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The first banks were probably the religious temples of the ancient world, and were
probably established sometime during the 3rd millennium B.C. Banks probably predated the
invention of money. Deposits initially consisted of grain and later other goods including cattle,
agricultural implements, and eventually precious metals such as gold, in the form of easy-to-
carry compressed plates. Temples and palaces were the safest places to store gold as they were
constantly attended and well built. As sacred places, temples presented an extra deterrent to
would-be thieves.

There are extant records of loans from the 18th century BC in Babylon that were made by
temple priest’s monks to merchants. By the time of Hammurabi's Code, banking was well
enough developed to justify the promulgation of laws governing banking operations.

Ancient Greece holds further evidence of banking. Greek temples, as well as private and
civic entities, conducted financial transactions such as loans, deposits, currency exchange, and
validation of coinage. There is evidence too of credit, whereby in return for a payment from a
client, a moneylender in one Greek port would write a credit note for the client who could "cash"
the note in another city, saving the client the danger of carting coinage with him on his journey.

Pythius, who operated as a merchant banker throughout Asia Minor at the beginning of
the 5th century B.C., is the first individual banker of whom we have records. Many of the early
bankers in Greek city-states were “metics” or foreign residents. Around 371 B.C., Pasion, a
slave, became the wealthiest and most famous Greek banker, gaining his freedom and Athenian
citizenship in the process.

The fourth century B.C. saw increased use of credit-based banking in the Mediterranean
world. In Egypt, from early times, grain had been used as a form of money in addition to
precious metals, and state granaries functioned as banks.

When Egypt fell under the rule of a Greek dynasty, the Ptolemies (330-323 B.C.), the
numerous scattered government granaries were transformed into a network of grain banks,
centralized in Alexandria where the main accounts from all the state granary banks were

recorded. This banking network functioned as a trade credit system in which payments were
effected by transfer from one account to another without money passing.

In the late third century B.C., the barren Aegean island of Delos, known for its
magnificent harbor and famous temple of Apollo, became a prominent banking center. As in
Egypt, cash transactions were replaced by real credit receipts and payments were made based on
simple instructions with accounts kept for each client. With the defeat of its main rivals,
Carthage and Corinth, by the Romans, the importance of Delos increased. Consequently it was
natural that the bank of Delos should become the model most closely imitated by the banks of

Ancient Rome perfected the administrative aspect of banking and saw greater regulation
of financial institutions and financial practices. Charging interest on loans and paying interest on
deposits became more highly developed and competitive. The development of Roman banks was
limited, however, by the Roman preference for cash transactions. During the reign of the Roman
emperor Gallienus (260-268 CE), there was a temporary breakdown of the Roman banking
system after the banks rejected the flakes of copper produced by his mints. With the ascent of
Christianity, banking became subject to additional restrictions, as the charging of interest was
seen as immoral. After the fall of Rome, banking was abandoned in Western Europe and did not
revive until the time of the crusades. Jews took a different view of the matter The Torah and later
sections of the Hebrew Bible criticize interest-taking, but interpretations of the Biblical
prohibition vary. One common understanding is that Jews are forbidden to charge interest upon
loans made to other Jews, but allowed to charge interest on transactions with non-Jews, or


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

The drastic development taken place during the first 25 years since independence was
Nationalization of many private banks. With this, the central government became major policy
maker for these nationalized banks

With economic liberalization measures many private and foreign banking companies were
allowed to operate in the country. Favourable economic climate and a variety of other factors
such as demand for wide range of financial products from various sections of the society led to
mutually beneficial growth to the banking sector and economic growth process. This was
coincided by technology development in the banking operations. Today most of the Indian cities
have networked banking facility as well as Internet banking facility. A customer is empowered to
operate his account from any part of the country. UTI Bank, ICICI, HDFC Bank and Bank of
Punjab are the main winners of the race.


Banking in India originated in the first decade of 18th century with The General Bank of
India coming into existence in 1786. This was followed by Bank of Hindustan. Both these banks
are now defunct. The oldest bank in existence in India is the State Bank of India being
established as "The Bank of Bengal" in Calcutta in June 1806. A couple of decades later, foreign
banks like Credit Lyonnais started their Calcutta operations in the 1850s. At that point of time,
Calcutta was the most active trading port, mainly due to the trade of the British Empire, and due
to which banking activity took roots there and prospered. The first fully Indian owned bank was
the Allahabad Bank, which was established in 1865.

By the 1900s, the market expanded with the establishment of banks such as Punjab
National Bank, in 1895 in Lahore and Bank of India, in 1906, in Mumbai - both of which were
founded under private ownership. The Reserve Bank of India formally took on the responsibility
of regulating the Indian banking sector from 1935. After India's independence in 1947, the
Reserve Bank was nationalized and given broader powers.


