PROJECT REPORT ON

FOREIGN EXCHANGE OPERATIONS

IN
PUNJAB NATIONAL BANK

PRESENTED BY :
OJASWITA
MBA-IB
III-SEM
BVIMR
FINANCIAL SYSTEM
 An institutional framework existing in a
country to enable financial transactions
 Three main parts
 Financial assets (loans, deposits, bonds,
equities, etc.)
 Financial institutions (banks, mutual funds,
insurance companies, etc.)
 Financial markets (money market, capital
market, forex market, etc.)
 Regulation is another aspect of the
financial system (RBI, SEBI, IRDA, FMC)
INDIAN BANKING SYSTEM

 Central Bank (Reserve Bank of India)

 Commercial banks
 Co-operative banks
Banks can be classified as:
 Scheduled (Second Schedule of RBI Act, 1934) -
194
 Non-Scheduled - 4
 Scheduled banks can be classified as:
 Public Sector Banks (29)
 Private Sector Banks (Old and New) (31)
 Foreign Banks (38)
 Regional Rural Banks (96)
 INDUSTRY PROFILE
Punjab National Bank

ORGANIZATIONAL
STRUCTURE
Type Public
Industry Banking, Financial services, Insurance
Founded Lahore (1895)
Headquarter New Delhi, India

Products Investment Banking, Consumer Banking,

Commercial Banking, Retail Banking,
Private Banking, Asset Management, Pensions
, Mortgage loans, Credit Cards, Life Insurance
Total Business Rs.4,82,159 crore (2010)

Employees 580,300

Website PNBIndia.com
 PRODUCTS AND SERVICES
CENTRALISED BANKING   LOANS
SOLUTION (CBS) CAR LOAN/2 WHEELER LOAN
NRI’S & TOURISTS LOAN AGAINST JEWELLERY
ONLINE TAX PAYMENT TRADERS LOAN
CASH MANAGEMENT SERVICE
HOUSING LOAN
(CMS)
PERSONAL LOANS
MUTUAL FUNDS & INSURANCE
CORPORATE LOANS
NRI SERVICES
EDUCATIONAL LOAN
FOREIGN EXCHANGE
PNB GRAMIN CHIKITSAK
  e-MONEYINDIA
LOAN TO PENSIONERS
DEPOSITORY SERVICE
LOANS TO WOMEN
LOCKERS
DEPOSITS
CUSTOMER CARE FACILITY
PNB MET LIFE
PNB GOLD COIN
PNB VIDYARTHI ACCOUNT
ELECTRONIC CLEARING TOTAL FREEDOM SALARY
SERVICE (ECS) & ELECTRONIC ACCOUNT
FUNDS TRANSFER (EFT)
PNB TAX SAVER
WEALTH MANAGEMENT ONLINE RAILWAY
SERVICE RESERVATION/AIR TICKET
ONLINE BILL PAYMENT BOOKING
SWOT ANALYSIS
STRENGTH WEAKNESS
•Wide network •Casual behaviour
•Large number of customers •Slow decision making due
•Fast adaptability to to large hierarchy
technology •Corruption
•Brand image

OPPORTUNITIES THREAT
•Home to home banking •Stiff competition from SBI
services and other private players.
•Diversification towards
other fields
•Globalization
RESEARCH METHODOLOGY
OBJECTIVE
The objective was to analyze the Trade Finance services
availed by exporters who are currently dealing with the bank.
The study was conducted through the questionnaire filled by
the exporters. The information was extracted with regard to
the profile of the exporters, the products and services availed
from the bank, the improvements required to be initiated in
the operations of the bank in order to make it more efficient
and successful

 Sampling Unit: Exporters of PNB

 Sample size: 25
 Sample method: Random sampling
 Sample Place: PNB(INTT. Business Branch)
 Contact method: Interviews
 Method of data collection: Primary and Secondary
CONCEPTUAL DISCUSSION

