Punjab National Bank aligned its business plan with the cyclical movement in Indianeconomy to overcome the challenging times during FY14. PNB maintained its Number Oneposition amongst nationalised banks in terms of Domestic Business, Domestic Deposits,Domestic Advances, CASA Deposits and Operating Profit as on 31st March14.Further, the Bank with more than 6200 branches has largest domestic network amongstnationalised banks serving more than 8.9 crore customers.
During FY14, the Bank crossed various new landmarks such as Rs. 8 lakh crore ofAggregate Global Business, Rs. 4.5 lakh crore Total Deposits, Rs. 3.50 lakh crore GrossAdvances, Rs. 1.70 lakh crore CASA Deposits, Rs. 1.40 lakh crore Saving Deposits, Rs.30,000 crore Current Deposits and Rs. 11,000 crore Operating Profit. The Bank has achievedreasonable performance in overseas operations with Overseas Business and Overseas Advancescrossing Rs. 70,000 crore and Rs. 40,000 crore respectively.
In terms of profitability ratios, the Bank recorded one of the highest Net InterestMargin of 3.44% during FY'14. Further, the capital adequacy ratio of the Bank stood at12.29% as per Basel II and 11.52% as per Basel III as at 31st March14.The Book value per share increased from Rs. 884.03 in FY13 to Rs. 952.50 inFY14. In this backdrop, your Directors take pleasure in placing the BanksAnnual Report for 2013-14 along with its audited annual financial statements.
A. FINANCIAL HIGHLIGHTS
1 BALANCE SHEET
| || || ||(Rs. crore) |
|Particulars ||31st Mar13 ||31st Mar14 ||Growth (%) |
|Total Business ||700356 ||800666 ||14.3 |
|Deposits ||391560 ||451397 ||15.3 |
|Advances ||308796 ||349269 ||13.1 |
| || || ||(Rs. crore) |
|Particulars ||FY '13 ||FY '14 ||Growth (%) |
|Operating Profit ||10907 ||11384 ||4.4 |
|Provisions ||6160 ||8042 ||30.6 |
|Net Profit ||4748 ||3343 ||-29.6 |
|Particulars ||FY'13 ||FY'14 |
|Cost of Funds ||5.70 ||5.20 |
|Yield on Funds ||8.83 ||8.31 |
|Return on Equity ||15.19 ||9.69 |
|Net Interest Margin ||3.52 ||3.44 |
|Return on Assets ||1.00 ||0.64 |
|Cost to Income Ratio ||42.81 ||45.06 |
|Operating Expenses to Average Working Funds ||1.72 ||1.79 |
|Operating Profit to Average Working Funds ||2.30 ||2.19 |
|Earnings per share (Rs.) ||139.52 ||93.91 |
|Book value per share (Rs.) ||884.03 ||952.50 |
|Provision Coverage Ratio ||58.83 ||59.07 |
|CRAR - Basel II ||12.72 ||12.29 |
|CRAR - Basel III ||- ||11.52 |
B. OPERATIONAL HIGHLIGHTS
The Bank has received approval from regulator for adoption of FoundationInternal Rating Based Approach (FIRB) for Credit Risk on parallel run basis. Further, theBank has also submitted formal Letter of Intent for adoption of Internal Models Approachfor Market Risk.
The Bank has submitted formal application to RBI for in-principle approval forparallel run of Advanced Management Approach (AMA) for Operational Risk on 22.03.2014.
The Bank has put in place New Automated PMS (Preventive Monitoring System) forall borrowal accounts having exposure of more than Rs. 1 crore across all branches.
The Bank launched a Special NPA Reduction Campaign from 1st December,2013 upto to 31st March, 2014. The campaign is a recovery drive to maintain thefocus of the Bank on improvement in asset quality. Progress of this is being monitored ondaily basis.
The Bank launched a PPF campaign for the first time from 1stJanuary, 2014 to 31st March, 2014 to augment and create vibrancy in PPFbusiness. Further to augment fee based income, E-freight and E-stamping products initiatedduring the year.
To facilitate real time credit into the accounts of PNB Customers, the Bank hasentered into an arrangement with UAE Exchange under FLASH Remit. Indian expatriates whohave account with the Bank can credit money in their accounts on real-time basis.
In view of the shortcomings experienced in the off-line technology of TechnicalServices Providers (TSPs) and Business Correspondents (BCs) to strengthen the financialinclusion initiative, the Bank has moved ahead and acquired its own technology of KioskBanking Solution (KBS) where BC services are available on-line mode. All transactions arenow in real time on-line in Core Banking Solution (CBS).
Under Operational Transformation Exercise, the Bank introduced PragatiProductivity Points (PPP) system to measure productivity and efficiency in all domesticgeneral banking branches. This is a unique initiative of its kind by any bank, whichprovides a comprehensive metric for measuring branch performance and productivity acrossbranches with diverse transaction profiles.
The Board of Directors in its meeting held on 31st January 2014 declared thedividend @ Rs. 10 (i.e. 100%) per equity share of Rs. 10 each for FY14.
D. BUSINESS OVERVIEW
Banks total business reached Rs. 8,00,666 crore at the end of March14,registering an absolute increase of Rs. 1,00,310 crore and a YoY growth of 14.3%. TheBanks overseas business increased by 52% over previous year to reach Rs. 73,447crore.
2. Resource Mobilization
Banks total deposits amounted to Rs. 4,51,397 crore as at the end ofMarch14, showing an absolute accretion of Rs. 59837 crore and a YoY growth of 15.3%. The share of low cost deposits (current + savings) in total domestic deposits was 41.3%in FY14 vis--vis 40.9% in FY13. As on 21st March 2014 i.e., theLast Reporting Friday (LRF) of FY14, PNBs share in systems AggregateDeposits reached 4.98%.
The Bank launched a Saving Deposit Campaign from 01.08.13 to 31.12.2013 wherein Rs.2805 crore were mobilized by opening about 11.68 Lac new accounts. An NRI Deposit Campaignwas also launched from 01.11.13 to 31.01.2014 to encourage mobilization of NRI deposits inthe Bank. During the campaign, Rs. 7541 crore was mobilized in 14,499 new accounts. PNBSaksham, a new product with two variants, has been launched on 11.11.2013. The Bank hasmobilized Rs. 25.27 crore under the scheme.
3. Credit Deployment and Delivery
Net advances of the Bank as at the end of March 2014 stood at Rs. 3,49,269 crore,compared to Rs. 3,08,796 crore as at end March 2013, registering an increase of Rs. 40473crore (YoY growth of 13.1%) over last year. Yield on Advances of the Bank stood at 10.36%for the year ended March 2014. As on 21st March 2014 i.e., the Last ReportingFriday (LRF) of FY14, PNBs share in systems credit reached 4.98%.
PNB is the designated Nodal Bank under Technology Up-gradation Fund Scheme (TUFS) ofthe Ministry of Textiles, Govt. of India. For speedier processing of claims under TUFS, adedicated cell at the corporate office facilitates distribution of subsidy to eligibletextile units. The Bank has 677 accounts in SSI and Non-SSI category along with 396 SSIaccounts covered under 15% Credit Linked Capital Subsidy (CLCS) scheme under TUFS. DuringFY'14, the Bank disbursed Rs. 183.15 crore to eligible textile units under TUFS.
To strengthen the credit monitoring system, an Independent Division viz. CreditMonitoring Division, is functioning at Head Office with a General Manager as its verticalHead. Similarly, nodal officers have been appointed in all the FGMOs/COs to havecontinuous watch over the health of the assets. All weak and irregular accounts aremonitored through Task Force Meetings at different levels of the Bank i.e. CO/FGMO &HO on continuous basis. The core issues of weaknesses in the accounts are identified andaddressed.
i. Loan Syndication
The Bank has a Syndication Department at Head Office and Syndication cells at Mumbaiand Chennai. The Bank also has a dedicated Technical Cell at Head office which undertakesProject appraisal and Techno Economic Viability (TEV) studies. These studies are forinternal use and for sharing with participating banks as part of syndication assignments.
During FY14, the Bank gave approvals for appraisal/ syndication of debtaggregating Rs. 12,578 crore with PNBs share of Rs. 6201 crore. Total Income bookedduring FY14 stood at Rs. 18.54 crore. In addition, Rs. 11.85 crore was received inthe form of fees as at 31st March 2014 from assignments in hand.
ii. Retail Credit
The growth of Retail Loan portfolio continues to be the thrust area of the Bank.Banks policies on product development as per the customer requirements, prudentpricing, customisation and aggressive marketing are directed towards boosting businessunder Retail Loan segment. The Bank has 79 specialized Retail Asset Brancheswith an exclusive focus on retail credit.
Retail Credit increased to Rs. 38,864 crore registering YoY growth of 22.5% as on 31stMarch 2014. The Core Retail portfolio which comprises Housing, Vehicle, Education,Personal, Pensioner, Gold, Mortgage and Reverse Mortgage Loan Schemes increased to Rs.31,930 crore which grew by 19% (YoY) as on 31st March 2014.
The Housing Loan segment registered a YoY growth of 19% with outstanding amount of Rs.17,038 crore as on 31.03.2014. The outstanding under Vehicle Loan increased to Rs. 3577crore as on 31.03.2014 registering a YoY growth of 24%. Education Loan segment at Rs. 4258crore grew by 6.5%. A noticeable YoY growth of 34% has been witnessed under Personal Loansegment along with YoY growth of 16% and 13% under Reverse Mortgage and Mortgage Loansrespectively.
