Submitted to PROTON business school In Partial fulfillment of the requirements for the award of degree of MASTER OF BUSINESS ADMINISTRATION (M.B.A.) (2009-2011)


India is a developing country and we all know that banking sector plays a very important role. In development with the increasing use of banking and finance in every field, new trends in their technology and modern use are being evolved day to day to meet the requirements. Infact “BANKING” has become the need of today. The purpose of PROJECT REPORT is to expose the students in the market and in the field of banking, finance and investments and to develop the ability in the students to deal with all types of customers. Preparing project report in the summer vacations and under going the summer training is the indispensable part of the college period. It provides the opportunity to review what we have gained in the training period and also provides the way to convey the knowledge and ideas to others. The present project provides the information on the “PUNJAB & SIND BANK”. Learning is not possible in solitude and has to have the support and able guidance of some people around us in various roles and capacities. The satisfaction and euphoria that accompanies the successful completion of any task would be incomplete without the mention of the people who made it possible because success is the epitome of hard work, undeterred missionary zeal, fast determination, and consideration. Therefore, we consider it a pleasant duty to express our heartiest appreciation, gratitude, and indebtedness to our project guide Mr. Nitish Dipankar for his keen interest, sincere extortion, invaluable and pain taking excellent guidance, continuous calm endurance, inspiration and encouragement during each phase of the present project.



• • • • • •

To acknowledge all the persons who had helped for the fulfillment of the project is not possible for any researcher but in spite of all that it becomes the foremost responsibility of the researcher and also the part of research ethics to acknowledge those who had played a great role for the completion of the project. So in the same sequence at very first, I would like to acknowledge my parents because of whom I got the existence in the world for the inception and the conception of this project. Later on I would like to confer the flower of

acknowledgement to Mr. Vinay Goel and other faculty members who taught me that how to do project through appropriate tools and techniques. Rest all those people who helped me are not only matter of acknowledgment but also authorized for sharing my success.


I Rinku Kumari do here by declare that the project report on study conducted on “Financial Institutions ” in PUNJAB & SIND BANK, submitted by me in the partial fulfillment of M.B.A. (Master of Business Administration), PROTON business school ,Indore(M.P) What ever Data has been disclosed in the report are authentic to the best of my knowledge. I have not submitted this training report to any other university ever before.


As a matter of Knowing how things look like in practical sense every M.B.A. student has to undergo training in an approved business organization for the tenure of not less than six weeks. I got a chance to seek more and more knowledge under the guidance of professional managers. On the completion of M.B.A. Degree students have hand on experience that will help for facing challenging jobs under such competitive environment. I have completed my project successfully in “The study of working capital analysis” under the guidance of S. Tarlok Singh (Asst. Manager Finance). During the above course tenure Mr. Amarjeet Singh (Cash Manager) helped me for getting knowledge concerning with taxation and specially I would like to thank Mr. R.k. Sharma for allowing me to work in Bank.

The main idea of the project is to carry out a research for the working captal management of Punjab & Sind Bank . The bank attained market leadership in Premium salary accounts and second largest seller of regular salary account in a record time.The situation is similar now. Will the company be able to repeat the same performance for all the category of this product? It has developed its products with better service, new and best management information system. The project aims to find out the response of the corporate through a research process. The project was done in various phases: • The first phase comprises gathering information related to the product and population,

In the second phase a survey is to be conducted on corporate customers of Gurdaspur region through direct questionnaire.

• The findings and representation of the research is done in the third phase

• And in the last phase all the findings and analysis along with conclusions and recommendation has been submitted in report format for further use. It was also necessary to do a competitor analysis as well to know the strength and weakness of the various competitors as the segment has a lot of players and more global players will join the competition soon. Various marketing tools have been used to analyze the current situation of Punjab& Sind Bank’s salary account segment and find out its position among the competitors in order to form a strategy for the Punjab & Sind Bank in salary account segment.

Changes in Banking Sector
The face of banking is changing rapidly. Competition is going to be tough and with financial liberalisation under the WTO, banks in India will have to benchmark themselves against the best in the world. For a strong and resilient banking and financial system, therefore, banks need to go beyond peripheral issues and tackle significant issues like improvements in profitability, efficiency and technology, while achieving economies of scale through consolidation and exploring available cost-effective solutions. These are some of the issues that need to be addressed if banks are to succeed, not just survive, in the changing milieu.

Challenges Ahead
(i) Improving profitability: The most direct result of the above
changes is increasing competition and narrowing of spreads and its impact on the profitability of banks. The challenge for banks is how to manage with thinning margins while at the same time working to improve productivity which remains low in relation to global standards. This is particularly important because with dilution in banks’ equity, analysts and shareholders now closely track their performance. This will require tremendous efforts in the area of technology and for banks to build capabilities to handle much bigger volumes.

(ii) Reinforcing technology: Technology has thus become a
strategic and integral part of banking, driving banks to acquire and

implement world class systems that enable them to provide products and services in large volumes at a competitive cost with better risk management practices. The pressure to undertake extensive computerizations is very real as banks that adopt the latest in technology have an edge over others. Customers have become very demanding and banks have to deliver customized products through multiple channels, allowing customers access to the bank round the clock.

(iii) Risk management: The deregulated environment brings in its
wake risks along with profitable opportunities, and technology plays a crucial role in managing these risks. In addition to being exposed to credit risk, market risk and operational risk, the business of banks would be susceptible to country risk, which will be heightened as controls on the movement of capital is eased. In this context, banks are upgrading their credit assessment and risk management skills and retraining staff, developing a cadre of specialists and introducing technology driven management information systems.

(iv) Sharpening skills:

The far-reaching changes in the banking

and financial sector entail a fundamental shift in the set of skills required in banking. To meet increased competition and manage risks, the demand for specialized banking functions, using IT as a competitive tool is set to go up. Special skills in retail banking, treasury, risk management, foreign exchange, development banking, etc., will need to be carefully nurtured and built.

Thus, the twin pillars of the banking sector i.e. human resources and IT will have to be strengthened.

(v) Greater customer orientation:

In today’s competitive

environment, banks will have to strive to attract and retain customers by introducing innovative products, enhancing the quality of customer service and marketing a variety of products through diverse channels targeted at specific customer groups.

(vi) Corporate governance:

Besides using their strengths and

strategic initiatives for creating shareholder value, banks have to be conscious of their responsibilities towards corporate governance. Following financial liberalisation, as the ownership of banks gets broadbased, the importance of institutional and individual shareholders will increase. In such a scenario, banks will need to put in place a code for corporate governance for benefiting all stakeholders of a corporate entity.

(vii) International standards:

Introducing internationally

followed best practices and observing universally acceptable standards and codes is necessary for strengthening the domestic financial architecture. This includes best practices in the area of corporate governance along with full transparency in disclosures. In today’s globalised world,focusing on the observance of standards will help smooth integration with world financial markets.

Technology in Banking Sector

Technology is having a major impact on the banking industry. For example, many routine bank services that once required a teller, such as making a withdrawal or deposit, are now available through ATMs that allow people to access their accounts 24 hours a day. Also, direct deposit allows companies and governments to electronically transfer payments into various accounts. Further, debit cards, which may also used as ATM cards, instantaneously deduct money from an account when the card is swiped across a machine at a store’s cash register. Electronic banking by phone or Computer allows customers to pay bills and transfer money from one account to another. Through these channels, bank customers can also access information such as account balances and statement history. Some banks have begun offering online account aggregation, which makes available in one place detailed and up-to date information on a customer’s accounts held at various institutions. Advancements in technology have also led to improvements in the ways in which banks process information. Use of check imaging, which allows banks to store photographed checks on the computer , is one such example that has been implemented by some banks. Other types of technology have greatly impacted the lending side of banking. For example, the availability and growing use of credit scoring software allows loans to be approved in minutes, rather than days, making lending departments more efficient. Other fundamental changes are occurring in the industry as banks diversify their services to become more competitive. Many banks now offer their customers financial planning and asset management services, as well as brokerage and insurance services, often through a subsidiary or third party. Others are beginning to provide investment banking services that help companies and governments raise money through the issuance of stocks and bonds, also usually through a subsidiary. As banks respond to deregulation

and as competition in this sector grows, the nature of the banking industry will continue to undergo significant change.

