Pnb Project On An Evaluation Of Credit Flow By Pnb

CONTENTS TITLE PREFACE ACKNOWLEDGEMENT Chapter: 1 INTRODUCTION  Backdrops  Topic of the study  Objective of the study  Methodology  Plan of the study  Limitations of the study Chapter: 2 CONCEPTUAL EXPOSITION OF THE TOPIC: LENDING POLICY  Different facts of lending policy  Nationalization               Chapter: 3

Objective of the Nationalization Modest banking Policy Lending Policy- A tool of Banking Policy Management of Loans in Commercial Banks Characteristics of Bank Loans cardinal Principal of sound bank Lending Formulating loan policy in a commercial bank Factors influencing loan policy Contents of loan policy Evaluating credit Applicant Supervision of loans Organization of Bank lending Schemes of Bank finance to different sectors Maximum permissible bank finance

PUNJAB NATIONAL BANK – A BRIEF PROFILE  Genesis  Vision  Mission  Performance of the bank regarding credit & others  PNB credit schemes  Executive position in the PNB  Organizational structure of the PNB-3939 Bettiah Branch  Milestones

Chapter: 4 LENDING POLICY OF PNB: A STUDY OF 3939 BRANCH

Lending Portfolio of PNB: General lending portfolio of PNB Branch (3939) Chapter: 5 Findings and Suggestions Bibliography PREFACE Financial institution with their role as a mobilizer of the community’s saving and a channelizer of these savings into productive outlets play a crucial role in the economic development of the country. The important of the financial institutions can hardly be over emphasized in the growing internationalization on Indian business at very rapid pace in recent few years following the government policy of economic liberalization and globalization coupled with depending technology and fierce competition. In, fact financial institutions are categorized broadly into two groups Money market and Capital market. Capital market comprises institutions which grant long-term loans and invest in securities in different forms for different industrial purposes. Money market is composed of commercial and other types of banks and agencies catering to short-term capital requirements in different sectors of the economy. After nationalization of commercial banks in 1969 revealed the suitable definition of commercial banks. “Acceptance of deposit for the purpose of lending”. In this way, lending is one of the two principle functions of commercial banks not only because of their social obligation to cater to the credit needs but also because lending is the most profitable for the interest rates realized on business loans. Loans are provided in a variety of ways to different sections of the economy according to the form security, maturity, method of repayment origin and purpose. An understanding of different winds of loans would provide an insight into the lending activities of banks.

CHAPTER - 1 INTRODUCTION

INTRODUNCTION Lending is the most profitable business of any commercial bank. The main functions of commercial bank are to accept deposits and grant loans. In the Balance Sheet of the commercial bank deposits are at Liabilities side and the loans and Advances are at Assets side. The deposit in any form taken by the bank from the customer is treated as the liability of the bank and similar as that the loan and advances lent to the customer is treated as assets of the bank. The term “Evaluation” arises at the time of lending of loan. When bank goes to finance any proposal, it wants to know whether the proposal is economically and technically viable or not. It is also required to be tested whether the party (who will take the loan) is able to repay the loan amount with interest component at stipulated time period or not. Thus the “Evaluation of lending policy” refers to the measurement of credibility of the loan repayment. It helps the bank to mobilize their funds in prudent manner. In the current scenario, most of the bank loans are face it the heat of recession and they go bad and become NPAs (Non-Performing Assets). Repayment of the loan in form of EMI (Equated Monthly Installment) is not take place. To overcome from this situation bank has decided restructuring of the loans by converting the working capital loan to term loan and not to take interest for the one year/ two year and make another loan account with the same FITL (Funding Interest to Term Loan) and so on. On basis of Evaluation a banker can analyzes the all aspects like economics technical, managerial, market risk, financial risk, business risk, etc of the related proposal. It helps the bank to be more competitive in the market and get the reward of the prudent decision of lending as a fair interest. To know how to determine the “Evaluation of Lending Policy” for the purpose and how the bank maintain its Assets and Liabilities, I joined Punjab National Bank” as a management trainee to learn the facts related to caption completion of my summer training. TOPIC OF THE STUDY The study comprise of project report dealing with the subject “AN EVALUATION OF LENDING POLICY OF PNB”. OBJECTIVES OF THE STUDY The study primarily attempts to know about management of loan and advances made by 3939 Branch PNB, Bettiah The following are the main objectives of the proposed summer training project: 1. To analyze the process of loans/advances for bank to enhance its business turnover.

2. To identify the components through which the sources of finance ascertain. 3. To calculate the real benefits provided by the bank to its creditworthy and potent customers. 4. To calculate the exact permissible Bank Finance

METHODOLOGY OF THE PRESENT STUDY Keeping in mind this the limited timeframe framed under MFC course I have through a particular branch situated in the urban area. The total observation and analysis is based on the data provided by the branch office from its records. So project work is based on purely secondary data available in the records of Punjab National Bank, 0108 Branch, Darbhanga, I have tried my best to present, analyze and draw conclusion about its lending policy. The database taken for the project are financial statement of last five years of the branch booklet published etc.

PLAN OF THE STUDY The proposed summer training report shall be tentatively divided into following chapters. CHAPTER I

:

Introduction

CHAPTER II :

Conceptual Exposition of the topic

CHAPTER III :

PNB – A Brief Profile

CHAPTER IV :

Lending Policy of PNB – A study of 0108 branch

CHAPTER V :

Finding and suggestions

BIBLIOGRAPHY

LIMITATIONS OF THE STUDY No Study or assignment can be free from its limitation. The main limitations are:  Six week time is very less for analyzing the each and every aspect of Lending Policy of Punjab National Bank.  Respondents were reluctant in furnishing clear clues of information.  Secrecy factor.  Data and information is collected from small part of sector.

CHAPTER -2 THEORITICAL EXPOSITION

OF THE TOPIC: LENDING POLICY – A TOOL OF BANKING POLICY

CONCEPTUAL EXPOSITION BACKDROPS The history of economic growth of different countries of the world shows that banking institutions have played a significant role in national development. Although commercial banks in India expanded their operations harmoniously in the post independence period. In fact, commercial banks in India were institution of a few persons instead of institutions of the masses. In the course of their expanding operations with the growth of the economy, these banks served only well known customers, neglecting large potential areas and millions of the downtrodden population. With a view to making the banks vibrant and potent improvement of development and making them a mass objective of achieving a wider