State Bank of Travancore Merged Management Discussions

MANAGEMENT DISCUSSIONS & ANALYSIS

1.1 Global Economy

Global economic activity remained subdued during the FY16. While, there was a modest recovery in advanced economies, the growth in emerging markets and developing economies (which accounts for over 70% of global growth), declined for the fifth consecutive year. The International Monetary Fund (IMF) in its April, 2016 World Economic Outlook update has estimated the Global growth at 3.10% for the calendar year 2015. It has projected a Global growth at 3.20% for 2016 and 3.50% for 2017. Growth in advanced economies is projected at 1.9% in 2016, and a modest improvement to 2.0% in 2017. Growth in United States is expected to remain resilient owing to easy financial conditions and strengthening of housing and labour markets. Growth in the euro area is expected to improve due to stronger private consumption supported by lower oil prices and easy financial conditions. Growth in Japan is also expected to consolidate in 2016, on the back of fiscal support, lower oil prices, accommodative financial conditions, and rising incomes.

The picture for emerging market and developing economies is diverse but in many cases challenging. The slowdown and rebalancing of the Chinese economy, lower commodity prices and strains in some large emerging market economies will continue to weigh on the growth prospects in coming years. The recovery is projected to grow at a modest pace in the next two years, despite the ongoing slowdown in China, driven primarily by emerging markets, developing economies and improvement of growth rates in economies currently in economic distress, notably Brazil, Russia, and some countries in the Middle East.

However, the prolonged fall in commodity prices, particularly crude prices will continue to keep risks elevated for emerging markets.

1.2 Indian Economy

The Indian economy is the seventh largest in the world by nominal Gross Domestic Product (GDP) and the third largest by Purchasing Power Parity (PPP). The long-term growth prospective of the Indian economy is positive due to its young population, corresponding low dependency ratio, healthy savings and investment rates, and increasing integration into the global economy. India has one of the fastest growing service sectors in the world with annual growth rate of above 9%.

The Indian economy has continued to consolidate the gains achieved in restoring the macroeconomic stability with decline in inflation, fiscal deficit and the current account deficit, thus rendering India as a relative haven of macro stability in these difficult times.

The economic growth appears to be recovering, albeit at varying speeds across sectors. The GDP for the current FY16 is estimated to improve to 7.60% from 7.20% in FY15. At the sectoral level, the growth rate for agriculture & allied sectors, industry and services sector for FY16 are estimated to be 1.1%, 7.3% and 9.2% respectively. Industrial production remained subdued with decline in manufacturing activity in recent months. Nonetheless electricity generation remained resilient and is expected to sustain its performance backed by thermal supplies. Services sector activity expanded steadily through the year, with trade, hotels, transport, communication, public administration, defence and related services turning out to be the main drivers. The construction sector continues to be saddled with unsold inventory in the residential space, although commercial real estate is being boosted by demand from information technology (IT) and IT-enabled services. Agriculture and allied activities output moderated due to decline in kharif production during the year. However, the prospects of above normal monsoon in 2016 will provide enough boost to the economy. Merchandise exports shrank by 15.9% in FY16 to $261.1 billion amid weak overseas demand, a slump in commodity prices and currency volatility. Reflecting a slowdown in the domestic economy, especially in the manufacturing sector, the goods imported contracted by 15.3% to $379.6 billion. The trend of falling exports is in tandem with other major world economies.

Inflation remains under control. The Consumer Price Index (CPI) has fluctuated around 5% to 5.50%. Going forward, CPI inflation is expected to decelerate modestly and remain under 5% during most of the FY17.

Indian economy is now on the threshold of a major transformation, with expectations of policy initiatives by Central government and RBI. The economy is on the road to recovery due to positive business sentiments, improved consumer confidence, controlled level of inflation and lower fiscal deficit.

1.3 Kerala Economy

Kerala is known for its high quality of human development which is getting enhanced at a significantly higher pace in recent years as against the rest of the country. With both urban and rural areas of Kerala reporting asset holdings much higher than all India average, the state is ranked among the top three Indian states.

Gross Value Added (GVA) growth rate (base year 2011-12) in FY15 is estimated to be 6.20% as compared to 4.34% in FY14. During FY15, the contribution from primary, secondary and tertiary sectors to the Gross State Value Added (GSVA) at constant prices (2011-12) was 12.15%, 25.11% and 62.74% respectively. Tourism and remittances from abroad, continue to play an important role in the growth of Kerala’s economy. The last two decades have seen a boom in Tourism sector in Kerala. Currently the contribution of Tourism to the Kerala economy is over 10%. Recognizing the importance of infrastructure, the State has during the last four years given a thrust to major projects like the Kochi Metro, Vizhinjam Port and Kannur Air Port. These projects are expected to bring about major transformation in the State economy. The framework for the development of the Kerala Perspective Plan 2030 has also been conceived in terms of innovation-embracing entrepreneurs at the centre of the economy, with eight pillars of institutional elements, infrastructure, health and primary education, quality of higher education, labour market efficiency, development of financial Sector, technological readiness and innovation built on the foundational elements of environmental sustainability and social sustainability. This will boost Kerala’s competitiveness and improve its future economic outlook. In short, the overall economic environment is conducive to generate good business, particularly on credit side, in the upcoming year.

1.4 Banking Environment

The resilience and stability of the domestic financial system have become essential to the country’s macroeconomic stability, particularly in an increasingly integrated world. The Indian banking system is resilient enough to face any adverse economic situation. The sector has passed the financial crisis without any copious impact on the banks’ balance sheet, which was mainly due to strong regulations and less exposure to the global economy. However, at present the Indian banking system is undergoing a critical phase, with high level of NPAs, need for additional capital for expansion, etc. In a view to build a robust and resilient financial system, RBI has taken a number of steps in 2015-16. Some of them are stringent capital and liquidity measures for Commercial Banks and steps to build up Capital Conservation Buffers (CCB) and implementation of the Liquidity Coverage Ratio (LCR). Additionally, the Net Stable Funding Ratio (NSFR) is scheduled to be implemented from January 1, 2018, which will require banks to maintain a stable funding profile in relation to the composition of their assets and ofi-balance sheet activities.

RBI has also asked banks to implement marginal cost-based lending rate (MCLR), from 1st April, 2016, to benchmark the lending rate for the new borrowers. The banks have implemented the MCLR and it is about 5 to 65 basis points lower than banks’ base rate. MCLR is expected to improve transparency in the methodology followed by banks for determining interest rates on advances.

In FY16, the growth rate of deposits and advances of the banking system have declined. Growth in Aggregate deposits of the banking system declined to a historic low of 9.9% in FY16 (for the fortnight ended 18 March,16), compared to 10.7% in FY15 (fortnight ended 20 March, 15). While, credit grew at a higher rate of 11.3% in FY16 (18 March, 16), compared to 9.0% in FY15 (20 March, 15), the incremental lending during the financial year has been mostly to the personal loan segment.

In a move to increase financial inclusion in the country, RBI has issued a total of 23 new banking licences (2 Universal Bank, 11 Payment Bank and 10 Small Finance Bank) in 2015. This may increase competition for deposits and remittance business. Against this backdrop, FY17 will be a challenging year for the banking sector. The key focus areas for the Indian banks would include liquidity management, gainful deployment of funds, maintaining asset quality, improving Capital adequacy, Strong Risk Management and increased use of technology to drive business and improve profitability. Financial inclusion and talent management would also require greater focus.

1.5 ASCB Performance

All Scheduled Commercial Banks’ (ASCB) Deposits grew by Rs. 7,93,010 crore (9.24%) between 20th March, 2015 and 18th March, 2016 to reach Rs. 93,78,650 crore as on 18th March, 2016. The Gross Advance grew by Rs. 7,12,968 crore (10.86%) in the same period to touch Rs. 72,77,648 crore. Food credit increased by 11.48% to Rs. 1,05,254 crore. Non Food credit grew by 10.85% and reached the level of Rs. 71,72,394 crore.

1.6 Regulatory Measures and Monetary Policy

The year 2015-16 witnessed a series of monetary measures initiated by Reserve Bank of India to contain rising inflation and arresting the weakening of rupee. Further, liberalisation in the Branch Authorization Policy and adoption of more stringent security measures for electronic payment system were announced. RBI issued 6 Bi-monthly Monetary Policy statements during the year under review, in April, June, August, September and December, 2015 and in February, 2016. Some of the main policy changes and reforms announced by RBI are as under: Repo rate under the Liquidity Adjustment Facility (LAF) has been reduced by 25 basis points from 7.5 per cent to 7.25 per cent from June 02, 2015 and further by 50 basis points from 7.25 per cent to 6.75 per cent from September 29, 2015.

• Cash Reserve Ratio (CRR) of Scheduled Commercial Banks has been maintained at 4.0 per cent of Net Demand and Time Liability (NDTL).

• Increased liquidity provided under 7-day and 14-day term repos.

RBI vide circular dated 23.04.2015 has issued guidelines revising Priority sector norms. The salient features of the guidelines are as under:-

• Categories of the priority sector: Medium Enterprises, Social Infrastructure and Renewable Energy will form part of priority sector, in addition to the existing categories.

• Agriculture: The distinction between direct and indirect agriculture is dispensed with.

• Small and Marginal Farmers: A target of 8 percent of ANBC or Credit Equivalent Amount of Ofi-Balance Sheet Exposure, whichever is higher, has been prescribed

• Micro Enterprises: A target of 7.5 percent of ANBC or Credit Equivalent Amount of Ofi-Balance Sheet Exposure, whichever is higher, has been prescribed for Micro Enterprises, to be achieved in a phased manner i.e. 7 percent by March 2016 and 7.5 percent by March 2017.

• There is no change in the target of 10 percent of ANBC or Credit Equivalent Amount of Ofi-Balance Sheet Exposure, whichever is higher, for Weaker Sections.

• Bank loans to food and agro processing units upto an aggregate sanctioned limit of Rs. 100 crore per borrower from banking system will form part of ancillary activities under Agriculture.

• Export credit: Export credit up to 32 percent of ANBC or Credit Equivalent Amount of Ofi-Balance Sheet Exposure, whichever is higher, will be eligible as part of priority sector for foreign banks with less than 20 branches. For other banks, the incremental export credit over corresponding date of the preceding year will be reckoned up to 2 percent of ANBC or Credit Equivalent Amount of Ofi-Balance Sheet Exposure, whichever is higher.

• The loan limits for housing loans and MFI loans qualifying under priority sector have been revised.

• The priority sector non-achievement will be assessed on quarterly average basis at the end of the respective year from 2016-17 onwards, instead of annual basis as at present.

2. The Bank’s operations and performance

2.1 The Bank continued the process of consolidation during FY 2015-16. While, there were not much greenfield investment happening in the corporate sector and with the credit ofi-take not picking up to the expected levels, concerted efforts were made to reduce interest expenditure and thereby to improve the operating profit. Conscious efforts were made to reduce Bulk deposits, high cost deposits and borrowings to reduce interest expenditure and thereby improve Net Interest Income. The bulk deposits (including CDs) have come down by over Rs. 2,613 crore during the year, and consequently the bulk deposit ratio has come down from 13.24% as on fi1st March, 2015 to 9.34% as on 31st March, 2016.

This, together with improvement of CASA and lowering of interest rates on deposits has resulted in the cost of deposits coming down from 7.32% as on 31st March, 2015 to 6.94% as on 31st March, 2016.

2.2 Total Business

The Total Business of the Bank stood at Rs. 1,68,123 crore as on 31st March, 2016 against Rs. 1,60,984 crore as on 31st March, 2015. It comprises of Total Deposits of Rs. 1,01,119 crore and Gross Advances of Rs. 67,004 crore.

2.3 Working results and Operating Profit

The Operating Profit for the year ended 31st March, 2016 grew by 31.06% from Rs. 1,372.16 crore as on 31st March, 2015 to Rs. 1,798.33 crore as on 31st March, 2016. The Net Profit for the year stood at Rs. 337.73 crore as compared to Rs. 335.53 crore for FY 2014–15. The earnings per share (face value of Rs. 10) was Rs. 47.50 as on 31st March, 2016 as against Rs. 56.63 as on 31st March, 2015.

2.4 Dividend

The Bank declared a dividend of Rs. 5 per equity share of face value Rs. 10 each for the year (previous year dividend Rs. 5 per equity share) to the shareholders, entailing a total payout of Rs. 35.55 crore. The dividend payout Ratio works out to 10.53% of Net Profit.

2.5 Capital and Capital Adequacy

During the year, the Bank has allotted 1,18,50,694 equity shares of Rs. 10 each fully paid up for cash at a price of Rs. 400 including a Premium of Rs. 390 per equity share aggregating to Rs. 474.03 crore on Rights basis to the existing equity shareholders of the Bank in the ratio of 1(One) fully paid-up equity share for every 5(Five) equity shares held as on Record Date i.e. 04th March, 2015. The Bank made the allotment of the equity shares on 13th April, 2015 against the share application money held as on 31st March, 2015.

The Bank has also raised Rs. 515 crore to augment the Capital resources by issuing Basel III compliant Tier II bonds. These bonds are listed on National Stock Exchange of India Ltd.

Under Basel III, the Bank’s capital position improved from Rs. 6636.65 crore as on March 31, 2015 to Rs. 7317.40 crore as on March 31, 2016 and the Capital Adequacy Ratio improved from 10.89% as on March 31, 2015 to 11.60% as on March 31, 2016 against a minimum of 9.625% stipulated by RBI.

The Capital Adequacy Ratio under Basel II improved from 11.63% as on March 31, 2015 to 12.50% as on March 31, 2016.

2.6 Deposits

Bank’s Aggregate Deposits showed a growth of 11.23% and stood at Rs. 1,00,473 crore as on 31st March, 2016 compared to Rs. 90,328 crore in the previous year. Total Deposits of the Bank (including Inter Bank Deposits) grew by Rs. 10,042 crore to Rs. 1,01,119 crore as on 31st March, 2016 as against Rs. 91,077 crore as on 31st March, 2015.

