bank of maha Management discussions

1. MANAGEMENT DISCUSSION AND ANALYSIS:

1.1 Economic and Banking Scenario 2019-20

The financial year 2019-20 was a difficult year for the global economy with world output growth growing at its slowest pace of 2.9% since the global financial crisis of 2009. With the onset of the COVID-19 outbreak in early January 2020, the situation worsened. Due to falling consumption, investment & exports, the economy suffered a slowdown in growth, wherein GDP growth fell from 7% in FY2018 & 6.1% in FY2019 to 4.2% in FY20. The fall in growth was sharp in industrial sector which fell to 0.9% y-o-y from 4.9%; moderation in services sector (growing at 5.5% compared to 7.7% in the previous year), which was offset by an uptick in the growth of agriculture sector (growing at 4% against 2.4% in the previous year) due to healthy precipitation.

With weak economic growth, falling consumption & tax collection, the Government took important reforms measures to boost investment and consumption. However, the outbreak of Covid-19 in India and consequent nation-wide lockdown dampened the momentum. Bank credit growth in the year ended up at a much lower rate than was expected.

1.2 Outlook for 2020-21

To counter the impact of COVID-19, the Government of India unveiled a stimulus package worth INR 20-lakh-crore (~10% of GDP) with a focus on MSMEs, migrant workers, farmers, urban poor and NBFCs. While providing adequate liquidity to the financial system the Reserve Bank of India also reduced the policy repo rate by 175 basis points since February 2020.

Economic activities in the first couple of FY21 was in a standstill due to the nationwide lockdown imposed. Consequently, while there is a widespread expectation for full year output to contract from the previous year, economic growth is estimated to pickup in Q3 & Q4 of FY21 assuming that the pandemic dissipates in the second half of the year.

2. PERFORMANCE HIGHLIGHTS 2019-20:

1. Total Business of your Bank stood at Rs.2,44,955 crore as on 31.03.2020 as against Rs.2,34,117 crore as on 31.03.2019, showing an annual growth of 4.63%.

2. Total deposits stood at Rs.1,50,066 crore as compared to Rs.1,40,650 crore last year, showing an annual growth of 6.69%

3. CASA deposits increased to Rs.75,475 crore as on 31.03.2020 from Rs.69,830 crore as on 31.03.2019, registering a growth of 8.08%. Share of CASA to total deposits stood at Rs.50.29% as on 31.03.2020.

4. Gross advances of the Bank stood at Rs.94,889 crore as on 31.03.2020 in comparison to Rs.93,467 crore as on 31.03.2019.

5. Operating Profit stood at Rs.2,847 Crore for the year ended 31.03.2020 as against Rs.2,198 crore for the year ended 31.03.2019.

6. Business per Employee increased to Rs.19.55 crore as on 31.03.2020 as against Rs.18.13 crore as on 31.03.2019. Corresponding figures for Business per Branch stood at Rs.133.64 crore and Rs.127.79 crore respectively.

2.1 Sectoral Deployment of Credit

Percentage to total O/s	O/s as on 31.03.2020 (in Rs.Crore)	Percentage to total O/s	O/s as on 31.03.2019 (in Rs.Crore)	Percentage to total O/s
Industry Of which	30,113.57	31.74%	36,491.52	39.04%
i. Infrastructure	7,370.82	7.77%	8,844.99	9.46%
ii. Chemicals, Dyes, Paints etc	1,430.69	1.59%	2,219.63	2.37%
iii. Petroleum	688.76	0.73%	365.33	0.39%
iv. Iron and Steel	1,609.59	1.70%	1,844.24	1.97%
v. NBFCs and Trading	10,759.03	11.43%	10,672.69	11.42%
vi. Engineering	2,336.55	2.46%	2,942.93	3.15%
vii. Construction	1.78	0.00%	5.21	0.01%
viii. Other Industries	5,916.35	17.67%	9596.5	10.27%
Agriculture	14,384.66	15.16%	1,5220.3	16.28%
MSME	17,163.92	18.09%	1,4664.42	1.46%
Housing	14915.71	65.39%	1,2052.1	12.89%
Education	1227.70	5.38%	1,086.53	1.16%
Exports	1,167.11	1.23%	1,200.04	1.28%
Commercial Real estate	1,611.34	1.70%	2,324.14	2.49%
Gross Advances	94,888.98	xxx	93466	xxx

2.2 Quality and NPA Management

• The Bank has set up "Asset Recovery Cells (ARC)" at all zonal offices to ensure focused efforts for upgradation and NPA recovery.

• Twelve Asset Recovery Branches (ARBs) have also been set up across the Banks Zones for large NPA accounts, more particularly where legal actions are in progress and where the bank requires a more focused follow up approach.

• Further, the Bank established Stressed Assets Management Vertical by way of a separate department at Head Office under which Bank started 4 (four) Stressed Assets Management (SAM) branches in Delhi, Mumbai, Hyderabad and Pune, where NPAs with balance of Rs.5 crore and above are being monitored.

