Overview of Banking Institutions

The Banking Sector

India has a well developed banking system. Most of the banks in India were founded by Indian entrepreneurs

and visionaries in the pre-independence era to provide financial assistance to traders, agriculturists and budding

Indian industrialists. The origin of banking in India can be traced back to the last decades of the 18th century.

The General Bank of India and the Bank of Hindustan, which started in 1786 were the first banks in India.

Both the banks are now defunct. The oldest bank in existence in India at the moment is the State Bank of India.

The State Bank of India came into existence in 1806. At that time it was known as the Bank of Calcutta. SBI is

presently the largest commercial bank in the country.

The role of central banking in India is looked by the Reserve Bank of India, which in 1935 formally took over

these responsibilities from the then Imperial Bank of India. Reserve Bank was nationalized in 1947 and was

given broader powers. In 1969, 14 largest commercial banks were nationalized followed by six next largest in

1980. But with adoption of economic liberalization in 1991, private banking was again allowed. 

The commercial banking structure in India consists of: Scheduled Commercial Banks and Unscheduled Banks.

Scheduled commercial Banks constitute those banks, which have been included in the Second Schedule of

Reserve Bank of India (RBI) Act, 1934. RBI includes only those banks in this schedule, which satisfy the

criteria laid down vide section 42 (6) (a) of the Act. 

Indian banks can be broadly classified into public sector banks (those banks in which the Government of India

holds a stake), private banks (government doe not have a stake in these banks; they may be publicly listed and

traded on stock exchanges) and foreign banks.

The banking system in India is significantly different from that of other Asian nations because of the country’s

unique geographic, social, and economic characteristics. India has a large population and land size, a diverse

culture, and extreme disparities in income, which are marked among its regions. There are high levels of

illiteracy among a large percentage of its population but, at the same time, the country has a large reservoir of

managerial and technologically advanced talents. Between about 30 and 35 percent of the population resides in

metro and urban cities and the rest is spread in several semi-urban and rural centers. The country’s economic

policy framework combines socialistic and capitalistic features with a heavy bias towards public sector

investment. India has followed the path of growth-led exports rather than the “exportled growth” of other

Asian economies, with emphasis on self-reliance through import substitution. These features are reflected in

the structure, size, and diversity of the country’s banking and financial sector. The banking system has had to

serve the goals of economic policies enunciated in successive five year development plans, particularly

concerning equitable income distribution, balanced regional economic growth, and the reduction and

elimination of private sector monopolies in trade and industry. In order for the banking industry to serve as an

instrument of state policy, it was subjected to various nationalization schemes in different phases (1955, 1969,

and 1980). As a result, banking remained internationally isolated (few Indian banks had presence abroad in

international financial centers) because of preoccupations with domestic priorities, especially massive branch

expansion and attracting more people to the system. Moreover, the sector has been assigned the role of

providing support to other economic sectors such as agriculture, small-scale industries, exports, and banking

activities in the developed commercial centers (i.e., metro, urban, and a limited number of semi-urban centers).

The banking system’s international isolation was also due to strict branch licensing controls on foreign banks

already operating in the country as well as entry restrictions facing new foreign banks. A criterion of

reciprocity is required for any Indian bank to open an office abroad.

These features have left the Indian banking sector with weaknesses and strengths. A big challenge facing

Indian banks is how, under the current ownership structure, to attain operational efficiency suitable for modern

financial intermediation. On the other hand, it has been relatively easy for the public sector banks to

recapitalize, given the increases in nonperforming assets (NPAs), as their Government dominated ownership

structure has reduced the conflicts of interest that private banks would face.

Financial Structure

The Indian financial system comprises the following institutions:

1. Commercial banks

a. Public sector

b. Private sector

c. Foreign banks

d. Cooperative institutions

(i) Urban cooperative banks

(ii) State cooperative banks

(iii) Central cooperative banks

About 92 percent of the country’s banking segment is under State control while the balance comprises private

sector and foreign banks.

