The Board is pleased to present the Banks Directors Report along with theAudited Balance Sheet as at 31st March 2014 and the Profit & Loss Account statementfor the financial year ended 31st March 2014.
MANAGEMENT DISCUSSION AND ANALYSIS
Macro Economic Scenario Global Perspective
Despite positive signs of recovery, global growth appears to be on a sluggish trail asmany of the emerging and developing economies are still struggling to overcome theirindustrial slowdown. The advanced economies are gradually strengthening, but the growth inemerging market economies are moderated due to weak investment outlook and tighter globalfinancial conditions. Some of the emerging market economies such as Brazil, Indonesia, andIndia are confronting high inflation and their currencies have also come under severepressure.
The growing uncertainty in terms of, prolonged political transitions in MENAP (MiddleEast, North America, Afghanistan and Pakistan), weak external environment, banking sectorfragilities, new policy challenges, US tapering of its quantitative easing measures andpolicy spillovers in major economies are some of the factors which have led to downsiderisks to global growth prospects. Besides, there is a risk of further bouts of volatilityin capital flows. For some economies, there is severe balance of payments disruption. TheEuro area growth is still lackluster owing to a pervasive demand slump.
As per the data published by IMFs World Economic Outlook in Jan. 2014, global GDPgrew by 3.0% in 2013 as against 3.1 per cent registered in 2012. United States GDPgrew by 1.9% in 2013 as against 2.8% in 2012. UK registered a buoyant growth of 1.7% in2013 as against 0.3% in 2012. Growth in Emerging Market and Developing Economies (EMDEs)dropped from 4.9 per cent in 2012 to 4.7 per cent in 2013, advanced economy declined from1.4% in 2012 to 1.3% in 2013. The Euro area showed a negative growth of 0.4% in 2013.
The recession of world economy has also been felt on the domestic economy as Indiacould not keep itself isolated from the aftermath impact of global meltdown which isevident by persistence in inflation, falling growth, weaker corporate balance sheet,deteriorating asset quality of the banks, fiscal imbalances and external sectorvulnerabilities. The sluggishness of manufacturing sector which has spilled over to othersectors of the economy is also taking a toll on the growth of usually resilient servicesector.
Though the recent policy reforms undertaken by Government of India and Reserve Bank ofIndia have contributed to some extent in arresting the downturn, the visible signs ofimprovements in economic conditions are expected to be seen in the year 2014-15.
The measures which have been taken to remove constraints facing the infrastructuresector will be crucial for growth revival. The recent announcement of tapering by US Fedby $ 10 billion may also have some impact on the $ - Rupee exchange rate. However RBI hastaken steps to avert the volatility.
Against this backdrop, the countrys GDP grew by 4.7% in 2013-14 (Q3, FY14)as against 4.5% registered in 2012-13.
The growth in agriculture, industry and services was placed at 3.6%, (-) 0.7% and 7.6%respectively as against 1.4%, 1.0% and 7.0% in 2012-13.
Overall growth in the Index of Industrial Production (IIP) was (-) 0.1 per cent duringApril-February 2013-14 as compared to 0.9 per cent in April- February 2012-13.
The money supply stood at Rs 95130.5 billion as at March 21, 2014 registering a y-o-ygrowth of 13.5 per cent as compared to 13.8 per cent in the corresponding period of theprevious year. Net foreign exchange assets (NFA) of Banking Sector grew by 15.3 per centy-o-y to Rs 18909.2 billion as at March 21, 2014 as compared to an increase of 6.9 percent on the corresponding period of the last year.
The average WPI inflation rate for last 12 months (April 2013 to March 2014) was 5.93per cent as compared to 7.35 per cent during corresponding period in 2012-13. The allIndia CPI inflation (combined) has decreased from 10.39 per cent in March 2013 to 8.31 percent in March 2014.
The aggregate deposits with Scheduled Commercial Banks (SCBs) stood at Rs 77394 billionas at March 21, 2014 registering a y-o-y growth of 14.6 per cent as compared to 14.2 percent during the corresponding period of the previous year.
The bank credit with Scheduled Commercial Banks (SCBs) stood at Rs 60131 billion as atMarch 21, 2014 registering a y-o-y growth of 14.3 per cent as compared to 14.1 per centduring the corresponding period of the previous year.
Scheduled Commercial Banks (SCBs) Investment in Govt. and other approvedsecurities stood at Rs 22217 billion as at March 21, 2014 registering a y-o-y growth of10.7 per cent.
External Sector Growth
The cumulative value of Exports for the period April-March 2013-14, in US dollar termswas USD 312355.45 million as against USD 300400.69 million for April-March 2012-13registering a y-o-y growth of 3.98%. Whereas the cumulative value of Imports for theperiod April-March 2013-14, in US dollar terms was USD 450949.04 million as against USD490736.66 million for April-March 2012-13 registering a decline of 8.11% on y-o-y basis.
Oil imports during April-March 2013-14 were valued at USD 167624.6 million which was2.2 per cent higher than USD 164040.6 million during April-March 2012-13. While non-oilimports during April-March 2013-14 were valued at USD 283324.4 million which was 13.3 percent lower than USD 326696.1 million during April-March 2012-13.
The trade deficit, in absolute terms, during April-March 2013-14 was estimated at USD138593.59 million which was lower than the deficit of USD 190335.97 million recordedduring April-March 2012-13.
Foreign exchange reserves stood at USD 303.67 billion as at March 28, 2014 as comparedto USD 292.64 billion as at March 29, 2013. Foreign Currency Assets stood at USD 276.40billion as at March 28, 2014 as compared to USD 259.72 billion as at March 29, 2013.
The rupee depreciated by 12.1 per cent against US dollar, 23.6 per cent against Poundsterling, 3.8 per cent against the Japanese yen and 19.5 per cent against euro duringMarch 2014 over March 2013.
NEW VISION & MISSION STATEMENTS
Originating from a small coastal village Udupi", Bank has traversed a longjourney digging its roots deeper and deeper and spreading its branches farther & widerto be known as a Large Public Sector Bank with business of over Rs 3.89 lakh crore.
To continue its tradition forward, Bank has come up with a new Vision & MissionStatement for creating a long-term destination and values for the organisation,understanding the trends and forces that will shape our business in the future.
Our Vision & Mission Statement, thus, serves as a guiding force in each and everyaspects of our business providing us detailed roadmap in terms of what to doand how to do for reaching our preferred destination.
"Be a leading financially strong universal bank, creating value forstakeholders through customer centric, technology driven and employee friendlyapproach".
1. Be a leading provider of banking solutions providing range of financialservices to all strata of society
a) Financial Supermarket with innovative, tailor made & flexible Bank products
b) Among top 5 PSBs in India on financial metrics with significant internationalpresence
c) Be a socially responsible Bank and leader in financial inclusion
2. Be a highly recognized and visible brand, known for its customer service
a) Passion to deliver excellent service at front desk with full product knowledge
b) Single point of contact solution for all customer issues
c) Quick and efficient grievances redressal
3 . Be the most preferred place to work where employees feel proud andmotivated
a) Young, energetic and motivated workforce with right person at the right place
b) Best in class HR initiatives including recruitment, training, talent management,succession planning etc.,
c) Well defined and transparent HR Policy, robust HRM for implementation of allinitiatives.
4. Have state of the art technology & infrastructure creating delightamong all stakeholders a) State of the art network infrastructure with zero downtime.b) Paperless banking environment, most user friendly digital channels c) Excellentinfrastructure and ambience at branches
5. To Deliver strong financial and operational performance
a) Business size of Rs 10 lac crores, 5000 branches, 8000
ATMs and Net NPA < 1%
b) Operating profit of > Rs 10000 crores, Consistently high dividend payout.
CORPORATE STRATEGY FOR 2013-14
In order to deliver consistently superior performance by overcoming businesschallenges, understanding industry trends and to pursue its corporate goal with morevigour and strength, Bank had opted "POTENTIAL" as its corporate strategyfor the financial year 2013-14 which signifies as under:
Pursue Business Goals
Nurture Sales Culture
Turn Around Time Reduction
I nnovate to Compete
Articulate Positive Attitude
PERFORMANCE HIGHLIGHTS OF THE BANK DURING THE FINANCIAL YEAR 2013-14
Capital & Reserves
Banks authorized share capital stood at Rs 3000 crore and the paid-up capital Rs624.58 crore (624584631 equity shares of Rs 10 each) during the financial year ended at31.03.2014.
The Reserves and Surplus of the Bank increased from Rs 9939.39 crore in 2012-13 to Rs11219.61crore in 2013-14 registering a y-o-y growth of 12.88 per cent over the previousyear.
Tangible Net Worth of the Bank (excluding revaluation reserves) improved significantlyfrom Rs 9296 crore as at March 31, 2013 to Rs 10663 crore as at March 31, 2014.
The Board of Directors of the Bank has proposed a Final Dividend of 30 per cent for theyear ended March 2014. This is in addition to an Interim Dividend of 25 per cent paid inJanuary 2014. For the whole year, the Total Dividend is 55%. The Total outgo in the formof dividend (inclusive of dividend tax) during the year 2013-14 was Rs 401.91crore asagainst Rs 471.85 crore of the previous year.
The global business of the Bank grew by 16.07 per cent from Rs 334779 crore in 2012-13to Rs 388584 crore in 2013-14, whereas, Banks domestic business rose by 13.51 percent from Rs 291337 crore in 2012-13 to Rs 330701 crore in 2013-14.
Global deposits of the Bank grew by 14.56 per cent from Rs 185356 crore in 2012-13 toRs 212343 crore in 2013-14. Domestic deposits grew by 11.92 per cent from Rs 167055 crorein 2012-13 to Rs 186966 crore in 2013-14.
Domestic CASA deposits of the Bank increased from Rs 51926 crore in 2012-13 to Rs 55911crore in 2013-14, registering a growth of 7.67 per cent. Percentage of domestic CASA todomestic deposits stood at 29.90 per cent as at 31.03.2014.
The Banks global advances rose from Rs 149423 crore in 2012-13 to Rs 176241 crorein 2013-14 registering a growth of 17.95 per cent. Domestic advances grew by 15.65 percent from Rs 124282 crore in 2012-13 to Rs 143735 crore in 2013-14. The global creditdeposit ratio stood at 83.00 per cent in 2013-14 as compared to 80.61 per cent of the lastyear.
Priority Sector Advances increased from Rs 46437 crore in 2012-13 to Rs 52016 crore in2013-14 forming 43.19 per cent of ANBC as against mandatory level of 40 per cent.
Direct Agriculture Advances increased from Rs 16018 crore in 2012-13 to Rs 18807 crorein 2013-14 forming 15.62 per cent of ANBC as against mandatory level of 13.50 per cent.
MSE Advances increased from Rs 15074 crore in 2012-13 to Rs 18697 crore in 2013-14registering a growth of 24.03 per cent.
MSME Advances increased from Rs 16428 crore in 2012-13 to Rs 19800 crore in 2013-14registering a growth of 20.52 per cent.
The Bank has registered an increase of 3.29 per cent in Operating profit from Rs3449.59 crore in 2012-13 to Rs 3562.95 crore in 2013-14.
Net profit of the Bank declined by 14.62 per cent from Rs 2004.42 crore in 2012-13 toRs 1711.46 crore in 2013-14.
Business per employee of the Bank improved from Rs 12.57 crore as at March 31, 2013 toRs 14.30 crore as at March 31, 2014. Profit per employee stood at Rs 6.83 lakh as at March31, 2014 as compared to Rs 8.11 lakh as at March 31, 2013.
Income & Expenditure
The Banks Total income rose by 9.02 per cent from Rs 18295.05 crore in 2012-13 toRs 19945.21 crore in 2013-14.
The Banks interest income rose by 8.76 per cent from Rs 17120.69 crore in 2012-13to Rs 18620.33 crore in 2013-14.
The non-interest income of the Bank improved by 12.82 per cent from Rs 1174.36 crore in2012-13 to Rs 1324.88 crore in 2013-14.
The Interest expenditure of the Bank increased by 12.12 per cent from Rs 11666.63 crorein 2012-13 to Rs 13080.51 crore in 2013-14.
Operating expenditure of the Bank increased by 3.87 per cent from Rs 3178.83 crore in2012-13 to Rs 3301.75 crore in 2013-14.
Important Financial Ratios
a) The Return on Assets stood at 0.78 per cent in 2013-14 as compared to 1.07 per centin 2012-13.
b) The Banks Net Interest Margin (NIM) stood at 2.79 per cent in 2013-14 ascompared to 3.19 per cent in 2012-13.
c) The yield on advances of the Bank stood at 9.59 per cent in 2013-14 as compared to10.51 per cent in 2012-13.
d) The cost of deposits of the Bank stood at 6.56 per cent in 2013-14 as compared to6.83.per cent in 2012-13.
e) The Earning Per Share (EPS) of the Bank stood at Rs 28.21 in 2013-14 as compared toRs 33.30 in 2012-13.
f) The Book Value per share of the Bank improved from
Rs 175.12 in 2012-13 to Rs 189.63 in 2013-14.
g) Net NPA percentage to net advances stood at 1.56 per cent in 2013-14 as compared to0.76 per cent in 2012-13.
h) Gross NPA percentage to Gross Advances stood at 2.62 per cent in 2013-14 as comparedto 1.99 per cent in 2012-13.
i) NPA provision coverage ratio of the Bank stood at
70.02 per cent as at March 31, 2014 as compared to
83.41per cent as at March 31, 2013.
j) The Capital Adequacy Ratio (CRAR) of the Bank, as per Basel II stood at 12.01 percent in 2013-14 as compared to 12.59 per cent in 2012-13. The Capital Adequacy Ratio(CRAR), as per Basel III stood at 11.41per cent as at 31.03.2014
k) Dividend on equity shares stood at 55 per cent in
2013-14 as compared to 67 per cent in 2012-13.
