INTRODUCTION

Personal loan

A Personal loan is credit that individuals can apply for and get from a bank or finance company
to customers for any purpose such as wedding expenses, purchasing jewelry or gold, and
vacations. Similar tocredit card, these loans will usually have predetermined interest rates.
Through this section of introduction to personal loans we will go through all information you
will need if thinking about taking out a personal loan.

When taking personal loans in India, the customers dont need to provide reason to the finance
company or lender about the use of the money. It is an unsecured loan, where the loans and
lending companies can provide the bank loan without any security or collateral. By applying and
getting a personal loan, borrowers can buy any asset for their home or use, plan a vacation or use
it for home improvement project. BankandFinance.com is one of several websites which can
offer information on various lenders, interest rates being offered by them along with terms and
conditions so that borrowers can make informed decisions. Borrowers can also use the financing
calculator to figure out their monthly installments or EMI.

Personal loan is a simple hassle free process of acquiring personal finance with minimal
documentation and within quick time. The bank will require the borrowers documents regarding
the proof of identity, residence along with income proof / ITR of last 2 years to initiate the
process for loan sanction. After verifying the documents and checking the borrowers credit
score with Credit Information Bureau (India) Limited commonly known as CIBIL, the bank may
decide whether to approve or reject the personal loan. Normally bankers will consider whose
CIBIL score is equal or more than 700.

India is a fastest growing economics in the world after a decade of financial and banking sector
reforms in 1991. Evidence from across the world suggests that a sound and evolved banking
system is required to sustain economic development. India has a better banking system in
comparison to other developing countries. Banking revolution and growth has gone through
innumerable twists and turns in the in the post independence era. Today banking plays an
important role in the growth and development of Indian economy. The process of globalization
and liberalization has strongly influence the Indian banking sector .emergence of new private
sector banks and opening up of branches of foreign banks in India after banking sector reforms
have changed the whole scenario of the banking sector in recent year .bank function are more
customer oriented now and innovate to provide new facilities that are more customer friendly.
India n banks have undergone a paradigm shift in their objective. Maximization of their profit
has become secondly to developing long term relationship with their customer in order to
achieve higher market penetration and also to survive and growth in todays cut through
completion.

Today ,India n banks are trying to innovate new and better product and services and provide new
ideas and techniques as well as make tailor made products available to the customers. Retail
banking and personal banking whos professed
Aim is banking at your doorsteps helps to give new and better innovative products and
services to the customers and thus helps the bank to improve their financial positions. Retail
banking is not a new concept for the banking industry. It becomes popular in the western

countries newt two decades back. Retail banking is also growing in the Indian commercial
banking sector in recent years.

Retail banking refers to the dealings of a bank with individual customers both on the liabilities
side and on the assets side of the balance sheet. On the liabilities side-fixed, current and savings
accounts of individuals and, on the assets side, various loans such as personal loan, housing loan,
car loan, consumption loan, education loan, marriage loan etc. are the important retail products
offered by the bank. Retail banking also provides various ancillary services such as credit cards,
mobile banking, internet banking, insurance, depository services etc.

Retail banking segment in the banking industry is continuously undergoing innovations, product
reengineering, adjustment, and alignments. Given the size, advantages, diverse customer base
and scope for future expansion, there is a need for evolving a systematic approach to Retail
banking. Most of the Indian banks are retail banks in their business composition. The term
RETAIL BANKING encompasses various financial products like different types of deposit
accounts, housing -consumer-auto and other types of loan accounts, demit facilities, insurance,
mutual funds, credit and debit cards, ATM and other technology-based services, stock broking,
payment of utility bills, reservation of railway tickets etc., and thus catering to diverse banking
needs of an individual.

Usually, the commercial banks to offer retail banking facilities. Their products and services
under retail banking are geared primarily towards individual customers. These include a wide
range of personal banking services like offering savings and checking accounts, bill paying
services, as well as debit and credit cards facility. Consumers may also obtain mortgages and
personal loans under retail banking. Although retail banking is mass market driven, many retail
banking products may also be extended to small and medium sized businesses. Todays retail
banking sector is characterized by three basic features; via:
1) Multiple products-deposits, credit cards, insurance, investment and securities.
2) Multiple channels of distribution-call centre, branch internet.

3) Multiple customer groups- consumer, small business and corporate.

Today, Retail banking is streamlined electronically via Automated Teller Machines (ATMs), or
through virtual retail banking known as online banking. Across the globe, retail lending has been
a spectacular innovation in the commercial banking sector in recent years. The growth of Retail
lending, especially in emerging economies, is attributable to the rapid advances in information
technology, the evolving macroeconomic environment, financial market reforms, and several
micro-level demand and supply side factors.
India too experiences a surge in retailing banking. Retail loan estimate to have accounted for
nearly one-fifth of all bank credit. Housing sector is experiencing a boom in its credit. The retail
loan market has decisively got transformed from a sellers market to a buyers market. For the
last few years Retail banking has become synonymous with mainstream banking for many banks.
Indian retail banking segment offers products like housing loans, consumption loan for purchase
of durables, auto loans, credit cards and educational loans. As the Report on Trends and Progress
of India, 2003-04 has shown that the loan values of their retail lending range between Rs 20000
to Rs 100 lakes. These loans are generally for duration of five to seven years and housing loans
granted for a longer duration of 15 years. The Indian banks are having cut throat competition
with one another to grab a pie of the retail banking sector, which has tremendous potential as
retail loans constitute only 8-9% of GDP in India, whereas the percentage is about 35% in other
Asian economies. Maintaining good customer relations has become a major challenge for retail
banks in the new era, though Retail banking customers are generally loyal. With increasing
publicity on the services offered by competing banks, it has become tempting for the customers
to check the services in other banks.
Excess of liquidity, increased dependence of corporate on capital markets, the rising income of
middle class with increase in purchasing power and ability to handle debts, the increasing
amount of NPAs from corporate portfolio and the future growth potentials of the credit card
business has induced banks to shift from wholesale banking to Retail Banking.
Retail Banking has immense opportunities in a growing economy like India. As the growth story
gets unfolded in India, Retail Banking is going to emerge a major driver of economic growth.
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Some of the key policy issues relevant to the retail banking sector are: financial inclusion,
responsible lending, and access to finance, long term savings, financial capability, consumer
protection, regulation and financial crime prevention.
The credit portfolio of banking business is fast changing in India. Retail lending is becoming an
important segment of bank credit. Large credit exposures are linked to banks capital. Limits
have to be fixed for single exposure in relation to the

Capital funds. A paradigm shift from corporate lending and disintegration are the reasons
responsible for resurgence. Banks are facing fierce competition not onlyAmongst themselves but
also from aggressive NBFCs. As a result, interest rates on retail lending too have come down.
Risk management for banks as far as retail banking goes should focus on risk and return
characteristics of consumer loans, revenues from consumer loans, losses from consumer loans,
collection strategies, and product structuring and lending policies.

