1. Economic Outlook
In spite of the demonetization in November, the economy maintained a fairly good growth. International trends are also stronger with Europe and Japan in the recovery mode. The IMF sees the world economic growth accelerating from 3.1% in 2016 to 3.5% in 2017, and 3.6% in 2018. Both advanced and emerging economies are poised to do better.
In US unemployment is down to 4.7 per cent and Emerging Market economies are performing better. After 74 per cent remonetization by the end of March, the Indian monetary system is nearly back to normal with excess liquidity with banks sponged out. After the April 6 meeting of the Monetary Policy Committee (MPC) the RBI left the repo untouched.
Bad Debts in Banks
Non-performing assets (NPAs) or bad loans of public sector banks (PSBs) have reached high levels of over Rs 6 lakh crore, the bulk of which are in sectors such as power, steel, road infrastructure and textiles. The Government of India has promulgated an ordinance, which amends section 35A of the Banking Regulation Act, 1949 and inserts section 35AA and section 35AB in the Banking Regulation Act. The ordinance authorises the "Reserve Bank to issue directions to any banking company or banking companies to initiate insolvency resolution process in respect of a default under the provisions of the Insolvency and Bankruptcy Code (IBC), 2016".
It also empowers RBI to set up sector related oversight panels that will shield bankers from later action by probe agencies looking into loan recasts. The government had earlier enacted the IBC to consolidate and amend the laws relating to reorganisation and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner. It was aimed at maximising the value of assets to promote entrepreneurship, availability of credit and balance the interest of all stakeholders.
These are steps in the right direction to reduce NPA of banks in general and our Bank in particular.,
Agriculture
Agriculture Food grains production in 2016-17 may be up about 8 per cent. Except sugar which will be short by about 19 per cent, all other agricultural products would show ample improvement. IMD forecasts above average monsoon rainfall in 2017 as concern over El Nino impact has eased. Hence the possibility of food inflation rearing up in the near future is small.
Industry
IIP for February was down 1.2 per cent and in the first 11 months growth was a mere 0.4 per cent. In February capital goods production declined. So also of consumer goods. Going by the Nikkei PMI manufacturing sector activity improved significantly in March. New orders, including from exports, expanded leading to higher production, additional employment and improved business confidence. Even so industry is still loaded with excess production capacity and over-leveraged balance sheets.
New investment has consequently been slow. Investment by Public Sector Undertaking was Rs. 1.03 trillion against the target of Rs. 3.98 trillion. In the manufacturing sector project valued at Rs. 440 billion were either stalled or abandoned. The service sector activity also improved for the second consecutive month in March. Taken together - manufactures and service - growth was significant which perhaps indicates the trend in the future.
Capital Market
Sensex in FY17 gained 16 per cent with market cap up by Rs.26 trillion. Fresh capital issues aggregated Rs.84 billion, the highest since FY12, with services companies accounting for a half of the IPOs. There was greater recourse to Offer for Sale which amounted to Rs.197 billion. This underscores shortfall in capital expenditure by corporates.
Foreign Direct Investment (FDI) in the first 11 months of FY17 was $55.5 billion, about 7 per cent more than in the same period last year. It is critical that reforms are introduced expeditiously to create the right environment for FDI since US direct investment may decline due to changed policy approach of Trump administration.
Investment by FPIs was however negative with the outflow of $1.3 billion in April-Feb 2016- 17. In the last quarter however there was a strong inflow which prompted Sensex to jump and rupee to harden.
Interest rate and Inflation
After the first bi-monthly meeting of MPC the RBI did not announce any change in the repo but stepped up reverse repo to mop up excess liquidity with the banks following demonetization. The intensive effort made by the Government to substitute cash transactions by digital would have reduced the demand for currency. Digitalization and GST which will be introduced from July will reduce opportunities for black money and increase revenues of Central and State Governments.
Inflation at retail level measured by CPI was 3.8 per cent in March. In recent months WPI has been more buoyant mainly because of the rise in international commodity prices. In the last two years oil prices had substantially dropped giving us advantage by reduction in WPI and current account deficit (CAD) .
The RBI assessment is that inflation will remain above the 4 per cent policy target in the current year. As such it appears that any reduction in repo may be difficult though some reduction in interest on bank credit may be possible if NPAs are taken care of.
Money and Credit
At the end of February total currency in circulation was Rs.10.6 trillion, about two-thirds of the currency a year back. But banks were replete with deposits because of demonetization. The increase in deposits was 12.4 per cent. Credit however did not increase as fast because industrial growth was low and companies resorted to other sources, like bonds, for short term funds.
It is quite likely that corporates in future will depend more on capital and money markets. The rate of interest in the debt market has come down faster than interest on bank credit. For instance, interest on commercial paper ranged between 6 and 14 per cent depending on credit rating.
Foreign Trade
After a long period of decline exports showed improvement in the last two months. The growth in imports was also compressed which resulted in reduction in CAD to 1.4 per cent of GDP. For the first time CAD was fully funded from FPI. The advantage from drop in oil prices may not be available in future. Oil prices may average $50-55 per barrel during the year.
Future Prospects
There are good prospects for the economy to grow in 2017-18. Domestic demand is strong coming mainly from public sector investment and housing, implementation of Seventh Pay Commission and possibly increase in minimum wages. Corporate profitability will improve and stock market should remain bullish. That limits the possibility of any reduction in interest rates. Rupee will be strong and export growth weak. With GST in place and further easing of business, GDP growth may be around 7.4 percent in FY18 and even higher next year.
STRATEGIC ANNOUNCEMENTS: DOMESTIC
• The monsoon is likely to be just normal at 96 percent of the Long Period Average (lpa0 this year for the second year in a row, the India Meteorological Department (IMD) said on 18th April.
• Indias economic growth will be 6.8 per cent in FY17-against the official advance estimates of 7.1 per cent - due to the note ban, if the projections of the international Monetary Fund (IMF) come true.
• Infrastructure, one of the most financially stressed sectors, is expected to see a spurt in consolidation with the Reserve Bank of India (RBI) being given additional powers to deal with non-performing assets.
• The Presidential Ordinance empowering the Reserve Bank of India (RBI) to enforce expeditious resolution of nonperforming assets (NPAs) of banks should hardly come as a surprise. Finance Minister has been hinting at this legal empowerment of central bank to crack down on NPAs of banks, an area where recovery has been a painfully slow process.
• The Goods and services (GST) can boost Indias GDP growth by upto 4.2% - double the previous estimate-as lower taxes on manufactured goods will bump up output and make products cheaper, a US Federal Reserve paper said.
• The governments move to demonetize Rs.500 and Rs. 1000 notes has helped the authorities bring 9.1 million people under the tax net.
• India has been placed in the second spot in the renewable energy country attractiveness index by EY.
STRATEGIC ANNOUNCEMENTS: FOREIGN •
• The US Federal Reserve kept interest rates unchanged on 3rd May but downplayed weak first-quarter economic growth and emphasized the strength of the labour market, in a sign it could tighten monetary policy as early as June. It also said consumer spending continued to be solid and inflation had been "running close" to the Feds target.
• Saudi Arabias oil minister said he is confident that an agreement by producers to curb crude output and shrink a market glut will be extended into the second half of the year and possibly beyond.
• Euro zone manufacturers began the second quarter at a blistering pace, increasing activity at the fastest rate for six years as demand remained strong despite rising prices, a survey showed.
• US rebounded in April as employers added a brisk 211,000 jobs, a sign that the economys slump in the first three months of the year could prove temporary. The unemployment rate dipped to 4.44% - its lowest point in a decade- from 4.5% in March.
• The International Monetary Fund (IMF) said Asias economic outlook faces "significant" uncertainty and downside growth risks from any sudden tightening in global financial conditions or rise in protectionist trade policies.
• India on 5th May launched a communication satellite that would be jointly used with Afghanistan Bangladesh, Nepal, Bhutan, Maldives and Sri Lanka.
• The US economy grew at its weakest pace in three years, in the first quarter, as consumer spending almost stalled. But a surge in business investment and wage growth suggested activity would regain momentum as the year progresses.
• Governments and companies around the world began to gain the upper hand against the first wave of an unrivalled global cyber attack. More than 200,000 computers in at least 150 countries have so far infected, according to Europol, the European Unions law enforcement agency.
FINANCIAL PERFORMANCE
Banks performance during the year was delimited by setting of priorities for gaining desired results in the fields of asset quality and recovery of bad assets. The main performance indicators of growth, profitability, efficiency, productivity, and solvency are as under:
The Bank has registered an Operating Profit of 1552.89 crore during the financial year 2016-17 compared to Rs. 1811.80 crore in the financial year 2015-16, registering a decline of Rs258.91 crore (14.29%). Bank managed its asset portfolio well and earned a Net Profit of Rs.219.51 Crore in FY 2016-17 compared to a Net Profit of Rs -(281.95) crore in FY 2015-16. Gross Profit per Employee decreased from Rs. 12.09 lakh as on Mar16 to Rs10.38 lakh as on Mar17.
| Key Financial Ratios (%) | March 2016 | March 2017 |
| Cost of Funds | 6.16 | 6.12 |
| Yield on Funds | 7.99 | 7.70 |
| Cost of Deposits | 6.58 | 6.00 |
| Yield on Advances | 9.93 | 8.95 |
| Yield on Investments | 8.02 | 7.76 |
| Spread as a % of AWF | 1.83 | 1.57 |
| Net Interest Margin (NIM) | 2.01 | 1.60 |
| Operating Expenses to AWF* | 2.39 | 1.91 |
| Return on Avg. Assets (RoAA) | -0.22 | 0.16 |
| Return on Equity | -6.01 | 4.38 |
| Business per Employee (Rs. In Crore) | 12.37 | 13.04 |
| Net Profit per Employee (Rs. In Lakh) | -1.88 | 1.47 |
| Book Value | 50.14 | 32.94 |
Income and Expenditure Analysis
Interest income of the Bank declined to Rs.9427.91 crore in 2016-17 compared to Rs.9936.67 crore earned during the year 2015-16. Interest income being a direct function of growth in advances and the rate of interest charged. Bank cut its Base Rate twice during the year 2016-17 to pass on the benefit of rate cut made by RBI. Non-interest income
increased by Rs719.09. crore (49%) from Rs. 1467.53 crore in the financial year 201516 to Rs2186.62 crore in the financial year : 2016-17. The Yield on Advances declined to 8.95% as at March 2017 compared to 9.93 % as at March 2016.
