PNB

N.L.Dalmia Institute of Management Studies & Research

A Project Report On

16th July 2010

Analysis of banking products of

PNB with its competitors in both

Private and PSU BanksInternet Banking, Mobile Banking, ATMs, Internet Banking, Mobile Banking, ATMs,

Credit and Debit cardsCredit and Debit cards

Under the Guidance of:

Prof K.K. Chowdhary

Submitted By:Submitted By:

Heena MaheshwariHeena Maheshwari

PGDBM- MarketingPGDBM- Marketing

Analysis of banking products of PNB with its competitors in both Private & PSU Banks

Table of Contents

Introduction 5

LITERATURE REVIEW 9

COMPANY PROFILE: PUNJAB NATIONAL BANK 21

PRODUCTS & SERVICES OFFERED 26

PEST ANALYSIS 27

SWOT ANALYSIS 28

METHODOLOGY (DATA COLLECTION METHOD) 31

EXPLORATORY RESEARCH 32

INTERNET BANKING: 35

MOBILE BANKING: 42

ATMS 45

CREDIT CARDS 51

DEBIT CARDS 57

SOME IMPORTANT TERMS TO BE KNOWN: 64

Bibliography 65

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LETTER OF TRANSMITTAL

Date: 16Date: 16thth July 2010 July 2010

As per your directions we have completed our research on As per your directions we have completed our research on “Analysis of banking products like“Analysis of banking products like

internet banking, mobile banking etc with its competitors in both Private and Public sector”internet banking, mobile banking etc with its competitors in both Private and Public sector” .. The The

report is based majorly on data analysis and little survey work. This project was carried on betweenreport is based majorly on data analysis and little survey work. This project was carried on between

33rdrd May and 26 May and 26thth June, 2010 .The complete methodology and conclusions derived on the basis of the June, 2010 .The complete methodology and conclusions derived on the basis of the

findings described in the report.findings described in the report.

We believe you will find the results mentioned in the report to be interesting and certainly useful.We believe you will find the results mentioned in the report to be interesting and certainly useful.

I would also like to thank I would also like to thank Mr. Dilip Keswani (Officer- Business Development)Mr. Dilip Keswani (Officer- Business Development) ,the whole bank ,the whole bank

staff & my institute guide staff & my institute guide Prof K. K. ChowdharyProf K. K. Chowdhary for lending their support and guidance in for lending their support and guidance in

completing this project. completing this project.

From,From,

Heena MaheshwariHeena Maheshwari

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Introduction

Banks are the most significant players in the Indian financial market. They are the biggestBanks are the most significant players in the Indian financial market. They are the biggest

purveyors of credit, and they also attract most of the savings from the population. Dominatedpurveyors of credit, and they also attract most of the savings from the population. Dominated

by public sector, the banking industry has so far acted as an efficient partner in the growthby public sector, the banking industry has so far acted as an efficient partner in the growth

and the development of the country. Driven by the socialist ideologies and the welfare stateand the development of the country. Driven by the socialist ideologies and the welfare state

concept, public sector banks have long been the supporters of agriculture and other priorityconcept, public sector banks have long been the supporters of agriculture and other priority

sectors. They act as crucial channels of the government in its efforts to ensure equitablesectors. They act as crucial channels of the government in its efforts to ensure equitable

economic development.economic development.

The Indian banking can be broadly categorized into nationalized (government owned),The Indian banking can be broadly categorized into nationalized (government owned),

private banks and specialized banking institutions. The Reserve Bank of India acts aprivate banks and specialized banking institutions. The Reserve Bank of India acts a

centralized body monitoring any discrepancies and shortcoming in the system. Since thecentralized body monitoring any discrepancies and shortcoming in the system. Since the

nationalization of banks in 1969, the public sector banks or the nationalized banks havenationalization of banks in 1969, the public sector banks or the nationalized banks have

acquired a place of prominence and has since then seen tremendous progress. The need toacquired a place of prominence and has since then seen tremendous progress. The need to

become highly customer focused has forced the slow-moving public sector banks to adopt abecome highly customer focused has forced the slow-moving public sector banks to adopt a

fast track approach. The unleashing of products and services through the net has galvanizedfast track approach. The unleashing of products and services through the net has galvanized

players at all levels of the banking and financial institutions market grid to look anew at theirplayers at all levels of the banking and financial institutions market grid to look anew at their

existing portfolio offering. Conservative banking practices allowed Indian banks to beexisting portfolio offering. Conservative banking practices allowed Indian banks to be

insulated partially from the Asian currency crisis. Indian banks are now quoting al higherinsulated partially from the Asian currency crisis. Indian banks are now quoting al higher

valuation when compared to banks in other Asian countries (viz. Hong Kong, Singapore,valuation when compared to banks in other Asian countries (viz. Hong Kong, Singapore,

Philippines etc.) that have major problems linked to huge Non Performing Assets (NPAs) andPhilippines etc.) that have major problems linked to huge Non Performing Assets (NPAs) and

payment defaults. Co-operative banks are nimble footed in approach and armed with efficientpayment defaults. Co-operative banks are nimble footed in approach and armed with efficient

branch networks focus primarily on the ‘high revenue’ niche retail segments.branch networks focus primarily on the ‘high revenue’ niche retail segments.

The Indian banking has finally worked up to the competitive dynamics of the ‘new’ IndianThe Indian banking has finally worked up to the competitive dynamics of the ‘new’ Indian

market and is addressing the relevant issues to take on the multifarious challenges ofmarket and is addressing the relevant issues to take on the multifarious challenges of

globalization. Banks that employ IT solutions are perceived to be ‘futuristic’ and proactiveglobalization. Banks that employ IT solutions are perceived to be ‘futuristic’ and proactive

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players capable of meeting the multifarious requirements of the large customer’s base.players capable of meeting the multifarious requirements of the large customer’s base.

Private Banks have been fast on the uptake and are reorienting their strategies using thePrivate Banks have been fast on the uptake and are reorienting their strategies using the

internet as a medium The Internet has emerged as the new and challenging frontier ofinternet as a medium The Internet has emerged as the new and challenging frontier of

marketing with the conventional physical world tenets being just as applicable like in anymarketing with the conventional physical world tenets being just as applicable like in any

other marketing medium.other marketing medium.

The Indian banking has come from a long way from being a sleepy business institution to aThe Indian banking has come from a long way from being a sleepy business institution to a

highly proactive and dynamic entity. This transformation has been largely brought about byhighly proactive and dynamic entity. This transformation has been largely brought about by

the large dose of liberalization and economic reforms that allowed banks to explore newthe large dose of liberalization and economic reforms that allowed banks to explore new

business opportunities rather than generating revenues from conventional streams (i.e.business opportunities rather than generating revenues from conventional streams (i.e.

borrowing and lending). The banking in India is highly fragmented with 30 banking unitsborrowing and lending). The banking in India is highly fragmented with 30 banking units

contributing to almost 50% of deposits and 60% of advances. Indian nationalized bankscontributing to almost 50% of deposits and 60% of advances. Indian nationalized banks

(banks owned by the government) continue to be the major lenders in the economy due to(banks owned by the government) continue to be the major lenders in the economy due to

their sheer size and penetrative networks which assures them high deposit mobilization. Thetheir sheer size and penetrative networks which assures them high deposit mobilization. The

Indian banking can be broadly categorized into nationalized, private banks and specializedIndian banking can be broadly categorized into nationalized, private banks and specialized

banking institutions.banking institutions.

The Reserve Bank of India acts as a centralized body monitoring any discrepancies andThe Reserve Bank of India acts as a centralized body monitoring any discrepancies and

shortcoming in the system. It is the foremost monitoring body in the Indian financial sector.shortcoming in the system. It is the foremost monitoring body in the Indian financial sector.

The nationalized banks (i.e. government-owned banks) continue to dominate the IndianThe nationalized banks (i.e. government-owned banks) continue to dominate the Indian

banking arena. Industry estimates indicate that out of 274 commercial banks operating inbanking arena. Industry estimates indicate that out of 274 commercial banks operating in

India, 223 banks are in the public sector and 51 are in the private sector. The private sectorIndia, 223 banks are in the public sector and 51 are in the private sector. The private sector

bank grid also includes 24 foreign banks that have started their operations here. bank grid also includes 24 foreign banks that have started their operations here.

The liberalize policy of Government of India permitted entry to private sector in the banking,The liberalize policy of Government of India permitted entry to private sector in the banking,

the industry has witnessed the entry of nine new generation private banks. the industry has witnessed the entry of nine new generation private banks. The majorThe major

differentiating parameter that distinguishes these banks from all the other banks in thedifferentiating parameter that distinguishes these banks from all the other banks in the

Indian banking is the level of service that is offered to the customer. Their focus hasIndian banking is the level of service that is offered to the customer. Their focus has

always centered on the customer – understanding his needs, preempting him andalways centered on the customer – understanding his needs, preempting him and

consequently delighting him with various configurations of benefits and a wide portfolio ofconsequently delighting him with various configurations of benefits and a wide portfolio of

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products and services.products and services. These banks have generally been established by promoters of repute These banks have generally been established by promoters of repute

or by ‘high value’ domestic financial institutions. or by ‘high value’ domestic financial institutions.

The popularity of these banks can be gauged by the fact that in a short span of time, theseThe popularity of these banks can be gauged by the fact that in a short span of time, these

banks have gained considerable customer confidence and consequently have shownbanks have gained considerable customer confidence and consequently have shown

impressive growth rates. Today, the private banks corner almost four per cent share of theimpressive growth rates. Today, the private banks corner almost four per cent share of the

total share of deposits. Most of the banks in this category are concentrated in the high-total share of deposits. Most of the banks in this category are concentrated in the high-

growth urban areas in metros (that account for approximately 70% of the total bankinggrowth urban areas in metros (that account for approximately 70% of the total banking

business). With efficiency being the major focus, these banks have leveraged on theirbusiness). With efficiency being the major focus, these banks have leveraged on their

strengths and competencies viz. Management, operational efficiency and flexibility, superiorstrengths and competencies viz. Management, operational efficiency and flexibility, superior

product positioning and higher employee productivity skills.product positioning and higher employee productivity skills.

The private banks with their focused business and service portfolio have a reputation of beingThe private banks with their focused business and service portfolio have a reputation of being

niche players in the industry. A strategy that has allowed these banks to concentrate on fewniche players in the industry. A strategy that has allowed these banks to concentrate on few

reliable high net worth companies and individuals rather than cater to the mass market.reliable high net worth companies and individuals rather than cater to the mass market.

These well-chalked out integrates strategy plans have allowed most of these banks to deliverThese well-chalked out integrates strategy plans have allowed most of these banks to deliver

superlative levels of personalized services. With the Reserve Bank of India allowing thesesuperlative levels of personalized services. With the Reserve Bank of India allowing these

banks to operate 70% of their businesses in urban areas, this statutory requirement hasbanks to operate 70% of their businesses in urban areas, this statutory requirement has

translated into lower deposit mobilization costs and higher margins relative to public sectortranslated into lower deposit mobilization costs and higher margins relative to public sector

banks. banks.

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7

Analysis of banking products of PNB with its

competitors in both Private & PSU Banks

8


Literature review

“Internet banking”“Internet banking” refers to systems that enable bank customers to access refers to systems that enable bank customers to access accounts and general accounts and general

information on bank products and services through ainformation on bank products and services through a personal computer (PC) or other intelligentpersonal computer (PC) or other intelligent

device.device. Internet banking products and services can include wholesale products forInternet banking products and services can include wholesale products for corporatecorporate

customers as well as retail and fiduciary products for consumers.customers as well as retail and fiduciary products for consumers. Ultimately, the products andUltimately, the products and

services obtained through Internet banking mayservices obtained through Internet banking may mirror products and services offered throughmirror products and services offered through

other bank delivery channels.other bank delivery channels. Some examples of wholesale products and services include:Some examples of wholesale products and services include:

Cash management.Cash management.

Wire transfer.Wire transfer.

Automated clearinghouse (ACH) transactions.Automated clearinghouse (ACH) transactions.

Bill presentment and payment.Bill presentment and payment.

Examples of retail and fiduciary products and services include:Examples of retail and fiduciary products and services include:

Balance inquiry.Balance inquiry.

Funds transfer.Funds transfer.

Downloading transaction information.Downloading transaction information.

Bill presentment and payment.Bill presentment and payment.

Loan applications.Loan applications.

Investment activity.Investment activity.

Other value-added services.Other value-added services.

