INFO SYS MGMT OF PNB

Project Report on

Information System of PNB

(Project report submitted in partial fulfillment of the requirements for the MBA Program)

Submitted by: - Manish Siddhartha(0731233908) Vikas Rajput(0771233908)

Submitted to:- Ms. Bharti Taneja

Delhi Institute of Advanced Studies(Affiliated to GGSIP University, Delhi)

Plot No.6, Sector-25, Rohini, Delhi-110085.

2 Delhi Institute of Advanced Studies

S. No. Sub Topic S. No.

Topic NamePage No.

1. ACKNOWLEDGEMENT 32. CERTIFICATE 43. ABOUT PUNJAB NATIONAL BANK 5

1. Vision 52. Mission 53. History 54. Profile 55. Financial Performance 76. Organizational Structure 77. Main services of PNB 8

4. INFORMATION SYSTEM IN PNB 81. History of Information System at PNB 82. Information system in Company 93. Banking Application 94. PNB IT Setup 10

5. ORGANIZATION COMPUTING RESOURCES 111. Software Resources 112. Hardware Resources 113. Communication Network 124. Transaction processing system(TPS) 125. Payroll TPS 126. Real Time Banking 137. Online Assistance 148. Account Opening 149. ATM Card 14

6. MIS: RELATIONSHIP OF MIS WITH TPS 147. CONCLUSION 168. SUGGESTIONS 169. FUTURE 17


ACKNOWLEDGEMENT

It is our duty to record my sincere thanks and deep

sense of gratitude to our respected teacher

Ms. Bharti Taneja

for there valuable guidance interest and

constant encouragement for the fulfillment of the

report.


CERTIFICATE

THIS IS TO CERTIFY THAT THIS REPORT HAS BEEN PREPARED

MANISH KR. SIDDHARTHA, VIKAS RAJPUT UNDER MYGUIDENCE

AND TO MY SATISFACTION. IT IS BASED ONTHEIR OWN

EFFORTS.


ABOUT PNBVision"To be a Leading Global Bank with Pan India footprints and become a household brand in the Indo-Gangetic Plains providing entire range of financial products and services under one roof"

Mission "Banking for the unbanked"

PUNJAB NATIONAL BANK, since 1985Punjab National Bank (PNB) was set up in 1895 in Lahore - and has the distinction of being the first Indian bank to have been started solely with Indian capital. The bank was nationalized in July 1969 along with 13 other banks. Today, PNB is a professionally managed bank with a successful track record of over 110 years. The bank has the largest branch network in India, with 4497 branches including 454 extension counters spread throughout the country. PNB was ranked as 515th biggest bank in the world by Bankers Almanac, London. Punjab National Bank is not only the first bank to specialize in credit rating models in India but also the first one to launch image based cheque transaction system for collection of intra bank inter- city cheques thereby providing credits merely in 48 hrs in 13 cities From its modest beginning; the bank has grown in size and stature to become a front-line banking institution in India at present. Based on its sound and prudent banking experience and consistent profit performance, PNB looks confidently to the future………the name you can bank upon………

ProfileWith its presence virtually in all the important centers of the country, Punjab National Bank offers a wide variety of banking services which include corporate and personal banking, industrial finance, agricultural finance, financing of trade and international banking. Among the clients of the Bank are Indian conglomerates, medium and small industrial units, exporters, non-resident Indians and multinational companies. The large presence and vast resource base have helped the Bank to build strong links with trade and industry.The bank’s strength lies in its corporate belief of growth and stability.