The Bank also implemented various schemes of Govt. of India such as Credit RiskGuarantee Fund Scheme for Low Income Housing (CRGFSLIH), Housing Interest Subsidy Schemeunder the name of Rajiv Rinn Yojna launched by Ministry of Housing & UrbanPoverty Alleviation and Education Loan Interest Subsidy under Central Scheme for InterestSubsidy sanctioned upto 31.03.2009 and outstanding as on 31.12.2013.
iii. Priority Sector
The Bank surpassed National Goal of 40% of ANBC in Priority Sector as on 31stMarch 2014. The performance highlights are given in the table:
| ||31.03.2013 ||31.03.2014 ||YoY Growth |
|Priority Sector Credit ||91076 ||120008 ||31.8 |
|Of which: || || || |
|(a) Agriculture Sector ||37777 ||53053 ||40.4 |
|- Direct ||33809 ||44406 ||31.3 |
|- Indirect ||3968 ||8647 ||117.9 |
|(b) MSME (Priority) ||39738 ||53827 ||35.5 |
|(c) Others ||13561 ||13128 ||-3.2 |
|- Credit to Weaker Sections ||27588 ||30497 ||10.5 |
|- Credit to Women Beneficiaries ||14084 ||14301 ||1.5 |
Achievement of National Goals
|Parameters ||% age of ANBC || |
| || ||31st March ||31st March |
| ||Target ||2013 ||2014 |
|Priority Sector Credit ||40.00 ||33.11 ||42.30 |
|Of which: || || || |
|(a) Agriculture Sector ||18.00 ||13.73 ||18.70 |
|(b) Direct Agriculture ||13.50 ||12.29 ||15.65 |
|(c) Credit to Weaker Sections ||10.00 ||10.03 ||10.75 |
|(d) Credit to Women Beneficiaries ||5.00 ||5.12 ||5.04 |
Credit to Agriculture
Credit to Agriculture sector increased to Rs. 53,053 crore as on 31st March2014 registering a YoY growth of 40.4%. The ratio of Agriculture Advances to ANBC was18.70%. The achievement under Direct Agriculture Advances was Rs. 44,406 crore andsurpassed National Goal of 13.5% during FY14. During FY14, the Bank hasdisbursed agriculture loans to the tune of Rs. 43,884 crore to 24.42 lakh farmers andissued 3.37 lakh Kisan Credit Cards.
Initiatives taken by the Bank for increasing flow of credit to agriculture
o On all agriculture loans, interest rates have been reduced to BR+ 2% uniformly.
o The Bank launched two "Special Agriculture Credit Campaigns", one from15.06.2013 to 31.08.2013 during Kharif season and second from 01.11.2013 to 15.01.2014during Rabi season to increase lending to Direct Agriculture. During the campaign period,Rs. 5088 crore was disbursed to 3.74 lakh new farmers.
o In order to boost agriculture advances, the Bank celebrated "AgricultureDay" on 18.09.2013, "Milk Day" on 19.12.2013 and "Farmers Day" on23.12.2013. On these three occasions, the Bank disbursed Rs. 1105 crore to 65,292 farmers.
o Farm Mechanization campaign was also launched from 22.02.2014 to 25.03.2014. Duringthe campaign, loans of Rs. 43.22 crore were disbursed in 1218 accounts.
Modifications in existing schemes
o The limit under Kisan Gold scheme has been enhanced to Rs. 20 lakh.
o Various schemes such as financing for setting up of Custom Hiring/ Service unit,financing against pledge of warehouse receipts issued by cold storage and financing thedealer/seller of agriculture inputs have been modified.
o Scheme for Purchase of Land has been modified. Applicant farmers have been allowed topurchase agriculture land within a radius of 15 kms (earlier it was 3-5 kms) from theexisting land owned by them.
o Tractor Loans for repair/renovation of tractors has been enhanced to Rs. 1 lakh andmore than 5 years old tractors are eligible under the scheme.
Other initiatives taken
o Important documents, forms and circulars uploaded on SMILE products of Knowledgecenter website.
o An independent portal developed for online monitoring of 637 Agriculture officers.
o Upto 31.03.2014, PNB Rupay Kisan card (KCC-Debit Card) were issued in 5.68 lakh KCCaccounts out of 15.12 lakh eligible KCC accounts.
o In order to simplify processing of Agriculture loans-Lending Automation ProcessingSystem (LAPS) Agriculture module is being implemented.
o RBI has allotted Lead Bank Responsibility of three new districts of Delhi namelyNorth East Delhi, North West Delhi and East Delhi to PNB in July 2013. At present, theBank has lead responsibility in 63 districts of the country.
o This year Banks focus is on increasing the share of Investment Credit in Agriculturemainly Farm Mechanization, Dairy, Poultry, Plantation, Horticulture, Rural Godowns, Coldstorages, Input Dealers etc, apart from financing under KCC by extending our farmersbase.
Credit to Weaker Sections & SC/ST
Credit to weaker sections by the Bank increased to Rs. 30,497 crore in March, 2014,registering YoY growth of 10.54%. Ratio of Weaker Sections advances to ANBC at 10.75%continued to be higher than the National Goal of 10%. Credit to SC/ST beneficiariesamounted to Rs. 3384 crore as at 31st March 2014.
Credit to Women beneficiaries
The credit to women beneficiaries at Rs. 14301 crore registered 5.04% as percentage ofANBC at the end of March 2014. A dedicated Women Cell functions at Corporate Office whichclosely monitors the progress under various lending schemes for women beneficiaries andredesigns the existing ones as per emerging needs.
Credit to Minority Communities
Banks credit to minority communities stood at Rs. 18,923 crore as onMarch14 and constitutes 15.77% of Priority Sector advances.
The Bank credit-linked 2,04,826 Self Help Groups (SHGs), extending credit amounting toRs. 18,88.60 crore thus recording YoY growth of 15.54% as at 31stMarch14. The number of deposit-linked SHGs rose to 2,46,258 in cumulative termsduring FY14. Further, the Bank has 1,46,545 credit-linked women SHGs and 1,74,587savings-linked women SHGs. During FY14, a new scheme for promotion/ support of womenSelf Help Groups in Backward & Left Wing Extremism affected districts of India hasbeen made operational in 13 identified districts and 4885 SHGs have been formed under thescheme, out of which 1913 SHGs have been credit linked. Further the Bank also implementedNational Rural Livelihood Mission (NRLM).
Micro, Small and Medium Enterprises
The credit to MSME sector increased to Rs. 75051 crore registering a YoY growth of22.08% in FY14 and constituted 23.91% of Total Non-Food Credit. The advances toMicro Enterprises grew at 30.74% thus reaching a level of Rs. 24,716 crore. TheBanks MSE advances at Rs. 59,213 crore surpassed Statement of Intent (SOI) target ofRs. 58,500 crore for March 2014. The Bank implemented recommendations of High Level TaskForce constituted by Honble Prime Minister to address the issue of MSME sector:
Against the envisaged growth of 20% in credit to Micro and Small Enterprises,the outstanding MSE advances at Rs. 59,213 crore achieved YoY growth of 21.63%.
The outstanding number of Micro Enterprises Accounts were 4,68,918 as on 31stMarch14, showing YoY growth of 10.04% against the envisaged growth of 10%.
For speedier appraisal of loan proposals, branches are using the SME ScoringModel for loans upto Rs. 50 lakh.
Liberal moratorium on term loan and working capital has been extended byincluding interest also, during first 6-12 months of operation on case to case basis andinterest debited during this period is being treated as long term funding of project andinstallments after moratorium period are fixed accordingly.
During FY14, the Bank covered 14,925 cases under the CGTMSE scheme with creditoutlay of Rs. 870 crore. The Bank is also extending interest concessions to MSE accountsand the rate of interest capped at Base Rate+4.00% including term premia in the CGTMSEcovered accounts.
The Bank is also pro-actively participating in various schemes of the Government ofIndia viz., Prime Minister Employment Generation Programme (PMEGP), Credit Linked CapitalSubsidy Scheme (CLCSS) for Micro & Small Enterprises, Khadi & Village IndustryCommission (KVIC) and Technology Up-gradation Fund Schemes for Textile & Jute Sector(TUFS), Subsidy Scheme for Food Processing Industries, etc.
MSME Credit Growth Initiative Branches
MSME Credit Growth Initiative has been launched in 250 branches in January 2014. Thisinitiative proposes to reduce turnaround time to 2-4 weeks and to grow MSME portfolio by30% from December13 to December14. MSME advances in these branches haveincreased to Rs. 37,462 crore as on 31st March 2014 showing YoY growth of7.96%.
A New Scheme "PNB Sanjeevani" has been launched with competitive Interestrate and other attractive features. This scheme is for financing professionally qualifiedmedical practitioners.
Interest Concession to Micro and Small Enterprises
To support new and existing Micro & Small Enterprises, the Bank is extendinginterest concessions of 75 basis points on chargeable Interest Rate for loans up to Rs. 25lakh.
Concessional Interest rates in various schemes
Concession in interest rate ranging from 2.25% to 3.25 % and concession in processing /upfront fee of 50% is available for Food and Agro based units. Special concessional rateof interest i.e. Base Rate+1% to Base Rate+2% is available to MSME units engaged inmanufacturing of Agriculture Inputs. Further concessional rate of interest i.e. BaseRate+1.50% to Base Rate+2% is available to Arhtiyas and Commission Agents. The interestrate for loan against warehouse receipt reduced to Base Rate+1% (inclusive of charges ofCollateral Managers).
The Bank has adopted the cluster based lending approach and has 55 clusters to givefocused attention to the sector.
Simplified Loan Application for MSMEs (Manufacturing & Servicesector) has been made available along with the check list of documents.
Facility of submission of application on-line by prospective borrowers,with the option to track progress of application under MSE segment has been provided.Further a concession of 20% in upfront fee and processing fee is extended to borrowers whosubmit application on-line.