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Other Internet banking services may include providing Internet access as anOther Internet banking services may include providing Internet access as an Internet ServiceInternet Service

Provider (ISP). The OCC has determined that a national bankProvider (ISP). The OCC has determined that a national bank subsidiary may provide homesubsidiary may provide home

banking services through an Internet connectionbanking services through an Internet connection to the bank’s home banking system and,to the bank’s home banking system and,

incidental to that service, may incidental to that service, may also providealso provide Internet access to bank customers using that service. Internet access to bank customers using that service.

Historically, banks have usedHistorically, banks have used information systems technology to process checks (iteminformation systems technology to process checks (item

processing), drive ATMprocessing), drive ATM machines (transaction processing), and produce reports. In the past, themachines (transaction processing), and produce reports. In the past, the

computer systems that made thecomputer systems that made the information systems operate were rarely noticed by customers.information systems operate were rarely noticed by customers.

Today, WebToday, Web sites, electronic mail, and electronic bill presentment and payment systems aresites, electronic mail, and electronic bill presentment and payment systems are anan

important way for banks to reach their important way for banks to reach their customers. Nationalcustomers. National banks have experimented with banks have experimented with

various forms of online banking various forms of online banking for manyfor many years. Some of the early experiments involved closed years. Some of the early experiments involved closed

systems where thesystems where the customers accessed banks through a dial-in or cable TV connection. Thesecustomers accessed banks through a dial-in or cable TV connection. These

systems limited a bank’s potential customer base because they required out-ofsystems limited a bank’s potential customer base because they required out-of areaarea customers tocustomers to

either incur long-distance charges on their phone bills oreither incur long-distance charges on their phone bills or subscribe to a particular cable TVsubscribe to a particular cable TV

service to access the bank. With theservice to access the bank. With the widespread growth of the Internet, customers can use thiswidespread growth of the Internet, customers can use this

technology anywheretechnology anywhere in the world to access a bank’s network. The Internet, as an enablingin the world to access a bank’s network. The Internet, as an enabling

technology, has made banking products and services available to moretechnology, has made banking products and services available to more customers and eliminatedcustomers and eliminated

geographic and proprietary systems barriers. Withgeographic and proprietary systems barriers. With an expanded market, banks also may havean expanded market, banks also may have

opportunities to expand or changeopportunities to expand or change their product and service offerings.their product and service offerings.

Growth in Internet BankingNumerous factors — including competitive cost, customer service, andNumerous factors — including competitive cost, customer service, and demographicdemographic

considerations — are motivating banks to evaluate theirconsiderations — are motivating banks to evaluate their technology and assess their electronictechnology and assess their electronic

commerce and Internet bankingcommerce and Internet banking strategies. Many researchers expect rapid growth in customersstrategies. Many researchers expect rapid growth in customers

using onlineusing online banking products and services. The challenge for national banks is to make sure thebanking products and services. The challenge for national banks is to make sure the

savings from Internet banking technology more than offset the costssavings from Internet banking technology more than offset the costs and risks associated withand risks associated with

conducting business in cyberspace.conducting business in cyberspace. Marketing strategies will vary as national banks seek toMarketing strategies will vary as national banks seek to

expand their marketsexpand their markets and employ lower cost delivery channels. Examiners will need toand employ lower cost delivery channels. Examiners will need to

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understandunderstand the strategies used and technologies employed on a bank-by-bank basis tothe strategies used and technologies employed on a bank-by-bank basis to assess theassess the

risk. Evaluating a bankrisk. Evaluating a bank’’s data on the use of their Web sites, mays data on the use of their Web sites, may help examiners determine thehelp examiners determine the

bankbank’’s strategic objectives, how well the bank iss strategic objectives, how well the bank is meeting its Internet banking product plan, andmeeting its Internet banking product plan, and

whether the business is expectedwhether the business is expected to be profitable.to be profitable.

Some of the market factors that may drive a bankSome of the market factors that may drive a bank’’s strategy include thes strategy include the following:following:

Competition — Competition — Studies show that competitive pressure is the chief drivingStudies show that competitive pressure is the chief driving force force behind behind

increasing use of Internet banking technology, ranking ahead ofincreasing use of Internet banking technology, ranking ahead of cost reduction andcost reduction and

revenue enhancement, in second and third placerevenue enhancement, in second and third place respectively. Banks see Internet bankingrespectively. Banks see Internet banking

as a way to keep existing customersas a way to keep existing customers and attract new ones to the bank.and attract new ones to the bank.

Cost Efficiencies — Cost Efficiencies — National banks can deliver banking services on the InternetNational banks can deliver banking services on the Internet atat

transaction costs far lower than traditional brick-and-mortar branches. Thetransaction costs far lower than traditional brick-and-mortar branches. The actual costs toactual costs to

execute a transaction will vary depending on the deliveryexecute a transaction will vary depending on the delivery channel used. For example,channel used. For example,

according to Booz, Allen & Hamilton, as of mid-according to Booz, Allen & Hamilton, as of mid- 1999, the cost to deliver manual1999, the cost to deliver manual

transactions at a branch was typically moretransactions at a branch was typically more than a dollar, ATM and call centerthan a dollar, ATM and call center

transactions cost about 25 cents, andtransactions cost about 25 cents, and Internet transactions cost about a penny. These costsInternet transactions cost about a penny. These costs

are expected to continueare expected to continue to decline.to decline.

National banks have significant reasons to develop the technologies that willNational banks have significant reasons to develop the technologies that will help them deliverhelp them deliver

banking products and services by the most cost-effectivebanking products and services by the most cost-effective channels. Many bankers believe thatchannels. Many bankers believe that

shifting only a small portion of theshifting only a small portion of the estimated 19-billion payments mailed annually in the U.S. toestimated 19-billion payments mailed annually in the U.S. to

electronicelectronic delivery channels could save banks and other businesses substantial sums ofdelivery channels could save banks and other businesses substantial sums of money.money.

However, national banks should use care in making product decisions.However, national banks should use care in making product decisions. Management shouldManagement should

include in their decision making the development andinclude in their decision making the development and ongoing costs associated with a newongoing costs associated with a new

product or service, including theproduct or service, including the technology, marketing, maintenance, and customer supporttechnology, marketing, maintenance, and customer support

functions. Thisfunctions. This will help management exercise due diligence, make more informed decisions,will help management exercise due diligence, make more informed decisions,

and measure the success of their business venture.and measure the success of their business venture. 11


Geographical Reach — Geographical Reach — Internet banking allows expanded customer contactInternet banking allows expanded customer contact throughthrough

increased geographical reach and lower cost delivery channels.increased geographical reach and lower cost delivery channels. In fact some banks areIn fact some banks are

doing business exclusively via the Internet — they dodoing business exclusively via the Internet — they do not have traditional banking officesnot have traditional banking offices

and only reach their customers online.and only reach their customers online. Other financial institutions are using the InternetOther financial institutions are using the Internet

as an alternative deliveryas an alternative delivery channel to reach existing customers and attract new customers.channel to reach existing customers and attract new customers.

Branding — Branding — Relationship building is a strategic priority for many nationalRelationship building is a strategic priority for many national banks.banks.

Internet banking technology and products can provide a means forInternet banking technology and products can provide a means for national banks tonational banks to

develop and maintain an ongoing relationship with theirdevelop and maintain an ongoing relationship with their customers by offering easycustomers by offering easy

access to a broad array of products and services.access to a broad array of products and services. By capitalizing on brand identificationBy capitalizing on brand identification

and by providing a broad array ofand by providing a broad array of financial services, banks hope to build customerfinancial services, banks hope to build customer

loyalty, cross-sell, andloyalty, cross-sell, and enhance repeat business.enhance repeat business.

Customer Demographics Customer Demographics — Internet banking allows national banks to offer a— Internet banking allows national banks to offer a widewide

array of options to their banking customers. Some customers will rely onarray of options to their banking customers. Some customers will rely on traditionaltraditional

branches to conduct their banking business. For many, this is thebranches to conduct their banking business. For many, this is the most comfortable waymost comfortable way

for them to transact their banking business. Thosefor them to transact their banking business. Those customers place a premium on person-customers place a premium on person-

to-person contact. Other customers areto-person contact. Other customers are early adopters of new technologies that arrive inearly adopters of new technologies that arrive in

the marketplace. Thesethe marketplace. These customers were the first to obtain PCs and the first to employcustomers were the first to obtain PCs and the first to employ

them inthem in conducting their banking business. The demographics of banking customersconducting their banking business. The demographics of banking customers willwill

continue to change. The challenge to national banks is to understand theircontinue to change. The challenge to national banks is to understand their customer basecustomer base

and find the right mix of delivery channels to deliver productsand find the right mix of delivery channels to deliver products and services profitably toand services profitably to

their various market segments.their various market segments.

Types of Internet BankingUnderstanding the various types of Internet banking products will helpUnderstanding the various types of Internet banking products will help examiners assess the risksexaminers assess the risks

involved. Currently, the following three basic kindsinvolved. Currently, the following three basic kinds of Internet banking are being employed inof Internet banking are being employed in

the marketplace:the marketplace:

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InformationalInformational — this is the basic level of Internet banking. Typically, — this is the basic level of Internet banking. Typically, the bank hasthe bank has

marketing information about the bankmarketing information about the bank’’s products ands products and services on a stand-alone server.services on a stand-alone server.

The risk is relatively low, asThe risk is relatively low, as informational systems typically have no path between theinformational systems typically have no path between the

server and theserver and the bankbank’’s internal network. This level of Internet banking can be provideds internal network. This level of Internet banking can be provided byby

the bank or outsourced. While the risk to a bank is relatively low,the bank or outsourced. While the risk to a bank is relatively low, the server or Web sitethe server or Web site

may be vulnerable to alteration. Appropriatemay be vulnerable to alteration. Appropriate controls therefore must be in place tocontrols therefore must be in place to

prevent unauthorized alterations toprevent unauthorized alterations to the bankthe bank’’s server or Web site.s server or Web site.

CommunicativeCommunicative — this type of Internet banking system allows — this type of Internet banking system allows some interaction betweensome interaction between

the bankthe bank’’s systems and the customer. Thes systems and the customer. The interaction may be limited to electronic mail;interaction may be limited to electronic mail;

account inquiry, loanaccount inquiry, loan applications, or static file updates (name and address changes).applications, or static file updates (name and address changes).

BecauseBecause these servers may have a path to the bankthese servers may have a path to the bank’’s internal networks, the risk iss internal networks, the risk is higherhigher

with this configuration than with informational systems.with this configuration than with informational systems. Appropriate controls need to beAppropriate controls need to be

in place to prevent, monitor, and alertin place to prevent, monitor, and alert management of any unauthorized attempt to accessmanagement of any unauthorized attempt to access

the bankthe bank’’s internals internal BankingBanking networks and computer systems. Virus controls also becomenetworks and computer systems. Virus controls also become

muchmuch more critical in this environment.more critical in this environment.

Transactional — Transactional — This level of Internet banking allows customers toThis level of Internet banking allows customers to executeexecute

transactions. Since a path typically exists between the servertransactions. Since a path typically exists between the server and the bankand the bank’’s ors or

outsourceroutsourcer’’s internal network, this is the highest risks internal network, this is the highest risk architecture and must have thearchitecture and must have the

strongest controls. Customerstrongest controls. Customer transactions can include accessing accounts, paying bills,transactions can include accessing accounts, paying bills,

transferringtransferring funds, etc.funds, etc.

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Mobile Banking

MobileMobile bankingbanking is a way for the customer to perform is a way for the customer to perform bankingbanking actions on his or her cell phone or actions on his or her cell phone or

other other mobilemobile device. It is a quite popular method of device. It is a quite popular method of bankingbanking that fits in well with a busy, that fits in well with a busy,

technologically oriented lifestyle. It might also be referred to as M-technologically oriented lifestyle. It might also be referred to as M-bankingbanking or or SMSSMS bankingbanking. .

The amount of The amount of bankingbanking you are able to do on your cell phone varies depending on the you are able to do on your cell phone varies depending on the bankingbanking

institution you use. Some banks offer only the option of institution you use. Some banks offer only the option of text alertstext alerts, which are messages sent to, which are messages sent to

your cell phone that alert you to activity on your account such as deposits, withdrawals, andyour cell phone that alert you to activity on your account such as deposits, withdrawals, and

ATM or ATM or credit cardcredit card use. This is the most basic type of use. This is the most basic type of mobilemobile bankingbanking..

