INDIAN BANKING SYSTEM

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Project Report
ON

³INDIAN BANKING SYSTEM´
POST GARDUATE DIPLOMA IN BUSINESS ADMNISTRATION (PGDBM)
(2006-09)
UNDER THE SUPERVISION OF

Sr. Manager Mr. V.K Sharma & Dy. Manager Mrs. S. Saroaja
SUBMITTED BY

Roshan Ara 0621000460

INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY CENTRE FOR DISTANCE LEARNING
Ghaziabad

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EXECUTIVE SUMMARY

Banking in India originated in the first decade of 18 century with The General Bank of India coming into existence in1786. This was followed by Bank of Hindustan. Both these banks are now defunct. The oldest bank in existence in India is the State Bank of India being established as "The Bank of Bengal" in Calcutta in June 1806.

The Reserve Bank of India formally took on the responsibility of regulating the Indian banking sectorfrom1935. After India's independence 1947, the Reserve Bank was nationalized and given broader powers.

Currently (2007), banking in India is generally fairly mature in terms of supply, product range and reach-even though reach in rural India still remains a challenge for the private sector and foreign banks. In terms of quality of assets and capital adequacy, Indian banks are considered to have clean, strong and transparent balance sheets relative to other banks in comparable economies in its region. The Reserve Bank of India is an autonomous body, with minimal pressure from the government. The stated policy of the Bank on the Indian Rupee is to manage volatility but without any fixed exchange rate-and this has mostly been true.

The Modern Banking Functions are Fund based and Non-Fund based functions. These functions of a bank are those in which banks extend various services to their customers or add their commitments to certain transactions undertaken by their clients and charge their fees/ commissions for the services rendered by them / their commitments added to the transactions undertaken by the clients. The activities popularly known as µNon-fund facilities¶ provided by Banks.

Thus, we conclude«««««««««««

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TABLE OF CONTENTS

1. INTRODUCTION y Objectives of the study y Scope of study y Limitations of study

5 6 7

2. INDIAN BANKS ±
y y y y y Scope of Indian Bank Banking in India Definition of Banks Types of Bank Services Provided by Banks 8 9 11 12 13

3. RESERVE BANK OF INDIA± y Guidelines Provided by the RBI y Guidelines on Fair Practices Code 4. STUDY OF HDFC BANK 5. STUDY OF PNB BANK

21 28 33 46

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ACKNOWLEDGEMENT

I express my heartiest gratitude to Mr. V.K SHARMA (SENIOR MANAGERPNB) for giving me an opportunity to prepare a report on the project assigned to me. I am also thankful to Mrs. S. SAROJA (DEPUTY MANAGER) under their guidance I undertook this project, for extending the advice and direction that is required to carry on a study of this nature, and for helping me with the intricate details of the project at every step. Without their support and able guidance, it would have been very difficult to finish this work in the way I have done it.

Lastly I would like to thank all the respondents who offered their opinions and suggestions through the survey that was conducted by me. However, I accept the sole responsibility of any possible errors of omission.

( Roshan Ara )

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OBJECTIVES OF THE STUDY

To study broad outline of management of credit, market and operational risks associated with banking sector. To understand the importance of banking sector. To study the Indian bank scenario and its problem. Long Term and Short Term Finances. To study the role of bank in Indian Market. Different types of services provided by the banks. To study various bank, Corporate and Commercial. To study the Indian bank scenario and its problem. Though the Indian Banking System is very wide and elaborated, still the project covers whole subject in concise manner. The study aims at learning the techniques involved to manage the various types of Banks, various methodologies undertaken. To offer suggestions based upon the findings.

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SCOPE OF THE STUDY
A healthy banking system is essential for any economy striving to achieve good growth and yet remain stable in an increasingly global business environment. The Indian banking system, with one of the largest banking networks in the world, has witnessed a series of reforms over the past few years like the deregulation of interest rates, dilution of the government stake in public sector banks (PSBs), and the increased participation of private sector banks. The growth of the retail financial services sector has been a key development on the market front. Indian banks (both public and private) have not only been keen to tap the domestic market but also to compete in the global market place. Studying the increasing business scope of the bank. Market segmentation to find the potential customers for the bank. Customers¶ perception on the various products of the bank. The corporate sector has stepped up its demand for credit to fund its expansion plans; there has also been a growth in retail banking. The report seeks to present a comprehensive picture of the various types of bank. The banks can be broadly classified into two categories:y y Nationalise Bank Private Bank Within each of these broad groups, an attempt has been made to cover as comprehensively as possible, under the various sub-groups.

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LIMITATION OF THE STUDY: Every work has its own limitation.
Limitations are extent to which the process should not exceed. Limitations of this project are:1. The project was constrained by time limit of two months. 2. The major limitation of this study shall be data availability as the data is proprietary and not readily shared for dissemination. 3. Due to the ongoing process of globalization and increasing competition, no one model or method will suffice over a long period of time and constant up gradation will be required. As such the project can be considered as an overview of the various banks prevailing in Punjab National Bank and in the Banking Industry. 4. Each bank, in conforming to the RBI guidelines, may develop its own methods for measuring and managing risk. 5. The project study is restricted to banking sector used in India only. 6. The conclusion made is based on a sample study and does not apply to all the Individuals. 7. In India the banks are being segregated in different groups. Each group has their own benefits and limitations in operating in India. 8. All banks are not included.

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PROBLEMS: -- The corporate sector has stepped up its demand for credit to fund its expansion plans, there has also been a growth in retail banking. However, even as the opportunities increase, there are some issues and challenges that Indian banks will have to contend with if they are to emerge successful in the medium to long term.

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RESEARCH METHODOLOGY:-

The first stage included the introduction of Indian Banks and how they work in India. I choose five criteria Growth, Credit quality, Strength, Profitability, Efficiency / Profitability. The next stage involved determining the objectives of the study, drafting a questionnaire will be designed keeping in mind the target audience and objectives of the study. It will non-disguised in nature and will include a few open-ended questions.

DATA COLLECTIONS The data from such organization has also been collected. Primary data The primary data will be collected through the questionnaire designed. In the process of data collection we went to the respective bank to get the questionnaire filled. The preparation of the project report required me to visit the various other companies like Punjab National Bank, ICICI bank , State Bank of India, Central Bank, IDBI bank etc. in order to collect data. Secondary data The Preparation of the project report also required data from various journals, newspapers ( like The Economic Times, Times of India etc.) books ( like Working Capital Management written by Sarbesh Mishra and Financial Service written by M Y Khan etc.)

