Executive Summary

The current state of Internet banking in India and discusses its

implications for the Indian banking industry. Particularly, it seeks to

examine the impact of Internet banking on banks’ performance and

risk. Using information drawn from the survey of 85 scheduled

commercial bank’s websites, during the period of June 2007, the

results show that nearly 57 percent of the Indian commercial banks

are providing transactional Internet banking services. The univariate

analysis indicates that Internet banks are larger banks and have

better operating efficiency ratios and profitability as compared to non-

Internet banks. Internet banks rely more heavily on core deposits for

funding than non-Internet banks do. However, the multiple regression

results reveal that the profitability and offering of Internet banking

does not have any significant association, on the other hand, Internet

banking has a significant and negative association with risk profile of

the banks.

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 INTRODUCTION
Banking system in India
Banking in India has it’s origin as early as the Vedic period it is

believed that the transaction from money landing to banking must

have occurred even before Manu, the grate Hindu jurist. During the

days of east India Company it was the turn of the agency houses to

carry on the banking business. The general bank of India was the first

joint stock bank to be established in the year 1786 the other which

followed were the bank of Hindustan and the Bengal bank.

In the first half of the 19th century the east India Company establish

three banks The Bank of Bengal in 1809, The Bank of Bombay in

1840 and The Bank of Madras in 1843. These three banks are known

as Presidency Banks were independent unit and functioned well these

three banks were amalgamated in 1920 and a new bank, the Imperial

Bank of India was established on 27 January 1921. With the passing

of State Bank of India act in 1955 the undertaking of Imperial Bank of

India was taken over by newly constituted State Bank of India.

The Reserve Bank, which is the central bank of India, was created in

1935 by passing Reserve Bank of India act 1934. In the wake of

swadeshi movement, a number of bank with Indian management were

establish in the country namely Punjab National Bank, Bank of India,

Canara Bank Ltd, Indian Bank Ltd, The Bank of Baroda Ltd, The

Central Bank of India Ltd on July 19th 1969, 14 major bank of

country were nationalized and on 15th April 1980 six more commercial

private sector bank were also taken over by the government. Today the

commercial banking system in India may be distinguished into:

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Public sector bank:
1. State Bank of India and its associate banks called

the State Bank Group.

2. Punjab National Bank

3. Other Twenty nationalized bank.

4. Regional rural bank mainly sponsored by public

sector bank.

Private sector bank:

1. Old generation private bank

2. New generation private bank

3. Foreign bank in India

4. Scheduled co-operative bank

5. Non scheduled bank

Multi national bank:

1. Standard Chartered Bank

2. City Bank

3. HSBC

4. American express

5. ABN Amro

Co-operative sector bank

The cooperative banking sector has been developed in the country to

the supplement the village money lender.

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 1. State Cooperative Bank

2. Central Cooperative Bank

3. Primary Agriculture Credit Society

4. Land Development Bank

5. Urban Cooperative Bank

6. Primary Agriculture Development Bank

7. Primary Land Development Bank

8. State land development bank

Development bank
1. Industrial Finance Cooperation of India (IFCI)

2. Industrial Development Bank of India (IDBI)

3. Industrial Credit and Investment Cooperation of India

4. Industrial Investment Bank of India (IIBI)

5. Small Industry Development Bank of India (SIDBI)

6. SCICI Ltd

7. National Bank of Agriculture and Rural Development

8. Export Import Bank of India

9. National Housing Bank

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The Central banks of the country was nationalized with a effect from

July1 1955, for the purpose of the creation of one strong integrated,

state sponsored, commercial banking institution in India in the

pursuance of the national policies for development. Various

commercial banks were nationalized with the objective of identifying

bank operations with national policy objectives like to increase

production, diffusion of economic power, reduction of inequalities and

removal of poverty through expansion of branch network, mobilization

of deposits, development of funds in productive endeavor meeting the

need of the neglected sector, reduction of regional and sectoral

imbalance, growth of new entrepreneur, professionalisation of

management and improvement in the efficiency and terms of the

service sector. As a result banking transformed itself from “elite

banking” to “mass banking”.

In 1991 after the liberalization of the banking sector, foreign

banks with their strong base abroad are finding it very attractive to set

up operations in India.

The major foreign banks existing in India are:

1. Standard Chartered Bank

2. City Bank

3. Bank of America

4. American Express

5. HSBC

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Net Banking
Every bank has launched its Net banking service. Online banking is

an internet service through which can enjoy Online banking facilities.

Through Net banking you can do Net banking transfer and open yours

Net banking account too. There are no Net banking charges for

opening an Net banking account. You can manage all yours finances

all Net banking transfer done by just a single click of mouse. This is a

very convenient method of managing all yours Net banking account

and that too without paying any Net banking charges.

Net banking account -

your friend has told you about the Net banking. But, you don’t know

how to activate yours Net banking account. Here is what you can do-

 Your account can be activated through the website of that

particular bank.

 You should know whether you are holding a current account or

savings account or an premium account and various Net banking

charges.

 When you would have filled yours Online banking form, then you

would have provided with an e-mail address to the bank.

 You will be required to use that e-mail id to enjoy the service of

Net banking and do all yours Net banking transfer.

 This is how you can activate yours Net banking account.

Online banking (or Internet banking or E-banking) allows customers

of a financial institution to conduct financial transactions on a secure

website operated by the institution, which can be

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a retail orvirtual bank, credit union or building society.It may include

of any transactions related to online usage

To access a financial institution's online banking facility, a customer

having personal Internet access must register with the institution for

the service, and set up some password (under various names) for

customer verification. The password for online banking is normally

not the same as for telephone banking. Financial institutions now

routinely allocate customer numbers (also under various names),

whether or not customers intend to access their online banking

facility. Customer numbers are normally not the same as account

numbers, because a number of accounts can be linked to the one

customer number. The customer will link to the customer number any

of those accounts which the customer controls, which may be cheque,

savings, loan, credit card and other accounts.

To access online banking, the customer would go to the financial

institution's website, and enter the online banking facility using the

customer number and password. Some financial institutions have set

up additional security steps for access, but there is no consistency to

the approach adopted.

Features
Online banking facilities offered by various financial institutions have

many features and capabilities in common, but also have some that

are application specific.

The common features fall broadly into several categories

 A bank customer can perform some non-transactional tasks

through online banking, including -

 viewing account balances

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  viewing recent transactions

 downloading bank statements, for example in PDF format

 viewing images of paid cheques

 ordering cheque books

 Downloading applications for M-banking, E-banking etc.

 Bank customers can transact banking tasks through online

banking, including -

 Funds transfers between the customer's linked accounts

 Paying third parties, including bill payments (see, e.g., BPAY)

and telegraphic/wire transfers

 Investment purchase or sale

 Loan applications and transactions, such as repayments of

enrollments

 Financial institution administration

 Management of multiple users having varying levels of authority

 Transaction approval process

Some financial institutions offer unique Internet

banking services, for example

 Personal financial management support, such as importing data

into personal accounting software. Some online banking platforms

support account aggregation to allow the customers to monitor all

of their accounts in one place whether they are with their main

bank or with other institutions.

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Security

Facilities Of Internet Banking

Availing the Internet banking services, you can do the following

normal banking transactions online:

 Self-account funds transfer across India.

 Third party transfers in the same branch

 New account opening

 Demand Draft requests

 Standing instructions

 New Chequebook request and much more.

Apart from these, the other salient value-added features available are:

 Railway tickets booking,

 Utility bill payments

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  LIC and other insurance premium payments,

 SBI Mutual funds Investments

 Remit Subscription to PPF account,

 Credit card dues payments,

 Deposit your taxes,

 Donations to your religious inspirations

 Donations to Red Cross and such other organizations

Setting up SMS alerts for transaction information

GROWTH OF INTERNET BANKING ACCOUNT

Internet technology holds the potential to fundamentally change

banks and the banking industry. An extreme view speculates that the

Internet will destroy old models of how bank services are developed

and delivered (DeYoung, 2001a). The widespread availability of

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Internet banking is expected to affect the mixture of financial services

produced by banks, the manner in which banks produce these

services and the resulting financial performances of these banks.

Whether or not this extreme view proves correct and whether banks

take advantage of this new technology will depend on their

assessment of the profitability of such a delivery system for their

services. In addition, industry analysis outlining the potential impact

of Internet banking on cost savings, revenue growth and risk profile of

the banks have also generated considerable interest and speculation

about the impact of the Internet on the banking industry (Berger,

2003).

Banking through internet has emerged as a strategic resource for

achieving higher efficiency, control of operations and reduction of cost

by replacing paper based and labour intensive methods with

automated processes thus leading to higher productivity and

profitability. However, to date researchers have produced little

evidence regarding these potential changes. Nonetheless, recent

empirical studies indicate that Internet banking is not having an

independent effect on banking profitability, although these findings

may change as the use of the Internet becomes more widespread.

More recently in India too, a wider are ray of financial products and

services have become available over the Internet (Malhotra and Singh,

2004), which has thus become an important distribution channel for a

number of banks. Banks boost technology investment spending

strongly to address revenue, cost and competitiveness concerns. For

some activities, banks hope to see a near-term impact on profitability.

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Other investments are motivated more by a desire to establish a

competitive position or avoid falling behind the competition. The

purpose of present study is to analyze such effects of Internet banking

in India, where no rigorous attempts have been undertaken to

understand this aspect of the banking business.

The primary aim is to advance the understanding of how Internet

banks are different from the non-Internet banks in terms of

profitability, cost efficiency, asset quality and other characteristics by

examining bank financial statements from year end 1998 to year end

2006. The present study tests not only whether the Internet delivery

channel affected the financial performance of the commercial banks in

our sample, but also how these changes happened. The study

examines a comprehensive set of 10 measures of financial

performance that allow us to “look inside the black box” of bank

performance. By developing a deeper understanding of these

phenomena, we can draw more insightful inferences about the impact

of the Internet on banking business strategies, production processes

and financial performance. Increasing this type of knowledge is vital

for both academic literature and also for bank marketers who cannot

count on the initial success achieved by the Internet banking

investment.

