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
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 counterparts such as high share of household savings in deposits (57.4% of total deposits), adequate capitalisation, stricter regulations and lower leverage makes them less prone to financial crisis, as was seen in the western world in mid FY09. The Scheduled Commercial Banks (SCBs) in India have shown an impressive growth from FY04 to the mid of FY09. Total deposits, advances and net profit grew at CAGR of 19.6%, 27.4% and 20.2% respectively from FY03 to FY08. Banking sector recorded credit growth of 33.3% in FY05 which was highest in last 2 and half decades and credit growth in excess of 30% for three consecutive years from FY04 to FY07, which is best in the banking industry so far. Increase in economic activity and robust primary and secondary markets during this period have helped the banks to garner larger increase in their fee based incomes. With in the group of banks, foreign and private sector banks grew at higher rate than the industry from FY03 to FY08 primarily because of lower base effect and rapid expansion undertaken by these banks. In FY09, overall growth in credit and deposits was led by PSBs. However, growth of private and foreign banks was significantly lower in FY09 due to their high exposure to stressed sectors and problem at parent level for foreign banks. The government had announced its intend to retain majority stake in public sector banks in its budget early this month, reversing its earlier plans of reducing the shareholding to 33 percent while retaining management control. In fiscal 2009, the government infused 16.5 billion rupees of capital into three public sector banks and is expected to infuse 21.5 billion rupees more by the end of September, Crisil said in a statement. Public banks still dominate the banking systems serving the majority of people in developing countries, despite the rash of privatizations of the last 10 years and including the pickup in the last five years. The overall stance of RBIs monetary and credit policy during the...
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