CHAPTER-1

PROFILE OF THE COMPANY

A bank is a financial intermediary that accepts deposits and channels those deposits
into lending activities, either directly by loaning or indirectly through capital markets. A
bank links together customers that have capital deficits and customers with capital
surpluses.
Range of activities
Activities undertaken by large banks include investment banking, corporate banking,
insurance, private banking, consumer finance, foreign exchange trading, commodity
trading, trading in equities, futures and options trading and money market trading.
Importance of Banks in financial sector
Financial institutions in a community can form the core of economic development.
Although they shouldn't be expected to finance revitalization programs single handedly,
they should be considered as essential to success. Yet banks and other local financial
institutions have largely ignored local improvement efforts in recent decades. In an
increasingly focused effort to satisfy their stockholders, they have looked for investments,
which provide the highest rate of return. As a result, their investment money has gone
elsewhere, to other regions of the country or even to other parts of the world. In doing so,
often they have ignored their responsibilities to the local community in which they are
based, and from which comes most of their business. Local banks need to be reacquainted
with their need to be locally involved. Downtown organizations should include local
bankers, and downtown leaders should feel comfortable including them as integral
members of revitalization programs.
1

Reserve Bank of India

It has three Parts:1. Commercial Banks
2. Cooperative Societies
3. Other Institutions
1. Commercial banks
a. Public Sector Banks

PUBLIC
SECTOR

Nationalised Bank

14 major banks
nationalised on
19 july 1969

State Bank Of
India

Regional Rural
Banks

6 banks
nationalised on
15 april 1980

Figure 1: public sector bank

b. Private Sector Banks

Foreign Banks In India

Non Scheduled Banks

PRIVATE SECTOR
BANKS

Foreign Banks

Other Indian Banks

Figure 2: private sector bank

2

Private Banks

Local Area Banks

2. Cooperative Societies
Cooperative
Societies
State land
Development

State
Cooperative
Central
Cooperative

Central Land
Development
Bank

Primary
agriculture
credit societies

PLDB

primary urban credit

societies

Figure 3: cooperative societies

3. Other institutions

Other Institutons

Government

N.S.C

Post
office
saving
bank

Public sector

E.P.F.

LIC,
UTI,
IIDBI

ICICI,
IFCI

Private sector

Chits

Figure 4: other institutions

Nidhis

Corporate bodies

PUNJAB NATIONAL BANK

1.1 Company Profile
With its presence virtually in all the important centers of the country, Punjab National
Bank is nationalised bank i.e. public sector bank which offers a wide variety of banking
sector which include corporate and personal banking, industrial finance, agricultural
finance, financing of trade and international banking. Punjab National Bank with 112
year tradition of sound and prudent banking is one among 300 global companies and
seven Indian companies which are expected to emerge as challengers to Worlds leading
blue chip companies.
At the same time, the bank has been conscious of its social responsibilities by financing
Agriculture and allied activities and small scale industries (SSI). Considering the
importance of small scale industries bank has established 31 specialized branches to
finance exclusively such industries.
Keeping in tune with changing times and to provide its customers more efficient and
speedy service, the Bank has taken major initiative in the field of computerization. All the
Branches of the Bank have been computerized. The Bank has also launched aggressively
the concept of "Any Time, Any Where Banking" through the introduction of Centralized
Banking Solution (CBS) and over 2409 offices have already been brought under its
ambit. PNB also offers Internet Banking services in the country for Corporates as well as
individuals. Internet Banking services are available through all Branches of the Bank
networked under CBS. Another step taken by PNB in meeting the changing aspirations of
its clientele is the launch of its Debit card, which is also an ATM card.

1.2 Heritage
Established in 1895 at Lahore, undivided India, Punjab National Bank (PNB) has the
distinction of being the first Indian bank to have been started solely with Indian capital.
The bank was nationalized in July 1969 along with 13 other banks. From its modest
beginning, the bank has grown in size and stature to become a front-line banking
institution in India at present.
Now Punjab National Bank is one of the Big Four banks of India, along with State Bank
Of India, ICICI Bank and Bank Of Baroda. It is the third largest bank in India in terms of
asset size.
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 services
under one roof
Punjab National Bank is national bank with extended banking subsidiary in the UK, as
well as branches in Hong Kong, Dubai and Kabul.
Punjab National Bank
Head office - 7, Bhikaji Cama Place, New Delhi 110607
Tel:

011-26102303,011-23323654

Fax:

011-26196456,011-23711663

Email:

: hosd@pnb.co.in

Website:

:http://www.pnbindia.in

Owner(s)

: Government of India

Founder

: Lala Lajpat Rai

5

Founded

: Lahore (1895)

PNB operates in all states of India. Some geographical area where PNB branch is situated
in Agra, Delhi, Kerala, Amritsar, Chandigarh, Dehradun, Chennai, Faizabad, Hamirpur,
Indore etc.
Punjab National Bank was registered on 19 May 1894 under the Indian Companies Act,
with its office in Anarkali Bazaar, Lahore but now the registered office is 7, Bhikaji
Cama Place, New Delhi.
1.3 Nature of business
Pnb has 2 aspects:
1.31 Banking - the process which accepts deposits and channels those deposits
into lending activities, either directly by loaning or indirectly through capital markets. A
bank links together customers that have capital deficits and customers with capital
surpluses.
1.32 Financial Service it includes locker facility, trading through demat account,
issuing debit card and credit card, insurance facility etc.
General Banking is the specific functional area in finance in which the bank is
operating.
1.4 Products
Various products are offered by Punjab National Bank.

