CUSTOMER SATISFACTION

AT

PUNJAB NATIONAL BANK

SUPERVISOR SUBMITTED BY

Dr. Suhasini Parashar Anuja

(Head, Deptt. Of BBA (B&I)

Business Administration) 5th Semester

Enrollment No:

0051491807

SESSION: 2007 - 2010

MAHARAJA SURAJMAL INSTITUTE

(AFFILIATED BY GURU GOBIND SINGH

INDRAPRASTHA UNIVERSITY)

C-4 JANAK PURI, NEW DELHI-110058.

CERTIFICATE

This is to certify that project titled ‘Customer satisfaction at PNB ’ is

prepared by Anuja is being Submitted for the partial fulfillment of the

Master’s degree in Business Administration Programme at Maharaja

Surajmal Institute, Guru Gobind Singh Indraprastha University,

Delhi. He has successfully completed the project under my constant

guidance and support.

Signature of the Project Guide

(Dr, Suhasini Parashar) Anuja

BBA 5th sem.

PREFACE
Summer training is a very important part of an MBA curriculum.

It provides an optimistic iconography for ‘Future’ existence through

which students are able to see the real industrial environment which

gives an opportunity to relate theory with practice.

I undertook two months training programme at Punjab National Bank

(Nangloi) and worked on the project “Customer Satisfaction at PNB “.

This report is the knowledge acquired by me during this period of

training.

FEATURE OF THIS REPORT:

Several features of this report are designed to make it particularly easy

for professionals and students to understand the customer’s perception

about the financial products and services offered by the bank.

STRUCTURE:

An empirical field approach complementing the text is followed

EMPIRICAL APPROACH:

This report presents highly technical subject matter without

complex formulas by using a balance of text and figures. The

approximately 20 figures accompanying the text provide a visual and

intuitive opportunity for understanding the material.

HIGHLIGHTED POINTS:

Important points are highlighted at appropriate places

to stress their importance.

APPENDIXES:

The appendixes are intended to provide quick

reference material or a review of materials needed to

understand the concepts discussed in this report.

ACKNOWLEDGEMENT

A Project usually falls short of its expectations unless guided by the

right person at the right time. This Project would not have

completed without the direct or indirect help and guidance of

such luminaries in Punjab National bank. They provided us with the

necessary resources and an environment conducive for healthy

learning and training. They provided us with the required amount of

freedom to exercise our skill under their able guidance.

At the outset, I would like to take this opportunity to

gratefully acknowledge the very kind and patient guidance and

encouragement I have received from our Project Guide Mr. Pramod

Kumar Bhatia (Customer Care Officer) and Mr. HARISH SAIGAL

(BRANCH MANAGER) throughout their critical evaluation and

suggestion at every stage of the Project, this report could never have

reached its present form.

I would be failing in my duties if I forget to mention the name of Dr.

Suhasini Parashar (Project Guide, msi) for her unconditional support

during the course of the project. I would like to extend my thanks to

my college ‘MAHARAJA SURAJMAL INSTITUTE’ for the facilities availed

to me in terms of library work.

Last but not least I would like to thank all the respondents for giving

their precious time and relevant information and experience, I

required, without which the Project would have been incomplete.

Anuja
CHAPTER 1

1.1 INTRODUCTION TO BANKING IN INDIA

The banking section will navigate through all the aspects of the

Banking System in India. It will discuss upon the matters with the birth

of the banking concept in the country to new players adding their

names in the industry in coming few years.

The banker of all banks, Reserve Bank of India (RBI), the Indian Banks

Association (IBA) and top 20 banks like IDBI, HSBC, ICICI, ABN AMRO,

etc. has been well defined under three separate heads with one page

dedicated to each bank.

However, in the introduction part of the entire banking cosmos, the

past has been well explained under three different heads namely:

· History of Banking in India

· Nationalization of Banks in India

· Scheduled Commercial Banks in India

The first deals with the history part since the dawn of banking system

in India. Government took major step in the 1969 to put the banking

sector into systems and it nationalized 14 private banks in the

mentioned year. This has been elaborated in Nationalization Banks in

India. The last but not the least explains about the scheduled and

unscheduled banks in India. Section 42 (6) (a) of RBI Act 1934 lays

down the condition of scheduled commercial banks. The description

along with a list of scheduled commercial banks are given on this page

1.1.1HISTORY OF BANKING IN INDIA

Without a sound and effective banking system in India it cannot have a

healthy economy. The banking system of India should not only be

hassle free but it should be able to meet new challenges posed by the

technology and any other external and internal factors.

For the past three decades India's banking system has several

outstanding achievements to its credit. The most striking is its

extensive reach. It is no longer confined to only metropolitans or

cosmopolitans in India. In fact, Indian banking system has reached

even to the remote corners of the country. This is one of the main

reasons of India's growth process.

The government's regular policy for Indian bank since 1969 has paid

rich dividends

With the nationalization of 14 major private banks of India.

Not long ago, an account holder had to wait for hours at the bank

counters for getting a draft or for withdrawing his own money. Today,

he has a choice. Gone are days when the most efficient bank

transferred money from one branch to other in two days. Now it is

simple as instant messaging or dials a pizza. Money has become the

order of the day.

The first bank in India, though conservative, was established in 1786.

From 1786 till today, the journey of Indian Banking System can be

segregated into three distinct phases. They are as mentioned below:

· Early phase from 1786 to 1969 of Indian Banks

· Nationalization of Indian Banks and up to 1991 prior to Indian

banking sector Reforms.

· New phase of Indian Banking System with the advent of Indian

Financial

& Banking Sector Reforms after 1991.

To make this write-up more explanatory, I prefix the scenario as Phase

I, Phase II and Phase III.

Phase I

The General Bank of India was set up in the year 1786. Next came

Bank of Hindustan and Bengal Bank. The East India Company

established Bank of Bengal (1809), Bank of Bombay (1840) and Bank

of Madras (1843) as independent units and called it Presidency Banks.

These three banks were amalgamated in 1920 and Imperial Bank of

India was established which started as private shareholders banks,

mostly Europeans shareholders.

