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CHAPTER 1

INTRODUCTION

This is the organisation study conducted at Punjab national bank situated at Kodarma

(JHARKHAND).

It was a wonderful experience to know about the organisation, various departments, and their working

pattern and also about the organisation structure.

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This project helps in understanding how the PUNJAB NATIONAL BANK works, what are the future

prospects and general trends in the industry. This training expands the knowledge about the banking

industry and gives an overview of the plans of the organisation and how it tries to attract its customers

by offering best services.

There is lot of work discipline in the organisation. The training

provides practical exposure and it helps in applying theoretical

knowledge in a practical situation.

It helps in providing information about the various departments like

Marketing,Finance , Human resource department , sales etc. and this

study will help in future to deal with various circumstances.

INDUSTRY PROFILE

Early History of Banks

Currently, India has 96 scheduled commercial banks(SCBs) - 27 public sector banks (that is

with the Government of India holding a stake), 31 private banks (these do not have

government stake; they may be publicly listed and traded on stock exchanges) and 38 foreign

banks. They have a combined network of over 53,000 branches and 49,000 ATMs. According

to a report by ICRA (Investment Information and Credit Rating Agency ofIndia Limited)

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a rating agency, the public sector banks hold over 75 percent of total assets of the banking

industry, with the private and foreign banks holding 18.2% and 6.5% respectively.

Banking in India originated in the last decades of the 18th century. The first banks were The

General Bank of India which started in 1786, and the Bank of Hindustan, both of which are

now defunct. The oldest bank in existence in India is the State Bank of India, which originated

in the Bank of Calcutta in June 1806, which almost immediately became the Bank of Bengal.

This was one of the three presidency banks, the other two being the Bank of Bombay and the

Bank of Madras, all three of which were established under charters from the British East India

Company. For many years the Presidency banks acted as quasi-centralbanks, as did their

successors. The three banks merged in 1921 to form the Imperial Bank of India, which, upon

India's independence, became the State Bank of India.

Indian merchants in Calcutta established the Union Bank in 1839, but it failed in 1848 as a

consequence of the economic crisis of 1848-49. The Allahabad Bank, established in 1865 and

still functioning today, is the oldest Joint Stock bank in India.(Joint Stock Bank: A company

that issues stock and requires shareholders to be held liable for the company's debt) It was not

the first though. That honor belongs to the Bank of Upper India, which was established in

1863, and whichsurvived until 1913, when it failed, with some of its assets and liabilities

being transferred to the Alliance Bank of Shimla.

When the American Civil War stopped the supply of cotton to Lancashire from the

Confederate States, promoters opened banks to finance trading in Indian cotton. With large

exposure to speculative ventures, most of the banks opened in India during that period failed.

The depositors lost money and lost interest in keeping deposits with banks. Subsequently,

banking in India remained the exclusive domain of Europeans for next several decades until

the beginning of the 20th century.

Foreign banks too started to arrive, particularly in Calcutta, in the 1860s. The

Comptoired'Escompte de Paris opened a branch in Calcutta in 1860, and another in Bombay

in 1862; branches in Madras and Pondicherry, then a French colony, followed. HSBC

established itself in Bengal in 1869. Calcutta was the most active trading port in India, mainly

due to the trade of the British Empire, and so became a banking center.

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The Bank of Bengal, which later merged with the Bank of Bombay and the Bank of Madras

to form the Imperial Bank of India in 1921.

The first entirely Indian joint stock bank was the Oudh Commercial Bank, established in 1881 in

Faizabad. It failed in 1958. The next was the Punjab National Bank, established

in Lahore in 1895, which has survived to the present and is now one of the largest banks in

India.

Around the turn of the 20th Century, the Indian economy was passing through a relative period of

stability. Around five decades had elapsed since the Indian Mutiny, and the social, industrial and

other infrastructure had improved. Indians had established small banks, most of which served

particular ethnic and religious communities.

Banking industry in India

The Banking Industry was once a simple and reliable business that took deposits from investors at a

lower interest rate and loaned it out to borrowers at a higher rate.

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The Banking Industry was once a simple and reliable business that took deposits from investors at a

lower interest rate and loaned it out to borrowers at a higher rate.

However deregulation and technology led to a revolution in the Banking Industry that saw it

transformed. Banks have become global industrial powerhouses that have created ever more complex

products that use risk and securitization in models that only PhD students can understand. Through

technology development.

Banking services have become available 24 hours a day, 365 days a week, through ATMs, at online

banking, and in electronically enabled exchanges where everything from stocks to currency futures

contracts can be traded.

The Banking Industry at its core provides access to credit. In the lenders case, this includes access to

their own savings and investments, and interest payments on those amounts. In the case of borrowers,

it includes access to loans for the creditworthy, at a competitive interest rate.

Banking services include transactional services, such as verification of account details, account

balance details and the transfer of funds, as well as advisory services that help individuals and

institutions to properly plan and manage their finances. Online banking channels have become key in

the last 10 years.

The collapse of the Banking Industry in the Financial Crisis, however, means that some of the more

extreme risk-taking and complex securitization activities that banks increasingly engaged in since

2000 will be limited and carefully watched, to ensure that there is not another banking system

meltdown in the future.

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Vision of Banks in India

The banking scenario in India has already gained all the momentum, with the domestic and

international banks gathering pace. The focus of all banks in India has shifted their approach to 'cost',

determined by revenue minus profit. This means that all the resources should be used efficiently to

better the productivity and ensure a win-win situation. To survive in the long run, it is essential to

focus on cost saving. Previously, banks focused on the 'revenue' model which is equal to cost plus

profit. Post the banking reforms, banks shifted their approach to the 'profit' model, which meant that

banks aimed at higher profit maximization.

Success Path for Banker

One of the biggest problems facing senior managers of banks today is attracting customers and

attaining growth, often in an environment where products and prices among competitors are close

substitutes. Traditional bases for differentiation, such as product features or cost, are becoming less

tangible. So the managements are forced to look for new ways to appear attractive to its target market

and simultaneously retain the existing one. From the annual survey conduct by FICCI, we found that

they rank their business strategies that have helped them in increased customer acquisition and

retention (On a scale of 1 to 8 with 8 being the most important marketing strategy). The results of the

Mode score being accorded by the Public, Private& Foreign banks are presented below:

0 2 4 6 8

Bank by Phone

Additional Customer Service Counters

Door Step Banking

Market Campaigns

Additional Sales force

Advertisements

Expansion of ATM Network

Technological Upgradation

Strategies Succesful in Customer Acqusition & Retention

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Technology has moved from being just a business enabler to being a business driver. Be it customer

service, reducing operational costs, achieving profitability, developing risk management systems, we

turn to technology for providing necessary solution. Technological up gradation was clearly identified

as one of the most successful strategy in Customer Acquisition and Retention followed by Expansion

of ATM Network, Advertisements and additional sales force.