1.41 Insurance
PNB partnered with Met Life Inc. to form a Life Insurance Joint Venture in India called
PNB MetLife India Insurance Co. Ltd. The products of PNB MetLife are being sold with
trust of PNB under corporate agency arrangement with this insurance giant. Launch of
the PNB MetLife Partnership On 4th Feb 2013, in a glittering ceremony at the Taj
Mahal Hotel in Delhi, the partnership was launched by Shri P. Chidambaram, the
Honorable Union Minister of Finance, Govt. of India.
The Bank has made Tie-up with Oriental Insurance Co. Ltd. (OICL), a Public Sector
Undertaking, which offers variety of products e.g. Fire Insurance, Motor Vehicle
Insurance, marine insurance and misc. insurance policies like shop keepers policy
personal accident policy, health insurance policy, overseas travel insurance policy at a
competitive price with assured post sale services.
1.42 Debit Card
The PNB debit card is essentially an on-line product. It bears the master/RuPay logo on
the front. Master logo card in India and all over the world at all Master card enabled
ATMs and merchant establishments with POS machines and also over the internetfor ecommerce transactions.
Types of debit card:
a. Classic debit card
b. Platinum debit card
c. Mitra ATM card
d. Ru Pay debit and kisan card

1.43 Credit Card

PNB Global is a truly international Credit Card which is welcomed at over 29 million
merchant establishments & 1 million Visa ATMs worldwide.
Types of credit card:
a. Platinum card
b. Gold card
c. Classic card
1.44 Corporate banking
Corporate can avail following
a. Loan against future lease rentals:
PNB has introduced a scheme for property owners having their property situated
in metro/urban/semi urban/rural centers.
b. EXIM finance:
To offer efficient services to exporters and importers like per-shipment service,
inward or outward remittances, letter of credit etc PNB has set up connectivity
with customs department to facilitate payment or receipt of duty.
c. PNB Expo gold card for Exporters:
PNB issues gold card to exporters as per RBI guidelines. The scheme ensures
easy availability of export credit on best terms to credit worthy exporters.
1.45 Investment Banking
PNB Investment Services Limited, offers investment banking to cater both domestic and
international clients, apart from acting as consultants in execution of capital market deals,
8

issue management services and advising on potential takeovers of brands, businesses and
assets. Also in the business plan is providing advice for corporate and capital structuring
and restructuring services.
1.46 Loans
A loan can be provided to both individuals as well as business enterprises for the purpose
of meeting business or personal needs. Personals needs would cover childrens higher
education, travel, daughters marriage, medical emergencies etc. loans, however, are not
available for speculative purpose.
Interest Rate
BPLR: 14%
Base Rate:10.25%
1.47 Wealth Management
In the present scenario, investors are looking for higher Returns and proper management
of their disposable funds. Life goals include buying a home, saving for a childrens
education or planning for retirement etc. Wealth Management Services is the process of
meeting an individuals life goals through the proper management of his finances. The
portfolio of the prospective clients shall be managed in line with achieving specific
investment objective. It is with this perspective Punjab National Bank has launched this
service.
1.48 Current Deposit Account
Current Deposit Account is very convenient product for frequent banking transactions by
individuals, firms, HUF, companies, institutions etc. there is no limit on number of

transactions in such accounts and are most suitable for business operations. The product
is available at all branches.
1.49 Mutual Fund
In recent times MF have gained rapid popularity as a good investment vehicle and public
at large is attracted towards it. PNB has variety of schemes and income options offered
by mutual funds which can suit financial preferences of all classes of investors, be it
retail, corporate or institutional.
1.410 Gold Loan
PNB offers Loan against Gold Jewellery/Ornaments and gold coins. Facility available as
Demand Loan/Overdraft Even Loan upto Rs.10 Lacs for non-productive purposes which
can be repayable in 12 months.
1.411 Recurring Deposit Scheme
Low minimum monthly deposit amount of Rs.100 only. For the period of deposit ranging
from 6 months to 120 months. Loans against deposits available.
1.412 Tax Saver Scheme
Initial deposit of Rs.100 only or in multiplies thereof subject to maximum deposit of Rs.
1 Lac per year. For the minimum deposit period of 5 years and maximum of 10 years.
Rebate on Income Tax under Section 80c.
1.413 Pension Loan
Loan upto Rs 3 Lacs for pensioners drawing pension from PNB Bank. Overdraft facility
also available. To meet personal needs including medical expenses. No margin, no
processing fee. Quick and easy disbursal. East repayment upto 60 monthly installments.

10

1.414 Advance Against Immovable Property

Loan for business purposes against mortgage of self occupied or vacant house or flat or
commercial property. Facility available in the shape of term loan on reducing DP basis.
Amount of finance : Rs. 10 Lacs to Rs. 100 Lacs. Repayment maximum 84 months.
1.415 Scheme for Financing to Traders
Scheme for financing stock in trade, book debts and other assets used in trade. Loan
available for construction or purchased or furnishing of shop or showroom. Attractive
rate of interest for retailers wholesalers, individuals and companies etc.
1.5 SIZE OF PNB
1.51 Total manpower of Punjab National Bank was 65541 till March 2014.

CADRE
OFFICERS
CLERKS
SUB STAFF
(incl.PTS)
Total

MARCH 2013
NUMBER
%
23610
25449
14233

MARCH 2014
NUMBER
%

37.30
40.21
22.49

23811
26864
14866

63292
65541
Table 1: In terms of Manpower

1.52 Total earnings and assets:

Particulars

In INR

In US$

Revenue

474 billion

8.7 billion

Total Assets

4.97 trillion

90.9 billion

Net Income

49.54 trillion
906 million
Table 2: Earnings and assets

11

36.33
40.98
22.69

1.6 Organization Structure of PNB:

Board of
directors

CMD

ED

GM
(Credit)

GM
(
NPA
&
Weak
Account)

GM
(Retail &
lending)

DGM

AGM

GM
(Treasury
)

DGM

AGM

GM
(Deposits
)

GM
(IRMD)

GM
(Audit)

FGM'S

......

DGM

......