• The Loan Tracking Cell has been established where Bank undertakes telephonic follow up on daily basis with borrowers of stressed accounts/slippages and repayment of over dues is insisted. It is expected that this will result in improving recovery and upgradation of NPAs. The Bank has also set up separate Cells at its Head Office for identification of Wilful Defaulters and gearing up actions under DRT/SARFAESI Acts.

• The Bank has been implementing suo-motu nondiscriminatory and non-discretionary One Time Settlement (OTS) Schemes. Monitoring of the performance under the schemes is undertaken by the Recovery Department, Head Office on daily basis. During 2019-20 the Bank introduced following such OTS schemes:

a. Mahabank Ghar Ghar Dastak Yojana (GGDY) 2019-20: Mahabank GGDY 2019-20 was introduced for Small NPA borrowers up to Rs.25 lakhs under Doubtful & Loss/TWO categories.

b. Maha-Riyayat Yojana 2019-20 (MRY): Maha- Riyayat Yojana 2019-20 (MRY) was introduced for NPAs in Doubtful and Loss categories with Ledger Balance above of Rs.25 lakhs and up to Rs.50 crore.

Bank has also made intensive follow up with the defaulting borrowers through visits, letters, notices, Recovery Camps, Lok Adalats, Mahabank Adalats, actions under SARFAESI/DRT Act. Services of Recovery Agents/Resolution Agents are engaged so as to have an early resolution. The Bank has also initiated action under the provisions of the Insolvency & Bankruptcy Code 2016 against various large NPA borrowers. The position of Non-Performing Assets is as under:

2.3 Foreign Exchange Business

Currently, the bank has 36 B Category branches across the country catering to the International business needs of the customers of the Bank apart from TIBB at Mumbai as "A" category branch. The Merchant Business for FY 2019-20 stood at Rs.35,127.77 crore. The performance during the year 2019-20 can be seen below:

			(Rs. in Crore)
Particulars	2019-20	2018-19	Percentage of (+/-)
Total FEX Business Turnover	5,68,236.68	8,12,351.14	-30.05%
Merchant Business Turnover	35,127.77	37,311.51	-5.85%
Profit in FEX Business	166.07	132.39	25.44%

2.4 Investment

The breakup of Investments into SLR & Non-SLR investments is given below:

• Gross Investments as on 31.03.2020 stood at Rs.58,171.34 crore, of which Rs.36, 632.88 crore were into SLR securities and Rs.21,538.46 crore into Non-SLR Securities. The excess SLR securities as on 31.03.2020 stood at Rs.9,445.23 crore.

• The net investments (net of provisions) stood at Rs.57,740.85 crore as on 31.03.2020 as compared to Rs.59,697.05 crore as on 31.03.2019. Investments under Held to Maturity (HTM) category consist of 65.40%, while Available for Sale (AFS) comprised of 34.59% of total investment portfolio as of 31.03.2020. The net interest income from investment activity increased to Rs.4,203.89 crore from Rs.3,689.61 crore during the last year (growth of 13.94%).

• The Non-Performing Investments stood at Rs.389.15 crore as on 31.03.2020.

2.5 Merchant Banking

The Bank handled 63 issues (previous year 52 issues) of Commercial paper amounting to Rs.22,220 crore (previous year Rs.8,360 crore) for its clients as an Issuing and Paying Agent (IPA) during the year.

2.6 Borrowings

The borrowing of the Bank as on 31st March 2020 stood at 3,766.89 crore including re-finance as under:

		(Rs. in Crore)
Particular	Amount as at 31.03.2020	Amount as at 31.03.2019
Total Borrowing	3,766.89	10,149.17
of which Borrowing RBI under	478.00	1500.00
LAF

 

Particular	Amount as at 31.03.2020	Amount as at 31.03.2019
of which Borrowing Market REPO	0	2003.63
Of which Borrowing TRePS (G-Sec)	0	3277.48
Of which Refinance from
NABARD	0	140.00
EXIM BANK	0	0.00
NHB	0	92.62
MUDRA	0	0.00
SIDBI	87.75	0.00
Borrowings in the form of Bonds & debentures capital instruments	3,100.00	3,100.00
Borrowings outside India	103.09	35.39
Others	0.05	0.05

During the FY 2019-20, the Bank redeemed Basel II /Basel III Compliant Bonds for an amount Rs.600 crore on the redemption date. The bank undertook borrowing as part of its asset liability management.

2.7 Depository Services

• The bank is Depository Participant (DP) of Central Depository Services of India Ltd. (CDSL) since September 1999.

• The bank has also introduced Basic Services DEMAT Account Facility (BSDA) & ASBA through net-banking and UPI.

2.8 Bancassurance

The bank is a corporate agent for carrying out Bancassurance business under all three segments i.e. Life Insurance, General Insurance and Health Insurance. The performance during the year 2019-20 can be seen below:

2.9 Government Business

During the year 2019-20, 6,05,256 challans of Direct Taxes and 40,446 challans of Indirect taxes were collected by the branches. Total commission to the tune of Rs.4.54 crore was received on tax collection business from Central/State Governments and other business. As a service to senior citizens, the Bank is processing and crediting monthly pension payments of more than 1,11,653 Central Government, Defense, Railway and Telecom pensioners at Central Pension Processing Cell (CPPC), Pune. The commission on Government Business (Pension) for the Year 2019-20 stood Rs.13.05 Cr.

