STUDY ON FINANCIAL PRODUCTS OF PNB

1.1 OVERVIEW OF COMPANY

Punjab National Bank of India, the first Indian bank started only with Indian capital, was
nationalized in July 1969 and currently the bank has become a front-line banking institution in
India with 4525 Offices including 432 Extension Counters. The corporate office of the bank is at
New Delhi. Punjab National Bank of India has set up representative offices at Almaty
(Kazakhistan), Shanghai (China) and in London and a full fledged Branch in Kabul
(Afghanistan).
Punjab National Bank with 4497 offices and the largest nationalized bank is serving its 3.5 crore
customers with the following wide variety of banking services:

Corporate banking

Personal banking

Industrial finance

Agricultural finance

Financing of trade

International banking

Punjab National Bank has been ranked 38th amongst top 500 companies by The Economic
Times. PNB has earned 9th position among top 50 trusted brands in India.
Punjab National Bank India maintains relationship with more than 200 leading international
banks world wide. PNB India has Rupee Drawing Arrangements with 15 exchange companies in
UAE and 1 in Singapore.

HISTORY OF THE BANK

Punjab National Bank (PNB) was registered on May 19, 1894 under the Indian Companies Act
with its office in Anarkali Bazaar Lahore. The Bank is the second largest government-owned
commercial bank in India with about 4,500 branches across 764 cities. It serves over 37 million
customers. The bank has been ranked 248th biggest bank in the world by Bankers Almanac,
London. The bank's total assets for financial year 2007 were about US$60 billion. PNB has a
banking subsidiary in the UK, as well as branches in Hong Kong and Kabul, and representative
offices in Almaty, Dubai, Oslo, and Shanghai.

1895: PNB commenced its operations in Lahore. PNB has the distinction of being the
first Indian bank to have been started solely with Indian capital that has survived to the
present. (The first entirely Indian bank, the Ouch Commercial Bank, was established in
1881 in Faizabad, but failed in 1958.) PNB's founders included several leaders of the
Swadeshi movement such as Dyal Singh Majithia and Lala HarKishen Lal, [1] Lala
Lalchand, Shri Kali Prosanna Roy, Shri E.C. Jessawala, Shri Prabhu Dayal, Bakshi Jaishi
Ram, and Lala Dholan Dass. Lala Lajpat Rai was actively associated with the
management of the Bank in its early years.

1904: PNB established branches in Karachi and Peshawar.

1940: PNB absorbed Bhagwan Dass Bank, a scheduled bank located in Delhi circle.

1947: Partition of India and Pakistan at Independence. PNB lost its premises in Lahore,
but continued to operate in Pakistan.

1951: PNB acquired the 39 branches of Bharat Bank (est. 1942); Bharat Bank became
Bharat Nidhi Ltd.

1961: PNB acquired Universal Bank of India.

1963: The Government of Burma nationalized PNB's branch in Rangoon (Yangon).

September 1965: After the Indo-Pak war the government of Pakistan seized all the offices
in Pakistan of Indian banks, including PNB's head office, which may have moved to
Karachi. PNB also had one or more branches in East Pakistan (Bangladesh).

1960s: PNB amalgamated Indo Commercial Bank (est. 1933) in a rescue.

1969: The Government of India (GOI) nationalized PNB and 13 other major commercial
banks, on July 19, 1969.

1976 or 1978: PNB opened a branch in London.

1986 The Reserve Bank of India required PNB to transfer its London branch to State
Bank of India after the branch was involved in a fraud scandal.

1986: PNB acquired Hindustan Commercial Bank (est. 1943) in a rescue. The acquisition
added Hindustan's 142 branches to PNB's network.

1993: PNB acquired New Bank of India, which the GOI had nationalized in 1980.

1998: PNB set up a representative office in Almaty, Kazakhstan.

2003: PNB took over Nedungadi Bank, the oldest private sector bank in Kerala. Rao
Bahadur T.M. Appu Nedungadi, author of Kundalatha, one of the earliest novels in
Malayalam, had established the bank in 1899. It was incorporated in 1913, and in 1965
had acquired selected assets and deposits of the Coimbatore National Bank. At the time
of the merger with PNB, Nedungadi Bank's shares had zero value, with the result that its
shareholders received no payment for their shares.
PNB also opened a representative office in London.

2004: PNB established a branch in Kabul, Afghanistan.PNB also opened a representative

office in Shanghai.

PNB established an alliance with Everest Bank in Nepal that permits migrants to transfer
funds easily between India and Everest Bank's 12 branches in Nepal.

2005: PNB opened a representative office in Dubai.

2007: PNB established PNBIL - Punjab National Bank (International) - in the UK, with
two offices, one in London, and one in South Hall. Since then it has opened a third
branch in Leicester, and is planning a fourth in Birmingham. Gatin Gupta became
Chairmen of Punjab National Bank.

2008: PNB opened a branch in Hong Kong.

2009: PNB opened a representative office in Oslo, Norway.

