punjab national bank.docx

8/10/2019 punjab national bank.docx

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CHAPTER-1

PROFILE OF THE COMPANY

A bankis afinancial intermediary that acceptsdeposits and channels those deposits

intolending activities, either directly by loaning or indirectly throughcapital markets.A

bank links together customers that have capital deficits and customers with capital

surpluses.

Range of activities

Activities undertaken by large banks include investment banking, corporate banking,

insurance, private banking, consumer finance, foreign exchange trading, commodity

trading, trading in equities, futures and options trading and money market trading.

Importance of Banks in financial sector

Financial institutions in a community can form the core of economic development.

Although they shouldn't be expected to finance revitalization programs single handedly,

they should be considered as essential to success. Yet banks and other local financial

institutions have largely ignored local improvement efforts in recent decades. In an

increasingly focused effort to satisfy their stockholders, they have looked for investments,

which provide the highest rate of return. As a result, their investment money has gone

elsewhere, to other regions of the country or even to other parts of the world. In doing so,

often they have ignored their responsibilities to the local community in which they are

based, and from which comes most of their business. Local banks need to be reacquainted

with their need to be locally involved. Downtown organizations should include local

bankers, and downtown leaders should feel comfortable including them as integral

members of revitalization programs.
http://en.wikipedia.org/wiki/Financial_intermediaryhttp://en.wikipedia.org/wiki/Deposit_accounthttp://en.wikipedia.org/wiki/Loanhttp://en.wikipedia.org/wiki/Capital_markethttp://en.wikipedia.org/wiki/Capital_markethttp://en.wikipedia.org/wiki/Loanhttp://en.wikipedia.org/wiki/Deposit_accounthttp://en.wikipedia.org/wiki/Financial_intermediary


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Reserve Bank of India

It has three Parts:-

1. Commercial Banks

2. Cooperative Societies

3. Other Institutions

1. Commercial banks

a. Public Sector Banks

Figure 1: public sector bank

b. Private Sector Banks

Figure 2: private sector bank

PUBLIC

SECTOR

Nationalised Bank

14 major banksnationalised on

19 july 1969

6 banksnationalised on15 april 1980

State Bank OfIndia

Regional RuralBanks

PRIVATE SECTOR

BANKS

Non Scheduled Banks

Foreign Banks In India

Private Banks

Local Area BanksForeign Banks

Other Indian Banks


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2. Cooperative Societies

Figure 3: cooperative societies

3. Other institutions

Figure 4: other institutions

CooperativeSocieties

StateCooperative

CentralCooperative

Primaryagriculture

credit societies

primary urban creditsocieties

State landDevelopment

Central LandDevelopment

Bank

PLDB

Other Institutons

Government

N.S.C Postofficesavingbank

E.P.F.

Public sector

LIC,UTI,IIDBI

ICICI,IFCI

Private sector

ChitsNidhis Corporate bodies


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PUNJAB NATIONAL BANK

1.1 Company Profile

With its presence virtually in all the important centers of the country, Punjab National

Bank is nationalised bank i.e. public sector bank which offers a wide variety of banking

sector which include corporate and personal banking, industrial finance, agricultural

finance, financing of trade and international banking. Punjab National Bank with 112

year tradition of sound and prudent banking is one among 300 global companies and

seven Indian companies which are expected to emerge as challengers to Worlds leading

blue chip companies.

At the same time, the bank has been conscious of its social responsibilities by financing

Agriculture and allied activities and small scale industries (SSI). Considering the

importance of small scale industries bank has established 31 specialized branches to

finance exclusively such industries.

Keeping in tune with changing times and to provide its customers more efficient and

speedy service, the Bank has taken major initiative in the field of computerization. All the

Branches of the Bank have been computerized. The Bank has also launched aggressively

the concept of "Any Time, Any Where Banking" through the introduction of Centralized

Banking Solution (CBS) and over 2409 offices have already been brought under its

ambit. PNB also offers Internet Banking services in the country for Corporates as well as

individuals. Internet Banking services are available through all Branches of the Bank

networked under CBS. Another step taken by PNB in meeting the changing aspirations of

its clientele is the launch of its Debit card, which is also an ATM card.


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1.2Heritage

Established in 1895 at Lahore, undivided India, Punjab National Bank (PNB) has the

distinction of being the first Indian bank to have been started solely with Indian capital.

The bank was nationalized in July 1969 along with 13 other banks. From its modest

beginning, the bank has grown in size and stature to become a front-line banking

institution in India at present.

Now Punjab National Bank is one of the Big Four banks of India, along with State Bank

Of India, ICICI Bank and Bank Of Baroda. It is the third largest bank in India in terms of

asset size.

MissionBanking For The Unbanked

Vision 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 services

under one roof

Punjab National Bank is national bank with extended banking subsidiary in the UK, as

well as branches in Hong Kong, Dubai and Kabul.

Punjab National Bank

Head office- 7, Bhikaji Cama Place, New Delhi 110607

Tel: 011-26102303,011-23323654

Fax: 011-26196456,011-23711663

Email: :[email protected]

Website: :http://www.pnbindia.in

Owner(s) : Government of India

Founder : Lala Lajpat Rai
mailto:[email protected]://www.pnbindia.in/http://www.pnbindia.in/mailto:[email protected]


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Founded : Lahore (1895)

PNB operates in all states of India. Some geographical area where PNB branch is situated

in Agra, Delhi, Kerala, Amritsar, Chandigarh, Dehradun, Chennai, Faizabad, Hamirpur,

Indore etc.

Punjab National Bank was registered on 19 May 1894under the Indian Companies Act,

with its office in Anarkali Bazaar, Lahore but now the registered office is 7, Bhikaji

Cama Place, New Delhi.