EXPANSION OF BRANCH NETWORK
During the year the Bank has added 317 brick and mortar branches to its network and theTotal number of branches (including London Branch) stood at 3251 as on 31.03.2014. Theseinclude 78 branches in under banked Districts and 63 branches in minority concentrationDistricts.
Out of the above, 8 branches are opened in the North Eastern Part of India during theyear. Bank opened a branch in Daman and with this Bank has presence in all the States& Union territories of India. Bank also opened Mid corporate branches during the year.Bank opened one all women branch at Makupura, Ajmer. With this the Total number of allwomen branch comes to 4.
As per RBI guidelines, Banks are required to open 25% of the new branches at ruralunbanked tier 5-6 centres. As on 31.3.2014, there is a shortfall of 10. These shortfallswill be made good within the next financial year (2014-15) to comply with RBI guidelines.
The domestic branch network consisted of 1032 rural branches, 856 semi-urban branches,704 urban branches, 658 metro & port town branches. ATMs installed reached to 1946 asat 31.03.2014.
The bank has a customer base of 33.9 million as at March 31, 2014 as against 32 millionat the end of the previous fiscal, registering a growth of 5.62 per cent.
Retail lending continued to be the thrust area of the Bank. Outstanding retail lendingof the Bank reached Rs 20925.92 crore as at March 2014. The outstanding housing loans(direct) increased to Rs 9713.62 Crore, constituting 46.42% of the Total retail lendingportfolio of the Bank. Over the years, the Bank has supported promising student to pursehigher education in India and abroad. The Banks education loan portfolio increasedto Rs 2768.24 crore, constituting 13.23% of the Total retail lending portfolio of theBank. The Bank financed more than 1.16 lakh students as at March 2014.
The Bank took several measures during the year to expand retail credit. Uniform Rate ofInterest at Base Rate was fixed irrespective of the loan amount in respect of bothexisting and new housing loan borrowers. Schemes for payment of service charges to theapproved builders for sourcing housing loan proposals and Four Wheeler Dealers and theirsales executives for sourcing four wheeler loan proposals were launched by the Bank duringthe year. Rate of interest on Gold loans was rationalized and made uniform to bothpriority and non-priority gold loans. Tie-ups with leading car manufacturing companieswere renewed to boost vehicle loan advances. Tie-ups with premier educational institutionswere executed to mobilize education loan proposals. The Bank also took steps to havetie-ups with leading PSUs/MNCs/Govt Departments for extending loans to their employees atconcessional rates of interest. The rates of Interest on vehicles loans and loans forpurchase of consumer durables were slashed down during the year. The processing charges onhousing loans and vehicle loans were also reduced to compete in the market. The rate ofinterest on loans against the rent receivables was also reduced to mobilize business underthis segment. The Bank actively participated in various Exhibitions /Expos on housingloans and education loans, besides holding meets of car dealers and builders during theyear to build brand image of the Bank and to mobilize substantial business.
In order to ensure quality housing loan portfolio, the Bank adopted approvedbuilders route to extend housing loans. The Bank also identified large number ofreputed builders across the country and approved them to boost housing loan portfolio. TheBank has 17 Central Processing Centers (CPCs) for expeditious disposal of housing loanproposals across the country. The Bank also launched incentive schemes to thebranches/regional offices and central processing centers to encourage the staff toredouble their efforts in canvassing new business. The Bank also launched incentive schemeto the branches and regional offices to encourage the staff to mobilize gold loanbusiness.
CORPORATE CREDIT DEPARTMENT
Delegated sanctioning powers of Credit Approval Committee (Tier I) (Committee headed bythe Chairman & Managing Director) has been increased to Rs 400 crore for credit and Rs400 lakh in respect of recovery proposals.
Credit Approval Committee (Tier II) has been constituted headed by Executive Directorat Corporate office to dispose of credit upto Rs 75 crore and recovery involving sacrificeof Rs 75 lakh for speedy disposal of the proposals.
Delegated sanctioning powers of Credit Approval Committee (Tier III) (Committee headedby the General Managers) has been increased to Rs 50 crore for credit and Rs 45 lakh inrespect of recovery proposals.
MID CORPORATE DEPARTMENT
Mid Corporate Department at Corporate office is handling proposals between Rs 35 croreto Rs 100 crore, including Commercial Real Estate, MFIs, Infrastructure, New Businessgroup. 68 branches were designated as Mid Corporate branches across the country, thesebranches are having advances outstanding of Rs 14240 crore as on 31.3.2014.
Bank is planning to open 30 Specialized Mid Corporate branches in key cities of thecountry to have a focused attention to the Mid Corporate Clientele.
Bank is expecting incremental business of Rs 5000 crore from these new branches for2014-15. These Specialized branches will be posted with trained and experienced people upto the cadre of Asst. General Manager and will focus only high value credit growth and noretail business will be entertained.
PROJECT APPRAISAL & SYNDICATION CELL
Project Appraisal Cell has been constituted for preparation/ vetting of TEV study/IMstudy in respect of term loan proposals involving project of Rs 50 crore and above, withBank finance of Rs 25 crore and above. This initiative will reduce the turn around time(TAT) for credit proposals as well as providing such services to our branches at a shortnotice.
A Syndication Cell has been constituted headed by a Dy.General Manager for arrangingloans under syndication. This initiative will increase the fee based income for the Bankand also will help in creating quality high value high yielding assets for the bank andalso for improving the NIM of the Bank.
PRIORITY SECTOR CREDIT
(Amount Rs in crores)
|Parameters ||March-12 ||March-13 ||March-14 |
|Priority Sector ||41383 ||46437 ||52016 |
|Advances || || || |
|Total Agriculture ||17409 ||20156 ||22071 |
|Of which: || || || |
|Direct ||13585 ||16018 ||18807 |
|Indirect ||3824 ||4138 ||3264 |
|Micro & Small ||13360 ||15074 ||18697 |
|Enterprises || || || |
|Other PSA ||10614 ||11207 ||11248 |
|Advances to SC/ST ||3284 ||3712 ||4243 |
|Weaker Section ||11034 ||11918 ||12758 |
|advances || || || |
|Advances to Women ||7344 ||8245 ||8981 |
|Advances to Minority ||6609 ||7601 ||8308 |
|Communities || || || |
Achievement of national Goals (% to ANBC)
|Area/Sector ||Mandatory Requirement ||March- 12 ||March- 13 ||March- 14 |
|Priority Sector || || || || |
|Credit ||40% ||45.21 ||44.62 ||43.19 |
|Of which : || || || || |
|Total Agriculture ||18% ||19.02 ||19.37 ||18.33 |
|Direct Agriculture ||13.5% ||14.84 ||15.39 ||15.62 |
|Weaker section || || || || |
|Advances ||10% ||12.06 ||11.46 ||10.60 |
|Credit to Women ||5% ||8.03 ||7.93 ||7.46 |
|Credit to Minorities || || || || |
|(% to PSA) ||15% ||15.97 ||16.37 ||15.98 |
Syndicate Kisan Credit Card Scheme (SKCC):
The Bank has issued 1.40 lakh Syndicate Kisan Credit Cards during theyear 2013-14. The cumulative number of Syndicate Kisan Credit Cards issued so far up toMarch 2014, excluding the renewals, is 16.25 lakh with a Total credit limitof Rs 11014.11 crore. As at March 2014, Rupay Kisan Cards have been issuedin case of 116903 operative SKCC A/cs.
Under Syndicate Kisan Samrudhi Credit Card Scheme, the Bank has issued 158 cards with acredit limit of Rs 1.97 crore during the year up to March 2014, whichprovides hassle free investment credit in addition to need based short-term credit.
Government Sponsored Schemes:
Outstanding advances to SC/ST beneficiaries under Govt. Sponsored Schemes and DRIScheme as on March 2014
| || || || || |
(Amount Rs in crore)
|Scheme ||Balance outstanding ||Of which SC/ST ||% to SC/ST against Total |
| || || || || ||(For Accounts) |
| ||A/C ||Amt. ||A/C ||Amt. || |
|PMRY ||6446 ||49.66 ||1059 ||7.08 ||16.43 |
|PMEGP ||1941 ||63.95 ||998 ||8.80 ||51.42 |
|SGSY ||8335 ||60.47 ||1820 ||10.13 ||21.84 |
|SJSRY ||6993 ||49.37 ||1203 ||6.06 ||17.20 |
|SRMS ||278 ||1.38 ||124 ||0.45 ||44.60 |
|DRI ||3671 ||8.96 ||1579 ||3.92 ||43.02 |
Advances to Minorities:
The advances to Minorities rose from Rs 7601 crore as at March 2013 to Rs 8308 croreas at March 2014, registering a growth of 9% during the year 2013-14. As perGOI directives, Priority Sector Loans extended to Jain Community were included forcomputing Minority Sector Advance.The information pertaining to credit flow to Minoritycommunities and status on implementation of
Prime Ministers 15 point programme for Minorities and Sachar Committeerecommendations are placed in the Banks website. Special interest scheme wasintroduced by the Bank during 2010 for the benefit of Minority Community under PrioritySector lending, and the same is continued during 2013-14.
Various components of Advances to Weaker Sections as at 31.03.2014:
(Amount Rs in crores)
|Sectors ||Outstanding |
|Small & Marginal Farmers, Agri. ||6681.61 |
|Labourers,Tenant Farmers and share croppers || |
|Artisans, Village and Cottage Industries ||45.29 |
|SC/ST Beneficiaries ||3076.49 |
|DRI Loans ||8.96 |
|SHG/JLG Advances ||1809.59 |
|Advances to Distressed Poor to repay debt to informal sector ||57.28 |
|Advances to Individual Women beneficiaries up to Rs 50,000 ||1078.86 |
|TOTAL ||12758.08 |
New Initiatives and other developments during the year:
Special Campaign on Agricultural Credit was held from 01.12.2013 to 28.02.2014 andRegions which have secured top 3 places were recognized with Trophies and Certificates.
Credit Camps were organized in all the Regions for canvassing proposals underAgricultural Advances.
The Bank has achieved all the mandatory targets under Priority Sector Credit, TotalAgriculture, Direct Agriculture, Weaker Section Advances, Credit Women Beneficiaries andcredit to Minorities for the last 3 financial years including March 2014.
The Bank has extended crop production credit of
Rs 5798.13 crore benefitting 7.14 lakh farmers during 2012-13under interest subvention scheme of the Govt. of India. The bank has extended the interestsubvention benefit @2% to the tune of Rs 54.27 crore and Rs 9.75 croreas additional incentive subvention @ 3% for timely payment during 2012-13 and making theeligible farmer derive credit at the effective rate of 4%. The Interest Subvention schemeof Govt of India is continued during 2013-14 also. 35873 new Self Help Groups (SHGs)were credit linked during 2013-14 with a credit support of Rs 1267.45 crore.
The outstanding advances to SHGs as at March 2014 was 90875 accounts with anoutstanding balance of Rs 1799.58 crore. In addition, 543 Joint Liability Groups(JLGs) were credit linked with a credit support of Rs 3.34 crore. The outstandingadvances to JLG as at March 2014 was 1618 accounts with an outstanding balance of Rs 10.01crore.
The Bank is participating in Jana Sree Bima Yojana of LIC of India to extendinsurance cover to all the women members of SHGs credit linked to Bank wherein the premiumis subsidized by GOI. Moreover, the scheme has an add-on benefit under Shiksha SahayogYojana wherein two children of the insured member of SHG are provided with scholarship atno additional cost.
A credit scheme with special rate of interest for other Backward Classes(OBCs),Scheduled Castes(SCs) and Scheduled Tribes(STs) was launched.
The Bank is presently implementing the scheme to extend finance to Solar HomeLighting Systems and Solar Water Heating Systems with subsidy assistance from Ministryof New and Renewable Energy (MNRE) under
Jawaharlal Nehru National Solar Mission (JNNSM). During the year 2013-14 up toMarch 2014, the Bank has financed Rs 1.62 crore for 442 units of SolarHome Lighting Systems and Rs 0.72 crore for 189 units of Solar Water HeatingSystems. Cumulatively, the Bank has financed Rs 22.86 crore for 11415units of Solar Home Lighting Systems. The cumulative number of SolarWater Heating Systems financed by the Bank is 3653 units amounting to Rs102.50 crore up to March, 2014.
297 Rural Extension Education Programmes benefitting 44503 farmers / villagerswere organized by our branches during the year 2013-14. These programmes included ExpertLectures, Agricultural Demonstrations, Agricultural / Animal Husbandry Seminars, Animalhealth Check-up Camps etc. Bank has been conducting these programmes to impart technicalknow-how on crop cultivation practices and allied activities. These programmes will helprealize better yield and thereby improve the economic status of the farmers.
"Syndicate Bank KVG Bank Professor Chair in Agricultural Finance"instituted by the Bank in association with Karnataka Vikas Gramin Bank was established inSeptember 2012 in the University of Agricultural Sciences, Dharwad. Bank had donated Rs 50lakh towards this cause as part of its Corporate Social Responsibilty. The Chair decidedto undertake study in three areas of research in Banking in Dharwad District viz.,"An enquiry into crop loans ", "An Investigation into No-frillAccounts" and "An investigation into Business Correspondent (BC) Model"during the current year.
Bank has co-sponsored 27 Rural Development and Self Employment TrainingInstitutes (RUDSETIs) across the country. These institutes have trained 23861 candidatesduring the year 2013-14. Out of these trained candidates 12708 were women and 6397were from SC/ST category. Total candidates trained since inception is 353035. Thesettlement rate is 74%.
The Bank has established 16 SyndRural Self Employment Training Institutes (SyndRSETIs) in 5 States and 1 Union Territory for imparting training to rural poor. Theseinstitutes have conducted 356 training programmes during the year 2013-14, benefitting9593 persons, of whom 5505 were women and 2377 were from SC / ST category. Totalcandidates trained since inception are 105856. The settlement rate is 69 %.