At the end of late-18th century, there were hardly any banks in India in the modern sense
of the term. At the time of the American Civil War, a void was created as the supply of cotton to
Lancashire stopped from the Americas. Some banks were opened at that time which functioned
as entities to finance industry, including speculative trades in cotton. With large exposure to
speculative ventures, most of the banks opened in India during that period could not survive and
failed. The depositors lost money and lost interest in keeping deposits with banks. Subsequently,
banking in India remained the exclusive domain of Europeans for next several decades until the
beginning of the 20th century. At that time there were very small banks operated by Indians, and
most of them were owned and operated by particular communities. The banking in India was
controlled and dominated by the presidency banks, namely, the Bank of Bombay, the Bank of
Bengal, and the Bank of Madras


The years of the First World War were turbulent, and it took toll of At least 94 banks in
India failed during the years 1913 to 1918 as indicated in the following table:

Table showing failed banks in India during 1913 to 1918

Number of
Authorised capital Paid-up Capital
Years banks
(Rs. Lakhs) (Rs. Lakhs)
that failed

1913 12 274 35

1914 42 710 109

1915 11 56 5

1916 13 231 4

1917 9 76 25

1918 7 209 1

Table no: 1 source: Wikipedia


• In 1948, the Reserve Bank of India, India's central banking authority, was nationalized,
and it became an institution owned by the Government of India.
• In 1949, the Banking Regulation Act was enacted which empowered the Reserve Bank of
India (RBI) "to regulate, control, and inspect the banks in India."
• The Banking Regulation Act also provided that no new bank or branch of an existing
bank may be opened without a licence from the RBI, and no two banks could have
common directors.


By the 1960s, the Indian banking industry has become an important tool to facilitate the
development of the Indian economy. Indira Gandhi, the-then Prime Minister of India expressed
the intention of the GOI in the annual conference of the All India Congress Meeting in a paper
entitled "Stray thoughts on Bank Nationalisation." The paper was received with positive
enthusiasm. Thereafter, her move was swift and sudden, and the GOI issued an ordinance and
nationalised the 14 largest commercial banks with effect from the midnight of July 19, 1969.


The new policy shook the Banking sector in India completely. Bankers, till this time,
were used to the 4-6-4 method (Borrow at 4%; Lend at 6%; Go home at 4) of functioning.

In the early 1990s the then Narsimha Rao government embarked on a policy of
liberalisation and gave licences to a small number of private banks, which came to be known as
New Generation tech-savvy banks, which included banks such as Global Trust Bank (the first of
such new generation banks to be set up)which later amalgamated with Oriental Bank of
Commerce,UTI Bank(now re-named as Axis Bank), ICICI Bank and HDFC Bank..


Currently, India has 88 scheduled commercial banks (SCBs) - 28 public sector banks
(that is with the Government of India holding a stake), 29 private banks (these do not have
government stake; they may be publicly listed and traded on stock exchanges) and 31 foreign
banks. They have a combined network of over 53,000 branches and 17,000 ATMs. According to
a report by ICRA Limited, a rating agency, the public sector banks hold over 75 percent of total
assets of the banking industry, with the private and foreign banks holding 18.2% and 6.5%


Several number of players like Andhra Bank, State Bank of Mysore, Allahabad Bank, Vijaya
Bank, Punjab National Bank, HDFC Bank, UTI Bank, ICICI Bank, Kotak Mahindra Bank,
Centurion Bank of Punjab, Citibank, Standard, HSBC, ABN AMRO and American Express



Punjab national bank was established in 1895 at Lahore, undivided India, Punjab
National Bank (PNB) has the distinction of being the first Indian bank to have been started solely
with Indian capital. The bank was nationalised in July 1969 along with 13 other banks. From its
modest beginning, the bank has grown in size and stature to become a front-line banking
institution in India at present.


With its presence virtually in all the important centres of the country, Punjab National Bank
offers a wide variety of banking services which include corporate and personal banking,
industrial finance, agricultural finance, financing of trade and international banking. Among the
clients of the Bank are Indian conglomerates, medium and small industrial units, exporters, non-
resident Indians and multinational companies. The large presence and vast resource base have
helped the Bank to build strong links with trade and industry.

Punjab National Bank is serving over 3.5 crore customers through 4540 Offices including
421 extension counters - largest amongst Nationalized Banks.

Punjab National Bank with 112 year tradition of sound and prudent banking is one among
300 global companies and seven Indian companies which are expected to emerge as challengers
to World’s leading blue chip companies. While among top 1000 world banks, “The Banker”, the
leading magazine in London, has placed PNB at the 248th position, the bank features at 1308th
position among Forbe’s Global 2000 list of global giants and fast growing companies.

At the same time, the bank has been conscious of its social responsibilities by financing
agriculture and allied activities and small scale industries (SSI). Considering the importance of
small scale industries bank has established 31 specialised branches to finance exclusively such

Strong correspondent banking relationship which Punjab National Bank maintains with
over 200 leading international banks all over the world enhances its capabilities to handle
transactions world-wide. Besides, bank has Rupee Drawing Arrangements with 15 exchange
companies in the Gulf and one in Singapore. Bank is a member of the SWIFT and over 150
branches of the bank are connected through its computer-based terminal at Mumbai. With its
state-of-art dealing rooms and well-trained dealers, the bank offers efficient forex dealing
operations in India.

The bank has been focussing on expanding its operations outside India and has identified
some of the emerging economies which offer large business potential. Bank has set up
representative offices at Almaty: Kazakhistan, Shanghai: China and in London. Besides, Bank
has opened a fully fledged Branch in Kabul, Afghanistan.

Keeping in tune with changing times and to provide its customers more efficient and speedy
service, the Bank has taken major initiative in the field of computerization. All the Branches of
the Bank have been computerized. The Bank has also launched aggressively the concept of "Any
Time, Any Where Banking" through the introduction of Centralized Banking Solution (CBS) and
over 2409 offices have already been brought under its ambit.

