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TRAINING REPORT ON RETAIL LOANS OF PUNJAB NATIONAL BANK IN CONTEXT TO EDUCATION, REVERSE MORTGAGE AND TWO WHEELERS LOANS

SUBMITTED BY
PINKY SWATI BANSAL TANU MADAN
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PREFACE

In the present age of business when profit maximization is the prime motive of every uality and m

man, Price quality & service are the major trust areas to conquer the market. Initiative,resight, tale foresight ,talent &competency are imperative to manage the modern business.

The MBA course inculcates those skills in students, which prepare them to face the challenges of business world. In the midst of the course, summer training in some business organization is arranged for the student that is very essential. Such training gives practical experience and helps the students to view the real business world closely, which in turn widely influences their conception and perceptions.

The summer training become more significant when it is done in a reputed & fast growing professionally managed organization like PUNJAB NATIONAL BANK; AGRA. We were really fortunate to get an opportunity to work with it.

The project assigned required a lot of extensive study, as we had too many irons in fire. It gave an exposure, which helped us to get the through understanding of fast moving Loan Industry and different market strategies used. We found practical work totally different from the theoretical one.

We hope that our study will be useful for the organization.

ACKNOWLEDGEMENT
It is a pleasant duty to acknowledge the valuable help we received from different quarters in the completion of our project work. At the very outset, we express our reverential regards and profound gratitude to MR.BATRA, HR MANAGER, CIRCLE OFFICE, PNB, AGRA. For giving us this opportunity to undergo summer training in Punjab national bank. We are highly indebted and owe our deep sense of gratitude and reverential regards to MR.N.C.GARG, CHIEF MANAGER, RETAIL HUB BRANCH, PNB, AGRA, without whose guidance and encouragement this project could not have been completed. We sincerely thank and express gratitude to MR. JITENDRA SINGH, MARKETING MANAGER, REATIL HUB BRANCH, PNB, AGRA, for his invaluable help during the course of my study. we would like to sincerely thank, Sir Harsh Purohit, Faculty, WISDOM BANASTHALI VIDYAPITH, BANASTHALI, for his valuable suggestion and guidance and making it possible for me to accomplish the project. We would like to thank my parents and my colleagues who instilled confidence and moral support various stages during the course of this training. Above all, we bow our heads before Almighty GOD without whose blessing our present project would not have existed and thanks for giving us patience and strength to overcome the difficulties, which crossed our way in the accomplishment of this endeavor.

(Pinky) (Swati Bansal) (Tanu Madan) MBA WISDOM, BANASTHALI VIDYAPITH BANASTHALI.

CONTENTS
RETAIL LOAN (A).INTRODUCTION TO BANKING IN INDIA INTRODUCTION TO PUNJAB NATIONAL BANK (A). PROFILE OF PNB (B). PERFORMANCE HIGHLIGHTS OF PNB (C). ACTIVITIES PERFORMED BY PNB OBJECTIVE OF THE PROJECT METHODOLOGY OF THE PROJECT LIMITATION OF THE PROJECT PNBS RETAIL LOAN SCHEMES EDUCATION LOAN (A). OBJECTIVE (B). ELIGIBILITY (C). QUANTUM OF FINANCE (D). MARGIN AND SECURITIES (E). RATE OF INTEREST (F). DISBURSEMENT (G). DOCUMENTS REQUIRED (H). COMPARISON OF PNBS EDUCATION LOAN WITH OTHER BANKS TWO WHEELER LOAN (A). ELIGIBILITY (B). PURPOSE 4

(C). AMOUNT OF LOAN (D). MARGIN AND SECURITIES (E). RATE OF INTEREST (F). DISBURSEMENT OF LOAN (G). DOCUMENTS REQUIRED REVERSE MORTGAGE LOAN (A).OBJECTIVES (B). ELIGIBILITY (C). AMOUNT OF LOAN/MARGIN (D). RATE OF INTEREST (E). DISBURSEMENT OF LOAN (F). REPAYMENT OF LOAN OBSERVATIONS CONCLUSION BIBLIOGRAPHY

RETAIL LOAN
INTRODUCTION
Banking in India
Banking in India has its origin as early as the Vedic period. It is believed that the transition from money lending to banking must have occurred even before Manu, the great Hindu Jurist, who has devoted a section of his work to deposits and advances and laid down rules relating to rates of interest. During the Mugal period, the indigenous bankers played a very important role in lending money and financing foreign trade and commerce. During the days of the East India Company, it was the turn of the agency houses to carry on the banking business. The General Bank of India was the first Joint Stock Bank to be established in the year 1786. The others, which followed, were the Bank of Hindustan and the Bengal Bank. The Bank of Hindustan is reported to have continued till 1906 while the other two failed in the meantime. In the first half of the 19th century the East India Company established three banks; the Bank of Bengal in 1809, the Bank of Bombay in 1840 and the Bank of Madras in 1843.

These three banks also known as Presidency Banks were independent units and functioned well. These three banks were amalgamated in 1920 and a new bank, the Imperial Bank of India was established on 27 th January 1921. With the passing of the State Bank of India Act in 1955 the undertaking of the Imperial Bank of India was taken over by the newly constituted State Bank of India. The Reserve Bank which is the Central Bank was created in 1935 by passing Reserve Bank of India Act 1934. In the wake of the Swadeshi Movement, a number of banks with Indian management were established in the country namely, Punjab National Bank Ltd, Bank of India Ltd, Canara Bank Ltd, Indian Bank Ltd, the Bank of Baroda Ltd, the Central Bank of India Ltd. On July 19, 1969, 14 major banks of the country were nationalised and in 15 th April 1980 six more private sector commercial banks were also taken over by the government.

