CHAPTER 1 INTRODUCTION GENERAL INTRODUCTION BANKING Banking, the business of pro

viding financial services to consumers and businesses. The basic services a bank
provides are checking accounts, savings accounts and time deposits that can be
used to save money for future use; loans that consumers and businesses can use t
o purchase goods and services; and basic cash management services such as check
cashing and foreign currency exchange. TYPES Four types of banks specialize in o
ffering these basic banking services: 1) commercial banks, 2) savings and loan a
ssociations, 3) savings banks, and 4) credit unions. A broader definition of a b
ank is any financial institution that receives, collects, transfers, pays, excha
nges, lends, invests, or safeguards money for its customers. This broader defini
tion includes many other financial institutions that are not usually thought of
as banks . These institutions include finance companies, investment companies, i
nvestment banks, insurance companies,
1
pension funds, security brokers and dealers, mortgage companies, and real estate
investment trusts. PURPOSE Banking services serve two primary purposes. First,
by supplying customers with the basic mediums-of-exchange (cash, checking accoun
ts, and credit cards), Second, by accepting money deposits from savers and then
lending the money to borrowers, banks encourage the flow of money to productive
use and investments. This in turn allows the economy to grow. Enabling the flow
of money from savers to investors is called financial intermediation, and it is
extremely important to a free market economy.
2
OBJECTIVES OF THE STUDY
The vital objectives of this project are To enhance and sharpens skill. To ge
t awareness about changing business environment in banking. To understand the
retail banking process.
3
INDUSTRY PROFILE ORIGIN AND DEVELOPMENT OF INDUSTRY Banking in India Banking in
India originated in the first decade of 18th century. The General Bank of India
came into existence in 1786. This was followed by Bank of Hindustan. Both these
banks are now defunct. The oldest bank in existence in India is the State Bank o
f India being established as "The Bank of Bengal" in Calcutta in June 1806. A co
uple of decades later, foreign banks like Credit Lyonnais started their Calcutta
operations in the 1850s. At that point of time, Calcutta was the most active tr
ading port, mainly due to the trade of the British Empire, and due to which bank
ing activity took roots there and prospered. The first fully Indian owned bank w
as the Allahabad Bank, which was established in 1865.
By the 1900s, the market expanded with the establishment of banks such as Punjab
National Bank, in 1895 in Lahore and Bank of India, in 1906, in Mumbai both of
which were founded under private ownership. The Reserve Bank of India formally t
ook on the responsibility of regulating the Indian banking sector from 1935. Aft
er India's independence in 1947, the Reserve Bank was nationalized and given bro
ader powers.
The banking in India was controlled and dominated by the presidency banks, namel
y, the Bank of Bombay, the Bank of Bengal, and the Bank of Madras which later on
merged to form the Imperial Bank of India, and Imperial Bank of 4
India, upon India's independence, was renamed the State Bank of India. The presi
dency banks were like the central banks and discharged most of the functions of
central banks. They were established under charters from the British East India
Company. The exchange banks, mostly owned by the Europeans, concentrated on fina
ncing of foreign trade. Indian joint stock banks were generally under capitalize
d and lacked the experience and maturity to compete with the presidency banks, a
nd the exchange banks. There was potential for many new banks as the economy was
growing.
Under these circumstances, many Indians came forward to set up banks, and many b
anks were set up at that time, and a number of them set up around that time cont
inued to survive and prosper even now like Bank of India and Corporation Bank, I
ndian Bank, Bank of Baroda, and Canara Bank
5
GROWTH AND PRESENT STATUS OF THE INDUSTRY
By the 1960s, the Indian banking industry has become an important tool to facili
tate the development of the Indian economy. At the same time, it has emerged as
a large employer, and a debate has ensued about the possibility to nationalize t
he banking industry. Indira Gandhi, the-then Prime Minister of India expressed t
he intention of the GOI in the annual conference of the All India Congress Meeti
ng in a paper entitled "Stray thoughts on Bank Nationalisation." The paper was r
eceived with positive enthusiasm. Thereafter, her move was swift and sudden, and
the GOI issued an ordinance and nationalised the 14 largest commercial banks wi
th effect from the midnight of July 19, 1969. Jayaprakash Narayan, a national le
ader of India, described the step as a "masterstroke of political sagacity." Wit
hin two weeks of the issue of the ordinance, the Parliament passed the Banking C
ompanies (Acquition and Transfer of Undertaking) Bill, and it received the presi
dential approval on 9th August, 1969.
A second dose of nationalisation of 6 more commercial banks followed in 1980. Th
e stated reason for the nationalisation was to give the government more control
of credit delivery. With the second dose of nationalisation, the GOI controlled
around 91% of the banking business of India.
After this, until the 1990s, the nationalised banks grew at a pace of around 4%,
closer to the average growth rate of the Indian economy.
