CUSTOMER SATISFACTION

AT

PUNJAB NATIONAL BANK

SUPERVISOR SUBMITTED BY
Dr. Suhasini Parashar Anuja

(Head, Deptt. Of BBA (B&I)

Business Administration) 5th Semester

Enrollment No:
0051491807

SESSION: 2007 - 2010

MAHARAJA SURAJMAL INSTITUTE
 (AFFILIATED BY GURU GOBIND SINGH
INDRAPRASTHA UNIVERSITY)
C-4 JANAK PURI, NEW DELHI-110058.

CERTIFICATE

This is to certify that project titled ‘Customer satisfaction at PNB ’ is

prepared by Anuja is being Submitted for the partial fulfillment of the
Master’s degree in Business Administration Programme at Maharaja
Surajmal Institute, Guru Gobind Singh Indraprastha University,
Delhi. He has successfully completed the project under my constant
guidance and support.

Signature of the Project Guide

(Dr, Suhasini Parashar) Anuja
BBA 5th sem.
 PREFACE

Summer training is a very important part of an MBA curriculum.

It provides an optimistic iconography for ‘Future’ existence through
which students are able to see the real industrial environment which
gives an opportunity to relate theory with practice.
I undertook two months training programme at Punjab National Bank
(Nangloi) and worked on the project “Customer Satisfaction at PNB “.
This report is the knowledge acquired by me during this period of
training.

FEATURE OF THIS REPORT:

Several features of this report are designed to make it particularly easy

for professionals and students to understand the customer’s perception
about the financial products and services offered by the bank.

STRUCTURE:

An empirical field approach complementing the text is followed

EMPIRICAL APPROACH:
This report presents highly technical subject matter without
complex formulas by using a balance of text and figures. The
approximately 20 figures accompanying the text provide a visual and
intuitive opportunity for understanding the material.

HIGHLIGHTED POINTS:

Important points are highlighted at appropriate places

to stress their importance.

APPENDIXES:

The appendixes are intended to provide quick

reference material or a review of materials needed to
understand the concepts discussed in this report.
 ACKNOWLEDGEMENT

A Project usually falls short of its expectations unless guided by the

right person at the right time. This Project would not have
completed without the direct or indirect help and guidance of
such luminaries in Punjab National bank. They provided us with the
necessary resources and an environment conducive for healthy
learning and training. They provided us with the required amount of
freedom to exercise our skill under their able guidance.
At the outset, I would like to take this opportunity to
gratefully acknowledge the very kind and patient guidance and
encouragement I have received from our Project Guide Mr. Pramod
Kumar Bhatia (Customer Care Officer) and Mr. HARISH SAIGAL
(BRANCH MANAGER) throughout their critical evaluation and
suggestion at every stage of the Project, this report could never have
reached its present form.

I would be failing in my duties if I forget to mention the name of Dr.

Suhasini Parashar (Project Guide, msi) for her unconditional support
during the course of the project. I would like to extend my thanks to
my college ‘MAHARAJA SURAJMAL INSTITUTE’ for the facilities availed
to me in terms of library work.

Last but not least I would like to thank all the respondents for giving
their precious time and relevant information and experience, I
required, without which the Project would have been incomplete.
Anuja

CHAPTER 1
1.1 INTRODUCTION TO BANKING IN INDIA

The banking section will navigate through all the aspects of the
Banking System in India. It will discuss upon the matters with the birth
of the banking concept in the country to new players adding their
names in the industry in coming few years.

The banker of all banks, Reserve Bank of India (RBI), the Indian Banks
Association (IBA) and top 20 banks like IDBI, HSBC, ICICI, ABN AMRO,
etc. has been well defined under three separate heads with one page
dedicated to each bank.

However, in the introduction part of the entire banking cosmos, the

past has been well explained under three different heads namely:

• History of Banking in India

• Nationalization of Banks in India
• Scheduled Commercial Banks in India

The first deals with the history part since the dawn of banking system
in India. Government took major step in the 1969 to put the banking
sector into systems and it nationalized 14 private banks in the
mentioned year. This has been elaborated in Nationalization Banks in
India. The last but not the least explains about the scheduled and
unscheduled banks in India. Section 42 (6) (a) of RBI Act 1934 lays
down the condition of scheduled commercial banks. The description
along with a list of scheduled commercial banks are given on this page

1.1.1 HISTORY OF BANKING IN INDIA

Without a sound and effective banking system in India it cannot have a

healthy economy. The banking system of India should not only be
hassle free but it should be able to meet new challenges posed by the
technology and any other external and internal factors.

For the past three decades India's banking system has several
outstanding achievements to its credit. The most striking is its
extensive reach. It is no longer confined to only metropolitans or
cosmopolitans in India. In fact, Indian banking system has reached
even to the remote corners of the country. This is one of the main
reasons of India's growth process.
The government's regular policy for Indian bank since 1969 has paid
rich dividends
With the nationalization of 14 major private banks of India.

Not long ago, an account holder had to wait for hours at the bank
counters for getting a draft or for withdrawing his own money. Today,
he has a choice. Gone are days when the most efficient bank
transferred money from one branch to other in two days. Now it is
simple as instant messaging or dials a pizza. Money has become the
order of the day.

The first bank in India, though conservative, was established in 1786.

From 1786 till today, the journey of Indian Banking System can be
segregated into three distinct phases. They are as mentioned below:

• Early phase from 1786 to 1969 of Indian Banks

• Nationalization of Indian Banks and up to 1991 prior to Indian
banking sector Reforms.
• New phase of Indian Banking System with the advent of Indian
Financial

& Banking Sector Reforms after 1991.

To make this write-up more explanatory, I prefix the scenario as Phase

I, Phase II and Phase III.

Phase I

The General Bank of India was set up in the year 1786. Next came
Bank of Hindustan and Bengal Bank. The East India Company
established Bank of Bengal (1809), Bank of Bombay (1840) and Bank
of Madras (1843) as independent units and called it Presidency Banks.
These three banks were amalgamated in 1920 and Imperial Bank of
India was established which started as private shareholders banks,
mostly Europeans shareholders.