2.10 Income, Expenditure and Profitability

The total income of the Bank stood at Rs.13144.68 crore in FY 2019-20 as compared to Rs.12,397.06 crore in FY 2018-19. The detailed income/expenditure components are as under:

			(Rs. in Crore)
Particulars	2019-20	2018-19	Variation ( in %)
Interest/discount on advances/bills	6409.27	6,566.64	-2.40%
Income on investments	4202.69	3,689.61	13.91%
Interest on interbank lending & other Interest	883.49	593.35	48.90%
Total interest income	11495.45	10,849.60	5.95%

 

			(Rs. in Crore)
Particulars	2019-20	2018-19	Variation ( in %)
Non-interest income	1649.23	1,547.46	6.58%
Total Income	13144.68	12,397.06	6.03%
Interest on deposits	6757.19	6,750.94	0.09%
Interest on borrowings	20.56	29.57	-30.47%
Other Interest expenditure	438.90	335.61	30.78%
Staff expenses	1743.82	1,794.17	-2.81%
Other Operating expenses	1337.15	1,289.16	3.72%
Total Non-interest expenses	3080.97	3,083.33	-0.08%
Total Expenses	10297.62	10,199.45	0.96%
Operating Profit	2847.06	2,197.61	29.55%
Provisions and Contingencies	2458.48	6,981.49	0.00%
Net Profit	388.58	-4,783.88	0.00%

2.11 Financial Ratios

The various financial parameters of the Bank during the year 2019-20 can be seen below:

Particulars	2019-20	2018-19
EPS (Rs.)	0.67	(14.26)
Cost to Income Ratio (percent)	51.97	58.39
Return on assets (percent)	0.23	(3.01)
Return on equity (per cent)	6.32	(207.99)
Book value per share ( Rs.)	11.99	10.24
Profit per Branch ( in lakh)	21.20	(261.13)
Profit per employee ( in lakh)	3.10	(37.05)
Business per Branch (Rs. in Crore)	133.64	127.79
Business per employee (Rs. in Crore)	19.55	18.13
Interest income as per cent to Average working funds	6.78	6.82
Non-Interest income as per cent to average working funds	0.97	0.97
Net Interest Margin (per cent)*	2.60	2.53
Operating Profit as per cent to average working Funds	1.68	1.38
Staff expenses as a percent to average working funds	1.03	1.13
Dividend (per cent)	0.00	0
Net worth ( Crore)	6985.74	5859.73
CRAR (%) (Basel II)	13.52	11.86
Of which, Tier I CRAR (%) (Basel II)	10.67	9.91

2.12 Capital

The Bank decided to raise capital of Rs.131.70 crore in April 2019 through Employee Share Purchase Scheme (ESPS) in compliance of SEBI (Share Based Employee Benefits) Regulations, 2014 by issuing and allotting 10,00,00,000 (Ten crore) equity shares of Rs.10/- each of Bank at 13.17 per equity share to its Whole Time Directors and Employees. The shares were offered at a discount of 20% on the floor price i.e. 13.17 per share.

Bank has allotted 297,09,37,912 Equity Shares of 10/- each of Bank to Government of India at issue price of Rs.15.14/- per share on 29^th April, 2019 against a capital infusion of Rs.4498/- crore. The Government of India infused Equity capital of Rs.831/- crore in Bank on 20^th April, 2020. The said money is kept in the Share application money pending allotment A/c till allotment formalities are completed. With the approval of RBI, said capital is used for computation of CET-1 Ratio as on 31.03.2020. Further, the Bank also raised Tier - II capital of Rs.600 crore by issue of BASEL III Tier - II Bonds with coupon rate of 8.70% in March, 2020.

2.13 Net worth

The Banks Net Worth stood at Rs.6,985.74 crore as on 31.03.2020 as against Rs.5,859.73 crore as on 31.03.2019.

2.14 Capital Adequacy Ratio

The Capital Adequacy ratio stood at 13.52 % as on 31.03.2020, against the minimum of 10.88 % (including CCB) prescribed by RBI in terms of Basel III norms. The Common Equity Tier 1 Ratio stood at 10.67 %.

3. RESOURCES: BRANCH NETWORK, HUMAN RESOURCES, IT INFRASTRUCTURE, CUSTOMERS RESPONSIVENESS AND OTHERS:

3 .1 Branch/ATM Network

As on 31.03.2020, the total branch network comprised of 1,833 branches spread across all the States and four union territories. The branch network includes specialized branches in the area of Foreign Exchange, Government Business, Treasury and International Banking, Industrial Finance, Small Scale Industry and Hi-tech agriculture, Pension Payment, Self Help Groups etc. Area wise classification of branches as on 31.03.2020 is given in the table below:

Sr. No.	Classification	As on 31.03.2020	As on 31.03.2019
1	Rural	616	615
2	Semi-Urban	428	426
3	Urban	331	325
4	Metro	458	466
	Total	1833	1832

In FY 2019-20 the Bank merged one branch ensuring that no discomfort was caused to the customers and opened two new branches.