In 1865 Allahabad Bank was established and first time exclusively by

Indians, Punjab National Bank Ltd. was set up in 1894 with

headquarters at Lahore. Between 1906 and 1913, Bank of India,

Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and

Bank of Mysore were set up. Reserve Bank of India came in 1935.

During the first phase the growth was very slow and banks also

experienced periodic failures between 1913 and 1948. There were

approximately 1100 banks, mostly small. To streamline the functioning

and activities of commercial banks, the Government of India came up

with The Banking Companies Act, 1949 which was later changed to

Banking Regulation Act 1949 as per amending Act of 1965 (Act No. 23

of 1965). Reserve Bank of India was vested with extensive powers for

the supervision of banking in India as the Central Banking Authority.

During those day’s public has lesser confidence in the banks. As an

aftermath deposit mobilisation was slow. Abreast of it the savings bank

facility provided by the Postal department was comparatively safer.

Moreover, funds were largely given to traders.

Phase II

Government took major steps in this Indian Banking Sector Reform

after independence. In 1955, it nationalized Imperial Bank of India

with extensive banking facilities on a large scale especially in rural and

semi-urban areas. It formed State Bank of India to act as the principal

agent of RBI and to handle banking transactions of the Union and

State Governments all over the country.

Seven banks forming subsidiary of State Bank of India was

nationalized in 1960 on 19th July, 1969, major process of

nationalization was carried out. It was the effort of the then Prime

Minister of India, Mrs. Indira Gandhi. 14 major commercial banks in

the country were nationalized.

Second phase of nationalization Indian Banking Sector Reform was

carried out in 1980 with seven more banks. This step brought 80% of

the banking segment in India under Government ownership.

The following are the steps taken by the Government of India to

Regulate Banking Institutions in the Country:

· 1949: Enactment of Banking Regulation Act.

· 1955: Nationalization of State Bank of India.

· 1959: Nationalization of SBI subsidiaries.

· 1961: Insurance cover extended to deposits.

· 1969: Nationalization of 14 major banks.

· 1971: Creation of credit guarantee corporation.

· 1975: Creation of regional rural banks.

· 1980: Nationalization of seven banks with deposits over 200

crore.

After the nationalization of banks, the branches of the public sector

bank India rose to approximately 800% in deposits and advances took

a huge jump by 11,000%.

Banking in the sunshine of Government ownership gave the public

implicit faith and immense confidence about the sustainability of these

institutions.

Phase III

this phase has introduced many more products and facilities in the

banking sector in its reforms measure. In 1991, under the

chairmanship of M Narasimham, a committee was set up by his name

which worked for the liberalisation of banking practices.

The country is flooded with foreign banks and their ATM stations.

Efforts are being put to give a satisfactory service to customers. Phone

banking and net banking is introduced. The entire system became

more convenient and swift. Time is given more importance than

money.

The financial system of India has shown a great deal of resilience. It is

sheltered from any crisis triggered by any external macroeconomics

shock as other East Asian Countries suffered. This is all due to a

flexible exchange rate regime, the foreign reserves are high, the capital
account is not yet fully convertible, and banks and their customers

have limited foreign exchange exposure.

1.1.2SCHEDULED COMMERCIAL BANKS IN INDIA

The commercial banking structure in India consists of:

· Scheduled Commercial Banks in India

· Unscheduled Banks in India

Scheduled Banks in India constitute those banks which have been

included in the Second Schedule of Reserve Bank of India (RBI) Act,

1934. RBI in turn includes only those banks in this schedule which

satisfy the criteria laid down vide section 42 (6) (a) of the Act.

As on 30th June, 1999, there were 300 scheduled banks in India

having a total network of 64,918 branches. The scheduled commercial

banks in India comprise of State bank of India and its associates (8),

nationalized banks (19), foreign banks (45), private sector banks (32),

co-operative banks and regional rural banks.

"Scheduled banks in India" means the State Bank of India constituted

under the State Bank of India Act, 1955 (23 of 1955), a subsidiary

bank as defined in the State Bank of India (Subsidiary Banks) Act,

1959 (38 of 1959), a corresponding new bank constituted under

section 3 of the Banking Companies (Acquisition and Transfer of

Undertakings) Act, 1970 (5 of 1970), or under section 3 of the Banking

Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of

1980), or any other bank being a bank included in the Second

Schedule to the Reserve Bank of India Act, 1934 (2 of 1934), but does

not include a co-operative bank".

"Non-scheduled bank in India" means a banking company as defined in

clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of

1949), which is not a scheduled bank".

The following are the Scheduled Banks in India (Public Sector):

· State Bank of India

· State Bank of Bikaner and Jaipur

· State Bank of Hyderabad

· State Bank of Indore

· State Bank of Mysore

· State Bank of Saurashtra

· State Bank of Travancore

· Andhra Bank

· Allahabad Bank

· Bank of Baroda

· Bank of India

· Bank of Maharashtra

· Canara Bank

· Central Bank of India

· Corporation Bank

· Dena Bank

· Indian Overseas Bank

· Indian Bank

· Oriental Bank of Commerce

· Punjab National Bank

· Punjab and Sind Bank

· Syndicate Bank

· Union Bank of India

· United Bank of India

· UCO Bank

· Vijaya Bank

The following are the Scheduled Banks in India (Private

Sector):

· ING Vysya Bank Ltd

· Axis Bank Ltd

· Indusind Bank Ltd

· ICICI Bank Ltd

· South Indian Bank

· HDFC Bank Ltd

· Centurion Bank Ltd

· Bank of Punjab Ltd

· IDBI Bank Ltd

The following are the Scheduled Foreign Banks in India:

· American Express Bank Ltd.

· ANZ Gridlays Bank Plc.

· Bank of America NT & SA

· Bank of Tokyo Ltd.

· Banquc Nationale de Paris

· Barclays Bank Plc

· Citi Bank N.C.

· Deutsche Bank A.G.

· Hongkong and Shanghai Banking Corporation

· Standard Chartered Bank.

· The Chase Manhattan Bank Ltd.

· Dresdner Bank AG.

1.1.3BANKING SERVICES IN INDIA

With years, banks are also adding services to their customers. The

Indian banking industry is passing through a phase of customers

market. The customers have more choices in choosing their banks. A

competition has been established within the banks operating in India.