INTRODUCTION

Punjab National Bank (PNB) was registered on May 19, 1894 under the Indian Companies Act with its office

in Anarkali Bazaar, Lahore. The Bank is the second largest government-owned commercial bank in India with

about 4,500 branches across 764 cities. It serves over 37 million customers. The bank has been ranked 248th

biggest bank in the world by 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 and Kabul,

and representative offices in Almaty, Shanghai, and Dubai.

From its modest beginning, the bank has grown in size and stature to become a front-line banking institution in

India at present. PNB is a professionally managed bank with a successful track record of over 110 years.

Strategic business area covers the large Indo-Gangetic belt and the metropolitan centers. It has strong

correspondent banking relationships with more than 217 international banks of the world.

More than 50 renowned international banks maintain their Rupee Accounts with PNB. Well equipped dealing

rooms; 20 different foreign currency accounts are maintained at major centers all over the world.

History

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 Lala HarKishen Lal, Lala Lalchand, Shri

Kali Prosanna Roy, Shri E.C. Jessawala, Shri Prabhu Dayal, Bakshi Jaishi Ram, and Lala Dholan Dass. Lala

Lajpat Rai was actively associated with the management of the Bank in its early years.

1904: PNB established branches in Karachi and Peshawar.

1940: PNB absorbed Bhagwan Dass 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.

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

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 headoffice, which may have moved to Karachi. PNB also had one or more branches in

East Pakistan (Bangladesh).

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: 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. Rao Bahadur T.M. Appu

Nedungadi, author of Kundalatha, one of the earliest novels in Malayalam, had established the bank in 1899. It

was incorporated in 1913, and in 1965 had acquired selected assets and deposits of the Coimbatore National

Bank. 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. 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, Middlesex. 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.

Acquisitions by PNB

1939: PNB acquired Bhagwandas Bank

1951: PNB acquired the 39 branches of Bharat Bank.

1961: PNB acquired Universal Bank of India

1960s: PNB amalgamated Indo Commercial Bank

1986: PNB acquired Hindustan Commercial Bank

1993: PNB acquired New Bank of India

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

Industry size & trends of growth :

With over 38 million satisfied customers and 4668 offices, PNB has continued to retain its leadership position

among the nationalized banks. The bank enjoys strong fundamentals, large franchise value and good brand

image. Besides being ranked as one of India’s top service brands, PNB has remained fully committed to its

guiding principles of sound and prudent banking. Apart from offering banking products, the bank has also

entered the credit card and debit card business; bullion business; life and non life insurance business; Gold

coins and asset management business, etc. Since its humble beginning in 1895 with the distinction of being the

first Indian bank to have been started with Indian capital, PNB has achieved significant growth in business

which at the end of March 2009 amounted to Rs 3,64,463 crore. Today, with assets of more than Rs 2,46,900

crore, PNB is ranked as the 3rd largest bank i

Competitive analysis:

Peer Comparison

CompanyMarket Cap(Rs. in Cr.)

P/E (TTM)(x)

P/BV (TTM)

(x)

EV/EBIDTA(x)

ROE(%)

ROCE(%)

D/E(x)

St Bk of India 140,168.01 9.94 1.42 14.68 15.7 0.0 0.00

Bank of Baroda 28,598.13 6.60 0.89 15.30 15.1 0.0 0.00

Punjab Natl.Bank 27,388.62 5.98 0.88 12.68 16.5 0.0 0.00

Canara Bank 18,362.35 6.39 0.80 12.24 17.0 0.0 0.00

Bank of India 17,528.40 6.62 0.77 14.59 13.0 0.0 0.00

Union Bank (I) 13,275.59 6.42 0.85 13.67 15.0 0.0 0.00

IDBI Bank 10,568.87 5.62 0.54 11.97 13.4 0.0 0.00

Syndicate Bank 8,111.28 4.19 0.85 14.12 22.8 0.0 0.00

Oriental Bank 7,056.22 5.58 0.58 12.44 11.5 0.0 0.00

Central Bank 6,831.55 6.73 0.74 13.64 5.0 0.0 0.00

UCO Bank 6,160.28 9.97 0.84 13.35 19.4 0.0 0.00

Indian Bank 6,134.97 4.12 0.59 12.64 15.7 0.0 0.00

Allahabad Bank 6,005.36 5.30 0.57 12.83 11.8 0.0 0.00

Corporation Bank 5,798.35 4.17 0.61 12.57 16.1 0.0 0.00

I O B 5,600.05 10.45 0.45 13.27 4.9 0.0 0.00

Peer Comparison

CompanyMarket Cap(Rs. in Cr.)

