State Bank of Bikaner and Jaipur Merged Management Discussions

ECONOMIC SCENARIO GLOBAL ECONOMY

2014-15 had been a year of greater volatility and uncertainty. The decline in oil prices, adjustments in exchange rate, quantitative easing program of ECB, concerns over Greece, geo-political tension in Middle east etc., as well as concern over economic and political future of Euro area and European Union are some of the factors which were at play. The global growth in 2014 was lower than initially expected and picked up only marginally in 2014, to 2.6%, from 2.5% in 2013. The global economy is struggling to gain momentum as many high-income countries continue to grapple with legacies of the global financial crisis, while emerging economies are less dynamic than in the past.

World GDP is expected to grow by 3% in 2015 and 3.3% in 2016, supported by gradual recovery in high-income countries, low oil prices, and receding domestic headwinds in developing countries. Developing economies are expected to see an increase in growth from 4.4% in 2014 to 4.8% in 2015 and 5.3% in 2016. Lower oil prices will lead to sizeable real income shifts to oil-importing countries from oil-exporting ones.

While economic activity in the United States and the United Kingdom has gathered momentum as labor markets heal and monetary policy remains accommodative, the recovery has been limited in the Euro Area and Japan as legacies of the financial crisis linger, intertwined with structural bottlenecks. China is also undergoing a deceleration. Slower growth in other developing countries in 2014 reflected weak external demand, domestic policy tightening, political uncertainties and supply-side constraints. The impact of meek external demand was faced by emerging economies such as India where exports took most of the hit.

Some major forces driving the global outlook are soft commodity prices, persistently low interest rates, increasingly divergent monetary policies across major economies and weak world trade. The sharp decline in oil prices since mid-2014 also acted as a support to global activity and indirectly supported the growth initiatives in oil-importing developing economies.

Overall, global growth is expected to rise moderately through 2017. High-income countries are likely to see growth of 2.2% in 2015-17, up from 1.8% in 2014, on the back of gradually recovering labor markets, ebbing fiscal consolidation, and still low financing costs. In developing countries, growth is projected to gradually accelerate, rising from 4.4% in 2014 to 4.8% in 2015 and 5.4% by 2017.

INDIAN ECONOMY

The year 2014 can be construed as the year of hope and positive sentiments for the economy as the government in the centre was formed with a huge majority riding on the promises of turnaround in the overall development of the country. FIIs pumped in Rs.2.72 lakh crore into the country in 2014-15 in the form of equity and debt taking the Sensex to its record high of 30000. The overall economic scenario seemed to change from distress to a hopeful one. India’s forex reserves on the other hand touched an all time high of $339.99 billion in the week ended 20^th March 2015. The improved reserves have put the country in a much better position to tackle the probable Rupee weakness when the U.S. Fed actually starts increasing the rates, although the market seems to have already discounted this factor.

The Indian Economy is expected to grow at a rate of 7.4% in the just concluded financial year i.e., 2014-15. While the economy registered a growth of 5.7% in Q1, 5.3% in Q2 and 7.5% in Q3, the growth numbers for first two quarters were revised later to 6.5% and 8.2% respectively on account of change in the base year to 2011-12. The change in base year calculation changed the growth figures for 2013-14 to 6.9% and improved the expectations for 2014-15. The migration to 6% plus levels from the sub 5% growth has given the necessary push to the overall business sentiment.

On the inflation front, country got some respite from the soaring wholesale price index falling from 6% in Mar’14 to a negative inflation of 2.06% in February 2015. Combined CPI also saw a big fall as it came down from 8.31% in Mar’14 to 4.38% in Nov’14, however, it inched up slightly to 5.37% in Feb’15, which was way below RBI’s CPI inflation target of 8% by Jan’15 and comfortably below 6% target by Jan’16.

BANKING INDUSTRY

Current year saw low credit offtake and increasing stressed assets for the banks. Credit growth in the current fiscal could not reach double digit levels due to lower than expected demand from the industry on the backdrop of low economic growth and lower consumption. One of the reasons for muted credit growth may be attributed to the overall low business sentiment and further, the corporate opted for raising funds from the commercial paper market and overseas sources where rates are lower than base rate of Indian banks. India’s non-government external debt, as a result increased by 12% in Sept’14 over the same period previous year to touch a total of $367.48 billion. Out of the total debt ECB has a share of 35.4%.

Aggregate deposits of the SCBs showed growth of 10.9% in the current fiscal as against previous year growth of 14.1%, while advances growth stood at 9.2 against 13.9% previous fiscal. The asset quality concerns continued to build up, because of the overall trade and demand slowdown. The Gross NPAs of the SCBs increased from 4.1% in Mar’14 to 4.5% in Sept’14. The stressed assets touched a high of 10.7% in Sept’14 from 10% in March, 2014, while PSBs stressed assets stood at 12.9%.

RBI in its surprise move cut the Repo rate twice by 25 basis points each, first in January and second in March, 2015 giving cheers to the market and the industry. The SLR also stands reduced to 21.5% now, giving more liquidity cushion to banks and also to help them maintain a healthy Liquidity Coverage Ratio as per the regulatory norms. The cut was fueled by lower than expected increase in inflation in December and falling crude oil prices along with government’s commitment to adhering to its fiscal deficit target.

OUTLOOK:

RBI has, in its first bi-monthly monetary policy statement, raised its forecast for growth in 2015-16 to 7.8% as against 7.5% for 2014-15, but with a downward bias so as to reflect that the overall economic sentiment still continues to remain lukewarm and somewhat muted. On the other hand, while the Government had, in its budget, predicted a growth of 8 to 8.5% in the current fiscal, the International Monetary Fund (IMF) has projected the same to remain at 7.5%, with emphasis on reducing subsidies, implementation of comprehensive tax reforms and maintaining a tight monetary policy towards sustaining as also accelerating the growth momentum.

The FY 2014-15 witnessed a muted credit demand resulting in a single digit credit growth for the year. The deposit growth also remained relatively low. The current year may witness some revival in demand, thus leading to credit pick-up.

OPPORTUNITIES & THREATS:

Indian economy is one of the fastest growing economies in the world. The revival of growth in the current year is expected to give rise to increased demand thereby pushing up the credit growth in the system.

The advantages emanating out of a young, vibrant population and a burgeoning middle class with increasing aspirations for housing and other social amenities , coupled with more and more people joining the income earning bracket , all translate into a vast potential for the banks, which still remains partially untapped. Of late, the agriculture sector, too, has, owing to increased farm mechanisation and better remunerative prices for agricultural produce as also compensation in lieu of land acquisition, seen an upsurge in their income levels and have emerged as a big consumer class.

The rise in the infrastructure projects in the country have the ability to spur the growth cycle by way of the multiplier effect they have on overall business growth in the economy. The "Make in India" campaign being aggressively pursued by the Government is likely to bring in further domestic and overseas investment in this sector.

While there are many opportunities for the banks, especially the public sector ones, there are some inherent threats as well in the form of pressure on profitability, decline in asset quality, and increasing competition, which is driving down the margins. The banks have not only to brace themselves up and try to make the best out of the available resources, but to consistently improvise, invent and innovate for staying ahead.