A more involved type of mobile banking allows the user to log into his or her account from a cellA more involved type of mobile banking allows the user to log into his or her account from a cell

phone, and then use the phone to make payments, check balances, transfer money betweenphone, and then use the phone to make payments, check balances, transfer money between

accounts, notify the bank of a lost or stolen credit card, stop payment on a check, receive a newaccounts, notify the bank of a lost or stolen credit card, stop payment on a check, receive a new

PIN, or view a monthly statement, among other transactions. This type of banking is meant to bePIN, or view a monthly statement, among other transactions. This type of banking is meant to be

more convenient for the consumer than having to physically go into a bank, log on from theirmore convenient for the consumer than having to physically go into a bank, log on from their

home computer, or make a phone call. While all of this is true, some are concerned about thehome computer, or make a phone call. While all of this is true, some are concerned about the

security of mobile banking.security of mobile banking.

Most experts advise against performing any large transactions over mobile banking, which isMost experts advise against performing any large transactions over mobile banking, which is

good advice. However, it is equally important to use an alphanumeric password and to keep yourgood advice. However, it is equally important to use an alphanumeric password and to keep your

PIN safe. Change your password often, and do not use your pets' names, your child's name, orPIN safe. Change your password often, and do not use your pets' names, your child's name, or

any birthdays. This advice applies to all passwords, not just those used for mobile banking.any birthdays. This advice applies to all passwords, not just those used for mobile banking.

Though you are logging on to a secure server at the bank through your cell phone, you need to doThough you are logging on to a secure server at the bank through your cell phone, you need to do

your part to protect your information. For this reason, many banks are now sending one-time useyour part to protect your information. For this reason, many banks are now sending one-time use

passwords for an extra step in security.passwords for an extra step in security.

14

http://www.wisegeek.com/what-is-a-credit-card.htm

http://www.wisegeek.com/what-are-text-alerts.htm

http://www.wisegeek.com/what-is-sms.htm


A one-time use password might be sent to a cell phone or other device when you wish to log intoA one-time use password might be sent to a cell phone or other device when you wish to log into

your account. You will then usually need to enter both the password you have already set, alongyour account. You will then usually need to enter both the password you have already set, along

with the one-time use password, within a certain period of time. The one-time use passwordwith the one-time use password, within a certain period of time. The one-time use password

expires, naturally, after it is used once or after a time limit has passed. Using two passwordsexpires, naturally, after it is used once or after a time limit has passed. Using two passwords

increases the security of the account, an important concern with mobile banking.increases the security of the account, an important concern with mobile banking.

15


ATMsAutomated Teller Machine is a computerized machine that provides the customers of banks theAutomated Teller Machine is a computerized machine that provides the customers of banks the

facility of accessing their accounts for drawing cash and to carry out other financial transactionsfacility of accessing their accounts for drawing cash and to carry out other financial transactions

without the need of actually visiting a bank branch.without the need of actually visiting a bank branch.

ATM cards/debit cards, credit cards and prepaid cards (that permit cash withdrawal) can be usedATM cards/debit cards, credit cards and prepaid cards (that permit cash withdrawal) can be used

at ATMs for various transactions.at ATMs for various transactions.

In addition to cash dispensing, ATMs have following services/facilities:In addition to cash dispensing, ATMs have following services/facilities:

Balance EnquiryBalance Enquiry

Cash Deposit Cash Deposit

Funds Transfer Funds Transfer

Prepaid Mobile RechargePrepaid Mobile Recharge

Mini/Short Statement Mini/Short Statement

PIN Change etc.PIN Change etc.

The services offered may vary from bank to bank, or may depend on the capacity of the machineThe services offered may vary from bank to bank, or may depend on the capacity of the machine

at the ATM outlet to provide such services.at the ATM outlet to provide such services.

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Credit cardCredit card is given by the banker to the customers in which the name of the customer isCredit card is given by the banker to the customers in which the name of the customer is

embossed in blocks letters, the name of the bank of issues and expiry are also mentioned on theembossed in blocks letters, the name of the bank of issues and expiry are also mentioned on the

field the reverse side of the card will bear the specimen signature of the customers. A list offield the reverse side of the card will bear the specimen signature of the customers. A list of

vendors or sellers will be given by the banker to the customers.vendors or sellers will be given by the banker to the customers.

TYPES OF CREDIT CARDS

Charge cardCharge card

oo In this card, the cardholder has to make full payment of the charge by the due In this card, the cardholder has to make full payment of the charge by the due

date. Unlike other credit cards, here dues are not allowed to carry forward.date. Unlike other credit cards, here dues are not allowed to carry forward.

Affinity cardAffinity card

oo A card offered by two organizations of which one is a lending institution and the A card offered by two organizations of which one is a lending institution and the

other a non financial group. Here schools, nonprofit groups, airlines, petroleum other a non financial group. Here schools, nonprofit groups, airlines, petroleum

companies issue affinity cards. These cards carry special discounts.companies issue affinity cards. These cards carry special discounts.

Standard cardStandard card

oo It is a normal credit card which carries limit on transactions, according to the It is a normal credit card which carries limit on transactions, according to the

credit worthiness of the card holder.credit worthiness of the card holder.

Classis card.Classis card.

oo A credit card issued by visa, carrying the logo of visa.A credit card issued by visa, carrying the logo of visa.

17


Gold cardGold card

oo A credit card that offers a higher line of credit than a standard card. Income A credit card that offers a higher line of credit than a standard card. Income

eligibility is also higher. In addition, issuers provide extra perks or incentives to eligibility is also higher. In addition, issuers provide extra perks or incentives to

cardholder.cardholder.

Platinum cardPlatinum card

oo A credit card with a higher limit and additional perks than a gold card.A credit card with a higher limit and additional perks than a gold card.

Titanium cardTitanium card

oo A card with an even higher limit than a platinum card.A card with an even higher limit than a platinum card.

Secured cardSecured card

oo A credit card is given to a card holder who has savings deposit which will takeA credit card is given to a card holder who has savings deposit which will take

care of his outstanding balance, in case of his default on payment.care of his outstanding balance, in case of his default on payment.

Smart cardSmart card

oo Smart cards, sometimes called chip[ cards, contains a computer chipSmart cards, sometimes called chip[ cards, contains a computer chip

embedded in the plastic where a typical credit card's magnetic strip can holdembedded in the plastic where a typical credit card's magnetic strip can hold

only a few dozen characters, strip can hold only a few dozen characters,only a few dozen characters, strip can hold only a few dozen characters,

smarty cards are now available with 16k of memory. When read buy a specialsmarty cards are now available with 16k of memory. When read buy a special

terminals, the cardsterminals, the cards can perform a number of functions or access data stored incan perform a number of functions or access data stored in

the chip. These cards can be used as cash cards or as credit cards with athe chip. These cards can be used as cash cards or as credit cards with a

present credit limit, or used as ID cards with stored – in passwords.present credit limit, or used as ID cards with stored – in passwords.

18


Debit cardsA A debit carddebit card (also known as a (also known as a bank cardbank card or or check cardcheck card) is a plastic card that provides an) is a plastic card that provides an

alternative payment method to alternative payment method to cashcash when making purchases. Functionally, it can be called an when making purchases. Functionally, it can be called an

electronic cheque, as the funds are withdrawn directly from either the electronic cheque, as the funds are withdrawn directly from either the bank accountbank account, or from the, or from the

remaining balance on the card. In some cases, the cards are designed exclusively for use on theremaining balance on the card. In some cases, the cards are designed exclusively for use on the

Internet, and so there is no physical card. Debit cards may also allow for instant withdrawal ofInternet, and so there is no physical card. Debit cards may also allow for instant withdrawal of

cash, acting as the cash, acting as the ATM cardATM card for withdrawing cash and as a for withdrawing cash and as a cheque guarantee cardcheque guarantee card. Merchants. Merchants

may also offer may also offer cash backcash back facilities to customers, where a customer can withdraw cash along with facilities to customers, where a customer can withdraw cash along with

their purchase.their purchase.

Debit Card Types

There are two types of debit card categories. These are the virtual debit cards and theThere are two types of debit card categories. These are the virtual debit cards and the

physical debit cards. A wide range of debit card products are offered under these categories.physical debit cards. A wide range of debit card products are offered under these categories.

These cards are provided with a number of features. These cards are provided with a number of features.

Virtual Debit Cards

These cards have been designed as a measure to check the fraudulent activities that are doneThese cards have been designed as a measure to check the fraudulent activities that are done

through the Internet. There are a number of virtual credit cards offered by the companies. Somethrough the Internet. There are a number of virtual credit cards offered by the companies. Some

of these cards are as follows: of these cards are as follows:

Gift CardsGift Cards

Payroll CardsPayroll Cards

19

http://en.wikipedia.org/wiki/Debit_card_cashback

http://en.wikipedia.org/wiki/Cheque_guarantee_card

http://en.wikipedia.org/wiki/ATM_card

http://en.wikipedia.org/wiki/Bank_account

http://en.wikipedia.org/wiki/Cash


Merchant CardsMerchant Cards

Incentive CardsIncentive Cards

Student Cards Student Cards

Services Offered by Different Types of Virtual Debit Cards

Payments Through InternetPayments Through Internet

SMS TransfersSMS Transfers

Offline PaymentsOffline Payments

Money TransferMoney Transfer

Depository ServicesDepository Services

Physical Debit Cards

These cards are similar to other plastic cards but the main difference is that the cardholdersThese cards are similar to other plastic cards but the main difference is that the cardholders

should put the money in the card account before using the card. Different types of Physical Debitshould put the money in the card account before using the card. Different types of Physical Debit

Cards are provided by the card companies. Some of these are the following: Cards are provided by the card companies. Some of these are the following:

Re-Loadable Debit Cards:Re-Loadable Debit Cards: There are a number of cards that are provided as Re-Loadable Debit There are a number of cards that are provided as Re-Loadable Debit

Cards. These are Payment Cards, Merchant Cards, Student Cards, Payroll Cards, andCards. These are Payment Cards, Merchant Cards, Student Cards, Payroll Cards, and

Government Payment Cards and so onGovernment Payment Cards and so on

Disposable Debit Cards:Disposable Debit Cards: Some of these cards are Incentive Cards, Gift Cards and so on. Some of these cards are Incentive Cards, Gift Cards and so on.

Services Offered by Physical Debit Cards

ATM ServicesATM Services

Money Transfer ServicesMoney Transfer Services

20


Online/Offline PaymentsOnline/Offline Payments

Depository ServicesDepository Services

POS TerminalsPOS Terminals

21


Company profile: Punjab National Bank

VISIONVISION

"To be a Leading Global Bank with Pan India"To be a Leading Global Bank with Pan India

footprints and become a household brand in the Indo-footprints and become a household brand in the Indo-

Gangetic Plains providing entire range of financialGangetic Plains providing entire range of financial

products and services under one roof"products and services under one roof"

MISSIONMISSION

"Banking for the unbanked""Banking for the unbanked"

22


With over 56 million satisfied customers and 5002 offices, PNB has continued to retainWith over 56 million satisfied customers and 5002 offices, PNB has continued to retain

its leadership position amongst the nationalized banks. The bank enjoys strong fundamentals,its leadership position amongst the nationalized banks. The bank enjoys strong fundamentals,

large franchise value and good brand image. Besides being ranked as one of India's top servicelarge 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 prudentbrands, 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 & debitbanking. 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 & assetcard business; bullion business; life and non-life insurance business; Gold coins & asset

management business, etc. management business, etc.

Since its humble beginning in 1895 with the distinction of being the first Indian bank toSince 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 athave been started with Indian capital, PNB has achieved significant growth in business which at

the end of March 2010 amounted to Rs 435931 crore. Today, with assets of more than Rsthe end of March 2010 amounted to Rs 435931 crore. Today, with assets of more than Rs

2,96,633 crore, PNB is ranked as the 3rd largest bank in the country (after SBI and ICICI Bank)2,96,633 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 (5002 offices including 5 overseasand has the 2nd largest network of branches (5002 offices including 5 overseas

branches ).During the FY 2009-10, with 40.85% share of CASA deposits, the bank achieved abranches ).During the FY 2009-10, with 40.85% share of CASA deposits, the bank achieved a

net profit of Rs 3905 crore. Bank has a strong capital base with capital adequacy ratio of 14.16%net profit of Rs 3905 crore. Bank has a strong capital base with capital adequacy ratio of 14.16%

as on Mar’10 as per Basel II with Tier I and Tier II capital ratio at 9.15% and 5.01%as on Mar’10 as per Basel II with Tier I and Tier II capital ratio at 9.15% and 5.01%

respectively. As on March’10, the Bank has the Gross and Net NPA ratio of 1.71% and 0.53%respectively. As on March’10, the Bank has the Gross and Net NPA ratio of 1.71% and 0.53%

respectively. During the FY 2009-10, its’ ratio of Priority Sector Credit to Adjusted Net Bankrespectively. During the FY 2009-10, its’ ratio of Priority Sector Credit to Adjusted Net Bank

Credit at 40.5% & Agriculture Credit to Adjusted Net Bank Credit at 19.7% was also higher thanCredit at 40.5% & Agriculture Credit to Adjusted Net Bank Credit at 19.7% was also higher than

the stipulated requirement of 40% & 18%. the stipulated requirement of 40% & 18%.