AGM

Functional
head

Figure 5: Organizational Structure

The bank has introduced Grid/Committee system in credit sanction process wherein
every loan proposal falling within the vested powers of DGM and above is discussed in a
credit committee which on the merit of the case recommends the proposal to the
sanctioning authority. Such committee has been formed both at CO and ZO level. The
credit committee at CO includes GM Credit and CGM/GM-RMD. For credit proposals
falling within the vested power of CGM/GM, the credit committee at CO includes
DGM/AGM/Chief Manager-CD and DGM/AGM/Chief Manager RMD. The credit
administration division is to be assisted by Risk Management Division (RMD) and
Industry desk for risk vetting and techno-economic feasibility of credit proposal.

12

1.7 Position of PNB

PNB is second largest bank in India in terms of asset size and second largest in terms of
branches.
Particular

PNB

Number of branches 5800

SBI

Bank Of Baroda Canara Bank

17000

4283

4600

in India
Table 3: position of PNB
1.8 Present Leaders
PRESENT LEADERSHIP

DESIGNATION

Ms. Natasha

HR Manager, North Circle, Rajendra

place.

Mr. Sachin Rathi

Officer Manager, North Circle, Rajendra

place.

Ms. Vandana

Credit Manager, North Circle, Civil Line.

Mr. Nitin

Credit Manager, North Circle, Pitampura

Table 4: Present Leaders

Interacted:
With AGM: A. K. Roy , T. Badwal, M. P. Gupta
With Officers: Nitin Aggrawal, Mr. Mital, Sachin Rathi, Arora Trilok , Ravi Ji
With Clerks: Neena Gupta, Nidhi Grag, Vinita Sehgal.

13

1.9 Sources of data

Data is collected from primary as well as secondary sources.
1.91 Primary Sources: Through observation and questionnaire.
1.92 Secondary Sources: Through internet, books, Reserve Bank of Indias guidelines,
PNB Pratibha [ magazine of Punjab National Bank], Past and Present Financial
Statements:
i.

Balance Sheet

ii.

Profitability Statements

Loan Policy and Internal Circulars of the bank reports, journals, Internal circulars.

14

CHAPTER- 2
SWOT ANALYSIS OF THE COMPANY
2.1 Strength, Weakness, Opportunities And Threats of Punjab National Bank
Strength

Weakness

a. Nationalised bank i.e. Government

a. Delay in policy implementation.

Owned so this gives PNB an edge

b. High government intervention so

over private banks in terms of

customer security.

c. Inadequate

b. Diversified operations with 5800

branches and 62,392 manpower.

d. Schemes for small and medium

scale businesses.
e. One of the oldest bank thatswhy
PNB

has

Diversified Portfolio consisting all

the products under its belt, which
help it to extend the relationship
with existing customers Bank and
attract new customers.

15

and

branding as compared to other

d. High interest rates.

approach.

loyality.

advertising

banks.

c. Strong IT support with best fit

customer

less adaptive.

Opportunities

Threats

a. Small scale business banking across

India.

a. Economic

crisis

and

economic

fluctuation.

b. More expansion in other countries

b. Highly competitive environment.

for international banking.

c. Stringent banking norms by RBI

c. Better customer services.

and government.

d. Special interest rate can be offered

d. Innovative schemes from other

at festive season

players.

Consumer

expectations

have increased many folds in last

few years and the bank has not been
responsive enough to meet them on
time.
Table 5: SWOT analysis

16

2.12 ETOP
It is the acronym for environment threat and opportunity profile. It involves dividing the
environment into different sectors and then analyzing the impact of each sector on the
enterprise.
Environment threat and opportunity profile [ETOP] FOR PNBEnvironmental sector

Impact of each sector

Social

Customers now prefer online banking which leads to

increase in demand in debit card and credit card.

Economic

Banking sector is the backbone of any economy therefore

good economy is the ideal opportunity and helps in
flourishing.

Regulatory

PNB performs according to the guidelines of RBI so any

deviation is not allowed. If the norms are less Stringent
then bank can perform more effiently and can take first
mover advantage by grabing the opportunity.

Competitors

High competition and innovative schemes from private

players is a threat to PNB.

Technology

Technological upgradation plays an important role.

Computerized banking has reduced paper work and saved
time.
Table 6: ETOP analysis

17

2.2 Best Policies Adopted By PNB

2.21 In Marketing
The effort to promote banking business is quite distinguished affair. At present, it has
become very tricky due to the changing trends of industry, increasing competition and
efficiency

of

regulatory

environment,

and

the

financial

system.

This is the time when banks are offering new and innovative services, frequently in the
market. The content of promotional tools should help the customer in making most
valuable decision. This can be firmly said that well-designed promotional strategies are
very important to promote banking services effectively. In marketing any product or
service,

customer

satisfaction

has

been

given

the

importance.

PNB launched several innovative, value-added products and services to project a

customer friendly image. It launched a special service for corporate customers called
'telebanking and remote login' to support transactional requests. This facility would be
available at 593 branches, and remote login at 269 branches. The banks trade finance
solutions, called EXIMBILLS, were intended to handle trade finance transactions
efficiently and enhance the range of services provided to corporate and network branches.
a. Segregating and targeting existing high value customers.
b. Setting up call centers and outbound sales force to secure new customers.
c. Aggressive marketing through print and television media.
d. Festival bonaza tool of sales promotion is used by PNB bank on the ocassion of
DIWALI AND HOLI.
e. Advertisements are given in television and information is also given about
products.

