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Corporation Bank

BSE: 532179 | NSE: CORPBANK ISIN: INE112A01023
Market Cap: [Rs.Cr.] 4,171.19 Face Value: [Rs.] 2
Industry: Banks - Public Sector

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Management Discussions

1. Monetary and Credit Policy 2013-14

1.1 The Annual Policy for 2013-14 was formulated in an environment of incipient signsof stabilization in the global economy and prospects of a turnaround, albeit modest, inthe domestic economy.

1.2 Against this backdrop, the stance of monetary policy was intended to:

• Continue to address the accentuated risks to growth.

• Guard against the risks of inflation pressures re-emerging and adverselyimpacting inflation expectations.

• Appropriately manage liquidity to ensure adequate credit flow to the productivesectors of the economy.

1.3 The RBI expected a modest improvement in economic activity in FY14 compared toprevious year. Based on this assumption, the country's economic growth was projected togrow at 5.7% in 2013-14. Keeping in view the domestic demand-supply balance, the outlookfor global commodity prices and the forecast of a normal monsoon, WPI inflation wasexpected to be range-bound around 5.5% during 2013-14.

1.4 Consistent with the above growth projections and the RBI's inflation tolerancethreshold, M3 growth for 2013-14 was projected at 13.0% for policy purposes. Consequently,aggregate deposits of SCBs were projected to grow by 14.0%. Keeping in view the resourcerequirements of the private sector, the growth in non-food credit of SCBs was projected at15.0%.

1.5 On the basis of the assessment, the Reserve Bank decided to reduce the policy reporate under the liquidity adjustment facility (LAF) by 25 basis points from 7.5% to 7.25%.The reverse repo rate under the LAF, determined with a spread of 100 basis points (bps)below the repo rate, automatically adjusted to 6.25%. The Marginal Standing Facility (MSF)rate, determined with a spread of 100 bps above the repo rate, adjusted to 8.25%.

1.6 Some other important regulatory and developmental measures proposed were asfollows:

• Reduce the requirement of holding held-to-maturity (HTM) category bonds in thestatutory liquidity ratio (SLR) portfolio for the banks to 23% from the existing 25%.

• Enhanced the loan limits to micro and small enterprises for priority sectorclassification.

• Speedier branch expansion in unbanked rural centers for ensuring seamless rollout of Direct Benefit Transfer Scheme of the Government.

• Finalized the prudential guidelines on restructuring of advances by banks andfinancial institutions based on the Mahapatra Committee recommendations.

• Increased the risk weights and provisioning requirements on banks' exposure tocorporates on account of corporates' unhedged forex exposure positions.

• Bring all districts in metropolitan areas under the fold of the Lead BankScheme.

• Improve the interface of exporters with banks and financial institutions to cutdelays and streamline procedures.

• To allow FIIs to hedge their currency risk by using exchange traded currencyfutures in the domestic exchanges.

• Allow non-bank authorized entities to be part of the payment systeminfrastructure.

• Restrict the import of gold on consignment basis by banks only to meet thegenuine needs of exporters of gold jewellery.

• Prepare a discussion paper on White Label POS and place it in the public domainfor comments.

• Follow a uniform, fair and transparent pricing policy and not discriminatebetween their customers at home branch and non-home branches with a view to ensure thatbank customers are treated fairly and reasonably without any discrimination.

2. Macro-Economic Scenario in 2013-14

2.1 As per the advance estimate of the CSO, India's GDP growth was expected to moderateto 4.9% in FY14, a slightly better growth compared to previous year's growth rate of 4.5%,mainly on an improved performance in the agriculture and allied sectors. The GDP growthrate was 4.4%, 4.8% and 4.7% respectively in the first, second and third quarters of2013-14 at an average of 4.6%.

2.2 As per advance estimates, the agricultural sector is likely to achieve a growthrate of 4.6% in 2013-14, compared to 1.4% 2012-13. On the other hand, manufacturing growthis expected to drop by -0.2% in FY14, from 1.1% in previous year. The growth in the miningand quarrying is likely to be at -1.9%, compared to contraction of -2.2% a year ago. Theservices sector including inance, insurance, real estate and business services sectors islikely to show growth of 6.3% in FY14, against 6.2% in FY 13.