1.1.2 ACHIEVEMENTS

Punjab National Bank announced its Q1FY2010 results on 29 July 2009, delivering
62% y-o-y growth in net profits to Rs832 crore (Rs512cr), substantially ahead of
expectations on account of large treasury gains, apart from healthy operating
performance.

While the banks deposit growth was reasonably robust at 4.4% sequentially and
26.5% y-o-y, unlike the peers its growth in advances also remained strong at 38% yo-y.

In spite of being at the forefront of PLR cuts, the bank posted a healthy growth in Net
Interest Income (NII) of 29% y-o-y.

Other Income surged 113% y-o-y, driven by strong treasury gains of Rs355 crore
during the quarter in line with industry trends, even as Fee income was also robust at
45% y-o-y, on the back of strong balance sheet growth.

Operating expenses were higher than expected on account of Rs150 crore of

provisions for imminent wage hikes.

Gross and Net NPA ratios remained stable sequentially at 1.8% and 0.2%, with the
bank not adopting the guidelines of treating floating provisions as part of tier 2 capital
instead of adjusting against NPAs on express permission from the RBI.

2.6 ORGANIZATIONAL STRUCTURE

HEAD OFFICE
7, BHIKAJI CAMA
PLACE,
NEWDELHI-66

ZONAL OFFICES
(25)

REGIONAL
OFFICES (48)

BRANCHS (4525)

PRODUCTS AND SERVICES

Savings Fund Account - Total Freedom Salary Account, PNB Prudent Sweep, PNB Vidyarthi
SF Account, PNB Mitra SF
Account Current Account - PNB Vaibhav, PNB Gaurav, PNB Smart Roamer
Fixed Deposit Schemes - Spectrum Fixed Deposit Scheme, Anupam Account, Mahabachat
Schemes, Multi Benefit Deposit
Scheme Credit Schemes - Flexible Housing Loan, Car Finance, Personal Loan, Credit Cards
Social Banking - Mahila Udyam Nidhi Scheme, Krishi Card, PNB Farmers Welfare Trust
Corporate Banking - Gold Card scheme for exporters, EXIM finance
Business Sector - PNB Karigar credit card, PNB Kushal Udhami, PNB Pragati Udhami, PNB
Vikas Udhami
Apart from these, and the PNB also offers locker facilities, senior citizens schemes, PPF schemes
and various E-services.

This bank in India offers various financial services in numerous segments. Some of them are
mentioned below along with their individual products :

Agricultural Banking
Farmers Welfare Central Sector Schemes
Credit Schemes
Trust
P. N. B. Krishi

Corporate Banking
Cash Management
Exim Finance
Exporters Gold Card Scheme
Loan backed by Future Lease Rentals

Financial Services
Life Insurance
Merchant Banking
Mutual Fund
Non-life Insurance
Online Trading
Real Estate Investments
Retirement Planning Scheme
Tax Planning Scheme

International or NRI Banking

Gold Loan Scheme
F. C. N. R. (B) Account
Foreign Inward Transfers
Letter of Guarantee
Non-resident Deposit Schemes (Ordinary, external and foreign currency)
N. R. E. Account
N. R. O. Account
P. N. B. N. R. I. Remit Scheme
R. F. C. Account

Micro, Small and Medium Enterprises (MSME) Banking

Artisan Credit Card Scheme
Garrage Yogana
Gramin Chikitsak Scheme
Kushal Udyami
Laghu Udyami Credit Card
Pragati Udyami Scheme
Sahayog Scheme
Sarthak Udyami Scheme
Vikas Udyami Scheme

Personal Banking
T. M. Card

Balika Shiksha
Bal Vikas
Current Account (Smart banking)
Combo Deposit Scheme
Credit Card (Global)
Debit Card
Dugna Deposit Scheme

Fixed Deposits (For 555 days, 777 days, 1000 days, 1111 days and victims of road
accidents)
Loan (Car, education, housing, personal, professional, two wheeler, against property
mortgage and for pensioners)
Mitra S. F. Account
Pensioners Overdraft Facility Scheme
Prudent Sweep
Rakshak Scheme
Recurring Deposit
Salary Account (Total freedom)
Shikshak Overdraft Scheme
Shikshak Sweep Scheme
Term Deposits
Vidyarthi S. F. Account
World Travel Card

Social Banking
Special Schemes (For women and weaker section)

Other Online Services

A. S. B. A. (Application Supported by Blocked Amount)
Bill Payments
E-Tax Payments
Internet Banking
Mobile Banking
Money Transfer
P. N. B. Credit Card (Global)
Security Alerts
Share Trading

PNB Home Loan

Punjab national bank home loan offers complete home loan solutions at competitive rates. These
home loan solutions of PNB are structured as per the needs of the Indian customers.
Punjab National Bank (PNB), the leading Indian public sector bank has been a pioneer in
facilitating home loans to the burgeoning middle class Indians. Punjab national bank home loan
solutions are tailor made to suit the needs of the Indians.
The home loans offered by Punjab National Bank are easy to avail and are offered at competitive
rate of interest. Further, these Home Loan Solutions of PNB offer easy repayment schemes over
predetermined repayment tenure, as fixed during the agreement. Furthermore, these home loans
of PNB come with life insurance cover for the buyer. Security by a way of mortgage is being

charged amounting to 125% of the loan applied for.

