MANAGEMENT DISCUSSION AND ANALYSIS
Global economic prospects have improved but the road to recovery in the advancedeconomies will remain bumpy. In advanced economies, activity is expected to graduallyaccelerate, starting in the second half of 2013. Over the past six months, advancedeconomy policymakers have successfully defused two of the biggest short-term threats tothe global recovery, the threat of a euro area breakup and a sharp fiscal contraction inthe United States caused by a plunge off the "fiscal cliff." In response,financial markets have rallied on a broad front. Growth in several emerging and developingeconomies (EDEs) rebounded from the moderation. Among BRICS countries growth acceleratedin Brazil and South Africa, while it persisted below trend in China, Russia and India.Inflation has remained benign in the Advanced Economies in the absence of demand pressuresand inflation expressions remain well anchored. The inflation in EDEs present a mixedpicture. While inflation has picked up in Brazil, Russia and Turkey, it has eased inChina, Korea, Thailand and Chile.
Central Statistical Organisation's (CSOs) advance estimate of 5.0 per cent GDP growthduring financial year 2012-13 is lower than the Reserve Bank's base line projections of5.5 per cent set out in the Third Quarter Review of January, 2013 reflecting slower thanexpected growth in both industry and services. During 2013-14 economic activity isexpected to show modest improvement over last year. The out look for industrial activityremains subdued, with the pipeline of new investment drying up and existing projectsstalled by bottlenecks and implementation gaps. The RBI has projected baseline GDP growthfor financial year 2013-14 at 5.7 per cent.
By March, 2013, WPI inflation at 6.0 per cent turned out to be lower than the ReserveBanks of India's indicative projection of 6.8 per cent mainly due to sharp decline innon-food manufactured product inflation in the second half of the year. Keeping in viewthe domestic demand - supply balance, the outlook for global commodity prices and theforecasting a normal monsoon, RBI expects WPI inflation to be in range band around 5.5 percent during 2013-14.
Rajasthan's economy is primarily agricultural and pastoral. The problem of famine anddrought is deeply related with the economy of Rajasthan. According to the population of2001 about 80% of the population lives in rural areas therefore agriculturist tribes arethe biggest sufferers in time of famine and drought. Rajasthan is the leading investmentdestination in India after Maharashtra and Gujarat because of peaceful environment, betterlaw and order situation, excellent infrastructure, investment friendly climate and veryless population density. Areas facing NCR such as Bhiwadi are now buzzing with automobileand manufacturing companies. Rajasthan is pre-eminent in quarrying and mining in India.The state is the second largest source of cement. It has rich salt deposits at Sambhar,copper mines at Khetri and zinc mines at Dariba and Zawar.
Endowed with natural beauty and a great history, tourism is flourishing in Rajasthan.The palaces of Jaipur, lakes of Udaipur and desert forts of Jodhpur, Bikaner &Jaisalmer are among the most preferred destination of many tourists, Indian and foreign. Aspin-off of tourism has been the growth of the handicrafts industry. Tourism providesa big boost to the economy of Rajasthan. Recently HPCL signs a MoU with RajasthanGovernment for 9MMTPA Refinery-cum-Petrochemical Complex at Barmer in Rajsthan.
DEVELOPMENTS IN THE FINANCIAL SECTOR
The year 2012-13 witnessed a sharp decline in the advances growth of scheduledcommercial banks (SCBs) while deposit growth also subdued. The year-on-year aggregatedeposits and advances growth of SCBs stood at 13.2% and 13.9% respectively as at end-March2013, compared to 17.4% and 19.3% respectively during the previous year.
Growth slowdown, persistent inflation and the twin deficit risks came to the foreduring 2012-13 and enervated the Indian economy endangering the reversal of its declininggrowth path.
Amidst trade-offs, monetary policy factored in increased growth risks and shifted itsstance to calibrated easing to address the growth slow down as headline inflationgradually moderated. The Government also launched concerted policy action and reformsduring H2 of 2012-13. These reforms, with fuller implementation, are expected to arrestthe downward spiral and kick in the modest recovery in 2013-14. Some of the importantpolicy developments:
Interest subvention of 1 per cent on housing loans extended to loans upto Rs.15lakh, where cost of the house does not exceed to Rs. 25 lakh.
Small individual investors will get no-frills demat accounts for trading instocks, mutual funds and other securities without any annual maintenance charges forholdings up to Rs.50000. Also, the charges would be capped at a maximum of Rs.100 a yearif the portfolio value is up to Rs.2 lakh.
RBI released the final guidelines for Indian Banks on BASEL-III. Banks will haveto comply with these norms between April, 2013 and March, 2018.
RBI has notified Banks to obliterate the foreclosure charges (prepaymentcharges) on floating rate home loans. This will lead to reduction in the discriminationbetween existing and new borrower; and competition among banks will result in finerpricing of floating rate home loan.
The central role in financial inclusion has to be played by banks. They need tofocus on transactions in accounts opened under financial inclusion. Only banks can offerthe entire suite of products required to usher in meaningful financial inclusion.
RBI has allowed Banks to establish outlet for BCs in rural centres to boost theGovernment's financial inclusion programme.
RBI has advised all Banks to allow their customers to use the NationalElectronic Funds Transfer (NEFT) facility for repaying loans.
The borrowing limit of Scheduled Commercial Banks (SCBs) under the MarginalStanding Facility (MSF) raised from 1% to 2% of their Net Demand and Time Liabilities.
Interest Subvention scheme for short-term crop loan to be continued.
Companies investing Rs.100 crore or more in plant and machinery during theperiod 01.04.2013 to 31.03.2015 will be entitled to deduct an investment allowance of 15%of the investment.
Guidelines regarding financial restructuring of DISCOMS have been announced.State Government urged to prepare the financial restructuring plan, quickly sign MoU andtake advantage of the scheme.
Additional deduction of interest up to Rs.1.00 lac for a person taking firsthome loan up to Rs.25.00 lac during period 01.04.2013 to 31.03.2014.
All Branches of Public Sector Banks to have ATM by 31.03.2014.
Proposal to set up India's first women's Bank as a Public Sector Bank.
OPPORTUNITIES, CHALLENGES AND OUTLOOK
The Union Budget 2013-14 has projected the GDP Growth for 2013-14 at 8% whichexpected to boost the demand for credit and other services from the banking system. TheCabinet Committee on Investment (CCI) has been set up to over come the slow progress ofbig projects. The fiscal deficit for the year 2012-13 contained at 5.2% and for theyear 2013-14 estimated at 4.8%.
The foremost challenges before the Bank continues to be improving its market share bothin the State of Rajasthan and on an all-India basis with emphasis on maintaining assetquality, utilizing advanced technology for increase in business and profitability,improving risk management systems, increasing net interest margin, increasing non-fundbased business sizably and achieving further improvement in the customer service byadopting best Corporate Governance practices.
The overall business of the Bank (deposits plus gross advances) reached a level ofRs.130590 crore as at end-March 2013 as against Rs.111558 core as at end-March 2012,recording a growth of Rs.19032 crore (17.06%). The total deposits increased by Rs.10544crore (17.12%) to reach a level of Rs.72116 crore while advances increased by Rs.8489crore (16.98%) to reach a level of Rs. 58474 crore by end-March 2013. The cost of depositsof the Bank increased from 6.85% in 2011-12 to 7.13% in 2012-13, while yield on advancesimproved from 11.51% to 11.64%.
TREASURY AND INVESTMENTS
During the current financial year, growth has slowed and inflation remained above theReserve Banks comfort level. Monetary Policy has responded to this evolvinggrowth-inflation dynamics through calibrated easing. The Reserve Bank front-loaded areduction in its repo rate by 50 bps in April 2012. Even as elevated inflation and thetwin deficits have severely restricted the space for further easing of the policy ratesince April 2012, subsequent measures were directed towards ensuring adequate liquidity tofacilitate a turnaround in credit deployment to productive sectors for supporting growth.As part of liquidity management measures, the CRR was reduced in two stages by 50 bps in apre-emptive manner to ease monetary and liquidity conditions. Also, the statutoryliquidity ratio (SLR) of scheduled commercial banks (SCBs) was reduced to improve thecredit conditions. Further more, apart from supplying liquidity through daily liquidityadjustment facility (LAF), the Reserve Bank made active use of the auctions under outrightopen market operations (OMOs) and injected primary liquidity of about Rs.1.3 trillion. Thejudicious use of the two sets of instruments, i.e., keeping the policy rate unchanged fromApril to December and proactive liquidity easing measures conferred dual benefits thatwere evident as inflation gradually declined from its peak and credit off-take showedsigns of improvements during most of November and December 2012. Inflation, however,continues to remain above the Reserve Banks comfort level. In the 'Third QuarterReview of Monetary Policy 2012-13', Repo rate was slashed by 25 basis points at 7.75%against 8.00% earlier, and Cash Reserve Ratio (CRR) of scheduled banks was also reduced by25 basis points from 4.25% to 4.0% of their net demand and time liabilities (NDTL).Continuing with this RBI again cut the Repo Rate by 25 basis point in March, 2013,bringing the Repo rate down to 7.50%.
