1 TRAINING REPORT ON CURRENT ACCOUNT ANALYSIS IN PUNJAB NATIONAL BANK Submitted to MAHARSHI DAYANAND UNIVERSITY,ROHTAK In partial fulfillment of the requirement For the award of the degree of MASTER OF BUSINESS ADMINISTRATION (INDUSTRY INTEGRATED) (II Semester) Submitted by Name: Sukrit Goel Regn. No. Roll No. Tecnia Institute of Applied studies (ELC CODE:) BD-1 Pitam Pura New Delhi :110034 JULY 2011
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1
TRAINING REPORT
ON CURRENT ACCOUNT ANALYSIS IN
PUNJAB NATIONAL BANK
Submitted to
MAHARSHI DAYANAND UNIVERSITY,ROHTAK
In partial fulfillment of the requirement For the award of the degree of
MASTER OF BUSINESS ADMINISTRATION (INDUSTRY INTEGRATED)
(II Semester)
Submitted by
Name: Sukrit Goel Regn. No. Roll No.
Tecnia Institute of Applied studies (ELC CODE:)
BD-1 Pitam Pura New Delhi :110034
JULY 2011
2
CERTIFICATE This is to certify that Ms.Sukrit Goel , a student of the
Maharshi Dayanand University, Rohtak, has prepared his Training Report entitled
“Current Account Analysis in Punjab National Bank” at Punjab National Bank ,under
my guidance. He has fulfilled all requirement leading to award of the degree of MBA
(Industry Integrated). This report is the record of bonafide training undertaken by him
and no part of it has been submitted to any other university or Educational Institution for
award of any other degree/diploma/fellowship or similar titles or prizes
I wish him all success in life.
Signature of Faculty Guide NAME : DESIGNATION : OUALIFICATION : Seal of the ELC
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STUDENTS DECLARATION
I hereby declare that the Training Report Conducted at
PUNJAB NATIONAL BANK
Head Office : 7 Bhikaijicama place
New Delhi
Under the Guidance of
Varun Sir
Submitted in Partial fulfillment of the requirements for the
Degree of
MASTER OF BUSINESS ADMINISTRATION
(Industry integrated)
TO
MAHARSHI DAYANAND UNIVERSITY, ROHTAK
Is my original work and the same has not been submitted
For the award of any other Degree/diploma/fellowship
Or other similar titles or prizes.
Place: Student’s Signature
Date: Name: Sukrit Goel
Regn. No.:
Roll No.
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ACKNOWLEDGEMENTS
Note to students:
Acknowledgements to be mentioned to the Head of the Extended Learning Centre,
Faculty guide, NIAM‟s Training Officer in charge. Manager in charge, other staff
member, colleagues and friends for their encouragement, support, guidance, and
assistance for undergoing successful management training and preparing the Training
Report.
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CONTENTS
CONTENTS Page No
Chapter 1 : INTRODUCTION 1
1.1. General Introduction about the sector
1.2. Industry Profile
a) Origin and development of the industry
b) Growth and present status of the industry
c) Future of the industry
Chapter 2 : PROFILE OF THE ORGANISATION
2.1 Origin of the Organisation
2.2 Growth and development of the Organisation
2.3 Present status of the Organisation
2.4 Functional Departments of the Organisation
2.5 Organisation structure and Organisation
2.6 Product and service profile of the Organisation
2.7 Market profile of the Organisation
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Chapter 3 : DISCUSSION ON TRAINING
3.1. Student‟s work profile, tools and techniques used
3.2. Key learning‟s
Chapter 4 : STUDY OF SELECTED RESEARCH PROBLEM
4.1 Statement of research problem
4.2 Statement of research objectives
4.3 Research design and methodoly
Chapter 5 : ANALYSIS
5.1 Analysis of data
5.2 Summary of finding
Chapter6 : SUMMARY AND CONCLUSION
6.1 Summary of learning Experience
6.2 Conclusion and Recommendation
APPENDICES
Questionnaire
Account opening form
Awards
BIBLIGRAPHY
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Chapter 1
INTRODUCTION
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1.1 General Introduction about the sector
Service Sector of Indian Economy contributes to around 55 percent of India's GDP
during 2006-07. This sector plays a leading role in the economy of India, and contributes
to around 68.6 percent of the overall average growth in GDP between 2002-03 and 2006-
07.
