PUNJAB NATIONAL BANK
INTRODUCTION
PNB is a state owned financial services company. The founder was Lal
Lajpat Rai
• Registered on May 19, 1894.
• Second largest government-owned commercial bank.
• The bank was Incorporated under the Act VI of 1882, Indian Companies
Act, the Bank commenced operations on April 12, 1895 from Lahore, with
an authorised total capital of Rs 2 lakh and working capital of Rs 20,000.
Till now it has -
• 6564 branches(31.3.2015) across 764 cities which includes 9 overseas
branches and 69 Circle offices, 8348 ATMs.
• More than 80 million satisfied customers.
BANKING PRODUCTS OF PNB
TERM LENDING
Repayment to start one month after disbursement of the loan. The
Overdraft Limit shall be adjusted within the remaining period of service or
in maximum period of 72 months by reducing Drawing Power (DP)
equivalent to EMI amount at the beginning of every month.
PNB Housing Loan: Designed for individuals to finance the purchase,
construction, or renovation of residential properties.
PNB Car Loan: Tailored for individuals looking to finance the purchase
of a new or used car.
PNB Education Loan: Intended to support the education expenses of
students pursuing higher studies in India or abroad
PNB Personal Loan: A general-purpose loan for individuals to meet
various personal financial requirements.
PNB Business Loans: Targeted at businesses for funding capital
expenditures, expansion, or other business-related needs.PNB Loan
Against Property (LAP): Allows individuals to avail loans by mortgaging
their residential or commercial properties.
Interest Rates
Home loans: The fixed interest rate for home loans is 7.90% for up to 30
years. The floating interest rate is 8.40% for up to 30 years.
Personal loans: The fixed interest rate for personal loans is 9.90% for up
to 5 years. The floating interest rate is 13.90% for up to 5 years.
Auto loans: The fixed interest rate for auto loans is 7.95% for up to 7
years. The floating interest rate is 9.45% for up to 7 years.
Business loans: The fixed interest rate for business loans is 8.40% for up
to 7 years. The floating interest rate is 11.40% for up to 7 years
SHORT TERM FINANCE
PNB offers working capital finance to meet short-term fund requirements
for managing the daily operations of businesses. The bank extends its
working capital finance to various segments of industry, trade, and the
services sector. Assistance is provided through both fund-based and
non-fund-based facilities to corporates, partnership firms, proprietary
concerns, and others. Funded facilities include cash credit, demand loans,
and bill discounting. Non-funded instruments comprise letters of credit
(inland and overseas) as well as bank guarantees (performance and
financial) to cover advance payments, bid bonds, and other such needs.
PNB offers a variety of short-term finance options to meet the working
capital needs of businesses. These options include:
● Cash credit: A revolving credit facility that allows businesses to
draw funds as needed, up to a sanctioned limit.
● Overdraft: A facility that allows businesses to overdraw on their
current account balance up to a sanctioned limit.
● Bill discounting: A facility that allows businesses to sell their
unpaid bills to PNB at a discounted rate to receive immediate
cash.
Interest Rates
The interest rates for PNB's short-term finance options vary depending
on the type of facility, the loan amount, the loan tenure, and the
borrower's credit score. However, as of November 27, 2023, the
following are the applicable interest rates for some of PNB's most
popular short-term finance options:
The interest rates for PNB's short-term finance options are as follows:
● Cash credit: The floating interest rate for cash credit is 8.40% for
up to 3 years.
● Overdraft: The floating interest rate for overdraft is 8.90% for up
to 3 years.
● Bill discounting: The floating interest rate for bill discounting is
9.40% for up to 3 years.
WORKING FINANCE CAPITAL
Punjab National Bank (PNB) offers a variety of working capital finance
options for businesses of all sizes including bill discounting and export
credit . The interest rates for these products vary depending on the type
of facility, the loan amount, and the creditworthiness of the borrower.
Types of Working Capital Finance Offered by PNB
Overdraft: An overdraft is a revolving line of credit that businesses can
use to meet their short-term cash flow needs. The interest rate for an
overdraft is typically higher than the interest rate for a term loan.
