MIRA
INFORM REPORT
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Report Date : |
14.09.2007 |
IDENTIFICATION DETAILS
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Name : |
PUNJAB NATIONAL BANK |
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Registered Office : |
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Country : |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
1895 |
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Legal Form : |
Subject is a Government of India Undertaking Bank. |
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Line of Business : |
Banking activities |
RATING & COMMENTS
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MIRA’s Rating : |
Aa |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
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Maximum Credit Limit : |
Large |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a well established and reputed Nationalised Bank. Fundamentals
are strong and healthy. Payments are reported as correct and as per
commitments. The bank can be considered good for any normal business dealings. It can be regarded as a promising business partner in medium to
long-run. |
LOCATIONS
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Registered Office : |
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Tel. No.: |
91-11-26102303 / 6869 / 8379 / 2619 6353 |
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Fax No.: |
91-11-2687 6456 / 26108741 |
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E-Mail : |
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Website : |
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Head Office : |
Over 4100 offices spread across the country. |
DIRECTORS
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Name : |
Mr. K Raghuraman |
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Designation : |
Executive Director |
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Name : |
Mr. Rakesh Singh |
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Designation : |
Nominee (Govt) |
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Name : |
Mr. L M Fonseca |
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Designation : |
Nominee (RBI) |
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Name : |
Mr. S R Khurana |
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Designation : |
Director |
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Name : |
Mr. P K Nayar |
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Designation : |
Director (Officer Employee) |
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Name : |
Mr. Mohan Lal Bagga |
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Designation : |
Director (Workman Employee) |
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Name : |
Mr. Harsh Mahajan |
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Designation : |
Director(Shareholders) |
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Name : |
Mr. Mohanjit Singh |
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Designation : |
Director |
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Name : |
Mr. Prakash Agarwal |
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Designation : |
Director |
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Name : |
Mr. Jag Mohan Garg |
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Designation : |
Executive Director & Wholetime Director |
KEY EXECUTIVES
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Name : |
Mr. K C Chakrabarty |
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Designation : |
Chairman & Managing Director |
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Name : |
Mr. Ramesh Kumar Kochar |
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Designation : |
Company Secretary |
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Name : |
Mr. C.P. Swarnkar |
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Designation : |
Chief General Managers |
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Name : |
Mr. V. Nagaraja |
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Designation : |
Chief General Managers |
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Name : |
Mr. P.L. Madan |
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Designation : |
General Managers |
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Name : |
Mr. K.G. Sathyasingan |
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Designation : |
General Managers |
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Name : |
Mr. B. M. Mittal |
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Designation : |
General Managers |
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Name : |
Mr. D.L. Rawal |
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Designation : |
General Managers |
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Name : |
Mr. A.D. Paliwal |
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Designation : |
General Managers |
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Name : |
Mr. |
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Designation : |
General Managers |
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Name : |
Mr. A. Balasubramanian |
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Designation : |
General Managers |
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Name : |
Mr. V. K. Nagar |
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Designation : |
General Managers |
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Name : |
Mr. Harwant Singh |
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Designation : |
General Managers |
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Name : |
Mr. Arun Kaul |
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Designation : |
General Managers |
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Name : |
Mr. R.I.S. Sidhu |
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Designation : |
General Managers |
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Name : |
Mr. V.R. Choudary |
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Designation : |
General Managers |
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Name : |
Mr. L.P. Agarwal |
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Designation : |
General Managers |
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Name : |
Mr. Ranjan Dhawan |
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Designation : |
General Managers |
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Name : |
Mr. I.D. Singh |
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Designation : |
General Managers |
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Name : |
Mr. P.K. Mitra |