P/E (TTM)(x)

P/BV (TTM)

(x)

EV/EBIDTA(x)

ROE(%)

ROCE(%)

D/E(x)

Andhra Bank 5,013.84 3.89 0.59 11.81 19.3 0.0 0.00

Bank of Maha 3,558.76 5.27 0.76 13.01 16.8 0.0 0.00

St Bk of Bikaner 3,034.15 4.26 0.64 12.48 16.4 0.0 0.00

Dena Bank 2,993.01 3.83 0.61 13.03 17.6 0.0 0.00

S B T 2,588.25 4.32 0.59 12.22 14.9 0.0 0.00

St Bk of Mysore 2,582.66 6.33 0.69 12.31 11.6 0.0 0.00

Vijaya Bank 2,581.76 5.80 0.63 12.72 11.9 0.0 0.00

United Bank (I) 1,957.86 6.56 0.44 13.49 7.5 0.0 0.00

Pun. & Sind Bank 1,483.48 4.81 0.34 11.32 9.2 0.0 0.00

Position of the company in terms of Market share:

Corporate mission and objectives:

PERFORMANCE DURING THE LAST 5 YEARS AND EVALUATION OF VISION 2008

Performance in last 5 years

The Bank’s performance in the last 5 years has been impressive in all major parameters with business doubling

to reach Rs. 286000 crore in 2007-08. The Bank’s average growth in major parameters and achievement in the

last 5 years is given below:

PARAMETERS Mar, 04 Mar, 05 Mar, 06 Mar, 07 Mar, 08 Dec, 08 Total Deposit 87916 103167 119685 139860 166457 197069Total Advances 47224 60413 74627 96597 119502 141659Operating Profit 3121 2404 2917 3617 4006 4156Net Profit 1109 1410 1439 1540 2049 2225Interest Income 7780 8460 9337 11236 14265 14083Non - Interest Income 1867 1676 1521 1730 1998 2064Gross NPA 4670 3741 3138 3391 3319 3264Net NPA 449 119 210 726 754 552Gross NPA (%) 9.35 5.96 4.10 3.45 2.74 2.28Net NPA (%) 0.98 0.20 0.29 0.76 0.64 0.39Cost of Deposits (%) 5.01 4.43 4.32 4.53 5.59 6.26Yield of Advances (%) 9.08 8.10 8.31 9.17 10.36 11.51Business Per employee 2.28 2.77 3.31 4.07 5.05 6.06Profit Per Employee (in lac) 1.88 2.42 2.48 2.68 3.66 5.38Return on Assets (%) 0.92 1.17 1.09 1.03 1.15 1.37

The Bank’s performance in relation to its past is commendable but still matching growth in areas like non-interest

income, operating profit and overall NPA offer scope for further improvement.

Evaluation of Vision 2008

The Bank’s first Vision Document-‘VISION 2005’ enabled the bank in successfully positioning itself.

Projections under all parameters have not been only achieved but were surpassed as at end March 2005.

Encouraged with the success of Vision 2005, Vision 2010 was drawn to further consolidate the Bank’s

strength and take it to greater heights.

The Vision document 2010 had a “Vision” & a “Mission” statement as a guide, reflecting the corporate

philosophy, perception and expectations of our Bank, which needed to be imbibed by each and every

employee of the Bank.

The Vision 2010 document covering the period 2006-07 to 2009-10 was prepared based on an

assessment of global economic outlook, likely trends of the Indian economy in general & banking in

particular and the changing financial sector landscape. The objective was to set a horizon and allow our

Bank to pro-actively plan and suitably position itself in the next 5 years.