1.3 Nature of business

Pnb has 2 aspects:

1.31 Banking - the process which acceptsdepositsand channels those deposits

intolending activities, either directly by loaning or indirectly throughcapital markets.A

bank links together customers that have capital deficits and customers with capital

surpluses.

1.32 Financial Service it includes locker facility, trading through demat account,

issuing debit card and credit card, insurance facility etc.

General Banking is the specific functional area in finance in which the bank is

operating.

1.4 Products

Various products are offered by Punjab National Bank.
http://en.wikipedia.org/wiki/Deposit_accounthttp://en.wikipedia.org/wiki/Deposit_accounthttp://en.wikipedia.org/wiki/Loanhttp://en.wikipedia.org/wiki/Capital_markethttp://en.wikipedia.org/wiki/Capital_markethttp://en.wikipedia.org/wiki/Loanhttp://en.wikipedia.org/wiki/Deposit_account


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1.41 Insurance

PNBpartnered with Met Life Inc. to form a Life Insurance Joint Venture in India called

PNB MetLife India Insurance Co. Ltd. The products of PNB MetLife are being sold with

trust of PNB under corporate agency arrangement with this insurance giant. Launch of

the PNB MetLife Partnership On 4th Feb 2013, in a glittering ceremony at the Taj

Mahal Hotel in Delhi, the partnership was launched by Shri P. Chidambaram, the

Honorable Union Minister of Finance, Govt. of India.

The Bank has made Tie-up with Oriental Insurance Co. Ltd. (OICL), a Public Sector

Undertaking, which offers variety of products e.g. Fire Insurance, Motor Vehicle

Insurance, marine insurance and misc. insurance policies like shop keepers policy

personal accident policy, health insurance policy, overseas travel insurance policy at a

competitive price with assured post sale services.

1.42 Debit Card

The PNB debit card is essentially an on-line product. It bears the master/RuPay logo on

the front. Master logo card in India and all over the world at all Master card enabled

ATMs and merchant establishments with POS machines and also over the internetfor e-

commerce transactions.

Types of debit card:

a.

Classic debit card

b. Platinum debit card

c. Mitra ATM card

d. Ru Pay debit and kisan card


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1.43 Credit Card

PNB Global is a truly international Credit Card which is welcomed at over 29 million

merchant establishments & 1 million Visa ATMs worldwide.

Types of credit card:

a. Platinum card

b. Gold card

c. Classic card

1.44 Corporate banking

Corporate can avail following

a. Loan against future lease rentals:

PNB has introduced a scheme for property owners having their property situated

in metro/urban/semi urban/rural centers.

b.

EXIM finance:

To offer efficient services to exporters and importers like per-shipment service,

inward or outward remittances, letter of credit etc PNB has set up connectivity

with customs department to facilitate payment or receipt of duty.

c. PNB Expo gold card for Exporters:

PNB issues gold card to exporters as per RBI guidelines. The scheme ensures

easy availability of export credit on best terms to credit worthy exporters.

1.45 Investment Banking

PNB Investment Services Limited, offers investment banking to cater both domestic and

international clients, apart from acting as consultants in execution of capital market deals,


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issue management services and advising on potential takeovers of brands, businesses and

assets. Also in the business plan is providing advice for corporate and capital structuring

and restructuring services.

1.46 Loans

A loan can be provided to both individuals as well as business enterprises for the purpose

of meeting business or personal needs. Personals needs would cover childrens higher

education, travel, daughters marriage, medical emergencies etc. loans, however, are not

available for speculative purpose.

Interest Rate

BPLR: 14%

Base Rate:10.25%

1.47 Wealth Management

In the present scenario, investors are looking for higher Returns and proper management

of their disposable funds. Life goals include buying a home, saving for a childrens

education or planning for retirement etc. Wealth Management Services is the process of

meeting an individuals life goals through the proper management of his finances. The

portfolio of the prospective clients shall be managed in line with achieving specific

investment objective. It is with this perspective Punjab National Bank has launched this

service.

1.48 Current Deposit Account

Current Deposit Account is very convenient product for frequent banking transactions by

individuals, firms, HUF, companies, institutions etc. there is no limit on number of


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transactions in such accounts and are most suitable for business operations. The product

is available at all branches.

1.49 Mutual Fund

In recent times MF have gained rapid popularity as a good investment vehicle and public

at large is attracted towards it. PNB has variety of schemes and income options offered

by mutual funds which can suit financial preferences of all classes of investors, be it

retail, corporate or institutional.

1.410 Gold Loan

PNB offers Loan against Gold Jewellery/Ornaments and gold coins. Facility available as

Demand Loan/Overdraft Even Loan upto Rs.10 Lacs for non-productive purposes which

can be repayable in 12 months.

1.411 Recurring Deposit Scheme

Low minimum monthly deposit amount of Rs.100 only. For the period of deposit ranging

from 6 months to 120 months. Loans against deposits available.

1.412 Tax Saver Scheme

Initial deposit of Rs.100 only or in multiplies thereof subject to maximum deposit of Rs.

1 Lac per year. For the minimum deposit period of 5 years and maximum of 10 years.

Rebate on Income Tax under Section 80c.

1.413 Pension Loan

Loan upto Rs 3 Lacs for pensioners drawing pension from PNB Bank. Overdraft facility

also available. To meet personal needs including medical expenses. No margin, no

processing fee. Quick and easy disbursal. East repayment upto 60 monthly installments.


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1.414 Advance Against Immovable Property

Loan for business purposes against mortgage of self occupied or vacant house or flat or

commercial property. Facility available in the shape of term loan on reducing DP basis.

Amount of finance : Rs. 10 Lacs to Rs. 100 Lacs. Repayment maximum 84 months.

1.415 Scheme for Financing to Traders

Scheme for financing stock in trade, book debts and other assets used in trade. Loan

available for construction or purchased or furnishing of shop or showroom. Attractive

rate of interest for retailers wholesalers, individuals and companies etc.