6
Liberalisation In the early 1990s the then Narasimha Rao government embarked on
a policy of liberalisation and gave licenses to a small number of private banks,
which came to be known as New Generation tech-savvy banks, which included banks
such as UTI Bank (the first of such new generation banks to be set up), ICICI B
ank and HDFC Bank. This move along with the rapid growth in the economy of India
, kick started the banking sector in India, which has seen rapid growth with str
ong contribution from all the three sectors of banks, namely, government banks,
private banks and foreign banks. The next stage for the Indian banking has been
setup with the proposed relaxation in the norms for Foreign Direct Investment, w
here all Foreign Investors in banks may be given voting rights which could excee
d the present cap of 10%,at present it has gone up to 49% with some restrictions
. The new policy shook the Banking sector in India completely. Bankers, till thi
s time, were used to the 4-6-4 method (Borrow at 4%; Lend at 6%; Go home at 4) o
f functioning. The new wave ushered in a modern outlook and tech-savvy methods o
f working for traditional banks. All this led to the retail boom in India. Peopl
e not just demanded more from their banks but also received more. Current scenar
io Currently (2008), overall, banking in India is considered as fairly mature in
terms of supply, product range and reach. Even though reach in rural India stil
l remains a challenge for the private sector and foreign banks. Even in terms of
quality of assets and capital adequacy, Indian banks are considered to have cle
an, strong
7
and transparent balance sheets-as compared to other banks in comparable economie
s in its region.
Indian economy is expected to be strong for long time-especially in its services
sector. The demand for banking services-especially retail banking, home loans a
nd investment services are expected to be strong.
In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase its
stake in Kotak Mahindra Bank (a private sector bank) to 10%. This is the first t
ime an investor has been allowed to hold more than 5% in a private sector bank.
Currently, India has 88 scheduled commercial banks (SCBs) - 28 public sector ban
ks (that is with the Government of India holding a stake), 29 private banks (the
se do not have government stake) and 31 foreign banks.
They have a combined network of over 55,000 branches and 17,000 ATMs. According
to a report by ICRA Limited, a rating agency, the public sector banks hold over
75 percent of total assets of the banking industry, with the private and foreign
banks holding 18.2% and 6.5% respectively.
8
Total Income Wise Listing1 Bank Name State Bank of India ICICI Bank Limited Punj
ab National Bank Canara Bank Bank of Baroda Bank of India Industrial Development
Bank of India Limited Union Bank of India Central Bank of India HDFC Bank Limit
ed Indian Overseas Bank UCO Bank Oriental Bank of Commerce Syndicate Bank Allaha
bad Bank Number of Branches
9143 557 4066 2532 2687 2563 173 2095 3143 515 1523 1749 1161 1897 1932
Total Net No.of Income(Rs Profit Employees Mn) (Rs Mn)
198774 25479 58047 46893 38737 41808 4548 25421 37241 14878 24178 24510 14962 24
624 18742 431836 187676 108153 100890 82917 82131 66612 64888 59164 55993 51345
48183 46717 46420 43739 44067 25401 14393 13432 8270 7014 5609 6752 2574 8708 78
34 1966 5572 5365 7061
1
Source : http://www.dnb.co.in/topbanks/company_listing.asp?q=Total_Income
9
FUTURE OF THE INDUSTRY
A healthy banking system is essential for any economy striving to achieve good g
rowth and yet remain stable in an increasingly global business environment. The
Indian banking system, with one of the largest banking networks in the world, ha
s witnessed a series of reforms over the past few years like the deregulation of
interest rates, dilution of the government stake in public sector banks (PSBs),
and the increased participation of private sector banks. The growth of the reta
il financial services sector has been a key development on the market front. Ind
ian banks (both public and private) have not only been keen to tap the domestic
market but also to compete in the global market place. New foreign banks have be
en equally keen to gain a foothold in the Indian market. The momentum in credit
growth has been maintained during 2005-06 due to two factors: The corporate sect
or has stepped up its demand for credit to fund its expansion plans; there has a
lso been a growth in retail banking. However, even as the opportunities increase
, there are some issues and challenges that Indian banks will have to contend wi
th if they are to emerge successful in the medium to long term. This report disc
usses these issues and challenges -- both intrinsic and external, such as Risk m
anagement and Basel II The future of banking will undoubtedly rest on risk manag
ement dynamics. Only those banks that have efficient risk management system will
survive in the market in the long run. The effective management of credit risk
is a critical 10
component of comprehensive risk management essential for long-term success of a
banking institution. Although capital serves the purpose of meeting unexpected l
osses, capital is not a substitute for inadequate decontrol or risk management s
ystems. Coming years will witness banks striving to create sound internal contro
l or risk management processes. With the focus on regulation and risk management
in the Basel II framework gaining prominence, the post-Basel II era will belong
to the banks that manage their risks effectively. The banks with proper risk ma
nagement systems would not only gain competitive advantage by way of lower regul
atory capital charge, but would also add value to the shareholders and other sta
keholders by properly pricing their services, adequate provisioning and maintain
ing a robust financial structure. ‘The future belongs to bigger banks alone, as
well as to those which have minimised their risks considerably.’ Consolidation C
onsolidation, which has been on the counter over the last year or so, is likely
to gather momentum in the coming years. Post April 2009, when the restrictions o
n operations of foreign banks will go, the banking landscape is expected to chan
ge dramatically. Foreign banks, which currently account for 5% of total deposits
and 8% of total advances, are devising new business models to capture the India
n market. Their full-fledged entry is expected to transform the business of bank
ing 11
in many ways, which would be reflected in terms of greater breadth of products,
depth in delivery channels and efficiency in operations. Thus Indian banks have
less than three years to consolidate their position. Despite the stiff resistanc
e from certain segments, consolidation holds the key to future growth. This view
is underpinned by the following: ► Owing to greater scale and size, consolidati
on can help save costs and improve operational efficiency. ► Banks will also hav
e to explore different avenues for raising capital to meet norms under Basel-II
► Owing to the diversified operations and credit profiles of merging banks, cons
olidation is likely to serve as a risk-mitigation exercise as much as a growth e
ngine. Though there is no confirmation yet, speculative signals arising from the
market point to the prospect of consolidation involving banks such as Union Ban
k of India, Bank of India, Bank of Baroda, Dena Bank, State Bank of Patiala, and
Punjab and Sind Bank. Further, the case for merger between stronger banks has a
lso gained ground — a clear deviation from the past when only weak banks were th
rust on stronger banks. There is a case being made for mergers between banks wit
h a distinct geographical presence coming together to leverage their respective
strengths.
