Bank of Maharashtra


BSE: 532525 | NSE: MAHABANK | ISIN: INE457A01014 
Market Cap: [Rs.Cr.] 3,210 | Face Value: [Rs.] 10
Industry: Banks - Public Sector

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Director's Report

DIRECTORS

Your Directors have great pleasure in presenting before you the Annual Report of theBank along with the audited Balance Sheet, Profit & Loss Account and the Report onBusiness and Operations for the year ended March 31, 2013.

1. MANAGEMENT DISCUSSION AND ANALYSIS:

1.1 Economic scenario 2012-13

The global economic environment in the year 2012-13 was challenging with the spilloverof last years looming at large. However, downside tail risks have receded in 2012-13because of the supportive policy action in the euro area and the measures to tackle fiscalcliff in US. Growth rate of the fastest growing economy was also impacted but it continuesto remain the global powerhouse, directly accounting for about a third of global growth.Japan's economy stopped contracting in Q4 of 2012. Among BRICS countries, growthaccelerated in Brazil and South Africa. Growth in emerging & developing economiesbottomed due to global headwinds. Global Inflation scenario remained benign as demandremained weak and improved supply prospects in key commodities such as oil and food alsorestrained commodity price pressures. International financial market stress moderatedgreatly following aggressive monetary easing by major central banks, as also policyinitiatives on fiscal consolidation in the euro area economies, encouraging capital flowsinto emerging economies.

The year opened wherein number of developed economies, especially in Europe, hadalready fallen into a double-dip recession, while those facing sovereign debt distressesmoved into even deeper recession. Many developed economies were caught in downward spiraldynamics with high unemployment, weak aggregate demand compounded by fiscal austerity, andhigh public debt burdens. Developing economies could not remain aloof from thedevelopments around them. However, in the later part of the year, there were some signs ofhope. Two of the biggest achievements of the past year were namely averting the breakup ofeuro area and fiscal contraction due to the fiscal cliff in US. Moreover US experiencedsome signs of recovery in the housing sector. In terms of International Monetary Fund -World Economic Outlook (IMF-WEO) the global economy grew at the rate of 3.2 per cent inthe year 2012 and is projected to grow at 3.3 per cent in the year 2013.

On domestic front, Indian economy bottomed in the year 2012-13, after achieving 6.2percent in 2011-12. The decline in the growth rate may be analyzed from the viewpoint ofclassical "inflation-growth" trade off. Indian economy grew at the rate of 6.7per cent in the wake of global recession in the year 2008-09. Government & ReserveBank of India provided the desired stimulus for maintaining the growth momentum, whichensured a pickup in growth in the years 2009 to 2011. However, the stimulus also led tooverheating of the economy. As a result, Indian economy experienced increase in the pricesleading to the vicious cycle of inflation-growth trade-off.

Among emerging economies, only China and Indonesia are growing faster than India. Asper the advance estimates of Central Statistical Organization, Indian Economy grew by 5.0percent in the year 2012-13 with no sector remaining unaffected. Rabi production isexpected to be better than a year ago. However, it may not fully offset the decline inkharif output. The second advance estimates of crop production (kharif and rabi) for2012-13 indicate decline of 3.5 percent in relation to final estimates of previous year.Growth in industrial production decelerated to 0.9 per cent during 2012-13(April-February) from 3.5 per cent in the corresponding period of the previous year.

In view of the steps taken, headline inflation, moderated to an average of 7.3 per centin 2012-13 with the year-end inflation recording at 6.0 per cent. Notwithstanding themoderation in overall inflation, elevated food price inflation was a source of upsidepressure through the year owing to the unusual spike in vegetable prices in April 2012followed by rise in cereal prices on account of the delayed monsoon. Even as WPI inflationeased, retail inflation, as measured by the new consumer price index, averaged 10.2 percent during 2012-13, largely driven by food inflation. Government started with the reformsin fuel prices, which will pay back in the long run.

Performance of Indian Banking Industry in 2012-13

Liquidity remained under pressure throughout the year because of persistently highgovernment cash balances with the Reserve Bank of India (RBI) and elevated incrementalcredit to deposit ratio for much of the year. The net average liquidity borrowings by theBanks under the daily liquidity adjustment facility (LAF), was at Rs. 730 billion duringthe first half of the year, which increased significantly to Rs. 1,012 billion during thesecond half. In order to alleviate liquidity pressures, the Reserve Bank lowered the CRRof SCBs cumulatively by 75 bps on three occasions and the statutory liquidity ratio (SLR)by 100 bps during the year. Additionally, the Reserve Bank injected liquidity to the tuneof Rs. 1,546 billion through open market operation (OMO) purchase of GovernmentSecurities.

Money supply (M3) growth was noted at 13.3 per cent by end-March 2013, slightly abovethe RBI revised indicative trajectory of 13.0 per cent. Non - food credit growthdecelerated from 18.2 per cent at the beginning of 2012-13 and remained close to 16.0 percent for the major part of the year. By March 2013, non-food credit growth dropped to 14.0percent, lower than the RBI indicative projection of 16.0 per cent, reflecting some riskaversion and muted demand.

Bank credit to all major sectors in 2012-13 showed positive growth with an exception ofmedium industries in the industry sector; shipping and professional services in theservices sector and consumer durables and advances against shares and bonds in thepersonal loans sector.

Industry remained the dominant sector accounting for around 41 per cent of total creditdisbursed by the banks, followed by services sector at around 21 per cent. While foodcredit, primarily advanced for food procurement, has fluctuated, credit to the agricultureand allied sector has grown after Q3 of 2011-12.

Outlook

The impact of sequestration in the US on the global economy is likely to be muted inview of legislation initiated to avert the debt ceiling. Nevertheless, lead indicatorspoint to sluggish global growth. Political economy risks that block or delay credible anddetermined policy actions in advanced economies (AEs) are inhibiting recovery. ForEmerging Developing Economies (EDEs), risks of spillovers from AEs remain significant.While global inflationary pressures are likely to be subdued, given still large outputgaps, several EDEs could potentially face the threat of elevated energy prices. HoweverIMF's latest World Economic Outlook (WEO) report forecasts real global GDP growth to riseto 4 per cent in 2014 from 3.3 per cent projected for 2013. Growth in emerging market anddeveloping economies is expected to remain robust; strengthening from about 5.0 per centin 2012 to 5% per cent in 2013 and 5% per cent in 2014.

During 2013-14, domestic economic activity is expected to show only a modestimprovement over last year. Although, Government has taken a host of policy reforms whichwould provide impetus to the growth dynamics, but a lot is dependent on global cues. RBIhas for 2013-14 projected a GDP growth at 5.7 per cent and WPI inflation is expected to berange bound around 5.5 per cent during 2013-14.

The performance of the financial sector in India, will be influenced by both short-termand long-term factors. In the long run, a strong growth in global output will be essentialfor sustaining investment activities across the globe, including India. In the short run,factors like expectation of higher relative returns, risk perception of investors, andglobal liquidity will decide the level of flow of funds to the domestic equity market.Consistent with the growth projections & inflation threshold RBI has projected M3growth for 2013-14 at 13.0 per cent, aggregate deposits of Scheduled Commercial Banks(SCBs) at 14.0 per cent and growth in non food credit at 15.0 per cent.

2. PERFORMANCE OF YOUR BANK 2012-13

2.1 Business

Total business of your Bank stood at Rs. 1,70,734 crore as on 31.03.2013, as comparedto Rs. 1,33,508 crore a year ago, registering a year-on-year growth of 27.88 per cent.

2.2 Deposits

Total deposits of the Bank stood at Rs. 94,337 crore, up by 23.27 per cent over thelevel of Rs. 76,529 crore as at the end of March 2012.

Current & Savings Bank (CASA) deposits increased by 21.64 per cent and stood at Rs.38,476 crore as on 31.03.2013. Share of CASA deposits in total deposits of your Bank stoodat 40.79 per cent as on 31.03.2013 which is one of the highest among Public Sector Banks.

2.3 Credit Deployment

The Bank has put in place a lending policy in conformity with the guidelines issued byRBI and also the lending norms of the Government of India. It emphasizes on qualitativecredit growth and ensures compliance with regulatory requirements as well as theprudential exposure limits.

Gross advances of the Bank increased from Rs. 56,979 crore as on 31.3.2012 to Rs.76,397 crore as on 31.3.2013 with growth of 34.08 per cent. Passionate service orientationcoupled with speedier sanctions and customer centric approach enabled the Bank inregistering a robust credit growth much above the banking industry average during the year2012-13.

With a higher Credit growth, the Credit deposit ratio (CDR) as on 31.3.2013 stood at80.98 per cent as against 74.45 per cent as on 31.03.2012.

Several steps have been taken for improving credit delivery mechanism whereby theturnaround time is brought down without compromising the overall quality of credit.

The Mid corporate vertical which has been created over two years ago, has beenfunctioning successfully and contributing to the robust credit growth of the Bank. Duringthe year 2012-13, the credit under this segment has increased from Rs. 7963 crore to Rs.11472 crore registering growth of 44%. Mid corporate shall continue to be one of thethrust areas for the Bank in future for increasing yield on advances and dispersion ofcredit risk.

2.3.1 Sectoral Deployment of Credit

While financing to various segments of the economy, the Bank has endeavoured tomaintain a diversified credit portfolio, with a view to ensuring credit dispersion acrosssectors. The Bank has continued its efforts to support core, manufacturing and prioritysectors, as well as infrastructure projects, which serve to drive economic growth. Thisfocus of the Bank will continue in future, in line with the national economic growthpriorities.

