CHAPTER-1

INTRODUCTION

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History of e-commerce
The beginnings of e-commerce can be traced to the 1960s, when businesses started
using Electronic Data Interchange (EDI) to share business documents with other
companies. In 1979, the American National Standards Institute developed ASC X12
as a universal standard for businesses to share documents through electronic
networks. After the number of individual users sharing electronic documents with
each other grew in the 1980s, in the 1990s the rise of eBay
and Amazon revolutionized the e-commerce industry. Consumers can now purchase
endless amounts of items online, both from typical brick and mortar stores with e-
commerce capabilities and one another.

E-commerce applications
E-commerce is conducted using a variety of applications, such as email, online
catalogs and shopping carts, EDI, File Transfer Protocol, and web services. This
includes business-to-business activities and outreach such as using email for
unsolicited ads (usually viewed as spam) to consumers and other business prospects,
as well as to send out e-newsletters to subscribers. More companies now try to entice
consumers directly online, using tools such as digital coupons, social media
marketing and targeted advertisements.

The benefits of e-commerce include its around-the-clock availability, the speed of

access, the wide availability of goods and services for the consumer, easy
accessibility, and international reach. Its perceived downsides include
sometimes-limited customer service, consumers not being able to see or

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touch a product prior to purchase, and the necessitated wait time for
product shipping.

The e-commerce market continues to grow: Online sales accounted for

more than a third of total U.S. retail sales growth in 2015, according to
data from the U.S. Commerce Department. Web sales totaled $341.7
billion in 2015, a 14.6% increase over 2014. E-commerce conducted using
mobile devices and social media is on the rise as well: Internet Retailer
reported that mobile accounted for 30% of all U.S. e-commerce activities
in 2015. And according to Invesp, 5% of all online spending was via social
commerce in 2015, with Facebook, Pinterest and Twitter providing the
most referrals.

The rise of e-commerce forces IT personnel to move beyond

infrastructure design and maintenance and consider numerous customer-
facing aspects such as consumer data privacy and security. When
developing IT systems and applications to accommodate e-commerce
activities,data,
governancerelated regulatory,compliance mandates, personally
identifiable information privacy rules and information protection
protocols must be considered.

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Government regulations for e-commerce
In the United States, the Federal Trade Commission (FTC) and the Payment Card
Industry (PCI) Security Standards Council are among the primary agencies that
regulate e-commerce activities. The FTC monitors activities such as online
advertising, content marketing and customer privacy, while the PCI Council
develops standards and rules including PCI-DSS compliance that outlines
procedures for proper handling and storage of consumers' financial data.

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 CHAPTER- 2

COMPANY PROFILE

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 INDUSTRIAL PROFILE:

The financial sector is one of the most important parts of many of the world's
developed economy. It is one of the largest portions of the S&P 500. The largest
companies within the financial sector are some of the most recognizable banking
institutions in the world such as JPMorgan Chase & Co., Wells Fargo & Company,
Bank of America Corporation and Citigroup Inc. Along withbanks, the financial
sector also consists of insurance, REITs, capital markets, consumer finance,
financial services and mortgage finance. The second largest industry within the
sector is insurance companies, which includes firms such as American International
Group and Chubb Limited.

When the business cycle is on an upswing, the financial sector benefits from
additional investments. Improved economic conditions usually lead to more capital
projects and increased personal investing. New projects require financing, which
usually leads to a larger number of loans.

Financial stocks are very popular investments to own within a portfolio.

Most companies within the sector issue dividends and are judged on the overall
strength of their financial health. In the financial crisis of 2007-2008, the financial
sector was one of the hardest hit with companies such as Lehman Brothers filing
for bankruptcy. After an influx of government regulation and restructuring, the
financial sector is considerably stronger in 2016. Economists often tie the overall
health of the economy with the health of the financial sector. If financial
companies are weak, this is a detriment to the average consumer. Financial
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companies provide loans for businesses, mortgages to homeowners and insurance
to consumers. If these activities are restricted, it stunts growth in both small
business and real estate.

Over the last 10 years, the sector has produced a negative 1 percent overall
return for investors for the period ending May 31, 2016. This was caused by the
financial crisis that produced catastrophic returns in 2007, down 18.63 percent, and
2008, down 55.32 percent. However, over the last five years, the sector has
rebounded, giving investors an annual average return of 10.55 percent.

