Directors Report of Bank of Maharashtra

Mar 31, 2023

The Directors have pleasure in presenting the Annual Report of the Bank with the audited Balance Sheet, Profit & Loss Account and the Report on Business and Operations for the year ended March 31, 2023.

1.    MANAGEMENT DISCUSSION AND ANALYSISEconomic and Banking Scenario 2022-23

Indian economy continues to show resilience amid global uncertainties. The uncertainty caused by the evolving global scenario is weighing heavily on the outlook for economies across the globe. Amidst this, the Indian economy remains a bright spot and has positioned itself to grow at 7% in 2022-23, making it the fastest growing major economy in the world.

The banking sector in India has responded in equal measure to the demand for credit. The aggressive supply of credit by the banking sector has been triggered by their improved financial health as that of the corporates, well supported by the government through adequate budgetary support. Macro-stress tests conducted by RBI for credit risk reveal that the banks are well-capitalized and would be able to comply with the minimum capital requirements even under adverse stress scenarios.

Private consumption, more capital expenditures, a stronger corporate balance sheet, increased financing to small enterprises, and the return of migrant workers to cities all contributed to growth.

Outlook

The recovery from the pandemic was relatively quick, and growth in the upcoming year will be supported by solid domestic demand and a pickup in capital investment. Strong macro-economic fundamentals, combined with reform-oriented approach of the Government are building India's economic growth trajectory.

Credit growth has been broad-based across sectors, with retail credit driving the growth. Credit to agriculture and allied activities gained momentum through concessional institutional credit and higher agricultural credit target set by the government. Industrial credit growth has been buoyed by a pick-up in credit to MSMEs, assisted by the benefits accrued from the effective implementation of the Emergency Credit Line Guarantee Scheme (ECLGS) and the support provided by the government's production-linked incentive scheme.

The growth in credit offtake is expected to sustain, and combined with a pick-up in private Capex, will usher in a virtuous investment cycle. The credit upcycle will also be aided by constant monitoring of the risks in the financial system by the regulators and their efforts to contain them. Strong macroeconomic fundamentals will underpin the return of global capital flows to India once the fog of uncertainty lifts.

2.    PERFORMANCE HIGHLIGHTS 2022-23

i.    Total Business of the bank has increased from Rs.3,37,534 Crore as on 31.03.2022 to Rs.4,09,202 Crore as on

31.03.2023.    Business of the Bank showcased annual growth of 21.23%.

ii.    Total deposits of the bank increased from Rs. 2,02,294 crore as on 31.03.2022 to Rs. 2,34,083 crore as on

31.03.2023.    Total deposits have showcased annual growth of 15.71%.

iii.    CASA deposits have increased from Rs. 1,17,035 crore as on 31.03.2023 to Rs.1,24,961 crore as on 31.03.2022 showcasing annual growth of 6.77%.

iv.    Gross advances have increased from Rs.1,35,240 crore as on 31.03.2022 to Rs.1,75,120 crore as on 31.03.2023. Gross Advances have shown year on year growth of 29.49%.

v. Operating Profit increased 25.81% to Rs.6099.21 crore in year ended 31.03.2023 from Rs. 4847.87 crore in year ended 31.03.2022. During the same period Net Profit increased 125.96% to Rs.2602.03 crore from Rs. 1151.54 crore.

2.1 Sectoral Deployment of Credit

(Amt. in Rs. crore)
Percentage to Total Outstanding	O/s as on 31.03.2023	Percentage to totalO/s	O/s as on 31.03.2022	Percentage to total O/s
Industry	59,295.32	33.86%	44,045.15	32.57%
Of which	Â	Â	Â	Â
i. Infrastructure	34,127.30	19.49%	21,643.82	16.01%
ii. Chemicals & Chemical Products	1,376.06	0.79%	1,357.02	1.00%
iii. Petroleum (Including Natural Gas)	1,973.91	1.13%	600.74	0.44%
iv. Iron and Steel	1,304.40	0.74%	566.80	0.42%
v. NBFCs	16,909.57	9.66%	11,132.79	8.24%
vi. Engineering	1,935.22	1.11%	1,235.38	0.91%
vii. Construction	650.90	0.37%	128.57	0.10%
viii. Other Industries	1,017.96	0.58%	7,380.03	5.46%
Agriculture	23,399.66	13.36%	18,968.15	14.02%
MSME	33,243.62	18.98%	26,279.08	19.43%
Housing	25181.06	14.38%	21103.06	15.60%
Education	1828.64	1.04%	1458.85	1.08%
Exports	1,715.19	0.98%	1,385.01	1.02%
Commercial Real estate	2,247.53	1.28%	1,253.84	0.93%
Gross Advances	1,75,120.00	Â	1,35,240.00	Â

2.2 Asset Quality and NPA Management

•    The Bank has set up “Asset Recovery Cells (ARC)” at all zonal offices to ensure focused efforts for upgradation and NPA recovery.

•    Thirteen Asset Recovery Branches (ARBs) have also been set up across the Bank's Zones for large NPA accounts, more particularly where legal actions are in progress so as to make focused follow up.

•    Further, Bank has established Stressed Assets Management Vertical by way of a separate department at Head Office under which Bank has started 4 (four) Stressed Assets Management (SAM) branches in Delhi, Mumbai, Hyderabad and Pune, where NPAs with balance of Rs.5 crore and above are monitored. Focused follow up is undertaken to improve NPA recovery.

•    The Loan Tracking Cell has been established where Bank undertakes telephonic follow up on daily basis with borrowers of stressed accounts / slippages and repayment of overdues is insisted. This will result in improving recovery and upgradation of NPAs.

•    The Bank has also set up separate Cells at its Head Office for identification of Wilful Defaulters, gearing up the actions under DRT / SARFAESI Acts.

•    Bank has been implementing Suo Motu nondiscriminatory and non-discretionary One Time Settlement (OTS) Schemes. Monitoring of the performance under the schemes is undertaken from Recovery Department, Head Office on daily basis. During FY 2022-23 the Bank introduced following such OTS schemes:

1.    Maha Sahyog 2022-23 - Scheme for the settlement of NPA accounts in Sub Standard (for Agri Loans only), Doubtful-I, Doubtful-II, Doubtful-III, Loss, TWO and RWO accounts having Ledger Balance up to Rs.1.00 crore as of 31.03.2022. This scheme is effective from 01.06.2022.

2.    Maha Sandhi 2022-23 - Scheme for the settlement of NPA accounts in Doubtful-I, Doubtful-II, Doubtful-III, Loss, TWO and RWO accounts having Ledger Balance above Rs.1.00 crore and up to 50.00 crore as of 31.03.2022 and effective from 01.06.2022.

3.    Maha Samvedna 2022-23 - Scheme for the settlement of NPA accounts in Sub Standard, Doubtful-I, Doubtful-II, Doubtful-III, Loss and TWO accounts having Customer Ledger Balance upto Rs. 50.00 Lakhs where Individual Borrower/ Co-Borrower/ Proprietor is deceased. This scheme is effective from 01.06.2022.

Bank has also made intensive follow up with the defaulting borrowers through visits, letters, notices, Recovery Camps, Lok Adalats, Mahabank Adalats, actions under SARFAESI/ DRT Act. Services of Recovery Agents / Resolution Agents are engaged so as to have an early resolution. The Bank has also initiated action under the provisions of the Insolvency & Bankruptcy Code 2016 against various large NPA borrowers.

Position of Non- Performing Assets was as under: (In Rs.Crore)
Particulars	31.03.2023	31.03.2022
Gross NPA	4334.00	5327.21
% to advances	2.47%	3.94%
Net NPA	435.18	1276.57
% to advances	0.25%	0.97%
Cash Recovery	2145.01	2134.73

2.3 Foreign Exchange Business

Currently, the bank has 50 “B” Category Branches across the country catering to the international business needs of the customers of the Bank apart from Treasury and International Banking Treasury and International Banking Division (TIBD) at Mumbai as “A” category Branch. The Merchant Business for FY 2022-23 stood at Rs. 43,075.85 crore. The performance during FY 2022-23 can be seen below:

(In Rs. Crore)
Particulars	2022-23	2021-22	Percentage of (+/-)
Total FEX Business Turnover	6,37,690.36	5,55,982.93	14.70%
Merchant Business Turnover	43,075.85	34,251.01	25.77%
Profit in FEX Business	79.42	129.48	(38.66%)

2.4 Investment

The breakup of Investments into SLR & Non-SLR

investments is given below:

•    The Gross Investments as on 31.03.2023 stood at Rs 69,215.26 crore, of which Rs 55,866.92 crore are SLR securities and Rs. 13,348.35 crore are Non-SLR Securities. The excess SLR securities as on

31.03.2023 stood at Rs 16,837.79 crore.

•    The net investments (net of provisions) stood at Rs 68,866.95 crore as on 31.03.2023 as compared to Rs 68,589.97 crore as on 31.03.2022. Investments under Held to Maturity (HTM) category consist of 74.90%, while Available for Sale (AFS) & HFT comprised of 25.10% of total investment portfolio as of 31.03.2023. The net interest income from investment activity decreased to Rs 4,266.92 crore from Rs 4,387.93 crore during the last year (down by 2.76%).

•    The Non-Performing Investments stood at Rs 28.82 crore as on 31.03.2023.

2.5    Merchant Banking

The Bank handled 23 issues (previous year 30 issues) of Commercial paper amounting to Rs 29,920 crore (previous year Rs 30,950 crore) for its clients as an Issuing and Paying Agent (IPA) during FY 2022-23

2.6    Borrowings

The borrowing of the Bank as on March 31,2023 stood at Rs. 10,765.66 crore including re-finance as under:

(Rs in Crore)
Particular	Amount as on 31.03.2023	Amount as on 31.03.2022
Total Borrowing	10,765.66	7,746.74
of which Borrowing RBI under LAF	500.00	500.00
of which Borrowing Market REPO	0.00	0.00
Of which Borrowing TRePS (G-Sec)	3,997.76	3,194.64
Of which Refinance from	Â	Â
NABARD	0.00	0.00
EXIM BANK	0.00	0.00
NHB	0.00	0.00
MUDRA	242.94	139.00
SIDBI	1,155.24	17.35
Borrowings in the form of Bonds & debentures capital instruments	4,833.70	3,895.70
Borrowings outside India	36.02	0.00
Others	0.00	0.05

2.7    Depository Services

•    Bank is Depository Participant (DP) of Central Depository Services of India Ltd. (CDSL) since September 1999.

•    The Bank is also providing Basic Services DEMAT Account Facility (BSDA).

•    Bank is providing ASBA through net-banking and UPI.

2.8    Bancassurance

•    Bank is corporate agent for carrying out Bancassurance business under all three segments i.e. Life Insurance, General Insurance and Health Insurance.

•    Performance during FY 2022-23

(Amt. in Rs. Cr.)
Insurance		No. of Policies	Premium			Commission
Life		12,284	83.06			18.45
General		1,51,459	55.63			7.39
Health		50,467	68.50			9.85
Total		2,14,210	207.19			35.69
• Company wise insurance business from 01.04.2022 to 31.03.2023: (Rs. In Crore)
Â	Insurer			NOP	Premium		Commission
Life Insurance	Life Insurance Corporation			1,107	10.62		1.46
	Aviva Life Insurance			10,622	70.35		16.99
	Aviva Life Insurance - Group Credit			555	2.09
General Insurance	United India Insurance Company			19,784	9.97		1.81
	Future Generali			1,31,675	45.66		5.58
Health Insurance	United India Insurance Company			14,427	24.80		3.86
	Manipal Cigna Health Insurance			36,040	43.70		5.99

2.9    Government Business

•    During FY 2022-23, 5,00,644 challans of Direct Taxes and 27,030 challans of Indirect taxes were collected by the branches. Total commission to the tune of Rs 0.58 crore was received on tax collection business in current year.

•    As a service to senior citizens, the Bank is processing and crediting monthly pension payments to Central Government, Defence, Railway and Telecom pensioners at Central Pension Processing Cell (CPPC), Pune. The commission on Government Business (Pension) for the Year 2022-23 is Rs. 10.03 crore.

•    Bank has opened 2,08,286 new PPF accounts, 16,690 new SCSS accounts and 19,370 new accounts under Sukanya Samruddhi Scheme in FY 2022-23. Commission earned by the bank for the year 2022-23 is Rs. 4.49 crore.

2.10    Income, Expenditure and Profitability

The total income of the Bank stood at Rs. 18178.73 crore in FY 2022-23 as compared to Rs. 15,671.70 crore in FY 2021-22. The detailed income/expenditure components are as under:

(Rs. in Crore)
Particulars	2022-23	2021-22	Variation (in %)
Interest / discount on advances / bills	11,485.82	8,231.56	39.53
Income on investments	4,266.92	4,384.69	(2.69)
Interest on interbank lending & other Interest	145.72	402.97	(63.84)
Total interest income	15,898.46	13,019.22	22.12
Non-interest income	2,280.27	2,652.48	(14.03)
Total Income	18,178.73	15,671.70	16.00
Interest on deposits	7,186.44	6,458.17	11.28

Â	Particulars	2022-23	2021-22	Variation (in %)
	Interest on borrowings	59.77	30.91	93.37
	Other Interest expenditure	911.47	485.74	87.65
	Staff expenses	2,058.23	2,070.59	(0.59)
	Other Operating expenses	1,863.56	1,778.42	4.79
	Total Non-interest expenses	3,921.84	3,849.01	1.89
	Total Expenses	12,079.52	10,823.83	11.60
	Operating Profit	6,099.21	4,847.87	25.81
	Provisions and Contingencies	3497.17	3,696.33	(5.39)
	Net Profit	2602.03	1,151.54	125.96
2.11	Financial Ratios The various financial parameters of the Bank during FY 2022-23 can be seen below:
Â	Particulars		2022-23	2021-22
	EPS (Rs)		3.87	1.72
	Cost to Income Ratio (percent)		39.14	44.26
	Return on assets (percent)		1.10	0.55
	Return on equity (percent)		20.38	11.45
	Book value per share (Rs)		18.97	15.12
	Profit per Branch (Rs.in lakh)		118.11	56.95
	Profit per employee (Rs.in lakh)		20.05	9.05
	Business per Branch (Rs.in crore)		185.29	166.65
	Business per employee (Rs.in crore)		31.53	26.53
	Interest income as per cent to Average working funds		6.70	6.26
	Non-Interest income as per cent to average working funds		0.96	1.27
	Net Interest Margin (percent)		3.56	3.15
	Operating Profit as per cent to average working Funds		2.57	2.33
	Staff expenses as a percent to average working funds		0.87	1.00
	Dividend (percent)		13.00	5.00
	Net worth (Rs. in crore)		12,765.19	10,175.85
	CRAR (%)		18.14	16.48
	Of which, Tier I CRAR (%)		14.25	12.38

2.12    Capital

•    Bank has raised Rs.1590 Crore in two tranches, Tier 1 Bond amounting to Rs. 710 Crore in the month of September 2022 & Tier 1 Bond amounting to Rs. 880 Crore in the month of December 2022.

•    Bank has raised Rs. 348 Crore, Tier 2 Bond in the month of December 2022.

2.13    Net worth

The Bank's Net Worth stood at Rs. 12,765.19 crore as on

31.03.2023 as against Rs. 10,175.85 crore as on 31.03.2022.

2.14    Capital Adequacy Ratio

The Capital Adequacy ratio stood at 18.14% as on 31.03.2023, against the minimum requirement of 11.50% (including CCB) prescribed by RBI in terms of Basel III norms. The Common Equity Tier 1 capital ratio stood at 12.66%.

2.15 Dividend

The Board of Directors of your Company has recommended a dividend of Rs.1.30 per equity share (i.e.13%) of Rs. 10/- each on the paid-up Share Capital of the Bank for the financial year 2022-23. The dividend shall be paid to the members, whose names appear in the Register of Members as well as the Beneficial Ownership Position provided by NSDL/CDSL as at the close of business hours on 23^rd May, 2023.

The Board of Directors of the Bank in their meeting dated

24.04.2023 has recommended dividend of Rs. 1.30/- (i.e., 13%) per share on equity shares of the Bank for the Financial year 2022-23. Further it is informed that the Record Date for determining the eligibility of members entitled to receive dividend on equity shares is Tuesday, 23^rd May, 2023. Dividend, if approved by the shareholders of the Bank, shall be paid after the AGM to those shareholders, whose names appear in the Bank's Register of Members/ Register of Beneficial Owners maintained by the Depositories viz., National Securities Depository Limited and Central Depository Services (India) Limited as at the close of business hours on Tuesday, 23^rd May, 2023.

3. RESOURCES: BANKING OUTLETS, HUMAN RESOURCES, IT INFRASTRUCTURE, CUSTOMER RESPONSIVENESS AND OTHERS:

3 .1 Banking Outlet/ ATM Network

As on 31.03.2023, the Bank had 2,263 banking outlets spread across all the States and six union territories as compared to 2,072 as on 31.03.2022. The banking outlets comprised of 2,203 branches and 60 fixed point outlets served by Bank Mitras, named as Customer Service Point (CSP).

During the year ended 31.03.2023 the Bank opened 199 new branches and 10 fixed point outlets served by Bank Mitras, named as Customer Service Points (CSP). In the same period, 10 branches were converted into CSP and 8 branches were merged with another branches. During the branch conversion and merger utmost care was taken to ensure that customers are not put into any inconvenience in availing banking services.

The branch network includes specialized branches in the area of Foreign Exchange, Government Business, Treasury and International Banking, Industrial Finance, Micro Small and Medium Enterprises, Hi-tech agriculture etc. Area wise classification of branches as on 31.03.2023 is as under:

Sr. No.	Classification		As on 31.03.2023		As on 31.03.2022
1	Rural		606		611
2	Semi-Urban		602		511
3	Urban		476		412
4	Metro		519		488
Â	Total		2,203		2,022
ATM / CRM Network The Bank had 2,330 automated teller machines (ATMs) and cash recycler machines (CRM) as on 31.03.2023 as compared to 2,128 as on 31.03.2022.
Â		31.03.2023		31.03.2022
Offsite		420		429
Onsite		1,910		1,699
Total		2,330		2,128

3.2 Human Resources Management

MAHABANK believes in and acknowledges the critical role of its employees in achieving its present and future organizational goals. The Bank continuously undertakes multiple initiatives for strengthening and developing its human capitals. The Bank has put in place comprehensive HRM Policies that provides the road map for acquiring appropriate & need based human resources, its development through training, job enrichment, reward and recognition for better performance, career progression, welfare and retention.

(i) Manpower Strength:

The total Manpower of the Bank as on March 31, 2023 stood at 12,977. The following are the details of category of employees.

CADRE	OFFICERS		CLERK	SUBSTAFF	PTS	TOTAL
COUNT	7358		3648	1964	7	12977
(ii) Gender Diversity:				Â	Â	Â
Out of the total workforce, the representation of women is 27.10% spread across all geographies and levels of hierarchy.
CADRE		OFFICERS	CLERK	SUBSTAFF	PTS	TOTAL
MALE		5324	2384	1745	7	9460
FEMALE		2034	1264	219	0	3517
TOTAL		7358	3648	1964	7	12977

(iii)    Recruitment :

During FY 2022-23 the Bank has recruited 1034 employees comprising of 443 Officers in Scale I, 333 officers in Scale II, 54 in Scale III cadre, 2 officers in Scale V cadre and 191 Clerks. With these recruitments, Bank has become younger with average age of employee coming down to 38 years. Upon completion of tenure of existing Internal Ombudsman (IO), Bank has appointed (IO) to strengthen the Internal Grievance Redressal Mechanism.

(iv)    Promotion:

Promotion is one the key motivating factors for the employees as it brings higher responsibilities, monetary benefits and status. This promotion process is carried out every year based upon Board approved Promotion policy which is formulated in line with GOI & other regulatory guidelines and ensuring availability of adequate employees at each level keeping in view the business growth of the Bank along with availability of sufficient number of employees for shouldering responsibilities at higher levels. Bank completed the promotion process in a fair & transparent manner. The number of employees promoted are as under

JMGS-I TO MMGS-II	MMGS-II to MMGS-III	MMGS-III TO SMGS-IV	SMGS-IV TO SMGS-V	SMGS-V TO SMGS-VI	SMGS-VI TO TEGS-VII	Clerical to JMGS-I	Sub-Staff / PTS to Clerical
153	408	76	41	18	6	203	36

(v) Reservation Cell:

As per Government of India's guidelines, reservations are provided to Scheduled Castes (SCs), Scheduled Tribes (STs), Other Backward Classes (OBCs) and Persons with Disability (PWD) candidates in Direct Recruitment. Reservations for SC/STs in promotions are provided as per

Government guidelines. Special Cells at Head Office and all Zonal Offices are functioning to monitor the implementation of the reservation policies and to redress grievances of SC/ST/OBC & Physically challenged employees as well as ex-servicemen. The Bank has designated Chief Liaison Officers at Head Office and has set up SC/ST Cells at all Zonal Offices.

Caste / Cadre	GEN	OBC	SC	ST	EWS	TOTAL	Differently abled	Ex Serviceman
Officers	3467	2065	1176	546	104	7358	176	38
Clerks	1759	923	618	317	31	3648	102	152
Sub Staff	638	471	657	198	0	1964	17	123
PTS	4	2	1	0	0	7	0	0
Total	5868	3461	2452	1061	135	12977	295	313

Necessary efforts were continued to be made to resolve all the grievances of the various reserved categories and to maintain a cordial relation with them as also to assist in their career progression.

(vi) Major HR initiatives:a)    Online Employee Grievance Redressal Module:

For prompt settlement of genuine grievances of employees and to maintain a healthy employer-employee relationship, an Employee Grievance redressal on-line portal was developed which will facilitate resolving the grievances in T+2 days related to employee benefits, service regulations etc. Efforts has taken by HRM Department to develop a dedicated and integrated software to resolve the grievances within minimum time in HRMS.

b)    Appointment of Nodal Officer for Bank’s retired staff & Conducting Staff Pensioners Adalat : In

order to resolve the grievances & respond to the queries of retired employees, Bank has appointed a nodal officer at Head Office level. In addition to the above, for speedy disposal of grievances, bank decided to conduct Staff Pensioners' Adalat which will act as platform, for Staff pensioners, to settle their issues. It is conducted on the 1^st Friday of every month.

c)    Improvisation of Staff Schematic loans & other Benefits:

•    Staff Housing & Vehicle Loan was amended as per market practice & to provide more benefits to employees. The newly joined officers in scale II & above cadre with prior banking experience are eligible for staff housing loan & staff vehicle loan from the date of joining in the Bank and employees who opted voluntary retirement are also allowed to continue staff housing loan upto the age of 75 years.

•    To promote e-vehicles and to reduce the carbon foot print Bank has also considered purchase of e-Vehicles on the same terms and conditions as per existing staff vehicle loan scheme. Employees can avail this facility with concessional rate of interest (less than 0.50% as applicable to vehicle loan). Bank is also paying reimbursement towards maintenance of E-vehicle on declaration basis.

d)    Revision in residential leased accommodation Facility to Officer : In view of rise in rental value of residential accommodation and with a view to ease the distress arising out of scarcity of bank's owned accommodation and financial burden borne by the officers due to sharing a portion of leased rent, Bank has enhanced the existing rental limit and enhanced the additional limit of rent for leased accommodation to the officers working as Branch Managers / Zonal Heads over and above the ceiling, Society Maintenance charges and brokerage facility is extended to all areas / centers in addition to the existing areas of Major-A cities and Area-I places.

e)    Reimbursement of House Maintenance Expenses to Employees: In order to enable the employees to maintain the house, Bank has introduced a scheme of Reimbursement of House Maintenance Expenses to Employees.

f)    Scheme for reimbursement of expenses incurred by the employees towards high speed internet Connection: With a view to enable faster communication, a scheme named reimbursement of expenses incurred by the employees towards high speed internet connection over and above their mobile bill reimbursement was introduced

g)    Staff Welfare Schemes: A welfare committee has been constituted among top Management along with union office bearers, wherein fund (3% of net operating profit of the financial year) is allocated for welfare of the employees & is utilized through various schemes.

•    Introduction of Scheme of reimbursement towards expenses incurred to avail Creche Facility: Bank has introduced a scheme for reimbursement of the expenses incurred towards creche facility to all female employees of the Bank on declaration basis under staff welfare measure. For all women staff having child above 6 months & below 3 years of age are eligible to claim the reimbursement on declaration basis.

•    I ntroduction of Employees Group Personal Accidental Policy: The scheme of Employees Group Personal Accidental Policy was introduced for all the serving employees of the Bank as a welfare measure. Under the scheme, Employees are covered accidental death insurance of Rs 40 Lakhs, Permanent Total Disability of Rs 40 Lakhs, Permanent Partial Disability up to of Rs 20 Lakhs & Air Accident Insurance Death of Rs 1 Crore.

•    Bank has paid canteen subsidy & Entertainment allowance to all employees

•    Reimbursement towards Self-care and Wellbeing: Considering the importance of Self-care and well-being of the employees which is one of the factors towards ensuring a healthy and happy workspace, Bank has introduced the scheme of ‘Reimbursement towards Self-Care'.

h)    Employee Engagement - Enhancing Employee Connect & Improving Happiness Index : In order to enhance the employee connect & to improve the happiness index amongst employees, bank has issued suitable communication for all authorities & employees to follow certain steps at all levels to ensure a conducive environment for well-being of employees such as timely approval of employee benefits / leave, quick redressal of staff grievances / complaints, scheduling employee connect sessions on a day in every month post banking hours/during lunch hours wherein employees are to be motivated to express their views/concerns/issues/ suggestions, arranging informal events or re-creational activities or get-together periodically in small groups by involving families of the employees, rewarding top performers etc. In response to our communication, various zones have arranged sports activities among staff members, town hall meetings, reward & recognition ceremonies for the best performers, recreational activities with staff & their family members, requisite training interventions / motivational sessions etc.

i) Review of Scheme for appointment on Compassionate grounds & revision in the ex-gratia amount payable to the family dependent/s in lieu of appointment on compassionate ground : Bank has revised the scheme of appointment under compassionate ground in line with regulatory guidelines .The revised model of scheme for payment of ex-gratia amount in lieu of compassionate appointment which was adapted by the Bank as per IBA guidelines dated 19th July, 2007 has been revised in order to provide financial relief to the family of the deceased employee and tide over the crisis brought about by the pre-mature death of the bread earner of the family. The above modifications will go a long way in benefitting the families of our employees, who have served the Bank and help them to tide over financial burden being faced by the family in view of the demise of the earning member. No. of compassionate appointments made during FY 2022-23 is as under -

Cadre	No. of Employees
Clerk	27
Substaff	07
Total	34

LEARNING & DEVELOPMENT:

I n order to thrive in the ever-changing and competitive landscape, it is important to be resilient and agile and to constantly upgrade the skill-sets of all the employees. Bank has delved deeper into this thought and created a new Learning and Development (L&D) vertical in FY 2022-23. L&D vertical has come into inception with the idea of instilling a culture of learning in our bank and ensuring that our employees are highly skilled, proficient and equipped with the latest trends and technologies. The learning infrastructure facilitates personal and professional development of all the employees in accelerating growth trajectory of the Bank and to meet the future challenges and overcoming them with confidence and resilience.

In the previous year, L&D Vertical, comprising of the Staff Training Colleges, has undertaken analysis, design, development, implementation and evaluation of the training programs for our employees. In addition to the regular training areas, Bank has conducted multiple specialized trainings for employees in security management, cash management, program for legal recovery, program for ZVO's, new AFOs, micro-credit, Forex, DZM Leadership Conclave, credit management and infrastructure financing, credit monitoring, risk, business development, IT trainings, ESG etc. Numerous locational trainings have been conducted to expand the participation across geography and nearly 3,500 employees were trained across cadres-sub-staff, cashiers, differently-abled employees, for LLMS and gold loan etc.

Realizing the imperative of building a strong pipeline of leadership in the bank, Talent Development Programs were conducted for executives (AGMs and DGMs) of the Bank in FY 2022-23 at various premier institutions such as IIM Ahmedabad, Bangalore, Calcutta, Indore, Kozhikode, Lucknow, XLRI Jamshedpur. In addition to this, Leadership Development Programs have been conducted for Chief Managers at NIBM, Pune and State Bank Academy, Gurgaon.

Bank is optimizing the use of ICT for imparting learnings and maximizing the participation coverage through various podcasts, webcasts, webinars, online quiz etc. to constantly update our employees on the latest technological changes and offerings of the Bank.

Cadre-wise Break up of Employees trained during the period 01.04.2022 to 31.03.2023 are as under-

Cadre	Number of Programs	No. of Program Training Days	Number of Employees Trained
OFFICERS	172	570	5,856
CLERKS	88	225	2,624
SUB-STAFF	58	109	1,456
Total	Â	Â	9,936

3.3 Technology Initiatives:A. Customer Centric Initiatives:

During FY 2022-23, Bank has taken multiple initiatives

toward service delivery to its customers for convenience:

•    In line with RBI guidelines, Bank has launched Account Aggregator facility which enables customers to easily access and share their financial data in digital space, ensure seamless transactions & eradicates the possibility of frauds related to financial data.

•    Bank has ordered 600 Cash Recyclers which would substitute existing OPEX ATMs at branches and cater to branches opening under ABEP (Annual Branch Expansion Plan) of the Bank.

•    The automated DCSS (Deceased Claim Settlement System) Portal named “SUVIDHA” was launched which is customer centric and offers benefits like improved and measurable TAT (Turn-Around-Time) at each stage, faster settlement of claims, tracking of a deceased claim application by customers etc.

•    Bank had implemented VKYC & Re-KYC facilities

that benefits customers to update their KYC digitally without visiting branches and waiting in long standing queues.

•    Online payment of EPFO through Internet Banking was facilitated to corporate customers for payment of the pension fund contribution to Employee Pension Fund Organization.

•    Bank has implemented TIN 2.0(Tax Information Network) under PRAKALP project. Bank has integrated with Prakalp which facilitates for advance tax payment to customers through Internet Banking & OTC (Over The Counter).

•    Bank could implement Parent-Multichild and Parent- Grandchild functionality in SNA accounts to support Govt. transactions with daily reconciliation.

•    The Scheme-wise Bank Management System (SBMS) under IFMS applications of Odisha Govt. & West Bengal Govt. are integrated with Bank of Maharashtra for enabling Account validation of Institutional Agencies and beneficiaries (BoM Account holders) in automated and secured channel, facilitating the easy way of fund release on real time basis from Govt. Agencies to beneficiary & tracking and monitoring financial transactions including scheme wise fund disbursement.

•    Digital Lending:

Bank has put in place a comprehensive Digital Lending Policy based on the RBI guidelines for onboarding of Digital Lending Solutions and for making effective and faster credit decisions while sanctioning the loans and advances through digital mode.

In order to boost Digital Lending Portfolio, Bank has launches “Mahabank Twarit Personal Loan” where customer can apply online for personal loan and get the sanction and disbursement without visiting the branch.

Bank has formed a strategic partnership with credit Information Company to provide a comprehensive suite of products and services to achieve target setting, better business growth, cross-sell & up-sell, fraud prevention, quality credit appraisal, better credit monitoring, better recovery, monitoring of target vs achievement and to maintain quality assets portfolio.

B.    Process Centric Initiatives:

Following process related enhancements have been

achieved through introduction of technology:

•    A new Business Dashboard named “Maha Darpan” and “TAT Monitor” has been implemented for further enhancement of efficiency in internal processes and decision making.

•    Bank has developed and launched an in-house advanced Mobile Application, named as ARJUN (i.e Automated Remote Junction for Monitoring of Assets Under Stress), which will serve the purpose of a handy tool to the Staff members for effective Credit Monitoring and collection actions directly through their mobile phone.

•    Bank is implementing CKYC mobile application to

provide real time and rich experience for scanning of images with quick response for branch staff. This would be an extension to on-boarded CKYC solution, which is a web portal. The mobile application can be easily and smoothly integrated with APIs and CBS.

C.    Infrastructure & Regulatory Initiatives:

•    Bank has completed its Private Cloud “Nakshatra”

setup at Data Centre and has already migrated it's 50% applications to On Prim Private cloud infrastructure. It includes Cloud Hyper Converged Infrastructure with Virtualization software and Network Attached Storage.

•    To strengthen the security architecture, Bank has initiated “Kavach” initiatives, and implemented different industry established latest security tools like DLP (Data Leak Prevention), DAM (Database Access Monitoring), EDR (Endpoint Detection and Response), WAF (Web Application firewall), FRA (Firewall Rule Analyzer), EFRMS (Enterprise Fraud Risk Management Solution), Deception Solution (Honeypot Solution) DICT, SSLO etc to name a few.

•    Migration to Centralized CBS: Bank has migrated all its branches on centralized CBS system in B@ncs 24 which has the following features:

a)    Centralized Architecture

b)    Cost Effectiveness

c)    Multiple Browser Compatibility

d)    Increased Operational Efficiency

e)    Enhanced Search Features

•    To minimize VSAT dependent branches, Bank has on-boarded Service Provider for upgradation of bandwidth for approx. 4% of its total branches with VSAT link. The upgrade from 512 Kbps to 4 Mbps will enhance the efficiency of branch working by facilitating smooth functionality of various applications.

•    Bank has successfully upgraded its EFT/IST Switch's hardware and software which was initially implemented by the Bank. The upgraded switch is with higher processing capabilities, card tokenization and scalable to meet the transaction volume over next 5 years.

•    Bank has migrated Aadhar Enabled Payment System (AePS) services from ISO message format to more versatile with customizable API based XML messaging as per NPCI guidelines. The new XML platform will allow more data carrying capacity to facilitate Finger Image Record(FIR) transactions. It also allows Bank to have a common code for multiple NPCI platforms. enabling optimization of resources and making the ecosystem future-ready through API based solutions.

•    Bank is in the process of appointment of a reputed Technology Consultant who will assist Bank for Digital Transformation which includes enhancement of Digital and Technology platforms for a) Compliance b) Business Sourcing & c) Customer Service Convenience.

•    Bank has shifted its Disaster Recovery site to

state-of-the-art facility with Tier III & above Data Centre standards successfully. Further. Bank is in the process of shifting its Data Centre & Near Site DR to state-of-the-art facility with Tier III & above Data Centre standards in the FY 2023-24.

D. Awards & Recognitions on Technology front:

•    Bank has been awarded with ‘Best Bank' under award category -‘Technology Talent' on 03.12.2022 during IBA Technology Awards 2022.

•    Bank has been declared ‘Runner up' under award category -‘Digital Financial Inclusion' on 03.12.2022 during IBA Technology Awards 2022.

3.4 Customer Centric Initiatives taken by the Bank

i. The Bank has pursued high standards of customer service to ensure customer satisfaction throughout the year by implementing all major recommendations of Goiporia Committee. Dr. S.S. Tarapore Committee and Damodaran Committee. As a member of Banking Codes and Standards Board of India (BCSBI), the Bank has adopted Code of Bank's Commitment to Customer and Bank's Code of Commitment to MSMEs.

ii.    Duly documented policies approved by the Board, on “Deposit”, “Collection of Cheques”, “Redressal of Grievances”, “Compensation”, “Operational Procedure for Settlement of Claims of Deceased Depositors” and "Customer Rights Policy" are in place.

iii.    Customer Service Committees are formed at all branches and their meetings are conducted regularly on monthly basis. The Standing Committee on Customer Service at Head Office and Zonal Level Customer Service Committees at Zones, meet regularly to address and review various customer related matters and to take steps, for an improvement, on an ongoing basis.

iv.    The Committee of the Board on Customer Service meets on quarterly basis to monitor the quality of the customer service, redressal of customer grievances and to ensure customer satisfaction.

v.    Bank has well established grievances redressal machinery in place to respond promptly to customer grievances. The Bank has internet based mechanism, Standardized Public Grievances Redressal System (SPGRS) for lodging of complaints or to give suggestions/ feedback on services by the customers and for providing acknowledgement and status of their feedback/ complaints as per the directions of Government of India.

vi.    Customer Complaint Status:

Sr. No.	Particulars	2022-23	2021-22
1	Customer complaints at the beainnina of the year	06	19
2	Complaints received during the year	5609	3236
3	Complaints redressed during the year	5578	3249
4	Complaints pending at the end of the year	37	06

3.5    KYC / AML

The Bank has Board approved KYC-AML-CFT Policy in place. The Policy is the foundation on which the Bank's implementation of KYC norms, AML standards and CFT measures are based. The full KYC compliance entails staff education as well as customer education for which the Bank takes various measures on a regular basis. A comprehensive list of eligible KYC documents is uploaded on the Bank's web site for the benefit of customers. Regular training sessions are conducted on KYC-AML-CFT guidelines at the Bank's training establishments to sensitize the employees.