In 1865 Allahabad Bank was established and first time exclusively by

Indians, Punjab National Bank Ltd. was set up in 1894 with
headquarters at Lahore. Between 1906 and 1913, Bank of India,
Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and
Bank of Mysore were set up. Reserve Bank of India came in 1935.

During the first phase the growth was very slow and banks also
experienced periodic failures between 1913 and 1948. There were
approximately 1100 banks, mostly small. To streamline the functioning
and activities of commercial banks, the Government of India came up
with The Banking Companies Act, 1949 which was later changed to
Banking Regulation Act 1949 as per amending Act of 1965 (Act No. 23
of 1965). Reserve Bank of India was vested with extensive powers for
the supervision of banking in India as the Central Banking Authority.

During those day’s public has lesser confidence in the banks. As an

aftermath deposit mobilisation was slow. Abreast of it the savings bank
facility provided by the Postal department was comparatively safer.
Moreover, funds were largely given to traders.

Phase II

Government took major steps in this Indian Banking Sector Reform

after independence. In 1955, it nationalized Imperial Bank of India
with extensive banking facilities on a large scale especially in rural and
semi-urban areas. It formed State Bank of India to act as the principal
agent of RBI and to handle banking transactions of the Union and
State Governments all over the country.

Seven banks forming subsidiary of State Bank of India was

nationalized in 1960 on 19th July, 1969, major process of
nationalization was carried out. It was the effort of the then Prime
Minister of India, Mrs. Indira Gandhi. 14 major commercial banks in
the country were nationalized.

Second phase of nationalization Indian Banking Sector Reform was

carried out in 1980 with seven more banks. This step brought 80% of
the banking segment in India under Government ownership.

The following are the steps taken by the Government of India to

Regulate Banking Institutions in the Country:

• 1949: Enactment of Banking Regulation Act.

• 1955: Nationalization of State Bank of India.
• 1959: Nationalization of SBI subsidiaries.
• 1961: Insurance cover extended to deposits.
• 1969: Nationalization of 14 major banks.
• 1971: Creation of credit guarantee corporation.
• 1975: Creation of regional rural banks.
• 1980: Nationalization of seven banks with deposits over 200
crore.
After the nationalization of banks, the branches of the public sector
bank India rose to approximately 800% in deposits and advances took
a huge jump by 11,000%.

Banking in the sunshine of Government ownership gave the public

implicit faith and immense confidence about the sustainability of these
institutions.

Phase III

this phase has introduced many more products and facilities in the
banking sector in its reforms measure. In 1991, under the
chairmanship of M Narasimham, a committee was set up by his name
which worked for the liberalisation of banking practices.

The country is flooded with foreign banks and their ATM stations.
Efforts are being put to give a satisfactory service to customers. Phone
banking and net banking is introduced. The entire system became
more convenient and swift. Time is given more importance than
money.

The financial system of India has shown a great deal of resilience. It is

sheltered from any crisis triggered by any external macroeconomics
shock as other East Asian Countries suffered. This is all due to a
flexible exchange rate regime, the foreign reserves are high, the capital
account is not yet fully convertible, and banks and their customers
have limited foreign exchange exposure.

1.1.2 SCHEDULED COMMERCIAL BANKS IN INDIA

The commercial banking structure in India consists of:

• Scheduled Commercial Banks in India

• Unscheduled Banks in India

Scheduled Banks in India constitute those banks which have been

included in the Second Schedule of Reserve Bank of India (RBI) Act,
1934. RBI in turn includes only those banks in this schedule which
satisfy the criteria laid down vide section 42 (6) (a) of the Act.

As on 30th June, 1999, there were 300 scheduled banks in India

having a total network of 64,918 branches. The scheduled commercial
banks in India comprise of State bank of India and its associates (8),
nationalized banks (19), foreign banks (45), private sector banks (32),
co-operative banks and regional rural banks.

"Scheduled banks in India" means the State Bank of India constituted

under the State Bank of India Act, 1955 (23 of 1955), a subsidiary
bank as defined in the State Bank of India (Subsidiary Banks) Act,
1959 (38 of 1959), a corresponding new bank constituted under
section 3 of the Banking Companies (Acquisition and Transfer of
Undertakings) Act, 1970 (5 of 1970), or under section 3 of the Banking
Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of
1980), or any other bank being a bank included in the Second
Schedule to the Reserve Bank of India Act, 1934 (2 of 1934), but does
not include a co-operative bank".

"Non-scheduled bank in India" means a banking company as defined in

clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of
1949), which is not a scheduled bank".

The following are the Scheduled Banks in India (Public Sector):

• State Bank of India

• State Bank of Bikaner and Jaipur
• State Bank of Hyderabad
• State Bank of Indore
• State Bank of Mysore
• State Bank of Saurashtra
• State Bank of Travancore
• Andhra Bank
• Allahabad Bank
• Bank of Baroda
• Bank of India
• Bank of Maharashtra
• Canara Bank
• Central Bank of India
• Corporation Bank
• Dena Bank
• Indian Overseas Bank
• Indian Bank
• Oriental Bank of Commerce
• Punjab National Bank
• Punjab and Sind Bank
• Syndicate Bank
 • Union Bank of India
• United Bank of India
• UCO Bank
• Vijaya Bank

The following are the Scheduled Banks in India (Private

Sector):

• ING Vysya Bank Ltd

• Axis Bank Ltd
• Indusind Bank Ltd
• ICICI Bank Ltd
• South Indian Bank
• HDFC Bank Ltd
• Centurion Bank Ltd
• Bank of Punjab Ltd
• IDBI Bank Ltd

The following are the Scheduled Foreign Banks in India:

• American Express Bank Ltd.

• ANZ Gridlays Bank Plc.
• Bank of America NT & SA
• Bank of Tokyo Ltd.
• Banquc Nationale de Paris
• Barclays Bank Plc
• Citi Bank N.C.
• Deutsche Bank A.G.
• Hongkong and Shanghai Banking Corporation
• Standard Chartered Bank.
• The Chase Manhattan Bank Ltd.
• Dresdner Bank AG.
1.1.3 BANKING SERVICES IN INDIA

With years, banks are also adding services to their customers. The
Indian banking industry is passing through a phase of customers
market. The customers have more choices in choosing their banks. A
competition has been established within the banks operating in India.