Based on the Vision 2010 document, the achievement as on March 2008 vis-à-vis Vision 2008 is as

under :

Vision 2008 vis-à-vis Achievement in

March 2008: PERFORMANCE

PARAMETERS

Vision March 2008 Actual March 2008

Deposit (Rs. Crore) 156000 166457

Advances (Rs. Crore) 95000 119502

Operating Profit (Rs. Crore) 3800 4006

Return on Assets (%) 1.30 1.15

Gross NPA to Gross Advances (%) 3.00 2.74

Cost to Income Ratio (%) 49.00 46.81

Business Per Employee (Rs. lac) 430.00 504.52

CD Ratio 60.90 71.79

Share of Deposit in the System (%) 6.00 5.01

Share of Advances in the System (%) 5.50 5.04

CRAR (%) – Basel II 13.00+ 13.46

Bank was able to meet majority of the quantitative projections for March 2008, except for three

parameters, i.e. ROA, Share of Deposit & Advances in the system.

However, the ROA improved to 1.37% as at December 2008. Bank’s share of Deposits and Advances

in the system, as on 16.01.09, improved to 5.23% and 5.22% respectively.

Recent Initiatives Taken by the Bank:

The Bank in the recent past has moved away from a hybrid 4 tier to a 3 tier structure with a

nomenclature of Circle Offices for the intermediate tier. The objective was to have a cost effective

delayered structure to expedite decision making at all levels.

Having taken aggressive IT initiatives, 100% CBS enabled Bank to centralize many activities thereby

increasing the efficiency and productivity across the Bank. The activities are being centralized to

transform the branches as points of sales for customer acquisitions, customer retention and better

customer service.

Bank proposes to set up one lac touch point to realize the target of 15 crore customers and 10 lac crore

business figures by extensive deployment of technology. We expect to increase our branch network to

5000, Number of ATMs to 8000. The bank will engage 12,000 Business correspondents for existing

branches; four such BCs will be attached to one branch (25000 touch points). Bank will set up 15,000

kiosks in branchless location with CBS and internet facility each kiosk will have four business

correspondent attached to it (75,000 touch points).

To further improve the customer service alternate delivery channels like ATMs and Internet banking

are promoted and are enabled for Transfer of funds, bill payments, ticket booking, tax payment and

donations to charitable organizations. E-bays have been set up for faster customer service.

The Bank has been giving greater thrust towards Financial Inclusion, SME Business and Agriculture

lending. The Bank has achieved 100% Financial Inclusion in 11,043 villages. The Bank is gearing up

for Metro/Urban Financial Inclusion in a big way and is committed to cover unbanked rural & urban

areas under its commitment to Financial Inclusion, both at geographical and functional levels.

Rajasthan Govt. Financial Inclusion project has brought in more than 25 lakhs customers in our fold.

Several other Special Schemes have been launched for BPL Customers including a Micro Finance

Branch in Mukundpur, Delhi; 9 Financial Literacy & Education Counselling Centres in Punjab &

Haryana; Scheme for Rickshaw Pullers launched at Varanasi, Allahabad, Lucknow & Patna; Common

Service Centre at Village Panapur Bihar. For Agriculture Sector we have introduced PNB Krishak

Saathi Scheme, increased limit of loans without collateral to 1 lakh and introduced several other

facilities to promote rural development.

New products have been launched like MIBOR linked deposit schemes, Depository services, Gold Coin

business; CMS, Score Based Lending Schemes, Centralization of backend activities etc.

For faster processing of retail loans, separate Retail Processing Hubs have been set-up at centralized

locations. Facility of submission of online application for Car, Education, Personal & Pension Loans is

provided.

Towards the objective of having a larger international presence, a subsidiary at UK has been made

operational. A new branch of PNB – IL has been made functional in Leicester, besides the existing two

branches. The Bank also has a branch at Kabul; an Off-Shore Banking Unit at Mumbai; a new branch at

Hongkong and Representative Offices at Dubai, Kazakhstan, Shanghai & Norway. The Bank has joint

venture in Nepal with Everest Bank Limited. We are having arrangements with various exchange

houses abroad. The technology solutions for all the overseas operations of the bank are provided from

India, thereby ensuring cost effective services to the overseas clients.

