Description
reviews the bank, its operations, its future and give recommendations for growth. It also gives the SWOT analysis of punjab national bank.
Strategic Analysis of Punjab National Bank
1
Table of Contents:
About PNB …………………………………………………………………………………………………………………………………………….. 3 Products and Services ……………………………………………………………………………………………………………………………. 4 Business Objective …..……………………………………………………………………………………………………………………………. 5 SWOT of PNB ………………………………………………………………………………………………………………………………..………. 5 Strengths ………………………………………………………………………………………………………………………...………. 5 Weaknesses ………………………………………………………………………………………………………………….…………. 5 Opportunities ……………………………………………………………………………………………………………….…………. 6 Threats ………………………………………………………………………………………………………………………….………... 6 Recommendations ………………………………………………………………………………………….…………………………………..…7
2
About PNB Punjab National Bank Ltd was the result of the efforts of far-sighted visionaries and patriots, among whom were persons like Lala Lajpat Rai, Mr. E C Jessawala, Babu Kali Prasono Roy, Lala Harkishan Lal and Sardar Dyal Singh Majithia. Incorporated under the Act VI of 1882, Indian Companies Act, the Bank commenced operations on April 12, 1895 from Lahore, with an authorised total capital of Rs 2 lac and working capital of Rs 20,000. Prophetically, the Bank chose "Stability" as its telegraphic address, as the future course of events were to prove - the Bank withstood various financial crises including the trauma in the form of partition of India when the Bank had to close 92 offices (33%) in west Pakistan which constituted 40% of its deposits and 15 of its staff fell victims to the frenzy. The registered office was shifted to Delhi and the Bank honoured all the deposit claims of the refugees even on the basis of whatever little evidence they could produce. Subsequently, the Bank registered impressive performance and grew from strength to strength. A pioneer throughout, the Bank distinguished itself by appointing auditors in 1895 long before it was mandatory; introduced the "teller" system in 1944 (another first ); established profit sharing bonus, provident fund and voluntary outside audit well before they formed keystones of good management. After nationalisation came in 1969 the Bank, keeping with the economic ideology of catalyzing development and amelioration of poverty by funding various self-employment schemes, PNB expanded its presence rapidly in unbanked areas. With its large presence throughout the country and with a view to strengthening the rural credit delivery system, the Bank sponsored Regional Rural Banks (RRBs). The bank's growth has been aided by take-over/merger of 7 private sector banks during different periods in its history. The first ever and the only merger of a nationalized bank with PNB was in 1993, viz., New Bank of India. By late 1980s when the first whiff of liberalization came about, the Bank initiated strategic moves towards diversification; and in 2002, 20% of government ownership was disinvested through a very successful IPO to the public. In 2003, the erstwhile Nedungadi Bank Ltd (e-NBL), a Kerala based private bank was amalgamated with Punjab National Bank. This was the seventh merger in PNB’s history of more than 115 years. In order to meet future capital requirements on account of implementation of Basel II norms, in March 2005, the Bank came out with Follow-on Public Offer (FPO) through the book building process, reducing the shareholding of Govt of India to 57.8%. Punjab National Bank with 4997 domestic offices including 46 Extension Counters has the largest network amongst the nationalized banks i.e. next only to SBI.
3
Products And Services
Personal Banking ? Saving Fund Account - PNB Prudent Sweep - Total Freedom Salary Account - PNB Vidyarthi SF Account - PNB Mitra SF Account Current Accounts FD Schemes Loans – Housing, Personal, Educational, Property etc Cards Nomination Services
? ? ? ? ?
Social Banking ? ? ? Agriculture Credit Krishi Card Schemes for Women
Corporate Banking ? ? ? ? ? Loan against future lease rentals Exim Finance Cash Management Traders Finance Schemes for SSI Sector
4
Business Objective
Vision: “To be a Leading Global Bank with Pan India footprints and become a household brand in the IndoGangetic Plains providing entire range of financial products and services under one roof" Mission: "Banking for the unbanked"
SWOT OF PNB
Strengths: ? ? ? ? PNB has a wide network of branches and ATMs allowing it to cater to large no. of customers Large customer base The PNB brand is well established and very well recognized PNB has adapted to technological changes in the banking sector and can leverage it to cut costs as well as improve its services ? PNB has all the products under its belt, which help it to extend the relationship with existing customer. PNB has umbrella of products to offer their customers, if once customer has relationship with the bank Weaknesses: ? ? ? ? ? Casual behavior of bank employees towards customers Very high levels of gross NPA Corruption and red tapism prevalent right through the organization typical of a PSU setup Slow decision making due to large hierarchy PNB has a defensive approach in lending. Because of this policy companies prefer other banks and PNB in turn sometimes loose potential customers. ? PNB is having little presence Outside India, because of which companies prefer MNC Banks. So if PNB tries to emerge outside India then it has a huge potential of customers. ? With its increasing customer base, PNB is not however, increasing the number of employees accordingly. This is leading to deterioration of the standard of customer service.