9 SyndRSETIs have been graded AA+ and 6 SyndRSETIs have been gradedA by MoRD, Govt. of India during the year. Our Faridabad and KottayamSyndRSETIs were adjudged as the best RSETIs in the country under category I and IIrespectively. Our CMD received the awards from the Honble Minister for RuralDevelopment Shri Jairam Ramesh in a function held at New Delhi on 21-11-2013.
The Bank has been assigned with lead bank responsibilities in 27 districtsincluding UT of Lakshadweep.The Lead District Offices of the Bank have conducted theDistrict Level Review Committee (DLRC) meetings and District Consultative Committee (DCC)meetings regularly. The credit planning process was completed and District Credit Plan(DCP) 2014-15 was launched as per time schedule envisaged by RBI.
The Bank is also the convener of State Level Bankers Committee (SLBC) inKarnataka and the Union Territory of Lakshadweep and satisfactorily discharged theresponsibilities cast on it as the convener of State Level Bankers Committee. TheSLBC for Karnataka and UTLBC for Lakshadweep are implementing recommendations of the HighLevel Committee to review the Lead Bank Scheme.
There are 3 Regional Rural Banks sponsored by our Bank, subsequent to amalgamationof North Malabar Gramin Bank with South Malabar Gramin Bank in the State of Kerala as perGovt of India Notification No 7/9/2011-RRB (Kerala ) dated 08.07.2013 and Gurgaon GraminBank with Haryana Gramin Bank in the state of Haryana as per Govt of India NotificationNo7/9/2011-RRB (Haryana) dated 29.11.2013.These three RRBs are covering 18 districts in 3states, with a network of 1278 branches.
Total business of RRBs sponsored by the Bank stood at Rs 36532 crore. The Totaldeposits and advances of the RRBs reached a level of Rs 19031 crore and Rs 17501 crore,respectively. The Total Priority Sector Advances stood at Rs 14902 crore constituting85.15 per cent of Total advances as at 31.03.2014. Agricultural advances reached a levelof Rs 12613 crore forming 72.07 per cent of Total advances. In all, the RRBs have issued6.87 lakh Kisan Credit Cards to farmers with an outstanding credit of Rs 10530 crore. TheRRBs together have earned a net profit of Rs 384.64 crore for the year 2013-14.
As per the suggestions of the working group constituted by RBI on Technologyup-gradation of RRBs, all the RRBs sponsored by our bank have moved towards implementationof CBS. They have implemented NGRTGS and NEFT, APBS/NACH platform, ECS (debit) and ECS(credit), CPSMS 2.6 version. RRBs are preparing to install CDs and implement RuPay cardsvery soon. System generated NPA is implemented in all RRBs sponsored by us. All the threeRRBs have implemented F I Plan (2013-2016) as per the direction of Reserve Bank of Indiaand Government of India.
ADVANCES TO MICRO, SMALL & MEDIUM ENTERPRISE (MSME) SECTOR
Advances to Micro, Small and Medium Enterprises (MSMEs) reached Rs 19799.80 crore as atMarch 2014, registering a growth of 20.52% during the year. Advances to Micro and SmallEnterprises (MSEs) reached a level of Rs 18697.08 crore, recording a growth of 24.03%.Advances to MSEs accounted for 64.87% of the Total advances to MSMEs as at March 2014. TheBank is having 69 specialized branches for exclusive lending to MSME sector across thecountry. The Bank has covered 38715 accounts with a loan amount of Rs 1940.39 crore as atMarch 2014 under the Credit Guarantee Scheme of Credit Guarantee Fund Trust for Micro andSmall Enterprises (CGTMSE).
As a proactive measure to promote collateral free lending to MSEs, the Bank isabsorbing entire guarantee fee and annual service fee payable for loans up to Rs 5.00 lakhunder all Govt. sponsored schemes and 50% of fee payable for all other loans up to Rs50.00 lakh.
To give a boost to MSME business, the Bank implemented various measures during theyear. The rate of interest on MSE advances was reduced by 0.25% to 0.50%. Five newproducts were launched by the Bank to provide focused thrust to identified MSME sectorswith reduced rate of interest, margin and processing charges. MOUs with reputed commercialvehicle manufacturing companies were renewed to expand credit to borrowers for purchase ofcommercial vehicles under MSE sector. The Bank actively participated in variousexhibitions, workshops and seminars during the year to build brand image of the Bank inMSME financing. Additionally, it also organized awareness programs in MSME clusters allover the country. The Bank also organized a large number of credit camps at variouscenters during the year to mobilize MSME proposals. These camps were attended by the TopExecutives of the Bank. The Bank also organized the meets of the Doctors, Transportersetc., at various centers to mobilize their proposals and to cross sell the Banksproducts and services. To update the knowledge and skills of the processing and marketingofficers, training programs were organized at staff training colleges and regional officesof the Bank during the year. The Bank also introduced an automated loan processing systemin all their branches and regional offices for improving the efficiency in processing ofMSME loan proposals, there by facilitating timely availability of credit to MSME units.Online Tracking for MSME proposals launched to facilitate MSME borrowers to track and knowthe status of the applications.
CREDIT MONITORING AND REVIEW DEPARTMENT
During the year, a new vertical headed by a separate General Manager is formed forCredit Monitoring, Review of Credit Sanctions by various Committees, Corporate DebtRestructuring and Monitoring of Special Monitoring Accounts. .
Credit Monitoring Policy:
Due to heavy down turn in Economy and with a view to continuously monitoring theperformance of the asset and constant evaluation of associated risks during post sanctionperiod and to maintain the quality of the assets of the Bank the Credit Monitoring and SMADepartment has brought out an exclusive Credit Monitoring Policy giving details ofmonitoring functions of the Department.
Monthly Monitoring Reports (MMR):
To make credit monitoring more robust and with an objective of getting the maximuminformation in respect of all exposures of Rs 100 lakhs and above, "MMR", afully web based reporting system is introduced with effect from Dec. 2013. The MMR issystem driven tool for detecting early warning signal and to take remedial action on anongoing basis. This also facilitates as an effective tool for Management InformationSystem.
The SMA Department functional from 2009 is a well built Mechanism for implementation ofthe various regulatory guidelines issued by Reserve Bank of India from time to time. Thisdepartment takes care of asset quality and prevents slippages. All stressed assets areclassified as Special Monitoring Accounts and effective follow up is made on an on goingbasis with branches/ROs/FGMOs. Bank has got prepared for implementing norms forrevitalizing the stressed accounts as per recent RBI guidelines effective from 01.04.2014.
ASSET QUALITY & MANAGEMENT OF NPAS
Banks Recovery Policy is oriented towards addressing the entire gamut of NPAmanagement and enabled the field functionaries in resolving any category of Non PerformingAccounts by bringing out a booklet on "Comprehensive Recovery Policy for NonPerforming Assets" during 2013-14.
Bank has introduced / extended special OTS schemes for considering proposals of farmerseligible under agricultural tractor loans, small NPA accounts under doubtful and lossassets category with book balance of Rs 5,00,000/- and below as at March 2013 and of Microand Small Enterprises borrowers. A special OTS scheme for settling Synd Jaikisan NPA loansof Farmers was extended during 2013-14 for the benefit of majority of NPA farmers.
Bank continued to reduce large number of smaller NPA accounts by settling the dues at"Synd Adalats" at all branches throughout the year by meet, talk and settleapproach. Four Bruhat Synd Adalats were conducted at regional/cluster/branch level on07.06.2013, 20.08.2013, 19.11.2013 and 18.02.2014 and 62030 OTS cases were settled, byrecovering a sum of Rs 170.13 crore with an offer amount of Rs 544.40 crore. crore duringthe year 201314 by issuing notices and taking possession/auctioning of propertiesunder SARFAESI Act 2002.The efforts at branch level were supplemented by empanelling moreenforcement agencies and approved valuers.
Special intensive NPA recovery campaign named "Synd Vasuli Abhyan-1314" washeld successfully from 01st October, 2013 to 31st March 2014 for maximizing recovery.
Top NPAs from each Region were identified for giving focused attention in the beginningof the year itself and many accounts were successfully resolved before March 2014.Stressed Tiny Asset Recovery Team (START) stationed at Regional Offices are extensivelyutilized for assisting the branches having high concentration of Special Monitoring Assets/ Non Performing Accounts of below Rs 10.00 lakh.
All high value NPA accounts are monitored personally by Chairman & ManagingDirector/ Executive Directors and vigorous follow up is made for resolving these accounts.On account of this, large number of NPA accounts could be resolved.
The recovery in existing NPAs amounted to Rs 1518.39 crore which includes Rs 1015.67crore recovery towards principal and Rs 501.26 crore towards uncharged interest and arecovery of Rs 1.46 Crore written off accounts. The Total cash recovery inclusive ofrecovery under existing and fresh is Rs 1738.01 crore.
FINANCIAL INCLUSION INITIATIVES
Banks committed initiatives towards Financial Inclusion:
The Bank considered Financial Inclusion and Financial Literacy as twin pillars where FIacts on the supply side i.e. for creating access and Financial Literacy acts from thedemand side i.e. creating demand for financial products and services. Financial Inclusionis being viewed in the Bank not just as a social commitment but also as an instrument tobring about overall economic development of rural India so as to tap opportunities at thebottom of the pyramid of Indian economy through sustainable ICT based delivery channels.
Strategies and models adopted:
The Ministry of Finance has identified around 6.0 lakh villages across India asunbanked areas. These villages are allocated to various banks by SLBC / DCC under theservice area / sub- service area approach. Our Bank has covered 1553 villages of more than2000 population under its service area as on 31.3.2013.
The Ministry of Finance and RBI has advised Banks to provide banking services ataffordable cost to these villages. Accordingly, the Bank has approved a Plan which isdisaggregated further to a village level following SSA concept to cover all the 5290villages of less than 2000 population by providing banking services to them in 3 yearstime i.e. 2013-16.
The following models are adopted by the Bank for implementation of FI:
1) ICT Based Business Correspondent (BC) Model :
In order to ensure that financial inclusion is implemented in a most efficient mannerand is fully integrated with CBS, the Bank has appointed 5 Service Providers for acomplete end to end solution i.e. from enrolment of villagers to issuance of smart cardsto them. The purpose is to bring technology based banking transactions to the door stepsof all villages.
ICT based BC Model is based on Application Service Provider (ASP) model with biometricsSmart Card based technology. Under this approach, BCAs visit villages with a Hand HeldMachine (HHM) devices for carrying out customer enrolments and transaction processing.These HHMs are directly connected with the CBS system of the Bank using GPRS technology.
Bank was allotted a target for coverage of 2111 villages of less than 2000 populationby 31.03.2014. Bank has extended banking services to 2248 villages as against the targetof 2111 villages of less than 2000 population by engaging 729 BCAs and by opening of 32Branches / Satellite Offices. This is in addition to 1553 villages of more than 2000population already covered as on 31.03.2013.
As per the guidelines of DFS, MOF, GOI, the Bank has opened 952 USBs as on 31.03.2014across the country in villages having population above 2000 which are covered through BCModel. The Banks Officer from the Link Branches visit these USBs on a pre-determinedfixed day and time in a week. They would clear all the applications for account opening,loan request, resolving grievances, arrange meeting with villagers on financial literacy,etc., besides advising villagers on various financial products. This initiative of theBank has facilitated improvement in financial literacy and confidence building at thevillage level.
Out of 952 USBs, in view of the number of transactions 3 USBs were converted intofull-fledged Branches as on 31.03.2014.
3) Brick & Mortar branch model:
The Bank has opened 115 Rural Branches, of which 85 are unbanked during the currentfinancial year.
Financial Literacy: A Key to successful inclusion :
The desired objective of financial inclusion can be achieved only when the Bank is ableto generate equal response from the villagers. In order to evoke the response from thevillagers, the Bank need to educate them on various banking facilities and its benefits tothem. In other words, Financial Literacy would be the key for success of financialinclusion initiatives of any Bank. Therefore, all constituents of FI need to develop abond with each other not only to provide banking facilities but also to create massiveawareness of banking products amongst the population through Financial Literacy wherever aBank is implementing FI programme.
The Bank is promoting Financial Literacy through JJFLCC Trust which has opened 38Financial Literacy Centres (FLCs) and 21 Financial Inclusion Resource Centres (FIRCs) inthe lead districts of the Bank. These FLCs have conducted 9901 literacy camps benefiting384742 persons during the year. Bank has also taken up various Financial Literacyinitiatives, such as puppet and magic shows, Yakshagana and broachers / pamphlets havebeen brought out in vernacular languages. Graffiti displayed at prominent places in thevillages.
RUDSETIS AND RSETIS :
Bank has established 27 RUDSETIs and 16 RSETIs by the Bank in the Lead Districts of theBank to provide Training to rural unemployed youth and handholding them till theyestablish their new enterprises to settle in their lives.
Product Innovation in FI:
The Bank has also been using FI as an opportunity to strengthen its functioning ofCorporate Social Responsibility. The Bank is taking various steps to increase bankingawareness amongst the rural people, educate them on its products, rural credit, technologyknow-how, credit counseling, problem solving, uplifting women and girl children, formationof Farmers Clubs and formation of SHGs, etc.
The Bank has introduced several customer oriented products specifically designed for FIcustomers. Some of them are as follows:
1) Basic Savings Bank Deposit Account (BSBDA) with inbuilt OD facility: Theproduct is specially devised for individuals from FI villages with relaxed KYC norms asper the RBI guidelines. The account can be opened without depositing amount which does notattract any penalty and will be opened / operated through BC, Branch and ATM.
Under the BSBDA, the Bank has opened 11.34 lakh accounts during the current financialyear 2013-14 and the balance outstanding as on 31.03.2014 is Rs 265.93 crores.