12
GLOBALIZATION/ OVERSEAS EXPANSION Growing integration of economies and the marke
ts around the world is making global banking a reality. The surge in globalizati
on of finance has already begun to gain momentum with the technological advancem
ents which have effectively overcome the national borders in the financial servi
ces business. Widespread use of internet banking will widen frontiers of global
banking, and make marketing of financial products and services on a global basis
possible. In the coming years globalization will spread further on account of t
he likely opening up of financial services under WTO. India is one of the 104 si
gnatories of Financial Services Agreement (FSA) of 1997. This gives India’s fina
ncial sector including banks an opportunity to expand their business on a quid p
ro quo basis. As per Indian Banks Association report ‘Banking Industry Vision 2
010’, there would be greater presence of international players in Indian financi
al system and some of the Indian banks would become global players in the coming
years. So, the new mantra for Indian banks is to go global in search of new mar
kets, customers and profits. TECHNOLOGY There is an imperative need for not mere
technology upgradation but also its integration with the general way of functio
ning of banks to give them an edge in respect of services provided to their cons
tituents, better housekeeping, optimizing the use of funds and building up of MI
S for decision making, better management of assets & liabilities and the risks a
ssumed which in turn have a 13
direct impact on the balance sheets of banks as a whole. Technology has demonstr
ated potential to change methods of marketing, advertising, designing, pricing a
nd distributing financial products and services and cost savings in the form of
an electronic, self-service product delivery channel. These challenges call for
a new, more dynamic, aggressive and challenging work culture to meet the demands
of customer relationships, product differentiation, brand values, reputation, c
orporate governance and regulatory prescriptions. Technology holds the key to th
e future success of Indian Banks. Internet, wireless technology and global strai
ght-through processing have created a paradigm shift in the banking industry. Th
e explosive growth of both the Internet and mobile and wireless technology is re
volutionizing the way the financial industry conducts business. The overall wire
less technology market is expected to grow profoundly in the coming years. REGUL
ATIONS The RBI s approval for banks to raise funds abroad through innovative cap
ital instruments holds great significance. Such fund-raising, which includes pre
ference shares, will, however, not just substitute equity; it could have uninten
ded consequences on the strategies of banks and their profitability. While the c
ost of raising monies through such instruments is likely to be higher (close to
10 per cent), the consequent higher leverage on equity funds is likely to result
in expansion of return on net worth. This is because the same amount of capital
supports a higher volume of business, generating higher profits.
Banks are likely to be able to raise long-term preference shares at coupon rates
14
between six per cent and eight per cent. The positive impact on bank profitabili
ty could thus be significant. Preference capital can be used as the currency for
acquisition. The advantage for public sector banks is that they no longer need
to bother about government stake falling below 51 per cent. Banks such as Dena B
ank, Oriental Bank of Commerce and Andhra Bank are most likely to benefit from t
his move. SKILLED MANPOWER There will be a sea change for employees too. Secure
jobs will be replaced by contractual appointments, for a specified period of tim
e. The unions will merge into the shadows and bank managements will turn effecti
ve. As a result there will be swifter turn over of personnel in banks. But at th
e same time, skilled personnel from other disciplines will enter banks in increa
sing numbers. Factors like skills, attitudes and knowledge of the human capital
play a crucial role in determining the competitiveness of the financial sector.
The quality of human resources indicates the ability of banks to deliver value t
o customers. Capital and technology are replicable but not the human capital whi
ch needs to be valued as a highly valuable resource for achieving that competiti
ve edge.
Business model, which comprises a comprehensive range of business solutions deli
vered through a unique balance of portfolio and relationship management must be
incorporated.