1.5 SIZE OF PNB

1.51Total manpower of Punjab National Bank was 65541 till March 2014.

CADRE MARCH 2013 MARCH 2014

NUMBER % NUMBER %

OFFICERS 23610 37.30 23811 36.33

CLERKS 25449 40.21 26864 40.98

SUB STAFF

(incl.PTS)

14233 22.49 14866 22.69

Total 63292 65541

Table 1: In terms of Manpower

1.52 Total earnings and assets:

Table 2: Earnings and assets

Particulars In INR In US$

Revenue 474 billion 8.7 billion

Total Assets 4.97 trillion 90.9 billion

Net Income 49.54 trillion 906 million


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1.6 Organization Structure of PNB:

Figure 5: Organizational Structure

The bank has introduced Grid/Committee system in credit sanction process wherein

every loan proposal falling within the vested powers of DGM and above is discussed in a

credit committee which on the merit of the case recommends the proposal to the

sanctioning authority. Such committee has been formed both at CO and ZO level. The

credit committee at CO includes GM Credit and CGM/GM-RMD. For credit proposals

falling within the vested power of CGM/GM, the credit committee at CO includes

DGM/AGM/Chief Manager-CD and DGM/AGM/Chief Manager RMD. The credit

administration division is to be assisted by Risk Management Division (RMD) and

Industry desk for risk vetting and techno-economic feasibility of credit proposal.

Board of

directors

CMD

ED

GM

(Credit)

GM (

NPA &Weak

Account)

GM

(Retail &lending)

GM

(Treasury)

DGM DGM

AGM AGM

Functional

head

AGM ......

DGM ......

GM

(IRMD)

GM

(Deposits)

GM

(Audit)FGM'S


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1.7 Position of PNB

PNB is second largest bank in India in terms of asset size and second largest in terms of

branches.

Table 3: position of PNB

1.8 Present Leaders

PRESENT LEADERSHIP DESIGNATION

Ms. Natasha HR Manager, North Circle, Rajendra

place.

Mr. Sachin Rathi Officer Manager, North Circle, Rajendra

place.

Ms. Vandana Credit Manager, North Circle, Civil Line.

Mr. Nitin Credit Manager, North Circle, Pitampura

Table 4: Present Leaders

Interacted:

With AGM: A. K. Roy , T. Badwal, M. P. Gupta

With Officers: Nitin Aggrawal, Mr. Mital, Sachin Rathi, Arora Trilok , Ravi Ji

With Clerks: Neena Gupta, Nidhi Grag, Vinita Sehgal.

Particular PNB SBI Bank Of Baroda Canara Bank

Number of branches

in India

5800 17000 4283 4600


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1.9 Sources of data

Data is collected from primary as well as secondary sources.

1.91 Primary Sources:Through observation and questionnaire.

1.92 Secondary Sources:Through internet, books, Reserve Bank of Indias guidelines,

PNB Pratibha [ magazine of Punjab National Bank], Past and Present Financial

Statements:

i. Balance Sheet

ii. Profitability Statements

Loan Policy and Internal Circulars of the bank reports, journals, Internal circulars.


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CHAPTER- 2

SWOT ANALYSIS OF THE COMPANY

2.1 Strength, Weakness, Opportunities And Threats of Punjab National Bank

Strength

a. Nationalised bank i.e. Government

Owned so this gives PNB an edge

over private banks in terms of

customer security.

b. Diversified operations with 5800

branches and 62,392 manpower.

c. Strong IT support with best fit

approach.

d. Schemes for small and medium

scale businesses.

e. One of the oldest bank thatswhy

customer loyality. PNB has

Diversified Portfolio consisting all

the products under its belt, which

help it to extend the relationship

with existing customers Bank and

attract new customers.

Weakness

a. Delay in policy implementation.

b. High government intervention so

less adaptive.

c. Inadequate advertising and

branding as compared to other

banks.

d. High interest rates.


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Opportunities

a. Small scale business banking across

India.

b. More expansion in other countries

for international banking.

c. Better customer services.

d. Special interest rate can be offered

at festive season

Threats

a. Economic crisis and economic

fluctuation.

b. Highly competitive environment.

c. Stringent banking norms by RBI

and government.

d. Innovative schemes from other

players. Consumer expectations

have increased many folds in last

few years and the bank has not been

responsive enough to meet them on

time.

Table 5: SWOT analysis


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2.12 ETOP

It is the acronym for environment threat and opportunity profile. It involves dividing the

environment into different sectors and then analyzing the impact of each sector on the

enterprise.

Environment threat and opportunity profile [ETOP] FOR PNB-

Environmental sector Impact of each sector

Social Customers now prefer online banking which leads to

increase in demand in debit card and credit card.

Economic Banking sector is the backbone of any economy therefore

good economy is the ideal opportunity and helps in

flourishing.

Regulatory PNB performs according to the guidelines of RBI so any

deviation is not allowed. If the norms are less Stringent

then bank can perform more effiently and can take first

mover advantage by grabing the opportunity.

Competitors High competition and innovative schemes from private

players is a threat to PNB.

Technology Technological upgradation plays an important role.

Computerized banking has reduced paper work and saved

time.

Table 6: ETOP analysis


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2.2 Best Policies Adopted By PNB

2.21 In Marketing

The effort to promote banking business is quite distinguished affair. At present, it has

become very tricky due to the changing trends of industry, increasing competition and

efficiency of regulatory environment, and the financial system.

This is the time when banks are offering new and innovative services, frequently in the

market. The content of promotional tools should help the customer in making most

valuable decision. This can be firmly said that well-designed promotional strategies are

very important to promote banking services effectively. In marketing any product or

service, customer satisfaction has been given the importance.