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Designation : |
General Managers |
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Name : |
Mr. B.P. Chopra |
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Designation : |
General Managers |
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Name : |
Mr. K.S. Bajwa |
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Designation : |
General Managers |
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Name : |
Mr. V.K. Sood |
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Designation : |
General Managers |
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Name : |
S. Ranganathan |
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Designation : |
General Managers |
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Name : |
Mr. Y.N. Mathur |
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Designation : |
General Managers |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
As on 30.06.2007
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Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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Shareholding of Promoter and Promoter Group2 |
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Indian |
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Central Government/ State Government(s) |
182241300 |
57.799 |
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Public shareholding |
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Institutions |
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Mutual Funds/ UTI |
25465590 |
8.077 |
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Financial Institutions / Banks |
217463 |
0.069 |
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Insurance Companies |
25322707 |
8.031 |
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Foreign Institutional Investors |
63235205 |
20.055 |
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Non-institutions |
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Bodies Corporate |
2987153 |
0.948 |
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Individuals |
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Individuals -i. Individual shareholders holding nominal
share capital up to Rs 0.100 Millions |
15461370 |
4.904 |
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ii. Individual shareholders holding nominal share capital in excess of Rs. 0.100
Millions |
202355 |
0.064 |
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Any Other (specify) |
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Trusts |
89519 |
0.028 |
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NRI |
78895 |
0.025 |
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OBC |
943 |
0.000 |
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GRAND TOTAL |
315302500 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Banking activities |
GENERAL INFORMATION
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No. of Employees : |
58329 |
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Bankers : |
Reserve Bank of |
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Banking
Relations : |
Good |
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Auditors : |
Ř Kalani and Company Ř Surrender K. Jain and Company Ř Mookherjee Biswas and Pathak Ř M. C. Bhandari and Company Ř P. K. Chopra and Company Ř G. P. Chartered Accountants Ř Ramanlal G Shah And Company Ř B.K. Ramadhyani And Company |
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Subsidiaries : |
Ř PNB Gilts Limited Ř PNB Housing Finance Limited Ř PNB Capital Services Limited Ř PNB Asset Management Company Limited |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
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1500000000 |
Equity Shares |
Rs. 10 Each |
Rs. 15000.000 millions |
Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
|
315302500 |
Equity Shares (includes 182241300 Equity Shares of Rs. 10 Each held by Central Government) |
Rs. 10 Each |
Rs. 3153.025 millions |
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
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SOURCES OF FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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Capital |
3153.000
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3153.000
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3153.000
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Reserves and Surplus |
101201.600
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90610.600
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78460.000
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Deposits |
1398596.700
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1196849.200
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1031668.900
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Borrowings |
19488.600
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66648.700
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27182.900
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Other Liabilities &
Provisions |
102851.400
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96236.400
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122222.400
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TOTAL |
1625291.300 |
1453497.900 |
1262687.200 |
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Cash & Balances with RBI |
123720.300
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233945.500
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94602.000
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Balances with Banks & money
at Call & Short Notice |
32734.900
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13971.400
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16288.300
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Investments |
451898.400
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410553.100
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506728.300
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Advances |
965965.200
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746273.700
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604127.500
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Fixed Assets |
10098.200
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10302.300
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9652.300
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Other Assets |
40874.300
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38451.900
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31288.800
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TOTAL |
1625291.300 |
1453497.900 |
1262687.200 |
PROFIT & LOSS
ACCOUNT