With stiff competition and advancement of technology, the services

provided by banks have become more easy and convenient. The past
days are witness to an hour wait before withdrawing cash from
accounts or a cheque from north of the country being cleared in one
month in the south.

This section of banking deals with the latest discovery in the banking
instruments along with the polished version of their old systems.

BANK ACCOUNT

The most common and first service of the banking sector. There are
different types of bank account in Indian banking sector. The bank
accounts are as follows:

• Bank Savings Account - Bank Savings Account can be opened for

eligible person / persons and certain organizations / agencies (as
advised by Reserve Bank of India (RBI) from time to time)

• Bank Current Account - Bank Current Account can be opened by

individuals / partnership firms / Private and Public Limited
Companies / HUFs / Specified Associates / Societies / Trusts, etc.

• Bank Term Deposits Account - Bank Term Deposits Account can

be opened by individuals / partnership firms / Private and Public
Limited Companies / HUFs/ Specified Associates / Societies /
Trusts, etc.

• Bank Account Online - With the advancement of technology, the

major banks in the public and private sector has faciliated their
customer to open bank account online. Bank account online is
registered through a PC with an internet connection. The advent
of bank account online has saved both the cost of operation for
banks as well as the time taken in opening an account.
PLASTIC MONEY

Credit cards in India are gaining ground. A number of banks in India

are encouraging people to use credit card. The concept of credit card
was used in 1950 with the launch of charge cards in USA by Diners
Club and American Express. Credit card however became more popular
with use of magnetic strip in 1970.

Credit card in India became popular with the introduction of foreign

banks in the country.

Credit cards are financial instruments, which can be used more than
once to borrow money or buy products and services on credit.
Basically banks, retail stores and other businesses issue these.

LOANS

Banks in India with the way of development have become easy to

apply in loan market. The following loans are given by almost all the
banks in the country:

• Personal Loan
• Car Loan or Auto Loan
• Loan against Shares
• Home Loan
• Education Loan or Student Loan

In Personal Loan, one can get a sanctioned loan amount between Rs

25,000 to 10, 00,000 depending upon the profile of person applying
for the loan. SBI, ICICI, HDFC, HSBC are some of the leading banks
which deals in Personal Loan.

Almost all the banks have jumped into the market of car loan which is
also sometimes termed as auto loan. It is one of the fast moving financial
products of banks. Car loan / auto loan are sanctioned to the extent of
85% upon the ex-showroom price of the car with some simple paper
works and a small amount of processing fee.

Loan against shares is very easy to get because liquid guarantee is

involved in it.

Home loan is the latest craze in the banking sector with the
development of the infrastructure. Now people are moving to township
outside the city. More number of townships is coming up to meet the
demand of 'house for all'. The RBI has also liberalised the interest rates
of home loan in order to match the repayment capability of even
middle class people. Almost all banks are dealing in home loan. Again
SBI, ICICI, HDFC, HSBC are leading.

The educational loan, rather to be termed as student loan, is a good

banking product for the mass. Students with certain academic
brilliance, studying at recognised colleges/universities in India and
abroad are generally given education loan / student loan so as to meet
the expenses on tuition fee/ maintenance cost/books and other
equipment.

MONEY TRANSFER

Beside lending and depositing money, banks also carry money from
one corner of the globe to another. This act of banks is known as
transfer of money. This activity is termed as remittance business.
Banks generally issue Demand Drafts, Banker's Cheques, Money
Orders or other such instruments for transferring the money. This is a
type of Telegraphic Transfer or Tele Cash Orders.

It has been only a couple of years that banks have jumped into the
money transfer businesses in India. The international money transfer
market grew 9.3% from 2003 to 2004 i.e. from US$213 bn. to US$233
bn. in 2004. Economists say that the market of money transfer will
further grow at a cumulative 12.1% average growth rate through
2009.
1.2 FUTURE OF BANKING IN INDIA

A healthy banking system is essential for any economy striving to

achieve good growth and yet remain stable in an increasingly global
business environment. The Indian banking system has witnessed a
series of reforms in the past, like deregulation of interest rates,
dilution of government stake in PSBs, and increased participation of
private sector banks. It has also undergone rapid changes, reflecting a
number of underlying developments. This trend has created new
competitive threats as well as new opportunities. This paper aims to
foresee major future banking trends, based on these past and current
movements in the market.

Given the competitive market, banking will (and to a great extent

already has) become a process of choice and convenience. The future
of banking would be in terms of integration. This is already becoming a
reality with new-age banks such as YES Bank, and others too adopting
a single-PIN. Geography will no longer be an inhibitor. Technology will
prove to be the differentiator in the short-term but the dynamic
environment will soon lead to its saturation and what will ultimately be
the key to success will be a better relationship management.

1.2.1 OVERVIEW

If one were to say that the future of banking in India is bright, it would
be a gross understatement. With the growing competition and
convergence of services, the customers (you and I) stand only to
benefit more to say the least. At the same time, emergence of a
multitude of complex financial instruments is foreseen in the near
future (the trend is visible in the current scenario too) which is bound
to confuse the customer more than ever unless she spends hours
(maybe days) to understand the same. Hence, I see a growing trend
towards the importance of relationship managers. The success (or
failure) of any bank would depend not only on tapping the untapped
customer base (from other departments of the same bank, customers
of related similar institutions or those of the competitors) but also on
the effectiveness in retaining the existing base.

India has witness to a sea change in the way banking is done in the
past more than two decades. Since 1991, the Reserve Bank of India
(RBI) took steps to reform the Indian banking system at a measured
pace so that growth could be achieved without exposure to any macro-
environment and systemic risks. Some of these initiatives were
deregulation of interest rates, dilution of the government stake in
public sector banks (PSBs), guidelines being issued for risk
management, asset classification, and provisioning. Technology has
made tremendous impact in banking. ‘Anywhere banking’ and
‘Anytime banking’ have become a reality. The financial sector now
operates in a more competitive environment than before and
intermediates relatively large volume of international financial flows. In
the wake of greater financial deregulation and global financial
integration, the biggest challenge before the regulators is of avoiding
instability in the financial system.