2) FI Recurring Deposit account :
To target the rural savings, the Bank has designed the product wherein the BCA cancollect the installments of the RD account from the FI customers.
3) Kisan Credit Card (SKCC) Synd KCC :
This product is for farmers to cover their needs like production credit. Investmentcredit, personal loan needs as well as consumption needs. It is flexible in utilization ofthe limit as he can utilize the limits as per his requirements during the year. As on31.3.2014, Bank has sanctioned Rs 8.10 lakhs KCCs.
4) General Credit Card (GCC) :
The GCC is implemented through all the rural and semi urban branches of the Bank tocater to the different needs of the villagers / artisans and small business people. As on31.3.2014, Bank has extended 0.49 lakh GCC accounts.
5) Micro Insurance : Insurance product with low premium : Bank has enteredinto an arrangement with M/s Birla Sun Life Insurance Company Limited for extending riskcover to FI customers at a very nominal premium of Rs 15/-pa (inclusive of service tax).Insurance cover is provided up to a limit of Rs 25000/- covering both accidental andnatural death besides inbuilt terminal illness benefits during the year. The Bank hascovered 10105 FI beneficiaries under micro insurance.
DIRECT BENEFIT TRANSFER :
The Bank has taken a number of steps for successful implementation of Direct BenefitTransfer in the identified 78 districts during the year (w.e.f 01.07.2013). Our Bank has anetwork of 852 branches in 102 DBT districts. Out of 852 branches, 681 branches areprovided with on-site ATMs.
Sensitization programmes for the implementing personnel have been organized. SpecificNodal Officer / Executives have been designated for each of the identified districts forsupervision and monitoring. BCAs are appointed in all villages of DBT districts andefforts are made to install on-site ATMs at all branches in DBT districts as perguidelines.
These initiatives will ensure passing on the Government benefits to the intendedbeneficiaries seamlessly. Under the DBT, which is being implemented in 121 districts, ourBank has Lead Bank responsibility in 5 Districts viz., Anantapur, YSR Kadapa, Kurnool,Kannur and Lakshadweep. Accounts are opened to all the beneficiaries whose list isreceived from Govt and efforts are made to ensure 100% seeding of Aadhaar numbers and 100%mapping of Aadhaar with NPCI. An amount of Rs 25.54 crores has been credited to thebeneficiaries accounts under 26 schemes during the year.
Direct Benefit Transfer LPG (DBTL):
DBTL is presently implemented in 293 Districts. Our Bank is having Lead Bankresponsibility in 16 Districts. LDMs are co-ordinating with district administration andalso with the Banks in the districts for successful implementation. The progress is alsomonitored by FID:Corporate Office.
Aadhaar seeding by Banks in our Lead districts (Ananthapur, Kadapa, Prakasam, Kannurand Kasargod) has crossed 50% as per timelines and the same is appreciated by DFS, MOF.
Aadhaar Payment Bridge System (APBS) :
APBS is a new payment service offered by National Payment Corporation of India usingAadhaar Number issued by UIDAI. The Government benefits are transferred to the accounts ofthe beneficiaries on the basis of Aadhaar Number so that the Bank details and accountsnumbers of the beneficiaries need not be maintained by the Government Departments /Agencies. APBS is now operational in our Bank.
Aadhaar Enabled Payment System (AEPS) :
AEPS is a Bank led model which allows online interoperable financial transactions byPOs / HHMs through the BC of any Bank using Aadhaar authentication. The four Aadhaarenabled Basic types of banking transactions are as follows:
Cash withdrawl and
Aadhaar to Aadhaar fund transfer
AEPS is in a testing phase in our Bank and will be operationalised shortly.
Highlights of the Banks performance in FI upto 31.03.2014 :
Bank has so far covered 3801 Villages under its service area. Bank has opened 69.74lakh BSBD Accounts.
The average balance outstanding in the No Frill Accounts of the Bank is around Rs 2929crores. Bank has opened 949 USBs in villages with above 2000 population.
The Bank has approved disaggregated plans upto the Branch level to implement its FIPlan for 5290 villages of less than 2000 population by March 2016. Bank has introducedmicro insurance product for FI customers. During the current year 10105 FI customers arecovered.
Bank has entered into an agreement with CSE e-governance Ltd to enroll their CSCs inthe Banks service area as BCAs on Kiosk banking platform under FI.
Bank has fully prepared technology for audit based payments, UIDAI linkages, villagecode updation etc.
TREASURY & INTERNATIONAL BANKING DEPARTMENT
Due importance has been given for efficient and effective management of funds in theTreasury and International Banking Department.
T&IBD is the A Category Office in our Bank which maintains ForeignExchange Position, Nostro and Vostro Accounts. Besides, T&IBD also monitorsdevelopment and follow up of Foreign Exchange Business, Overseas Business and TreasuryOperations at our London Branch.
The Banks centralized dealing room at T&IBD, Mumbai is supported by one LinkDealing centre at New Delhi to offer competitive rates, to market our services, to developand maintain customer relationships, and to guide designated branches.
The Bank is one of the first to undertake Web-based trading with Overseas counter partyBanks by using state-of-the-art Web platforms. The Bank is having 89 designated Branches(category B) to handle full-fledged FX transactions and 386 nominated branches to handleFCNR business of the Bank.
Bank is also under the process of increasing the Designated and Nominated Branches.NRE/NRO deposits are accepted at all branches of the Bank.
The Bank is a member of Clearing Corporation of India Ltd. (CCIL) for settlement ofInter-Bank Forex Deals in USD/ INR & for settlement of Inter-Bank USD/INR deals in theForex Forward segment. Further, the Bank is one of the first Banks to participate inContinuous Linked Settlement (CLS) for Cross Currency Deals by CCIL. Both the initiativesaddress the issue of settlement risk and improve the efficiency of settlement processthrough novation and central counter party. The Bank is offering only plain vanilladerivatives and no complex derivative products are offered by the Bank.
The Bank is implementing Integrated Treasury Management Software which will integratethe Domestic and Forex Treasury, Reconciliation, Settlement and Core Banking platform ofthe Bank with Straight-through-Process and access to the branches.
The Bank has become Trading-cum-Clearing Member on three exchanges i.e. MCX-SX, NSE andUSE for undertaking trading in Currency Futures. Bank has stopped proprietary trading inCurrency Future as per the directives of Reserve Bank of India.
The Total Forex Turnover of the Bank was Rs 938085.38 crore for the current financialyear, as compared to Rs 642372.84 crore for the previous financial year. The Inter-Bankturnover of the Bank was Rs 899726.76 crore for the current financial year as compared toRs 596695.40 crore for the previous financial year.
Taking advantage of the robust market, the Bank activated its trading desk and bookedtrading profits. The bank has also strengthened the non SLR investments by investing inqualitative and rated corporate bonds and debentures, commercial paper, CDs etc. resultingin improved yields on investment portfolio.
The bank has also earned from arbitrage deals, by effectively making use of windowslike CBLO, Repo and Call. The bank has managed funds very efficiently by these moneymarket avenues, monitoring continuously the fund flow and the liquidity position, whilelending and borrowing, depending on the market conditions and rates. The domesticinvestments of the bank were at Rs 55462.03 crore as on 31.03.2014 as against Rs45574.21crore as on 31.03.2013. Total income from investment portfolio (excluding dividend& trading profits) was Rs 3832.50 crore in the year 2013-14 as against Rs 3275.43crore in the year 2012-13. Banks Investment in SLR securities amounted to Rs48314.61 crore, which formed 87.11% of Banks aggregate investments as on 31.03.2014.Trading profits for the year was Rs 145.83 crore.
The Bank has initiated various measures to increase the flow of credit to exportsector. The coverage under the SyndExport Gold Card Scheme, a unique scheme for eligibleexporters offering concessional and preferential terms was broadened to include morenumber of exporters.
Rupee export credit was offered at very competitive interest rates within the ceilingprescribed by RBI. The Interest Subvention Scheme, as designed by Reserve Bank of India,has been made available by the Bank to its customers in certain specified sectors, thuspassing on the benefits of concessional interest. Bank also conducted the Exporters meetat strategic places viz., Delhi, Surat, Pune.
The Bank is successfully managing two Exchange Houses viz. M/s. National Exchange Co.,WLL, Doha, Qatar and M/s. Musandam Exchange, Sultanate of Oman. The Management Agreementis in place for more than three decades and serving the expatriate community in the GulfRegion. The Bank is also having fruitful Rupee Drawing Arrangements with other 7 ExchangeHouses for improved and cost-effective funds transfer to India from Gulf countries.
Centralised NRI Cell
With a view to increasing the NRE Portfolio of our Bank, T&IBD has opened theCentralised NRI Cell to enable prompt opening of NRE Accounts. T&IBD is opening theaccount on behalf of the Branches and is dispatching the NRE kit containing cheque book,ATM card and internet IDs etc. directly to the Exchange Houses for onward delivery to thecustomer.
Banks overseas presence is in United Kingdom at London. The Branch is active inmoney market operations, Investments, besides Treasury and Forex dealing operations.Branch is active in interbank operations. The
Branch focuses of syndications and ECBs, besides bilateral loans. With IndianCorporates going global, branch finds new opportunities of business. The branch has robustrisk-management system.
The Total business of the branch stands at GBP 5801.602 Million (Rs 57880 crore) as at31st Mar, 2014 as against GBP 5283.091 Million (Rs 43442 crore) as at the correspondingperiod of previous year.
Risk Management Architecture
Your bank has implemented a robust and comprehensive Risk Management Framework. TheBoard of Directors assumes the overall responsibility for risk management initiatives inthe bank. It includes defining risk appetite, framing policies, review and effectivemonitoring. The Risk Management Committee (RMC), which is a subcommittee of the board,assists the Board in the implementation of the enterprise wide Risk Managementarchitecture in your bank. The RMC of the Board is ably assisted by Credit Risk ManagementCommittee (CRMC) which takes care of the Credit Risk, Asset Liability Management Committee(ALCO) looking after the Asset Liability and Liquidity Risk, while Operational RiskManagement committee taking care of operational risk aspects.
Credit risk is the potential loss to the bank caused by the default of payment bycounter party either due to the lack of capacity or unwillingness to meet obligation. Yourbank has formulated the Credit Policy and Credit Risk policy, approved by the Credit Riskmanagement committee with periodical review to meet the dynamics of the credit market.Your bank has adopted the risk based delegation of power for various levels of hierarchyin the bank for lending and has also constituted various committees at Regionaloffice/Corporate office levels for credit approval.
The credit risk policy is a comprehensive document containing the Regulatory/internalcapital exposure norms, setting of ceiling limit for various sectors/industries, Loanreview and monitoring tools like credit audit, Concurrent audit. Internalaudit etc. The borrowers are rated under two dimensions of Borrower and facilityrating. Rating module is used for grading and pricing the loans.
Rating of assets migration are in place for the last five years and your bank is in theprocess of moving to Foundation Internal rating based (FIRB) approach for capital chargecomputation.
Market Risk is defined as the risk of losses in on and off-balance-sheet positionsarising from movements in market prices. The different components of market risk can becategorized as under:
1) Interest Rate Risk: The risk that arises from changes in yield curves, creditspreads and volatility in interest rates.
2) Equity Price Risk: The risk that arises from changes in the prices of equities,equity indices, equity baskets and volatility in stock market.
3) Exchange Rate Risk: The risk that arises from changes in the exchange rates andtheir volatility.
4) Commodity Price Risk: The risk that arises from changes in commodity prices andvolatility. However, your bank does not have any exposure to commodity related markets.
Your bank has clearly articulated policies to control and monitor its treasuryfunctions. Your bank has put in place Investment policy including Domestic Treasury, Forextreasury for International Division and London branch with operational guidelines andIntegrated Market risk policy. Investment policy is reviewed regularly in line withRegulatory, financial and market conditions.
Your Bank has put in place Integrated Treasury Management Solution (ITMS), where inboth Domestic and forex treasury operations are live. Computation of Market risk capitalunder Standardized Measurement Method (SMM) is live with SAS module at present. Your Bankis in the progress to move to Internal Models Approach (IMA).
Interest rate Risk in your Bank is measured under both Interest rate Sensitivity Gapapproach and Duration approach. Further, your Bank computes Earnings at Risk (EaR),Modified Duration (MD) and estimation of Economic Value of Equity on monthlybasis.
Liquidity Risk implies the risk when the Bank either does not havesufficient financial resources available to meet its financial obligations, as and whenthey are due, or can only access these financial resources at excessive and unsustainablecost.
Your Bank monitors the liquidity risk through (i) Structural Liquidity Statement (ii)Dynamic Liquidity Statement. Your Bank draws the Structural Liquidity Statement based onthe residual maturity of Assets and Liabilities on Daily basis. Dynamic liquiditystatement is estimation of liquidity position for a future period of 90 days, which isprepared on monthly basis. There by Fund position can be planned in advance. The AssetLiability Management Committee (ALCO) consists of members of the Top Management andregularly meets to monitor Liquidity Risk, Interest Rate Risk, Gaps/Mis-match Risk, BasisRisk, Re-pricing Risk, Forex Risk and Equity Price
Risk. It includes product pricing for deposits as well as advances and the desiredmaturity profile of assets and liabilities.
With the Prudential Regulatory Authority (PRA), UK approving "Whole FirmModification" approach for our London Branch under the liquidity regime of PRA/FCA(Financial Conduct Authority), the Bank has put in place a mechanism for effectivemonitoring of liquidity at London Branch and for the Bank as a whole.
The Bank has a well documented Contingency Liquidity Funding Plan for managing anyeventuality. The Bank is undertaking stress test on quarterly basis to assess the impacton liquidity and interest income of the Bank.
As per the direction of RBI, Your Bank is the process of Implementing ScientificFund Transfer Pricing (FTP) mechanism.
