Union Bank of India Management Discussions.

1. Global Economy

1.1 Global macroeconomic landscape was highly volatile during FY 2019-20 driven by escalation of trade tensions, disorderly Brexit and volatility in crude oil prices. As per International Monetary Funds World Economic Outlook report, global growth lowered to 2.9 per cent in 2019 from 3.6 per cent in 2018.

Volatility was further intensified with outbreak of COVID-19 pandemic in February-March, 2020 and related slump in economic activities thereafter.

1.2 Risk aversion was strongly witnessed in financial markets during the FY 2019-20 amidst sporadic bouts of turbulence around trade tensions, geopolitical flashpoints, uncertainty surrounding Brexit and a subdued global growth outlook. Global trade volume grew by 0.9 per cent in 2019, significantly lower from 3.8 per cent in 2018. Markets were not adequately moved despite expansionary monetary policy stances of leading Central Banks. Equity markets, in particular, experienced high volatility with stocks of Emerging Market Economies (EMEs) undergoing sell-offs on fears of political unrest in Hong Kong and debt default concerns in Argentina.

1.3 Amid the Covid-19 outbreak, IMF expects that global economy would experience its worst recession since the Great Depression in 2020, more severe than that seen during the global financial crisis a decade ago. While imposition of strict lockdown and related stagnation of economic activity is projected to shrink global growth dramatically, a partial recovery is projected for 2021. However, the level of GDP is expected to remain below the pre-pandemic trend, with considerable uncertainty about the strength of the rebound.

1.4 Pandemic led disruptions are wide spread and set to intensify further causing massive dislocations in global production, supply chains, trade and tourism.

Global output is now seen as contracting in 2020. IMF projects global growth to decelerate by 4.9% in 2020 with recovery at 5.4% in 2021.

1.5 Nevertheless, investor confidence is gradually building-up due to monetary and fiscal policy actions undertaken by Governments & regulators.

2. Domestic Economy

2.1 Indian economy has been experiencing demand slow down since the beginning of the FY 2019-20. As per second advance estimates of National Income released by the Central Statistical Organisation (CSO), GDP growth for FY 2019-20 stood at 4.2% compared to 6.8% in previous year. Real GDP growth stood at 4.8% in Q1 FY2019-20. During subsequent quarters, GDP registered a growth of 4.3%, 3.5% & 3.0%, respectively. Disruption of economic activities as a result of the lockdown in the last week of March, exacerbated the fall in GDP growth which was already in downtrend. Nevertheless, agriculture was supporting the growth for almost all the quarters by growing at 4.0% during FY 2019-20 up from 2.4% in same period previous year. Industry and services sector growth was 0.9% and 5.5% respectively during the FY 2019-20 compared to 4.9% and 7.7% respectively in FY 2018-19.

2.2 The current macroeconomic scenario is largely driven by the effects of pandemic. While the first level impact would be on economic activity in India directly through domestic lockdown, second round effects would operate through a severe slowdown in global trade impacting our exports.

3. Price scenario

3.1 Headline inflation as measured by the Consumer

Price Index (CPI) increased by average 4.7% during the FY 2019-20 which was below the target upper tolerance level of 6%. However, headline inflation breached the committed target and peaked to 7.6% in January 2020 due to sharp spike in prices of vegetables, fruits and petroleum products.

3.2 Core inflation (inflation excluding food& energy) remained range-bound during the FY 2019-20 at average 4.0% propelled by a series of cost pushes.

3.3 Since March 2020, inflation outlook has become highly uncertain due to the COVID-19 outbreak turning into a pandemic. Crude oil prices have collapsed to lows not seen since early 2000s. With several major economies in lockdown mode, demand conditions weakened sharply causing overall decline in prices.

4. Stock market performance

4.1 Domestic financial markets exhibited divergent movements during the FY 2019-20. While Nifty declined by 23.8%, Sensex fell by 26.0% during the FY 2019-20. Global spill over and trade volatilities weighted on domestic market sentiments. Nonetheless, timely actions of RBI through rate reduction and liquidity management operations have partially supported the markets. However, in the last quarter of the FY 2019-20, growing concerns about the domestic economic slowdown, fiscal slippages, geo-political tensions and heightened uncertainties caused by the rapid spread of COVID-19 posed significant challenges to marke t movements.

5. Yield Movement:

5.1 Benchmark 10 year G-sec yield softened during FY 2019-20. The yield declined from 7.73% at the beginning of the FY, to 6.67% as on March 31, 2020. Yield volatility was observed due to persistent worries about the Centres finances, expectation of a rise in inflation prints, subdued appetite for government bonds and hardening of US treasury yields. Yield movement was very volatile after spread of pandemic and related decline in market confidence. Avg. G-sec yield for the FY 2019-20 was at 6.84%.

6 External Sector

6.1 Indian exports shrank by 4.8 per cent during FY 2019-20 to USD 314 billion from USD 330 billion previous year. Though the adverse impact of COVID-19 on global supply chains and economic activity has lowered the exports, trade was at discouraging note even before the pandemic. Indian imports contracted by 9.1 per cent during FY 2019-20 to USD 467 billion from USD514billion previous year. With imports declining more than exports, the trade deficit narrowed to USD153 billion in FY 2019-20.

6.2 In the forex market, the Indian rupee (INR) has been under continuous downward pressure. During FY 19-20, the rupee witnessed sharp decline of 9.34 per cent and ended at 75.60 against US dollar. Trade uncertainties, cross-border capital movements and then Corona virus strongly weighted on currency performance.

6.3 RBI has added significantly to the forex reserves during FY 2019-20. From USD 414 billion as on April, 2019, forex reserves stood at USD 476 billion of March 2020, cumulative addition of USD 62 billion. However, over the same period previous year, forex reserves were depleted by USD 12 billion.

7. Liquidity conditions

7.1 Surplus liquidity conditions persisted in large part of 2019-20. Systemic liquidity surplus, as reflected in absorptions under the LAF, averaged Rs.51,710 crore in June 2019 and progressively increased to Rs.1.22 lakh crore in September 2019 to Rs.2.61 lakh crore in December 2019 and Rs 2.86 lakh crore in March 2020. RBI has taken timely liquidity management moves to deal with the money market volatility. The surplus liquidity was absorbed through reverse repo operations under the LAF.

