SUMMER TRAINING PROJECT REPORT

PUNJAB NATIONAL BANK

Submitted in partial fulfillment of the requirement of Bachelors of Business Administration (BBA) GURU JAMBESHWAR UNIVERSITY,HISAR

PNB WITH THE REFERENCE TO A.T.M & INTERNET BANKING

Training Supervisor: MR. T. P. VERMA Branch Manager

Submitted By: AJEET KUMAR VERMA Enrolment no- 06511242517

SESSION 2006 2009 GURU JAMBHESHWAR UNIVERSITY HISAR-125001

PREFACE
Theoretical and practical knowledge are the two different but interrelated aspects, which makes the concepts clear and vision bright and help in facing the actual situations. Although theory is first and important step which acts as a base and creates a picture in mind for a thing but practical knowledge which bridges the gap between the imaginations and realities, so the practical knowledge is very important for developing thoughts and giving shape to them. This type of training program is very helpful as: It installs a feeling of belongingness and of expertness. Development of better understanding of concepts. Generate morale. Acquaints student with job performance standards.

This practical training could be taken as a beginning of indoctrinate into the ways of business organization and it is the first step towards building a professional career, which would be helpful in future prospects. This project deals with the analysis of services provided by PNB. For the ease the whole project has been divided into various chapters: Starting with the introduction of the banking industry and the profile of Punjab National Bank with its SWOT analysis. Next Chapter describes the Objectives, Methodology, scope and significance around which the entire project study revolves. Chapter three deals with the services provided by the bank .The conceptual discussion involves steps, aspects, and tools used by bank. During the

research it is realized that the practical application of various theoretical knowledge gained in the classroom learning is very useful. Then, services like internet banking and debit card services are explained in every respect. Next chapter deals with data analysis from where various data has been collected. A small set of limitations; conclusions and suggestions have also been given in the report to make the study useful. In the way of practical work in the banking operations there was limitation of time during the training as finance is in itself a very broad area and only a few aspects have been covered in the duration. I have tried my best to make this training fruitful and bring various new areas of knowledge.

ACKNOWLEDGEMENT
I take this opportunity to express my deep gratitude to my honorable project guide for assigning an extremely challenging project thereby giving unique opportunity to meaning contribution of growing and vibrant bank like Punjab National Bank It gives me immense pleasure to take the opportunity to remember and thanks the personalities who have involved with the project work. I express my thanks and deep gratitude who are directly and indirectly associated in the completion of this project I further like to thank the executive of the bank and libraries without whom this project would have ever been completed. Finally I thank my friends for cooperation in this project. Last but not the least, my sincere thanks to my parents who helped me financially and orally.

AJEET KUMAR VERMA Enrollment No. 06511242517 Batch 2006-2009 DATE -

INDEX
CONTENTS Chapter 1 Introduction 1.1. Overview of Industry as a whole 1.2. Profile of the Organization 1.3. Problems of the Organization 1.4. Competition Information 1.5. S.W.O.T Analysis of the Organization Chapter 2 - Objective & Methodology 2.1. Significance 2.2. Managerial usefulness of the study 2.3. Objectives 2.4. Scope of the study 2.5. Research Methodology Chapter 3 Conceptual Discussion Chapter 4 - Data Analysis Chapter 5 Findings and Recommendations ANNEXURES BIBLIOGRAPHY 26 26 26 26 27 28 51 59 2 12 22 23 24 PAGE NO

CHAPTER 1

INTRODUCTION

INTRODUCTION
1.1 OVERVIEW OF THE BANKING SECTOR
Banks in India

Introduction

Banking dates back to 1786, the first In India the banking sector is segregated bank established in India, then the as public or private sector banks, nationalization of banks in 1969 and cooperative banks and regional rural recently the liberalization of the same banks. Foreign banks have been given a since 1991. Banking Services in India different head followed by upcoming foreign banks in this section. Financial and Banking Sector Reforms

Bouquets of services are at customers The last decade experienced a complete demand in to days banking system. reform in the financial and banking Different types of accounts and loans, sector. The capital and financial market, facilitating with plastic money and banking & non-banking organization and money transfer across the globe. Reserve Bank of India (RBI) financial instruments was redressed towards development. IDBI

RBI is the central bank of the country Industrial Development Bank of India since 1934. It regulates, controls credit, (IDBI) is the tenth largest bank in the issue licenses and functions as banker of world in terms of development. all banks and the government. Easy Banking Banking Services for NRI in India

With the advancement of technology, This section discusses upon the services banking sector has become more easy, provided to the NRI in India through fast, accurate and also time saving. different dedicated account. FAQ makes ATMs, Mobile Banking, SMS Banking the section more comprehensive. and Net Banking are only the tip of an ice-berg. Indian Banks Association (IBA) Proxy Banking in India

The

functions

of its

Indian

Banks Only 42% of rural households have bank

Association

(IBA),

organizational accounts. Proxy Banking, a bank through the untouched population in interior India.

structure, the addresses and contact Kiosk and ATM challenges to penetrate details are discussed in this section.

Providers of financial services:

Retail banks - such as HSBC, RBS and Halifax Bank of Scotland (HBOS). These are the banks whose branches are generally seen on the high street. Their services are offered to the locality and in formal terms can be described as involving the transfer, borrowing and lending of money (sterling and foreign currency) to private customers and sole traders and partnerships. Retail banks are companies (normally listed on the stock market) and are owned by and run for their shareholders. Today, it is commonplace for these banks to offer the full range of financial services at competitive prices to not just their own customers but to the public at large.

Commercial banking - this means dealing with corporate or commercial customers rather than individuals. Many of the major retail banks have commercial banking arms. Client size can range from small start-up companies to major corporations. Increasingly, commercial banks are moving into activities once considered to be the concern of investment banks.

Private banking - these are specialist banks offering services to high net worth individuals (the wealthy). The range of financial services offered is wide and can be tailored to the needs of the customer, including asset management, estate planning, etc. Opportunities to work with these organizations are available but are fewer, given that this is a smaller sector (e g compared to retail banking where employment opportunities are greater). Key players include Coutts and Co and Cater Allen, which are, in turn, part of the banking groups RBS and Abbey, respectively.

Building societies - financial institutions previously offering mainly savings accounts and mortgages. In recent years, many have diversified to offer a range of personal financial services, including current accounts, credit cards,

loans, insurance and estate agency services. Building society branches are based on high streets, much like retail banks. They are mutual institutions with no external shareholders. Most of their customers who have a savings account or mortgage have certain rights to vote, as well as attend and speak at meetings. In recent years, many former building societies converted to banks.

Supermarkets - although the new kids on the block, supermarkets now offer life insurance, savings accounts, cash mini-ISAs, credit cards, loans and car, home and pet insurance. For the 'time poor', the supermarket offers the true 'one stop shop' of the 21st century in a way that banks can't. Customers can now organize their food, clothes and money matters on one website from the comfort of their own home. Most of the financial products offered by supermarkets are actually subsidiaries of big banking groups. For example, TESCO Personal Finance Limited is part of the RBS group.

Most large retail banks and building societies recruit graduates into graduate training programs. These can lead to general branch or head office management or specialist posts. For example, they may train graduates into roles in marketing, human resources and finance (e.g. accountancy and treasury). They also have a need for IT professionals, given their reliance on technology to deliver their services. Specific degree disciplines are not necessarily sought for generalist positions in this sector though some employers may express a preference for business, economics and quantitative and analytical degrees or to see these subjects within the degree offered. For specialist functions, employers may require degree subjects that are directly relevant and, in some cases, relevant experience, for example, for marketing or IT positions.

HISTORY
The evolution of the modern commercial banking industry in India can be traced to 1786 with the establishment of bank of Bengal in Calcutta. Three presidency banks were set up in Calcutta, Bombay, and Madras. In 1860, the limited liability concept was introduced in banking, resulting in the establishment of joint stock banks like Allah bad Bank ltd., PNB ltd. bank of Baroda ltd. and bank of India ltd. In 1921, the three presidency banks were amalgamated to form the Imperial Bank of India, which 4

took on the role of a commercial bank, a bankers bank and a banker to the Govt. The establishment of the RBI as the central bank of the country in 1935 ended the quasicentral banking role of the Imperial Bank of India. In order to serve the economy in general and the rural sector in particular, the All India Rural Credit Survey Committee recommended the creation of a state partnered bank taking over the Imperial Bank of India and integrating with it, the former state owned and state associate banks. Accordingly, the State bank of India (SBI) was constituted in 1955. Subsequently in 1959, the SBI (Subsidiary Bank) Act was passed, enabling the SBI to take over 8 former state-associate banks as its subsidiaries. In 1969, 14 private banks were nationalized followed by 6 private banks in 1980. Since 1991 many financial reforms have been introduced substantially transforming the banking industry in India.