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ADOPTION RATES OF INTERNET BANKS

Internet and Non-Internet Banks:

Comparison of Performance Evaluating bank performance is a

complex process that involves assessing interaction between the

environment, internal operations and external activities. In general, a

number of financial ratios are usually used to assess the performance

of banks. Financial performance has been studied under different

yardsticks of performance i.e., size, profitability, financing pattern,

economic efficiency, operational efficiency, asset quality,

diversification and cost of operations.

The results of univariate analysis to differentiate the Internet and non-

Internet banks. The null hypothesis regarding the financial

performance of Internet and non-Internet banks is:

H1: The financial performance of banks adopting Internet banking is

not different from those of banks choosing not to adopt Internet

banking, in terms of size, profitability, operating capability, financing,

asset quality, diversification and cost of operations.

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The decision to accept or reject null hypothesis is made on the basis of

the value of the test statistic obtained from the data at hand. In the

present study, the statistical significance of the means of various test

statistics is determined by using the two independent samples t-

statistic. For each pair of observations in a table, a probability (p)

value is provided for the hypothesis that the means in the Internet

and non-Internet samples are the same. A lower p-value indicates a

greater likelihood that the two figures compared represent real

differences between the two categories of banks (Internet vs. non-

Internet, etc.).

The univariate statistics for the Internet group as well as the non-

Internet group across 10 financial performance measures. In these

tables, the performance of an Internet group with non-Internet

banking group and separately for public sector banks (SBI group and

nationalized banks), private sector banks (new and old private sector

banks) and foreign banks has been analyzed.

MOBILE BANKING
Mobile banking (also known as M-Banking, mbanking) is a term used

for performing balance checks, account transactions, payments, credit

applications and other banking transactions through a mobile device

such as a mobile phone or Personal Digital Assistant (PDA). The

earliest mobile banking services were offered over SMS, a service

known as SMS banking. With the introduction of the first

primitive smart phones with WAP support enabling the use of

the mobile web in 1999, the first European banks started to offer

mobile banking on this platform to their customers.

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Mobile banking has until recently (2010) most often been performed

via SMS or the Mobile Web. Apple's initial success with iPhoneand the

rapid growth of phones based on Google's Android (operating

system) have led to increasing use of special client programs, called

apps, downloaded to the mobile device.

A mobile banking conceptual model

In one academic model, mobile banking is defined as:

Mobile Banking refers to provision and availment of banking- and

financial services with the help of mobile telecommunication

devices.The scope of offered services may include facilities to conduct

bank and stock market transactions, to administer accounts and to

access customised information."

According to this model Mobile Banking can be said to consist of three

inter-related concepts:

 Mobile Accounting

 Mobile Brokerage

 Mobile Financial Information Services

Most services in the categories designated Accounting and

Brokerage are transaction-based. The non-transaction-based services

of an informational nature are however essential for conducting

transactions - for instance, balance inquiries might be needed before

committing a money remittance. The accounting and brokerage

services are therefore offered invariably in combination with

information services. Information services, on the other hand, may be

offered as an independent module.

Mobile phone banking may also be used to help in business situations

as well as financial

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Mobile banking business models
A wide spectrum of Mobile/branchless banking models is evolving.

However, no matter what business model, if mobile banking is being

used to attract low-income populations in often rural locations, the

business model will depend on banking agents, i.e., retail or postal

outlets that process financial transactions on behalf telcos or banks.

The banking agent is an important part of the mobile banking

business model since customer care, service quality, and cash

management will depend on them. Many telcos will work through their

local airtime resellers. However, banks in Colombia, Brazil, Peru, and

other markets use pharmacies, bakeries, etc.

These models differ primarily on the question that who will establish

the relationship (account opening, deposit taking, lending etc.) to the

end customer, the Bank or the Non-Bank/Telecommunication

Company (Telco). Another difference lies in the nature of agency

agreement between bank and the Non-Bank. Models of branchless

banking can be classified into three broad categories - Bank Focused,

Bank-Led and Nonbank-Led.

Bank-focused model
The bank-focused model emerges when a traditional bank uses non-

traditional low-cost delivery channels to provide banking services to

its existing customers. Examples range from use of automatic teller

machines (ATMs) to internet banking or mobile phone banking to

provide certain limited banking services to banks’ customers. This

model is additive in nature and may be seen as a modest extension of

conventional branch-based banking.

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Mobile banking services
Mobile banking can offer services such as the following:

Account information
1. Mini-statements and checking of account history

2. Alerts on account activity or passing of set thresholds

3. Monitoring of term deposits

4. Access to loan statements

5. Access to card statements

6. Mutual funds / equity statements

7. Insurance policy management

8. Pension plan management

9. Status on cheque, stop payment on cheque

10. Ordering cheque books

11. Balance checking in the account

12. Recent transactions

13. Due date of payment (functionality for stop, change and deleting

of payments)

14. PIN provision, Change of PIN and reminder over the Internet

15. Blocking of (lost, stolen) cards

Payments, deposits, withdrawals, and transfers

1. Cash-in, cash-out transactions on an ATM

2. Domestic and international fund transfers

3. Micro-payment handling

4. Mobile recharging

5. Commercial payment processing

6. Bill payment processing

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 7. Peer to Peer payments

8. Withdrawal at banking agent

9. Deposit at banking agent

A specific sequence of SMS messages will enable the system to verify if

the client has sufficient funds in his or her wallet and authorize a

deposit or withdrawal transaction at the agent. When depositing

money, the merchant receives cash and the system credits the client's

bank account or mobile wallet. In the same way the client can also

withdraw money at the merchant: through exchanging sms to provide

authorization, the merchant hands the client cash and debits the

merchant's account.

Challenges for a mobile banking solution

Key challenges in developing a sophisticated mobile banking

application are :

Handset operability
There are a large number of different mobile phone devices and it is a

big challenge for banks to offer mobile banking solution on any type of

device. Some of these devices support Java ME and others

support SIM Application Toolkit, a WAP browser, or only SMS.

Initial interoperability issues however have been localized, with

countries like India using portals like R-World to enable the

limitations of low end java based phones, while focus on areas such as

South Africa have defaulted to the USSD as a basis of communication

achievable with any phone.

The desire for interoperability is largely dependent on the banks

themselves, where installed applications(Java based or native) provide

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better security, are easier to use and allow development of more

complex capabilities similar to those of internet banking while SMS

can provide the basics but becomes difficult to operate with more

complex transactions.

There is a myth that there is a challenge of interoperability between

mobile banking applications due to perceived lack of common

technology standards for mobile banking. In practice it is too early in

the service lifecycle for interoperability to be addressed within an

individual country, as very few countries have more than one mobile

banking service provider. In practice, banking interfaces are well

defined and money movements between banks follow the IS0-8583

standard. As mobile banking matures, money movements between

service providers will naturally adopt the same standards as in the

banking world.

On January 2009, Mobile Marketing Association (MMA) Banking Sub-

Committee, chaired by CellTrust and VeriSign Inc., published the

Mobile Banking Overview for financial institutions in which it

discussed the advantages and disadvantages of Mobile Channel

Platforms such as Short Message Services (SMS), Mobile Web, Mobile

Client Applications, SMS with Mobile Web and Secure SMS.

Security
Security of financial transactions, being executed from some remote

location and transmission of financial information over the air, are the

most complicated challenges that need to be addressed jointly by

mobile application developers, wireless network service providers and

the banks' IT departments.

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The following aspects need to be addressed to offer a secure

infrastructure for financial transaction over wireless network :

1. Physical part of the hand-held device. If the bank is offering

smart-card based security, the physical security of the device is

more important.

2. Security of any thick-client application running on the device. In

case the device is stolen, the hacker should require at least an

ID/Password to access the application.

3. Authentication of the device with service provider before

initiating a transaction. This would ensure that unauthorized

devices are not connected to perform financial transactions.

4. User ID / Password authentication of bank’s customer.

5. Encryption of the data being transmitted over the air.

6. Encryption of the data that will be stored in device for later /

off-line analysis by the customer.

One-time password (OTPs) are the latest tool used by financial and

banking service providers in the fight against cyber fraud.[5] Instead of

relying on traditional memorized passwords, OTPs are requested by

consumers each time they want to perform transactions using the

online or mobile banking interface. When the request is received the

password is sent to the consumer’s phone via SMS. The password is

expired once it has been used or once its scheduled life-cycle has

expired.

Because of the concerns made explicit above, it is extremely important

that SMS gateway providers can provide a decent quality of service for

banks and financial institutions in regards to SMS services. Therefore,

the provision of service level agreements (SLAs) is a requirement for

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this industry; it is necessary to give the bank customer delivery

guarantees of all messages, as well as measurements on the speed of

delivery, throughput, etc. SLAs give the service parameters in which a

messaging solution is guaranteed to perform.

Personalization
It would be expected from the mobile application to support

personalization such as :

1. Preferred Language

2. Date / Time format

3. Amount format

4. Default transactions

5. Standard Beneficiary list

6. Alerts

RTGS:
An RTGS (Real Time Gross Settlement) payment system is one in

which payment instructions between banks are processed and settled

individually as per following time schedule:

Customer transactions can be sent through the RTGS System at any

time from the start of the RTGS Business Day (9 am) till - 3 p.m. on

weekdays and 12.00 noon on Saturdays.

INTERBANK TRANSACTIONS can be sent through the RTGS System

at any time from the start of the RTGS Business Day (9 am) till - 5

p.m. on weekdays and 2 p.m. on Saturdays.

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 OBJECTIVE OF STUDY
Without objective a man is like a rolling stone same as without

objective a project has no value the main objective of this project has

been done on three different topics which are given below.

1) To study the Punjab National Bank and its products.

2) To study about the Net Banking and Mobile Banking in PNB.

