Punjab National Bank

Punjab under the British especially after annexation in 1849 witnessed a period of rapid development giving rise to a new educated class fired with a desire for freedom from the yoke of slavery. Amongst the cherished desires of this new class was also an overriding ambition to start a Swadeshi Bank with Indian Capital and management representing all sections of the Indian community. The idea was first mooted by Rai Mool Raj of Arya Samaj who, as reported by Lala Lajpat Rai, had long cherished the idea that Indians should have a national bank of their own. He felt keenly "the fact that the Indian capital was being used to run English banks and companies, the profits accruing from which went entirely to the Britishers whilst Indians had to contend themselves with a small interest on their own capital".

At the instance of Rai Mool Raj, Lala Lajpat Rai sent round a circular to selected friends insisting on an Indian Joint Stock Bank as the first special step in constructive Swadeshi. Lala Harkrishan Lal who had returned from England with ideas regarding commerce and industry, was eager to give them practical shape.

'PNB was born on May 19, 1894. The founding board was drawn from different parts of India professing different faiths and a varied back-ground with, however, the common objective of providing country with a truly national bank which would further the economic interest of the country.

The Bank opened for business on 12 April, 1895. The first Board of 7 Directors comprised of Sardar Dayal Singh Majithia, who was also the founder of Dayal Singh College and the Tribune; Lala Lalchand one of the founders of DAV College and President of its Management Society; Kali Prosanna Roy, eminent Bengali pleader who was also the Chairman of the Reception committee of the Indian National Congress at its Lahore session in 1900; Lala Harkishan Lal who became widely known as the first industrialist of Punjab; EC Jessawala, a well known Parsi merchant and partner of Jamshedji & Co. of Lahore; Lala Prabhu Dayal, a leading Rais, merchant and philanthropist of Multan; Bakshi Jaishi Ram, an eminent Civil Lawyer of Lahore; and Lala Dholan Dass, a great banker, merchant and Rais of Amritsar. Thus a Bengali, Parsi, a Sikh and a few Hindus joined hands in a purely national and cosmopolitan spirit to found this Bank which opened its doors to the public on 12th of April 1895. They went about it with a Missionary Zeal. Sh. Dayal Singh Majithia was the first Chairman, Lala Harkishan Lal, the first secretary to the Board and Shri Bulaki Ram Shastri Barrister at Lahore, was appointed Manager.

A Maiden Dividend of 4% was declared after only 7 months of operation. Lala Lajpat Rai was the first to open an account with the bank which was housed in the building opposite the Arya Samaj Mandir in Anarkali in Lahore. His younger brother joined the Bank as a Manager. Authorised total capital of the Bank was Rs. 2 lakhs, the working capital was Rs. 20000. It had total staff strength of nine and the total monthly salary amounted to Rs. 320.

The first branch outside Lahore was opened in Rawalpindi in 1900. The Bank made slow, but steady progress in the first decade of its existence. Lala Lajpat Rai joined the Board of Directors soon after. in 1913, the banking industry in India was hit by a severe crisis following the failure of the Peoples Bank of India founded by Lala Harkishan Lal. As many as 78 banks failed during this crisis. Punjab National Bank survived. Mr. JH Maynard, the then Financial Commissioner, Punjab, remarked...."Your Bank survived...no doubt due to good management". It spoke volumes for the measure of confidence reposed by the public in the Bank's management.

The years 1926 to 1936 were turbulent and loss ridden ones for the banking industry the world over. The 1929 Wall Street crash plunged the world into a severe economic crisis.

It was during this period that the Jalianwala Bagh Committee account was opened in the Bank, which in the decade that followed, was operated by Mahatma Gandhi and Pandit Jawaharlal Nehru. The five years from 1941 to 1946 were ones of unprecedented growth. From a modest base of 71, the number of branches increased to 278. Deposits grew from Rs. 10 crores to Rs. 62 crores. On March 31, 1947, the Bank officials decided to leave Lahore and transfer the registered office of the Bank to Delhi and permission for transfer was obtained from the Lahore High Court on June 20, 1947.

PNB was then housed in the precincts of Sreeniwas in the salubrious Civil Lines, Delhi. Many a staff member fell victim to the widespread riots in the discharge of their duties. The conditions deteriorated further. The Bank was forced to close 92 offices in West Pakistan constituting 33 percent of the total number and having 40% of the total deposits. The Bank, however, continued to maintain a few caretaker branches.

