CHAPTER- 1

PROFILE OF THE FIRM/COMPANY

1.1 Profile of Punjab National Bank
The registered office of kotak mahindra bank 7, Bhikhaiji Cama Place , New DelhiDelhi (110607), and the address 4th floor Rajendra Bhawan, Rajendra Place, New
Delhi-110125, and the other contact details include contact no:- 011-26102303, 01123323654, fax no: 011-26196456, 011-23711663and email address of the company
hosd@pnb.co.in. The official website of the company is http://www.pnbindia.in. and
the group is Public Sector.
1.2 Introduction to Punjab National Bank
1. The Indian banking market is growing at an astonishing rate, withAssets
expected to reach US$1 trillion by 2010. An expandingeconomy, middle class,
and technological innovations are allcontributing to this growth.The countrys
middle class accounts for over 320 million people.In correlation with the
growth of the economy, rising income levels,increased standard of living, and
affordability of banking productsare promising factors for continued
expansion.
2. 14. The Indian banking Industry is in the middle of an IT revolution,Focusing
on the expansion of retail and rural banking.Players are becoming
increasingly customer - centric in theirapproach, which has resulted in
innovative methods of offering newbanking products and services. Banks are
now realizing theimportance of being a big player and are beginning to focus
theirattention on mergers and acquisitions to take advantage ofeconomies of
scale and/or comply with Basel II regulation.Indian banking industry assets
are expected to reach US$1 trillion by2010 and are poised to receive a
greater infusion of foreign capital,says Prathima Rajan, analyst in Celents
banking group and author of
3. 15. the report. The banking industry should focus on having a smallnumber
of large players that can compete globally rather than havinga large number of
fragmented players."

Kotak Mahindra is one of India's leading banking and financial services group, offering a wide
range of financial services that encompass every sphere of life.

Kotak Mahindra Bank Ltd is a one stop shop for all banking needs. The bank offers personal
finance solutions of every kind from savings accounts to credit cards, distribution of mutual funds
to life insurance products. Kotak Mahindra Bank offers transaction banking, operates lending
verticals, manages IPOs and provides working capital loans. Kotak has one of the largest and
most respected Wealth Management teams in India, providing the widest range of solutions to high
net worth individuals, entrepreneurs, business families and employed professionals.

Kotak Mahindra Mutual Fund (KMMF) has been established as a Trustunder the
Indian Trusts Acts, 1882. the trust Deed establishing KMMF and theDeed of
Amendment have been registered under the Registration Act, 1908 byt h e o f f i c e o f
the S ub- R egis tr ar of Ass ur anc es at M umbai. KM M F has
b e e n registered with SEBI vide registration number MF/038/98/1 dated 23
rd
June1998.The sponsor company, Kotak Mahindra Finance Limited (KMFL),
wasconverted into Kotak Mahindra Bank Limited (Kotak Bank) in March
2003DER

BEING

GRANTED

A BANKING

LICENSE

BY

THE

reserve Bank of India. KMFL promoted by Mr. Uday S Kotak, Mr.

S.A.A.Pinto and Kotak &Co., was incorporated on November 21, 1985,
under the name Kotak CapitalManagement Finance Limited. In early
1986, the promoters were joined byL a t e M r .H a r i s h M a h i n d r a a n d M r .
A n a n d G M a h i n d r a a n d t h e C o m p a n y s name was changed to Kotak
Mahindra Finance Limited.Kotak & Co is a highly respected trading company
of Mumbai, withinternational business. KMFL started with a capital base
of Rs.30.88 lakhs.

Punjab National Bank Ltd was the result of the efforts of far-sighted visionaries and
patriots, among whom were persons like Lala Lajpat Rai, Mr. E C Jessawala, Babu
Kali Prasono Roy, Lala Harkishan Lal and Sardar Dyal Singh Majithia. Incorporated
under the Act VI of 1882, Indian Companies Act, the Bank commenced operations on
2

