State Bank of Travancore


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Director's Report

Report of the Board of Directors

To the State Bank of India, the Reserve Bank of India and the Central Government interms of Section 43(I) of State Bank of India (Subsidiary Banks) Act, 1959

Period covered by the Report: 1st April 2012 to 31st March 2013

1. MANAGEMENT DISCUSSIONS AND ANALYSIS

1.1 Global Economy

Global economy, which turned weak in 2012, is expected to remain sluggish in 2013. Thefiscal adjustments undertaken by the advanced economies (AE) have resulted in adeceleration of growth and, in turn, delayed the recovery process in Emerging Markets andDeveloping Economies (EMDEs). The International Monetary Fund, in its World EconomicOutlook, has forecast that global growth will remain sluggish at 3.3% in 2013. Thedownside risks have abated in early 2013. Signs of stabilization in global economy havebeen in evidence in the recent past, with stronger than expected growth in the US, themeasures taken by the US to tackle the "Fiscal Cliff", supportive policy actiontaken by the Euro Zone and pick-up in industrial production in EDEs. Among the BRJCS(Brazil, Russia, India, China and South Africa) countries, growth accelerated in Braziland South Africa. However, the slowing down of the Chinese economy has increased theprospects of delay in global recovery.

1.2 National Economy

GDP growth slowed down from 6.6 per cent in 2011-12 to 5.0 per cent in 2012-13. Thiswas attributable to the continued weakness in industrial activity accompanied bybottlenecks on the supply side and slowdown in the services sector resulting from weakexternal demand. With consumption demand slowing down and both investment and exportsdeclining, the decline in the GDP growth rate became broad-based. The moderation incorporate sales and weakening consumer confidence suggest that the slowdown could bespreading to consumption spending as well. Wholesale price index (WPI) declined to anaverage of 7.3 per cent last year from 8.9 per cent in the year before. The decline wasparticularly significant in the fourth quarter of last year with WPI inflation touching6.0 per cent in March 2013, the lowest in the last three years.

The unusual upsurge in vegetable prices, early in the year, coupled with a rise incereal prices contributed to an upward pressure on food inflation through the year.Similarly, the upward revisions in administered prices and the pass through of highinternational crude prices caused fuel inflation to average in double digits during2012-13. On the supply side, there are indications that the sluggish global growth isbeginning to affect the services sector also. According to the projections of the IMFIndia's economy is expected to grow at a faster pace (6.4%) in 2014 aided by the modeststrengthening of global economic outlook.

Money supply (M3) growth was around 14.3 per cent by end-March. The total flow ofresources to the financial sector to the commercial sector increased by more than 10% toRs. 12.8 trillion in 2012-13 from Rs. 11.6 trillion in the previous year. This increasewas accounted for, among other things, by higher non-SLR investment by scheduledcommercial banks (SCBs).

1.3 Kerala Economy

Kerala's economy has become one of the fastest growing state economies in the country,with the GSDP clocking growth of 9.5% in 201 1-12, highest among the all southern states.Kerala has won international recognition for its outstanding achievements in the healthsector and in education sector. Kerala is much ahead of most other states in India interms of Human Development Index and life standard of the people, and, on par with some ofthe developed countries in certain parameters. The prime driver of economy still is theremittances from abroad by lakhs of Non Resident Keralites. In Agriculture, food cropssuch as paddy and coconut have faced setbacks due to dwindling area of cultivation andhigh cost of inputs. Tourism continues to flourish and IT sector is on the growth path,with the flagship Techno Park at Thiruvananthapuram and Techno city at Ernakulam gainingfurther traction. The new initiatives and mega projects, like Vallarpadam InternationalContainer Transshipment Terminal will give a fillip to the economy. The proposed Info Parkand Smart City near Kochi, is expected to propel Kerala to become one of the leading ITdestinations in the country. The State's prestigious Greenfield airport project 'KannurInternational Airport' is expected to transform the North Malabar region into a highlydeveloped growth centre for travel, tourism and industries. These projects are expected togive furtherthrustto the growth of construction field, expansion of white goods market,further promotion of tourism and small and medium industries in the state.

1.4 Banking Environment

Indian banking sector demonstrated strong resilience during the global financial crisisand was able to maintain profitability, with asset quality remaining relativelyunaffected. In India, reforms have continued with a view to building a robust andresilient financial system. More stringent capital and liquidity measures for commercialbanks have been implemented and steps have been taken to build provision buffers. RBI hasinitiated preliminary steps for implementation of the Basel III norms embedded withprovisions and guidelines for higher capital adequacy norms for adoption andimplementation by Banks in India. RBI's decision to cut cash reserve ratio thrice in therecent past to ease tightness in liquidity demonstrates the timely surveillance exercisedby the Regulator in this regard. The key focus areas for Indian Banks include liquiditymanagement; gainful deployment of funds; availability of cheaper technology to servethinly populated unbanked areas; grooming suitable replacement for large number of theexperienced manpower bidding adieu to the banking industry; IT security; advanced Riskmanagement approaches; and introduction of innovative products. The Indian Banking sectoris continuing to grow with rapid transformation, with almost all the Banks having migratedto Centralised Core Banking Environment, supported by technology enabled products. Therevolution in information technology is forcing banks to redefine the existing businesspractices. The need of the hour is to think to develop technologies beyond core banking.

India has the highest growth in young population who want a great banking service,tailored to meet their needs and in a time frame that works. The next generation wants toget banking facility "here, now and at an arm's length" in a manner that issimpler, convenient and easy to access. The next generation banking has to providecustomer-centric features, giving users an extremely personalized experience while at thesame time providing increased intelligence and automation to help banks sell appropriateproducts and services to their customers. Banks are gradually moving towards a right mixof assisted and self-serviced channels to provide a rich unified and consistent bankingexperience. Bright and clean branches, customer friendly business hours and short queueshave become the key differentiators. Green Channel Counters' are the latest innovations inthe series for Banks to serve its customers in an eco friendly atmosphere. Regulatorychanges have opened up newer opportunities for Banks in areas such as financial inclusion,mobile banking and rural banking. The penetration of banks in rural areas has increasedmanifold due to the progress made under financial Inclusion Plans of banks.

1.5 ASCB Performance

All Scheduled Commercial Banks grew by Rs. 8,42,340 crore (14.30%) between 30th March2012 and 22nd March 2013 to reach Rs. 67,51,420 crore, as on 22nd March 2013. The GrossAdvances grew by Rs. 6,50,980 crore(14.10%) in the same period to touch Rs. 52,62,830crore. Food credit increased by 20.84% to Rs. 96,420 crore. Non-Food credit grew by 11.70% and reached the level of Rs. 51,66,410 crore.

1.6 Regulatory Measures and Monetary Policy

The year 2012-13 witnessed a series of monetary measures initiated by Reserve Bank ofIndia to contain rising inflation, more liberalization in the Branch Authorisation Policyand more security measures for electronic payment system in scheduled commercial banks.

RBI has announced further liberalization of the Branch Authorisation Policy. To provideenhanced banking services in Ter 2 centres, domestic scheduled commercial banks (otherthan RRBs) will be allowed to open branches in Ter 2 centres (with population 50,000 to99,999 as per Census 2001) without the need to take prior permission from the Reserve Bankin each case, subject to reporting.

The following are the other important regulatory initiatives and developments initiatedby Reserve Bankof India during the financial year.

• All banks providing cheque facility to their customers are to issue only'CTS-2010' standard cheques. These cheques would ensure uniformity in all cheque formsissued by banks in the country, expected to act as a deterrent against cheque frauds,while the standardisation of field placements on cheque forms would enable thestraight-through-processing both under CTS and MICR clearing

• RBI has reduced the Cash Reserve Ratio (CRR) of scheduled banks by 25 basispoints from 4.75 per cent to 4.5 per cent of their Net Demand and Tme Liabilities (NDTL)effective from September, 22, 2012. Further reduction of the CRR by 25 basis points from4.50 per cent to 4.25 per cent was effected from 3rd November 2012 and from 4.25 percentto 4.00 percent was effected from February 9,2013.

• Statutory Liquidity Ratio has also undergone a change.

• Bank Rate has been reduced by 50 bps from 9.50% to 9% w.e.f. 17/04/2012. It wasagain reduced twice by 25 bps each from 9.00 to 8.75% and from 8.75% to 8.50% w.e.f.29/01/2013 and 19/03/2013 respectively.

• The Reserve Bank of India had issued guidelines on implementation of Basel IIIcapital regulation in India on May 2, 2012.

• RBI has decided to permit resident individuals to include nonresident closerelative(s) (relatives as defined in Section 6 of the Companies Act, 1956) as a jointholders) in their resident bank accounts on former or survivor' basis. However, suchnonresident Indian close relatives shall not be eligible to operate the account during thelife time of the resident account holder.

• RBI, vide DBOD No. BPBC 21/21.04.048/2010-11 dated 1st July 2010, issuedinstructions on the enhanced provisioning requirements on certain categories ofnon-performing advances and restructured advances.

• The Reserve Bank of India has recently announced a new set of guidelines withregard to security and risk measures that banks need to take for electronic paymenttransactions.

• International use of debit and credit cards: A key change being made is that, bydefault, credit and debit cards should be issued only for domestic use. Debit cardsenabled for international transactions may be issued to customers only against theirspecific requisition.

The dead line for this was June 30th 2013.

• Second Factor Authentication for International transactions: Banks should movetowards a system that facilitates implementation of additional factor of authenticationfor cards issued in India and used internationally (transactions acquired by banks locatedabroad).

• - Enhanced Rates of Provisioning for Non-Performing Assets for 2012-13

(a) Sub-standard assets will attract a provision of 15 per cent as against the existing10 percent.

(b) Unsecured exposures in sub-standard assets will attract an additional provision of10 percent p.e. 25%].

(c) DAI, DA2, DA3 to have 5%/10% higher provision at 25% /40%/100% (Secured)

(d) DA(all categories) & LA(unsecured) provision 100%.

(e) Higher Standard Asset Provision for restructured accounts.

2. The Bank's Operations and Performance

2.1 Total Business

The Bank's gross business crossed the major milestone of Rupees One lakh fifty thousandcrore during the last quarter of this fiscal, The total business of the Bank reached thelevel of Rs. 152,108 crore as on 31st March, 2013, reflecting a growth of 19.94% from Rs.1,26,816 crore as on 31st March, 2012.

2.2 Working Results and Operating Profit

Operating profit (after Staff Provisions) for the year 2012-13 increased by 8.17% toRs. 1,351 crore from Rs. 1,248.80 crore registered a year ago. Net Profit for the yearstood at Rs. 615.04 crore as compared to Rs. 510.46 crore for the previous year 201 1-12,indicating a growth of Rs. 20.49% over last year.

The earnings per share (face value of Rs. 10) are at Rs. 123.01 as against Rs. 102.09as at the end of previous year.

The Net Interest Income increased by 12.12 % from Rs. 1,830.37 crore in FY 2011-12 toRs. 2,128.20 crore during this fiscal. Net interest Margin (NIM) stood at 2.56%.

2.3 Dividend

The Bank declared a dividend of Rs. 20 per share (200%) for the year to theshareholders, entailing atotal pay out of Rs. 100 crore. Of this, an interim dividend ofRs. 17 per share (170%) was paid out on 16th April, 2013. The dividend Pay-out Ratio worksout to 16.65% of the Net Profit.

2.4 Capital Adequacy

The Bank's capital funds improved from Rs. 5,867.09 crore as at the end of March 2012to Rs. 6,175.70 crore as at the end of

March 2013. The capital adequacy ratio under Basel 11st ood at 11.70% as on March 3 1,2013 as compared to 13.55% as on March 31, 2012 against a minimum of 9% stipulated by RBI.The Tier-I CRAR on this date is 8.46% as against 9.35% as at the end of the previous year.

2.5 Deposits

Bank's aggregate deposits showed a growth of 18.43% and stood at Rs. 84,047 crore as on31st March, 2013 compared to Rs. 70,965 crore in the previous year. Major contributioncame from Personal Segment Deposits, which grew by Rs. 7,213 crore to touch the level ofRs. 52,591 crore. NRI Deposits registered an impressive 26% growth amounting to Rs. 4,003crore and the level is at Rs. 19,312 crore. This represents 22.98 % of the AggregateDeposits of the Bank as on 31st March, 2013. Total Deposits of the Bank (including InterBank Deposits) went up to Rs. 84,624 crore as on 31st March, 2013 from the level of Rs.71,470 crore as on 31st March.

2.6 Advances

The total advances of the Bank reached Rs. 67,484 crore as at the end of 31st March2013 from the level of Rs. 55,346 crore ayear ago registering a growth of 21.93%. Personalsegment advance contributed a growth of Rs. 4,600 crore (34.53%), whereas the share ofC&l segment is to the tune of Rs. 5,530 crore. The Retail lending stood at Rs. 33,178crore and constituted 49.16% of the total advances as at the end of 31st March, 2013. TheCredit Deposit Ratio of the Bank is 79.75% as on 31st March, 2013 as against 77.44% as on31st March, 2012.

2.7 Market Share

The excellent performance of the Bank during the year has enabled the Bankto improveits All India market share. The Bank's market share in Deposits moved up to 1.22% as onMarch, 2013 from 1. 16% during March, 2012. The market share in Advances has improved from1.18% in March 2012 to 1.25% as on March, 2013. The Bank's All India Market share in totalbusiness as at the end of March 2013 is at 1.23%.

The Bank continues to maintain its position as Premier Bank in Kerala with a marketshare of 21.88% in business with 14.28% of the total branch network. In respect of NRIdeposits, our market share in the state is 27.52%.

2.8 Priority Sector Lending

The Bank continued to give special emphasis on lending to the priority sector inconformity with national policies, expectations and fulfillment of social objectives.Bank's gross Advances to the Priority sector increased from Rs. 20,287 crore as at the endof March 2012 to Rs. 24,378 crore as at the end of March 2013 and constituted 43.50% ofthe Adjusted Net Bank Credit against the benchmark of 40%.