Industry wise credit deployment as on 31.03.2013 is as under:

Sr. No. Credit deployed Outstanding as on 31.03.2013 Rs. in crore Percen-tage to total credit outstan-ding Outstand-ing as on 31.03.2012 Rs. in crore Percen-tage to total credit outstan-ding
1 Industry 41,307.25 54.49% 31,603.21 55.46%
Of which
i. Infrastructure

12,223.59

16.13%

7,755.14

13.61%

ii. Chemicals, Dyes, Paints etc 1,387.15 1.83% 1,704.72 2.99%
iii. Petroleum 1,552.71 2.05% 769.86 1.35%
iv. Iron & Steel 1,640.21 2.16% 1,082.72 1.90%
v. NBFCs & Trading 12,671.06 16.72% 13,070.08 22.94%
vi. Engineering 2,496.14 3.29% 1,768.28 3.10%
vii. Construction 318.29 0.42% 337.78 0.59%
viii. Other Industries 9018.10 11.90% 5,114.63 8.98%
2 Agriculture 7,378.35 9.73% 6,089.23 10.69%
3 MSME 16,788.21 22.15% 8,630.81 15.15%
4 Housing 6,578.23 8.68% 5,056.34 8.87%
5 Education 551.59 0.73% 489.28 0.86%
6 Exports 1,886.06 2.49% 873.04 1.53%
7 Commercial Real Estate 3,551.63 4.69% 927.41 1.63%

2.3.2 Credit Administration and Monitoring

For the view point of keeping a close track of advance portfolio, Bank has put in placesystems whereby, early warning signals are captured from the Core Banking Solutions (CBS),on daily basis for close monitoring of stressed accounts on near real time basis. Systemgenerated SMS alerts are sent to the customers to pre-empt delinquency. An integratedweb-based reporting has been introduced in the Bank to enable instant communicationbetween branches/Zones/ Head Office for effective monitoring of credit portfolio.

The credit quality of borrowal accounts is further monitored through periodical assetperformance review, credit audits & stock audits. Timely rescheduling of repaymentterms is undertaken in deserving cases.

2.4 Asset Performance

During the Financial Year (FY) 2012-13, total cash recovery in NPAs was Rs. 411.23crore (last year Rs. 379.45 crore). Of this, recovery in Ledger balance was Rs. 198.73crore (f 248.91 crore), recovery in written off accounts was Rs. 156.77 crore (f 96.01crore) and recovery in cases of unapplied interest was Rs. 55.73 crore (f 34.53 crore).This was besides up gradation of NPAs to the tune of Rs. 105.19 crore (f 109.02 crore).

This year's achievement was possible due to intensive follow up adopted by the brancheswith the defaulting borrowers through letters, notices, recovery camps, Lok Adalatas,actions under SARFAESI and through DRTs.

To address and improve recovery in small sized NPAs having ledger balances upto Rs.10.00 lakh, the Bank established additional 5 Micro Asset Recovery Cells (MARCs) at Zonaloffices, thereby making total 25 MARCs. The recovery performance through this vertical wasencouraging with MARCs recovering Rs. 210.53 crore (f 244.75 crore). The share of recoveryof MARCs in total cash recovery of the bank was 51.20% (64.50 per cent).

The Bank continued during this FY a special 'One Time Settlement' (OTS) scheme forrecovery in NPA accounts having ledger balance up to Rs. 5.00 lakh. The total recovery inNPAs under this scheme was Rs. 66.73 crore as against Rs. 59.54 crore in the previousyear.

The Gross NPA ratio of the Bank has improved to 1.49 per cent during the financial yearfrom 2.28 per cent as of 31.03.2012. Similarly the ratio of Net NPAs stood at 0.52 percent as on 31.03.2013 as against 0.84 per cent a year ago. The NPA ratios of the Bank aremuch better than not only of the peer Banks but also of many large Banks.

2.5 Foreign Exchange Business and Export Finance

During the year 2012-13, the Bank has achieved merchant turnover of Rs. 30,437 crore (e25,430 crore) and an inter-bank turnover of Rs. 4,14,162 crore (e 1,58,986 crore) andearned Forex profit of Rs. 60.41 crore (Rs. 43.75 crore). The outstanding export credit ason 31st March 2013 was Rs. 1908.31 crore as against Rs. 873.04 crore as on 31st March2012. The Treasury & International Banking Branch at Mumbai (A-Category branch) and 33B-Category branches across the country cater to the International business needs of thecustomers of the Bank. In order to provide prompt service to Non Resident Indian (NRI)Clients, Bank has a NRI Cell at Deccan Gymkhana Branch, Pune which provides onlineremittance facilities for it's NRI customers.

2.6 Investments

The net investments of the Bank stood at Rs. 31,430.31crore as on 31.03.2013 ascompared to Rs. 26,031.36 crore as on 31.03.2012. Investments under Held to Maturity (HTM)category consist of 81.75 per cent while Available for Sale (AFS) comprised 16.99 per centof total investment portfolio as on 31.03.2013. The net interest income from investmentactivity increased to Rs. 2,231.28 crore from Rs. 1,708.57 crore during the last year, agrowth of 30.59 per cent.

2.7 Borrowings

The borrowings of the Bank as on 31.03.2013 stood at Rs. 12,877.49 crore, includingrefinance availed from RBI, NABARD and SIDBI to the extent of Rs. 4,213.62 crore. Thetotal borrowings as at 31.03.2012 were Rs. 6,944.75 crore.

2.8 Merchant Banking

The Bank handled 122 issues of Commercial Paper amounting to Rs. 19,509 crore for itsclients as an issuing and paying agent during the year and earned a commission income ofRs. 18.97 lakh.

2.9 Depository Services

The Bank is Depository Participant (DP) of Central Depository Services of India Ltd.(CDSL) since September 1999. Account level queries related to Demat account balances etc.are available at the 131 identified branches of the Bank. All the branches of the Bank canopen Demat account through the Demat Cell of Mumbai. The Bank also provides free"EASI" facility (through CDSL) to view account position through internet. Querycompliance facility is available at Maha Seva (Customer Care Centre). The Bank has addedtie up with two Share Broking Companies i.e. Reliance Securities Ltd and VenturaSecurities Ltd for Maha-e-trade (Online Share Trading) Services for its customers alongwith existing Religare Securities Ltd.

In order to add new customers in its fold under Demat, Bank is offering waiver inannual maintenance charges for the Demat Accounts opened under Rajiv Gandhi Equity Schemefor three years.

2.10 Banc assurance

All the branches of the Bank are authorized to sell life and non-life insuranceproducts of Life Insurance Corporation of India and United India Insurance Co. Ltd. undercorporate agency arrangements, respectively. The Bank has sold 65,350 Non-life InsurancePolicies and 34,463 Life Insurance policies during the year 2012-13. The LIC accredited232 branches of the Bank as Bima Bank, besides 22 Zones which were declared as BIMA banks.The Bank collected highest per outlet FPI.

The Bank offers three group insurance schemes namely 'Maha Suraksha Deposit Scheme' alife insurance cover of Rs. 1 lakh for deposit account holders; 'Maha Grih Suraksha' amortgage redemption insurance scheme for those, who are availing Home Loans and 'MahaSwasthya Yojana Scheme', a Family Floater Mediclaim Policy for its customers.

The Bank earned a commission of Rs. 6.58 crore for life insurance, showing growth of 59per cent and Rs. 3.75 crore for non-life insurance business during the year 2012-13.

2.11 Mutual Fund Activity

The Bank has a tie-up with 25 AMCs (Asset Management Companies) for selling Mutual Fundproducts. The mutual fund business mobilized by the Bank earned commission income of Rs.41.30 lakh during the year.

2.12 Government Business

During the year 2012-13, 4,54,493 challans of Direct Taxes were collected, similarly3,38,495 challans of Indirect taxes were collected by the branches. Total commission tothe tune of Rs. 3.20 crore was received on Tax collection business.

The Bank has started processing and crediting monthly pension payments of more than1,10,000 Central Government, Defence, Railway and Telecom pensioners at Central PensionProcessing Cell (CPPC), Pune. The processing and payment for new PPOs/ corrigendum PPOsMaster Data base for Central Government pensioners etc are being handled by CPPC. Thisfacilitates faster and accurate payment of pension as well as quick settlement of funds byRBI. Timely complaint redressal system has also been established for pension complaints.

The unique facility of Direct & Indirect Taxes & VAT collection of Maharashtrais provided by the Bank, at the branch counter in all branches through Maha e-sevaservices. E-payment of Taxes facility available for net banking customers is alsoavailable for Direct / Indirect Taxes / VAT payments (for Govt, of Maharashtra).

The tax payment facility has been introduced for e-payment of custom duty & theMaharashtra State taxes are collected through integration in Govt. Revenue AccountingSystem (GRAS), both online and across the counters. The Bank has added Karnataka and Delhistates for collection of state Government commercial taxes. Bank is offering its servicesin VAT Collection in U.P in all branches.

2.13 Non Interest Income

The non-interest income stood at Rs. 912.00 crore for the year ended 31.03.2013 asagainst Rs. 640.67 crore for the year ended 31.03.2012. Non-interest income (other thanprofit from sale of investment), increased by Rs. 139.50 crore in the FY 2012-13, showinga growth of 22.19% over previous year. The Bank has received higher non interest incomefrom recovery in written off accounts, forex business and other miscellaneous income.

2.14 Income, Expenditure and Profitability

The total income of the Bank grew from Rs. 7,854.63 crore to Rs. 10,525.43 croreindicating a growth of 34.00 per cent during the year.

The detailed income/ expenditure components are as under:

(Rs. in crore)
Particulars 2012-13 2011-12 Variation (per cent)
Interest / discount on advances / bills 7,298.50 5,490.63 32.93
Income on investments 2,231.28 1,708.57 30.59
Interest on interbank lending & other Interest 83.65 14.76 466.73
Total interest income 9,613.43 7,213.96 33.26
Non-interest income 912.00 640.67 42.35
Total Income 10,525.43 7,854.63 34.00
Interest on deposits 5,879.25 4,293.81 36.92
Interest on borrowings 700.83 403.07 73.87
Interest expenditure 6,580.08 4,696.88 40.09
Staff expenses 1,187.82 1,113.02 6.72
Non staff expenses 608.82 529.50 14.98
Total Non interest expenses 1,796.64 1,642.52 9.38
Total Expenses 8,376.73 6,339.39 32.14
Operating Profit 2,148.70 1,515.24 41.81
Provisions and Contingencies

1,389.18

1,084.41

28.10

Net Profit

759.52

430.83

76.29

2.15 Financial ratios

Particulars 2012-13 2011-12
EPS (Rs.) 11.88 7.59
Cost to Income Ratio (per cent) 45.54 52.02
Return on assets (per cent) 0.74 0.55
Return on equity (per cent) 17.32 14.15
Book value per share (Rs.) 67.10 54.06
Profit per Branch (Rs. in lakh) 43.95 27.11
Profit per employee (Rs. in lakh) 5.59 3.12
Business per Branch (Rs. in crore) 98.80 84.02
Business per employee (Rs. in crore) 12.56 9.67
Interest Income as per cent to Average Working Funds 9.33 9.22
Non Interest income as per cent to Average Working Funds 0.88 0.82
Net Interest Margin (per cent) 3.10 3.22
Operating Profit as per cent to Average Working Funds 2.08 1.94
Staff Expenses as a per cent to Average Working Funds 1.15 1.42
Dividend (per cent) 23.00 22.00
Net worth (e Crore)

5,026.57

3,775.42

CRAR (%) (Basel II) 12.59 12.43
Of which, Tier I CRAR (%) (Basel II) 7.57 8.31

2.16 Capital from Government of India

During the year, the Bank received equity share capital amounting to Rs. 406.00 crore(including share premium of Rs. 334.12 crore) from Government of India (GOI) throughallotment of shares on preferential basis. With capital infusion, the share holding of GOIin equity share capital increased to 81.24 per cent as on 31.03.2013.