PNB launched several innovative, value-added products and services to project a

customer friendly image. It launched a special service for corporate customers called

'telebanking and remote login' to support transactional requests. This facility would be

available at 593 branches, and remote login at 269 branches. The banks trade finance

solutions, called EXIMBILLS, were intended to handle trade finance transactions

efficiently and enhance the range of services provided to corporate and network branches.

a. Segregating and targeting existing high value customers.

b. Setting up call centers and outbound sales force to secure new customers.

c. Aggressive marketing through print and television media.

d.

Festival bonaza tool of sales promotion is used by PNB bank on the ocassion of

DIWALI AND HOLI.

e. Advertisements are given in television and information is also given about

products.


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f. Road side canopies, hoardings, banners also used for marketing.

g. Social websites are also used for doing marketing of products & services of PNB

through festivals to promote their product and services.

h. Services offered by ing vysa bank through radio also.

i. Pop up ads.

2.22 In Human Resource

Skilled human resources are one of the most important pre-requisite for the efficient

management of a large and diverse retail credit portfolio. Punjab National Bank that it

should employee highly skilled and efficient employees for the betterment of the services.

a. Redesigning of branches so that employee and customer have good feeling for

which business process reengineering (BPR) team was constituted in June 2003

with McKinsey & company as consultants. The BPR's basic goal was to create an

operating architecture that would facilitate service delivery of international

standards.

b. Institution for advanced learning in Delhi and Lucknow is situated to provide state

of the art training in financial products to middle level and senior level executives.

c. Performance appraisal is conducted by self through a well defined structure so no

inequality and staffs are satisfied which leads to high motivation.

2.23 In Finance

The financial statements of Punjab national bank have been prepared on the historical

cost basis and conform, in all material aspects, to Generally Accepted Accounting

Principles (GAAP) in India which encompasses applicable statutory provisions,


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regulatory norms prescribed by Reserve Bank of India (RBI), Accounting Standards (AS)

and pronouncements issued by The Institute of Chartered Accountants of India (ICAI).

a. The Financial Statements have been prepared on the going concern basis with

accrual concept.

b. Fixed assets are stated at historical cost except those premises, which have been

revalued. The appreciation on revaluation is credited to revaluation reserve.

Depreciation on assets (including land where value is not separable) are provided

on straight-line method based on estimated life of the asset.

c.

Advances are classified as performing and non- performing assets; provisions are

made in accordance with prudential norms prescribed by RBI.

d. Investments have been categorized into Held to Maturity, Available for Sale and

Held for Trading in terms of RBI guidelines. Securities acquired by the Bank with

an intention to hold till maturity is classified under Held to Maturity.

e. Current tax is determined on the amount of tax payable in respect of taxable

income for the year and accordingly provision for tax is made.

f. Revenue recognition: Income / expenditure is generally accounted for on accrual

basis.

g. The Bank availed the service of M/s KPMG for carrying out the external audit of

risk management systems. The Bank has started conducting Group Risk

Management Committee meetings at quarterly intervals wherein representatives

from domestic or overseas subsidiaries participate.


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2.24 In Information Technology

a. The Bank has a robust credit risk framework and has placed credit risk rating

models on central server based system PNB TRAC, which provides a scientific

method for assessing credit risk rating of a client.

b. With Core Banking Solution (CBS) covering entire branch network, the Asset

Liability Management in respect of all assets and liabilities is being done on daily

basis.

c. PNB has also tied up with CIBIL which also helps in credit rating and shows a

particular persons history of loan taken and whether he was able to repay the loan

in time or he was a defaulter.

2.3Variation In Practice

2.31 In Human Resource

a. The process of recruitment of employees in PNB is through entrance test and

interview whereas in classroom we learn that it includes various steps through

which employees get select for the job.

b. In HR performance appraisal is conducted by self through a well defined

structure.

2.32 In Finance

a. The format of financial statements such as balance sheet, cash flow statement etc

taught in classroom is different from the format of organisation in current

scenario.

b. Current account ratio is considered 1.33 in PNB instead of 2:1 which was taught

in class.


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c. Long term source is used for long term use as well as part is used for short term

use. But short term fund is only used for short term use.

Fig 6: Usage of funds.


In IT finacle core banking is used to know the loan amount paid for a particular month,

assets and liability can seen etc.

a. PNB trac is used for credit rating:

SCORES OBTAINED RATING DESCRIPTION

Above and 80.00 PNB AAA Minimum Risk

77.5-80.00 PNB AA+

Marginal Risk72.5-77.5 PNBAA

70-72.5 PNB AA-

67.5-70 PNB A+

Modest Risk62.5-67.5 PNB A

60-62.5 PNB A-

57.5-60 PNB BB+

Long Term

Source

long termuse

shortterm use

Short Term

Source

only shortterm use.


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52.5-57.5 PNB BB Average Risk

50-52.5 PNB BB-

47.5-50 PNB B+

Marginal Acceptable Risk42.5-47.5 PNB B

40-42.5 PNB B-

30-40 PNB C High Risk

30 and below PNB D Caution

Table 7: PNB Rating


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CHAPTER3

DATA COLLECTION AND PRESENTATION

(A) Data Collection

3.1 In Marketing Department

Banks are offering new and innovative services, frequently in the market. The content of

promotional tools should help the customer in making most valuable decision. This can

be firmly said that well-designed promotional strategies are very important to promote

banking services effectively. In marketing any product or service, PNB launched several

innovative, value-added products and services to project a customer friendly image like

Corporate banking,Personal banking, Industrial financeAgricultural finance, Financing

of trade, International banking, Home loan, Auto loan, ATM/DEBIT Card, Deposit

Interest rates, Credit Interest rates, Other Services Locker Facilities, Senior Citizen

Schemes, Merchant Banking, Electronic Fund Transfer & Clearing Services, etc

3.11 Pricing Policy

Pricing Policy of Punjab National Bank is maintained by Reserve Bank of India. The

Reserve Bank of India has urged banks to follow a uniform, fair and transparent pricing

policy and not discriminate between customers at home branch and non-home branches.

