NET BANKING SERVICES OF PUNJAB NATIONAL BANK

RELEVANCE:-

Retail banking provides financial services for individuals and families. The three most
important functions are credit, deposit, and money management. They are a component
of commercial banking.

First, retail banks offer consumers credit to purchase homes, cars, and furniture. These
include mortgages, auto loans, and credit card. The resulting consumer
spending drives almost 70 percent of the U.S. economy. They provide
extra liquidity to the economy this way. Credit allows people to spend future earnings
now. Retail banks also offer small business loans to entrepreneurs. These small
companies create up to 65 percent of all new jobs as they grow
Origin:-

Punjab under the British especially after annexation in 1849 witnessed a period of rapid
development giving rise to a new educated class fired with a desire for freedom from
the yoke of slavery. Amongst the cherished desires of this new class was also an
overriding ambition to start a Swadeshi Bank with Indian Capital and management
representing all sections of the Indian community. The idea was first mooted by Rai
Mool Raj of Arya Samaj who, as reported by Lala Lajpat Rai, had long cherished the
idea that Indians should have a national bank of their own. He felt keenly "the fact that
the Indian capital was being used to run English banks and companies, the profits
accruing from which went entirely to the Britishers whilst Indians had to contend
themselves with a small interest on their own capital".

At the instance of Rai Mool Raj, Lala Lajpat Rai sent round a circular to selected friends
insisting on an Indian Joint Stock Bank as the first special step in constructive
Swadeshi. Lala Harkrishan Lal who had returned from England with ideas regarding
commerce and industry, was eager to give them practical shape.

`PNB was born on May 19, 1894. The founding board was drawn from different parts
of India professing different faiths and a varied back-ground with, however, the
common objective of providing country with a truly national bank which would further
the economic interest of the country.

The Bank opened for business on 12 April, 1895. The first Board of 7 Directors
comprised of Sardar Dayal Singh Majithia, who was also the founder of Dayal Singh
College and the Tribune; Lala Lalchand one of the founders of DAV College and
President of its Management Society; Kali Prosanna Roy, eminent Bengali pleader who
was also the Chairman of the Reception committee of the Indian National Congress at
its Lahore session in 1900; Lala Harkishan Lal who became widely known as the first
industrialist of Punjab; EC Jessawala, a well known Parsi merchant and partner of
Jamshedji & Co. of Lahore; Lala Prabhu Dayal, a leading Rais, merchant and
philanthropist of Multan; Bakshi Jaishi Ram, an eminent Civil Lawyer of Lahore; and
Lala Dholan Dass, a great banker, merchant and Rais of Amritsar. Thus a Bengali, Parsi,
a Sikh and a few Hindus joined hands in a purely national and cosmopolitan spirit to
found this Bank which opened its doors to the public on 12th of April 1895. They went
about it with a Missionary Zeal. Sh. Dayal Singh Majithia was the first Chairman, Lala
Harkishan Lal, the first secretary to the Board and Shri Bulaki Ram Shastri Barrister at
Lahore, was appointed Manager.

A Maiden Dividend of 4% was declared after only 7 months of operation. Lala Lajpat
Rai was the first to open an account with the bank which was housed in the building
opposite the Arya Samaj Mandir in Anarkali in Lahore. His younger brother joined the
Bank as a Manager. Authorised total capital of the Bank was Rs. 2 lakhs, the working
capital was Rs. 20000. It had total staff strength of nine and the total monthly salary
amounted to Rs. 320.
The first branch outside Lahore was opened in Rawalpindi in 1900. The Bank made
slow, but steady progress in the first decade of its existence. Lala Lajpat Rai joined
the Board of Directors soon after. in 1913, the banking industry in India was hit by a
severe crisis following the failure of the Peoples Bank of India founded by Lala
Harkishan Lal. As many as 78 banks failed during this crisis. Punjab National Bank
survived. Mr. JH Maynard, the then Financial Commissioner, Punjab, remarked.
"Your Bank survived...no doubt due to good management". It spoke volumes for the
measure of confidence reposed by the public in the Bank`s management.The years
1926 to 1936 were turbulent and loss ridden ones for the banking industry the world
over. The 1929 Wall Street crash plunged the world into a severe economic crisis.

It was during this period that the Jalianwala Bagh Committee account was opened in
the Bank, which in the decade that followed, was operated by Mahatma Gandhi and
Pandit Jawaharlal Nehru. The five years from 1941 to 1946 were ones of unprecedented
growth. From a modest base of 71, the number of branches increased to 278. Deposits
grew from Rs. 10 crores to Rs. 62 crores. On March 31, 1947, the Bank officials decided
to leave Lahore and transfer the registered office of the Bank to Delhi and permission
for transfer was obtained from the Lahore High Court on June 20, 1947.

PNB was then housed in the precincts of Sreeniwas in the salubrious Civil Lines, Delhi.
Many a staff member fell victim to the widespread riots in the discharge of their duties.
The conditions deteriorated further. The Bank was forced to close 92 offices in West
Pakistan constituting 33 percent of the total number and having 40% of the total
deposits. The Bank, however, continued to maintain a few caretaker branches.

The Bank then embarked on its task of rehabilitating the displaced account holders. The
migrants from Pakistan were repaid their deposits based upon whatever evidence they
could produce. Such gestures cemented their trusts in the bank and PNB became a
symbol of Trust and a name you can bank upon. Surplus staff posed a big problem. Fast
expansion became a priority. The policy paid rich dividends by opening up an era of
phenomenal growth.

In 1951, the Bank took over the assets and liabilities of Bharat Bank Ltd. and became
the second largest bank in the private sector. In 1962, it amalgamated the Indo-
Commercial Bank with it. From its dwindled deposits of Rs. 43 crores in 1949 it rose
to cross the Rs. 355 crores mark by the July 1969. Its number of offices had increased
to 569 and advances from Rs. 19 crores in 1949 to Rs. 243 crores by July 1969 when it
was nationalised.

Since inception in 1895, PNB has always been a "People`s bank" serving millions of
people throughout the country and also had the proud distinction of serving great
national leaders like Sarvshri Jawahar Lal Nehru, Gobind Ballabh Pant, Lal Bahadur
Shastri, Rafi Ahmed Kidwai, Smt. Indira Gandhi etc. amongst other who banked with
us.
Punjab Keshari Lala Lajpat Rai (Saluting The Spirit Of Our Founding Father)

The Life And Times Of Lala Lajpat Rai

There are few leaders of the pre-indendence era who,after having plunged themselves
into the political struggle, continued to take an active interest in social, cultural and
educational work. Lala Lajpat Rai was one of such leaders. Born on 28th January, 1865
at a small village, Dhudike in the Ferozepur district of Punjab, he belonged to the
Agarwal Baniya caste and it was perhaps because of this, in addition to taking part in
social and political life of the country, he took keen interest in industrial and financial
matter also. His father was a teacher of Persian and Urdu in a government school.

Having passed the final examination in Law from Punjab University, he started his
practice in1883, when he was barely 18 years old. Endowed with a rich legacy of moral
and intellectual background, Lala Lajpat Rai had benefit of education in the practical
rationalism of western science combined with the religious purity and moral elevation
of Eastern literature that put on him the hallmark of true culture. While sympathizing
with and aiding every movement made for progress, Lala Lajpat Rai identified himself
very closely with Arya Samaj, in which he found ample scope for the exercise of his
patriotism, philanthropy and religious zeal.

Having qualified as a pleader, Lala Lajpat Rai started practice at Hissar and soon
became a leading lawyer of the district. He organized the Arya Samaj there and put it
on proper lines. In 1892, he transferred his practice to the wider field at
Lahore.Education, both secular and religious, was in Lala Lajpat Rai’s view an
important factor in national development. He took part in the foundation of the D.A.V.
College at Lahore.

Lalaji And Politics. Lala Lajpat Rai always felt drawn towards politics. It was in 1888
that he joined the Indian National Congress when it met at Allahabad under the
presidency of Mr. G. Yule. In 1905, the Indian National Congress Committee having
recognized in him an austere, sincere and selfless devoted worker selected him as one
of its delegates to place before the British, the political grievances of the Indian people.
He met the expenses of his trip from his own pocket. He along with Gokhale carried on
the political campaign in various parts of England and brought home to the mind of the
British, the evils of an unsympathetic and bureaucratic government under which India
was labouring and pleaded in eloquent language, adding facts and figures in supporting
their contention, cause of the half starving and half dying people of India. Lala Lajpat
Rai created an impression on the English Populace. After his return from England, he
was busy devising and organizing ways and means for political advancement and
industrial emancipation of the country.

The movement of “Swadeshi” was in the offing and he put his heart and soul into it. He
preached the message of Swadeshi to the people of Punjab and made it very popular.
This naturally enraged the bureaucracy and he came to be regarded as a revolutionary
by the Britishers and the Anglo-Indian press. He was openly dubbed as a Revolutionary
and an instigator of the armed forces.

The Jalianwala Bagh tragedy and the Government`s denial to censure the conduct of its
officers made him a complete non cooperator. He lost his faith in the British and threw
himself whole heartedly into the non-cooperation movement.In 1925, he joined the
Swaraj Party and became its deputy leader. He took active part in the deliberations of
the debates of the Assembly. It was he, who moved the resolution for the Boycott of
the Simon Commission in the Assembly. It was while leading the boycott procession at
Lahore on the 30th October, 1928 that he received lathi blows on his chest which
ultimately brought about his death on the 17th November, 1928.

Lala Lajpat Rai And PNB Lalaji was keenly concerned with the fact that though
Indian capital was being used to run English Banks and companies, the profits went
entirely to the British, while Indians had to contend themselves with a small interest
on their capital. He echoed this sentiment in one of his writing while concurring with
Rai Mul Raj of Arya Samaj who had long cherished the idea that Indians should have
a National Bank of their own. At the instance of Rai Mul Raj, Lala Lajpat Rai sent a
circular to selected friends insisting on an Indian joint stock Bank as the first step in
constructive Swadeshi and the response was satisfactory After filing and registering
the memorandum and Articles of Association on 19 May, 1894, the bank was
incorporated under Act VI of the 1882 Indian Companies Act.