PNB also offers Internet Banking services in the country for Corporates as well as
individuals. Internet Banking services are available through all Branches of the Bank networked
under CBS. Providing 24 hours, 365 days banking right from the PC of the user, Internet
Banking offers world class banking facilities like anytime, anywhere access to account, complete
details of transactions, and statement of account, online information of deposits, loans overdraft
account etc. PNB has recently introduced Online Payment Facility for railway reservation
through IRCTC Payment Gateway Project and Online Utility Bill Payment Services which
allows Internet Banking account holders to pay their telephone, mobile, electricity, insurance and
other bills anytime from anywhere from their desktop.

Another step taken by PNB in meeting the changing aspirations of its clientele is the launch
of its Debit card, which is also an ATM card. It enables the card holder to buy goods and
services at over 99270 merchant establishments across the country. Besides, the card can be used

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



“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 the weaker section; committed
to excellence in serving the public and also excellence in serving the public and also excelling in
corporate values.”


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


"Best IT Team of the Year Award" : at the IDRBT Banking Technology awards for the
year 2005-06.

SKOTCH Challenger Award : for Change Management for the year 2005-06

Best IT User in Banking & Financial Services Industry – 2004 : NASSCOM in partnership
with Economic Times

Golden Peacock Award :for Excellence in Corporate Governance - 2005 by

Institute of Directors
FICCI's Rural Development Award for Excellence in Rural Development – 2005

Skotch Challenger Award for Exemplary use of Technology: for becoming a pioneer in
Public Banks - 2005
Golden Peacock National Training - 2004 & 2005 by Institute of Directors
National Award for Excellence in SSI Lending Ranked 2nd for 4 consecutive years - 2002,
2003, 2004 & 2005
BankingTechnologyAwards 2004 Jointly Adjudged by IBA, Finacle & TFCI
Runner up in 'Best IT Team of the Year
Award 2005'

MoneyOutlookAward2004 Runner up in 'Best Bank (public Sector) of

the year Award' -2005
Niryat Bandhu Gold Trophy for excellence in export perforamnce for 3 consecutive
years2001,2002&2003by Federation of Indian Exporters
Organization (FIEO)
MoneyOutlookAward – 2004 Runner up in 'Best Bank (public Sector) of the year Award'
21st Amongst Top 500 Companies by the leading Financial Daily the Economic Times,
June 2005
9th amongst India's Top 50 Most Trusted Service Brands A.C Nielson Survey, the
Economic Times Dec 2004

3rdRankamongs banks Sector in India 323rd Rank in the World

The Bankers' Almanac, January 2006
368 amongst Top 1000 Global Banks the Banker, London July 2005


Dr K.C. Chakrabarthy Chairman & Managing Director

Shri K.Raghuraman Executive Director
Shri .J.M.Gerg Exective Director

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



We promise to:

1) Act fairly and reasonably in all our dealings with you by:

• meeting the commitments and standards in this Code, for the products and services we offer,
and in the procedures and practices our staff follow

• making sure our products and services meet relevant laws and regulations

• our dealings with you will rest on ethical principles of integrity and transparency.

2) Help you to understand how our financial products and services work by:

• giving you information about them in plain Hindi and/or English and/or the local language

• explaining their financial implications and

• helping you chooses the one that meets your needs.

3) Deal quickly and sympathetically with things that go wrong by:

• correcting mistakes quickly

• handling your complaints quickly

• telling you how to take your complaint forward if you are still not satisfied and

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• reversing any bank charges that we apply due to our mistake.

4) Publicise this Code, put it on our website and have copies available for you on request.

 Strong growth in business
 Good branch network
 Highest CASA among PSU
 Highest NIMs compared to peers
 Fine growth in fee income last year
 De-risked investment portfolio
 Adequate Capital
 Proactive on technology front.
 Higher Delinquencies
 Higher provisions deterring growth in net profits
 No development on insurance venture
 Slower growth on international front
 Slow-down in treasury profits
 Its subsidiaries PNB Housing Finance & PNB Gilts are not impressive
 Expansion on international front
 Ample opportunity to expand business, as the economy is doing well.
 Growth in Insurance and Mutual Fund business
 Entry of foreign banks
 Sharp rise in interest rates can hamper economic growth
 Regulatory amendments
 Implementation of Basel II requires higher capital
 Downturn in Agriculture growth

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 Personal banking
 Corporate banking
 Home loans
 About loan
 ATM/DEBIT cards
 Deposit interest rates
 Locker facilities
 Depository services
 Senior citizen scheme
 Merchant banking
 Online tax accounting system
 Electronic fund transfer
 Electronic clearing service
 Offshore banking
 12 hours banking


1.Personal banking loans

Purpose: To meet all types of personal needs
i) All permanent Defence Personnel including officials of Military Station Headquarters, BSF,

ii) Confirmed/ permanent employees of Central/ State Govt/ PSUs and all reputed companies/
Institutions, who are drawing their salary through accounts maintained with our branches.

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Employees of above categories under ‘check-off facility’ OR having minimum annual income of
Rs.3.00 lac.

iii)Professionally qualified Doctors viz. MBBS, BDS & above having annual income of Rs.3.00
lac & above.

Nature and Amount of Loan:

Term Loan/ Overdraft – Minimum amount of loan will be Rs.10,000/- and maximum
amountof loan Rs.3,00,000/- or 30 times monthly net salary, whichever is lower, depending upon
the repaying capacity

Margin NIL

Security Suitable guarantee acceptable to the Bank.

Rate of Interest : 13.00% p.a. For others having annual income of Minimum Rs.3.00 lac :
14.00% p.a.