1.2.2 RISK MANAGEMENT

The future of banking will undoubtedly rest on risk management

dynamics. Only those banks that have efficient risk management
system will survive in the market in the long run. The effective
management of credit risk is a critical component of comprehensive
risk management essential for long-term success of a banking
institution.

Although capital serves the purpose of meeting unexpected losses,

capital is not a substitute for inadequate decontrol or risk management
systems. Coming years will witness banks striving to create sound
internal control or risk management processes.
With the focus on regulation and risk management in the Basel II
framework gaining prominence, the post-Basel II era will belong to the
banks that manage their risks effectively. The banks with proper risk
management systems would not only gain competitive advantage by
way of lower regulatory capital charge, but would also add value to the
shareholders and other stakeholders by properly pricing their services,
adequate provisioning and maintaining a robust financial structure.

‘The future belongs to bigger banks alone, as well as to those which

have minimized their risks considerably.’
 CHAPTER 2

2.1 INTRODUCTION
Punjab National Bank of India, the first Indian bank started only
with Indian capital, was nationalized in July 1969 and currently the
bank has become a front-line banking institution in India with 4525
Offices including 432 Extension Counters. The corporate office of the
bank is at New Delhi. Punjab National Bank of India has set up
representative offices at Almaty (Kazakhistan), Shanghai (China) and
in London and a full fledged Branch in Kabul (Afghanistan).

Punjab National Bank with 4497 offices and the largest nationalized
bank is serving its 3.5 crore customers with the following wide variety
of banking services:

• Corporate banking
• Personal banking
• Industrial finance
• Agricultural finance
• Financing of trade
• International banking

Punjab National Bank has been ranked 38th amongst top 500
companies by The Economic Times. PNB has earned 9th position
among top 50 trusted brands in India.

Punjab National Bank India maintains relationship with more than 200
leading international banks world wide. PNB India has Rupee Drawing
Arrangements with 15 exchange companies in UAE and 1 in Singapore.

2.1.1 HISTORY OF THE BANK

Punjab National Bank (PNB) was registered on May 19, 1894 under
the Indian Companies Act with its office in Anarkali Bazaar Lahore. The
Bank is the second largest government-owned commercial bank in
India with about 4,500 branches across 764 cities. It serves over 37
million customers. The bank has been ranked 248th biggest bank in
the world by Bankers Almanac, London. The bank's total assets for
financial year 2007 were about US$60 billion. PNB has a banking
subsidiary in the UK, as well as branches in Hong Kong and Kabul, and
representative offices in Almaty, Dubai, Oslo, and Shanghai.
• 1895: PNB commenced its operations in Lahore. PNB has the
distinction of being the first Indian bank to have been started
solely with Indian capital that has survived to the present. (The
first entirely Indian bank, the Ouch Commercial Bank, was
established in 1881 in Faizabad, but failed in 1958.) PNB's
founders included several leaders of the Swadeshi movement
such as Dyal Singh Majithia and Lala HarKishen Lal,[1] Lala
Lalchand, Shri Kali Prosanna Roy, Shri E.C. Jessawala, Shri
Prabhu Dayal, Bakshi Jaishi Ram, and Lala Dholan Dass. Lala
Lajpat Rai was actively associated with the management of the
Bank in its early years.
• 1904: PNB established branches in Karachi and Peshawar.
• 1940: PNB absorbed Bhagwan Dass Bank, a scheduled bank
located in Delhi circle.
• 1947: Partition of India and Pakistan at Independence. PNB lost
its premises in Lahore, but continued to operate in Pakistan.
• 1951: PNB acquired the 39 branches of Bharat Bank (est. 1942);
Bharat Bank became Bharat Nidhi Ltd.
• 1961: PNB acquired Universal Bank of India.
• 1963: The Government of Burma nationalized PNB's branch in
Rangoon (Yangon).
• September 1965: After the Indo-Pak war the government of
Pakistan seized all the offices in Pakistan of Indian banks,
including PNB's head office, which may have moved to Karachi.
PNB also had one or more branches in East Pakistan
(Bangladesh).
• 1960s: PNB amalgamated Indo Commercial Bank (est. 1933) in
a rescue.
• 1969: The Government of India (GOI) nationalized PNB and 13
other major commercial banks, on July 19, 1969.
• 1976 or 1978: PNB opened a branch in London.
• 1986 The Reserve Bank of India required PNB to transfer its
London branch to State Bank of India after the branch was
involved in a fraud scandal.
• 1986: PNB acquired Hindustan Commercial Bank (est. 1943) in a
rescue. The acquisition added Hindustan's 142 branches to PNB's
network.
• 1993: PNB acquired New Bank of India, which the GOI had
nationalized in 1980.
• 1998: PNB set up a representative office in Almaty, Kazakhstan.
• 2003: PNB took over Nedungadi Bank, the oldest private sector
bank in Kerala. Rao Bahadur T.M. Appu Nedungadi, author of
Kundalatha, one of the earliest novels in Malayalam, had
 established the bank in 1899. It was incorporated in 1913, and
in 1965 had acquired selected assets and deposits of the
Coimbatore National Bank. At the time of the merger with PNB,
Nedungadi Bank's shares had zero value, with the result that its
shareholders received no payment for their shares.

PNB also opened a representative office in London.

• 2004: PNB established a branch in Kabul, Afghanistan.

PNB also opened a representative office in Shanghai.

PNB established an alliance with Everest Bank in Nepal that
permits migrants to transfer funds easily between India and
Everest Bank's 12 branches in Nepal.

• 2005: PNB opened a representative office in Dubai.

• 2007: PNB established PNBIL - Punjab National Bank
(International) - in the UK, with two offices, one in London, and
one in South Hall. Since then it has opened a third branch in
Leicester, and is planning a fourth in Birmingham. Gatin Gupta
became Chairmen of Punjab National Bank.
• 2008: PNB opened a branch in Hong Kong.
• 2009: PNB opened a representative office in Oslo, Norway.

2.1.2 ACHIEVEMENTS

• Punjab National Bank announced its Q1FY2010 results on 29

July 2009, delivering 62% y-o-y growth in net profits to
Rs832 crore (Rs512cr), substantially ahead of expectations on
account of large treasury gains, apart from healthy operating
performance.