The Bank then embarked on its task of rehabilitating the displaced account holders. The migrants from Pakistan were repaid their deposits based upon whatever evidence they could produce. Such gestures cemented their trusts in the bank and PNB became a symbol of Trust and a name you can bank upon. Surplus staff posed a big problem. Fast expansion became a priority. The policy paid rich dividends by opening up an era of phenomenal growth.

In 1951, the Bank took over the assets and liabilities of Bharat Bank Ltd. and became the second largest bank in the private sector. In 1962, it amalgamated the Indo-Commercial Bank with it. From its dwindled deposits of Rs. 43 crores in 1949 it rose to cross the Rs. 355 crores mark by the July 1969. Its number of offices had increased to 569 and advances from Rs. 19 crores in 1949 to Rs. 243 crores by July 1969 when it was nationalised.

Since inception in 1895, PNB has always been a "People's bank" serving millions of people throughout the country and also had the proud distinction of serving great national leaders like Sarvshri Jawahar Lal Nehru, Gobind Ballabh Pant, Lal Bahadur Shastri, Rafi Ahmed Kidwai, Smt. Indira Gandhi etc. amongst other who banked with us.

Studies in India:

1.Approved courses leading to Graduate/ Post Graduate degree and PG Diplomas conducted by recognized colleges/ universities recognized by UGC/ Govt./ AICTE/ AIBMS/ ICMR etc.

2.Courses like ICWA, CA, CFA etc.

3.Courses conducted by IIMs, IITs, IISc, XLRI. NIFT, NID etc.

4.Regular Degree/Diploma courses like Aeronautical, pilot training, shipping, nursing etc., approved by Director General of Civil Aviation/Shipping, if the course is pursued in India.

5.Approved courses offered in India by reputed foreign universities.

6.Admission under Management Quota may also be considered. 

7.For studying part-time job oriented courses (evening classes or otherwise), which are approved/recognized by the regulatory body/ authority. 

8.Job oriented specialized programmes like maritime courses which are offered in collaboration with foreign institutions and may not be having recognition in India. 

Studies abroad:

Graduation:

For job oriented professional/technical courses offered by reputed universities.

Post graduation:

MCA, MBA, MS, etc.

Courses conducted by CIMA- London, CPA in USA etc.

Degree/Diploma courses* like aeronautical, pilot training, shipping etc. provided these are recognized by competent regulatory bodies in India/abroad for the purpose of employment in India/abroad.

*Diploma Course and certificate courses shall not be covered under the eligible courses for study abroad except as mentioned above.

Eligibility:

Student eligibility:

a)Should be an Indian National.

b)Should have secured admission to a higher education course in recognized institutions  in India or Abroad through Entrance Test/ Merit Based Selection process after completion of HSC(10 plus 2 or equivalent). OR Where the admission is purely based on marks scored in qualifying examinations, there is a cut off percentage of marks of 50% for SC/ST and 60% for General category.

Expenses considered for Loan:

1.Fee payable to College / School / Hostel

2.Examination / Library / Laboratory fee.

3.Purchase of books / equipments / instruments / uniforms.

4.Caution Deposit / Building Fund / Refundable Deposit supported by Institution Bills / Receipts,

5.Travel Expenses / Passage money for studies abroad.

6.Purchase of computers at reasonable cost, if required for completion of the course.

7.Insurance premium for student borrower, if applicable

8.Any other expense required to complete the course - like study tours, project work, thesis etc.

Quantum of Finance: 

Need based finance, subject to employability and earning potential of the student with prescribed margin as per the following ceilings:

For studies in India:

Maximum Rs.10.00 lacs.

For studies abroad:

Maximum Rs.20.00 lacs.

Margin:

Upto Rs.4.00 lacs:

Nil.

Above Rs.4.00 lacs:

Studies in India:

5%

Studies Abroad:

15%

Security:

Upto Rs.4.00 lacs:

Parent(s)/guardian be made joint borrower (s). No Security

Above Rs 4.00 lacs and Upto Rs 7.5 lacs:

Besides the parent(s)/guardian executing the documents as joint borrower(s), collateral security in the form of suitable third party guarantee will be taken

Above Rs 7.5 lacs:

Parent(s)/guardian be joint borrower(s).Tangible collateral security of suitable value acceptable to bank alongwith the assignment of future income of the student for payment of installments

The security can be in the form of land / building / Govt. Securities / Public Sector Bonds / Units of UTI, NSC, KVP, LIC Policy, Gold, Shares/ Mutual Funds/ Debentures, Bank Deposit in the name of the student parent / guardian or any other third party or any other tangible security acceptable to the bank with suitable Margin.