3) To Study the advantages and disadvantages of Netbanking and

Mobile Banking.

4. Effect of Netbanking and Mobile Banking on Different Banks

and on PNB.

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 SCOPE OF STUDY
 This study will help to know about the netbanking.

 This study will help to know about the mobile banking.

 This study will help to know about the benefits of netbanking

and mobile banking.

 This study will help get benefits of netbanking and mobile

banking.

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 COMPANY PROFILE
With its presence virtually in all the important centres 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 and international banking.

Among the clients of the Bank are Indian conglomerates, medium and

small industrial units, exporters, non-resident Indians and

multinational companies. The large presence and vast resource base

have helped the Bank to build strong links with trade and industry.

Punjab National Bank is serving over 3.5 crore customers through

4062 branches and 447 extension counters - largest amongst

Nationalized Banks. The Bank was recently ranked 21st amongst top

500 companies by the leading financial daily, Economic Times. PNB's

attempts at providing best customer service has earned it 9th place

among Indias Most Trusted top 50 service brands in Economic Times-

A.C Nielson Survey. PNB is also ranked 368 amongst the top 1000

banks in the world according to "The Banker" London.

At the same time, the bank has been conscious of its social

responsibilities by financing agriculture and allied activities and small

scale industries (SSI). Considering the importance of small scale

industries bank has established 31 specialised branches 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 capabilities to handle transactions world-wide.

Besides, bank has Rupee Drawing Arrangements with 15 exchange

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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.

The bank has been focussing 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 full 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 computerization. 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 introduction of

Centralized Banking Solution (CBS) and over 2000 offices have

already been brought 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 the user,

Internet Banking offers world class banking facilities like anytime,

anywhere access to account, complete details of transactions, and

statement of account, online information of deposits, loans overdraft

account etc.

PNB has recently introduced Online Payment Facility for railway

reservation through IRCTC Payment Gateway Project and Online

Utility Bill Payment Services which allows Internet Banking account

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holders to pay their telephone, mobile, electricity, insurance and other

bills anytime from anywhere from their desktop.

Another step taken by PNB in meeting the changing aspirations of its

clientele is the launch of its Debit card, which is also an ATM card. It

enables the card holder to buy goods and services at over 99270

merchant establishments across the country. Besides, the card can be

used to withdraw cash at more than 11000 ATMs, where the 'Maestro'

logo is displayed, apart from the PNB's over 600 ATMs and tie up

arrangements with other Banks

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 Mission and vision

Page | 27  
 
 Pun
njab Natio
onal Bank
k

Type
e Public

(BSE: 532461,N
5 SE: PNB)

Indu
ustry Bankin
ng, Financ
cial

services

Foun
nded 1895

Head
dquarters
s New De
elhi, India
a

Key people K R Ka
amath (Ch
hairman &

MD)

Prod
ducts Credit cards, con
nsumer

bankin
ng,corpora
ate

bankin
ng, finance
e and

insuran
nce, inves
stment

bankin
ng,mortgag
ge

loans, private
p

bankin
ng,private

equity, wealth

management

Reve
enue 36,42
28 crore (U
US$6.59

billion)(2012)

Net income 4,884

4 crore (US
S$884

million
n)(2012)

Page | 28  
P
 
 Tota
al assets 373,7
786 crore (US$67.66

billion)(2011)

Emp
ployees 56,928
8 (2010)

Web
bsite www.pn
nbindia.in
n

Punjab National Bank (PNB) (BSE:

( 532
2461,NSE: PNB) is
i an

nancial se
Indian fin ervices co
ompany based in New
N Delhii, India. PNB
P is

the third largest bank

b in In
ndia by as
ssets. It was
w found
ded in 189
94 and

is curren
ntly the se
econd larg
gest state
e-owned commercia
al bank in
n India

ahead of Bank of Baroda

B with aboutt 5000 bra
anches ac
cross 764
4 cities.

It serves over 37 million

m cu
ustomers. The bank
k has bee
en ranked
d 248th

biggest bank
b in the
t world
d by the Bankers Almanac
c, London
n. The

bank's to
otal assets
s for financial yearr 2007 were
w aboutt US$60 billion.
b

PNB has a banking subsidiary in the

e UK, as well
w as brranches in
n Hong

ubai andK
Kong, Du Kabul, an
nd repres
sentative offices in
n Almaty, Dubai,

Oslo, and
d Shangha
ai.

History
Punjab National
N B
Bank wa
as registerred on 19 May 1
1894 und
der the

Indian Co
ompanies h its office in Anarrkali Baza
s Act with aar Lahorre. The

founding board was

w drawn
n from different parts
p of India proffessing

different faiths and a varied

d back-grround with, howeve
er, the co
ommon

objective of providing counttry with a truly na

ational ban
nk which would

further th
he econom
mic intere
est of the country. PNB's fou
unders in
ncluded

several leaders of the Sw

wadeshi movemen
m t such as Dyal Singh

Majithia and
a Lala Harkisha
an Lal, La
ala Lalch
hand, Shri Kali Pro
osanna

Page | 29  
P
 
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. The board first met on 23

May 1894. Ironically, the PNB Website now claims Lala Lajpat Rai to

be the founding father, surpassing Rai Mul Raj and Dyal Singh

Majithia.

PNB has the distinction of being the first Indian bank to have been

started solely with Indian capital that has survived to the present.

(The first entirely Indian bank, Commercial Bank, was established in

1881 in Faizabad, but failed in 1958.)

PNB has had the privilege of maintaining accounts of national leaders

such as Mahatma Gandhi, ShriJawahar Lal Nehru, Shri Lal Bahadur

Shastri, Shrimati Indira Gandhi, as well as the account of the

famous Jalianwala Bagh Committee.

Timeline
 1819: PNB commenced its operations in Lahore.

 1800: PNB established branches in Karachi and Peshawar.

 1901: PNB absorbed Bhagwan Dass Bank, a scheduled bank

located in Delhi Circle.

 1947: At the Partition of India and the commencement of Pakistani

independence, PNB lost its premises in Lahore, but continued to

operate in Pakistan. PNB had already shifted its registered office

from Lahore to Calcutta in June 1947 — even before the

announcement of the Partition.

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

Bharat Bank became Bharat Nidhi Ltd.

Page | 30  
 
 1960: PNB again shifted its head office, this time from Calcutta to

Delhi.

 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. 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 19 July 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 Indiaafter 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. 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.

Page | 31  
 
  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.

 2012: PNB opened a branch in Hong Kong.

 2013: PNB opened a representative office in Oslo,

Norway, and a second branch in Hong Kong, this

in Kowloon.

 2014: PNB received permission to upgrade its

representative office in the Dubai International Financial

Centre to a branch.

Fortune India 500 Ranking

Punjab National Bank was ranked #26 in the Fortune India

500 ranking of 2011.

Forbes Global 2000 Ranking

Punjab National Bank was ranked #1243 in the Forbes

Global 2000.

Page | 32  
 
PNBMETLIFE
Punjab National Bank has entered into a strategic alliance with Metlife

India Insurance, headquartered in Bangalore and Gurgaon, which has

operated in India since 2001 and is an affiliate of MetLife. The new

entity, PnbMetlfe markets insurance products through PNB's

branches. Through this alliance, MetLife, which is one of the world's

largest Insurance companies retails its products through 5600

branches of PNB and has got a much needed brand recognition in

smaller towns of India.

With over 56 million satisfied customers and 5002 offices, PNB has

continued to retain its leadership position amongst the nationalized

banks. The bank enjoys strong fundamentals, large franchise value

and good brand image. Besides being ranked as one of India's top

service brands, PNB has remained fully committed to its guiding

principles of sound and prudent banking. Apart from offering banking

products, the bank has also entered the credit card & debit card

business; bullion business; life and non-life insurance business Gold

coins & asset management business, etc.

Since its humble beginning in 1895 with the distinction of being the

first Indian bank to have been started with Indian capital, PNB has

achieved significant growth in business which at the end of March

2010 amounted to Rs 435931 crore. Today, with assets of more than

Rs 2,96,633 crore, PNB is ranked as the 3rd largest bank in the

country (after SBI and ICICI Bank) and has the 2nd largest network of

branches (5002 offices including 5 overseas branches ).During the FY

2009-10, with 40.85% share of CASA deposits, the bank achieved a

Page | 33  
 
net profit of Rs 3905 crore. Bank has a strong capital base with

capital adequacy ratio of 14.16% as on Mar’10 as per Basel II with

Tier I and Tier II capital ratio at 9.15% and 5.01% respectively. As on

March’10, the Bank has the Gross and Net NPA ratio of 1.71% and

0.53% respectively. During the FY 2009-10, its’ ratio of Priority Sector

Credit to Adjusted Net Bank Credit at 40.5% & Agriculture Credit to

Adjusted Net Bank Credit at 19.7% was also higher than the

stipulated requirement of 40% &18%.

National Bank continues to maintain its frontline position in the

Indian banking industry. The Bank has maintained its stake Punjab

holder’s interest by posting an improved NIM of 3.57% in Mar’10

(3.52% Mar’09) and a Return on Assets of 1.44% (1.39% Mar’09). The

Earning per Share improved to Rs 123.98 (Rs 98.03 Mar’09) while the

Book value per share improved to Rs 514.77.

