Project Report On Indian Banking System

INDIAN BANKING SYSTEM 0621000460
Project Report
ON
INDIAN BANKING SYSTEM
POST GARDUATE DIPLOMA IN BUSINESS

ADMNISTRATION
(PGDBM)
(2006-09)
UNDER THE SUPERVISION OF
Sr. Manager Mr. V.K Sharma
&
Dy. Manager Mrs. S. Saroaja
SUBMITTED BY
Roshan Ara
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INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY

CENTRE FOR DISTANCE LEARNING
Ghaziabad
EXECUTIVE SUMMARY
Banking in India originated in the first decade of 18 century with The General B
ank of
India coming into existence in1786. This was followed by Bank of Hindustan. Both
these banks are now defunct. The oldest bank in existence in India is the State
Bank of
India being established as "The Bank of Bengal" in Calcutta in June 1806.
The Reserve Bank of India formally took on the responsibility of regulating the
Indian
banking sectorfrom1935. After India's independence 1947, the Reserve Bank was
nationalized and given broader powers.
Currently (2007), banking in India is generally fairly mature in terms of supply
, product
range and reach-even though reach in rural India still remains a challenge for t
he private
sector and foreign banks. In terms of quality of assets and capital adequacy, In
dian banks
are considered to have clean, strong and transparent balance sheets relative to
other
banks in comparable economies in its region. The Reserve Bank of India is an
autonomous body, with minimal pressure from the government. The stated policy of
the
Bank on the Indian Rupee is to manage volatility but without any fixed exchange
rate-
and this has mostly been true.
The Modern Banking Functions are Fund based and Non-Fund based functions. These
functions of a bank are those in which banks extend various services to their cu
stomers
or add their commitments to certain transactions undertaken by their clients and
charge
their fees/ commissions for the services rendered by them / their commitments ad
ded to
the transactions undertaken by the clients. The activities popularly known as Non
-fund
facilities provided by Banks.
Thus, we conclude
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TABLE OF CONTENTS
1. INTRODUCTION
· Objectives of the study

5
· Scope of study
6
· Limitations of study
7
2. INDIAN BANKS
Scope of Indian Bank 8
Banking in India 9
Definition of Banks 11
Types of Bank 12
Services Provided by Banks 13

3. RESERVE BANK OF INDIA
Guidelines Provided by the RBI

21
Guidelines on Fair Practices Code

28
4
33
4. STUDY OF HDFC BANK
5. STUDY OF PNB BANK 46
ACKNOWLEDGEMENT
I express my heartiest gratitude to Mr. V.K SHARMA (SENIOR MANAGERPNB)

for giving me an opportunity to prepare a report on the project assigned to
me. I am also thankful to Mrs. S. SAROJA (DEPUTY MANAGER) under their
guidance I undertook this project, for extending the advice and direction that i
s
required to carry on a study of this nature, and for helping me with the intrica
te
details of the project at every step. Without their support and able guidance, i
t
would have been very difficult to finish this work in the way I have done it.
Lastly I would like to thank all the respondents who offered their opinions and
suggestions through the survey that was conducted by me.
However, I accept the sole responsibility of any possible errors of omission.
( Ros
han Ara )
OBJECTIVES OF THE STUDY

.
To study broad outline of management of credit, market and operational risks
associated with banking sector.
.
To understand the importance of banking sector.
.
To study the Indian bank scenario and its problem.
.
Long Term and Short Term Finances.
.
To study the role of bank in Indian Market.
.
Different types of services provided by the banks.
.
To study various bank, Corporate and Commercial.
.
To study the Indian bank scenario and its problem.
.
Though the Indian Banking System is very wide and elaborated, still the project
covers whole subject in concise manner.

.
The study aims at learning the techniques involved to manage the various types
of Banks, various methodologies undertaken.
.
To offer suggestions based upon the findings.
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SCOPE OF THE STUDY

.
A healthy banking system is essential for any economy striving to achieve
good growth and yet remain stable in an increasingly global business
environment. The Indian banking system, with one of the largest banking
networks in the world, has witnessed a series of reforms over the past few
years like the deregulation of interest rates, dilution of the government stake
in
public sector banks (PSBs), and the increased participation of private sector
banks. The growth of the retail financial services sector has been a key
development on the market front. Indian banks (both public and private) have
not only been keen to tap the domestic market but also to compete in the global
market place.
.
Studying the increasing business scope of the bank.
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.
Market segmentation to find the potential customers for the bank.
.
Customers perception on the various products of the bank.
.
The corporate sector has stepped up its demand for credit to fund its expansion
plans; there has also been a growth in retail banking.

.
The report seeks to present a comprehensive picture of the various types of
bank. The banks can be broadly classified into two categories:
Nationalise Bank
Private Bank
.
Within each of these broad groups, an attempt has been made to cover as
comprehensively as possible, under the various sub-groups.
LIMITATION OF THE STUDY: Every work has its own limitation. Limitations
are extent to which the process should not exceed. Limitations of this project a
re:
1. The project was constrained by time limit of two months.

2. The major limitation of this study shall be data availability as the data is
proprietary and not readily shared for dissemination.
3. Due to the ongoing process of globalization and increasing competition, no on
e
model or method will suffice over a long period of time and constant up gradatio
n
will be required. As such the project can be considered as an overview of the
various banks prevailing in Punjab National Bank and in the Banking Industry.
4. Each bank, in conforming to the RBI guidelines, may develop its own methods
for measuring and managing risk.
5. The project study is restricted to banking sector used in India only.
6. The conclusion made is based on a sample study and does not apply to all the
Individuals.
7. In India the banks are being segregated in different groups. Each group has t
heir
own benefits and limitations in operating in India.
8. All banks are not included.
PROBLEMS: --The corporate sector has stepped up its demand for credit to fund it
s
expansion plans, there has also been a growth in retail banking. However, even a
s the
opportunities increase, there are some issues and challenges that Indian banks w
ill have
to contend with if they are to emerge successful in the medium to long term.
RESEARCH METHODOLOGY:
The first stage included the introduction of Indian Banks and how they work in I
ndia. I
choose five criteria Growth, Credit quality, Strength, Profitability, Efficiency
/
Profitability. The next stage involved determining the objectives of the study,
drafting a
questionnaire will be designed keeping in mind the target audience and objective
s of the
study. It will non-disguised in nature and will include a few open-ended questio
ns.
DATA COLLECTIONS
The data from such organization has also been collected.
Primary data
The primary data will be collected through the questionnaire designed. In the pr
ocess of
data collection we went to the respective bank to get the questionnaire filled.
The
preparation of the project report required me to visit the various other compani
es like
Punjab National Bank, ICICI bank , State Bank of India, Central Bank, IDBI bank
etc.
in order to collect data.
Secondary data
The Preparation of the project report also required data from various journals,
newspapers ( like The Economic Times, Times of India etc.) books ( like Working
Capital Management written by Sarbesh Mishra and Financial Service written by M
Y
Khan etc.)
SCOPE OF BANKING SECTOR
Banking business has a history of over 200 years. From the times of the
Bank of Bengal (1806) the sector has been witnessing qualitative and quantitativ
e
changes. Main players during the pre-independence period were Credit Lyonnais,
Allahabad Bank, Punjab National Bank and Bank of India. With 1935 regulation the
Reserve Bank of India was proclaimed the Central Bank of India and was vested
with controlling powers over the commercial banks.
The drastic development taken place during the first 25 years since
independence was Nationalization of many private banks. With this, the central
government became major policy maker for these nationalized banks
With economic liberalization measures many private and foreign banking
companies were allowed to operate in the country. Favorable economic climate and
a variety of other factors such as demand for wide range of financial products f
rom
various sections of the society led to mutually beneficial growth to the banking
sector and economic growth process. This was coincided by technology
development in the banking operations. Today most of the Indian cities have
networked banking facility as well as Internet banking facility. A customer is
empowered to operate his account from any part of the country. UTI Bank, ICICI,
HDFC Bank and Bank of Punjab are the main winners of the race.
BANKING IN INDIA
Banking in India originated in the first decade of 18th century with The
General Bank of India coming into existence in 1786. This was followed by Bank o
f
Hindustan. Both these banks are now defunct. The oldest bank in existence in Ind
ia is
the State Bank of India being established as "The Bank of Bengal" in Calcutta in
June
1806. A couple of decades later, foreign banks like Credit Lyonnais started thei
r
Calcutta operations in the 1850s. At that point of time, Calcutta was the most a
ctive
trading port, mainly due to the trade of the British Empire, and due to which ba
nking
activity took roots there and prospered. The first fully Indian owned bank was t
he
Allahabad Bank, which was established in 1865.
By the 1900s, the market expanded with the establishment of banks such as
Punjab National Bank, in 1895 in Lahore and Bank of India, in 1906, in Mumbai bo
th
of which were founded under private ownership. The Reserve Bank of India
formally took on the responsibility of regulating the Indian banking sector from
1935.
After India's independence in 1947, the Reserve Bank was nationalized and given
broader powers.
Reserve Bank of India
Scheduled Banks Commercial Banks Co-Operative Banks