The prospectus of the bank was published in the Tribune, and the Urdu Akhbar-e-Am
and Paisa Akhbar. On 23rd May, 1894, the founders met at the Lahore residence of
Sh. Dyal Singh Majithia, the first Chairman of PNB, and resolved to go ahead with
the scheme. They decided to hire a house in the famous Anarkali Bazar of Lahore
opposite the post office and near well known stores of Rama Brothers.On 12th April
1895, the Bank opened for business, a day before the great Punjab festival of
Baishakhi. The essence of the Bank’s culture was clear at this first meeting itself. The
fourteen original shareholders and seven directors took only a modest number of
shares; the control of the Bank was to lie with the large, dispersed shareholders, a
purely professional approach that was as uncommon then as it is today.
INTRODUCTION
Background Study :-
The Internet banking is changing the banking industry and is having the major effects
on banking relationships. Even the Morgan Stanley Dean Witter Internet research
emphasized that Web is more important for retail financial services than for many
other industries. Internet banking involves use of Internet for delivery of banking
products & services. It falls into four main categories, from
Level 1 - minimum functionality sites that offer only access to deposit account data -
to
Level 4 sites - highly sophisticated offerings enabling integrated sales of additional
products and access to other financial services - such as investment and insurance. In
other words a successful Internet Banking solution offers –
• Exceptional rates on Savings, CDs, and IRAs
• Checking with no monthly fee, free bill payment and rebates on ATM surcharges •
Credit cards with low rates
• Easy online applications for all accounts, including personal loans and mortgages
• 24 hour account access
• Quality customer service with personal attention.
Drivers Of Change :
Advantages previously held by large financial institutions have shrunk considerably.
The Internet has leveled the playing field and afforded open access to customers in the
global market place. Internet Banking is a cost effective delivery channel for financial
institutions. Consumers are embracing the many benefits of Internet Banking. Access
to one's accounts at anytime and from any location via the World Wide Web is a
convenience unknown a short time ago. Thus, a bank's Internet presence transforms
from 'brouchreware' status to 'Internet banking' status once the bank goes through a
technology integration effort to enable the customer to access information about his or
her specific account relationship. The six primary drivers of Internet Banking
includes, in order of primacy are :
• Improve customer access
• Facilitate the offering of more services
• Increase customer loyalty
• Attract new customers
• Provide services offered by competitors
• Reduce customer attrition.
•Indian Banks on Web :
The banking industry in India is facing unprecedented competition from non-
traditional banking institutions, which now offer banking and financial services over
the Internet. The deregulation of the banking industry coupled with the emergence of
new technologies, are enabling new competitors to enter the financial services market
quickly and efficiently. Indian banks are going for the retail banking in a big way.
However , much is still to be achieved. This study which was conducted by students
of IIML shows some interesting facts :
Throughout the country, the Internet Banking is in the nascent stage of
development (only 50 banks are offering varied kind of Internet banking services).
In this general, these Internet sites offer only the most basic services. 55% are so
called 'entry level' sites, offering little more than company information and basic
marketing materials. Only 8% offer 'advanced transactions' such as online funds
transfer ,transactions & cash management services.
• Foreign & Private Banks are much advanced in terms of the number of sites & their
level of development.
*Emerging Challenges :
Information technology analyst firm, the Meta Group, recently reported that "financial
institutions who don't offer home banking by the year 2000 will become
marginalized." By the year of 2002, a large sophisticated and highly competitive
Internet Banking Market will develop which will be driven by
• Demand side pressure due to increasing access to low cost electronic services. •
Emergence of Open standards for banking functionality.
• Growing customer awareness and need of transparency.
• Global players in the fray.
• Close integration of bank services with web based E-commerce or even
disintermediation of services through direct electronic payments (E-Cash)
• More convenient international transactions due to the fact that the Internet along
with general deregulation trends eliminates geographic boundaries.
*Main Concerns In Internet Banking :
In a survey conducted by the Online Banking Association , member institutions rated
security as the most important issue of Online banking. There is a dual requirement to
protect customer's privacy and protect against fraud. Banking Securely :
Online banking via the World Wide Web provides an overview of Internet commerce
and how one company secure banking for its financial institution clients and their
customers. Some basic information on the transmission of confidential data is
presented in Security and Encryption on the Web. PC Magazine Online also offer a
primer : How Encryption Works. A multilayered security architecture comprising
firewalls , filtering routers, encryption and digital certification ensure that your
account information is protected from unauthorised access :
• Firewalls and filtering routers ensure that only the legitimate Internet users are
allowed to access the system.
• Encryption techniques used by the bank (including the sophisticated public key
encryption) would ensure that privacy of data flowing between the browser and the
Infinity system is protected.
• Digital certification procedures provide the assurance that the data you receive is
from the Infinity system.
*Current Scenario :
The Indian has finally worked up to the competitive dynamics of new Indian market
and is addressing the relevant issues take on the multifarious challenges of
globalization. Banks that employ IT solutions are perceived to be futuristic and
proactive players capable of meeting the multifarious requirements of large customer
base. Private banks have been fast on the uptake and are reorienting their strategies
using the Internet as a medium. The India banking has come from a long from being a
sleepy business institution to a highly proactive and dynamic entity this
transformation has been largely brought by the large doses of liberalization and
economic reforms that allowed exploring new business opportunities rather than
generating revenues from conventional streams. The Indian industry has confidently
hit the growth trial that pick in activity is best reflected in the banking sector which
after all is as candid a mirror of a country's economy as you could ever find. Most of
the Indian
Financial intermediaries have been keeping pace with the deepening market
economy, riding the opportunity that come along with reforms even as they brace
themselves for increased competition both foreign and private by strengthening
prudential norms and leveraging technology to ensure that growth engine hums
smoothly along the essential function of a bank is to provide services related to the
storing value of value and the extending credit.
The evolution of banking dates back to the earliest writing and continues in the
present where a bank is a financial institution that provides banking and other
financial services. Currently the term bank is generally understood an institution that
holds a banking license. Banking licenses are granted by financial supervision
authorities and provide rights to conduct the most fundamental banking services such
as accepting deposits and making loans. There are also financial institutions that
provide certain banking services without meeting the legal definition of a bank ,a so
called non-bank. Banks are a subset of the financial services industry.
The word bank is derived from the italian banca, which is derived from German and
means bench. The terms bankrupt and "broke" are similarly derived from banca rotta,
which refers to an out of business bank, having its bench physically broken. Money
lenders in Nothern Italy originally did business in open areas , or big rooms, with each
lender working from his own bench or table. Typically, a bank generates profits from
transaction fees on financial services or the interest spread on resources it holds in
trust for clients while paying theme interest on the asset. Services typically offered by
the banks - Although the type of services offered by a bank depends upon the type of
bank and the country, services provided usually include :
• Directly take deposits from the general public and issue checking and saving
accounts.
• Lend out money to companies and individuals (see money lender) • Cash checks.
• Facilitate money transactions such as wire transfers and cashier's checks.
• Issue credit cards, ATM, and debit cards and online banking.
• Storage of valuables , particularly in a safe deposit box.
•Technology In Banking :
Technology will bring fundamental shift in functioning of banks. It would not only
help them bring improvements in their internal functioning but also enable them to
provide better customer service. Technology will break all boundaries and encourage
cross border banking business. Banks would have to undertake extensive Business
Process Re-Engineering and tackle issues like
a) how best to deliver products and services to customers.
b) designing an appropriate organizational model to fully capture the benefits of
technology and business process changes brought about.
c) how to exploit technology for deriving economies of scale and how to create cost
efficiencies, and
d) how to create a customer - centric operation model.
• Entry of ATMs has changed the profile of front offices in bank branches. Customers
no longer need to visit branches for their day to day banking transactions like cash
deposits, withdrawals ,cheque collection , balance enquiry etc. E- banking and
Internet banking have opened new avenues in "convenience banking".
• Technology solutions would make flow of information much faster, more accurate
and enable quicker analysis of data received. This would make the decision making
process faster and more efficient. For the Banks, this would also enable development
of appraisal and monitoring tools which would make credit management much more
effective. The result would be a definite reduction in transaction costs, the benefits of
which would be shared between banks and customers.
• One area where the banking system can reduce the investment costs in technology
applications is by sharing of facilities. We are already seeing banks coming together
to share ATM Networks. Similarly, in the coming years , we expect to see banks and
FIs coming together to share facilities in the area of payment and settlement, back
office processing, data warehousing , etc. While dealing with technology , banks will
have to deal with attendant operational risks. This would be a critical area the Bank
management will have to deal with in future.
• Payment Settlement system is the backbone of any financial market place. The
present Payment and Settlement systems such as Structured Financial Messaging
System( SFMS) , Centralised Funds Management System(CFMS) , Centralised Funds
Transfer System (CFTS) and Real Time Gross Settlement System( RTGS) will
undergo
further fine- tuning to meet international standards. Needless to add, necessary
security checks and controls will have to be in place. In this regard, Institutions such
as IDRBT will have a greater role to play.
Industry Profile :
Without a sound and effective banking system in India it cannot have a healthy
economy. The banking system of India should not only be hassle free but it should be
able to meet new challenges posed by the technology and any other external and
internal factors. For the past three decades India's banking system has several
outstanding achievements to its credit. The most striking is its extensive reach. It is no
longer confined to only metropolitans or cosmopolitans in India. In fact , Indian
banking system has reached even to the remote corners of the country. This is one of
the main reasons of India's growth process.
The government regular policy for Indian banks since 1969 has paid rich dividends
with the nationalization of 14 major private banks of India. Not a long ago, an account
holder had to wait for hours at the bank countries for getting a draft or for
withdrawing his own money. Today,, he has a choice. Gone are days when most
efficient bank transferred money from one branch to other in two days. Now it is
simple as instant messaging or dial a pizza. Money have become the order of the day.
The first bank in India , though conservative, was established in 1786. From 1786 till
today, the journey of Indian Banking System can be segregated into three distinct
phases. They are as mentioned below :
• Early phase from 1786 to 1969 of Indian Banks.
• Nationalisation of Indian Banks and up to 1991 prior to Indian banking sector
Reforms.
• New phase of Indian Banking System with the advent of Indian Financial &
Banking Sector Reforms after 1991. Phase 1
The General Bank of India was set up in the year 1786. Next came Bank of
Hindustan and Bengal Bank.. The East India Company established Bank of
Bengal(1809) , Bank of Bombay(1840) and Bank of Madras( 1843) as independent
units and called it Presidency Banks. These three banks were amalgamated in 1920
and Imperial Bank of India was established which started as private shareholders
banks, mostly European shareholders.
In 1865 Punjab national bank was established and first time exclusively by Indians ,
Punjab , National Bank Ltd. was set up in 1894 with headquarters at Lahore. Between
1906 and 1913, Bank of India, Central Bank of India, Bank of Baroda, Canara Bank,
Indian Bank and Bank of Mysore were set up. Reserve Bank of India came in 1935.
During the first phase the growth was very slow and banks also experienced periodic
failures between 1913 and 1948. There were approximately 1100 banks, mostly small.
To streamline the functioning and activities of commercial banks, the Government of
India came up with The Banking Companies Act,1949 which was later changed to
Banking Regulation Act 1949 as per amending Act of 1965 (Act No.23 of 1965).
Reserve Bank of India was vested with extensive powers for the supervision of
banking in India as the Central Banking Authority. Government took major steps in
this Indian Banking Sector Reform after independence. In 1955 , it nationalised
Imperial bank of India with extensive banking facilities on a large scale especially in
rural and semi urban area.
It formed State Bank of India to act as the principal agent of RBI and to handle
banking transactions of the Union and State Governments all over the country. Seven
banks forming subsidiary of State Bank of India was nationalised in 1960 on 19th
July,1969. 14 major commercial banks in the country was nationalised. This step
brought 80% of the banking segment in India under Government ownership.
This phase has introduced many more products and facilities in the banking sector in
its reforms measure, In 1991, a committee was set up by his name which worked for
the liberalisation of banking practices. The country is flooded with foreign banks and
their ATM stations. Efforts are being put to give a satisfactory service to customers.
Phone banking and net banking is introduced.
The entire system became more convenient and swift. Time is given more importance
than money. The financial system of India has shown a great deal of resilience. It is
sheltered from any crisis triggered by any external macroeconomics shock as other
East Asian Countries suffered. This is all due to a flexible exchange rate regime, the
foreign reserves are high, the capital account is not yet fully convertible, and banks
and their customers have limited foreign exchange exposure.

•Problem Identified :-
Even though the technology updation has been adopted in Internet banking, still the
customers are unaware about the updation of technology and the reason for the
technology updation. Some of the customers are not using the branch networks, and
ATM facilities. Only educated people are aware about the internet banking facilities
and the procedures to access their account online.
Even among the educated people, some of them are still feeling insecure about
performing the transactions through net banking facilities provided by the banks. The
bank doesn't take any actions to make aware their customers to use the internet
banking facility or to increase the satisfaction level among their customers.
Need Of Study :-
This study analyses about the need for internet banking facility offered bybanks to
their customers. The specific online facilities include fund transfer, online bill
payment, balance enquiry and the most of the other activities related to the customer's
bank account. These were implemented to overcome the problems associated with
traditional banking system, which includes time delay in transactions, need of
physical presence of customers, and more paper work for bankers and so on.
This study has been mainly carried out to intimate the changes, updations in internet
banking facility. This study makes contributions by showing how the current internet
banking facilities contribute in increasing the efficiency of the banking operations and
also focuses on the acceptance level among the Customers for Internet banking.
Hence, it is necessary to conduct a study to know whether the implementation of
Internet Banking has served the purpose or not.
Objectives Of Study :-
1]Primary Objectives:
• To study the effectiveness of the Internet Banking In India.
2]Secondary Objectives:
• To study on current internet banking facilities provided by banks.
• To study the usage level of the Internet banking facilities by customers.
• To study the improvement of efficiency of banking operations obtained by internet
banking.
• To notify the changes needed from customer view in existing internet banking
facilities.
Review Of Literature:-
Online banking is the latest in the series of technological wonders of the recent past.
ATMs, Tele Banking , Internet Banking , Credit Cards and Debit Cards have emerged
as effective delivery channels for traditional banking products. Internet or Electronic
or online baking is the newest delivery channel to be offered by retail banks in many
developed countries, and there is a wide agreement that this channel will have a
significant impact on the market. Banks know that the internet opens up new horizons
for them and moves them from local to global frontiers.
Online banking refers to systems that enable bank customers to get access to their
accounts and general information on bank products and services through the use of
bank's websites, without the intervention or inconvenience of sending letters, faxes ,
original signatures and telephone confirmations. In its simplest form, electronic
banking may mean the provision of information about the bank and its products via a
page on the internet.
It is the types of services through which bank customers can request information and
carry out most retail banking services such as balance reporting, inter-account
transfers, bill payment, etc via a telecommunication network without leaving their
homes or organizations. In essence, it is an electronic consumer interface and an
alternative channel of distributions.
Online banking has been regarded as the most important way to reduce cost and
maintain or enhance services for consumers. It provides universal connection from
any location worldwide and its universally accessible from any internet linked
computer. It is a process of innovation whereby customers handle their own banking
transactions without visiting bank tellers.
E- Banking In India Information technology is considered as the key driver for the
changes taking place around the world. According to Heikki, the transformation from
the traditional banking to e-banking has
been a 'leap' change. The evolution of e-banking started from the use of Automatic
Teller machines( ATMs) and telephone banking (tele-banking), direct bill payment,
electronic fund transfer and the revolutionary online banking. The future of electronic
banking would be more interactive i.e TV banking . Finland is the first country in the
world to have taken a lead in e- banking. In India , ICICI Bank initiated e-banking
services during 1997 under the brand name 'Infinity'. It has been forecasted that
among all categories, online baking is the future of electronic financial transactions.
The rise in e-commerce and internet in enhancing online security transformation and
sensitive information has been the core reason for the penetration of online banking in
everyday life. The shift towards the involvement of the customers in the financial
service with the help of technology ,especially internet, has helped in reducing costs
of financial institutions as well as clients / customers who use the service at anytime
and from virtually anywhere with access to an internet connection.