RAJASTHAN ECONOMY

Rajasthan is one of the emerging states in the Indian eco-system. Rajasthan economy, though primarily agricultural and pastoral, is rising fast on the industrial map of the country. Government is initiating a variety of measures to make Rajasthan the most preferred State for investment in identified sectors and to ultimately achieve global competitiveness. The State has laid special emphasis on accelerating the overall pace of industrial growth, increasing employment opportunities, improving productivity, ensuring sustainable development and strengthening small, medium and large industries.

On an average, the state has grown at a robust 8.5% rate in the last five years (FY 2008-09 to FY 2013-14). Rajasthan is well known for its mineral endowment and tourist locations that are important contributors to its GSDP. Rajasthan accounts for a contribution of around 4.7% to India’s GDP, largely through the primary sector. The secondary and tertiary sectors are crucial for Rajasthan’s economy; together they account for around 80% of the state’s GSDP. Cement, ceramics, minerals and mining, handicrafts and tourism are key industries.

With growing industries in the state, Rajasthan is on the road to become major industrial hub in the country. Pitching for faster industrial development, government has announced some new industrial areas in the state. Rajasthan is pre-eminent in quarrying and mining in India. The state is the second largest source of cement. It is rich in salt deposits, copper and zinc. The Oil discovery in Rajasthan by Cairn India has already brought Rajasthan on the world map of Oil and Gas exploration.

In the current budget, more thrust has been given on infrastructure development of the state. Development of 14000 MW of solar energy and 26000 MW of solar park in the state and construction and renewal of 10000 km of road were some of the key points. The budget gave a number of tax sops for the consumer goods industry and the new start ups. It also gave exemption in the registration and stamp duty for sale and purchase of immovable property to the public individuals.

CORPORATE OPERATIONS

BUSINESS PERFORMANCE

The Bank crossed a milestone business figure of Rs 1.50 lac crores and reached a level of Rs 155392 crore as at end of March, 2015 as against Rs 139208 crore as at end of March, 2014, registering a growth of Rs 16184 crore (11.62 %). The total deposit increased by Rs 10364 crore (14.02 %) to reach a level of Rs 84239 crore while advances increased by Rs 5820 crore (8.91%) to reach a level of Rs 71153 crore as at end of March, 2015. The cost of deposits of the Bank decreased from 7.04% in 2013-14 to 7.01% in 2014-15, while yield on advances also decreased from 11.27% to 10.98%.

TREASURY AND INVESTMENTS

A stable government at the centre saw the 10 year yield in the range of 8.50% to 8.80% till the announcement of new 10 year benchmark, which came at 8.40% in July, 2014. Downward trend of yield started from September, 2014 in anticipation of rate cut by the RBI on the backdrop of easing inflation, declining IIP numbers and fiscal consolidation. The 10 year benchmark yield touched an intraday low of 7.64% due to rate cut by the RBI by 25 bps each in January, 2015 and March, 2015. However, due to global factors the yield moved upwards to 7.80% apprehending a rate hike in the US.

As a result of various reform measures taken by the new government at the centre, continued FII inflows and back to back rate cuts by the RBI of 25 bps each, the market scaled to new highs as positive sentiment was created on expectations from the new government and favorable inflation figures. The Sensex and the Nifty touched the historical high of 30024.74 and 9119.20 on March 04, 2015 respectively.

The Bank’s net investment increased from Rs 17750.27 crore as on 31^st March, 2014 to Rs 22465.42 Crore on 31^st March, 2015 registering a growth of 26.57%. Profit from sale of investment for the year 2014-15 rose to Rs 154.01 crore as against Rs .138.63 crore for the year 2013-14 which is an increase of 11.09%. Return on investment stood at 7.75% for 2014-15.

FINANCIAL HIGHLIGHTS

NET INTEREST INCOME

The Banks total interest income increased from Rs .8168.56 crore during 2013-14 to Rs .9005.45 crore during 2014-15, recording a growth of 10.24%. Interest expenditure increased by 13.45% to Rs .5344.78 crore, as against Rs 6064.02 crore in the previous year. The net interest income recorded a growth of 4.16% to Rs 2941.43 crore, as against Rs 2823.78 crore in 2013-14. The net interest margin (NIM) stood at 3.37% at the end of March 2015.

NON-INTEREST INCOME

The non-interest income of the Bank has increased by 5.71% from Rs .876.34 crore in 2013-14 to Rs 926.39 crore during 2014-15. The increase during the year as compared to the last year is mainly on account of increase in profit on Sale of Investment of Rs 15.38 crore and recovery in Written-off accounts to the tune of Rs 16.19 crore.

OPERATING EXPENSES

The operating expenses declined by 12.05% from Rs 2005.46 crore in 2013-14 to Rs 1763.71 crore during 2014-15. This is due to decrease in staff provisions from Rs 543.69 crore in 2013-14 to Rs 254.90 crores during 2014-15.

PROFIT

During 2014-15, the operating profit increased to Rs 2104.11 crore, recording a growth of 24.16% as against Rs 1694.66 crore in the previous year. The net profit recorded a growth of Rs 45.18 crores (6.17%) from Rs 731.69 crore in 2013-14 to Rs 776.87 crore in 2014-15.

DIVIDEND

During the year 2014-15, the Bank declared an Interim Dividend of 143% i.e. Rs 14.30 per equity share (face value of share Rs .10/- per share) which is same as the dividend of 143% i.e. Rs 14.30 per share declared in the previous year. Record date for ascertainment of entitlement of shareholders for Interim Dividend was 31.03.2015. Interim dividend may be treated as final dividend.

KEY FINANCIAL INDICATORS

The Return on Assets of the Bank stood at 0.84% during 2014-15 as against 0.87% in the previous year. The return on equity (ROE) stood at 12.92% at the end of March, 2015. The earnings per share increased from Rs 104.53 in 2013-14 to Rs 110.98 in 2014-15, while the book value per share improved from Rs 765.13 in 2013-14 to Rs 858.95 in 2014-15. As at the end of March, 2015. The capital adequacy ratio of the Bank stood at 11.69% and 11.57% as per Basel II and III norms respectively, as against 11.71% and 11.55% as per Basel II and III norms respectively, as at the end of March, 2014. This was well above the RBI benchmark of 9%. The Banks Gross NPA ratio and Net NPA ratio decreased from 4.18% and 2.76% respectively as at the end of March 2014 to 4.14% and 2.54% respectively, at the end of March, 2015. The average business per employee increased to Rs 11.00 crores during 2014-15, as against Rs 9.77 crores in the previous year. The net profit per employee remained same at Rs 6.00 lacs during 2014-15. The average business per branch increased to Rs 123.22 crore during 2014-15, as against Rs 121.26 crore in the previous year.

CREDIT MANAGEMENT

The overall credit demand remained muted during the FY 2014-15 due to overall slowdown in the economy leading to lower level of investment activity. However, the Bank continued to focus on qualitative credit growth and faster credit delivery.

Total advances of the Bank grew by 8.90% during 2014-15, as against growth of 11.72% during 2013-14.