State Cooperatives
(16)
Foreign
Banks
(40)
Regional
Rural
Bank
(196)
Urban Cooperatives
(52)
Private Sector Bank (30)
Public Sector Banks (27)
Old (22) New (8)

State Bank of India & Other Nationalised Banks
Associate Banks (8) (19)
INTRODUCTION

Definition of the Bank:-Financial institution whose primary activity is to act a

s a
payment agent for customers and to borrow and lend money. Banks are important
players of the market and offer services as loans and funds.
.
Banking was originated in 18th century
.
First bank were General Bank of India and Bank of Hindustan,
now defunct.
.
Punjab National Bank and Bank of India was the only private
bank in 1906.
.
Allahabad bank first fully India owned bank in 1865.
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Types of banking
Commercial bank has two meanings:
.
Commercial bank is the term used for a normal bank to distinguish it
from an investment bank. (After the great depression, the U.S.
Congress required that banks only engage in banking activities,
whereas investment banks were limited to capital markets activities.
This separation is no longer mandatory.)
.
Commercial bank can also refer to a bank or a division of a bank that
mostly deals with deposits and loans from corporations or large
businesses, as opposed to normal individual members of the public
(retail banking). It is the most successful department of banking.
Community development bank are regulated banks that provide financial
services and credit to underserved markets or populations.
Private banks manage the assets of high net worth individuals.
Offshore banks are banks located in jurisdictions with low taxation and
regulation. Many offshore banks are essentially private banks.
Savings banks accept savings deposits.
Postal savings banks are savings banks associated with national postal
systems.
There are some examples of banks in India:
.
Private sector bank
HDFC, ICICI, Axis bank, Yes bank, Kotak Mahindra bank, Bank of
Rajasthan
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.
Rural bank
United bank of India, Syndicate bank, National bank for agriculture and
rural development (NABARD)
.
Commercial bank
State Bank, Central Bank, Punjab National Bank, HSBC, ICICI,
HDFC etc.
.
Retail bank
BOB, PNB
.
Universal bank
Deutsche bank
Services provided by the bank
Banks provide two types of services

1.
Fund Based
2.
Non-Fund Based
Banking Services
Fund Based
Services
Non-Fund Based
Services

FUND BASED AND NON-FUND BASED FUNCTIONS
The difference between fund-based and non-fund based credit assistance lies main
ly
in the cash outflow. While the former involves all immediate cash outflow, the l
atter
may or may not involve cash outflow from a banker. In other words, a fund based
credit facility to a borrower would result in depletion of actual liquidity of a
banker
immediately whereas grant of non-fund based credit facilities to a borrower may
or
may not affect the banker s liquidity.
Fund Based Services
FUND BASED FACILITY

Fund based functions of a bank are those in which banks make deployment of their
funds either by granting advances or by making investments for meeting gaps in
funds requirements of their customers/ borrowers. Fund-based functions of a bank
may be classified into two parts:
.
Granting of Loans and Advances
.
Making Investments in shares/ debentures/ bonds.
FUND BASED SREVICES