For growth in Service Sector, the Bank has Tie ups/MoUs with vehiclemanufacturers like Tata Motors, Ashok Leyland, Mahindra & Mahindra Ltd., Bajaj AutoLtd., Piaggio Vehicles P Ltd., Volvo Eicher Commercial Vehicles Ltd., Hindustan MotorsLtd., TVS Motor Co. Ltd., Asia Motor Works, Atul Auto Ltd., JS Auto, ICML Ltd. and Escortsfor financing transport dealers.
iv. Financial Inclusion
The following business models are adopted by the Bank for Financial Inclusion (FI):
Direct Benefit Transfer (DBT) Scheme
Government of India has extended scheme of Direct Benefit Transfer in 78 additionaldistricts in phase II w.e.f. 01.7.2013 in addition to 43 pilot districts in phase I w.e.f.01.01.2013. At present, 26 schemes of central government are being covered. The amount ofLPG subsidy is also being reimbursed in 293 districts in six phases, launched with fourpilot districts on 01.06.2013. The Bank has covered all SSAs of DBT/ DBTL districtsthrough our banking outlets i.e. bank branches/BC locations. The Bank has lead Bankresponsibility in 63 districts, out of which 8 are amongst the 43 pilot districts coveredunder Phase I and 6 districts are covered under Phase II.
On-line Transactions at BC Locations
To provide BC services in on-line mode, the Bank has put in place Kiosk BankingSolution (KBS) which is a proprietary software. With this new technology, the FinancialInclusion customers can access all basic banking services (account opening, cashwithdrawal, cash deposit, mini statement, balance enquiry and fund transfer) required bythem at BC location in real time. Now, FIcustomers can also transact on ATMs and MerchantPOS outlets. The customers of the Bank (whose biometrics have been captured) can now makebanking transactions either at any branch/ ATM or any BC locations across the country. TheBank is also working towards offering inter-operability at BC locations of the Bank thatwould further facilitate the making of interbank transactions across the country bycustomers.
The Bank is using Aadhaar Payment Bridge System (APBS) platform of NPCI for DBT/MGNREGA/ National Social Assistance Programme (NSAP) payments. Now, the Bank is gearing upfor Aadhaar Enabled Payment Services (AEPS) for payments by way of Aadhaar authenticationfrom UIDAI data base.
Use of Business Correspondent (BC)
For an efficient and effective BC network, the Bank adopted a mix of BC Models usingKBS technology for each Sub Service Area (SSA) or Urban Ward (UW) within the service areaof a base branch. The Bank has 8490 SSAs across the country. Out of these 2406 SSAs arecovered by branches and 2549 SSAs are covered by BC locations under on-line KBStechnology.
Common Business Correspondents: As per MOF directives in respect of CommonBC, the Bank has engaged 89 BCAs of M/s Vakrangee Finserve Limited, a Common BC inRajasthan.
Corporate BC: The Bank has engaged 240 Business Correspondence Agents ofCorporate BC using KBS technology. The Bank is in process of migrating offline TSP basedBC model to online Kiosk Banking Solution (KBS) based Corporate BC.
Individual BC: The Bank has 915 Individual BC Agents using KBS technology.
New Initiatives: In addition to providing basic banking facility, newfacilities viz., Indo Nepal Remittance, Immediate Inter Bank Remittance (IMPS), MicroCredit, Micro Deposit Scheme, Micro Pension and Micro Insurance have been added and areavailable at BC locations.
v. Asset Quality
In all Non Performing Assets (NPAs), account-specific resolution strategies wereimplemented and progress was monitored regularly. Daily progress of recovery in NPAs(outstanding Rs. 10 lacs and above) was monitored and placed before Top Management.Further compromise/negotiated settlements through one to one meeting with borrowers wasadopted as another vital strategy to tackle NPAs. The Bank also has 17 Asset RecoveryManagement Branches (ARMBs) and 20 Special Asset Recovery Cells (SARCs)which functionexclusively for resolving NPAs.
Initiatives taken during FY'14
The Bank has launched a Special NPA Reduction Campaign from 01.12.13 to31.03.2014. The campaigns progress is monitored on daily basis. Besides this theBank has a regular staff Incentive Scheme called "Prayaas" to promote recoveryin NPAs and written off accounts.
Engagement of retired bank officials as Resolution Agents on commission basis inaccounts up to Rs. 1 crore.
During FY14, in 4891 Rin Mukti Shivirs, cash recovery of Rs. 269 crore wasobtained from 70263 accounts and up-gradation of 19501 accounts with balance outstandingof Rs. 266 crore. Thus, NPA of Rs. 534 crore were resolved in these shivirs.
OTS was marketed as a product for faster resolution of NPAs and OTS in 61,398accounts was approved.
Online Portal for monitoring of DRT Cases and SARFAESI has been launched.
At the instructions of Department of Financial Services, Ministry of Finance,Govt. of India, a Special Committee of the Board has been constituted by CMD, EDs and GOIDirector to monitor the progress of recovery in NPA accounts on regular basis and submitits report to the Board on Monthly basis.
The Bank recovered Rs. 1792 crore in freshly slipped accounts.
Accounts with aggregate outstanding of Rs. 1429 crore were upgraded to standardcategory. Total cash recoveries in NPA accounts amounted to Rs. 2611 crore. Through welldefined recovery policy Rs. 588 crore were recovered in approved OTS cases throughnegotiated settlements. During FY14, the Bank recovered Rs. 515 crore out of theaccounts earlier written off.
a. Industrial Rehabilitation
During FY14, Draft Rehabilitation Scheme (DRS) was formulated by the Bank actingas Operating Agency of BIFR in 2 accounts. The Bank has also implementedrehabilitation package in one case sanctioned by BIFR during FY14.
b. Corporate Debt Restructuring (CDR)
During FY14, 43 accounts with outstanding of Rs. 6381.30 crore were restructuredunder CDR and out of these, the Bank has been assigned the role of Monitoring Institutionin 8 accounts.
c. Debt Restructuring Mechanism for Small and Medium Enterprises
During FY14, the Bank has restructured 290 accounts with aggregate outstanding ofRs. 339.43 crore.
The Bank has also put in place a transparent mechanism for restructuring of debts ofpotentially viable units, which are facing temporary problems due to factors beyond theircontrol even for cases which cannot be covered under BIFR/ CDR/DRM for SMEs. During FY'14,49 accounts involving Rs. 2850 crore were restructured/ rescheduled under this category.
4. Risk Management
The Bank has a robust credit risk framework and has placed credit risk rating models oncentral server based system PNB TRAC, which provides a scientific method forassessing credit risk rating of a client. The Bank is undertaking periodic validationexercise of its rating models and also conducting migration and default rate analysis totest robustness of its rating models. Further, the mapping of internal rating grades toexternal rating agencies grades has been undertaken. The output of the rating models isused in the decision making of the Bank (viz. sanction, pricing, loaning powers besidesaudit, review & monitoring of credit portfolio). The Bank has set a desired portfoliodistribution in terms of Low Risk, Medium Risk & High Risk categories and the actualportfolio is being monitored on quarterly basis and the same is placed to the RiskManagement Committee (RMC) of the Board. The Bank has developed and placed on centralserver scoring models in respect of retail banking and SME sector advances. Theseprocesses have helped the Bank to achieve quick & accurate delivery of credit, bringuniformity in the appraisal and facilitate storage of data & analysis thereof. Ascoring model for farm sector has also been developed.
The Bank has in place a well defined organizational structure for market riskmanagement functions, which looks into the process of overall management of market riskviz. interest rate risk & foreign exchange risk and implements methodologies formeasuring and monitoring the same. Tools like stress testing, duration, modified duration,VaR, etc. are being used effectively in managing risk in the Treasury operations. The Bankmonitors various investment limits on real time basis.
Asset liability management of the Bank is done on proactive basis to manage anyeventuality. Though liquidity position in the system remained tight during the year, theBank managed to tide over the situation through proactive liquidity management throughvarious prescribed tools like Repo etc. The liquidity situation of the Bank iscomfortable. With Core Banking Solution (CBS) covering entire branch network, the AssetLiability Management in respect of all assets and liabilities is being done on dailybasis. Interest rates in respect of assets and liability products are fixed on scientificbasis as per extant regulatory guidelines.
The Bank has robust operational risk management framework with a well-definedOperational Risk Management Policy. The Bank is identifying, measuring, monitoring andcontrolling/ mitigating the operational risk by analyzing historical loss data, Risk &Control Self Assessment Surveys (RCSAs), Key Risk Indicators (KRIs) and Scenario Analysisetc. The Bank has also introduced an on-line Op-Risk Solution under Enterprise wide DataWarehouse (EDW) and placed it on central server to take care of various aspects of datacapturing and management information system at various levels.
The Bank has migrated to New Capital Adequacy Framework (NCAF), popularly known asBasel II w.e.f March 2008 and approaches prescribed by the Regulator, namelyStandardized Approach under Credit Risk and Basic Indicator Approach under OperationalRisk have been implemented. Standard Duration Approach for Market risk has been adopted bythe Bank since March 2006. As per the RBI guidelines, relevant risk management policiessuch as Risk Management Philosophy & Policy, Credit Management & Risk Policy,Investment Policy, ALM Policy, Operational Risk Management policy, Policy for MappingBusiness Lines/ Activities, Outsourcing Policy, Business Continuity Plan, Credit RiskMitigation & Collateral Management Policy, Internal Capital Adequacy AssessmentProcess (ICAAP) Document, Stress Testing Policy, Group Risk Management Policy etc., havebeen got approved by the Board and have since been implemented.
