Beruflich Dokumente
Kultur Dokumente
ON
BBA(Gen.)
Rajesh.S.Pyngavil
SUBMITTED BY:
AAKASH SAXENA
(2006-2009)
Chapter-1
Introduction
Chapter 1
General Introduction
Bank may be defined as a financial institution which is engaged in the business of keeping
money for savings and checking accounts or for exchange or for issuing loans and credit etc.
A set of services intended for private customers and characterized by a higher quality than the
services offered to retail customers.
Based on the notion of tailor-made services, it aims to offer advice on investment, inheritance
plans and provide active support for general transactions and the resolution of asset-related
problems.
The essential function of a bank is to provide services related to the storing of deposits and
the extending of credit.Basic function may include Credit collection, Issuer of banking notes,
Depositor of money and lending loans.
Now a days banking is not in its traditional way , with the advancement of technology its
focusing on more comfort of customer providing services such as:
online banking
investment banking
electronic banking
internet banking
pc banking /mobile banking
e-banking
The importance of banking sector is immense in the progress and prosperity of any State or
country.
A Brief History
Banking in India originated in the last decades of the 18th century. The oldest bank in
existence in India is the State Bank of India, a government-owned bank that traces its origins
back to June 1806 and that is the largest commercial bank in the country. Central banking is
the responsibility of the Reserve Bank of India, which in 1935 formally took over these
responsibilities from the then Imperial Bank of India, relegating it to commercial banking
functions. After India's independence in 1947, the Reserve Bank was nationalized and given
broader powers. In 1969 the government nationalized the 14 largest commercial banks; the
government nationalized the six next largest in 1980.
Currently, India has 88 scheduled commercial banks (SCBs) - 27 public sector banks (that is
with the Government of India holding a stake), 31 private banks (these do not have
government stake; they may be publicly listed and traded on stock exchanges) and 38 foreign
banks. They have a combined network of over 53,000 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
Banking in India originated in the last decades of the 18th century. The first banks were The
General Bank of India, which started in 1786, and the Bank of Hindustan, both of which are
now defunct. The oldest bank in existence in India is the State Bank of India, which
originated in the Bank of Calcutta in June 1806, which almost immediately became the Bank
of Bengal. This was one of the three presidency banks, the other two being the Bank of
Bombay and the Bank of Madras, all three of which were established under charters from the
British East India Company. For many years the Presidency banks acted as quasi-central
banks, as did their successors. The three banks merged in 1925 to form the Imperial Bank of
India, which, upon India's independence, became the State Bank of India.
Indian merchants in Calcutta established the Union Bank in 1839, but it failed in 1848 as a
consequence of the economic crisis of 1848-49. The Allahabad Bank, established in 1865 and
still functioning today, is the oldest Joint Stock bank in India. It was not the first though. That
honor belongs to the Bank of Upper India, which was established in 1863, and which
survived until 1913, when it failed, with some of its assets and liabilities being transferred to
the Alliance Bank of Simla.
When the American Civil War stopped the supply of cotton to Lancashire from the
Confederate States, promoters opened banks to finance trading in Indian cotton. With large
exposure to speculative ventures, most of the banks opened in India during that period failed.
The depositors lost money and lost interest in keeping deposits with banks. Subsequently,
banking in India remained the exclusive domain of Europeans for next several decades until
the beginning of the 20th century.
Foreign banks too started to arrive, particularly in Calcutta, in the 1860s. The Comptoire
d'Escompte de Paris opened a branch in Calcutta in 1860, and another in Bombay in 1862;
branches in Madras and Pondichery, then a French colony, followed. HSBC established itself
in Bengal in 1869. Calcutta was the most active trading port in India, mainly due to the trade
of the British Empire, and so became a banking center.
The first entirely Indian joint stock bank was the Oudh Commercial Bank, established in
1881 in Faizabad. It failed in 1958. The next was the Punjab National Bank, established in
Lahore in 1895, which has survived to the present and is now one of the largest banks in
India.
Around the turn of the 20th Century, the Indian economy was passing through a relative
period of stability. Around five decades had elapsed since the Indian Mutiny, and the social,
industrial and other infrastructure had improved. Indians had established small banks, most of
which served particular ethnic and religious communities.
The presidency banks dominated banking in India but there were also some exchange banks
and a number of Indian joint stock banks. All these banks operated in different segments of
the economy. The exchange banks, mostly owned by Europeans, concentrated on financing
foreign trade. Indian joint stock banks were generally under capitalized and lacked the
experience and maturity to compete with the presidency and exchange banks. This
segmentation let Lord Curzon to observe, "In respect of banking it seems we are behind the
times. We are like some old fashioned sailing ship, divided by solid wooden bulkheads into
separate and cumbersome compartments."
The period between 1906 and 1911, saw the establishment of banks inspired by the Swadeshi
movement. The Swadeshi movement inspired local businessmen and political figures to
found banks of and for the Indian community. A number of banks established then have
survived to the present such as Bank of India, Corporation Bank, Indian Bank, Bank of
Baroda, Canara Bank and Central Bank of India.
The fervor of Swadeshi movement lead to establishing of many private banks in Dakshina
Kannada and Udupi district which were unified earlier and known by the name South
Canara ( South Kanara ) district. Four nationalised banks started in this district and also a
leading private sector bank. Hence undivided Dakshina Kannada district is known as "Cradle
of Indian Banking".