Interest Expenditure declined by Rsl55.93 crore to Rs7500.18. crore in 201617 compared to Rs.7656.11crore in 2015-16. Lower interest expenditure was ensured by slashing of the rate of interest on retail tenn deposits in all the brackets. The Cost of _ Deposit came down from 6.58 % in 2015-16 to 6.00% in 2016-17. The Bank could curtail
its operating expenses by13.84.% (411.32cr) and brought down the operating expense from Rs2972.78Crore in Mar2016 to Rs2561.46 crore in Mar 2017.
Deposits of the Bank reached Rs. 126939 crore as on 31st March, 2017 registering a Y-o-Y growth of 9.05 %. Banks Savings deposits grew by21.20% to reach a level of Rs.49462Crore as on March 31, 2017. Share of CASA deposits to total deposits stood at 47.33 % as on March 31, 2017. Banks retail term deposit stood at Rs.63705 crore with a growth of 3.05 %Y-oY. Share of Bulk Deposits and deposits at preferential rate in total deposits further declined to reach at 2.42 % and0.19 % as on March2017from 4.97%and 1.31% as on March2016 respectively.
The Banks customer acquisition campaign resulted in growth of customer base of the Bank from 3.93 crore as at March 2016 to 4.27 crore as at March 2017.
The total credit portfolio of the Bank has declined in Mar2017. Gross Advances of the Bank decreased by Rs909 crore (-1.27%) and reached Rs70502.90 crore as on March 31, 2017. Credit deposit ratio stood at 55.54% as on March 2017. Bank achieved the PRISEC Advance target of 40% of ANBC. Intensive marketing of retail credit products brought considerable growth in Retail Advances supported by increase in Housing Loan.
Banks non-food credit decreased from Rs.70046 crore to Rs69890 crore, while food credit came down from Rs.1366 crore as on March 31, 2016 to Rs. 613 crore at the end of March, 2017.
Total Business
The total business of the Bank reached Rs197442crore. at the end of the current financial year 2016-17.
Productivity, as measured by business per employee, increased from Rs.12.37 crore as on 31.03.2016 to Rs13.04. crore as on 31.03.2017.
RETAIL LENDING OPERATIONS
Retail Credit has been one of the thrust areas of the Bank during the FY 2016-17. Bank has laid special emphasis on sanctioning Retail Loans with focus on Housing Loan and Mortgage Loan which are the major contributors to growth under Retail Credit & comprised 69.88% of total Retail Credit portfolio of the Bank.
Performance:
During the FY 2016-17, lending under Retail Credit has witnessed a positive growth of Rs. 569 Crore from Rs. 12652 Crore as on 31st March, 2016 to Rs. 13221 Crore as on 31st March, 2017, registering Y-o-Y growth of 4.50%.
The growth during the period has primarily resulted on account of the Housing Loan segment which has clocked a positive growth from Rs. 5970 Crore as on 31.03.2016 to Rs. 7115 Crore as on 31.03.2017 registering an impressive Y-o-Y growth of 19.18%.
Special Initiatives Undertaken:
• Bank has given special emphasis for tie-up with reputed builders to boost up growth in Housing Loan. Many upcoming housing projects of reputed builders have been tied up and Banks name is being published in their brochure for enhancement of visibility in the home loan market
• Credit guarantee coverage initiated for the students availing loan under Education Loan Scheme
• New products in the name of United Affordable Housing Loan Scheme under Prime Minister Awas Yojana launched with subsidy coverage for the Middle Income Group
• Bank is a member of Interest Subvention Scheme of Govt providing Interest Subvention to eligible education loan borrowers as per guidelines of Govt of India
• Interest rates of Retail Loan Schemes have been modified to make them more competitive and attractive
• United Housing Loan Scheme, United Mortgage Loan Scheme, United Demand Loan Scheme have been revamped to make them attractive and market driven
• The online application facility for Retail Loans like Housing and Education was a major success during the FY2016-17 as many applicants are now actively using this hassle free system for availing such loans.
• Wide publicity has been given in respect of retail loan products mainly, Housing, Mortgage and Car Loan by displaying advertisement in prime locations of city and urban areas, banners in and around branch premises and by advertisement in FM radio/ TV Channel
• Banks official Face book Page has been effective and featuring latest information on Banks products/services and offerings and emerged as a major marketing tool for retail products
• Marketing effort has been intensified with a dedicated marketing team consisting of qualified marketing officials to market retail products of the Bank
• Contest in the name of United Retail League and United Premier Retail League was launched with the intent to mobilize CASA Deposit, Promotion and delivery of ADC Products and canvassing and disposal of Retail Loans under United Housing Loan, United Mortgage Loan and United Car Loan Schemes through engagement of all staff members in mission mode
• Bank has signed a MoU with Bihar State Government and launched a scheme namely "BIHAR STUDENT CREDIT CARD" to provide education loans to those students who are residents of Bihar and are unable to pursue higher studies after passing 12th standard due to lack of financial support.
• Launched United Kaushal Rin Yojna for Vocational Education in replacement of an earlier scheme named Skill Loan Scheme
Retail Hubs:
Bank has established Retail Hubs for faster appraisal and professional approach in processing of loan proposals, thereby making loan sanctioning process hassle free and reducing Turn-Around-Time (TAT). During FY 2016-17, 24 Retail Hubs functioning in 24 regions of the Bank sanctioned 6969 retail credit proposals amounting to Rs. 1014 Crore
BANCASSURANCE BUSINESS
Bank has a Corporate Agency Agreement with both Life and Non Life Insurance Companies Under its Bancassurance arm. Under the agency agreement, Bank has made tie up arrangement with Life Insurance Corporation of India (LICI) for selling life insurance policies and with Bajaj Allianz General Insurance Company Limited (BAGIC) for non-life insurance business. During the financial year 2016-17, Bank has sold 7392 policies of LICI(life) with a premium collection of Rs.81.15 Crore and paid Rs.35.34 Crore as premium against 106790 policies to BAGIC(non-life) during the same period.
Bank has earned a commission of Rs. 3.34 Crore from life insurance business and Rs.3.60 Crore from the non-life insurance segment during the FY2016-17 as against Rs.2.87 Crore and Rs. 3.29 Crore respectively during the FY2015-16.
In terms of the new guidelines of Insurance Regulatory and Development Authority of India (IRDAI) on Open Architecture
Model of Corporate Agency arrangement, Bank has filed Certificate of Registration with IRDAI which is a statutory requirement for soliciting insurance business under Corporate Agency framework effective from 01.04.2016 to operate with single insurance company in each vertical of Life (LICI) and Non-life insurance (BAGIC).
TREASURY AND INTERNATIONAL OPERATIONS
The investment portfolio of the Bank increased from Rs.44934 Cr as on 31.03.2016 to Rs.53355 Cr as on 31.03.2017 registering a growth of 18.74%. The SLR investment portfolio increased from Rs.36009 Cr as on 31.03.2016 to Rs.38166 Cr as on 31.03.2017. Portfolio modified duration has decreased to 3.90 as at March 2017 compared to 4.66 a year ago. The modified duration of the Available for Sale (AFS) portfolio has also decreased to 2.55 as at March 2017 from 3.73 as at March 2016.
The Bank has earned a total Trading profit of Rs. 1502 Cr from domestic segment of Treasury during the financial year 16-17 as compared to Rs. 824 Cr. for the financial year 15-16 registering a growth of 82.28%. The average return on investment during the year 16-17 was 8.67% and Yield on Investment during the year 16-17 was 7.76%.
Foreign exchange Business turnover of the bank aggregated to Rs.16656.44 Cr comprising of Rs.3743.45 Cr under Exports, Rs.4051.96 Cr under Imports and Rs.8861.03 Cr under remittances during the year ended 31.03.2017.
Outstanding export credit of the bank stood at Rs.1151.46 crore as at 31.03.2017.Bank earned exchange profit of Rs.143 Cr during the year 2016-17 against Rs 135 Cr during 2015-16.
The banks overseas presence covered two countries namely Myanmar and Bangladesh with one Representative Office each at Dhaka, Bangladesh and Yangoan, Myanmar. Indo-Myanmar trade is routed through our Bank. Twenty six (26) banks of Bangladesh maintain forty (40) Vostro account in USD and EUR and seventeen (17) banks of Myanmar maintain Twenty five (25) Vostro accounts in EUR, USD and INR with our Bank. Global IME bank Ltd., Nepal is maintaining Vostro accounts in INR & USD with our Bank.