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SCOPE OF BANKING SECTOR
Banking business has a history of over 200 years. From the times of the Bank of Bengal (1806) the sector has been witnessing qualitative and quantitative changes. Main players during the pre-independence period were Credit Lyonnais, Allahabad Bank, Punjab National Bank and Bank of India. With 1935 regulation the Reserve Bank of India was proclaimed the Central Bank of India and was vested with controlling powers over the commercial banks.

The drastic development taken place during the first 25 years since independence was Nationalization of many private banks. With this, the central government became major policy maker for these nationalized banks With economic liberalization measures many private and foreign banking companies were allowed to operate in the country. Favorable economic climate and a variety of other factors such as demand for wide range of financial products from various sections of the society led to mutually beneficial growth to the banking sector and economic growth process. This was coincided by technology development in the banking operations. Today most of the Indian cities have networked banking facility as well as Internet banking facility. A customer is empowered to operate his account from any part of the country. UTI Bank, ICICI, HDFC Bank and Bank of Punjab are the main winners of the race.

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BANKING IN INDIA
Banking in India originated in the first decade of 18th century with The General Bank of India coming into existence in 1786. This was followed by Bank of Hindustan. Both these banks are now defunct. The oldest bank in existence in India is the State Bank of India being established as "The Bank of Bengal" in Calcutta in June 1806. A couple of decades later, foreign banks like Credit Lyonnais started their Calcutta operations in the 1850s. At that point of time, Calcutta was the most active trading port, mainly due to the trade of the British Empire, and due to which banking activity took roots there and prospered. The first fully Indian owned bank was the Allahabad Bank, which was established in 1865. By the 1900s, the market expanded with the establishment of banks such as Punjab National Bank, in 1895 in Lahore and Bank of India, in 1906, in Mumbai both of which were founded under private ownership. The Reserve Bank of India formally took on the responsibility of regulating the Indian banking sector from 1935. After India's independence in 1947, the Reserve Bank was nationalized and given broader powers.

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Reserve Bank of India Central Bank and superme monetary authority

Scheduled Banks Commercial Banks Co-Operative Banks

Foreign Banks (40)

Regional Rural Bank (196)

Urban Cooperatives (52)

State Cooperatives (16)

Public Sector Banks (27)

Private Sector Bank (30)

Old (22)

New (8)

State Bank of India & Associate Banks (8)

Other Nationalised Banks (19)

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INTRODUCTION

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Definition of the Bank:- Financial institution whose primary activity is to act as a payment agent for customers and to borrow and lend money. Banks are important players of the market and offer services as loans and funds.     Banking was originated in 18th century First bank were General Bank of India and Bank of Hindustan, now defunct. Punjab National Bank and Bank of India was the only private bank in 1906. Allahabad bank first fully India owned bank in 1865.

Bank of Bengal

Bank of Bombay

Imperial Bank of India

State Bank of India

Bank of Madras

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Types of banking
Commercial bank has two meanings:
o

Commercial bank is the term used for a normal bank to distinguish it from an investment bank. (After the great depression, the U.S. Congress required that banks only engage in banking activities, whereas investment banks were limited to capital markets activities. This separation is no longer mandatory.)

o

Commercial bank can also refer to a bank or a division of a bank that mostly deals with deposits and loans from corporations or large businesses, as opposed to normal individual members of the public (retail banking). It is the most successful department of banking.

y

Community development bank are regulated banks that provide financial services and credit to underserved markets or populations.

y y

Private banks manage the assets of high net worth individuals. Offshore banks are banks located in jurisdictions with low taxation and regulation. Many offshore banks are essentially private banks.

y y

Savings banks accept savings deposits. Postal savings banks are savings banks associated with national postal systems.

There are some examples of banks in India: Private sector bank ‡ HDFC, ICICI, Axis bank, Yes bank, Kotak Mahindra bank, Bank of Rajasthan  Rural bank ‡ United bank of India, Syndicate bank, National bank for agriculture and rural development (NABARD)  Commercial bank y State Bank, Central Bank, Punjab National Bank, HSBC, ICICI, HDFC etc.  Retail bank ‡ BOB, PNB  Universal bank ‡ Deutsche bank 15
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Services provided by the bank
Banks provide two types of services 1. Fund Based 2. Non-Fund Based Banking Services

Fund Based Services

Non-Fund Based Services

FUND BASED AND NON-FUND BASED FUNCTIONS
The difference between fund-based and non-fund based credit assistance lies mainly in the cash outflow. While the former involves all immediate cash outflow, the latter may or may not involve cash outflow from a banker. In other words, a fund based credit facility to a borrower would result in depletion of actual liquidity of a banker immediately whereas grant of non-fund based credit facilities to a borrower may or may not affect the banker¶s liquidity.

Fund Based Services

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Fund Based Services

Loans & Advances

Leasing & Hire Purchase

Investment

Commercial Loans

Personal Loans

Capital Market Investment

Debt Market Investment

FUND BASED FACILITY
Fund based functions of a bank are those in which banks make deployment of their funds either by granting advances or by making investments for meeting gaps in funds requirements of their customers/ borrowers. Fund-based functions of a bank may be classified into two parts:  Granting of Loans and Advances Making Investments in shares/ debentures/ bonds.

FUND BASED SREVICES I. LOANS AND ADVANCES
1. Commercial Loans Segment A. Working Capital:- Working Capital is Current assets minus current liabilities. Working capital measures how much in liquid assets a company has

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available to build its business. The number can be positive or negative, depending on how much debt the company is carrying. In general, companies that have a lot of working capital will be more successful since they can expand and improve their operations. Companies with negative working capital may lack the funds necessary for growth, also called net current assets or current capital. A loan whose purpose is to finance everyday operation of a company. A working capital loan is not used to buy long term assets or investments. Instead it's used to clear up accounts payable, wages, etc.

I. Cash Credit:- This facility is given by the banker to the customer by way of a certain amount of credit facility. Its limit is fixed on the basis of security of the company`s current assets.

