punjab maharashtra co op bank ltd Management discussions

PUNJAB AND MAHARASHTRA CO-OPERATIVE BANK LIMITED ANNUAL REPORT 2009-2010 MANAGEMENT DISCUSSION AND ANALYSIS ECONOMIC OUTLOOK: There have been very few financial years in Indias history in which the outlook at the start and the end has been as different as during the year 2009-2010. The economic slowdown that had engulfed the whole world seemed to have mired India as well. But at the end of the year, the Indian economy has recovered faster than other economies perhaps due to its strong fundamentals. The Reserve Bank of India is continuously monitoring the conditions to keep its check over the rising inflation and ensuring balanced growth by taking necessary monetary policy measures. Expectation of a good monsoon, is expected to contribute significantly towards moderating the high rate of inflation, at present turning out to be a cause of serious concern. FINANCIAL AND BANKING SECTOR: As already mentioned the Reserve Bank of India have been carefully watching the equation and have taken necessary measures to achieve the twin objectives of moderating inflation without adverse effect on the revival of growth attributed to the stimulus package announced earlier. It is perhaps in tune with this policy that an increase in the rates of CRR, Repo and Reverse Repo has been changed on three occasions in a calibrated manner. Despite a relatively bright long term outlook, it is clear that the economic slowdown witnessed after the global meltdown has decelerated to an extent the growth of the banking sector. But the real challenge before banks in the emerging scenario consists of mobilizing resources by increased rate of growth of deposits to meet the ever growing demand for credit at rates calculated to douse the flames of inflation. A real challenge calling for enhancement of productivity through efficiency. CUSTOMER SERVICE - OUR PRIORITY: Taking the Bank to heights of excellence requires concerted and co- ordinated effort on several fronts, but ultimately the credibility of the Bank lies in public confidence. The goal of the Bank in this regard has always been to promote safety and soundness, while trying to compete and innovate. Our strength lies in our firm belief of transparency, integrity and personalized service. All our products have been evolved for facilitating a customer to get what he needs, when he needs and where he needs, at competitive price through speedy delivery. Such an approach can ensure that, we scale new heights and continue to remain in the league of the major co-operative Banks. In compliance with the guidelines of the Reserve Bank of India your Bank has tried to set up an efficient and responsive Customer Redressal Mechanism wherein the customer can write their Grievance/Suggestion in the Self addressed envelopes, complaint book available at all the Branches / departments and email the grievance to helpdesk@pmcbank.com or demat- relations@pmcbank.com (I.D. created in observance of SEBI guidelines), which will be replied / considered by the Grievances Redressal Cell consisting of the Senior Officials of the Bank. TOLL FREE NUMBER: Encouraged by the high level of customer satisfaction already achieved, we further focus of) the product innovation for the betterment of service quality, your Bank has launched a Toll Free Number, 1800-223-993 wherein any customer can get the enquiry of the products and services offered by the Bank. Open your arms to change, but dont let go of your values. MEMBERSHIP OF BANKING CODES AND STANDARDS BOARD OF INDIA (BCSBI): Your Bank has become the member of the Banking Codes And Standards Board Of India (BCSBI) which was established in February2006 by the Reserve Bank of India as an independent and autonomous watchdog which sets minimum standards of banking practice for banks to follow while dealing with individual customer, with a view to improve the quality of Customer Service. Your Bank adheres to voluntary codes of Banks Commitment to customer formed by BCSBI. COMMUNITY SERVICE - OUR RESPONSIBILITY: Social Responsibility has always been an integral part of your Bank of which an essential component is to care for the community at large. In the process of disbursing the funds provided for Charity comprising of 1% of the net profit since last year, one of the schemes adopted by your Bank is to contribute Re. 1/- for every ATM transaction at the Banks ATM centers to CRY and SAVE THE CHILDREN (India). Further, your Bank has also donated a sum of Rs.1 0.00 lacs to HELPAGE a leading NGO, working for the benefit of Sr. Citizens towards the capital cost for a medical van, which will provide free of cost Primary Health Care Services at the door steps of the needy and destitute older persons in Mumbai. During each visit, treatment will be offered to 60 to 70 elders every day. In all the van will be servicing 23 slum sites in areas at Malwani, Jogeshwari, Bandra (East and West), Santacruz (E), Andheri (W), Thane (E), Mulund (W), Mumbra (E) etc., The Bank has also donated Rs.1.00 lac; each to Vatsalya trust and NASEOH (for purchase of 20tricycles for physically handicapped). Many of the community projects and programmes are aided by active participation of the Bank. Your Banks commitment to address society needs extends through its philanthropic outreach programs. M.R. PAI MEMORIAL AWARD: It has been indeed a red letter day in the history of the Bank, when we had the privilege of being the sponsors of an Award function, wherein one of the most successful Central Bankers in the world Dr. Y.V. Reddy, was presented with Mr. M.R. Pai memorial award organized by All India Bank Depositors Association on 6th May 2010. Your