With stiff competition and advancement of technology, the services

provided by banks have become more easy and convenient. The past

days are witness to an hour wait before withdrawing cash from

accounts or a cheque from north of the country being cleared in one

month in the south.

This section of banking deals with the latest discovery in the banking

instruments along with the polished version of their old systems.

BANK ACCOUNT

The most common and first service of the banking sector. There are

different types of bank account in Indian banking sector. The bank

accounts are as follows:

· Bank Savings Account - Bank Savings Account can be opened for

eligible person / persons and certain organizations / agencies (as

advised by Reserve Bank of India (RBI) from time to time)

· Bank Current Account - Bank Current Account can be opened by

individuals / partnership firms / Private and Public Limited

Companies / HUFs / Specified Associates / Societies / Trusts, etc.

· Bank Term Deposits Account - Bank Term Deposits Account can

be opened by individuals / partnership firms / Private and Public

Limited Companies / HUFs/ Specified Associates / Societies /

Trusts, etc.

· Bank Account Online - With the advancement of technology, the

major banks in the public and private sector has faciliated their

customer to open bank account online. Bank account online is

registered through a PC with an internet connection. The advent

of bank account online has saved both the cost of operation for

banks as well as the time taken in opening an account.

PLASTIC MONEY

Credit cards in India are gaining ground. A number of banks in India

are encouraging people to use credit card. The concept of credit card

was used in 1950 with the launch of charge cards in USA by Diners

Club and American Express. Credit card however became more popular

with use of magnetic strip in 1970.

Credit card in India became popular with the introduction of foreign

banks in the country.

Credit cards are financial instruments, which can be used more than

once to borrow money or buy products and services on credit.

Basically banks, retail stores and other businesses issue these.

LOANS

Banks in India with the way of development have become easy to

apply in loan market. The following loans are given by almost all the
banks in the country:

· Personal Loan

· Car Loan or Auto Loan

· Loan against Shares

· Home Loan

· Education Loan or Student Loan

In Personal Loan, one can get a sanctioned loan amount between Rs

25,000 to 10, 00,000 depending upon the profile of person applying

for the loan. SBI, ICICI, HDFC, HSBC are some of the leading banks

which deals in Personal Loan.

Almost all the banks have jumped into the market of car loan which is

also sometimes termed as auto loan. It is one of the fast moving financial

products of banks. Car loan / auto loan are sanctioned to the extent of

85% upon the ex-showroom price of the car with some simple paper

works and a small amount of processing fee.

Loan against shares is very easy to get because liquid guarantee is

involved in it.

Home loan is the latest craze in the banking sector with the

development of the infrastructure. Now people are moving to township

outside the city. More number of townships is coming up to meet the

demand of 'house for all'. The RBI has also liberalised the interest rates

of home loan in order to match the repayment capability of even

middle class people. Almost all banks are dealing in home loan. Again

SBI, ICICI, HDFC, HSBC are leading.

The educational loan, rather to be termed as student loan, is a good

banking product for the mass. Students with certain academic

brilliance, studying at recognised colleges/universities in India and

abroad are generally given education loan / student loan so as to meet

the expenses on tuition fee/ maintenance cost/books and other

equipment.

MONEY TRANSFER

Beside lending and depositing money, banks also carry money from

one corner of the globe to another. This act of banks is known as

transfer of money. This activity is termed as remittance business.

Banks generally issue Demand Drafts, Banker's Cheques, Money

Orders or other such instruments for transferring the money. This is a

type of Telegraphic Transfer or Tele Cash Orders.

It has been only a couple of years that banks have jumped into the

money transfer businesses in India. The international money transfer

market grew 9.3% from 2003 to 2004 i.e. from US$213 bn. to US$233

bn. in 2004. Economists say that the market of money transfer will

further grow at a cumulative 12.1% average growth rate through

2009.

1.2 FUTURE OF BANKING IN INDIA

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 has witnessed a

series of reforms in the past, like deregulation of interest rates,

dilution of government stake in PSBs, and increased participation of

private sector banks. It has also undergone rapid changes, reflecting a

number of underlying developments. This trend has created new

competitive threats as well as new opportunities. This paper aims to

foresee major future banking trends, based on these past and current

movements in the market.

Given the competitive market, banking will (and to a great extent

already has) become a process of choice and convenience. The future

of banking would be in terms of integration. This is already becoming a

reality with new-age banks such as YES Bank, and others too adopting

a single-PIN. Geography will no longer be an inhibitor. Technology will

prove to be the differentiator in the short-term but the dynamic

environment will soon lead to its saturation and what will ultimately be

the key to success will be a better relationship management.

1.2.1 OVERVIEW

If one were to say that the future of banking in India is bright, it would

be a gross understatement. With the growing competition and

convergence of services, the customers (you and I) stand only to

benefit more to say the least. At the same time, emergence of a

multitude of complex financial instruments is foreseen in the near

future (the trend is visible in the current scenario too) which is bound

to confuse the customer more than ever unless she spends hours

(maybe days) to understand the same. Hence, I see a growing trend

towards the importance of relationship managers. The success (or

failure) of any bank would depend not only on tapping the untapped

customer base (from other departments of the same bank, customers

of related similar institutions or those of the competitors) but also on

the effectiveness in retaining the existing base.

India has witness to a sea change in the way banking is done in the

past more than two decades. Since 1991, the Reserve Bank of India

(RBI) took steps to reform the Indian banking system at a measured

pace so that growth could be achieved without exposure to any macroenvironment

and systemic risks. Some of these initiatives were

deregulation of interest rates, dilution of the government stake in

public sector banks (PSBs), guidelines being issued for risk

management, asset classification, and provisioning. Technology has

made tremendous impact in banking. ‘Anywhere banking’ and

‘Anytime banking’ have become a reality. The financial sector now

operates in a more competitive environment than before and

intermediates relatively large volume of international financial flows. In

the wake of greater financial deregulation and global financial

integration, the biggest challenge before the regulators is of avoiding

instability in the financial system.

