Punjab & Sind Bank Directors Report.

The Board of Directors has pleasure in presenting Annual Report of the Bank along with the Balance Sheet and Profit and Loss Account for the year ended 31st March 2020.

MANAGEMENT DISCUSSION AND ANALYSIS:

Economic Outlook:

Global Outlook:

Today, we are facing the threat posed by the Covid-19 pandemic, which has disrupted normal life and livelihood, accelerated a slowdown worldwide and compelled entrepreneurial spirit to withhold its urge for growth. But the determination to overcome this phase of life is what is becoming clearer amidst the crisis and that is where our thoughts take their origin from.

The World is adopting new normality i.e., surviving/living with the coronavirus pandemic to face the greatest medical-cum- economic crisis in the history. As per World Bank "COVID-19 is the most adverse peacetime shock to the global economy in a century. Demand for goods and services has been severely curtailed, while at the same time supply has fallen sharply, as the number of people working has declined and the cost of doing business has risen. The shock caused unprecedented disruptions to global trade, travel, and tourism; stress in global financial system".

As per IMF World Economic Outlook update (June, 2020), "The global economy is projected to contract sharply by -4.9% in 2020 and in 2021 global growth is projected at 5.4%. As per RBIs Monetary Policy Statement 2020-21, "The global economy is inexorably headed into recession. Green Shoots of recovery are expected in the world economy with the unlocking/opening of the economies around the world. We can expect some good recovery in the world economy in the remaining half of the year".

Domestic Outlook:

RBIs Monetary Policy Statement, 2020-21, mentions that "The combined impact of demand compression and supply disruption will depress economic activity in the first half of the year. Assuming that economic activity gets restored in a phased manner, especially in the second half of this year, and taking into consideration favourable base effects, it is expected that the combination of fiscal, monetary and administrative measures being currently undertaken would create conditions for a gradual revival in activity in the second half of 2020-21."

However, the Pandemic is also creating an opportunity for the country to become self-sustainable, global manufacturing hub and to play a crucial role in the global supply chain. To achieve this further focus on broad-based structural reforms, trading relationships, integrated infrastructure like large ports and highways, highly trained manpower, law reforms, R&D, incentives for innovation, ease of doing businesses and protecting intellectual property is required.

As per the Ministry of Finance, Macro Economic Report, June 2020. "Green shoots are visible in the economy with the pickup in GST collection in June 2020, real activity indicators like electricity and fuel consumption, inter and intra-state movement of goods, retail financial transactions etc"

The emergence of green shoots in the rural economy such as tractor sales, increase in demand for consumer durables etc. and other sectors suggests that revival is happening in the economy to some extent. The pace of the revival of the economy depends on the containment of the pandemic and quick phasing out of social distancing/lockdowns and combination of structural reforms and supportive social welfare measures.

Banking Sector:

The slowdown in the economy due to the pandemic will have an impact on the banking sector too. However, with the unlocking of the economy and measures taken by the Government of India and RBI, the economy is in a path of rebuild. To face the pandemic, focus of our Bank is on quality of assets, curtailing NPAs and mobilizing low cost deposits

WORKING RESULTS:

TOTAL BUSINESS: During the year ended 31.03.2020, total Business of the Bank stood at Rs.1,52,231.75 crore as compared to Rs.1,71,305.07 crore as on 31.03.2019.

PROFIT: The Bank recorded a Net Loss of Rs.990.80 crore for the year 2019-20 as compared to Net Loss of Rs.543.48 crore during the FY 2018-19. The Return on Assets (ROA) stood at (-) 0.91% as compared to that at (-) 0.47% in the year 2018-19.

DIVIDEND: The Board has not recommended any dividend for the year 2019-20.

CAPITAL & RESERVE: The Net Worth of the Bank stood at Rs.2917.44 crore as on 31.03.2020 as compared to Rs.3652.26 crore as on 31.03.2019.

The Capital Adequacy Ratio (Basel III) of the Bank is 12.76% as on 31.03.2020 against the minimum stipulated requirement of 10.875%.

DEPOSITS: The total deposits of the Bank stood at Rs.89667.55 crore as on 31.03.2020 as compared to Rs. 98,557.60 crore as on 31.03.2019. The average cost of deposits of the bank stood at 6.04% as compared to 6.01% in previous year.