INTRODUCTION OF PUNJAB NATIONAL BANK:


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. A professionally managed bank with a successful track record of over 110 years. Largest branch network in India - 4062 branches and 447 Extension Counters spread throughout the country. Strategic business area covers the large Indo-Gangetic belt and the metropolitan centers. Ranked as 323rd biggest bank in the world by Bankers Almanac (January 2006), London.

More than 50 renowned international banks maintain their Rupee Accounts with PNB. Punjab national bank is number one amongst the national banks and the second largest public sector bank in the country. It is the third biggest bank in terms of asset size among commercial banks. With a countrywide presence of 4042 branches, PNB has a strong deposit and credit base. The bank has developed a relatively strong franchise over the years, servicing both the corporate and retail sector and offering a wide variety of banking services, which include corporate and personal banking, industrial finance, agricultural finance financing of trade and industrial banking. Among the banks client are multinational companies, Indian conglomerates, medium and small industrial units, exporters and non-resident Indian etc. Punjab National Bank is serving over 3.5 crore customers through its network. The Bank was recently ranked 21st amongst top 500 companies by the leading financial daily, Economic Times. PNB's attempts at providing best customer service has earned it 9th place among Indias Most Trusted top 50 service brands in Economic Times- A.C Nielson Survey. PNB is also ranked 368 amongst the top 1000 banks in the world according to "The Banker" London. The bank has been focusing on expanding its operations outside India and has identified some of the emerging economies which offer large business potential. Bank has set up representative offices at Almaty: Kazakhstan, Shanghai: China and in London. Besides, Bank has opened a full fledged Branch in Kabul, Afghanistan. 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 2000 offices have already been brought under its ambit. PNB also offers Internet Banking services in the country for Corporate as well as individuals. Internet Banking services are available through all Branches of the Bank networked under CBS. Providing 24 hours, 365 days banking right from the PC of the user, Internet Banking offers world class banking facilities like anytime, anywhere access to account, complete details of transactions, and statement of account, online information of deposits / loans / overdraft account etc. PNB has recently introduced Online Payment Facility for railway reservation through IRCTC Payment Gateway Project and Online Utility Bill Payment Services which allows Internet Banking account holders to pay their telephone,

mobile, electricity, insurance and other bills anytime from anywhere from their desktop. Another step taken by PNB in meeting the changing aspirations of its clientele is the launch of its Debit cum ATM card. It enables the card holder to buy goods and services at over 99270 merchant establishments across the country. Besides, the card can be used to withdraw cash at more than 11000 ATMs, where the 'Maestro' logo is displayed, apart from the PNB's over 600 ATMs and tie up arrangements with other Banks. During the year 2004-05, the bank continued to show good performance in all the key parameters as is given below.

PERFORMANCE HIGHLIGHTS
PNB Q4 Net Up by 128.75% (YOY) PROPOSES 130% DIVIDEND In 2007-08 Punjab National Bank excelled in overall performance and continued to retain its leadership position among the nationalized banks in terms of various business parameters as well as profits. The impressive performance was brought about by Banks focus on customer based business with thrust on SME, Agriculture, students and a more inclusive approach to banking; streamlining the administration and restructuring its organizational structure to make it more horizontal; various cost control measures; better asset liability management; prudent risk management and strengthening the recovery mechanism. Highlighting the performance of the Bank to the Press, Dr. KC Chakrabarty, Chairman & Managing Director informed that on a standalone basis during the Q4 FY 2007-08, the Bank achieved a record YOY growth in Net Profit of 128.75%. For the full year 2007-08, the operating profit crossed the landmark Rs.4000 cr. level to reach Rs.4006 cr.. Further, the Bank has fully complied with revised AS-15 and the transitional liability has been adjusted out of opening Reserves (net of taxes) and the current year liability charged to Profit & Loss A/c. The Bank has also successfully migrated to Basel II accord, w.e.f March 31, 2008. For a leaner, efficient and cost effective system, the bank has decided to remove one layer from its organizational structure and to adopt a three tier structure as against the earlier 4 tier one.

The Board of Directors of Punjab National Bank at its meeting held on Thursday, May 15, 2008 approved the Banks audited accounts for the year ended March 2008 and proposed a dividend of 130 percent. The highlights of the performance are as under: 1. Positive Earning Momentum During the 4th Quarter of FY 2007-08, the Bank has achieved a record YOY growth in Net Profit of 128.75% percent to Rs 543.76 crore, compared to Rs 237.71 crore during the 4th Quarter of the year 2006-07. The Bank was able to achieve the above growth despite making additional tax provision of Rs 180 crore relating to Income Tax for previous years over and above the Income tax liability for the year 2007-08. Additionally, the bank had made provisions of Rs 100 crore towards wage revision and floating provision of Rs 100 crore towards NPA. The full year Net Profit for 2007-08 rose by 33.03 percent to Rs 2048.76 crore. This is after providing for necessary provisions towards wage revision arrears, income tax, wealth tax, NPAs, standard assets, depreciation, gratuity, pension, leave encashment etc.. Operating Profit during the Q4 of 2007-08 grew YOY at 39.03 percent to Rs 1226.78 crore compared to Rs 882.36 crore during the Q4 of 2006-07. For the full year 2007-08, operating profit of the bank crossed the Rs 4000 crore landmark to reach Rs 4006.24 crore registering a YOY growth of 10.75%. During the Quarter the Net Interest Income (NII) grew by 12.74 percent YOY to Rs.1517.28 crore from to Rs.1345.86 crore in Q4 2006-07 . During 2007-08, while the Net Interest Income (NII) increased by 6.16 percent to Rs 5534.16 crore ( Rs 5213.24 crore during 2006-07), the operating expenses increased by 5.99 percent to Rs 3525.48 crore (Rs3326.23 crore during 2006-07). Total income during Q4 of 2007-08 increased to Rs 4417.00 crore, as compared to Rs 3712.79 crore during the Q4 of 2006-07, registering a YOY growth of 18.97 percent. Total income during 2007-08 increased to Rs 16262.58 crore, as compared to Rs12966.52 crore during the year 2006-07, registering a yo-y growth of 25.42 percent. - Interest Income increased to Rs 3879.79 crore during Q4 of 2007-08, recording YOY growth of 24.46 percent over corresponding quarter last year. Interest Income increased to Rs 14265.02 crore during 2007-08, as compared to Rs11236.13 crore during 2006-07, recording y-o-y growth of 26.96 percent.