More than 50% of growth under Total Deposits came from CASA deposits, which grew by Rs. 5,073 Crore. The CASA Ratio improved from 29.79% as on 31st March, 2015 to 31.84% as on 31st March, 2016.

2.7 Advances

The Gross Advances of the Bank stood Rs. 67,004 crore as at the end of 31st March, 2016 as against Rs. 69,907 crore a year ago, recording a negative growth of Rs. 2,903 crore (-4.15%) due to sluggish credit ofi-take coupled with macroeconomic conditions. Personal segment advance grew by Rs. 1,959 crore, SME advance grew by Rs. 883 crore whereas the advance in C&I & Agriculture segment declined by Rs. 2,856 crore & Rs. 2,889 crore respectively. The retail lending stood at Rs. 35,481 crore and constituted 52.95% of the Total Advances as at the end of 31st March, 2016. The Credit Deposit Ratio (Gross Advance to Aggregate Deposits) stood at 66.69% as on 31st March, 2016 as against 76.76% as on 31st March, 2015.

2.8 Market Share

The Bank’s market share in ASCB Deposits has increased from 1.05% as on 20/03/2015 to 1.08% as on 18/03/2016 (last reporting friday data of RBI). The market share in Advances has come down from 1.06 % as on 20/03/2015 to 0.92% as on 18/03/2016. The Bank’s All India Market share in total business as on 18/03/2016 stood at 1.01%. The Bank continued to maintain its position as the premier Bank in Kerala with a market share of 19.78% in business among all Commercial Banks (as at the end of December 2015) with a share of 13.88% of the total branch network. In respect of NRI deposits, Bank’s market share in the State is 24.20% (Source: SLBC, Kerala).

2.9 Priority Sector Lending

The Bank continued to give special emphasis on lending to the priority sector in conformity with national policies, expectations and for fulfillment of social objectives.

Bank’s Gross Advances to the Priority sector was Rs. 27,793 crore as on 31st March, 2016 as against Rs. 27,609 crore as on 31st March, 2015 and constituted 38.74% of the Adjusted Net Bank Credit against the benchmark of 40%.

2.10 Agricultural Finance

The Bank disbursed an amount of Rs. 5,681 crore under Agriculture segment during the financial year 2015-16 against the Special Agricultural Credit Plan target of Rs. 7,000 crore. Exposure to Agriculture segment stood at Rs. 9,326 crore (including RIDF) as on 31st March, 2016, which is 13.00% of Adjusted Net Bank Credit, against a benchmark of 18%.

The Bank had conducted an intensive Agricultural lending campaign, called "HARITHOLSAVAM" from 01/07/2015 to 30/09/2015, to give thrust to agriculture lending.

The Bank celebrated Farmers Day on Chingam 1 (17/08/2015) in association with Krishi Bhavans and Animal Husbandry Department at various centres. Progressive farmers were felicitated on the occasion. The Bank ranked first in the category of Nationalised Banks on the basis of credit linkage to neighbourhood groups (NHGs) sponsored by Kudumbasree Mission. The award was presented by the Hon’ble Chief Minister of Kerala in the 17th Anniversary Function of Kudumbasree on 03/09/2015 at Malappuram.

2.11 Lending to Micro, Small and Medium Enterprises (MSMEs)

MSMEs play a major role in the country’s economic development. The Bank gives due importance for the growth of this vital segment of the economy. Total lending to MSME sector as on 31st March, 2016 stood at Rs. 12,432 crore. The lending to Micro and Small Enterprises (MSEs) stood at Rs. 9,276 crore.

The Bank received the National Conference & Excellence Award on empowering MSME 2016 for outstanding performance in MSME Lending from Federation of Industry Trade and Services.

Bank also received MSME Banking Excellence Awards 2015 from Chamber of Indian Micro, Small & Medium Enterprises for Best Bank for Eco Technology under "Emerging Banks" Category.

RTO – Tie up arrangement

Road Transport Operators (RTO) is an important sub segment under service segment. Outstanding under RTO segment, as on 31st March, 2016 is Rs. 280 crore comprising of 7792 accounts.

Prime Minister’s Employment Generation Programme (PMEGP)

The Bank has been actively supporting the programme to generate employment for youth and stood first in the State of Kerala, surpassing the targets. The Bank financed 296 projects against the target of 171 projects. The total outstanding under PMEGP scheme was Rs. 59 crore to 2,313 benefficiaries as on 31st March, 2016.

Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)

The Bank is a Member Lending Institution of CGTMSE which provides guarantee cover to collateral free loans upto Rs. 1 crore. The Bank made it mandatory to cover all eligible accounts up to a limit of Rs. 50 lacs under CGTMSE. As on 31st March, 2016, 16518 accounts with limits aggregating to Rs. 758 crore stood covered under the scheme.

Specialised MSME Branches:

The Bank is having 10 specialised MSME Branches in Kerala to cater to the needs of MSME clientele.

Loan Origination Software (LOS):

The Bank has implemented Loan Origination Software (LOS) as a process of digitalisation of SME Loan processing mechanism. It integrates sourcing, sanctioning and documentation processes.

Dealer Finance Scheme (e-DFS and m-DFS):

The Bank has introduced a new product as Dealer Finance Scheme to provide credit facility to dealers of Industrial Majors for carrying inventory. The scheme operates on the Bank Internet Banking platform. The Bank has entered into tie up arrangement with five Industrial Majors in various parts of the country.

Pradhan Mantri Mudra Yojana

The Bank has implemented ‘Pradhan Mantri Mudra Yojana’ (PMMY), a fiagship scheme of Government of India which was launched by the Hon’ble Prime Minister. The Bank has taken many initiatives to make the public aware of the scheme details as per Government of India guidelines and has made a Credit delivery of Rs. 335 crore under the scheme to 19470 benefficiaries.

Vizhinjam Port Package

As a novel initiative, the Bank has bundled 7 MSME products and introduced Vizhinjam Port Package to cater to the needs of MSME customers who would be associated with the launch of Vizhinjam International Seaport Project.

2.12 Commercial & Institutional Finance

The Bank’s performance under this segment stood at Rs. 31,523 crore as on 31st March, 2016 as against Rs. 34,379 crore as on 31st March, 2015. The share of C&I segment to Total Advances came down from 49.18% as on 31st March, 2015 to 47.05% as on 31st March, 2016. This segment comprises of financing Manufacturing sector, Industry, Trade, Services, Infrastructure, Corporate customers, NBFC and other institutions. In order to have greater focus on large value advances the Bank has 15 branches under Commercial Network, which are highly specialized with better infrastructure facilities. The Bank has opened two Mid Corporate branches during the year which is part of Commercial Network branches. The Total Advances of these 15 branches stood at Rs. 27,456 crore as on 31st March, 2016, representing 40.98% of Total Advances of the Bank.

Large value advances were migrated from retail branches to specialized Commercial Business Network branches in various centers having necessary infrastructure and expertise for better monitoring and also to provide timely service to these customers.

2.13 Personal Segment Deposits

Deposits under Personal segment grew from Rs. 71,176 crore as on 31st March, 2015 to Rs. 81,866 crore as on 31st March, 2016, thus recording a growth of Rs. 10,690 crore (15.02%). Domestic Deposits grew by Rs. 4,676 crore while NRI deposits grew by Rs. 6,014 crore. The share of Personal Deposits in the Aggregate Deposits of the Bank improved from 78.80% in 2014-15 to 81.48% in 2015-16.

2.14 Personal Segment Advances

The Bank continued to be active in extending finance to Personal Segment, mainly by way of Housing Loans, Car Loans, Education Loans and Gold Loans. The Personal Segment Advances increased by Rs. 1,959 crore during the Financial Year and the level stood at Rs. 20,743 crore as on 31st March, 2016, compared to Rs. 18,784 crore as on 31st March, 2015. During the year, 12767 housing loans aggregating to Rs. 2,266 crore were sanctioned and the outstanding amount stood at Rs. 11,046 crore as on 31st March, 2016. Similarly, 10264 Vehicle loans aggregating to Rs. 594 crore were sanctioned during the year and the outstanding amount stood at Rs. 1,522 crore as on 31st March, 2016.

The Bank continued to support the younger generation to pursue higher studies by extending Education Loans under IBA Model Scheme. During the year under review, 4409 Education Loans amounting to Rs. 194 crore were sanctioned, taking the total outstanding amount to Rs. 2,048 crore as at the end of March, 2016.

Social Banking

Central Scheme to provide Interest Subsidy on Education Loans whose parental annual income falls within the Government stipulated ceiling has been implemented. Subsidy amount of Rs. 81.27 crore pertaining to the education loans sanctioned by the bank was received during this year and credited to the respective accounts of borrowers. The Bank has integrated with Vidyalakshmi Portal – The Government of India initiative – for sourcing of Education Loan application through online facility.

2.15 Treasury Operations

Integrated Treasury performs the treasury functions of the Bank, ensuring safety, liquidity and optimizing yields / returns from investments, besides maintaining statutory reserve requirements. The Gross Investments of the Bank stood at Rs. 36,123 crore as on 31st March, 2016 as against Rs. 24,846 crore as on 31st March, 2015 (After reducing RIDF/ SIDBI/ RHDF deposits as per revised guidelines of RBI). The interest discount and dividend income from domestic investment portfolio for the year was Rs. 2,502 crore as against Rs. 2,223 crore for the previous year. The average yield on investments was at 7.81% during the year as compared to 7.63% during the previous year ended 31st March 2015. The Bank earned a profit of Rs. 247 crore from Domestic Treasury Operations during the year compared to Rs. 236 crore during the previous year ended 31st March 2015. The total exchange earnings from Forex Operations during the year was Rs. 94 crore as against Rs. 102 crore as on 31st March, 2015.

2.16 International Banking

The Bank has 77 Authorised Dealer branches across India which undertakes Forex transactions on behalf of customers. The Bank’s total Forex turnover during the year from Merchant transactions was Rs. 27,187 crore ($4,103 million) compared to Rs. 26,083 crore ($4,173 million) during the previous year. Inter-Bank turnover stood at Rs. 11,67,714 crore as against Rs. 7,06,094 crore during the previous year.

The export finance extended by the Bank stood at Rs. 1,984 crore. The Bank also provides cheaper loans in foreign currency under FCNR Loan scheme. The outlay of FCNR Loans as of 31st March, 2016 stood at $306.25 million. The Bank has entered into an agreement with Export Credit Guarantee Corporation of India (ECGC) to cover its export credit portfolio. Accordingly eligible accounts have been covered with ECGC under the Whole Turnover Packing Credit Guarantee (WTPCG) and Whole Turnover Post Shipment Guarantee (WTPSG).

Foreign Travel Card has been introduced in 7 currencies viz. USD, EURO, GBP, CAD, AUD, SGD and SAR. The Bank would shortly be introducing FX-Out, an online forex product, which will enable all branches to make remittances abroad within the overall ceilings stipulated under Liberalised Remittance Scheme (LRS), up to a maximum amount of Rs. 10 lakhs at a time, in any of the six currencies. The Bank has implemented the reporting of Foreign Direct Investment and Overseas Direct Investment through online mode to RBI.

With a view to speeding up issuing of Bank Realisation Certificate (issued to exporters) for claiming export incentives and as part of message exchange initiative of Directorate General of Foreign Trade (DGFT), the Bank issues digital transmission of Bank Realisation Certificate (e-BRCs) through DGFT website. To improve the operating skills of the officials handling forex business, the Bank has conducted 3 in-house training programmes, one FEDAI workshop and a series of one day workshops at various centres. Interactive sessions for customers were also arranged at different centers of the country for clarification of queries of customers in connection with forex transactions.

2.17 Cross Selling

The Bank has been constantly endeavoring to meet the financial requirements of its customers by making available various insurance and investment products. It includes Life Insurance products of SBI Life Insurance Company Ltd., General Insurance products of SBI General Insurance Company Ltd. and Mutual fund products of SBI Mutual fund. Bank also offers Credit cards of SBI Cards and extends the service of Demat Accounts and ‘Three in one’ Accounts in association with SBI Cap Securities Ltd. Bank has enabled the insurance coverage to about 6 lakh customers under the Pradhan Mantri Social Security Schemes.

The Bank earned an amount of Rs. 14.37 crore (net of Taxes) from cross selling business in FY15 –16 as against Rs. 12.59 crore during FY 14–15, thereby recording a YoY growth of 14.14%.

2.18 Asset Quality

Despite the uncertain economic environment, the Bank continued to give special focus to improve the quality of Assets and to ensure building up of well performing loan portfolio. The Gross NPA level of the Bank as on 31st March, 2016 stood at Rs. 3200 crore and its percentage to Gross Advance stood at 4.78% compared to 3.37% as on 31st March, 2015. The Net NPA level of the Bank as on 31st March, 2016 stood at Rs. 1814 crore. The percentage of Net NPA to Net Advances was 2.77% as on 31st March, 2016 compared to 2.04% as at the end of the previous year. A well-built monitoring mechanism for recovery has been put in place by constituting a Board level Committee, besides a High Power Task Force Committee with Top Executives as members to review the Non-Performing Assets and build momentum for recovery. e-auctions has been made mandatory for assets auction valued Rs. 5 lacs and above through DRTs and sale under SARFAESI Act to help break cartelization in auctions and allow general public to freely participate. As a strategic initiative to liberalize the approach of NPA recovery in Education Loan portfolio which is not fully secured and where the feasibility of recovery through various alternative means seems bleak, a new liberalised OTS scheme named Karunya has been introduced for the FY 2015-16.

The Bank is continuously engaged in providing the right kind of rehabilitation package to sick units to ensure revival of potentially viable sick industrial units. As on 31st March, 2016, Rehabilitation/ Restructuring packages are under implementation in respect of 299 units with a total exposure of Rs. 5,526 crore, of which, 37 units are under CDR scheme with an exposure of Rs. 2,875 crore and 39 units are under BIFR scheme with an exposure of Rs. 1,249 crore.