The Bank’s Commercial & Institutional (C&I) segment advances (other than food credit) during the FY 2014-15 marginally grew by 0.38% with an increase of Rs 139 crore over FY 2013-14, whereas non C&I segment comprising personal, small business and agricultural advances grew by Rs 5765 crore (20.51%).

In the backdrop of stress in the various segments of the industry, the impetus of financing remained mainly towards top rated PSUs and other sectors such as Real Estate (RH), textiles and NBFCs etc.

In view of the prevailing competitive and stressed market scenario, closer interaction and regular meetings by the Top Management with high value customers at major centers in the country resulted in booking of several good quality advances.

PERSONAL BANKING

Personal Banking Segment continued to be the thrust area. The Bank’s retail operations recorded robust growth during the year 2014-15.

Personal Segment deposits recorded a growth of 16.60%, and increased to Rs 57462 crores as at end of March, 2015. Acquisition of new customers remained one of the focus area consequently resulting in increase of customer base by 26% with opening of 34 lac new CASA accounts during the year. The Bank’s savings account deposits also grew by 13.90% during the year to Rs 28536 Crores.

PERSONAL FINANCE

In Personal Segment lending, Bank was committed to fine tune the products and service delivery to the market expectations. Most of the prime P Segment products have undergone fine tuning in its features.

The Bank’s Home loan and Personal loan disbursements recorded a robust growth of 24.23% and 22.53%, respectively. The overall P Segment loan portfolio has grown by 18.36% to Rs 12187 Crores during the year.

Online approvals: Online in-principal approval for Home loans and Car loans have attracted good number of new customers to our fold. In-principal approvals of Rs 598.50 crores and Rs 382.70 Crore were accorded during the year for Home loans and Car loans respectively.

PRIORITY SECTOR LENDING (PSL)

Bank gives utmost importance to lending to Priority Sector and during the FY 2014-15, more than 60% of the total growth in advances is registered under priority sector. The Priority Sector Advances of Bank is 42.54% of ANBC at the end of 31^st March 2015, as against the RBI stipulation of 40%. In value terms priority sector advances grew Rs 5127 crore from

Rs 22733 crore to Rs 27860 crore during 2014-15. To meet the specific need of this sector Bank is sensitizing the operating functionaries at the branch level to give special attention to Agriculture, MSE, Education, Housing, Export Credit etc. Special thrust is also given on increasing awareness among operative staff about targets/ sub-targets and products/schemes for lending to Priority Sector.

AGRICULTURE

Lending to agriculture remained one of the major thrust areas of the bank. The outstanding level of agriculture advances increased from Rs 10962 crore as at the end of March 2014 to Rs 11927crore as at the end of March 2015.

The flow of credit in agriculture stood at Rs 9672 crore during the current financial year as against Rs 7669 crore during the last financial year. Agriculture advances constitute 18.21% of the Adjusted Net bank Credit (ANBC).

The Bank has issued 71046 Kisan Credit Cards (KCC) with sanctioned limit of Rs 1928 crore during the financial year 2014-15. The Total number of KCCs stood at 628428 at end of March, 2015.

PROGRESS UNDER FI PLAN (2013-16)

As per RBI FIP Plan (2013-16), the Bank was required to cover 3144 villages by BCs up to March, 2015. As against this, the Bank has covered 7048 villages. Bank’s Branch Network has also crossed the milestone of 1250 branches to touch 1261 branches by opening 117 branches during the year. 935299 accounts have been opened through BC channel against the target of 6,00,000.

PROGRESS UNDER PMJDY

The Bank took the PMJDY Scheme announced by the Honble Prime Minister in true spirit and 24.61 lac accounts have been opened under PMJDY, out of which 11.24 lac accounts are in rural areas and 13.37 lac accounts are in urban areas. Deposit of Rs 599.66 crore has been mobilized and 21.52 lac Rupay Debit Cards have been issued under PMJDY up to 31.03.2015.

The Bank completed the task of opening of one account per household in its allocated SSAs (Sub Service Areas) before 31.12.2014.

Rupay debit card having inbuilt accidental insurance cover of Rs. one lac and Life Cover (LIC Scheme) of Rs. 30,000/- is also available to the beneficiaries who opened their accounts for the first time from 15.08.2014 to 26.01.2015.

STATUS OF SSA COVERAGE

The Bank has been allotted 1948 SSAs (Sub Service Areas) in our Service Area in Rajasthan and in other States. Out of this, 1935 SSAs are in Rajasthan. The Bank covered all these SSAs either by opening of branches or by engagement of Corporate/ Individual BCs.

FINANCIAL LITERACY

The Bank has 9 FLCCs in its Lead Districts and till 31.03.2015, 1298 counseling camps have been organized and 91511 people counseled in such programs. Out of these, 39422 people are linked to Banking system and 1529 people have benefited with credit linkage. After launch of PMJDY, SBBJ has organised 312 Financial Literacy camps, where 16182 persons have been counseled. Our rural branches regularly meet the villagers and hold Financial Literacy Camps. Wide publicity is ensured and financial literacy material is distributed in those camps.

DIRECT BENEFIT TRANSFER (DBT)/ (DBTL)

All our branches are enabled for individual & bulk seeding of Aadhaar numbers in accounts. Our nodal branch for DBT is uploading the seeded data on NPCI mapper on daily basis. We have issued newspaper advertisements in leading newspapers to improve our Aadhaar Seeding position.

LEAD BANK SCHEME

Bank is shouldering Lead Bank responsibility in nine Districts in the State of Rajasthan viz. Bikaner, Barmer, Hanumangarh, Jaisalmer, Jalore, Pali, Sirohi, Rajsamand and Udaipur. The Bank has been implementing and monitoring the Annual Credit Plan and other developmental and poverty eradication schemes launched by the Govt. of India, Govt. of Rajasthan and NABARD. Against target of Rs 4564 crore in 9 Lead Districts for Annual Credit Plan for the year 2014-15, we have disbursed Rs 6342Crore, achieving 139% % of the annual targets.

MICRO CREDIT (SHGs)

At the end of March, 2015, the Bank has credit linked a total of 44624 Self Help Groups with outstanding amount of Rs 535.70 crore, out of which 35654 accounts are of women beneficiaries with outstanding amount of Rs 467.29crore

Ministry of Finance, Govt. of India launched a project for financing to Women Self Help Groups with the support of Anchor NGO as SHPI in 24 backward Districts of 24 States in the country, later on it was extended to 150 back ward Districts, including 109 Left Wing Extremism (LWE) districts. In Barmer District, NGO has Linked 1269 SHGs by SB Linkage and 1090 SHGs by Credit Linkage during the year against the targets of 1000 up to March, 2015.

RURAL SELF EMPLOYMENT TRAINING INSTITUTES (RSETI)

In order to impart job- oriented skills to rural unemployed youth, the Bank has set-up eight RSETIs at Bikaner, Hanumangarh, Barmer Jaisalmer, Jalore, Pali, Sirohi and Nathdwara (Distt. Rajsamand).