Company Profile In Online Banking Where punjab national bank was?

• In early 1990’s more than 7000 branches were using traditional manual procedures.
• These manual procedures were inherited from the Imperial Bank.
• Traditional procedures were evolved over decades
• Very few changes were brought in those procedures as per the need of time.
• In that time, mainframe or mini computers were used for MIS, RECONCILLATION
& FUND SETTLEMENT PROCESS, or we can say that for backhand operations
purpose. Changes brought in Information Technology by punjab national bank :-
• In the next decade internet facility was provided for individuals
• All punjab national bank branches were connected and ATM’S were launch
• 2001 - KMPG appointed consultant for preparing IT Plan for the Bank.
• Later on Core banking proposed by the IT consultancy company.
• 2002 – All branches computerized but on decentralized systems, there the initiative
of core banking took place
• 2008- more than 6500 branches (95% of business) on Core Banking Solution (CBS)
• Internet Banking facility for Corporate customers were also launched in early 2008
• More Interfaces developed with e-Commerce & other sites through alternate
channels like ATM & Online Banking
• All Foreign Offices were brought on Centralized Solution
• Large network is playing the role of backbone for connectivity across the country
• Multiple Service Providers are providing the links – BSNL, MTNL, Reliance, Tata
& reliance which are making the system errorless and provide high speed.
• Multiple Technologies to support the networking infrastructure – Leased lines, Dial-
up, CDMA & VSAT CBS - Core Banking System Components ELITEX-2008 8 CBS
- Core Banking System Components Datacenter Network Administrators Core-
Banking Application OS, Database Internet-Banking ATM Desktops, Branch Servers
WAN, Internet Branches Application Developers System AdministratorsBranch
User/Admins Alternative Channels
Online punjab national bank punjab national bank is one of India’s largest bank with a
branch network of over 11000 branches and 6 associate banks located even in the
remotest parts of India. Allahabad Bank offers a wide range of banking products and
services to corporate and retail customers. Online punjab national bank is the Internet
banking portal for . The portal provides anywhere, anytime, online access to accounts
for Retail and Corporate customers. The application is developed using the latest
cutting edge technology and tools. The infrastructure supports unified, secure access
to banking services for accounts in over 11,000 branches across India.
Services :-
1.Retail Banking:-
The Retail banking application is an integration of several functional areas, and
enables customers to:
Issue Demand Drafts online
Transfer funds to own and third party accounts
Credit beneficiary accounts using the VISA Money Transfer, RTGS/NEFT feature
Generate account statements
Setup Standing Instructions
Configure profile settings
Use eTax for online tax payment
Use ePay for automatic bill payments
Interface with merchants for railway and airline reservations
Avail DEMAT and IPO services
2.Corporate Banking:-
The Online corporate banking application provides features to administer and manage
corporate accounts online. The corporate module provides roles such as Regulator,
Admin, Uploader, Transaction Maker, Authorizer, and Auditor. These roles have
access to the following functions:
Manage users, define rights and transaction rules on corporate accounts
Access accounts in several branches with a single sign-on mechanism
Upload files to make bulk transactions to third parties, supplier, vendor and tax
collection authorities.
Use online transactional features such as fund transfer to own accounts, third party
payments, and draft issues
Make bill payments over the Internet.
Authorize, modify, reschedule and cancel transactions, based on rights assigned to
the user
Generate account statement
Enquire on transaction details or current balance Value added services:
Tax payments to central and state governments through site to site integration.
Supply Chain Finance( e-VFS- Electronic Vendor Finance Scheme)
Direct Debit Facility
 E Collection Facilities for:
Core Banking Transactions
Internet Bank transactions for incoming RTGS/NEFT Transactions
Internet banking transactions for punjab national Bank customers and associate
banks
Debit facility where suppliers can directly debit their customer’s account through
internet banking Products And Services:-
• E-Ticketing
• E-Tax
• Bill Payment
• RTGS/NEFT
• E-Payment
• Fund Transfer
• Third Party Transfer
• Demand Draft
• Cheque Book Request
• Account Opening Request
• Account Statement
• Transaction Enquiry
• Demat Account Statement
• Donation
SWOC Analysis ( Strength, Weaknesses , Opportunities , Challenges):-
Strengths:-
• Greater reach to customers .
• Quicker time to market .
• Ability to introduce new products and services quickly and successfully.
• Ability to understand its customers’ needs.
• Customers are given access to information easily across any location.
• Greater customer loyalty .
• Easy online application for all accounts, including personal loans and mortgage.
• 24 hours account access.
• Quality customer service with personal attention.

Weaknesses:-
• Lack of awareness among the existing customers regarding Online banking.
• Obsolesce of technology take place very soon specially in terms of security on
internet.
• Procedure for applying for ID and password for using services related to Online
banking takes time.
• Lack of knowledge is found regarding in Online banking in employees of punjab
national Bank
• Implementation of newer technology is little bit complicated
• Employees needs training to obtain knowledge regarding Internet-banking.

Opportunities:-
• Approximately 95% of customers are not using internet banking.
• Core competency can be achieved in terms of banking if focus is made on awareness
of internet banking, can become 1st virtual bank of India.
• Concentration of various services should be made using internet banking.

Challenges:-
• Maintaining Business Edge over competitors in the context of sameness in IT
infrastructure
• Multiple vendor support is necessary for working of highly complex technology
• Maintaining secured IT infrastructure for business operations and Alternative must
be there in case of failure of system.
Data Analysis:-
This includes designing questionnaire for collection of data through collection of data
from target respondents, processing and analyzing the data and arriving at
conclusions. The target of 150 respondents from the following group has been taken
for the study. The study is based on the sample drawn from the customers of punjab
national bank providing the internet banking facility.
Research and methodology:-
The area of research is Punjab National Bank that have adopted Online Banking.
Research is about to be conducted to the bank customers and staffs with the sample
size of 150.
CONCLUSION AND RECOMMENDATIONS
Analysis shows that even though the Online Banking facility is having many
advantages, it is not utilized by many people. It shows that the younger generation
people are more likely to use the Internet banking facilities when compared to the
middle age and old age people. It is due to the unawareness of the customers towards
the internet banking facility. Also, the people are finding difficulties in using the
Internet banking websites which had created an aversion in them towards net banking.
This can be overcome if the banks conduct sessions on the various features provided
in their Online banking web sites. Even the younger generation people are feeling
insecure to use the online transaction facilities provided by the banks. The internet
banking technology should be made more secure so as it to eliminate the constraint
among the customers.
Why Did Choose Internet Banking??
Internet banking is becoming more and more popular among the masses. To provide
more Quality Information on Internet Banking. Make the concept and procedure more
familiar. To warn against its negative effects. Internet banking means any user with a
personal computer and a browser can get connected to his bank’s website to perform
any of the virtual banking functions:
Balance enquiry.
Transfer of funds.
Online payment of bills.
Accrued interest, fees and taxes.
Transaction details of each account.
Accounts, credit card & home loan balances.
Transfer funds to third party accounts you nominate.
Open a deposit right from the terminal you are sitting at.
The concept of Internet banking has beensimultaneously evolving with the
development ofthe World Wide Web. Programmers working on banking data bases
came up with ideas for onlinebanking transactions, sometime during the 1980s.
In 1983, the Nottingham BuildingSociety, commonly abbreviated and referred to
asthe NBS, launched the first Internet banking servicein United Kingdom. This
service formed the basis formost of the Internet banking facilities thatfollowed. The
facility introduced by NottinghamBuilding Society is said to have been derived from
asystem known as Prestel that is deployed by thepostal service department of United
Kingdom.
*History In India
•Punjab National Bank was the first bank to initiate the Internet BankingRevolution in
India as early as 1997 under the brand nameInfinity.
• punjab national bank kicked off online banking way back in 1996. Buteven as a
whole, 1996 to 1998 marked the adoptionphase, while usage increased only in 1999-
due to lower ISPonline charges, increased PC Penetration and a TechFriendly
atmosphere.
*How to access Internet Banking?
Before you can access your account online, you’llneed to register with your bank
for Internetbanking.
Your bank will give you a registration numberor login ID. You’ll also need a
password (IPIN).Your Internet password is different from the PINyou use with your
debit card.
 Once your bank has approved yourregistration, you’re able to access your
accountsonline.
STEP 1: Make sure your computer is connectedto the Internet.
STEP 2: Go to your bank’s website. For security reasons, don’t click on a link to your
bank sent to you in an email – emails with links to fake websites are a classic ploy of
criminals trying to steal your identity.
STEP 3:Once you’re on your bank’s website you’ll see a button or othericon labelled
‘Log on to Internet banking’ or something similar(the terminology varies from bank
to bank) Click on this icon It will take you to a login page
STEP 4: Login to your Internet account It generally requires you to enter your
registration number or login ID You will also have to enter your password – either by
typing it in, or by clicking on letters and numbers onscreen
STEP 5: Some banks have a two stage authentication process ― an additional
security measure to protect customers’ accounts and personal data. If a two-stage
process, you’ll then have to enter another code. The code may be generated by a
security token the bank gives you when you register for Internet banking, or it could
be contained in an SMS message the bank sends to your mobile phone
STEP 6: If you’ve entered the correct information at all these stages, you’ll gain
access to your accounts and be able to begin your Internet banking
STEP 7: Once you’ve got online access to your accounts you’ll see the different types
of transactions that you can perform. Usually on the left side of the screen there will
be a list of functions. Click on a function to open it. For example, if you want to
transfer funds, click on the button or icon labelled ‘Transfers’ or something similar.
You’ll need to complete the required data. Remember – make sure that you have the
right BSB (Bank State Branch ) code and account number for the beneficiary of the
transfer, as this is the information that the bank will use to process the transfer.
STEP 8: Once you’ve finished your Internet banking, be sure to log out from your
account. Most banks also have in place a ‘time-out’ feature, which means that if
you’re inactive for a certain period in your Internet banking session, you’ll
automatically be logged out.
Merits/Demerits of Internet Banking:-
*Merits:

Convienience

Effectivness Ubiquity

Transaction
Efficiency
Speed

Convenience:
Unlike your corner bank, online banking sites neverclose; theyre available 24 hours a
day, seven days a week, and theyre only a mouse click away.
Ubiquity:
If youre out of state or even out of the country when amoney problem arises, you can
log on instantly to your online bank and take care of business, 24/7.
Transaction speed:
Online bank sites generally execute andconfirm transactions at or quicker than ATM
processing speeds.
Efficiency:
You can access and manage all of your bank accounts, including IRAs, CDs, even
securities, from one secure site.
Effectiveness:
Many online banking sites now offer sophisticated tools, including account
aggregation, stock quotes, rate alerts and portfoliomanaging programs to help you
manage all of yourassets more effectively. Most are also compatible with money
managing programs such as Quicken and Microsoft Money.
*Demerits:

Start-up Learning Bank Site The Trust

May Be
Take Time Curve Changes Thing

Start-up may take time:

In order to register for your banks onlineprogram, you will probably have to provide
ID and sign a form at abank branch. If you and your spouse wish to view and manage
yourassets together online, one of you may have to sign a durable powerof attorney
before the bank will display all of your holdings together.
Learning curve:
Banking sites can be difficult to navigate at first.Plan to invest some time and/or read
the tutorials in order to becomecomfortable in your virtual lobby.
Bank site changes:
Even the largest banks periodically upgradetheir online programs, adding new
features in unfamiliar places. Insome cases, you may have to re-enter account
information.
The trust thing:
For many people, the biggest hurdle to onlinebanking is learning to trust it. Did my
transaction go through? Did Ipush the transfer button once or twice? Best bet: always
print thetransaction receipt and keep it with your bank records until it showsup on
your personal site and/or your bank statement.
Services provided under internet banking:-
Online Bill Payment
Personal Home Page
Ticket Booking
Prepaid Mobile Recharge
Market Watch
Investment Services
Online Applications
Personal updates
Increasing number of Fake emails fraudulent bank purporting to be sent websites.
from banks.Use of Trojan Horse Hackers who hack intoprograms to capture personal
bank user IDs and accounts and steal passwords. money.
Nowadays a large number of fraudulent websites are coming up which aim to trick
persons into disclosing their sensitive personal information.
Fake EmailsThis method is also known as Phishing. In the field of computersecurity,
phishing is the criminally fraudulent process of attempting toacquire sensitive
information such as usernames, passwords and creditcard details by masquerading as
a trustworthy entity in an electroniccommunication
Emails are send by Fraudulent bank.
Customer’s verify the personal information.
These Emails Guide customers and make them enter the fraud links.
Thereby Disclosing the customer’s ATM card numbers and their passwords
Here is an example of this bankwarning its customers of the fakeemails they can
receive:
Hackers Pharming is a hackers attack aiming to redirect a websites traffic to another,
bogus website. In recent years both pharming and phishing have been used for online
identity theft information.Pharming has become of major concern to businesses
hosting ecommerce and online banking websites. Sophisticated measures known as
anti-pharming are required to protect against this serious threat. Antivirus software
and spyware removal software cannot protect against pharming.
Conclusion:-
Internet banking is changing the banking industry and is having the major effects on
banking relationships.
The net banking, thus, "now is more of a norm rather than an exception in many
developed countries" due to the fact that it is the economical way of providing
banking services.
Banking is now no longer confined to the traditional brick and mortar branches,
where one has to be at the branch in person, to withdraw cash or deposit a cheque or
request a statement of accounts.
Providing internet banking is increasingly becoming a need to have than a nice to
have services.
 s ranked #717 in the Forbes Global 2000 in May 2013.
 Punjab National Bank was ranked #26 in the Fortune India 500 ranking of 2011.
 PNB was awarded the 'Best Public Sector Bank' by CNBC TV18 in 2012.
 The bank was recognised as the 'most socially responsive bank'
by Businessworld and PwC in 2012.
 In 2011, it received Golden Peacock Award for "Excellence in Corporate Social
Responsibility" and "National Training Award".

Timeline

In 1900 PNB established its first branch outside Lahore in India. Branches
in Karachi and Peshawar followed. The next major event occurred in 1940 when PNB
absorbed Bhagwan (or Bhugwan) Dass Bank, which had its head office in Dehra Dun.
At the Partition of India and the commencement of Pakistani independence, PNB lost
its premises in Lahore, but continued to operate in Pakistan. Partition forced PNB to
close 92 offices in West Pakistan, one-third of its total number of branches, and which
held 40% of the total deposits. PNB still maintained a few caretaker branches. On 31
March 1947, even before Partition, PNB had decided to leave Lahore and transfer its
registered office to India; it received permission from the Lahore High Court on 20
June 1947, at which time it established a new head office at Under Hill Road, Civil
Lines in New Delhi. Lala Yodh Raj was the Chairman of the Bank.
In 1951, PNB acquired the 39 branches of Bharat Bank (est. 1942). Bharat Bank
became Bharat Nidhi Ltd. In 1960, PNB again shifted its head office, this time from
Calcutta to Delhi. In 1961, PNB acquired Universal Bank of India, which
Ramakrishna Jain had established in 1938 in Dalmianagar, Bihar. PNB also
amalgamated Indo Commercial Bank (est. 1932 by S. N. N. Sankaralinga Iyer) in a
rescue. In 1963, The Burmese revolutionary government nationalized PNB's branch in
Rangoon (Yangon). This became People's Bank No. 7.[9]After the Indo-Pak war, in
September 1965 the government of Pakistan seized all the offices in Pakistan of
Indian banks. PNB also had one or more branches in East Pakistan (Bangladesh).
The Government of India (GOI) nationalized PNB and 13 other major commercial
banks, on 19 July 1969. In 1976 or 1978, PNB opened a branch in London. some ten
years later, in 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. That
same year, 1986, PNB acquired Hindustan Commercial Bank (est. 1943) in a rescue.
The acquisition added Hindustan's 142 branches to PNB's network. In 1993, PNB
acquired New Bank of India, which the GOI had nationalized in 1980. In 1998 PNB
set up a representative office in Almaty, Kazakhstan.
In 2003 PNB took over Nedungadi Bank, the oldest private sector bank in Kerala. 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. In 2004, PNB established a branch in Kabul,
Afghanistan, a representative office in Shanghai, and another in Dubai. PNB also
established an alliance with Everest Bank Limited in Nepal that permits migrants to
transfer funds easily between India and Everest Bank's 12 branches in Nepal.
Currently, PNB owns 20% of Everest Bank. Two years later, PNB established PNBIL
– Punjab National Bank (International) – in the UK, with two offices, one in London,
and one in Southall. Since then it has opened more branches, this time in Leicester,
Birmingham, Ilford, Wembley, and Wolverhampton. PNB also opened a branch in
Hong Kong. In January 2009, PNB established a representative office in Oslo,
Norway. PNB hopes to upgrade this to a branch in due course. In January 2010, PNB
established a subsidiary in Bhutan. PNB owns 51% of Druk PNB Bank, which has
branches in Thimpu, Phuentsholing, and Wangdue. Local investors own the
remaining shares. Then on 1 May, PNB opened its branch in Dubai's financial center.
PNB purchased a small minority stake in Kazakhstan-based JSC Danabank
established on 20 October 1992 in Pavlodar. Within the year PNB increased its
ownership till 84% of what has become JSC (SB) PNB, with its share currently
decreased to 49%. The associate in Kazakhstan now called JSC Tengri Bank has
branches in Almaty, Astana, Karaganda, Pavlodar and Shymkent. September 2011:
PNB opened a representative office in Sydney, Australia. December 2012: PNB
signed an agreement with US based life Insurance company Metlife to acquire a 30%
stake in MetLife's Indian affiliate MetLife India Limited. The company would be
renamed PNB MetLife India Limited and PNB would sell MetLife's products in its
branches.[[11][6][11]| assets = ₹6,435 billion (US$90 billion) (2015)[12]
Features:-
Punjab National Bank (PNB) was incorporated under Act VI of the Indian Companies
Act and began its operations just a day before Baisakhi, i.e. on 12th April 1895 from
Lahore. It started its operations with a working capital of Rs 20,000 and Rs 2 lakhs of
authorized capital. Creation and establishment of this bank is attributed to visionaries
like Mr. Jessawala, Lala Lajpat Rai, Lala Harikrishan Lal, Babu Kali Prasono Roy
and Sardar Dyal Singh Majithia. The main objective in formation of PNB was to
provide the country with a true national bank which would dedicate itself to working
towards the economic interest of the country and play a pivotal role in ensuring the
country’s growth and prosperity. Lala Lajpat Rai played a key role in forming the
establishment of PNB in its formative years.

Credit Cards:-
Introduction of credit cards have given a boost to cashless economy and resulted in
encouraging individuals and businessmen towards use of cashless transactions. Punjab
National Bank has three credit cards which are affiliated to VISA, these are, PNB
Global Gold Credit Card, PNB Global Classic Credit Card and PNB Global Platinum
Credit Card. All the cards offer attractive perks and reward points against expenses
which are charged to the card or transactions carried out using the card. In case of
theft or loss of credit card, you will have to immediately report to the toll free
customer care number which is available 24X7.
Overview:-

Founded in 1894, Punjab National Bank (PNB) is an Indian multinational banking

and financial services company headquartered in New Delhi, India. It is one of the
oldest banks catering to 80 million customers with over 6,968 branches and more than
9,935 ATMs across the country. PNB has also extended its operations worldwide by
establishing branches and representative offices in Hong Kong, Kabul, Dubai,
Almaty, Oslo, Shanghai and Sydney.

It offers a host of banking products and financial services which include private
equity, consumer banking, private banking, corporate banking, mortgage loans,
wealth management, insurance and credit cards. PNB is considered the third largest
public sector bank in India with respect to assets and ranked among the top 250
largest banks across the world. It has been awarded as ‘Best Public sector bank’ by
CNBC TV and recognised as ‘Most Socially Responsive Bank’ by Business-world
and PwC for showing consistent growth in the banking sector. It also holds major
rankings such as Fortune India 500 and Forbes Global 2000.

Punjab National Bank Debit cards:-

In order to provide value added services to its customers, PNB offers a range of debit
cards which are designed according to their needs. These debit cards are tailor-made to
provide the convenience of cashless transactions and you are not charged on cash
withdrawals from PNB or any other bank ATMs.

Why choose Punjab National Bank debit card

 Get enhanced cash withdrawal and transaction limits

 Enjoy cashless shopping at retail and online stores worldwide
 Get add on facility on selected PNB debit cards
 Get safe and secure transactions because of 3D Secure Password protection on
your PNB debit cards
 PNB debit cards can also be used for paying utility bills, dining, entertainment,
booking train or bus tickets and much more.

Types of PNB Debit Cards:-

PNB offers its customers with a wide range of debit card options that are in line with
the requirements of various customer groups.

1)Classic Debit Card (Magstripe):-

The Punjab National Bank Classic debit is the perfect option for those seeking a basic
debit card which is linked to their account. The following are its key features:

 Classic Debit Cards are chip and PIN based debit cards which are specially
designed for Punjab National Bank savings account holders.
  You can either opt for a personalised debit card which has your name on it or a
non-personalised debit card which does not has your name on it.
 Get higher cash withdrawal and purchase limit daily. Maximum daily cash
withdrawal limit is Rs 25,000 per day at PNB ATMs, while the transaction limit
is Rs. 15,000 per day at other bank ATMs. The maximum daily transaction limit
is Rs. 60,000 at PoS terminals and e-commerce websites.
 You can also transfer funds to your friends and family from one PNB account
to another using your PNB debit card.

2)Platinum Debit Card (Magstripe):-

PNB offers its platinum debit card for customers who desire more when shopping in a
cashless manner. The following are some key features of this card:

 Platinum Debit Card is specially designed for PNB premium account holders.
 You can personalise your debit card with your name on it.
 Get enhanced cash withdrawal limit of Rs 50,000 per day along with purchase
limit of Rs. 1.25 lakhs per day at POS terminals or e-commerce websites across
India
 Moreover enjoy purchase limit of $500 per day at POS terminals or ecommerce
websites worldwide.

3)MITRA ATM Card:-

The PNB Mitra Card is specially designed to suit the requirements of Mitra Account
holders and the following are its key benefits:

 MITRA ATM Card is designed for all MITRA Account holders at PNB.
Customers who do not have a MITRA account can also apply for it.
 This debit card can be used to withdraw cash from PNB ATMs across the
country but cannot be used for making transactions at POS terminals and online
merchant websites.
 Cash can be withdrawn through the Biometric system. Maximum daily cash
withdrawal limit is Rs. 5,000.

4)RuPay Debit Card:-

 RuPay Debit Card is based on the RuPay platform and can be used to make
transactions across India.
 Cash can be withdrawn at only RuPay enabled ATMs and transactions can be
made at only RuPay POS terminals.

5)RuPay Kisan Card:-

 RuPay Kisan Card is exclusively made for PNB Kisan account holders.
 Enjoy a daily cash withdrawal limit of up to Rs. 25000 and daily spending limit
of up to Rs.60000 at POS terminals and online merchant websites.
6)Master International Debit Card:-

In order to enable international transactions, Punjab National Bank introduced Master

International Debit Card which is also available in the form of personalised and non-
personalised variants.

Master International Debit Card comes with enhanced cash withdrawal and
transaction limits.

 Maximum cash withdrawal limit is Rs.50000 per day at ATMs

 Maximum daily spending limit at POS terminals and e-commerce websites in
Rs.1.25 lakhs

For foreign transactions, the limits will be applicable according to the conversion rate.

7)Classic Debit Card (Master & RuPay Variant):-

Classic Debit Card is designed for general category account holders. It is available in
both personalised and non-personalised versions, personalised classic debit card will
have cardholder’s name on it. Classic Debit Card can be used to make fund transfer
from one PNB account to another.