April 12, 1895 from Lahore, with an authorised total capital of Rs 2 lac and working
capital of Rs 20,000. Prophetically, the Bank chose "Stability" as its telegraphic
address, as the future course of events were to prove - the Bank withstood various
financial crises including the trauma in the form of partition of India when the Bank
had to close 92 offices (33%) in west Pakistan which constituted 40% of its deposits
and 15 of its staff fell victims to the frenzy. The registered office was shifted to Delhi
and the Bank honoured all the deposit claims of the refugees even on the basis of
whatever little evidence they could produce. Subsequently, the Bank registered
impressive performance and grew from strength to strength.
A pioneer throughout, the Bank distinguished itself by appointing auditors in 1895
long before it was mandatory; introduced the "teller" system in 1944 (another first );
established profit sharing bonus, provident fund and voluntary outside audit well
before they formed keystones of good management.
After nationalisation came in 1969 the Bank, keeping with the economic ideology of
catalyzing development and amelioration of poverty by funding various selfemployment schemes, PNB expanded its presence rapidly in unbanked areas. With its
large presence throughout the country and with a view to strengthening the rural credit
delivery system, the Bank sponsored Regional Rural Banks (RRBs).
The bank's growth has been aided by take-over/merger of 7 private sector banks
during different periods in its history. The first ever and the only merger of a
nationalized bank with PNB was in 1993, viz., New Bank of India. By late 1980s
when the first whiff of liberalization came about, the Bank initiated strategic moves
towards diversification; and in 2002, 20% of government ownership was disinvested
through a very successful IPO to the public. In 2003, the erstwhile Nedungadi Bank
3

Ltd (e-NBL), a Kerala based private bank was amalgamated with Punjab National
Bank. This was the seventh merger in PNBs history of more than 115 years. In order
to meet future capital requirements on account of implementation of Basel II norms,
in March 2005, the Bank came out with Follow-on Public Offer (FPO) through the
book building process, reducing the shareholding of Govt of India to 57.8%. Punjab
National Bank with 4997 domestic offices including 46 Extension Counters has the
largest network amongst the nationalized banks i.e. next only to SBI.

1. The Kotak Mahindra Group was born in 1985 as Kotak Capital

ManagementFinance Limited. This company was promoted by Uday Kotak,
Sidney A.Pinto and Kotak & Company. Industrialists Harish Mahindra and
AnandMahindra took a stake in 1986, and thats when the company changed
itsname to Kotak MahindraFinance Limited. Since then its been a steady and
confident journey togrowth and success. 1986 : Kotak Mahindra Finance
Limited starts the activity of Bill Discounting 1987 : Kotak Mahindra Finance
Limited enters the Lease and Hire Purchase market 1990 : The Auto
Finance division is started 1991 : The Investment Banking Division is
started. Takes over FICOM, one of Indias largest financial retail marketing
networks 1992 : Enters the Funds Syndication sector 1995 : Brokerage and
Distribution businesses incorporated into a separate company - Kotak
Securities. Investment Banking division incorporated into a separate company
- Kotak Mahindra Capital Company 1996 : The Auto Finance Business is
hived off into a separate company - Kotak Mahindra Primus Limited. Kotak
Mahindra takes a significant stake in Ford Credit Kotak Mahindra Limited, for
financing Ford vehicles. The launch of Matrix Information Services Limited
marks the Groups entry into information distribution.
2. 19. 1998 : Enters the mutual fund market with the launch of Kotak Mahindra
Asset Management Company. 2000 : Kotak Mahindra ties up with Old Mutual
plc. for the Life Insurance business. Kotak Securities launches
kotakstreet.com - its on-line broking site. Formal commencement of private
equity activity through setting up of Kotak Mahindra Venture Capital Fund.
2003 : Kotak Mahindra Finance Ltd. Converts to bank

Kotak Mahindra Finance Ltd. (KMFL), the group's flagship company,

200

receives banking license from the Reserve Bank of India (RBI). With this,

KMFL becomes the first non-banking finance company to be converted into

a commercial bank - Kotak Mahindra Bank Ltd.

200
4

200
5

200
5

Enters alternate assets business with the launch of a private equity fund.

Kotak Mahindra Group realigns joint venture in Ford Credit; takes 100%
ownership of Kotak Mahindra Prime (formerly known as Kotak Mahindra
Primus Limited) and sells its stake in Ford credit Mahindra to Ford.

Launches a real estate fund

200

Buys out Goldman Sachs' equity stake in Kotak Mahindra Capital Company

and Kotak Securities Ltd.

