Vijaya Bank(Merged) Management Discussions.

Economic Scenario

For global economy, 2014-15 was an year of moderate recovery with diverging trends across the regions and economies. Relative to last year, the outlook for advanced economies improved during 2014-15, while growth in emerging market and developing economies showed deterioration. According to International Monetary Fund (IMF), global economy witnessed a moderate growth of 3.4% in 2014, as compared with the same growth rate in 2013. While advanced economies grew by 1.8% in 2014 compared to 1.4% in 2013, emerging economies grew by 4.6% in 2014 compared to 5.0% in 2013. Global inflation remained lower levels during the year, in tune with the lower international gold and oil prices. Monetary policies across several advanced and emerging economies were in an easing cycle in order to provide a fillip to economic growth.

During 2014-15, Indian economy exhibited mixed trends and India’s GDP growth showed moderate growth during the first three quarters. However, GDP growth got a lift as the Central Statistical Organization (CSO) improved the way it measures economic output. According to the new methodology, GDP growth is expected to be 7.4% in 2014-15 compared with 6.9% in 2013-14. Inflation measured by wholesale price and retail price traversed the envisaged path set by the Reserve Bank of India during the year. Headline inflation measured in terms of the Wholesale Price Index trended down to negative zone, slipping to all time low of -2.33% for March 2015. Retail inflation has also moderated significantly to 5.25% in March 2015 compared to 8.25% in March 2014. India’s foreign trade showed subdued performance in 2015-16 as a result of the adverse impact of uncertainties in the global markets. As per the provisional data released by the Department of Commerce, Government of India, during April-March 2014-15, merchandise exports of India stood at US $310.5 billion and merchandise imports stood at US$ 447.5 billlion. Lower growth in exports (-1.2%) and imports (-0.6%) resulted in modest increase in trade deficit by US$ 1.2 billion to US$ 137 billion.

Capital formation has showed decelerating trend with a slowdown in investment by both the private sector and government and the gross fixed capital formation (GFCF) rate at current prices has come down to 28.6% in 2014-15. The financial markets in India responded to the overall developments witnessed in the global and domestic front. Money supply (M3), which was 13.6% at the beginning of the financial year 2014-15 moderated during the course of the year to 11.1% by end-March 2015 as a result of slowdown in economic activity and lower credit demand.

Resource mobilization through the primary market exhibited mixed trends during 2014-15 with equity and debt issues declining and private placements of corporate bonds increasing. However, in the secondary market, the benchmark indices, BSE Sensex and Nifty showed a general upward trend during the financial year. Net capital/financial flows both in terms of quantum and quality improved considerably during 2014-15. India’s foreign exchange reserves increased to US$ 341.4 billion at end March 2015.

The 10 year Government bond yield has been moving downwards during 2014-15 as a combined effect of positive market sentiments, lower inflation levels, corrections in commodity prices and positive developments on the fiscal commitments by the government. Rupee has exhibited considerable resilience to global events in 2014-15 and the Rupee-US dollar exchange rate has broadly remained stable during the year due to the huge inflow of FDI and FII in the equity and bond markets. However, on point-to-point basis the rupee has depreciated by 4.3% from Rs 59.9 per US dollar at end March 2014 to Rs 62.50 per US dollar on 31 March 2015.

Gross Fiscal Deficit during 2014-15 is estimated at 4.1% of GDP compared to 4.5% during 2013-14.

Banking Scenario

Indian banking sector witnessed several challenges during 2014-15 and the growth of the Indian banking sector moderated further during the year. The banking sector has witnessed deceleration in credit and deposit growth. Aggregate deposits of Scheduled Commercial Banks registered 11.4% y-o-y growth in 2014-15 compared to 15% recorded last year. Non-food credit for Scheduled Commercial Banks (SCBs) registered a y-o-y growth of 9.5% in 2014-15 compared to 14% recorded last year. Slowdown in credit growth has been broad-based barring agriculture and allied activities.

Liquidity conditions have remained broadly balanced during 2014-15, except transient tight conditions. Slower paced growth in credit in comparison to deposit mobilization and lowering of government cash surplus and the narrowing gap between credit and deposit growth helped to ease liquidity conditions.

Monetary policy actions during 2014-15 were mainly sought to balance growth inflation dynamics. The Reserve Bank of India (RBI) adopted the Consumer Price Index as the measure of the nominal anchor for policy communication. The RBI and the government agreed upon a new monetary policy framework wherein the RBI adopted a flexible inflation targeting mechanism. Throughout the year financial year 2014-15, RBI maintained a sharp focus on the Consumer Price Inflation and kept policy rates unchanged till January 2015. With the easing of inflationary conditions, the RBI has signalled easing of monetary policy stance by reducing policy repo rate under the liquidity adjustment facility (LAF). The RBI also reduced the statutory liquidity ratio (SLR) by 50 basis points from 22.0% of net demand and time liabilities (NDTL) to 21.5%. However, the transmission of changes in policy rate to deposit and lending rates of banks also remained muted in 2014-15.

Asset quality of banks showed signs of stress during the year as a combined effect of sluggish domestic growth during the last two years and continuing uncertainty in the global markets leading to lower exports. Gross non-performing advances of scheduled commercial banks as a percentage of total advances showed an increase during the year. Lower credit growth and higher provisioning on delinquent loans also affected the profitability of banks.

Outlook

Global growth prospects expected to strengthen and the year 2015 is expected to be the beginning of a sustainable recovery for the global economy. Global growth in 2015 and 2016 will be supported by stronger recovery in the advanced economies (AEs), turn around in Emerging Market Economies (EMEs) and soft energy and commodity prices. Lower international prices of crude petroleum are expected to boost global aggregate demand. The International Monetary Fund, in its latest World Economic Outlook, projected global growth at 3.5% for 2015 and 3.8% for 2016. However, downside risks to global growth remain elevated, mainly emanate from the slowdown in emerging market economies, and the uneven effects of currency and commodity price movements. On the domestic front, macroeconomic vulnerabilities have abated significantly in the beginning of the financial year 2015-16, on the back of improvement in growth outlook, lower inflation levels and signs recovery in the external sector. India’s GDP growth is expected to improve in 2015-16 in view of the expansionary monetary policy stance and improving domestic demand conditions. The expected improvement in global growth prospects and domestic policy reform initiatives also drive GDP growth. Retail inflation is projected to remain below 6% in 2015-16, within the target set for January 2016, which will provide headroom for the RBI support growth by reducing policy rates. The broad-based decline in inflation, favourable financial market conditions, and the government’s initiatives to improve the business climate including the ‘Make in India’ campaign to attract investment is expected to give further fillip to domestic growth. Indian economy in 2015-16 is expected to emerge as one of the bright spot in the global landscape, and becoming one of the fastest-growing major emerging market economies in the world. The major challenges during 2015-16 emanate from factors like inadequate support from the global economy, possible spill-overs of below normal agricultural growth, weaknesses in corporate balance sheets, volatile rupee and attracting sufficient capital inflows to the economy. Indian Banking sector is expected to perform well in 2015-16 in view of the positive domestic outlook and favourable policy environment. The steady acceleration in services sector, expected turnaround in industrial growth, clearance of stalled projects, plans announced by the Government in the Union Budget to step up infrastructure investment and improvements in overall business climate would result in higher credit growth during 2015-16. The asset quality of banks is also expected to improve with the positive developments in the macroeconomic conditions. Indian Banking sector is expected to perform well in 2015-16 in view of the positive domestic outlook and favourable policy environment.

PERFORMANCE HIGHLIGHTS OF THE BANK DURING THE YEAR 2014-15

Capital, Reserves & Networth

The Authorized Capital of the Bank at present is Rs 3000 crore divided into 300 crore shares of Rs 10 each. At present, Government of India holds 74.06% Equity Share Capital of the Bank. The total paid up (equity share) capital of the bank is Rs 859.12 crore. During the Year 2014-15, Bank added Rs 271.84 crore in to Reserves & surplus and the total Reserves and surplus is Rs 5300.64 crore. The Networth of the bank increased from Rs 5638.93 crore to Rs 5923.24 crore this year.

Working Results

Net profit for the year 2014-15 is Rs 439 crore as compared to Rs 416 crore for 2013-14. On the deposit front, average cost of deposits increased from 7.98% in 2013-14 to 8.10% in 2014-15. Yield on advances for 2014-15 is 11.34% when compared to that of previous year 11.26%. The trends in financial results of the Bank are highlighted in the tables below: (Rs in crore)

Sl. No. Item 2013-14 2014-15 Annual increase (%)
1. Interest Income 10707 12273 14.64
2. Interest Expenditure 8623 9981 15.74
3. Net Interest Income (1-2) 2084 2292 10.03
4. Non-interest income 710 879 23.80
i. Profit on sale of investments 190 299 57.37
ii. Other non-interest income 520 580 11.54
5. Net Total Income (3+4) 2794 3171 13.49
6. Operating expense 1690 1912 13.14
i. Staff Expenses 1040 1166 12.12
ii. Other operating expenses 650 746 14.77
7. Operating profit 1104 1259 14.07
8. Operating profit (excl. Treasury profit) 914 960 5.03
9. Provisions and 688 820 19.16
Contingencies
10. Net profit 416 439 5.65

Important Profitability Ratios

Sl. No. Item 2013-14 2014-15
% %
1 Yield on funds 9.08 9.15
2 Cost of funds 7.31 7.44
3 Interest spread (1-2) 1.77 1.71
4 Yield on advances 11.26 11.34
5 Cost of deposits 7.98 8.10
6 Yield on investments
- excluding Trading Profit 7.22 7.50
- including Trading Profit 7.75 8.17
7 Other operating expenses to 0.55 0.56
Average working funds
8 Cost-Income Ratio 60.49 60.30
9 Establishment cost to average working funds 0.88 0.87

Dividend

Taking into consideration the overall profitability, the Board of Directors has recommended a final dividend of Rs 1.50 per share (15%), for the year 2014-15. The total amount of equity dividend including dividend tax for 2014-15 is Rs 155.10 crore.