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- Commission, Exchange and Brokerage increased YOY by 9.83 percent to Rs 325.49 crore during Q4 of 2007-08, from Rs 296.35 crore during Q4 of 2006-07. Commission, Exchange and Brokerage increased YOY by 14.04 percent to Rs 1106.23 crore during 2007-08, from Rs 970.01 crore during 200607. - The bank earned fee based income of more than Rs 80 crore in transacting the government business. The bank is also a principal banker for Ministry of Corporate Affairs, Ministry of Finance (CPAO), Ministry of Personnel, Public Grievances and Pension and Ministry of Civil Aviation and Tourism. Total Expenses (excluding provisions) amounted to Rs 3190.22 crore during Q4 of 2007-08, as compared to Rs 2830.43 crore during Q4 of 2006-07, registering a YOY growth of 12.71 percent. Total Expenses (excluding provisions) amounted to Rs 12256.34 crore during 2007-08, as compared to Rs 9349.14 crore during 2006-07, registering a y-o-y growth of 31.10 percent. 1 - Interest expenses increased YOY by 33.37 percent to Rs 2362.51 crore during Q4 of 2007-08, from Rs 1771.36 crore during Q4 of 2006-07. During the year 2007-08, interest expenses increased YOY by 44.96 percent to Rs 8730.86 crore as compared to Rs6022.91 crore during 2006-07. 2. Key Ratios 1 (i) Return on Assets (ROA) improved to 1.15 percent for FY 2007-08, as compared to 1.03 percent for FY 2006-07. 2 (ii) Return on Equity improved to 19.00 percent from 15.19 percent last year). 3 (iii) Net Interest Margin for FY 2007-08 was 3.58 percent. (Q4 NIM was 3.66 percent) 4 (iv) Average Cost of Deposits is 5.59 percent as at the end of March 2008. 5 (v) Yield on advances (YOA) improved to 10.36 percent as at the end of March 2008, as compared to 9.17 percent last year. 6 (vi) Cost to Income ratio improved to 46.81 percent from 47.90 percent last year. 7 (vii) Earning Per Share (EPS) is Rs 64.98 for the year 2007-08 as compared to Rs 48.84 last year.

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8 (viii) Book Value Per Share as at Mar08 is Rs 341.98 compared to Rs 321.65 as at Mar07. The book value shows increase even after adjusting transitional liability under revised AS-15 to the extent of Rs.928 cr.

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1 (ix) As per Basel I the CRAR improved to 12.96 percent as at the end of March 2008, as compared to 12.29 percent last year. This CRAR was achieved even after providing for additional capital during the year towards : 0 i. Starting of Banks subsidiary at London, PNBIL 1 ii. Compliance with Basel II: capital has been provided for operational risk also besides credit and market risk 2 iii. Compliance with revised AS-15: the transitional liability has been adjusted out of opening Reserves (net of taxes) Bank has successfully migrated to Basel II Accord as at 31 st Mar08 and the CRAR as per Basel II works out to 13.46%. (ix) During the FY 2007-08, to shore up the capital base Bank raised Hybrid Perpetual Tier I bonds (Rs.1100 cr.) and Upper Tier II bonds (Rs 1610 crore) (x) Staff productivity measured in terms of business per employee increased to Rs 504.52 lakh as at the end of March 2008 from Rs 407.41 lakh in the previous year. 3. Balance Sheet Strength 1 The Banks Net Worth increased by 18.04 percent to Rs 12318 crore, as on March 31, 2008, as compared to Rs 10435 crore, as on March 31, 2007. 1 Total Business of the Bank reached Rs 285959 crore at the end of March 2008, registering a YOY growth of 20.94 percent over Rs 236456 crore as at the end of March 2007. 2 Deposits at the end of March 2008 amounted to Rs166457 crore, as compared to Rs 139860 crore as at the end of March 2007, registering a growth of 19.02 percent on y-o-y basis. CASA (Current and Savings) Deposits at 42.99 percentage of the total deposits continued to be amongst the highest in the industry. 3 Advances at the end of March 2008 increased YOY by 23.71 percent to Rs 119502 crore, as compared to Rs 96597 crore at the end of March 2007. 4 - Retail credit (excluding traders) increased by 18.54 percent to Rs 18834 crore at the end of March 2008. Retail loans constituted 15.57 percent of