COMPANY PROFILE

Punjab National Bank (PNB) is an Indian multinational banking and financial

services company. It is a state-owned corporation based in New Delhi, India. The
bank was founded in 1894. As of 31 March 2017, the bank has over 80 million
customers, 6,937 branches (7,000 as on 2nd oct, 2018) and 10681 ATMs across
764 cities.[6]

PNB has a banking subsidiary in the UK (PNB International Bank, with seven
branches in the UK), as well as branches in Hong Kong, Kowloon, Dubai, and
Kabul. It has representative offices in Almaty (Kazakhstan), Dubai (United Arab
Emirates), Shanghai (China), Oslo (Norway), and Sydney (Australia). In Bhutan it
owns 51% of Druk PNB Bank, which has five branches. In Nepal PNB owns 20% of
Everest Bank Limited, which has 50 branches. Lastly, PNB owns 84% of JSC (SB)
PNB Bank in Kazakhstan, which has four branches.

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History

Punjab National Bank is a PSU working under Central Government of India

regulated by RBI Act, 1934 and Banking Regulation Act, 1949. Punjab National
Bank was registered on 19 May 1894 under the Indian Companies Act, with its
office in Anarkali Bazaar, Lahore, in present-day Pakistan. The founding board was
drawn from different parts of India professing different faiths and of varying back-
ground with, the common objective of creating a truly national bank that would
further the economic interest of the country.[1] PNB's founders included several
leaders of the Swadeshi movement such as Dyal Singh Majithia and Lala
Harkishen Lal, Lala Lalchand, Kali Prosanna Roy, E. C. Jessawala, Prabhu Dayal,
Bakshi Jaishi Ram, and Lala Dholan Dass.[7][8] Lala Lajpat Rai was actively
associated with the management of the Bank in its early years. The board first
met on 23 May 1894.[1] The bank opened for business on 12 April 1895 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,
Oudh 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, Jawahar Lal Nehru, Lal Bahadur Shastri, Indira Gandhi, as well
as the account of the famous Jalianwala Bagh Committee.[1]

Timeline

In 1900 PNB established its first branch outside Lahore in India. Branches in
Karachi and Peshawar followed. The next major event occurred in 1940 when PNB

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absorbed Bhagwan (or Bhugwan) Dass Bank, which had its head office in Dehra
Dun.

At the Partition of India and the commencement of Pakistani independence, PNB

lost its premises in Lahore, but continued to operate in Pakistan. Partition forced
PNB to close 92 offices in West Pakistan, one-third of its total number of
branches, and which held 40% of the total deposits. PNB still maintained a few
caretaker branches. On 31 March 1947, even before Partition, PNB had decided to
leave Lahore and transfer its registered office to India; it received permission
from the Lahore High Court on 20 June 1947, at which time it established a new
head office at Under Hill Road, Civil Lines in New Delhi. Lala Yodh Raj was the
Chairman of the Bank.

In 1951, PNB acquired the 39 branches of Bharat Bank (est. 1942). Bharat Bank
became Bharat Nidhi Ltd. In 1960, PNB again shifted its head office, this time from
Calcutta to Delhi. In 1961, PNB acquired Universal Bank of India, which
Ramakrishna Jain had established in 1938 in Dalmianagar, Bihar. PNB also
amalgamated Indo Commercial Bank (est. 1932 by S. N. N. Sankaralinga Iyer) in a
rescue. In 1963, The Burmese revolutionary government nationalized PNB's
branch in Rangoon (Yangon). This became People's Bank No. 7.[9] After the Indo-
Pak war, in September 1965 the government of Pakistan seized all the offices in
Pakistan of Indian banks. PNB also had one or more branches in East Pakistan
(Bangladesh).

The Government of India (GOI) nationalized PNB and 13 other major commercial
banks, on 19 July 1969. In 1976 or 1978, PNB opened a branch in London. some

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ten years later, in 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. That same year, 1986, PNB acquired Hindustan Commercial Bank (est.
1943) in a rescue. The acquisition added Hindustan's 142 branches to PNB's
network. In 1993, PNB acquired New Bank of India, which the GOI had
nationalized in 1980. In 1998 PNB set up a representative office in Almaty,
Kazakhstan.