The Bank is gearing itself to adopt the advanced approaches in due course of time underdifferent risks and the estimation of various risk elements is already in progress. TheBank has received approval from RBI for adoption of Foundation Internal Rating BasedApproach (FIRB) for Credit Risk on parallel run basis. The Bank has already got anapproval for migration to "The Standardized Approach (TSA)" under OperationalRisk on parallel run basis. PNB is the first bank in India to get an approval formigrating to the TSA for Operational Risk. Based on Letter of Intent filed by the Bank formigration to Advanced Measurement Approach (AMA) for Operational Risk, RBI advised theBank to submit detailed application for the same. Accordingly, the Bank has submittedformal application to RBI for in-principle approval for parallel run of AMA on 22.03.2014.The Bank has also submitted formal Letter of Intent for adoption of Internal ModelsApproach (IMA) for Market Risk.
The Bank adopted the Basel III guidelines from 01.04.2014 in line with the Reserve Bankof Indias guidelines. The Bank has taken necessary steps to implement the variousprovisions as required under Basel III guidelines issued by RBI. Capital planning is beingcarried out keeping in view the various requirements under Basel III.
Major initiatives in the area of "Risk Management" during the year
The Bank availed the service of M/s KPMG for carrying out the external audit ofrisk management systems. Final audit report in respect of Credit, Market, Operationalrisk, ALM systems and ICAAP has been submitted. The findings are helping in furtherupgrading and refining our Risk Management Systems.
The Bank has started conducting Group Risk Management Committee meetings atquarterly intervals wherein representatives from domestic/overseas subsidiariesparticipate. Discussion on Group Risk mitigation, adoption of advanced approach ongroup-wide basis, group-wide capital planning and related items are discussed in theaforesaid meeting.
The Bank has raised Basel III compliant Tier II bonds of
Rs. 1500 crore from the market during FY14. The Bank has also obtained CreditRatings of its Tier II bonds from various rating agencies. The awarded ratings from M/sCRISIL, ICRA and India Ratings are CRISIL AAA/Stable, ([ICRA] AAA (hybrid instrument)(Stable)) and IND AAA / Stable respectively.
The Bank has put in place New Automated PMS (Preventive Monitoring System) forall borrowal accounts having exposure of more than Rs. 1 crore across all branches.
In view of increased and diversified portfolio growth, Board has approved 10non-default rating grades in place of existing seven default-rating grades. Credit RiskRating Framework now has 10 non-default rating grades. All accounts having total limits(Fund Based + Non Fund Based) above Rs. 50 lacs are subjected to risk rating, exceptaccounts in exempted categories.
The Bank has put in place facility rating framework for assigning rating tofacilities sanctioned to borrower based on default rating and securities available. Thiswill help the Bank to price facilities availed by borrowers in scientific and transparentmanner.
5. Information Technology
I. Implementation of Core Banking Solution (CBS)
The Bank has vast network of 6410 service outlets covered under CBS with more than894.85 lacs customers accounts. PNB has been a pioneer Bank in integrating all itsbranches under the Core Banking Network.
II. Alternate Delivery Channels
a) Internet Banking Services
The Banks internet banking service is catering to around 24.96 lacs customerswith its retail and corporate modules as on 31st March14. The Bank hasbeen constantly adding new features to its Internet Banking Services. These include therevamping of User Interface of both Retail and Corporate IBS Modules, making it simplerand easy to use, Online User Registration, Online Password Reset, Change of User ID andcapturing of leads through Internet Banking for various products offered by the Bank.
The Bank has strengthened its security in Internet Banking services operations. OneTime Password (OTP) as a second factor of authentication for doing transactions in retailinternet banking has been started. Further, customer induced limits for retail andcorporate customers has been introduced. Now customer induced options are provided forfixing a cap on the value/mode of transactions/beneficiaries. In the event of customerwanting to exceed the cap, an additional authorization in the shape of OTP (One TimePassword) has been introduced. A system of alerts is introduced when a beneficiary isadded.
b) SMS Alert Services
SMS Alerts Services have been successfully deployed in the Bank for both retail andcorporate customers and SMS alerts are being generated for identified transactions(credit/ debit) done at branches, ATM, IBS, Mobile Banking and POS terminals. Presentlyaround 2.46 crore customers have subscribed for SMS Alerts facility and on an averagearound 17.87 lacs SMS alerts are generated every day.
c) Mobile Banking Services
Mobile Banking is a delivery channel with different functionalities, entities andrelationships with respect to other banking channels. There are two levels of mobile basedservice. One is the basic level which includes services like balance enquiry, SMS alertfor any debit or credit transaction in the account, status of last transactions andrelated services. Second is the advanced level, which includes processing of financialtransactions like payments, transfers and stop payments. Presently 97481 customers havesubscribed for Mobile banking facility. As on 31st March14, 202110transactions per month amounting to Rs. 108.76 crore per month both incoming and outgoingwere carried out.
III. Cheque Truncation System (CTS)
During FY14, CTS has been implemented at 20 MICR locations in the states ofMaharashtra, Goa, Madhya Pradesh, Gujarat and Chhattisgarh under Western Grid.
IV. IT Security
The Bank has an Information Security Policy, which is approved by Board and reviewedeach year to keep it updated as per latest trend and best practices. It is also having anInformation System Security Architecture Implementation Committee (ISSAIC) which meets onmonthly basis to review & recommend implementation of Information security posture.
a. Security Operations Centre (SOC)
To monitor information security events across the Banks network, the Bank hasestablished a Security Operations Centre (SOC) which is first of its kind that has beenset up by any Indian Bank.
b. ISO 27001
Banks critical infrastructure, like Data Centre, Network Operation Centre &Disaster Recovery Data Site are ISO 27001 certified.
c. Cyber Crime Monitoring Cell (CCMC)
CCMC co-ordinates the activities related to disputed/ suspected transactions, usinginternet banking (IBS), mobile banking and ATM/ Debit Cards, with all the relateddepartment/divisions/branches and with the affected customers.
During 1st April, 2013 to 28th Feb, 2014, cases reported to usand amount involved are as under:
|No. of Incidents ||Amount Involved (Rs.) ||Amount Reversed/ Frozen (Rs.) |
|923 ||6,62,53,780 ||3,37,22,307 |
d. Business Continuity Plan & Disaster Recovery (BCP & DR)
The Bank has a well defined Business Continuity Plan (BCP) to provide un-interruptedcustomer services in case of any exigency in the branches. The Bank has fully operationalDisaster Recovery Site (DRS) of its Data Centre with well defined Recovery Time Objective(RTO) and Recovery Point Objective (RPO). DR drill is conducted regularly to keep testingits functional preparedness.
V. New IT Based Products/Services
Kiosk Banking Solution has been made live across the Bank and RRBs throughinternet and intranet.
Automation of Fund Transfer Orders (FTOs) for MGNREGA has been implemented inall RRBs.
Migration of Parvatiya Gramin Bank with Himachal Gramin Bank was successfullycompleted.
HORTNET Project: Customisation has been done for Maharashtra. Through thisportal, subsidy from horticulture department is being processed for Maharashtra State.
XOOM RDA (Rupee Drawing Arrangement): The application is developed toautomate the payments of beneficiaries in India. The software makes total automation ofthe payments, which was handled by IBB Branch manually.
Bureau-One is an application through which credit information report frombureaus like Equifax, Experian and CIBIL can be generated under a single-login on PNBintranet.
6. Transaction Banking
The Bank has undertaken several initiatives in its continued efforts to provide better,prompt and efficient service to the customers.
a) Cash Deposit Machine (CDM) for convenience of small depositors, depositing cashup to Rs. 30,000/-, 1411 CDMs/ Multifunction Kiosks have been installed in variousbranches of the Bank. As of now 45% cash transactions upto Rs. 30,000/- are happeningthrough CDMs. These machines have also helped to relieve the congestion at branches.
b) Electronic Cheque Deposit Machines (ECDM) - As per MOF guidelines ECDMs havebeen installed in 685 urban and metro branches. These ECDMs provide an automated proof ofdeposit of cheque by issuing cheque-image based receipt to customer, specifying the branchin which the cheque is deposited along with the date and time of deposit.
c) Queue Management System (QMS) - In 407 branches, QMS has been installed toregulate the flow of customers without standing in queue for getting their work done.
d) Pass Book Updating Machines (PUM) - For better customer service, 1409 PUMs havebeen installed in various branches across the country.
e) Bank has launched following 3 new Debit Cards during the current year:
i) Pungrain RUPAY debit Card for farmers: Bank has started issuing PungrainRupay debit Cards to farmers also in the Punjab from current season.
ii) HSAMB RUPAY Debit Cards for Arhtiyas of Haryana State: The Bank startedissuing Haryana State Agricultural Marketing Board (HSAMB) cards to Arhtiyas in designatedMandis in the state of Haryana. This debit card can be used by Arhtiyas for GrainProcurement/ Sale at the mandis as well as at the ATMs/ POS within India. These cards haveenhanced security features including second factor authentication.
iii) Bank has launched EMV chip based Global Debit Card which cannot be cloned. Asecond factor of authentication is enabled, which requires keying in PIN at POS bycustomer with OTP (One Time Password), to make the card more secure.
f) More than 43 lacs debit cards were issued during the year taking the ATM/debitcard base to 250 lacs.
g) Banks ATM Network during the year went up to 6940 as on 31st March 2014.All the newly added ATMs have feature of biometric functionality in addition to existing680 ATMs.
h) The Bank has a tie-up arrangement for providing payment services such asTech-Process Payment Services Citrus Payment Solution, Times of Money, Pay TM and Pay U.The basis of revenue Sharing is 60 (Bank): 40 (Aggregators) basis.