1.2.2 RISK MANAGEMENT

The future of banking will undoubtedly rest on risk management

dynamics. Only those banks that have efficient risk management

system will survive in the market in the long run. The effective

management of credit risk is a critical component of comprehensive

risk management essential for long-term success of a banking

institution.

Although capital serves the purpose of meeting unexpected losses,

capital is not a substitute for inadequate decontrol or risk management

systems. Coming years will witness banks striving to create sound

internal control or risk management processes.

With the focus on regulation and risk management in the Basel II

framework gaining prominence, the post-Basel II era will belong to the

banks that manage their risks effectively. The banks with proper risk

management systems would not only gain competitive advantage by

way of lower regulatory capital charge, but would also add value to the

shareholders and other stakeholders by properly pricing their services,

adequate provisioning and maintaining a robust financial structure.

‘The future belongs to bigger banks alone, as well as to those which

have minimized their risks considerably.’

CHAPTER 2

2.1 INTRODUCTION

Punjab National Bank of India, the first Indian bank started only

with Indian capital, was nationalized in July 1969 and currently the

bank has become a front-line banking institution in India with 4525

Offices including 432 Extension Counters. The corporate office of the

bank is at New Delhi. Punjab National Bank of India has set up

representative offices at Almaty (Kazakhistan), Shanghai (China) and

in London and a full fledged Branch in Kabul (Afghanistan).

Punjab National Bank with 4497 offices and the largest nationalized

bank is serving its 3.5 crore customers with the following wide variety

of banking services:

· Corporate banking

· Personal banking
· Industrial finance

· Agricultural finance

· Financing of trade

· International banking

Punjab National Bank has been ranked 38th amongst top 500

companies by The Economic Times. PNB has earned 9th position

among top 50 trusted brands in India.

Punjab National Bank India maintains relationship with more than 200

leading international banks world wide. PNB India has Rupee Drawing

Arrangements with 15 exchange companies in UAE and 1 in Singapore.

2.1.1 HISTORY OF THE BANK

Punjab National Bank (PNB) was registered on May 19, 1894 under

the Indian Companies Act with its office in Anarkali Bazaar Lahore. The

Bank is the second largest government-owned commercial bank in

India with about 4,500 branches across 764 cities. It serves over 37

million customers. The bank has been ranked 248th biggest bank in

the world by 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 and Kabul, and

representative offices in Almaty, Dubai, Oslo, and Shanghai.

· 1895: PNB commenced its operations in Lahore. 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 Ouch Commercial Bank, was

established in 1881 in Faizabad, but failed in 1958.) PNB's

founders included several leaders of the Swadeshi movement

such as Dyal Singh Majithia and Lala HarKishen Lal,[1] 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

Bank in its early years.

· 1904: PNB established branches in Karachi and Peshawar.

· 1940: PNB absorbed Bhagwan Dass Bank, a scheduled bank

located in Delhi circle.

· 1947: Partition of India and Pakistan at Independence. PNB lost

its premises in Lahore, but continued to operate in Pakistan.

· 1951: PNB acquired the 39 branches of Bharat Bank (est. 1942);

Bharat Bank became Bharat Nidhi Ltd.

· 1961: PNB acquired Universal Bank of India.

· 1963: The Government of Burma nationalized PNB's branch in

Rangoon (Yangon).

· September 1965: After the Indo-Pak war the government of

Pakistan seized all the offices in Pakistan of Indian banks,

including PNB's head office, which may have moved to Karachi.

PNB also had one or more branches in East Pakistan

(Bangladesh).

· 1960s: PNB amalgamated Indo Commercial Bank (est. 1933) in

a rescue.

· 1969: The Government of India (GOI) nationalized PNB and 13

other major commercial banks, on July 19, 1969.

· 1976 or 1978: PNB opened a branch in London.

· 1986 The Reserve Bank of India required PNB to transfer its

London branch to State Bank of India after the branch was

involved in a fraud scandal.

· 1986: PNB acquired Hindustan Commercial Bank (est. 1943) in a

rescue. The acquisition added Hindustan's 142 branches to PNB's

network.

· 1993: PNB acquired New Bank of India, which the GOI had

nationalized in 1980.

· 1998: PNB set up a representative office in Almaty, Kazakhstan.

· 2003: PNB took over Nedungadi Bank, the oldest private sector

bank in Kerala. Rao Bahadur T.M. Appu Nedungadi, author of

Kundalatha, one of the earliest novels in Malayalam, had

established the bank in 1899. It was incorporated in 1913, and

in 1965 had acquired selected assets and deposits of the

Coimbatore National Bank. At the time of the merger with PNB,

Nedungadi Bank's shares had zero value, with the result that its

shareholders received no payment for their shares.

PNB also opened a representative office in London.

· 2004: PNB established a branch in Kabul, Afghanistan.

PNB also opened a representative office in Shanghai.

PNB established an alliance with Everest Bank in Nepal that

permits migrants to transfer funds easily between India and

Everest Bank's 12 branches in Nepal.

· 2005: PNB opened a representative office in Dubai.

· 2007: PNB established PNBIL - Punjab National Bank

(International) - in the UK, with two offices, one in London, and

one in South Hall. Since then it has opened a third branch in

Leicester, and is planning a fourth in Birmingham. Gatin Gupta

became Chairmen of Punjab National Bank.

· 2008: PNB opened a branch in Hong Kong.

· 2009: PNB opened a representative office in Oslo, Norway.

2.1.2 ACHIEVEMENTS

· Punjab National Bank announced its Q1FY2010 results on 29

July 2009, delivering 62% y-o-y growth in net profits to

Rs832 crore (Rs512cr), substantially ahead of expectations on

account of large treasury gains, apart from healthy operating

performance.

· While the bank’s deposit growth was reasonably robust at

4.4% sequentially and 26.5% y-o-y, unlike the peers its

growth in advances also remained strong at 38% y-o-y.

· In spite of being at the forefront of PLR cuts, the bank posted

a healthy growth in Net Interest Income (NII) of 29% y-o-y.

· Other Income surged 113% y-o-y, driven by strong treasury

gains of Rs355 crore during the quarter in line with industry

trends, even as Fee income was also robust at 45% y-o-y, on

the back of strong balance sheet growth.