Customer Retention and Customer Satisfaction are inexorably interred - linked. While consumers

may be happy to make payments and interact with their bank through convenient – and cheaper –

banking channels, they still expect high standards of service. A consistent service reflects the bank’s

brand and image across all channels. 93.75 per cent of respondent banks informed that superior

service pre and post banking has been one of the essential factors rated high by their customers. 75

per cent of respondent banks felt that Personal touch in the dealings has helped them in winning

customers.

*

Challenges facing by Banking industry in India

Ensuring Customer

Security 37.5%

Offering Customized

Products 37.5%

Being a leader in offering

innovative

products from time from time

37.5%

Better service pre and post

banking 93.75%

Personal Touch 75%

Key Factors that convert a satisfied customer into a loyal customer

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The banking industry in India is undergoing a major transformation due to changes in economic

conditions and continuous deregulation. These multiple changes happening one after other has a

ripple effect on a bank Refer fig. trying to graduate from completely regulated sellers market to

completed deregulated customers market.

Future challenges of Banks in India

The Indian banks are hopeful of becoming a global brand as they are the major source of financial

sector revenue and profit growth. The financial services penetration in India continues to be healthy,

thus the banking industry is also not far behind. As a result of this, the profit for the Indian banking

industry will surely surge ahead. The profit pool of the Indian banking industry is probable to

augment from US$ 4.8 billion in 2005 to US$ 20 billion in 2010 and further to US$ 40 billion by

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2015. This growth and expansion pace would be driven by the chunk of middle class population. The

increase in the number of private banks, the domestic credit market of India is estimated to grow from

US$ 0.4 trillion in 2004 to US$ 23 trillion by 2050. Third largest banking hub of the globe by 2040 -

is that vision too far away?

Industry Segmentation

Nationalized /Public sector banks

Dominate the banking system in India.

Nationalization of banks in India took place in 1969 by Mrs. Indira Gandhi.

Private Banks

Made banking more efficient and customer friendly.

Jolted public sector banks out of complacency and forced them to become more competitive.

Foreign banks

Have brought latest technology and latest banking practices in India.

Have helped made Indian banking system more competitive and efficient.

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Major Key Players

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CHAPTER 2

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COMPANY PROFILE

Punjab National Bank (PNB) (BSE: 532461), is a state-owned financial services company

located in New Delhi, India. It was registered on May 19, 1894 under the Indian Companies Act with

its office in Anarkali Bazaar Lahore. Today, the Bank is the second largest government-owned

commercial bank in India with about 5000 branches across 764 cities. It serves over 37 million

customers. The bank has been ranked 248th biggest bank in the world by the Bankers Almanac,

London. The bank's total assets for financial year 2007 were about US$60 billion. PNB has a banking

subsidiary in the UK, as well as branches in Hong Kong, Dubai and Kabul, and representative offices

in Amati, Dubai, Oslo, and Shanghai.

Punjab National Bank is one of the Big Four Banks

of India, along with ICICI Bank, State Bank of India

and Canara Bank.

History of BANK

1895: PNB commenced its operations in Lahore. PNB has the distinction of being the first

Indian bank to have been started solely with Indian capital that has survived to the present.

(The first entirely Indian bank, the Oudh Commercial Bank, was established in 1881 in

Faizabad, but failed in 1958.) PNB's founders included several leaders of the Swadeshi

movement such as Dyal Singh Majithia and LalaHarKishenLal, LalaLalchand, Shri Kali

Prosanna Roy, Shri E.C. Jessawala, ShriPrabhuDayal, BakshiJaishi Ram, and

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LalaDholanDass. LalaLajpatRai was actively associated with the management of the Bank in

its early years.

1904: PNB established branches in Karachi and Peshawar.

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

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

continued to operate in Pakistan.

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

Nidhi Ltd.

1961: PNB acquired Universal Bank of India.

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

September 1965: After the Indo-Pak war the government of Pakistan seized all the offices in

Pakistan of Indian banks, including PNB's head office, which may have moved to Karachi.

PNB also had one or more branches in East Pakistan (Bangladesh).

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

1969: The Government of India (GOI) nationalized PNB and 13 other major commercial

banks, on July 19, 1969.

1976 or 1978: PNB opened a branch in London.

1986 The Reserve Bank of India required PNB to transfer its London branch to State Bank of

India after the branch was involved in a fraud scandal.

1986: PNB acquired Hindustan Commercial Bank (est. 1943) in a rescue. The acquisition

added Hindustan's 142 branches to PNB's network.

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

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

2003: PNB took over Nedungadi Bank, the oldest private sector bank in Kerala. At the time of

the merger with PNB, Nedungadi Bank's shares had zero value, with the result that its

shareholders received no payment for their shares.

PNB also opened a representative office in London.

2004: PNB established a branch in Kabul, Afghanistan.

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PNB also opened a representative office in Shanghai.

PNB established an alliance with Everest Bank in Nepal that permits migrants to transfer

funds easily between India and Everest Bank's 12 branches in Nepal.

2005: PNB opened a representative office in Dubai.

2007: PNB established PNBIL - Punjab National Bank (International) - in the UK, with two

offices, one in London, and one in South Hall. Since then it has opened a third branch in

Leicester, and is planning a fourth in Birmingham.

2008: PNB opened a branch in Hong Kong.

2009: PNB opened a representative office in Oslo, Norway, and a second branch in Hong

Kong, this in Kowloon.

2010: PNB received permission to upgrade its representative office in the Dubai International

Financial Centre to a branch.

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PNB India’s Leading Nationalised Bank

166 Scheduled Commercial Bank in Indian Banking System.

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Ranked second strongest bank in Asia pacific by “The Asian

banker” (Singapore)

Vision and Mission

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"

Public sector banks share in total business of banking system has eroded from more than 93% in 1993 to 76% in 2009.