RESERVE BANK OF INDIA

The RBI is the central banking and monetary authority in India. The RBI manages the countrys money supply and foreign exchange and also serves as a bank for the GOI and for the countrys commercial banks. In addition to these traditional centralbanking roles, the RBI undertakes certain developmental and promotional activities. RBI issues guidelines, notifications, and circulars on various areas including exposure standards, income recognition, asset classification, provisioning for non- performing assets, investment valuation and capital adequacy standards for commercial banks, long-term lending institute. And non- banking finance companies. The RBI requires these institute to furnish information relating to their businesses to the RBI on a regular basis.

COMMERCIAL BANKS
Commercial Banks in India have traditionally focused on meeting the short-term financial needs of the industry, trade and agriculture. At the end of Sept. 2007, there were 291 scheduled commercial banks in the country, with a network of 67221 branches. Scheduled commercial banks are banks that are listed in the II Scheduled to the RBI Act, 1934, & may further be classified as PSU, Private sector banks & foreign banks. IDBI was converted into a banking company by the name of INDUSTRIAL DEVELOPMENT BANK OF INDIA LTD. with effect from Oct.

2007 & is a scheduled commercial bank. Scheduled Commercial bank has a presence throughout India, with nearly 70.1% of bank branches located in rural or Semi- urban areas of the country. A large no. of these branches belongs to the Public Sector Banks.

PUBLIC SECTOR BANKS

Public Sector banks make up the largest category of banks in the Indian Banking System. There are 27 public sector banks in India. They include the SBI & its associate banks & 19 nationalized banks. Nationalized banks are governed by the banking companies (Acquisition & transfer of U/T) Act, 1970 & 1980. The banks nationalized under the banking companies (Acquisition & transfer of U/T) Act, 1970 are referred to as Corresponding new banks. PNB is a public sector bank nationalized in 1969 and a corresponding new bank under the bank acquisition Act. At the end of Sept. 2007, public sector banks had 46782 branches & accounted for 74.9% of the aggregate deposits & 70.5% of the outstanding Gross bank credit of the scheduled commercial banks

REGIONAL RURAL BANKS

Regional Rural banks were established from 1976 to 1987 jointly by the central Govt. , State Govt. and sponsoring public sector commercial banks with a view to develop the rural economy. Regional rural banks provide credit to small farmers, artisans, small entrepreneurs & agricultural laborers. There were 196 regional rural banks at the end of Sept. 2007 with 144430 branches, accounting for 3.6% of aggregate deposits and 3.0% of gross bank credit outstanding of scheduled commercial banks.

PRIVATE SECTOR BANKS

After the first phase of bank nationalization was completed in 1969, the majority of Indian Banks were public sector banks. Some of the existing private sector banks, which showed signs of an eventual default, were merged with state- owned banks. In July 1993, as part of the banking reforms process and as a measure to induce competition in the banking sector, the RBI permitted entry by the private sector into the banking system. This resulted in the introduction of 9 private sector banks. These 6

banks are collectively known as the new private sector banks. There are 9 new private sector banks operating at present.

FOREIGN BANKS
At the end of June 2007, there were 32 foreign banks with 217 branches operating in India, accounting for 4.6% of aggregate deposits and 7.0% of outstanding gross banks credit of scheduled commercial banks. The Govt. of India permits foreign banks to operate through (i) branches (ii) a wholly owned subsidiary (iii) a subsidiary with aggregate foreign investment of up to 74% in a private bank. The primary activity of most foreign banks in India has been in the corporate segment. However, some of the larger foreign banks have made consumer financing a significant part of their portfolios. These banks offer products such as automobile finance, home loans, credit cards and household consumer finance. The GOI in 2006 announced that wholly owned subsidiaries of foreign banks would be permitted to incorporate wholly owned subsidiaries in India. Subsidiaries of foreign banks will have to adhere to all banking regulations, including priority sector lending norms, applicable to domestic banks .In March 2007, the Ministry of Commerce and industry, GOI announced that the foreign direct investment limit in private sector banks has been raised to 74% from the existing 49% under the automatic route including investment by FII .The announcement also stated that the aggregate of foreign investment in a private bank from all sources would be allowed up to a maximum of 74% of the paid up capital of the bank .The RBI notification increasing the limit to 74% is however still awaited.

CO-OPERATIVE BANKS
Cooperative banks cater to the financing needs of agriculture; small industry and self employed businessmen in urban and semi urban areas of India. The State land development banks and the primary land development banks provide long-term credit for agriculture. In light of the liquidity and insolvency problems experienced by some cooperative banks in fiscal 2001, the RBI undertook several interim measures to address the issues, pending formal legislative changes, including measures related to lending against shares, borrowings in the call market and term deposits placed with other urban cooperative banks. The RBI is currently responsible for supervision and regulation of urban co-operative societies, the National Bank for agriculture and Rural 7

Development, state co-operative banks and district central co-operative banks. The banking Regulation (Amendment) and Miscellaneous Provision Bill, 2003, which was introduced in the parliament in 2003, proposed the regulation of all co-operative banks by the RBI. The Bill has not ye been ratified by the Indian parliament and is not in force.

TERM LENDING INSTITUTIONS

Term lending Institutions were established to provide medium- term and long-term financial assistance to various industries for setting up new projects and for the expansion and modernization of existing facilities. These institutes Provide fundbased and non- fund based assistance to industry in the form of loans, underwriting, direct subscription to shares, debentures and guarantees. The primary long-term lending institutes. Include IDBI (converted into a banking company with effect from Oct, 2007), IFCI Ltd. Infrastructure development Finance Company Ltd. And Industrial Investment Bank of India and Industrial Credit Corporation of India Ltd. (prior to its amalgamation). The term lending Institutions were expected to play a critical role in industrial growth in India and, accordingly, had access to concessional govt. funding. However, in recent years, the operating environment of the term lending institutions has changed substantially. Although the initial role of these institutions. Was largely limited to providing a channel for Govt. funding to industry, the reform process required them to expand the scope of their business activities. Their new activities include: Fee based activities like investment banking and advisory services Short-term lending activity including loans and working capital loans.

CLASSIFICATION OF BANKS:
The Indian Banking industry consisted of 97 commercial banks, 196 regional banks, 52 Scheduled urban Co-operative banks, and 16 Scheduled state Co-operative banks. At present, the banking system can be classified into the following categories: 1. PUBLIC SECTOR BANKS Reserve Bank of India State Bank of India and its 7 associate banks Nationalized Banks

Regional rural Banks Sponsored by Public Sector Banks

2. PRIVATE SECTOR BANKS Old Generation Private banks New Generation Private Bank Foreign banks in India Scheduled Co-operative Banks Non- Scheduled Banks

3. CO-OPERATIVE SECTOR BANKS State Co-operative Banks Central Co-operative Banks Primary Agriculture Credit Societies Land development Banks Urban co-operative Banks State Land Development Banks

4. DEVELOPMENT BANKS IFCI IIBI SIDBI NABARD EXIM SCICI

In India the concept of Development Banks is being to be diluted as no of banks like ICICI, IDBI have converted into general banks. The RBI has a centralized control over all these banks. It performs a wide range of functions to: Issue Bank notes Supervise & administer exchange control and banking regulations and administer the Govt. policy Issue licenses to the foreign banks for operations in India Approve the licenses of operation for the private banks 9

Grant licenses to new banks and new bank branches.

Globalization, financial deregulation and improvement in technology have had a profound effect on the financial landscape in recent years. These developments have intensified competition and resulted in financial engineering through product innovation and business strategies. While market participants have now greater scope to diversify risk and manage it efficiently, this has also posed new risks and challenges to the financial system. Growth of financial firms across different business lines and across national boundaries has made the task of designing appropriate policies more challenging. Regulatory and supervisory policies are, therefore, constantly assessed regarding their capabilities to meet the challenges of containing systemic risk in the financial system. The main challenge for the supervisory authorities has been to maintain financial stability without curtailing the incentive to innovate. Keeping in view the changing landscape in the financial sector, the Reserve Bank has been suitably focusing its regulatory and supervisory framework to promote a stable and efficient financial sector. The main focus of the Reserve Banks recent regulatory and supervisory initiatives has been on prudential regulation and financial infrastructure broadly in line with international best practices. However, while focusing on a globally competitive and the robust banking sector, the Reserve Bank has also emphasized financial inclusion, whereby banking services are accessed easily by the underprivileged sections of the society. The overall approach to reforms has been sequenced and arrived at through consultative process with all the stakeholders. Various reform measures initiated from time to time have imparted resilience to the financial system. The Reserve Bank had indicated on February 15, 2005 that banks in India would start implementing Basel II with effect from March 31, 2007. Several initiatives, therefore, were taken during the year to facilitate the smooth transition to Basel II. The Reserve Bank permitted banks to raise capital through new instruments to enable them to meet capital requirements prescribed under Basel II. The Reserve Bank also issued a guidance note for operational risk management. Taking into account the state of

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preparedness of the banking system, however, it was announced in the Midterm Review of the Annual Policy for 2006-07 on October 31, 2008 that Indian banks with presence outside India and foreign banks operating in India would be required to migrate to Basel II framework with effect from March 31, 2008, while all other Indian banks would be encouraged to migrate to these norms by March 31, 2009. With a view to providing basic banking services to common man, the Reserve Bank took several measures to incentives banks. Improvement in customer service was another area of focus of the Reserve Banks regulatory Policy.