During the year, the Bank also raised Lower Tier II bonds amounting to Rs. 1000.00crore @ 9.00 per cent p.a. to augment Tier II capital and CRAR.

2.17 Networth

The Bank's Net worth increased from Rs. 3,775.42 crore as on 31.03.2012 to Rs. 5,026.57crore as on 31.03.2013.

2.18 Capital Adequacy Ratio

The Capital Adequacy Ratio of the Bank stood at 12.59 per cent as on 31.03.2013,against the minimum 9 per cent prescribed by RBI in terms of Basel II norms. The Tier Icapital adequacy ratio stood at 7.57 per cent under Basel II.

2.19 Dividend

The Board of Directors have proposed a dividend of 23 per cent for the year ended31.03.2013.

3. ORGANISATION AND SUPPORT SYSTEM

3.1 Branch Expansion

During the year, the Bank opened 139 new branches, the largest number of branchesopened by the Bank in a financial year since inception. As on 31.03.2013, the total branchnetwork comprised of 1728 branches spread over 29 states and 2 union territories. Thebranch network includes specialized branches in the areas of foreign exchange, governmentbusiness, treasury & international banking, industrial finance, small-scale industryand hi-tech agriculture, pension payment, pension processing, retail credit, Self HelpGroups and asset recovery.

Area wise classification of branches as on 31.03.2013 is given in the table below:

Sr. No. Classification As on 31.03.12 As on 31.03.13
1 Rural 546 591
2 Semi-Urban

301

357

3 Urban

319

344

4 Metropolitan

423

436

Total 1589 1728

3.2 Human Resources Management

The Bank has put in place a comprehensive HRM Policy that provides the road map foracquiring appropriate & need based human resources, its development through training,job enrichment, reward and recognition for better performance, career progression, welfareand retention.

During the year, the Bank recruited 253 probationary officers. The Bank also recruited329 Clerks during the year.

Inter scale promotions of officers were carried out for promotions to Scales MMGS IIand above. Total 550 officers were promoted to higher scales in the year 2012-13.

To recognize outstanding performance in Banking activities and to motivate others toperform better, various schemes like Better Managed Branch/ Region trophy, cash incentivesto all staff of Best Performing Branches etc. are in vogue in the Bank. The excellentperforming branch in disbursement of advances to SC/ST community is awarded a RollingTrophy in name of Bharat Ratna Dr. Babasaheb Ambedkar.

During the year, 946 employees ceased to be in service on account of retirement,resignation, termination and death.

The Bank has been allocating up to 3 per cent of its net profit towards various schemesfor the welfare of staff including retired staff. The welfare schemes are administered bya Central Welfare Committee consisting of management & employees representatives.

The Bank has endeavoured to promote a healthy industrial relations climate throughfair, transparent and firm handling of industry related matters.

The Bank has been complying with the reservation policy of Government of India. SpecialCells at Head Office and all Zonal Offices are functioning to monitor the implementationof the reservation policies and to redress grievances of SC/ST/OBC & Physicallychallenged employees as well as ex-servicemen. The Bank has designated Chief LiaisonOfficer at Head Office and has set up SC/ST Cells at each of its 34 Zonal Offices for thepurpose. During the year, periodical meetings were held with SC/ST/OBC EmployeesAssociation to discuss implementation of reservation policy and other constitutional safeguards and also to facilitate involvement in business growth. Similar meetings were alsoheld at Zonal level.

The number of employees belonging to different categories is as under:

Sr. No. Category of Employees No. of Employees Percentage to total
1. Women 3378 24.85
2. Physically Challenged 181 1.33
3. SC Employees 2680 19.72
4. ST Employees 1010 7.45
5. OBC Employees 1210 8.90

Rosters have been maintained as per Government guidelines and are regularly inspected/checked.

Training Activities:

The Bank has a training system which facilitates attention to regular periodicassessment of skill gaps at various levels in relation to existing and emerging businessopportunities. Skill building in credit, forex, customer relationship management,marketing of products and services, credit monitoring and recovery, risk management,technology based banking, branch management, complying with statutory, legal and policyrequirements and preventive vigilance received special attention during the year.

The training programmes were also held on thrust areas like financing SMEs, retaillending, agriculture finance and rural development.

The Bank has an apex Training College at Pune with three training establishmentsoperating under it, one each at Mumbai, Nagpur and Pune. Information Technology TrainingInstitute and Computer Labs train the Officers and staff to utilize information technologyfor effective customer service and efficient back office functions.

The highlights of training activity during the year are as under:

• 383 training programs were conducted during the year out of which 144 were forofficers, 178 for clerks and 61 for substaff.

• Total of 7739 staff members participated in various training programs,consisting of 4054 officers, 2736 clerks and 949 sub staff.

• A total of 1233 SCs, 428 STs and 1557 women employees were trained during theyear.

• During the year, 1605 employees were trained in Information Technology.

• 285 employees were deputed to different external training establishments.

• 14 Executives were deputed to Training Institutes outside India forInternational Exposure.

• 6 programmes for pre-promotional training to SC/ST employees were conductedduring May-June 2012. Total 158 candidates attended the training.

• 4 programs on pre-retirement counselling were conducted for the employeesretiring during the year. Besides lecture on investment planning, health check up ofparticipants were also arranged.

• Training through Video Conference was conducted on credit appraisal, alternatebusiness channel products, and marketing and tax payments. In total 272 employeesparticipated in these training programmes.

3.3 Technology Initiatives

The year 2012-2013 has been a momentous one for the Bank. The Bank has been activelyparticipating for successfully implementing the technology initiatives such as AadhaarEnabled Payment System, Aadhaar Payment Bridge System, Rupay Kisan Card, Interbank MobilePayment System (IMPS), IT enabled Financial Inclusion and also implementing technology forparticipating in the Direct Benefit Transfer initiatives launched by the Government ofIndia. During the year, Bank expanded its ATM Network from 502 to 692 ATMs, registering anincrease of more than 37 per cent. Bank has been in the forefront of Technology inBusiness & related activities.

Bank has its own Corporate Network "MAHANET" with all Branches, ZonalOffices, Training Colleges / Centers and Head Office interconnected and working under CoreBanking Platform. Its robust & secure Network Technology Architecture ensures seamlessservices to the customers. With a view to further enhancing the availability &reliability of the network, during the year Bank initiated the process of migration of thenetwork to highly redundant and reliable Multi Protocol Label Switching (MPLS) - VPN(Virtual Private Network) based architecture. With this, Bank is sure that the Bank's newnetwork is scalable so as to serve customers even better and introduce more customercentric applications. The migration process is underway. As a part of this process, theBank has also pioneered in implementing niche network technologies such as 3G, CDMA, etcas back up communication media to ensure high availability to the branches.

A state-of-art Tier III Data Centre and Disaster Recovery (DR) Centre has been set up.The implementation of Near DR Site has also been successfully completed, which wouldensure to achieve the Bank's Zero Data Loss Objective, in the event of any untowardincident. The Bank is one of the few Public Sector Banks to implement Near DR Site overlast two years. The efficacy of Near Site is tested twice a year during DR Drillsconducted by the Bank.

With the rising popularity of the ATM/Debit cards, the Bank intends to expand its ATMNetwork. In this direction, during the year 2012-13, Bank expanded its ATM Network from502 to 692, registering an increase of more than 37 per cent. In the ensuing year, it isproposed to increase the ATM base further.

With a view to provide integrated technology services under one roof, Bank hasimplemented one more ATM Gallery at Shivaji Nagar, Pune. The gallery embraces the newtechnology and provides ATMs, Cheque Deposit Machine, Coin Vending Machine and SelfUpdating Passbook Printer.

Bank has collaborated with VISA for International Debit Cards and with NPCI for RupayDebit Cards. Bank has also been the first Bank to launch Rupay Kisan Debit Card - aGovernment of India initiative.

The payment and settlement systems viz., RTGS and NEFT are running on robust platformfacilitating straight-through-processing (STP) model. In order to promote e-transactions& popularize the usage of NEFT Transactions, Bank waived service charges on NEFTtransactions up to Rs. 1.00 lakh.

The Bank is also taking special efforts to encourage transactions through alternatechannels such as ATM, RTGS / NEFT, Internet Banking, Mobile Banking, ECS etc. More than 30per cent transactions are carried out by customers through these alternate channels. Bankis constantly pursuing efforts to enhance usage of these channels through variousincentive schemes which have been implemented during the year.

Various facilities are provided through our Internet Banking platform for facilitatingonline payment of taxes, utility bill payments, online shopping / e-commerce, railwayreservation, LIC premium payment, etc and facility for viewing tax credit statement 26ASand Demat account with the Bank.

As a part of the effort to respond to the ever evolving information security trends andthe responsibility to enhance security features in the Internet Banking facility, thefeature of One Time Password (OTP) has been implemented for beneficiary registration andonline merchant payments.

Bank has robust Information Security Management System (ISMS) framework in place. Itsinformation security policy statement being: "Bank of Maharashtra is committed toprotect and safeguard the critical information of all stakeholders in order to ensuresecure business operations"

In order to strengthen the ISMS framework further, Bank had gone for ISO 27001:2005Certification for its IT division including Data Centre, Disaster Recovery Centre and CBSProject Office. Bank has ensured continuation of the ISO 27001:2005 certification for theyear 2012-13.