The Bank has maintained its stake holder’s interest by posting an improved NIM ofThe Bank has maintained its stake holder’s interest by posting an improved NIM of

3.57% in Mar’10 (3.52% Mar’09) and a Return on Assets of 1.44% (1.39% Mar’09). The3.57% in Mar’10 (3.52% Mar’09) and a Return on Assets of 1.44% (1.39% Mar’09). The

Earning per Share improved to Rs 123.98 (Rs 98.03 Mar’09) while the Book value per shareEarning per Share improved to Rs 123.98 (Rs 98.03 Mar’09) while the Book value per share

improved to Rs 514.77 (Rs 416.74 Mar’09) improved to Rs 514.77 (Rs 416.74 Mar’09)

Punjab National Bank continues to maintain its frontline position in the Indian banking industry.

In particular, the bank has retained its NUMBER ONE position among the nationalized banks in terms of

23


number of branches, Deposit, Advances, total Business, Assets, Operating and Net profit in the year

2009-10. The impressive operational and financial performance has been brought about by Bank’s focus

on customer based business with thrust on CASA deposits, Retail, SME & Agri Advances and with more

inclusive approach to banking; better asset liability management; improved margin management, thrust

on recovery and increased efficiency in core operations of the Bank. The performance highlights of the

bank in terms of business and profit are shown below:

ParametersParameters Mar'08Mar'08 Mar'09Mar'09 Mar'10Mar'10 CAGR (%)CAGR (%)

Operating ProfitOperating Profit 40064006 57445744 73267326 22.2922.29

Net ProfitNet Profit 20492049 30913091 39053905 23.9823.98

DepositDeposit 166457166457 209760209760 249330249330 14.4214.42

AdvanceAdvance 119502119502 154703154703 186601186601 16.0116.01

Total BusinessTotal Business 285959285959 364463364463 435931435931 15.0915.09

PNB has always looked at technology as a key facilitator to provide better customerPNB has always looked at technology as a key facilitator to provide better customer

service and ensured that its ‘IT strategy’ follows the ‘Business strategy’ so as to arrive at “Bestservice and ensured that its ‘IT strategy’ follows the ‘Business strategy’ so as to arrive at “Best

Fit”. The bank has made rapid strides in this direction. All branches of the Bank are under CoreFit”. The bank has made rapid strides in this direction. All branches of the Bank are under Core

Banking Solution (CBS) since Dec’08, thus covering 100% of its business and providingBanking Solution (CBS) since Dec’08, thus covering 100% of its business and providing

‘Anytime Anywhere’ banking facility to all customers including customers of more than 3000‘Anytime Anywhere’ banking facility to all customers including customers of more than 3000

rural & semi urban branches. The bank has also been offering Internet banking services to therural & semi urban branches. The bank has also been offering Internet banking services to the

customers of CBS branches like booking of tickets, payment of bills of utilities, purchase ofcustomers of CBS branches like booking of tickets, payment of bills of utilities, purchase of

airline tickets etc. Towards developing a cost effective alternative channels of delivery, the bankairline tickets etc. Towards developing a cost effective alternative channels of delivery, the bank

with more than 350 ATMs has the largest ATM network amongst Nationalized Banks. With thewith more than 350 ATMs has the largest ATM network amongst Nationalized Banks. With the

help of advanced technology, the Bank has been a frontrunner in the industry so far as thehelp of advanced technology, the Bank has been a frontrunner in the industry so far as the

initiatives for Financial Inclusion is concerned. With its policy of inclusive growth in the Indo-initiatives for Financial Inclusion is concerned. With its policy of inclusive growth in the Indo-

Gangetic belt, the Bank’s mission is “Banking for Unbanked”. The Bank has launched a driveGangetic belt, the Bank’s mission is “Banking for Unbanked”. The Bank has launched a drive

24


for biometric smart card based technology enabled Financial Inclusion with the help of Businessfor biometric smart card based technology enabled Financial Inclusion with the help of Business

Correspondents/Business Facilitators (BC/BF) so as to reach out to the last mile customer. Correspondents/Business Facilitators (BC/BF) so as to reach out to the last mile customer.

The Bank has started several innovative initiatives for marginal groups like rickshawThe Bank has started several innovative initiatives for marginal groups like rickshaw

pullers, vegetable vendors, dairy farmers, construction workers, etc. Under Branchless Bankingpullers, vegetable vendors, dairy farmers, construction workers, etc. Under Branchless Banking

model, the Bank is implementing 40 projects in 16 States. The Bank launched an ambitiousmodel, the Bank is implementing 40 projects in 16 States. The Bank launched an ambitious

‘Project Namaskar’ under which 1 lakh touch points will be established in unbanked villages by‘Project Namaskar’ under which 1 lakh touch points will be established in unbanked villages by

2013 to extend the Bank’s outreach. Under this, 30 Kiosks have been opened covering 1192013 to extend the Bank’s outreach. Under this, 30 Kiosks have been opened covering 119

Villages reaching 1.32 Lakh beneficiaries. Backed by strong domestic performance, the bank isVillages reaching 1.32 Lakh beneficiaries. Backed by strong domestic performance, the bank is

planning to realize its global aspirations. planning to realize its global aspirations.

Bank continues its selective foray in international markets with presence in 9 countries,Bank continues its selective foray in international markets with presence in 9 countries,

with branches at Kabul and Dubai, Hong Kong & representative offices at Almaty, Dubai,with branches at Kabul and Dubai, Hong Kong & representative offices at Almaty, Dubai,

Shanghai and Oslo, a wholly owned subsidiary in UK, a joint venture with Everest Bank Ltd.Shanghai and Oslo, a wholly owned subsidiary in UK, a joint venture with Everest Bank Ltd.

Nepal and a JV banking subsidiary “DRUK PNB Bank Ltd.” in Bhutan. Nepal and a JV banking subsidiary “DRUK PNB Bank Ltd.” in Bhutan.

Bank is pursuing up gradation of its representative offices in China & Norway and is inBank is pursuing up gradation of its representative offices in China & Norway and is in

the process of setting up a representative office in Sydney, Australia and taking controlling stakethe process of setting up a representative office in Sydney, Australia and taking controlling stake

in JSC Dana Bank in Kazakhastan. in JSC Dana Bank in Kazakhastan.

Bank has been a recipient of many awards and accolades during the year:-Bank has been a recipient of many awards and accolades during the year:-

Gold trophy of SCOPE Meritorious Award for Excellence in Corporate Governance 2009Gold trophy of SCOPE Meritorious Award for Excellence in Corporate Governance 2009

by Standing Conference of Public Enterprisesby Standing Conference of Public Enterprises

As per Financial Express-Ernest & young (FE-EY) India’s Best Banks Survey, PNB isAs per Financial Express-Ernest & young (FE-EY) India’s Best Banks Survey, PNB is

identified as the best bank among the nationalized banks in terms of overall ranking.identified as the best bank among the nationalized banks in terms of overall ranking.

As per HT-Mars Survey on Customer Satisfaction, PNB stood NUMBER ONE in DelhiAs per HT-Mars Survey on Customer Satisfaction, PNB stood NUMBER ONE in Delhi

and Chennai in terms of customer satisfaction.and Chennai in terms of customer satisfaction.

25


As per the Forbes Annual list of 2000 global giants, PNB tops the list of nationalizedAs per the Forbes Annual list of 2000 global giants, PNB tops the list of nationalized

banks with a global ranking of 695, substantial improvement over last year’s placement atbanks with a global ranking of 695, substantial improvement over last year’s placement at

946th position.946th position.

The Economic Times has ranked CEO of PNB as the 32nd Most Powerful CEO of 2010.The Economic Times has ranked CEO of PNB as the 32nd Most Powerful CEO of 2010.

Skoch Challenge Award 2010 for “Livelihood Linkage” of the milk producers inSkoch Challenge Award 2010 for “Livelihood Linkage” of the milk producers in

Bulandshahr District, Uttar Pradesh.Bulandshahr District, Uttar Pradesh.

IDC Financial Insights Innovation awards 2010 by IDC Financial InsightsIDC Financial Insights Innovation awards 2010 by IDC Financial Insights

26


Products & Services offeredSavings Fund Account Savings Fund Account Total Freedom Salary Account, PNBTotal Freedom Salary Account, PNB

Prudent Sweep, PNB Vidyarthi SF Account,Prudent Sweep, PNB Vidyarthi SF Account,

PNB Mitra SF PNB Mitra SF

Account Current Account Account Current Account PNB Vaibhav, PNB Gaurav, PNBPNB Vaibhav, PNB Gaurav, PNB

Smart RoamerSmart Roamer

Fixed Deposit Schemes Fixed Deposit Schemes Spectrum Fixed Deposit Scheme,Spectrum Fixed Deposit Scheme,

Anupam Account, Mahabachat Schemes, MultiAnupam Account, Mahabachat Schemes, Multi

Benefit Deposit Benefit Deposit

Scheme Credit Schemes Scheme Credit Schemes Flexible Housing Loan, Car Finance,Flexible Housing Loan, Car Finance,

Personal Loan, Credit CardsPersonal Loan, Credit Cards

Social Banking Social Banking Mahila Udyam Nidhi Scheme, KrishiMahila Udyam Nidhi Scheme, Krishi

Card, PNB Farmers Welfare TrustCard, PNB Farmers Welfare Trust

Corporate Banking Corporate Banking Gold Card scheme for exporters,Gold Card scheme for exporters,

EXIM financeEXIM finance

Business Sector Business Sector PNB Karigar credit card, PNB KushalPNB Karigar credit card, PNB Kushal

Udhami, PNB Pragati Udhami, PNB VikasUdhami, PNB Pragati Udhami, PNB Vikas

UdhamiUdhami

27


PEST ANALYSIS

28


SWOT Analysis

29


Measures that would help PNB cope its threats and weaknesses

30


Scope of the studyScope of the study

As current market place is highly competitive and each corporate is expanding its business roundAs current market place is highly competitive and each corporate is expanding its business round

the globe for its global presence so they do study related to market trend regarding to theirthe globe for its global presence so they do study related to market trend regarding to their

market share in comparison to their competitors. This study is carried out to compare themarket share in comparison to their competitors. This study is carried out to compare the

products of Punjab National Bank with its competitors in Private as well as Public sector. products of Punjab National Bank with its competitors in Private as well as Public sector.

Significance of the studySignificance of the study

This study is helpful to find out the strengths and the weakness of their products andThis study is helpful to find out the strengths and the weakness of their products and

mobilization schemes of bank and how to overcome its weakness. This study provides usefulmobilization schemes of bank and how to overcome its weakness. This study provides useful

inputs to find out the current position of Punjab National Bank in comparison to its competitors.inputs to find out the current position of Punjab National Bank in comparison to its competitors.

Objectives of StudyObjectives of Study

The objectives of undergoing study are as follows;The objectives of undergoing study are as follows;

1.1. Study and analyze the market share of financial products of different banks.Study and analyze the market share of financial products of different banks.

2.2. Possible improvements to be brought in for the development of their future business.Possible improvements to be brought in for the development of their future business.

31


METHODOLOGY (data collection method)

For the exploratory research, the data is collected: For the exploratory research, the data is collected:

By secondary data analysisBy secondary data analysis

For the Primary research, the data is collected in:For the Primary research, the data is collected in:

By conducting personal interviews of the PNB customers and non-pnb customersBy conducting personal interviews of the PNB customers and non-pnb customers

32


Exploratory ResearchWe have conducted the exploratory research, using the survey method and have also done theWe have conducted the exploratory research, using the survey method and have also done the

secondary data analysis secondary data analysis

Purpose of Exploratory Survey:Purpose of Exploratory Survey:

i)i) To identify factors influencing the customers to chose PNB as their bankTo identify factors influencing the customers to chose PNB as their bank

ii)ii) Identify competitors in Indian markets. Identify competitors in Indian markets.