ADVANCES: The Banks Advances stood at Rs.62564.20 crore as on 31.03.2020 as compared to Rs. 72,747.47 crore as on 31.03.2019. The average yield on Advances stood at 8.54% as compared to 8.61% during the last year.

FINANCIAL INCLUSION:

The Bank has been an active participant in promoting Financial Inclusion. The number of accounts opened, high operative accounts to total accounts, total number of Rupay cards issued and a healthy average balance maintained in the accounts point out to the strong commitment of the Bank in fostering inclusive growth.

A. Banks Status under PMJDY as on 31.03.2020:

Sl No. Parameter Status
1. Total PMJDY A/Cs 13.24 lac
2. Operative PMJDY Accounts 11.35 lac (86%)
3. Total Rupay Cards Issued 11.90 lac (90%)
4. Balance held in the PMJDY accounts 644 Cr
5. Average Balance in the the accounts Rs. 4860/-
6. Number of Over Drafts Sanctioned in the accounts 59040
7. Amount Sanctioned under the overdraft 8.53 Cr.
8. Number of Zero balance accounts 18426 (1.4%)

B. Individual Bank Mitr Model:

Bank has appointed a total of 353 Bank Mitrs in 11 states. Their operations cover the jurisdiction of 19 Zones of the Bank in providing Banking Services to rural areas where brick & mortar branches are not available. Bank has adopted individual BC Model. BCs provide basic Banking services like A/C opening, Deposit/ Withdrawal & Fund Transfer (interoperable), Balance Enquiry & Mini Statement, sourcing of GCC/KCC, FD/RD opening, sourcing of various micro insurance schemes (PMJJBY,PMSBY) along with pension schemes (APY) & helping Branches in recovery of NPA/TWO accounts etc.

Performance of Bank Mitrs:

Particulars FY 2018-19 FY 2019-20
Total Business brought by Bank Mitrs 382 Cr 385 Cr
Total No of Transactions done on Micro ATMs 10.34 lac 11.28 Lac
Total FD/RD Accounts opened 9809 10149
Total Deposit brought 266 Cr 250 Cr
No of KCC opened 2760 2898
Amount disbursed 97.06 Cr 104 Cr
No of GCC opened 145 316
Amount disbursed 2.47 Cr 6.96 Cr
No of Accounts with NPA Recovery 3083 2883
Amount Recovered 16.86 Cr 25.15 Cr

C. Awards & Achievement:

The bank was awarded by SKOCH Group for achievement in Financial Inclusion in June2019.

MARKETING, INSURANCE AND GOVERNMENT BUSINESS:

Achievement of Marketing & Insurance Department:

• Bank offers life insurance policies by way of corporate agency arrangement with following two insurance company:

• SBILIFE insurance company

• LIC of India.

• Bank has widened the product range by entering into Corporate agency arrangement with the following companies for offering General Insurance policies to customers :

I. Oriental Insurance Company Limited

II. New India Assurance Company Limited

III. Bajaj Allianz General Insurance Company Limited Achievement of HO Government Business Department:

> Bank has enrolled/sourced 1,85,324 customers under Pradhan Mantri Suraksha Bima Yojana (PMSBY) for the FY 2019-20 against 1,38,529 customers in the FY 2018-19.

> Bank has enrolled/sourced 57,289 customers under Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) for the FY 2019-20 against 41,700 customers in the FY 2018-19.

> Bank has enrolled/sourced 50,888 customers under Atal Pension Yojana (APY) for the FY 2019-20 against 38,797 customers in the FY 2018-19. The Bank actively participates in every APY Campaign organized by PFRDA.

> Bank has been awarded as the best performer in the APY Formation Day campaign among Public Sector Banks for the year 2019-20.

PRIORITY SECTOR ADVANCES:

• Banks advance to Small & Marginal Farmers stood at Rs.6246 Crore (8.30% of Adjusted Net Bank Credit) as on 31.03.2020 against the target of 8.00% of Adjusted Net Bank Credit

• Bank made advances to the tune of Rs. 1102 Crore against the target of Rs. 1200 crore under Pradhan Mantri Mudra Yojana which is 91.83% against the target.

