CHAPTER-1

INRODUCTION
A.)COMPANY PROFILE
With over 60 million satisfied customers and more than 5100 offices including 5 overseas branches, PNB has continued to retain 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 service brands, PNB has remained fully committed to its guiding principles of sound and prudent banking. Apart from offering banking products, the bank has also entered the credit card, debit card; bullion business; life and non-life insurance; Gold coins & asset management business, etc. PNB has earned many awards and accolades during the year in appreciation of excellence in services, Corporate Social Responsibility (CSR) practices, transparent governance structure, best use of technology and good human resource management. Since its humble beginning in 1895 with the distinction of being the first Swadeshi Bank to have been started with Indian capital, PNB has achieved significant growth in business which at the end of March 2011 amounted to Rs 5,55,005 crore. PNB is ranked as the 2nd largest bank in the country after SBI in terms of branch network, business and many other parameters. During the FY 2010-11, with 39.16% share of CASA to domestic deposits, the Bank achieved a net profit of Rs 4433 crore. Bank has a strong capital base with capital adequacy ratio of 12.42% as on Mar11 as per Basel II with Tier I and Tier II capital ratio at 8.44% and 3.98% respectively. As on March11, the Bank has the Gross and Net NPA ratio of 1.79% and 0.85% respectively. During the FY 2010-11, its

ratio of Priority Sector Credit to Adjusted Net Bank Credit at 40.67% & Agriculture Credit to Adjusted Net Bank Credit at 19.30% was also higher than the stipulated requirement of 40% & 18% respectively. The Bank has been able to maintain its stakeholders interest by posting an improved NIM of 3.96% in Mar11 (3.57% Mar10). The Earning per Share improved to Rs 140.60 (Rs 123.86 Mar10) while the Book value per share improved to Rs 661.20 (Rs 514.77 Mar10). 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 number of branches, Deposit, Advances, total Business, Assets, Operating and Net profit in the year 2010-11. The impressive operational and financial performance has been brought about by Banks 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.

B. HISTORY
Punjab National Bank was registered on 19 May 1894 under the Indian Companies Act with its office in Anarkali Bazaar Lahore. The founding board was drawn from different parts of India professing different faiths and a varied back-ground with, however, the common objective of providing country with a truly national bank which would further the economic interest of the country. PNB's founders included several leaders of the Swadeshi movement such as Dyal Singh Majithia and Lala HarKishen Lal, Lala Lalchand, Shri Kali Prosanna Roy, Shri E.C. Jessawala, Shri Prabhu Dayal, Bakshi Jaishi Ram, and Lala Dholan Dass. Lala Lajpat Rai was actively associated with the management of the 2

Bank in its early years. The board first met on 23 May 1894. Today, ironically the PNB Website is distorting history by claiming Lala Lajpat Rai to be the founding father, surpassing Rai Mul Raj and Dyal Singh Majithia. PNB has the distinction of being the first Indian bank to have been started solely with Indian capital that has survived to the present. (The first entirely Indian bank, the Oudh Commercial Bank, was established in 1881 in Faizabad, but failed in 1958). PNB has had the privilege of maintaining accounts of national leaders such as Mahatma Gandhi, Shri Jawahar Lal Nehru, Shri Lal Bahadur Shastri, Shrimati Indira Gandhi, as well as the account of the famous Jalianwala Bagh Committee. Punjab National Bank is currently the second largest state-owned commercial bank in India ahead of Bank of Baroda with about 5000 branches across 764 cities. It serves over 37 million customers. The bank has been ranked 248th biggest bank in the world by the Bankers Almanac, London. The bank's total assets for financial year 2007 were about US$60 billion. PNB has a banking subsidiary in the UK, as well as branches in Hong Kong, Dubai and Kabul, and representative offices in Almaty, Dubai, Oslo, and Shanghai.

C.ORGANIZATIONAL STRUCTURE
1. Board of Directors
NAME Shri K.R.Kamath Shri Rakesh Sethi Smt.Usha Anathasunramanian DIRECTORS Shri Anurag Jain Shri Jasbeer Singh Shri Vinod Kumar Mishra Shri Tribhuvan Nath Shri Pardeep Kumar POSITION Chairman & Managing Director and Dy. Chairman of Indian Banks Association Executive director Executive director

Govt. Of India nominee director Reserve bank of India nominee director Part time non official director Share holder director Office director

D) VISION AND MISSION:1. VISION To be amongst most trusted power utility company of the country by providing environment friendly power on most cost effective basis, ensuring prosperity for its stakeholders and growth with human face. 2. MISSION To ensure most cost effective power for sustained growth of India. To provide clean and green power for secured future of countrymen. To retain leadership position of the organization in Hydro Power generation, while working with dedication and innovation in every project we undertake.

To maintain continuous pursuit for cost effectiveness enhanced productivity for ensuring financial health of the organization, to take care of stakeholders aspirations continuously. To be a technology driven, transparent organization, ensuring dignity and respect for its team members. To inculcate value system all cross the organization for ensuring trustworthy relationship with its constituent associates & stakeholders. To continuously upgrade & update knowledge & skill set of its human resources. To be socially responsible through community development by leveraging resources and knowledge base. To achieve excellence in every activity we undertake.