I. LOANS AND ADVANCES
1. Commercial Loans Segment
A. Working Capital:-Working Capital is Current assets minus current
liabilities. Working capital measures how much in liquid assets a company has
available to build its business. The number can be positive or negative,
depending on how much debt the company is carrying. In general, companies
that have a lot of working capital will be more successful since they can expand
and improve their operations. Companies with negative working capital may lack
the funds necessary for growth, also called net current assets or current capita
l.
A loan whose purpose is to finance everyday operation of a company. A working
capital loan is not used to buy long term assets or investments. Instead it's us
ed to clear
up accounts payable, wages, etc.
I. Cash Credit:-This facility is given by the banker to the customer by way of a
certain amount of credit facility. Its limit is fixed on the basis of security o
f the
company`s current assets.
II. Overdraft:-Banks allow selected customers to write cheques in excess of the
balance in their current account, ie, to overdraw. Overdrafts are arranged up to
limits which depend on the customer's credit standing and the bank manager's
humour. The arrangements allow flexibility in the amount spent and, equally, all
ow
flexibility in repayments (although technically a bank can demand repayment of a
n
overdraft within 24 hours). In that respect overdrafts are unlike personal loans
,
which are structured with regular repayments. Interest on overdrafts is charged
on
the fluctuating daily balance.
III. Bills Finance:IV.
Bills Purchase:V.
Bills Discounting:-This is the most important form in which a bank lends
without any collateral security. The seller draws bills of exchange on the buyer
of
goods on credit. Such a bill may either be a clean bill or documentary bill whic
h is
accompanied by documents of title to goods,viz railway receipts. The bank
purchase bills payable on demand and credit the customer`s account with the
amount of bills less the discount. On maturity of the bills, the bank present th
em to
its acceptor for payment. In case the discounted bill is dishonored by the nonpa
yment,
the bank can recovers the full amount from the customer along with the
expense in that connection.
B. Tem Loans:-A bank loan to a company, with a fixed maturity and often featurin
g
amortization of principal. If this loan is in the form of a line of credit, the
funds are
drawn down shortly after the agreement is signed. Otherwise, the borrower usuall
y uses
the funds from the loan soon after they become available. Bank term loans are ve
ry a
common kind of lending.
I. Capital Expenditure:-Money spent to acquire or upgrade physical assets such a
s
buildings and machinery. also called capital spending or capital expense.
II. Fixed Assets Finance:III.
Project Finance:-Financing arrangements where the funds are made available for a
specific purpose (the project), with the loan repayments geared to the project's
cashflow.
Project finance is used in connection with raising large amounts of money for bi
g-ticket,
energy-related facilities. The term has come to be loosely applied to various fo
rms of
financing. 'A financing of a particular economic unit in which a lender is satis
fied to
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look initially to the cashflows and earnings of that economic unit as the source
of funds
from which a loan will be repaid and to the assets of the economic unit as colla
teral for
the loan.'
IV. Consumer Loans Advance against Shares:V.
Housing Loans:VI.
Education Loans:3.
Personal Loans Segment:-Loan granted for personal, family, or household use,
as distinguished from a loan financing a business. Though in some situations the
lender may require a co-signer or guarantor. If unsecured, the loan is made on t
he
basis of the borrower's integrity and ability to Pay. Generally, these loans are
used for debt consolidation, or to pay for vacations, education expenses, or
medical bills, and are amortized over a fixed term with regular payments of
principal and interest.
Non-Fund based services
It is generally perceived that the non-fund based business is very remunerative
to
bank and the borrowers. The banks, besides getting handsome commission or fee
and some other service charges, also get the low cost deposits in the shape of
margin and ancillary business. The funds of the borrower are not blocked in the
advances to be given to the suppliers or beneficiaries and this keeps his liquid
ity
position comfortable, production smooth and costs low.
PURPOSE FOR NON-FUND BASED FACILITIES:
The borrowers need such facilities not only for purchases of current assets or
financing there of or take benefit of certain services with the help of non-fund
based
facilities. They also need the facilities for acquisition of fixed assets includ
ing their
financing.
RBI NORMS:
Prudential exposure norms as per extant guidelines of Reserve Bank of India prov
ides
that the maximum exposure of a bank for all its Fund based and Non-fund based cr
edit
facilities, investments, underwriting, investments in Bonds and commercial paper
and
any other commitment should not exceed 25 percent of its (bank's) net worth to a
n
individual borrower and 50 percent of its, net worth to a 'group'. It may howeve
r, be
rioted that while calculating exposure, the Non-fund based facilities are to be
taken at
50 percent of the sanctioned limit. To illustrate the point let us consider the
following
example:
Example1.
Particulars Rs. Rs. In
crores
Net worth of the bank
Maximum exposure permitted for an individual
borrower (25% of net worth of the bank) Working
Capital Control and Banking Policy
175
700
Maximum exposure permitted for all borrowers

under the same group (50% of net worth of the
bank)
350
657
Example1.
Particulars Rs.
Limits sanctioned to borrower