• While the bank’s deposit growth was reasonably robust at

4.4% sequentially and 26.5% y-o-y, unlike the peers its
growth in advances also remained strong at 38% y-o-y.

• In spite of being at the forefront of PLR cuts, the bank posted

a healthy growth in Net Interest Income (NII) of 29% y-o-y.
 • Other Income surged 113% y-o-y, driven by strong treasury
gains of Rs355 crore during the quarter in line with industry
trends, even as Fee income was also robust at 45% y-o-y, on
the back of strong balance sheet growth.

• Operating expenses were higher than expected on account of

Rs150 crore of provisions for imminent wage hikes.

• Gross and Net NPA ratios remained stable sequentially at

1.8% and 0.2%, with the bank not adopting the guidelines of
treating floating provisions as part of tier 2 capital instead of
adjusting against NPAs on express permission from the RBI.

2.2 VISION AND MISSION

Vision

• To evolve and position the bank as a world class, progressive,

cost effective and customer friendly institution providing
comprehensive financial and related services.

• Integrating frontiers of technology and serving various

segments of society especially weaker section.

• Commited to excellence in serving the public and also

excelling in corporate values

Mission

• To provide excellent professional services and improve its

position as a leader in financial and related services.
 • Build and maintain a team of motivated workforce with high
work ethos.

• Use latest technology aimed at customer satisfaction and act

as an effective catalyst for socio economic development.

2.3 VALUES AND ETHICS

• Bonding and Integrity

• Ethical conduct

• Periodic disclosure

• Confidentiality and fair dealing

• Compliance with rules and regulations

2.4 PRODUCTS AND SERVICES

Savings Fund Account - Total Freedom Salary Account, PNB Prudent

Sweep, PNB Vidyarthi SF Account, PNB Mitra SF
Account Current Account - PNB Vaibhav, PNB Gaurav, PNB Smart
Roamer

Fixed Deposit Schemes - Spectrum Fixed Deposit Scheme, Anupam

Account, Mahabachat Schemes, Multi Benefit Deposit

Scheme Credit Schemes - Flexible Housing Loan, Car Finance,

Personal Loan, Credit Cards

Social Banking - Mahila Udyam Nidhi Scheme, Krishi Card, PNB

Farmers Welfare Trust

Corporate Banking - Gold Card scheme for exporters, EXIM finance

Business Sector - PNB Karigar credit card, PNB Kushal Udhami, PNB
Pragati Udhami, PNB Vikas Udhami

Apart from these, and the PNB also offers locker facilities, senior
citizens schemes, PPF schemes and various E-services.

2.5 AWARDS AND DISTINCTIONS

• Ranked among top 50 companies by the leading financial daily,

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

HEAD OFFICE
7, BHIKAJI CAMA PLACE, NEWDELHI-66

ZONAL OFFICES (25)

REGIONAL OFFICES (48)

BRANCHES (4525)
SWOT ANALYSIS

Strength

Weakness

Opportunities

Threats
Let’s analyze SWOT in order to know as to where the company stands

2.7 SWOT ANALYSIS

STRENGTH

 Wide network
 Large number of customers
 Fast adaptability to technology
 Brand image

WEAKNESS

 Casual behaviour
 Corruption and red tapism
 Slow decision making due to large hierarchy
 High gross NPA
 OPPORTUNITIES

 Home to home banking services

 Diversification towards other fields
 Globalization

THREATS

 Stiff competition from SBI and other private players.

CHAPTER 3
3.1 CUSTOMER SATISFACTION

Customer satisfaction refers to the extent to which customers are

happy with the products and services provided by a business.

Customer satisfaction levels can be measured using survey techniques

and questionnaires

DEFINITIONS:
Definition 1: Customer satisfaction is equivalent to making sure that
product and service performance meets customer expectations.

Definition 2: Customer satisfaction is the perception of the customer

that the outcome of a business transaction is equal to or greater than
his/her expectation.

Definition 3: Customer satisfaction occurs when acquisition of

products and/or services provides a minimum negative departure from
expectations when compared with other acquisitions.

Gaining high levels of customer satisfaction is very important to

a business because satisfaction customers are most likely to be loyal
and to make repeat orders and to use a wide range of services offered
by a business
There are many factors which lead in high levels of customer
satisfaction including.
Products and services which are customer focused and hence provide
high levels of value for money.
 What is clear about customer satisfaction is that customers are
most likely to appreciate the goods and services that they buy if they
are made to feel special. This occurs when they feel that the products
and services that they buy have been specially produced for them or
for people like them.

3.2 BENEFITS OF CUSTOMER SATISFACTION

The importance of customer satisfaction and support is

increasingly becoming a vital business issue as organization realize the
benefits of Customer Relationship Management (CRM) for providing
effective customer service. Professionals working within customer-
focused business or those running call centers or help desks, need to
keep informed about the latest customer satisfaction techniques for
running a valuable customer service function. From small customer
service departments to large call centers, the importance of developing
a valued relationship with customers using CRM is essential to support
customer and long-term business growth.

What Do Customers Want?

Before we begin to create tools to measure the level of satisfaction, it
is important to develop a clear understanding of what exactly the
customer wants. We need to know what our customers expect from
the products and services we provide.
Customer expectations have two types –
 Expressed
 Implied
Expressed Customer Expectations are those requirements that are
written down n the contract and agreed upon by both parties for
example, product specifications and delivery requirements. Supplier’s
performance against these requirements is most of the items directly
measurable.

Implied Customer Expectations are not written or spoken but are the
ones the customer would ‘expect’ the supplier to meet nevertheless.
For example, a customer would expect the service representative who
calls on him to be knowledgeable and competent to solve a problem on
the spot.

There are many reasons why customer expectations are likely to

change overtime. Process improvements, advent of new technology,
changes in customer’s priorities, improved quality of service provided
by competitors are just a few examples.
The customer is always right. Supplier’s job is to provide the customer
what he/she wants, when he/she wants it. Customer satisfaction is
customer’s perception that a supplier has met or exceeded their
expectations.

