corporation bank Management discussions
1. Global Economy
1.1 Global macroeconomic landscape was highly volatile during FY 2019-20 driven by escalation of trade tensions, disorderly Brexit and volatility in crude oil prices. As per International Monetary Funds World Economic Outlook report, global growth lowered to 2.9 per cent in 2019 from 3.6 per cent in 2018. Volatility was further intensified with outbreak of COVID-19 pandemic in February-March and related slump in economic activities thereafter.
1.2 Pandemic led disruptions are wide spread and set to intensify further causing massive dislocations in global production, supply chains, trade and tourism. Global output is now seen as contracting in 2020. IMF projects global growth to decelerate by 4.9% in 2020 with recovery at 5.4% in 2021.
2. Domestic Economy
2.1 Indian economy has been experiencing demand slow down since the beginning of the FY 2019-20. As per second advanced estimates of National Income released by the Central Statistical Organisation (CSO), GDP growth for FY 2019-20 stood at 4.2% compared to 6.8% in same period previous year. Real GDP growth stood at 4.8% in Q1 FY 201920. During subsequent quarters, GDP registered a growth of 4.3%, 3.5% & 3.0%, respectively. Curtailment of all economic activities as a result of the lockdown in the last week of March, and the slow growth trend visible since first quarter of FY 2019-20, added up to give a sharp fall in GDP growth in the fourth quarter of FY 2019-20.
3. Price scenario
3.1 Headline inflation as measured by the consumer price index (CPI) increased by avg. 4.7% during the FY 2019-20 which was below the target range of 6%. However, headline inflation breached the committed target and peaked to 7.6% in January 2020 due to sharp spike in prices of vegetables, fruits and petroleum products.
3.2 Core inflation (inflation excluding food and remained range-bound during the FY 2019-20 at avg 4.0% propelled by a series of cost pushes.
4. Yield Movement:
4.1 Benchmark 10 year G-sec yield softened during FY 2019-20. Starting from 7.37% in the beginning of the FY yields fell to 6.67% on March 31,2020. Yield volatility was observed due to persistent worries about the Centres finances, expectation of a rise in inflation prints, subdued appetite for government bonds and hardening of US treasury yields. Yield movement was very volatile after spread of pandemic and related decline in market confidence. Avg. G-sec yield for the FY 2019-20 was at 6.84%.
5 External Sector
5.1 Indian exports shrank by 4.8 per cent during FY 2019-20 to $ 314 bn from $ 330 bn previous year. Though the adverse impact of COVID-19 on global supply chains and global economic activity has lowered the exports, trade was at discouraging note even before the pandemic. Indian imports contracted by 9.1 per cent during FY 2019-20 to $ 467 bn from $ 514 bn previous year. With imports declining more than exports, the trade deficit narrowed to $ 153 billion in FY 2019-20.
5.2 RBI has added significantly to the forex reserves during FY 2019-20. From US$ 414 bn as on April, 2019 forex reserves stood at US$ 476 bn on March 2012 reporting cumulative addition of US$ 62 bn. However, over the same period previous year, forex reserves were depleted by US$ 12 bn.
6 Liquidity conditions:
6.1 Surplus liquidity conditions persisted in large part of 2019-20. Systemic liquidity surplus, as reflected in net absorptions under the LAF, averaged Rs 51,710 crore in June 2019 and progressively increased to Rs 1,22 lakh crore in September 2019 to Rs 2.61 lakh crore in December 2019 and Rs 2.86 lakh crore in March 2020. RBI has taken timely liquidity management moves to deal with the money market volatility. The surplus liquidity was absorbed through reverse repo operations under the LAF.
7 RBIs policy decisions
7.1 During FY 2019-20, RBI has reduced the key policy Repo rate by 235 bps. While 160 bps reduction was through its six conventional monetary policies, 75 bps reduction was through its unconventional seventh policy announced on the backdrop of slow down and pandemic stress. Reverse repo rate was reduced by 175 bps from 5.75 per cent to 4.00 per cent during the FY 2019-20. Reverse repo rate was reduced by 85 bps in six conventional policies while 90 bps was reduced through its seventh policy.
7.2 In addition, the RBI undertook unconventional operations in the form of auctions of what is called Rs operation twist involving the simultaneous sale of short-term government securities and purchase of long-term securities. The Reserve Bank also conducted five long term repo auctions of 1 year and 3 years tenors to inject liquidity and improve monetary transmission. It also conducted two sell- buy swap auctions to inject cumulatively US dollar liquidity into the forex market.
8 Banking environment:
8.1 The banking sector continued to face the challenges of poor asset quality, sluggishness in profitability as well as lower demand. Both corporate and retail demand was weak during the FY 2019-20.
8.2 During the year, the aggregate deposits growth has remained in the range of 9% to 11%, before ending at 7.9% in FY20
8.3 Credit off take during 2019-20 was muted with nonfood credit growth at 6.1 per cent being less than half the growth of 13.3 per cent in the corresponding period of the previous year. The slowdown in credit growth was spread across all bank groups.
9. Banks Operational Performance
9.1 Deposit Mobilisation
i. The Total deposits of the bank (including CDs & Interbank) reached a level of Rs 2,05,354.78 Crores as on 31st March 2020, registering year-on-year increase of Rs 20,786.95 Crores at 11.26%.
ii. Current deposits stood at Rs 16,741.16 Crores as on 31st March 2020 as against Rs 16,200.06 Crore in the previous year with net increase of Rs 541.10 Crores at 3.34% Y-O-Y growth.
iii. Savings deposits reached Rs 46,029.06 Crores as on 31st March 2020 against Rs 42,106.72 Crores in the previous year with net increase of Rs .3,922.34 Crores at 9.32% Y-O-Y growth.
iv. The Share of CASA deposits in Total deposits stood at 30.57% as against 31.59% in the previous year
v. Average CASA has increased by 3.79% with net accretion of Rs 1,933.21 Cr and stood at Rs 52,990.58 Cr
vi. Term deposits reached a level of Rs 1,42,584.56 Crores as on 31st March 2020 against Rs 1,26,261.06 Crores in the previous year with net accretion of Rs 16,323.50 Crores at 12.93% Y-O-Y growth
vii. Bulk deposits (Term deposits of Rs 2 Cr & above including CD and Bank deposits) stood at Rs 52,399.21 Cr as against Rs 44,170.16 Cr with increase of 18.63%. The share of Bulk deposits in Total deposits stood at 25.52% compared to 23.93% in the previous year.
viii. Cost of Deposit for 2019-20 stood at 5.62% as against 5.40% during 2018-19.
9.2 Credit Growth:
9.2.1 The credit portfolio of the Bank increased from the level of Rs 1,21,251.21 crore as at 31.03.2019 to Rs 1,27,399.05 crore as at 31.03.2020, with an absolute increase of Rs 6,147.84 crore at 5.07% during the financial year ended 31.03.2020.
9.2.2.The average advances increased by Rs 97.69 crore from the level of Rs 1,16,510.58 crore as at March 2019 to Rs 1,16,608.27 crore as at March 2020, registering a positive growth of 0.08%. The CD ratio as on 31.03.2020, stood at 62.04%.
9.3 Priority Sector Lending
9.3.1 Sectorial Deployment:
The total amount of credit deployed to Priority sector stood at Rs 61,513 crore as on March 2020, forming 43.27 % of Adjusted Net Bank Credit (ANBC) on quarterly average basis for the FY 201920 as against the regulatory target of 40% of ANBC stipulated by RBI.
Banks performance vis-a-vis regulatory target is furnished in the table below:
| Parameter | Achievement as at Mar-20 with RIDF (in Rs Crs.) | Targets Stipulated by RBI (as % of ANBC) | Achievement for the FY20 (as % of ANBC) # |
| Total Priority Sector | 61,513 | 40% | 43.27% |
| Total Agriculture | 24,769 | 18% | 18.24% |
| SF/MF | 13,540 | 8% | 9.88% |
| Micro Enterprises | 12,192 | 7.50% | 7.57% |
| Credit Flow to Weaker Section | 19,077 | 10% | 13.04% |
# As per RBI guidelines a simple average of all quarters has been arrived at and considered for calculating the achievement of priority sector subtargets.
Credit extended to Agriculture sector on quarterly average basis for the FY 2019-20 stood at 18.24% of ANBC against the regulatory target of 18.00%, with outstanding level of Rs 24,769 crore as on March 2020.
Bank surpassed the Agri. credit disbursement target set by Government of India during FY 2019-20 Under Special Agriculture Credit Plan (SACP), the Bank has disbursed Rs 20,264 crore during the year 2019-20 against the disbursement target of Rs 16,565 crore (122% achievement).
Lending to Small and Marginal farmers has reached a level of Rs 13,540 crore as on March 2020, exceeding the regulatory target of 8% of ANBC by reaching a level of 9.88% on quarterly average basis for the FY 2019-20.
RuPay Kisan Credit cards (ATM-enabled) were issued to over 2.43 lakh Kisan Credit Card (KCC) borrowers as on March 2020 as a part of digital banking initiative.
The advances under Micro Enterprises stood at Rs 12,192 crore which was 7.57 % of ANBC on quarterly average basis for the FY 2019-20, as against the regulatory target of 7.50 % of ANBC.
9.4 Social Lending:
Dispensation of Credit under various Government Sponsored Social Lending / Poverty Alleviation Schemes and to Weaker sections of the society was given due importance so as to fulfill the Banks socio- economic obligations.
The total credit flow to Self Help Groups (SHGs) & Joint liability Groups (JLGs) has increased from Rs 2,636 crore as on 31.03.2019 to Rs 3,087 crore as on 31.03.2020 by registering a growth of Rs 451 crore (17.10%). Bank encouraged direct lending to Women Self Help Groups. Credit to Women Self Help Groups (SHGs) & Joint liability Groups (JLGs) stood at Rs 2,546 crore as on 31.03.2020 compared to Rs 2,236 crore as on 31.03.2019 with a growth of Rs 310 crore.
Advances to Weaker sections stood at Rs 19,077 crore forming 13.14 % of ANBC as on 31.03.2020 as against the target of 10 % of ANBC.
Finance to women beneficiaries stood at Rs 11,837 crore as on 31.03.2020 (8.40% of ANBC) as against Rs 11,571 crore as on 31.03.2019 and registered Y-o-Y growth of Rs 266 Crore.
As on 31.03.2020, out of the Total Priority Sector credit of Rs 61,513 crore, the outstanding credit to Scheduled Caste/ Scheduled Tribe stood at Rs 1,273 crore.
Credit exposure to minority Communities stood at Rs 7,030 crore and reached a level of 12.69% of Priority Sector advances as on March 2020.