3.6    Risk Management

The Bank has put in place Risk Management Policies and Strategies which enables it to identify, measure, monitor and manage risk efficiently and establishes control systems in line with the Bank's aggregate Risk Appetite. Bank has constituted Risk Management Committee at Board level to monitor the risk at Bank level in accordance with RBI Guidelines. Bank has also constituted sub-committees headed by Top Management of Bank.

The Bank is compliant to the RBI guidelines on disclosure requirements under Basel III Capital Regulations.

3.7    Marketing & Publicity

During FY 2022-23, the Bank's Marketing and Publicity strategies were a resounding success. The marketing team participated in various expos in the physical and virtual modes under the Retail, Agri & MSME sectors for increasing our presence and business mobilization.

In FY 2022-23, Bank created new benchmarks in all mediums like TV, Radio, Digital, Print, etc. Bank has done campaigns with various National & Regional TV, Radio, Print & Digital Channels for creating awareness about the Bank and Promotion of various products & services. In Print category, Bank has published various pointer and display advertisements including Skybus advertisement throughout the country. Under Outdoor category also, Bank has put hoardings/LED Structures at major places like- Mumbai, Bengaluru, Pune, Chennai, Lucknow, Bhopal, Kochi, Bhubaneshwar, Kolkata etc.

In Digital Marketing Bank has done advertisement campaigns in major e-commerce, news portals & Google Ads- Search and Display Campaigns. Bank emphasized SEO for making the corporate website more user-friendly.

In social media, Bank reached 3 million followers on 5 major platforms viz. Facebook, Instagram, YouTube, LinkedIn & Twitter. On YouTube, Facebook and Instagram Bank is at Top 3rd, 4th & 5th position respectively in terms of followers/subscribers.

3.8 Citizen’s Charter

The Bank has adopted the Citizen's Charter since 200001, which details the duties and responsibilities of the Bank towards its customers. The Charter is displayed at all the branches and Bank's website.

4. SOCIO/MICRO ECONOMIC DEVELOPMENT4.1    Priority Sector Lending

It has been the constant endeavor of the Bank to facilitate equitable and sustainable economic development by timely and hassle-free availability of credit for productive purposes to Small and Marginal Farmers, Micro and Small Enterprises, Retail Traders, Professional and Self Employed, Women Entrepreneurs and entrepreneurs from economically weaker sections. Total Priority Sector Lending (PSL) of the Bank (including investments & excluding PSLC sale) stood at 58.37 % of ANBC as against the mandatory target of 40%. The advances under Priority Sector (excluding investment & PSLC sale) as of 31st March 2023 stood at Rs. 66,844.00 Cr (56.77 % of ANBC). Bank has carried PSLC Sale transaction of Rs. 700 Cr and received premium of Rs. 4.15 Cr during FY 2022-23.

Bank has achieved all mandatory targets as stipulated by RBI under Priority Sector Lending during the FY 2022-23 on Quarterly Average Basis.

4.2    Agriculture

Bank sanctioned fresh loans of Rs. 14275 Crore for Agriculture and allied activities during the year 202223. The total outstanding advances to agriculture sector reached a level of Rs. 23400 Crore as on 31.03.2023. Total Agriculture (including investments & excluding PSLC sale) stood at 20.82 % of ANBC. Bank has carried out PSLC sale transaction of Rs. 200 Cr during FY 2022-23. Bank has achieved all mandatory targets (on Quarterly average basis) under Priority Sector and Agriculture including subtargets during the FY 2022-23.

The bank focused on growth of Investment Credit under Agriculture during the year 2022-23 and disbursed Rs.5491 Crore. As a result, Investment Credit of Bank grew by 35.28% and MKCC portfolio of the Bank grew by 1.24 % over previous year.

During FY 2022-23 Bank has focused on Agriculture Gold Loan and disbursed Rs. 1905 Crore, thereby increased Agriculture Gold Loan portfolio by 72%.

Bank has entered into MOU with Shri Kshethra Dharmasthala Rural Development Project (SKDRDP) and Gramin Mahila Va Balak Vikas Mandal (GMBVM) for SHG Finance. Bank has received Rs. 1103 Crore SHG advances from SKDRDP, during FY 2022-23.

Over last few years, Agriculture sector has been repeatedly hit by vagaries of natural calamities like drought, flood, hailstorms, etc. Within the regulatory guidelines, Bank has extended the relief measures to farmers from time to time. The Bank undertook awareness/sensitization program and locational trainings for the branches for increasing advances to agriculture by providing hassle free credit to farmers.

4.3 Micro, Small and Medium Enterprises (MSME)

MSMEs are the growth engine for Indian economy. They have highest contribution in generating employment both directly as well as indirectly. Bank has extended support to MSMEs and has implemented various relief measures given to MSME borrowers by Government of India and Reserve Bank of India.

i.    Additional Funding extended under Emergency Credit Line Guarantee Scheme (ECLGS) to eligible borrowers.

ii.    Additional finance extended under Adhoc Line of Credit COVID-19 Scheme

iii.    For street vendors, Bank of Maharashtra has extended loans via PMSVANIDHI scheme to revive their business.

iv.    Finance is extended to eligible projects on the healthcare sector under Loan Guarantee Scheme for Covid Affected Sectors (LGSCAS).

v.    Finance is extended under Loan Guarantee Scheme under Covid Affected Tourism Service Sector (LGSCATSS) to provide relief to eligible Travel & Tourism Stakeholders viz. by providing need based financial assistance who have been adversely impacted by the Covid-19 pandemic.

Bank's lending to Micro, Small and Medium Enterprises increased by 26.50% as compared to Mar 2022 and recorded growth of Rs. 6,965 crore in absolute terms. Total MSME advances of the bank stood at Rs.33244 crore as on 31.03.2023.

Bank's performance in MSME portfolio in FY 2022-23

S. No	Particulars	Actual	Target
1	% of Micro to Adj. Net Bank Credit	18%	7.50%
2	YOY growth under Micro Enterprises	8%	10%
3	YOY Growth under Micro & Small enterprises O/s	20%	20%
4	Share of Micro against to MSE O/s	69%	60%

Bank is supporting credit needs of small business and nonfarm enterprises engaged in manufacturing, trade and services up to Rs. 10 lakh by way of Pradhan Mantri Mudra Yo-jana (PMMY). During the year ended 31.03.2023 the Bank has sanctioned Rs. 3,995 crore under PMMY against the target of Rs. 3,240 crore, thereby achieving 123% of target.

Other Major Achievements

•    MSME outreach programmes have been organized at various locations in zones to cater new business and appreciable response is received from the customers.

•    Bank has created Digital Lending Department specially for bringing new digital products to serve MSME units in much better and faster way.

•    Straight Through Process (STP) of Mudra Loan is under development for hassle free disbursement.

•    Bank was successful in achieving Stand-Up India targets. As on 31.03.2023, our Bank had sanctioned 4123 number of applications as against target of 4064. Bank also achieved all set targets for MUDRA and PM SVANIDHI scheme.

•    Bank has made tie up with Maratha Chamber of Commerce, Industries and Agriculture(MCCIA), NSIC, BYST for sourcing new and quality MSME proposals.

•    Bank has empaneled Due Diligence Agency for digital flow of Due Diligence Report, for better diligence at Pre-Sanction stage of credit proposal to promote good quality assets.

4.4 Bank’s Exposure to Select Segments

(Amt. Rs in Cr)
Sr No	Sector	As on 31.03.2023	As on 31.03.2022	% increase (+/-)
1	Micro / SHG Finance	2,086	577	261.53
2	Weaker Section	19,187	12,735	50.66
3	SC/ ST Beneficiaries	5,442	4,234	28.53
4	OBC Beneficiaries	11,714	9,108	28.61
5	Minority Communities	5,723	4,481	27.72

5. IMPORTANT SCHEMES/ PROJECTS OF THE BANK:5.1 Credit Flow to Retail Sector

Bank is providing retail loans for salaried persons, professionals, businessmen and pensioners for purchase of housing properties/ plots, repair/ renovation of house, purchase of consumer durables, two/four wheeler vehicles, education and loan for other personal needs etc. Total Retail portfolio of the Bank as on 31.03.2023 stood at Rs. 43,432.60 Crore.

SN	Scheme	Brief Description	Portfolio as of Mar ’23	NPA %
1	Maha Super Housing Loan Scheme	Housing Sector being the thrust area, Bank has various Housing Loan schemes in place to meet the needs of all economic segments. Bank offers housing loan for “purchase / construction of new / existing house / flat, repairs/ renovation / alteration of existing house / flat, purchase of plot and construction thereon”	25,181.06	0.69

Â	SN	Scheme	Brief Description	Portfolio as of Mar ’23	NPA %
Â	2	Maha Super Car Loan Scheme and Mahabank vehicle Loan scheme	Bank has launched schemes for purchase of New four wheelers i.e. Car, Multi Utility vehicles (MUVs), SUV etc. for personal use (i.e. not for hiring/ ferrying passengers) for individuals (18 years and above).	2,386.40	0.77
Â	3	Model Education Loan Scheme	Bank has implemented Model Education Loan Scheme as per IBA guidelines and provides hassle free Education loan to all meritorious and deserving students for pursuing higher studies /education in India and abroad.	1,828.64	0.96
Â	4	Loan Against SelfOccupied Property	Bank has introduced Loan Against Self-Occupied Property in which loan is given to the borrower against the property. The end use of the loan is for meeting varied personal needs like Children's Education, marriage of children, medical treatment, travel/ tour expenses, buying vehicle or hi-tech gadgets, other domestic needs etc.	1,824.79	1.18
Â	5	Mahabank Top up Loan Scheme	In order to extend additional credit support to existing housing loan borrower as well takeover of existing housing loans of other banks with additional facility of Top-up Loan. Bank has launched “Mahabank Top Up loan Scheme”. Under this scheme credit is extended for repair / renovation / furnishing of house, children's education, marriage of children, medical treatment, buying a vehicle or hi-tech gadgets and other domestic needs etc.	1,699.21	0.20
>	6	Mahabank Gold Loan Scheme	To cater to the needs of meeting personal expenses, whatsoever which include personal expenditure for varied needs like marriage, higher education, medical emergencies, and business travel etc., Bank has a retail loan product as “Mahabank Gold Loan Scheme”.	4,259.33	0.20
Â	7	Mahabank Aadhar Loan Scheme	To cater to the needs of our existing pension account holders in meeting their personal expenses, pilgrimage, medical and domestic needs etc. Bank offers “Mahabank Aadhar Loan Scheme”.	709.05	0.93
Â	8	Personal Loan	To cater to the needs od salaried individual and professionals of meeting other personal expenses, medical or domestic expenses etc.	1381.46	0.40

5.2. Centralized Processing of loans

Bank has established Centralised Processing Cells (CPCs) for processing and sanctioning of commercial and retail advances at all its zones to improve the turnaround time (TAT) in facilitating timely credit.

All mortgage based Retail loan or wherever immovable property are offered as collateral for mortgage purpose irrespective of the loan amount to be processed and sanctioned at the CPC-R.

These loans are as under:

•    Housing Loan

•    Top up Loan

•    Loan against self-occupied    Property

•    Education Loan (In case immovable property is offered as collateral)

•    Vehicle Loan (In case immovable property is offered as collateral)

•    All other Retail Loans to be sanctioned by respective branches.

All Branches (Categorized up to Scale -4) within urban conglomerate or within 25 km to 30 km radius in other place (as per discretion of ZMs) from location of CPC-R will be mapped with it.

Pune based CPC cells i.e. Pune City & Pune East are merged into one Maha Bank Retail Point for processing all the mortgaged based loans in Pune at a single place for mapped branches and above the delegated sanctioning powers of unmapped branches.

5.3 Housing Finance Branches:

Bank has already in place exclusive Specialized Housing Finance Branch (HFB) at Yashomangal, Pune City (Br. Code- 1129) to capture the available opportunities in Housing and Mortgage based loans. Major vision is establishing this specialized branch was to adopt a focus approach on pilot basis without disturbing the existing structure.

Based on the employment opportunities and livelihood, Metro centers have become an attractive destination and inviting large number of populations to migrate and settle down as a true metropolitan. Also, Metro cities have become an attractive destination for home buyers.

As evident, Bank has witnessed a positive outcome with such exclusive & at par with industry standard outlet. Now, Bank has expanded its Housing Finance Branch outlets to other major centers like Mumbai, Bengaluru, Delhi, Noida, Hyderabad, Chennai, Navi Mumbai, Chandigarh, Gurgaon, Wakad (Pune) and Bhopal.

5.4. Gold Loan Point:

Bank has started putting concerted efforts on new business under gold loan segment. Maha Bank Gold Loan Point have been opened across India to popularize and enhance gold loan lending of our Bank. Maha Bank Gold Loan Points facilitate quick, transparent & hassle free Gold Loan sanctioning.

5.5    Door Step Banking Services

Bank is providing Door Step Banking Services for its retail customers in 100 identified cities through its 546 branches. Door Step Banking Services include financial and nonfinancial services. The financial services include cash withdrawal, fund transfer. Non- financial transactions like delivery of account statement and TDS certificate/ Form 16 as well as pickup service of cheque/DD, 15G/15H form, standing instructions, life certificate, nomination etc. are also made available. Pensioners can also submit digital life certificate from home.

5.6    Alternate Delivery Channels5.6.1    Internet Banking

There was an increase of 24.93% in Internet Banking user over the previous year. As of 31.03.2023, total 24.13 lakh customers were enrolled for Internet Banking facility.

5.6.2    Mobile Banking

Banking users increased by 24.40% in FY 2022-23. Total enrolled users were 23.46 lakhs as on 31.03.2023.

There was increase of 151.62% in QR code issuance over the previous year. As of 31.03.2023, total 10.91 lakh QR codes issued to customers.

6. CORPORATE SOCIAL RESPONSIBILITY

Following the legacy of the age-old convention of contributing to socio-economic advancement & underprivileged, weaker areas and rural citizens, Bank undertook various activities aligned with Govt. thrust areas. Bank also undertook, various activities in the aspirational districts like Washim, Gadhchiroli & Nandurbar.

Empowering MSMEs: Bank organized and participated in various events like IWEC Women Business Mela- a business conference for women entrepreneurs, “SARAS 2022 - Exhibition for products display of Self Help Groups”, “ MSME Conclave” organized by CII Tamilnadu and other activities in the same line.

Promoting Education & Sports: Bank has supported IIT Patna for organizing “ International Conference on Data Science & Artificial Intelligence 2022”, “28^th Colloquium to Microplantology - programme on environment, Industrial applications of micropaleontology & Stratigraphy” organized by Savitribai Phule University, for expansion & improvement existing facilities for the cause of Special Education for underprivileged children to Prism Foundation, Online training for organ donation to students of V4 Organs Foundation, Maharashtra NCC Cadets for procurement of electronic equipment's to educate NCC cadets on Financial Literacy during the Annual Training Camps at all seven Group HQs level, free distribution of 10,000 exam guidance questionnaire books among needy students at Dagduseth Halwai Mandir Pune, renovating of library for helping in education of underprivileged students and exam aspirants of SC/ST and weaker community, Kamayani Prashikshan & Sanshodhan Society for carrying our Research Project Training Program for Mentally Challenged Children.

Promoting Healthcare/Sanitation: Bank has provided financial support to B N Rao Health Foundation for conducting free Medical Camp at Karimnagar, Renovation of David Sasoon Infirm Asylum for old age people, Kendriya Vidyalaya Ganesh Khind for purchase of Napkin Vending Incinerators for girl students, drinking water supply to devotees during Alandi to Pandharpur Procession, organizing “India Development & Scheme Expo” -19^th Run against Drug Abuse & Thematic Expo, Seth GS Medical & KEM Hospital for event supporting cancer patients of CPAA (Cancer Patients Aid Association), Purchase of chairs for underprivileged children of CHD Group hostel, Installation of Water Purifier at Primary School to “Mandavi Shikshan Prasarak Mandal"; an education promoting Trust for underprivileged tribal people, Shree Ganesh Mandir Tekadi, Nagpur for purchase of vehicle for performing social work and social activities & taking care of animals, organizing an awareness program on Breast Cancer by conducting a marathon event by the name “Trust-In -Run'' Providing Folding Canes to visually Challenged through Blind Organization of India,Mumbai, organising blood donation camp, providing Furniture for Old age home at Malegaon.

Women Empowerment: Helping Women SHGs by providing platforms like Bhimthadi Jatra (a National level exhibition for women) to showcase their products, Divisional & State Level Skill & Knowledge Competition of RSETI trained women organized by Maharashtra State Rural Livelihood Mission (MSRLM), organizing “Women's Empowerment Event” - inspirational speeches from women who have created a mark in the society at Malegaon.

Urban/Rural development: Bank is undertaking various rural development activities like financial support to Janjati Kalyan Kendra, society working for overall development of the underprivileged community for providing commuting vehicle for remote tribal area.

Rural Development & Women Empowerment:

Bank is undertaking various social activities through Rural Development Centre (RDCs) and two trusts of Bank i.e. Mahabank Agricultural Research and Rural Development Foundation (MARDEF) and Gramm Mahila Va Balak Vikas Mandal (GMBVM) in the areas of Agriculture, Rural development & women empowerment.

Activities of MARDEF:a)    Trainings through Mahabank Rural Self Employment

Training Institutes (MRSETIs)

>    During FY 2022-23 Bank imparted EDP & skill based training to 5,789 trainees as against set target of 5,685.

>    A total of 4,360 new businesses were started by these trained entrepreneurs, showing settlement ratio of 75.32%; 2,448 units are credit linked, showing 57.06% achievement under credit linkage.

>    Our Bank has received prestigious State Award from “Maharashtra State Rural Livelihood Mission”, Mumbai for Better Management of RSETIs by sponsored Bank.

>    During the FY 2022-23, all RSETIs of our Bank are “AA” Graded for FY 2021-22 by NACER.

>    During the year various trainees from all our 7 MRSETIs participated in “Skill and Knowledge competition” organized by MSRLM at Divisional levels & State level. At state level three prizes owned by our MRSETIs.

>    MRSETIs have organized various programmes under ‘‘AZADI KA AMRIT MAHOTSAV' like FIT India Freedom Run/rally, Entrepreneurship Mobilization camps, Blood donation camps, International Yoga Day Celebration, Health checkup camps etc.

>    MRSETIs have organized special training batches for Divyang, orphan women.

b)    Other initiatives

>    Bank is undertaking various social activities through Rural Development Centre (RDCs) and two trusts of Bank i.e. Mahabank Agricultural Research and Rural Development Foundation (MARDEF) and Gramin Mahila Va Balak Vikas Mandal (GMBVM) in the areas of Agriculture, Rural development & women empowerment.

>    Bank is also implementing the social security schemes of Govt. like PMJJBY, PMSBY, APY, etc. through Branches, BCs and other digital modes.

>    RDC conducted special programme for Ex-army servicemen, Veermata/Veerpatni. On these occasion as token of gratitude they were felicited for their devoted service to Nation.

>    GMBVM provided skill based training to rural women for self-employment activities like Cloth Bag /paper making, Agarbatti, Candles, Immitation Jewellery, preparation of value added products from fish etc. to empower them for starting new business. These women are running their business on individual as well as through SHGs.

>    GMBVM provided platform to various SHG members through different exhibition so as to encourage & develop their entrepreneurship skills.

7. LEAD BANK7.1    Lead Bank Scheme

The Bank has Lead Bank responsibility in seven districts of Maharashtra State viz. Ch. Sambhaji Nagar (Aurangabad), Jalna, Nasik, Palghar, Pune, Satara and Thane. Every year District Credit Plans for the districts are prepared and implemented with the cooperation of other member banks as well as in coordination with District Collectors of respective districts.

7.2    State Level Bankers’ Committee

The Bank is the Convener of State Level Bankers' Committee (SLBC) for the State of Maharashtra.

SLBC prepares State Annual Credit Plan in consultation with Lead District Managers, Member Banks, NABARD, Reserve Bank of India, etc. The Priority Sector plan for FY 2022-23 was of Rs. 5,22,073 Crore, which was one of the highest credit plan in the country. The same was approved in a special meeting held under the Chairmanship of Hon'ble Chief Minister of Maharashtra.

SLBC also ensures holding of quarterly meetings regularly to review the implementation of State Annual Credit Plan, Priority Sector lending and Govt. sponsored schemes in the State. Apart from regular SlBc meetings, SubCommittee meetings as per guidelines as well as various other meetings are also organized by SLBC to coordinate between various Member Banks, State Government, Government Agencies, Reserve Bank of India, NABARD and the Central Government. SLBC, Maharashtra is having a network of more than 16,835 bank branches in the state.

In case of specific events like announcement of Debt Waiver Scheme, Relief Package for helping poorer sections of the society in the event of outbreak of a pandemic, SLBC coordinates between Member Banks and State / Central Governments for successful implementation of various measures / schemes.

As a SLBC convener, Bank of Maharashtra coordinated for implementation of Pradhan Mantri Jan Dhan Yojana (PMJDY) in the State of Maharashtra. As of 31.03.2023, total of 324 lakh PMJDY accounts have been opened in the State. The process of opening of PMJDY accounts is continued. SLBC also coordinates implementation of other Social Security Schemes of the Central Government in the State. As of 31.03.2023, total enrolments under PMJJBY, PMSBY & APY are 108.88 Lakh, 232.61 Lakh & 38.39 Lakh respectively.

7.3. FINANCIAL INCLUSION / PMJDY:

(Amt in Lakhs)
Â	Particular	2021-22	2022-23
FI Plan	No of Transactions by BCA (in lakhs)	196.82	209.05
Â	Amt. of Transactions (in Cr)	14624.74	16332.09
PMJDY	No. of PMJDY accounts (in lakhs)	71.64	70.46
Â	Of which Aadhar Seeded (in Lakhs)	66.55	66.46
Â	% of Aadhar Seeding	92.90%	94.32%
Â	Of which Mobile Seeding (in Lakhs)	59.56	59.88
Â	% of Mobile Seeding	83.14%	84.98%
Â	Of which Ru-pay card issued (in Lakhs)	33.56	35.11
Â	% of Ru-pay card issued	46.85%	49.83%
Â	Balance in PMJDY A/c (in Cr)	2617.43	2886.45
Â	Average Bal.per account (actual)	3654.00	4096.00

Â	PMJDY-OD count ( in lakhs)	1.83	1.39
	PMJDY-OD Amount ( in lakhs)	2023.48	1483.20
	Zero Bal.PMJDY A/cs (in lakhs)	13.51	4.59
Social Security Schemes	Enrolment under PMJJBY ( in lakh)	19.10	25.28
	Enrolment under PMSBY ( in lakh)	37.90	47.34
	Enrolment under APY ( in lakh)	4.14	5.80
BSBD Accounts	Total BSBD Accounts (in lakhs)	93.34	88.09
	O/S Balance in BSBD A/c ( in Cr)	3272.24	3544.95
	Average Bal.per account (actual)	3506.00	4024.00
	Commission paid towards BC Services (in Crore)	38.64	47.11

8. SUBSIDIARIES/JOINT VENTURES AND SPONSORED INSTITUTIONS:8.1 Performance of Regional Rural Bank

Maharashtra Gramin Bank (MGB) is a Regional Rural Bank sponsored by the Bank, having its Head Office at Chatrapati Sambhaji Nagar (Aurangabad), Maharashtra State. Total no. of branches as on 31/03/2023 stood at 421 in its area of operation covering 17 out of 36 districts of Maharashtra state. These branches are controlled through the 7 Regional Offices.

All 421 branches and controlling offices are under core banking solution (CBS).

Performance highlights of Maharashtra Gramin Bank for the FY 2022-23 are as under:

•    MGB achieved total deposit level to Rs 15578.76 Crore and the CASA is 49.33 %.

•    MGB has crossed the milestone of Rs. 25000 Cr in total Business and achieved the level of Rs 25279.52 Crore

with 11.33% Y-o-Y growth.

•    MGB has achieved operating profit of Rs 221.15 Crore

As per the DFS and NABARD guidelines, MGB had prepared DVP targets for three financial years from FY 2022-23 to FY 2024-25 and got approved from the Sponsor Bank. According to this DVP/MoU targets, achievement of the MGB under Major key parameters for the financial year 2022-23 are as under -

(Rs in Crores)
Sr. No.	Performance Parameter	Actual as on	DVP/MoU Target	Actual as on	% Achie-	Y-o-Y Growth
		31/03/2022	31/03/2023	31/03/2023	vement	(%)
1.	Total Deposits	14677.75	16000.00	15578.76	97.37	6.14
2.	CASA deposits	7565.05	8250.00	7684.57	93.15	1.58
3.	% of CASA Deposits	51.54	51.56	49.33	95.66	(4.30)
4.	Total Advances	8028.96	9800.00	9700.76	98.99	20.82
5.	Total Business	22706.71	25800.00	25279.52	97.98	11.33
6.	Interest Income	804.41	1025.00	1035.27	101.00	28.70
7.	Non-Interest Income	171.39	175.00	186.66	106.66	10.56
8.	Operating Profit	116.83	217.00	221.15	101.91	89.28
9.	Recovery in Write Off	8.95	13.00	6.01	46.20	(32.82)

MGB has deployed in all 1,261 Business correspondents in rural areas to provide door step service to the customers. MGB has opened 26.82 Lakh PMJDY accounts till 31/03/2023 and 11.38 Lakh debit cards are issued to the PMJDY account holders.

MGB is actively participating in PMJJBY, PMSBY and APY as well as the PMMY scheme declared by the GoI, DFS. During FY 2022-23, 5.63 Lakh customers are covered under PMJJBY scheme and 15.42 Lakh customers are covered under PMSBY scheme. 2.01 Lakh customers are covered under Atal Pension Yojana (APY).

PFRDA has appreciated the work done by the bank in the APY and the Bank has received 5 awards in the different parameters during FY 2022-23.

8.2 Performance of METCO

The Maharashtra Executor & Trustee Company Pvt. Ltd., the 100% subsidiary of Bank of Maharashtra was established in 1946 with an aim to provide services auxiliary to banking such as:

•    Wills: Consultation, Drafting, Safe Custody & Execution of Will.

•    Public and Private Trusts: Consultation, Drafting and Management of Private Trusts / Public Trusts including various compliances to Charity Commissioner, Income Tax Dept.

•    Power of Attorney: Management of Investments & immovable properties as Power of Attorney holder.

•    Guardianship: Court appointed Legal Guardianship of minor's property.

•    Consultation for sale/purchase of property

The Company has completed its 77 years. The company's Head office is located at Pune having its branch units at Pune, Mumbai, Thane and Nagpur. It is managing about 1037 public & private Trusts. During the year as the Managing Trustee, additional 92 wills were added making total 1186 wills in its custody for execution. At present the company manages properties both movable & immovable of 21 clients under the power of attorney. The company also act as the trustee in respect of 99 policies under Married Women's Property Act and as court appointed Guardian of Minor's property in 2 cases. The company, as Managing Trustee of its 1037 trusts catalysts its social responsibility by extending help to poor people.

The Company has also donated through its trusts Rs. 177 lacs to 976 beneficiaries.

The net profit of METCO for FY 2022-23 stood at Rs. 75.70 lakhs.

The Company is also diversifying its services by introducing additional business verticals of Corporate Direct Selling Agent, Corporate Business Correspondent and Recovery Agent services to be provided to Banks/ Financial Institution and will also give value addition in implementation of Govt. Security Schemes like PMJJBY, PMSBY, APY, SCSS, Sukanya Samriddhi Yojna, etc. after the approval from the RBI.

9. IMPLEMENTATION OF OFFICIAL LANGUAGE POLICY

During the year 2022-23, the Bank has achieved various remarkable achievements in the field of Official Language implementation:

i. Bank was awarded “Rajbhasha Kirti Puraskar” for better implementation of Rajbhasha Hindi, which is the highest award for Rajbhasha. The award was given in two different categories viz. “Better Implementation of Official Language” and “Best House Magazine” in a grand function on 14th September, 2022, held at Surat, Gujarat. Shri Amit Shah, Hon'ble Minister of Home Affairs and Cooperation, Govt. of India, was the chief guest for the event. Shri A. S. Rajeev, Managing Director & CEO, Bank of Maharashtra felicitated

Hon'ble Minister of Home Affairs and Cooperation during the function. Shri K. Rajesh Kumar, General Manager, HRM & Rajbhasha and Dr. Rajendra Shrivastava, DGM (Rajbhasha) were also present in the function.

ii.    Bank was awarded “Skoch Gold Award” for Better Implementation of Rajbhasha and became the first bank to receive this award for implementation of Official language.

iii.    Bank was awarded “Vishesh Puraskar” and “Rajbhasha Ratna Award” by the Mumbai based prestigious institution ‘Aashirwad' for better use of Hindi during the year. Shri K. Rajesh Kumar, General Manager, HRM & Rajbhasha received the award at the hands of Hon'ble Governor of Maharashtra State at a grand function arranged at Rajbhawan, Mumbai.

iv.    Various Town Official Language Implementation Committees (TOLIC) convened by other banks awarded our Lucknow, Hyderabad, Patna & Jaipur Zonal Offices for excellent implementation of Official Language.

v.    Bank's E-Magazine ‘Mahabank Samvad Sarita' and Quarterly House Magazine ‘Mahabank Pragati' are being regularly published. As a new initiative Mahabank Samvad Sarita in Braille script is also published for the benefit of visually challenged employees of the Bank.

vi.    Our bank is the convener Bank for Town Official Language Implementation Committee (TOLIC) in Mumbai, Pune, Solapur, Latur & Jalgaon. Meetings of these committees were held regularly during the year and various activities of the committees were organized throughout the year as per schedule.

vii.    “Hindi Karya Diwas” (Hindi Working Day) is being observed by all the branches & offices of the Bank on the third Saturday of every month. All the staff are doing their maximum work in Hindi on this day.

viii.    Hindi version of Bank's new mobile banking platform Maha-Mobile has been made available for the convenience of the customers.

10.    SECURITY

The Bank has put in place a comprehensive Security Policy covering the entire Security arrangements in the Bank. The policy covers the following:

•    Protect the Bank's assets such as cash, gold, documents and valuables at branches, administrative offices, currency chests, data centre, other critical centres and security measures for cash and valuables.

•    Create a secure, safe and conducive environment for, Staff, visitors and customers to conduct smooth and normal banking business.

•    Measures to counter manmade disasters and natural calamities.

During FY 2022-23, proactive steps were taken on the physical security requirements in the Bank after analysis of the threat perception, current crime scenario, crime pattern, modus operandi of bank robberies, breaches of security and fire incidents besides equipping and training the security personnel and other bank staff to counter any eventuality.

11.    PERFORMANCE EVALUATION OF THE DIRECTORS AND THE BOARD:

In terms of Regulation 25 of SEBI LODR, 2015, the performance of the Board as a whole and non-independent directors including Whole Time Directors were evaluated by the Independent Directors in a separate Meeting held on 28^th March, 2023.

Further, the performance evaluation of Whole Time Directors is carried out by Committee of Board for Performance Evaluation on the basis of guidelines prescribed by Government of India. Further, Performance of non-official Directors/ Shareholder Director is done by Board of Directors on annual basis.

12.    DECLARATION BY INDEPENDENT DIRECTORS DURING THE YEAR:

All the Independent Directors of Bank have submitted the declaration confirming that they meet the criteria of independence as provided under Regulation 25 of SEBI (LODR) Regulations, 2015.

13.    BOARD AND ITS SUB-COMMITTEES:

The composition of the Board and its Sub-committees as required to be constituted as per the SEBI (LODR) Regulations, Government of India / Reserve Bank India Guidelines and the meetings held therein are mentioned in the Corporate Governance Report.

14.    SECRETARIAL AUDIT:

Pursuant to Regulation 24A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and SEBI Circular No. CIR/CFD/CMD1 /27/2019 dated February 08, 2019, Bank had appointed M/s. DVD & Associates (proprietor Mr. Devendra V. Deshpande), Practicing Company Secretaries, Pune as a Secretarial Auditor to undertake Secretarial audit of Bank for the financial year 2022-23. The Secretarial Audit Report is annexed to this Report.

Â	Management's representation on observations given by Secretarial Auditor
Â	Sr. No.	Auditor’s Observation	Management Reply
	1	There is no Independent Woman Director on the Board of the Bank as required by SEBI LODR Regulations, 2015.	The composition and functions of Board of Directors of the Bank are governed by the provisions of Banking Companies (Acquisition & Transfer of Undertaking) Act, 1970, Banking Regulation Act 1949 & Nationalized Banks Scheme, 1970, RBI / GOI Guidelines. As per Banking Companies (Acquisition & Transfer of Undertaking) Act, 1970, the power to appoint Directors including Woman Director/ Independent Director except Shareholder Director is vested with the Government of India. The Government of India appoints the director(s) on the Board of the Bank in accordance with the regulatory compliances and other business requirements. As the Bank is a Public Sector Bank established under The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, the SEBI (LODR) Regulations, 2015 are applicable to it to the extent it does not violate the statutes / RBI guidelines / MOF guidelines applicable to it.
	2	Number of Independent Directors was less than 50% of its total strength of Board members as required by SEBI LODR Regulations, 2015

Sr. No.	Auditor’s Observation	Management Reply
3	There was no meeting of the nomination and remuneration committee during the Financial year which is required to be held once in a year as per Regulation 19 (3A) of SEBI LODR Regulations, 2015.	Since there was no agenda for the meeting, therefore, no such meeting held during the Financial Year 2022-23.
4	The bank has not taken any Directors and Officers insurance policy for their independent directors as required by Regulation 25 (10) of SEBI LODR Regulations, 2015.	As the Bank is a Public Sector Bank established under The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, the SEBI (LODR) Regulations, 2015 are applicable to it to the extent it does not violate the statutes / RBI guidelines / MOF guidelines applicable to it.
Â	Â	Overall, Bank is in the process of taking the said insurance.
5	As per the Rule 3 of National Financial Reporting Authority Rules, 2018 every Body Corporate not being a Company should file form NFRA-1 and NFRA-2 the same has not been complied by the Bank	The Bank is in the process of filing the necessary form.

15. DIRECTORS’ RESPONSIBILITY STATEMENT:

The Directors confirm that in the preparation of the annual

accounts for the Financial Year ended March 31,2023:

a)    The applicable accounting standards had been followed along with proper explanation relating to material departures, if any;

b)    The accounting policies framed in accordance with the guidelines of RBI were followed and the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit and loss of the Bank for that period;

c)    The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of applicable laws to the Bank for safeguarding the assets of the Bank and for preventing and detecting fraud and other irregularities;

d)    The directors had prepared the annual accounts on a going concern basis;

e)    The directors had ensured that internal financial controls followed by the Bank are in accordance with guidelines issued by RBI in this regard and that such internal financial controls are adequate and were operating effectively; and

f)    The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

16.    CHANGES IN THE BOARD OF DIRECTORS:

During FY 2022-23, the following changes took place in the Board of Directors:

•    Shri Lalit Kumar Chandel retired from the Board of the Bank w.e.f 15.12.2022 who was appointed as Government of India Nominee Director on the Board of the Bank by the Central Government of India on 17.08.2021.

•    Shri Parshant Kumar Goyal was appointed as Government of India Nominee Director on the Board of the Bank by the Central Government of India w.e.f 15.12.2022 in place of Shri Lalit Kumar Chandel.

17.    DIVIDEND DISTRIBUTION POLICY:

In terms of Clause 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Bank has formed a Dividend Distribution Policy and the same is available on the Bank's website i.e. www.bankofmaharashtra.in.

18.    BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT:

As per the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, business responsibility and sustainability report for the year 2022-23 has been prepared and is available on the Bank's website i.e. www.bankofmaharashtra.in.

19.    ACKNOWLEDGEMENT:

The Board of Directors place on record their appreciation for the contribution made by the outgoing Directors.

The Board of Directors wishes to express sincere gratitude to the Government of India, the Reserve Bank of India, the Securities and Exchange Board of India, Insurance Regulatory and Development Authority, Indian Banks' Association, Stock Exchanges and Depositories for their valuable advice, guidance and support; to the Customers and Stakeholders for their patronage; to the correspondents and associates for their cooperation and to all the members of staff of “Mahabank Family” for their unstinted commitment and contribution to the overall development of the Bank.