Deposit Mobilization

During the year, CASA deposit of the bank grew to Rs 25721 crore, a growth of 12.52% compared to previous financial year which was Rs 22860 crore. Out of which the Saving Bank deposit grew by 12% and Current Account deposit grew by 14%. The CASA % to total deposit also improved to 20.35% from 18.39% for the last year. The total deposit of the bank increased to Rs 126343 crore compared to last financial year which was Rs 124296 crore. The Certificate of Deposit stood at Rs 12258 crore during the year.

Employees Productivity

Business per employee as at 31st March 2015 is Rs 16.56 crore. Profit per employee stood at Rs 0.03 crore as at March 2015.

Branch Network

With the opening of 109 branches during the year 2014-15, the network of branches reached the level of 1618 from 1512 during the previous fiscal and merged 3 Corporate banking Branches . There are 49 Extension Counters and 2 Satellite Offices at the end of the year 2014-15. The bank has also opened one new Regional Office at Meerut during the year 2014-15 with that total number of Regional Offices reached to 27.

Retail Credit

Retail Lending is viewed as aviable business proposition and continue to be the thrust area for credit expansion in view of its inherent advantages such as risk spread, better yield and large volume credit buildup.

The Bank has disbursed Rs 9065 crore under Retail credit during the year & the amount outstanding as at March 2015 stood at Rs 18735 crore, recording an Y-o-Y of 19.96 %. The Retail Credit Portfolio accounted for at 21.36 % of the Bank’s Gross Credit.

The Balance outstanding under Housing loan, Education loan, Vehicle loan & Jewel Loan schemes, as on 31st March 2015, are Rs 6526 crore, Rs 903 crore, Rs 2607 crore and Rs 3820 crore respectively.

During the year, Bank launched special campaigns like ‘Grand Festival Carnival’ offering attractive benefits to customers like waiver of charges etc was introduced. Bank is continuously striving to make the Retail lending products more competitive in the market by revamping the existing products. Bank has also launched Vijaya Top Up Loan exclusively for housing loan customers.

Bank has also revamped major retail products by following the present market conditions and going on par with the competitors which will help the field staff in canvassing more business. Bank has started Online tracking of Retail Loan applications which helps for monitoring the pending applications by the applicant and the branch as well as Regional Office / Head Office.

Credit Expansion

The gross Credit of the Bank registered a growth of 6.39 % from Rs 82425 crore on 31.03.2014 to Rs 87692 crore on 31.03.2015. Considering the economic down trend the Bank had been selective in the approval of big ticket credit proposals.

The Bank has put in place a perfect due diligence mechanism for screening of credit proposals and implementing the guidelines received from Department of Financial Services and Reserve Bank of India. In terms of extant guidelines from Ministry of Finance, the Bank is following committee approach for credit approvals at Regional Office and Head Office levels. The committees meet as frequently as possible to reduce turnaround time for credit decision. The Bank has continued with its strategy to recruit professionals from CA/ICWA/CS/MBA streams for ensuring good standard credit processing.

Bank’s credit department is accredited with ISO/ IEC 27001:2005 certification for information security management system by British Standard Institute (BSI).

In tune with market trends, Bank has come up with various new loans products and also fine tuned existing ones to suit the needs of customers.

Large & Mid Corporate

The Large Corporate segment constituted 48% share in total domestic advances as on 31.03.2015. In order to have more focused attention and to reduce turnaround time, five specialised corporate banking branches are functioning at different geographical locations. Apart from Corporate Banking Branches, three Industrial finance branches are catering to the needs of the corporate customers including financing for infra/non infra projects. In addition the Bank has SME branches spread across the country catering to the needs of mid-corporate and SME clients by offering services including cash management, forex, treasury products, trade finance, deposits, retail banking etc.

Bank’s Corporate/SME/IFB Banking Division offers an array of loan products and services such as Term Loans, Demand Loans, Corporate Loan, Short-Term Loans, Working Capital Facilities (FB+NFB), Trade Finance Products, Bridge Loans, Syndicated Loans, Infrastructure Loans, Foreign Currency Loans, Loan Against Future Rent Receivables and many more to its corporate clients depending upon their needs. Over the years, Bank has made significant progress in establishing healthy business relations with several multinationals, domestic business houses and prime public sector companies.

Infrastructure Finance

During the year, the Bank has sanctioned fund based limits of Rs 7645 crore and Non Fund Based limits of Rs 230.93 crore under infrastructure category power, telecommunications, ports, roads etc. Our exposure to infrastructure sector is 28.84 % of gross advances and is well within the prescribed sectoral exposure cap.

Project Finance and Syndication Group

Project Finance and Syndication Cell Is functioning at its Head Office, Bengaluru. The functions of the Cell include preparation of Project Information Memorandum, arranging for Techno Economic Viability Study of the projects and Syndication for credit requirements of the entrepreneurs. This Syndication Cell is well equipped with good manpower including senior executives and qualified professionals.

TREASURY AND INTERNATIONAL OPERATIONS:

Investment and Fund Management

Total Investment portfolio of the Bank increased from

Rs 42,833.78 crore (SLR Investment: Rs 33,319.60 crore & Non-SLR Investment: Rs 9,514.18 crore) as on March 31, 2014 to Rs 44,698.34 crore (SLR Investment: Rs 34,933.00 crore & Non-SLR Investment: Rs 9,765.34 crore) as on March 31, 2015.

The 10 year benchmark yield closed at 7.74 % as on March 31, 2015 against 8.81% as on March 31, 2014. The average yield on investment (including profit on sale of investments and RIDF) during the year worked out to 8.17 % as against 7.75% in FY 2013-14.

The Bank also complied with CRR and SLR requirements as stipulated by RBI consistently during the year.

International Banking

Bank’s export credit as at 31.03.2015 registered a Y-o-Y growth of 23.79% and stood at Rs 1571.39 crore. Out of the above, quantum of export credit extended by the Bank in foreign currency was USD 42.13 million. As at March 2015, foreign exchange business turnover of the Bank stood at Rs 21,172.17 crore, recording an annualized growth of 0.51 % over the previous financial year. Bank has successfully implemented Electronic Data Processing and Monitoring System (EDPMS), e-BIZ projects of RBI.

Bank’s total NRI deposits as at 31.03.2015 stood at Rs 2998.96 crore, as against Rs 2398.57 crore as at the end of previous financial year, thereby recording a growth of 25.03 %. During the financial year, the Bank has extended ‘Speed/Flash Remittance’ facility to UAE Exchange Centre LLC, Al Ansari Exchange UAE, Wall Street Exchange, UAE and Al Bader Exchange, UAE to enable the NRIs from Gulf Countries to electronically remit funds to their account with our branches anywhere in India. In addition to the above, the bank also has Rupee Drawing Arrangement (RDA) with Oman United Company LLC, Oman to facilitate rupee remittances to the accounts in India. The Bank has set up a NRI Customer Cell at Head Office, Bangalore exclusively for responding to the queries of our NRI customers. The Bank has also launched Vijaya NRI Digest, a fortnightly e-newsletter covering area of interest to NRIs.

Export & import credit

The Bank is active in meeting the importer and exporter client’s financial requirements both in domestic and in foreign currency. Bank’s 47 branches across the country are designated to handle foreign exchange business.

ASSET QUALITY

The Bank continued its focus on maintaining quality assets along with thrust on preventing fresh slippages. It initiated and continued to emphasize various measures in this direction, including the following:

Accounts showing signs of stress / likely default in dues are identified and treated as Special Mention accounts and are closely monitored. Wherever feasible, such assets are restructured on merits, with additional need-based credit limits considered in deserving cases. Viability study is to be conducted in respect of SME accounts slipped to NPA and to be brought under nursing wherever feasible within a time frame.

Special Recovery Cells are formed at RO’s for systematic follow up of NPA accounts. Centres wherever DRT’s are functioning, nodal Officers are designated, who keeps regular liaison with the presiding officer and the bank’s advocate for speedy disposal of the cases.

In case of willful defaulters, stringent recovery measures, including legal actions like Securitization and submitting the names to RBI are done.

Services of Lok Adalats are resorted to for speedy recoveries of impaired assets.

All 10 Lakhs and above NPA accounts are reviewed by the Top management through video conference with the Regional Heads and guiding them for the speedy recovery.

To facilitate speedy recovery, ‘Vijaya Adalats’ under the Recovery Policy of the Bank are regularly conducted at various centres by involving a cluster of branches and accounts are settled on the spot. During the year, Bank could settle Rs 109.88 crore in 5628 accounts by way of settlements till 31.03.2015.

A special One Time Settlement Scheme for chronic tractor loan NPAs was reintroduced on 01.01.2015 and the same was in force upto 31.03.2015.

NPA recovery campaign-2015 has been introduced for a period from 01.01.2015 to 31.03.2015 in order to reduce the NPA level.

To speed up the recovery in small value NPAs, 16 recovery officers have been posted at identified centers with large number of NPA accounts in 8 regions (6 in Karnataka and 2 in Andhra Pradesh). Recovery officers have made recovery of Rs 38.27 crore and Upgradation of Rs 53.78 crore upto the month of March 2015.

In consultation with the Branches, we have identified 769 Doable NPA accounts with balance of Rs 10 Lakhs and above totaling Rs 807.37 crore which can be upgraded by March 2015.These accounts are followed up by our Department with the Branches concerned on Continuous Basis. Upto the month of March 2015, Rs 608.39 crore has been recovered/upgraded.

The gross Non-Performing Assets of the Bank as on March 2015 stood at 2.78% of total advances, while net NPA ratio was 1.92% of net advances. During the year 2014-15, Bank could effect total cash recovery of Rs 931.42 (including interest) and upgraded NPAs amounting to Rs 931.96 crore. Further, the Bank also made provision of Rs 698.40 crore for the unexpected defaults, apart from having a floating provision of Rs 71.35 crore as on March 31, 2015. The Provision Coverage Ratio (including PWO) as at March 2015 worked out to 64.01%.