Awards & accolades:
Bank has won following awards during the financial year 2019-20:
1. Bank has bagged 3 awards instituted by Chamber of Indian Micro Small & Medium Enterprises [CIMSME] consistently for the 5th year in a row under the following categories:
1. Best MSME Bank Award - Runner up (Emerging Category).
II. CSR Initiatives & Business Responsibility Award - Winner (Emerging Category)
III. Best Bank for Promotional Schemes Award - Runner up (Emerging Category)
2. Bank has bagged “BEST MSME BANK-WINNER 2018” award during 6th ASSOCHAM SMEs Excellence Award - 2018 instituted by The Associated Chambers of Commerce & Industry of India (ASSOCHAM).
9.5. Retail Lending
Tailor made retail loans viz. housing, vehicle, education, personal loans, etc. are marketed under the brand name “Corp Schemes”. The portfolio under Corp Schemes as on 31.03.2020 stood at Rs 24,701 crore as against Rs 26,244 crore as on 31.03.2019. There is a decline of Rs 1,543 crore (-5.9%) during current fiscal 2019-20 as against negative growth of Rs 2,668 crore (-9.2%) registered during corresponding period of last year.
Outstanding Balance as on |
Absolute Growth |
|||
| 31.03.2018 | 31.03.2019 | 31.03.2020 | 01.04.18 to 31.03.19 | 01.04.19 to 31.03.20 |
| 28912 | 26244 | 24701 | -2668 (-9.2%) | -1543 (-5.9%) |
9.6. Home loans hold a major share (53.9%) in the Corp Schemes portfolio. As on 31.03.2020, the outstanding balance under Housing Loan stood at Rs 13,313 crore. During the Financial Year, there is a decline of Rs 161 crore (-1.2%) under the said scheme.
9.7. The outstanding balance under Education Loans viz Corp Vidya Scheme as on 31.03.20 is Rs 1,456.9 crore. There is a decline of Rs 117 crore (-7.4%) under the said scheme during the current fiscal.
9.8. The total sanctions of all retail loans during Financial Year 2019-20 have increased by Rs 1,109 crore compared to sanctions during the corresponding period of last year and in respect of loan accounts it has increased by 8,237 loans.
9.9. Special promotional campaign conducted during the Financial Year are as under :
• A promotional campaign “Monsoon Offer 2019” was introduced under Housing and Vehicle Loan (personal) for 4 months from 01.06.2019 to 30.09.2019 wherein concession in interest rate and full waiver of processing charges was extended to fresh loans disbursed during the campaign period.
• A promotional campaign “Festival Offer - 2019 [FO- 2019]” was introduced for a period of 4 months from 01.10.2019 to 31.01.2020 wherein 100% Waiver of Processing Fees was offered under Housing Loans (including PMAY) and Vehicle Loans (personal segment). Festival Offer - 2019 was extended as “ Extended Festival Offer - 2020 (EFO-2020)” for a further period of 2 months from 01.02.2020 to 31.03.2020.
9.10 Financial Inclusion
• Government of India has allotted 2,291 villages grouped into 894 Sub Service Areas (SSAs) spread across 23 states under PMJDY for providing basic banking facilities under Financial Inclusion Plan of Reserve Bank of India. Our Bank has provided banking infrastructure at the allotted villages/SSAs through brick & mortar branch at 269 SSAs. In the remaining 625 Sub Service Areas (SSAs) banking infrastructure is provided by engaging Bank Mitras.
• Apart from the 625 PMJDY locations, our Bank has engaged 129 Bank Mitras in Non-PMJDY locations wherever services of Bank Mitras are needed.
• Our Bank has opened branches including banking outlets in 3 aspirational districts allotted to us.
• Our Bank has provided robust, STQC certified,
1.5.1 version compliant Micro ATMs to all the Bank Mitra and all are functioning well. The Micro ATM along with pin pad has enabled all Bank Mitras to perform online, interoperable, Aadhaar & pin based transactions.
• The following services are provided by our Bank Mitras to the customers:
I) Account Opening, 2) Cash deposit (own bank), 3) Cash deposit (other bank—Aadhaar Enabled Payment System/Rupay card), 4) Cash withdrawal (on us), 5) Cash withdrawal (off us), 6) Fund transfer (own bank), 7) Fund transfer (other Bank— Aadhaar Enabled Payment System /Rupay card), 8) Balance enquiry (own bank), 9) Balance enquiry (other bank— Aadhaar Enabled Payment System /Rupay card), 10) Mini statement,
II) TDR/RD opening, 12) Enroll for micro accidental death insurance (PMSBY), 13) Enroll for micro life insurance (PMJJBy), 14) Enroll for social security pension scheme (APY), 15) Pension payment, 16) Aadhaar seeding and 17) Mobile seeding.
• Our Bank has appointed Financial Inclusion Supervisors at 12 Zonal Offices to monitor all the activities of Bank Mitras.
• As on 31.03.2020, 32.47 lakhs accounts are opened under PMJDY and the average balance in funded PMJDY accounts is Rs 4,093/- in our Bank.
• During the financial year, the Bank provided OD facility to 2,27,630 accounts under the PMJDY OD scheme.
• As per UIDAI guidelines, as on 31.03.2020, the Bank has 256 Aadhaar enrolment centers operational in branches all over the country with Bank owned kits and outsourced operators.
10. Awards & achievements:
i. The Bank has bagged two awards from “Governance Now BFSI Awards, 2019”. The Awards were received by the Bank for the Category Rs Mobile App & Rs Cyber Security.
11. Bank has bagged SKOCH Order-of-Merit 2019-Silver for qualifying among the top performing nominations as semi-finalist for Banks Mobile Banking Application- “Corp Ease.” The Bank also won the SKOCH Award-Banking Bronze for the mobile banking app “Corp Ease.”
iii. The Bank has bagged Best Institution Award for excellent implementation of official language policy of the Govt. Of India. The award ceremony was organized under the aegis of Department of Financial Services, Ministry of Finance, Govt. Of India, at Nagpur, Maharashtra
iv. Corporation Bank was honoured with Rajbhasha Kirti Puraskar 2019 for implementation of official language policy of the Government of India.
11. Recovery
11.1 NPA Level:
The gross NPA level of the bank stood at Rs 19399.02 crore as on 31.03.2020 as compared to Rs 20723.68 crore as on 31.03.2019. The gross NPA constituted 13.80% of the gross advances as on 31.03.2020 as against 15.35% at the end of the corresponding previous financial year.
The Net NPA of the bank stood at Rs 6256.97 Crore as on 31.03.2020 as compared to Rs 6926.64 Crore as on 31.03.2019. The Net NPA constituted 4.91% of the Net Advances as against 5.71% at the end of the corresponding previous financial year.
11.2 Cash Recovery & Up Gradation:
| Particulars | 31.03.2019 | 31.03.2020 |
| Cash Recovery (CR) | 3368.72 | 4041.44 |
| Up Gradation (UG) | 1824.04 | 1761.04 |
| TOTAL = CR + UG | 5192.76 | 5802.48 |
The Cash Recovery and up gradation of NPAs during the financial year 2019-20 was Rs 5802.48 Cr as compared to Rs 5192.76 Cr in the previous year.
11.3 Asset Category Wise Classification Of Advances As On 31.03.2020.
| Category | 31.03.2018 |
31.03.2019 |
31.03.2020 |
|||
| Amount | % to total assets | Amount | % to total assets | Amount | % to total assets | |
| 1 Standard | 1,05,791.82 | 82.65 | 114324.57 | 84.65 | 121142.08 | 86.20 |
| 2 Sub - Standard | 5,814.76 | 4.54 | 4313.76 | 3.19 | 3131.82 | 2.23 |
| 3 Doubtful | 16,087.82 | 12.57 | 15781.63 | 11.69 | 13476.61 | 9.59 |
| 4 Loss | 310.86 | 0.24 | 628.29 | 0.47 | 2790.59 | 1.99 |
| GROSS CREDIT | 1,28,005.26 | 100.00 | 1,35,048.25 | 100.00 | 1,40,541.10 | 100.00 |
11.4 Performance Under Various Recovery Methods & Action Plan For 2020-21.
11.4.1 SARFAESI:
The bank has taken swift and time bound steps for recovery of NPAs through SARFAESI Action. During the current fiscal, recovery/up gradation through SARFAESI action amounted to Rs 723.22 Crore in 1633 accounts. This includes recovery/up gradation on initiation of SARFAESI action and also through repossession and sale of secured assets.
11.4.2 NATION WIDE MEGA E-AUCTION:
Conducting of Nation Wide Mega E-Auction of secured assets is identified as a very effective strategy in putting up secured assets for sale under SARFAESI. Such auctions are conducted by the Recovery Division at the Head Office Level in a highly professional/ cost-effective manner through tie-up with e-auction portals.
During the Financial Year 2019-20 till 31.03.2020, 339 properties were sold in the Mega E-Auction / other auctions resulting in Cash Recovery/Up gradation/Property Sale proceeds worth Rs 243 Crore.
Nation-wide mega E-Auction is a readymade platform for the branches to put up the secured assets for E-Auction under the SARFAESI Act. The schedule of the e-auctions are finalized well in advance and informed to the branches/offices to enable them to identify and put up maximum number of properties for sale.
11.4.3 DRT SUITS:
Simultaneously with initiating action under SARFAESI suits have been filed in DRTs for recovery of the dues. As on 31st March 2020, 8134 cases involving an aggregate amount of Rs 31291 Crore is in various stages at 34 DRTs.
11.4.4 COMPROMISE / ONE TIME SETTLEMENTS:
Compromise/One Time Settlement of NPAs is encouraged. The bank has aggressively pursued Compromise/OTS Settlement as a major recovery strategy to recover hard core NPA Accounts through amicable settlement. Branches have been sensitized about the need for submitting as many OTS Proposals as possible for sanction to ZO/ CO & Head Office. Executives from Head Office during their visit to the field met NPA borrowers and sourced OTS Proposals. During the Financial Year 2019-20, 106 Compromise /OTS Proposals were approved for a total sum of Rs 821.29 Crore at HO Level.
11.4.5 CORP RIYAYATI-VII/RIYAYATHI PLUS:
Apart from settlement under normal OTS, the bank has also formulated special OTS Schemes. Corp Riyayathi VII Scheme- a One Time Settlement Scheme for small value NPAs with balance Outstanding up to Rs 10 Lakh was formulated and launched on 01.05.2019. In order to hasten the process of sanctions, the bank has setup a committee at Head Office headed by Asst. General Manager and sanctions were accorded on-line on the same day of the receipt of the proposal. The scheme came to a close on 31.03.2020. Till 31.03.2020, 7449 accounts were settled under the scheme for Rs 60.69 Crore. A sum of Rs. 41.49 crore has already been recovered.
Under Corp Riyayathi Plus sanctions were accorded in respect of 86 borrowal accounts amounting to Rs 14.08 Cr.