• Bank has issued RuPay Debit Cards in 2.22 lac KCC accounts out of the total operative KCC accounts of 2.26 lac (98.23%) as on 31.03.2020

• Bank has 17 Financial Literacy Centres (FLCs) at block level in Punjab & Haryana to spread financial literacy among people. A total of 1349 camps have been organized during the 2019-20 by FLC Counsellors wherein 52720 people actively participated and were sensitized about Basic Banking Services, so that they are able to avail banking services according to their requirements.

• Banks lending to weaker sections stood at Rs.7564 crore achieving 10.04% of Adjusted Net Bank Credit as against a target of 10% of Adjusted Net Bank Credit

New Initiatives in Priority Sector:

• Bank has introduced PSB UDYAN, a product for financing development of Horticulture.

• Bank has introduced PSB KHADYAN SURAKSHA, a scheme for financing against Electronic negotiable Warehouse Receipts.

• Bank has launched PSB KRISHAK MITRA, a scheme to finance commission agents, Agri Input Dealers / Distributors.

• Relationship Officers are working in 144 specialized MSME branches to take care of various financial needs of existing MSME Customers and special helpdesk created at each of these branches for MSME Customers.

• Bank has adopted cluster-based Financing. We have 803 Branches in 268 MSME clusters and 71 Specialized Branches in 156 MSME clusters. Bank has presence in 73 Food and Agro Processing Clusters.

• Bank has created MUDRA product on PSB loans in 59 minutes portal for mobilizing small MSME loan proposals.

RETAIL LENDING:

• The Retail Lending portfolio of the Bank as on 31.03.2020 stands at Rs 16552 Crore and thereby, Retail Lending has registered a business growth of 6.00 % over the previous year (Rs15615 Crore).

• The percentage of Retail credit (Rs 16552 Cr) to Gross Advances (Rs 62578 Cr) was 26.45% as on 31.03.2020.

• The Bank has launched CenMARG (Centralized MSME And Retail Group) for centralized processing of loan proposals through Loan Origination Software. At present, CenMARG is processing loan proposals of Home loans (PSB Apna Ghar), Vehicle loans (PSB Apna Vahan) and Education Loans originating from selected 697 branches from all Metro and Urban centres and selected Semi-Urban & Rural Centres.

• The Bank has rationalized the Retail Lending products to make them more attractive and competitive. In order to generate more business in housing segment, the Bank has expanded the scope of PSB Apna Ghar upto 5th dwelling unit per family. Exposure to 3rd to 5th dwelling unit will be treated as Commercial Real Estate (CRE) exposure.

• Under PSB Utsav Mala Campaign (09.09.2019 to 31.03.2020) covering the Retail products viz. PSB Apna Ghar, PSB Apna Vahan and PSB Vyapar the Bank has sanctioned fresh loans to the tune of Rs. 1445 crore.

• The Bank has also launched PSB Performers League (PPL) as a motivational campaign to create competitive environment amongst branches and to generate more Retail Lending business during the campaign period.

ASSET QUALITY:

The bank made significant efforts to contain NPAs by employing all available tools of recovery including negotiated settlements and legal means. The Bank has also organized Recovery Camps and Auctions using the e-bikrey portal, during the year. The focused efforts resulted in the total recovery of over Rs.943.33 Cr during the year including recovery of Rs.275.53 Cr in Technically Written Off.

Bank has made earnest efforts to contain the fresh slippage. The resulting increase in the slippage is due to the meltdown of the NBFC sector. As a result our gross NPAs and net NPAs as on 31-03-2020 stood at Rs 8874.57 Cr and Rs 4684.15 Cr respectively against Rs 8605.87 Cr and 4994.23 Cr as on 31-03-2019.