3.3 WHAT CONSTITUTES SATISFACTION?

We cannot create customer satisfaction just by meeting

customer’s requirements fully because these have to be met in any
case. However failing short is certain to create dissatisfaction
Major Attributes of customer satisfaction in banking industry
can be summarized as:
  Product quality
 Premium Outflow
 Return on Investment
 Services
 Responsiveness and ability to resolve complaints and reject
reports.
 Overall communication, accessibility and attitude.

WHAT ARE THE TOOLS?

Customer expectations can be identified using various methods such
as:
 Periodic contract reviews
 Market research
 Telephonic interviews
 Personal visits
 Warranty records
 Informal discussions
 Satisfaction surveys

Depending upon the customer base and available resources, we can

choose a method that is most effective in measuring the customer’s
perceptions. The purpose of the exercise is to identify priorities for
improvements. We must develop a method or combination of methods
that helps to continually improve service.
3.4 CUSTOMER SATISFACTION SURVEYS
Formal survey has emerged as by far the best method of
periodically the customer satisfaction. The survey are not marketing
tools but an information—gaining tool. Enough homework needs to be
before embarking on the actual survey. This includes:

 Defining Objectives of the Survey

 Design Survey approach
 Develop questionnaires and forms
 Administer Survey (Email, Telephone or Post)
 Method of compiling data and analyzing the findings
 Format of the report to present the findings

There is no point in asking irrelevant questions on a customer

satisfaction questionnaire. The basic purpose is to find out what we are
doing right or wrong. Where is the scope for improvement, where do
we stand vis-à-vis other suppliers. How we can serve the customer
better?

A customer satisfaction measurement survey should at least

identify the following objectives:
 Importance to customers (Customers priorities)
 Customer’s perception of supplier’s performance
 Your performance relative to customer’s priorities.
 Priorities for improvement
 Survey forms should be easy to fill out with minimum amount of
time and efforts on customer’s part. They should be designed to
actively encourage the customer to complete the questions. Yet they
must provide accurate data should also be sufficiently reliable for
management decision making. This can be achieved by incorporating
objective type questions where customer has to “rate” on scale of say
1 to 10. For repeated surveys, you could provide the rating that was
previously accorded by the customer. This works like a reference point
for the customer.

Space should always be provided for the customers own opinions

this enables them to state any additional requirements or report any
shortcomings that are not covered by the objective questions.

Normally, we deal various personnel at various levels in the

customer’s organization—the buyer, user, receiving inspector, finance
and purchase person etc. surveying a number of respondents for each
customer gives a complete perspective of customer satisfaction. It
may be necessary to device a different questionnaire for each of them.

Respondents must be provided a way to express the importance

they attach to various survey parameters. Respondents should be
asked to give a weighting factor, again on a rating scale of say, 1 to
10, for each requirement. This gives a better indication of relative
importance of each parameter towards overall customer satisfaction
and makes it easier for suppliers to prioritize their action plans by
comparing the performance rating (scores) with importance rating
(weighing).
CHAPTER 4
4.1 CONSUMER RESEARCH IN DIFFERENT DISCIPLINES

A considerable body of literature exists on consumption, consumer

behaviour and consumer decision making process.

Most of the consumer research focused on adopter categories, habits,

attitudes and intentions rather that on actually measuring the
satisfaction level with the service.

4.1.1 CONSUMER SATISFACTION PROCESS

The paramount goal of marketing is to understand the customer and to

influence buying behaviour.

The process can be depicted as follows:-

 Need recognition- realization of the difference between the

desired and the current situation that serves as a trigger for
entire process.

 Search for information.

 Pre purchase alternative evaluation.

 Consumption(utilization of the procured option)

 Post purchase alternative re-evaluation.

 Divestment(disposal of the unconsumed product and it’s

remnants)
 4.2 WAYS FOR MAINTAINING RELATIONS WITH THE
CUTOMERS ADOPTED BY PNB

The ability of the banking industry to achieve the socio-economic

objectives and in the process bringing more and more customers into
its fold will ultimately depend on the satisfaction of the customers. We
have a strong belief that a satisfied customer is the foremost factor in
developing our business.

A need was felt by us at Punjab National Bank that in order to become

more customers friendly the Bank should come out with Charter of its
services for the customers. Citizens' Charter concept was considered
as a base instrument to fill this need and accordingly this document
was prepared. This document was made in consultation with the users
and highlights our Bank's commitments towards the customer
satisfaction, thus ensuring accountability and responsibility amongst its
officials and staff. This Code for customers not only explains our
commitment and responsibilities along with the redressed methods but
also specifies the obligation on the part of customers for healthy
practices in Customer-Banker relationships.

This is not a legal document creating rights and obligations. The Code
has been prepared to promote fair banking practices and to give
information in respect of various activities relating to customer service.

We wish to acknowledge the initiative taken by the Ministry of Finance,

Government of India and Ministry of Administrative Reforms and Public
Grievances for encouraging us to bring out this Code.

We maintain constant consultations with our clientele through various

Seminars, Customer Meets, etc. to evaluate improve and widen the
range of service to customer. However, all our customers are requested
to keep us informed of their experiences about the various services
rendered by the Bank and feel free to comment on this Code. We
intend to bring it out in many Regional Languages in subsequent
years.
COMMON PRACTICES FOLLOWED BY PNB BRANCHES

Display business hours.

Render courteous services.

Attend to all customers present in the banking hall at the close of

business hours.

Provide separate 'Enquiry' or 'May I help you' counter at large

branches.

Offer nomination facility to all deposit accounts (i.e. account opened

in individual capacity) and all safe deposit locker hirers (i.e. individual
hirers).

Display interest rates for various deposit schemes from time to

time.

Notify change in interest rates on advances.

Provide details of various deposit schemes/services of the Bank.

Issue Demand Drafts, Pay Orders, etc.

Display Time-Norms for various banking transactions.

Pay interest for delayed credit of outstation cheques, as advised by

Reserve Bank of India (RBI) from time to time.

Accord immediate credit in respect of outstation and local cheques

upto a specified limit subject to certain conditions, as advised by RBI
from time to time.

Provide complaint/suggestion box in the branch premises.