Customer experience
Delivering better customer experience has become a key priority for most European retail banks
in recent years. As we examined in last years EY and Efra paper, there are direct links between
customer experience and loyalty, advocacy and revenues. IT follows that it is vital for banks to
be able to measure the quality of the customer experience they provide, accurately and reliably.
For established banks, the importance of customer experience measurement is only increasing
with the entry of Fin Techs and other newcomers to the banking market.
These extremely dynamic players have strengths in technology, branding and emotional
engagement that incumbent banks may struggle to compete with. The development of
multichannel capabilities is a common feature of many banks responses to these strategic
challenges. But this approach carries a risk of excessive cost buildup, given that many customers
do not need their bank to provide every service through every channel.

There is also a strategic risk that banks that put an excessive focus on accessibility are choosing
to compete on Fin Techs own terms. Banks that are found wanting run the risk of finding
themselves increasingly disinter mediated from their customers, and reduced to the role of
product suppliers. In our view, banks need to play to their strengths by giving their customers
tailored, professional financial guidance. That means improving customer experience by
leveraging banks core capabilities in areas such as product expertise, human capital and
customer insight. This brings us back to banks need for dynamic, precise and cost-effective
customer experience management.
That is why EY has used its expertise to develop a new approach to customer experience
management, specifically designed for todays world of digitization and big data. Fine-tuned
through collaboration with IntesaSanpaolo of Italy, we call this new methodology the Intelligent
Customer Experience (ICE). In the rest of this paper we introduce the concepts behind the ICE;
examine the methodology in three detailed sections; and conclude by considering the scalability
of the approach across the whole banking industry.

Meaning

Personal Loan is a type of unsecured loan that is given to a consumer to cater to any of their
personal needs like buying a vehicle, home appliances, marriage or for renovation etc. It is given
after verifying your ability to pay, particularly the source of income and also as per your credit
history.
Some processing fee is charged and the amount according to your paying ability gets credited to
your account. The payment of the loan is made through fixed installments including interest for a
fixed period of time. Personal loans come handy these days. You do not have to go through
tedious paper work and loads of formalities. Majority of banks and financial institutions provide
personal loans. The interest rates are also quite reasonable and people often take a personal loan
for purchasing purpose.
There are various resources available in India to get the best bank loan. Borrowers can get instant
interest rates from HDFC personal loans, AXIS, ICICI, SBI and many other public and private
lenders. Applying for personal loans in India doesnt require any collateral, guarantor or security.
Applicants can use the money for any purpose. With the easy repayment options available, tenure
could range from 12 to 84 months. The free financing calculator gives people flexible options to
calculate monthly installments.
Budget planning is crucial before opting for loans. Borrowers should sit down and list all their
expenses and also consider their income before they apply for one of these loans. The financing
calculator is a good tool to use for figuring out all of ones requirements. The process starts with
the applicant researching and finding out information about bank loan such as eligibility,
documentation, lending rate, tenure, fees, charges and any other related information about the
finance company. All of this information can be found on BankandFinance.com. This site is
designed to help people find the best company in India. Use the financing calculator that is
available for free at BankandFinance.com to compare the loans and rates from a number of
different banks and lending companies. Once a bank has been decided upon, applicants must
submit all required documents and let the loan associates finish the verification process. Based
on credit scores (CIBIL Score), income, loan history, and repayment capacity, loans in India are
sanctioned by the institution which receives a loan application. After the verification process, the
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applicant will receive a cheque or draft in their name from the loans and lending department of a
bank or institution.
Once the loan has been received, borrowers can use it for any purpose. A responsible borrower
will ensure that they repay the loan in the specified period of time. Banks usually issue
confirmation letters when personal loans in the name of specific borrowers have been cleared. It
is in the best interest of borrowers to do research and get a reasonable sized loan at the lowest
interest rates from sources like HDFC personal loan, Axis bank, SBI, ICICI and many others.
The financing calculator tool on the website is a good resource during the budgeting process.

Definition
Personal loan
Customer loan granted for personal (medical), family (education, vacation), or household
(extension, repairs, purchase of air conditioner, computer, refrigerator, etc.) use, as opposed to
business or commercial use. Such loans are either unsecured, or secured by the asset purchased
or by a co-signor (guarantor). Unsecured loans (called signature loans) are advanced on the basis
of the borrowers credit and ability to repay the loan from personal income. Repayment is
usually through fixed amount installments over a fixed term.

What is a Personal Loan?

Powered By Albireo
A personal loan is that it is not secured by collateral."Collateral" means something of value, like
a home, boat or car that the lender can repossess if you.

Customer experience
Powered by Shaun smith is widely regarded as one of the top business speakers and experts on
customer experience and brand leadership. Over the last few years, he has been a key catalyst in
8

expanding management focus from the tactical issues of customer service to the much wider and
strategic issue of customer experience. He has developed some of the latest thinking and practice
around this subject, focusing in particular on how organization can achieve brand differentiation
and long-term customer loyalty through the customer experience. Shaun smith is an established
author on the subject and is a highly dynamic business speaker, regularly sought after by
organization worldwide.

History
Customer Experience
Historically speaking, customer experience (CX) is centered on the interactionbetween
companies and their customers. In essence, customer experience(cx) is based on the feelings that
arise once customers engage with your products, services, and channels.
Every customers experience is unique because, well, each customer is unique. For any customer,
the experience begins the moment they interact with your company. It becomes more informed
with every touch point, and it continues as long as the customer engages with your company.
Perhaps it would help to imagine your CX as lily pads, and your customers as frogs trying to
cross a pond. Different customers may cross the pond in similar sequences of lily pads. Some
may take unique paths. Some may fall into the water and be lost forever.

Personal loan
If youre looking for a point in time at which the concept of loans came into being, youre in for
a long search. Lending in any form is pretty much second nature and the practice probably
extends way back into the mists of time. Now, thats not to say that theres no documentation
about the history of loans. In fact, there are reams of historical documents dating back thousands
of years that show the evolution of the loans industry.

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Some of the earliest

monetary loans have been

documented in the

Bible!

including

Romans and ancient Greeks,

the

Other

cultures,

have ample evidence of a thriving lending industry that dates back thousands of years.
But the oldest records go all the way back to Assyria and Babylonia where merchants of the time
made grain loans to farmers and traders. The mechanisms in place were pretty sophisticated,
even by modern standards, with lenders accepting both deposits and acting a little like a bureau
de change.
Now if youre wondering who came up with the idea of paying interest on loans, you can lay the
blame at the door of the Mesopotamians.
The main European economies didnt really catch on the power of lending until around the 13th
century when the all-powerful churches realized the financial benefits of raising much needed
revenue in the form of interest.

How did loans evolve?

Even though money lending is a very old practice, it didnt really evolve much until the middle
Ages. At this point in history a rapid change was seen in the ways money could be borrowed.