The yield on the 10 year Benchmark security eased to 8.12% from 8.74% during the periodApril to July, however August saw the yield firming up again as a result of cut in SLRrequirements. From September onwards on the back of the reform measures announced by theGovernment and subsequent cut in the repo and frequent OMOs announced by the RBI, the 10year benchmark yield eased further and touched a low of 7.78%. This gave us theopportunity to book profit in GSec.
Equity market during the first quarter of the year was in red mainly on the issues likeGAAR & S&Ps negative outlook on India and increasing worry on Eurozone.However the market remained largely in the green territory during the second and thirdquarter as a result of various reform measures taken by the government and continued FIIinflows. During the last quarter the market plunged again as GDP growth failed to pickupand recorded a dismal 4.5% growth in the third quarter. The negative sentiment accentuatedfurther as the Union Budget for FY 2014 presented in the Parliament failed to support thesentiment, though Finance minister stuck to the fiscal deficit targets and providedmeasures on social infrastructures. The Budget fell short of any big ticket, policyoriented thrust to boost growth. The sentiment remained bearish on account of Eurozoneconcern. During the year Bank invested in IPOs/OFSs of companies with proven record/soundfundamentals and also undertook trading in the secondary market to maximize returns.
The Banks net investment increased from Rs.16669 crore as on 31stMarch 2012 to Rs.20146 crore as on 31st March 2013. The yield on investments,excluding profits, improved from 7.48% in 2011-12 to 7.64% in 2012-13. The yield oninvestment including profit improved from 7.67% to 8.04% during the same period.
NET INTEREST INCOME
The Bank's total interest income increased from Rs.6291.36 crore during 2011-12 toRs.7498.19 crore during 2012-13, recording a growth of 19.18%. Interest expenditureincreased by 21.19% to Rs.4932.38 crore, as against Rs.4069.96 crore in the previous year.The net interest income recorded a growth of 15.50% to Rs.2565.81 crore, as againstRs.2221.40 crore in 2011-12. The net interest margin decreased from 3.70% for the yearended March 2012 to 3.62% for the year ended March 2013.
The non-interest income of the Bank has increased by 21.25% from Rs.598.97 crore in2011-12 to Rs.726.28 crore during 2012-13. The increase during the year as compared to thelast year is mainly on account of increase in profit on Forex turnover by Rs.51.62 crore,profit on sale of investment by Rs.46.96 crore and recovery in Written-off accounts byRs.22.21 crore.
The operating expenses recorded a growth of 18.67% from Rs.1330.76 crore in 2011-12 toRs.1579.22 crore during 2012-13. Of this, employee costs increased by 20.46% to Rs.987.53crore, while total other operating expenditure increased by 15.80% to Rs. 591.69 crore.
During 2012-13, the operating profit increased to Rs.1712.87 crore, recording a growthof 14.99% as against Rs.1489.61 crore in the previous year. The net profit recorded agrowth of 11.99% from Rs.652.03 crore in 2011-12 to Rs.730.24 crore in 2012-13.
During the year 2012-13, the Bank declared an Interim Dividend of 161% i.e. Rs.16.10/-per equity share (face value of share Rs.10/- per share) which is 11.03% higher thandividend of 145% i.e. Rs.14.50/- per share declared in the previous year. Record date forascertainment of entitlement of shareholders for Interim Dividend was 29thMarch, 2013. Interim dividend may be treated as final dividend.
KEY FINANCIAL INDICATORS
The Return on Assets of the Bank stood at 0.96% during 2012-13 as against 0.99% in theprevious year. The return on equity decreased to 15.33% as against 15.66% in the previousyear. The earnings per share also increased from Rs.95.05 in 2011-12 to Rs.104.32in 2012-13, while the book value per share improved from Rs.594.98 in 2011-12 to Rs.678.74in 2012-13. As at end-March 2013, the capital adequacy ratio of the Bank stood at 11.81%and 12.16% as per Basel I and II norms respectively, as against 12.81% and 13.76% as perBasel I and II norms respectively, as at end-March 2012. This was well above the RBIbenchmark of 9%. Due to rise in NPAs on account of continued stress faced by theindustrial sector coupled with agriculture NPAs, the Bank's Gross NPA ratio and Net NPAratio increased from 3.30% and 1.92% respectively as at end-March 2012 to 3.62% and 2.27%respectively, as at end-March 2013. The average business per employee increased to Rs.900lakh during 2012-13, as against Rs.827 lakh in the previous year. The net profit peremployee improved to Rs.5.91 lakh during 2012-13, compared to Rs.5.42 lakh during 2011-12.The average business per branch increased to Rs.112.42 crore during 2012-13, as againstRs.104.73 crore in the previous year.
The overall credit demand remained subdued during the FY 2012-13, even though therewere signs of economic recovery. However, the Bank continued to focus on qualitativecredit growth and faster credit delivery. Total advances of the Bank grew by 16.98% during2012-13, as against a growth of 19.77% during 2011-12. The Banks Commercial &Institutional (C&I) segment advances (other than food credit) registered a growth ofRs.4705 crore (16.47%), while non-C&I segment comprising personal, small business andagricultural advances increased by Rs.3809 crore (17.76%) during 2012-13. The impetus offinancing remained mainly towards infrastructure development, such as power and road,besides other sectors such as steel, textiles and non-banking finance companies. In viewof the prevailing competitive market scenario, closer interaction and regular meetings bythe Top Management with high value customers were held at major centers in the country.
During 2012-13, personal segment business has crossed Rs.50000 crores mark withRs.41752 crores of deposits and Rs.9131 crores of advances. The retail deposits recordedan escalation of Rs.6094 crores on the base level of Rs.35658 crores which is a YoY growthof 17.09% while retail P segment advances grew by Rs.1142 crores taking the retailadvances portfolio to Rs. 9131 crores.
The Bank has launched one Incentive linked Deposit mobilization Campaign for the entireFY 2012-13, to counter the fierce market competition posed by private players, who areoffering higher interest rates to customers post RBI's guidelines for deregulation ofinterest rate in SB deposits. Apart from this year long campaign, to broaden the customerbase two more Campaigns to open SB accounts were also launched and in the process, Bankhas crossed the land mark of having more than One crore SB accounts in its books. Duringthe year we have opened a record number of 19.31 lakh new savings deposit accounts asagainst 11.36 lakh accounts during the previous year 2011-12. Year 2012 was alsocelebrated as "Golden Jubilee Year" by the Bank and to commemorate thismemorable event a new 50 week (350 days) term deposit product named 'GOLDEN JUBILEEDEPOSIT PRODUCT' was also launched by offering higher rate of interest to our esteemedpatron customers.
Despite the gloomy economic scenario coupled with RBIs tightening liquiditynorms, the bank was able to sanction Rs.3309 crores in 1.11 lakh new advances accounts asagainst last year's of Rs.2805 crores under various loan schemes in the personal bankingsegment. This year bank has recorded a robust growth of 60.86% in disbursement of Psegment car loans. During the fiscal 2012-13, with fresh sanctioning of 14531 car loans,the car loan portfolio grew by 43.53% over March 2012. Our unique innovative technologybased initiative,
10 Minute On line sanction of Car Loan rolled out during the last financial yearwas also instrumental in pushing car loans apart from our launching campaigns during thefestive seasons during the year entire fiscal year 2012-13 by extending concessions ininterest rates and processing fee. To keep in pace with the market trends and dynamics, wehave reoriented and modified our existing loan schemes such as Home loan, Car loan, GoldLoan and Education loan schemes by readjusting Interest rates, Processing fee andeligibility norms. At the behest of Government Of India, for providing institutionalfunding for the students undergoing specialized skill development programs in recognizedinstitutions one education loan scheme "Model Loan Scheme for Vocational Educationand Training" was also launched, The Bank at the behest of MOHRD, Government ofIndia is continuing an Interest Subsidy Scheme for "Economically weaker section(EWS) on Education loan borrowers" and claimed Rs.12.33 crore amount in 8714beneficiaries accounts.
PRIORITY SECTOR LENDING
Priority Sector advances continued to remain the major thrust area of the Bank'sbusiness. As at end March 2013, the Bank's priority sector advances increased to a levelof Rs.20807 crore as against Rs.17690 Crore in the previous year. This constituted 41.61%of the Adjusted Net Bank Credit, against the RBI benchmark of 40%. Priority SectorAdvances in Rajasthan stood higher at 65.85% of Rajasthan's ANBC as on 31stMarch, 2013.
Lending to agriculture remains one of the major thrust areas of the Bank. The flow ofcredit to agriculture increased from Rs.6825 crore in 2011-12 to Rs.8376 crore in 2012-13,recording a growth of 126%. The outstanding level of agriculture advances increased by1.73% from Rs.9032 crore as at the end of March, 2012 to Rs.9188 crore as at end of March,2013. Our Banks total direct agriculture lending is 89.81% amounting to Rs.8252crore, and has registered a growth of 13.94%. Due to change of priority sector guidelinesa major portion of indirect Agriculture has been classified under MSME and this hasimpacted the overall growth in Agriculture Advance. Agriculture credit constituted 18.38%of the Adjusted Net Bank Credit, which was above the RBI benchmark of 18%. In the state ofRajasthan, the agricultural advances stood even higher at 34.87% of the Adjusted Net BankCredit.