2.9 Agricultural Finance

The Bank has achieved the business level of Rs. 10,329.57 crore as on 31st March, 2013,that is 18.43% of ANBC, against a bench mark of 18% stipulated by Government of India.

Bank has disbursed an amount of Rs. 9,436.18 crore under agriculture segment as at theend of March 2013 against the Special Agricultural Credit Plan target of Rs. 6,000 crore.The level of lending to agriculture sector stood at Rs. 10,329.57 crore as on 31st March2013. Agri segment showed a growth of Rs. 1,427.83 crore during the financial year 2012-13compared to a growth of Rs. 3,322 crore, during the same period last year.

During the current fiscal 13,949 Kisan Credit Cards (working capital facility tofarmers) for Rs. 160.58 crore and 2,453 Kisan Gold Cards (Investment credit to farmers)for Rs. 115.95 crore were issued. Revised scheme for Kisan Credit Card with a period of 5years was introduced. Bank is undertaking a special drive to cover all farmers havingKisan Credit Card with ATM-cum-Debit cards to make transactions in the account moreconvenient.

The Bank has conducted an intensive agriculture lending campaign called "SBT-Haritotsavam-2012" during the period 1s June, 2012 to 30th September 2012. As againsta lending target of Rs. 1,500 crore to 58,000 new accounts, an amount of Rs. 2,525 crorewas disbursed during the period . Advertisements were given in leading newspapers and farmmagazines highlighting our various Agricultural products/ schemes. A special brochure onagricultural schemes in local language was made available to the branches for the benefitof farmers.

Farmers Clubs

Farmer's club meetings were conducted at various centres to give wide publicity to theschemes available to farmers. Through these meetings, issues faced by farmers were broughtto the notice of the Bank and other Agencies working in the field and necessary solutionswere suggested. During the year one new Farmers Club was formed. There are 223 Farmersclubs sponsored by the Bank so far.

Farmers Meets and Celebration of 'Chingam I' (Farmer's day)

Many of our Branches have organized Farmers Meets at various centers, in which thepresence of farmers was excellent. The Bank representatives have explained various loanschemes and cleared the doubts raised by them.

Bank celebrated Farmer's Day on Chingam 1 (17.8.2012), associated with Krishi Bhavans,Animal Husbandry Dept etc. Best farmers were felicitated in the function. Loans forvarious agricultural activities were disbursed to farmers on the occasion.

Drought Relief

Govt, of Kerala and Govt, of Tamil Nadu declared the states as drought hit. Variousrelief measures like moratorium for loans, Conversion of crop loans to term loans,Rephasement of loans were implemented to assist farmers to tide over the difficultsituation

Hi-Tech Farming

Introduced the scheme for financing Hi-Tech Farming (Establishment of Polyhouse) withGovt, subsidy to support progressive farmers coming forward to implement modern technologyin agriculture.

Loans against Warehouse Receipts of NCMSL

Bank has launched a scheme for loans against security of Warehouse Receipts issued byNational Collateral Management Services Ltd., to help farmers avoid undertaking distresssale of their products.

2.10 Lending to Micro, Small and Medium Enterprises (MSMEs)

MSMEs play a major role in the country's economic development. The bank gives dueimportance for the growth of this vital segment of the economy. Total lending to MSMEsector as on March 2013 stood at Rs. 9,230.23 crore, registering a growth of Rs. 971.85crore over the previous year. The lending to Micro & Small Enterprises (MSEs) stood atRs. 5,658.88 crore which is 20.73% higher overthe previous year level.

The growth in this sector was fuelled by an intensive MSME lending campaign conductedfrom 1st October 2012 to 28th February 2013. The total loan disbursement during thecampaign period was Rs. 685 crore covering 5,249 accounts.

Road Transport Operators (RTO) is an important sub-segment under service enterprise.The relaxation in security norms and reduction in interest rate and entering into tie-upwith automobile companies have contributed to steady growth under this vital segment.Outstanding under RTO segment, as on March 2013, is Rs. 409.33 crore comprising 9,362accounts.

Prime Minister's Employment Generation Programme (PMEGP)

The Bank has been actively supporting the programme to generate employment for youthand has stood first in the state of Kerala having achieved 226% of the targets during theyear as against 154% and 162% during 2010-11 and 2011-12 respectively. The Bank hasfinanced 423 projects creating around 2,100 jobs as against the target of 187 projects.

Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)

The Bank is a Member Lending Institution of CGTMSE which provides guarantee cover tocollateral free loans. Awareness programmes/workshops /seminars were conducted in allRegional Offices of the Bank and other important centres for operating staff about thescheme. Meetings of entrepreneurs were also conducted to educate them about the scheme.16,697 loan accounts amounting to Rs. 601.73 crore have been extended under the scheme sofar. The Bank is at 17th place among 118 Member Lending Institutions of CGTMSE in terms ofnumber of accounts and also amount covered.

New Schemes introduced

During 2012- 13 the following new schemes were introduced

SBT Contractor plus

A scheme to provide financial assistance to contractors for working capital needs andlong term investment needs to purchase construction equipments like Cranes, Tppers,Excavators, Proclaimers, JCBs, and Concrete Mixing Box etc.

SBTVya par Mithra

Trading is an important activity in the State of Kerala and to take care of the needsof Trading Community, separate schemes have been launched. Under the scheme all retailtraders can avail loans for their working capital requirement and also for purchase offixed assets, furnishing of shops etc.

SBT MSME Gold loan

Scheme for financing against security of gold ornaments to MSME customers fortheirManufacturing/Business needs.

2.11 Commercial & Institutional Finance

The Bank performed well under the segment by tapping the potential in the market andC&l advance of the Bank reached Rs. 35,212 crore as on 31st March 2013, registering agrowth of 18.63% over March, 2012. This segment contributes more than 51.26% of Bank'stotal advances, which comprises financing Trade and Services, Industry, Infrastructure,financing corporate customers and other institutions.

Commercial Net-work (CNW) Branch System was introduced in the Bank for giving focusedattention to select branches to achieve substantial growth in large value advances.Commercial branches at Bangalore, Chennai, Ernakulam and New Delhi, Corporate FinanceBranch Mumbai, Mumbai Main and Karol Bagh Branch (New Delhi) were brought under thesystem. The 7 CNW branches put together have a business level of Rs. 32,705 crore. Thecredit portfolio of CNW branches is Rs. 21,257 crore, which is about 30.92% of the Bank'stotal advances. They also handle Non-Fund Based advances of Rs. 3,447.57 crore.

With the objective of improving the market share in corporate segment and enhancing thebusiness mix to global standards, Bank has established a separate network called"Commercial Business Group" (CBG).

The core idea behind the formation of CBG network is to cater to the banking needs ofMid Corporates, Emerging Business Groups and large SMEs, which contribute to the bank'sasset portfolio. Now, CBG has in its fold, 13 branches across the country and it isproposed to add more branches during 2013-14.

CBG branches, being credit focused, have great potential to contribute towards thefuture growth of business. The CBG network is expected to become a flagship segment of thebank in future. At the end of 2012 -13, the total business of CBG has been Rs. 9,202crore, with deposits at Rs. 2,208 crore and advances at Rs. 6,994 crore.

Project Finance Unit (PFU) was formed in the Bank in order to develop project appraisalskills in-house, and also to prevent good business proposals from going past us for wantof Techno Economic Viability (TEV) Study. The PFU undertakes Technical and Financialappraisal of small and medium & large sized projects, which have not been vetted byagencies of national/international repute.

Earlier, the Technical Consultancy Cell (TCQ attached to MSME Business Department hasbeen merged and functioning under PFU with effect from June 14, 2011.

Apart from conducting viability studies, PFU is exploring the avenues for preparationof Information Memorandum and Debt syndication also, so as to supplement the Bank'sincome.

During the period (2012-13) under review, PFU has conducted TEV study on 18 projects,having total project cost of Rs. 1,500 crore involving Term loan amount of Rs. 770crore and earned an income (study charges) of Rs. 33 Lakh and an amount of Rs. 20 Lakh isin the pipeline. Further, PFU with the assistance of TCC has conducted rehabilitationstudies of four units.

2.12 Personal Deposits

Deposits under Personal Segment grew from Rs. 45,377.71 crore as on 31.03.2012 to Rs.52,590.92 crore as on 31.03.2013 thus recording a growth of 15.90%. Domestic Deposits grewby Rs. 3,210.64 crore while MRI deposits grew by Rs. 4,002.57 crore. Personal Depositsconstitute 62.53% of the aggregate Deposits of the Bank.

2.13 Personal Finance

The Bank continued to be active in extending finance to Personal Segment, mainly by wayof Housing Loans, Car Loans, Education Loans and Gold Loans.

The advances under the Personal Segment rose to a level of Rs. 17,862.82 crore (net ofIBPC of Rs. 500 crore) as at March 2013 from Rs. 13,456.16 crore (net of IBPC of Rs. 2,000crore) as at the end of March 2012.

Duringthe year under review, 12,739 housing loans aggregating to Rs. 1783.08 crore weregranted taking the outstanding Housing Loan Level to Rs. 8,582 crore as on 31.03.2013.Similarly 11,836 car loans aggregating to Rs. 573 crore were granted during the sameperiod taking outstanding car loans level to Rs. 1,357 crore as on 31.03.2013.

As in the previous years, the Bank continued to support the younger generation topursue higher studies by extending Education Loans under IBA Model Scheme. During the yearthe Bank has launched two more Education Loans schemes viz.

i) Loan Scheme for students admitted under Management Quota, and

ii) Scheme for Vocational Education and Training.

The Bank maintained its leader position in extending Education Loans in Kerala State.During the year under review, 7,202 Education Loans amounting to Rs. 229 crore weresanctioned, taking the total outstanding amount to Rs. 2,405 crore as at the end of March2013.

In order to unlock the economic value of the Gold with household's, special thrust wasgiven for sanction of Gold Loans during the year. The efforts yielded results and, duringthe year, 2.32 lakh gold loans were sanctioned taking the outstanding amount toRs.2,459.50 crore as at March 2013.

Social Banking

The National Pension System (NPS) is a defined contribution based pension systemintroduced by the Government of India. It is an initiative aimed at providing adequateretirement income for all Indian citizens with a built-in social objective. The Bank wasappointed as Aggregator by the PFRDA and so far 1,671 corporate accounts and 154 normalNPS accounts have been registered. 1% Interest Subvention Scheme on Housing loans wasimplemented as per the directions of Government of India benefiting the Home Loanborrowers who availed loans uptoa limit of Rs. 10 lakh within an estimate/cost ofconstruction of Rs. 20 lakh.

The subvention for the period from 01.10.2009 to 31.03.2011 has been received andpassed on to the beneficiaries. Pursuant to the budget announcement for the year 2012-13,the Interest Subvention Scheme for housing loan is now being extended to housing loanswith limits upto Rs. 15 lakh with project cost not exceeding Rs. 25 lakh.

Central Scheme to provide Interest Subsidy on Education Loans availed by borrowersbelonging to Economically Weaker Sections whose parental annual income does not exceed Rs.4.5 lakh has been implemented. Interest subsidy for the period from 01.04.2009 to30.6.2012 has been received and passed on to the beneficiaries under the scheme.

Campaigns

In order to commemorate the 67th Anniversary of Bank's foundation day, a 670 daydeposit product with interest at 9.50% p.a. was run from 20th August 2012 to 15thSeptember 2012. An aggregate amount of Rs.2,123 crore spread over 35,674 accounts wasmobilized through this product.

Acampaign by the name of "Pooja to Pongal" was conducted from 23.10.2012 to15.01.2013 for extending Housing Loans, Car Loans and Gold Loans at attractiverates/concessions.

In order to activate the inoperative accounts a campaign was conducted during which1.04 lakh inoperative accounts were either reactivated or closed.

SBT Tax Saver Scheme is aimed to facilitate tax payers to secure exemption under Sec.80of the I.TAct. A special campaign was conducted from 01.02.2013 to 3 1.03.2013 toencourage the Tax Payers to invest their savings with the Bank. An aggregate amount of Rs.30.58 crore spread over 5,605 accounts was mobilized through this product.

2.14 Treasury Operations

The gross Investments of the Bank stood at Rs. 27,273 crore as on 31st March 2013 asagainst Rs. 22,473 crore as on 31st March 2012. Average investments during 2012-13 was Rs.24,984 crore as against Rs. 21,155 crore during 201 1-12. The Revenue from investmentoperations (interest and dividend) for the year was Rs. 1,816.37 crore as against Rs.1,446.28 crore for the previous year. The average yield on investments was at 7.38% duringthe year as compared to 7.06% during the year ended 31st March 2012. The Bank earned aprofit of Rs. 131.18 crore from Domestic Treasury Operations during the period underreport compared to Rs. 66.79 crore during the year ended 31st March 2012. The total profitfrom Forex operations during the year was Rs. 25.29 crore as against Rs. 42.49 crore as on31st March 2012. During current year as per regulatory requirement, 'Discount income on CPand CD' has been grouped under'Income on Investments'.

Bank's total Forex turnover during the year for merchant transactions was Rs. 24,026crore compared to Rs. 26,830 crore during the previous year. Inter bank turnover was lowerat Rs. 4,83,332 crore as against Rs. 8,89,498 crore during the previous year. Bank is amember in MCX-SX (Multi Commodity Exchange) for trading in Currency Futures.

2.15 International Banking

The Bank's total Forex turnover from merchant transactions, during the year was Rs.24,026 crore compared to Rs. 26,830 crore during the previous year. Inter Bank turnoverwas at Rs. 4,83,332 crore as against Rs. 8,89,498 crore during the previous year. Thetotal profit from Forex operations during the year was Rs. 25.28 crore as against Rs.42.49 crore during the previous year. The export finance extended by the Bank stood at Rs.2,064.35 crore, which was 37.04% higher overthe level at the end of the previous year.