For and on behalf of the Board of Directors

Place: Pune    (A.S. RAJEEV)

Date: 24^th April, 2023    Managing Director and CEO

---

Mar 31, 2019

The Directors have pleasure in presenting the Annual Report of the Bank with the audited Balance Sheet, Profit & Loss Account and the Report on Business and Operations for the year ended March 31, 2019.

1. IMPLEMENTATION OF OFFICIAL LANGUAGE POLICY:

During the year 2018-19, the Bank has achieved various remarkable achievements in the field of Official Language implementation:

1. Bank was awarded “Rajbhasha Kirti Puraskar” for better implementation of Rajbhasha Hindi, which is the highest award for Rajbhasha. Shri A. C. Raut, Executive Director, Bank of Maharashtra received this prestigious award at the hands of Hon’ble Vice President of India, Shri M. Venkaiah Naidu in a grand function arranged at Vigyan Bhawan, New Delhi on 14th September, 2018.

2. Bank was awarded prestigious Skoch Order-of-Merit Award on 22 December, 2018 at New Delhi for Better Implementation of Rajbhasha. In Banking Industry, bank is the first to receive this Award for Hindi Implementation.

3. The Town Official Language Implementation Committee, Mumbai has secured Third Prize from the Rajbhasha Vibhag, Ministry of Home Affairs, and Government of India for better implementation of Hindi. Our Bank is the convenor Bank for the committee.

4. Bank was awarded “Vishesh Puraskar” by the Mumbai based prestigious Institution ‘Aashirvad’ for better use of Hindi during the year.

5. Various Town Official Language Implementation Committees convened by other Banks have awarded Kolkata, Raipur, Jaipur and Amaravati Zones for excellent implementation of Official Language.

6. Hindi day function was arranged at Head Office, Pune on 09th October, 2018. Shri A. C. Raut, Executive Director of the Bank presided over the function. Shri Raza Murad, renowned Hindi actor and social worker was the Chief Guest. Shri R. P. Marathe, MD & CEO, Shri R.K. Gupta, Executive Director & Shri Rajkiran Bhoir, General Manager were also present in the function. Winners of the All India Internal Rajbhasha Trophy Scheme of the Bank were awarded during the function.

7. An All India Rajbhasha Seminar was organized in Pune for all the Hindi Officers of the Bank. Shri R. P. Marathe, Managing Director & CEO of the Bank inaugurated the seminar.

8. Monthly Rajbhasha E-Magazine ‘Rajbhasha E-Pragati’ is being regularly published every month. As a new initiative Rajbhasha E-Pragati in Brail script is also published for the benefit of differently abled employees of the Bank.

9. Bank of Maharashtra is the convenor Bank for Town Official Language Implementation Committee (TOLIC) in Mumbai, Pune, Solapur, Latur & Jalgaon. Meetings of these committees were held regularly during the year and various activities of the committees were organized throughout the year as per the schedule.

10. Committee of Parliament on Official Language visited our Delhi Zonal Office, Indore Zonal Office, Mumbai Zonal Office & Rajkot branch, (Ahmedabad Zone) during the year and reviewed Official Language Implementation work of the Bank. The honorable members of the Committee expressed their satisfaction regarding progressive use of Hindi and the implementation of new initiatives by the Bank.

2. SECURITY:

The Bank has put in place a comprehensive Security Policy covering the entire Security arrangements in the Bank. The policy covers the following:-

1. Protect the bank’s assets such as Cash, Gold, Documents and Valuables at branches, Administrative offices, Currency chests, Data Centre, other critical centres and Security measures for Cash and Valuables.

2. Create a secure, safe and conducive environment for Staff, visitors and customers to conduct smooth and normal banking business.

3. Measures to counter manmade disasters and natural calamities.

During the FY 2018-19, proactive steps have been taken on the physical security requirements in the Bank after analysis of the threat perception, current crime scenario, crime pattern, modus operandi of bank robberies, breaches of security and fire incidents besides equipping and training the security personnel and other bank staff to counter any eventuality.

3. SECRETARIAL AUDIT:

Pursuant to Regulation 24A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and SEBI Circular No. CIR/CFD/CMD1/27/2019 dated February 08, 2019, Bank had appointed M/s. Apte Joshi & Associates, Practicing Company Secretaries, Pune as a Secretarial Auditor to undertake Secretarial audit of Bank for the financial year 2018-19. The Secretarial Audit Report is annexed to this Report.

There is no Secretarial audit qualification for the year under review.

4. DIRECTORS’ RESPONSIBILITY STATEMENT:

The Directors confirm that in the preparation of the annual accounts for the year ended 31.03.2019:

0 The applicable accounting standards of the Institute of Chartered Accountants of India, have been followed along with proper explanation relating to material departures, if any;

0 The accounting policies framed in accordance with the guidelines of the Reserve Bank of India, are consistently applied and proper disclosures are made for changes, if any; 0 Reasonable and prudent judgment and estimates were made so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and the profit of the Bank for the year.

0 Proper and sufficient care was taken for maintenance of adequate accounting records in accordance with the provisions of applicable laws governing banks, in India; and

0 The accounts have been prepared on a going concern basis.

5. CHANGES IN THE BOARD OF DIRECTORS:

During the year 2018-19, the following changes took place in the Board of Directors:

0 Shri R. Thamodharan was reappointed as Shareholder Director of Bank w.e.f 30.06.2018.

0 Shri A.S. Rajeev took charge as Managing Director & CEO of the Bank w.e.f 02.12.2018 in place of Shri R.P. Marathe, who completed his term as MD & CEO of Bank on 30.11.2018.

0 Shri Hemant Tamta was appointed as Executive Director of the Bank by the Central Government w.e.f 31.12.2018 in place of Shri R.K. Gupta, who completed his term of Executive Director of Bank on 30.12.2018.

0 Dr. Archana Dholakia was reappointed by Central Government as Director of Bank w.e.f 01.03.2019. She completed her earlier term as Director of Bank on 27.01.2019.

6. BUSINESS RESPONSIBILITY REPORT:

As per the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Business Responsibility Report (BRR) 2018-19 of the Bank has been hosted on the Bank’s website i.e www.bankofmaharashtra.in. Any member interested in obtaining a physical copy of same may write to the Company Secretary of the Bank.

7. ACKNOWLEDGEMENT:

The Board of Directors wishes to express sincere gratitude to Government of India, Reserve Bank of India, Securities and Exchange Board of India, Insurance Regulatory and Development Authority, Indian Banks’ Association, Stock Exchanges and Depositories for their valuable advice and support; to the customers and shareholders for their patronage; to the correspondents and associates for their co-operation and to all the members of staff of “Mahabank Family” for their unstinted commitment and contribution to the overall development of the Bank.

For and on behalf of the Board of Directors

Place : Pune (A.S. RAJEEV)

Date : 29^th April, 2019 Managing Director and CEO

---

Mar 31, 2018

The Directors have pleasure in presenting the Annual Report of the Bank with the audited Balance Sheet, Profit & Loss Account and the Report on Business and Operations for the year ended March 31, 2018.

1. Performance Highlights 2017-18

Your Bank was placed under Prompt Corrective Action (PCA) by RBI in June 2017, in view of its high net NPA. Bank therefor had prepared or Monitorable Action Plan for FY 17-18 to improve its position.

1. Total Business of your Bank stood at Rs.233626 crore as on 31.03.2018 as compared to Rs.240590 crore last year.

2. Total deposit stood at Rs.138981 crore as compared to Rs.139053 crore last year.

3. Average Deposits stood at Rs.134294 crore as on 31.03.2018 as compared to Rs.133392 crore last year, registering a growth of 0.68% over last year.

4. CASA deposit stood at Rs.66345 crore against last year figure of Rs.62419 crore (growth of 6.29%). Total CASA percentage stood at 47.74%.

5. Gross advances of the Bank stood at Rs.94645 crore as on 31.03.2018 in comparison to Rs.101537 crore as on 31.03.2017 as a result of Bank’s policy to focus more on retail advances instead of dependence on big corporate advances.

6. Operating Profit of your Bank reached Rs.2191.42 crore as on 31.03.2018 as compared to Rs.1827.07 crore last year.

7. Business per branch is Rs.126.56 Crore as on 31.03.2018.

8. Business per employee is Rs.18.07 crore as on 31.03.2018.

1.1 Sectoral Deployment of Credit

Particulars	O/s as on 31.03.2018 Rs. crore	Percentage to total O/s	O/s as on 31.03.2017 Rs. crore	Percentage to total O/s
Industry	44671.77	47.20%	44811.65	44.13%
Of which
i. Infrastructure	8927.06	9.43%	9931.29	9.78%
ii. Chemicals, Dyes, Paints etc	1930.20	2.04%	3128.00	3.08%
iii. Petroleum	341.74	0.36%	1018.97	1.00%
iv. Iron and Steel	4699.00	4.96%	4975.65	4.90%
v. NBFCs and Trading	14182.77	14.99%	13784.69	13.58%
vi. Engineering	3246.19	3.43%	3537.38	3.48%
vii. Construction	5.04	0.01%	119.84	0.12%
viii. Other Industries	11339.77	11.98%	8315.83	8.19%
Agriculture	15066.63	15.92%	15491.45	15.26%
MSME	16283.00	17.20%	20419.50	20.11%
Housing	13572.69	14.34%	13595.25	13.39%
Education	995.25	1.05%	891.05	0.88%
Exports	1209.66	1.05%	1212.71	1.19%
Commercial Real estate	3189.00	3.37%	5115.21	5.04%
Gross Advances	94645.00	146.97%	101536.82	144.13%

1.2 Quality and NPA Management

The Bank has set up “Asset Recovery Cells (ARC)”” at all zonal offices to ensure focused efforts for upgradation and NPA recovery. Twelve Asset Recovery Branches (ARBs) have also been set up across the Bank’s Zones for large NPA a/cs more particularly where legal actions are in progress so as to make focused follow up.

The Bank has also set up separate Cells at its Head Office for identification of Wilful Defaulters, increasing recovery in Written Off accounts, gearing up the actions under DRT / SARFAESI Acts.

Bank has been implementing Suo Motu non-discriminatory and non-discretionary One Time Settlement (OTS) Schemes. During 2017-18, the Bank introduced following such OTS schemes:

1) “Ghar Ghar Dastak Yojana” (GGDY) was introduced for Small NPA borrowers up to Rs.10 lakhs.

2) “MahaMukti - 2017-18 (A)” and “MahaMukti - 201718 (B)”: These schemes were introduced for NPAs having ledger balance above Rs.10 lakhs up to Rs.1 crore and ledger balance above Rs.1 crore up to Rs.25 crore respectively.

3) “Mahabank Karjmukti Yojana: an OTS scheme for recovery in Regular Written Off (RWO) a/cs up to Rs 25 lakhs introduced in previous year was continued during 2017-18.

4) CSMSSY-2017: The Government of Maharashtra announced a loan waiver scheme, named as "Chhatrapati Shivaji Maharaj Shetkari Sanman Yojana 2017” (CSMSSY-2017) for farmers in the State of Maharashtra. The Bank introduced a scheme for one time settlement of Specified NPA accounts under CSMSSY - 2017 as proposed by Government of Maharashtra.

Resolution Agents are appointed on selective basis in case of NPA a/cs with dues of Rs.1.00 crore to Rs.10.00 crore; so as to have an early resolution. For increasing recovery in smaller NPA accounts (up to Rs.25 lakhs) the services of Recovery Agents are engaged.

Bank has also made intensive follow up with the defaulting borrowers through visits, letters, notices, Recovery Camps, Lok Adalats, actions under SARFAESI / DRT Act. The Bank has also initiated action under the provisions of the Insolvency & Bankruptcy Code 2016 against various large NPA borrowers.

In accordance with RBI letter DBR No. BP 8756/21.04.048/201718 dated April 02, 2018, the provisioning requirements in respect of NCLT accounts is reduced from 50% of secured portion to 40% of secured portion as of March 31, 2018. The Bank has availed the option of dispensation available and made provision accordingly. The remaining provision of Rs.389.83 crore shall be made in the quarter ending 30.06.2018 in line with RBI Directions.

Position of Non-Performing Assets is as under;

(Rs. in crore)

Particulars	Amt. as on 31.03.18	Amt. as on 31.03.17	Percentage ( /-)
Gross NPA	18433	17189	7.24%
% to Gross advances	19.48%	16.93%	XXX
Net NPA	9641	11230	(14.14)%
% to Net advances	11.24%	11.76%	XXX
Cash Recovery	1960.51	876.42	123.70%

1.3 Foreign Exchange Business

(Rs. in crore)

Particulars	2017-18	2016-17	Percentage ( /-)
Total FEX Business Turnover	589806	598503	-1.45%
Merchant Business Turnover	30687.93	36851.97	-16.72%
Profit in FEX Business	110.16	101.91	8.10%

Bank has 35 “B” Category branches across the country catering to the International business needs of the customers of the Bank apart from TIBB at Mumbai as “A” category branch.

1.4 Investment

The breakup of Investments into SLR & Non-SLR investments is given below:

- The Gross Investments as on 31.03.2018 stood at Rs 44162.86 crore, of which Rs.34469.75 crore are SLR securities and Rs.9693.11 crore are Non-SLR Securities. The excess SLR securities as on 31.03.2018 stood at Rs 7085.16 crore.

- The net investments (net of provisions) stood at Rs.43622.80 crore as on 31.03.2018 as compared to Rs.38590.18 crore as on 31.03.2017. Investments under Held to Maturity (HTM) category consist of 69.82%, while Available for Sale (AFS) comprised of 30.17% of total investment portfolio as of 31.03.2018. The net interest income from investment activity increased to Rs.2962.41 crore from Rs.2829.47 crore during the last year (growth of 4.70%).

- The Non-Performing Investments stood at Rs.738.10 crore as on 31.03.2018.

1.5 Merchant Banking:

The Bank handled 75 issues (previous year 70 issues) of Commercial paper amounting to Rs.36445 crore (previous year Rs.30170 crore) for its clients as an Issuing and Paying Agent (IPA) during the year.

1.6 Borrowings:

The borrowing of the Bank as on 31st March 2018 stood at Rs.4063.71 crore including re-finance as under;

Sr. No.	Particular	Amount as at 31.03.2018	Amount as at 31.03.2017	Percentage ( /-)
1.	Total Borrowing	4063.71	8136.65	(50.06)
2.	Borrowing under CBLO	0.00	0.00
3.	Refinance from:
3.1	NABARD	280.00	420.00	(33.33)
3.2	EXIM BANK	67.57	324.25	(79.16)
3.3	RBI	0.00	0.00	0.00
3.4	NHB	185.26	277.89	(33.33)
3.5	MUDRA	182.53	370.81	(50.78)
3.6	SIDBI	0.00	1500.00	(100.00)
4.	Borrowings in the form of Bonds & debentures capital instruments	3300.00	5225.00	(36.84)
5.	Borrowings outside India	48.31	18.65	159.00
6.	Others	0.05	0.05	0.00

During the FY 2017-18, Bank has redeemed Basel II /Basel III Compliant Bonds for an amount of Rs.1925.00 crore by exercising call option. Bank undertook borrowing as part of its asset liability management.

1.7 Depository Services

- Bank is Depository Participant (DP) of Central Depository Services of India Ltd. (CDSL) since September 1999.

- The Bank has also introduced Basic Services Demat Account Facility (BSDA)

1.8 Bancassurance

- Bank had added two new partners namely M/s Future Generali (Non-Life Insurance Company) and M/s Cigna TTK (Standalone Health Insurance Company) under Bancassurance in the month of Feb.2018. We have added two more partners in life insurance business i.e. M/s Aviva Life Insurance Company and M/s Reliance Nippon Life Insurance Company during FY 2017-18.

- 1241 branches are logged in as of 31.03.2018 for LIC Bancassurance business.

- Bank had created portal for Popularization of Mahaswastya Yojana, all new as well as renewal of cases are done through the portal in T 3 days. Now, the customer having internet banking facility can make the payment online and generate the policy instantaneously. This year, till 31.03.2018, 67 bank branches declared as BIMA Branch.

- During the year 2017-18, 5221 life policies and 148480 Non-Life policies were made.

- The Bank earned a commission of Rs.6.00 crore from life insurance and Rs.9.20 crore from non-life insurance business during the year 2017-18.

1.9 Government Business

- During the year 2017-18, 692312 challans of Direct Taxes and 97263 challans of Indirect taxes were collected by the branches. Our Branches are also collecting other State Govt. taxes including GRAS of Maharashtra State and the total number of Challans collected during the Year is 1074402. Total commission to the tune of Rs.7.20 Crore was received on Tax collection business from Central/State Government in current year compared to Rs.5.64 crores collected in previous year.

- As a service to senior citizens, the Bank is processing and crediting monthly pension payments of more than 110914 Central Government, Defence, Railway and Telecom pensioners at Central Pension Processing Cell (CPPC), Pune. The commission on Government Business (Pension) for the Year 2017-18 is Rs.12.16 crore.

1.10 Income, Expenditure and Profitability

The total income of the Bank stood at Rs.12602 crore in FY 2017-18 as compared to Rs.13570 crore in FY 2016-17 .

The detailed income/ expenditure components are as under:

(Rs. in crore)

Particulars	2017-18	2016-17	Variation (per cent)
Interest / discount on advances / bills	7072.71	8469.96	(16.50)%
Income on investments	2962.41	2829.47	4.70%
Interest on interbank lending & other Interest	1061.30	762.53	39.18%
Total interest income	11096.42	12061.96	(8.00)%
Non-interest income	1506.06	1508.07	(0.13)%
Total Income	12602.48	13570.03	(7.13)%
Interest on deposits	7133.17	8075.59	(11.67)%
Interest on borrowings	11.49	11.61	(1.03)%
Other Interest expenditure	562.02	800.07	(29.75)%
Staff expenses	1618.06	1807.29	(10.47)%
Other Operating expenses	1086.32	1048.40	3.62%

Total Non-interest expenses	2704.38	2855.69	(5.30)%
Total Expenses	10411.06	11742.96	(11.34)%
Operating Profit	2191.42	1827.07	19.94%
Provisions and Contingencies	3337.05	3199.58	4.30%
Net Profit	(1145.65)	(1372.51)	(16.53)%

1.11 Financial Ratios

Particulars	2017-18	2016-17
EPS (Rs.)	(8.98)	(11.75)
Cost to Income Ratio (percent)	55.24	60.98
Return on assets (percent)	(0.73)	(0.86)
Return on equity (per cent)	(42.43)	(24.92)
Book value per share (Rs.)	23.73	46.96
Profit per Branch (Rs. in lakh)	(62.06)	(72.35)
Profit per employee (Rs. in lakh)	(8.86)	(10.58)
Business per Branch (Rs. in crore)	126.56	126.83
Business per employee (Rs. in crore)	18.07	18.54
Interest income as per cent to Average working funds	7.03	7.55
Non-Interest income as per cent to average working funds	0.95	0.94
Net Interest Margin (per cent)	2.32	2.16
Operating Profit as per cent to average working Funds	1.39	1.14
Staff expenses as a percent to average working funds	1.03	1.13
Net worth (Rs. Crore)	6159.92	5486.47
CRAR (%) (Basel II)	11.00	11.18
Of which, Tier I CRAR (%) (Basel II)	9.01	9.01

1.12 Capital from Government of India

The Government of India has infused total additional capital of Rs.3173 crore in two tranches; Rs.650 crore on 29.12.2017 and Rs.2523 crore on 27.03.2018.

1.13 Networth

The Bank’s Net Worth increased from Rs.5486.47 crore as on 31.03.2017 to Rs.6159.92 crore as on 31.03.2018.

1.14 Capital Adequacy Ratio

The Capital Adequacy ratio stood at 11.003 % as on 31.03.2018, against the minimum of 10.875 % (including CCB) prescribed by RBI in terms of Basel III norms. The Common Equity Tier 1 Ratio stood at 8.974 %.

1.15 Dividend : Your Board do not propose any dividend for the FY 2017-18, as the Bank has incurred loss.

2. Resources: Branch network, Human Resources, IT infrastructure, customers responsiveness and others

2 .1 Branch/ATM Network:

As on 31.03.2018, the total branch network comprised of 1846 branches spread across all the States and 4 union territories. The branch network includes specialized branches in the area of Foreign Exchange, Government business, Treasury and International Banking, Industrial Finance, MSME and Hi-tech Agriculture, Pension Payment etc.

Area wise classification of branches as on 31.03.2018 is given in the table below:

Sr. No.	Classification	As on 31.03.2018	As on 31.03.2017
1	Rural	616	618
2	Semi-Urban	427	434
3	Urban	329	343
4	Metro	474	502
	Total	1846	1897

As part of Bank’s endeavor to curtail its operating expenses, Bank has merged 51 branches during the year, which were in close vicinity of each other, ensuring that no discomfort was caused to the customers.

ATM NETWORK

	31.03.2018	31.03.2017
Offsite	559	587
Onsite	1305	1291
Total	1864	1878

2.2 Human Resources Management

The Bank has put in place a comprehensive HRM Policy that provides the road map for acquiring appropriate & need based human resources, its development through training, job enrichment, reward and recognition for better performance, career progression, welfare and retention.

Recruitment: During the year 2017-18 the Bank has recruited employees as under:

333 Officers in Scale I, 6 Security Officers in Scale II, 22 Chartered Accountants in Scale II, 3 Officers-Admin in Scale II, 7 Officers-Admin in Scale III & 1 Scale IV officer in Risk Management Dept. The Bank has also recruited 388 Clerks & 13 Sub-staff.

During the year, 930 employees ceased to be in service on account of retirement, VRS, resignation, termination and death.

Inter scale promotions of officers were carried out during 2017-18. Following number of candidates were promoted.

JMGS-I TO MMGS-II	MMGS-II to MMGS III	MMGS-III TO SMGS- IV	SMGS-IV TO SMGS-V	SMGS-V TO SMGS- VI	SMGS-VI TO TEGS- VII
324	136	53	38	13	5

During the year 2017-18, 89 Substaff were promoted to Clerical cadre and 55 Part Time Sub-staff employees were absorbed in Sub-staff cadre, 196 Clerks were promoted to Scale I Officer.

Cadre wise staff position as of 31.3.2018 with sex ratio is as under:

Category	Male	%	Female	%	Total
Officers	4751	72.89	1767	27.11	6518
Clerks	2986	64.37	1653	35.63	4639
Sub-staff	1586	89.35	189	10.65	1775
Total	9323	72.09	3609	27.91	12932

The top three branches in disbursement and recovery of advances to SC/ST community were awarded Rolling Trophy in name of Bharat Ratna Dr. Babasaheb Ambedkar.

The Bank has healthy industrial relations.

The Bank has been complying with the reservation policy of Govt. of India. Special Cells at Head Office and all Zonal Offices are functioning to monitor the implementation of the reservation policies and to redress grievances of SC/ST/OBC & Physically challenged employees as well as ex-servicemen. The Bank has designated Chief Liaison Officers at Head Office and has set up SC/ST Cells at all Zonal Offices. During the year periodical meetings were held with SC/ST/OBC Employees Association to discuss implementation of reservation policy and other constitutional safe guards and also to facilitate involvement in business growth.

Compassionate Appointments - A Scheme for ‘Compassionate Appointments’ / Payment of Ex-gratia lumpsum amount to / of heirs of employees dying in harness or retiring due to incapacitation framed as per the directives of Government of India, has been implemented. The details of compassionate appointments and payment of Ex-gratia lumpsum amount for the FY 2017-18 is as under:

Compassionate Appointments		Payment of Exgratia
Cadre	No.of employees	No.of employees	Amount paid
Clerk	9	-	-
Substaff	12	3	Rs.15.15 Lacs

The Contributory Group Insurance Mediclaim Policy for all employees including retired employees, has been renewed w.e.f. 1.4.2018 and the Sum insured is upto Rs.10.00 Lacs for existing employees. The details of renewal of policy are as under:

Employees	No.of Employees	Premium paid
Existing	718	100.38 Lacs
Retired	1661	229.25 Lacs
Total	2379	329.63 Lacs

The reimbursement of examination fees & payment of cash incentive / Honorarium in respect of courses from Indian Institute of Banking & Finance, MBA from reputed Institutions & CFA has been widened by adding courses in the list of courses for reimbursement of fees thereby making total 27 courses eligible for reimbursement of examination fees.

A policy for granting special leave and 100% reimbursement of hospitalization expenses to officers when he/she meets with an accident / injury while on duty is in place.

Training Activities:

The Bank has a training system which facilitates attention to regular periodic assessment of skill gaps at various levels in relation to existing and emerging business opportunities. Skill building in credit, Forex, customer relationship management, marketing of products and services, credit monitoring and recovery, risk management, technology based banking, branch management, complying with statutory, legal and policy requirements and preventive vigilance received special attention during the year.

Training programs were also held on thrust areas like financing MSMEs, retail lending, agriculture finance, soft skills and rural development.

Cadre-wise Break up of Employees trained during the period 01.04.2017 to 31.03.2018 are as under-

Cadre	No. of Programmes	Training Days	Employees Trained
Officers	174	677	4852
Clerks	74	242	1637
S/staff	35	81	810
Total	283	1000	7299

2.3 Technology Initiatives

The Year 2017-2018 was a Technology Upscaling year for the Bank. The Bank had taken up & successfully initiated / upscaled various Major IT Projects during 2017-18 which are enumerated as under:

1. Bank has implemented 400 Self Update Pass Book Printer Kiosks & 106 Bunch Note Acceptor Machines at various locations across the Bank. The same shall be continued to ensure fulfilment of customer requirements/satisfaction.

2. CBS Contract has been renewed for a period of 5 years from 01/10/2017 to 30/09/2022 with revamped CBS Front-end and additional components viz. Automated Testing, Batch Job Automation, On-line Training for staffs, Revenue Leakage Monitoring etc.

3. Bank has tied up with BSNL for upgrading the Bandwidth of the existing Leased Lines to 2 Mbps. As on 31/03/2018, Bandwidth of 1329 leased lines is upgraded to 2 Mbps.

4. Bank is actively promoting BHIM Aadhaar Pay payment channel and 28104 Merchants are on-boarded as on 31/03/2018.

5. Centralized e-Surveillance system is implemented at 240 more ATMs taking the total count to 460 ATMs being covered under this system; ensuring safety and security of ATMs & Customers.

6. Integration of SWIFT with CBS System has been done as per RBI Timeline.

7. Bank under special project of DBT (Direct Benefit Transfer) had issued 99,764 Prepaid Cards to Pune Municipal Corporation during Apr-June 2017 Quarter for distribution to students of which 94,510 cards are activated. In respect of Nagpur Municipal Corporation 20,000 cards were issued of which 11,168 cards are activated.

8. Bank has implemented Public Financial Management System (PFMS) which is used by Government Agencies to make payments directly into the recipients Bank Accounts. As on 31/03/2018, Bank had 39395 Accounts under PFMS.

9. ISO 27001:2013 Re-Certification is achieved by the Bank during July 2017, for its 4 IT Divisions, thereby continuing the Quality ISMS (Information Security Management System) in our Bank.

Bank has collaborated with VISA for International Debit Cards and with NPCI for Rupay Debit Cards. EMV Chip Debit Cards are being issued to existing customers in place of Magnetic Stripe Cards as per RBI directives. As on 31/03/2018, 69.44 Lakh Debit Cards were issued, of which 25.40 Lakh are EMV Cards. Customers can now obtain EMV Cards from any Branch of the Bank.

Various facilities are being provided through our Internet Banking platform for facilitating online payment of taxes, utility bill payments, online shopping / e-commerce, railway reservation, LIC premium payment, e-SBTR etc and facility for viewing tax credit statement 26AS and Demat account with the Bank.

Bank has robust Information Security Management System (ISMS) framework in place. Bank has also implemented major security initiatives recommended by Gopalakrishna Committee for internal and external customers.

Bank has in place a captive Security Operations Centre (SOC) for monitoring Critical IT Infrastructure on 24 x 7 basis. As per RBI Directives, the same is being revamped to Cyber Security Operations Center (CSOC), by 31/05/2018.

Centralized Processing Cell - Liabilities (CPC-L), is functioning since September 2014 & all branches of the Bank are now linked to CPC-L.

2.4 Customer Centric Initiatives taken by the Bank

The Bank has pursued high standards of customer service to ensure customer satisfaction throughout the year by implementing all major recommendations of Goiporia Committee, Dr. S.S. Tarapore Committee and Damodaran Committee.

As a member of Banking Codes and Standards Board of India (BCSBI), Bank has adopted Code of Bank’s Commitment to Customers and Bank’s Code of Commitment to MSMEs.

Bank has printed folder called as “My Folder” containing all customer service policies, information on service charges, guidelines on Government Schematic Loans, Ombudsman and BCSBI Codes. The same is printed in Marathi, Hindi and English and supplied to all branches and Zones for making the same available to all customers on demand.

Duly documented policies approved by the Board, on “Deposit”, “Collection of Cheques”, “Redressal of Grievances”, “Compensation” , “Operational Procedure for Settlement of Claims of Deceased Depositors” and Customer Rights Policy are in place.

Customer Service Committees are formed at all branches and their meetings are conducted regularly on monthly basis. The Standing Committee on Customer Service at Head Office and Zonal Level Customer Service Committees at Zones, meet regularly to address and review various customer related matters and to take steps, for an improvement, on an ongoing basis.

The Committee of the Board on Customer Service meets on quarterly basis to monitor the quality of customer service, redressal of customer grievances and to ensure customers satisfaction.

Full-fledged grievances Redressal machinery is in place to respond promptly to customer grievances. The Bank has started internet based mechanism, Standardized Public Grievances Redressal System (SPGRS) for lodging the complaints or to give suggestions / feedback on services by the customers and for providing acknowledgement and status of their feedback / complaints as per the directions of Government of India.

Sr. No.	Particulars	2017-18	2016-17
1	Customer complaints at the beginning of the year	54	73
2	Complaints received during the year	8348	3246
3	Complaints redressed during the year	8014	3265
4	Complaints pending at the end of the year	388	54

2.5 KYC/ AML

Know Your Customer (KYC) norms / Anti Money Laundering (AML) standards / Combating of Financing of Terrorism (CFT) and Obligation of Bank under Prevention of Money Laundering Act (PMLA) 2002.

The Bank has Board approved KYC-AML-CFT Policy in place. The said Policy is the foundation on which the Bank’s implementation of KYC norms, AML standards and CFT measures is based. The KYC compliance entails staff education as well as customer education for which the following measures are taken by the Bank.

A comprehensive list of KYC documents is uploaded on the Bank’s web site for the benefit of customers. Regular training sessions are conducted on KYC-AML-CFT guidelines at the Bank’s training establishments to sensitize the employees.

2.6 Risk Management

The Bank has put in place Risk Management Policies and Strategies to identify, measure, monitor and manage risk efficiently and establish control systems in line with the Bank’s aggregate Risk Appetite. Bank has constituted Risk Management Committee at Board level to monitor the risk at Bank level in accordance with RBI Guidelines. Bank has also constituted sub-committees headed by Top Management of Bank.

The Bank is Compliant to the RBI guidelines on disclosure requirements under Basel III Capital Regulations.

2.7 Brand Image:

Our Bank with a view to develop Brand Image of Bank, publicizes Bank’s various products coupled with Corporate Social Responsibilities.

Bank has extended Donations under its Corporate Social Responsilibilities to National Sports Development Fund (NSDF), Rotary Club Nigdi for the construction of water Tank in Nigade Village, Balewadi Stadium for providing Water Coolers, “Shrutakevali Education Trust” for Bahubali Children’s Hospital, Shravanabelagola, Karnataka, NAAM Foundation famous NGO working on issues like education, infrastructure, employment, food etc.

2.8 Citizen’s Charter:

The Bank has adopted the Charter since 2000-01, which details the duties and responsibilities of the Bank towards its customers. The charter is displayed at all the branches and Bank’s website. Some of the important responsibilities of Branches are;

- All branches of Banks in all parts of the country should provide the following customer services, more actively and vigorously to the members of public;

- Meeting the demands for fresh / good quality notes and coins of all denominations;

- Exchanging soiled notes;

- Accepting coins and notes either for transactions or exchange;

- Separate que for senior citizen.

3. SOCIO/MICRO ECONOMIC DEVELOPMENT.

3.1 Priority Sector Lending

It has been the constant endeavor of the Bank to facilitate equitable and sustainable economic development through timely and hassle-free availability of credit for productive purposes to Small and Marginal Farmers, Micro and Small Enterprises, Retail Traders, Professional and Self Employed, Women Entrepreneurs and entrepreneurs from economically weaker sections.

The outstanding advances under Priority Sector (including investment) as of 31st March 2018, aggregate to Rs.40709 crore constituting 38.63% of the Adjusted Net Bank Credit (ANBC).

3.2 Agriculture

The Bank disbursed Rs.5960 Crore for agriculture and allied activities during the year 2017-18. The total outstanding advances to agriculture sector reached a level of Rs.17199 Crore as on 31.03.2018. Bank focused on growth of investment credit under Agriculture during the year 2017-18 and disbursed Rs.2627 Crore. Bank also entered into strategic tie-ups with Tractor Manufacturers, Micro Irrigation Companies for promoting farm mechanization and micro irrigation activities during the year. Bank has entered into an Agreement for Credit Guarantee with Small Farmers Agri-Business Consortium (SFAC) for financing to Farmer Producer Organizations (FPOs). Bank is successfully implementing farm loan waiver scheme of Govt of Maharashtra. Till 31st March 2018, bank has credited Rs.1070. 93 crore to 1.91 lakh farmers’ loan accounts under the aforesaid scheme.

The Bank undertook awareness/sensitization programmes for all the branches for increasing advances to agriculture by providing hassle free credit to farmers.

3.2.1 Mahabank Kisan Credit Card (MKCC)

This scheme gained popularity especially in rural areas where it is being propagated successfully and vigorously. The Bank has issued total 36495 Kisan Credit Cards to farmers. Credit flow to MKCC beneficiaries has reached to the level of Rs.7440.04 crore as on 31.03.2018.

3.3 Micro, Small and Medium Enterprises (MSME)

MSMEs are recognized as a major growth engine for the Indian economy. They generate opportunities for direct and indirect employment by facilitating use of natural resources and local skills to stem the tide of migration to urban areas and promote low investment enterprises. Finance is made available to viable enterprises at an attractive and low rate of interest. Online enquiry portal is made available on the Bank’s website.

Our Bank has adopted Simplified Loan Application for MSMEs and the same is displayed on the Bank’s website. The Bank has also adopted Bank’s Code of Commitment to Micro and Small Enterprise.

The Bank’s lending to Micro, Small and Medium Enterprises (Priority) is Rs.16283 Crore as at 31.03.2018. Advances to Micro enterprises under priority are 8.68% of ANBC against RBI mandatory target of 7.50% as of March 2018.

For promoting finance under this category, Bank has entered into strategic tie up arrangements with Truck / Vehicle / Passenger car manufacturers. Bank has also entered into MoU with “Bhartiya Yuva Shakti” Trust and “de-Asra” foundation for Credit facilitation and hand holding of the Micro entrepreneurs especially under Women and SC/ST categories. Bank has also partnered with “myloanassochem.com” portal for generating leads and converting them into business by financial assistance to MSMEs.

Centralized Processing Cells have been set up at all Zonal Offices for speedy disposal of MSME proposals.

3.3.1 MUDRA:

With the introduction of Pradhan Mantri MUDRA Yojana (PMMY) which mainly consists of non-farm enterprises in manufacturing, trading and services whose credit needs are below Rs.10.00 lakh. Bank is giving special attention to this segment. Loans given to this segment for income generation are known as MUDRA loans under Pradhan Mantri MUDRA Yojana (PMMY) and are branded accordingly.

Bank sanctioned Rs.2153.10 crore under PMMY against the target of Rs.2325.00 crore as on 31.03.2018. Bank achieved 92.61% of target allotted by Government under PMMY.

Bank has launched MUDRA Card on 16.9.2015 and issued 8621 MUDRA Cards upto 31.03.2018.

3.3.2 Coverage under CGTMSE Scheme

Under Credit Guarantee Fund Scheme for Micro, Small and Medium Enterprises of Government of India credit facilities up to Rs.200.00 lakh are covered, wherein no collateral security and third party guarantees are insisted by the Bank. The Bank has sanctioned loans of Rs.238.04 Crore to 2325 borrowers under this scheme up to March 2018.