PNB maintained its share in system around 5-6% during same period.

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Mission

"Banking for the unbanked"

Operation Area And Business

Subsidiaries & JVs

PNBIL

Punjab National Bank (International) Limited (PNBIL) is a wholly owned UK subsidiary of Punjab

National Bank, India. PNBIL was incorporated in UK on 13th April 2006 and registered with the

Companies House in England & Wales under No. 5781326. PNBIL was authorised by the Financial

Services Authority (FSA) on 13th April 2007 to conduct Banking Business in UK under Registration

No. 459701. PNBIL started banking operations in UK on 10th of May 2007 from two locations. The

corporate office of PNBIL is at 87, Gresham Street, London EC2V 7NQ (UK). Presently PNBIL has

6 Branches as under:

1. At 87, Gresham Street, London EC2V 7NQ(UK)

2. At 90, South Road, Southall, Middlesex UB1 1RD (UK)

3. At 160 Belgrave Road, Leicester LE4 5AU (UK)

4. At 290 Soho Road, Birmingham B21 9LZ (UK)

5. At 47, Crane book Road, Ilford, Essex, London(UK)

6. At 188 Ealing Road, Wembley HA0 4QD (UK)

7. At 502-504 Dudley Road, Wolverhampton, WV2 3AA

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DRUK PNB Bank Ltd.

Druk PNB Bank Ltd. (DPNBL) is our Joint Venture Subsidiary in Bhutan with our Equity

participation to the extent of 51%. It started operations on 27th January, 2010 and has three branches-

one each at Thimphu, Phentsholing and Wangduephodrang.

Sh N.K. Arora, DGM is the CEO.

Contact details of Sh. N.K. Arora are :

Phone No. 00975- 17116440

E Mail id : nk_arora@pnb.co.in

JSC Dana Bank-Kazakhstan

Our bank has acquired 63.64% stake in JSC Dana Bank, Kazakhstan on 13 th December 2010. The

bank has its head quarters in Almaty. It has five branches at Almaty, Pavlador, Karganda,

Astana&Taraz.

Everest Bank Ltd, Kathmandu, Nepal

Everest Bank Limited (EBL) is our joint venture in Nepal with equity participation to the extent of

20%. Under a Technical Services Agreement, our Bank is providing Top Management Support. The

operations of EBL with Management Support from our Bank started in January, 1997. EBL presently

has a network of 37 branches in Nepal. EBL has started ‘Financial Inclusion’ concept in Nepal.

Subsidiaries and Joint Ventures of Punjab National Bank Domestic Subsidiaries

1. PNB GILTS LTD.

PNB Gilts Ltd., a subsidiary of the Bank, is engaged in the business of trading in Govt. securities,

treasury bills and Non SLR Investments. It is also engaged in dealing in Money Market Instruments

(Call/Notice/Term Money, Repo /Reverse Repo, Inter-corporate Deposits, Commercial Paper,

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Certificate of Deposit) and Mutual Funds Distribution. The company is listed at NSE and BSE.

2. PNB HOUSING FINANCE LTD

PNB Housing Finance Ltd. is engaged in providing housing loans for purchase, construction and

upgradation of a dwelling unit. The company offers Loans for construction or for purchase of

house/flat from development authorities and also from private builders/ group housing societies as

well as for renovation/ repairs. Company also provides finance for construction of residential projects.

Loans to NRIs are also provided for purchase/ construction of house/ flat along with a resident/ non-

resident co-borrower.

3. PNB INVESTMENT SERVICES LTD

PNB Investment Services Ltd, a wholly owned subsidiary, has been set up by the Bank for carrying

out Merchant Banking Business. It provides services for Project Appraisal, Loan Syndication, Debt

Placement and to executes IPOs/FPO/QIPs. PNBISL is registered with SEBI as a Category- I

Merchant Banker.

4. PNB INSURANCE BROKING Pvt. Ltd.

5. PNB LIFE INSURANCE Co. Ltd.

The Bank is holding majority stake in above companies, jointly with Vijaya Bank, minor

shareholder.

Domestic Joint Ventures

The Bank has the following Joint Ventures:

1. Principal PNB Asset Management Company Pvt. Ltd

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2. Principal Trustee Company Pvt. Ltd

3. Assets Care Enterprises Ltd.

4. India Factoring & Finance Solutions Pvt. Ltd.

Product and service profile

PERSONAL BANKING

SOCIAL BANKING

MSME BANKING

AGRICULTURAL BANKING

CORPORATE BANKING

INTERNATIONAL BANKING NRI

FINANCIAL SERVICES

PERSONAL BANKING

1. SAVINGS FUND ACCOUNT

2. CURRENT ACCOUNT

3. FIXED DEPOSIT SCHEME

4. CREDIT SCHEMES

5. CAPITAL GAIN ACCOUNT SCHEME

6. DOORSTEP BANKING SERVICES

7. CARDS

8. NOMINATION FACILITIES

9. CENTRALIZED BANKING SOLUTION

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SOCIAL BANKING

1. CSR INITIATIVES

2. FINANCIAL INCLUSION

3. PRIORITY SECTOR

MSME BANKING

1. SSI SCHEME

2. TRADERS FINANCE

3. SCHEME FOR MEDICAL PRACTIONERS

4. PNB GRAMIN CHIKITSAK SCHEME

AGRICULTURAL BANKING

1. AGRI BUSINESS CELL

2. AGRICULTURAL BANKING

3. FARMERS

CORPORATE BANKING

1. LOAN AGAINST FUTURE LOAN RENTALS

2. EXIM FINANCE

3. CASH MANAGEMENT SERVICES

4. GOLD CARD SCHEME FOR EXPORTERS

INTERNATIONAL BANKING/NRI

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1. NRI SERVICES

2. OFFSHORE BANKING UNIT(OBU)

3. PNB’S HELPDESK FOREX SERVICES

4. PNB’S WORLD TRAVEL CARD

FINANCIAL SERVICES

1. INSURANCE BANKING

2. MUTUAL FUND

3. MERCHANT BANKING OVERVIEW

4. WEALTH MANAGEMENT SERVICES

5. NSE MARKET TRACKER

Policies of the organisation

GreivanceRedressal Policy

Customer Compensation Policy

Citizen's Charter

Model Policy On Bank Deposits

Know Your Customer

Banking Ombudsman

Cheque Collection Policy

Right To Information Act

Vigilance

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Performance of the Organisation

The performance highlights of the bank in

terms of business and profit are shown below:

Parameters

Mar’09

Mar’10

Mar’11

CAGR(%)

Operating Profit 5690 7326 9056 26.16

Net profit 3091 3905 4433 19.76

Deposit 209760 249330 312899 22.14

Advance 154703 186601 242107 25.10

Total business 364463 435931 555005 23.40

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ORGANISATION STRUCTURE

Bank has its Corporate Office at New Delhi and supervises 65 Circle Offices under which the

branches function. The delegation of powers is decentralised up to the branch level to facilitate quick

decision making.