The position of Gross and Net NPAs as on 31-03-2020 vis-a-vis previous year is as under;

NPA

As on 31-03-2019

As on 31-03-2020

Gross NPA 8605.87 11.83% 8874.57 14.18%
Net NPA 4994.23 7.22% 4684.15 8.03%

Progress made in the FY 2019-20

The Bank has made total recovery amounting to Rs.1987 Crore against the target of Rs.2000.00 Crore (Including recovery out of fresh NPA during the year). This amount includes recovery of Rs.275.53 Crore in Technically Written Off accounts against a target of Rs.200.00 Crore

STRESSED ASSET MANAGEMENT VERTICAL (SAMverT):

SAMverT has been set up for management of all stressed assets of Rs.25 Crore and above. The scope of the vertical is as follows:

i. Special Mention Accounts (SMA) -To monitor the SMA - 1 & 2 accounts having Balance Outstanding amount Rs.25.00 Crores and above.

ii. NPA/TWO accounts - Ensures that timely action is taken under SARFAESI Act/ RDDB Act/ Insolvency & Bankruptcy Code etc. Progress made in the FY 2019-20

In the financial year 2019-20, the SAMVert has been instrumental in recovery amounting to Rs.310.17 Crores which includes recovery of Rs.133.62 Crores in Technically Written Off accounts.

CREDIT MONITORING:

The Department has already set up a Control Room for proper and effective monitoring of large accounts, with exposure above Rs.25 Lac at HO and accounts up to Rs.25 Lac by separate Control Rooms at Zonal Offices. The Control Room maintains close followup with the zones and branches on an ongoing basis so that there is an effective management of SMA and prevention of slippage.

The Department has entered into tie-up with Credit Information Companies like CIBIL and Equifax for enhanced Due diligence. Various functionalities have been developed for easy reporting and having an effective check on revenue leakage besides bringing about Capital Conservation with the help of automation.

TREASURY & FOREIGN EXCHANGE:

• The Banks gross investment as on 31.03.2020 was Rs.24946.38 Cr with a portfolio consistent with Banks requirement, risk perception and in accordance with the investment policy.

• Bank made the highest ever profit of Rs.404.83 Cr on sale/redemption of securities with an increase of 12.97% over March 2019 profit of Rs.358.36 crores on account of active trading and redemption in G-Sec and Non SLR securities.

• The total profit of the Foreign exchange department is Rs.28.28 crores and dealing room exchange profit for the year 2019-20 is Rs.17.62 crores

RISK MANAGEMENT:

Risk appetite based budgeting was introduced in order to reduce the Risk Weighted Assets of the Bank for optimal utilisation of Capital.

Bank launched extensive range of training programmes to improve Risk Culture and redesigned frameworks, policies, procedures and instruments to detect and mitigate potential risks. The strategy was to have risk-based outlook on business, containment of operational risk, monitoring through expanded KRIs and a continuous Risk awareness building exercise.

RWAs (Risk Weighted Assets) position of the bank is as under: (Amt in Cr)

Mar 19 FY 2019-20
Q1 Q2 Q3 Q4
Credit Risk Weighted Assets 47441 47411 46306 45232 39494
Market Risk Weighted Assets 6153 5910 6499 6623 5809
Operational Risk Weighted Assets 4990 4990 4990 4990 4836
Total Risk Weighted Assets (RWA) 58584 58311 57795 56845 50139
CRAR Position (%) 10.93 11.35 11.68 12.04 12.76

HUMAN RESOURCE MANAGEMENT

The cadre wise staff strength as on 31.03.2020 is as under:

Category 31st March 2019 31st March 2020
Officers 6293 6471
Clerks 2292 2084
Sub-staff 363 307
Total 8948 8862

Women in employment: Out of the total strength of 8862 as on 31.03.2020, the women employees are 2558 constituting 28.86% of the total strength. The Bank has taken specific steps to empower its women employees and to plan their career growth. HRD Women Cell at Head Office looks after feedback/ suggestions, requests and complaints/grievances, received from women staff of the Bank.

Promotions: Bank is regularly promoting its employees almost in all the cadres every year to keep on rewarding its top performers and enabling them to assume higher responsibilities. Following promotions have been effected during the year 2019-20:-

Promotions from DGM to GM AGM to DGM CM to AGM SRM to CM MGR to SRM OFF to MGR CLK to OFF SUBSTF to CLK
Total 0 12 27 95 157 318 293 0

Training & Human Resources Development:

With a commitment to provide training to 50% of its employees during the Financial Year 2019-20, Bank conducted 216 programmes in General Banking & Computer skills at Banks Staff Training College, Delhi and the National Institute of Banking Studies and Corporate Management (NIBSCOM), jointly sponsored by the Bank along with Punjab National Bank (earlier Oriental Bank of Commerce), The Jammu & Kashmir Bank Ltd., and the Nainital Bank Ltd., 101 Locational Trainings were also conducted at Zonal Offices, in addition to a collaborative programme with an external agency, M/s JIMS Rohini (3 Batches with attendance of 133 participants) in various fields from 1st April 2019 to 31st March 2020, in which training was imparted to 2933 employees of different cadres. 351 Officers/Executives were imparted training at Apex Level Institutes (like the MDI Gurgaon, IIM Kolkata and State Bank Institute of Management, Kolkata).