The period during the First World War (1914-1918) through the end of the Second World
War (1939-1945), and two years thereafter until the independence of India were challenging
for Indian banking. The years of the First World War were turbulent, and it took its toll with
banks simply collapsing despite the Indian economy gaining indirect boost due to war-related
economic activities. At least 94 banks in India failed between 1913 and 1918 as indicated in
the following table:
1913 12 274 35
1915 11 56 5
1916 13 231 4
1917 9 76 25
1918 7 209 1
Post-independence
The partition of India in 1947 adversely impacted the economies of Punjab and West Bengal,
paralyzing banking activities for months. India's independence marked the end of a regime of
the Laissez-faire for the Indian banking. The Government of India initiated measures to play
an active role in the economic life of the nation, and the Industrial Policy Resolution adopted
by the government in 1948 envisaged a mixed economy. This resulted into greater
involvement of the state in different segments of the economy including banking and finance.
The major steps to regulate banking included:
• In 1948, the Reserve Bank of India, India's central banking authority, was
nationalized, and it became an institution owned by the Government of India.
• In 1949, the Banking Regulation Act was enacted which empowered the Reserve
Bank of India (RBI) "to regulate, control, and inspect the banks in India."
• The Banking Regulation Act also provided that no new bank or branch of an existing
bank could be opened without a license from the RBI, and no two banks could have
common directors.
However, despite these provisions, control and regulations, banks in India except the State
Bank of India, continued to be owned and operated by private persons. This changed with the
nationalisation of major banks in India on 19 July, 1969.
Nationalization of Banks
By the 1960s, the Indian banking industry has become an important tool to facilitate 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 nationalise the banking industry. Indira
Gandhi, the-then Prime Minister of India expressed the intention of the GOI in the annual
conference of the All India Congress Meeting in a paper entitled "Stray thoughts on Bank
Nationalisation." The paper was received with positive enthusiasm. Thereafter, her move was
swift and sudden, and the GOI issued an ordinance and nationalised the 14 largest
commercial banks with effect from the midnight of July 19, 1969. Jayaprakash Narayan, a
national leader of India, described the step as a "masterstroke of political sagacity." Within
two weeks of the issue of the ordinance, the Parliament passed the Banking Companies
(Acquisition and Transfer of Undertaking) Bill, and it received the presidential approval on 9
August, 1969.
A second dose of nationalization of 6 more commercial banks followed in 1980. The stated
reason for the nationalization was to give the government more control of credit delivery.
With the second dose of nationalization, the GOI controlled around 91% of the banking
business of India. Later on, in the year 1993, the government merged New Bank of India with
Punjab National Bank. It was the only merger between nationalized banks and resulted in the
reduction of the number of nationalised banks from 20 to 19. 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.
The nationalized banks were credited by some, including Home minister P. Chidambaram, to
have helped the Indian economy withstand the global financial crisis of 2007- 009
In the early 1990s, the then Narsimha Rao government embarked on a policy of
liberalization, licensing a small number of private banks. These came to be known as New
Generation tech-savvy banks, and included Global Trust Bank (the first of such new
generation banks to be set up), which later amalgamated with Oriental Bank of Commerce,
Axis Bank(earlier as UTI Bank), ICICI Bank and HDFC Bank. This move, along with the
rapid growth in the economy of India, revitalized the banking sector in India, which has seen
rapid growth with strong 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, where all Foreign Investors in banks may be given
voting rights which could exceed 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 this time, were
used to the 4-6-4 method (Borrow at 4%;Lend at 6%;Go home at 4) of functioning. The new
wave ushered in a modern outlook and tech-savvy methods of working for traditional
banks.All this led to the retail boom in India. People not just demanded more from their
banks but also received more.
Currently (2007), banking in India is generally fairly mature in terms of supply, product
range and reach-even though reach in rural India still remains a challenge for the private
sector and foreign banks. In terms of quality of assets and capital adequacy, Indian banks are
considered to have clean, strong and transparent balance sheets relative to other banks in
comparable economies in its region. The Reserve Bank of India is an autonomous body, with
minimal pressure from the government. The stated policy of the Bank on the Indian Rupee is
to manage volatility but without any fixed exchange rate-and this has mostly been true.
With the growth in the Indian economy expected to be strong for quite some time-especially
in its services sector-the demand for banking services, especially retail banking, mortgages
and investment services are expected to be strong. One may also expect M&As, takeovers,
and asset sales.
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 time an investor has
been allowed to hold more than 5% in a private sector bank since the RBI announced norms
in 2005 that any stake exceeding 5% in the private sector banks would need to be vetted by
them.
In recent years critics have charged that the non-government owned banks are too aggressive
in their loan recovery efforts in connection with housing, vehicle and personal loans. There
are press reports that the banks' loan recovery efforts have driven defaulting borrowers to
suicide.
American Banks
Australian Banks
• Commonwealth Bank
• National Bank Australia
• Westpac Banking Corporation
Austrian Banks
Belgian Banks
• Fortis Bank.
• K.B.C. Bank N.V.
Canadian Banks
UAE Banks
French Banks
German Banks
Irish Banks
• DEPFA Bank
Italian Banks
• Banca di Roma
• Banca Populare Di Verona E Novara
• Banca Popolare di Vicenza
• BPU Banca –Banche Popolari Unite
• Monte Dei Paschi Di Sienna
• Sanpaolo IMI Bank
• Uni Credito Italiano
Nepalese Banks
• Everest Bank
Portuguese Banks
Russian Banks
• Vnesheconombank
• VTB India
• Promsvyazbank
• Wori Bank
Spanish Banks
• Banco de Sabadell
• Banco Bilbao Vizcaya Argentaria
SriLankan Banks
Swiss Banks
• UBS
• Zurcher Kantonalbank
• Saqib Saeed Qureshi
Financial sector reforms were initiated as part of overall economic reforms in the country
and wide ranging reforms covering industry, trade, taxation, external sector, banking and
financial markets have been carried out since mid 1991. A decade of economic and
financial sector reforms has strengthened the fundamentals of the Indian economy and
transformed the operating environment for banks and financial institutions in the country.