Research Methods:Research Methods:

i)i) Experience Surveys:Experience Surveys:

The Target Groups identified for this survey are:The Target Groups identified for this survey are:

a)a) Individuals having bank accounts in PNB(Age: 19 – 60 years)Individuals having bank accounts in PNB(Age: 19 – 60 years)

Sample Size: 10Sample Size: 10

b)b) Non- PNB customersNon- PNB customers (Age: 19 – 60 years)(Age: 19 – 60 years)

33


Sample Size: 10Sample Size: 10

The questions asked were open-ended questions to gauge the range of responses possible andThe questions asked were open-ended questions to gauge the range of responses possible and

also to tap what comes first to the minds of the people when asked a particular question.also to tap what comes first to the minds of the people when asked a particular question.

34


DataData

AnalysisAnalysis

35


To start on with the data analysis, the series in which data is analyzed is

Internet BankingInternet Banking

Mobile BankingMobile Banking

ATMsATMs

Point of Sale establishmentsPoint of Sale establishments

Credit cardsCredit cards

Debit cardsDebit cards

Type of banksType of banks PublicPublic PrivatePrivate ForeignForeign

Number of banksNumber of banks 44 22 22

BanksBanks Punjab National Punjab National BankBank

State Bank of State Bank of IndiaIndia

Axis BankAxis Bank

Bank of BarodaBank of Baroda

HDFC bankHDFC bank

ICICI bankICICI bank

Standard Standard Chartered BankChartered Bank

CitibankCitibank

We have analyzed the data by taking 8 banks into consideration which are as follows:We have analyzed the data by taking 8 banks into consideration which are as follows:

36


Internet Banking: Punjab National Bank of India is also a member of SWIFT and more than 150 PNB Branches arePunjab National Bank of India is also a member of SWIFT and more than 150 PNB Branches are

connected with terminals in Mumbai. It promotes "Any Time, Any Where Banking".connected with terminals in Mumbai. It promotes "Any Time, Any Where Banking".

PNB offers Internet Banking services for both to the Corporate and Individuals. It provides 24PNB offers Internet Banking services for both to the Corporate and Individuals. It provides 24

hours, 365 days banking from the PC of the user. A user can operate anytime and from anywherehours, 365 days banking from the PC of the user. A user can operate anytime and from anywhere

its accounts. The following are some of the services available online:its accounts. The following are some of the services available online:

Access to accountAccess to account

Complete details of transactions and statement of accountComplete details of transactions and statement of account

Online information of deposits, loans overdraft account etc.Online information of deposits, loans overdraft account etc.

Online Payment Facility for railway reservation through IRCTC Payment GatewayOnline Payment Facility for railway reservation through IRCTC Payment Gateway

ProjectProject

Online Utility Bill Payment Services which allows Internet Banking account holders toOnline Utility Bill Payment Services which allows Internet Banking account holders to

pay their telephone, mobile, electricity, insurance and other bills anytime from anywherepay their telephone, mobile, electricity, insurance and other bills anytime from anywhere

from their desktop. from their desktop.

37

Software applications used for using

Internet banking

RTGS N EFT

PN B Internet Explorer 5.5 or above Yes Yes

SBI Microsoft Internet Explorer 7 and

above or Mozilla 3 and above

Yes Yes

Axis Internet explorer Ver. 5.5 & above Yes Yes

BOB Internet explorer Ver. 5.0 Yes Yes

HDFC Internet Explorer Version 5.5 and

above Netscape Navigator Version 4.7

and above.

Yes Yes

IC IC I Internet Explorer Ver. 5.5 and Ver. 6 or

Firefox Ver. 1.5 with a resolution of

1024x768.

Yes Yes

Standard C hartered Minimum software required to access

internet

Yes Yes

C itibank Any browser Yes Yes


In order to avail internet banking, the consumers have to agree to certain conditions toIn order to avail internet banking, the consumers have to agree to certain conditions to

use the internet banking facility continuously without any problems. The most importantuse the internet banking facility continuously without any problems. The most important

condition of all is the software which has to be availed by the consumer for himself which iscondition of all is the software which has to be availed by the consumer for himself which is

given below:given below:

The Bank requirements for software in order to let the consumers use internet banking differs asThe Bank requirements for software in order to let the consumers use internet banking differs as

per their technology usage. The foreign banks don’t find any problems as far as technology isper their technology usage. The foreign banks don’t find any problems as far as technology is

concerned whereas nationalized banks require particular software for the consumers to use theirconcerned whereas nationalized banks require particular software for the consumers to use their

internet banking services. internet banking services.

38


Internet Banking features comparison

Now to understand the differences between the services being offered in internet banking byNow to understand the differences between the services being offered in internet banking by

various banks in India, the table explains the features:various banks in India, the table explains the features:

Accounts transfer:

AccountsAccounts transfertransfer

Accounts Accounts informationinformation

Online Online statementsstatements of of accountsaccounts

Check Check your your BalanceBalance

See your See your StatementStatement

Inquire Inquire about about cheque cheque statusstatus

Ask for a Ask for a StatemenStatementt

Ask for Ask for a a ChequeCheque BookBook

Other Other additionaladditional servicesservices

PNBPNB SBISBI AxisAxis BOBBOB HDFCHDFC ICICIICICI Standard Standard CharteredChartered

CitibankCitibank Funds & Payments

Funds &Funds & PaymentsPayments

Transfer Transfer funds funds within within your own your own accountsaccounts

Transfer Transfer funds to funds to third party third party accountsaccounts

Pay credit Pay credit card billscard bills

Transfer funds Transfer funds to religious and to religious and Charitable Charitable institutionsinstitutions

Pay taxes Pay taxes OnlineOnline

Pay your Pay your Utility BillsUtility Bills

PNBPNB

SBISBI

AxisAxis

BOBBOB

39


HDFCHDFC

ICICIICICI

Standard Standard CharteredChartered

CitibankCitibank

Credit Credit card card servicesservices

View View Credit Credit card card account account summarysummary

View & View & downloaddownload Credit Credit Card Card statemenstatementt

Credit Credit Cards Cards PaymenPaymentt

RedeemRedeem Reward Reward PointsPoints

PaymenPayment Due t Due DatesDates

Credit CardCredit Card StatementStatements by e-mails by e-mail

SubscribeSubscribe for Creditfor Credit Card Card alerts.alerts.

DuplicateDuplicate PINPIN

RequestRequest an add-an add-on card.on card.

PNBPNB SBISBI AxisAxis BOBBOB HDFCHDFC ICICIICICI Standard Standard ChartereCharteredd

CitibankCitibank Credit cards servicesCredit cards services

Online applications:

Online Online requests/ requests/ applicationsapplications

Online Online share share tradingtrading

Book Book ticketstickets onlineonline

VAT VAT Ask Ask for for a a DDDD

RequestRequest for a for a new new Fixed Fixed DepositDeposit

StatemenStatement Request t Request

RequestRequest cheque cheque books.books.

Order for Order for lost lost /misplaced/misplaced statementsstatements

Loan Loan requestrequest onlineonline

RequestRequest for yourfor your APIN, APIN, TPIN & TPIN & balancebalance transfertransfer

40


PNBPNB SBISBI AxisAxis BOBBOB HDFCHDFC ICICIICICI Standard Standard CharteredChartered

CitibankCitibank

Also as per the analysis, the survey was carried out to analyze the banks on the basis of theAlso as per the analysis, the survey was carried out to analyze the banks on the basis of the

features provided by various banks.features provided by various banks.

11 22 33 44 55 66 77 88 TotalTotal ScoreScore

Level (0) InformationalLevel (0) Informational

1. General Bank info. &General Bank info. & HistoryHistory

99 88 88 88 99 99 88 88 8.48.4

2.2. Financial EducationalFinancial Educational Info.Info.

77 99 88 88 88 77 88 77 7.87.8

3.3. Employment Info.Employment Info. 66 77 88 77 77 88 77 77 7.27.2

4.4. InterestInterest 77 66 88 66 88 88 88 88 7.47.4

5.5. Financial CalculatorFinancial Calculator 88 99 77 66 7.57.5 77 88 88 7.67.6

Level (1) AdministrativeLevel (1) Administrative

6.6. Accounts info. AccessAccounts info. Access 99 88 88 88 88 88 88 88 8.28.2

7.7. Application for servicesApplication for services 77 88 88 99 77 66 77 77 7.47.4

Level (2) TransactionalLevel (2) Transactional

41


8.8. Account TransferAccount Transfer CapabilitiesCapabilities

77 99 88 88 77 7.57.5 77 77 7.67.6

9.9. Bill-Pay ServicesBill-Pay Services 88 99 66 66 66 55 77 77 6.76.7

10.10. Corporate ServicesCorporate Services 88 99 77 99 99 77 77 88 88

11.11. Online InsuranceOnline Insurance 77 99 88 77 88 77 88 88 7.87.8

12.12. InsuranceInsurance BrokerageBrokerage

66 66 77 77 77 66 55 55 6.26.2

13.13. Online TrustOnline Trust 66 88 7.57.5 77 77 66 77 88 7.17.1

Level (3) PortalLevel (3) Portal

14.14. Links to FinancialLinks to Financial Info.Info.

1010 1010 88 88 99 88 88 88 7.67.6

15.15. Links toLinks to Community Info.Community Info.

99 88 77 66 77 6.56.5 77 77 6.86.8

16.16. Links to LocalLinks to Local BusinessBusiness

88 88 77 66 88 77 77 77 6.36.3

Level (4) OthersLevel (4) Others

17.17. Search FunctionSearch Function 77 1010 77 88 99 99 99 99 7.57.5

18.18. Provide HindiProvide Hindi Language FacilitiesLanguage Facilities

99 1010 -- -- -- 99 -- -- 3.63.6

Overall ScoreOverall Score 7.67.6 8.48.4 7.17.1 6.96.9 7.77.7 7.67.6 7.57.5 7.57.5

Presence Percentage (%)Presence Percentage (%) 9595 9898 9191 8989 9696 9595 9494 9494

RankingRanking 33 11 55 66 22 33 44 44

Average of Presence (%)Average of Presence (%) 8585 9292 7878 7676 8888 8585 8282 8282

Add-ons?????Add-ons????? 77 88 66 5-5- 99 88 77 77

42


Ease/Difficulty to accessEase/Difficulty to access Website 1-10Website 1-10

77 99 88 99 99 88 88 88

Aesthetics of Website 1-10Aesthetics of Website 1-10 66 88 77 99 88 99 66 88

Ease to Read & Understand 1-Ease to Read & Understand 1-1010

99 1010 88 99 99 99 77 99

From the above analysis it gives us a fair conclusion of PNB is third as compared to the otherFrom the above analysis it gives us a fair conclusion of PNB is third as compared to the other

banks in the services provided to the consumers in terms of internet banking. It has all thebanks in the services provided to the consumers in terms of internet banking. It has all the

facilities but needs to come up with more awareness of its service usage through internet.facilities but needs to come up with more awareness of its service usage through internet.

The general history and information about the bank is being well explained by PNB on the siteThe general history and information about the bank is being well explained by PNB on the site

whereas the financial information given by the other banks is more understandable as comparedwhereas the financial information given by the other banks is more understandable as compared

to PNB. It also lacks the appropriate links for the employment of new candidates that is it cannotto PNB. It also lacks the appropriate links for the employment of new candidates that is it cannot

be easily seen on the site as compared to other banks which has given a separate link for thebe easily seen on the site as compared to other banks which has given a separate link for the

employment or recruitment section on the main page of the site. The main site of the bank cannotemployment or recruitment section on the main page of the site. The main site of the bank cannot

be properly loaded on other web browser except internet explorer which may be a problem forbe properly loaded on other web browser except internet explorer which may be a problem for

the users of other browsers like Mozilla Firefox, Google Chrome etc.the users of other browsers like Mozilla Firefox, Google Chrome etc.