18

f. Road side canopies, hoardings, banners also used for marketing.

g. Social websites are also used for doing marketing of products & services of PNB
through festivals to promote their product and services.
h. Services offered by ing vysa bank through radio also.
i. Pop up ads.
2.22 In Human Resource
Skilled human resources are one of the most important pre-requisite for the efficient
management of a large and diverse retail credit portfolio. Punjab National Bank that it
should employee highly skilled and efficient employees for the betterment of the services.
a. Redesigning of branches so that employee and customer have good feeling for
which business process reengineering (BPR) team was constituted in June 2003
with McKinsey & company as consultants. The BPR's basic goal was to create an
operating architecture that would facilitate service delivery of international
standards.
b. Institution for advanced learning in Delhi and Lucknow is situated to provide state
of the art training in financial products to middle level and senior level executives.
c. Performance appraisal is conducted by self through a well defined structure so no
inequality and staffs are satisfied which leads to high motivation.
2.23 In Finance
The financial statements of Punjab national bank have been prepared on the historical
cost basis and conform, in all material aspects, to Generally Accepted Accounting
Principles (GAAP) in India which encompasses applicable statutory provisions,

19

regulatory norms prescribed by Reserve Bank of India (RBI), Accounting Standards (AS)
and pronouncements issued by The Institute of Chartered Accountants of India (ICAI).
a. The Financial Statements have been prepared on the going concern basis with
accrual concept.
b. Fixed assets are stated at historical cost except those premises, which have been
revalued. The appreciation on revaluation is credited to revaluation reserve.
Depreciation on assets (including land where value is not separable) are provided
on straight-line method based on estimated life of the asset.
c. Advances are classified as performing and non- performing assets; provisions are
made in accordance with prudential norms prescribed by RBI.
d. Investments have been categorized into Held to Maturity, Available for Sale and
Held for Trading in terms of RBI guidelines. Securities acquired by the Bank with
an intention to hold till maturity is classified under Held to Maturity.
e. Current tax is determined on the amount of tax payable in respect of taxable
income for the year and accordingly provision for tax is made.
f. Revenue recognition: Income / expenditure is generally accounted for on accrual
basis.
g. The Bank availed the service of M/s KPMG for carrying out the external audit of
risk management systems.

The Bank has started conducting Group Risk

Management Committee meetings at quarterly intervals wherein representatives

from domestic or overseas subsidiaries participate.

20

2.24 In Information Technology

a. The Bank has a robust credit risk framework and has placed credit risk rating
models on central server based system PNB TRAC, which provides a scientific
method for assessing credit risk rating of a client.
b. With Core Banking Solution (CBS) covering entire branch network, the Asset
Liability Management in respect of all assets and liabilities is being done on daily
basis.
c. PNB has also tied up with CIBIL which also helps in credit rating and shows a
particular persons history of loan taken and whether he was able to repay the loan
in time or he was a defaulter.
2.3 Variation In Practice
2.31 In Human Resource
a. The process of recruitment of employees in PNB is through entrance test and
interview whereas in classroom we learn that it includes various steps through
which employees get select for the job.
b. In HR performance appraisal is conducted by self through a well defined
structure.
2.32 In Finance
a. The format of financial statements such as balance sheet, cash flow statement etc
taught in classroom is different from the format of organisation in current
scenario.
b. Current account ratio is considered 1.33 in PNB instead of 2:1 which was taught
in class.
21

c. Long term source is used for long term use as well as part is used for short term
use. But short term fund is only used for short term use.

Long Term
Source

Short Term
Source

long term
use

only short
term use.

short
term use
Fig 6: Usage of funds.
2.33 In Information Technology
In IT finacle core banking is used to know the loan amount paid for a particular month,
assets and liability can seen etc.
a. PNB trac is used for credit rating:

SCORES OBTAINED

RATING

DESCRIPTION

Above and 80.00

PNB AAA

Minimum Risk

77.5-80.00

PNB AA+

72.5-77.5

PNBAA

70-72.5

PNB AA-

67.5-70

PNB A+

62.5-67.5

PNB A

60-62.5

PNB A-

57.5-60

PNB BB+

Marginal Risk

Modest Risk

22

52.5-57.5

PNB BB

Average Risk

50-52.5

PNB BB-

47.5-50

PNB B+

42.5-47.5

PNB B

40-42.5

PNB B-

30-40

PNB C

High Risk

30 and below

PNB D

Caution

Marginal Acceptable Risk

Table 7: PNB Rating

23

CHAPTER 3
DATA COLLECTION AND PRESENTATION
(A) Data Collection
3.1 In Marketing Department
Banks are offering new and innovative services, frequently in the market. The content of
promotional tools should help the customer in making most valuable decision. This can
be firmly said that well-designed promotional strategies are very important to promote
banking services effectively. In marketing any product or service, PNB launched several
innovative, value-added products and services to project a customer friendly image like
Corporate banking, Personal banking, Industrial finance Agricultural finance, Financing
of trade, International banking, Home loan, Auto loan, ATM/DEBIT Card, Deposit
Interest rates, Credit Interest rates, Other Services Locker Facilities, Senior Citizen
Schemes, Merchant Banking, Electronic Fund Transfer & Clearing Services, etc
3.11 Pricing Policy
Pricing Policy of Punjab National Bank is maintained by Reserve Bank of India. The
Reserve Bank of India has urged banks to follow a uniform, fair and transparent pricing
policy and not discriminate between customers at home branch and non-home branches.
In its 2013-14 monetary policy statement, the banking regulator has observed that some
banks were discriminating their own customers by levying a charge on products and
services, if the transaction is not done at the home branch.

24

3.12 Joint Venture

a. Punjab National Bank is in a joint venture with Infosys for the implementation of
a Centralised Banking Solution for it. The bank plans to implement Centralised
Banking Solutions establishing connectivity between its branches to cover 1,500
to 2,000 branches and all ATMs by 2004.
b. PNB MetLife Insurance:
PNB MetLife India Insurance Company Limited (PNB MetLife) is a joint
venture where MetLife, Inc. and Punjab National Bank (PNB) are the majority
shareholders. PNB MetLife was previously known as MetLife India Insurance
Company Limited (MetLife India). MetLife India has been present in India since
2001. PNB MetLife provides a wide range of protection and retirement products
through its Agency sales of over 24,000 financial advisors and bank partners, and
provides access to Employee Benefit plans for over 800 corporate clients in
India.
c. Punjab National Bank has entered an agreement with Oriental Bank of
Commerce, Indian Bank, UTI Bank and Global Trust Bank for sharing ATMs
spread across the country.
3.13 Promotion
PNB is promoting through advertisement on television, newspaper, journals and
magazines, Outdoor Advertising Hoardings, online marketing etc but not using personal
selling, tele calling through sales man, gifts or prizes for customers.