The sustained and gradual pace of reforms has helped avoid any crisis and has actually
fuelled growth. As pointed out in the RBI Annual Report 2001-02, GDP growth in the 10
years after reforms i.e. 1992-93 to 2001-02 averaged 6.0% against 5.8% recorded during
1980-81 to 1989-90 in the pre-reform period. The most significant achievement of the
financial sector reforms has been the marked improvement in the financial health of
commercial banks in terms of capital adequacy, profitability and asset quality as also
greater attention to risk management. Further, deregulation has opened up new
opportunities for banks to increase revenues by diversifying into investment banking,
insurance, credit cards, depository services, mortgage financing, securitisation, etc. At the
same time, liberalisation has brought greater competition among banks,both domestic and
foreign, as well as competition from mutual funds, NBFCs, post office, etc. Post-WTO,
competition will only get intensified, as large global players emerge on the scene.
Increasing competition is squeezing profitability and forcing banks to work efficiently on
shrinking spreads. A positive fallout of competition is the greater choice available to
consumers,and the increased level of sophistication and technology in banks. As banks
benchmark themselves against global standards, there has been a marked increase in
disclosures and transparency in bank balance sheets as also greater focus on corporate
governance.
Some of the major reform initiatives in the last decade that have changed the face of the
Indian banking and financial sector are:
• Interest rate deregulation. Interest rates on deposits and lending have been deregulated
with banks enjoying greater freedom to determine their rates.
• New private sector banks have been set up and foreign banks permitted to expand their
operations in India including through subsidiaries. Banks have also been allowed to set up
Offshore Banking Units in Special Economic Zones.
• New areas have been opened up for bank financing: insurance, credit cards,
infrastructure financing, leasing, gold
banking, besides of course investment banking, asset management, factoring, etc.
• New instruments have been introduced for greater flexibility and better risk
management: e.g. interest rate swaps, forward rate agreements, cross currency forward
contracts, forward cover to hedge inflows under foreign direct investment, liquidity
adjustment facility for meeting day-to-day liquidity mismatch.
• Several new institutions have been set up including the National Securities Depositories
Ltd., Central Depositories Services Ltd., Clearing Corporation of India Ltd., Credit
Information Bureau India Ltd. • Limits for investment in overseas markets by banks,
mutualfunds and corporates have been liberalised. The overseas investment limit for
corporates has been raised to 100% of net worth and the ceiling of $100 million on
prepayment of external commercial borrowings has been removed. MFs and corporates
can now undertake FRAs with banks. Indians allowed to maintain resident foreign
currency (domestic) accounts. Full convertibility for deposit schemes of NRIs introduced.
• Universal Banking has been introduced. With bankspermitted to diversify into long-
term finance and DFIs into working capital, guidelines have been put in place for the
evolution of universal banks in an orderly fashion.
• Technology infrastructure for the payments and settlement system in the country has
been strengthened with electronic funds transfer, Centralised Funds Management
System,Structured Financial Messaging Solution, Negotiated Dealing System and move
towards Real Time Gross Settlement.
• Adoption of global standards. Prudential norms for capital adequacy, asset
classification, income recognition and provisioning are now close to global standards.
RBI has introduced Risk Based Supervision of banks (against the traditional transaction
based approach). Best international practices in accounting systems, corporate
governance,payment and settlement systems, etc. are being adopted.
• Credit delivery mechanism has been reinforced to increase the flow of credit to priority
sectors through focus on micro credit and Self Help Groups. The definition of priority
sector has been widened to include food processing and cold storage, software upto Rs 1
crore, housing above Rs 10 lakh,selected lending through NBFCs, etc.
• RBI guidelines have been issued for putting in place risk management systems in banks.
Risk Management
Committees in banks address credit risk, market risk and operational risk. Banks have
specialised committees to measure and monitor various risks and have been upgrading
their risk management skills and systems.
• The limit for foreign direct investment in private banks has been increased from 49% to
74% and the 10% cap on
voting rights has been removed. In addition, the limit for foreign institutional investment
in private banks is 49%.
• Wide ranging reforms have been carried out in the area of capital markets. Fresh
investment in CPs, CDs are allowed only in dematerialised form. SEBI has reduced the
settlement cycle from T+3 to T+2 from April 1, 2003 i.e. settlement of stock deals will be
completed in two trading days after the trade is executed, taking the Indian stock trading
system ahead of some of the developed equity markets. Stock exchanges will set up trade
guarantee funds. Retail trading in Government securities has been introduced on NSE and
BSE from January 16, 2003. A Serious Frauds Office is proposed to be set up. Fungibility
of ADRs and GDRs allowed.
There is no doubt that banking sector reforms have increased the profitability,
productivity and efficiency of banks. There has been an improvement in overall capital
adequacy of banks and as on March 31, 2002 92 out of 97 commercial banks operating in
India had capital adequacy above the statutory minimum level of 9%. Introduction of
prudential norms relating to asset classification, income recognition and provisioning,
along with legal and institutional reforms, has led to visible improvement in asset quality
in banks. Net NPAs (i.e.that portion of NPAs which is not provided for) have declined
gradually from 10.7% in 1994-95 to 5.8% in 2001-02.Increase in the number of players
has increased competition, which is reflected in the decline in the bank concentration
ratio. The share of top 5 banks in total assets declined from 51.7% in 1991-92 to 43.5% in
2001-02 while its share in
profits fell from 54.5% to 41.4% in the same period.
benchmark rates (LIBOR 1 year) since the mid-1990s, suggesting increased integration of
the Indian banking sector with the rest of the world.