60 Equated Monthly Instalments (EMIs) OR remaining period of service, whichever is

earlier. Instalment to commence one month after disbursement of loan.

However, loan allowed to Army Jawans, other permanent employees of Military Station
Headquarters and Para Military Personnel shall be Repayable in maximum 36 Equated Monthly
Instalments or remaining period of stay at the particular posting, whichever is lower.

I)Loan Against Future Lease Rentals

PNB has introduced a new scheme for property owners having their property situated in
Metro/Urban/ Semi Urban/rural centres and who have let out such properties.

Property Owners having their properties situated in metro, urban, semi-urban and rural
areas who have leased out such properties to the following:

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(i) Public Sector Undertakings / Govt. / Semi / State Govt. & reputed corporates, Banks,
Financial Institutions, Insurance Companies and Multinational Companies.

(ii) Reputed private schools/colleges (approved by/affiliated to State Board/University/

AICTE/ any other govt. body).

(iii) Reputed private hospitals/ nursing homes

Security: Assignment of lease rentals.

Equitable mortgage of the leased property or any other immovable property:-

* In case of loans having repayment period upto 5 years, the amount of loan should not
exceed the value of the property mortgaged.
* In case of loans having repayment period beyond 5 years, the amount of loan should
not exceed 75% of the value of the property mortgaged.
In case of Company - Personal Guarantee of promoter directors.

Rate of interest

Less than 3 years - BPLR minus 0.25% [Minimum 13.50%]

3 years and above - BPLR minus 0.25% + 0.50% (Term Premia) [Minimum 13.50%]


Services offered to Exporters

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Post-shipment finance in foreign currency and Indian rupees

Handling export bills on collection basis

Outward remittances for purposes as permitted under Exchange Control guidelines

Inward remittances including advance payments

Quoting of competitive rates for transactions

Maintenance of Exchange Earners Foreign Currency (EEFC) accounts

Assistance in obtaining credit reports on overseas parties

Forfeiting for medium term export receivables

Services offered to Importers

Establishment of Import Letters of Credit covering import into India and handling of bills under
Letter of Credit

Handling of import bills on collection basis

Remittance of advance payment against imports

Offering utilisation of PCFC ( pre-shipment credit in foreign currency) for imports

Credit reports on overseas suppliers

Exchange Earners Foreign Currency (EEFC) Deposits Scheme

The Exchange Earners Foreign Currency (EEFC) Deposits Scheme was started by RBI in
the year 1992 with the introduction of Liberalised Exchange Rate Management System. Under
this scheme, the recipient of inward remittances, exporters and other eligible bodies are allowed
to keep a portion of their inward remittances / export proceeds in foreign currency with the
banks in India which can later be utilised for permissible purposes.

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PNB sets up connectivity with the Customs Deptt. for the benefit of exporters/importers

To provide efficient service to our importer/exporter clients, PNB has set up connectivity
with the Customs Department to facilitate payment of custom duty and receipt of duty draw
back by the importer/exporter clients through the electronic media. Under this system of
Electronic Data Interchange (EDI), Custom Authorities process the shipping bills and also effect
on line payment of duty draw back for exporters. Further, they undertake processing of Bill of
Entry and deposit of custom duty for imports. This is a pilot project in the country successfully
implemented at Indira Gandhi International Airport, Custom House branch of PNB. This has
now been replicated at PNB's extension counters at Inland Container Depot, Tughlakabad, Delhi
and Patpar Ganj, Delhi.

III. Cash Management Services

Punjab National Bank had taken a major initiative for managing the funds of Corporates.
The services are essentially meant for pooling your funds spread across the country at a place of
your choice with the least time delay, if not instantaneously in many cases. We shall collect
your receivables from your representative or your business associates at more than 2700 CBS
branches spread across 935 centers all over the country and pool the same at the branch
specified by you. The services can be custom designed to cater to your specific needs.
The Scheme offers the following options for you:
Option I: Instant credit through our CMS to your account, pending clearance of funds.
Option II: Credit to your account through our CMS after realizations.
Option III: You can choose Option I or II according to your client profile and indicate to us
A host of Daily/weekly/monthly reports and special report including center-wise reports
generated at our HUB at Delhi can be sent you through electronic media as per requirements of
your funds Managers.
(Charges in paisa/Rs. 1000)

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For Metro locations
25 paisa
(metropolitan cities)
For Non-metro locations
50 paisa
(state capitals & District HQs)
For Remote locations
90 paisa
(all other locations)
In case your turnover crosses certain assured level we offer attractive discounts on the above
charges ranging from 20% to over 76%. For example, if your annual turnover of collection
exceeds Rs. 250 crores at Chennai (a metro location), the charges shall be just 06 paisa per


Punjab National Bank has formulated Gold Card Scheme for its exporter clients based on
the scheme drawn up by Reserve Bank of India. The scheme proposes to ensure easy
availability of export credit on best terms to credit worthy exporters with good track record. The
card to be offered by PNB will be known as ‘PNB Expo Gold Card’.


PNB reaches out to you with fast, friendly and most convenient home loans for:

Construction or purchase of house/ flat.

Purchase of house/ flat on First Power of Attorney basis from the original allottee.

Carrying out repairs/ renovations/ additions/ alterations to existing house/ flat.