15
FUTURE CHALLENGES & SUGGESTIONS Competition Challenges Customer Retention Global
ization Shrinking Margin

SUGGESTIONS Strong In-house research & market Intelligence Focused marketing

- Focus on region-specific campaigns rather than national media campaigns
The growth of the retail financial services sector has been a key development on
the market front. Indian banks (both public and private) will not only be keen
to tap the domestic market but also to compete in the global market place. New f
oreign banks will be equally keen to gain a foothold in the Indian market.
16
ORIGIN OF THE ORGANIZATION
Punjab National Bank was established in the year 1895 found by Punjab Kesari Shr
i Lala Lajpat Rai at Lahore (now in Pakistan) as a joint stock company. After th
e partition in 1947, the bank grew steadily with its presence at the important c
enters and metropolitan cities of the country and emerged as one of the big five
Indian banks during pre-nationalized period.
The bank was nationalized in 1969 along with 13 other banks. Subsequently, in 19
93 it took over the New Bank of India, another bank that was nationalized in 198
0. In 2003 the Nedungadi Bank Ltd., a south based private sector bank also merge
d the bank. Thus the bank, which previously had its main business area around th
e Indo-Gangetic belt and major metros, could ensure its remarkable presence in t
he entire country.
Presently, it is the second largest bank of the country rendering a wide variety
of banking services (corporate/personal/industrial finance/agriculture
finance/financing of trade and commerce/international banking). It has a broad c
lientele base like Multi National Corporation, Indian Conglomerates,
medium/small industrial units and NRI’s. As a bank with global standard, it was
ranked 416th among the biggest bank in the world by the banker’s Almanac in 2002
.The bank is member of the SWITY (society for Worldwide International Financial
Telecommunication) and has strong correspondent relationship with the leading in
ternational banks. Continued financial sector reforms led to greater 17
alignment of financial sector to the competition business environment. Operation
al and supervisory practices in the sector have been progressively matching inte
rnational standards. In the process Indian banking system is
becoming increasingly mature in terms of transformation of business process and
risk management. The head office of the Bank is at, Bhikaji Cama Place, New Delh
i.
The bank also has subsidiaries like PNB Gilts Ltd., PNB Housing Finance Ltd., PN
B Capital Services Ltd., PNB Assets Management Co .Ltd.
18
GROWTH AND DEVELOPMENT OF THE ORGANIZATION
To evolve and position the bank as a world class, progressive, cost-effective an
d customer friendly institution providing comprehensive financial and related se
rvices: integrating frontiers of technology and serving various segment of socie
ty especially the weaker section of the society: committed to excellence in serv
ing the public and also excelling in the corporate values.
Corporate excellence emanate from good corporate governance exercised by adoptin
g standard of transparency, accountability, professionalism, social responsivene
ss, and ethical business practices with this in view, the has been making effort
s for adopting the best practices. The bank commitment towards corporate governa
nce is to bestow greater transparency and openness in the management and to ensu
re best performance by staff atall the levels to maximize the operational effici
ency. Adopting the corporate governance as a work ethos, the bank is committed t
o enhancing the stakeholders value.
19
PRESENT STATUS OF THE ORGANIZATION With its presence virtually in all the import
ant centers of the country, Punjab National Bank offers a wide variety of bankin
g services which include corporate and personal banking, industrial finance, agr
icultural finance, financing of trade and international banking. Among the clien
ts of the Bank are Indian conglomerates, medium and small industrial units, expo
rters, non-resident Indians and multinational companies. The large presence and
vast resource base have helped the Bank to build strong links with trade and ind
ustry. Punjab National Bank is serving over 3.5 crore customers through 4540 Off
ices including 421 extension counters - largest amongst Nationalized Banks. Punj
ab National Bank with 112 year tradition of sound and prudent banking is one amo
ng 300 global companies and seven Indian companies which are expected to emerge
as challengers to World’s leading blue chip companies. While among top 1000 worl
d banks, “The Banker”, the leading magazine in London, has placed PNB at the 248
th position, the bank features at 1308th position among Forbe’s Global 2000 list
of global giants and fast growing companies. At the same time, the bank has bee
n conscious of its social responsibilities by financing agriculture and allied a
ctivities and small scale industries (SSI). Considering the importance of small
scale industries bank has established 31 specialised branches to finance exclusi
vely such industries.