There has been a 9.4 percent growth in the Indian economy during 2006-07 as against a
rise of 9 percent in the same during 2006-06. During this growth in Indian economy, the
service sector witnessed a rise of 11 percent in the year 2006-07 against the 9.8 percent
growth in 2005-06. The service sectors of Indian economy that have grown faster than
the economy are as follows:
Information Technology (the most leading service sectors in Indian
economy)
IT-enabled services (ITeS)
Telecommunications
Financial Services
Community Services
Hotels and Restaurants
There has been a 13 percent hike in the service sectors of trade, hotels, transport and
communication in India's economy as compared to the 10.4 percent rise in the previous
year. The financial services that comprise of banks, real estate, insurance, and business
services witnessed a rise of 11.1 percent during 2006-07 against the 10.9 percent growth
in the previous year. Service sectors including community, social, and personal services
experienced a growth of 7.8 percent during 2006-07 as against 7.7 percent growth in the
previous year.
The service sector of India has also witnessed a remarkable rise in the global market apart
from the Indian market. It has experienced a rise of 2.7 percent in 2006 from that of 2
percent in 2004. The broad-based services in the trade sector has undergone a large-scale
rise. A statistics concerning the growth of India's service sectors are listed below:
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The software services in Indian economy increased by 33 percent which
registered a revenue of USD 31.4 billion
Business services grew by 82.4 percent
Engineering services and products exports grew by 23 percent and earned a
revenue of USD 4.9 billion
Services concerning personal, cultural, and recreational had a growth of 96
percent
Financial services had a rise of 88.5 percent
Travel, transport, and insurance grew by 23 percent
The software services in Indian economy along with the export of products is
growing at a massive pace and thereby witnessed an alarming rise of 35.5 percent
and reached a lump some amount of USD 18 billion. The IteS and BPO sectors grew
by 33.5 percent and earned a revenue of USD 8.4 billion. The service sector of
Indian economy has been the most high-powered sector in India's economy. It has
also been focusing in various investments of late. As Indian economy is looking
forward for more liberalization, sectors like banking are on its way to loom large and
occupy a more significant position in India's economy.
1.2 Industry Profile
A. Origin and development of the industry : Without a sound and effective
banking system in India it cannot have a healthy economy. The banking system of India
should not only be hassle free but it should be able to meet 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 most striking is its
extensive reach. It is no longer confined to only metropolitans or cosmopolitans in India.
In fact, Indian banking system has reached even to the remote corners of the country.
This is one of the main reasons of India's growth process. The government's regular
policy for Indian bank since 1969 has paid rich dividends with the nationalization of 14
major private banks of India. Not long ago, an account holder had to wait for hours at the
bank counters for getting a draft or for withdrawing his own money. Today, he has a
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choice. Gone are days when the most efficient bank transferred money from one branch
to other in two days. Now it is simple as instant messaging or dial a pizza. Money has
become the order of the day. The first bank in India, though conservative, was
established in 1786. From 1786 till today, the journey of Indian Banking System can be
segregated into three distinct phases. They are as mentioned below:
Early phase from 1786 to 1969 of Indian Banks
Nationalization of Indian Banks and up to 1991 prior to Indian banking sector
Reforms.
New phase of Indian Banking System with the advent of Indian Financial &
Banking Sector Reforms after 1991.
Phase:I
The General Bank of India was set up in the year 1786. Next came Bank of Hindustan
and Bengal Bank. The East India Company established Bank of Bengal (1809), Bank of
Bombay (1840) and Bank of Madras (1843) as independent units and called it Presidency
Banks. These three banks were amalgamated in 1920 and Imperial Bank of India was
established which started as private shareholders banks, mostly Europeans shareholders.
