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BSE: 532525 | NSE: MAHABANK | ISIN: INE457A01014
Market Cap: [Rs.Cr.] 4,178.31 | Face Value: [Rs.] 10
Industry: Banks - Public Sector
Your Directors have great pleasure in presenting before you the Annual Report of theBank along with the audited Balance Sheet, Profit & Loss Account and the Report onBusiness and Operations for the year ended March 31, 2014.
1. MANAGEMENT DISCUSSION AND ANALYSIS:
1.1 Economic scenario 2013-14
Domestic economic developments in the current financial year (FY14) were mostly drivenby inflationary pressures, subdued demand and investment position.
Real GDP growth for the first three quarters of FY14 was 4.6 per cent, which wasmarginally better than 4.5 per cent recorded in same period of FY13. The full year growthis likely to be about 4.7 per cent. Developments in the past two quarters indicate thatslowdown in economic growth has already bottomed out and recovery (although slow) hasstarted.
During the year, growth in industrial production has moved like a snake in a narrowtunnel around the point of stagnation, while in 5 out of the first 10 months there werenegative growths. Among the major industry categories, the worst hit has been ConsumerDurables and Motor Vehicles.
Significant moderation in inflationary pressures and prospects of higher domesticdemands on account of General Elections may spur industrial growth, which has shownnegative growth in current FY so far.
On account of decline in imports and sustained growth in exports (except for the monthof February) trade deficit has been shrinking for the eighth consecutive month. CurrentAccount Deficit (CAD) in the first three quarters of this year has come down to USD 31billion from USD 88 billion in FY 2012-13. The stringent steps taken to curb gold anddeclining non-POL non-gold international commodity prices have helped in shrinking CAD.
In the current financial year, inflation remained the prime focus, especially formonetary policy measures of the RBI.
Dr. Urjit Patel Committee has highlighted the need for CPI inflation to be the nominalanchor for monetary policy considerations and has recommended CPI inflation target of 8per cent by January 2015, 6 per cent by January 2016 and set a long term target of 4 percent with a band of +/-2 per cent.
Both retail (CPI) and wholesale (WPI) inflation, which were in double digits for mostpart of the year, have declined drastically in the last quarter to 8.63 per cent and 4.68per cent in February 2014.
Performance of Indian Banking Industry in 2013-14
During the current financial year, the Banking sector has been witnessing downwardpressure on margins on account of higher cost of deposits, deceleration in credit growthas well as rising NPAs/restructured assets.
Y-o-Y growth in Aggregate Deposits of Scheduled Commercial Banks (SCBs) lagged behindgrowth in bank credit. Due to high domestic inflation and lower economic growth, householdfinancial savings rate has come down which is reflected in the slower deposit growth. Thegap between growth in bank deposits and credit reversed since Sept 2013, thanks to thespecial swap window made available by RBI for FCNR(B) deposits.
As on last reporting Friday of FY14 (31st March 2014), even though aggregate depositsof SCBs witnessed a y-o-y growth of 14.65 per cent to Rs. 77,394 billion, the growth rateadjusted for growth in FCNR(B) deposits has been the RBI targeted rate of 14 per cent.Aggregate Deposit of BoM increased by 25.54 per cent (Y-o-Y) during the same period.
As on 31st March 2014, Bank Credit of SCBs has grown by 14.31 per cent (y-o-y) to Rs.60,131 billion as against 15.37 per cent in the same period of the previous year. Creditof BoM increased by 17.89 per cent (y-o-y) as of 21.03.2014.
C-D Ratio of SCBs stood at 77.69 percent (as on 31st March 2014).
Indian Economy is expected to show better growth in the coming year. IMF has projectedit to grow by 5.4 per cent and 6.4 per cent respectively in calendar years 2014 and 2015as compared to 4.4 per cent the year 2013.
The RBI also has projected economic growth in 2014-15 in the range of 5-6 per cent. Italso projects CPI inflation to be in the range of 7.5-8.5 percent in Q4 of 2014-15.
As per the trend prevailing in the system and reported by various rating agencies,asset quality of Banks will remain under pressure in the next year as economic recovery islikely to be subdued, and it will take time for domestic industrial activity to recover.The weak asset quality is likely to put pressure on Banks' profitability andcapitalization in FY 2014-15.
2. PERFORMANCE OF YOUR BANK 2013-14
Total business of your Bank stood at Rs. 2,07,172 crore as on 31.03.2014, as comparedto Rs. 1,70,734 crore a year ago, registering a year-on-year growth of 21.34 per cent.