Indentured Loans:Even the recent fad that is payday loans, whilst unscrupulous, has served to make the money
lending industry a safer place for borrowers. Following a wave of repossessions, the government
stepped in to regulate an industry where interest rates reached as high Good old indentured loans;
aka a way of ripping off the poor!
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Used in Europe from the middle Ages through the 1800s, the indentured loan was a mechanism
that allowed the landed gentry and rich tradesmen to borrow money for the purchase of land or a
house. In return for the necessary finances, the lender would be expected to work off their debt
by working on the lender's estate.
When you think about it, indentured loans are a convenient way for both parties to get what they
needed. But, some unscrupulous lenders over-inflated the debt or interest payments, resulting in
the borrower effectively becoming a slave.

Banking Loans:Fortunately, there were lenders out there who recognized the value of repeat custom and were
practicing an early form of sustainable lending at the same time as indentured loans were
thriving. Early Italian pioneers were setting up stalls in local markets from which they would
lend money. An interest rate was applied to the loan and the borrower was expected to pay back
the outstanding monies at set intervals. Now you can see where modern banks get their ideas
from. In fact, the word bank is derived from banc; the benches on which the moneylenders
sat when trading. The only problem with this type of loan was the wild variation in interest rates
which were set by each lender and not controlled by a central authority.
Point of interest: if a lender decided he wasnt making enough money he would smash his bench
(bankrupt) and look for another job. This phrase translates into bankrupt, although the
implications are somewhat different nowadays.

Modern Banking Loans:Fast forward a few hundred years and breathe a sigh of relief: money lending is now subject to
far greater controls. In most countries, a central bank or financial authority regulates money
lenders and the chances of losing your kneecaps to a loan shark are only slight.
One of the more sensible controls placed on banks and lending is the amount that can be loaned
to an individual. In days gone by there was no limit and you can probably guess the problems
some people ran into as they tried to service huge debts. as 4000%.

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In some respects, the underhand and very dubious practices found in depths of history have had a
beneficial effect on our finances.

However, if not for some of the oppression and misdealing that was present throughout the
history of lending, then the fairness and opportunity that exists in banking today might not be
possible. Even the oppression that resulted from indentured servitude in the past helped to
establish modern banking by showing what factors needed to be eliminated so as best to benefit
both lender and borrower.

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Advantages and Disadvantages of personal loan

Advantages

Easily Available Getting a personal loan is not a tough task. Personal loans are offered
at reasonable interest rates by almost all banks and financial institutions. It is easy and
convenient to get these loans in comparison to other types of loans..

No Agent or Middleman Involved In order to get a personal loan you do not have to
approach a middle man or an agent. This avoids unnecessary delays and expenses. You
can directly approach the bank or financial institution for the purpose.

Unsecured Loan As stated earlier, personal loan is an unsecured loan. There is no

collateral security required in order to get this loan. All that is required is your ability to
pay back the money. You are not required to mortgage any of your assets or provide for
any kind of guarantee. One the lending institution become sure of your re-payment
ability, they process the loan.

Less Processing Time As personal loans are available without any security or guarantee
the processing time involved in getting it is also very less.

All Purpose Loan Personal loan is such where it is not mandatory for you to specify the
cause for which you are to use the money. You can use the amount credited in your name
for any purpose. It is at your discretion to decide what you have to do with the money.

Minimum Paperwork Getting a personal loan does not require verification of any asset
or any other kind of proofs and certificates that involve a lot of paperwork as none of
your property is mortgaged.

Schemes and Offers Number of banks and financial institutions keep announcing
special schemes and offers of personal loans for professionals like Chartered
Accountants, Doctors and Architects etc.

Does not require any collateral

Easy access, most banks and financial institutions offer it, you can even apply online
sometimes.
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Repayments are based on your financial capacity and monthly disposable income.

The rate is generally lower than taking a cash advance on your credit card

Disadvantages

Qualification Criteria - You need to qualify for a personal loan as per the guidelines of the
bank and once you do that there is no delay. The guidelines vary from one bank to the
other and the lenders do observe strict guidelines in this case as there is no collateral
security.

Credit History It is mandatory for you to have a good credit history when you apply for
a personal loan or else your application may get rejected. No lender would want a bad
debt for the amount he lends. So prior to applying for your personal loan make sure you
have a good credit history without any default in payments. It is advisable to apply for a
personal loan with the bank in which you have an account or with which you share good
rapport. Applying for a personal loan with a new bank or financial institution may result
in more paperwork as they may call for detailed documentation and references for
verification.

Bank Account It is mandatory for you to have a bank account if you wish to avail a
personal loan. Not necessarily with the bank you are applying for.

Lenders Risk As it is an unsecured loan, the risk is quite high for the lender because
there is no collateral security or guarantee with them. If the borrower defaults payments
then recovery of these loans prove to be very expensive and tedious.

You will still have to provide solid documentation about your ability to repay the loan.

Interest rates can be higher than a secured loan.

Service charges and default penalties are higher than on any other loans.

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Gera Metallica
10 Aug 2007
Personal loans are probably the fastest and most easily available of retail loan products. They are,
however, costlier than other loans, such as home loans, loans against property, or loans against
shares.

The Pros

Unlike other retail loan products such as home loans or loans against property, you don't
need to produce any collateral or security to avail a personal loan. The paper work is also
minimal compared to other loans; making the loan processing quicker.

You also do not have to specify the end use of the money while taking a personal loan.
All the lender is interested in is whether you are capable of paying the EMIs every month

on or before the due date.

Getting a personal loan is cheaper than borrowing on your credit card. So, if you have run
up a huge outstanding amount on your credit card and the accumulated interest is making
it almost impossible to clear your outstanding, a personal loan might be the way to go.
What you do here is use money borrowed at a lower interest rate (the personal loan) to
pay off money borrowed at a higher rate (outstanding amount on the credit card).

The Cons

Since banks perceive higher risk in this category, many follow a list of approved
categories of borrowers. If your profile doesn't match up to any of these pre-approved

categories, your loan application will be rejected.

The interest rate of personal loan can be high; sometimes double that of home loans,
especially if your credit profile is weak

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Benefits of Personal Loans

A personal loan is and should be taken to tide over emergencies only. It should not be
taken on whims or just because one feels like splurging. They carry high interest rates or

if it is a secured personal loan then you may lose your collateral.

If you are self-employed or salaried, there may be times when you need instant cash for
emergencies of different kinds, and then you could go for a personal loan. Timing and

speed are vital factors while choosing a personal loan across various institutions.
Numerous uses of Personal loans are domestic or foreign travel, medical treatment for
self or family members, education, marriage, business expansion, working capital,
working requirements and meeting margin money for purchase of assets and so on and so
forth.

Other benefits

Using Loan for any useThese types of loans can be taken by the customer without mentioning a specific reason.
Bank loan amounts based on need are handed out by banks at specific interest rates to
most borrowers. These loans are made available at interest rates determined by the
market. Borrowers will have to sign off before they get the loan and repay the loan in
installments in the agreed upon time frame, as per the application.