Punjab national bank home loan are offered for the following purposes:
Construction or purchase of residential flat or house.
Repairing, extending, renovating and even modification of existing residential flat or
house.
Some features of Punjab National Bank home loan
Up to 75% of the cost of construction of house or purchase of flat or house is being
provided.
Up to 75% or ` 20 lakh of the cost of repairing, extending, renovating and modification of
flat or house is being provided.
Up to ` 20 lakh is being facilitated for purchase of land meant for the purpose of
construction of house.
Up to ` 20 lakh is being facilitated for the purpose of furnishing.

Punjab National Bank IPO

Punjab National Bank, the leading public sector bank of India launched its second Initial
Public Offering in 2005. After the success of the first IPO launched in 2002, Punjab National
Bank. The second Punjab national bank IPO was opened on 7th March 2005 and closed on
11th March 2005. The price band of Punjab national bank IPO was fixed at ` 350 - ` 390 per
share.
This price band of Punjab national bank IPO was fixed through a 100% book building
process. The issue offered 80,000,000 equity shares of Punjab National Bank of ` 10/- each
for cash. Further, 8,000,000 equity shares of ` 10/ each, at the issue price were reserved for
the existing share holders. The upper end of the price band of Punjab national bank IPO
targeted to raise ` 3,120 crores and the lower end targeted to raise ` 2,800 crores..
-

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 services.

Integrating frontiers of technology and serving various segments of society especially

weaker section.

Commited to excellence in serving the public and also excelling in corporate values

Mission

To provide excellent professional services and improve its position as a leader in

financial and related services.

Build and maintain a team of motivated workforce with high work ethos.

Use latest technology aimed at customer satisfaction and act as an effective catalyst
for socio economic development.

S W O T ANALYSIS
Strength
Weakness
Opportunities
Threats
Lets analyze SWOT in order to know as to where the company stands
2.7 SWOT ANALYSIS
STRENGTH
Wide network
Large number of customers
Fast adaptability to technology
Brand image

WEAKNESS
Casual behaviour

 Corruption and red tapism

Slow decision making due to large hierarchy
High gross NPA

OPPORTUNITIES
Home to home banking services
Diversification towards other fields
Globalization

THREATS
Stiff competition from SBI and other private players

WAYS FOR MAINTAINING CUSTOMERS RELATIONS BY PNB

The ability of the banking industry to achieve the socio-economic objectives and in the process
bringing more and more customers into its fold will ultimately depend on the satisfaction of the
customers. We have a strong belief that a satisfied customer is the foremost factor in developing
our business.
A need was felt by us at Punjab National Bank that in order to become more customers friendly
the Bank should come out with Charter of its services for the customers. Citizens' Charter
concept was considered as a base instrument to fill this need and accordingly this document was
prepared. This document was made in consultation with the users and highlights our Bank's
commitments towards the customer satisfaction, thus ensuring accountability and responsibility
amongst its officials and staff. This Code for customers not only explains our commitment and
responsibilities along with the redressed methods but also specifies the obligation on the part of
customers for healthy practices in Customer-Banker relationships.
This is not a legal document creating rights and obligations. The Code has been prepared to
promote fair banking practices and to give information in respect of various activities relating to
customer service.
We wish to acknowledge the initiative taken by the Ministry of Finance, Government of India
and Ministry of Administrative Reforms and Public Grievances for encouraging us to bring out
this Code.

We maintain constant consultations with our clientele through various Seminars, Customer
Meets, etc. to evaluate improve and widen the range of service to customer. However, all our
customers are requested to keep us informed of their experiences about the various services
rendered by the Bank and feel free to comment on this Code. We intend to bring it out in many
Regional Languages in subsequent years.

COMMON PRACTICES FOLLOWED BY PNB BRANCHES

Display business hours.
Render courteous services.
Attend to all customers present in the banking hall at the close of business hours.
Provide separate 'Enquiry' or 'May I help you' counter at large branches.
Offer nomination facility to all deposit accounts (i.e. account opened in individual capacity)
and all safe deposit locker hirers (i.e. individual hirers).
Display interest rates for various deposit schemes from time to time.
Notify change in interest rates on advances.
Provide details of various deposit schemes/services of the Bank.
Issue Demand Drafts, Pay Orders, etc.
Display Time-Norms for various banking transactions.
Pay interest for delayed credit of outstation cheques, as advised by Reserve Bank of India
(RBI) from time to time.

 Accord immediate credit in respect of outstation and local cheques upto a specified limit
subject to certain conditions, as advised by RBI from time to time.
Provide complaint/suggestion box in the branch premises.
Display address of Regional/Zonal and Central Offices as well as Nodal Officer dealing with
customer grievances/complaints.