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) (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

INDIAN BANKING SYSTEM 0621000460 INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY CENTRE FOR DISTANCE LEARNING Ghaziabad EXECUTIVE SUMMARY Banking in India originated in the first decade of 18 century with The General B ank 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 t he private sector and foreign banks. In terms of quality of assets and capital adequacy, In dian 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 rateand this has mostly been true. INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY

INDIAN BANKING SYSTEM 0621000460 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 cu stomers or add their commitments to certain transactions undertaken by their clients and charge their fees/ commissions for the services rendered by them / their commitments ad ded to the transactions undertaken by the clients. The activities popularly known as Non -fund facilities provided by Banks. Thus, we conclude INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY

INTRODUCTION · Objectives of the study 5 · Scope of study 6 · Limitations of study 7 2.INDIAN BANKING SYSTEM 0621000460 TABLE OF CONTENTS 1. INDIAN BANKS Scope of Indian Bank 8 Banking in India 9 Definition of Banks 11 Types of Bank 12 Services Provided by Banks 13 3. RESERVE BANK OF INDIA Guidelines Provided by the RBI 21 Guidelines on Fair Practices Code 28 4 INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY .

SAROJA (DEPUTY MANAGER) under their guidance I undertook this project. STUDY OF PNB BANK 46 ACKNOWLEDGEMENT I express my heartiest gratitude to Mr. STUDY OF HDFC BANK 5. for extending the advice and direction that i s required to carry on a study of this nature. V. I am also thankful to Mrs.INDIAN BANKING SYSTEM 0621000460 33 4. S.K SHARMA (SENIOR MANAGERPNB) for giving me an opportunity to prepare a report on the project assigned to me. and for helping me with the intrica te INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY .

i t would have been very difficult to finish this work in the way I have done it. ( Ros han Ara ) INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY . Lastly I would like to thank all the respondents who offered their opinions and suggestions through the survey that was conducted by me. Without their support and able guidance.INDIAN BANKING SYSTEM 0621000460 details of the project at every step. I accept the sole responsibility of any possible errors of omission. However.

. To study the Indian bank scenario and its problem. . To study the role of bank in Indian Market. . Long Term and Short Term Finances.INDIAN BANKING SYSTEM 0621000460 OBJECTIVES OF THE STUDY . market and operational risks associated with banking sector. To study various bank. To understand the importance of banking sector. . . . To study the Indian bank scenario and its problem. various methodologies undertaken. To study broad outline of management of credit. To offer suggestions based upon the findings. Corporate and Commercial. still the project covers whole subject in concise manner. The study aims at learning the techniques involved to manage the various types of Banks. . Though the Indian Banking System is very wide and elaborated. Different types of services provided by the banks. . . INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY . .

. INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY . The Indian banking system. dilution of the government stake in public sector banks (PSBs). 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. has witnessed a series of reforms over the past few years like the deregulation of interest rates. 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. Studying the increasing business scope of the bank. A healthy banking system is essential for any economy striving to achieve good growth and yet remain stable in an increasingly global business environment. with one of the largest banking networks in the world.INDIAN BANKING SYSTEM 0621000460 SCOPE OF THE STUDY .

. Due to the ongoing process of globalization and increasing competition. Within each of these broad groups. The report seeks to present a comprehensive picture of the various types of bank. Market segmentation to find the potential customers for the bank. The banks can be broadly classified into two categories: Nationalise Bank Private Bank . no on e model or method will suffice over a long period of time and constant up gradatio n will be required. The major limitation of this study shall be data availability as the data is proprietary and not readily shared for dissemination. may develop its own methods for measuring and managing risk. As such the project can be considered as an overview of the various banks prevailing in Punjab National Bank and in the Banking Industry. Each bank. under the various sub-groups. Limitations are extent to which the process should not exceed. INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY .INDIAN BANKING SYSTEM 0621000460 . there has also been a growth in retail banking. an attempt has been made to cover as comprehensively as possible. 2. Limitations of this project a re: 1. . . in conforming to the RBI guidelines. The project was constrained by time limit of two months. The corporate sector has stepped up its demand for credit to fund its expansion plans. LIMITATION OF THE STUDY: Every work has its own limitation. Customers perception on the various products of the bank. 4. 3.

PROBLEMS: --The corporate sector has stepped up its demand for credit to fund it s expansion plans. The conclusion made is based on a sample study and does not apply to all the Individuals.INDIAN BANKING SYSTEM 0621000460 5. INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY . there has also been a growth in retail banking. Each group has t heir own benefits and limitations in operating in India. However. 8. there are some issues and challenges that Indian banks w ill have to contend with if they are to emerge successful in the medium to long term. 6. 7. All banks are not included. even a s the opportunities increase. In India the banks are being segregated in different groups. The project study is restricted to banking sector used in India only.

In the pr ocess of data collection we went to the respective bank to get the questionnaire filled. in order to collect data.) books ( like Working Capital Management written by Sarbesh Mishra and Financial Service written by M Y Khan etc. Profitability.INDIAN BANKING SYSTEM 0621000460 RESEARCH METHODOLOGY: The first stage included the introduction of Indian Banks and how they work in I ndia. Credit quality. Primary data The primary data will be collected through the questionnaire designed. The preparation of the project report required me to visit the various other compani es like Punjab National Bank. ICICI bank . The next stage involved determining the objectives of the study. It will non-disguised in nature and will include a few open-ended questio ns. Central Bank. drafting a questionnaire will be designed keeping in mind the target audience and objective s of the study. State Bank of India. DATA COLLECTIONS The data from such organization has also been collected. newspapers ( like The Economic Times. IDBI bank etc. Efficiency / Profitability. Secondary data The Preparation of the project report also required data from various journals.) INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY . I choose five criteria Growth. Strength. Times of India etc.