1.2

PROFILE OF THE ORGANIZATION

PUNJAB NATIONAL BANK

The Bank started out as Punjab National Bank Limited , incorporated in the year 1894 and it commenced operations in the year 1895. Consequent upon nationalization in 1969, the corresponding new bank was named as Punjab National Bank (PNB). From its modest beginning, the Bank has grown in size and stature to become a leading banking institution in India. During its existence of over one hundred years, PNB has successfully faced many challenges including that of partition. The number of branches of the Bank rose from 619 at the time of nationalization in 1969 to reach 3,861 by December 2001. As many as 6 banks have merged with PNB, the last being

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the erstwhile New Bank of India, a loss making nationalized bank. The merger with New Bank of India was the first ever merger of a nationalized bank with another. PNB has diversified into other banking related areas through its various subsidiaries:

PNB Capital Services Ltd. (PNB Caps), the first fully owned subsidiary of the Bank, established in 1988, is registered with RBI as a non-banking finance company and also with SEBI as Merchant Banker and as a Debenture Trustee. PNB Caps is a member of Delhi Stock Exchange and Over The Counter Exchange of India (OTCEI). PNB Caps is engaged in securities related business and offers services in investment banking, project appraisal, loan syndication and corporate advisory activities.

PNB Housing Finance Company Ltd., another subsidiary of the Bank, was also established in 1988 and is engaged in financing housing activities.

PNB Asset Management Co. Ltd., the third subsidiary of PNB, manages the mutual fund business.

PNB Gilts Ltd. is a primary dealer in Government securities and deals with money market instruments. The company has received ISO 9002 certification from British Standard Institution, making it the first primary dealer in India to achieve this certification for its quality management systems.

PNB Gilts came out with an Initial Public Offering of 3.5 cores equity shares at Rs. 30/- per share (premium of Rs. 20/- per share) in July 2000.

The Bank has sponsored 19 Regional Rural Banks (RRB) as a part of fulfillment of its social responsibilities towards rural development and poverty alleviation. Further, the Bank has 20% equity participation in Everest Bank Ltd., Katmandu, Nepal. 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

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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 3.7 crore customers through 4500 branches and 674 extension counters - largest amongst Nationalized Banks. The Bank was recently ranked 21st amongst top 500 companies by the leading financial daily, Economic Times. PNB attempts at providing best customer service has earned it 4 th place among Indias Most Trusted top 50 service brands in Economic Times- A.C Nielson Survey. PNB is also ranked 248 amongst the top 1000 banks in the world according to "The Banker" London. 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 worldwide. 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-of-art dealing rooms and well-trained dealers, the bank offers efficient forex dealing operations in India. 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 in Kazakhstan, Shanghai in 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. 13

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. The Bank functions under the supervision of its Board of Directors consisting of the Chairman and Managing Director, the Executive Director and other Directors as nominated by the Government of India. The Bank has constituted various committees like Management Committee, Audit Committee, Asset Liability Management Committee etc. in line with the RBI guidelines. The Bank has a four-tier organization structure with the Head Office, 12 Zonal Offices and 66 Regional Offices, which control the branches. To meet the challenges of competition and to maintain its front-line position, the Bank has brought about suitable modifications in its organization structure. Accordingly, seven of the zones namely Chandigarh, Delhi, Ludhiana, Mumbai, Patna, Kolkatta and Lucknow which cover the strategic business areas for the Bank have been specifically chosen to act as potential growth centers and such zones are headed by a senior executive in the rank of General Manager with adequate delegation of powers. Similarly, Senior Regional Managers have been placed in about one-fourth of the regional offices. Decision making in respect of credit sanctions and other operational matters are decentralized up to the branch level.

Management of the Bank

The overall supervision and control of the Banks functions rests with the Board of Directors which consists of the Chairman and Managing Director and Executive Director, both appointed by the GOI, other directors representing the Government, 14

Reserve Bank of India, Employees and Officers of the Bank. The day-to-day affairs of the Bank are managed by the Chairman and Managing Director, the Executive Director, the Banks General Managers, Deputy General Managers who are assisted by a team of competent professionals.

HISTORY
Punjab National Bank (PNB), established in 1895 in Lahore, then a part of undivided India, is the second largest public sector commercial bank in India with about 4500 branches and offices throughout the country. The Government of India nationalized the bank, along with 13 other major commercial banks of India, on July 19, 1969. History 1895: PNB established in Lahore. 1904: PNB established branches in Karachi and Peshawar. 1939: PNB acquired Bhagwandas Bank. 1947: Partition of India and Pakistan at Independence. PNB may had lost its premises in Lahore, but continued to operate in Pakistan. 1961: PNB acquired Universal Bank of India. 1963: the Government of Burma nationalized PNB branch in Rangoon (Yangon). September 1965: After the Indo-Pak war the government of Pakistan seized all the offices in Pakistan of Indian banks, including PNB's head office, which may have moved to Karachi. PNB also had one or more branches in East Pakistan (Bangladesh). 1969: The Government of India (GOI) nationalized PNB and 13 other top banks. 1960s: PNB amalgamated Indo Commercial Bank (est. 1933).

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 1976 or 1978: PNB opened a branch in London. 1986 The Reserve Bank of India required PNB to transfer its London branch to State Bank of India after the branch was involved in a fraud scandal. However, PNB acquired Hindustan Commercial Bank in a rescue. 1993: PNB acquired New Bank of India, which the GOI had nationalized in 1980. 1998: PNB set up a representative office in Almaty, Kazakhstan. 2003: PNB took over Nedungadi Bank, the oldest private sector bank in Kerala. Rao Bahadur T.M. Appu Nedungadi, author of Kundalatha, one of the earliest novels in Malayalam, had established the bank in 1899. It was incorporated in 1913, and in 1965 had acquired selected assets and deposits of the Coimbatore National Bank.

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HISTORY AND DEVELOPMENT

The Bank started out as Punjab National Bank Limited, incorporated in the year 1894 and it commenced operations in the year 1895. Consequent upon nationalization in 1969, the corresponding new bank was named as Punjab National Bank (PNB). From its modest beginning, the Bank has grown in size and stature to become a leading banking institution in India. During its existence of over one hundred years, PNB has successfully faced many challenges including that of partition. The number of branches of the Bank rose from 619 at the time of nationalization in 1969 to reach 3,861 by December 2001. As many as 6 banks have merged with PNB, the last being the erstwhile New Bank of India, a loss making nationalized bank. The merger with New Bank of India was the first ever merger of a nationalised bank with another. PNB has diversified into other banking related areas through its various subsidiaries:

PNB Capital Services Ltd. (PNB Caps), the first fully-owned subsidiary of the Bank, established in 1988, is registered with RBI as a non-banking finance company and also with SEBI as Merchant Banker and as a Debenture Trustee. PNB Caps is a member of Delhi Stock Exchange and Over The Counter Exchange of India (OTCEI). PNB Caps is engaged in securities related business and offers services in investment banking, project appraisal, loan syndication and corporate advisory activities.

PNB Housing Finance Company Ltd., another subsidiary of the Bank, was also established in 1988 and is engaged in financing housing activities.

PNB Asset Management Co. Ltd., the third subsidiary of PNB, manages the mutual fund business.

PNB Gilts Ltd. is a primary dealer in Government securities and deals with money market instruments. The company has received ISO 9002 certification from British Standard Institution, making it the first primary dealer in India to achieve this certification for its quality management systems. PNB Gilts came out with an Initial Public Offering of 3.5 crores equity shares at Rs. 30/- per share (premium of Rs. 20/per share) in July 2000.