No CollateralAs these loans are unsecured loans, there is no need to present any collateral or have a
guarantor to get personal loans in India. It is the borrower who is entirely responsible for
paying back the loan. Banks usually advance a bank loan by taking into account
information such as monthly income, type of employment, residence type, job history and
other related items. If the borrower meets the eligibility criteria, then the bank sanctions
the loan amount at the best available interest rates to the borrower. Borrowers can

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calculate monthly installments using the financing calculator tool on the website which
they used to do a search.

ConfidentialityAs far personal loans in India are concerned, the two main parties to the deal are the bank
and borrower. The amount and terms and conditions of a loan will have to be kept
discreet and confidential between the bank and the borrower. Lenders are bound by law
to keep bank loan information confidential.

Easy Repayment OptionsEMI is the term used to describe the process by which a borrower repays the lending
institution or bank. It is possible for borrowers to get the loan period extended. Borrowers
can do this to reduce their monthly payment burden if they are going through a tough
period and want to get control of their financial situation. Borrowers can also choose to
get the loan terms changed and pay it off early. Decreasing the tenure will be a good idea
because the interest rates paid will be less of the total bank loan amount at the end of the
tenure.
Calculating monthly installments and the total interest amount to be repaid with the help
of the free financing calculator tool on financial websites like BankandFinance.com helps
people stay in control. The documentation for unsecured personal loans is far less than
what is required for home or car loans. Income proof and employment history certificate
are the two important documents needed to apply for bank loan for personal use.

Higher Loan AmountsAn applicant can receive higher loan amounts starting from Rs. 50,000/- to Rs. 20 lakhs
at prevailing interest rates. This rate can vary from bank to bank, so it pays to check and
also negotiate with the lender. Depending on the applicants requirements, repayment
capacity and income the bank will sanction the loan amount for the applicant applying for
loans in India.

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Reasons for Personal Loans

There are many reasons why people want and apply for personal loans in India.

To buy an asset

Debt consolidation

Going on an overseas vacation

Purchasing a vehicle

Marriage Expenses
Investing in jewellery
Paying off credit card bills, etc

Nature of personal loan

Some lenders offer secured loans (which need guarantors or collateral security) while
others dont have any eligibility criteria.

Minimal paperwork.

Some banks provide loans only to salaried people and not to self-employed individuals.

Some institutions take few hours to process the loan, others may take 3-4 days including
one day for field investigation.

Personal loans are available up to Rs 20 lakhs depending on the type of institution or

bank.

The Credit Information Report (CIR) plays a crucial role in a lenders decision to approve
a loan application.

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Terms and Conditions for Personal Loan

The maximum loan amount that can be availed of under this offer is `15 lakh. Select
customers may be eligible for loans up to `20 lakh based on internal credit policy of

HSBC
The Personal Loan is offered at a rate of interest which is fixed across the tenure of the

loan. Terms on which the loan is offered are stated in the loan agreement
Please read the loan agreement carefully and ensure that key terms such as interest rates,

processing fees, and prepayment charges are clearly stated before you sign the agreement
You can prepay the Personal Loan after 6 months of loan disbursement by giving a

written instruction to the Bank

Refer to the Loan Service Charges and Fees section on our website www.hsbc.co.in for
service charges (including prepayment charges) applicable on your loan post

disbursement
Interest on your Personal Loan account accrues on a daily basis and is payable in

Equated Monthly Installment (EMI) on the due date

You can pay your EMIs through Electronic Clearing System (ECS) or by setting up a
Standing Instruction (SI) on your HSBC Bank account

You need to pay your EMI on the due date. Non-payment of EMI would impact, but will not
be limited to: - Your credit rating (reporting to Credit Bureau - CIBIL) - This will have an
impact on other credit facilities availed of from HSBC - The Bank may initiate recovery
proceedings to recover the dues

Top banks of personal loan in India 2016

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Based on Rate of Interest

ICICI Bank

13.49% 17.50%

HDFC Bank

11.49% 20.00%

SBI

17.80%

Kotak Mahindra

11.50% 20.00%, Special Offers of 11.5% for 15 lack + 1 lakh Salary P.M

Axis Bank

15.00% 20.00%

Bajaj Fiserv

15.00% 17.00%

Standard Chartered

14% 18%

Fullerton India

16.00% 32.00%

Induced Bank

14% 16.5%

Based on Processing fee Charges

ICICI Bank

0.8% for special companies else 2%

HDFC Bank

0.99 % 2 %

Bajaj Fiserv

2.00% 2.5%

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Kotak Mahindra

Rs.500 to 2.00%

SBI

2.00%-3.00%

Axis Bank

2.00%

Standard Chartered

1%

Fullerton India

2.00%

Induced Bank

1-2 %

Based on prepayment charges

Bajaj Fiserv

Nil

Axis Bank

Nil

SBI

N.A

Standard Chartered

0% 5%

HDFC Bank

4.00%

Fullerton India

4.00%
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Kotak Mahindra Bank

3% 5% (Nil after 12 Months (Loan amount above 10 lack)

ICICI Bank

5% Or Nil (For Loan Amount More Than 10 Lacks)

Induced Bank

4%

PUBLIC BANK AND PRIVATE BANK

INTRODUCTION
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Scheduled commercial bank in India is categorized into five different groups according to
their ownership and nature of operation. These banks group are
1.
2.
3.
4.
5.

State bank of India and its associates.

Other nationalized banks.
Regional rural banks.
Foreign banks.
Other Indian SCBs (in the private sector).

Scheduled commercial bank consists of 28 public sector banks (state bank of India and its seven
associates, nationalized banks another public sector banks), 9new private sector banks, 20 old
private sector banks and 31 foreign banks. Public sector banks are the ones in which the
government has a major holding. They are divided into two groups i.e.; nationalized bank of
India and its associates.
Private sector banks come into existence to supplement the performance of public sector banks
and serve the need of the economy better. As the public sector banks were merely in the hand of
the government, banks have no incentive to make profit and improve the financial health.
Nationalization killed competition and stifled competition in banking. Banks operated in
regulatory environment with administrated rate of interest structure, quantitative restrictions on
credit, high reserve requirements and significant proportion of bendable resource going to the
priority government sector .this result in low level of investment and growth , decline in
productivity and erosion of (1991) which recommended the free entry of new bank in the
financial market provide they confirm the minimum startup capital and other requirements by the
permission of reserve bank of India.
As on march 2006, the number of schedule commercial banks in India stood at 2182. As on June
2006 the number of banked center served by scheduled commercial banks stood at 34,513. Of
these centers, 29,039 were single office center and 45 centers had 100 and more bank office
center, out of 34,513 banked centers, arranged according to the size of deposits accounted by
67.7 per cent of total bank credit. Aggregate deposit of top hundred center grew at 27.7 per cent
in June 2006 over June 2005 compared to 18.0 per cent growth recorded a year 2006 over June
2005, compared to 32.9 per cent growth recorded in June 2005.

