Economics project part 2

PUNJAB SIND BANK

Acknowledgment
I would like to express my special thanks of gratitude to my teacher Ms Swati sharma
as well as our principal Ma’am Maya who gave me the golden opportunity to do this
wonderful project on the topic Punjab Sind Bank which also helped me in doing a lot of
Research and i came to know about so many new things I am really thankful to them.
Secondly I would also like to thank my parents and friends who helped me a lot in
finalizing this project within the limited time frame.
Sukhman Waraich.

 
Content  
 
S.no  Topic   Pg.No 
1  Background    
2  Introduction    
3  Vision and Mission    
 
4  Organizational structure of bank   

5.  Fixed deposits    

6  Saving accounts and types    
7  Repo rates    

8.  Loan and advance rates  

9  Achievements  

10  Policies of PNB 

11  Conclusion 
12 Reference 

Background
The Bank has the distinction of being the first indian bank to have started solely
with indian capital that has survived to the present.PNB has also had the
privilege of maintaining accounts of national leaders such as mahatma
gandhi,jawaharlal nehru, indira gandhi and also of the famous jallianwala bagh
committee. It was registered on 19th may 1894 under the indian companies act
with its office in anarkali bazaar Lahore.PNB founders included several leaders of
swadeshi movement such as Dyal singh majithia and lala harikrishen lal, lala
lalchand, 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.

Introduction
The Bank's business is taking deposits, and making advances and investments
and is principally divided into retail banking, corporate banking, priority sector
banking, treasury operations and other banking services such as agency
functions for insurance, distribution of mutual funds and pension and tax
collection services. They have various deposit products, such as current, savings
and term deposits for our customers.The Bank currently has only one
shareholder, i.e. the President of India, acting through the Ministry of Finance,
GoI.​PNB is the third largest bank in India. Punjab National Bank is an Indian
multinational banking and financial services company. It is a state-owned
corporation based in New Delhi, India. The bank was founded in 1894. As of 31
March 2017, the bank has over 80 million customers, 6,937 branches and 10681
ATMs across 764 cities. IBA Banking Technology Awards 2019
 Vision and Mission
Mission
"Creating Value for all its customers,Investors and Employees for being the first
choice for all stakeholders"

Vision
"To position PNB as the `Most Preferred Bank` for customers, the `Best Place to
Work In` for employees and a `Benchmark of Excellence` for the industry"
 Organizational structure of the bank

Fixed deposits
The bank offers its customers an attractive rate of interest of 4% per annum, which is paid out
half yearly. PNB offers multiple​ ​fixed deposi​t​ options to their customers to park their surplus
savings for a fixed tenure. A customer is required to make a deposit once into their FD account
at the time of opening the account with the bank. The customer is not allowed to deposit more
money and withdraw any money in the account during the tenure of the deposit. Fixed Deposits
of PNB have a higher interest rate compared to their saving deposits.

What is a fixed deposit ?

A fixed deposit, or 'FD', is a type of savings/investment account that promises the

investor a fixed rate of interest. In return, the investor agrees not to withdraw or access
their funds for a fixed period of time. In a fixed deposit investment, interest is only paid
at the very end of the investment period.

PNB FD interest rates for long term deposits with tenure of 5 years to 10 years offer
good returns. PNB fixed deposit rates for deposits with a tenure of 10 years is 5.30%.
Senior citizens are offered deposit rates of 5.80% p.a. for long termed FDs.
Factors that affect the pnb Deposit rates
Policies Framed by RBI – ​As per RBI guidelines, the change in Cash Reserve Ratio

(CRR) and repo rate affects the interest rate of all banking instruments including the

fixed deposit.

Recession – Recession results in a decrease in the interest rate offered on fixed

deposit. At the time of recession, RBI is forced to release the funds in the market

which it achieves by lowering the rates on cash reserve of the banks and hence,

providing them with additional liquidity. As a result of high liquidity and low credit

demand, banks reduce the rates on FD.

Inflation – Inflation has a positive effect on a fixed deposit interest rate. Banks

typically fix interest rates of FD in a manner that it is higher than the existing inflation

rates. Hence, FD rates tend to be higher in a period of rising inflation.

Current State of Economy – ​Economic condition of the country is the major factor

that affects the fixed deposit interest rate. In a booming economy, people need and

are willing to take larger credit to meet their personal and business requirements. In

periods of high credit demand, banks offer higher interest rates to garner more funds

through fixed deposits.

 Saving accounts and types

A savings account is a basic type of bank account that allows you to deposit money,

keep it safe, and withdraw funds, all while earning interest. Savings accounts offered

by most banks, credit unions, and other financial institutions are FDIC insured and

typically pay interest on your deposits.A savings account works by opening and

funding your account. In return, the financial institution pays you interest on your

savings because they use your money to make loans to other people.They take

money from one person (and pay them interest) and loan money to other people (and

charge them interest).

Saral Savings Scheme: ​This is a no-frills bank deposit scheme that provides account

holders with the basic features of a savings account. One of the benefits of this account

is it is a zero balance account. The account can be opened with a minimum balance of

just Rs. 100/-, with no penal charges for low account balance. The account is designed

for customers who are unable to maintain a high balance in their account due to the

nature of their work, such as artisans, labourers, etc.

Being a basic savings account, holders will receive an ATM card and can make 5

withdrawals in a month. They will have to be present to conduct any transactions and

the account balance should be below Rs. 50, 000 at any given time.