With over 38 million satisfied customers and 4668 offices, PNB has continued to retain its leadership position among the nationalized banks. The bank enjoys strong fundamentals, large franchise value and good brand image. Besides being ranked as one of India's top service brands, PNB has remained fully committed to its guiding principles of sound and prudent banking. Apart from offering banking products, the bank has also entered the credit card & debit card business; bullion business; life and non-life insurance business; Gold coins & asset management business, etc. Since its humble beginning in 1895 with the distinction of being the first Indian bank to have been started with Indian capital, PNB has achieved significant growth in business which at the end of March 2009 amounted to Rs 3,64,463 crore. Today, with assets of more than Rs 2,46,900 crore, PNB is ranked as the 3rd largest bank in the country (after SBI and ICICI Bank) and has the 2nd largest network of branches (4668 including 238 extension counters and 3 overseas offices).During the FY 2008-09, with 39% share of low cost deposits, the bank achieved a net profit of Rs 3,091 crore, maintaining its number ONE position amongst nationalized banks. Bank has a strong capital base with capital adequacy ratio as per Basel II at 14.03% with Tier I and Tier II capital ratio at 8.98% and 5.05% respectively as on March’09. As on March’09, the Bank has the Gross and Net NPA ratio of only 1.77% and 0.17% respectively. During the FY 2008-09, its’ ratio of priority sector credit to adjusted net bank credit at 41.53% & agriculture credit to adjusted net bank credit at 19.72% was also higher than the respective national goals of 40% & 18%. 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. Alongwith the achievement of 100% branch computerization, one of the major achievements of the Bank is covering all the branches of the Bank under Core Banking Solution (CBS), thus covering 100% of it’s business and providing ‘Anytime Anywhere’ banking facility to all customers including customers of more than 2000 rural branches. The bank has also been offering Internet banking services to the customers of CBS branches like booking of tickets, payment of bills of utilities, purchase of airline tickets etc.Towards developing a cost effective alternative channels of delivery, the bank with more than 2150 ATMs has the largest ATM network amongst Nationalised Banks. With the help of advanced technology, the Bank has been a frontrunner in the industry so far as the initiatives for Financial Inclusion is concerned. With it’s policy of inclusive growth in the Indo-Gangetic belt, the Bank’s mission is “Banking for Unbanked”. The Bank has launched a drive for biometric smart card based technology enabled Financial Inclusion with the help of Business Correspondents/Business Facilitators (BC/BF) so as to reach out to the last mile customer. The BC/BF will address the outreach issue while technology will provide cost effective and transparent services. The Bank has started several innovative initiatives for marginal groups like rickshaw pullers, vegetable vendors, diary farmers, construction workers, etc. The Bank has already achieved 100% financial inclusion in 21,408 villages.


Backed by strong domestic performance, the bank is planning to realize its global aspirations. In order to increase its international presence, the Bank continues its selective foray in international markets with presence in Hong Kong, Dubai, Kazakhstan, UK, Shanghai, Singapore, Kabul and Norway. A second branch in Hong Kong at Kowloon was opened in the first week of April’09. Bank is also in the process of establishing its presence in China, Bhutan, DIFC Dubai, Canada and Singapore. The bank also has a joint venture with Everest Bank Ltd. (EBL), Nepal. Under the long term vision, Bank proposes to start its operation in Fiji Island, Australia and Indonesia. Bank continues with its goal to become a household brand with global expertise. Amongst Top 1000 Banks in the World, ‘The Banker’ listed PNB at 250th place. Further, PNB is at the 1166th position among 48 Indian firms making it to a list of the world’s biggest companies compiled by the US magazine ‘Forbes’.

Financial PerformancePunjab National Bank continues to maintain its frontline position in the Indian banking industry. In particular, the bank has retained its NUMBER ONE position among the nationalized banks in terms of number of branches, Deposit, Advances, total Business, operating and net profit in the year 2008-09. The impressive operational and financial performance has been brought about by Bank’s focus on customer based business with thrust on SME, Agriculture, more inclusive approach to banking; better asset liability management; improved margin management, thrust on recovery and increased efficiency in core operations of the Bank. The performance highlights of the bank in terms of business and profit are shown below:

Parameters Mar'07 Mar'08 Mar'09 CRAR

Operating Profit* 3617 4006 5744 26.02

Net Profit* 1540 2049 3091 41.67

Deposit 139860 166457 209760 22.47

Advance 96597 119502 154703 26.55

Total Business 236456 285959 364463 24.15

Organizational StructureBank has its Corporate Office at New Delhi and 58 circle office and 4267 branches. The delegation of powers is decentralised upto the branch level to facilitate quick decision making

Head Office


http://pnbindia.com/headoff.htm

Main Services of PNB:-PNB are providing various service to its valuable customers and to corporate.

Savings Fund Account - PNB Prudent Sweep, Total Freedom Salary Account, PNB Vidyarthi SF Account, PNB Mitra SF Account

Current Account - PNB Smart Roamer, PNB Vaibhav, PNB Gaurav Fixed Deposit Schemes - Mahabachat Schemes, Spectrum Fixed Deposit Scheme,

Anupam Account, Multi Benefit Deposit Scheme Credit Schemes - PNB Flexible Housing Loan, Car Finanace, Personal Loan Social Banking - Krishi Card, PNB Farmers Welfare Trust, Mahila Udyam Nidhi Scheme Corporate Banking - EXIM finance, Gold Card scheme for exporters Business Sector - PNB Vikas Udhami, PNB Karigar credit card, PNB Kushal Udhami,

PNB Pragati UdhamiMoreover, the Punjab National Bank of India also offers locker facilities, senior citizens schemes, PPF schemes and various E-services to their customers.