In 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. In 2004, PNB established a branch in
Kabul, Afghanistan, a representative office in Shanghai, and another in Dubai. PNB
also established an alliance with Everest Bank Limited in Nepal that permits
migrants to transfer funds easily between India and Everest Bank's 12 branches in
Nepal. Currently, PNB owns 20% of Everest Bank. Two years later, PNB
established PNBIL – Punjab National Bank (International) – in the UK, with two
offices, one in London, and one in Southall. Since then it has opened more
branches, this time in Leicester, Birmingham, Ilford, Wembley, and
Wolverhampton. PNB also opened a branch in Hong Kong. In January 2009, PNB
established a representative office in Oslo, Norway. PNB hopes to upgrade this to
a branch in due course. In January 2010, PNB established a subsidiary in Bhutan.
PNB owns 51% of Druk PNB Bank, which has branches in Thimpu, Phuentsholing,
and Wangdue. Local investors own the remaining shares. Then on 1 May, PNB
opened its branch in Dubai's financial center.

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 CHAPTER 3

RESEARCH METHODOLOGY

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 RESEARCH METHODOLOGY

OBJECTIVE OF THE STUDY

The main objective of this study is to know about the prevailing law in Punjab
National Bank, Ottappalam.

DATA COLLECTION

In order to achieve the objective, primary data along with secondary data is used..

AREA OF STUDY:

The data needed is collected from PNB, Ottappalm .

NAME OF THE PERSON MET:

For collecting data one of the manager of PNB, Ottappalam was interviewed.

TOOLS USED FOR DATA COLLECTION:

Primary data:

The data needed for the study was collected directly through INTERVIEW.

Secondary data:

The data is collected from the website of PNB.

TOOLS USED FOR DATA ANALYSIS:

After organizing the data collected through interview, inferential analysis is used in
order to get in to a conclusion.

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 CHAPTER 4

DATA ANALYSIS

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 DATA ANALYSIS

Banking law is not a discrete area of law like contract or torts. It however, describes
a collection of legal enactments which impact banking transactions and the banker-
customer relationship. The legal principles applicable on banking businesses are
drawn from a range of sources, the major relevant legislation in Punjab National
Bank includes:
1. Companies Act 1956
2. Limitation Act, 1963
3. Bankers’ Book Evidence Act, 1891
4. Tax laws
5. Recovery of Debts Due to Banks and Financial
Institutions Act, 1993 (DRT Act)
6. Lenders Liability Act
7. Banking Ombudsman
8. The Consumer Protection Act,1986

1.COMPANIES ACT 1956

It explains about the whole procedure of the how to form a company, its
fees procedure, name, constitution, its members, and the motive behind the
company, its share capital, about its general board meetings, management and
administration of the company including an important part which is the
directors as they are the decision makers and they take all the important
decisions for the company their main responsibility and liabilities about the

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company matter the most. The Act explains about the winding of the business
as well and what happens in detail during liquidation period.

2.LIMITATION ACT, 1963

The Limitation Act, 1963 specifies certain period prescribed within which any
suit appeal or application can be made. The ‘prescribed period’ means the period of
limitation computed in accordance with the provisions of the Limitation Act. A
banker is allowed to take legal action by filing a suit, prefer an appeal and apply for
recovery only when the documents are within the period of limitation. On the other
hand, if the documents expired or are time barred, the banker cannot take any legal
course of action to recover the dues. Therefore, banks should be careful to ensure
that all legal loan documents held are valid and not time barred. In other words, it is
the responsibility of lenders to ensure that all loan documents are properly executed
and they are all within the required limitation period as per the limitation act. This
is one of the crucial aspect in credit management of banks.

Period of limitation and the time from which the period

begins to run is shown below:

NATURE OF DOCUMENTS LIMITATION PERIOD

A Demand Promissory Note Three years from the date of DP Note

A Bill of exchange payable at sight or Three years when the bill is presented
Three years or upon presentation.
An Usance Bill of exchange Three years from the due date

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3.BANKERS’ BOOK EVIDENCE ACT, 1891

(a) The Act extends to the whole of India except the State of Jammu & Kashmir

(b) ‘Bank’ and ‘banker’ means

(i) Any company or corporation carrying on business of banking

(ii) Any partnership or individual to whose books, provision of this Act are made
applicable

(iii) Any post office saving bank or money order office

(c) ‘Bankers’ books include all books like ledgers, day book, cash book and all other
records used in the ordinary business of a bank. The records can be maintained in
any form such manual records, printed computer printouts, it can be in written form
or stored in a micro-film, magnetic tape or any other form of mechanical or
electronic data. Such record can be either on site or at any off site location including
a back-up or disaster recovery site (d) Court means the person or persons before
whom a legal proceeding is held and the ’judge’ refers to a judge of a High Court

(e) Legal proceeding refers to different types of inquiries proceedings and

investigation. Legal proceedings means

(i) any proceeding or inquiry in which evidence is or may be given

(ii) an arbitration

(f) A certified true copy of the bank records.