RISK MANAGEMENT

Credit Risk:

Bank has put in place a Comprehensive lending Policy as well as Credit Risk Management Policy which encompass various aspects such as risk appetite, risk based pricing, risk diversification / mitigation strategy, prudential limit, substantial exposure ceiling, group exposure ceiling, Rating wise exposure ceiling, preferred sector growth strategies, credit approval process, documentation and security standards, security valuation etc these policies are revised periodically based on corporate goal and business plans of the Bank. As per RBI Guidelines on Stress Testing, the stress tests for Credit Risk have been carried out on a half year basis which covers scenarios such as credit portfolio to stress like increase in NPAs, slippage of restructured standard accounts, downgrade in Counter-party rating, depletion in collateral, etc. Further, Bank has put in place a comprehensive risk rating/ scoring system which serves as a single point indicator of diverse risk factors on the counterparty and to facilitate execution of proper and consistent credit decisions. Bank has evolved separate risk scoring models for Housing /other Retail lending sectors and endeavors higher coverage in risk rating exercise. Rating migration analysis in respect of credit exposures of Rs 1.00 crore and above is conducted on half yearly basis. Since September 2009, Bank has been conducting risk rating of all retail and non retail loans by using CRISIL RAM software which is Basel II compliant. The software facilitates Bank to maintain the credit quality and also to support efforts of the Bank in translation towards advanced approach of Basel II by ensuring that prior to sanction of loans, all type of exposures is covered under risk rating process.

Asset Liability Management (ALM) and Market Risk:

ALM and Market Risk of the Bank is managed by the Asset Liability Management Committee (ALCO) and Market Risk Management Committee (MRMC) respectively. Appropriate tolerance limits have been stipulated for mismatches in different time buckets, both for managing liquidity and interest rate risks. These are being monitored at fortnightly intervals and also appraised to the Board of Directors.

The market risk exposure is measured by tools like VaR (Value at Risk), AGL (Aggregate Gap Limit), and Duration gap analysis. Exposure limits for all countries have been put in place to manage and monitor the country risk. Mid-office reports on treasury operations are placed before the General Manager, Risk Management Dept., on a daily basis and before MRMC on a monthly basis, covering information about exceptions / reviews and compliance.

Interest Rate Risk on entire portfolio is identified and measured through Earnings at Risk (EaR). Sensitivity analysis is also conducted and reviewed by the top management. Contingency Funding Plans, Prudential Ratios / Limits have been set and actual position is monitored as part of Liquidity Risk Management. Stress Test on Interest Rate Risk, Liquidity Risk, Forex risk, etc on different scenarios are carried out on quarterly basis and appraised to Asset Liability Committee (ALCO). To monitor short term liquidity, the Bank is preparing the ALM statement of Structural Liquidity on daily basis.

The Duration Gap Analysis is implemented for assessing the possible impact on market value of equity (net worth) using 200 basis points shock on interest rate curve.

The bank has applied to RBI, seeking their approval to implement Internal Model Approach (Advanced Approach) for Market Risk.

The Funds Transfer Pricing, a new technology on transfer pricing mechanism, has been implemented for assessment of branch profitability in a scientific manner.

Operational Risk:

Bank has put in place a well defined Operational Risk Management Framework to effectively identify, measure, manage and address Operational risks. The Bank has also put in place a framework required for implementation of The Standardized Approach (TSA). The governance of Operational Risk Management is monitored by Operational Risk Management Committee (ORMC), which reviews the operational risk loss event data, new products, processes and systems adopted by the Bank and provides suggestions for taking corrective/preventive measures to strengthen the internal system and procedures. In order to mitigate Operational risks, several thematic studies have been conducted for frauds committed in loan and deposit portfolios, so as to identify systemic deficiencies from Risk Management angle. Further, in order to move towards advanced approaches, bank has put in place frameworks for Risk Control Self Assessment (RCSA) and Key Risk Indicators (KRIs). Bank has been taking steps to strengthen the RCSA and KRI by reviewing the same and improving the coverage area for management of Operational risk. The Bank has been permitted by RBI to assess Operational risk capital under The Standardized Approach (TSA) – (Parallel run w.e.f March 2015).

Basel-II & Basel III Compliance:

As the Bank requires corporate clients’ risk rating status awarded by rating agencies approved by RBI, the Bank has entered into MOU with all the six rating agencies viz CRISIL, ICRA, CARE, Brickwork, SMERA and Fitch so that borrowers can avail the rating services at a competitive fee and bank also derives benefits on lower capital charge depending on the rating status. The Bank has formulated its ICAAP policy which is revised from time to time and the ICAAP Document is submitted to RBI on half yearly basis.

In compliance to the RBI guidelines and adopting Standardised Approach for Credit Risk, Standardised Duration Gap for Market Risk and Basic Indicator Approach for Operational Risk, Bank has complied with Basel II norms and the overall Capital Adequacy Ratio as at 31st March ’2015 under Basel II works out to 11.70%, which is above the minimum stipulated norm of 9%. Bank has also complied with Basel III norms and the overall Capital Adequacy Ratio as at 31st March ‘15 works out to 11.43%, which is above the minimum stipulated norm of 9.00%.

Integrated Risk Management System (IRMS) Project:

In order to facilitate smooth and effective compliance of Basel-II norms, the Bank has taken up for implementation of Integrated Risk Management System (IRMS).

The unique IRMS Project consists of six solutions, viz. Credit Risk Management (CRM), Market Risk Management (MRM), Operational Risk Management (ORM), Credit Risk Rating Solution (CRR) (Retail & Non-Retail), Asset Liability Management (ALM) and Funds Transfer Pricing (FTP) Solution.

ISO – 27001- Certification for Risk Management Department

Chief Information Security Officer (CISO) of our Bank has been awarded Information Security Maestro 2015 awards for Information Security and BCP initiatives by Info security magazine.

Capital Adequacy

During current financial year, Bank has successfully raised Additional Tier- I Capital of Rs 500 crore and Tier- II ( Basel III Compliant) Bonds of Rs 1000 crore. The capital adequacy ratio improved to 11.70% ( in 31.03.2015) as compared to 10.97% ( in 31.03.2014) under Basel II norms and 11.43% ( in 31.03.2015) as compared to 10.56% (in 31.03.2014) under Basel III norms as on 31.03.2015 vis--vis the Reserve Bank of India norm of 9%. As on 31.03.2015, the Tier I capital of the Bank is Rs 6423.25 crore under Basel II and Rs 6414.63 crore under Basel III. The Tier II capital stood at Rs 2687.81 crore under Basel II and Rs 2480.53 crore under Basel III. The overall capital stood at Rs 9111.06 crore under Basel II and Rs 8895.16 crore under Basel III.

NATIONAL PRIORITY

Priority Sector Lending

Total Priority Sector advances of the bank stood at Rs 30714 crore as at the end of March 2015. Priority Sector Credit of the bank constituted 35.97 % of the Adjusted Net Bank Credit.

Agricultural Finance

Direct Agricultural advances of the Bank as at March 2015 stood at Rs 7546 crore. Total Agricultural advances stood at Rs 11389 crore which formed 13.34 % of the Adjusted Net Bank Credit.

During the year, Bank has rolled out a special loan "Scheme for financing farmers for construction of farm house" on owned farm/agricultural land and a scheme for financing Farmer Producer Organizations (FPO).

Disbursements to agriculture:

Under Special Agricultural Credit Plan, Bank has disbursed Rs 8442 crore during the year 2014-15, against the Target of Rs 8369 crore.

Kisan credit card scheme:

In terms of the guidelines of RBI/GOI, the revised VKC scheme has provision for both production credit (Short term crop loans) and Investment Credit (Term loans). The validity of the card is 5 years and the beneficiaries are issued with ATM enabled Kisan cards.

Under Vijaya Kisan Card Scheme (VKC), during 2014-15, the bank has issued 73322 Kisan Cards amounting to Rs 978 crore. The Outstanding level of VKCs stood at Rs 2020 crore through 135208 accounts as at 31.03.2015. The Bank’s Kisan Cards are ATM enabled under RuPay platform and out of 97358 operative VKC A/cs, 88362 farmers have been so far issued ATM enabled Kisan cards.

Financing Micro, Small & Medium Enterprises (MSME):

The advances to Micro and Small Enterprises increased to Rs 13366 crore as at March 2015 from Rs 10690 crore as at March 2014, signifying Y-o-Y growth of 25%. The advances to Micro, Small and Medium Enterprises increased to Rs 15165 crore as at March 2015 from Rs 13115 crore as at March 2014, signifying Y-o-Y growth of 15.63%. Online registration of MSME loan applications and tracking system is in place for speedy disposal of proposals under MSME. Further, MSME loan borrowers are also getting acknowledgement through SMS alerts as soon as they apply online.

Further online tracking system of loan applications is also introduced for monitoring and speedy Action.

Advances to Weaker Sections:

As at March 2015, the outstanding under weaker section advances of the Bank stood at Rs 8685 crore, which constitutes 10.17 % of the ANBC against the norm of 10%. The Weaker Section advances grew by Rs 1471 crore, registering a growth rate of 20.39 % over March 2014.

Self Help Groups (SHGs)/Joint Liability Group (JLGs) /Micro Finance Institutions (MFIs):

Bank has accorded top priority to lending to SHGs/ JLGs/MFIs. Bank has disbursed Rs 721 crore to SHGs/ JLGs/MFIS, the outstanding level of advances to this segment stood at Rs 1115 crore as at 31.03.2015. Bank is financing Joint Liability Farming Groups to meet credit requirements of farmers under "Bhoomiheen Kisan" scheme of Government of India and disbursed Rs 28.35 crore to 983 such JLGs.

Bank is participating in the National Rural Livelihoods Mission (NRLM) Scheme by giving special thrust for lending to women SHGs. National Urban Livelihoods Mission (NULM) scheme has been launched by Govt. of India by replacing the existing SJSRY Scheme and Bank has been actively involved in implementing this scheme also.