11.4.6 OTS SCHEME FOR AGRI-NPA:
OTS Scheme for Agri-NPA, Agri-Restructured Loans and MSME Loans
Under Agri OTS scheme, total of 1812 accounts amounting to 49.63 Cr were settled and 1319 accounts amounting to Rs 149.02 Cr were settled under MSME OTS Scheme.
11.4.7 LOK ADALAT:
The bank has actively participated in the National Lok Adalat conducted by NALSA by involving the Law Officers at Head Office and Zonal Offices. During the Financial Year 2019-20, 3035 accounts were settled under Lok Adalat scheme for Rs 43.35 Crore. A total sum of Rs 8.54 Crore was recovered in cash on the spot.
11.4.8 MEGA RECOVERY CAMPS:
Bank has organized Mega Recovery Camps across the Zones for the settlement of accounts, especially small value NPA Accounts under Corp Riyayathi Scheme/banks General OTS Scheme. Such camps were held jointly by 4 to 5 branches with high concentration of NPAs in a common venue. With the help of Special Recovery Task Force Members and Recovery agents, the borrowers are contacted and bought to the negotiating table for discussing and settling their long pending dues. Such camps helped in settling and closing a large number of small value NPA Accounts.
11.4.9 EXCLUSIVE VERTICALS:
Monitoring and follow up of stressed/NPA Accounts/ PWO accounts intensified through exclusive verticals set up and Head Office and Circle Offices for this purpose. Recovery in Prudentially Written off accounts during the Financial Year 2019-20 amounted to Rs 706.88 Crore as against Rs 318.06 Crore during the financial year 2018-19.
11.4.10 RESOLUTION BY REFERRING TO NCLT UNDER IBC 2016:
Resolution of stressed/NPA Accounts by referring to National Company Law Tribunal (NCLT) under Insolvency and Bankruptcy code 2016 (IBC) for Corporate Insolvency and Resolution Process (CIRP) is yet another tool in the hands of the bank for the recovery of the dues. Apart from referring/ proactively participating in the resolution process of the RBI directed accounts, bank has identified and referred various accounts for resolution under IBC 2016 to NCLT. As on 31.03.2020, 249 accounts involving an amount of Rs 19080.45 Crore is before NCLT in various stages. During the FY 2019-20, the bank could recover more than Rs 1846.13 Crore through resolutions under IBC 2016.
12. Treasury and Investment Operations
The aggregate investment of the Bank as on 31 st March 2020 was Rs 66,432.44 Crore with maturity mix of securities consistent with risk perceptions and investment policies of the Bank.
The average yield on investments during the year under report stood at 7.23% compared to 7.36% as at the end of the previous year.
The net profit/(loss) from sale of investments was Rs 388.47 Crore for the year ended 31.03.2020 as compared to Rs (80.93) Crore in the previous year.
The Bank has put in place tools like Duration, Modified Duration and Value at Risk for effective risk management.
13. International Banking
The Bank has 49 Designated Branches and one Forex Hub at Bengaluru, which cater to the foreign exchange business. Cumulative Merchant turnover has increased by 51.25 %, from Rs 62,612.36 crore to Rs 94,703.00 crore, during the year 2019-20.
Foreign Exchange Income of Treasury has increased by 15.43%, from Rs 99.18 crore to Rs 114.48 crore, during the year.
Fee Based Income from Designated Forex Branches has decreased by 19.70% from Rs 66 crore to Rs 53 crore.
Currency futures income has increased by 25.98% from Rs 7.16 crore to Rs 9.02 crore this year.
14. Precious Metal Business
In view of the amalgamation with Union Bank of India, already they have license for import of Gold/ Silver, RBI has not renewed our license which was expiring on 31.03.2020.
15. Designated Branches and Treasury and Investment Department
15.1 Process Improvement
a) Straight Through Processing (STP) is in place between Designated Branches and Treasury Branch for all Forex Transactions. All the transactions of branches are auto posted to Treasury accounting software through STP
b) Link Branches have been enabled for taking the rate directly from Treasury through Rate Chat Module and all the FCNR transactions are brought under STP Mirror balance at Treasury Branch is updated instantaneously through STP
c) Nostro entries are uploaded in the system due to which majority of the entries are getting auto reconciled.
e) Exchange Houses - Reconciliation process has been simplified and daily balancing in Foreign Currency has been made available.
f) Integration of the swift system with the CBS has been completed and there is no provision for manual creation of SWIFT.
g) Bank has adopted stringent norms to follow up for all outward foreign currency payments and have also implemented a separate level of swift verification to ensure that all the payments are routed only after registering a corresponding entry in the CBS.
h) Forex Hub at Bangalore has been further strengthen with trained staff to cater to the Forex requirement of all designated branches and ensure compliance of FEMA/ RBI/ FEDAI guidelines. As a step further, Bank has centralized all its import related transactions at Hub thereby implementing the guidelines by the regulator related to Swift operations.
i) Bank is actively trading in currency futures on BSE, NSE and MSEIL to increase the profit.
16. Collection and Payment Services (CAPS)
• e-Corporation Bank has been a pioneer in Collection and Payment Services and was the first among the PSU Banks to start CMS services and setup exclusive CMS Hub and CAPS Branches in 1991.
• We have an exclusive setup with robust technology to handle the constraints faced by the corporates in managing their receivables and Payments.
• CAPS products and services are well accepted in the market and at par with any other competitor Banks in terms of service level and efficiency.
• The tangible advantages are - Efficient financial management with enhanced liquidity, Cost reduction through auto reconciliation and Profit maximization.
• The other advantage of our services includes Effective control, Competitive edge, Customized MIS with Host to Host & Web Services capabilities and Single point query resolution capabilities.
• We have been a consistent provider of cash management services in the market since decades. Introduction of new products and optimizing them in accordance with the market needs has been our strength.
e-Corporation Bank CAPS is known for C-Customization A-Accuracy P-Process Efficiency S-Speed
Products
| Collection Products | Payment Products | Other Products |
| • Cash PIF | • Corp Remit - ABB/NEFT/ RTGS/IMPS | • Automated Invoice Finance |
| • Cheque Collection- FCS/CCS | ||
| • Corp Pay | • Dealer Finance - With Recourse/ Without Recourse/ FLDG | |
| • Virtual Mode - NEFT/RTGS/IMPS | ||
| • Correspondent Bank DD Drawing arrangement | ||
| • Mandate - Direct Debit / NACH Debit | ||
| • ePG - Debit Card/ Credit Card/Net Banking/Bharat Bill Payment Services | ||
| • NACH Credit | ||
| • Vendor Finance | ||
| • Unified Fee Collection Services(UFCS) | ||
| • Sweep Facility |
Performance highlights for FY 2019-20
| Parameter | Actual fiscal growth |
Y-o-Y Growth |
Target |
|||||||
2018-19 |
2019-20 |
|||||||||
| Mar 17 | Mar 18 | Mar 19 | Mar 20 | Abs | % | Abs | % | Mar 20 | Gap | |
| 1 Non-Int Income | 23.82 | 32.41 | 46.33 | 44.68 | 13.93 | 42.97 | -1.65 | -3.6 | 50.00 | 5.32 |
| 2 Interest Income | 9.20 | 10.22 | 10.50 | 11.14 | 0.28 | 2.76 | 0.64 | 6.1 | 15.00 | -3.86 |
| 3 Total Income | 33.02 | 42.62 | 56.83 | 55.82 | 14.21 | 33.33 | -1.01 | -1.8 | 65.00 | -9.18 |
| 4 Clientele | 243 | 246 | 262 | 187 | 16 | 6.50 | -75 | -29 | 350 | -163 |
Achievements during FY 2019-20:
• 5 CAPS Branches have achieved their income targets, 3 CAPS Branches have achieved client targets.
• Net profit generated for the FY 2019-20 is Rs 44.28 Crores.
• Total of 187 clients have been sanctioned with CAPS products and services during FY 2019-2020 of which 45 EPG proposals are there.
• We have integrated our Corp Net banking gateway in Rajasthan Payment Platform to accept payments for online services. This will help in retention of our bank customers and would facilitate them to make the payments conveniently.
• Customized solution is provided to Delhi Development Authority by means of web application cum E-Payment gateway for beneficiaries of DDA Housing Scheme-2019.
• Mysore City corporation has been on boarded as a utility biller by us on BBPS platform. The customers can pay their water Bills through Corp Ease/other banking channels. This will pave way for a good float and fee based income to our bank.
• 21,066 mandates under Pradhan Mantri Shram Yogi Maan-Dhan Yojana(PMSYM) have been received and processed
• BHIM/UPI QR has been enabled for the Bank.
Reasons for decrease in cumulative income:
• CAPS Hyderabad handled Rythu Bandhu scheme of Telangana Govt and received an additional income of Two Crore Rupees in last Financial Year 2018-19.
• M/S Capital first was availing Mandate facilities at Mumbai CAPS and we were earning around Rs 20 lakh monthly. Since they have now merged with IDFC Bank Ltd., have stopped availing service from us. Hence income of Mumbai-CAPS has come down by around 240 lakh.
• MRL Posnet was availing Corp Remit facility (NEFT/ RTGS) from CAPS- Bangalore which was giving us an income of Rs 8-10 lakh per month. Now as there is provision available in FINACLE for bulk upload the operations have been taken over by Merchant Acquiring Cell (MAC) hence there is a reduction in cumulative income of around Rs 38 lakh at CAPS Bangalore.
• Reduction in volume of Direct Debit Mandates and NACH Mandates in February/March due to the market dip has also resulted in considerable decrease of income.
Specific corrective steps to be taken to meet the required targets:
Our bank has been mandated to act as Nodal Bank for Chief Ministers Employment Generation Programme (CMEGP) by Govt of Maharashtra (GOM) for disbursement of subsidy. Average CASA of Rs 50 Crore is expected.
• Efforts are being made to act as a Nodal bank to Ministry of Food Processing Industries (MOFPI) for disbursement of Govt. Backed subsidy/claims which will help in improving our Banks CASA. If materialized, an annual disbursement to the tune of Rs 1,000 Crore is expected.
• We are positioning CAPS as Payment Processing HUB with customized solutions, which support Bank in acquiring and retaining CASA accounts.
• Focus will be given on canvassing Educational Institutions, Public Utility/Corporations, Govt. Agencies for enabling fees/bills collection and various payments under Unified Fee Collection Service which has potential for generating CASA.
• Effort shall be made to exploit New Core Banking capabilities through process integration to offer unified services to customers.
• Division proposes to expand Automated Invoice Financing to “A” rated companies by marketing the product aggressively to widen the dealer base and boost SME portfolio.
• New Aggregators will be added for Net banking Gateway services. Division is expecting good income from the aggregators on account of net banking transactions done on their sub-merchant Web portals.