 Maximum daily cash withdrawal limit is Rs. 25000 at ATMs across the country.
 Maximum daily transaction limit is Rs.15000 at POS terminals and ecommerce
websites established in India.
 There is no limit on fund transfer from your PNB account to another PNB
account. Every transaction has a cap of Rs.1 lakh
 In case of third party transfers, maximum transfer limit is same as the available
cash limit.

8)Platinum Debit Card:-

Platinum Debit Card is designed for elite account holders of PNB. This debit card is
available in personalised variant which will have card holder’s name and photo on it.
Get same characteristics and features as the classic debit card with some additional
features such as:

 Enjoy enhanced cash withdrawal and purchase limit. Avail daily cash
withdrawal of Rs.15000 and daily transaction limit of up to Rs.50000.

 Get daily spending limit of Rs.1.25 lakhs at POS and ecommerce websites.
 RuPay Platinum debit card can only be used within India and cannot carry out
international transactions.
 Cardholders can opt for 2 add on cards for their close family members.

9)EMV Card:-
EMV Debit Card can be used for making international transactions. It has an EMV
chip and magstripe embedded in it which ensures safe and secure transactions. It is a
personalised card which has the card holder’s name on it.

 Maximum daily cash withdrawals is Rs.50000 per day at ATMs

 Maximum transaction limit is Rs.1.25 lakhs per day at POS terminals and e-
commerce websites.
 Cardholders can link a maximum of 3 accounts to their EMV card.

10)Rupay MUDRA Debit Card:-

MUDRA Debit Card is a non-personalised debit card which is offered on the RuPay
platform

 Avail maximum cash withdrawals of Rs.25000 per day at all ATMs across
India.
 Enjoy higher transaction limit of Rs.60000 per day at POS terminals and online
merchant websites established in India.
INTRODUCTION :-
profile :-

l of Rs 20,000. Far-sighted visionaries and patriots like Lala Lajpat Rai, Mr. E.C.
Jessawala, Babul Kali Prasono Roy, Lala Harkishan Lal and Sardar Dyal Singh
Majithia displayed courage in giving expression to the spirit of nationalism by
establishing the first bank purely managed by Indians with Indian Capital. During the
long history of the Bank, 7 banks have merged with PNB.
The Bank’s brand image and trust reposed by its customers have been reflected in
growing customer base and rising business graph of the Bank. Domestic Business of
the Bank is over Rs.10 lakh crore and the Bank continues to maintain its forte in low
cost CASA deposits. The Bank has shaken off one of the biggest adversities in its
history and has rebounded back. Focus on recovery and arresting fresh slippages with
a simultaneous shift towards higher earnings through qualitative credit growth
alongwith rationalization of Risk Weighted Assets (RWAs) has helped Bank to return
to profit and improve CRAR.
The Bank has been able to achieve better results in the quarter owing to MISSION
PARIVARTAN, a transformational exercise underway for Business Excellence aimed
at enhancing Efficiency, Productivity and Profitability for long term sustenance and
giving the Bank an edge over its competitors. `Mission Parivartan Division`, an
independent `THINK TANK` formed to initiate, implement and drive change through
improvement in People, Products and Processes, has enabled Bank to serve the
customers with enhanced vigour and zeal to live upto its tagline “The Name you can
Bank Upon”.
MEANING:-

What is Online Banking?

Online Banking, also known as net banking, e-banking or online banking, is the facility
provided by banks and financial institutions which allows customers to use banking
services via internet. There are scores of services like online money transfer, account
opening, bill payment, tracking account activity, etc., which are made available to
customers with the help of online banking. Online banking also allows banks to
advertise their products and services in a manner that it reaches out millions of
customers. However, in order to use online banking, an individual will require access
to the internet, which is scarcely available in rural areas. Internet banking can also be
accessed via mobile phones which have a data 3G/4G connection.
With the help of online banking, there are several indispensable services which are
made available to customers, without them having to personally visit the bank.
Customers can perform financial transactions like transfer funds online, pay bills,
apply for loans and open a savings account among various other debit
card transactions. Under non-financial transactions, customers can carry out several
activities which may require going to the bank like applying for a new cheque book,
getting account statements, update contact information, start/stop payment, etc.
Retail banking, also known as consumer banking, is the typical mass-market banking
in which individual customers use local branches of larger commercial banks.
Services offered include savings and checking accounts, mortgages, personal loans,
debit/credit cards and certificates of deposit (CDs). In retail banking, the focus is on
the individual consumer.

Retail banking provides financial services for individuals and families. The three most
important functions are credit, deposit, and money management. They are a
component of commercial banking.

First, retail banks offer consumers credit to purchase homes, cars, and furniture.
These include mortgages, auto loans, and credit cards. The resulting consumer
spending drives almost 70 percent of the U.S. economy. They provide
extra liquidity to the economy this way. Credit allows people to spend future earnings
now. Retail banks also offer small business loans to entrepreneurs. These small
companies create up to 65 percent of all new jobs as they grow.

Second, retail banks provide a safe place for people to deposit their money. Savings
accounts, certificates of deposit, and other financial products offer a better rate of
return compared to stuffing their money under a mattress. Banks base their interest
rates on the Fed funds rate and Treasury bond interest rates. That's why they rise and
fall over time. The Federal Deposit Insurance Corporation insures most of these
deposits.

Third, retail banks allow customers to manage your money with checking accounts
and debit cards. That means they don't have to do all your transactions with dollar
bills and coins. All of this can be done online, making banking an added convenience.
Retail banking aims to be the one-stop shop for as many financial services as possible
on behalf of individual retail clients. Consumers expect a range of basic services from
retail banks, such as checking accounts, savings accounts, personal loans, lines of
credit, mortgages, debit cards, credit cards and CDs.

Most consumers utilize local branch banking services, which provide onsite customer
service for all of a retail customer's banking needs. Through local branch locations,
financial representatives provide customer service and financial advice. Financial
representatives are also the lead contact for underwriting applications related to
credit-approved products. Retail banking encompasses the services offered to
consumers by commercial banks. The term "retail" refers to the almost storefront-
shopping nature of commercial banking services.

Most commercial banks have extensive retail banking services and products to reach a
wide consumer base.

Here's a brief story about Bob's day at his bank XYZ. He arrives at the bank one day
to deposit a $2000 paycheck into his account. He decides to deposit $1000 of the
paycheck into his existing checking account. The other $1000 he decides to use
to open a savings account. Bob sits with a bank representative who explains the
various savings account options and helps him with opening an account once he's
made a decision.

Additionally, the account representative informs Bob of retirement plans the bank
offers as well as educational savings plans for his children. Before he leaves, Bob also
takes information on auto loans offered by the bank since he is considering
purchasing a new car. While at the bank, Bob was able, in one place, to
deposit money, open a savings account and find information relating to banking
products he may need in the future.

Types of Retail Banks

Most of America's largest banks have retail banking divisions. These include Bank of
America, JP Morgan Chase, Wells Fargo, and Citigroup. Retail banking makes
up to 50 to 60 percent of these banks' total revenue.

There are many smaller community banks as well. They focus on building
relationships with the people in their local towns, cities, and regions. They have less
than $1 billion in total assets.

Credit unions are another type of retail bank. They restrict services to employees of
companies or schools. They operate as non-profits. That means they can offer better
terms to savers and borrowers because they aren't as focused on profitability as the
bigger banks.
Savings and loans are retail banks that target mortgages. They've almost disappeared
since the 1989 savings and loans crisis.

Lastly, Sharia banking conforms to the Islamic prohibition against interest rates. So
borrowers share their profits with the bank instead of paying interest. This policy
helped Islamic banks avoid the 2008 financial crisis. They didn't invest in risky
derivatives. These banks cannot invest in alcohol, tobacco, and gambling businesses.

Definition:-

Retail banking, also known as Consumer banking, refers to the offering of banking
services to retail customers instead of institutional customers, such as companies,
corporations and/or financial institutions.

What is the definition of retail banking?

Retail banking includes a wide range of banking services that belong to similar
categories, such as savings accounts, checking accounts, consumer lending, credit
cards, debit cards, mortgages, e-banking services, phone-banking services, insurance,
investment and fund management.
Consumers use local branches that have the capacity to deliver all these services to
retail customers. In fact, retail-banking keeps the money circulating as the Fed allows
only 10% of deposits on hand. So, the retail banks have to circulate the remaining
90% either in the form of loans or in the form of investment products
HISTORY:-

Before The 1980s, Banks Were Highly Regulated. Much Of This Came About In
Response To The 1929 Stock Market Crash. In The 1930s, The Glass-Steagall Act
Prohibited Retail Banks From Using Deposits To Fund Risky Stock Market Purchases.

Banks Also Could Not Operate Across State Lines. Retail Banks Could Not Use Their
Depositors' Funds For Investments Other Than Lending. They Often Could Not Raise
Interest Rates. During The 1970s, These Banks Lost Business As Double-Digit
Inflation Made Customers Withdraw Deposits. Retail Banks' Paltry Interest Rates
Weren't Enough Of A Reward For People To Save. Banks Cried Out To Congress
For Deregulation.

The 1980 Depository Institutions Deregulation And Monetary Control Act Allowed
Banks To Operate Across State Lines. Large Banks Began Gobbling Up Small Ones.
In 1998, Nations Bank Bought Bank Of America To Become The First Nationwide
Bank. The Other Banks Soon Followed. That Consolidation Created The Four National
Banking Giants In Operation Today.

It Also Allowed Banks To Raise Interest Rates On Deposits And Loans. In Fact, It
Overrode State Limits On Interest Rates. Banks No Longer Had To Direct A Portion
Of Their Funds Toward Specific Industries, Such As Home Mortgages. They Could
Instead Use Their Funds In A Wide Range Of Loans, Including Commercial
Investments.

he Fed lowered its reserve requirements. That gave banks more money to lend, but it
also increased risk. To compensate depositors, the Federal Deposit Insurance
Corporation raised its limit from $40,000 to $100,000 savings.

In 1982, President Reagan signed the Garn-St. Germain Depository Institutions Act.
It removed restrictions on loan-to-value ratios for savings and loan banks. It also
allowed these banks to invest in risky real estate ventures. By 1995, more than half of
them had failed. The resultant savings and loan crisis cost $160 billion.

In 1999, the Gramm-Leach-Bliley Act repealed Glass-Steagall. It allowed banks to

invest in even riskier ventures. They promised to restrict themselves to low-
risk securities. That would diversify their portfolios and lower risk. But as competition
increased, even traditional banks invested in risky derivatives to increase profit and
shareholder value.

