indian bank share price Management discussions


1. GLOBAL ECONOMY

• The global economy has demonstrated a remarkable resilience in the face of multiple, overlapping shocks and significant monetary tightening. Despite these challenges, economic growth in the United States and several major emerging market economies (EMEs) has exceeded expectations. This resilience can be attributed to the strength of the services sector, which has offset the subdued performance of the manufacturing sector.

• On inflation front, headline inflation has come down across many countries. But, the reduction in core and services inflation has been slower. This is largely due to relatively strong household spending and persistent tightness in labour markets, which has kept wage pressures high. Major Central Banks in advanced economies (AEs) have responded by keeping policy rates steady, aiming to align inflation more closely with their targets.

• Tight financial condition, potential increase in energy prices amid geopolitical tension however, pose a risk to faster economic growth.

• In light of these factors, the International Monetary Fund (IMF) in its April 2024 "World Economic Outlook" has projected that the global economy will continue to grow at a rate of 3.2% in both 2024 and 2025, maintaining the same pace as in 2023. This steady growth rate reflects a balance between the supportive aspects of economic resilience and the restraining influences of the identified risks.

2. INDIAN ECONOMY

• On the domestic front, the Indian economy continues to exhibit strong economic performance with broad-based growth across sectors. Many international organisations assert Indias pivotal role in determining the growth path of Asia in the coming years.

• Indias growth continues to show resilience on the back of robust domestic demand, strong public infrastructure investment and a healthy financial sector.

• Most of the domestic high frequency indicators reported a positive growth in FY24. The composite Purchasing Managers Indices (PMIs) pointed towards sustained improvement in both manufacturing and services due to strong domestic and international demand.

• The governments efforts in managing retail inflation in FY24 have been highly successful. Inflation measured by the Consumer Price Index declined from 6.65% in FY23 to 5.36% in FY24, which is within the tolerance level of the inflation-targeting framework. The Governments positive action has also contributed to inflation control, such as a reduction in petrol, diesel and LPG prices.

• The prospects of fixed investment remain bright with business optimism, healthy Corporate and Bank balance sheets, robust government capital expenditure and signs of upturn in the private capex cycle.

• Taking all these factors into consideration, real GDP growth for FY25 is projected at 7.0% and assuming a normal monsoon, CPI inflation for FY25 is projected at 4.5% by RBI. In its April 2024 "World Economic Outlook" report, IMF has projected Indias GDP growth at 6.5% for FY25.

Union Budget FY24

In an environment of complex global economic landscape, Indias Interim Budget for FY25 outlines the Governments vision to propel Indias advancement and achieve ‘Viksit Bharat by 2047. The budget drives Indias quest for inclusive and sustainable development with the theme of ‘Sabka Sath, Sabka Vikas and Sabka Prayas. The Budget does a good balancing act of maintaining fiscal prudence while pushing for higher inclusive growth.

• The nominal GDP for FY25 is projected at

Rs.3,27,71,808 Cr at a growth rate of 10.5% Y-o-Y. The fiscal deficit is estimated to be 5.1% of GDP. Despite election year pressures, the government continued its path of fiscal consolidation, which will support G-Sec yields.

• Continuing with the recent emphasis on capital spending as a catalyst for economic development and job creation, the forthcoming fiscal year has witnessed an 11.1% increase in the allocation to infrastructure, reachingRs.11.1 trillion (3.4% of the GDP).

• Micro, Small and Medium Enterprises (MSMEs) take a centre stage in the budgets vision. The Government lays down a road map, emphasizing on timely availability of finance, relevant technologies, targeted skilling and re-skilling. This multifaceted approach, coupled with a regulatory environment geared towards MSME growth, recognises their pivotal role in driving economic growth, job creation and entrepreneurial dynamism.

• The budget has focused on providing value addition to boost farmers‘ income and promote private and public investment in post-harvest activities including aggregation, modern storage, efficient supply chains, primary & secondary processing and marketing & branding.

• The Government has prioritised inclusive growth and development, with investments and initiatives aimed at improving healthcare, education, social welfare and women empowerment. There has been a significant increase in budget allocations and initiatives across various social sector schemes in India for FY25. The Government plans to set up more medical colleges using existing infrastructure. The Government has planned to encourage vaccination for girls in the age group of 9 to 14 to prevent cervical cancer.

• The Government plans on expanding and strengthening the e-vehicle ecosystem by supporting manufacturing and charging infrastructure. Greater adoption of e-buses for public transport networks to be encouraged through payment security mechanisms to assure long - duration gross cost contractors of on-time payment.

RBI Monetary Policy

• The RBIs Monetary Policy Committee (MPC) on 5th Apr24Rs. left the key repo rate unchanged at 6.5% for the seventh time in a row, with its focus firmly on bringing inflation lower. In its first meeting of this financial year, the committee continued the stance of ‘withdrawal of accommodation.

Recent developmental and regulatory policy measures taken by RBI

The Reserve Bank of India (RBI) has announced several developmental and regulatory policy measures aimed at fostering a transparent and digitally advanced financial sector.

• RBI developed a mobile app for the "RBI Retail Direct Scheme" which will provide retail investors to buy and sell instruments, with greater convenience and deepen the G-Sec market.

• Additionally, in a move to enhance customer convenience and reduce cash-handling loads on bank branches, the RBI proposes to facilitate cash deposit through the Unified Payments Interface (UPI).

• The transaction limits for UPI payments are set to increase, particularly for medical and educational services, fromRs.1 lakh toRs.5 lakh per transaction. This aims to encourage the use of UPI in these critical sectors.

• Moreover, to promote the use of "UPI-Lite", RBI proposed to facilitate offline transaction using Near Field Communication (NFC) technology, ensuring speed and reliability even in areas with weak or no internet connectivity.

• These measures collectively reflect the RBIs commitment to fostering a robust and inclusive digital financial ecosystem in India.