The Bank has issued 111911 Kisan Credit Cards (KCCs) with sanctioned amount ofRs.2018.99 crore during the financial year, taking the total number of KCCs to 515520 asat end-March 2013. The bank issued 53615 new KCC with a growth of Rs.951.68 in productioncredit, which constituted 11.61% growth of New KCC and amount wise growth of 19.58% aftersale of Rs.400 crore crop loans through IBPC. The Bank has added 189 new farmers per ruraland semi-urban branch during the year.
In order to bring the farmers out of the clutches of the money lenders, the Bankintroduced a Debt Swap Scheme in the year 2008. During 2012-13, assistance disbursed underthe Debt Swap Scheme stood at Rs.56.71 crore, benefiting 12118 farmers. The outstandingassistance under the scheme increased from Rs.291.19 crore as at end-March 2012 toRs.320.44 crore as at end-March 2013. The number of beneficiaries under the Scheme alsoincreased from 70377 in the previous year to 73583 farmers in March 2013, recording agrowth of 4.60%. By providing financial assistance under this scheme Bank has made thevillagers of 42 villages completely free from the clutches of private money lenders.
FINANCIAL INCLUSION (FI)
Our Bank has embarked upon its journey to implement the FI initiatives in the unbankedservice area villages through ICT enabled banking correspondent outlets. 794 businessCorrespondents have been engaged to cover 823 villages and brick and mortar branches havebeen opened in 6 villages to cover 829 villages with population of 2000 and aboveallocated to our Bank for providing banking services by 31.03.2012. In these villages229652 accounts have been enrolled.
Now the concept of coverage under FIP has changed and as per new concept, a BC has tocover all the villages falling in a Gram Panchayat. We have 1878 Gram Panchayats in ourBank's service area in the state of Rajasthan. Out of these, in 369 Gram Panchayats ourBrick and mortar branches are functioning and in 792 Gram Panchayats we have alreadyengaged BCs/BCAs. The remaining 717 Gram Panchayats, will be covered by engaging CSCs asBCAs/ Individual BCs / BCAs of any other Corporate BC who can work on KIOSK model,developed by TCS for SBI Group.
Financial Literacy: Bank is actively involved in Govt. of India sponsoredSwabhimaan campaign enlightening the rural populace about FI initiatives. Pamphlets,brochures detailing the advantages of Bank accounts are distributed in FI villages toeducate the rural public about the Bank's FI initiatives. Our Bank has already set upFinancial Literacy & Credit Counseling Centres (FLCCs) in all the nine Lead Districtsto impart literacy among rural population. These FLCCs have conducted 304 literacy campsand counselled 38759 persons during the year 2012-13. Apart from this, the Bank has alsoset up 8 R-SETIs to train the potential Small Entrepreneurs to start their own ventures /business / entrepreneur for self employment in rural areas. The 8 R-SETIs have so fartrained 27616 rural unemployed youth for various trades i.e. electric work, tailoringcomputer repair etc. Out of 27616 trained persons, 14762 persons belong to BPL families
Aadhaar Project of UIDAI: UIDAI has been setup by the Government of India with amandate to issue a unique identification number to all the residents in the country basedon demographic and biometric data of the individual. UIDAI has entered into Partnershipwith the Govt. and other agencies including Banks leveraging their existinginfrastructure. These agencies are called the Registrars of UIDAI. Our Bank has alsosigned an MoU with UIDAI on 22nd January 2011 and has become a registrar inthis project. Our bank has undertaken Aadhaar enrollments through an enrollment agency inthe state of Rajasthan. More than 24 lac Aadhaar enrollments have been done till31.03.2013 and 17.40 lac Aadhaar numbers have been generated so far and thus SBBJ is no.one among all the Associate Banks. Our Bank has successfully implemented Aadhaar basedpayment system (APBS/ NACH) through National Payment Corporation of India (NPCI) gateway.Seeding of Aadhaar Number in CBS account is under progress.
MICRO, SMALL AND MEDIUM ENTERPRISES (MSMEs)
Micro, Small and Medium Enterprises (MSME), the main growth driver of the IndianEconomy, accounts for 35% of manufacturing sector output, 40% of India's exports andprovides employment to more than 6 crore persons in 1.5 crore enterprises. Accordingly,the Bank has also been according high priority to this area. The Bank has assisted 4473new MSME units during the year 2012-13. In order to boost MSME advances, we have revisedour existing loan schemes viz. financing against Ware House receipts, Transport OperatorLoan Scheme, Marble Plus Loan Scheme, Construction Equipment Loan Scheme, SME Car LoanScheme. We have also entered into MOUs with JCB India Ltd., Tata Motors Ltd & AshokLeyland Ltd for booking fresh advances. We have reduced spread on our base rate for MSMEadvances twice during the year and our interest rates are now very competitive.
As at end-March 2013, the outstanding credit to Micro and Small enterprises hasincreased by 25.46% to reach a level of Rs.8127.36 crore, as against Rs.6477.96 crore asat end- March-2013.
The Bank has continued its thrust to provide collateral free loans to MSE units underthe credit guarantee scheme of CGTMSE. During the year, Bank provided new collateral freeloans under Credit Guarantee Scheme of CGTMSE to MSE units amounting to Rs.78.85 crore.
LOAN TO WOMEN BENEFICIARIES
As at end-March, 2013, 2.05 lac accounts of financial assistance were provided to womenunder different schemes of the Bank with a total outstanding of Rs.2732.85 crore exists.
ASSISTANCE TO MINORITY
COMMUNITIES, WEAKER SECTIONS AND SCHEDULED CASTES / SCHEDULED TRIBES
As at end-March 2013, assistance to minority communities stood at Rs.1043.26 crorespread over 78776 accounts. Financing to weaker sections stood at Rs.8237.10 crorebenefiting 8.32 lakh persons as at end-March 2013. The ratio of assistance to weakersections as a percentage of Adjusted Net Bank Credit is 16.47% as at end-March 2013. Thiswas above the benchmark of 10% prescribed by RBI.
The outstanding assistance towards Scheduled Castes (SCs) / Scheduled Tribes (STs)stood at Rs.1966.78 crore in 202556 accounts under priority sector as on 31stMarch 2013
The Bank conducts Government Business on behalf of State/Central Government departmentsthrough 490 authorized branches. Income Tax, Central Excise, Service Tax, Value added taxetc. are collected through physical challans and also through the electronic mode. TheBank has established a Centralized Pension Processing Centre (CPPC) which calculates aswell as credits pension to the accounts of pensioners across all the branches. We alsohave an Online Treasury Branch for online payment of Salary of Rajasthan Govt. employeeson behalf of the State Government and presently our Online Treasury Branch is processingabout 9 lacs State Govt. transactions received through 18000 digitally signed files in amonth. During 2012-13 commission income from Government business was Rs.114 crore.
The Bank provides Foreign Exchange related services to exporters/ importers, otherresident and non-resident customers through a network of 66 Authorized Category"B" and 184 category C branches and 4 Trade Finance CentralProcessing Centres (TFCPC). Bank's forex dealing room at Mumbai and all the authorizedcategory B branches are equipped with latest technology for real-timecommunication and are connected through SWIFT network with more than 750 offices offoreign banks throughout the world. The Bank maintains 20 NOSTRO accounts in all majorcurrencies and non-account correspondent banking relationship with all major bankinggroups in the world. To facilitate NRI customers for inward remittances, there is onlineremittance facility and tie-ups with 5 Gulf based Exchange Houses. Our 231 branches areauthorised for payment of Western Union Money Transfer. The Bank also undertakesproprietary Forex trading to increase profit by taking advantage of market movements. OurMerchant forex turnover stood at Rs.26717 crore at the end of March 2013, as againstRs.19652 crore of last financial year, recording a growth of Rs.7065 crore (35.95%) duringthe year. Our NRI deposits stood at Rs.1249 crore at the end of March 2013 against thebase of Rs.950 crore in March 2012, registering a growth of Rs.299 crore (31.47%). Ourexport credit stood at Rs.2334 crore at the end of March 2013 against Rs.1931 crore ofMarch 2012, recording a growth of Rs.403 crore during the financial year. In percentageterms, the growth was 20.87%.
The Bank chairs the local chapter of Foreign Exchange Dealers' Association of India(FEDAI). The Bank is an active member of FEDAI, International Chamber of Commerce (ICC)and Clearing Corporation of India Limited (CCIL).
Rehabilitation/ restructuring of potentially viable industrial unit remains animportant thrust area of the bank. For this purpose, the bank has its own IndustrialRehabilitation Policy containing detailed guidelines for undertaking rehabilitation/revival package and the same is updated from time to time. Whenever units are found nonviable or not responding to the rehabilitation/ restructuring package, focus is shifted torecovery of Bank's dues through legal recourse such as action under SARFAESI/ compromisesettlement/ assignment of debt/ through courts/ Debt Recovery Tribunals (DRT).