2.19 Government Business

The Bank maintains its status as the Principal Banker to Government of Kerala. The Bank has been authorized by Reserve Bank of India to handle State Government Business at 145 branches in the State of Kerala and 1 branch in Tamil Nadu. 434 Post Offices are linked with the branches, with a total turnover of Rs. 6,443 crore. More Post Offices are coming forward to open their accounts with the Bank as per the Government Policy for linking of Post

Offices with the banks. The Bank is undertaking Railway transactions in 37 branches. 194 branches of the Bank are authorized by CBDT for collection of Direct Taxes (134 branches in Kerala and 60 branches outside Kerala) and 148 branches are authorized by CBEC in Kerala for Indirect Taxes. The Bank is a Banking partner of the Government of Kerala in the e-tender/e-procurement project. e-payment facility launched by the Government of Kerala, through the Bank for the payment of Commercial Taxes is well received by the business community and the Bank recorded a Turnover of Rs. 13,036 crore for FY 15 –16. e-payment of Kerala State Excise License Fee, Rent, Vehicle Tax, Duty, collection of petty case penalties and import fee etc are enabled through SBT online. Other e-payment initiatives include collection of Karnataka State Government Taxes, Transport, Commercial and Sales Tax of Tamil Nadu and Professional Tax and Sales Tax payment of Maharashtra State Government. Bank also initiated collection of property tax online in selected Corporations, Municipalities and Panchayats in the state of Kerala. Online facility for remitting fees for UPSC examinations, CUSAT and fee collection for Calicut University is enabled through SBT online. The Scholarship payments of Kerala State Higher Education and Technical Education are centrally processed by the Bank and credit given to the benefficiaries account. The Centralized Pension Processing Cell (CPPC) handles pension payments. As on 31st March, 2016, 148517 pensioners are being serviced through this cell. The Bank is having 110 currency chest branches in Kerala, one in Karnataka and eight in Tamil Nadu with a total of 119 currency chests. In FY 15–16, the Bank earned Commission to the tune of Rs. 64.71 crore by conducting Government business.

Linkage of Sub-Treasuries

During the year, 13 Sub-Treasuries have been linked with branches taking the total number of branches linked to Sub-Treasuries in Kerala to 145.

New Initiative

Sukanya Samriddhi Account: Government of India introduced a new deposit scheme called "Sukanya Samriddhi Account" exclusively for the Benefit of the girl child, which was implemented by the Bank from June 2015. An amount of Rs. 6.71crore was mobilized from 2219 accounts upto 31st March, 2016.

Sovereign Gold Bond Scheme: Subscription to Sovereign Gold Bond Scheme of Government of India has been done through Bank and first tranche and second tranche issue has been completed successfully during the period. The Bank has mobilized an amount of Rs. 1.26 crore under this scheme.

Collection of VAT/Commercial Taxes

The Bank got authorization for collection of e-payment of VAT and Commercial Taxes of NCT of Delhi during this financial year.

2.20 Electronic Payment Systems

Electronic Payments of the Bank are done by the Payment and Settlement Group located in Belapur, Navi Mumbai. All the branches of the Bank are enabled for RTGS/ GRPT/ NEFT remittances. The total number of outward electronic remittances for the year ended 31st March, 2016 was 1.53 crore registering an increase of 51%, over the previous year. While, the number of transactions under RTGS recorded a growth of 9%, GRPT outward transactions and NEFT transactions increased by 40% & 57% respectively, during the year.

3. Marketing initiatives and development of new products

The Bank continues to play its role in facilitating customer acquisition, retention and broadening of customer base by conducting segment centric marketing drives.

• The salary payments of employees of most of the State Government Departments and Corporates are disbursed through the Bank. Railway Salary Package, Police Salary Package and KSEB Salary Package were rolled out during the year, with attractive features to cater to the needs of the employees.

• The Bank is the preferred Bank for almost all State Government Departments.

• The Bank has tie-up arrangement with SBICAP Securities Ltd. for opening Demat & Trading accounts. 5469 Demat accounts were opened during the year.

• The Bank has also entered into tie-up arrangement with SBICAP Securities Ltd. for sourcing Demat & Trading Accounts for NRI customers through PIS accounts.

• Atal Pension Yojana (APY), a Government of India Scheme, to encourage the citizens of India to save small amounts during their productive years to enable them to draw a pension during old age, was launched in the Bank during June, 2015. The scheme is administered by Pension Fund Regulatory and Development Authority (PFRDA). During the Financial Year 2015-16, 12987 customers have opened APY accounts.

• PFRDA has introduced the online facility (e-NPS) for opening of NPS accounts in order to address the tax planning of Individuals & Corporates. The Bank is designated for this facility. The customers can open and contribute for NPS through ‘SBT online’. During the Financial Year 2015-16, 460 customers have opened NPS account through online. The following schemes were rolled out during the year.

• P&SB: Certified Pre-Owned Car Loan Scheme, Education Loan- Smart Scholar Scheme, SBT Kaushal Skill Loan Scheme, Housing for all(Urban): Mission 2022, Two Wheeler Loan, Special Term Loan for setting up Solar Plants over residential building roof for KSEB employees.

• MSME: Vizhinjam Port Package, Asset Backed Loans –CRE, Rent Plus Scheme, Supply Chain Finance, Used Premium Car Loan, Mudra Loan, Credit Enhancement Guarantee Scheme and Stand up India scheme.

3.1 Honouring eminent personalities/ Institutions

Bank is honouring eminent personalities/ Institutions in various fields every year with "Prathibha Samman Award". This year the following eminent personalities/ Institutions have been honoured with the "SBT Prathibha Samman Award -2015":

Sl. No.	Category	Eminent Personalities/ Institutions honoured
1	Pravasi Indian	Sri. K. Muralidharan
2	Person of National Eminence	Sri. Adoor Gopalakrishnan
3	Eminent person/ Institution from Kerala	Kerala Social Security Mission

4. Customer Service

Customer service in the Bank is accorded top priority and every endeavour is made to improve the quality of service to the customers and redress their grievances.

A well-defined Customer Grievances Redressal Mechanism is put in place in the Bank. In order to collect the grievance/ feedback from the customers, which are a source of information for the Bank, Bank has implemented a centralized Complaint Management System (CMS) with effect from 05th Jan, 2015.

With the implementation of the centralized CMS, all the complaints received from various channels are entered into the CMS. Once the complaint is punched in CMS, an acknowledgement is generated along with the ticket number, which is immediately communicated to the customer. Once the resolution submitted by the branch is approved by the controller, the complaint is closed in CMS. A message is sent to the customer conveying the details of resolution. The complaints which are received by way of letters are now scanned and uploaded in the CMS and available to branch on real time for redressal there by, saving a lot of time in resolution of grievance.

Various reports on the number of complaints received / disposed / pending in the Bank as a whole are appraised to the Customer Service Committee of the Board. The Standing Committee on Customer Service, constituted pursuant to the Tarapore Committee recommendations also reviews the quality of customer service extended in the Bank at regular intervals. The committee examine all issues that have a bearing on the quality of customer service provided to individual depositors and borrowers. While these are structured meets, the customers are free to meet the Branch Managers / other Officials at Administrative Offices to discuss their grievances. "Open House Meet" is conducted on 15th of every month. Top functionaries at Administrative Offices and Branch Managers will be present in the Branch / Office to meet the customers between 3.00 PM to 5.00 PM without prior appointment.

As a proactive measure, apart from acknowledging each complaint immediately on receipt, senior officials at Customer Service Department endeavor to contact the complainant personally wherever contact numbers are available. The complaints at Head Office / Zonal Office level have been reduced substantially. This has created a very positive effect on the customers and is widely appreciated by them.

The Bank has also provided Toll free number 1800 270 2525 to know their account balance and also established a call centre with toll free number 1800 425 5566 which enables the customers and general public to seek clarification on Bank’s products, service etc. Adequate publicity through print and visual media is ensured throughout the year.

The Bank has provided various channels to receive complaints and grievances. These include SMS, email, missed call facility and contacting Controllers and Zonal Heads at Zonal Offices. Training programmes are conducted regularly for staff on customer service and minimizing customer grievances. Further, all staff training programme of duration exceeding 3 days will have a session dedicated for sensitizing the staff and imparting soft skills required for handling irate customers. The bank conducts customer satisfaction surveys periodically to understand customers’ perceptions of Bank’s service and to identify priority areas for improvement of customer satisfaction. As per Reserve Bank of India, Mumbai vide their letter No. CEPD.CO.PRS.516/13.01.01/2015-16 dated 15th July, 2015, the Bank has now appointed the Chief Customer Service Officer (CCSO) (Internal Ombudsman) w.e.f., Dec 17, 2015. In the case of complaints received by the bank, the bank shall examine the grievance as per its Internal Grievance Redressal Mechanism and in case the Bank decides to reject a compliant and or decides to provide only partial relief to the complainant, it should invariably forward such cases to the CCSO for further examination.

5. NRI Services

The NRI deposits recorded a growth of Rs. 6,014 crore during the year thereby achieving a year end level of Rs. 35,622 crore. Bank continues to maintain the Top position among Banks in the Kerala State in NRI deposits. As on 31st Dec, 2015, the Bank enjoys a market share of 24.20% among All Scheduled Commercial Banks (ASCB) in the State of Kerala.

The NRI deposits constitute 35% of Bank’s Total Deposits and 44% of the Personal Segment Deposits. In order to provide personalised service to the NRI Customers, Bank has 12 specialized NRI branches.

3 Relationship Managers were deputed to the Gulf countries during the year to strengthen Bank’s international presence, taking the total number of Relationship Managers posted abroad to 13. Tie-up arrangements were established with 2 Exchange Houses in UAE during the year, taking the total number of such tie-ups to 45. The Bank proposes to increase the total no of tie-ups to 50 during the FY 2016-17. Inward remittance to the tune of Rs. 44,000 crore (approximately) were received through these Exchange Houses during the year. An advanced version of the speed remittance arrangement on a real time basis, "SBT FLASH" which started with one exchange House in 2014-15 was extended to 32 more exchange houses this year. The facility will be extended to the remaining Exchange Houses during FY 2016-17.

Further, in order to boost the forex income, Bank is managing two exchange houses, M/s City Exchange, UAE and M/s Global Money Exchange, Sultanate of Oman. In addition, Bank is maintaining a Representative Office in Dubai for extending better customer service, as also to maintain close liaison with exchange houses for improving remittance business.

‘SBT NRI Family Card’, a prepaid card for hassle free remittance and rechargeable through Internet Banking was introduced in FY 15-16.

In order to reach the customers at their door step from highest level, Managing Director and Chief General Manager (RB) paid visit to UAE and Oman in FY 15-16.

6. Lead Bank Scheme

The Bank is undertaking Lead Bank activities in three districts of Kerala State viz. Alappuzha, Kottayam and Pathanamthitta. The District Credit Plans for the year 2015-16 were launched in the lead districts during March 2015.

The Lead Banks initiated several steps for successful implementation of DBT/ DBTL/ PMJDY/ PMMY/ APY schemes. Counseling for students seeking educational loans, Financial Literacy seminars and Entrepreneur development programmes for different target groups were also arranged in the lead districts.

6.1 Rural Self-Employment Training Institutes (RSETIs)

The Bank has sponsored 4 RSETIs in Wayanad, Pathanamthitta, Alappuzha and Kottayam for providing skill up-gradation trainings to the rural youth with focus on Below the Poverty line (BPL) category. During the current year, 3312 persons have been trained in these RSETIs. Majority of the trainees have been successful in starting self-employment ventures. The courses for which training is imparted include - beautician course, ornaments manufacturing, Mobile Phone Servicing & Repairing, aluminum fabrication, tailoring, textile ornamentation and ofi-site Driving programme. Computer based programmes like Tally, DTP and hardware servicing have also been imparted. RSETIs also imparted EDP training to benefficiaries selected under Kerala State Entrepreneurs Development Mission (KSEDM). All the four RSETIs have been awarded "AA" grade by Ministry of Rural Development.

6.2 Financial Literacy Centre (FLCs)

Bank has 17 Financial Literacy Centres (FLCs) in Kerala. The main objectives of the FLCs are to provide free Financial Literacy /Education and Credit Counselling, through face to face interaction, with individuals /groups and educating people on proactive and early savings, different banking products and services available to them from Banks and other Financial Institutions.

7. Financial Inclusion

Financial Inclusion (FI) is delivery of banking services at an affordable cost to the vast sections of the disadvantaged and low-income groups. The Government of India launched ‘Prime Minister’s Jan Dhan Yojana’ (PMJDY) in 2014. For this, surveys of households were conducted to identify the excluded populations and opening of PMJDY accounts for them. The Service Areas of the branches have been further divided into Sub Service Areas (SSAs), depending on the number of households (1000 to 15000 Households per SSA). The Bank has entered into a MoU with M/s CSC e-Governance Services India Ltd., which is a Special Purpose Vehicle (SPV) setup by the Ministry of Telecommunications and IT. As per the MoU, CSC is providing the Business Correspondents (BCs) through IT Mission of Kerala in all the SSAs in Kerala that are not covered by the Bank Branch network. The Business correspondents of the Bank in Kerala, are the Akshaya Entrepreneurs who are recruited by IT Mission, Kerala. 838 SSAs have been allotted to the Bank in Kerala and 15 FI villages in Tamil Nadu. Of which, in Kerala 511 SSAs are covered by the Bank Branches and 327 by Akshaya Entrepreneurs. In Tamil Nadu 10 FI villages are covered by various Bank branches and 5 FI villages are covered by Bank BCs.

All the BCs are working in "Kiosk Banking" Platform. "Kiosk Banking" is application software developed by Tata Consultancy Services (TCS) for State Bank of India and shared by SBI with all Associate Banks. It is an internet based robust and secure biometric platform for carrying out banking operations.

During the year, the Bank has opened 60735 accounts through the BCs. The Kiosk Banking module is interoperable ie., transactions of other Banks’ customers are enabled through Aadhaar Enabled Payment System (AEPS) and also for ATM debit card transactions. Remittances to any account with any Bank in India are also enabled in Kiosk Banking. The Bank customers can make loan repayment in the BC counters. All the above services are free except for the remittances made to other Banks.