BOARD OF DIRECTORS

CHAIRMAN AND MD

SHRI.K.R.KAMATH

GENERAL MANAGERS

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Board of Directors

Shri. K.R.Kamath

Chairman & Managing Director

and Dy. Chairman of Indian Banks Association

Shri. RakeshSethi

Executive Director

Smt. UshaAnanthasubramanian

Executive Director

Directors

Smt. RavneetKaur

Govt. of India Nominee Director

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Shri. Jasbir Singh

Reserve Bank of India Nominee Director

Shri. Vinod Kumar Mishra

Part-time non-official Director

Shri. TribhuwanNathChaturvedi

Share Holder Director

Shri. G R Sundaravadivel

Share Holder Director

Shri. Devinder Kumar Singla

Share Holder Director

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Shri. M P Singh

Workmen Employees Director

Shri. Pradeep Kumar

Officer Director

Shri. M A Antulay

Part-time non-official Director

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Achievements and Awards

Awards

Awards & Achievements of Punjab

National Bank in Recent Times

PNB Awarded Rajbhasha Awards

Shri K.R. Kamath, Chairman & Managing

Director, PNB receiving RBI

Rajbhasha Awards from Dr.D.Subbarao,

Governor, RBI. Other dignitaries present on

the dias are RBI Dy. Governors

Dr.K.C.Chakraborthy and Dr.SubirGokarn.

PNB adjudged Best Managed Bank by SCOPE

Hon’ble President of India Smt.

PratibhaDevisinghPatil giving SCOPE Best

Managed Bank Gold Trophy Award to Sh.

K.R. Kamath, CMD- PNB. Seen in picture

are Sh. Praful Patel- Union Minister for

Heavy Industries, Sh. A SaiPrathap, Minister

of State & Sh. M.V. Tanksale, ED- PNB.

Wind Power India 2011 Awards

Won Second Prize under the category of

"Best Wind Power Project Financier" 2011 by

World Institute of Sustainable Energy.

PNB Awarded SKOCH Challenger Award 2011 on Financial Inclusion

Punjab National Bank declared winner of

"SKOCH Challenger Award on Financial

Inclusion". Sh. M.V. Tanksale and

ShriRakeshSethi, EDs, PNB receiving award

from Dr. C Rangarajan, Chairman of the

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Prime Minister's Economic Advisory

Council, at a function held at New Delhi.

PNB Awarded Best Technology Bank 2010

Punjab National Bank declared winner of

"Best Technology Bank 2010". Sh. M.V.

Tanksale, ED, PNB and Sh. Ajay Misra,

GM, PNB receiving award from Hon’ble

Ex-President of India Sh. A.P.J Abdul

Kalam at the Banking Technology

Conference held at Mumbai.

PNB AWARDED GOLDEN PEACOCK

AWARD FOR TRAINING

PRESS RELEASE

PNB declared winner of the Golden Peacock

Awards for Training. Smt. Sushma Bali, GM

and Sh. J.P. Kapoor, DGM, PNB receiving

award from Hon'ble Sh. K Sankaranarayanan,

Governor of Maharashtra and Sh. P.N.

Bhagwati Ex-Chief Justice of India.

PNB AWARDED NIRYAT BANDHU

BRONZE TROPHY

PRESS RELEASE Hindi

PRESS RELEASE English

Sh. K.R.Kamath, CMD, PNB receiving

NiryatBandhu Award from Hon’ble Sh.

JyotiradityaScindia, Minister of State for

Commerce and Industry. Seen in the picture

is Sh. S.K.Dubey, GM, PNB.

PNB Received Excellent Performance in Lending Under PMEGP Scheme award

SME PRESS RELEASE Hindi

MSME PRESS RELEASE

Sh. NageshPydah, Executive Director, PNB

receiving 'excellent performance in lending

under PMEGP scheme' award from Sh.

Dinsha Patel, MoS (Independent Charge) and

Sh. Dinesh Rai, Secretary, Ministry of Micro,

Small & Medium Enterprises.

K,R.Kamath, CMD, PNB is receiving the

Best Bank Award

at Hyderabad from Shri D. Subbarao,

Governor, RBI . Dr. K.C. Chakrabarty, Dy.

Governor, RBI, Mr. Samba Murthy, Director,

IDRBT, Mr. S Ganesh Kumar, CGM, IDRBT

and Mr. Ajay Misra, GM, PNB are also seen

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in the photograph.

Outlook Money Award 2010 Outlook Money Award for the year 2010 for

"Best Home Loan Provider"

Outlook Money Award 2010 Outlook Money Award for the year 2010 for

"Best Education Loan Provider"

2nd prize of Indira Gandhi Rajbhasha Shield

by Dept. of Indian Official Language, Ministry of Home Affairs, GOI

for promoting Hindi for the year 2008-09.

Gold trophy of SCOPE Meritorious Award

for Excellence in Corporate Governance in 2009

By Standing Conference of Public

Enterprises.

5th Social and Corporate Governance Award Under the Category of "Best Corporate Social

Responsibility Practice"

By Bombay Stock Exchange for 2010

Skoch Awards 2010 for "Computerisation of RRBs"

By Skoch for 2010

Global HR Excellance Award 2010 for the

outstanding Contribution to the cause of Education

World HRD Congress

Asia Best Employer Brand Award" for

Excellence in Training

By World HRD Congress for 2010

Award for Brand Excellance" under Banking & Financial Services

By CMO Asia for 2010

"CSR Excellence Award 2010" By ASSOCHAM

Skoch Challenge Award 2010

For Livelihood Linkage of the milk producers

in Bulandshahr District, Uttar Pradesh

Best use of Technology for Financial Inclusion for 2009-10.