ATM Network

	31.03.2020	31.03.2019
Offsite	544	552
Onsite	1307	1306
Total	1851	1858

3.2 Human Resources Management

The Bank has put in place comprehensive HRM Policies that provides the road map for acquiring appropriate & need based human resources, its development through training, job enrichment, reward and recognition for better performance, career progression, welfare and retention.

Recruitment: During the year 2019-20, the Bank recruited employees as under:

276 Officers in Scale I, 23 officers in Scale II, 7 Officers in Scale III & 2 Officers in Scale IV (this includes 35 CA, 3 Forex, 2 Economist, 1 Domestic Dealer, 9 Data Analyst, 4 Inf. System Auditor, 1 Information Security, 5 HR, 3 NET Admin, 4 Soft Programmer, 2 Soft Test, 1 Fire Engg, 5 Security Officers &1 DBA). The Bank also recruited 261 Clerks & 25 Sub-staff.

During the year, 984 employees exited from service on account of retirement, VRS, resignation, termination and death. Inter scale promotions of officers were carried out during 2019-20. Following number of candidates were promoted.

JMGS-I TO MMGS-II	MMGS-II to MMGS III	MMGS-III TO SMGS- IV	SMGS- IV TO SMGS-V	SMGS-V TO SMGS- VI	SMGS-VI TO TEGS- VII
488	297	99	34	18	7

During the year 2019-20, 96 Clerks were promoted to Officer Cadre in Scale I & 47 Sub-staff were promoted to Clerical Cadre. The Cadre wise staff position as of 31.3.2020 with sex ratio percentage is mentioned below:

Category	Male	%	Female	%	Total
Officers	4780	72.02	1857	27.98	6637
Clerks	2832	65.94	1463	34.06	4295
Sub-staff	1417	88.56	183	11.44	1600
Total	9029	72.05	3503	27.95	12532

The Bank has been complying with the reservation policy of Govt. of India. Special Cells at Head Office and all Zonal Offices are functioning to monitor the implementation of the reservation policies and to redress grievances of SC/ST/OBC & Physically challenged employees as well as ex-servicemen. The Bank has designated Chief Liaison Officers at Head Office and has set up SC/ST Cells at all Zonal Offices.

Compassionate Appointments

A Scheme for ‘Compassionate Appointments/"Payment of Ex-gratia lumpsum amount" to/of heirs of employees dying in harness or retiring due to incapacitation framed as per the directives of Government of India, has been implemented. The details of compassionate appointments and payment of Ex-gratia lumpsum amount for the year 2019-20 is as under:

Compassionate Appointments		Payment of Exgratia
Cadre	No. of employees	No. of employees	Amount paid
Clerk	07	Nil	Nil
Sub-staff	07	01	6,00,000/-

The reimbursement of examination fees & payment of cash incentive/Honorarium in respect of courses from Indian Institute of Banking & Finance, MBA from reputed Institutions, FRM, BIRD, PRM, CFA etc. has been widened by adding courses in the list of courses for reimbursement of fees thereby making total 38 courses eligible for reimbursement of examination fees. A policy for granting special leave and 100% reimbursement of hospitalization expenses to officers when he/she meets with an accident/injury while on duty is in place.

Training Activities:

The Bank has a training system, which facilitates attention to regular periodic assessment of skill gaps at various levels in relation to existing and emerging business opportunities. Skill building in credit, Forex, customer relationship management, marketing of products and services, credit monitoring and recovery, risk management, technology based banking, branch management, complying with statutory, legal and policy requirements and preventive vigilance received special attention during the year. Special Leadership Development Program for General Managers & Dy. General Managers were also organized at IIM Kozhikode. E-learning platform was utilized for imparting training to 3600 Officers. Training programs were also held on thrust areas like financing MSMEs, retail lending, agriculture finance, soft skills and rural development.

Cadre-wise Break up of Employees trained during the period 1.4.2019 to 31.03.2020 are as under-

Cadre	No. of Programmes	Training Days	Employees Trained
Officers	230	582	4494
Clerks	132	397	1840
S/staff	53	99	861
Total	415	1078	7195

3.3 Technology Initiatives

The Year 2019-2020 was a Technology Upscaling year for the Bank. The Bank had taken up major IT Projects and successfully initiated/up scaled the same which are enumerated as under:

• MeitY-Digital Score Card:

Ministry of Electronics & Information Technology (MeitY) had set a target of 19.30 crore for digital transactions and 75,750 for merchant onboarding on various acquirer channels of Bank. Our bank achieved the digital transactions of 20.45 Crore and merchant on boarding of 1,06,971 for FY 201920. The MeitY monitors the progress of digital payment transactions, merchant acquisition, UPI and AePs system resilience on monthly basis and communicates the scores to Banks. Our Bank secured more than 70 score in 4 months and stood first among all PSU Banks consecutively for 3 months.