From the times of the Bank of Bengal (1806) the sector has been witnessing qualitative and quantitativ e changes. HDFC Bank and Bank of Punjab are the main winners of the race. Favorable economic climate and a variety of other factors such as demand for wide range of financial products f rom various sections of the society led to mutually beneficial growth to the banking sector and economic growth process. A customer is empowered to operate his account from any part of the country. Both these banks are now defunct. This was coincided by technology development in the banking operations. 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. With this. The drastic development taken place during the first 25 years since independence was Nationalization of many private banks.INDIAN BANKING SYSTEM 0621000460 SCOPE OF BANKING SECTOR Banking business has a history of over 200 years. Today most of the Indian cities have networked banking facility as well as Internet banking facility. The oldest bank in existence in Ind ia is INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY . Allahabad Bank. Punjab National Bank and Bank of India. Main players during the pre-independence period were Credit Lyonnais. 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. 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. ICICI. This was followed by Bank o f Hindustan. UTI Bank.

in 1895 in Lahore and Bank of India. At that point of time. A couple of decades later. By the 1900s.INDIAN BANKING SYSTEM 0621000460 the State Bank of India being established as "The Bank of Bengal" in Calcutta in June 1806. and due to which ba nking activity took roots there and prospered. After India's independence in 1947. in Mumbai bo th 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. in 1906. mainly due to the trade of the British Empire. the Reserve Bank was nationalized and given broader powers. foreign banks like Credit Lyonnais started thei r Calcutta operations in the 1850s. Reserve Bank of India Scheduled Banks Commercial Banks Co-Operative Banks State Cooperatives (16) Foreign Banks (40) Regional Rural Bank (196) Urban Cooperatives (52) INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY . The first fully Indian owned bank was t he Allahabad Bank. the market expanded with the establishment of banks such as Punjab National Bank. which was established in 1865. Calcutta was the most a ctive trading port.

INDIAN BANKING SYSTEM 0621000460 Private Sector Bank (30) Public Sector Banks (27) Old (22) New (8) State Bank of India & Other Nationalised Banks Associate Banks (8) (19) INTRODUCTION INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY .

INDIAN BANKING SYSTEM 0621000460 Definition of the Bank:-Financial institution whose primary activity is to act a s a payment agent for customers and to borrow and lend money. First bank were General Bank of India and Bank of Hindustan. . . now defunct. . Banks are important players of the market and offer services as loans and funds. Punjab National Bank and Bank of India was the only private bank in 1906. INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY . Banking was originated in 18th century . Allahabad bank first fully India owned bank in 1865.

Savings banks accept savings deposits. Private banks manage the assets of high net worth individuals. It is the most successful department of banking. Private sector bank HDFC. Axis bank. (After the great depression. Bank of Rajasthan INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY . ICICI. Kotak Mahindra bank. Many offshore banks are essentially private banks. whereas investment banks were limited to capital markets activities. as opposed to normal individual members of the public (retail banking). Postal savings banks are savings banks associated with national postal systems.INDIAN BANKING SYSTEM 0621000460 Types of banking Commercial bank has two meanings: . Congress required that banks only engage in banking activities.S. the U. 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. Community development bank are regulated banks that provide financial services and credit to underserved markets or populations. Yes bank. Offshore banks are banks located in jurisdictions with low taxation and regulation. There are some examples of banks in India: . This separation is no longer mandatory.) . Commercial bank is the term used for a normal bank to distinguish it from an investment bank.

Commercial bank State Bank. HSBC. Fund Based 2. PNB . . Non-Fund Based Banking Services Fund Based Services Non-Fund Based Services INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY . Retail bank BOB. Punjab National Bank. Syndicate bank. HDFC etc. Central Bank. National bank for agriculture and rural development (NABARD) . Universal bank Deutsche bank Services provided by the bank Banks provide two types of services 1. ICICI.INDIAN BANKING SYSTEM 0621000460 . Rural bank United bank of India.

the l atter may or may not involve cash outflow from a banker. In other words. Fund Based Services INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY . While the former involves all immediate cash outflow. 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.INDIAN BANKING SYSTEM 0621000460 FUND BASED AND NON-FUND BASED FUNCTIONS The difference between fund-based and non-fund based credit assistance lies main ly in the cash outflow.

Commercial Loans Segment A.INDIAN BANKING SYSTEM 0621000460 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. In general. also called net current assets or current capita l. The number can be positive or negative. Making Investments in shares/ debentures/ bonds. depending on how much debt the company is carrying. INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY . Working Capital:-Working Capital is Current assets minus current liabilities. FUND BASED SREVICES I. 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. LOANS AND ADVANCES 1. Fund-based functions of a bank may be classified into two parts: . Working capital measures how much in liquid assets a company has available to build its business. Granting of Loans and Advances .

Bills Discounting:-This is the most important form in which a bank lends without any collateral security. Interest on overdrafts is charged on the fluctuating daily balance. Bills Purchase:V. wages. to overdraw. equally. II. Bills Finance:IV. etc. In that respect overdrafts are unlike personal loans . Instead it's us ed to clear up accounts payable. Overdraft:-Banks allow selected customers to write cheques in excess of the balance in their current account. Its limit is fixed on the basis of security o f the company`s current assets. Overdrafts are arranged up to limits which depend on the customer's credit standing and the bank manager's humour. Cash Credit:-This facility is given by the banker to the customer by way of a certain amount of credit facility. The arrangements allow flexibility in the amount spent and. A working capital loan is not used to buy long term assets or investments. III. ie. which are structured with regular repayments. I. all ow flexibility in repayments (although technically a bank can demand repayment of a n overdraft within 24 hours). The seller draws bills of exchange on the buyer of INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY .INDIAN BANKING SYSTEM 0621000460 A loan whose purpose is to finance everyday operation of a company.