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OBJECTIVE OF THE PNB Merchant Banking

Under the Merchant Banking Portfolio, The Bank handled 28 assignments as Banker to Issue and 122 payment assignments of Dividend Warrants/Interest Warrants/Refund Orders during the financial year 2000-01. For the 6 months period upto September 30 2001, 4 assignments of Bankers to Issue and 48 payment assignments have been handled by the Bank. There are 24 existing Debenture Trustee Assignments of 14 Companies with a trusteeship amount of Rs. 517.76 crores. Bank is also providing Depository Services and is the Depository Participant of National Securities Depository Ltd. As on 30th September 2007, there were 10,740 Demat Accounts. The Depository Services are being provided by 11 branches in Delhi and 8 branches in other parts of the country.

Foreign Exchange Business

The Bank through its network of 103 Authorized Branches, 43 Special Export Promotion Branches and 40 Limited Authorization Branches, has been catering to Foreign Exchange Business requirements of its customers. The Bank has established 10 international banking branches at Delhi, Mumbai, Kolkata, Amritsar, Jalandhar, Ludhiana, Jaipur, Agra, Ahmedabad and Morabadad in order to introduce concept of Single Window Banking and for providing excellent services exclusively for exporter and importer clients. All these offices have been accredited with ISO 9002 certification. All branches authorized for handling Foreign Exchange Business have been provided with modern infrastructure like Telex, Fax etc. while 75 branches have been provided with two way SWIFT (Society for World wide Inter bank Financial Telecommunication) connectivity which is the fastest mode available for transmission of financial message between the banks worldwide. The Export and Import Turnover of the Bank has grown steadily over the years and it has reached a level of Rs.25,761 crores upto September 30, 2007. The Bank has earned an income of Rs.164.79 crores from the foreign exchange business upto September 30, 2007.

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Non- Resident Deposits Non- Resident Deposits of the Bank consist of Non- Resident Non-Reportable (NRNR) deposits, Foreign Currency Non-Resident (FCNR) Deposits, Non- Resident External (NRE) Accounts, Non-Resident Special Resident (NRSR) Accounts, NonResident Ordinary (NRO) Accounts. The total Non-Resident Deposits of the Bank have reached a level of Rs. 2,136.98 crores as on September 30, 2001.

Correspondent Relations
The Bank has a strong network of 204 correspondent banks spread over 81 countries. Rupee Drawing Arrangements have been put in place with M/s. UAE Exchange Centre, UAE; Thomas Cook Al Rostamani Exchange Co., UAE; Bahrain Exchange Company Kuwait; Bahrain Finance Company, Bahrain; Musandam Exchange, Sultanate of Oman; Oman and UAE Exchange Co., Sultanate of Oman and Al-Fardan Exchange Company, Qatar to help Indian expatriated in these countries to remit funds to India.

Overseas Operations
The Bank has equity participation to the extent of 20% in Everest Bank Ltd. (EBL), Kathmandu, Nepal. The Bank is providing technical and other management services to EBL by deputing the Banks personnel. EBL came under the Banks Management since January 1997 and has earned a net profit of Nepalese Rupee (NPR) 36.97 crores during 2006-07 against a loss of NPR 1.10 crores during 1996-97. Deposits and advances of EBL which stood at NPR 17.0 crores and NPR 4.9 crores at the end of 1995-96, the year prior to commencement of the joint venture with the Bank, has increased to NPR 757.45 crores and NPR 595.94 crores at the end of year July 2007 respectively. Further, the Bank has established a Representative Office at Almaty, Khazakhistan.

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Dealing Rooms
The Bank has integrated Rupee and Forex desks of the treasury and centralized interbank forex desk at the corporate office. The new dealing room at New Delhi with state of the art technology is well equipped for instantly netting foreign currency positions offloaded by different extended arms and offer bigger lots in the inter-bank forex markets. The integration has helped the Bank to exploit arbitraged opportunities in rupee and forex market.

Gold Business
PNB commenced its Gold Business in the form of Gold Import Scheme in September 2000. The scheme offers international quality gold for sale to the Banks clientele consisting of exporters and others at competitive prices. The Gold Import Scheme is available at select branches in seven centers Delhi, Mumbai, Chennai, Ahmedabad, Jaipur, Amritsar and Ludhiana, comprising of important bullion markets in India. The gold is procured from some of the leading suppliers of precious metal. The Bank has achieved a turnover of Rs.10,134 crores upto March 31, 2007 and Rs.11,212 upto September 30, 2007mainly by providing various value added services such as late hour dealing facility, door-to-door delivery of bullion, delivery of unfix price basis, direct dealing facility, etc.

Credit Card Business

The Bank entered the credit card business in association with HSBC and launched the PNB International Credit Card on November 24, 2000 under the MasterCard and Visa franchisee. The co-branded credit card was launched in 14 cities representing major centers. The credit card comes in two categories Gold for high net worth customers and Classic Card for other individuals. So far, the Bank has issued over 68,000 cards and the product is being offered at 21 centers. The Bank uses its vast retail reach to collects applications and shares the revenues with HSBC. Thereafter, the entire responsibility for processing the applications and collection of credit card payments along with the credit risk is with HSBC.

20

Insurance Business
PNB has decided to enter into insurance business by participating in the insurance Joint Venture ("JV") with Zurich Financial Services, Switzerland, DCM Shriram Consolidated Limited and Vijaya Bank as partners. The JV is proposed for three separate companies one each for life, non-life insurance and a third for distribution and services company. Bank is expected to take up 26% equity in all the three companies and invest a sum of Rs.61.88 crores. RBI has been approached for its approval.

Centralized Banking Solution

The proposed Centralized Banking Solution will cover around 1500-2000 branches in 10-12 clusters covering Banks Major business centers including top 100 banking centers in the country. The Centralized Banking Solution will take about 2-3 years for full implementation. Centralized banking solution besides providing State of the Art value added services to the customers would help in centralized and effective Management Information Systems. Anywhere Branch Banking / Anytime Banking is proposed to be introduced at around 100 branches / ATMs in 4 metros and is expected to be implemented in around 6 months. The branches and ATMs will be networked and the facility will enable Customers of these branches to transact banking business from any of these 100 locations.

21

1.3

PROBLEMS OF THE BANK

Fewer locations as compared with HDFC and ICICI Bank Service delivery / Logistics perception is weak Negative Environment High interest rate as compared to others housing finance institution. Top management takes large amount of time to approve high value loan borrowers.

22

1.4

COMPETITION INFORMATION

The following are best banks which are currently operating in India under the guidelines of Reserve Bank of India (RBI)

Abn Amro Bank In India Allahabad Bank In India American Express Bank In India Andhra Bank In India Bank Of India Canara Bank Central Bank Of India CITI Bank Corporation Bank HDFC Bank

HSBC Bank ICICI Bank IDBI Indian Overseas Bank Oriental Bank Of Commerce Punjab National Bank State Bank Of India (SBI) Standard Chartered Bank United Bank Of India Axis bank

23

1.5

S.W.O.T. ANALYSIS

Strengths:
Well Reputed Bank Expanding into New Location Well-Covered Market in Delhi Competitive Products Relatively New Team Appraisal techniques are used.

Weaknesses:
HDFC Bank, ICICI Bank, SBI Bank and Citibank dominate players in the Market Fewer locations as compared with HDFC and ICICI Bank Service delivery / Logistics perception is weak Negative Environment High interest rate as compared to others housing finance institution.

Opportunities:
PNB can offer a complete relationship Advantage of large network over other banks Opportunity to pitch in for National and International convenience Special rates of interest are offered during exhibitions. Product life cycle is to be reviewed.

Threats:
Other Banks offering lower AQB People looking for change (?) The competition in market is very high due to the private players. The rates of interest of other players are quite low.

24

Innovative schemes from other players.

Chapter 2 Research Methodology

25

26

OBJECTIVE AND METHODOLOGY

2.1

SIGNIFICANCE
The Appraisal also signifies the present state of affairs of industry, demand & supply, marketing scenario, Regulatory requirements as well as national & International state of affairs of that particular product/ industry.

The Appraisal also signifies a proper format in which any credit & project appraisal to be placed before the final decision takers.

For specialist functions, employers may require degree subjects that are directly relevant and, in some cases, relevant experience, for example, for marketing or IT positions.

2.2

MANAGERIAL USEFULNESS OF THE STUDY

The study provides a complete knowledge of various fundamental concept related to services provided by the bank.

The suggestions to the Branch Managers will help management to make changes in the desired field.

2.3

OBJECTIVES

This project is a compilation of the work that is taken up by a financial Institution while financing an industrial project. The basic theme of the study is: To check the awareness about ATM AND Internet banking facility. To know all the factors influencing choice of banking. Familiarization with the services provided by PNB.