Bank has set up captive Security Operations Centre (SOC) for monitoring Critical ITInfrastructure on 24 Rs. Rs. basis. The SOC shall enable the Bank to effectively addresssecurity threats by constant, proactive monitoring of security events and meet thecompliance requirements. This has enabled the Bank to automate the vulnerability discoveryprocess by constantly analyzing the logs generated by the core IT security and applicationinfrastructure. The other services which are under implementation are Anti-Phishing,Anti-Trojan services.

As a part of Customer Initiatives, during this year Bank implemented many onlinefacilities to customers for opening of savings bank accounts and also accounts under NewPension Scheme. Bank also provided facility for submitting applications online for variouscredit facilities including Housing, Education, Vehicle, MSME and any other Loan product(Generic application to accommodate any other credit facility requirement of thecustomer).

In order to spread cyber security awareness amongst the customers, and encourage safeonline banking, Bank is proud to state that special training programs on Cyber Security& IT Act were conducted for our customers in Delhi & Jaipur Zones. In thistraining, valuable input on security check-points while operating Internet Bankingfacility & related IT Act provisions was imparted by practicing cyber securityprofessionals. The trainings were well received & appreciated by the customers. Basedon the feedback received, it is proposed to conduct such training programs at otherlocations as well during this year.

Cheque Truncation System (CTS) has been successfully implemented in all the 15 centresunder Southern Grid covering major centres like Chennai, Bangalooru, Coimbatore,Chandigarh, Puducherry, Cochin and Thiruvananthapuram.

Bank has successfully implemented the technology for Aadhaar Seeding of the CBSaccounts and Aadhaar Payment Bridge System. The remittances for direct benefit transfer(DBT) under various GOI schemes such as Annashree, Janani Suraksha Yojana, StudentScholarships etc. are regularly being received and seamlessly credited to the accounts ofthe beneficiaries. The technology infrastructure is set up for the implementation ofDirect Benefit Transfer (DBT) program of Government of India and the Aadhaar EnabledPayment System.

The Video Conferencing infrastructure was augmented during the year. The infrastructureis extensively used by functional departments in Head Office for interacting with ZonalOffices that has facilitated speedy decisions by the management and also reducedoperational costs. Bank has also established connectivity with NIBM & successfullyconducted training program on Risk Management in which officials from various Zonesparticipated from across the country. Video Conferencing facility is provided at onebranch in each District Centre covering 227 Branches.

Bank has installed Self Update Pass Book Printing machines and Cheque Deposit Machinesat select branches. Bank has commenced issuance of bar coded passbooks to customers whichcan be used in the Self Update Pass Book Printing machines.

Bank has centralized some of its back office functions relating to the statements andreturns thereby enabling the branch personnel to concentrate more on business developmentand customer service.

All the branches of Maharashtra Gramin Bank, the Regional Rural Bank sponsored by theBank are working under CBS since 2011 & are implementing various initiatives to be intune to meet the demands of customers and business development.

Bank proposes to take up following new IT Initiatives during 2013-14.

• Branch Transformation Initiatives with focus on greater productivity, bettercustomer experience across delivery channels, improved sales performance, HR initiativesfor talent management & succession planning and better capital efficiency.

• Implementation of Automated Data Flow (ADF) as mandated by Reserve Bank ofIndia.

• Substantially increase the ATM base & work towards Procurement of Bank's OwnATM Switch and Payment Gateway.

• Implement Two Factor Biometric Authentication for Branch Staff & BiometricAuthentication for Customer payments.

• Integrated/versatile Mobile Banking application that can work with variety ofmobile phones and provide secure transactions.

3.4 Customer Centric Initiatives taken by the Bank

The Bank has pursued high standards of customer service to ensure customer satisfactionthroughout the year.

As member of the Banking Codes and Standards Board of India (BCSBI), Bank has adoptedthe Code of Bank's Commitment to Customers and Bank's Code of Commitment to SMEs. Dulydocumented policies approved by the Board on "Deposits", "Collection ofCheques/ instruments", "Redressal of Grievances", "Compensation"and "Operational Procedure for settlement of claims of Deceased Depositors" arein place. These policies are displayed on Bank's website.

The Committee of the Board on Customer Service meets periodically to monitor thequality of customer service, redressal of customer grievances to ensure customersatisfaction. The Standing Committee on Customer Service at Head Office and Zonal LevelCustomer Service Committees at all the Zonal offices also meet regularly to address andreview various customer related matters to take steps for improvement on an ongoing basis.

Customer Service Committees at all the branches are formed and a cross section ofcustomers representing depositors, Corporates, businessmen, senior citizens are invited toattend the Customer Service meetings at Branch/Zonal/Head Office level, to have feedbackand suggestions on schemes, products and services. Full-fledged grievances redressalmachinery is in place to respond promptly to customer grievances. Complaint ManagementCells are operative at Head Office and all Zonal Offices of the Bank. The Committee of theBoard on Customer Service and Standing Committee on Customer Service at Head Officemonitor the progress of redressal of customer grievances regularly.

The Bank has implemented all major recommendations of Goiporia Committee,Dr.S.S.Tarapore Committee and Damodaran Committee relating to customer service.

The Bank has in place internet based mechanism for lodging the complaint or to givesuggestions/ feedback on services by the customers and for providing acknowledgement andstatus of their feedback/ complaint.

Bank has printed folder called "My Folder" containing all customer servicepolicies, information on service charges, guidelines on Government Schematic Loans,Ombudsman and BCSBI codes. The same is printed in Marathi, Hindi and English and suppliedto all branches and Zones for making the same available to all customers on demand.

Standardized Public Grievances Redressal System:

Bank is in process of implementing "Standardized Public Grievances RedressalSystem (SPGRS)" introduced by GOI, MOF, Department of Financial Services, New Delhion 11.06.2012. I T Department and Planning Department in Head Office are developing InHouse software for Integrated Public Grievances System.

Installation of Kiosk Machine for online registration of complaints:

Kiosk Machine arrangement has been made at Head Office to enable the customers toregister on line complaints/suggestions, and its operation has started w.e.f. 14.03.2013.

3.5 KYC/AML

The Bank has Board approved KYC-AML-CFT Policy in place. The said Policy is thefoundation on which the Bank's implementation of KYC norms, AML standards and CFT measuresis based. The full KYC compliance entails staff education as well as customer educationfor which the following measures are taken by the Bank.

A comprehensive list of KYC documents is uploaded on the Bank's web site for thebenefit of customers. Regular training sessions are conducted on KYC-AML-CFT guidelines atthe Bank's training establishments to sensitize the employees.

3.6 Risk Management

Banks are faced with a variety of risks while conducting day to day banking operations.Bank has its Risk Management Frame work in accordance with the RBI Guidelines andbenchmarks itself against the industry best practices. This enables the Bank to identifymeasure, monitor and manage risk efficiently.

The Board of Directors of the Bank reviews all Risk Management Policies and Strategiesand establishes control systems in line with the Bank's aggregate Risk Appetite. The Boardof Directors is supported by the Risk Management Committee of the Board (RMC) and RMC issupported by sub-committees known as Credit Risk Management Committee (CRMC), Market RiskManagement Committee (MRMC), Operational Risk Management Committee (ORMC) and AssetLiability Management Committee (ALCO). These Committees are headed by Chairman andManaging Director and Executive Director and General Managers are the members of theCommittees.

Risk Management Policies

Bank has put in place various Board approved Risk Management Policies viz. (i) CreditRisk Management Policy, (ii) Market Risk Management Policy, (iii) Asset LiabilityManagement, (iv) Operational Risk Management Policy, (v) Stress Testing Policy, (vi)Outsourcing Policy, (vii) Business Continuity Planning Policy, (viii) Disclosure Policy,(ix) Utilisation of Credit Risk Mitigation Techniques and Collateral Management Policy and(Rs.) Internal Capital Adequacy Assessment Process (ICAAP).

Credit Risk Management

Credit risk is the possibility of a loss being incurred as the result of a borrower orcounterparty failing to meet its financial obligations or as a result of deterioration inthe credit quality of the borrower or counterparty. The Credit Risk Management processforms an integral part of overall risk management of the Bank. The Bank has constitutedCredit Risk Management Committee (CRMC) which reviews the policies, procedures and systemsrelating to credit administration and monitoring, at periodic intervals.

The Bank has put in place comprehensive Lending Policy, Loan Review Policy and CreditRisk Management Policy for credit risk management. The policies prescribe variousguidelines, procedures, standards and prudential / exposure norms.

To evaluate the risk perception in a lending proposition, the Bank has put in place anin-house developed Credit Risk Rating Framework (CRRF) for rating of existing as well asentry level borrowers in various asset classes, as desired under Basel II. In housedeveloped rating model is also in use to rate Non-SLR Investments. The Bank utilizesindustry risk rating from reputed credit rating agency and incorporates the industry riskscore in the Credit Risk Rating Models. These models are periodically validated byindependent experts to ensure the efficacy and relevance.

The Bank has prescribed threshold ratings for entry level exposures with a view tobuilding up credit portfolio within the risk appetite and achieves the profit plan. With aview to separating the Credit Risk Management function from credit sanctioning, CreditApproval Grids are set up at various levels and at Treasury & International BankingDivision (TIBD), Mumbai, which assess the risk perception through a committee approach.

The Bank has undertaken migration analysis of credit risk rating of borrowers over atime horizon and probability of default has been estimated in line with Basel IIrequirements. To achieve risk-return trade off, risk based pricing framework has beenimplemented and reviewed periodically.

The Bank undertakes following studies periodically to assess Credit Risk:

• Compliance to Prudential Norms as per Lending Policy

• Credit Portfolio Review

• Assessment of Credit Concentration Risk

• Quick Mortality of Loans and Advances

• Country Risk Management

• Aggregate exposure on other banks

• Stress Test Report

Findings of these studies are placed before the Credit Risk Management Committee(CRMC), Risk Management Committee (RMC) and the Board on periodical basis.