7. Management Information System
To achieve the objective with which Management Information System Division (MISD) wasset up, Enterprise-wide Data Warehouse (EDW) had been implemented with technical supportfrom TCS. EDW set up has facilitated ready access to data required forRegulatory/Statutory reporting and additionally for analytical purposes. Overall businessprocess related functions, generation of various MIS reports, including adhocrequirements are being looked after by MISD. This has reduced workload of fieldfunctionaries to a considerable extent and is assisting Top Management in taking timelydecisions. EDW has also come up with some dashboard reports with business parameters anddelinquency identifiers.
Standardized approach for credit risk has been implemented through BASEL IImodule of LADDER (Loans and Advances Data Desk for Evaluation & Reports) System thusenabling calculation of Risk Weighted Assets (RWAs) in respect of Loans & Advances asper guidelines of RBI.
The Bank has also embarked upon a project of Centralised Ladder, where all the data ofCBS will flow to LADDER system automatically at HO level only. With this, all theprocessing of Ladder data will be done at central level only (against the present processof processing the Ladder data at decentralized locations and then aggregating it). Thiswill be one step further ahead in automation.
Data of all loan accounts is being transmitted to four Credit Information Companies(CICs) i.e. CIBIL, EQUIFAX, EXPERIAN & HIGH MARK on monthly basis through CIBILModule, an extension of Ladder System ,thus enabling the branches to draw CreditInformation Reports (CIRs) for taking credit related decisions. 8,14,816 CIRs ofprospective borrowers under Consumer category and 21,819 CIRs under Commercial categorywere drawn from CIBIL, Experian, High Mark & Equifax databases during FY14.
MISD is handling the issue of registering the particulars of equitable mortgages withCentral Registry. The Bank has registered about 3.90 lac Immovable Properties (IP), withCERSAI, till 31st March 2014. The object is to avoid multiple financing fromsame IP, thereby preventing perpetrators of frauds by mortgaging the same property to morethan one financial institution.
8. Human Resources Management
The Total Number of Banks employees including those in the subsidiaries were65,541 at the end of March 2014.
| ||Cadre-wise Staff Strength || || |
|Cadre ||March 2013 ||March 2014 |
| ||Number ||% ||Number ||% |
|Officer ||23610 ||37.30 ||23811 ||36.33 |
|Clerks ||25449 ||40.21 ||26864 ||40.98 |
|Sub Staff (incl. PTS) ||14233 ||22.49 ||14866 ||22.69 |
|Total ||63292 || ||65541 || |
The Bank has taken several initiatives during the year in the areas of ManpowerPlanning, Recruitment, Succession Planning, Leadership Development and Staff Welfare.
For FY14, Manpower Plan was finalised well in time in a scientific manner, takinginto account impending retirements, future branch/activity, business expansions &other requirements.
Based on the Manpower Plan approved by the Board, an extensive recruitment plan isprepared with blue print of the whole project from the date of advertisement till the dateof joining of the new recruits.
In order to address the Human Resource gaps arising in critical positions due toretirements in the coming years, the Bank has created Leadership Development Forums (LDF)which facilitates identification of potential successors for various critical positions inthe Bank considering their skills and aptitude.
Age Profile of the Employee
Due to intensive manpower planning and judicious recruitment, there has been a declinein average age of the employees in each cadre. This change has been reflected in tablegiven below:
|Average Age as on ||Officer ||Clerical ||Sub-staff ||All |
|31st March 2010 ||50.18 ||49.82 ||46.89 ||49.29 |
|31st March 2011 ||50.37 ||49.62 ||45.91 ||49.02 |
|31st March 2012 ||50.14 ||44.93 ||44.48 ||46.75 |
|31st March 2013 ||49.49 ||44.70 ||42.41 ||45.96 |
|31st March 2014 ||49.12 ||43.00 ||40.54 ||44.66 |
PNB University Initiative
The two batches of Management Trainees consisting of 192 officers joined the Bankduring FY14, through Manipal Global Education Services (MaGE), Bangalore as part ofthe PNB University Initiative.
Welfare Schemes for Staff
The Bank continued its employees welfare schemes. The Bank also added one Holiday Homeat Shimla taking the tally of Holiday Homes to 19.
The Bank follows the reservation policy for SCs, STs and OBCs as prescribed byGovernment of India from time to time.
| ||Strength of SC/ST/OBC Employee || || |
|CADRE ||MARCH 2013 ||MARCH 2014 |
| ||SC ||ST ||OBC ||SC ||ST ||OBC |
|Officer ||4227 ||1416 ||1410 ||4400 ||1496 ||1710 |
|Clerks ||4700 ||1114 ||2774 ||5153 ||1243 ||3714 |
|Sub Staff (incl. PTS) ||6032 ||774 ||2333 ||6338 ||828 ||2675 |
|Total ||14959 ||3304 ||6517 ||15891 ||3567 ||8099 |
During FY14, all promotion processes were completed in the first quarter of theyear i.e. upto June 2013. Number of Officers promoted in different cadres is as under:
|1. Scale II to III ||: ||959 |
|2. Scale I to II ||: ||1166 |
During FY14, following number of employees in workmen cadres were promoted:
|1. Clerks to Officers ||: ||723 (Seniority Channel) |
|in JMG Scale-I ||: ||380 (Selectivity Channel) |
|2. Sub staff to Clerks ||: ||782 |
Industrial relations in the Bank continued to be cordial with issues raised by WorkmenUnion/Officers Association being attended to immediately. Various meetings were heldwith the representatives of the majority Officers Association/ Workmen Union duringthe year to discuss various issues and resolve problems.
The training system of the Bank is functioning effectively for enrichment of Knowledge,Skills and Attitude of staff at all levels in line with the organisational objective totransform the Bank to a customer centric and technology driven leading pan-India Bank withglobal footprints. The Bank has a State of Art infrastructure to cater to the trainingneeds of the employees in different cadres.
In view of large scale recruitments in 2013-14 also, Induction TrainingProgrammes of 2 - 24 weeks were conducted for all newly recruited officers andworkmen to make them branch ready before joining their duties in the field. In addition,for the existing employees trainings in key subject areas like Credit, Agriculture,SME, Foreign Exchange, Information Technology, NPA Management, Risk Management, etc. wereconducted. All SC/ST employees aspiring for promotion to higher grade/scale were providedpre-promotion trainings. Similarly newly promoted officials in different grades/ scaleswere covered under post-promotion trainings both in functional and management skill areasso as to equip them to take up higher responsibilities. Besides, Faculty DevelopmentProgrammes (FDP) was also organized for enhancing the training skills of in-house faculty.
Further, as a part of succession planning in the Bank and to enhance Leadershipqualities amongst Senior/Top Management Grade Officers, the bank has constituted aLeadership Development Forum (LDF), under which immediate/near future training needs ofthe executives are identified and specific/specialized trainings imparted in-house and atoutside Institutes. During the year, the Bank has imparted trainings to 513 identifiedexecutives under LDF.
During FY14, the Bank imparted 1,77,423 man days training to 45,041 employeesthrough in-house training. In addition, 7323 man days training was imparted to 1913officers at reputed outside institutes in India and abroad.
The Bank has an exclusive Knowledge Centre website, comprising of e-circulars of all HODivisions and a knowledge repository with the latest banking and economic updates. Thisweb-site is available to the staff both through CBS network as well as via internet.
The Banks e-learning platform "PNB Gyanuday" is accessible to allemployees across the country and abroad. This is an interactive mode of learning thatcovers Banking topics on various focus areas viz. Credit, Foreign Exchange, RetailBanking, CBS/IT, KYC (Know Your Customers)/ AML (Anti Money Laundering), Marketing, RiskManagement and Resolution of NPAs, etc.
9. Branch and Office Network Domestic Presence
The Branch Network of the Bank as on 31.03.2014 is 6201. These include 5636 GeneralBanking Branches, 241 Specialized Branches, 1 Extension Counter and 323 Service BackOffices. But for the 1 Extension Counter mentioned, all others have been upgraded tofull-fledged branches.
Bank is constructing a state of the art building at Dwarka with the objective ofhousing all Head Office Divisions except Information Technology & Treasury Divisions.Apart from this, the Bank will be constructing another state of the art building for theIT Division and Central Staff Training College at Gurgaon.
An MIS portal has been developed for capturing all kinds of information from the field,about the premises owned/ leased by the Bank. It will reduce correspondence, time andmanpower and allow better control on lease related issues such as expired / expiringlease, disputed/suit filed cases, etc. The MIS portal for Bank owned properties has beenmade live
The Bank has its overseas presence in 10 countries by way of 5 branches (Hong Kong (2),Dubai, Kabul & OBU-Mumbai), 3 Subsidiaries (London, Bhutan & Kazakhstan) 1 JointVenture (at Nepal) and 5 Representative Offices (Sydney, Shanghai, Oslo, Dubai &Almaty) as on 31st March'14.
10. International Banking
The Bank has 189 branches to handle forex business and a Centralised Back Office atDelhi for all the back-end functions relating to forex trade transactions. There are nineInternational Banking Branches at major cities for servicing importer/exporter customers.The Bank has also set up 22 Exchange Bureaus at important tourist centres. As a result,the Bank registered a forex turnover of Rs. 131,191 crore for FY 14 showing annualgrowth of 6.56%.
To handle inward remittances, the Bank has an International Service Branch at Delhi.During FY14, the remittance business handled by the Bank was Rs. 54303 crore,showing a YoY growth of 28.54%. Further the Bank has Rupee Drawing Arrangements (RDA) with32 exchange houses (28 in the Gulf, 2 in Singapore. 1 in Australia and 1 in the USA) tofacilitate remittances from NRIs. The Bank also has web based remittance arrangements with6 Money Transfer Organisations under Money Transfer Service Scheme (MTSS). To facilitatereal time credit into the accounts, the Bank has an arrangement with UAE Exchange CentreLLC, Abu Dhabi under FLASH Remit for real time account credit.
