A PROJECT REPORT

ON
“A STUDY ON ANALYSIS OF FINANCIAL PERFORMANCE
OF PUNJAB NATIONAL BANK”
AT
KAMGAON

SUBMITTED BY
SHRIYA MUKUND SHROTRI
UNDER THE GUIDANCE OF
Dr. MARCELINE FERNANDES
SUBMITTED TO
SAVITRIBAI PHULE UNIVERSITY
IN PARTIAL FULFILMENT OF THE REQUIREMENT FOR THE
AWARD OF THE DEGREE IN
BACHELOR OF COMMERCE (B.COM)
THROUGH

INDIRA COLLEGE OF COMMERCE AND SCIENCE, PUNE

 DEPARTMENT OF COMMERCE
POST GRADUATE DIPLOMA BANKING AND FINANCE
INSURANCE
CERTIFICATE

TO WHOMSOEVER IT MAY CONCERN

This is to certify that Shriya Mukund Shrotri has successfully completed the
project work entitled,

“A Study On Analysis of Financial Performance of Punjab National Bank “

In partial fulfilment in the award of the degree in B.Com which is laid down by the
Savitribai Phule Pune University for the Academic Year 2021-22.

Date:

Project Guide Principal

Indira College of Commerce & Science, Pune

Internal Examiner External Examiner

 DECLARATION

I hereby declare that the project report entitled “A STUDY OF ANALYASIS FINANCIAL
PERFORMANCE – a study with special reference to PUNJAB NATIONAL BANK,
KAMGAON submitted for the degree of Master of Commerce, is my original work and it
has not previously formed for the basis for the award of degree. This work is carried out by
me in the year 2022 for the degree in Masters of Commerce under the guidance of Dr.
Marceline Fernandes of Indira College of Commerce & Science, Pune.

Date: Signature

Place: Pune

(Shriya Shrotri)
 ACKNOWLEDGEMENT

I take this responsibility to express my profound and sincere gratitude INDIRA COLLEGE
OF COMMERCE AND SCIENCE for providing me with the opportunity to explore the
corridors of the corporate world and gather invaluable knowledge and practical experience via
this project.

I take the privilege of offering a deep sense of gratitude and indebtedness to AJESH
SASHIDHARAN (OWNER) TAURUS PRO TOOLING, PUNE for providing their guidance
and inspiration to complete the project report.

I express my sincere gratitude to Dr. MARCELINE FERNANDES who guided me how to

carry on with the project. Her guidance and support have been constant source of knowledge
and motivation for me.

Above all no words can express my gratitude to my friend RAHUL PRAKASH who supported
me through thick and thin difficulties faced by me during the preparation of the project. This
project would not have been completed without his support. I also owe a sense of gratitude to
my faculties.

Last but not the least, I would like to thank all those who directly or indirectly contributed
intellectually and helped me for the preparation of this project report.

Shriya Shrotri
 INDEX
CHAPTER TITLE PAGE
NUMBER NUMBER

EXECUTIVE SUMMARY 1

01 INTRODUCTION 3

1.1 Need of the Study

1.2 Objectives of the Study
1.3 Scope of the Study
1.4 Limitations of the Study
02 INDUSTRIAL PROFILE 11

03 COMPANY PROFILE 14

04 THEORETICAL BACKGROUND 33

4.1 Bank- Meaning, Definition, Types, Elements

4.2 Financial Analysis of Bank

4.3 Analysis of Product and Services

05 RESEARCH METHODOLOGY 53

06 LITERATURE REVIEW 59

07 DATA ANALYSIS AND INTERPRETATION 63

08 FINDINGS 89

09 SUGGESTIONS 91

10 CONCLUSION 93

11 BIBLIOGRAPHY AND WEBLIOGRAPHY 95

12 ANNEXURE 97
 LIST OF TABLES

Table No. Title of the Table Page No.