The Bank received "Best Performance Award for Self Help Group/ Joint Liability group (SHG/JLG) linkage" for the year 2011-12 and 2012-13 which was presented during financial year 2014-15 by NABARD.

Credit to Women beneficiaries:

Advances to Women beneficiaries stood at Rs 6438 crore as at March 2015 as against Rs 5072 crore as at March 2014, registering a growth rate of 26.93 %. Against the stipulated benchmark level of 5% of Adjusted Net Bank Credit (ANBC), the Bank’s achievement stood at 7.54 %.

Lead Bank Scheme:

Our bank is having Lead Bank responsibility in three districts i.e. in Mandya, Dharwad and Haveri districts of Karnataka State. The Lead District Managers of all the three districts have been coordinating with all the bank branches in the concerned Districts to ensure achievement of targets under Annual Credit Plan, Government sponsored schemes, Financial Inclusion, Direct Benefit Transfer Scheme etc. In these three Districts, total credit share of our Bank through Annual Credit Plan is Rs 725 crore against the target of Rs 680 crore as at March 2015.

Lending under Government Sponsored Schemes:

Implementation of Government Sponsored Schemes receives the utmost attention of the Bank. The Bank’s lending under various Government sponsored schemes is furnished below: (Rs in crore)

Sl. No. Schemes No of beneficiaries Loan amount outstanding as at March 2015
1. PMEGP 7991 117
2. NRLM 11736 257

Advances to SC / STs:

Total advances to SC / STs stood at Rs 1367 crore as at March 2015, against Rs 1125 crore as at March 2014, with a growth rate of 21.51%.

Credit to Minority Communities:

Advances to Minority Communities stood at Rs 4225 crore as at March 2015, constituting13.76 % of total Priority Sector advances.

VIBSETIs (Vijaya Bank Self-Employment Training Institutes):

The Bank has established Vijaya Bank Self Employment Training Institutes [VIBSETIs] at Mandya and Haveri in Karnataka state and at Indore in Madhya Pradesh. The Institutes have been conducting various vocational training/skill upgradation / awareness programmes/ Entrepreneur Development Programmes etc. VIBSETIs at Mandya, Haveri & Indore have been graded ‘AA’ for the year 2013-14 by Ministry of Rural Development (MoRD). During the current year 2014-15, VIBSETIs have conducted 88 programmes and trained 2392 beneficiaries. Since inception, totally 1343 programmes have been conducted, training imparted to 45909 beneficiaries with an overall settlement rate of 74.88%. VIBSETI, Mandya in collaboration with All India Radio, Mysore and VRDF has conducted training programme on sheep rearing (Bannur variety) for 60 members. During the Month of September 2014, our VIBSETI, Mandya had conducted a special training programme for 60 Transgenders to take up income generating activities.

Vijaya Rural Development Foundation (VRDF):

With a view to focus the attention of rural masses on the need to modernize agricultural practices, for up gradation of skills and knowledge in various ventures and for achieving all-round socio-economic development, Vijaya Rural Development Foundation (VRDF) was promoted by our Bank in the year 1990 at Mangalore. VRDF is conducting various activities like training /awareness programmes, covering a wide range of subjects, through the Village Development Councils (VDC). At present 33 such VDCs are functioning under VRDF. During the year, VRDF has conducted 143 programmes benefiting 10845 persons. Free health camps have also been organized for the benefit of rural poor. The Foundation has also granted scholarships to poor meritorious students hailing from villages and studying in government schools. The Foundation has expanded its activities to other districts like Haveri, Dharwad and Mandya, where the Bank has Lead Bank Responsibility.

Visit of Parliamentary Committees:

1. Parliamentary Standing Committee on visited on 19.01.2015 and discussed on "Financial Inclusion Schemes and Achievements" and "Banking Sector in India – Challenges & the Way Forward".

2. Parliamentary standing committee on Justice and Empowerment visited on 27.01.2015 and discussed about Priority sector lending to SC/STs, OBCs, Differently-abled persons & Minorities.

Education Loan

The Bank has provided utmost importance to education loan as it views this as an investment in human capital. During the year, the portfolio grew by Rs 143 crore in absolute terms from a level Rs 760 croreof as on 31.03.2014 to reach a level of Rs 903 crore as on 31.03.2015 recording an Y-O-Y growth of 19%.

As it is a national priority, the Bank is aggressively marketing education loan. Bank also launched education loan campaign coinciding with the admission season. MoU was entered into with several reputed educational institutions/ colleges/universities for extending education loans. Bank participated in several expos and conducted camps during admission season to bring out the awareness amongst student community about the availability of education loan facility.

Financial Inclusion

Pradhan Mantri Jan Dhan Yojana (PMJDY) was launched by the Hon’ble Prime Minister on 28.08.2014 with the objective of bringing all unbanked households/ families of the country into banking fold by providing them with Basic bank accounts, Rupay cards with accidental insurance coverage of Rs 1.00 lakh, life insurance coverage of Rs 30,000/- and overdraft facility upto Rs 5000/- based on the satisfactory transactions in the account.

Our Bank is actively participating in PMJDY scheme. Under PMJDY, our Bank has been allotted with 1151

Sub Service Areas comprising 3410 villages and 432 wards on a PAN India basis to provide banking facilities. We have provided Banking Facilities to these villages through 289 branches and 827 Bank Mitras (BCAs). Bank has conducted household survey in all allotted SSAs and Wards and covered all the households with at least one bank account.

Our Bank has opened 12.19 Lakh Basic Savings Bank Deposit accounts under PMJDY with a total balances of Rs 63.63 crore, and all the account holders are provided with Rupay debit cards. Aadhaar numbers have been seeded in 7.27 lakh accounts. Bank has Social sanctioned Overdraft facility in 21 PMJDY account holders amounting to Rs 0.66 Lakhs.

Bank is having Lead Bank responsibility in 3 districts viz Mandya, Dharwad and Haveri in Karnataka State. All the three Lead districts of the Bank have declared the districts as Saturated by covering all the households with Bank accounts within the timeline of Govt. of India.

FINANCIAL LITERACY:

Bank has floated Jnana Jyothi Literacy & Credit Counseling Trust (JJFLCCT), jointly with Syndicate Bank to set up and manage Financial Literacy Centres (FLCs) at District and Taluk level. Our Bank has 3 District level and 11 Taluk level Financial Literacy Centres. All the FLCs are regularly conducting Literacy programmes in villages / schools.

To create Financial Literacy on Pradhan Mantri Jan Dhan Yojana in Rural and Urban areas, Bank has prepared an Audio Film on PMJDY in regional languages for screening at account opening camps and other literacy programmes. Financial Literacy materials in regional languages were also provided to branches to impart financial literacy to PMJDY account holders.

DIRECT BENEFIT TRANSFER:

Bank is actively implementing the modified DBTL programme of the Govt. of India from 1st January 2015, by seeding Aadhaar number of LPG consumers into their accounts.

Our Lead District Managers in Dharwad, Haveri and Mandya are coordinating with the Oil Marketing Companies in their effort to cover maximum number of LPG beneficiaries under Cash Transfer compliance mode.

ELECTRONIC BENEFIT TRANSFER:

Bank is disbursing Social Security Pensions to more than one lakh beneficiaries in Mandya District through Business Correspondents Agents / Hand Held Machines under "one district one Bank Model" amounting to Rs 6.20 crore per month.

INFORMATION & TECHNOLOGY

Core Banking solution and its progress

The Bank achieved 100% CBS which facilitates services like anywhere banking, Internet Banking, online transactions etc. to its customers. With 100% CBS, the Bank has moved closer to offer real time banking facilities to its customers. Passbook Kiosk has been implemented in 184 locations. Cash Deposit Kiosk has been implemented in 238 locations. Aadhaar Enabled Payment System was implemented for smooth implementation of GOIs Direct Cash Transfer Project. To minimize the frauds, bio-metric access for CBS users has been implemented at all locations. The Bank has implemented Integrated Human Resources Management System, Integrated Treasury Management System and Integrated Risk Management System and are integrated with the Core Banking System. ITMS project has met all the objectives with the setting up a DR setup at Mumbai. HRMS has also met most of the objectives with the setting up a DR set up at Mumbai. IRMS is expected to be fully implemented by the end of this financial year.

ATMs

59 ATMs were operationalised during the year 2014-15, taking the number of ATMs to 1383 as at the end of March 2015. Bank’s customers can also access over 1,90,000 ATMs connected under National financial Switch (NFS) across the country.

Internal Control

The Bank has well documented policies like IT & IS Security, Internet Banking Policy, IT Procurement Policy, Internet usage Policy, e-mail policy, Business ContinuityPolicy,DisasterRecoveryPolicy,Outsourcing Policy etc. covering wide range of functions at the field and administrative levels. Adequate controls are also built in to mitigate the risks associated with each of the activities. IT policy and IS policy was revised during 2013-14. Separate policies have been brought out for

Incident management, Vulnerability and penetration test as part of IS Security policy.

Networking

Bank has brought all its branches, extension counters and offices under the corporate WAN and achieved 100 % networking of the branches. It has also used the latest technologies like MPLS, Radio frequency, VSATs, CDMA etc. for establishing connectivity.

RTGS & NEFT Services

Having brought all branches under Core Banking Solution, RTGS and NEFT services are available to the Bank’s customers from all its branches. Since STP has been enabled in RTGS and NEFT, the customers can enjoy the benefit of immediate inter-bank and intra bank fund transfer facility.

The centralized payment systems, viz. Real Time Gross Settlement System (RTGS) and National Electronic Funds transfer (NEFT), currently provide for only direct membership. It has been decided by the RBI to expand the sub-membership route to enable all licensed banks to participate in NEFT and RTGS systems. The sub-member/s would participate in the centralized payment systems through their sponsor bank which is a direct member of the centralised payment system. Bank has entered into an agreement with ShimshaSahakara Bank Niyamitha, Maddur and LokapavaniMahilaSahakari Bank, Mandya for using our RTGS/NEFT services as sub-members.