Profile:The Bank was founded in 1908 at Amritsar by eminent persons like Bhai Saheb Veer Singh, Sunder Singh Majithia and S.Tarlochan Singh.At the time of partition, all excepts Ludhiana and Amritsar branches were in Pakistan. 2000 - The Bank has launched its bullion trading scheme on persistent demand from North Indian traders, especailly in view of the Diwali festival season. - The Bank has been appointed as arranger and collecting banker for State Bank of India's India Millennium Deposit scheme slated to open on October 21 2001 - NS Gujaral has been appointed as the chairman and managing director of the Delhi-based Punjab & Sind Bank. 2003 -The bank has launched a special festival loan scheme for meeting the expenditure for items such as purchase of consumer goods or furnishing of house or shops 2004 -Mr. V K Chopra, CMD, Small Industries Development Bank of India, appointed as CMD of Punjab & Sind Bank -P&SB appoints new chairman R S Gujral

-Punjab and Sind Bank (PSB) and ICICI Bank on July 02 announced the launch of co-branded credit card that will be available in three variants Gold, Silver and Blue credit card -Punjab and Sind Bank ties up with Aviva Life Punjab & Sind Bank, established in 1908, is headquartered at New Delhi. Having more than 800 branches across the country, the bank has around 10,000 employees dedicated to the banking services and customer care. The bank offers usual banking services along with innovative banking methods including Internet and phone banking, international banking, merchant banking, hire, purchase, leasing and credit cards.

The bank was founded by luminaries like Bhai Vir Singh, Sir Sunder Singh Majitha and Sardar Tarlochan Singh in the holy city of Amritsar on the principle of social commitment to help the weaker section of the society in their economic endeavours to raise their standard of life.

Achievements and Activities
Punjab & Sind Bank is the first bank in Northern India to obtain ISO 9002 certification for its selected branches. Its Housing Finance Branch caters to the credit need of the house aspirants. The bank has entered into agreements for Non Life insurance business with M/s Bajaj Allianz General Insurance Company and Life Insurance business arrangements with M/s Aviva Life

Insurance Company India Pvt. Ltd. Its customers can now avail insurance related services under one roof.

Punjab & Sind Bank was nationalized in 1980 along with six other banks by the Government of India.

Products & Services
Deposits Savings Account Recurring Deposit Fixed Deposits Current Accounts Priority Sector Loans Housing Loan Home Enhancement Loans Personal Loan Education Loan Car Loans Business Loans NRI Services Punjab & Sind Bank-ICICI Bank Credit Card Gold Card Schemes RBI Citizens' Charter including cash and deposits Locker Facilities RTGS NEFT PSB e-funds Transfer Tax Payment E-bill Payments PSB- Aviva Allianz Insurance


Other Services

To put in place the effective Risk Management and Internal Control

Systems. To adopt and operationalise high-level technology standards. To strive to achieve excellence in Customer Service. To achieve the highest standards of transparency and accountability in the conduct of banking business. To adopt professional approach in effectively managing financial as well as non-financial risks. To maximize profitability and profits of the Bank with due compliance of prudential guidelines. To maximize competitive risk adjusted return on capital, through planned reduction in the average cost of funds, increased yield on advances and investments besides reduction in cost of operations. The bank has collaborated with the leading credit card player in the country to offer the privileges of state of art technology to its cardholders with all the features to compete well in the card industry. Our Bank has been making efforts to provide value added products & Services to our esteemed clients. It is our quest to provide the very best to our esteemed Customers. The launch of new Co-branded Credit card with ICICI Bank is a step towards this mission.

We envision to emerge as a strong vibrant Bank through synchronization of the human, financial and technological resources.

The bank also offers a wide range of general banking services to its

customers including debit cards, cash management, remittance services and collection services. Investment Rationale • PSB to establish its pan India presence by opening new branches throughout the country to increase its customer base and business. Expanding of branch network is expected to help the bank to improve CASA ratio going forward. • PSB plans to open specialised industrial finance branches and aims at expanding its credit portfolio, by growing its corporate & retail loan segment. • PSB has been able to reduce its net NPA ratio significantly from 8.11% (which was highest amongst the public sector banks) in FY05 to 0.36% in FY10. Going ahead bank is likely to maintain NPA ratios around this level. • PSB will continue developing its technological capabilities to enhance its value offering to customers while optimizing its costs. From a total of 17 branches on the CBS platform, PSB seeks to bring around 500 branches on the CBS platform by Nov 2012 enabling it to have incremental CASA growth and profitability in future. • PSB has maintained capital adequacy ratio (CAR) at 13.04% with the tier-I capital at 7.9% and the tier-II capital at 5.1% as on September 2010. The bank plans to meet its future capital adequacy requirement through this issue .

• A major part of their branch network is concentrated in North India and thereby exposing them to regional risks. • PSB’s exposure to the real estate segment has witnessed substantial increase in the last 3 fiscal years. Any significant downturn in the real estate sector may lead to an increase in nonperforming loans.


In terms of valuation, the stock is offered at 0.9x and 0.8x book value (post issue) at upper and lower band, respectively. Its peer group valuation is in the range of 0.8-1-4x. The bank’s growth plans to expand its business, products & services to benefit bank in long term. Also, the strong Indian economic growth is likely to benefit the overall banking industry which would inturn benefit the Punjab & Sind bank.


Punjab & Sind Bank IPO
he initial public offering (IPO) of State-owned Punjab & Sind Bank will be opening for subscription from December 13, reports CNBC-TV18. The bank will offer 4 crore equity shares through IPO. The issue comprises a net issue to the public of 3.8 crore equity shares and a reservation of 20 lakh equity shares for subscription by eligible employees. The issue shall constitute 17.93% of the post-issue share capital of the bank. Its subscription will close on December 15 for qualified institutional investors (QIB) and on December 16 for other investors. The objective of the issue is to augment capital base to meet the future capital requirements arising out of the growth in assets due to the growth of the Indian economy. President of India, acting through the Ministry of Finance, Government of India, holds 100% stake in the bank, which will be reduced to 82.07% post issue. SBI Capital Markets Limited, Enam Securities Pvt Ltd and ICICI Securities Limited are the book running lead managers to the issue


Exports play a crucial role in a developing economy like India which attaches considerable importance to export promotion. With a view to further simplify access of Bank credit to exporters especially small and medium exporters and make it borrower friendly in terms of procedure and credit terms, the Minister of Commerce and Industry had proposed issuance of a Gold Card to Credit Worthy Exporters with good track record for easy availability of export credit on best terms. Accordingly, a Gold Card Scheme has been worked out by RBI in consultation with select banks and exporters. The scheme envisages certain additional benefits based on the record of performance of exporters. The Gold Card holders would enjoy simpler and more efficient credit delivery mechanism in recognition of his good track record. The Gold Card Scheme has been introduced in our Bank, the details of which are as under: 1. The card offered by the bank will be known as "PSB EXPO GOLD CARD SCHEME Fixation of Credit Limits : 1. Application for credit will be processed faster than other exporters. The time frame fixed for disposal of applications received for sanction of credit under the scheme is as follows:For disposal of fresh applications 25 days Renewal of limits 15 days Sanction of adhoc limits 07 days 2. Bank is already following a liberal approach in respect of export finance. Bank will allow 'In-principle' sanction of limits for three years with a provision for automatic renewal subject to fulfillment of terms and conditions of sanction. Sanctioning Authority will also introduce a clause in the terms & conditions of sanction that party will be submitting all the financial papers and other information required by the bank for the renewal and reviewal of account periodically. 3. PCFC requirements of the PSB Expo Gold Card holders will be met by giving them priority. Their FCDL requirements will also be given priority over non-export borrowers subject to availability of funds.

4. Export credit in foreign currency will be provided on priority basis at LIBOR + 0.75% p.a. subject to availability of funds. In case sufficient dollars are not available with the bank to lend to the exporter at a particular time, service charges at flat rate of 0.1% will be charged by the bank on the inter-bank foreign currency borrowings for the purpose, subject to availability of funds. 5. Bank will consider granting Term Loan in Foreign Currency in deserving cases out of their FCNR(B), RFC, etc. funds subject to availability of funds. 6. Sufficient powers have already been vested with the field functionaries for sanction of adhoc limits to meet urgent credit requirements of exporters. Urgent credit requirements of PSB Expo Gold Card holders will be met on priority basis. In the case of exporters of seasonal commodities, the peak and off-peak levels will be appropriately specified. 7. With a view to capture only those particulars which are relevant for sanctioning export credit, the Loan Application Form for export credit for Gold Card Holder devised by Indian Banks Association has been adopted. 8. In case of unanticipated export orders, norms for inventory may be relaxed, taking into account the size and nature of export order. 9. Since the bonafides of the Gold Card holder is already established based on credit worthiness and track record, the same will be given due consideration by the sanctioning authority in respect of security and collaterals while granting export credit under the PSB Expo Gold Card scheme.