All these extra factors forced banks to cut costs. They closed rural branch banks. They
relied more on ATMs and less on tellers. They focused on personal services to high net
worth clients and began charging more fees to everyone else.
Punjab National Bank (PNB) is a state-owned commercial bank located in New Delhi.
PNB is one of the leading commercial banks in India. They offer banking products
and also operate credit card and debit card business bullion business life and non-life
insurance business and gold coins and asset management business. They are
recognized as the bank offering highest levels of customer satisfaction in Delhi and
Chennai. As on 31 December 2017 PNB's domestic branch network stood at 6957
along with 9598 ATMs. The bank has three overseas branches in Hong Kong Dubai
and Offshore Banking Unit in Mumbai and Representative Offices (RO) at Dubai
(UAE) Shanghai (China) Sydney (Australia) and Dhaka (Bangladesh). The bank has
two overseas subsidiaries viz. PNB International Ltd. (UK) and Druk PNB Bank Ltd
(Bhutan). The bank also has one associate company viz. JSC Tengri Bank
(Kazakhstan) and one Joint Venture Bank in Nepal i.e. Everest Bank Ltd. The bank
has got permission from RBI for opening Representative office in Yangon
(Mynamar). Punjab National Bank was incorporated in the year 1895 at Lahore
undivided India. The Bank has the distinction of being the first Indian bank to have
been started solely with Indian capital. In the year 1940 the Bank absorbed Bhagwan
Dass Bank a scheduled bank located in Delhi circle. In the year 1951 they acquired
the 39 branches of Bharat Bank and in the year 1961 they acquired Universal Bank of
India.Punjab National Bank was nationalised in July 1969 along with 13 other banks.
In the year 1986 they acquired Hindustan Commercial which added Hindustan's 142
branches to the Bank's network. In the year 1993 they acquired New Bank of India
which the GOI. During the year 1996 they developed a packaged for corporate
customers for fast remittance of funds from different up-country branches. In the year
they set up a representative office in Almaty Kazakhstan.In the year 2000 the Bank
has introduced a scheme for providing finance against mortgage of immovable
property. In September 2000 they commenced their gold business in the form of Gold
Import Scheme. In November 2000 they launched an International Co-branded Credit
Card of Punjab National Bank and Hongkong & Shanghai Banking Corporation
(HSBC) in New Delhi. In March 2002 the Bank came out with their first Initial public
offer (IPO) for 53060700 equity shares of Rs 10 each which resulted in the reduction
of the government's shareholding in the Bank. During the year 2002 they started their
branch in M.G. Road Bangalore named as Mid-Corporate Branch (MCD) to provide
their corporate clients with a credit limit of Rs 3.5 crore and above. They made joint
venture with Infosys for the implementation of a Centralized Banking Solution for
them. Also they made a tie up with Cisco Systems for networking 3870 branches as
part of their Rs 150 crore plan.In the year 2003 the Bank took over Kozhikode-based
Nedungadi Bank Ltd (NBL). The Bank entered into an alliance with New India
Assurance for selling their general insurance products. Also they opened a
representative office in London. During the year PNB Capital Service Ltd was
amalgamated with the Bank.In June 2003 the Bank entered into an MoU with
Principal Financial Services Inc (USA) and Vijaya Bank for joint venture partnership
in Life Insurance Pensions and Asset Management (MF) business. Also they formed a
strategic alliance with Infrastructure Leasing and Financial Services Ltd (IL&FS) for
setting up a private equity fund for investing in domestic companies.In the year 2004
the Bank acquired the assets of Hindustan Transmission Product Ltd. They signed a
corporate agency agreement with Export Credit Guarantee Corporation of India Ltd
(ECGC) for marketing ECGC's export credit insurance products through the network
of the bank's branches. Also an MoU was signed with Intel for the deployment of
various IT-related solutions. During the year the Bank signed an MoU with ICICI
Bank for ATM network sharing. They awarded a project to Tata Consultancy Services
(TCS) for implementing human capital management and payroll solution. They
established a branch office in Kabul Afghanistan. Also they opened a representative
office in Shanghai. The bank 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. In the year 2005 the Bank unveiled ATM at Edappal. Also they
opened a representative office in Dubai. In the year 2006 the Bank made a tie up with
MasterCard International to launch a signature-based debit card. Also they made a tie
up with Indian Airlines for online booking of air tickets. They opened a new branch in
Uttarakhand. In October 2007 the Bank entered into MoU with India Infrastructure
Finance Company with an aim to extend their cooperation and support to IIFC in
areas of creating a deal flow of infrastructure projects. In January 2008 the Bank
commenced commercial banking operations in Hong Kong. During the year 2008-09
the Bank opened 168 branches out of which 90 are new branches and 78 branches was
added through upgradation of Extension Counters. They made collaboration with LIC
for selling insurance policies and also made a tie up with Oriental Insurance for
selling non-life policies on a referral basis. In June 2008 they entered into an MoU
with ILFS Cluster Development Initiative Ltd for providing finance for various
industrial infrastructure projects in the country. In September 2008 they signed an
MoU with SMC Global Securities Ltd and Networth Stock Broking Ltd for providing
online trading facility to Company's customers. They offered a unique '3 in 1 account'
comprising of Saving Demat and Trading account. In February 2009 they
commercially launched their credit cards with 2 types of consumer credit cards
namely Gold and Classic. Also they entered into an agreement with Oriental
Insurance Company to market insurance products a practice also known as
bancassurance. In March 2009 the Bank entered into an understanding with Tata
Motors for financing entire range of passenger cars. Also they executed an agreement
with The Life Insurance Corporation of India for bancassurance life insurance under
the provisions of IRDA's Referral Arrangement. During the year 2009-10 the Bank
opened 524 domestic branches out of which 347 are at new locations while 177
branches was added through upgradation of existing Extension Counters. They
deployed 1400 ATMs taking the the total count of ATMs to more than 3500 Nos.
They opened two overseas branches 1 in Hong Kong and another at DIFC Dubai and
started a JV banking subsidiary 'DRUK PNB Bank Ltd' in Bhutan. Also they opened a
representative office in Oslo Norway.During the year the Bank sold 6.5% of their
stake in UTI Assets Management Co Ltd and UTI Trustee Pvt Ltd thus bringing down
their stake in both these companies to 18.5%. They launched Corporate Credit Card
with Individual liability. Also they launched Merchant Acquiring Business through
installation of Point of Sale (PoS) Terminals at Merchant Establishments and Internet
Payment Gateway by integrating through Merchant Website with Brand Name PNB
Biz.In May 2009 the Bank incorporated a subsidiary company namely PNB
Investment Services Ltd. In November 2009 they entered into an agreement with FIM
Bank (Malta) Banca IFIS Italy and Blend Financial Services Ltd Mumbai for setting
up a joint venture company for providing factoring forfeiting and trade finance related
business.During the year 2010-11 the Bank introduced new set of products and
services such as PNB Uphaar PNB Suvidha and World Travel Card. In December 13
2010 they acquired 63.64% stake in JSC Dana Bank of Kazakhstan. In January 12
2011 the Bank's joint venture India factoring and Finance Solutions Pvt Ltd started its
commercial operations from Delhi Mumbai & Chennai.The total number of branches
at the end of March 2011 rose to 5189. The branch network comprises 2047 Rural
1154 Semi Urban 1111 Urban and 877 Metropolitan branches. During the review
period 210 domestic branches were opened. With 5189 branches including 28
Extension Counters the Bank has the largest network amongst the nationalized banks.
As part of customer segmentation Bank has opened specialized Branches that include
6 Micro Finance branches 59 SME branches 11 International Banking Branches 17
Asset Recovery Management Branches 13 Mid Corporate Branches 11 Large
Corporate Branches 73 Retail Asset Branches 11 Agriculture Finance Branches 3
high-tech agriculture branches 1 Capital Market Services Branch and 1 International
Service Branch. Besides 41 Back Offices 2 Special Foreign Exchange Offices 17
Special MICR Centres 41 Service (Regional Clearing Centre) centres 4 Financial
Inclusion Service Centres 3 Centralised Draft Payable Centres 1 Central Clearing
Service Centre and 1 Depository Back Office are established to reduce delivery time
and improve response time.On 5 March 2010 PNB announced that the bank has
received permission from RBI for setting up a representative office in Sydney
Australia.On 13 December 2010 PNB announced that the bank has completed the
transaction for acquisition of 63.64% stake in JSC Dana Bank Kazakhstan. PNB has
acquired 35 million shares of 1000 Tenge each at par for 3.5 Bn Tenge (USD 23.765
million approx.) which has raised the capital of JSC Dana Bank to the level of 5.5 Bn
Tenge from the existing 2 Bn. Tenge. On 12 January 2011 PNB announced that it has
bought Principal Financial Group of Mauritius (PFG) and U K Paints stake of 26%
and 32% respectively in Principal PNB Life Insurance Company Ltd. After the
transaction the bank's stake in Principal PNB Life Insurance Company Ltd stands at
88%. PNB also said at that time that it will continue to support Principal PNB Asset
Management Company Pvt Ltd for a period of three years. On 15 February 2011 PNB
announced that the bank has entered into an arrangement with Weizmann Forex Ltd.
Mumbai (Principal Agent) for handling inward remittances under MTSS (Money
Transfer Service Scheme) through Western Union. The bank also entered into an
arrangement with BFC Forex & Financial Services Ltd. Thane (Maharashtra) for
handling inward remittances under MTSS (Money Transfer Service Scheme) through
the web based product EzRemit.On 28 April 2011 PNB announced the issue and
allotment of 15.09 lakh equity share at issue price of Rs 1218.82 per equity share to
Government of India on preferential basis aggregating Rs 184 crore.On 28 March
2012 PNB announced that upon receipt of allotment money of Rs 1589.90 crore from
Life Insurance Corporation of India (LIC) the bank has allotted 1.58 crore equity
shares at issue price of Rs 1003.69 per share to LIC on preferential basis. On 2 April
2012 PNB announced that upon receipt of allotment money of Rs 654.99 crore from
Government of India the bank has allotted 65.25 lakh equity shares at issue price of
Rs 1003.69 per share to Government of India on preferential basis.On 16 January
2013 PNB announced that the bank has acquired 30% stake in Metlife India Insurance
Co. Ltd.On 6 March 2013 PNB announced that upon receipt of allotment money of Rs
1247.99 crore from Government of India on 4 March 2013 the bank has allotted 1.42
crore equity shares at issue price of Rs 873.05 per share on preferential basis to
Government of India.On 28 October 2013 PNB announced that the Chairman &
Managing Director of the bank as per authority delegated by the Board has approved
issuance of equity shares of face value of Rs 10 each for an amount upto Rs. 500 crore
at such price as may be decided as per SEBI (ICDR) Regulations 2009 on preferential
basis in favour of Government of India subject to necessary approvals. On 4 March
2014 PNB announced that the bank has sold its entire stake in Credit Information
Bureau India Ltd. (CIBIL) to TransUnion International Inc. (FII). On 1 April 2014
PNB announced that it has sold its entire 30% stake in India Factoring & Financial
Solutions Ltd. (IFFSL) to parent promoter FII (FIM Bank (Malta) and realized Rs
107.83 crore. On 4 July 2014 PNB announced that it has sold 41% stake in High Mark
Credit Information Services Ltd. (High Mark) to CRIF and realized Rs 4.15 crore.The
Board of Directors of PNB at its meeting held on 19 September 2014 granted in-
principle approval for sub-division of existing equity shares of face value of Rs 10
each into 5 equity shares of face value of Rs 2 each.On 1 April 2015 PNB announced
that capital funds to the tune of Rs 870 crore have been received from the
Government of India on 31 March 2015 for issue and allotment of 4.42 crore equity
shares at a price of Rs 196.80 per equity share to Government of India on preferential
basis in accordance with Regulation 76(1) of SEBI ICDR Regulations.On 30
September 2015 PNB announced that consequent upon receipt of capital funds to the
tune of Rs 1732 crore from the Government of India on 29 September 2015 the bank
has issued and allotted 10.9 crore equity shares at a price of Rs 158.84 per equity
share on preferential basis to Government of India in accordance with Regulation
76(1) of SEBI ICDR Regulations.On 15 September 2016 PNB announced that
consequent upon receipt of capital funds to the tune of Rs 2112 crore from the
Government of India on 14 September 2016 the bank has issued and allotted 16.43
crore equity shares at a price of Rs 128.49 per equity share on preferential basis to the
Government of India in accordance with Regulation 76(1) of SEBI ICDR
Regulations.Punjab National Bank (PNB) and India Post Payments Bank (IPPB)
signed a memorandum of understanding on 17 January 2017 wherein PNB shall
provide technology platform for pilot launch of IPPB on receipt of regulatory
approval from Reserve Bank of India. The Board of Directors of PNB at its meeting
held on 2 November 2017 authorized the management to partially sell its stake in
PNB Housing Finance Ltd. Further consequent upon the exercise of call option by the
Principal Group the Board has approved to offload PNB's entire stake in Principal
PNB Asset Management Company and Principal trustee Company Pvt Ltd to the
Principal group.On 5 December 2017 PNB announced that the bank successfully sold
98.15 lakh equity shares of PNB Housing Finance Ltd (PNBHFL) to different
investors (Non Retail and retail) at above the floor price /cut off price with gross sales
consideration of Rs 1315.33 crore.On 18 December 2017 PNB announced allotment
of 29.76 crore equity shares to successful eligible qualified institutional buyers at a
price of Rs 168 per share. Earlier PNB on 14 December 2017 announced the closure
of the qualified institutions placement (QIP) of equity share. The bank raised Rs 5000
crore from the QIP.The Board of the Directors of PNB at its meeting held on 6
February 2018 accorded approval for Capital Infusion by Government of India up to
Rs 5473 crore.On 14 February 2018 PNB informed the stock exchanges of detection
of a massive fraud of Rs 11394.02 crore. On 12 February 2018 on the basis of
investigation report total fraud of Rs 11394.02 crore (about USD 1771.69 million) in
case of unauthorized issuance of Letters of Undertakings Foreign Letter of Credits
and Inland Letter of Guarantees in the group accounts of Nirav Modi Group and M/s
Gitanjali Group and in the account of M/s. Chandri Paper & Allied Products Pvt. Ltd.
was reported to RBI. Later on 26 February 2018 PNB informed the stock exchanges
that the quantum of reported unauthorized transactions can increase by about USD
204.25 million.