Savings Bank Account: The Savings Bank account introduced by the bank provides

account holders with the benefits associated with a savings account without the need to

maintain a high minimum balance. This account, which can be opened by individuals as
well as societies, trusts and clubs, will receive an ATM card as well as receive a free

passbook. Holders can also avail of a cheque book facility.

PSB Premier Savings Bank Account: A savings account targeted at high net worth

individuals, this account offers holders a number of services at no extra charge. On the

condition that the minimum balance in the account is maintained, holders will be eligible

for a free ATM card as well as 100 personalised cheque leaves a year (in metro and

urban areas) and 60 (in semi-rural and rural areas). Account holders will also enjoy

waiving off of loan processing amounts for personal/consumer/education loans. Holders

will enjoy no handling charges for cash deposits up to Rs. 3, 00, 000.

Repo rates

Repo rate is the rate at which the central bank of a country (Reserve Bank of India in

case of India) lends money to commercial banks in the event of any shortfall of funds.

Repo rate is used by monetary authorities to control inflation.

Current MCLR rate of PNB ranges from 7.05% to 7.85% varying by reset frequency of

the loan. PNB revises MCLR rates on a monthly basis and benchmarks its interest rates

for home loans and other loans to MCLR rates of different tenors.

Loan and advance rates

A loan is an amount lent by the lender to the borrower for a definite purpose for a

particular time period. ​So a loan is one kind of debt provided by a bank to fulfil the long

term requirement of a borrower

An advance rate is the percentage amount of the value of the collateral that a lender is

willing to extend as a loan. The risk to a lender is minimized in a default by using an

advance rate, particularly when accepting collateral that fluctuates in value.

Difference between loan and advance rates

Basic   Loan  Advances 

Meaning  When  a  fund  is  borrowed  by  When  a  fund  is  provided  by 

an  entity  or  business  the  bank  to  a  business 

corporation  or  an  individual  corporation  or  an  entity  for  a 

from  another  entity,  specific  purpose  to  be 

repayable  after  a  specific  repayable  after  a  short 

period  carrying  interest  rate  duration  is  known  as 

is known as loans.  advances. 

Nature  A loan by nature is a debt.  Advances  are  by  nature  a 

credit facility. 

Time  Loans  are  generally  for  a  Advances  are  for  short  term, 

duration  long term.  maximum for one year only. 

Collateral  A  loan  may  be  secured  Advances  are  facilitated only 

security  against  collateral  security  on  against  primary  security  or 

not.  any type of guarantee. 

Legal  There  are  legal  formalities  There  are  low  legal 

formalities  while granting a loan.  formalities  as  compared  to 

the loan. 

Example  Auto  loan,  Personal  loan,  Short  term  loan,  Overdraft 

Education  loan,  Home  loan  facility,  Cash  credit,  Bill 

etc.  purchased etc. 

 
Examples- 9​ .55% to 12.05% PNB Personal Loan Interest Rate: 9.55% to 12.05%
Processing Fee payable to PNB: Upto Rs. 2,000. Current offer for processing fee is

1.8% + taxes.

Achievements

Forbes global 2000 ranking: punjab national bank was ranked 1243 in the forbes

global 2000.

The bank has been ranked 248th biggest bank in the world by bankers almanac,

London.

Punjab national bank is one of the big four banks of india, along with ICICI

bank,state bank of india, bank of boroda and HDFC bank- its main competitor.

Policies of PNB

1.​ Information/Disclosures in terms of Regulation 46 SEBI (Listing Obligations and Disclosure

Requirement) Regulations, 2015.

2. Policy to determine materiality of events to be reported to stock exchanges in terms of SEBI

(LODR) Regulations 2015

3. Code of Practices and Procedures for fair disclosures

4. Policy for Prevention of Insider Trading

5. Policy on Related Party Transactions

6. Dividend Distribution Policy

7. Details of Trading window & its closure during Financial year

8. Policy for Appointment of Statutory Central Auditors and Statutory Branch Auditors for the year
2019-20
● 9. Salient features of policies of Recovery Agencies, Resolution Agents, Supporting & Detective
Agencies

● 10. List Of Recovery Agencies, Resolution Agents, Supporting Agencies & Detective Agencies

● 11. List Of Enforcement Agencies & Detective Agencies of OBC

● 12. List Of Enforcement Agencies & Detective Agencies of UBI

● 13. List of Approved Valuers PNB

● 14. List of Approved Valuers OBC

● 15. List of Approved Valuers UBI

● 16. Bank`s code of Commitment

● 17. Wilful Defaulter

Conclusion

Punjab National Bank is an Indian financial services company based in New

Delhi, India with about 5,000 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. The bank's total assets for financial year 2013 was about

US$6.6 billion.One of the corporate vision of pnb is to serve their customers in

the most efficient manner and to gain customer satisfaction.

 Reference
https://www.deal4loans.com/loans/articles/best-indian-bank-in-overall-services/

https://www.slideshare.net/COOLsingla1/punjab-national-bank-72278834?next_slideshow=1

​https://www.myloancare.in/fixed-deposit/fd-interest-rates/pnb

https://www.slideshare.net/UmeyshKy/punjab-national-bank

https://www.bankexamstoday.com/2017/09/difference-between-loan-and-advanc
es.html

https://www.pnbindia.in/Regulatory.html