Total deposits of the Bank stood at Rs. 1,16,803 crore, up by 23.8 per cent over thelevel of Rs. 94,337 crore as at the end of March 2014.
Current & Savings Bank (CASA) deposits increased to Rs. 41,921 crore as on31.03.2014. Share of CASA deposits in total deposits of your Bank stood at 35.89 per centas on 31.03.2014 which is one of the highest among Public Sector Banks.
2.3 Credit Deployment
The Bank has put in place a lending policy in conformity with the guidelines issued byRBI and also the lending norms of the Government of India. It emphasizes on qualitativecredit growth and ensures compliance with regulatory requirements as well as theprudential exposure limits.
Gross advances of the Bank increased from Rs. 76,397 crore as on 31.3.2013 to Rs.90,369 crore as on 31.3.2014 with growth of 18.29 per cent. Efficient service withcustomer centric approach has enabled the bank in registering growth, in-line with thebanking industry during the year 2013-14.
Several steps have been taken for improving credit delivery mechanism along withimprovement in turnaround without compromising the overall quality of credit.
Mid Corporate shall continue to be one of the thrust areas for the bank in future forincreasing yield on advances and dispersion of credit risk.
Efforts are continued to improve portfolio yield by reshuffling the portfolio mix.
2.3.1 Sectoral Deployment of Credit
While financing to various segments of the economy, the Bank has endeavored to maintaina diversified credit portfolio, with a view to ensuring credit dispersion across sectors.The Bank has continued its efforts to support core, manufacturing and priority sectors aswell as infrastructure projects, which serve to drive economic growth. This focus of theBank will continue in future, in line with the national economic growth priorities.
Industry wise credit deployment as on 31.03.2014 is as under.
|Sr. No.||Credit deployed||Outstanding as on 31.03.2014 Rs. in crore||Percentage to total credit outstanding||Outstanding as on 31.03.2013 Rs. in crore||Percentage to total credit outstanding|
|i. Infrastructure|| |
|ii. Chemicals, Dyes, Paints, etc||1578.92||1.75%||1387.15||1.83%|
|iv. Iron & Steel||2689.22||2.98%||1640.21||2.16%|
|v. NBFCs & Trading||15111.27||16.72%||12671.06||16.72%|
|viii. Other Industries||10900.69||12.06%||9018.1||11.90%|
|7||Commercial Real estate||4793.96||5.30%||3551.63||4.69%|
2.3.2 Credit Administration and Monitoring
Early warning signals are captured from the CBS system on daily basis for closemonitoring of stressed accounts on near real time basis. System generated SMS alerts aresent to the customers to pre-empt delinquency. An integrated web-based reporting has beenintroduced in the Bank to enable instant communication between branches/Zones/Head Officefor effective monitoring of credit portfolio.
The credit quality of borrowal accounts is further monitored through periodical assetperformance review, credit audits & stock audits. Timely rescheduling of repaymentterms is undertaken in deserving cases.
2.4 Asset Performance
During the Financial Year (FY) 2013-14, total cash recovery in NPAs was Rs. 706.41crore (last year Rs. 411.22 crore). Of this, recovery in Ledger balance was Rs. 646.46crore (Rs. 198.73 crore), including recovery in sale of Assets Rs. 242.16 crore (NIL),recovery in written off accounts was Rs. 303.32 crore (Rs. 156.76 crore) and recovery incases of unapplied interest was Rs. 38.22 crore (Rs. 55.73 crore). This was besides upgradation of NPAs to the tune of Rs. 101.39 crore (Rs. 105.19 crore).
This year's achievement was possible due to intensive follow up adopted by the Brancheswith the defaulting borrowers through letters, notices, recovery camps, Lok Adalatas,actions under SARFAESI and through DRTs.
To address and improve recovery in small sized NPAs having ledger balances upto Rs.10.00 lakh, the bank established additional 5 Micro Asset Recovery Cells (MARC) at Zonaloffices thereby making total 39 MARCs. The recovery performance through this vertical wasencouraging with MARCs recovering Rs. 376.66 crore (Rs. 210.53 crore). The share ofrecovery of MARCs in total cash recovery of the bank was 54.05% (51.20%).
The bank continued during this FY a special 'One Time Settlement'(OTS) scheme and alsolaunched special OTS product (M-zero) for recovery in NPA accounts having ledger balanceup to Rs. 5.00 lakh. The total recovery in NPAs under this scheme was Rs. 50.15 crore asagainst Rs. 38.40 crore in the previous year.