20
Strong correspondent banking relationship which Punjab National Bank maintains w
ith over 200 leading international banks all over the world enhances its capabil
ities to handle transactions world-wide. Besides, bank has Rupee Drawing Arrange
ments with 15 exchange companies in the Gulf and one in Singapore. Bank is a mem
ber of the SWIFT and over 150 branches of the bank are connected through its com
puter- based terminal at Mumbai. With its state-ofart dealing rooms and well-tra
ined dealers, the bank offers efficient forex dealing operations in India. The b
ank has been focusing on expanding its operations outside India and has identifi
ed some of the emerging economies which offer large business potential. Bank has
set up representative offices at Almaty: Kazakhistan, Shanghai: China and in Lo
ndon. Besides, Bank has opened a full fledged Branch in Kabul, Afghanistan. Keep
ing in tune with changing times and to provide its customers more efficient and
speedy service, the Bank has taken major initiative in the field of computerizat
ion. All the Branches of the Bank have been computerized. The Bank has also laun
ched aggressively the concept of "Any Time, Any Where Banking" through the intro
duction of Centralized Banking Solution (CBS) and over 2409 offices have already
been brought under its ambit. PNB also offers Internet Banking services in the
country for Corporate as well as individuals. Internet Banking services are avai
lable through all Branches of the Bank networked under CBS. Providing 24 hours,
365 days banking right from the PC of the user, Internet Banking offers world cl
ass banking facilities like anytime, 21
anywhere access to account, complete details of transactions, and statement of a
ccount, online information of deposits, loans overdraft account etc. PNB has rec
ently introduced Online Payment Facility for railway reservation through IRCTC P
ayment Gateway Project and Online Utility Bill Payment Services which allows Int
ernet Banking account holders to pay their telephone, mobile, electricity, insur
ance and other bills anytime from anywhere from their desktop. Another step take
n by PNB in meeting the changing aspirations of its clientele is the launch of i
ts Debit card, which is also an ATM card. It enables the card holder to buy good
s and services at over 99270 merchant establishments across the country. Besides
, the card can be used to withdraw cash at more than 25000 ATMs, where the Maes
tro logo is displayed, apart from the PNB s over 1094 ATMs and tie up arrangeme
nts with other Banks Latest Quarterly/Half yearly Income statement2
As on(Months) Interest Income Other Income Total Income Interest Expenses Other
Expenses Provision & Contingencies OPBDT Depreciation Extra-Ordinary / Cash Adju
stment Provision for Tax After tax Profit Equity Capital Reserves
22
31-Mar-08(3) 38797.90 5372.10 44170.00 23625.10 8277.10 1676.70 10591.10 0.00 0.
00 5153.50 5437.60 3153.00
104673.50
31-Mar-07(3) 31944.00 5183.90 37127.90 17713.70 10590.70 6126.90 2696.60 0.00 0.
00 319.60 2377.00 3153.00
98263.10
% Change 21.46 3.63 18.97 33.37 -21.85 -72.63 292.76 --1512.48 128.76 0.00
6.52
source:http://www.dnb.co.in/topbanks/company_listing.asp?q=Total_Income
22
FUTURE PLANS OF THE ORGANIZATION
To provide excellent professional services and improve its position as a leader
in the field of finance and related service, build and maintain a team of motiva
ted and committed workforce with high work ethos; uses latest technology aimed a
t customer satisfaction and act as effective catalyst for socio-economic develop
ment.
The bank is committed to its corporate mission to provide excellent professional
services and improve its position as leader in the field of financial and relat
ed services, build, maintain a team of motivation and committed workforce with h
igh work ethos, use latest technology, aimed at customers and act as an effectiv
e catalyst of socio-economic development. Punjab National Bank has focused quite
a bit in rural areas, which is actually needed for our country. Their ATMs are
given the facility of English, National Language Hindi and the local language of
the state. They also provide mobile top-up facility.
23
FUNCTIONAL DEPARTMENTS OF THE ORGANIZATION HEAD OFFICE
ZONAL OFFICES
REGIONAL OFFICES
BRANCHES Executive cards of the organization. They are Executive Director, Gener
al Manager (GM), Deputy General Managers (DGM), assistant General Managers (AGM)
, Chief Managers (CM), Managers and other officers are in the hierarchy at the h
ead office level functioning in various Departments. The Zonal Manager and regio
nal Managers head the Zonal Offices and Regional Officers respectively who are a
ssisted by other down in the hierarchy. The Branch is headed by AGM\CM\ Senior M
anagers\Managers depending upon the size of the Branch activities and rendering
of satisfactory customer service. The bank has a very good system of delegating
power to the different functionaries in the hierarchy to facilitate speedy decis
ion- making process even up to the branch Level.
24
2.6 Organization chart3
Mr. O.P Arora (Branch Manager)
Mr. Rajbir Singh (Manager)
Mr. C.S. Kshatriya (Dy. Manager)
Mr. Rajesh Menon (C.T.O) Mr. Ajit Singh Rana (Clerk)
Mr. S.K Jindal (C.T.O)
Mr. J.D Mittal (Clerk)
PRODUCT AND SERVICE PROFILE OF THE ORGANIZATION
3
Source : Bank administration
25
Presently, it is the second largest bank of the country rendering a wide variety
of banking services: CENTRALISED BANKING SOLUTION (CBS) CBS, an inter-branch
networking and data-sharing platform helps to operate account from any city in I
ndia having CBS networked branches. Changing status from Customer of the Branch’
to ‘Customer of the Bank’, presently, there are over 2,616 CBS networked brandi
es in 820 cites,
NRI’S & TOURISTS Currency exchange services are being provided by our 68 Excha
nge Bureau’s spread throughout the country
ONLINE TAX PAYMENT PNB provides the facility of online payment of service tax,
excise duty, DGFT, custom duty & all charges urlderMCA2l
CASH MANAGEMENT SERVICE (CMS) PNB’s CMS facilitates management of receivables
and payments in technology driven environment, ensuring availability of funds at
reduced cost, helping reconciliation at multi location accounts besides providi
ng customized MIS. MUTUAL FUNDS & INSURANCE 26
The bank has tied-up with Principal Financial Group for providing Mutual Funds a
nd Insurance services & also tied up for distribution & marketing of UTI Mutual
Funds.