8 RBIs policy decisions

8.1 During FY 2019-20, RBI has reduced the key policy Repo rate by 235 bps. While 160 bps reduction was through its six conventional monetary policies, 75 bps reduction was through its unconventional seventh policy announced on the backdrop of slow down and pandemic stress. Reverse repo rate was reduced by 175 bps from 5.75 per cent to 4.00 per cent during the FY 2019-20. Reverse repo rate was reduced by 85 bps in six conventional policies while 90 bps was reduced through its seventh policy.

8.2 Monetary policy transmission to banks term deposit and lending rates has improved. The WALR on fresh rupee loans declined by 60 bps (April 2019-March 2020).Similarly, term deposit rate was reduced by 38 bps during the FY 2019-20 (April 2019-March 2020).

8.3 Besides, the RBI undertook unconventional operations in the form of auctions what is termed as ‘operation twist involving the simultaneous sale of short-term government securities and purchase of long-term securities. The Reserve Bank also conducted five long term repo auctions of 1 year and 3 years tenors to inject liquidity and improve monetary transmission. It also conducted two sell-buy swap auctions to inject cumulatively US dollar liquidity into the forex market.

9. Banking environment:

9.1 The banking sector continued to face the challenges of poor asset quality, sluggishness in profitability as well as lower demand. Both corporate and retail demand was weak during the FY 2019-20.

9.2 Despite reduction in term deposits rates from 7.50 to 6.40 per cent (upper bound) during the FY 2019-20, inflow of deposits continued in 2019-20. During the year, the aggregate deposits growth has remained in the range of 9% to 11%, before ending at 7.9% in FY20

9.3 Credit off-take during 2019-20 was muted with non-food credit growth at 6.1 percent lower than 13.3 per cent in the corresponding period of the previous year. The slowdown in credit growth was spread across all bank groups.

9.4 On sectoral basis, credit growth in all the key sectors, including agriculture, industry, services and retail was lower than its previous year numbers. Agriculture grew by 4.2 per cent in FY 2019-20, compared to growth of 7.9 per cent in same period previous year. Industry, services and retail grew by 0.7 per cent, 7.4 per cent and 15.0 per cent respectively in FY 2019-20 compared to 6.9 per cent, 17.8 per cent and 16.4 per cent respectively in the previous year.

10. Resources management:

10.1 Total business of your Bank grew to Rs.797589 crore as on March 31, 2020 from Rs.743107 crore in previous year recording 7.6% y-o-y growth. Total deposits of your Bank grew by 8.4 per cent to Rs.450668 crore as on March 31, 2020 from Rs.415915 crore in previous year. Current and Savings deposits (CASA) comprise 35.6% of total deposit, grew by 6.8% during the FY 2019-20. Total advances of your Bank grew by 6.6% during the FY 2019-20 from Rs. 3,25,392 crore as on March 31, 2019 to Rs. 3,46,921 crore as on March 31, 2020.

Table 1 : Composition of Deposits

(Rs. in crore)

Parameter As of March 31st, 2020 As of March 31st, 2019 Annual Growth
Absolute (%)
Total Deposits 450668 415915 34753 8.36
CASA Deposits 160373 150141 10232 6.82
Saving Deposits 133958 123628 10330 8.37
Current Deposits 26415 26513 -98 -0.4

11 Credit Management

11.1 Retail:

Your Bank retail lending portfolio grew by 6.0% in the FY 2019-20. The retail loan portfolio grew from Rs.57,093 crore as on March 31, 2019 to Rs.60,519 crore as on March 31, 2020. With in retail, personal loan growth has made a significant jump in FY 2019-20.

Home loans, having the highest share in retail, grew by 4.3%. Vehicle and education loans also improved during the year. The Bank has taken innovative measures to attract new business. Accordingly, it has introduced retail loan products such as home, vehicle and education on psbloanin59minutes portal. For further strengthening the business mobilization, your Bank has launched product specific campaigns along with expansion in tie-ups/partnerships. Your Bank has been leveraging data analytics extensively to garner new business from potential leads. Bank strives to maximize the processing efficiencythrough centralized processing centres (ULP).

Table 2: Product wise Y-o-Y growth under Retail Lending is as under:

(Rs. in crore)

Parameter As of March 31st, 2020 As of March 31st, 2019 Annual Growth
Absolute (%)
Home Loan 29305 28085 1220 4.3
Vehicle Loan 4456 4164 292 7.0
Education Loan 3638 3400 238 7.0
Mortgage Loan 4862 4707 155 3.3
Personal loan 2325 1445 880 60.9
Others 15933 15290 643 4.2
Total Retail 60519 57092 3427 6.0

11.2 Agriculture:

11.2.1 Agriculture lending has always been the priority area for your bank. Agriculture advances constituted 16.98 per cent of Adjusted Net Bank Credit (ANBC) as of March 31, 2020. Banks Agriculture advances as on March 31,2020 were at Rs.54,111crore (Including RIDF) and grew by 3.04 per cent over 2018-19.

11.2.1 Outstanding credit to small and marginal farmers as of March 31, 2020 stood at Rs. 31,448 crore which constituted 9.87 per cent of ANBC against the benchmark of 8.0 per cent of ANBC. During FY 2019-20, 2.7 lakh fresh Kisan Credit Cards were issued.

11.3 Micro, Small & Medium Enterprises (MSME):

11.3.1 Your Bank has keen focus on delivering to MSME sector. Lending to MSMEs stood at Rs.70,381 crore as on March 31, 2020 registering an annual growth of 4.8 per cent. Within MSME, MSE lending stood at Rs.53137 crore, as on March 31, 2020, registering a growth of 5.4 per cent.

11.3.2 During the FY 2019-20, 20207 new loans have been sanctioned under Light Commercial Vehicle finance(LCV) amounting to Rs. 558 crore. As on March 31,2020 LCV portfolio stood at Rs. 2076.5 crore. 11.3.3 Your Bank has revamped existing SARAL (Central Processing Centres for MSME proposals) Structure to make it an acquisition centre in addition to processing. As of March 2020, number of SARAL and SARAL Lites stood at 48. Three new SARAL lites were opened during the FY 2019-2020.

11.3.4 Bank has deployed Relationship Managers in SARALs for lead generation and conversion into productive business. Major focus has been on Centralization and Verticalization of SARALs.

11.3.5 TREDS platform: Your Bank has been one of the pioneers in adopting the TReDS platform for lending to MSME segment. These unique online platforms have inbuilt hassle free processes for ensuring adequate financial support to MSMEs. We are already on board with 3 RBI registered TReDS platforms viz. RXIL, Invoicemart and M1xchange. Bidding on these platforms has crossed the Rs.1590 Crore for March 2020.