Market Risk Management

Market Risk is the risk to the Bank resulting from adverse movements in market pricesdue to changes in interest rates, foreign exchange rates and equity price. The changesimpact the Bank's earnings and capital and can have ramifications on the Bank's liquidityand profitability.

Bank has its separate Market Risk Management Committee which reviews MRM Policy onregular basis and reports modifications, if any, to the Risk Management Committee &the Board for approval. The Bank's MRM Policy aims to set out the broad processes i.e. bywhich the Bank will identify risks in the areas of Interest Rate Risk, Forex Risk, EquityPrice Risk and Options Risk. Reporting framework has been prescribed for internalreporting, Regulatory reporting and Pillar III disclosures.

Interest Rate Risk Management

Interest rate risk is the risk where changes in market interest rates affect a bank'sfinancial position. Changes in interest rates impact a bank's earnings (i.e. reportedprofits) through changes in its Net Interest Income (Nil) and also impact a bank's MarketValue of Equity (MVE) or Net Worth through changes in the economic value of its ratesensitive assets, liabilities and off-balance sheet positions. The interest rate risk,when viewed from these two perspectives, is known as 'earnings perspective' and 'economicvalue perspective', respectively.

Accordingly, Bank uses the following tools to manage interest rate risk:

• Traditional Gap Analysis (TGA) which is undertaken through the preparation ofInterest Rate Sensitive Gap Reports on a monthly basis.

• Earning at Risk is based on Calculation of impact on NII due to 1% change ininterest rates. It also takes into account Basis Risk, Embedded Option Risk, Yield CureRisk, Net Interest Position Risk, Price Risk and Reinvestment Risk.

• Duration Gap Analysis (DGA) which focuses on the bank's exposure to interestrate risk in banking book (IRRBB) in terms of sensitivity of Market Value of its Equity(MVE) to interest rate movements.

• Considering the interest rate risk in the portfolio, the Bank has set upperlimits of Modified Duration for AFS+HFT category and also the upper limit for totalinvestment portfolio.

• Value at Risk (VaR) for treasury positions is calculated for 1 Day, 10 Days and30 Days for 99% Confidence Level.

The Bank has constituted Asset Liability Management Committee (ALCO), which meets atregular intervals to review the interest rate scenarios, liquidity positions in thebanking book etc. The ALCO manages and supervises Liquidity Risk through review of ratesof interest on deposits / advances. ALCO also monitors adherence to various risk limitsand determines the business strategy in light of prevailing interest rate scenario andliquidity position in the market with a view to optimizing profit and overall balancesheet management while managing interest rate risk.

The ALM Policy, which is reviewed annually and approved by the Board, prescribes theparameters for management of Liquidity Risk, Interest Rate Risk, Basel III Compliance andlays down Strategies for Asset Liability Pricing, Profit Planning and Growth Projections,Funding and Capital Planning and Regulatory Reporting Framework.

Investment Risk is managed through the prescriptions made in the Investment ManagementPolicy & Investment Risk Management Policy.

Management of Foreign Exchange Risk, prudential limits for open foreign exchangeposition, aggregate gap position, Daylight limit, Overnight limit, Net open overnightposition, Stop loss limit, Limit for undertaking swaps/investment/ borrowing overseas,interbank exposure limits etc. have been put in place. These limits are monitoredregularly.

The 'Liquidity Risk' is measured and managed through 'Gap analysis' for maturitymismatches by reviewing structural liquidity position on daily basis and short termdynamic liquidity on fortnightly basis. Bank is conducting behavioral studies in GAPanalysis. Stress testing is undertaken periodically.

Operational Risk Management

Operational risk is the risk of loss resulting from inadequate or failed internalprocesses, people or systems or from external events. Bank's primary aim is the earlyidentification, recording, assessment, monitoring, prevention and mitigation ofoperational risks, as well as timely and meaningful management reporting.

The Operational Risk Management Committee (ORMC) meets regularly to review the mattersrelated to operational risk. Under the Operational Risk Management Framework and ORMPolicy, Bank is identifying, measuring, monitoring and controlling/mitigating operationalrisks by analyzing historical loss data, Risk and Control Self-Assessment Surveys (RCSAs)and Key Risk Indicators (KRIs). The Bank has put in place policy on Business ContinuityPlanning. A policy on outsourcing is also formulated which facilitates use of expertiseavailable in the market with adequate safeguards against risk associated with outsourcing.

Under the Risk based supervision, Risk Profile Template covering five business risksand two control risks are prepared on quarterly basis and submitted to RBI.

Rating of the branches is being done under Risk-based Internal Audit (RBIA) and theposition is reviewed every quarter.

Implementation of Basel II

The Bank is Basel II compliant in terms of the New Capital Adequacy Framework (BaselII) guidelines issued by RBI. Bank has adopted Standardized Approach for Credit Risk,Standardized Measurement Approach for Market Risk and Basic Indicator Approach forOperational Risk as per RBI guidelines for capital adequacy computation. External creditratings from approved rating agencies are used for risk weighting of corporate exposuresas required under Basel II. Bank has also put in place a Policy on Disclosure, Policy onUtilization of Credit Risk Mitigation Techniques & Collateral Management and Policy onStress Testing approved by the Board.

The Bank has evolved Board approved internal Capital Adequacy Assessment Process(ICAAP) which covers identification and measurement of risks other than Pillar 1 risks(i.e. Credit Risk, Market Risk & Operational Risk), to meet the requirements of Pillar2 of Basel II norms. The Bank has adhered to disclosure norms as stipulated in theguidelines of RBI to meet Pillar 3 requirements of Basel II. The year-end disclosures ason March 31, 2013 are part of the Annual Report and also displayed on the Bank's website.

In-house software - "Credit Information and Monitoring System (CIMS)" is usedfor computation of Capital Adequacy under Basel II framework, in line with RBI MasterCircular on implementation of New Capital Adequacy Framework dated 02.07.2012. CIMS isused for generating credit risk statements for Standardised Approach under Basel II,statement of un-availed portion of credit facilities and capital adequacy report inExtensible Business Reporting Language (Rs. BRL) format.

For implementation of the advanced approaches under the Basel II framework and industrybest practices in risk management, the Bank has appointed consultants for Credit, Marketand Operational Risk.

The Bank will enhance its Risk and Capital Management capabilities by migrating to theAdvanced Approaches of the Basel II framework. Advanced approaches include Foundation andAdvanced Internal Ratings Based Approach ('FIRBA & AIRBA) for Credit Risk,Standardized and Advanced Measurement Approach ('TSA' & 'AMA') for Operational Riskand Internal Models Approach ('IMA') for Market Risk.

Improvement in awareness of Basel II norms amongst the employees is ensured throughtraining. Knowledge and skill levels of risk management team at Head Office are constantlyupgraded through exposure to external trainings, workshops and seminars.

Implementation of Basel III

RBI has issued Guidelines on Implementation of Basel III Capital Regulations in Indiaon 2nd May, 2012. These Guidelines will become effective from April 1, 2013 in a phasedmanner.

Basel III guidelines of RBI have also introduced (i) a minimum Leverage Ratio of 4.5per cent as an additional standard of riskiness of a Bank's balance sheet, (ii) Liquiditystandards by way of two liquidity ratios namely Liquidity Coverage Ratio (LCR) and NetStable Funding Ratio (NSFR). During the parallel run between January, 2013 and January,2017, banks will strive to maintain a minimum Leverage Ratio of 4.5 per cent. Theregulatory leverage ratio requirements would be prescribed by RBI after a parallel becomeseffective from Jan. 1, 2018.

Bank is having adequate MIS for implementation of the Basel III guidelines issued byRBI and reporting/ disclosures will be done as per periodicity prescribed.

3.7 Internal Control Systems

Inspection & Concurrent Audit:

The Inspection and Audit system & various measures of internal control are adoptedby the Bank to ensure identification /assessment and mitigations of operational risks.

Internal Audit of branches:-

Inspection of more than 63 per cent of total branches was conducted so as to cover morethan 62 per cent of the business of the bank while complying with the Jilani Committeerecommendations. Complying with the RBI Guidelines, the Bank has also started Risk BasedInternal Audit of the branches w.e.f. 01.01.2013 on standalone basis as against theconventional internal inspection and RBIA being done on parallel basis earlier.

During the year, the Bank has implemented some strategic decisions so as to strengthenthe internal control system such as,

• On the spot rectification of atleast 51 per cent irregularities during thecourse inspection itself in the branches.

• Implementation of Document mechanization system.

• Initiating the process of Web Based application system so as to improve BranchInspection, Concurrent Audit system and Off-site surveillance.

The Bank is prepared to implement Seth Committee Recommendations so as to strengthenthe Internal Audit System.

During the year, the Bank also organized conference of all Inspecting Officials andHeads of Inspection Cells so as to update them on policies, procedures, businessenvironment, opportunities and challenges for banks, emerging areas of risks and theirrole in alerting the Top Management of existing and impending risks at branches andoffices.

Surprise Inspection:

Surprise inspection of 91 branches, focusing mainly on high risk areas was also carriedout in pursuance of Ghosh Committee recommendations.

Concurrent Audit:

The Bank also ensured concurrent audit of its branches and departments which coveredbusiness of 51 per cent of aggregate deposit and 74.29 per cent of total advances inaddition to business covered in RBIA.

Income & Expenditure Audit:

Income & Expenditure Audit for the period from October 2011 to September 2012 wascarried out at 995 branches to identify and recover income leakage, if any. Half yearlyexpenses audit of all the Zonal offices was carried out during the year.

Management audit:

For assessing their effectiveness of Zonal Offices and different departments in theHead Office in terms of supervision and control, Management Audit of 17 Zonal offices and14 departments at Head Office was carried out during the year.

RBI Inspection under Section 35 of the Banking Regulation Act:

The Bank was also subject to RBI inspection under Sec.35 of the Banking Regulation Act.Besides that two branches were also inspected during the year.

AML:

Bank has also reviewed the AML parameters as per IBA guidelines and Prevention of AntiMoney Laundering Act. In order to improve the efficacy of the AML system, it is proposedto have centralized AML cell.

3.8 Vigilance

Vigilance activity in the Bank is an integral part of the managerial function. Itsobjective is to enhance the level of managerial efficiency, effectiveness and to ensure aproper climate for an efficient administration, where officials can perform the dutieswithout any fear or favour. 'Vigilance' in the Bank is maintaining a proper balancebetween flexibility and accountability.