INFORMATION SYSTEM IN PNB

History Of information system at PNB:-

In March 2000, the penetration and use of IT was not very high at PNB. The bank used seven different software, which ran on 13 different flavors of Unix, on standalone PCs. The 500-odd branches were not networked and only 35 percent of the bank's business was computerized. The overall expertise in IT among users was low.

The Central Vigilance Commission (CVC) issued a directive to the bank to computerize at least 70 percent of its business by December 2000. This prompted the bank to work out a strategy to tackle the daunting task in the short period of time.

Different Unix OS flavors in different branches.

Different standalone financial applications on PCs at different branches.

Lack of interoperability due to disparity in systems.


Circle office(58)

Branches (4267)

http://pnbindia.com/allbranches.asp

http://pnbindia.com/zonoff.htm

Limited expertise on the software packages currently deployed. This increased dependence on vendors.

Systems audits were pending.

Most branches did not have a proper LAN in place.

There was almost no WAN connectivity.

Information system in company:-

Punjab National Bank (PNB) today is the second largest public sector bank in the country (after State Bank of India), with a business of Rs 1,00,000 crore. The bank has an extensive employee base of 56,000 people in 4,267 branches across the country, and has a customer base of 30 million. PNB’s net profit, for the half-year ending in September 2002, stands at Rs 411 crore, which further showcases its strength in the banking segment.

Besides making a mark in terms of revenues, the bank— among the few technology-savvy PSUs—is now setting examples for other banks, especially PSUs. Recognizing this effort, the Institute for Development and Research in Banking Technology (IDRBT), a division of the Reserve Bank of India (RBI), presented PNB with the award for excellence in banking technology. This is quite an achievement considering that the technology transformation started only two-and-a-half years back at PNB. In March 2000, the bank had only 36 percent of its businesses covered on computers, as against 84 percent today.

There are four reasons why PNB opted for IT as its business tool. Firstly, technology has the capacity to reduce the transaction cost to a great extent, plus it saves time. Secondly, it limits data entry time as replication, report generation etc, can be done automatically. Thirdly, it offers immense scope for improvement on the customer relationship front, as computers help deliver quick and enhanced value-added services to customers like smart cards, ATMs, Internet banking, etc. And lastly it also helps keep track of the business.

Banking applications

The first and the foremost requirement for this technology transformation was a centralized core banking system. PNB tied up with Infosys in the first phase. Once it had acquired the software package, PNB’s 150 strong in-house team customized it, as per the bank’s requirements. In April this year, PNB implemented this centralized core banking solution at its eight branches—six in New Delhi and two in Mumbai. Today, the number of locations has increased to 12. As far as the centralized core banking system is concerned, PNB has a data centre at the corporate office and all these 12 centers have an extension to that data. This system enables an individual having an account in any of our branches to conduct transactions/operate the account from any of these 12 branches.


By next year, PNB aims to connect 200 branches in 40-50 cities across the country and aims to increase this number to 1,500 in three years. “This system will also enable us to have a centralized database to implement CRM and data warehousing solutions in future,” he adds. Once this system is in place, the banking major will be able to introduce a number of value-added services like ATMs, tele-banking, SMS banking, mobile banking and Internet banking, remote access facility through its website, etc. (PNB already has a license from RBI to launch Internet banking.)

The system will also enable customers to avail of the Straight to Processing (STP) facility. The biggest advantage of STP is that if a person with an account in Delhi deposits a cheque in Chennai, his account in Delhi gets updated the same day. PNB’s team has also customized this package to suit the typical requirements of a public sector bank. “As PNB handles huge number of government accounts—public provident fund, deposit of income tax, deposit of different duties and treasury payments, PNB had to customize it and also built a module for government businesses into this package. The 107-year-old bank, with around 7,000 locker holders, has also built a locker module in this package to benefit customers.

The bank also has a depository set-up (to store dematerialized share certificates) at its corporate office in New Delhi and another in Mumbai. Customers owning shares and bonds can deposit them at these depositories after which the hard copies are destroyed. The bank, on the other hand, keeps a digital copy of all these documents. Thus, one does not have to bother about the loss of paper, or a signature that does not match and so on. Customers can now instruct the bank at any point of time to transfer these securities.