Table 3: Breakup of MSME Portfolio

(Rs. in crore)

Parameter As of March 31st, 2020 As of March 31st, 2019 Annual Growth
Absolute (%)
Micro Advances 22505 22617 -112 -0.5
Small Advances 30632 27807 2825 10.2
MSE Advances 53137 50424 2713 5.4
Medium Advances 17244 16751 493 2.9
MSME Advances 70381 67174 3207 4.8

11.3.6 Achievements under psbloansin59minutes.com portal:

Your Bank has also been one of the best performing banks on psbloansin59minutes.com portal. As of 31.03.2020, 11475 MSMEs have been given In-Principle sanction through this portal. Of these, 7075 proposals amounting to Rs. 3369 crore were sanctioned. Your bank is the first to extend upto 5 crore finance to MSMEs.

New initiatives to boost MSME Advances

11.3.7 Scheme for Financing Gems, Jewellery and Diamond (GJD) Sector:

During FY 2019-20, a new scheme for financing the GJD sector is being introduced In this scheme, all the units engaged in Manufacturing and Trading activity i.e. Retail & Wholesale Traders of GJD are eligible under the scheme. Under this scheme, both term loan and working capital limits can be availed (fund and non-fund based).

11.3.8 Partial Credit Guarantee Scheme(PCGS) for Purchase of High Rated Pooled Assets from NBFCs / HFCs:

In line with Ministry of Finance guidelines on Partial Credit Guarantee Scheme to Public Sector Banks for purchase of high rated pooled assets from financially sound NBFCs / HFCs, a dedicated scheme has been introduced by your Bank. The scheme provides one time six months partial credit guarantee for purchase of high rated pooled assets from financially sound NBFCs/ HFCs.

In this scheme, Government would provide guarantee to an extent up to first loss of 10% of default.

11.3.9 Launch of Union e-Way Bills Solution:

Your Bank has introduced the GST invoice validation service through Union e-Way Bills solution to enable digitization of trade documentation, authentication and non-repudiation. This service allows the Bank to validate invoice data provided by a Supplier against details available within the Goods and Service Tax Network and Electronic-Way (E-Way) Bill number. Invoice Validation Service is intended to be used for fraud mitigation. The scheme offers a very competitive rate of interest on validation of bills through this mechanism.

11.3.10 Introduction of overdraft and term loan facility for Business Correspondent Under Pradhan Mantri Mudra Yojana (PMMY):

The scheme is introduced to serve the financing requirements of Bank Mitra to sustain BC operations.

11.3.11 Corporate Credit:

During FY 2019-20, the large corporate advances stood at Rs.1,46,523 crore recording growth of 6.41 per cent on Y-o-Y basis. Seven industrial Finance Branches (IFBs) across the country are catering exclusively the needs of large corporate clientele. The Bank has made judicious disbursements to investment grade projects of large corporate, thus participating in the growth opportunities in the Indian economy and its global linkages.

Table 4: Summary of performance of LCV

(Rs. in crore)

Parameter As of March 31st, 2020 As of March 31st, 2019 Annual Growth
Absolute (%)
Large Corporate 146523 137695 8828 6.41
w/w Total 115307 104994 10313 9.82
Advances IFBs

11.4 Priority Sector Advances:

Your Bank remains committed towards extending credit facility to the needy segments of the society. Under priority sector advances, your Bank has registered a growth of . 1.9 per cent, which stood at Rs. 1,43,205 crore as on March 31, 2020. Priority sector constituted 44.93 per cent of the Adjusted Net Bank Credit (ANBC) against the RBI mandate of 40%.

Table 5: Priority Sector Advances

(Rs. in crore)

Parameters 31.03.20 31.03.19 Y-o-Y (%) % to ANBC Benchmark FY 2019 (% of ANBC)
Priority Sector Credit 143205 140530 1.90 44.93 40%
Agriculture Sector 54111 52517 3.04 16.98 18%
Small & Marginal Farmers 31448 28770 9.31 9.87 8%
Credit to Weaker section 41132 39971 2.90 12.9 10%
Credit to Women Beneficiaries 22027 20751 6.15 6.91 5%

Specific Lendingfor Social

11.4.2 Your Bank has continued its focus on social development and equal opportunities for all segments of the society. Accordingly the Bank extended credit facilities to various weak and unreserved sections of the society specifically women, minority community and self-help group.

11.5.4 Women Beneficiaries:

With a view to promote women entrepreneurs and to make them self-reliant, your Bank encourages credit to women entrepreneurs. During FY 2019-20, Total outstanding loans to women beneficiaries has increased from Rs.20751 crore in March 2019 to Rs. 22027 crore in March 2020 recording growth of 6.15%. This constituted 6.91 per cent of ANBC against benchmark of 5.0 per cent.

11.5.5 Minority Communities:

Your Bank is extending finance to the minority communities viz. Sikhs, Muslims, Christians, Zoroastrians, Buddhists and Jains in line with Government of India directives on welfare of minority communities. As on March 31,2020 the outstanding credit to minority stood at Rs.11,973 crore, which constitutes 8.36 per cent of Priority sector advances.

11.4.5 Weaker Section:

Your Bank has been actively participating in financing for weaker sections of society. Finances to weaker section has increased from Rs.39971 crore to Rs.41,132 crore, as on March 31, 2020, registering a growth of 2.9 per cent. Outstanding credit stood at 12.9 per cent of ANBC against benchmark of 10 per cent.

11.4.6 Rural Self Employment training Institute (RSETI):

With the aim of mitigating the unemployment problem among the rural youth, the Bank has established 14 RSETIs in districts where the bank has "Lead Bank Responsibility". As of March 31, 2020, total number of candidates trained in our RSETIs is 83718, out of which 56397 candidates have been settled.

11.4.7 Regional Rural Bank (RRB):

Kashi Gomti Samyut Gramin Bank (KGSGB), Varanasi – sponsored by Union Bank has network of 459 CBS Branches, spread over 8 districts of Eastern U.P. namely, Varanasi, Azamgarh, Jaunpur, Ghazipur, Chandauli, Mau, Bhadohi and Ambedkar Nagar. Business of KGSGB stood at Rs.15740 crore - growth of 5.8 per cent during FY 2019-20. Deposits stood at Rs.12282 crore with 61.7 per cent as CASA deposits. Advances stood at Rs.4372.99 crore, as of March 31,2020.