Preventive Vigilance is the most important aspect of vigilance. With a view to improvefunctioning at all levels, the Bank has taken several necessary steps.

Fraud Risk Management Policy' on prevention, detection, classification and reporting offrauds including action to be taken, has been adopted by the Bank and circulated for theguidance and use of the branches and field functionaries.

'Vigilance Manual' has been issued by the bank and various aspects of vigilance andother related issues have been dwelt upon for information and necessary action of thefield functionaries.

On 07.07.2012 "NATIONAL VIGILANCE E Rs. CELLENCE AWARD- FOR 2012" forthe case study 'Shadow of Excellence Antecedents of a Pvt. Ltd. Company' was awarded atthe hands of Shri Pradeep Kumar, Hon. Chief Vigilance Commissioner to the General Manager& Chief Vigilance Officer and his team.

On 28th August 2012, the Vigilance Study Circle (Mumbai Chapter) has given 2nd prizefor best case study submitted by the Bank in respect of obtaining of Visa by fraudulentmeans. The case study was titled as "A Case Study of Good Purpose but with FraudulentIntentions."

3.9 Compliance

The Bank has put in place a Compliance Policy, based on the guidelines of Reserve Bankof India. The Compliance Department, headed by the Chief Compliance Officer monitors thecompliance functions. It ensures the implementation of the statutory/regulatory guidelinescoming into force from time to time. The status of compliance is placed for review to theTop Management / Audit Committee of the Board periodically. To improve the awareness onthe compliance functions in the Bank, sessions are appropriately included in varioustraining programmes arranged for the officers /staff members.

3.10 Marketing & Publicity

Bank in association with Indian Banks' Association conducted BANCON-2012 at Pune. Eventwas widely publicized throughout the country. Bank also sponsored many programs like"supply of Fans water purifiers etc to Rural Govt. Primary Schools""Drinking water tanks to Zilla Parishd Satara" under rural publicity and"Water Tanker to Nagar Parishad Shrirampur, "Pune Festival", "MusicFestival" etc for publicizing Bank's brand image and various Bank's products.

3.11 Citizen's Charter

The Bank has adopted the Charter since 2000-01, which details the duties andresponsibilities of the Bank towards its customers. The Charter is displayed at all thebranches and at the website and has been updated from time to time. The Bank has alsoadopted a Citizen Charter of RBI on exchange of notes and coins.

4. SOCIAL BANKING

4.1 Priority Sector Lending

It has been the constant endeavor of the Bank to facilitate equitable and sustainableeconomic development by timely and hassle-free availability of credit for productivepurposes to Small and Marginal Farmers, Micro & Small Enterprises, Retail Traders,Professional & Self Employed, Women Entrepreneurs and entrepreneurs from economicallyweaker sections.

The outstanding advances under Priority Sector as of 31st March 2013 aggregate to Rs.24719.36 crore, constituting 43.20 per cent of the Adjusted Net Bank Credit.

The rise in Priority Sector Advances in absolute terms is Rs. 5520.36 crore overprevious year March 2012, resulting into growth of 28.75 per cent on y-o-y basis.

4.2 Agriculture

The Bank disbursed Rs. 3237.88 crore for agriculture and allied activities during theyear 2012-13. The total outstanding advances to agriculture sector have shown a growth of30.93 per cent on y-o-y basis, to reach a level of Rs. 7972.50 crore as on 31.03.2013.

The Bank undertook awareness/sensitization programmes for all the branches forincreasing advances to agriculture by providing hassle free credit to farmers.

4.2.1 Mahabank Kisan Credit Card (MKCC)

This scheme gained popularity especially in rural areas where it is being propagatedsuccessfully and vigorously. The Bank has issued total 3,83,180 Kisan Credit Cards tofarmers. Credit flow to MKCC beneficiaries has increased to Rs. 3,019.42 crore as on31.03.2013, resulting into growth of 47.63 per cent on y-o-y basis.

4.3 Micro and Small Enterprises (MSE)

SMEs are recognized as a major growth engine for the Indian economy. They generateopportunities for direct and indirect employment by facilitating use of natural resourcesand local skills to stem the tide of migration to urban areas and promote low investmententerprises. Finance is made available to viable enterprises at an attractive and low rateof interest. On line enquiry portal is made available on the Bank's website during theyear.

The Bank has adopted Simplified Loan Application for MSEs and the same is displayed onthe Bank's website. The Bank has also adopted Bank's Code of Commitment to Micro and SmallEnterprise and it is displayed on the Bank's website.

The Bank's lending to Micro and Small Enterprises which was at the level of Rs.8,630.82 crore as at 31.03.2012, increased to Rs. 11,288.91 crore as at 31.03.2013, whichtranslates into a y-o-y growth of 30.80 per cent.

4.3.1 Maha-Entrepreneur

Under the scheme, the Bank is providing for supporting SMEs in rural areas finance upto Rs. 100.00 lakh to Micro and Small Enterprises without Collateral Security and/ orThird Party Guarantee.

Accounts under the scheme are covered under Credit Guarantee Fund Scheme for Micro,Small and Medium Enterprises of Government of India. The Bank is bearing the entireguarantee fee and 50 per cent of annual service fee, which is to be paid to the Trustunder CGTMSE. The Bank sanctioned loans of Rs. 764.35 crore to 9,534 borrowers under thisscheme up to March 2013. During the current FY, coverage under Credit Guarantee FundScheme has increased by 64.97 per cent.

5. IMPORTANT SCHEMES/PROJECTS OF THE BANK

5.1 Credit Flow to Retail Sector

The Bank is providing retail loans to salaried persons, professionals, businessmen andpensioners for purchase of consumer durables, two/ four wheeler vehicles and also forother personal needs.

5.1.1 Centralized processing of retail loans

The Bank has opened 15 Retail Assets Branches and 18 Retail Processing Centers coveringall the Zones for hassle free and quality disbursement of retail loans.

5.1.2 Mahabank Gold Loan Scheme

Gold ornaments are the traditional and inherited form of savings among the people inIndia. Being one of the most liquid and precious asset, it serves as a dependable andacceptable form of security to raise loans for meeting immediate financial needs forbusiness, agricultural, consumption purposes such as marriage, medical, educationalexpenses etc., With a view to meet the requirement of our customers, Bank has launched anew Retail Loan product "Mahabank Gold Loan Scheme" w.e.f. 01.11.2010.

5.1.3 Mahabank Top-Up Loan Scheme

In order to extend additional credit support to our regular housing loan borrowers,Bank has launched another new Retail Loan product "Mahabank Top-Up loan scheme"w.e.f. 01.11.2010.

5.2 Housing loan to public

The Bank has in place Housing Loan Scheme to meet the needs of all economic segmentsincluding NRIs. Financing housing sector in rural and urban parts of India is a thrustarea.

The Bank's lending to housing sector has grown by 34.05 percent during the year toreach the level of Rs. 6,578.24 crore as at 31.03.2013. The Bank is also implementingGolden Jubilee Rural Housing Scheme of the Government of India in rural areas havingpopulation not exceeding 50,000. Bank has launched online facility for applying forhousing loan during the year, which has evoked good response.

5.2.1 One per cent Interest Subvention on Housing Loan up to Rs. 15.00 Lakh

As per GOI guidelines, Bank has provided 1 per cent interest subvention to borrowers,who availed housing loans upto Rs. 15.00 lakh, with cost of project upto Rs. 25.00 lakh.During the year 2012-13, 4262 number of borrowers benefited under the scheme to the extentof Rs. 5.28 crore.

5.3 Model Educational Loan scheme

With the objective of ensuring that all deserving students get opportunity to pursuehigher education, the Bank implemented a Model Educational Loan Scheme. As of March 2013,the Bank had lent Rs. 551.59 crore to 27,149 students. The Bank has provided the facilityof submission of application for education loan through web-access (on line) also.

5.4 Micro Finance

The Bank has always recognized the importance of credit to rural and urban poor fortaking economic activity. The SHGs have proved to be effective instruments for empowermentof women. Bank has specialized SHG branches in all six lead districts and Goregaon,Mumbai.

As on 31.03.2013, there were 95,819 SHGs formed by the Bank, out of which 93,266 SHGshave been linked with the bank credit, with outstanding of Rs. 169.89 crore as on March2013.

5.5 Assistance to SC/ST beneficiaries:

The Bank has been actively extending finance to SC/ST beneficiaries through variousschemes. Total finance as on 31.03.2013 to SC/ST beneficiaries stood at Rs. 1,160.67crore, constituting 24.73 per cent of advances to weaker sections.

5.6 Advances to Minority Community

A special cell has been set up at Head Office to review & ensure smooth flow ofCredit to minority community. As of March 2013, the outstanding advances to minoritycommunities were at Rs. 1871.39 crore to 66,719 beneficiaries.

5.7 Door Step banking Services

Bank has introduced Door Step Banking Services for its High End Customers and theservices include Corporate and Retail Cash pickup and delivery & Cheque CollectionServices, at clients' Doorstep. The Service has been initially introduced in Mumbai andPune on Pilot basis in the current year.

5.8 BOM SBI International Credit Card

Bank is offering Co-branded International Credit Card to its customer under tie-uparrangement with SBI Cards. The card is offered in two variants viz. Platinum and goldcard. As on 31st March 2013, the outstanding number of Cards issued to its customer is16603.

5.9 Retail Sale of Gold Coins

Bank has introduced retail Sale of Gold Coin on 16.09.2012 on its Foundation Day andhas sold 58.47 kg of Gold Coins in FY. The Gold Coin is procured from MKS mint(Switzerland) S.A and is of 999.9 per cent purity and comes Certipack with internationalassay certification. Bank has Introduced Gold Coin in 2 gm, 5 gm, 8 gm, and 10 gm withdeity and without deity & bar for 20 gm, 50 gm standard. The pricing is keptcompetitive with other banks.

Bank has introduced Maha Swarna RD scheme for one year term with monthly installmentnot less than Rs. 600 p.m. and customers get a concession of Rs. 35 per gm on the purchaseof Gold Coin out of the maturity proceed. All branches are authorised to open MahaswarnaRD scheme.