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1 the Banks gross advances, as compared to 16.18 percent, as at the end of March 2007. 2 - Education loan a thrust area of the Bank has registered an increase of 49.95 percent to Rs 1035 crore. 3 - Housing loan of the Bank increased by 13.5 percent to Rs 7664 crore. 4 - As on Last Reporting Friday (LRF) of March 2008, the Priority sector (PS) advances amounted to Rs 43412 crore, accounting for 44.11 percent in the total adjusted Net Credit of the Bank. The Banks PS ratio was higher than the National Goal of 40 percent. 0 o Credit to Agriculture increased to Rs 19946 crore at the end of March 2008. Agricultural advances as percent to adjusted net bank credit at 18.94 percent was higher than the National Goal of 18%. 1 o Credit to SME increased to Rs 18198 crore at the end of March 2008, thus showing a growth of 25.41% over last year. 2 o Total Kisan Credit Cards (KCCs) issued so far is around 23.77 lakh, of which 2.58 lakh were issued during 2007-08. 3 o The Bank assisted 2108 farmers with Rs 11.77crore for repayment of debt taken from moneylenders. 4 o Restructuring/Rescheduling is done in 11723 cases amounting to Rs 60 crore for farmers in distress and farmers in arrears. 5 o 1056 tenant farmer groups extended credit of Rs 9.39 crore. 6 o PNBs 8 Farmers Training Centres (FTCs) trained 1.35 lakh persons, including 18900 women. The FTC introduced a scheme, called Kisan Bandhu whereby 5 local youth have been inducted and trained at each FTC, who are actively pursuing the task of financial inclusion by visiting the doorstep of villagers. 5 As at 31st March 2008.The Banks investment portfolio (constituting 27.09 percent of total assets) rose by 19.48 percent to Rs 53992 crore. As at Mar08, of the total SLR portfolio about 86% was in the HTM category. Further, in the current fiscal bank has transferred securities worth Rs. 2104 cr from AFS to HTM thereby raising the proportion of SLR portfolio in HTM category to 88%. 4. NPA Administration During the year 2007-08, the Bank not only stepped up its follow up & recovery efforts but also contained slippages through effective credit management practices. As a result of the concerted efforts made, the ratio of

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Gross NPAs to Gross Advances declined to 2.74 percent from 3.45 percent last year, while, the ratio of net NPAs to net Advances declined to 0.64 percent (0.76 percent last year). As at 31 st March 2008 the Gross NPA stood at Rs.3319.3 cr and the Net NPA at Rs753.8 crore. NPA coverage ratio stood at 77.3 percent. 5. Financial Inclusion With a vision to reach the underbanked population by providing financial services at a fair cost, the Bank declared the Year 2008 as the Year of Financial Inclusion. 1 - Bank has already achieved 100% financial inclusion in 11043 villages. The work of 100% financial inclusion is going on in 198 districts identified by SLBC/RBI/State Governments for financial inclusion. 2 - Opening No Frill accounts: The Bank along with its RRBs has opened 10.70 lakh No Frill accounts by the end of March 2008 under PNB Mitra Scheme . 3 - With the holistic approach of providing basic financial services to the financially excluded poor, the Bank has identified 27 pilot project sites for launching technology enabled financial inclusion through Business Correspondents/ Business Facilitators. Of these 20 projects are in rural areas, 7 are in urban areas. 4 - Out of 20 rural financial inclusion projects, the Bank has already launched 6 Pilot Projects at Neemrana (Rajasthan), Tineri Panchayat (Bihar) Gaya (Bihar), Saharanpur (UP), Chandigarh (Rural) and Kullu (H.P). 5 - The Bank plans to run urban financial inclusion pilots at 7 centres wherein in the initial phase the endeavour would be to cover mobile population, hawkers, rag pickers, socially challenged and other unserved sections. 6 - The Bank has launched 2 Rickshaw projects at Varanasi (UP) and Patna (Bihar), which are unique initiatives for assisting the rickshaw pullers to supplement their daily livelihood. 7 - An innovative initiative for empowerment of women by bringing them under banking fold was launched at Lallapura, an area situated in the heart of Varanasi City, comprising mainly of weavers of traditional Banaras Silk.

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1 - Enthused by the RBI directive, PNB being SLBC convener in two States - Haryana and Punjab has given greater drive to financial inclusion in these States. Moreover, in these two States, the Bank has opened 9 Financial Literacy and Education Counseling Centres with the objective of building abilities of the common people for absorption of credit and its proper utilization for income generating activities. 2 - Dedicated Micro finance branch at Mukundpur in Delhi exclusively for financial inclusion of the urban poor. 3 - Under Financial Inclusion, the Bank plans to cover 30,000 villages and 75 million people by 2010. The Bank is looking at introducing new products such as health insurance, micro insurance and pension for the rural population. 6. Global Forays Backed by strong domestic performance, the bank is to realize its global aspirations in order to serve its customers who are increasingly going global and to serve the NRIs/PIOs. In pursuit of the Banks objective to have larger international presence, the bank has already set up a subsidiary at London (UK), branches at Kabul & Hong Kong and representative offices at Almaty (Kazakhstan), Dubai (UAE) & Shanghai (China). The U.K subsidiary PNB International Ltd (PNBIL) was operationalised w.e.f 10th May 2007 with one branch each at Southall and Gresham Street, London. The subsidiary earned profit during first year of its operation. In addition to branches at Kabul and the Off shore Banking Unit at Mumbai, a new branch was opened at Hong Kong w.e.f 17th December 2007. It caters to retail as well as wholesale banking segments. The bank has representative offices at Almaty (Kazakhstan), Dubai (UAE) & Shanghai (China). The Bank also plans to upgrade its representative office in Shanghai to a branch. 1 The Bank has in place RBI approval for opening a Subsidiary in Canada, an Offshore Banking Unit in Singapore and a branch at DIFC, Dubai, UAE. The Bank is also in the process of finalising a joint venture Bank in Bhutan with local partners. Besides, the Bank has identified Norway