2.3 The index of industrial production (IIP) showed a negative growth of 0.1% during2013-14 compared with 1.1% growth in the 2012-13. As per the use based classiication, thecumulative growth during 2013-14 for basic goods, capital goods and intermediate goodsstood at 2.0%, -3.7% and 3.0% respectively. The consumer durables and consumernon-durables have recorded a growth of -12.2% and 5.2% respectively, with an overallgrowth in consumer goods being -2.6%. As per the sector wise classification, mining andmanufacturing decelerated to -0.8% and -0.8%, respectively, while electricity sectorregistered a growth of 6.1% in 2013-14 as against the preceding year.

2.4 Inflation as per WPI recorded a 3-month high of 5.70% in Mar'14 from as high as7.52% in Nov'13 and 5.65% during the corresponding month of the previous year. Foodinflation (which has a weight of 14.3% in the WPI basket) increased to 9.90% in Mar'14from 8.12% in the previous month. On the other hand, core inflation increased to 12-monthhigh of 3.50% in Mar'14 as against 3.20% in Feb'14. In 2013-14, the wholesale priceinflation averaged 5.91%, lower than the 7.36% inflation seen in the preceding year.Retail inflation, based on CPI, increased to 8.31% in Mar'14 from 8.03% in the precedingmonth. Core CPI inflation, which excludes food and fuel, stood at 7.82% in Mar'14, lowerthan 7.84% in Feb'14. In 2013-14, the retail inflation averaged 9.49%, lower than the10.18% inflation seen in the preceding year.

2.5 India's cumulative value of exports for the period Apr-Mar 2013-14 was $312.36billion as against $300.40 billion, registering a growth of 3.98% over the same periodlast year. The value of imports for the period Apr-Mar 2013-14 was $450.95 billion asagainst $490.74 billion registering a negative growth of 8.11% over the same period lastyear. The trade deficit for Apr-Mar 2013-14 was estimated at $138.59 billion which waslower than the deficit of $190.34 billion during Apr-Mar. 2012-13. India's Current AccountDeficit (CAD) reached a record low of 0.9% of GDP for Q3 of 2013-14. The average CAD levelfor the first three quarters is around 2.3% of GDP and as per the initial estimate it islikely to be around 2% of GDP for the whole year. This is lower than the record CAD levelof4.8% of GDP in FY 13.

2.6 All key deficits, with the exception of effective revenue deficit, have turned outto be lower in 2013-14 revised estimates (RE) than the budget estimates (BE), in absoluteterms. In terms of GDP, while the revenue deficit of 3.3% remained unchanged from the BE,gross fiscal deficit (GFD) and primary deficit (PD) were lower by 0.2% points each, at4.6% and 1.3% respectively. During 2014-15, the GFD-GDP ratio is budgeted to decline by0.5% points to 4.1%.

2.7 During 2013-14, the country's foreign exchange reserves rose by US $11.62 billionand stood at US $303.7 billion as on 28th Mar'14. In order to arrest the slide in Rupeeand to augment depleting forex reserves, RBI had announced two concessional swapfacilities on 4th Sep'13, under which banks could swap dollars raised through foreigncurrency non-resident (FCNR) deposits and overseas borrowings with the RBI. Over thethree-month period from Sep'13-Nov'13, reserves surged by $16.5 billion. With the revivalof portfolio flows since December 2013, India's forex reserves reached US$ 298.6 billionas on 21st Mar'14, an accretion ofUSS 28.2 billion over end-Aug'13.

2.8 The economic growth in FY15 is likely to be higher than that in FY14. However, thepace of recovery is likely to be modest. The recovery is likely to be supported byinvestment activity picking up due to part resolution of stalled projects and improvedbusiness and consumer conidence. The downside risk to growth still remains on account ofthe continued weak performance of industry and increase in risks to agriculture from theEl Nino phenomenon. The current projections for GDP growth for FY15 by various agenciesand inancial institutions range from 5% to 6%. While the RBI projected growth to be in therange of 5% to 6% in FY15, albeit with downside risks to the central estimate of 5.5%, theprojection of National Council of Applied Economic Research (NCAER) and IMF stands at 5.6%& 5.4%, respectively.

3. Banking Trends in 2013-14

3.1 The combination of growth slowdown, persistence of inflation, rising bad loans andresultant restructuring of loans have posed a signiicant challenge for the performance ofbanking industry during 2013-14.