Special Feature- To cover the loan outstanding, life Insurance cover is also
available on payment of one time premium which can also be financed by the Bank.
Extent of loan

For construction/purchase of house/ flat:- 75% of the cost of construction of house or purchase
of house/ flat. For carrying out repairs/ renovation/ additions/ alterations: - 75% of the estimated

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cost subject to maximum of Rs. 20lacs. Loan upto Rs.20 Lacs for purchase of Land/Plot.
Loan is available maximum upto Rs.2 Lacs for furnishing


Own a vehicle with the friendliest and most convenient car loan. Either you can purchase a
new Car/ Van/ Jeep or raise loan to purchase old vehicles that are not older than 3 years.
Finance will be provided for purchase of vehicle of indigenous/ foreign makes


Share the convenience of PNB Debit card with your loved ones .Simply gift them add-on
card. PNB Customers of CBS branches can get two add-on cards alongwith his own Debit card
for free.The person you are gifting the card to does not necessarily has to be an account holder
with PNB.

The add-on card can be issued in the name of spouse, dependent parents,and dependent
children not below 18 years.The add-on cardholders like the main cardholder will also be
covered for accidental death insurance of Rs. 1 lac subject to certain terms and conditions. The
tranasactions done by add-on cardholders will automatically get debited to the account of the
primary cardholder who shall be responsible for all the transactions made by Add On card



For the safety of your valuables, PNB offers Safe Deposit Vaults (Lockers) facilities at a large
number of branches. there is a nominal annual charge, which depends on the size of the locker
and the centre where the branch is located


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PNB offers depository services to its customers at 139 branches spread across 60 centres all
over the country, through Depository Participant (DP) located at Sansad Marg, New Delhi.

Basic Services

• Account Maintenance
• Dematerialisation – Physical to Electronic
• Rematerialisation – Electronic to Physical
• Settlement of trades through market transfers
• Off-market transfers
• Inter-depository transfers
• Nomination / transmission

Value Added Services

• Pledge
• Hypothecation of securities
• Automatic delivery of securities to clearing corporations
• Distribution of cash and non-cash corporate benefits (Bonus, Rights, IPOs etc.)


From long time remittance of funds within the banks i.e. from one branch to another was
completed through transfer payment orders, telegraphic transfers or by drafts, which takes
considerable time to reach destination.

To avoid this delay, Punjab National Bank introduced a new system called " The Inter-Bank
Electronic Fund Transfer System" which may be referred as "EFT System" under the guidance
of Reserve Bank Of India.

In this system remittance can easily be made from any of the branches of participating
Bank at designated centre to any other branch of the same or any other participating bank at the

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same or any other designated centre which would facilitate remittance to reach destination on
the very next working day itself through the system of computer and communication network.
This scheme is currently operational in Metros only; other centres will be added shortly. Limit
for individual transactions has been increased from current limit of Rs. 5 lac to Rs. 2 crores


What is ECS?

ECS is a method of quick movement of funds in a paperless mode introduced by Reserve

Bank of India.

There are two types of ECS i.e. ECS (Credit) and ECS (Debit).

Punjab National Bank is properly equipped to provide ECS (Credit/Debit Clearing) facility
for the benefit of the customers.

Main Features of ECS (Credit)

This is a method of payment whereby any institution which has to make large number of
payments (such as interest/dividend/salary etc), can directly deposit the amount electronically
into the bank accounts of the beneficiaries without issuing any paper instruments. ECS (Credit)
envisages single debit and multiple credits.


Challan Status Inquiry

The Income-tax Department is introducing from June 1, 2004 a new system relating to
payment of taxes, called Online Tax accounting System (OLTAS). The taxpayer friendly
features of OLTAS include a single copy challan - cum - acknowledgment form instead of the
present four-copy challan. Every challan will have a unique identification number called
Challan Identification Number (CIN). This consists of BSR code (Bank branch code), Challan

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Tender Date (cash / cheque deposit date) and Challan Serial Number. With the help of CIN,
every payment will be uniquely identified enabling online transmission of details of tax
payments by banks to the Income Tax department.


List of RTGC branches

An RTGS (Real Time Gross Settlement) payment system is one in which payment
instructions between banks are processed and settled individually as per following time

• Customer transactions can be sent through the RTGS System at any time from the start
of the RTGS Business Day (9 am) till - 3 p.m. on weekdays and 12.00 noon on

INTERBANK TRANSACTIONS can be sent through the RTGS System at any time from the
start of the RTGS Business Day (9 am) till - 5 p.m. on weekdays and 2 p.m. on Saturdays.

The attraction of the RTGS systems is that payee banks and the customers receive funds
with certainty, or say finality, during the day, enabling them to use the funds immediately
without exposing themselves to risk.

6.Senior Citizens Scheme-2004

“Depositor” means an individual who has attained the age of 60 years or above on the date of
opening of an account under the provisions of these rules, and by whom, or on whose behalf,
money is deposited in an account under these rules, i) who has attained the age of 55 years or
more but less then 60 years, and who has retired on superannuation or otherwise on the date of
opening of an account under these rules, subject to the condition that the account is opened by
such individual with in one month of the date of receipt of the retirement benefits

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7.Deposits and withdrawals :

There shall be only one deposit in the account in multiple of one thousand rupees not
exceeding rupees fifteen lakh. In case who retired between 55 years or more but less then 60
years, the deposit by the depositor shall be restricted to the retirement benefits received by them
or Rupees Fifteen Lac, which ever is lower. No withdrawal shall be permitted under these rules
before the expiry of a period of five years from the date of opening of an account.