By IDRBT.

Best Employer Brand Award Regional Round Award Winners-Indore

By Employer Branding Institute, India

Golden Peacock Award for Excellence in

Corporate Governance

By Institute of Directors for 2009.

India Pride Awards for excellence in PSU By DainikBhaskar in association with Daily

News and Analysis for 2009.

Dun & Bradstreet Award for “Priority Sector Lending including Financial Inclusion.

By Dun & Bradstreet for 2009.

National Award for Excellence in Lending

By Khadi& Village Industry Commission,

Ministry of Micro, Small & Medium

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for Institutional Finance in Propagating KVI

Programmes in NATIONAL LEVEL

Enterprises, Govt. of India, (Interest Subsidy

Eligibility Certificate Scheme) for 2009.

National Award for Excellence in Lending

for Institutional Finance for Propagating KVI Programmes in CENTRAL ZONE

By Khadi& Village Industry Commission,

Ministry of Micro, Small & Medium

Enterprises, Govt. of India(Prime Minister

Employment Generation Programme) for

2009.

National Award for Excellence in Lending for Institutional Finance in Propagating KVI

Programmes in NORTH ZONE

By Khadi& Village Industry Commission,

Ministry of Micro, Small & Medium

Enterprises, Govt. of India(Interest Subsidy

Eligibility Certificate Scheme) for 2009.

National Award for Excellence in Lending for Institutional Finance in Propagating KVI

Programmes in CENTRAL ZONE

By Khadi& Village Industry Commission,

Ministry of Micro, Small & Medium

Enterprises, Govt. of India(Interest Subsidy

Eligibility Certificate Scheme) for 2009.

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FUTURE PLANS OF PNB

PNB TO ENTER STRATEGIC PARTNERSHIP WITH METLIFE INDIA

Punjab National Bank (PNB) and MetLife India, an affiliate of MetLife Inc., announced today that

PNB will be inducted as a joint venture partner in the company. The Board of PNB, in its meeting

held on 28th July, accepted the offer made by MetLife India for acquiring 30% stake in the company.

The transaction is subject to approvals from IRDA, RBI and other regulatory bodies.

PNB started the process in December last year when it invited expression of interest from insurance

companies across the world. The Bank received responses from 26 Indian and international

companies proposing different models. After evaluation of the various models, the Bank opted to

participate in a brownfield venture by acquiring stake in an existing Indian life insurance company.

Accordingly, RFP was issued to 10 Indian insurance companies who had proposed this model. Based

on the technical evaluations, the Bank had shortlisted 3 life insurance companies. After evaluation of

the financial bids of the three shortlisted companies, the Bank accepted the offer of MetLife India.

MetLife India Insurance Company Limited (MetLife) is an affiliate of MetLife, Inc. and was

incorporated as a joint venture between MetLife International Holdings, Inc., The Jammu and

Kashmir Bank, M. Pallonji and Co. Private Limited and other private investors. MetLife is one of the

fastest growing life insurance companies in the country. It serves its customers by offering a range of

innovative products to individuals and group customers at more than 600 locations through its bank

partners and company-owned offices. MetLife has more than 30,000 Financial Advisors, who help

customers achieve peace of mind across the length and breadth of the country.

PNB is the largest nationalized bank having a branch network of 5,290 branches and a customer base

of over 60 million. The partnership with MetLife will provide PNB, insurance expertise and

bancassurance capabilities that will be an asset to the bank as it pursues its growth strategy in India

and seeks to expand its leadership in the Indian financial services market. This will further strengthen

the company’s position as a leader in the rapidly expanding bank distribution channel.

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Following the closing of the transaction, the company will rebrand itself as PNB MetLife to leverage

the strengths of the two brands in the Indian market.

On this occasion, Mr. K. R. Kamath, Chairman and Managing Director of the Bank informed that

"We are happy that the process which has set a benchmark in the industry has helped us to find the

best insurance partner for the Bank in MetLife. With 60% branches in the rural and semi – urban

areas, PNB is uniquely positioned to take insurance to the deep pockets of India. This partnership has

the potential to drive the company into the top tier of Indian life insurers and more than double its

market share." Mr.Kamath also acknowledged the role of Boston Consulting Group for running the

process which has been well acknowledged by the industry.

William J. Toppeta, President International of MetLife expressed his pleasure at the tie up "Given its

global significance, India is a strategic focus market for MetLife. We believe that the addition of an

outstanding financial institution like PNB as a shareholder and partner will greatly enhance MetLife

India's ability to move into the top tier of life companies here. We value PNB and our current

shareholders for their integrity, market knowledge, distribution power and financial strength. We look

forward to a long and productive partnership for the mutual benefit of Indian consumers and our

respective shareholders".

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CHAPTER 3

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FUNCTIONAL DEPARTMENTS OF A BANK

Subject to governmental authority - National or State, according to its charter - the management of

any bank is vested in its board of directors. Such directors are elected by the stockholders. The

directors elect the officers, president, vice-president, cashier and assistant cashier, who are the

executive heads of the institution and are charged with the duty of administering its affairs. The

number of vice-presidents and assistant cashiers depends upon the size of the bank. The directors may

also appoint committees - such as a discount committee, an executive committee, and an examination

committee - that the business of the bank may seem to require. According to the character of their

duties and responsibilities, bank officers and employees may be classified as (1) executives, (2)

tellers, (3) bookkeepers. Whenever it becomes necessary, on account of volume of business, to divide

the work in a bank into divisions, each employing a group of clerks, such divisions are organized into

departments each having a department head, who is usually a teller, a head bookkeeper, or perhaps a

junior officer. In the very large banks the executive staff is itself organized into groups, and there may

be a vice-president and one or two assistant cashiers in charge of each important department. The

work of a department in a large bank is nothing more nor less than the work of a single man in a small

bank apportioned among several men. The departments into which a medium sized bank is ordinarily

divided are as follows:

(1) Receiving Teller's Department (Teller)

Receives, receipts for and proves deposits, distributes checks to bookkeepers and other

departments, prepares exchanges for clearing houses, and turns cashover to the paying teller at end of

day.