1 Purchasing cost of Polypropylene Granules for Q1 of 2021 65

and Q1 of 2022

2 Purchasing cost of Polycarbonate Granules for Q1 of 2021 67

and Q1 of 2022

3 Purchasing cost of Nylon/Pom Granules for Q1 of 2021 and 69

Q1 of 2022

4 Purchasing cost of Acrylic Granules for Q1 of 2021 and Q1 71

of 2022

5 Purchasing cost of ABS Granules for Q1 of 2021 and Q1 of 73

2022

6 Purchasing cost of Tool Steel for Q1 of 2021 and Q1 of 75

2022

7 Purchasing cost of Screws and Rivets for Q1 of 2021 and 77

Q1 of 2022

8 Purchasing cost of Coolants and Grease material for Q1 of 79

2021 and Q1 of 2022

9 Purchasing cost of Packing Material for Q1 of 2021 and Q1 81

of 2022

10 Total cost of Transportation of Raw Materials for Q1 of 83

2021 and Q1 of 2022

11 Total cost of Electricity Consumption for Q1 of 2021 and 85

Q1 of 2022

12 Total cost for Wages of Labours for Q1 of 2021 and Q1 of 87

2022

13 Admin Expenses for Q1 of 2021 and Q1 of 2022 98

14 Cost sheet for Q1 of 2021 and Q1 of 2022 100

 CHAPTER 1
INTRODUCTION
Indian banks have adequate capital and sufficiently regulated
under the Reserve Bank of India. The economic scenario of
India is also much better than the other countries. The risk
assessment studies on parameters of market, credit, and
liquidity also indicate similar stability and resilience in the
Indian banking sector to survive through the global recession.
The industry off late has adopted innovative models for
banking such as payment and micro finance models of
banking. The financial year 2015–16 saw 10 small finance and
11 payment banks being principally approved for functioning
by RBI. Such novel steps being rolled by the Central Bank of
India will be instrumental to give a new shape to the Indian
banking industry in the long run. A financial institution is an
establishment that conducts financial transactions such as
investments, loans and deposits. Almost everyone deals with
financial institutions on a regular basis. Everything from
depositing money to taking out loans and exchanging
currencies must be done through financial institutions. Here is
an overview of some of the major categories of financial
institutions and their roles in the financial system. Punjab
National Bank (PNB), India’s first Swadeshi Bank,
commenced its operations on April 12, 1895, from Lahore,
with an authorized capital of Rs. 2 lac and working capital
of Rs. 20,000. The Bank was established by the spirit of
nationalism and was the first bank purely managed by
Indians with Indian Capital. During the long history of the
Bank, 9 banks have been merged/ amalgamated with PNB.
A bank is a financial institution that provides banking and
other financial services to their customers. A bank is
generally.
understood as an institution which provides fundamental.
banking services such as accepting deposits and providing.
loans. There are also nonbanking institutions that provide
certain banking services without meeting the legal definition
of
a bank. Banks are a subset of the financial services industry.
A
banking system also referred as a system provided by the bank
which offers cash management services for customers,
reporting the transactions of their accounts and portfolios,
throughout the day. The banking system in India should not
only be hassle free but it should be able to meet the new
challenges posed by the technology and any other external
and
internal factors. For the past three decades, India’s banking
system has several outstanding achievements to its credit. The
Banks are the main participants of the financial system in
India. The Banking sector offers several facilities and
opportunities to their customers. All the banks safeguards the
money and valuables and provide loans, credit, and payment
services, such as checking accounts, money orders, and
cashier’s cheques. The banks also offer investment and
insurance products. As a variety of models for cooperation
and
integration among finance industries have emerged, some of
the traditional distinctions between banks, insurance
companies, and securities firms have diminished. In spite of
these changes, banks continue to maintain and perform their
primary role is accepting deposits and lending funds from
these deposits.
 CHAPTER 2
ABOUT THE PUNJAB NATIONAL BANK
 PUNJAB NATIONAL BANK
Company History
Punjab National Bank had its roots in Lahore when Lala Lajpat
Rai, Babu Kali Prasoon Roy, and Sardar Dayal Singh inspired
its foundation in 1894. The Indian Companies Act of 1882 in
its Act VI enshrined the bank with a capital amount of 2 Lac.
Withstanding the pressures of partition and financial crisis,
the bank did away with 40% of its deposits by closing one-
third of its offices which were in West Pakistan. Delhi became
the new location for registered office by shifting it from
Lahore in June 1947. New partners as Bharat Bank and Indo
Commercial bank were added by PNB to establish a hold in
the market of new India. In 1969, nationalization by the GoI
covered 13 other banks along with PNB. The growth story of
PNB comprises of mergers and takeovers. The timeline has
witnessed seven private banks being absorbed and the only
merger of a nationalized bank, New Bank, in India. PNB has
also funded regional rural banks (RRBs) with the aim to
reinforce credit delivery mechanism in rural India. In 2003,
the Nedungadi Bank Ltd (e-NBL) of Kerala was merged with
PNB. The motive was satisfied the capital needs as per Basel
II norms. Follow-on Public Offers (FPOs) were also rolled out
in 2005 to bring down the stake held by GoI under 6%.
Company Profile and Business Performance
PNB has its headquarters in New Delhi. Its offices count
around 5,400 making it second biggest nationalized bank
network. Bank provides an array of services to both its
categories of clients, retail and corporate. Its products
include credit cards, insurance, private banking, consumer
banking, wealth and equity management. Simultaneously, it
has met its social responsibilities along with becoming a tech-
savvy organization. Shri Sunil Mehta is currently serving as
the MD and CEO of the bank. The branches’ number near
seven thousand, and the ATMs count around ten thousand. It
ranks high in most of the financial parameters as operating
profit, business across globe, and deposits. Its business has
been growing at an annual rate of 5%, and the liabilities of
global deposits are on the rise with a YoY growth of 7%. The
saving deposits grow annually by 14%. The assets for PNB,
net advances, grow by around 3% annually. Retail credit has
witnessed a growth of 20%, agricultural credits by 10%, and
MSME advances by 8%. The operating and net profits have
also risen. PNB has one of the highest domestic net interest
margins and a CRA ratio of around 12%. The cost of deposits
has fallen slightly.
Digital Banking
The bank has also launched many innovative digital products
and services. An app to spot ATMs and record complaints has
been launched as “PNB ATM Assist.” Other digital solutions
as Mobi Ease and Sleep Ease have also been made available
for touch banking and Internet and mobile banking,
respectively. Customers can also get an instant PIN by using
Green PIN app. SMS banking has been rolled out in ten
widely spoken local languages like Punjabi, Urdu, Kannada,
and others. Customers have been provided the facility to
register for mobile banking with ease across its network of
ATMs. Online facilities for opening PF and RD accounts
together with securing a locker across the country have been
made available at PNB Web site. “Book your Locker
Anywhere in India” has made it easy for customers to locate
a vacant locker in any city. PNB has also made its brand
presence on social media with Twitter and LinkedIn accounts.