PUNJAB NATL.BANK - COMPANY INFO

Nominee (RBI) : Rabi N Mishra
Director(PartTime NonOfficial) : Mahesh Baboo Gupta
Company Secretary : Balbir Singh.
Chairman (Non-Executive) : Sunil Mehta
Managing Director & CEO : Sunil Mehta
Nominee (Govt) : Ravi Mital
Executive Director : Lingam Venkata Prabhakar
Independent Director : Asha Bhandarker
Director (Shareholder) : Sanjay Verma
Executive Director : Agyey Kumar Azad
Suri & Co/SPMG & Co/MKPS &
AUDITOR :
Associates
IND NAME : Banks - Public Sector
HOUSE NAME : Government of India - PNB
vision:-
To promote fair banking practices by maintaining transparency in various products and
services offered to make banking an enriching experience.
how to work retail banking:-

ow Retail Banks Work

Retail banks use the depositors' funds to give out loans. They make money by
charging higher interest rates on loans than they pay on deposits.

The Federal Reserve, the nation's central bank, regulates most retail banks. Except for
the smallest banks, it requires all other banks to keep around 10 percent of their
deposits in reserve each night. They are free to lend out the rest. At the end of each
day, banks that are short of the Fed's reserve requirement borrow from other banks to
make up for the shortfall. The amount borrowed is called the fed funds. Retail
banking encompasses the services offered to consumers by commercial banks.
The term "retail" refers to the almost storefront-shopping nature of commercial
banking services.

Most commercial banks have extensive retail banking services and products to reach a
wide consumer base.

Here's a brief story about Bob's day at his bank XYZ. He arrives at the bank one day
to deposit a $2000 paycheck into his account. He decides to deposit $1000 of the
paycheck into his existing checking account. The other $1000 he decides to use
to open a savings account. Bob sits with a bank representative who explains the
various savings account options and helps him with opening an account once he's
made a decision.

Additionally, the account representative informs Bob of retirement plans the bank
offers as well as educational savings plans for his children. Before he leaves, Bob also
takes information on auto loans offered by the bank since he is considering
purchasing a new car. While at the bank, Bob was able, in one place, to
deposit money, open a savings account and find information relating to banking
products he may need in the future.
characteristics:-

Retail banking is, however, quite broad in nature – it refers to the dealing of
commercial banks with individual customers, both on liabilities and assets sides of the
balance sheet. Fixed, current / savings accounts on the liabilities side; and mortgages,
loans (e.g., personal, housing, auto, and educational) on the assets side, are the more
important of the products offered by banks. Related ancillary services include credit
cards, or depository services.

Retail banking refers to provision of banking services to individuals and small

business where the financial institutions are dealing with large number of low value
transactions. This is in contrast to wholesale banking where the customers are large,
often multinational companies, governments and government enterprise, and the
financial institution deal in small numbers of high value transactions.

Consumer Banking Focus

Most retail banks focus on the needs of consumers versus commercial account
holders. Teller cages are most often dedicated to walk-in consumer patrons. Retail
bank tellers are trained to focus on consumer checking and savings needs. Branch
managers are trained to offer customer-service issues in regards to those accounts.
Commercial account transactions are typically limited to on to two separate stations
dedicated to merchant accounts.

Internal Promotions to Cross-Sell Services

Retail banks utilize their internal and external space to promote and cross-sell
services. Inside of the bank, customers will see standing floor signs to promote
interest rates on mortgages and savings accounts. Desks that house deposit slips are
typically topped with brochures about various checking and savings instruments.
Tellers might even wear a badge or button that states “ask me about …” to promote
new services.

CRM Practices
Customer Relationship Management (CRM) techniques are growing in application
among most major retail banks. Websites assist and guide current and prospective
customers to branch locations. Site visitors are offered the opportunity to provide
feedback about their online banking experiences as well as their on-site banking
experiences. Retail banks use this information to track and monitor customer
satisfaction, gauge the feasibility for new products and services, and to identify areas
for improvement of the customer service experience inside of branches.

Extended Hours, Services, Locations

Retail banks are often governed by state banking regulations in terms of hours of
operation. Banks deploy savvy strategies to make sure that no opportunity is missed to
service customers. Most understand that customer’s hours may not match bank hours.
As a result, most retail banks have ATM machines that can accommodate every
banking need from making a deposit and inquiring about account balances, to
transferring funds between checking and savings accounts. Banks are now also
offering their services inside of major grocery stores, retail super stores, gas stations
and convenience stores, to make their services accessible on a 24-hour basis so
customers have “touch point” access to retail banking services near where they work,
live and shop.

New Customer Incentives

Retail banks have a major marketing mission to increase new customers. They utilize
many advertising tactics and strategies to achieve their new customer goals. This
often includes broadcast television and radio advertising, print and magazine
advertising, and public relations efforts to sponsor national and local events. Some
retail banks will provide a cash reward up to several hundred dollars to open a new
account. The overall goal is to increase new accounts, among both prospective and
existing customers. Banks capture information to rate and rank new customers via
information furnished on credit applications to assess credit worthiness and approve
new account applications.
• Retail banking aims at doing banking business in large volume of transactions
involving low value.
• The retail banking portfolio includes deposits and assets linked products as well as
other financial services provided to individuals for personal consumption.
Retail banking business is an attractive market segment with opportunities for growth
and profits.
• It provides an opportunity to banks to diversify their asset portfolio. Since loans are
given to a large number of consumers and transactions have very low value, the risk
of NPA is reduced because all the consumers do not make default in making loan
repayment at a time.
• Retail banking is based on the maxim “do not keep all the eggs in one basket”
research and methodology

OBJECTIVES:-

India strives for economic development, and it has done so since it gained its
independence from Europe in 1947. Its commitment to growth became most
pronounced when, in 1990, it chose to shift from a government-controlled banking
system to a privately controlled banking system for the overall good of the
economy. Now, retail banks in India work to further the same growth-oriented
objectives.

Stimulate the Indian Economy

While the Indian economy is steadily growing, poverty is still widespread. Since
banks thrive in an economically healthy environment, they have a vested interest in
promoting the health of the citizens in their market. One of the approaches that
Indian banks use to stimulate the Indian economy includes providing access to
financial services that could help citizens create jobs, access education and develop
skills.

India strives for economic development, and it has done so since it gained its
independence from Europe in 1947. Its commitment to growth became most
pronounced when, in 1990, it chose to shift from a government-controlled banking
system to a privately controlled banking system for the overall good of the
economy. Now, retail banks in India work to further the same growth-oriented
objectives.

Tailor Services to Indian Consumers

As of July 2010, India had more than one billion inhabitants. This means India has
the second largest population in the entire world. About 82 percent of India's one-
billion-plus inhabitants--about 948,000,000 people--practice Hinduism. Hinduism
has an estimated 330,000 deities, and worshipers of these deities make donations to
them. Retail banks meet India’s religious demands by providing their religious
consumers with convenient ways to make online donations to their deity or deities
of choice.

Stimulate the Indian Economy

While the Indian economy is steadily growing, poverty is still widespread. Since
banks thrive in an economically healthy environment, they have a vested interest in
promoting the health of the citizens in their market. One of the approaches that
Indian banks use to stimulate the Indian economy includes providing access to
financial services that could help citizens create jobs, access education and develop
skills.

India has about 600,000 villages, many of which remain financially underserved.
Providing financial services to these villages and educating their inhabitants about
the proper use of those services furthers the objective of stimulating the Indian
economy.

Serve the Growing Population of Wealthy Citizens

Every year since 1997, India's economy consistently grew by about seven percent.
India's percentage of high-net-worth individuals is slated to grow at a rate that is
among the highest of any other nation in the world. For banks, growing wealth
means a growing need for car loans, mortgages, credit cards and wealth
management services. Indian retail banks aim to meet these needs by providing a
variety of innovative services.

Be a One-Stop Shop for Consumers

Retail banks in India recognize that if they want to remain competitive, they must
reduce the need for clients to jump from bank to bank to have various needs met.
They do this by expanding their number of locations and improving their
technology. The aim is to become a one-stop shop so that they can provide their
customer with the convenience that she is unable or unwilling to do without.
Mission:-

"Creating Value for all its customers,Investors and Employees for being the first choice
for all stakeholders."

Vision:-

"To position PNB as the `Most Preferred Bank` for customers, the `Best Place to Work
In` for employees and a `Benchmark of Excellence` for the industry."

Fired by the spirit of nationalism and founded on the idea that Indians should have a
national bank of their own, Punjab National Bank Ltd was the result of the efforts of
far-sighted visionaries and patriots, among whom were persons like Lala Lajpat Rai,
Mr. E C Jessawala, Babu Kali Prasono Roy, Lala Harkishan Lal and Sardar Dyal
Singh Majithia. Incorporated under the Act VI of 1882, Indian Companies Act, the
Bank commenced operations on April 12, 1895 from Lahore, with an authorised total
capital of Rs 2 lac and working capital of Rs 20,000. Prophetically, the Bank chose
"Stability" as its telegraphic address, as the future course of events were to prove - the
Bank withstood various financial crises including the trauma in the form of partition
of India when the Bank had to close 92 offices (33%) in west Pakistan which
constituted 40% of its deposits and 15 of its staff fell victims to the frenzy. The
registered office was shifted to Delhi and the Bank honoured all the deposit claims of
the refugees even on the basis of whatever little evidence they could produce.
Subsequently, the Bank registered impressive performance and grew from strength to
strength.
A pioneer throughout, the Bank distinguished itself by appointing auditors in 1895
long before it was mandatory; introduced the "teller" system in 1944 (another first );
established profit sharing bonus, provident fund and voluntary outside audit well
before they formed keystones of good management.
Nationalisation came in 1969 which unleashed a new chapter in the long history of the
Bank. Keeping with the economic ideology of catalyzing development and
amelioration of poverty by funding various self-employment schemes, PNB expanded
its presence rapidly in unbanked areas. The Bank donned the role of a facilitator in
providing the vital input of credit and consistently exceeded the national goals in
respect of priority sector lending. With its large presence throughout the country and
with a view to strengthening the rural credit delivery system, the Bank sponsored
Regional Rural Banks (RRBs).
PNB has established itself firmly as one of the premier banking institutions in the
country with a long tradition of sound and prudent banking. The bank`s growth has
been aided by take-over/merger of 7 private sector banks during different periods in
its history. The first ever and the only merger of a nationalized bank with PNB was in
1993, viz., New Bank of India.
By late 1980s when the first whiff of liberalization came about, the Bank initiated
strategic moves towards diversification; and in 2002, 20% of government ownership
was disinvested through a very successful IPO to the public. In 2003, the erstwhile
Nedungadi Bank Ltd (e-NBL), a Kerala based private bank was amalgamated with
Punjab National Bank. This was the seventh merger in PNB’s history of more than
115 years. PNB’s management team has been quite successful in managing the
mergers and ensuring the integration process in a smooth and effective manner. It may
be added that no other bank in the nationalized bank group has a track-record of so
many mergers. This has improved the franchise value of the Bank, particularly, in the
relatively underrepresented Kerala region. In order to meet future capital requirements
on account of implementation of Basel II norms, in March 2005, the Bank came out
with Follow-on Public Offer (FPO) through the book building process, reducing the
shareholding of Govt of India to 57.8%.
Punjab National Bank with more than 5400 domestic offices including Extension
Counters has the largest network amongst the nationalized banks i.e. next only to SBI.
The bank has a strong franchise value and provides a host of financial products and
services, both to the retail customer and corporate business. It has continued to fulfill
its social responsibilities and made significant progress in adoption of technology,
keeping with its objective of transforming itself into a techno-savvy Bank.
During 2008-09, the Bank achieved the landmark of becoming the largest Nationalized
Bank to bring ALL BRANCHES/EXTENSION COUNTERS into Core Banking
Solution (CBS). The strong franchise enjoyed by the Bank, combined with its
technological capabilities provides the Bank competitive advantages.
The Bank also continues to discharge its social obligations and addresses environmental
concerns with added vigour, which include free medical camps, distribute artificial
limbs, tree plantation and blood donation camps, besides donations to Hospitals,
Schools etc. The Bank supports various societies, charitable institutions and NGO
/organisations working for the benefit of downtrodden, weaker sections of society,
orphans, underprivileged, spastics, handicapped, mentally retarded children, women in
shelter homes, etc. The Bank also contributes for fighting diseases like diabetes,
tuberculosis, AIDS, leprosy etc. Donations are also extended for purchase of water
coolers, ambulances and building infrastructure facilities at hospitals/sch
Hypothesis