E.ACHIEVEMENTS
1. PNB receives Best Bank Award 2011 2. Most Productive Public Sector Bank Award 2011 3. PNB Bags MSME National Awards 4. The Golden Peacock HR Excellence Award 5. Wind Power India 2011 Award 6. Pnb Awarded Best Technology Bank 2011 7. Outlook Money Award 2010 8. CSR Excellence Award 9. Skoch Challenge Award 10. India Pride Awards for excellence in PSU

F. Product and Services of Punjab National Bank

Since its inception, PNB Bank has offered a whole range of banking products and services hardly compared by few others. An important achievement of the bank is that all its branches are covered under Core Banking Solution thereby enabling customers to get 'anytime anywhere' banking facilities. Punjab National Bank also offers Internet Banking facilities to core banking branch customers. The bank provides a wide variety of products and services under personal banking, corporate banking, social banking, NRI banking and business banking facilities. Financial product and services made available are-: Personal Banking Savings Fund Account Total Freedom Salary Account Current Account PNB Smart Roamer Fixed Deposit Schemes Recurring Deposit Scheme Housing Loan Car Loan Personal Loan Education Loan Scheme Loan against Mortgage of Property Privilege Card Scheme Debit Card/ ATM Card Credit Card Social Banking Krishi Card Agriculture Credit Schemes 6

PNB Farmers Welfare Trust Scheme for House Wife and Other Women Mahila Udyam Nidhi Scheme Corporate Banking Loan against Future Lease Rentals EXIM Finance Cash Management Services Gold Card Scheme for Exporters

G.Profits of Last Five Years

particulars
Income operating income 29,804.40 Expenses material consumed manufacturing expenses personnel expenses selling expenses administrative expenses expenses capitalised cost of sales operating profit 4,461.10 39.68 3,611.34 8,112.12 6,513.14 3,121.14 40.11 2,377.28 5,538.52 6,042.24 436.59 6,478.82 12,944.02 222.83 2,924.38 31.24 1,880.13 4,835.76 4,776.35 553.00 5,329.35 12,295.30 191.06 2,461.54 23.31 1,247.47 3,732.33 3,462.46 231.62 3,694.08 8,730.86 170.23 2,352.45 18.03 1,360.77 3,731.25 2,350.09 186.67 2,536.76 6,022.91 194.80 24,524.78 21,907.42 15,925.65 12,104.24

Mar ' 11 Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07

other recurring income 644.16 adjusted pbdit financial expenses depreciation other write offs 7,157.30 15,179.14 255.85 -

particulars
adjusted PBT tax charges adjusted pat nonrecurring items

Mar ' 11 Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07
-8,277.69 2,130.23 4,430.44 3.05 6,256.00 1,999.43 3,902.94 2.42 3,905.36 3,913.00 693.67 116.43 -7,157.01 1,676.04 3,089.11 1.78 3,090.88 3,090.88 630.61 107.17 3,523.85 1,247.15 2,047.63 1.13 2,048.76 2,064.28 409.89 69.66 2,341.96 629.05 1,539.33 0.76 1,540.08 1,723.57 409.89 63.11

other non cash adjustments reported profit net 4,433.50

earnings before appropriation 4,433.50 equity dividend preference dividend dividend tax 696.99 113.07

H. Organizational Structure Of PNB

I. Competitors of PNB
Top 3 Competitors of Punjab National Bank are: 1. STATE BANK OF INDIA 2. ICICI 3. CANARA BANK 1. STATE BANK OF INDIA The State Bank of India (SBI) is the largest Indian banking and services company (by turnover and total assets) with its headquarters in Mumbai, India. It is state-owned. The bank traces its ancestry to British India, through the Imperial Bank of India, to the founding in 1806 of the Bank of Calcutta, making it the oldest commercial bank in the Indian. Bank of Madras merged into the other two presidency banks, Bank of Calcutta and Bank of Bombay to form Imperial Bank of India, which in turn became State Bank of India. The government of India nationalized the Imperial Bank of India in 1955, with the Reserve Bank of India taking a 60% stake, and renamed it the State Bank of India. In 2008, the government took over the stake held by the Reserve Bank of India. 2. ICICI ICICI Bank Ltd. (NSE: ICICIBANK, BSE: 532174, NYSE: IBN) is

India's second largest financial services company headquartered in Mumbai, India. It offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialized subsidiaries in the areas of investment banking, life and non-life insurance, venture capital and asset management. The Bank has a network of 2,533 branches and 6,800 ATMs in India, and has a presence in 19 countries, including India.

10

The bank has subsidiaries in the United Kingdom, Russia, and Canada; branches in United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International Finance Centre; and representative offices in United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia. The company's UK subsidiary has established branches in Belgium and Germany.

3. CANARA BANK
Canara Bank (BSE: 532483, NSE: CANBK) is a state-owned financial services company in India. It was established in 1906, making it one of the oldest banks in the country. As on 2009 November, the bank had a network of 3057 branches, spread across India. The bank also has offices abroad in London, Hong Kong, Moscow, Shanghai, Doha, and Dubai. Ammembal Subba Rao Pai, a philanthropist, established the Canara Hindu Permanent Fund in Mangalore, India, on 1 July 1906. The bank changed its name to Canara Bank Limited in 1910 when it incorporated. In 1958, the Reserve Bank of India ordered Canara Bank to acquire G. Raghumathmul Bank, in Hyderabad. This bank had been established in 1870, and had converted to a limited company in 1925. At the time of the acquisition G. Raghumathmul Bank had five branches. The Government of India nationalized Canara Bank, along with 13 other major commercial banks of India, on 19 July 1969.

11

J. SWOT ANALYSIS
STRENGTH
1. Diversified operations with 5100 branches 2. Strong I. T support with best fit approach 3. Schemes for small and medium scale businesses 4. It is the second largest state-owned commercial bank in India with about 5000 branches across 764 cities 5. Its 56,000+ workforce serves over 37 million customers

WEAKNESS
1. Less penetration in the urban areas 2. Inadequate advertising and branding as compared to other banks 3. Legal issues regarding employees caused a bad name of PNB

OPPOURTUNITY
1. Small scale business banking across India 2. Expansion in other countries for international banking 3. Installation of more ATMs and better customers services

THREATS
1. Economic crisis and economic fluctuations 2. Highly competitive environment 3. Stringent Banking Norms by the RBI and the Govts.