Fund Based
Non-Fund Based 100
Total 200
Total Exposure
For Fund Based limits
@ 50% of limits
For Non-Fund based limits 50
@ 50% of limits
100
100
200
100
50
Total 150
Total credit limits to the above borrower are Rs.200 crores which are in excess
of the
maximum exposure norm of Rs. 175 crores. but for the purpose of determining expo
sure
we have taken non-fund based limits at 50 percent of itsvalue and total exposure
is taken
at 150 crores which is well within the norm.
FUNDS REMITTANCE/ TRANSFER FACILITIES
Issue of demand draft
Collection of bills and cheques
ESTABLISHMENT OF LC/ BG
Letter of credit:-A Letter of Credit (L/C) is a written document issued by the B
uyers'
Banker (BBK), at a request of the Buyer (B), in favour of the Seller(S), whereby
the
Buyer's Banker (BBK) gives an undertaking to the Seller(S) that, in the event of
the
Seller tendering the Bill of Exchange to the Seller's Banker (SBK), along with a
ll the
required documents, in strict compliance of all the terms and conditions stipula
ted in the
L/C, the entire amount of the bill will be paid to the Seller (S) by the Seller'
s Banker
(SBK), on behalf of the Buyer's Banker (BBK) immediately, as has been, in turn,
undertaken by the buyer to his own Banker(BBK).
Bank guarantee: -It is customary for the Bank, in normal course of business, to
issue
and execute guarantees in favor of third parties on behalf of the customers. The
Bank
guarantees are governed by various provisions as contained in the Indian Contrac
t Act,
1872. The commercial transactions, bank s customers are sometimes required to give
a
Bank Guarantee. This is mostly as an alternate to keep cash as a security deposi
t. The
third party who seeks the guarantee, not being aware of the customer s financial
standing prefers a bank guarantee. In turn the Bank, which very well understands
the
financial standing of the customer, undertakes the guarantee of the customer s fin
ancial
commitments or performance of contracts by him. The bank charges commission for
this
service, which depends on the security available and the financial stability of
the
customer.
AGENCY FUNCTIONS
Collecting of B/E, P-notes, cheques & securities
Selling of products of insurance co./ MF
Granting & issuing LC, traveler's cheque
Agent for any govt., local authority, etc
MERCHANT BANKING
Syndication of loans
Venture capital finance
Public issue management
Corporate counseling
Mergers & acquisitions
Portfolio management services
Investment counseling
E-BANKING
Electronic payment system
ATM
Tele-banking
Credit card and debit card
Online banking
MOBILE BANKING
Account services
Credit card services
DEMAT account
Loan account services
Bill services
Other services
DEPOSIT SCHEMES FOR NRI's
Foreign Currency Nonresident (FCNR-B) Deposits :
Tax Exemption
Choice of Currency
Remit in any Currency
Minimum & Maximum Amount
Joint account
Power of Attorney (P/A)
Nomination
Resident Foreign Currency (RFC):- Deposits Returning Indians for permanent
settlement, after staying abroad for not less than one year, can
.
Retain their savings in foreign currency in a RFC account.
.
Get the proceeds of FCNR (B)/NRE Deposits credited to this account.
Non Resident external (NRE):-Deposits can be placed in
.
Savings Bank A/c
.
Fixed Deposit A/c
Non Resident Ordinary (NRO) Deposits:-Where an Indian citizen having a resident
account leaves India and becomes non-resident, his resident account should be
designated as NRO account.
Where non-resident Indian receives income in India, he can open a NRO a/c with s
uch
funds.
Reserve Banks of India:
Establishment
The Reserve Bank of India was established on April 1, 1935 in accordance with th
e
provisions of the Reserve Bank of India Act, 1934.
The Central Office of the Reserve Bank was initially established in Calcutta but
was
permanently moved to Mumbai in 1937. The Central Office is where the Governor
sits and where policies are formulated.
Though originally privately owned, since nationalisation in 1949, the Reserve Ba
nk
is fully owned by the Government of India.
Guidelines on Ownership and Governance in Private
Sector Banks
Banks are "special" as they not only accept and deploy large amount of
uncollateralized public funds in fiduciary capacity, but they also leverage such
funds through credit creation. The banks are also important for smooth functioni
ng
of the payment system. In view of the above, legal prescriptions for ownership a
nd
governance of banks laid down in Banking Regulation Act, 1949 have been
supplemented by regulatory prescriptions issued by RBI from time to time. The
existing legal framework and significant current practices in particular cover t
he
following aspects:
i. The composition of Board of Directors comprising members with demonstrable
professional and other experience in specific sectors like agriculture, rural ec
onomy,
co-operation, SSI, law, etc., approval of Reserve Bank of India for appointment
of
CEO as well as terms and conditions thereof, and powers for removal of manageria
l
personnel, CEO and directors, etc. in the interest of depositors are governed by
various sections of the B.R. Act, 1949.
ii. Guidelines on corporate governance covering criteria for appointment of
directors, role and responsibilities of directors and the Board, signing of decl
aration
and undertaking by directors, etc., were issued by RBI on June 20, 2002 and June
25, 2004, based on the recommendations of Ganguly Committee and a review by
the BFS.
iii. Guidelines for acknowledgement of transfer/allotment of shares in private s
ector
banks were issued in the interest of transparency by RBI on February 3, 2004.
iv. Foreign investment in the banking sector is governed by Press Note dated Mar
ch
5, 2004 issued by the Government of India, Ministry of Commerce and Industries.
v. The earlier practice of RBI nominating directors on the Boards of all private
sector banks has yielded place to such nomination in select private sector banks
.
2. Against this background, it is considered necessary to lay down a comprehensi
ve
framework of policy in a transparent manner relating to ownership and governance
in the Indian private sector banks as described below.
3. The broad principles underlying the framework of policy relating to ownership
and governance of private sector banks would have to ensure that
(i) The ultimate ownership and control of private sector banks is well diversifi
ed.
While diversified ownership minimises the risk of misuse or imprudent use of
leveraged funds, it is no substitute for effective regulation. Further, the fit
and
proper criterion, on a continuing basis, has to be the over-riding consideration
in the
path of ensuring adequate investments, appropriate restructuring and consolidati
on
in the banking sector. The pursuit of the goal of diversified ownership will tak
e
account of these basic objectives, in a systematic manner and the process will b
e
spread over time as appropriate.
(ii) Important Shareholders (i.e., shareholding of 5 per cent and above) are fit
and
proper , as laid down in the guidelines dated February 3, 2004 on acknowledgement
for allotment and transfer of shares.
(iii) The directors and the CEO who manage the affairs of the bank are fit and
proper as indicated in circular dated June 25, 2004 and observe sound corporate
governance principles.
(iv) Private sector banks have minimum capital/net worth for optimal operations
and systemic stability.
(v) The policy and the processes are transparent and fair.
4. Minimum capital
The capital requirement of existing private sector banks should be on par with t
he
entry capital requirement for new private sector banks prescribed in RBI guideli
nes
of January 3, 2001, which is initially Rs.200 crore, with a commitment to increa
se
to Rs.300 crore within three years. In order to meet with this requirement, all
banks
in private sector should have a net worth of Rs.300 crore at all times. The bank
s
which are yet to achieve the required level of net worth will have to submit a t
ime-
bound programme for capital augmentation to RBI. Where the net worth declines to
a level below Rs.300 crore, it should be restored to Rs. 300 crore within a
reasonable time.
5. Shareholding
i. The RBI guidelines on acknowledgement for acquisition or transfer of shares
issued on February 3, 2004 will be applicable for any acquisition of shares of 5
per
cent and above of the paid up capital of the private sector bank.
ii. In the interest of diversified ownership of banks, the objective will be to
ensure
that no single entity or group of related entities has shareholding or control,
directly
or indirectly, in any bank in excess of 10 per cent of the paid up capital of th
e
private sector bank. Any higher level of acquisition will be with the prior appr
oval
of RBI and in accordance with the guidelines of February 3, 2004 for grant of
acknowledgement for acquisition of shares.
iii. Where ownership is that of a corporate entity, the objective will be to ens
ure that
no single individual/entity has ownership and control in excess of 10 per cent o
f that
entity. Where the ownership is that of a financial entity the objective will be
to
ensure that it is a well established regulated entity, widely held, publicly lis
ted and
enjoys good standing in the financial community.
iv, Banks (including foreign banks having branch presence in India)/FIs should n
ot
acquire any fresh stake in a bank s equity shares, if by such acquisition, the
investing bank s/FI s holding exceeds 5 per cent of the investee bank s equity
capital as indicated in RBI circular dated July 6, 2004.
v. As per existing policy, large industrial houses will be allowed to acquire, b
y way
of strategic investment, shares not exceeding 10 per cent of the paid up capital
of
the bank subject to RBI s prior approval. Furthermore, such a limitation will also
be
considered if appropriate, in regard to important shareholders with other
commercial affiliations.
vi. In case of restructuring of problem/weak banks or in the interest of consoli
dation
in the banking sector, RBI may permit a higher level of shareholding, including
by a
bank.
6. Directors and Corporate Governance
i. The recommendations of the Ganguly Committee on corporate governance in
banks have highlighted the role envisaged for the Board of Directors. The Board
of
Directors should ensure that the responsibilities of directors are well defined
and the
banks should arrange need-based training for the directors in this regard. While
the
respective entities should perform the roles envisaged for them, private sector
banks
will be required to ensure that the directors on their Boards representing speci