The banks International operations are well supported by a wide network of more than 620 correspondent relationships and 16 Nostro accounts opened with overseas banks in 8 currencies maintained abroad.
OTHER SERVICES
Merchant Banking Division managed Banks issue of Basel-III compliant Additional Tier-I bonds for Rs.200 Crore on 29.03.2017. Bank holds certificate of Registration issued by SEBI on Banker to an Issue, Debenture Trustee and Merchant Banker under which it continues to discharge defined duties and responsibilities as per regulatory norms
GOVERNMENT BUSINESS
Government Transaction Department undertakes different types of Government Business Activities as following:-
• Collection of Central government revenues viz. Direct and Indirect Taxes (CBDT, CBEC,Service Tax and customs) through physical mode by Authorised branches and through e-mode (Internet Banking) by all branches of the bank.
• Collection of State Revenues and Taxes of different states (both on line and off line).
• Mobilisation of Govt. deposits under small savings like Public Provident Fund, Senior Citizens Saving Scheme, Sukanya Samridhi Accounts, different tranches of Sovereign Gold Bonds, Savings Bond etc.
• Handling of Govt.Fund (Departmentalised MinistriesAccounts,State Govt.Treasury Operation in different states)
• Disbursement of different types of pensions of the Central Govt.,State govt. and different autonomous organisations like EPFO,Kolkata Port Trust,Damodar Valley Corporation etc
• Implementation of National Pension System (NPS) and Atal Pension Yojana(APY) for enrolment of unorganized sector people in to the scheme for getting old age annuity/pension as an authorized Point of Presence Service Provider for the Pension Fund Regulatory and Development Authority(PFRDA).
• Implemented the Prime Ministers Garib Kalyan Yojana a Govt of India scheme to raise funds for the amelioration of the poverty stricken mass of the country.
• Dissemination of information to the Pensioners through ‘Pensioners charter being displayed in the banks website and on-line pensioners Grievance portal and PensionersPay slip have been customized in the banks website. Approx 93% of pension accounts have been Aadhar seeded excluding the state of Assam and Meghalaya and digitization of Life Certificate for pensioners through Jeevan Praman has been in popular use.
• The preparation for collection of Goods and Service Tax with full IT integration with the GSTN and RBI according to the requirements of Bank Authorisation Reference Model under the new regime of GST to be launched from 1st of July 2017 is on the verge of finalisation.
The total turnover in respect of Government Business handled by the bank and the agency commission earned on such business during this financial year (2016-17) amounts to:-
| BUSINESS TYPE | TURNOVER | COMMISSION Earned |
| TAX | 3011.41 | 2.30 |
| PENSION | 5459.29 | 21.72 |
| TREASURY | 3767.02 | 5.02 |
| P P F ,SGS$,SSA, BOND g SDS | 1094.35 | 0.54 |
| DMA | 7117.43 | 2.04 |
| TOTAL | 30443.50 | 31.72 |
ASSET QUALITY AND RISK MANAGEMENT
The problem of piling up of bad loans starting due to economic downturn when a slowdown in demand and stalled projects made it difficult for borrowers to repay debt, got bigger in size with the Intensive Asset Quality Review (AQR) conducted by the Reserve Bank of India in a bid to start a long overdue clean-up of stressed assets held by the banks. Besides, banks were required to ensure that they are all broadly on the same page in terms of recognition and provisioning, even though each one had flexibility on individual cases.
Despite constant follow up with the recalcitrant borrowers, monitoring of stressed assets and tough measures in hard account, the Bank was not able to contain further growth in NPA level which reached a level of Rs10951.99cr. i.e15.53% of gross advances.,
The major steps taken by the Bank for recovery of stressed assets during the year were a liberalized limited period offer of one time settlement (OTS) for NPAs with outstanding balance below Rs.10 lac. To create general awareness among the public the Bank took the initiative by putting up silent road shows and peaceful demonstrations before the establishments of defaulting borrowers.
Asset Quality
The Bank has been complying with RBI guidelines relating to Income Recognition, Asset Classification and Provisioning in percentage terms, gross NPA Ratio of the Bank stood at 15.53.% as on 31.03.2017 as against 13.26% at the end of the previous year. In absolute terms Gross NPA stood at Rs10951.99. cr. as on 31.03.2017. The Net NPA ratio of the Bank stood at 10.02.% as on 31.03.2017 against 9.04 % as on 31.03.2016. In absolute terms, the Net NPA stood at Rs6592.cr as on 31.03.2017. The Bank could contain the fresh slippages during the FY 2016-17 to Rs3533.cr as against Rs. 5011 cr during the FY 2015-16. The cash recovery during the year was Rs.488 cr and the upgradation during the year was Rs312 cr. The provision coverage ratio of the Bank has improved to 56.45.% as on 31.03.2017 as against 56.36 % as on 31.03.2016. The recovery in technically written off accounts was Rs110.20.cr during the year 2016-17.
The Bank has a comprehensive Recovery Policy duly approved by the Board covering all avenues for recovery and reduction of NPAs like One time settlement (OTS), sale of charged assets, sale to Asset Reconstruction companies (ARC) etc. The Bank came out with liberalized guidelines during the year for recovery of small value NPA accounts having outstanding balance below Rs.10 lac. The Bank preferred to go for sale of NPA to the tune of . 563.15 cr to ARCs during the FY 2016-17.
Capital & Reserves
Networth of the Bank was assessed at 5005 crore as on March 31, 2017. Total paid-up capital of the Bank was 1394.36 crore and reserves and surplus was 6349.45 crore. The Government shareholding in the Bank stood at 85.23% at March 2017. Capital Adequacy Ratio under Basel-III norms assessed at 11.14% with Tier-1 Ratio at 8.94% and CET1 ratio at 8.46% as at March 2017. Capital Adequacy Ratio under Basel-II norms assessed at 11.68% with Tier-1 Ratio at 7.93% as at March 2017. The Bank has adequate headroom available under both Tier-1 and Tier-2 options to raise capital to support business growth momentum.
| Composition of Capital | March 2017 |
March 2016 |
||
| Basel-Ill Norms | Basel-II Norms | Basel-Ill Norms | Basel-II Norms | |
| Risk Weighted Assets | 71198 | 66634 | 73079 | 69249 |
| Tier 1 Capital | 6368 | 5517 | 5797 | 5008 |
| Of which CET1 Capital | 6023 | NA | 5660 | NA |
| Tier 1 Ratio (%) | 8.94 | 8.28 | 7.93 | 7.23 |
| Of which CET1 ratio (%) | 8.46 | NA | 7.74 | NA |
| Tier 2 Capital | 1563 | 2264 | 1572 | 2235 |
| Tier 2 Ratio (%) | 2.20 | 3.40 | 2.15 | 3.23 |
| Total Capital | 7931 | 7781 | 7369 | 7243 |
| CRAR (%) | 11.14 | 11.68 | 10.08 | 10.46 |
Risk Management (Capital Adequacy Framework & Future Strategies)
The Bank has an Integrated Risk Management system to ensure that the risks assumed by it are within the defined risk appetites and are adequately compensated. To address the various risks to which the Bank is exposed to, the Bank has a robust Risk Management Architecture in the Bank comprising Risk Management Structure, Risk Management Polices and Risk Management Implementation and Monitoring Systems.
Risk Management Structure:
The overall responsibility of setting the Banks risk appetite and effective risk management rests with the Board of Directors, apex level management of the Bank. Bank has constituted a Board level Committee named as Risk Management Committee of Board of Directors (RMCBOD) to monitor the implementation of the Risk Management systems of the Bank. There are other internal committees of Top Executives like Credit Risk Management Committee (CRMC), Operational Risk Management Committee (ORMC) and Asset Liability Management Committee (ALCO) to supervise various risk management functions and activities of the Bank.
Banks Asset Liability Management Committee (ALCO) is a decision making unit responsible for the strategic management of interest rate and liquidity risks. ALCO met 14 times during the year to review various issues namely interest rates scenario, product pricing for both deposits and advances, desired maturity profile of the incremental assets and liabilities, demand for Bank funds, fixation of Banks Base Rate, cash flows of the Bank, profit planning and overall balance sheet management.
The Operational Risk Management Committee (ORMC) has the responsibility of monitoring the operational risk of the Bank and the responsibility of evaluating and taking necessary steps for mitigation of operational risk by designing and
maintaining an explicit operational risk management process. It also ensures that the norms, policies and guidelines laid down in Operational Risk Management Policy are strictly adhered to. ORMC met 12 times to discuss various issues from operational risk point of view.
The Credit Risk Management Committee (CRMC) monitors various credit risk aspects relating to credit policy, procedures and to analyse, manage and control credit risk on a bank wide basis The Committee met 7 times during the year to discuss various issues from operational risk point of view.
Risk Management Policies:
To address various risks like credit risk, market risk, operational risk, liquidity risk, forex risk and other Pillar-2 risks, the Bank has formulated various risk management policies to identify, manage and mitigate such risks that the Bank is exposed to. The major policies formulated and approved by the Board of Directors of the Bank to address such risks are Lending Policy, Policy on ICAAP, Operational Risk Management Policy, Business Line Mapping Policy, Asset Liability Management Policy, Market Risk Management Policy, Integrated Treasury Policy, Disclosure Policy, Credit Audit Policy, Stress Testing Policy, and Policy on Credit Risk Mitigation Technique & Collateral Management etc.