The Bank has entered into an agreement with Export Credit Guarantee Corporation ofIndia (ECGC) to cover its export credit portfolio with effect from 1st October 2012.Accordingly, eligible accounts have been covered under Whole Turnover Packing CreditGuarantee (WrPCG) and Whole Turnover Post Shipment Guarantee (WTPSG) cover provided byECGC of India Ltd. With a view to facilitating faster issue of Bank RealisationCertificate to exporters (BRCs) for claiming export incentives and as part of messageexchange initiative of Directorate General of Foreign Trade (DGFT), the bank has commenceddigital transmission of Bank Realisation Certificate (e-BRCs) through DGFT website sinceAugust 2012.

2.16 Cross Selling

The Bank has been constantly endeavoring to meet the requirements of its customers bymaking available Life, Non-life insurance products as well as other non-banking investmentproducts like Mutual Funds and also Credit Cards to its customers, The Bank's CrossSelling products include life insurance products of SBI Life Insurance Company, SBIGeneral Insurance Company's Non Life (General Insurance) products, SBIMF's Mutual fundproducts and Credit cards from SBI Cards which are being made available to the customersthrough the branch network. Wth auto debit facility in place, SIP mode of investment inMutual Funds is becoming popular amongst the Bank's customers. The Bank also has tie uparrangements with UTI Mutual Fund, Sundaram Mutual Fund, Franklin Templeton and TataMutual fund houses whose products are available to the customers through the branchnetwork.

As against Rs. 11.83 crore income earned during the year 201 1-12, income from theCross Selling business during the current year has shown adecline in growth to Rs. 9.87crore.

SBI Life Insurance with a share of nearly 68% continues to be the major contributor toCross Selling Income followed by General Insurance, Mutual Fund and SBI Cards at around21.00%, 10% and 1% respectively.

Some of the SBI Life products that are gaining acceptance among the customers are:RinnRaksha, a loan liability insurance cover for Housing, Vehicle and Personal loans, Pureterm insurance cover called Saral and Smart shield, Term insurance plans with a return ofpremium like Group Swadhan and Individual Swadhan and traditional plans like SubhNivesh(an endowment plan with a whole life option), Smart Money back and Smart Income Protect.Child plans like Scholar II and Smart Scholar are also widely accepted plans. Pensionplans like Annuity Plus and Saral Pension are now available for sale.

The Bank had a tie-up with United India Insurance Company Limited for marketing itsNon-life products. The tie-up with UIICO for General Insurance products has beendiscontinued with effect from 10.07.2012 and a newtie-up with SBI General is in place.Snehasuraksha, the Personal Accidental Death coverfor Rs. 4.00 lakh for a yearly premiumof Rs. 100 has gained wide acceptance. Launched on the last day of November, nearly 40,000savings Bank account holders have been covered under this scheme within a short span of 3months.

Among the Mutual fund products, Systemic Investment Plans [SIPs], Fixed Maturity Plans[FMPs] debt and equity funds of SBIMF launched from time to time are also marketed throughthe branches. SBI Mutual Fund's Gold Fund too is gaining acceptance amongst the investingpublic.

SBI credit cards are also being sold to the Bank's customers through its branchnetwork. Platinum Credit cards for high value customers, Secure Cards, SBI Gift Cards andVshwa Yatra Cards for overseas travellers are some of SBI Cards products being marketed bythe Bank.

Bank has 1,131 Certified Insurance Facilitators and 848 AMFI qualified employees as ondate, who form the Insurance and Mutual fund sales force.

2.17 Asset Quality

The bank is continuously, in a very dynamic manner evaluating the assets quality tomeasure the credit risk associated with them and to ensure building up of well performingloan portfolio. As hitherto, a special focus is given to improve the quality of assets andcontaining NPAs. The Gross NPA level of the Bank, as on 31st March, 2013, is Rs. l,749.88crore and its percentage to Gross Advances stands at 2.56 compared to 2.66 last year. TheNet NPA level of the Bank, as on 31st March, 2013, stands at Rs. 988.58 crore. Thepercentage ofNetNPAis 1.46 compared to 1.54 as atthe end of the previous year.

A robust monitoring mechanism for recovery has been put in place by constituting aBoard level Committee, besides a High Power Task Force with Top Executives as members toreview the Non Performing Assets, above Rs. 1 Crore. As a strategic initiative, a newscheme has been framed to engage the services of the outside professional agencies (AssetReconstruction Companies) towards recovery of loss assets. The Bank has migrated toe-auction platform to conduct the sale electronically, ensure greater transparency withrespectto sale of immovable properties.

The Asset Tracking System has been put in place effectively, for follow up of irregularaccounts by tele calling. During the year, 89,101 accounts were tracked and 32,552accounts were regularized with a recovery of Rs. 44.84 crore.

Keeping in mind the growing importance of the MSME sector, the Bank is continuouslyengaged in providing the right kind of rehabilitation support to sick MSME units.Rehabilitation/ Restructuring packages are under implementation in respect of 1,484 unitswith a total exposure of Rs. 2,391.47 crore. Of which, 29 units are under CDR scheme withan exposure of Rs. 1,199.57 crore and 22 units under BIFR scheme with exposure of Rs.152.32 crore.

2.18 Government Business

The Bank maintains its status as the Principal Banker to Government of Kerala. The Bankhas been authorized by Reserve Bank of India to handle State Government Business at 121branches in the State of Kerala and 2 branches in Tamil Nadu. 370 Post Offices are linkedwith the Bank's branches with a total turnover of Rs. 5,251 crore. More Post Offices arecoming forward to open their accounts with the Bank as perthe Government Policy forlinking of Post Offices with the banks. Bank is undertaking Railway transactions in its 57branches.

194 branches of the Bank are authorized by CBDT for collection of direct taxes byphysical challans (134 branches in Kerala and 60 branches outside Kerala) and 148 branchesare authorized by CBEC in Kerala for indirect taxes in physical mode.

E-payment facility launched by the Government of Kerala through the Bank for payment ofCommercial Taxes is well received by the business community and have clocked a Turnover ofRs. 9,345 crore for the year. E-payment for remittance of vehicle taxes and related feeshas been introduced by the Bank in co-ordination with the Commissioner of Transport inThiruvananthapuram and Attingal RTO Offices. Other E-payment initiative includes KarnatakaState Government Taxes, Transport, Commercial Tax and Sales Tax of Tamil Nadu,Professional Tax and Sales Tax payment of Maharashtra State Government etc. Bank has alsosuccessfully launched online facility for remitting fees for various UPSC examinations.Bank is also continuing its efforts to get all the e-initiatives extended in a phasedmanner.

Bank's Centralised Pension Processing Cell (CPPC) has become fully operational and atpresent, it is handling 1,43,742 number of pensioners.

Bank has 114 currency chest branches in Kerala, 1 in Karnataka and 8 in Tamil Nadu.During the year under review, Bank received Government Commission to the tune of Rs. 55.60crore.

2.19 Electronic Payment Systems

Electronic Payments of the Bank are done by the Payment and Settlement Group whichfunctions from Belapur, Navi Mumbai in the same premises from which the PSGs of otherAssociate Banks are also functioning. All the branches of the Bank are enabled forRTGS/GRPT/NEFT remittances. The total number of outward electronic remittances for theyear ended 31.03.2013 had been at 47,55,284 registering an increase of volume by 54% ascompared to an increase of 35.76% registered in the previous year. RTGS and GRPT outwardtransactions showed an increase of 14% and 15% respectively for the current year. NEFTtransactions registered a considerable increase of 68% over the last year level. TheBusiness Continuity Plan is in place for both RTGS and NEFT and was tested successfully afew times during the year.

3. Marketing Initiatives and Development of New Products

The Marketing Department of the Bank continues to play its role in facilitatingcustomer acquisition, retention and broadening of the Bank's customer base by conductingsegment centric marketing drives.

The major marketing initiatives during the year 2012-13 were:

3.1 The Marketing department's follow up efforts/liaison with the various StateGovernment departmental functionaries, ensured that the salary of the employees of most ofthe State Government Departments is now disbursed through the branches of the bank.Corporate Salary Package, with attractive features, has been rolled out to cater to thecustomers' needs.

3.2 The Bank maintains good liaison with the State Government administrative machineryand is the preferred Bank for almost all State Government Departments.

3.3 The Bank continues to be the main bankers to all the Universities in the State andhas branches in their campuses.

3.4 In the face of stiff competition the Bank succeeded in mobilising the salaryaccounts of over 1700 Gazetted/Non-gazetted officers of the State Secretariat.

3.5 To build up maximum growth in business by exploiting the potential available and tomaintain competitive spirit among the operative staff, the following campaigns wereconducted, (i) Salary Savings Campaign (ii) Mahostav (iii) 500 days deposit (iv) Tax Saver

3.6 A major achievement of the year was leaving the Bank's footprints in the corridorsof the State secretariat. This was achieved by the inauguration of the first ATM withinthe Secretariat premises by the Chief Minister of Kerala.

3.7 The Bank constituted the Prathibha Samman Awards during the year for honouringrespectful personalities for their outstanding contributions to the society. Awards weredistributed on the auspicious occasion of our 68th Foundation Day celebrations.

3.8 A scheme was formulated as per Kerala Chits Fund Act to deposit (i) 50% of the chitamount in the name of registrar of Chits and (ii) 50% of the chit amount in the form ofBank guarantee. The scheme provides ample scope for improving business.

3.9 The Bankwasthe sole banker to the International Rim Festival of Kerala hosted byKerala State Chalachithra Academy, from 07/12/2012 to 14/12/2012. Bank's IT departmentdelivered a seamless automated system designed to issue delegate passes.

3.10 Bank has introduced Doorstep Banking for Kerala Medical Services Corporation forKarunya Community Pharmacy (KCP) outlets at Medical College, Kallara, Alleppey, Trichurand Kozhikode.

3.11 LCD TVs have been installed in Emakulam and Kottayam Zone branches to displayBank's products and services. This facility is now being extended to the remainingbranches.

3.12 Ascheme for financing Installation of Solar Panelsforin-house power generation inthe households of Kerala through atie-up with KSEB is being initiated.

3.13 Application Supported by Blocked Amount (ASBA) scheme has been extended to allbranches. This provides an opportunity to the investors to apply for an IPO/FPO throughany of the bank's branches.

3.14 The proposal for opening State Lottery collection account to pool the funds ofeach DLO has been initiated.

3.15 Salary and Pension disbursement package for KSRTC employees is in an advancedstage of implementation.

3.16 Discussions have been initiated with Revenue department for the Bank to provide ane- platform for collection of government receipts and effecting government payments.

3.17 The State Government Treasury Integration is now in an advanced stage ofcompletion.

3.17 The State Government Treasury Integration is now in an advanced stage ofcompletion.

3.18 Banking arrangements fore-procurement and e-tendering by Public Works &Department have been initiated and is nearing completion.

3.19 Discussions with Cochin SEZ for take over of its accounts and the accounts of 100odd EOUs functioning in the SEZ are on. The Bank's IT department and the Marketingdepartment work in close coordination to ensure an end-to-end solution for the customers.

4. Customer Service

4.1 Customer service in the Bank is accorded top priority and every endeavor is made toimprove the quality of service to the customers and redress their grievances.

4.2 A well defined and full-fledged Customer Grievances Redressal Mechanism is put inplace in the Bank. Reports on the number of complaints received /disposed /pending in theBank as a whole are submitted to the Bank's Board and Apex level Customer ServiceCommittee at Head Office. The Standing Committee on Customer Service, constituted pursuantto the Tarapore Committee recommendations, also reviews the quality of customer serviceextended in the Bank at regular intervals.

4.3 An official of the rank of Deputy General Manager is placed as head of the CustomerService Department to give greater focus on complaints received from customers and speedyredressal of complaints. The Department acts as a coordinator between the Branch and thecomplainant and ensures quick disposal of complaints.

4.4 As a proactive measure, apart from acknowledging each complaint immediately onreceipt, senior officials at Customer Service Department endeavor to contact thecomplainant personally wherever contact numbers are available. Many of the complaints getresolved on the same day itself. The average time taken for disposal of complaints at HeadOffice /Zonal Office level has been reduced substantially. This has created a verypositive effect on our customers and is widely appreciated by the customers.

4.5 Bank has provided a facility (SMS SBT CARE) to the customers whereby they can senda message by SMS, using their mobile, from any place to 9847198471 and /or 56363. Thecustomer is contacted by the officials of the Bank and the complaints are taken up forredressal on priority.

4.6 Bank has also established a call centre with toll free number: 1800 425 5566 whichenables the customers and general public to seek clarification on Bank's products, serviceetc. Adequate publicity through print and visual media is ensured throughout the year.

4.7 On-line complaint registration is an alternate channel activated from 13.9.2012 forcustomers to lodge complaints. On submission of complaint online, an automaticacknowledgement will be generated with reference number, date and name of complainant andthe status of the complaint can be monitored by the complainant on-line. This channel hasbeen well received by the customers and the on-line complaints received are resolved intime.

4.8 An Open House customer meet, a first of its kind, was arranged at Head Office thisyear, on 20/09/2012. 42 customers representing 18 branches attended the meet and arepresentative from BCSBI, Mumbai had also participated.

4.9 Customer contact programme - (Meeting One lakh Customers 01/12/2012 to 12/12/2012)

A customer contact programme was conducted during the period 1st December to 12thDecember 2012 in which 97,714 customers were contacted and feedback received from themwere analyzed and corrective action taken to enhance customer satisfaction.

4.1 OA Town Hall meeting of Banking Ombudsman

A Town Hall meeting of Banking Ombudsman was convened at Pala (Kottayam Zone), a tierII centre, on 17/01/2013, in which Banking Ombudsman of Kerala and Lakshadweep, ChiefGeneral Manager (Customer Service) from RBI Central Office and General Manager BCSBIparticipated.