Bank has instituted this award since the year 2005, which is presented to an outstanding consumer activist or journalist; in the memory of Late Mr. M.R. Pai, the great consumer activist and champion of free enterprises. Dr. Y.V. Reddy, was selected for this honour for his exemplary role in implementing systemic changes for protecting and furthering the interests of depositors during his tenure in office as Governer of the Reserve Bank of India. A copy of the speech delivered by our Chairman is reproduced elsewhere is this report. ADVANCES: Your Banks Advances increased from Rs. 1252.79 crore as on 31.03.2009 to Rs.1897.84 crore as on 31.03.2010 registering an increase of 51.49% over the previous financial year The objective of your Banks Centralized Credit Cell (CCC) has been to improve operational efficiency, quality of appraisal and better credit delivery. In order to achieve this objective the Centralised Credit Cell has automated the loan application processing, enabling tracking of the status of proposal at any given time, resulting in speedy processing and minimum turnaround time. It also ensures that credit facilities are closely monitored and followed-up on an ongoing basis in co-ordination with the branches and other departments. RECOVERY: Relentless efforts made to restrict NPAs at the minimum possible level through stringent recovery efforts and astute use of legal avenues available has resulted in enabling your Bank to restrict it Gross NPAs at Rs. 48.02 crore as on 31.03.2010. The percentage of Gross NPAS to Gross Advances stands reduced to 2.53% as against 3.94% in the previous year. Your Bank has successfully maintained its Net NPAs at 0.40%. This is despite the fact that your Bank has acquired the NPAs of two merged Banks in the process of merger and acquisition. Your Bank will continue to relentlessly address both the facets of NPA Management viz. recovery out of existing NPAs as well as arresting the emergence of fresh ones. In light of these developments, your Bank is committed to stepping up its recovery efforts further. INVESTMENT PORTFOLIO: The Bank has an investment of Rs. 714.18 crore as on 31.03.2010 out of which an amount of Rs. 584.69 crore has been invested in Government and other approved securities. The Banks total investment in Government and other approved securities as on 31.03.2010 is 29.52% of the Net Demand and Time Liability (NDTQ of the Bank, which is well above the limit stiWated by the Reserve Bank of India. Your Banks Investment policy is reviewed at regular intervals and fine- tuned in accordance with the directives issued by the Reserve Bank of India. The Banks Investment Department is responsible for compliance with the requirements of the Reserve Bank of India viz. CRI4 and SLR as also for profitable deployment of surplus funds of the Bank. Your Bank effectively uses the available technology by deploying NDS, CBLO software for this purpose. Life Insurance: Your Bank has been marketing the life insurance products as an corporate agency of MaxNewyork Insurance Co. Ltd., for the last two years. Non-life Insurance: Your Bank is also a referral agency for marketing products such as Fire Insurance, Motor Insurance, Marine Insurance, etc., to our customers. In the year under reference also your Bank has mobilized policies to the credit portfolio customers. Mutual Fund: Your Bank continues to contribute in serving the customers with its tie-up with UTI Asset Management Company Pvt. Ltd., Bajaj Capital since last five years, by way of marketing the various types of issues launched by the companies. Demat: Your Bank provides Demat services through NSDL, to our customers to have the Dernat accounts. NEW PRODUCTS: In tune with our past record of having many firsts to our credit, we are pleased to inform you that we have yet again introduced a couple of unique and trend setting products by the names of KISHOR BACHAT YOJNA & JAN BACHAT YOJNA, for the children and people with small means, of the society. KISHOR BACHATYOJANA: To inculcate the habit of savings among the Children a saving account has been introduced for the children in the age group of 12 to 18 years, offering all the facilities such as personalized cheque book, ATM card, unlimited withdrawals, operated only by the minor. As a precautionary measure. Every withdrawal from the account by the minor will be intimated to the registered guardian by an SMS immediately. JAN BACHATYOJANA: To facilitate persons of small means who do not have any opportunity to open a bank account and may not provide all the necessary documents to facilitate opening of an account. Laborers, housemaids, security guards, illiterate persons, migrants, etc, who normally reside in the area of operation of the Branch but may not have address proof or identity proof. TECHNOLOGY: Your Bank has ventured into building-up of a strong technological platform that aspires to meet all the current and anticipated banking needs of the customers. Recently, the Bank has started the Internet Banking and SMS Banking Facility, for all the customers. Steps have been initiated, to join the NFS Network by which our customers will be able to access more than 60,000 additional ATMs, across the country in the coming year. Further, the Bank has also made arrangements to launch DEBIT CARD, which will accord customers the convenience of transacting at around 5,50,000 merchandise outlet/retailers across India on VISA network. Your Bank is in the process of building a state of the art Data Center at its new office premises at Dreams Mall. The Bank is also looking towards replacing the existing CBS Application with another CBS system, which is modern & futuristic in