2.4

SCOPE OF THE STUDY

Scope of the study is to collect information regarding the account opening and ATM facility provided by the bank

27

2.5

RESERACH METHODOLOGY

Data used to analysis the services in PNB was of primary and secondary .The primary data has been collected through questionnaires. The secondary source included brochures, annual reports, magazines, employees handbook, magazines and journals.

DATA COLLECTION PRIMARY DATA:

The primary data that I collected were the first hand information, which I received through personal interviews with the consumers and through questionnaires. This data gave the most vital information for making my analysis of the prevailing banking behavior of the consumers

SECONDARY DATA:
Secondary data involved in my research were the information that I collected through the Punjab National Banks Internet service and through the various brochures and pamphlets of the bank.

Sampling Plan / Fieldwork Plan

Every customer is a suspect but youve got to find the prospective one. To accomplish this task I use to fix appointments over the telephone, with the help of a telephone directory. I also use to go for cold calls in various offices building in the various parts of the Delhi. I also use to go for the promotion of our Bank through our scratch & win contest that we used to conduct in some specific areas, especially in those having a branch.

28

CHAPTER 3

CONCEPTUAL DISCUSSION

29

CONCEPTUAL DISCUSSION

ATM CUM DEBIT CARD

INTRODUCTION OF ATM
Punjab National Bank is in the process of creating a large network of ATMs in partnership with individuals / organizations willing to provide prominent space, install ATMs; take active interest in increasing number of transactions on these ATMs and also to take care of ATM maintenance besides development, upkeep and security of the site. The scheme is based on Revenue Sharing model. The entity deploying ATMs hereinafter called Participant shall get revenue on per transactions basis as defined in REVENUE clause.

SCOPE
Participation in the PNB is exclusively available to select Participants that Bank decides to enter into a partnership with. The Participant selection and participation is the prerogative of the by the bank.

USERS

30

Bank only, No correspondence shall be entertained from the applicants not found suitable. PNB ATM / Debit / Credit / Smart card holders ATM / Debit Card holders of MITR / NFS member Banks. ATM / Debit Card holders of other banks with whom PNB has ATM sharing arrangement(s) or enters in to from time to time. MasterCard enabled cards.

PARTICIPANT
A commercial organization / trust / or an individual which has/ arranges space with independent access in a commercial / market / public place as found suitable for ATM deployment by Bank. The roof rights should also be available in case V-SAT is required to be installed. Preference shall be given to individuals.

ELIGIBILITY
The Participant should have space for installation of ATMs at Corporate outlets, shopping malls, Cinema theatres, hospitals, petrol pumps, educational institutions etc., that are found suitable by Bank for installation of ATM. The Participant should provide credentials to meet investment and operational cost. Decision of the bank shall be binding and final.

TERMS AND CONDITIONS

Bank shall have the discretion to select or reject a particular site offered by the prospective Participant, without assigning any reason.

REVENUE

31

The Participant will be entitled for per-successful-transaction income (Rs.11* for Cash withdrawal & Rs.4* for Balance Enquiry) from the Bank. * Including Service Tax.

32

SUBMISSION OF APPLICATION FORM

In case the Participant is not able to submit details on-line he may send his application form (available at our site www.pnbindia.com) at the following address. A Demand Draft / Pay order of Rs. 1000/- in favour of PUNJAB NATIONAL BANK, payable at Delhi is required to be submitted towards processing fee for each site by all applicants whether on-line(with Registration No.) or through submission of application form. This processing fee shall be non-refundable even if the bank does not consider his application. The last date for submission of application is 30-042006. The Chief Punjab National Bank, Back Office Operations Division, 4th Floor, HO: 5,Sansad Marg, New Delhi 110001.

OBLIGATIONS
The Participants agree that they bear obligations as mentioned herein. Preferably provide a comprehensive insurance of the ATM, ATM Site and other equipments. Provide security at ATM Site. The ATM shall be encumbrance free. Incase of attachment of ATMs, the Participant shall be responsible for the cash that was lying in the ATMs. Marketing of the ATM services at local level in order to enhance usage of the services and its revenue. Maintain over 99% of uptime of the services throughout the year. Ensure that site shall bear logo, display board, design, publicity material of PNB like any other ATM owned by PNB.

33

Allow the authorized personnel of the Bank including the external auditors, consultants etc. to visit the ATM site.

Pay service taxes and other applicable taxes. The Participants selected will enter in to an agreement for the purpose.

BANKS OBLIGATIONS
Assist the Participant by providing the technical specifications and Banks approved rates for the ATMs (selected models), ATM site preparation, Air conditioners and other equipments. The Participant will procure the equipments as per technical specifications approved by the Bank. Monitor remotely each ATM for its functioning. Provide necessary connectivity for connecting the ATM to its ATM switch. All usage and other charges relating to connectivity will be borne by the Bank. Monitoring and maintenance of the connectivity between the ATM and its ATM Switch. Bank. Bank Bank of India. Procure the necessary license / authentication from Reserve Reconciliation & settlement of transactions shall be done by Provide and replenish cash at the ATM. Take care of the ATM card issuance / management related work and also handle its customer queries and complaints pertaining to the

34

The authentication / license for ATM services shall be in the name of the Bank.

35

SERVICE ENGAGEMENT
Bank and the Participant shall enter into an agreement (including service level agreement) for providing the ATM services. The service engagement shall be for 3 years period from the date of launch of services at the designated site. After 3 years, the Bank may renew the contract on same terms & conditions or buy back the ATMs along with site infrastructure at mutually agreeable terms. The Participant shall not use the site for ATMs of other Bank, at least for one year after termination of the contract. In case of violation of any terms, bank can terminate the services and / or levy suitble penalty commensurate with the quantum of loss(tangible or intangible) to the bank. Bank shall not be responsible for loss, if any to the Participant on account of termination etc.

36

INTERNET BANKING
What is Internet Banking? You can do banking using Internet as medium. It is available 24 hours a day, 365 days a year and you can operate your account anytime / anywhere at your convenience. You need a PC with minimum PII processor, 32 MB RAM with Internet Explorer 5.0 or above. You need to have an account at any of our CBS (Centralize Banking Solution) branch. Then you need to register for the Internet Banking Services with the branch by filling our request form. We shall be sending you the passwords at the address given by you in the request form with the user guide and acknowledge letter. Please submit the acknowledgement letter and collect your user-id and password, please logon to www.pnbindia.com using the user-id and password in your possession to access your account information. During the first login, you have to change passwords. Kindly download the request form, fill in the details and submit it to your branch. After authentication of your particulars your registration formalities will be completed. User - id and password will be generated in a secure environment. Passwords will be couriered at the address specified by you in the request form and to ensure the highest security and safety you have to collect your user-id from your concerned branch. While collecting user-id from the branch, please submit the acknowledgement letter duly signed in the branch. The machine generates User-id and passwords for your first time access randomly and we have no control over it. It is mandatory to define your own passwords at first login. It is mandatory for you to change the machine-generated passwords with your own convenient passwords at first login. Later on at any time you can change your passwords but not the user-id. Passwords can be changed any time and any number of times. In fact we recommend it should be changed often to secure your access to your accounts through Internet. Please ensure to use at least one special character (like @, #, $ etc) in your password otherwise system will not accept your passwords. You are requested to choose a password that is not a dictionary word and not guessable from your personal information known to others such names in the family, vehicle numbers etc. You should change your password frequently. Please try to remember the password and do not write it down or paste it somewhere.

37

Last but not the least does not divulge your password to anybody even if they claim to be from the bank. Nothing to worry. Just click on "forgot password" at the login page and print the request form. After printing, fill in all desired information and submit the form in the Branch. We in turn will send you new passwords. If you forget the username for Internet Banking Services, kindly contact your branch. I am unable to login with the couriered Password and allotted User-id. Passwords are case sensitive. Kindly be a little more careful while typing the system-generated passwords for the first time. It may that your Internet Banking account has not been activated. Please attempt logging in after 24 hours of your submitting acknowledgement .If the problem persists please get in touch with the branch. Please check the cipher strength of your system. You may check cipher strength of your computer by clicking "About Internet Explorer" in the "Help" menu option of Internet Explorer. If it does not show cipher strength of 128-bit then please update the same by clicking "Update Information" button. Yes, provided you do not disclose your passwords and logout in proper way. Please ensure to logout in proper way. However, if you abruptly close your Internet Banking page, your session will end. Kindly do not leave your system in between doing Internet Banking, as this will give opportunity to others around you to operate your accounts. Accounts maintained by you in any of the CBS branches can be attached to your existing Internet Banking Services. You may submit your request at any of the CBS branches where you have accounts. Standard format for this request is also available on the login page under Add more Accounts. How can contact the helpdesk of Internet Banking? 011-23765434 e-mail: itdibs@pnb.co.in I am getting a message "You are viewing this page due to the following reasons" while I am working on The Internet Banking site. It is likely that your system has been idle for long.