II. Overdraft:- Banks allow selected customers to write cheques in excess of the balance in their current account, ie, to overdraw. Overdrafts are arranged up to limits which depend on the customer's credit standing and the bank manager's humour. The arrangements allow flexibility in the amount spent and, equally, allow flexibility in repayments (although technically a bank can demand repayment of an overdraft within 24 hours). In that respect overdrafts are unlike personal loans, which are structured with regular repayments. Interest on overdrafts is charged on the fluctuating daily balance.

III. Bills Finance:-

IV. Bills Purchase:18
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V. Bills Discounting:-This is the most important form in which a bank lends without any collateral security. The seller draws bills of exchange on the buyer of goods on credit. Such a bill may either be a clean bill or documentary bill which is accompanied by documents of title to goods,viz railway receipts. The bank purchase bills payable on demand and credit the customer`s account with the amount of bills less the discount. On maturity of the bills, the bank present them to its acceptor for payment. In case the discounted bill is dishonored by the non-payment, the bank can recovers the full amount from the customer along with the expense in that connection.

B. Tem Loans:- A bank loan to a company, with a fixed maturity and often featuring amortization of principal. If this loan is in the form of a line of credit, the funds are drawn down shortly after the agreement is signed. Otherwise, the borrower usually uses the funds from the loan soon after they become available. Bank term loans are very a common kind of lending. I. Capital Expenditure:- Money spent to acquire or upgrade physical assets such as buildings and machinery. also called capital spending or capital expense.

II. Fixed Assets Finance:-

III. Project Finance:- Financing arrangements where the funds are made available for a specific purpose (the project), with the loan repayments geared to the project's cashflow. Project finance is used in connection with raising large amounts of money for big-ticket, energy-related facilities. The term has come to be loosely applied to various forms of financing. 'A financing of a particular economic unit in which a lender is satisfied to look

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initially to the cashflows and earnings of that economic unit as the source of funds from which a loan will be repaid and to the assets of the economic unit as collateral for the loan.' IV. Consumer Loans Advance against Shares:-

V. Housing Loans:-

VI. Education Loans:-

3. Personal Loans Segment:- Loan granted for personal, family, or household use, as distinguished from a loan financing a business. Though in some situations the lender may require a co-signer or guarantor. If unsecured, the loan is made on the basis of the borrower's integrity and ability to Pay. Generally, these loans are used for debt consolidation, or to pay for vacations, education expenses, or medical bills, and are amortized over a fixed term with regular payments of principal and interest.

Non-Fund based services

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It is generally perceived that the non-fund based business is very remunerative to bank and the borrowers. The banks, besides getting handsome commission or fee and some other service charges, also get the low cost deposits in the shape of margin and ancillary business. The funds of the borrower are not blocked in the advances to be given to the suppliers or beneficiaries and this keeps his liquidity position comfortable, production smooth and costs low.

Non-Fund Based Services

Funds remittance/Transfer Facilities

Letter of Credit/ Bank Guarantee

Agency Functions

Merchant Banking Functions

PURPOSE FOR NON-FUND BASED FACILITIES:The borrowers need such facilities not only for purchases of current assets or financing there of or take benefit of certain services with the help of non-fund based facilities. They also need the facilities for acquisition of fixed assets including their financing.

RBI NORMS:
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Prudential exposure norms as per extant guidelines of Reserve Bank of India provides that the maximum exposure of a bank for all its Fund based and Non-fund based credit facilities, investments, underwriting, investments in Bonds and commercial paper and any other commitment should not exceed 25 percent of its (bank's) net worth to an individual borrower and 50 percent of its, net worth to a 'group'. It may however, be rioted that while calculating exposure, the Non-fund based facilities are to be taken at 50 percent of the sanctioned limit. To illustrate the point let us consider the following example:-

Example1. Particulars Rs. Rs. In crores
700

Net worth of the bank

Maximum exposure permitted for an individual borrower (25% of net worth of the bank) Working Capital Control and Banking Policy

175

Maximum exposure permitted for all borrowers 350 under the same group (50% of net worth of the bank)

657

Example1. Particulars Rs. 22
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Limits sanctioned to borrower Fund Based Non-Fund Based 100 100 100

Total 200

200

Total Exposure For Fund Based limits @ 50% of limits

100

50 For Non-Fund based limits 50 @ 50% of limits Total 150

Total credit limits to the above borrower are Rs.200 crores which are in excess of the maximum exposure norm of Rs. 175 crores. but for the purpose of determining exposure we have taken non-fund based limits at 50 percent of itsvalue and total exposure is taken at 150 crores which is well within the norm.

FUNDS REMITTANCE/ TRANSFER FACILITIES ‡ ‡ Issue of demand draft Collection of bills and cheques

ESTABLISHMENT OF LC/ BG

Letter of credit:- A Letter of Credit (L/C) is a written document issued by the Buyers'
Banker (BBK), at a request of the Buyer (B), in favour of the Seller(S), whereby the Buyer's Banker (BBK) gives an undertaking to the Seller(S) that, in the event of the Seller tendering the Bill of Exchange to the Seller's Banker (SBK), along with all the required documents, in strict compliance of all the terms and conditions stipulated in the L/C, the entire amount of the bill will be paid to the Seller (S) by the Seller's Banker 23
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(SBK), on behalf of the Buyer's Banker (BBK) immediately, as has been, in turn, undertaken by the buyer to his own Banker(BBK).

Bank guarantee: - It is customary for the Bank, in normal course of business, to issue
and execute guarantees in favor of third parties on behalf of the customers. The Bank guarantees are governed by various provisions as contained in the Indian Contract Act, 1872. The commercial transactions, bank¶s customers are sometimes required to give a Bank Guarantee. This is mostly as an alternate to keep cash as a security deposit. The third party who seeks the guarantee, not being aware of the customer¶s financial standing prefers a bank guarantee. In turn the Bank, which very well understands the financial standing of the customer, undertakes the guarantee of the customer¶s financial commitments or performance of contracts by him. The bank charges commission for this service, which depends on the security available and the financial stability of the customer.