24

Nationalized banks, as a group, accounted for 48.5 per cent of the aggregate deposits, while state
banks of India and its associates accounted for 22.9 per cent. The shares of other scheduled
commercial banks, foreign banks and regional rural banks in aggregate deposits were 20.0 per
cent, 5.4 per cent and 3.2 per cent, respectively. As regards gross bank credit, nationalized banks
held the maximum share of 47.6 per cent in the total bank credit followed by state bank of India
and its associates at 22.6 per cent and other scheduled commercial bank at 20.3 per cent. Foreign
bank and regional rural bank had relatively lower shares in the total bank credit at 6.9 percent
and 2.6 per cent, respectively 3.
With assets of around Rs 4, 93,000 crore, State Bank of India (SBI) is the countrys largest bank,
yet it ranks 84th in the world, according to The Banker; the next biggest is ICICI bank, which is
half the size of SBI and ranked around 200 globally. The top 25 banks-of which, 18 are owned
by government account for about 85 per cent of banking assets. Thus there seem to be
concentration as well as fragmentation in the Indianbanking sector.

Company profil
25

ICICI bank (industrial credit and investment corporation of india)

About us
ICICI Bank is India's largest private sector bank with total assets of Rs. 6,461.29 billion (US$
103 billion) at March 31, 2015 and profit after tax Rs. 111.75 billion (US$ 1,788 million) for the
year ended March 31, 2015. ICICI Bank currently has a network of 4,450 Branches and 13,797
ATM's across India.
ICICI Bank (Industrial Credit and Investment Corporation of India) is an India multinational
banking and financial service company headquartered in Mumbai, Maharashtra, India, with its
registered office in Vadodara. In 2014, it was the second largest bank in India in terms of assets
and third in term of market capitalization. It offers a wide range of banking products and
financial services for corporate and retail customers through a variety of delivery channels and
specialized subsidiaries in the areas of investment banking, life, non-life insurance, venture
capital and asset management. The bank has a network of 4,450 branches and 13,797 ATMsin
India, and has a presence in 19 countries including India.
ICICI Bank is one of the Big Four banks of India, along with State Bank of India, Bank of
Baroda and Punjab National Bank. The bank has subsidiaries in the United Kingdom and
Canada; branches in United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar, Oman,
Dubai International Finance Centre, China, and South Africa; and representative offices in
United Arab Emirates, Bangladesh, Malaysia and Indonesia. The company's UK subsidiary has
also established branches in Belgium and Germany.

History
26

.
ICICI's branch located in Knightsbridge, London.
ICICI Bank was established by the Industrial Credit and Investment Corporation of India
(ICICI), an Indian financial institution, as a wholly owned subsidiary in 1994. The parent
company was formed in 1955 as a joint-venture of the World Bank India's public-sector banks
and public-sector insurance companies to provide project financing to Indian industry. The bank
was founded as the Industrial Credit and Investment Corporation of India Bank, before it
changed its name to the abbreviated ICICI Bank. The parent company was later merged with the
bank.
ICICI Bank launched internet banking operations in 1998.
ICICI's shareholding in ICICI Bank was reduced to 46 percent, through a public offering of
shares in India in 1998, followed by an equity offering in the form of American depositary
receipts on the NYSE in 2000.
ICICI Bank acquired the bank of Madura Limited in an all-stock deal in 2001 and sold
additional stakes to institutional investors during 2001-02
In the 1990s, ICICI transformed its business from a development financial institution offering
only project finance to a diversified financial services group, offering a wide variety of products
and services, both directly and through a number of subsidiaries and affiliates like ICICI Bank.
27

In 1999, ICICI become the first Indian company and the first bank or financial institution from
non-Japan Asia to be listed on the NYSE.
In 2000, ICICI Bank became the first Indian bank to list on the New York Stock Exchange with
its five million American depository shares issue generating a demand book 13 times the offer
size.
In October 2001, the Boards of Directors of ICICI and ICICI Bank approved the merger of ICICI
and two of its wholly owned retail finance subsidiaries, ICICI Personal Financial Services
Limited and ICICI Capital Services Limited, with ICICI Bank. The merger was approved by
shareholders of ICICI and ICICI Bank in January 2002, by the high court of Gujarat at
Ahmadabad in March 2002 and by the High Court of Judicature at Mumbai and the Reserve
Bank of India in April 2002.
In 2008, following the 2008 financial crisis, customers rushed to ICICI ATMs and branches in
some locations due to rumors of adverse financial position of ICICI Bank. The Reserve Bank of
India issued a clarification on the financial strength of ICICI Bank to dispel the rumors.

Services offered by the company:

Deposits
Loans
Cards
Investments & Insurance
Demat

NRI Services

Money Transfer
28

Bank Accounts

Investment

Home Loans

Insurance

Loans against FD

Achievements
2014

ICICI Bank has been honored as The Best Service Provider Risk Management, India at
The Asset Triple A Transaction Banking, Treasury, Trade and Risk Management Awards
2014.

ICICI Bank has won The Corporate Treasurer Awards 2013 in the categories of 'Best
Cash Management Bank in India' & 'Best Trade Finance Bank in India'.

ICICI Bank has been awarded the 'Best Retail Bank in India', 'Best Microfinance
Business' and Best Retail Banking Branch Innovation' under the 'Excellence in Retail
Financial Services awards 2014' by The Asian Banker.

2013
ICICI Bank has been adjudged winner at the Express IT Innovation Award under the Large
Enterprise category.

29

 ICICI Bank wins awards under the categories of 'Most Innovative Bank' and 'Most
Innovative use of MultiChannel Infrastructure' at the Indian Bank's Association's
BANCON Innovation Awards 2013.
ICICI Bank won the Asian Banking & Finance Retail Banking Award 2013 for the Online
Banking Initiative of the Year
ICICI Bank won an award under the Social Media category at the InformationWeek
EDGE Award
ICICI Bank received the award for 'Best Private Sector Banker' by the Sunday Standard
Best Bankers Awards 2013.
ICICI Bank has been awarded the 'Best Banker All round expansion' by the Sunday
Standard Best Bankers Awards 2013.
ICICI Bank won 'Best Banker Efficiency & Profitability' by the Sunday Standard Best
Bankers Awards 2013.
ICICI Bank has won the Trade Finance Magazine Award for Excellence 2013, under the
category of 'Asia Pacific Awards : Best Trade Bank in India'
ICICI Bank received the Asian Banking & Finance Wholesale Banking Awards 2013 for
the India Domestic Trade Finance Bank of the Year
ICICI Bank Limited has been awarded as the Best Private Sector Bank under the category
Global Business Development for the Dun & Bradstreet Polaris Financial Technology
Banking Awards 2013
ICICI Bank has been one of the recipients of the Corporate Governance Asia Annual
Recognition Awards 2013

