Indroduction

Established in 1895 in Lahore, Punjab National Bank is one of the oldest banks in India having a virtual presence in every important center of the country. The bank has over 35 million customers through 4540 offices including 421 extension counters, out of which 2/3 of its branches in rural and semi rural areas-the largest among nationalized banks, which makes it enjoy one of the highest penetration rate of banking activities in the country. Punjab National Bank caters to a wide variety of audience through spectrum of services including corporate and personal banking, industrial finance, agricultural finance and international finance. Sitting on a vast banking resources and significant presence in almost every lending sphere, the bank has a capital adequacy ratio (CAR), well above the Basel-2 regulatory requirement, at 12.96% as on June 2008, despite being exposed to numerous market and credit risk elements. Constantly strengthening the capital adequacy ratio through internal accruals and a regular increase in Tier 1 capital has put the bank on a very comfortable and formidable position. Punjab National Bank has a net interest margin (NIM) higher than the industry average due to a mix of improving yields and low cost funding base and has one of the healthiest low cost current account saving account (CASA) ratio of 41.31%. It also enjoys the highest rating by all four domestic rating agencies and one of the few banks to boast a AAA rating on its perpetual debt issue. The bank has ambitious plans of major technological up-gradation to establish capability of having 100,000 terminals under the Core Banking Solutions (CBS) with a greater thrust on increasing international footprints.The bank has successfully migrated to the Basel 2 accord in February this year. 2.1.1 HISTORY OF THE BANK Punjab National Bank (PNB) was registered on May 19, 1894 under the Indian Companies Act with its office in Anarkali Bazaar Lahore. TheBank is the second largest government-owned commercial bank in India with about 4,500 branches across 764 cities. It serves over 37 million customers. The bank has been ranked 248th biggest bank in the world by Bankers Almanac, London. The bank's total assets for financial year 2007 were about US$60 billion. PNB has a banking subsidiary in the UK, as well as branches in Hong Kong and Kabul, and representative offices in Almaty, Dubai, Oslo, and Shanghai. 1895: PNB commenced its operations in Lahore. PNB has thedistinction of being the first Indian bank to have been started solely with Indian capital that has survived to the present. (The first entirely Indian bank, the Ouch Commercial Bank, was established in 1881 in Faizabad, but failed in 1958.) PNB's founders included several leaders of the Swadeshi movement such as Dyal Singh Majithia and Lala HarKishen Lal,[1] Lala Lalchand, Shri Kali Prosanna Roy, Shri E.C.

Jessawala, Shri Prabhu Dayal, Bakshi Jaishi Ram, and Lala Dholan Dass. Lala Lajpat Rai was actively associated with the management of the Bank in its early years. 1904: PNB established branches in Karachi and Peshawar. 1940: PNB absorbed Bhagwan Dass Bank, a scheduled bank located in Delhi circle. 1947: Partition of India and Pakistan at Independence. PNB lost its premises in Lahore, but continued to operate in Pakistan. 1951: PNB acquired the 39 branches of Bharat Bank (est. 1942) Bharat Bank became Bharat Nidhi Ltd. 1961: PNB acquired Universal Bank of India. 1963: The Government of Burma nationalized PNB's branch in Rangoon (Yangon). September 1965: After the Indo-Pak war the government of Pakistan seized all the offices in Pakistan of Indian banks, including PNB's head office, which may have moved to Karachi. PNB also had one or more branches in East Pakistan (Bangladesh). 1960s: PNB amalgamated Indo Commercial Bank (est. 1933) in a rescue. 1969: The Government of India (GOI) nationalized PNB and 13 other major commercial banks, on July 19, 1969. 1976 or 1978: PNB opened a branch in London. 1986 The Reserve Bank of India required PNB to transfer its London branch to State Bank of India after the branch was involved in a fraud scandal. 1986: PNB acquired Hindustan Commercial Bank (est. 1943) in a rescue. The acquisition added Hindustan's 142 branches to PNB's network. 1993: PNB acquired New Bank of India, which the GOI had nationalized in 1980. 1998: PNB set up a representative office in Almaty, Kazakhstan. 2003: PNB took over Nedungadi Bank, the oldest private sector bank in Kerala. Rao Bahadur T.M. Appu Nedungadi, author of Kundalatha, one of the earliest novels in Malayalam, had established the bank in 1899. It was incorporated in 1913, and in 1965 had acquired selected assets and deposits of the Coimbatore National Bank. At the time of the merger with PNB, Nedungadi Bank's shares had zero value, with the result that its shareholders received no payment for their shares. PNB also opened a representative office in London.