AGENCY FUNCTIONS ‡ ‡ ‡ ‡ Collecting of B/E, P-notes, cheques & securities Selling of products of insurance co./ MF Granting & issuing LC, traveler's cheque Agent for any govt., local authority, etc

MERCHANT BANKING ‡ ‡ ‡ ‡ ‡ ‡ ‡ Syndication of loans Venture capital finance Public issue management Corporate counseling Mergers & acquisitions Portfolio management services Investment counseling

E-BANKING ‡ Electronic payment system

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‡ ‡ ‡ ‡

ATM Tele-banking Credit card and debit card Online banking

MOBILE BANKING ‡ ‡ ‡ ‡ ‡ ‡ Account services Credit card services DEMAT account Loan account services Bill services Other services

DEPOSIT SCHEMES FOR NRI's Foreign Currency Nonresident (FCNR-B) Deposits : ‡ ‡ ‡ ‡ ‡ ‡ ‡ Tax Exemption Choice of Currency Remit in any Currency Minimum & Maximum Amount Joint account Power of Attorney (P/A) Nomination

Resident Foreign Currency (RFC):- Deposits Returning Indians for permanent settlement, after staying abroad for not less than one year, can Retain their savings in foreign currency in a RFC account.  Get the proceeds of FCNR (B)/NRE Deposits credited to this account.

Non Resident external (NRE):-Deposits can be placed in  Savings Bank A/c  Fixed Deposit A/c 25
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Non Resident Ordinary (NRO) Deposits:-Where an Indian citizen having a resident account leaves India and becomes non-resident, his resident account should be designated as NRO account. Where non-resident Indian receives income in India, he can open a NRO a/c with such funds.

Reserve Banks of India:Establishment The Reserve Bank of India was established on April 1, 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934. The Central Office of the Reserve Bank was initially established in Calcutta but was permanently moved to Mumbai in 1937. The Central Office is where the Governor sits and where policies are formulated. Though originally privately owned, since nationalisation in 1949, the Reserve Bank is fully owned by the Government of India.

Guidelines on Ownership and Governance in Private Sector Banks
Banks are "special" as they not only accept and deploy large amount of uncollateralized public funds in fiduciary capacity, but they also leverage such funds through credit creation. The banks are also important for smooth functioning of the payment system. In view of the above, legal prescriptions for ownership and governance of banks laid down in Banking Regulation Act, 1949 have been supplemented by regulatory prescriptions issued by RBI from time to time. The

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existing legal framework and significant current practices in particular cover the following aspects: i. The composition of Board of Directors comprising members with demonstrable professional and other experience in specific sectors like agriculture, rural economy, co-operation, SSI, law, etc., approval of Reserve Bank of India for appointment of CEO as well as terms and conditions thereof, and powers for removal of managerial personnel, CEO and directors, etc. in the interest of depositors are governed by various sections of the B.R. Act, 1949. ii. Guidelines on corporate governance covering criteria for appointment of directors, role and responsibilities of directors and the Board, signing of declaration and undertaking by directors, etc., were issued by RBI on June 20, 2002 and June 25, 2004, based on the recommendations of Ganguly Committee and a review by the BFS. iii. Guidelines for acknowledgement of transfer/allotment of shares in private sector banks were issued in the interest of transparency by RBI on February 3, 2004. iv. Foreign investment in the banking sector is governed by Press Note dated March 5, 2004 issued by the Government of India, Ministry of Commerce and Industries. v. The earlier practice of RBI nominating directors on the Boards of all private sector banks has yielded place to such nomination in select private sector banks. 2. Against this background, it is considered necessary to lay down a comprehensive framework of policy in a transparent manner relating to ownership and governance in the Indian private sector banks as described below. 3. The broad principles underlying the framework of policy relating to ownership and governance of private sector banks would have to ensure that (i) The ultimate ownership and control of private sector banks is well diversified. While diversified ownership minimises the risk of misuse or imprudent use of

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leveraged funds, it is no substitute for effective regulation. Further, the fit and proper criterion, on a continuing basis, has to be the over-riding consideration in the path of ensuring adequate investments, appropriate restructuring and consolidation in the banking sector. The pursuit of the goal of diversified ownership will take account of these basic objectives, in a systematic manner and the process will be spread over time as appropriate. (ii) Important Shareholders (i.e., shareholding of 5 per cent and above) are µfit and proper¶, as laid down in the guidelines dated February 3, 2004 on acknowledgement for allotment and transfer of shares. (iii) The directors and the CEO who manage the affairs of the bank are µfit and proper¶ as indicated in circular dated June 25, 2004 and observe sound corporate governance principles. (iv) Private sector banks have minimum capital/net worth for optimal operations and systemic stability. (v) The policy and the processes are transparent and fair. 4. Minimum capital The capital requirement of existing private sector banks should be on par with the entry capital requirement for new private sector banks prescribed in RBI guidelines of January 3, 2001, which is initially Rs.200 crore, with a commitment to increase to Rs.300 crore within three years. In order to meet with this requirement, all banks in private sector should have a net worth of Rs.300 crore at all times. The banks which are yet to achieve the required level of net worth will have to submit a time-bound programme for capital augmentation to RBI. Where the net worth declines to a level below Rs.300 crore, it should be restored to Rs. 300 crore within a reasonable time. 5. Shareholding

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i. The RBI guidelines on acknowledgement for acquisition or transfer of shares issued on February 3, 2004 will be applicable for any acquisition of shares of 5 per cent and above of the paid up capital of the private sector bank. ii. In the interest of diversified ownership of banks, the objective will be to ensure that no single entity or group of related entities has shareholding or control, directly or indirectly, in any bank in excess of 10 per cent of the paid up capital of the private sector bank. Any higher level of acquisition will be with the prior approval of RBI and in accordance with the guidelines of February 3, 2004 for grant of acknowledgement for acquisition of shares. iii. Where ownership is that of a corporate entity, the objective will be to ensure that no single individual/entity has ownership and control in excess of 10 per cent of that entity. Where the ownership is that of a financial entity the objective will be to ensure that it is a well established regulated entity, widely held, publicly listed and enjoys good standing in the financial community. iv, Banks (including foreign banks having branch presence in India)/FIs should not acquire any fresh stake in a bank¶s equity shares, if by such acquisition, the investing bank¶s/FI¶s holding exceeds 5 per cent of the investee bank¶s equity capital as indicated in RBI circular dated July 6, 2004. v. As per existing policy, large industrial houses will be allowed to acquire, by way of strategic investment, shares not exceeding 10 per cent of the paid up capital of the bank subject to RBI¶s prior approval. Furthermore, such a limitation will also be considered if appropriate, in regard to important shareholders with other commercial affiliations. vi. In case of restructuring of problem/weak banks or in the interest of consolidation in the banking sector, RBI may permit a higher level of shareholding, including by a bank. 6. Directors and Corporate Governance