The Bank has opened 30.02 lacs No-frill accounts, of which, over 90% of the accounts were opened in Kerala. Under the Prime Minister’s Jan Dhan Yojana, the Bank has opened 5.17 lacs accounts.

7.1 AADHAAR seeding to customer accounts

The Bank’s percentage of Aadhaar seeding in all SB accounts is 46.91%. The percentage of Aadhaar seeding in PMJDY accounts is 82.93%, which is the highest in the country. The Aadhaar seeding in Central Government Pensioner accounts stands at 81.33%.

7.2 Direct Benefit Transfer (DBT) –DBTL, NACH, PFMS & ECS Transactions

The Bank has a dedicated DBT Branch at Thycaud, Thiruvananthapuram for handling all electronic payments through Aadhaar Based Payments System (APBS), Public Financial Management System (PFMS), Electronic Clearing System (ECS) etc. The DBT Branch is processing most of transactions through National Payment Corporation of India (NPCI), using the National Automated Clearing House (NACH) platform.

The Bank is the sole Banker for payment of MGNREGA wages in the state of Kerala.

The Bank is acting as sponsor bank to all DBT schemes like Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), Indira Awas Yojana (IAY), Janani Suraksha Yojana, Directorate of Public Instruction (DPI Students’ Scholarships), Chief Minister’s Distress Relief Fund and Social Security Pension (DOP) payments. In addition to above, the Bank is sponsor bank for payments under Rubber Board Subsidy Scheme and Cashew Board Subsidy Scheme of the Government of Kerala. The branch has processed 3.88 crore of DBT/DBTL transactions amounting to Rs. 3,564 crore during the financial year. SMS alerts are sent on credit of subsidy under DBT/DBTL to the benefficiaries. During the year

26.48 lacs of SMS alerts were sent. No SMS charges are levied to these customers.

On 01st Jan, 2016, Ministry of Rural Development, Government of India launched National Electronic Financial Management System (NEFMS) piloted in Kerala with SBT as the sponsor bank. Under the new scheme, unskilled wage component of MGNREGA is being disbursed. During the period the Bank has processed 34.24 lacs transactions amounting to Rs. 361.52 crore.

8. Support to Weaker Sections

8.1 Assistance to Schedule Caste/Schedule Tribes (SC/ST)

The Bank continues to give due importance to extending financial assistance to meet the credit requirements of the SC/ST citizens. A Credit Cell is functioning at Head Office under the control of Deputy General Manager (MSME) for monitoring flow of credit to these communities. Advances to SC and ST borrowers under Priority sector aggregated to Rs. 4,118 crore constituting 14.82% of priority sector lending.

8.2 Assistance to Minority Communities (MC)

The Bank continues to give due importance in extending financial assistance to meet the credit requirements of the Minority Community borrowers. Advances to Minority Community borrowers under Priority sector stood at Rs. 11,632 crore as on 31st March, 2016, as against Rs. 10,718 crore as on 31st March, 2015, constituting 41.85% of the Bank’s priority sector lending.

8.3 Lending to Women

The Bank actively supported lending to women entrepreneurs. The total lending to women entrepreneurs stood at Rs. 7,406 crore covering 572368 borrowers. The exposure constitutes 10.32% of ANBC.

9. Information Technology – Technology Up-Gradation and IT Initiatives

The Core Banking System has provided the Bank with state-of-the-art software that has greatly enhanced the efficiency of customer services, accelerated data processing capabilities, strengthened MIS, enabled efficient Asset Liability Management, reduced transaction cost and offered alternate channels to customers for transactions.

9.1 Alternate Delivery Channels

The CBS has facilitated effective implementation of Alternate Channels viz., Automated Teller Machines

(ATMs), Cash Depositing Machine (CDM), Cash Recyclers, Internet Banking, Mobile Banking, Green Channel Counters (GCC), Point of Sales terminals (POS), Pre-paid cards and Self Service Kiosks (SSK). The Internet Banking facility is recognised to be the best among its class.

9.2 ATMs

The Bank has a network of 1707 ATMs as on 31st March, 2016, out of which, 252 are Cash Recyclers. Out of the 1707 ATMs, 1345 ATMs are in Kerala & 362 ATMs are in other states.

The Bank’s ATM cum Debit cards are accepted in all outlets having Master Card /Visa/ RuPay card logo. Several facilities such as Visa Money Transfer (VMT), SBI Credit Card payment, SBI Life Premium payment, Mobile recharge, Mobile Banking registration and Cheque Book order have also been enabled in the ATMs. The Bank has a card base of 1.14 crore as on 31st March, 2016, which translates into an increase of 15.34% over the card base as at the end of the previous year.

9.3 Internet Banking

The Bank’s highly secure Internet Banking platform supported by encryption offers utmost security to Internet Banking customers against phishing / hacking threats and provides Intra-Bank / Inter-Bank funds transfer facility up to a limit of Rs. 500 crore per transaction for corporate customers. 1.71 lacs new registrations were activated during the current year, i.e, an increase of 19.62% over the registrations as at the end of previous year. Total number of Internet Banking registrations as on 31st March, 2016 is 1042633, out of which, the number of Retail customers is 939326 and Corporate clients is 103307. The average total transaction per branch stood at 19991. Bank could channelize 2.33 crore transactions during the FY 2015-16, through Internet Banking as against 1.71 crore transactions during the FY 2014-15. The average INB transactions per day stood at 63905 during the FY 2015-16 as against 47017 during the FY 2014-15.

Bank earned a commission of Rs. 11.30 crore through internet banking transactions during the financial year 2015-16 as against Rs. 8.44 crore during 2014-15.

Internet Banking Projects:

SBT is the pioneer in various e-banking initiatives. The Bank is associated with the Government of Kerala as well as with Central Government & other State Governments for various e-governance initiatives. The major initiatives are given below:

• Bank customers can now avail the facility to pay KSEB bills without any commission.

• Site-to-Site integration with Kerala State Electricity Board portal for collecting electricity bill online for bank customers has been done during the first week of February 2016.

• Bank has rolled out a powerful fee collection inter face State Bank Collect in our Internet banking portal www.sbtonline.in. Many educational institutions, charitable trusts, Government organisations are presently availing this facility.

• e-payment of Tamil Nadu and Delhi commercial tax is enabled for Bank customers.

• Bank has a strong online shopping platform with the support of thirteen aggregators offering merchant transactions with nearly 8000 websites.

• SBI General Insurance Co Ltd premium payment option and SBI Life Insurance Co Ltd payment of renewal premium is enabled.

• Online SB account opening, online nomination registration, Online OD account opening, ATM PIN Generation, Pre-Paid Card registration and top-up are enabled through Internet Banking.

9.4 Mobile Banking

State Bank Freedom: New version of Mobile Banking Application State Bank Freedom is made available for all kinds of handsets. Mobile Banking provides customers with another safe, secure, fast and convenient channel for banking transactions. The services provided include enquiry services, funds transfer, IMPS, Demat account services, bill payment, mobile top-up, DTH recharge, M-commerce etc. The daily limit for MBS transaction is Rs. 50,000 for aggregate of funds transfer & transactions involving purchase of goods & services, within an overall calendar month limit of Rs. 2,50,000. Services like Mobile Top up, DTH recharge and IMPS (Inter Bank Mobile Payment System) also called as Immediate Payment System makes the transaction simple and faster and are available 24X7 even on holidays. Besides existing facilities, Open and operate FD/RD facility, Feedback and Refer a Friend options are included in new version. IMPS is made live in INET (Internet) Channel for better availability.

State Bank Anywhere Associate Banks: State Bank Anywhere Associate Banks is a mobile application to operate Internet Banking. Presently, the application is available for Android and Apple iPhone users. Customer can use their active Retail - Internet Banking credentials to login to the application. This application does not need any separate registration.

SBT Quick: An SMS/Missed Call based service enabled with following features. Customers can register/deregister this service by sending an SMS "REGSBT<space> Account Number / DREG <space> Account Number" to 09223488888 from the mobile number recorded in CIF.

• Balance Enquiry: Give a missed call or send SMS ‘bal’ to 09223766666 to receive the account balance as SMS.

• Mini Statement: Give a missed call or send SMS ‘bal’ to 09223866666 to receive the account statement as SMS.

• ATM card blocking: SMS ‘block <space> last 4 digits of ATM card number’ to 567676.

9.5 Other Software Initiatives and Value Added Applications

Following are the major in-house software developments.

• Web portal for Depositors Education Awareness Fund Scheme (DEAF) - DEAF Scheme is initiated by RBI for custody of unclaimed amount. This application is developed to provide an interface to report unclaimed balances with the branches.

• NREGA - EFMS Payment System - Payment System for NREGA.

• Public Interface to check status for MoneyTrans remittance - currently only Exchange Company can check the status of the amount remitted via Money Trans this interface will be available in public website so that customers can directly check the status.

• Virtual Fee Counter - A service portal for collection of fee through ECS debit.

• Vidyalakshmi portal - Vidyalakshmi is a portal for eligible students seeking Education Loan. The portal has been developed and maintained by NSDL e-Governance Infrastructure Limited. As on date, 28 Banks have integrated their systems with Vidyalakshmi Portal. Education Loan schemes of these Banks are activated on Vidyalakshmi LIVE portal. Our Bank was enabled on 30/11/2015 in the NSDL Vidyalakshmi Portal and students can now apply for Education Loan Schemes offered by our Bank though Vidyalakshmi Portal.

• Home Listing Builders’ Interface- A module for Builders to view and respond to customer’s queries.

• Online Mudra Shishu application form: New Online portal for customers to apply for Mudra Shishu loan. Provision has been given to Applicant for tracking the status of application

Social Media

The Bank is having dedicated page/channel in Facebook, Twitter and YouTube with special emphasis to embrace the new generation customers. All major products are now promoted through social media also. Customer feedback/ information exchanges are also obtained through this media.

10. Business Process Re-Engineering (BPR) Initiatives

With the objective of improving performance and enhancing customer service to global standards, the Bank has embarked on implementation of various BPR initiatives by leveraging on its core competencies, state of the art technology and redesigned operating architecture:

• RASMECCCs for appraisal and sanction of loans in PSB Retail and Small & Medium Enterprises segments are functioning at 10 major centres. This has enabled the Bank to reduce the response time in these centres, thereby improving the level of customer satisfaction.

• Stressed Assets Resolution Centres (SARC) are functioning at seven centres for more focused attention on recovery of stressed assets and to upgrade the quality of assets.

• Trade Finance Central Processing Centres (TFCPC), aimed at ensuring efficient and uniform handling of transactions related to inland and foreign trade and Bank Guarantees by experienced personnel are functioning at Ernakulam and Chennai linking 70 branches.

• Multi Product Sales Teams (MPST) are functioning at 11 centres. MPSTs are supporting RASMECCC linked branches in marketing specific products.

• Currency Administration Cells (CAC) are functioning at 24 centres linking 362 branches for better cash management, out of which, 2 CACs were set up this year. All the CACs have been merged with parent branch for effective monitoring and follow up.

• A Liability Central Processing Centre (LCPC) is functioning at Thiruvananthapuram to provide back office support to branches, in opening and servicing of liability accounts such as Savings Bank and Current Deposit Accounts. The Centre provides pre-generated Welcome Kits to the linked branches consisting of ATM cards and cheque books. This facilitates the customers to operate the accounts immediately after opening the account. Issue of Cheque Books has been centralized and issued through the centre.

• Pension processing is centralized at Centralised Pension Processing Centre (CPPC) functioning at Thiruvananthapuram. All pension paying branches are linked to the centre. The Centre ensures accuracy in pension calculations, timely disbursement of pension and quick settlement of transactions.

• A Centralised Clearing Processing Centre (CCPC) is functioning at Thiruvananthapuram for processing of both inward and outward clearing cheques. Branches in Kerala are linked to the centre. The Bank has migrated fully to CTS scenario. All branches are processing cheques through the linked regional grids of NPCI.

• "SBT CARE" an in-house customer care centre of the Bank at Thiruvananthapuram, manned by the Bank’s own staff was setup during the year, in order to provide better service to the Banks’ customers and to the general public by way of information on product and services, support and guidance on banking matters, redressal of issues faced by customers etc., to supplement the existing Contact Centre at Bengaluru.

• Door step Banking is functioning at Thiruvananthapuram, Ernakulam and Chennai. This facilitates cash pick up to corporate & leading business establishments from their door steps.

• Dedicated ATM Cash Replenishment Van for replenishing cash in ATMs are functioning at Thiruvananthapuram, Kollam, Kottayam, Ernakulam, Palakkad and Kozhikode centres.

• Loan Origination Software (LOS) for processing PSB Retail Loan applications through a web based utility is enabled in all branches during the year. LOS for Agri and SME loans has also been introduced during the year.

• Loan Lifecycle Management System (LLMS) for processing loans of above Rs. 5 crore was rolled out in March, 2016. The objective of the LLMS application is to cover all the activities involved in end-to-end credit process with focus on high value credit to track the health of advances at all levels and to make available the required alerts on the portfolios to all functionaries across the Bank.

The above major BPR initiatives implemented by the Bank are contributing to the improvement of overall efficiency, service delivery, customers’ convenience and business growth.

11. Internal Control Systems & Supervision

11.1 Integrated Risk Management

Bank’s risk management philosophy is based on clear and timely identification of various types of risks, accurate risk assessment and measurement procedures and continuous monitoring. Integrated Risk Management facilitates the Bank to have a holistic view of the risk management. The risk from the major business lines of the Bank is identified and monitored. The distribution of possible losses is mapped mainly under Credit, Market, Operational and Liquidity risks. The range and distribution of losses/possible losses are quantified on the basis of stressed scenario analysis and capital requirement for the Bank is assessed through Internal Capital Adequacy Assessment Process (ICAAP) exercise. The risk capital assessed through ICAAP is also subjected to periodical review through back testing.