• The Bank implemented 807 Self Update Pass Book Printing Kiosks, 106 Bunch Note Acceptor Machines and 75 Cash Recyclers at various locations across the Bank. The same shall be continued to ensure fulfilment of customer requirements/ satisfaction.

• The Bank had a tied up with BSNL for upgrading the Bandwidth of the Leased Lines from 64-128 Kbps to 2 Mbps. As on 31.03.2020, bandwidth of 1,770 leased lines is upgraded to 2 Mbps. In order to make our systems more resilient, bandwidth is made available from Additional Network Service Providers including Airtel, Vodafone, Sify and TCL. So far 1,570 branches have dual service providers.

• National Common Mobility Card-The Bank partnered with NPCI for issuance of National Common Mobility Card (NCMC) using Near Field Communication. NCMC has features of both Online-Offline transactions and prepaid-wallet capabilities. Bank has so far issued 15,828 NCMC cards to customers.

• Bharat Bill Pay System (BBPS): BBPS is a one- stop ecosystem for payment of all bills providing an interoperable and accessible "Anytime Anywhere" bill payment service to all customers across India with certainty, reliability and safety of transactions. Bank is offering corporate bill payment solution to Pune Municipal Corporation (PMC) MSEDCL bill payments on BBPS at bill payment platform. BBPS service is also live on BC (Business Correspondent) channel.

• Digital Media Signage (DMS) Systems are electronic displays having central control for display of text, animated or video message and presentations for banks product advertisement/promotion and digital channel awareness. DMS is implemented in our Bank and running successfully across 1,820 branches.

• The ISO 27001: 2013 certification was achieved for our IT division covering HO-IT, DC, DR and CBS Project Office in August 2015. Bank is ensuring continued compliance & successfully completed the Surveillance Audit for the continuation of ISO 27001: 2013 Certification for the year 2019-20 as well.

• The first PCI DSS certificate was awarded towards compliance of Debit Card environment security to the Bank on 12.09.2014 and is continued till date.

• In order to provide better improved access and service quality to customers, DFS has introduced EASE (Enhanced Access and Service Excellence) agenda and reforms. The bank implemented additional 14 services & 42 features in Internet Banking application and 12 services and 40 features in Mobile banking application. The share of financial transactions through ‘Home & Mobile based channels increased from 55% to 72%.

• The Bank is actively promoting BHIM Aadhaar Pay payment channel and 38,152 Merchants were on boarded as on 31.03.2020.

• Bank has implemented Public Financial Management System (PFMS) which is used by Government Agencies to make payments directly into the recipients Bank Account.

• The Bank issues Rupay and Visa debit cards in different variants such as Visa EMV, Rupay Classic, Rupay Platinum etc. to its customers. As per RBI guidelines, all the cards are EMV Chip based. The total card base of the bank increased from 52.50 lakh as on 31.03.2019 to 76.44 lakh as on 31.03.2020.

• Various facilities are being provided through our Internet Banking platform for facilitating online payment of taxes, utility bill payments, online shopping/e-commerce, railway reservation, LIC premium payment, e-SBTR etc. and facility for viewing tax credit statement 26AS and Demat account with the Bank.

• Bank has implemented Cyber Security operations Centre (CSOC) with state of the art technologies including,

a) Security Information and Event Management

(SIEM) solution

b) Anti-Advanced Persistent Threat (Anti-APT)

Solution for combatting advanced attacks.

c) File Integrity Monitoring (FIM) for detecting unauthorized changes to critical files on Servers

d) Privilege Identity Management Tool (PIM) a centralized portal-based console to access the privilege devices, servers and applications for all privilege users with two factor authentication for login.

e) Network Behavioral Anomaly Detection (NBAD) tool for detecting network anomalies.

f) Bank is also availing Anti-Phishing, Anti-Trojan and Anti- Rouge services to take care of phishing attacks.

• The Bank has initiated implementation of Loan Life Cycle Management software (LLMS) with Document Management System (DMS) and Early Warning Signals (EWS) solutions.

• CBS Front End version upgradation with enhanced features has been initiated for better user experience and resolving data integrity issues

• The Bank received IBA Banking Technology award for Best IT Risk Management and Cyber Security Initiatives under Medium Banks category.

• Digital Products Enhancement and Compliance

a) UPI 2.0: Our UPI platform is migrated to UPI 2.0 for more feature enhancements such as ASBA.

b) AePS 2.5: AePS system is migrated to AePS 2.5

c) Internet Banking & Mobile Banking:

Instant Fund Transfer - New feature of Instant Fund Transfer up to Rs.10,000 has been added in Internet Banking. Besides, it also introduced new feature of activating Internet Banking for all new saving accounts and also conducted various customer initiatives in order to improve digital banking service.

3.4 Customer Centric Initiatives taken by the Bank

• The Bank has pursued high standards of customer service to ensure customer satisfaction throughout the year by implementing all major recommendations of Goiporia Committee, Dr. S.S. Tarapore Committee and Damodaran Committee. As a member of Banking Codes and Standards Board of India (BCSBI), Bank has adopted Code of Banks Commitment to Customer and Banks Code of Commitment to MSMEs.