Credit Risk:
To address the Credit risk, Bank has formulated a Lending Policy which lays down policy guidelines for Credit Management covering all areas of operation where credit Risk is involved. The policy enables the Bank to enhance the risk management capabilities by undertaking lending decisions guided by the policy framework for a steady and healthy growth in its loan portfolio.
The Bank has set various prudential limits to individual borrowers, group borrowers, entry level exposure norms, substantial exposure limits, benchmark financial ratios, borrower standards, exposure limits/ceilings to industries, sensitive sectors, rating category etc in alignment with RBI directives. The Board has reviewed such limits during the year.
During the year, analysis of various exposure norms has been undertaken on half yearly basis to ensure Banks various exposures are within the exposure limits/ceilings fixed by RBI/ Banks Board.
Bank has made its loan appraisal function independent of Risk Rating function. Internal risk rating of loan accounts is carried through a software based rating model to assess the credit proposal and rating of a borrower.
During the year, Bank conducted the credit portfolio analysis on quarterly interval, to study the impact of a particular industry / sector on the credit portfolio of the Bank and adopt strategies to improve the quality of credit portfolio and reduce the potential adverse impact of concentration risk.
During the year, Bank has also undertaken the rating migration analysis of its borrowers on half yearly interval to analyze the stability rate, up gradation rate, down gradation rate and default rate for a one year, two years, three years and four years time horizons and appropriate corrective actions are initiated to protect the portfolio quality.
Market Risk:
For management of Market Risk, the Bank has given emphasis on measuring, monitoring and managing liquidity, interest rates, foreign exchange and equity risk of the Bank. The Market Risk in trading book is monitored and managed as per appropriate control mechanism in place. Market position, funding patterns, duration, counterparty limits and various sensitive parameters are also monitored by the Bank on regular basis. The advanced Risk Management tools such as Value at Risk (VaR), Earnings at Risk (EaR), Net Overnight Open Position Limits (NOOPL) and modified duration limits are used in managing Market Risk.
The Bank measures and monitors liquidity risk for all items of balance sheet through structural liquidity statements and stock ratios on regular basis. The Bank also monitors its Interest rate risk through interest rate sensitivity gap reports.
The Bank has formulated and reviewed its Integrated Treasury Policy to set operating guidelines for its treasury functions. The Bank has also put in place an Asset Liability Management Policy and Market Risk Management Policy to address the liquidity risk, interest rate risk and market risk etc. These policies comprise management practices, procedures, prudential risk limits, review mechanisms and reporting systems etc. These policies are reviewed periodically in line with changes in financial and market conditions.
Bank has an "Integrated Treasury Management System (ITMS)" software to monitor its investment and treasury portfolio on an ongoing basis along with automated computation of capital charge for Market Risk as well as strengthening the internal control system of investment portfolio of the Bank
Operational Risk:
The Bank has framed an Operational Risk Management Policy for managing the Operational Risk in an effective manner. The Bank has also formulated Business Line Mapping Policy for mapping various products, activities, and income into different business lines.
Banks Operational Risk Management Committee (ORMC) has the responsibility of monitoring the operational risk of the Bank. ORMC also reviews the operational risk loss event data, new products, process and systems adopted by the Bank and provides suggestions for taking corrective/preventive measures to strengthen the internal systems and procedures.
Basel-II and Basel-III Compliance:
In line with guidelines of the Reserve Bank of India, the Bank has successfully migrated to Basel-II framework w.e.f 31st March 2009 by adopting Standardized Approach (SA) for Credit Risk, Basic Indicator Approach (BIA) for Operational Risk and Standardized Duration Approach (SDA) for Market Risk for computing the capital adequacy ratio.
The Bank has also followed Basel-III capital regulation norms w.e.f 1st April 2013 in line with RBI guidelines. The Bank has been computing the Capital to Risk Weighted Assets Ratio (CRAR) on both under Basel-III and Basel-II norms at quarterly interval.
To comply with Pillar 2 guidelines of RBI, the Bank has formulated a Policy on Internal Capital Adequacy Assessment Process (ICAAP) for the assessment of all material risks the Bank is exposed to and the risk management processes which are put in place to manage and mitigate those risks and also to evaluate its capital adequacy commensurate with such risks.
In line with the ICAAP policy, the Bank prepares the ICAAP Document on yearly basis and submits to RBI after internal validation and approval by the Board of Directors of the Bank. The ICAAP document of the Bank for 2016-17 has been submitted to RBI.
The Bank has reviewed its capital requirement both under Basel-II and Basel-III norms and taken necessary steps for strengthening its capital base. The Bank also reviewed its ICAAP on quarterly basis for monitoring both risks and capital requirement of the Bank.
In line with RBI guidelines and as per the Stress Testing Policy of the Bank, the Bank conducted Stress Testing analysis on quarterly interval on various risks like Liquidity Risk, Interest Rate Risk, Forex Risk, Credit Risk, Market Risk and Operational risk and assessed the impact on capital adequacy & profitability.
For skill development in Risk Management area, the Bank also nominates its officers on regular basis for various trainings/ seminars on Risk Management conducted by reputed institutions like CAFRAL, NIBM, IBA, IDRBT, CAB etc.
PRIORITY SECTOR ADVANCES
Banks lending to the Priority Sector has reached to Rs.30623 crore as at 31st March 2017 which is 40.71% of ANBC. Bank has given special thrust on financing Small & Marginal Farmers, Micro Enterprise segment under MSME apart from exploring other potential avenues of increasing PRISEC advances like engaging Collateral Management Companies for Pledge Financing, financing Food & Agro Processing Units, financing large size Dairy & Poultry units, vegetable and flower production under controlled condition (Poly House), Plantation etc.
Agriculture Lending:
Bank has disbursed Rs.7147 crore during the FY 2016-17 against a target of Rs.7955 crore recording an achievement of target to the tune of 90%. Lending to Agriculture Sector stands at Rs.12124 crore as on 31st March 2017, which is 16.12% of ANBC against the stipulated target of 18% of ANBC. Lending to Small & Marginal Farmers stands at Rs.6124 crore, which is 8.14% of ANBC against the stipulated target of 8% of ANBC for the year 2016-17.
Lending to Weaker Section:
Lending to weaker section reached to Rs.8287 crore as on 31 March 2017 which is 11.02% of ANBC against the stipulated target of 10%.
Lending to Minority Community:Banks lending to Minority Communities reached to Rs.4609 crore as at end of March 2017 which is 15.05% of PSL conforming to the stipulation
Kisan Credit Card:
Bank has organized several special camp for issuance of Kisan Credit Cards to bring more number of new farmers under KCC net as per revised scheme. Bank has issued 76203 fresh KCCs during 2016-17 with credit limits of Rs.469 crore Total number of outstanding KCCs as on 31st March 2017 stands at 565198 with aggregate outstanding balance of Rs.2514.47 crore. In line with the Government guidelines on issuance of Rupay based ATM enabled cards to all the KCC holders, Bank has issued 5.35 lakh ATM cards to the KCC holders (excluding the NPA KCCs) till 31.03.2017 achieving the target of full conversion of entire operative KCCs to RUPAY KCC within the time frame set by the Government.
Self Help Group:
Bank has credit linkages with 94488 SHGs with an outstanding balance of Rs.497.32 crore as on 31st March 2017. Bank has been implementing NRLM programme for SHGs by providing initial credit limit of Rs.1.25 lakh on 1st grading of SHGs as per the decision of SLBC, West Bengal. Bank has started participating in Community Based Recovery Mechanism (CBRM) with the assistance from State Rural Livelihood Mission (SRLM) which has placed Bank Sakhi/ Bank Mitra at the branches.
Corporate Social Responsibility:
As part of corporate social responsibility, Bank has undertaken the following activities:
United Bank Rural Self-Employment Training Institute (UBRSETI)
Bank has so far set up 16 RSETIs in the states of West Bengal (6), Assam (8) and Tripura (2) to impart training to the potential entrepreneurs from the financially weak sections of the society. RSETIs have been actively engaged themselves in number of special training programmes, as directed by the government like PMEGP, Life MGNREGA etc.
During the FY 2016-17, these institutes have imparted training to 11027 rural youths/women, mostly from weaker sections, against the target of 8840 candidates, of which 65% trainees have been settled by establishing own economic venture.
These institutes are providing post training hand holding support to the trainees including arrangement of loan from our bank branches to enable them to set up their own ventures.
FLCC
Bank has also set up 38 Financial Literacy Centre (FLCs) in the states of West Bengal, Assam, Tripura and Manipur to extend financial literacy and credit counseling services to the poorer section of the society. In the Financial Year 2016-17, these FLCs have conducted regular outreach programmes which include Outdoor Activities for imparting financial literacy.
United Bank Socio-Economic Development Foundation (UBSEDF)
United Bank Socio Economic Development Foundation (UBSEDF) was established on 30th March 2007 with the objective of promoting and carrying out social and economic developmental activities and rendering assistance to weaker and under privileged section of the society in terms of decision taken by the Board of Directors of the Bank. Bank has extended financial assistance in 82 various welfare activities involving a total sum of Rs.277 Lakh towards its CSR activities till 31.03.2017. During the financial year 2016-17, focus was on extending assistance to the proposals under Swachh Bharat Mission/ Swachh Vidyalaya Campaign, Safe Drinking Water and Digitization of Adopted Villages. In the year, Bank has disbursed Rs.57.42 Lakh for 8 projects for implementation by the respective organizations towards cause of the society.