Modular structure under Integrated Risk Management has various divisions focused on management of specific risks, viz. Asset Liability, Market Risk, Credit Risk, Operational Risk and Information Systems Security. The risk management architecture of the Bank consists of the Board of Directors at the top having overall responsibility to implement Risk Management Systems in the Bank. To this effect, Risk Management Committee of the Board supervises the overall risk management functions of the Bank. In line with the modular structure of Integrated Risk Management, there are various risk management committees to have focused attention on various risks, viz. Asset Liability Management Committee (ALCO), Market Risk Management Committee (MRMC), Credit Risk Management Committee (CRMC), and Operational Risk Management Committee (ORMC). The General Manager

(Risk Management) is designated as the Chief Risk Officer (CRO). The Integrated Risk Management Department headed by Deputy General Manager is responsible for the overall daily management of risks at macro level. For management of various risks, Bank has put in place various policies and procedures.

For Credit Risk management, the Bank has a well-structured credit review process with due emphasis on assessing the risk profile of the counter party through internal rating mechanism. These ratings are reviewed by independent risk rater and rating validation committees. The Bank has also introduced validation of credit proposals by Chief Risk Officer of the Bank from risk angle. Migration of internal rating and external rating of borrowers are reviewed annually, besides quarterly review of internal rating for an exposure of Rs. 5 crore and above. External rating is made mandatory for borrowers with specific exposure limit. Bank has also put in place various exposure limits – for single borrower, group of borrowers, specific sectors, industries etc. – as per prudential exposure norms and as stipulated under Bank’s internal policies. In order to mitigate the risk due to currency induced credit risk, the Bank had implemented RBI guidelines to capture the un-hedged foreign currency exposure of borrower entities. With a view to ensuring efficient use of capital, the concept of Return on Capital Charge (ROCC) has been implemented. Bank has initiated steps for introducing Risk Adjusted Return on Capital (RAROC) of borrower entities for risk based pricing. Bank takes up regular reviews of its various industry portfolios to review industry outlook and initiate proactive measures suitably. Credit Risk Assessment Systems followed by the Bank are reviewed periodically to incorporate market changes. For retail loans, Bank uses a risk scoring model. The Bank is presently following Standardized Approach for Credit Risk. The Bank is estimating capital charges for Operational Risk under Basic Indicator Approach. Other risk prone operational areas of the Bank’s business are monitored and proactive actions for improvement are initiated in consultation with other departments like Inspection department, Systems & Procedures department, Frauds Prevention Monitoring & Recovery department etc. Market Risk is managed through adherence to various policies, in the conduct of the investment and trading activities along with compliance to various risk limits like position limits, stop loss limits, Value at Risk (VaR), Management Action Trigger (MAT) and Cut Loss Triggers

(CLT), etc through constant monitoring of the risk positions. The policies are reviewed periodically keeping in view regulatory changes, business requirements and market developments. Presently the Bank has adopted Standardized Duration approach for Market risk. The Bank is closely monitoring the roadmap for migration to advanced approaches under Basel norms. In this direction, Integrated Risk Management Department has been conducting various programmes to disseminate the risk management knowledge to the operating units. This has resulted in better awareness among the operating staff about the various risks, importance of accurate data for computation of capital charge, need for capital conservation, and in general better risk management orientation.

11.2 Asset Liability Management (ALM)

Asset Liability Management system has been implemented in the Bank, since April 1, 1999, as per the Reserve Bank of India guidelines on ALM and Liquidity Risk Management. As per the Bank’s ALM Policy, the Asset Liability Management Committee (ALCO) is authorized to evolve appropriate systems and procedures for ongoing identification and analysis of liquidity and market risks and to prescribe parameters for efficient management of these risks. The ALCO headed by Managing Director meets regularly to review and monitor the same.

Liquidity and interest rate risks 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, Liquidity Coverage Ratio, other Basel III Liquidity Returns 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. The ALCO also discusses the economic developments and monitors the changes in the market on an ongoing basis.

11.3 Information Security

Information Systems Security Cell (ISSC) monitors and supervises the Information Systems with the goal to maintain its confidentiality, integrity and availability at a level appropriate to Bank’s targeted Business. Information Security Policy of the Bank is the guiding principle for the functioning of the ISSC. The information security initiatives and analysis are discussed and reviewed by the Information Security Committee (IS Committee). All the servers and public facing URLs are integrated with State Bank-SOC. Real time monitoring and generation of log and audit trail are taking place. Vulnerability Assessment and Penetration Testing exercise is being carried out for mitigation, complying with the periodicity stipulated by the Reserve Bank of India.

Various initiatives to bring awareness among staff/ customers regarding information security are also undertaken.

Progress in implementation of Gopalakrishna Committee recommendations:

IS Committee reviews the progress in implementing the recommendations of the Working Group on Information Security, Electronic Banking, Technology Risk Management and Cyber Frauds under the Chairmanship of Shri G.Gopalakrishna. At present, 182 of the 201 applicable recommendations are implemented in the Bank where as it was 146 on fi1st March, 2015. The progress is also reviewed in the periodic CISO Conference of State Bank Group Entities and Chief Risk Officers Meet of Associate Banks of SBI.

11.4 Credit Policy and Procedure Department

In order to have a centralized approach and proper coordination among various development departments, Credit Policy and Procedure Department (CPPD) has been set up in the Bank. The department is vested with the responsibility of formulation and review of various credit related policies and procedures of the Bank and also to keep track of RBI/SBI directives in the matter. The department came out with Loan Policy, Forensic Audit Policy, Hand book of Pre-sanction and Post sanction

– Due diligence in advances and Credit manual apart from contributing significantly towards strengthening systems and procedures by providing clarifications on various credit related issues and guidance to field level functionaries.

11.5 Inspection and Supervision

Internal Audit/ inspection is an independent appraisal of operations of various Systems and Controls within an organization to determine whether acceptable policies and procedures designed to add value and improve an organization’s objectives are followed and resources are used efficiently and economically. Inspection and Audit Department at Head Office monitors various risk parameters by conducting regular Internal Inspection, Information System Audit, Compliance Audit of Branches and System Audit of various Head Office Departments and Modules.

Apart from the above, the Bank has put in place an effective institutional mechanism for Risk Based Supervision through RBS Cell in the Inspection Department. As envisaged by the Regulator, the Bank has adopted Risk Focused Internal Audit (RFIA) under RBS since 1st April, 2003. Based on the guidelines on Internal Audit issued by Government of India, Bank’s Inspection & Audit Policy has been suitably modiffed. The Bank has also incorporated the RBI guidelines on Information System Audit in the IS Audit Policy. Subsequent to migration to Core Banking, and constant up-gradation in technology, corresponding changes have been brought in, especially in the area of Audit Rating, Audit Report Formats, grouping of branches, sampling norms and periodicity of inspection. Various user friendly formats have been introduced for RFIA, FEMA Audit, IS Audit, Concurrent Audit etc. The Bank has introduced Online Audit Report Processing System (OARPS) for RFIA and Credit Audit for automated reporting and processing. In order to instill knowledge and to improve the quality of various reports, the Bank is imparting training for the existing and newly joined inspecting officials in the area of RFIA, IS Audit and Concurrent Audit. Further, to improve the adherence to the systems and procedures, the Bank has introduced Dynamic Rating System in terms of which penalty of negative marking is awarded for false compliance submitted by the branches. The auditee units are grouped into different categories and different scoring models are used for each group based on the risk assessment.

11.6 Credit Audit

Credit Audit is done to ensure that the Bank’s laid down policies in the area of credit appraisal, sanction and loan administration are complied with and an independent review of credit risk associated with the borrowal accounts is made. The marks awarded by the credit auditors are normalized by the internal auditors under Credit Risk Management to arrive overall risk rating of the branch.

The Bank conducted Credit Audit of 1229 accounts (having limits of Rs. 2 crore and above, both fund based and non-fund based) with total exposure of Rs. 49,077 crore, covering the pre-sanction, post sanction compliance and follow up aspects.

Monthly reports of performance are regularly submitted to the Audit Committee of the Executives for information and the quarterly review reports are being submitted to the Audit Committee of the Board.

11.7 Inter-Office Reconciliation

Bank has completed reconciliation of Inter Branch accounts for the period from 01st Apr, 2015 to 30th Sep, 2015. Bank achieved 100% reconciliation of debit and credit entries for this period, which is in conformity with RBI stipulations.

11.8 Compliance

The Bank ensures timely compliance in submission of various statutory and regulatory returns and also prompt replies to references received from the Government of India / Reserve Bank of India and other institutions viz., State Bank of India, Indian Banks Association etc. The Compliance Officer monitors the Compliance function effectively on an on-going basis to ensure that regulatory guidelines issued by RBI, GOI & other regulatory authorities are duly captured in the Bank’s policies and laid down instructions and that they are complied with at all levels. The Compliance Officer further apprises the Audit Committee of the Board and the Group Compliance Officer of material breaches.

Realising paramount importance of the Compliance Function in the Corporate Governance, steps have been initiated for re-engineering of the compliance function and the Bank is in the process of roll out of the same. The Compliance Department also provides secretarial services to the Central Public Information Officer, who deals with requests under the Right to information Act, 2005.

Under the Right to Information Act 2005, the Bank has handled 749 RTI applications till 31st March, 2016. The Deputy General Manager (Compliance) is also designated as one of the Appellate Authorities under the above Act and the Bank has handled 105 appeals till 31st March, 2016.

11.9 KYC Norms & AML/ CFT Measures

The Bank has put in place a Board approved revised policy and procedural guidelines on Know Your Customer (KYC)/ Anti Money Laundering (AML)/Combating of Financing of Terrorism (CFT) measures in line with the master policy and subsequent guidelines issued by Reserve Bank of India. A dedicated KYC-AML Cell is functioning in the Head Office to oversee the compliance of KYC/AML/CFT guidelines.

In terms of the policy, the branches are to obtain Customer identification data including photograph, identity proof and address proof, while opening the new accounts. Customer acceptance and Customer identification are the most important pre-requisites in the opening of new accounts. The customers have to submit fresh proof for identity and address proof periodically based on their risk categorisation viz. two years for High Risk, eight years for Medium Risk and Ten years for Low risk customers. Verification and compliance of KYC norms by the branches is periodically ensured by the Controllers during their visits to the branches and also by the Risk Focused Internal Auditors and Concurrent Auditors during their respective audits.

In order to reduce the risk of identity fraud, document forgery and have paperless KYC verification, UIDAI has launched its e-KYC service. RBI guidelines permit acceptance of e-KYC service as a valid process for KYC verification under Prevention of Money Laundering (Maintenance of Records) Rules, 2005 and the provision for the same has been introduced by the Bank. The Compliance Officer is the nominated Principal Officer for the purpose of KYC/AML/CFT of the Bank. The Principal Officer ensures implementation of the policy and compliance of the various regulatory directions including reporting requirements. However, the primary responsibility of ensuring implementation of the KYC/ AML/CFT Policy and related guidelines are vested with the respective Branches/BPR units/Controllers/Zones/ Networks. Suitable checks and confirmations with regard to KYC/AML/CFT measures are put in place at the time of introducing new products / procedures and also at the time of review of existing products / procedures to ensure proper risk categorization, risk mitigation and compliance management. Further, monitoring of transactions is also done with a view to arrest criminal elements using the Bank forum for money laundering and criminal/terrorist activities. The Bank has acquired appropriate software for processing all the transactions generated by all the branches of the Bank, on a day to day basis and to enable periodical submission of mandatory reports to Financial Intelligence Unit-India (FIU-IND), mandated under Prevention of Money Laundering Act (PMLA) 2002 viz. Monthly Cash Transaction Reports (CTRs), Non Profit Organisation (NPOs) Transaction Reports (NTRs), Suspicious Transaction Report (STRs), Counterfeit Currency Reports (CCRs) and Cross Border Wire Transfer Reports.

KYC/AML Cell is also maintaining an intra web site on

Circular letters and upto date relevant information/ statistics on KYC/AML/CFT measures for the Benefit of the Branches/ Administrative offices for their information, attention and further action plans in the matter. KYC updation campaigns were conducted from 16th April, 2015 to 30th Jun, 2015 during the year in order to improve awareness for KYC compliance and make non-compliant accounts compliant, as directed by GOI/ RBI. The Bank has achieved a compliance level of 98.25% as on 31st March, 2016 and it is on the drive to make cent percent compliance.

Decoy customer Exercise

As per RBI direction a decoy customer survey exercise was carried out during the financial year by engaging 150 newly recruited Probationary Officers to evaluate and ascertain the extent of compliance with regard to KYC/AML norms and level of awareness among the frontline /supervisory staff on KYC/AML guidelines/ requirements. Steps/actions have been initiated to rectify the defficiencies brought out by the study team. For augmenting the awareness of all the operating staff to open BSBD (Basic Savings Bank Deposit Account)/ PMJDY Account, staff have been imparted training at Staff Learning Centres.

Unique Customer Identification Code (UCIC)

Reserve Bank of India has directed banks to allot a unique customer identification code (UCIC) for each and every customer. The Bank has completed the process of de-duplication with regard to all the accounts.

FIU-IND Review Meeting

FIU-IND had convened a Review meeting of Five Kerala based Banks at Thrissur on 04th Jan, 2016 under PMLA and other AML/CFT related issues. The Chief General Manager (CB) representing as the Designated Director and the Principal Officer participated in the meeting and discussions that followed on key aspects of suspicious transactions reports (STRs) to be generated by Banks.

KYC/AML/CFT - Co-ordination Meeting of Principal Officers of Associate Banks

A Meeting of Principal officers of Associate Banks/SBI was coordinated and hosted by the Bank on 21st March, 2016 at Global Information Technology Centre (GITC), Mumbai. Various parameters of KYC/AML/CFT issues and concerns for Automatic Risk Categorisation of Customers and AMLOCK version were addressed and decision for delivery of upgraded technology platforms developed and introduced by SBI, to Associate Banks was made.

Training on KYC/AML is being imparted on an ongoing basis in the Bank. Staff awareness programmes are conducted regularly through seminars at Zonal/ Regional Office levels, Learning Centers and during branch visits.