11. Operations Division
Operations Division at Head Office was formed w.e.f. 01.04.2013 to pursue theinitiatives under "Operating Model Optimization" pillar of "OrganisationalTransformation and Business Excellence Program 2011" named PNB PRAGATI.
Under PNB Pragati initiative, efforts are being made to organize model branches withstate- of-the-art infrastructure and manpower support to provide unique banking experienceto the customers. This model ensures a customer centric system of delivery of products andservices through the main Pragati modules of Self Service Area, Queue Management System,Receptionist, Customer Service Executive and Business Development Executive. As at31.03.2014, 388 branches of the Bank were designated as Pragati branches.
One of the key objectives of PNB Pragati Branches is to decongest the branches and toenable the customers to do routine transactions, like small value cash transactions,updation of their passbooks and cheque deposit, on their own and at their convenience. Toachieve this objective, Bank has put in place 1411 Cash Deposit Machines, 1409 Passbookupdation machines, 685 Cheque Deposit machines and 6940 ATMs in its branches across thecountry.
In order to monitor the implementation of Pragati initiatives in branches, a Starcertification system has been put in place under which branches can strive to obtain aStar 1 - Star 5 status, depending on their progress in implementing Pragati. As at the endof 31st March14, more than 75 % of the Pragati branches migrated to Star3.
Pragati Productivity Points (PPP) system has been introduced to measure productivityand efficiency in all domestic general banking branches of the bank. This is a uniqueinitiative of its kind by any bank, which provides a comprehensive metric for measuringbranch performance and productivity across branches with diverse transaction profiles.
12. New Initiative Division
As part of the new initiative, the Bank has started state of art contact centrewith the new feature of out bound calls.
Soft calls for recovery: The irregular accounts under Retail, MSME, Agriculture,etc. are being followed up with borrowers by making soft calls through Contact centre. Thecalls are being made for reminding the borrowers to pay the installments in arrears.
Customer Feedback on Pragati branches: A mechanism has been developed to assesscustomer satisfaction on the services at Pragati branches and to improve products &services by utilizing the suggestions. A poster has been displayed at the Pragati branchesinviting the customers to send SMS "Happy" or "Unhappy" to number5607040 after getting service at the branch. The "Unhappy" customers are sent aresponse expressing concern. If required, the matter is escalated to the Circle Headsthrough the Centralised Customer Grievance Redressal Mechanism. The majority of suchcomplaints are resolved within 24 hours.
13. Business Diversification
Mutual Fund: During FY14, the Bank mobilized a total of Rs. 2463 croreregistering a YoY growth of 10.65%. The Banks earning from this business stood atRs. 2.05 crore during FY14 as against Rs. 1.97 crore during FY13.
Insurance Business: As a corporate agent of PNB MetLife India Insurance Co. Ltd.,the Bank mobilized premium of Rs. 487 crore (Fresh Business- Rs. 273 crore & Renewalbusiness- Rs. 214 crore) during FY14, from 92,986 policies, as against premium ofRs. 451 crore mobilized during FY13. The Banks earnings from Life-Insurancebusiness during FY14 amounted to Rs. 46.29 crore as against Rs. 37.75 crore duringFY13, showing YoY growth of 22.62 %.
Similarly, under Insurance tie-up with Oriental Insurance Co. Ltd. for Non-LifeInsurance business, the premium collection in FY14 amounted to Rs. 181 crore from4.11 lac policies earning revenue of Rs. 20.30 crore as against Rs. 15.89 crore duringFY13, showing a growth of 27.75 %. Bank sold 98,596 PNB-Oriental RoyalMediclaim policies, during FY14 as against 84,152 policies sold duringFY13, thus registering a YoY growth of 17.16%.
Depository Services: Depository Services as Depository Participants of NSDL arebeing provided through 661 authorised branches covering 259 centres across India. The Bankhas earned an income of Rs. 88 lacs during FY14 for providing Depository Services.
On line trading facility: Referral income of Rs. 25 lacs has been received fromonline trading activities during FY14.
Merchant Banking: As Category-I Merchant Banker, the Bank has handled 6 assignmentsas "Banker to the Issue" and 75 assignments of Dividend Payment/InterestPayments during FY14. The float income increased from Rs. 5.79 crore in FY13to Rs. 17.62 crore in FY14.
Door Step Banking: Under the facility of Door Step Banking, cash is picked up fromthe premises of customers. Door step banking is currently being provided to about 786customers and has helped in garnering Current Account business.
Credit Card: The Bank has entered the premium card market with the launch ofPlatinum Credit Cards carrying host of offers viz. welcome gift, concierge services,discount offers, etc. To enhance the security level of credit cards, the Bank is nowissuing only EMV Chip cards with PIN.
Merchant Acquiring Business: Under this, the Bank has installed 10970 POS terminalsand integrated 106 Internet Payment Gateways.
14. Government Business
Govt. Business Income for FY14 stood at Rs. 91.66 crore as against Rs. 74.14crore during FY13. The Bank has completed scanning of all PPOs and images of samehave been uploaded on Central Data Server, which can be retrieved whenever necessary. Itwill bring efficiency and enable prompt resolution of pensioners grievances, if any.
A month long PPF campaign was launched for the first time on 1st January 2014 toaugment and create vibrancy for PPF business. E-freight and E-stamping products wereinitiated during the year.
The Bank has extended an exclusive facility to Indian Naval pensioners to open pensionaccounts at their convenient location from branch located in Mumbai at Indian NavyCentralised Pension Office. All initial formalities are completed there, includingscanning of PPO and uploading the same along with data into system. The pensioner is savedfrom hassle of visiting home branch for pension. Pensioners can submit their lifecertificates at any branch of the Bank without visiting home branch.
The Bank has introduced certain new products during the year in different States likee-SBTR in Maharashtra, collection of VAT in Andhra Pradesh through e-mode and physicalcollection of VAT in all the branches of our Bank in the States of Delhi, Orissa and WestBengal and collection of sale proceeds of Indian Made Foreign Liquor (IMFL) at AndhraPradesh.
15. Treasury Operations
Gross Investment as on 31st March 2014 stood at Rs. 1,40,466 crore andregistered a YoY growth of 7.79%. The average investments upto 31st March 2014was Rs. 1,37,382 crore as against Rs. 1,27,249 crore in corresponding period last year.The Interest Income from investment portfolio as on 31st March 2014 increasedto Rs. 10,231 crore as against Rs. 9,530 crore for the FY13. The Bank activelytraded in sovereign bonds, Non-SLR bonds and equity throughout the financial year. Theliquidity position of the Bank was generally comfortable throughout FY'14 and our fundswere managed through CBLO, Repo and Forex market swaps. The Bank complied with all therequirements of CRR/SLR stipulated by regulator.
16. Internal Control System
a. Credit Audit and Review
Credit Audit & Review Division (CARD) was formed in January 2002 as a part of LoanReview Mechanism (LRM) to examine compliance with extant sanction and post-sanctionprocesses/procedures laid down by the Bank from time to time in high value borrowalaccounts. In terms of the said policy, credit audit for FY'14 has been undertaken for loanaccounts (risk rated standard assets) with exposure of Rs. 10 crore and above, Weak(C & D risk rated) accounts with exposure of Rs. 3 crore andabove and an additional 5% of the accounts selected at random with exposure between Rs. 5crore to Rs. 10 crore and outstanding balance of Rs. 3 crore and above (in circles whereeither nil or a few loan accounts fall under purview of credit audit). Also credit auditwas done of borrowal accounts taken-over from other banks, with exposure of Rs. 1 croreand above, with the first audit being conducted within three months of take-over.
During FY14, credit audit of overseas loan accounts in PNB Hong Kong, PNB, DIFC,Dubai and Overseas Banking Unit, SEEPZ, Mumbai was also undertaken.
As against RBI requirement of at least 30% to 40% of credit portfolio being reviewedevery year, during FY14, credit audit of above accounts covered 61.19% ofBanks domestic and overseas credit portfolio (Fund based and Non Fund based).
b. Internal Audit
The main objective of Internal Audit System is to bring accuracy and effectiveness inthe internal control. To achieve this objective, various types of Audits are conductedviz. Risk Based Internal Audit (Onsite and Offsite), Revenue Audit, Information System(IS), Credit Audit, Snap Audit, Segment Audit, Compliance Audit and FEMA audit. Inspection&
Audit Division (IAD) at the apex level, with its 13 Zonal Audit Offices (ZAOs) ensures"Quality Growth" by identifying potential risks and measurement and mitigationof risks in the branches.
Recently, the Bank started regular audit of non concurrent specialized offices vizRetail Asset Branches (RAB), Asset Recovery Management Branches (ARMB), MICR Centres andBack Offices (RCC & CDPC) through e-RBIA. A dedicated e- RBIA Central Help Desk isalso working to impart help to field functionaries. A dedicated cell for surveillance hasbeen set up at IAD and at each ZAO to bring more effectiveness in control aspect through"Remote Audit".
Under Risk Based Internal Audit (RBIA), branches are categorized as Low Risk (4618),Medium Risk (898) and High Risk (5) as on 31.03.2014. For the calendar year ended31.12.2013, Revenue Audit in all the Branches has been completed.
As on 31st Dec13, concurrent audit in the 940 Branches (including 8 HODivisions) covers 73.57% of advances, 57.69% of deposits and 64.64 % of banks totalbusiness, which is in line with RBI guidelines. Cyber Crime Reporting Cell established atIAD takes care of cyber crime related complaints pertaining to disputed transactions inthe customers accounts and hoax calls through use of alternate delivery channelsviz. ATM Debit Cards / Credit Cards / Internet banking /POS, etc.
c. Know Your Customer(KYC)/Anti Money Laundering(AML)
The procedure for opening new accounts has since been modified in the system and nownew customers are being accepted only after complying with the KYC guidelines. The debitoperations in non compliant customers account have been ring fenced.