Financial Inclusion
PNB was among the first movers in rolling out Pradhan
Mantri Jan Dhan Yojana (PMJDY) and mobilizing deposits.
More than a 100 lakh Rupay debit cards have been issued by
the bank, and around 135 lakh accounts were opened to
mobilize nearly two thousand crores. The “Vitiya Jan Chetna
Abhiyan” by PNB was an added attempt to impart financial
awareness across the population. Micro-ATMs were first
deployed by PNB to enable financial operations across
backward locations.

Corporate Social Responsibility

PNB opened “Sukanya Samriddhi” accounts for women to
deposit safely. Other schemes Vanita financing, Mahila
Kaushal Vikas Yojana, Power Ride and Savings are an effort
toward women empowerment. “Akshaya” branches of PNB
are wholly managed by and cater to women only.

Awards and Recognitions

PNB has collected many awards and accolades across
domains. The major ones include “Golden Peacock National
Training Award 2016”, “Best Bank for PMJDY (Large Bank),”
“The Brand Trust Report 2016,” “RBI Rajbhasha Award,”
“Agriculture Leadership Award 2015,” “Most Respected
Public Sector Bank,” and “Banking Excellence Award 2015.” It
ranks globally in the top 200 banks and first in the
nationalized Indian banks. It is also the most trusted brand
among banks, as per the Trust Research Advisory.

Competitor and Industry Analysis

Punjab National Bank Direct Competitors
There are many banks operating in India which belong to
different categories such as public sector banks, regional
rural banks, foreign banks, private sector banks, and
cooperative banks. Currently, there are 27 public sector
banks; out of it 19 are nationalized. There are many foreign
banks which are having its branches in India with huge
investments. All these are the direct competitors of Punjab
National Bank.