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PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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Interest Earned |
115374.800
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95841.500
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84598.500
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Other Income |
19327.100
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19010.000
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21863.600
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TOTAL |
134701.900 |
114851.500 |
106462.100 |
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Interest expended |
60229.100
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49173.900
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44531.100
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Operating Expenses |
42166.400
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33007.000
|
34374.800
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Provisions & Contingencies |
16905.600
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18277.500
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13455.000
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TOTAL |
119301.100 |
100458.400 |
92360.900 |
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Net Profit for the year |
15400.800
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14393.100
|
14101.200
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Prior Year Adjustments |
[132.700]
|
00.000
|
0.000
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Profit brought forward |
1834.900
|
00.000
|
0.000
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KEY RATIOS
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PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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Credit
Deposit Ratio |
65.97 |
60.60 |
56.33 |
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Investment
Deposit Ratio |
33.23 |
41.16 |
48.56 |
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Cash
Deposit Ratio |
13.78 |
14.74 |
8.48 |
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Interest
Expended/Interest Earned |
52.20 |
51.31 |
52.64 |
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Other
Income/Total Income |
14.35 |
16.55 |
20.54 |
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Operating
Expense/Total Income |
31.30 |
28.74 |
32.29 |
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Interest
Income/Total Funds |
7.51 |
7.07 |
7.42 |
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Interest
Expended /Total Funds |
3.92 |
3.63 |
3.91 |
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Net
Interest Income/Total Funds |
3.59 |
3.44 |
3.51 |
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Non
Interest Income/Total Funds |
1.26 |
1.40 |
1.92 |
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Operating
Expense/Total Income |
2.74 |
2.44 |
3.02 |
|
Profit
Before Provisions/Total Funds |
2.10 |
2.41 |
2.42 |
|
Net
Profit/Total Funds |
1.00 |
1.06 |
1.24 |
|
Return
On Net Worth(%) |
16.03 |
17.01 |
22.49 |
STOCK PRICES
|
Face Value |
Rs.10/- |
|
High |
Rs.568/- |
|
Low |
Rs.555.50/- |
LOCAL AGENCY FURTHER INFORMATION
HISTORY
Punjab National Bank (PNB) was incorporated in 1894. From
its modest beginning, the bank has grown in size and stature to become a leading
banking institution in
PNB, wholly owned by Government of India (GOI), came out with its first Initial
public offer (IPO)in March 2002 for 5,30,60,700 equity shares of Rs 10 each at
a premium of Rs 21 per share aggregating Rs 1644.9 Millions through the fixed
price route. After the Issue, the shareholding of the GOI will come down to
around 80%.
The bank's vision is to be
PNB has also diversified into gold, insurance and credit card businesses. It
commenced its Gold Business in the form of Gold Import Scheme in Sept. 2000.
The scheme offers international quality gold for sale to the Bank's clientele
consisting of exporters and others at competitive prices. The bank has launched
PNB International Card in Nov 2000 in association with Hongkong & Shanghai
Banking Corporation (HSBC). So far it has issued more than 28000 cards and the
product is being offered at 21 centres. The Bank has issued over 3 lakh credit
cards in March 2001 to farmers under the Kisan Krishi Card Scheme to meet the
financing needs of the farmers.
Further the bank plans to enter insurance business in strategic partnership
with Zurich Financial Services, DCM Shriram Consolidated Limited and Vijaya
Bank as partners. The JV is proposed for three separate companies one each for
life, non-life insurance and a third for distribution and services company.
Bank is expected to take up 26% equity in all the three companies and invest a
sum of Rs 618.800 Millions.
As of its IT strategy the bank has been focussing on computerisation of
operations and provision of technology based banking solutions. The bank has
computerised 1886 branches by Sept. 2001 enabling it to capture 76% of its
business through computerization. The bank has plans to implement Centralised
Banking Solutions by establishing connectivity between its branches to cover
2000 branches and all ATMs by 2004.
In the deregulated environment the importance of risk management has increased.
Considering this the bank has set up a separate Credit Policy and Risk
Management Division (CPRMD) to implement risk management systems. Further, a
Preventive Monitoring System (PMS) has been developed for monitoring of loan
accounts and generate early warning signals. The bank has also set up a
separate Credit Audit and Review Division (CARD) to undertake post-sanction
review of loan accounts where bank's exposure is Rs 35 Millions and above along
with other high risk accounts.
The bank has become the largest Inter Connected Bank Network in
During 2005-06, the bank revamped its organisational structure. Seven new Zonal
Offices were created and the bank has 25 Zonal offices and 47 Regional
offices.
The total number of domestic branches of the bank stood at 4065 comprising 1944
rural, 801 Semi-urban, 792 urban and 528 metropolitan branches, The bank has
one foreign branch at
MANAGEMENT
DISCUSSION AND ANALYSIS:
Business Environment:
Indian economy Is characterized by steady growth with robust
macroeconomic fundamentals, which is being reflected in the high GDP growth
rate and strong balance of payment position. Real GDP growth of the economy in
2006-07 was 9.4% as per CSO advance estimates, compared to 9.0% and 7.5% in
2005-06 and 2004-05, respectively. This strong performance has mainly been led
by growth in the industry and services sector which acted as the twin engines propelling
the overall growth of the economy.