In particular, the bank has retained its NUMBER ONE position among

the nationalized banks in terms of number of branches, Deposit,

Advances, total Business, Assets, Operating and Net profit in the year

2009-10. The impressive operational and financial performance has

been brought about by Bank’s focus on customer based business with

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

inclusive approach to banking; better asset liability management;

improved margin management, thrust on recovery and increased

efficiency in core operations of the Bank. The performance highlights

of the bank in terms of business and profit are shown below:

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

Operating Profit 4006 5744 7326 22.29

Page | 34  
 
 Net Profit 2049 3091 3905 23.98

Deposit 166457 209760 249330 14.42

Advance 119502 154703 186601 16.01

Total Business 285959 364463 435931 15.09

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

better customer service and ensured that its ‘IT strategy’ follows the

‘Business strategy’ so as to arrive at “Best Fit”. The bank has made

rapid strides in this direction. All branches of the Bank are under

Core Banking Solution (CBS) since Dec’08, thus covering 100% of its

business and providing ‘Anytime Anywhere’ banking facility to all

customers including customers of more than 3000 rural & semi urban

branches. The bank has also been offering Internet banking services

to the customers of CBS branches like booking of tickets, payment of

bills of utilities, purchase of airline tickets etc. Towards developing a

cost effective alternative channels of delivery, the bank with more than

350 ATMs has the largest ATM network amongst Nationalized Banks.

With the help of advanced technology, the Bank has been a

frontrunner in the industry so far as the initiatives for Financial

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

Gangetic belt, the Bank’s mission is “Banking for Unbanked”. The

Bank has launched a drive for biometric smart card based technology

enabled Financial Inclusion with the help of Business

Correspondents/Business Facilitators (BC/BF) so as to reach out to

the last mile customer. The Bank has started several innovative

initiatives for marginal groups like rickshaw pullers, vegetable

vendors, dairy farmers, construction workers, etc. Under Branchless

Banking model, the Bank is implementing 40 projects in 16 States.

Page | 35  
 
The Bank launched an ambitious ‘Project Namaskar’ under which 1

lakh touch points will be established in unbanked villages by 2013 to

extend the Bank’s outreach. Under this, 30 Kiosks have been opened

covering 119 Villages.

Backed by strong domestic performance, the bank is planning to

realize its global aspirations. Bank continues its selective foray in

international markets with presence in 9 countries, with branches at

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

Dubai, Shanghai and Oslo, a wholly owned subsidiary in UK, a joint

venture with Everest Bank Ltd. Nepal and a JV banking subsidiary

“DRUK PNB Bank Ltd.” in Bhutan. Bank is pursuing upgradation of

its representative offices in China & Norway and is in the process of

setting up a representative office in Sydney, Australia and taking

controlling stake in JSC Dana Bank in Kazakhastan.

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

year:-

• Gold trophy of SCOPE Meritorious Award for Excellence in

Corporate Governance 2009 .

• As per Financial Express-Ernest & young (FE-EY) India’s Best

Banks Survey, PNB is identified as the best bank among the

nationalized banks in terms of overall ranking.

• As per HT-MaRS Survey on Customer Satisfaction, PNB stood

NUMBER ONE in Delhi and Chennai.

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

the list of nationalized banks with a global ranking of 695,

substantial improvement over last year’s placement at 946th

position.

Page | 36  
 
• The Economic Times has ranked CEO of PNB as the 32nd Most

Powerful CEO of 2010.

• Skoch Challenge Award 2010 for “Livelihood Linkage” of the

milk producers in Bulandshahr District,UP.

Product and services

P.N.B offers a wide range of Banking Products and Services. The Retail

Banking Product can be categorized as:

1. DEPOSIT PRODUCTS

2. LOAN PRODUCTS

3. INVESTMENT PRODUCTS

4. CARDS

5. NRI SERVICES

Benefit:
i. Free ATM Card

ii. Debit Card

iii. Personalized cheque

iv. Free Internet Banking

v. Free Mobile Banking

vi. Fhone Banking

vii. Overdraft Facility

viii. RTGS Facility

ix. Demat Services

x. Credit card

Page | 37  
 
DEPOSIT PRODUCTS

 Saving account

 Current account

 O.D. account

 Fixed Deposit

 Recurring Deposits

LOAN PRODUCTS
(A) Home Loans

(B) Personal Loans

(C) Car Loans

(D) Two-wheeler Loans

(E) Consumer Vehicle Loan

(F) Consumer Durable Loans

(G) Loan against Shares

(H) Educational Loans

INVESTMENT PRODUCTS

(A) P.N.B bonds

(B) P.N.B Mutual Funds

(C) P.N.B Demat

CARDS
(D) Credit Cards

(E) A.T.M Card

(F) Debit Card

Page | 38  
 
NRI Services
(G) Banking

(H) Investment

(I) Loans

Page | 39  
 
 Subsidiriaries of P.N.B

PNB Gilts Ltd:

A subsidiary of Punjab National Bank which was amongst the first

ones to get the license for undertaking activities in the Government

Security market, as a primary dealer in 1996. The company received

ISO 9002 certification from British Standard Institution, making it as

the first primary dealer in India to achieve this certification for its

quality systems and procedures

Date of March 13, 1996

incorporation

Promoters PNB Gilts has been promoted by PNB

Main PNB Gilts is a Primary Dealer appointed by the RBI to

Business undertake market-making activities in government

securities. The company is engaged in the business of

trading in Government Dated Securities, Treasury Bills,

Bonds of Public Sector Enterprises, Government

Guaranteed Bonds, State Government Securities.

Punjab National Bank has a holding of 78.74% in PNB Gilts

PNB Housing Finance Ltd:

This is a wholly owned subsidiary of Punjab National Bank, is

engaged in providing housing loans for purchase, construction and up

gradation of a dwelling unit. The company offers Loans for

Page | 40  
 
construction or for purchase of house/flat from development

authorities and also from private builders/ group housing societies as

well as for renovation/ repairs. Company also provides finance for

construction of residential projects

Date of

incorporation November 11, 1988

Promoters PNB Housing is a wholly owned subsidiary of PNB

Main PNB Housing was created to meet the financing demand

Business from the Housing Sector.

PNB Housing Finance Limited is a 100% subsidiary of PNB.

PNB Capital Services Limited:

Date of April 12, 1988

Incorporation

Promoters PNB Caps is a wholly owned subsidiary of PNB

Main Business PNB Caps offers a wide range of services including

merchant banking, syndication of loans, commercial

papers (CPs) and external commercial borrowings

(ECBs), debenture trusteeship, advisory services and

project appraisal.

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RBI had advised closure of PNB Capital Services Ltd vide letter dated

November 8, 1999 in view of the lack of clarity on sustainability of

non-fund based business.

PNB Capital Services Ltd. is a 100% subsidiary of Punjab National

Bank.

PNB Asset Management Company Limited:

Date of March 18,1994

incorporation

Promoters PNB Asset Management Company is a wholly owned

subsidiary of PNB

Main The PNB Asset Management Company is acting as an

Business Investment Manager to the PNB Mutual Fund. In this

capacity, it is responsible for investment decision and

day to day operations of the fund including formulations

and launching of new schemes etc. under overall

supervision, control and governance of the Board of

Trustees of PNB Mutual Fund.

RBI vide its letter dated April 4, 2000 had advised the Bank to close

down PNB AMC and not float any scheme. However, on request from

the Bank, the RBI gave time up to December 31, 2001 for submission

of a restructuring plan for the company.

PNB AMC is a 100% subsidiary of Punjab National Bank

Page | 42  
 
PNB Securities Ltd:
PNB Securities Ltd. was incorporated on June 13,1996 as a 100%

subsidiary of the Bank with the objective of undertaking broking

business. The subscribed capital of the company is Rs. 0.50 cores.

However the company since its inception transacted no business and

the company was continuing as a defunct company. The Company

vide its General meeting held on August 16, 2001 passed a special

resolution for "voluntary winding up" u/s 484 (1)(b) of the Companies

Act, 1956. Liquidator has been appointed and the income tax dues

paid up to March 31, 2001.

Page | 43  
 
DEPOSIT
1) P.N.B offers wide verity of product to suit your requirement with

the convenience of network branches and facilities of e- channel

like internet and mobile banking, P.N.B brings banking at your

doorstep select any of our deposit product and provide your

detail online and our representative will contact you for account

opening.

2) The 110-year-old bank is the second largest PSU bank, and the

third largest in the country. Over the last three years, PNB has

been growing aggressively. With its 4,068 branches and about

450 owned ATMs, it is the largest centrally networked bank in

South-East Asia.

3) P.N.B bank offer you a power pack saving account with a host of

convenient feature and banking channels to transact through so

now we can bank at your convenience without the stress of

waiting in queues.

4) It’s really important to help children learn the value of finance

and money management at an early age. Banking is a serious

business but we make banking a pleasure and at the same time

children learn how to manage their personal finance.

5) Safety, flexibility, liquidity and return a combination of

unbeatable feature of the fix deposit from Punjab national bank.

6) When expenses are high you may not adequate fund to make

big investment but simply going ahead without saving for the

future is not a option for you through P.N.B recurring deposit

you can invest small amount of money every month that ends

up with a large saving on maturity.

Page | 44  
 
 Organizational Structure

Head Office

Zonal Offices

(25)

Regional Offices (48)

Branches (4068)

Page | 45  
 
Income and Expenses
Total income increased by 11.1% to Rs.6863.38 crore, led by YoY

growth of 16.4% in interest income.

 Net Interest Income rose by spectacular 45.4% on YoY basis

to reach

 Rs.2618.57 crore in Q1 FY11.

 Core Non Interest Income (excluding trading profit) witnessed

a YoY growth of

 10.9% to touch Rs.674.15 crore.

 Total expenses (excluding provisions) at Rs.4765.21 crore at

the end of June 2010

 have registered a growth of 3.4% only from a year ago.

 While growth in Interest expenses was contained at a miniscule

0.8%,

 Non‐Interest expenses growth was restricted to mere 10.2%

during the first quarter of 2010‐11 despite recent wage revision

and provisions made for pension

 fund.

Important Ratios
 Gross NPA to Gross Advances ratio stood at 1.82% as at

June’10.

 Net NPA to Net Advances ratio stood at 0.66% as at June’10.

Page | 46  
 
  Provision Coverage Ratio is at 77.61 % compared to RBI’s

stipulation of 70%.

 Net Interest Margin (NIM) has improved to 3.94% for the

quarter ended 30.06.2010 from 3.24% in corresponding quarter

of last year.