· Operating expenses were higher than expected on account of

Rs150 crore of provisions for imminent wage hikes.

· Gross and Net NPA ratios remained stable sequentially at

1.8% and 0.2%, with the bank not adopting the guidelines of

treating floating provisions as part of tier 2 capital instead of

adjusting against NPAs on express permission from the RBI.

2.2 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 services.

· Integrating frontiers of technology and serving various

segments of society especially weaker section.

· Commited to excellence in serving the public and also

excelling in corporate values

Mission

· To provide excellent professional services and improve its

position as a leader in financial and related services.

· Build and maintain a team of motivated workforce with high

work ethos.

· Use latest technology aimed at customer satisfaction and act

as an effective catalyst for socio economic development.

2.3 VALUES AND ETHICS

· Bonding and Integrity

· Ethical conduct

· Periodic disclosure

· Confidentiality and fair dealing

· Compliance with rules and regulations

2.4 PRODUCTS AND SERVICES

Savings Fund Account - Total Freedom Salary Account, PNB Prudent

Sweep, PNB Vidyarthi SF Account, PNB Mitra SF

Account Current Account - PNB Vaibhav, PNB Gaurav, PNB Smart

Roamer

Fixed Deposit Schemes - Spectrum Fixed Deposit Scheme, Anupam

Account, Mahabachat Schemes, Multi Benefit Deposit

Scheme Credit Schemes - Flexible Housing Loan, Car Finance,

Personal Loan, Credit Cards

Social Banking - Mahila Udyam Nidhi Scheme, Krishi Card, PNB

Farmers Welfare Trust

Corporate Banking - Gold Card scheme for exporters, EXIM finance

Business Sector - PNB Karigar credit card, PNB Kushal Udhami, PNB

Pragati Udhami, PNB Vikas Udhami

Apart from these, and the PNB also offers locker facilities, senior

citizens schemes, PPF schemes and various E-services.

2.5 AWARDS AND DISTINCTIONS

· Ranked among top 50 companies by the leading financial daily,

Economic Times.

· Ranked as 323rd biggest bank in the world by Bankers Almanac

(January 2006), London.

· Earned 9th place among India's Most Trusted top 50 service brands in

Economic Times- A.C Nielson Survey.

· Included in the top 1000 banks in the world according to The Banker,

London.
· Golden Peacock Award for Excellence in Corporate Governance -

2005 by Institute of Directors.

· FICCI's Rural Development Award for Excellence in Rural

Development – 2005

2.6 ORGANIZATIONAL STRUCTURE

HEAD OFFICE

7, BHIKAJI CAMA PLACE, NEWDELHI-66

REGIONAL OFFICES (48)

ZONAL OFFICES (25)

BRANCHES (4525)

S W O T ANALYSIS

Strength

Weakness

Opportunities

Threats

Let’s analyze SWOT in order to know as to where the company stands

2.7 SWOT ANALYSIS

STRENGTH

 Wide network

 Large number of customers

 Fast adaptability to technology

 Brand image

WEAKNESS

 Casual behaviour

 Corruption and red tapism

 Slow decision making due to large hierarchy

 High gross NPA

OPPORTUNITIES

 Home to home banking services

 Diversification towards other fields

 Globalization

THREATS

 Stiff competition from SBI and other private players.

CHAPTER 3

3.1 CUSTOMER SATISFACTION

Customer satisfaction refers to the extent to which customers are

happy with the products and services provided by a business.

Customer satisfaction levels can be measured using survey techniques

and questionnaires

DEFINITIONS:

Definition 1: Customer satisfaction is equivalent to making sure that

product and service performance meets customer expectations.

Definition 2: Customer satisfaction is the perception of the customer

that the outcome of a business transaction is equal to or greater than

his/her expectation.

Definition 3: Customer satisfaction occurs when acquisition of

products and/or services provides a minimum negative departure from

expectations when compared with other acquisitions.

Gaining high levels of customer satisfaction is very important to

a business because satisfaction customers are most likely to be loyal

and to make repeat orders and to use a wide range of services offered

by a business

There are many factors which lead in high levels of customer

satisfaction including.

Products and services which are customer focused and hence provide

high levels of value for money.

What is clear about customer satisfaction is that customers are

most likely to appreciate the goods and services that they buy if they

are made to feel special. This occurs when they feel that the products

and services that they buy have been specially produced for them or

for people like them.

3.2 BENEFITS OF CUSTOMER SATISFACTION

The importance of customer satisfaction and support is

increasingly becoming a vital business issue as organization realize the

benefits of Customer Relationship Management (CRM) for providing

effective customer service. Professionals working within customerfocused

business or those running call centers or help desks, need to

keep informed about the latest customer satisfaction techniques for

running a valuable customer service function. From small customer

service departments to large call centers, the importance of developing

a valued relationship with customers using CRM is essential to support

customer and long-term business growth.

What Do Customers Want?

Before we begin to create tools to measure the level of satisfaction, it

is important to develop a clear understanding of what exactly the

customer wants. We need to know what our customers expect from

the products and services we provide.

Customer expectations have two types –

 Expressed

 Implied

Expressed Customer Expectations are those requirements that are

written down n the contract and agreed upon by both parties for

example, product specifications and delivery requirements. Supplier’s

performance against these requirements is most of the items directly

measurable.

Implied Customer Expectations are not written or spoken but are the

ones the customer would ‘expect’ the supplier to meet nevertheless.

For example, a customer would expect the service representative who

calls on him to be knowledgeable and competent to solve a problem on

the spot.

There are many reasons why customer expectations are likely to

change overtime. Process improvements, advent of new technology,

changes in customer’s priorities, improved quality of service provided

by competitors are just a few examples.

The customer is always right. Supplier’s job is to provide the customer

what he/she wants, when he/she wants it. Customer satisfaction is

customer’s perception that a supplier has met or exceeded their

expectations.

3.3 WHAT CONSTITUTES SATISFACTION?

We cannot create customer satisfaction just by meeting

customer’s requirements fully because these have to be met in any

case. However failing short is certain to create dissatisfaction

Major Attributes of customer satisfaction in banking industry

can be summarized as:

 Product quality

 Premium Outflow

 Return on Investment

 Services

 Responsiveness and ability to resolve complaints and reject

reports.