3. BANKING SECTOR:

• Bank credit growth remained robust in FY24 with improving economic activity. Bank credit increased to 16.3% Y-o-Y in Mar24 from 15.4% in Mar23. While credit growth (Y-o-Y) picked up across the board, it remained higher for private sector banks (PVBs).

• From a sectoral perspective, credit growth in Agriculture, Industry, Service Sector remained robust in Mar24 whereas personal loan growth softened on a Y-o-Y basis.

• The asset quality of SCBs improved, with the overall gross nonperforming assets (NPA) ratio declining to 3.0% in Dec23 from 4.5% a year ago. Asset quality improved across all the major sectors.

• Lower deposits growth than credit and tight liquidity condition have surfaced for the banking sector in the last financial year. In the current tightening cycle, the extent of transmission to term deposit rates has remained higher than lending rates. Though the savings deposit rates of banks have remained almost unchanged, the declining share of current account and savings account (CASA) deposits in total deposits along with the higher transmission to term deposit rates as compared to lending rates, has exerted downward pressure on net interest margins (NIMs) of banks. The overall cost of deposits inch-up due to moderating share of CASA deposits.

• Moving ahead, it is expected that the credit growth rate may moderate in FY25. Deposit growth is likely to improve in FY25 as banks have been strongly emphasizing the growth of their liability franchise. Compression of interest spreads, may exert pressure on the profitability, though the same is expected to remain healthy. On the asset quality front, it is expected that the same will continue improving. The capital position of banking sector is expected to remain comfortable in the near term.

Year Ahead

Global economy is forecasted to remain stable on the back of better outlook in several developed and large emerging economies. In India, the economic activity is expected to be supported by an upturn in the investment cycle on account of the Governments continued thrust on capital expenditure, higher capacity utilisation, underlying resilience of the services sector, double digit credit growth and healthier Corporate and Bank balance sheets. Headwinds from geopolitical tensions, volatility in international financial markets, geo-economic fragmentation, rising Red Sea disruptions, and extreme weather events, however, pose risks to the growth outlook.

4. DETAILED BUSINESS OVERVIEW

• Global Business recorded a YoY growth of 12% reaching a level ofRs.12,21,773 Cr in Mar24 as againstRs.10,94,752 Cr in Mar23. Domestic Business recorded a growth of 10% and reachedRs.11,59,986 Cr as againstRs.10,51,948 Cr in Mar23.

• Global Deposits grew by 11% YoY toRs.6,88,000 Cr in Mar24 as compared toRs.6,21,166 Cr in the previous year. Domestic Deposits also grew by 9% toRs.661826 Cr in Mar24 as againstRs.608027 Cr in Mar23. Overseas Deposit grew by 99% (YoY) toRs.26174 Cr as on 31.03.24 as againstRs.13139 Cr on 31.03.23.

• Savings Bank Deposits(Domestic) exhibited growing trend and stood atRs.241414 Cr as on 31.03.24 as againstRs.224873 Cr on 31.03.23 with a YoY Growth of 7.36%.

• CASA Deposits stood atRs.2,80,487 Cr as on 31.03.24 as againstRs.2,60,809 Cr on 31.03.23 registering a growth of 8% YoY. CASA ratios were at 40.77%(Global) and 42.31%(Domestic).

• Total Domestic Term Deposit grew by 9.78% (YoY) toRs.381814 Cr as on 31.03.24 as againstRs.347788 Cr on 31.03.23.

• Global Advances grew by 13% toRs.5,33,773 Cr in Mar24 overRs.4,73,586 Cr a year ago. Domestic Credit grew by 12% YoY and stood atRs.4,98,160 Cr (Rs.4,43,921 Cr as on March 31, 2023). Standard Advances have grown by 15.10% YoY.

• Global Credit-Deposit Ratio stood at 77.58%.

4(a) DOMESTIC DEPOSITS:

Total Domestic Deposit Incremental growth was

Rs.53799 Cr in FY24 as againstRs.23366 Cr in FY23 with a YoY Growth of 130%

• Domestic CASA Incremental growth was

Rs.19774 Cr in FY24 as againstRs.13149 Cr in FY23 with a YoY growth of 50%

• Tab Banking has strengthened with additional 20 SB products, 2 CA products, 12 New services.

• Bank has launched VKYC 2.0 version with improved customer journey under Video based Customer Identification Process (VCIP)

• Bank has strengthened Government Deposit Business by opening R&GR Cells at 9 potential State capitals thereby taking total R&GR Cell strength to 15.

• For Individual savings deposits, Bank is targeting NRIs, HNIs & Institutions through establishment of 75 Resource Acquisition Centres (RACs) across the country with Customer Relationship Manager(CRM) concept.

4(b) RETAIL CREDIT: Credit flow to Retail Sector:

Retail Credit has grown by 15% YoY. Of which, home loan has increased by 11%, vehicle loan by 49% & personal loan by 10%.

(Rs. in Cr)

Parameters

Mar23 Mar24 YoY
Home Loan
59840 66423 11%
(incl. Mortgage loans)
Vehicle Loan 5377 8016 49%
Personal Loan 7769 8566 10%
Jewel Loan
5206 5366 3%
(Non Priority)
Other Retail Loan 12894 16364 27%

Total Retail Credit

91086 104735 15%

Highlights:

• Additional Retail Assets Processing Centres (RAPCs) have been opened at Navi Mumbai and Bengaluru South, taking the total to 74, for encashing the potential available.

• For financing home and auto loans, Bank has on-boarded prominent Corporate Direct Selling Agents(DSAs) and 4-wheeler companies respectively.

• Education loan products have been realigned based on the category of the institution as Premier Elite, Premier Special, Premier and others. In FY24, 77 specific camps were organized in various premier institutions for mobilizing proposals under education loan.

