Punjab National Bank's Research

BANK RESEARCH
SUBMITTED FOR THE PARTIAL FULFILLMENT OF C-4
EVALUATION OF CREDIT MANAGEMENT (SUBJECT).
ABSTRACT
Details as on year end 2017 and 2016.
1. Capital of the bank
2. Loan portfolio details (means exposure to
different types of loans)
3.Different types of loans made available at the
bank with rate of interest if possible
4. Details of NPA, restructured loans, loans in
dispute
5. Story of any major scams if at all
Saurabh Garg
16BSP2271

1
INTRODUCTION:
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, and 10,681 ATMs across 764 cities.
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.
HISTORY:
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. 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. Lala Lajpat Rai was actively associated with the management of
the Bank in its early years. The board first met on 23 May 1894. 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.

2
Banking in India:
Banking in India, in the modern sense, originated in the last decades of the 18th
century. Among the first banks were the Bank of Hindustan, which was established in
1770 and liquidated in 1829–32; and the General Bank of India, established in 1786
but failed in 1791.
The largest bank, and the oldest still in existence, is the State Bank of India (S.B.I). It
originated as the Bank of Calcutta in June 1806. In 1809, it was renamed as the Bank
of Bengal. This was one of the three banks funded by a presidency government, the
other two were the Bank of Bombay in 1840 and the Bank of Madras in 1843. The
three banks were merged in 1921 to form the Imperial Bank of India, which upon
India's independence, became the State Bank of India in 1955. For many years, the
presidency banks had acted as quasi-central banks, as did their successors, until the
Reserve Bank of India was established in 1935, under the Reserve Bank of India Act,
1934.
In 1960, the State Banks of India was given control of eight state-associated banks
under the State Bank of India (Subsidiary Banks) Act, 1959. These are now called its
associate banks. In 1969, the Indian government nationalised 14 major private banks,
one of the big bank was Bank of India. In 1980, 6 more banks that are private were
nationalised. These nationalised banks are the majority of lenders in the Indian
economy. They dominate the banking sector because of their large size and
widespread networks.
The Indian banking sector is broadly classified into scheduled and non-scheduled
banks. The scheduled banks are those included under the 2nd Schedule of the
Reserve Bank of India Act, 1934. The scheduled banks are further classified into:
nationalised banks; State Bank of India and its associates; Regional Rural Banks
(RRBs); foreign banks; and other Indian private sector banks. The term commercial
banks refers to both scheduled and non-scheduled commercial banks regulated under
the Banking Regulation Act, 1949.

3
Short Comprehension:
1. Capital of the bank:
As shown in the above Schedule 1 – (Capital) of Punjab National
Bank, after analysing it for the year 2016 and 2017, I came to the
conclusion that the total capital of the bank for AY 2016-17, is Rs 425,59
crores as compared to that of AY 2015-16 , was Rs 392,71 crores. There
is increase in the capital of the bank of Rs 32,87 crores, which was due
to the following reasons:
a) Authorised Capital in AY 2015-16 and 2016-17 were the
same.
b) Issued & Subscribed Capital in AY 2016-17 has also
increased by Rs. 32.87 crores.
c) The Paid Up Capital of the bank as compared to AY 2015-16
and 2016-17, it had increased up by Rs. 32.87 crores.

4
2. Loan Portfolio Details:
As shown in the Schedule II (Sector Wise Advances), bank has divided it into
two Sectors- Priority Sector and Non Priority Sector.
a) Priority Sector:
a. As of AY 2015-16 and 2016-17 the Outstanding Total Advances had
decreased by Rs. 24,278.23 crores.
b. The Gross NPAs when compared between AY 2015-16 and 2016-
17, it had increased by Rs. 1,474.63 crores.
b) Non Priority Sector:
a. Outstanding Total Advances, as of AY 2015-16 and 2016-17, it had
increased by Rs. 33,254.55 crores.

5
b. The Gross NPAs when compared between AY 2015-16 and 2016-
17, it has decreased by Rs. 1,922.51 crores.
So, the net effect after compared in the two years, Outstanding Total Advances
increase by Rs. 8,976.33 crores and Gross NPAs decreased by Rs. 447.88 crores.