• The bank has printed folder called as "My Folder" containing all customer service policies, information on service charges, guidelines on Government Schematic Loans, Ombudsman and BCSBI Codes. The same is printed in Marathi, Hindi and English and supplied to all branches and Zones for making the same available to all customers on demand.

• Duly documented policies approved by the Board, on "Deposit", "Collection of Cheques", "Redressal of Grievances", "Compensation" , "Operational Procedure for Settlement of Claims of Deceased Depositors" and Customer Rights Policy are in place.

• Customer Service Committees are formed at all branches and their meetings are conducted regularly on monthly basis. The Standing Committee on Customer Service at Head Office and Zonal Level Customer Service Committees at Zones, meet regularly to address and review various customer related matters and to take steps, for an improvement, on an ongoing basis.

• The Committee of the Board on Customer Service meets on quarterly basis to monitor the quality of the customer service, redresses of customer grievances and to ensure customer satisfaction.

• Full-fledged grievances Redressal machinery is in place to respond promptly to customer grievances. The Bank has started internet based mechanism, Standardized Public Grievances Redressal System (SPGRS) for lodging the complaints or to give suggestions/feedback on services by the customers and for providing acknowledgement and status of their feedback/complaints as per the directions of Government of India.

Sr. No.	Particulars	2018-19	2019-20
1	Customer complaints at the beginning of the year	388	145
2	Complaints received during the year	8395	8594
3	Complaints redressed during the year	8638	8443
4	Complaints pending at the end of the year	145	296

3.5 KYC/ AML

The Bank has Board approved KYC-AML-CFT Policy in place. The Policy is the foundation on which the Banks implementation of KYC norms, AML standards and CFT measures are based. The full KYC compliance entails staff education as well as customer education for which the Bank takes various measure on a regular basis. A comprehensive list of KYC documents is uploaded on the Banks web site for the benefit of customers. Regular training sessions are conducted on KYC-AML-CFT guidelines at the Banks training establishments to sensitize the employees.

3.6 Risk Management

The Bank has put in place Risk Management Policies and Strategies to identify, measure, monitor and manage risk efficiently and establish control systems in line with the Banks aggregate Risk Appetite. Bank has constituted Risk Management Committee at Board level to monitor the risk at Bank level in accordance with RBI Guidelines. The bank has also constituted sub-committees headed by Top Management of Bank.

3.7 Marketing & Publicity

Bank adopted integrated marketing strategy to promote Retail, Agri, MSME products and IT services. Marketing Team participated in various expos under Retail, Agri & MSME sector for increasing our presence and business mobilization. In FY 2019-20, Bank established its presence across all mediums like TV, Radio, Print, OOH (out of home) etc. Bank associated with International cricket match between India and West-Indies, top shows like The Kapil Sharma Show and various others for increasing brand image and reach. Marketing team launched "We Lead" portal to inculcate sales attitude amongst staff members and motivate them to participate actively.

To capture the young generation customer base and disseminate information, Bank launched its social media handles (@mahabank) on Facebook, Twitter, LinkedIn, Pinterest, Instagram and YouTube (BankofMaharashtra). With digital/SMS campaigns, Bank has gradually increased its followers/ likes on social media pages. Banks FB page also got verified status on 8^th October 2019. A dedicated team is taking care of response management on social media handles. Banks brand jingle and new corporate website was also launched during the year.

3.8 Citizens Charter:

The Bank has adopted the Charter since 2000-01, which details the duties and responsibilities of the Bank towards its customers. The charter is displayed at all the branches and Banks website. Some of important responsibility of Branches are;

• Meeting the demands for fresh/good quality notes and coins of all denominations.

• Exchanging soiled notes, and

• Accepting coins and notes either for transactions or exchange.

• Separate que for senior citizen

4. SOCIO/MICRO ECONOMIC DEVELOPMENT

4.1 Priority Sector Lending

It has been the constant endeavor of the Bank to facilitate equitable and sustainable economic development by timely and hassle-free availability of credit for productive purposes to Small and Marginal Farmers, Micro and Small Enterprises, Retail Traders, Professional and Self Employed, Women Entrepreneurs and entrepreneurs from economically weaker sections. The outstanding advances under Priority Sector (excluding investment) as of 31st March 2020, aggregated to Rs.38,900 crore constituting 39.34% of the total credit.

4.2 Agriculture

Bank disbursed loans of Rs.4,605 Crore for Agriculture and allied activities during the year 2019-20. The total outstanding advances to agriculture sector reached a level of Rs.14,385 Crore as on 31.03.2020. The Bank also achieved all mandatory targets (on Quarterly average basis) under Priority Sector and Agriculture including sub-targets of Small and Marginal Farmers, Direct lending to non- Corporate farmers, Micro Enterprises, Weaker Section, etc. during the FY 201920.