fic
sectors as provided under the B.R. Act, are indeed representatives of those sect
ors in
a demonstrable fashion, they fulfil the criteria under corporate governance norm
s
provided by the Ganguly Committee and they also fulfil the criteria applicable f
or
determining fit and proper status of Important Shareholders (i.e., shareholding of
5
per cent and above) as laid down in RBI Circular dated June 25, 2004.
ii. As a matter of desirable practice, not more than one member of a family or a
close relative (as defined under Section 6 of the Companies Act, 1956) or an
associate (partner, employee, director, etc.) should be on the Board of a bank.
iii. Guidelines have been provided in respect of 'Fit and Proper' criteria for d
irectors
of banks by RBI circular dated June 25, 2004 in accordance with the
recommendations of the Ganguly Committee on Corporate Governance. For this
purpose a declaration and undertaking is required to be obtained from the propos
ed /
existing directors
iv. Being a Director, the CEO should satisfy the requirements of the fit and prop
er
criteria applicable for directors. In addition, RBI may apply any additional
requirements for the Chairman and CEO. The banks will be required to provide all
information that may be required while making an application to RBI for approval
of appointment of Chairman/CEO.
7. Foreign investment in private sector banks
In terms of the Government of India press note the aggregate foreign investment
in
private banks from all sources (FDI, FII, NRI) cannot exceed 74 per cent. At all
times, at least 26 per cent of the paid up capital of the private sector banks w
ill have
to be held by resident Indians.
7.1 Foreign Direct Investment (FDI) (other than by foreign banks or foreign
bank group)
i. The policy already articulated in guidelines for determining fit and proper sta
tus
of shareholding of 5 per cent and above will be equally applicable for FDI. Henc
e
any FDI in private banks where shareholding reaches and exceeds 5 per cent eithe
r
individually or as a group will have to comply with the criteria indicated in th
e
aforesaid guidelines and get RBI acknowledgement for transfer of shares.
ii. To enable assessment of fit and proper the information on ownership/beneficial
ownership as well as other relevant aspects will be extensive.
7.2 Foreign Institutional Investors (FIIs)
i. Currently there is a limit of 10 per cent for individual FII investment with
the
aggregate limit for all FIIs restricted to 24 per cent which can be raised to 49
per
cent with the approval of Board/General Body. This dispensation will continue.
ii. The present policy requires RBI s acknowledgement for acquisition/transfer of
shares of 5 per cent and more of a private sector bank by FIIs based upon the po
licy
guidelines on acknowledgement of acquisition/transfer of shares issued. For this
purpose RBI may seek certification from the concerned FII of all beneficial inte
rest.
7.3 Non-Resident Indians (NRIs)
Currently there is a limit of 5 per cent for individual NRI portfolio investment
with
the aggregate limit for all NRIs restricted to 10 per cent which can be raised t
o 24
per cent with the approval of Board/General Body. Further, the policy guidelines
on
acknowledgement for acquisition/transfer will be applied.
8. Due diligence process
The process of due diligence in all cases of shareholders and directors as above
, will
involve reference to the relevant regulator, revenue authorities, investigation
agencies and independent credit reference agencies as considered appropriate.
9. Transition arrangements
i. The current minimum capital requirements for entry of new banks is Rs.200 cro
re
to be increased to Rs.300 crore within three years of commencement of business.
A
few private sector banks which have been in existence before these capital
requirements were prescribed have less than Rs.200 crore net worth. In the inter
est
of having sufficient minimum size for financial stability, all the existing priv
ate
banks should also be able to fulfil the minimum net worth requirement of Rs.300
crore required for a new entry. Hence any bank with net worth below this level w
ill
be required to submit a time bound programme for capital augmentation to RBI for
approval.
ii. Where any existing shareholding of any individual entity/group of entities i
s 5
per cent and above, due diligence outlined in the guidelines will be undertaken
to
ensure fulfillment of fit and proper criteria.
iii. Where any existing shareholding by any individual entity/group of related
entities is in excess of 10 per cent, the bank will be required to indicate a ti
me table
for reduction of holding to the permissible level. While considering such cases,
RBI
will also take into account the terms and conditions of the banking licences.
iv. Any bank having shareholding in excess of 5 per cent in any other bank in In
dia
will be required to indicate a time bound plan for reduction in such investments
to
the permissible limit. The parent of any foreign bank having presence in India,
having shareholding directly or indirectly through any other entity in the banki
ng
group in excess of 5 per cent in any other bank in India will be similarly requi
red to
indicate a time bound plan for reduction of such holding to 5 per cent.
v. Banks will be required to undertake due diligence before appointment of direc
tors
and Chairman/CEO on the basis of criteria that will be separately indicated and
provide all the necessary certifications/information to RBI.
vi. Banks having more than one member of a family, or close relatives or associa
tes
on the Board will be required to ensure compliance with these requirements at th
e
time of considering any induction or renewal of terms of such directors.
vii. Action plans submitted by private sector banks outlining the milestones for
compliance with the various requirements for ownership and governance will be
examined by RBI for consideration and approval.
10. Continuous monitoring arrangements
i. Where RBI acknowledgement has already been obtained for transfer of shares of
5 per cent and above, it will be the bank s responsibility to ensure continuing
compliance of the fit and proper criteria and provide an annual certificate to the
RBI of having undertaken such continuing due diligence.
ii. Similar continuing due diligence on compliance with the fit and proper criteri
a
for directors/CEO of the bank will have to be undertaken by the bank and certifi
ed
to RBI annually.
iii. RBI may, when considered necessary, undertake independent verification of fi
t
and proper test conducted by banks through a process of due diligence as describe
d
in paragraph 8
0621000460
11. On the basis of such continuous monitoring, RBI will consider appropriate
measures to enforce compliance.
Guidelines on Fair Practices Code
.
Loan application forms shall be comprehensive to include information about rate
of interest (fixed/floating) and manner of charging (monthly/quarterly/half
yearly/ rest), process fees and other charges, penal interest rates, pre-payment
options and any other matter which affects the interest of the borrower, so that
a
meaningful comparison with that of other banks can be made and informed
decision can be taken by the borrower.
.
Banks and Financial Institution should devise a system of giving
acknowledgement for receipt of all loans application. Banks/ Financial
Institutions should verify the loan application within a reasonable period of ti
me.
If additional details / documents are required, they should intimate the borrowe
rs
immediately. If all the requirements are complied with the borrowers, banks/
Financial Institution should acknowledge for the same and state the specific tim
e
period from the date of acknowledgement within which a decision on the specific
loan request will be conveyed to the borrowers.
.
Acknowledgement should also state the amount of process fees paid or to be
paid and the extent to which such fees shall be refunded in the event of rejecti
on
of any application for loan.
0621000460
.
In the case of rejection of any loan application, lenders should convey in writi
ng
the specific reasons thereof.
.
Lenders should ensure that there is proper assessment of credit requirement of
borrowers. The credit limit, which may be sanctioned, should be mutually
settled.
.
Terms and conditions and other caveats governing credit facilities given by
banks / Financial Institution arrived at after negotiation by the lending instit
ution
and the borrower should be reduced in writing duly witnessed and certified by
the authorised sanctioning authority; in respect of advances sanctioned by the
Board of Directors or its committee the documents of understanding should be
certified by the authorised signatory preferably at company secretary level. A
copy of such agreement should be made available to the borrowers for their
record.
.
Lenders should ensure timely disbursement of loans sanctioned.
.
Stipulation of margin and security should be based on due diligence and credit
worthiness of borrowers.
.
Lenders should keep the borrowers apprised of the state of their accounts from
time to time and shall give notice of any change in the terms and conditions
including interest rates and charges are effected only prospectively. To ensure
the
above, Banks / Financial Institution should create appropriate information
dissemination mechanism.
.
The loan agreement should clearly specify the liability of lenders to borrowers
in
regard to allowing drawings beyond the sanctioned limits, honouring the cheques
issued for the purpose other than agreed, disallowing large cash withdrawals and
obligation to meet further requirements of the borrowers on account of growth in
business etc. without proper revision and sanction in credit limits, and
disallowing drawings on a borrower account on its classification as a non-
performing assets or on account of non-compliance with the terms of sanction.
0621000460
.
Lenders should give reasonable notice to borrowers before taking decision to
recall / accelerate payment or performance under the agreement or seeking
additional securities.
.
Lenders should release all securities on receiving payment of loan or realisatio
n
of loan subject to any legitimate right of lien for any other claim lenders may
have against borrowers. If such right of set off is to be exercised, borrowers s
hall
be given notice about the same with full particulars about the remaining claims
and the documents under which lenders are entitled to retain the securities till
the
relevant claims are settled / paid.
ORGANIZATION PROFILE
FORMATION OF THE COMPANY