Operational risk is the risk of loss on account of failure of people, systems, internalprocess or external factors, including legal risk in the bank. The operational riskmanagement committee of the bank headed by the Top management and the General Managerstakes the responsibility of monitoring and controlling the operational risk throughperiodical meetings through review/ amendment of processes, systems and procedures in thefunctions of the bank.
Your Bank is successfully launching the system based Operational Risk management system(ORMS) in the first quarter of financial year 2014. This will enable the bank to collectthe details of operational losses through system which will enable the bank to computecapital for operational risk using models.
Risk Management Department functioning at Corporate Office oversees the overallimplementation of various risk management initiatives across the Bank, with the assistanceof Risk Management Cell (RMC) at Regional Offices.
Basel II Compliance
Your Bank has been complying with all Basel II norms. The Capital to Risk WeightedAssets Ratio (CRAR) is computed as per Pillar I requirements adhering to New CapitalAdequacy Framework (NCAF) guidelines of RBI. Your Bank is adopting Standardized Approachfor Credit Risk, Basic Indicator Approach for Operational Risk and Standardized DurationApproach for Market Risk.
Your Bank has, Board approved comprehensive Internal Capital Adequacy AssessmentProcess (ICAAP) and Stress test Policy which is reviewed periodically, so as to be in linewith the market realities, economic environment and regulatory requirement. Bank ispreparing the Annual Capital Plan which is reviewed quarterly based on actual workingresults so as to assess both Pillar I and Pillar II Risks.
Your Bank has a Board approved Disclosure policy which is reviewed periodically byadhering to the guidelines issued by RBI.
Your Bank has a well documented policy and processes for management of Credit, Marketand Operational Risks which are periodically reviewed, so as to adapt to the changingbusiness and market environment.
Basel III Guidelines
Basel III guidelines have been introduced with a view to improve the bankingsectors ability to absorb shocks arising from financial and economic stress,whatever the source, supplementing the Risk-based capital requirement with a LeverageRatio which require the capital for all on and off balance sheet items and shifting focustowards Common Equity Capital.
During the current year, your Bank has taken various capital optimization measures forimproving the quality of capital and improve the Common Equity, Tier 1 capital, CRAR, byplough back of internal accruals and infusion of capital by Government of India.
Your Bank is in a fairly comfortable position as regards Capital and adhere to theratios prescribed by RBI. Bank is taking all measures to improve the CET, CRAR andLeverage Ratio under Basel III so as to comply with the Basel III requirements in a phasedmanner as per the schedule prescribed by RBI to meet the regulatory requirements ofCapital and Leverage Ratios as on 01.01.2015, while simultaneously achieving the expectedgrowth in business.
Your Bank is also publishing on quarterly/half yearly basis the required information onBasel III disclosures in the website from the quarter ending September 2013.
A comparison of Capital, under Basel-II vis--vis Basel III is given below:
|Parameter ||Basel - II ||Basel III |
|Tier I capital Ratio ||8.99% ||8.68% |
|Tier II capital Ratio ||3.02% ||2.73% |
|Total Capital ||12.01% ||11.41% |
MIS-MISSION A game changing initiative
To generate error free and consistent MIS data / Reports for submitting to RegulatoryAuthorities and also for internal use of the Bank, a robust MIS data in the system willplay a significant role. To place a correct MIS data in the system, Bank had constituted aseparate vertical Management Information System (MIS) Department headed byGeneral Manager.
To accomplish the above task, the MIS Department has taken up revamping of MIS data insystem through the process of MIS Data Cleaning, De-duplication and MIS Data Enrichment.As a part of revamping process of MIS data, gap analysis has been done and new userfriendly screens are provided to capture the MIS details. The Bank had declaredMIS-MISSION from 16.11.2013.
The task has been taken-up seriously at Administrative Offices / Branches and is beingattended on a mission mode. The task of MIS capturing in as many as 34 lakhs existingborrowal accounts is in the verge of completion. Once the asset side MIS updation iscompleted, the liability side MIS updation will also be done. The MIS details that arecaptured at the account level are being audited by Concurrent / Local Auditors.
The process of development of report generation tools with reference to new MIS detailsis under way. Trial reports are generated for selected Branches / ROs which are undervalidation. It is envisaged to generate all reports of the Bank / Regulatory Authoritiesfrom the system without manual intervention by September, 2014.
Through this game changing initiative, the Bank is expected to reap notonly the quantitative benefits (financial on account of saving man-days in manualpreparation of reports) but also qualitative benefits viz, better decision making, meetingregulatory requirements, enhancing image of the Bank, better AFI rating etc.
INFORMATION TECHNOLOGY CORE BANKING SOLUTION (CBS):
The Bank continues to spread its wings with a network of 3,250 Branches and 141 Officesin 2192 centres covering 34 States and Union Territories under the CBS Network as on31.03.2014. All the branches / offices are currently under Centralized Server Setup.
DELIVERY CHANNELS: ATM Network:
Bank has operationalised 1946 ATMs as at 31.03.2014, spread across 860 Centres acrossthe country. Bank has a Card-base of over 64.04 Lakh for global access to ATMs and POSTerminals. Average Cash Disbursal through ATMs stands at Rs 1036.52 Crore per month.
Innovative services in ATMs:
Bilingual screens are made available in ATMs of Hindi speaking areas. All the ATMs inthe States of Karnataka and Kerala are having multi-lingual screens. ATM screens inTelugu, Malayalam, Oriya, Bengali etc are under process.
SMS for ATM Transactions: As per RBI guidelines, SMS is being sent to thecustomers registered mobile number for all ATM transactions.
ATM/Cash Dispenser to each Branch of the Bank by 31.03.2014:
Bank is in the process of installing 1600 new Cash Dispensers to comply with thedirections of DFS. Out of 1600 Cash Dispensers, 1300 is allotted for providing to brancheswhere there is no ATM/CD. 300 CDs are allotted for replacement of old ATMs under buybackarrangement. The process is under progress.
Internet Banking facility-User base now stands at 7.97 Lakhs as at 31st March 2014 withan increase of 0.85 Lakhs over March, 2013. Facilities such as National Electronic FundsTransfer (NEFT) and Real Time Gross Settlement (RTGS) facility for transfer of funds,Railway Ticket Reservation, Utility Bills payments, Payment of various types of Taxes, VATetc. are being extended through Internet Banking channel.
Bank has introduced SMS Banking to inform the customer immediately when a transactionoccurs in their account. The number of customers who have availed SMS Banking facility hasgrown from 6,28,750 as at March 31, 2013 to 10,50,955 as at March 31, 2014.
Bank has implemented Mobile Banking Services, whereby customers can conduct theirbanking transactions through mobile phones. The number of mobile banking users isincreased to 24781 as on 31.03.2014 from 9736 as on 31.03.2013.
Centralised Payments System of RBI RTGS/NEFT:
The Bank is offering NEFT and RTGS, the Fund Transfer facility among the Banks, underthe RBIs Centralised Payments System, through 3,171 branches/Offices for both RTGSand NEFT. During March 2014, there were 19.32 Lakhs NEFT transactions involving an amountof Rs 10,876.54 Crore and 1.74 Lakhs RTGS transactions involving an amount of Rs 1,40,963Crore.
Customer-centric Initiatives: Bunch Note Acceptors (BNA):
Bank has procured 100 Nos. of BNAs for installation in select market areas foraccepting bulk cash from the customers. BNA facilitates for on-line credit/debit to theaccount for cash deposit/withdrawal on 24*7 basis.
Outsourcing of Switch Monitoring & Management Services:
Switch Monitoring & Management Services is outsourced to Switch vendor for theadvantages like Continuous monitoring of ATM Switch and Support Services on 24x7 basis,deploying organized skill levels for managing switch operations to improve lead times andaccuracy on responses, etc.
Implementation of Govt. Business Module in Core Banking:
Bank has procured Govt. Business Module (GBM) covering PPF, Senior Citizen SavingsSchemes (SCSS), RBI Relief Bonds, OLTAS, EASIEST, Collection of State Tax for variousStates etc. It is expected to be implemented shortly.
Revamping of Banks Website:
Process initiated for revamping the Banks website with additional features likeuser friendliness, search engine facility, Standardized Public Grievance Redress System(SPGRS) for customers, etc.
New higher version of Internet Banking Solution
Bank is in the process of upgrading to a new higher version of Internet BankingSolution. The new version will be compatible in all Browsers (like Chrome, Firefox, opera,Safari) apart from Internet Explorer.
"Synd Protect" - Two-Factor Authentication using RSA SecurID: It is anAdvanced Solution for internet banking transactions by customers, through hard/softtokens, to prevent transfer of Funds fraudulently.
Missed Call Banking:
Missed Call Banking facilitates the customers to know the Balance Outstanding in theirlatest CASA Account.
IMPLEMENTATION OF GREEN INITIATIVES a) Bank has taken steps towards implementationof "Green Initiative in Corporate Governance" by allowing paperless compliancesthrough electronic mode. Bank has been sending soft copies of Annual Report to thosemembers / investors who have registered their email IDs with M/s. Karvy Computershare (P)Ltd., Registrar and Share Transfer Agents of the Bank. Bank is actively encouragingtransactions through alternative channel to reduce the usage of paper based paymentinstruments.
b) Discussions/proceedings of several important meetings are held where the requiredinformation/data is kept in the form of soft copies as far as possible. c) Bank is usingcorporate e-mail facility and intra-net based IP messaging system and thus reducingdependency on paper based communication.
d) Various periodical and ad hoc reports required by the users across the Bank arebeing provided in an electronic form obviating the need for paper based reports.
e) 100 % adherence to Green Initiative by Direct Credit to accounts of Bond Holders /Vendors, there by Totally eliminating paper based payments.
OTHER SERVICES: SAFE-DEPOSIT LOCKERS
Locker Module Software for efficient Management of Safe Deposit Lockers implemented inall branches having Safe Deposit Locker facility.
Locker Charges made competitive with nominal rents to benefit cross section of theclientele.
Cash Deposit Ratio (CDR) is maintained at a satisfactory level of 0.30% as on31.03.2014 against the Average CDR of the Bank for the year 2013-14 @ 0.40%.
All the Cash Vans attached to our Currency Chests/
Cash Pooling Centres are GPRS enabled.
At present there are 44 Currency Chests. Two new Currency Chests, one at Kasaragod(Kerala) and the other at Ghaziabad(Uttar Pradesh) will be operationalised shortly.
Clean Note Policy as per RBI expectations is implemented. Under RBI Clean Note Policy,banks are required to provide Note Sorting Machines to Branches and Currency Chests. Bankhas taken steps to comply with it.
CHEQUE TRUNCATION SYSTEM (CTS):
CTS is mandatory from 01.04.2013. In this regard, Bank has ensured
CTS 2010 Standard compliant Cheque books issued to all branches / accountholders.
The DDs issued are also CTS enabled.
Specific guidelines are issued to the branches regarding modus operandi of dealingwith old and new cheque books and also to exchange new cheque books wherever eligible.
CTS clearing activities is Grid-based. This is implemented throughout the country in aphased manner. There are 66 MICR centers where Centralised Inward Clearing has beenimplemented in full. 95% of the Non MICR centers are also covered by Centralised InwardClearing.
CENTRALISED PENSION PROCESSING CENTRE (CPPC):
The Bank has already migrated Central Civil Pensions into Govt. Business Module fromFebruary 2012 for which Bank has received its approvals from CPAO New Delhi and RBI Mumbaiand the same is handled through CPPC smoothly. Migration of Telecom Pensions into Govt.Business Module is also completed and approvals from concerned authorities and RBI standreceived. CPPC started disbursing Defence Pension payments for all new PPOs issuedw.e.f.01.04.2012. Migration of Defence Pension to Centralised system for ensuring improvedservices to this category is in process / progress.
HUMAN RESOURCE DEVELOPMENT
Bank recognizes its employees as the most vibrant and valuable asset. HR plays aparamount role in developing human capital in tune with the Vision and Mission of theBank. Bank is constantly focussing on HR dimension by developing and retaining theworkforce to meet the future HR challenges in the Banking Sector.
Investment in employees training and development has enabled the Bank to preparethe staff members to handle new HR challenges and make them future ready.
The Human Capital of the Bank as on 31.03.2014 is as under:
|Category ||31.03.2013 ||31.03.2014 |
|Officers ||10394 ||11257 |
|Clerks ||10360 ||10270 |
|Sub staff ||3743 ||3534 |
|Sweepers ||2109 ||2161 |
|Total ||26606 ||27222 |
|AVERAGE AGE PROFILE || || |
|Category ||31.03.2013 ||31.03.2014 |
|Executives ||56.06 ||56.24 |
|Officers ||45.23 ||42.90 |
|Clerks ||47.08 ||45.91 |
|Sub staff ||49.72 ||50.39 |
|Bank as whole ||46.72 ||45.45 |
COMPLIANCE TO GOVERNMENT GUIDELINES
During the year the Bank has complied with the guidelines received from the Governmentof India on various H.R. matters in the areas of Promotions, Recruitment and PerformanceAppraisal etc.
Bank had made direct recruitments for inducting skilled manpower in specialized areaslike Finance, Marketing, Security, Law and Official Language. It is periodically reviewingthe skill gaps and Officers with professional qualifications are recruited to fill up theskill gaps depending upon the future needs and challenges.
The Bank has also participated in the Common Recruitment Process conducted by IBPS andinducted Probationary Officers and Probationary Clerks during the year.