Performance of the MSME sector of the Bank is furnished below:
Advance under MSME of the Bank has marginally increased from Rs.11884.94 Cr as on 31.03.2016 to Rs.12023.29 Cr as on 31.03.2017registering growth of 1.16%. Marginal growth is mainly due to amendment of PRISEC guidelines by RBI for reclassification of Agro processing units to Agriculture from MSME and general economic slowdown.
| Category | FY 2014-15 |
FY 2015-16 |
FY 2016-17 |
|||||
| No. of a/cs | O/s Amt. (In crore) | No. of a/cs | O/s Amt (In crore) | Growth (Y-o-Y) | No. of a/cs | O/s Amt (In crore) | Growth (Y-o-Y) | |
| Micro | 221214 | 8287.12 | 240877 | 7,491.53 | -9.60 | 229923 | 7698.13 | 2.76 |
| Small | 14235 | 4057.59 | 16632 | 3,506.50 | -13.58 | 17617 | 3467.05 | (1.13) |
| MSE | 235449 | 12344.71 | 257509 | 10,998.03 | -10.91 | 247540 | 11165.18 | 1.52 |
| Medium | 332 | 604.42 | 774 | 886.91 | 46.74 | 939 | 858.11 | (3.25) |
| MSME | 235781 | 12949.13 | 258283 | 11,884.94 | -8.22 | 248479 | 12023.29 | 1.16 |
Strategies to increase MSME portfolio of the Bank.
• The Bank is focused on building a quality MSME asset portfolio by credit linkage to quality MSME entrepreneurs/ units, recovery in NPA accounts and preventing fresh slippages.
• The Bank had set up Centralised MSME - Loan Processing Centre (MSME-LPC) to reduce the turnaround time for loans beyond the Discretionary Power (DP) of Regional Offices. The Regional Offices are also empowered with enhanced DP for quick disposal of MSME proposals.
• The Bank has adopted cluster financing under MSME. MSME specialized Branches (Presently 180) and branches having potentiality of MSME advance including those located in close proximity to industrial area / clusters have been advised to focus on procuring new business from the entrepreneurs.
• The Bank is regularly interfacing with the MSME Associations and participating in their promotional programmes / workshops / seminars and EDP programmes for promotion of MSME products.
• The Bank has extended Collateral Free MSME loans under CGTMSE guarantee coverage up to Rs. 200 lac under "Credit Guarantee Scheme" for credit linkage to entrepreneurs having no collateral. Bank has also encouraged collateral free loans to MSE sector up to Rs. 10.00 lac under MUDRA category.
• The Bank has implemented "Stand up India" Scheme by providing credit to target group in true spirit.
• Under Capacity Building approach, Officers dealing with MSME loans and faculty members at Staff Training College (s) are provided with training on regular basis for hassle free and dedicated service to MSME entrepreneurs.
• The Bank has been awarded Best bank Award for Promotional Schemes- Winner (Emerging Category) and EcoTechnology Savvy bank Award- Runner Up (Emerging Category) by Chamber of Indian Micro Small and Medium Enterprises (CIMSME).
• The Bank has been awarded Runner up in Government Schemes category under Medium Bank class and Runner up in Best Social Bank category under Medium Bank class by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).
LEAD BANK DIVISION
The Lead Bank Scheme was introduced by Reserve Bank of India in December 1969. The Lead Bank Scheme envisages assignment of lead roles to individual banks (both in public sector and private sector) for the districts allotted to them. The lead bank acts as a leader for coordinating the efforts of all credit institutions in the allotted districts to increase the flow of credit to agriculture, small-scale industries and other economic activities included in the priority sector in the rural and semi-urban areas, with the district being the basic unit in terms of geographical area.
The Bank is the Convener of State Level Bankers Committee (SLBC) in the States of West Bengal & Tripura. The Bank is entrusted with Lead Bank responsibility in 40 districts spread over four states; 10 districts in West Bengal, 14 districts in Assam, 8 districts in Manipur and 8 districts in Tripura.
As Lead Bank of the State, the bank remained actively involved in formulation and finalization of Annual credit Plan (ACP) for the State and has drawn up suitable action plan for implementation of different socio economic activities keeping close liaison with Reserve Bank of India, NABARD and State Government Authorities.
The year 2016-17 had been eventful for the Bank as SLBC Convener for both West Bengal & Tripura.
The SLBC meeting organized in Tripura State have been attended regularly by dignitaries like Shri Sanjeev Ranjan, Chief Secretary, Government of Tripura, Shri. M. Nagaraju , Principal Secretary, Finance & I & C, Government of Tripura, General Manager, Reserve Bank of India and Senior Executives of Line Department of the State.
Dr. Amit Mitra, Honble Finance Minister of Govt. of West Bengal, Regional Director, RBI, CGM, NABARD, Director, DFS, MoF, GoI and the Principal Secretaries of Line Departments of the State have regularly attended at the SLBC meetings in the State of West Bengal during the year 2016-17 to enrich the level of discussion on important issues concerning development of the State.
Under leadership of the Bank, the following achievements took place during the year in the States of West Bengal & Tripura:
• Bankers have done excellent job in West Bengal as far as disbursing credit in MSME sector is concerned. In spite of completely being absorbed in Demonetization related work for close to 2 months, all the banks in the State together surpassed the target of disbursement set in MSME under Annual Credit Plan.
• Bankers have performed remarkably well in SHG loan segment. Growth in SHG advances mainly happens in 3rd & 4th quarter of financial year. Inspite of implementation of Demonetization on November 8, 2016, Banks in West Bengal together have surpassed the target of disbursement set for the state under SHG.
• Immediately after implementation of Demonetization, workers under unorganized sectors faced trouble to withdraw their daily wages due to severe cash crunch. In West Bengal, a large chunk of unorganized workers belong to the Tea Garden workers.
• Taking proactive steps, SLBC West Bengal convened a meeting with the Banks who are present either in Dooras and in Darjeeling area of North Bengal having all the Tea Gardens.
• The effort of opening of accounts and activation of the same in the CBS system of the concerned Banks were followed by issuance of ATM Rupay Card and related PIN and installation of either Desktop ATM or a full fledged ATM in a suitable place to be provided by the Garden management for facilitating payment to the garden workers after their wages is transferred to their newly opened accounts.
• Along with the campaign, Rupay Card/ PIN distribution, ATM/POS installation, the concerned Bankers took steps to create general financial awareness among the Tea Garden workers to enable them to undertake seamless transaction through Micro ATM of Bank Mitra/ATM/ POS.
• In both the States of West Bengal and Tripura, the roadmap for covering the Unbanked Gram Panchayats have duly been allotted to the member banks for opening of Brick & Mortar bank branches within 31.03.2017.
• After creation of 7 new districts in the state of Manipur, Bank has been allotted 4 new districts as lead districts, which will definitely improve the business performance of the Bank in the state. Total number of Lead districts in the state of Manipur now stands at 8.
FINANCIAL INCLUSION
With the evolution of digital payment and mobile technology there are means now to deliver advanced products to the population and regions excluded. This in conjunction with large BC network of 4252 Bank Mitras established across 13250 un-banked villages equipped with the latest and best of breed technology has enabled the Bank to deliver various basic banking services to the excluded population right at their door step.
The highlights of achievements for implementation of Financial Inclusion under Pradhan Mantri Jan Dhan Yojana (PMJDY) during the F.Y. ended 2016-17 are enumerated hereunder:
• Under PMJDY, 105.19 lakh accounts have been opened till end of March17.
• Rs.7414.03crore deposit has been mobilized in PMJDY Accounts upto March17.
• Out of 105.19 lakh accounts opened, 14.48 lakh accounts (13.78%) are under ‘Zero balance.
• Credit linkage through Bank Mitra channel has been established in 19.32 lakh FI customers with an outstanding amount of Rs.439.85 crore.
• Bank has rolled out JLG Loan module through Bank Mitras. FI customers have availed JLG loan where outstanding balance is Rs.6626.46 lakh as at 31st Mar17, without any default.
• 100.67 lakh RuPay Debit Cards have been issued.
• 57.26 Lakh PMJDY Accounts have been Aadhaar linked.
• 21.73 Lakh customers have been enrolled under Pradhan Mantri Suraksha Bima Yojana (PMSBY).
• 5.63 Lakh customers have subscribed for insurance cover under Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY).
• Out of 1007 death claims lodged under PMJJBY, 965 claims have been settled by LICI.
• Under PMSBY, as against 111 accidental insurance claims received, NIC has settled 63 cases and repudiated 28 cases.
• Our Bank has been awarded as Best Bank in West Bengal by Forum for Inclusive Financial Services (FFIFS) on 06.08.2015 under the category Highest Deposit account opened under PMJDY.
• Chamber of India Micro Small & Medium Enterprise (CMSME), New Delhi has recognized our Bank as Best Bank in 3 categories viz. Best Bank under PMJDY, Best Bank for promotional schemes under emerging Banks and Special Jury award for Turn Around Bank.
Financial inclusion initiatives rest on partnerships which bring together leadership, expertise, experience, and funding. Financial inclusion is our collective responsibility. So, Bank is collectively leveraging the digital technology for ensuring greater financial inclusion.
ORGANIZATION & SUPPORT SERVICES
Branch Network :
RBI has imposed restriction on opening of branch vide their letter no. DBS.CO.PSBMD III NO.90/14.01.052/2013-14 dated 14.02.2014 under Prompt Corrective Action (PCA) .