• To augment CASA generation for the Bank, float- based pricing would be offered to top rated corporates, Institutions & Govt. Agencies having high volume of business.
• Target our major credit clients for CMS services and endeavor shall be made to bring back lost clients by matching service levels and price with that of competitors.
17. Information Technology Initiatives
17.1 ISO 27001:2013 CERTIFICATION FOR IT INFRASTRUCTURE OF THE BANK:
Sustenance Audit for ISO 27001:2013 Certification under Information Security & Management System
[ISMS] Framework by British Standards Institution [BSI] conferred on the IT Infrastructure of the Bank, comprising ITD & DR setup at Mangalore and Data Centre & NLS at Bangalore, was carried out and the same is renewed for further 03 years i.e. up to 2023.
17.2 NETWORK RELATED INITIATIVES
• Takeover of Network Monitoring & Management Service for the Banks infra has been completed successfully by IBM from HCL Comnet by stationed dedicated resources at 06 different locations of the Bank to ensure better and faster support to pan India branches.
• MPLS connectivity for all the branches have been upgraded to 2 Mbps wherever feasible for better and faster user experience for branch staff. Bank is also in process to provide secondary link to all branches from an alternate service provider as a part of BCP (Business Continuity Plan). Secondary link has already been provided to critical locations and service branches along with 1000+ branches.
17.3 OTHER DIGITAL INTIATIVES
• Introduction of new Mobile app i.e. “Recovery Assist” : This app facilitates the branch Heads for better monitoring of overdue/s in loan accounts. The app can also initiate calls to the customer (Borrowers/co-borrower/guarantors) by using the mobile numbers captured in CBS and record the feedback of the calls for future course of recovery action.
• CorpEASE, the mobile banking solution available to both Android and iOS users which assists the customers to do banking transactions like funds transfer, bill payment, deposit opening & closure cheque book request, passbook management, holiday information etc., at their location and convenience. The application is available in 10 Indian languages including English, Hindi. Few of the enhanced features, which are included recently are.
• Enrolment and subscription of PMJJBY & PMSBY
• BHIM bill payment to pay utility bills like Broadband, DTH, Electricity, Gas, Landline, Water bill, Postpaid mobile bill etc
• NPS (New Pension Scheme) can be subscribed and pay their contribution
• Customer can manage the Debit card limit, Debit card blocking and unblocking and generate Green Pin in case of new card.
• Under Travel & leisure - customers can recharge their Mobile, DTH, Data card and book the tickets for Flight, Bus and Hotel.
• NEFT can be done 24x7
• Cooling period system has been modified in case of new beneficiary as User can remit the fund up to Rs 10,000/- in first 4 hours, Rs 2 lakh in next 20 hours and post cooling period, can remit as per the limit.
• PAN validation through UPI has been enabled.
• Login to multiple CIF is allowed in case the customer is having Retail CIF as well as Corporate CIF having operation in account as sole proprietor ship.
• Fund transfer rights have been given to NRE/NRO accounts holder to their own SB/CA/own loan accounts.
• Replacement of new logo at home page and screens of all the menus as a part of post amalgamation with Union Bank of India.
• FEBA - Finacle e-Banking Application, a contemporary New Internet Banking added many features and facilities like-
• Customizable transaction limit, self-registration through Debit card validation, Mobile Token for hassle free transactions.
• Blocking and unblocking of Debit cards
• NPS (New Pension Scheme) can be subscribed and pay their contribution subsequently.
• To enhance the customer convenience and security, cooling period has been modified in case of new beneficiary as remit the fund up to Rs 10,000/- in first 4 hours, Rupees one lakh in next 20 hours and post cooling period, can remit as per the default limit.
• In case of new Debit card, customer can generate the PIN know as “Green PIN”
• Under e-Service Tab, loan portal has been linked as convenience to user so that they can apply online for Housing loan, Vehicle Loan, Vidya Loan & MSME loan.
• Availability of NEFT 24x7
• Customers can register for SMS banking
• Scheduling of email statements is possible as per the frequency opted
• Geojit Technology has been onboarded to provide the ease to customers for investment in IPOs and Mutual funds.
17.4 SECURITY SOLUTIONS
• To fortify the network and data security posture of the Bank, various security solutions were implemented in line with the recommendations of the Cyber Security Framework of RBI. Major implementations are:
• Network Access Control
• Next Generation Firewalls.
17.5 PRODUCTIVITY ENHANCEMENT INITIATIVES
• As part of Enterprise Agreement (EA) with Microsoft, various productivity tools of cloud-based Office Suite O-365 were implemented:
• Microsoft Teams: Enterprise level Video Conferencing facility which is being used for Virtual Training and review conference . Solution is also being used for addressing all the staff of the Bank.
18. Credit Cards
18.1 Corp Credit Card : Credit card facilitates the individual clients to make hassle free and risk free payments. In view of the large potential associated with it, the bank has taken steps to expand this portfolio. The bank is predominantly issuing cards to its existing customers. As on 31.03.2020, the bank has issued 75,682 credit cards with an aggregate limit of Rs 505.51 crores having outstanding balance of Rs 57.74 crores.
The bank earned total income of Rs 18.40 crores and gross profit of Rs 14.43 crores for 2019-20 under credit cards portfolio. Total of 17.10 lakh POS transactions aggregating to Rs. 406.95 crores were transacted using these cards during the year.
18.2 LIC Co-branded Credit Cards: As on 31.03.2020, the bank has issued 38,815 LIC credit cards with an aggregate limit of Rs 224.76 crores having outstanding balance of Rs 8.64 crores.
The bank earned total income of Rs. 2.99 crores and gross profit of Rs 2.42 crores for 2019-20 under LIC credit cards portfolio. Total of 2.17 lakh POS transactions aggregating to Rs 54.03 crores were transacted using these cards during the year.
18.3 Credit Card : For customer convenience the bank has introduced tech-savvy services such as auto debit facility, Instant PIN generation, SMS alerts, e-statements, online viewing of credit card details etc. Bank has launched RuPay credit card variants of RuPay Platinum and RuPay Select apart from premium variant of VISA Platinum and VISA Signature cards to cater the needs of Premium and
Super Premium customers. All these facilities are expected to help the customers to use the cards efficiently. During the year a total of 5020 complaints (as per Annual Report) were received from credit card customers. All these complaints were resolved to the satisfaction of the customers.
The exercise of identification of NPA in respect of credit card advances is presently being done manually in case the customer opt to pay minimum amount of 5% or more. It is suggested that with the increasing number of credit cards, a system/ software be developed for classification and necessary disclosure.
Details of credit card issued and outstanding as at 31st March, 2020 are as under:
Credit Card Issued :
| Particulars | Number of Cards as on 31.03.2020 | Issued during current FY | Number of Cards as on 31.03.2020 |
| Corp Cards | 71978 | 3704 | 75682 |
| LIC Cards (New) | 38616 | 199 | 38815 |
| Total | 110594 | 3903 | 114497 |
Credit Card Outstanding :
| Particulars | Outstanding as on 31.03.2020 | NPA as on 31.03.2020* |
| Corp Cards | 5574.05 | 0.00 |
| LIC Cards (New) | 864.47 | 0.00 |
| Total | 6438.52 | 0.00 |
18.4 Delivery Channels
18.4.1 ATMs: Automated Teller machines (ATMs) are the most popular alternate channel facilitating customers to access their account for withdrawing cash and for value added services at any time and from anywhere.
In order to closely monitor the ATMs, the bank is having a three layered structure wherein the ATM Mitra/ Branch Manager would ensure monitoring of the ATMs attached to his/her branch, ensure proper housekeeping of the ATM premises and be the first level of escalation in case of downtime, ensure close monitoring of the cash indents and provide ATM fit currency.
The Channel Manager of the Zonal would ensure proper ambience for all ATM locations, liaise with the vendors to ensure uptime as per Service Level Agreement (SLA) and ensure there are no cash outages or device downtime, ensure that downtime reports are analyzed and proper action is initiated.
The Financial Transaction Switch (FTS) at Bangalore is the nodal center for all ATM related activities and providing MIS on ATMs.
This division coordinates with the Channel Managers and vendors for improvement of uptime, hits at ATMs, closure and relocation of the low hits ATMs and also coordinates with IT Division for supply of new ATM machines and loading of software.
The Bank has 2,623 ATMs as on 31.03.2020. ATMs are a very popular channel of the bank recording about 75 to 80 lakh hits every month.
Details of ATMs
| Particulars | As on 31.03.2019 | As on 31.03.2020 | Installed during the year |
| Owned | 1,285 | 1,998 | 713 |
| DFS(MoF) | 1,730 | 625 | -1,105 |
| Total | 3,015 | 2,623 | -392 |
Number of ATMs have reduced during FY 2019-20 due to closure of low hit ATMs. Bank has upgraded all its Capex ATMs with EMV Terminal Security Solution (TSS) and Anti skimming device to comply with the RBI security guidelines.
18.4.2 Debit Cards: As on 31.03.2020, the total number of outstanding debit cards (all variants) stood at 81.43 lakhs. A total of 13.40 crore transactions were recorded on ATMs, POS Machines & Ecommerce during the year under review and 93,719 complaints were received and resolved.
18.4.3 e-lobby: In order to provide banking convenience to customers, the bank is operationalizing e-Lobby. The e-Lobby has self service automation kiosks which include cash deposit machine, cheque deposit machine, self-service passbook printer and an ATM. The machines are user-friendly and can be used at ease by the customers. As of 31.03.2020, the bank has set up 352 Cash Deposit Kiosks, 108 Cheque Deposit Kiosks and 1085 Passbook Kiosks.
18.4.4 POS Terminals: As of 31.03.2020, the bank had installed 3,01,195 POS terminals (including mobile POS) at various Merchant Establishments. It includes 2,93,710 POs installed under aggregator model. This value added service has enabled the bank to not only enroll new customers but also retain existing customers. The bank is also sponsoring smaller banks for POS acquisition by acting as settlement banks.
18.4.5 Mobile Banking: As on 31.03.2020, the number of total mobile application downloads are 10,38,139.
A total of 1.60 crore transactions were recorded through mobile banking application, during the year under review. During March20 quarter bank has introduced new features in Mobile banking app through which customers can Book Bus tickets, Flights, Hotels and do Mobile and DTH recharges and This new facility is well received by our customers and about 3,500 transactions per day are recorded.