Bank term loans are ve ry a common kind of lending. the bank can recovers the full amount from the customer along with the expense in that connection.viz railway receipts. with the loan repayments geared to the project's cashflow. II. Fixed Assets Finance:III. B. Capital Expenditure:-Money spent to acquire or upgrade physical assets such a s buildings and machinery.INDIAN BANKING SYSTEM 0621000460 goods on credit. The term has come to be loosely applied to various fo rms of financing. The bank purchase bills payable on demand and credit the customer`s account with the amount of bills less the discount. Such a bill may either be a clean bill or documentary bill whic h is accompanied by documents of title to goods. Project finance is used in connection with raising large amounts of money for bi g-ticket. the borrower usuall y uses the funds from the loan soon after they become available. the bank present th em to its acceptor for payment. with a fixed maturity and often featurin g amortization of principal. Tem Loans:-A bank loan to a company. Otherwise. I. Project Finance:-Financing arrangements where the funds are made available for a specific purpose (the project). In case the discounted bill is dishonored by the nonpa yment. also called capital spending or capital expense. 'A financing of a particular economic unit in which a lender is satis fied to INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY . energy-related facilities. On maturity of the bills. the funds are drawn down shortly after the agreement is signed. If this loan is in the form of a line of credit.

family. Generally. and are amortized over a fixed term with regular payments of principal and interest. these loans are used for debt consolidation. as distinguished from a loan financing a business.INDIAN BANKING SYSTEM 0621000460 look 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 colla teral for the loan.' IV. the loan is made on t he basis of the borrower's integrity and ability to Pay. Education Loans:3. If unsecured. Though in some situations the lender may require a co-signer or guarantor. or household use. Personal Loans Segment:-Loan granted for personal. or to pay for vacations. education expenses. Consumer Loans Advance against Shares:V. Non-Fund based services INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY . Housing Loans:VI. or medical bills.

INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY . The funds of the borrower are not blocked in the advances to be given to the suppliers or beneficiaries and this keeps his liquid ity position comfortable. besides getting handsome commission or fee and some other service charges.INDIAN BANKING SYSTEM 0621000460 It is generally perceived that the non-fund based business is very remunerative to bank and the borrowers. They also need the facilities for acquisition of fixed assets includ ing their financing. 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. production smooth and costs low. also get the low cost deposits in the shape of margin and ancillary business. The banks.

net worth to a 'group'. In crores 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 175 700 INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY . investments in Bonds and commercial paper and any other commitment should not exceed 25 percent of its (bank's) net worth to a n individual borrower and 50 percent of its. Rs. Particulars Rs. It may howeve r. the Non-fund based facilities are to be taken at 50 percent of the sanctioned limit. underwriting. investments. be rioted that while calculating exposure. To illustrate the point let us consider the following example: Example1.INDIAN BANKING SYSTEM 0621000460 RBI NORMS: Prudential exposure norms as per extant guidelines of Reserve Bank of India prov ides that the maximum exposure of a bank for all its Fund based and Non-fund based cr edit facilities.

INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY .INDIAN BANKING SYSTEM 0621000460 Maximum exposure permitted for all borrowers under the same group (50% of net worth of the bank) 350 657 Example1. Particulars Rs.

INDIAN BANKING SYSTEM 0621000460 Limits sanctioned to borrower Fund Based Non-Fund Based 100 Total 200 Total Exposure For Fund Based limits @ 50% of limits For Non-Fund based limits 50 @ 50% of limits 100 100 200 100 50 Total 150 INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY .

in turn. in normal course of business. 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 B uyers' Banker (BBK). not being aware of the customer s financial standing prefers a bank guarantee. Bank guarantee: -It is customary for the Bank. whereby the Buyer's Banker (BBK) gives an undertaking to the Seller(S) that. The Bank guarantees are governed by various provisions as contained in the Indian Contrac t Act.200 crores which are in excess of the maximum exposure norm of Rs. undertakes the guarantee of the customer s fin ancial commitments or performance of contracts by him. 175 crores. 1872. The third party who seeks the guarantee.INDIAN BANKING SYSTEM 0621000460 Total credit limits to the above borrower are Rs. but for the purpose of determining expo sure 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. In turn the Bank. undertaken by the buyer to his own Banker(BBK). at a request of the Buyer (B). along with a ll the required documents. This is mostly as an alternate to keep cash as a security deposi t. the entire amount of the bill will be paid to the Seller (S) by the Seller' s Banker (SBK). bank s customers are sometimes required to give a Bank Guarantee. on behalf of the Buyer's Banker (BBK) immediately. as has been. The bank charges commission for this INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY . in favour of the Seller(S). in strict compliance of all the terms and conditions stipula ted in the L/C. to issue and execute guarantees in favor of third parties on behalf of the customers. The commercial transactions. in the event of the Seller tendering the Bill of Exchange to the Seller's Banker (SBK). which very well understands the financial standing of the customer.

cheques & securities Selling of products of insurance co.. P-notes. which depends on the security available and the financial stability of the customer. local authority. traveler's cheque Agent for any govt. 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 ATM Tele-banking Credit card and debit card Online banking MOBILE BANKING INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY .INDIAN BANKING SYSTEM 0621000460 service. AGENCY FUNCTIONS Collecting of B/E./ MF Granting & issuing LC.

Savings Bank A/c .INDIAN BANKING SYSTEM 0621000460 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):. after staying abroad for not less than one year. Retain their savings in foreign currency in a RFC account. Fixed Deposit A/c INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY . . Get the proceeds of FCNR (B)/NRE Deposits credited to this account. can . Non Resident external (NRE):-Deposits can be placed in .Deposits Returning Indians for permanent settlement.