200
8

Launched a Pension Fund under India's National Pension System (NPS)

Kotak Mahindra Bank Ltd. opens a representative office in Dubai

200
9

Kotak Mahindra Bank Ltd. becomes anchor investor in Ahmedabad

Commodities Exchange (ACE)

201

ING Vysya Bank has merged with Kotak Mahindra Bank with effect from

April 1, 2015.[7]

Merger with ING Vysya Bank[edit]

In

2014,

Kotak

Bank

acquired ING

Vysya

Bank for

deal

valued

at 15000 crore(US$2.4 billion). With the merger, the total human resource count will
jump to almost 40,000 heads and the branch was expected to rise over 1200. [8] Post
5

the merger,ING Group which controlled ING Vysya Bank will own 7% share in Kotak
Mahindra Bank.[9]
Awards and recognitions[edit]

Won Gold Award for Best Innovation Worlds first socially powered bank
account and Gold Award for Best App developed Worlds first banking
application using Twitter awards at the Indian Digital Media Awards 2014 for
Kotak Jifi

Recognised as Highest Fundraising Company in Corporate Challenge category

in Standard Chartered Mumbai Marathon 2014

Kotak Mahindra Bank was ranked 292nd among India's most trusted brands
according to the Brand Trust Report 2012, a study conducted by Trust Research
Advisory. In the Brand Trust Report 2013, Kotak Mahindra Bank was ranked
861st among India's most trusted brands and subsequently, according to the Brand
Trust Report 2014, Kotak Mahindra Bank was ranked 114th among India's most
trusted brands.[10]

Won National Securities Depository Ltd. (NSDL) award in the Best Performer
in account Growth Rate category 2013, for Demat Accounts [11]

Our Corporate Identity

TOLL FREE
1800 102 6022

The symbol of Kotak Mahindra Group is the 'Ka', of distinctly Indian origin; while its
curves form the universal 'infinity' sign, thus reflecting our uniquely global Indian
personality.

The symbol of the infinite Ka reflects our global Indian personality. The Ka is
uniquely Indian while its curve forms the infinity sign, which is universal. One of the
basic tenets of economists is that man's needs are unlimited. The infinite Ka
symbolises that we have infinite number of ways to meet those needs.

1.21 Services provided by PNB

Punjab National Bank is the largest nationalized bank is
serving its 8.9 crore customers with the following wide
variety of banking services shown in the Fig. 1.1:

F in a n c i
ng of
tra d e

A g ric u lt
u ra l
F in a n c e
In d u s tr
ia l
F in a n c
P e rso
e
nal
B anki
ng

In te rn a ti
onal
B a n k in g
B anki
ng
S e rv i
ce

C o rp o r
a te
B anki
ng

Figure-1 Banking Service

The meanings of various Banking Services which are provided to the customers by
bank are explained as below:

a. Corporate banking
Commercial banks offer the following products and services to corporations
and other financial institutions: Loans and other credit products this is
typically the biggest area of business within corporate banking, and as noted
earlier, one of the biggest sources of profit and risk for a bank.
b. Personal banking
Personal

banking

also

known

as

the

Private

banking.

Private

banking is banking, investment and other financial services provided

by banks to private individuals who enjoy high levels of income or invest
sizable assets.
c. Industrial finance
Financial services are the economic services provided by the finance industry,
which encompasses a broad range of organizations that manage money,
including credit unions, banks, credit card companies, insurance companies,
accountancy companies, consumer finance companies, stock beverages,
investment funds & some government sponsored enterprises.
1.3 Companys Vision and Mission
1.31 Vision
o

To positively contribute towards economic, environmental and social wellbeing of communities through Corporate Social Responsibility agenda
To be the most trusted Global Indian Financial Services brand and the most preferred financial
services employer with focus on creating value.

1.32 Mission
o

Create a lasting value for communities by:

8

Promoting and supporting education and other interventions for the

under privileged
o

Encouraging employee volunteering

Supporting Non-Governmental Organizations and other institutions

with financial and other resources to collectively deliver community initiatives

o
o
o
o
o

CSR Focus Areas***

Promoting Education - Primary Focus Area
Enhancing vocational skills and livelihood projects
Promoting preventive healthcare and sanitation
Reducing inequalities faced by socially and economically backward groups
Environmental Sustainability

1.4 Product Range of the Company

PRODUCT PROFILE
The product services of the Kotak Mahindra group comprise the following areas.