Bank focused on growth of Investment Credit under Agriculture during the year 2019-20 and disbursed Rs.1,495 Crore. Bank has organized 2,500 Credit Camps for Investment Credit under Agriculture and Agri Loan Expo throughout the country. As a result, Investment Credit of Bank grew by 13.64% over previous year reaching to the level of Rs.5,099 crore.

Bank entered into strategic tie-ups with Tractor Manufacturers, Micro Irrigation Companies, Farm Pond Construction Company for promoting farm mechanization, micro irrigation activities and also with Govt. of Maharashtra under POCRA Project for financing to FPO during the year. It also entered into an Agreement for Credit Guarantee with Small Farmers Agri Business Consortium (SFAC) for financing to Farmer Producer Organizations (FPOs). It also devised Area Based schemes to meet the needs of Agriculture and Agro based industries which are becoming popular due to competitive ROI and customer- friendly features.

Over last few years, Agriculture sector has been repeatedly hit by vagaries of natural calamities like drought, flood, hailstorms, etc. Within the regulatory guidelines, Bank has been extending relief measures to farmers from time to time. Our bank is also successfully implementing farm loan waiver scheme of Govt of Maharashtra. During the year Bank credited Rs.343 crore under CSMSSY-2017 (old debt waiver scheme) & Rs.1,086 crore under MJPSKY-2019 (new debt waiver scheme). Along with this, Bank has efficiently implemented various other Farm Loan Waiver schemes declared by respective states. The Bank undertook awareness/sensitization program and locational trainings for the branches for increasing advances to agriculture by providing hassle free credit to farmers.

4.2.1 Mahabank Kisan Credit Card

This scheme gained popularity especially in rural areas where it is being propagated successfully and vigorously. The bank organized around 1,209 Credit Camps during Kharif, 2019 season across the country. During, FY 2019-20 the bank sanctioned total 1,38,788 Kisan Credit Cards to farmers amounting to Rs.2,259 crore. Credit flow to MKCC beneficiaries reached to a level of Rs.7,237 Crore as on 31.03.2020. As per regulatory guidelines, Bank has introduced MKCC for Animal Husbandry and Fisheries. The scheme is helping small and scattered dairy farmers, fishermen and entrepreneurs in animal husbandry to grow their business and also becoming popular in rural and semi urban areas.

4.3 Micro, Small and Medium Enterprises (MSME)

MSMEs are recognized as a major growth engine for the Indian economy. They generate opportunities for direct and indirect employment by facilitating use of natural resources and local skills to stem the tide of migration to urban areas and promote low investment enterprises. Finance is made available to viable enterprises at an attractive and low rate of interest. Online enquiry portal is made available on the Banks website. Bank has already adopted Simplified Loan Application for MSEs and the same is displayed on the Banks website. Bank has also adopted Banks Code of Commitment to Micro and Small Enterprises. Banks lending to Micro, Small and Medium Enterprises (Priority) increased by 25.04% as compared to March 2019 and recorded a growth of Rs 3437 crore in absolute terms. Banks performance in MSME portfolio in FY20 can be seen below in the table:

S.No	Particulars	Actual	Target
1	% of MICRO to Adj. Net Bank Credit	9.92%	(Target 7.50%)
2	MSME Outstanding Growth YOY	25.04%	(Annual growth)
3	YOY Growth under Micro Enterprises O/s	39.18%	(Annual Target 10%)
4	YOY Growth under Micro & Small enterprises O/s	23.46%	(Annual Target 20%)
5	Share of Micro against to MSE O/s	61.06%	(Annual Target 60%)

4.3.1 MUDRA

Bank is giving special attention to credit needs of the non-farm enterprises engaged in manufacturing, trade and services up to Rs.10 Lakhs. With the introduction of Pradhan Mantri MUDRA Yojana (PMMY), banks outreach to small borrower has improved in FY 2019-20. Bank sanctioned Rs.2,410.83 crore under PMMY against the target of Rs.2,300 crore as on 31.03.2020. Bank achieved 102.51% of target allotted by Government under PMMY. As on 31.03.2020, total MSME advances of the Bank stood at Rs 17,164 crore, registering growth of 25.04%. The share of MSME advances in total advances stood at 18.09% as on 31.3.2020. Under CGTMSE scheme, Bank sanctioned loans of Rs 569.42 crores to 1,833 borrowers up to March 2020.

Other Major Achievements

• Bank has been on boarded as Financier on the PSB loan portal, a new initiative of the Govt. of India during the financial year and sanctioned 1,067 cases amounting Rs.365.37 crore.

• Bank has implemented the MSME Restructuring guidelines issued by Reserve Bank of India and have restructured 12,407 accounts amounting to Rs.879.85 crore during FY 2019-20.

• Organized MSME outreach programme in month of October 2019 in various zones and sanctioned total Rs.320.09 Cr.

• Organized MSME Expo in different zones in month of February 2020 and sanctioned total amount Rs.176.59 Cr.

• Launched new scheme MSME Cluster Financing for "Green Economy" under Pradhan Mantri Mudra Yojana (PMMY). Launched cluster financing for three identified clusters namely Textile, Stone and Ceramic.