 Return on Assets improved to 1.38% in the quarter ended

June 2010 as against 1.31% last year.

 Low increase in interest & operating expenses and a

satisfactory interest income growth led to substantial

reduction in Cost to Income Ratio to 39.88% for the quarter

ended June 2010 as against 44.59% last year.

 Earnings per Share rose to Rs.135.53 (annualized) for the

quarter ended 30.06.2010 as against Rs.105.55 last year.

 Book Value per Share was higher at Rs.548.66 as at June

2010 from Rs 443.11 as on June 2009.

 As per Basel II the CRAR is 13.77% as at end of June’10

(Tier‐I Capital: 8.70%; Tier‐II Capital: 5.07%).

 Return on Equity improved to 24.70% in the quarter ended

June 2010 as against 23.82% last year.

Priority Sector:
 PS advances grew by more than 25% to reach Rs.64,452 crore.

 Outstanding Agricultural advances grew by around 27% to

cross Rs.30,000

Page | 47  
 
  crore.

 Issued 77,839 Kisan Credit Cards (KCCs) during Quarter

ended June 10, taking

 cumulative number of KCCs issued to 33.42 lakh since

inception.

Small & Medium Enterprise:

 Credit to MSME sector reached Rs.37,018 crore including

retail trade advances of Rs.3905 crore at the end of June 2010,

recording a YoY growth of 29%.

 Besides 7 SME Hubs, 523 MSME specialized/focus branches

have been operationalised to provide single window services to

SME borrowers.

 Bank tops in extending collateral/guarantee free lending to

MSMEs under CGTMSEamongst the member lending

institutions of CGTMSE.

 Bank has adopted two Mega Artisans Clusters – Brass and

brassware products at Moradabad and Wood carving cluster at

Saharanpur for intensive lending. Collateral free loans to 9000

artisans have been extended at Moradabad Artisans Cluster

and 800 Artisans at Muzaffarnagar. During the current

quarter, Bank adopted 25 MSME clusters for cluster based

lending approach taking total to 41 clusters.

Page | 48  
 
Retail Credit:
 Total Retail credit of the Bank marked a y‐o‐y increase of more

than 17% to Rs.19,410 crore at the end of June 2010.

 Good y‐o‐y growth in all key schemes i.e. Education loan (42%),

Personal Loan (39%) and Housing loans (16%).

Financial Inclusion:
 Opened 57.25 lakh “No Frill”/PNB Mitra accounts and issued

more than 46000 General Credit Cards.

 Implemented 39 ICT based projects in 16 states.

 Set up exclusive FI Back Offices at Delhi, Chandigarh, Jaipur,

Hyderabad, Lucknow, Patna, Shimla and Raipur.

 Bank has been allocated 4700 villages with population of over

2,000 in the country for providing Banking services. PNB

propose to cover these by 2012.

International Forays:
 International presence in 9 countries, with branches at Hong

Kong, Kabul and Dubai & representative offices at Almaty,

Dubai, Shanghai and Norway; a wholly owned subsidiary in UK;

a joint venture in Nepal and a JV banking subsidiary in Bhutan.

 Bank is pursuing upgradation of its representative offices in

Norway into a full‐fledged branch and is in the process of setting

up a representative office in Sydney, Australia and taking

Page | 49  
 
 controlling stake in Kazak Bank apart from opening a

subsidiary in Canada.

I.T. Initiatives:
 Bank has installed 3715 ATMs facilitating more than 108 lakh

ATM/Debit cardholders of the Bank transacting at more than

60000 ATMs of various Banks and at over 3million POS

terminals across the country.

 Bank has introduced Online Credit Proposal Tracking System

in order to enable customers online access to view the status of

their loan applications.

 Registered Payee Mechanism has been enabled for Funds

transfer to other/3rd partyaccounts in respect of Retail Internet

Banking Users for protecting our valued customers from online

frauds & phishing attacks.

 Bank has launched PNB Platinum Debit Card embedded with

the brand equity of PNB and endorsed by Master Card for the

premium customers. Bank is also planning to launch Platinum

Credit Cards shortly.

 PNB has over 10 lac customers using Internet Banking and 2.3

lac customers availing SMS alert facility.

CSR initiatives:
 A board approved CSR policy has been adopted by the Bank to

take CSR agenda forward in synchronization with its mission of

Page | 50  
 
 “Banking for the Unbanked”. Under this a “Green” drive has

been implemented across the organization to conserve

energy/optimize resource and lower costs.

 Bank has so far brought 68,949 farmers out of the clutches of

moneylenders by financing them Rs.264 crore under PNB

Krishak Saathi (Debt Swap Scheme).

 Bank has 9 Farmers’ Training Centres where around 2.70 lac

persons have been trained till June 2010 at Bank’s cost

including more than 51,000 women.

 Bank has operationalised 20 PNB Rural Self Employment

Training Institutes (PNBRSETIs) which provide training to

Rural BPL youth and women. Till June, 9255 persons have

been trained in these centres of which 5518 are women.

 42 Medical Health Check Up Camps, 44 Tree Plantation Camps

and 17 Blood Donation Camps were arranged during Q1 FY11.

 Launched a pioneering “PNB Saathi Scheme” to provide credit

facility to milk pourers in Bulandshahar District, Uttar Pradesh

with support of Mother Diary.

Page | 51  
 
ATMs at PNB:

PNB DEBIT CARD :-

PNB Debit Card is purely an on-line product. PNB Debit card bears

Master logo on the front. The Debit Cards can be accepted in India at

over 300000 merchant locations and over 43000 ATMs.

TYPES OF DEBIT CARD ISSUED AND IT’S FEATURES:

1.) Classic Debit Card:

• Classic Debit card are issued personalized and non-personalized

form.

• Non – Personalized cards where name of the customer is not

embossed on the card.

• Personalized cards where name of the customer is embossed on

the card.

• The daily withdrawal limits for ATM and at POS terminals are

Rs.25000/- each.

• The card can be used at POS terminals as like credit card (i.e.

swipe the card at Pos terminal and sign the receipt).

• The card can also be used on Internet for shopping (E-

commerce transactions)

Page | 52  
 
2.) Gold Debit Card:
• Gold debit card is issued to Premium customers maintaining

minimum Quarterly average balance of Rs.50000 in Saving fund

A/c and Rs. 100000/- in Current A/c.

• Gold Cards where name and photo of the customer is embossed

on the card.

• The daily withdrawal limit for ATM and at POS terminals are

Rs.40000/- and Rs.60000/- respectively.

• The card can be used at POS terminals as like credit card (i.e.

swipe the card at Pos terminal and sign the receipt).

• The card can also be used on Internet for shopping (E-

commerce transactions)

3.) Biometric ATM Card:

• Biometric ATM card is issued to illiterate customers.

• With this card, transaction is authorized based on the finger

print of the customer.

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

fingerprint only.

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

ADDON Debit Card:

• PNB account holder can get two add-on cards along with own

Debit card for sharing the convenience with their loved ones.

Page | 53  
 
• The add-on card can be issued in the name of spouse,

dependent parents, and dependent children not below 18 years.

• The primary cardholder will be responsible for all the

transactions made by Add On card holder/s.

• To avail of the above facility visit any of our branches.

ELIGIBILITY

Who are eligible for PNB Debit card

• All existing Account holder who are maintaining minimum

balance and who regularly operate their account are eligible for

the issuance of Debit Card.

• New customers, who open their accounts after introduction, are

also eligible for the issue of Debit Cards at the time of opening

the account itself.

• Debit Card facility shall be extended to the individual customers

only, having Savings Bank Account and Current Account.

• Debit cards shall also be issued to individual customers having

overdraft facility, which is in the nature of a personal loan. This

shall mean and include personal loans extended to individual

customers in the form of a regular overdraft limit such as clean

overdraft facility or overdraft facility against FD/NSCs/LICs etc.

where operations through cheques are permitted.

Page | 54  
 
• Debit Card can be issued in Joint Accounts with “Either or

Survivor”/”Former or Survivor” mandate. In “Either or Survivor”

accounts, cards can be issued to both the account holders

whereas in “Former or Survivor” accounts card can be issued

only to the Former. In joint Accounts where account has to be

jointly operated Debit Card shall not be issued unless mandate

for operation of account is changed to “Either or Survivor” or

“Former or Survivor” basis.

HOW TO APPLY?

• Debit card can be obtained from any branch of PNB (irrespective

of your account maintaining branch) by filling a Debit Card

application form.

• In case of Non-Personalized card (without name) the card would

be issued instantly.

• In case of personalized card (with name) the card would be

issued in 7-8 working days.

Issuance of Debit Card from Call centre: -

 Customers of our Bank may also get Debit Card simply by

contacting our 24x 7 Call Center over phone at the following

numbers-

0124-2340000 Also Accessible from mobile.

1800 180 2222 Toll free

Page | 55  
 
  The Card shall be delivered at their communication address.

USAGE OF ATM/DEBIT CARDS:

• PNB ATM / Debit Card is purely an on-line product. It is an

International Debit Card in association of MasterCard

Worldwide.

• This card is an Shopping Cards used at POS with MasterCard

Logo.

• The Debit Cards can be used to withdraw cash from more than

1.25 millions ATMs globally & the card holders can make

payments at more than 25 millions merchant locations

worldwide for shopping.

 A few aspects of Bank’s Debit Card are highlighted as under:

• Valid in all Master Card Acceptance Marks.

• Acceptance in India at over 300000 “Maestro” Merchant

locations and over 43000 ATMs having Cirrus Logo and “Master

Card”.

• Wide acceptance at both Merchant Locations (including Utility

bill payment) and ATM locations across India

• A PIN (Personal Identification Number) based magnetic Stripe

Card which provides the safety and security to customers, while

accessing their funds with the bank.

Page | 56  
 
• PIN can be changed and MINI Statement of the account can be

taken from ATMs owned by PNB and MITR Member Banks.

• Card validity - Till the customer holds the account.