Competency Mapping & Strategic Thinking and Leadership Development Programme: This FY our bank had conducted 4 Batches of Competency Mapping programme (by TISS-SVE Mumbai) for 127 Executives (DGMs-127, AGMs-58 & CMs-59). Also, Strategic Thinking & Leadership Development programme was conducted at MDI Gurgaon which was attended by 79 Executives (DGMs- 21 & AGMs-58).

Specialization Through Job Families: Bank has introduced specialization through Job families by identifying 11 (Revised) job families in which options were sought from staff members. Identified and shortlisted staff members were imparted training and accordingly are being considered for placement. Bank has added the following areas to its earlier defined 7 Job families:

1. Retail Banking

2. Inspection and Audit

3. Human Resources

4. Compliance

MoU with Centre of Excellence (CoE): In an effort to empower Persons with Disabilities, Bank has executed MoU with Centre of Excellence (CoE), SBI Foundation- the CSR arm of the State Bank of India. This year bank has conducted 2 batches of special training programme for Divyangjans (staff members).

Capacity Building for Senior Management Functionaries (Project Pragati & Project LEAD): Bank is imparting specialized apex training programmes to Scale IV & above who are identified based on residual service, experience, performance, aptitude, interest and educational qualifications. The Bank has envisaged a "three-phase training" for Executives of Assistant General Manager grade and above. The Focus is on imparting training vis-a-vis 3 levels i.e:

I. Development of Strategic Thinking and Leadership Qualities

II. Skill development in the immediate area of functioning

III. Lateral specialization in their area of interest

Industrial Relations: The Industrial relations in the Bank remained cordial throughout the year. The representatives from Workmen and Officers unions participated in various discussions on developmental and other issues with the management at various levels and efforts were made to resolve the same.

Employment to Reserved Category Employees: The Bank implements all guidelines stipulated by the Govt. of India in respect of Reservation Policy for reservation of posts in recruitments/promotions wherever required.

The Cadre wise staff strength of reserved category employees (SC/ST/OBC etc) as on 31.03.2020 is as under:

CATEGORY SC ST OBC EX-SM PWD
OFFICERS 1265 501 1561 60 214
CLERKS 498 70 524 187 54
SUB-STAFF 117 14 22 21 6
TOTAL 1880 585 2107 268 274

Corona Pandemic Initiatives: Bank has provided various relaxations/incentives to staff members who are coming and attending the office during the lockdown phase in accordance with directions given by Ministry of Home Affairs, Gol and State Government.

Equal Opportunity Policy for Divyangjan: In accordance with the provisions of the Rights of Persons with Disabilities Act, 2016 and Rules 2017, the Bank strives to ensure that the work environment is free from any discrimination against Divyangjan.

Performance of Banks Hockey Team: Our Bank is having two teams (Senior Mens Hockey Team, affiliated with Hockey India and one Junior Hockey Academy) and they are performing well in all the major events of their respective categories.

PUBLIC RELATION AND PUBLICITY

During FY 2019-20, the Bank adopted a multi-media strategy to build up its image in public. The Publicity Budget was centralized to decide proper utilization and effective control.

On the occasion of 112th Foundation Day celebration of the Bank, Promotional and cultural activities were organised at Amritsar, the founding place of the Bank. To commemorate the day, Blood Donation Camps were organized across all branches and Zonal offices.

On the occasion of 550th Birth Anniversary of Sri Guru Nanak Dev Ji, Bank arranged facilities for pilgrims. Painting Exhibition was held at Gurdwara Bangla Sahib, New Delhi, depicting the cultural, religious and historical paintings on Sikh heritage.