1949 have been supplemented by regulatory prescriptions issued by RBI from time to time. Reserve Banks of India: Establishment The Reserve Bank of India was established on April 1. since nationalisation in 1949. 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. In view of the above. the Reserve Ba nk is fully owned by the Government of India. Though originally privately owned. his resident account should be designated as NRO account. 1935 in accordance with th e provisions of the Reserve Bank of India Act. 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. he can open a NRO a/c with s uch funds. The banks are also important for smooth functioni ng of the payment system. legal prescriptions for ownership a nd governance of banks laid down in Banking Regulation Act. The INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY .INDIAN BANKING SYSTEM 0621000460 Non Resident Ordinary (NRO) Deposits:-Where an Indian citizen having a resident account leaves India and becomes non-resident. Where non-resident Indian receives income in India.

signing of decl aration and undertaking by directors. 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 diversifi ed. Guidelines on corporate governance covering criteria for appointment of directors. Guidelines for acknowledgement of transfer/allotment of shares in private s ector banks were issued in the interest of transparency by RBI on February 3.R. and powers for removal of manageria l personnel. Further. iv. iii. it is considered necessary to lay down a comprehensi ve framework of policy in a transparent manner relating to ownership and governance in the Indian private sector banks as described below.INDIAN BANKING SYSTEM 0621000460 existing legal framework and significant current practices in particular cover t he following aspects: i. Against this background. based on the recommendations of Ganguly Committee and a review by the BFS. 2004. 2. v. Ministry of Commerce and Industries. appropriate restructuring and consolidati on in the banking sector. 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 . the fit and proper criterion. 1949. role and responsibilities of directors and the Board. approval of Reserve Bank of India for appointment of CEO as well as terms and conditions thereof. rural ec onomy. etc. it is no substitute for effective regulation. Foreign investment in the banking sector is governed by Press Note dated Mar ch 5. 2004 issued by the Government of India. were issued by RBI on June 20.. 2002 and June 25. in the interest of depositors are governed by various sections of the B.. SSI. Act. 2004. on a continuing basis. The composition of Board of Directors comprising members with demonstrable professional and other experience in specific sectors like agriculture. While diversified ownership minimises the risk of misuse or imprudent use of leveraged funds. etc. etc. co-operation. ii. CEO and directors. 3. The pursuit of the goal of diversified ownership will tak e INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY . law. has to be the over-riding consideration in the path of ensuring adequate investments.

ii.INDIAN BANKING SYSTEM 0621000460 account of these basic objectives. (v) The policy and the processes are transparent and fair. 2004 on acknowledgement for allotment and transfer of shares. 5. Minimum capital The capital requirement of existing private sector banks should be on par with t he entry capital requirement for new private sector banks prescribed in RBI guideli nes of January 3.. Where the net worth declines to a level below Rs. (iii) The directors and the CEO who manage the affairs of the bank are fit and proper as indicated in circular dated June 25. with a commitment to increa se to Rs. In order to meet with this requirement. 2001. directly or indirectly. 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. (iv) Private sector banks have minimum capital/net worth for optimal operations and systemic stability. Shareholding i. The bank s which are yet to achieve the required level of net worth will have to submit a t imebound programme for capital augmentation to RBI. it should be restored to Rs.300 crore at all times. in any bank in excess of 10 per cent of the paid up capital of th e private sector bank. which is initially Rs. 2004 and observe sound corporate governance principles. all banks in private sector should have a net worth of Rs. 4.300 crore.200 crore. (ii) Important Shareholders (i.e. Any higher level of acquisition will be with the prior appr oval INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY . In the interest of diversified ownership of banks. shareholding of 5 per cent and above) are fit and proper . 300 crore within a reasonable time.300 crore within three years. in a systematic manner and the process will b e spread over time as appropriate. the objective will be to ensure that no single entity or group of related entities has shareholding or control. as laid down in the guidelines dated February 3.

RBI may permit a higher level of shareholding. 2004 for grant of acknowledgement for acquisition of shares. iv. v. Where ownership is that of a corporate entity. vi. widely held. b y way of strategic investment. In case of restructuring of problem/weak banks or in the interest of consoli dation in the banking sector. The recommendations of the Ganguly Committee on corporate governance in banks have highlighted the role envisaged for the Board of Directors. if by such acquisition. are indeed representatives of those sect ors in a demonstrable fashion. Directors and Corporate Governance i. publicly lis ted and enjoys good standing in the financial community. iii. including by a bank. shares not exceeding 10 per cent of the paid up capital of the bank subject to RBI s prior approval. 2004.R. Banks (including foreign banks having branch presence in India)/FIs should n ot acquire any fresh stake in a bank s equity shares. As per existing policy. the objective will be to ens ure that no single individual/entity has ownership and control in excess of 10 per cent o f that entity. in regard to important shareholders with other commercial affiliations. Act. large industrial houses will be allowed to acquire. While the respective entities should perform the roles envisaged for them. 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. they fulfil the criteria under corporate governance norm s provided by the Ganguly Committee and they also fulfil the criteria applicable f or INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY . 6. private sector banks will be required to ensure that the directors on their Boards representing speci fic sectors as provided under the B. Furthermore. Where the ownership is that of a financial entity the objective will be to ensure that it is a well established regulated entity. 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. such a limitation will also be considered if appropriate.INDIAN BANKING SYSTEM 0621000460 of RBI and in accordance with the guidelines of February 3.

2 Foreign Institutional Investors (FIIs) INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY . For this purpose a declaration and undertaking is required to be obtained from the propos ed / existing directors iv. not more than one member of a family or a close relative (as defined under Section 6 of the Companies Act.INDIAN BANKING SYSTEM 0621000460 determining fit and proper status of Important Shareholders (i. 7. ii. RBI may apply any additional requirements for the Chairman and CEO. at least 26 per cent of the paid up capital of the private sector banks w ill have to be held by resident Indians. NRI) cannot exceed 74 per cent. Henc e any FDI in private banks where shareholding reaches and exceeds 5 per cent eithe r individually or as a group will have to comply with the criteria indicated in th e aforesaid guidelines and get RBI acknowledgement for transfer of shares. iii.1 Foreign Direct Investment (FDI) (other than by foreign banks or foreign bank group) i. the CEO should satisfy the requirements of the fit and prop er criteria applicable for directors. 2004. shareholding of 5 per cent and above) as laid down in RBI Circular dated June 25. etc.e. In addition. As a matter of desirable practice.) should be on the Board of a bank. ii. FII. 7. Guidelines have been provided in respect of 'Fit and Proper' criteria for d irectors of banks by RBI circular dated June 25. To enable assessment of fit and proper the information on ownership/beneficial ownership as well as other relevant aspects will be extensive.. 1956) or an associate (partner. The policy already articulated in guidelines for determining fit and proper sta tus of shareholding of 5 per cent and above will be equally applicable for FDI. 7. At all times. Being a Director. 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. director. 2004 in accordance with the recommendations of the Ganguly Committee on Corporate Governance. 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. employee.