The Housing Development Finance Corporation Limited (HDFC) was amongst the first
to receive an 'in principle' approval from the Reserve Bank of India (RBI) to se
t up a
bank in the private sector, as part of the RBI's liberalization of the Indian Ba
nking
Industry in 1994. The bank was incorporated in August 1994 in the name of 'HDFC
Bank Limited', with its registered office in Mumbai, India. HDFC Bank commenced
operations as a Scheduled Commercial Bank in January 1995.
PROMOTER
HDFC is India's premier housing finance company and enjoys an impeccable track
record in India as well as in international markets. Since its inception in 1977
, the
Corporation has maintained a consistent and healthy growth in its operations to
remain
the market leader in mortgages. Its outstanding loan portfolio covers well over
a million
39
dwelling units. HDFC has developed significant expertise in retail mortgage loan
s to
different market segments and also has a large corporate client base for its hou
sing
related credit facilities. With its experience in the financial markets, a stron
g market
reputation, large shareholder base and unique consumer franchise, HDFC was ideal
ly
positioned to promote a bank in the Indian environment.
· BUSINESS FOCUS
HDFC Bank's mission is to be a World-Class Indian Bank. The objective is to buil
d
sound customer franchises across distinct businesses so as to be the preferred p
rovider of
banking services for target retail and wholesale customer segments, and to achie
ve
healthy growth in profitability, consistent with the bank's risk appetite. The b
ank is
committed to maintain the highest level of ethical standards, professional integ
rity,
corporate governance and regulatory compliance. HDFC Bank's business philosophy
is
based on four core values Operational Excellence, Customer Focus, Product
Leadership and People.
· CAPITAL STRUCTURE
The authorized capital of HDFC Bank is Rs550 crore (Rs5.5 billion). The paid-up
capital is Rs424.6 crore (Rs.4.2 billion). The HDFC Group holds 19.4% of the ban
k's
equity and about 17.6% of the equity is held by the ADS Depository (in respect o
f the
bank's American Depository Shares (ADS) Issue). Roughly 28% of the equity is hel
d by
Foreign Institutional Investors (FIIs) and the bank has about 570,000 shareholde
rs. The
shares are listed on the Stock Exchange, Mumbai and the National Stock Exchange.
The
bank's American Depository Shares are listed on the New York Stock Exchange (NYS
E)
under the symbol 'HDB'.
· TIMES BANK AMALGAMATION
In a milestone transaction in the Indian banking industry, Times Bank Limited (a
nother
new private sector bank promoted by Bennett, Coleman & Co./Times Group) was
merged with HDFC Bank Ltd., effective February 26, 2000. As per the scheme of
amalgamation approved by the shareholders of both banks and the Reserve Bank of
India, shareholders of Times Bank received 1 share of HDFC Bank for every 5.75 s
hares
of Times Bank. The acquisition added significant value to HDFC Bank in terms of
increased branch network, expanded geographic reach, enhanced customer base, ski
lled
manpower and the opportunity to cross-sell and leverage
alternative delivery channels.
· DISTRIBUTION NETWORK
HDFC Bank is headquartered in Mumbai. The Bank at present has an enviable networ
k
of over 1229 branches spread over 444 cities across India. All branches are link
ed on an
online real-time basis. Customers in over 120 locations are also serviced throug
h
Telephone Banking. The Bank's expansion plans take into account the need to have
a
presence in all major industrial and commercial centers where its corporate cust
omers
are located as well as the need to build a strong retail customer base for both
deposits
and loan products. Being a clearing/settlement bank to various leading stock exc
hanges,
the Bank has branches in the centers where the NSE/BSE has a strong and active
member base. The Bank also has a network of about over 2526 networked ATMs acros
s
these cities. Moreover, HDFC Bank's ATM network can be accessed by all domestic
and
international Visa/MasterCard, Visa Electron/Maestro, Plus/Cirrus and American
Express Credit/Charge cardholders.
· TECHNOLOGY
HDFC Bank operates in a highly automated environment in terms of information
technology and communication systems. All the bank's branches have online
connectivity, which enables the bank to offer speedy funds transfer facilities t
o its
customers. Multi-branch access is also provided to retail customers through the
branch
network and Automated Teller Machines (ATMs). The Bank has made substantial effo
rts
and investments in acquiring the best technology available internationally, to b
uild the
infrastructure for a world class bank. The Bank's business is supported by scala
ble and
robust systems which ensure that our clients always get the finest services we o
ffer. The
Bank has prioritized its engagement in technology and the internet as one of its
key
goals and has already made significant progress in web-enabling its core busines
ses. In
each of its businesses, the Bank has succeeded in leveraging its market position
,
expertise and technology to create a competitive advantage and build market shar
e.
· BUSINESS FOCUS
HDFC Bank's mission is to be a World-Class Indian Bank. The objective is to buil
d
sound customer franchises across distinct businesses so as to be the preferred p
rovider of
banking services for target retail and wholesale customer segments, and to achie
ve
healthy growth in profitability, consistent with the bank's risk appetite. The b
ank is
committed to maintain the highest level of ethical standards, professional integ
rity,
corporate governance and regulatory compliance. HDFC Bank's business philosophy
is
based on four core values- Operational Excellence, Customer Focus, Product Leade
rship
and People.
· PRODUCT SCOPE:
HDFC Bank offers a bunch of products and services to meet the every need of the
people. The company cares for both, individuals as well as corporate and small a
nd
medium enterprises. For individuals, the company has a range accounts, investmen
t, and
pension scheme, different types of loans and cards that assist the customers. Th
e
customers can choose the suitable one from a range of products which will suit t
heir life-
stage and needs. For organizations the company has a host of customized solution
s that
range from
Funded services, Non-funded services, Value addition services, Mutual fund etc.
These
affordable plans apart from providing long term value to the employees help in
enhancing
goodwill of the company. The products of the company are categorized into variou
s
sections which are as follows:

· Accounts and deposits.
· Loans.
· Investments and Insurance.
· Forex and payment services.
· Cards.
· Customer center.
PRODUCTS AND SERVICES AT A GLANCE

1. PERSONAL BANKING
A. Accounts & Deposits
- Regular Savings Account
- Savings Plus Account
- SavingsMax Account
- Senior Citizens Account
- No Frills Account
- Institutional Savings Account
- Payroll Salary Account
- Classic Salary Account
- Regular Salary Account
- Premium Salary Account
- Defence Salary Account
- Kid's Advantage Account
- Pension Saving Bank Account
- Family Savings Account
- Kisan No Frills Savings Account
- Kisan Club Savings Account
- Plus Current Account
-Trade Current Account
- Premium Current Account
- Regular Current Account
-Apex Current Account
- Max Current Account
- Reimbursement Current Account
- RFC - Domestic Account
- Regular Fixed Deposit
- Super Saver Account
- Sweep-in Account
- HDFC Bank Preferred
- Private Banking
B. Loans
- Personal Loans
- Home Loans
-Two Wheeler Loans
-New Car Loans
-Used Car Loans
- Overdraft against Car
-Express Loans
- Loan against Securities
- Loan against Property
- Commercial Vehicle Finance
-Working Capital Finance
- Construction Equipment Finance
- Offers & Deals
- Customer Center
C. Investments & Insurance
- Mutual Funds
-Insurance
-Bonds
- Financial Planning
- Knowledge Centre
- Equities & Derivatives
-Mudra Gold Bar
D. Forex Services
-Trade Finance
-Travelers Cheques
- Foreign Currency Cash
- Foreign Currency Drafts
- Foreign Currency Cheque Deposits
- Foreign Currency Remittances
- Cash To Master
-ForexPlus Card
E. Payment Services
- Net Safe
- Prepaid Refill
- Bill Pay
- Direct Pay
-Visa Money Transfer
- E-Monies Electronic Funds Transfer
- Excise & Service Tax Payment
F. Access Your Bank
- One View
- Insta Alerts
- Mobile Banking
-ATM
-Phone Banking
- Branch Network
G. Cards
- Silver Credit Card
- Gold Credit Card
-Woman's Gold Credit Card
- Platinum plus Credit Card
-Titanium Credit Card
-Value plus Credit Card
- Health plus Credit Card
- HDFC Bank Idea Silver Card
- HDFC Bank Idea Gold Card
- Compare Cards
-Transfer & Safe
-Track your Credit Card
H. Get More from Your Card
- Offers & Savings
- My Rewards
- Insta Wonderz
-Add-On Cards
- Credit Card Usage Guide
- Easy EMI
- Net safe
- Smart Pay
- Secure Plus
- My City Benefit Card
- Debit Cards
- Easy ShopInternational Debit Card
- Easy Shop Gold Debit Card
- Easy ShopInternational Business Debit Card
- Easy ShopWoman's Advantage Debit Card
- Prepaid Cards
-Forex Plus Card
-Kisan Card
I. Customer Centre
- Offers & Deals
-Winners of Contests & Promotions
2. Wholesale Banking
A. Corporate
Funded Services
Non Funded Services
Value Added Services
Internet Banking
B. Small & Medium Enterprises
Funded Services
Non-Funded Services
Specialized Services
Internet Banking
C. Financial Institutions & Trusts
Banks
Financial Institutions
Mutual Funds
Stock Brokers
MILESTONES IN THE HISTORY
HDFC Bank began its operations in 1995 with a simple mission: to be a "World-cla
ss
Indian Bank". They realized that only a single-minded focus on product quality a
nd
service excellence would help us get there. Today, they are proud to say that th
ey are
well on our way towards that goal.
It is extremely gratifying that their efforts towards providing customer conveni
ence have
been appreciated both nationally and internationally.
AWARDS & ACHIEVEMENTS of HDFC BANK
Business Today-Monitor Group survey One of India's "Most Innovative
Companies".
Financial Express-Ernst & Young Award Best Bank Award in the Private Sector
category
The Asian Banker Excellence in Retail
Financial Services Awards
Best Retail Bank in India.
Asian Banker Managing Director Aditya Puri won the
Leadership achievement Award for
India
Outlook Money & NDTV Profit Best Bank Award in the Private sector
category
MERGER
HDFC Bank and Centurion Bank of Punjab merger at share swap ratio of 1:29.The
Boards of HDFC Bank and Centurion Bank of Punjab met on 25 February, 2008 and
approved, subject to due diligence, the share swap ratio for the proposed merger
of
Centurion Bank of Punjab with HDFC Bank. The Scheme of Amalgamation envisages a
share exchange ratio of one share of HDFC Bank for twenty nine shares of Centuri
on
Bank of Punjab.
The combined entity would have a nationwide network of 1,148 branches (the large
st
amongst private sector Banks) a strong deposit base of around Rs. 1,200 billion
and net
advances of around Rs. 850billion. The balance sheet size of the combined entity
would
be over Rs. 1,500 billion.
Mr. Shailendra Bhandari, Managing Director and CEO, Centurion Bank of Punjab
said, We are extremely pleased to receive the go ahead from our board to pursue t
his
opportunity. A merger between the banks provides significant synergies to the co
mbined
entity. The proposed merger would further improve the franchise and customer
proposition offered by the individual
banks.
SUGGESTIONS:
Finally some recommendations for the company are as follows:
· To make people aware about the benefit of becoming HDFC Bank s Sales
Executive, following activities of advertisement should be done through
1. Print Media.
2. Hoarding & Banners.
3. Stalls in Trade Fares
4. Distribution of leaflets containing details information.
· The bank should provide life time valid ATM card to all its customers.
0621000460
Minimum balance for savings account should be reduced from Rs 5000 to Rs

1000, so that people who are not financially strong enough can maintain their
account properly.
The company should provide a pass book to all its customers
Make people understand about the various benefits of its products.
Company should organize the program in the society, so that people will be
aware about the company and different products of the bank
Company should open more branches in different cities.
PUNJAB NATIONAL BANK
ORIGIN
Punjab national bank was established in 1895 at Lahore, undivided India, Punjab
National Bank (PNB) has the distinction of being the first Indian bank to have b
een
started solely with Indian capital. The bank was nationalized in July 1969 along
with 13
other banks. From its modest beginning, the bank has grown in size and stature t
o
become a front-line banking institution in India at present.
PROFILE
With its presence virtually in all the important centers of the country, Punjab
National Bank offers a wide variety of banking services which include corporate
and
personal banking, industrial finance, agricultural finance, financing of trade a
nd
international banking. Among the clients of the Bank are Indian conglomerates, m
edium
and small industrial units, exporters, non-resident Indians and multinational co
mpanies.
The large presence and vast resource base have helped the Bank to build strong l
inks
with trade and industry.
Punjab National Bank is serving over 3.5 crore customers through 4540 Offices
including 421 extension counters - largest amongst Nationalized Banks.
Punjab National Bank with 112 year tradition of sound and prudent banking is one
among 300 global companies and seven Indian companies which are expected to emer
ge
as challengers to World s leading blue chip companies. While among top 1000 world
banks, The Banker , the leading magazine in London, has placed PNB at the 248th
position, the bank features at 1308th position among Forbe s Global 2000 list of g
lobal
giants and fast growing companies.
At the same time, the bank has been conscious of its social responsibilities by
financing agriculture and allied activities and small scale industries (SSI). Co
nsidering
the importance of small scale industries bank has established 31 specialised bra
nches to
finance exclusively such industries.
Strong correspondent banking relationship which Punjab National Bank maintains
with over 200 leading international banks all over the world enhances its capabi
lities to
handle transactions world-wide. Besides, bank has Rupee Drawing Arrangements wit
h
15 exchange companies in the Gulf and one in Singapore. Bank is a member of the
SWIFT and over 150 branches of the bank are connected through its computer-based
terminal at Mumbai. With its state-of-art dealing rooms and well-trained dealers
, the
bank offers efficient forex dealing operations in India.
The bank has been focusing on expanding its operations outside India and has
identified some of the emerging economies which offer large business potential.
Bank
has set up representative offices at Almaty: Kazakhistan, Shanghai: China and in
London. Besides, Bank has opened a fully fledged Branch in Kabul, Afghanistan.
Keeping in tune with changing times and to provide its customers more efficient
and speedy service, the Bank has taken major initiative in the field of computer
ization.
All the Branches of the Bank have been computerized. The Bank has also launched
aggressively the concept of "Any Time, Any Where Banking" through the introducti
on
of Centralized Banking Solution (CBS) and over 2409 offices have already been br
ought
under its ambit.
PNB also offers Internet Banking services in the country for Corporates as well
as
individuals. Internet Banking services are available through all Branches of the
Bank
networked under CBS. Providing 24 hours, 365 days banking right from the PC of t
he
user, Internet Banking offers world class banking facilities like anytime, anywh
ere
access to account, complete details of transactions, and statement of account, o
nline
information of deposits, loans overdraft account etc. PNB has recently introduce
d
Online Payment Facility for railway reservation through IRCTC Payment Gateway
Project and Online Utility Bill Payment Services which allows Internet Banking a
ccount
holders to pay their telephone, mobile, electricity, insurance and other bills a
nytime from
anywhere from their desktop.
Another step taken by PNB in meeting the changing aspirations of its clientele i
s
the launch of its Debit card, which is also an ATM card. It enables the card hol
der to buy
goods and services at over 99270 merchant establishments across the country. Bes
ides,
the card can be used to withdraw cash at more than 25000 ATMs, where the 'Maestr
o'
logo is displayed, apart from the PNB's over 1094 ATMs and tie up arrangements w
ith
other Banks.
VISION AND MISSION
VISION
To evolve and position the Bank as a world class progressive cost effective and
customer friendly institution providing comprehensive financial and related serv
ices;
integrating frontiers of technology and serving various segments of society espe
cially
the weaker section; committed to excellence in serving the public and also excel
lence in
serving the public and also excelling in corporate values.
MISSION
To provide excellent professional services and improve its position as a leader i
n the
field of financial and related services; build and maintain a team of motivated
and
committed workforce with high work ethos; use latest technology aimed at custome
r
satisfaction and act as an effective catalyst for socio-economic development
AWARDS & ACHIEVEMENTS of PUNJAB NATIONAL BANK
"Best IT Team of the Year Award" One of India's "Most Innovative
Companies".
Best IT User in Banking & Financial by NASSCOM in partnership with
Services Industry - 2004 Economic Times
Golden Peacock Award for Excellence in Corporate Governance -
2005 by Institute of Directors
National Award for Excellence in SSI Ranked 2nd for 4 consecutive years -2002,
Lending 2003, 2004 & 2005
Money Outlook Award 2004 Runner up in 'Best Bank (public Sector) of
the year Award' -2005
THE DIRECORS OF PUNJAB NATIONAL BANK
BOARD FO DIRECTORS
Dr K.C. Chakrabarthy Chairman & Managing Director
Shri K.Raghuraman Executive Director
Shri .J.M.Gerg Exective Director
DIRECTOR
Shri .Ravneet Kaur Govt. of India Nominee Director
Shri .L.M.Fonseca Reserve bank of India Nominee Director
Shri .S.R.Khurana Director Rep.C.A.catagory
Shri P.K.Nayar Officer Employee Director
Shri.Mohan Lal Workmen Employee director
Dr.Harsh Mahajan Share holder Director
Shri.Prakash Agrawal Shareholder Director
Shri Gautam P.Khandelwal Part-time non-official Director
Shri Mushtaq A Antulay Part-time non-official Director