Banking Industry Analysis

There are many factors affecting the banking industry in
India. There is a need to do PESTEL analysis of the industry to
understand a better idea about the industry.

Factors Affecting the Industry

1 Government interaction in the industry
2 Labour law and tax policy
3 Environmental law
4 Trade restrictions
5 Tariffs and political stability
6 Regulation of government
7 Budget and budget measures
8 Foreign direct investment limits
 CHAPTER 3
AREA OF WORK
Period of Study:
This study undertakes the comparative financial performance
analysis of Punjab national bank for the period of 4 years i.e.,
from 2014 to 2018.

Sources of data

The data for this study are taken from the annual reports of
Punjab National Bank. The other particulars were obtained by
collecting the data in the official website of PNB. Since the
information is based on the annual reports published by the
bank, the study is said to be based on the secondary data.

Tool of study

Ratio analysis technique has been used in the course of

analysis. The use of these tools at different places has been
made in the light of nature and suitability of data available
and
requirement of analysis.

Ratio analysis

Ratio Analysis is a form of Financial Statement Analysis that

is used to obtain a quick indication of a firm's financial
performance in several key areas. The ratios are categorized
as
Short-term Solvency Ratios, Debt Management Ratios, Asset
Management Ratios, Profitability Ratios, and Market Value
Ratios. Ratio Analysis as a tool possesses several important
features. The data, which are provided by financial
statements,
are readily available. The computation of ratios facilitates the
comparison of firms which differ in size. Ratios can be used
to
compare a firm's financial performance with industry
averages.
In addition, ratios can be used in a form of trend analysis to
identify areas where performance has improved or
deteriorated.
over time. Because Ratio Analysis is based upon accounting
information, its effectiveness is limited by the distortions.
which arise in financial statements due to such things as
Historical Cost Accounting and inflation. Therefore, Ratio
Analysis should only be used as a first step in financial.
analysis, to obtain a quick indication of a firm's performance.
and to identify areas which need to be investigated further.

ANALYSIS AND INTERPRETATION

INTRODUCTION:

Financial statement analysis (of financial analysis) is the

process.
of reviewing and analysing a company's financial statements
to
make better economic decisions. These statements include.
the income statement, balance sheet, statement of cash flows,
and a statement of changes in equity. Financial statement
analysis is a method or process involving specific techniques.
for evaluating risks, performance, financial health, and future
prospects of an organization.
MEANING OF RATIO:

A ratio is a relationship between two numbers indicating how.

many times, the first number contains the second. It is a
mathematical yardstick that measures the relationship between
two figures, which are related to each other and mutually.
interdependent. Ratio is expressed by dividing one figure by
another related figure. Thus, ratio is an expression relating
one.
number to another. It is simply the quotient of two numbers. It
can be expressed as a fraction or as a decimal or as a pure
ratio.
or in absolute figures as “so many times”. Thus, accounting
ratio is an expression relating two figures or accounts or two.
set of account heads or groups contained in the financial
statements.

MEANING OF RATIO ANALYSIS:

Ratio analysis is the process of examining and comparing.

financial information by calculating meaningful financial.
statement figure percentages instead of comparing line items.
from each financial statement. Managers and investors use a
number of different tools and comparisons to tell whether a
company is doing well and whether it is worth investing in.
The most common ways people analysis a company’s
performance is horizontal analysis, vertical analysis, and ratio
analysis. Horizontal and vertical analysis compare a
company’s performance over time and to a base or set of
standard performance numbers. Ratio analysis is much.
different. Ratio analysis compares relationships between
financial statement accounts. This means that one income.
Statement or balance sheet account is being compared to
another. These relationships between financial statement
accounts will not only give a manager or investor an idea of
the how healthy the business is on a whole, it will also give
them keen insights into business operations.
.
CURRENT RATIO

The current ratio is a liquidity ratio that measures whether or

not a firm has enough resources to meet its short-term
obligations. It compares a firm's current assets to its current
liabilities. The current ratio is an indication of a firm's
liquidity. Large current ratios are not always a good sign for
investors. If the company's current ratio is too high it may
indicate that the company is not efficiently using its current
assets or its short-term financing facilities.
Current Asset= Cash and Bank, loans and Advances
Current Ratio= Current Asset / Current Liability