Missed Call Services (FreeBuzz):

Bank is providing missed call services to the customers & enable them to know the account balance and mini statement. The ease of giving missed calls with zero charges provides a huge advantage to the customers.

V-Fee Hive:

Our in-house software development team has developed a unique application for collection of fees for Educational Institutions, collection of monthly maintenance fee by Apartments and collection of fees by Clubs, etc. It is equipped with unique features like integration of other payment channels like debit card, credit card and internet banking. Prestigious institutions like IIM-Calicut , Army Public School- Delhi, Yenepoya College- Mangalore and Mount Carmel College – Bangalore are presently availing this service.

V-epassbook+:

Our in-house software development team has developed mobile application for accessing account details / to get transaction details. The application is loaded with additional customer friendly features like facility to add notes to each transaction, facility to maintain various personal account heads and to add pass book transactions to these accounts on a single click,facility to add notes to each transaction, etc. A Page with latest offerings and information like interest rate of the bank with links to reach the website of the Bank and facility to refer us to a friend is also available in this application. New version of the software V-ePassbook+2.00 with attractive features like reset of password online, maintain financial calendar, locate our branch/ATMs, display details in Hindi/Kannada languages etc. released during the current year. Already 1,47,694 No of Customers have registered for availing this facility as on 31.03.2015 .

Cheque Truncation system:

As directed by the Reserve Bank of India, the Bank has implemented cheque truncation system in Northern, Southern and Western Grid covering all MICR centres. Subsequent to migration of MICR centres, RBI has directed banks to migrate Non-MICR centres, presently branches from Non-MICR clearing are live on CTS clearing in 30 locations as on 31st March 2015.

Security Operation Center

Our Bank established Security Operation Center with Security Information and Event Management Solution (SIEM) & Correlation tool, which will help the bank in block / mitigate the attacks procedurally.Our Bank has finalized the Common procurement process for 9 Public Sector Banks for implementation of SOC as per the new initiative of GOI under common RFP and the project has been successfully completed.

INTERNAL INSPECTION

The Bank has a well-defined Internal Audit Policy with the Audit Committee of the Board overseeing the audit functions and providing guidance for improvements. During 2014-15, Risk Based Internal Audit (RBIA) of 1314 branches was conducted and 78.84% of the audited branches have secured "Low Risk". In addition, inspection of 12 Service Branches, 27 Currency Chests, 15 RACPCs, 09 MSME Cells, 17 Regional Offices and

07 Head Office Departments was conducted during the year. 82.27 % of Bank’s business is covered under Concurrent Audit against RBI stipulation of a minimum 50%.

Know Your Customer (KYC), Anti Money Laundering (AML) and combating of Financial Terrorism (CFT):

Bank has formulated a Comprehensive policy on ‘Know Your Customer’, ‘Anti Money Laundering’ and ‘Combating of Financing of Terrorism’ which is being implemented by the KYC Cell at H.O. with required technical support for field functionaries. Detailed guidelines have been issued to the field functionaries for the implementation of KYC Norms, AML guidelines and CFT procedures which are uptaded / revised periodically based on instructions from RBI, GOI, IBA and other regulatory authorities. At the apex level it is being ensured that the KYC Norms and other guidelines are implemented in letter and spirit. Large value transactions are monitored to be in line with the declared business/ profession. AMLock software is deployed for generating requisite alerts. Cash Transaction Report (CTR), Suspicious Transaction Report (STR), Counterfeit Currency Report (CCR), Cross Border Wire Transfer (CBWT) and large value transactions of Non-Profit Organisations (NTR) are submitted to FIU-IND as per the prescribed periodicity. A system support to check the customers’ names with the UN list of terrorists is made available to prevent opening of accounts by terrorists and connected entities.

The implementation of KYC Norms and AML guidelines is being checked by the Internal Inspectors, Concurrent Auditors, Vigilance Inspectors and Executives during their branch visits. Bank is proposing to also use decoy customers for KYC/AML checks.

Offsite Monitoring Unit (OMU)

Bank has established an Offsite Monitoring Unit (OMU) to monitor exceptional transactions on an ongoing basis and generate MIS reports on critical items. The reports, classified under High, Medium and Low Risk categories are analysed and requisite action initiated. Nodal Officers have been identified at all ROs for effective follow-up and feedback. Based on the criticality and monitoring needs Bank has identified a set of reports that are to be generated and monitored. OMU also undertakes checking / validation of credit sanctions with regard to adherence to major terms and conditions like interest calculation, collection of processing charges, etc.; Detect Revenue Leakage and Sanitization and data cleaning.

Fraud Monitoring Cell:

Bank has an independent Fraud Monitoring Cell, functioning as per the RBI guidelines on Classification and Reporting. During the financial year, 36 frauds amounting to Rs 329 crore were detected. All frauds are systematically scrutinized and analysed in terms of modus operandi and system lacuna are timely reports are submitted to the regulatory authorities.

Police / CBI cases are filed in respect of all fraud cases. Fraud cases exceeding Rs 1 lakh are placed before the Board and Board instructions / guidelines are implemented. A review of large value frauds is also placed before the Special Committee of the Board at periodical intervals. Latest position / progress in all the fraud cases are reported to RBI on quarterly basis. Attempted frauds are dealt with in terms of RBI guidelines. Periodical guidelines / instructions are issued on fraud prevention measures and system improvements.

Vigilance

The Vigilance Department at Head Office is headed by Chief Vigilance Officer of the rank of General Manager who is on deputation from State Bank of India. The Vigilance Department overseas all vigilance works of the Bank as per the guidelines given by Central Vigilance Commission. In addition, Vigilance Department carries out surprise inspection of branches, and Controlling Offices, concentrating on preventive vigilance. These are done by field Vigilance Officers stationed at Regional Offices. All efforts are made to plug the loopholes in the existing system to prevent recurrence of similar frauds and to strengthen the preventive vigilance.

Compliance

Board approved Compliance Policy is a requirement under the extant RBI guidelines and accordingly, the Bank has adopted Compliance Policy. The Compliance Department, H.O. ensures compliance with various communications received at Head Office from Govt of India, Reserve Bank of India, IBA and others by sending all such communications to the concerned operational Departments for necessary action. The Compliance Department is headed by the Chief Compliance Officer who is of the Rank of a General Manager.

Right to Information Act 2005

Government of India enacted Right to Information Act, 2005 which came into force on October 12, 2005. The Act provides right to every citizen to secure/access to information under the control of Public Authorities. It aims to promote openness, transparency and accountability in administration and in relation to matter connected therewith or incidental thereto. Bank has designated all the Branch Mangers as

Assistant Public Information Officers, Second line Executives of all the 27 Regional Offices as

Public Information Officers and Regional Head as

Appellate Authorities under the Right to Information Act, 2005. At Head Office a Deputy General Manager is designated as Public Information Officer and a General Manager of the Bank as Appellate Authority. Bank as a whole 28 offices are provided with Public Information officer and Appellate Authority respectively under Right to information Act 2005. Information sought under the RTI Act 2005 is being provided within the prescribed time frame. During 2014-15, bank as a whole has received and disposed of 995 Applications and 133 Appeals under the RTI Act 2005. ’’

Security Arrangements

The Bank has a well established security set up within the Bank’s organizational structure with clear cut delegation of authority and responsibility. Security arrangements at all bank branches, currency chests and ATM sites is being reviewed on an on-going basis, since in a dynamic environment, new threats may emerge posing new challenges to various delivery points. Bank security is being strengthened to be more effective, modern and an unobtrusive security system. Essential and mandatory security arrangements in terms of RBI/IBA guidelines are being provided to all branches. Security Alarm Systems and CCTV surveillance system have been provided at all branches for ensuring secure and reliable banking. Branches categorized as vulnerable from security point of view are provided with armed security guards during working hours.

The Regional Security Officers carryout branch inspection visits at regular intervals to assess the security arrangements in vogue and suggest means for strengthening these arrangements. The Regional Security Officers maintain close liaison with the law enforcing agencies. The security arrangements in the Bank have been geared up to meet the prevailing security scenario. Access Control measures at all banks currency chests have been strengthened in terms of RBI guidelines, all cash handling operations are being done under CCTV surveillance. Security Officers / inspecting officials to currency chest review CCTV footage as a mandatory requirement during their visit to the chest. Effective and fool proof system of frisking each & every person entering / leaving the vault room of the chest is being carried out. Biometric access control systems have been installed at all currency chest of the Bank to strengthen access control measures. Training including firing practice for armed security guards deployed at currency chests/branches is imparted on an annual basis. Refresher training workshop for Security Officers is also being organized annually. Security Committees formed at Regional Offices and at Head Office meet periodically to review and assess vulnerability of each delivery point and for taking proactive measures for further strengthening security arrangements at branches/ chests and ATM sites.

HUMAN RESOURCES MANAGEMENT Manpower:

The total staff strength of the Bank stood at 13617 in March 2015 as compared to 12822 in March 2014. Of the total staff, 6271 are Officers, 4304 Clerical Staff, 2349 Sub-staff, and 693 Part-time Employees in the subordinate cadre. The number of women employees as at the end of March 2015 stood at 3426 consisting of 1469 Officers and 1957 Award Staff constituting 13617 of total employees in the Bank. As at the end of March 2015, there were 271 employees belonging to Persons With Disabilities(PWD)Category and 751 employees belonging to Ex-Servicemen Category.

Recruitment:

During the year the Bank has appointed 583 Officers in different Grades/Scales and 277 Probationary Clerks. Bank has also appointed 732 employees in subordinate cadre of Armed Guards, Peons & Part Time Sweepers.