12

CHAPTER 2
FINANCIAL SERVICES
A. INSURANCE
Insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the insurance; an insured, or policyholder, is the person or entity buying the insurance policy. The insurance rate is a factor used to determine the amount to be charged for a certain amount of insurance coverage, called the premium. Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice. The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurer's promise to compensate (indemnify) the insured in the case of a financial (personal) loss. The insured receives a contract, called the insurance policy, which details the conditions and circumstances under which the insured will be financially compensated.

A.1 TYPES OF INSURANCE

Any risk that can be quantified can potentially be insured. Specific kinds of risk that may give rise to claims are known as perils. An insurance policy will set out in detail which perils are covered by the policy and which is not. Below are non-exhaustive lists of the many different types of insurance that exist. A single policy may cover risks in one or more of the categories set out below. For example, vehicle insurance would typically cover both the property risk (theft or damage to the vehicle) and the liability risk (legal claims arising from an accident). A home 13

insurance policy in the US typically includes coverage for damage to the home and the owner's belongings, certain legal claims against the owner, and even a small amount of coverage for medical expenses of guests who are injured on the owner's property. Business insurance can take a number of different forms, such as the various kinds of professional liability insurance, also called professional indemnity (PI), which are discussed below under that name; and the business owner's policy (BOP), which packages into one policy many of the kinds of coverage that a business owner needs, in a way analogous to how homeowners' insurance packages the coverages that a homeowner needs.

A.2 VEHICAL INSURANCE

Vehicle insurance (also known as auto insurance, gap insurance, car insurance, or motor insurance) is insurance purchased

for cars, trucks, motorcycles, and other road vehicles. Its primary use is to provide financial protection against physical damage and/or bodily injury resulting from traffic collisions and against liability that could also arise there from. The specific terms of vehicle insurance vary with legal regulations in each region. Auto Insurance in India deals with the insurance covers for the loss or damage caused to the automobile or its parts due to natural and manmade calamities. It provides accident cover for individual owners of the vehicle while driving and also for passengers and third party legal liability. There are certain general insurance companies who also offer online insurance service for the vehicle. Auto Insurance in India is a compulsory requirement for all new vehicles used whether for commercial or personal use. The insurance companies have tie-ups with leading automobile manufacturers. They offer their 14

customers instant auto quotes. Auto premium is determined by a number of factors and the amount of premium increases with the rise in the price of the vehicle. The claims of the Auto Insurance in India can be accidental, theft claims or third party claims. Certain documents are required for claiming Auto Insurance in India, like duly signed claim form, RC copy of the vehicle, Driving license copy, FIR copy, Original estimate and policy copy. There are different types of Auto Insurance in India:

1. Private Car Insurance - In the Auto Insurance in India, Private

Car Insurance is the fastest growing sector as it is compulsory for all the new cars. The amount of premium depends on the make and value of the car, state where the car is registered and the year of manufacture.

2. Two Wheeler Insurance - The Two Wheeler Insurance under the

Auto Insurance in India covers accidental insurance for the drivers of the vehicle. The amount of premium depends on the current showroom price multiplied by the depreciation rate fixed by the Tariff Advisory Committee at the time of the beginning of policy period.

A.3 Commercial Vehicle Insurance - Commercial Vehicle

Insurance under the Auto Insurance in India provides cover for all the vehicles which are not used for personal purposes, like the Trucks and HMVs. The amount of premium depends on the showroom price of the vehicle at the commencement of the insurance period, make of the vehicle and the place of registration of the vehicle. The auto insurance generally includes: Loss or damage by accident, fire, lightning, self ignition, external explosion, burglary, housebreaking or theft, malicious act, Liability for third party injury/death, third party property and liability to paid driver on 15

payment

of

appropriate

additional

premium,

loss/damage

to

electrical/electronic accessories the auto insurance does not include: 1).Consequential loss, depreciation, mechanical and electrical breakdown, failure or breakage 2).When vehicle is used outside the geographical area 3).War or nuclear perils and drunken driving

B. Home Insurance
Home insurance provides coverage for damage or destruction of the policyholder's home. In some geographical areas, the policy may exclude certain types of risks, such as flood or earthquake that require additional coverage. Maintenance-related issues are typically the homeowner's responsibility. The policy may include inventory, or this can be bought as a separate policy, especially for people who rent housing. In some countries, insurers offer a package which may include liability and legal responsibility for injuries and property damage caused by members of the household, including pets.

C. Health Insurance
Health insurance is insurance against the risk of incurring medical expenses among individuals. By estimating the overall risk of care expenses among a targeted group, an insurer can develop a routine finance structure, such as a monthly premium or payroll tax, to ensure that money is available to pay for the health care benefits specified in the insurance agreement. The benefit is administered by a central organization such as a government agency, private business, or not-forprofit entity. A health insurance policy is:

16

1) A contract between an insurance provider (e.g. an insurance company or a government) and an individual or his sponsor (e.g. an employer or a community organization). The contract can be renewable (e.g. annually, monthly) or lifelong in the case of private insurance, or be mandatory for all citizens in the case of national plans. The type and amount of health care costs that will be covered by the health insurance provider are specified in writing, in a member contract or "Evidence of Coverage" booklet for private insurance, or in a national health policy for public insurance. 2) Insurance coverage is provided by an employer-sponsored self-funded ERISA plan. The company generally advertises that they have one of the big insurance companies. However, in an ERISA case, that insurance company "doesn't engage in the act of insurance", they just administer it. Therefore ERISA plans are not subject to state laws. ERISA plans are governed by federal law under the jurisdiction of the US Department of Labor (USDOL). The specific benefits or coverage details are found in the Summary Plan Description (SPD). An appeal must go through the insurance company, then to the Employer's Plan Fiduciary. If still required, the Fiduciarys decision can be brought to the USDOL to review for ERISA compliance, and then file a lawsuit in federal court.