Bank

Kotak Realty Fund

Credit Cards

Kotak Private Equity

Life Insurance

International Business

Mutual Fund

Investment Banking

Car Finance

Institutional Equities

Securities
9

Product services of the Kotak Mahindra Bank Limited encompass a wide

arena.They can be broadly put under the heads of Banking and Savings,
Corporate and
Institutional, Investments and Insurance and Loans a
nd Borrowings.
T h e s e m a i n s e r v i c e p r o v i s i o n a r e a s a g a i n H AVE A N U M B E R O F
S U B - A R E A S U N D E R THEM.
BANKING AND SAVINGS

BANKING AND ACCOUNTS

CONVENIENCE BANKING

CREDIT CARDS

NRI SERVICES

DEMAT

DEPOSITS
CORPORATE AND INSTITUTIONAL

CORPORATE FINANCE

TREASURY

INVESTMENT BANKING

INSTITUTIONAL EQUITIES

INVESTMENTS AND INSURANCE

LIFE INSURANCE

ESTATE PLANNING

MUTUAL FUNDS

GOLD

SHARE TRADING

10

STRUCTURED PRODUCTS
LOANS AND BORROWINGS

CAR FINANCE

COMMERCIAL LOANS

HOME LOANS

PERSONAL LOANS

LOANS AGAINST PROPERTY

K O TAK M A H I N D R A B A N K L I M I T E D A L S O S P O N S O R S K O TAK
M A H I N D R A M U T U A L F U N D . KOTAK STAR KID IS THE NEW OFFER
FROM KOTAK MAHINDRA MUTUAL FUND. IT IS A
UNIQUE P R O D U C T W H I C H I S E S S E N T I A L L Y A M U T U A L F
U N D A L O N G W I T H I N S U R A N C E C O V E R A G E AVAILABLE IN A
SINGLE PACKAGE.

1.GOLD DEBIT CARD

GOLD DEBIT CARD, A 'FULLY LOADED' VISA DEBIT CARD
WITH UNLIMITED FREE ACCESS TOALL THE VISA ATMS IN
INDIA AND WORLDWIDE. THE CARD ALSO HAS HIGHER
PURCHASEA N D C A S H W I T H D R AWAL L I M I T S R S . 1 ,
7 5 , 0 0 0 P E R D AY P U R C H A S E L I M I T S AN D R S . 1 , 75,000 CASH
WITHDRAWAL LIMIT.IN ADDITION TO THE ABOVE, THE KOTAK
GOLD DEBIT CARD ALSO ALLOWS FOR THE
COMPLETEW A I V E R O F T H E F U E L S U R C H A R G E A C R O
SS ALL PETROL PUMPS ANYWHERE IN INDIA,
irrespective of the amount of the transaction. Our
d i s c e r n i n g c u s t o m e r a l s o enjoys Gold lifestyle benefits (offers on fine
dining,travel, etc.)
2. ACE ACCOUNT
Ace Deposit is a unique product from Kotak Mahindra
B a n k L i m i t e d . I t combines the prospective of lucrative returns
from an equity fund along with thes t a b i l i t y a n d s a f e t y o f a F i x e d
Deposit. Here the monthly interest accruing
too n e ' s t e r m d e p o s i t i s c h a n n e l i z e d
f o r i n v e s t m e n t i n m u t u a l f u n d s a s p e r a systematic
investment plan. The safety of the principal amount on the
fixeddeposit is guaranteed. The interest income becomes
l i n k e d t o t h e p r o s p e c t o f market-linked returns.
3. CAR LOANS

11

Kotak Mahindra Bank Limited Car Loans come from Kotak Mahindra
PrimeLimited a subsidiary unit of Kotak Mahindra Bank Ltd. The company
providesfinance options for and multi-utility vehicles including cars. Kotak
MahindraPrime Limited provides car dealers with inventory funding. It is also
the preferred financier of a number of car manufactures in the country.
4.
HOME LOANS
Kotak Mahindra Bank Limited Home Loans comes with a host
o f a t t r a c t i v e features. Some of the salient features are described below.

Wide array of offerings

Absence of hidden charges

Pre-approved sanctions

Life insurance options

Personal accident insurance, which is free15

Vanilla Home Loan, Fixed Deposit linked Home Loans and Kotak
Flexi HomeL o a n a r e s o m e h o m e l o a n o f f e r i n g s f r o m K o t a k
Mahindra Bank Limited.
5. PERSONAL LOANS
Loans Against Property is a unique product from Kotak Mahindra.
This loan can be used for issues like debt consolidation, educational
finance, emergencies
andt
h
e
l
i
k
e
.
Some key
features of this loan are given below.