Rate of Interest :

1. Rate of interest charged on Rupee Export Credit to the Gold Card Holders will be lower than the normal rate of interest charged by the bank as under:-

lower by 0.5% than the normal rate of interest charged by the bank lower by 0.25% than the normal For exporters having credit rating 3 & 4 rate of interest charged by the bank For exporters having credit rating 1 & 2

2. In respect of PSB Expo Gold Card holders, the concessive rate of interest on post-shipment rupee export credit applicable upto 90 days will be extended for a maximum period of 365 days. Service Charges : 1. All PSB Expo Gold Card holders will be offered discount of 15% in service charges and fee structure for various services/ transactions subject to compliance of FEDAI guidelines. 2. PSB Expo Gold Card holders, in view of their credit worthiness will be considered for exemption from ECGC policy at the discretion of the bank. Tenure : 1. The Gold Card will be issued for a period of 3 years and will be automatically renewed for a further period of 3 years, unless there are adverse features/irregularities in the account. In case of any misuse of the card or observance of any violation of the terms & conditions, the bank will have the right to recall the card any time. 2. The exporter's record of performance will be reviewed periodically with a view to pass on the benefit of better terms and conditions including rate of interest for better performance. The following additional facilities/benefits will be allowed to the holders of PSB Expo Gold Card :-

i. Waiving of Annual Fee for the first year on the Credit Card and 50% discount for second year onwards subject to satisfactory utilisation of Credit Card. ii. Better exchange rates & exchange rates on daily basis will be provided by the branches through E-Mail wherever feasible. iii.Customer Education Programme will be conducted by the bank for them in which International developments and latest RBI guidelines will be discussed. iv. Problems of the Gold Card Holders will be discussed and immediate remedial measures will be taken." Till the Gold Card is finalised, Zonal Managers may issue letters to the exporters considered eligible by them under 'PSB Expo Gold Card' Scheme. They may submit their requirement of 'PSB Expo Gold Card' and Loan Application Form for 'PSB Expo Gold Card' holders to H.O. Stationery Deptt. and obtain the same from them. Zonal Managers are advised to take keen interest in the scheme in order to popularise the same and implement in true spirit. Banners be also displayed at the concerned Branches. One of the criteria of Eligibility for PSB Expo Gold Card was that exporters enjoying export credit limits (excluding FOBLC) of Rs.1 crores & above and annual export sales routed through our bank not less than Rs.5 crores during the preceding one calendar year/financial year will be eligible for PSB Expo Gold Card. With a view to extend the scheme to all credit worthy exporters including those in Small and Medium Enterprises segment and to simplify credit access, it has been decided to waive the condition of export credit limits and turnover stipulated earlier.

About the Card:
The "PUNJAB & SIND BANK-ICICI BANK Credit Card" comes in three variants : Blue, Silver and Gold card. The eligibility criteria in terms of Annual Income of the applicant is as follows: Eligibility Salaried Blue Card Silver Card Rs.60000/-p.a Rs.60000/Gold Card Rs.120000/-p.a Rs.100000/-p.a

p.a Self Employed Rs.50000/-p.a Rs.50000/p.a

Business Focus
Punjab & Sind 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. P & S Bank's business philosophy is based on four core values - Operational Excellence, Customer Focus, Product Leadership and People.

CAPITAL STRUCTURE: The authorized capital of Punjab & Sind Bank is Rs.1.83 Billion.
 The paid-up capital is Rs.1.6 billion.  The HDFC Group holds 14.00% of the bank's equity and about

13.50% of the equity is held by the ADS .
 Net profit Rs. 437.18 Cr (Up by 14.34%).

 Operating Profit Rs. 727.71 Cr. (up by 34.10%)  The shares are listed on the The Stock Exchange, Mumbai and the National Stock Exchange.  Business per employee Rs. 6.56 Cr  Return on Assets 1.26 %  Capital Adequacy Ratio 11.88 %
 Gross NPAs 161.04 Cr

Distribution Network:Punjab & Sind Bank is headquartered in New delhi. The Bank at present has an enviable network of over 813 branches and 76 extension counters spread over India and 400 in Punjab. 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 centres 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 Bank has branches in the centres where the NSE/BSE have a strong and active member base. As a part of International banking it offers NRI services, swift branches, IBDs and gold card scheme. The bank has launched the facility of online request for education loan to make it easier for the customers. It has tied up with ICICI bank for a co-branded credit card. It also has tie-up with Aviva Life Insurance Company and Bajaj Allianz General Insurance Company. It has attained ISO 9002 certification for its selected branches.

Management:Mr. V K Chopra took over as the bank's Chairman. Prior to this, Mr. Kapoor was a Deputy Governor of the Reserve Bank of India.The Managing Director, Mr V K Chopra has been a professional banker for over 25 years and before joining Punjab & Sind Bank in 1994 was heading Citibank's operations in Malaysia. The Bank's Board of Directors is composed of eminent individuals with a wealth of experience in public policy, administration, industry and commercial banking. Senior banking professionals with substantial experience in India and abroad head various businesses and functions and report to the Managing Director. Given the professional expertise of the management team and the overall focus on recruiting and retaining the best talent in the industry, the bank believes that its people are a significant competitive strength.

Corporate Governance Rating :The bank was one of the first four companies, which subjected itself to a Corporate Governance and Value Creation (GVC) rating by the rating agency, The Credit Rating Information Services of India Limited (CRISIL). The rating provides an independent assessment of an entity's current performance and an expectation on its "balanced value creation and corporate governance practices" in future. The bank has been assigned a 'CRISIL GVC Level 1' rating which indicates that the bank's capability with respect to wealth creation for all its stakeholders while adopting sound corporate governance practices is the highest.

Investment Rationale
Wide Distribution Network and diversification of products & services PSB has a pan India presence through 926 branches and 63 ATMs as on October 31, 2010. It has a large presence in northern India with 623 branches, which is believed to be rich in resources and offer great opportunity for resource mobilization. Out of these 920 branches it has 49 specialised branches including specialised agriculture branches, personal banking branches and MSME branches. PSB plans to expand its branch network which would result in increasing the customer base, CASA ratio and business. It intends to focus on the technology including the rollout of the core banking system and the launch of customer-centric and multichannel solutions like internet banking, telephone banking and mobile banking, to support its network of branches. Thus, PSB within the periphery of banking business is venturing and offering newer products and services which would augment growth and aid in client acquisition. • Strong asset quality & financial growth PSB has been able to increase its business operations significantly, while improving its asset quality. In fiscal 2005, PSB had net NPA ratio of 8.11% (highest amongst the public sector banks) has been reduced to 0.36% in FY10 (group average of the public

sector banks at 0.91%). Also the bank is likely to maintain NPA ratios around this level. The bank has registered a CAGR of 21.1% in net total income, 35.6% in operating income and 15.1% in net profit over the period 2006-2010. During the last five fiscals, it has been able to achieve a CAGR of 36.24% in its net advances in spite of a reduction in net NPA ratio. Also, it has registered strong RoA for fiscal 2010 at 1.06% and NIMs for fiscal 2010 was at 2.67%. • Comfortable capital adequacy ratio , The bank’s capital adequacy ratio (CAR) as on September 2010 stood at 13.04% with the tierI capital at 7.98% and the tier-II capital at 5.06%. The bank plans to meet its future capital adequacy requirement through this issue. During FY08 the equity capital of the bank was restructured by converting an amount of INR 1.6 Bn into ‘Innovative Perpetual Debt Instrument (IPDI), INR 2 Bn into Perpetual Non-cumulative Preference Shares (PNCPS) and INR 2 Bn into Perpetual Cumulative Preference Shares (PCPS), while retaining INR 1.83 Bn as the equity capital. The primary purpose of capital restructuring was to enable the bank to raise fresh equity capital from the market. • Accelerate growth in loans and advances to the retail and corporate sectors Advances growth has been robust over the years & in FY10 PSB recorded 32.6% to INR 326.39 Bn growth YoY. PSB proposes to strengthen its relationship with large corporate and public sector organizations by increasing funding to infrastructure sector. In order to expand corporate banking services, it has recently forayed into syndication of loans. PSB aims at expanding its credit portfolio by growing its corporate & retail loan segment. PSB also plans to open specialised industrial finance branches to focus on project appraisal, to maintain and enhance its franchise in the MSME.Continue to develop our technological capabilities PSB will continue developing its technological capabilities to enhance its value offering to customers while optimizing its costs. From a total of 17 branches on the CBS platform, PSB seeks to bring around 500 branches on the CBS platform by Nov 2012. This would enable PSB to have incremental CASA growth in future. The key objectives behind it is to build a cost-efficient distribution network to accelerate the development of its retail and rural franchise, enhancing cross selling & client segmenting capability by using analytical tools & efficient data storage & retrieval systems, improving credit risk and market risk Management.