Display address of Regional/Zonal and Central Offices as well as

Nodal Officer dealing with customer grievances/complaints.
 CHAPTER 5

5.1 STATEMENT OF THE PROBLEM

 This Study will help us to understand the consumer’s satisfaction
about banking services and products. This study will help banks to
understand, how a consumer selects, organizes and interprets the
Quality of service and product offered by banks.
The market is more aware and realistic about investment and returns
from financial products. In this background this study tries to analyze
the customer satisfaction towards banking services in general and PNB
in particular.

5.2 NEED FOR THE STUDY

 The deeper the company understands of consumer’s needs

and satisfaction, the earlier the product or service is
introduced ahead of competition, the greater the expected
contribution margin. Hence the study is very important.

 This study will help companies to customize the service

and product, according to the consumer’s need.

 This study will also help the companies to understand the

experience and expectations of the existing customers.

5.3 SCOPE OF THE STUDY

 This study is limited to the consumers with in New Delhi city. The
study will be able to reveal the preferences, needs, satisfaction of the
customers regarding the banking services, It also help banks to know
whether the existing products or services the are offering are really
satisfying the customers needs.

5.4 OBJECTIVE OF THE STUDY

 To have an insight into the attitudes and behaviors of

customers.
 To find out the differences among perceived service and
expected service.
 To produce an executive service report to upgrade service
characteristics.
 To understand consumer’s preferences.
 To access the degree of satisfaction of the consumers

5.5 REASERCH METHODOLOGY

 A descriptive study tries to discover answers to the questions
who, what, when, where, and, sometimes, how. The researcher
attempts to describe or define a subject, often by creating a profile of
a group of problems, people, or events.
Such studies may involve the collection of data and the creation of a
distribution of the number of times the researcher observes a single
event or characteristic (the research variable), or they may involve
relating the interaction of two or more variables. Organizations that
maintain databases of their employees, customers, and suppliers
already have significant data to conduct descriptive studies using
internal information. Yet many firms that have such data files do not
mine them regularly for the decision-making insight they might
provide.

This descriptive study is popular in business research because of

its versatility across disciplines. In for-profit, not-for-profit and
government organizations, descriptive investigations have a broad
appeal to the administrator and policy analyst for planning,
monitoring, and evaluating. In this context, how questions address
issues such as quantity, cost, efficiency, effectiveness, and adequacy.
Descriptive studies may or may not have the potential for drawing
powerful inferences. A descriptive study, however, does not explain
why an event has occurred or why the variables interact the way they
do.

5.6 SAMPLE METHOD

 Convenience sampling method is used for the survey of this
project. It is a non-probability sample. This is the least reliable design
but normally the cheapest and easiest to conduct .In this method
Researcher have the freedom to choose whomever they find, thus the
name convenience. Example includes informal pools of friends and
neighbours or people responding to a newspaper’s invitation for
readers to state their position on some public issue.

5.6.1 SAMPLE SIZE

Sample size denotes the number of elements selected for the

study. For the present study, 100 respondents were selected at
random. All the 100 respondents were the customers of different
branches of PNB.

5.7 SAMPLING METHOD

A sample is a representative part of the population. In sampling

technique, information is collected only from a representative part of
the universe and the conclusions are drawn on that basis for the entire
universe.

A convenience sampling technique was used to collect data from

the respondents.
5.8 METHOD OF DATA COLLECTION

To know the response, the researcher used questionnaire

method. It has been designed as a primary research instrument.
Questionnaires were distributed to respondents and they were asked
to answer the questions given in the questionnaire.

The questionnaires were used as an instrumentation technique,

because it is an important method of data collection. The success of
the questionnaire method in collecting the information depends largely
on proper drafting. So in the present study questions were arranged
and interconnected logically. The structured questionnaire will reduce
both interviewers and interpreters bias.

Further, coding and analysis was done for each question’s

response to reach into findings, suggestions and finally to the
conclusion about the topic.

5.9 TYPES OF DATA

Every decision poses unique needs for information, and relevant

strategies can be developed based on the information gathered
through research. Research is the systematic objective and exhaustive
search for and study of facts relevant to the problem
Research design means the framework of study that leads to the
collection and analysis of data. It is a conceptual structure with in
which research is conducted. It facilitates smooth sailing of various
research operations to make the research as effective as possible.
PRIMARY DATA

Primary data are those collected by the investigator himself for the
first time and thus they are original in character, they are collected for
a particular purpose.
A well-structured questionnaire was personally administrated to the
selected sample to collect the primary data.

SECONDARY DATA

Secondary data are those, which have already been collected by some
other persons for their purpose and published. Secondary data are
usually in the shape of finished products.

Two types of secondary data were collected for the preparation of the
project work:
Internal Data was generated from company’s brochures, manuals
and annual reports
External Data, on the other hand, was generated from magazines,
research books, intranet and internet (websites).
5.10 LIMITATIONS OF THE STUDY

Although the study was carried out with extreme enthusiasm and
careful planning there are several limitations, which handicapped the
research viz,

1. Time Constraints:
The time stipulated for the project to be completed is less and thus
there are chances that some information might have been left out,
however due care is taken to include all the relevant information
needed.

2. Sample size:
Due to time constraints the sample size was relatively small and would
definitely have been more representative if I had collected information
from more respondents.

3. Accuracy:
It is difficult to know if all the respondents gave accurate information;
some respondents tend to give misleading information.

4. It was difficult to find respondents as they were busy in their

schedule, and collection of data was very difficult. Therefore, the study
had to be carried out based on the availability of respondents.
 CHAPTER 6

TABLE 6.1
SHARE OF DIFFERENT TYPES OF ACCOUNTS
 SL. No. NATURE OF NUMBER OF PERCENTAGE OF
ACCOUNTS RESPONDENTS RESPONDENTS

1. Saving A/Cs 78 78%

2. Current A/Cs 9 9%
3. Fixed Deposits 4 4%
4. Loans 3 3%
5. Others 6 6%
Total 100 100%

Graph - 6.1
Classification based on nature of A/Cs

Saving A/Cs Current A/Cs Fixed Deposits Loans Others

Analysis: Above table shows that 78% respondents have Saving A/Cs, and 9% have
Current A/Cs and rest of the respondents have 13% share of other A/Cs in total (which
includes fixed deposits, loans, and other products)

Interpretation: This means most of the respondents are having Saving A/Cs which
means the bank deposits are enriching as Saving A/Cs share is most.