By the end of March, 2015, 39911 candidates have been imparted training for various local demand jobs in these institutions and by imparting skill trainings, 4795 candidates have been engaged in various jobs and 18180 candidates have started their own ventures. 9666 persons have been credit linked amounting to Rs 6589.75 lac. All our RSETIs have secured AA+/AB rating indicating overall good position.

GOVERNMENT SPONSORED SCHEMES

The Bank continued to play a pioneering role in financing entrepreneurs under various governments sponsored schemes. Under National Rural Livelihood Mission (NRLM scheme) the Bank sanctioned amount of Rs 100.53 lacs to 114 beneficiaries. Similarly, under Prime Ministers Employment Generation Programme (PMEGP) an amount of Rs 3028.99 lacs was sanctioned to 690 beneficiaries and Rs 1365.89 lacs to 4511 beneficiaries under POP.

REGIONAL RURAL BANK

Rajasthan Marudhara Gramin Bank (RMGB) has come into existence on 01.04.2014 with the amalgamation of the erstwhile Marudhara Gramin Bank (MGB), sponsored by SBBJ and Mewar Anchalik Gramin Bank (MAGB), sponsored by ICICI Bank). The Bank is playing vital role in the economy of the 15 districts of their area of operation by extending financial assistance to both priority and non priority sectors.

SBBJ continues to provide managerial support and financial assistance by way of refinance etc. to RMGB. All branches of RMGB are on CBS platform and provide Electronic Fund Transfer facility. RMGB has installed its five on site ATMs and one mobile ATM. RMGB has a deposit of Rs 6332 crore and advances of Rs 4572 crore as on 31.03.2015. RMGB recorded a net profit of Rs 90 crore.

II) MICRO, SMALL AND MEDIUM ENTERPRISES (MSMEs)

The Micro, Small and Medium enterprises(MSME) sector contributes in a big way to the growth of Indian Economy with a vast network of over 5.77 crore units, creating employment for more than 8 crore people, manufacturing more than 6000 products, contributing about 45% of manufacturing output and about 40% of exports. As on 31^st March, 2015, Banks total exposure to Micro, Small and Medium Enterprises (MSME) sector was Rs 11719 crore in more than 144000 MSME units. MSME Segment is one of the key growth areas identified by the Bank and constitutes more than 15% of Bank’s total advances. During the year, Bank has sanctioned credit facilities to more than 25804 new MSME units amounting to Rs 2555 crore. The loans upto Rs.10 lacs in SME is Rs 1424 crore.

Bank is extending collateral free loans up to Rs 1.00 crore to MSE sector under CGTMSE Scheme of Credit Guarantee Trust, which provides 50 to 85% guarantee cover on eligible MSE accounts for limit up to Rs 100 lacs. Bank has covered 3149 fresh accounts amounting to Rs 122 crore during the FY 2014-15 under CGTMSE.

GOVERNMENT BUSINESS

The Bank conducts Government Business on behalf of State/Central Government through 985 Authorized Branches. Income Tax, Central Excise, Service Tax, Value Added Tax (VAT) etc. are collected through physical chalans and also through the electronic mode. The Bank has established a Centralized Pension Processing Centre (CPPC) which calculates as well as credits pension to the accounts of pensioners across all the branches. Bank also has an online treasury Branch for online payment of salary of Rajasthan Govt. employees on behalf of the State Govt. Presently our online Treasury Branch is processing 9.75 lakh State Govt. transactions received through 18000 digitally signed files in a month. During 2014-15, the Bank has earned Rs 96.18 crore commission income from Government business.

INTERNATIONAL BANKING

The Bank provides Foreign Exchange related services to exporters/ importers, other resident and non-resident customers through a network of 69 Authorized Category "B" and 184 category ‘C’ branches and 4 Trade Finance Central Processing Centres (TFCPC).

Banks forex dealing room at Mumbai and all the authorized category ‘B’ branches are equipped with latest technology for real-time communication and are connected through SWIFT network with more than 750 offices of foreign banks throughout the world. The Bank maintains 21 NOSTRO accounts in all major currencies and non-account correspondent banking relationship with all major banking groups in the world. To facilitate NRI customers for inward remittances, there is online remittance facility and tie-up with 4 Gulf based Exchange Houses.

The Bank also undertakes proprietary Forex trading to increase profit by taking advantage of market movements. Our Merchant forex turnover stood at Rs 31186 crore at the end of March 2015, as against Rs 31678 crore for the same period in last financial year representing a marginal decrease of Rs 492 crore (1.56 %) during the year.

Our NRI deposits stood at Rs 1630 crore at the end of March 2015 as against the base of Rs 1384 crore in March 2014, registering a growth of Rs 246 crore (17.77%).

Our export credit stood at Rs 2544 crore at the end of March, 2015 as against Rs 2740 crore at the end of March, 2014, recording a marginal decrease of Rs 196 crore (7.15 %) during the financial year.

INDUSTRIAL REHABILITATION

As at end of 31st March, 2015, the Bank had 19 large sick /weak units on its books with aggregate outstanding of Rs 278.55 crore. There are 47 Corporate Debt Restructuring cases with aggregate exposure of Rs 3038.36 crore and 18 BIFR cases with exposure of Rs 343.27 crore. The Bank has been acting as BIFRs Operating Agency in 4 cases. During the year under review 8 accounts with aggregate exposure of Rs 996.28 crore have been restructured under CDR mechanism as warranted basically by the tight economic scenario.

NPA MANAGEMENT

The Bank continues with its multipronged strategy of controlling Non-Performing Assets (NPAs) through intensive monitoring of large value accounts, close follow-up with DRT/BIFR, restructuring of viable accounts and effectively utilizing the remedies available under the SARFAESI and RODA Acts. GMs, DGMs and AGMs posted at Head Office have been assigned the role of mentors of Zones / Regions and Branches to provide support and monitor the NPA level. Due emphasis has been given to follow-up with the Courts and filing of Execution Petitions. During the year, Recovery Camps, Bank Adalats and Lok Adalats were organized for NPA recovery, the results of which were quite encouraging. Recovery camps are being held in every village, every week. The progress in NPA / AUC recovery is being discussed / reviewed by the Management Committee over Video conferencing with all the Zones and DGM headed branches. The accounts in SMA / Probable NPA category are also discussed through video conferencing in addition to various foray available at the Bank to regularize the position and to avoid any account slipping into NPA. The "Loan Tracking Centers" monitor / track the irregular standard accounts from Head Office as well as Zones. Pre-emptive measures such as restructuring etc. are also under taken, as per RBI guidelines. By adopting the above measures and utilizing the provision of SARFAESI Act effectively, Bank has also received a number of acceptable compromise proposals which has resulted in good recovery in NPA. There has been an addition of Rs 1687.45 crore in NPA during 2014-15. However, there has been recovery / up-gradation to the tune of Rs 1475.09 Crore. The recovery in AUC accounts have particularly been impressive during the year under review, aggregating Rs 92.38 crore. At the end of March 2015, gross NPA ratio of the Bank stood at 4.14% and Net NPA ratio stood at 2.54%.