• PNB Debit Card is an International card and can be used all

over the Globe on ATMs and at the Merchant establishments

displaying Maestro logo.

AWARDS:
 

 
Awards & Achievements of Punjab National Bank in Recent Times  

 "Best IT Team of the Year Award" at the IDRBT Banking

Technology awards for the year 2005-06.

 SKOTCH Challenger Award for Change Management for the year

2005-06

 Best IT User in Banking & Financial Services Industry - 2004 by

NASSCOM in partnership with Economic Times

 Golden Peacock Award- for Excellence in Corporate Governance

- 2005 by Institute of Directors

 FICCI's Rural Development Award

Page | 57  
 
  for Excellence in Rural Development - 2005

 Skotch Challenger Award for Exemplary use of Technology for

becoming a pioneer in Public Banks - 2005

 Golden Peacock National Training - 2004 & 2005 by Institute of

Directors

 National Award for Excellence in SSI Lending

 Ranked 2nd for 4 consecutive years - 2002, 2003, 2004 & 2005

 Banking Technology Awards 2004

 Runner up in 'Best IT Team of the Year Award 2005'

 Jointly Adjudged by IBA, Finacle & TFCI

 Money Outlook Award – 2004

 Runner up in 'Best Bank (public Sector) of the year Award' -

2005

 Niryat Bandhu Gold Trophy

 for excellence in export perforamnce for 3 consecutive years

2001, 2002 & 2003 by Federation of Indian Exporters

Organization (FIEO) 21st Amongst Top 500 Companies by the

leading Financial Daily The Economic Times, June 2005

 9th amongst India's Top 50 Most Trusted Service Brands

 A.C Nielson Survey, The Economic Times Dec 2004

 3rd Rank amongst Banking Sector in India

Page | 58  
 
  323rd Rank in the World

 The Bankers' Almanac, January 2006

 368 amongst Top 1000 Global Banks

 The Banker, London July 2005

 Skoch Challenger Award for Exemplary Use of Technolgy

 Winner for becoming a pioneer in public banks by Skoch

consultancy services pvt ltd, Gurgaon 2005

 FICCI's Rural Development Award

 Award for excellence in rural development 2005

 Amity Global Corporate Excellence Award

 Amity Business School, Noida has conferred the Award to PNB,

after an in-depth research to analyse the strengths and core

competencies of the Global 500 companies and banks which

have already made an indelible most admired impression on the

Indian economy. 2008 & 2007 & 2005

 Banking Technology Awards

 IBA, Finacle & TFCI jointly adjudged PNB as runner up in "Best

IT Team of the year Award" 2005

 PC Quest Users’ Choice Award

 Best IT Implementation 2007 & 2005

 Symantec Visionary Award

 Information Security Impact 2005

Page | 59  
 
  Money Outlook Award

 Money Outlok adjudged PNB as runner up in "Best Bank (Public

Sector) of the year Award" 2005

 Banking Technology Awards

 IBA, Finacle & TFCI runner up Award for Outstanding Achiever

of the Year (Individual). 2005

 Golden Peacock Innovative Product/Service Award

 2010 (for BCP implementation)

 Golden Peacock Award for Excellence in Corporate Governance

 Winner in the ‘Large Joint Entry’.2009 &

2007 & 2005

 Skoch Challenger Award for Change Management

 For upliftment of Weaker sections of society 2006

 IDRBT Banking Technology Awards

 Best IT Team of the Year Award 2006

 National Award For Excellence in lending to Tiny sector

 First Prize by By Ministry of Small Scale Industries.2006

 Skoch Challenger Award for capacity building for FTC initiative

 Skoch Consultancy Services Pvt Ltd 2007

 Computer Associates Excellence Award

 Excellence in EMS Roll Out. 2007

 CIO 100 Award

Page | 60  
 
  For Best IT Implementation by IDG Media Pvt. Ltd.2007, 2008 &

2009

 National Award for Excellence in Lending to Micro Enterprises

 For Lending to Micro enterprises 2007

 Award for the use of Technology for Financial Inclusion.

 Institute for Development and Research in Banking Technology

(IDRBT), Hyderabad. 2008

 Dun & Bradstreet Award for “Priority Sector Lending including

Financial Inclusion”.

 Dun & Bradstreet 2009

 National Award for Excellence in Lending for Institutional

Finance in Propagating KVI Programmes in NORTH ZONE

 Khadi & Village Industry Commission, Ministry of Micro, Small

& Medium Enterprises, Govt. of India

(Interest Subsidy Eligibility Certificate Scheme)

2009

 National Award for Excellence in Lending for Institutional

Finance in Propagating KVI Programmes in

CENTRAL ZONE

 Khadi & Village IndustryCommission, Ministry of Micro, Small &

Medium Enterprises, Govt. of India

 (Interest Subsidy Eligibility Certificate Scheme) 2009

Page | 61  
 
  National Award for Excellence in Lending for Institutional

Finance in Propagating KVI Programmes in

NATIONAL LEVEL

 Khadi & Village IndustryCommission, Ministry of Micro, Small &

Medium Enterprises, Govt. of India

 (Interest Subsidy Eligibility Certificate Scheme) 2009

 National Award for Excellence in Lending for Institutional

Finance for Propagating KVI Programmes in

NORTH ZONE

 Khadi & Village IndustryCommission, Ministry of Micro, Small &

Medium Enterprises, Govt. of India

 (Prime Minister Employment Generation Programme) 2009

 National Award for Excellence in Lending for Institutional

Finance for Propagating KVI Programmes in

CENTRAL ZONE

 Khadi & Village IndustryCommission, Ministry of Micro, Small &

Medium Enterprises, Govt. of India

 (Prime Minister Employment Generation Programme) 2009

 India Pride Award by dainik Bhaskar and Daily News analysis

 Excellence in PSU 2009

 Indira Gandhi Rajbhasha Shield

 Promoting Hindi 2009

 Emerson Uptime Champion Awards 2009

Page | 62  
 
  “Best InfoSphere Warehouse Solution” Award by IBM

 2009 (for implementation of Enterprise Wide Data Warehouse)

Page | 63  
 
 USES OF NETBANKING
Through net banking you can do all the banking functions online. Net

banking was not present in olden time. But, with the various

developments in modern technology, net banking has been launched.

There are many Uses of net banking. Through, net banking you can

update all your transactions immediately and that too within few

seconds. People have been largely benefited through net banking.

Some of the Uses of net bankingare that you can check your account

immediately and your any query can be solved within few minutes.

You can perform various transactions online.

Uses of net banking-

 You can get all information regarding the various products and

services that are launched by the bank.

 You will also be sent the SMS alerts and e-mail alerts about any

product or service that is launched by the bank.

 Another Uses of net bankinginclude that there are some banks

that will be providing you with the facility of interaction between

customers and bank.

 You can also pay all your bills through online banking. You can

pay all yours electricity bills, telephone bills and other utility

payments through online banking. These are some of the Uses

of net banking.

 Banks are largely focusing on increasing the Uses of net

banking. But, it is very sad that only 10 percent of population is

using net banking.

Page | 64  
 
  This can be due to the lack of information among people. For

many people the Uses of net bankingare limited to ordering for a

cheque book or checking balances.

 There are very less people who are aware of the various

interactive services that are provided by the banks.

 According to a survey done by the banks, there is only 20

percent of population which makes use of the various

interactive services provided by various banks.

 Through online banking, you can check your balances and see

statement. You can also inquire about various cheque statuses

and also do inquiry about the various fixed deposit accounts.

 You can do all your shopping online. You can also check your

D-mat account and pay yours credit card bills too.

Page | 65  
 
ADVANTAGES OF NETBANKING
Internet banking or banking via the Internet, can be considered

a remarkable development in the banking sector. The ability to carry

out banking transactions through the Internet has empowered

customers to execute their financial transactions within the comfort of

their homes. Besides this, the benefits of Internet banking is not

limited to a particular group of people, as it benefits both bankers and

customers alike.

Benefits of Online Banking

 Its greatest advantage perhaps lies in the fact that customers

are no longer required to wait in those long and wearisome lines

of the banks to request a financial transaction or statement. It

has made the opening of an account quite simple and easy and

without much paperwork. The same flexibility can be observed

even while closing an account. You can also apply for bank

loans without personally visiting any local branch of your bank.

 Conventional banking has always been slow and time-

consuming, so much so that sometimes you need to wait several

hours to process a simple transaction like clearing a check. But,

Internet banking has tremendously reduced the time required to

process banking transactions, thereby making banking faster

and convenient. For the bankers this system is cost-effective, as

it has considerably reduced the administrative costs and

paperwork related to the transactions. Besides, banks can also

cater to the needs of thousands of customers at the same time.

All these factors have significantly increased the profit margins

of commercial banks by lowering their operating costs. This has

Page | 66  
 
 enabled them to offer acceptable interest rates on savings

account and credit cards.

 With the help of Internet banking, you can access any

information regarding your account and transactions, any time

of the day. This means that you no longer have to depend on the

office hours of your bank to obtain information. Therefore, you

can regularly monitor your account as well as keep track of

financial transactions, which can be of immense help in

detecting any fraudulent transaction. In addition to this, fund

transfers, both national and international, have also become

faster and convenient with Internet banking. Nowadays, you can

transfer funds from one account to another within a few

minutes. You can easily carry out stock trading, exchanging

bonds and other investments with the help of this facility. All

these features have made Internet banking ideal for people who

make a number of financial transactions each day.

 In addition to availing banking facilities for 24 hours a day, you

can also receive other important information regarding banking

policies, rates of interest offered on different types of bank

accounts and formalities required in executing various

transactions. With such information you can compare the

services of different banks and opt for the one that satisfies your

individual needs and requirements.