NRI SERVICES NRE, FCNR, RFC, NRO Deposit a/c investment Management & Housing L
oan facilities for NRI’s.
FOREIGN EXCHANGE PNB has 150 branches authorized for handling foreign exchange
business and these branches have been provided with SWIFT connectivity to ensur
e faster realisation of funds.
e-MONEYINDIA Send money to the loved ones in India through PNB’s eMoneyIndia s
ervice. Draft delivery across 4,038 locations and Bank Credit to over 2,500 bran
ches in India.
ONLINE RAILWAY RESERVATION/AIR TICKET BOOKING Say goodbye to long queues. PNB
offers online booking & information through IRCTC payment gateway. Just click an
d travel comfortably. DEPOSITORY SERVICE
27
PNB Depository service provides the facility of having shares & securities in De
mat form & executes transactions of sales & purchase hassle free electronically.
LOCKERS Now, customer can relax with assurance of having your locker at the PN
B branch nearest to their home.
CUSTOMER CARE FACILITY All the banking queries and problems are just a call aw
ay! PNB presents 24 hr. customer care facility. Call at toll free no. at 1800 18
0 2222 from MTNL/BSNL or 0124-2340000 from other no.s
PNB GOLD COIN PNB gives opportunity to dazzle the well wishers, patrons, partn
ers and acquaintances with the mystical charisma of PNB’s 999.9 fineness pure 24
-carat gold coins and to convey the true value of treasured relationship. Enjoy
guarantee of purity & weight of hallmarked gold coins. ELECTRONIC CLEARING SER
ViCE (ECS) & ELECTRONIC FUNDS TRANSFER (EFT) Avail ECS for quick movement of fun
ds in a paperless mode & EFT to ensure an expeditious transfer of funds by using
electronic media.
28
 WEALTH MANAGEMENT SERVICE PNB provides customized financial advisory services
for
individuals that includes Mutual Funds, insurance, Retirement Planning, Tax plan
ning, & Debt Management to customers for wealth maximization
ONLINE BILL PAYMENT No more queues to pay your bills. Now pay telephone, mobil
e, electricity, insurance & several other bills 24 hours, 365 days, from the des
ktop. LOANS CAR LOAN/2 WHEELER LOAN Drive dream car/bike home. PNB gives loa
n for the purchase of new/old car, van or jeep, new bike at very attractive inte
rest rates with a convenient repayment period.
LOAN AGAINST JEWELLERY Loan against Gold & Jewellery for individuals/business
enterprises, both for business & personal needs.
TRADERS LOAN Maximize business turnover with PNB traders loan with minimum pap
er work and attractive rate of interest, for whole sellers,
29
dealers, distributors, individuals, firms, registered cooperative societies & co
mpanies. Loans also available for purchase of shop /showroom.
HOUSING LOAN Bring own dream home to life. Avail ‘flexi’ housing loan and have
the advantage of substantial savings on the interest component. Insurance cover
for home loan borrowers available.
PERSONAL LOANS A scheme to meet all types of personal needs, for and
permanent/confirmed
employees/Defence
Personnel
Professionally Qualified Doctors.
CORPORATE LOANS Corporate can expand & diversify with user friendly Corporate
Loans Products Working Capital, Term Loan, Bank Guarantee, Letter of Credit & ot
hers.
EDUCATIONAL LOAN Avail “Sarvottam Shiksha & Vidyalakshyapurti” schemes for stu
dies In India & abroad and ensure a great career for child.
PNB GRAMIN CHIKITSAK
30
Scheme for financing qualified medical practitioners for setting up clinics in r
ural areas at concessional rate of interest.
LOAN TO PENSIONERS PNB values the traditions of India by giving special benefi
ts to the senior citizens.
LOANS TO WOMEN PNB’s “Mahila Sashaktikaran Abhiyaan” & “Mahila Samridhi Yojana
” give special benefits to women customers that help in building their confidenc
e & self-esteem.
DEPOSITS PNB MET LIFE Delighting depositors with life insurance by extendi
ng the facility of insurance cover (death only) to all Saving Fund & Current Acc
ount (Individuals) holders.
PNB VIDYARTHI ACCOUNT Empowering the young generation with a zero balance acco
unt for students with overdraft facility.
31
 TOTAL FREEDOM SALARY ACCOUNT Discover the freedom of flexibility with PNB’s To
tal Freedom Account. A zero balance account for employees having salary account
in the bank, with overdraft facility.