19. Marketing Initiatives
19.1 Campaigns
During the financial year 2019-20 the division has conducted two campaigns viz, Jansuraksha II campaign and Tablet Banking Drive. The performance under both the campaigns are shown below.
| Name of the Campaign | Period | Result |
| 1 Jansuraksha II Campaign | 01.07.2019 to 31.07.2019 | PMSBY - 23,442 PMJJBY - 75,873 APY - 4668 Religare Health Insurance - Rs 1 Cr (premium amount) |
| 2 Tablet Banking Drive | 23.08.2019 to 30.09.2019 | 2983 A/cs |
In addition to the above, all the Marketing Officers have been given with Tablets for opening accounts through Tablet Banking application at customer doorstep/ conveniences. To monitor the performance of Marketing Officers under tablet banking, a minimum target of 100 A/cs per month has been given to individual Marketing Officers. With consistent follow-up with Marketing Officers, we could open 25,734 A/cs through Tablet Banking Application during the financial year 2019-20.
19.2 Special focus on Payroll Segment:
Division has given thrust on Payroll Accounts during the FY 2019-20 by giving separate targets to payroll variants. The performance under payroll variants are shown below.
Performance under Payroll - FY 2019-20
| A/cs | Balance [in crs] | Per A/c bal | |
| CORP PAYROLL - NEW | 1,10,703 | 42 | 3,764 |
| CORP PAY -SUPER | 39,558 | 26 | 6,673 |
| CORP PAY - SIGNATURE | 696 | 5 | 67,892 |
| CORP PAY - ELITE | 9,579 | 33 | 33,990 |
| CORP PAY-DELITE | 3,272 | 41 | 1,26,360 |
19.3 New Initiatives:
i. Introduced Daily reporting of Marketing Officers through Microsoft Kaizala.
ii. Added report on Tablet Banking in Microsoft Power Bi.
iii. Daily monitoring of accounts opened through Tablet Banking.
iv. Monthly Performance review of Marketing Officers conducted through Video Conference mode.
v. Procurement of additional tablets for distributing among Marketing Officers.
vi. Flashes on important days/events such as Senior Citizen Day, Sports Day etc.
vii. Tablet Banking Drive for ensuring minimum 100 Account opening through tablets.
viii. Sending Birthday greetings SMS to HNI customers on daily basis.
ix. SMS on retail expos, marketing activities organized at Zonal Level were sent as per the requests received form the zones/branches.
x. Organized Mega Umbrella Camp across the branches on monthly basis.
xi. Online Quiz Rs MIND FIZZ organized for Marketing Officers on various banking and technology products.
xii. Organized Kiosk activity at Big Bazaar during Sabse Saste 5 din campaign (22nd to 26th January 2020) in association with NPCI at Bangalore, Delhi and Kolkata.
xiii. Coordinating with the branches and Insurance companies for the claim settlements. Settlement of claims under Term Life insurance and Personal Accidental Insurance is shown below.
| Insurance Type | Claims settled for the period April 2019 -March 2020 |
| Term Life Insurance | 2.35 Cr |
| Personal Accidental Insurance | 4.50 Cr |
20. Customer Service
20.1 PGRS Complaints: During the year we have resolved 1967 complaints out of 1975 complaints received through Public Grievance Redressal System and 8 complaints were pending as on 31.03.2020.
20.2 CPGRAMS Complaints : During the year, 874 complaints were disposed of in CPGRAMS Web Portal of the Ministry out of 935 complaints and 61 complaints were pending as on 31.03.2020
20.3 Banking Ombudsman cases:during the year ended 31.03.2020, 850 Banking Ombudsman cases were filed and 549 Banking ombudsman cases were disposed and 326 cases are pending as on 31.03.2020. During the year the Banking Ombudsman has issued one Award of Rs 2,25,000/- against which the Bank has preferred an appeal with the Deputy Governor, RBI, Mumbai
20.4 RBI / Ministry Complaints : During the year we have received 10 RBI complaints and all the complaints were resolved, there were no complaints pending as on 31.03.2020.
20.5 RTI Application and Appeals: During the year we have disposed of 114 RTI Applications and 28 RTI Appeals. There were no RTI applications and RTI appeals pending as on 31.03.2020.
21. Integrated Risk Management System
21.1 Basel-III Compliance
21.1.1 Banks and other financial institutions all over the world have become more interconnected than ever as the time zones separating the financial world has shrunk and truly world has become a smaller place. This integration however also means that geo-political risks arising in one part of the globe also affects other part of the world. Thus, with each passing day newer and more complex risks are arising and financial institutions across the world have to continuously enhance and improve their risk management techniques and architecture to address the growing risks. Basel-II and Basel- III accord are aimed at harmonizing the practices adopted by various banks operating across jurisdictions and countries, under a common supervisory framework, thus bringing uniformity in the Risk management practices.
21.1.2 Risk Management is an integral part of Banks organizational structure and business strategy. Identification, measurement, monitoring and controlling the risks enables the Bank to minimize losses and maximize profits. The major risks faced by the Bank are Credit Risk, Market Risk and Operational Risk.
21.1.3 Our Bank has constituted, three internal committees of executives, namely, Credit Risk Management Committee, Market Risk Management Committee/ Asset Liability Management Committee and Operational Risk Management Committee - for looking after the implementation of Integrated Risk Management system. The Board oversights on Risk Management activities in the Bank is done through Risk Management Committee of the Board.
21.1.4 The Bank has put in place Internal Capital Adequacy Assessment Process (ICAAP) to assess the risks to which it is exposed and has put risk management process in place to manage and mitigate those risks and evaluate the capital adequacy relative to these risks. To enhance risk assessment and to have a better understanding of the likely impact in extreme circumstances, stress testing process is conducted. Stress Testing enables the Banks to identify the vulnerable areas, if any, and to prepare for the same by developing appropriate contingency plans.
21.1.5 Bank has put in place 18 Policies related to Credit, Market, Operational risk and Information Security, which are being reviewed on an annual basis after taking into account the necessary RBI guidelines and internal circulars.
21.2 Credit Risk
21.2.1 In the area of credit risk, the Bank has in the year 2006 implemented the rating models applicable for borrowers under commercial loan segment. The rating models are working on web based enterprise wide solution called Risk Assessment Module (RAM). This software, which is currently being used to appraise the borrowers with exposure of Rs 25 lakh and above, enables the Bank to assess the ratings while preparing the appraisal notes. This apart, Bank has put in place independent validation by Risk Managers of rating assigned by credit officers. It will also help in creating database for moving over to the IRB approaches of Basel - III for capital computation and Ind AS accounting standards.
21.2.2 The Bank has procured Capital Assessment Module (CAM), used for capital computation of credit risk under standardized approach of Basel-III as prescribed by RBI. The Bank has applied to RBI for migrating to Foundation Internal Rating Based approach (FIRB) under Credit Risk. Presently bank is following Standardised approach for computing capital charge on Credit Risk.
21.2.3 Bank has formulated a Group Credit Policy, which lays down policy guidelines for credit management covering all areas of operations, where credit risk is involved. The policy enables the Bank to enhance its risk management capabilities and thereby improve the performance through steady and healthy growth in credit portfolio. Bank has stipulated prudential limits for exposer to group borrowers, Industry, Sector, Geography by linking them to Banks Capital. The Board reviews these prudential limits periodically. The Bank has implemented a multi-tier credit approval system wherein the loan proposals are cleared by an “Approval Grid” before being placed to the respective sanctioning authorities.
21.2.4 On-site Credit Audit of borrowal accounts with limit of Rs 5 core and above is in place.
21.2.5 Bank has created a separate division for monitoring Stressed assets. The division has two verticals, one for monitoring large exposure of Rs 1 crore & above, another for monitoring exposure below Rs 1 crore. The division is guiding and supporting the branches and zonal offices for ensuring close follow up of stressed loan accounts under standard category to avoid fresh slippages. A system driven advance warning system for early identification of probable NPAs with probable reasons for slippages is put in place which is an ideal tool for effective monitoring of standard assets/containing fresh slippages.
21.2.6 The Bank has also undertaken Industry Risk Assessment and Portfolio Studies in order to assess the credit risk at the portfolio level, adopt strategies to improve the quality of portfolio and reduce adverse impact of concentration of exposures to certain borrowers or industries.
21.2.7 Study on rating migration of borrowal accounts is undertaken and appropriate corrective actions are initiated to protect the portfolio quality.
21.2.8 All the issues related to Credit Risk are deliberated in the Credit Risk Management Committee meeting.
21.3 Market Risk
21.3.1 Market Risk is the risk of losses in on-balance sheet and off-balance sheet positions arising from movements in market prices/variables. The changes will have direct impact on the Banks earnings and its capital. These changes can have ramifications on Banks liquidity and profitability.
21.3.2 The Bank has implemented Market Risk Policy for managing the Market Risk in domestic treasury, country risk management and precious metal operations. The policy emphasizes effective measurement, monitoring and management of liquidity, interest rates, domestic treasury operations, foreign exchange and equity as well as commodity price risk of the Bank. The Market Risk in trading book is monitored and managed as per appropriate control mechanism in place. Market position, funding patterns, duration, counterparty limits and various sensitive parameters are closely monitored. Advanced risk management tools such as Value at Risk (VaR), Net Overnight Open Position Limits (NOOPL) and modified duration limits are used in managing Market Risk.
21.3.3 Bank is following Standardized Duration Approach for computation of capital charge for Market Risk.
21.4 Asset Liability Management (ALM)
21.4.1 The ALM function involves planning, directing and controlling the flow, level, mix, cost and yield of various assets and liabilities of the Bank. The primary objective of ALM is not only to eliminate the risk, but to manage it in such a way that the decrease in earnings due to Repricing risk, Yield curve risk and Basis risk is minimal.
21.4.2 As a part of Risk Management and control, the Bank is using ALM system for studying and analyzing the interest rate sensitivity (GAP Analysis), Maturity and Liquidity analysis of Assets and Liabilities. The Bank is measuring the liquidity using the stock and flow approach. Further, models like Earning at Risk and Duration are used for Interest rate risk management. Stress testing of liquidity risk and interest rate risk is conducted on quarterly basis. The Bank applies Value-at-Risk (VaR) to measure the risk in the Trading Book. Asset Liability Management Committee (ALCO) monitors the Liquidity Coverage Ratio (LCR) which promotes short term resilience of Banks to potential liquidity disruptions by ensuring that they have sufficient High Quality Liquid Assets (HQLA) to survive an acute stress scenario over a time horizon of 30 days. The Bank has also implemented a scientifically evolved Internal Transfer Pricing Mechanism by assigning values on basis of current market rates to funds provided and funds used by various Branches/units of the Bank. The Market Risk Management Committee/Asset Liability Management Committee meets at regular intervals to review the interest rate scenario, product pricing for both deposits and advances, desired maturity profile of the incremental assets and liabilities, demand for Bank funds, cash flows of the Bank, profit planning and overall Balance Sheet Management.