The Gross NPA ratio of the bank stood at 3.16% during the financial year from 1.49% asof 31.03.2013. Similarly the ratio of Net NPAs stood at 2.03% as on 31.03.2014 as against0.52% a year ago. The NPA ratios of the Bank are much better than not only of the peerBanks but also of many large Banks.
2.5 Foreign Exchange Business and Export Finance
During the year 2013-14, the Bank has achieved merchant turnover of Rs. 28,370 Crores(Rs. 30,437 Crores) and an interbank turnover of Rs. 4,71,327.30 (Rs. 4,14,162 Crores) andearned Forex Profit of Rs. 74.60 Crores (Rs. 60.41 Crores). The outstanding export creditas on 31st Mar 2014 was Rs. 1948.97 as against Rs. 1908.31 as on 31st Mar 2013. TheTreasury & International Banking Branch at Mumbai (A category branch) and 33 BCategory branches across the country cater to the International business needs of thecustomers of the Bank. In order to provide prompt service to Non Resident Indian (NRI)clients, Bank has a NRI Cell at Deccan Gymkhana Branch, Pune which provides onlineremittance facilities for its NRI customers. With a view to enable branches to providebetter service to NRI clients, Bank has provided Instant NRI information which is updatedon monthly basis.
The net investments of the Bank stood at Rs. 37249.58 crore as on 31.03.2014 ascompared to Rs. 31430.31 crore as on 31.03.2013. Investments under Held to Maturity (HTM)category consist of 86.97 per cent while Available for Sale (AFS) comprised 12.74 per centof total investment portfolio as on 31.03.2014. The net interest income from investmentactivity increased to Rs. 2543.03 crore from Rs. 2231.28 crore during the last year, agrowth of 13.97 per cent.
The borrowings of the Bank as on 31.03.2014 stood at Rs. 8326.47 crore, includingrefinance availed from RBI, NABARD and SIDBI to the extent of Rs. 2861.08 crore. The totalborrowings as at 31.03.2013 were Rs. 12877.49 crore.
2.8 Merchant Banking
The Bank handled 84 issues of Commercial Paper amounting to Rs. 20160.85 crore for itsclients as an Issuing and Paying Agent (IPA) during the year and earned a commissionincome of Rs. 9.52 lakh.
2.9 Depository Services
The Bank is Depository Participant (DP) of Central Depository Services of India Ltd.(CDSL) since September 1999. Account level queries related to Demat account balances etc.are available at the 131 identified branches of the Bank. All the branches of the Bank canopen Demat account through the Demat Cell of Mumbai. The Bank also provides free"EASI" facility (through CDSL) to view account position through internet. Querycompliance facility is available at Maha Seva (Customer Care Center). The Bank has addedtie up with two Share Broking Companies i.e. Reliance Securities Ltd and VenturaSecurities Ltd for Maha-e-trade (Online Share Trading) Services for its customers alongwith existing Religare Securities Ltd.
In order to add new customers in its fold under Demat, Banks is offering waiver inannual maintenance charges for the Demat Accounts opened under Rajiv Gandhi Equity Schemefor three years.
The Annual Maintenance Charges and Dematerialization charges (for converting Bank'sphysical shares into electronic form) are waived for staff/Ex-staff and share holders ofthe Bank. The Bank has also introduced Basic Services Demat Account Facility (BSDA).
All the branches of the Bank are authorized to sell life and non-life insuranceproducts of Life Insurance Corporation of India and United India Insurance Co. Ltd. undercorporate agency arrangements, respectively. The Bank has sold 98929 Non-life InsurancePolicies and 30554 Life Insurance policies during the year 2013-14. The LIC accredited 198branches of the Bank as Bima Bank, besides 17 Zones which were declared as BIMA Zone. TheDelhi Zone became Double Bima Zone.
The Bank offers group insurance scheme of LIC namely 'Maha Suraksha Deposit Scheme (NewOne Year Renewable Group Assurance Plan') a life insurance cover of Rs1 lakh for depositaccount holders. The Bank offers Maha Swasthya Yojana, a Family Floater Group MediclaimPolicy of United India Insurance Co. Ltd. for its customers.
The Bank earned a commission of Rs. 7.32 crore from life insurance, showing growth of10 per cent and Rs. 4.12 crore for non-life insurance business during the year 2013-14showing increase of 18 per cent.
2.11 Mutual Fund Activity
The Bank has a tie-up with 25 AMCs (Asset Management Companies) for selling Mutual Fundproducts. The mutual fund business mobilized by the Bank earned commission income of Rs. 5lakh during the year.