5.10 National Pension System (Swavlamban)

Bank is registered with NSDL as POP for National Pension System. 1618 branches (i.e.branches excluding branches like Service branch, Asset Recovery) are registered with NSDLas POP SP. Online facility to open NPS A/c is provided.

Our Bank is registered as aggregator with PFRDAfor NPS Lite Scheme & Pune MainBranch is registered with NSDL as NPS Lite oversight office (NLOO). 1615 branches areregistered as collection centres in March 2013. Bank is creating awareness on NPS amongvarious customers.

5.11 Tie Up

5.11.1 Empanelment as lead Generation agent for SHCIL.

Bank has entered into tie up arrangement with Stock Holding Corporation of India Ltd.(SHCIL) in Maharashtra wherein Bank is empanelled with SHCIL as the lead generation agent.The bank role is to popularize e-stamping system across Maharashtra and provideinformation to customers and guide customers to SHCIL office for their e-stamp business.

5.11.2 'Remit India' by 'Times of money'

Bank has tie up with timesofmoney for introducing remit India an online platform forremittance of funds by NRI customers.

5.11.3 Payment Gateway of IBIBO, ATOM, Times of Money

Bank has tie up with IBIBO, ATOM and timesofmoney for facilitating e-commerce andutility bill payment facility to its internet banking customers.

5.11.4 ECS Mandate and Direct Debit System

Bank has tied up with Bajaj Finance Ltd. for ECS Mandate verification of Fresh Mandateand Direct debit system of PDC's.

5.11.5 Online Fee Collection

Bank has entered into tie up with various Institutions during the year where bank isgetting commission on collection of fees for Institute from Branches. The Bank iscollecting online fee collection for Mumbai University from the students appearing forexternal educational programme. The Mumbai University selected Bank from the group of 5Banks.

6. CORPORATE SOCIAL RESPONSIBILITY

Bank contributed Rs. 251 Lakh towards Chief Minister's Relief Fund for drought reliefto the state of Maharashtra to help Government initiatives for agriculture and waterprojects.

The Rural Development Centres at Hadapsar and Bhigwan in Pune District of Maharashtrahave been undertaking various rural developmental activities for the benefit of farmersviz. Lab to Land Project, Re-development of Saline Soils, Soil Testing etc. Bank hasestablished Soil Testing Lab (STL) through MARDEF Trust at RDC Bhigwan in association withRCF Ltd., Mumbai. In the lab samples of soil & water are tested and counseling isdone. Farmers from the districts of Pune, Ahmednagar, Solapur and Satara are takingbenefit of the lab.

A Trust viz. Mahabank Agricultural Research and Rural Development Foundation (MARDEF)established by the Bank, undertakes various projects and village improvement programmes.MARDEF is imparting training to farmers on various subjects in agriculture, e.g. Dairy,Goat rearing, best practices in farming, application of fertilizers, agriculture creditschemes, etc. MARDEF Trust has implemented 105 training programmes for farmers at RDCBhigwan & Hadapsar and has benefited 3463 farmers from April 2011 to March, 2013.

The Bank has established Seven Mahabank Self Employment Training Institutes (MSETI) forproviding training to rural youth and women to enable them to acquire skills forself-employment through small business enterprises. The Institute has centers located atPune, Nagpur, Aurangabad, Amravati, Jalna, Thane and Nasik. The Institute has so farimparted training to 9449 educated unemployed youth, with a settlement rate of 71 percent.

Gramin Manila Va Balak Vikas Mandal (GMVBVM), an NGO formed by Bank of Maharashtra andNational Institute of Bank Management is actively involved in formation, nurturing,training and ensuring linkage of SHGs to Bank Credit. The GMVBVM also helps SHGs inmarketing products of SHGs through outlets established in Pune City under the name"SAVITRI". The GMVBVM guides and actively helps SHGs for selection and purchaseof raw materials and quality production.

The Bank has opened FLCC centers in Six Lead Districts namely Pune, Nasik, Aurangabad,Satara, Jalna & Thane for creating awareness about banking schemes.

As a part of corporate social responsibility, Bank has implemented Financial InclusionPlan for extending banking services in service area villages with population below 2000for the period 2013-2016 with approval of Board. During last year as per extension ofSwabhiman, Bank has covered 569 villages with population between 1600 to 2000 for FIpurpose. During 2012-13, total enrolments made are 1.64 lakh; 1.24 lakh accounts have beenopened by BCAs and 11.93 lakh Basic Savings Deposit Bank accounts have been opened by thebranches.

Bank has helped various NGOs during the year extending financial support to acquirenecessary inputs for carrying their activities. These include the following:

• Fixing of artificial limbs to the needy patients.

• Diesel Generator set for the school meant for physically challenged children

• Building / classroom / Kindergarten equipments for the needy, mentally retardedand cerebral palsy children, cancer patients and Old age home.

• Conducting cancer detection camps in slums for the needy.

Bank awarded Mahabank meritorious scholarships to 309 meritorious students, districtwise, all over India wherever Bank has existing branch network.

Bank contributed Rs. 15,000 each for 551 Government aided primary schools for improvingthe basic facilities such as water purifier for drinking water, Electric fans andconstruction of toilets for improving hygiene.

Moreover Bank has always stood for the cause of society by contributing at large forimproving medical facilities, vocational training, basic amenities etc. Bank is alsohelping emerging sports persons at budding stage by sponsorships and providing financialassistance to bring the glory to the Nation and contributing to social cause.

7. LEAD BANK SCHEME

7.1 Lead Bank Scheme

Bank has Lead Bank responsibility in eight districts of Maharashtra State viz.Aurangabad, Jalna, Nasik, Mumbai City, Mumbai suburb, Pune, Satara & Thane. Theresponsibility of working as lead bank in the districts of Mumbai and Mumbai SuburbDistricts was given to bank during the last financial year. The achievement of AnnualCredit Plan in the districts where bank was working as lead bank was 144 per cent of thetargets allotted to the districts as of March 2013.

7.2 State Level Bankers' Committee

Bank is the Convener of State Level bankers' Committee (SLBC) for the State ofMaharashtra. Quarterly meetings are held regularly to oversee the implementation of StateAnnual Credit Plan, Priority Sector lending, financial inclusion and Government SponsoredSchemes in the State. In addition to four quarterly meetings, a special SLBC meeting wasconvened, the focus of which was kept on lending to agriculture and particularly forcrops. The same was chaired by the Chief Minister of Maharashtra. The Chairman, SLBC tooktwo exclusive meetings of Lead District Managers to boost up lending during Kharif seasonand to review other important issues. As a result, banks in Maharashtra achieved 102 percent of crop loan targets showing 31 per cent rise on y-o-y basis.

As SLBC Convener, state specific financial inclusion Plan (Swabhiman) was drawn for4292 unbanked villages (having population over 2000) in the State of Maharashtra forextending banking services. The banks in the state achieved 100 per cent coverage of theallotted villages for providing banking services through brick & mortar branches,appointment of Business correspondents and kiosk type models. Additional 2852 villageswith population between 1600 to 2000, were allotted to banks in Maharashtra for providingICT based doorstep banking services.

As conveners of SLBC, Bank is also coordinating with all member banks in implementingDirect Benefit Transfer. As Convener, bank has taken special emphasis on opening ofaccounts and seeding of Aadhaar numbers of the beneficiaries. The meetings were calledwith District collectors and with member banks apart from regularly writing to all theconcerned about the progress of the scheme and its importance. Bank has also taken thelead in monitoring the progress for making available the delivery channels such as openingof branches, installation of ATMs and providing the services of Business correspondent.

7.3 Registrar for Aadhaar (UIDAI)

The Bank is non-state Registrar for enrolment of Aadhaar (A 12 digit uniqueidentification number to resident of India) for the Unique Identification Authority ofIndia (UIDAI).

Bank has completed the enrolment process on pilot basis at Pune, Mumbai and Thane forissuance of Aadhaar successfully with enrolment of 56,781 residents. Bank has furtheraccelerated the process and has appointed enrolment agencies for issuance of Aadhaar in 10clusters. These agencies have completed more than one lakh Aadhaar enrolments.

The functionality of linking of Aadhaar number to bank account number is also madeavailable by Bank to open Aadhaar Enabled Bank Accounts (AEBA). This will enable theaccount holders to receive Government funds / benefits directly to their bank accounts.Bank has seeded around Rs. lakhs Aadhar numbers to their accounts.

7.4 Financial Inclusion plan - Swabhiman

Swabhiman movement facilitates opening of bank accounts, provide need based credit,remittance facilities and help to promote financial literacy in rural India using variousmodels and technologies including branchless models through Business Correspondents (BC) /Customer Service Providers (CSPs).

Bank has been implementing IT enabled financial inclusion for providing branchlessbanking in all the unbanked villages allotted to our bank. Bank has covered 1215 villages(phase-I) under Swabhiman through 1133 Customer Service Providers (CSPs) and 569 villageshaving population below 2000 (phase-II). During year 2012-13 bank has enrolled 1,64,694customers through BC agents & at the end of March 2013 we are having 19,54,047 nofrill accounts with balance of Rs. 1,07,72,94,420/-

Govt, of India has decided to implement the scheme of Direct Cash Transfer of subsidiesin 34 notified schemes, directly to the Bank account of the beneficiary in 43 districts.Out of these 43 districts we are operating in 33 districts with 395 branches. Forimplementing the same, all the beneficiaries of the scheme should have bank accounts andtheir accounts are required to be seeded with Aadhaar Numbers of the beneficiaries. Theaccount opening is in progress in all the 395 branches. Every effort has been made forcreating awareness among the people; sign boards are displayed at prominent places,pamphlets were distributed, Davandis (Munadi) are made in villages on weekly bazaar days,and advertisements have been given in local news papers. Branch staff has been sensitizedfor implementation of the project as well as for linking of Aadhaar number tobeneficiaries' accounts & opening of accounts of Aadhaar enrollees who have givenconsent to open the account with our bank.

As on 31st March 2013 our bank has 41,21,253 accounts with 4,83,239 accounts seededwith Aadhaar number in 33 DCT districts, through 395 branches under one family oneaccount.