25

3.14 Customer Relation Management

Customer relationship management enables companies to provide excellence real-time
customer service through the effective use of individual account information.
PNB has been able to maintain its founding principles through more than 100 years of
change and continue to bring the most efficient service possible to its customers without
losing the friendliness and special attention they are used to receiving. A motto that is
used repeatedly in all PNB branches is "know your customers. According to Circle
Head, PNB Lucknow, Mr. B.L. Gupta Having the Right Offer For The Right Client,
At The Right Time Via The Right Channel.
It was a Strategy adopted In the Business Model of the Banks and Clearly Focused to
Value Generation.
The CRM helps the bank now to better retain existing customers by cross-selling and upselling, to attract new customers by offering various value added products and services,
and even convert loss making customers into profitable ones.
PNB also uses online trading services for customers. Now consumers can enjoy the
convenience of investing in financial products from the comfort of their home / offices by
using SMC Global's website, also online trading link in provided on pnb bank's website.
Benefits attained by PNB:
Higher customer retention, improved profits as compared to previous year profits,
improved efficiency between departments and increased loyalty as customer can file a
complaint against any officers through online and corrective actions is taken by circle
office.

26

3.2 In Human Resource Department

3.21 Recruitment and Selection
Punjab National Bank invites online application forms from eligible IBPS PO Exam
qualified candidates for Recruitment of Probationary officers Staff to work its various
offices and branches all over India. A candidate with valid PO Score card and any
graduate degree is the required qualifications for Punjab National bank PO recruitment
Punjab National Bank Probationary officer salary consists of basic, DA, HRA, CCA,
Fixed personal allowance and Health benefits also included to employees.
Profit sharing plan is 1% of profit which is distributed through head office. Deductions
from salary are PF, TDS, Loan installment if any.
Applicant must have at least 21 years of age and not more than 30 years for OC/General,
20 to 34 years for OBC and 18 to 35 years for ST/ST Candidates as per the reference
date.
Punjab National Bank Selection process depends, applicant performance in Group
Discussion and Interview rounds. For that, need to fill the online application form by
paying the challan fee.
Highlights of Punjab National Bank PO Recruitment through IBPS:
a) Age Limit: 21 to 30 years
b) Education: Any graduation Degree
c) Salary: Rs.14500 to Rs.25700
d) Selection procedure: Group discussion and Interview together.
27

e) Post Name: Punjab National bank PO Recruitment

3.22 Welfare
a. PNB is having Good working environment as compared to other public sector
organization.
b. Working hours is 10a.m. 5p.m. and there is no over time allowance offered.
c. Leave policy of PNB: 12 casual and privilege leave is every 11 days 1 sick leave
is allowed.
d. No transportation facility is provided unless for official purposes like meeting
clients or head office meeting.
e. For safety purpose smoke deductor is placed in every branch and other welfare
facility includes hospital facility, newspaper and books at home, pension benefits
and LTC is also provided.
3.23 Employee Grievance Redressal
PNB is using online grievance redressal naming PNB SAMADHAAN The employee
grievance redressal system, is being introduced with a view to lend an ear to the genuine
work-related and personal problems faced by the staff members which have a bearing on
their work, so that the same can be considered for resolution.
PNB SAMADHAN SCHEME TIME FRAME FOR REDRESSAL OF
GRIEVANCES OF STAFF MEMBERS
A formal system of redressal of genuine work-related and personal grievances of working
staff members PNB SAMADHAN has been introduced in the Bank and detailed

28

guidelines in this regard have been issued to all offices vide HRDD Circular No. 408
dated 26.06.2007.
The said circular inter-alia provides that staff members may address their grievances
directly to the Chairman & Managing Director of the Bank, subject to fulfillment of
certain conditions. However, no grievance will be entertained at the CMDs Secretariat
until the same has been taken up and responded to by the concerned Regional Office /
Zonal Office / Head Office Division of the staff member.
3.24 Training And Development
a. Punjab National Bank that has tied up with a business School in Singapore to train
their middle and senior management on leadership skills. The banks are also
lining up incentives such as paid holidays abroad, leadership and training
programmes at top b-schools.
b. Freshers training for new joiners is carried out at circle office and facilities for
accommodation is given for attending external training programmes.
c. Promotion policy of PNB is after 3 years employee eligible can clear written and
interview exam.
d. Number of transfers:
CLERK after every 5 Years
Officers after every 3 Years

29

3.3 In Finance Department

3.31 For Balance sheet refer to annexure 1
3.32 For Profit and loss statement refer to annexure 2
3.4 In Information Technology
3.41 The Bank has a robust credit risk framework and has placed credit risk rating models
on central server based system PNB TRAC, which provides a scientific method for
assessing credit risk rating of a client.
3.42 With Core Banking Solution (CBS) covering entire branch network, the Asset
Liability Management in respect of all assets and liabilities is being done on daily basis.
3.43 PNB has also tied up with CIBIL which also helps in credit rating and shows a
particular persons history of loan taken and whether he was able to repay the loan in
time or he was a defaulter.
3.44 New IT Based Products/Services
a. Kiosk Banking Solution has been made live across the Bank and RRBs through
internet and intranet.
b. Automation of Fund Transfer Orders (FTOs) for MGNREGA has been
implemented in all RRBs.
c. Migration of Parvatiya Gramin Bank with Himachal Gramin Bank was
successfully completed.
d. HORTNET Project: Customisation has been done for Maharashtra. Through this
portal, subsidy from horticulture department is being processed for Maharashtra
State.