Challenges Ahead
skills and retraining staff, developing a cadre of specialists and introducing technology
driven management information systems.
Chapter-2
Organization’s
Profile
Organization’s Profile
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 nationalised 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.
A professionally managed bank with a successful track record of over
110 years.
Strategic business area covers the large Indo-Gangetic belt and the
metropolitan centres.
Ranked as 248th biggest bank in the world by Bankers Almanac ,
London.
Strong correspondent banking relationships with more than 217
international banks of the world.
More than 50 renowned international banks maintain their Rupee
Accounts with PNB.
Well equipped dealing rooms; 20 different foreign currency accounts are
maintained at major centres all over the globe.
Rupee drawing arrangements with M/s UAE Exchange Centre, UAE,
M/s Al Fardan Exchange Co. Doha, Qatar,M/s Bahrain Exchange Co,
Kuwait, M/s Bahrain Finance Co, Bahrain,M/s Thomas Cook Al
Rostamani Exchange Co. Dubai,UAE, and M/s Musandam Exchange,
Ruwi, Sultanate of Oman.
With over 38 million satisfied customers and 4668 offices, PNB has continued to retain its
leadership position among the nationalized banks. The bank enjoys strong fundamentals,
large franchise value and good brand image. Besides being ranked as one of India's top
service brands, PNB has remained fully committed to its guiding principles of sound and
prudent banking. Apart from offering banking products, the bank has also entered the credit
card & debit card business; bullion business; life and non-life insurance business; Gold coins
& asset management business, etc.
Since its humble beginning in 1895 with the distinction of being the first Indian bank to have
been started with Indian capital, PNB has achieved significant growth in business which at
the end of March 2009 amounted to Rs 3,64,463 crore. Today, with assets of more than Rs
2,46,900 crore, PNB is ranked as the 3rd largest bank in the country (after SBI and ICICI
Bank) and has the 2nd largest network of branches (4668 including 238 extension counters
and 3 overseas offices).During the FY 2008-09, with 39% share of low cost deposits, the
bank achieved a net profit of Rs 3,091 crore, maintaining its number ONE position amongst
nationalized banks. Bank has a strong capital base with capital adequacy ratio as per Basel II
at 14.03% with Tier I and Tier II capital ratio at 8.98% and 5.05% respectively as on
March’09. As on March’09, the Bank has the Gross and Net NPA ratio of only 1.77% and
0.17% respectively. During the FY 2008-09, its’ ratio of priority sector credit to adjusted net
bank credit at 41.53% & agriculture credit to adjusted net bank credit at 19.72% was also
higher than the respective national goals of 40% & 18%.
PNB has always looked at technology as a key facilitator to provide better customer service
and ensured that its ‘IT strategy’ follows the ‘Business strategy’ so as to arrive at “Best Fit”.
The bank has made rapid strides in this direction. Alongwith the achievement of 100%
branch computerization, one of the major achievements of the Bank is covering all the
branches of the Bank under Core Banking Solution (CBS), thus covering 100% of it’s
business and providing ‘Anytime Anywhere’ banking facility to all customers including
customers of more than 2000 rural branches. The bank has also been offering Internet
banking services to the customers of CBS branches like booking of tickets, payment of bills
of utilities, purchase of airline tickets etc.Towards developing a cost effective alternative
channels of delivery, the bank with more than 2150 ATMs has the largest ATM network
amongst Nationalised Banks.
With the help of advanced technology, the Bank has been a frontrunner in the industry so far
as the initiatives for Financial Inclusion is concerned. With it’s policy of inclusive growth in
the Indo-Gangetic belt, the Bank’s mission is “Banking for Unbanked”. The Bank has
launched a drive for biometric smart card based technology enabled Financial Inclusion with
the help of Business Correspondents/Business Facilitators (BC/BF) so as to reach out to the
last mile customer. The BC/BF will address the outreach issue while technology will provide
cost effective and transparent services. The Bank has started several innovative initiatives for
marginal groups like rickshaw pullers, vegetable vendors, diary farmers, construction
workers, etc.
The Bank has already achieved 100% financial inclusion in 21,408 villages.
Backed by strong domestic performance, the bank is planning to realize its global aspirations.
In order to increase its international presence, the Bank continues its selective foray in
international markets with presence in Hongkong, Dubai, Kazakhstan, UK, Shanghai,
Singapore, Kabul and Norway. A second branch in Hongkong at Kowloon was opened in the
first week of April’09. Bank is also in the process of establishing its presence in China,
Bhutan, DIFC Dubai, Canada and Singapore. The bank also has a joint venture with Everest
Bank Ltd. (EBL), Nepal.
Under the long term vision, Bank proposes to start its operation in Fiji Island, Australia and
Indonesia. Bank continues with its goal to become a household brand with global expertise.
Amongst Top 1000 Banks in the World, ‘The Banker’ listed PNB at 250th place. Further,
PNB is at the 1166th position among 48 Indian firms making it to a list of the world’s biggest
companies compiled by the US magazine ‘Forbes’.