Industrial growth is estimated at 11.3% in 2006-07 buoyed up by manufacturing
activity registering a growth of 12.3%. Service sector is estimated to grow at
11%. Within the services sector, 'trade, hotels, transport and communication'
and 'Financial, real estate & business services' sub-sectors exhibited
robust growth. However, the 'agricultural and allied sector' is expected to
register a modest growth of 2.7%.
In 2006-07, the share of industry and services in GDP is higher at 26.4% and
55,1% respectively, while the share of agriculture is lower at 18.5%. Gross
Domestic Investment at 33.8% of GDP and Cross Domestic Savings at 32.4% of GDP
give rise to optimism for achieving higher growth. As per projection of the
Planning Commission and the Reserve Bank of
However, higher inflationary trend during 2006-07 has been a cause of concern.
On an annual basis, the average 52-week inflation for 2006-07 stood at 5.38% as
compared to 4.4% last year. Though this is within the RBI's range of 5-5.5% for
the financial year, yet the inflation rate on weekly basis was above the RBI's
projection during later part of 2006-07. The key drivers of domestic inflation
during 2006-07 have been primary food articles and manufactured product
prices.
The year also witnessed sensex crossing 14,000 level indicating positive
investor sentiments in the capital market.
The year 2006-07 witnessed orderly trends in the financial market, although
there was tightening of liquidity towards the third quarter of the year. The
stance of the monetary policy of the RBI was to maintain price stability and
credit quality and at the same time to ensure the productive use of the credit.
RBI and the Finance Ministry have been stressing on need for rebalancing of
portfolios to ease out pressures on overheated sectors like housing, commercial
real estate, etc. and the need to syncronise credit growth with deposit
growth.
Credit demand continued to record strong growth outpacing the deposit growth.
RBI was successful in bringing a marginal reduction in non food credit growth
to 28% in 2006-07 from 31.8% in 2005-06. This has been achieved by stiffer
monetary tightening measures like hike in cash reserve ratio (CRR) by 150 basis
points and raising the repo rate to 7.75%. Aggregate deposits rose by 23%
during 2006-07.
Demand for higher bank credit (upto Dec 2006) was mainly led by industry that
accounted for almost 35% of incremental non-food credit followed by personal
loans (28.7%), services (23.7%) and agriculture (12.2%). In order to protect
asset quality in the light of high credit growth, RBI has doubled the
provisioning requirement from 1% to 2% for standard assets in some of the
sectors like commercial real estate sector, outstanding credit card
receivables, loans and advances qualifying as capital market exposure, and
personal loans (excluding residential housing loans).
Commercial banks' appetite for Government paper revived during 2006-07. Their
investment in Government and other approved securities increased by Rs 747060
Millions in 2006-07 as compared to a decline of Rs.228090 Millions in 2005-06.
Industry Structure &
Development:
As on March 31, 2006, Indian banking system consisted of 217 Scheduled
Commercial Bank (SCBs) including 28 public sector banks, 27 private sector
banks, 29 foreign banks and 133 Regional Rural Banks (RRBs). Public Sector
Banks (PSBs) accounted for 75% of deposits and 73% of advances of SCBs. Punjab
National Bank has an asset size of Rs 1624230 Millions at the end of March
2007. PNB enjoys strong franchise value due to a strong presence in all areas
across the country. The Bank has devised specific products to cater to all the
segments, be they corporates, retail customers, multinational companies, Indian
conglomerates, small and medium industrial units, NRIs, farmers, exporters,
pensioners, traders, individuals or students & professionals. Besides, the
bank has diversified into other areas like credit card & debit card
business; bullion business; insurance business; Cold coins & asset
management business, etc.
Despite stiffening of competition, PNB has been able to sustain its market
share. At the end of March 2007, the bank held 5.3% of system's deposits and
5.1% of system's advances.