Cash Credit: A cash credit is a type of loan that businesses can use to
finance their inventory or receivables. The interest rate for a cash credit
is typically lower than the interest rate for an overdraft.
Bills Discounting: Bills discounting is a facility that allows businesses
to sell their bills of exchange to PNB at a discounted rate. This can
provide businesses with immediate cash flow.
Letter of Credit: A letter of credit is a guarantee that PNB will pay a
supplier if the business is unable to do so. This can help businesses to
secure better terms from their suppliers.
Interest Rates for Working Capital Finance
The interest rates for working capital finance from PNB vary depending
on the type of facility, the loan amount, and the creditworthiness of the
borrower. However, as of July 2023, the following interest rates were
applicable:
Overdraft: 8.25% to 10.75%
Cash Credit: 7.75% to 9.25%
Bills Discounting: 7.00% to 8.50%
Letter of Credit: 0.50% to 1.00%
Eligibility for Working Capital Finance
To be eligible for working capital finance from PNB, businesses must
meet the following criteria:
Have a good credit history.
Have a strong financial track record.
Have a viable business plan.
Bill Discounting
Bill discounting involves selling unpaid invoices to PNB at a discounted
rate. This allows businesses to access immediate cash without waiting for
customers to pay the invoices. The interest rate for bill discounting
typically ranges from 7.00% to 8.50% per annum.
Eligibility for Bill Discounting
To be eligible for bill discounting, businesses must meet the following
criteria:
Have a good credit history.
Have a strong financial track record.
Have a viable business plan.
Possess valid invoices with clear payment terms.
Provide necessary documentation, including invoices, customer profile,
and financial statements
Benefits of Bill Discounting
Immediate cash flow to meet working capital needs.
Improves liquidity and financial flexibility.
No additional collateral required.
Flexible financing options tailored to business needs.
Export Credit
Export credit is a financing solution designed to support businesses
engaged in international trade. PNB offers various export credit facilities,
including pre-shipment and post-shipment credit, to help exporters manage
their cash flow and expand their business globally. The interest rate for
export credit typically ranges from 7.50% to 9.00% per annum.
Eligibility for Export Credit
To be eligible for export credit, businesses must meet the following
criteria:
Have a valid exporter licence.
Possess a strong export track record.
Demonstrate financial stability and creditworthiness.
Provide necessary documentation, including export contracts, shipping
documents, and insurance policies.
NON-FUND BASED SERVICES OF PNB
BANK GUARANTEES
Bank guarantees are a type of financial instrument that provides a
guarantee from one party (the guarantor) to another party (the beneficiary)
that a specific obligation will be fulfilled. PNB offers a variety of bank
guarantees, including bid guarantees, performance guarantees, advance
payment guarantees, and financial guarantees.
Benefits of Bank Guarantees
Enhanced creditworthiness
Mitigating risks
Securing contracts
Facilitating trade
LETTER OF CREDIT
Letters of credit are another type of financial instrument that is used to
facilitate international trade. A letter of credit is a promise from one bank
(the issuing bank) to another bank (the beneficiary bank) that the issuing
bank will pay the beneficiary bank a specified amount of money if the
exporter meets the terms and conditions of the letter of credit.
COLLECTION OF BILLS AND DOCUMENT
Collection of bills and documents is a service that PNB offers to
businesses that are involved in international trade. This service involves
PNB collecting payment from the importer on behalf of the exporter.
VALUE ADDED SERVICES
Punjab National Bank (PNB): Enhancing Business Efficiency with
Value-Added Services
In the dynamic realm of business, efficiency and risk management are
paramount to success. Punjab National Bank (PNB) recognizes this critical
need and empowers businesses with a comprehensive suite of value-added
services designed to streamline operations, enhance financial management,
and mitigate risks.
CASH MANAGEMENT: OPTIMISING FINANCIAL
FLOWS
PNB's cash management solutions empower businesses to optimise their
cash flow, ensuring that funds are readily available when needed.
Concentration accounts centralise cash holdings from multiple locations,
while sweep accounts automatically transfer excess funds to high-yielding
accounts. Electronic banking platforms provide real-time visibility into
account balances and transaction history.