2.12 Government Business
During the year 2013-14, 544553 challans of Direct Taxes were collected; similarly1,89,696 challans of Indirect taxes were collected by the branches. Our Branches are alsocollecting other state Govt. taxes including GRAS of Maharashtra State and the totalnumber of Challans collected during the Year is 5,41,220. Total commission to the tune ofRs. 2.70 Cr was received on Tax collection business from Central Government and Commissionreceived from states Tax collection business is Rs. 0.72 Cr.
The Bank has started processing and crediting monthly pension payments of more than1,13,624 Central Government, Defence, Railway and Telecom pensioners at Central PensionProcessing Cell (CPPC), Pune. The processing and payment for new PPOs/ corrigendum PPOsMaster Data base for central Government pensioners etc are being handled by CPPC. Thisfacilitates faster and accurate payment of pension as well as quick settlement of funds byRBI. Timely complaint redressal system has also been established for pension complaint.The commission on Government Business (Pension) for the Year 2013-14 is Rs. 13.57 Cr.
The unique facility of direct & Indirect taxes & VAT collection of Maharashtrais provided by the Bank, at the branch counter in all branches through Maha e-sevaservices. E-payment of Taxes facility available for net banking customers is alsoavailable for direct / Indirect Taxes / VAT payments (for Govt. of Maharashtra). The taxpayment facility has been introduced for e-payment of custom duty & the MaharashtraState taxes are collected through integration in Govt. Revenue Accounting System (GRAS)both online and across the counters. The Bank has added Karnataka and Delhi states forcollection of state Government commercial taxes. Bank is offering its services in VATCollection in U.P in all branches.
2.13 Non Interest Income
The non-interest income stood at Rs. 894.19 crore for the year ended 31.03.2014 asagainst Rs. 912 crore for the year ended 31.03.2013. Non-interest income (other thanprofit from sale of investment), increased by Rs. 23.20 crore in the FY 201314, showing agrowth of 3.02% over previous year. During the year, income from commission, exchange andbrokerage increased by Rs. 53.48 crores from Rs. 491.34 to Rs. 544.82 crores.
2.14 Income, Expenditure and Profitability
The total income of the Bank grew from Rs. 10525.43 crore to Rs. 12850.85 croreindicating a growth of 22.09 per cent during the year.
The detailed income/ expenditure components are as under:
|(Rs. in crore)|
|Particulars||2013-14||2012-13||Variation (per cent)|
|Interest / discount on advances / bills||9187.15||7298.50||25.88|
|Income on investments||2543.03||2231.28||13.97|
|Interest on interbank lending & other Interest||226.48||83.65||170.74|
|Total interest income||11956.66||9613.43||24.37|
|Interest on deposits||7697.04||5879.25||30.92|
|Interest on borrowings||107.93||312.27||-65.44|
|Other Interest expenditure||642.76||388.57||65.42|
|Other Operating expenses||800.99||608.82||31.56|
|Total Non interest expenses||2396.75||1796.64||33.40|
|Total Operating Expenses||10844.48||8376.73||29.46|
|Provisions and Contingencies|| |
|Net Profit|| |
2.15 Financial ratios
|Cost to Income Ratio (percent)||54.43||45.54|
|Return on assets (percent)||0.30||0.74|
|Return on equity (per cent)||5.93||17.32|
|Book value per share (Rs.)||66.69||67.10|
|Profit per Branch(Rs. in lakh)||20.42||43.95|
|Profit per employee (Rs. in lakh)||2.68||5.59|
|Business per Branch (Rs. in crore)||109.61||98.80|
|Business per employee (Rs. in crore)||14.39||12.56|
|Interest income as per cent to Average working funds||9.24||9.33|
|Non Interest income as per cent to average working funds||0.69||0.88|
|Net Interest Margin (per cent)||2.71||3.10|
|Operating Profit as per cent to average working Funds||1.55||2.08|
|Staff expenses as a percent to average working funds||1.23||1.15|
|Dividend (per cent)||10.00||23.00|
|Net worth (Rs. Crore)|| |
|CRAR (%) (Basel II)||10.79||Nil|
|Of which, Tier I CRAR (%) (Basel II)||7.44||Nil|
2.16 Capital from Government of India
During the year, the Bank received equity share capital amounting to Rs. 800 crore(including share premium of Rs. 622.38 crore) from Government of India (GOI) throughallotment of shares on preferential basis. With capital infusion, the share holding of GOIin equity share capital increased to 85.21% as on 31.03.2014.