3.2 Taking cognizance of rising inflationary pressure in the economy, the Reserve Bankhiked policy interest rates by 75 bps during 2013-14. Accordingly, Repo and Reverse RepoRate rose to 8% and 7%, respectively, while CRRwas kept unchanged at 4%. In the AnnualMonetary Policy 2013-14 presented on 3rd May'13, the RBI had reduced Repo Rate by 25 bpsto 7.25% and the Reverse repo rate was adjusted to 6.25%. Thereafter, repo rate wasincreased by 25 bps to 7.5% in the Mid Quarter Monetary Policy Review on 20th Sep'13. Itwas further increased by 25 bps to 7.75% in the 2nd Quarter Review on 29th Oct'13.Finally, in the 3rd Quarter Review presented on 28th Jan'14, the repo rate was increasedby 25 bps to 8%.

3.3 Due to exchange market pressures, the RBI took exceptional liquidity measures in2013-14. The MSF rate was increased by 300 bps to 10.25% from 17th July'13. Besides, theoverall allocation of funds under the LAF was limited to 1.0% of the Net Demand and TimeLiabilities (NDTL) of the banking system. The overall limit under LAF was further reducedto 0.5% of NDTL on 24th July'13. Banks were also required to maintain a minimum daily CRRbalance of 99% of the requirement. However, with the ebbing of pressures on exchange rate,the RBI rolled back exceptional measures in a calibrated manner. Accordingly, the minimumCRR balance was reduced to 95% effective from the fortnight beginning 21st Sep'13. The MSFrate was reduced by 75 bps from 10.25% to 9.5% in the Mid-Quarter Review of Sep'13 andfurther by 50 bps on 8th Oct'13. In the 2nd Quarter Review of Monetary Policy presented on29th Oct'13, the MSF rate was reduced by 25 bps to 8.75% and this has brought down the gapbetween it and the repo rate back to its normal level of 100 bps.

3.4 During 2013-14, RBI injected net liquidity to the tune of about Rs. 520 billionthrough outright Open Market Operations (OMOs), besides an average daily net liquidityinjection of Rs. 906 billion through LAF, MSF and term repos and Rs. 294 billion throughexport credit refinance (ECR). During Q4, an average trillion has been injected on a dailybasis via LAF, MSF and term repos and Rs. 397 billion through ECR.

3.5 Scheduled Commercial Banks' (SCBs') business in FY14 was subdued, clearly showinglower economic activity. The deposit of SCBs has registered a y-o-y growth of 14.6% as at21st Mar'14, as against 14.3% in the corresponding period last year. However, much of thegrowth in deposit mobilization happened in the second half of FY14, largely aided by asurge in foreign currency non-resident (FCNR) deposits swapped by banks into Rupeedeposits. Following this, deposit growth of SCBs even reached a high of 17.0% for thefortnight ended 13th Dec'13. Thereafter, deposits growth has cooled down once again toaround 15%. Broad money (M3) for 2013-14 (up to 21st Mar'14) increased by 13.5% ascompared to 13.8% during the corresponding period of last year.

3.6 The non-food credit growth of SCBs trended below the RBI projection of 15% forFY14. As on 21st Mar'13, the y-o-y growth in credit stood at 14.5% (up from 14.1%, a yearago). Credit growth had hit a high of 18.2% y-o-y for the fortnight ended 18th Sep'13.Credit demand increased in August and September as the RBI took extraordinary liquiditytightening measures in July to stem a slide in the Rupee.

The RBI has also decided to move to a new regime of bi-monthly monetary policy reviewstarting 1st Apr'14, which is in line with the recommendation of the Urjit Patel panel onmonetary policy. Under the new regime, RBI will hold six reviews in each inancial year,against the present practice of eight.

4. Bank's Operational Performance 4.1 Deposit Mobilisation

4.1.1 During the year 2013-14 emphasis was laid on clientele expansion with strategy oflining up a series of campaigns for CASA growth. The campaigns saw opening of over 24.33lakh Current and Savings accounts. Key Branches and New branches were focused formobilisation of retail deposits. A special Deposit Scheme CORP1111 for a tenure of 1111days offering attractive interest rate was launched in the month of December 2013 formobilizing retail deposits of less than Rs. 1 crore. An amount of Rs. 926.81 crore wasmobilized under this scheme during the period between 23.12.2013 to 31.03.2014 from 48,819accounts.