PNB`S KEY COMMITMENTS
We promise to:
1) Act fairly and reasonably in all our dealings with you by:
meeting the commitments and standards in this Code, for the products and service
s we
offer, and in the procedures and practices our staff follow
making sure our products and services meet relevant laws and regulations
our dealings with you will rest on ethical principles of integrity and transpare
ncy.
2) Help you to understand how our financial products and services work by:
giving you information about them in plain Hindi and/or English and/or the local
language
explaining their financial implications and
helping you chooses the one that meets your needs.
3) Deal quickly and sympathetically with things that go wrong by:
correcting mistakes quickly
handling your complaints quickly
telling you how to take your complaint forward if you are still not satisfied an
d
reversing any bank charges that we apply due to our mistake.
4) Publicise this Code, put it on our website and have copies available for you
on
request.
SWOT ANALYSIS
STRENGTHS:
.
.
Strong growth in business
.
.
Good branch network
.
.
Highest CASA among PSU
.
.
Highest NIMs compared to peers
.
.
Fine growth in fee income last year
.
.
De-risked investment portfolio
.
.
Adequate Capital
.
.
Proactive on technology front.
WEAKNESS:
.
.
Higher Delinquencies
.
.
Higher provisions deterring growth in net profits
.
.
No development on insurance venture
.
.
Slower growth on international front
.
.
Slow-down in treasury profits
.
.
Its subsidiaries PNB Housing Finance & PNB Gilts are not impressive
OPPORTUNITIES:
.
.
Expansion on international front
.
.
Ample opportunity to expand business, as the economy is doing well.
.
.
Growth in Insurance and Mutual Fund business
THREATS:
.
.
Entry of foreign banks
.
.
Sharp rise in interest rates can hamper economic growth
.
.
Regulatory amendments
.
.
Implementation of Basel II requires higher capital
.
.
Downturn in Agriculture growth
PRODUCTS AND SERVICES:
PRODUCTS:
.
Personal banking
.
Corporate banking
.
Home loans
.
About loan
.
ATM/DEBIT cards
.
Deposit interest rates
SERVICES
.
Locker facilities
.
Depository services
.
Senior citizen scheme
.
RTGS/NEFT/SFMS:PNB
.
Merchant banking
.
Online tax accounting system
.
Electronic fund transfer
.
Electronic clearing service
.
Offshore banking
.
12 hours banking
QUESTIONNAIRE
Dear Sir/Madam,
I am a student of Indian Institute of Management, Ghaziabad. As part of the
requirements for my Post Graduation Diploma in Business Management I am
required to do a research based project. Kindly spend a few minutes of your
valuable time and fill in this questionnaire.
1. Your Age: ____________________
2. Education Qualification
.
Undergraduate .
.
Graduate .
.
Post graduate .
3. Marital Status.
.
Married .
.
Single .
No. of Children: __________
4. Occupation.
.
Business .
.
Profession .
.
Service .
(Please mention below the type of business/profession you are in incase of
service please mention your organization name and designation)
5. Your annual household income.
.
<than 2 lack .
.
Between 2 to 5 lack .
.
Between 5 to 8 lack .
.
>than 8 lack .
6. Faced saving problems?

.
Yes .
.
No .
7. Do you have Credit Card?

.
Yes .
.
No .
If yes, which Bank?

8. Kind of services Banks you are enjoying
9. Do you have loans requirement?
.
Yes .
.
No .
10. From where do you like to save money?

.
Private bank .
.
Nationalise banks .
11. Which Banks facility you like more?

.
Private bank .
.
Nationalise banks .
And why?
12. While saving in a Bank, what is your priority?
13. Is Central Banking System beneficial for you?
.
Yes .
.
No .
14. Does you use Internet Banking?
.
Yes .
.
No .
And how it will help you?

Date:
Signature
Place:
Thank You

Project Report On Indian Banking System

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INDIAN BANKING SYSTEM 0621000460

POST GARDUATE DIPLOMA IN BUSINESS

INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY

· Objectives of the study

Scope of Indian Bank 8

Services Provided by Banks 13

Guidelines Provided by the RBI

Guidelines on Fair Practices Code

I express my heartiest gratitude to Mr. V.K SHARMA (SENIOR MANAGERPNB)

OBJECTIVES OF THE STUDY

covers whole subject in concise manner.

SCOPE OF THE STUDY

plans; there has also been a growth in retail banking.

1. The project was constrained by time limit of two months.

Scheduled Banks Commercial Banks Co-Operative Banks

Private Sector Bank (30)

Public Sector Banks (27)

Old (22) New (8)

INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY

Definition of the Bank:-Financial institution whose primary activity is to act a

Banks provide two types of services

INDIAN INSTITUTE OF MANAGEMENT TECHNOLOGY

FUND BASED FACILITY

FUND BASED SREVICES

Maximum exposure permitted for all borrowers

Limits sanctioned to borrower

FORMATION OF THE COMPANY

sections which are as follows:

PRODUCTS AND SERVICES AT A GLANCE

Minimum balance for savings account should be reduced from Rs 5000 to Rs

Shri Mushtaq A Antulay Part-time non-official Director

6. Faced saving problems?

7. Do you have Credit Card?

If yes, which Bank?

10. From where do you like to save money?

11. Which Banks facility you like more?

And how it will help you?

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