• Introduced new schemes-Maha Contractor Scheme, Maha Hospitality Scheme and ‘Standby Line of Credit for MSME (SLC-MSME) & Standby line of credit for working capital (SLC-WC) to give additional comfort to the existing MSME borrower in regard to liquidity easing.

• Under SUI Scheme, there is sanction of Rs.87.42 Cr and disbursement is Rs.40.55 Cr. (New branches on boarded in Metro - 390, Urban - 214, Semi Urban - 152 and Rural-101.)

• Surpassed the allotted target of Rs.269.0 Cr for the Mahabank Contractor Scheme Campaign (Campaign Period: 18.11.2019 to 18.12.2019). During the campaign itself, there was disbursement of Rs.101.53 Cr.

4.3.3 Banks exposure to select segments

Banks exposure is given below:

			(Rs. in Crore)
Sr. No.	Sector	As on 31.03.2020	As on 31.03.2019	% increase (+/-)
1	Micro/SHG Finance	217	208	4.33%
2	Weaker Sector	10481	11423	-8.25%
3	SC/ST beneficiaries	2530	1667	51.77%
4	Minority Community	3017	2924	3.18%

5. IMPORTANT SCHEMES/ PROJECTS OF THE BANK:

5.1. Credit Flow to Retail Sector

Bank is providing retail loans for salaried persons, professionals, businessmen and pensioners for purchase of housing properties/ plots, repair/ renovation of house, purchase of consumer durables, two/four wheeler vehicles, education and loan for other personal needs etc. The retail loan portfolio of the Bank stood Rs 22810.10 Crore.

			Amt. in Rs.Crore)
SN	Scheme	Brief Description	Portfolio as of Mar 20	NPA %
1	Maha Super Housing Loan Scheme	Housing loan for purchase/construction of new/existing house/flat, repairs/renovation/alteration of existing house/flat, purchase of plot and construction thereon.	14,915.71	3.92
2	Maha Super Car Loan Scheme and Mahabank vehicle Loan scheme	Bank has launched schemes for purchase of New four wheeler i.e. Car, Jeep, Multi Utility vehicles (MUVs), SUV etc. for personal use. (i.e. not for hiring/ferrying passengers) for individuals (18 years and above).	1,444.79	2.85
3	Model Education Loan Scheme	Bank is implementing Model Education Loan Scheme as per IBA guidelines. The bank introduced Mahascholar Education loan Scheme to provide financial assistance/ support to meritorious students for pursuing higher studies /education in courses conducted by the Premier Educational Institutions in India as a differentiated product.	1,227.70	6.05
4	Loan Against Self-Occupied Property	Bank has introduced Loan Against Self-Occupied Property in which loan is given to the borrower against the property. The end use of the loan is for meeting varied personal needs like Childrens Education, marriage of children, medical treatment, travel/ tour expenses, buying vehicle or hi- tech gadgets.	686.48	0.78
4	Mahabank Top up Loan Scheme	In order to extend additional credit support to existing housing loan borrowers as well takeover of existing housing loans of other banks with additional facility of Top-up Loan, Bank has launched "Mahabank Top Up loan Scheme".	422.66	0.70
5	Mahabank Gold Loan Scheme	With a view to tap the potential of gold loans as a lucrative asset and to cater to the needs of meeting other personal expenses, whatsoever which include personal expenditure for varied needs like marriage, higher education, medical emergencies, business travel etc, Bank has launched a retail loan product as "Mahabank Gold Loan Scheme" w.e.f. 26.09.2014.	127.87	1.47
6	Mahabank Aadhar Loan Scheme	To cater to the needs of our existing pension account holders in meeting their personal expenses, pilgrimage, medical and domestic needs etc; Bank has re-launched "Mahabank Aadhar Loan Scheme".	575.22	0.97

5.2. Centralized Processing of loans

Bank has established Centralized Processing Cells (CPCs) for processing and sanctioning commercial advances at all its 32 Zones to improve the TAT in facilitating timely credit. In addition, total 32 CPCs for retail credit are functioning in all Zones. In future, the bank intends to increase the number of CPCs Retail as per location requirement and business potential.

5.3 Door Step Banking Services

Bank is providing Door Step Banking Services for its High End Customers. The services include Corporate and Retail Cash pickup and delivery & Cheque Collection Services.

5.4 Alternate Delivery Channels

5.4.1 Internet /SMS/Phone Banking

1. There was an increase of 10.40% in Internet Banking, 23% in Phone Banking and 13% in SMS banking users over the previous year.

2. With continuous follow up and increase in net security through the Mahasecure for IB users, substantial rise in users/online transactions is expected.

3. In the Internet banking, additional 13 services and 42 functionalities are added for more customer ease and convenience.

4. In the current financial year over 47.27 crore digital transactions were carried out through various channels.

5.4.2 Mobile Banking

1. Maha Mobile functionality has been customized and simplified (12 services and 30 functionalities) for increasing enrolments.

2. Mobile banking users increased by 37.23 % during the year.