INTERPRETATION:
The current ratio is in decrease.
This denotes that the current liability of the bank has
increased.
The highest ratio is 33 in the year 2016-2017.
The lowest ratio is 26 in the year 2014-2015 and 2017-2018.
 CHAPTER 4

WHAT YOU LEARNED

TYPES OF BANKS

Reserve Bank of India

The Reserve Bank of India (RBI) is India's central banking
institution, which controls the issuance and supply of the
Indian rupee. Until the Monetary Policy Committee was
established in 2016, it also controlled monetary policy in
India. It commenced its operations on 1 April 1935 in
accordance with the Reserve Bank of India Act, 1934.[7] The
original share capital was divided into shares of 100 each
fully paid, which were initially owned entirely by private
shareholders. Following India's independence on 15 August
1947, the RBI was nationalised on 1 January 1949.[9] The RBI
plays an important part in the Development Strategy of the
Government of India. It is a member bank of the Asian
Clearing Union. The general superintendence and direction of
the RBI is entrusted with the 21-member central board of
directors: the governor; four deputy governors; two finance
ministry representatives (usually the Economic Affairs
Secretary and the Financial Services Secretary); ten
government-nominated directors to represent important
elements of India's economy; and four directors to represent
local boards headquartered at Mumbai, Kolkata, Chennai and
the capital New Delhi. Each of these local boards consists of
five members who represent regional interests, the interests
of co-operative and indigenous banks.
Scheduled Bank:
Scheduled banks are covered under the 2nd Schedule of the
Reserve Bank of India Act, 1934. A bank that has a paid-up
capital of Rs. 5 Lakhs and above qualifies for the schedule
bank category. These banks are eligible to take loans from
RBI at bank rate.
Commercial bank:
Commercial Banks are regulated under the Banking
Regulation Act, 1949 and their business model is designed to
make profit. Their primary function is to accept deposits and
grant loans to the general public, corporate and government.
Commercial banks can be divided into
Public sector banks:
These are the nationalized banks and account for more than
75 per cent of the total banking business in the country.
Majority of stakes in these banks are held by the
government. In terms of volume, SBI is the largest public
sector bank in India and after its merger with its 5 associate
banks (as on 1st April 2017) it has got a position among the
top 50 banks of the world. Private sector banks: These
include banks in which major stake or equity is held by
private shareholders. All the banking rules and regulations
laid down by the RBI will be applicable on private sector
banks as well. Given below is the list of private-sector banks
in India.
Foreign banks:
A foreign bank is one that has its headquarters in a foreign
country but operates in India as a private entity. These banks
are under the obligation to follow the regulations of its home
country as well as the country in which they are operating.
Citi Bank, Standard Chartered Bank and HSBC are some
leading foreign banks in India. Regional rural banks: A foreign
bank is one that has its headquarters in a foreign country but
operates in India as a private entity. These banks are under
the obligation to follow the regulations of its home country
as well as the country in which they are operating. City Bank,
Standard Chartered Bank and HSBC are some leading foreign
banks in India.
Non-Scheduled banks:
As per the Second Schedule of the Banking Regulation Act of
1965 a bank must satisfy the following conditions, to get fully
authorized to run banking business in India.
Cooperative bank: Cooperative banks are owned by their
customers and follow the cooperative principle of one
person, one vote. Co-operative banks are often regulated
under both banking and cooperative legislation. They provide
services such as savings and loans to non-members as well as
to members, and some participate in the wholesale markets
for bonds, money and even equities. Many cooperative banks
are traded on public stock markets, with the result that they
are partly owned by non-members. Member control is
diluted by these outside stakes, so they may be regarded as
semi-cooperative.
Types of Cooperative banks:
a) Primary Credit Societies- These institutions are formed at
village level or town level. The operations of such banks are
limited to a very small area.
(b) District Central Cooperative Banks- These banks operate
at the district level. They act as a link between primary credit
societies and state cooperative banks.
(c) State Cooperative Banks- State Cooperative Banks are
biggest forms of cooperative banks. They operate at the state
level. Some of State Cooperative banks operate in multi-
States.
Banking services:
Banking services are regarded as one of the important
services. Banks provide financial services to the customers.
Due to the rising competition and liberalization the banking
industry has become the buyer’s market. Banks need to
create and develop the services which can satisfy the
consumer needs. Customer satisfaction is a very important
construct in today’s market, and it is directly influenced by
service quality as per earliest studies. Therefore, the present
research work has been carried out to analyse the rural
customers’ attitude towards public sector banks. Banking in
India is so convenient and hassle free that one (individual,
groups or whatever the case may be) can easily process
transactions as and when required. The most common
services offered by banks in India are as follows 44.
Bank accounts: It is the most common service of the banking
sector. An individual can open a bank account which can be
either savings, current or term deposits.
Loans: You can approach all banks for different kinds of
loans. It can be a home loan, car loan, personal loan, loan
against shares and educational loans.
Money Transfer: Banks can transfer money from one corner
of the globe to the other by issuing demand drafts, money
orders or cheques.
Credit and debit cards: Most banks offer credit cards to their
customers which can be used to purchase products and
services or borrow money.
Lockers: Most banks have safe deposit lockers which can be
used by the customers for storing valuables, like important
documents or jewellery.
 OBJECTIVES OF THE STUDY
1. To analyse the financial performance of the bank.
2. To examine the profitability position of the bank.
3. To offer findings and suggestions to enhance the financial
performance of the bank
Willingness to learn