4.11 Model Citizen's charter - (A Charter for Customer services in Public sector Banks)

Model Citizen's charter-A Charter for Customer services in Public sector Banks(Revised), approved by IBA, was adopted by the Bank and made available in Bank's publicportal.

4.12 Damodaran Committee recommendations

170 recommendations of the Damodaran Committee, forwarded to the Bank by IBA, have beenapproved for adoption/implementation.

5. NRI Services

The Bank continues to maintain the number one position in NRE deposits in the KeralaState. During the year 2012-13, NRE deposits of the Bank increased from Rs. 15,309 crore,as on 31st March 2012, to a level of Rs. 19,312 crore, thus recording a growth of Rs.4,003 crore(26%). NRE deposits constitute 23 % of the Bank's total deposits. Three moreSpecialized NRI Branch was opened during the year at Malappuram, Thrissur and Kottakkaltaking the total of such Branches to eight. The NRI premium Branch opened at Trivandrumlast year, recorded tremendous growth this year also. Duringthe year, by the addition ofthree more currencies, the total number of currencies in which the FCNR(B) deposits can beaccepted is increased to nine.

The Representative Office, at Dubai, the nine Relationship Managers posted in variousMiddle East countries and the Managers deputed to the two Exchange Houses under Bank'smanagement in UAE as well as in Oman, have contributed to a great extent in canvassing thebusiness at the point of origin and directing them to the Bank. Also Bank is planning toincrease the strength of Relationship Managers in the Middle East countries for tappingthe potential available in those countries to the full extent. Some of the existinginitiatives like issuing the welcome kits for the new accounts opened overseas on realtime basis are received well amongthe expatriates.

The visit of marketing teams headed by the Managing Director and the Chief GeneralManager to various GCC countries created positive impact among the expatriates in thesecountries. Similarly, the one-to-one interactions made with some of the Ultra High Networth Individuals by the Top Executives have resulted in getting bulk business oftheseIndividuals to the Bank.

Tie- up arrangements have been entered into with 37 Exchange Companies and one Banksituated in various Middle East countries. The remittance received through these ExchangeHouses has grown by 23% in the year 2012-13. About 18% of the amounts received throughremittances are retained with the Bank as deposits. The proposals for tie-up arrangementswith more Exchange Houses are under active consideration and are in different stages offinalisation.

6. Lead Bank Scheme

The Bank is spearheading the Lead Bank activities in three districts of Kerala Stateviz. Alappuzha, Kottayam and Pathanamthitta. The District Credit Plans for the year 2013-14was launched in these lead districts during March 2013.

Kisan Credit Card beneficiaries meetings, Counseling for students seeking educationalloans, Financial Literacy seminars and EDPsfor different target groups were also arrangedin the lead districts. A Special Campaign was conducted on Priority Sector Advancesparticularly for extending Kisan Credit Cards.

For widening the coverage of banking services and to facilitate Direct Benefit Transferof various Government subsidies and Scholarship to the account of the beneficiaries, acampaign for opening of savings bank accounts was conducted by the Lead bank Offices inthe Lead Districts.

The total outlay by all financial institutions in the three Lead Districts for 2012-13was Rs. 18,273.71 crore of which the Bank's share was Rs. 3,829.96 crore (20.95%). Thedisbursement under Priority Sector advances in the districts as on December 2012 wasRs.9,303.86 crore, out of which the Bank's share is Rs. 2,203 crore, which constitutes 24%of the outlay.

6.1 Rural Self-Employment Training Institutes (RSETIs)

Bank has started RSETIs in Wayanad, Pathanamthitta, Alappuzha, and Kottayam forproviding skill upgradation training to the rural youth with focus on BPL category. The 4institutes have trained 15,949 persons since inception and 87% of the people are womenbeneficiaries, majority of the trainees are reported to be successful in startingself-employment ventures. Out of 10,864 persons contacted as follow up, 8,666 weresettled. The important courses includes beautician, electrical wiring, ornamentsmanufacturing, tally accounting, Computer hardware servicing, aluminum fabrication,kitchen gardening, mushroom cultivation with vegetable growing, mural painting etc.

The Pathanamthitta RSETI secured 'A' grade in the annual rating of RSETIs conducted byMinistry of Rural Development, Government of India for the year ended March 2012.

6.2 Financial Literacy Centres (FLCs)

In Bank's Lead Districts, we have started FLCs along with RSETIsfor providing financialliteracy & credit counseling. Their major action points include popularization offinancial literacy activities, information about product and credit availabilities andarranging seminars for counseling students aspiring to pursue higher education. Duringthis year we have added 14 more FLCs by starting FLCs in 14 branches spread over 14districts.

6.3 Micro Credit/Self Help Groups

Bank continued to be active in assisting Self Help Groups (SHGs) and financing themthrough Micro Financing Institutions (MFIs) and Non-Government Organisations (NGOs).

91,494 SHGs were assisted up to March, 2013 with a financial outlay of Rs. 846.36crore. During this year loan amounting Rs. 108.60 crore were disbursed to 3,124 SHGs.

7. Financial Inclusion

7.1 Financial Inclusion is delivery of banking services at an affordable cost to thevast sections of the disadvantaged and low-income groups. The Bank has opened over 17.11Lakh No-frills accounts (janapriya accounts). 90% of the 17.11 lakh "No-frills"accounts were opened in the state of Kerala. Joint Liability Group QLG) schemes,Biometric Smart Card Project, General Credit Cards to the Janapriya Account Holders etc.are other initiatives in this direction.

7.2 In conformity with the directions of Reserve Bank of India, the Bank has formulateda Financial Inclusion Plan, which has been rolled out during 2012-13 and all Fl villagesallotted to the Bank has been covered. This plan for Financial Inclusion will be anintegral part of the business plan of the Bank. The Bank's Board has also approved a 3year Financial Inclusion plan, for the years 2013 to 2016, in tune with the Bank's futureplans for Financial Inclusion as well to dove tail the business accruing from Flactivities with that of the Bank's regular business plan. The Bank's Board has alsoapproved the plan for the implementation of Direct Benefits Transfers of the Government.

7.3 The following steps/activities have been undertaken by the Bank as a part offulfilling the Bank's commitment to Financial Inclusion.

• 35 villages having a population over 2000 have been allotted to the Bank forproviding basic banking services through BF/BC (Business Facilitator/ BusinessCorrespondents) route or by opening branches.

• Bank has provided Basic banking in these villages through the BF/BC route exceptin Perumanna and Mayyil village in Kerala, where new branches were opened.

• All the BCs/CSPs and Link Branch Managers have been imparted training.

• The Fl Project of the bank has been christened "SBT-SAHAYA HASTHAM".

• Bank has appointed 6 Channel Managers for the Fl Project.

• As of 31st March 2013, the Bank has enrolled approximately 25,000 customersunder "SAHAYA HASTHAM" in the 33 Fl Villages. The Bank has added 4,404 No-Frillsaccounts through the new branches opened at Perumanna and Mayyil villages.

• Smart cards have been issued to 21,608 customers and transactions totaling Rs.2.30 crore have been routed through the BCs during 2012-13.

• In the second phase of Fl, the Bank will be providing Basic Banking Services inan additional 14 Fl Villages allotted to the Bank in Tamilnadu.

7.4 UID Project:

• The Bank is a registrar for Unique Identification Authority of India (UIDAI) andhas engaged a UIDAI empanelled Enrollment Agency M/s. Tera Software Ltd..

• This Financial Year the Bank has enrolled 63,314 residents under the UIDProject.

7.5 DBT rollout of the Government of India:

• The Bank has Lead Bank responsibility in one of the districts, viz.,Pathanamthitta district from among the 43 districts, selected initially for the roll outof Direct Benefits Transfers of the Government of India. Bank has nearly completed theopening of accounts for all the beneficiaries.

• The Bank has also gone in for a concerted linking of 'Aadhaar" numbers tothe Bank's customers' accounts. This linking is required for routing of"Aadhaar" based credits of the various Government Departments administering theDirect Benefits Transfers.

• "Aadhaar" linking of approximately 1,76,000 accounts of Bank'scustomers has been completed so far.

Ensuring more channels of payments to the beneficiaries of Direct Benefit Transfer(DBT) of the State and Central governments:

• The Bank is taking necessary steps to ensure the availability of variouschannels of delivery for the DBT payments.

• The Bank has 965 ATMs/Cash Dispensers as on 3 1.03.2013 and has plans to addnearly 1000 more ATMs during 2013-14.

• The Bank has entered into an agreement with e-Governance Services India Limited,an undertaking of the ministry of Telecommunications and Information Technology under theCentral government, for engaging them as Bank's Business Correspondents.

• As per the above agreement, the Bank plans to set up another 700 BusinessCorrespondent outlets across the country in the next 3 years. This will increase theavailability of outlets for those receiving Government Benefits.

• The Bank has decided to set up a branch exclusively for processing DBT payments.

8. Support to disadvantaged segments

8.1 Assistance to Schedule Caste/Scheduled Tribes (SC/ST)

The Bank continues to give due importance in extending financial assistance to meet thecredit requirement of SC/ST citizens. A credit Cell is functioning at Head Office underthe control of Deputy General Manager (MSME) for monitoring flow of credit to thesecommunities. The advance to SC/ST borrowers under priority sector stood at Rs. 3,729.14crore constituting 15.29% of priority sector lending.

8.2 Assistance to Minority Communities (Mcs)

The Bank continues to give due importance in extending financial assistance to meet thecredit requirement of the Minority Communities. The advances to MCs under priority sectorstood at Rs 8,536 crore increased from Rs 6,968.25 crore. This works out to 35% of theBank's priority sector advances.

9. Information Technology - Technology Upgradation & IT Initiatives

The Core Banking System has provided the Bank with state-of-the-art software that hasgreatly enhanced the efficiency of customer services, speeded up data processingcapabilities, strengthened MIS, enabled efficient Asset Liability Management, reducedtransaction cost and offered alternate channels to customers for transactions. The Coresystem is a product-based system whereby new schemes of the bank can be introduced easilywith global parameter setting at CDC level. The capacity of the servers and otherequipments, and other performance parameters are periodically reviewed andupgradation/addition of new equipment is arranged as and when felt necessary.

Following the April 2010 Monitory Policy, RBI has constituted a working group onInformation security, Electronic Banking, Technology Risk Management and Cyber Frauds, andmade recommendations in the following nine areas.

• Information Technology Governance

• Information Security

• IT Operations

• IT Services Outsourcing

• IS Audit

• Cyber Frauds

• Business Continuity Planning

• Customer Education

• Legal Issues

The bank has constituted a Standing Committee for implementing RBI recommendations. Thecommittee has conducted a Gap Analysis for all the recommendations. The status ofimplementation of the recommendations in the Bank is as follows:

i) Out of the total of 105 recommendations, 44 recommendations, which do not requireextensive budgetary support, infrastructural or technology changes as directed by RBI wereimplemented during 201 1-12.

In addition to this

a) General Manager (Information Technology) has been designated as Chief InformationOfficer in October 2012.

b) IT Steering Committee has been constituted under the chairmanship of General Manager(Information Technology) to assist Executive Management in implementing IT strategy,reviewing the status of projects, monitoring service levels etc.

9.1 Alternate Delivery Channels

The CBS has facilitated effective implementation of Alternative Channels viz. AutomatedTeller Machines [ATMs], Internet Banking, Mobile Banking, Green Channel Counters and Pointof Sale (POS) terminals. The Internet Banking facility is recognized to be the best amongits class. Mobile Banking Service, which was rolled out in July 2009, is getting steadyacceptance from customers. Point of Sales terminals have been successfully rolled out inthe Bank during the year.

9.2 ATMs/POS

The Bank has a network of 965 ATMs, including 2 Bunch Note Acceptors (BNAs). 299offsite ATMs are installed at offsite locations. 37 new ATMs were installed during theyear out of which 17 ATMs are installed under the new cluster based approach, asinstructed by Government of India. The network of 792 ATMs in Kerala is the largest in theState. All ATMs are part of the State Bank Group ATMs, having around 30,500 ATMs.

The Bank's ATM-cum-Debit cards are accepted in all outlets having Master Card A^salogo. Several facilities such as Visa Money Transfer (VMT), Money Send, SBI Credit Cardpayment, SBI Life Premium payment, Mobile recharge, Donation, Fee payment, JMET/GATEApplication Fee payment, Mobile Banking registration, Cheque Book order etc. have alsobeen enabled in the ATMs.

The Bank has a card base of 66.32 lakh as on 3 1.03.2013, which translates into anincrease of 22.24% over the card base as at the end of the previous year

9.3 Internet Banking

• The Bank offers a convenient and efficient Internet Banking (INB) facilitythrough 256 bit EVSSL (Extended Validation Secured Socket Layer) encryption. This providesmore security to Internet Banking customers against phishing/hacking threats.

• Internet Banking Cell, has been consistently generating income for the lastthree years, and has now proved to be a profit centre.

• Total Internet Banking registrations stood at 5,61,172 as on 31st March, 2013out of which 4,89,557 are retail INB customers and 71,615 corporate customers. 1,07,296new registrations were made during the FY 2012 - 13. The average number of internetbanking customers per branch stood at 598.

• Bank could channelize 69.08 lakh transaction during FY 2012 -13, throughinternet banking channel, out of which 34.48 lakh were inter branch funds transfertransaction, 5.19 inter-bank transaction, 11.11 lakh various tax transaction and 18.30bill payments/merchant transaction. Per day INB transaction during FY 2012 - 13 is 18,926as against 13,718 during the year 201213.

Suitable Anti phishing measures have been introduced.

9.4 Mobile Banking Service (MBS)

Mobile banking provides Bank's customers with another safe, secure, fast and convenientchannel for banking transactions. The services provided includes enquiry services, fundstransfer, demat account services, bills payment, mobile top up, DTH recharge, m-commerceetc. The daily limit for MBS transaction is Rs. 50,000/-for aggregate of funds transfer& transactions involving purchase of goods & services, within an overall calendarmonth limit of Rs. 2,50,000/-.