Heightened loan eligibility for businesspersons

Loans are available against both commercial and residential properties

Personal accident insurance comes free with the loan

Loan range is from Rs.10 lakh to Rs.3 crore

6. SAVINGS ACCOUNT
It provides quick & convenient banking transactions along with options for
your money to earn high returns. The savings account goes beyond the traditional
roleof savings, to provide you a range of services from funds transfer options toonline
payments of bills to attractive returns earned through a comprehensivesuite of
investment options.
12

Features & Benefits:

1 . F r e e a c c e s s a t a l l d o m e s t i c a n d i n t e r n a t i o n a l V I S A ATM s You
n o l o n g e r have to worry about locating your Bank or Partner Bank ATM
- Use thef i r s t V I S A
A T M t h a t y o u s p o t , f o r f r e e c a s h w i t h d r a w a l o r b a l a n c e enq
uiry transactions. So walk into any VISA ATM in India or abroad
towithdraw cash or for balance enquiry.2 . M u l t i p l e a c c e s s c h a n n e l s A c c e s s
y o u r a c c o u n t a n y t i m e t h r o u g h y o u r l a n d line, mobile phone or internet to
get information on your account balanceor track your transactions. You can
even transfer funds through PhoneBanking or Net Banking.3 . F i n a n c i a l
payments facilitated through the savings account Use the
f r e e Kotak Payment Gateway to make online payments for your utility
bills,credit cards, online trading of shares or even online shopping. All
this atthe click of a mouse!
4.Quick and easy funds transfer funds easily an
d w i t h s p e e d , t o a beneficiary account at another bank.
You c a n a v a i l o f t h i s f a c i l i t y
byw a l k i n g i n t o a n y o f o u r b r a n c h e s o r b y s i m p l e l o g g
i n g o n t o N e t Banking. You also get a free multi-city cheque book so
that money fromy o u r a c c o u n t i s t r a n s f e r r e d t o t h e b e n e f i c i a r y ' s
a c c o u n t a t a n y o f o u r branch locations, in the fastest possible time.5 . F r e e
banking transactions you can issue demand drafts or send
c h e q u e s for collection anywhere in the country for no extra
charge.6 . A c t i v M o n e y E a r n b e t t e r r e t u r n s i n y o u r s a v i n g
s a c c o u n t , w i t h o u r ActivMoney facility that automatically
sweeps out idle funds, above athreshold, from your account into Term
Deposits. These Term Depositss w e e p b a c k i n t o y o u r a c c o u n t t o m e e t
fund requirements when
your w i t h d r a w a l s e x c e e d t h e b a l a n c e a v a i l a b l e i n y o u r a c c
o u n t , t h e r e b y providing you maximum liquidity.17

7.Free investment account Use the Net Banking facility to

purchase/redeemmutual funds online while directly debiting / crediting your bank
account.Further, you get a free investment account for tracking your
investmentswith the Bank. This account provides you a consolidated view of all
your m u t u a l f u n d i n v e s t m e n t s a c r o s s s c h e m e s w i t h u p d a t e d r e t u r n s
s t a t u s , latest NAV information and research reports.8 . D e d i c a t e d r e l a t i o n s h i p
m a n a g e r y o u g e t a o n e p o i n t c o n t a c t f o r a l l y o u r banking related
queries and transactions. Your relationship manager
isq u a l i f i e d t o h e l p y o u w i t h f i n a n c i a l p l a n n i n g a n d s o u n d i
n v e s t m e n t decisions in order to meet your financial goals.9 . F a m i l y
Savings Account the Kotak Ace Savings package allows you
t o extend the Kotak banking experience to three of your family
members.Under this scheme you are eligible to open 3 Edge Savings
Account with NMC waiver on all 3 accounts, so long as the AQB of your ACE
13

accountis
maintained.10. Online trading account Link your savings account to your o
nline tradingwith Kotak Securities to enable transfer of funds from your
bank account toyour account with Kotak Securities and vice
versa.1 1 . K o t a k M a h i n d r a B a n k s P r o S a v i n g s A c c o u n t
is an account packed with powerful features to provide you a
s u p e r i o r b a n k i n g e x p e r i e n c e a t a v e r y comfortable balance
requirement. We provide you a relationship manager who will specifically
take care of your banking and investment needs.

In the intense competitive environment, which is set to intensify further with the entry
of new players, the Bank is diversifying its revenue streams. During the FY13, the
Bank acquired 30% stake in MetLife India Insurance Company Ltd., crediting a new
entity named PNB MetLife India Insurance Company Ltd. Punjab National Bank is
offering credit and debit card, Gold Business, Merchant Banking , Mutual Fund,
Factoring Services, etc. to the customer in the following table 1:
CUSTOMER
ORIENTED
PRODUCTS
OFFERED BY
PNB

NEW
INITIATIVES

1.
2.
3.
4.
5.
6.
7.
8.
1.
2.
3.
4.
5.
6.