3.3.3 Banks exposure to select segments. (Rs. in Crore)

Sr. No.	Sector	As on 31.03.2018	As on 31.03.2017	% increase ( /-)
1	Micro / SHG Finance	151	155	(2.49)
2	Weaker Sector	11324	12190	(7.10)
3	SC/ST beneficiaries	2333	1738	34.23
4	Minority Community	2887	2921	(1.16)

4. IMPORTANT SCHEMES/ PROJECTS OF THE BANK

4.1. Credit Flow to Retail Sector

The Bank is providing retail loans for salaried persons, professionals, businessmen and pensioners for purchase of house properties/ plots, repair/ renovation of house, purchase of consumer durables, two/four wheeler vehicles, education and loan for other personal needs. The retail loan portfolio of the Bank is Rs.16549 crore.

(Rs. in Crore)
SN	Scheme	Brief Description	Portfolio as of Mar’18	NPA %
1	Maha Super Housing Loan Scheme	Housing Sector being the thrust area, Bank has various Housing Loan schemes in place to meet the needs of all segments. Bank offers housing loan for “purchase / construction of new / existing house / flat, repairs / renovation / alteration of existing house / flat, purchase of plot and construction thereon”	13573	3.59
2	Maha Super Car Loan Scheme and Mahabank vehicle Loan scheme	Bank has launched scheme for purchase of New four Wheeler i.e. Car, Jeep, Multi Utility Vehicles (MUVs), Small Utility Vehicles (SUVs) etc. for personal use.(i.e. not for hiring/ ferrying passengers) for individuals (18 years and above).	1068	3.15
3	Model Education Loan Scheme	Bank is implementing Model Education Loan Scheme as per IBA guidelines and provides hassle free Education loan to all meritorious and deserving Students (Indian National) for pursuing higher studies /education in India and abroad	995	8.91
4	Mahabank Top up Loan Scheme	In order to extend additional credit support to existing housing loan borrowers as well as takeover of existing housing loan of other banks with additional facility of Top-up Loan, Bank has launched “Mahabank Top Up loan Scheme”. Under this scheme credit is extended for repair / renovation / furnishing of house, children’s education, Marriage of Children, Medical treatment, buying a vehicle or hi-tech gadgets etc.	132	1.27

5	Mahabank Gold Loan Scheme	With a view to tap the potential of gold loans as a lucrative asset and to cater to the needs of meeting other personal expenses, whatsoever which include personal expenditure of varied needs like marriage, higher education, medical emergencies, business travel etc, Bank has launched a retail loan product as “Mahabank Gold Loan Scheme” w.e.f. 26.09.2014.	103	2.49
6	Mahabank Aadhar Loan Scheme	To cater to the needs of our existing pension account holders to meet their personal expenses, pilgrimage, medical, domestic needs etc. Bank has re-launched “Mahabank Aadhar Loan Scheme”.	407	0.95

4.2. Centralized Processing of loans

Bank has established Centralized Processing Cells for retail / commercial advances at all its 30 Zones for hassle free processing and sanctioning loans with aim to improve turnaround time.

4.3 Door Step Banking Services

Bank has introduced Door Step Banking Services for its High Networth Customers and the services include Corporate and Retail Cash pickup and delivery, Cheque Collection Services, at Client’s Doorstep.

4.4 BOM SBI International Credit Card

- The BOM-SBI card base is 50064.

- The commission received from SBI Card is Rs.75.00 Lakhs during the year 2017-18.

4.5 ALTERNATE DELIVERY CHANNELS

4.5.1 INTERNET /SMS/Phone Banking

In terms of transactions, there was an increase of 28% in Internet Banking, 31% in Phone Banking and 33% in SMS banking over the previous year.

With continuous follow up and increase in net security through the Mahasecure for IBN users, substantial rise in users/online transactions is expected.

4.5.2 MOBILE BANKING

- Maha Mobile functionality has been customized and simplified for increasing the enrolments.

- A user manual on Internet Banking & New Maha Mobile functionality is sent to field staff for ready reference & marketing of the technology based products.

4.6 Tie Ups

4.6.1 Payment Gateway Services:

- Presently, Bank is providing the facility of Payment Gateway to all the customers through online aggregators as under:

Sr	Particular	Sr	Particular
1	M/s Atom Technologies	7	M/s CC Avenues
2	M/s BILL DESK	8	M/s Citrus Payment
			Solutions Pvt Ltd

3	M/s EBS solutions limited	9	M/s PayTm
4	M/s Ibibo i.e. PAYU	10	M/s Techprocess Payment Solutions
5	M/s TimesofMoney Limited	11	M/s SBI e pay
6	M/s Airpay

5. CORPORATE SOCIAL RESPONSIBILITY

The Rural Development Centers at Hadapsar- Pune and Bhigwan in Pune District of Maharashtra have been undertaking various rural developmental activities for the benefit of farmers’ viz. Vermi compost, Re-development of Saline Soils, Soil Testing etc. Bank has established Soil Testing Lab (STL) through MARDEF Trust at RDC Bhigwan. The Soil Testing Laboratory analyzed 5506 Soil and Water samples in the year 2017-18 and accordingly counseling was done. Farmers from the districts of Pune, Ahmednagar, Solapur and Satara are taking benefit of the lab.

A Trust viz. Mahabank Agricultural Research and Rural Development Foundation (MARDEF) established by the Bank, undertakes various projects and village improvement programmes. MARDEF is imparting training to farmers on various subjects in Agriculture. Trust has conducted 156 training programmes for farmers at RDC Bhigwan and Hadapsar, which has benefited 10753 farmers from April 2017 to March, 2018.

The Bank has established Seven Mahabank Self Employment Training Institutes (MSETI) for providing training to rural youth and women to enable them to acquire skills for self-employment through small business enterprises. The Institute has seven centers located at Pune, Nagpur, Aurangabad, Amravati Jalna, Thane and Nasik. The Institute has so far conducted 1203 training batches & imparted training to 30307 educated unemployed youths. The settlement rate is 70%.

Gramin Mahila Va Balak Vikas Mandal (GMVBVM), an NGO formed by Bank of Maharashtra and National Institute of Bank Management is actively involved in formation, nurturing, training and ensuring linkage of SHGs to Bank Credit.

The Bank has opened Financial Literacy and Credit Counselling Centers (FLCC) in Seven Lead Districts namely Pune, Nasik, Aurangabad, Satara, Jalna,Thane and Palghar for creating awareness about banking schemes. FLCCs have contacted 77141 beneficiaries during FY 2017-18.

Rural Self Employment Training Institutes (RSETIs) have conducted 198 training batches and trained 5061 candidates during FY 2017-18.

6. LEAD BANK SCHEME

6.1 Lead Bank Scheme

The Bank has Lead Bank responsibility in seven districts of Maharashtra State viz. Aurangabad, Jalna, Nasik, Palghar, Pune, Satara and Thane. Every year district credit plans for the districts are prepared and implemented with the cooperation of other banks as well as in coordination with District Collectors of respective Districts.

6.2 State Level Bankers’ Committee

The Bank is the Convenor of State Level bankers’ Committee (SLBC) for the State of Maharashtra and prepares State Annual Credit Plan. The Priority Sector plan for the year 2017-18 was for Rs.2,90,829/- crore which is one of the highest in the country. The same was approved in a special meeting held under the Chairmanship of Hon’ble Chief Minister of Maharashtra. SLBC also ensures holding of quarterly meetings regularly to oversee the implementation of State Annual Credit Plans, Priority Sector lending and Govt. sponsored schemes in the State. Apart from regular SLBC meetings, various other meetings are also organized by SLBC to coordinate between various member Banks, State Government, Government Agencies, Reserve Bank of India, NABARD and the Central Government. SLBC coordinates a network of more than 15,400 bank branches in the state.

SLBC has always been very proactive in the event of natural calamities if any, by issuing necessary guidelines in respect of relief measures, organizing special meetings and guiding the members whenever necessary.

As SLBC convener, Bank of Maharashtra coordinated implementation of Pradhan Mantri Jan Dhan Yojana (PMJDY) in the State of Maharashtra. A total of 221 lakh accounts were opened in the State. The State has already been declared as saturated for the purpose of opening of accounts. However, the process of opening of accounts is continued. SLBC also coordinates implementation of other Social Security schemes of the Central Government in the State.

S L B C Maharashtra has received award for highest Adhar seeding of PMJDY accounts from Department of Financial Services, MOF, New Delhi.

6.3. FINANCIAL INCLUSION / PMJDY:

Scheme	Particulars	2017-18	2016-17
FI Plan	No of Transactions by BCA (in lakhs)	110.74	109.75
	Amount of transactions (Rs. in crore)	5764.23	4702.81
PMJDY	No. of PMJDY accounts (in lakhs)	51.57	42.28
	Of Which Aadhaar Seeded	42.57	33.18
	% of Aadhaar Seeding	82.55%	78.48
	Of Which Mobile Seeding	38.97	32.16
	% of Mobile Seeding	75.57%	76.06
	Balance in PMJDY A/c (in crore)	1148.93	932.05
	Average Balance per account actual	2228	2205
	Zero Balance PMJDY Accounts	16.02	16.34
BSBD	Total BSBD Accounts	79.60	71.28
Accounts	O/S Balance in BSBD A/c (in crore)	1687.18	1410.85
	Average balance per account (actual)	2120	1979
	Commission Paid for BC Services (in Crore)	25.86	23.07

Bank has a full-fledged call centre with toll free number 1800-102-2636 for redressal of PMJDY grievances.

The Financial Literacy Material has been prepared in vernacular languages and supplied to all Branches / Bank Mitrs for supplying the same to accountholders during FLC camps.

Financial Literacy camps are organized different schools in districts of Maharashtra. All skilling centers/ITIs are mapped under financial literacy project

Bank has been awarded for excellent performance in the field of financial inclusion by DFS, MOF, GOI and from prestigious institutes like IBA and Economic Times.

7. SUBSIDIARIES/JOINT VENTURES AND SPONSORED INSTITUTIONS

7.1 Performance of Regional Rural Bank

Maharashtra Gramin Bank (MGB) is a Regional Rural Bank sponsored by the Bank, having its Head Office at Aurangabad, Maharashtra State. Total no of branches as on 31.3.2018 stood at 409 in its area of operation covering 17 out of 36 districts of Maharashtra State.

All 409 branches and controlling offices are now under CBS. MGB opened 1 new branch during the year 2017-18.

Performance highlights are as under:

- Maharashtra Gramin Bank has achieved total business of Rs.13047.92 crore.

- Maharashtra Gramin Bank recorded Oprating Profit of Rs.227.29 crore and Net Profit of Rs.131.27 crore.

- Maharashtra Gramin Bank has achieved most of the target under MoU DAP given by sponsor Bank for the financial year 2017-18 The major key performance parameters are as under:

(Amount in Crore)

Sr	Performance Parameter	Target FY 2017-18	Actual as on 31.03.2018
1	Growth in Total Deposit (%)	14.63	18.07
2	Cost of Deposit (%)	5.49	5.03
3	Cost of Funds	5.73	5.20
4	Operating Profit	153.00	227.29
5	Net Profit	58.00	131.27
6	Non interest income	55.00	92.22
7	Operating Profit per employee	0.10	0.15
8	Operating Profit per Branch	0.37	0.56
9	Net Profit per employee	0.04	0.09
10	Net profit per branch	0.14	0.32
11	Cost to Income Ratio	56	44
12	Net Interest Margin	3.51	3.74
13	Closing NPA	390.00	319.89
14	Recovery in Write off	0.67	3.37

Under Pradhan Mantri Jan Dhan Yojana, surveys of all allotted 898 SSAs and 80 wards were conducted for identification of households having no bank account. The Bank has covered all allotted SSAs by engaging BCAs. Total 9.38 lakh PMJDY accounts have been opened till 31.03.2018 and 7.98 lakh RuPay ATM debit cards have been issued to PMJDY account holders. Maharashtra Gramin Bank has actively participated in the PMJJBY, PMSBY, APY and PMMY schemes.

7.2 Performance of METCO

Maharashtra Executor & Trustee Company Pvt. Ltd. (METCO), the 100% subsidiary of Bank of Maharashtra was established in 1946 with an aim to provide services auxiliary to banking such as:

- Consultation, Drafting & Execution of will

- Consultation, Drafting and Management of Private Trusts / Public Trusts

- Management of investments & house properties as attorney

- Guardianship of minor’s property

- Consultation for sale/purchase of property

- Filing of I-Tax Returns for individuals

The Company is located at Pune having its branch units at Pune, Vashi-Mumbai, Thane and Nagpur. It is managing about 1090 Public & Private Trusts. During the year, additional 32 Wills were added making total 1151 Will in its custody for execution.

At present, the Company manages properties both movable and immovable of 71 clients under the Power of Attorney. The Company also acts as the Trustees in respect of 101 policies under Married Women’s Property Act and as Court appointed Guardian of minor’s property in 3 cases. The net profit of METCO for F.Y. 2017-18 is Rs.76.58 lakh.

8. IMPLEMENTION OF OFFICIAL LANGUAGE POLICY

During the year 2017-18, the Bank has achieved various remarkable achievements in the field of Official Language implementation:

The Town Official Language Implementation Committee, Mumbai has secured Third Prize from the Rajbhasha Vibhag, Ministry of Home Affairs, Government of India for better implementation of Hindi at the hands of Hon. Governor, Maharashtra State in a grand function held at Mumbai. Our Bank is the convenor Bank for the committee.

Our Bank was awarded Second Prize by the Mumbai based prestigious Institution ‘Aashirvad’ for better use of Hindi during the year.

Hindi day function was arranged at Head Office, Pune on 20th September 2017. Shri R. P. Marathe, MD & CEO of the Bank presided over the function. Shri Leeladhar Mandloi, renowned Poet and Director of Bharatiya Jnanpith was the Chief Guest. Shri R. K. Gupta, Executive Director & Shri M. C. Kulkarni, General Manager were also present in the function. Winners of the All India Internal Rajbhasha Trophy Scheme of the Bank were awarded during the function.

An All India Rajbhasha Seminar was organized in Pune for all the Hindi Officers of the Bank. Shri R. P. Marathe, Managing Director & CEO of the Bank inaugurated the seminar. Shri Rajkiran Bhoir, General Manager, HRM & Rajbhasha reviewed the performance and guided all the participants. A special issue on Rajbhasha of House magazine “Mahabank Pragati” was released in the seminar at the hands of Hon’ble MD & CEO Shri R. P. Marathe.

Monthly Rajbhasha E-Magazine ‘Rajbhasha E-Pragati’ is being regularly published every month. As a new initiative Rajbhasha E-Pragati in Brail script is also published for the benefit of differently able employees of the Bank.

Bank of Maharashtra is the convenor Bank for Town Official Language Implementation Committee (TOLIC) in Mumbai, Pune, Solapur, Latur & Jalgaon. Meetings of these committees were held regularly during the year and various activities of the committees were organized throughout the year as per the schedule.

Committee of Parliament on Official Language visited our Noida Branch, Faridabad Branch, Jodhpur Branch and Delhi Zonal Office during the year and reviewed Official Language Implementation work of the Bank. The honorable members of the Committee expressed their satisfaction regarding progressive use of Hindi and the implementation of new initiatives by the Bank.

Our bank was awarded First Prize by Town official Language Implementation Committee, Patna, First Prize by Town official Language Implementation Committee, Kota, First Prize by Town official Language Implementation Committee, Amravati, Third Prize by Town official Language Implementation Committee, Ahmedabad and Third Prize by Town official Language Implementation Committee, Jaipur for better use of Hindi during the year.

9. SECURITY.

Proactive steps were taken in view of the security requirements at the branches after analysis of the threat perception, current crime scenario, crime pattern, modus operandi of Bank robberies, the breaches of security and fire incidents besides equipping and training the security personnel and other bank staff to counter any such eventuality.

10. DIRECTORS’ RESPONSIBILITY STATEMENT

The Directors confirm that in the preparation of the annual accounts for the year ended 31.03.2018:

- The applicable accounting standards of the Institute of Chartered Accountants of India, have been followed along with proper explanation relating to material departures, if any;

- The accounting policies framed in accordance with the guidelines of the Reserve Bank of India, are consistently applied and proper disclosures are made for changes, if any;

- Reasonable and prudent judgment and estimates were made so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and profit of the Bank for the year.

- Proper and sufficient care was taken for maintenance of adequate accounting records in accordance with the provisions of applicable laws governing banks, in India; and

- The accounts have been prepared on a going concern basis.

11. CHANGES IN THE BOARD OF DIRECTORS

During the year 2017-18, the following changes took place in the Board of Directors:

- Smt. Vandita Kaul was appointed as Director of the Bank by the Government of India w.e.f 11.05.2017 in place of Shri Ateesh singh.

- Shri Premchandra Amolakchand Sethi, ceased to be the Shareholder Director of the Bank w.e.f 27.06.2017 on completion of his tenure of three years.

12. BUSINESS RESPONSIBILITY REPORT

As per the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Business Responsibility Report (BRR) 2017-18 of the Bank has been hosted on the Bank’s website i.e www.bankofmaharashtra.in. Any member interested in obtaining a physical copy of the same may write to the Company Secretary of the Bank.

13. ACKNOWLEDGEMENT

The Board of Directors wishes to express sincere gratitude to the Government of India, the Reserve Bank of India, the Securities and Exchange Board of India, Insurance Regulatory and Development Authority, Indian Banks’ Association and Stock Exchanges and CDSL for their valuable advice and support; to the customers and shareholders for their patronage; to the correspondents and associates for their co-operation and to all the members of staff of “Mahabank Family” for their unstinted commitment and contribution to the overall development of the Bank.

For and on behalf of the Board of Directors

Place : Pune (R. P. Marathe)

Date : 04^th May, 2018 Managing Director and CEO

---

Mar 31, 2017

The Directors have pleasure in presenting the Annual Report of the Bank with the audited Balance Sheet, Profit & Loss Account and the Report on Business and Operations for the year ended March 31, 2017.

1. MANAGEMENT DISCUSSION AND ANALYSIS

1.1) Economic and Banking Scenario 2016-17

The global economy was marked with subdued growth with low commodity prices and inflation rates for the major part of the year. However Post U.S. election, expectations of loose fiscal policy in the United States have pushed the dollar into a strong position and higher U.S. Treasury interest rates, thereby giving momentum to the yields across the world as well.

Indian growth story remained robust despite the demonetization drive in quarter 3 of the FY 16-17. Central Statistics Office has estimated the GDP to grow at 7.1% for 2016-17, on an annual basis.

The government''s final consumption expenditure remained the major driver of the growth in FY17, with inflation remaining under control for most part of the year on account of low commodity prices. Investments and exports however remained subdued during the year. Agriculture is likely to register robust growth for the 2016-17 by 4.4% against previous year''s 0.8% (GVA -CSO) backed by good monsoon during the year.

A major drive was undertaken for the revival of banking sector in 2016-17 including fresh issue of licenses for setting up small banks and payment banks.

1.2) Outlook for 2017-18

World growth is expected to rise from 3.1 percent in 2016 to 3.5 percent in 2017 and 3.6 percent in 2018(WE0, April 2017) on account of stronger activity and robust global demand

On the domestic front, GDP growth is expected to rebound to 7.2% in 2018 and 7.7% in 2019 (IMF), with inflation expected to be around 5 per cent. Revival of subdued manufacturing and exports would remain the major concerns during FY18. However demonetization and lower borrowing costs are expected to revue the private consumption expenditure.

The various proposals in the Union Budget 2017-18 with regards to stepping up of capital expenditure; boosting the rural economy and affordable housing, are expected to be growth stimulating. Replacement of the existing multiple indirect taxes with uniform goods and service tax (GST) across India with effect from July 1, 2017, is set to give a major boost to India''s growth and competitiveness.

Abolition of the Foreign Investment Promotion Board (FIPB) and reforms in FDI policy have been taken to attract higher foreign direct investment (FDI).The strong pace of expansion in global trade and output are expected to ease the external demand constraint on domestic growth prospects

Banking sector is also expected to be benefitted by the passing of the Bankruptcy Law passed for taking remedial action against defaulters

2. Performance Highlights 2016-17

1. Total Business of your Bank stood at Rs. 240590 crore as on 31.03.2017 as compared to Rs. 250230 crore last year.

2. Total deposit stood at Rs. 139053 crore as on 31.03.2017 as compared to Rs. 138990 crore last year.

3. Average Deposits stood at Rs. 133392 crore as on 31.03.2017 as compared to Rs. 124788 crore last year, registering a growth of 6.89% over last year.

4. CASA deposit stood at Rs. 62419 crore against last year figure of Rs. 50967 crore (Registering growth of 22.47%). Total CASA percentage stood at 44.89%.

5. Gross advances of the Bank stood at Rs. 101537 crore as on 31.03.2017 in comparison to Rs.111240 crore as on 31.03.2016

6. Operating Profit stood at Rs 1827.07 crore as on

31.03.2017 as compared to Rs. 2345.18 crore last year

7. Business per branch is Rs 126.83 Crore as on 31.03.2017.

8. Business per employee is Rs 18.54 Crore as on 31.03.2017

2.1 Sect oral Deployment of Credit

While financing to various segments of the economy, the Bank has endeavored to maintain a diversified credit portfolio, with a view to ensuring credit dispersion across sectors. The Bank has continued its efforts to support core, manufacturing and priority sectors as well as infrastructure projects, which serve to drive economic growth. This focus of the Bank will continue in future, in line with the national economic growth priorities.

Industry wise credit deployment as on 31.03.2017 is as under:

Sr. No.	Percentage to total O/s	O/s as on 31.03.2017	Percentage to total O/s	O/s as on 31.03.2016	Percentage to total O/s
1	Industry	44811.65	44.13	60953.31	54.79
	Of which
	[Infrastructure	9931.29	9.78	13055.62	11.74
	ii. Chemicals, Dyes, Paints etc	3128.00	3.08	3202.56	2.88
	iii. Petroleum	1018.97	1.00	2199.72	1.98
	iv. Basic Metal and Metal Product	4975.65	4.90	6318.93	5.68
	v. NBFCs and Trading	13784.69	13.58	17258.56	15.50
	vi. Engineering	3537.38	3.48	3649.50	3.28
	vii. Construction	119.84	0.12	3.49	0.00
	viii. Other Industries	8315.83	8.19	10164.32	9.14
2	Agriculture	15491.45	15.26	14851.17	13.35
3	MSME	20419.50	20.11	22143.75	19.91
4	Housing	13595.25	13.39	10550.01	9.48
5	Education	891.05	0.88	804.06	0.72
6	Exports	1212.71	1.19	1226.61	1.10
7	Commercial Real estate	5115.21	5.04	5811.72	5.22
	Gross Advances	101536.82		111240.28

2.2 Quality and NPA Management

The Bank has set up “Asset Recovery Cells(ARC)” at all Zonal offices to ensure focused efforts for up gradation and NPA recovery

The Bank has also set up twelve Asset Recovery Branches (ARBs) across its Zones for large NPA a/cs more particularly where legal actions are in progress so as to make focused follow up of large NPAs

Bank has been implementing Suo Motu non-discriminatory and non-discretionary One Time Settlement (OTS) Schemes. During 2016-17 such scheme i.e. “Mahabank Rahat Yojana” was introduced for NPAs with Ledger Balance up to Rs.25.00 lakhs. Sanction letters pre-approved by Head Office were sent to the eligible borrowers. Additional relief was given to drought affected borrowers with balance up to Rs. 10.00 Lakhs.

During the year 2016-17 another special Suo Motu OTS Scheme (Viz. “Mahabank Karimukti Yojana”) was introduced for recovery in Regular Written Off (RWO) a/cs up to Rs 25 lakhs.

In case of NPA a/cs with dues of Rs.1.00 crore to Rs.10.00 crore; Resolution Agents are appointed on selective basis so as to have an early resolution.

Recovery in smaller NPA accounts (up to Rs.25 lakhs) the services of Recovery Agents are engaged.

Bank has also made intensive follow up with the defaulting borrowers through visits, letters, notices, Recovery Camps, Lok Adalats, actions under SARFAESI / DRT Act.

Position of Non-Performing Assets is as under;

Particulars	Amt. as on 31.03.17	Amt. as on 31.03.16	Percentage of ( /-)
Gross NPA	17188.72	10385.85	65.50
% to advances	16.93	9.34	XX
Net NPA	11229.56	6832.03	64.37
% to advances	11.76	6.35	XX
Cash Recovery	876.42	772.82	12.99

2.3 Foreign Exchange Business

Particulars	2016-17	2015-16	Percentage of ( /-)
Total FEX Business Turnover	598503	595233	0.55
Merchant Business Turnover	36852	29562	24.66
Profit in FEX Business	101.91	77.83	30.93

The International Division has given more thrust on Merchant Business (high yielding Exchange Profit) resulting into growth of 24.66%. in turnover and 30.93% in profit. 37 B Category branches across the country cater to the international business needs of the customers of the Bank. Apart from TIBB at Mumbai as “A” category. The Bank has also NRI Cell to cater the specific needs of NRI clients.

2.4 Investment

The breakup of Investments into SLR & Non-SLR investments is given below:

- The Gross Investments as on 31.03.2017 stood at Rs 38841.56 crore, of which Rs 31613.02 crore are SLR securities and Rs 7228.54 crore are Non-SLR Securities. The excess SLR securities as on 31.03.2017 stood at Rs 1855.01 crore.

- The net investments (net of provisions) stood at Rs 38590.18 crore as on 31.03.2017 as compared to Rs 36230.87 crore as on 31.03.2016. Investments under Held to Maturity (MTM) category consist of 77.66%, while Available for Sale (AFS) comprised of 22.34% of total investment portfolio as of 31.03.2017. The net interest income from investment activity increased to Rs 2829.47 crore from Rs 2735.20 crore during the last year (growth of 3.45%).

- The Non-Performing Investments stood at Rs 655.45 crore as on 31.03.2017.

2.5 Merchant Banking:

The Bank handled 70 issues (previous year 126 issues) of Commercial paper amounting to Rs 30170 crore (previous year Rs 54060 crore) for its clients as an Issuing and Paying Agent (IPA) during the year.

2.6 Borrowings:

The borrowing of the Bank as on 31st March 2017 stood at Rs 8136.65 crore including re-finance as under;

Particular	Amount as at 31.03.2017	Amount as at 31.03.2016	Percentage of ( /-)
Total Borrowing	8136.65	9228.10	(0.12)
Borrowing - CBLO	0	74.54	(1.00)
Of which Refinance from	2892.95	4046.17	(0.29)
NABARD	420	893.34	(0.53)
EXIM BANK	324.25	331.27	(0.02)
RBI	0	500	(1.00)
NHB Refinance	277.89	370.52	(0.25)
Mudra Refinance	370.81	370.81	0.00
SIDBI	1500	1580.23	(0.05)
Borrowings in the form of bonds & debentures capital instruments	5225	5100	0.02
Borrowings outside India	18.65	7.34	1.54
Others	0.05	0.05	0.00

The Bank does avail refinance depending upon its liquidity position, deployment of funds and also cost of such refinance despite its eligibility to avail refinance at higher level.

2.7 Depository Services

- Bank is Depository Participant (DP) of Central Depository Services of India Ltd. (CDSL) since September 1999.

- The Bank has also introduced Basic Services Demat Account Facility (BSDA)

2.8 Banc assurance

- Bank had added two new partners namely M/s Future Generali (Non-Life Insurance Company) and M/s Cigna TTK (Standalone Health Insurance Company) under Banc assurance in the month of Feb.2017.

- Insurance for all the securities charged to the Bank may be done invariably under Banc assurance arrangement with UII Co. Ltd. and M/s Future Generali.

- 1241 branches are logged in as of 31.03.2017 for LIC Banc assurance business.

- We had created portal for Popularization of Mahaswastya Yojana, All new as well as renewal of cases are done through the portal in T 3 days. Now, the customer having internet banking facility can make the payment online and generate the policy instantaneous. This year, till 31.03.2017, 79 bank branches declared as BIMA Branch.

- During the year 2016-17, 6993 life policies and 102752 Non-Life policies were made.

- The Bank earned a commission of Rs 6.03 crore from life insurance and Rs 4.94 crore for non-life insurance business during the year 2016-17.

2.9 Government Business

- During the year 2016-17, 746218 challans of Direct Taxes and 178751 challans of Indirect taxes were collected by the branches. Our Branches are also collecting other state Govt. taxes including GRAS of Maharashtra State and the total number of Challans collected during the Year is 1189393. Total commission to the tune of Rs 5.64 Cr was received on Tax collection business from Central Government.

- The Bank is processing and crediting monthly pension payments of more than 1,14,886 Central Government, Defense, Railway and Telecom pensioners at Central Pension Processing Cell (CPPC), Pune. The commission on Government Business (Pension) for the Year 2016-17 is Rs. 13.58 Cr.

2.10 Income, Expenditure and Profitability

The total income of the Bank decline from Rs 14072.27 crore in FY 2015-16 to Rs. 13570.03 crore in FY 2016-17

Particulars	2016-17	2016-16	Variation (per cent)
Interest / discount on advances / bills	8469.96	9934.83	(14.74)
Income on investments	2829.47	2735.20	3.45
Interest on interbank lending & other Interest	762.53	382.95	99.12
Total interest income	12061.96	13062.98	(7.59)
Non-interest income	1508.07	1019.29	47.95
Total Income	13670.03	14072.27	(3.57)
Interest on deposits	8075.59	8421.88	(4.11)
Interest on borrowings	11.61	54.88	(78.84)
Other Interest expenditure	800.07	697.52	14.70
Staff expenses	1807.29	1540.98	17.28
Other Operating expenses	1048.40	1011.83	3.61
Total Non-interest expenses	2866.69	2662.81	11.86
Total Operating Expenses	11742.96	11727.10	0.14
Operating Profit	1827.07	2345.18	(22.09)
Provisions and Contingencies	3199.58	2244.49	42.55
Net Profit	(1372.51)	100.69	(1463.10)

2.11 Financial Ratios

Particulars	2016-17	2016-16
EPS (Rs)	(11.75)	0.91
Cost to Income Ratio (percent)	60.98	52.12
Return on assets (percent)	(0.86)	0.07
Return on equity (per cent)	(24.92)	1.39
Book value per share (Rs)	46.96	63.36
Profit per Branch (Rs in lakh)	(72.35)	5.31
Profit per employee (Rs in lakh)	(10.58)	0.73
Business per Branch (Rs in crore)	126.83	132.05
Business per employee (Rs in crore)	18.54	18.18
Interest income as per cent to Average working funds	7.55	8.71
Non-Interest income as per cent to average working funds	0.94	0.68
Net Interest Margin (per cent)	1.99	2.59

Operating Profit as per cent to average working Funds	1.14	1.56
Staff expenses as a percent to average working funds	1.13	1.03
Dividend (per cent)	0	0
Net worth (Rs Crore)	5486.47	7403.05
CRAR (%) (Basel III)	11.18	11.20
Of which, Tier I (%)	9.01	9.02
CET 1	7.28	7.88

2.12 Capital from Government of India

During the March 2017 quarter, Government of India vide its letter no. 7/38/2014-BOA dated 16.03.2017 infused Rs.300.00 crore by way of preferential allotment of equity shares and the amount was maintained under Share application money pending for allotment, till the allotment of equity shares done. However, RBI has allowed to treat share application money pending for allotment as CET1 capital for computation of CRAR.

2.13 Net worth

The Bank''s Net Worth stood at Rs.5486.47 crore as on 31.03.2017 as against Rs 7403.05 crore as on 31.03.2016.

2.14 Capital Adequacy Ratio

The Capital Adequacy ratio stood at 11.18% as on 31.03.2017, against the minimum of 10.25% (including CCB) prescribed by RBI in terms of Basel III norms. The Common Equity Tier 1 Ratio (including CCB) stood at 7.28%

2.15 Dividend : Your Directors do not propose any dividend for the FY 2016-17, as the Bank has incurred loss.

3 .1 Branch/ATM Network:

As on 31.03.2017, the total branch network comprised of 1897 branches spread across all the States and 4 union territories. The branch network includes specialized branches in the area of foreign exchange, Government business, Treasury and International Banking, Industrial Finance, Small Scale Industry and Hi-tech agriculture, Pension Payment, Self Help Groups etc.

Area wise classification of branches as on 31.03.2017 is given in the table below:

Sr. No.	Classification	As on 31.03.2016	As on 31.03.2017
1	Rural	658	618
2	Semi-Urban	434	434
3	Urban	366	343
4	Metro	437	502
	Total	1895	1897

# 36 Branches like Service /Retail Asset/Recovery Br''s are converted as a “Back Office” as per RBI Guidelines on 01.06.2014.

ATM NETWORK

	31.03.2016	31.03.2017
Offsite	577	587
Onsite	1284	1291
Total	1861	1878

3.2 Human Resources Management

The Bank has put in place a comprehensive HRM Policy that provides the road map for acquiring appropriate & need based human resources, its development through training, job enrichment, reward and recognition for better performance, career progression, welfare and retention.

During the year 2016-17 the Bank recruited 127 Officers in Scale I, 1 Security Officer in Scale II, 79 Clerks and 12 Sub staff.

During the year, 1017 employees ceased to be in service on account of retirement, VRS, resignation, termination and death.

Inter scale promotions of officers were carried out during 201617. Following number of candidates were promoted.

JMGS-I TO MMGS-II	MMGS-II to MMGS III	MMGS-III TO SMGS-IV	SMGS-IV TO SMGS-V	SMGS-V TO SMGS-VI	SMGS-VI TO TEGS-VII
708	90	108	59	24	4

During the year 2016-17, 19 Sub staff were promoted to Clerical cadre.

Cadre wise staff position as of 31.3.2017 with sex ratio percentage is as under :

Category	Male	%	Female	%	Total
Officers	4710	73.82	1670	26.18	6380
Clerks	3005	63.62	1718	36.38	4723
Sub-staff	1682	89.90	189	10.10	1871
Total	9397	72.43	3677	27.57	12974

The top three branches in disbursement and recovery of advances to SC/ST community were awarded Rolling Trophy in name of Bharat Ratna Dr. Babasaheb Ambedkar.

The Bank has been allocating up to 3 per cent of its net profit towards various schemes for the welfare of staff including retired staff. The welfare schemes are administered by a Central Welfare Committee consisting of management & employees representatives.

The Bank has healthy industrial relations.

The Bank has been complying with the reservation policy of Govt. of India. Special Cells at Head Office and all Zonal Offices are functioning to monitor the implementation of the reservation policies and to redress grievances of SC/ST/OBC & Physically challenged employees as well as ex-servicemen. The Bank has designated Chief Liaison Officers at Head Office and has set up SC/ST Cells at all Zonal Offices. During the year periodical meetings were held with SC/ST/OBC Employees Association to discuss implementation of reservation policy and other constitutional safe guards and also to facilitate involvement in business growth.

The number of employees belonging to different categories is as under:

S No	Category of Employees	No. of Employees	Percentage to total
1.	Women	3577	27.57%
2.	Physically Challenged	214	1.65%
3.	SC Employees	2370	18.27%
4.	ST Employees	1035	7.98%
5.	OBC Employees	2163	16.67%
6.	General Employees	7406	57.08%
	TOTAL employees working in the Bank	12974

Rosters have been maintained as per Government guidelines and are regularly inspected/ checked.

Compassionate Appointments - A Scheme for ‘Compassionate Appointments'' / Payment of Ex-gratia lumpsum amount“ to /of heirs of employees dying in harness or retiring due to incapacitation framed as per the directives of Government of India, has been implemented. The details of compassionate appointments and payment of Ex-gratia lumpsum amount for the year 2016-17 is as under :

Compassionate Appointments		Payment of Excreta
Cadre	No.of employees	No.of employees	Amount paid
Clerk	6	2	Rs.14.00 Lacs
Substaff	12	2	Rs.12.00 Lacs

The Contributory Group Insurance Medic aim Policy for all employees including retired employees, has been renewed w.e.f. 1.4.2017 and the Sum insured is increased upto Rs.10.00 Lakhs for existing employees. The details of renewal of policy areas under :

Employees	No.of Employees	Premium paid
Existing	970	117.30
Retired	1740	219.44
Total	2710	336.74

The reimbursement of examination fees & payment of cash incentive / Honorarium in respect of courses from Indian Institute of Banking & Finance, MBA from reputed Institutions & CFA has been widened by adding three more courses in the list of courses for reimbursement of fees thereby making total 25 courses eligible for reimbursement of examination fees.

A policy for granting special leave and 100% reimbursement of hospitalization expenses to officers when he meets with an accident / injury while on duty is in place.

Policy for ‘granting incentives, to officers posted & transferred in North eastern zones from other zones'' framed as per the directives of Government of India.

Training Activities:

The Bank has a training system which facilitates attention to regular periodic assessment of skill gaps at various levels in relation to existing and emerging business opportunities. Skill building in credit, Forex, customer relationship management, marketing of products and services, credit monitoring and recovery, risk management, technology based banking, branch management, complying with statutory, legal and policy requirements and preventive vigilance received special attention during the year.