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i. The recommendations of the Ganguly Committee on corporate governance in banks have highlighted the role envisaged for the Board of Directors. The Board of Directors should ensure that the responsibilities of directors are well defined and the banks should arrange need-based training for the directors in this regard. While the respective entities should perform the roles envisaged for them, private sector banks will be required to ensure that the directors on their Boards representing specific sectors as provided under the B.R. Act, are indeed representatives of those sectors in a demonstrable fashion, they fulfil the criteria under corporate governance norms provided by the Ganguly Committee and they also fulfil the criteria applicable for determining µfit and proper¶ status of Important Shareholders (i.e., shareholding of 5 per cent and above) as laid down in RBI Circular dated June 25, 2004. ii. As a matter of desirable practice, not more than one member of a family or a close relative (as defined under Section 6 of the Companies Act, 1956) or an associate (partner, employee, director, etc.) should be on the Board of a bank. iii. Guidelines have been provided in respect of 'Fit and Proper' criteria for directors of banks by RBI circular dated June 25, 2004 in accordance with the recommendations of the Ganguly Committee on Corporate Governance. For this purpose a declaration and undertaking is required to be obtained from the proposed / existing directors iv. Being a Director, the CEO should satisfy the requirements of the µfit and proper¶ criteria applicable for directors. In addition, RBI may apply any additional requirements for the Chairman and CEO. The banks will be required to provide all information that may be required while making an application to RBI for approval of appointment of Chairman/CEO. 7. Foreign investment in private sector banks In terms of the Government of India press note the aggregate foreign investment in private banks from all sources (FDI, FII, NRI) cannot exceed 74 per cent. At all

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times, at least 26 per cent of the paid up capital of the private sector banks will have to be held by resident Indians. 7.1 Foreign Direct Investment (FDI) (other than by foreign banks or foreign bank group) i. The policy already articulated in guidelines for determining µfit and proper¶ status of shareholding of 5 per cent and above will be equally applicable for FDI. Hence any FDI in private banks where shareholding reaches and exceeds 5 per cent either individually or as a group will have to comply with the criteria indicated in the aforesaid guidelines and get RBI acknowledgement for transfer of shares. ii. To enable assessment of µfit and proper¶ the information on ownership/beneficial ownership as well as other relevant aspects will be extensive. 7.2 Foreign Institutional Investors (FIIs) i. Currently there is a limit of 10 per cent for individual FII investment with the aggregate limit for all FIIs restricted to 24 per cent which can be raised to 49 per cent with the approval of Board/General Body. This dispensation will continue. ii. The present policy requires RBI¶s acknowledgement for acquisition/transfer of shares of 5 per cent and more of a private sector bank by FIIs based upon the policy guidelines on acknowledgement of acquisition/transfer of shares issued. For this purpose RBI may seek certification from the concerned FII of all beneficial interest. 7.3 Non-Resident Indians (NRIs) Currently there is a limit of 5 per cent for individual NRI portfolio investment with the aggregate limit for all NRIs restricted to 10 per cent which can be raised to 24 per cent with the approval of Board/General Body. Further, the policy guidelines on acknowledgement for acquisition/transfer will be applied. 8. Due diligence process

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The process of due diligence in all cases of shareholders and directors as above, will involve reference to the relevant regulator, revenue authorities, investigation agencies and independent credit reference agencies as considered appropriate. 9. Transition arrangements i. The current minimum capital requirements for entry of new banks is Rs.200 crore to be increased to Rs.300 crore within three years of commencement of business. A few private sector banks which have been in existence before these capital requirements were prescribed have less than Rs.200 crore net worth. In the interest of having sufficient minimum size for financial stability, all the existing private banks should also be able to fulfil the minimum net worth requirement of Rs.300 crore required for a new entry. Hence any bank with net worth below this level will be required to submit a time bound programme for capital augmentation to RBI for approval. ii. Where any existing shareholding of any individual entity/group of entities is 5 per cent and above, due diligence outlined in the guidelines will be undertaken to ensure fulfillment of µfit and proper¶ criteria. iii. Where any existing shareholding by any individual entity/group of related entities is in excess of 10 per cent, the bank will be required to indicate a time table for reduction of holding to the permissible level. While considering such cases, RBI will also take into account the terms and conditions of the banking licences. iv. Any bank having shareholding in excess of 5 per cent in any other bank in India will be required to indicate a time bound plan for reduction in such investments to the permissible limit. The parent of any foreign bank having presence in India, having shareholding directly or indirectly through any other entity in the banking group in excess of 5 per cent in any other bank in India will be similarly required to indicate a time bound plan for reduction of such holding to 5 per cent.

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v. Banks will be required to undertake due diligence before appointment of directors and Chairman/CEO on the basis of criteria that will be separately indicated and provide all the necessary certifications/information to RBI. vi. Banks having more than one member of a family, or close relatives or associates on the Board will be required to ensure compliance with these requirements at the time of considering any induction or renewal of terms of such directors. vii. Action plans submitted by private sector banks outlining the milestones for compliance with the various requirements for ownership and governance will be examined by RBI for consideration and approval. 10. Continuous monitoring arrangements i. Where RBI acknowledgement has already been obtained for transfer of shares of 5 per cent and above, it will be the bank¶s responsibility to ensure continuing compliance of the µfit and proper¶ criteria and provide an annual certificate to the RBI of having undertaken such continuing due diligence. ii. Similar continuing due diligence on compliance with the µfit and proper¶ criteria for directors/CEO of the bank will have to be undertaken by the bank and certified to RBI annually. iii. RBI may, when considered necessary, undertake independent verification of µfit and proper¶ test conducted by banks through a process of due diligence as described in paragraph 8 11. On the basis of such continuous monitoring, RBI will consider appropriate measures to enforce compliance.