Promotions:

The promotions effected during the year 2014-2015 are furnished hereunder:

SI. No. Promotion from Promotion to Total promoted
1 TEGS-VI TEGS-VII 8
2 SMGS-V TEGS-VI 17
3 SMGS-IV SMGS-V 46
4 MMGS-III SMGS-IV 66
5 MMGS-II MMGS-III 166
6 JMGS-I MMGS-II 139
7 Clerical JMGS-I 173
8 Sub staff Clerk 133

Training:

The training system in the Bank has been strengthened by providing additional competent manpower. The courses have been redesigned keeping in mind the essential inputs required for the employees to effectively handle the present & future assignments and to perform their duties and responsibilities effectively in the highly competitive tech-based customer-driven banking environment. The Bank is also imparting training to its employees through reputed external training institutions in certain specialized areas like Credit, FOREX, Treasury Management, Risk Management, HR, Marketing, etc. During the financial year the Bank has imparted training to 9579 employees constituting 70.34 percent of the total employees. Out of which, 8291 employees had undergone training in the Bank’s own establishments and 1288 were trained at the reputed external training institutions including some overseas institutions.

SC/ST/OBC Employees:

Out of the total manpower of 13617 as at the end of March-2015, 2752 employees belong to SC category, 993 to ST category and 2816 to OBC category.

SC/ST CELL:

SC/ST cell has been functioning at all the 27 Regional Offices and a Senior Officer belonging to SC/ST is designated as Liaison Officer. At Head Office, the Cell is functioning under the control of Chief Liaison Officer. The grievances of SC/ST employees are looked into and prompt remedial action is taken. The Chief Liaison Officer meets the SC/ST Employees Welfare Association and their representatives to hear their grievances at Head office and refers the matters if any, to the concerned department at Head office for redressal. Similarly Regional Heads/Liaison Officers are attending to their grievances at Regional Office Level.

Further Quarterly meeting of SC/ST representatives with the Managing Director & CEO of the Bank are held regularly in terms of Govt. guidelines. In these meetings, the grievances, if any, pertaining to SC/ST employees are discussed with the representatives of the SC/ST welfare Association and sorted out. All the representations received are entered in a Register showing therein the action taken on each representation. The Register is inspected by the Chief liaison Officer periodically.

In the similar manner, OBC Cell is also functioning separately at all the 27 Regional Offices & at Head Office under the control of Chief Liaison Officer appointed separately for OBCs. Bank is arranging pre-promotion training for SCs/STs & OBCs regularly (i.e for sub-staffs, clerks and officers up to scale-III). Bank is complying with all the Policy Guidelines laid down by the Govt. of India pertaining to reservation of posts for SC/ST employees, OBC & Minority employees including Persons with Disability.

Staff Relation:

The pro-active and humanistic approach undertaken by the Bank has yielded positive results and the Bank is showing progressive growth consistently with the collective efforts of the management and employees of the Bank. The climate is positive and the same is echoed in the form of continuous growth of the Bank during the financial year ending March 2015. The industrial relations in the Bank have been cordial and harmonious. There was no agitation or unrest during the year by the employees relating to issues pertaining to our Bank. The consultative committee meetings and negotiating committee meetings were held with the representatives of the recognized unions at regular intervals to sort out the grievances of the employees and settle the disputes, if any, amicably and the said meetings are attended by the top executives of the Bank.

Sports Activities:

Our bank’s various sports teams have performed exceedingly well in the year 2014-15. Our Basketball team emerged winners in the All India Basketball Tournament held in Periyakulam, Tamil Nadu. The team also won the prestigious Association Cup and State Senior Division league held by the Karnataka State Basketball Association. Sri Arvind. A., working at Residency Road Branch, Bangalore was selected to attend the preparation camp of the Indian Basketball team in Gurgaon. Four members of Bank’s Basketball Team viz., Sri Arvind.A., Sri Anil Kumar.B.K., Sri Rajesh Prakash Uppar and Sri Roby Thomas were selected to represent Karnataka in the Senior National Basketball Championships and in the 35th National Games. The bank’s Cricket team finished runners up in the All India YSCA Cricket Tournament and in the All India BPCL Kochi Refineries Cricket Tournament held in Chennai and Kochi respectively. Sri Muhammad Aslam.A.P., Clerk, Shanthinagar branch, was adjudged best Batsman of the tournament held in Kochi. Sri R. Vinay Kumar, member of our bank’s Cricket team, is the current captain of the Karnataka Ranji team which has won the Ranji Trophy tournament for the second consecutive time. Sri C.M.Gautham, Asst. Manager, Shanthinagar branch, who is also the vice-captain of the Karnataka Ranji team has been an integral part of the team. Sri Niyas Nizar, Clerk, N.R.Road branch represented Kerala in the Ranji Trophy for the year 2014-15.

The Kabaddi team of our bank has also excelled during the year. The team won 5 State Level Tournaments held in Koratagere, Gulur, Anekal, Mangalore and Karkala. The bank’s Kabaddi team also emerged runner up in the All India Kabaddi Tournament held at Mudhol, Karnataka and the State Level Kabaddi Tournament in Hebgodi, Karnataka. Sri Selvarajan.R., Service Branch, Sri Prashanth Rai, Indiranagar branch, Sri Sukesh, Hegde, HAL IIIrd Stage branch and Sri Keerthi.H.S., Nagappa Block branch, were some of the star performers for the team. Sri Sukesh Hegde represented India in the Beach Kabaddi Championships held in Phuket, Thailand.

Staff welfare measures:

As per the directions of Ministry of Finance, Department of Economic Affairs Government of India, 3% of net profit with the maximum ceiling of Rs 15 crore is to be earmarked for the welfare of its employees.

The Bank is having various staff welfare schemes such as:

1. Canteen Subsidy.

2. Newspaper reimbursement.

3. Annual Health Checkup.

4. Health Clinic at HO and at MSR Nagar, Bangalore.

5. Annual Medical Aid to the employees retired on superannuation.

6. Grant of Silver Jubilee awards.

7. Cash incentive to meritorious wards of staff.

8. A warding scholarshipRs 5000/-of for the girl children under V-Shakti, V-Subodhini, V- Pragati.

9. Group Mediclaim Insurance.

The Vijaya Bank Staff Welfare Fund Trust

Vijaya Bank Staff Welfare Fund Trust has been formed since 21.09.2002 : Various welfare schemes implemented under the Trust are :

1. A warding scholarships to the wards of employees.

2. Reimbursement of residual claim of hospitalization expenses.

3. Reimbursement of cost of spectacles.

4. F uneral expenses to the family members death of the employees.

5. Cash incentives to retirees on superannuation.

6. Scheme for providing assistance /scholarships to the parent employees of mentally challenged / spastic children.

7. Scheme for providing artificial limbs /hearing aid /crutches to physically challenged staff members/their children.

8. Holiday Homes at Goa, Darjeeling, Shimla, Tirupati, Bangalore, Mysore, Ooty, Delhi & Mumbai. The bank is also administering Family Welfare Scheme under which amounts collected from the members of the scheme are distributed among the family members (nominees) of deceased employees.

Human Resources Management System:

With a view to streamline the process of faster decision making and enable error-free data management pertaining to the employees at a centralized location at Head Office, the Bank has implemented HRMS (Peoplesoft) Software.

The HRMS software combines many human resources functions including Benefits Administration, Payroll, and Training integrated into a single package.

Internal Complaints Committee

The Sexual Harassment of Women at Work Place (Prevention, Prohibition and Redressal) Act, 2013 (hereinafter called as the Act) has come into force and the same is published in the Gazette of India, Extraordinary, Part II, Section I dated 23.04.2013 as Act No. 14 of 2013.

This Act is to provide protection against sexual harassment of women at workplace and for the prevention and redressal of complaints of sexual harassment and for matters connected therewith or incidental thereto. In compliance with Section 4 of the Act, Bank has constituted the Internal Complaints Committee (ICC) theat the Head Office and at all the Regional Offices of the Bank to deal with the complaints received from staff members pertaining to gender discrimination and sexual harassment at workplace.

The ICC constituted at Head Office consists of the on following members:-

1. Smt Nirmala Sridhar, GM - Chairperson
2. Smt Kamalakshi Hegde, CM - Member
3. Sri Krishna Kumar, CM - Member
4. Smt. Banumathi Ramasami, Manager - Member
5. Smt Sandeepa Mullath, Manager - Member
6. Smt. Geeta Menon – NGO - Member

Section 22 of the said Act stipulates the employer to include in its annual report the number of cases filed, if any and the disposal of cases under the Act.

The Central Govt. in exercise of its powers conferred under the Act has also formulated "Sexual Harassment of Women at Work Place (Prevention, Prohibition & Redressal) Rules, 2013". Rule 14 of which provide the employer to include the following information in the preparation of the Annual report:

a) No. of complaints of sexual harassment received in the year.

b) No. of complaints disposed of during the year.

c) No. of cases pending for more than 90 days.

d) No. of workshops or awareness programme against sexual harassment carried out.

e) Nature of action taken by the employer.

Accordingly, the details of complaints received by the Committee for the year April 2014 to March 2015 is furnished below.

Sl. No. No of complaints of sexual harassment received in the year No. of complaints disposed off during the year No. of cases pending for more than 90 days No of workshops or awareness programme against sexual harassment carried out Nature of action taken by the employer or Dist. Officer
1 7 6 Nil 2 Out of 6 cases –
(1 pending >90 days) Special programme for women Branch Managers. 4 cases, are resolved amicably.
Special programme for women employees. 2 cases, are referred to Personnel Dept. [IRD] for taking suitable action in the matter
At Southern India Bank, STC, Bangalore.
Attended by 58 lady officers.

OTHER SERVICES

Merchant Banking & Allied Activities:

The Bank is registered with Securities and Exchange Board of India (SEBI) for Merchant activities like: Category I Merchant Banker, Bankers to the Issue, Debenture Trusteeship and Depository Participant. The bank is also registered as Self Certified Syndicate Banks for accepting IPO/Rights issue applications under Applications Supported by Blocked Amount (ASBA).

The bank undertakes Payment Bankers Assignments for payment of Interest/Dividend/Refund orders of Corporates. Bank also offers Depository Services and online trading to its clients.