6
3. Different types of Loans available at the bank with rate of interest:
Interest Rate On Advances Linked To MCLR
Annexure I
Master Table (Other Than MSME)
Internal Risk
Rating/
PNB Score/PNB
Score SME
External Rating
AAA AA A BBB Unrated
BB &
Below
Unrated$
A1 >80
MCLR+
0.20
MCLR+0.25
MCLR+
0.65
MCLR+
1.25
MCLR+
1.50
MCLR+
2.15
MCLR+
2.15
A2 >70<=80 MCLR+0.20 MCLR+0.30
MCLR+
0.70
MCLR+
1.30
MCLR+
1.55
MCLR+
2.15
MCLR+
2.15
A3 >64<=70
MCLR+
0.55
MCLR+
0.65
MCLR+
1.05
MCLR+
1.65
MCLR+
1.90
MCLR+
2.50
MCLR+
2.50
A4 >58<=64
MCLR+
1.05
MCLR+
1.10
MCLR+
1.50
MCLR+
2.10
MCLR+
2.35
MCLR+
3.00
MCLR+
3.00
B1 >52<=58
MCLR+
1.60
MCLR+
1.65
MCLR+
2.05
MCLR+
2.65
MCLR+
2.90
MCLR+
3.50
MCLR+
3.50
B2 >46<=52
MCLR+
2.50
MCLR+
2.55
MCLR+
2.95
MCLR+
3.60
MCLR+
3.85
MCLR+
4.45
MCLR+
4.45
B3 >40<=46
MCLR+
4.30
MCLR+
4.35
MCLR+
4.75
MCLR+
5.00
MCLR+
5.00
MCLR+
5.00
MCLR+
5.00
C1 >35<=40
C2 >25<=35
C3 <=25
$All unrated claims on Corporates, AFCs, and NBFC-IFCs having aggregate exposure from banking
system of more than INR 100 Crores which were rated earlier and subsequently have become unrated
or having aggregate exposure from banking system of more than INR 200 Crores.

7
Following Interest Rate factors to be added in ROI for all Term Loan Accounts under B1, B2 & B3
(internally rated), over and above the spread prescribed under the above Master Table:
Rating Grade Additions In ROI For Term Loan Accounts
B1 0.05%
B2 0.10%
B3 0.50%
MSME Advances:
Particulars Rate Of Interest
Advances up to Rs. 50000/- MCLR
Advances above Rs. 50000/- & up to Rs 20 lacs MCLR+1.25%
Advances above Rs. 20 lacs As per MSME Master Table
Master Table (MSME)
Internal Risk Rating/PNB
Score/PNB Score SME
External Rating
AAA AA A BBB Unrated
BB &
Below
A1 >80
MCLR+
0.20
MCLR+
0.25
MCLR+
0.30
MCLR+
0.40
MCLR+
0.55
MCLR+
2.05
A2 >70<=80
MCLR+
0.20
MCLR+
0.30
MCLR+
0.35
MCLR+
0.45
MCLR+
0.60
MCLR+
2.10
A3 >64<=70
MCLR+
0.55
MCLR+
0.65
MCLR+
0.75
MCLR+
0.85
MCLR+
1.00
MCLR+
2.45
A4 >58<=64
MCLR+
1.10
MCLR+
1.15
MCLR+
1.20
MCLR+
1.30
MCLR+
1.45
MCLR+
3.00
B1 >52<=58
MCLR+
1.60
MCLR+
1.65
MCLR+
1.70
MCLR+
1.80
MCLR+
1.95
MCLR+
3.50
B2 >46<=52
MCLR+
2.50
MCLR+
2.60
MCLR+
2.95
MCLR+
3.55
MCLR+
3.80
MCLR+
4.40
B3 >40<=46
MCLR+
4.40
MCLR+
4.45
MCLR+
4.85
MCLR+
5.00
MCLR+
5.00
MCLR+
5.00
C1 >35<=40
C2 >25<=35

8
C3 <=25
Other Advances:
Advances up to Rs. 2.00 lacs MCLR+3.00%
Advances above Rs. 2.00 lacs {including CRE (RH), Future Lease
Rentals, & NBFCs (AFC)}
As per Master Table
Advances over 2.00 lacs to CRE (Others), NBFCs(Others), Capital
Market, Film Production/ Entertainment Industry
1.00% over and above rates
prescribed in the Master Table
Other Guidelines
Under the MCLR system, the interest rate applicable to an account shall remain fixed during the reset
period, which is applicable on all loans sanctioned & renewed w.e.f. 01.04.2016 and all Base Rate
linked loans desiring to shift to MCLR system. The reset period will be one year in all loans.
All working capital advances will link with one year MCLR and Term Loan on floating rate will linked
with MCLR of Respective Maturity except those loans which are specifically linked with particular MCLR.
In any case, interest rate on advances shall not be below the MCLR, wherever ROI is linked to MCLR.
Advances where valid External Risk Rating is not available or external rating expired be treated as
unrated category.
Scheme specific rate of interest
Advance Against Bank`S Own Deposits:
Rupee Loans & Advances against Term Deposits standing in the name of
Borrowers (singly/jointly or as a guardian in case of Individual Borrowers), including
NRE deposits
1% above the rate allowed
on deposit
Advances to Borrowers against third party term deposits including NRE deposits
standing in the name of individuals or entities other than individuals e.g.
Partnership Concerns, Societies, Trusts, Public/ Private Ltd Cos etc.
2% above the rate allowed
on deposit subject to
minimum of MCLR.
Rupee Loans & Advances against FCNR(B) Deposits standing in the name of the
borrower (singly/jointly or as a guardian), Advances against term deposits held by
the bank for less than minimum stipulated period of FDR (on cancellation) and for
advances against balance lying in current/ savings a/c)
MCLR
Advances against third party FCNR(B) deposits MCLR+0.75%
Advance Against:

9
Life Insurance Policies including Postal Life Insurance (LIP) MCLR + 1.00%
Postal securities (NSC/KVP/IVP)/ RBI Relief Bonds
I. Demand Loan MCLR + 3.00%
II. Overdraft MCLR + 3.50%
Other Govt. Securities, Bonds, Units of Mutual Fund, FDRs of PNB Subsidiaries, etc. MCLR + 3.50%
Postal Term Deposits MCLR + 3.00%
Schemes For Financing Against Pledge/E-Pledge Of Warehouse Receipts Issued By Approved
Collateral Managers Including Under Tie Up With N-SPOT:
Loans up to Rs. 50 lakh to
Individual farmers [including Self Help Groups (SHGs) or Joint Liability Groups (JLGs) i.e.
groups of individual farmers, provided banks maintain disaggregated data on such loans]
engaged in Agriculture & allied activities,
Corporates, Partnership firms and institutions engaged in Agriculture and Allied activities.
MCLR+1%
Loans to Micro, Small & Medium Enterprises including food and agro processing units
under MSME
MCLR+1%
Others:
As applicable for
other advances
Discounting Of Bills:
Tenor Of The Bills Backed By Confirmed ILCs Of
Approved Banks
Rate Of Interest
Upto 90 days MCLR + 0.15%
91 to 180 days MCLR + 0.25%
181 days – upto less than 1 year MCLR + 0.50%
Bills not backed by ILCs
Interest Rates as applicable to Working Capital
Limits.

10
Intermediary Agencies:
Loans sanctioned upto 31.01.2000
Finance granted to Intermediary Agencies (excluding those for Housing) for on lending to
Ultimate Beneficiaries and Agencies providing input support
MCLR + 3.00
Finance granted to Housing Finance Intermediary Agencies for on lending to Ultimate
Beneficiaries
MCLR + 3.00
Term Loans sanctioned w.e.f. 01.02.2000 and Working Capital Advance to Intermediary
Agencies (including Housing Finance Agencies)
Minimum MCLR
+ 3.00
Rupee Export Credit:
Particulars
Rate Of
Interest
Pre-Shipment Credit
Upto 270 days
Against incentives receivable from Govt. covered by ECGC Guarantee (upto 90 days)
Post-Shipment Credit
Demand bills for transit period (as specified by FEDAI)
Usance bills (For total period comprising usance period of export bills, transit period as specified by
FEDAI and grace period, wherever applicable).Upto 180 days
Overdue bills upto 180 days from the date of advance
Against incentives receivable from Govt. covered by ECGC Guarantee (upto 90 days)
Against undrawn balance (upto 90 days)
Against retention money (for supplies portion only) payable within one year from the date of
shipment (upto 90 days)
Deferred Credit
Deferred credit for the period beyond 180 days.
Export Credit Not Otherwise Specified (ECNOS):
Pre-shipment Credit
Post-shipment Credit

11
Annexure II
Interest Rate on Advances - Retail Segment Loan
S
No.
Loan
Products
Schemes
Rate Of Interest (Based On
MCLR Of 1 Year)
Limit Up to
Rs. 75 Lac
Limit above
Rs. 75 Lac
Floating Women* MCLR+0.20% MCLR+0.25%
Floating Others MCLR+0.25% MCLR+0.30%
Floating PNB PRIDE #(Housing) MCLR+0.20% MCLR+0.25%
Floating OD HL MCLR + 1.40%
Fixed General FLOATING +0.50%
Fixed PNB Pride# Floating (PNB PRIDE #) +0.50%
For purchase of stand alone solar system MCLR+2.10%
# PNB PRIDE is for Cenral/State Government Employee/Defence Personnel & Para Military
Forces
*Women should be the sole applicant or one of the co-applicant for the Home Loan and also
the sole owner or one of the co-owners of the property proposed to be financed by the bank.
Floating
Women, PNB PRIDE &
Corporates (Under
floating rate)
Irrespective of CICs
score
MCLR + 0.60%
CIC Score 750 & above MCLR + 0.60%
CIC Score 700 and up to
749
MCLR + 0.80%
CIC Score less than 700 MCLR + 1.05%
Fixed
Fixed for all MCLR+0.95%
PNB Pride (Fixed Option) MCLR+0.95%
< 3 years MCLR+3.25%