2004: PNB established a branch in Kabul, Afghanistan. PNB also opened a representative office in Shanghai. PNB established an alliance with Everest Bank in Nepal that permits migrants to transfer funds easily between India and Everest Bank's 12 branches in Nepal. 2005: PNB opened a representative office in Dubai. 2007: PNB established PNBIL - Punjab National Bank (International) - in the UK, with two offices, one in London, and one in South Hall. Since then it has opened a third branch in Leicester, and is planning a fourth in Birmingham. Gatin Gupta became Chairmen of Punjab National Bank. 2008: PNB opened a branch in Hong Kong. 2009: PNB opened a representative office in Oslo, Norway. Outlook: Punjab National Bank has always stood with the time even in the most dire of circumstances. The bank is facing stiff challenges from its private sector counterparts. According to the RBI data, the banking business composition breakup between private sector banks and nationalized banks stood at 4% and 60% respectively, But the equation has taken a paradigm shift in favour of private sector banks owing to phased liberalisation of the BFSI sector, the composition stood at 21% as against nationalised banks share with reduced 49% in 2007. In a macro-prudential analysis of the Indian economy, it seems as the Indian banking industry has come a long way and entered in its ever challenging growth phase in a very prominent time as more than 49% of population financially excluded offers immense opportunity to the bank. Pursuing its financial inclusion, Punjab National Bank has opened more than 7.86 lakh No frills Accounts and intends to cover 30,000 villages, 75 million people by 2010 through Biometric Technology apart from comprehensive scheme launched for covering finance and insurance (health and life) for rickshaw pullers, project for empowering women weavers, vegetables vendors, etc. The core focus of the bank will be on retaining and further improving low cost deposits, lending to agriculture and small and medium enterprises and repositioning of subsidiaries and joint ventures. At the time of global financial turmoil, where the banks all over the world are creeping under tremendous pressure, Punjab National Bank has managed to insulate itself away from fatal transactions and has strictly adhered to the RBI guidelines.

About the company

Distinction of being the first Indian bank to have been started solely with Indian capital Largest branch network in India - 4525 Offices including 432 Extension Counters and morethan 58300 employees spread throughout the country.Strong correspondent banking relationships with more

than 217 international banks of the world .More than 50 renowned international banks maintain their Ru ee Accounts with PNB Serves over 3.5 crores customers

Vision
To evolve and position the bank as a world class progressive, cost effective and customer friendly institution providing comprehensive financial and related services;integrating frontiers of technology and serving various segments of society especially the weaker sections; committed to excellence in serving the public and also excelling in corporate values

Mission
To provide excellent professional services and improve its position as a leader in financial and related services; build and maintain a team of motivated and committed workforce with high work ethos; use latest technology aimed at the customer satisfaction and act as an effective catalyst for socio economic development

PNB Capital Services Limited: Stands merged with PNB

Organizational Structure,
Head office 7,Bhikhaji Cama place, New Delhi-110066 Zonal offices (25) Regional offices (48) Branches (4525)

Subsidiaries
PNB Gilts Ltd. : A subsidiary of Punjab National Bank which was amongst the first ones to get the license forundertaking activities in the Government Security market, as a primary dealer in 1996. PNB Housing Finance Ltd. : This is a wholly owned subsidiary of Punjab National Bank, is engaged in providinghousing loans for purchase, construction and upgradation of a dwelling unit. The company offers Loans for Construction or for purchase of house/flat Renovation/ repairs Construction of residential projects Loans to NRIs are also provided for purchase/ construction of house/ flat along with a resident/ non- resident co-borrower