21.4.3 Bucketing of outflows and inflows of deposits, advances and investments: The Bank is bucketing various assets and liabilities in various buckets of Structural Liquidity Statements. The residual maturity breakdown of deposits and various nature of advances, investments are bucketed in terms of RBI guidelines on Asset Liability Management issued from time to time i.e. Bills Purchased and Discounted are bucketed as per their respective maturities, Cash Credit/Overdraft are bucketed as per the behavioural pattern i.e. the volatile portions in Day 1,2-7 days and 8-14 days and core portion in over 1-3 years bucket, term Loans under respective maturity buckets, NPA: Substandard over 3-5 years, Doubtful and Loss over 5 years bucket. Investments are bucketed as per respective maturity buckets/according to defeasance periods and in terms of ALM guidelines issued by RBI.
21.4.4 Residual Maturity Breakdown of assets as on 31.03.2020
| Maturity Buckets | Cash and Balance with RBI | Balances with Banks and Money at Call and Short Notice | Investments | Advances | Fixed Assets | Other Assets | Grand Total |
| Next Day | 15,955.1 | 522.9 | 149,012.9 | 12,913.4 | - | 17,737.1 | 196,141.3 |
| 2 - 7 Days | 83,786.8 | 3,646.3 | 15,076.6 | 33,584.9 | - | 29,177.4 | 165,272.0 |
| 8 -14 Days | 2,203.4 | 0.0 | 10,781.8 | 18,183.1 | - | 34,303.5 | 65,471.8 |
| 15- 30 Days | 2,640.0 | 7,703.5 | 7,631.3 | 59,034.6 | - | 4,680.1 | 81,689.4 |
| 31 Days - 2 Months | 2,111.2 | 0.0 | 15,613.7 | 12,244.4 | - | 3,705.5 | 33,674.9 |
| >2 Months-3 Months | 2,158.5 | 0.0 | 6,486.4 | 78,578.0 | - | 453.7 | 87,676.7 |
| >3 Months-6 Months | 3,577.5 | 756.7 | 28,619.1 | 46,309.1 | - | 2,973.9 | 82,236.1 |
| >6 Months-1Yr | 9,173.6 | 0.0 | 79,634.0 | 314,328.5 | - | 8,468.8 | 411,604.9 |
| >1Yr-3 Yrs | 10,406.3 | 0.0 | 68,560.4 | 467,180.2 | - | 64,903.1 | 611,049.9 |
| >3 Yrs- 5 Yrs | 2,453.3 | 0.0 | 14,806.2 | 110,219.8 | - | 12,529.7 | 140,009.0 |
| >5 Yrs | 22,986.6 | 0.0 | 268,102.0 | 121,414.6 | 13,794.0 | 6,992.0 | 433,289.2 |
| Total | 157,452.3 | 12,629.3 | 664,324.3 | 1,273,990.5 | 13,794.0 | 185,924.9 | 2,308,115.3 |
| Provision and claims held | 11,763.0 | 131,420.5 | - | - | 143,183.5 | ||
| Gross Investments/ Advances | 676,087.4 | 1,405,411.0 | - |
- |
2,451,298.8 | ||
21.5 Implementation of Benchmark rates like Base rate and Marginal Cost of fund based lending Rates (MCLR)
21.5.1 Bank is computing the Marginal cost of fund based lending rates, which are tenor based, with effect from April 1,2016. These rates are reviewed every month.
21.5.2 Bank is reviewing the base rate on quarterly basis.
21.6 Operational Risk
21.6.1 Operational Risk is embedded in all business operations and the management of operational risk is an important part of the sound Integrated Risk Management Structure. Due to size, complexity of business and risk philosophy of the Bank, emphasis is being given to impart knowledge at the field level through continuous training process.
21.6.2 The Bank has implemented Operational Risk Management Policy for managing the operational risk in an effective manner. The Bank has also implemented framework documents for Business Line Mapping, Loss Data Capture, Risk Control Self-Assessment (RCSA) and Key Risk Indicator (KRI). At present Bank is calculating capital charge for operational risk under Basic Indicator Approach.
21.6.3 The Bank has rolled out Incident Reporting module in intranet portal where any operational risk incident can be reported by the branches/offices as and when the incident is detected. IRMD is escalating the incident with various stake holders for immediate response and continuously monitoring the action taken by the Functional Divisions/ Branches to resolve the incident.
21.6.4 The Bank has also rolled out Risk & Control SelfAssessment (RCSA) module in intranet portal where employees can suggest controls to improve systems and procedures in the Bank.
21.6.5 All the issues related to operational Risk are deliberated in the Operational Risk Management Committee meeting.
21.7 Information / Cyber Security
Corporation Bank is committed to provide safe and secure digital banking experience to its customers. In order to achieve Confidentiality, Integrity and Availability of all Information Assets of the Bank and to ensure that the regulatory, operational and contractual requirements are fulfilled, bank has put in place robust systems and procedure as defined in Banks Information Security Policy and Information Security Guidelines.
In line with RBI notification on Cyber Security Frame Work in Banks dated 02.06.2016, our Bank is one of the front runner in formulating Cyber Security Policy, which outlines the directives designed to maintain cyber security, and put in place Cyber Crisis Management plan, a coordinated approach towards preparation for rapid identification, information exchange, response and remediation - to mitigate and recover from malicious cyber related incidents impacting critical business functions and processes of the bank
Taking into account the present cyber threat landscape, Bank has upgraded the capabilities of already existing Security Operation Centre (SOC) to an advanced Cyber -SOC, through which Banks critical IT assets are monitored, assessed, and defended on 24*7 basis.
While the Bank is complying with the directives issued by Reserve Bank of India, from time to time in the area of Information/Cyber security standards, Bank also implements the best practices suggested by organizations like, Indian Computer Emergency Response team(CERT-In),National Critical Information Infrastructure Protection Centre (NCIIPC),and Institute for Development and Research in Banking Technology (IDRBT). The Bank has also complied with the mandatory guidelines issued by SWIFT
Bank is actively participating in various meetings and forums organized by CERT In, RBI and IDRBT to remain updated in latest security technologies and to continuously upgrade the security posture of the bank.
Bank has procured Cyber Insurance Policy for covering Banks IT assets from cyber threats.
22. Manpower Planning and Recruitment
The main objective of Human Resources Management is to ensure high performance of employees for achievement of organizational goals along with their personal growth. The growth of the Bank depends on the efficiency and effectiveness of its human resources. It has been the endeavor of the Bank that optimum work force is available to all field and functional outlets of the Bank at all times.
22.1 The Bank has been reviewing the requirement of staff in various cadres every year and an analysis of the vacancies in various cadres is being made having regard to growth of business, future branch expansion/rationalisation, attrition on account of resignations, retirements on superannuation/VRS etc. At the end of 31.03.2020, total staff strength of the Bank stood at 18486.
22.2 The guidelines for reservation in employment for specified categories are strictly followed by the Bank as per Govt. Policy on reservations accordingly and the indents are placed to the Institute of Banking Personnel Selection (IBPS), Mumbai. The overall representation of Scheduled Casts / Scheduled Tribe employees in the total staff strength was 29.16% (5391) as on 31.03.2020. The Bank has also a fair representation of other reserved categories. As on 31.03.2020, overall 26.67% (4930) belong to Other Backward Communities, 2.14 % (396) belong to differently abled and 6.95% (1284) belong to ExServicemen category.
23. Human Resources Development and Training
Training and development of all Staff Members is a key focus area for the Bank. Training is a major facilitator for the Human Resources of the Bank in achieving the desired business goals of the Bank. Trainings focus on developing key competencies, which are required by individuals to perform their functions effectively. With the banking industry changing dynamically, the role and responsibility of the Bank increases to prepare the work force in tackling the challenges, especially in a situation when the senior experienced Bankers are at the verge of retirement and the new-age young professionals are getting ready to accept the responsibility. The Bank not only has to welcome the new recruits by giving them the basic knowledge about the functioning of industry but also to train them regularly to compensate the difference in experience that the outgoing senior staff members had gained with their long & challenging service records.
During the Financial Year 2019-20, the Bank concentrated on improving the skills of the Human Resources of the Bank based upon their present role and Banks requirement. Accordingly, a total of 15353 Staff Members were imparted different types of trainings involving 40364 Man-days. The details are mentioned here below :
• TRAINING PROGRAMMES HELD
| Programme Type | Actuals FY 2019-20 |
| 1 In-house | 518 |
| 2 In-company | 33 |
| 3 External | 207 |
| 4 Foreign/ Overseas | 2 |
| Total | 760 |
• NUMBER OF STAFF TRAINED
| Programme Type | Actuals FY 2019-20 |
| 1 In-house | 14071 |
| 2 In-company | 763 |
| 3 External | 516 |
| 4 Foreign/ Overseas | 3 |
| Total | 15353 |
• NUMBER OF MAN-DAYS UTILISED
| Programme Type | Actuals FY 2019-20 |
| 1 In-house | 36575 |
| 2 In-company | 2377 |
| 3 External | 1399 |
| 4 Foreign/ Overseas | 13 |
| Total | 40364 |
Out of the total 15353 Staff members trained by the Bank, 4943 Staff members belong to SC/ST community and 3666 Staff Members belong to OBC community.
24. Promotions:
Promotion is a big milestone in the career of every employee. To take care of the aspirations for growth of employees, Bank has been providing optimum opportunities for career progression to the employees to shoulder higher responsibilities. Bank has promoted 1321 employees in FY 201920, filling promotional vacancies of 8 General Managers, 23 Deputy General Managers, 49 Assistant General Managers, 117 Chief Managers, 272 Senior Managers, 537 Managers and 251 Assistant Managers and 64 Clerks.
25. Inspection & Audit
25.1 As per the guidelines of the Government of India and RBI, the Bank has adopted the policy of Risk Based Internal Audit (RBIA). This audit lays focus on proper risk identification and assessment, effective risk containment and management measures, adequacy of control systems and procedures, as well as optimum use of resources. It aims at giving an assurance to the Management on the level of regulatory and systemic compliance, besides assisting in accomplishment of corporate governance objectives.
25.2 In order to have focused attention on internal audit of branches and follow up functions adequately and efficiently, the CAOs, located at important centres across the country, conduct audit and close the audit reports of all branches, other than ELBs.
In terms of the Audit Policy, closure of ELB reports is at IAD-HO. Monthly Circle Audit Committee meetings are held with the CAOs to discuss the critical findings/observations of the audit reports and lodgement of reports.
25.3 All the Branches of the Bank are subjected to internal inspection so as to contain risk, have effective control mechanism and improve efficiency of operations. Risk based internal audit is conducted once in 12 to 18 months depending upon the inspection risk categorisation of each Branch. The periodicity of branch inspection is decided based on the inspection risk rating, in the previous inspection of the branch. Newly opened branches are subjected to first inspection within 6-9 months from the date of starting the operations. Treasury Branch, Mumbai, Forex DBs, CAPS Branches, Currency Chests, Service Branches, ARMBs, Retail Hubs, LIC Hubs etc. are subjected to annual inspection. 2021 Branches were subjected to Risk Based Internal Audit during the FY 2019-20.