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1 as a potential centre for business and proposes to set up a representative office there. Total Export-Import turnover of the Bank increased by 8.69 percent to Rs 61650 crore. Export credit has increased by 14.4 percent to Rs 7475 crore. 7. Information Technology Punjab National Bank was the first bank in India to introduce CBS on Finacle. During the year the bank continued its CBS initiatives. The ambitious target of bringing 3200 Service Outlets within the fold of CBS by the end of March 2008 has been surpassed by achieving migration of 3503 Service Outlets on CBS across 1508 centres and covering over 90% of business. Bank has one of the Largest Network of CBS SOLs on FINACLE & on single instance database and globally there is no precedent to verify the scalability of the operations at such large scale. Hence to ensure the feasibility & efficient functioning of the Core Banking System for larger number of concurrent users, a stress test of Core Banking System was conducted at UK at SUNs Benchmark Centre. The main objective was to test the scalability of the system on the given (single instance database) and on RAC (Real Application Cluster) for ascertaining the peak scalable level in both the environments. The test was conducted on hardware and software on a simulated environment by teams of M/s Sun, M/s Oracle and M/s Infosys with satisfactory results. The stress test result revealed that the 35000 concurrent users can access the system in both the environments. Having successfully completed the Stress Test, the Bank will bring out major technology up-gradations this year with a view to establish feasibility for having 6000 branches and one lakh terminals under the Core Banking Solutions. This will also take care of major Financial Inclusion initiatives launched by the Bank in Indo-Gangetic Belt of the country. The Bank would also set up a Zero Data Loss (ZDL) site which will be synchronous with the Data Centre to take care of any emergency with a view to provide 24x7x365 uptime of services. 1 - Bank has made online share trading facility live. The customers can trade through this facility and subscribe to IPOs, Mutual funds, debt instruments etc. The trading portal ensures complete confidentiality of transactions with absolutely no manual intervention.

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- 3033 RTGS (Real Time Gross Settlement System); 3019 NEFT (National Electronic Funds Transfer) and 1395 SFMS (Structured Financial Messaging System) branches. - ATMs (PNBs) : 1516 - ATMs (sharing arrangement): More than 28500 - Internet Banking Services: used by 3.37 lakh users. - As a unique initiative Bank has launched 4 mobile ATMs, in order to cater to the needs of the people in unbanked rural areas and slum areas.

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8. Branch NetWork With 4589 offices including 322 extension counters, the Bank has the largest network of offices amongst nationalized banks. 9. Recognition : 2007-08 1 - The Banker, a London based magazine, ranked PNB at 255 th place, amongst top 1000 banks in the world (2007). 2 - Forbes Global 2000, an elite list of worlds giants and fast growing companies rated PNB at 1166 th position as compared to 1308 th in the year 2007. 3 - Bank was bestowed Golden Peacock Award for excellence in corporate governance by the Institute of Directors for the FY 2006-07. 4 - Bank was bestowed Amity Corporate Excellence Award by Amity University, Noida. 5 - Bank has got National Award for excellence in lending to Micro Enterprises. 6 - In recognition of the banks effort towards financial inclusion, Dr. k C Chakrabarty, CMD was awarded Skoch Challenger Award 2008 Inclusion Leader of the yearfor Financial Inclusion 7 - In recognition of Banks efforts to offer low cost technological solutions for better customer experience bank has been awarded: 0 o CIO 100 Award (2007) by IDG Media Pvt. Ltd; 1 o PCQuest Best IT Implementation Award (2007) 2 o Computer Associates Excellence Award (2007)

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ACTIVITIES PERFORMED BY PUNJAB NATIONAL BANK


With its presence virtually in all the important centres of the country, Punjab National Bank offers a wide variety of banking services which include corporate and personal banking, industrial finance, agricultural finance, financing of trade and international banking. Among the clients of the Bank are Indian conglomerates, medium and small industrial units, exporters, non-resident Indians and multinational companies. The large presence and vast resource base have helped the Bank to build strong links with trade and industry. Punjab National Bank is serving over 3.5 crore customers through 4540 Offices including 421 extension counters - largest amongst Nationalized Banks. 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. While among top 1000 world banks, The Banker, the leading magazine in London, has placed PNB at the 248th position, the bank features at 1308th position among Forbes Global 2000 list of global giants and fast growing 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. Strong correspondent banking relationship which Punjab National Bank maintains with over 200 leading international banks all over the world enhances its capabilities to handle transactions world-wide. Besides, bank has Rupee Drawing Arrangements with 15 exchange companies in the Gulf and one in Singapore. Bank is a member of the SWIFT and over 150 branches of the bank are connected through its computer-based terminal at Mumbai. With its state-ofart dealing rooms and well-trained dealers, the bank offers efficient forex dealing operations in India. The bank has been focussing on expanding its operations outside India and has identified some of the emerging economies which offer large business potential. Bank has set up representative offices at Almaty: Kazakhistan, Shanghai: China and in London. Besides, Bank has opened a full fledged Branch in Kabul, Afghanistan.

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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. Providing 24 hours, 365 days banking right from the PC of the user, Internet Banking offers world class banking facilities like anytime, anywhere access to account, complete details of transactions, and statement of account, online information of deposits, loans overdraft account etc. PNB has recently introduced Online Payment Facility for railway reservation through IRCTC Payment Gateway Project and Online Utility Bill Payment Services which allows Internet Banking account holders to pay their telephone, mobile, electricity, insurance and other bills anytime from anywhere from their desktop. 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. It enables the card holder to buy goods and services at over 99270 merchant establishments across the country.