In its 2013-14 monetary policy statement, the banking regulator has observed that some

banks were discriminating their own customers by levying a charge on products and

services, if the transaction is not done at the home branch.


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3.12 Joint Venture

a. Punjab National Bank is in a joint venture with Infosys for the implementation of

a Centralised Banking Solution for it. The bank plans to implement Centralised

Banking Solutions establishing connectivity between its branches to cover 1,500

to 2,000 branches and all ATMs by 2004.

b. PNB MetLife Insurance:

PNB MetLife India Insurance Company Limited (PNB MetLife) is a joint

venture where MetLife, Inc. and Punjab National Bank (PNB) are the majority

shareholders. PNB MetLife was previously known as MetLife India Insurance

Company Limited (MetLife India). MetLife India has been present in India since

2001. PNB MetLife provides a wide range of protection and retirement products

through its Agency sales of over 24,000 financial advisors and bank partners, and

provides access to Employee Benefit plans for over 800 corporate clients in

India.

c. Punjab National Bank has entered an agreement with Oriental Bank of

Commerce, Indian Bank, UTI Bank and Global Trust Bank for sharing ATMs

spread across the country.

3.13 Promotion

PNB is promoting through advertisement on television, newspaper, journals and

magazines, Outdoor Advertising Hoardings, online marketing etc but not using personal

selling, tele calling through sales man, gifts or prizes for customers.


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3.14 Customer Relation Management

Customer relationship management enables companies to provide excellence real-time

customer service through the effective use of individual account information.

PNB has been able to maintain its founding principles through more than 100 years of

change and continue to bring the most efficient service possible to its customers without

losing the friendliness and special attention they are used to receiving. A motto that is

used repeatedly in all PNB branches is "know your customers. According to Circle

Head, PNB Lucknow, Mr. B.L. Gupta Having the Right Offer For The Right Client,

At The Right Time Via The Right Channel.

It was a Strategy adopted In the Business Model of the Banks and Clearly Focused to

Value Generation.

The CRM helps the bank now to better retain existing customers by cross-selling and up-

selling, to attract new customers by offering various value added products and services,

and even convert loss making customers into profitable ones.

PNB also uses online trading services for customers. Now consumers can enjoy the

convenience of investing in financial products from the comfort of their home / offices by

using SMC Global's website, also online trading link in provided on pnb bank's website.

Benefits attained by PNB:

Higher customer retention, improved profits as compared to previous year profits,

improved efficiency between departments and increased loyalty as customer can file a

complaint against any officers through online and corrective actions is taken by circle

office.


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3.2 In Human Resource Department

3.21 Recruitment and Selection

Punjab National Bank invites online application forms from eligible IBPS PO Exam

qualified candidates for Recruitment of Probationary officers Staff to work its various

offices and branches all over India. A candidate with valid PO Score card and any

graduate degree is the required qualifications for Punjab National bank PO recruitment

Punjab National Bank Probationary officer salary consists of basic, DA, HRA, CCA,

Fixed personal allowance and Health benefits also included to employees.

Profit sharing plan is 1% of profit which is distributed through head office. Deductions

from salary are PF, TDS, Loan installment if any.

Applicant must have at least 21 years of age and not more than 30 years for OC/General,

20 to 34 years for OBC and 18 to 35 years for ST/ST Candidates as per the reference

date.

Punjab National Bank Selection process depends, applicant performance in Group

Discussion and Interview rounds. For that, need to fill the online application form by

paying the challan fee.

Highlights of Punjab National Bank PO Recruitment through IBPS:

a) Age Limit: 21 to 30 years

b) Education: Any graduation Degree

c) Salary: Rs.14500 to Rs.25700

d) Selection procedure: Group discussion and Interview together.


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e) Post Name: Punjab National bank PO Recruitment

3.22 Welfare

a.

PNB is having Good working environment as compared to other public sector

organization.

b. Working hours is 10a.m.5p.m. and there is no over time allowance offered.

c. Leave policy of PNB: 12 casual and privilege leave is every 11 days 1 sick leave

is allowed.

d. No transportation facility is provided unless for official purposes like meeting

clients or head office meeting.

e. For safety purpose smoke deductor is placed in every branch and other welfare

facility includes hospital facility, newspaper and books at home, pension benefits

and LTC is also provided.

3.23 Employee Grievance Redressal

PNB is using online grievance redressal naming PNB SAMADHAAN The employee

grievance redressal system, is being introduced with a view to lend an ear to the genuine

work-related and personal problems faced by the staff members which have a bearing on

their work, so that the same can be considered for resolution.

PNB SAMADHAN SCHEME TIME FRAME FOR REDRESSAL OF

GRIEVANCES OF STAFF MEMBERS

A formal system of redressal of genuine work-related and personal grievances of working

staff members PNB SAMADHAN has been introduced in the Bank and detailed


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guidelines in this regard have been issued to all offices vide HRDD Circular No. 408

dated 26.06.2007.

The said circular inter-alia provides that staff members may address their grievances

directly to the Chairman & Managing Director of the Bank, subject to fulfillment of

certain conditions. However, no grievance will be entertained at the CMDs Secretariat

until the same has been taken up and responded to by the concerned Regional Office /

Zonal Office / Head Office Division of the staff member.

3.24 Training And Development

a. Punjab National Bank that has tied up with a business School in Singapore to train

their middle and senior management on leadership skills. The banks are also

lining up incentives such as paid holidays abroad, leadership and training

programmes at top b-schools.

b. Freshers training for new joiners is carried out at circle office and facilities for

accommodation is given for attending external training programmes.

c. Promotion policy of PNB is after 3 years employee eligible can clear written and

interview exam.

d. Number of transfers:

CLERKafter every 5 Years

Officersafter every 3 Years


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3.3 In Finance Department

3.31For Balance sheet refer to annexure1

3.32 For Profit and loss statement refer to annexure 2


3.41 The Bank has a robust credit risk framework and has placed credit risk rating models

on central server based system PNB TRAC, which provides a scientific method for

assessing credit risk rating of a client.