38

It is also possible that your Internet connection is slow and the session gets timed out. The services may be down from our end. In this case you may please try after a few minutes. After logging in, click on transfers. You have 2 options 1. 2. Transfer funds between your own accounts. Transfer funds to other accounts.

If you have chosen option 1 then you are shown a list of credit & debit accounts. You may choose the relevant account and click on Transfer button. If you have chosen option 2 then you are shown a list of your own accounts to be debited. You are expected to type the 16-digit beneficiary account number and click on Transfer Button. In both cases to complete the transaction you would be prompted for user id and transaction password. It is recommended that both passwords are different so that there is no possibility of misuse. I just made an ATM transaction but show balance is not reflecting the same. In order to view your current balance you may click on Online Details. Show Balance would reflect balance as on the start of ant given day. Railway Ticketing: In order to use this you will have to log on to www.irctc.co.in, plan your journey, choose make payments, and choose PNB as the payment channel. Thereafter you will be prompted for your Internet Banking user id and password. Airline Ticketing, Telephone bill payment etc would the other services in the near future. Currently Internet Banking services are available for free. However it may be understood that for fund transfer between accounts of different branches, the charges applicable as in the case of normal transactions would be levied. As regards to Railway Ticketing services, presently there are no charges levied by the Bank. Practically all accounts can be provided with an Internet Banking user id. Loan accounts, FD Accounts, Deposit Accounts. If your accounts are in CBS branches and if you have the same customer id then automatically all accounts would be displayed by a single Internet Banking user id. However if you have accounts in different customer ids, you may request that the other account also be attached to your Internet Banking user id. In case the account is of the individual accounts of the same person, it is better to have a single user id so that all accounts can be monitored in one shot. If you have joint account & individual accounts you may opt for separate user ids. 39

"Terms

and

conditions

for

Internet

Banking

Subscribers

(For Individuals / Sole Proprietorship) Definitions In this document the following words and phrases have the meaning set opposite them unless the context indicates otherwise: BANK refers to Punjab National Bank, its successors and assigns, a body corporate constituted in India under the Banking Companies (Acquisition and Transfer of Undertakings) Act No. 5 of 1970 and having its Head Office at 7, Bhikhaiji Cama Place, New Delhi 110066. WEBSITE means website of the Bank. USER refers to a customer of the BANK authorized to use Internet Banking Services. Internet Banking Account refers to the Users Savings and/ or Current Account and/ or any other type of account so designated by the BANK to be eligible account(s) for operations through the use of Internet Banking Channel. PERSONAL INFORMATION refers to the information about the USER obtained in connection with the Internet Banking Service. TERMS refer to Terms and Conditions for use of Internet Banking Services as specified in this document. 1. Applicability of TERMS These TERMS form the contract between the USER using the Internet Banking services and the BANK. By applying for Internet Banking Services and accessing the service the USER acknowledges and accepts these TERMS. Any conditions relating to the accounts of the customer other than these TERMS will continue to apply except that in the event of any conflict between these TERMS and the account conditions, these TERMS will continue to prevail. The agreement shall remain valid until it is replaced by another agreement or terminated by either party or the account is closed , whichever is earlier.

40

2.

Requirement of Minimum Balance the USER shall maintain, at all times, such minimum balance in Internet Banking account(s), as the BANK may stipulate from time to time. The BANK may, at its discretion, levy penal charges for non-maintenance of the minimum balance. The BANK may withdraw the Internet Banking Services facility, if at any time the amount of deposit falls short of the required minimum as aforesaid and/ or if the other charges remain unpaid, without giving any further notice to the USER and/ or without incurring any liability or responsibility whatsoever by reason of such withdrawal

3.

Funds Transfer the USER shall not use or attempt to use Internet Banking Services for funds transfer - as and when the facility is made available without sufficient funds in the relative Internet Banking Services -account or without a pre-existing arrangement with the Bank for the grant of an overdraft The BANK will endeavor to effect such funds transfer transactions received through Internet Banking Services provided there are sufficient funds available in the Users account. The BANK shall not be liable for any omission to make all or any of the payments or for late payments due to circumstances beyond the reasonable control of the Bank the event of overdraft created due to oversight/inadvertently, the USER will be liable to pay the interest on such over drawn amount, as decided by the BANK.

4.

Authority to the Bank Banking transactions in the User's account(s) are permitted through Internet, only after authentication of the User-id and password of the USER. The USER (along with the joint account holder, if any) grants express authority to the BANK for carrying out the banking transactions performed by him through Internet Banking Services. The BANK shall have no obligation to verify the authenticity of any transaction received from the USER through Internet Banking Service or purporting to have been sent by the USER via Internet Banking Services, other than by means of verification of the User-id and the password. The display or printed output that is generated by the USER at the time of operation of Internet Banking Services is a record of the operation of the Internet access and shall not be construed as the Bank's record of the relative transactions.

41

5.

The Bank's own records of transactions maintained through computer systems or otherwise shall be accepted as conclusive and binding for all purposes. All transactions arising from the use of Internet Banking Services to operate a joint account, shall be binding on all the joint account holders, jointly and severally, notwithstanding that one amongst such joint account holders only operates the accounts through Internet Banking Services

6.

Accuracy of Information the USER is responsible for the correctness of information supplied to the BANK through the use of Internet Banking Services or through any other means such as electronic mail or written communication. The BANK accepts no liability for the consequences arising out of erroneous information supplied by the USER. If the USER suspects that there is an error in the information supplied to the BANK by him, he shall advise the BANK at the earliest. The BANK will endeavor to correct the error wherever possible on a 'best efforts' basis. If the USER notices an error in the account information supplied to him through Internet Banking Service, he shall advise the BANK at the earliest. The BANK will endeavor to correct the error promptly and adjust any interest or charges arising out of the error.

7.

Liability of the USER and the BANK If the USER has complied with the TERMS and advises the BANK in writing under acknowledgment of an authorized person of the Bank, immediately after he/she suspects that his/her User-id or password is known to another person and/ or notices an unauthorized transaction(s) in his account, he/she shall not be liable for losses arising out of the unauthorized transaction(s) occurring in the accounts after the receipt of such advice by the BANK. The USER shall be liable for some or all loss from unauthorized transactions in the account(s) if he/she has breached the Terms and conditions or contributed or caused the loss by negligent actions such as the following: In disclosing or failing to take all reasonable steps to prevent disclosure of the User-id and/or password to anyone including BANK staff and/ or failing to advise the BANK of such disclosure within a reasonable time Not advising the BANK in a reasonable time about unauthorized access to or erroneous

42

transactions in the account(s) through the Internet Banking Services The BANK shall not be liable for any unauthorized transaction(s) occurring through the use of Internet Banking Services which can be attributed to the fraudulent or negligent conduct of the USER. The BANK shall not be liable to the account holder(s) for any damages whatsoever whether such damages are direct, indirect, incidental, consequential and irrespective of whether any claim is based on loss of revenue, investment, production, goodwill, profit, interruption of business or any other loss of any character or nature whatsoever and whether sustained by the account holder(s) or any other person, if Internet Banking Services access is not available in the desired manner for reasons including but not limited to natural calamity, floods, fire and other natural disasters, legal restraints, faults in the telecommunication network or Internet or network failure, software or hardware error or any other reason(s) beyond the control of the BANK. The Bank shall endeavor to take all possible steps to maintain secrecy and confidentiality of its customers' account(s) but shall not be liable to the account holder(s) for any damages whatsoever caused on account of breach of secrecy/ confidentiality due to hacking or technological lapses in the system. The bank shall not be liable for any loss due to unauthorized transfer of funds through hacking etc. 8. Indemnity The USER shall indemnify and hold the BANK harmless against any loss suffered by the BANK, if any claim or action brought by a third party which is in any way the result of the improper use of Internet Banking Services by the USER.

43

9.

Disclosure of PERSONAL INFORMATION The USER agrees that the BANK or its contractors may hold and process his PERSONAL INFORMATION on computer or otherwise in connection with Internet Banking Services as well as for statistical analysis and credit scoring. The USER also agrees that the BANK may disclose, in strict confidence, to other institutions, such PERSONAL INFORMATION as may be reasonably necessary for reasons inclusive of, but not limited to, the following: for participation in any telecommunication or electronic clearing network in compliance with a legal directive for credit rating by recognized credit rating agencies for fraud prevention purposes

10.