4.1.2 Performance Highlights:

i) The Non-Bank Deposits of the Bank has reached a level of Rs. l,72,017crore as at31st March, 2014, registering a year-on-year growth of Rs. 25,493 crore at 17.4%. Thetotal deposits of the Bank including Certificate of Deposits (CD's) reached a level of Rs.1,93,393 crore as at 31st March, 2014, registering year-on-year growth of Rs. 27,388 croreat 16.50%.

ii) Current Deposits stood at Rs. 14,823 crore as against Rs. 15,180 crore in theprevious year.

iii) Savings Deposits reached Rs. 24,478 crore with net accretion of Rs. 3,719 crore at17.91% Y-O-Ygrowth.

iv) The Share of Demand Deposits in total Non-Bank Deposits stood at 22.85%.

v) Term deposits (excluding CDs & Inter Bank Deposits) reached a level of Rs.1,32,715 crore with a net accretion of Rs. 22,131crore at a growth rate of 20.01% Y-O-Y.

vi) The Aggregate Average Deposits of the Bank increased by Rs. 28,106 crore and stoodat Rs. 1,64,824 crore as at 31st March, 2014 recording a growth of 20.56% year-on-year.Average CASA grew by 11.67% with net accretion of Rs. 2,968 crore and stood at Rs. 28,410crore.

vii) The Bank has added 26,83,451 new Deposit Accounts during the year of which,23,91,538 new accounts have been added under Demand Deposits.

4.2 Credit Growth:

4.2.1 The credit portfolio of the Bank increased from the level of Rs. 1,18,717crore asat 31.03.2013 to Rs. 1,37,086 crore as on 31.03.2014, with an absolute growth of Rs.18,369 crore at 15.47% during the financial year ended 31.03.2014. Growth in credit wasachieved through intense marketing of various loan products of the Bank with specialthrust on Agriculture, Retail, Small & Medium Enterprises.

4.2.2. The average advances grew by Rs. 18,784 crore from the level of Rs. 98,256 croreas at March 2013 to Rs. 1,17,040 crore as at March 2014, registering a growth rate of19.1%. The CD ratio as on 31.03.2014, stood at 70.88%.

4.2.3 Infrastructure Lending:

The Bank has been endeavoring to participate more in the nation building activities byextending credit to infrastructure sector. As at 31.03.2014, Bank's credit toInfrastructure stood at Rs. 20,020 crore, which constitutes 14.6% of the aggregate credit.

4.2.4 SME Credit:

The Bank's thrust for lending to the SME sector continued. During the year 2013-14, theSME portfolio has increased from Rs. 19,517 crore as on 31.03.2013 to Rs. 24,818 crore ason 31.03.2014, registering a growth of Rs. 5,301 crore (27.16%). Out of the SME portfolio,advances to the Micro and Small HCtS ' Rs. in crore)

Enterprises (MSE) stood at Rs. 23,816 crore as at 31.03.2014 as against Rs. 18,555crore during the corresponding period last year, recording an increase of Rs. 5,261 crore(28.35%).

During the year, SME Loan Centres with dedicated services of Relationship Managers& Loan Processing team were operationalized at Bangalore (S), Delhi (N), Mumbai,Coimbatore, Ahmedabad, Chennai and Pune to extend a timely and hassle free credit to SMEs.Bank plans to open similar such centres at Lucknow, Ludhiana, Indore, Jaipur, Thane,Kolkata and Chandigarh, shortly.

SME Mega Loan Expos were conducted at nearly 100 locations across India to createawareness of Banks SME loan products among entrepreneurs. As a strategic initiative, SMEGrand Festival Loan Bonanza and Corp Micro Plus campaigns were launched during thefinancial year 2013-14.

As on March 2014, Bank has achieved two out of the three regulatory parametersprescribed by the Prime Ministers Taskforce on MSME sector namely : (1) Credit flow to MSEand (2) Growth in the number of Micro Enterprises under MSE. Though, the Bank could notachieve the prescribed share of Micro Enterprises in MSE, the same has reached a level of54.85% as on 31.03.2014 as against 46.45% as at 31.03.2013.