4(c) AGRICULTURE

• Agriculture credit of the Bank grew at 19 % YoY fromRs.101937 Cr toRs.121062 Cr as on March 31, 2024 as detailed below:

(Rs. in Cr)

Agriculture

31.03.2023 31.03.2024 YoY
Crop Loans 77894 92473 19%
Investment credit 11980 13136 10%
Agri allied 3610 5842 62%
Infrastructure &
Ancillary 8453 9611 14%

Total Agriculture

101937 121062 19%

Disbursement:

• Under Ground Level Credit Flow to Agriculture (GLC), Bank disbursed farm loans to the tune of

Rs.84601 Cr during FY24 as against an annual target ofRs.65000 Cr.

• During FY24, Bank disbursed a sum ofRs.53862 Cr to 50.52 lakh Small/Marginal Farmers.

Priority Sector Advances - Performance against RBI mandatory target in FY24

• Priority Sector Advances was atRs.178527 Cr as on 31.03.2024. Priority sector as a percentage to Adjusted Net Bank Credit (ANBC) for 2023-24 stood at 43.82% as against the mandatory target of 40%.

• Agriculture Credit under priority sector was at

Rs.83590 Cr as on 31.03.2024 and the percentage to ANBC for FY24 stood at 20.52% as against the mandatory target of 18%.

• Lending to SF/MF stood atRs.44242 Cr as on 31.03.2024 and constituted 10.86% of ANBC for FY24 as against the mandatory target of 10%.

• Lending to Weaker Sections stood atRs.54382 Cr as on 31.03.2024 and constituted 13.35% of ANBC on quarterly average basis for FY24 as against the mandatory target of 12%.

• Lending to MSE-Micro Enterprises stood at

Rs.47256 Cr as on 31.03.2024 and constituted 11.60% of ANBC for FY24 as against the mandatory target of 7.50%.

• Lending to Non-Corporate Farmers stood at

Rs.65364 Cr as on 31.03.2024 and constituted 16.05% of ANBC for the year 2023-24 as against the mandatory target of 13.78%.

Credit flow to Self Help Groups(SHG):

• SHG is one of the most important approaches for women empowerment in India. Lending to Self Help Groups/Joint Liability Groups present an excellent opportunity to promote micro enterprises in rural areas leading to increased employment generation and in turn income to the rural mass.

• The outstanding credit to SHGs stood at

Rs.19243 Cr covering 4.21 lakh SHGs as on 31.03.24. During FY24, the Bank had disbursedRs.15689 Cr to 3.16 lakh SHGs.

• Bank has surpassed the target set by National Rural Livelihood Mission(NRLM) under both disbursementRs.11839 Cr and outstanding

Rs.17995 Cr for FY24 as against targets ofRs.10243 Cr andRs.13597 Cr respectively.

• Emphasis is given to increase SHG lending in emerging areas like Bihar, Rajasthan, West Bengal, Odisha and Assam.

• During FY24, credit amounting toRs.3159 Cr has been extended to 44929 SHGs through the Microsate branches, which are specialized branches serving as ‘One Stop Shop- providing credit as well as credit plus services like training, maintaining accounts/books etc.

• To give focused lending under SHGs in FY24, Bank has identified 57 SHG intensive branches having SHG business aboveRs.25 Cr and an amount of

Rs.2218 Cr has been extended to 30325 SHGs in FY24.

4(d) MICRO, SMALL AND MEDIUM ENTERPRISES (MSME)

• MSME portfolio of the Bank has registered a growth of 6 % on YoY basis as on 31st Mar24 and stood at

Rs. 84121 Cr as againstRs.79656 Cr on 31.03.2023.

• Standard MSME advances have grown by 9.65% YoY.

• Merchant Credit Card for MSME traders, Lab Grown Diamond and PM Vishawakarma Scheme are the new products launched under MSME.

• 81 MSME processing centres(MAPCs) help the Bank in mobilizing fresh business, improving Turn Around Time (TAT) and ensuring quality lending.

• Supply Chain Financing (SCF) has been launched for extending short-term working capital finance to dealers / vendors.

• 10 Start-Up cells have been opened across major start up hubs of the country – one each in Ahmedabad, Bengaluru, Chennai, Coimbatore, Delhi, Gurgaon, Guwahati, Hyderabad, Kanpur and Mumbai.

MSME Clusters:

• To support the sustainability and growth of MSEs and to build their capacity, Bank has formulated 83 clusters including schemes to cater to the needs of NER (North East Region) and Southern

States including coastal regions covering 74 districts to tap the untapped potential in these areas.

• Rate of Interest under cluster schemes has been suitably rationalized.

PMSVANIDHI (Loans to Street Vendors)

• Under the PMSVANIDHI scheme, Bank has extended credit facility to 5.94 lakh street vendors and disbursedRs.747 Cr.

MUDRA

• Bank has disbursed MUDRA loans amounting to

Rs. 7745 Cr (excluding RRBs) as against target of

Rs. 6950 Cr and achieved 111% of FY24 target.

Stand Up India

• Bank has provided credit assistance to 11428 SC / ST / Women entrepreneurs under Stand Up India surpassing the target of 11384.

MSME PRERANA

• MSME Prerana, a business mentoring programme for MSMEs, has expanded its outreach to 12 states/ Union Territories in 8 languages.

• As on 31.03.24, 57 batches of MSME Prerana have been conducted and 1864 entrepreneurs (819 women) have been trained across 12 states/ UTs in 8 languages.

START-UP Financing

• Ind Spring Board has been designed to extend credit assistance for specific needs of Startup companies.

• Bank has entered into MOUs with 13 Premier Institutes (IIT,IIMs etc.) and financial assistance of

Rs. 207 Cr has been given to 114 Start-Ups.

4(e) CORPORATE CREDIT

Corporate Credit of the Bank stood atRs.188242 Cr (Mar24) constituting 38% of the overall domestic credit of the Bank. During FY24, Corporate Credit has grown by 10% YoY and the Standard Corporate Credit has grown by 12% YoY.