12
Two
wheeler
Salary being disbursed
through PNB and /or
under check-off facility.
>= 3 years MCLR+3.75%
< 3years MCLR+4.25%
>= 3 years MCLR+4.75%
Power Ride MCLR+1.75%
Loan up to Rs. 1.50 lac MCLR+1.50%
Education Loan to children
of PNB`s Employees where
employee is either co-
borrower or guarantor
(Under CGFSSD-Optional)
MCLR+0.50%
Others MCLR+0.10%
Loan up to 7.50 lac MCLR+2.00%
Loan Above Rs, 7.50 lac MCLR+2.60%
Loans irrespective of
amount (where 100%
tangible collateral security
in the shape of
IP,enforceable under
SARFAESI Act,and/or liquid
security security is
available)
MCLR+1.85%
Loan for pursuing education
from premier foreign
universities and educational
institutes (200) under PNB
Udaan Loan up to 7.50 lac
Covered under CGFSEL
MCLR+1.85%
Others MCLR+1.85%
Education Loan to children of PNB`s Employee is either
co-borrower or guarantor.
MCLR+0.10%

13
PNB Pratibha admission
to other than IITs, IIMs
and XLRI Jamshedpur
Loan above Rs. 7.50 lac MCLR+0.10
Loan above Rs. 7.50 lac MCLR
PNB Honhaar Loan up to Rs. 10.00 lac MCLR+2.00%
PNB Bihar Student
Credit Card Scheme
Loan up to Rs.4.00 lac MCLR+2.00%
Women 3.50%
Others 4.00%
No further concession in interest shall be available to any
category of borrowers for regular servicing of interest during
moratorium period.
Loans upto Rs.10 lac -For individuals whose salary is
being disbursed through our branches only (Including
Defence Personnel).
MCLR + 3.55%
*Loans above Rs.5 lacs & upto Rs.10 lac* -For other
categories i.e., applicants not having salary account
with our bank irrespective of check off facility.(*Field
functionaries are not empowered to sanction these
cases.)
MCLR + 4.55%
Loans upto Rs.5 lac -For individuals who are availing
the loan under check off facility (Including Defence
Personnel)
MCLR + 5.55%
For others upto Rs.5 lac MCLR + 6.55%
6
Pension
loan
Personal Loan to Pensioners (Pension Loan) MCLR + 2.80%
For agriculture MCLR+1.60%
Others MCLR+2.60%
Non-Productive Purpose Public/Staff MCLR+2.60%
8
Reverse
mortgage
For all(Fixed with reset
clause of five years)
MCLR+2.60%

14
9
Earnest
Money
Deposit
For all MCLR+0.10%
Advance Against Mortgage Of Immovable Property (IP)
S No. Risk Rating/ PNB Score Repayment Period < 3 Y Repayment Period =3 Yr
A1 / >80 MCLR +1.75 MCLR +2.25
A2 / > 70 = 80 MCLR +2.00 MCLR +2.50
A3 / > 64 = 70 MCLR +2.25 MCLR +2.75
A4 / > 58 = 64 MCLR +2.50 MCLR +3.00
B1 / > 52 = 58 MCLR +2.75 MCLR +3.25
B2 / > 46 = 52 MCLR +3.00 MCLR +3.50
B3 / > 40 = 46 MCLR +3.50 MCLR +4.00
C1 / > 35 = 40 MCLR +4.00 MCLR +4.50
C2 / > 25 = 35 MCLR +4.50 MCLR +5.00
C3 / = 25 MCLR +5.50 MCLR +6.00

