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Analysis of Financial Position of Punjab National Bank

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Analysis of Financial Position of Punjab National Bank
EXECUTIVE SUMMARY

Punjab National Bank was recognized by Dun & Bradstreet (2009) as the “ Top Public Sector Bank” under t including the category of “Priority Sector lending including Financial Inclusion.” Bank has also been conferred with the award by the institute for Development and Research in Banking Technology (IDRBT, 2008) for use of technology financial inclusion.
Bank constantly innovates, reorients strategies and realigns business processes with advanced technology to serve the customers better and earn strong brand salience, loyalty and recall. Total income of Bank increased by 36.8% to reach a level of Rs 22246 crore. Operating profit of Bank rose by 43.4% to Rs 5,744 crore. Total business of PNB stood at Rs 3,64,463 crore (y-o-y increase of 27.5%). Total income of Bank increased by 36.8% to reach a level of Rs 22,246 crore.
The Board Of Directors has recommended a Dividend of 200 % for the year 2008-09. Among Nationalized Bank, PNB has the largest network of 4668 offices, including 238 extension counters. All branches offer the Centralised Banking Solution, along with a variety of financial products catering to different market segments.
PNB has always looked at technology as a key facilitator to provide better customer service and ensured that its ‘IT strategy’ follows the ‘Business strategy’ so as to arrive at “Best Fit”. The bank has made rapid strides in this direction

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INTRODUCTION

INTRODUCTION ABOUT INDIAN BANKING SECTOR

Indian Banking sector is dominated by Public sector banks (PSBs) which accounted for 72.6% of total advances for all SCBs as on 31st March 2008. PSBs have rapidly expanded their foot prints after nationalization of banks in India in 1969 and further in 1980. Although there is a restrictive entry/expansion for private and foreign banks in India, these banks have increased their presence and business over last 5 years.
Peculiar characteristic of Indian banks unlike their western


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Aivazian, A. Demirguc-Kunt and V. Maksimovic (2001). Capital Structures in Developing Countries, Journal of Finance, 56, 87-130. * Chakravarty, S (1987). Development Planning: The Indian Experience, Oxford University Press; New Delhi. * Demirguc-Kunt, A and R.Levine (1999). ‘Bank-based and Market-based Financial Systems: Cross- Country Comparisons’, World Bank Policy Research Working Paper No.2143, The World Bank: Washington D.C. * Economist (2003) * Goel, B.B (2001). ‘Re-inventing Cooperatives – A 21st Century Vision’, Deep & Deep Publications Pvt. Ltd., New Delhi. * Goodhart, C (1995). The Central Bank and the Financial System, McMillan Press: London. * Gordon, J and Gupta, P (2003). ‘Portfolio Flows into India: Do Domestic Fundamentals Matter ?’, IMF Working Paper No. 20, IMF: Washington D.C. * Government of India (1991). Report of the Committee on the Financial System (Chairman: Shri M.Narasimham), Reserve Bank of India, Mumbai. * Government of India (1998). 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(2002). ‘Cooperative Banks in India: Strengthening through Corporate Governance’,Speech delivered the National Convention of Urban Cooperative Banks, Mumbai. * Levine, R and Zervos, S (1996). ‘Stock Market Development and Long-term Growth’, World Bank Economic Review, 10, pp. * Mathew, P.C (2001). ‘Paradigm shift in Human Resource Strategies for Cooperative Competitiveness’ in B.B.Goyal (ed.), Re-inventing Cooperatives – A 21st Century Vision, Deep & Deep Publications Pvt. Ltd., New Delhi. * McKinnon, R (1973). Money and Capital in Economic Development, The Brookings Institution: Washington, D.C. * Misra, B.M (1997). ‘Fifty Years of the Indian Capital Market: 1947-97’, Reserve Bank of India Occasional Papers, Vol. 18, Nos. 2 & 3, July & September. * Nagaishi, M (1999). ‘Stock Market Development and Economic Growth: Dubious Relationship’, Economic and Political Weekly, Vol. XXXIV, July. * National Stock Exchange of India Limited (2002). Indian Securities Market: A Review, Vol.-V. * Nayak, P.J (1995). ‘Reform of Indian Financial System ', in S.N.Zahid (ed.) Financial Sector Development in Asia, Asian Development Bank, Manila. * North, D. (1991). ‘Institutions’, Journal of Economic Perspectives, 5, pp.97-112. * Patil, R.H.(2000).’Broadbasing and Deepening the Bond Market in India’, Financial Institutional Center, Paper No. 01-32. * Rangarajan, C. (1998), Banking Sector Reforms: Rationale and Relevance, SICOM Silver Jubilee Memorial Lecture, Mumbai. * Reddy, Y.V. (1999). ‘Financial Sector Reform: Review and Prospects’, RBI Bulletin, January, 33-93. * Reddy, Y.V. (2000). Monetary and Financial Sector Reforms in India: A Central Banker’s Perspective, UBSPD. * Reddy, Y V (2002) Lectures on Economic and Financial Sector Reforms in India, Oxford University Press: India. * Reserve Bank of India (1954). All-India Debt and Investment Survey, RBI: Mumbai. * Reserve Bank of India (1971). Report of the Study Group on Non-Banking Financial Intermediaries, RBI: Mumbai. * Reserve Bank of India (1978). Chart Book on Financial and Economic Indicators, RBI: Mumbai. * Sachs, J.D (2003). ‘Institutions Don’t Rule: A Refutation of Institutional Fundamentalism’, NBER Working Paper No.9490 (Cambridge, Massachusetts). * Shah, A. and S. Thomas (1997). ‘Securities Markets – Towards Greater Efficiency’, India Development Report, Oxford University Press: New Delhi. * Shaw, E.S (1973). Financial Deepening in Economic Development, Oxford University Press, New York. * Singh, A., (1995), "Corporate Financial Patterns in Industrializing Economies", Technical Paper,International Finance Corporation, Washington, D.C. * Stiglitz, J.E. (2002), Globalisation and its Discontents, Allen Lane: Penguin Books, USA. * World Bank (2002). World Development Report: Building Institutions for Markets, The World Bank, Washington, D.C. * World Bank (2003). World Development Report: Sustainable Development in a Dynamic World: Transforming Institutions, Growth and the Quality of Life, Washington: The World Bank, Washington, D.C.
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