PNB TAX SAVER PNB offers term deposit scheme to avail tax benefit under Sec 80
(C)2 (xxi) of income Tax Act.
PNBMITRA PNB offers no frill saving account for financial inclusion -
32
MARKET PROFILE OF THE ORGANIZATION
Today, PNB operates 4,070 branches and 443 service counters across the country,
consolidating its position as one of the top nationalized banks of India. PNB ha
s been ranked at395Th position amongst the top 1000 global banks by the prestigi
ous international publication The Banker.
Like other scheduled banks in India, the PNB also comes under the guidance of th
e Reserve Bank of India (RBI) and as a government establishment, it has to follo
w directions of the government. Two directives, one from the Reserve Bank of Ind
ia and the other from India’s Department of Official languages are key in this c
ontext. In 1985, the Department of Official Languages mandated that all electron
ic equipment used in ministries and departments of the government and their atta
ched and subordinate offices would need to be bilingual. That is, they should be
able to handle both Hindi and English. By the year 2000, the Reserve Bank of In
dia had mandated that banks should have a clear IT plan that should be implement
ed: that at least 7O percent of all branches should be computerized.
With technology emerging as a key driver of business growth, the bank has taken
a number of IT initiatives to provide its large clientele spread all across the
country with the best of technology while retaining the all- essential human war
mth. Its core banking system (CBS) already acts as a single data bank, a backbon
e to 2,108 service outlets with internet banking services spread over 28 33
states in the country. This deployment has lent PNB the status of being the larg
est core banking system in Asia.
The bank has 676 ATMs and also coordinates with the MITR group of six banks with
2,200 ATMs. PNB is a member of Institute Development and Research in Banking Te
chnology (IDRBT)-sponsored National Financial Switch (NFS) for mutual ATM transa
ctions. NFS at present has 18 banks and a pool of 6,197 ATMs. PNB has also pione
ered the cheque truncation system in India. Other software fuelling the systems
are instant fund transfer mechanism, data warehouse for decision control and MIS
and risk management software based on Basel II guidelines set by the Bank for I
nternational Settlements.
About 77 percent of its business is connected through leased lines, ISDN and VPN
. Other services such as mobile banking utility bill payments, funds transfer, e
-commerce and CRM through mobile shall be introduced for the PNB branches includ
ing setting up a network operating centre (NOC) to monitor the CBS network.
RELATIVE PERFORMANCE
⇒ Spreads: PNB has the best margins in the banking sector. ⇒ Return Parameters:
On both the return parameters i.e. return on average asset and return on average
networth, PNB is close to the average of the peer set. 34
⇒ Asset Quality: PNB’s asset quality as measured by the net NPA ratio is on the
higher side. It is just better than the largest scheduled commercial bank i.e. S
BI. ⇒ Coverage Ratio: The provision coverage ratio third best after HDFC Bank an
d OBC in our set of banks. ⇒ Operating Efficiency: PNB’s cost to income ratio is
higher than the average of the peer set. However, we believe that once the tech
nological platforms are put in place, the bank will be able to bridge the gap wi
th the numero uno in this regard. CHART FOR RELATIVE PERFORMANCE OF BANKS2
35
CHAPTER 3 DISCUSSION ON TRAINING STUDENT’S WORK PROFILE (ROLE AND RESPONSIBILITY
) I worked as a management trainee in Punjab National Bank, Mukundpur Branch, I
was responsible for multiple type of work involved in banking which our services
best in the industry. Customers Service This is the counter where customer in
teracts with the bank personnel firstly. Here, I got a chance to know about the
different problems of the customers visiting the bank. I helped them to solve th
eir different problems which are as follows: Query solutions: Solving their Dif
ferent queries such as: Document required for new a/c Documents for loan Re
quirement for new ATM card Providing different forms for different purposes
Documents for Micro finance
New account opening: To help the customer in opening the new account by fillin
g up their forms along with scrutinizing their documents. This includes checking
of residence proof,
36
address proof and witness required. Then generating account number and customer
Id in the presence of banking employee.
Frills Account They are also known as PNB MITR account. These are the zero bal
ance account specially created for these poor peoples. This account has the faci
lity to avail the overdraft limit of up to Rs.3,000. The branch has opened 40,00
0 accounts by 30 June.
Cheque clearing This includes checking the cheque details like date of cheque,
account number of the customer, signature of the customer.
Loan department It includes clearing of various types of loans including perso
nal loans, vehicle loan, home loan etc. In the branch I got a chance to visit th
e working site of the loan applicant with the bank personnel.
37
DESCRIPTION OF LIVE EXPERIENCE The first day in this industry made me feeling li
ke in a heaven because this was my first step toward my dream and this was a new
thing for me, this was practical exposure because till now I read only in books
about banking ,first day when I reached bank premises at 9:30 am ,I saw crowd o
f over 100 people waiting outside the bank . I usually worked under the supervis
ion and direction of the asst. manager Mr.Rajveer Singh. He gave me different re
sponsibilities as per the need, and at the end of the day I had to report the fu
ll day’s work to him.