As at end - March 2013, the Bank had 27 large sick/ weak units on its books withaggregate outstanding of Rs.364.13 crore. There are 31 Corporate Debt Restructuring caseswith aggregate exposure of Rs.1193.20 crore and 25 BIFR cases with exposure of Rs.413.78crore. The Bank has been acting as BIFR's Operating Agency in 6 cases. During the yearunder review, 15 accounts with aggregate exposure of Rs.808.52 crore have beenrestructured under CDR mechanism as warranted basically by the tight economic scenario.Sustained efforts are undertaken by the Bank in restructuring the accounts and postsanction close monitoring and follow up have resulted in retaining most of therestructured assets as Standard Assets.
The Bank continues with its multipronged strategy of controlling Non-Performing Assets(NPAs) through intensive monitoring of large value accounts, close follow-up with DRT/BIFR, restructuring of viable accounts and effectively utilizing the remedies availableunder the SARFAESI and RODA Acts. Due emphasis has been given to follow up with the courtsand filing of Execution Petitions. During the year, 'Recovery Camps', Bank Adalats and LokAdalats were organized for NPA recovery, the results of which were quite encouraging. Theprogress in NPA /AUCA recovery is being discussed / reviewed by the Management Committeeby conducting Video-conferencing with all the Zones and DGM headed branches. To containthe growth of NPAs, MIS data based on system tracking is being extensively used. Theaccounts in SMA / probable NPA category are also discussed in every video conferencing toregularise the position and to avoid any account slipping into NPA. The level of SMA /Probable NPA are also brought down by removing technical snags. The 'Loan Tracking Center'monitors and tracks the irregular standard accounts from Head Office level. Pre-emptivemeasures such as restructuring etc are also taken as per RBI guidelines. By adopting theabove measures and utilizing the provisions of SARFAESI Act effectively, Bank alsoreceived a number of acceptable compromise proposals which resulted in good recovery inNPA. Though there has been recovery/upgradation of accounts to the tune of Rs.696.61crore, the gross NPA and net NPA levels increased to Rs.2119.49 crore and Rs.1303.28 crorerespectively with the gross NPA and Net NPA ratio at 3.62% and 2.27% respectively as on31.03.2013.
RISK MANAGEMENT STRUCTURE OF THE BANK
The Bank has an independent Risk Management Framework in place. At the apex level,there is a Risk Management Committee of the Board (RMCB), which oversees the policies andstrategies for Risk Management in the Bank. Credit Risk Management Committee (CRMC), AssetLiability Management Committee (ALCO), Market Risk Management Committee (MRMC) andOperational Risk Management Committee (ORMC) provide support to RMCB. These sub-committeesare required to place all critical issues/ development in their respective areas to RMCB.The Bank has Credit, Market and Operational Risks Management Policies for identification,measurement and management of major risks. These policies are reviewed and updated fromtime to time, keeping in view the dynamic business environment. Integrated Risk ManagementDepartment (IRMD) at the Head Office, functions under a Dy. General Manager. The IRMD actsas the nodal centre for coordination with other departments/ operating units engaged inmanaging risk in their respective business areas.
BASEL II: Under Pillar-I of the New Capital Adequacy Framework (NCAF) guidelinesissued by Reserve Bank of India, the Bank is computing Capital to Risk Weighted AssetsRatio (CRAR) using Standardised Approach for Credit Risk, Standardised Duration Approachfor Market Risk and Basic Indicator Approach for Operational Risk. Under Pillar-II ofNCAF, the Bank has assessed capital requirement for 2012-13 for other risks in itsInternal Capital Adequacy Assessment Process (ICAAP) document, a copy of which has beensubmitted to RBI. Basel-II Disclosures have been made by the Bank in the Annual Report asalso on Bank's website as part of the Pillar-III guidelines of NCAF.
BASEL III: In order to improve the quality of capital and address the liquidityrisk issues, Reserve Bank of India has issued final guidelines on implementation of BaselIII Capital Regulation in India. These guidelines will be implemented in phases w.e.f.01.04.2013. With a view to improve market discipline under Pillar III of Basel IIframework as also to improve transparency of capital base, draft guidelines on disclosurerequirements has also been issued by Reserve Bank of India. The Bank is ready for a smoothtransition to Basel III regime.
Credit Risk management remains a major task for Bank and receives prime attention.Control and monitoring of credit risk is dealt with as per the Board-approved Loan policyand Credit Risk Management, Credit Risk Mitigation & Collateral Management Policy ofthe Bank. These policies cover methodologies for measuring, monitoring and control ofcredit risk. In order to control the magnitude of credit risk, prudential norms onbenchmark, financing ratios, single borrower or borrower-group exposure, industry specificand sector-specific exposure, exposure to sensitive sectors, hurdle rate for taking afresh exposure etc. have been set up. Credit appraisal systems and a clearly defineddelegation of powers form an integral part of the Bank's Loan policy.
To monitor market risks and treasury operations, mid-offices (domestic & forex) arefunctioning at IRMD. Scenario Analysis on market risk covering events such as decline instock markets, rise in bond yields and foreign exchange rate movements are conductedregularly as per the Stress Testing Policy of the Bank to assess resilience of Investmentportfolio.
One of the major tools for managing operational risk is to put in place a wellestablished internal control system, which includes segregation of duties, clearmanagement reporting lines and adequate operating procedures. Most of the operational riskevents are associated with weak links in internal control systems or laxity in complyingwith the existing internal control procedures. The Bank has developed suitable systems andprocedures for managing and control of operational risks.
PREPARATION FOR ADVANCED APPROACHES OF BASEL-II
Bank has decided to move over to advanced approaches of Basel-II guidelines for Credit,Market and Operational Risks. Letter of Intent (LOI) for Credit Risk has been submitted toReserve Bank of India, for assessing Bank's preparedness to move over to advancedapproach. LOI for Market and Operational Risks will be submitted soon. Internal RatingBased (IRB) Approach for Credit Risk, Internal Models Approach (IMA) for Market Risk andAdvanced Measurement Approach (AMA) for Operational Risk will be followed under advancedapproaches, on approval from Reserve Bank of India. The advanced approaches will not onlyhelp the Bank to maintain Economic Capital, but will also strengthen the risk monitoringand control aspects.
Since augmentation of capital is not only costly, but its availability is also scarce,efforts are being made for optimum utilisation of the existing capital. 'Project Ganga',which has been launched in Bank on 16.10.2012, aims at conservation of capital byimproving data quality. Cleansing of data will lead to computation of the Risk WeightedAssets of the Bank more accurately and ultimately result in lesser requirement of capital.
ASSET LIABILITY MANAGEMENT
A comprehensive Asset Liability Management (ALM) System is in place for effectivemanagement of Liquidity Risk and Interest Rate Risk. These Risks are assessed andmonitored through Structural Liquidity Reports and Traditional Gap Analysis respectively.The structural liquidity report is being prepared and reviewed on a daily basis as per RBIguidelines. Both the risks on Foreign Assets & Liabilities are being monitored throughMaturity & Positions (MAP) and Sensitivity to Interest Rate (SIR) statements. Themonitoring of liquidity on a dynamic basis, over a time horizon spanning 1-90 days, is inplace. Duration Gap Analysis is also used to manage interest rate risk for the entirebalance sheet.
The Asset Liability Management Policy, coupled with Investment Policy of the Bankspecified various prudential limits for management of Liquidity and Interest Rate Risks.The Bank is regularly monitoring these limits. A comprehensive Contingency Funding Planand a system of daily monitoring of inflows & outflows of deposits are in place formanaging Liquidity on a day-to-day basis. Calculation of Value at Risk (VaR) on ForeignExchange Forward Positions and Stress Testing on Liquidity, Interest rate and ForeignExchange Open & Forwards Positions is also undertaken.
INTERNAL CONTROL, INSPECTION AND AUDIT
The Bank has in place a well established independent audit system and structure toensure adequate internal control for safe and sound operations. Internal Audit is carriedout under Risk Focused Internal Audit (RFIA) as envisaged under Risk Based Supervision ofRBI with focus on assessment of risk and internal control mechanism.
The branches have been categorized into three groups as per risk perception and aresubject to varying degrees of audit. During 2012-13, 664 Branches and 57 Cells underBusiness Process Re-engineering (BPR) initiatives have been subjected to internal audit.No branch of the Bank remained overdue for audit as on 31.03.2013. 104 branches and 35 BPRinitiatives covering 67.81% of advances including non-fund based business and 41.12% ofdeposits have been placed under continuous surveillance through concurrent audit. Besides13 Head Office Department are also subjected to concurrent audit system. IS Audit Cell isin place to conduct IS audit of major IT establishments including Core Banking project,Zonal Computer Centres, etc. in accordance with RBI directives and Bank's IT SecurityPolicy.
As at end March 2013, 99.89% of the Bank's branches was rated "WellControlled" and "Adequately Controlled".
RECONCILIATION OF INTEROFFICE TRANSACTIONS
As per the RBI guidelines, all the entries need to be reconciled within a period of sixmonths from the date of their origin. By the end of March 2013, the bank has reconciledinter-branch transactions originated up to 28.02.2013 i.e. well before the time limitprescribed. The Bank is committed to performing better than the target set by RBI andshall aim at reconciling all the entries within two months of their origin.