In 1865 Allahabad Bank was established and first time exclusively by Indian, Punjab
National Bank Ltd. was set up in 1894 with headquarters at Lahore. Between 1906
and1913, Bank of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian
Bank, and Bank of Mysore were set up. Reserve Bank of India came in 1935.
During the first phase the growth was very slow and banks also experienced periodic
failures between 1913 and 1948. There were approximately 1100 banks, mostly small. To
streamline the functioning and activities of commercial banks, the Government of India
came up with The Banking Companies Act, 1949 which was later changed to Banking
Regulation Act 1949 as per amending Act of 1965 (Act No. 23 of 1965). Reserve Bank of
India was vested with extensive powers for the supervision of banking in India as the
Central banking authority.
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During those days public has lesser confidence in the banks. As an aftermath deposit
mobilization was slow. Abreast of it the savings bank facility provided by the Postal
department was comparatively safer. Moreover, funds were largely given to traders.
Phase:II
In 1955, Government nationalized Imperial Bank of India with extensive banking
facilities on a large scale especially in rural and semi-urban areas. It formed State Bank of
India to act as the principal agent of RBI and to handle banking transactions of the Union
and State Governments all over the country.
Seven banks forming subsidiary of State Bank of India was nationalized in 1960 on 19th
July 1969, major process of nationalization was carried out. It was the effort of the then
Prime Minister of India, Mrs. Indira Gandhi. 14 major commercial banks in the country
were nationalized.
Second phase of nationalization Indian Banking Sector Reform was carried out in 1980
with seven more banks. This step brought 80% of the banking segment in India under
Government ownership.
The following are the steps taken by the Government of India to Regulate Banking
Institutions in the Country:
1949: Enactment of Banking Regulation Act.
1955: Nationalization of State Bank of India.
1959: Nationalization of SBI subsidiaries.
1961: Insurance cover extended to deposits.
1969: Nationalization of 14 major banks.
1971: Creation of credit Guarantee Corporation.
1975: Creation of regional rural banks.
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1980: Nationalization of seven banks with deposits over 200 crores.
After the nationalization of banks, the branches of the public sector bank India raised to
approximately 800% in deposits and advances.
Took a huge jump by 11,000%.
Banking in the sunshine of Government ownership gave the public implicit faith and
immense confidence.
Phase: III
This phase has introduced many more products and facilities in the banking sector in its
reforms measure. In 1991, under the chairmanship of M Narasimham, a committee was
set up by his name, which worked for the liberalization of banking practices.
The country is flooded with foreign banks and their ATM stations. Efforts are being put
to give a satisfactory service to customers. Phone banking and net banking is introduced.
The entire system became more convenient and swift. Time is given more importance
than money.
The financial system of India has shown a great deal of resilience. It is sheltered from any
crisis triggered by any external macroeconomics shock as other East Asian Countries
suffered. This is all due to a flexible exchange rate regime, the foreign reserves are high,
the capital account is not yet fully convertible, and banks and their customers have
limited foreign exchange exposure.
B. Growth and present status of the industry
In the early 1990s, the then Narsima Roa government embarked on a policy of
Liberalization , licensing a small number of private banks. These came to be known as
New Generation tech-savvy banks, and included Global Trust Bank (the first of such new
generation banks to be set up), which later amalgamated with Oriental Bank of
Commerce, AXIS bank(earlier as UTI bank),ICICI bank and HDFC bank. This move,
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along with the rapid growth in the economy of India, revitalized the banking sector in
India, which has seen rapid growth with strong contribution from all the three sectors of
banks, namely, government banks, private banks and foreign banks.
The next stage for the Indian banking has been setup with the proposed relaxation in the
norms for Foreign Direct Investment, where all Foreign Investors in banks may be given
voting rights which could exceed the present cap of 10%,at present it has gone up to 49%
with some restrictions.
The new policy shook the Banking sector in India completely. Bankers, till this time,
were used to the 4-6-4 method (Borrow at 4%;Lend at 6%;Go home at 4) of functioning.
The new wave ushered in a modern outlook and tech-savvy methods of working for
traditional banks. All this led to the retail boom in India. People not just demanded more
from their banks but also received more.