3.42 With Core Banking Solution (CBS) covering entire branch network, the Asset

Liability Management in respect of all assets and liabilities is being done on daily basis.

3.43 PNB has also tied up with CIBIL which also helps in credit rating and shows a

particular persons history of loan taken and whether he was able to repay the loan in

time or he was a defaulter.

3.44 New IT Based Products/Services

a. Kiosk Banking Solution has been made live across the Bank and RRBs through

internet and intranet.

b. Automation of Fund Transfer Orders (FTOs) for MGNREGA has been

implemented in all RRBs.

c. Migration of Parvatiya Gramin Bank with Himachal Gramin Bank was

successfully completed.

d.

HORTNET Project: Customisation has been done for Maharashtra. Through this

portal, subsidy from horticulture department is being processed for Maharashtra

State.


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e. XOOM - RDA (Rupee Drawing Arrangement): The application is developed to

automate the payments of beneficiaries in India. The software makes total

automation of the payments, which was handled by IBB Branch manually.


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(B) Data Presentation

In finanace

RATIO ANALYSIS: as refered to annexure-A

3.21 Current Ratio- It used to determine a companys ability to pay off its shirt-terms

debts obligations. Generally, the higher the value of the ratio, the larger the margin of

safety that he company possesses to cover short-term debts.

Current ratio = current assets/current liability

The table shows, Current Ratioof both the year are as follows:

Particulars 31stMarch 2013 31

stMarch 2014

Current Ratio 1.57 1.59

Table 8: Current Ratio

In this table, we can see that the current ratio though has increased from 2013 to 2014.

This shows that, companys ability to meet its liabilities is 32 increasing. But still the

company has not reached 2:1which is a satisfactory ratio.

Fig 7: Current Ratio Analyses

1.56

1.565

1.57

1.575

1.58

1.585

1.59

1.595

31.03.2013 31.03.2014

CURRENT RATIO

CURRENT RATIO


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3.22 Quick ratio: It is also termed as Acid-Test Ratio. This ratio is ascertained by

comparing the liquid assets (i.e., assets which are immediately convertible in to cash

without much loss) to current liabilities. Prepaid expenses and stock are not taken as

liquid assets. This may be expressed as:

Liquid Assets

Quick Ratio =

Current Liabilities


stMarch 2014

Quick Ratio 22.40 25.19

Table 9: quick ratio

Fig 8: quick ratio

21

21.5

22

22.5

23

23.5

24

24.5

25

25.5

31.03.2013 31.03.2014

Quick Ratio

Quick Ratio


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31.03.2013 31.03.2014

DEBT-EQUITY RATIO 0.93 0.48

0

0.2

0.4

0.6

0.8

1

DEBT-EQUITY RATIO

3.23 Debt-Equity Ratio: This ratio expresses the relationship between long-term debts

and shareholders funds. This ratio is calculated to assess the ability of the firm to meet

its long term liabilities. Generally, debt-equity ratio of 2:1is considered safe. Higher the

ratio more risk is there, and lower the ratio better it is. The formula of the ratio is:

Debt equity ratio = Debt or long term loans

Shareholders funds or Net worth

The table shows, Debt-equity ratioof both the year are as follows:

Particulars 31stMarch 2013 31stMarch 2014

Debt-Equity Ratio 0.93:1 0.48:1

Table 10: Debt- Equity Ratio

In this table, we can see that the Debt-equity ratio has decreased from 2013 to 2014 to

0.45. This provides sufficient protection to long-term lenders.

1)

Fig 9: Debt Equity Ratio Analysis


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3.24 Net working capital: This shows the difference between current assets and current

liabilities. Working capital is required to meet the day to day expenses. In order to

survive a company must make a proportion of working capital to meet the expenses. The

formula of working capital is:

Net Working capital= Current assetsCurrent liabilities

The table shows the change in working capital:


stMarch 2014

Net working capital 44318705.64 235175637

Table 11: Working Capital

The above table shows that, the working capital has increased from 2013 to 2014. This

shows that, company have sufficient capital to meet its daily expenses.

Fig 10: Working Capital Analysis

0

50000000

100000000

150000000

200000000

250000000

31.03.2

013

31.03.2

014

NET WORKING CAPITAL 44318705.64 235175637

NET WORKING CAPITAL


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3.25 Earnings per Share:

The profitability of the firm from the point of view of ordinary shareholders can bemeasured in terms of number of equity shares. This is known as Earnings per Share. It is

calculated as follows:

Net Profit after Tax

Earnings per Share=

No. of Equity Shares outstanding

Particulars 31stMarch 2013 31stMarch 2014

Earnings per share 134.31 92.32

Table 12: EPS

Fig 11: EPS

0

20

40

60

80

100

120

140

160

31.03.13 31.03.14

Earning Per Share

Earning Per Share


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3.26 Current assets: Current assets of the company have increased from 2013 to 2014.

The formula to calculate the ratio is:

Current assets = Working capital + Current liabilities

The table shows the change in current assets:


stMarch 2014

Current Assets 148257884.57 335953587.78

Table 13: Current Assets

The above table shows the change in current assets which is increasing, it means

company is in a good position and is earning profits.

Fig 12: Current Assets Analyses

3.27 Current Liabilities: Current liabilities of the company have decreased from 2013 to

2014. The formula to calculate the ratio is:

31.03.2013 31.03.2014

CURRENT ASSETS 148257884.6 335953587.8

0

50000000

100000000

150000000

200000000

250000000

300000000

350000000

400000000

CURRENT ASSETS


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Current liabilities = Current assetsWorking capital

The table shows the change in current liabilities:


stMarch 2014

Current liabilities 8189460 32535892.69

Table 14: Current Liabilities

The above table shows that, the current liabilities are decreasing; it means a company is

earning sufficient to pay its liabilities.