The Bank has launched two variants of Consumer credit card i.e. Gold and Classic. For customer

convenience, host of features like photo card, SMS alerts and interface with PNB’s Internet Banking

are being offered. The credit card will be globally accepted. This card will be accepted at over 3.5 Lac

merchant establishments and 30,000 ATMs in India as well as at over 29 million merchants

establishments and over 1 million ATMs throughout the world who are linked to Visa Payment

Vision 2013: A Curtain Raiser

Any Vision is an attempt to qualitatively assess the emerging banking environment in the backdrop of

global and domestic trend and tries to position ourselves in that scenario. It is not an attempt to predict

what will happen in future, nor is it a forecast.

Vision represents aspiration levels, more importantly, the need to develop aspiration, structure,

processes, people in an integrated way for sustainable growth in the future. Even though aspirations

may change, the structure, process and people need flexibility for adapting to the dynamic, even

changing competitive environment.

Our earlier Vision 2005 and 2010 were conservative, covered major parameters and macro strategies.

A need was felt to have a Vision to stretch the Bank’s potential with well defined strategies.

Accordingly, the honorable Board of Directors in the meeting held in Shimla in May 2008, proposed

the concept of Vision 2013 and set goals which were to be achieved in the next 5 years to position the

Bank as the “Number One Bank” in the country.

In this respect Vision 2013 is far more challenging, comprehensive and road map for our Bank in the

future.

NEW VISION & MISSION STATEMENTS

VISION & MISSION statements are powerful and give a strong message to all employees of an organization.

Normally, they are static in nature but any large scale change in beliefs and thoughts would require suitable re-

orienting these statements. The new VISION & MISSION of the Bank is given below:

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.”

MISSION

“Banking for the unbanked”

PNB VISION 2013

a) QUANTITATIVE DIMENSIONS

• Deposits to increase from Rs.166457 Crore in March 2008 to Rs.582000 Crore in March 2013, at an average

growth of 32%.

• Advances to increase from Rs.119502 Crore in March 2008 to Rs.418000 Crore in March 2013, at an average

growth of 28%.

• Total business to increase from Rs.285959 Crore in March 2008 to Rs.1000000 Crore in March 2013, at an

average growth of 28%.

• Operating Profit to increase from Rs.4006 Crore in March 2008 to Rs.15000 Crore in March 2013 with a

CAGR of 30.2%.

• Net Profit to increase from Rs.2049 Crore in March 2008 to Rs.7500 Crore in March 2013, at an average

growth of 30%.

• The Return on Assets [RoA] to increase from 1.15% in March 2008 to 1.30% in March 2013 [This ratio is

comparable to the RoA of the Peer Banks and is also better than all bank’s ratio of 1% as on March 08].

• The Return on Equity [RoE] to increase from 19% in March 2008 to 21% in March 2013.

• Customer base to increase from 3.7 Crore in March 2008 to 15 Crore in March 2013.

• Number of touch points to be 100000 by March 2013.

• To have a rural coverage of 100000 villages in the Indo-Gangetic Plains by March 2013.

ASPIRATIONS - QUANTITATIVE DIMENSIONS

[Amt in Crore]

Particulars

Mar 08 Mar 09 Mar 10 Mar 11 Mar 12 Mar 13 CAGR

Total Business 285959 360000 458500 604100 782500 1,000,000 28

Deposits 166457 210000 262000 351500 457000 582000 28

Advances 119502 150000 196500 252600 325500 418000 28

Operating Profit 4006 5650 6750 8700 10900 15000 30

Net Profit 2049 2650 3450 4500 5800 7500 30

RoA 1.15 1.18 1.23 1.25 1.27 1.30 -

RoE 19.00 19.17 19.91 20.16 20.62 21.00 -

Number of

Customers [ In

Crore ]

3.7 5 6 9 11 15 -

Rural Coverage - 55000 70000 75000 85000 100000 -

Touch Points - 12000 22000 40000 75000 100000 -

QUALITATIVE DIMENSIONS

A leader and front runner amongst nationalized banks

o In Financial Inclusion

o In all domestic operations

o In adopting best risk management practices

o In adopting global best practices in Corporate Governance & Corporate Social

Responsibility

o In HR policies to raise skills, morale and productivity

To be Global Bank

o Among the top 3 Indian banks with global presence in Middle East, South East Asia,

China, UK, Australia, Canada, etc.

o Bring best global practices to effectively compete with global players in India.