VENDOR FINANCING: STRENGTHENING SUPPLY
CHAIN RELATIONSHIPS
PNB's vendor financing solutions foster strong relationships with suppliers
by ensuring timely payments. Supplier finance programs extend payment
terms without affecting the business's cash flow. Factoring services
provide immediate cash flow by enabling businesses to sell their invoices
to PNB at a discounted rate.
REAL-TIME GROSS SETTLEMENT (RTGS):
FACILITATING SEAMLESS HIGH-VALUE TRANSFERS
PNB's RTGS services facilitate the swift and secure transfer of large funds
between banks. This service is particularly valuable for high-value
transactions such as inter-bank transfers, government payments, and
large-ticket settlements.
CORPORATE SALARY SOLUTIONS: STREAMLINING
PAYROLL PROCESSES
PNB's corporate salary solutions streamline payroll processes, ensuring
timely and accurate salary payments to employees. Salary packaging
options empower employees to tailor their salary receipt methods, while
payroll outsourcing services alleviate the administrative burden on
businesses.
FOREX MANAGEMENT: NAVIGATING GLOBAL
FINANCIAL LANDSCAPES
PNB's forex management solutions equip businesses with the tools to
navigate the complexities of international trade and currency fluctuations.
Foreign exchange hedging strategies protect against exchange rate risks,
while trade finance services provide financing for cross-border
transactions.
DERIVATIVES DESK: TAILORED RISK MANAGEMENT
STRATEGIES
PNB's derivatives desk offers businesses access to a range of derivatives
products, including forwards, futures, options, and swaps. These
instruments can be employed to hedge against risks, speculate on market
movements, or enhance investment returns.
TAX COLLECTION: SIMPLIFYING TAX COMPLIANCE
PNB acts as a trusted tax collection agent for the government, simplifying
tax compliance for businesses. The bank facilitates the collection of
various taxes, including income tax, service tax, and excise duty.
EMPLOYEE TRUST SERVICES: SECURING EMPLOYEE
WELFARE
PNB's employee trust services safeguard the financial well-being of
employees. The bank offers provident funds, pension plans, and gratuity
schemes, ensuring a secure future for employees.
INTEREST BANKING: DIVERSIFYING INVESTMENT
OPTIONS
PNB's interest-bearing products provide businesses with diverse
investment opportunities to optimise their financial returns. Savings
accounts offer convenient access to funds, while fixed deposits and
recurring deposits provide stable returns over time.
ATM TIE-UP: CONVENIENT ACCESS TO FUNDS
PNB's extensive ATM network ensures that its customers have convenient
access to their funds across India. Additionally, tie-ups with other banks
enable customers to withdraw cash from ATMs without incurring charges.
PNB's value-added services empower businesses to operate seamlessly,
manage their finances effectively, and navigate the complexities of the
global business landscape. By providing tailored solutions and fostering
strong partnerships, PNB is committed to driving business success and
contributing to economic growth.
CMS Info Systems has completed the execution of ATM Managed
Services of 5,200+ ATMs for Punjab National Bank (PNB), becoming
PNB's largest provider of ATM Managed Services.
INTERNATIONAL BANKING
Punjab National Bank (PNB) offers a comprehensive suite of international
banking solutions catered to both exporters and importers, facilitating
seamless cross-border trade and supporting businesses in their global
endeavours.
FOR EXPORTERS:
PRE-SHIPMENT FINANCE:
* Working capital financing for export-related expenses, such as raw
material procurement, production costs, and labour expenses.
* Flexible financing options tailored to the specific needs of exporters.
POST-SHIPMENT FINANCE:
* Forfaiting: A specialised financing solution where PNB purchases the
exporter's bills of exchange at a discounted rate, providing immediate cash
flow.
* Factoring: PNB assumes the responsibility of collecting export
receivables from the importer, relieving the exporter of the risk and
administrative burden.
BILL PURCHASING AND DISCOUNTING:
* PNB purchases or discounts export bills of exchange, providing
exporters with immediate cash flow.
* This solution helps exporters expedite their payment cycles and enhance
their working capital management.