Government Business:

Among various Government business, Bank is collecting Direct tax through 276 branches. The bank has introduced online payment of taxes of CBDT&CBEC through V-net banking for all customers of all branches. 888 branches of the bank are designated to open Public Provident Fund accounts. Besides, all our branches are authorised to disburse Central Civil, Defence, Telecom pensions and State pensions in the states of Karnataka, Andhra Pradesh, Kerala and 4 Metro Cities. A separate cell called Centralized Pension Processing Center/CPPC has been set-up in HO for centralized payment of pensions of Central Government pensioners. 1487 branches are designated as NPS-Lite collection center (NL-CC) to accept subscription under NPS- Swavalamban scheme.

Corporate Agency with LIC:

Bank has entered into the Corporate Agency agreement with LIC of India to cater to the life insurance needs of the customers.

Corporate Agency with UIIC:

Bank has entered into the Corporate Agency agreement with United India Insurance Company Limited to cater to the non-life insurance needs of the customers.

Group Insurance Coverage for borrowers:

Bank has entered into an agreement with M/s Bajaj Allianz Ltd for Group coverage of individual borrowers.

Money Transfer Services (Conventional and Online):

Bank is a sub-agent for money transfer services of Money Gram and Xpress Money. Under Money gram the bank has tie-up with both UAE exchange & financial services and Thomas cook (India) Ltd. Bank has entered into a tie-up with Times of Money Ltd for online transfer of funds (Remit2lndia) as an additional service to NRIs. The Bank has a tie up arrangement with Wall Street Finance Ltd of Spice Group company for Western Union money Transfer Services.

Credit Card Business

At the end of the financial year, the total active cards issued by the bank stood at 159149. The Credit Card turn over is Rs 514.57 Crore as against the turnover of Rs 458.18 crore as on 31.03.2014. To provide more security for our cardholders, the bank has introduced chip cards under Classic variety during the year. We have also facilitated our cardholders to view their card transactions at any time through V-Net banking. The total number of merchants enrolled by the bank during the financial year 2014-2015 stood at 917 as against 1293 merchants as on 31.03.2014. The Department has delisted merchants who has not given business for more than 12 months. The bank is also providing cordless card swiping machines and the terminals are EMV/UKPT/TLE compliant and PIN @ POS enabled. The bank makes direct payments to merchants maintaining account at our Core Banking branches.

Debit Card

There has been considerable increase in the issue of Debit Cards. We have totally issued 1539854 Debit/ATM cards during 2014-2015 as compared to 518809 cards issued during the financial year as on March 31, 2014. The Debit Card turnover is Rs 577.42 crore during 2014-2015 as against Rs 464.96 Crore as on March 31, 2014. The bank is opening Jan Dhan accounts and has launched Platinum Cards in association with Rupay & VISA in the month of March 2015.

Depository participant account and Online trading:

Vijaya Bank, a Depository Participant (DP) with National Securities Depository Limited.

Vijaya Bank DP offers the following depository services.

Account Opening.

Dematerialization of securities (shares,

Debentures, Mutual funds etc.,)

Electronic settlement of trades in stock exchanges connected to NSDL and CDSL.

Pledge/hypothecation of demat security holdings against bank loan.

Electronic credit of securities allotted in public issues.

Freezing of accounts whenever required so that debits from the account are not permitted.

Nomination facility for demat accounts.

Services related to change of address, bank account details etc.,

Effecting transmission of securities.

NSDL IDeAS facility.

The bank provides Depository Services to customers and Tied up with IDBI Capital for providing Online Trading.

Government Business Module (GBM)

Government Business module is implemented with the following modules.

OLTAS Module which deals with Direct and Indirect Taxes and remittance of tax amount to RBI through link cell, Nagpur.

Public Provident Fund - PPF is being accepted at the designated branches of the Bank.

Centralized Payment of Pension - A dedicated Centralized Pension payment processing cell has been created at HO. All types of pension like State, Central, Civil, Telecom, Defence, Judges and Freedom Fighters pension is being paid centrally by the CPPC cell at HO. Senior Citizens Savings Scheme as per the government guidelines is also implemented in the Bank.

Marketing Setup

Marketing cell at the Bank’s Head Office with active involvement of all Marketing officers posted across the country in various Regional Offices / RACPCs & MSME cell is actively engaged in popularizing and marketing of Bank’s various products.

Publicity and Public Relations

During the F Y 2014-15, the bank has carried out several major advertisement campaigns in print & Electronic media in English, Hindi and in regional languages throughout the country to elevate the visibility of the bank and its products. This year major Publicity Campaigns were carried out through Outdoor Advertisement media such as translites at airports and Delhi Metro Railway station, Kolkata Metro Stations. Outdoor Advertisement hoardings were taken in metro cities, glow sign/sign board advertisements at Railway stations/Bus stands.

Implementation of Official Language

Bank is implementing the Government’s Official Language Policy in letter and spirit since Nationalization. With the efforts of staff members Bank could achieve Hindi correspondence of 90.07 % in Region "A" against the target of 100%, 80.64 % in Region "B" against the target of 90% and 61.49 % in Region "C" against the target of 55% as on 31.03.2015. Under the banner of "V-Gen Uth" all 27 Regional Offices & Head Office has conducted V-GenUth Hindi singing Competition/Hindi Drawing Competition/ Hindi Elocution Competition, Hindi Quiz Competition, etc. for High School students. Every Regional Office has conducted Hindi Symposium (Aapasi samvaad Programme) in which teachers & students of various Colleges/Universities, customers and staff members have participated.

92 Hindi workshops were conducted for Executives / officers and clerical staff employees members in which 1610 staff members were trained. Importance of use of Unicode was stressed in these workshops. The Drafting & Evidence Sub-Committee of Parliamentary Committee on Official Language had a discussion programme with Town Official Language Implementation Committee, Nagpur and member banks on 08.01.2015 in which our Regional Office, Nagpur participated as a member bank.

The Third Sub-Committee of Parliamentary Committee on Official Language visited our Udhagamandalam Branch on 07.02.2015. Hindi Day was celebrated by Head Office on 16.09.2014 and Rajbhasha Sahayika was released on the occasion to enable all staff members of the Bank to implement Official Language in the Bank.

E-Passbook/Tele Banking in Hindi/taking ATM slips in Hindi in Diebold Machines facility is available in the Bank. The exclusive intra-net Rajbhasha website has been made more user friendly for the staff members by providing letter heads of all branches/offices, office notes letters etc. The Hindi version of the trilingual website of the bank is updated from time-to-time. ‘V-Gyan Kendra’ is also made bilingual.

The Head Office along with various Regional Offices Bank have received prizes for Official Language Implementation for the year 2013-2014 awarded by the respective Town Official Language Implementation Committees, Staff College, Bangalore I prize, Regional Office, Hassan - I Prize; Mayo Hall Branch - Fourth Prize; Karnal Branch - Consolation Prize; Regional Office, Pune awarded for best performance in the field of O.L. Implementation.

Our Bank conducted inter-bank competitions under the aegis of various Town Official Language Implementation Committees all over India and a number of staff members have also won prizes.

Under the Bank’s Internal Rajbhasha Shield Scheme for the year 2013-14 Personnel Department I Prize, Planning and Development Department was awarded II Prize and Central Accounts Department was awarded III Prize under HO Department Category for effective implementation of Official Language. Under Best Region Category Chandigarh was awarded I Prize, Lucknow Region II Prize and Bangalore (South) III Prize.

ALTERNATE DELIVERY CHANNELS:

A number of activities were undertaken to ensure that technology driven Alternate Delivery Channels are utilized to the mutual advantage of the customers and the Bank. Mailers were sent to customers highlighting the advantages of using Alternate Delivery Channels like internet banking, use of Debit Card, on-line purchases, and funds transfer through RTGS/NEFT etc. Training programmes are conducted by Staff College to familiarize/ sensitize the staff members with these products so that the facilities percolate to the customer in a professional manner.

TeleBanking Facility

TeleBanking facility was started during 2012-13 and available 24/7.Tele Banking facility is available in three languages ENGLISH, KANNADA AND HINDI. TeleBanking provides the following facilities for the benefit of customers:

Account details: This includes balance enquiry, last five transaction details, statement of accounts by e-mail, credit/debit card details.

Request for cheque book, stop payment, cheque status enquiry.

Financial Transactions: This includes transfer of funds to self -account.

Loan Account Details and Deposit Account

Details.

Internet Banking Assistance and Mobile Banking

Assistance.

Adhaar number linking to account.

Internet Banking:

V-Net Banking, an Internet Banking channel of the Bank is providing services like balance enquiry, account statement, intra-bank and inter-bank fund transfers through RTGS/NEFT, transactions related SMS alerts, payment of Indirect / Direct taxes, State commercial Taxes, utility bill payments, online temple donations & online donations to Prime Ministers Relief Fund (PMRF) and others. The add-on features of V-net banking are:

Password can be reset online.

Creation of User-id and Password credentials online.

Customers can view their PPF account and transfer funds to PPF Account from their linked operative accounts using V-Net Banking facility.

Customer can View their Vijaya Bank Credit Card statement.

Customer can pay Import & Export custom duties.

Mobile Banking:

V-Mobile Banking, the channel of the Bank for performing banking activities like balance enquiry, account statement, mobile recharge, intra and interbank funds transfer using NEFT, Airline ticket booking, Movie Ticket booking etc., with their mobile handset using SMS/ GPRS modes of communication. "Immediate Payment Service" – IMPS (P2P-Person to Person), an initiative from NPCI (National Payment Corporation of India) has been implemented for the benefit of the customers using Mobile banking services to perform the transactions 24x7 within and across the banks using MMID (Mobile Money Identifier). IMPS (P2A

– Person to Account) is implemented in our existing Mobile Banking services, wherein the customers can do funds transfer using beneficiary’s A/c No. and IFSC code, without the use of MMID. Now we have launched new version of Mobile Banking with enhanced look and feel, and additional features like facility for customers to receive notifications from the Bank, add remarks to fund transfer transactions, to generate application password by themselves, and a host of other customer friendly options.

SMS alerts/e-mail

The bank also offers SMS alert service. Messages are sent for all transactions of Rs 100 and above and when cheques are returned with, irrespective of the amount. Monthly statement of account through e-mail to account holders who have registered the e-mail ID has been implemented.