However as per the notification by the Government of India, KGSGB has been merged with Baroda U.P Bank, w.e.f April 01, 2020.

Key Initiatives to strengthen Priority sector:

11.4.8 Union Samridhi Kendra (USK):

Union Samridhi Kendra (USK) is a Hub and Spoke Model based banking. It holds strong potential to transform the credit delivery mechanism in Rural and Semi Urban areas. As on March 31, 2020 total 62 USKs are established with 895 mapped branches covering 35.36% of total Rural and Semi Urban Branches. In the FY 2019-20, 65714 proposals were sanctioned through these centralized processing Centers.

11.4.9 Pradhan Mantri Fasal Beema Yojana (PMFBY):

Your Bank is implementing PMFBY for the benefit of farmers who face climatic adversities very often and suffer a lot. All farmers including share cropper and tenant farmers growing the notified crops in the notified areas are covered under PMFBY. A total of 505773 loanee and non-loanee farmers were covered during the financial year 2019-20. Ban k has formulated 32 Area Specific Schemes, based on the available potential for the benefit of the farmers in the respective areas to augment lending under agriculture.

New initiatives undertaken during the year

11.4.10 Union Sampurna:

Your Bank is committed towards imparting knowledge, resources and providing continuous support to rural community in capturing the new and additional opportunities which will be beneficial for increasing production, productivity and earnings from the Agriculture and allied/other sector. It is one stop solution for supporting farmers for doubling income through diversified sources by enriching them with technology, understanding of financial products, timely credit requirement and capacity building for adoption of advance techniques in the field of agriculture.

11.4.11 Components of Union Sampurna:

• E-Kiosk: Touch screen one stop solution for banking needs and information cum Knowledge bank for farmers.

• Meeting place for Farmers: venue for enriching information, counseling, literacy, mass awareness for farmers.

• Loan acquisition centre: Support in High tech Agriculture.

• Village Knowledge centre (VKC): Information dissemination centre for improving agriculture and community development.

• Financial Literacy & Credit Counselling

Centre( FLCCs): financial literacy to ensure financial services reach the unreached and under-reached section of the society

Product launched during the year:

Kisan Credit Card for Animal Husbandry and Fishery (CCAHF)

Financing to Farmers Producers Organisation (FPO) launched during the F Y 2019-20 for the direct benefit of farming community..

11.5 Financial Inclusion:

Empowering the underserved: Your Bank has ensured that the poor and needy populace has access to affordable credit. With the JAM (Jandhan, Aadhar and Mobile) trinity gaining ground, the Bank has been in its mission to reduce leakages in financial transfers via innovative banking methods as well as to effectively garner small savings towards productive investment throughout FY 2019-20.

Table 6 : Progress under Financial Inclusion

(Rs. in crore)

Particulars 31.03.20 31.03.19 Progress Progress % FY 2019-20
Total PMJDY A/Cs 11231722 9811604 1420118 14.47%
Balance in 3030 2404 626 26.04%
PMJDY A/Cs ( inCrs)
Aadhaar 9025041 8117145 907896 11.18%
Seeded PMJDY A/Cs % of Aadhaar 80.35% 82.73% - -
Seeded PMJDY A/Cs
Mobile 7201078 5654308 1546770 27.36%
Seeding- PMJDY A/Cs % of Mobile 64.11% 59.70% - 4.41%
Seeded PMJDY A/Cs RuPay Cards issued in PMJDY A/Cs 6817076 5615288 1201788 21.40%

11.6.1 During the year, your Bank enabled the facility of opening PMJDY Account instantly through BC points. Now all the Bank Mitras can open instant e-KYC PMJDY account of citizens through the Micro ATM, Mobile or Kiosk then & there at BC point and even transaction facility is provided through AePS to such instant accounts. Bank Mitras can also enroll customers to Social security schemes viz. APY, PMSBY and PMJJBY.

11.6.2 Aadhaar Enrollment Centre:

As per UIDAI guidelines, all commercial banks have been instructed to open Aadhaar Enrollment Centre in 10 % of Bank Branches. Accordingly, Your Bank opened Aadhaar Enrolment Centre in 429 Branches across India.

12 International Banking

12.6 Your Bank has presence in the worlds major financial centers of Hong Kong, DIFC, Dubai and Sydney. Your bank is building value in international markets by meeting the banking requirement of Corporate, Cross-border lending and trade finance.

12.7 International business of your Bank has increased by 33.0 per cent during FY 2019-20. While our total advances increased by 36 percent, total deposits grew by 25 per cent during the FY 2019-20. Operating profit of foreign branches increased by 25 per cent during the FY 2019-20.

Table 7: Overseas Operations

(Rs. in crore)

Parameters As of March 31st , 2020 As of March 31st, 2019 Annual Growth
Absolute (%)
Overseas Deposits 3649 2816 833 25.0
Overseas Advances 20696 14460 6236 36.0
Total Overseas Business 24345 17276 7069 33.0

13 Treasury Operations:

13.1 The treasury division handles domestic treasury operations, for ex operations, fixed income derivatives products, equity and other alternate asset classes. Treasury is equipped with a state of the art dealing room with all facilities to extend all types of treasury services to its clients spread across the country and keep pace with latest developments in the markets. A basket of financial products are offered to the Banks clients like forwards, options, interest rate swaps and level currency swaps facilitated by advanced technology platforms.

13.2 Your Bank aims to act as prudent liquidity manager in line with Banks corporate goal. Treasury department of your Bank focuses on generating optimum profit while managing the credit, market and liquidity risks as per policy guideline. Your Bank also aims at better cash management by different short-term money market instruments and for ex market. Bank focuses on maintaining a decent SLR & Non-SLR investment book with appropriate duration which will help in enhancing profitability.

13.3 Profit on Sale of Non-Core asset: During the FY 2019-20, your Bank had monetized gross amount of Rs. 278 crore and net capital gain were Rs. 255 crore.