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Guidelines on Fair Practices Code 
Loan application forms shall be comprehensive to include information about rate of interest (fixed/floating) and manner of charging (monthly/quarterly/half yearly/ rest), process fees and other charges, penal interest rates, pre-payment options and any other matter which affects the interest of the borrower, so that a meaningful comparison with that of other banks can be made and informed decision can be taken by the borrower.  Banks and Financial Institution should devise a system of giving

acknowledgement for receipt of all loans application. Banks/ Financial Institutions should verify the loan application within a reasonable period of time. If additional details / documents are required, they should intimate the borrowers immediately. If all the requirements are complied with the borrowers, banks/ Financial Institution should acknowledge for the same and state the specific time period from the date of acknowledgement within which a decision on the specific loan request will be conveyed to the borrowers.  Acknowledgement should also state the amount of process fees paid or to be paid and the extent to which such fees shall be refunded in the event of rejection of any application for loan.  In the case of rejection of any loan application, lenders should convey in writing the specific reasons thereof.  Lenders should ensure that there is proper assessment of credit requirement of borrowers. The credit limit, which may be sanctioned, should be mutually settled.  Terms and conditions and other caveats governing credit facilities given by banks / Financial Institution arrived at after negotiation by the lending institution and the borrower should be reduced in writing duly witnessed and certified by the authorised sanctioning authority; in respect of advances sanctioned by the Board 34
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of Directors or its committee the documents of understanding should be certified by the authorised signatory preferably at company secretary level. A copy of such agreement should be made available to the borrowers for their record.  Lenders should ensure timely disbursement of loans sanctioned.  Stipulation of margin and security should be based on due diligence and credit worthiness of borrowers.  Lenders should keep the borrowers apprised of the state of their accounts from time to time and shall give notice of any change in the terms and conditions including interest rates and charges are effected only prospectively. To ensure the above, Banks / Financial Institution should create appropriate information dissemination mechanism.  The loan agreement should clearly specify the liability of lenders to borrowers in regard to allowing drawings beyond the sanctioned limits, honouring the cheques issued for the purpose other than agreed, disallowing large cash withdrawals and obligation to meet further requirements of the borrowers on account of growth in business etc. without proper revision and sanction in credit limits, and disallowing drawings on a borrower account on its classification as a non-performing assets or on account of non-compliance with the terms of sanction.  Lenders should give reasonable notice to borrowers before taking decision to recall / accelerate payment or performance under the agreement or seeking additional securities.  Lenders should release all securities on receiving payment of loan or realisation of loan subject to any legitimate right of lien for any other claim lenders may have against borrowers. If such right of set off is to be exercised, borrowers shall be given notice about the same with full particulars about the remaining claims and the documents under which lenders are entitled to retain the securities till the relevant claims are settled / paid.

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ORGANIZATION PROFILE

y

FORMATION OF THE COMPANY

The Housing Development Finance Corporation Limited (HDFC) was amongst the first to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the private sector, as part of the RBI's liberalization of the Indian Banking Industry in 1994. The bank was incorporated in August 1994 in the name of 'HDFC Bank Limited', with its registered office in Mumbai, India. HDFC Bank commenced operations as a Scheduled Commercial Bank in January 1995. y PROMOTER

HDFC is India's premier housing finance company and enjoys an impeccable track record in India as well as in international markets. Since its inception in 1977, the Corporation has maintained a consistent and healthy growth in its operations to remain the market leader in mortgages. Its outstanding loan portfolio covers well over a million dwelling units. HDFC has developed significant expertise in retail mortgage loans to different market segments and also has a large corporate client base for its housing related credit facilities. With its experience in the financial markets, a strong market reputation, large shareholder base and unique consumer franchise, HDFC was ideally positioned to promote a bank in the Indian environment.

y

BUSINESS FOCUS

HDFC Bank's mission is to be a World-Class Indian Bank. The objective is to build sound customer franchises across distinct businesses so as to be the preferred provider of banking services for target retail and wholesale customer segments, and to achieve healthy growth in profitability, consistent with the bank's risk appetite. The bank is committed to maintain the highest level of ethical standards, professional integrity, corporate governance and regulatory compliance. HDFC Bank's business philosophy is

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based on four core values ± Operational Excellence, Customer Focus, Product Leadership and People. y CAPITAL STRUCTURE

The authorized capital of HDFC Bank is Rs550 crore (Rs5.5 billion). The paid-up capital is Rs424.6 crore (Rs.4.2 billion). The HDFC Group holds 19.4% of the bank's equity and about 17.6% of the equity is held by the ADS Depository (in respect of the bank's American Depository Shares (ADS) Issue). Roughly 28% of the equity is held by Foreign Institutional Investors (FIIs) and the bank has about 570,000 shareholders. The shares are listed on the Stock Exchange, Mumbai and the National Stock Exchange. The bank's American Depository Shares are listed on the New York Stock Exchange (NYSE) under the symbol 'HDB'.

y

TIMES BANK AMALGAMATION

In a milestone transaction in the Indian banking industry, Times Bank Limited (another new private sector bank promoted by Bennett, Coleman & Co./Times Group) was merged with HDFC Bank Ltd., effective February 26, 2000. As per the scheme of amalgamation approved by the shareholders of both banks and the Reserve Bank of India, shareholders of Times Bank received 1 share of HDFC Bank for every 5.75 shares of Times Bank. The acquisition added significant value to HDFC Bank in terms of increased branch network, expanded geographic reach, enhanced customer base, skilled manpower and the opportunity to cross-sell and leverage alternative delivery channels.

y

DISTRIBUTION NETWORK

HDFC Bank is headquartered in Mumbai. The Bank at present has an enviable network of over 1229 branches spread over 444 cities across India. All branches are linked on an online real-time basis. Customers in over 120 locations are also serviced through Telephone Banking. The Bank's expansion plans take into account the need to have a presence in all major industrial and commercial centers where its corporate customers are located as well as the need to build a strong retail customer base for both deposits and loan products. Being a clearing/settlement bank to various leading stock exchanges, the 37
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Bank has branches in the centers where the NSE/BSE has a strong and active member base. The Bank also has a network of about over 2526 networked ATMs across these cities. Moreover, HDFC Bank's ATM network can be accessed by all domestic and international Visa/MasterCard, Visa Electron/Maestro, Plus/Cirrus and American Express Credit/Charge cardholders.

y

TECHNOLOGY

HDFC Bank operates in a highly automated environment in terms of information technology and communication systems. All the bank's branches have online connectivity, which enables the bank to offer speedy funds transfer facilities to its customers. Multi-branch access is also provided to retail customers through the branch network and Automated Teller Machines (ATMs). The Bank has made substantial efforts and investments in acquiring the best technology available internationally, to build the infrastructure for a world class bank. The Bank's business is supported by scalable and robust systems which ensure that our clients always get the finest services we offer. The Bank has prioritized its engagement in technology and the internet as one of its key goals and has already made significant progress in web-enabling its core businesses. In each of its businesses, the Bank has succeeded in leveraging its market position, expertise and technology to create a competitive advantage and build market share.

yBUSINESS FOCUS HDFC Bank's mission is to be a World-Class Indian Bank. The objective is to build sound customer franchises across distinct businesses so as to be the preferred provider of banking services for target retail and wholesale customer segments, and to achieve healthy growth in profitability, consistent with the bank's risk appetite. The bank is committed to maintain the highest level of ethical standards, professional integrity, corporate governance and regulatory compliance. HDFC Bank's business philosophy is based on four core values- Operational Excellence, Customer Focus, Product Leadership and People.