Profit & Loss Statement INR mn
Y/E March
Interest Income Interest Expenses Net Interest Income Other Income Operating Income Operating Expenses Operating Profit Provisions and Contingencies Profit Before Tax Provision for Tax Profit After Tax

32472 22353 10119 3835 13954 6673 7281 829 6452 2108 4344

39342 27502 11839 3921 15761 7081 8680 2118 6562 1565 5011

23066 15260 7806 2163 9969 4844 5126 1129 3997 1233 276

Balance Sheet INR mn
Y/E March
Sources of Funds Equity Capital Reserves & Surplus Net Worth Deposits Borrowings Other Liabilities Total Liabilities Application of Funds Cash & Balance with RBI Bal. with Banks/ Short Notice Advances Investments Fixed Assets Other Assets Total Assets 19571 8834 246154 126274 509 6445 407786 37883 9671 326391 178868 527 7656 560996 41739 3129 357148 172208 563 8644 583430 3831 12341 16172 346757 36065 8793 407786 3831 17235 21066 491551 37011 11369 560996 3831 19990 23821 529451 20073 10086 583430




CORPORATE GOVERNANCE:Punjab & sind Bank's Corporate Governance Policy has been adopted

keeping in mind the importance of attaining fairness for all stakeholders, as well as achieving organizational efficiency. Punjab & Sind Bank recognizes the importance of good corporate governance, which is generally accepted as a key factor in attaining fairness for all stakeholders and achieving organizational efficiency. This Corporate Governance Policy, therefore, is established to provide a direction and framework for managing and monitoring the bank in accordance with the principles of good corporate governance.

In Punjab & Sind Bank, work process for corporate salary accounts is divided in 4 stages. • MAPPING • PROFILING • DOCUMENTATION • CLOSING

In the first stage of this process which is MAPPING, we have to do MAPPING and in this we have to collect data of our prospect customers. It was like cold calling. We went to various area of the city to find our target company. In this process we have to collect following information about the company or prospect customer. • Name of the company. • Complete address of the company. • Name of the concerned person who looks after payroll of the company.

His designation.

• His contact number or visiting card. • Existing bank with which they are banking. • Total number of employees on the payroll of the company.

After this we have to report to the corporate sales manager to show him data and after that we have to make a call to the concerned person to take an appointment. And once appointment is fixed, we have to go with senior sales officer or with corporate sales manager on the call. Second step in this was profiling. In this we have to get some of information from the corporate at the time of meeting. And according to

that we can offer him the best deal because before each and every offer, criteria has been made by the bank and in which criteria that company is coming we have to decide and according to that we use to offer them best deal. In this we used to ask questions which are as follows… • Number of employees on the payroll of the company. • Last month net salary disbursement of the company (to decide criteria in which they are coming) • Nature of business. • Name and numType of the company, where it is public limited, private limited, solo ownership etc • Name of the concerned person, who looks after payroll of the company. • Number of branches. Third process starts when deal has been closed or finalized. Than we could start documentation process as per the banking requirements. Which included following documents of the company… • Memorandum of association. • Partnership deed. • Directors photo ID proof. (PAN card/ passport/ driving license/ voter ID)

• Employees detail. • Current account detail. • And in the fourth stage which is closing, we have to start opening salary accounts of each and every employees to disburse salary in their accounts. For that matter sales officers use to go to the employees of the company and get form fill and collect required documentsof the directors.

A strategy can be described as a collection of activities that will enable the organization to reach its objective. A cost reduction strategy may involve staff redundancies and the development of more efficient supply chains as well. Marketing strategy is a cyclical process consisting of four main phases.


Measurem ent


Implementatio n

Successful business relies on informed decision making. Managers with access to information on the market, competitors and their own business will

be better placed to set goals and devise strategies, than those who are less well informed.

After analyzing the business intelligence to identify the most important internal and external factors affecting the organization, managers can begin to formulate appropriate strategies for meeting their goals. Throughout the planning process, managers should constantly consult with other heads of department and with employees further down the line who will be responsible for implementing the strategy activities.

Strategy implementation involves the delivery of a number of inter-related activities to an agreed standard and schedule. This is often referred to as project management. Implementation is the most important of all the processes as it ensures that the planning is not just in papers and has been used to obtain results.

Once implementation of the strategy is complete, it is important to assess the degree to which it enabled the objective to be achieved. Without proper measurement it will be difficult to accurately understand what worked and

what improvements might be needed for future strategies. After measurement, if it is found that the planning has not been effective to achieve the desired goal the research process is carried out again to find out anomalies of the planning and forming new strategies. This completes the strategy cycle.

Following are the banks which are taken into Consideration For Analysis:PUBLIC SECTOR BANKS PRIVATE SECTOR BANKS FOREIGN BANKS



1. 2. 3. ARD










16. 17.






Finance department plays a major role in the working of any organization as for all-purpose, money is required, which is arranged, procured and disbursed as the finance department. They only make budget go for cost control and maintain to optimum balance of cash for smooth operations. As such the finance department in Punjab & Sind Bank is looking after only some of the aspects insurance aspects of the unit.

Hierarchy of the finance department:
It is a line organization having a full-fledged department to manage the finance budget, costing and other matter of this department. The Punjab & Sind Bank has to manage two departments mainly i.e. works and Finance

Manager Finance Assistant Manager Senior Officer (Cost) Senior Officer (Assets) Clerks Fixed Asset Cost Employee salary Transportation Senior Officer (Cash)


Account Section
The accounts section deals all the general accounting, employee payroll, billing and matter related to taxation etc. The department activities are coordinate by Assistant Manager-Accounts that report to Manager-Finance

Cost Section
The Cost Section does Accounting relating to preparation of Monthly Cost Data and Bill Provisioning.Assistant Manager-Cost coordinates the departmental activities and reports to Manager-Finance.

Accounting Procedure
The accounting procedure of Punjab & Sind Bank is not a new complicated one. They follow a standardized rule of making entries in there declared free. books of accounts or posting or making their trial balance, Punjab & Sind Bank make its Trial Balance in the monthly basis

transaction and rent it to the Head Office. Head Office prepares final accounts for all units not individual unit.

Punjab & Sind Bank follows the following procedure
Step1: The quotations are called for acquiring or procuring the particular assets, liabilities etc. Step2: After then estimate decide/fixed through CESS. (CAPITAL EXPENDITURE SECTION SCHEME) Step3: After then allocation of budget for different requirements. Step4: Then order replace, R.M/Assets be procured, inspected by the concerned department. Step5: Then GR No. After quality check etc. is sent to finance department where the cashier makes the payment. Step6: The ledger department debits this in the books. Step7: Finally at the wish of finance department assets is charged.

Finance Manager is totally responsible for all activities to payment/receipts of cash and fund Management of the unit. His decision on payment will be final as personal manual, account manual directives laid by the organization. Under Finance Manager the financial activities is disciplined in the manner as per smooth functionary of all activities of payment such as salary and wages, payment to sundry creditors which include all pretty payments to local contractors, reputations, workers and officers of all grade in working unit. In detail it can be said that under finance manager their will be payment of salary and wages, allocation of various financial activities such as disbursement of cash by cashier, the payment like contractors bill, local bill, raw material bill, stores and spares payment of raw material and packing material, traveling bills, outstation allowances. All the various miscellaneous payments sanctioned are being made. The financial activities are on summation of inputs information system department (I.S.D.) provides various financial, copying outputs available on daily report, weakly report and monthly reports. It also provides information like cash payment, voucher, cash receipt voucher, and various types of bills also. Various type inventory output summary of transaction bills of output (local, contractor, raw material etc.) various type of finance ledgers of the month and monthly trial balance. Account staff to routs all payment in account department:To section the payment to staff, officer, mgt & to verify correction

 Payroll of employee.  Accounting of sales.  Financial accounts.  Supply bills.