(2) Transit Department (Teller)

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The transit department may be a subdivision of the receiving teller's department and was

formerly known by other terms, such as correspondence, foreign check, miscellaneous check or

country check department. This department assorts checks and other cash items payable out of town,

indorses them and lists them on letters addressed to other banks. It gives totals of outgoing or

remittance letters to general ledger bookkeeper at end of day. This department often keeps the records

of exchange charged on out-of-town checks, and of delayed credits on interest balances made

necessary because of uncollected funds deposited.

(3) Paying Teller's Department (Teller)

Pays or certifies checks, is in charge of the signature book or cards bearing the authorized

signatures of all depositors, ships currency, is in charge of the vault cash, and makes up payrolls.

(4) Note Teller's Department (Teller)

Collects notes and drafts due at the bank or elsewhere in the city. It is usually in charge of the runners

or messenger department, which is a subdivision, and it usually receives deposits made by other

banks, and may perform the functions of a mail teller.

(5) Collection Department (Teller)

Collects notes, drafts and other "time" items when payable out of town, and credits accounts

of depositors when collections are advised paid.

(6) Loan or Discount Department (Executive)

Receives notes submitted for discount or makes loans, figures discount and interest, and has

charge of collateral securing loans.

(7) Credit Department (Executive)

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Secures and collects information relating to borrowers, checks statements submitted by

them, and is in charge of credit files, which contain information as to the reliability, business habits

and financial strength of borrowers.

In the large banks it would be impractical, if not impossible, for the cashier, in addition to his other

duties, to keep track of every local borrower and the bank may employ a "credit man," who

specializes in credits. The next step is the organization of a credit department, usually in charge of

one of the officers of the bank. The credit department collects and files every available bit of

information concerning people or firms that borrow money. This material consists of financial

reports, press clippings, personal interviews, statements of condition and, in fact, every item that has

even a remote bearing upon the standing of borrowers. It requires technical training of a high order

properly to classify and analyze this data, but the fundamental idea is to acquire the same knowledge

of the true facts that a country bank cashier has with respect to his neighbor. A simple but practical

definition of credit is "the ability to buy with a promise to pay," in other words, to obtain present

value for a promise to pay in the future. He who has "good credit" can command either goods or

money because of the faith or belief that others have in his promise. The word "credit" is derived

from the Latin "credo." It is not only essential that the borrower have the ability to pay his note when

it is due - he must also have the desire or inclination to pay. Credit is primarily based upon confidence

which has as its basis three things. First and foremost is character, the "moral risk" which is

indispensable in every case. Then comes capacity, the borrower's ability and business methods.

Thirdly, they have capital which, while essential, is distinctly secondary to character and capacity, a

combination which is very apt to attract capital. The banker, naturally, in selecting his customers

knows that he may be asked to extend credit. He first satisfies himself that the factors of character and

capacity are such as to justify confidence. This information is obtained from personal knowledge of

the borrower, and by information obtained through other banks, through "the trade" and by agency

reports. Trade inquiries are directed to people selling goods to and competitors of the borrower. If all

this information is satisfactory, the capital factor is studied in the borrower's financial statement of

condition, which balance sheet should be taken off at regular intervals. It must show a sufficiently

"liquid" position to satisfy the banker that his loan can and will be repaid when due. To show this,

there must be an ample margin of quick assets (those readily convertible into cash) over current

liabilities to enable the borrower, despite any natural shrinkage of values in liquidation, readily to

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meet his obligations. This ratio is often called the 2 to 1 ratio, but differs in proportion according to

the character of the business in question. The ability to loan money wisely and to those who are

entitled to it - in short, the ability to distinguish between a safe risk and an unsafe one - is the quality

that marks the good banker

(8) Analysis or Statistical Department (Executive)

Determine which are profitable and which are losing accounts, makes monthly reports to officers, is

in charge of statistics relating to the bank's accounts and matters in which the bank is particular.

This department is usually found in city banks. It analyzes the accounts of depositors to rely

interested. It is closely related to the transit department.

(9) General Ledger Department (Bookkeepers)

Keeps the general or control accounts of the bank, and makes up the bank's statement of

condition.

(10) Country Bank Account Department (Bookkeepers)

This department is confined to city banks. It keeps the accounts of other banks.

(11) Individual Ledger Department (Bookkeepers)

Keeps the records of the balances of individual depositors and figures interest on accounts. It may be

subdivided as to kind of accounts (savings, dealers), in addition to ordinary alphabetical division, and

may balance pass-books or there may be a separate department for this purpose using the statement

system.

(12) Auditor's Department (Executive)

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This department is responsible for the settlement of the various departments, reconciles the

accounts with other banks, and certifies interest calculations. In addition to these departments, there

are others to be found either in very large banks or even in small banks operating special features.

Among the first might be noted the coupon department, exchange department, purchasing department,

filing department, interest department, new business department, etc., all of which terms are self-

explanatory. Among special departments may be mentioned the foreign exchange department, the

bond department, safety deposit department, special deposit department (securities and valuables

stored with the bank, but not placed in private boxes). In trust companies there is the trust department,

which may have a complete independent organization of its own, with officers, bookkeepers and

other clerks. This department has charge of the trust accounts.

Bank Account Section

A bank account is a financial account with a banking institution, recording the financial

transactions between the customer and the bank and the resulting financial position of the customer

with the bank

Bank accounting consists in making written, permanent records of every transaction. Every

penny must be accounted for. The statement of the bank, which they have just discussed, shows the

general, or control, accounts of the bank, and the various books of the bank show the detail of these

items. It would not be impossible, but it would be entirely impractical, to enter every figure directly

on the statement of condition. They might imagine an enormous sheet on which the capital is entered

as to the ownership of each share of stock. Instead of total deposits, the balance of each depositor

would appear opposite his name. On the other side, instead of loans and discounts, there would be an

itemized list of the loans with the names of the borrowers. With such a sheet spread out over a floor

space of great area, they might imagine the clerks crawling up and down the columns like flies

making debits and credits. This is, of course, absurd, but it is precisely what happens, except that the

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entries are made on books, loose leaves or cards, and the final results are posted on the statement of

condition which is thus altered day by day.