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4.TAX LAWS

Like any other business units, companies, banks and financial institutions are
required to ensure that all the applicable provisions of the various tax laws (Income
Tax Act, Finance Act etc) to deduct and pay income tax, professional tax, service
tax etc. As an employer as well as the beneficiary of different services, banks are
required to adhere to the applicable tax provisions. Apart from the role of employer
and beneficiary of services, banks are expected to pay tax on the interest payable to
the customers as per the directives of authorities like TDS on interest payable on
fixed deposits, NRO deposits, etc. Apart from the above, income on investments
made by the bank and dealing in securities by banks , also attract provisions of TDS.
In view of the above banks should ensure that:

(i) Calculation of taxes and recovery of such taxes are correctly handled.
(ii) Further, banks are required to keep proper records of tax collection and
remittance.
(iii) In addition to the above, banks are required to report the details to the
authorities within a specific time frame. The reporting requirement would also
include quarterly reporting as well as submission of half yearly and/or annual
statements.
(iv) At the time of payment of salary to employees banks should deduct
applicable tax at source and arrange to issue the necessary certificates for TDS
on form 16 to employees. For other deductions like payment to contractors
etc., TDS on form 16A should be issued to the service providers. These TDS
(16 and 16A forms ) would serve (i) as evidence of tax deducted at source (ii)
as a record (iii) enable the employees and service providers/professionals to
claim refund of tax.

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5. RECOVERY OF DEBTS DUE TO BANKS AND FINANCIAL
INSTITUTIONS ACT, 1993 (DRT ACT)

Recovery of the dues of loans from the borrowers through courts was a major issue
for the banks and financial institutions due to huge back log of cases and the time
involved. The Act came into operation from 24th June 1993. Important highlights
of DRT Act 1993:

1. This Act constituted the special ‘Debt Recovery Tribunals’ for speedy recovery

2. This Act is applicable for the debt due to any bank or financial institution or a
consortium of them, for the recovery of debt above ` Ten lakhs

3. This Act is applicable to the whole of India except the State of Jammu & Kashmir
4. The term ’debt’ covers the following types of debts of the banks and financial
institutions

(a) Any liability inclusive of interest, whether secured or unsecured

(b) Any liability payable under a decree or order of any Civil Court or
any arbitration award or Otherwise or

(c) Any liability payable under a mortgage and subsisting on and legally
recoverable on the date of application.

6.LENDERS LIABILITY ACT In India,

the SARFAESI Act. was enacted in 2002. On the basis of the recommendations of
the working group on Lenders’ Liability Laws constituted by the Government of
India, Reserve Bank of India had finalized a set of codes of conduct called ‘the
Fair Practice Code for Lenders’ and advised banks to adopt the guidelines. All the
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banks have formulated their own set of Fair Practice Codes as per the guidelines
and implemented it from 1st November, 2003. Some of the important features of
Lenders Liability Act are: Banks and financial institutions should give
acknowledgment for receipt of all loan applications. The loan applications should
scrutinize the loan applications within a reasonable period of time. Loan
applications in respect of priority sector and advances up to ` 2 lakhs should be
comprehensive. Lenders should ensure that the credit proposal is properly
appraised after assessing the creditworthiness of the applicants. They should not
use margin and security stipulation as a substitute for the due diligence on
creditworthiness and other terms and conditions. The lender should inform to the
borrower the sanction of credit limit in writing along with the terms and conditions
thereof and keep the borrower’s acceptance of the credit limits and terms and
condition on record. Duly signed acceptance letter should form part of the
collateral security. In case of consortium advances, the participating lenders should
evolve procedures to complete appraisal of proposals in the time-bound manner to
the extent feasible and communicate their decision on financing or otherwise
within a reasonable time. Lenders should ensure timely disbursement of loans
sanctioned in conformity with the terms and conditions governing such sanction.
Post disbursement supervision by lenders, particularly in respect of loans up to `2
lakhs, should be constructive with a view to taking care of any ‘lenderrelated;
genuine difficulty that the borrower may face, Lenders should release all securities
on receiving payment of loan or realization of loan, subject to any legitimate right
of lien for any other claim lenders may have against the borrowers.