25.4 Risk Based Snap Audits (RBSA) were conducted for 89 Branches.
25.5 Management Audit: All the functional Divisions at Head Office, Circle Offices, Zonal Offices & Circle Audit Offices are conducted once in a year. Other Offices such as Capital Market Branch, COBSETI at Chikmagalur, STCs, Lead Bank Offices, CMS Core centres, ATM centres, Credit Card Division, etc. are subjected to Management Audit during the year.
25.6 In terms of RBI guidelines, Concurrent Audit is carried out at the Branches/Offices identified based on risk perception and volume of business handled. 652 branches covering 71% of total business of the Bank as against RBIs stipulation of 70%, were subjected to Concurrent Audit during the year 2019-20, by engaging the services of external firms of Chartered Accountants. Further, identified HO functional Divisions, FTS Centre at, Bangalore, Treasury Branch at Mumbai (which includes Investments, Precious Metal Cell and Forex Cell) were also subjected to Concurrent Audit. Concurrent Auditors meet is held every quarter by each Zonal Office and is attended by the Chief of CAO and an Executive from HO (at times through video conference).
25.7 During 2019-20, Off-Site Audit for 1891 branches was conducted.
25.8 Special Migration Audit (including MIS data verification) and Special Process Audit of interest posting were conducted by external Auditors during
FY 2019-20. The Division has conducted 21 Service Provider Audits, 327 outsourcing audits, 6 locations for SOP compliance audit of DB Management & onsite IT vendor Management. The Division has also conducted IS audits of 18 applications like CBS, FTS, CAPS, NEFT, RTGS, ITMS, UPI infrastructure, SWIFT, Mobile Banking etc. IT Network Audit was conducted at Seven locations of the Bank by external auditors empanelled under CERT-IN.
25.9 Pre-disbursement Credit audit of borrowal accounts with credit limits Rs 50 lakhs & above has been carried out. During 2019-20, 182 pre-disbursement credit audits of Rs 5 Crore & above have been conducted by IAD-Head Office.
25.10 During the financial year 2019-20, seepage of income to the tune of Rs 35.06 Crore has been detected.
25.11 The Division has initiated a scheme of recognizing good work of branches in getting the reports lodged well before the stipulated internal time norms. In this regard 158 Branches received Certificates of Commendation signed by Executive Director & 793 Branches received Certificates signed by General Manager-IAD, have been awarded to the Branch Heads. This measure has reduced the number of overdue inspection reports and has resulted in timely rectification of irregularities, which helps to safeguard the interest of the Bank.
25.12 Various Agenda, as per calendar of reviews, viz., Audit Plan vs. Performance, Major observations of Concurrent Audit Reports, Major inspection and audit findings of ELBs, Seepage of income, Special Reports, Migration Audit, inter-alia, are being placed before the Audit Committee of the Executives & Audit Committee of Board for information & for compliance of directions.
25.13 The inspectors / field officials are being educated through internal circulars to undertake effective auditing of branches. During the financial year 2019-20, the auditors have also undergone a training at STC, Mangalore, besides a few of them being nominated to external training programmes at reputed institutions.
26. Credit Monitoring
26.1 The Bank has created a separate division for monitoring the portfolio of Standard Assets under the independent charge of General Manager. This division has two verticals, one for monitoring large exposures of above Rupees one Crore and another for monitoring exposure below Rupees one Crore. Further, verticals for monitoring of stressed accounts and follow up of NPA accounts headed by an Executive in the rank of Assistant General Manager/Deputy General Manager set up at all the six Circle Offices. This division is guide to the branches and Zonal Offices by way of various inputs for ensuring close follow up of stressed loan accounts under standard category to avoid fresh slippages. A system driven advance warning software tool for early identification of probable NPAs with reasons for slippages is put in place, which is quite ideal utility for effective monitoring of standard assets/containing fresh slippages. The division also maintains close liaison with Credit Division as well as Zonal Offices/Circle Offices for ensuring that necessary corrective actions for resolution of stress observed in loan accounts and up-gradation thereof is initiated.
27. Legal Services
27.1 Legal Services Division of the Bank plays a significant role in the various commercial activities undertaken by the Bank. It has been performing diversified activities such as Scrutiny and approval of legal opinions regarding immovable properties taken as security, Drafting/approval of Bank Guarantees and Counter Guarantees, Advising on invocation of Bank Guarantees and other connected matters, Preparation of case specific documents, Drafting/approval of Plaint/ pleadings and other applications to be filed before various courts, Tribunals / Authorities etc; Advising on the matter relating to various High Court of different States and also on matters relating to Supreme Court, Approval of MOUs/Agreements referred by various Divisions in the Head Office; Advising Branches as to the initiation of necessary steps to recover the dues of the Bank, Advising on SARFAESI matters & advising on Suit filed Accounts, Advising on Legal Audit of loan documents and Periodical Legal Audit of title deeds, Examination & Advising on matters relating to Right to Information Act and disposal of Appeals received from Citizens under the Right to Information Act, Advising on the matters relating to Consumer Forums and various other statutory authorities. Matters pertaining to orders of attachments from Income tax, Sales tax or other authorities are effectively handled. The Division has devised a simplified procedure for settlement of claims relating to deceased depositors. Division also advises Organisation and Methods Division on various documentation aspects and revision/ Updating of Manuals. The Law Officers are regularly and continuously handling various legal matters and offering legal guidance/clarifications to branches/ Zonal Offices/ and Administrative Offices in a time bound manner and take steps to safeguard the interest of the Bank in all its spheres of activities. Division is also handling Empanelment/deletion/ Review of performance of Advocates.
27.2 Lok Adalat
Legal Services Division is co-ordinating Lok Adalats in different parts of the Country. During the period 01.04.2019 to 31.03.2020, the division was able to conduct 4 National Lok Adalat and 3 Bank Specific Lok Adalats in different Zones, the particulars of which are furnished as under:
| Details Lok Adalath | No.of accounts referred | Amount involved (in crore) | No.of accounts settled | Settled amount (in crore) | Cash Recovery (in crore) |
| July 2019 | 6526 | 134.75 | 527 | 8.34 | 1.94 |
| August 2019 | 1605 | 15.50 | 108 | 1.34 | 0.29 |
| September 2019 | 8124 | 177.24 | 642 | 9.42 | 1.47 |
| October 2019 | 486 | 7.28 | 172 | 1.17 | 0.08 |
| November 2019 | 468 | 6.50 | 70 | 0.48 | 0.06 |
| December 2019 | 8795 | 158.51 | 940 | 10.04 | 2.35 |
| February 2020 | 6372 | 127.36 | 576 | 12.56 | 2.35 |
| TOTAL | 32376 | 627.14 | 3035 | 43.35 | 8.54 |
27.3 Pre-Disbursement Legal Audit
As per HO Circular No.23/2015 dated 07.01.2015 the cut off limit for conducting Pre-disbursement legal audit is revised upwards to Rs 50.00 lakh. All borrowal accounts, both fund based and non-fund based, of the limit of Rs 50.00 lakh and above shall be subjected to Pre-disbursement Legal Audit. Pre-disbursement Legal Audit shall be conducted by the empanelled advocates of the Bank. In specific cases, where required, Legal Audit shall be conducted by the Law Officers of the Bank. Branches should ensure that irregularities, if any, pointed out in the Periodical Legal Audit Report are rectified before disbursement of loan.
27.4 PERIODICAL LEGAL AUDIT
As per HO Circular No.792/2014 Periodical Legal Audit, i.e. verification of title deeds, with the office of Sub Registrar of Assurance pertaining to immovable properties taken as security for the loans, with limits of Rs 5.00 crore and above is required to be conducted once in every 2 years. As per H.O.Circular 652/2019 dated 31.10.2019, the limit for conducting Periodical Legal Audit is reduced to Rs 3.00 crore and above.
28. The Right to Information Act, 2005
Bank in compliance of Right to Information Act, 2005 has designated Assistant Public Information Officer (APIO), Public Information Officer (PIO) and Appellate Authorities (AA) at Head Office and Public Information Officer and Appellate Authority at each Zonal Office and Circle Office. Name of APIO, PIO and AA are displayed in the Banks Website with other relevant information as required under RTI Act by Customer Services Division, Head Office. Bank is complying with the provisions of the said Act at all levels and disposing of all the application and appeals within the stipulated time.
29. e-NEWSLETTER
Legal Services Division is communicating Flashes on various legal issues through “LSD FLASH”.
30. CORP NEETI
Legal Services Division has developed a Web Portal named “CORP NEETI” with the mission of making it a single point reference to all legal issues affecting the bank and its business. “CORP NEETI” contains the circulars issued by the Division, list of empanelled advocates, various e-newsletters, important Acts/Rules, etc.
31. Security
1. Bank has taken necessary steps in ensuring all Branches and ATMs are 100% compliant on security fixtures. Regular monitoring of health of the CCTV-DVinstalled in Branches/ATMs is done through Facility Management Service established at FTS, Bangalore to reduce the down time. By roster, the DVare checked for proper recording etc., and corrective action is taken by service engineers.
32. Compliance
32.1 The Bank has a Compliance Division headed by an Executive of the Rank of Deputy General Manager who represents as the Chief Compliance Officer (CCO) of the Bank, as per the directions of the Reserve Bank of India.
32.2 The Compliance Division ensures that the relevant guidelines and instructions from RBI/ IBA/ NABARD/ SEBI/ IRDA/ CVC/ BCSBI etc. are complied in spirit and substance so as to assist the Top Management in managing effectively the compliance risks faced by the Bank. The Division also acts as a single entry/exit point for all regulatory submissions.
32.3 The Compliance Division also ensures dissemination of instructions to the operational departments, assisting them in designing of suitable internal
instructions and controls, maintaining liaison with internal and external auditors, etc. The Bank is covered under Risk Based Supervision since 201516 under Supervisory Programme for Assessment of Risk and Capital (SPARC). The Compliance Division monitors and ensure compliance by performing sufficient and representative compliance testing.
32.4 Risk Based Supervision:
32.4.1 The Risk Based Supervision (RBS) Cell, headed by an Assistant General Manager, is coordinating the conduct of the annual Inspection for Supervisory Evaluation (ISE) by the RBI. Facilitating smooth conduct of ISE by RBI, ensuring subsequent compliance to the observations of ISE Reports and attending to the periodical queries/issues concerning the Bank as referred by RBI are the primary duties of RBS Cell.
32.4.2 RBS Cell also does co-ordination with the RBI and the functional divisions of the Bank for quarterly monitoring meetings and for submission of monthly data updates to RBI.
32.4.3 During the year, the RBS Cell was delinked from Inspection & Audit Division and brought into the fold of Compliance Division for better synergy of functioning.