Training programs were also held on thrust areas like financing SMEs, retail lending, agriculture finance, soft skills and rural development.

Cadre-wise Break up of Employees trained during the period 1.4.2016 to 31.03.2017 are as under-

Cadre	No. of Prog	Training Days	Employees Trained
Officers	146	563	3984
Clerks	44	102	684
S/staff	40	76	619
Total	230	741	5287

3.3 Technology Initiatives

The Bank had taken off & successfully initiated / launched various Major IT Projects during 2016-2017 which are enumerated as under:

1. During the Year 2016-17, Upgrade of Contact Center Operations including Integrated Voice Response System (IVRS) was successfully done & System is made operational

2. Bank launched ‘Maha UPI'', its UPI mobile application from 26/08/2016. As on 31/03/2017, 1,10,749 customers are registered for UPI.

3. ISO 27001:2013 Re-Certification achieved by the bank during September 2016, for its 4 IT Divisions, thereby continuing the Quality ISMS (Information Security Management System) in our Bank.

4. Cheque Truncation System (CTS) is implemented at all South Grid Centers as per RBI directives..

5. Bank started the Paper-less ATM-RePIN facility (Green PIN) for ATM Card through its ATM Machines. This facility overcomes all shortcomings of the conventional re-pin request process.

6. As per Directives of GOI received from time to time during the Demonetization Phase, Bank has effected timely changes in ATM Cash Withdrawal Limits. Also, the Bank successfully completed the massive exercise of physically recalibrating all its 1878 ATMs in time bound manner. These ATMs have been recalibrated on account of demonetization, for the New Rs.500 & Rs.2000 notes.

7. New Internet Banking Portal is launched for Retail Customers.

8. Bank has implemented Self Update Pass Book Printers & Bunch Note Acceptor Machines in a big way at various locations across the Bank. The same shall be continued to ensure fulfillment of customer requirements/satisfaction.

Bank''s Own EFT Switch, is helping the bank to derive significant advantages like reduced turn-around-time to introduce new ATM Product, Better customer experience, Reduced risk, Instant Hot-listing of a card through multiple channels, Value Added Services etc.

Bank has collaborated with VISA for International Debit Cards and with NPCI for Rupay Debit Cards. Bank has commenced issue of Rupay Platinum Cards. As on 31/03/2017, the total ATM card base of the Bank stood at 64.54 Lakhs, which includes 1.11 Lakh Rupay Platinum Chip cards.

Bank''s Internet Banking, Mobile Banking, UPI & other online applications are well received by our Customers. As on 31/03/2017, the number of customers registered for Internet Banking, Mobile Banking & UPI stood at 6.97 Lakhs, 2.92 lakhs & 1.11 Lakhs respectively.

Various facilities are being provided through our Internet Banking platform for facilitating online payment of taxes, utility bill payments, online shopping / e-commerce, railway reservation, LIC premium payment, e-SBTR etc and facility for viewing tax credit statement 26AS and Demat account with the Bank.

Bank has robust Information Security Management System (ISMS) framework in place. Its information security policy statement being: “Bank of Maharashtra is committed to protect and safeguard the critical information of all stakeholders in order to ensure secure business operations”. Bank has also implemented major security initiatives recommended by Gopalakrishna Committee for internal and external customers.

Bank has in place a captive Security Operations Centre (SOC) for monitoring Critical IT Infrastructure on 24 x 7 basis. The process for revamping the existing Security Operation Center (SOC) to Cyber Security Operations Center (CSOC), as per RBI Directives is initiated & in progress.

Bank is handling the e-Payments of State Government Taxes of Maharashtra, Karnataka, Tamil Nadu, Madhya Pradesh & Rajasthan States.

Inward Clearing in Mumbai, Pune & Ahmedabad Centers is already outsourced. Clearing processing for outward clearing was made live in Nagpur Zone during April 2016. It is being extended to Pune Centers in a phased manner, so as to move towards the goal of Centralized Clearing in future.

In the coming FY 2017-2018, Bank proposes to take up / implement the following IT Initiatives -

1. CBS Contract Renewal.

2. Cyber Security Operations Centre (CSOC)

3. Additional Network Service Provider for Leased Line / VSAT Branches

4. LMS- end to end- LOS to Recovery, OTS, EWS, Lead Management etc

5. International Financial Reporting Standards (IFRS).

6. Upgrade of MIS ADF system.

7. Integrated Risk Management Solution.

8. SWIFT DR setup.

3.4 Customer Centric Initiatives taken by the Bank

The Bank has pursued high standards of customer service to ensure customer satisfaction throughout the year by implementing all maior recommendations of Goiporia Committee, Dr. S.S. Tarapore Committee and Damodaran Committee.

As a member of Banking Codes and Standards Board of India (BCSBI), Bank has adopted Code of Bank''s Commitment to Customer and Bank''s Code of Commitment to MSMEs.

Bank has printed folder called as “My Folder” containing all customer service policies, information on service charges, guidelines on Government Schematic Loans, Ombudsman and BCSBI Codes. The same is printed in Marathi, Hindi and English and supplied to all branches and Zones for making the same available to all customers on demand.

Duly documented policies approved by the Board, on “Deposits”, “Collection of Cheques”, “Redressal of Grievances”, “Compensation” , “Operational Procedure for Settlement of Claims of Deceased Depositors” and Customer Rights Policy are in place.

Customer Service Committees are formed at all branches and their meetings are conducted regularly on monthly basis. The Standing Committee on Customer Service at Head Office and Zonal Level Customer Service Committees at Zones, meet regularly to address and review various customer related matters and to take steps, for an improvement, on an ongoing basis.

The Committee of the Board on Customer Service meets on quarterly basis to monitor the quality of the customer service, redressal of customer grievances and to ensure customers satisfaction.

Full-fledged grievances Redressal machinery is in place to respond promptly to customer grievances. The Bank has started internet based mechanism, Standardized Public Grievances Redressal System (SPGRS) for lodging the complaints or to give suggestions / feedback on services by the customers and for providing acknowledgement and status of their feedback / complaints as per the directions of Government of India.

Sr. No.	Particulars	2016-16	2016-17
1	Customer complaints at the beginning of the year	2	73
2	Complaints received during the year	3218	2912
3	Complaints redressed during the year	3147	2931
4	Complaints pending at the end of the year	73	54

It is Bank''s endeavor to redress all complaints within a week''s time.

Kiosk Machine has been installed at Head Office to enable the customer to register online complaints / suggestions and is in operation since 14.03.2013.

3.5 KYC/ AML

Know Your Customer (KYC) norms / Anti Money Laundering (AML) standards / Combating of Financing of Terrorism (CFT) and Obligation of Bank under Prevention of Money Laundering Act (PMLA) 2002.

The Bank has Board approved KYC-AML-CFT Policy in place. The said Policy is the foundation on which the Banks implementation of KYC norms, AML standards and CFT measures is based. The full KYC compliance entails staff education as well as customer education for which the following measures are taken by the Bank.

IBA has advised the Banks to implement 88 parameters so far for generation of AML alerts. Bank has implemented 43 parameters out of 49 parameters as per IBA guidelines and the remaining 6 parameters are related to 3^rd party products. In addition to these the FEX centers/branches have been sensitized on the guidelines on Trade Based Money Laundering issued by FIU-IND to prevent fraud/money laundering.

A comprehensive list of KYC documents is uploaded on the Banks web site for the benefit of customers. Regular training sessions are conducted on KYC-AML-CFT guidelines at the Banks training establishments to sensitize the employees.

3.6 Risk Management

The Bank has put in place Risk Management Policies and Strategies, enables it to identify, measure, monitor and manage risk efficiently and establishes control systems in line with the Bank''s aggregate Risk Appetite. Bank has constituted Risk Management Committee at Board level to monitor the risk at Bank level in accordance with RBI Guidelines. Bank has also constituted sub-committees headed by Top Management of Bank.

The Bank is Compliant to the RBI guidelines on disclosure requirements under Basel III Capital Regulations.

3.7 Brand Image:

Your Bank with a view to develop Brand Image of Bank, publicize Bank''s various products coupled with Corporate Social Responsibilities has Marketing & Publicity Policy as well as independent vertical.

Bank has extended Donations under its Corporate Social Responsibilities to National Sports Development Fund (NSDF), Rotary Club Nigdi for the construction of water Tank in Nigade Village, Balewadi Stadium for providing Water Coolers, “Shrutakevali Education Trust” for Bahubali Children''s Hospital, Shravanabelagola, Karnataka, NAAM Foundation famous NGO working on issues like education, infrastructure, employment, food etc.,

3.8 Citizen’s Charter:

The Bank has adopted the Charter since 2000-01, which details the duties and responsibilities of the Bank towards its customers. The charter is displayed at all the branches and Bank''s website. Some of important responsibility of Branches are;

- All branches of banks in all parts of the country should provide the following customer services, more actively and vigorously to the members of public.

- Meeting the demands for fresh / good quality notes and coins of all denominations.

- Exchanging soiled notes, and

- Accepting coins and notes either for transactions or exchange.

- Separate que for senior citizen

4. SOCIO/MICRO ECONOMIC DEVELOPMENT.

4.1 Priority Sector Lending

It has been the constant endeavor of the Bank to facilitate equitable and sustainable economic development by timely and hassle-free availability of credit for productive purposes to Small and Marginal Farmers, Micro and Small Enterprises, Retail Traders, Professional and Self Employed, Women Entrepreneurs and entrepreneurs from economically weaker sections.

The outstanding advances under Priority Sector as of 31^st March 2017, aggregates to Rs. 40388.63 Crore constituting 34.99% of the Adjusted Net Bank Credit (ANBC).

4.2 Agriculture

The Bank disbursed Rs. 7752 Crore for agriculture and allied activities during the year 2016-17. The total outstanding advances to agriculture sector reached a level of Rs.17960 Crore as on 31.03.2017 (growth of 4.57%). Bank focused on growth of investment credit under Agriculture during the year 2016-17 and disbursed Rs. 3042 Crore. Bank also entered into strategic tie-up arrangements with Tractor Manufacturers, Micro Irrigation Companies for promoting farm mechanization and micro irrigation activities during the year.

The Bank undertook awareness/sensitization programmes for all the branches for increasing advances to agriculture by providing hassle free credit to farmers.

4.2.1 Mahabank Kisan Credit Card (MKCC)

This scheme gained popularity especially in rural areas where it is being propagated successfully and vigorously. The Bank has issued total 601303 Kisan Credit Cards to farmers. Credit flow to MKCC beneficiaries has reached to the level of Rs.7057 Crore as on 31.03.2017 (growth of 5.47 %).

4.3 Micro, Small and Medium Enterprises (MSME)

SMEs are recognized as a major growth engine for the Indian economy. They generate opportunities for direct and indirect employment by facilitating use of natural resources and local skills to stem the tide of migration to urban areas and promote low investment enterprises. Finance is made available to viable enterprises at an attractive and low rate of interest. On line enquiry portal is made available on the Bank''s website.

Our Bank has adopted Simplified Loan Application for MSEs and the same is displayed on the Bank''s website. The Bank has also adopted Bank''s Code of Commitment to Micro and Small Enterprise and the same is displayed on the Bank''s website.

The Bank''s lending to Micro, Small and Medium Enterprises (Priority NP) is Rs. 20585.22 Crore as at 31.03.2017. Advances to Micro enterprises under priority are 7.48 % of ANBC against RBI target of 7.50 % as of March 2017.

For promoting finance under this category, Bank has entered into strategic tie up arrangements with Truck / Vehicle / Passenger car manufacturers. Bank has also entered into MoU with Bharatiya Yuva Shakti Trust and de-Asra foundation for Credit facilitation and hand holding of the Micro entrepreneurs specially under Women and SC/ST categories. Bank has also partnered with myloanassochem.com portal for generating leads and converting them into business to the bank by financial assistance to MSMEs.

Centralized Processing Cell have been set up at all Zonal Offices for speedy disposal of MSME proposals.

4.3.1 MUDRA: With the introduction of Pradhan Mantri MUDRA Yojana (PMMY) which mainly consists of non-farm enterprises in manufacturing, trading and services whose credit needs are below Rs. 10.00 lakh. Bank is giving special attention to this segment. Loans given to this segment for income generation are known as MUDRA loans under Pradhan Mantri MUDRA Yojana (PMMY) and branded accordingly.

Bank disbursed Rs 1732.72 Crore under PMMY against the target of Rs 1800.00 Crore as on 31.03.2017. Bank achieved 96.54 % of target allotted by Government under PMMY.

Bank has launched MUDRA Card on 16.9.2015 and so far issued 8281 MUDRA Cards as on 31.3.2017

4.3.2 Coverage under CGTMSE Scheme

Under Credit Guarantee Fund Scheme for Micro, Small and Medium Enterprises of Government of India credit facilities up to Rs.100.00 lakh are covered, wherein no collateral security and third party guarantee are insisted by the Bank. For the accounts covered under this scheme, Bank is bearing 50% annual guarantee fee for loans above Rs 10.00 lakh. The Bank has sanctioned loans of Rs 2228.75 Crore to 25955 borrowers under this scheme up to March 2017. During the current FY, coverage under Credit Guarantee Fund Scheme has increased by 11.12%.

4.3.3 Banks exposure to important segments.

S N	Sector	Outstanding as on 31.03.2017	Outstanding as on 31.03.2016	% of increase ( /-)
1	Micro Finance	154.52	152.62	-0.06%
2	Weaker Sector	12190	11006	10.76%
3	SC/ST beneficiaries	1738	1684	3.21%
4	Minority Community	2921	3037	-3.82%

5. IMPORTANT SCHEMES/ PROJECTS OF THE BANK

5.1. Credit Flow to Retail Sector

The Bank is providing retail loans for salaried persons, professionals, businessmen and pensioners for purchase of housing properties/ plots, repair/ renovation of house, purchase of consumer durables, two/four wheeler vehicles, education and loan for other personal needs etc. The retail loan portfolio of the bank is Rs.15792.02 Crore.

Amt. in Rs. Crore

SN	Scheme	Brief Description	Portfolio as of Mar’17	NPA %
1	Maha Super Housing Loan Scheme	Housing Sector being the thrust area, Bank has various Housing Loan schemes in place to meet the needs of all economic segments. Bank offers housing loan for “purchase / construction of new / existing house / flat, repairs / renovation / alteration of existing house / flat, purchase of plot and construction thereon”	13595.20	2.72

2	Maha Super Car Loan Scheme and Mahabank vehicle Loan scheme	Bank has launched scheme for purchase of New four Wheeler i.e. Car, Jeep, Multi Utility vehicles (MUVs), SUV etc. for personal use. (i.e. not for hiring/ferrying passengers) for individuals (18 years and above).	669.36	4.89
3	Model Education Loan Scheme	Bank is implementing Model Education Loan Scheme as per IBA guidelines and provides hassle free Education loan to all meritorious and deserving Students (Indian National) for pursuing higher studies /education in India and abroad	891.05	5.87
4	Mahabank Top up Loan Scheme	In order to extend additional credit support to existing housing loan borrowers as well takeover of existing housing loan of other banks with additional facility of Top-up Loan, Bank has launched “Mahabank Top Up loan Scheme”. Under this scheme credit is extended for repair / renovation / furnishing of house, children’s education, Marriage of Children, Medical treatment, buying a vehicle or hi-tech gadgets etc.	67.72	2.00
5	Mahabank Gold Loan Scheme	With a view to tap the potential of gold loans as a lucrative asset and to cater to the needs of meeting other personal expenses, whatsoever which include personal expenditure of varied needs like marriage, higher education, medical emergencies, business travel etc, Bank has launched a retail loan product as “Mahabank Gold Loan Scheme” w.e.f. 26.09.2014.	96.58	2.80
6	Mahabank Aadhar Loan Scheme	To cater to the needs of our existing pension account holders in meeting their personal expenses, pilgrimage, medical, domestic needs etc. Bank has re-launched “Mahabank Aadhar Loan Scheme”.	283.21	0.68

6.2 Centralized Processing of loans

Bank has established Centralized Processing Cells for retail / commercial advances at all its 33 Zones for hassle free & due diligence of loans with aim to improve turnaround time.

6.3 Door Step Banking Services

Bank has introduced Door Step Banking Services for its High End Customers and the services include Corporate and Retail Cash pickup and delivery & Cheque Collection Services, at Clients Doorstep.

5.4 BOM SBI International Credit Card

- The BOM-SBI card base is 50064

- The commission received from SBI Card is Rs. 83.00 Lakhs during the year 2016-17.

5.13 ALTERNATE DELIVERY CHANNELS

5.13.1 INTERNET /SMS/Phone Banking

Bank could achieved an increase of 28% in Internet Banking, 31% in Phone Banking and 33% in SMS banking over the previous year.

With continuous follow up and increase in net security through the Mahasecure for IBN users, substantial rise in users/online transactions is expected.

5.13.2 MOBILE BANKING

- Maha Mobile functionality has been customized and simplified for increasing the enrolments.

- A user manual on Internet Banking & New Maha Mobile functionality is prepared & sent to field staff for ready reference & marketing of the technology based products.

- Bank has introduced an Incentive schemes for Branch staff & Cash Back Offer to customers for Downloading “Maha Mobile App” in the month of December 2015

- Maha Mobile App has been increased by 15744 nos. in the month of December 2015.

- Presently, there are 112210 Mobile Banking users.

5.14 Tie Ups

5.14.1 Payment Gateway Services:

- Presently we are providing the facility of Payment Gateway to all our customers through our online aggregators.

- We have made tie up arrangement with following aggregators

Sr	Particular	Sr	Particular
1	M/s Atom Technologies	7	M/s CC Avenues
2	M/s BILL DESK	8	M/s Citrus Payment Solutions Pvt Ltd
3	M/s EBS solutions limited	9	M/s PayTm
4	M/s Ibibo i.e. PAYU	10	M/s Tec process payment Solutions
5	M/s Times of Money Limited	11	M/s SBI e pay
6	M/s Airpay	12	FSS Payment Solutions

5.14.2 ‘Remit2india’ facility

- “Remit2India” is a web-based, person to person money transfer system that allows individuals particularly our Non-Resident Depositors to remit foreign currency amount for credit to the Beneficiary account in India.

- Although the income is very less in this product but is facility/Services which we may be useful to attract NRI customers.

6. CORPORATE SOCIAL RESPONSIBILITY

The Rural Development Centers at Hadapsar- Pune and Bhigwan in Pune District of Maharashtra have been undertaking various rural developmental activities for the benefit of farmers'' viz. Vermi compost, Re-development of Saline Soils, Soil Testing etc. Bank has established Soil testing lab (STL) through MARDEF Trust at RDC Bhigwan. The Soil Testing Laboratory has analyzed 7007 Soil and Water samples in the year 2016-17 and accordingly counseling is done. Farmers from the districts of Pune, Ahmednagar, Sholapur and Satara are taking benefit of the lab.

A Trust viz. Mahabank Agricultural Research and Rural Development Foundation (MARDEF) established by the bank, undertakes various projects and village improvement programmes. MARDEF is imparting training to farmers on various subjects in Agriculture. Trust has implemented 94 training programmes for farmers at RDC Bhigwan and Hadapsar and has benefited 3,245 farmers from April 2016 to March, 2017.

The Bank has established Seven Mahabank Self Employment Training Institutes (MSETI) for providing training to rural youth and women to enable them to acquire skills for self-employment through small business enterprises. The Institute has centers located at Pune, Nagpur, Aurangabad, Amravati Jalna, Thane and Nasik. The Institute has so far imparted training to 26801 educated unemployed youths. The settlement rate is 65 per cent.

Gramin Mahila Va Balak Vikas Mandal (GMVBVM), an NGO formed by Bank of Maharashtra and National Institute of Bank Management is actively involved in formation, nurturing, training and ensuring linkage of SHGs to Bank Credit.

The Bank has opened Financial Literacy Centers in Six Lead Districts namely Pune, Nasik, Aurangabad, Satara, Jalna and Thane for creating awareness about banking schemes.

7. LEAD BANK SCHEME

7.1 Lead Bank Scheme

The Bank has Lead Bank responsibility in seven districts of Maharashtra State viz. Aurangabad, Jalna, Nasik, Palghar, Pune, Satara and Thane. Every year district credit plans for the districts are prepared and implemented with the cooperation of other banks as well as in coordination with District Collectors of respective Districts.

7.2 State Level Bankers’ Committee

The Bank is the Convenor of State Level bankers'' Committee (SLBC) for the State of Maharashtra and prepares State Annual Credit Plan. The plan for the year 2016-17 was for Rs.1,86,620/-crore which is highest in the country. The same was approved in a special meeting held under the Chairmanship of Hon’ble Chief Minister of Maharashtra. SLBC also ensures holding of quarterly meetings regularly to oversee the implementation of State Annual Credit Plans, priority sector lending and Govt. sponsored schemes in the State. Apart from regular SLBC meetings, various other meetings are also organized by SLBC to coordinate between various member banks, State Government, Government Agencies, Reserve Bank of India, NABARD and the Central Government. SLBC coordinates a network of more than 15,000 bank branches in the state.

In FY 2016-17, the State suffered due to continual draught in more than 16000 villages and also onslaught of natural calamities, the brunt of which is mostly borne by Agriculture and related activities. SLBC has always been very proactive in such calamities by issuing necessary guidelines in respect of relief measures, organizing special meetings and guiding the members whenever necessary.

As SLBC convener, Bank of Maharashtra coordinated implementation of Pradhan Mantri Jan Dhan Yojana (PMJDY) in the State of Maharashtra. A total of 136 lakh accounts were opened in the State and the State was declared as saturated for the purpose of opening of accounts. The process of opening of accounts is continued.

S L B C Maharashtra received award for highest Adhar seeding of PMJDY accounts from Department of Financial Service, MOF New Delhi.

7.3. FINANCIAL INCLUSION / PMJDY:

Scheme	Particulars	2014-15	2015-16	2016-17
FI Plan	No of Transactions by BCA (in lakhs)	20.80	55.27	109.75
	Amt of transactions (in Cr)	602.08	2063.37	4702.81
PMJDY	No. of PMJDY accounts(in lakhs)	22.96	32.19	42.28
	Of Which Aadhaar Seeded	11.81	24.05	33.18
	% OF Aadhaar Seeding	51.44	74.71	78.48
	Of Which Mobile Seeding	10.74	23.22	32.16
	% of Mobile Seeding	46.78	72.13	76.06
	Balance in PMJDY A/c (in Cr)	209.86	531.97	932.05
	Average Bal. per account actual	914	1653	2205
	Zero Bal. PMJDY A/cs	13.43	13.61	16.34
BSBD Accounts	Total BSBD Accounts	53.30	61.70	71.28
	O/S Balance in BSBD A/c (in Cr)	516.50	893.57	1410.85
	Average bal. per account (actual)	969	1448	1979
	Commission Paid towards BC Services (in Crore)	5.30	11.95	23.07

The Bank has a full-fledged call centre with toll free number 18001022636 for redressal of PMJDY grievances.

The Financial Literacy Material has been prepared in vernacular languages and supplied to all Branches / Bank Mitrs for supplying the same to accountholders during FLC camps.

Financial literacy camps are organized different schools in districts of Maharashtra. All skilling centers /ITI are mapped under financial literacy project

Bank has been awarded for excellent performance in the field of financial inclusion from prestigious institutes like IBA, DFS, and Economic Times.

8. SUBSIDIARIES/JOINT VENTURES AND SPONSORED INSTITUTIONS

8.1 Performance of Regional Rural Bank

Maharashtra Gramin Bank (MGB) is a Regional Rural Bank sponsored by the Bank, having its Head Office at Aurangabad, Maharashtra State. Total no of branches as on 31.3.2017 stood at 408 in its area of operation covering 17 out of 36 districts of Maharashtra State.

All 408 branches and controlling offices are now under CBS. MGB opened 11 new branches during this year.

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Maharashtra Gramin Bank has crossed the benchmark of Rs.11000 Cr Total Business and Rs.100 Cr Operating Profit by achieving Rs.11899 Cr Total Business and Rs.118.94 Cr Operating Profit as on 31.03.2017 with a YOY growth rate of 30.76%

The percentage of CASA to total deposit is 58.94%.Operating profit of MGB is Rs. 118.94 Crore (growth of 30.75%). During this year 2016-17, MGB has grown by 20.07% in total deposits and 11.32 % in advances.

Under Pradhan Mantri Jandhan Yojana surveys of all allotted 898 SSAs and 80 wards were conducted for identification of households having no bank account. The Bank has covered all allotted SSAs by engaging BCAs. Total 8.54 lakh accounts have been opened during the PMJDY campaign period and “RuPay ATM debit cards” have been issued to 7.45 lakh account holders. Maharashtra Gramin Bank has actively participated in the PMJJBY, PMSBY and APY as well as the PMMY scheme declared by GoI, DFS.

Bank has achieved most of the Targets under MOU_DAP for the financial year 2016-17 in the major Key performance parameters.

SR NO	PERFORMANCE PARAMETER	TARGET FOR THE FY 2016-17	ACTUAL AS ON 31.03.2017
1	Growth in Core Deposit (%)	10.78	20.07
2	Growth in Advances (%)	10.27	11.32
3	Recovery % June 2016	60.00	58.00
4	NPA Level	227.34	369.37
5	Growth in Agriculture Advances	15.63	13.76
6	CD Ratio	71.21	66.33
7	Increase in No. of SHGs credit linked		4530
8	Increase in No. of KCC Cards	-	233726
9	Net Profit After Tax	42.25	42.19
10	Per Branch Profit (Lakh)	15.97	10.34
11	Per Employee Profit (Lakh)	4.19	2.91

8.2 The Maharashtra Executor & Trustee Company Pvt. Ltd.

Maharashtra Executor & Trustee Company Pvt. Ltd. (METCO), the 100% subsidiary of Bank of Maharashtra was established in 1946 with an aim to provide services auxiliary to banking such as:

- Consultation, Drafting & Execution of will

- Consultation, Drafting and Management of Private Trusts / Public Trusts

- Management of investments & house properties as attorney

- Guardianship of minor’s property

- Consultation for sale/purchase of property

- Filing of I-Tax Returns for individuals

The Company is located at Pune having its branch units at Pune, Vashi-Mumbai, Thane and Nagpur. It is managing about 1094 Public & Private Trusts. During the year, additional 27 Wills were added making total 1125 Will in its custody for execution.

At present, the Company manages properties both movable and immovable of 69 clients under the Power of Attorney. The Company also acts as the Trustees in respect of 160 policies under Married Women''s Property Act and as Court appointed Guardian of minor''s property in 6 cases.

The net profit of METCO for F.Y. 2016-17 is Rs.46.92 lakh.

9. IMPLEMENTION OF OFFICIAL LANGUAGE POLICY

During the year 2016-17, the Bank has achieved various remarkable achievements in the field of Official Language implementation:

The Town Official Language Implementation Committee, Mumbai has secured Second Prize from the Rajbhasha Vibhag, Ministry of Home Affairs, Government of India for better implementation of Hindi at the hands of Hon. Governor, Rajasthan State in a grand function held at Udaipur. Our Bank is the convener Bank for the committee.

Our Bank was awarded Third Prize by the Mumbai based prestigious Institution ‘Aashirvad’ for better use of Hindi during the year.

31^st meeting of the Maharashtra State Level Bankers'' Committee (Rajbhasha) was held under the chairmanship of Shri R. P. Marathe, Managing Director and CEO of the Bank. Bank of Maharashtra is the convenor for this top-level committee. Mr. Nagendra Singh, Director, Ministry of Home Affairs, Government of India, New Delhi was present in the meeting as the Chief Guest. Shri R. K. Gupta, Executive Director of Bank of Maharashtra and Dr. Suneeta Yadav, Deputy Director, Ministry of Home Affairs, Govt. of India were present as special guest on the occasion. Shri Manoj Biswal, General Manager (HRM & Rajbhasha) and Dr. Rajendra Shrivastava, AGM (Rajbhasha) & Member Secretary of the Committee were also present. Top level executives and Hindi officers of all the public sector banks attended the meeting in large numbers. On this occasion Online Rajbhasha Glossary “Rajbhasha Kosh” of Bank of Maharashtra was inaugurated at the hands of Shri Nagendra Singh, Chief Guest and Online Hindi Roster of Bank of Maharashtra was inaugurated at the hands of Shri R. P. Marathe, MD & CEO. Rajbhasha Shield and memento were presented to the members for better implementation of Hindi in their offices.

Hindi day function was arranged at Head Office, Pune on 15^th September 2016. Shri R. K. Gupta, Executive Director of the Bank presided over the function. Dr. Mohan Agashe, renowned Marathi and Hindi actor and social worker was the Chief Guest. Shri Narender Kabra, General Manager was also present in the function. Winners of the All India Internal Rajbhasha Trophy Scheme of the Bank were awarded during the function.

An All India Rajbhasha Seminar was organized in Kolkata for all the Hindi Officers of the Bank. Shri R. P. Marathe, Managing Director & CEO of the Bank inaugurated the seminar. Shri Manoj Biswal, General Manager, HRM & Rajbhasha reviewed the performance and guided all the participants. An All India Inter-Bank Essay Competition was organized by our Bank and the winners of the competition were awarded at the hands of Shri R. P. Marathe, Managing Director & CEO of the Bank during the seminar.

Monthly Rajbhasha E-Magazine ‘Rajbhasha E-Pragati'' is being regularly published every month. As a new initiative Rajbhasha E-Pragati in Brail script is also published for the benefit of differently able employees of the Bank.

Bank of Maharashtra is the convenor Bank for Town Official Language Implementation Committee (TOLIC) in Mumbai, Pune, Solapur, Latur & Jalgaon. Meetings of these committees were held regularly during the year and various activities of the committees were organized throughout the year as per the schedule.

Committee of Parliament on Official Language visited our Aurangabad Zonal Office, Jamnagar branch, Ahmadabad Zone and Chennai Zonal Office during the year and reviewed Official Language Implementation work of the Bank. The honorable members of the Committee expressed their satisfaction regarding progressive use of Hindi and the implementation of new initiatives by the Bank.

An All India Rajbhasha Seminar was organized by Syndicate Bank in Manipal in the Month of January, 2017. Shri Manoj Biswal, General Manager, HRM and Rajbhasha represented our Bank in the seminar and addressed the executives of all the banks.

Our bank was awarded First Prize by Town official Language Implementation Committee, Patna for better use of Hindi during the year. Reserve Bank of India is the convener for this committee.

10. SECURITY

Proactive steps were taken in view of the security requirements at the branches and for Bank''s staff and also for provisioning of physical security infrastructure at all branches. This was done after analysis of the threat perception, current crime scenario, crime pattern, modus operandi of bank robberies, the breaches of security and fire incidents besides equipping and training the security personnel and other bank staff to counter any such eventuality.

11. DIRECTORS’ RESPONSIBILITY STATEMENT

The Directors confirm that in the preparation of the annual accounts for the year ended 31.03.2017:

- The applicable accounting standards of the Institute of Chartered Accountants of India, have been followed along with proper explanation relating to material departures, if any;

- The accounting policies framed in accordance with the guidelines of the Reserve Bank of India, are consistently applied and proper disclosures are made for changes, if any;

- Reasonable and prudent judgment and estimates were made so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and the profit of the Bank for the year.

- Proper and sufficient care was taken for maintenance of adequate accounting records in accordance with the provisions of applicable laws governing banks, in India; and

- The accounts have been prepared on a going concern basis.

12. CHANGES IN THE BOARD OF DIRECTORS

- During the year 2016-17, the following changes took place in the Board of Directors:

- Shri Ramdev L. Saydiwal, ceased to be the Director of the Bank w.e.f. 20.07.2016.

- Shri Deendayal Agrawal was appointed as Director by the Central Government w.e.f. 26.07.2016.

- Shri Sanjeev Jain, ceased to be the Director of the Bank w.e.f. 18.08.2016.

- Shri Ravindra Prabhakar Marathe, was appointed as MD & CEO of Bank of Maharashtra by the Central Government w.e.f. 26.09.2016.

- Shri Sushil Muhnot, ceased to be the CMD of the Bank w.e.f. 26.09.2016.

- Shri R. Athmaram ceased to be the Executive Director of the Bank by the Central Government w.e.f. 31.10.2016.

- Shri Alekh C. Rout was appointed as Executive Director of the Bank by the Central Government w.e.f. 31.03.2017.

13. BUSINESS RESPONSIBILITY REPORT

As per the SEBI(Listing Obligation sand Disclosure Requirements) Regulations, 2015, Business Responsibility Report (BRR) 2016-17 of the Bank has been hosted on the Bank''s website i.e www.bankofmaharashtra.in. Any member interested in obtaining a physical copy of same may write to the Company Secretary of the Bank.

14. ACKNOWLEDGEMENTS

The Board of Directors wishes to express sincere gratitude to the Government of India, the Reserve Bank of India, the Securities and Exchange Board of India, Insurance Regulatory and Development Authority, Indian Banks’ Association and Stock Exchanges and CDSL for their valuable advice and support; to the customers and shareholders for their patronage; to the correspondents and associates for their cooperation and to all the members of staff of “Mahabank Family” for their unstinted commitment and contribution to the overall development of the Bank.

For and on behalf of the Board of Directors

Place : Pune (R.P. Marathe)

Date : 4 May, 2017 Managing Director and CEO

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Mar 31, 2016

The Directors have pleasure in presenting the Annual Report of the Bank with the audited Balance Sheet, profit & Loss Account and the Report on Business and Operations for the year ended March 31, 2016.

2.12 Non Interest Income

2.13 Income, Expenditure and profitability

The total income of the Bank grew from Rs. 13671.42 crore in FY 2014-15 to Rs.14072.29 crore in FY 2015-16 (growth of 2.93%)

The detailed income/expenditure components are asunder:

(Rs. in crore)

Particulars 2015-16 2014-15 Variation (per cent)

Interest / discount on 9934.83 9820.78 1.16 advances / bills

Income on investments 2735.20 2539.53 7.71

Interest on interbank lending 382.95 305.13 25.5 and other Interest

Total interest income 13052.98 12665.44 3.06

Non-interest income 1019.29 1005.98 1.32

Total Income 14072.27 13671.42 2.93

Interest on deposits 8421.88 8084.74 4.17

Interest on borrowings 54.88 79.92 -31.33

Other interest expenditure 697.52 625.74 11.47

Staff expenses 1540.98 1633.21 -5.65

Other operating expenses 1011.83 892.72 13.34

Total Non-interest expenses 2552.81 2525.93 1.06

Total Operating Expenses 11727.09 11316.33 3.63

Operating profit 2345.18 2355.09 -0.42

Provisions and 2244.49 1904.40 17.86

Contingencies

Net profit 100.69 450.69 -77.66

2.14 Financial Ratios

Particulars 2015-16 2014-15

EPS (Rs.) 0.91 4.50

Cost to Income Ratio (percent) 52.12 51.75

Return on assets (percent) 0.07 0.33

Return on equity (per cent) 1.24 6.68

Book value per share (Rs.) 63.36 65.61

profit per Branch ( Rs. in lakh) 5.31 23.97

profit per employee ( Rs. in lakh) 0.73 3.18

Business per Branch ( Rs. in crore) 132.05 118.79

Business per employee ( Rs. in crore) 18.18 15.74

Interest income as per cent to Average 8.71 9.21 working funds

Non Interest income as per cent to 0.68 0.73 average working funds

Net Interest Margin (per cent) 2.59 2.82

Operating profit as per cent to average 1.56 1.71 working Funds

Staff expenses as a percent to average 1.03 1.19 working funds

Dividend (per cent) 0 8.00

Net worth (Rs. Crore) 7403.05 6975.77

CRAR (%) (Basel II) 11.20 11.94

Of which, Tier I CRAR (%) (Basel II) 9.02 8.76

2.15 Capital from Government of India

The Bank issued 10,51,50,787 equity shares amounting to Rs. 394.00 crore (including share premium) to GoI on preferential allotment basis.

Consequent upon the capital raised during the year, as above, the share holding of GOI in equity share capital stood at 81.61%

2.16 Networth

The Bank''s Net worth increased from Rs.6975.77 crore as on 31.03.2015 to Rs.7403.05 crore as on 31.03.2016.

2.17 Capital Adequacy Ratio

The Capital Adequacy ratio stood at 11.20% as on 31.03.2016, against the minimum of 9.63 %( Including CCB) prescribed by RBI in terms of Basel III norms. The Common Equity Tier 1 Ratio stood at 9.02%.