Findings and Hypothesis Testing & Conclusion Banking sector

being backbone of the economy, its performance is vital for the performance of
economy. The major economic indicators of the economy like Gross Domestic Product,
Tax –GDP ratio, Index of Industrial Production, Foreign Direct Investment, Bank
Deposit Growth, Credit Off take have been showing decelerating trend in last five
yearsThe global financial crisis of 2008 changed the growth momentum achieved
during 2004-08. The large fiscal stimulus of 2010 and 2011 created temporary spike in
GDP growth. The fiscal deficit started increasing at a very high level. This reduced
ability of government in stimulating the economy. The net result of slow government
expenditure along with lull in private consumption and investment spending reduced
the growth rate to below 5%. The high growth years The high growth years witnessed
the goldilocks period. The high growth coupled with low inflation prompted RBI to
reduce major monetary policy rates. The Cash Reserve Ratio and LiquidityRatio were
reduced during this period. The Repo and Reverse Repo rates were also reduced. The
net effect was that deposit and advances interest rates continued to come down. The
credit off take increased to the highest level. The deposit growth rate which picked at
24% of GDP and Credit Growth at 37% of GDP in the year 2005-06, the high growth
years created unprecedented opportunities of business. The big tide of global growth
lifted all boats of the economy. The performance of banks during the same time reached
at the highest levels. Deposits and advances were growing at high levels. Non –
performing assets were reducing fast. Profitability was improving of commercial banks.
The low growth years Financial crisis in western world created doubts in the minds of
depositors about couple of banks in India. The misconception reached the level where
people started withdrawing their deposits from couple of banks with fear of bankruptcy
of these banks. The GDP which was growing at an average of 9.3% in preceding three
years came down to 6% in 2008-09. The slowdown in world economic growth and
resultant slowdown in Indian economy was evident. Government had to stimulate
economy. the
economic activities continued to slowdown. This reduced GDP growth showed its
impact on all sectors including banking. The level of deposits increased at 16% of GDP
and Credit Growth at 17% of GDP in the year 2012-13. This study is an attempt to
access the performance of banks during this turbulent time. The parameters are
considered between the high and low growth years to find out whether banks
continuedto perform at the same level or their performance showed a similar trend. The
number of banks is selected across the types of banks. The fifteen banks which are
chosen continue to have more than 52% of the total business (Deposits and Advances)
done by all commercial banks reporting to RBI. The summary of finding is given on
the parameters considered for the study. 8.1 Capital Adequacy
• Commercial banks need to maintain certain level capital against the business that they
do. BASEL Committee has given the criteria from time to time to maintain Tier I and
Tier II capital. It has been observed that level of bank capital has gone up in low growth
years.
• The ability and freedom of private sector banks to raise the capital helps these banks
to maintain high level of capital adequacy ratio. The average of 11% capital Adequacy
has improved to 12.5% of the total assets in low growth years. The higher the level of
bank capital, better it is for the bank to withstand the losses created by the banks.
• DBS had the highest 30.06% capital adequacy during high growth years. ICICI bank
has the highest 17.61% capital adequacy in low growth years. It has been observed that
ICICI concentrated on assets quality improvement in last couple of years, contrary to
the high growth obsession it had during high GDP growth years.

• SCB has been maintaining lowest level of capital adequacy among the selected banks,
during the entire time period of analysis. SCBs capital adequacy ratio has been in the
range of 10.25% to 11.75% of total assets.
• It has been observed that p values calculated for this parameter, except for couple of
banks, are not less than 0.05% on level of significance hence it is
concluded that there is no significant change in the performance of banks in case of
capital adequacy requirements
. 8.2 Assets Quality
One of the important aspects of banking is the quality of assets it has. The lower the
bad loans profitable it is for a bank. The non-performing assets reflect the quality of
assets. It has been observed that non-performing assets were reducing during 2004-08
because credit growth was highest during the same time. The standalone non-
performing assets are increasing throughout the period. This has been a concern in
banking system.
• The non-performing assets started increasing because slowing economic activities
and increasing interest rates in last five years. The high debt ridden companies are
findingOne of the important aspects of banking is the quality of assets it has. The lower
the bad loans profitable it is for a bank. The non-performing assets reflect the quality
of assets. It has been observed that non-performing assets were reducing during 2004-
08 because credit growth was highest during the same time. The standalone non-
performing assets are increasing throughout the period. This has been a concern in
banking system.
• The non-performing assets started increasing because slowing economic activities
and increasing interest rates in last five years. The high debt ridden companies are fiit
difficult to service their debt on time.
• The corporate debt restructuring has been on the rise in last couple of years. The banks
considered in the study have shown a trend. Private sector banks have been able to
control the level of non-performing assets throughout the period. Public sector banks
had lower ranking during high growth years reflecting the inability to control the bad
assets.
• Foreign sector banks have been ranked during high growth years reflecting the
inability to control the bad assets.
• Foreign sector banks have been ranked lower in low growth years reflecting inability
to control the bad assets. AXIS and HDFChave the highest rank during high growth
years.
• AXIS has the highest rank in low growth years.
• DCB has been ranked lowest throughout the period of analysis showing it has never
been able to control bad assets.
• It has been observed that p values calculated for this parameter, except for couple of
banks, are not less than 0.05% on level of significance hence it is concluded that there
is no significant change in the performance of banks in caseof assets quality parameter.
8.3 Management Efficiency
• The decision making capacity and efficiency of top management and human resource
is reflected by this parameter. The business and profit per employee reflects how
productive the human resource of a bank is.
• The low level of cost of deposits reflect the ability of top management to have right
mix of low cost high volatile deposits with high cost low volatility deposits. The high
level of credit to deposit ratio shows that ability of management to find enough
opportunities to lend.
• The competition has intensified in the banking sector; management efficiency
provides the necessary competence to the bank. The inter group comparison of banks
show a very different picture.
• The public sector banks are known for employing more manpower.
• Private sector and foreign sector banks use third party services more often which
increases their efficiency level. Public sector banks have also been allowed to avail such
services. It has now become level playing field.
• The efficiency still differs from one type to other type of banks. Foreign sector banks
have the highest efficiency rankings througoutthe time period of this study. Profit per
employee of foreign sector banks is four times that of public sector banks. Private sector
banks have been ranked between public and foreign sector banks.
• CITI has been ranked highest during high growth years.
• SCB has been ranked and high level of credit to deposit ratio highest during low
growth years. The usual non performing bank called DCB has been ranked lowest in
this parameter throughout the period of time. The reason DCB has been ranked lowest
is because it has been facing losses during most of the years of analysis.
• It has been observed that p values calculated for this parameter, except for couple of
banks, are less than 0.05% on level of significancewhich proves that null hypothesis is
rejected and the alternate hypothesis that there has been a significant difference in the
performance of banks is accepted.
8.4 Earnings capacity
• Corporate sector works for profit. The profitability of any business concern depends
on its productivity. Productivity determines earning capacity.
• The return on assets and return on equity are most important parameters of an
organization to measure productivity. Since banks depend on two types of income
(Interest Income and Fee based Income), interest income is considered separately as a
percentage of total assets, and total income is considered as a percentage of total assets
and equity infused in the bank.
• Return on investment (ROI) ultimately determines the sustainability of an
organization. The ability of using bank assets to generate income and profit is measured
in this parameterThe net interest margin, which is difference between interest rate
received on advances and interest rate paid on deposits, is one of the most important
parameter from the prospective of productivity.
• SCB is ranked highest in high growth years among the banks analyzed in this study.
• HDFC is ranked highest in low growth years which reflect the ability of this bank to
perform in tough economic environment.
• Foreign sector and private sector banks have highest rankings in this parameter.
• Productivity depends on ability of the bank and not on sector it operates in, is reflected
by the lowest performance of DCB.
• It has been observed that p values calculated for this parameter, except for couple of
banks, are not less than 0.05% on level of significance hence it is concluded that there
is no siginifcantchange in the performance of banksin case of earnings capacity
parameter.
Liquidity
• Commercial bank business depends on deposits. Depositors more often expect their
money to for transactions. The majority of transactions in India still happen through
cash.
• People’s faith in a bank is of utmost importance for a bank to function as a commercial
organizationPeople’s faith can only be achieved by giving as much cash as they may
wish to withdraw. Maintaining enough cash in the system is critical for the banks.
• High liquidity lowers profitability and lower liquidity challenges the faith of
depositor. The cash deposit ratio and current account and savings account deposits to
total deposits ensure the adequate flow of liquidity in the system.
• Deutsche has been ranked highest throughout the time period of analysis and DBS is
ranked lowest throughout the time period of analysis.
• Deutsche and DBS being from the same sectorshowcase that it depends on how
individual banks are managed rather than which sector they belong to.
• PNB saw the highest decline in ranking in this parameter.
• SBI has the highest improvement.
• Public sector banks as a group are ranked lowest during the analysis in low growth
years. It is worth noting that PNB has second rank and BOB has the fourteenth rank in
low growth years. This reiterates the fact that it depends on individual bank rather than
group.
• It has been observed that p values calculated for this parameter, except for couple of
banks, are less than 0.05% on level of significance which proves that null hypothesis is
rejected and the alternate hypothesis that therehas been a significant difference in the
performance of banks is accepted.
8.6 Deposits
• Deposits of commercial banks have gone up from high growth years to low growth
years.
• ICICI could not maintain the deposit growth rate of high growth years. The default
fear of 2008 reduced the confidence on this bank. ICICI borrowed heavily to fund
advances it gives to the borrowers.
• SBI has the highest growth rate in deposits in low growth years. The campaign it had
in 2008 as “safe Bank of India” yields the result in case of high deposit growth. It is
observed that overall growth of deposits in the system (all commercial banks together)
reduced substantially during last five years.
• There is a strong case to assume that smaller banks in India could not attract
depositors the way big banks could in last couple of years
. • The banks studied have shown that public sector bank deposits increased in low
growth years.
• Private and foreign sector bank deposits decreased in low growth years. This can be
attributed to the faith of depositors. Financial crisis changed the way banks are
perceived in India. Public sector banks being largely owned by government people have
more faith in these banks.
• The growth rates at cumulative level are divided in high growth and low growth years
for all the banks considered for this study. The growth rate data is given as (high growth
years, low growth years).
• Public sector banks; SBI (12.87, 17.92), PNB (17.04, 18.94) BOB (18.30, 25.54),
BOI (18.74, 20.82), Canara (16.53, 18.43) all banks have showed increase in growth of
deposits in low growthyears.
• Private sector banks; ICICI (39.80, 4.26), Axis (39.39, 23.87), HDFC (35.78, 24.38),
DCB (13.70, 8.33), IndusInd (17.45, 23.33). All banks have showed decrease in growth
of deposits in low growth years except IndusInd.
• Foreign sector banks; CITI (21.54, 7.70), SCB (15.69, 11.18), HSBC (28.06, 6.39),
Deutsche (50.04, 8.97), DBS (120, 26.93) All banks have showed decrease in growth
of deposits in low growth years.
• It has been observed that p values calculated for this parameter are less than 0.05%
on level of significance which proves that null hypothesis is rejected and the alternate
hypothesis that there has been a significant difference in the performance of bank is
accepted.
8.7 Advances
• The advances given by banks largely determine the income for the bank. The advances
can be given from deposits and bank borrowed money.
• The individual bank growth in advances is calculated. The growth rates at cumulative
level are divided in high growth and low growth years for all the banks considered for
this study. The growth rate data is given as (high growth years, low growth years).
• SBI (24.91, 20.31), PNB (17.04, 18.94) BOB (18.30, 25.54), BOI (18.74, 20.82),
Canara (16.53, 18.43). There has been marginal rise in advances growth in low growth
years except for SBI.
• ICICI (34.57, 6.17),AXIS (53.43, 27.27), HDFC (40.23, 31.02), DCB (13.69, 11.59),
IndusInd (19.54, 28.26). There has been significant decline in advances growth on low
growth years except IndusInd.
• CITI (25.14, 6.62), SCB (20.77, 13.22), HSBC (29.74, 4.82), Deutsche (45.18,
24.36), DBS (111.98, 45.73). There has been significant decline in advances growth in
low growth years.
• This reflects the actual slowing economy. The slowing GDP is reflecting in reduced
growth rate of advances.
• It has been observed that p values calculated for this parameter are less than 0.05% on
level of significance which proves that null hypothesis is rejected and the alternate
hypothesis that there hasbeen a significant difference in the performance of banks is
accepted.