Become a Universal Bank

o Provider of complete range of financial services.

To be the most profitable bank amongst nationalized banks by focusing on :

o Fee based income/off-balance sheet exposures

o Mid Cap segment, Retail lending, SME Advances & Agriculture

o Reduction in Gross NPAs

o Expenditure Control

o Low cost deposits

o Ensuring higher spreads (return on advances minus cost of deposits/funds)

Capitalize on IT initiatives

o Provide more value added services

o Expand reach of ATMs

o Back Office Centralization of all CBS branches

o Promote internet banking

o Provide IT advisory services to other banks

Explore options of in-organic growth

o Merger of Private/Public Sector Banks

Enlargement of customer base and retention of existing customers.

Ensure smooth transition to adopting Basel II norms ahead of schedule.

Develop robust Management Information System for better decision making & policy

prescription.

Further entrench brand image of the Bank.

STRATEGIC VISIONING

Having completed the technology deployment with 100% CBS, Punjab National Bank

(PNB) has envisioned ambitious growth targets for the next five years.

The bank has been delivering reasonably good operational and financial performance

over the last few years, despite some of the most challenging market conditions in the

financial and credit markets for some time.

The bank’s last quarter (Q2) financial results amply displays that it continues on the

impressive growth trajectory notwithstanding the impact of challenging credit market

conditions.

Planning involves ex-ante co-ordination and conscious directions of activities with a

view to achieving certain pre-specified objectives. The PNB Vision 2013 represents the

aspiration level which is achievable but with appropriately and well defined strategies

which need to be followed with zeal, enthusiasm and dedication by all.

Portfolio analysis:

PRODUCTS OFFERED BY PNB:

Presently, it is the second largest bank of the country rendering a wide variety of banking services.

1. Centralized Banking Solution:

CBS, an inter branch networking and data sharing platform helps to operate account from any

city in India having CBS networked branches. Changing status from Customer of the branch

to Customer of the bank, presently there are over 2616 CBS networked branches in 820

cities.

2. NRI’s and Tourists:

Currency exchange services are being provided by PNB’s exchange Bureau’s spread

throughout the country.

3. Online Tax Payment:

PNB provides the facility of online payment of service tax, excise duty, DGFT, custom

duty and all charges under MCA.

4. Cash Management Service (CMS):

PNB’s CMS facilitates management of receivables and payments in technology driven

environment, ensuring availability of funds at reduced cost, helping reconciliation at

multi location accounts besides providing customized MIS.

5. Mutual Funds and Insurance:

The bank has tied up with Principal Financial Group for providing Mutual funds and

Insurance services and also tied up for distribution and marketing of UTI Mutual Funds.

6. NRI Services:

NRE, FCNR, RFC, NRO, Deposit a/c investment management and Housing Loan

facilities for NRIs are available.

7. Foreign Exchange:

PNB has 150 branches authorized for handling foreign exchange business and these

branches have been provided with SWIFT connectivity to ensure faster realization of

funds.

8. e-MoneyIndia:

Send money to the loved ones in India through PNB’s e-MoneyIndia service. Draft

delivery across 4,038 locations and Bank Credit to over 2,500 branches in india.

9. Online railway reservation/ air ticket booking:

PNB offers online booking and information through IRCTC payment gateway. Just click

and travel comfortably.

10. Depository Service:

PNB Depository service provides the facility of having shares and securities in Demat

form and executes transactions of sales and purchase hassle free electrnically.

11. Lockers:

PNB offers locker services at all its branches.

12. Customer care facility:

PNB presents 24 hour, customer care facility.