Material Accounting.

The Cost Section is a branch of accounting and has been developed due to limitations of financial accounting. Financial accounting is primarily concerned with record keeping directed towards the preparation of profit and loss account and balance sheet. It provides information regarding the profit and loss that the business enterprise is making and also its financial position on a particular date. The information concerning the business enterprise is helpful to the management to control in a general way the major function of business viz., finance, administration, production and distribution but details regarding operating efficiency of these divisions are lacking. Infect, the development in the field of cost accounting is so quick and fields covered by it are expanding so much in magnitude that it becomes difficult for the management to lay down management policies, to guide the management decisions or evaluate

operating management performance with the information provided by financial accounting.



(Rs. In Crores)


2009 1491.63 245.29 33.76 75.33 10.95 64,37 _______

2010 1544.47 317.54 72.06 112.12 13.98 98.14 59.89

out short term ratios that will effect working capital of every company

FUND FLOW ANALYSIS :and application of funds.

Under the fund flow analysis it is

urgent to find out changing in working capital and its operation and sources

WORKING CAPITAL BUDGET :short term requirement for every company.

It helps in forecasting the

INTRODUCTION:Working capital refers to that part of firms capital which is required for financing short term or current Assets such as cash, debtors, marketable security and inventories. Thus funds invested in current assets keep revolving fast and are being constantly converted in cash and this cash flows out again in exchange for other current assets. It is also known as revolving or circulating capital or short term capital. Working capital may be regarded as the life blood of business. Working capital is of major importance to internal and external analysis because of its close relationship with the current day to day operations of a business. Every business needs funds for two purposes. * Long term funds are required to create production facilities through purchase of fixed assets such as plants, machineries, lands, buildings & etc * Short term funds are required for the purchase of raw materials, payment of wages, and other day-to-day expenses.

It is other wise known as revolving or circulating capit.l It is nothing but the difference between current assets and current liabilities. i.e. Working Capital = Current Asset – Current Liability. Businesses use capital for construction, renovation, furniture, software, equipment, or machinery. It is also commonly used to purchase inventory, or to make payroll. Capital is also used often by businesses to put a down payment down on a piece of commercial real estate. Working capital is essential for any business to succeed. It is becoming increasingly important to have access to more working capital when we need it.

Concept of working capital
 

Gross Working Capital = Total of Current Asset Net Working Capital = Excess of Current Asset over
Current Liability

Current Assets
Cash in hand / at bank Bills Receivable Sundry Debtors Short term loans Investors/ stock Temporary investment Prepaid expenses Accrued incomes

Current Liabilities
Bills payable Sundry Creditors Outstanding Expenses Accured expenses Bank Over draft

Working capital in terms of five components:
1. Cash and equivalents: - This most liquid form of working
capital requires constant supervision. A good cash budgeting and forecasting system provides answers to key questions such as: Is the cash level adequate to meet current expenses as they come due? What is the timing relationship between cash inflow and outflow? When will peak cash needs occur? When and how much bank borrowing will be needed to meet any cash shortfalls? When will repayment be expected and will the cash flow cover it?

2. Accounts receivable: -

Many businesses extend credit

their customers. If you do, is the amount of accounts receivable reasonable relative to sales? How rapidly are receivables being collected? Which customers are slow to pay and what should be done about them?

3. Inventory: - Inventory is often as much as 50 percent of a firm's
current assets, so naturally it requires continual scrutiny. Is the inventory level reasonable compared with sales and the nature of your business? What's the rate of inventory turnover compared with other companies in your type of business?

4. Accounts payable:- Financing by suppliers is common in
small business; it is one of the major sources of funds for entrepreneurs. Is the amount of money owed suppliers reasonable relative to what you purchase? What is your firm's payment policy doing to enhance or detract from your credit rating?

5. Accrued expenses and taxes payable: These are obligations of your company at any given time and represent a future outflow of cash.

Two different concepts of working capital are:Balance sheet or Traditional concept Operating cycle concept.

Balance sheet or Traditional concept:-

It shows

the position of the firm at certain point of time. It is calculated in the basis of balance sheet prepared at a specific date. In this method there are two type of working capital:-

• Gross working capital

Net working capital

Gross working capital:-

It refers to the firm’s investment in

current assets. The sum of the current assets is the working capital of the business. The sum of the current assets is a quantitative aspect of working capital. Which emphasizes more on quantity than its quality, but it fails to reveal the true financial position of the firm because every increase in current liabilities will decrease the gross working capital.

Net working capital:liabilities.

It is the difference between current assets

and current liabilities or the excess of total current assets over total current

Working capital= current assets – current liabilities.

Net working capital: - It is also can defined as that part of a
firm’s current assets which is financed with long term funds. It may be either positive or negative. When the current assets exceed the current liability, the working capital is positive and vice versa.

Operating cycle concept:- The duration or time required to
complete the sequence of events right from purchase of raw material for cash to the realization of sales in cash is called the operating cycle or working capital cycle.




















Factors requiring consideration while estimating working capital
• The average credit period expected to be allowed by suppliers. • Total costs incurred on material, wages.

The length of time for which raw material are to remain in stores before they are issued for production.

• The length of the production cycle (or) work in process. • The length of sales cycle during which finished goods are to be kept waiting for sales.
• •

The average period of credit allowed to customers. The amount of cash required to make advance payment.

Importance of Working Capital Ratios
Ratio analysis can be used by financial executives to check upon the efficiency with which workingcapital is being used in the enterprise. The following are the important ratios to measure the efficiency of working capital. The following, easily calculated, ratios are important measures of working capital utilization.

Stock turnover (in days)

Average Stock * 365/ Cost of Goods Sold

Result Interpretation
= x days On average, you turn over the value of your entire stock every x days. You may need to break this down into product groups for effective stock management. Obsolete stock, slow moving lines will extend overall stock turnover days. Faster production, fewer product lines, just in time ordering will reduce average days. = x days It takes you on average x days to collect monies due to you. If your official credit terms are 45 day and it takes you 65 days. One or more large or slow debts can drag out the average days. Effective debtor management will minimize the days. = x days On average, you pay your suppliers every x days. If you negotiate better credit terms this will increase. If you pay earlier, say, to get a discount this will decline. If you simply defer paying your suppliers (without agreement) this will also increase - but your reputation, the quality of service and any flexibility provided by your suppliers may suffer. = x times Current Assets are assets that you can readily turn in to cash or will do so within 12 months in the course of business. Current

Receivables Ratio (in days)

Debtors * 365/ Sales

Payables Ratio (in days)

Creditors * 365/ Cost of Sales (or Purchases)

Current Ratio

Total Current Assets Inventory)/ Total Current


Quick Ratio

Working Capital Ratio

(Total Current Assets Inventory)/ Total Current Liabilities (Inventory + Receivables Payables)/ Sales

Liabilities are amount you are due to pay within the coming 12 months. For example, 1.5 times means that you should be able to lay your hands on $1.50 for every $1.00 you owe. Less than 1 times e.g. 0.75 means that you could have liquidity problems and be under pressure to generate sufficient cash to meet oncoming demands. = x times Similar to the Current Ratio but takes account of the fact that it may take time to convert inventory into cash. As % Sales A high percentage means that working capital needs are high relative to your sales.

Statement showing change in working capital for Punjab & Sind Bank
(Rs .AS ON in crore) Particulars Current Assets Investments 2010 2009 Increase ( + ) Decrease (- ) 12627429 84726329 19550906 183433034 287710269 41547961 25759 62720448

0 Cash & Bank 19576665 Loan & advances 24615348 Total(A) 2 39200443 7 Current liabilities Reserves & surplus Provisions Total (B) (A-B) ↑ in working capital 17572855 18363147 35936002 35606843 5

13502573 10477571 23980144 263730125 92338310

4070282 7885576

92338310 104294168 104294168


35606843 5


Sources of Additional Working Capital
Sources of additional working capital include the following:
• • • • • • Existing cash reserves Profits (when you secure it as cash !) Payables (credit from suppliers) New equity or loans from shareholders Bank overdrafts or lines of credit Long-term loans

Inventory is total amount of goods and materials content in a store of factory at any given time. Inventory means stock of three things :1. Raw materials 2. Semi finished goods. 3. Finished goods.