Regulatory Target RBI / MoF Target Mar-2014 (%age achievement Y-O-Y)
Credit flow to MSE 20% 28.35%
Share of Micro Enterprises in MSE 60% 54.85%
Growth in No. of Micro Enterprise aJcs 10% 28.27%

The Bankhas been awarded First Prize under "National Award for Excellence in MSELending" and Second Prize under "National Award for Excellence in Lending toMicro Enterprises" for the year 2012-13, by the National Committee under the Ministryof MSME. Shri S. R. Bansal, Chairman & Managing Director of the Bank received theseprestigious National Awards for Excellence at the benign hands of Dr. Manmohan Singh, theHon'ble Prime Minister of India, during the National Awards Function held at VigyanBhavan,New Delhi on 1st March, 2014. The Bank also bagged the SKOCH Achiever Award for SMEenablement during the year 2013-14.

4.3 Priority Sector Lending 4.3.1 Sectoral Deployment: The Total amount of credit deployment to Priority sector has moved up from Rs.37,955 crore as on 31.3.2013 to Rs. 48,560 crore as at 31.3.2014, recording an increase ofRs. 10,605 crore at 27.94%. The Priority sector advances of the bank stood at 40.91% ofthe Adjusted Net Bank Credit (ANBC) as against the RBI norm of 40% of ANBC. The Agriculture credit stood at Rs. 13,144 crore as at 31.3.2014 as against Rs.9,466 crore as at 31.3.2013, recording a growth of Rs. 3,678 crore at 38.85 % over March2013. Funds deployed under Agriculture constituted 11.07% of ANBC. Direct AgricultureCredit of the Bank increased from Rs. 6,707 crore to Rs. 9,958 crore recording a growth of48.47% during the year. With this, the Bank could achieve the disbursement target of Rs.8,500 crore under Special Agriculture Credit Plan during 2013-14. Other Priority Sector lending increased from Rs. 9,934 crore as at 31.03.2013to Rs. 11,358 crore as at 31.03.2014, registering a growth of 14.33%.

4.4 Social Lending:

4.4.1 Dispensation of Credit under various Government Sponsored Social Lending I PovertyAlleviation Schemes and to Weaker sections of the society was given due importance so asto fulill the Bank's socio-economic obligations.

4.4.2 The number of Self Help Groups availing financial assistance, has increased from93,329 as at 31.03.2013 to 1,27,065 as at 31.03.2014. Credit to Self Help Groups increasedfrom Rs. 1,022 crore as at 31.03.2013 to Rs. 1,314 crore as at 31.03.2014, registering agrowth of Rs. 292 crore at 28.57%.

4.4.3 Our advances to Weaker sections stood at Rs. 12,183 crore at 31.03.2014 [forming10.26 % of ANBC], thus surpassing the regulatory norm oflO % of ANBC.

4.4.4 Finance to women beneficiaries stood at Rs. 7,039crore as at 31.03.2014 asagainst Rs. 5,021crore as at 31.03.2013 and the bank achieved 5.93% ofANBC towards lendingto women beneficiaries as against the regulatory norm of 5% ofANBC.

4.4.5 As at 31.03.2014, out of a total Priority sector credit of Rs. 48,560 crore, theoutstanding credit to Scheduled Caste/ Scheduled Tribe is Rs. 746.62 crore. Credit topersons belonging to Minority Communities reached a level of Rs. 7,785 crore forming16.03% of Priority Sector Advances.

4.5 Retail Lending

4.5.1 Retail lending continued to be a focus area of the Bank during the year 2013-14.The outstanding under Retail credit improved from Rs. 25,148 crore as on 31.03.2013 to Rs.29,026 crore as on 31.03.2014, recording a growth of Rs. 3,878 crore (15.4%). The share ofthe Retail Credit to the Net Bank Credit stood at 21%.

4.5.2 The portfolio under Corp schemes stood atRs. 21,193 crore as on 31.03.2014 asagainst Rs. 16,355 crore as on 31.03.2013, recording a growth of Rs. 4,838 crore at 30%.

4.5.3 Special promotional campaigns/events were launched during the year to market theproduct and attract new clients.

* Vacation Offer [Car loan] was launched with effect from 15.04.2013 to 31.05.2013,with an all time low interest rate.

* "Monsoon Bumper Offer/Grand Festival Bonanza" was in operation for a periodof 8 months from 01.06.2013 to 31.01.2014 under Corp Home, Corp Vehicle, Corp Vyapar, CorpDoctor Plus and Corp Char Sansar Schemes with attractive interest rates andwaiver/concessions in processing charges.

* The Bank has also organized (i) Retail Expos for marketing its Housing & VehicleLoans and (ii) Businessmen/Traders Meet at major centres across the country, during theyear. The various promotional campaigns/events has created greater visibility to theBank's retail products/schemes, resulting in good business from new contacts.