The prime benefit of a banking internship is the opportunity

to learn from senior professionals about the different
domains in banking and the work culture associated with
each. They can learn new concepts, use the latest
technologies and tools, understand statutory guidelines,
assess risks and operate banking applications that they may
not be familiar with. A banking intern's interest in listening,
observing, and learning from their mistakes can help them
gain knowledge and expertise in their specific domain of
work. A banking intern's interest in listening, observing, and
learning from their mistakes can help them gain knowledge.
 SUGESSTIONS
The bank’s current and liquid asset is sufficient to
meet the current liabilities of the bank which
shows the sound liquid position. This must be
maintained for the following years. The fixed
asset ratio has decreased. The bank must take
necessary steps to maintain proper ratio. The
liquidity position of the bank is satisfactory.
Further the bank can increase its liquidity position
by maintaining proper cash in hand and cash in
bank. The operating profit of the bank has
decreased. In order to increase the net profit, the
bank must reduce the expenses. Proper control
over various expenses may increase the net profit
of the bank. The statutory reserve and capital
reserve is not satisfactory. The bank must
maintain proper reserve for the profitability of the
bank. The bank must maintain proper assets to
have a good long term financial position.
 CONCLUSIONS
Analysis and interpretation of financial statement
is an important tool in assessing the banks
performance. It reveals the strength and
weakness of the organization. According to the
study I came to know from the financial
statement that the financial position of the bank
is satisfactory. The bank must take necessary
steps to reduce the non-performing assets of the
bank and to increase the net profit of the bank.
This project mainly focused on the study based on
different types of financial statements like
Balance sheet, Profit and loss account. From the
balance sheet the liquidity position of the bank is
found to be satisfactory. There is an increase in
share capital of the bank every year. This indicates
that the bank has good reputation. From this
project I got to know about banking services. It
also helped enhance my knowledge in banking
sector.
 REFERENCE WEBSITES
[1]. https://www.academicjournals.org
[2]. https://www.ijbmi.org
[3]. https://www.google.com
[4]. www.academicfoundation.com.
[5]. Nayar, N. (1992), “Profitability and Profit Planning in
Commercial banks”, A Doctoral Thesis submitted to Punjabi
University, Patiala
[6]. Vyas, R. (1992), “Profitability of Commercial Banks in
India: A Comparative Study of Public Sector Banks, Private
Sector Banks and Foreign Sector Banks Operating in India”, A
Ph.D. Thesis submitted to Institute of Management Studies,
Devi Ahilya Vishwavidyalaya, University of Indore, M.P.
Available at www.academicfoundation.com.
[7]. Satyamurty.B (1994), ‘A study of Interest spread in
Commercial Banks in India’, Working Paper, National Institute
of Banks Management (NIBM), Pune. [8]. Murty.P.V.R.
(1996), “Cost and Profitability of Public Sector Banks”, IBA
Bulletin, Indian Banks Association, Mumbai.