8. SUBSIDIARIES/JOINT VENTURES AND SPONSORED INSTITUTIONS

8.1 Performance of Regional Rural Bank

Maharashtra Gramin Bank (MGB) is a Regional Rural Bank sponsored by our Bank having itsHead Office at Nanded, Maharashtra state. Total no of branches as on 31.3.2013 stood at351 in its area of operation covering 16 out of 33 districts of Maharashtra State.

During the year 2012-13, as per GOI policy, MGB has received recapitalization supportof Rs. 13.32 crore for improving Capital to Risk Asset Ratio (CRAR) from all stake holderin the proportion of their share holding of 50:35:15 i.e. Government of India, Bank ofMaharashtra and Government of Maharashtra respectively. Thus total amount ofrecapitalisation received during the last three years (i.e. from 2010-11 onwards) standsat Rs. 104.00 crore from all stake holders.

All 351 branches & controlling offices are now under CBS. During this year, MGBopened 12 new branches and plans to open further more.

Under Financial Inclusion programme, all 355 allotted villages are covered under ICTbased model. Integration with service provider has been completed and the BC has startedoperations for MGB by appointing BCAs and opening of accounts. MGB has also finalisedcommercial tie-up at a total project cost of Rs. 608.75 lakh with Technical serviceprovider for providing back end technical services to implement financial inclusion. Asper RBI guidelines, MGB has prepared a financial inclusion plan for providing bankingservices in villages with less than 2,000 population in the next three years i.e., 2013 to2016. MGB is ready with the NEFT functionality for general public for all its branchessince Nov. 2011.

During this year 2012-13, MGB has grown by 19.12 per cent in total deposits and 38.09per cent in advances. It has achieved all the five SOI targets for the year 2012-13. Theposition of targets and achievement are as under:-

Parameter As of 31.03.2012 As of 31.03.2013
Performance of RRBs
Deposit Growth in per cent 16.51% 19.12%
Advance Growth in per cent 25.86% 38.09%
Branches under CBS (Nos.) 339 351
Profit per employee (Rs. in lakh) 1.25 2.13
No. of loss making branches (being 12 months old or more) 38 18

8.2 The Maharashtra Executor & Trustee Company Pvt. Ltd. (METCO)

The Maharashtra Executor & Trustee Company Pvt. Ltd. (METCO), the 100% subsidiaryof Bank of Maharashtra was established in 1946 with an aim to provide services auxiliaryto banking such as:

• Consultation, Drafting & Execution of will

• Consultation, Drafting and Management of Private Trusts / Public Trusts

• Management of investments & house properties as attorney

• Guardianship of minor's property

• Consultation for sale/purchase of property

• Filing of i-Tax Returns for individuals

The Company is located at Pune having its branch units at Pune, Vashi-Mumbai, Thane andNagpur.

During 2012-13, company could get new assignments for management of additional 11Trusts bringing total 1034 Public & Private Trusts under our fold for management.During the year, additional 32 WILLS were added making total 1080 WILLS in our custody forexecution.

At present, the Company manages properties both movable and immovable of 121 clientsunder the Power of Attorney. The Company also acts as the Trustees in respect of 146policies under Married Women's Property Act and as Court appointed Guardian of minor'sproperty in 6 cases.

9. IMPLEMENTION OF OFFICIAL LANGUAGE POLICY

During the year 2012-13, the Bank has made various remarkable achievements in the fieldof Official Language implementation.

The Third Sub-Committee of Committee of Parliament on Official Language inspected ourJabalpur Zonal Office on 14.09.2012 and Solapur Zonal Office on 29.01.2013 for theimplementation of Official Language Policy of Government of India and also for progressiveuse of Hindi. It is noteworthy to mention that Hon'ble Members of the Committee expressedtheir satisfaction for the initiatives taken by our Bank in respect of progressive use ofHindi.

Town Official Language Implementation Committee (TOLIC), Mumbai was awarded 2nd Prizefor better use of Hindi for the year 2011-12 by Government of India, Ministry of HomeAffairs, Rajbhasha Vibhag. Bank is the Convener of the committee.

Zonal Office, Amravati was awarded 2nd Prize for better use of Hindi by the TOLIC,Amravati.

Raopura Baroda branch of Ahmedabad Zone, was awarded 2nd Prize in Branch Category forbetter use of Hindi by the TOLIC, Baroda

State Level seminar in Hindi on Risk Management was arranged by Bank on 8th January2013 at Head Office for executives and senior officers of Banks and FinancialInstitutions. Mr. K.C. Mishra, Ex General Manager, Reserve Bank of India, delivered aneffective lecture on the subject in Hindi.

Dr. M.L. Gupta, Deputy Director, Regional Implementation Office, Department of OfficialLanguage, Ministry of Home Affairs visited Head Office on 20th July 2012 and inspected theprogressive use of Hindi at Head Office. He expressed pleasure at the implementation ofO.L. Policy of Government of India in Bank and the initiatives taken by the Bank.

Hindi Kavi Sammelan was arranged at our Head Office on the occasion of Hindi Day, inthe presence of our Chairman & Managing Director, which was attended by a large numberof staff,

The Bank is the convener for Town Official Language Implementation Committee (TOLIC) inPune, Mumbai and Solapur. Bi-Annual Meetings of these committees were held as perschedule.

The Bank is also a Convener of State Level Bankers Committee (Rajbhasha) for the stateof Maharashtra. Annual Meeting of the committee for the year was held as per schedule andprizes were awarded to the member Banks and Financial Institutions.

Various schemes of the Bank were displayed in Hindi on the screen at Reception of HeadOffice on continuous basis. Various schemes for the use of customers were also displayedon the screens at branches.

A seminar in Hindi was arranged by TOLIC Pune for the executives of the Member Banksand Financial Institutions of Pune City. Our Bank is the convener of this Committee.

An elocution competition in Hindi was arranged by Jaipur Zonal Office at TilakTeachers' Training School, where about 125 trainee teachers have participated in thecompetition.

Hindi Typing Competition in Unicode was arranged by Hyderabad Zonal Office under theauspices of TOLIC Hyderabad.

10. DIRECTORS' RESPONSIBILITY STATEMENT

The Directors confirm that in the preparation of the annual accounts for the year ended31.03.2013:

• The applicable accounting standards of the Institute of Chartered Accountants ofIndia, have been followed along with proper explanation relating to material departures,if any;

• The accounting policies framed in accordance with the guidelines of the ReserveBank of India, are consistently applied and proper disclosures are made for changes, ifany;

• Reasonable and prudent judgment and estimates were made so as to give a true andfair view of the state of affairs of the Bank at the end of the financial year and theprofit of the Bank for the year.

• Proper and sufficient care was taken for maintenance of adequate accountingrecords in accordance with the provisions of applicable laws governing banks, in India;and

• The accounts have been prepared on a going concern basis.

11. CHANGES IN THE BOARD OF DIRECTORS

During the year 2012-13, the following changes took place in the Board of Directors:

• Shri V.P. Bhardwaj ceased to be the Director w.e.f. 20th July 2012.

• Shri A.K. Pandit resigned from the Directorship w.e.f. 17th July 2012.

• Shri Ateesh Singh was appointed as Director w.e.f. 20th July 2012.

• Dr. Rajkumar Agrawal was elected as Director w.e.f. 28th December 2012.

The Board of Directors place on record their sincere appreciation for the valuablecontribution made by the outgoing Directors.

12. ACKNOWLEDGMENTS:

The Board of Directors wishes to express sincere gratitude to the Government of India,the Reserve Bank of India, the Securities and Exchange Board of India, InsuranceRegulatory and Development Authority, Indian Banks'Association and Stock Exchanges andCDSL for their valuable advice and support; to the customers and shareholders for theirpatronage; to the correspondents and associates for their co-operation and to all themembers of staff of "Mahabank Family" for their unstinted commitment andcontribution to the overall development of the Bank.

For and on behalf of the Board of Directors
Pune (Narendra Singh)
Date: 14.06.2013 Chairman and Managing Director
   

Peer Comparison

Company Market Cap
(Rs. in Cr.)
P/E (TTM)
(x)
P/BV (TTM)
(x)
EV/EBIDTA
(x)
ROE
(%)
ROCE
(%)
D/E
(x)
St Bk of India 150,642.89 13.51 1.38 14.51 15.4 0.0 0.00
Bank of Baroda 33,325.25 7.42 1.02 15.30 15.1 0.0 0.00
Punjab Natl.Bank 28,230.60 7.70 0.89 12.68 16.5 0.0 0.00
Bank of India 14,104.03 4.82 0.59 14.59 13.0 0.0 0.00
Canara Bank 12,696.18 4.97 0.54 11.92 13.2 0.0 0.00
IDBI Bank 10,626.10 9.18 0.50 12.70 10.2 0.0 0.00
Union Bank (I) 9,599.47 5.03 0.59 13.67 15.0 0.0 0.00
UCO Bank 7,584.96 5.95 0.81 13.54 9.1 0.0 0.00
Oriental Bank 6,853.07 6.03 0.56 12.44 11.5 0.0 0.00
Central Bank 6,772.46 0.00 0.50 13.46 8.3 0.0 0.00
I O B 6,423.81 16.35 0.46 13.27 4.9 0.0 0.00
Syndicate Bank 6,286.40 3.32 0.64 14.12 22.8 0.0 0.00
Indian Bank 6,101.16 5.17 0.56 12.64 15.7 0.0 0.00
Allahabad Bank 5,157.46 4.52 0.47 12.83 11.8 0.0 0.00
Corporation Bank 4,750.60 5.42 0.47 12.57 16.1 0.0 0.00

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Key Information

Key Executives:

Sunil U Deshpande , Director (Officer Employee)  

Ramesh Chandra Agrawal , Director  

Medha Pramod Devdhar , Company Secretary  

Ateesh Singh , Nominee (Govt)  


Company Head Office / Quarters:
Lokmangal,
1501 Shivajinagar,
Pune,
Maharashtra-411005
Phone : 91-20-25511360
Fax : 91-20-25533246
E-mail : investor_services@mahabank.co.in
Web : http://www.bankofmaharashtra.in
Registrars:
MCS Ltd
Kashiram Jamnadas Bg
Office No 21/22
5 PD Mello Road
Mumbai - 400009

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