Due diligence process The process of due diligence in all cases of shareholders and directors as above . the policy guidelines on acknowledgement for acquisition/transfer will be applied.300 crore within three years of commencement of business. Hence any bank with net worth below this level w ill be required to submit a time bound programme for capital augmentation to RBI for approval. The current minimum capital requirements for entry of new banks is Rs. due diligence outlined in the guidelines will be undertaken to ensure fulfillment of fit and proper criteria. ii. 7. 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 po licy guidelines on acknowledgement of acquisition/transfer of shares issued.INDIAN BANKING SYSTEM 0621000460 i. INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY .200 cro re to be increased to Rs. ii. Transition arrangements i. investigation agencies and independent credit reference agencies as considered appropriate. A few private sector banks which have been in existence before these capital requirements were prescribed have less than Rs. Further. will involve reference to the relevant regulator. 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. all the existing priv ate banks should also be able to fulfil the minimum net worth requirement of Rs. 9. In the inter est of having sufficient minimum size for financial stability. For this purpose RBI may seek certification from the concerned FII of all beneficial inte rest. revenue authorities. 8.200 crore net worth. Where any existing shareholding of any individual entity/group of entities i s 5 per cent and above.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 t o 24 per cent with the approval of Board/General Body.300 crore required for a new entry. This dispensation will continue.

vii. when considered necessary. Where RBI acknowledgement has already been obtained for transfer of shares of 5 per cent and above. Any bank having shareholding in excess of 5 per cent in any other bank in In dia will be required to indicate a time bound plan for reduction in such investments to the permissible limit. 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. or close relatives or associa tes on the Board will be required to ensure compliance with these requirements at th e time of considering any induction or renewal of terms of such directors. Banks will be required to undertake due diligence before appointment of direc tors and Chairman/CEO on the basis of criteria that will be separately indicated and provide all the necessary certifications/information to RBI. While considering such cases. having shareholding directly or indirectly through any other entity in the banki ng group in excess of 5 per cent in any other bank in India will be similarly requi red to indicate a time bound plan for reduction of such holding to 5 per cent. ii. RBI will also take into account the terms and conditions of the banking licences. undertake independent verification of fi t and proper test conducted by banks through a process of due diligence as describe d in paragraph 8 INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY .INDIAN BANKING SYSTEM 0621000460 iii. Banks having more than one member of a family. vi. 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 ti me table for reduction of holding to the permissible level. Continuous monitoring arrangements i. 10. Similar continuing due diligence on compliance with the fit and proper criteri a for directors/CEO of the bank will have to be undertaken by the bank and certifi ed to RBI annually. RBI may. iv. v. it will be the bank s responsibility to ensure continuing compliance of the fit and proper criteria and provide an annual certificate to the RBI of having undertaken such continuing due diligence. iii. The parent of any foreign bank having presence in India.

On the basis of such continuous monitoring. banks/ Financial Institution should acknowledge for the same and state the specific tim e period from the date of acknowledgement within which a decision on the specific loan request will be conveyed to the borrowers. penal interest rates. . 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 rejecti on of any application for loan. If all the requirements are complied with the borrowers. they should intimate the borrowe rs immediately. process fees and other charges. pre-payment options and any other matter which affects the interest of the borrower.INDIAN BANKING SYSTEM 0621000460 11. 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 ti me. If additional details / documents are required. . RBI will consider appropriate measures to enforce compliance. so that a meaningful comparison with that of other banks can be made and informed decision can be taken by the borrower. 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). INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY .

In the case of rejection of any loan application. should be mutually settled. . The loan agreement should clearly specify the liability of lenders to borrowers in regard to allowing drawings beyond the sanctioned limits. Lenders should ensure timely disbursement of loans sanctioned. .INDIAN BANKING SYSTEM 0621000460 . INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY . without proper revision and sanction in credit limits. disallowing large cash withdrawals and obligation to meet further requirements of the borrowers on account of growth in business etc. which may be sanctioned. The credit limit. lenders should convey in writi ng the specific reasons thereof. Banks / Financial Institution should create appropriate information dissemination mechanism. . Stipulation of margin and security should be based on due diligence and credit worthiness of borrowers. honouring the cheques issued for the purpose other than agreed. . . A copy of such agreement should be made available to the borrowers for their record. Lenders should ensure that there is proper assessment of credit requirement 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. . in respect of advances sanctioned by the Board of Directors or its committee the documents of understanding should be certified by the authorised signatory preferably at company secretary level. To ensure the above. and disallowing drawings on a borrower account on its classification as a nonperforming assets or on account of non-compliance with the terms of sanction. Terms and conditions and other caveats governing credit facilities given by banks / Financial Institution arrived at after negotiation by the lending instit ution and the borrower should be reduced in writing duly witnessed and certified by the authorised sanctioning authority.

ORGANIZATION PROFILE 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 se t up a bank in the private sector. borrowers s hall 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. . the Corporation has maintained a consistent and healthy growth in its operations to remain the market leader in mortgages. with its registered office in Mumbai. Its outstanding loan portfolio covers well over a million 39 INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY . PROMOTER HDFC is India's premier housing finance company and enjoys an impeccable track record in India as well as in international markets. Lenders should release all securities on receiving payment of loan or realisatio n of loan subject to any legitimate right of lien for any other claim lenders may have against borrowers. as part of the RBI's liberalization of the Indian Ba nking Industry in 1994. HDFC Bank commenced operations as a Scheduled Commercial Bank in January 1995.INDIAN BANKING SYSTEM 0621000460 . The bank was incorporated in August 1994 in the name of 'HDFC Bank Limited'. Lenders should give reasonable notice to borrowers before taking decision to recall / accelerate payment or performance under the agreement or seeking additional securities. Since its inception in 1977 . India. If such right of set off is to be exercised.