D. Life insurance
Life insurance provides a monetary benefit to a decedent's family or other designated beneficiary, and may specifically provide for income to an insured person's family, burial, funeral and other final expenses. Life insurance policies often allow the option of having the proceeds paid to the beneficiary either in a lump sum cash payment or an annuity. Annuities provide a stream of payments and are generally classified as insurance because they are issued by insurance companies, are regulated 17

as insurance, and require the same kinds of actuarial and investment management expertise that life insurance requires. Annuities

and pensions that pay a benefit for life are sometimes regarded as insurance against the possibility that a retiree will outlive his or her financial resources. In that sense, they are the complement of life insurance and, from an underwriting perspective, are the mirror image of life insurance. Certain life insurance contracts accumulate cash values, which may be taken by the insured if the policy is surrendered or which may be borrowed against. Some policies, such as annuities and endowment policies, are financial instruments to accumulate or liquidate wealth when it is needed.

E. Property Insurance
Property insurance provides protection against most risks to property, such as fire, theft and some weather damage. This includes specialized forms of insurance such as fire insurance, flood insurance, earthquake insurance, home insurance or boiler insurance. Property is insured in two main ways: Open perils and named perils. Open perils cover all the causes of loss not specifically excluded in the policy. Common exclusions on open peril policies include damage resulting from earthquakes, floods, nuclear incidents, acts of terrorism and war. Named perils require the actual cause of loss to be listed in the policy for insurance to be provided. The more common named perils include such damage-causing events as fire, lightning, explosion and theft.

18

F.MUTUAL FUNDS
A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors to buy stocks, bonds, short-term money market instruments, and/or other securities

F.1 TYPES OF MUTUAL FUNDS

There are three basic types of registered investment companies defined in the Investment Company Act of 1940: open-end funds, unit investment trusts, and closed-end funds. Exchange-traded funds are open-end funds or unit investment trusts that trade on an exchange.

1. OPEN-END FUNDS
Open-end mutual funds must be willing to buy back their shares from their investors at the end of every business day at the net asset value computed that day. Most open-end funds also sell shares to the public every business day; these shares are also priced at net asset value. A professional investment manager oversees the portfolio, buying and selling securities as appropriate. The total investment in the fund will vary based on share purchases, share redemptions and fluctuation in market valuation. There is no legal limit on the number of shares that can be issued.

2. CLOSED-END FUNDS
Closed-end funds generally issue shares to the public only once, when they are created through an initial public offering. Their shares are then listed for trading on a stock exchange. Investors who no longer wish to invest in the fund cannot sell their shares back to the fund (as they can with an open-end fund). Instead, they must sell their shares to another investor in the market; the price they receive may be significantly different from net asset value. It may be at a "premium" to net asset value 19

(meaning that it is higher than net asset value) or, more commonly, at a "discount" to net asset value (meaning that it is lower than net asset value). A professional investment manager oversees the portfolio, buying and selling securities as appropriate.

G. UNIT INVESTMENT TRUSTS

Unit investment trusts or UITs issue shares to the public only once, when they are created. Investors can redeem shares directly with the fund (as with an open-end fund) or they may also be able to sell their shares in the market. Unit investment trusts do not have a professional investment manager. Their portfolio of securities is established at the creation of the UIT and does not change. UITs generally have a limited life span, established at creation.

H.EXCHANGE-TRADED FUNDS
A relatively recent innovation, the exchange-traded fund or ETF is often structured as an open-end investment company, though ETFs may also be structured as unit investment trusts, partnerships, investments trust, grantor trusts or bonds (as an exchange-traded note). ETFs combine characteristics of both closed-end funds and open-end funds. Like closedend funds, ETFs are traded throughout the day on a stock exchange at a price determined by the market. However, as with open-end funds, investors normally receive a price that is close to net asset value. To keep the market price close to net asset value, ETFs issue and redeem large blocks of their shares with institutional investors.

H.1 Advantages of mutual funds

Mutual funds have advantages compared to direct investing in individual securities. These include:

Increased diversification 20

Daily liquidity Professional investment management Ability to participate in investments that may be available only to larger investors

Service and convenience Government oversight Ease of comparison

H.2 Disadvantages of mutual funds

Mutual funds have disadvantages as well, which include:

Fees Less control over timing of recognition of gains Less predictable income No opportunity to customize

I.MERCHANT BANKING
The history of merchant bank can be dated back to 17th & 18th centuries when it first started in Italy & France. This was started by the Italian grain merchants. It comprised of merchant bankers who intermediated or assisted in financing the transactions of other traders and their own trade too. With the passage of time the practices in evolved and the merchant banking in the modern era started from London where the merchants started to finance the foreign trade through acceptance of bill. Later they extended their services to the governments of under developed countries to raise the long term funds through the floatation of bonds in the London money market. Over the period they extended their services to loan syndication, underwriting the issues, portfolio management etc. The post war period witnessed huge increase in the merchant banking activities.

21

I.1 Merchant Banking in India

Merchant banking activity was officially commenced into the Indian capital Markets when Grind lays bank received the license from reserve bank in 1967. Grind lays started its operations with management of capital issues, recognized the requirements of upcoming class of Entrepreneurs for diverse financial services ranging from production planning and system design to market research. Apart from this it also provides management consulting services to meet the Requirements of small and medium sector rather than large sector.

Citibank Setup its merchant banking division in Indian in 1970. Indian banks Started banking Services from 1972. State bank of India started the merchant banking division in 1972

After that there were many banks which set up the merchant bank division such as;

ICICI Bank of India Bank of Baroda Canara Bank Punjab National Bank UCO Bank

The Merchant Bank got more importance in the year 1983 when there was a huge boom in the primary market where the companies were going for new issue. Merchant banking activities are organized and undertaken in several forms. Commercial banks and foreign development finance institutions have organized them through formation divisions,

nationalized banks have formed subsidiary companies, share brokers and consultancies constituted themselves into public limited companies or 22

registered themselves as private limited Companies. Some merchant banking companies have entered into collaboration with merchant bankers of foreign countries abroad with several branches.