Inter bank Mobile Payment System (IMPS) in Mobile Banking Services was launched duringthis year.

The Bank has activated 68,544 new Mobile Banking registrations during the year i.e. anincrease of 92.48% over the registrations as at the end of previous year. The total numberof MBS registrations as on 31.03.2013 stood at 1,42,664.

A slew of value-added applications were developed for customer's convenience.

• Electronic Submission of Bank Realisation Certificates -eBRC

• Directorate General of Foreign Trade, Ministry of Commerce and Industry hasrequested that the Bank Realization Certificates should be submitted electronically forhelping the trading community. eBRCs are digitally signed and then uploaded to DGFT webserver.

• Automation of Central Plan Scheme Monitoring System (CPSMS)

• Downloading of files from SFTP server to staging server and upload of processedfiles to CPSMS server was automated.

• Loan Origination Software (LOS) for Car Loans

• We have developed in-house Loan Originating Software for Car loans.

• Implementation of New Pension Scheme (NPS)

• e-Scroll Creation for Central Civil Pension

• Creation of Electronic Format for Central Civil Pension Payment Scroll wascompleted and the data was submitted to Central Pension Accounting Office (CPAO) afterobtaining feedback from Centralised Pension Processing Cell.

Other achievements

• Implementation of Aadhar Enabled Payment System (AEPS)

• Government of India had launched direct benefit transfer (DBT) from 01.01.2013.For enabling Aadhar based payments, Aadhar Payment Bridge System (APBS) was introduced byNPCI. The bank is one of the first banks to become the member in the Aadhar bridge.

• Implementation of Central Plan Scheme Monitoring System.

• Implementation of Cheque Truncation System (CTS) in all MICR centres in thesouthern grid.

• Migrationto 10 series IP from 31 series in all the branches/offices.

• Migration to Active Directory Services (ADS) in all the branches/offices.

• Automation of SC/BP instruments.

• Automated Data Flow-Automation of 8 more reports which are to be submitted toRBI, completed thus taking the total number of automated reports to 40.

10. Business Process Re-engineering (BPR) Initiatives

10.1 With the objective of improving performance and enhancing customer service toglobal standards, the Bank has embarked on implementation of various BPR initiatives byleveraging on its core competencies, state of the art technology and redesigned operatingarchitecture.

10.2 Retail Assets & Small and Medium Enterprises City Credit Centres (RASMECCCs)for appraisal, sanction and disbursement of loans in Retail, Small & MediumEnterprises segments have been set up at 9 major centres. This has enabled the Bank toreduce the response time in these centres, thereby, improving the level of customersatisfaction. It has also enabled standardization of internal processes leading toimproved quality of assets. Multi Product Sales Teams have been established at 7 centresattached to RASMECCC to target specific markets, for canvassing.

10.3 Bank's Rural Central Processing Centres (RCPC), are set up at Palakkad andPonkunnam for processing and sanction of Rural credit.

10.4 Currency Administration Cells have been established at 13 centres linking 199branches for better cash management. Another 5 centres are in the pipeline linking 56 morebranches.

10.5 Stressed Assets Resolution Centres (SARCs) have been rolled out at 8 centres formore focused attention on recovery of stressed assets and to upgrade the quality ofassets.

10.6 Pension processing has been centralized at the Centralised Pension ProcessingCentre (CPPC) set up at Thiruvananthapuram.

This Centre covers all pension accounts of all the Kerala branches. The Centre ensuresaccuracy in pension calculations, timely disbursement of pension and quick settlement oftransactions.

10.7 Centralised Clearing Processing Centre (CCPC) is established at Thiruvananthapuramand all the branches attached to Thiruvananthapuram Clearing House are linked forprocessing of both inward and outward clearing Cheques. Our Bengaluru, New Delhi,Hyderabad, Chandigarh and Kolkata centres are CTS enabled and Chennai and New Delhi CCPCsare handling the Grid based CTS.

10.8 Trade Finance Central Processing Centres, aimed at ensuring efficient and uniformhandling of transactions related to inland and foreign trade and Bank Guarantees byexperienced personnel, have been rolled out at Ernakulam and Chennai linking 46 branches.

10.9 A Liability Central Processing Centre (LCPC) has been established atThiruvananthapuram to provide back office support to branches, in opening and servicing ofliability accounts such as Savings Bank and Current Deposit Accounts. The Centre providespre-generated Welcome Kits to the linked branches consisting of ATM cards and chequebooks. This facilitates the customers to operate the accounts immediately after openingtheaccount.

10.10 Drop Boxes have been provided at the branches for hassle free and safe handlingof instruments deposited. Grahak Mitras have been positioned at select branches toproactively guide the customers in conducting transactions. Relationship Managers havebeen posted at select branches to extend personalized services to the customers.

10.11 Contact centre set up at Bengaluru for providing information on the Bank'sproducts and services, ATM card issue status and blocking of lost/damaged cards. LeadManagement System was rolled out on 23rd November 2012 which provides the Bank a trackingmechanism for business leads, generally received through Contact Centre queries onProducts enquiry calls. It can also be effectively be used as marketing tool-campaignmanagement. Calls received in five languages viz., Malayalam, English, Hindi, Tamil andKannadaare being attended.

The above major BPR initiatives implemented by the Bank are contributing to improvementof the overall efficiency, service delivery, customers' convenience and business growth.

11. Internal Control Systems & Supervision

11.1 Integrated Risk Management

Bank's risk management philosophy is based on a clear and timely identification ofvarious types of risks, accurate risk assessment and measurement procedures and continuousmonitoring. The Integrated Risk Management facilitates the Bank to have a holistic view ofthe risk management. Modular structure under Integrated Risk Management has variousdivisions focused on management of a specific risk-Asset Liability, Market Risk, CreditRisk, Operational Risk, and Information Systems security.

The risk management architecture of the Bank consists of the Board of Directors at thetop having overall responsibility to implement Risk Management Systems in the Bank. Tothis effect, Risk Management Committee of the Board supervises the overall risk managementfunctions of the Bank. In line with the modular structure of Integrated Risk Management,there are various risk management committees to have focused attention on various risks,viz. Asset Liability Management Committee (ALCO), Market Risk Management Committee (MRMC),Credit Risk Management Committee (CRMC), and Operational Risk Management Committee (ORMQ.The General Manager (Risk Management) is designated as the Chief Risk Officer (CRO). TheIntegrated Risk Management Department headed by Deputy General Manager is responsible forthe overall daily management of risks at micro level. For management of various risks,Bank has in place various policies and procedures.

11.2 The Asset Liability Management (ALM) system has been implemented in the Bank sinceApril 1, 1999 as per the Reserve Bank of India guidelines on ALM and Liquidity RiskManagement. As per the Bank's ALM Policy, the Asset Liability Management Committee (ALCO)is authorised to evolve appropriate systems and procedures for ongoing identification andanalysis of liquidity and market risks and to prescribe parameters for efficientmanagement of these risks. The ALCO headed by Managing Director meets regularly to reviewand monitor the same.

Liquidity and interest rate risks are identified, measured and monitored by the ALCOthrough the prescribed statements, viz, Statement of Structural Liquidity, Statement ofShort Term Dynamic Liquidity, Statement of Interest Rate Risk Sensitivity (Traditional andDuration Gap methods), Stress Testing on Liquidity and Earnings etc. ALCO discusses thesestatements in detail and takes corrective actions whenever necessary. As per the Bank'sALM Policy, a Contingency Funding Plan is reviewed on a quarterly basis. Bank's BenchmarkLending Rates (Base Rate and BPLR) and Card Rates for Deposits are discussed and decidedby the ALCO, The ALCO also discusses the economic developments and monitors the changes inthe market on an ongoing basis.

Market Risk is largely managed through adherence to various Position Limits, Stop LossLimits, Value at Risk (VaR), Management Action Triggers (MAT) and Cut Loss Triggers (CLT)etc. The Bank is in the process of upgrading the present software so as to compute MarketRisk Capital Charge as per the advanced approaches under Internal Models Approach.

For Credit Risk management, the Bank has a structured and standardised credit approvalprocess which includes comprehensive credit rating of proposals. For retail loans, Bankuses a risk scoring model. Bank has in place various exposure limits for single borrower,group of borrowers, specific sectors, industries etc. as per regulatory requirement and asper its internal policies. Bank takes up regular reviews of its various loan portfolios toassess the risk profile and initiates proactive measures. Other risk prone operationalareas of the Bank's business are monitored and proactive actions for improvement areinitiated in consultation with other departments like Inspection, Systems & Procedure,Frauds Prevention, and Monitoring& Recovery etc.

11.3 Information Systems Security

With technology becoming all pervasive in banking operations, the Information SystemsSecurity Cell plays a pivotal role in spreading awareness on various security measuresamong staff through various channels including e-mails, circulars, pamphlets etc as alsoBank's training system.

The Bank is closely monitoring the roadmap for migration to advanced approaches underBasel II and Basel III norms. In this direction, Integrated Risk Management Department hasbeen conducting various programmes to disseminate the risk management knowledge to theoperating units. This has resulted in better awareness among the operating staff about thevarious risks, importance of accurate data for computation of capital charge, need forcapital conservation, and in general better risk management orientation.

11.4 Inspection and Supervision

Internal Audit/Inspection is an independent appraisal of operations of various Systemsand Controls within an organisation to determine whether acceptable policies andprocedures, designed to add value and improve an organisation's objectives, are followedand resources are used efficiently and economically. Inspection and Audit Department atHead Office monitors various risk parameters by conducting regular Internal Inspection, ISAudit, Compliance Audit of Branches and System Audit of various Head Office Departmentsand Modules.

Apart from the above, Bank has put in place an effective institutional mechanism forRisk Based Supervision through RBS Cell in the Inspection Department. As envisaged by theRegulator, the Bank introduced Risk Focused Internal Audit (RFIA) under RBS w.e.f. 1stApril 2003. With effect from 1st April 2010, score for Business Parameters has been takenout of the purview of the RFIA, Based on the guidelines on Internal Audit issued byGovernment of India, Bank's Inspection & Audit Policy has been suitably modified. TheBank has also incorporated the RBI guidelines on Information System Audit in the IS AuditPolicy.

Subsequent to migration to Core Banking, as constant up-gradation in technology,corresponding changes have been brought in, especially in the area of Audit Rating, AuditReport Formats, grouping of branches, sampling norms and periodicity of inspection.Various user friendly formats have been introduced for Cash and Gold verification, FEMAAudits, Tax Audits, IS Audits etc, The Department is also involved in the area ofmonitoring Concurrent Audit of designated branches and movement of audit rating of thesebranches.

In order to instill knowledge and to improve the quality of various reports, thedepartment is imparting training for the existing and newly joined inspecting officials inthe area of RFIA, IS Audits and Concurrent Audit. With a view to improve the efficiency ofInternal Audit, the Bank is awarding Certificates to those Branches who have securedhighest rating in two successive audits. In order to improve the observance of systems andprocedures, the Bank has introduced Dynamic Rating System in terms of which penalty ofnegative marking will awarded for false compliance submitted by the branches.

11.5 Credit Audit

The audit of loan appraisal and administration for high value credit accounts with theaim of improving the asset quality of the bank is undertaken by the Credit AuditDepartment. Accounts with total exposure of Rs. 2 crore and above are covered under CreditAudit, The Department conducted audit of 1075 accounts during the year, covering thepre-sanction, post sanction compliance and follow up aspects The Department had alsoconducted credit audit of 4 accounts with exposure below Rs. 2 crore and above Rs. 1 croreon a random basis during the year.

The marks awarded by the credit auditors are normalized by the internal auditors underCredit Risk Management to arrive overall risk rating of the branch.

The Bank ensures that GOI and RBI directives/instructions received are being compliedwith promptly. During the year, the level of compliance of important RBI and GOIdirectives received upto 31.03.2013 is 100%.

Monthly reports of performance of the Department are regularly submitted to the AuditCommittee of the Executives for information and the review reports are being submitted tothe Audit Committee of the Board at its next meeting.

11.6 Inter-Office Reconciliation

The Bank has completed reconciliation of Inter branch accounts upto December, 2012.100% reconciliation of debit entries has been achieved from 01/04/2009 to 31/12/2012,which is in conformity with RB 1st ipulations.

11.7 Compliance

The Bank ensures timely compliance in submission of various statutory and regulatoryreturns and also prompt replies to references received from the Government of India /Reserve Bank of India and other institutions viz., State Bank of India, Indian BanksAssociation etc. The Chief Compliance Officer monitors the Compliance function effectivelyon an on-going basis to ensure that regulatory guidelines issued by RBI, GOI & otherregulatory authorities are duly captured in the Bank's policies and laid down instructionsand that they are complied with at all levels. The Chief Compliance Officer furtherapprises the Audit Committee of the Board and the Group Compliance Officer of materialbreaches identified or reported along with the plan for mitigation of breaches.

11.8 KYC Norms & AML/CFT Measures

The Bank has put in place a Board approved revised policy and procedural guidelines onKnow "four Customer (KYQ/Anti Money Laundering (AML) /Combating of Financing ofTerrorism (CFT) measures in line with the master policy and subsequent guidelines issuedby Reserve Bank of India. A dedicated KYC-AML Cell is functioning in the Head Office tooversee the compliance of KYC/AML/CFT measures. Dy. General Manager (Compliance) is thedesignated Principal Officer for KYC/AML in the Bank.

As per the policy, the branches are to obtain photograph, identity proof and addressproof while opening the new accounts. Customer acceptance and Customer identification arethe most important pre-requisites in the opening of new accounts. Branches also have beenadvised to update the identity proof and address proof the existing customers at regularintervals, presently all High and Medium Risk CIF should be updated once in two years andfor Low risk CIF the period is once in 5 years. Controllers during their visits to thebranches as also the Auditors and Concurrent Auditors, verify compliance of KYC normswhile opening accounts.