RISK MANAGEMENT STRUCTURE OF THE BANK

The Bank has an independent Risk Management Framework in place. At the apex level, there is a Risk Management Committee of the Board (RMCB), which oversees the policies and strategies for Risk Management in the Bank. Asset Liability Management Committee (ALCO), Market Risk Management Committee (MRMC), Credit Risk Management Committee (CRMC) and Operational Risk Management Committee (ORMC) provide support to RMCB. These sub-committees place all critical issues/ development in their respective areas before the RMCB. The Bank has Policies for identification, measurement and management of major risks – liquidity risk, market risk, credit risk and operational risk. These policies are reviewed and updated from time to time, keeping in view the dynamic business environment. Integrated Risk Management Department (IRMD) acts as the nodal centre for coordination with other departments/ operating units engaged in managing risk in their respective business areas.

RISK MANAGEMENT FUNCTION

A comprehensive Asset Liability Management (ALM) System is in place for effective management of Liquidity Risk and Interest Rate Risk, Which are identified, measured and monitored by the ALCO through the prescribed statements, viz. Statement of Structural Liquidity, Statement of Short Term Dynamic Liquidity, Statement of Interest Rate Risk Sensitivity (Traditional and Duration Gap methods), Stress Testing on Liquidity and

Earnings etc. ALCO discusses these statements in detail and takes corrective actions whenever necessary. As per the Bank’s ALM Policy, a Contingency Funding Plan is reviewed on a quarterly basis. Bank’s Benchmark Lending Rates (Base Rate and BPLR) and Card Rates for Deposits are discussed and decided by the ALCO.

Market Risk is largely managed through adherence to various policies, in the conduct of the investment and trading activities along with adherence to various risk limits like position limits, stop loss limits, Management Action Trigger (MAT) and Cut Loss Triggers (CLT) through constant monitoring of the risk positions. Scenario Analysis on market risk covering events such as decline in stock markets, rise in bond yields and foreign exchange rate movements are conducted regularly as per the Stress Testing Policy of the Bank to assess resilience of Investment portfolio.

For Credit Risk management, the Bank has a structured and standardised credit approval process which includes comprehensive credit rating of proposals. For retail loans, Bank uses a risk scoring model. In order to control the magnitude of credit risk, internal and prudential norms on benchmark, financing ratios, single borrower or borrower-group exposure, industry specific and sector-specific exposure, exposure to sensitive sectors, hurdle rate for taking a fresh exposure etc. have been set up. Credit appraisal systems and a clearly defined delegation of powers form an integral part of the Banks Loan Policy.

One of the major tools for managing operational risk is to put in place a well established internal control system, which includes segregation of duties, clear management reporting lines and adequate operating procedures. Most of the operational risk events are associated with weak links in internal control systems or laxity in complying with the existing internal control procedures. The Bank has suitable systems and procedures for managing and control of operational risks.

BASEL III CAPITAL FRAMEWORK

Basel III capital framework has come into effect from April 01, 2013 and shall be fully implemented by 2019. Accordingly, the Bank is computing Capital to Risk Weighted Assets Ratio (CRAR) as per Pillar-I of Basel III Framework. With a view to improve market discipline under Pillar 3 of Basel III framework and to improve transparency of capital base, Basel-III Disclosures have been made by the Bank in the Comprehensive Annual Report as also on Banks website.

Bank plans to move over to advanced approaches of Basel-II guidelines for Credit, Market & Operational Risks in prescribed phased manner.

RECONCILIATION OF INTER OFFICE TRANSACTIONS

As per RBI guidelines, all the entries need to be reconciled within a period of six months from the date of their origin. By the end of March, 2015, the Bank had reconciled all Inter-Branch debit transactions, originated till 28.02.2015 i.e. well before the time limit of six month prescribed by the RBI. The Bank is further committed to perform better and aim to reconcile the entries within two months period from the date of their origin.

INFORMATION TECHNOLOGY

Bank is providing hi-tech state of the art services through well established CBS platform across all the branches. Value Added Services like; multi functional ATMs, Internet Banking, Mobile Banking, flexi deposit scheme, multi city cheque facility, instant credit of local and outstation cheques, ECS facility, etc. for all type of Debit/Credit transactions in CBS, E-KYC for creation of new customers has been introduced in CBS and now customers having Aadhar number need not bring any documentary proof for opening of new accounts.

AUTOMATED TELLER MACHINES (ATMs)

Bank has installed 289 new networked ATMs during the year to take the tally of ATMs to 1843 including replacement of 42 ATMs of 7 years old/Damaged ATMs. All the ATMs are connected to the network of State Bank Group ATMs, thereby enabling more than 91.17 lac card holders of the Bank to have free of cost access to over fifty five thousand ATMs of the State Bank Group all over the country. During the year Bank has also launched one mobile ATM in the city of Jaipur. Bank has 50 Cash Deposit Machines (CDMs) at various onsite ATM kiosks and 2 Bunch Note Acceptor (BNA) machines in the Banking Halls of Branches and have been installed at on-site ATM rooms. These machines are operable through ATM-cum-Debit card and are capable of accepting cash up-to Rs 49,900/- in denominations of Rs 100/-, Rs 500/- and Rs 1000/- bills. Receipt of the deposit transaction is given to the customer and cash is immediately credited to customer’s account on real time basis.

SELF SERVICE KIOSK (SSK)

75 Self Service Kiosks (SSKs) have been installed at various branches of our Bank and customers can perform financial and non-financial transactions using State Bank ATM-cum-Debit Cards at these SSKs. The SSK solution has user friendly touch screen based customer interface

BILL PAYMENT THROUGH ATM AND INTERNET BANKING:

Bank is providing utility bill payment of Telephone bill, Mobile bill, Insurance premium, SBI Credit Card payments, fee deposit of some important educational institutions and donations to Siddhi Vinayak Temple through Internet Banking. SBBJ Instapay- A Centralized solution for almost all types of Utility Bill payments/Recharge/Donations/Insurance Premium/Magazine Subscription, where no prior registration is required has been made available.

GREEN REMIT CARD PLUS (GRC+):

Bank has rolled-out the Green Remit Card Plus (GRC+) initiative to formalize Non-Home Branch Cash Deposit transactions of small value within State Bank Group. Walk-in customers, not having bank account (e.g. migrant workers) can apply and use GRC+ card at any AB branch. Through GRC+ card they can remit cash to Beneficiary holding account with any SB Group branch, including SBI branches. It is a Magnetic stripe card mapped to a particular beneficiary’s account which will contain remitter’s name and mobile number along-with beneficiary’s name and account number. In contrast to ATM-cum-Debit card, GRC+ card is used without PIN at Green Channel Counter (GCC) at present and will be used at Cash Deposit Machine (CDMs) as well in future for Cash Deposit transactions.

ROLL OUT OF e-LOBBY

To attract the young generation & accustomed customers with latest technology driven initiatives, the Bank rolled out 10 e-Lobbies at various locations, facilitating the customers with state of art technology aided services like ATMs, Cash Deposit Machine (CDM), Self service Kiosk (having immediate fund transfer and pass book printing facility), e-Pass Book Printer, Internet Banking Kiosk, Information Kiosk, Cheque Drop-box and LED screens for customer information display. The Bank has rolled out one of the largest e-Lobby in Rajasthan state at SMS Highway Jaipur Branch.