CORE BANKING SOLUTION (CBS)
All our branches are running successfully on Core Banking Solution. We were able toprovide better customer satisfaction and services by providing many Value Added Serviceslike; multi functional ATMs, Internet Banking, flexi deposit scheme, multi city chequefacility, instant credit of local and outstation cheques, introduction of RTGS/ NEFT andSBGRPT for the faster settlement of funds etc.
Mobile Banking facility introduced in the year of 2009, for our customers having aSavings / Current Account. The product is named "State Bank Freedom". Presently,there is upper ceiling of Rs.50000/- for fund transfer and for purchase of goods /services per day with in overall calendar month limit of Rs.250000/-. In order to make theregistration process more robust and to eliminate the threat of frauds/ phishing attempts,the registrations are enabled over ATM/CBS only if the mobile number entered matches withthe mobile number already available in the customers CIF in CBS.
INTERBANK MOBILE PAYMENT SERVICES (IMPS)
"Interbank Mobile Payment Service" now renamed as "Immediate PaymentService" (IMPS), was launched in our bank in the year of 2012 for enabling our Bankcustomers to use mobile instruments as a channel for remitting funds or to make variousutility payments at shops and commercial establishments; Making payment just with the MMID(Mobile Money Identifier) of the beneficiary in secure manner on 24X7 basis. The upperceiling for remittance or payment of bills is same as in Mobile Banking facility.
AUTOMATED TELLER MACHINES (ATMS)
The Bank has installed 12 new networked ATMs during the year to take the tally of ATMsto 1087 All the ATMs are connected to the network of State Bank Group ATMs, therebyenabling more than 51.50 lac cardholders of the Bank to have access to over 29504 ATMs ofthe State Bank Group all over the country. Our Saving Bank customers can also access ATMsof other Banks free of charge up to five transactions per month, including balanceenquiry, subject to a maximum of Rs.10000/- per transaction.
All branches are enabled to offer Internet Banking facility to our retail as well ascorporate customers. Looking to the rapid increase in the usage of Internet bankingworldwide, the Bank has introduced several new features during the year. Apart fromtransferring funds from their account to another account in our Bank, our customers cannow transfer amount from their account to any other account in any bank (through RTGS/NEFT), TDS enquiry for Term Deposits from the comfort of their homes or offices, opening/closing of e-TDR/ e-STDR/ e-Recurring Deposit (RD) account, facility to view the detailsof Income-Tax deposited (26-AS). The transaction rights with single ID up toRs.5.00 lac per day per user for small corporate customers, named 'CINB Saral', has beenprovided. Retail Internet Banking facility for visually challenged persons has also beenmade available. For Corporate customers, a new facility 'I - Collect', for on linecollection of funds has been provided.
Online payment of direct and indirect taxes have been enabled in our Internet banking.Our customers can now pay online Income Tax, Service Tax, Excise Duty, Customs Duty ofCentral Government, Value Added Tax (VAT) and Central Sales Tax (CST) of Rajasthan StateGovernment and Maharashtra State Government. EGRAS and facility for online collection ofall Tax and non Tax revenue of Rajasthan Government. Facility of online payment ofProfessional Tax of Maharashtra State Govt. has also been provided. Facility of onlineapplication for IPOs through our internet banking portal www.sbbjonline.com with ASBA(Application Supported with Blocked Amount) facility where investor customer continue toearn interest during the application process is available to internet banking users.Facility of online booking of Railway / Air Tickets has been widely accepted. Electronicpayment of railway freight (E-Freight) is gaining popularity. We have integrated number ofAggregator to our online system to provide the facility of wide range of merchants andutility billers to our Internet Banking users. Our customers can now make payment to 10000plus merchants / billers. Steps have been taken to further increase the merchants /billers list. Bank has taken steps to increase awareness about Internet banking amongstaff as well as customers. Meeting with staff of Corporates and Institutions wereregularly held, to popularize online payment of taxes a facility of "Zero BalanceInternet Current Account" has been introduced.
ELECTRONIC PAYMENT SYSTEMS: USAGE OF RTGS, NEFT & SBGRPT
Real Time Gross Settlement (RTGS) is an instant payment and settlement system andNational Electronic Fund Transfer (NEFT) is a scheme for inter-bank funds transferoperated by the RBI. Our Bank has taken several measures to increase usage of RTGS andNEFT system. All branches of our bank are RTGS & NEFT enabled. Our customers can maketheir inter-bank remittances in a faster and secured manner at very nominal cost, on anyRTGS / NEFT enabled branch of other banks in India. SB Group Payment (SBGRPT)functionality for electronic funds transfer within State Bank Group is also available forcustomer.
The "Project SMS Unhappy" launched by the Bank with the objective to providea simple and economical way to the customers to represent their grievances and reducecomplaint resolution time drastically, to below 48 hours, thereby enhancing the customersatisfaction level and creating a loyal customer pool.
INSTANT LOAN SANCTION
Bank is providing the facility of online instant sanction of Housing Loan and Car loanto the customers under the head "Home Loan in 20 minutes" and "Car Loan in10 minutes" respectively on Bank's website http: //www. sbbjbank.com/.
Customer gets sanction letter instantly on submitting completely filled applicationform on Bank's website if he fulfills the eligibility criteria.
GREEN CHANNEL COUNTER
Bank has implemented "Green Channel Counter" facility at our 508 branches ofRajasthan, Delhi NCR, Mumbai, Bangalore and Ahmedabad. It is a paperless, eco-friendly andeasy facility which would enable customers to pre-process selected transactions in abranch. This shall be carried out using a Transaction Processing device (TPD) placed at aSingle Window Operator's (SWO) terminal and linked with the desktop of the SWO andintegrated with the CBS application. This TPD would act as a transaction pre-processingdevice, which would be used by customer to enter data for a particular transactionauthenticated by the four digits PIN provided for the ATM-cum-Debit Card. The facilityprovides safety and comfort to the customers by avoiding filling up of withdrawal forms /cheques / pay in slips and quicker service.
SALARY & OTHER PAYMENT
Bank has developed an application for centralized electronic processing of RajasthanState Govt. Salary and other Payments from a centralised branch identified as 'OnlineTreasury Branch, Jaipur'. The Project has been successfuly implemented in the Bank and issmoothly handling Inter Bank Salary Payments through NEFT and GRPT Other Govt. Paymentse.g. Utility Bills (Electricity and Telephone), Vendor Payments, Scholarship Payments,Employees Medical Bills, Bonus, Aadhaar Based Payments through APBS/NACH (for IndividualPayments through Govt. Bills). At present the system is handling the volume of 7 to 10 lacrecords with 15000 to 18000 files consisting of approx. Rs.1500 crores per month throughthis application. With the increase in APBS/NACH payments the volume is expected toincrease multiple folds in near future.
ONLINE LOAN TRACKING SOFTWARE
Bank has introduced a web based application for Online Tracking of Loan application forcustomers and status of their application can be viewed by the customers on internetthrough our Bank's website.
NEW DEBIT CARDS
The following new range of Debit Cards for 'P' segment customers has been rolled out bythe Bank: i. State Bank Classic Debit Card (Magstripe) ; ii. State Bank SilverInternational Debit Card (Magstripe) ; and iii. State Bank Gold International Debit Card(Magstripe).
Bank is also planning to introduce EMV (Euro Pay, Master Card and Visa) compliant Chipbased cards very soon. These are presently under testing and would be available forissuance to the high value customer segments: i. State Bank Gold International Debit Card(Chip + Magstripe) ; and ii. State Bank Platinum International Debit Card (Chip +Magstripe).
Bank has introduced the Rupee Prepaid Card (eZPay Card). It will be useful for studentsand others, who undertake only one or two transactions in the month and maintain accountfor the purpose. The Rupee Pre-paid Card (eZPay Card) is equally useful for theCorporates, who have to make various payments to their staff or contractual labour. Thecards can be reloaded and can be used in any ATM or with any POS merchant, any number oftimes during their validity period.
INFORMATION TECHNOLOGY (IT) SECURITY
With the efforts of the Bank to popularize IT enabled services, the threats andrisks to our IT assets have increased manifold. To control these threats and risks theBank has a comprehensive IT and Information Systems (IS) Security Policy that addressesall these concerns including maintenance of customers' confidentiality, security andintegrity of data. State Bank's data centre where our CBS data base resides (both at thePrimary and Disaster Recovery Site) has already acquired the accreditation for theinternational standard for Information Security Management Systems ISO/IEC: 27001: 2005.All the Banking applications have built-in security features like access control, dataencryption and transmission through secured channels as per requirement of theapplication. The threat of virus and worms is minimized by having a centralized anti-virussolution. Adequate Firewalls and Intrusion Detection Systems are in place so as to preventunauthorized access to the network. The security of the network is being managed byNetwork Management Consultants of the Bank. The Disaster Recovery Plan (DRP) and BusinessContinuity Plan (BCP) for all branches are in place.