However, RBI had accorded permission for opening 51 Branches vide letter Nos:
1) BAPD.16183/22.03.026/2015-16 dt. June 27,2016 for 36 branches.
2) BAPD.3633/22.03.026/2016-17 dt. September 23,2016 for 12 branches.
3) BAPD.6398/22.03.026/2016-17 dt. December 06,2016 for 3 branches.
The Bank has opened 46 branches up to 31.03.2017 and 3 branches are in the process of opening . The remaining 2 Branches are yet to be opened.
One (1) RETAIL HUB was opened at Ernakulam in Kerala under Southern Region during the Financial Year as per RBI approval No BAPD.4449/22.03.026/2016-17 dt. October 10, 2016
Two (2) LINK OFFICES were opened at PUNE in Maharashtra under Mumbai Region & AGRA in U.P Under Meerut Region as per RBI permission No. BAPD.7991/22.03.026/2016-17 dt. January 10, 2017.
One (1) REGIONAL OFFICE was opened in HYDERABAD by bifurcating BANGALORE Region as per RBI Permission No. BAPD.1327/22.03.026/2016-17 dated July 27, 2016.
BRANCHES & OFFICES CLOSED/MERGED during the period 01.04.2016 to 31.03.2017
| No. | Name of the Branch/Office | Region | State | Date of Closing of the office | Remarks |
| 1 | G H Colony Branch | Behala | West Bengal | 13.06.2016 | Merged with South Suburbs branch |
| 2 | Sova Bazar Branch | Kolkata North | West Bengal | 11.07.2016 | Merged with Hatkhola branch |
| 3 | Fariapukur Branch | Kolkata North | West Bengal | 25.07.2016 | Merged with Shyambazar Market Branch |
| 4 | Retail Loan Hub - Behala | Behala | West Bengal | 20.08.2016 | Merged with Retail Loan Hub Kolkata |
| 5 | Retail Loan Hub - Bidhannagar | Kolkata North | West Bengal | 20.08.2016 | Merged with Retail Loan Hub Kolkata |
| 6 | Retail Loan Hub-Pune | Mumbai | Maharashtra | 17.10.2016 | Closed |
As on 31.03.2017 the total number of branches of the Bank stands at 2053. The bank has 5 Extension Counters & 36 Regional offices across the country.
Population group-wise Composition of Total Branch Network
| Location | Number of Branches (% of total) |
|
| 31.03.2016 | 31.03.2017 | |
| Metropolitan | 330 (16.41%) | 372 (16.12%) |
| Urban | 466 (23.17%) | 481(23.43%) |
| Sami Urban | 415 (0-64%) | 423 (0-61%) |
| Rural | 300 (39.78%) | 777 (37.84%) |
| Toial | 2011 | 063 |
Geographical location-wise Composition of Total Branch Network
| Location | Number of Branches (% of total) |
|
| 31.03.2016 | 31.03.2017 | |
| Eastern Region | 1169 (58.13%) | 1180 (57.47%) |
| North Eastern Region | 356 (17.70%) | 364(17.73%) |
| Western Region | 85 (4.23%) | 88 (4.29%) |
| Northern Region | 123 (6.12%) | 126 (6.14%) |
| Southern Region | 124 (6.16%) | 139(6.77%) |
| Central Region | 154 (7.66%) | 156 (7.60%) |
| Total | 2011 | 2053 |
The Bank has 241 specialized branches, catering to the specific clientele segment.
| Categories of Specialised Branches | 31.03.2017 |
| 1. MSME | 180 |
| 2. Asset Recovery Management | 4 |
| 3. Retail Hub | 24 |
| 4. MSME Loan Proc. Hub | 1 |
| 5. Corporate Finance Branch | 4 |
| 6. Service Branch | 19 |
| 7. Women Branch | 5 |
| 8. Treasury Branch | 1 |
| 9. Central Pension Processing Centre | 1 |
| 10.Cash Management Service Hub | 1 |
| 11. Inward cheques Processing centre | 1 |
| Total | 241 |
Out of total 2053 branches as on 31.03.2017, 885 (43.10 %) are located in 85 Minority Concentration Districts (MCDs) throughout the country.
CBS:
All the branches of the Bank are covered under Core Banking System and various other surround applications such as Human Resources Management System, Government Business Module, Asset Liability Management, Anti Money Laundering and Lending Automation Processing System etc have also been implemented to facilitate better customer
service and effective management. The facility of interbank remittance through RTGS and NEFT is available at all the branches of the Bank. This facility is also available through our internet banking and mobile banking platform. The Bank also offers cross border remittance through SWIFT network at one ‘A Category AD Branch and 41 ‘B Category AD Branches. The Core Banking System has also been integrated with SFMS platform to offer inland Letter of Credit (LC) and inland Bank Guarantee operation using Straight Thorough Processing (STP). To prevent incidences of fraud, biometric Authentication System has been implemented across all its branches for accessing Core Banking System.
The Bank has revamped its corporate network architecture to next generation MPLS technology and also upgraded network bandwidth, for high availability & better performance. Bank has deployed VSATs with dedicated bandwidth and High Speed Data Connectivity using 3G as back up connectivity at Branches to provide network connectivity in the event of cable cut.
The Bank conducts Information Security (IS) audit for its Core Banking and other surround applications as well as for infrastructure at the Data Centre. This includes VAPT (Vulnerability Assessment & Penetration Testing) for external facing applications at certain intervals. The Bank also conducts periodic DR (Disaster Recovery) Drills as part of its Business Continuity Plan (BCP).
As part of our other technology initiatives, the following systems have been put in place.
• Centralized Payment Hub solution has been implemented to process all transactions initiated through NACH and APBS platform with host to host connectivity of NPCI. Mandate Management Services are also enabled in this platform. In future, all corporate Collection and Payment services and IMPS gateway will be integrated in this centralized hub.
• The Bank has boarded Public Fund Management Services (PFMS) platform and disbursing DBT payments for various sponsored schemes of Central and State Government. Additionally, Departmental Ministerial Accounts for two ministries are also being handled in this platform.
• As a part of Green initiative, Bank has implemented Board Information System (BIS) for conducting Board level meetings in paperless mode. All agenda and minutes of various Board level committees are uploaded in this portal.
• The MIS solution has been revamped with a new solution and architecture for easy and quick availability of requisite information. Regulatory reports are also being automated through this system.
• The Bank has an intranet portal which is used extensively for information sharing, knowledge management and online examinations.
• Self Service kiosk to offer services like Passbook printing, Cash deposit and Cheque deposit have been installed at selected branches. Bank has also introduced electronic Passbook (United e-Passbook) facility for the customers as a mobile application to view account transactions.
• Bank has deployed some of the next generation tools to prevent various kinds of cyber attacks and has engaged professional agencies to provide Anti-Phishing, Anti-Pharming, Anti-Trojan and Anti-Malware Managed Services.
• Bank has implemented Security Operations Centre (SOC) which provides centralized view of Information Security status and command centre for IS Security operations.
Centralised Payment HUB
1. The Bank has set up a Centralised Payment Hub ( CPH) at Head Office to handle the enormous volume of e-transactions in a secured and reliable manner. The Centralised Payment HUB has started its operation w.e.f. 3.11.2014.
The department is catering the following services:-
a. NACH Debit
b. NACH Credit
c. APBS (Aadhar Payment Bridge System)
d. Mandate Management System of NPCI as Destination Bank
e. Mandate Management System of NPCI as Sponsor Bank
f. DBTL (Direct Benefit Transfer to LPG Customers)
g. ECS Debit as Destination Bank
h. Reconciliation of Aadhaar Enable Payment System ( AEPS)
i. Digidhan Payment
j. CMS (Cash Management Services)
(i) CMS Payment Services
1. Corporate Bulk Payment
2. GePG (Government e-Payment Gateway)
(ii) CMS Collection Services
1. Indo Nepal Remittance Service
2. Centralized Mandate Based Direct Debit Service
3. Corporate Cash & Cheque Collection Service
(iii) ASBA (Application Supported By Blocked Amount)
1. Core ASBA
2. Syndicate ASBA
3. e-ASBA (through e-banking / Net banking platform)
HR Details
The total staff strength comprises 52.31% officers, 30.02% clerks and 17.67% Sub-Staff. Women employees numbering 3238 constitute 21.54% of the Banks total staff strength.
For 2016-17 Bank recruited 311 Probationary Officers, 4 Security Officers, 7 Law Officers, 2 Company Secretaries and 246 Clerks. The recruitment process was initiated for filing up the vacancies to meet effectively succession planning process and man power management for smooth running of the organisation.
Inter cadre and inter scale promotions were successfully conducted during FY 2016-17 and in total 599 number of employees were promoted to next higher cadre/scale.
Training /Human Resource Development (HRD)
To meet the emerging challenges in the banking sector, the importance of skill up gradation of all categories of employees was keenly felt and as a sequel to this, Bank initiated the following steps in arranging various training programs during the year 2016-17.
i) In-House Training: The training courses organized by the Staff Training College, Kolkata and other four Training centres in which 3047 employees were given in house training.
ii) External Training: During the period under review bank has roped in professional training institutes for imparting various training programmes & workshop in which 211 employees have been trained externally.