Legal framework,
The Banking Regulation Act, 1949 and the Reserve Bank of India Act, 1934 authorize the RBI to regulate the banking sector IT ACT 2000, bankers book act new way of banking can be safe, secure and adaptive. India had adopted Basel I guidelines in 1999. India to adopt Basel II Under Basel I, risk-weights were pre-decided by regulator In Basel II, risk-weights linked to the external ratings by accredited rating agencies Banks allowed to develop there own internal ratings of different assets and risk-weight them based on those ratings. Supervisory review process by national regulators Disclosure by banks of key information regarding their risk exposures and capital positions and aims at improving market discipline. The deadline for implementing Basel II, originally set for March 31, 2007, has now been extended to March 31, 20

Awards & Achievements of punjab national bank Awrads,

Ranked 21st amongst top 500 companies by the leading financial daily, Economic Times. Ranked as 323rd biggest bank in the world by Bankers Almanac (January 2006), London. Earned 9th place among India's Most Trusted top 50 service brands in Economic Times- A.C Nielson Survey. Ranked 368 amongst the top 1000 banks in the world according to "The Banker" London. Golden Peacock Award for Excellence in Corporate Governance - 2005 by Institute of Directors. FICCI's Rural Development Award for Excellence in Rural Development - 2005

National Award for Excellence in SSI Lending- Ranked 2nd for four consecutive years from 2002 to 2005 The Banker's Almanac - Ranked 3rd amongst banking sector in India and 323rd rank in the world in 2006 AC Nielson Survey - 9th amongst Top 50 Most Trusted Services Brands in India Golden Peacock Award- for excellence in corporate governance in 2005

Achievements
Punjab National Bank announced its Q1FY2010 results on 29 July 2009, delivering 62% y-o-y growth in net profits to Rs832 crore (Rs512cr), substantially ahead of expectations on account of large treasury gains, apart from healthy operating performance. While the banks deposit growth was reasonably robust at 4.4% sequentially and 26.5% y-o-y, unlike the peers its growth in advances also remained strong at 38% y-o-y. In spite of being at the forefront of PLR cuts, the bank posted a healthy growth in Net Interest Income (NII) of 29% y-o-y.

Corporate Social Responsibility

Our Community PNBs approach to Corporate Responsibility in the community is firmly rooted in its commitment to support people below poverty line and downtrodden section of the society. During the year 2007-08, the Bank also took many initiatives to support various NGOs, societies, charitable institutions, educational institutions and organizations working for the benefit of downtrodden and weaker sections of the society, tribal orphans, underprivileged, spastics, handicapped, mentally retarded children, women in shelter homes, etc. through donations to the tune of Rs. 1.81 crore. The Bank donated a sum of Rs.10 lac for construction of 20 dwelling units in the flood-affected area of Balasore District (Orissa). The Bank also participated in setting up a Rural Development and Self Employment Training Institute (RUDSETI) in Solan Distt. (HP). The objective is to train and impart short duration training to PMRY applicants, SHGs and beneficiaries of other Govt. Sponsored Schemes and equip the trainees so as to be self-supporting.

In addition, the Bank contributed a sum of Rs.50 lac to Madras School of Economics for imparting higher education and conducting research in the area of economics including its various sub-disciplines. a) Conducting community based programme The Bank has organized 688 community based programmes throughout the country, which includes 124 free medical, eye and general check-up camps, 2 camps to distribute artificial limbs, 324 Tree Plantation Camps and 40 Blood Donation Camps. The Bank is also maintaining 24 Library-cum-Reading Rooms in rural areas in Punjab, M.P., Haryana, Bihar, Eastern region, Himachal Pradesh and Uttar Pradesh States. b) Promoting Sports The Bank takes keen interest in nurturing young talent. Towards this end, PNB Hockey Academy is giving training to 25 talented young players who have also been pursuing their academic curriculum. A Senior Hockey Team has been formed in the Bank and the Bank has employed 20 players. The hockey players groomed by PNB Hockey Academy represented the country at various International level hockey tournaments viz. Asia Cup, Junior World Cup, Olympic Qualifiers etc. The Bank has won the Winners Trophy in Banks Olympiad by winning for three consecutive years.