KNOW YOUR CUSTOMER/ANTI
MONEY LAUNDERING /COMBATING OF FINANCING OF TERRORISM MEASURES
Bank follows Reserve Bank of India/ Government of India guidelines on Know YourCustomer/ Anti Money Laundering / Combating of Financing of Terrorism. Prescribeddocuments relating to the identity and address are obtained from customers while openingtheir accounts.
With the objective of Universal Financial Inclusion, Bank facilitates opening of 'SmallAccount' by migrant labourers, street hawkers and other poorer sections of the society,with limited KYC documents. In order to identify and examine suspicious transactions, theBank has installed the AMLOCK software besides setting up an ANTI Money Laundering Cell atthe Head Office. The customers' accounts have been divided into different risk categoriesand alerts are generated once any transaction exceeds a predefined threshold limit. Thesealerts help in identification of suspicious transactions, which are further reported toFinancial Intelligence Unit, Government of India, in appropriate cases".
The Bank had set up the Loan Tracking Centre (LTC), a Centralized Outbound Call Centreat Jaipur in June 2011, for follow-up of Personal and SME Segment Loan accounts in IRAC4,IRAC3, IRAC2 and IRAC1 categories to avoid slippages of account into a hardcore NPA.Subsequently in 2012, the LTC started following up irregular AGR accounts also. The CallExecutives at the LTC make calls to the borrowers, where contact details are available inCBS, in a sustained manner to recover the overdue amount and upgrade accounts incoordination with Branches / CPCs.
Customer Service is a top priority for the Bank. Our 'SMS Unhappy', 'Car Loan in 10min', 'Housing Loan in 20 min' & 'Mission Five' have gone a long way towards this Themeetings of the Customer Service Committee of the Board and Standing Committee on CustomerService were convened at regular intervals to review the position of customer servicerendered. Similar Committees are also functioning at Branches, Zonal and Head Offices,which helps in continuous improvement in service standards. The Bank is a member of theBanking Codes and Standards Board of India (BCSBI) and has voluntarily adopted a 'Code ofBank's Commitment to Customers,' which sets a framework for setting a minimum standard ofbanking services to be provided by the banks. The Bank has put in place a multi prongedgrievances redressal mechanism to suit varied customer requirements. An aggrieved customercan either make a written complaint at branch / regional / zonal / head office of the Bankor make an online submission in the form provided on the Bank's website / through e-mailagainst acknowledgement.
INTEGRATED CUSTOMER GRIEVANCES REDRESSAL MECHANISM (ICGRM)
In a series of Bank's techno driven and Go-Green initiative towards customer service,Integrated Customer Grievance Redressal Mechanism (ICGRM) software has beenoperationalised for FY 2013-14 with a view of speedy and timely redressal of grievanceswith the leveraging of technology. It will facilitate on-line up loading, comments andclosure of complaints at various levels which ultimately result in cost-time saving withspeedy redressal / logical conclusion thereof. The MIS data base of the same will behelpful in initiating corrective action / measure to eliminate root-cause of complaintsand excelling customer service at branches.
DISCLOSURE OF COMPLAINTS/ UNIMPLEMENTED AWARD OF BANKING OMBUDSMAN :-
In terms of RBI circular DBOD.No.Leg BC.60/09.07.005/2006-07 dated 22.02.2007, theinformation in respect of customer complaints and awards passed by the Banking Ombudsmanis given in the Table below :
A. Customer Complaints (Position upto March 2013)
|(a) No. of Complaints pending at the beginning of the year ||61 |
|(b) No. of Complaints received during the year(*) ||5959 |
|(c) No. of Complaints redressed during the year(*) ||5949 |
|(d) No. of Complaints pending at the end of the year ||71 |
(*) Excluding 1593 Complaints found not sustainable.
B. Awards passed by the Banking Ombudsman (BO) (Position upto March 2013)
|(a) No. of unimplemented Awards at the beginning of the year ||01* |
|(b) No. of Awards passed by the Banking Ombudsman during the year ||09 |
|(c) No. of Awards implemented during the year ||05** |
|(d) No. of unimplemented Awards at the end of the year(Appeal has been made before Appellate Authority) ||01 |
* Appeal allowed and award passed by BO set aside by the Appellate Authority.
** In remaining three cases, in 1 case BO Jaipur has cancelled the award. In 2 casescomplainant has not accepted the award.
To monitor the ATM failed transactions related customer complaints received at thebranches, ATM Complaints Reconciliation Cell has been established at Head Office. ReserveBank of India has prescribed that all ATM related complaints be resolved within 7 workingdays. For faster resolution/ redressal of complaints, an online ATM Complaint ManagementSystem (ATMCMS) has been developed and implemented. During the year 2012-13, theBank has received 41191 ATM failed transactions related complaints, out of which 40975complaints were resolved. No home bank complaint (where customer and ATM both belong toour bank) is pending for more than 7 working days.
THE RIGHT TO INFORMATION (RTI)
The Right to Information (RTI) Department was constituted at the Banks HeadOffice in December,2010 for better coordination and effective implementation of the Rightto InformationAct,2005.Theapplications received are disposed efficiently in a time boundmanner as per provision of the Act and the appeals are also redressed in time.
During the year ended 31.03.2013, the RTI Deptt. received 1558 applications under theRTI Act, 2005, out of which 1530 applications were disposed and 28 applications wereawaiting disposal as on 31.03.2013. All the pending 28 applications are less than onemonth old. Besides, the Deptt. also received 97 appeals under the RTI Act,2005 during theyear ended 31.03.2013 and all these 97 appeals stood disposed by the Appellate Authorityas on 31.03.2013.
BUSINESS PROCESS RE-ENGINEERING
Business Process Re-engineering (BPR) Initiatives stabilised further during 2012-13 andtheir coverage extended to more branches. Bank operates 11 city-centric loan CPCs, viz.Retail Assets Central Processing Centre (RACPC)/ Small & Medium Enterprises CityCredit Centre (SMECCC)/ Retail Assets and Small & Medium Enterprises City Credit Cell(RASMECCC) in end-state at 10 centres with 231 branches linked to them. Coverage of RuralCentral Processing Centre (RCPC) increased to 299 branches at 19 centres. 17 RelationshipManagers-Medium Enterprises (Hub Model) are working at 13 major business centres. Non loanCPCs/ initiatives, viz. Liability Central Processing Centre (LCPC), Trade Finance CentralProcessing Centre (TFCPC), Currency Administration Cell (CAC), Central Pension ProcessingCell (CPPC), Clearing CPC (CCPC), Multi Product Sales Team (MPST), RelationshipManager-Personal Banking (RMPB) have helped in further improvement in customer service.The coverage of various non loan CPCs / initiatives as on 31.03.2013 vis--vis 31.03.2012was as under:
|CPC / Initiative ||Branches Covered |
| ||31.03.2012 ||31.03.2013 |
|LCPC ||486 ||996 |
|TFCPC ||116 ||122 |
|CAC / SCAB ||136 ||155 |
|Clg. CPC ||206 ||224 |
|CPPC ||792 ||844 |
|Branch Re-design ||159 ||185 |
During Financial Year 2012-13, following developments took place to make CPCs /initiatives more effective and to optimize gains:
Rural CPC at Sribijaynagar started functioning w.e.f. 31.05.2012.
SCAB, Jaipur (erstwhile CAC-I and CAC-II) started functioning from 17.09.2012 atCollectorate, Jaipur premises.
At Jaipur centre, 3 CPCs viz. RACPC, LCPC, CCPC were shifted to a singlepremises where a 'National Back Office Centre' is being created.
Linkage of all the branches with LCPC for SB accounts completed. Shifting ofback office activities to loan CPCs, implementation of revised roles for branchfunctionaries and better ambience in branches not only improved the Banks image butalso helped the linked branches to focus more on customer service and marketing forbusiness. BPR initiatives in the Bank are set to improve the quality of service further asalso to increase the market share in business by leveraging technological changes.
Being the Bank having the highest market shares in Rajasthan, RBI has designated 199branches as Currency Chest branches in the state and 16 branches for other parts of ourcountry. All of our Currency Chest branches are undertaking the following activities in anefficient Manner:
1. Circulation of New Currency Notes among Public.
2. Distribution of Coins to the Public.
3. Exchange of torn /damaged/ soiled/ Mutilated notes.
4. Providing of linkage facilities to branches of other banks which are linked to them.
5. Our 16 branches are providing facilities of Note exchange and coins distribution on3rd Sunday of every month.
The Bank continues to market life and non-life insurance, mutual fund and credit cardproducts in order to augment its non interest income. For the purpose, the Bank has inplace tie up arrangements with SBI Life Insurance Co. Ltd., SBI General Insurance Co.Ltd., SBI Funds Management Pvt. Ltd. and SBI Cards and Payments Services Pvt. Ltd. Variouscampaigns were launched for marketing of these products, which helped in getting a totalincome of Rs.17.82 crore from cross selling activities.