INDIAN BANKING SYSTEM 0621000460 dwelling units. · CAPITAL STRUCTURE The authorized capital of HDFC Bank is Rs550 crore (Rs5. The objective is to buil d sound customer franchises across distinct businesses so as to be the preferred p rovider of banking services for target retail and wholesale customer segments. consistent with the bank's risk appetite. HDFC was ideal ly positioned to promote a bank in the Indian environment. large shareholder base and unique consumer franchise.2 billion). The paid-up capital is Rs424. Product Leadership and People. HDFC Bank's business philosophy is based on four core values Operational Excellence. The shares are listed on the Stock Exchange.6% of the equity is held by the ADS Depository (in respect o f the bank's American Depository Shares (ADS) Issue). The HDFC Group holds 19.4% of the ban k's equity and about 17. Times Bank Limited (a nother new private sector bank promoted by Bennett. a stron g market reputation. Roughly 28% of the equity is hel d by Foreign Institutional Investors (FIIs) and the bank has about 570. · BUSINESS FOCUS HDFC Bank's mission is to be a World-Class Indian Bank.000 shareholde rs./Times Group) was INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY .4. The bank's American Depository Shares are listed on the New York Stock Exchange (NYS E) under the symbol 'HDB'.6 crore (Rs. professional integ rity.5 billion). and to achie ve healthy growth in profitability. corporate governance and regulatory compliance. HDFC has developed significant expertise in retail mortgage loan s to different market segments and also has a large corporate client base for its hou sing related credit facilities. Customer Focus. · TIMES BANK AMALGAMATION In a milestone transaction in the Indian banking industry. The b ank is committed to maintain the highest level of ethical standards. With its experience in the financial markets. Coleman & Co. Mumbai and the National Stock Exchange.

All branches are link ed on an online real-time basis.. Plus/Cirrus and American Express Credit/Charge cardholders. Moreover. which enables the bank to offer speedy funds transfer facilities t o its INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY . The acquisition added significant value to HDFC Bank in terms of increased branch network. Customers in over 120 locations are also serviced throug h 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 cust omers are located as well as the need to build a strong retail customer base for both deposits and loan products. All the bank's branches have online connectivity. HDFC Bank's ATM network can be accessed by all domestic and international Visa/MasterCard. the 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 acros s these cities. · TECHNOLOGY HDFC Bank operates in a highly automated environment in terms of information technology and communication systems. The Bank at present has an enviable networ k of over 1229 branches spread over 444 cities across India. Visa Electron/Maestro. effective February 26.75 s hares of Times Bank. 2000. As per the scheme of amalgamation approved by the shareholders of both banks and the Reserve Bank of India.INDIAN BANKING SYSTEM 0621000460 merged with HDFC Bank Ltd. · DISTRIBUTION NETWORK HDFC Bank is headquartered in Mumbai. enhanced customer base. ski lled manpower and the opportunity to cross-sell and leverage alternative delivery channels. Being a clearing/settlement bank to various leading stock exc hanges. expanded geographic reach. shareholders of Times Bank received 1 share of HDFC Bank for every 5.

to b uild the infrastructure for a world class bank. The objective is to buil d sound customer franchises across distinct businesses so as to be the preferred p rovider of banking services for target retail and wholesale customer segments. In each of its businesses. expertise and technology to create a competitive advantage and build market shar e.Operational Excellence. 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 busines ses. and to achie ve healthy growth in profitability. · PRODUCT SCOPE: HDFC Bank offers a bunch of products and services to meet the every need of the people. Multi-branch access is also provided to retail customers through the branch network and Automated Teller Machines (ATMs). the Bank has succeeded in leveraging its market position . HDFC Bank's business philosophy is based on four core values. professional integ rity. Product Leade rship and People. The company cares for both. individuals as well as corporate and small a nd INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY . The Bank has made substantial effo rts and investments in acquiring the best technology available internationally. · BUSINESS FOCUS HDFC Bank's mission is to be a World-Class Indian Bank.INDIAN BANKING SYSTEM 0621000460 customers. The Bank's business is supported by scala ble and robust systems which ensure that our clients always get the finest services we o ffer. corporate governance and regulatory compliance. The b ank is committed to maintain the highest level of ethical standards. Customer Focus. consistent with the bank's risk appetite.

Mutual fund etc. For organizations the company has a host of customized solution s that range from Funded services. · Customer center. investmen t.SavingsMax Account . Value addition services. For individuals. PRODUCTS AND SERVICES AT A GLANCE 1. PERSONAL BANKING A.Institutional Savings Account INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY . different types of loans and cards that assist the customers. The products of the company are categorized into variou s sections which are as follows: · Accounts and deposits.INDIAN BANKING SYSTEM 0621000460 medium enterprises. · Cards. · Investments and Insurance. Non-funded services. · Forex and payment services.Senior Citizens Account . and pension scheme.Regular Savings Account .Savings Plus Account . These affordable plans apart from providing long term value to the employees help in enhancing goodwill of the company.No Frills Account . · Loans. Th e customers can choose the suitable one from a range of products which will suit t heir lifestage and needs. the company has a range accounts. Accounts & Deposits .

Reimbursement Current Account .INDIAN BANKING SYSTEM 0621000460 . Loans .Payroll Salary Account .Pension Saving Bank Account .Max Current Account .HDFC Bank Preferred .Home Loans INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY .Kid's Advantage Account .Kisan Club Savings Account .Regular Salary Account .RFC .Defence Salary Account .Classic Salary Account .Private Banking B.Domestic Account .Plus Current Account -Trade Current Account .Regular Current Account -Apex Current Account .Regular Fixed Deposit .Family Savings Account .Kisan No Frills Savings Account .Premium Salary Account .Personal Loans .Super Saver Account .Premium Current Account .Sweep-in Account .