30

 ICICI Bank has won the Best Bank Award for Use of IT for Business Innovation Among
Large Banks from the Institute for Development and Research in Banking Technology
(IDRBT)
ICICI Bank has receieved the Special Award for Best IT Team Among Private Sector
Banks from the Institute for Development and Research in Banking Technology (IDRBT)
ICICI Bank won the Special Award for Electronic Payment Systems Among Large Banks
from the Institute for Development and Research in Banking Technology (IDRBT)
ICICI Bank receievd Special Award for Mobile Banking Among Large Banks from the
Institute for Development and Research in Banking Technology (IDRBT)
ICICI Bank ranks 10th in Fortune India's list of 50 most admired companies in India.
ICICI Bank Limited has been conferred the Best Remittance Business award at The Asian
Banker's International Excellence in Retail Financial Services 2013 Awards ceremony.
ICICI Bank was honored with the Medici Innovation Hall of Fame Award, instituted by
The Medici Institute in collaboration with the Medici Group, USA.
ICICI Bank and its IT partner Fundtech won The Asian Banker Technology
Implementation Award for the Convergence Banking project from Asian Banker.
ICICI Bank awarded the Most Admired Infrastructure Debt Financer and PPP Project of
the Year: Yamuna Expressway Project, in the 5th KPMG Infrastructure Today Awards by
ASAPP Media Information Group, publishers of Infrastructure Today in association with
KPMG
ICICI Bank was awarded a ''Special IT Innovation Award'' by Lenovo NASSCOM and
CNBCTV18.
ICICI Bank was the winner of ''6th Loyalty Awards'' for My Savings Rewards.
31

 ICICI Bank UK PLC's online savings product HiSAVE won the ''Highly Commended''
(2nd rank) at the Consumer Moneyfacts Awards.
ICICI Bank received the ''Gram Samvad'',Service for Low cost/Small budget marketing
initiative Award by Rural Marketing Association of India (RMAI).
ICICI Bank won the Best domestic bank, India by The Asset Triple A Country Awards.

2012

ICICI Bank received the Golden Peacock Innovative Product / Service Award for its Tab
Banking project. The Golden Peacock Awards were instituted by the Institute of Directors
and was headed by Justice P N Bhagwati, Ex Chief Justice of India.

ICICI Bank received the ''Dataquest Technology Innovation Awards 2012'' for Data
center migration by Dataquest.

ICICI Bank was conferred the Best Performance Award for Self Help Group (SHG) Bank
Linkage Programme in NABARD's State Level Awards announced by their Maharashtra
Regional Office. The Bank received the first prize for the year 201011 in the Private
Sector Bank category and 2nd runner up for the year 201112 in the Commercial Bank
category.

ICICI Bank won the Best Bank India Award by The Banker.

ICICI Bank tops the list of ''Private sector and Foreign Banks'' by Brand Equity, Most
Trusted Brands 2012. It ranks 15th in the ''Top Service 50 Brands''.

ICICI Bank tops the list of most fans in India and globally ranks fifth amongst financial
institutions on Facebook in the social media engagement study conducted by Ketchum
Sampark.

32

ICICI Bank in the Private Sector Bank category won the Best Technology Bank Of The
Year ,Best Financial Inclusion Initiative and Best Use Of Technology In Training and e
Learning by Indian Bank's Association (IBA) Technology Awards. The Bank also
received the first runner up for Best Online Bank, Best Customer Relationship Initiative
and Best Use Of Mobility Technology in Banking by IBA Technology Awards .

ICICI Bank awarded the Best SME Bank for Treasury and Working Capital (India) by
The Asset Triple A.

ICICI Bank received the Best Trade Finance House and Best Cash Management House
by The Corporate Treasurer Alliance Country Awards.

ICICI Bank awarded the Best Private Sector Bank in Global Business Development,
Rural Reach and SME financing categories by Dun & Bradstreet Polaris Financial
Technology Banking Awards.

For the fifth year in a row, ICICI Bank was awarded the ''Best Foreign Exchange Bank
(India)'' by Finance Asia Country Awards. The Bank also received the ''Best Bond House
(India)''.

ICICI Bank awarded the Best Trade Finance bank in India by GTR Asia Leaders in Trade
Awards 2012.

ICICI Bank featured as the top Indian brand to be listed in the annual BrandZ's Top 100
Most Valuable Global Brands study.

ICICI Bank won the ''Best Bond House (India) 2011'', by IFR Asia

ICICI Bank awarded the Best Bank (India) by Global Finance

ICICI Bank won the ''Century International Quality Era Award'' at Geneva. The award
recognizes commitment towards Quality, Excellence, Customer Satisfaction, Leadership

33

and Strategic Planning as established in the QC 100 model of Total Quality Management
(TQM).

ICICI Bank was recognised for the first Credit Default Swap (CDS) deal in India at the
Fimmda annual conference in Kuala Lumpur.

2011

The bank tops the list of 'Most Trusted Private Sector Bank' and ranks 10th in the list of
'India's Most Trusted Service Brands' by Brand Equity, Most Trusted Brands 2011

The bank received the Best Manpower Efficient Award amongst private sector banks by
FICCI IBA

The bank won the Best Local Bank Gold by Trade and Forfaiting Awards, UK

The bank was awarded The Asset Triple A Awards, Hongkong for Best domestic
transaction bank (India), For 6th consecutive year won the best domestic trade finance
bank (India), Best domestic cash management bank (India), Best eCommerce Bank
(India), and Best SME Bank (India)

The bank is the only Indian brand to figure in the BrandZ Top 100 Most Valuable Global
Brands Report 2011, second year in a row.

The bank ranked 5th in the list of '57 Indian Companies', and 288th in World Rankings in
Forbes Global 2000 list

The bank has won the 'Banking Technology Awards 2010' at The Indian Banks
Association in the following categories Best Financial Inclusion Initiative' (first prize),
Best Online Bank ( runner up), Best use of Business Intelligence ( runner up) and
Technology Bank of the year ( runner up)

34

The bank was recognized for its Special Citation of the Fully Electronic Branch Service
Channel, first set up at Hiranandani Estate, Thane, at the Financial Insights Innovation
Awards held in conjunction with Asian Financial Services Congress

For the second year in a row, the bank was ranked 70th in the Brandirectory league tables
of the worlds most valuable brands by, The BrandFinance Banking 500.