 Overall communication, accessibility and attitude.

WHAT ARE THE TOOLS?

Customer expectations can be identified using various methods such

as:

 Periodic contract reviews

 Market research

 Telephonic interviews

 Personal visits

 Warranty records

 Informal discussions

 Satisfaction surveys

Depending upon the customer base and available resources, we can

choose a method that is most effective in measuring the customer’s

perceptions. The purpose of the exercise is to identify priorities for

improvements. We must develop a method or combination of methods

that helps to continually improve service.

3.4 CUSTOMER SATISFACTION SURVEYS

Formal survey has emerged as by far the best method of

periodically the customer satisfaction. The survey are not marketing

tools but an information—gaining tool. Enough homework needs to be

before embarking on the actual survey. This includes:

 Defining Objectives of the Survey

 Design Survey approach

 Develop questionnaires and forms

 Administer Survey (Email, Telephone or Post)

 Method of compiling data and analyzing the findings

 Format of the report to present the findings

There is no point in asking irrelevant questions on a customer

satisfaction questionnaire. The basic purpose is to find out what we are

doing right or wrong. Where is the scope for improvement, where do

we stand vis-à-vis other suppliers. How we can serve the customer

better?

A customer satisfaction measurement survey should at least

identify the following objectives:

 Importance to customers (Customers priorities)

 Customer’s perception of supplier’s performance

 Your performance relative to customer’s priorities.

 Priorities for improvement

Survey forms should be easy to fill out with minimum amount of

time and efforts on customer’s part. They should be designed to

actively encourage the customer to complete the questions. Yet they

must provide accurate data should also be sufficiently reliable for

management decision making. This can be achieved by incorporating

objective type questions where customer has to “rate” on scale of say

1 to 10. For repeated surveys, you could provide the rating that was

previously accorded by the customer. This works like a reference point

for the customer.

Space should always be provided for the customers own opinions

this enables them to state any additional requirements or report any

shortcomings that are not covered by the objective questions.

Normally, we deal various personnel at various levels in the

customer’s organization—the buyer, user, receiving inspector, finance

and purchase person etc. surveying a number of respondents for each

customer gives a complete perspective of customer satisfaction. It

may be necessary to device a different questionnaire for each of them.

Respondents must be provided a way to express the importance

they attach to various survey parameters. Respondents should be

asked to give a weighting factor, again on a rating scale of say, 1 to

10, for each requirement. This gives a better indication of relative

importance of each parameter towards overall customer satisfaction

and makes it easier for suppliers to prioritize their action plans by

comparing the performance rating (scores) with importance rating

(weighing).

CHAPTER 4

4.1 CONSUMER RESEARCH IN DIFFERENT DISCIPLINES

A considerable body of literature exists on consumption, consumer

behaviour and consumer decision making process.

Most of the consumer research focused on adopter categories, habits,

attitudes and intentions rather that on actually measuring the

satisfaction level with the service.

4.1.1 CONSUMER SATISFACTION PROCESS

The paramount goal of marketing is to understand the customer and to

influence buying behaviour.

The process can be depicted as follows:-

 Need recognition- realization of the difference between the

desired and the current situation that serves as a trigger for

entire process.

 Search for information.

 Pre purchase alternative evaluation.

 Consumption(utilization of the procured option)

 Post purchase alternative re-evaluation.

 Divestment(disposal of the unconsumed product and it’s

remnants)

4.2 WAYS FOR MAINTAINING RELATIONS WITH THE

CUTOMERS ADOPTED BY PNB

The ability of the banking industry to achieve the socio-economic

objectives and in the process bringing more and more customers into

its fold will ultimately depend on the satisfaction of the customers. We

have a strong belief that a satisfied customer is the foremost factor in

developing our business.

A need was felt by us at Punjab National Bank that in order to become

more customers friendly the Bank should come out with Charter of its

services for the customers. Citizens' Charter concept was considered

as a base instrument to fill this need and accordingly this document

was prepared. This document was made in consultation with the users

and highlights our Bank's commitments towards the customer

satisfaction, thus ensuring accountability and responsibility amongst its

officials and staff. This Code for customers not only explains our

commitment and responsibilities along with the redressed methods but

also specifies the obligation on the part of customers for healthy

practices in Customer-Banker relationships.

This is not a legal document creating rights and obligations. The Code

has been prepared to promote fair banking practices and to give

information in respect of various activities relating to customer service.

We wish to acknowledge the initiative taken by the Ministry of Finance,

Government of India and Ministry of Administrative Reforms and Public

Grievances for encouraging us to bring out this Code.

We maintain constant consultations with our clientele through various

Seminars, Customer Meets, etc. to evaluate improve and widen the

range of service to customer. However, all our customers are requested

to keep us informed of their experiences about the various services

rendered by the Bank and feel free to comment on this Code. We

intend to bring it out in many Regional Languages in subsequent

years.

COMMON PRACTICES FOLLOWED BY PNB BRANCHES

Display business hours.

Render courteous services.

Attend to all customers present in the banking hall at the close of

business hours.

Provide separate 'Enquiry' or 'May I help you' counter at large

branches.

Offer nomination facility to all deposit accounts (i.e. account opened

in individual capacity) and all safe deposit locker hirers (i.e. individual

hirers).

Display interest rates for various deposit schemes from time to

time.

Notify change in interest rates on advances.

Provide details of various deposit schemes/services of the Bank.

Issue Demand Drafts, Pay Orders, etc.

Display Time-Norms for various banking transactions.

Pay interest for delayed credit of outstation cheques, as advised by

Reserve Bank of India (RBI) from time to time.

Accord immediate credit in respect of outstation and local cheques

upto a specified limit subject to certain conditions, as advised by RBI

from time to time.

Provide complaint/suggestion box in the branch premises.

Display address of Regional/Zonal and Central Offices as well as

Nodal Officer dealing with customer grievances/complaints.

CHAPTER 5

5.1 STATEMENT OF THE PROBLEM

This Study will help us to understand the consumer’s satisfaction

about banking services and products. This study will help banks to

understand, how a consumer selects, organizes and interprets the

Quality of service and product offered by banks.