In order to delineate the roles of operating level functionaries for implementing theKYC/AML/CFT measures formulated by the bank and making the reporting structure complete,all branch heads upto Scale IV have been nominated as Assistant Money Laundering ReportingOfficers (AMLRO). All controllers and branch heads in Grade/Scale V& VI have beennominated as MLROs. For all BPR initiative offices also, the above arrangement holds goodie: all heads up to Grade/ Scale IV as AMLROs and those in Grade/ Scale V as MLROs. AllMLROs report to Principal Officer (RO.) under advice to their DGM/GM. The responsibilityfor reporting STBs/CCRs in respect of transactions passing through theirbranches/units rests with the respective AMLROs/MLROs.

Monitoring of transactions is done with a view to submit the required reports toFinancial Intelligence Unit-India, (FIU-IND), mandated by Prevention of Money LaunderingAct 2002. With a view to implementing and supporting monitoring of transactions, the Bankhas acquired appropriate software which is processing all transactions handled by allbranches of the Bank, on a day to day basis. Monthly Cash Transaction Reports (CTRs) andNPO Transaction Reports (NTRs) are being generated by the system for submission toFIU-IND. Suspicious Transaction alerts are generated daily, for analysis by the KYC-AMLCell. After due analysis, suspicious transactions are reported to FIU-IND throughSuspicious Transaction Report (STRs), where ever felt necessary. Counterfeit CurrencyReports (CCRs) are also being submitted to FIU-IND as and when detected.

KYC/AML Cell is maintaining a web site to provide relevant and up to date informationfor Branches/Administrative Offices.

Training on KYC/AML is being imparted on an ongoing basis in the Bank. Staff awarenessprogrammes are conducted regularly through seminars at Zonal/Regional Office levels,Learning Centers and during branch visits.

11.9 International Financial Reporting Standards

As per the Road Map laid down by the Ministry of Finance, Government of India, allScheduled Commercial Banks are to convert their opening Balance Sheet as on April 01,2013in compliance with the converged IFRS. The implementation of IFRS would result in one setof high quality, globally accepted accounting standards that would bring uniformity inreporting.

The bank being a member of the State Bank Group, will be taking a common group approachon convergence to IFRS. Suitable software for capturing IFRS compliant data is beingdeveloped by M/s Credence Analytics (I) Pvt Ltd together with Associate Banks IntegratedTreasury, An IFRS Cell has been formed in the Bank at Head Office; Finance & AccountsDepartment to exclusively handle IFRS related work. A Core Team has been formed forcompiling IFRS compliant data required by SBI. All relevant data up to the FY 2011 -12 hasbeen submitted to SBI, IFRS Dept Mumbai.

12. Security Arrangements

During the year, no loss due to security breach in the Bank is reported. Based on theRisk assessment security Guards have been posted at the vulnerable Branches. Manning ofthe Currency Chests is by our own Armed Guards. this is being ensured as also theessential safe guards like fire alarm, burglar alarm and introduction of CCTVs. HeadOffice Security has been strengthened and Control Room is manned round the clock by Firemen inducted recently. Our Controllers, Chief Security officer, respective securityofficers and Fire Officer are constantly monitoring the security measures at the Branchesand are taking immediate remedial measures wherever necessary.

13.Vigilance Machinery and Frauds Monitoring

13.1 Preventive vigilance measures

Due to initiation of Preventive Vigilance mechanism through various measures, such assurprise inspections, branch visits, circulars, meetings workshops etc; we could inculcatea positive compliance measures from vigilance angle among all the functionaries and alsotowards adherence to systems and procedures.

As a part of educative vigilance, the Vigilance Department officials are handlingsessions on Preventive Vigilance at Bank's training programmes, especially for the benefitof newly recruited Probationary officers/Promotee officers highlighting the importance ofadherence to systems and procedure and the need to demonstrate probity in public life allthe time.

The Bank issues circulars every quarter furnishing the modus operandi of fraud cases soas to avoid recurrence of similar instances. Surprise Inspections, at branches, are beingconducted as part of Preventive Vigilance measures.

Structured meetings/conferences and branch visits were conducted by the CVO at variousZones of the Bank/branches to propagate and ensure the implementation of PreventiveVigilance mechanism in the Bank in its true spirit so as to boost the morale of theworkforce and to ensure sustainable business development.

13.2 Vigilance Newsletter "SBT VIGIL"

For the first time, Vigilance News letter viz SBT-VIGIL was introduced and theinaugural issue was released in July 2012. This has facilitated the Vigilance Departmentto directly communicate vigilance related information to the branches and otheradministrative offices.

13.3 Technology Initiatives

Leveraging technology in vigilance administration has been given priority viz E-WRchecking, E-tendering software solutions, Biometric access to CBS etc. SBI has rolled outE-WR package in Associate Banks on a test run basis and very soon the E-WR checking willbe introduced in all the branches. As a part of technology initiative and also to complywith the CVC guidelines, we propose to have end-to-end e-tendering package in the Bank forprocurement, the preliminary work in this regard has commenced. SBI has rolled outbiometric access to CBS recently and ft is expected that same may be extended to Associatebanks shortly.

13.4 Rotation of officers in Sensitive Post

There were 169 officers holding the same position for more than 3 years. A review hasbeen made and the number has been reduced to 67. The rotation of officers posted insensitive places is reviewed periodically.

13.5 Vigilance Study Circle

The CVO's of various PSUs/PSBs in Kerala established a separate Kerala Chapter ofVigilance Study Circle. Accordingly, the Vigilance Study Circle Kerala Chapter wasinaugurated on 22nd March 2013 by Shri. R. Sreekumar IPS (Retd), Vigilance Commissioner,Central Vigilance Commission.

13.6 Training Programmes conducted by Vigilance department

A one day workshop for disciplinary authorities was conducted on 19/01 /1013.The sessions were handled by eminent speakers from CVC and CBI. Thirty Eight Seniorofficials dealing with disciplinary proceedings from various Zones/regions of our Bankattended the workshop and the feedback received from them was excellent on the usefulnessof the workshop.

13.7 Conference of CVOs of South based Public Sector Banks

A conference of CVO's of south based Public Sector Banks was hosted by us on16.06.2012. Nine CVOs attended the conference. The conference provided a platform todiscuss and share the best vigilance practices adopted in various banks and commonproblems/ difficulties faced by CVOs. The report was senttoCVC, DFS, and MOF

13.8 Preventive Vigilance Committees at branch level

As part of monitoring preventive vigilance activities, Preventive Vigilance committeehas been set up in branches where staff strength is 10 and above. This covers 50% of thetotal branches of the Bank. Minutes of the periodical meetings are being monitored by theCVO, and corrective measures, if deemed necessary, are informed to the management. Allother branches having Staff Strength of below 10 have also been advised to discussvigilance matters in the monthly staff meeting.

13.9 Vigilance Awareness Week

Vigilance Awareness Week was observed from 29/10/2012 -03/11/1012 withadministration of pledge to all employee at Head office/other offices/branches. Thisyear's topic for Vigilance Awareness week was "Transparency in PublicProcurement".

In connection with Vigilance Awareness Week the following programs were conducted

• Essay / quiz competition for staff, quiz competition for college students.

• Talks on "Prevention of Corruption" were made by Shri. Vinson M Paul,Additional Director General of Police and Shri. Venugopal K Nair, Director, Vigilance& Anticorruption, Government of Kerala.

• CVO gave a talk on "Importance of Vigilance practices within theorganisation" to the staff of Khadi & Village Industries Commission on 29/10/12and "Importance of Vigilance practices within the organisation" to the employeesof M. G. University at Kottayam on 30/10/2012.

• Honesty Awards were given to 14 children for their various acts of honestyduring the Vigilance Awareness Week and Alertness Award was given to 11 staff memberswhose action helped in preventing frauds.

• Elocution competition, seminars and meetings were conducted in various Zones ofthe Bank.

14. Right to Information Act

The Right to Information Act, 2005 has been implemented in the Bank since 2005 - 2006.The Deputy General Manager (Compliance) at Head office has been nominated as the NodalOfficer under the Act and a system has been put in place to receive theapplications/queries from the public seeking information about the Bank and relatedmatters and to furnish prompt replies within the time frame stipulated under the Act.Central Public Information Officers, Asst. Central Public Information Officers andAppellate Authorities have also been nominated at Head Office and Module offices in termsof the Act. During 2012-13,695 applications were received under the Act and all theapplications were disposed of promptly and within the time frame.

15. Human Resources Development & Industrial Relations

15.1 Staff Resources & Recruitments: As on 31 -03-2013, the Bank had on its rolls12,525 members of staff, comprising 5,093 officers, 5,351 clerical and cash departmentstaff and 2,081 subordinate staff inclusive of 375 Maintenance Staff. The number of womenemployees and ex-service personnel constituted 4,769 and 1,300 respectively of the totalworkforce. Out of the women employees, 1,504 are officers, 2,699 non-subordinate staff and566 subordinate staff. The Bank has also on its rolls 190 persons with disability.

Bank's Staff Strength as on 31st March, 2013:

Staff Strength

OF WHICH

PARTICULARS TOTAL SC ST EX-SER WOMEN PWD
Officers 5093 649 145 137 1504 62
Clerical 5351 701 160 483 2699 118
Subordinate (Exc. MS) 1706 410 77 680 284 8
Maintenance Staff 375 114 5 - 282 2
TOTAL STAFF 12525 1874 387 1300 4769 190

15.2 During the year, 527 staff was recruited (400 in the officers' cadre, 21 inNon-Subordinate and 106 in the subordinate cadre).

NO. OF STAFF RECRUITED - 2012-2013

CADRE TOTAL
Officers 400
Clerical 21
Sub-staff (Including Maintenance Staff) 106
Total 527

15.3 During the year 51 employees were promoted from subordinate to non-subordinatecadre, 414 employees were promoted from clerical cadre to the Officers cadre and 824promotions within Officers' cadre

15.4 Staff Productivity: Business per employee improved from Rs 10.66 crore as atthe end of March 2012 to Rs 12.59 crore as at March, 2013. Net Profit per employee hasimproved from Rs.4.20 lakh in March 2012 to Rs.5.06 lakh for the year ended March 2013.

15.5 Training

Training programmes are conducted at Bank's Learning Centres at Thiruvananthapuram andErnakulam with the objective of updating the knowledge, improving skills and reorientingthe attitude of the Officers and employees on an ongoing basis with particular referenceto areas of corporate goals/concern areas. During the year under review 236 trainingprogrammes were conducted imparting training to 3,047 officers, 1,553 non-subordinatestaff and 203 subordinate staff In addition to in-house training programmes, 872 officerswere deputed to Apex Training Institutions of the State Bank of India like State BankStaff College Hyderabad, State Bank Academy Gurgaon, State Bank Institute of RuralDevelopment Hyderabad, State Bank Institute of Information and Communication ManagementHyderabad, RBI Institutions like College of Agricultural Banking, Pune, National Instituteof Bank Management Pune, Institute For Development and Research in Banking Technology(IDRBT) Hyderabad, Centre for Advanced Financial Research and Learning (CAFRAL) etc. SomeOfficers were also deputed for training at BIRD Lucknow, IIBF Mumbai, IMI New Delhi etc.

• Overseas Training

Duringthe last financial year 8 Senior Executives of the Bank were sent for attendingvarious conferences and Training Programmes held at Leading Business Schools like StanfordBusiness School USA, Kellogg School of Management USA, SDA Bocconi College of Management,Milan, European School of Management at Beriln, ESSEC Business school, Paris, GhentUniversity, Belgium etc.

• Pre Recruitment and Pre- Promotion Training to SC/ST/ OBC

Pre-recruitment training programmes were conducted for candidates belonging to SC/ST/OBC/Physically handicapped/ Minority Community & Ex-servicemen categories appearingfor written examination for selection of Clerical Staff in Associate Banks of SBI. Classeswere conducted at two centres at Thiruvananthapuram and Ernakulam. 1,098 candidatesbelonging to the above categories attended the training. Pre Promotion training and MockInterviews were conducted for employees belonging to SC/ST category, appearing forpromotion from Sub-ordinate to Non subordinate cadre, non-subordinate cadre to officercadre and from JMGS-I to MMGS-II. 115 Employees and Officers have attended theseprogrammes.

• Orientation Programme for Newly Recruited Employees

Orientation training was imparted to 396 newly recruited Probationary Officers.Orientation training was also imparted to 264 officers promoted from the clerical cadreunder Group A, B & D. Intermediate Programme was conducted for 360 Probationaryofficers.

• SBT Leadership Meet

Bank has conducted a workshop for all top executives of the Bank to discuss and findsolutions to the key challenges faced by the Bank and also to build a strong businessleadership under the guidance of the Managing Director and the Chief General Managers. Inthe workshop eminent faculty from top business schools of the country has participated andguided the participants in the preparation of their plans.

• Assistant General Managers' Meet

A similar workshop was conducted for all Asst General Manager level Officers of theBank at three different locations at Chennai, Ernakulam and Thiruvananthapuram where theparticipants are encouraged to formulate action plans for development of business of theBank as well as to find solutions for the challenges faced by the bank, under the guidanceof the Managing Director and other top management functionaries.

• Training Programmes on Customer Service

Customer service is of paramount importance in banking business, Bank has conducted aspecial training programme for the frontline staff on customer service and soft skillsengaging the services of a specialised customer service training institute. 634 employeesand Officers attended the training.

15.6 Reward & Recognition

Bank has formulated a scheme to recognize and motivate high achievers among thebranches by awarding the honour of MD's Club, CGM's Club and GM's Club membership to topperforming branches. Fourteen branches were selected for membership of MD's Club/CGM'sClub/GM's Club for the year 2012-13 and they were felicitated atafunction atThiruvananthapuram.