13. PNB Gold Coin:

PNB gives opportunity to dazzle the well wishers, patrons, partners, and acquaintances

with the mystical charisma of PNB’s 999.9 fineness pure 24-carat gold coins and to

convey the true value of treasured relationship. Enjoy guarantee of purity and weight of

hallmarked gold coins.

14. Electronic Clearing Service (ECS) and Electronic Fund Transfer (EFT):

ECS provides quick movement of funds in a paperless mode and EFT ensures an

expeditious transfer of funds using electronic media.

15. Wealth Management Service:

PNB provides customized financial advisory services for individuals that includes Mutual

Funds, insurance, retirement planning, tax planning and debt management to customers

for wealth maximization.

16. Online bill Payment:

PNB provides 24 hours, 365 days online payment of telephone, mobile, electricity and

insurance bills etc., online.

SERVICES PROVIDED BY PNB:

PNB offers financial solutions and services in an array of sectors. All these services that are

offered keep pace with the changing market trends in order to fulfill the needs and preferences of

the customers. Some of the well known sectors on which the main functions of the bank are

based are:

Personal banking

o Savings fund account

o Fixed deposit scheme

o Current account

o Loan services

Corporate banking

Agriculture finance services

Industrial finance services

Trade financial services

International banking services

LOAN FACILITIES PROVIDED BY PNB:

Car loan/ Two wheeler loan

Loan against jewellery

Traders loan available for:

o Whole sellers

o Dealers

o Distributors

o Individuals

o Firms

o Registered cooperative societies

o Companies

o Purchase of shop/showroom.

Housing loan

Personal loans

Corporate loans products such as:

o Working capital

o Term loan

o Bank guarantee

o Letter of credit etc.

Educational loan

PNB Gramin Chikitsak: schemes for financing qualified medical practitioners for setting

up clinics in rural areas at concessional rate of interest.

Loan to pensioners

Loans to women

o Mahila sashaktikaran abhiyaan

o Mahila samriddhi yojana

Sector & Market Segment:

SWOT Analysis of PNB:

Strengths:

Fundamentally sound bank.

3.7 crore strong customer base.

Well-entrenched Brand Image.

Dominant position in Indo-Gangetic Plain –No competition.

A leader amongst Public Sector Banks.

High proportion of customer base in deposits.

Strong Risk Management Practices.

Redefined processes through technology initiatives like CBS, ATM, Internet Banking.

100% CBS branches.

High tech platform incorporating EDW, CRM etc.

Large network of branches with 66% in Rural & Semi-urban areas

Weaknesses:

Predominant presence in less developed areas leading to high operating cost.

Complacency (Structural & Environmental).

Weak & Inconsistent MIS rendering decision making difficult.

Limited International presence and Low NRI business.

More dependence on conventional low margin business.

No Income from Financial Products such as Insurance, Mutual Fund, Credit Card etc.

“State” Ownership has affected level playing field and competitive ability.

Less flexibility in dealing with strategic HR & operational issues.

Imbalance in distribution/ deployment of staff.

Inadequate skills for modern banking.

Changing environment, adoption of technological advancement, marketing of products

requires change in the mind-set of employees.

Low per employee productivity

Opportunities:

Rural India is the next growth horizon with an opportunity 3 times the size of Urban

India.

Financial Inclusion is a clear-cut opportunity with overall exposure to formal services

of finance being about 20%.

Great opportunity for expanding business with over 60% population outside the banking

service net.

IT Initiative creating a back bone for increasing reach. It provides an opportunity to go

beyond the Brick & Mortar.

Bank has a visionary leadership which can transform the bank.

Large workforce of 55398 employees. Each and every employee has to believe we can do

it, usher in change in our attitudes/conventional wisdom, be a learner willing to adapt to

the changing banking environment.

Threats:

Aggressive marketing by competitor banks.

Expansion of peer Banks/Private Sector Banks in Indo-Gangetic belt eroding our

dominance.

Loss of savings business to Mutual Fund/ Insurance Products which are aggressively

marketed as being more remunerative.

Technological parity of competitor banks.

Aggressive strategy and innovative products, larger risk appetite of other banks