COMMUNITY SERVICES BANKING
As a responsible Corporate Citizen, the Bank continues to undertake Community basedSocial activities such as tree plantation, free medical camps including blood donationcamps, establishing of water huts & water coolers, sports competitions, honouringmeritorious students etc. During the year 2012-13 the Bank donated Rupees Two Crores forrelief Measures towards Rajasthan Chief Minister's Relief Fund and one ambulance each toAcharya Tulsi Cancer & Research Centre, Bikaner, Sewa Bharti Samiti Udaipur, NavjeevanSansthan Jodhpur & Sri Amar Jain Medical Relief Society Jaipur and one Veterinaryambulance to Sri Gopal Goverdhan Goshala Pathmeda were made available.
Besides, one water purifier by every branch of bank to its nearby GovernmentSchool, financial assistance to "Rays-Aasha ki ek kiran "working for HIV+vechildren, distribution of Jaipur Foot & Tricycles to physically challenged persons,three delivery vans to the ISKCON food relief foundation for transportation of Mid-daymeals to under privileged children studying in Govt. School, one digital X-Ray machine toMahaveer International Dungarpur providing Medical relief to the poor & tribalpatients were made available. Branches of the Bank continued to adopt one girl child eachfrom a poor family with an objective of providing financial assistance for pursuingstudies in Government/Municipal schools.
GOVERNMENT SPONSORED SCHEMES
Laying utmost emphasis on Government sponsored schemes has been amongst the majorstrategies of the Bank in pursuit of financial inclusion. The Bank continued to play apioneering role in financing entrepreneurs under various government sponsored schemes. Theposition under various Government sponsored schemes as at end-March, 2013 is as under: -
|Scheme ||Number of Beneficiaries ||Amount sanctioned during financial year (Rs. crore) |
|Swarn Jayanti Shahri Rojgar Yojana (SJSRY) ||2102 ||9.52 |
|Prime Ministers Employment Generation Programme (PMEGP) ||749 ||34.00 |
|Swarn Jayanti Gram Swarojgar Yojna (SGSY) ||4079 ||47.26 |
|Artisan Credit Card Scheme ||661 ||2.87 |
LEAD BANK SCHEME
The Bank has Lead Bank responsibility in nine Districts in the State of Rajasthan viz.Bikaner, Barmer, Hanumangarh, Jaisalmer, Jalore, Pali, Sirohi, Rajsamand and Udaipur. TheBank has been implementing and monitoring the Annual Credit Plan and other developmentaland poverty eradication schemes launched by Govt. of India, Govt. of Rajasthan and NABARD.Target allotted for Annual Credit Plan to our Bank for the year 2012-13 is Rs.2743 crore,against which achievement of our Bank up to March 2013, is Rs.3810 crore, recording 139%.
At the end of March, 2013, the Bank has credit linked a total of 41349 Self Help Groupswith an outstanding amount of Rs.265.89 crore, out of which 34128 accounts are of womenbeneficiaries with an outstanding amount of Rs.138.46 crore. NABARD has ranked the Bank asnumber one in Rajasthan State for its performance under Micro Credit continuously from theyear 2004-05 to 2008-09. In the year 2009-10 our Bank has secured first position inRajasthan for Micro Credit as per "Status of Micro finance in India 2009-10"published by NABARD. During the year 2010-11, our Bank secured 2nd position inSHG Credit Linkage. During the year 2011-2012 our Bank secured first position in SHG SBlinkage and second position in SHG Credit linkage.
RURAL SELF EMPLOYMENT TRAINING INSTITUTES (RSETI)
In order to impart job- oriented skills to rural unemployed youth, the Bank has set-upseven RSETIs at Bikaner, Hanumangarh, Barmer, Jaisalmer, Jalore, Sirohi and Nathdwara(Distt. Rajsamand). The Bank has also set up a Skill & Entrepreneurship DevelopmentInstitute (SEDI) at Jaitaran, Distt. Pali in association with Ambuja Cement Foundation(ACF).
By the end of March 2013, 27616 candidates have been imparted training for variouslocal demand jobs in these institutions and with the help of this training,3756 candidateshave been engaged in various jobs and 12467 candidates have started their own ventures.5093 youth linked with Bank Finance of Rs.29.66 crore.
FINANCIAL LITERACY AND CREDIT COUNSELLING CENTRES (FLCC)
In order to educate farmers and other people in rural / urban areas with regard tovarious financial products, various Bank schemes and services available from the formalfinancial sector, the Bank has set up 9 Financial Literacy and Credit Counseling Centres(FLCC) in all nine lead Districts in Rajasthan. These FLCCs are providing awarenessservice free of charge. Up to 31.03.2013, 38759 persons have been counseled by thesecentres.
REGIONAL RURAL BANK
"The MGB Gramin Bank (RRB sponsored by SBBJ) and Jaipur Thar Gramin Bank (RRBsponsored by UCO Bank) were amalgamated into a single Regional Rural Bank named 'MarudharaGramin Bank' sponsored by SBBJ vide Government of India's notification dated 25.02.2013.Marudhara Gramin Bank with Head office at Jodhpur has a network of 458 branches spreadover in 12 districts namely; Pali, Jalore, Sirohi, Sriganganagar, Bikaner, Hanumangarh,Jaisalmer, Barmer, Jodhpur, Nagaur, Jaipur and Dausa. SBBJ continues to provide managerialsupport and financial assistance by way of refinance etc. to Marudhara Gramin Bank. Allbranches of Marudhara Gramin Bank are on CBS platform and provide Electronic Fund Transferfacility. Marudhara Gramin Bank has deposits of Rs.4811 crore and advances of Rs.3365crore as on 31.03.2013. Marudhara Gramin Bank recorded profit before tax of Rs.3.05 croreand net profit after tax of Rs.2.11 crore during 2012-13.
During 2012-13, the Bank opened 90 new fully computerized branches. As part of theGolden Jubilee celebrations of the Bank, our Bank's 1000th Branch at Sambharwas inaugurated by our Hon'ble Union Finance Minister, Govt. of India Sh. P. Chidamabaramon 22.12.2012. As at the end of March 2013, the total branches stood at 1037, of which 373are rural branches, 291 semi-urban branches, 188 urban branches and 185 metro branches.The number of branches in Rajasthan has increased to 855 which is the largest among allbanks. Out of these, 643 branches are located in rural and semi-urban areas which play animportant role in rural development and poverty alleviation in the State.
HUMAN RESOURCES DEVELOPMENT
The Banks staff strength as on 31.03.2013 is 12831 employees, with the followingbreak up: -
| || |
Break up of Employees
Out of which
|Category of staff ||SC ||ST ||General ||Total ||Women ||Minority |
|Officers || || || || || || |
|Clerical || || || || || || |
|Sub-Staff || || || || || || |
|Safai Karmchari || || || || || || |
|TOTAL || || || || || || |
Out of the Banks total staff strength as on 31.03.2013, 2813 (21.92%) belong toSC and 1196 ( 9.32%) to ST categories. Reservation policy is implemented in our Bank asper Government guidelines.
Necessary complement of staff has been made available for working in new frontiers likecore banking solution, tele-banking, internet banking, ATMs, credit/debit cards,marketing, cross selling, business process re-engineering etc. The Bank has been accordinghigh priority to training and sensitization of staff members to respond to thecustomers expectations and deliver modern banking facilities in the technologydriven environment.
Qualitative training for human resources has become necessary for improvement in theefficiency of human capital. In this era of globalization, privatization of banks and newmanagement concepts, the Bank has to give high priority to training needs to humanresources to enable them to cater the needs of its esteemed customers. Looking to thesefacts, a total no of 6641 employees of all categories, including 300 employees of thesponsored RRBs,were provided training opportunities on various subjects related to bankingand technology at all the three STCs of the bank during the year.
The bank has also provided pre recruitment training to 297 SC/ST candidates appearingin the written test for recruitment of clerical cadre and officer cadre during the year.In addition to this 35 seminars/ workshops were conducted on various topics toup-date skills of employees. More thrust has been accorded to Mobile Banking Internetbanking, ATM services Soft skills, System & Procedures, Marketing, quality services tothe customers in view of the ever changing customer needs. We have also conducted trainingprogrammes on Management Skills for first time posted Branch Managers during the FY2012-13.
Apart from in-house training, the Bank has provided facility of training to itsofficers in specialized areas at apex training institutes like State Bank Academy Gurgaon,State Bank Staff College, Hyderabad, SBIICM Hyderabad, SBIRD Hyderabad, CAB-Pune, andIIBF-Mumbai. During the said period 1175 officers have been trained at these externalagencies in the areas of Core Banking Solution, Forex, Fraud Detection, Market RiskManagement, Risk Management, NPA Management, Stress Assets Management, Legal option ofrecovery, HR, SME, ATM, Behavioural science, International Banking & Appraisal of highvalue Credit Proposal. For Various other programmes we have also deputed our officers toIndian Institute of Banking & Finance (IIBF), NIBM-Pune, CAB-Pune, and CAFRL-Mumbaietc.
During the current financial year, we have deputed 7 officers for specializedprogrammes held abroad in many places like - 45th annual meeting of AsianDevelopment Bank (ADB) held at Manila (Philippines), Annual meeting of IMF &World Bank at Tokyo (Japan), Beyond boundaries overseas training at Harvard BusinessSchool, Boston (USA), Advanced Management Programme on towards the next orbit: IndianBanking sector at New Delhi & Europe, overseas training in Finance Driving CorporatePerformance, China, Programme on Leadership and Managing People at Pennsylvania(Philadelphia).