(Rs. In Crores)
Finance
Personal Administration
Human Source
Retailing
Treasury Management
Information Technology
Saving Account
• PNB Prudent Sweep
Credit schemes
• Housing loan
• Car finanace
• Personal loan
• Professional loan
• Educational loan scheme
• Loan against mortgage of property
• PNB financial basket scheme
• Personal loan scheme for pensioners
• Privilege card scheme
• Other credit scheme
Social Banking
• Farmers
• Krishi card
• Agriculture credit scheme
Women
• Scheme for house wife and other women
• Mahila udhyam nidhi scheme
Savings Accounts
Purpose: To offer an attractive Saving Fund Account to Corporate Employees for enabling
them to have their Salary Credited as well as availing overdraft facility up to Rs. 15,000/- or
the last salary credited in the account whichever is lower, at our interest rates applicable to
Personal Loans to employees, it would be adjustable in bullet repayment at the time of next
salary credit
The employee whose salary account is being opened should be a permanent employee.
The minimum number of accounts to be opened should be 25 or 75% of the strength of the
permanent employees of the corporate (in that location), whichever is lower.
Free Cheque Books for routine requirements (except bulk requirements for loans to be
availed at any other bank- in that case normal cheque book charges would be levied);
Free funds transfer from their accounts within our CBS branches and at 50% discount at non-
CBS branches;
Free issuance of all types of certificates including interest certificate and balance certificate,
etc;
Free of Cost maintenance of Demat Account (we shall be waiving the charges to be earned
by PNB as annual fee, charges payable to NSDL would be recovered from the customers);
PNB-HSBC Credit Cards shall also be got considered by HSBC on priority basis
Eligibility
Accounts can be opened in the name of students who have attained the age of 10 years and above,
studying at VARIOUS RECOGNISED EDUCATIONAL INSTITUTIONS.
Initial Deposit Amount/ QAB/Minimum Balance Required
Zero
Overdraft Facility
The overdraft facility shall be given to students (of reputed educational institutions only) who are
staying away from their parents. It would be made available on the request of the student with the
UNDERTAKING TO PAY/ CONSENT LETTER from earning parents/natural guardian/local guardian
of student. In the first year of opening of account, the facility would be available up-to a maximum limit
of Rs.5,000/-. Subsequent to the satisfactory conduct of the account, in second year it could be enhanced
upto Rs. 10,000/-. Other terms & conditions of this overdraft facility would be as under:
Rate of Interest The overdraft facility would attract at the rate of interest as applicable to
Personal Loans to the general public.
Age of Student The overdraft facility would be available for the students, having completed
the age of 18 years
Purpose Contingent day to day needs of those students who are staying away from
their parents for the study purposes having got an admission with recognised
and reputed educational institutions.
Repayment For repayment purposes, a single post dated cheque must be obtained from
earning parents/natural guardian/local guardian of student and kept on record.
Recovery Aspects The overdraft facility must be brought into credit once in 3 months, failing
which recovery process be started. The facility would be recalled and the
student would not be eligible for this overdraft facility at any branch of our
Bank. In any case, this facility should not be allowed to continue when the
student is in the final year of study at that educational institution, i.e. account
has to be got into credit at least six month before the expiry of the tenure of
the study period without any further continuation of overdraft facility.
Attractive Freebies/Concessions
The following freebies are also admissible:
Demand drafts for all types Free of cost
of fees/examination fees
Initial Deposit Amount The account will be opened without any initial deposit, i.e., it
Will be Zero Balance Saving Fund Account
Incidental Charges NIL
Ledger Folio Charges NIL
Retail Internet Banking Free (at CBS branches only)
Services
Intersol transactions including Free
cash withdrawal/deposits
ATM Card/DEBIT CARD Free (subject to availability of ATMs in the area)
Cheque Book Facility Free (2 cheque books in a year)
Our Bank would allow first 50 transactions in a calendar year Free of Charge,
Customer would not be allowed to keep balance in this account (taken together
with all other accounts with our Bank) more than Rs.50,000/- in this account
in view of related KYC Norms;.
The product is aimed at offering Current Account Customers convenient opportunity to earn
extra-returns on surplus funds lying in the accounts which may not normally be utilised in the
near future or are likely to remain un-utilized. The automated nature of the facility for 'Sweep
In or Sweep Out' of more than a lac of rupees, and creating fixed deposits for desired period,
would save lot of operational hassles and create Customer Value. Roaming Features: The
Customers would be able to operate their 'Current Comfort' at all other CBS branches of our
Bank. It will facilitate transfer of funds as well as much faster cheque collection services for
the customers, simultaneously customers will be able to withdraw cash from our CBS
branches.
Sweep in and Sweep out Features:
The Customer shall be able to profitably deploy his funds which were earlier not
attracting any interest. Funds (above Rs. One Lac) lying in Current Accounts and their
ready availability when required for payment/clearance of cheques. The bank would provide
the facility of automatic transfer of balance from Current Accounts having a balance of over
Rs.1,00,000/- (Rupees one lac only) in multiples of Rs.10,000/- (Rupees Ten Thousand
Only) to Fixed Deposit Accounts. Sweep In Funds would be accepted for a minimum
maturity period of 15 days and Maximum maturity period of 45 days. It will be optional
for the customers to indicate desired periodicity in multiples of 15 days. The customer would
get the interest on such deposit at the term deposit rate applicable for the period indicated by
him/her.
Additional Features
(subject to maintenance of stipulated 'minimum balance' in the account throughout during
previous quarter i.e. clear balance on the closing of everyday should have been Rs.25,000/- or
above) :
A Multi-Option Fixed Deposit Scheme that fit your needs, timing & resources, to match your
convenience
ANUPAM ACCOUNT
Our Bank has several Domestic Deposit Schemes designed to cater to the needs of
various segments of customers to meet your specific requirement.
1. Participation
3. Period of Deposit
For any period from 6 months to 120 months. Existing deposits under Multi Benefit
Deposit Scheme for Rs.10,000/- and above with unexpired term of 6 months or more
are eligible for transfer to Anupam Account Scheme.