30

e. XOOM - RDA (Rupee Drawing Arrangement): The application is developed to

automate the payments of beneficiaries in India. The software makes total
automation of the payments, which was handled by IBB Branch manually.

31

(B) Data Presentation

In finanace:
RATIO ANALYSIS: as refered to annexure-A
3.21 Current Ratio - It used to determine a companys ability to pay off its shirt-terms
debts obligations. Generally, the higher the value of the ratio, the larger the margin of
safety that he company possesses to cover short-term debts.
Current ratio = current assets/current liability
The table shows, Current Ratio of both the year are as follows:
Particulars

31st March 2013

31st March 2014

Current Ratio

1.57

1.59

Table 8: Current Ratio

In this table, we can see that the current ratio though has increased from 2013 to 2014.
This shows that, companys ability to meet its liabilities is 32 increasing. But still the
company has not reached 2:1 which is a satisfactory ratio.

CURRENT RATIO
1.595
1.59
1.585
1.58
CURRENT RATIO

1.575
1.57
1.565
1.56
31.03.2013

31.03.2014

Fig 7: Current Ratio Analyses

32

3.22 Quick ratio: It is also termed as Acid-Test Ratio. This ratio is ascertained by
comparing the liquid assets (i.e., assets which are immediately convertible in to cash
without much loss) to current liabilities. Prepaid expenses and stock are not taken as
liquid assets. This may be expressed as:
Liquid Assets
Quick Ratio =
Current Liabilities

Particulars

31st March 2013

31st March 2014

Quick Ratio

22.40

25.19

Table 9: quick ratio

Quick Ratio
25.5
25
24.5
24
23.5
Quick Ratio

23
22.5
22
21.5
21
31.03.2013

31.03.2014

Fig 8: quick ratio

33

3.23 Debt-Equity Ratio: This ratio expresses the relationship between long-term debts
and shareholders funds. This ratio is calculated to assess the ability of the firm to meet
its long term liabilities. Generally, debt-equity ratio of 2:1 is considered safe. Higher the
ratio more risk is there, and lower the ratio better it is. The formula of the ratio is:
Debt equity ratio =

Debt or long term loans

Shareholders funds or Net worth

The table shows, Debt-equity ratio of both the year are as follows:
Particulars

31st March 2013

31st March 2014

Debt-Equity Ratio

0.93:1

0.48:1

Table 10: Debt- Equity Ratio

In this table, we can see that the Debt-equity ratio has decreased from 2013 to 2014 to
0.45. This provides sufficient protection to long-term lenders.

DEBT-EQUITY RATIO
1
0.8
0.6
0.4
0.2
0

1)

DEBT-EQUITY RATIO

31.03.2013

31.03.2014

0.93

0.48

Fig 9: Debt Equity Ratio Analysis

34

3.24 Net working capital: This shows the difference between current assets and current
liabilities. Working capital is required to meet the day to day expenses. In order to
survive a company must make a proportion of working capital to meet the expenses. The
formula of working capital is:
Net Working capital= Current assets Current liabilities
The table shows the change in working capital:
Particulars

31st March 2013

31st March 2014

Net working capital

44318705.64

235175637

Table 11: Working Capital

The above table shows that, the working capital has increased from 2013 to 2014. This
shows that, company have sufficient capital to meet its daily expenses.

NET WORKING CAPITAL

250000000
200000000
150000000
100000000
50000000
0
NET WORKING CAPITAL

31.03.2
013
44318705.64

Fig 10: Working Capital Analysis

35

31.03.2
014
235175637

3.25 Earnings per Share:

The profitability of the firm from the point of view of ordinary shareholders can be
measured in terms of number of equity shares. This is known as Earnings per Share. It is
calculated as follows:
Net Profit after Tax
Earnings per Share =
No. of Equity Shares outstanding
Particulars

31st March 2013

31st March 2014

Earnings per share

134.31

92.32

Table 12: EPS

Earning Per Share

160
140
120
100
80

Earning Per Share

60
40
20
0
31.03.13

31.03.14

Fig 11: EPS

36

3.26 Current assets: Current assets of the company have increased from 2013 to 2014.
The formula to calculate the ratio is:
Current assets = Working capital + Current liabilities
The table shows the change in current assets:
Particulars

31st March 2013

31st March 2014

Current Assets

148257884.57

335953587.78

Table 13: Current Assets

The above table shows the change in current assets which is increasing, it means
company is in a good position and is earning profits.

CURRENT ASSETS
400000000
350000000
300000000
250000000
200000000
150000000
100000000
50000000
0
CURRENT ASSETS

31.03.2013

31.03.2014

148257884.6

335953587.8

Fig 12: Current Assets Analyses

3.27 Current Liabilities: Current liabilities of the company have decreased from 2013 to
2014. The formula to calculate the ratio is:

37

Current liabilities = Current assets Working capital

The table shows the change in current liabilities:
Particulars

31st March 2013

31st March 2014

Current liabilities

8189460

32535892.69

Table 14: Current Liabilities

The above table shows that, the current liabilities are decreasing; it means a company is
earning sufficient to pay its liabilities.

CURRENT LIABILITIES
35000000
30000000
25000000
20000000
15000000
10000000
5000000
0
CURRENT LIABILITIES

31.03.2013

31.03.2014

32535892.69

8189460

Fig 13: Current Liabilities Analyses

38

3.28 Capital : Capital has increased in the company from 2013 to 2014. Capital can be
both authorized share capital.
Year

Capital

March 2014

362.07

March 2013

353.47

March 2012

339.18

March 2011

316.81
Table 15: Capital

370
360
350
340
330

Capital

320
310
300
290
Jan/11

Jan/12

Jan/13

Fig 14: Capital

39

Jan/14

3.29 Profits earned: as refered to annexure-B

Profits that have earned during various year:
Year

Profits earned

March 2014

3342.58

March 2013

4747.67

March 2012

4884.2

March 2011

4433.50

5000
4500
4000
3500
3000
Profits earned

2500
2000
1500
1000
500
0
Jan/11

Jan/12

Jan/13

Jan/14

Fig 15: profit earned

Profits earned 2014 is less than as compared to previous years.