It provides the calculator facility which is being provided by at least every bank which helps theIt provides the calculator facility which is being provided by at least every bank which helps the

consumers to find out the EMI on the loan taken by them etc. it is also seen that the facilitiesconsumers to find out the EMI on the loan taken by them etc. it is also seen that the facilities

provided by PNB like bill payments, tax payments, giving donations, balance transfers, corporateprovided by PNB like bill payments, tax payments, giving donations, balance transfers, corporate

services etc are being well provided by the bank and is on par wi9th the other banks. services etc are being well provided by the bank and is on par wi9th the other banks. The portalThe portal

43


is linked to all the essential information such as financial information, community information,is linked to all the essential information such as financial information, community information,

local and non-local businesses. Wireless capabilities, search functions are found on the webpage.local and non-local businesses. Wireless capabilities, search functions are found on the webpage.

The site is very user friendly in terms of language change as it provides a facility of languageThe site is very user friendly in terms of language change as it provides a facility of language

change from English to Hindi, which helps the consumers who are less educated or who are notchange from English to Hindi, which helps the consumers who are less educated or who are not

well versed in reading English. well versed in reading English.

The internet banking facility provided by PNB is overall good as compared to the other banksThe internet banking facility provided by PNB is overall good as compared to the other banks

but requires a few changes in terms of its looks and ease in complexities which would attract thebut requires a few changes in terms of its looks and ease in complexities which would attract the

consumers to use more and more internet banking. consumers to use more and more internet banking. The aesthetics of the webpage are not veryThe aesthetics of the webpage are not very

pleasing.pleasing.

44


Mobile Banking:Mobile banking in PNB is a product which was recently introduced on 12Mobile banking in PNB is a product which was recently introduced on 12 thth Feb, 2010. Being a Feb, 2010. Being a

newly launched product it has covered a lot of points which are very beneficial to the corporatesnewly launched product it has covered a lot of points which are very beneficial to the corporates

or individuals of service class.or individuals of service class.

PNB Mobile Banking would enable PNB customers in accessing banking servicesPNB Mobile Banking would enable PNB customers in accessing banking services

anytime/anywhere on-the-move through mobile phones. It is compatible with popular mobileanytime/anywhere on-the-move through mobile phones. It is compatible with popular mobile

devices across most GSM & CDMA operators with easy to operate features. devices across most GSM & CDMA operators with easy to operate features.

The Mobile Banking Services are being offered in line with the guidelines of the Reserve BankThe Mobile Banking Services are being offered in line with the guidelines of the Reserve Bank

of India. PNB Mobile Banking offers services like checking account balances, transfer of funds,of India. PNB Mobile Banking offers services like checking account balances, transfer of funds,

stop-payment of cheques, request for a cheque book and many more add-ons features. stop-payment of cheques, request for a cheque book and many more add-ons features.

Comparing the mobile banking services of PNB with other banks. It has all the basic amenitiesComparing the mobile banking services of PNB with other banks. It has all the basic amenities

of mobile banking but since it is at its infant stage, it requires a lot of improvements. of mobile banking but since it is at its infant stage, it requires a lot of improvements.

When the services are being compared to the banks, we have compared it on the basis of threeWhen the services are being compared to the banks, we have compared it on the basis of three

parametersparameters

1.1. Services provided for bank accountsServices provided for bank accounts

2.2. Services provided for credit cardsServices provided for credit cards

3.3. Other servicesOther services

45


Services provided for:

Bank Bank AccounAccountt

FundsFunds TransferTransfer

BillBill PaymentPayment

BalanceBalance EnquiryEnquiry

Last 5Last 5 paymentpayment

ChequeCheque BookBook

RequestRequest

StopStop ChequeCheque RequestRequest

ChequeCheque StatusStatus

EnquiryEnquiry

ChangingChanging Login andLogin and

TransactionTransaction PasswordPassword

ThirdThird PartyParty

TransferTransfer of fundsof funds

NewNew I-pinI-pin

PNBPNB

SBISBI

AxisAxis

BOBBOB

HDFCHDFC

ICICIICICI

StandardStandard charteredchartered

CitibankCitibank

On comparing the banks we get to know that PNB has all sorts of individual/ corporate facility ofOn comparing the banks we get to know that PNB has all sorts of individual/ corporate facility of

keeping a track of the account, balance enquiry, checque book etc. Some of the banks do notkeeping a track of the account, balance enquiry, checque book etc. Some of the banks do not

have these services, which is giving an edge to the banhave these services, which is giving an edge to the bank. It shows that the bank is very particular

about its conusmers getting the major accounting facilities. It also shows the professional attitude of the

bank which is very particular about its consumers which majorly belong to the middle income group

section.

Credit cardCredit card Balance DetailsBalance Details Last Payment DetailsLast Payment Details Payment Due DatePayment Due Date

PNBPNB

SBISBI

AxisAxis

BOBBOB

HDFCHDFC

ICICIICICI

Standard charteredStandard chartered

CitibankCitibank

46


The major features that a conusmer would like to know when he swaps his credit card is howThe major features that a conusmer would like to know when he swaps his credit card is how

much he has used and what he has paid to cover his dues much he has used and what he has paid to cover his dues and when he has paid the dues. Here PNB

lacks in this segment, being an infant it has not yet covered the credit card and other sections. Whereas

the other banks like the private sector banks HDFC, ICICI and the foreign banks like Standard chartered

bank and Citibank have all these facilities to cater its target audience.

OtherOther servicesservices

Movie Movie ticket ticket booking booking

Prepaid Prepaid Mobile Mobile RechargeRecharge

Locate Locate BranchBranch

Locate Locate ATMATM

Phone Phone Banking Banking NumberNumber

Apply for BankApply for Bank ProductsProducts

Status of Service Status of Service Request RaisedRequest Raised

PNBPNB SBISBI

AxisAxis

BOBBOB

HDFCHDFC

ICICIICICI

StandardStandard charteredchartered

CitibankCitibank

Coming on to the other services, PNB lacks in this section completely. The reason being theComing on to the other services, PNB lacks in this section completely. The reason being the

same, since it is newly launched, it would take some time to come at par with the other banks.same, since it is newly launched, it would take some time to come at par with the other banks.

All these facilities are more for youngsters or the new employees who like to do things fasterAll these facilities are more for youngsters or the new employees who like to do things faster

which helps them to save both time and energy and also it gives them a lot of facilities. Thiswhich helps them to save both time and energy and also it gives them a lot of facilities. This

section too is being well established by other banks making more space in their pockets for thesection too is being well established by other banks making more space in their pockets for the

new consumers.new consumers.

47


ATMs

Punjab National Bank ATMs are one of the ATMs which are used by a large number ofPunjab National Bank ATMs are one of the ATMs which are used by a large number of

people because the ATMs are located in all the major cities of India. The Punjab National Bankpeople because the ATMs are located in all the major cities of India. The Punjab National Bank

ATMs are located in Delhi, Kolkata, Chennai, Mumbai, Bangalore, Hyderabad, Pune, Gurgaon,ATMs are located in Delhi, Kolkata, Chennai, Mumbai, Bangalore, Hyderabad, Pune, Gurgaon,

Uttar Pradesh as well as Ghaziabad. The Punjab National Bank ATMs are one of the wellUttar Pradesh as well as Ghaziabad. The Punjab National Bank ATMs are one of the well

equipped ATMs thereby it has become extremely easier for the people to withdraw cash. It isequipped ATMs thereby it has become extremely easier for the people to withdraw cash. It is

also easier to operate the Punjab National Bank ATMs as well.also easier to operate the Punjab National Bank ATMs as well.

The Punjab National Bank ATMs are known for the large number of facilities that itThe Punjab National Bank ATMs are known for the large number of facilities that it

offers to its customers. The Punjab National Bank ATMs are opened all the year round on aoffers to its customers. The Punjab National Bank ATMs are opened all the year round on a

24X7 basis. The ATMs are not closed even on the holidays. Thus you can access your account as24X7 basis. The ATMs are not closed even on the holidays. Thus you can access your account as

and when you require it. Cash withdrawals have been thus made extremely easier because ofand when you require it. Cash withdrawals have been thus made extremely easier because of

this. The Punjab National Bank ATMs are located at all the important parts of the cities such asthis. The Punjab National Bank ATMs are located at all the important parts of the cities such as

near the hospital, market places, major offices and others. Thus, you will not have to carry hardnear the hospital, market places, major offices and others. Thus, you will not have to carry hard

cash with you whenever you go out. Thus it has extremely safe as well. Both the credit cards ascash with you whenever you go out. Thus it has extremely safe as well. Both the credit cards as

well as the debit cards offered by the Punjab national bank can be used in any of the Punjabwell as the debit cards offered by the Punjab national bank can be used in any of the Punjab

National Bank ATMs. They can be used in other ATMs as well. The banks have made up suchNational Bank ATMs. They can be used in other ATMs as well. The banks have made up such

tie ups with other banks in order to provide the best facilities to the customers.tie ups with other banks in order to provide the best facilities to the customers.

The Punjab National Bank ATMs you can also deposit the cheques. The Punjab NationalThe Punjab National Bank ATMs you can also deposit the cheques. The Punjab National

Bank ATMs are one of the best in terms of security. So your cheques will be properly deposited.Bank ATMs are one of the best in terms of security. So your cheques will be properly deposited.

When you withdraw cash from the Punjab National Bank ATMs, do not forget to collect theWhen you withdraw cash from the Punjab National Bank ATMs, do not forget to collect the

card, money as well as the mini statement they offer. This will help you keep a track of yourcard, money as well as the mini statement they offer. This will help you keep a track of your

transactions. Once you visit the Punjab National Bank ATMs, you will be able to know moretransactions. Once you visit the Punjab National Bank ATMs, you will be able to know more

48


about the limits of cash that you can withdraw from the ATM at one go. Thus withdrawing cashabout the limits of cash that you can withdraw from the ATM at one go. Thus withdrawing cash

has become extremely easier with the Punjab National Bank ATMs.has become extremely easier with the Punjab National Bank ATMs.

Comparison with other banks:

No of ATMsNo of ATMs

SBI is the largest ATM provider which owns 16,294 ATMs all over India. This number excludesSBI is the largest ATM provider which owns 16,294 ATMs all over India. This number excludes

the group ATMs. As compared to the other banks PNB has less number of ATMs which meansthe group ATMs. As compared to the other banks PNB has less number of ATMs which means

that it needs to widen its spread of ATMs inorder to make it comfortable for the consumers sothat it needs to widen its spread of ATMs inorder to make it comfortable for the consumers so

that they can use the services in the PNB ATMs itself.that they can use the services in the PNB ATMs itself.

49


Common Features:

BalanceBalance

InquiryInquiry

CashCash

WithdrawalsWithdrawals

PINPIN

changechange

MiniMini

StatementStatement

Credit cardCredit card

paymentpayment

PayPay

utilityutility

billsbills

ChequeCheque

depositdeposit

OrderOrder

chequecheque

bookbook

SBISBI

PNBPNB

AxisAxis

BOBBOB

HDFCHDFC

ICICIICICI

StandardStandard

CharteredChartered

CitibankCitibank

Uncommon Features

MutualMutual fundfund

paymentpayment

InsuranceInsurance premiumpremium

PayPay donationsdonations

InternetInternet packspacks

FlexiFlexi top-upstop-ups

MoneyMoney transfertransfer betweenbetween

linkedlinked accountsaccounts

RechargeRecharge mobilemobile phonesphones

MakeMake paymentpayment

forfor purchasespurchases

SBISBI PNBPNB

AxisAxis

BOBBOB

HDFCHDFC

50


ICICIICICI StandardStandard CharteredChartered

CitibankCitibank

We see that PNB provides the basic services of ATMs as compared to other banks, especiallyWe see that PNB provides the basic services of ATMs as compared to other banks, especially

ICICI and Standard Chartered Bank who have provided variety of services through ATMs. TheyICICI and Standard Chartered Bank who have provided variety of services through ATMs. They

have not yet entered the advanced stage of the ATMs where the other banks are providing morehave not yet entered the advanced stage of the ATMs where the other banks are providing more

advanced services giving an edge to their services.advanced services giving an edge to their services.

51


Merchant Establishments:

To use smart cards/debit cards/credit cards for the purchase of an item or for payment ofTo use smart cards/debit cards/credit cards for the purchase of an item or for payment of

a service at a merchant's store, the card has to be swiped in a terminal (known as Point of Sale ora service at a merchant's store, the card has to be swiped in a terminal (known as Point of Sale or

POS terminal) kept at the merchant's store. As soon as the card is put on the terminal, the detailsPOS terminal) kept at the merchant's store. As soon as the card is put on the terminal, the details

of the card are transmitted through dial-up or leased lines to a host computer. On verification ofof the card are transmitted through dial-up or leased lines to a host computer. On verification of

the genuineness of the card, the transaction is authorised and concluded. It is thus a means tothe genuineness of the card, the transaction is authorised and concluded. It is thus a means to

'check out' whether the cardholder is authorized to make a transaction using the card. POS'check out' whether the cardholder is authorized to make a transaction using the card. POS

terminal is a relatively new concept.terminal is a relatively new concept.