4. Overdraft Facility
Overdraft facility shall be permitted through a Current Account and a Cheque Book
will be issued to the depositor on the same day.
For Public
Only depositors can avail overdraft facility against their deposits under this scheme.
No third party advance ie Credit Facility / overdraft to persons other than depositors is
allowed under Anupam Account. Even the overdraft facility to a proprietorship firm
against Fixed Deposit in the name of its proprietor is not allowed.
If any depositor desires to withdraw the deposit before maturity, Bank may at its
discretion repay the deposit with upto date quarterly compounded interest at the rate
applicable to the period for which deposit remained with the bank
Further, Fixed Deposit can be accepted in the same Anupam Account on your request
and the limit in the overdraft account be increased accordingly against the additional
deposit and it will also be endorsed in the Receipt Form with you.
You may withdraw any amount before maturity anytime as well in multiples of
Rs.1000/- any time according to your convenience without breaking the entire deposit
and also without losing interest on remaining part of Fixed Deposit Receipt under the
Scheme.
It entitles you to earn interest at term deposit rates on quarterly compounding basis.
You may open with any amount with a minimum deposit of Rs.1000/- for any
period from 6 months to 120 months.
You can avail the additional facility of automatic renewal of fixed deposit with or
without interest on maturity.
On demand, Loan in this MBFD scheme is also made available by us.
Individuals can open account, singly or jointly, by a minor of the age of 10 years and
above in his name or through his guardian.
Credit Scheme
Housing Loan
Car Loans
Own a vehicle with the friendliest and most convenient car loan. Either you can
purchase a new Car/ Van/ Jeep or raise loan to purchase old vehicles that are not
older than 3 years. Finance will be provided for purchase of vehicle of indigenous/
foreign makes.
For Individuals: 25 times of the monthly net salary OR Rs.15 lac, whichever is
lower. Income of spouse can be taken into account for determining loan amount. In
such cases, the spouse shall stand as a guarantor.
The vehicle purchased with the amount of loan is to be hypothecated to the Bank. It
will be registered in the name of the borrower jointly with the Bank.
For new Car/ Van/ Jeep: The loan amount together with interest is to be repaid
maximum in 84 Equated Monthly Instalments (EMIs)
For old Car/ Van/ Jeep: The loan amount together with interest is to be repaid
maximum in 60 Equated Monthly Instalments (EMIs)
The intending borrower will be required to settle the transaction for purchase of
vehicle needed by him/her with the seller and will be required to deposit the
difference of the cost of the vehicle to amount of loan, and thereafter, the advance
will be allowed to him/her from the bank by paying the entire price of the vehicle to
the seller directly on behalf of the borrower
Term Loan:
60 Equated Monthly Instalments (EMIs) OR remaining period of service, whichever
is earlier. Instalment to commence one month after disbursement of loan.
Overdraft:
The overdraft limit shall be adjusted within a maximum period of 60 months by
reducing Drawing Power(DP) equivalent to EMI amount at the beginning of every
month.
However, loan allowed to Army Jawans, other permanent employees of Military
Station Headquarters and Para Military Personnel shall be Repayable in maximum
36 Equated Monthly Instalments or remaining period of stay at the particular
posting, whichever is lower
PNB extends assistance to self-employed persons, firms and joint ventures of such
professional persons engaged in professions such as:
The qualified professionals will be required to produce a certified copy of the license
Term Loan
Loans up to Rs.50000/- 48 months
Loans beyond Rs.50000/- 60 months
Pilot training, Shippling etc. approved by DGCA/ etc., Courses offered by National Institutes
and other reputed Private Institutes.
Need based finance, subject to repaying capacity of the parents / students with margin and the
following ceilings :-
For studies in India: Maximum Rs.10.00 lacs.
Nil.
Scheme seeks to provide finance against mortgage of immovable property situated in Metro/
Urban/ Semi Urban centres. The scheme is designed to offer instant solutions relating to
business needs or for personal needs such as, children's higher education, travel, daughter's
marriage, medical emergencies, etc. Loan is, however, not available for speculative purpose.
Eligibility
For Individuals
• Minimum net monthly salary/ net annual income of Rs.10,000/ Rs.1,20,000/- for
salaried and for other income tax assesses respectively
• Net annual income should be double that of total EMIs for the year
. OBJECTIVE
Offers attractive benefits as part of a Package to those customers who have the capacity and
are willing to avail a minimum specified loan amount under at least two or more specified
Retail Loan Schemes.
2. SCHEME APPLICABILITY
Authorised Branches.
3. ELIGIBILITY
Individuals, including joint owners, who are willing to avail a minimum loan of Rs.5.00 lac
as a package under at least two specified Retail Loan Schemes at a time. One of which
necessarily be for HOUSING and the other may be any one of the following purposes:
Car,
Personal or
Education. At the same time, such individuals/ including joint owners should have adequate
capacity to regularly service such loans.
4. PURPOSE
Loan on pari passu or second charge basis only to confirmed employees of Central/ State
Government / Public Sector Undertakings (PSUs) maximum upto Rs. 20 lacs. The quantum
of loan be decided taking into account the amount of earlier loan availed and repaying
capacity of the borrower.
5. AMOUNT OF LOAN
For Personal Needs: Need Based - Minimum Rs.1 lac Maximum Rs. 2 lacs
For Education: For Studies in India - Minimum Rs.1 lac Max. Rs.5.00 lac
For Studies abroad - Minimum Rs.1 lac Max. Rs.10.00 lac
6. MARGIN
10% except when loan is availed for Personal and or Educational needs in which case it shall
be Nil.