all the ways. Today, the information Technology Department of your Bank is fully equipped to cater the needs of all its customers in line with leading Co-operative Banks. MERGER AND ACQUISITION: After successfully taking over Kolhapur Janta Sahakari Bank Ltd., Kolhapur with 11 branches, we continue with our merger programmes during the year under report. Your Bank have taken over two Co-operative Banks viz, Jai Shivrai Nagari Sahakari Bank Ltd., Nanded with 2 branches on 13.09.2009 and Chetana Sahakara Bank Niyamita, Sirsi in Karnataka State having 12 branches on 13.07.2010. This acquisition-driven expansion strategy, we believe, will pay-off in increased business potential that this state holds and also help the Bank in realization of its goal of expansion vertically as well as horizontally. The entry of your Bank brought a ray of hope to the depositors and customers. Your Bank will continue to explore similar opportunities in ensuing years as part of its inorganic growth strategy to ultimately fulfill its goal of having a Pan - India presence. BRANCH EXPANSION: In the year 2009-10, your Bank have opened nine branches at Premier Road - Kurla (W), Khadakpada-Kalyan(W), Manvelpada-Virar, Kolshet Road-Thane (W), Central Park - Nallasopara, Rahatani-Pune, Dangechowk-Pune, Jalna Road - Aurangabad, Canada Comer - Nashik. The Bank had submitted an Annual Business Plan for the year 2009-10, to the Reserve Bank of India and has received permission to open branches at Ambernath, Badlapur and Palghar. With a view to expand the horizon, the Bank has also proposed to open branches at Tilak Nagar Delhi and Nashik by utilizing the licences of merged bank, after which your Bank will be crossing the network of 54 branches & extension counters in the State of Maharashtra, Karnataka and Delhi by the second half. EVENTS: An Annual Get-together of the Board of Directors and Staff was organised on 21.02.2010. On the occasion the Staff Members who had completed 15 years of service were felicitated. The 26th Foundation Day was celebrated on 13.02.2010. Path Sri Sukhmani Sahebji and Sri Satyanarayana Maha Pooja was performed at the newly acquired Central office at DREAMS MALL, Bhanduo to invoke the blessings of the Almighty. ADVERTISING: In present times who you are is not important, unless the world knows. In order make its mark in the world full of publicity. With the constant endeavor of the Marketing Department, your Bank has launched a Television Commercial at prime slots on popular Hindi and Marathi channels. Your Bank has also taken a leap in the field of image building, brand engineering and development by appointing Ms. Rajeshwari Badola Sachdev, an eminent stage, television and film personality as its Brand Ambassador. Ms. Rajeswari Badola Sachdev and her father are among the early patron customers of the Bank. AWARDS: You will be pleased to know that, The Maharashtra State Co-operative Banks Association, Mumbai has awarded your Bank with the K. PADMABHUSHAN VASANTDADA PATIL BEST URBAN CO-OPERATIVE BANKS AWARD for the year 2008- 2009. INTERNATIONAL BANKING: At present the Bank is a Authorised Dealer under Category-II, for delivering the services of foreign exchange to its customers. We are pleased to inform that with the net worth crossing Rs. 200.00 crore your Bank is fulfilling the eligibility criteria as defined by the Reserve Bank of India to obtain a Authorised Dealer Category - I licence. An application is already submitted to the Reserve Bank of India and a favourable response is awaited. Your Bank renders services for import trade transactions, import of goods and technology/services through issuance of Foreign Lefters of Credit, Foreign Bank Guarantees, Advance outward remittances, receipt of documents on collection basis, etc. While your Bank assists the Exporters to receive payments against their exports in most of the countries of the world without any hassles, it also assists them to avail Pre-Shipment and Post- Shipment finance to conduct their business smoothly and boost exports for the country, through our corresponding Bank i.e. Saraswat Co-operative Bank. After getting the Authorised Dealer Category-I licence, your Bank will be able to provide these services directly to the customers. HUMAN RESOURCES: The Bank has a Management team with rich experience and sound professional qualifications. Human Resource management and development practices are major factors in productivity, progress and profits for any institution. With 676 employees, your Banks Human Resource Development programmes respond to the opportunities created by the organizations growth, technological advancements and the productivity challenge faced by it. In order to cater to the growing need for Senior Staff consisting of Assistant General Managers and Managers, a promotional exercise was conducted. Total seven staff were promoted to the post of Asst. General Managers and twenty four employees were promoted to the p6st of Managers. All promoted personnel have been suitably deployed at various branches (including the branches of the merged banks) and/or departments. The Board is pleased to record that ever since the inception, there have been cordial and peaceful relations between the Management and Union. MEMBERS WELFARE FUND: As a token of our commitment for welfare of our members, your Board has recommended an amount of Rs.16.50 lacs towards this fund. In the first year of its launch five members availed the medical reimbursement and six awards were given to meritorious children of the members. Details of the facilities provided and the eligibility criteria for taking the benefit of this fund is notified separately in this report.