The details of recruitments made in the bank for the year 2013-2014 is shown below
|Category ||No of Officers |
|Probationary Officers ||1383 |
|Probationary Clerks ||1267 |
|Finance Officers ||03 |
|Asst Manager(Marketing ) ||16 |
|Chartered Accountants ||03 |
|Security Officers ||03 |
|Law Officers ||20 |
|Official Language Officers ||01 |
|Total ||2696 |
The hiring growth plan proposed during 2014 2015 through the Common RecruitmentProcess by IBPS is depicted below
|Category ||No of Officers |
|Probationary Officers ||2000 |
|Probationary Clerks ||2300 |
|Specialist Officers ||750 |
|Out of 750 , 686 through IBPS & || |
|64 through lateral recruitment || |
Bank has a Board approved policy for creating a separate vertical for Specialist Cadrewith a career path.
A process for lateral recruitment of Executives is initiated in the category of PublicRelations, Chief Economist, Information Technology and Risk Management.
Bank is envisaging to recruit 400 officers for the year 2014- 2015 through one year" Strategic Talent Pipeline Building Programme " in reputed training instituteswhich includes nine months class room training and three months internship in the bank
The Bank provides optimum opportunities to its employees to fulfill their growingaspirations for faster career progression and motivate them to shoulder higherresponsibilities. The promotion policy has also been fine-tuned to reward outstandingperformers and is in sync with the succession planning.
During the year 2013-14, Bank had promoted 647 employees in various scales as under
|S No. || ||Promotions ||Numbers |
| ||From ||To || |
|01 ||TEGS-VI ||TEGS-VII ||13 |
|02 ||SMGS-V ||TEGS-VI ||23 |
|03 ||SMGS-IV ||SMGS-V ||54 |
|04 ||MMGS-III ||SMGS -IV ||57 |
|05 ||MMGS-II ||MMGS-III ||200 |
|06 ||JMGS-I ||MMGS-II ||300 |
| ||TOTAL || ||647 |
TALENT GROOMING & RETENTION
Bank is reimbursing examination fees besides paying incentives for passing variousprofessional examinations like NISM, IRDA, CISA, CISSP, ORACLE, Risk ManagementExaminations, Courses conducted by IIBF etc. with the objective of talent grooming andretention
STAFF WELFARE MEASURES
1. Banks Quarters
As a part of staff welfare measures, Bank is providing additional quarters at Bangaloreand construction of 100 flats at Vasundhara, Ghaziabad is nearing completion. Bank hasalso purchased 19 additional flats in Chennai and two flats at Thiruvananthapuram.
Maintenance and repair works have been undertaken by Bank owned properties to enhancetheir usability.
2. Scheme for Payment of Ex-gratia Lump sum
The Bank has formulated a Scheme for appointment on compassionate grounds/payment ofLump sum compensation to the family of the deceased employee/ employee retiring on medicalgrounds, based on the Government guidelines.
Totally 03 cases are considered under the Scheme for Appointment and 08 cases areconsidered for payment of Lump sum amounting to Rs 49.86 lakh in the current year (upto31.03.2014)
The cadre-wise ceiling on Ex-gratia amount payable is as follows: (in Rs )
|Cadre ||Maximum amount |
|Officers ||8.00 lakhs |
|Clerks ||7.00 lakhs |
|Sub Staff ||6.00 lakhs |
3. Compensation to Bank Employees killed in Bank Robberies & Terrorist Incidents
Bank has formulated a Scheme as per Govt guidelines for Payment of Compensation andReward so as to motivate the Bank employees and members of public resisting Bankrobberies, terrorist incidents including left-wing extremism.
In case of death, the family of deceased will be given compensation by the Bank asfollows:
|Category ||Cadre ||Maximum amount |
|Bank Employee ||Officers ||20.00 lakhs |
| ||Clerks /Sub Staff ||10.00 lakhs |
|Other than bank employee ||Customers/ members of the public ||3.00 lakhs |
In case of Bank employees / customers / members of public who actively resist Bankrobberies and terrorist attacks on Banks, the Bank may consider a cash reward notexceeding Rs 2.00 lakhs.
The Bank will look after educational expenses of the children of the deceased up to andinclusive of graduation and will give immediate employment to one member of the family ofthe deceased as per applicable rules.
The Bank has paid an amount of Rs 3.05 lakhs as compensation to our customers of KaveliBranch in Hyderabad Rural Region, for resisting the bank robbery.
RESERVATION TO SC/ST/OBC
The Bank follows the reservation policy for SCs, STs and OBCs as prescribed byGovernment of India from time to time and has been extending applicable reservations/concessions to SC/ST/OBC/PWD employees in recruitment/ promotions strictly as perGovernment guidelines.
A separate SC/ST Cell and OBC Cell are functioning at Head Office to redress thegrievances of SC/ST/OBC employees working in the Bank and are currently headed by GeneralManager designated as Chief Liaison Officer.
The progress made in the implementation of the Reservation Policy is placed to theBoard once in a Year.
The Post based Reservation Roster is displayed on the website of the bank in complianceto the directions of the Government.
The Pre-Promotion training is also extended to OBC employees, in addition to SC/STemployees. During the year, 868 SC/ST/OBC Clerical employees and 836 SC/ST Officeremployees have been imparted Pre-Promotion training to prepare them for promotion to thenext respective cadres. In all 4923 SC/ST/OBC employees have been given in-house trainingat SIBM, Manipal and other Staff Training Centres.
TRAINING AND DEVELOPMENT
Syndicate Institute of Bank Management, (SIBM), Manipal at the apex level and the sevenTraining Centres at Bangalore, Chennai, Delhi, Ernakulam, Hyderabad, Kolkata & Mumbaicater to the training needs of the Bank by conducting various types of training programmesfor different cadres of employees.
During the year 2013-2014, 196 Programmes covering 5476 Officers and 107 Programmescovering 2951 workmen employees were conducted by the Training System. Thus a Total of8427 employees were trained through 303 programmes. In addition, 378 executives/ officerswere deputed to external training programmes conducted by training institutes of repute inIndia. Further 12 executives/officers were deputed to overseas training programmes. Duringthe year 2843 Officers and 2080 Clerks/sub staff belonging to SC/ST/OBC category wereimparted training.
The Training System has also devised a new programme to groom the newly recruitedofficers in etiquette and manners for effective and impressionable interaction with thecustomers by the Front Line Employees.
SIBM conducted training programme on Forex and Credit Management. The Forex trainingincluded on the job training of one month at the designated branches. Training programmewas also conducted on disciplinary proceedings / IR issues.
On-Line Learning System was inaugurated by the Chairman and Managing Director on16-08-2013 at Head Office. It is a technology based learning system to the employees whichminimizes the expenditure and overheads.
IMPLEMENTATION OF OFFICIAL LANGUAGE
The Bank has been displaying a strong and abiding commitment to encourage the greateruse of Hindi in various forms not only because it is the policy of the Government of Indiabut also as an ideal and powerful medium of inclusive banking. The Bank made noteworthyprogress under the implementation of Official Language and won many prizes at variouslevels during the year under review. Regional Office, Panaji was awarded second prize bythe Government of India, Ministry of Home Affairs, Dept.of Official Language. Apart fromthis, Regional Office Ahmadabad, Agra, Coimbatore, Mysore and Training Centre, Bangalorehave received awards from respective Town Official Language Implementation Committees. Ourin house Hindi magazine Jagrithi got 4th place in Hindi House Magazine Competition for theyear 2013. As at March 2014, around 99% of employees have obtained working knowledge ofHindi and the Bank has notified 2075 branches under Rule 10(4) of O. L. Rules, 1976.
In the sphere of using Information Technology in the Official Language, the Bank hasfurthened the use of Unicode package for Word Processing and also made bilingual (Hindi& English) provision in all the ATM screens of the Bank. The Bank has taken CorporateLicense for Script Magic software for usage of Hindi in CBS branches forgenerating pass book entries, accounts statements etc. The Banks Corporate Websiteis made bilingual with Unicode based. A separate Web Page has been created in website.Quarterly Hindi Statement is placed under automated data flow and bilingual applicationspertaining to products of the bank are loaded on the website.
To encourage effective implementation of Official Language in the Bank, 47 employeeswere awarded cash incentives under excellent performance in Hindi as well as excellentusers of Hindi on computers. The Bank has conducted an Annual All India Hindi EssayCompetition for its employees and cash prizes were given to the winners.
Rajbhasha Nirdeshika, Scriptmagic, Unicode & Hindi noting relatedprinted help literature got released during the year.
Rajbhasha Sangoshti for Executives, a Seminar on Women Empowerment in Hindi inconnection with Hindi Month celebrations and Annual Official Language OfficersConference were organized.
The Third Sub Committee of the Committee of Parliament on Official Language inspectedthe Banks HO/CO at Bangalore on 6.7.2013 and lauded the efforts put in by the Bank.
Joint Secretary (OL) & Joint Director (OL), Ministry of Finance, Govt. of Indiainspected our Head Office/Corporate Office on 14.9.2013 at Bangalore and appreciated theefforts of the Bank in the field of Official Language Implementation.
A cartoon animation CD in Hindi on Financial Inclusion was released on the occasion ofFounders Day Celebration on 20.10.2013.
Drafting & Evidence Sub Committee of the Committee of Parliament had discussionwith our RO: Ahmadabad, Chandigarh and Lucknow along with the member offices of respectiveTown Official Language Implementation Committees and lauded the efforts put in by the Bankin the field of Official Language implementation. The Bank is the convenor of TownOfficial Language Implementation Committees of Kannur, Ananthapur, Bijapur, Meerut,Ghaziabad, Karwar.
Official Language Implementation Committees are constituted in all the branches of thebank to motivate and guide the employees towards effective implementation of OfficialLanguage Policy of the Govt. of India.
Believing that quality customer service is not only important but inevitable forsurvival and growth, Bank has been constantly reviewing the efficacy of existing system ofcustomer service. Banks customer centric approach acts as a key differential inshaping future business potential and also in acquiring, retaining and growing thecustomer base.
The Bank has Board approved policies on customer service, deposits, customer grievanceredressal, cheque collection, compensation payable on account of various deficiencies inservice etc. These are well displayed on the Banks website for the convenience ofthe customers, besides displaying at each branch of the Bank.
The Grievances Redressal Policy of the Bank is meant for minimizing instances ofcustomer complaints and grievances through proper service delivery and review mechanismand to ensure prompt redressal of customer complaints and grievances.
Customer Service Initiatives taken during 2013-14
Bank has taken steps to introduce internal ombudsman scheme to redress the customergrievances expeditiously
With a view to improving the Customer Service in the branches and sensitize thestaff, policy on Customer Service has been adopted based on the followingcardinal principles viz., Courtesy, Communication, Efficiency & timeliness, GeneralManagement of the branches, knowledge, etc.
The Bank is a Member of Banking Codes and Standards Board of India (BCSBI) andcommitted to implement the provisions of Code of Banks Commitment to Customers andCode of Banks Commitment to MSE Customers in letter and spirit.
A Customer Meet was organized in association with BCSBI at New Delhi on 28.02.2014in order to educate/ sensitize Customers about BCSBI Codes provisions.
Damodaran Committee on customer service, Bank has implemented 128 recommendations andremaining 20 recommendations are under various stages of implementation.
Matters relating to Customer Service and Customer complaints are discussed in theperiodical meeting held at Branches/Regional Offices with the involvement of Customers/Senior Citizens.
Standing Committee on Customer Service meet at quarterly intervals at CorporateOffice and review the customer service related matters / complaints etc.
The Customer Service related matters are also deliberated during quarterly meetingof Customer Service Committee of the Board and Meeting of Board of Directors at halfyearly intervals.
Executives during their visit to branches interact with customers and reviewmatters relating to Customer Service/ complaints redressal and implementation of BCSBICodes provisions.
Bank has introduced customer friendly products and services such as Synd NavratnaAccounts, Premium SB Accounts, Multi-city Accounts, Credit Card, Debit/ ATM Card, InternetBanking, SMS Banking, Mobile Banking, Point of Sales Terminals, NEFT / RTGS, Online taxremittances, etc.
Bank has put in place a robust Customer Grievance Redressal Mechanism for quickredressal of customer grievances. Based on number of complaints received and time takenfor Redressal of complaints, all ROs are being graded A: Outstanding, B: Good, C:Satisfactory and C: Poor on quarterly basis.
Uniform Customer Meet was organized in all branches on 23.05.2013.Executives fromHO/CO/RO visited the Meet held at busy branches and obtained feedback from Customers.
For the first time, BCSBI has started rating Banks on the basis of level ofcompliance of BCSBI Codes. The rating is labeled as "BCSBI Code-ComplianceRating". The Bank has been rated as "ABOVE AVERAGE". It is alsoindicated that the Banks score is slightly better than the average score for PSBs.
Four types of customer kiosks are provided (Passbook Printing, Internet Bankingfacility, cash deposit and Cheque Deposit facility) in 20 identified locations. Thesee-lounges will be functioning 24X7 basis. Such lounges will be extended at strategiclocations all over the country in a phased manner.
CORPORATE SOCIAL RESPONSIBILITY
Being a responsible social citizen, Bank recognizes its responsibility towards societyand actively involved itself in various CSR (Corporate Social Responsibility) activitieswhich aimed at socio-economic transformation, rural upliftment & sustainabledevelopment of the society. Some of the Banks initiatives in the field of CorporateSocial Responsibility taken during the year include donation to the orphanages for thedisabled, viklang sahayata samiti, old age home, trust, temple, rural academy, hospital,charitable foundations for supporting their various social activities; distribution ofmid-day meals to the underprivileged children; distribution of fans, watercoolers/purifiers to Govt. schools; installation of solar lights and hand pumps in certaindistricts; donation towards assisting victims of natural calamities like flood etc.
NEW PRODUCT INITIATIVES
Bank has always endeavored to bring innovation in new products as well as developingthe existing ones by revisiting and reengineering them in line with changing customerpreferences.