A Point of Sale (PoS) terminal is an integrated PC-based device, with a monitor (CRT),A Point of Sale (PoS) terminal is an integrated PC-based device, with a monitor (CRT),

PoS keyboard, PoS printer, Customer Display, Magnetic Swipe Reader and an electronic cashPoS keyboard, PoS printer, Customer Display, Magnetic Swipe Reader and an electronic cash

drawer all rolled into one. More generally, the POS terminal refers to the hardware and softwaredrawer all rolled into one. More generally, the POS terminal refers to the hardware and software

used for checkouts. In recent years, banks are making efforts to acquire Point of Sale (PoS)used for checkouts. In recent years, banks are making efforts to acquire Point of Sale (PoS)

terminals at the premises of merchants across the country as a relatively new source of income.terminals at the premises of merchants across the country as a relatively new source of income.

'Acquiring' a POS terminal means installing a POS terminal at the merchant premises. 'Acquiring' a POS terminal means installing a POS terminal at the merchant premises.

52


ICICI bank is again the market leader in POS terminals. These are owned by the banksICICI bank is again the market leader in POS terminals. These are owned by the banks

themselves and not shared between them. If we look at the shared POS terminals the number forthemselves and not shared between them. If we look at the shared POS terminals the number for

each bank would go above 2.5 lakhs. each bank would go above 2.5 lakhs.

53


Credit cardsCredit cards have been in India for well over two and half decades. Over the last fiveCredit cards have been in India for well over two and half decades. Over the last five

years though, they have literally taken over the market and then came down due to increase inyears though, they have literally taken over the market and then came down due to increase in

number of debit card usage. The transactions through debit cards jumped by 42 per cent at Rsnumber of debit card usage. The transactions through debit cards jumped by 42 per cent at Rs

26,418 Cr in the last fiscal from Rs 18,547 Cr in 2008-09, it slipped by 4 per cent for credit cards26,418 Cr in the last fiscal from Rs 18,547 Cr in 2008-09, it slipped by 4 per cent for credit cards

to Rs 62,852 Cr from Rs 65,356 Cr. The total number of credit cards went down to 23.4 Cr into Rs 62,852 Cr from Rs 65,356 Cr. The total number of credit cards went down to 23.4 Cr in

2009-10 from 25.9 Cr in 2008-09.2009-10 from 25.9 Cr in 2008-09.

Downturn in the economy was the major reason for negative trend in credit cards.Downturn in the economy was the major reason for negative trend in credit cards.

“During the slowdown, banks became cautious in issuing new credit cards to check defaults.“During the slowdown, banks became cautious in issuing new credit cards to check defaults.

Also, last year many lost their jobs which led to the decline in spending through credit cardsAlso, last year many lost their jobs which led to the decline in spending through credit cards

Total credit cards sold in the market:

54


ICICI is the clear market leader in this segment with almost 29% of the credit cards sold.ICICI is the clear market leader in this segment with almost 29% of the credit cards sold.

Whereas PNB is merely 1% of the whole credit card segments which points out towardsWhereas PNB is merely 1% of the whole credit card segments which points out towards

necessities for improvement and coming up with more new cards and types so that it attractsnecessities for improvement and coming up with more new cards and types so that it attracts

more consumers.more consumers.

55


Types of cards of the banks in the market:

The banks which are being analysed above show that ICICI bank has clearly turned out to be theThe banks which are being analysed above show that ICICI bank has clearly turned out to be the

market leader in the credit cards section with almost 60 credit cards in the market. Whereas PNBmarket leader in the credit cards section with almost 60 credit cards in the market. Whereas PNB

being the new entrant has a lot more to cover in order to gain some share in the market. being the new entrant has a lot more to cover in order to gain some share in the market.

56


Interest free credit days (Grace Period)

The second major important thing to attract the consumer is if they fail to pay their credit cardThe second major important thing to attract the consumer is if they fail to pay their credit card

bills on time how many days more they will get. Here all the banks including PNB have a similarbills on time how many days more they will get. Here all the banks including PNB have a similar

credit period except the foreign banks which have less credit period. For PNB the credit periodcredit period except the foreign banks which have less credit period. For PNB the credit period

range is 20-50 days whereas for Citibank its only 30 days.range is 20-50 days whereas for Citibank its only 30 days.

Annual Fee

57


The annual fees of using a credit card is variable among the banks. The graph shows theThe annual fees of using a credit card is variable among the banks. The graph shows the

maximum annual fees charged by the banks. Here PNB does not charge any annual fees whereasmaximum annual fees charged by the banks. Here PNB does not charge any annual fees whereas

the highest fee charged is by Standard Chartered which charges annual fees from Rs 0 to Rsthe highest fee charged is by Standard Chartered which charges annual fees from Rs 0 to Rs

6000. The annual6000. The annual fees charged by thefees charged by the

banks changes asbanks changes as per their credit cards.per their credit cards.

Joining Fees

The joining fee is the intial fees that has to be paid before becoming the card holder of the bank.The joining fee is the intial fees that has to be paid before becoming the card holder of the bank.

The graph shows the maximum annual fees charged by the banks. Here again PNB does notThe graph shows the maximum annual fees charged by the banks. Here again PNB does not

charge any joining fees whereas the highest joining fee is charged by ICICI bank of about Rscharge any joining fees whereas the highest joining fee is charged by ICICI bank of about Rs

25000.The joining fees also changes with the change in the type of credit card in the bank.25000.The joining fees also changes with the change in the type of credit card in the bank.

58


Other Features

PNBPNB SBISBI AxisAxis BOBBOB HDFCHDFC ICICIICICI StandardStandard CharteredChartered CitibankCitibank

Rewards:Rewards: Photo Card Photo Card Fee:Fee:

Balance Balance Transfer Fee:Transfer Fee:

Add On Card Add On Card Fee:Fee:

Balance Balance TransferTransfer

1% or Rs 1991% or Rs 199 whichever is whichever is higherhigher

2% 2% processing processing fee or Rs fee or Rs 199 199 whichever whichever is higheris higher




YesYes YesYes

Card Card replacement replacement feefee

Rs 100Rs 100 Rs 100Rs 100 NilNil Rs 100Rs 100 Rs 100Rs 100 Rs 100Rs 100 NilNil NilNil

Pin Pin replacement replacement feefee

Rs 50Rs 50

Late Late payment feepayment fee

30% of 30% of minimum minimum amount amount outstanding, outstanding, subject to subject to min. of Rs. min. of Rs. 400 and 400 and max. of Rs. max. of Rs. 500500

Nil to Rs Nil to Rs 700700

30% of the 30% of the total total amount amount due(Min. due(Min. Rs. 350 & Rs. 350 & Max 600)Max 600)

Rs 100Rs 100 VariableVariable

30% of 30% of minimum minimum amount amount outstanding, outstanding, subject to subject to min. of Rs. min. of Rs. 400 and 400 and max. of Rs. max. of Rs. 600600

VariableVariable VariableVariable

Fuel Fuel SurchargeSurcharge

Min. Rs.10 orMin. Rs.10 or 2.5% on 2.5% on transaction <transaction < Rs.400 Rs.400 &>3000- .&>3000- .

Nil to 2.5% Nil to 2.5% or Rs 10 or Rs 10 whichever whichever is higheris higher

0%0%

Nil to 2.5% Nil to 2.5% or Rs.10 or Rs.10 whichever whichever isishigherhigher

2.5% or 2.5% or Rs.10 Rs.10 whichever is whichever is higherhigher

2.5% or 2.5% or Rs.10 Rs.10 whichever whichever is higheris higher

2.5% or 2.5% or Rs.10 Rs.10 whichever whichever is higheris higher

59


Insurance Insurance BenefitsBenefits

The credit cards also have various features which are being taken into considerstion for example,The credit cards also have various features which are being taken into considerstion for example,

what if the card is lost or is misused would my credit card be safe? Or I have to pay for thewhat if the card is lost or is misused would my credit card be safe? Or I have to pay for the

misuse done? The answer to this is being given by all the banks that if the card gets lost ormisuse done? The answer to this is being given by all the banks that if the card gets lost or

misused, it has the insirance cover upto certain amount. This facility is being given by all themisused, it has the insirance cover upto certain amount. This facility is being given by all the

banks. As far as other insurance benefits are concerned, PNB does not provide any otherbanks. As far as other insurance benefits are concerned, PNB does not provide any other

insurance facility on the card unlike others. All the others provide insurance facilities like airinsurance facility on the card unlike others. All the others provide insurance facilities like air

accident insurance, life insurance, health insurance etc, giving the consumers a reason to useaccident insurance, life insurance, health insurance etc, giving the consumers a reason to use

their credit cards. Other features like add on card fees, late payment fees etc are almost similartheir credit cards. Other features like add on card fees, late payment fees etc are almost similar

with other banks. with other banks.

It is also being noticed that the banks have tied-up with many companies for marketing mutuallyIt is also being noticed that the banks have tied-up with many companies for marketing mutually

called as co-branding which PNB is lacking. ICICI being the market leader has tied-up withcalled as co-branding which PNB is lacking. ICICI being the market leader has tied-up with

many companies in airlines sector, hotel chains, other banks, Indian oil company etc, which hasmany companies in airlines sector, hotel chains, other banks, Indian oil company etc, which has

provided it an edge as compared to others. Inorder to create a mark in the market, PNB needs toprovided it an edge as compared to others. Inorder to create a mark in the market, PNB needs to

come up with more new innovative ideas like giving out more reward points, introducing morecome up with more new innovative ideas like giving out more reward points, introducing more

cards which would cover major points of good credit facility, lower fees and charges, goodcards which would cover major points of good credit facility, lower fees and charges, good

discounts for purchases, facilities like balance transfer, insurance cover etc to be availed so thatdiscounts for purchases, facilities like balance transfer, insurance cover etc to be availed so that

counsumers are attracted and impressed while buying the services of credit cards.counsumers are attracted and impressed while buying the services of credit cards.

60


DEBIT CARDSDebit cards are the faster growing card-based payment segment in India, given the credit-Debit cards are the faster growing card-based payment segment in India, given the credit-

averse nature of many consumers. Debit cards made their entry in India late 1998. Due to theaverse nature of many consumers. Debit cards made their entry in India late 1998. Due to the

nature of the product (buy now, pay now), it has experienced exponential growth.nature of the product (buy now, pay now), it has experienced exponential growth. Indians areIndians are

using more of debit cards than credit cards for their banking transactions, says the Reserve Bank of Indiausing more of debit cards than credit cards for their banking transactions, says the Reserve Bank of India

(RBI) data for the year ended 2009-10. While the transactions through debit cards jumped by 42 per cent(RBI) data for the year ended 2009-10. While the transactions through debit cards jumped by 42 per cent

at Rs 26,418 Cr in the last fiscal from Rs 18,547 Cr in 2008-09, it slipped by 4 per cent for credit cards toat Rs 26,418 Cr in the last fiscal from Rs 18,547 Cr in 2008-09, it slipped by 4 per cent for credit cards to

Rs 62,852 Cr from Rs 65,356 Cr. Rs 62,852 Cr from Rs 65,356 Cr. In the same period, the number of debit cards in circulation hasIn the same period, the number of debit cards in circulation has

also increased by 33 per cent as compared to a fall in credit card circulation by 10 per cent overalso increased by 33 per cent as compared to a fall in credit card circulation by 10 per cent over

the previous year. the previous year. The total number of debit cards increased to 17 Cr in 2009-10 from 12.8 Cr inThe total number of debit cards increased to 17 Cr in 2009-10 from 12.8 Cr in

2008-092008-09. .

In April this year, debit card payments increased to Rs 2,508 crore from Rs 1,778 crore inIn April this year, debit card payments increased to Rs 2,508 crore from Rs 1,778 crore in

the corresponding month last year, according to the central bank's monthly bulletin.the corresponding month last year, according to the central bank's monthly bulletin. TransactionsTransactions

made through these cards in the country rose to Rs 5,473 crore from Rs 4,932 crore in themade through these cards in the country rose to Rs 5,473 crore from Rs 4,932 crore in the

corresponding month of the previous fiscal.corresponding month of the previous fiscal.