ICICI Bank UK, HiSAVE product range has been awarded the Consumer Moneyfacts
Awards 2011 for the 'Best Online Savings Provider'

The bank ranked second in the financial services sector in Business Worlds, Most
Respected Company Awards 2011'

The bank was ranked 1st in the Banking and Finance category and 9th in the '2010 Best
Companies To Work For' by Business Today

2010

The bank awarded the most Techfriendly Bank award by Business World

The bank was voted as the Most Trusted Brand among private sector banks in the 2010
Economic Times Brand Equity Most Trusted Brands Awards and ranked 7th in the list
of Top 50 service brands

The bank received the 2010 World Finance UK award for Excellence in remittance
business, Worldwide, Excellence in NRI Services, Worldwide, Excellence in private
banking business, APAC Region

ICICI Bank UK, HiSAVE has been awarded 'Best Online Savings Account Provider 2010
' by Your Money, direct consumer awards, UK
35

ICICI Bank UK, HiSAVE has been commended for 'Best Internet Account Provider 2010'
and 'Best Fixed Rate Account Provider 2010' by Moneyfacts, an independent consumer
finance leading aggregator

For the sixth time in a row, The bank has received the Most Preferred Auto Loan Brand in
the Financials Services category at the CNBC Consumer Awards

The bank has won Gold in the Readers Digest Trusted Brands 2010 Consumer award in
the Finance category for a) Best Bank and b) Best Credit Card Issuing Bank

The bank won the Best Trade Finance Bank and Best Foreign Exchange Bank, India at
the Finance Asia Country Awards for Achievement, Hong Kong

The bank won the Best Local Bank by Trade and Forfaiting Review, UK

The bank received the Best Trade Finance Bank in India by The Asset Triple A Award,
Hong Kong

The bank was awarded the Best Trade Finance Bank in South Asia by GTR (Global Trade
Review), UK

The bank amongst the top 3 to receive the FE EVI Green Business Leaders Award, in
the banking industry

The bank wins the Asian Banker Award for Best Banking Security System

The bank is the first and the only Indian brand to be ranked as the 45th most valuable
global brand by BrandZ Top 100 Global Brands Report.

The bank ranked 1st in the term money category, from a list of 38 leading Banks by the
German magazine, Euro. Since commencement of business two years ago in the German
market,

this

is

the

5th

certification/award

including

certifications

from

36

Stiftungwarrenttest (for Savings and Term Deposits) and three 'Best Bank' rankings by
Euro magazine.

Forbes' 2000 most powerful listed companies' survey ranked The bank 4th among the
Indian companies and 282nd globally.

The bank was awarded The Asian Banker Achievement Award 2009 for Cash
Management in India.

ICICI Group Global Private Clients (GPC) has won the coveted 'Euromoney Private
Banking Award 2010' for Best Bank in the SuperAffluent Category ($500,000 to $1
million) India.

The bank wins the Asian Banker Award for Excellence in SME Banking 2009

The bank won the second prize in the Six Sigma Excellence Awards, conducted by Indian
Statistical institute, Bangalore for 'Improving Sales for TV Banking business'

2009

ICICI Bank Mobile Banking was adjudged 'Best Bank Award for Initiatives in Mobile
Payments and Banking' by IDRBT, on May 18, 2009 in Hyderabad.

ICICI Bank's b2 branchfree banking was adjudged 'Best EBanking Project

Implementation Award 2008' by The Asian Banker, on May 11, 2009 at the China World
Hotel in Beijing.

ICICI Bank bags the Best bank in SME financing (Private Sector) at the Dun &
Bradstreet Banking awards 2009.

ICICI Bank NRI services win the Excellence in Business Model Innovation Award in
the eighth Asian Banker Excellence in Retail Financial Services Awards Programme.

37

ICICI Bank's Rural Micro Banking and AgriBusiness Group wins WOW Event &
Experiential Marketing Award in two categories Rural Marketing programme of the
year and Small Budget On Ground Promotion of the Year. These awards were given
for Cattle Loan 'Kamdhenu Campaign' and 'Talkies on the move campaign' respectively.

ICICI Bank's Germany Branch has been certified by StiftungWarrentest. ICICI Bank is
ranked 2nd amongst 57 savings products across 19 banks

ICICI Bank Germany won the yearly banking test of the investor magazine euro in the
call money category.

The ICICI Bank was awarded the runner's up position in Gartner Business Intelligence
and Excellence Award for Asia Pacific for its Business Intelligence functions.

ICICI Bank's Organizational Excellence Group was recently awarded ISO 9001:2008
certification by TUV Nord. The scope of certification comprised processes around
consulting and capability building on methods of quality & improvements.

ICICI Bank has been awarded the following titles under The Asset Triple A Country
Awards for 2009:

Best Transaction Bank in India

Best Trade Finance Bank in India

Best Cash Management Bank in India

Best Domestic Custodian in India

ICICI Bank has bagged the Best Cash Management Bank in India award for the second
year in a row. The other awards have been bagged for the third year in a row.

38

ICICI Bank Canada received the prestigious Canadian Helen Keller Award at the
Canadian Helen Keller Centre's Fifth Annual Luncheon in Toronto. The award was given
to ICICI Bank its longstanding support to this unique training centre for people who are
deafblind.

ICICI Bank wins World Finance 2009 Banking Awards for Best NRI Services Bank.

ICICI Bank wins Asset Triple A Investment Awards for the Best Derivative House, India.
In addition ICICI Bank were Highly commended, Local Currency Structured product,
India for 1.5 year ADR GDR linked Range Accrual Note.

Annual report
Balance sheet of ICICI Bank
March 15
12 months

March 14
12
months

Capital and liabilities:

Total share capital

1,159.66

1,155.04

Equity share capital

1,159.66

1,155.04

Share application money

7.4

6.57

Reserves

79,262.26

72,051.71

Net worth

80,429.36

73,213.32

Deposits

361,562.73

331,913.66

Borrowings

172,417.35

154,759.05

Total debt

533,980.08

486,672.71

Other liabilities & provision

31,719.86

34,755.55

Total liabilities

646,129.30

594,641.58

39

March 15
12 months

March 14
12 months

Assets:
Cash and balance with RBI

25,652.91

21,821.83

Balance with banks, money at call

16,651.71

19,707.77

Advances

387,522.07

338,702.65

Investments

186,580.03

177,021.82

Gross block

4,725.52

4,678.14

Net block

4,725.52

4,678.14

Other assets

24,997.05

32,709.39

Total assets

646,129.29

594,641.60

Contingent liabilities

868,190.58

794,965.35

Book value(RS)

138.72

633.92

March 15
12 month

March 14
12 month

Interest / discount on advance / bills

35,631.08

31,427.93

Income from investment

11,499.57

11,557.06

Interest on balance with RBI and other

interbank fund
Other

195.10

199.98

1,320.39

993.19

Total interest earned

49,091.14

44,178.15

Other income

12,176.13

10,427.87

Total income

61,267.27

54,606.02

Interest expanded

30,051.53

27,702.59

Payments to and provisions for employees

4,749.88

4,220.11

Depreciation

623.89

544.27

Depreciation on leased assets

35.06

31.70

Operating expenses(exclude employee cost

& depreciation)