(Reviewed Financial Results for the First Half of FY 2007-08)

The Board of directors of Punjab National Bank approved the bank’s financial results for
the first half of FY 2007-08. The bank has taken several steps to meet the aspirations of rural
masses, particularly in Indo Gangetic area of the country, where the bank has major presence.

1)Financial Results

1. Profit & Loss Account

• Net profit for the first half of the current financial year 2007-08 amounted to Rs 963.55 Cr,
compared to Rs 872.51 Cr during the first half of FY 2006-07, registering a y-o-y growth of

• Operating Profit of the bank (excluding loss incurred on transfer of securities to HTM
portfolio) during the half year ended September 2007 increased to Rs 1788 Cr, compared to Rs
1778 Cr during the half year ended September 2006. However, on accounting for the loss of Rs

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497.74 Cr incurred on transfer of securities to HTM portfolio, the Operating Profit of the bank
amounted to Rs 1290 Cr during the first half year ended September 2007. The transfer of
securities was done during the first quarter of FY 2007-08 to de-risk the investment portfolio of
the bank from interest rate risk.

In the current environment, higher pressure on Net Interest Margin & NPAs and the need
for additional provisioning for pension, gratuity & leave encashment for staff of the bank under
projected unit credit method (PUCM) resulted in lower operating profit of the bank.

Total income of the bank increased to Rs 7228 Cr during April-September 2007, compared to
Rs 5596 Cr during April-September 2006, registering a y-o-y growth of 29.2%.

- Non-Interest income through commission, exchange and brokerage

increased by 17.4 % to Rs 540 Cr during the first half of FY 2007-08 from Rs 461 Cr during the
first half of FY 2006-07.

y Total expenses (excluding provisions) amounted to Rs 5938 Cr during the half year ended
September 2007, compared to Rs 4204 Cr during the half year ended September 2006,
registering a y-o-y growth of 41.2%.
. Net Interest Margin has declined to 3.49% during April- September 2007 from 3.86% during
April- September 2006.
. Yield on Advances of the bank has improved to 10.20% during April-September 2007 from
8.95% during April- September 2006.
. Due to the overall firming of interest rates, the Cost of Deposits of the bank increased to 5.55%
during the first half of FY 2007-08 from 4.35% during the first
half of FY 2006-07.
. Yield on Investment of the bank has declined to 6.88% during April- September 2007 from
7.09% during April- September 2006.
. Return on Assets stood at 1.13% at the end of September 2007.

. Capital to Risk Asset Ratio (CRAR) at the end of September 2007 at 12.58%.

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Bank is ready for Basel II compliance.

2.Balance Sheet

• Total Business of the bank increased by 19.3% on y-o-y basis to Rs 251474 Cr at the end of
September 2007 compared to Rs 210755 Cr as at the end of September 2006.

.Total Deposits at the end of September 2007 amounted to Rs 149980 Cr, compared to Rs
128415 Cr as at the end of September 2006 registering a growth of 16.8 % on y-o-y basis. CASA
accounted for 43.91 % of the total deposits of the bank at the end of September 2007.

• Advances at the end of September 2007 amounted to Rs 101494 Cr, compared to Rs 82340 Cr
as at the end of September 2006, registering a y-o-y growth of 23.3 %. 9
Retail credit constituted 23.3% of Gross Credit of the bank, as at the end of September 2007. It
increased by 21.8% to Rs 24100 Cr at the end of September 2007 from Rs 19794 Cr at the end
of September 2006. Education loan is the main thrust area of the bank, showing an increase of
35% to Rs 1155 Cr, while loan to traders increased by 46% to Rs 7889 Cr.

Priority sector advances increased to Rs 41,709 Cr at the end of September 2007, compared to
Rs 36,615 Cr as at the end of September 2006, registering a Y-O-Y growth of 13.9%. Ratio of
PS advances to adjusted net bank credit continued to remain much higher at 42.38% against
national goal of 40%. 9 The bank has opened more than 3 lakh No Frill accounts under PNB
Mitra Scheme and has issued more than 24,000 General Credit Cards.
9 Credit to Agriculture was Rs 18,942 Cr at the end of September 2007, compared to Rs 16570
Cr as at the end of September 2006 showing Y-O-Y growth of 14.3%. Agricultural advances as
percent to adjusted net bank credit at around 18.3% was higher than the national goal of 18%.
9 To facilitate disbursal of credit to the farmers, the bank has issued 1, 29,433 Kisan Credit
Cards (KCCs) during April-September 2007 taking the cumulative number to 22.48 lakh KCCs.
9 The bank's advances to the Small Enterprises at the end of September 2007 stood at Rs
11,789 Cr, compared to Rs 9606 Cr as at the end of September 2006, recording a Y-O-Y growth

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of 22.7%. Ratio of Small Enterprises advances to adjusted net bank credit stood at 11.98% at the
end of September 2007.
II. Information Technology
• Core Banking Solution (CBS) has been implemented in 2791 Service Outlets (SOLs) at 935
centres, covering 83% of bank's total business, facilitating around 2.23 Cr customers with
"anytime and anywhere" banking.
• National Electronic Fund Transfer (NEFT) is operational in 2280 branches.
• The bank has 2353 RTGS and 1395 SFMS branches.