9 Large Corporate Branches & 27 Mid Corporate Branches located at centers with high business potential are catering to the needs of corporate customers.

4(f) OVERSEAS CREDIT

• Bank has three foreign branches located at Singapore, Colombo and Jaffna and one International Financial Services Centre (IFSC) Banking Unit (IBU) at Gandhi Nagar, Gujarat. Total outstanding Advances (gross) of the foreign branches (including IBU) as on March 31, 2024 isRs.35613 Cr as againstRs.29665 Cr an year ago with 20% YoY growth.

4(g) FOREX BUSINESS

• Export credit (standard) business of the Bank has grown 6% YoY atRs.2944 Cr in Mar24.

• API integration with Directorate General of Foreign Trade (DGFT) has been enabled for issuance of Electronic Bank Realization Certificate(eBRC) by the exporters themselves.

• UPIRs. Pay NowRs. for cross border remittances to Singapore is available in coordination with NPCI using mobile app.

4(h) NON RESIDENT BUSINESS

Considering the huge untapped potential in Non Resident (NR) segment, a separate Vertical for Non Resident(NR) Business was created during FY24.

• A dedicated Helpdesk to support the NR customers and branches has been provided. A facility for customers to contact this desk through digital mode is also being developed.

• Initial survey and preliminary work for opening a Representative Office at UAE has been completed in the current fiscal.

• Steps for Rupee Drawing Arrangements (RDAs) with a slew of Exchange Houses are nearing fruition.

• ‘IND NR Connect a get-together with Non

Residents was held across the country with huge customer participation.

4(i) FINANCIAL INCLUSION BC Network:

• As on 31.03.2024, Bank is having 11297 Business Correspondents of which 15 are Corporate BCs.

PMJDY:

Particulars

Mar23 Mar24 YoY
Accounts (in lakhs) 205 224 10%
Balance (in Cr)
9342 11106 19%

Average balance in PMJDY account of the Bank increased fromRs.4557 in Mar23 toRs.4953 in Mar24, which is well above the industry average ofRs.4422. Micro Insurance and Micro Pension Schemes:

(number in lakhs)

Name of the

Mar23 Mar24 YoY

Scheme

PMJJBY 43.74 64.35 47%
PMSBY 101.71 157.39 55%
APY 31.83 38.44 21%

• In micro pension scheme APY during FY24, the Bank has added 6.61 lakh fresh enrolments with Average Account Per Branch (AAPB) of 112 as of 31.03.2024.

• Bank has launched a new Digital FI solution "IB-SAATHI" as a part of operational transformation enabling the Bank to serve better to the last mile through BCs.

4(j) BANCASSURANCE & MUTUAL FUND

• Bank has earned income ofRs.163 Cr through Bancassurance business in FY24 as against

Rs. 136 Cr in FY23.

• For Mutual Fund distribution, Bank has recently tied up with M/s Ind Bank Merchant Banking Services Ltd (IBMBS) for paperless Broking and Mutual Fund Services.

4(k) GOVERNMENT DEPOSIT/SAVINGS SCHEMES

Bank is collecting funds under various Government Schemes viz., Sukanya Samriddhi, Public Provident Fund(PPF), Senior Citizen Savings Scheme(SCSS), Sovereign Gold Bonds(SGB), Mahila Samman Savings Certificate, Kisan Vikas Patra, National Savings Certificate, etc.

5. BRANCH NETWORK AND EXPANSION

Domestic Branch network of the Bank stood at 5847 as on 31.03.2024, comprising of 1985 Rural, 1530 Semi Urban, 1174 Urban and 1158 Metropolitan branches. The Bank also has 3 overseas branches viz., at Singapore, Colombo, Jaffna and an IFSC Banking Unit (IBU) at Gift City Gandhi Nagar, Gujarat.

During FY24, the Bank has expanded its branch network by 79 customer interface branches which includes 9 Mid Corporate branches and 1 Microsate branch. Of the newly opened 79 branches, 19 are in Unbanked Rural Centres, 5 in Left Wing Extremist districts and 1 each in North-Eastern States of Arunachal Pradesh and Assam. 19 branches were rationalized during FY24 towards consolidation of banking outlets.

6. DIGITAL TRANSFORMATION AND ADOPTION

Expectations of the customer in the form of fast, seamless and personalized journeys are increasing. Bank has embarked on the transformation journey for digitalization. Bank came out with its first digital product Pre Approved Personal Loan (PAPL) in April 2022 under Project WAVE (World of Advanced Virtual Experience). Till March 2024, Bank has launched 78 digital journeys – STP (Straight Through Processing) as well as branch assisted (including 21 processes and portals) under Retail Assets, Agriculture, MSME, Liability and Third Party Products.

• Total Digital Business garnered through these journeys wasRs.81250 Cr, of which,Rs.70491 Cr was through RAM (Retail, Agri, MSME) Advances and

Rs. 10759 Cr from Deposits.

• Bank is driving customer outreach for adoption of new digital offerings through various channels besides conducting internal outreach through employee engagement sessions and plans to onboard every customer in at least one digital product of the bank by the end of FY25

Mobile Banking:

• Bank is focusing on enhancing its mobile banking capabilities to provide customers with a seamless and secure banking experience on their smartphones. This includes providing enhanced UI/UX with Omni-Channel experience integrating mobile payment solutions, such as UPI, BBPS, Digital market place etc. to facilitate quick and convenient transactions. The public launch of the same is scheduled in FY25.

• 52 lakh new users have been on-boarded on Mobile Banking platform in FY24. Banks cumulative user base stand at 167 lakhs registering 45% YoY growth.

• Digital transactions under Mobile Banking channel registered 21% YoY growth for the FY24.

Internet Banking:

• 28 lakh users have been on-boarded on Internet Banking platform in the FY24. Banks cumulative user base stand at 106 lakhs, registering 37% YoY growth.

• Digital transactions under Internet Banking channel registered 59% YoY growth for the FY24.