Another very interesting development with PNB is its contract with Indian Railways. It is putting up an ATM machine at the New Delhi station’s reservation office, which is going to be a interface between the Railways’ server and the bank’s server. Once this is functional, customers can collect their tickets from the ATM machine and the payment can be made using credit or debit cards (PNB will launch Mastercard International debit cards next January), or by a paper card (which the bank is launching shortly). Once this is successful and the interface is done, the bank plans to enable all their ATMs across the country on this platform.

Electronic Data Interchange (EDI) is another technology initiative that the bank has taken up recently. It has entered into an agreement with the Customs department wherein the Customs’ server is connected with the bank’s corporate office server, which is further connected to several branches of PNB and also to importers. Thus, whatever duties are required to be deposited with the Customs department can be debited from the importer’s (read customer’s) account automatically. The pilot project for this has already been carried out and the bank plans to introduce this service soon.

The PSU has also introduced bilingual software known as Bank-mate. With the help of this software one can generate reports in Hindi and also can get his/her passbook in Hindi. This is


already in operation at around 25 branches and PNB is also getting orders for this package from other banks.

PNB’s IT set-up

As any other financial institution PNB also has a number of applications running on its network. The bank has plans to standardize all its platforms on UNIX operating system and RDBMS on Oracle. As far as the hardware platform is concerned, PNB has Sun Microsystems’ Web servers at the data centre. For the Base 24 switch, they have gone in for Compaq Servers. Apart from this, they are also using RISC Servers, IBM and Xeon servers. PNB has around 500 servers across the country and around 13,000-15,000 PCs placed in different offices across the country. At some locations, the bank is still using DOS machines to run some of their ATMs.

ORGANIZATION COMPUTING RESOURCES

Software Resources:-PNB is using various software for its operational activities for its smooth and efficient running, the Software used by PNB includes

Microsoft office 2003

Acrobat Reader

PNB TRAC

PMS

Bank-mate

Attack Filters:- Spyware, DDoS, Trojan, P2P, VoIP etc.

Protocols:- IP, VLAN, DNS, HTTP, FTP, TCP, TELNET, MPLS, UTP etc.

Operating System’s:- UNIX, AIX, Solaris, SCO, Windows NT, Window 2000 Server,

For Databases:- MS Access, MS SQL, Oracle, Foxpro.

Hardware Resources:-To fulfill the requirement and as per compatibility with software these hardware are used:-

HCL, IBM etc Desktops

Printer

NT Based servers from IBM,

Sun’s hardware for Solaris,

Sun’s fire Servers.


RISC Servers,

Xenon Servers,

Network Cards.

Routers,

Scanners.

Communication Networks:-To maintain continuous and instant flow these communication networks are used

Intranet

Internet

101 branches are on WAN

INFINET etc.

Transaction Processing System:A Transaction Processing System or Transaction Processing Monitor is a set of information which processes the data transaction in database system that monitors transaction programs (a special kind of program). The essence of a transaction program is that it manages data that must be left in a consistent state. E.g. if an electronic payment is made, the amount must be either both withdrawn from one account and added to the other, or none at all. In case of a failure preventing transaction completion, the partially executed transaction must be 'rolled back' by the TPS. While this type of integrity must be provided also for batch transaction processing, it is particularly important for online processing: if e.g. an airline seat reservation system is accessed by multiple operators, after an empty seat inquiry, the seat reservation data must be locked until the reservation is made, otherwise another user may get the impression a seat is still free while it is actually being booked at the time

In PNB Sun SPARC enterprise M series and energy efficient Chip Multi-Threading (CMT) systems running the Solaris Operating System delivered higher performance and scalability, enabling PNB’s architecture to scale seamlessly from catering to 500 branches to more than 4600 branches across the nation. Periodic consolidation of servers and storage by Sun Professional Services also delivered important benefits – optimizing compute and storage utilization, reducing power, cooling and space costs significantly over a period of time.

Payroll TPSPayroll TPS, which is a typical accounting transaction processing system found in PNB. A payroll system keeps track of the money paid to employees. The master file is composed of discrete pieces of information (such as a name, address, or employee number) called data


http://en.wikipedia.org/wiki/Batch_processing

http://en.wikipedia.org/wiki/Rollback

elements. Data are keyed into the system, updating the data elements. The elements on the master file are combined in different ways to create reports of interest to management and government agencies and to send paychecks to employees. These TPS can generate other report combinations of existing data elements.PNB send it to payroll TPS from where it links that information with the previous record and prepare a report which is forwarded to management. Management takes notice the record of the employee’s efficiency to work and may declare added bonus or other incentive. This report is checked and approved by the branch manager after which check is issued to the employee.