Total debit cards sold in the market:

61


SBI is the clear market leader in this segment with almost 37% of the debit cards sold. WhereasSBI is the clear market leader in this segment with almost 37% of the debit cards sold. Whereas

PNB is 6% of the whole debit card segments which is better than the credit cards but still has aPNB is 6% of the whole debit card segments which is better than the credit cards but still has a

long way to go inorder to gain some substancial base in the market.long way to go inorder to gain some substancial base in the market.

No of cards:

Here too ICICI bank is the market leader with approximately 8 cards in the market. PNBHere too ICICI bank is the market leader with approximately 8 cards in the market. PNB

has three types of debit cards in the market which is less than ICICI bank. PNB needs to cater inhas three types of debit cards in the market which is less than ICICI bank. PNB needs to cater in

the segments of debit and credit cards so that it can cover a large portion of the mass consumers.the segments of debit and credit cards so that it can cover a large portion of the mass consumers.

PNB is also offering biometric debit cards which are specially launched for illiterates, soPNB is also offering biometric debit cards which are specially launched for illiterates, so

that they can also use the services as when require and progress towards a more easier way ofthat they can also use the services as when require and progress towards a more easier way of

living.Not many banks provide this type, which is providing an edge to the bank to promote theliving.Not many banks provide this type, which is providing an edge to the bank to promote the

card among the illiterates. card among the illiterates.

62


Biometric ATM Card:

• With this card, transaction is authorized based on the finger print of the customer. • With this card, transaction is authorized based on the finger print of the customer.

• The card will be used at Biometric ATM only with the use of fingerprint only.• The card will be used at Biometric ATM only with the use of fingerprint only.

• Daily withdrawal limit at ATM is Rs. 10000/-.• Daily withdrawal limit at ATM is Rs. 10000/-.

63


Other Features:

PNBPNB SBISBI AxisAxis BOBBOB HDFCHDFC ICICIICICI Standard Standard

CharteredChartered

CitibankCitibank

Cash Cash

withdrawal withdrawal

limitlimit

25000-25000-

100000100000

5000050000 5000050000 1500015000 Variable as Variable as

per cardper card

VariableVariable

as per as per

cardcard

Rs 15000Rs 15000 7500075000

Annual feeAnnual fee Rs 100 Rs 100

p.ap.a

NilNil Rs 250 to Rs Rs 250 to Rs

500 p.a500 p.a

FreeFree Rs Rs

100/250/500100/250/500

Rs 200-Rs Rs 200-Rs

799799

Nil to Rs Nil to Rs

600600

Balance Balance

transfer feetransfer fee

NilNil NilNil NilNil FreeFree NilNil NilNil NilNil

Add on card Add on card

feefee

Rs 50Rs 50 NilNil NilNil FreeFree Rs Rs

100/250/500100/250/500

NilNil NilNil

Card Card

replacement replacement

feefee

Rs 100Rs 100 Rs 200Rs 200 Rs Rs

100/250/500100/250/500

Rs Rs

169169

Rs 100Rs 100 Rs 200-Rs 200-

Rs799Rs799

Rs 100Rs 100

Other bank Other bank

ATM chargesATM charges

Rs 25Rs 25 Rs 50Rs 50 FreeFree FreeFree Rs 20Rs 20 Rs 50Rs 50 Rs 50Rs 50

Overseas Overseas

ATM chargeATM charge

Rs 150Rs 150 Rs 150Rs 150 Rs 125Rs 125 Rs Rs

141141

Rs 110Rs 110 Rs 140Rs 140 US $2.50/US $2.50/

transactiontransaction

Duplicate PINDuplicate PIN Rs 25Rs 25 Rs 25Rs 25 Rs 50Rs 50 Rs Rs

113113

Rs 25Rs 25 Rs 50Rs 50 Rs 50Rs 50

The annual fee charged by PNB is very less as compared to the other banks. Whereas the other The annual fee charged by PNB is very less as compared to the other banks. Whereas the other

transactions charges are somewhat similar to the banks. So in debit cards it is on par in features transactions charges are somewhat similar to the banks. So in debit cards it is on par in features

with the other banks. with the other banks.

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Findings &Findings &

ConclusionConclusion

65


As per the research conducted, it is to be noticed a good sector of the people prefer to beAs per the research conducted, it is to be noticed a good sector of the people prefer to be

customers of nationalized banks. This result can be very well explained by the fact thatcustomers of nationalized banks. This result can be very well explained by the fact that

nationalized banks are acquainted with the Government and that ups and downs innationalized banks are acquainted with the Government and that ups and downs in

business will not affect the existence of the bank. Also the RBI too has good control overbusiness will not affect the existence of the bank. Also the RBI too has good control over

the working of these banks and there for the customers feel a sense of security inthe working of these banks and there for the customers feel a sense of security in

investing in these banks. However it is also seen that a good percentage of people alsoinvesting in these banks. However it is also seen that a good percentage of people also

opt for private banks such as ICICI, bearing in mind the amount of experience theyopt for private banks such as ICICI, bearing in mind the amount of experience they

posses in the field of banking. These private banks, even though living with nationalizedposses in the field of banking. These private banks, even though living with nationalized

banks, which have the lion’s share, appear to be huge market players and market turners.banks, which have the lion’s share, appear to be huge market players and market turners.

The range of products of HDFC, ICICI, is much more than that of Punjab National BankThe range of products of HDFC, ICICI, is much more than that of Punjab National Bank

that’s why people want to use the credit or debit cards or have relation with these twothat’s why people want to use the credit or debit cards or have relation with these two

banks as they can find all their financial needs under a single roof.banks as they can find all their financial needs under a single roof.

On a global scale technological innovations have been the main reasons for InternationalOn a global scale technological innovations have been the main reasons for International

banks to become market drivers and leaders, but the same cannot be said about India.banks to become market drivers and leaders, but the same cannot be said about India.

Here improvement of technology has not yet played over the minds of the people. It canHere improvement of technology has not yet played over the minds of the people. It can

be said that only the higher society of the Indian population would consider technologicalbe said that only the higher society of the Indian population would consider technological

innovations to be very important in terms of deciding the importance of the bank. Theinnovations to be very important in terms of deciding the importance of the bank. The

other parts of India would hardly consider it to be reason in selecting the bank.other parts of India would hardly consider it to be reason in selecting the bank.

Keeping in mind the above analysis it is noticed that consumers are not even aware of theKeeping in mind the above analysis it is noticed that consumers are not even aware of the

different services provided by the Punjab National bank. Mobile banking and net bankingdifferent services provided by the Punjab National bank. Mobile banking and net banking

were Greek and Latin to them. Such people would not keep technology in mind to selectwere Greek and Latin to them. Such people would not keep technology in mind to select

the bank. But on the other hand the people who understand the importance of technologythe bank. But on the other hand the people who understand the importance of technology

recognized the various services that are provided and also mentioned that technologyrecognized the various services that are provided and also mentioned that technology

today in India has made banking easier. However a huge section of the people knows thetoday in India has made banking easier. However a huge section of the people knows the

66


importance of an ATM or Credit cards, but the service provision for these products wasimportance of an ATM or Credit cards, but the service provision for these products was

not found to be up to the mark.not found to be up to the mark.

Installation of M-commerce is still to be done on the mobile phone by PNB, whereas newInstallation of M-commerce is still to be done on the mobile phone by PNB, whereas new

credit and debit cards are the need of the hour for the bank in order to attract morecredit and debit cards are the need of the hour for the bank in order to attract more

consumers.consumers.

PNB is the number one nationalized bank but its major chunk of consumers comes fromPNB is the number one nationalized bank but its major chunk of consumers comes from

semi-urban and rural areas. It has followed the mission and vision of providing bankingsemi-urban and rural areas. It has followed the mission and vision of providing banking

services to the unbanked but it also need to cater to the need of urban consumers whoservices to the unbanked but it also need to cater to the need of urban consumers who

have a lot of faith in the Public Sector Banks.have a lot of faith in the Public Sector Banks.

Since the mobile banking services are newly introduced it would take time to come onSince the mobile banking services are newly introduced it would take time to come on

par with the other banks but the earlier it caters to it the more it’s good for the bank.par with the other banks but the earlier it caters to it the more it’s good for the bank.

Awareness about the products has to be made in order to make the consumers understandAwareness about the products has to be made in order to make the consumers understand

what the bank is providing to them.what the bank is providing to them.

Still today there is a section of target consumers who are customers of the bank but theyStill today there is a section of target consumers who are customers of the bank but they

don’t know about mobile banking, internet banking etc, what they know is the traditionaldon’t know about mobile banking, internet banking etc, what they know is the traditional

way of banking i.e. coming to the branch from their homes, depositing their cheques orway of banking i.e. coming to the branch from their homes, depositing their cheques or

cash etc. The use of ATMs still is unknown to them.cash etc. The use of ATMs still is unknown to them.

Technology is advancing with a greater speed and PNB needs to implement it in order toTechnology is advancing with a greater speed and PNB needs to implement it in order to

be with the market.be with the market.

The customer services, traditional products of the bank, the ambience everything is veryThe customer services, traditional products of the bank, the ambience everything is very

good which has made it reach at this level today, in order to become the best and firstgood which has made it reach at this level today, in order to become the best and first

preference of the consumers it needs to fulfill the technological needs of the consumers.preference of the consumers it needs to fulfill the technological needs of the consumers.

To sum up what can be said about PNB is it is still on a growth stage as it is introducingTo sum up what can be said about PNB is it is still on a growth stage as it is introducing

new credit and debit cards (platinum cards) and infant stage for mobile banking services.new credit and debit cards (platinum cards) and infant stage for mobile banking services.

In mobile banking it has a long way to go, whereas for internet banking, it is developedIn mobile banking it has a long way to go, whereas for internet banking, it is developed

but needs modification in its services being offered.but needs modification in its services being offered.

67


The reach of ATMs for the consumers has to be grown in order to make consumersThe reach of ATMs for the consumers has to be grown in order to make consumers

utilize their cards more.utilize their cards more.

68


Some important terms to be known:

RTGS:RTGS:

Real time gross settlementReal time gross settlement systems (RTGS) are funds transfer systems where transfer of systems (RTGS) are funds transfer systems where transfer of

money takes place from one bank to another on a "real time" and on "gross" basis. Settlement inmoney takes place from one bank to another on a "real time" and on "gross" basis. Settlement in

"real time" means payment transaction is not subjected to any waiting period. The transactions"real time" means payment transaction is not subjected to any waiting period. The transactions

are settled as soon as they are processed. "Gross settlement" means the transaction is settled onare settled as soon as they are processed. "Gross settlement" means the transaction is settled on

one to one basis without bunching or netting with any other transaction. Once processed,one to one basis without bunching or netting with any other transaction. Once processed,

payments are final and irrevocable.payments are final and irrevocable.

NEFT:NEFT:

The The NEFT (National Electronic Fund Transfer) NEFT (National Electronic Fund Transfer) Service helps in the seamless transferService helps in the seamless transfer

of funds from one branch to another without any delays or procedural hassles. Like RTGS, RBIof funds from one branch to another without any delays or procedural hassles. Like RTGS, RBI

has introduced another type of funds transfer system called NEFT (National Electronic Fundshas introduced another type of funds transfer system called NEFT (National Electronic Funds

Transfer). The operations and functions of the system are similar to RTGS.Transfer). The operations and functions of the system are similar to RTGS. RBI has introducedRBI has introduced

NEFT system mainly to send small value payments at nominal cost. We can send funds from ourNEFT system mainly to send small value payments at nominal cost. We can send funds from our

bank to other bank-branches, which have IFS Code, and joined in NEFT network.bank to other bank-branches, which have IFS Code, and joined in NEFT network.

69


Bibliography

WebsitesWebsites

www.google.comwww.google.com

www.rbi.orgwww.rbi.org

www.banknetindia.comwww.banknetindia.com

www.thehindubusinessline.comwww.thehindubusinessline.com

www.pnbindia.comwww.pnbindia.com

Official sites of all banksOfficial sites of all banks

Books/Journals/BulletinsBooks/Journals/Bulletins

Banking FinanceBanking Finance

RBI BulletinRBI Bulletin

Economic TimesEconomic Times

70

http://www.pnbindia.com/

http://www.rbi.org/

PNB

Documents

centralized

minimum amount

specialized

debit cards

virtual debit

loadable debit

data collection

charter ed