4.6 New Retail loan Products:

The Bank has introduced a new retail loan product during the year - "Corp CharSansar", a secured Personal Loan variant, specially designed for existing housingloan borrowers, to meet family/personal expenses, was introduced on 01.04.2013.

4.7 Retail Loan Centres:

At present 32 Retail Loan Centres are in operation at all major centres, out of which11 Retail Loan Centres were set up during the year. The Retail Loan Centres have in totalsanctioned 36,300 loan applications amounting to Rs. 5,819 crore under various CorpSchemes during the year.

4.8 Online in-principle approval of Education loans :

Under the in-principle approval of on-line educational loan applications, 385in-principle approvals amounting to Rs. 16.84 crore were accorded during the year.

4.9 Financial Inclusion and Branchless Banking - "Corp GrameenaVikasKendras"

4.9.1 Financial Inclusion and Branchless Banking continue to be the thrust area of theBank. During the financial year, the Bank has provided banking infrastructure in 787villages through Branchless Banking model to take the total number of villages providedwith such facility to 4,332 as at the end of March 2014. The Bank has opened 3.98 lakhsimple 'Basic Saving Bank Deposit Accounts' of people belonging to the weaker sections ofthe society during the year, reaching a level of 21.26 lakh accounts with an outstandingbalance of Rs. 157.46 crore. The Bank has sanctioned 37,501 General Credit Cards till datewith an outstanding balance of Rs. 47.08 crore. The Bank has implemented Urban FinancialInclusion in 114 urban locations spread across 7 states and branded it as 'Corp ShahariVitthiya Samaveshan Kendra'.

4.9.2 Implementation of Government directions: Various State Level Bankers'Committee (SLBCs) have allotted 1,562 road map villages across the country for providingbanking facility either through brick and mortar branch or extension counter or servicecounter or ICT based Business Correspondent (BC) model during the Financial Inclusion Planfor three years from 2013-14 to 2015-16. Of these, Bank has since provided bankingfacility at 1,075 villages (1,067 villages through BC model and 8 villages through branchmodel) as at 31.03.2014. Remaining villages will be provided during 2014-15 thus coveringall villages one year ahead of the target.

4.9.3 Electronic Benefit Transfer Programme: Bank is actively participating inElectronic Benefit Transfer (EBT) Programme i.e. disbursement of wages under MGNREGS(Mahatma Gandhi National Rural Employment Guarantee Scheme) and pensions under SSP (SocialSecurity Pensions) in the states of Andhra Pradesh, Karnataka and Tamil Nadu. Thedisbursements are being made through BCs under this programme. Bank has opened 9.76 lakhaccounts and issued 7.24 lakh smart cards to the beneiciaries under these schemes toreceive the amounts conveniently at their door step.

4.9.4 Bank is participating in Aadhaar Payment Bridge System (APBS) and Aadhaar EnablePayment System (AEPS) implemented by NPCI.

4.9.5 Common Service Centre (CSC): Bank has entered into an agreement with CSCe-Governance Service India Ltd., for extending banking services through their CommonService Centers across the country. The KIOSK based software has been implemented at 4CSCs. The model will be expanded to different places across the country during the comingdays.

5. Credit Assets Quality and Classification

The recession like situation in the economy has put severe strain on the asset qualityof banks. Our bank is no exception to this. The loan delinquency has been considerablyhigher as compared to the previous years. The NPA level has witnessed a sharp increaseduring the year. However, the NPA level could be contained through close monitoring andfollow up and initiating prompt recovery measures.

The classification of the loan assets in terms of Prudential Norms prescribed by theRBI is as follows:

(Rs. in crore)

As on 31.03. 2012

As on 31.03. 2013

As on 31.03.2014

Amount % to total asset Amount % to total asset Amount % to total asset
Standard 99551.10 98.74 117305.77 98.28 133905.74 96.58
Sub-Standard 638.45 0.63 1159.98 0.98 2674.44 1.93
Doubtful 555.50 0.55 791.00 0.66 1881.40 1.36
Loss 80.26 0.08 97.25 0.08 180.95 0.13
Gross Loan Assets 100825.31 100.00 119354.00 100.00 138642.53 100.00

6. Recovery

6.1 The Bank has been complying with the RBI guidelines relating to Income recognition,Asset Classification and Provisioning. The Bank continues to apply a three prongedstrategy for better NPA management. The strategy consists of a) Preventive actions, b)Recovery & upgradation, & c) Resolution & settlement.