I.2 SERVICES PROVIDED BY MERCHANT BANKS:

Project Counseling Management of debt and equity offerings Issue Management Managers, Consultants or Advisers to the Issue Underwriting of Public Issue Portfolio Management Restructuring strategies Off Shore Finance Non-resident Investment Loan Syndication Corporate Counseling and advisory services Placement and distribution

J. WEALTH MANAGEMENT
Wealth management is an investment advisory discipline that

incorporates financial planning, investment portfolio management and a number of aggregated financial services. High Net Worth

Individuals (HNWIs), small business owners and families who desire the assistance of a credentialed financial advisory specialist call upon wealth managers to coordinate retail banking, estate planning, legal resources, tax professionals and investment management.

23

CHAPTER 3
REVENUE GENERATION AT PNB
A. INSURANCE
Punjab national bank has taken number of initiatives for the benefits of its invaluable customers and has virtually become one stop shop for various financial product and services.

For Life-Insurance solutions of banks customers, the Bank has made Bank assurance Tie-up with leading Public Sector Undertaking Life Insurance Corporation of India, which has varieties of products suitable for people of all income groups and segments of society.

LIC of India has endeavored to ensure & enhance the quality of life of people through financial security by providing products and services of aspired attributes with competitive return. To achieve its mission and goals, it has launched varieties of products. Bouquet of Popular products of LIC of India includes: Investment Plans Bima Bachat Endowment plus Pension Plans Pension Plus Jeevan Akshay VI Children Plans Jeevan Tarang 24

Komal Jeevan Child Fortune Plus Insurance cum Investment Plans Jeevan Anand Jeevan Saral Exclusive products for Females Jeevan Bharati Health Insurance Plans Health Protection ------- & many more.

B. NON LIFE INSURANCE

The Bank has made Banc assurance Tie-up with Oriental Insurance Co. Ltd. (OICL), a Public Sector Undertaking, which offers variety of products e.g. Fire Insurance, Motor Vehicle Insurance, Marine Insurance & Misc. Insurance Policies like Shop-keepers Policy; Theft/Burglary Policy; Fidelity Guarantee Policy; Personal Accident Policy, Health Insurance Policy; Overseas Travel Insurance Policy, House Hold Goods Policy etc. at a competitive price with assured post sale services.

B.1 Health Insurance

The Product has been got designed exclusively for PNB Customers and only the A/c Holders of PNB will be eligible to take cover under the Scheme. The product available in all PNB Branches across the country.

25

B.2 Vehicle Insurance

SPECIAL DISCOUNT FOR PNB CUSTOMERS For Private Cars: 40 % discount on Indian Motor Tariff 2002 rates. For Commercial Vehicles: 30% discount on Indian Motor Tariff 2002 rates.

B.3 OTHER POPULAR PRODUCTS:

Personal Accident - Individual Householders Insurance Policy Overseas Medical Employment and Study Shopkeeper's Insurance Policy Kissan Package Insurance Nagrik Suraksha Policy Electronic Equipment Insurance Policy

C. MUTUAL FUNDS C.1 AN OPPOURTUNITY TO ACHIEVE OUR FINANCIAL GOALS

In an endeavour to enlarge the range of services available to our customers, PNB has been distributing the products of Principal PNB Asset Management Company Pvt. Ltd. from its designated branches since July To provide variety of Mutual Fund Products to its customers, Now the Bank has also started the Distribution & Marketing of UTI Mutual Fund Products. In recent times Mutual funds have gained rapid popularity as a good investment vehicle and public at large is attracted towards MF investment, which has variety of schemes and income options offered by Mutual Funds which can suit the financial preferences of all classes of investors, be it

26

Retail, retail corporate or institutional. The following benefits, intrinsic to investments in Mutual Funds have inspired greater confidence amongst the investors Transparency Efficient Liquidity Convenience Tax benefits :-

C.2 Range of schemes:

Mutual Funds offer schemes keeping in view the risk profile and risk-return preferences of investors. For an aggressive investor with appetite for risk, Equity oriented schemes are available which have a higher potential for capital appreciation. For a conservative investor with expectations of stable returns and low risk, Income Schemes are available.

To suit various type of requirements of the investors, some of the schemes of Principal PNB AMC & UTI AMC are as under: 1. Principal Growth Scheme: Open-ended equity fund with an investment portfolio of stocks diversified across different sectors of the economy. 2. Principal balanced Fund: Open ended fund with an equity (diversified) component of 51% to 70% and Debt component (including Money Market) 30% to 49%. 3.Principal Income Fund: Open-ended fund with up to 100% investment in Debt instruments (including Money Market instruments and securitized debt) 4.Principal Income Fund Short Term Plan: The scheme is meant for investors seeking stable returns over shorter-term investment horizons compared to the Principal Income Fund. 27

5. Principal Cash management Fund: An Open-ended fund that invests 100% of its corpus in Money Market instruments and seeks to provide an excellent avenue to park very short term cash surpluses and earn returns linked to the call money market rates. 6. Principal Index Fund: An Open-ended fund that tracks S&P CNX Nifty (NSE) closely. The aim of the fund is to provide its investors returns commensurate with the Nifty. 7. Principal Large Cap Fund: An open-ended scheme to invest in the stocks of the companies having a large market capitalization. The fund is suitable for investors interested in long term capital appreciation. 8. Principal Child Benefit Fund The scheme is suitable for an investor seeking long-term growth and accumulation of capital for the beneficiary. The objective of the scheme is to generate regular returns and/or capital appreciation / accretion with the aim of giving lump sum capital growth at the end of the chosen target period or otherwise to the Beneficiary. 9. Principal Global Opportunities Fund It is an open-ended growth fund. The fund is suitable for investors who would like to diversify investments into other markets / securities by taking advantage of the potential growth in the global markets and thereby reduce the risk of having a portfolio predominantly invested in India. The investment objective of the scheme is to build a high quality. International Equity portfolio out of the permissible investments as defined and permitted under the regulations from time to time and provides returns and/or capital appreciation along with regular liquidity to the investors. 10. Principal Infrastructure & Service Sector Fund: An open-ended Equity Scheme with an objective to provide capital