15.7 Human Resources Management Solutions(HRMS)

• Project HRMS

Project HRMS was initially set up by State Bank of India to automate, integrate andcentralize HR processes of the Bank, Thereafter, in addition to SBI, all the AssociateBanks have also joined HRMS platform. Thus HRMS has not only become a single and centralsource of information tool for the decision takers and policy makers enabling efficient HRManagement but also a tool for employee satisfaction through transparent and time boundmonetary transactions relating to emoluments and perks payment through uniforminterpretation of the Bank's instructions as well as other services. Bank has rolled outthe Project HRMS from 01.04.2012 and at present, the employees can make use of thefollowing services through HRMS Portal viz. Centralized salary processing & payment,Centralised payment of all kind of employee reimbursements, Automation of PerformanceAppraisal & Promotion Appraisal Forms. Bank also plan to add the following services innear future through HRMS viz. Automation of Gratuity Payments & Centralized Payment ofterminal benefit settlements, Automation of Travelling Bills, Automation of New PensionScheme, Automation of Scholarship payments, Automation of Leave Encashment/ LFCEncashment, Automation of Payment of fees / honorarium for approved exams, Automation ofPayment of various Rewards & Recognition to staff, Automation of leave and attendance,Automation of Medical bill approval & payment. Bank also derives the followingbenefits out of automation of HR viz, consolidated & detailed data availableimmediately for informed decision making, saving of man hours which can be utilised forother areas like marketing, recovery etc., helpful for employee identification andprevention of impersonation/fraud etc., besides resulting the cost savings to the Bank,reduction of paperwork, telephone/fax.

15.8 Staff-SC/STCell

The Bank has designated an Officer of General Manager rank as Chief Liaison Officer forSC/ST The Bank also has a separate SC/ST Cell headed by a Manager at Head Office andassisted by Liaison Officers at the seven Zonal Offices and two Regional Offices (Mumbaiand New Delhi) to protect the interests of SC/ST employees. The Cell at Head Officearranges periodic meetings of the representatives of the SBT SCs/STs Staff WelfareAssociation with the Top Management to listen to and redress their grievances. The Bankhas already provided a well-furnished office with telephone and computer to theAssociation. Check- off facility for payment of subscription by the members to theAssociation also has been provided. The Cell is also conducting meetings of Liaisonofficers of all the Zones/ Regional Offices at quarterly intervals. Such meetings arepresided over by the Chief Liaison Officer to discuss issues, if any, pertaining torespective area. The General Manager (H R) also invariably participates in the meeting.The action points which emerge in such meetings are meticulously followed upto redress theissues.

The other tasks undertaken by the Cell are:

• Ensuring compliance, by the Bank, with orders and instructions pertaining to thereservation in favour of SCs/STs in the matter of recruitment/promotions and other servicebenefits such as relaxations/concessions admissible to them.

• Ensuringthe placing of an Annual Review Report on the progress of implementationof reservation policy for SC/ST before the Board of Directors.

• Ensuring that while making reference to the Ministry of Finance (BankingDivision) regarding de-reservation of reserved vacancies, the de-reservation proposal hasbeen made with the full knowledge and concurrence of the Chief Liaison Officer.

• Ensuring that the Bank takes appropriate steps to provide all help andco-operation to the National Commission for SCs and National Commission for STs.

• Ensuring that GOI's directions are followed in respect of DPCs/ SelectionCommittees pertaining to SC/ST/MC members.

• Ensuring proper implementation of the Reservation Policy by conducting annualinspection of the rosters maintained in the organization.

• Acting as Liaison Office between Bank and the Ministry of Finance, Govt. ofIndia and National Commission for SCs, STs, OBCs and Minority Communities for supply ofinformation, answering questions and queries and clearing doubts in regard to matterscovered by the reservation orders.

• Cases of suspicious caste certificate are referred to a three member ScrutinyCommittee constituted by the respective State Governments and followed up closely. Inverified cases, actions as recommended by the Scrutiny Committee are taken.

• Reservation policy has been implemented in the Bank for Scheduled Castes andScheduled Tribes from 1972 in direct recruitment and from 1978 in promotion.

• Reservation at 15% for SCs and 7.5% for STs is provided in direct recruitmentfor Officers cadre. In direct recruitment to Clerical and Sub-Ordinate staff cadrespercentages of reservation as applicable in each State is provided for SCs and STsrespectively. In promotion from Clerical cadre to Officers cadre 15% and 7.5% of thevacancies are reserved for SCs and STs. Likewise in promotion from subordinate to clericalcadre 15% and 7.50% of the vacancies for SCs and STs respectively are provided whereelement of direct recruitment does not exceed 75%.

The staff data as on 31.03.2013 before updating Retirements

Category Total SC % ST %
Officers 5093 649 12.74 145 2.85
Clerical 5351 701 13.10 160 2.99
Sub-staff 1706 410 4.03 77 4.51
Maintan-Staff 375 1 14 30.40 5 1.33
Total 12525 1874 14.96 387 3.09

Post based roster which shows a clear picture of implementation of reservation rules ismaintained in the Bank, in accordance with the Government of India guidelines. Suchrosters are being verified by the Chief Liaison Of Acer for SCs and STs annually.

Whenever backlog of reserved vacancies for SCs and STs occur, such vacancies are filledthrough special recruitment. Last such special recruitment was conducted during 2009-2010wherein 34 SC candidates and 12 ST candidates were recruited in Officers cadre. As at theend of March 2013, the position of backlog is as follows.

Backlog under Direct Recruitment to:

Category

SI.No Cadre SC ST
1 Officer - 38
2 Clerical 16 19
3 Maintenance Staff 21 3

Backlog under Promotion from:

Category

SI.No Cadre SC ST
1 Clerical to Officer cadre 15 71
2 Subordinate to Clerical cadre 17 15

Backlog of ST vacancies under promotion from clerical cadre to Officer Cadre is due tonon-availability of candidates in feeder cadre. The following concessions/relaxations aremade available to employees in the SC/ST category.

• Relaxation upto 5% and 10% of the required qualifying marks in written test andinterview respectively is allowed in direct recruitment to subordinate and Clerical cadre.

• Relaxation upto 5% and 10% of the required qualifying marks in written test andinterview respectively is allowed in promotion from clerical cadre to Junior ManagementGrade Scale-1 under Group-Aand Group-B channels.

• 5 years relaxation in upper age limit is allowed to candidates belonging to Scsand STs in recruitment to subordinate, clerical and Officer Cadres.

• 5 years relaxation in upper age limit is allowed to candidates belonging to SCsand STs in promotion from Clerical cadre to Officer Cadre under Group- B channel.

In recruitment, the total number of vacancies and number of vacancies available for SCsand STs are advertised extensively in newspapers.

Pre-examination trainings were conducted at Thiruvananthapuram and Ernakulam Centres,for SC & ST candidates who applied for recruitment as Clerks in Associate Banks ofState Bank of India. Around 1,098 candidates (including candidates belonging to MC and OBCcategories) attended the training. Similarly pre-promotion training to SC/ST employeeswere also conducted for promotion from Subordinate cadre to clerical (SWO-A) and clericalto Officers under Group A, Band D channels.

15.9 Activities of Minority Communities [MC]/Other Backward Communities [OBC]/Personswith Disability [PWD] /Ex-Servicemen [EX-SER] Cell

The Bank has designated an Officer of General Manager rank as Chief Liaison Officer forOBC Cell and PWD/Ex-Servicemen Cell. The Bank has also designated an Officer of DeputyGeneral Manager rank as Chief Liaison Officer for Minority Community. MC/OBC/PWD &Ex-Ser Cell assisted by Liaison Officers at Head Office, Seven Zonal offices and twoRegional Offices are functioning to protect the interests of the employees belonging tothe respective sections.

The Cell ensures:

• Compliance by the Bank with orders and instructions pertaining to thereservation of vacancies in favour of Ex-Servicemen and Physically handicapped in thematter of recruitment/ promotions and other service benefits.

• Compliance by the Bank with orders and instructions pertaining to thereservation of vacancies in favour of MC/OBC in the matter of recruitment and otherservice benefits.

• The Bank takes appropriate steps to provide all help and cooperation to thebackward classes Development Corporation.

15.10 Industrial Relations

• The time tested mechanism of bilateral negotiations at various levels of theorganisation with the Employees' Union and the Officers' Association through periodicalstructured meetings and redressal of the issues ensured harmonious and cordial industrialrelations in the Bank throughout the year.

• Bipartite meetings were held with Employees' Union and

Officers' Association at Bank level. Our Bank attended the Bipartite meeting held withState Sector Bank Employees Association (SSBEA) on 21 /06/2012 at Chandigarh. StaffWelfare Committee and Sub committee meetings of SWF were held 7 times during the year

• At the industry level, there were two days strike by United Forum of Bank Unionson 22nd and 23 rd August 2012, one day strike by AIBEA and BEFI on 20th December, 2012 andtwo days strike by United Forum of Bank Unions on 20th and 21st February, 2013.

• New Grievance Redressal System introduced in our Bank on 24.12.2012, whichprovides for faster disposal of grievances of the Staff members at all levels.

• The new site for booking holiday home has become operational from 01/02/2013onwards which makes online booking smooth and efficient.

During the period 01 /04/2012-31 /03/2013 the following activities under various staffwelfare schemes took place:

• The scheme for reimbursement of annual health checkup for retired employees(i.e. Rs. 2000/- per financial year) has been extended to cover the spouse of the deceasedretirees also. 3,801 applications of retired staff/spouse of deceased staff were paidunder the scheme during the financial year.

• Under the scheme for reimbursement of health check up of spouse of staff members(i.e., Rs. l,400/- per financial year) 3,948 applications were received during thefinancial year.

• Super Suraksha Insurance Scheme for employees was renewed with the life cover ofRs. 5.00 lakh per employee. 32 claims were settled under this scheme during this financialyear.

• At present 22 holiday homes are functioning at various centers.

• Scholarships and tuition fees for wards of staff members amounting to Rs. 129.99lakh were disbursed.

• Under the outpatient scheme reimbursement amounting to Rs. 107.72 lakhs was paidduring this financial year.

• 28 applications were paid under the scheme of financial assistance for expensesincurred by Staff Members for physically / mentally challenged / retarded /spasticdependant wards.

• 36 claims amounting to Rs. 48.83 lakhs were paid under the part payment ofoutstanding in loan accounts in the event of death of an employee while in service'scheme.

• 145 claims were paid under the funeral expenses scheme during this financialyear.

• Bank Fest was conducted at Thiruvananthapuram from 04th January 2013 to 6thJanuary 2013. More than 500 staff members participated from all the zones.

16. Legal Services

The Law Department of the Bank has, during the course of time, developed into anoperational unit by involving itself in various operational matters including legalactions by and against the bank.

Law officers are placed at various centers, and they play a significant role in thebusiness of the bank. The Law Department performs multifarious duties such as preparationof general and case-specific documents, vetting and scrutiny of loan documents, givingadvice on legal issues etc. The Law Department plays an important role in the matter ofrecovery. Suits and DRT applications for recovery against the defaulters are arranged andfollowed up by the Law Officers. They assist the branches and other operationalfunctionaries in respect of actions initiated for enforcement of security under theSecuritisation and Reconstruction of Financial Assets and Enforcement of Security InterestAct, 2002. Various cases, petitions and claims against the Bank filed in various HighCourts, Tribunals, Civil Courts, Consumer Fora, Ombudsman, Labour Courts and otherauthorities are defended under the advice and guidance of the Law Department. The LawOfficers advise the Central Public Information Officers and the Appellate Authorities onthe applications and appeals filed under the Right to Information Act, 2005. The LawDepartment is also involved in the training of the staff on topics involving law andpractice of banking. The Law Officers are regularly and continuously handling varied legalmatters and offering legal advice and suggestions to the business units and developmental/operational functionaries and take steps to legally protect the bank and safeguard itsinterest in all respects.

17. Public Relations and Publicity

The Public Relations Department shoulders the responsibility of disseminating variousinformation projecting Banks image among public and government departments. During theyear under review, the department maintained close rapport with the Governmentdepartments, media, commercial and social organizations and the general public.

Extensive publicity was given through News papers, Hoardings, sponsored programmes,Visual and Electronic Media, to popularize bank's products. The marketing efforts at theBranches, supported by an intensive advertisement campaign all through the year atcorporate level yielded impressive results.

Duringthe year the Bank was one of the main sponsors of Tourism Week Celebrations ofGovernment of Kerala, Nehru Trophy Boat Race, Mumbai Pooram, Pravasi Bharathiya Divas,Viswa Malayala Mahotsavam, G.V Raja All India Football tournament, NORKA Global meet etc.Programmes conducted by Cll, NIPM, MPEDA, Costal Area Development Corporation, SIDCO, IISTKerala State Sports Council, Rotary Club, District Industries Centre, Kerala Police, ASIANET Malayala Manorama, Mathrubhoomi etc. were also supported by the Bank.

The prestigious 'SBT Prathiba Samman' award was instituted this year to honour threeeminent Keralftes who have rendered outstanding contribution for the welfare of thesociety, regionally, nationally, and internationally. The award contains a Gold Sovereign,a trophy, and a citation. The first Prathiba Samman Award was conferred to H.E Most RevDr. Alexander Marthoma

Metropolitan in the regional level and Dr. E Sreedharan in the national level.

With an intention to impart competitive knowledge, and to improve our publicity mileageamong the youth of Kerala, we have resumed the 'Intel Teen Quiz Programme' this year.Fifty colleges from various parts of the state were participated in the programme.Preliminary rounds were conducted at the Zonal Level, and Semi Final and Final wasconducted by Head office. DD Kerala telecasted the Final and semi final in 3 episodes.

We added many new hoardings at vantage points in Ernakulam to increase the exposure ofbrand SBT in the commercial capital of Kerala. We have sponsored the installation of aDigital Signage Board at Vyttila Mobility Hub, Ernakulam, which displays ouradvertisements 20 times per day. Apart from advertisement on Hoardings, Bank hasadvertised through direction boards at Sabarimala Route, Rota sign Boards at Kozhikode,Kannur, Trichur, Palakkad Railway stations and advertisement at Thiruvananthapuram andKozhikode Airport. The display at Thiruvananthapuram railway station has become a landmarkin Thiruvananthapuram city

The Bank as a responsible corporate citizen sponsors and maintains the PoojappuraTraffic Island Park, which is widely used by the residents of the city as a resting place.