VIGILANCE:

PREVENTIVE VIGILANCE

Focus of the Bank is to create a safe & fearless work environment conducive to business growth with safety. This is envisaged to be achieved through putting in place a robust Preventive Vigilance Set up. Whistle Blower Policy (WBP) has been made available at all prominent places such as Banks portal to publicize it and make it popular among all concerned. Staff members are encouraged to lodge their concern under WBP if the need arises in their view.

Bank has been adhering to the extant references / guidelines of Central Vigilance Commission (CVC). Accordingly, these guidelines have been circulated among concerned functionaries that are handling disciplinary proceeding at various levels.

Vigilance Awareness Week (VAW) was observed from October 28th to November 02nd, 2019 with this years (2019-2020) central theme "Integrity - A way of life"

During this period of VAW, the Bank has organized a variety of programmes at various places across the country involving positive participation of general public at large. Numerous activities were conducted at different locations including Slogan contest, Poster Making, Essay Writing Competition, E-Rickshaw Rallies, Walkathons, Bike Rallies, Road Shows, Cyclathons, Debates, Quizes, Health Check up camps, Blood Donation Camps, Awareness through Media (FM Radio, LED (audio / Video) display at prominent Bus Stations / Depots, Morning Walks, Awareness through Mobile Vans, Elocutions competition and singing competition etc.

Nukkad Nataks were especially played at prominent places across Delhi & NCR territory. Various Rallies were organized by each Zonal Office of Bank, where a large number of students, Bank employees and public in general participated in spreading awareness of Vigilance and integrate honesty in our daily walk of life.

During the week 233 Gram Sabhas, 585 programmes in the schools, 117 programmes in the colleges were held. The staff members / customers of the Bank/ general public were encouraged to have E-Pledge through URL provided on Banks web site. Our Bank organized main function at Staff Training College, Rohini, Delhi on 01.11.2019 with participation of the top management and invitees from a cross-section of the society.

IMPLEMENTATION OF OFFICIAL LANGUAGE

The year 2019-20 was a year of achievements in terms of implementation of the Official Language. This year first prize was given to our banks Hindi magazine "Rajbhasha Ankur" and e-magazine "Rajdeep" by Delhi Bank Town Official Language Implementation Committee along with Incentive Award for Best Official Language Implementation at Head Office. In addition to this, our bank received a total no. of 12 awards in Inter Bank competitions organized by various banks under the aegis of Delhi Bank NARAKAS. Our banks branches Fraser Road Patna, Himmat Nagar (Gandhi Nagar), Durg (Chhattisgarh), Ranchi, Bhilai, Rajkot, Nagpur and Zonal Office Bareilly and Noida also received Official Language Shields from their respective Town Official Language Implementation Committees, for better work in the official language in the Banking Sector.

During the financial year 2019-20, Bank made significant progress in implementation of the Official Language Policy of Govt. of India for promoting and propagating the use of Official Language Hindi in the Bank. Implementation of Official Language was liberated from the confines of translation and promoted on the sound principles of project implementation. A total of 65 workshops were organized, in which 1125 staff members were trained. Besides this, in 403 Hindi Desk Training Programmes, 1293 staff members were imparted training for using official language and Unicode training on computers. Official Language inspections were conducted in 452 branches / offices to review the progress.

Further, in the financial year 2019-20, on Hindi Diwas attractive cash prizes alongwith shield were awarded to the winning staff- members in different competitions held at Head office.

HANDLING OF COMPLAINTS:

All the grievances/ representation(s) need to be redressed within a 14 days (presently time advised by RBI under Internal Ombudsman Policy 2018 in resolving grievance) and in any case not later than 21 days. The time given to various levels would be as follows:

a. Branch Level Resolution would be 7 days on receipt of the complaint, if Branch is unable to resolve the complaint, it will be escalated to Zonal Office.

b. The Zonal Office Resolution would be 3 days, if Zonal Office fails to resolve within given timelines or resolution would take more time than prescribed, ZO has to appraise reasons & date by which grievance would be resolved to HO Inspection Dept.

c. HO. Inspection Dept./HO. ATM Cell/HO. Pension Cell would within next 4 days apprise the competent authority and communicate decision to concerned Zonal Office/Department.