Organisational
Structure:
As part of the ongoing restructuring process, the bank created a new Regional
Office at Alwar under Rajasthan Zone w.e.f. July 1, 2006, taking the total
number of Regional Offices to 47. A new Integrated Zonal Office, Bihar (North)
Zone was also created during the year by bifurcating earlier Bihar Zone into
Bihar (North) Zone with headquarters at Muzaffarpur and Bihar (South) Zone with
headquarters at
Strategic Initiatives Group:
In view of need for a continuous flow of hew ideas which could be converted
into strategic initiatives by the bank, Strategic Initiatives Group (SIG) was
constituted under the Chairmanship of Shri K I Raghuraman, Executive Director.
It is believed that in times to come these initiatives will help the bank to
grow at a faster pace. SIG tracks strategic initiatives being undertaken by
various banks and also contemplates on initiatives which could potentially be
taken, not necessarily following what other banks are doing.
Manuals: During the year revised Regional Managers' Manual was released and
circulated for effective control and functioning. Also, for the first time, a
booklet titled 'Profile of Head Office Divisions' was released to facilitate
& understand the functioning of various HO Divisions. With this, the series
of .Manuals for administrative offices i.e. Head Office/Zonal offices/Regional
offices has been completed.
Branch Rationalisation:
At the end of March 2007, the total number of domestic branches of the bank
stood at 4118 comprising 1957 rural, 816 semiurban, 805 urban and 540
metropolitan branches. The bank has one foreign branch at
During the year under review, the bank opened 53 additional branches while 4
branches were merged, as a part of rationalisation. With 4540 offices including
421 Extension Counters, the bank has the largest network amongst nationalised
banks. The bank has 99 specialised branches i.e. 35 branches for Small Scale Industries,
11 international Banking Branches, 8 Large Corporate Finance Offices, 9 Mid
Corporate Offices, 6 Trade Finance Branches, 4 Retail Lending Branches, 2
Personal Banking Branches, 3 Agriculture Finance branches, 4 Foreign Exchange
Offices, 5 High Value Branches, 10 Asset Recovery Management Branches, 1 All
Ladies Branch and 1 Capital Market Services Branch.
Segment wise Performance:
The bank's operations are classified into two primary business segments viz.,
Treasury Operations and Banking Operations (other than Treasury), In banking
operations, the main activity of the bank is acceptance of deposits and making
advances apart from offering other products/services like export finance,
non-fund business, remittances, bills discounting, ancillary services like
dematerialisation of shares, government business, international credit cards,
bullion business, etc.
Treasury
Operations:
The financial year 2006-07 continued to witness further hardening of interest rates
in the domestic economy as well as in the major economies of the world to rein
in inflation and control inflationary expectations. In the domestic economy,
the firming trend was reaffirmed by the Monetary Authority who increased the
benchmark reverse repo and repo rate during the year. While there were 5 hikes
of 25 bps each effected in the repo rate during the year, the reverse repo rate
was hiked twice, widening the corridor between the reverse repo and repo rate
from 100 bps to 175 bps.
During the year, the yield on the 91 day T-bill increased by 187 bps to 7.98%
from 6.11% as at 31.3.06. Similarly the yield on the 364 day T-bill increased
by 156 bps to 7.98% from 6.42% as at 31.3.06. While 10 year yield rose to 7.97%
as on 31st March'07 from 7.52% as on 31st March '06, the spread between the 1
yr and 10 yr G-sec declined to 22 bps as at 31.3.07 from 98 bps as at 31.3.06.
The average daily volume in the gilt market increased to Rs.41870 Millions in
the year 2006-07 from Rs. 3,2150 Millions in the previous year.
During the year, the bank transferred Rs. 61780 Millions worth of securities to
"Held to Maturity" category in the first quarter, to insulate the
investment portfolio from interest rate risk. A loss of Rs. 3867.600 Millions
was booked on this transfer.
The bank continued its focus in equity, forex and derivative market to boost
its trading income during the year. Equity market witnessed volatility during
the year and Sensex touched a low of 8929 in mid June 2006 from its end March
2006 level of 11280 and subsequently rose to 13072 as on 31st March 2007.
Excluding the one time loss of Rs.3867.600 Millions booked on transfer of
securities, the bank earned a trading profit of Rs 3728.700 Millions.