Customer Orientation
The bank has taken several initiatives to remain customer friendly by providing prompt service, bringing in diversified technology supported products/ services, quickly responding to customer queries/ suggestions and redressal of customer complaints. The "code of commitment to customers" issued by BCSBI has been made available at the Banks website and
also sent to all the Branches and Regional Offices across the country. For improving the quality of the customer service, a toll free contact facility at customer services Department is provided to facilitate the customers to represent their grievance/ suggestions. The toll free facility is available from 8am to 10 pm. For ATM related issues, a separate toll free contact facility at head office has been provided and is available 24*7. The bank has put in place online grievances redressal system through the banks website, where the customers can lodge and track the status of their complaints/suggestions..
In order to ensure quicker and non discriminatory redressal of grievances, Bank has introduced a portal named Comprehensive Complaint Management System (CCMS) by leveraging technology. Under this system the complaint received by branches, Regional offices and departments at Head office, are acknowledged on real time basis and status of redressal / settlement is also uploaded on the portal till final redressal. Customer can also lodge complaint on the CCMS Portal directly which is automatically added to the outstanding database of CCMS by the system.
The Comprehensive Complaint Management System helps us to track the status of each complaint and to take a comprehensive look with regard to the total complaints received by the Bank during the period and status thereof. The necessary follow-up measures are immediately taken up for expeditious disposal of the complaints and grievances with concerned Branches/RO/Department at Head Office. The system enables the officials of the Customer Service Department to classify the nature of complaints with respect to the products and services to which the complaints are related. The analysis of data aims to help the Bank management to take appropriate action to improve service in the areas which are found deficient. The complaints from various sources like those received through mails and by post etc. are also entered in the CCMS portal. The consolidation of complaints from all sources on the CCMS portal helps the management to identify the nature of complaints, areas from which maximum complaints are received and also to take account of the time taken for the redressal. Such analysis is aimed at improving the standard of customer service and identifying the areas where staff members are to be trained, modification of products and services are required and remedial actions are to be taken for strengthening of system .
As per recommendation of the Damodaran Committee setup by Reserve Bank of India, our Bank has appointed Internal Ombudsman with effect from 07/12/15 to enhance the customer confidence level..
To have direct feel of the quality of the customer service in the Kolkata based branches, incognito visits by the officials of Head Office are conducted which additionally cover several areas such as ambience, discipline, punctuality and matters related to preventive vigilance to safeguard the interest of Bank and customers.
Besides to educate the young officers of the Bank about its products and service and to help them render quick and improved customer services online application titled "Quest" was started in June 2015.Quest is an application accessible to all members of award staff and officers of the Bank for clearing doubts related to banking operations, The queries are replied by the selected HO officials within a deadline of 24 hours. The process of questioning and answering has been going on since inception on regular basis and the response of the officials to quest is overwhelming and strongly positive.
In financial year 2016-17, customer complaints redressal percentage was 99.63% 315 numbers of complaints remained outstanding at the end of year, out of which 10 numbers of complaints were outstanding for more than one month .
The ADC related complaints are resolved within the stipulated period.
Out of 1070 Nos of complaints lodged in Government of India Portal (CPGRAM)for the financial year ending Mar 17, 1055 Nos complaints got resolved and 15 Nos complaints remain pending for redressal as on 31/03/2017.
Internal Control
Internal Inspection of all the operational units of the Bank is carried out on a continuous basis to ensure effectiveness of internal control mechanism and to provide high quality counsel to management on the effectiveness of risk management and internal controls including regulatory compliance by the Bank. The bank undertakes Risk Based Internal Audit (RBIA) which examines and evaluates the adequacy and effectiveness of the Banks internal control system.
The Audit & Inspection department at the apex level along with its extended arms of seven Regional Inspection Units (RlUs) and a team of Internal Inspectors/External Auditors (CA Firms) at field level is continuously engaged in inspection of Branches/Offices of the Bank as per Board approved Audit & Inspection Policy, for evaluating the level of implementation and adherence to the prescribed procedures and norms, and for identification, measurement and mitigation of risk involved in different functional areas. In order to align with changing scenario of the Banking System, Inspection Process is updated and necessary changes are incorporated in Audit & Inspection Policy of the Bank from time to time. To achieve these objectives, various types of Audits like Risk Based Internal Audit, Concurrent Audit, Credit Audit, Information System Audit, Snap Audit, Revenue Audit, Inspection of HO Departments and Management Audit of Regional Offices are conducted.
Risk Based Inter Audit (RBIA) of branches have been carried out to focus on effective Risk management and internal controls in respect of areas of potential risks and to play an important role in protecting the Bank from various risks. System based RBIA has been made operational during the year. During the year 2016-17, Risk Based Internal Audit of 1498 branches has been done.
Concurrent Audit by external audit firms have been conducted in branches/offices to ensure accuracy, authenticity and due compliance with Internal Systems, Procedures and guidelines of the Bank. During the year 2016-17, Concurrent Audit of 514 branches have been completed covering total deposit of 52%, total advance of 86% and total business of 65% of the Bank as a whole.
Credit Audit has been undertaken as an effective monitoring tool by identifying the gaps in the credit delivery process at branches and suggesting ways to bridge the gaps and also monitoring the compliances. During the year 2016-17, credit audit has covered 77% of the total credit portfolio as on 31 March, 2016 of the bank.
With the increased technology adoption by Bank, the complexities within the IT environment have given rise to considerable technology related risks. The Information System Audit of Banks IT infrastructure is being conducted to mitigate and effectively manage these technological risks.
Know Your Customer (KYC)
The Bank continues to take appropriate measures for strict adherence to KYC norms in case of all the customers and monitor transactions closely for implementation of AML (Anti Money Laundering) Standards.
Steps taken to ensure compliance of KYC/AML guidelines are as follows:
• The Bank has put in place an effective AML programme by establishing appropriate procedures and ensures its strict implementation.
• Cash Transaction Reports (CTRs), Suspicious Transaction Reports (STRs), Non-Profit Organization Transaction Reports (NTRs), Cross Border Wire Transfer Report (CWTRs) and Counterfeit Currency Note Reports (CCRs) are filed with FIUIND in prescribed formats within the time limits.
• The generation of daily alerts for offsite surveillance through our internal web-based application has been started and monitored by our AML Cell. At present, daily alerts are generated on 13 types of alert parameters.
• Numerous STRs on continuous basis and various reports as and when required by FIU-IND, Ministry of Finance was totally taken care by the AML Cell during the period of demonetization.
• Officially Valid Documents (OVDs) are being obtained from all the customers towards identity and address proof. These documents are being captured in CBS system.
• Risk categorization of all the customers and their profile updation is being done through the system.
• The bank has completed the process of allotment of Unique Customer Identification Code (UCIC) to all individual customers on the basis of PAN, Passport and Aadhar number.
• Overall KYC compliance of our bank is more than 99%.
• Upload of KYC data in CKYCR portal has been started.
Security Arrangements:-
The Bank has taken necessary steps to strengthen the security arrangement in branches by installing security gadgets from time to time in conformity to the guidelines issued by the Reserve Bank of India. Additional security gadgets / services provided at our Banks branches are as follows:-
A. In order to further strengthen the security of the branches all the branches would be equipped with CCTV surveillance system. All the currency chest branches have already been equipped with CCTV system. Total 1553 branches have been covered with the CCTV Surveillance. The purchase formalities for the CCTV are complete and purchase order has been placed and the installation process in the remaining branches is underway.
B. As an additional safety measure all the Currency Chest branches within the jurisdiction of Kolkata Police have been brought under the Integrated Security Solution (ISS) which has a control monitor at Lal bazar Police Control Room for directly viewing of the activities inside the currency chests in case of a distress.
C. In order to implement the Reserve Bank of India Clean note policy 1003 branches have been equipped with (1+1) pocket Desk Top Authenticator cum Sorter to help the branch to identify the Forged Indian Currency Notes (FICN) at the counter itself. This will also enable the branches to sort the currency notes in to issuable and non issuable currency notes for redistribution amongst the customers and members of public.
D. During year 2016-17 the security department pursued and recovered about Rs. 603818.00 of the insurance claim dues, for the money lost during crime against the bank at different branches, pending with the Insurance Company.
E. In order to regulate and monitor visitors to the Banks Head Office a Computerized Visitors Management System has been installed at the Main Entrance gate of the Head Office.
Premises
Purchase:
• Purchase of 3BHK Flat at 1st Floor, Hindustan House, 28, Altamount Road, Mumbai - 400026 with garage measuring 153 sft. Built-Up area-3857 sft & Carpet Area-2755 sft.
Construction:
• Engagement of BSNL (PSU) as Project Management Consultants for various Construction and Procurement Projects of United Bank of India in different parts of India.
• Construction of Boundary Wall on Banks land at CBD-79, International Financial Hub, New-Town-Rajarhat, Kolkata through BSNL (PSU) as Project Management Consultants.
Upgradation:
• Overhauling and repairing of Water Treatment and Softening Plants vis-a-vis Annual Maintenance Contract for their Day-to-Day operation and maintenance for 3 (three) years installed at United Bank of India, Head Office Premises.
• Installation of Photo-Voltaic Grid connected 50KWp Solar Plant each at H.O. and Staff Training College, Kolkata. Installation and commissioning completed at Staff Training College and is presently operational.
• Replacement and upgradation of old low tension Air Circuit Breakers at Head Office.
• Supply, Installation and Commissioning of Eco friendly DG sets at Banks Officers Quarter at Shantikunj Apartment.
• Electrical Audit of Branches.
• Renovation of newly acquired 5BHK Apartment at Gujrat Vihar, New Delhi for accommodation of participants of Staff Training Centre.