A payroll TPS example


Real time Banking:The Real-time Core Banking Platform is a cost-effective alternative to proprietary, legacy batch-processing technology. It enables the banking institutions to realize a 10-fold increase in performance and cost savings, while eliminating the need for batch-processing. It packages Red Hat Enterprise Linux, updates via Red Hat Network, FIS’ Profile, and dedicated customer support and services specifically tailored to the mission-critical needs of a banking environment all on a single server running four of Intel’s new Quad-Core Xeon series 7300 processors.

Online Assistance:-PNB provides its customers online assistance by providing i-banking, online complaints, providing then information about various products and services. These complaints and assistance are processed by customer care services.

Account OpeningIN account opening the MIS is used, the every information about the customer is recorded like their name, address, account, type of account, account information, their sample signature, these helps in Identification of customer instantly and creating a database at faster rate.

ATM CardPNB feels that ATMs offer many advantages over conventional branch-based banking like low cost per transaction and customer convenience. To encourage this, the bank has installed various ATMs, networked. A Base24 switch controls the ATMs. The ATMs are connected essentially through VSAT links from Comsat Max. VSAT links were chosen over leased lines because the bank felt that leased lines did not provide 100 percent uptime, and VSATs were closer to that mark. "If a customer uses an ATM and the line is not up, he/she will not be able to complete the transaction. The bank can't take a chance with connectivity," said Bajwa. Comsat Max has signed an SLA of maximum guaranteed uptime and dedicated bandwidth, to be increased whenever required. PNB has formed a consortium of seven banks and has principally agreed to share the ATM facilities amongst themselves. It will be available for public use soon.

MANAGEMENT INFORMATION SYSTEM

Relationship of MIS with TPS:The various types of systems in the organization exchange data with one another. TPS are a major source of data for other systems, especially MIS. TPS are operational-level systems that collect transaction data. Examples of these are payroll or order processing that track the flow of the daily routine transactions that are necessary to conduct business. TPS provide data that are required by office systems, although these systems may also use other data. Office systems not


only use data from TPS but also from MIS., office systems, MIS rely heavily on data from TPS but also use data and office systems. MIS reports and summarizes the organization’s basic operations and these reports come from the basic transition processing systems. In case of our organization the TPS’s of ATM Cards, Payroll and Customer identification etc. provide the basic information about the organization’s activities. These activities are then summarized in the form of reports for the manager so that they can check whether the firm is working properly or not. If there are some flaws then they take control measures to fix those flaws.

MIS & TPS


CONCLUSION

A management information system is a system or process that provides the information necessary to manage an organization effectively. MIS and the information it generates are generally considered essential components of prudent and reasonable business decisions. This report starts with the Punjab National Bank with overview of PNB followed by history of information system and the steps taken by PNB to be effective in banking industry by using information’s technology.

One of the biggest benefits that the bank has derived out of IT has been the tremendous saving on recruitment front—the bank has not recruited more staff even while the business and work pressures have gone up five times. Consequently, PNB’s profitability has also increased. To train users the bank has set up 14 computer training labs across the country.

It explains all the TPS how the transactions are made by the bank, using of these TPS from the new events such as account opening, new allowances etc to the routine work including cash and payments record, updating of records, payroll and the processing of the complaints. These TPS holds all the activities from the manager and employees to the customers. The report discuses the inbound and the outbound logistics and relate all the processes of TPS used in the bank with the MIS, enabling the bank to provide the quality and satisfactory services to their customers. Also includes the inter relations, of all the entities in the database of the bank. ERD diagram represents all these relations.

SUGGESTIONSThe bank is using information system efficiently and it has increased the customer satisfaction, efficiency, data storage, fast data retrieval. But to improve more and regarding futurework of PNB here are the some suggestions. Set up a data warehouse and a data mart soon. It will take six months to achieve. IDRBT has

been involved as a consultant The bank should update all their software, networks etc to keep information system up to

date for competitive edge, customer satisfaction Steps should be taken to increase the safety to avoid the unethical practices like phishing. Intra firm communication should be improved.


FUTURE It may need to set up a NAS and SAN to consolidate its storage. Disaster Recovery site may be built at Mumbai to create a replica of its data center. It will

take around six months to be functional. A call center will be set up as a CRM initiative, which uses information from the data

warehouse with the help of the Base24 switch.


Documents

INFO SYS MGMT OF PNB