The bank's investment portfolio rose to Rs 451900 Millions as on 31st March '07
vis-a-vis Rs, 410.55 Millions as on 31st March'06. The bank meticulously
adhered to statutory prescriptions relating to CRR and SLR, compliance under
section 19(2) of Banking Regulation Act 1949 and prudential norms prescribed by
RBI.
Banking Operations (other than
Treasury):
Revenue from banking operations (other than Treasury) increased from
Rs.66163.800 Millions at end of March 2006 to Rs 93041.8 Millions at end of
March 2007.
Credit to Agriculture:
The Bank has diversified its lending by targeting allied activities like
horticulture, medicinal & aromatic plants, organic farming, fisheries etc.
besides financing traditional agriculture activities. As a result, the
agricultural lending rose by Rs 39840 Millions or 27.3% to reach Rs 185710
Millions as on the LRF of March 2007 from Rs 145870 Millions as on the LRF of
March 2006. Share of agricultural credit in net bank credit stood at 18.91%,
above the national goal of 18%. Under Kisan Credit Card Scheme, the bank issued
3,17,000 additional Krishi cards during 2006-07, taking the number of
cumulative cards issued since inception to 21.19 lakh.
The Bank achieved the target of doubling the credit flow to agriculture in
three years and achieving 30% annual growth as per the Finance Minister's
Policy package announced in June 2004. In this regard, the bank disbursed Rs
129550 Millions during 2006-07 (against RBI target of Rs 128150 Millions) under
Special Agricultural Credit Plan, thereby achieving 101.10% of the target Apart
from meeting credit requirements of the farming community through various
lending schemes, the bank laid stress on, marketing/dissemination of useful
information to the rural community by organizing Kisan Goshthies and formation
of Farmers' clubs. The Bank has been creating awareness about its schemes as
well as cultivation practices, technical aspects of food grains, cash crops,
medicinal/aromatic plants, vegetables, fruits, etc., daily mandi rates,
marketing facilities etc., through Kisan Goshthies and through the Bank's
exclusive website, 'www.pnbkrishi.com'.
The Bank has implemented the RBI's guidelines for providing relief &
rehabilitation assistance to Poultry farmers in areas affected by Avian
Influenza, i.e. farmers in Vidarbha, Southern States of Kerala, Andhra Pradesh
& Karnataka. Short-term production credit was provided to farmers at 7
percent rate of interest with a 2 percent subvertion support from RBI. Special
emphasis has been given to bring oral lessees, tenant farmers & sharecroppers
into bank's fold by encouraging formation of Joint Liability Groups. To
revitalize sagging Agri-economy of North Eastern States, the Bank relaxed the
lending norms for farmers of these States. The Bank has finalised an MOD with
National Horticulture Board for mutual collaboration in promotion/financing to
horticulture projects.
Some of the innovative credit products launched for farmers during 2006-07
include Scheme for financing Joint Liability Groups (JLGs) to tenant farmers,
sharecroppers & oral lessees for meeting their short-term working capital
for agriculture/allied farm activities/other domestic requirements; Scheme for
financing Agricultural Graduates for setting up of Agri-clinics and
Agri-business Centers (ACABC), with a provision of subsidy; Scheme for
financing Jatropa Plantation for promotion of alternative energy sources; PNB
Kalyani Card for fulfilling farm/non-farm credit needs of women; and Scheme for
financing sericulture.
PNB Farmers' Welfare Trust:
The Bank established "PNB Farmers' Welfare Trust" in the year 2000
for the welfare of farmers, women and youth. The Chairman and Managing Director
of the bank is the Chairman of the Trust, with other eminent persons from
agriculture field as Trustees. Under the aegis of the Trust, eight Farmers'
Training Centres (FTCs) have been made operational at Village Sacha Khera
(Haryana), Vidisha (M.R), Neemrana (Rajasthan), Shamshernagar (Punjab), Saifai
(U.R), Labhandi (Chhattisgarh), Mehraj (
These FTCs have imparted free training to 87,356 persons including 11,618 women
during 2006-07. Besides, each FTC has adopted one village for developing it as
a
Mobile Van at FTC, Sacha Khera for providing door-to-door training on improved
package & practices of agricultural crop, artificial insemination facility
etc. has been started. The Trust has decided to start training, in
collaboration with State Institute of Rural Development (SIRD),
A new Scheme, Kisan Mitra, has also been launched at Village
Sacha Khera to provide extension services In agriculture and allied activities
and financial counselling to people in rural areas.