Currently (2007), banking in India is generally fairly mature in terms of supply, product
range and reach-even though reach in rural India still remains a challenge for the private
sector and foreign banks. In terms of quality of assets and capital adequacy, Indian banks
are considered to have clean, strong and transparent balance sheets relative to other banks
in comparable economies in its region. The Reserve Bank of India is an autonomous
body, with minimal pressure from the government. The stated policy of the Bank on the
Indian Rupee is to manage volatility but without any fixed exchange rate-and this has
mostly been true.
With the growth in the Indian economy expected to be strong for quite some time-
especially in its services sector-the demand for banking services, especially retail banking
, mortgages and investment services are expected to be strong. One may also expect
M&As, takeovers, and asset sales.
In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase its stake
in Kotak Mahindra Bank (a private sector bank) to 10%. This is the first time an investor
has been allowed to hold more than 5% in a private sector bank since the RBI announced
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norms in 2005 that any stake exceeding 5% in the private sector banks would need to be
vetted by them.
In recent years critics have charged that the non-government owned banks are too
aggressive in their loan recovery efforts in connection with housing, vehicle and personal
loans. There are press reports that the banks' loan recovery efforts have driven defaulting
borrowers to suicide.
Banks with branches in India as on date
ABN AMARO Bank N.V.
Abu Dhabi Commercial Bank Ltd
American express Bank
Antwerp Diamond Bank
Arab Bangladesh Bank
Bank International Indonesia
Bank of America
Bank of Bahrain & Kuwait
Bank of ceylon
Bank of Nova Soctia
Barclays Bank
BNP Paribas
China Trust Commercial Bank
Citibank
DBS Bank
Dectuche Bank
HSBC (Hongkong & Shanghai Banking Corporation)
JP Morgan Chase Bank
Krung Thai Bank
Marsheq Bank
Oman International Bank
Shinhan Bank
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Sonali Bank
Standard Chartered Bank
State Bank of Mauritius
Banks with Representative Offices in India: SAmerican Banks
The Bank of New York
Wachovia Bank
Australian Banks
Commonwealth Bank
National Bank Australia
Westpac Banking Corporation
Austrian Banks
Raiffeisen Zentral Bank Osterreich
Belgian Banks
Fortis Bank.
K.B.C. Bank N.V.
Canadian Banks
Royal bank of Canada
UAE Banks
Emirates Bank International
French Banks
Credit Industriel et Commercial
Natixis
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German Banks
Bayerische Hypo und Vereinsbank
Commerzbank
Dresdner Bank
DZ Bank AG Deutsche Zentral – Genossenschafts Bank
HSH Nordbank
Landesbank Baden – Wurttemberg
Irish Banks
DEPFA Bank
Italian Banks
Banc Intesa Banca Commerciale Italiana
Banca di Roma
Banca Populare Di Verona E Novara
Banca Popolare di Vicenza
BPU Banca –Banche Popolari Unite
Monte Dei Paschi Di Sienna
Sanpaolo IMI Bank
Uni Credito Italiano
Nepalese Banks
Everest Bank
Portuguese Banks
Caixa Geral de Depositos
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Russian Banks
Vnesheconombank
VTB India
Promsvyazbank
South African Banks
First Rand Bank
South Korean Banks
Wori Bank
Spanish Banks
Banco de Sabadell
Banco Bilbao Vizcaya Argentaria
SriLankan Banks
Hatton National Bank
Swiss Banks
UBS
Zurcher Kantonalbank
Saqib Saeed Qureshi
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C. Future of Banking Sector
Financial sector reforms were initiated as part of overall economic reforms in the country
and wide ranging reforms covering industry, trade, taxation, external sector, banking and
financial markets have been carried out since mid 1991. A decade of economic and
financial sector reforms has strengthened the fundamentals of the Indian economy and
transformed the operating environment for banks and financial institutions in the country.