2.18 Dividend

The Board of Directors of the Bank has not recommended any dividend for the Financial year 2015-16.

3 .1 Branch Expansion

During the year, the Bank opened 15 new branches. As on 31.03.2016, the total branch network comprised of 1895 branches spread over 30 states and 4 union territories. The branch network includes specialized branches in the area of foreign exchange, Government business, Treasury and International Banking, Industrial Finance, Small Scale Industry and Hi-tech agriculture, Pension Payment, Self Help Groups etc.

Area wise classification of branches as on 31.03.2016 is given in the table below:

Sr. Classification As on As on No. 31.03.2015 31.03.2016

1 Rural 657 658

2 Semi-Urban 433 434

3 Urban 364 366

4 Metro 426 437

1880 # 1895

# 36 Branches like Service /Retail Asset/Recovery Br''s are converted as a "Back Office" as per RBI Guidelines on 01.06.2014.

3.2 Human Resources Management

The Bank has put in place a comprehensive HRM Policy that provides the road map for acquiring appropriate & need based human resources, its development through training, job enrichment, reward and recognition for better performance, career progression, welfare and retention.

During the year the Bank recruited 351 Probationary Officers, 113 Agril. Field Officers, 10 Rajbhasha Adhikari, 14 Law Officers, 1 Company Secretary & 34 Chartered Accountants in Officer Cadre and 61 Clerks & 36 Armed Guards were also recruited.

During the year, 1044 employees ceased to be in service on account of retirement, VRS, resignation, termination and death.

Inter scale promotions of officers were carried out during 2015- 16. Following number of candidates were promoted.

JMGS-I MMGS-II MMGS- SMGS- SMGS-V SMGS- TO to MMGS III TO IV TO TO VI TO MMGS-II III SMGS-IV SMGS-V SMGS-VI TEGS-VII

196 485 166 39 20 4

During the year 2015-16, 106 Substaff were promoted to Clerical cadre and 300 Clerks were promoted to Officer Cadre.

To recognize outstanding performance in Banking activities and to motivate others to perform better, various schemes like Performance Linked incentives to all staff of Best Performing Branches etc. are in vogue.

The top three branches in disbursement and recovery of advances to SC/ST community were awarded Rolling Trophy in name of Bharat Ratna Dr. Babasaheb Ambedkar.

The Bank has been allocating up to 3 per cent of its net profit towards various schemes for the welfare of staff including retired staff. The welfare schemes are administered by a Central Welfare Committee consisting of management & employees representatives.

The Bank has healthy industrial relations.

The Bank has been complying with the reservation policy of Govt. of India. Special Cells at Head Office and all Zonal Offices are functioning to monitor the implementation of the reservation policies and to redress grievances of SC/ST/OBC & Physically challenged employees as well as ex-servicemen. The Bank has designated Chief Liaison Officers at Head Office and has set up SC/ST Cells at all Zonal Offices. During the year periodical meetings were held with SC/ST/OBC Employees Association to discuss implementation of reservation policy and other constitutional safe guards and also to facilitate involvement in business growth.

The number of employees belonging to different categories is as under:

S No Category of Employees No. of Percentage Employees to total

1. Women 3739 27.16

2. Physically Challenged 184 1.34

3. SC Employees 2563 18.62

4. ST Employees 1082 7.86

5. OBC Employees 2116 15.37

6. General Employees 8004 58.15

TOTAL employees 13765 working in the Bank

Rosters have been maintained as per Government guidelines and are regularly inspected/ checked.

Compassionate Appointments - A Scheme for ''Compassionate Appointments''/ Payment of Ex-gratia lumpsum amount" to /of heirs of employees dying in harness or retiring due to incapacitation framed as per the directives of Government of India, has been implemented.

The Contributory Group Insurance Mediclaim Policy for all employees including retired employees, has been renewed w.e.f. 1.4.2016 and the Sum insured is increased upto Rs.10.00 Lacs for existing employees.

The reimbursement of examination fees & payment of cash incentive / Honorarium in respect of courses from Indian Institute of Banking & Finance, MBA from reputed Institutions & CFA has been widened by adding fve more courses in the list of courses for reimbursement of fees thereby making total 22 courses eligible for reimbursement of examination fees.

A policy for granting special leave and 100% reimbursement of hospitalization expenses to officers when he meets with an accident / injury while on duty is in place.

Policy for ''granting incentives, to officers posted & transferred in North eastern zones from other zones''framed as per the directives of Government of India.

Training Activities:

The Bank has a training system which facilitates attention to regular periodic assessment of skill gaps at various levels in relation to existing and emerging business opportunities. Skill building in credit, Forex, customer relationship management, marketing of products and services, credit monitoring and recovery, risk management, technology based banking, branch management, complying with statutory, legal and policy requirements and preventive vigilance received special attention during the year.

Training programmes were also held on thrust areas like financing SMEs, retail lending, agriculture finance, soft skills and rural development.

Cadre-wise Break up of Employees trained during the period 1.4.2015 to 31.03.2016 are as under-

Cadre No. of Prog Training Employees Days Trained

Offcers 129 547 4030

Clerks 64 208 1248

S/staff 37 74 692

Total 230 829 5970

3.3 Technology Initiatives

The Year 2014-2015 was a milestone year for the Bank as far as technology implementation & up-scaling was concerned. The Year 2015-2016 is being observed as "Stabilization Year"/"Technology Augmentation Year" for the various initiatives undertaken during the Year 2014-2015, in addition to new initiatives that have been taken up for implementation during the Year 2015-2016 and enumerated as under:

1. CBS Hardware Augmentation Project covering DC & DR was undertaken & successfully completed during the year to take care of increasing transactions load and to ensure smooth functioning of CBS system at field level.

2. E-Gadgets implemented in a big way during the year with commissioning of Self Update Pass Book Printers, Queue Management Solution & Bunch Note Acceptor Machines at various locations across the Bank. The same will be continued during next financial year to ensure fulfillment of customer requirements/satisfaction.

3. Latest ISO 27001:2013 Certification secured by the Bank for its four IT Divisions, thereby continuing the Quality ISMS (Information Security Management System) in our Bank.

4. ''Maha Mobile''New Gen Mobile Banking Application which was launched in January 2015 got stabilized during the year and was well received by our customers. As on 31/03/2016, 112210 users are registered for this facility.

5. ''Mahasecure''a Two Factor Authentication (2FA) Solution for Retail Users & active Corporate Users has been implemented as a part of the effort to respond to the ever evolving information security trends and the responsibility to enhance security features in the Internet Banking facility. One Time Password (OTP) for Fund Transfer is also implemented under Mahasecure Application. No phishing attacks have been reported after the implementation of this product.

6. IMPS-P2A (Immediate Payment System - Person to Account) & IMPS-P2P (Immediate Payment System - Person to Person) Fund Transfer facility made available under Internet Banking from 12/06/2015 & 23/12/2015 respectively. Using this facility, customers can do inter- bank as well as intra-bank (24 x 7) fund transfer upto Rs.5,000/- in a day.

Bank''s Own EFT Switch which was implemented Live from 08/05/2014, got fully stabilized during the year. As a result of the implementation of own EFT Switch, Bank is deriving significant advantages like reduced turn-around- time to introduce new ATM Product, Better customer experience, Reduced risk, Instant Hot-listing of a card through multiple channels, Value Added Services etc.

Bank has collaborated with VISA for International Debit Cards and with NPCI for Rupay Debit Cards. Bank has commenced issue of Rupay Platinum Cards from 28/03/2016. As on 31/03/2016, the total card base of the Bank stood at 57.19 Lakhs.

Various facilities are being provided through our Internet Banking platform for facilitating online payment of taxes, utility bill payments, online shopping / e-commerce, railway reservation, LIC premium payment, e-SBTR etc and facility for viewing tax credit statement 26AS and Demat account with the Bank.

Bank has robust Information Security Management System (ISMS) framework in place. Its information security policy statement being: "Bank of Maharashtra is committed to protect and safeguard the critical information of all stakeholders in order to ensure secure business operations". Bank has also implemented major security initiatives recommended by Gopalakrishna Committee for internal and external customers.

Bank has in place a captive Security Operations Centre (SOC) for monitoring Critical IT Infrastructure on 24 x 7 basis. The SOC shall enable the Bank to effectively address security threats by constant, proactive monitoring of security events and meet the compliance requirements. This has enabled the Bank to automate the vulnerability discovery process by constantly analyzing the logs generated by the core IT security and application infrastructure. The other services namely Anti- Phishing & Anti-Trojan services are also implemented.

Bank is handling the e-Payments of State Government Taxes of Maharashtra, Karnataka, Tamil Nadu, Madhya Pradesh & Rajasthan States.

Inward Clearing in Mumbai, Pune & Ahmedabad Centers is already outsourced. Now, we have started Outsourcing of Outward Clearing in Nagpur. On stabilization, it shall be extended further to Pune & Mumbai Centers, so as to move towards the goal of Centralized Clearing in future.

Bank has implemented Scientific Transfer Pricing Mechanism / Fund Transfer Pricing during the year.

In Year 2016-2017, Bank proposes to take up / implement the following IT Initiatives -

1. Risk Based Internal Audit Software.

2. e-TDS Software.

3. Unified Payments Interface (UPI) of NPCI.

4. Bharat Bill Payment System (BBPS) of NPCI.

5. Risk Based Supervision (RBS)

6. International Financial Reporting Standards (IFRS).

7. Rupay Platinum Cards.

3.4 Customer Centric Initiatives taken by the Bank

The Bank has pursued high standards of customer service to ensure customer satisfaction throughout the year by implementing all major recommendations of Goiporia Committee, Dr. S.S. Tarapore Committee and Damodaran Committee.

As a member of Banking Codes and Standards Board of India (BCSBI), Bank has adopted Code of Bank''s Commitment to Customer and Bank''s Code of Commitment to MSMEs.

Bank has printed folder called as "My Folder" containing all customer service policies, information on service charges, guidelines on Government Schematic Loans, Ombudsman and BCSBI Codes. The same is printed in Marathi, Hindi and English and supplied to all branches and Zones for making the same available to all customers on demand.

Duly documented policies approved by the Board, on "Deposits", "Collection of Cheques", "Redressal of Grievances", "Compensation" , "Operational Procedure for Settlement of Claims of Deceased Depositors" and Customer Rights Policy are in place.

Customer Service Committees are formed at all branches and their meetings are conducted regularly on monthly basis. The Standing Committee on Customer Service at Head Office and Zonal Level Customer Service Committees at Zones, meet regularly to address and review various customer related matters and to take steps, for an improvement, on an ongoing basis.

The Committee of the Board on Customer Service meets on quarterly basis to monitor the quality of the customer service, redressal of customer grievances and to ensure customers satisfaction.

Full-fedged grievances redressal machinery is in place to respond promptly to customer grievances. The Bank has started internet based mechanism, Standardized Public Grievances Redressal System (SPGRS) for lodging the complaints or to give suggestions / feedback on services by the customers and for providing acknowledgement and status of their feedback / complaints as per the directions of Government of India.

Kiosk Machine has been installed at Head Office to enable the customer to register online complaints / suggestions and is in operation since 14.03.2013.

3.5 KYC/ AML

Know Your Customer (KYC) norms / Anti Money Laundering (AML) standards / Combating of Financing of Terrorism (CFT) and Obligation of Bank under Prevention of Money Laundering Act (PMLA) 2002.

The Bank has Board approved KYC-AML-CFT Policy in place. The said Policy is the foundation on which the Banks implementation of KYC norms, AML standards and CFT measures is based. The full KYC compliance entails staff education as well as customer education for which the following measures are taken by the Bank.

A comprehensive list of KYC documents is uploaded on the Banks web site for the benefit of customers. Regular training sessions are conducted on KYC-AML-CFT guidelines at the Banks training establishments to sensitize the employees.

3.6 Risk Management

Bank has its Risk Management Framework in accordance with RBI Guidelines and it benchmarks itself against industry best practices. This enables it to identify measure, monitor and manage risk efficiently.

It has put in place Risk Management Policies and Strategies and establishes control systems in line with Bank''s aggregate Risk Appetite. Bank has constituted Risk Management Committee at Board level to monitor risk at Bank level. Bank has also constituted sub-committees known as Credit Risk Management Committee (CRMC), Market Risk Management Committee (MRMC), Operational Risk Management Committee (ORMC) and Asset Liability Management Committee (ALCO) to monitor specific risk areas. These Committees are headed by Chairman and Managing Director. Executive Directors and General Managers are members of the Committees.

As per RBI guidelines on disclosure requirements under Basel III Capital Regulations, Bank has published Disclosures on quarterly and half yearly basis and put them on the Bank''s website.

3.7 Inspection & Audit:

The Inspection and Audit system and various measures of internal control are adopted by the Bank to ensure identification /assessment and mitigations of various risks.

Internal Audit of branches

As per Seth Committee guidelines the Bank is conducting Risk Based Internal Audit of branches. RBIA of 1139 Branches which were due for Audit during the year including Top 142 Branches in terms of Business, were conducted.

The Bank has implemented Off-site monitoring system since 2015 to strengthen the internal control system in which reports on some important/ sensitive areas are extracted from the CBS system on daily/weekly/monthly basis so as to guide the branches to take timely action for rectification.

The Bank proposes to procure and implement web based integrated audit software for conducting various types of audits.

Surprise/Snap Inspection:-

Surprise/Snap Inspection of 12 branches were undertaken during the year, focusing mainly on high risk areas in pursuance of Ghosh Committee Recommendations.

Concurrent Audit:-

As per approved Audit Plan for 2015-2016, 498 branches and two departments of the Bank are covered under Concurrent Audit. Bank''s 75.78% total business is covered under concurrent Audit.

Income and Expenditure Audit (I.and E. Audit)

Income & Expenditure audit was carried out at 263 branches as per approved plan for the period 01.10.2014 to 30.09.2015 having total business above Rs. 25.00 crore and advances above Rs.5.00 crore.

Expenses Audit of Zonal Office : -

In order to have control over expenditure at Zonal offices a system has been put in place through half yearly Expenses Audit. The Audit is conducted once in half year i.e. March and September. The expenses audit of 33 Zones was conducted as of 30.09.15.

Management audit:

For assessing the effectiveness of Zonal Offices and HO Departments in terms of supervision, control, profitability and growth in business, Management Audit of 22 Zonal offices and 17 Departments at Head Office is carried out during the year 2015-16.

RBI Inspection under Section 35 of the Banking regulation Act:-

The Bank is subject to RBI inspection under Sec.35 of the Banking Regulation Act during the year. Besides that 1 branch was also inspected by RBI during the year.

AML:

IBA has advised the Banks to implement 88 parameters so far for generation of AML alerts. Bank has implemented 43 parameters out of 49 parameters as per IBA guidelines and the remaining 6 parameters are related to 3rd party products. In addition to these the FEX centers/branches have been sensitized on the guidelines on Trade Based Money Laundering issued by FIU-IND to prevent fraud/money laundering.

3.8 Vigilance:

As per Central Vigilance Commission (CVC) guidelines, the Bank has adopted Integrity Pact & appointed Independent External Monitors (IEMs), for independent review of compliance of obligations by the parties under Integrity Pact. This system will ensure transparency, equity & competitiveness in large value procurements.

To enlighten the participants on preventive vigilance aspects, a session on preventive vigilance is included in every training programme. During the accounting year 88 sessions on preventive vigilance were conducted by vigilance department, where in 2325 employees from different cadres participated.

As a part of preventive vigilance exercise Zones are undertaking vigilance inspection of Branches, which has helped in detecting the fraud.

3.9 Compliance:

The Bank has put in place a Compliance Policy, based on the guidelines of Reserve Bank of India. The Compliance Department is having a Chief Compliance Officer who monitors the compliance functions. It ensures the implementation of the statutory / regulatory guidelines coming into force from time to time. The issues relating to regulatory / statutory compliances are addressed appropriately. Submission of various regulatory returns is also monitored.

3.10 Marketing & Publicity:

With a view to publicize Bank''s various products and also brand image coupled with Corporate Social Responsibilities, Bank has sponsored various programs like "sponsorship to Sharda Shakti, Pune for organizing Seminar on "Women Health Challenges and Solution" in Pune, Sponsorship to Nasik Kumbh Mela, Sponsorship to TERRE Policy centre for organizing Green Olympiad, Sponsorship to 14th Pune International Film Festival, Donations to National Sports Development Fund (NSDF), Old Age Home Chennai during Chennai Flood, Rotary Club Nigdi for the construction of water Tank in Nigade Village, Balewadi Stadium for providing "7 Water Coolers, "Shrutakevali Education Trust" for Bahubali Children''s Hospital, Shravanabelagola, Karnataka, Donation to Prakrit Bharati Academy Publishing 10 books on Indian Culture, Religions.

3.11 Citizen''s Charter:

The Bank has adopted the Charter since 2000–01, which details the duties and responsibilities of the Bank towards its customers. The charter is displayed at all the branches and Bank''s website. The Bank has also adopted a citizen''s charter of RBI on exchange of notes and coins.

4. SOCIAL BANKING

4.1 Priority Sector Lending

It has been the constant endeavor of the Bank to facilitate equitable and sustainable economic development by timely and hassle-free availability of credit for productive purposes to Small and Marginal Farmers, Micro and Small Enterprises, Retail Traders, Professional and Self Employed, Women Entrepreneurs and entrepreneurs from economically weaker sections.

The outstanding advances under Priority Sector as of 31st March 2016, aggregates to Rs. 41,485 Crore constituting 39.82% of the Adjusted Net Bank Credit (ANBC). (Growth of Rs. 2,391 Crore, 6.12% over last year).

4.2 Agriculture

The Bank disbursed Rs.8179 Crore for agriculture and allied activities during the year 2015-16. The total outstanding advances to agriculture sector reached a level of Rs.17174 Crore as on 31.03.2016 (growth of 10.65 per cent). Bank focused on growth of investment credit under Agriculture during the year 2015-16 and disbursed Rs.1648 Crore. Bank also entered into strategic tie-up arrangements with Tractor Manufacturers and Micro Irrigation Companies for promoting farm mechanization and micro irrigation activities during the year. Tie up arrangement is also made with three Collateral Manager to capture market for expanding loan against ware house receipts.

The Bank undertook awareness/sensitization programmes for all the branches for increasing advances to agriculture by providing hassle free credit to farmers.

4.2.1 Mahabank Kisan Credit Card (MKCC)

This scheme has gained popularity especially in rural areas where it is being propagated successfully and vigorously. The Bank has issued total 5,72,221 Kisan Credit Cards to farmers. Credit flow to MKCC beneficiaries has reached to the level of 6691 Crore as on 31.03.2016 (growth of 19.70 %).

4.3 Micro, Small and Medium Enterprises (MSME)

SMEs are recognized as a major growth engine for the Indian economy. They generate opportunities for direct and indirect employment by facilitating use of natural resources and local skills to stem the tide of migration to urban areas and promote low investment enterprises. Finance is made available to viable enterprises at an attractive and low rate of interest. On line enquiry portal is made available on the Bank''s website.

Our Bank has adopted Simplified Loan Application for MSMEs for loans up to Rs. 1.00 Crore and the same is displayed on the Bank''s website. The Bank has also adopted Bank''s Code of Commitment to Micro and Small Enterprise and the same is displayed on the Bank''s website.

The Bank''s lending to Micro, Small and Medium Enterprises (Priority NP) which was at the level of Rs.20,657 Crore as at 31.03.2015, increased to Rs.22,334 Crore as at 31.03.2016. Advances to Micro enterprises under priority are 7.79 % of ANBC against RBI target of 7.00 % for March 2016.

For promoting fnance under this category, Bank has entered into strategic tie up arrangements with Truck / Vehicle / Tractor / Passenger car manufacturers. Bank has also entered into a MOU with Bharatiya Yuva Shakti Trust and de-Asra foundation for Credit facilitation and hand holding of the Micro entrepreneurs especially under Women and SC/ST categories.

Centralized Processing Cell set up last year at all Zonal Offices for speedy disposal of MSME proposals has been streamlined.

Bank has launched a new product namely "Mahabank MSME Credit " for financing to MSME borrowers during the FY 2015- 16 in addition to fve products introduced last year.

4.3.1 MUDRA: With the introduction of Pradhan Mantri MUDRA Yojana (PMMY) which mainly consists of non-farm enterprises in manufacturing, trading and services whose credit needs are below Rs. 10.00 lakh. Bank is giving special attention to this segment. Loans given to this segment for income generation are known as MUDRA loans under Pradhan Mantri MUDRA Yojana (PMMY) and branded accordingly.

Bank has disbursed Rs.1290.00 Crore under PMMY against the target of Rs.1155.00 Crore as on 31.03.2016. Bank achieved 111.69% of target allotted by Government under PMMY.

Bank has launched MUDRA Card on 16.9.2015. MUDRA Card issued as a Rupay Debit Card which is hassle free flexible credit product that meets working capital needs of Micro & Small Entrepreneurs and cash can be withdrawn from any ATM or purchase from Merchandise using POS machine.

Bank has issued 7537 MUDRA Cards as on 31.3.2016

4.3.2 Coverage under CGTMSE Scheme

Under Credit Guarantee Fund Scheme for Micro, Small and Medium Enterprises of Government of India credit facilities up to Rs.100.00 lakh are covered, wherein no collateral security and third party guarantee are insisted by the Bank. For the accounts covered under this scheme, Bank is bearing 50% annual guarantee fee for loans above Rs.10.00 lakh and annual guarantee fee for loans below Rs.10.00 lakh is borne by borrower. The Bank has sanctioned loans of Rs.2,005.54 Crore to 21,287 borrowers under this scheme up to March 2016. During the current FY, coverage under Credit Guarantee Fund Scheme has increased by 11.10%.

5. IMPORTANT SCHEMES/ PROJECTS OF THE BANK

5.1. Credit Flow to Retail Sector

The Bank is providing retail loans for salaried persons, professionals, businessmen and pensioners for purchase of housing properties/ plots, repair/ renovation of house, purchase of consumer durables, two/four wheeler vehicles, education and loan for other personal needs etc. The retail loan portfolio of the bank is Rs.12567.96 Crore.

5.2. Mahabank Gold Loan Scheme

Gold ornaments are the traditional and inherited form of savings among the people in India. Being one of the most liquid and precious asset, it serves as a dependable and acceptable form of security to raise loans for meeting immediate financial needs for business, agricultural, consumption purposes such as marriage, medical, educational expenses etc. People borrow money by pledging Gold Ornaments at very high rate of interest. To tap the potential of gold loans as a lucrative asset and to meet the credit requirement of our customers. With a view to meet the credit requirement of our customers, Bank has launched a new retail loan product "Mahabank Gold Loan Scheme" w.e.f. 26.09.2014. The total portfolio of Gold Loan of our Bank as on 31.03.2016 is Rs. 31.86 Crore.

5.3. Housing loan to public

The Bank has in place Housing Loan Scheme to meet the needs of all economic segments including NRIs. Financing housing sector in rural and urban parts of India is a thrust area. The housing loan portfolio of Bank is Rs. 10550.79 Crore as on 31.03.2016, which constitutes 83.94% of total retail portfolio of the Bank. The housing loan schemes of the Bank were revisited and revised schemes were launched like "purchase / construction of new / existing house / fat, repairs / renovation / alteration of existing house / fat, purchase of plot and construction thereon". The Bank has also launched "Maha Combo Loan Scheme" for purchase of house and a car taken together.

5.3.2 Mahabank Top-Up Loan Scheme

In order to extend additional credit support to our standard housing loan borrowers, Bank has launched "Mahabank Top Up loan Scheme" w.e.f. 26.02.2016. Under this scheme credit is extended for repair / renovation / furnishing of house, children''s education, Marriage of Children, Medical treatment, buying a vehicle or hi-tech gadgets etc.

5.4. Model Educational Loan scheme

With the objective of ensuring that all deserving students get opportunity to pursue higher education, the Bank implemented a Model Educational Loan Scheme as per IBA guidelines. As of March 2016, the Bank had lent Rs. 804.12 Crore to 30554 students. The Bank has provided the facility of submission of application for education loan through web-access (on line) also. Bank has also introduced a new feature called "Pre Approved Education Loan", to its "Model Education Loan Scheme" to address the requirement of multiple sanction letters required by students applying for study at foreign universities. Bank also has "Model Education Loan Scheme for as Skill Loan, where loans can be sanctioned for completion of short duration job oriented skill development programmes. A loan up to Rs.1.50 lakh can be sanctioned under the scheme.

5.5. Centralized Processing of loans

Bank has established Centralized Processing Cells for retail / commercial advances at all its 33 Zones for hassle free & due diligence of loans with aim to improve turnaround time.

5.6. Micro Finance

The Bank has always recognized the importance of credit to rural and urban poor for taking economic activity. The SHGs have proved to be effective instruments for empowerment of women Bank has specialized SHG branches in all six lead districts and at Goregaon, Mumbai.

As on 31.03.2016, there were 139194 SHGs formed by the Bank, out of which 107286 SHGs have been linked with the bank credit with outstanding of Rs.154.62 Crore as on 31st March 2016.

5.7. Assistance to SC/ST beneficiaries:

The Bank has been actively extending finance to SC/ST beneficiaries through various schemes. Total finance as on 31.03.2016 to SC/ST beneficiaries stood at Rs. 1728.34 Crore, constituting 15.73 per cent of advances to weaker sections.

5.8. Weaker Sector Advances:

Bank is providing credit facilities to small / marginal farmers, share cropper, landless labor, SC /ST Beneficiaries, Self Help Groups, Joint Liability Groups, The total portfolio of weaker Sector advance of our Bank as on 31.03.2016 stood at Rs. 10,985 Crore constituting 10.55% of ANBC.

5.9. Advances to Minority Community

A special cell has been set up at Head Offce to review and ensure smooth flow of Credit to minority community. The branches were identified in minority concentrated districts and special targets were allotted to these branches for lending to minority communities. As of March 2016, advances to Minority community are at Rs. 3037.22 crore as against Rs.3264.25 Crore of previous year.

5.10 Door Step Banking Services

Bank has introduced Door Step Banking Services for its High End Customers and the services include Corporate and Retail Cash pickup and delivery & Cheque Collection Services, at Clients Doorstep.

5.11 BOM SBI International Credit Card

- The BOM-SBI card base is 45347 out of which 23542 cards are used and monthly spend is approximately Rs. 12.00 Cr.

- The commission received from SBI Card is Rs. 66.00 Lakhs during the year 2015-16.

5.13 ALTERNATE DELIVERY CHANNELS

5.13.1 ATMs

- ATM site wise feasibility/viability study before relocation was advised and also to achieve more than 100 average daily hits per ATM.

- Continuous follow up for relocation of Low hit Lobby ATMs (Total 405) has been made and relocation of 335 lobby ATMs is done by 31.03.2016 Of the remaining 70 ATMs relocations follow up is being made for early completion.

- Relocation of Onsite ATMs is geared up by empowering Zonal Offces by giving specifc guidelines and numbers of relocations

- Zonal managers are empowered with necessary inputs to decide and shift low hit ATMs to suitable/viable locations. Analyzing the reasons for high number of hits on other bank ATM locations (Remote on us) advised zones to survey the area and relocate the low hit ATMs within the zone, additionally, Even if we have ATM in the vicinity.

- ATMs are being branded with display of our products / services at prominent places like Malls, Marketing & Publicity point of view. Few such ATMs are being installed in the leading malls of Pune. Two ATMs with branding are made operational in two leading malls in the city of Pune.

- 100% relocation of low hit lobby ATMs is completed in Twelve (12) Zones viz. Aurangabad, Delhi, Goa, Jalgaon, Indore, Jaipur, Solapur, Latur, MCZ, PCZ, Satara & PEZ. Remaining Zones are followed up on daily basis.

5.13.2 INTERNET /SMS/Phone Banking

Bank could achieve an increase of 28% in Internet Banking, 31% in Phone Banking and 33% in SMS banking over the previous year.

With continuous follow up and increase in net security through the Mahasecure for IBN users, substantial rise in users/online transactions is expected.

5.13.3 MOBILE BANKING

- Maha Mobile functionality has been customized and simplified for increasing the enrolments.

- A user manual on Internet Banking & New Maha Mobile functionality is prepared & sent to field staff for ready reference & marketing of the technology based products.

- Bank has introduced a Incentive schemes for Branch staff & Cash Back Offer to customers for Downloading "Maha Mobile App" in the month of December 2015

- Maha Mobile App has been increased by 15744 nos. in the month of December 2015.

- Presently, there are 112210 Mobile Banking users.

5.14 Tie Ups

5.14.1 Payment Gateway Services:

- Presently we are providing the facility of Payment Gateway to all our customers through our online aggregators.

- We have made tie up arrangement with following aggregators.

Sr Particular Sr Particular

1 M/s Atom 7 M/s CC Avenues Technologies

2 M/s BILL DESK 8 M/s Citrus Payment Solutions Pvt Ltd

3 M/s EBS solutions 9 M/s PayTm limited

4 M/s Ibibo i.e. PAYU 10 M/s Techprocess payment Solutions

5 M/s Times of Money 11 M/s SBI e pay Limited

6 M/s Airpay 12 FSS Payment Solutions

5.14.2 ''Remit2india''facility

- "Remit2India" is a web-based, person to person money transfer system that allows individuals particularly our Non-Resident Depositors to remit foreign currency amount for credit to the Beneficiary account in India.

- Although the income is very less in this product but this facility/Services which we may be useful to attract NRI customers.

5.14.3 ECS Mandate and Direct Debit System

- Bank has a tie up with M/s Bajaj Finance Limited (Auto Finance) for Centralized ECS mandate verification & centralized direct debit system where in bank is receiving commission of Rs.50,000/- per month for mandate verification & centralized direct debit.

- Similarly, Bank has also a tie up with M/s Bajaj Finance Limited (Consumer Finance) & TVS at Banglore.

5.14.4 Online Fee Collection

- We have an arrangement in CBS for online fee Collection of different institutes; Organizations etc. wherein Bank will be receiving the commission.

- We have already started IBPS (Indian Banking Personal Selection) online fee collection, over the counter fee collection for Amravati collectorate etc.

5.14.5 Online Trading

- Bank has introduced Three Brokers under our Online Share Trading facility. i.e. M/s Religare Securities Limited, M/s Reliance Securities Ltd. & M/s Ventura Securities Limited for Online Share Trading.

- Zones have been advised to open the maximum trading accounts.

6. CORPORATE SOCIAL RESPONSIBILITY

The Rural Development Centers at Hadapsar- Pune and Bhigwan in Pune District of Maharashtra have been undertaking various rural developmental activities for the benefit of farmers''viz. Vermi compost, Re-development of Saline Soils, Soil Testing etc. Bank has established Soil testing lab (STL) through MARDEF Trust at RDC Bhigwan. The Soil Testing Laboratory has analyzed 7418 Soil and Water samples in the year 2015-16 and accordingly counseling is done. Farmers from the districts of Pune, Ahmednagar, Solapur and Satara are taking beneft of the lab.

A Trust viz. Mahabank Agricultural Research and Rural Development Foundation (MARDEF) established by the bank, undertakes various projects and village improvement programmes. MARDEF is imparting training to farmers on various subjects in Agriculture. Trust has implemented 94 training programmes for farmers at RDC Bhigwan and Hadapsar and has benefited 2,363 farmers from April 2015 to March, 2016.

The Bank has established Seven Mahabank Self Employment Training Institutes (MSETI) for providing training to rural youth and women to enable them to acquire skills for self-employment through small business enterprises. The Institute has centers located at Pune, Nagpur, Aurangabad, Amravati Jalna, Thane and Nasik. The Institute has so far imparted training to 21386 educated unemployed youths. The settlement rate is 56.00%.

Gramin Mahila Va Balak Vikas Mandal (GMVBVM), an NGO formed by Bank of Maharashtra and National Institute of Bank Management is actively involved in formation, nurturing, training and ensuring linkage of SHGs to Bank Credit.

The Bank has opened Financial Literacy Centers in Six Lead Districts namely Pune, Nasik, Aurangabad, Satara, Jalna and Thane for creating awareness about banking schemes.

7. LEAD BANK SCHEME

7.1 Lead Bank Scheme

The Bank has Lead Bank responsibility in seven districts of Maharashtra State viz. Aurangabad, Jalna, Nasik, Palghar, Pune, Satara and Thane. Every year district credit plans for the districts are prepared and implemented with the cooperation of other banks as well as in coordination with District Collectors of respective Districts.

7.2 State Level Bankers''Committee

The Bank is the Convenor of State Level bankers''Committee (SLBC) for the State of Maharashtra and prepares State Annual Credit Plan. The plan for the year 2015-16 was for Rs. 1,86,620 /- crore which is highest in the country. The same was approved in a special meeting held under the Chairmanship of Hon''ble Chief Minister of Maharashtra. SLBC also ensures holding of quarterly meetings regularly to oversee the implementation of State Annual Credit Plans, priority sector lending and Govt. sponsored schemes in the State. Apart from regular SLBC meetings, various other meetings are also organized by SLBC to coordinate between various member banks, State Government, Government Agencies, Reserve Bank of India, NABARD and the Central Government. SLBC coordinates a network of more than 15,000 bank branches in the state.

In FY 2015-16, the State suffered due to continual draught in more than 16000 villages and also onslaught of natural calamities, the brunt of which is mostly borne by Agriculture and related activities. SLBC has always been very proactive in such calamities by issuing necessary guidelines in respect of relief measures, organizing special meetings and guiding the members whenever necessary.

As SLBC convener, Bank of Maharashtra coordinated implementation of Pradhan Mantri Jan Dhan Yojana (PMJDY) in the State of Maharashtra. A total of 136 lakh accounts were opened in the State and the State was declared as saturated for the purpose of opening of accounts. The process of opening of accounts is continued.

S L B C Maharashtra received award for highest Adhar seeding of PMJDY accounts from Department of Financial Service, MOF New Delhi.

7.3. FINANCIAL INCLUSION / PMJDY:

Bank continued to actively participate in the Pradhan Mantri Jan Dhan Yojana (PMJDY) announced and launched by the Prime Minister of India.

Survey of all allotted 3051 rural Sub Service Areas (SSAs) and 755 urban wards were conducted for identification of households having no bank account. The Bank has engaged 2,974 Bank Mitrs through corporate BCs and under own BCA model in all the allotted SSAs. The Bank Mitrs are being paid monthly remuneration regularly and minimum remuneration is ensured by paying fixed monthly pay and variable commission.

Total 32.18 lakh Savings Bank accounts have been opened by the Bank during the PMJDY campaign period and RuPay ATM Debit cards have been issued to all the accountholders. Savings accounts of all the identified uncovered households have been opened. The Bank has mobilized Rs. 531.97 Crore in these accounts opened during the campaign period. The Bank also implemented Aadhaar based account opening using e-KYC. The Bank is live on Aadhaar Enabled Payment System (On- us and Off-us) and RuPay card PIN Based transactions. The Bank has been processing the DBT (Direct Benefit Transfer) and DBTL (LPG Gas Subsidy) for the accountholders. Bank is having highest number of AEPS transactions in banking industry.

The Bank has introduced micro insurance products for life (PMJJY). During this financial year 7,69,482 policies were issued under this scheme. Other accident micro insurance scheme launched (PMSBY ) was also launched and as many as 14,13,165 policies are issued under this group insurance scheme .Atal pension Yojana was also implemented with full vigour by our bank by issuing 43936 pension accounts under this scheme .

The Bank has a full-fedged call centre with toll free number 18001022636 for redressal of PMJDY grievances.

The Financial Literacy Material has been prepared in vernacular languages and supplied to all Branches / Bank Mitrs for supplying the same to accountholders during FLC camps. Financial literacy camps are organized different schools in districts of Maharashtra. All skilling centers /ITI are mapped under financial literacy project Bank has been awarded for excellent performance in the field of financial inclusion from prestigious institutes like IBA, DFS, and Economic Times.

8. SUBSIDIARIES/JOINT VENTURES AND SPONSORED INSTITUTIONS

8.1 Performance of Regional Rural Bank

Maharashtra Gramin Bank (MGB) is a Regional Rural Bank sponsored by the Bank, having its Head Office at Aurangabad, Maharashtra State. Total no of branches as on 31.3.2016 stood at 397 in its area of operation covering 17 out of 36 districts of Maharashtra State.

All 397 branches and controlling offices are now under CBS. MGB opened 06 new branches during this year.