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y

PRODUCT SCOPE:

HDFC Bank offers a bunch of products and services to meet the every need of the people. The company cares for both, individuals as well as corporate and small and medium enterprises. For individuals, the company has a range accounts, investment, and pension scheme, different types of loans and cards that assist the customers. The customers can choose the suitable one from a range of products which will suit their life-stage and needs. For organizations the company has a host of customized solutions that range from Funded services, Non-funded services, Value addition services, Mutual fund etc. These affordable plans apart from providing long term value to the employees help in enhancing goodwill of the company. The products of the company are categorized into various sections which are as follows: · Accounts and deposits. · Loans. · Investments and Insurance. · Forex and payment services. · Cards. · Customer center.

PRODUCTS AND SERVICES AT A GLANCE 1. PERSONAL BANKING A. Accounts & Deposits - Regular Savings Account - Savings Plus Account - SavingsMax Account - Senior Citizens Account - No Frills Account - Institutional Savings Account - Payroll Salary Account - Classic Salary Account 39
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- Regular Salary Account - Premium Salary Account - Defence Salary Account - Kid's Advantage Account - Pension Saving Bank Account - Family Savings Account - Kisan No Frills Savings Account - Kisan Club Savings Account - Plus Current Account - Trade Current Account - Premium Current Account - Regular Current Account - Apex Current Account - Max Current Account - Reimbursement Current Account - RFC - Domestic Account - Regular Fixed Deposit - Super Saver Account - Sweep-in Account - HDFC Bank Preferred - Private Banking B. Loans - Personal Loans - Home Loans - Two Wheeler Loans - New Car Loans - Used Car Loans - Overdraft against Car - Express Loans - Loan against Securities - Loan against Property - Commercial Vehicle Finance 40
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- Working Capital Finance - Construction Equipment Finance - Offers & Deals - Customer Center C. Investments & Insurance - Mutual Funds - Insurance - Bonds - Financial Planning - Knowledge Centre - Equities & Derivatives - Mudra Gold Bar D. Forex Services - Trade Finance - Travelers¶ Cheques - Foreign Currency Cash - Foreign Currency Drafts - Foreign Currency Cheque Deposits - Foreign Currency Remittances - Cash To Master - ForexPlus Card E. Payment Services - Net Safe - Prepaid Refill - Bill Pay - Direct Pay - Visa Money Transfer - E-Monies Electronic Funds Transfer - Excise & Service Tax Payment F. Access Your Bank - One View - Insta Alerts 41
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- Mobile Banking - ATM - Phone Banking - Branch Network G. Cards - Silver Credit Card - Gold Credit Card - Woman's Gold Credit Card - Platinum plus Credit Card - Titanium Credit Card - Value plus Credit Card - Health plus Credit Card - HDFC Bank Idea Silver Card - HDFC Bank Idea Gold Card - Compare Cards - Transfer & Safe - Track your Credit Card H. Get More from Your Card - Offers & Savings - My Rewards - Insta Wonderz - Add-On Cards - Credit Card Usage Guide - Easy EMI - Net safe - Smart Pay - Secure Plus - My City Benefit Card - Debit Cards - Easy ShopInternational Debit Card - Easy Shop Gold Debit Card - Easy ShopInternational Business Debit Card 42
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- Easy ShopWoman's Advantage Debit Card - Prepaid Cards - Forex Plus Card - Kisan Card I. Customer Centre - Offers & Deals - Winners of Contests & Promotions 2. Wholesale Banking A. Corporate Funded Services Non Funded Services Value Added Services Internet Banking B. Small & Medium Enterprises Funded Services Non-Funded Services Specialized Services Internet Banking C. Financial Institutions & Trusts Banks Financial Institutions Mutual Funds Stock Brokers

MILESTONES IN THE HISTORY HDFC Bank began its operations in 1995 with a simple mission: to be a "World-class Indian Bank". They realized that only a single-minded focus on product quality and service excellence would help us get there. Today, they are proud to say that they are well on our way towards that goal.

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It is extremely gratifying that their efforts towards providing customer convenience have been appreciated both nationally and internationally.

AWARDS & ACHIEVEMENTS of HDFC BANK
Business Today-Monitor Group survey Financial Express-Ernst & Young Award The Asian Banker Excellence in Retail Financial Services Awards Asian Banker One of India's "Most Innovative Companies". Best Bank Award in the Private Sector category Best Retail Bank in India. Managing Director Aditya Puri won the Leadership achievement Award for India Best Bank Award in the Private sector category

Outlook Money & NDTV Profit

MERGER HDFC Bank and Centurion Bank of Punjab merger at share swap ratio of 1:29.The Boards of HDFC Bank and Centurion Bank of Punjab met on 25 February, 2008 and approved, subject to due diligence, the share swap ratio for the proposed merger of Centurion Bank of Punjab with HDFC Bank. The Scheme of Amalgamation envisages a share exchange ratio of one share of HDFC Bank for twenty nine shares of Centurion Bank of Punjab.

The combined entity would have a nationwide network of 1,148 branches (the largest amongst private sector Banks) a strong deposit base of around Rs. 1,200 billion and net advances of around Rs. 850billion. The balance sheet size of the combined entity would be over Rs. 1,500 billion.

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Mr. Shailendra Bhandari, Managing Director and CEO, Centurion Bank of Punjab said, ³We are extremely pleased to receive the go ahead from our board to pursue this opportunity. A merger between the banks provides significant synergies to the combined entity. The proposed merger would further improve the franchise and customer proposition offered by the individual banks.´

SUGGESTIONS: Finally some recommendations for the company are as follows:y To make people aware about the benefit of becoming HDFC Bank¶s Sales

Executive, following activities of advertisement should be done through 1. Print Media. 2. Hoarding & Banners. 3. Stalls in Trade Fares 4. Distribution of leaflets containing details information.

y y

The bank should provide life time valid ATM card to all its customers. Minimum balance for savings account should be reduced from Rs 5000 to Rs 1000, so that people who are not financially strong enough can maintain their account properly.

y y y

The company should provide a pass book to all its customers Make people understand about the various benefits of its products. Company should organize the program in the society, so that people will be aware about the company and different products of the bank

y

Company should open more branches in different cities.