 Security of your bank account is the most important factor in

online banking. So while availing the facilities of Internet

banking, you have to be very careful to ensure the security of

your computer and personal information like the password, user

Page | 67  
 
 name and pin number of your bank account. Otherwise, you

may become a victim of computer hacking, which can lead to

unauthorized use of your account by computer hackers. Though

banks have come up with several security measures, the

customers are also required to be a bit careful to ensure

security and safety of Internet banking.

Page | 68  
 
 DISADVANTAGES OF NETBANKING

Identity Confirmation

 Federal regulations require that financial institutions confirm each

customer's identity. This may present a logistical issue, as copying

and faxing documents is sometimes necessary.

Security Concerns

 With hacking and identity theft on the rise, Internet banking

customers have to place a certain amount of trust in the bank that

their account information and personal information are safe.

Customer Service

 If you bank at a traditional bank, you can go to the bank and speak to

someone face to face about your problem but, with an Internet bank,

you will likely spend a lot of time on the phone being passed around

and placed on hold.

Accessibility

 If the Internet goes down in your area or the area of the banking office,

you will be unable to access your accounts. This includes being

unable to withdraw money from ATMs or to use your debit card.

Fees

 Many Internet banks don't have ATMs, which means you will have to

pay ATM fees. This can cost you more money than paying the regular

monthly fees at a brick and mortar bank.

Page | 69  
 
ATM Transaction Fees

Not having a brick-and-mortar bank often means not having free

ATMs you can use. Consequently, you can rack up a fortune in ATM

fees for frequent withdrawals. Some online-only banks do offer access

to a network of affiliated ATMs, however. ING Direct (Stock

Quote: ING), for example, allows account holders to use the Allpoint

ATM network, which includes 32,000 ATMs. You may also be able to

have some or all of your ATM fees credited back to your account with

some banks. This is not the case with all online-only banks, however.

One way to work around this problem is to get cash-back on

purchases from grocery and drugstores and avoid the ATM as much

as possible.

Technical Difficulties

Online banking offers a lot in the realm of technical convenience, but

having all of your banking online also exposes you to the possibility

that there could be technical difficulties that get in your way. It’s

possible (though unlikely) for an online bank system to crash or

become unavailable temporarily. More likely, you could have trouble

accessing the Internet due to computer difficulties or Internet service

interruption on your end. This could complicate accessing your money

at a crucial moment. With a brick-and-mortar bank, you’d have the

option of visiting the branch if time was of the essence.

Slower Deposits and Money Transfers

Depositing a paper check or money order into an online-only account

can take several days. Most online-only banks only take deposits by

Page | 70  
 
snail mail, so it takes time for checks to arrive. Alternatively, you can

make deposits at a brick-and-mortar bank and transfer the funds, but

that too takes time. Money transfers between online and traditional

banks can take days to clear. Check deposits at a brick-and-mortar

bank also take time to clear, but typically you have access to a portion

of those funds while you wait.

Worse Customer Service.

Part of the overhead that online-only banks save is in manpower.

Consequently, you may get a bit of a runaround through an

automated phone system if you call for help. This is often the case

with traditional banks as well. With traditional banks, however, you

can visit a live person at the branch for help. You may even have

formed a relationship with the people at your bank or credit union,

which can prove useful.

Vulnerability to Phishing Scams

In general, you don’t have to worry about hackers stealing your

identity through your online bank account because banks use

sophisticated encryption technology. Online banking of any kind,

however, exposes you to some security risk from phishing scams.

These scams use phony emails to direct you to dummy sites usually to

get your login information. You can avoid this hazard by never clicking

on links in emails from “your bank” and approaching such emails with

skepticism.

• A need for customer skill to deal with computers and browsers.

E.g. Elderly, Housewives → Inconvenient

Page | 71  
 
 • Site change it will make the customer have some confusion or

delay.

Size of internet and non internet banks

Profitability, Operating Efficiency and Financing

 Table 4 compares the profitability, operating efficiency and

financing pattern of Internet banks with non-Internet banks.

 On an average, Internet banks are more profitable than non-

Internet banks and are operating with lower cost as compared

to non-Internet banks, thus, representing the efficiency of the

Internet banks. The results are similar to Furst et al. (2000a,

2000b, 2002a and 2002band Hernando and

 Nieto (2005).

Page | 72  
 
  Internet banks in public sector, particularly, in nationalized

bank category are more profitable than non-Internet banks.

Comparatively, both the categories of private sector Internet

banks are less profitable than non-Internet banks but the

difference is not statistically significant.

 The lower profitability of these banks may be due to higher

operating expenses, both fixed cost as well as labour cost.

 The Internet banks in India are able to generate more deposits

or customer accounts than non-Internet banks. The results are

consistent with Hernando andNieto (2005).

 Internet banks in India rely more on traditional source of

financing i.e. deposits as compared to borrowing financing

which is inconsistent with previous studies (e.g., Furst et al.,

2000a, 2000b, 2002a and 2002b; Sullivan, 2000; Hasan et al.,

2002; DeYoung et al., 2006).

 As far as categories of the banks are concerned, the private

sector Internet banks fund less of their assets from traditional

sources, such as deposits. Internet banks in public sector,

particularly in nationalized bank category have also shown the

same preference.

 It appears as these banks have begun to view the addition of

Internet banking as a way to offer products that will reduce

their dependence on core deposits. On the other hand, foreign

Internet banks rely more on generating deposits, consistent with

overall results.

Page | 73  
 
Cost of Operations of Internet and Non-Internet Banks

Table also shows that the Internet banks in public and private sector

are generating higher labour cost. The results are expected as the

Internet banks involve the higher salaries for computer professionals

and other trained staff.

The Internet banks enable themselves to lower the financing cost (low

Interest paid on deposits and borrowings).

The present status of Internet banking in India and its implications for

Indian banking industry. A survey of the bank websites during the

period of June, 2007 reveals that only 57 percent of the commercial

banks operating in India as on March end 2006 offer Internet

banking. Using data on the financial performance, the present study

also analyzed the performance of an Internet group in comparison to

non-Internet banking group and impact of Internet banking on banks’

Page | 74  
 
performance and risk. A panel data of 85 banks (operating as on

March end 2006) was taken for the period of 1998-2006.

The analysis indicates several significant differences in the profile of

banks that offer Internet banking and banks that do not. Broadly

speaking, on an average, Internet banks are larger, more profitable

and are more operationally efficient than non-Internet banks. Internet

banks have higher asset quality and are better managed to lower the

expenses for building and equipment. In contrast to developed

countries Internet banks in India rely substantially on deposits, the

traditional source of financing.

Last, but not the least, attempt was made to see if there is any

association between adoption of Internet banking and the banks’

performance and risk. The evidence reveals no significant association

between adoption of Internet banking by banks and their

performance. However, Internet banking has a negative and

significant impact on profitability of private sector banks particularly

new private sector banks. Thus, adoption of Internet banking was a

reason behind the lower profitability of these banks, as Internet banks

in new private sector were operating with higher cost of operations,

including fixed cost and labour cost, thus affecting negatively the

profitability of these banks. On the other hand, internet banking has a

negative and significant impact on risk, which shows that, the

adoption of Internet banking has not increased the risk profile of

banks.

Page | 75  
 
 RESEARCH METHODOLGY
All the conclusions are based on the survey done in the working

within the time limit. I tried to select the sample representative of the

whole group during my research. I have collected data from people

linked with Punjab National Bank and Other Banks.

RESEARCH PLAN:
Preliminary Investigation: In which data on the situation

surrounding the problems shall be gathered to arrive at

· The correct definition of the problem.

· An understanding of its environment.

Exploratory Study:

To determine the approximate area where the problem lies.

RESEARCH DESIGN:
Research was initiated by examining the secondary data to gain

insight into the problem. By analyzing the secondary data, the study

aim is to explore the short comings of the present system and primary

data will help to validate the analysis of secondary data besides on

unrevealing the areas which calls for improvement.

DEVELOPING THE RESEARCH PLAN:

The data for this research project has been collected through self

Administration. Due to time limitation and other constraints direct

personal interview method is used. A structured questionnaire was

framed as it is less time consuming, generates specific and to the

point information, easier to tabulate and interpret. Moreover

respondents prefer to give direct answers. In questionnaires open

ended and closed ended, both the types of questions has been used.

Page | 76  
 
COLLECTION OF DATA:

Primary data:
All the people from different profession were personally visited and

interviewed. They were the main source of Primary data. The method

of collection of primary data was direct personal interview through a

structured questionnaire.

Secondary Data:
It was collected from internal sources. The secondary data was

collected on the basis of organizational file, official records, news

papers ,magazines, management

books, preserved information in the company’s database and website

of the company.

SAMPLING PLAN:
Since it is not possible to study whole universe, it becomes necessary

to take sample from the universe to know about its characteristics.

Sampling Units: Different Account Holder and Service receiver from

the bank

Sample Technique: Random Sampling.

Research Instrument: Structured Questionnaire.

Contact method: Personal Interview.

SAMPLE SIZE

My sample size for this project was 100 respondents. Since it was not

possible to cover the whole universe in the available time period, it

was necessary for me to take a sample size of 100 respondents.

LIMITATIONS
 PNB have a very few branches in Northern India

Page | 77  
 
  PNB have very few ATM .

 Research is only done in Gorakhupur city

 Research is self-financed so money is a major constraint

 Respondents are biased toward their current bank.

 Time is 6 weeks, so much of economic fluctuations are not seen

Page | 78  
 
 DATA ANALYSIS
Q.1 Do you have bank account in PNB ?

Answer Percentage

Yes 35

No 65

35%

Yes
No

65%

According to above table, 35% people have their account in PNB AND

65% in other banks.

Page | 79  
 
Q.2. What is your age ?

Age Percentage

Below 18 years 5

18 years – 25 years 10

25 years – 50 years 60

Above 50 years 25

100
90
80
70
60
Percentage

60
50
40
30 25
20
10
10 5
0
Below 18 years 18 years – 25 years 25 years – 50 years Above 50 years

According to above table, 5% customers are below 18 years, 10%

customers are from 18 years to 25 years, 60% customers from 25-50

years and 25% customers are above 50 years.