The Bank's Net worth increased from Rs. 5026.57 crore as on 31.03.2013 to Rs. 6184.11crore as on 31.03.2014.
2.18 Capital Adequacy Ratio
The Capital Adequacy Ratio stood at 10.79 per cent as on 31.03.2014, against theminimum 9 per cent prescribed by RBI in terms of Basel III norms. The Common Equity Tier Icapital adequacy ratio stood at 7.44 per cent.
The Board has recommended Rs. 1 per share (10%) being interim dividend as finaldividend for FY 2013-14.
3. ORGANISATION AND SUPPORT SYSTEM
3.1 Branch Expansion
During the year, the Bank opened 162 new branches, the largest number of branchesopened by the Bank in a financial year since inception. As on 31.03.2014, the total branchnetwork comprised of 1890 branches spread over 29 states and 4 union territories. Thebranch network includes specialized branches in the areas of foreign exchange, governmentbusiness, treasury & international banking, industrial finance, small-scale industryand hi-tech agriculture, pension payment, pension processing, retail credit, Self HelpGroups and asset recovery.
Area wise classification of branches as on 31.03.2014 is given in the table below:
|Sr. No.||Classification||As on 31.03.13||As on 31.03.14|
3.2 Human Resources Management
The Bank has put in place a comprehensive HRM Policy that provides the road map foracquiring appropriate & need based human resources, its development through training,job enrichment, reward and recognition for better performance, career progression, welfareand retention.
During the year the Bank recruited 1224 probationary officers and 10 law officers. TheBank has also recruited 487 Clerks during the year.
Inter scale promotions of officers were carried out for promotions to Scales MMGS IIand above. Total 1237 officers were promoted to higher scales.
The cadre wise staff position shows that there is net addition of 776 employees duringthe FY 2013-14. The particulars are as below:
|S. No.||Particulars||March 2014||March 2013|
To recognize outstanding performance in Banking activities and to motivate others toperform better, various schemes like Performance Linked incentives to all staff of BestPerforming Branches etc. are in vogue. Tamiya Branch (Jabalpur Zone) has been awarded theRolling Trophy in name of Bharat Ratna Dr. Babasaheb Ambedkar for Excellent PerformingBranch Category in disbursement and recovery of advances to SC/ST community.
During the year, 1053 employees ceased to be in service on account of retirement,resignation, termination and death.
The Bank has been allocating up to 3 per cent of its net profit towards various schemesfor the welfare of staff including retired staff. The welfare schemes are administered bya Central Welfare Committee consisting of management & employees representatives.
The Bank has endeavoured to promote a healthy industrial relations climate throughfair, transparent and firm handling of Industrial related matters.
The Bank has been complying with the reservation policy of Govt. of India. SpecialCells at Head Office and all Zonal Offices are functioning to monitor the implementationof the reservation policies and to redress grievances of SC/ST/OBC & Physicallychallenged employees as well as ex-servicemen. The Bank has designated Chief LiaisonOfficers at Head Office and has set up SC/ST Cells at each of its 34 Zonal Offices for thepurpose. During the year periodical meetings were held with SC/ST/OBC EmployeesAssociation to discuss implementation of reservation policy and other constitutional safeguards and also to facilitate involvement in business growth. Similar meetings were alsoheld at Zonal level.
The number of employees belonging to different categories is as under:
|Sr. No||Category of Employees||No. of Employees||Percentage to total|
Rosters have been maintained as per Government g
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Medha Pramod Devdhar , Company Secretary
Ateesh Singh , Nominee (Govt)
Ramadev Laxmichand Saydiwal , Director (Workmen Employee)
R Athmaram , Executive Director
Company Head Office / Quarters:
Phone : Maharashtra-91-20-25511360 / Maharashtra-
Fax : Maharashtra-91-20-25533246 / Maharashtra-
E-mail : email@example.com
Web : http://www.bankofmaharashtra.in
Kashiram Jamnadas Bg,Office No 21/22,5 PD Mello Road,Mumbai - 400009
|Scheme Name||No. of Shares|
|IDFC Equity Opportunity - Series 1 (D)||9,00,000|
|IDFC Equity Opportunity - Series 1 (D)||9,00,000|
|IDFC Equity Opportunity - Series 1 (D)||9,00,000|
|IDFC Equity Opportunity - Series 1 (D)||9,00,000|
|IDFC Equity Opportunity - Series 1 (D)||9,00,000|