Position of Income in Punjab & Sind Bank Limited (Rs..)
Particulars Commission,Exchange & Brokerage Profit on sale of investments Profit on sale of land,buildings & other assets Profit on exchange transaction TOTAL

31.03.10 588357 1189038 716

31.03.09 519047 175129 1402

399142 2177253

300117 995695


Debtors or an account receivable is an important component of working capital and fall under current assets. Debtors will arise only when credit sales are made.

Position of Sundry Debtors in Punjab & Sind Bank Particulars
Secured,considered Goods Unsecured,considere d Goods 8720557 10424870

1370557 7350000

6624870 3800000

In the table we see that there is continuous rise in the debtors of Punjab & Sind Bank in the successive years. A simple logic is that debtors increase only when sales increase and if sales increases it is good sign for growth. We can see 21% and 17% growth in 08-09 and 09-10 respectively from previous years. We can say that it is a good sign as well as negative also. Company policy of debtors is very good but a risk of bad debts is always present in high debtors. when sales is increasing with a great speed the profit also increases. If company decreases the Debtors they can use the money in many investment plans.


Cash is called the most liquid asset and vital current assets, it is an important component of working capital. In a narrow sense, cash includes notes, bank draft, cheque etc while in a broader sense it includes near cash assets such as marketable securities and time deposits with bank.

Position of Cash and Bank Balance in Punjab & Sind Bank
( Rs. AS on)

Cash Balance in Hand Bank BalanceWith Scheduled Banks







If we analyze the above table we find that it follows a decreasing trend. In the year 2010 it had maintained a huge amount of cash and bank balance

which has fallen hugely in the year 2009 but there is slight fall between the year 2009 and 2010. Although company’s cash is decreasing but this is very good sign for company because they are not holding the cash in hand but using the cash for better projects. The analysis shows that the fix deposits of company are rapidly fallen in last three years as 72% and 74% in 08-09 and 09-10 respectively from previous year. Company is utilizing the fixed cash for exploding the projects that is good for growth,

Loans and Advances here refers to any to amount given to different parties, company, employees for a specific period of time and in return they will be liable to make timely repayment of that amount in addition to interest on that loan.

Position of Other Loans & Advances in Punjab & Sind Bank
(Rs.AS on)

Bills Purchased &



discounted Cash 73199602 creditors,overdrafts & loans repayable on demand Term loans 164840370 Total 246153482


116407741 183433034

If we analyze the table we can see that it follows an increasing trend which is a good sign for the company. We can see that from the year 2009 to 2010 it increased more than double.We can see that the increase of 145% and 55% in 08-09 and 09-10 respectively from previous year. The increasing pattern shows that company is giving advances for the expansion of plants and machinery which is good sign for better production of cement and other goods. Although company’s cash is blocked but this is good that company is doing modernization of plants In time to compete with other competitors in market.

Current liabilities are any liabilities that are incurred by the firm on a short term basis or current liabilities that has to be paid by the firm with in one year.

Position of Other Current Liabilities in Punjab & Sind Bank



33605 624870 28100 686575

Current Liabilities Inter-office 680981 adjustment Interest accured 1370557 Deffered tax liability Total 582611 2634149

If we analyze the above table then we can see that it follow an uneven trend. The important component of current liabilities is sundry creditors and other liabilities. In 08-09 it decreased by 7% and in 09-10 it increased by 25%. In 08-09 it was increased because of growth in other liabilities by 32%.This is liability for company so this should be less. when company have minimum liabilities it creates a better goodwill in market. High current liabilities indicate that company is using credit facilities by creditors.

Position of Other Provisions in Punjab & sind Bank

Provision for Non Performing Advances Provision for Non Performing Investments Provision for Depreciation in the value of Investments Provision for Standard Asset Provision for Income Tax Provision for Deferred Tax Provision for Fringe Benefit Tax MAT Credit Entitlement Others

64.46 -1.63 -0.16 11.95 92.56 55.45 1.53 58.03 8.34

(Rs. in crore) 2008-2009
69.97 -4.48 3.30 30.87 121.10 -0.31 1.24 -58.03 -2.76




From the above table we can see that provision shows an increasing trend and the huge amount is being kept in these provisions. Though the profits of

the company are increased income tax is also increased which is good that company is creating goodwill in market by paying income tax in time. The income tax is increased by 588% and 101% in 08-09 and 09-10 respectively from previous year. Although company is paying more income tax but also they are earning more. Other provisions are also for the benefit of employees and public. This is good sign for Company growth.

Working Capital Ratios and its Interpretation
A Ratio is a simple arithmetical expression of the relationship of one number to another. In simple language ratio is one number expressed in terms of another and can be worked out by dividing one number into the others. A Ratio is known as a symptom like blood pressure, the pulse rate or the temperature of an individual. Example=current assets/current liabilities .

A Ratio analyses is one of the most powerful tools of financial analyses. it is used as device to analyze and interpret the financial help of enterprise. Just like a doctor examines his patient by recording his body temperature, blood

pressure etc before his conclusion regarding the illness and before giving him treatment. With the help of ratio analyses one can measure the financial condition of the firm and point out whether the condition is strong good or poor. one can arrive at a decision of how the performance of a firm is deteriorating and can find out short term financial position or liquidity position and suggest what a company must do for improving its working capital.

Business Ratios
Items (i) (ii) (iii) (iv) (v) (vi)
Interest Income as a percentage to average working funds Non-Interest Income percentage to average as a

9.35% 1.17%

8.67% 1.24%


funds Operating Profit as a percentage to average working funds Return on Assets Business [Deposits plus Advances] per employee (Rs. in lacs) Profit per employee (Rs. in lacs)

2.09% 1.26% 655.58% 5.03%

2.12% 1.49% 466.87% 4.24%

Position of RECEIVABLE RATIO in Punjab & Sind Bank FORMULA
Receivable Ratio(In days) = DEBTORS/Sales *365

Year Ratios

2010 5.72

2009 5.53

Generally a low debtors turnover ratio implies that it considered congenial for the business as it implies better cash flow. The ratio indicates the time at which the debts are collected on an verage during the year. Needless to say that a high Debtors Turnover Ratio implies a shorter collection period which indicates prompt payment made by the customer,if we analyze the three year data we can say that it holds a good position while receiving its money from its debtors. The ratios are in an increasing trend, which implies that recovery position good and company should maintain these positions.

Position of PAYABLE RATIO in Punjab & Sind Bank Formula Payable Ratio = Creditors Cost of Sales

Year Payable days)


2010 in 9.35

2009 8.67

Actually this ratio reveals the ability of the firm to avail the credit facility from the suppliers throughout the year Generally creditors turnover ratio implies favorable since the firm enjoys lengthy credit period Now if we analyze the three years data we find that in the year 2010 ratio was very high which means that its position of creditors that year was not good, but in the next two years it is seen that it has followed a decreasing trend which is very good sign for the company. So we can say it enjoys a very good credit facility from the from the suppliers.

Position of CURRENT RATIO in Punjab & Sind Bank Formula Current Ratio = Total Current Assets Total Current Liabilities

Year Current Ratio

2010 10.9

2009 11.9

This ratio reflects the financial stability of the enterprise. The standard of the normal ratio is 2:1 Now if we analyze the three years data it can be predicted that it holds a stable position all through out period but it is seen that it holds a low position than the standard one and the company is required to improve its position.

Position of QUICK RATIO in Punjab & Sind Bank FORMULA Quick Ratio = Total Current assets - Inventories Total current Liabilities




Quick ratio



It is the ratio between quick liquid assets and quick liabilities. The normal value for such ratio is taken to be 1:1. It is used as an assessment tool for testing the liquidity position of the firm. It indicates the relationship between strictly liquid assets whose realizable value is almost certain on one hand and strictly liquid liabilities on the other hand. Liquid assets comprise all current assets minus stock. By analyzing the three years data it can be said that its position was weak in the year 2008 but it improved significantly in the next two years and was stable during that year.

A fund flow analysis is a technical device used to study the sources from which additional funds were derived and the use to which these sources were put. It is an effective management tool to study changes in the working capital of business enterprises between beginning and ending financial statements dates. The fund flow analysis consists of: • Preparing schedule of change in working capital. • State of sources and application of funds.