28

appreciation and income distribution by investing predominantly in Equity/Equity related instruments of Infrastructure & Service Sector companies. Principal Tax Savings Fund: An open-ended Equity linked savings scheme suitable for investors seeking income tax deductions under section 80C (2) of Income Tax Act along with long-term equity-market returns from investment in equities. 11. Principal Personal Tax Saver Fund: The scheme is suitable for investors seeking income tax deductions under section 80C (2) of ITA along with long term equity-market returns from investment in equities. 12. Principal Monthly Income Plan: An open-ended income scheme having periodical distribution with no assured monthly returns. MIP attempts to provide income on a monthly basis and is, therefore, particularly suited for investors seeking regular source of income.

D. UTI MUTUAL FUND:

D.1 UTI Infrastructure Fund: (Formerly known as UTI-BASIC INDUSTRIES FUND) An open ended equity fund with the objective to provide Capital appreciation through investing in the stocks of the companies engaged in the sectors like Metals, Building Materials, Oil & Gas, Power, Chemicals, Engg. Etc. D.2 UTI Mid Cap Fund: An open ended equity fund with the objective to provide Capital appreciation by investing primarily in Mid Cap stocks.

29

D.3 UTI Large Cap Fund: An open ended equity Fund with the objective to provide capital appreciation through investment in top 50 companies in terms of market capitalization. D.4 UTI Services Sector Fund: An open-ended fund which invests in the equities of the Services Sector companies of the country. One of the growth sector funds aiming to provide growth of capital over a period of time as well as to make income distribution by investing the funds in stocks of companies engaged in service sector such as banking, finance, insurance, education, training, telecom, travel, entertainment, hotels, etc. D.5 UTI Leadership Equity Fund: The scheme seeks to generate capital appreciation and / or income distribution by investing the funds in stocks that are Leader in their respective industries /sectors / sub-sector. D.6 UTI Dividend Yield Fund: An open-ended equity scheme. It aims to provide medium to long term capital gains and/or dividend distribution by investing predominantly in equity and equity related instruments which offer high dividend yield. D.7 UTI Index Select Fund: An open-ended equity fund with the objective to invest in select stocks of the BSE Sensex and the S&P CNX Nifty. The fund does not replicate any of the indices but aims to attain performance better than the performance of the indices. D.8 UTI Equity Fund: UTI Equity Fund is open-ended equity scheme with an objective of investing at least 80% of its funds in equity and equity related instrument with medium to high risk profile and up to 20% in debt and money market

30

instruments with low to medium risk profile. D.9 UTI Childrens Career Plan (Balanced): An open-ended debt oriented fund with investment in Debt/G-sec of minimum 60% and a maximum of 40% in Equity. Investment can be made in the name of the children up to the age of 15 years so as to provide them, after they attain the age of 18 years, a means to receive scholarship to meet the cost of higher education and/or to help them in setting up a profession, practice or business or enabling them to set up home or finance the cost of other social obligation.

E.MERCHANT BANKING
Merchant banking primarily involves financial advice and services for large corporations and wealthy individuals.

E.1 MERCHANT BANKING ACTIVITIES:

The Major Merchant Banking activities which the Bank offers to its clients are: Issue Management - Management of Public Issues i.e. IPOs, FPOs, Right Issues, etc. as Book Running Lead Manager Bankers to the Issue Payment of Dividend Warrants / Interest Warrants / Refund Orders Debenture Trustee Underwriting Monitoring Agency Besides promoting / marketing the above Merchant Banking Business in the Bank through specialized Capital Market Services Branches, Merchant Banking Cells and identified branches, the Merchant Banking Division also looks after the following activities: Marketing of Merchant Banking Business Monitoring / Supporting Capital Market Service Branches 31

Refund Paid / Payable

E.2 MERCHANT BANKERS ASSIGNMENTS:

At present, the Bank is holding following Licenses from SEBI: Merchant Banker Banker to the Issue Underwriting Debenture Trustee

1. Bankers to the Issue (Collecting Banker):

Being a licensed Banker to Issue registered with SEBI, enables us to provide Escrow Collecting Bank/services and refund Bank services related to Initial Public Offering (IPO), Follow on Public Offering (FPO) and Right Issue. The process of collections needs a high degree of close co-ordination between various capital market intermediaries such as the Book Running Lead Manager, the Syndicate Members, the Registrar and most importantly the issuer Company. Our large network of branches and strong bonds with various capital market constituents enable us to offer better solutions for clients. 2. Payment Of Dividend Warrants / Interest Warrants (Paying

Banker):
The Merchant Banking Division has also got enabled a functionality of a new system in CBS branches for payment assignments, which is similar to Demand Draft Payable Account under Finical. The product has the following unique features that ensure that the payment account of the corporate remains reconciled at any point of time: Facility to provide MIS on paid / outstanding instruments in ASCII format, which can be suitably converted by the corporate for updating their in-house database This new facility will help in solving the major problem in handling these 32

assignments i.e. reconciliation of accounts. This will also help in reducing the cost of reconciliation, postage and handling cost.

3. Payment of Refund Orders:

The detailed guidelines / procedures to be followed. Powers of the Branches / Charges etc. For handling the assignments of Bankers to the Issue/

Payment of Dividend warrants / Refund Orders etc. are available in the circulars of the Division at the Banks website.