Offers & Deals .Mutual Funds -Insurance -Bonds .Equities & Derivatives -Mudra Gold Bar D. Investments & Insurance .Overdraft against Car -Express Loans .Customer Center C.Loan against Securities .Knowledge Centre .Foreign Currency Cash .Commercial Vehicle Finance -Working Capital Finance .Foreign Currency Cheque Deposits INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY .Financial Planning .Construction Equipment Finance . Forex Services -Trade Finance -Travelers Cheques .Loan against Property .INDIAN BANKING SYSTEM 0621000460 -Two Wheeler Loans -New Car Loans -Used Car Loans .Foreign Currency Drafts .

Bill Pay .Excise & Service Tax Payment F.Prepaid Refill .Platinum plus Credit Card -Titanium Credit Card -Value plus Credit Card . Access Your Bank .E-Monies Electronic Funds Transfer .Insta Alerts .Mobile Banking -ATM -Phone Banking .Net Safe .One View .Silver Credit Card .Health plus Credit Card INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY . Payment Services .Foreign Currency Remittances .Gold Credit Card -Woman's Gold Credit Card .Direct Pay -Visa Money Transfer .INDIAN BANKING SYSTEM 0621000460 .Branch Network G. Cards .Cash To Master -ForexPlus Card E.

Easy ShopInternational Debit Card .Debit Cards .Easy ShopInternational Business Debit Card .Smart Pay .INDIAN BANKING SYSTEM 0621000460 .My City Benefit Card .Insta Wonderz -Add-On Cards .Easy ShopWoman's Advantage Debit Card .Easy Shop Gold Debit Card .Secure Plus . Customer Centre .Offers & Deals INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY .Compare Cards -Transfer & Safe -Track your Credit Card H.HDFC Bank Idea Silver Card . Get More from Your Card .Net safe .Offers & Savings .Credit Card Usage Guide .Prepaid Cards -Forex Plus Card -Kisan Card I.Easy EMI .My Rewards .HDFC Bank Idea Gold Card .

INDIAN BANKING SYSTEM 0621000460 -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-cla ss Indian Bank". They realized that only a single-minded focus on product quality a nd service excellence would help us get there. Today, they are proud to say that th ey are well on our way towards that goal. INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY

INDIAN BANKING SYSTEM 0621000460 It is extremely gratifying that their efforts towards providing customer conveni ence have been appreciated both nationally and internationally. AWARDS & ACHIEVEMENTS of HDFC BANK Business Today-Monitor Group survey One of India's "Most Innovative Companies". Financial Express-Ernst & Young Award Best Bank Award in the Private Sector category The Asian Banker Excellence in Retail Financial Services Awards Best Retail Bank in India. Asian Banker Managing Director Aditya Puri won the Leadership achievement Award for India Outlook Money & NDTV Profit Best Bank Award in the Private sector category 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 Centuri on Bank of Punjab. INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY

INDIAN BANKING SYSTEM 0621000460 The combined entity would have a nationwide network of 1,148 branches (the large st 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. Mr. Shailendra Bhandari, Managing Director and CEO, Centurion Bank of Punjab said, We are extremely pleased to receive the go ahead from our board to pursue t his opportunity. A merger between the banks provides significant synergies to the co mbined 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: · 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. · The bank should provide life time valid ATM card to all its customers. INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY

Punjab of being the first Indian bank to have b bank was nationalized in July 1969 along the bank has grown in size and stature t in India at present. From its modest beginning. The with 13 other banks. PUNJAB NATIONAL BANK ORIGIN Punjab national bank was established in National Bank (PNB) has the distinction een started solely with Indian capital. o become a front-line banking institution 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 INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY 1895 at Lahore. The company should provide a pass book to all its customers Make people understand about the various benefits of its products.INDIAN BANKING SYSTEM 0621000460 Minimum balance for savings account should be reduced from Rs 5000 to Rs 1000. Company should organize the program in the society. . so that people who are not financially strong enough can maintain their account properly. so that people will be aware about the company and different products of the bank Company should open more branches in different cities. undivided India.

has placed PNB at the 248th position. Punjab National Bank is serving over 3. Shanghai: China and in London. Among the clients of the Bank are Indian conglomerates. m edium and small industrial units. INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY . Strong correspondent banking relationship which Punjab National Bank maintains with over 200 leading international banks all over the world enhances its capabi lities to handle transactions world-wide. Bank has opened a fully fledged Branch in Kabul. The Banker . While among top 1000 world banks. financing of trade a nd international banking. Afghanistan. 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 emer ge as challengers to World s leading blue chip companies. Besides. At the same time. non-resident Indians and multinational co mpanies. agricultural finance. exporters. the bank features at 1308th position among Forbe s Global 2000 list of g lobal giants and fast growing companies. Co nsidering the importance of small scale industries bank has established 31 specialised bra nches to finance exclusively such industries. The large presence and vast resource base have helped the Bank to build strong l inks with trade and industry. Bank has set up representative offices at Almaty: Kazakhistan. the Bank has taken major initiative in the field of computer ization. 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 is a member of the SWIFT and over 150 branches of the bank are connected through its computer-based terminal at Mumbai. the leading magazine in London.5 crore customers through 4540 Offices including 421 extension counters . Keeping in tune with changing times and to provide its customers more efficient and speedy service. With its state-of-art dealing rooms and well-trained dealers . the bank offers efficient forex dealing operations in India. the bank has been conscious of its social responsibilities by financing agriculture and allied activities and small scale industries (SSI). Besides. industrial finance.INDIAN BANKING SYSTEM 0621000460 personal banking.largest amongst Nationalized Banks. bank has Rupee Drawing Arrangements wit h 15 exchange companies in the Gulf and one in Singapore.