38
Procedural Chart for new account opening:-
New customers at help desk
Documents Provided
Documents checking
If Yes Documents as per rule If No
Fill up the form and send for verification
Ask for the necessary documents
If approved
Verification by Mr.Rajveer
If Not
Customer ID & A/C No. generated
Application rejected
Pass Book, ATM Card & Check Book issued
39
STUDENT’S CONTRIBUTION TO ORGANIZATION
As a Management Trainee I worked in all of teams, as a team member my role was s
uch as follows:-
Marketing To collect data from the: Local community their existing custome
rs NGOs and SHG(Self Help Groups).
Cheque clearance It includes: Inward cheque clearance Outward cheques Ve
rifying Cheque details like date of cheque, a/c no. of the customer, signature o
f the customer, cutting on cheque if any. Loan clearance It includes: Documen
t verification Site visit with bank employee for Micro loans Clearance of va
rious types of loans including Micro loan, personal loans, vehicle loan, etc. 40
 Customer relationship Provide information such as: Providing information abo
ut different products such as FD(Fixed Deposit),RD(Recurring Deposit),mutual fun
ds, Flexible Deposit. Help in solving problems of customers. Procedure and c
onditions for getting loan
41
SUMMARY AND CONCLUSIONS SUMMARY OF LEARNING EXPERIENCE While working in Punjab N
ational Bank’s 1st Micro Branch of India I got in-depth knowledge about Micro fi
nance. I recognize that there is a lot more to discover and learn, I learned to
be more responsible, have more patience and most important it helped me to learn
how to handle the work pressure.
I got to know what all different types of question can be asked by a banking cus
tomer, as the branch was in the village area with population of 2 lakh peoples w
here there was no other bank’s branch, it was difficult to handle minimum 500700
per day with the queries like : ℵ What’s the procedure to open an account? ℵ Wh
at’s the procedure to get an ATM card? ℵ What’s the procedure to get a pass book
? ℵ What’s the procedure to get a cheque book? ℵ How to fill ATM form? ℵ How to
fill all other different forms like cheque clearance form, cash deposit form, ca
sh withdrawal form, etc.? Besides the query solution I also filled up the form f
or the illiterate and old peoples and helping them for their requirements. Apart
from customer service I got to know about the micro finance and the procedure a
nd all document required for it and types of people who can get the micro loan.
42
OBSERVATIONS AND RECOMMENDATIONS
It has been observed that to put a new organization into a running position is m
uch more difficult than to handle a already working organization, manager’s task
is difficult in a banking industry he is the person who is completely liable fo
r the working of branch. To put a right person at a right job is not an easy tas
k for the manager.
I observed some of the factors in my branch such as: ϒ Lack of staff ϒ lack of E
fficient staff ϒ Brach working space ϒ lack of speed ϒ Lack of quality service ϒ
Complicated work procedure ϒ Not providing service on time
Beside all these factors the branch has also achieved some achievements such as
12000 accounts in 2 days and distribute micro loan of around 5 crore rupees to d
ifferent 55 Self Help Groups to start their small businesses.
43
Opening of 1st Micro branch in India is also a achievement and it is a starting
of new type of banking revolution which can change the life of villagers which d
epends on the “MAHAJAN” to lend them money at high interest rate.
Recommendations:-
With the changing banking system, this branch has also to adapt the new ways of
banking such as:
ψ Shifting new and
oung staff to this branch ψ Give them good incentives so tha
t the
sta
their for longer time period as
per the location
ψ Complicated form should be replace with eas
forms ψ Provide eas
norms for ne
w account opening. ψ Well trained staff be placed to increase work pace and to d
ecrease per
transaction time also.
ψ Local people should be appointed to handle the customers.
44
(Annexure) VARIOUS FORMS USED IN PNB:
45
FORM No.60 (For person not having PAN card)
ACCOUNT OPENING FORM 46
Page 1 of 4
47
Page 2 of 4
48
Page 3 of 4
49
Page 4 of 4
CUSTOMER MASTER FORM
Page 1 of 4
50
Page 2 of 4
51
Page 3 of 4
52
Page 4 of 4
53
54
List of tables:Page no. Table 1:Table 2:Total Income Wise Listing of banks Lates
t Quarterl
/Half
earl
Income statement -9 - 22
List of Charts:Chart1:Chart2:Chat 3:Graphical organizational structure Chart for
relative performance of banks Procedural Chart for new account opening - 25 - 3
5 - 39
55
BIBLIOGRAPHY Websites:-
www.finance.indiamart.com www.allbusiness.com www.ficci.com www.business.mapsofi
ndia.com www.pnbindia.com www.g
anguru.org www.info.gov.hk www.indiainfoline.com
www.indiaearnings.mone
control.com www.assamagribusiness.nic.in www.bna.com/ ww
w.corporateinformation.com www.outlookmone
.com www.business-standard.com Magazi
ne:India toda
Business world Businesstoda

END OF REPORT
56