4.UNDERWRITING
Underwriting is a contingent liability and this is one sphere of Merchant banking where outlay of funds on the part of the bank may be involved. As such, it is necessary to be very careful in accepting / recommending such business. Proposals that pose clear risk of devolvement should be declined at the outset unless there is sub underwriting tie up directly or indirectly with promoters and their related investment companies or a firm commitment of buy back on reasonable terms. Major aspects which need close scrutiny before underwriting can be considered are the project and its viability, project location, promoters and their track record, product and its marketability, past performance of existing companies in the same line, Government Policy, projected financial performance, capital market conditions, underwriting / sub underwriting / buy back arrangements, etc.

5. Debenture Trustee:
In terms of SEBI guidelines, all debenture issues (public rights) of the companies with the maturity period exceeding 18 months are required to have "Debenture Trustee" and its name must be stated in the prospectus of the issue. The necessity of creation of debenture trust is to organize the large number of debenture holders and facilitate interaction by the companies issuing 33

debentures with a single entity rather than individual debenture holders. Merchant Bankers (holding valid Registration with SEBI as debenture trustee) act as Trustees for the debenture holders to accept security created by the company, to secure the repayment of principal and payment of interest thereon, taking action for safeguarding their interest and enforcing their rights in times of needs. As per SEBI guidelines lenders cannot act as Trustees to debentures/bond the issues of the Companies who are their borrowers. Therefore, branches of the Bank must not obtain 'Debenture Trustee' assignments of the parties/companies which are availing Credit facilities from our Bank.

6. Monitoring Agency:
In terms of SEBI (DIP) guidelines, the Company issuing the shares to public shall make arrangements for the use of proceeds of the issue to be monitored by one of the financial institutions, in case of issues, which exceed Rs.500 crores. Though, in terms of SEBI guidelines, it is mandatory for the issuers to appoint 'Monitoring Agency' if the issue size is more than Rs.500 crores, on the insistence of Merchant Bankers and Stock exchanges, the issuers of issues of less than Rs. 500 crores are also appointing monitoring agency. Utmost attention is required for monitoring the proceeds, submission of statement as per SEBI guidelines to the company reporting of defaults etc. after acceptance of the assignment.

F. WEALTH MANAGEMENT SERVICES

In the present scenario, investors are looking for higher Returns. There are many avenues available in the market to invest, however to choose a right investment portfolio is an uphill task that requires great professionalism and continuous monitoring of investments, in view of the complex nature of the capital market. Wealth management is an unmatched package of products 34

and services that provides personalized financial planning, the luxury of investment services and a host of exclusive privileges of building wealth and securing future. It is with this perspective that Punjab National Bank has launched the wealth management services. This is a stride towards PNBs endeavor to give to its customers an End to End solution for all their financial needs under one roof. Under the Wealth Management services, we shall give expert advice on the following areas: 1. Mutual fund investment 2. Debt Market instruments 3. Insurance services 4. Tax/Retirement planning 5. On line trading 6. Real estate

35

CHAPTER 4
RESEARCH METHODLOGY
Research methodology is a way to systematically solve the research problem. Research methodology constitutes of research methods, selection criterion of research methods, used in context of research study and explanation of using of a particular method or technique so that research results are capable of being evaluated either by researcher himself or by others. Why a research study has been undertaken, how the research problem has been formulated, why data have been collected and what particular technique of analyzing data has been used and a best of similar other question are usually answered when we talk of Research methodology concerning a research problem or study. The main aim of research is to find out the truth which is hidden and which has not been discovered as yet. Four types of studies can be called research, namely reporting, description, explanation and prediction. Cooper and Emory define research as the systematic inquiry aimed at providing information to solve problems.

Research Process: Choosing the research problem Review of related literature Collection of data Interpretation of data Preparing the research report

1. OBJECTIVES
In this age of business and globalization finance plays the pivotal role. 36

Today when its the spread of monetary transaction which makes the world go round we feel the need to Study the function more closely, as to how the money transaction is effected and the transaction being speeded. Thus our aim is to: Spreading and gaining awareness about the sources of revenue to banking industries. Getting information about manner in which the bank collects its revenue.

DATA COLLECTION
Primary data source: 1. Through interview with consultants 2. Through filling forms Secondary data source: 1. Through web

LIMITATIONS OF THE STUDY

Following limitations were faced during the study: 1. While designing the questionnaire it was kept in mind to gather more and more information from each target person. For neither present nor

descriptive questions could have served the purpose. Therefore the questionnaire contained in the open-ended questions. 2. The study was conducted in Gohana. The consultants only so that accuracy of data so collected could be absurd covered by circulation of questionnaire. 3. The accuracy of indications given by the respondents may not be consider adequate as whether the language used in the questionnaire is understood by the respondent cannot be taken for granted. 4. The study is based on the information gathered from the care consultants. Therefore in such case it is possible that the information supplied might be biased because the insurance care consultant might have shown partiality towards their insurance policies. 37

5. Since the survey was limited to care consultants it is rather difficult to give a precise conclusion but I have tried to the best of my capability to give the conclusion on a comprehensive manner.

38

CHAPTER 5
FINDINGS AND ANALYSIS
Target group PNB gets its largest amount of funds Towns Cities Over seas
Chart no.1 % collection from target Groups

cities towns

INTERPRETATION According to study 64% of funds comes from cities 20% of funds come from towns and 11% from overseas. Quality of service to increase funds improving or Deteriorating
CHART NO 2
2010 2009 2008 2007 0 1 2 3 4 5 6 7 8

QUALITY OF SERVICES

INTERPRETATION An above chart shows that the quality of services has increased in last few years. In 2007 it was 2.5 and the quality of services increase 39

to 7 in year 2010. Measures to increase revenue Chart no.3 Measures of funds

online advertisement tv and radio advertisement

INTERPRETATION As a chart shown above, It shows that how bank takes proper
measures to improve its funds.1. Through online advertisement and 2. Through radio and TV advertisement.80% through online advertisement and rest 20% through TV and radio advertisement.