PREPAID CARDS:

The Rupee Pre-paid Card (eZPay Card) has been launched, particularly for salaried persons and students for pocket money and scholarship payments, who undertake only one or two transactions in a month and maintain account for the purpose. The Rupee Prepaid Card (eZPay Card) is equally useful for the Corporate, who have to make various payments to their staff and vendors. The cards can be reloaded and can be used in any ATM or with any POS merchant, any number of times during their validity period.

Bank Renovates Heritage Building of SMS Highway, Jaipur

Our SMS Highway, Jaipur branch was inaugurated in May,1952 by His Highness Sawai Mansinghji, the then Maharaja of Jaipur State and is housed in a pink coloured heritage building that continues to be a masterpiece of Rajasthani architecture replete with domes and canopies. The Bank, while retaining the heritage structure in its pristine glory and royal legacy associated with the premises, has renovated/refurbished the branch. It was therefore felt befitting for the Bank to roll out/set up its first e-lobby in the premises wherefrom it embarked upon its banking journey six decades ago. Accordingly, the e-lobby and refurbished branch premises were inaugurated on 24th December, 2014 by Her Highness Princess Diya Kumari of the erstwhile royal family of Jaipur State.

Green Initiatives:

The Bank has adopted green initiatives by having installed Solar Photo Voltaic (SPV) Stand Alone Power Plants at the rooftops of its various office buildings, staff colonies and training centres , thereby not only reducing dependence on conventional lighting system but also in conserving conventional energy and fossil fuels resulting in green eco-friendly environment.

Besides, the Bank has installed Solar Power Pack of 10KW for making the 5 ATMs installed in the HO building to run on solar energy as also Solar Power Packs of 10 KW and 15 KW for fulfillment of the lighting needs of the Bank House and the Staff Colony,Jyoti Nagar,Jaipur respectively.

INTERNAL CONTROL, INSPECTION AND AUDIT

The Bank has in place a well established independent audit system and structure to ensure adequate internal control for safe and sound operations. Internal Audit is carried out under Risk Focused Internal Audit (RFIA) as envisaged under Risk Based Supervision of RBI with focus on assessment of risk on the basis of inherent business risk and internal control mechanism.

The branches have been categorized into three groups as per risk perception and are subject to varying degrees of audit. During FY 2014-2015, 775 Branches and 50 Business Process Re-engineering (BPR) centres have been subjected to Internal Audit.

CONCURRENT AUDIT

122 branches and 36 Centres/ Processing Centres (under BPR initiatives) covering 66.62% of advances and 40.11% of deposits as on 31.03.2014 (besides 12 Head Office Departments) have been placed under Concurrent Audit.

INFORMATION SYSTEM (IS) AUDIT

I S Audit of the branches is conducted as an integral part of regular Audit & Inspection. Information System Audit Cell is in place to conduct IS audit of major IT establishments, Head Office establishments including Core Banking Project, Zonal Computer Centres, etc. in accordance with Policy Document of SBI, I.T. Policy, IT Security Policy and I.S. Audit Policy of the Bank which conforms to the guidelines issued by RBI from time to time.

As at the end of March, 2015, 99.82% of the Banks branches were rated "Well Controlled" and "Adequately Controlled".

KNOW YOUR CUSTOMER/ ANTI MONEY LAUNDERING / COMBATING OF FINANCING OF TERRORISM MEASURES

Bank follows Reserve Bank of India/ Government of India guidelines on Know Your Customer/ Anti Money Laundering / Combating of Financing of Terrorism. Prescribed documents relating to the identity and address are obtained from customers while opening their accounts. The Bank has set up Anti Money Laundering Cell at the Head Office, which uses AMLOCK utility centrally listed at State Bank GITC to examine and identity suspicious transactions. The customers accounts have been divided into different risk categories and alerts are generated once any transaction exceeds a predefined threshold limit. These alerts help in identification of suspicious transactions, which are further reported to Financial Intelligence Unit, Government of India, in appropriate cases.

DEMAT SERVICES

Our Bank is providing Depository Participant Services with National Securities Depository Limited NSDL) to our customers, wherein they can hold their securities as electronic book entries and transfer securities, without actually handling physical scripts. Customers can also obtain loans against Demat shares. SBBJ is registered with NSDL as a Depository Participant.

CUSTOMER SERVICE:

Bank continues to accord top priority for improvement in Customer Service. It is always our endeavor to move from customer satisfaction to customer delight.

At the Top Management level, meetings of the Customer Service Committee of the Board and Standing Committee on Customer Service are convened at regular intervals to review the position of customer service rendered. Similar Committees are also functioning at Branches, Zonal and Regional Offices, which help in continuous improvement in service standards.

The Bank is a member of the Banking Codes and Standards Board of India (BCSBI) and has voluntarily adopted a Code of Banks Commitment to Customers’. Bank is committed to provide services of highest order in a transparent manner. Awareness Camps are being organized from time to time in co-ordination with BCSBI.

CUSTOMER GRIEVANCES REDRESSAL MECHANISM:

The Bank has put in place a multi pronged grievances redressal mechanism to suit varied customer requirements. An aggrieved customer can either make a written complaint at branch / regional / zonal / head office of the Bank or make an online submission in the form provided on the Banks website / through e-mail against acknowledgement.

The Banks Customer Redressal System, "SMS Unhappy", facilitates customers to air their feedback / grievances through the process of a simple SMS message. On receipt of the message, the Banks dedicated Happy Room staff calls back the customer for the purpose of grievance redressal. This has reduced complaint resolution time drastically, to below 48 hours, ensuring enhanced customer satisfaction levels.

DISCLOSURE OF COMPLAINTS/UNIMPLEMENTED AWARD OF BANKING OMBUDSMAN:-

In terms of RBI circular DBOD.No.Leg BC.60/09.07.005/2006-07 dated 22.02.2007, the information in respect of customer complaints and awards passed by the Banking Ombudsman is given in the table below :-

A. CUSTOMER COMPLAINTS

(a)	No. of Complaints pending at the beginning of the year	107
(b)	No. of Complaints received during the year	7574
(c)	No. of Complaints redressed during the year	7676
(d)	No. of Complaints pending at the end of the year	5*

B. AWARDS PASSED BY THE BANKING OMBUDSMAN

(a) No. of un-implemented Awards at the beginning of the year	3
(b) No. of Awards passed by the Banking Ombudsman during the year	7
(c) No. of Awards implemented during the year	8**
(d) No. of un-implemented Awards at the end of the year	0

(* Excluding 2 cases where appeal allowed and award passed by BO set aside by the Appellate Authority)

RIGHT TO INFORMATION

Bank has always complied with the provisions of the Right to Information Act, 2005. We ensure that that information sought through RTI applications is provided efficiently and effectively in a time bound manner as per the provisions of the RTI Act, 2005. The appeals are also redressed timely, while complying with the directives of the Honble Central Information Commission (CIC) in this regard.