The market is more aware and realistic about investment and returns

from financial products. In this background this study tries to analyze

the customer satisfaction towards banking services in general and PNB

in particular.

5.2 NEED FOR THE STUDY

 The deeper the company understands of consumer’s needs

and satisfaction, the earlier the product or service is

introduced ahead of competition, the greater the expected

contribution margin. Hence the study is very important.

 This study will help companies to customize the service

and product, according to the consumer’s need.

 This study will also help the companies to understand the

experience and expectations of the existing customers.

5.3 SCOPE OF THE STUDY

This study is limited to the consumers with in New Delhi city. The

study will be able to reveal the preferences, needs, satisfaction of the

customers regarding the banking services, It also help banks to know

whether the existing products or services the are offering are really

satisfying the customers needs.

5.4 OBJECTIVE OF THE STUDY

 To have an insight into the attitudes and behaviors of

customers.

 To find out the differences among perceived service and

expected service.

 To produce an executive service report to upgrade service

characteristics.

 To understand consumer’s preferences.

 To access the degree of satisfaction of the consumers

5.5 REASERCH METHODOLOGY

A descriptive study tries to discover answers to the questions

who, what, when, where, and, sometimes, how. The researcher

attempts to describe or define a subject, often by creating a profile of

a group of problems, people, or events.

Such studies may involve the collection of data and the creation of a

distribution of the number of times the researcher observes a single

event or characteristic (the research variable), or they may involve

relating the interaction of two or more variables. Organizations that

maintain databases of their employees, customers, and suppliers

already have significant data to conduct descriptive studies using

internal information. Yet many firms that have such data files do not

mine them regularly for the decision-making insight they might

provide.

This descriptive study is popular in business research because of

its versatility across disciplines. In for-profit, not-for-profit and

government organizations, descriptive investigations have a broad

appeal to the administrator and policy analyst for planning,

monitoring, and evaluating. In this context, how questions address

issues such as quantity, cost, efficiency, effectiveness, and adequacy.

Descriptive studies may or may not have the potential for drawing

powerful inferences. A descriptive study, however, does not explain

why an event has occurred or why the variables interact the way they

do.

5.6 SAMPLE METHOD

Convenience sampling method is used for the survey of this

project. It is a non-probability sample. This is the least reliable design

but normally the cheapest and easiest to conduct .In this method

Researcher have the freedom to choose whomever they find, thus the

name convenience. Example includes informal pools of friends and

neighbours or people responding to a newspaper’s invitation for

readers to state their position on some public issue.

5.6.1 SAMPLE SIZE

Sample size denotes the number of elements selected for the

study. For the present study, 100 respondents were selected at

random. All the 100 respondents were the customers of different

branches of PNB.

5.7 SAMPLING METHOD

A sample is a representative part of the population. In sampling

technique, information is collected only from a representative part of

the universe and the conclusions are drawn on that basis for the entire

universe.

A convenience sampling technique was used to collect data from

the respondents.

5.8 METHOD OF DATA COLLECTION

To know the response, the researcher used questionnaire

method. It has been designed as a primary research instrument.

Questionnaires were distributed to respondents and they were asked

to answer the questions given in the questionnaire.

The questionnaires were used as an instrumentation technique,

because it is an important method of data collection. The success of

the questionnaire method in collecting the information depends largely

on proper drafting. So in the present study questions were arranged

and interconnected logically. The structured questionnaire will reduce

both interviewers and interpreters bias.

Further, coding and analysis was done for each question’s

response to reach into findings, suggestions and finally to the

conclusion about the topic.

5.9 TYPES OF DATA

Every decision poses unique needs for information, and relevant

strategies can be developed based on the information gathered

through research. Research is the systematic objective and exhaustive

search for and study of facts relevant to the problem

Research design means the framework of study that leads to the

collection and analysis of data. It is a conceptual structure with in

which research is conducted. It facilitates smooth sailing of various

research operations to make the research as effective as possible.

PRIMARY DATA
Primary data are those collected by the investigator himself for the

first time and thus they are original in character, they are collected for

a particular purpose.

A well-structured questionnaire was personally administrated to the

selected sample to collect the primary data.

SECONDARY DATA

Secondary data are those, which have already been collected by some

other persons for their purpose and published. Secondary data are

usually in the shape of finished products.

Two types of secondary data were collected for the preparation of the

project work:

Internal Data was generated from company’s brochures, manuals

and annual reports

External Data, on the other hand, was generated from magazines,

research books, intranet and internet (websites).

5.10 LIMITATIONS OF THE STUDY

Although the study was carried out with extreme enthusiasm and

careful planning there are several limitations, which handicapped the

research viz,

1. Time Constraints:

The time stipulated for the project to be completed is less and thus

there are chances that some information might have been left out,

however due care is taken to include all the relevant information

needed.

2. Sample size:
Due to time constraints the sample size was relatively small and would

definitely have been more representative if I had collected information

from more respondents.

3. Accuracy:

It is difficult to know if all the respondents gave accurate information;

some respondents tend to give misleading information.

4. It was difficult to find respondents as they were busy in their

schedule, and collection of data was very difficult. Therefore, the study

had to be carried out based on the availability of respondents.

CHAPTER 6

TABLE 6.1

SHARE OF DIFFERENT TYPES OF ACCOUNTS

SL. No. NATURE OF

ACCOUNTS

NUMBER OF

RESPONDENTS

PERCENTAGE OF

RESPONDENTS

1. Saving A/Cs 78 78%

2. Current A/Cs 9 9%

3. Fixed Deposits 4 4%

4. Loans 3 3%

5. Others 6 6%

Total 100 100%

Graph - 6.1
Classification based on nature of A/Cs

Saving A/Cs Current A/Cs Fixed Deposits Loans Others

Analysis: Above table shows that 78% respondents have Saving A/Cs, and 9% have

Current A/Cs and rest of the respondents have 13% share of other A/Cs in total (which

includes fixed deposits, loans, and other products)

Interpretation: This means most of the respondents are having Saving A/Cs which

means the bank deposits are enriching as Saving A/Cs share is most.