SBT won the second prize under PSU for the float presented in connection with the Onamcelebration conducted by Department ofTourism, Government of Kerala.

The Bank's Calendar for 2013 with the theme 'The taste of Kerala, the toast of theworld' offers the essence and flavour of Kerala Cuisine, were widely acclaimed by thepublic and the Media. Bank's internal house magazine "Mythri" still retains itseminence among other such publications.

The Bank opened pilgrim service centers at Pampa and Sannidhanam to cater to specificbanking requirements of the pilgrims to Sabarimala, which generated tremendous publicityand goodwill for the Bank. We have also sponsored the Sabarimala Police web portal ofVirtual Queue' which was utilized by 18 lakh pilgrims this year.

18. Progressive Use of Hindi

The Bank complied with the provisions relating to the Official Languages Act, rules andinstructions, directives of Government of India and Reserve Bank of India. As per theguidelines of the Reserve Bank of India, the Bank has introduced SBT Rajabhasha Shield forZonal / Regional Offices situated at linguistic regions A, B and C. During the year,various competitions were held for school level students in Hindi. Hindi Fortnight / HindiDay was also celebrated in Head Office, Zonal Offices and Regional Offices. HindiWorkshops were conducted at our Zonal Offices. Annual publication 'Swathi', the Bank'sHindi Magazine and 'Rajabhasha Sahayika' and "Phrases of official noting" werealso published. Our Zonal Offices at Ernakulam, Kozhikode and Thiruvananthapuram,published Hindi Magazines during the year. Hindi workshops and functional Hindi programmeswere conducted for the benefit of staff members, to increase their knowledge of functionalHindi, Letters received in Hindi, were replied to in Hindi. The Bank has sponsored"SBT RG. Vasudev Puraskar" for the Hindi Writers in the State of Kerala and theAward was distributed to the noted Hindi Writerand Padmasreeawardee Dr. Vellayani Arjunanof Kerala, in a function held at Thiruvananthapuram. "SBT Hindi SahityaPuraskar" were also distributed to Hindi Writers Dr, Anoopa krishnan and Dr.Suvamalatha M.C. of Kerala at Thiruvananthapuram.

The Bank participated in the State Level Official Language Exhibition instituted byKerala Hindi Prachar Sabha and won First Prize for implementation of Official LanguagePolicy. Our Bank secured First Prize instituted by the Town Official LanguageImplementation Committee, Thiruvananthapuram for the implementation of Official LanguagePolicy in Public Sector Banks situated in Thiruvananthapuram. The Zonal Office, Ernakulam,Kozhikode and Thiruvananthapuram secured shields from their respective Town OfficialLanguage Implementation Committee for the implementation of Official Language Policy. TheErnakulam Zonal Office received the Award for the implementation of Official LanguagePolicy, from the Govt of India, Regional Implementation Office (South-West) Ministry ofHome Affairs, Dept., of Official Language, Cochin.

19. Malayala-Sammelanam

The SBT Malayala-Sammelanam was conducted under the auspices of the Bank and MalayalamSahitya Awards, for the best works in Malayalam Poetry, Short Story, Human Interest Story,Children's Literature and Literary Criticism were distributed in a glittering function atThiruvananthapuram. Dr. George Onakkur, noted Malayalam writer was honoured with SBT"Suvarna Mudra" Puraskaram.

20. Branch Network

Bank created a new record by opening 134 new branches during the year and crossed themilestone number of 1000. In this financial year Bank has achieved two" 1000"landmarks. One with the opening of 1000th Office (Gold Point branch Palakkad) and thesecond, with the proud dedication of its 1000th branch (NRI, Kottakkal) on the lastworking day of this fiscal year. As at the end of 31st March 2013 the total number ofbranches has touched 1013, by setting its foot prints in 15 states and 3 UnionTerritories, It has 13 extension counters.

The number of branches in Kerala increased from 676 branches in March, 2012 to 758branches as at the end of 31st March, 2013, The Kollam Regional Office was upgraded as aZonal Office during this year and 20 branches/offices were shifted to new premises.

The Bank has 38 specialised Personal Segment branches, 8 NRI branches, 4 Treasurybranches, 10 Service branches, 13 CBG branches, 7 CNW branches, 21 Gold Point branches, 10Specialised Agricultural Development Branches, 5 Specialized SME branches, 2 AssetRecovery Management Branches, I Micro Credit branch, I Specialised branch for womenentrepreneur, I MICR branch, I Branch for State Government Transactions and IInternational Service Branch. Underthe BPR initiatives, Bank has 9 RASMECCCs, 2RCPC, ICPPC, 6SARC, 2TFCPCs, I LCPC and 13 CACs. The Bank is having 2 Exchange Bureaus, one atCochin and another at Kozhikode in addition to the above branches/offices, The Bank holdsauthorization for opening 95 branches (including 58 centres under General Permission).

21. Premises

• Construction of Staff Learning centre at Ernakulam

Contract for construction of a Staff Learning Centre (Bank's Second Learning Centre) atErnakulam in the plot owned by our Bank has been awarded & the work is in progress.The total area is 54,270 sq.ft. which includes Academic block (2 training channels),Hostel block for 70 participants & Suites for Guests, Kitchen & Dining Block &Chief Instructor's quarters. The work is expected to be completed by 2015.

• Construction of building at Idukki & Adoor

Construction of Idukki Branch premises & quarters and Adoor branch building havebeen initiated.

• Purchase of flat at New Delhi

The Bank was successful in purchasing a flat in the Commonwealth Games Village at NewDelhi, in the auction conducted by Delhi Development Authority (DDA).

• Construction of 4 RSETIs (Rural Self employment Training Institute)

Construction of RSFFIs at Alappuzha, Wayanad, and Kottayam & Pathanamthitta hasbeen initiated & the work is expected to be complete by 2014.

• Purchase of Land with building at Kowdiar

Bank purchased 18 cents of land with a building at Kowdiar for housing our KowdiarBranch.

• Allotment of 3 Acres at Techno park, Thiruvananthapuram

3 Acres of land has been allotted by Techno park, Thiruvananthapuram in its Phase IIIDevelopment at Kulathoor, Thiruvananthapuram. The Plot is intended to house the proposedcentralised IT Hub of the Bank.

22. Community Services Banking

Community Service Banking activities in the Bank are undertaken mainly by SocialCircles. Social Circle is a concept unique to SBT It is a voluntary organization formed bystaff members who address themselves to the requirements of their area of operation. Bankis having 622 social circles functioning at various branches and administrative offices,spread all over India. Community Services Banking Department at Head Office spearheads theactivities of the Circles.

Major activities undertaken by the Bank during the year

• Considering the significance of pure drinking water in the lives of students, wedonated Water purifiers to 1600 Govt. /Aided schools across the country through ourBranches.

• We also donated 5 Ceiling Fans each to needy schools in the country through our1000 branches/Offices

Other activities include

• Financial assistance for welfare of student community including Scholarships toHIV infected children

• Health Care activities like Blood donation camps, medical camps, providingequipments, medicines to hospitals and primary health centres, bed sheets and food packetsto patients.

• Support to physically, mentally and visually disabled communities includingdistribution of Braille watches to educated blind women

• Sponsored cultural programmes and Onam celebrations at prisons

• Co-ordinated blood donation by staff members to patients in emergencies

• Donated Vehicles to Palliative Care Units

• Donated a Vehicle to Cheshire Homes India for their Livelihood Resource Centre

• Donated Laptop and LCD projector to Malabar Cancer Centre Thalassery to organisecancer awareness classes for the public

• Provided a Bio gas plant and steam cooking unit to Saigramam at Thonnakkal

23. Sports and Games

During the period under review Bank's Football and Cricket teams won many matchesTournaments they played and brought laurels and glory to the Bank and also became aninstrument to get wide range media coverage for the Bank throughout the country.

• Cricket "A" Team

The Bank's Cricket A team has participated in various All India/All Kerala tournaments.Out of the 12 tournaments played Bank's team won 7 and became runner up in another 3 andlost in semi final in another 2. It is pertinent to note that during the year Bank's teamdefeated major teams like Reliance India, IOB- Chennai, BSNL, RCF Mumbai, and SouthernRailways. Bank's team could also defeat teams having international players like Shri.Irfan Pathan, Shri. Parthiv Patel, Shri. Abhisehk Nayar and other IPL players. During theyear the team won All Kerala Coromandal Cement Trophy, Dr. M.S. Nair Cricket Trophy, Capt.Jerry Prem Raj Memorial Tournament, Balan Pandit Tournament, KRL Tournament held in April2012, Mini Muthoot Tournament and Muthoot Pappachan Memorial T/20 tournament and becamerunner - up in Celestial Cup, KRL Tournament March 2013, All India Bharamathi Tournament.As recognition on the performance of the team 8 of the bank's players were selected by theKerala State team to represent the State in the Ranji Trophy and four others in U-25 andU-22 Kerala State Teams. Bank's Cricket B team participated in the Trivandrum DistrictMandatory league matches and won many matches.

Football Team

Bank's Senior Football team participated in 5 tournaments and won 3 and becamerunner-up in 2. The team won the Trivandrum District Super Division League, All India GVRaja Tournament, and the All India Bihar Cup held at Patna and became runner-up in the AllIndia Public Sector Football Tournament, held at Delhi and Kerala State Club Championshipheld at Malappuram. Bank's seven players participated in the Santhosh Trophy representingthe Kerala State Team during the period and team reached final and became runner up.Shri.Sarath BT Shri. Sumesh, Shri. Jean Christian, Shri. Sajith, Shri. Usman, Shri.Noufal, Shri. Aslam A.G, Shri. Shibin Lai, and Shri. Johnson represented the Kerala Statein the Santhosh Trophy. Bank's Junior Football Team, consisting of school/college goingchildren reached second best position in the Trivandrum District "B" divisionleague matches and also became the runner up in the All India Abdul Kalam Azad MemorialFootball Tournament held at Kayal Patnam, Tamilnadu.

24. Changes in the Board of Directors

During the course of the financial year 2012-13, the following changes have occurred inthe Board of Directors of the Bank.

(i) The Tenure of Shri. Gyan Chand Pipara appointed under clause (d) of sub-section (I)of Section 25 of the SBI (Subsidiary Banks) Act, 1959 ended on 14th May 2012.

(ii) Shri. Pradip Kumar Sanyal, Director appointed under Clause (c) of sub-section (I)of Section 25 of the State Bank of India (Subsidiary Banks) Act 1959 with effect from 13thJune 2012 in place of Shri. B Ramesh Babu, Director.

(iii) Shri. Jitendar Kumar Mehan, Director appointed under Clause (e) of sub-section(I) of Section 25 of the State Bank of India (Subsidiary Banks) Act 1959 with effect from20th July 2012 in place of Shri. PVinayagam, Director

(iv) Shri. Rajeev Nandan Mehra, Director appointed under Clause (c) of sub-section (I)of Section 25 of the State Bank of India (Subsidiary Banks) Act 1959 with effect from 1stDecember 2012 in place of Shri. A K Deb, Director.

(v) Shri. Shyamal Acharya, Director appointed under Clause (c) of sub-section (I) ofSection 25 of the State Bankof lndia(Subsidiary Banks) Act 1959 resigned from Board on29th November 2012.

The Board of Directors welcomes Shri Rajeev Nandan Mehra, Shri. Pradip Kumar Sanyal,and Shri. Jitendar Kumar Mehan as Directors of the Bank.

The Board of Directors place on record their appreciation and thanks for the valuableservices rendered by Shri. Shyamal Acharya, Shri. A K Deb, Shri. B Ramesh Babu, Shri. PVinayagam and Shri. Gyan Chand Pipara during their tenure as Directors of the Bank.

25. Statutory Audit

M/s Jagdish Chand & Co, New Delhi, M/s B. V Rao & Co, Visakhapatnam, M/sSridhar & Co, Thiruvananthapuram, M/s Abraham & Jose, Thrissur, M/s G, K. Rao& Co., Hyderabad, M/s R.G.N Price & Co., Chennai were appointed as StatutoryAuditors of the Bank for the year 2012-13 by State Bank of India, with the approval of theReserve Bank of India. The Board of Directors sincerely appreciates the valuablesuggestions offered and the excellent support and cooperation extended by the StatutoryAuditors for the completion of the auditwell in time.

26. Acknowledgements

The Board of Directors gratefully acknowledge the valuable advice and support extendedby the Ministry of Finance, Government of India, Reserve Bank of India, IndianBanks'Association, State Bank of India and the cooperation and support extended by theSecurities and Exchange Board of India, Financial Institutions, Stock exchanges andCorrespondents. The Board also wishes to place on record its sincere appreciation for theexcellent support, goodwill and patronage received from the esteemed customers andshareholders, the support and cooperation extended and contributions made by the membersof staff - award and supervising. The Board also places on record its appreciation for thecontribution made by the Employees' Union and Officers' Association.

By Order of the Board.

P NANDAKUMARAN

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:

Arudhati Bhattacharya , Chairperson  

J Sadakkadulla , Nominee (RBI)  

C N Venugopalan , Non-official Director  

C Rajkumar , Director (Officer Employee)  


Company Head Office / Quarters:
Poojappura P O,
,
Thiruvananthapuram,
Kerala-695012
Phone : 91-471-2359975/2351244 (10 Lines)
Fax : 91-471-2351137/2351861
E-mail : dgmfa@sbt.co.in
Web : http://www.statebankoftravancore.com
Registrars:
Integrated Enterprises (I) Ltd
Kences Tower
2nd Floor No 1
Ramakrishna Street
Chennai - 600 017

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