The sustained and gradual pace of reforms has helped avoid any crisis and has actually
fuelled growth. As pointed out in the RBI Annual Report 2001-02, GDP growth in the 10
years after reforms i.e. 1992-93 to 2001-02 averaged 6.0% against 5.8% recorded during
1980-81 to 1989-90 in the pre-reform period. The most significant achievement of the
financial sector reforms has been the marked improvement in the financial health of
commercial banks in terms of capital adequacy, profitability and asset quality as also
greater attention to risk management. Further, deregulation has opened up new
opportunities for banks to increase revenues by diversifying into investment banking,
insurance, credit cards, depository services, mortgage financing, securitisation, etc. At the
same time, liberalisation has brought greater competition among banks,both domestic and
foreign, as well as competition from mutual funds, NBFCs, post office, etc. Post-WTO,
competition will only get intensified, as large global players emerge on the scene.
Increasing competition is squeezing profitability and forcing banks to work efficiently on
shrinking spreads. A positive fallout of competition is the greater choice available to
consumers ,and the increased level of sophistication and technology in banks. As banks
benchmark themselves against global standards, there has been a marked increase in
disclosures and transparency in bank balance sheets as also greater focus on corporate
governance.
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Chapter 2
PROFILE OF THE ORGANISATION
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2.1 ORIGIN OF THE PNB
Punjab National Bank (PNB) was established in 1895 at Lahore PNB has the distinction
of being the first Indian bank to have been started solely with in capital. In 1969, Punjab
National Bank was nationalized along with 13 other banks.
1895: PNB established in Lahore.
1904: PNB established branches in Karachi and Peshawar.
1939: PNB acquired Bhagwandas Bank
1947: Partition of India and Pakistan at Independence. PNB lost its premises in
Lahore, but continued to operate in Pakistan.
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
office in Pakistan of Indian banks, including PNB‟s head office, which may have
moved to Karachi. PNB also had one or more branches in East Pakistan
(Bangladesh).
1960: PNB amalgamated Indo Commercial Bank (est. 1933) in a rescue.
1969: The Government of India (GOI) nationalized PNB and 13 other top banks.
1976 or 1978: PNB opened a branch in London.
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1986: The Reserve Bank of India required PNB to transfer its London branch to
State Bank of India after the branch was involved in a fraud scandal.
1988: PNB acquired Hindustan Commercial Bank in a rescue.
1993: PNB acquired New Bank of India which the nationalized in 1980.
1998: PNB set up a representative office in Almaty, Kazakhstan.
2003: PNB took over Nedungadi Bank, 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 Combatore
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. Some of PNBs esteemed customers MAHATMA GANDHI, PANDIT
JAWAHARLAL NEHRU, LAL BAHADUR SHASHTRI.
AT PRESENT
One of the top three banks in India.
Ranked among world‟s top 400 banks by “the banker ‟‟ London.
Consistent profit record for the last 114 years of service.
THEIR MISSION
Customer service and product innovation tuned to diverse needs of individuals
and corporate clientele.
Continuous technology up gradation while maintaining human values.
Progressive globalization and achieving international standards.
Efficiency and effectiveness built on ethical practices.
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CORE VALUES
o Customer satisfaction through
Providing quality service efficiently and effectively
Periodic customer service audit
o Success through Teamwork, Integrity and People.
2.2 Growth and Development
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 & debit card business; bullion business; life and non-life insurance
business; Gold coins & 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 in the country (after
SBI and ICICI Bank) and has the 2nd largest network of branches (4668 including 238
extension counters and 3 overseas offices).During the FY 2008-09, with 39% share of
low cost deposits, the bank achieved a net profit of Rs 3,091 crore, maintaining its
number ONE position amongst nationalized banks. Bank has a strong capital base with
capital adequacy ratio as per Basel II at 14.03% with Tier I and Tier II capital ratio at
8.98% and 5.05% respectively as on March‟09. As on March‟09, the Bank has the Gross
and Net NPA ratio of only 1.77% and 0.17% respectively. During the FY 2008-09, its‟
ratio of priority sector credit to adjusted net bank credit at 41.53% & agriculture credit to
adjusted net bank credit at 19.72% was also higher than the respective national goals of
40% & 18%.
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Balance Sheet ------------------- in Rs. Cr. -------------------