7. ANALYTICS CENTRE OF EXCELLENCE (ACoE)

With an objective to drive innovation, improve decision-making and foster a data driven culture across the organization, the Analytics Centre of Excellence(ACoE) was established. Various dashboards and analytical models (Descriptive, Predictive and Prescriptive) have been developed by ACoE to strengthen the decision making process in the Bank.

8. CREDIT MONITORING

Credit monitoring commences from scrutiny of sanctions covering the entire loan lifecycle. Containment of fresh slippages and upgradation of fresh NPAs coupled with maintenance of asset quality during the life span of the asset, right from disbursal of the loan, till the loan is closed or to the stage of NPA.

• Fresh NPA during FY24 wasRs.6636 Cr. The slippage ratio was brought down from 1.75% in FY23 to 1.49% in FY24.

• Standard advance of restructuring book to total standard advance for FY24 has come down to 2.40% from 3.40% as on FY23 due to satisfactory performance.

• On boarded the Bank as biller with NPCI under BBPS (Bharat Bill Payment System) for improving collection in loan accounts.

• Awarded by Transunion CIBIL as "Best Consumer Delight PSU Consumer (FY2023-24)" for redressing the customer complaints within the industry-best TAT level.

9. ASSET QUALITY MANAGEMENT

• Asset quality of the Bank has improved as reflected through GNPA of 3.95% as on 31.03.24 as against 5.95% on 31.03.23 and Net NPA ratio of 0.43% as on 31.03.24 has improved from 0.90% as on 31.03.23.

• The Provision Coverage Ratio (including TWO) of the Bank as on 31.03.24 is 96.34% and has improved from 93.82% as on 31.03.23.

• Bank has made recovery ofRs.1817 Cr during FY24 from NCLT admitted accounts.

• Under the SARFAESI Act, during FY24, 1623 properties were sold with sale price ofRs.1201 Cr.

• Bank has actively participated in all National Lok Adalats and organized various Lok Adalats at Mandal Level. 33584 accounts were settled with an amount ofRs.343 Cr.

• From Bad Debts Written off accounts(AUC), an amount ofRs.2858 Cr was recovered during the financial year.

10. CASH MANAGEMENT SERVICES (CMS)

• Bank has Procured market-leading API-first, micro services architecture CMS.

• First PSB to launch digital direct debit product for mandate registrations.

• Launched e-NACH registrations through Aadhaar, Debit Card & Net Banking.

• Launched IMPS collections over V-Collect significantly strengthening the B2C collections product.

11. RISK MANAGEMENT Credit Risk:

Credit Risk is the possibility of losses associated with diminution in the credit quality of borrowers or counterparties. Losses arises from outright default or reduction in portfolio value. Bank has a comprehensive credit risk architecture, policies, procedures, and systems for managing credit risk in its retail and corporate portfolio. Systems are in place to ensure credit quality and minimize default losses at front and back-end. In addition, multiple credit risk score card models are developed and used to assess different segments of customers based on portfolio behavior.

In Corporate loans, credit risk is managed by capping exposures and entry barriers based on borrower group, industry, rating grades, facility and country etc. Robust model is in place to assess industry outlook to decide the negative sector or the industry to be focused for financing. Variety of stress scenarios beyond the regulatory prescription like macroeconomic / sectoral and other trends are being adopted for stress testing of the portfolio. Bank has a conservative and prudent policy for specific provisions on NPAs as well as additional provisions beyond the regulatory prescription for standard assets. Digital lending has emerged as a convenient and quick method for customers to secure loans with just a click away. Bank has implemented appropriate measures to manage these risks effectively through proper evaluation of loan eligibility. Business Rule Engines are made robust with integration of APIs to collect information from various sources to access the risk profile of the borrower.

Sustainable Finance is Banks endeavor to enhance its portfolio from climate perspective. Some of the key industry segments which have been identified for green finance are Renewable Energy- Solar and Wind power generation, Hydroelectric power generation, Electric Vehicle and Ethanol. Banks exposure to Coal & mining segment is less than 1% of the total exposure.

Bank has maintained a well-diversified credit portfolio with no single industry having a high concentration. Short, medium and long term strategies to manage the climate risk in credit portfolio are in place.

Credit Review Framework

Bank has adopted the Credit Review Framework, which involves credit risk assessment and risk categorization of the credit proposals into Low, Medium, High risk and No-Go based upon quantified risk scoring matrices embedded in seven broad parameters namely Borrower, Promoter and Group entities, Activity/Industry, Security Coverage, Conduct of facilities, Ratings and Compliance position along with subjective risk parameters. The framework is in addition to the robust credit appraisal and risk rating of borrower, applicable for loan proposals ofRs.50 Cr and above for Corporates andRs.10 Cr and above for MSME segments.

Asset Liability Management:

Asset Liability Management allows the Bank to measure and monitor risk exposures which may arise both from liquidity and interest rate risk on its balance sheet. Asset Liability Committee (ALCO) of the Bank periodically takes a review of the assets and liabilities of the Bank.

Market Risk Management:

Market risk is the possibility of loss on account of changes in the market variables. The objective of market risk management is to assist the business units in maximizing the risk adjusted rate of return by providing analytics driven inputs regarding market risk exposures, portfolio performance vis-?-vis risk exposures and comparable benchmarks.

Operational Risk:

Bank has put in place Operational Risk Management Framework (ORMF) to ensure effective governance, risk identification, assessment and quantification of operational risk exposure. Operational risk is well managed by using appropriate qualitative and quantitative methods and established internal control systems in day to day management processes and adopting various risk mitigating strategies. The risk perceptions in various products/processes are critically analyzed and corrective actions, if required, are initiated.