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7.BANKING OMBUDSMAN

Banking Ombudsman Service is a grievance redressal system. This service

is available for complaints against a bank’s deficiency of service. A bank’s
customer can submit complaint against the deficiency in the service of the bank’s
branch and bank as applicable, and if he does not receive a satisfactory response
from the bank, he can approach Banking Ombudsman for further action. Banking
Ombudsman is appointed by RBI under Banking Ombudsman Scheme, 2006. RBI
as per Sec 35 A of the Banking Regulation Act,1949 introduced the Banking
Ombudsman Scheme with effect from 1995.

8.THE CONSUMER PROTECTION ACT, 1986

To protect the interests of the consumers, the Consumer Protection Act was
enacted. The Act extends to the whole of India except the State of Jammu and
Kashmir. The Act covers all goods and services, except goods for resale or for
commercial purpose and services rendered free of charge and a contract of
personal service. Complaints (i.e., any allegation should be in writing made by a
complainant to obtain any relief provided by or under this Act) The complaint may
be made by the complainant which includes a consumer or any voluntary
consumer association registered under the Companies Act,1956 or any other law
or the Central or State Government or one or more consumers, having the same
interest and in case of death of a consumer his/ her legal heirs or representative.
The Act is for speedy disposal of the redressal of consumer disputes. Consumer
councils are established to promote and protect the rights of consumers. The
Central Council has the jurisdiction for the entire country, followed by the State
Council for each state and District Council for each district. The Councils at the

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State level is headed by the chairman of the council, i.e., the Minister-in-Charge of
the Consumer Affairs in the State Government. The consumers’ complaints are
dealt by District Forum, State and National Commission. District forum and State
Commission are established by the State Governments, and the National
Commission established by Central Government. District Forum has powers to
deal with cases up to 20 lakh. The State Commission deals with complaints
exceeding value of 20 lakh and below One crore and it appeals against the orders
of any District forum within the State. The cases exceeding ` One crore would be
handled by the Central Commission. They also deal with appeals against the order
of any State Commission. Complaints should be in a prescribed manner, with full
details, evidence and applicable fee. Supporting affidavit is required. Admissibility
of complaint is to be decided within twenty one days. Similarly, other procedures
and requirements as per the Act which are in force would be applicable.

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 CHAPTER 5

FINDINGS AND SUGGESTIONS

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FINDINGS

 Laws they using in bank:

1. Companies Act 1956
2. Limitation Act, 1963
3. Bankers’ Book Evidence Act, 1891
4. Tax laws
5. Recovery of Debts Due to Banks and Financial
Institutions Act, 1993 (DRT Act)
6. Lenders Liability Act
7. Banking Ombudsman
8. The Consumer Protection Act,1986

 The bank running smoothly with the laws.

 Law that are prevailing in the banking sector are not much understandable to
the common ordinary people

SUGGESTIONS:

 Now technology was changed so it needs to establish more law related to

online banking.
 Make all the law that related to banking are understandable to common
people.

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CONCLUSION:

The law is important because it serves as a norm of conduct for citizens and
residents. It acts as a guideline for acceptable behaviour, and ensures equality within
communities and social groups by an outline for the consequences of law violations.
Laws communicate what is accepted in each society.

The law also helps the three branches of the government to sustain equity. When
laws are broken, citizens are guaranteed the right to a fair trial with fair consequences
established. The justice system is designed to follow the laws and interpret them in
a manner that ensures the safety and rights of citizens. The conformity of laws serves
as general rules to live by within communities.

Laws offer protection to victims of crimes and punishment for those who violate the
laws. Laws also serve as a deterrent for criminals because consequences such as
fines and jail time exist.

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 BIBLIOGRAPHY

 https://www.icsi.edu/Docs/Webmodules/Banking_Law_Practice_Module3_
ProfProgr2016.pdf
 https://www.pnbindia.in/origin-of-PNB.html
 https://en.wikipedia.org/wiki/Banking_Regulation_Act,_1949
 http://fiuindia.gov.in/files/released_acts/banking_regulation_act.html

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