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PUNJAB NATIONAL BANK ORIGIN
Punjab national bank was 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.

PROFILE
With its presence virtually in all the important centers 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 World¶s leading blue chip companies. While among top 1000 world 46
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banks, ³The Banker´, the leading magazine in London, has placed PNB at the 248th position, the bank features at 1308th position among Forbe¶s Global 2000 list of global giants and fast growing companies. At the same time, the bank has 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 specialised 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-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: Kazakhistan, Shanghai: China and in London. Besides, Bank has opened a fully 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 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

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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. Besides, the card can be used to withdraw cash at more than 25000 ATMs, where the 'Maestro' logo is displayed, apart from the PNB's over 1094 ATMs and tie up arrangements with other Banks.

VISION AND MISSION VISION ³To evolve and position the Bank as a world class progressive cost effective and
customer friendly institution providing comprehensive financial and related services; integrating frontiers of technology and serving various segments of society especially the weaker section; committed to excellence in serving the public and also excellence in serving the public and also excelling in corporate values.´

MISSION ³To provide excellent professional services and improve its position as a leader in the
field of financial and related services; build and maintain a team of motivated and committed workforce with high work ethos; use latest technology aimed at customer satisfaction and act as an effective catalyst for socio-economic development´

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AWARDS & ACHIEVEMENTS of PUNJAB NATIONAL BANK
"Best IT Team of the Year Award" One of India's "Most Innovative Companies". Best IT User in Banking & Financial by NASSCOM in partnership with Economic Services Industry - 2004 Golden Peacock Award Times for Excellence in Corporate Governance - 2005 by Institute of Directors National Award for Excellence in SSI Ranked 2nd for 4 consecutive years - 2002, Lending Money Outlook Award ± 2004 2003, 2004 & 2005 Runner up in 'Best Bank (public Sector) of the year Award' -2005

THE DIRECORS OF PUNJAB NATIONAL BANK BOARD FO DIRECTORS
Dr K.C. Chakrabarthy Shri K.Raghuraman Shri .J.M.Gerg Chairman & Managing Director Executive Director Exective Director

DIRECTOR
Shri .Ravneet Kaur Shri .L.M.Fonseca Shri .S.R.Khurana Shri P.K.Nayar Shri.Mohan Lal Dr.Harsh Mahajan Shri.Prakash Agrawal Shri Gautam P.Khandelwal Shri Mushtaq A Antulay Govt. of India Nominee Director Reserve bank of India Nominee Director Director Rep.C.A.catagory Officer Employee Director Workmen Employee director Share holder Director Shareholder Director Part-time non-official Director Part-time non-official Director

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PNB`S KEY COMMITMENTS
We promise to: 1) Act fairly and reasonably in all our dealings with you by: ‡ meeting the commitments and standards in this Code, for the products and services we offer, and in the procedures and practices our staff follow ‡ making sure our products and services meet relevant laws and regulations ‡ our dealings with you will rest on ethical principles of integrity and transparency. 2) Help you to understand how our financial products and services work by: ‡ giving you information about them in plain Hindi and/or English and/or the local language ‡ explaining their financial implications and ‡ helping you chooses the one that meets your needs. 3) Deal quickly and sympathetically with things that go wrong by: ‡ correcting mistakes quickly ‡ handling your complaints quickly ‡ telling you how to take your complaint forward if you are still not satisfied and ‡ reversing any bank charges that we apply due to our mistake. 4) Publicise this Code, put it on our website and have copies available for you on request.

SWOT ANALYSIS STRENGTHS: 
Strong growth in business  Good branch network  Highest CASA among PSU  Highest NIMs compared to peers  Fine growth in fee income last year  De-risked investment portfolio  Adequate Capital 50
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Proactive on technology front.

WEAKNESS: 
Higher Delinquencies  Higher provisions deterring growth in net profits  No development on insurance venture  Slower growth on international front  Slow-down in treasury profits  Its subsidiaries PNB Housing Finance & PNB Gilts are not impressive

OPPORTUNITIES: 
Expansion on international front  Ample opportunity to expand business, as the economy is doing well.  Growth in Insurance and Mutual Fund business

THREATS: 
Entry of foreign banks  Sharp rise in interest rates can hamper economic growth  Regulatory amendments  Implementation of Basel II requires higher capital  Downturn in Agriculture growth

PRODUCTS AND SERVICES:
PRODUCTS:  Personal banking  Corporate banking  Home loans  About loan  ATM/DEBIT cards  Deposit interest rates

SERVICES 
Locker facilities  Depository services  Senior citizen scheme 51
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RTGS/NEFT/SFMS:PNB  Merchant banking  Online tax accounting system  Electronic fund transfer  Electronic clearing service  Offshore banking  12 hours banking

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QUESTIONNAIRE

Dear Sir/Madam,

I am a student of Indian Institute of Management, Ghaziabad. As part of the requirements for my Post Graduation Diploma in Business Management I am required to do a research based project. Kindly spend a few minutes of your valuable time and fill in this questionnaire.

1. Your Age: ____________________

2. Education Qualification    Undergraduate Graduate Post graduate

3. Marital Status.   Married Single

No. of Children: __________

4. Occupation.    Business Profession Service

(Please mention below the type of business/profession you are in incase of service please mention your organization name and designation)

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5. Your annual household income.     <than 2 lack Between 2 to 5 lack Between 5 to 8 lack >than 8 lack

6. Faced saving problems?   Yes No

7. Do you have Credit Card?   Yes No

If yes, which Bank?

8. Kind of services Banks you are enjoying 9. Do you have loans requirement?   Yes No

10. From where do you like to save money? 



Private bank Nationalise banks

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11. Which Banks facility you like more?   Private bank Nationalise banks

And why?

12. While saving in a Bank, what is your priority?

13. Is Central Banking System beneficial for you?   Yes No

14. Does you use Internet Banking?   Yes No

And how it will help you?

Date: Signature Place:Thank You

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