III. International Operations

• Total Export-Import turnover of the bank increased to Rs 30,506 Cr in half year ended
September 2007 as compared to Rs 24,848 Cr in the half year ended September 2006, registering
a y-o-y growth of 22.8 %.
• PNB’s Hong Kong branch is likely to be operational in the month of November, 2007. The
bank is in the process of upgrading its Representative Office at Shanghai into a branch and to
establish presence at Singapore (OBU) and Canada (Subsidiary). PNB is also exploring
possibilities for its presence in Bhutan through JV route.
IV. NPA Management
• At the end of September 2007, the ratio of Net NPAs to net Advances was 1.86 %, while
Gross NPAs to Gross Advances of the bank stood at 4.57 % at the end of September 2007.

V. New Business Initiatives of the Bank

• Bank launched a pilot project on financial inclusion at Neemrana, Distt. Alwar, Rajasthan
and endeavors to launch it at 9 more places, viz at Chandigarh, Taran, Saharanpur & Balia,
Dehradun, Ranchi, Mayur Bhanj, Gaya and Patna.

• Under Financial Inclusion, the bank plans to cover 30,000 villages, 15 million households and
75 million people by 2010.
• PNB’s 8 Farmers’ Training Centres (FTCs) trained 1, 09,614 persons till September 2007.
The FTC introduced a scheme, called Kisan Bandhu whereby 5 local youth have been inducted
and trained at each FTC, who are actively pursuing the task of financial inclusion by visiting the

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doorstep of villagers.
• PNB has introduced PNB Baghban, a Reverse Mortgage Loan Scheme for senior citizens and
49 cases involving an amount of around Rs 18 Cr have already been sanctioned.

VI. Recognition : First Half of FY 2007-08 :

• According to ‘The Banker’, a London based Magazine (July 2007), PNB is placed at 255th
place, amongst top 1000 Banks in the World.

• PNB was bestowed Golden Peacock Award for Excellence in Corporate Governance by the
Institute of Directors for the FY 2006-07.

• CIO 100 Awards (2007) by IDG Media Pvt Ltd for Best IT Implementation.

Share holding pattern

Graph no 2

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Profit loss account

Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04


Operating income 15,925.65 12,104.24 9,791.12 9,712.63 9,617.34


Material consumed - - - - -

Manufacturing expenses - - - - -

Personnel expenses 2,461.54 2,352.45 2,114.97 2,121.23 1,654.06

Selling expenses 23.31 18.03 20.15 19.16 10.85

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Adminstrative expenses 1,247.47 1,360.77 941.38 933.60 1,764.91

Expenses capitalized - - - - -

Cost of sales 3,732.33 3,731.25 3,076.51 3,073.99 3,429.82

Operating profit 3,462.46 2,350.09 1,797.23 2,185.53 2,032.53

Other recurring income 231.62 186.67 131.54 470.69 59.85

Adjusted PBDIT 3,694.08 2,536.76 1,928.77 2,656.22 2,092.38

Financial expenses 8,730.86 6,022.91 4,917.39 4,453.11 4,154.99

Depreciation 170.23 194.80 186.65 183.28 181.45

Other write offs - - - - -

Adjusted PBT 3,523.85 2,341.96 1,742.12 2,472.94 1,910.93

Tadiustedax charges 1,247.15 629.05 412.83 495.49 660.79

Adjusted PAT 2,047.63 1,539.33 1,436.66 1,409.50 1,108.45

Non recurring items 0.76 2.65 0.62 0.24

Other non cash adjustments - - - - -

Reported net profit 2,048.76 1,540.08 1,439.31 1,410.12 1,108.69

Earnigs before appropriation 2,064.28 1,723.57 1,439.31 1,410.12 1,108.69

Equity dividend 409.89 409.89 189.18 174.18 106.12

Preference dividend - - - - -

Dividend tax 69.66 63.11 26.53 23.48 13.60

Retained earnings 1,584.73 1,250.57 1,223.60 1,212.46 988.97

(Rs cror

Balance sheet

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Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04
Sources of funds
Owner's fund
Equity share capital 315.30 315.30 315.30 315.30 265.30
Share application money - - - - -
Preference share capital - - - - -
Reserves & surplus 10,467.35 9,826.31 8,758.68 7,533.50 4,425.47
Loan funds
Secured loans - - - - -
Unsecured loans 1,66,457.23 1,39,859.67 1,19,684.92 1,03,166.89 87,916.40
Total 1,77,239.88 1,50,001.28 1,28,758.90 1,11,015.69 92,607.16
Uses of funds
Fixed assets
Gross block 3,699.64 2,247.74 2,106.92 1,875.65 1,645.93
Less : revaluation reserve 1,535.70 293.85 302.38 312.49 321.04
Less : accumulated depreciation 1,384.12 1,237.92 1,076.69 910.42 746.08
Net block 779.83 715.98 727.84 652.74 578.81
Capital work-in-progress - - - - -
Investments 53,991.71 45,189.84 41,055.31 50,672.83 42,125.49
Net current assets
Current assets, loans & advances 4,380.84 3,980.80 3,762.79 3,101.44 3,261.18
Less : current liabilities & provisions 14,798.23 10,178.51 9,518.93 12,194.80 8,114.48
Total net current assets -10,417.38 -6,197.71 -5,756.14 -9,093.36 -4,853.30
Miscellaneous expenses not written - - - - -
Total 44,354.15 39,708.10 36,027.01 42,232.20 37,850.99
Book value of unquoted investments - - - - -
Market value of quoted investments - - - - -
Contingent liabilities 1,04,055.87 74,700.48 58,739.31 47,047.19 32,229.85
Number of equity shares outstanding (Lacs) 3153.03 3153.03 3153.03 3153.03 2653.03