Saving account
Current account
Fixed deposit
Demand deposit
Loans
Mutual funds
Insurance
Deals in foreign exchange
Credit Card Business
Bullion Business
Segment wise performance
Treasury operations
Banking operations (other than treasury)
International operations
14

AREAS OF
OPERATIONS

7. Priority sector credit

8. Farmers welfare
9. Golden Jubilee Rural Housing Scheme
10. Regional Rural Banks
1. Priority sector
i.
Credit to agriculture
ii.
Agriculture Debt Waiver and Debt Relief
Scheme 2008.
iii.
Small and Medium Enterprises.
iv. Collateral Free Lending.
v. MSME specialized and MSME Focus
Branches.
vi.
Credit to weaker section.
vii.
Credit to women Beneficiaries.
viii.
Promoting Financial Inclusion.
ix.
Opening No Frill Account.
x.
Opening of Banking KIOSKS.
2. Retail Credit.
3. For-ex Business.
4. Treasury Operations.
5. Business Diversification.
i.
Mutual Fund Business.
ii.
Gold Coin Business.
iii.
Depository Services.
iv. Online Trading Facility
v. Merchant Banking.
vi.
Cash Management Services
vii.
Credit Card Venture.
6. Transaction Banking.
7. Corporate Banking
8. International Banking/NRI

15

PRODUCTS OF
MSME
DIVISION

PNB Artisans Credit Card Schem

PNB Gramin Chikitsak

3A
3B
4
5
A
B
6
7
8
A
B
C
D
9
10
11
12
13
14
15
16
17
18

Scheme for Advances to Owner Drivers of Taxi

Cars, Three
wheelers, Station Wagons, Tempos etc.
Sanction of Second Term Loan
Scheme for Financing Professionally Qualified
Medical
Practitioners
Consolidated Scheme for Financing to Traders
Financing of Stock/receivables/Other Block Assets
Financing Retail Traders For Purchase of
Shop/Showroom
Financial assistance to Housewives and other
Women
PNB Laghu Udhyami Credit Card Scheme
(PNBLUCC
Scheme)
Advances to Small Road Transport Operators
Loans for New Vehicles
Sanction of Second Term Loan
Loans to Purchase Old Vehicles Additional
Guidelines
Overdraft limit to Small Road Transport Operators
Financial Assistance to War Widows for setting up
of Small
service & Business Activities
Credit Guarantee Fund Trust for Micro & Small
Enterprises
Scheme For Financing Small Scale Industry
Related
Service/Business Enterprises SSSBEs
PNB Green Credit
PNB SME Sahyog Scheme
Mahila Udhyam Nidhi Scheme
Financing Craftsmen & Qualified Technician
Entrepreneurs
Refinance Scheme for Acquisition of ISO 9000
Series
Certification.
Ex-Service men Scheme for Setting up of a Cyber
Connect.
Scheme For Financing Travel Agents And Tour
Operators.
16

19

(Manufacturing)
Scheme for Financing to Micro & Small Enterprises
(MSE)
by way of Working Capital Demand Loan
Table-1 Product Range

1.5 Size (in terms of Manpower & Turnover) of Organisation

1.51 In terms of Manpower:

CADRE
OFFICERS
CLERKS
SUB
STAFFub
Staff(incl.PTS)
Total

MARCH 2013
NUMBER
%
23610
37.30
25449
40.21
14233
22.49

MARCH 2014
NUMBER
%
23811
36.33
26864
40.98
14866
22.69

63292

65541
Table-2 Size of Manpower

1.52 In terms of Turnover:

109.63

Revenue

billion(US$1.7 billion
)(2011)[1]
15.69

Net income

billion(US$250 millio
n)(2011)

17

18

Revenue: INR 474 billion (US$ 8.7 billion)

Net Income: INR 49.54 billion (US$ 906 million)
Total Assets: INR 4.97 trillion (US$ 90.9 billion)

1.6 Organizational Structure

The bank has a three tier structure comprising of head office, circle office and branch
office. There are 69 circle offices and 6215 branch offices. There is decentralized
power up to the branch level which has improved speed of decision making. The
Punjab National Bank has Functional organisational structure. In a functional
organizational structure the organization is grouped based on functional areas, such as
IT, finance, marketing and human resources.