As in other matters they have mentioned, banks are also alike with respect to bank accounting,

the same principles govern whether the bank is large or small, national bank or trust company. All the

books are a part of the general books, and the extent to which they are divided depends on the size of

the bank. Division is made to fit the capacity of the clerk. When any part of the work becomes too

burdensome for one man, he may be given an assistant or the books and records will be further

divided, so that two men can do the same thing without conflicting. In very large banks a clerk may

spend all his time listing checks upon a sheet, or adding up certain columns of figures or doing any

one of a thousand things that must be done in the process of keeping accounts. Unless he is studious

and observant, he loses sight of the fact that his work is a part of the whole, he becomes mechanical,

falls into a rut and banking, instead of being an interesting employment full of possibilities, is to him

mere drudgery. He is standing so close to the machinery that he allows it to master him instead of

broadening his vision by study and thus mastering his task.

The first principle in bank accounting, as in all other bookkeeping, is that for every debit there

must be a credit, and vice-versa. In accordance with this fundamental theory the books must always

be in balance. As they have seen with respect to the statement, every dollar of liabilities is accounted

for by another dollar of resources. This is true of every bank. If the institution is large enough to be

divided into departments, such departments are charged with all funds passing through their hands,

and they must show on their records what has become of every penny. Similarly each clerk,

bookkeeper or teller accounts at the end of the day for each item of cash he has handled. When he has

done so he is said to have "settled," "balanced" or "struck a proof." Every bank clerk has had the

experience of remaining at his desk until a late hour at night checking up his day's work searching for

a difference of a few cents. Often he becomes embittered at what seems to him a tyranny when the

small sum of money involved is considered. The reason he must settle, however, is not on account of

the possible loss of ten cents, but because the most important principle in bank accounting is

involved. "Accuracy first" is a motto that should be framed, figuratively at least, upon the wall of

every banking room.

The books used by a bank are of various kinds and their purpose is indicated by name. A ledger is

a book used to keep a record of balances. To "post" means to enter in the proper columns either the

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debits or credits on the ledger, and the difference between them represents the balance either due by

or to the bank. Most banks are doing away with bound books, especially ledgers, and substituting

cards or loose leaves. This plan enables several men to work on the same records, which would be

impossible if they were bound in a single book. Alphabetical division is also easier of adjustment and

"inactive" accounts can be readily separated from "active" accounts. Totals of balances can be listed

upon adding machines for proof more easily from loose sheets than from bound books. But whether

bound or not, records of balances are kept upon ledgers.

A journal is a book in which daily transactions are listed in regular order as to accounts, and the total

debit or credit is then posted on the ledgers. Journals, too, may be loose sheets so that they can be

inserted in the carriage of an adding machine; indeed, machines have been invented upon which both

debits and credits may be written and the machine will automatically subtract or add and print the

new balance. The journal, then, is merely a subdivision of the ledger.

A depositor of the bank wishes his account to be charged and the money paid to a named payee. The

piece of paper upon which he writes this order is a "check." If he deposits money, he writes the

memorandum of the amount upon a ruled slip of paper and this is the "deposit ticket." Bookkeepers

enter debit and credit records upon their journals directly from these items. Money, however, may

change hands or from one account to another, in other ways; by letter, telegram or other debit and

credit advice. In such cases a "charge ticket" or "credit slip," as the case may be, is signed or initialed

by an officer of the bank, and entry with full explanation is made upon a book from which record the

bookkeeper makes his entries. This book is known as a "scratcher," "tickler" or a "blotter." The terms

mean practically the same thing. A book, upon which a complete description of a negotiable

instrument or transaction is made for a permanent record or for reference, is called a register. For

example, bond register collection register, etc.

All other books, cards, sheets of whatever nature are a part or subdivisions of these books. Often

they become known among the clerks by some other name descriptive of their general appearance.

For instance, the general ledger scratcher in one bank is known as the "red book," while the collection

department scratcher is the "black book." These names have stuck through generations of clerks, and

a young man going into another bank has been known to ask for the "black book," and being

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untrained in accounting, he had difficulty in making himself understood. Similarly, in New York City

banks the pigeonholed desk where checks are assorted for the clearing house is generally known as

the "clearing house rack." A New York bank clerk visiting a Philadelphia institution and asking to see

the "rack" would probably be shown a hat room.

The records made by one clerk upon one set of books, in a well-appointed accounting system, go

to check the records of another clerk upon a different set of books. For instance, the paying teller and

the receiving teller will each keep a record of checks cashed or deposited payable within the bank.

The debit postings of the individual bookkeeper would agree with the teller's figures. Skillful

accounting lies in making the fullest possible use of original entries, at the same time having a check

on all figures to guard against either error or fraud. Many young bank men have materially increased

their salaries and rate of promotion by devising improved accounting methods.

As has been said, every transaction ultimately affects the bank's statement of condition by debit

or credit. Refer again to the outline statement shown in the preceding chapter. A deposit of $1,000.00

is made, consisting of $200.00 cash and checks as follows: $200.00 on the bank itself and $600.00

payable in another city. At the end of the day (assuming this to be the only deposit), on the liabilities

side there is an increase of $800.00, all of which appears in the item "deposits" being the total

$1,000.00, less the check for $200.00 which is charged to the account of the drawer. On the resource

side, then, they must have a corresponding increase of $800.00, and this is made up by an increase in

the cash of $200.00 and an increase of $600.00 in the item "due from banks." Or a transaction may

appear on one side of the statement only. The bank has sold $5,000.00 of the bonds it owns. The bond

item of resources would show a reduction of this amount, and either "cash" or "due from banks"

would be increased, depending whether payment was made in cash or by check. If payment for the

bonds is made with a check on the bank itself, both sides of the statement are affected, a

corresponding reduction in deposits taking place.

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In addition to these departments, there are others to be found either in very large banks or even in

small banks operating special features.

Coupon department

Exchange department

Purchasing department

Filing department

Interest department

New business department

Some of the special departments are:

The bond department

Safety deposit department

Special deposit department (securities and valuables stored with the bank, but not

placed in private boxes).

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Organizational chart

Corporate office (New Delhi)

Circle office (68)

Branch

Small medium very large large extra large

Chief Manager

Manager supervisor (manager) Investment

Manager

Deposit Loansection Clearing Account savings bank File DD

Section SectionSectionsection Management Section

Locker section collection section

Gold Loan Other loan

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DEPARTMENTS

Deposit section

Loan section

Clearing section

Account section

Savings account section

File management

DD section

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CHAPTER 4

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SWOT ANALYSIS

SWOT stands for Strength, Weakness, Opportunities and Threats. Strengths and Weakness are the

internal factors of the company where as Opportunities and Threats are external factors. SWOT

Analysis is the tool for auditing an organization and its environment. It is the first stage as

planning. It can be used in conjunction with other tools as audit and analysis.