7. RATE OF INTEREST
Housing -
TENOR Rate of Interest @percent p.a.
REVISED w.e.f. 01.08.2003
For loans repayable
in/upto
i) Upto 5 years 7.75
ii) Above 5 & upto 10 years 8.25
Personal - 13%
8. REPAYMENT
For Car and Personal - Maximum 4 years (48 months) in equal Monthly Instalments.
9. MODE OF DISBURSEMENT
As per extant guidelines of specific schemes viz. Housing, Car, Personal and Education.
However, No charges for issue of Demand Draft /Bankers cheques are to be levied.
10. INSURANCE
Comprehensive Insurance Policy to be obtained where loan is allowed for Housing and Car
needs.
11. SECURITY:
Housing
Obtention of pari passu or second charge over the property mortgaged in favour of other
Lender in situations where senior authorities consider requests and allow loan only to
confirmed employees of Central / State Govts. / Public Sector Undertakings, who have raised
funds for construction / acquisition of accommodation from other sources and need
supplementary finance, for an amount of loan of maximum upto Rs. 20 lacs, which, however,
should be for a minimum of Rs. 2lacs as prescribed above.
Car
12. GUARANTEE
Suitable guarantee acceptable to the Bank may be obtained which may also include guarantee
from family members/other relatives.
In case any of the loan facilities allowed are adjusted within a period of three years,
borrower(s) will be required to pay a prepayment Penalty @ 2% on the amount which had not
become due for payment.
15. GENERAL
The concessional loan facility is available provided the combined availment is Rs. 5 lacs or
more.
Equitable Mortgage of the Immovable Property against which Housing loan has been allowed
will secure the combined loan for two or more purposes.
Equitable Mortgage shall not to be released till final adjustment of all the loans.
Indian Retail Banking continues to redefine the credit growth in the country. It grew by a
whopping 44.4% in 2005-06 to touch Rs3,538 billion. This leap was despite the increase in
risk weight by RBI for housing and real estate loans during August, 2005. Housing, which
constitutes more than 52% of all retail loans, grew at a robust rate of 44.35% during 2005-06.
In order to help banks in India to understand the market and competition and plan future
strategies, we have just come out with an Industry Insight on Indian Retail banking – 2006
edition. This report analyses the retail banking market and its segments in India and presents
the key trends, along with issues and challenges. The report also paints a future outlook for
the market. Besides it profiles 21 major players in the retail banking space and their
strategies.
This report will be of immense use to all banks in India to review and formulate their
strategies in the retail space. It primarily covers analysis of the present status, current trends,
major issues & challenges in the growth of the retail banking sector.
With the Retail banking sector expected to grow at a rate of 30% [Chanda Kochhar, ED,
ICICI Bank] players are focussing more and more on the Retail and are waking up to the
potential of this sector of banking. At the same time, the banking sector as a whole is seeing
structural changes in regulatory frameworks and securitisation and stringent NPA norms
expected to be in place by 2004 means the faster one adapts to these changing dynamics, the
faster is one expected to gain the advantage. In this article, we try to study the reasons behind
the euphemism regarding the Retail-focus of the Indian banks and try to assess how much of
it is worth the attention that it is attracting.
Potential for Retail in India: Is sky the limit?
The Indian players are bullish on the Retail business and this is not totally unfounded. There
are two main reasons behind this. Firstly, it is now undeniable that the face of the Indian
consumer is changing. This is reflected in a change in the urban household income pattern.
The direct fallout of such a change will be the consumption patterns and hence the banking
habits of Indians, which will now be skewed towards Retail products. At the same time, India
compares pretty poorly with the other economies of the world that are now becoming
comparable in terms of spending patterns with the opening up of our economy. For instance,
while the total outstanding Retail loans in Taiwan is around 41% of GDP, the figure in India
stands at less than 5%. The comparison with the West is even more staggering. Another
comparison that is natural when comparing Retail sectors is the use of credit cards. Here also,
the potential lies in the fact that of all the consumer expenditure in India in 2001, less than
1% was through plastic, the corresponding US figure standing at 18%.
geographical and cultural diversity of the country makes credit policy formulation a tough job
and it simply cannot be dictated from a Wall Street or a Singapore boardroom! All these add
up to the unattractiveness of the Indian retail market to the foreign players. So over the past
few years, in spite of the entry of MNCs in many industries, Retail Banking has seen a flurry
of panicky exits. Fewer than 40 remain in India and their share of total bank assets currently
7.2% is falling. Those that remain might be thought to be likely buyers of Indian banks. Yet
Citibank, HSBC and Standard Chartered—all in India for more than a century, and with
relatively large retail networks—seem to have no pressing need to acquire a local bank.
Established foreign banks have preferred to take over customers or businesses from other
foreign banks that want to leave. Thus HSBC, in recent years, has acquired customers from
France's BNP, Germany's Deutsche Bank and Japan's Bank of Tokyo-Mitsubishi. ABN Amro
took over Bank of America's retail business.
Chapter-3
Research
Methodology
RESEARCH METHODOLOGY
Research Methodology refers to the method the researchers use in performing research
operations. In other words, all those methods, which are used by the researcher during the
course of studying his research problem, are termed as Research Methods.
RESEARCH DESIGN
A research project conducted scientifically has a specific frame work of research from
problem identification to presentation of research report. This framework of conducting
research is known as Research Design.
A research can be conducted without a research plan but it may not solve the problem. A
research cannot achieve its objectives without proper research design, without design, it
increase its cost and energy.