15
Annexure III
Interest Rate on Advances – Agriculture Advances
Crop Loans/ KCC
S.
N.
Particulars
Rate Of Interest
Sanctioned Limit upto Rs. 20 lakh Sanctioned Limit > Rs. 20 lakh
(1)
Regular Crop
Loans/ KCC
7% upto outstanding of Rs. 3.00 lakh and
MCLR (1 year) + 1.05% over Rs. 3.00
lakh
7% upto outstanding of Rs. 3.00 lakh and
MCLR (1 year) + 1.85% over Rs. 3.00 lakh
(2)
Irregular Crop
Loans/ KCC
MCLR (1 year) + 1.05% MCLR (1 year) + 1.85%
NRLM (National Livelihood Mission)
S.
N.
Particulars
Rate Of Interest
Sanctioned Limit upto Rs. 20 lakh Sanctioned Limit > Rs. 20 lakh
1 NRLM loans to women in 150 identified districts
a
Loans repayable in
upto 1 year
7% upto outstanding of Rs. 3.00 lakh
and MCLR (1 year) + 2.10% over Rs.
3.00 lakh
3.00 lakh
b
Loans repayable in > 1
year and upto 3 years
3.00 lakh
3.00 lakh
c
years
3.00 lakh
7%
Upto outstanding of Rs. 3.00 lakh and
MCLR (5 year) + 1.85% over Rs. 3.00
lakh
2 NRLM loans to non-women in 150 identified districts and other than 150 districts
a
Loans repayable in
upto 1 year
b
year and upto 3 years
c
years

16
SRLM (State Rural Livelihood Mission)
S. N. Particulars Rate Of Interest
1 Sanctioned Limit upto Rs. 20 lakh
(a) Loans repayable in upto 1 year MCLR (1 year) + 2.10%
(b) Loans repayable in > 1 year and upto 3 years MCLR (3 year) + 2.00%
(c) Loans repayable in > 3 years MCLR (5 year) + 2.40%
2 Sanctioned Limit > Rs. 20 lakh As per Master Table at Annexure-I
Other Agriculture Loans
S. N. Particulars Rate Of Interest
1 Sanctioned Limit upto Rs. 20 lakh
a Loans repayable in upto 1 year MCLR (1 year) + 1.05%
b Loans repayable in > 1 year and upto 3 years MCLR (1 year) + 1.05%
c Loans repayable in > 3 years MCLR (1 year) + 1.05%
2 Sanctioned Limit above Rs. 20 lakh As per Master Table at Annexure-I

17
4. Details of NPA, Restructured Loans, Loans in dispute:
The Bank’s Gross NPA stood at Rs. 55,370 crore in FY 2016-17 (FY 2015-16
Rs. 55,818 crore) and the Net NPA stood at Rs. 32,702 crore in FY 2016-17
(FY 2015-16 Rs 35,423 crore). In terms of ratios, Gross NPA ratio stood at
12.53% in FY 2016-17 (FY 2015-16: 12.90%) and Net NPA ratio stood at 7.81%
in FY 2016-17 (FY 2015-16: 8.61%).
Gross NPA as well as Net NPA percentage has come down. PCR has also
improved from 51.06% in FY 2015-16 to 58.57% in FY 2016-17. In absolute
terms both Gross NPA and Net NPA as on 31.03.2017 reduced as compared
to 31.03.2016.
Initiatives taken during FY 2016-17:
a) Intensification of War Room Efforts.
b) JFL Mechanism Strengthened – Flexible Approach.
c) Recovery through Gandhi-giri.
d) Accelerated Pace of Reduction.
e) Focus on e-auctions of collaterals.

18
5. Story of major scam:
CBI registers RS. 80 crore bank fraud case against PNB officials:
The CBI has registered 22 cases against officials of Punjab National Bank relating to
fraud in bank loans processed by them on the basis of forged documents causing a
loss of over Rs 80 crore to the bank, the agency said today.
The cases relate to four branches of the bank in Bhopal and Ujjain in Madhya Pradesh.
"Searches were conducted at the office and residential premises of the accused at 47
places in Bhopal, Ujjain, Indore and Vidisha (Madhya Pradesh), Kaithal and Gurugram
(Haryana), Hoshiarpur (Punjab), Noida and Agra (Uttar Pradesh), Mumbai and Delhi,"
a Central Bureau of Investigation statement said.
It said the bank alleged in its complaint that the officials had fraudulently sanctioned
and disbursed loans to private persons dealing in coal business from 2011 to 2016.
"It was alleged that the loans were sanctioned against inflated valuation of the collateral
securities. The said borrowers thereafter disposed of the primary security without
depositing the proceeds with the bank, thereby causing alleged loss of Rs 80 crore,"
the statement said.
The searches led to the recovery of "incriminating" documents, stamps, hard discs and
details of bank lockers, it said.

Punjab National Bank's Research

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Similar to Punjab National Bank's Research

Similar to Punjab National Bank's Research (20)

Recently uploaded

Recently uploaded (20)

Punjab National Bank's Research