Maharashtra Gramin Bank has crossed the benchmark of Rs.10000 Cr Total Business and Rs.100 Cr Operating profit by achieving Rs.10224 Cr Total Business and Rs.105 Cr Operating profit as on 31.03.2016 with a YOY growth rate of 22.30%

The percentage of CASA to total deposit is 53.52 %.Operating profit of MGB is Rs. 105.20 Crore (growth of 15.01 %). During the year 2015-16, MGB has grown by 22.48 % in total deposits and 22.06 % in advances.

Under Pradhan Mantri Jandhan Yojana surveys of all allotted 898 SSAs and 80 wards were conducted for identification of households having no bank account. The Bank has covered all allotted SSAs by engaging BCAs. Total 4.50 lakh accounts have been opened during the PMJDY campaign period and "RuPay ATM debit cards" have been issued to all the account holders.Maharashtra Gramin Bank has actively participated in the PMJJBY, PMSBY and APY as well as the PMMY scheme declared by GoI, DFS.

Bank has achieved most of the Targets under MOU_DAP for the financial year 2015-16 in the major Key performance parameters.

TARGET ACTUAL SR PERFORMANCE FOR THE FY AS ON NO PARAMETER 2015-16 31.03.2016

Growth in Core Deposit

1 (%) 17.18% 22.48%

2 Growth in Advances (%) 23.02% 22.06%

3 Recovery % June 14 65% 67%

4 NPA Level Rs.195.00 Cr Rs.153.99 Cr.

Growth in Agriculture

5 Advances 19.67% 25.18%

6 CD Ratio 75.44% 71.61%

Increase in No. of SHGs 7 credit linked 2500 5067

Increase in No. of KCC 8 Cards 35000 173483

9 Net profit After Tax Rs.45.50Cr Rs.53.86 Cr.

10 Per Branch profit Rs.15.85 lacs Rs.17.60 lacs

11 Per Employee profit Rs.4.19 lacs Rs.4.67 lacs

8.2 The Maharashtra Executor & Trustee Company Pvt. Ltd.

Maharashtra Executor & Trustee Company Pvt. Ltd. (METCO), the 100% subsidiary of Bank of Maharashtra was established in 1946 with an aim to provide services auxiliary to banking such as:

- Consultation, Drafting & Execution of will

- Consultation, Drafting and Management of Private Trusts / Public Trusts

- Management of investments & house properties as attorney

- Guardianship of minor''s property

- Consultation for sale/purchase of property

- Filing of I-Tax Returns for individuals

The Company is located at Pune having its branch units at Pune, Vashi-Mumbai, Thane and Nagpur. It is managing about 1085 Public & Private Trusts. During the year, additional 37 Wills were added making total 1110 Wills in its custody for execution.

At present, the Company manages properties both movable and immovable of 72 clients under the Power of Attorney. The Company also acts as the Trustees in respect of 170 policies under Married Women''s Property Act and as Court appointed Guardian of minor''s property in 6 cases.

The net profit of METCO for F.Y. 2015-16 is Rs.41.01 lakh. It has for the frst time (Maiden) proposed Dividend of 10% for the year 2015-2016 to its Shareholders.

The Board of Directors has passed New Memorandum of Association and Article of Association paving way to the Company to undertake different types of other financial Services.

9. IMPLEMENTION OF OFFICIAL LANGUAGE POLICY

During the year 2015-16, the Bank has achieved various remarkable achievements in the field of Official Language implementation:

Mumbai based prestigious Institution in the feld of Hindi, ''Aashirvad''awarded following trophies in a grand function held on 23.09.2015 to the Bank:

''RajbhashaGourav''Award to Bank''s General Manager (HRM and Rajbhasha) Shri Manoj Biswal.

''Special Award'' to Bank of Maharashtra for Better Hindi Implementation during the year 2014-15.

On 07th October, 2015 Hindi day function was held in Head Offce, Pune. Shri S. Muhnot, Chairman & Managing Director of the Bank presided over the function. Dr. Sunil Deodhar, renowned Hindi litterateur & Programme Executive of Akashvani Pune was the Chief Guest. Shri Manoj Biswal, General Manager, HRM & Rajbhasha was also graced the Function, Bank''s Executives, Officers & Employees were also present.Bank''s Internal Rajbhasha Trophy Scheme winner Zonal Offces, Branches and Head Office Departments were awarded during the function.

An All India Rajbhasha Seminar was organized in Bengaluru on 28th and 29th December, 2015 for all Official Language Officers of the Bank. Shri S. Muhnot, Chairman & Managing Director of the Bank inaugurated the seminar. Shri Manoj Biswal, General Manager, HRM & Rajbhasha guided all the participants.

Rajbhasha Vibhag, Head Office, Pune published a collection of story stories ''Anubhuti''written by bank''s own officers and employees.

As per instructions issued by DFS, Ministry of Finance, Govt. of India a bridge-building exercise between Hindi and other Regional Languages, our bank sponsored numerous Hindi and Regional language programmes in various Zones. Sponsored programmes include literary meets, dramas, folk music and cultural programme.

Monthly Rajbhasha E-Patrika is being regularly published every month. As a new initiative Brail script of Rajbhasha E-Patrika is also published for the benefit of visually challenged employees of the Bank.

During its visit on 17th September, 2015 to Lucknow, Committee of Parliamentary Committee on Official Language reviewed Official Language Implementation work of Bank''s Lucknow Zonal Offce. The honourable members of the Committee expressed their satisfaction regarding progressive use of Hindi and the implementation of new initiatives by the Bank.

Department of Financial Services, Ministry of Finance, Government of India, New Delhi, India has organized All India Rajbhasha Seminar & Review Meeting in Jaipur in the third quarter of 2015-16 on 06th and 07th November, 2015. Our Bank''s General Manager Human Resources Management and Rajbhasha, Shri Manoj Biswal represented the Bank in the programme and addressed the executives of all banks.

Joint Director, Department of Financial Services, Ministry of Finance, Government of India, New Delhi, Jaipurhas inspected our Jaipur Zonal Offce on 05.11.2015. He appreciated Hindi work of Jaipur Zonal Office.

Bank of Maharashtra is convener of Town Official Language Implementation Committees of Mumbai, Pune, Solapur, Latur & Jalgaon. All the five Town Official Language Implementation Committees convened by the Bank conducted various activities throughout the year and organized meetings as per schedule.

Our bank was awarded first prize in "C" Region on 26th November, 2015 by Town official Language Implementation Committee (Bank), Kolkata.

Our bank was awarded Second prize by Town official Language Implementation Committee (Bank), Nagpur.

10. SECURITY

Proactive steps were taken in view of the security requirements at the branches and for Bank''s staff and also for provisioning of physical security infrastructure at all branches. This was done after analysis of the threat perception, current crime scenario, crime pattern, modus operandi of bank robberies, the breaches of security and fre incidents besides equipping and training the security personnel and other bank staff to counter any such eventuality.

11. DIRECTORS''RESPONSIBILITY STATEMENT

The Directors confirm that in the preparation of the annual accounts for the year ended 31.03.2016:

- The applicable accounting standards of the Institute of Chartered Accountants of India, have been followed along with proper explanation relating to material departures, if any;

- The accounting policies framed in accordance with the guidelines of the Reserve Bank of India, are consistently applied and proper disclosures are made for changes, if any;

- Reasonable and prudent judgment and estimates were made so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and the profit of the Bank for the year.

- Proper and sufficient care was taken for maintenance of adequate accounting records in accordance with the provisions of applicable laws governing banks, in India; and

- The accounts have been prepared on a going concern basis.

12. CHANGES IN THE BOARD OF DIRECTORS

- During the year 2015-16, the following changes took place in the Board of Directors:

Shri R. Thamodharan was elected as Shareholder Director of the Bank w.e.f 30.06.2015.

Dr. Archana R. Dholakia was appointed as Part time Non Official Director of the Bank w.e.f 28.01.2016.

13. ACKNOWLEDGEMENTS

The Board of Directors wishes to express sincere gratitude to the Government of India, the Reserve Bank of India, the Securities and Exchange Board of India, Insurance Regulatory and Development Authority, Indian Banks''Association and Stock Exchanges and CDSL for their valuable advice and support; to the customers and shareholders for their patronage; to the correspondents and associates for their co- operation and to all the members of staff of "Mahabank Family" for their unstinted commitment and contribution to the overall development of the Bank.



For and on behalf of the Board of Directors



Place: Pune (S. Muhnot)

Date: 12 May, 2016 Chairman and Managing Director

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Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting the Annual Report of the Bank with the audited Balance Sheet, Profit and Loss Account and the Report on Business and Operations for the year ended March 31,2015.

3.7 Vigilance:

As a measure of strengthening preventive vigilance in the bank, the vigilance inspection of the select branches was undertaken during the year based on their risk categorisation and accordingly 138 branches have been inspected during the year to ensure that the system and procedures laid down by the bank are followed by the branches. Zonal offices have to ensure the removal of any deficiencies observed during such inspection.

In compliance to regulatory guidelines, a Fraud Monitoring Cell has been set up under administrative control of Risk Management Department since July-14. This will facilitate effective investigation in fraud cases and prompt as well as accurate reporting of fraud cases to proper regulatory and law enforcement authorities including Reserve Bank of India.

3.8 Compliance:

The Bank has put in place a Compliance Policy, based on the guidelines of Reserve Bank of India. The Compliance Department headed by Chief Compliance Officer monitors the compliance functions. It ensures the implementation of the statutory / regulatory guidelines coming into force from time to time. The issues relating to regulatory / statutory compliances are addressed appropriately. Submission of various regulatory returns is also monitored.

3.9 Marketing and Publicity:

Bank of Maharashtra Introduced a Premium Savings Bank Deposit Scheme "Purple Privileges" for High Net worth Individuals(HNIs) covering specialized services to the customers having quarterly average balance (QAB) of Rs. 3 Lakh in their Savings Bank account.

The slew of benefits offered to the account holder under the product include

- Assistance of Dedicated Relationship Manager

- Specially designed Purple lounges

- Free unlimited No. of Debit card transactions at ATMs of our Bank and any other banks.

- Higher Transaction Limit on ATM-cum-Debit card(per day)

- Free NEFT/RTGS through Internet Banking etc. Features of the product also include:

Personalized ATM-cum-Debit Card and Cheque Books,50% concession in processing fees of retail Loans,200 free Personalized Cheque leaves p.a., Free (100% concession on annual maintenance charge) Gold Credit Card, Reward Points and Free Demat account facility for the first year.

3.10 Citizen''s Charter:

The Bank has adopted the Charter since 2000-01, which details the duties and responsibilities of the Bank towards its customers. The charter is displayed at all the branches and Bank''s website. The Bank has also adopted a citizen''s charter of RBI on exchange of notes and coins.

4. SOCIAL BANKING

4.1 Priority Sector Lending

It has been the constant endeavor of the Bank to facilitate equitable and sustainable economic development by timely and hassle-free availability of credit for productive purposes to Small and Marginal Farmers, Micro and Small Enterprises, Retail Traders, Professional and Self Employed, Women Entrepreneurs and entrepreneurs from economically weaker sections.

The outstanding advances under Priority Sector as of 31st March, 2015, aggregates to Rs. 39,095 Crore constituting 41.76% per cent of the Adjusted Net Bank Credit. (growth of Rs. 4,269 Crore, 12.26% over last year).

4.2 Agriculture

The Bank disbursed Rs. 6799.90 Crore for agriculture and allied activities during the year 2014-15. The total outstanding advances to agriculture sector reached a level of Rs. 15,521.30 Crore as on 31.03.2015 (growth of 18.56 per cent). Bank focused on growth of investment credit under Agriculture during the year 2014-15 and disbursed Rs. 1,300 Crore. Bank also entered into strategic tie-up arrangements with Tractor Manufacturers, Micro Irrigation Companies for promoting farm mechanization and micro irrigation activities during the year.

The Bank undertook awareness/sensitization programmes for all the branches for increasing advances to agriculture by providing hassle free credit to farmers.

4.2.1 Mahabank Kisan Credit Card (MKCC)

This scheme gained popularity especially in rural areas where it is being propagated successfully and vigorously. The Bank has issued total 4,92,683 Kisan Credit Cards to farmers. Credit flow to MKCC beneficiaries has reached to the level of 5,597.89 Crore as on 31.03.2015 (growth of 29.80 %).

4.3 Micro, Small and Medium Enterprises (MSME)

SMEs are recognized as a major growth engine for the Indian economy. They generate opportunities for direct and indirect employment by facilitating use of natural resources and local skills to stem the tide of migration to urban areas and promote low investment enterprises. Finance is made available to viable enterprises at an attractive and low rate of interest. On line enquiry portal is made available on the Bank''s website.

Our Bank has adopted Simplified Loan Application for MSEs and the same is displayed on the Bank''s website. The Bank has also adopted Bank''s Code of Commitment to Micro and Small Enterprise and the same is displayed on the Bank''s website.

The Bank''s lending to Micro, Small and Medium Enterprises which was at the level of Rs.15,098 Crore as at 31.03.2014, increased to Rs.16,796 Crore as at 31.03.2015(growth of 11.24 per cent).

For promoting finance under this category, Bank has entered into strategic tie up arrangements with Truck / Vehicle / Tractor / Passenger car manufacturers. Bank has also entered into an MoU with Bharatiya Yuva Shakti Trust for Credit facilitation and hand holding of the Micro entrepreneurs specially under Women and SC/ST categories.

Centralized Processing Cell have been set up at all Zonal Offices for speedy disposal of MSME proposals.

Bank has launched 5 new products for financing to MSME borrowers,

1. Maha MSME Project Loan Scheme

2. Maha MSME Machinery/Equipment Scheme

3. Maha MSME Cash Credit Scheme

4. Maha MSE Collateral Free Term Loan Scheme

5. Maha MSE Collateral Free Cash Credit Scheme

Bank has been awarded best MSME Bank Award 2014 for large Bank- Runner up category, by the Chamber of Indian Micro, Small and Medium Enterprises (CIMSME).

4.3.1 Coverage under CGTMSE Scheme

Under Credit Guarantee Fund Scheme for Micro, Small and Medium Enterprises of Government of India credit facilities up to Rs..100.00 lakh are covered, wherein no collateral security and third party guarantee are insisted by the Bank. For the accounts covered under this scheme, Bank is bearing 50% annual guarantee fee for loans above 10.00 lakh and entire annual guarantee fee for loans below 10.00 lakh. The Bank has sanctioned loans of Rs.1805.13 Crore to 17,058 borrowers under this scheme up to March 2015. During the current FY, coverage under Credit Guarantee Fund Scheme has increased by 36.11%.

5. IMPORTANT SCHEMES/ PROJECTS OF THE BANK

5.1. Credit Flow to Retail Sector

The Bank is providing retail loans to salaried persons, professionals, businessmen and pensioners for purchase, repair, renovation of housing properties, plots, consumer durables, two/four wheeler vehicles other personal needs, education etc. The retail loan portfolio of the bank is Rs.11817.49 Crore.

5.2. Mahabank Gold Loan Scheme

Gold ornaments are the traditional and inherited form of savings among the people in India. Being one of the most liquid and precious asset, it serves as a dependable and acceptable form of security to raise loans for meeting immediate financial needs for business, agricultural, consumption purposes such as marriage, medical, educational expenses etc. People borrow money by pledging Gold Ornaments at very high rate of interest. To tap the potential of gold loans as a lucrative asset and to meet the credit requirement of our customers, Bank has launched a new retail loan product "Mahabank Gold Loan Scheme for Retail Purposes" w. e. f. 26.09.2014. With a view to meet the credit requirement of our customers, Bank has launched a new retail loan product "Mahabank Gold Loan Scheme" w. e. f. 01.11.2010. The total portfolio of Gold Loan of our Bank as on 31.03.2015 is Rs. 92.81 Crore.

5.3. Housing loan to public

The Bank has in place Housing Loan Scheme to meet the needs of all economic segments including NRIs. Financing housing sector in rural and urban parts of India is a thrust area. The housing loan portfolio of Bank is Rs. 9868.84 Crore as on 31.03.2015, which constitutes 83.51% of total retail portfolio of the Bank. The housing loan schemes of the Bank were revisited and revised schemes were launched like "purchase / construction of new / existing house / flat, repairs / renovation / alteration of existing house / flat, purchase of plot and construction thereon". The Bank has recently launched "Maha Combo Loan Scheme" for purchase of house and a car taken together..

5.3.1 One per cent Interest Subvention on Housing Loan up to Rs.15.00 Lakh.

As per GOI guidelines, Bank has provided 1% interest subvention to borrowers, who availed housing loans up to Rs.15.00 lakh for construction purpose of house where

5.3.2 Mahabank Top-Up Loan Scheme

In order to extend additional credit support to our regular housing loan borrowers, Bank has launched "Mahabank Top Up loan Scheme" w. e. f. 12.09.2014. Under this scheme credit is extended for repair / renovation / furnishing of house, children''s education, Marriage of Children, Medical treatment, buying a vehicle or hi-tech gadgets etc. We have established a call centre at H. O. to make outbound calls to good housing loan borrowers for last two years. Loans upto Rs.25 lacs can be considered under the scheme.

5.4. Model Educational Loan scheme

With the objective of ensuring that all deserving students get opportunity to pursue higher education, the Bank implemented a Model Educational Loan Scheme as per IBA guidelines. As of March 2015, the Bank had lent Rs.702.82 Crore to 29,516 students. The Bank has provided the facility of submission of application for education loan through web-access (on line) also. Bank has also introduced a new feature called "Pre Approved Education Loan", to its "Model Education Loan Scheme" to address the requirement of multiple sanction letters required by students applying for study at foreign universities. Bank also has "Model Education Loan Scheme for Vocational Courses" where loans can be sanctioned for completion of short duration job oriented skill development programmes. A loan up to 1.50 lakh can be sanctioned under the scheme.

5.5. Centralized Processing of loans

Bank has established Centralized Processing Cells for retail / commercial advances at all its 34 Zones for hassle free and due diligence of loans with aim to improve turn around time.

5.6. Micro Finance

The Bank has always recognized the importance of credit to rural and urban poor for taking economic activity. The SHGs have proved to be effective instruments for empowerment of women Bank has specialized SHG branches in all six lead districts and at Goregaon, Mumbai.

As on 31.03.2015, there were 123643 SHGs formed by the Bank, out of which 103028 SHGs have been linked with the bank credit with outstanding of Rs..161.10 Crore as on 31st March 2015.

5.7. Assistance to SC/ST beneficiaries:

The Bank has been actively extending finance to SC/ST beneficiaries through various schemes. Total finance as on 31.03.2015 to SC/ST beneficiaries stood at Rs.1642.67 Crore, constituting 18.11 per cent of advances to weaker sections.

5.8. Weaker Sector Advances:

Bank is providing credit facilities to small / marginal farmers, share cropper, landless labor, SC /ST Beneficiaries, Self Help Groups, Joint Liability Groups, The total portfolio of weaker Sector advance of our Bank as on 31.03.2015 stood at Rs. 9068 Crore constituting 9.69% of ANBC.

5.9. Advances to Minority Community

A special cell has been set up at Head Office to review and ensure smooth flow of Credit to minority community. The branches were identified in minority concentrated districts and special targets were allotted to these branches for lending to minority communities. As of March 2015, advances to Minority

5.10 National Pension System (NPS Lite Swavalamban)

NPS Lite Swavalamban was made live in July 2013 and total 1806 branches are registered as NLCC (NPS Lite Collection Centre) with NSDL for collecting contrbution under the scheme. 16293 accounts were opened under the scheme up to 31.03.2015. There are 6355 accounts under NPS general scheme.

5.11 ALTERNATE DELIVERY CHANNELS

5.11.1 ATMs

Bank has 1849 ATMs installed across the country as at 31/03/2015. With relocation of 182 Lobby ATMs to viable sites, continuous monitoring our ATM services are ensured and 1775 ATMs are in service as at 31/03/2015. Bank is issuing VISA, RUPAY and EMV cards.

Transaction volume for Mar 2015 has been 53.08 lacs (On us 25.33 lacs and Off us 27.75 lacs). Average transactions per ATM per Day were 96 for the month of March 2015 and are expected to reach the industry level average in the ensuing quarter. Bank has installed two ATMs with display of Bank''s Services and products in two Malls of Pune. Bank is in the process of installing ATM at Pune Airport.

5.11.2 INTERNET /SMS/Phone Banking

Bank could achieve an increase of 23% in Internet Banking, 29% in Phone Banking and 35% in SMS banking over the previous year.

With continuous follow up and increase in net security through the Mahasecure for IBN users, substantial rise in users/online transactions is expected.

5.11.3 MOBILE BANKING

Bank launched Maha-mobile, a New revised Mobile banking Application on 28/01/2015 and registered 22803 Users for this technology based service.

5.12 Senior Citizen

Bank has specialized branches for Senior Citizens exclusively for catering their banking needs at Cuffe Parade, Mumbai and at Bajirao Road, Pune. Bank is giving 50 basis points additional interest on their term deposits. At present bank is catering to 33 lacs saving accounts of Senior Citizens.

5.13 Concept Relationship Managers and Compliance thereof

Bank has implemented concept of Relationship Managers to drive business growth with better customer service to High Networth Individuals (HNI) customers. Total 391 Relationship Managers are exclusively posted at branches to attend all customer needs of these HNI customers.

6. CORPORATE SOCIAL RESPONSIBILITY

The Rural Development Centers at Hadapsar- Pune and Bhigwan in Pune District of Maharashtra have been undertaking various rural developmental activities for the benefit of farmers'' viz. Vermi compost, Re-development of Saline Soils, Soil Testing etc. Bank has established Soil testing lab (STL) through MARDEF Trust at RDC Bhigwan. The Soil Testing Laboratory has analyzed 11,257 Soil and Water samples in the year 2014-15 and accordingly counseling is done. Farmers from the districts of Pune, Ahmednagar, Sholapur and Satara are taking benefit of the lab.

A Trust viz. Mahabank Agricultural Research and Rural Development Foundation (MARDEF) established by the bank, undertakes various projects and village improvement programmes. MARDEF is imparting training to farmers on various subjects in Agriculture. Trust has implemented 88 training programmes for farmers at RDC Bhigwan and Hadapsar and has benefited 2,915 farmers from April 2014 to March, 2015.

The Bank has established Seven Mahabank Self Employment Training Institutes (MSETI) for providing training to rural youth and women to enable them to acquire skills for self-employment through small business enterprises. The Institute has centers located at Pune, Nagpur, Aurangabad, Amravati Jalna, Thane and Nasik. The Institute has so far imparted training to 16,600 educated unemployed youths. The settlement rate is 60 per cent.

Gramin Mahila Va Balak Vikas Mandal (GMVBVM), an NGO formed by Bank of Maharashtra and National Institute of Bank Management is actively involved in formation, nurturing, training and ensuring linkage of SHGs to Bank Credit.

The Bank has opened Financial Literacy Centers in Six Lead Districts namely Pune, Nask, Aurangabad, Satara, Jalna and Thane for creating awareness about banking schemes.

Bank has helped various NGOs during the year extending financial support to acquire necessary inputs for carrying their activities. These include the following:

- Fixing of artificial limbs to the needy patients.

- Diesel Generator set for the school meant for physically challenged children

- Building / classroom / Kindergarten equipments for the needy, mentally retarded and cerebral palsy children, cancer patients and Old age home.

- Conducting cancer detection camps in slums for the needy.

Moreover Bank has always stood for the cause of society by contributing at large for improving medical facilities, vocational training, basic amenities etc. Bank is also helping emerging sports persons at budding stage by sponsorships and providing financial assistance to bring the glory to the Nation and contributing to social cause.

With a view to publicize Bank''s various products and also brand image coupled with corporate social respons bilities, Bank has sponsored various programs like "Sponsorship to Lila Poonawala Foundation for scholarship to 10 Economically poor Girls having excellent track record", "Sponsorship to Army H.Q at Maharashtra , Guajrat and Goa for Durand Cup 2014", Sponsorship to Rashtriya Madhyamic Sahitya Abhiyan for Teacher Training Program 2014", "Donation to Bhagwan Mahaveer V klang Sahayata Samiti, Jaipur for artificial limbs", "Donation to ISKCON Food Relief Foundation for purchase of Mini Truck which is useful in Mid Day Meal Program", "Donation to Vipassana Kendra Pushkar for its various projects viz. Rain Water Harvesting and Recycling projects, Solar Hot Water projects, Drinking Water Facilities Project" etc. Bank has also donated to Community Aid and Sponsorship Program (CASP) for welfare of children from poor sections of society.

Following CSR activities were undertaken in Pune.

a) Water Cooler to Baneshwar temple.

b) Sponsorship for water tank construction at Jejuri Fort.

c) Sponsorship for uniform of mentally challenged students at Jeevan Wardhani school, Saswad on Republic day.

SR NO Name of the girls

1 Aishwarya Nandkumar Bodke, Age 16 years.

2 Aishwarya Sunil Manjrekar, Age 17 years.

3 Archana Sanjay Dhaybar, Age 17 years.

4 Dhanashree Laxman Lad, Age 16 years.

5 Harshu Dattatray Pawar, Age 17 years.

6 Komal Rajendra Gorad, Age 17 years.

7 Pooja Laxman Warekar, Age 16 years.

8 Prajakta Rajesh Naidu, Age 17 years.

9 Pratima Laxman Thorat, Age 17 years.

10 Rupali Nandu Rasal, Age 17 years.

11 Tejal Rakhamaji Somoshi, Age 17 years.

12 Vishakha Vasant Dhole, Age 17 years.

7. LEAD BANK SCHEME

7.1 Lead Bank Scheme

The Bank has Lead Bank responsibility in seven districts of Maharashtra State viz. Aurangabad, Jalna, Nasik, Palghar, Pune, Satara and Thane. Every year district credit plans for the districts are prepared and implemented with the cooperation of other banks as well as in coordination with District Collectors of respective Districts.

7.2 State Level Bankers'' Committee

The Bank is the Convenor of State Level bankers'' Committee (SLBC) for the State of Maharashtra and prepares State Annual Credit Plan. The plan for the year 2014-15 was for Rs.1,57,292/- crore which is highest in the country. The same was approved in a special meeting held under the Chairmanship of Hon''ble Chief Minister of Maharashtra. SLBC also ensures holding of quarterly meetings regularly to oversee the implementation of State Annual Credit Plans, priority sector lending and Govt. sponsored schemes in the State. Apart from regular SLBC meetings, various other meetings are also organized by SLBC to coordinate between various member banks, State Government, Government Agencies, Reserve Bank of India, NABARD and the Central Government. SLBC coordinates a network of more than 10,000 bank branches in the state.

In the FY 2014-15, the State suffered continual onslaught of natural calamities, the brunt of which is mostly borne by Agriculture and related activities. SLBC has always been very proactive in such calamities by issuing necessary guidelines in respect of relief measures, organizing special meetings and guiding the members whenever necessary.

As SLBC convener, Bank of Maharashtra coordinated implementation of Pradhan Mantri Jan Dhan Yojana (PMJDY) in the State of Maharashtra. A total of 93.97 lakh accounts were opened in the State and the State was declared as saturated for the purpose of opening of accounts. The process of opening of accounts continues.

7.3. FINANCIAL INCLUSION / PMJDY:

The Bank actively participated in the Pradhan Mantri Jan Dhan Yojana (PMJDY) announced and launched by the Prime Minister of India on 15.08.2014 and 28.08.2014 respectively.

Survey of all allotted 3051 rural Sub Service Areas (SSAs) and 755 urban wards were conducted for identification of households having no bank account. The Bank has engaged 2,974 Bank Mitrs through corporate BCs and under own BCA model in all the allotted SSAs. The Bank Mitrs are being paid monthly remuneration regularly and minimum remuneration is ensured by paying fixed monthly pay and variable commission.

Total 17.71 lakh Savings Bank accounts have been opened by the Bank during the PMJDY campaign period and RuPay ATM Debit cards have been issued to all the accountholders. Savings accounts of all the identified uncovered households have been opened. The Bank has mobilized Rs.206.14 Crore in these accounts opened during the campaign period. The Bank also implemented Aadhaar based account opening using e-KYC. The Bank is live on Aadhaar Enabled Payment System (On- us and Off-us) and RuPay card PIN Based transactions. The Bank has been processing the DBT (Direct Benefit Transfer) and DBTL (LPG Gas Subsidy) for the accountholders. Bank is having highest number of AEPS transactions in banking industry.

The Bank is in the process of implementation of micro insurance products and pension scheme as per the directions of the Ministry of Finance.

The Bank has a full-fledged call centre with toll free number 18001022636 for redressal of PMJDY grievances.

The Financial Literacy Material has been prepared in vernacular languages and supplied to all Branches / Bank Mitrs for supplying the same to accountholders during FLC camps. Bank has been awarded for excellent performance in PMJDY by Federation of Industry Trade and Services, New Delhi.

8. SUBSIDIARIES/JOINT VENTURES AND SPONSORED INSTITUTIONS

8.1 Performance of Regional Rural Bank

Maharashtra Gramin Bank (MGB) is a Regional Rural Bank sponsored by the Bank, having its Head Office at Aurangabad, Maharashtra state. Total no of branches as on 31.3.2015 stood at 391 in its area of operation covering 17 out of 36 districts of Maharashtra State.

All 391 branches and controlling offices are now under CBS. MGB opened 13 new branches during this year.

The percentage of CASA to total deposit is 58.07 %.Operating profit of MGB is 95.25 Crore (growth of 24.83 %).

Under Pradhan Mantri Jandhan Yojana surveys of all allotted 898 SSAs and 80 wards were conducted for identification of households having no bank account. The Bank has engaged 898 BCAs in all allotted SSAs. Total 3.06 lakh accounts have been opened during the PMJDY campaign period and "RuPay ATM debit cards" have been issued to all the account holders.

During this year 2014-15, MGB has grown by 18.64 % in total deposits and 21.60 % in advances.

8.2 The Maharashtra Executor and Trustee Company Pvt. Ltd.

Maharashtra Executor and Trustee Company Pvt. Ltd. (METCO), the 100% subsidiary of Bank of Maharashtra was established in 1946 with an aim to provide services auxiliary to banking such as:

- Consultation, Drafting and Execution of will

- Consultation, Drafting and Management of Private Trusts / Public Trusts

- Management of investments and house properties as attorney

- Guardianship of minor''s property

- Consultation for sale/purchase of property

- Filing of I-Tax Returns for individuals

The Company is located at Pune having its branch units at Pune, Vashi-Mumbai, Thane and Nagpur. It is managing about 1100 Public and Private Trusts. During the year, additional 25 Wills were added making total 1086 Will in its custody for execution.

At present, the Company manages properties both movable and immovable of 82 clients under the Power of Attorney. The Company also acts as the Trustees in respect of 170 policies under Married Women''s Property Act and as Court appointed Guardian of minor''s property in 6 cases.

The net profit of METCO for F.Y. 2014-2015 is Rs..27.67 lakh.

9. IMPLEMENTION OF OFFICIAL LANGUAGE POLICY

During the year 2014-15, the Bank has made various remarkable achievements in the field of Official Language implementation.

Mumbai based Prestigious Institution in the field of Hindi, ''Aashirvad'' awarded following trophies in a function held on 31.10.2014 to the Bank:

- ''Rajbhasha Ratna'' Award to Bank''s Chairman and Managing Director Shri S. Muhnot.

- ''Rajbhasha Gourav'' Award to Bank''s General Manager (HRM and Rajbhasha)

Shri Narendra Kabra.

- Special Award to Bank of Maharashtra for Better Hindi Implementation during the year 2013-14.

On 23rd September, 2014 Hindi day function was held in Head Office, Pune, where Bank''s Internal Rajbhasha Trophy Scheme winner Zonal Offices, Branches and Head Office Depts for the year 2013-14 were awarded.

An all India Seminar was organized in Jaipur on 12th and 13th December, 2014 for all Official Language Officers of the Bank.

On 3rd March, 2015, 30th meeting of Maharashtra State Level Banker''s Committee (Rajbhasha) was held at Head Office, Lokmangal, Pune; wherein shields were presented to the winner member banks and financial institutions of state level Rajbhasha Shield competition.

Rajbhasha Vbhag, Head Office, Pune published two unique publications during the year. One is a cartoon book ''Bachat ki Kahani'' meant for school children under financial literacy program and the second one ''Kshitiz'' is a compilation of poems written by bank''s own officers and employees.

As per instructions issued by DFS, Ministry of Finance, Govt. of India under Rajbhasha Prayog Aapsi Samvad Sarthak Disha as bridge-building exercise between Hindi and other Regional Language, our bank sponsored numerous Hindi and Regional language programs in various Zones. Sponsored programs include literary Meets, Dramas, Folk music and Cultural programs.

To promote Use of Hindi in day-to-day work Rajbhasha Vibhag, Head Office, Pune started ''Aaj Ka Shabd'' in bilingual form on ULC log-in page of bank''s intranet daily. As a new initiative Monthly Rajbhasha E-Patrika is being regularly published since July, 2014.

During its visit on 08th January, 2015 to Nagpur TOLIC, Drafting and Evidence Committee of Parliamentary Committee on Official Language reviewed Official Language Implementation work of Bank''s Nagpur Zonal Office, as member of TOLIC, Nagpur.

Bank of Maharashtra is the convener of 04 Town Official Language Implementation Committees namely Mumbai, Pune, Solapur and Latur. This year Town Official Language Implementation Committee (Bank) Pune was conferred Ist prize of prestigious Indira Gandhi Shield for better coordination of the committee. Also, Mumbai Regional Implementation Office (West), Department of Official Language, Ministry of Home Affairs, GOI awarded Ist prize for ''B'' Region to TOLIC (Bank) Pune.

All four Town Official Language Implementation Committees convened by the bank conducted various activities throughout the year and organized meetings as per schedule.

Town official Language Implementation Committee,Hyderabad awarded 2nd prize to Bank''s Zonal Office, Hyderabad on

19.05.2014 for better use of Official Language.

Town official Language Implementation Committee, Jalgaon awarded 2nd prize and trophy for the year 2013-14 to Zonal Office, Jalgaon for better use of Official Language.

During the year 2014-15, Deputy Director (O.L.), Regional Implementation Office, Department of Official Language, Ministry of Home Affairs inspected the progressive use of Hindi at our Delhi, Nagpur, Mumbai City, Bhopal and Jalgaon Zonal Offices.

Shri Deepak Bhalchandra Karpe, Dy.Manager posted at our Sundrel branch (Indore) has been awarded IInd prize in RBI''s Inter-bank Hindi Essay competition for the year 2014 in under Linguistic Group ''B''.

10. Awards for 2014-15

Bank received following awards for current year 2014-15.

A) BFSI Award by World HRD Congress

1. Best Bank Award.

2. Bank with Most Admired Services.

3. Bank with Best Customer Services.

4. Bank with Best Technology orientation.

5. Corporate Communication Awards.

B) "Best Bank for Managing IT risk among mid size Banks" award from Dr. Raghuram Rajan, Governor, Reserve Bank of India on 15th October, 2014.

C) Best MSME bank Award - Large bank - Runner -up by CIMSMS ( Chamber of Indian Micro, Small and Medium enterprises.

11. DIRECTORS'' RESPONSIBILITY STATEMENT

The Directors confirm that in the preparation of the annual accounts for the year ended 31.03.2015:

- The applicable accounting standards of the Institute of Chartered Accountants of India, have been followed along with proper explanation relating to material departures, if any;

- The accounting policies framed in accordance with the guidelines of the Reserve Bank of India, are consistently applied and proper disclosures are made for changes, if any;

- Reasonable and prudent judgement and estimates were made so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and the profit of the Bank for the year.

- Proper and sufficient care was taken for maintenance of adequate accounting records in accordance with the provisions of applicable laws governing banks, in India; and

- The accounts have been prepared on a going concern basis.

12. CHANGES IN THE BOARD OF DIRECTORS

- During the year 2014-15, the following changes took place in the Board of Directors:

- Dr. Sunil U. Deshpande, ceased to be Director wef.16.03.2014.

- Dr.S.Rajagopal ceased to be Director wef.10.06 2014.

- Shri.G. Sreekumar was appointed as RBI nominee Director wef.10.06.2014.

- Shri.Premchandra Amolakchand Sethi was elected as Shareholder Director wef.27.06.2014

- Shri. R C Agrawal, ceased to be a Director wef.05.08.2014

- The Board of Directors place on record their sincere appreciation for the valuable contribution made by the outgoing Directors.

13. ACKNOWLEDGEMENT

The Board of Directors wishes to express sincere gratitude to the Government of India, the Reserve Bank of India, the Securities and Exchange Board of India, Insurance Regulatory and Development Authority, Indian Banks'' Association and Stock Exchanges and CDSL for their valuable advice and support; to the customers and shareholders for their patronage; to the correspondents and associates for their co- operation and to all the members of staff of "Mahabank Family" for their unstinted commitment and contribution to the overall development of the Bank.