PNB Centenary Rural Development
Trust:
The Bank has established another trust, PNB Centenary Rural Development Trust.
Three units are working under the Trust viz. Soil Testing and Artificial
Insemination Centre at Village Matki Jharoli (UP), Training Centre for Rural
Youth for Self Employment at Village Dhudike (Punjab) and PNB Swarojgar Vikas
Sansthan for training of unemployed youth at
At Matki Jharoli Centre, 19,830 soil samples have been analyzed, 5065
artificial inseminations have been done and 45,333 diseased animals have been
treated during 2006-07. Besides, 59,384 persons have attended vermi composting
demonstrations and 54,194 persons attended solar energy demonstrations. At
Dhudike Centre, training for self employment has been imparted to 461 boys and
443 girls during 2006-07. Patna Centre was inaugurated on Jah 15, 2007 and
already 84 persons have been trained.
Micro Credit:
Bank continued to promote Micro Finance through formation & credit linkage
of Self Help Groups, as the same has been experienced as an effective
instrument for increasing the income levels and reducing poverty &
unemployment. While higher focus was given to financing Tenant Farmers' Groups
(TFGs), the Bank laid stress on capacity building & training of intermediaries
such as NGOs/Volunteer Vahinis and the ultimate beneficiaries. In this context,
the Bank has committed contribution of Rs.2.275 Millions towards share in the
corpus formed for providing financial assistance towards creation of
infrastructure for the RUDSETI being run by J&K Government.
As at the end of March 2007, Bank has credit linked 1,00,650 SHGs against
71,254 groups linked upto the previous year, thus registering 41% growth.
Outlook
& Opportunities:
The Bank would continue to improve its performance against the backdrop of
robust credit growth supported by good deposit growth. Strong fundamentals,
large branch network and technological resources would facilitate the bank to
improve business and earnings. Adequate presence of the bank in rural areas
offers significant scope for business growth. While the Bank would continue to
make efforts to mobilize deposits from the retail segment, ensuring quality
credit growth will be a strategic goal for the bank. The bank endeavours to
keep its funding costs low by emphasising on mobilisation of low cost deposits,
while improved asset quality would help in boosting loan yield. The bank would
further strengthen its risk management capabilities with a view to protecting
its asset quality and improving earnings.
Considering the huge opportunities available in rural lending, the Bank would
be leveraging on Government's ambitious investment plans for agri-business by
satisfying credit demands of new users from rural areas. The SME sector will
continue to be a focus area and the bank visualizes good lending opportunities
in this area as well. The implementation of Core Banking in majority of bank
branches would enable the bank to leverage on its technological resources to
garner more business. This coupled with bank's policy of continuous innovations
and customisation of products and services would further strengthen bank's
position in the industry. The bank's rich experience in banking and well
qualified IT manpower has made it possible to further develop and evolve
innovative technology-based financial solutions.
Retail banking has gained importance as a profitable lending option due to
continued good performance of the service sector and its growing share in
country's GDR Besides, this sector also offers higher spread, low transaction
cost and better recovery ratio. PNB with its pan-India footprint and large
branch network would continue to reap competitive advantages in this segment
and hence the bank will continue its focus on the retail segment.
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
1] INFORMATION ON
DESIGNATED PARTY
No exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals have
been formally charged or convicted by a competent governmental authority for
any financial crime or under any formal investigation by a competent government
authority for any violation of anti-corruption laws or international anti-money
laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.40.47 |
|
|
1 |
Rs.81.07 |
|
Euro |
1 |
Rs.56.17 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
8 |
|
PAID-UP CAPITAL |
1~10 |
8 |
|
OPERATING SCALE |
1~10 |
8 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
7 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
8 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
8 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
YES |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
72 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a composite
of weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest capability
for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems comparatively
below average/normal. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|