The Bank has developed a clear Customer Acceptance Policy laying down explicit criteriafor acceptance of customers. Now in order to assist the branches, the facility of"Online Scanning of Prospective Customers" at the time of opening the accountitself, has been introduced in all the branches of the Bank.
For the purpose of risk categorization, individuals (other than High Net Worth) andentities whose identities and sources of wealth can be easily identified and transactionsin whose accounts by and large confirm to the known profile, may be categorized as lowrisk.
Anti-Money Laundering Standards
As an Anti-Money Laundering (AML) measure and in order to monitor transactions in theaccounts of the customers, Bank had installed software finDNA- customized by M/sTCS Ltd. The software (finDNA) enables watch list scanning; verifies customer identity,facilitates generation of automated alerts for scrutiny. The system generated alerts arebeing monitored on daily basis and in case of suspicion, Suspicious Transaction Report(STR) is being submitted to Financial Intelligence Unit-India [FIU-IND]. The alerts arebeing generated on the basis of pre-determined scenarios customized in the finDNA.
Through the Cash Transaction Report, the Bank reports Cash Transaction Report, reportof all transactions involving receipt by non-profit organizations of value more than Rs.10 lac or its equivalent in foreign currency and report of Foreign Wire Transfer of morethan Rs. 5 lac or its equivalent in foreign currency to FIU-India. Financial IntelligenceUnit-India has developed a utility i.e. fin-NET Project and now Suspicious TransactionReports, Counterfeit Currency Reports and Cash Transaction Reports are being submitted tothem on-line.
d. Management Audit
Rs.The Bank has in place a Risk Based Management Audit (RBMA) system for conductingaudit of its administrative offices. During FY14, based on approved Annual AuditPlan, MARD conducted management audit of 37 HO Divisions,
69 Circle Offices (COs), 13 Field General Managers Offices (FGMOs), 7 Zonal AuditOffices (ZAOs), 3 Training Establishments, 3 Regional Rural Banks (RRBs), 3 DomesticSubsidiaries and 3 Overseas Subsidiaries besides audit of other activities listed above.
Bank has appointed a Chief Compliance Officer in the rank of a General Manager. Inorder to have better control on compliance risk and plugging off leakages in thecompliance, review of each Circle and sensitisation of compliance officers at variouslevels has also been undertaken.
Bank has taken an initiative and developed an in-house web based portal for onlinesubmission of breaches of compliance directives/instructions by branches /Circleoffices/FGMOs and HO Divisions for any non compliance and penalty (ies) imposed byregulators.
In compliance with the directives of the DFS, MoF, the Green Vigilance Software(Vigilance Management Information System), introduced in the last FY has been made fullyoperational in FY'14, enabling navigation of vigilance related cases by DisciplinaryAuthorities(DAs) & CVO till finalization of the cases, thereby enhancing speedydisposal, greater transparency, reduced paperwork & promoting e-governance.
Due to effective follow up with the disciplinary authorities, number of cases more thanone year old has been brought down to 4 as on 31.03.2014. Total number of vigilance cases,including new additions has come down from 777 as on 31.03.2013 to 573 as on 31.03.2014.
During FY14, the officials from Vigilance Department and Vigilance Officersposted at ZAOs visited 1089 branches and explained the importance of preventive/proactivemeasures. The Chief Vigilance Officer also visited 12 Circles during FY'14 and Preventive/Proactive Vigilance seminars were organised in the Circle Offices. All officials acting asDisciplinary Authorities at different levels have been trained.
As a preventive measure, the department is reiterating the guidelines from time to timeto the field whenever gross negligence/frauds are observed to preclude the recurrence ofsuch events.
Vigilance Awareness Week (VAW) was observed from 28.10.2013 to 02.11.2013. The theme ofthe year was "Promoting Good Governance - Positive Contribution of Vigilance."During the VAW, Shri J. M. Garg, Vigilance Commissioner, CVC, addressed the seniorofficials of the Bank about measures to be adopted for promoting good governance.
The Institute of Public Enterprises (IPE) conferred Vigilance Excellence Award 2013-14upon PNB at the Golden Jubilee Celebration Function of IPE at Hyderabad on 06.03.2014 forspearheading a robust vigilance set up, implementing Green Vigilance Software and reducingthe number of vigilance cases.
17. Right To Information Act
During FY14, the Bank received 8066 applications, of which 6160 applications wereprovided information and 1887 applications were found exempted under the provisions of theAct.
18. Implementation of Official Language Policy
The Bank has achieved almost all the targets in all parameters fixed by the Govt. ofIndia, Ministry of Home Affairs Department of Official Language for the year 2013-14.During the year, the Bank has been awarded with several prizes for its excellentperformance in the use of Hindi, which includes the prestigious Indira Gandhi RajbhashaShield a top most prize scheme of Govt. of India, RBI Rajbhasha Shield and otherregional level prizes of Ministry of Home Affairs. In addition, Town Official LanguageImplementation Committees and other Non-Govt. Organisations have also conferred awardsupon the Bank.
The third sub-committee of the Committee of Parliament on Official Language visitedBranch Office-Piparia on 13th April, 2013, Branch Office-Champawat on 19thJune, 2013 & Head Office on 1st July, 2013. The Committee not onlyexpressed satisfaction but also appreciated the efforts made by the Bank for progressiveuse of Hindi.
This year also, the Bank organised Hindi Maah. Programmes/ competitions were held andawards were given. Four collections of articles received in the competition on creativewriting, have been published in the year 2013-14. Under Moulik Hindi Pustak Lekhan Yojanaof the Bank, cash incentives were awarded to staff members for writing original books inHindi on banking and non-banking subjects.
19. Customer Care
The Bank has adopted Code of Commitment to Customers 2014 formulated by Banking Codesand Standards Board of India (BCSBI). The details of the Code are available on theBanks website www.pnbindia.in.
The Bank has defined four polices for promoting good customer service. They are 1)Customer Compensation Policy; 2) Grievance Redressal Policy; 3) Cheque Collection Policy;and 4) General Management of Branches. These policies are available on bankscorporate website www.pnbindia.in. Efforts are made to ensure that maximum number ofcomplaints is redressed within shortest possible time.
The Bank has a Citizens Charter for its customers, which is available on theBanks website and sets benchmarks for prompt delivery of banking services.
The number of complaints received during FY'14 was 38,869 in addition to complaintsalready pending i.e. 236, at the beginning of FY14. The number of complaintsredressed was 38,913 and at end of 31st March 2014. The number of complaints(which are pending as on 31.03.2014) is 192. However, these have since been resolved.
The number of unimplemented awards at the beginning of FY14 was zero; the awardspassed by Banking Ombudsman during FY'14 were 13 while the awards implemented duringFY14 were 9. The number of unimplemented awards, as at the end of 31st March 2014,was four.
Initiatives undertaken during the year
In line with the recommendations of Damodaran Committee on Customer Service,regarding setting up of an internal ombudsman in banks, Shri R.C. Khurana, Ex. GeneralManager, Bank of India was appointed as Chief Customer Service Officer (CCSO) as theInternal Ombudsman for ensuring that the minimum number of cases get escalated to theBanking Ombudsman. Unresolved complaints are automatically escalated to CCSOs officeafter 21 days to enable them to monitor such complaints. Prime objective of Chief CustomerService Officer (CCSO) scheme is to ensure that customers confidence in InternalGrievance Redressal Mechanism is strengthened.
Theme Based Meetings are conducted in all branches on a common date at monthlyintervals to bring about awareness of the Banks products and schemes and forimproving knowledge and skills of the staff.
All Circle offices & FGM offices have been provided a dedicated computersystem with internet connection at the reception counter exclusively for customers tofacilitate them to file on-line complaints by using the Banks portal. The indicatorboard "On Line Complaint cum Feedback Kiosk" is displayed at the counter.
The Centralised Grievance Redressal Management System (CGRMS) has been madelive. CGRMS has also been integrated with Alternate Delivery Channels viz. Bankswebsite, IBS, Mobile Banking & ATM for lodging complaints/ service requests bycustomers.
20. PNBs Subsidiaries and Regional Rural Banks
a. PNB Housing Finance Limited (PNBHFL)
The company has completed 25 years of its working in FY14. During the 25thyear, the Company reached many milestones. The loan book of the Company crossed Rs. 10,000crore to reach Rs. 10,591 crore, and registered a YoY growth of 60%. Deposits crossed Rs.1700 crore, to reach Rs. 1712 crore, and registered a YoY growth of 63%. Total incomecrossed Rs. 1000 crore to reach Rs. 1112 crore, and registered a YoY growth of 68% andProfit After Tax (PAT) crossed Rs. 125 crore to reach Rs. 127.44 crore, and registered aYoY growth of 39%. The Company had started its transformation journey in July 2010 with aBusiness Process Re-engineering Project (BPR). In less than 4 years, the Company hassuccessfully completed major portion of BPR, while the business has kept growing at aboveindustry average growth rate. In the last 4 years, yearly fresh sanctions have increasedmore than 6 times, loan book has grown 4 times and deposits have grown 5 times. TheCompany has successfully managed its loan portfolio and brought down both delinquenciesand NPAs over the years. As on 31st March '14, the Company has just 1.10% ofits portfolio which is delinquent with a Gross NPA ratio of 0.32% and a Net NPA ratio of0.16%.
The Company has a network of 32 branches which are linked to three zonal hubs throughhub and spoke model. During FY14, the Company introduced many new products such as 3years fixed interest rate, 5 years fixed interest rate and 10 years fixed interest rateproducts. Besides, the Company introduced many programmes for salaried and self employedborrowers. All new loan products and programmes have received a warm response from themarket.