Page | 80  
 
Q.3 What is Your Sex ?

Sex Percentage

Male 80

Female 20

20%

Male
Female

80%

According to above table, 80% customers of PNB are Male and 20%

are female.

Page | 81  
 
Q.4. Which Bank do you have your account ?

Bank Percentage

Nationalised Bank 60

Private Bank 30

Co-operative Bank 8

Others 2

100
90
80
70
60
Percentage

60
50
40
30
30
20
8
10 2
0
Nationalised Bank Private Bank Co-operative Bank Others

According to above table, 60% respondents have their account in

Nationalized Bank, 30% in private bank, 8% in Co-operative bank and

2% in other banks.

Page | 82  
 
Q.5. Which services do you avail in PNB ?

Services Percentage

Debit Card 90

Credit Card 10

ATM 95

NetBanking 40

Mobile Banking 10

100 95
90
90
80
70
Percentage

60
50
40
40
30
20
10 10
10
0
Debit Card Credit Card ATM NetBanking Mobile
Banking

According to above table, 90% of customers of PNB use Debit Card,

10% Credit Card, 95% ATM, 40% Netbanking and 10% use Mobile

banking services of PNB.

Page | 83  
 
Q.6. Are You Satisfied with the Following Services ?

Services Percentage

Debit Card 95

Credit Card 60

ATM 95

NetBanking 80

Mobile Banking 70

100 95 95

90
80
80
70
70
60
Percentage

60
50
40
30
20
10
0
Debit Card Credit Card ATM NetBanking Mobile
Banking

According to above table, 95% customers of PNB are satisfied with

Debit Card, 60% of credit card facilities, 95% with ATMs, 80% with

Netbanking, 70% are satisfied with the mobile banking facilities of

PNB.

Page | 84  
 
Q.7 Net Banking and Mobile Banking Seems Profitable for You ?

Profitable Percentage

Yes 85

No 15

15%

Yes
No

85%

According to above table, 85% customers said that Net banking and

Mobile Banking seems profitable for them and 15% were not satisfied.

Page | 85  
 
Q.8 Why Net Banking and Mobile Banking Seems Profitable for

You ?

Profitable Percentage

Time Saving 100

Easy to Operate 80

Money Saving (in Reference to 100

visit Bank)

Others (Ques in Bank) 50

Get all Informations Easily 100

100 100 100

100
90 80
80
70
P erc entage

60
50
50
38
40
30
20
10
0
A ll the abov e
Tim e S av ing

Inform ations
O perate

R eferenc e to

(Q ues in
E as y to

O thers
v is it B ank )

B ank )
S av ing (in

G et all
M oney

E as ily

Page | 86  
 
According to above table, 100% customers were satisified that due to

Net Banking its time saving, 80% said Easy to Operate, 100% said

reduces the cost of traveling to bank etc, 50% are were that they avoid

ques in bank and 100% were satisfied that they can get all

information easily.

Page | 87  
 
Q.9 Impact of Netbanking is Profitable for Banks ?

Profitable Percentage

Yes 99

No 1

1%

Yes
No

99%

According to above table, 99% respondents said that Netbanking is

also profitable for bank and 1% were not.

Page | 88  
 
Q.10. Why its seems that Net Banking is Profitable for Banks ?

Reasons of Profit Percentages

Reduces High Labour Cost 75

Lower The Financing Cost 50

Lower The Expenses of Building 75

Expenses

High Cut Out in Stationary 70

Expenses

Reduces the Cost of Operation 70

Generate More Deposit and 80

Transaction

100

90

80
80
75 75

70 70
70

60
Percentage

50
50

40

30

20

10

0
Reduces High Low er The Low er The High Cut Out in Reduces the Cost of Generate More
Labour Cost Financing Cost Expenses of Building Stationary Expenses Operation Deposit and
Expenses Transaction

Page | 89  
 
According to above table, resons for profit of bank due to Net Banking

is due to 75% of Reduction in High Labour Cost, 50% Lowering the

financing cost, 75% reduction in expenses of building , 70% reduction

in stationary, 70% reduction in cost of operation and 80% generate

the more deposit and transaction.

Page | 90  
 
 FINDINGS

 35% people have their account in PNB AND 65% in other banks.

 5% customers are below 18 years, 10% customers are from 18

years to 25 years, 60% customers from 25-50 years and 25%

customers are above 50 years.

 80% customers of PNB are Male and 20% are female.

 60% respondents have their account in Nationalized Bank, 30%

in private bank, 8% in Co-operative bank and 2% in other

banks.

 90% of customers of PNB use Debit Card, 10% Credit Card, 95%

ATM, 40% Netbanking and 10% use Mobile banking services of

PNB.

 95% customers of PNB are satisfied with Debit Card, 60% of

credit card facilities, 95% with ATMs, 80% with Netbanking,

70% are satisfied with the mobile banking facilities of PNB.

 85% customers said that Net banking and Mobile Banking

seems profitable for them and 15% were not satisfied.

 100% customers were satisified that due to Net Banking its time

saving, 80% said Easy to Operate, 100% said reduces the cost of

traveling to bank etc, 50% are were that they avoid ques in bank

and 100% were satisfied that they can get all information easily.

 99% respondents said that Netbanking is also profitable for

bank and 1% were not.

 resons for profit of bank due to Net Banking is due to 75% of

Reduction in High Labour Cost, 50% Lowering the financing

cost, 75% reduction in expenses of building , 70% reduction in

Page | 91  
 
 stationary, 70% reduction in cost of operation and 80% generate

the more deposit and transaction.

 The analysis indicates several significant differences in the

profile of banks that offer Internet banking and banks that do

not. Broadly speaking, on an average, Internet banks are larger,

more profitable and are more operationally efficient than non-

Internet banks. Internet banks have higher asset quality and

are better managed to lower the expenses for building and

equipment. In contrast to developed countries Internet banks in

India rely substantially on deposits, the traditional source of

financing.

 Last, but not the least, attempt was made to see if there is any

association between adoption of Internet banking and the

banks’ performance and risk. The evidence reveals no

significant association between adoption of Internet banking by

banks and their performance. However, Internet banking has a

negative and significant impact on profitability of private sector

banks particularly new private sector banks. Thus, adoption of

Internet banking was a reason behind the lower profitability of

these banks, as Internet banks in new private sector were

operating with higher cost of operations, including fixed cost

and labour cost, thus affecting negatively the profitability of

these banks. On the other hand, internet banking has a

negative and significant impact on risk, which shows that, the

adoption of Internet banking has not increased the risk profile

of banks.

Page | 92  
 
 CONCLUSION
 

 Punjab National bank not only looks after its development in

particular area but over all development and growth keeping in

view their customer

 Changeable market condition continue to be a challenge for the

bank even though it has good experience in cooping with such

volatility

 We expect that P.N.B provide the group consumer banking and

wealth management activity with sufficient growth opportunity

 More and more customers should be educated to use the Net

Banking.

 Customers should be promoted to uses the Net Banking

 Customer should be made aware of the profits of using net

banking.

 The analysis indicates several significant differences in the

profile of banks that offer Internet banking and banks that do

not.

 Broadly speaking, on an average, Internet banks are larger,

more profitable and are more operationally efficient than non-

Internet banks. Internet banks have higher asset quality and

are better managed to lower the expenses for building and

equipment.

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  In contrast to developed countries Internet banks in India rely

substantially on deposits, the traditional source of financing.

 Last, but not the least, attempt was made to see if there is any

association between adoption of Internet banking and the

banks’ performance and risk.

 The evidence reveals no significant association between

adoption of Internet banking by banks and their performance.

However, Internet banking has a negative and significant impact

on profitability of private sector banks particularly new private

sector banks. Thus, adoption of Internet banking was a reason

behind the lower profitability of these banks, as Internet banks

in new private sector were operating with higher cost of

operations, including fixed cost and labour cost, thus affecting

negatively the profitability of these banks.

 On the other hand, internet banking has a negative and

significant impact on risk, which shows that, the adoption of

Internet banking has not increased the risk profile of banks.

 
 

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 Bibliography
BOOKS:

1. Banking strategy by Hrishikes Bhattacharya

2. Strategic Marketing Management by Richard M.S.Wilson.

Various sites

 www.pnbindia.com

 www.standardchartered.com/in

 www.economictimes.com

 www.indiatoday.com

 www.google.co.in

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 ANNEXURE

Q.1 Do you have bank account in PNB ?

Answer Tick Mark
Yes
No

Q.2. What is your age ?

Age Tick Mark
Below 18 years
18 years – 25 years
25 years – 50 years
Above 50 years

Q.3 What is Your Sex ?

Sex Tick Mark
Male
Female

Q.4. Which Bank do you have your account ?

Bank Tick Mark
Nationalised Bank
Private Bank
Co-operative Bank
Others

Q.5. Which services do you avail in PNB ?

Services Tick Mark

Debit Card
Credit Card
ATM
NetBanking
Mobile Banking

Q.6. Are You Satisfied with the Following Services ?

Services Tick Mark

Debit Card
Credit Card
ATM
NetBanking

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Mobile Banking
Q.7 Net Banking and Mobile Banking Seems Profitable for You ?
Profitable Tick Mark
Yes
No

Q.8 Why Net Banking and Mobile Banking Seems Profitable for
You ?
Profitable Tick Mark
Time Saving
Easy to Operate
Money Saving (in Reference to
visit Bank)
Others (Ques in Bank)
Get all Informations Easily

Q.9 Impact of Netbanking is Profitable for Banks ?

Profitable Tick Mark
Yes
No

Q.10. Why its seems that Net Banking is Profitable for Banks ?
Reasons of Profit Tick Mark
Reduces High Labour Cost
Lower The Financing Cost
Lower The Expenses of Building
Expenses
High Cut Out in Stationary
Expenses
Reduces the Cost of Operation
Generate More Deposit and
Transaction

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