STATEMENT OR SCHEDULE OF CHANGE IN WORKING CAPITAL:Working capital means the excess of current assets over current liabilities. There are following four rules to kept in mind while preparing schedule of change in working capital given as under :• An increase in current assets increases working capital. • A decrease in current assets decreases working capital. • An increase in current liabilities decreases working capital. • A decrease in current liabilities increases working capital.

Cash Flow Statement for the year ended 31st March, 2009

Net Profit/ (Loss) as per Profit & Loss Account Adjustments for: Provisions & Contingencies

2009-2010 2008-2009
4371781 382358`



Depreciation (Net) Profit on sale of assets Interest on subordinated debts Staff Welfare Fund Operating Profit before working capital changes Adjustments for:

106315 -716 531111 -60000 7853847

71948 -1402 257485 -60000 5694619

Increase / (Decrease) in Deposits 98442463 Increase / (Decrease) in -4652416 Borrowings Increase / (Decrease) in Other Liabilities 2543571

56126524 27716420 -28629

(Increase) / Decrease in Investments (Increase) / Decrease in Advances (Increase) / Decrease in Other Assets
Cash Flow from Operating Activities (A)

-41520092 -63375041 -3090613 -3798281

-17824399 -66778284 -558997 3347254

B. CASH FLOW FROM INVESTING ACTIVITIES Increase in Fixed Assets Profit on sale of assets Cash Flow from Investing Activities (B) C. CASH FLOW FROM -215810 716 -215094 -118811 1402 -117409

FINANCING ACTIVITIES Issue of Subordinated Bonds Redemption of Subordinated Bonds Interest on Subordinated Bonds Cash Flow from Financing Activities (C ) Cash from Operating Activities Cash from Investing Activities Cash from Financing Activities Increase in Cash & Cash Equivalens

4000000 -450000 -531111 3018889

1000000 -1050000 -257485 -307485

-3798281 -215094 3018889 -994486

3347254 -117409 -307485 2922360

Cash and Cash equivalents at the 293398873 beginning of the year Cash and Cash equivalents at the 28404387 end of the year

26476513 29398873

INTERPRETATION:Statement of changes in working capital is prepared to show the changes in the working capital between the two balance sheet dates. The difference is recorded for each individual current assets & current liabilities. If we talk about current assets like cash & bank balances, sundry debtors, inventory and other current assets have left positive effect on working capital except only prepaid expenses. On the other hand all current liabilities have shown increase in balances with comparing from the previous balances.

Asset Quality
Non-Performing Assets (Rs. In crores) ITEMS
(i) (ii) (a) (b) (c) (d) (iii) (a) (b) (c) (d) (iv) (a) (b) ( c) (d) Net NPAs to Net Advances Movement of Gross NPA Opening Balance Additions during the year Reductions during the year Closing balance Movement of Net 66.97 77.35 66.29 78.03 77.04 64.66 74.73 66.97

0.32 135.53 141.87 116.36 161.04

0.37 290.84 105.84 261.15 135.53

NPAs Opening Balance Additions during the year Reductions during the year Closing balance Movement of provisions for NPAs

Opening Balance 65.71 b) Add: provisions made 85.72 during the year Less: write off, write back 72.48 of excess provisions Closing balance 78.95

210.55 77.71 222.55 65.71

(Rupees in crore)

Value of Investments (i) (a) (b) (ii) (a) (b) (iii) (a) (b) Gross Value of Investments In India Outside India Provisions for Depreciation In India Outside India Net Value of Investments In India Outside India



12656.43 Nil 29.00 Nil 12627.43 Nil

8524.92 Nil 51.29 Nil 8473.63 Nil

Every project has a scope which defines the areas of research and the parameters that need to be studied. The scope also tells us the purpose of the project. Branding is an important issue in the strategy formation process. Poor firms ignore their competitors; average firms copy their competitors; winning firms lead their competitors-Philip Kotler The above quote from the marketing guru aptly sums up the importance of the study of competition in the present world. The various steps involved in it are mentioned below.
1. Identifying competitors.

2. Analyzing competitors strategies, objectives, strength and weakness. 3. Designing the competitive intelligence system

Collecting the data Evaluating and analyzing the data · Disseminating information and responding. Designing competitive strategies interpreting with data.

The objective of the project is to carry out a market research for the Punjab & Sind Bank Ltd. to evaluate the market for working capital management and to study the various parameters.

The main objectives are discussed below.
1) To analyze the feedback given by corporate. 2) To analyze the parameters considered for the sale of these product. 3) To get a better understanding of the customers wants, needs and desires. 4) To carry out a benefit deficiency analysis (BDA) to find out what customers want from Punjab & Sind Bank and what they get from PSB. 5) To understand the various stages that goes into the making of a loyal customer. 6) To do a comb analysis to find the opinion of customers about different products of competitor. 7) Finally to formulate a strategy for the Punjab & Sind Bank based on the above findings.

Management objective:
1) To identify useful insights for the conduct of similar market research at other Branches of the company 2) To generate initial response of corporate about the products to improve the product parameters studied.

Research is the process of Systematic and in depth study or research for any particular topic, subject or area of investigation backed by collection, compilation, Presentation, and interpretation of relevant details or data. It is a careful research or enquiry into any Subject, which is an endeavor to discover or find out valuable fact, which would be useful for further application or utilization .Research is carried out by different methodologies, which have their own pros and cons. Research methodology is a way to solve research by studying and solving a research problem along with the logic behind it. Thus when we talk of research methodology we not only talk of the research method but also consider the logic behind the method used in context of research study and explain why we are using a particular method or techniques so that research result are capable of being evaluated.


The Sources of Data Collection are of two types:Primary Data:Primary data is that which are collected “afresh” and is supposed to be original in Character. Primary data is gathered in such a way so that need

of the researcher can be fulfilled .On the basis of primary data researcher withdraw some important conclusion and gives suggestion according.

Secondary Data:Secondary Data is that data, which is, collected Prior to the Present Study work. Any data that is available prior to the commencement of the research Project is called Secondary data and therefore Secondary is also called as Historical data. I have collected my secondary data from various broachers of the banks, Printed Annual Report books and website like, etc.


Marketing research is the systematic and objective identification, collection, analysis dissemination and use of information for the purpose of improving decision making related to the identification and solution of problems and opportunities in marketing. Each phase of this process is important. We

define or identify the marketing research problem or opportunity and then determine what information is needed to investigate it. Because every marketing opportunity translates into a research problem to be investigated in terms of “problem” and “opportunity”. Next, the various sources of information are identified and a range of data collection methods, varying in report that allows the information to be used for the purpose of management decision making. The main issue being discussed here is the emerging trends of corporate salary account business. For this purpose data was collected using both the primary and secondary sources. The secondary data was collected from the various product catalogues and internet while the primary data was collected from the field from builders, architects, dealers and customers. Information was collected by using a carefully prepared questionnaire which was designed keeping in mind all the aspects of the issue. The questionnaire was used to find out the following information: To get personal as well as the company’s detail. • To get information about the employees like how many employees are working on the payroll of the company. • To know that how they are paying salary to there employees. • With which bank they are banking and why?

• Are they aware of corporate salary accounts? • What is the level of their satisfaction with the current salary account? • What kind of services they expect from the bank? • How far their expectations are met? • The degree of loyalty of the customer towards their bank. A separate schedule was designed for the corporate to carry out project mapping in order to find out the prospect of the salary accounts. The following information was obtained from them: • Name and number of the directors. • Type of the company, where it is public limited, privet limited, solo ownership etc. • Name of the concerned person, who looks after payroll of the company. • The number of branches. • The number of employees on the payroll of the company. • The name of current bank with which they are banking. • Reasons for choosing that bank. • Last month net salary disbursement to find out average salary per employee.

Conducting an experiment or organizing a survey and doing research has become the part of life in modern times. Research methodology refers to the various sequential steps to be adopted by a researcher in studying a problem with certain object/objects in view.

The research was carried out in various phases. The first few phases were used to collect information. Based on this information, a hypothesis was assumed that with the use of appropriate strategy in customer service and use of proper elements of marketing mix the sales of salary accounts can be increased to garner a bigger pie of the market share. The final few phases were used to analyze the information so collected from various quarters. The research process carried out in various phases is discussed below:Phase I. Understanding the company and its products. The various parameters considered in the sale of these salary accounts. Getting

knowledge about the competitors in the area and knowing about the various promotion and technique of selling.