11.10 International Financial Reporting Standards (IFRS)

The Ministry of Corporate Afiairs (MCA) vide press release dated Jan 18, 2016 has issued guideline by outlining the roadmap for implementation of International Financial Reporting Standards (IFRS) converging Indian Accounting Standards for Banks, NBFCs, select All India Term Lending and Refinancing Institutions and Insurance entities.

Reserve Bank of India vide their circular no DBR.BP.BC. No.76/21.07.001/2015-16 dated Feb 11, 2016 has also advised guidelines regarding the same. As per the circular, the Banks shall comply with the Indian Accounting Standards (IND AS) for financial statements for accounting periods beginning from Apr 1, 2018 onwards, with comparatives for the periods ending March 31, 2018 or thereafter. "Comparatives" shall mean comparative figures for the preceding accounting period. Banks shall apply IND AS only as per the above timelines and shall not be permitted to adopt IND AS earlier. The Bank has constituted a Steering Committee to facilitate smooth implementation of IND AS. The Reserve Bank of India will issue necessary instructions / guidelines/ clarification on relevant aspects as and when required.

12. Security arrangements

During the year, no loss of cash due to security breaches in the Bank was reported. Based on the assessment of Risk, Security Guards have been posted at Banks’ vulnerable Branches in addition to 119 currency chest branches. All Bank branches are provided with essential safeguards like CCTV systems, fire alarm systems and burglar alarm systems. The Controllers, Chief Security Officer, Security Officers attached to Zones and Fire Officers attached to Head Office are constantly visiting branches and monitoring security measures provided at branches. Immediate remedial measures are taken wherever necessary. The Bank has 25 cash vans for remittance of cash at various centres.

13. Vigilance Machinery and Frauds Monitoring

13.1 Frauds Monitoring

During the current year 2015-16, 21 fraud cases involving an amount of Rs. 138.89 crore, has been reported as against 38 cases involving an amount of Rs. 236.26 crore as on previous year. This include one large value fraud reported by a single branch involving an amount of Rs. 133.61 crore. Recovery of Rs. 1.70 crore has been made in various fraud accounts during the year.

8 fraud cases involving staff were reported during the year. Disciplinary action has been initiated against the staff members involved in the cases.

13.2 Vigilance Machinery

During the year 2015-16 the vigilance administration within the Bank was generally positive. It is the endeavour of the department to develop a culture in the organization wherein the fact that ‘Vigilance is a management function’ is well imbibed in the ethos. At every forum, it is reiterated that vigilance is a positive function and leads to enhancement in managerial efficiency and contributes to improvement in service delivery. The Management and the employees have responded well and there is remarkable improvement seen in effective implementation of overall monitoring and preventive tools.

13.3 Preventive Vigilance measures a. A sense of positive approach towards compliances from vigilance angle among all the functionaries including adherence to systems and procedures has been inculcated. b. As a part of educative vigilance, Vigilance Department officials handled sessions on Preventive Vigilance at Bank’s training programmes, including programmes for newly recruited employees, highlighting the importance of the need to demonstrate probity in public life and adherence of systems and procedures. c. A CVO’s corner has been introduced for dissemination of information and exchange of views with the employees. d. Surprise inspections were conducted at selected branches and compliance from vigilance angle was ensured through feedback and monitoring. 237 such surprise inspections were conducted during this year. e. 40 Vigilance Investigations were conducted to find out the facts, and submitted to the appropriate authorities to initiate corrective measures. f. Issues of preventive vigilance are discussed in the Management Committee meetings in which all the Top Management functionaries are present. The issues taken up are discussed; solutions/ corrective action identified and timelines for action points are decided. g. Systems are constantly evaluated and whenever felt necessary corrective action is suggested. h. The vigilance initiatives are also discussed with the Managing Director of the Bank and his intervention, whenever required, is sought to ensure that corrective measures are put in place.

13.4 Vigilance Newsletter "NAVA CHETANA"

The News letter of the Vigilance Department was launched in July 2012 to ensure a dialogue between Vigilance Department and the rest of the Bank. The News letter carries the message of MD and CVO, various articles of vigilance, irregularities observed in branches with events of vigilance, etc. In Nov 2015, the news letter has been rechristened ‘Nava Chetana’ keeping into mind the renewed focus on Preventive Vigilance.

13.5 Rotation of Officers in Sensitive positions

In order to mitigate the risk of developing vested interest, officers continuing in the same position and officials who are holding sensitive positions are shifted once in 3 years. The CVO is monitoring this and the issue is discussed with MD during the Quarterly Structured meeting.

13.6 Training Programmes Conducted By Vigilance Department

The Vigilance Department has conducted the following training programmes to the officers of the Bank on vigilance matters.

• A 3 day training programme for Investigating officers, Presenting officers and Inquiry authorities was organised from 05/10/2015 to 07/10/2015. Shri Radhakrishnan.R, General Manager (Retired), RBI, Ex. CVO of Bank of India and State Bank of India, conducted the programme, which was attended by the officers connected to Disciplinary proceedings, throughout the Bank.

• A half day workshop was handled by Shri J.K. Srivastava, Advisor, Central Vigilance Commission on 17th Oct, 2015, which was attended by Investigating Officials, Inquiry Officials and Disciplinary Authorities of the Bank.

13.7 Conference of CVOs

In order to provide a forum for freely exchanging vigilance related information and sharing of knowledge, the CVOs of South-based Public Sector Banks meet every quarter at different locations. This forum has been helping CVOs of South-based Public Sector Banks to understand the nuances of vigilance through discussions and experience sharing. Two conferences were held during the year at Chennai and Hyderabad on 27/05/2015 and 11/12/2015 respectively.

13.8 Preventive Vigilance Committees at branch level

As part of monitoring preventive vigilance activities, Preventive Vigilance Committee has been set up in all branches and administrative offices. This helps the Branch Manager to discuss collectively the vigilance matters concerning the branch and work in a co-ordinated manner.

13.9 Vigilance Awareness Week – 2015

• The Vigilance Awareness Week – 2015 was observed during Oct 26 – 31, 2015 with pledge administered at Head Office/Other offices/Branches. This year’s theme for Vigilance Awareness Week was ‘Preventive Vigilance as a tool of Good Governance’. Essay competitions, quiz competitions, elocution competitions were conducted at Zonal Offices to school and college students.

• A lecture was given by the RBI Regional Director, Shri Nirmal Chand, at the Bank’s Staff Learning Centre on ‘Preventive Vigilance and its role in Corporate Governance.’

• The CVO was invited by HUDCO, Thiruvananthapuram for delivering a lecture on "Preventive Vigilance as a tool of good governance" as part of the Vigilance Awareness Week - 2015.

• Shri Raju Narayanaswamy I.A.S, Secretary to the Government of Kerala was the guest of honour for the valedictory function of the Vigilance Awareness Week – 2015, on 31st Oct 2015.

13.10 Interactive Session on Preventive Vigilance

An Interactive Session on Preventive Vigilance by Ms. Anna Roy, Joint Secretary, Ministry of Finance, with executives of different Banks and Financial Institutions, who have presence in Kerala, was organised by State Bank of Travancore on 05th Dec, 2015. Executives representing 24 Public Sector Banks and Insurance Companies participated in the session and the event was well received.

13.11 Liaison with CBI officials

CVO and the Vigilance Department maintain close relationship with CBI officials. The progress of cases being pursued by CBI is monitored by CVO.

13.12 Liaison with Other Functionaries of the Bank

Perfect co-ordination and harmony exists between the Disciplinary Authority and the Vigilance Department/ CVO in dealing with disciplinary cases. The Managing Director is being appraised of the development informally on many occasions and formally once in a quarter in a structured meeting.

13.13 Apprising the Board

The Vigilance Department apprises the Board of Directors every quarter on the status of disposal of vigilance cases and also the preventive vigilance measures being followed in the bank.

14. Human Resources Development & Industrial Relations

14.1 Human Resource

• As on 31st March, 2016, the Bank had on its rolls 14892 members of staff, comprising 5443 officers, 7059 clerical and cash department staff, 1799 subordinate staff and 591 maintenance staff. The number of women employees and ex-service personnel constituted 6284 and 1951 respectively of the total work force. Out of the women employees, 1870 are officers, 3667 non-subordinate staff and 747 subordinate staff. The Bank has also on its rolls 269 employees who are differently abled.

• During the year, 52 employees were promoted from Subordinate Cadre to Clerical Cadre, 179 employees from Clerical Cadre to the Officers Cadre and 434 promotions took place within Officers Cadre.

• The average age of the employees (excluding TEGS) is 41.32 as on 31st March, 2016 as against 43.28 as on 31st March, 2015.

• During the year, 2034 staff were recruited (751 in the officers cadre, 1190 in non–subordinate and 93 in the subordinate cadre): Number of Staff recruited – 2015-16

CADRE	Total
Officers	751
Clerical	1190
Sub-staff (Including Maintenance Staff)	93
Total	2034

 

Staff				Of Which,
Strength as on 31st March, 2016	Total	SC	ST	Ex- Ser.	Women	PWD
Officers	5443	740	246	180	1870	98
Clerical	7059	893	189	840	3667	162
Subordinate
	1799	344	55	931	310	7
(Excl. MS)
Maintenance
	591	154	14	-	437	2
Staff
TOTAL
	14892	2131	504	1951	6284	269
STAFF

14.2 Staff Productivity

Business per employee stood at Rs. 11.50 crore as at the end of March, 2016 as against Rs. 12.28 crore as on March, 2015.

Net Profit per employee is Rs. 2.36 lacs as on March, 2016 compared to Rs. 2.55 lacs for the year ended March, 2015.

14.3 SBT Anthem, Oath and Flag:

To strengthen a sense of ‘ownership’ among the employees, the Bank has begun a process of ‘Rediscovering the soul of SBT’. ‘Proud to be an SBTian’ is the theme of this process with Bank’s Anthem, Oath and Flag being the external symbols of Bank’s ‘pride’ of ownership.

14.4 SBT History Project and Museum:

The story of State Bank of Travancore, born under royal patronage, and metamorphic transformation to its present state, is worthy of being scripted and preserved. The Bank has celebrated 70th year of its foundation. As an initiative the Bank has taken up a project of chronicling the history of the Bank and is setting up a ‘Museum’. The Museum is being inaugurated on 23.04.2016. It is a well-known fact that the Bank’s history is closely interwoven with the financial history of Kerala. A History book charting the journey of the Bank so far is also on the anvil.

14.5 Training

• Training programmes are conducted at Bank’s three learning centres located at Thiruvananthapuram and Ernakulam with the objective of updating knowledge, improving skills and reorienting the attitude of staff members. This is done on an ongoing basis with particular reference to areas of corporate goals/concern areas.

• Besides functional programmes like general banking, credit etc., programmes on leadership, behavioral science etc., are also being conducted. Expert faculty from outside the Bank are also invited whenever needed.

• During the year under review 537 Training programmes were conducted by the Learning Centres imparting training to 6655 Officers, 6619 Non-subordinate staff and 1180 Subordinate staff. In addition to above ‘Aarohan’ training programme was conducted all over the Bank covering 8860 employees of the Bank. Aarohan is a corporate message to all employees of the Bank in the form of a mass communication programme.

• In addition to in-house training programmes 918 officers were deputed to the Apex Training Institutes of State Bank of India, RBI and other outside Institutes for training. For conducting trainings at outside Kerala centres, facilities of SBI and other Associates are also being used.

• Retiring officers and employees are given special training covering matters like investment guidance, post-retirement life etc. During the year Bank has given such training to 513 staff members.

• In order to improve training capacity Bank has decided to set up one more learning centre. The third centre is planned to be set up in Tamil Nadu.

Pre-Promotion Training to SC/ST/OBC

Pre Promotion training and Mock Interviews were conducted for employees belonging to SC/ST/OBC category, appearing for promotion from Subordinate to Non-subordinate cadre and Non-subordinate cadre to Officer Cadre.

Foreign Training

Two officers attended the 10th FEDAI Annual Conference at Brussels, Belgium. One officer attended a training programme arranged by SBI Mutual Fund in London.

14.6 Reward & Recognition

The Bank has formulated a scheme to recognize and motivate high achievers among the branches by awarding the honour of MD’s Club, CGM’s Club and GM’s Club membership. Twenty one branches became eligible for the honour this year. The Bank has also formulated a scheme to recognize the best performers among the controllers. Three controllers were selected and honoured.

14.7 Performance Linked Incentive Scheme

The Bank has introduced a scheme of payment of Performance Linked Incentive to the staff members. Accordingly, Branch Managers, Controllers and Unit Heads up to the level of General Managers and their team members would be paid incentives based on their performance under the pre-determined parameters.

14.8 Human Resources Management Solutions (HRMS)

The Bank has rolled out Project HRMS from 01st Apr, 2012, with a view to automate, integrate and centralize HR processes of the Bank.

HRMS has become a single and central source of information for efficient HR Management. This has also contributed to employee satisfaction through transparent and time bound monetary transactions relating to emoluments and perks payment as well as other services through uniform interpretation of the Bank’s instructions. Bank derives the following Benefits out of automation of HR viz., consolidated and detailed data available immediately for informed decision making, saving of man hours which can be utilized for other areas like marketing, recovery etc., besides resulting in cost savings to the Bank through reduction of paperwork and telephone/fax charges.

Atpresent,theservicesthroughHRMSPortalforemployees include centralised salary payment, centralised payment of all kind of employee reimbursement, Sanction of annual and stagnation increments to employees of the rank AGMs and below, Online submission, Reporting and Review of Annual Appraisal Reports of officers, Online submission of Declaration of Assets and Liabilities by all employees of the Bank as per the Lokpal and Lokayuktas Act 2013, Investment Declaration for Income Tax calculation, Centralized Form 16 generation, updation of Blood Group of employees, updation of personal & family details, link to State Bank Training Management System – for Training at SBI Apex Training Institutes & State Bank Learning Centres, HRMS Service Desk etc.

14.9 Staff – SC/ST Cell Reservation Rules—Implementation in the Bank

Reservation policy has been implemented in the Bank for Scheduled Castes and Scheduled Tribes from the year 1972, in direct recruitment and from the year 1978, in promotion.