19

1.61 Structure according to office

Figure-2 Four tier structure of PNB

Branch 641
The Zonal Managers and Regional Managers head the Zonal Offices and Regional
Offices respectively. The Branch is headed by AGM\CM\Senior Managers\Managers
depending upon the size of the Branch activities and rendering of satisfactory
customer services.
The Bank has a very good system of delegation power of different functionaries in the
hierarchy to facilitate speedy decision-making process even up to the branch level.

20

EMPLOYEES

The employee strength of your Bank, standalone, was 18,335 and along
with its subsidiaries was 31,432 as of 31st March 2015. Upon the
merger, 10,314 employees have been added up in the Bank and 514
employees in the subsidiaries.

191 employees employed throughout the year and 30 employees employed

for part of the year were in receipt of remuneration of Rs. 60 lacs or
more per annum.

With an average age of 31 years your Bank continues to attract talent

across all its businesses and hierarchy and has put in place various
processes and systems to ensure alignment of employee behaviors with
the organization''s core values.

1.62 Structure according to delegation of powers

GDAFCBE..
GMuo(D
Mn(Da..P
'(cer.&
SDtTaCd.AIW.
eir&ouRa..
poeldMA
onadr..iD
saiet)n.
ilugtc)
thr)o
seyr
)a
d

M
R

t
i
kf

l e

i c
ud
t
t )

c
)

Figure-3 Structure of PNB according to delegation of authorities

21

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

1.7 Market Share

22

Punjab National Bank (PNB) is the second largest public bank in India after SBI in
terms of branch, network and business .Currently, it has over 6 crore customers. The
segments in which the business of the bank can be divided in are- Corporate Banking,
Retail Banking and Treasury. The bank has 5.18% market share in deposits and 5.11%
market share in credit.The business per employee of the bank stood at Rs.11.61 crores
as on Mar13. PNB has wholly owned subsidiaries in Bhutan, Kazakhstan and UK. It
also has a joint venture in Nepal with a local bank. The Government of India owns
57.9%

stake

in

PNB.

PNB also provides a range of financial services - life insurance, merchant banking,
mutual funds, credit card, factoring, security trading, pension fund management and
primary dealership in the money market - through its subsidiaries. Its subsidiaries are
PNB Gilt Ltd, PNB Housing Finance Ltd, PNB Investment Services Ltd, PNB Life
Insurance Co Ltd etc. PNB has expanded its wealth management services by foraying
into Life Insurance business and tie-up with MetLife India Insurance Company Ltd.
This deal will allow PNB to leverage its vast network to generate strong

23

bancassurance income.
Last year, PNB has started its corporate social responsibility activity in Mumbai under
the aegis of PNB Prerna' to strengthen its ties with society. It has successfully
completed one year of its existence.

Figure-4 Market Share

24

1.8 Present Leadership

PRESENT LEADERSHIP
Ms. Natasha

DESIGNATION
HR Manager, North Circle, Rajendra

Mr. Sachin Rathi

place.
Officer Manager, North Circle, Rajendra
place.

Ms. Vandana
Mr. Nitin

Credit Manager, North Circle, Civil Line.

Credit Manager, North Circle, Pitampura
Table-3 Present Leadership

25

26

1.9 Sources of Data Collection

There are two typed of sources of data that are, primary and secondary data.
1.91 Primary data: Primary data is important for all areas of research because it is
unvarnished information about the results of an experiment or observation. It is like
the eyewitness testimony at a trial. No one has tarnished it or spun it by adding their
own opinion or bias so it can form the basis of objective conclusions. Primary method
is first hand information. Primary data is the specific information collected by the
person who is doing the research. It can be obtained through clinical trials, case
studies, true experiments and randomized controlled studies. This information can be
analyzed by other experts who may decide to test the validity of the data by repeating
the same experiments. To carrying out this study, we will not use primary data.