Phase II. This phase include visits to various companies to collect relevant data. The primary data was collected through Questionnaire and interviews with corporate. This data was further extended through dialogues with company officials. The secondary data was collected through websites, company files and brochures and other documents of past and present.

Phase III. In this phase the data so collected is analyzed using various statistical and market research tools to draw inference for the purpose of decision making. The analysis consists of product mapping, project mapping, competitor analysis, new opportunities, developing a brand equity etc. Phase IV. In this phase actual reporting of the findings and analysis will be prepared and submitted the same to the company.

Sample Size

The customer survey has been done in the Shri Hargobind Pur city. And sample size for this survey was 75. Data are correlated from different areas of Janakpuri,Delhi, which are reported by names. .


The basic purpose of the study conducted was to find the emerging trends in the Corporate salary market and based on those trends a formulating strategy for the Corporate salary accounts segment. Data was collected based on the above aim in mind, regarding the purpose of the salary accounts in the company and the various parameters on the basis of which these salary accounts are evaluated etc. According to survey, ICICI Bank is largest share holder in this segment. Whereas ICICI Bank, Citi Bank are the banks which don’t take much time to do it. It is also fact that HDFC Bank are having strong customer base and tie up with most of the Big companies of India including TCS, Wipro, TATA Motors, Reliance communications, EXL, Bharti Airtel, Loreal, Idea cellular and many others.. Customer satisfaction level is also high as compare to other banks.

The above figure shows that corporate salary accounts market in banking industry is mainly captured by ICICI Bank. Whereas HDFC Bank is second

large player in this segment. And Axis Bank and SBI are doing well as compare to others.

The above figure shows that IT sector is one who holds major market share in this segment. Thus the company should have mainly focus on this segment as well as the manufacturing segment in the market.


In the following diagram, we can see that 72% people are satisfied by the existing banks like ICICI, AXIS, PNB and other cooperative banks. Dissatisfaction is 12% and closing of the account is 3% and other reasons are 10%. In KAM, we found that existing clients did not want to change there bank because their bank are giving them customized services and changing the bank takes long time.

LIMITATIONS:The project is based on certain factors which also have their own shortcomings. These factors need to be looked into. Since the report proposes to study the Financial institution in Punjab & Sind Bank there may be certain factors which limit the scope of the project. These are discussed below.  Non serious attitude of the customer.  We cannot force corporate to tell why they are using our competitors product, there can be various reasons like they have taken loan from those bank, or near by the company, etc.  This product is valuable and for long term with no charges. So we can not force each and every company to get it with Punjab & Sind Bank without knowing about the reputation of the company.

 This research is only limited to Gurdaspur city and near by area only. Some time some of the people can give wrong or incomplete information so that to find out actual result we can not fully believe on the questionnaire.

OBSERVATIONS RECOMMENDATIONS:To work on this project I have find out some of the points where Salary managers should think. And by which they can increase customer base as well as they can give better service to the customers. They are as follows…. (1) Local toll free customer care numbers should be there to solve the

queries and problems as well as for new inquiry of the customer for corporate salary accounts. (2) Informative advertising should be started because lots of new entrants and traditional business houses are not aware about corporate salary accounts so that they can come to know about it.

(3) Necessity to decrease processing time because Punjab & Sind Bank takes too much time for its process as compared to its competitors and in present scenario customer wants less processing time and less documentations to make banking easy. So it is very important to decrease processing time. 4) Weekly feedback to each and every sales officer and daily dual reporting system can increase work efficiency. Sometimes sales people don’t do work properly and they don’t achieve targets. Some of the sales people do better job and they deserve appreciation. So for that matter, timely feedback can play important role to enhance the sales and work efficiency of the sales team. (5) There is a need to make documentation process more flexible because Punjab & Snid Bank wants 4 Photo identities (Driving license, Passport, Voter ID, PAN card) as a documentary proof of the employee to open his salary account and if person is not carrying any one of the above then it becomes difficult to open his salary account because bank cannot accept other documents due to rules even if the company is ready to give in writing that a particular person is working with us. (6) Necessary to motivate team to improve there performance. This is corporate sales, which is tough job. Some time team members become frustrated due to work pressure and high targets. So to get best from the team, salary manager should use various managerial techniques to reduce pressure and to create good work environment. (7) After tie up with any company, service should be even better so that customer base can increase and percentage of unsatisfied customer can be reduced.

(8) Ability to solve the query and difficulties of the customer is essential aspect of the business. For this matter sales team should be properly train and all the formalities they must know, otherwise approach to corporate many times is not possible and creates bad impression about the bank. Training programs for sales executive should be conducted every month.

Date:………………….. Personal Detail:-


: - …………………………………………………

Designation : - ………………………………………………… Sex : - ( ) Male ( ) Female

Name of the Bank……………………………………….

Contact nos. : - (O.)…………………., (R.)…………………..,


E-mail ID

: - ……………………………………….

1) What is the Minimum Balance For Opening an Corporate Salary Account with Your Bank?

Without Cheque-Book :a) 0 to 100 Balance c) 300 to 500 Balance b) 100 to 300 Balance d)500 to 100 Balance

With Cheque-Book :a)0 to 100 Balance c) 300 to 500 Balance b)100 to 300 Balance d) 500 to 100 Balance

2) If a Customer Open an account With Your Bank then how many Cheque Leafs are provided to them?
a)10 Cheque Leafs. c)) 20 Cheque Leafs.

b) 15 Cheque Leafs. d) 25 Cheque Leafs.

What is the Minimum Penalty charges For non- Maintaining the Corporate Salary Account in your Bank per transaction?

4 ) Is Your Bank Provide ATM Debit Card or Credit Card Facility to Customers For accessing their accounts?
a)Yes b) No

5) Does Your bank have Anywhere Cash Deposit Facility to Customers? a) Yes b) No


What is the ATM Maximum Cash Withdrawal Limit (Per Day) to Customers in your Bank?
a)Rs.0-5,000/-Per day c)Rs.10,000-25,000/- P/day b)Rs.5,000-10,000/-p/day d)Rs.25,000-50,000/-


e)Rs.50,000-75,000/- Per day Is Your bank Provide Fund Transfer Facility to Customers? a)Yes b) No


What are the Annual ATM Debit Card Charges to your banks Customers? a)Rs.0-50/c)Rs.100/- & above b)Rs.50-100/-

8) Is Your Bank Providing Cheque Payable at Par Facility to Customers? 11) Does Your Bank Offer loan Facilities to your Customers? a)Yes a) Yes b) No b) No

7) Is Your Bank having DD (Demand Draft) Facility?
a)Yes b) No


Is your Bank giving Auto Sweep Facility to Customers? 12) Which type of loan Your banks Provide? a)Yes b) No Personal Loan Yes No


Car Loan Yes No Does Your Bank Provide Multicity Cheque Book Facility to Customers? Housing Loan Yes No a)Yes Loan Pension Education Loan Yes Yes b) NoNo No

13) Is Your Bank Providing Statement Facility to the Customers to Know his Past Transaction Entries? Yes No

1116) Is Your Bank Provide Phone Banking Facility to Customers For Operating his account through Tele-Phone? 14) What are the various ways to inform Your Customers about his Past Transaction Entries? b) No a)Yes -By Your Yes No 17) Is Email Bank having Mobile banking Facility to Customers For Updating them With new Features and technology? -By Courier Yes No a)Yes b) No -By Fax Yes No 18 No Is -Handover Provide SMS Alert Facility to Customers For Your bank Yes Knowing him about his daily transaction entries? If any other than above please mention a)Yes b) No 15) Is Your Bank Provide Internet Banking Facility to Customers For accessing account from anywhere through internet 21) connection? Is your bank Provide Overdraft Facility to Customers for Withdrawing Excess Money from Bank? a) Yes b) No a) Yes b) No

22) Are you satisfied with the services being offered to

you by your bank? ( a ) Yes If not than why? ................................................................................................ ................................................................................................ ................................................................................................ ................................................................................................ ................................... ( b ) No



• • •

Annual Reports of Punjab & Sind Bank – 2008-2009 Financial Management – M.K. Sharma Asst. Manager Finance – S. Tarlok Singh

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