Proprietary Rights The USER acknowledges that the software underlying the Internet Banking Services as well as other Internet related software which are required for accessing Internet Banking Services are the legal property of the respective vendors. The permission given by the BANK to access Internet Banking Services will not convey any proprietary or ownership rights in the above software. The USER shall not attempt to modify, translate, disassemble, decompile or reverse engineer the software underlying Internet Banking Services or create any derivative product based on the software.

11.

Change of Terms and Conditions The BANK has the absolute discretion to amend or supplement any of the TERMS at any time and will endeavor to give prior notice of reasonable time for such changes wherever feasible. The BANK may introduce new services within Internet Banking Services from time to time. The existence and availability of the new functions will be notified to the USER as and when they become available. By using these new services, the USER agrees to be bound by the terms and conditions applicable.

44

12.

Non-Transferability The grant of facility of Internet Banking Services to a USER is not transferable under any circumstance and shall be used only by the USER.

13.

Termination of Internet Banking Service The USER may request for termination of the Internet Banking Services facility any time by giving a written notice. The USER will remain responsible for any transactions made on his/her account(s) prior to the time of such cancellation of the Internet Banking Services. The bank may withdraw the Internet Banking facility anytime after giving reasonable notice under the circumstances to the user through the web-site. The closure of account by the user will automatically terminate the Internet Banking Services. The bank may suspend or terminate the Internet Banking Services without prior notice if the user has committed breach of these terms and conditions or the Bank learns of the death, bankruptcy legal incapacity of the user.

14.

Notices Notices under these terms and conditions may be given by the Bank and the user: Electronically to the mailbox of either party, such notices will be regarded as being in writing. By delivering them by hand or by sending them by post to the user address as per our records and in case of Bank to the address mentioned belowInternet Banking Section Information Technology Division Punjab National Bank Head office-5, Sansad Marg New Delhi-110001.

45

Bank may also publish notices of general nature applicable to all users of Internet Banking Services on its website such notices will have the same effect as a notice served individually to each user. 15. Governing laws these terms and conditions and/or operations in the accounts of the user maintained by the bank and/or the use of services provided through Internet Banking Services shall be governed by the laws of Republic of India. Bank accepts no liability whatsoever, direct or indirect for non-compliance with the laws of any country other than Republic of India. The mere fact that Internet Banking Service can be accessed through Internet by a user from a country other than India shall not be interpreted to imply that the laws of the said country govern these terms and conditions and/or the operations in the accounts of the user through Internet and/or the use of Internet Banking Services. The user agrees to abide by prevailing laws in respect of Internet Banking Services applicable in Republic of India. It is the responsibility of the user to comply with any regulations prevailing in the country from where he is accessing the Internet USER GUIDE How to access Internet Banking Services: To access Internet banking Service you need a PC (preferably Pentium with Windows 95 or above with a mouse), a connection to the Internet and a Browser (Microsoft Internet Explorer 5.0 or Netscape Navigator 5.0 or later versions). You will also need your Internet Banking Service User Id and passwords that have been provided to you by the bank. Once you are connected to the Internet, visit the Bank's Web site, www.netpnb.com or www.pnbindia.com and click on INTERNET BANKING SERVICES button. The Internet Banking Sign on page will be displayed. As a part of security feature, the "BACK" and "REFRESH" buttons on the browser are disabled and pressing of this will result in an internal error. For going to the previous screen, use the "PREVIOUS" button within the services.

46

Login To Services: You have been provided with one User-Id and two passwords: 1) 2) Login password: this will help you to enter into the Internet Banking Services. Transaction Password: this password is required to confirm your transactions such as Transfer of funds/ Stop payment of cheques. Remember: Keep Your Password Secure: 1) 2) The passwords are case sensitive i.e. p (small) is different from P (capital) The eight (8) characters password sent to you will be randomly generated by the system. This should be changed immediately on logging in the system for the first time. 3) The password selected by you should contain a minimum of 6 characters and maximum of 28 characters and should be in conformity to the rules displayed on the screen. 4) The password can be changed as frequently as you wish (using the facility available in the customize option). Every 90 days the system will force a change of passwords. An alert will inform before expiring of the password, the moment you log in. Please change both your login and transaction passwords when the system prompts you to do so. 5) Non-usage of the services will disable the password after a fixed period of time i.e. 90 days.

47

Using Internet Banking Services: Once you enter the user-id and the password, the system will check for the correctness and allow you to enter the services. Here the screen will display various options in the form of buttons/icons. These buttons/icons will have different functions and selecting or clicking on the respective button/icon will activate the function. You can use Tab key, Mouse clicks, Scroll bar to navigate within the screen/pages. To go to previous page/screen don't use BACK button on your browser, but use PREVIOUS button on the screen. A "Help" button will be available to view on-line help available in the system, this "help" will guide you in using the Internet Banking Services. This "help" will open as a separate window and after using the "help" please close the window by clicking on the close button. The Internet Banking Services will display messages on top of each screen. These messages will indicate successful acceptance or any type of errors. Don't forget to look there if you do not get the expected result after selecting an option. Internet Banking Services - features: The Internet Banking Services offer you variety of features on your finger tips. Main Menu, besides welcoming you will display list of available options which will be in the form of buttons/icons. Presently, the features available are (i) (ii) (iii) (iv) (v) Accounts Transfer of funds Requests Mails Customize

Logout Depending upon your account profile, all or some of the options from this list will be available for your access. You can choose your option by clicking the respective icon/button. The brief features available under each head are as under:

48

Accounts will cover 1. 2. 3. 4. 5. 6. 7. Details of all accounts of the user. Details of transactions Statement of accounts Schedule of deposits/loans Online information of transactions-deposit/loan Status of cheques, on-line stop payment of cheques Transfer of funds will cover a) online transfer of funds between own accounts b) online transfer of funds stuck between own and other accounts c) status of transfers Requests will cover 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. Closure of accounts Opening of a new Savings/current account Opening of a new term Deposit account Request for Statement of account Request for Transfer of accounts Request for chequebook Request for ATM/Credit cards Request for issue of TDS/Interest, No dues certificate Request for locker Request for gift cheque Request for demand draft/cash order Request for Duplicate passbook Request for change of address

49

14. 15.

Request for transfer of funds Reporting of loss of drafts/cash order

50

FORMAT FOR LOSS OF USER ID AND PASSWORD "ANNEXURE-IBS

Date: Ref. No: To, In charge - BO* :___________ Punjab National Bank ___________________ ___________________ ___________________ Reg.: Internet Banking Subscriber - Request for generation of new passwords

user id As I have (Please tick)

A) forgotten my password or it has been

B) disabled You are requested to reset my password and inform me at the address given below.

51

My account details are as follows S. No Account Number (16 digit number)

The accounts are in my name and I am eligible to operate accounts, being an authorized signatory.

Signature Name: ____________________ Phone:______________________ Address#:__________________ E-mail:______________________ ___________________________ (if any) _________________________________ # as per application form (PNB1063)

52

CHAPTER 4 DATA ANALYSIS

53

FINANCIAL STATEMENT
Sl No PARTICULARS Quarter Ended 31.03.2007 31.03.2006 (Audited) (Audited) 2184.65 2027.46 Year ended 31.03.2007 (Audited) 8459.85 31.03.2006 (Audited) 7778.94

1 INTEREST EARNED (a+b+c+d) a) Interest/ discount on advances/ bills b) Income on Investments c) Interest on Balances with RBI & other Inter Bank Funds d) Others 2 Other Income A TOTAL INCOME (1+2) 3 Interest Expended 4 Operating Expenses (e+f) e) Payments to and provisions for employees f) Other Operating Expenses B TOTAL EXPENSES (3+4) (excluding Provisions & Contingencies)

1079.83 1022.16 55.00

995.31 969.31 45.08

4246.12 3974.05 164.25

3876.01 3680.22 113.13

27.66 377.35 2562.00 1112.57 922.45 622.43

17.76 390.11 2417.57 1011.18 707.91 486.96

75.43 1675.68 10135.53 4453.11 2975.21 2121.23

109.58 1867.63 9646.57 4154.99 2370.72 1654.06

300.02 2035.02

220.95 1719.09

853.98 7428.32

716.66 6525.71

C Operating Profit (A-B)

526.98

698.48

2707.21

3120.86

(Profit before Provisions & Contingencies) Total Provisions & 166.35 401.86 1297.09 2012.17

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Contingencies
D Other Provisions and