Rate of Interest:

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Repayment:

Repayment of loan will be in equated monthly instalments (EMIs) for period as under:

For loans upto Rs.7.50 lac:

upto 10 years

For loans above Rs.7.50 lac:

upto 15 years

Repayment holiday/Moratorium:

Course period + 1 year or 6 months after getting   job, whichever is earlier.

Note :

No prepayment penalty is levied for prepayment of loan.

Sanctioning Authority may consider telescoping of the repayment with stepped up installment with passage of time over the repayment period in cases where salary levels at the start of the career do not facilitate comfortable payment of EMI (e.g. professionals like Doctors)

Upfront Fee:

For Study in India:

Nil

For Study abroad:

1% with a minimum of Rs. 10,000/-(refundable on availment of the loan amount)

Documentation Charges:

Upto Rs. 4 lacs:

Rs.270/- + Service Tax & Education Cess

Above Rs.4 lacs:

Rs.450/- + Service Tax & Education Cess

Additional Benefits provided to the students by PNB:

*Simple interest is charged during the Study period + Moratorium period.

*A rebate of 0.50% in rate of interest permitted to women beneficiaries for loans up to Rs. 10 lac for studies in India and Rs 20 lac for studies abroad for existing as well as new girl student borrowers wef. 08.03.2009.

*1% interest concession may be provided for loanees if the interest is serviced during the study period/moratorium period and regular repayment of monthly installmets during repayment period.

*The loan be disbursed in stages as per the requirement/ demand directly to the Institutions/ Vendors of equipments/ instruments to the extent possible.

*Second time Education Loan can be sanctioned to the same student borrower for completion of next higher course.

Full interest subsidy is provided during the moratorium period to students, who have taken education loan and belong to Economically Weaker Section (EWS), with an annual gross parental family income upper limit of Rs.4.50 lakh per year from all sources.   

Detail is as under:

Central Scheme to provide Interest Subsidy- (CSIS):

The scheme provides full interest subsidy during the period of moratorium on education loans taken by EWS students for pursuing any of the approved courses of studies in technical / professional streams from recognized institutions in India.

Applicability:

Linked with the existing education loan scheme of IBA and  is restricted to students enrolling in recognized professional courses ( after class XII) in India, in educational institutions established by Act of Parliament, other institutions recognized by the concerned statutory body, IIMs and other institutions set up by the Central Government .

Also applicable to the students of accredited universities/ institutions and recognized professional courses, as per Annexure I, which are administered by the Ministry of Tourism.

Moratorium Period:

Course Period plus one year or six months after getting job, whichever is earlier.

Income Limit / Proof:

To avail the benefit, Income certificates issued by designated state authorities to be submitted. Details available with branches. List of issuing authority as per Annexure II

Eligibility for Subsidy:

The interest subsidy shall be available to the eligible students only once, either for the first undergraduate degree course or the post graduate degrees / diplomas in India inclusive of integrated courses (graduate + post graduate).

Interest subsidy under this scheme shall not be available for those students who either discontinue the course midstream or who are expelled from the Institutions on disciplinary or academic grounds.

However, the interest subsidy will be available for the actual period of study, only if the discontinuation was due to medical grounds for which necessary documentation to the satisfaction of the Head of educational institution will have to be given.

Check List:

While applying for the loan, the borrower is required to furnish the following information/papers:

o    Loan application on Bank's format.

o    Passport size photograph

o    Proof of Address.

o    Proof of Age.

o    Proof of having cleared last qualifying examination.

o    Letter of admission in professional, technical or vocational courses.

o    Prospectus of the course wherein charges like Admission Fee, Examination Fee, Hostel Charges etc. are mentioned.

o    Details of Assets & Liabilities of parents/co-obligants/guarantors.

o    In case loan is to be collaterally secured by mortgage of IP, Copy of Title Deed, Valuation Certificate and Non Encumbrance Certificate from approved Lawyer of the Bank to be obtained at the cost of the borrower.

o    Photocopy of Passport & Visa, in case of study abroad.

Copy of PAN of student Borrower (If PAN is not available at the time of sanction, the same be obtained within one year of disbursement of loan).

Any other document/information, depending upon the case and purpose of the loan.

*(The above CHECKLIST is only illustrative, not exhaustive. For details, please contact our nearest Branch Office).

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