY – A TOOL OF BANKING
POLICY
 CONCEPTUAL EXPOSITION

BACKDROPS
The history of economic growth of different countries of the world
shows that banking institutions have played a significant role in national
development. Although commercial banks in India expanded their operations
harmoniously in the post independence period.
In fact, commercial banks in India were institution of a few persons instead of
institutions of the masses. In the course of their expanding operations with the
growth of the economy, these banks served only well known customers, neglecting
large potential areas and millions of the downtrodden population.
With a view to making the banks vibrant and potent improvement of
development and making them a mass objective of achieving a wider