Bank has put in place frameworks for Risk Control Self-Assessment (RCSA) and Key Risk Indicators (KRIs). Risk and control self-assessment is used to identify key operational risk and assess the degree of effectiveness of the internal controls. Root Cause Analysis of major operational Loss events is done to find out the modus operandi, failed controls and control gaps. Based on the findings, suitable mitigation strategies are designed such as automation of process wherever possible, reiteration of guidelines & sensitization of field functionaries for being alert to avoid such recurrences from the lessons learnt out of the event etc.

Basel III Capital Regulations:

The Basel III Capital Regulations became effective in India since 1st April, 2013 and fully implemented since 1st October, 2021. Common Equity Tier I Capital of the Bank is 13.52 %, Additional Tier I at 0.51% and Total Capital Adequacy Ratio stand at 16.44% as on 31.03.2024. Bank has adequate headroom to raise capital in all forms in case of need.

The Basel III capital rules also require an enhanced set of disclosures on the components of Capital Adequacy Ratio (CAR) which are published on quarterly basis on Banks website. Bank is also disclosing leverage ratio, Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR).

A holistic capital conservation module is developed by the Bank for monitoring and taking corrective action towards capital conservation.

12. HUMAN RESOURCE MANAGEMENT a) Manpower Position

The position of manpower in the Bank as on 31.03.2024 is as follows:

Category

Total OBC SC ST Male Female
Officers 25610 7622 4952 2013 18395 7215
Clerks 12089 3810 2615 650 7693 4396
Sub Staff 2239 530 1064 138 1932 307

Full Time Sweepers*

249 26 193 11 189 60

Total*

40187 11988 8824 2812 28209 11978

(* Domestic excluding Part Time Sweeper)

b) Recruitment Drive

Bank has inducted 1041 employees (POs:223,

Specialized officers: 407, Clerk: 387, Sub-staff: 24) during FY24. c) Welfare measures for SC/ST/OBC/PWD employees

• As per Government of Indias guidelines, reservations are provided to Scheduled Castes (SCs), Scheduled Tribes (STs), Other Backward Classes (OBCs), Economically Weaker Sections(EWS), Persons with Benchmark Disability (PwBDs) and Ex-Servicemen (EXS) candidates in Direct Recruitment. Reservations for SC/STs in promotions are provided as per Government guidelines.

• The Bank has a Chief Liaison Officer for SC/ ST/PwBD/EXS and a Chief Liaison Officer for OBC in the rank of General Manager to redress the grievances (if any) of SC/ST/OBC/PwBD/ EXS employees. A separate dedicated Cell is functioning at Corporate Office, HRM Dept. to look after the grievances of SC/ST/OBC/PwBD/EXS employees.

• Reservation for PwBD candidates has been extended in promotions from clerical cadre to officer in JMG Scale - I. d) HR Initiatives:

Launch of completely digital HRMS Portal (HR Connect): New HRMS portal, with 36 HR related modules are live and available for employees 24*7. An initiative towards a completely paperless and automated solution.

New Age Performance Management System(PMS): Aimed at periodical assessment of performance with interactive dashboard and robust Individual development plan. A digital initiative to develop performance oriented Culture. During FY24, the following initiatives have been implemented:? Role Clarity Tool 2.0, Employee Survey, PMS Profiler, Upskilling Tool, Digital KRA Library implemented? Job Family concept has been introduced to create specialized work force in 11 key banking domains

? Creation of Centres of Excellence (Indian Bank Learning Academy) at 9 centres covering all Job Families? Rewards & Recognition policy approved by Board for non-monetary performance linked awards. (For field officers up to Scale IV)

Health Care: Tie up with M/s. Practo for free online Doctor consultation for serving and retired staff members: 40846 enrolled

13. HUMAN RESOURCE DEVELOPMENT

• ELM (Enterprise Learning Management) in HR Connect was launched for seamless learning experience of employees with focus on role based targeted individual learning plans.

• Centre-of-Excellence (CoE) as per 11 job families has been approved for promoting and prioritizing development in key focus areas of the Bank and to make the in-house talent future ready in line with Banks vision. On Pilot basis, People Excellence (CoE) has been launched in December 2023 at IMAGE for HR related trainings.

• Skill gap assessment, envisaged for creating a future ready talent pool with skill sets that complement the vision of the Bank, was conducted for 6638 Officers as on March 2024.

• 3069 Training Programs were conducted in FY24 with 87538 participants (29750 unique employees)

• Bank has entered into an MOU with IIBF Mumbai for certification course on KYC-AML/ Compliance and 1314 employees have been certified during FY24.

• Competency Assessment was conducted for 356 Executives through ASCI, Hyderabad.

• Vertical-wise trainings were imparted to officers on Advanced Forex Program, Advanced Credit Program, financing High Value Agri/Horticulture & Allied Projects, IS Security Agile and Digital Adoption.

14. CUSTOMER SERVICE

Bank is launching various products & services from time to time to meet the Customer needs and to improve the level of Customer satisfaction

MODES OF GRIEVANCE REDRESSAL:

• National Helpline is available 24X7 with Toll free number 180042500000.

• Customers can lodge complaint through e-mail to customercomplaints@indianbank.co.in

• Customers can lodge complaint online 24x7 through CGRS portal.

RIGHT TO INFORMATION (RTI) Act 2005:

RTI Cell under Customer Service Department at Corporate Office is handling the applications, first appeals & second appeals. All the Applications are disposed within the stipulated timeline.

15. INFORMATION SYSTEM SECURITY

Bank believes in providing services to its customers safely and securely by keeping customer data security as the paramount goal without compromising the quality of banking services. The CIA triad of Confidentiality, Integrity, and Availability is at the heart of architecting the comprehensive information security framework. The Bank also emphasizes and implements protection from a plethora of hacktivist attempts which spans from phishing simulation, multi-factor authentication and awareness initiatives, and provides simple and secure solutions to the customers. The Key elements of the security strategy:

• Layered ‘Defense-in-Depth strategy providing multiple lines of defense across the technology layer.

• Strong framework of governance in the technology landscape is in place.

• Dedicated teams focusing on cybersecurity and fraud risk management are put in place.