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Strengths

Well-known brand and long

history

Capture small retail sector

Knowledge of Indian market

Having sound market share

Weakness

Lack of unified global identity

Not able to position itself correctly

Opportunities

Growing Indian banking sector

People are becoming more service

oriented in global market

Threats

From various competitors

o Foreign banks

o Private banks

Future market trends

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Weakness

Low awareness of the products offered among the people.

Comparing to some private banks, PNB has less modernization of infra structure.

Since more employees are working, the interference of trade union is yet another

constraint.

Lack of unified global identity

Not able to position itself correctly

STRENGTHS

Well-known brand and long history

Capture small retail sector

Knowledge of Indian market

Having sound market share

Nationwide networking of branches.

Multiple product & service.

Good Information security policy.

Huge public deposit money and backup from government.

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Threats

From various competitors

o Foreign banks

o Private banks

Future market trends

Entry of new private sectors due to globalization and privatization.

Political instability and interference in Administrative affairs.

Huge competition due to private banks and lot of competitors. They provide lot of

facilities comparing to government banks.

OPPORTUNITIES

Growing Indian banking sector

People are becoming more service oriented in global market Large potential Market due to pickup in economic activity.

Introduction of innovative product which will lead to higher growth.

Massive marketing and Massive customization

Chances for increasing more investment avenues and designing various schemes for the

customers. Thereby, all the people all over India will be a customer one way or other.

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CHAPTER 5

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FINDINGS

1. PNB is offering a large diversity of product which are innovative and in line with latest

technology and customer preference. Its contribution towards society in terms of product

and service offered is appreciable.

2. The PNB has a unique brand image in the eyes of investors and depositors. This offers a

platform to expand its market share.

3. The efficiency of the functioning of PNB is highly enhanced by full computerization.

4. The implementation of information security with the global best practices will help the

organization to build a strong customer loyalty.

5. PNB offers student’s account facility at zero balance and some of the bank charges are

not are not levied for the students.

6. PNB provides instant ATM cards to its customers at the time of opening the account.

7. Recently PNB has planned to acquire 30% stake in MetLife insurance.

8. The employees at PNB are customer friendly and very cooperative.

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RECOMMENDATION

To increase the profitability of bank they may aim at reducing the cost of its deposits.

The investment portfolio of the bank may be enhancedfor increasing yield on the assets.

Majority of the older employee lacks sufficient soft skill hence they should be trained in

order to increase efficiency of work.

There is need of better customer relationship management & awareness program to make

the customer aware about all product and service.

There should be minimum documentation and speedy transactions.

Need for establishment of better industrial relation in order to deal with formation of trade

unions and achieving higher efficiency of employees.

Modernization of infrastructure through benchmarking the global best practices in order to

achieve customer attention and loyalty.

Need for consistency and growth in technology in order to keep up position and deal with

competition.

Quick implementation of enterprise data warehouse.

Number of Branches should be increased covering a wider area in various states.

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A wide publicity to be given about the organization and its products through various

means of communications to keep growth moments.

More number of training and educational programmers’ should be included in Banks

schedule.

Developing a learning culture through continuous learning process.

Proper guidance and training should be given to the employees on the operations of

core banking system.

To improve employees and customer relationship by sending messages through mobile

phone when any offer is been provided by bank and also there birthday the message can be

send through mobile phone.

To reduce employee work load by employing new employees those who have more

experienced and providing key responsible area to them.

To help the customs and for guiding them a new counter can be opened

The signatures should be scanned and stored in the computer and then it should link to

their account so that their problems can be solved.

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CONCLUSION

The Organizational studies mean the study of organizations from multiple viewpoints, methods

and levels of analysis. The organizational study done in Punjab National Bank helped to

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analysethe administrative function of the organization and also the operations of various

departments like, Accounts Department, Credit Monitoring Department, Corporate Financial

Management, I T Division Department, Integrated Risk Management Department (IRMD),

Inspection and Vigilance Department, Legal Department, Marketing Department, Personnel

Department, Planning and Development, NRI Cell Department, Secretarial Department,

Organization Methods & Compliance Department etc..

Finally I did my detailed study in the Accounts Department and I have found the policies, process,

and functions and the major issues in the department. I have founded that the bank is presently

facing problem of identification of signature of the customers when they are showing their

documents and cheques. So the bank should take proper steps to solve these problems and they

should give proper guidance to their customers.

My experience with Punjab National Bank is outstanding. While working in Punjab National Bank

I found that this bank has developed manifold by their long experience due to facilities and

services provided to their customer and this growth rate can be keep it up if they start to go in

semi-urban areas. In last couple of years they have opened new many branches and they should

open many more. The working staffs are very co-operative in nature and due to that the bank will

also get good benefit. Punjab National Bank has provided their customer Net-banking facilities

and due to that transactions are done fast. Charges at Punjab National Bank are on lower side

when we compare it with other Banks.

Being a huge government sector bank PNB, in association with parent RBI along with other

subsidiary banks it has got enormous resources at its disposals to give wide range of services to

the customers As for my report on, “ORGANIZATIONAL STUDY AT PNB” is concerned it is

really an enhancing experience for me in so many ways. In fact I can rightfully claim to have

achieved my predetermined objective.

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BIBLIOGRAPHY

Books

1) C.R.KOTHARI research methodology ,WishwaPrakashanPvt Ltd, new Delhi

2) EDWIN.B.FLIPPO personnel management, M.C. graw hill international edition.

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Website

1) www.pnbindia.in

2) www.wikipedia.com

3) www.moneycontrol.com

4) www.efytime.com

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AN ORGANISATION STUDY AT PNB

R .V . INSTITUTE OF MANAGEMENT Page 65

AN ORGANISATION STUDY AT PNB

R .V . INSTITUTE OF MANAGEMENT Page 66

AN ORGANISATION STUDY AT PNB

R .V . INSTITUTE OF MANAGEMENT Page 67

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AN ORGANISATION STUDY AT PNB

R .V . INSTITUTE OF MANAGEMENT Page 68

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