40

CHAPTER 4
FUNCTIONAL ANALYSES
4.1 In Marketing
Years ago banks did not understand or pay special attention to marketing.
The marketing promotion advertising sales and business reputation marketing campaign
to promote the concept, not the concept itself but the banks were marketing. Increased
competition faced by banks on savings. Advertising and promotion activities of banks
began selling heavily.
Use marketing

research to measure the potential of markets to offer the bank on

marketing initiatives and Finally, the use of appropriate incentives to motivate executives
to achieve goals in a competitive environment. It is necessary as:
a. Awareness among Customers
Modern technology has made customers aware of the developments in the economic
environment, which includes the financial system. Financial needs of the customers
have grown multi fold into various forms like quick cash accessibility, money transfer, asset
security, increased return on surplus funds, financial advice, deferred payments etc.
b. Quality as a Key Factor
With the opening up of the economy, fast change has been experienced in every activity, and banking
has been no exemption. Quality is the watch word in the competitive world, which is
market driven and banks have had to face up to this emerging scenario crucial need of
the hour

41

c.

Growing Competition

Increased completion is being faced by the Indian banking industry from within the
system with other agencies both, local and foreign, offering value added services.
Competition is no more confined to resource mobilization but also to lending and other
areas of banking activity. The foreign commercial bank with their superior technology,
speed in operations and imaginative positioning of their services has also provided the
necessary impetus to the Indian banks to innovate and complete in the market place.
4.2 In Human Resource
A business unit needs employees to look after different activities. This is called
manpower or human resource. Such human resource needs to be developed fully so that it
will make positive contribution for the progress and prosperity of a business unit. For this
systematic development and management of human resources is necessary.
The Human Resource field in the Banking Industry is considered as one of the process of
discovery and transformation. The field of Human Resource can be described as
emergent and dynamic within the cultural business aspect in a Banking Industry. The
success of todays banking business will sparsely depends on the human resources of the
organization, in which plays a crucial role in providing the services needed.
Responsibilities:
a. To be the principal sponsor & guardian of HR policies in the Bank.
b. To propose & obtain agreement on changes to these policies from time to time &
to ensure that policies which have been agreed are being implemented throughout
the Bank.

42

c. To contribute fully to the task of meeting the business challenges which the bank
has to face by supporting Branch/Unit Managers in continuously developing the
potential of employees & in creating conditions in which all the employees are
motivated to meet the objectives of the Bank.
d. To continuously monitor the Banks strategies to ensure that HR policies are
appropriate & that employee numbers & skills are fully supportive of such
strategies.
e. To support line management in their day-to-day management of the workforce by
providing advice & consultancy on personnel & performance management issues.
4.3 In Finance
a. The financial statements of Punjab national bank have been prepared on the
historical cost basis and conform, in all material aspects, to Generally Accepted
Accounting Principles (GAAP) in India.
b. The Financial Statements have been prepared on the going concern basis with
accrual concept.
c. Current ratio though has decreased from 2013 to 2014. This shows that,
companys ability to meet its liabilities is less.
d. Capital has increased in the company from 353.47 in 2013 to 362.07 in 2014.
e. Profits has decreased in 2014 as compared to previous year due to growing
competition.
f. Availability of cash balance is 45218.45 in 2014 which is more than 27135.38 in
2013.

43

g. Revenue recognition: Income / expenditure is generally accounted for on accrual

basis.

4.4 In Information Technology

Indian public sector banks that hold around 75 % of market share do have taken
initiative in the field of IT. As far as banking industry in India is concerned it can be
said that although the Indian banks may not be as technologically advanced as their
counterparts in the developed world, they are following the majority of international
trends on the IT front. The strength of Indian banking lie in withering storms and rising
up to the expectations from all the quarters-catching up with all the global trends is a
matter of time.
Introduction of PNB TRAC, Core banking solution[ CBS ] and tie up with CIBIL
increased the efficiency of PUNJAB NATIONAL BANK. And many new technologies
are also there.

44

CHAPTER 5
SUMMARY AND CONCLUSION
A. Findings/Results
India's second largest public sector lender Punjab National Bank (PNB) acquired 30 per
cent stake in Metlife India Insurance Co. Ltd. This shows the financial stability.
Banks are using all the techniques in IT Department to analyse operational risk
management or measurement.
a. Banks are very optimistic about preparation of accounting books
b. Banks are ready to improvement their existing risk management framework.
c. Banks are following the guidelines of Basel III and it help them to deal with
risk more effectively.
B. Practical knowledge
a. How to open an account and what are the documents required for opening an
account.
b. Study about three types of retail loans i.e. education loan, home loan & auto loan,
and what are the formalities to sanction these loans.
c. How to analyze the balance sheet and income statement of PNBs loan customer
to know the financial position of the company in order to know that the company
is able to pay the loan or not.
d. Credit Information Bureau (India) ltd (CIBIL): CIBIL collects and maintains
records of an individuals payments pertaining to loans and credit cards. These
records are submitted to CIBIL by member banks and credit institutions, on a

45

monthly basis. This information is then used to create Credit Information Reports
(CIR) and credit scores which are provided to credit institutions in order to help
evaluate and approve loan applications.
e. How to do Crediting Rating in order to know which company is more risky and
which one is less risky. PNB sanction loan to that company which is less risky.
For this PNB use PNB TRAC in which Different types of credit rating are: AAA,
AA, A+, A-, BB, B-, C, D, E.
C. Limitations:
a. Delay in policy implementation.
b. High government intervention so less adaptive. Therefore cant take first mover
advantage.
c. Inadequate advertising and branding as compared to competitors.
d. Information collected is not from all branches because of different geographical
location so that is a hindrance.
D. Suggestions:
a. The management must commit itself to allocate major resources and adequate
time to training.
b. Ensure that training contribute to competitive strategies of the firm. Different
strategies need different HR skill for implementation. Let training help employees
at all levels acquire the needed skill.
c. Ensure that there is proper linkage among organizational, operational and
individual training needs.