1.92 Secondary data: Secondary data is the data that have been already collected by
and readily available from other sources. Such data are cheaper and more quickly
obtainable than the primary data and also may be available when primary data cannot
be obtained at all. Secondary method is easily available. Various sources of
information were collected for the various financial institutions in the market.
Secondary method is obtained by using net or from referencing the various books or

27

by balance sheet and journals etc. To carrying out this study, we will use only
secondary data. In secondary data, we choose External sources method. However the
following sources were considered for information gathering:
a) RBIs guideline notes
b) Data from Basle Committee on Banking Standards (BCBS)
c) Research papers, power point presentations and PDF files prepared by the
bank and its related officials.
d) PNB Pratibha, magazine of Punjab National Bank
e) Past and Present Financial Statements:
i.
Balance Sheet
ii.
Profitability Statements
f) Loan Policy and Internal Circulars of the bank
g) Information from various books on risk management.
h) CMA data i.e. Credit Monetary Arrangement data which includes the
following 6 forms:
i.
Analysis of Balance Sheet
ii.
Comparative Statement of current assets and current liabilities

28

CHAPTER- 2
SWOT ANALYSIS OF THE COMPANY

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33

2.1 Strength, Weakness, Opportunities And Threats of Punjab National Bank

Strength

Weakness

a. PNB has a wide network of

a. Less penetration in the urban

branches and ATMs allowing it to

areas
b. Inadequate advertising and

cater to large no. of customers.

branding as compared to other
banks
c. Legal issues regarding employees

b. Large customer base.

c. The

PNB

established

brand
and

is

well

very

well

caused a bad name of PNB

d. Negative Environment
e. Corruption and red-tapism
f. Slow decision making due to large

recognized.
hierarchy
g. High gross Non-Performing
d. PNB has adapted to technological

Assets.
h. Fewer locations as compared with

changes in the banking sector and

HDFC Bank and ICICI bank

i. High interest rate as compared to

can leverage it to cut costs, as

well as improve its services.
e.

other housing finance institutions

Top management takes large

PNB has all the products under

its belt, which help it to extend the

amount of time to approve high

relationship

value loan borrowers.

with

existing

customer. PNB has umbrella of

products to offer their customers,
if once customer has relationship
with the bank
Opporunities

Threats
34

a. Fast growing Indian economy

a. Advent of MNC banks: Large

presents tremendous credit growth

numbers of MNC banks are

opportunity for the bank.

mushrooming

in

the

Indian

market due to the friendly policies

b. Indian

banking

sector

is
adopted by the government. This

witnessing high growth thus PNB

can

increase

the

level

of

should also grow.

competition and prove a potential
c. Dissatisfied Customers of Other
Banks: There are many companies

threat for the market share of

PNB.

which are not satisfied with its

b. Dissatisfied

Customers:

Poor

current bank, so PNB with its

customer
superior

service

quality

support/

service

is

can
creating a lot of dissatisfaction

capture those customers.

among the customers, this can
d. The Banking sector stands to gain

prove to be a serious problem as

from liberalization which will

far as the market reputation of the

help PNB spread its wings.

bank is concerned and cane be a

major threat in future business

e. PNB can tap the huge potential in

acquisition.

Micro Financing by leveraging

the penetration of its operations in

c. Increasing competition from other

nationalized banks because of

rural and semi urban India

their

ever

standards.

Table-4 SWOT analysis

35

improving

service

2.2 Best Practices/Usps of the Company

2.21 Usp Adopted In Finance
a.
b.
c.
d.
e.
f.
g.
h.
i.
j.

Disclosure of fees and charges and other terms and conditions.

Changes to terms and conditions and fees and charges.
Disclosure of general information about banking services.
Privacy and confidentiality.
Statements of account.
Copies of documents.
Direct debits.
Charge backs on credit cards.
Financial hardship.
Debt collection

2.22 Practices Adopted In Marketing

a. Festival bonaza tool of sales promotion is used by PNB bank on the ocassion
of DIWALI AND HOLI.
b. Advertisements are given in television and information is also given about
products.
c. Road side canopies, hoardings, banners also used for marketing.
d. Social websites are also used for doing marketing of products & services of
PNB through festivals to promote their product and services.
e. Services offered by ing vysa bank through radio also.
f. Pop up ads.

2.23 Practices of HRM

a. Manpower Plan was finalized well in time in a scientific manner.
b. Recruitment plan is being prepared based on the Manpower Plan approved by
the board.
c. Leadership Development Forum has been created which will facilitate
identification of Personals.
d. Sucessors for various key areas in Bank.
e. For the welfare of the staff various welfare schemes are given to the
employees.
f. Financial aid given to the employees who die while in service of the office.
36

g. Hospitalization relief scheme.

h. Scheme of providing facility of Medical Check-up of the employees/spouses
above 40 years.
i. The Bank follows the reservation policy for SCs, STs and OBCs as prescribed
by Government of India.
j. HRMS 'PNB Parivaar' - A People Soft Package containing an exhaustive
database of all the employees.

37