In financial year 2014-15 up to 31.03.2015, the Bank received 1667 applications under the RTI Act, 2005, out of which 1632 applications were disposed off and 35 applications were awaiting disposal as on 31.03.2015.

In financial year 2014-15, up to 31.03.2015, the Department also received 108 appeals under the RTI Act, 2005, out of which 108 appeals were disposed off as on 31.03.2015.

BUSINESS PROCESS RE-ENGINEERING

Business Process Re-engineering (BPR) initiatives stabilized further during 2014-15 and their coverage was extended to more branches. Bank operates 12 city-centric loan CPCs, viz. Retail Assets Central Processing Centre (RACPC)/ Small & Medium Enterprises City Credit Centre (SMECCC)/ Retail Assets and Small & Medium Enterprises City Credit Centre (RASMECCC) having end-state at 11 centres with 301 branches linked to them. Coverage of Rural Central Processing Centre (RCPC) was increased to 428 branches at 21 centres.

Non loan CPCs/initiatives viz. Liability Central Processing Centre (LCPC), Trade Finance Central Processing Centre (TFCPC), Currency Administration Cell (CAC), Central Pension Processing Cell (CPPC), Clearing CPC (CCPC), Multi Product Sales Tead (MPST), Relationship Manager- Personal Banking (RMPB), Housing Loan Sales Team (HLST) have helped in further improvement of customer service.

CURRENCY MANAGEMENT

Owing to our Bank having the highest market share in Rajasthan, RBI has designated our Banks 199 branches as Currency Chest branches in the state and 12 Currency Chest branches in other parts of the country. All our Currency Chest branches are undertaking the activities prescribed by RBI in an efficient manner.

CROSS SELLING

The Bank continues to market life and non-life insurance, mutual fund and credit card products to provide a full bouquet of financial products to its customers and augment its non interest income. The bank earned a total income of Rs 25.30 Crores from cross selling activities during financial year 2014-15.

COMMUNITY SERVICES BANKING

As a responsible Corporate Citizen, the Bank undertakes various community based social activities to serve the community at large. These include tree plantation, free health check up and blood donation camps, establishing of water huts and water coolers, sponsoring prizes/ kits for sports competitions, honouring meritorious students etc. The major CSR initiatives under taken by the Bank during the year are as follows:

• Extended financial support for construction of 404 toilets for girl students across various Government schools including 362 toilets in schools located in Rajasthan.

• Ambulances were provided to three hospitals – Global Hospital and Research Center (Mount Abu), Bharat Sevashram Sangha (Pushkar) and Carewell Hospital (Jaipur).

• Installation of a Solar Plant at " Akshaya Patra Foundation" for their kitchen which has been providing free Mid-day meals to more than 1,50,000 children in 1436 Government schools, in Jaipur.

• Provided a Tiger Rescue Van to Ranthambhore Tiger Reserve for transporting wounded and sick animals to rescue centres.

• Donated a school bus to Rajmata Gayatri Devi Bal Niketan in Jagga Ki Bawri village near Jaipur for ferrying 300 poor children from nearby villages.

• Donated a Mobile Blood Donation Van to Kota Blood Bank Society, committed for free care of thalassemic children and creating awareness about voluntary blood donation.

• Financial assistance to Armed Forces Flag Day Fund as also honouring war widows at Sikar through Sainik Board.

• Branches of the Bank continue to adopt one girl child each from poor families with an objective of providing financial assistance to them for pursuing their studies in Government/ Municipal schools.

BRANCH EXPANSION

During 2014-15, the Bank opened 117 branches including 32 branches in unbanked rural centres in Tier V and VI.

As on 31.03.2015, the total number of branches of the Bank stood at 1261, the geographical distribution there of being as under:

Rural	Semi Urban	Urban	Metro	Total
478	312	236	235	1261

The Bank continued to maintain its dominant presence amongst all other banks in the State of Rajasthan with a network of 1013 branches in the state as on 31.03.2015, with 762 branches located in rural and semi urban areas and play a pivotal role in the socio-economic development, alleviation of poverty and resultant overall uplift of the masses in the State.

HUMAN RESOURCE DEVELOPMENT

As on 31.03.2015, the Bank had a staff strength of 13238 employees, with the following break up: -

	AS ON 31.03.2015				OUT OF WHICH
STAFF CADRE	SC	ST	GENERAL	TOTAL	WOMEN	MINORITY
OFFICERS	1089	528	3658	5275	692	349
CLERKS	869	550	3330	4749	870	292
SUB-STAFF	355	245	1812	2412	121	108
SAFAI	637	26	139	802	236	7
KARAMCHARI
TOTAL	2950	1349	8939	13238	1919	756

Out of the Bank’s total staff strength as on 31.03.2015, 2950 (22.28 %) belong to SC and 1349 (10.19 %) to ST categories which is well above the required percentage. A SC/ST cell with objective to safeguard interests of SC/ST employees is also well in place. Reservation policy is implemented in our Bank as per Government guidelines.

Necessary complement of staff has been made available for working in new frontiers like core banking solution, tele-banking, internet banking, ATMs, credit / debit cards, marketing, cross selling, business process re-engineering etc. The Bank has been according high priority to training and sensitization of staff members to respond to the customers’ expectations and deliver modern banking facilities in the technology-driven environment."

Human Resources are the most essential constituents of an organization and their progressive development is a major corporate concern. In order to bring in proper integration of human resources management strategies with the business strategies, various training programmes in-house and at Apex Training Institutes are arranged.

A total no of 8443 employees of all categories, including 898 employees of the sponsored RRBs, were provided training on various subjects related to banking and technology at Staff Training Centres of the bank during the year. The Bank has also provided pre-promotion training to 268 SC/ST clerical candidates, eligible for promotion to officer cadre Group A / B & NIL SC /ST sub-staff candidates eligible for promotion to clerical cadre during the year.

Special Programmes / Workshops were also arranged during the year:

• A Management Development Programme (MDP) by Poornima Group of Colleges (affiliated to Rajasthan Technical University & approved by AICTE) for 37 AGMs / Controllers.

• MDP on "Enhancing Performance through Motivating Self and Others" for 39 AGM Branch Heads by the Asian School of Business Management, Bhubaneshwar.

• Programme "Plan your second innings" focusing on wealth management and health management for retiring officiers upto the level of Scale V is arranged to realign the participants to the post-retirement scenario.

• An Advanced Leadership Development Programme for our GMs and DGMs was conducted by IIM Kolkata at STC,Jaipur.

• A five day Intensive Credit Management programme for 63 senior credit officers of the Bank was held at ILD, Jamdoli, which was facilitated by our present and retired top management functionaries.

In addition to this 21 seminars / workshops were conducted on various burning issues to up-date employees.

During the current financial year, we have deputed 02 officers for specialized training programme on leadership for excellence in Banking and Finance at Frankfurt School, Germany which was conducted at NIBM Pune and at Frankfurt School, Germany.

The Bank also launched ‘Aarohan’ program, which has been especially formulated and rolled out to improve the overall efficiency of the employees and make employees more professional.

STAFF WELFARE

The Bank believes in keeping the morale and motivation of the employees high, considers employees as its most important assets and accords high priority to their welfare.