46

d. Services provided to the customers need to be improved, as customers are not

handling properly.
e. Proper name plates should be there in front of every desk so that customers dont
get confused where they have to go.
f. Excess of paper work for this Electronic database should be designed carrying all
the available and important information related to the proposals accepted.
g. More advertising and promotion should be made to increase awareness among
customers about the product and services offered by PNB and market share.

47

Bibliography

Chhabra T.N. (2011), Marketing Management, Dhanpat Rai & Co., New Delhi,
pp-1.159-1.167

Gupta C.B. (2011), Business Organisation and Management, Mayur Paperbacks,

New Delhi,pp-19.6-19.9

Macmillan Publication, Risk Management, edition 1, CAIIB 2010

PNB Pratibha (2012), PNB staff journal, Vol 53, No.3, pg 9-10

Websites

http://www.moneycontrol.com/india/stockpricequote/bankspublicsector/punjabnat
ionalbank/PNB05 downloaded on 28.06.2014

http://www.moneycontrol.com/news-topic/punjab national bank/ downloaded on

20.07.2014

www.google.com

https://www.pnbindia.in/En/ui/CorporateMission.aspx downloaded on 19.06.2014

http://www.moneycontrol.com/annual-report/punjabnationalbank/accountingpolicy/PNB05
http://pnbindia.in/new/Upload/English/Financials/PDFs/Analyst_ppt_June_13.pdf

48

Annexure A
Refer Para no.3.21
Balance sheet of Punjab National Bank
------------------- in Rs. Cr. -------------------

Capital and Liabilities:

Total Share Capital
Equity Share Capital
Share Application Money
Preference Share Capital
Reserves
Revaluation Reserves
Net Worth
Deposits
Borrowings
Total Debt
Other Liabilities & Provisions
Total Liabilities

Assets
Cash & Balances with RBI
Balance with Banks, Money at Call
Advances
Investments
Gross Block
Accumulated Depreciation
Net Block
Capital Work In Progress
Other Assets
Total Assets
Contingent Liabilities
Bills for collection
Book Value (Rs)

Mar '14
12 mths

Mar '13
12 mths

Mar '12
12 mths

Mar '11
12 mths

362.07
362.07
0.00
0.00
35,533.25
0.00
35,895.32
451,396.75
48,034.41
499,431.16
15,093.44
550,419.92
Mar '14
12 mths

353.47
353.47
0.00
0.00
32,323.43
0.00
32,676.90
391,560.06
39,620.92
431,180.98
15,019.15
478,877.03
Mar '13
12 mths

339.18
339.18
0.00
0.00
27,477.89
0.00
27,817.07
379,588.48
37,264.27
416,852.75
13,524.18
458,194.00
Mar '12
12 mths

316.81
316.81
0.00
0.00
21,191.75
0.00
21,508.56
312,898.73
31,589.69
344,488.42
12,328.27
378,325.25
Mar '11
12 mths

22,245.58
22,972.87
352,688.87
140,365.76
3,419.74
0.00
3,419.74
0.00
8,727.10
550,419.92
238,008.93
0.00
991.39

17,886.25
9,249.13
308,725.21
129,896.19
3,357.68
0.00
3,357.68
0.00
9,762.58
478,877.04
231,810.55
0.00
924.45

18,492.90
10,335.14
293,774.76
122,629.47
3,168.86
0.00
3,168.86
0.00
9,792.88
458,194.01
224,750.05
0.00
820.13

23,776.90
5,914.32
242,106.67
95,162.35
3,105.60
0.00
3,105.60
0.00
8,259.42
378,325.26
138,915.26
0.00
678.91

49

Annexure B
Profit and loss account of Punjab national bank.
As referred to 3.29
------------------- in Rs. Cr. -------------------

Income
Interest Earned
Other Income
Total Income
Expenditure
Interest expended
Employee Cost
Selling and Admin Expenses
Depreciation
Miscellaneous Expenses
Preoperative Exp Capitalised
Operating Expenses
Provisions & Contingencies
Total Expenses

Net Profit for the Year

Extraordionary Items
Profit brought forward
Total
Preference Dividend
Equity Dividend
Corporate Dividend Tax
Per share data (annualised)
Earning Per Share (Rs)
Equity Dividend (%)
Book Value (Rs)

Mar '14
12 mths

Mar '13
12 mths

Mar '12
12 mths

Mar '11
12 mths

43,223.25
4,576.71
47,799.96

41,893.33
4,215.92
46,109.25

36,428.03
4,202.60
40,630.63

26,986.48
3,612.58
30,599.06

27,077.28
6,510.45
0.00
352.39
10,517.26
0.00
9,338.21
8,041.89
44,457.38
Mar '14
12 mths
3,342.58
0.00
0.00
3,342.58
0.00
362.07
58.66

27,036.82
5,674.72
0.00
318.50
8,331.53
0.00
8,165.05
6,159.70
41,361.57
Mar '13
12 mths
4,747.67
0.00
0.00
4,747.67
0.00
954.38
162.20

23,013.59
4,723.48
0.00
292.26
7,717.10
0.00
7,002.75
5,730.09
35,746.43
Mar '12
12 mths
4,884.20
0.00
0.00
4,884.20
0.00
746.19
121.05

15,179.14
4,461.10
0.00
255.85
6,269.47
0.00
6,364.22
4,622.20
26,165.56
Mar '11
12 mths
4,433.50
0.00
0.00
4,433.50
0.00
696.99
113.07

92.32
100.00
991.39

134.31
270.00
924.45

144.00
220.00
820.13

139.94
220.00
678.91

50