BANK GUARANTEES:
* PNB issues various types of bank guarantees, such as bid guarantees,
performance guarantees, and advance payment guarantees, to assure
importers of the exporter's performance obligations.
* These guarantees protect exporters from potential financial losses arising
from non-performance by the importer.
EXPORT LETTERS OF CREDIT:
* PNB issues letters of credit to exporters, assuring them of payment upon
presentation of the required documents.
* This solution enhances the exporter's creditworthiness and facilitates
international trade transactions.
FOR IMPORTERS:
BILL COLLECTION:
* PNB collects bills of exchange from the exporter on behalf of the
importer, ensuring timely and secure payment processing.
* This service reduces the importer's risk of non-payment and streamlines
their payment processes.
IMPORT LETTERS OF CREDIT:
* PNB issues letters of credit to importers, assuring the exporter of
payment upon shipment of goods or services.
* This solution protects importers from potential financial losses arising
from non-shipment by the exporter.
IMPORT FINANCE:
* PNB provides working capital financing to importers to finance the
purchase of goods or services from overseas suppliers.
* This solution helps importers manage their cash flow and facilitate
timely payment to exporters.
FOREIGN EXCHANGE SERVICES:
* PNB offers a range of foreign exchange services, including currency
exchange, remittances, and hedging solutions.
* These services help importers manage foreign exchange risks and
optimize their international transactions.
PNB's international banking services are designed to support businesses of
all sizes in their global expansion efforts. By providing tailored solutions
and expertise in international trade, PNB empowers businesses to navigate
the complexities of cross-border transactions and achieve their global
aspirations.
REMITTANCE SERVICES
Punjab National Bank (PNB) offers a comprehensive suite of remittance
services to facilitate the secure and efficient transfer of funds across
borders. These services cater to both individuals and businesses, enabling
them to send and receive money internationally with ease and
convenience.
Key Features of PNB's Remittance Services:
Wide Network: PNB's extensive network of correspondent banks
worldwide ensures seamless and efficient transfer of funds to over 200
countries.
Competitive Exchange Rates: PNB offers competitive exchange rates,
minimising the cost of remittances and maximising the value transferred.
Secure Transactions: PNB employs robust security measures, including
multiple layers of authentication and data encryption, to safeguard all
remittance transactions.
Convenient Services: PNB provides a range of remittance options to suit
individual and business needs, including telegraphic transfers (TT),
foreign currency demand drafts (FCDDs), online remittances, and
traveller's cheques.
Customer Support: PNB's dedicated customer support team is available to
assist with remittance-related queries and concerns, providing guidance
throughout the remittance process.
UNIVERSAL BANKING
PNB is a universal bank, offering a comprehensive range of financial
services to meet the diverse needs of individuals, businesses, and
institutions. Their universal banking model encompasses a wide spectrum
of services, including:
Banking: PNB provides a full suite of banking services, including deposit
accounts, loans, payment solutions, and wealth management services.
Insurance: PNB offers a range of insurance products, including life
insurance, health insurance, and general insurance, through its insurance
arm, PNB Insurance Services Limited.
Mutual Funds:*PNB acts as a distributor for various mutual funds,
providing investment opportunities in equity, debt, and hybrid funds.
Capital Market: PNB's capital market services include merchant banking,
investment banking, and securities trading.
Project Finance: PNB offers specialised project finance solutions for
infrastructure, energy, and other large-scale projects.
BENEFITS OF PNB'S UNIVERSAL BANKING MODEL:
Convenience: PNB's one-stop-shop approach provides customers with the
convenience of accessing a wide range of financial services under one
roof.
Expertise: PNB's dedicated teams possess specialised expertise in various
financial domains, ensuring tailored solutions for specific needs.
Integrated Solutions: PNB's universal banking model enables seamless
integration of financial services, providing customers with a holistic
financial experience.
Global Reach: PNB's international presence and correspondent banking
network facilitate cross-border financial transactions and support global
business expansion.
PNB's commitment to universal banking empowers customers to manage
their finances effectively, access a diverse range of financial products and
services, and achieve their financial goals.