We have taken a new initiative -by launching of "Gyannodaya" e-learningportal of SBBJ which will inculcate a culture of self learning amongst the employees. Ascheme of deputing top executives (GMs and DGMs) of the bank for one training programme oftheir choice, at reputed external training institutions, has been started. Similarly, weare also taking up steps to arrange training programme on leadership development for allAGMs of the bank in reputed external institutions. Another portal "TrainingNeeds" has been developed to make on-line self nomination for the choice training bythe officers upto scale IV cadre.
With a view to improving the levels of supervision, organizational effectiveness andoverall efficiency, one additional position of Chief General Manager was created. TheChief General Managers were designated as Chief General Manager - Retail Banking and ChiefGeneral Manager - Commercial Banking. Functionalities among Chief General Managers wereallocated. Seven additional positions of General Managers were also created. While 7 GMswere posted at Head Office, 5 GMs were posted in the field. 3 such GMs would lead the 3Retail networks and 2 GMs would lead the corporate networks. Roles and responsibilities ofthe General Managers were circulated and field GMs were equipped by entrusting adequatediscretionary powers.
Keeping in view the availability of significant business potential in and around Alwar,which is one of the fastest growing industrial estates, a new Alwar Zone was created. Forgreater focus on the AGM headed branches to accelerate business growth, such branches werebrought under the control of a separate DGM by creating a position of DGM (Specialbranches). This would also enable the DGM, Delhi Zone to improve attention over regions,and intensify efforts for inclusive growth.
With a view to improving supervision and monitoring of large corporate accounts as alsoto ensure professional services to such customers, the incumbency of IFB, Jaipur branch,Barakhamba Road, New Delhi branch and Park Street, Kolkata branch were upgraded from AGM'sto DGM's. In light of revised organizational structure, the composition of variousnon-board committees functioning at the Head Office was also revised.
The Bank believes in keeping the morale and motivation of the employees high, considersemployees as its most important assets and accords high priority to their welfare. TheBank undertook staff welfare activities like granting scholarships to the meritoriouswards of the employees, providing free medical consultancy services at various hospitalsetc. Insurance cover for employees to the extent of Rs.8.00 lac (Rs.16.00 lac foraccidental death) under group insurance scheme of SBI Life, Waiver of housing loan of thedeceased employees, Overdraft limit (Personal loan), PF loan and Conveyance loan (uptoRs.3.00 lac) and Special award of Rs.10000/- for education (one time payment) to one wardof the deceased employee. Reimbursement of funeral expenditure is being made to the extentof Rs.10000/- from staff welfare fund. Annual Health Check-up scheme has been extended tothe spouse of the employees (age of employee between 41 to 49 years). Besides, relief tothe employees, who are on leave without pay on sick ground, Rs.15000/- per month upto 24months during the entire service period is being extended. The Bank has set up holidayhomes at Jaisalmer, Chandigarh, Mussoorie, Jaipur, Manali, Mumbai, Goa, Delhi, Haridwar,Katra, Bengaluru, Mt. Abu and Udaipur. Various cultural and sports activities wereorganized during the year.
The Bank has a long history of harmonious and cordial relations with both supervisingas well as workmen employees enlisting their total commitment, support and cooperation.The Employees Union and Officers Association have extended their wholeheartedcooperation for the all-round growth of the Bank. A well established and an on goingconsultative machinery is functioning at various tiers of the administration for resolvingissues through joint consultations and negotiations.
Vigilance Administration is an integral part of the management. Accordingly, vigilanceactivities are being accorded high priority in the Bank. Keeping in view the paramountimportance of preventive vigilance, greater emphasis is laid on the preventive measures.The preventive vigilance comprises the dissemination of knowledge and precautions, to beexercised by the operating staff while discharging their duties. During the year, we haveconducted five training programmes at various training centers, where 137 participantswere benefited. In many training programme conducted at STC Jaipur, Chief VigilanceOfficer has interacted with participants on all banking areas with focus on "How tobe a Vigilant Employee." Preventive Vigilance Committee set up has been revamped.Accordingly, branches having staff strength of 10 or more, BPR initiatives irrespective ofstaff strength, unsatisfactory rated branches and fraud detected branches, have beenincluded for formation of Preventive Vigilance Committee. Meetings of preventive vigilancecommittees are arranged, where staff is sensitized in regard to the preventive vigilancemeasures. Complaints received in the Vigilance Department are dealt with expeditiously andin a professional manner. In order to decide vigilance angle, complaints received in theVigilance Department are put up to the Internal Advisory Committee. Significant emphasisis laid on the transparency in the tendering process (procurement of goods and services,auctions etc.) by the Bank. The tenders issued by the Bank are uploaded on the Bank'swebsite as well as Government of India website. The department is publishing its in-housemagazine titled as "Vigilance Bulletin" on quarterly intervals. Certain newinitiatives have been taken as preventive measures like Electronic Voucher Verification,Online Tracking of status of loan application by the applicant, better pre-sanction duediligence process etc.
The department has disposed of 242 complaints, 59 Investigations have been initiatedand in total 51 cases of investigations have been disposed of. 60 preventive vigilanceinspections were conducted. The constant supervision of the cases resulted in a disposalof 75 vigilance cases, during the year 2012-13.
USE OF HINDI
The implementation of Official Language Policy in the Bank is not only a statutoryrequirement but also a business need. The Bank made all possible efforts to comply withthe statutory provisions relating to the official Language Policy of the Govt. of Indiaduring the year and took several initiatives to provide benefit of Bank's differentschemes to the masses through Hindi Language.
During the year 2012-13, the Bank made significant progress in promoting andpropagating the use of Official Language and ensured compliance of various other statutoryrequirements framed under the Official Language Act /Official Language Rules. The Bankmade all possible efforts to achieve the targets set by Official Language Deptt. Ministryof Home affairs, Govt. of India.
Bank continued its efforts to promote use of Hindi in the field of InformationTechnology. A portal of Rajbhasha Vibhag was made available on Bank's infonet site.Various useful materials like Hindi typing tool, format of Quarterly Progress Report,Annual Programme etc. were made available on the portal. Officers/employees were impartedtraining to work on computer in Hindi with the help of Unicode.
Hindi Day and Hindi-fortnight were celebrated in Offices/Branches of the Bank in themonth of September 2012 and various competitions were conducted for the staff members. AnAll India Hindi Essay competition was conducted by the Head Office. The winners of thecompetition were awarded certificates and prizes. To increase progressive use of Hindi 'HeadOffice Rajbhasha Trophy' competition (Head office and Zonal level) was organized duringthe year.
Bank's quarterly in House Rajbhasha magazine "Upwan" is being publishedregularly. For last year this magazine had been awarded by Reserve Bank of India.
The third Sub-committee of Parliament on Official Language visited the Bank's ShivMarg, Jaisalmer Branch at Jaisalmer. Honourable members of the committee appreciated theefforts undertaken by the Bank in field of Official Language implementation.Representative of Govt. of India also visited our Head Office and Zonal Office Jaipur andappreciated our efforts. Our Jaipur Zone had been awarded Second Prize by Bank TOLIC,Jaipur for official Language implementation.
State Bank of India, with the concurrence of the Reserve Bank of India, approved theappointment of 6 firms of Chartered Accountants viz. S. Daga & Co. of Hyderabad,Agarwal Anil & Co. of Delhi, M K Aggarwal & Co. of Delhi, Chaturvedi & Co. ofKolkata, Uberoi Sood & Kapoor of Delhi and PSD & Associates of Jaipur as theBank's Statutory Central Auditors for the year 2012-13. The scope of audit covered 587branches/ centralized processing units as against 860 branches/ centralized processingunits covered in 2011-12.
The Board of Directors hereby states:
1. That in the preparation of the annual accounts, the applicable accounting standardshave been followed along with proper explanations relating to material departures;
2. That they have selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Bank as on the 31st March 2013, and of theprofit or loss of the Bank for the year ended on that date;
3. That they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Banking Regulation Act, 1949,and State Bank of India (Subsidiary Banks) Act, 1959 for safeguarding the assets of theBank and preventing and detecting frauds and other irregularities; and
4. That they have prepared the annual accounts on a going concern basis.
The details on Corporate Governance are annexed.
The Board of Directors is grateful to the valued customers, esteemed shareholders andthe public at large for their patronage and confidence reposed in the Bank and places onrecord its deep appreciation. The Board of Directors thanks the Government of India, StateBank of India, Reserve Bank of India and other regulatory agencies for their valuablesupport and guidance throughout the year.
The Board of Directors places on record its deep appreciation of the commitment, senseof involvement and dedication exhibited by each staff member and constructive role playedby the Employees Union and Officers Association in the overall development,growth and prosperity of the Bank.
| ||For and on behalf of the Board of Directors |
|Delhi ||B. Sriram |
|6th May, 2013 ||Managing Director |