During FY'14, the Company is ranked amongst the Top 5 housing finance companies inIndia. In order to meet growing business needs, the Board has approved infusion ofadditional equity capital of Rs. 1000 crore over the period of 2-3 years.
b. PNB Gilts Limited
Despite the market turbulence, PNB Gilts Ltd. continued to perform well. It fulfilledall its commitments as a Primary Dealer. The Total Profit Before Tax (PBT) amounted to Rs.90.70 crore in FY'14 as against Rs. 88.76 crore in FY'13. The increase in profit was dueto a judicious mix of nimble trading technique and astute prognosis of market conditions.The Company posted trading Income of Rs. 31.41 crore during FY14. Further, the totaloutright turnover increased to Rs. 3,08,978 crore as against Rs. 1,98,139 crore in thepreceding year. During FY'14, company made bonus issue of equity share in the ratio of 1:3thus increasing the paid-up capital to Rs. 180.01 crore. The total Net Worth of theCompany as on 31st March 2014 stands at Rs. 662.53 crore.
c. Punjab National Bank International Limited (PNBIL)
During FY14, total business of PNBIL increased to $2818 million as on 31st March2014, registering a YoY growth of 20.69%. Deposits increased to $1332 million (2013:$1199million), while Advances increased to $1486 million (2013: $1136 million). Reduction inwholesale deposits on account of availability of alternate source of funds at a cheaperrate was one of the main reasons for moderate growth under customer deposits. Operatingprofit of PNBIL rose to $ 27.91 million registering a YoY growth of 32% during FY14.
Offering basic banking products and relationship banking continues to be the strongselling point for the PNBIL. The Indian Rupee (INR) Remittance scheme of the Bank hasstabilized and gained popularity among the ethnic population. The Bank has built a brandimage in the UK market. PNBIL also established a dedicated in-house Help Line ServiceCentre with a view to improve its relationship banking and customer service. The Bank isin the process of switching over from Maestro Card to Master card, having contactlessdrawing facility and already started replacing the existing cards. More than 27,000 debitcard holders of PNBIL have the option to withdraw money from any ATM having Maestro/Master Card logo. Strategic integration, parental support, niche positioning andcompetitive advantage in its targeted customer base are the key advantages the Bank ishaving in UK. PNBIL migrated from Basel II framework to Basel III framework w.e.f. 1stJanuary 2014 in compliance with Capital Requirement Regulations and Directives of theEuropean Parliament and the national regulator - Prudential Regulation Authority of UK.
d. Punjab National Bank Investment Services Limited (PNBISL)
During FY14, PNBISL earned Total Income of Rs. 11.14 crore, including fee basedincome of Rs. 8.08 crore. In view of the current market scenario, the Company is mainlyfocusing on providing financial advisory services relating to preparation andimplementation of Corporate Debt Restructuring proposals and conducting Techno EconomicViability Study.
PNBISL has recently added a new business activity "Lenders EngineeringServices" in its kitty of services, to enlarge its customer base and increase itsvisibility. The Company has also empanelled itself with most of the major public sectorbanks and a few private sector banks, to provide professional services under its verticalsof Project Appraisal/Conducting of Techno Economic Viability Study and preparation ofFinancial Packages for Restructuring under Bilateral/CDR arrangement.
e. Regional Rural Banks
At present, there are five PNB sponsored RRBs, which are operating in five States,namely, Bihar, Haryana, Himachal Pradesh, Punjab and Uttar Pradesh, together covering 74districts with a network of 1927 branches. During FY'14, 187 new branches have been openedby RRBs.
In terms of Gazette Notification dated 29th Nov 2013 from Ministry ofFinance, Department of Financial Services, Govt. of India, Gurgaon Gramin Bank, Gurgaon(sponsored by Syndicate Bank) and Haryana Gramin Bank, Rohtak, (sponsored by PunjabNational Bank) have been amalgamated into a single Regional Rural Bank called "SarvaHaryana Gramin Bank" covering all the 21 districts of Haryana State.
The aggregate paid-up capital of these Regional Rural Banks stood at Rs. 199.31 crore.Central Government, State Governments and PNB contributed towards paid-up capital of theseRRBs in the ratio of 50: 15: 35 respectively. The Banks contribution towards capitalof these RRBs stood at Rs. 69.76 crore. The combined net worth of PNB sponsored RRBs as on31st March 2014 stood at Rs. 2497 crore.
During FY14, the aggregate business of all RRBs increased to Rs. 40561 croreshowing a YoY growth 14.13%. The aggregate deposits and aggregate advances as on31.03.2014 increased to Rs. 25607 crore (YoY 11.43 %) and Rs. 14954 crore (YoY 19.06%).The Net profit of all sponsored RRBs as on 31.03.2014 increased to Rs. 258 crore (YoY10.53%). However, the Net Profit of Rs. 258 crore excludes Rs. 59.19 crore of erstwhileGurgaon Gramin Bank (from 01.04.13 to 28.11.13). The gross NPA of the RRBs has increasedto Rs. 452 crore during FY14.
Now RRBs are opening NRE/NRO accounts. The facilities of NEFT, RuPay Debit & KCCcards, KIOSK Banking Solution (KBS) under FIP, Aadhar Payment Bridge System (ABPS) underDBT etc. are also being provided to customers in all the RRBs.
21. Awards and Accolades
During the year, in recognition of its performance and initiatives, PNB receivedvarious awards, some of which are:
Appreciation Certificate for CSR Activities by ASSOCHAM.
Global CSR Excellence and Leadership Awards for "Organisations with BestCSR Practices" by ABP News.
Banking, Financial Services & Insurance Award under "Bank with LeadingFinancial Inclusion Initiatives" category by ABP News.
IBA Banking Technology Awards-Best Risk Management and Security Initiatives byIndian Banks' Association.
IBA Banking Technology Awards-Best Customer Management Initiatives PSU (1stRunner Up) by Indian Banks' Association.
IBA Banking Technology Awards-Best Use of Technology in Training and E-Learning(2nd Runner Up) by Indian Banks' Association.
Best Public Sector Bank Branch: BO - Kulapully, Kozikhode by State Forum ofBankers' Club, Kerela.
Life Time Achievement Award 2013 to Shri K. R. Kamath by Dainik Bhaskar Group.
Most Innovative Mass Retail Lender for Under-served segments (Special Mention)in BANCON 2013.
Skoch Digital Inclusion Award - Financial Inclusion Project by Skoch.
Best Bankers' Award under the Category Agriculture Credit and Inclusion by TheSunday Standard.
3rd Asias Best CSR Practices Awards- Best CSR Practices Overall by WorldCSR Day.
4th Asia's Best Employer Brand Awards 2013- Excellence in Training by EmployerBranding Awards.
Banking Technology Excellence Awards - Customer Management and BusinessExcellence Initiatives by IDBRT, Hyderabad.
The Ministry of Consumer Affairs, Govt. of India has awarded the Bank with firstposition among Public Sector Banks for financing against Negotiable Warehouse receipts.
22. BOARD OF DIRECTORS
As on 31.03.2014, there are 15 Directors on the Board of the Bank including 4 WholeTime Directors i.e. Chairman and Managing Director and three Executive Directors.
During the Year 2013-14, the following changes took place in the composition of Boardof Directors:
Shri Gauri Shankar was appointed as Executive Director of the Bank on07.10.2013.
Shri K.V. Brahmaji Rao was appointed as Executive Director of the Bank on22.01.2014.
Dr. R. S. Sangapure was appointed as Executive Director of the Bank on13.03.2014.
Shri B.P. Kanungo was appointed in place of Shri N.S. Vishwanathan as RBINominee Director on the Board of the Bank on 31.05.2013.
Shri D.K. Saha, was appointed in place of Shri Pradeep Kumar as Officer EmployeeDirector on the Board of the Bank vide notification dated 26.06.2013.
Smt. Aradhana Misra, was appointed as Part- time Non-official Director of theBank vide notification dated 21.11.2013.
Shri Gautam Premnath Khandelwal was appointed as Part-time Non-official Directorof the Bank vide notification dated 24.01.2014.
The Board welcomes Shri Gauri Shankar, Shri K.V. Brahmaji Rao, Dr. R.S. Sangapure,Executive Directors, Shri B.P. Kanungo, RBI Nominee Director, Shri D.K. Saha, OfficerEmployee Director, Smt. Aradhana Misra and Shri Gautam Premnath Khandelwal as Part-timeNon-official Directors on the Board of the Bank.
The Board also wishes to place on record its appreciation for the valuable contributionmade by Shri Rakesh Sethi, Smt. Usha Ananthasubramanian, Shri S.R. Bansal, ExecutiveDirectors and Sh. N.S. Vishwanathan, RBI Nominee Director.
23. Directors Responsibility Statement:
The Directors confirm that in the preparation of the annual accounts for the year endedMarch 31, 2014:
The applicable accounting standards have been followed along with properexplanation relating to material departures, if any;
The accounting policies, framed in accordance with the guidelines of the ReserveBank of India, were consistently applied;
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 of theprofit of the Bank for the year ended March 31, 2014;
Proper and sufficient care was taken for the maintenance of adequate accountingrecords in accordance with the provisions of applicable laws governing banks in India, and
The accounts have been prepared on the principle of "going concern"basis.
The Board expressed thanks to the Government of India, Reserve Bank of India,Securities and Exchange Board of India, Stock Exchanges, Banks customers, public andthe shareholders for valuable support, continued patronage and confidence reposed in theBank.
The Board wishes to place on record its appreciation for the valuable contribution madeby the members of the Banks staff at all levels and look forward to their continuedinvolvement in achieving the future goals.
For and on behalf of Board of Directors
(K R Kamath )
Chairman & Managing Director