FOREX OPERATIONS
International
transaction in cash
requires two distinct
purchases
 Purchase of foreign

currency
 Purchase of

good/service with
the Foreign
Currency
FOREX OPERATIONS
 Organizational setting within which
individuals, governments and banks
buy and sell good and services
internationally with the use of foreign
currencies
 Only a small fraction of daily
transactions in foreign exchange
involve trading of currency
 Most foreign exchange transactions
involve transfer of bank deposits
 TYPES OF ACCOUNTS
 N.R.O. –Ordinary Non-Resident Rupee A/C
 N.R.E. –Non–Resident (External) Rupee A/C
 F.C.N.R. –Foreign Currency Non Resident A/C
 R.F.C. –Resident Foreign Currency A/C
 R.F.C(D) -Resident Foreign Currency Domestic
A/C
 E.E.F.C. –Exchange Earners Foreign Currency A/C
 EXPORT FINANCE

This project is an attempt to throw light on the

various sources of export finance available to
exporters, the schemes implemented by ECGC
and EXIM for export promotion and the recent
developments in the form of tie-EXIM tie-ups,
credit policy announced by RBI in Oct 2001 and
TRIMS
LETTER OF CREDIT

“An undertaking by importer’s bank stating that payment

will be made to the exporter if the required documents
are presented to the bank within the validity of the L/C”.

PARTIES INVOLVED IN LETTER OF CREDIT:

 Applicant
 Issuing bank
 Beneficiary
 Advising bank
 Confirming bank
 Negotiating bank
 DATA ANALYSIS
 Maximum amount of annual sales turnover of Exporters lies
between 4-6 Crores
 Market size is the most important feature which an exporter
look for
 Terms of overseas bank is an important basis for selection of
currency for trade
 Maximum problem is faced duing shipping of goods and custom
clearance
 On the basis of Letter of Credit shipment is made for the
order proceeds
 Exporters gets exemption and benefit by Government or DGFT
maximally by duty entitled PassBook
 50% of exporters are satisfied with the services of the bank
 30% of exporters finds credit policy of the bank to be
excellent where as 40% find it satisfactory
 Maximum exporters opt for 90 days to 180 days of credit
period.
 60% of exporters doesn’t have EEFC account with the bank.
 FINDINGS
 There is a huge competition between public sector
banks and private sector banks.
 Some more flexibility is required from bank to
understand the needs and wants of the traders.
 Private sector banks are providing some exemplary
services to the traders, which are not provided by
PNB.
 Traders need some relaxation in the documents
required by the bank.
 There is lack of an active selection of profitability
cluster, un-exploited cross-sell opportunity
 Traders must be encouraged to export good to various
parts of the world this reduces the Balance of Trade
difference.
 There are many facilities given to the traders which
encourage more traders to trade with other countries
CONCLUSIONS
The project entitled “A STUDY TO UNDERSTAND THE
FOREIGN EXCHANGE OPERATIONS AT PNB” has helped me
study about services and products offered to Exporters.
Since the opening up of the banking sector, private banks
are in the fray each one trying to cover more market share
than the other.
Yet, PNB is far behind SBI. PNB must also be alert what
with Private Banks (ICICI, HDFC) breathing down its neck.
I am sure the bank will find my findings relevant and I
sincerely hope it uses my suggestions enlisted, which I
hope will take them miles ahead of competition.
In short, I would like to say that the very act of the
concerned management at PNB in giving me the job of
critically examining Foreign Exchange Operation of the
company is a step in their continual mission of making all
round improvements as a means of progress.
I am sure the bank has a very bright future to look forward
to and will be a trailblazer in it’s own right.
 SUGGESTIONS & RECOMMENDATIONS
 With regard to banking products and services, consumers
respond at different rates, depending on the consumer’s
characteristics. Hence PNB should try to bring their new
product and services to the attention of potential early
adopters.
 Due to the intense competition PNB should adopt better
strategies to attract more customers.
 Greater focus should be given to return on investment ,
company reputation and premium outflow.
 PNB should adopt effective promotion.
 PNB should try to improve upon the feedback of customers.
 As there is intense competition, PNB should work hard to
maintain its position and offer better service and products
to consumers.
 The bank should try to increase the Brand image.
 PNB should employ the strategies to convert the want in to
need which will enrich their business.