During the year the following new products have been introduced by the Bank:
1) SyndDisha: Bank has launched a new deposit product SyndDisha on February6, 2014. The deposit will be for a period of 444 days and carries attractive interest rateof 9.25% p.a. Senior citizens will get an additional interest of 0.50% p.a. This productwas offered for limited period only and was applicable for deposits of less than Rs 10crore only.
Commemorating its 88th foundation day on 20.10.2013, Bank has launched 5 new productsviz. SyndDoctor, SyndMarble, SyndTextile, SyndCashew and SyndTransport to address thecredit needs of MSME sector. These products are tailor made schemes, to meet the creditrequirements of qualified doctors, Marble, Granite and Stone Crushing Units; Textileunits, Cashew Processing units and transport operators. The details are provided as under:
This product is made to meet the credit requirements of qualified Doctors for settingup Clinic, Nursing Home, Pathological lab, Drug/surgical store etc.
This product is made for financing Marble, Granite and Stone Crushing Units to acquirenew equipments / machinery/vehicles to start and for expansion of activity and to meet theWorking Capital requirement.
This product is made to meet the credit requirements of units engaged in textile sectorand manufacture of readymade garments in order to acquire new equipments / machinery/vehicles to start the unit and to meet the Working Capital requirement.
This product is made to meet the credit requirements of Cashew Processing units toacquire new machinery/ equipments / vehicles / stock required for the unit leading tovalue addition, technology upgradation and shelf life enhancement.
This product is made for financing Transport Operators for purchase of all makes ofTransport vehicles, Utility vehicles, Light Commercial, Heavy Commercial vehicles forgoods transport and Passenger vehicles like Autorikshaws, Tourist vehicles, Taxies, Cabsfor passenger transport registered for commercial purpose.
MARKETING & FEE INCOME PRODUCTS
With the compression of spreads from the core activities of banking, the necessity isfelt in augmenting fee based income which acts as cushion for Banks income. In orderto have a focused approach to augment fee based income, Bank has created a separatevertical at Corporate Office and Regional Offices to accelerate marketing efforts toaugment fee based income.
Cash Management Services
The Bank offers a state-of-the art technology driven products to corporates, privateand foreign banks for efficient management of account receivables and payments.
The Bank offers CMS services to its clients through all its Branches across thecountry. Under the Collections, Cash Collection, Auto Debit facility through Mandates, andCentralized Cheque Debit facilities are being offered. Payment of Dividend Warrants /Interest Warrants / DD Drawing arrangement and Remote DD Printing facilities are beingoffered under Payments.
Applications Supported by Blocked Amount (ASBA)
Bank is registered with SEBI as Self Certified Syndicate Bank (SCSB) for providingApplications Supported by Blocked Amount (ASBA) to its customers. Bank has integrated ASBAfacility with its Core Banking Solution during the year. ASBA process is available in allpublic issues made through the book building route and rights issues and will co-existwith the practices, wherein cheque is used as a mode of making payment.
New Pension System (NPS)
The Bank is registered with the Pension Fund Regulatory and Development Authority(PFRDA) as Point of Presence (PoP) for offering various services under the New PensionSystem-a scheme introduced by the Government of India-for providing old age incomesecurity. The Bank has already registered over 2050 branches with NSDL for offeringvarious services under the scope of the NPS as Point of Presence Service Provider(PoP-SP). The Bank has also been appointed as Aggregator by PFRDA for NPS-Lite scheme.
Depository Participant Services
The Bank is a Depository Participant of CDSL. This facility enables customers to keeptheir Capital Market Securities in electronic form. The 3-in-1 account cum on-line tradingfacility under the brand-name "Synd e-Trade" was launched by the Bank on October24, 2011. The facility comprises of the CASA account, Demat account and Trading accountfor enabling our customers to trade in shares online, using the funds in the CASA accountand dematerialized securities in the DP account through the Straight Through Process.
1. Life Insurance:
Bank had signed a Memorandum of Understanding (MOU) with Life Insurance Corporationof India (LIC) on 27th June 2013, as a Corporate Agent for distribution of Life InsuranceProducts. Before launching commercial operations on 11.10.2013, the Bank had conductedone-day workshops across all Regions and has developed a team of 145 Specified Persons forsoliciting life insurance business. Bank collected premium of Rs 3047.37 Lakh and earnedcommission of Rs 439.12 Lakh during first year of its operations.
Bank organised "Synd LIC Saptah-Raise the Bar" campaign from 02.12.2013to 07.12.2013 by marketing of 15119 policies- highest by any of the Bancassurance partnersof LIC of India during a week.
Under "SyndSuraksha" Group Insurance Policy taken from LIC of India, Bankis offering Life Insurance cover of Rs 1.00 lakh (natural death) and of Rs 2.00 lakh(accidental death) at nominal premium.
Bank offers Life Insurance cover to Housing Loan borrowers, Educational Loanborrowers and for account holders under Financial Inclusion.
2. General Insurance:
Bank has a Corporate Agency tie-up with United India Insurance Company Limited(UIICO) for distribution of General Insurance products, including SyndArogya (a GroupMediclaim-Cum-Personal Accident Policy with family floater advantage) at competitivepremium for its Account Holders.
Bank celebrated 14th February 2014 as Health Insurance Day by marketing 10,098SyndArogya (Mediclaim) Policies-Highest in a Single Day by any of the BancassurancePartners of United India Insurance Company Ltd.
During the year 2013-14, Bank has collected premium of Rs 5404.26 lakh and earned acommission of Rs 556.39 lakh, compared to Rs 4701.90 lakh and Rs 463.26 lakh respectivelyduring the previous year.
CARD BUSINESS Credit Card Product:
Bank, in association with VISA International, offers Gold and Classic Credit Cardswhich can be used at ATMs, Point-of Sale Terminals (POS) and Internet, w.e.f 20.10.2003.Bank has issued 77,592 credit cards till 31.03.2014.
Debit Card Product:
1. Debit Cards: The Bank launched Global Debit Cards in association withVISA on 29.03.2003 and in association with Master Card (Maestro Brand) on 22.06.2011. TheBank has been issuing VISA International Gold Debit Cards with higher transaction limitsw.e.f 20.10.2012. The Bank has issued 69,11,468 Debit Cards till 31.03.2014.
2. SyndicateBank RuPay Kisan Card: Bank has been issuing RuPay Kisan Cardsin association with National Payment Corporation of India (NPCI) w.e.f. 20.10.2012. Thesecards are meant for domestic use, which can be operated in ATMs only. The Bank has sinceissued 1,16,903 SKCC Cards till 31.03.2014.
Point of Sale (POS) Acquiring:
Bank ventured into the Merchant Acquiring business on 02.10.2009. All its POS terminalsdo comply with VISA / MasterCard / RuPay specified standards and are fully compliant tohandle EMV and PIN based transactions for all types of Cards. issued by Banks. As on31.03.2014, Bank had installed 1,772 POS Terminals, out of which 1,192 terminals wereinstalled during the year.
STRATEGIC ALLIANCES & JOINT VENTURES a) MOU signed with LIC: Bank had signed aMemorandum of Understanding (MOU) with Life Insurance Corporation of India (LIC) on 27thJune 2013, as a Corporate Agent for distribution of Life Insurance Products on fee basiswithout any risk participation.
b) Corporate Agency Tie-up with UIIC: Bank has a
Corporate Agency tie-up with United India Insurance Company Limited for distribution ofGeneral Insurance products, including SyndArogya- a Group Mediclaim Insurance Cum PersonalAccident policy-which is available at competitive premium for SyndicateBank AccountHolders.
c) Mutual Fund Distribution Venture: Bank continued developing its team ofqualified persons facilitating informed selling of mutual funds products. As on31.03.2014, the Bank had a team of 380 NISM (Series-V-A) Certified Persons and 154 EUINcompliant staff, compared to 134 and 23 respectively as on 31.03.2013.
COMMITTEES VISITED DURING THE YEAR
"Parliamentary Standing Committee on Labour" visited Bangalore on 7/6/2013for on the spot study of deployment of contract/casual workers/sanitation workers forperennial nature of jobs.
"Parliamentary Standing Committee on Welfare of Scheduled Caste and ScheduledTribes" visited Port Blair on 15/06/2013 to study all matters concerning the welfareof the Scheduled Castes and Scheduled Tribes, falling within the purview of the UnionGovernment and the Union Territories.
"Parliamentary Committee on Government Assurances" visited Bangalore on09/07/2013 to scrutinize the matters regarding siphoning of money by financialinstitutions in debt waiver scheme and also pertaining to meeting regarding liberallending by banks.
"Parliamentary Standing Committee on Papers Laid on the Table, Rajya Sabha"visited Bangalore on 13/9/2013 for comprehensive review of the laying of Annual Reportsand Audited Accounts of the Bank.
Govt. Officials from Ministry of Finance visited and inspected our HeadOffice/Corporate Office on 14.9.2013 at Bangalore.
"Parliamentary Standing Committee on Industry- Credit Facilitation Scheme ofNSIC" visited Bangalore on 11/01/2014 to evaluate Banks performance underCredit Facilitation Scheme of NSIC.
The Third Sub Committee of the Committee of Parliament on Official Language inspectedthe Banks HO/CO at Bangalore on 6.7.2013 and Drafting & Evidence Sub Committeeof the Committee of Parliament held discussion programme with our RO:Ahmedabad, Chandigarhand Lucknow and the Chairman of respective Town Official Language ImplementationCommittees and with some of the member banks.
Compliance Policy approved by the Board of Directors of the Bank articulates that thecompliance function is an integral part of governance along with the internal control andrisk management process. The Compliance Department headed by a Chief Compliance Officer(in the rank of Deputy General Manager) oversees the compliance functions in the Bank andassists the top management in managing the Compliance Risk.
Continuing with the Banks commitment to high compliance standards, compliancefunction is reviewed regularly for making improvements. The compliance policy is reviewedevery year and amendments, if necessary are carried out based on the experience gained andutility aspect.
RIGHT TO INFORMATION ACT, 2005
The Bank has implemented the relevant provisions of the Act with effect from October2005. The information related to the Bank as stipulated under the Act is displayed on theBanks website.
The Appellate Authorities for the Bank under the Act and the Public InformationOfficers (PIOs) and Alternate Public Information Officers (APIOs) at various levels havebeen designated. The Bank has clearly spelt out the roles and responsibilities atdifferent levels under the Act.
As directed by the Parliamentary Committee, the Bank has constituted a MonitoringCommittee at Apex level to oversee the implementation of the RTI Act. During the year, theCommittee has reviewed the effectiveness of implementation of the RTI Act in the Bank.
During the year, the Bank has disposed of all the applications and all appealsreceived, within the stipulated time. Since the inception of the Act, CIC has not imposedany penalty so far on PIOs of the Bank.
RTI Applications were received at HRDD predominantly on the matters of RecruitmentProcess, Promotion Process, APARs, Reservation Policy, compassionate appointments, Exgratia payments etc and they have been disposed of within the time frame prescribed underthe RTI Act.
INTERNAL CONTROL SYSTEM
The Bank has an Inspection/ Audit Department at Head Office, Manipal that examines theadherence to Systems, Policies and Procedures of the Bank. The guidelines received oninternal control from RBI, Government of India, Banks Board and the Audit Committeeof the Board and Audit Committee of Executives become part of the Internal Control Systemfor better risk management.
Eight Regional Inspectorates operate as extended arms of the Inspection Department (ID)to carry out various types of Audits of Branches & Offices to examine adherence toSystems of internal control, Policy and Procedures for effective banking supervision toconduct the Business of the Bank in a prudent manner in accordance with the approvedinternal Audit Policy of the Bank. These internal controls are supplemented by theeffective audit function which independently evaluates the adequacy, completeness,operational effectiveness and efficiency of the control systems within the organization.
As recommended by Basel Committee (1988), the Bank has reoriented transaction basedInternal Audit to Risk Focused Internal Audit since 2007. All the Branches are broughtunder Risk Based Internal Audit (RBIA) which is supplemented with Concurrent Audit of HighRisk areas like specialized Branches, Treasury and High volume Branches etc. Our Bank isthe first Bank to implement software based RBIA among all Public Sector Banks.
The Audit Committee of the Board (ACB) oversees the Internal Audit function of theBank. The committee guides in developing effective internal control system like Inspectionsystem and related other inspection functions. It also monitors the functioning of theAudit Committee of Executives (ACE) and Inspection Department in the Bank.
ACE is one layer above ID, has been established to monitor the entire Inspection Systemin the Bank. ACE is constituted with the Executive Director as its Chairman and 5 GeneralManagers of Head office & Corporate Offices as its members. The Committee meets morethan the minimum prescribed no. of times during the year. It monitors the implementationof Annual Audit Plan (AAP) and compliances to the major audit observations reported by theAuditors and directs the concerned Departments/ Offices to rectify the lapses.
The Bank is having well defined, Board approved policies on Risk Based Internal Audit,Concurrent Audit, Information System Audit, AML/ KYC Compliance etc. which are beingreviewed / updated on annual basis.
The AAP is drawn as per the Internal Audit Policy approved by the Board, which includesthe Schedule & Rationale for Audit work planned. During the Financial Year 2013-14,Department has completed all the projected inspections of all kinds - 12919 Audits as on31.03.2014 viz. RBIA, Credit Audits, Concurrent Audits, Currency Chest Audits, ServiceBranch Audits, Compliance Audits of Branches/ Offices and Management Audits of allControlling Offices and Functional Departments. Out of the 3250 domestic Branches as on31.03.2014, 1988 are in Low Risk, 190 are in Moderate Risk, 806 are in Medium Risk and 5are in High Risk.
In line with the guidelines issued by Department of Financial Services, Ministry ofFinance, Bank has implemented revised Audit Policy during the year and surpassed thetarget under Concurrent Audit coverage of 70% of Total Business, Advances and Deposit in534 Branches/ Offices and achieved 74.08% of Business, 78.94 % of Advances and 70.03 % ofDeposits.
