INTRODUCTION:

INTRODUCTION OF PNB:

Punjab national bank is the third largest bank in India. it was registered on may 19, 1894 under the Indian companies act with its office in Anarkali bazaar Lahore. Today, the bank is the second largest state owned commercial bank in India with about 5000 branches across 764 cities. It serves over 37 million customers. The bank has been ranked 248th biggest bank in the world by the bankers almanac, London. the bank's total assets for financial year 2007 were about us$60 billion. PNB has a banking subsidiary in the UK, as well as branches in Hong Kong, Dubai and Kabul, and representative offices in Almaty, Dubai, Oslo, and Shanghai. Punjab national bank is one of the big four banks of India, along with ICICI bank, state bank of India and Canara bank

HISTORY:

1895: PNB commenced its operations in Lahore. PNB has the distinction of being the first Indian bank to have been started solely with Indian capital that has survived to the present. (the first entirely Indian bank, the Oudh 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,[2] 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 headoffice, 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, 1 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. 2

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.

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.

2008: PNB opened a branch in Hong Kong. 2009: PNB opened a representative office in Oslo, Norway, and a second branch in Hong Kong, this in Kowloon. 2010: PNB received permission to upgrade its representative office in the Dubai international financial centre to a branch.

BOARD OF DIRECTOR OF PNB:

Shri. K.R.Kamath Chairman & Managing Director and Dy. Chairman of Indian Banks Association

Shri. Rakesh Sethi Executive Director

Smt. Usha Ananthasubramanian Executive Director

Shri. Anurag Jain Govt. of India Nominee Director

Shri. Jasbir Singh Reserve Bank of India Nominee Director

Shri. M P Singh Workmen Employees Director

Shri. Pradeep Kumar Officer Director

Shri. M A Antulay Part-time non-official Director

Shri. B B Chaudhry Part-time non-official Director

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.

Other Income surged 113% y-o-y, driven by strong treasury gains of Rs355 crore during the quarter in line with industry trends, even as Fee income was also robust at 45% y-o-y, on the back of strong balance sheet growth.

Operating expenses were higher than expected on account of Rs150 crore of provisions for imminent wage hikes. Gross and Net NPA ratios remained stable sequentially at 1.8% and 0.2%, with the bank not adopting the guidelines of treating floating provisions as part of tier 2 capital instead of adjusting against NPAs on express permission from the RBI

AWARDS AND DISTINCTIONS

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

SWOT ANALYSIS OF BANK:

STRENGTH: Fundamentally sound bank 3.7 crore strong customer base Well-entrenched Brand Image Dominant position in Indo-Gangetic Plain No competition A leader amongst Public Sector Banks High proportion of customer base in deposits Strong Risk Management Practices Redefined processes through technology initiatives like CBS, ATM, Internet Banking 100% CBS branches High tech platform incorporating EDW, CRM etc. Large network of branches with 66% in Rural & Semi-urban areas

WEAKNESS: Predominant presence in less developed areas leading to high operating cost. Complacency (Structural & Environmental) Weak & Inconsistent MIS rendering decision making difficult Limited International presence. Low NRI business. More dependence on conventional low margin business No Income from Financial Products such as Insurance, Mutual Fund, Credit Card etc. State Ownership has affected level playing field and competitive ability Less flexibility in dealing with strategic HR & operational issues Imbalance in distribution/ deployment of staff Inadequate skills for modern banking Changing environment, adoption of technological advancement, marketing of products requires change in the mind-set of employees 8

THREATS: Aggressive marketing by competitor banks Expansion of peer Banks/Private Sector Banks in Indo-Gangetic belt eroding our dominance Loss of savings business to Mutual Fund/ Insurance Products which are aggressively marketed as being more remunerative Technological parity of competitor banks Aggressive strategy and innovative products, larger risk appetite of other banks

OPPORTUNITIES: Rural India is the next growth horizon with an opportunity 3 times the size of Urban India Financial Inclusion is a clear-cut opportunity with overall exposure to formal services of finance being about 20% Great opportunity for expanding business with over 60% population outside the banking service net IT Initiative creating a back bone for increasing reach. It provides an opportunity to go beyond the Brick & Mortar Bank has a visionary leadership which can transform the bank Large workforce of 55398 numbers of employees. Each and every employee has to believe we can do it, usher in change in our attitudes/conventional wisdom, be a learner willing to adapt to the changing banking environment.

CONCLUSIONS AND SUGGESTIONS:

With regard to banking products and services, consumers respond at different rates, depending on the consumers characteristics. Hence I PNB should try to bring their new product and services to the attention of potential early adopters. Due to the intense competition in the financial market, PNB should adopt better strategies to attract more customers. Return on investment company reputation and premium outflow are most preferred attributes that are expected by the respondents. Hence greater focus should be given to these attributes. PNB should adopt effective promotional strategies to increase the awareness level among the consumers. PNB should ask for their consumer feedback to know whether the consumers are really satisfied or dissatisfied with the service and product of the bank. If they are dissatisfied, then the reasons for dissatisfaction should be found out and should be corrected in future. The PNB brand name has earned a lot of goodwill and enjoys high brand equity. As there is intense competition, PNB should work hard to maintain its position and offer better service and products to consumers. The bank should try to increase the Brand image through performance and service then, only the customers will be satisfied. Majority of the people find banking important in their life, so PNB should employ the strategies to convert the want in to need which will enrich their business.

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