5
Opportunities: ? Fast growing Indian economy presents tremendous credit growth opportunity for the bank ? Indian Banking sector is witnessing high growth thus PNB should also grow ? Dissatisfied Customers of Other Banks: There are many companies which are not satisfied with its current bank, so PNB with its superior service quality can capture those customers ? The Banking sector stands to gain from liberalization which will help PNB spread its wings ? PNB can tap the huge potential in Micro Financing by leveraging the penetration of its operations in rural and semi urban India Threats ? Advent of MNC banks: Large numbers of MNC banks are mushrooming in the Indian market due to the friendly policies adopted by the government. This can increase the level of competition and prove a potential threat for the market share of PNB. ? Dissatisfied Customers: Poor customer support/ service is creating a lot of dissatisfaction among the customers, this can prove to be a serious problem as far as the market reputation of the bank is concerned and cane be a major threat in future business acquisition ? Increasing competition from other nationalized banks because of their ever improving service standards
6
Recommendations
? A Major revamp of its Customer care - A complete over hauling of its customer care department is required so as to reduce complaints of customer in turn which may affect its working. Penetration into Rural Market with E – Commerce Facility - Though it is one of the strategies of PNB to enter deeply into rural sector, but this step has to be taken up seriously and as soon as possible so as to tap the market the rural market easily and these services should be well equipped with E – Commerce features mainly like Tele – banking and ATM’s etc. Concentrate on Building Brand Image- PNB is very well known institution for investing purposes and as well as for its social practices , PNB should further look to enhance this image and shed the image of being a lethargic PSU entity
?
?
?
Reduce Non Performing Assets- It has become a necessity for PNB to reduce its NPA’s
?
Developing strong cultural values
- Social Integrity - Bonding with customers - Responsiveness Fast & Decentralized decision making Awards and Incentives based pay structure Globalization
? ? ?
7
doc_384928857.pdf
reviews the bank, its operations, its future and give recommendations for growth. It also gives the SWOT analysis of punjab national bank.
Strategic Analysis of Punjab National Bank
1
Table of Contents:
About PNB …………………………………………………………………………………………………………………………………………….. 3 Products and Services ……………………………………………………………………………………………………………………………. 4 Business Objective …..……………………………………………………………………………………………………………………………. 5 SWOT of PNB ………………………………………………………………………………………………………………………………..………. 5 Strengths ………………………………………………………………………………………………………………………...………. 5 Weaknesses ………………………………………………………………………………………………………………….…………. 5 Opportunities ……………………………………………………………………………………………………………….…………. 6 Threats ………………………………………………………………………………………………………………………….………... 6 Recommendations ………………………………………………………………………………………….…………………………………..…7
2
About PNB Punjab National Bank Ltd was the result of the efforts of far-sighted visionaries and patriots, among whom were persons like Lala Lajpat Rai, Mr. E C Jessawala, Babu Kali Prasono Roy, Lala Harkishan Lal and Sardar Dyal Singh Majithia. Incorporated under the Act VI of 1882, Indian Companies Act, the Bank commenced operations on April 12, 1895 from Lahore, with an authorised total capital of Rs 2 lac and working capital of Rs 20,000. Prophetically, the Bank chose "Stability" as its telegraphic address, as the future course of events were to prove - the Bank withstood various financial crises including the trauma in the form of partition of India when the Bank had to close 92 offices (33%) in west Pakistan which constituted 40% of its deposits and 15 of its staff fell victims to the frenzy. The registered office was shifted to Delhi and the Bank honoured all the deposit claims of the refugees even on the basis of whatever little evidence they could produce. Subsequently, the Bank registered impressive performance and grew from strength to strength. A pioneer throughout, the Bank distinguished itself by appointing auditors in 1895 long before it was mandatory; introduced the "teller" system in 1944 (another first ); established profit sharing bonus, provident fund and voluntary outside audit well before they formed keystones of good management. After nationalisation came in 1969 the Bank, keeping with the economic ideology of catalyzing development and amelioration of poverty by funding various self-employment schemes, PNB expanded its presence rapidly in unbanked areas. With its large presence throughout the country and with a view to strengthening the rural credit delivery system, the Bank sponsored Regional Rural Banks (RRBs). The bank's growth has been aided by take-over/merger of 7 private sector banks during different periods in its history. The first ever and the only merger of a nationalized bank with PNB was in 1993, viz., New Bank of India. By late 1980s when the first whiff of liberalization came about, the Bank initiated strategic moves towards diversification; and in 2002, 20% of government ownership was disinvested through a very successful IPO to the public. In 2003, the erstwhile Nedungadi Bank Ltd (e-NBL), a Kerala based private bank was amalgamated with Punjab National Bank. This was the seventh merger in PNB’s history of more than 115 years. In order to meet future capital requirements on account of implementation of Basel II norms, in March 2005, the Bank came out with Follow-on Public Offer (FPO) through the book building process, reducing the shareholding of Govt of India to 57.8%. Punjab National Bank with 4997 domestic offices including 46 Extension Counters has the largest network amongst the nationalized banks i.e. next only to SBI.