SMS alert facility is also used for

Adding beneficiaries in V-Net Banking through

SMS - OTP(One Time Password).

Online Resetting of Password in V-Net Banking

SMS - OTP (One Time Password).

Self User Creations for Retail Customers using

SMS - OTP (One Time Password) along with other security features.

V-GyanSagar :

V-Gyansagar is an unique initiative by Vijaya Bank to impart financial information to the public as part of financial literacy. V-Gyansagar is an Android mobile application which provides the subscriber a facility for getting daily updates on Financial, Economic and Banking news and also explanation of Financial and Banking terms.

V- Abacus :

A facility to open account by giving a missed call and opening of account through Tab Banking was implemented.

This will be useful for the customers who could not come to branch and open an account.

V-QuickPay:

V-QuickPay is a unique initiative of our bank and is the next generation bill payment service where the Bill payment is made by scanning of QR code. Customer has to scan the QR code on the Bill generated by the merchant who has availed this facility from us, and proceed with the payment of the bill without having to swipe the Credit/Debit card on the POS machines. It facilitates Payment by way of Credit and Debit Cards and also net banking of any Bank. This product introduces a new bill payment channel, hitherto not provided by any Bank in the Indian Banking Industry.

USSD–NUUP:

Mobile Banking services were introduced by the bank in the year 2009. However availing even some of the basic banking services provided through Mobile Banking was beyond the reach of the people who did not possess a high end handset. Now NPCI’s Unstructured Supplementary Services Data –USSD (NUUP) offered by Telcos has been exploited by the bank to give mobile banking services even on a basic mobile phone, making mobile banking accessible to all customers.

V-Online SB a/c:

An option to open online SB account was introduced through our website ‘WWW.VIJAYABANK.COM’ Customer has to choose account opening at his/ her place of choice and at his/her convenience. Branch receives an automated mail with regard to the customer’s request; branch will call the customer and informs the required documents and procedures. Customer will visit the branch on his / her chosen date and submits the necessary documents and opens the account.

Customer Service and Redressal of Complaints

Our Bank has robust Customer Grievance

Redressal Mechanism. Complaints received are attended immediately and vigorous efforts are made for a time bound resolution of all complaints.

The Customer Service Committee of the Board and Standing Committee on Customer Service meets at Head Office periodically to discuss about the customer complaints and suggestions to improve customer service in the Bank.

Standard Public Grievances Redressal System (SPGRS) has already been implemented in our

Bank, which is an online portal for customers to lodge their complaints and track the same for its further developments. The complaints received from the multiple channels are being Registered and digitalized in order to have an integrated information system for customer grievances. All grievances are classified under various heads and sub-heads and automatically pushed to the concerned departments for easy and timely redressal.

Incognito Visits are continued for the current year to evaluate branches in a discreet manner about the-

1. Ambience of the branches.

2. Product knowledge of the staff.

3. Customer Service.

4. Availability of mandatory disclosures as per the guidelines from the regulatory bodies like RBI / BCSBI.

The findings of the study were used to analyse the focus areas and to improve the customer service.

Call Centres:- The bank is having a professionally managed call center to take care of all types of customers query. The bank has 24x7 exclusive Help Desk for Credit and Debit card holders to provide swift service on their emergency matters like blocking / hotlisting of cards, tracking of anonymous transactions etc. Bank takes care to see that customers’ queries / issues are resolved within minimum turnaround time. For this bank has set up exclusive call centre for Net Banking / Alternative Delivery Channel (10.am to 6.pm), Card Service (24X7) and General banking (8.am to 8.pm).

Banking Codes and Standards Board of India (BCSBI)

The Bank, being a member of BCSBI, has adopted the voluntary Codes formulated by BCSBI i.e. (i) ‘Code of Bank’s Commitment to Customers’ (ii) ‘Code of Bank’s Commitment to Micro and Small Enterprises.’ Bank has formulated and complied with several policies as per the guidelines of BCSBI. A session on Customer Service incorporating the provisions of the Codes has been included in the staff general banking training programmes in order to comply with the Codes in true letter and spirit. BCSBI revised ‘Code of Bank’s Commitment to Customers’ in January 2014 and the

Bank has taken several steps to abide with most of the revised guidelines.

CORPORATE SOCIAL RESPONSIBILITY

Our Bank has been actively involved in the CSR activities. However, we have adopted formal CSR activities as per Governmentt Gazette Notification dated 01.02.2014. Major initiatives during the Financial Year 2014-15 are:

Providing support to the adopted villages by providing health facilities to people in rural areas by running Rural Health Centre in all these Villages by attaching the services of a Doctor and medicines to be provided free of cost;

We have adopted 16 girl children under Girl Child Adoption Scheme sanctioning a sum of Rs 11,55,000/-, the said expenditure to be utilized from the year of adoption till the completion of their graduation;

We have provided donations to community oriented programmes like providing bus shelter, overhead tanks, ambulances to Trusts & Hospitals;

Financial assistance to Mr. Aravind Bhatt, to attend Olympic games;

Providing support to Government Schools for improvement of basic amenities like water tanks, water purifier, benches, solar lights, fans, library room etc.;

Donation to different Trust/Foundations for the welfare of downtrodden, especially for SC/ST/ OBC category, and to orphanages and old age homes and support to senior citizens as a measure of reducing inequalities faced by socially and economically backward groups;

Financial assistance to visually challenged school by way of providing kitchen items, freezer, desks and chairs, and providing hearing aids to hearing impaired and other assistances to differently abled persons;

Contribution to Hudhud victims;

Through donation to NGOs for part funding their community development oriented projects like Ashraya, which supports boarding, lodging and educating destitute girl child, Can Care Foundation, which provides relief both to the patients and their family members financially and morally, Laxminarasimha Charitable Trust, which supports pension to senior citizens, handicapped residents, etc;

Bank is also providing training to unemployed youth, and creating self-employment opportunities;

As C activity towards 84th Foundation day we SR have donated an ambulance to Sri Taralabalu Education Society, Sirigere, Shimoga;

In furtherance to the directives of Hon. Prime

Minister’s announcement on implementation of Swachchh Vidyalay we have taken up the activity of providing sanitation facilities to 84 Govt Schools, which are not provided with sanitation facility, in commemoration of 84th Foundation day, and in furtherance to these we have already completed construction of toilets at few places and the rest are in progress;

To commemorate I8nternational Women’s Day, 2 homes working for the cause of women destitute was provided with mattresses, bedsheets, mugs, buckets, pillows;

Support towards education of children by providing infrastructure, etc. aimed at positive development of the Nation.

Awards & Achievements

In recognition of varied initiative, the bank was conferred several awards and accolades during the year 2014-15.

‘Best Asset Quality Management’ in India Top Banks and Banking Award 2014 Ceremony hosted by Dun & Bradstreet - Polaris Financial Technology.

"Best performance Award for Self Help Group/ Joint Liability group (SHG/JLG) linkage From NABARD.

"Excellence Award for PMJDY performance" by Micro Small and Medium Enterprises, GoI, in a function organized by Federation of Industry Trade and Services.

BOARD MEETING AND MEETING OF OTHER SUB COMMITTEES OF THE BOARD

During the year 2014-15, the Board of Directors met 20 times. The details of Committee Meetings are as under:-

Name of the committee No. of Meetings
Management Committee of the Board 16
Audit Committee of the Board 12
Directors’ Promotion Committee 03
Risk Management Committee of the 05
Board
Committee to review Large Value Frauds 05
Remuneration Committee of the Board, 01
Nomination Committee of the Board, 02
Customer Service Committee of the 04
Board,
Stakeholders’ Relationship Committee 04
Share Transfer 07
Head Office Level Credit Approval 32
Committee
Special Committee to consider appeals 01
preferred by employees against
final orders passed by Chairman &
Managing Director as Disciplinary
Authority.
I.T Strategy Committee 03
Supporting candidates in the Election Nil
Credit Monitoring recovery management 05
of NPA
APAR Review Committee 01
Corporate Social Responsibility (CSR) 01
Review Committee in respect of -
Borrowers identified as Willful Defaulters
HR Committee -

(b) Changes in the Board of Directors

During the year 2014-15, the following changes have taken place.

1. Shri Kishore Sansi has assumed Managing Director & CEO of our Bank on 01.01.2015 consequent upon demission of office by earlier Chairman & Managing Director Shri

V. Kannan on his attaining superannuation on 31.12.2014.

2. Shri Sanjay Kumar, Govt. Nominee Director joined the Board of our Bank on 12.09.2014 consequent upon retirement of Shri V. K. Chopra, Govt. Nominee Director on attaining superannuation on 31.07.2014.

3. Shri Prakash Chandra Nalwaya, Non Official Director ceased to be the Director on completion of his three year term on 19.05.2014.

4. Shri Ashok Gupta Non Official Director ceased to be the Director on completion of his three year term on 10.11.2014.

5. Shri H. Harish Ballal, Officer-employee Director ceased to be the Director on completion of his three year term on 24.01.2015.

The Bank’s Board as on date consists of the following Directors:-

1. Shri Kishore Sansi, Managing Director & CEO

2. Shri K. R. Shenoy, Executive Director

3. Shri B. S. Rama Rao, Executive Director

4. Shri Sanjay Kumar, Govt. Nominee Director

5. Smt. Suma Varma, RBI Nominee Director

6. Shri P. Vaidyanathan, Shareholder Director

7. Smt. Bharati Rao, Shareholder Director

8. Shri Y. Muralikrishna, Workmen Director

Acknowledgment

The Board wishes to place on record its sincere appreciation to the customers for their patronage, to the shareholders for their support, to the Government authorities and the Reserve Bank of India for their valuable guidance and support, to the Directors, who completed their tenure during the financial year under review and to all the staff members for their full support in the pursuit of organisational growth and excellence.

For and on behalf of the Board of Directors

Head Office: Bengaluru Kishore Sansi
Dated the 12.05.2015 Managing Director & CEO