6.2 The Gross NPA of the Bank was Rs. 4,736.79 crore as on 31.03.2014 compared to Rs.2,048.23 crore as at the end of the previous financial year. The Gross NPA constituted3.42% of the Gross Advances as on 31st March, 2014 as against 1.72% at the end of thecorresponding previous financial year.

6.3 The Net NPA of the Bank was Rs. 3,180.56 crore as on 31.03.2014 compared to Rs.1,410.88 crore as at the end of the previous financial year. The Net NPA ratio of the Bankagainst the Net Advances has increased from 1.19% as at 31.03.2013 to 2.32% as at31.03.2014. As a matter of prudence, the Bank provided in full for all NPA Accounts withborrower wise aggregate liability of less than Rs. 25,000/- irrespective of the nature andextent of securities held.

6.4 The Cash recovery & Upgradation during the Financial year 2013-14 has increasedto Rs. 1,355-53 crore as compared to Rs. 1,509.30 crore in the previous financial year.This is attributed to the economic slowdown prevailing in the country.

6.5 The provisions under SARFAESI Act 2002 have been effectively leveraged to ensurefurther improvement in Recovery performance. An amount of Rs. 776.89 crore has beenrecovered/ upgraded in 3,534 accounts during the year through SARFAESI action.

6.6 The Bank has introduced a special One Time Settlement (OTS) scheme by name"Corp Riyayati-II" for small NPA accounts with balances up to Rs. 10.00 lakh on01.08.2013. As on 31.03.2014, a sum of Rs. 41.00 crore could be recovered in 13,871accounts under the scheme.

6.7 Holding of Mega Recovery Camps in all the zones covering NPA cluster branches hasbeen identified as an effective strategy in tackling NPAs, especially the small value NPAaccounts. Such camps are meticulously planned and conducted at all the zones of the bankcovering clusters of NPA concentrated branches with the active support of the rank andfile. A large number of borrowers had attended the camps conducted during the currentfinancial year. The Bank held 700 such Mega Recovery Camps across all the zones in thecountry during the year 2013-14. As many as 16,500 borrowers attended the camps andsettled their accounts. The Bank could achieve a cash recovery of Rs. 80.00 crore throughconduct of Mega Recovery Camps during the year. Further, 5,296 accounts involving Rs. 450crore were upgraded in the camps.

7. Treasury and Investment Operations

7.1 The aggregate investment of the Bank as on 31st March, 2014 was Rs. 66,698.61 crorewith maturity mix of securities consistent with risk perceptions and investment policiesof the Bank.

7.2 The average yield on investments including RIDF investments during the year underreport stood at 7.42% compared to 7.34% as at the end of the previous year.

7.3 The net profit from sale of investments was Rs. 338.99 crore for the year ended31.03.2014 as compared to Rs. 280.33 crore in the previous year.

7.4. The Bank has put in place the risk management tools like Duration, ModifiedDuration and Value at Risk for all interest bearing securities.

8. International Banking

8.1 The Bank has 63 Designated Branches, which cater to the foreign exchange business.Cumulative Merchant turnover has increased by 7.20 %, from Rs. 73,421 crore to Rs. 78,710crore, during the year 2013- 14.

8.2 Exchange Income declined by 7.54%, from Rs. 99.71 crore to Rs. 92.19 crore, duringthe year.

8.3 Fee Based Income increased by 4.77%, from Rs. 179.74 crore to Rs. 188.31 croreduring the year.

9. Merchant Banking Activities:

9.1 During the year the Bank has handled 10 Dividend Payout and 11 Issue Collectionassignments.

10. Precious Metal Business

Futures & Options Quote
Future Data Not present
Key Information

Key Executives:

Sadhu Ram Bansal , Chairman & Managing Director

B K Srivastav , Executive Director

S K Dash , Company Secretary

Ekanath Baliga , Director (Officer Employee)

Company Head Office / Quarters:

Post Box No 88,
Mangaladevi Temple Road,
Phone : Karnataka-91-824-2424971-2423853 / Karnataka-
Fax : Karnataka-91-824-2423853/2421581 / Karnataka-
E-mail : isd@corpbank.co.in
Web : http://www.corpbank.in


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