• Working towards zero-trust architecture and state of art security systems.

• 24x7 monitoring and surveillance of systems by agile teams.

• Stringent security and gating controls at the time of inducting new applications or servers.

• Periodic external security assessments by CERT-In empaneled service providers to ensure confidence in the internal controls.

• The Bank is certified for ISO 27001:2013 Information Security Management System.

16. INTERNAL CONTROLS a) INSPECTION

• Risk Based Internal Audit encompasses all branches and business units.

• 1118 branches have been covered under concurrent audit covering 71.82% of domestic advances, in addition to all Specialized Verticals and select departments of Corporate Office.

• Management audit was conducted in 90 Zonal Offices, 14 FGMOs and 34 Corporate Office Departments during FY24.

• Information System Audit, Vulnerability Assessment and Penetration Testing of post amalgamation IT infrastructure including hardware, operating system, database, application(s), network, security devices and Process & People were carried out by an external audit firm during the period of review.

• Offsitemonitoringsoftwarehasbeenimplemented to raise 34 types of alerts to branches. b) FRAUD RISK MANAGEMENT: Enterprise Fraud Risk Management (EFRM):

In order to provide safe and secure digital banking journey, Bank has deployed EFRM Solution that monitors suspicious and fraudulent transactions taking place on digital channels. Currently, the EFRM is integrated with ATM, PoS, E-Com, Retail/Corporate INB, INDOASIS, UPI, AEPS, Credit Cards, CBS & Exim Bills.

Cyber Fraud Risk Management (CFRM) Cell:

To combat cybercrimes, the Ministry of Home Affairs has rolled out a dedicated cybercrime reporting portal (www.cybercrime.gov.in) and a helpline number 1930. CFRM Cell at Corporate Office is working in multiple shifts on 24x7 basis to attend the customer concerns regarding cyber frauds reported in the cybercrime reporting portal. Cyber Fraud Awareness, through regular e-mail, SMS, educational video on social media, etc., has been created amongst customers for safe digital transactions to prevent cyber fraud.

Performance for the Financial Year 2023-24 with regard to Know Your Customer (KYC)/ Anti-Money Laundering (AML) guidelines:

Bank has well defined KYC-AML-CFT (Combating the Financing of Terrorism) Policy, which is the foundation on which the Banks "implementation of KYC norms, AML standards, CFT measures and obligation of the Bank under Prevention of Money Laundering Act (PMLA) 2002".

• Bank has adopted an AML application which is capable of monitoring customers transactions from Money Laundering(ML)/Terrorist Financing (TF) perspective under the purview of 94 Red Flag Indicators (RFIs) suggested by Financial Intelligence Unit-India (FIU-IND). Additionally, the application enables customer name screening against the major sanctioned lists published by the Regulators world-wide and facilitates generation of automated AML alerts for scrutiny of transactions of suspicious nature.

• The "AML Software" generates system-based alerts on the basis of transactions in the accounts of the customers and Bank submits Suspicious Transaction Reports (STR), Cash Transaction Reports(CTR) and other mandatory reports to the FIU-IND after being satisfied about the nature of suspicion of related transaction/activity.

• Central KYC Registry (CKYCR) - In tune with RBI directions, Bank is uploading KYC data onto the CKYCR portal.

• Bank has introduced hassle-free New CIF opening process using CKYCR ID of the customers.

17. COMPLIANCE

In accordance with the Reserve Bank of India guidelines, an independent Compliance Department headed by General Manager & Chief Compliance Officer has been set up in the Bank which monitors adherence to various statutory and regulatory guidelines governing the Banks functioning.

18. VIGILANCE

Vigilance department is responsible for the vigilance administration in the Bank. It is headed by Chief Vigilance Officer (CVO), who is the Nodal Officer in respect of vigilance related matters of the Bank to liaise with CVC, GOI, RBI, CBI etc. It is functioning in a proactive manner with main focus on

• Preventive vigilance initiatives

• Suggesting systemic improvements to the Banks administration

• Close monitoring to ensure conduct and completion of vigilance-related disciplinary cases by the respective Disciplinary Authorities in line with the CVC guidelines

• Conduct of vigilance inspection of branches identified for the financial year.

• Conduct of investigation of complaints having vigilance overtone and frauds, through Field Vigilance Units/Zonal Offices.

Workshop on "Vigilance Awareness and Preventive Vigilance" was conducted at Field General Manager Offices in FY24 duly participated by officials from FGMOs, Zones and different verticals to emphasize on the importance of various preventive mechanisms.

Vigilance Awareness Week (VAW) 2023:

• VAW was observed from 31st October to 05th Nov23 on the theme "Say no to corruption, commit to the Nation". Webinars conducted with online streaming over You Tube channels which were addressed by eminent personalities from the various walks of the society.

19. SECURITY

• All the branches are equipped with Electronic Burglar Alarm systems, Fire Alarm systems and High Definition DVR / NVR based CCTV solutions. Security Inspection of branches are being undertaken with specific emphasis on high Jewel loan branches.

• 24x7 Electronic Surveillance (E-Surveillance) with centralized monitoring is implemented in Banks own ATMs, across the country.

• GPS based Tracking devices are installed in Banks Cash Vans.

• Bi-Annual Fire Audits have been conducted in all Currency Chests as per RBI Guidelines.

20. PREMISES

• Corporate Office of the Bank at Chennai is classified as Green Building with Gold Rating Status.

• Bank has implemented 93 KWP Solar Power Plant at IMAGE Auditorium, 106 KWP Solar Power Plant in Head Office / Corporate office buildings, 115 KWP Solar Power Plant in 11 branches across Chennai city and 80 KWP in other places.

• Lighting sensors have been installed in Corporate Office and Head Office buildings and Bank is planning to extend the same to all Zonal Offices/ Branches across the country.