14 Asset quality:

14.1 During FY 2019-20, your Bank made a cash recovery of Rs. 4267 crore in addition to up gradation of accounts to the tune of Rs.1871 crore. Control over slippages and better reduction was possible through continuous efforts and well-designed strategy for NPA management. Movement of NPA for FY 2019-20 is as under:

Table 8: Movement of NPA

(Rs. in crore)

Particulars FY 2019-20 FY 2018-19
Gross NPA (Opening) 48729 49370
Additions 14911 13577
Less: Reductions 14555 14218
(I) Upgradations 1871 1938
(II) Recoveries 4267 4509
(III) Write-off 8417 7771
Gross NPAs (Closing) 49085 48729
Net NPAs 17303 20332

Measures to improve recovery:

A structured settlement scheme named as Centenary Settlement Scheme for Doubtful and Loss assets (CSSDL) is operational for settlement of NPAs in doubtful & loss category as on 31.12.2018 with outstanding upto & including Rs.50.00 crore. The scheme was non-discriminatory & non-discretionary for in nature and delegation was given at field quick settlement of the eligible NPA accounts.

Your Bank has launched a special campaign ‘Mission 5000 from 01.01.2020 to 31.03.2020 for recovery of NPAs as of December 2019.

14.2 Proactive Monitoring:

14.3 Centralized Call Centre: Your Bank has set up Centralized Call Centre for monitoring of SMA borrowers under Retail and MSME sector within the range of 3.00 lakh to 5.00 Crore. Stressed accounts under credit card portfolio have been also covered by call centres.

14.4 Specialised cell:

By taking a proactive step in monitoring, your Bank has set up monitoring cell for accounts in the range of Rs 100.00 cr to Rs 250.00 cr and Rs 250.00 cr and above.

14.5 Dynamic Review of accounts:

Quality Dynamic review of high value accounts is undertaken by your Bank regularly. We are also channelizing information from Fintech platform for building database of financials.

14.6 Preventive Monitoring:

Your Bank is extensively using the technology for timely analysis of data. RPA (Robotic Process Automation), machine learning and Oracle Data base is being used for streamlining and updating the customer data. Your Bank has also come up with the concept of Potential Stress Assets under which rigorous analysis of accounts/portfolio is conducted based on Early Stress Signals (ESS).

14.7 Function of the Web Portal:

For streamlining & real time dissemination of information, a web portal has been made available for branches and verticals covering Dash Board, Defaulters List & all other parameters of Credit Monitoring. The portal can be accessed by each and every staff of the branch/ office across the Bank. This information helps in handling the default cases swiftly and prevents any institutional delay within the Bank.

15 Relationship Banking

15.1 Your Bank earned income of Rs. 129 crore through distribution of third party products, during the year

Table 9:Income from third party business during FY 2019-20

(Rs. in crore)

Business Parameter FY2019-20 FY2018-19 % Growth
Life Insurance 89.95 84.71 6.19
Non Life Insurance 14.43 13.43 7.37
Health Insurance 11.79 10.95 7.67
Mutual Fund 12.63 17.2 -26.6
Total 128.8 126.3 1.98

Initiatives during the year:

15.2 Online Sales of Union Mutual Fund Schemes -

In order to promote digitization, Your Bank developed system capabilities to enable customers buy third party products like Insurance and Mutual Funds online using the Banks website and Mobile App.

Facility to buy Union Mutual Fund schemes through Banks website and U-Mobile App has been commenced.

15.3 U-mobile App based enrolment for PMSBY Scheme:

Option to buy PMSBY insurance cover through U-Mobile App has been developed. This is in addition to an option to buy PMSBY insurance cover through corporate website for Banks net banking customers. More than 9800 customers have enrolled under PMSBY through U-Mobile.

15.4 Launch of new products:

"Group Cancer "medi claim was launched in association with Religare Health Insurance Co Ltd in Aug 2019. The product has received overwhelming response and sold 23240 policies.

16 Government Businesses:

16.1 Resource mobilization through Government Business stood at Rs. 97650 crore as of March 31, 2020 compared to Rs. 99375 crore of previous year. Bank has opened 9283 new accounts under National Pension system recording 28% growth over previous year. Also, your Bank has made considerable progress in opening small savings accounts during FY 2019-20 which grew by 50% over the previous year.

16.2 New initiatives to increase Government Business:

Integration with Government e-Marketplace (GeM): Your Bank has integrated with GeM for collection of various registration fees, issuance of online e-PBG online deposit, collection of and security deposit.

Installed an ATM at Passenger Terminal Building (PTB) Dera Baba Nanak at "Kartarpur Corridor".

e-PPO implementation for Air Force and Railway pensioners.

Integration with MCA for online current account opening.

Online account opening of NPS using mobile banking.

Online account opening of SCSS through internet Banking

Reporting of Small Saving Schemes through PFMS.

On-boarding of 9,500 Gram Panchayats on PFMS platform.

Collection Account of Prasar Bharti.

Credit facility to HIL (India) Limited & Centralized salary disbursement, PG Services for online buyer collection.

Mobilised 7000+ Pension accounts of BSNL.

Mobilised 154 MPLAD accounts of 17th Lok Sabha.

SMART Scheme Pune, Maharashtra (MoU Signed for Credit Facility to FPOs in Maharashtra)

17 Human Resource Management:

Your Bank strives to offer the best-in-class employment experience by investing in its human capital and taking measures to constantly reinvent its people processes. Best practices from the industry are adopted to meet the corporate objectives of the Bank through effective employee engagement. The industry has recognized and lauded your Banks efforts through numerous awards received during FY 2019-20, for HR Innovation, Leadership, and Training.

17.1 Manpower Strength:

The total Manpower of your Bank as on March 31, 2020 stood at 37318.

Table 10: CATEGORY OF EMPLOYEES

Year Officers Clerks Sub-Staff Total Total Staff
Male Female Male Female Male Female Male Female Strength
2018-19 16557 5215 8503 3211 3202 574 28262 9000 37262
2019-20 17398 5671 8050 3045 2668 486 28116 9202 37318

17.2 Specialization through Job Families: Your Bank has successfully introduced the Job family Scheme to develop a pool of specialists in every field of banking. Specialization achieved through this scheme shall bear many benefits for the Bank, while giving employees the opportunity to working their chosen field.

17.3 Learning & Competency Development: Your Bank has implemented innovative learning by use of technology platforms in alignment of its corporate objectives. Your Bank has increased the horizon of E-learning platform on principle of anywhere and anytime learning for continuous development of its employees by having a dedicated portal ‘Union Prajna and launching the E-learning Mobile App. The learning modules in Union Prajna are constantly developed in line with different job roles.

17.4 Union Bhavishya: Banks ambitious leadership development and capacity building program, Union Bhavishya, has groomed over 1500 employees in the past three financial years.