Reservation at 15% for SCs and 7.5% for STs is provided in direct recruitment for Officers cadre.

In direct recruitment to Clerical and Subordinate staff cadres, percentages of reservation as applicable in each State are provided for SCs and STs as per the DOPT guidelines.

The staff data as on 31st March, 2016

Category	Total	SC	%	ST	%
Officers	5443	740	13.6	246	4.52
Clerical	7059	893	12.65	189	2.68
Sub-staff	1799	344	19.12	55	3.06
Maintenance Staff	591	154	26.06	14	2.37
Total	14892	2131	14.31	504	3.38

Post based roster which shows a clear picture of implementation of reservation rules is maintained in the Bank, in accordance with the Government of India guidelines. Such rosters are being verified by the Chief Liaison Officer for SCs and STs annually. Roster for the year ending 31st Dec, 2014 has been uploaded in Banks’ site. Whenever backlog of reserved vacancies for SCs and STs occur, such vacancies are filled through special recruitment. Last such special recruitment was conducted during 2015-2016 wherein 31 SC candidates and 105 ST candidates were recruited in the Officers cadre. As at the end of March 2016, the position of backlog is as follows.

(a) Backlog under Direct Recruitment to:

Sl No	Cadre	SC	ST	OBC
1	Officer	0	18	0
2	Clerical	0	0	0
3	Sub-Staff	0	2	0
4	Maintenance Staff	0	0	0

The above backlog vacancies were included in current year recruitment process.

(b) Backlog under Promotion from:

Sl. No	Cadre	Category
		SC	ST
1	Clerical to Officer cadre	34	55
2	Subordinate to Clerical cadre	0	0

Backlog of SC/ ST vacancies under promotion from clerical cadre to Officer cadre is due to non-availability of candidates in feeder cadre.

The following concessions / relaxations are made available to employees in the SC/ST Category i. Relaxation up to 5% of the required qualifying marks both in written test and interview is allowed in direct recruitment to subordinate and clerical cadre. ii. Relaxation up to 5% of the required qualifying marks both in written test and interview is allowed in promotion from clerical cadre to Junior Management Grade Scale- I under Group –A and Group – B channels. iii. Relaxation of 5 years in upper age limit is allowed to candidates belonging to SCs and STs in recruitment to subordinate, clerical and officer cadres. iv. Relaxation 5 years in upper age limit is allowed to candidates belonging to SCs and STs in promotion from Clerical cadre to Officer Cadre under Group-A, Group-B & Group-D channels. Pre-promotion training and Mock Interview to SC/ST/ OBC employees were conducted for promotion from Subordinate to Non-Subordinate and Clerical Cadre to Officers Cadre under Group A, B and D channels at Thiruvananthapuram and Ernakulam learning centres. In recruitment, the total number of vacancies and number of vacancies available for SC and ST are advertised extensively in newspapers.

The Bank has designated an Officer of General Manager rank as Chief Liaison Officer for SC/ST. The Bank also has a separate Reservation Cell (SC/ST) headed by a Manager at Head Office and assisted by Liaison Officers at the 8 Zonal Offices and 2 Regional Offices (Mumbai and New Delhi) to safeguard the interests of SC/ST employees. The Cell at Head Office arranges periodic meetings of the representatives of the SBT SC & ST Staff Welfare Association with the Top Management to listen to and redress the grievances. The Bank has already provided a well-furnished office with telephone and computer to the SBT SC & ST Staff Welfare Association. Check- ofi facility for payment of subscription by the members to the Association also has been provided. The Cell is conducting meetings of Liaison officers of all the Zones/ Regional Offices at quarterly intervals. Such meetings are presided over by the Chief Liaison Officer to discuss issues/redress the issues, if any, pertaining to respective areas. The General Manager (HR) also invariably participates in the meeting. The action points which emerge in such meetings are meticulously followed up. The other tasks undertaken by the Cell are:

• Ensuring compliance, by the Bank, with orders and instructions pertaining to the reservation in favour of SCs/STs in the matter of recruitment/promotions and other service Benefits such as relaxations/ concessions admissible to them.

• Ensuring the placing of an Annual Review Report on the progress of implementation of reservation policy for SC/ ST before the Board of Directors.

• Ensuring that the Bank takes appropriate steps to provide all help and co-operation to the National Commission for SCs and National Commission for STs.

• Ensuring that Government of India’s directions are followed in respect of DPCs/ Selection Committees pertaining to SC/ST/MC members.

• Ensuring proper implementation of the Reservation Policy by conducting annual inspection of the rosters maintained in the organization.

• Acting as Liaison Office between Bank and the Ministry of Finance, Government of India and National Commission for SCs, STs, OBCs and Minority Communities for supply of information, answering questions and clearing doubts in regard to matters covered by the reservation orders.

• Cases of suspicious caste certificate are referred to a three member Scrutiny Committee constituted by the respective State Governments and followed up closely. In verified cases, as recommended by the Scrutiny Committee, actions are taken.

14.10 Activities of Minority Communities [MC]/ Other Backward Communities [OBC]/Persons with Disability [PWD] /Ex-Servicemen [EX-Ser] Cell

The Bank has designated an Officer of General Manager rank as Chief Liaison Officer for OBC Cell and PWD/Ex- Servicemen Cell.

The Bank has also designated an Officer of General Manager rank as Chief Liaison Officer for Minority Community. MC/OBC/PWD & Ex-Ser Cell assisted by Liaison Officers at Head Office, eight Zonal offices and two Regional Offices are functioning to protect the interests of the employees belonging to the respective sections. The Cell at Head Office arranges periodic meetings of the Liaison Officers of OBC employees at quarterly intervals. Such meetings are presided over by the Chief Liaison Officer to discuss issues/redress the issues, if any, pertaining to respective areas. The General Manager (HR) also invariably participates in the meeting. The action points which emerge in such meetings are meticulously followed up to cases of negligence, lapses of grievances in the matter of following the reservation and other orders relating to OBC employees coming to the light through the inspection carried out by the liaison Officer or otherwise, should be reported to the Reservation Cell for further follow-up or settlement of the issues.

The Cell ensures:

• Compliance by the Bank with orders and instructions pertaining to the reservation of vacancies in favour of Ex- Servicemen and Persons with Disabilities in the matter of recruitment/ promotions and other service Benefits.

• Compliance by the Bank with orders and instructions pertaining to the reservation of vacancies in favour of Minority Community and Other Backward Communities in the matter of recruitment and other service Benefits.

• The Bank takes appropriate steps to provide all help and co-operation to the Backward Classes Development Corporation.

Responsibilities of Liaison Officers (OBC)

Liaison Officers at each Zone/Regions should convene quarterly meetings headed by the Deputy General Manager of their respective zones to discuss the complaints/grievances and its minutes should be sent to the Reservation Cell.

14.11 Industrial Relations

• The time tested mechanism of bilateral negotiations at various levels of the organisation with the Employees’ Union and the Officers’ Association through periodical structured meetings and redressal of the issues ensured harmonious and cordial industrial relations in the Bank throughout the year.

• Bank attended the bipartite meeting held on 20/03/2016 at Gurgaon with Associate Bank Officers’ Association (ABOA) along with SBI.

• One Staff Welfare Committee and Five Subcommittee meetings were held during the year.

• Four strikes were conducted by Employees Unions’ / Officers’ Association as detailed below:

1. On 04/06/2015, strike by SSBEA on industry level,

2. On 12/06/2015, fiash strike by AIBOC on state level,

3. On 02/09/2015, strike by various workmen unions on industry level and

4. On 08/01/2016, strike by SSBEA in all associates of SBI.

• In the online Employee Grievance Redressal System 39 complaints were received and disposed ofi in time.

• Details of complaints received on sexual harassment against women at work place as on 31/03/2016:

Received	Disposed	Pending as on 31st March, 2016
Nil	Nil	Nil

During FY 2015-16, the following activities under various Staff Welfare Schemes were undertaken:

• Under the Scheme for reimbursement of expenses of annual health check up for retired staff/spouse of the deceased retirees ( Rs. 1,500/- for retired staff and Rs. 2,000/- for spouse of the deceased retirees per financial year) an amount of Rs. 66.61 lacs was paid.

• Under the scheme for reimbursement of expenses of health check up of spouse of staff members (i.e.,

Rs. 1,000/- per financial year), Rs. 30.32 lacs was paid against 3,032 applications.

• Super Suraksha Insurance Scheme for employees was renewed with the life cover of Rs. 5.00 lacs per employee. 32 claims were settled under this scheme.

• At present 21 holiday homes are functioning at 20 centers.

• As per the 10th Bipartite settlement/joint note dated 25th May, 2015, a new medical insurance scheme has come into force in Bank from 01st Oct, 2015 in lieu of existing hospitalization scheme. The scheme has been designed and finalized by IBA with United India Insurance Company. M/s K M Dastur Reinsurance Brokers Pvt Ltd is the intermediary. Subsequently with effect from 01st Nov, 2015, a similar scheme also has been introduced for the Retirees of the Bank. The scheme is being monitored by IR Department and the Chief Manager (IR) is the Nodal officer of the Bank for repudiation of claims.

• Scholarships and tuition fees for wards of staff members amounting to Rs. 78.30 lacs were disbursed.

• Under the outpatient scheme reimbursement amounting to Rs. 42.82 lacs was made.

• 21 applications were considered for payment amounting to Rs. 1 lac under the scheme of financial assistance for expenses incurred by Staff Members for the differently abled dependent wards.

• 22 claims amounting to Rs. 26.91 lacs were paid under the scheme of part payment of outstanding in loan accounts at the time of death of an employee.

• 152 claims were paid under the funeral expenses scheme.

• An amount of Rs. 7.89 lacs was disbursed as financial assistance to pre retirees and spouse during the year.

• A quarterly journal "Vishranthi" has been published exclusively for the Retirees during the year.

15. Legal Services

The Bank has a well-established Law Department with law officers placed at Head Office, Zonal / Regional Offices and also at various Centers. The Department performs diverse functions such as giving advice on legal issues, preparation of general and case specific documents, vetting and scrutiny of loan documents etc.

The Department plays an important role in the matter of recovery. Filing of Suits and DRT applications for recovery of dues are arranged and followed up by the Law Officers. They also assist the branches and other operational functionaries in enforcement of security under the SARFAESI Act, 2002 and also in defending the cases filed against the Bank before DRTs/DRATs/High Courts in this regard. Various Cases, petitions and claims against the Bank filed in various High Courts, Tribunals, Civil Courts, Consumer Forum, Ombudsman, Labour Courts, Human Rights Commission and other authorities are defended under the advice and guidance of the Law Department. The Department assists the concerned functionaries of the Bank in implementing the provisions of the Right to Information Act, 2005. In coordination with the respective departments, Law department arrange for placing of the regulations framed by the Bank under Section 63 of the State Bank of India (Subsidiary Banks) Act, 1959 before Parliament after the same published in the Gazette. The Law Department is also involved in the training of the staff on topics involving law and practice of banking. The Law Officers handle varied legal matters and provide legal advice and suggestions to the business units and developmental/ operational functionaries and take steps to legally protect the bank and safeguard its interest in all respects. In addition to the above, Law Department is maintaining ‘Law Portal’ for the internal use of the Bank. Law Portal is very informative and user friendly and helps the functionaries in accessing the panel of advocates, formats for documentation / SARFAESI, acts, rules, instructions, notifications, case laws etc. which are relevant for bankers.

16. Public Relations and Publicity

Public Relations Department shoulders the responsibility of disseminating various information projecting Bank’s image among public and Government Departments. The Department maintained close rapport with the Government Departments, Media, Commercial and Social Organizations and the general public. Extensive coverage was given through the newspapers, TV channels, FM radio, Online publications and hoardings. During the year, the Bank was one of the main sponsors of International Film Festival of Kerala, GV Raja All India Football Tournament, MSME Summit, Kerala Literature Festival, Kerala State Film Award Night, Kerala State School Youth Festival, All India College Games and All India Police Athletic Meet. Many programmes conducted by Mathrubhumi, Malayala Manorama, Deshabhimani, Madhyamam, DC Books, Asianet channel, Kairali channel etc were supported by us. Maximum publicity was derived through organising the live music concert of violin maestro Dr. L. Subramaniam and Dr. Kavitha Krishnamoorthy at Thiruvananthapuram. The Literary Camps organised with the support of Kerala Sahithya Academy at Munroethuruthu, Kollam and Thrissur were also well received. The Bank was also associated with the programmes conducted by Mahatma Gandhi University, CMS College, Kottayam, Indian Medical Association, Kerala IT Mission, ISKON, Trivandrum Management Association, Lions Club and AKG Centre for Development Studies.

Publicity through hoardings gave good visibility for the various products and services of the Bank. The Bank has at present 101 hoardings all over Kerala. Apart from the hoardings, the Bank has displayed advertisements through sign boards on the Sabarimala route and Kodimatha town, Glow Sign Boards at Chennai Central

Railway Station, Roto Sign Boards at Palakkad railway station etc. Bank’s advertisements are at display in the baggage area of Thirvananthapuram airport Domestic Terminal and on the exterior of Parasuram Express and Ernad Express trains. Bank have also branded the Thiruvananthapuram Central railway station and ticket counters with a huge hoarding, two arches, fifty unipoles, five glow sign boards and announcement system (jingles), with Bank’s logo and advertisements. This has been a highly successful image projection step for the Bank. The Bank has name boards with advertisements in ten major railway stations of Kerala. The Bank as a responsible Corporate Citizen has also sponsored 50 trafic awareness boards in Thiruvananthapuram city and 25 boards in the High Range area in collaboration with Kerala Police.

The Bank’s Calendar for 2016 with the theme "Palaces of India" and Diary with cover photo of founder, His Highness Sree Chitra Thirunal Maharaja announcing the formation of Bank were well received by the public. The Bank has also produced its corporate film titled "Sands of Time" this year, which was formally released at the inaugural function of Bank’s 70th Foundation day Celebrations held at Thiruvananthapuram. During the year house magazine "Maithri" was published twice, one as "Sapthatharangini Special" with a comprehensive history of Bank and contributions received from eminent SBTians of yesteryears, which was appreciated by one and all.