Fig 13: Current Liabilities Analyses

31.03.2013 31.03.2014

CURRENT LIABILITIES 32535892.69 8189460

0

5000000

10000000

15000000

20000000

25000000

30000000

35000000

CURRENT LIABILITIES


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3.28 Capital: Capital has increased in the company from 2013 to 2014. Capital can be

both authorized share capital.

Year Capital

March 2014362.07

March 2013 353.47

March 2012 339.18

March 2011 316.81

Table 15: Capital

Fig 14: Capital

290

300

310

320

330

340

350

360

370

Jan/11 Jan/12 Jan/13 Jan/14

Capital


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3.29 Profits earned: as refered to annexure-B

Profits that have earned during various year:

Year Profits earned

March 20143342.58

March 2013 4747.67

March 2012 4884.2

March 2011 4433.50

Fig 15: profit earned

Profits earned 2014 is less than as compared to previous years.

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Jan/11 Jan/12 Jan/13 Jan/14

Profits earned


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c. Growing Competition

Increased completion is being faced by the Indian banking industry from within the

system with other agencies both, local and foreign, offering value added services.

Competition is no more confined to resource mobilization but also to lending and other

areas of banking activity. The foreign commercial bank with their superior technology,

speed in operations and imaginative positioning of their services has also provided the

necessary impetus to the Indian banks to innovate and complete in the market place.

4.2In Human Resource

A business unit needs employees to look after different activities. This is called

manpower or human resource. Such human resource needs to be developed fully so that it

will make positive contribution for the progress and prosperity of a business unit. For this

systematic development and management of human resources is necessary.

The Human Resource field in the Banking Industry is considered as one of the process of

discovery and transformation. The field of Human Resource can be described as

emergent and dynamic within the cultural business aspect in a Banking Industry. The

success of todaysbanking business will sparsely depends on the human resources of the

organization, in which plays a crucial role in providing the services needed.

Responsibilities:

a. To be the principal sponsor & guardianof HR policies in the Bank.

b. To propose & obtain agreement on changes to these policies from time to time &

to ensure that policies which have been agreed are being implemented throughout

the Bank.


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c. To contribute fully to the task of meeting the business challenges which the bank

has to face by supporting Branch/Unit Managers in continuously developing the

potential of employees & in creating conditions in which all the employees are

motivated to meet the objectives of the Bank.

d. To continuously monitor the Banks strategies to ensure that HR policies are

appropriate & that employee numbers & skills are fully supportive of such

strategies.

e. To support line management in their day-to-day management of the workforce by

providing advice & consultancy on personnel & performance management issues.

4.3 In Finance

a. The financial statements of Punjab national bank have been prepared on the

historical cost basis and conform, in all material aspects, to Generally Accepted

Accounting Principles (GAAP) in India.

b. The Financial Statements have been prepared on the going concern basis with

accrual concept.

c. Current ratio though has decreased from 2013 to 2014. This shows that,

companys ability to meet its liabilities is less.

d. Capital has increased in the company from 353.47 in 2013 to 362.07 in 2014.

e. Profits has decreased in 2014 as compared to previous year due to growing

competition.

f. Availability of cash balance is 45218.45 in 2014 which is more than 27135.38 in

2013.


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g. Revenue recognition: Income / expenditure is generally accounted for on accrual

basis.


Indian public sector banks that hold around 75 % of market share do have taken

initiative in the field of IT. As far as banking industry in India is concerned it can be

said that although the Indian banks may not be as technologically advanced as their

counterparts in the developed world, they are following the majority of international

trends on the IT front. The strength of Indian banking lie in withering storms and rising

up to the expectations from all the quarters-catching up with all the global trends is a

matter of time.

Introduction of PNB TRAC, Core banking solution[ CBS ] and tie up with CIBIL

increased the efficiency of PUNJAB NATIONAL BANK. And many new technologies

are also there.


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CHAPTER 5

SUMMARY AND CONCLUSION

A. Findings/Results

India's second largest public sector lender Punjab National Bank (PNB) acquired 30 per

cent stake in Metlife India Insurance Co. Ltd. This shows the financial stability.

Banks are using all the techniques in IT Department to analyse operational risk

management or measurement.

a.

Banks are very optimistic about preparation of accounting books

b. Banks are ready to improvement their existing risk management framework.

c. Banks are following the guidelines of Basel III and ithelp them to deal with

risk more effectively.

B. Practical knowledge

a. How to open an account and what are the documents required for opening an

account.

b. Study about three types of retail loans i.e. education loan, home loan & auto loan,

and what are the formalities to sanction these loans.

c. How to analyze the balance sheet and income statement of PNBs loan customer

to know the financial position of the company in order to know that the company

is able to pay the loan or not.

d. Credit Information Bureau (India) ltd (CIBIL): CIBIL collects and maintains

records of an individuals payments pertaining to loans and credit cards. These

records are submitted to CIBIL by member banks and credit institutions, on a


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monthly basis. This information is then used to create Credit Information Reports

(CIR) and credit scores which are provided to credit institutions in order to help

evaluate and approve loan applications.

e. How to do Crediting Rating in order to know which company is more risky and

which one is less risky. PNB sanction loan to that company which is less risky.

For this PNB use PNB TRAC in which Different types of credit rating are: AAA,

AA, A+, A-, BB, B-, C, D, E.

C. Limitations:

a.

Delay in policy implementation.

b. High government intervention so less adaptive. Therefore cant take first mover

advantage.

c. Inadequate advertising and branding as compared to competitors.

d. Information collected is not from all branches because of different geographical

location so that is a hindrance.