The Bank undertook following staff welfare activities

1. Granting of Scholarship to the meritorious wards of the employees,

2. Providing free medical consultancy services at various hospitals.

3. Insurance cover for employees to the extent of Rs. 8.00 lac (Rs. 16.00 lac for accidental death) under Group Insurance scheme of SBI Life.

4. A total amount of R. 3.00 lac outstanding in various loan a/cs viz. Housing Loan, Overdraft limit (Personal loan), PF Loan, Conveyance Loan is allowed to be waived for employees who die in harness.

5. A one-time award of Rs. 10,000/- for education to one ward of the deceased employee is also paid.

6. Reimbursement of Funeral Expenditure is being made to the extent of Rs.10000/-from staff welfare fund for both serving and retired employees.

7. For employees who are on leave for debilitating sickness and are on loss of pay, an amount of Rs. 15000/- per month (upto 24 months during the entire service period) is paid.

8. The Bank has set up Holiday Homes at Jaisalmer, Chandigarh, Mussoorie, Jaipur, Manali, Mumbai, Goa, Delhi, Haridwar, Katra, Bengaluru, Mt. Abu, Vrindavan, Udaipur, Kota, Kochi, Jodhpur and Puri. This facility is also available for retired employees.

9. Various cultural and sports activities were organized during the year.

INDUSTRIAL RELATIONS

The Bank has a long history of harmonious and cordial relations with both supervising as well as workmen employees enlisting their total commitment, support and cooperation. The Employee’s Union and Officers’ Association have extended their wholehearted cooperation for the all-round growth of the Bank. A well established and ongoing consultative machinery is functioning at various tiers of the administration for resolving issues through joint consultations and negotiations.

VIGILANCE ADMINISTRATION

Vigilance Administration is an integral part of the managerial function in the Bank. The main focus of vigilance activity is generally to detect the symptoms of procedural/ Systemic failures in a particular part or organization as a whole. Thus, vigilance works against any possible abuse/ misuse of power and exercise of discretion which might otherwise cause loss to the organization. Taking commercial risk is part of any banking business. As such, the purpose of vigilance activity in the Bank is to enhance the level of managerial efficiency in the Bank, both at micro as well as macro level.

Preventive Vigilance training programmes have been conducted to improve skills of the staff. Further, session on the preventive vigilance have been slotted in other training programmes as well. Thus, the training platform of the Bank has been used effectively to create awareness amongst all officials about Vigilance function, areas of concerns where officials need to pay more attention, nature of fraud/ serious irregularities taking place, determination of vigilance angle and how bonafide actions of the officials can be protected.

Preventive Vigilance Committees have been set up in the branches having staff of 10 or more and all the processing centres irrespective of the staff strength, unsatisfactory rated branches and fraud prone branches. Meeting of preventive vigilance committees are held regularly where staff is sensitizd towards various preventive vigilance measures. Minutes of these meetings are processed and suggestions for improvements in this regard are circularized.

An in-house magazine titled as "Vigilance Bulletin" is published every quarter with an objective to create vigilance awareness amongst staff. Many new initiatives have been taken as preventive measures like Biometric login system, Electronic Voucher Verification, Online tracking of status of loan application by the applicant, better pre-sanction due diligence process etc. Scheme of Recognition & Alertness Award for the staff in respect of detection and foiling of frauds is available.

Complaints received in the Vigilance Department have been processed expeditiously and wherever required investigations have been conducted. The Bank has an independent Internal Advisory Committee for determination of Vigilance angle or otherwise in staff accountability matters. Whistle Blower Policy has been implemented in the Bank whereby any staff member can provide information to the Chief Vigilance officer on any malpractices or instances of misuse of officials powers where the identity of informer is kept secret. The department has disposed of 263 complaints, 94 Investigations have been conducted and 45 preventive vigilance inspections were conducted. 92 disciplinary cares having vigilance angle have been concluded during the year 2014-15.

USE OF HINDI

The implementation of Official Language Policy in the Bank is not only a statutory requirement but also a business need. The Bank made all possible efforts to comply with the statutory provisions relating to the official Language Policy of the Govt. of India during the year and took several initiatives to provide benefit of Banks different schemes to the masses through Hindi Language.

During the year 2014-15, the Bank made significant progress in promoting and propagating the use of Official Language and ensured compliance of various other statutory requirements framed under the Official Language Act /Official Language Rules. The Bank made all possible efforts to achieve the targets set by Official Language Deptt. Ministry of Home affairs, Govt. of India.

Bank continued its efforts to promote use of Hindi in the field of information Technology. Various useful materials like Hindi typing tool, format of Quarterly Progress Report, Annual Programme etc. were made available on the portal of Rajbhasha Vibhag. Officers/employees were imparted desk training to work on computer in Hindi with the help of Unicode.

Banks quarterly in House Rajbhasha magazine "Upwan" is being published regularly. Since last two consecutive years this magazine had been awarded consolation prize by the Reserve Bank of India. Our Patna Regional Office has been awarded second prize by Implementation Office(East) Official Language Department,Ministry of Home Affairs,Govt.of India. The said prize was handed over by Shri Keshri Nath Tripathi, Governor of Bihar. Representatives of Govt.of India also inspected our Regional Office, Ahmedabad,Patna and Rewari branch and appreciated our efforts. TOLIC Kota,Bank TOLIC Jodhpur and Jaipur awarded our Bank for official language implementation.

AUDIT

State Bank of India, with the concurrence of the Reserve Bank of India, approved the appointment of 4 firms of Chartered Accountants viz. M/s M.K. Agarwal & Co. of Delhi, M/s Chaturvedi & Co. of Kolkata, M/s Uberoi Sood & Kapoor of Delhi and M/s PSD & Associates of Jaipur as the Statutory Central Auditors of the Bank for the year 2014-15. During the period under review, the scope of audit covered 742 branches/ centralised processing units as against 664 branches/ centralised processing units covered in 2013-14.

RESPONSIBILITY STATEMENT

The Board of directors hereby states:

1. That in the preparation of the annual accounts, the applicable Accounting Standards have been followed alongwith proper explanation relating to material departures;

2. That they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Bank as on the 31^st March, 2015, and of the profit or loss of the Bank for the year ended on that date;

3. That they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Banking Regulation Act, 1949, and State Bank of India (Subsidiary Banks) Act, 1959 for safeguarding the assets of the Bank and preventing and detecting frauds and other irregularities; and

4. That they have prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE

The details on Corporate Governance are annexed.

ACKNOWLEDGMENT

The Board of Directors is grateful to the valued customers, esteemed shareholders and the public at large for their patronage and confidence reposed in the Bank and places on record its deep appreciation. The Board of Directors thanks the Government of India, State Bank of India, Reserve Bank of India and other regulatory agencies for their valuable support and guidance throughout the year.

The Board of Directors places on record its deep appreciation of the commitment, sense of involvement and dedication exhibited by each staff member and constructive role played by the Employees’ Union and Officers Association in the overall development, growth and prosperity of the Bank.

	For and on behalf of the Board of Directors
Place :Mumbai	Jyoti Ghosh
Dated :06th May,2015	Managing Director