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OBJECTIVES OF THE PROJECTS


To know the role of banks in retail loans segment. To explore the working of retail hub of PNB. To know the credit scheme of PNB regarding retail loans. To know how the retail loans are sanctioned. Criteria to test the credibility of customers. To know the documents required for financing retail loans. To know about the monthly installment paid by the customers. To know the repayment procedure of loan from the customers.

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METHODOLGY OF THE PROJECT


Primary methods
Interaction with entire staff of PNB retail hub. Study the following loan documents and loan form attached for sanctioning and maintaining the loan Permanent account number Address proof(electricity bill, telephone bill,etc.) Age proof Account statement of last 6 months. NOC Salary statement of last 3 years. Analyze the case studies for sanctioning the loan proposals. Visit to following areas along with marketing executives for promoting the loan. Peoples Honda showroom Hindustan college of science and technology

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Secondary methods

Study the loan circular regarding education, two wheeler, reverse mortgage loan Take the help from the broachers and pamphlets, provided by PNB. VISIT TO THE FOLLOWING WEBSITES:

www.pnbindia.com www.yahoo.com www.google.com

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LIMITATIONS OF THE PROJECT


We did not get any opportunity to organize the canopy in education fair due to arisen of heavy expenses. Education camp was unsuccessful in college because admission did not take place during our training time. We could not study the loan proposal of two wheeler loan. Customers do not prefer to take reverse mortgage loan.

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PNBS RETAIL LOAN SCHEMES

PUNJAB National Bank (PNB) has been taking all efforts in meeting the varied aspirations of customers. It strives hard to improve the banking experience of the customers by creating every possible convenience as far as their financial needs are concerned.

Over the years, PNB has come out with number of customer-friendly retail loan schemes on liberal terms and conditions. Innovation through launch of new products and customer-friendly value additions in its products has been its strength. The range of offerings includes finance for housing, vehicles, and education, personal, mortgage and future lease rental loans, apart from personal loan for pensioners, and loans against gold and jewellery.

The bank focuses on development of entrepreneurship skills in women and its various schemes provide finance to them covering a wide range of activities. In the recent past, the bank has formulated many new schemes, including one for meeting the finance requirement of doctors and a combination of offering through its `Fin-Basket Scheme'

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EDUCATION LOAN
Education is a right of every child. India can shine when every child in India get proper education. To make possible for every child to get higher education PNB provides very attractive education scheme by which every student can get benefit who have desire of higher education. PNB education scheme is like a dream come true for every student. The details of this scheme are as follows.

Objective :The schemes aims at providing financial assistance to deserving / meritious student for pursue, professional and technical education in India and abroad .

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Student Eligibility:a) Should be an Indian National. b) Secured admission to Professional / Technical courses through Entrance Test / Selection process. c) Secured admission to foreign University / Institutions. d) Student should have secured pass marks in the qualifying Examination for admission to Graduation Courses. e) Secured admission through selection procedure.

Expense Considered For Loan :a) Fee payable to College / School / Hostel. b) Examination / Library / Laboratory fee. c) Purchase of books / equipments / instruments / uniforms.Secured admission to foreign d)
University / Institutions. Caution Deposit / Building Fund / Refundable Deposit supported by Institution Bills / Receipts. Travel Expenses / Passage money for studies abroad. Purchase of computers - essential for completion of the Course.

e) f) g) Boarding and lodging expenses in recognised Boarding Houses / private accomondations.


Any other expense required to complete the course - like study tours, project work, thesis etc.

Course eligible:
Studies in India:-For school education, graduation, B.A, B.COM, B.SC, P.G Courses, professional/Technical courses. Studies in abroad:- For job oriented graduation /PG,professional/technical courses offered by reputed universities.

Quantum of Finance:Need based finance, subject to repaying capacity of the parents / students with margin and the following ceilings :-

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For studies in India: Maximum Rs.7.50 lacs. For studies abroad: Maximum Rs.15.00 lacs.

Margin :Upto Rs.4.00 lacs: Above Rs.4.00 lacs: Studies in India Studies Abroad Nil. 5% 15%

Securities:Upto Rs.4.00 lacs: Above Rs 4.00 lacs and Upto Rs 7.5 lacs: Above Rs 7.5 lacs: No Security. 3rd party guarantee acceptable to the Bank. Collateral Security of Suitable value or suitable 3rd party guarantee.

The security can be in the form of land / building / Govt. Securities / Public Sector Bonds / Units of UTI, NSC, KVP, LIC Policy, Gold, Shares / Debentures, Bank Deposit in the name of the student parent / guardian or any other third party with suitable Margin The document should be executed by both the student and the parent/guardian.

Rate of Interest :In Punjab national bank,currently two schemes are running in context to education loan

PNB VIDYA LAKSHYA PURTI SCHEM


Upto Rs. 4 lacs Above Rs.4 lacs

BPLR+Term Premia minus 1.25 BPLR + Term Premia

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PNB SARVOTTAM SHIKSHA SCHEME Up to Rs.7.50 LACS BPLR+ Term premia minus 2.25% BPLR + Term premia minus 0.75% Above Rs. 7.50 lacs Term premia of 0.50% p.a. shall be added for repayment

period of 3 years & above.