TABLE 6.2

SATISFACTION OF RESPONDENTS WITH SERVICES OFFERED BY PNB

BRANCH
 SL. No. RESPONSE NUMBER OF PERCENTAGE OF
RESPONDENTS RESPONDENTS
1. Satisfied 89 89%
2. Not satisfied 11 11%
TOTAL 100 100 %

Graph - 6.2
Classification based on satisfaction level of respondents

100 89

No. of
50
respondents
11
0

Satisfied Not satisfied

Analysis: From the above table it could be inferred that 89% of the consumers are
satisfied with the service and quality of products of their bank. Only 11% of consumers
are not satisfied.

Interpretation: Most of the respondents are satisfied with the service offered by PNB.
Presently the bank offers varieties of services and the customers are getting a good rate of
return from their deposits. Customers are getting good service from the bank.

TABLE 6.3

RATINGS OF THE SERVICES OFFERED BY THE RESPONDENT’S LIFE

INSURANCE COMPANY
 NUMBER OF PERCENTAGE OF
SL. No. RATINGS
RESPONDENTS RESPONDENTS
1. EXCELLENT 05 5%
2. VERY GOOD 09 9%
3. GOOD 76 76%
4. AVERAGE 06 6%
5. POOR 04 4%
TOTAL 100 100 %

Graph - 6.3
Classification based on Rating of the service offered by PNB
branches

645 9

76

EXCELLENT VERY GOOD GOOD AVERAGE POOR

Analysis: From this table it could be inferred that 76% of the consumers have rated
service offered as ‘good’, 9% of them have rated them as ‘very good’, and 05% of them
have rated as excellent and average’ while only 4% have rated as ‘poor’
.
Interpretation: Service offered by the bank is improving day by day. Returns consumers
are getting are also attractive. Majority of the customers rates good, very good and
excellent because of the customer service offered by the bank. Banks are providing a
good service to the customers due to increased competition in the market. This may be
the reason for more satisfaction
TABLE 6.4

TABLE SHOWING MOTIVE BEHIND THE SELECTING PNB

SL.NO ATTRIBUTE SCORE RANK

 1. Brand name 56 1
2. Customer service 30 2
3. Interest 12 3
4. Others 2 4

Graph - 6.4
Motive behind the Selecting of PNB

60
56
50
40 30
No. of
30
respondents
20 12
10 2
0
Motives

Brand name Customer service Interest Others

Analysis: This table show the strengths and weaknesses of the brand, and what are the
important criteria or factors on which decision-making is done. From this table we can
infer that consumers give more importance for ‘Brand name’, secondly they prefer
‘satisfaction’, and then ‘returns on investment’.

Interpretation: This purely shows that people are now looking forward for better
customer service in addition to the brand name in which they are investing and the
returns they are getting.

TABLE 6.5

CONSUMERS WILLINGNESS TO RECOMMEND THEIR LIFE INSURANCE

COMPANY TO OTHERS
 SL. No. RESPONSES NUMBER OF PERCENTAGE OF
RESPONDENTS RESPONDENTS
1. Recommended 92 92%
2. Not recommended 08 8%
TOTAL 100 100 %

Graph - 6.5
Classification based on the willingness to recommend PNB
branch services to other banks

recommended Not recommended

Analysis: From this table it can be noted that the majority of consumers (92%) would
like to recommend their bank services to others and only 8% of consumers would not like
to recommend it to others.

Interpretation: Since the competition has increased in the field of benefits and service of
banking. So customers are getting good service, so that they are willing to recommend
their bank services to others.

TABLE 6.6

CONSUMERS WILLINGNESS TO SHIFT THEIR A/Cs TO OTHER BANKS

SL. No. RESPONSES NUMBER OF PERCENTAGE OF

RESPONDENTS RESPONDENTS
1. Shift 8 8%
 2. Doesn’t shift 92 92%
TOTAL 100 100 %

Graph - 6.6
Classification based on the willingness of respondents to shift
their A/Cs to other banks

Shift Doesn't shift

Analysis: From this table it can be noted that the majority of consumers (92%) doesn’t
like to shift their A/Cs to other banks.

Interpretation: The reason can be increasing customer satisfaction and quality services
offered by the bank.

CHAPTER 7
SUGGESTIONS & RECOMMENDATIONS
With regard to banking products and services, consumers respond at
different rates, depending on the consumer’s characteristics. Hence I
PNB should try to bring their new product and services to the attention
of potential early adopters.

 Due to the intense competition in the financial market, PNB

should adopt better strategies to attract more customers.

 Return on investment company reputation and premium outflow

are most preferred attributes that are expected by the
respondents. Hence greater focus should be given to these
attributes.

 PNB should adopt effective promotional strategies to increase the

awareness level among the consumers.

 PNB should ask for their consumer feedback to know whether the
consumers are really satisfied or dissatisfied with the service and
product of the bank. If they are dissatisfied, then the reasons for
dissatisfaction should be found out and should be corrected in
future.

 The PNB brand name has earned a lot of goodwill and enjoys
high brand equity. As there is intense competition, PNB should
work hard to maintain its position and offer better service and
products to consumers.
 The bank should try to increase the Brand image through
performance and service then, only the customers will be
satisfied.

 Majority of the people find banking important in their life, so PNB

should employ the strategies to convert the want in to need
which will enrich their business.

CHAPTER 8
CONCLUSION:
 The project entitled “A STUDY TO UNDERSTAND THE
CUSTOMER SATISFACTION AT PNB” has helped me in studying
satisfaction about services and products offered to consumers.

Since the opening up of the banking sector, private banks are in

the fray each one trying to cover more market share than the other.

Yet, PNB is far behind SBI. PNB must also be alert what with
Private Banks (ICICI, HDFC) breathing down its neck.

I am sure the bank will find my findings relevant and I sincerely

hope it uses my suggestions enlisted, which I hope will take them
miles ahead of competition.

In short, I would like to say that the very act of the concerned
management at PNB in giving me the job of critically examining
consumer satisfaction towards financial products and services of the
company is a step in their continual mission of making all round
improvements as a means of progress.

I am sure the bank has a very bright future to look forward to

and will be a trailblazer in its own right.