33. Vigilance Machinery
Vigilance is a vital management tool to increase efficiency and effectiveness of the organisation by preventing untoward incidents/financial loss/frauds/ leakages which affect the productivity and profitability. The roles and responsibilities each functional division of our Bank is well defined and documented for better clarity and effectiveness through the sets of robust standard operating procedures (SOPs). The vigilance functions in the Bank are primarily in the nature of prevention and detection, rather than taking punitive action. The vigilance machinery plays the role of a watchdog so as to ensure that the laid down systems and procedures are not tampered with for any personal gain or benefit.
The vigilance system of Bank emphasizes on taking bonafide decisions as per the norms of the Bank in transparent manner by maintaining absolute integrity. We have viewed bonafide decisions in the right perspective and ensured that natural justice is given to all the rank and file who acted in good faith, with honest intention regardless of the outcome of the action/decision. We have tried to imbibe in our work culture honesty, integrity, transparency and probity so that the trust and faith reposed in us by our customers is honoured.
The Bank has implemented following preventive vigilance initiatives in the Bank :
The Bank has evolved a Preventive Vigilance Mechanism wherein branches have been directed to convene Preventive Vigilance Meetings of staff members every quarter to discuss the preventive vigilance measures taken by the Bank and to all staff members are required to discuss, share information, their work experience so that alertness and awareness is generated throughout the Bank. Periodical Preventive Vigilence visits by Vigilence Officers, Executives from Zonal Office to the branches have been made mandatory.
• The Bank has framed its own “Whistle Blower Policy”, the objective of which is to identify any untoward events with the help of the employees and to take timely corrective measures so as to prevent / protect the Bank at the initial stage itself. This mechanism also provides adequate safeguards against victimization of employees who avail of this mechanism.
• A quarterly newsletter on preventive vigilance called Rs Jaagrithi is being published and circulated amongst all branches/offices of the Bank. The newsletter contains information on vigilance cases comprising fraud and the modus operandi adopted by the fraudsters, which creates awareness among the operational staff members.
• Preventive Vigilance Audit covering high risk prone areas is being conducted at branches by Zonal Office wherein each branch is subjected to audit twice in a year and a report is submitted to Vigilance Division.
• In accordance with the CVC guidelines, the Bank is celebrating “Vigilance Awareness Week” every year during October-November, by conducting various Competitions like Essay Competition, Case Study Competition and Quiz Competition for the staff members of the Bank. As an outreach activity, various Competitions for the College students are also conducted. “Integrity Pledge” is taken by the staff members and “Gram Sabhas” at Villages are organized to create awareness among the public to eradicate corruption and corrupt practices.
• Vigilance consultation mechanism is enhanced by arranging an interactive session, once in a quarter chaired by MD & CEO along with Chief Vigilance Officer and GM -HRM (PAD) for initiating quicker enquiry proceedings/reducing the waiting (action) period to improve the industrial relation climate. This forum acts as a preventive session identifying incipient problems and facilitating prompt intervention/early corrective action.
• E-Learning Portal : In order to encourage and focus on continuous learning by all the employees, Vigilance and Disciplinary related courses are uploaded in the Banks e-learning portal for effective dissemination of systems and procedures and its implications in the functioning of the field staff.
34. IND AS IMPLEMENTATION
Banks in India currently prepare their financial statements as per the guidelines issued by RBI and generally accepted accounting principles in India (Indian GAAP). In January 2016, the Ministry of Corporate Affairs issued the roadmap for implementation of new Indian Accounting Standards (Ind AS), converged with International Financial Reporting Standards (IFRS), for scheduled commercial banks, insurance companies and nonbanking financial companies (NBFCs). Reserve Bank of India (RBI) has advised vide their circular letter dtd. 11.02.2016 that Banks shall comply with the Indian Accounting Standards (Ind AS) for financial statements for accounting periods beginning from April 1,2018 onwards.
Earlier as per RBI direction implementation of Indian Accounting Standards (Ind AS) was deferred by one year pending necessary legislative amendments to the Banking Regulation Act,1949 as also the level of preparedness of many banks.
Now, RBI vide its circular RBI/2018-19/146/DBR. BPBC.No.29/21.07.001/2018-19 dated March 22, 2019 has conveyed that the legislative amendments recommended by the Reserve of Bank of India are under consideration of the Government of India. Accordingly, it has been decided to defer the implementation of Ind AS till further notice.
As per RBI directions, Bank has formed Steering Committee for Ind AS implementation. The Steering Committee comprises Executive Director (Head of the Steering Committee) as directed by RBI on 31.10.2017 and General Managers from Financial Management Division, Credit Division, Integrated Risk Management Division, Information Technology Division, Recovery Division, Inspection & Audit Division & Treasury & Investment Division. The Committee oversees the progress of Ind AS implementation in the Bank, and provides guidance on critical aspects of the implementation such as Ind AS technical requirements, systems and processes, business impact, people and project management. The Committee closely reviews progress of the implementation.
As per RBI direction, bank has submitted Proforma Ind-AS quarterly from June 2018 onwards up-to March 2020.
Bank will continue to liaise with RBI and IBA on various aspects pertaining to Ind AS implementation.
35. Opportunities
The Bank has pan-India presence with functional units comprising of 2432 Branches and 2623 ATMs spread across the length and breadth of the country with 34 zonal offices and 4 circle offices to oversee its operations.
The increased presence of the Banks branches in rural and semi-urban areas provides a great opportunity for the Bank for improving its exposure to Agriculture and Priority sector, SME and Retail segment, to register a balanced growth in retail portfolio in tandem with the wholesale business.
A high calibre workforce, better spread of network, unique set of products and services, competitive customer service and an advanced tech savvy environment helped the Bank to get a prime slot in the minds of the people.
Digitalisation of several processes has been the focus area of the Bank in order to give a better customer experience. The Bank has wide range of digital services including, Internet Banking, New Mobile Banking application Corp EASE , SMS Banking, e-Pass book, Tablet banking, etc.
The Bank has rolled out latest, most modern version of Core Banking Solution with Finacle Software. This will help the Bank to meet the ever increasing needs of the customers, expand its business, introduce techno-savvy products & services and secure business of new customers.
36. Threats
The economic situation across the globe is becoming volatile. Volatility is the new normal and the banks need to build up capabilities to adapt to these changing macro-economic environments and to find opportunities in uncertain operating environment.
Managing asset quality & resolution of stressed assets is not only critical but also has become the prime focus area for the banking sector to improve and achieve healthy performance levels.
Keeping in view of the future growth requirements, implementation of capital norms, higher provisioning etc., raising of additional capital would be a challenge.
Retirement of experienced hands at the middle and senior management level in the near future needs to be substituted which is critical for translating the top managements strategy into workable action plans.
Banks, like any other industry are exposed to credit, Market and Operational Risks in the day to day operation, thinning of Interest spread affects the profitability structure of the Bank.
Any changes in the regulatory guidelines, policies, provisions by the Government/Regulator etc., may impact the performance of the Bank. Effectiveness of Recovery Management, Asset Liability Management and Risk Management may have its own impact on performance.
Acute competition & entry of new players is likely to affect business growth, margins and profitability.
37. Road map for the future
Government of India has notified the Amalgamation of Andhra Bank and Corporation Bank into Union Bank of India Scheme, 2020 vide gazztte notification dated March 4, 2020. Accordingly, Corporation Bank and Andhra Bank get amalagamated into Union Bank of India with the effect from 1st April, 2020.
For and on behalf of the Board of Directors
(Rajkiran Rai G)
Managing Director & Chief Executive Officer
Place: Mumbai
Date : 31.07.2020
2024, IIFL Securities Ltd. All Rights Reserved
Follow us on
ATTENTION INVESTORS
- Prevent Unauthorized Transactions in your demat / trading account Update your Mobile Number/ email Id with your stock broker / Depository Participant. Receive information of your transactions directly from Exchanges on your mobile / email at the end of day and alerts on your registered mobile for all debits and other important transactions in your demat account directly from NSDL/ CDSL on the same day." - Issued in the interest of investors.
- KYC is one time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary.
- No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorise your bank to make payment in case of allotment. No worries for refund as the money remains in investor's account."
www.indiainfoline.com is part of the IIFL Group, a leading financial services player and a diversified NBFC. The site provides comprehensive and real time information on Indian corporates, sectors, financial markets and economy. On the site we feature industry and political leaders, entrepreneurs, and trend setters. The research, personal finance and market tutorial sections are widely followed by students, academia, corporates and investors among others.
Risk Disclosure on Derivatives
- 9 out of 10 individual traders in equity Futures and Options Segment, incurred net losses.
- On an average, loss makers registered net trading loss close to Rs. 50,000.
- Over and above the net trading losses incurred, loss makers expended an additional 28% of net trading losses as transaction costs.
- Those making net trading profits, incurred between 15% to 50% of such profits as transaction cost.
Copyright © IIFL Securities Ltd. All rights Reserved.
Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213, IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248
We are ISO 27001:2013 Certified.
This certificate demonstrates that IIFL as an organization has defined and put in place best-practice information security processes.
IIFL Securities Support Whatsapp Number
+91-9892691696
+91-9892691696Download The App Now
MARKET
MUTUAL FUNDS
TRADING DOCUMENTATION
CALCULATOR
2024, IIFL Securities Ltd. All Rights Reserved
Follow us on
ATTENTION INVESTORS
- Prevent Unauthorized Transactions in your demat / trading account Update your Mobile Number/ email Id with your stock broker / Depository Participant. Receive information of your transactions directly from Exchanges on your mobile / email at the end of day and alerts on your registered mobile for all debits and other important transactions in your demat account directly from NSDL/ CDSL on the same day." - Issued in the interest of investors.
- KYC is one time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary.
- No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorise your bank to make payment in case of allotment. No worries for refund as the money remains in investor's account."
www.indiainfoline.com is part of the IIFL Group, a leading financial services player and a diversified NBFC. The site provides comprehensive and real time information on Indian corporates, sectors, financial markets and economy. On the site we feature industry and political leaders, entrepreneurs, and trend setters. The research, personal finance and market tutorial sections are widely followed by students, academia, corporates and investors among others.
Risk Disclosure on Derivatives
- 9 out of 10 individual traders in equity Futures and Options Segment, incurred net losses.
- On an average, loss makers registered net trading loss close to Rs. 50,000.
- Over and above the net trading losses incurred, loss makers expended an additional 28% of net trading losses as transaction costs.
- Those making net trading profits, incurred between 15% to 50% of such profits as transaction cost.
Copyright © IIFL Securities Ltd. All rights Reserved.
Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213, IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248
We are ISO 27001:2013 Certified.
This certificate demonstrates that IIFL as an organization has defined and put in place best-practice information security processes.