D. Suggestions:

a. The management must commit itself to allocate major resources and adequate

time to training.

b. Ensure that training contribute to competitive strategies of the firm. Different

strategies need different HR skill for implementation. Let training help employees

at all levels acquire the needed skill.

c. Ensure that there is proper linkage among organizational, operational and

individual training needs.


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d. Services provided to the customers need to be improved, as customers are not

handling properly.

e. Proper name plates should be there in front of every desk so that customers dont

get confused where they have to go.

f. Excess of paper work for this Electronic database should be designed carrying all

the available and important information related to the proposals accepted.

g. More advertising and promotion should be made to increase awareness among

customers about the product and services offered by PNB and market share.


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Bibliography

Chhabra T.N. (2011), Marketing Management, Dhanpat Rai & Co., New Delhi,

pp-1.159-1.167

Gupta C.B. (2011), Business Organisation and Management, Mayur Paperbacks,

New Delhi,pp-19.6-19.9

Macmillan Publication, Risk Management, edition 1, CAIIB 2010

PNB Pratibha (2012), PNB staff journal, Vol 53, No.3, pg 9-10

Websites

http://www.moneycontrol.com/india/stockpricequote/bankspublicsector/punjabnat

ionalbank/PNB05 downloaded on 28.06.2014

http://www.moneycontrol.com/news-topic/punjab national bank/ downloaded on

20.07.2014

www.google.com

https://www.pnbindia.in/En/ui/CorporateMission.aspx downloaded on 19.06.2014

http://www.moneycontrol.com/annual-report/punjabnationalbank/accounting-

policy/PNB05

http://pnbindia.in/new/Upload/English/Financials/PDFs/Analyst_ppt_June_13.pdf
http://www.moneycontrol.com/news-topic/punjab%20national%20bank/%20downloaded%20on%2020.07.2014http://www.moneycontrol.com/news-topic/punjab%20national%20bank/%20downloaded%20on%2020.07.2014http://www.moneycontrol.com/news-topic/punjab%20national%20bank/%20downloaded%20on%2020.07.2014http://www.moneycontrol.com/news-topic/punjab%20national%20bank/%20downloaded%20on%2020.07.2014http://www.moneycontrol.com/news-topic/punjab%20national%20bank/%20downloaded%20on%2020.07.2014http://www.google.com/http://www.google.com/http://www.moneycontrol.com/annual-report/punjabnationalbank/accounting-policy/PNB05http://www.moneycontrol.com/annual-report/punjabnationalbank/accounting-policy/PNB05http://www.moneycontrol.com/annual-report/punjabnationalbank/accounting-policy/PNB05http://www.moneycontrol.com/annual-report/punjabnationalbank/accounting-policy/PNB05http://www.moneycontrol.com/annual-report/punjabnationalbank/accounting-policy/PNB05http://pnbindia.in/new/Upload/English/Financials/PDFs/Analyst_ppt_June_13.pdfhttp://pnbindia.in/new/Upload/English/Financials/PDFs/Analyst_ppt_June_13.pdfhttp://pnbindia.in/new/Upload/English/Financials/PDFs/Analyst_ppt_June_13.pdfhttp://www.moneycontrol.com/annual-report/punjabnationalbank/accounting-policy/PNB05http://www.moneycontrol.com/annual-report/punjabnationalbank/accounting-policy/PNB05http://www.google.com/http://www.moneycontrol.com/news-topic/punjab%20national%20bank/%20downloaded%20on%2020.07.2014http://www.moneycontrol.com/news-topic/punjab%20national%20bank/%20downloaded%20on%2020.07.2014


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AnnexureA

Refer Para no.3.21

Balance sheet of Punjab National Bank

------------------- in Rs. Cr. -------------------

Mar '14 Mar '13 Mar '12 Mar '11

12 mths 12 mths 12 mths 12 mths

Capital and Liabilities:

Total Share Capital 362.07 353.47 339.18 316.81

Equity Share Capital 362.07 353.47 339.18 316.81

Share Application Money 0.00 0.00 0.00 0.00

Preference Share Capital 0.00 0.00 0.00 0.00Reserves 35,533.25 32,323.43 27,477.89 21,191.75

Revaluation Reserves 0.00 0.00 0.00 0.00

Net Worth 35,895.32 32,676.90 27,817.07 21,508.56

Deposits 451,396.75 391,560.06 379,588.48 312,898.73

Borrowings 48,034.41 39,620.92 37,264.27 31,589.69

Total Debt 499,431.16 431,180.98 416,852.75 344,488.42

Other Liabilities & Provisions 15,093.44 15,019.15 13,524.18 12,328.27

Total Liabilities 550,419.92 478,877.03 458,194.00 378,325.25

Mar '14 Mar '13 Mar '12 Mar '11

12 mths 12 mths 12 mths 12 mths

AssetsCash & Balances with RBI 22,245.58 17,886.25 18,492.90 23,776.90

Balance with Banks, Money at Call 22,972.87 9,249.13 10,335.14 5,914.32

Advances 352,688.87 308,725.21 293,774.76 242,106.67

Investments 140,365.76 129,896.19 122,629.47 95,162.35

Gross Block 3,419.74 3,357.68 3,168.86 3,105.60

Accumulated Depreciation 0.00 0.00 0.00 0.00

Net Block 3,419.74 3,357.68 3,168.86 3,105.60

Capital Work In Progress 0.00 0.00 0.00 0.00

Other Assets 8,727.10 9,762.58 9,792.88 8,259.42

Total Assets 550,419.92 478,877.04 458,194.01 378,325.26

Contingent Liabilities 238,008.93 231,810.55 224,750.05 138,915.26Bills for collection 0.00 0.00 0.00 0.00

Book Value (Rs) 991.39 924.45 820.13 678.91


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