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Ratios (
Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04
Per share ratios
Adjusted EPS (Rs) 64.94 48.82 45.56 44.70 41.78
Adjusted cash EPS (Rs) 70.34 55.00 51.48 50.52 48.62
Reported EPS (Rs) 64.98 48.84 45.65 44.72 41.79
Reported cash EPS (Rs) 70.38 55.02 51.57 50.54 48.63
Dividend per share 10.00 10.00 6.00 3.00 4.00
Operating profit per share (Rs) 109.81 74.53 57.00 69.32 76.61
Book value (excl rev res) per share (Rs) 341.98 321.65 287.79 248.93 176.81
Book value (incl rev res) per share (Rs.) 390.68 330.97 297.38 258.84 188.91
Net operating income per share (Rs) 505.09 383.89 310.53 308.04 362.50
Free reserves per share (Rs) 63.79 64.29 69.61 63.79 4.20
Profitability ratios
Operating margin (%) 21.74 19.41 18.35 22.50 21.13
Gross profit margin (%) 20.67 17.80 16.44 20.61 19.24
Net profit margin (%) 12.68 12.53 14.50 13.84 11.45
Adjusted cash margin (%) 13.72 14.10 16.35 15.64 13.32
Adjusted return on net worth (%) 18.99 15.17 15.83 17.95 23.63
Reported return on net worth (%) 19.00 15.18 15.86 17.96 23.63
Return on long term funds (%) 111.52 80.76 74.57 81.00 126.29
Leverage ratios
Long term debt / Equity - - - - -
Total debt/equity 15.44 13.79 13.19 13.14 18.74
Owners fund as % of total source 6.08 6.76 7.04 7.06 5.06
Fixed assets turnover ratio 4.35 5.48 4.75 5.28 5.97
Liquidity ratios
Current ratio 0.29 0.39 0.39 0.25 0.40
Current ratio (inc. st loans) 0.02 0.02 0.02 0.02 0.03
Quick ratio 9.40 11.10 10.69 5.98 7.05
Inventory turnover ratio - - - - -
Payout ratios
Dividend payout ratio (net profit) 23.40 30.71 14.98 14.01 10.79
Dividend payout ratio (cash profit) 21.61 27.26 13.26 12.40 9.27
Earning retention ratio 76.59 69.28 84.99 85.98 89.20

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Cash earnings retention ratio 78.38 72.73 86.72 87.60 90.72
Coverage ratios
Adjusted cash flow time total debt 75.05 80.65 73.73 64.77 68.16
Financial charges coverage ratio 1.42 1.42 1.39 1.60 1.50
Fin. charges cov.ratio (post tax) 1.25 1.29 1.33 1.36 1.31
Component ratios
Material cost component (% earnings) - - - - -
Selling cost Component 0.14 0.14 0.20 0.19 0.11
Exports as percent of total sales - - - - -
Import comp. in raw mat. consumed - - - - -
Long term assets / total Assets 0.92 0.92 0.91 0.94 0.92
Bonus component in equity capital (%) - - - - -

Cash flow

Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04

Profit before tax 3,295.91 2,169.13 2,033.87 1,904.74 1,768.68

Net cashflow-operating activity 1,756.13 -10,144.34 14,961.44 1,073.53 529.29

Net cash used in investing activity -444.46 -159.41 -465.64 -349.83 -176.20

Netcash used in fin. activity 1,873.54 1,157.57 -793.13 1,544.81 390.24

Net inc/dec in cash and equivlnt 3,185.21 -9,146.17 13,702.66 2,268.51 743.33

Cash and equivalnt begin of year 15,645.52 24,791.69 11,089.03 8,820.51 8,077.19

Cash and equivalnt end of year 18,830.72 15,645.52 24,791.69 11,089.03 8,820.51


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The study is conducted to get awareness and learn about the performance of the company.
It is very important to know the operations and management of the business because as the
business is been done by investing lot of funds (debt and equity). Both the debtors and equity
share holders interest are vested with the company performance ,therefore it is necessary to learn
about the operations performance and about competitors of the company. It is also important for
us to understand the financial statements and analysis it by using various ratios.


The study is a descriptive in nature and secondary data have been gathered for the study
various type of secondary sources from which the data has been gathered as described below.

From the company web site :

TYPE OF RESEARCH :Descriptive research in nature


Statistical tool are used for this study ratios and percentages is used for analysis fo
financial statements, a ratios is defined as “it refer to the relationship expression in mathematical
term between two individual figures or group figures”. four types of ratios are calculated for this
study are as follows.

1) liquidity ratios

2) leverage ratios

3) turn over ratios

4) profitability ratios


The study is conducted by considering one company : Punjab national bank, from
banking sector. To learn it’s performance. Competition of the company. Four years of financial
data is considered for analysis using ratios


The study is carried by considering secondary the results is based on the
credibility of data.

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Page no.
i. Origin of the banking 1-2

ii. Banking in India 3-8

iii. Company details

• Origin of the company 9

• Company summery 9-10

• Profile 11-13

• Vision and mission 13

• Awards and achievements 13-15

• Board of directors 15

• Key commitment 16

• SOWT analysis 17

• Products and services 18-31

• Performance highlights 31-34

• Share holding pattern 34

Annexure –I 35-36

Annexure –II 36-37

Annexure-III 38-39

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