TABLE 6.2

SATISFACTION OF RESPONDENTS WITH SERVICES OFFERED BY PNB

BRANCH

SL. No. RESPONSE NUMBER OF

RESPONDENTS

PERCENTAGE OF

RESPONDENTS

1. Satisfied 89 89%

2. Not satisfied 11 11%

TOTAL 100 100 %

89

11

50

100

No. of

respondents

Graph - 6.2
Classification based on satisfaction level of respondents

Satisfied Not satisfied

Analysis: From the above table it could be inferred that 89% of the consumers are

satisfied with the service and quality of products of their bank. Only 11% of consumers

are not satisfied.

Interpretation: Most of the respondents are satisfied with the service offered by PNB.

Presently the bank offers varieties of services and the customers are getting a good rate of

return from their deposits. Customers are getting good service from the bank.

TABLE 6.3

RATINGS OF THE SERVICES OFFERED BY THE RESPONDENT’S LIFE

INSURANCE COMPANY

SL. No. RATINGS NUMBER OF

RESPONDENTS

PERCENTAGE OF

RESPONDENTS

1. EXCELLENT 05 5%

2. VERY GOOD 09 9%

3. GOOD 76 76%

4. AVERAGE 06 6%

5. POOR 04 4%

TOTAL 100 100 %

Graph - 6.3

Classification based on Rating of the service offered by PNB

branches

59
76

64

EXCELLENT VERY GOOD GOOD AVERAGE POOR

Analysis: From this table it could be inferred that 76% of the consumers have rated

service offered as ‘good’, 9% of them have rated them as ‘very good’, and 05% of them

have rated as excellent and average’ while only 4% have rated as ‘poor’

Interpretation: Service offered by the bank is improving day by day. Returns consumers

are getting are also attractive. Majority of the customers rates good, very good and

excellent because of the customer service offered by the bank. Banks are providing a

good service to the customers due to increased competition in the market. This may be

the reason for more satisfaction

TABLE 6.4

TABLE SHOWING MOTIVE BEHIND THE SELECTING PNB

SL.NO ATTRIBUTE SCORE RANK

1. Brand name 56 1

2. Customer service 30 2

3. Interest 12 3

4. Others 2 4

56

30

12

10
20

30

40

50

60

No. of

respondents

Motives

Graph - 6.4

Motive behind the Selecting of PNB

Brand name Customer service Interest Others

Analysis: This table show the strengths and weaknesses of the brand, and what are the

important criteria or factors on which decision-making is done. From this table we can

infer that consumers give more importance for ‘Brand name’, secondly they prefer

‘satisfaction’, and then ‘returns on investment’.

Interpretation: This purely shows that people are now looking forward for better

customer service in addition to the brand name in which they are investing and the

returns they are getting.

TABLE 6.5

CONSUMERS WILLINGNESS TO RECOMMEND THEIR LIFE INSURANCE

COMPANY TO OTHERS

SL. No. RESPONSES NUMBER OF

RESPONDENTS

PERCENTAGE OF

RESPONDENTS
1. Recommended 92 92%

2. Not recommended 08 8%

TOTAL 100 100 %

Graph - 6.5

Classification based on the willingness to recommend PNB

branch services to other banks

recommended Not recommended

Analysis: From this table it can be noted that the majority of consumers (92%) would

like to recommend their bank services to others and only 8% of consumers would not like

to recommend it to others.

Interpretation: Since the competition has increased in the field of benefits and service of

banking. So customers are getting good service, so that they are willing to recommend

their bank services to others.

TABLE 6.6

CONSUMERS WILLINGNESS TO SHIFT THEIR A/Cs TO OTHER BANKS

SL. No. RESPONSES NUMBER OF

RESPONDENTS

PERCENTAGE OF

RESPONDENTS

1. Shift 8 8%

2. Doesn’t shift 92 92%

TOTAL 100 100 %

Graph - 6.6

Classification based on the willingness of respondents to shift

their A/Cs to other banks

Shift Doesn't shift

Analysis: From this table it can be noted that the majority of consumers (92%) doesn’t

like to shift their A/Cs to other banks.

Interpretation: The reason can be increasing customer satisfaction and quality services

offered by the bank.

CHAPTER 7

SUGGESTIONS & RECOMMENDATIONS

With regard to banking products and services, consumers respond at

different rates, depending on the consumer’s characteristics. Hence I

PNB should try to bring their new product and services to the attention

of potential early adopters.

 Due to the intense competition in the financial market, PNB

should adopt better strategies to attract more customers.

 Return on investment company reputation and premium outflow

are most preferred attributes that are expected by the

respondents. Hence greater focus should be given to these

attributes.

 PNB should adopt effective promotional strategies to increase the

awareness level among the consumers.

 PNB should ask for their consumer feedback to know whether the

consumers are really satisfied or dissatisfied with the service and

product of the bank. If they are dissatisfied, then the reasons for

dissatisfaction should be found out and should be corrected in

future.

 The PNB brand name has earned a lot of goodwill and enjoys
high brand equity. As there is intense competition, PNB should

work hard to maintain its position and offer better service and

products to consumers.

 The bank should try to increase the Brand image through

performance and service then, only the customers will be

satisfied.

 Majority of the people find banking important in their life, so PNB

should employ the strategies to convert the want in to need

which will enrich their business.

CHAPTER 8

CONCLUSION:

The project entitled “A STUDY TO UNDERSTAND THE

CUSTOMER SATISFACTION AT PNB” has helped me in studying

satisfaction about services and products offered to consumers.

Since the opening up of the banking sector, private banks are in

the fray each one trying to cover more market share than the other.

Yet, PNB is far behind SBI. PNB must also be alert what with

Private Banks (ICICI, HDFC) breathing down its neck.

I am sure the bank will find my findings relevant and I sincerely

hope it uses my suggestions enlisted, which I hope will take them

miles ahead of competition.

In short, I would like to say that the very act of the concerned

management at PNB in giving me the job of critically examining

consumer satisfaction towards financial products and services of the

company is a step in their continual mission of making all round

improvements as a means of progress.

I am sure the bank has a very bright future to look forward to

and will be a trailblazer in its own right.