Appropriate rate of interest on its funds Chart no.4 Appropriate rate of interest
4.5 4 3.5 3 2.5 2 1.5 1 0.5 0 YES NO MAY BE

INTERPRETATION According to study 70% people say yes Punjab national bank
provides appropriate rate of interest on it funds. 10% people say no and 20% says may be.

Banking activity does PNB gets its largest sources of funds

Agricultural banking

40

Corporate banking International banking Personal Social CHART NO. 5 LARGEST SOURCE OF FUNDS
7 6 5 4 3 2 1 0 Agricutural banking Corporate banking Internatinal banking Personal banking Social banking

Most issued fixed deposit scheme

1.777 days 2.1111 days 3.555 and 1000 days Chart no. 6 Most issued fixed deposit

777 days 1111 days 555 and 1000 days

INTERPRETATION According to study 60% of people issue 1111 days of fixed deposit
and 10% 777 days fixed deposit and 30% issue 555 to 1000 days fixed deposit.

41

Proper security to the mortgage property Chart no. 7 proper security to mortgage property
5 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0 YES NO MAY BE

42

CHAPTER 6
CONCLUSION & RECOMMADATION
It was enriching experience working in Punjab national bank for the period of two months. What I learnt during this time and by completing this project can be summarized as follows: 1. Working at Punjab national bank helped me not only academically but also practically. It helped me a lot to understand the finance part very easily. 2. I have come to know the importance of finance especially with regard to sources of finance on most renowned bank Punjab national bank. Especially because of emergence of many competitor with excellence in services & competitive product. The base of this chapter conclusion is on the data analysis or what we say findings.
3. I have findings from the consultants of Punjab national bank and their services in my topic. 4. Through this I have come to know the how to attract consumers to gain sources funds and services provided by Punjab national bank to attract its consumers. 5. The consultants also said that all income and age group of customers are

attracted towards their product but buyers are mainly from higher and middleincome group. consultants said that the customer are curious in getting Policies because they want more discounting on the products and low claim time after any accident.

RECOMMENDATIONS
The lack of good communication skills and training. So training should be easy. PNB Should use new techniques of sales promotion. People must be made aware of the benefits of the policies 43

 The company should give personal attention to each customer. The details about the company should be given to the customers. Regular advertisement of the company should be given TV and Newspaper The company must try to find new markets especially in the rural areas. The company should do frequent analysis of the competitor

44

REFERENCES
BOOKS: An Insider's Guide to the Industry by Michel Fleuriet An Introduction to Investment Banks, Hedge Funds, and Private Equity: The New Paradigm by David Stowell The Investment banking handbook By John Peter Williamson

WEBSITE: www.pnbindia.in/ www.netpnb.com/ www.moneycontrol.com

45

QUESTIONNAIRE
Name: Contact number: Name of the firm: Location: ___________________________________________ ___________________________________________ ___________________________________________ ___________________________________________

Q.1 From which target group PNB gets its largest amount of funds?
Towns Cities Over seas

Q.2 Is the quality of service to increase funds improving or Deteriorating? Improving/Stable/Deteriorating*

Q.3 Do you think the bank is providing appropriate rate of interest on its funds. Yes no

Q.4 From which banking activity does pnb gets its largest sources of funds? Agricultural banking Corporate banking International banking Personal Social

Q.5 According to you which is the most issued fixed deposit schemes.
777 days 1111 days 555 and 1000 days Q.6 Do you think bank provides proper security to the mortgage property? Yes no

46

PROFIT&LOSS A/C FOR THE YEAR 2010 -2011

Particulars
Sales Turnover Other Income Total Income Total Expenses Operating Profit Profit On Sale Of Assets Profit On Sale Of Investments Gain/Loss On Foreign Exchange VRS Adjustment Other Extraordinary Income/Expenses Total Extraordinary Income/Expenses Tax On Extraordinary Items Net Extra Ordinary Income/Expenses Gross Profit Interest PBDT Depreciation Depreciation On Revaluation Of Assets PBT Tax Net Profit Prior Years Income/Expenses Depreciation for Previous Years Written Back/ Provided Dividend Dividend Tax Dividend (%) Earnings Per Share Book Value Equity Reserves Face Value March 11 103.21 -103.21 6.69 96.52 --------96.52 51.57 44.96 0.91 -44.05 13.47 30.58 -----2.26 -135.01 437.28 10.00 March 10 101.73 -101.73 10.67 91.06 --------91.06 34.57 56.50 0.46 -56.04 19.33 36.71 -----2.72 -135.01 425.59 10.00

47

BALANCE SHEET FOR 2010-2011

Sources Of Funds Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Net worth Secured Loans Unsecured Loans Total Debt Total Liabilities 135.01 135.01 0.00 0.00 437.28 0.00 572.29 643.55 211.10 854.65 1,426.94 Mar '11 12 mths 12.91 7.48 5.43 0.00 0.00 1,310.30 0.83 0.42 1,311.55 61.28 105.30 1,478.13 0.00 2.61 54.02 56.63 1,421.50 0.00 1,426.93 0.00 42.39 135.01 135.01 0.00 0.00 425.59 0.00 560.60 281.94 465.00 746.94 1,307.54 Mar '10 12 mths 12.16 7.19 4.97 0.00 0.00 1,068.05 0.68 0.88 1,069.61 93.33 215.01 1,377.95 0.00 1.48 73.90 75.38 1,302.57 0.00 1,307.54 0.00 41.52

Application Of Funds Gross Block Less: Accum. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances Fixed Deposits Total CA, Loans & Advances Deffered Credit Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses Total Assets Contingent Liabilities Book Value (Rs)

48