The interest shall be debited monthly on simple basis during the Repayment holiday/ Moratorium period. Penal Interest @ 2% be charged for above Rs.4.00 lacs for the overdue amount and overdue period. 1% Interest concession for servicing of interest during the study period regularly is allowed at the time of start of repayment period of loan.

Repayment:VIDYA LAKSHYAPURTI SCHEME


Repayment Holiday / Moratorium Coursee period + 1 year OR 6 months after getting job, whichever is earlier.

SARVOTTAM SHIKSHA SCHEME


Repayment holiday/moratorium Course period + 6 months

The Principal and interest is to be repaid in 5-7 years after commencement of repayment. If the student is not able to complete the course within the scheduled time, extension of time for completion of course may be permitted for a maximum period of 2 years.

Disbursement :The loan to be disbursed in stage as per the requirement / demand directly to the institutions / vendors of books / equipments / instruments to the extent possible.

Upfront Fee:NIL

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Documentation Charges :Upto Rs. 4 lacs Above Rs.4 lacs

Rs.270/- + Service Tax & Education Cess Rs.450/- + Service Tax & Education Cess

Additional benefits provided to the student by PNB: Reimbursement of related expenses such as admission fee, monthly fee, Boarding and lodging expenses in recognized Boarding Houses etc. already incurred by way of loan taken from own sources (to meet the contingency) by the applicant, if claimed within 3 (three) months of such payment and before consideration of the loan by the Bank. Second time Education Loan can be sanctioned to the same student borrower for completion of next higher course.

Documents Required:a) b) c) d) e) f) g) Loan application on Bank's format. Passport size photograph. Proof of Address(Permanent) / ID Proof. Proof of Age. Proof of having secured pass marks in last qualifying examination. Letter of admission in professional, technical or vocational courses. Prospectus of the course wherein charges like Admission Fee, Examination Fee, Hostel Charges etc. are mentioned. h) Details of Assets & Liabilities of parents. i) In case loan amount is above Rs.4.00 lacs : i. Particulars of Guarantors and details of their Assets & Liabilities. ii. If immovable property offered as Collateral Security - copy of Title Deed, Valuation Certificate and Non-encumbrance Certificate from approved Lawyer of the Bank.

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j) Photocopy of Passport & Visa, in case of study abroad. Any other document/information, depending upon the case and purpose of the loan.

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TWO WHEELER LOAN

A person wants certain luxuries for enjoying his life and two wheeler is one of them. a two wheeler gives him convenience to travel one place to another. Now days it become a status symbol of youngster in society. So it becomes a need of every human being but some people does not have the capacity to pay a huge amount at a time but they can pay the price in installment so for these people many banks offer car loan schemes. In which they can buy and pay its price in installment. The features of PNB saarthi scheme are as follows.

ELIGIBILITY:a. Individuals b. Students, aged 18 years and above, with parent as co-borrower; c. Business concerns (Corporate or non-corporat.)

Purpose:For purchase of new two wheeler . Scooter , Motor cycle, Scooterrete, Moped .

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Amount Of Loan :Maximum Rs. 90000.

Margin :5% to 30 %

Security: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. Guarantee of spouse, if employed or third party guarantee is acceptable to Bank.

Rate of Interest :BPLR - 1.75% to BPLR + 2% (Presently BPLR is 12.50%) Term premia of 0.50% be added in all loans repayable in 3 years or above.

Repayment:For scooter and Motorcycle: Maximum of 60 EMIs. For Scooterrete and Moped: Maximum of 36 EMIs.

Upfront Fee & Documentation Charges:Upfront Fee: Rs.200/- except for students in which case it shall be NIL. Docmumentation Charges: Rs.300/-

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All other terms & conditions of the scheme as applicable.

Following Documentation Along With Application :1. 2. 3. 4. 5. 6. Identity Proof / Pan Card Residence Proof Driving License / Under Taking Last Educational Qualification Certificate Last 6 month bank account statement Detail of assest and liabilities with proof {if own ? spouse / parent house ; house tax receipt photocopy of regd. title deed } 7. Last three years IT Return with computation Or Latest salary slip with form 16 / appointment letter from employer.

Guarantor Documents :1. Identity Proof / Pan Card 2. Residence Proof 3. Last 6 month bank account statement 4. Detail of assest and liabilities with proof {if own ?spouse / parent house ; house tax receipt photocopy of regd. title deed 5. Last three years IT Return with computation Or Latest salary slip with form 16 / appointment letter from employer.

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REVERSE MORTGAGE LOAN-PNB BAGHBAN FOR SENOOR CITIZEN


PNB is the first Public Sector Bank to come out with a Reverse Mortgage concept based product for senior citizen titled "PNB Baghban". The product addresses one of the very important requirements of the society in the fast changing culture of Indian society. The salient features of the productare given hereunder

OBJECTIVES:To address the financial needs of senior citizens owning self occupied property (house), for leading a decent life.

Eligibility:The residential house/flat owner, who is resident of India, of the age of 60 years & above, is eligible to raise the loan under this Scheme.

Qualifying / Maximum aaamount of loan /Margin:The qualifying amount of loan will depend on the realisable value of residential property, after maintaining margin of 20%. The maximum qualifying amount of loan, alongwith interest, shall be restricted to Rs.100 lac.

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Rate Of Interest :10% p.a. (fixed) subject to re-set clause of five years.

Disbursement / Tenor of loan :The loan shall be extended as regular fixed monthly payments during the loan period. i.e. 10-20 years or till the death of the last surviving spouse, whichever is earlier. Depending on the age of the beneficiary, a chart containing the amount of monthly instalments (calculated on "Reverse Annuity basis) to be paid to the senior citizen borrower for different tenors of loan per lac of rupees is as under :-

Tenor (yrs) 10 Monthly Installment (Rs.)

