A Study of Non Performing Asset

Analysis of
Punjab National Bank (Karnal)

Industry
Profile

Industry Profile

The origin of the Indian banking industry may be

traced to the establishment of the Bank of
Bengal in Calcutta (now Kolkata) in 1786.
The Indian banking sector consists of 26 public
sector banks, 20 private sector banks and 43
foreign banks along with 61 regional rural banks
(RRBs) and more than 90,000 credit
cooperatives.

Industry Profile

The Indian Banking industry currently worth s

Rs. 81 trillion (US $ 1.31 trillion) and banks are
now utilizing the latest technologies like internet
and mobile devices to carry out transactions and
communicate with the masses..
The Banking Industry is expected to recruit
about 8.4 million people as per the growth rate
each year. May create up to 20 lakh new jobs in
the next 5-10 years.

Company
Profile

Company Profile

An Overview

Punjab National Bank opened for business on 12

April, 1895 in the building opposite the Arya
Samaj Mandir in Anarkali in Lahore.

The founder of bank was Lala Lajpatrai (18651928).

Sardar Dayal Singh Majithia - founder of Dayal

Singh College and the Tribune; was the First
chairman.

Company Profile

The bank has over 6,300 branches and over 7,900

ATMs across 764 cities. It serves over 80 million
customers.
Punjab National Bank is one of the Big Four banks of
India, along with State Bank of India, ICICI Bank and
Bank of Baroda.
The bank has been ranked 248th biggest bank in the
world by the Bankers' Almanac.
PNB has a banking subsidiary in the UK (PNB
International Bank, with seven branches in the UK),
as well as branches in Hong Kong, Kowloon, Dubai
and Kabul.

Company Profile

Mission

Banking for the unbanked .

VISION
To be a Leading Global Bank with Pan India footprints and
become a household brand in the Indo- Gangetic Plains,
providing entire range of financial products and services
under one roof.

Company Profile

Products
Products of Punjab National Bank are :
Agriculture Banking, Corporate Banking,
Financial services, International and NRI
Banking, Micro small and medium enterprises
Banking ,Personal Banking, social Banking

Research
Methodology

Research Methodology

Objectives
The objective of the making report is:
To know why NPAs are the great challenge to the
Public Sector bank.
To know what steps are being taken by the Indian
banking sector to reduce the NPAs?
To evaluate the comparative ratios of the
Public Sector Banks with concerned to the NPAs.

Research Methodology

RESEARCH DESIGN

Descriptive Research Design

SAMPLE DESIGN
Population - Basically the persons who are availing
the services of Punjab national bank are consider as
population.

Research Methodology

Sample Unit
Region of study is karnal considered as sample unit.

Sampling technique
A probability sampling technique that is simple random
sampling used.

Sample Size
The sample size for the study was 100.

Research Methodology

DATA COLLECTION
Primary Data - Questionnaire
Secondary Data - Websites
STATISTICAL TECHNIQUE

Ratios

Research Methodology
LIMITATIONS OF THE STUDY
It was critical for me to gather the financial data of the
bank so the better evaluation of the performance of the
banks are not possible.
Since the Indian banking sector is so wide so it was not
possible for me to cover all the banks of the Indian
banking sector.
Sometime there is wrong response from the
respondent.

Results
And
Discussion

Results and Discussion

1. How did you come to know about

PNB bank?
Options
Friends

Response Percentag
e
53
53

Market
29
Executive
Exhibition 12
s
Others
6

29

Total

100

100

12
6

Interpretation:
53% of the respondents
by friends,
29% of respondents by
market executive
Only 12% of respondents
by exhibition
rest 6% are others.

Results and Discussion

Whom did you contact first?

Option Respon Percen

s
se
tage
Market 30
30
Executi
ve
PNB
63
Branch
Others 7
Total
100

63
7
100

Interpretation:
30 % by market
executive ,
63% by PNB branch and
rest of the7% by others.

Results and Discussion

How often do you visit the bank?

Option
s
Daily
Weekly
Monthly
Quarterl
y
Total

Respon
se
45
30
15
10

Percen
tage
45
30
15
10

100

100

Interpretation:
45% peoples are visit
bank daily,
30% peoples are visit
bank weekly,
15% peoples are visit
bank monthly and
rest of 10% peoples are
visit bank quatarly.

Results and Discussion

Are you fully aware of bank services like ATMs, net

banking and phone banking?

Option Respon Percen

s
se
tage
Yes
60
60
No

40

TOTAL 100

40
100

Interpretation
60% people said Yes
and
40% people said No.

Results and Discussion

Do you think PNB is a safe place for your

money?

Optio Respo Percen

ns
nse
tage
Yes
70
70
No

30

TOTA 100
L

30
100

Interpretation
70% people said yes
30% people said No

Do you known about SARFEASI Act ?

Options Respon Percent

se
age
Yes
40
40
No

60

TOTAL 100

60
100

Interpretation
70% people said yes and
30% people said No

Conclusion

Conclusion

The only problem that the Public Sector Banks are

facing today is the problem of non performing assets.
The non performing assets means those assets which
are classified as bad assets which are not possibly be
returned back to the banks by the borrowers.

If we analyze the past years data, we may come to

know that the NPAs have increased very drastically
after 2001. In 1997 the gross NPAs of the Indian
banking sector was 47,300crore where as in 2001 the
figure was 63,883 and which increased at faster rate
in 2003 with 94,905crore. The Public Sector Banks
involve its nearly 50% of share in the NPAs.

Recommendations

Recommendations

(1) Each bank should have its own independent credit

rating agency which should evaluate the financial
capacity of the borrower before than credit facility.
(2) The credit rating agency should regularly evaluate
the financial condition of the clients.
(3) Special accounts should be made of the clients
where monthly loan concentration reports should be
made.
(4) It is also wise for the banks to carryout special
investigative audit of all financial and business
transactions and books of accounts of the borrower
company when there is possibility of the diversion of
the funds and mismanagement.

Recommendations

Proper training is important to the staff of the banks

at the appropriate level with on going process. That
how they should deal the problem of NPAs, and what
continues steps they should take to reduce the NPAs.
Willful Default of Bank loans should be made a
Criminal Offence.
No loan is to be given to a Group whose one or the
other undertaking has become a Defaulter.

Thank you