6,087.01

5,512.79

Total operating expenses

11,495.83

10,308.86

Profit and loss account of ICICI bank

INCOME

EXPANDITURE

40

Provision toward income tax

4,859.14

3,839.50

Provision toward deferred tax

-219.57

313.19

Provision toward other taxes

5.00

5.00

Other provision and contingencies

3,899.99

2,626.41

Total provision and contingencies

8,544.56

6,784.10

Total expenditure

50,091.92

44,795.55

Net profit / loss for the year

11,175.35

9,810.48

Net profit / loss after EI & prior year item

11,175.35

9,810.48

Profit / loss brought forward

13,318.59

9,902.99

Total profit / loss available for

appropriations
APPROPRIATIONS

24,493.94

19,712.76

Transfer to / from statutory reserve

2,793.90

2,453.00

Transfer to /from reserve fund

0.77

4.61

Transfer to /from special reserve

1,100.00

900.00

Transfer to / from capital reserve

291.93

76.00

Transfer to / from general reserve

0.00

0.00

Transfer to / from investment reserve

-127.00

127.00

Dividend and dividend tax for the previous

year
Equity share dividend

2.98

-53.97

2,898.81

2,656.28

Tax on dividend

271.15

2312.25

Balance carried over to balance sheet

17,261.42

13,318.59

Total appropriations

24,493.94

19,712.76

OTHER INFORMATION EARNINGS PER

SHARE
Basic EPS (Rs)

19.00

85.00

Diluted EPS(RS)

19.00

85.00

Equity dividend rate (%)

250.00

230.00

b) non-encumbered

-number of shares (cores)

-per. Of shares (as a % of the total sh .of

prom. And promoter group)
-per. of shares (as a %of the total share
cap. Of the company)

DIVIDEND PERCENTAGE

41

Cash flow of ICICI bank

March 15
12 month
15,819.92

Mrch 14
12 month
13,968.17

-4,824.49

4,668.60

Net cash used in investing activities

-9,199.56

-12,246.48

Net cash used from financing activities

15,005.67

6,838.37

Foreign exchange gains / losses

-206.60

851.59

Net inc / dec in cash and cash equivalents

775.02

112.08

Cash and cash equivalents begin of year

41,529.60

41,417.52

Cash and cash equivalents end of year

42,304.62

41,529.60

Net profit / loss before extraordinary items

and tax
Net cash flow from operating activities

PNB (Punjab national bank)

About us
Punjab National Bank is an Indian multinational banking and financial services company. It is a
state-owned corporation based in New Delhi, India. Founded in 1894, the bank has over 6,300
branches and over 7,900 ATMs across 764 cities. It serves over 80 million customers.

42

Punjab National Bank is one of the Big Four banks of India, along with Bank of Baroda, ICICI
Bank and State Bank of India. It 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. PNB owns 20% of Everest Bank Limited, which has 50 branches in
Nepal. Lastly, PNB owns 84% of JSC (SB) PNB Bank in Kazakhstan, which has four branches.
Punjab National Bank, popularly called P. N. B., initially started its business on 12th April of the
year 1895. With their mission to provide banking services to the un-banked, they aim to be the
leading player in global banking. Over the time, they have become a known name, especially in
the Indo-Gangetic plains. The huge network of this bank includes over 5, 100 offices, which
include 5 overseas branches and more than 60 million customers. This bank has continued to
maintain their leadership position for its strong fundamentals, superior brand image as well as
huge franchise value.

Founder of PNB

43

History

44

capital adequacy ratio through internal accruals and a regular increase in Tier 1 capital Punjab
National Bank was registered on 19 May 1894 under the Indian Companies Act, with its office in
Anarkali Bazaar, Lahore. The founding board was drawn from different parts of India professing
different faiths and a varied back-ground with, however, the common objective of providing
country with a truly national bank which 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 LalaHarkishanLal, LalaLalchand, Shri Kali Prosanna Roy, Shri E.C. Jessawala, Shri
PrabhuDayal, BakshiJaishi Ram, and LalaDholanDass. LalaLajpatRai 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,
JawaharLal Nehru, LalBahadurShastri, Indira Gandhi, as well as the account of the famous
JalianwalaBagh Committee.
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 areasthe 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 Basel2
regulatory requirement, at 12.96% as on June 2008, despite being exposed to numerous market
and credit risk elements.

45

Constantly strengthening the 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 upgradation 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.
In a macroprudential 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.
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.
In July 2011, Punjab National Bank agreed to pick up a 30% stake in MetLife India which will
make it the single largest shareholder in the private insurance company. The two parties have
agreed that once the deal is finalized the company will be renamed PNB MetLife India

Awards
46

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.
The Banker, London Ranked 386 amongst Top 1000 Global Banks in July 2005.
Golden Peacock Award for excellence in corporate governance in 2005.

2010

Best Corporate Social Responsibility Practice Award.

Scope meritorious award for excellence in corporate governance 2009.

Golden peacock award for excellence in corporate governance in 2009.

Indian pride award for excellence in PSU category.

Award for priority sector lending including financial inclusion.

5 national award for the contribution made in promoting MSMEs skoch challenge award.

Livelihooh linkage of the milk producers in bulandshahardistrict uttar Pradesh.

Golden peacock innovative product and service award for BCP imple mentation for the
year 2010.

Best info sphere waresouse solution award 2009 IBM.

IDC financial insights innovation award 2010.

CIO 100 award for the year 2010.

Emerson uptime champion award for 2009 in the government and PSU category.

Excellence in training award in 2009-10.

47

2011

Scope meritorious award for best managed bank.

Wind power India award-second prize under the category of best wind power project
financier2011.

Golden peacock award for excellence in corporate social responsibilities.

Golden peacock national training award 2010 6th BML minjal award for excellence in
learning &knowledge development 2010.

Rolta corporate award 2010-top Indian company under banks category.

Best corporate social responsibilities practice award 2011.

Award for computerization of RRBs for 2010.

Award for best home loan provider for 2010.

Award for best eduction loan provider 2010.

Global HR excellence award 2010 for the outstanding contribution to the cause of
education asias best employer brand award.

Award for brand excellence under banking & financial services.

CSR excellence award 2010.

2012

Best bank award 2011bank.

Most socially responsive bank 2011.

Overall most productive bank award 2011.

Golden peacock national training award.

Golden peacock national training award.

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Best in corporate social responsibility overall.

Skoch financial inclusion award for its Jana mitra rickshaw scheme.

Indian pride award in corporate social responsibilities (CSR).

Editorial board roll of honor by CNBC TV18 India best banks and financial institutions
award.

Global HR excellence award under the category organization with innovative HR

practice.

Two award for SME financing- for lending under prime ministers employment
generation programmed (PMEGP) scheme in north zone and for lending in khadi and
village industry commission (KVIC) interest subsidy scheme on all India level.

Best bank award among large bank for IT for international effectiveness.

Golden peacock award for HR excellence 2011.

Award for excellence in training.

2013

Golden peacock business excellence award for the year 2011-12.

Social and corporate governance award best corporate social responsibilities.

Most social responsive bank 2012.

Best public sector bank.

Organization with innovative HR practices.

Best online bank (1st runner up) Indians bank association.

Bank with best use of business intelligence (winner).

Bank with best risk management and security initiatives (winner).

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Bank with best financial inclusion initiatives (second runner up).

Best bankers award under agriculture credit large.

Best public sector bank under priority sector lending.

3rd CMO Asia excellence for branding &marketing under banking, financial institutions
and insurance.

3rd Asias best employer brand award excellence in training.

Annual report

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