52.70 194.61 113.65 360.63 315.30 7533.51

246.78 391.43 155.08 296.62 265.30 4425.46

801.60 425.79 495.49 1410.12 315.30 7533.51

1351.38 1401.00 660.79 1108.69 265.30 4425.46

Contingencies (Net) -of which provision for Non- Performing Assets

E Provision for Taxes F NET PROFIT (C-D-E) 5 Paid up equity Share

Capital
6 Reserves excluding

Revaluation Reserves
7 Analytical Ratios

(i) Share holding of Govt. of India (%) (ii) Capital Adequacy Ratio (%) (iii) Earning per Share in Rs. (Non-Annualized, at face value of Rs 10/-) (iv) (a) Amount of gross non-performing assets (b) Amount of net nonperforming assets (c) % of gross NPA (d) % of net NPA (v) Return on Assets % *(Annualized)
8 Aggregate of Non-

57.80 14.78 13.54

80 13.10 11.21

57.80 14.78 52.93

80 13.10 41.79

3741.34 119.44 5.96 0.20 1.14*

4670.13 448.96 9.35 0.98 1.16*

3741.34 119.44 5.96 0.20 1.12

4670.13 448.96 9.35 0.98 1.08

Promoter Share holding (i) No. of Shares (ii)Percentage of Share Holding 133061200 53061200 133061200 53061200 42.20 20.00 42.20 20.00

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Segment Reporting Mar'07

Notes: The above financial results were taken on record by the Board of Directors in its meeting held on 29.04.2006. During the year Bank has paid interim dividend @ 30% on the then Capital amounting Rs. 265.30 crore and has proposed a final dividend @ 30% on enhanced Capital amounting Rs.315.30 crore. Results include Rs.207.70 crores on account of depreciation on certain Govt. securities transferred from AFS to HTM category in terms of RBI guidelines. The figures of the corresponding period are not comparable to that extent. Financial results have been arrived at after considering provisions for loan losses and Standard Assets, depreciation on Investments and Fixed assets, Gratuity, Pension, Bonus, Leave Encashment, Tax on Income and amortization of deferred expenditure on VRS-2000. Based on best estimates of liability, the Management has made a provision of Rs. 302.75 crores in respect of wage arrear. During the year, the Bank has come out with a follow on public issue of 8 crores equity shares of Rs. 10 each at a price of Rs. 390/- per equity share. In accordance with the terms stipulated in letter dated 7th January 2005 from the Ministry of Finance, Govt. of India, the Bank has returned to the Govt. of India an aggregate amount of Rs. 1153.01 crores representing the amount raised for 3 crores equity shares of Rs 10 each at issue price net of the proportionate cost of public offer. PNB Assets Management Company Ltd. wholly owned subsidiary of the Bank, was amalgamated with the Bank, on appointed date i.e. 1st October 2004. The accumulated losses amounting to Rs. 4.42 crores (net of Reserves) have been debited to 'Revenue and other Reserves'.

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FINDING & ANALYSIS

My analysis is based primarily on the information collected through 50 questionnaires that I obtained during the promos in Yamuna Vihar. A copy of the questionnaires that was used has been attached in the appendix. The analysis is made are as follows:

THE BANKING HABIT OF THE CONSUMERS

A. Types of bank in which the consumer have their accounts based on 50 questionnaires that were collected.

NATIONALIZED BANKS PRIVATE BANKS MULTI NATIONAL BANKS

The above charts shows that of the 70 consumers questioned, 70% of them had their accounts in Nationalized Banks, 10% in private banks, and 20% had their accounts in Multinational Banks. This shows that the consumers still have full belief on the Nationalized Banks. The shares of the MNCs are only 20%. Their share has been increasing since the past years but they have to provide more services and commitment to gain more customers.

57

B.

USE OF THE DEBIT CARD Based on 50 questionnaires that were collected

YES NO

We find that out of 70 customers, 25% of them still not use the Debit Card. Now we should make the consumers aware of the facilities that they can acquire through the use of the Debit Card. The Bank should also bring in lucrative offers along with their debit card, like purchase of cinema tickets with the help of a debit card, increase in the discount rate from around 10% to around 20% on the purchases made through a debit card. A consumer will surely be attracted towards a bank giving these benefits along with there debit card.

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C. STANDING OF PUNJAB NATIONAL BANK AMONG

VARIOUS BANKS:
Based on 50 questionnaires that were collected.

PNB ICICI SBI HDFC CITI BANK

From above chart we find that out of 70 consumers, only 22% had there account with PNB, 25% had it with ICICI, 35% with SBI, 10% with HDFC & 8% with CITI BANK. With the help of the chart we can see the Punjab National Bank have to go a long way to penetrate into the life style of the consumers. They have to beat their competitors by providing more services that are given by them, & increase its services by making its debit card freely usable in any banks ATM machine.

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CHAPTER-5 FINDINGS AND RECOMMENDATIONS

60

FINDINGS AND RECOMMENDATIONS

FINDINGS
Punjab National Bank bas a great learning experience for me and in the due course of my project I found out that the consumers go for the Punjab National Bank for a status symbol and not merely for baking process. Its a prestigious issue for the customers that they hold Punjab National Bank account and so the bank should try and meet its commitment and keep the faith of the customers. Punjab National Bank should maintain good relationship with its customers like providing reliable services so that the customers can build their faith in the bank and bring in more references to join the Punjab National Bank (PNB) 1. Direct door to door interview. 2. Spreading, expanding the need & awareness of banking among the people through different means of communication. 3. Introducing new policies according to the customer needs. 4. Improving the various customer services by using more efficient customer relation management, thereby which will lead to improvement in the overall banking of PNB Bank.

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RECOMMENDATIONS
Punjab National Bank gave me a great opportunity to explore the banking sector in the economy. It really does have a lot of positive aspect, which are so lucrative that anybody would be attracted towards having a deposit with the Bank. Still I feel that are some areas where Punjab National Bank have to improve upon to have the complete faith of the consumers. These areas are highlighted as: Punjab National Bank seems to have been concentrating more on numbers (the numbers of deposits) specially saving / current account that they can produce and in the process the After Sale services has lagged behind. The sales term has gone far ahead of the customers care unit and so Punjab National Bank have to do something to improve the services that they provide to the customer. The customer satisfaction is not there. Once an account is opened, many a time they are considered as permanent and the customer services is relaxed. The bank should remember that a single satisfied customer could be a great help in bringing in new accounts for the bank by giving reference. There are so many PNBs ATMs. A customer feels proud in visiting their own banks ATM. Its all right that PNB account holder can access their account through other banks ATM as well, but that appeal of belongingness does not exist when a customer goes into other banks ATM. The customer feels proud of Punjab National Bank account, its hottest brand name and they want other people to see them enter into a Punjab National Bank ATM to access their account and so the management should try and increase the number of PNBs own ATM centers, especially in and around cinema halls like PVR, shopping complexes etc. Fixed deposit rates have goes down very much; PNB should create some mechanism to bring about some kind of stability in the interest rates.

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ANNEXURE

63

QUESTIONNAIRE
Name: Phone off: Occupation Office Address Monthly Income: 5000 10000 And above current bankers? Excellent Good Fair Poor Type of Banks you are holding saving account withNationalized / co-operative Private Multinational How long have you been banking with them? Less than 1 year 1-2 year 3 year and above How would you rate your experience with your 10000 20000 Phone Res.

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Do you presently hold a Debit Card? Yes No Does your bank charges you on the transaction that you do on the Debit Card?

Yes No

Which of these factors influenced your decision to open an account with your current bank?

Facilities provided by the Bank Recommendation by friend / relatives Advertisement Brand ATMs Branch timing

Bank which can be accessed at over 1450 ATMs all over the country for free* Yes No

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How important are the banking facilities for you?

Services A.T.M PHONE BANKING LOCKER FACILITIES CASH/CHEQUE PICK UP INSURANCE FACILITIES WITH YOUR ACCOUNT BANKING HOURS DISCOUNT IN RESTAURANT & SHOPPING MALLS FREE DRAFT/ PAY ORDER 365 DAYS BRANCH BANKING Not Important Average Important Very Important

Signature:

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DOMESTIC TERM DEPOSIT RATE

W.E.F. 24.6.2008
15 DAYS &UPTO 29 DAYS 30 DAYS TO 60 DAYS 61 DAYS TO 90 DAYS 91 DAYS TO < 1 YEAR 1 YEAR TO < 18 MONTHS 18 MONTHS TO < 24 MONYHS 2 YEAR TO < 3 YEARS 3 YEARS TO < 5 YEARS 4.75% 5.25% 5.50% 6.00% 6.25% 7.00% 7.50% 9.72%

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BIBLIOGRAPHY

68

BIBLIOGRAPHY
Books Gupta, C. B. Human Resource Management, Kothari C. R. Research Methodology, Web Sites http://www.google.com http://www.pnb.com http://www.pnb.india.com http://www.answes/pnb.com

Magazines and Broachers

Punjab National Banks Broachers & Services

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