INDIAN BANKING SYSTEM 0621000460 All the Branches of the Bank have been computerized. 365 days banking right from the PC of t he user. apart from the PNB's over 1094 ATMs and tie up arrangements w ith other Banks. VISION AND MISSION VISION To evolve and position the Bank as a world class progressive cost effective and customer friendly institution providing comprehensive financial and related serv ices. complete details of transactions. Any Where Banking" through the introducti on of Centralized Banking Solution (CBS) and over 2409 offices have already been br ought under its ambit. mobile. Bes ides. The Bank has also launched aggressively the concept of "Any Time. where the 'Maestr o' logo is displayed. Internet Banking services are available through all Branches of the Bank networked under CBS. PNB has recently introduce d Online Payment Facility for railway reservation through IRCTC Payment Gateway Project and Online Utility Bill Payment Services which allows Internet Banking a ccount holders to pay their telephone. It enables the card hol der to buy goods and services at over 99270 merchant establishments across the country. committed to excellence in serving the public and also excel lence in serving the public and also excelling in corporate values. o nline information of deposits. Internet Banking offers world class banking facilities like anytime. and statement of account. which is also an ATM card. Providing 24 hours. electricity. integrating frontiers of technology and serving various segments of society espe cially the weaker section. Another step taken by PNB in meeting the changing aspirations of its clientele i s the launch of its Debit card. anywh ere access to account. PNB also offers Internet Banking services in the country for Corporates as well as individuals. loans overdraft account etc. the card can be used to withdraw cash at more than 25000 ATMs. insurance and other bills a nytime from anywhere from their desktop. MISSION INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY .

M. 2004 & 2005 Money Outlook Award 2004 Runner up in 'Best Bank (public Sector) of the year Award' -2005 THE DIRECORS OF PUNJAB NATIONAL BANK BOARD FO DIRECTORS Dr K.S.2004 Economic Times Golden Peacock Award for Excellence in Corporate Governance 2005 by Institute of Directors National Award for Excellence in SSI Ranked 2nd for 4 consecutive years -2002.Raghuraman Executive Director Shri .catagory Shri P.Gerg Exective Director DIRECTOR Shri .Khurana Director Rep.Nayar Officer Employee Director Shri. Lending 2003.C.R.A.Prakash Agrawal Shareholder Director Shri Gautam P.Khandelwal Part-time non-official Director INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY . Chakrabarthy Chairman & Managing Director Shri K. Best IT User in Banking & Financial by NASSCOM in partnership with Services Industry .L. use latest technology aimed at custome r satisfaction and act as an effective catalyst for socio-economic development AWARDS & ACHIEVEMENTS of PUNJAB NATIONAL BANK "Best IT Team of the Year Award" One of India's "Most Innovative Companies".INDIAN BANKING SYSTEM 0621000460 To provide excellent professional services and improve its position as a leader i n the field of financial and related services. build and maintain a team of motivated and committed workforce with high work ethos.C.Mohan Lal Workmen Employee director Dr.Harsh Mahajan Share holder Director Shri.Ravneet Kaur Govt.K. of India Nominee Director Shri .J.Fonseca Reserve bank of India Nominee Director Shri .M.

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 an d reversing any bank charges that we apply due to our mistake. 4) Publicise this Code. for the products and service s we offer.INDIAN BANKING SYSTEM 0621000460 Shri Mushtaq A Antulay Part-time non-official Director 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. INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY . put it on our website and have copies available for you on request. 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. 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 transpare ncy.

WEAKNESS: . . Higher provisions deterring growth in net profits .INDIAN BANKING SYSTEM 0621000460 SWOT ANALYSIS STRENGTHS: . Higher Delinquencies . Slow-down in treasury profits . . Fine growth in fee income last year . Proactive on technology front. . . De-risked investment portfolio . . Adequate Capital . Strong growth in business . No development on insurance venture . Highest CASA among PSU . . . . . . Slower growth on international front . Good branch network . Highest NIMs compared to peers . . . .

Sharp rise in interest rates can hamper economic growth . . Ample opportunity to expand business. Its subsidiaries PNB Housing Finance & PNB Gilts are not impressive OPPORTUNITIES: . . . Entry of foreign banks . Growth in Insurance and Mutual Fund business THREATS: . as the economy is doing well.. . Expansion on international front . . . . . Regulatory amendments INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY .

ATM/DEBIT cards . 12 hours banking INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY . Downturn in Agriculture growth PRODUCTS AND SERVICES: PRODUCTS: . Depository services . . Electronic fund transfer . Locker facilities . Online tax accounting system .INDIAN BANKING SYSTEM 0621000460 . Personal banking . Home loans . About loan . RTGS/NEFT/SFMS:PNB . Offshore banking . Deposit interest rates SERVICES . Corporate banking . Merchant banking . Electronic clearing service . . Senior citizen scheme . Implementation of Basel II requires higher capital .

Undergraduate . 1. Your Age: ____________________ 2. Graduate . . . Married . . Kindly spend a few minutes of your valuable time and fill in this questionnaire. . Education Qualification . 3. I am a student of Indian Institute of Management. Business . As part of the requirements for my Post Graduation Diploma in Business Management I am required to do a research based project.INDIAN BANKING SYSTEM 0621000460 QUESTIONNAIRE Dear Sir/Madam. of Children: __________ 4. Single . Post graduate . INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY . . Marital Status. Occupation. No. Ghaziabad.

which Bank? 8. Profession .INDIAN BANKING SYSTEM 0621000460 . No . <than 2 . Service . 7. >than 8 annual household income. lack . 6. Kind of services Banks you are enjoying INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY . Between . Yes . . Do you have Credit Card? . Yes . No . (Please mention below the type of business/profession you are in incase of service please mention your organization name and designation) 5. Between . Your . Faced saving problems? . lack . . . 5 to 8 lack . If yes. 2 to 5 lack .

While saving in a Bank. .INDIAN BANKING SYSTEM 0621000460 9. Private bank . Yes . . Yes . Which Banks facility you like more? . what is your priority? 13. . No . Nationalise banks . 10. Do you have loans requirement? . Nationalise banks . INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY . Is Central Banking System beneficial for you? . 11. From where do you like to save money? . And why? 12. Private bank .

Yes . 14. . Does you use Internet Banking? . And how it will help you? Date: Signature Place: Thank You INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY . No . No .INDIAN BANKING SYSTEM 0621000460 .

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