The Offsite Monitoring System was set up in June 2007 as an additional and importantManagement tool to strengthen the internal control measures. It is an on-going Audit,covering all Branches. It comprises of one unit at Head Office, one each at all 43Regional Offices and
8 Regional Inspectorates. While OMC units at Regional Offices monitor the transactions/ balances of the Branches of their Regions, those in Regional Inspectorates focus on theBranches that do not have Concurrent Auditors and are reflecting persistingirregularities.
To summarise, the Banks Inspection System has been effectively monitoring thecompliance of Systems & Procedures laid down by the Board, the Regulator and theGovernment of India.
INTERNAL CONTROL AND VIGILANCE
Vigilance administration is a crucial part of the Management function, aimed atimproving the efficiency and ethical health of the organization.
Stress is laid on preventive vigilance by initiating preventive vigilance studies atbranches, conducting Preventive Vigilance Training Programmes at SIBM & other TrainingCentres of the Bank and constitution of Preventive Vigilance Committees at the brancheswith a view to ensure strict adherence to systems and procedures.
During the year under review, Preventive Vigilance Exercises were conducted in 185Branches and Surprise Verification of goods hypothecated to Bank was conducted in 254Accounts covering 134 branches.
Vigilance Awareness Week was observed throughout the Bank from 28.10.2013 to 02.11.2013in a befitting manner as part of Participative Vigilance measures.
KNOW YOUR CUSTOMER / ANTI MONEY L AUNDERING
Banks policy on Know Your Customer (KYC) norms and Anti Money Laundering (AML)measures have been reviewed/ modified in the light of RBI/Govt., of India guidelines. Themain objective of KYC policy is to prevent Bank from being used, intentionally orunintentionally, by criminal elements for money laundering or terrorist financingactivities.
Branches have been instructed to ensure that no account is opened in anonymous orfictitious/benami name and in the name of persons with a criminal background and/ orhaving connections with terrorist Organisations. All KYC guidelines are scrupulouslyfollowed and implemented.
The Security Department of the Bank has been making constant efforts to provideeffective, efficient and progressively better security solutions to all our Branches, ATMsand Offices. The Department had obtained ISO 9001:2000 Certification in May 2007, whichwas upgraded to ISO 9001:2008 in May 2010 and presently it stands extended up to 14thSeptember 2016. The Department has thus achieved the unique distinction of being the firstSecurity Department among all the Public Sector Banks to become ISO 9001:2008 compliant.
As per Guidelines, Security Audit has been conducted in respect of all Currency Chests.All Currency Chests are provided with security and surveillance equipment to efficientlysecure the premises and the contents.
ATM Security has been enhanced by introducing Second CCTV Camera to cover the Lobby andalso a Sound Alarm System. Round the clock guards have been provided at those ATM centreswhere the Police Authorities have insisted for posting of guards.
SYNDBANK SERVICES LTD
"SyndBank Services Ltd. (The Company) is a wholly owned Subsidiary ofSyndicateBank, incorporated under the provisions of the Companies Act, 1956 and domiciledin India. The Company is engaged in providing Back Office support to SyndicateBank andother Financial Institutions. The major activities undertaken by the Company during theFinancial Year 2013-14 are customer oriented services like, issue of internet bankingpasswords, following up of overdue loan accounts under retail portfolio, cheque/ cashcollection from Kiosks for select customers, debit card personalization service, assistingcustomers in filing income tax returns etc.
REGIONAL RURAL BANKS
There are 3 Regional Rural Banks sponsored by our Bank. These three RRBs are covering18 districts in 3 states, with a network of 1278 branches. RRBs sponsored by the Bank arein the top league among various RRBs of the country, in respect of key businessparameters. Total business of RRBs sponsored by the Bank stood at Rs 36532 crore.
The Total deposits and advances of the RRBs reached a level of Rs 19031 crore and Rs17501 crore, respectively. The Total Priority Sector Advances stood at Rs 14902 croreconstituting 85.15 per cent of Total advances as at 31.03.2014. Agricultural advancesreached a level of Rs 12613 crore forming 72.07 per cent of Total advances. In all, theRRBs have issued 6.87 lakh Kisan Credit Cards to farmers with an outstanding credit of Rs10530 crore. The RRBs have been making profit for so many years.
All the RRBs sponsored by our bank have moved towards implementation of CBS. All thethree RRBs have implemented NGRTGS and NEFT, APBS/NACH platform, ECS (debit) and ECS(credit), CPSMS 2.6 version. RRBs are going to install CDs and implement RuPay cards verysoon. System generated NPA is implemented in all RRBs sponsored by us. All the three RRBshave implemented FI Plan (2013-2016) as per the direction of Reserve Bank of India andGovernment of India.
BUSINESS PROMOTION CAMPAIGNS
Super Deal CASA Campaign
The strategy of emphasizing on growth of customer base and thrust on increasing theshare of CASA and core deposit has always been one of the prime objectives of the bank. Inorder to shore-up the deposit base, particularly, Low Cost Deposits, Bank has launchedSuper Deal CASA Campaign from 30/08/2013 to 31/10/2013. The campaign wasfurther extended upto 31.03.2014.
The campaign has proved successful evoking positive response from the customers andBank was able to garner a net increase of Rs 1549 crore in their CASA base.
Term Deposits Campaign
In the prevailing environment of tight market liquidity, Bank has also beenexperiencing liquidity mismatch in its funds position, due to declining inflow andincreasing outflow under the core term deposits. In order to manage the liquidity positionmore efficiently and to prevent flight of these deposits as well as to canvas more andmore fresh core term deposits by offering attractive rates, Bank has also launched thefollowing two more deposits campaigns from 26.08.2013 to 30.09.2013.-
1) MAXIMA Core Term Deposit Campaign: This campaign had targeted to propelcore term deposits of the bank by offering a Special Rate of Interest @ 9.30% p.a. on TermDeposits upto Rs 10 crores for the tenor of 399 days exact.
2) Retail Term Deposit Campaign: To take advantage of the highest Card Rateson Term Deposits and to give a boost to our Deposits level, Bank launched a "RetailTerm Deposit Campaign" for retail deposits upto Rs 1 crore.
3) "Save Tax Smartly Campaign"
To augment core term deposits under Synd Tax Shield (with tax benefits u/s 80-C ofIncome Tax Act,1961) and to increase fee based income by marketing SyndArogya (Mediclaim)Policies, Bank had organized "Save TAX Smartly" campaign from 01.01.2014to 31.03.2014 with reward and recognition to performers. The campaign has proved tobe highly successful.
OTHER INITIATIVES Synd Nayi Disha Workshop
In order to have a long term business plan for the Bank upto the year 2020 and torevisit the vision mission statements of the bank a work shop was conducted during January2014. Participants included all Top Management Cadre, Regional Managers, Select BranchManagers, Officers, Clerks and representatives of union / association and employees of theBank. A long term business plan upto 2020 has been drawn along with the road map. As amilestone, global business target of Rs 10 lakh crore was agreed to be reached as on31.03.2020. Based on the suggestions arrived at in the workshop the Vision & MissionStatements of the Bank for the period 2014-2020 are finalized.
Business Process Reengineering (BPR)
Bank has initiated process for undertaking BPR (Business Process Re-engineering) inrespect of the following after necessary clearance from the Board of Directors:
1. Human Resources Development.
2. Outsourcing of certain Back Office functions like centralised account opening etc.and areas of Marketing of products besides creating Brand image.
3. Retail & MSME
Human Resource Management System (HRMS)
Bank has initiated measures to implement HRMS package in due course which enablesautomation of majority of the HR functions. Selection of vendor is in final stages. Bankis also in the process of appointing consultants under BPR project.
Re-organization of Regions
For effective control and business development, Bank has opened two new RegionalOffices - one at Madurai and another at Ongole. With this, the Bank is having 43 regionaloffices controlling the functions of 3250 branches besides satellite offices and ultrasmall branches. Going forward, Bank may open some more Regional Offices to have effectivecontrol over the branches and ensure quick Turnaround Time. Bank proposes to open around300 new branches during the next financial year.
Bank has thought to take forward all these initiatives posting dedicated staff andgiving the project name "Synd Nayi Disha", with below given pictorialrepresentation, to gear up the staff for the challenges.
Keeping in view the changing market environment and in order to ensure quick TurnAround Time (TAT) for credit and also to ensure top executive being close to customers& branches, Bank has introduced the concept of "Field General Manager" sothat the organisation will be better equipped in meeting their present and evolving needsand challenges. This strategy of organisational restructuring provides competitive edge bymeeting the best practices and also brings in administrative efficiencies.
At present, Bank has opened 8 FGM Offices - which are very sleek model & not onemore controlling office
- to drive business & ensure recoveries by being very close to operational unitsand are operationalised since 01/11/2013. Each FGM Office will cover 6/7 Regions and willbe responsible for achievement of Business Targets including recovery targets of theRegions and the FGM office on consolidated basis. FGMOs are empowered suitably by theBoard to exercise powers relating to credit and recovery matters under Credit ApprovalCommittee process.
As part of a Banks brand building exercise and to harness its image, Bank hasrepositioned its Logo by changing the colour patterns. The logo contains predominantlyorange and yellow colours. Orange indicates Banks vibrancy, competency andconfidence through collective work and thinking. Yellow indicates innovation, backing thevibrancy and quick decision through collective work and thinking. A Brand Manual has beenprepared and supplied to all Regional Offices and Field GMs Offices. The rollout ofthis new signage will be done during the next financial year 2014-15. Apart from this bankhas brought advertisements in important news papers, on local and national important daysand also on declaration of quarterly audited / unaudited results. Besides, many of theBanks events are carried in all leading newspapers, bringing lot of mileage to theBank.
Our Bank has been recognised as "BANK OF THE YEAR" for itssplendid performance by magazine Investment Advice in its June 2013 issue.
Our Bank has been adjudged as "SECOND BEST PSU BANKS" by financialexpress Indias best banks survey 2012-13.
Farmers clubs promoted by Gurgaon Gramin Bank - our sponsored RRB - were honouredby Honble Chief Minister of Haryana by presenting a shield for its excellentperformance.
Our Bank has been presented with an award as Best Performing Bank inImplementation of SHG linkages programme in the state of Andhra Pradesh byHonble Chief Minister of Andhra Pradesh, Shri N Kiran Kumar Reddy.
Bank has been conferred "Best Bank Award" amongst all the Banks inthe RSETI movement by Sri Jairam Ramesh, Honble Minister for Rural Development,Government of India.
Bank has been awarded "Banking Excellence Award 2013 for the second bestpublic Bank in overall performance" by State forum of Bankers Club Kerala.
Bank has been awarded for Record Breaking Performance during Synd LIC Saptah(2nd to 7th December, 2013) by marketing 15119 policies Highest by any of theBancassurance Partners during a week by Life Insurance Corporation of India (LIC).
Bank has been awarded "CIO Master 2013" Certificationof Recognition for its Business Intelligence by BIZTECH2.COM
Bank has been awarded "CIO 100 ASTUTE 100
HONOREE 2013" for its Business -Technology Leadership
CHANGES IN THE BOARD: i. Shri Sudhir Kumar Jain, appointed as the Chairman &Managing Director of the Bank w.e.f. 08.07.2013.
ii. Shri T K Srivastava, appointed as the Executive Director of the Bank w.e.f.01.09.2013 iii. Shri M Rajeshwar Rao, nominated as RBI Director w.e.f. 31.05.2013.
iv. Shri Sankaran Bhaskar Iyer, nominated as Workmen Director w.e.f. 04.09.2013 v. ShriSanjay A Manjrekar, nominated as Non workmen Director w.e.f. 17.07.2013 vi. Shri Atul AGalande, elected as Shareholder Director of the Bank w.e.f. 26.06.2013.
vii. Shri M G Sanghvi, Chairman & Managing Director, superannuated on 30.06.2013.
viii. Shri Ravi Chatterjee, Executive Director, superannuated on 31.08.2013.
ix. Shri A S Rao, RBI Nominee Director, completed his term as Director of the Bank on31.05.2013.
x. Shri Narendra L Dave, Workmen Director completed his term as Director of the Bank on31.08.2013.
xi. Shri Dinkar S Punja, Non Workmen Director completed his term as Director of theBank on 12.07.2013.
DIRECTORS RESPONSIBILITY STATEMENT
The Directors, in preparation of the annual accounts for the year ended March 31, 2014,confirm the following:
That the applicable accounting standards have been followed in the preparation ofannual accounts alongwith proper explanation relating to making departures if any.
That the accounting policies, framed in accordance with the guidelines of the ReserveBank of India, were consistently applied.
That reasonable and prudent judgments and estimates were made so as to give a true andfair view of the state of affairs of the Bank as at the end of financial year and of theprofit or loss of the Bank for the year ended March 31, 2014.
That proper and sufficient care was taken for maintenance of adequate accountingrecords in accordance with the provision of applicable laws governing banks in India forsafeguarding the assets of the Bank and for preventing and detecting fraud and otherirregularities. That the annual accounts have been prepared on a going concernbasis.
The Directors wish to place on record their sincere appreciation to the public,valuable customers, shareholders and staff members for their continued support andpatronage in India and abroad.
The Directors are also indebted to the Ministry of Finance, Government of India; RBI;SEBI and other regulatory authorities, various Financial Institutions, Banks andCorrespondents in India and abroad for their unflinching and valuable support and guidancefrom time to time.
The Directors express their indebtedness to Shri M G Sanghvi, former Chairman &Managing Director and Shri Ravi Chatterjee, former Executive Director, who demitted theoffice during the year and also to Shri A S Rao, RBI nominee Director, Shri Narendra LDave, Workmen Director, Shri Dinkar S Punja, Non Workmen Director who have completed theirterm during the year for their able guidance, leadership and support which they hadprovided during their tenure in the Bank.