Descriptive research includes surveys and facts finding enquiry’s of different finds. The
major purpose of descriptive research is description of the state of affairs as it exists at
present. The main characteristics of this method are that the researcher has no control over
the variable. He can only report what has happened or what is happening. Most are post facts
research projects are used for descriptive studies in which the researcher seeks to measure
such items as for example frequency of shopping, preference of people or similar data. Ex
post facts studies also include attempt by researchers to discover causes even way when they
cannot control the variables. The method of research utilized in descriptive research is survey
method of all kinds, including comparative and correctional methods.
The study is about customer satisfaction regarding services in PNB. It is being made because
Customer satisfaction is the key to the profitability of the banking. It implies the retention of
customers for the long term, which is cheaper than altercating new customers. In current
scenario bank becoming larger the closure of branches and the advent of internet banking, the
question arises whether the customers are satisfied or not.
DATA COLLECTION
PRIMARY DATA with the help of self structured, questionnaire was collected to the address
the research objectives and keeping in tune with the research design.
SECONDARY DATA consisted from “Journals, Magazines, and Books & Websites.”
SAMPLING TECHNIQUE
Sampling is necessary because it is almost impossible to examine the entire parent population
or universe. Various factors such as time available, cost, purpose of study etc. make it
necessary for the researchers to choose a sample. It should neither be too small nor too big.
SAMPLE SIZE
40 Customers.
Questionnaire
Objectives of study
To study the various services offered by PNB
DESCRIPTION OF EXPERIENCES
Uneducated customers were not abling to fill their Forms properly
Due to the lack of the employees’ ledger were not in good condition.
Recording of the data was incomplete and due to which they were not able to clarify
the dues.
But due to the computer the job of the employees is simpler.
Now they have to pass simple entries and all records is maintained easily without any
confusion.
There job is much simpler than before now they can make changes, add, modify at
the same time in a easy manner that is an achievement for bank
I learnt many things in the bank but the most interesting thing I like there is the
Environment of the bank the employees help each other rather they the job of other
or not but they help each other.
Conflicts arise between them because of the lack of the customers they add wrong
information in their cheques or vouchers that cannot be passed.
I learnt many things I have good and bad experiences both over their before I I was
not aware of anything in the bank now I know many things.
I can say that while working over their no employee leaves its work pending for net
day because if they let it pending than they can not end their day and by hook or
crook they have to finish it.
My experience says that working in bank is not as easy as we think because
Managing each and every thing is not easy task.
They have to interact with differ rent types of people so it’s very tough.
Chapter-4
DATA
ANALYSIS
AND
INTERPRETATION
TABLE
SERVICE 6 4 1 2 13 32.5
STUDENT 4 2 1 1 8 20.0
RETIRED 2 0 2 0 4 10.0
BUSINESS 4 2 3 2 11 27.5
TOTAL 18 9 7 6 40 100
GOOD
SATISFACTORY
VERY GOOD
UNSATISFACTORY
TABLE
SERVICE 5 8 13 32.5
STUDENT 3 5 8 20.0
RETIRED 2 2 4 10.0
BUSINESS 8 3 11 27.5
TOTAL 20 20 40 100
yes
no
TABLE
SERVICE 10 3 13 32.5
STUDENT 6 2 8 20.0
RETIRED 3 1 4 10.0
BUSINESS 9 2 11 27.5
TOTAL 31 9 40 100
yes
no
TABLE
SERVICE 9 4 13 32.5
STUDENT 3 5 8 20.0
RETIRED 3 1 4 10.0
BUSINESS 6 5 11 27.5
TOTAL 24 16 40 100
yes
no
TABLE
SERVICE 6 5 2 0 13 32.5
STUDENT 2 4 2 0 8 20.0
RETIRED 2 2 0 0 4 10.0
BUSINESS 5 3 2 1 11 27.5
TOTAL 18 15 6 1 40 100
15 minutes
30 minutes
1 hour
2 hours/more
TABLE
SERVICE 1 1 6 2 3 13 32.5
STUDENT 1 4 1 1 1 8 20.0
RETIRED 4 0 0 0 0 4 10.0
BUSINESS 2 5 0 2 2 11 27.5
HOUSEHOLD 2 0 0 2 0 4 10.0
TOTAL 10 10 7 7 6 40 100
personal loan
consumer loan
others
housing loan
car loan
Chapter-5
FINDINGS AND
CONCLUSIONS
PNB is having a distribution network of more than 4000 branches. This is the main
strength of the PNB, which cannot be the strength of any other bank.
PNB is the oldest bank from 1895, so it has a strong band image in the market built
over the time & a huge stockpile of the customers under its arms.
The age group of employees is mostly towards at higher side, which is adversely
affecting the productivity, as they do not have any enthusiasm left.
PNB as not much computer savy and works more manually, which restricts its scope
of business.
The process of certain activities of the bank is very much lengthy, as a result of which
now a day’s people prefer to go towards private banks.
The working environment of the bank is not so much healthy and clean as result of
which customers even hesitate to enter the bank.
Conclusions
Bank requires good sitting arrangements for the old generation so that they can get
their work done easily and in a manner and get fully satisfied.
Promotions to the employees should be given and their salary must be increased.
Maximum tax benefit is availed from home loan and minimum from car loan.
Maximum number of borrowers were get influenced by dealer/agent and minimum by
relative. So bank requires introducing new advertisement for loan schemes.
Bank requires to make better arrangements in sitting and standing in the branch.
Bank has to maintain its working environment as result of which customers not even
hesitate to enter the bank.
References
References
Philip Kotler, 2004-2005 Marketing Management, PHI, NewDelhi.
Website of PNB.