• Updated and circulated "Policy & Operational Guidelines for Acquisition of Accommodation On Lease/Rental Basis for Banks Use".
• Formulated and circulated "Manual on Policy and Procedures for procurement of Goods and Services by the Bank" on the basis of relevant guidelines of CVC, Ministry of Finance, Govt. of India, Indian Bank Association & views / feedback of departments at H.O.
• Structural Audit of H.O. Building, Central Records/ RSETI Building, Rajpur, Kolkata South Region Office Building & Manicktala Branch Building.
• Repair and Renovation of Banks owned Premises at Siliguri, North Bengal Region.
• Phase-Wise conversion of normal light fittings with energy efficient LED Fittings (around 1075 nos. have already been converted).
Ongoing:
• Structural Strengthening / Retrofitting and external repair and painting of Head Office Building through BSNL (PSU) as Project Management Consultants.
• Construction of B+G+3 Office Building on Banks Land at Agartala for accommodating Tripura Regional Office, Agartala Branch with RBI "AAA" Class Currency Chest through BSNL (PSU) as Project Management Consultants.
• Construction of G+6 Office Building on Banks Land at Kolkata (Salt Lake) for accommodating Data Centre, Regional Office, Branch and e-lounge through BSNL (PSU) as Project Management Consultants.
• Construction of G+1 Office cum Residential Building on Banks Land at Mizoram University in Aizwal with Mizoram University Branch and RBI "B" Class Currency Chest through BSNL (PSU) as Project Management Consultants.
• Installation of 1 - 1.2 KW Photo-Voltaic solar system aided VSAT operation at 1479 BC branches.
Implementation of Official Language
With a view to implement the Official Language Policy of the Government, 39 Officers were trained in regular Hindi of Praveen & Pragya courses at Head Office. Hindi workshops and Unicode based computer training in Hindi were organized for the Officers & employees of the Bank in each quarter at the Staff Training College, Kolkata. The quarterly meetings of Official Language Implementation Committee of Head Office were held under the chairmanship of the Managing Director & CEO. In-house Hindi magazine of the Bank "United Darpan" and e-magazine in Hindi were released. Inspection of all the Regional Offices and departments of Head Office were done in regard to implementation of Official Language.
Hindi Day was celebrated on 14 Sept, 2016 and subsequently different Hindi competitions and seminar were organized during Hindi Week.
The inspection of Head Office was done by the Committee of Parliament on Official Language in May, 2016 & January, 2017 regarding implementation of Official Language in the Bank. The said committee appreciated the Bank for better performance. Some of the Regional Offices of the Bank i.e. Meerut, Patna & Burdwan received prizes from the Town Official Language Implementation Committees for best performance in Hindi. Besides, different Branches like, Dehradoon & Bikaner had also received prizes from the TOLIC for implementation of Official Language policy successfully.
Regional Rural Banks (RRB)
We have 4 sponsored Regional Rural Banks in 4 states-Bangiya Gramin Vikash Bank in West Bengal, Assam Gramin Vikash Bank in Assam, Tripura Gramin Bank in Tripura and Manipur Rural Bank in Manipur.The total network of branches stands at 1169( including 8 non-functional Branches of MRB due to law and order problem).
On 31.03.2017 their total Busines was Rs. 39009.17 Cr with Total Deposit of Rs. 27015.00 Cr & Advance of Rs. 11994.17 Cr. Total profit earned by them is Rs. 76.89 Cr. Average Gross NPA was 17.68 %.
Our RRBs are now working on CBS platform and enabled to NEFT, RTGS, AEPS/ATM through Rupay Card/Nach/ PFMS/NECS/PoS. They are equipped with Locker, ALM, Fixed Asset Module, Biometric Authentication & e-kyc etc like technology driven products.
United Demat
The depository services to the Banks customers are provided on the CDSL and NSDL platform under the umbrella of "United Demat", which aims at providing hassle-free, fast and accurate transactions under depository environment. Some of the benefits are:
• Easy and convenient way of holding securities
• Immediate transfer of securities without any stamp duty on transfer
• Safer than paper-shares (no chances of bad delivery, fake securities, delays, thefts etc. are eliminated)
• Reduced paperwork on transfer of securities
• Auto-credit into Demat account
• Expeditious credit of securities and fund resulting from corporate actions and distribution of corporate benefits;
• A single Demat account can hold investments in both equity and debt instruments.
• Online access through easiest
• Periodic statement of holding and transaction
• Convenience of changing client account details including nomination as and when required hassle-free transmission.
• Direct credit of shares allotted in IPO in Demat Account and credit of Dividend in linked bank account.
• A single Demat account can hold investments in both Equity and Debt instruments. Even Mutual Fund Units,Sovereign Gold Bonds, Insurance Policies etc can be held in Demat form in the same Demat Account.
Demat Services are made available touching all aspects of share trading like:
• Opening of Demat account
• Purchase and Sale of Securities
• Dematerialization & Rematerialization
• Destatementization & Restatementization / Redemption of Mutual Fund Unit
• Pledge / Unpledge / Confiscation
• Freeze & Unfreeze
• Transmission & Transposition
U-Connect - Banks Share Trading Services
United Bank of India facilitates share trading for its customers through two products under the umbrella "U-Connect" - one in association with Kotak Securities Limited (KSL) by the brand name ‘Trio and other with The Calcutta Stock Exchange Ltd. (CSE).
In these products, the client opens its Bank and Demat accounts with United Bank of India whereas the trading account is opened with Kotak Securities/ CSE. The products are feature-rich with facilities of investment, trading, exposure, margin trading, funding, IPO applications through ASBA, systematic investment, placing after market orders and future orders valid for 365 days, all being made available at an extremely competitive pricing. The investors have flexibility of putting their trades online, offline, using mobile app and through dealer. Apart from equities investors can also trade in bonds,
ETFs and MF through our products. The investors will also have access to the research reports and trading tips from the award winning research team
Alternate Delivery Channels
Bank has always been committed to provide convenience based banking and has thus been introducing all popular and latest alternate banking channels. The position of Banks alternative delivery channel product / services for the FY period 16-17 is as below:
| Channel | Total / User Base |
| Wallet | 89,929 |
| United UPI | 5 Lac Plus |
| Debit Cards | 101,88,328 |
| Internet Banking | 4,48,469 |
| Mobile Banking | 3,89,199 |
Bank has been regularly upgrading its systems for development of new products and in improvisation of the processes for operational convenience. The following new initiatives have been undertaken during the FY 2016-17:
1. On-line SB Account opening facility.
2. Platinum chip based RuPay debit card with higher limits.
3. Mudra RuPay debit card.
4. IMPS based 24X7 funds transfer facility through Internet Banking.
5. Sovereign Gold bond application through Internet Banking.
6. Hindi version of Internet & Mobile Banking.
7. Self registration of Internet Banking through debit cards.
8. Personalized debit card proactive issuance against expired cards.
9. Instant fund transfer to other Banks customer on the basis of Mobile number only, named as UFT (United Fund Transfer)
10. Mobile & Internet based Wallet services introduced, named United Wallet.
11. Online Loan against FD - Internet Banking
12. Integration with IRCTC for Debit Card Transactions
13. Salary Payment through Internet Banking
14. Image Card Based International Platinum Rupay Card
15. Launch of POS Terminals for Merchant Acquiring
16. Launch of UPI (Unified Payment Interface)
17. Income Tax eFiling through bank account using EVC
18. IMPS through Branch
19. Voice OTP for internet Banking transactions
20. Missed Call Based Account Statement
21. Instant Internet Banking issuance through Insta Pin
22. Physical Rupay Card for United Wallet
23. Self Generation of Debit Card PIN through Internet Banking
24. RuPay Domestic Debit Card Compliance
Based on the RBI Guidelines & as part of its ongoing sound practices, the Bank has also set up a Compliance Department
whose role is to co-ordinate the identification of compliance issues, assessment and mitigation of compliance risks.
Board has adopted Compliance Policy for the Bank. In activity wise areas like deposit & services, advances, KYC-AML, BCSBI Codes, compliance issues are identified and remedial measures are taken therefore. Roles & Responsibilities as regards compliance functions is defined for every tier in the Bank. A reporting system has also been introduced to ensure compliance of regulatory & statutory compliance issues through:
• Self certification
• Random testing through designated Compliance Officers & Officials from H.O.
• Acknowledgement & Compliance of the direction issued by Gol /RBI / IBA from the functional departments of Head Office.
• Quarterly statement by Branches and Regional Offices with details of compliance rules covering the important areas
Under Corporate Governance, The MD & CEO / Executive Directors periodically reviews compliance reports, to ensure timely submission of regulatory returns by the different departments of the Head Office to the RBI / Gol / IBA on regular basis and adherence to all other applicable provisions of law, rules & guidelines.
Corporate Governance:
The report of the Board of Directors on Corporate Governance is covered in the separated section on the subject (Page 38 to 50.
Invest wise with Expert advice
IIFL Customer Care Number
(Gold/NCD/NBFC/Insurance/NPS)
1860-267-3000 / 7039-050-000
IIFL Capital Services Support WhatsApp Number
+91 9892691696
Download The App Now
Follow us on
2025, IIFL Capital Services Ltd. All Rights Reserved
IIFL Securities Limited - Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213,IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248
This Certificate Demonstrates That IIFL As An Organization Has Defined And Put In Place Best-Practice Information Security Processes.