3
Products And Services
Personal Banking ? Saving Fund Account - PNB Prudent Sweep - Total Freedom Salary Account - PNB Vidyarthi SF Account - PNB Mitra SF Account Current Accounts FD Schemes Loans – Housing, Personal, Educational, Property etc Cards Nomination Services
? ? ? ? ?
Social Banking ? ? ? Agriculture Credit Krishi Card Schemes for Women
Corporate Banking ? ? ? ? ? Loan against future lease rentals Exim Finance Cash Management Traders Finance Schemes for SSI Sector
4
Business Objective
Vision: “To be a Leading Global Bank with Pan India footprints and become a household brand in the IndoGangetic Plains providing entire range of financial products and services under one roof" Mission: "Banking for the unbanked"
SWOT OF PNB
Strengths: ? ? ? ? PNB has a wide network of branches and ATMs allowing it to cater to large no. of customers Large customer base The PNB brand is well established and very well recognized PNB has adapted to technological changes in the banking sector and can leverage it to cut costs as well as improve its services ? PNB has all the products under its belt, which help it to extend the relationship with existing customer. PNB has umbrella of products to offer their customers, if once customer has relationship with the bank Weaknesses: ? ? ? ? ? Casual behavior of bank employees towards customers Very high levels of gross NPA Corruption and red tapism prevalent right through the organization typical of a PSU setup Slow decision making due to large hierarchy PNB has a defensive approach in lending. Because of this policy companies prefer other banks and PNB in turn sometimes loose potential customers. ? PNB is having little presence Outside India, because of which companies prefer MNC Banks. So if PNB tries to emerge outside India then it has a huge potential of customers. ? With its increasing customer base, PNB is not however, increasing the number of employees accordingly. This is leading to deterioration of the standard of customer service.
5
Opportunities: ? Fast growing Indian economy presents tremendous credit growth opportunity for the bank ? Indian Banking sector is witnessing high growth thus PNB should also grow ? Dissatisfied Customers of Other Banks: There are many companies which are not satisfied with its current bank, so PNB with its superior service quality can capture those customers ? The Banking sector stands to gain from liberalization which will help PNB spread its wings ? PNB can tap the huge potential in Micro Financing by leveraging the penetration of its operations in rural and semi urban India Threats ? Advent of MNC banks: Large numbers of MNC banks are mushrooming in the Indian market due to the friendly policies adopted by the government. This can increase the level of competition and prove a potential threat for the market share of PNB. ? Dissatisfied Customers: Poor customer support/ service is creating a lot of dissatisfaction among the customers, this can prove to be a serious problem as far as the market reputation of the bank is concerned and cane be a major threat in future business acquisition ? Increasing competition from other nationalized banks because of their ever improving service standards
6
Recommendations
? A Major revamp of its Customer care - A complete over hauling of its customer care department is required so as to reduce complaints of customer in turn which may affect its working. Penetration into Rural Market with E – Commerce Facility - Though it is one of the strategies of PNB to enter deeply into rural sector, but this step has to be taken up seriously and as soon as possible so as to tap the market the rural market easily and these services should be well equipped with E – Commerce features mainly like Tele – banking and ATM’s etc. Concentrate on Building Brand Image- PNB is very well known institution for investing purposes and as well as for its social practices , PNB should further look to enhance this image and shed the image of being a lethargic PSU entity
?
?
?
Reduce Non Performing Assets- It has become a necessity for PNB to reduce its NPA’s
?
Developing strong cultural values
- Social Integrity - Bonding with customers - Responsiveness Fast & Decentralized decision making Awards and Incentives based pay structure Globalization
? ? ?
7
doc_384928857.pdf