11

12
360

13
315

14
275

15
240

16
215

17
190

18
170

19 20
150 135

490 420

Payment of lump sum amount under the scheme can also be considered selectively on merit, for meeting housing needs and medical exigencies of senior citizen borrowers.

Security:The loan shall be secured by way of equitable Mortgage of self aquired / self occupied Residential Property in favour of the Bank.The property will be revalued every 5 years and monthly loan installment will be re-fixed keeping in view revised ROI (after reset) and valuation of property.

Repayment:Settlement of loan, along with accumulated interest, to be met by the proceeds received out of sale of residential property and any surplus to be paid to heirs. The loan will, as such, become due for recovery and payable six months after death of the last surviving spouse. However the legal heirs/legatee of the deceased borrowers will be given first option to settle the loan, alongwith the accumulated interest, without sale of the property.

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Pre-payment

of Loan :-

The option to pre-pay the loan at any time during the currency of loan or later, is available. However, in case there is any takeover of loan by other financial institution/ bank, a charge of 2% on the amount taken over, will be levied.

Upfront Fee:Amount equivalent to half month's loan instalment subject to Maximum of Rs.15,000/- + Service Tax & Education Cess.

Documentation / Inspection Charges :NIL

Right of Recccission :-

After the loan is sanctioned senior citizen borrower(s) shall be given upto 10 days time to relook into his requirements and if he so wishes to cancel the transaction for any reason whatsoever.

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RETAIL LENDING IS BLESSING OR CURSE FOR THE BANKS?


Retail lending is a boon for the banks due to the following facts: It gives higher return. It is easy to sanction & disburse. Since no expertise is required. Chances of going the account is are remote. Due to diversified and large number of account with smaller loan amount, credit risk is not very high. Follow up is easy and inexpensive. However retail lending may be prove to be bane if the banks dont observe discipline & precaution in appraising the proposals and also because of lack of follow up. So suggestions for follow up in retail lending are as following. Before sanctioning of any loan under the retail lending scheme, branch officer should invariably visit the residence or the work place of the applicant to avoid impersonification / fraud. Repaying capacity is the most important factor in these type of schemes. So before lending the loan repaying capacity should be checked. Since in most of the cases the money is lend for unproductive purpose cant repay any amount.
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Contribution of the applicant should be adequate.

Securities in the account should be properly valued and adequate to cover the loan amount. Branch manager should have list of telephone number of the borrowers, so that the borrower may be contacted in case of any default in paying the loan installment. The last but not the least is the quick reminder to the borrower whether on phone, by letter or by personal visit in case term loan installments are not received from them. So from the firm view that if above points are kept in mind before appraising any proposal of retail lending , than retail lending can be proved to be most profitable business for the bank.

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CONCLUSION
Now a days the banking scenario is changing quite rapidly. In last decade of 20th century the Indian banking industry open its door for private banks and international banks .So because of entrance of these banks in Indian banking industry the expectation of customer is increased and they expect world class services also from Indian banks. Because of globalization of business, liberalization of economies and integration of markets of whole world opened new doors of prosperity and growth for humans and this increase both the household income and urbanization of people, which has led to substantial growth in disposable income. These people are able to spend money to improve his life. So in brief they are more materialistic. So they now become an opportunity for bank. So now Punjab national bank focus on retail sector because they know that retail banking is a sector which need constant innovation and because of only by innovative and competitive products the bank can make its own space among people. This requires product development and differentiation, innovation, technological up gradation, cost reduction and home/mobile/electronic banking etc. Launching of new products is not sufficient in todays competitive environment so the bank have to open his eyes very well because only this helps bank most to adopt the changing banking enviourment .Pricing of product with competitive edge is can become one of the reason of the growth of bank schemes. so the Punjab national bank change its schemes time to time on the basis of general survey which include public as well as its own employees. So by keeping these things in mind PNB appoint Boston consultancy group in the year 1999 to understand exactly the need of customers.
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So as to cater the need of customer the Punjab national bank offers a number of advanced retail schemes (retail loans and deposit). Punjab national bank also provides his customers different services of international level like e-banking, credit card, on line services etc., according to the changing banking scenario to meet the requirements of customer. Punjab national bank has a successful golden history of 110 years. In which it see many up and downs but now in todays banking scenario it is one of the most successful banks and give tough competition to its competitor just because of its advanced schemes and services and this helps most in winning the trust of people. Punjab national bank makes its terms and condition very easy with less paper work. so the people can take help from bank in emergency also and this makes Punjab national bank a customer friendly bank and people feel very comfortable in dealing with bank. This can be proving by figures which show. So we can say that Punjab national bank is that bank where we can really bank our trust.

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OBSERVATIONS

1. The employees here are very dedicated 2. The procedure followed is very systematic 3. The record maintained here is on fair basis and very systematic 4. The opportunities are grabbed as and when they occur. 5. The staff members are treat each other with respect and dignity 6. Being the management trainees, we were in the department for a short period of time but were treated as if we were a part of their family. 7. Every sort of information, which we required, was given to us. 8. We received help from almost every member to whom we approached. 9. Although this department being the busiest department but time was taken out for us somehow and were taught and told what we needed to know. 10. Besides this proper utilisation of the resources takes place here.

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BIBLIOGRAPHY

PNB circulars in context to education, two wheeler & reverse mortgage loans.. Study material provided by PNB. PNBs brochures and pamphlets. Visited at various sites:www.yahoo.com www.pnbindai.com www.google.co.in

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