17.5 Policy on Rewards & Recognition: Your Bank has introduced an umbrella policy on Rewards & Recognition to direct focus on performance to meet the strategic goals of the Bank. This policy defines the scope of reward and recognition schemes being implemented in the Bank for all employees with the intent to appreciate good effort and involvement by individuals and teams.

17.6 Policy on Succession Planning: Your Bank has developed and introduced the policy on Succession Planning in the interest of business continuity. This entails identifying Key Positions which cannot be left vacant and identifying high potential individuals or HPIs for manning them. This Policy shall serve as a mechanism for the steady flow of future leaders for the Bank, through continuous capability building initiatives.

17.7 Classroom Trainings: Your Bank has conducted 868 in-house training sessions, 336 locational programs and 70 workshops covering 36179 employees during FY 2019-20. Further, your bank has provided trainings to 315 employees to learn the latest developments in the industry at external institutes.

17.8 Employee Engagement Programs: Employee engagement is a vital differentiator when it comes to growth and innovation. Your Bank has organized different theme-based employee engagement programs during FY2019-20 in the form of open houses, feedback surveys, inclusion drives, competitions, and awareness programs.

18 Branch Network

18.1 Branch network of your Bank is widely spread across the country with 4,281 branches and 3 overseas branches as on March 31, 2020. Out of these 59 per cent of the branches are located in rural and semi-urban center.

Table 11: Branches Network As on 31.03.2020

Rural Semi- Urban Urban Metro Foreign Total
No of Branches 1245 1286 850 900 3 4284
Branches (%) 29 30 20 21 -- --

19 Measures to enhance Digital Network

19.1 Your Bank has pioneered in ensuring digital first policy

Bank has evolved over time with digital products and policies. New products and digital banking features have given consumers the convenience of not only banking on the go but also from the comfort of their home. Our Banks digital transformation initially began with Internet banking, SMS Banking, Debit cards and ATMs. Coupled with Digital India campaign, the journey has been progressive in line with Govt. of Indias many new digital initiatives and policy changes over the last few years.

19.2 Mobile Banking: With an aim towards a single application for all banking needs, the erstwhile m-Passbook and UPI apps were merged to U-Mobile app. The progress during 2019 was incremental both in terms of new registrations and addition of new services and features. The total no of U-Mobile users increased to 52.64 lakhs in FY 2019-20 from 33.50 lakhs users in FY 2018-19 thereby registering a growth of 57% over the previous year.

19.3 EASE 2.0 (Enhance, Access and Service, Excellence): With focus on providing maximum services through alternate digital channels, your Bank has substantially added new services and features during the FY 2019-20.

4 Debit Cards: During the last two years, debit card issuance has witnessed stricter regulatory compliance owing to EMV mandate. We have witnessed a huge surge in the number of debit card transactions during FY 2019-20 post Banks digital promotion on Social Media and also tie-ups with Make my trip, Apollo Pharmacy, Ferns n Petals and Book my show for debit card promotion.

Table 12: Growth in Digital Channels (Unit absolute)

Channels 31.03.20 31.03.19 Annual Growth
Absolute (%)
ATM 6895 6650 245 3.7
PoS 55246 50905 4341 8.5
Cashless Campus 275 232 43 18.5
Mobile Banking (lakhs) 52.64 33.4 19.24 57.6
Internet Banking (lakhs) 22.22 19.94 2.28 11.4

New initiatives

19.5 Automated Debit card Issuance: Bank has now automated debit card issuance system without manual intervention. The ready kit debit cards are now activated on the go which was earlier processed in T+1 day. This has reduced the activation time considerably from 48 hours to few seconds.

19.6 Acquisition of merchant business: Your Bank has introduced low cost Paytivo PoS terminals for acquiring merchant business. Attractive transaction based PoS model for merchants introduced offering zero rental for merchants generating high volume and value.

19.7 Internet Banking: The internet banking application is updated with new features by adapting to latest market trend. Services such as Bill payment through BBPS and applying for IPO have been added.

19.8 Social media:

Banks official pages were launched in Facebook, Twitter, LinkedIn, YouTube and Instagram under project Union Connect in 2016.

• With continuous moderation and monitoring of comments and activities, your Bank is maintaining Facebook page rating as "Very Responsive with 98% response rate and 5 minutes response time" and Twitter handle rating as "immediate response" and "Responsive 24/7".

20 Risk management – A proactive approach towards identifying and mitigating risk:

20.1 Your Bank has a proactive approach towards risk management. Its risk philosophy involves developing and maintaining a healthy portfolio within its risk appetite and regulatory framework. Your Bank constantly endeavour to ensure that business function partners with the risk management function to enhance shareholder value and ensure judicious use of available capital.

20.2 Risk Management is a Board driven function in the bank with the Risk Management Committee (RMC) at the apex level supported by operational level committees of top executives for managing various risks. The Board of Directors of the Bank approves the Risk strategy and Risk policies for the Bank. The RMC supervises implementation of the risk strategy and policies, reviews the level and direction of risk, prudential ceilings, portfolio diversification and monitors the risk reporting. The risk strategy and policies are effectively communicated to all branches and offices of the Bank

20.3 Your Bank addresses Credit, Market and Operational risk through appropriate policies, organization structure, risk management techniques, adequate systems, procedures, monitoring and reporting mechanisms. It has a well defined risk appetite statement and the independent risk function to ensure that the Bank operates within its risk appetite.

Credit Risk Management:

20.4 Credit Risk Management Committee (CRMC):

CRMC oversees the credit risk function in the Bank. In line with its asset quality management objective, Bank strives to maintain a strong asset quality through disciplined credit risk management. Bank has well defined credit appraisal mechanism and risk assessment practices in place for identification, measurement and monitoring. Bank has various instruments for credit risk management, which include credit risk management policies, Credit approval Committee, Prudential exposure limits, Risk Rating system, Risk based pricing and Portfolio Management.

20.5 Your Bank has well defined and comprehensive internal rating / scoring models for retail and Corporate Credit risk Assessment. Also, Bank has set up a centralized rating pool at Central Office to improve the rating quality, create a robust rating data base for better administration of rating models. For better management of risk assessment, Centralized rating pool is given the final responsibility for finalization of credit rating of the corporate borrowers whose rating process was initiated at the branch level. Apart from internal credit rating models, Bank has introduced dynamic rating of listed entity and credit risk review framework for MSME and corporate borrowers as per EASE guidelines.