• All the branches/offices have been provided with LED fittings

21. MARKETING:

Social Media Branding Initiatives

The Bank is proactively present on its official social media platforms viz. Facebook, X (Twitter), YouTube, Instagram, and LinkedIn to effectively leverage the product promotion besides engaging with users by sharing various achievements, commemorative events and customer facing activities. It helped the Bank to surpass its followers count by more than 2.7 million by the end of FY 24.

Automated Digital Signage (ADS) Implementation

Bank has strategically deployed 2229 ADS across potential branches and offices to keep the internal and external audience updated about its products, services, regulatory updates and cyber security aspects.

AI-Powered Chatbot

Banks website has been enriched by integrating ADYA, the AI-powered Chatbot with capabilities to address user queries round the clock using Advanced Natural Language Processing Algorithm. Guided menus are available to addresses the requests like Product enquiry, Balance Enquiry, Account Statement, Cheque Book application, Leads generation etc.

Celebration of Azadi ka Amrit Mahotsav (AKAM)

Under the flagship initiative of Govt of India "Azadi Ka Amrit Mahotsav", various public facing activities were undertaken by the Bank to reaffirm its commitment towards upliftment of downtrodden and underprivileged strata of the society. The activities include observance of ‘Meri Mati Mera Desh, planting of ‘Vatikas,salutingthe‘Veersapartfrom‘HarGharTiranga. A month long ‘Anna Sewa Abhiyaan was undertaken covering various children homes, orphanages, old age homes, cancer patients shelters etc.

22. CORPORATE COMMUNICATION: External Communication

• During FY 2023-24, the Bank initiated various activities to improve customer engagement by offering customer centric products and services; publicizing various welfare schemes of the Government and achievements of the Bank.

• The Bank utilized physical and virtual platforms to facilitate communication to various stakeholders through press conferences, meets and special interviews of Top Management on various occasions.

• Wide coverage was received from major national dailies and TV channels during various occasions such as declaration of Financial Results, Launch of products, outreach activities, Swachhata Pakhwada, CSR activities, 117th Foundation Day Celebrations etc.

• Advertisement campaigns were carried out by way of Out of Home(OOH) across major cities in the country through Trivision boards, Glow Ball Towers, LED digital screens etc

• During Azadi Ka Amrit Mahotsav (AKAM) Anchor Month, Bank AKAM Theme based advertisement were released in South Indian Language leading Newspapers, Television Channels and FM Radio

Corporate Social Responsibility (CSR):

• Banks commitment to make a positive difference in the lives of marginalized sections of the society in the country has been demonstrated through various CSR initiatives. For carrying out CSR activities the major focus areas are Inclusive Growth, Financial literacy & Enhancing Vocational Skills, Green Initiative & Environmental Sustainability reducing carbon footprints, Gender Equality & Women Empowerment and Health & wellness.

23. SPORTS

Achievement of our Employees in various fields at International/National level during the year 2023 - 24.

24. OFFICIAL LANGUAGE CELL

• Ranchi and Kolkata North Zonal Offices were awarded for Implementation of Official Language by Regional Implementation Office (Department of Official Language, Government of India).

• Special Communicative Tamil workshops were conducted for Non – Tamil Speaking Officers by IMAGE as an initiative to promote regional language.

• Conversational Booklets were prepared in Telugu, Tamil, Marathi, Gujarati, Bangla & Malayalam and distributed to staff members posted in various Zones.

26. REGIONAL RURAL BANKS (RRBs):

• The Bank has three sponsored RRBs viz. Tamil Nadu Grama Bank (TNGB), Saptagiri Grameena Bank, Puduvai Bharathiar Grama Bank headquartered at Salem (Tamil Nadu), Chittoor (Andhra Pradesh) and Puducherry (UT of Puducherry) respectively.

Business Position as on 31.03.2024

(Rs. in Cr)

S. No.

Name of RRB No. of Branches Deposits Advances Business Net Profit Net NPA % CRAR %

1

Tamil Nadu Grama Bank 663 20783 25130 45913 438 0 13.02

2

Saptagiri Grameena Bank 245 13146 12817 25963 375 0 15.85

3

Puduvai Bharathiar Grama Bank 47 1319 1340 2659 19 0 10.39
Total 955 35248 39287 74535 832 0 -

• In respect of three RRBs, the branch network has increased by 20 from 935 (March 2023) to 955 Branches (March 2024). The total business of the three RRBs wasRs.74535Cr as of March 2024 as compared toRs.64727 Cr as of March 2023 (YoY growth of 15.15%).

• All the three RRBs are profit making.

• RRBs are actively participating in PMJDY, PMJJBY, PMSBY and APY programmes of Govt. of India. The three RRBs are covering 1210 SSA villages under PMJDY and have opened 14.67 lakh accounts under the scheme. The RRBs have also covered 17.50 lakh beneficiaries under PMSBY, 8.76 lakh beneficiaries under PMJJBY and 3.40 lakhs under APY Scheme.

27. Subsidiaries and Joint Ventures Universal Sompo:

• A Consortium of credible Public & Private Corporate entities from India and Sompo of Japan as promoter - Incorporated and licensed in 2007.

• Banks shareholding is 28.52%

• Net Profit witnessed YoY growth of 9% fromRs.177 Cr in Mar23 toRs.193 Cr in Mar24.

Ind Bank Merchant Banking Services

• In the business of Stock Broking & DP

• Listed on NSE and BSE

• Banks shareholding is 64.84%. In FY24, the subsidiary registered a YoY growth of 163% under Net Profit and earned income ofRs.16.01 Cr under stock broking.

Ind Bank Global Support Services

• A Wholly Owned Subsidiary of Indian Bank, incorporated on 09.02.2024 with an authorised and paid-up Capital ofRs.10 Cr to offer comprehensive outsourcing solution for various banking operations as permitted by RBI.

• Pilot operations commenced from Chennai Office for sourcing of new customers for Savings accounts, Term Deposits, Home loans, Vehicle loans etc and Overdue collection across Retail Assets.