Our Environment

As a corporate citizen, the Bank recognises its responsibility to the environment and aims to operate & lend responsibly. The Bank feels that besides creating awareness about pollution which is responsible for Global warming, there is a need for taking steps for reducing pollution by banking system as a whole. The Bank is committed to strict adherence to RBI guidelines/all necessary statutory & other approvals/permissionsincluding from Pollution Control Board for managing the social and environmental impact of financing projects. restrict financing to industries producing Ozone depleting substances; ensure that adequate checkpoints and research has been applied before financing/investing, so as to avoid valuation losses, legal risk and reputational loss arising out of any association with polluting businesses. provide finance to renewable energy projects;

provide training to employees about how to reduce carbon footprint and advise them to buy competitively priced energy and transport services. reduce the Banks carbon footprint. The use of technology, such as e-mail and electronic payments, across the Bank has significantly reduced paper usage. During the last one year, 2000 new e-mail IDs have been created. Presently, the Bank is having 10000 e-mail IDs. The storage space and attachment size of mail box have been increased to 50 MB from 10 MBand 4 MB from 1 MB, respectively. PNB Farmers Welfare Trust

The Bank established PNB Farmers Welfare Trust in the year 2000 for welfare of the farmers, women and youth in rural areas. Under the aegis of the Trust, eight Farmers Training Centres (FTCs) are operational at Village Sacha Khera (Haryana), Vidisha (MP), Neemrana (Rajasthan),Shamsher Nagar (Punjab), Saifai (UP), Labhandi (Chhattisgarh), Mehraj (Punjab) & Pillayarpatti (Tamil Nadu). Land has been obtained at Jhalara Patan (Rajasthan) where Trust intends to start 9th Farmers Training Centre. Mobile Van at FTC Sacha Khera is providing off-site training on improved package & practices of agricultural crops & allied activities, soil testing and Jatropha cultivation. In addition, the van is acting as an information kiosk.As a major objective of the Farmers Welfare Trust Scheme, these FTCs have become training ground for the farmers, small traders, agri-businessmen, entrepreneurs, etc. These Centresprovide training FREE OF COST. They imparted training to 1,34,646 farmers & youths including 18,900 women till March 2008. Further, during 2007-08, 30 Human Health Check-up Camps and 88 Animal Health Check-up Camps were conducted, in addition to arranging 50 visits to Agricultural Universities / Colleges / Fairs / Govt. Farms etc. Each FTC has also adopted one village for developing it as a Model Village at a cost of Rs 5 lakh.

PNB Centenary Rural Development Trust

The Bank has established PNB Centenary Rural Development Trust with an objective of assisting rural youth for taking up gainful employment and rural development. Three units under the Trust are working, viz. Soil Testing and Artificial Insemination Centre at Village Matki Jharoli (UP), Training Centre for Rural Youth for Self Employment at village Dhudike (Punjab) and PNB Swarojgar Vikas Sansthan for training of unemployed youth at Patna (Bihar). At Matki Jharoli Centre, 31,297 soil samples have been analyzed, 7653 animals artificially

inseminated and 63,222 diseased animals have been treated till March 2008. Besides, 81,211 persons have attended demonstrations on vermi composting and solar energy. At Dhudike Centre, the birth place of Shri Lala Lajpat Rai, training on self employment ventures like repair and maintenance of farm machinery; cutting, tailoring & embroidery; computer courses etc. have been imparted to 555 boys and 526 girls. PNB Swarojgar Vikas Sansthan, Patna (Bihar) is a Rural Development and Self Employment Training Institute established on 15.1.2007 for channelising youth power in wealth creation through entrepreneurship development and imparting knowledge and skill required for taking up self employment ventures. Till March 2008, training has been provided to 378 persons including 330 women by the Institute.

Products and services Savings Fund Account - Total Freedom Salary Account, PNB Prudent Sweep, PNB Vidyarthi SF Account, PNB Mitra SF Account Current Account - PNB Vaibhav, PNB Gaurav, PNB Smart Roamer Fixed Deposit Schemes - Spectrum Fixed Deposit Scheme, Anupam Account, Mahabachat Schemes, Multi Benefit Deposit Scheme Credit Schemes - Flexible Housing Loan, Car Finance, Personal Loan, Credit Cards Social Banking - Mahila Udyam Nidhi Scheme, Krishi Card, PNB Farmers Welfare Trust Corporate Banking - Gold Card scheme for exporters, EXIM finance Business Sector - PNB Karigar credit card, PNB Kushal Udhami, PNB Pragati Udhami, PNB Vikas Udhami Apart from these, and the PNB also offers locker facilities, senior citizens schemes, PPF schemes and various E-services.