20.6 Bank has a standardized and well defined approval process for all advances. It adopts a committee approach for credit sanctions and has central approval committees at various levels.

20.7 RWA computation Methodologies: Credit RWA for loan & advances is computed under the Standardized Approach prescribed by RBI.

Market Risk Management:

20.8 Asset Liability Committee (ALCO): ALCO puts in place Asset Liability Management Policy, Treasury Policy and Market Risk Management Policy to mitigate market risk in the banking and trading books. ALCO has also streamlined respective policies in view of proposed amalgamation of Andhra Bank and Corporation Bank with your Bank from FY 20-21 to bolster holistic market risk management.

20.9 The ALCO meets regularly to review the size, mix, tenor and composition of various assets and liabilities. ALCO also decides on the pricing of Assets and Liabilities. ALCO does the identification, measurement, monitoring and management of liquidity and interest rate risk. Bank ensures proactive liquidity management, market risk management, stress testing and also put in place contingency funding plan. ALCO has implemented External Benchmark based pricing (EBLR) for asset products in line with the regulatory guidelines during the financial year and also harmonized different asset and liability products available with Andhra Bank and Corporation Bank. It has also devised a unified pricing structure for the amalgamated entity.

20.10 Liquidity management strategies: Bank has adopted the liquidity risk management guidelines issued by RBI pursuant to the Basel III framework on liquidity standards. Bank monitors liquidity risk through liquidity coverage ratio & structural liquidity position on daily basis.

20.11 Market Risk Capital Charge computation Methodologies: Market risk capital is computed under the Standardized Measurement Method (SMM).

Operational Risk Management:

20.12 The comprehensive systems and procedures, internal control system and audit are used as primary means for managing Operational risk. The bank has in place a Board approved Operational Risk Management Policy based on Reserve Bank of India guidelines. All new products introduced by the bank pass through a New Product Approval Process to identify and address operational risk issues. Variations in existing products as well as risks in outsourcing activities are also reviewed. The Bank has compiled data relating to operational losses incurred during the last thirteen years and it is analyzed for taking corrective measures so that these losses do not recur. Process has also been put in place to conduct Risk and Control Self-Assessment (RCSA) for assessing the residual risks in the processes of the various products of the Bank.

Key Risk Indicators have been identified for various processes and the threshold limits have been fixed.

20.13 Your Bank is currently following the Basic Indicator (BIA) for capital computation under Operational Risk. The Bank has received approval from RBI for adoption of "The Standardized Approach (TSA)" for Operational Risk on parallel run basis since March 2015. However, RBI have issued guidelines for discontinuance of submission of the operational risk capital charge calculations for banks under parallel run. Due to revision in Basel III framework by Basel Committee on Banking Supervision, for Operational Risk Capital calculation, ‘Standardized Measurement Approach has been proposed. The Bank will be migrating to this approach, once necessary guidelines are issued by the regulator. Till such time, Basic Indicator Approach (BIA) will continue to be used to calculate the capital charge under Operational Risk.

20.14 As a good corporate governance measure, the Bank has formulated a Disclosure Policy to have greater transparency in its working. Recognizing the importance of Business Continuity Planning (BCP), for minimizing the adverse effects of business disruption and system failure, the Bank has also put in place a BCP policy which provides a blueprint detailing a wide range of responses under disruptive environment to protect the interest of its staff, customers and assets of the Bank.

Group Risk Management

20.15 Your Bank has participated in diversified financial services like banking, securities and capital markets, insurance and retail asset businesses. Bank has put in place a framework / policy for assessment of risks in its Group entities, internal controls and mitigation measures, and capital assessment, under normal and stressed conditions with the assistance of a reputed external Consultant. The bank through its Group Risk Management Policy, aims to achieve a group-wide approach to ensure that key aspects of risk that have a group-wide impact are considered in its conduct of business.

Fraud Risk Management

20.16 Your Bank has a Board approved Fraud Risk Management Policy in place. Bank has Fraud Review Council, Operational Risk Management Committee, Credit Risk Management Committee, Audit Committee of the Board and Special Committee of Board for Monitoring of Fraud Cases to examine the cases of frauds/ attempted frauds and to put in place systems and procedures for prevention of frauds. Apart from reporting all the frauds cases of Rs. 1.00 lakh & above to the Board, the Bank also reports all the fraud cases of Rs. 1.00 crore & above to the Special Committee of Board for Monitoring of Fraud.

20.17 Your Bank has implemented Enterprise-wide Fraud Risk Management Solution (EFRM) for monitoring of transactions for prevention / early detection of frauds.

21 Compliance

21.1 Your Bank has implemented a robust compliance system along with a well documented compliance policy. The focus of compliance function is ensure adherence to regulatory, statutory, compliance with fair practice codes and other prescribed codes, government policies, the Banks internal policies and prevention of money laundering and funding of illegal activities.

Your Bank conducts regular Compliance Test Checks on Customer Service, KYC-AML checks including B Category branches and Credit Process Audit conducted across the Regions pan India. 21.2 Your Bank has established a compliance package to monitor, control & follow up communications received from Regulators/ Ministry. Periodic compliance test checks put in place for effective implementation of mandatory guidelines. The role & responsibility of compliance function is clearly defined for every tier in the Bank. Your Bank has a well established reporting system to ensure regulatory and statutory compliance through self certification process; compliance certificate is submitted by branches to the higher offices.

22 Audit

22.1 Your Bank has put in placeawelldefinedAudit Policy for risk based internal audit, management audit, concurrent audit, information security audit and foreign branches audit which have been revamped time and again by the Audit Committee of Board.

22.2 Regular Audit and IS audit of 3767 branches was conducted during FY 2019-20. Extensive Audit has been conducted by Specialized IS Auditors in 7 Central Office Verticals, 2 FGMOs, 4 Regional Offices and 20 Branches. Number of ‘High Risk branches reduced from 58 branches in the FY 2018-19 to 31 branches in FY 2019-20. Income Leakage of Rs.127 Crore was detected. 52 Branches were rated "Extremely High Risk" due to detection of Fraud at these Branches and no branch is rated under "Very High Risk".

The offsite monitoring system has been improved with the implementation of newly developed software both at Central OMC (Offsite Monitoring Cell) and Regional OMCs. O Your Bank made all audit modules live such as Risk Based Internal Audit, Management Audit, Concurrent Audit, Information System Audit, Audit of Currency Chests, Service Branches etc.

The Audit Committee of Board of Directors (ACB) met 13 times and the Audit Committee of Executives (ACE) met 6 times during the year.