As done every year pilgrim service centres were opened at Pampa and Sabarimala Sannidhanam to cater to the banking requirements of the pilgrims. Bank has also sponsored the ‘Sabarimala Virtual Queue Portal’ of Kerala Police.

17. Progressive use of Hindi

The Bank complied with the provisions relating to the Official Languages Act, rules, instructions and directives of Government of India and Reserve Bank of India. As per the guidelines of the Reserve Bank of India, the Bank has introduced SBT Rajabhasha Shield for Zonal / Regional Offices situated at linguistic regions A, B and C. SBT Rajbhasha Shields were awarded to the Regional Office Mumbai under linguistic regions A & B category and Zonal Office Ernakulam, Kottayam and Kozhikode under linguistic regions C category.

Hindi workshops and Hindi programmes were conducted for the Benefit of staff members, to increase their knowledge of functional Hindi and attending to correspondence in Hindi. All the letters received in Hindi were essentially replied to in Hindi.

17.1 Awards won:

• The Bank participated in the State Level Official Language Exhibition instituted by Kerala Hindi Prachar Sabha and won the Shield for implementation of Official Language Policy.

• Bank secured First Prize instituted by the Town Official Language Implementation Committee, Thiruvananthapuram for the implementation of Official Language Policy among Public Sector Banks situated in Thiruvananthapuram.

• Zonal Office, Ernakulam, Kozhikode and Thiruvananthapuram secured shields from their respective Town Official Language Implementation Committees for the implementation of Official Language Policy.

17.2 Magazine and Publication:

Annual publication ‘Swathi’, the Bank’s Hindi Magazine ‘Rajabhasha Sahayika’ and "Phrases of official noting" were also published. The Official Language Department published News letter in Hindi during the year.

Programmes and Awards sponsored:

During the year, various competitions were held for school level students in Hindi. Hindi Fortnight / Hindi Day were also celebrated at Head Office, Zonal Offices and Regional Offices. Each year Bank sponsors "SBT Hindi Sahitya Puraskar" organized by the Kerala Hindi Sahitya Academy. This year the award has honored the noted Hindi Writers Dr. Jayakrishnan.J and Smt V. Anandavalli of Kerala.

18. Branch Network

The Bank opened 23 new branches during the year. As at the end of 31st March, 2016 the Bank has 1177 branches and 12 extension counters and is now represented in 16 States and 3 Union Territories. 3 Mid Corporate branches were merged with commercial branches in the same Centre. 21 Gold point branches were converted into normal business branches.

The number of branches in Kerala increased from 838 as on 31st March, 2015 to 852 as at the end of 31st March, 2016. The Bank has 46 Specialised Personal Segment branches,

12 NRI branches, 2 Housing Finance branches, 5 Treasury branches, 6 Service branches, 1 DBT branch, 15 Commercial network branches (CNW), 9 Specialised Krishi Point branches (Agricultural Development Branches), 10 Specialized SME branches, 2 Asset Recovery Management Branches, 1 Micro Credit branch, 1 Specialized branch for women entrepreneur, 2 Shradha Kendras, 1 e-Business Hub, 1 SSBGT and 1 International Service Branch. The Bank has a representative office at Dubai and manages two Exchange Companies in Dubai and Oman. Under the BPR initiatives, Bank has 10 RASMECCCs, 1 CPPC, 7 SARC, 2 TFCPCs, 1 LCPC and 24 CACs. The Bank is having 2 Exchange Bureaus, one each at Cochin and Kozhikode International Airports in addition to the above branches/ offices.

19. Premises

Premises Department undertakes the development and maintenance of fixed assets and framing of policies on acquisition of premises. Some of the major activities undertaken during the year are as follows:

• Construction of compound wall and other site development works has been completed in the 3 acres of land taken on long term lease (90 years) by the Bank for ‘IT HUB’ at Techno Park, Thiruvananthapuram.

• Renovation works were undertaken at the Staff Learning Centre at Chittoor Road, Ernakulam and capacity was also increased by taking additional space on rent.

• Renovation works undertaken for the second & third fioor at Head Office, Canteen cum Kitchen block at Staff Learning Centre, Thiruvananthapuram and Bank’s own building at Chinnakada, Kollam

• Renovation works undertaken on the acquired land at Kowdiar, for setting up Bank’s History Museum.

• Renovated the third, fourth and fifth fioor of the rented premises at Aikkara building at Thycaud, Thiruvananthapuram. Mid Corporate Branch, Thiruvananthapuram, New Business Department and part of Information Technology Department are placed in this premises.

• As a green initiative a solar power plant was installed at Staff Learning Centre, Thiruvananthapuram. The painting works of Head office complex was also undertaken during the year.

19.1 On-going projects

• The construction of Branch building with Currency Chest at its own premises at ldukki and Adoor had been initiated.

• Bank proposes to construct fiats in Banks own land in Sector 18, Rohini, New Delhi.

20. Corporate Social Responsibility (CSR)

Bank, under Corporate Social Responsibility initiatives has conducted a wide range of social activities both in rural and urban areas to serve the community at large. During FY 2016-15 an amount of Rs. 2.72 crore was spent for CSR activities. The major CSR initiatives undertaken by the Bank during the year are as under:

• Vehicle for cancer control and patient support activities to Regional Cancer Care Centre, Thiruvananthapuram.

• Cut models in automobile trades for imparting skill training to the persons with disabilities to Vocational Rehabilitation Centre for Handicapped, Nalanchira, Thiruvananthapuram.

• Equipments to start paper bag, paper cup and paper plate manufacturing unit to Rotary Institute for Children in Need of Special Care, Thiruvananthapuram.

• Establishment of Labour Room at the Swami Vivekananda Medical Mission Hospital Attappady, Palakkad.

• Resource for Cardiac Transplant Programme to Sree Chitra Thirunal Institute for Medical Science and Technology, Thiruvananthapuram.

• Expenses of four Rural Self Employment Training Institutes paid to State Bank of Travancore Rural Development Trust.

• Modernising classrooms, revamping the school ground of Government L P School, Peyad which has a legacy of 150 years of existence.

• Hemodialysis Unit to Snehasparsham Kidney Patients Welfare Society, Eranhipalam, Kozhikode.

• Assistance to start IT related Women Empowerment Programme by S.M.S.S. Hindu Mahila Mandiram, Poojapura, Thiruvananthapuram.

• ModernisationandDigitalizationoftheprisonlibrary of Central Prison, Poojapura, Thiruvananthapuram.

• Construction of kitchen and providing basic amenities to Government U.P School, Vilappilssala, Thiruvananthapuram.

• Ambulances to Access Healthcare LLC. Sanstha, Jaipur; Rajeshwary Foundation, Jagathy; Sevana Nilayam, Kottayam; Pain & Palliative Care, Koyilandy; Sree Ramakrishna Asrama Charitable Hospital, Sasthamangalam, Thiruvananthapuram; Welfare Drivers’ Association, Pangode, Thiruvananthapuam; Gandhipuram International Trust, Pathanapuram and Government Old Age Home, Kasargode.

• Vehicle to Special School for Mentally Retarded Children, managed by Mahatma Gandhi Seva Sangam, Vasudevanallur, Tirunelveli and Battery operated vehicle to remove waste from doorsteps to Shencottah Municipality.

Social Circles

Social Circles are voluntary organizations formed by our staff members working in branches and administrative offices for undertaking social service activities. They address themselves to the requirements of their area of operation and extend assistance, which are outside the purview of banking services. Voluntary participation by the staff members and independent assessment of the requirements of the society under the guidance of the parent institution are unique concepts in the functioning of the Social Circles. They are excellent public relation tools to derive acceptance in the society. The Bank is having 980 Social Circles functioning at various branches and administrative offices, spread all over India.

Major Social Circle activities done:

• Social Circles conducted programmes of Health Care activities like Blood Donation Camps and Cancer detection camps, provided equipments, cots, water purifier, washing machines, wheel chairs and medicines to hospitals and primary health centres, in addition to providing bed sheets and food packets to patients.

• Extended financial support to pain & palliative clinics to improve home care treatment provided to terminally ill & bed ridden patients, for taking care of HIV afiected children, for rehabilitative measures for mental patients.

• Distributed Scholarship to HIV infected students, Donated Multimedia projector to Autism Special School, Provided equipments to Regional Ophthalmic Centre and organized Seminar on Bio farming.

• This year on 13th Nov, 2015 Social Circle day was observed by most of the Social Circles as Senior Citizens’ day. Many welfare activities for the Benefit of older citizens were organized on the day.

• Donated one day’s privilege leave by employees for the Benefit of Chennai Flood victims. Also supported the relief measures of Social Circles of Chennai Region by collecting resources from the staff members.

21. SPORTS AND GAMES

Cricket ‘A’ Team

• Bank’s Cricket ‘A’ team has participated in various All India/All Kerala tournaments. Out of the 6 tournaments played, the team won in 3 and became runner up in 2. The Team also won the 2 matches it played in the mandatory District League matches.

• As recognition of the performance of the team, 2 players are selected by the Kerala State team to represent the State Senior Team in the Ranji Trophy and 1 player each to represent State U-25 and U-23 Kerala State Teams.

Cricket ‘B’ Team

• Bank’s Cricket ‘B’ team has participated in the League matches organized by Thiruvananthapuram District Association. Out of the 12 matches played, it has won 8 matches.

Football Team

• Bank’s Senior Football team participated in 5 tournaments. Out of which, won in 2 and lost in 2 in Semi final and 1 in Quarter Final.

• Bank’s 9 players participated in the Santhosh Trophy representing the Kerala State Team during the period.

Junior Football team

• Bank’s Junior Football team consisting of school/ college going children has been elevated to the District Super Division. 2 team players represented Kerala University in the All India Inter University tournament.

22. Changes in the Board of Directors

During the course of the financial year 2015-16, the following changes have occurred in the Board of Directors of the Bank.

1. Shri. B Ramesh Babu, Chief General Manager (A&S), State Bank of India, Director appointed under Clause (c) of sub-section (1) of Section 25 of the State Bank of India (Subsidiary Banks) Act 1959, tendered his resignation upon his transfer to Chennai Circle on 24th August, 2015, from the Board of Directors.

2. Shri. Ramesh Chandra Srivastava, General Manager (A&S), State Bank of India, Director appointed under Clause (c) of sub-section (1) of Section 25 of the State Bank of India (Subsidiary Banks) Act 1959, tendered his resignation upon his transfer to Zonal inspection Office, Bengaluru on 27th August, 2015, from the Board of Directors.

3. Shri. Neeraj Vyas, Chief General Manager (A&S), State Bank of India was appointed as Director under Clause (c) of sub-section (1) of Section 25 of the State Bank of India (Subsidiary Banks) Act 1959 with effect from 24th August, 2015 in place of Shri.B. Ramesh Babu.

4. Shri. Ravi Nandan Sahay, Chief General Manager (A&S), State Bank of India was appointed as Director under Clause (c) of sub-section (1) of Section 25 of the State Bank of India (Subsidiary Banks) Act 1959 with effect from 28th August, 2015 in place of Shri. Ramesh Chandra Srivastava

5. Shri. C Rajkumar, Director under Clause (cb) of sub-section (1) of Section 25 of the State Bank of India (Subsidiary Banks) Act 1959, tendered his resignation upon his cessation to be an office bearer of the ABOA unit of State Bank of Travancore, on 15th September, 2015.

6. Shri. Vijay Kumar Monga, General Manager (A&S), State Bank of India was appointed as Director under Clause (c) of sub-section (1) of Section 25 of the State Bank of India (Subsidiary Banks) Act 1959 with effect from 30th September, 2015.

7. Shri. Ashok Kumar Singh, Director appointed under clause (e) of sub-section (1) of section 25 of the State Bank of India (Subsidiary Banks) Act 1959 ceased to be Director with effect from 15th January, 2016.

8. Shri Anshuman Sharma, Deputy Secretary, Department of Financial Services, Government of India, was appointed Director under Clause (e) of sub-section (1) of section 25 of the State Bank of India (Subsidiary Banks) Act 1959 with effect from 28th March, 2016 in place of Shri. Ashok Kumar Singh.

The Board of Directors welcomed Shri Neeraj Vyas,

Shri Ravi Nandan Sahay, Shri Vijay Kumar Monga and Shri Anshuman Sharma as Directors of the Bank.

The Board of Directors place on record their appreciation and thanks for the valuable services rendered by Shri B Ramesh Babu, Shri Ramesh Chandra Srivastava, Shri C. Rajkumar and Shri Ashok Kumar Singh during their tenure as Directors of the Bank.

23. Board and Executive Committee Meetings

During the year 2015-16, 7 Meetings of the Board of Directors were held. The Executive Committee of the Board of Directors met 16 times.

24. Statutory Audit

M/s Kumar Vijay Gupta & Co. New Delhi, M/s G.Venugopal Kamath & Co. Kochi, M/s Gopalaiyer and Subramanian, Coimbatore and M/s. Babu A Kallivayalil & Co. Kochi were appointed as Statutory Auditors of the Bank for the year 2015-16 by State Bank of India, with the approval of Reserve Bank of India. The Board of Directors sincerely appreciates the valuable suggestions offered and the excellent support and cooperation extended by the Statutory Central Auditors for the completion of the audit well in time.

25. Acknowledgments

The Board of Directors gratefully acknowledge the valuable advice and support extended by the Ministry of Finance, Government of India, Reserve Bank of India, Indian Banks’ Association, State Bank of India and the cooperation and support extended by the Securities and Exchange Board of India, Financial Institutions, Stock Exchanges and Correspondents. The Board also wishes to place on record its sincere appreciation for the excellent support, goodwill and patronage received from the esteemed customers and shareholders, the support and co-operation extended and contributions made by the members of staff- award and supervising. The Board also places on record its appreciation for the contributions made by the Employees’ Union and Officers’ Association.

By Order of the Board,

Jeevandas Narayan

Managing Director