23 Cyber Security

23.1 Your Bank has created separate vertical at Central

Office for overseeing Cyber Security functions (CISO Office).The CISO head reports to the Executive Director of the Bank. The Bank has deployed dedicated skilled team and technological Security Solutions to proactively help Bank in identifying any abnormality in network both internal as well as perimeter.

23.2 Your Bank has created Cyber Security Governance structure comprising of policies and Committees at executive and Board level to oversee the development of Cyber Security posture of the Bank. Your Bank has formulated Cyber Security Policy & Information Security Policy and developed respective Standard Operating Procedures. Bank has also developed Cyber Play book to handle the incident response.

23.3 Cyber Security Awareness Program (CCSAP):Your Bank has developed CCSAP program to enhance the level of cyber security awareness among its customers and employees, which has led to an increase in the overall cyber resilience.

New Initiatives:

23.4 Cyber Security Operation Centre (CSOC): Cyber-Security Operation Centre (C-SOC) is being implemented to monitor, assess and defend Bank‘s information systems.

23.5 Cyber Threat Hunting Programme: Your Bank has instituted Cyber Threat Hunting Programme and performs mock drill at a regular periodicity in a systematic manner for detecting, understanding or recovering from a cyber attack.

23.6 Bank is also availing the threat intelligence services from global threat intel service providers. They provide the various threat intelligence services such as compromised card or credential details, mule IP, mule Email ids, Mule accounts etc.

24 Technology Up gradation:

24.1 Information Technology aims to have in place a responsive, resilient and secure IT ecosystem leveraging latest technologies. Your Bank is adopting the centralization /automation /integration of internal business processes in order to enhance quality of IT services. It is taking substantial measures in securing the IT assets of the Bank.

Your Bank is also thriving to streamline the banking services for customers with cutting edge technology. Your bank has undertaken migration of Core Banking from version 7.x to 10.x, mobile application for Union Parivaar (HRMS), Central KYC mobile application to centralize the multiple KYC submission process,

E-Learning mobile application, implementation of UPI 2.0 solution and integration of transaction channels. As a part of business process transformation, your Bank has envisaged leadership and innovations in providing hassle free services to its staff by launching HRMS mobile application. This application helps in immediate sanctioning and disbursement of perks and allowances. Various measures have been taken for digitization of business process and boosting administrative efficiency like Bandwidth upgradation for all branches to minimum 2 Mbps and for all offices to minimum 4 Mbps.

Your Bank has also focused on expansion of centralized account opening under Document Management System, multilingual SMS for transactions in 5 regional languages which helped your Bank to deliver better products to the end users through various channels.

Your Bank is in process of implementing PSB Reforms Enhanced Access and Service Excellence (EASE) Agenda for transformation into digital and smart data-driven Next Gen Banking. Further, your Bank has embarked on initiatives namely APIM solution for facilitating real-time transaction processing.

In order to enhance IT Security and to secure information assets, your Bank has implemented various security solutions and is in the process of implementing Automated data classification solution to improve the treatment of sensitive data by way of automatic tagging. Your bank has taken measures to improve governance with greater transparency. Your Bank is rapidly transitioning towards data-driven decision-making by preparing roadmap for adoption of AI, ML and Analytics based solution. Your Bank is in process for Adoption of latest technologies like

Software Defined WAN (SD-WAN), Block Chain, Robotic Process Automation, Artificial Intelligence (AI)/ Machine Learning (ML) and open banking to help Bank becoming a next generation bank as well as Bank of masses.

As part of Business Continuity Planning & Disaster Recovery Management strategy, Bank has implemented DR automation solution for critical applications hosted on Banks on-premise private cloud infrastructure, thus encouraging Banks readiness in responding to exigent situation.

In view of amalgamation your Bank has prepared implementation plan with timelines for smooth and seamless IT Landscape Integration. Product harmonization completed in Core Banking for all 3 Banks for liability products with charges for day zero of amalgamation i.e. 01.04.2020.

25 Vigilance:

25.1 Banking organizations, being custodians of public money, maintain the highest standards of honesty, integrity, probity and transparency. Vigilance function in the Banks helps in striving for zero tolerance for corruption and thereby enhancing the image of the organization.

25.2 Vigilance Awareness Initiatives: Our Bank conducts Preventive Vigilance Visits which are surprise visits to branches by vigilance officials, the very purpose of which is to sensitize the staff about the importance of following the laid down rules and procedures by the Bank from time to time. In F.Y. 2019-20, 2345 visits were conducted. In view to cover more branches under PVV and have an overall thorough supervision across the field, we have expanded our vigilance setup and comprise of 11 Zonal Vigilance Cells and 18 Regional Vigilance Cells.

In addition to the PVV, an offsite surveillance system is adopted by the Bank which helps in detection of abnormal transactions irregularities etc. and thereby initiate corrective action. During the year, 3367 alerts were raised under off-site surveillance, which were referred to the controllers for taking appropriate corrective actions.

Control Returns also sent regularly to various statutory and regulatory bodies (CVC, RBI, MOF, CBI etc) as demanded by them to enable them to exercise a general check and supervision over our vigilance cases and anti-corruption work.

In view of CVC directions, our Bank observes the Vigilance Awareness Week every year during October – November by conducting variety of internal and outreach vigilance awareness programmes for the staff members, school-going children, rural strata of the society and all citizens of the country. This year, Vigilance Awareness Week was observed under the theme, ‘Integrity – A way of life, with the message that integrity be inculcated as an essential trait in our lives and thus ensure betterment of our society and nation.

26 Outlook

26.1 Banking today is standing at the juncture of both opportunities and uncertainties. While the former is based upon the hope of economic revival, latter is more evident from the on-going crisis and related setbacks. The hope of opportunity is however arising from the swift and timely actions taken by the regulators. Also, to chalk out a major difference between the current crisis and a similar one of 2008, it is the systematic resilience that has provided the hope for revival. During FY 2019-20 the Bank has undertaken various structural changes in the form of amalgamation, EASE and digital integrations. While managing with internal reforms, the Bank has successfully acted upon the industry needs.

Going forward, the first half of the FY 2020-21 is expected to remain sluggish in terms of business growth and new opportunities. Nonetheless, gradual recovery is expected from second half with timely roll-out of fiscal policy measures and revival in business sentiments. Also, post COVID world would provide opportunity for the institutions to evolve differently and setting a ‘new normal.