For and on behalf of the Board of Directors

Place : Pune (S. Muhnot)

Date : 14th May, 2015 Chairman and Managing Director

---

Mar 31, 2014

The Directors have great pleasure in presenting before you the Annual Report of the Bank along with the audited Balance Sheet, Profit ACY- Loss Account and the Report on Business and Operations for the year ended March 31, 2014.

2. PERFORMANCE OF YOUR BANK 2013-14

2.1 Business

Total business of your Bank stood at X 2,07,172 crore as on 31.03.2014, as compared to X 1,70,734 crore a year ago, registering a year-on-year growth of 21.34 per cent.

2.2 Deposits

Total deposits of the Bank stood at X 1,16,803 crore, up by 23.8 per cent over the level of X 94,337 crore as at the end of March 2014.

Current ACY- Savings Bank (CASA) deposits increased to X 41,921 crore as on 31.03.2014. Share of CASA deposits in total deposits of your Bank stood at 35.89 per cent as on 31.03.2014 which is one of the highest among Public Sector Banks.

2.3 Credit Deployment

The Bank has put in place a lending policy in conformity with the guidelines issued by RBI and also the lending norms of the Government of India. It emphasizes on qualitative credit growth and ensures compliance with regulatory requirements as well as the prudential exposure limits.

Gross advances of the Bank increased from X 76,397 crore as on 31.3.2013 to X 90,369 crore as on 31.3.2014 with growth of 18.29 per cent. Efficient service with customer centric approach has enabled the bank in registering growth, in-line with the banking industry during the year 2013-14.

Several steps have been taken for improving credit delivery mechanism along with improvement in turnaround without compromising the overall quality of credit.

Mid Corporate shall continue to be one of the thrust areas for the bank in future for increasing yield on advances and dispersion of credit risk.

Efforts are continued to improve portfolio yield by reshuffling the portfolio mix.

2.3.1 Sectoral Deployment of Credit

While financing to various segments of the economy, the Bank has endeavored to maintain a diversified credit portfolio, with a view to ensuring credit dispersion across sectors. The Bank has continued its efforts to support core, manufacturing and priority sectors as well as infrastructure projects, which serve to drive economic growth. This focus of the Bank will continue in future, in line with the national economic growth priorities.

Industry wise credit deployment as on 31.03.2014 is as under.

Percen- Percen- Outsta- tage to Outsta- tage to Sr nding nding No. Credit deployed as on total as on total credit credit 31.03.2014 31.03.2013 X in crore outsta- X in crore outsta- nding nding

1 Industry 48889.64 54.10 ACU- 41307.25 54.49 ACU- of which

i. Infrastructure 13004.99 14.39 ACU- 12223.59 16.13 ACU-

ii. Chemicals, Dyes, 1578.92 1.75 ACU- 1387.15 1.83 ACU- Paints, etc

iii.Petroleum 2270.61 2.51 ACU- 1552.71 2.05 ACU-

iv. Iron ACY- Steel 2689.22 2.98 ACU- 1640.21 2.16 ACU-

v. NBFCs ACY- Trading 15111.27 16.72 ACU- 12671.06 16.72 ACU-

vi. Engineering 2946.42 3.26 ACU- 2496.14 3.29 ACU-

vii.Construction 387.52 0.43 ACU- 318.29 0.42 ACU-

viii. Other Industries 10900.69 12.06 ACU- 9018.1 11.90 ACU-

2 Agriculture 10276.07 11.37 ACU- 7378.35 9.73 ACU-

3 MSME 19062.99 21.09 ACU- 16788.21 22.15 ACU-

4 Housing 8854.16 9.80 ACU- 6578.23 8.68 ACU-

5 Education 622.71 0.69 ACU- 551.59 0.73 ACU-

6 Exports 1880.71 2.08 ACU- 1886.06 2.49 ACU-

7 Commercial Real estate 4793.96 5.30 ACU- 3551.63 4.69 ACU-

2.3.2 Credit Administration and Monitoring

Early warning signals are captured from the CBS system on daily basis for close monitoring of stressed accounts on near real time basis. System generated SMS alerts are sent to the customers to pre-empt delinquency. An integrated web-based reporting has been introduced in the Bank to enable instant communication between branches/Zones/Head Office for effective monitoring of credit portfolio.

The credit quality of borrowal accounts is further monitored through periodical asset performance review, credit audits ACY- stock audits. Timely rescheduling of repayment terms is undertaken in deserving cases.

2.4 Asset Performance

During the Financial Year (FY) 2013-14, total cash recovery in NPAs was X 706.41 crore (last year X 411.22 crore). Of this. recovery in Ledger balance was X 646.46 crore (X 198.73 crore), including recovery in sale of Assets X 242.16 crore (NIL), recovery in written off accounts was X 303.32 crore (X 156.76 crore) and recovery in cases of unapplied interest was X 38.22 crore (X 55.73 crore). This was besides up gradation of NPAs to the tune of X 101.39 crore (X 105.19 crore). This year''s achievement was possible due to intensive follow up adopted by the Branches with the defaulting borrowers through letters, notices, recovery camps, Lok Adalatas, actions under SARFAESI and through DRTs.

To address and improve recovery in small sized NPAs having ledger balances upto X 10.00 lakh, the bank established additional 5 Micro Asset Recovery Cells (MARC) at Zonal offices thereby making total 39 MARCs. The recovery performance through this vertical was encouraging with MARCs recovering X 376.66 crore (X 210.53 crore). The share of recovery of MARCs in total cash recovery of the bank was 54.05 ACU- (51.20 ACU-).

The bank continued during this FY a special ''One Time Settlement''(OTS) scheme and also launched special OTS product (M-zero) for recovery in NPA accounts having ledger balance up to X 5.00 lakh. The total recovery in NPAs under this scheme was X 50.15 crore as against X 38.40 crore in the previous year.

The Gross NPA ratio of the bank stood at 3.16 ACU- during the financial year from 1.49 ACU- as of 31.03.2013. Similarly the ratio of Net NPAs stood at 2.03 ACU- as on 31.03.2014 as against 0.52 ACU- a year ago. The NPA ratios of the Bank are much better than not only of the peer Banks but also of many large Banks.

2.5 Foreign Exchange Business and Export Finance

During the year 2013-14, the Bank has achieved merchant turnover of X 28,370 Crores (X 30,437 Crores) and an inter- bank turnover of X 4,71,327.30 (X 4,14,162 Crores) and earned Forex Profit of X 74.60 Crores (X 60.41 Crores). The outstanding export credit as on 31st Mar 2014 was X 1948.97 as against X 1908.31 as on 31st Mar 2013. The Treasury ACY- International Banking Branch at Mumbai (A category branch) and 33 B Category branches across the country cater to the International business needs of the customers of the Bank. In order to provide prompt service to Non Resident Indian (NRI) clients, Bank has a NRI Cell at Deccan Gymkhana Branch, Pune which provides online remittance facilities for its NRI customers. With a view to enable branches to provide better service to NRI clients, Bank has provided Instant NRI information which is updated on monthly basis.

2.6 Investments

The net investments of the Bank stood at X 37249.58 crore as on 31.03.2014 as compared to X 31430.31 crore as on 31.03.2013. Investments under Held to Maturity (HTM) category consist of 86.97 per cent while Available for Sale (AFS) comprised 12.74 per cent of total investment portfolio as on 31.03.2014. The net interest income from investment activity increased to X 2543.03 crore from X 2231.28 crore during the last year, a growth of 13.97 per cent.

2.7 Borrowings

The borrowings of the Bank as on 31.03.2014 stood at X 8326.47 crore, including refinance availed from RBI. NABARD and SIDBI to the extent of X 2861.08 crore. The total borrowings as at 31.03.2013 were X 12877.49 crore.

2.8 Merchant Banking

The Bank handled 84 issues of Commercial Paper amounting to X 20160.85 crore for its clients as an Issuing and Paying Agent (IPA) during the year and earned a commission income ofRs. 9.52 lakh.

2.9 Depository Services

The Bank is Depository Participant (DP) of Central Depository Services of India Ltd. (CDSL) since September 1999. Account level queries related to Demat account balances etc. are available at the 131 identified branches of the Bank. All the branches of the Bank can open Demat account through the Demat Cell of Mumbai. The Bank also provides free ACI-EASI ACI- facility (through CDSL) to view account position through internet. Query compliance facility is available at Maha Seva (Customer Care Center). The Bank has added tie up with two Share Broking Companies i.e. Reliance Securities Ltd and Ventura Securities Ltd for Maha-e-trade (Online Share Trading) Services for its customers along with existing Religare Securities Ltd. In order to add new customers in its fold under Demat, Banks is offering waiver in annual maintenance charges for the Demat Accounts opened under Rajiv Gandhi Equity Scheme for three years.

The Annual Maintenance Charges and Dematerialization charges (for converting Bank''s physical shares into electronic form) are waived for staff/Ex-staff and share holders of the Bank. The Bank has also introduced Basic Services Demat Account Facility (BSDA).

2.10 Banc assurance

All the branches of the Bank are authorized to sell life and non-life insurance products of Life Insurance Corporation of India and United India Insurance Co. Ltd. under corporate agency arrangements, respectively. The Bank has sold 98929 Non-life Insurance Policies and 30554 Life Insurance policies during the year 2013-14. The LIC accredited 198 branches of the Bank as Bima Bank, besides 17 Zones which were declared as BIMA Zone. The Delhi Zone became Double Bima Zone. The Bank offers group insurance scheme of LIC namely ''Maha Suraksha Deposit Scheme (New One Year Renewable Group Assurance Plan'') a life insurance cover of Rs 1 lakh for deposit account holders. The Bank offers Maha Swasthya Yojana, a Family Floater Group Mediclaim Policy of United India Insurance Co. Ltd. for its customers.

The Bank earned a commission of X 7.32 crore from life insurance, showing growth of 10 per cent and X 4.12 crore for non-life insurance business during the year 2013-14 showing increase of 18 per cent.

2.11 Mutual Fund Activity

The Bank has a tie-up with 25 AMCs (Asset Management Companies) for selling Mutual Fund products. The mutual fund business mobilized by the Bank earned commission income of X 5 lakh during the year.

2.12 Government Business

During the year 2013-14, 544553 challans of Direct Taxes were collected ADs- similarly 1,89,696 challans of Indirect taxes were collectedby the branches. Our Branches are also collecting other state Govt. taxes including GRAS of Maharashtra State and the total number of Challans collected during the Year is 5,41,220. Total commission to the tune of X 2.70 Cr was received on Tax collection business from Central Government and Commission received from states Tax collection business is X 0.72 Cr. The Bank has started processing and crediting monthly pension payments of more than 1,13,624 Central Government, Defence, Railway and Telecom pensioners at Central Pension Processing Cell (CPPC), Pune. The processing and payment for new PPOs/ corrigendum PPOs Master Data base for central Government pensioners etc are being handled by CPPC. This facilitates faster and accurate payment of pension as well as quick settlement of funds by RBI. Timely complaint redressal system has also been established for pension complaint. The commission on Government Business (Pension) for the Year 2013-14 is X 13.57 Cr.

The unique facility of direct ACY- Indirect taxes ACY- VAT collection of Maharashtra is provided by the Bank, at the branch counter in all branches through Maha e-seva services. E-payment of Taxes facility available for net banking customers is also available for direct / Indirect Taxes / VAT payments (for Govt. of Maharashtra). The tax payment facility has been introduced for e-payment of custom duty ACY- the Maharashtra State taxes are collected through integration in Govt. Revenue Accounting System (GRAS) both online and across the counters. The Bank has added Karnataka and Delhi states for collection of state Government commercial taxes. Bank is offering its services in VAT Collection in U.P in all branches.

2.13 Non Interest Income

The non-interest income stood at X 894.19 crore for the year ended 31.03.2014 as against X 912 crore for the year ended 31.03.2013. Non-interest income (other than profit from sale of investment), increased by X 23.20 crore in the FY 2013- 14, showing a growth of 3.02 ACU- over previous year. During the year, income from commission, exchange and brokerage increased by X 53.48 crores from X 491.34 to X 544.82 crores.

2.14 Income, Expenditure and Profitability

The total income of the Bank grew from X 10525.43 crore to X 12850.85 crore indicating a growth of 22.09 per cent during the year.

The detailed income/ expenditure components are as under:

(Rs. in crore)

Particulars 2013-14 2012-13 Variation (per cent)

Interest / discount on 9187.15 7298.50 25.88 advances / bills

Income on investments 2543.03 2231.28 13.97

Interest on interbank lending ACY- 226.48 83.65 170.74 other Interest

Total interest income 11956.66 9613.43 24.37

Non-interest income 894.19 912.00 -1.95

Total Income 12850.85 10525.43 22.09

Interest on deposits 7697.04 5879.25 30.92

Interest on borrowings 107.93 312.27 -65.44

Other Interest expenditure 642.76 388.57 65.42

Staff expenses 1595.76 1187.82 34.34

Other Operating expenses 800.99 608.82 31.56

Total Non interest expenses 2396.75 1796.64 33.40

Total Operating Expenses 10844.48 8376.73 29.46

Operating Profit 2006.37 2148.70 -6.62

Provisions and Contingencies 1620.40 1389.18 16.64

Net Profit 385.97 759.52 -49.18

2.15 Financial ratios

Particulars 2013-14 2012-13

EPS (Rs.) .56 11.88

Cost to Income Ratio (percent) 54.43 45.54

Return on assets (percent) 0.30 0.74

Return on equity (per cent) 5.93 17.32

Book value per share (Rs.) 66.69 67.10

Profit per Branch(Rs. in lakh) 20.42 43.95

Profit per employee (Rs. in lakh) 2.68 5.59

Business per Branch (Rs. in crore) 109.61 98.80

Business per employee (Rs. in crore) 14.39 12.56

Interest income as per cent to Average 9.24 9.33 working funds

Non Interest income as per cent to average 0.69 0.88 working funds

Net Interest Margin (per cent) 2.71 3.10

Operating Profit as per cent to average 1.55 2.08 working Funds

Staff expenses as a percent to average 1.23 1.15 working funds

Dividend (per cent) 10.00 23.00

Net worth (Rs. Crore) 6184.11 5026.57

CRAR ( ACU-) (Basel II) 10.79 Nil

Of which, Tier I CRAR ( ACU-) (Basel II) 7.44 Nil

2.16 Capital from Government of India

During the year, the Bank received equity share capital amounting to X 800 crore (including share premium of X 622.38 crore) from Government of India (GOI) through allotment of shares on preferential basis. With capital infusion, the share holding of GOI in equity share capital increased to 85.21 ACU- as on 31.03.2014.

2.17 Net worth

The Bank''s Net worth increased from X 5026.57 crore as on 31.03.2013 to X 6184.11 crore as on 31.03.2014.

2.18 Capital Adequacy Ratio

The Capital Adequacy Ratio stood at 10.79 per cent as on 31.03.2014, against the minimum 9 per cent prescribed by RBI in terms of Basel III norms. The Common Equity Tier I capital adequacy ratio stood at 7.44 per cent.

2.19 Dividend

The Board has recommended X 1 per share (10 ACU-) being interim dividend as final dividend for FY 2013-14.

3. ORGANISATION AND SUPPORT SYSTEM

3.1 Branch Expansion

During the year, the Bank opened 162 new branches, the largest number of branches opened by the Bank in a financial year since inception. As on 31.03.2014, the total branch network comprised of 1890 branches spread over 29 states and 4 union territories. The branch network includes specialized branches in the areas of foreign exchange. government business, treasury ACY- international banking. industrial finance, small-scale industry and hi-tech agriculture. pension payment, pension processing, retail credit, Self Help Groups and asset recovery.

Area wise classification of branches as on 31.03.2014 is given in the table below:

Sr. No. Classification As on 31.03.13 As on 31.03.14

1 Rural 591 648

2 Semi-Urban 357 424

3 Urban 344 368

4 Metropolitan 436 450

Total 1728 1890

3.2 Human Resources Management

The Bank has put in place a comprehensive HRM Policy that provides the road map for acquiring appropriate ACY- need based human resources, its development through training, job enrichment, reward and recognition for better performance, career progression, welfare and retention.

During the year the Bank recruited 1224 probationary officers and 10 law officers. The Bank has also recruited 487 Clerks during the year.

Inter scale promotions of officers were carried out for promotions to Scales MMGS II and above. Total 1237 officers were promoted to higher scales.

The cadre wise staff position shows that there is net addition of 776 employees during the FY 2013-14. The particulars are as below:

S. No. Particulars March 2014 March 2013

1 Executives 514 418

2 Officers 5576 4589

3 Clerks 5867 6065

4 Sub Staff 2439 2548

Total 14396 13620

To recognize outstanding performance in Banking activities and to motivate others to perform better, various schemes like Performance Linked incentives to all staff of Best Performing Branches etc. are in vogue. Tamiya Branch (Jabalpur Zone) has been awarded the Rolling Trophy in name of Bharat Ratna Dr. Babasaheb Ambedkar for Excellent Performing Branch Category in disbursement and recovery of advances to SC/ST community.

During the year, 1053 employees ceased to be in service on account of retirement, resignation, termination and death.

The Bank has been allocating up to 3 per cent of its net profit towards various schemes for the welfare of staff including retired staff. The welfare schemes are administered by a Central Welfare Committee consisting of management ACY- employees representatives.

The Bank has endeavored to promote a healthy industrial relations climate through fair, transparent and firm handling of Industrial related matters.

The Bank has been complying with the reservation policy of Govt, of India. Special Cells at Head Office and all Zonal Offices are functioning to monitor the implementation of the reservation policies and to redress grievances of SC/ST/OBC ACY- Physically challenged employees as well as ex-servicemen. The Bank has designated Chief Liaison Officers at Head Office and has set up SC/ST Cells at each of its 34 Zonal Offices for the purpose. During the year periodical meetings were held with SC/ST/OBC Employees Association to discuss implementation of reservation policy and other constitutional safe guards and also to facilitate involvement in business growth. Similar meetings were also held at Zonal level.

The number of employees belonging to different categories is as under:

Sr. Category of Employees No. of Percentage No Employees to total

1. Women 3767 26.17

2. Physically Challenged 188 1.31

3. SC Employees 2788 19.37

4. ST Employees 1091 7.58

5. OBC Employees 1738 12.07

Rosters have been maintained as per Government guidelines and are regularly inspected/ checked.

Training Activities:

The Bank has a training system which facilitates attention to regular periodic assessment of skill gaps at various levels in relation to existing and emerging business opportunities. Skill building in credit, forex, customer relationship management, marketing of products and services, credit monitoring and recovery, risk management, technology based banking, branch management, complying with statutory, legal and policy requirements and preventive vigilance received special attention during the year.

The training programmes were also held on thrust areas like financing SMEs, retail lending, agriculture finance and rural development.

The Bank has an apex Training College at Pune with three training establishments operating under it, one each at Mumbai, Nagpur and Pune. Information Technology Training Institute and Computer Labs train the Officers and staff to utilize information technology for effective customer service and efficient back office functions.

The highlights of training activity during the year are as under ADs-

- 322 training programs were conducted during the year out of which 111 were for officers, 153 were for clerks and 58 were for sub staffs.

- Total of 8661 staff members participated in various training programs, consisting of 5429 officers, 2139 clerks and 1093 sub staff.

- A total of 917 SCs, 315 STs and 1207 women employees were trained during the year.

- During the year 1461 employees were trained in Information Technology.

- In addition, 2024 employees were deputed to different external training establishments.

- 11 Executives were deputed to Training Institutes outside India for International Exposure.

- 7 programmes for pre- promotional training to SC/ST employees were conducted during May - June 2013. Total 298 candidates attended the training.

- 4 programmes on Pre retirement counseling were conducted for the employees retiring during the year. Besides lecture on investment planning, health check up of participants were also arranged.

3.3 Technology Initiatives

The year 2013-2014 has been a milestone year for the Bank as far as technology implementation and up-scaling is concerned. During the year, Bank expanded its ATM Network from 692 ATMs to 1827 ATMs, covering nearly all the 1890 Branches of the Bank. The implementation of Bank''s Own ATM Switch commenced during the Year and has been implemented LIVE from 08th May 2014. Bank has been in the forefront of Technology in Business ACY- related activities.

Bank has a state-of-the-art Tier III Data Centre and Disaster Recovery (DR) Centre. A Near DR Site is also established to help the Bank achieve Zero Data Loss Objective, in the event of any untoward incident. We are one of the few Public Sector Banks to implement Near DR Site over last two years. The efficacy of Near Site is tested twice a year during DR Drills conducted by the Bank.

Bank has its own Corporate Network ACI-MAHANET ACI- with all Branches, Zonal Offices, Training Colleges / Centers and Head Office interconnected and working under Core Banking Platform. Its robust ACY- secure Network Technology Architecture ensures seamless services to the customers. During the year 2013-14, the process of migration of the network to highly redundant and reliable Multi Protocol Label Switching (MPLS)- VPN (Virtual Private Network) based architecture has been completed. With this, we are sure that the Bank''s new network is scalable so as to serve our customers even better and introduce more customer centric applications. Bank has also pioneered in implementing niche network technologies such as 3G, CDMA, etc as back up communication media to ensure high availability to the branches.

Bank is having two ATM Galleries, one in Bajirao Raod ACY- one in Shivaji Nagar, set-up with a view to provide integrated technology services under one roof.

Bank has collaborated with VISA for International Debit Cards and with NPCI for Rupay Debit Cards. Bank has also been the first Bank to launch Rupay Kisan Debit Card - a Government of India initiative.

The payment and settlement systems viz., RTGS and NEFT are running on robust platform facilitating straight-through- processing (STP) model. In order to promote e-transactions ACY- popularize the usage of NEFT Transactions, the service charges on NEFT transactions up to X 1.00 Lakh are waived.

The Bank is taking special efforts to encourage transactions through alternate channels such as ATM, RTGS / NEFT Internet Banking, Mobile Banking, ECS etc. More than 40 percent transactions are now being carried out by customers through these alternate channels. Bank is constantly pursuing efforts to enhance usage of these channels through various incentive schemes which have been implemented during the year.

Various facilities are being provided through our Internet Banking platform for facilitating online payment of taxes, utility bill payments, online shopping / e-commerce, railway reservation, LIC premium payment, etc and facility for viewing tax credit statement 26AS and Demat account with the Bank.

As a part of the effort to respond to the ever evolving information security trends and the responsibility to enhance security features in the Internet Banking facility, Two Factor Authentication (2FA) Solution for Retail Users ACY- active Corporate Users is rolled out.

Bank has robust Information Security Management System (ISMS) framework in place. Its information security policy statement being: ACI-Bank of Maharashtra is committed to protect and safeguard the critical information of all stakeholders in order to ensure secure business operations ACI-

In order to strengthen the ISMS framework further, Bank had gone for ISO 27001:2005 Certification for its IT division including Data Center, Disaster Recovery Center and CBS Project Office. Bank has ensured continuation of the ISO 27001:2005 certification for the year 2012-13 and now 2013-14 as well.

Bank has in place a captive Security Operations Centre (SOC) for monitoring Critical IT Infrastructure on 24 x 7 basis. The SOC shall enable the Bank to effectively address security threats by constant, proactive monitoring of security events and meet the compliance requirements. This has enabled the Bank to automate the vulnerability discovery process by constantly analyzing the logs generated by the core IT security and application infrastructure. The other services namely Anti- Phishing ACY- Anti-Trojan services are also implemented.

As a part of Customer Initiatives, online facilities are made available to customers for opening of savings bank accounts and also accounts under New Pension Scheme. Bank has also made available facility for submitting applications online for various credit facilities including Housing, Education, Vehicle, MSME, Consumer and any other Loan product (Generic application to accommodate any other credit facility requirement of the customer).

Bank has launched a plethora of New IT products/services for Customers like Cheque Deposit Machines, Digital Media Signage, Queue Management Solution (PoC Basis), Standardized Public Grievances Redress System (PGRS) Software, Software for Searching Branch ACY- ATM Locations of the Bank, SMS to renewed Card Holders, e-Pact New Pension Scheme (NPS) LITE Software, POS Usage enabled for all Rupay Cards etc.

Implementation of Biometric Authentication for Branch Staff is taken up and expected to be completed by 31/05/2014.

Automated Data Flow, an RBI Initiative, has been implemented LIVE from 31/12/2013, as per RBI Timelines.

Cheque Truncation System has been implemented at all 27 Centres under Southern Grid ACY- 20 Centres under Western Grid including Mumbai.

Bank has implemented own Business Correspondent Model at Solapur. Under this model we have provided 1000 Micro ATMs to all Regions of the Bank ACY- implementation is in progress.

All the branches of Maharashtra Gramin Bank, the Regional Rural Bank sponsored by the Bank are working under CBS since 2011 ACY- are implementing various initiatives to be in tune to meet the demands of customers and business development.

Bank proposes to take up following new IT Initiatives during 2014-15.

- Newer / Evolving Branch Transformation Initiatives with focus on enhancing customer experience. Centralization of Liability Processing Centre (CLPC) / Asset Processing Centre (CAPC).

- Work towards establishment of Enterprise-Wide Data Warehouse, Business Intelligence ACY- Analytical CRM.

- New - generation Mobile Banking application that can work with variety of mobile phones ACY- platforms and provide secure transactions.

- Upgrade of Bank''s Call Centre to a complete inbound and outbound call center.

- E-Surveillance System to cover all ATMs.

Project ACI-Utkarsha ACI-

Bank has taken a novel step in the month of July, 2013 by forming a new department by name ACI- Department of Strategic Initiatives ACI-. The project is named ACI-Utkarsha ACI- and is a business transformation programme. Bank has engaged EY as consultants for the transformation. A team of 12 officers headed by an AGM is also formed to undertake this project. Time lines and the scope of work are defined and the expected time for the project completion is 18 months. The objective of Utkarsha is to draw a strategic roadmap and align Bank''s operating model to emerge as a more competitive, agile and efficient player. Project ACI-Utkarsha ACI- encompasses six core elements namely Branch Transformation, Centralization and Business Process Re-engineering, Sales Enablement for retail and SME loans, Alternate Channels, Human Capital and Capital Efficiency.

The Outline of the Transformation Program ACI-Utkarsha ACI-

- Grow Rapidly

- Identify key drivers for growing deposits and advances business

- Revamp sales structure and augment skill-set to improve sales efficiency and effectiveness

- Identify opportunities to streamline processes, aggregate non-core processes at back-end and enhance productivity

- Design an efficient operating model to ensure business growth is not achieved at expense of efficiency

- Optimize costs with rising scale of business, increase share of fee-based income and improve productivity to enhance profitability

- Create a roadmap to ensure capital efficiency

3.4 Customer Centric Initiatives taken by the Bank

The Bank has pursued high standards of customer service to ensure customer satisfaction throughout the year.

As member of the Banking Codes and Standards Board of India (BCSBI) Bank has adopted the Code of Bank''s Commitment to Customers and Bank''s Code of Commitment to SMEs. Duly documented policies approved by the Board on ACI-Deposits ACI-, ACI-Collection of Cheques/ instruments ACI-, ACI-Redressal of Grievances ACI-, ACI-Compensation ACI- and ACI-Operational Procedure for settlement of claims of Deceased Depositors ACI- are in place.

The Committee of the Board on Customer Service meets periodically to monitor the quality of customer service. redressal of customer grievances to ensure customer satisfaction. The Standing Committee on Customer Service at Head Office and Zonal Level Customer Service Committees at all the Zonal offices also meet regularly to address and review various customer related matters to take steps for improvement on an ongoing basis.

Customer Service Committees at all the branches are formed and a cross section of customers representing depositors, Corporate, businessmen, senior citizens are invited to attend the Customer Service meetings at Branch/Zonal/Head Office level, to have feedback and suggestions on schemes, products and services. Full-fledged grievances redressal machinery is in place to respond promptly to customer grievances. Complaint Management Cells are operative at Head Office and all Zonal Offices of the Bank. The Committee of the Board on Customer Service and Standing Committee on Customer Service at Head Office monitor the progress of redressal of customer grievances regularly.

The Bank has implemented all major recommendations of Goiporia Committee, Dr.S.S. Tarapore Committee and Damodaran Committee relating to customer service.

The Bank has in place internet based mechanism for lodging the complaint or to give suggestions/ feedback on services by the customers and for providing acknowledgement and status of their feedback/ complaint.

Bank has printed folder called ACI-My Folder ACI- containing all customer service policies, information on service charges, guidelines on Government Schematic Loans, Ombudsman and BCSBI codes. The same is printed in Marathi, Hindi and English and supplied to all branches and Zones for making the same available to all customers on demand.

Standardized Public Grievances Redressal System:

Bank is in process of implementing ACI-Standardized Public Grievances Redressal System (SPGRS) ACI- introduced by GOI, MOF, Department of Financial Services, New Delhi on 11.06.2012. I T Department and Planning Department in Head Office are developing In House software for Integrated Public Grievances System.

Installation of Kiosk Machine for online registration of complaints:

Kiosk Machine arrangement has been made at Head Office to enable the customers to register on line complaints/ suggestions, and its operation is started w.e.f. 14.03.2013.

3.5 KYC/AML

Know Your Customer (KYC) norms / Anti Money Laundering (AML) standards / Combating of Financing of Terrorism (CFT) and Obligation of Bank under Prevention of Money Laundering Act (PMLA) 2002.

The Bank has Board approved KYC-AML-CFT Policy in place. The said Policy is the foundation on which the Bank''s implementation of KYC norms, AML standards and CFT measures is based. The full KYC compliance entails staff education as well as customer education for which the following measures are taken by the Bank.

A comprehensive list of KYC documents is uploaded on the Bank''s web site for the benefit of customers. Regular training sessions are conducted on KYC-AML-CFT guidelines at the Bank''s training establishments to sensitize the employees.

3.6 Risk Management

Banks are faced with a variety of risks while conducting day to day banking operations. Bank has its Risk Management Frame work in accordance with the RBI Guidelines and benchmarks itself against the industry best practices. This enables the Bank to identify, measure, monitor and manage risk efficiently.

The Board of Directors of the Bank reviews all Risk Management Policies and Strategies and establishes control systems in line with the Bank''s aggregate Risk Appetite. The Board of Directors is supported by the Risk Management Committee of the Board (RMC) and RMC is supported by sub- committees known as Credit Risk Management Committee (CRMC), Market Risk Management Committee (MRMC), Operational Risk Management Committee (ORMC) and Asset Liability Management Committee (ALCO). These Committees are headed by Chairman and Managing Director. Executive Directors and General Managers are the members of the Committees.

Risk Management Policies

In order to provide ready reference and guidance to field functionaries, Bank has put in place various Board approved Risk Management Policies viz. (i) Credit Risk Management Policy, (ii) Market Risk Management Policy, (iii) Asset Liability Management Policy, (iv) Operational Risk Management Policy, (v) Stress Testing Policy, (vi) Outsourcing Policy, (vii) Business Continuity Planning Policy, (viii) Disclosure Policy, (ix) Utilization of Credit Risk Mitigation Techniques and Collateral Management Policy ACY- (x) Internal Capital Adequacy Assessment Process (ICAAP).

Credit Risk Management

Credit risk is the possibility of a loss being incurred as the result of a borrower or counterparty failing to meet its financial obligations or as a result of deterioration in the credit quality of the borrower or counterparty. Effective credit risk management is a structured process to assess, measure, monitor and manage risk on a consistent basis. This requires careful consideration of proposed extensions of credit, the setting of specific limits, monitoring during the life of the exposure, active use of credit mitigation tools and a disciplined approach to recognizing credit impairment. The Credit Risk Management process forms an integral part of overall risk management of the Bank. The Bank has constituted Credit Risk Management Committee (CRMC) which reviews the policies, procedures and systems relating to credit administration and monitoring, at periodic intervals.

The Bank has put in place comprehensive Lending Policy, Loan Review Policy and Credit Risk Management Policy for credit risk management. The policies prescribe various guidelines, procedures, standards and prudential / exposure norms.

To evaluate the risk perception in a lending proposition, the Bank has put in place an in-house developed Credit Risk Rating Framework (CRRF) for rating of existing as well as entry level borrowers in various asset classes, as desired under Basel III. In house developed rating model in TIBD is also in use to rate Non-SLR Investments. The Bank utilizes industry risk rating from reputed credit rating agency and incorporates the industry risk score in the CRR Models. Bank also uses the rating assigned by RBI approved external credit rating agencies in its credit decision.

The Bank has prescribed threshold ratings for entry level exposures with a view to building up credit portfolio within the risk appetite and achieves the profit plan. With a view to separating the Credit Risk Management function from credit sanctioning, Credit Risk Rating Approval Grids are set up at various levels at Head Office and at Treasury ACY- International Banking Division (TIBD), Mumbai which assess the risk perception through a committee approach.

The Bank has undertaken migration analysis of credit risk rating of borrowers over a time horizon and probability of default has been estimated in line with Basel requirements. To achieve risk-return trade off, risk based pricing framework has been implemented and reviewed periodically.

The Bank undertakes following studies periodically to assess Credit Risk:

Compliance to Prudential Norms as per Lending Policy

Credit Portfolio Review

Assessment of Concentration Risk in Assets ACY- Liabilities

Quick Mortality of Loans and Advances

Country Risk Management

Aggregate exposure on other banks

Stress Test Report - Credit Risk

Finding of these studies are placed before the Credit Risk Management Committee (CRMC), Risk Management Committee (RMC) and the Board on periodical basis.

Market Risk Management

Market Risk is the risk to the Bank resulting from adverse movements in market prices due to changes in interest rates, foreign exchange rates and equity price. The changes impact the Bank''s earnings and capital and can have ramifications on the Bank''s liquidity and profitability.

Bank has its separate Market Risk Management Committee which reviews Market Risk Management Policy on regular basis and reports modifications, if any, to the Risk Management Committee ACY- the Board for approval. The Bank''s Market Risk Management Policy aims to set out the broad processes i.e. by which the Bank will identify risks in the areas of Interest Rate Risk, Forex Risk, Equity Price Risk and Options Risk. Reporting framework has been prescribed for internal reporting, Regulatory reporting and Pillar III disclosures.

Interest Rate Risk Management

Interest rate risk is the risk where changes in market interest rates affect a bank''s financial position. Changes in interest rates impact a bank''s earnings (i.e. reported profits) through changes in its Net Interest Income (NII) and also impact a bank''s Market Value of Equity (MVE) or Net Worth through changes in the economic value of its rate sensitive assets, liabilities and off-balance sheet positions. The interest rate risk, when viewed from these two perspectives, is known as ''earnings perspective'' and ''economic value perspective'', respectively.

Accordingly, Bank uses the following tools to manage interest rate risk:

1. Traditional Gap Analysis (TGA) which is undertaken through the preparation of Interest Rate Sensitive Gap Reports on a monthly basis.

2. Earning at Risk: Calculation of impact on NII due to 1 ACU- change in interest rates. It also takes into account Basis Risk, Embedded Option Risk, Yield Cure Risk, Net Interest Position Risk, Price Risk and Reinvestment Risk.

3. Duration Gap Analysis (DGA) which focuses on the bank''s exposure to Interest Rate Risk in Banking Book (IRRBB) in terms of sensitivity of Market Value of its Equity (MVE) to interest rate movements.

4. Modified Duration: Considering the interest rate risk in the portfolio, the Bank has set upper limits of Modified Duration for AFS HFQ- category and also the upper limit for total investment portfolio.

5. Value at Risk: Value at Risk (VaR) for treasury positions is calculated for 1 Day, 10 Days and 30 Days for 99 ACU- Confidence Level.

The Bank has constituted Asset Liability Management Committee (ALCO), which meets at regular intervals to review the interest rate scenarios, liquidity positions in the banking book etc. The ALCO manages and supervises Liquidity Risk through review of rates of interest on deposits / advances. ALCO also monitors adherence to various risk limits and determines the business strategy in light of prevailing interest rate scenario and liquidity position in the market with a view to optimizing profit and overall balance sheet management while managing interest rate risk.

The ALM Policy, which is reviewed annually, prescribes the parameters for management of Liquidity Risk, Interest Rate Risk, etc.

Investment Risk is managed through the prescriptions made in the Investment Management Policy ACY- Investment Risk Management Policy.

Management of Foreign Exchange Risk, prudential limits for open foreign exchange position, aggregate gap position, Daylight limit, Overnight limit, Net Open Overnight Position. Stop loss limit, Limit for undertaking swaps/investment/ borrowing overseas, interbank exposure limits etc. have been put in place. These limits are monitored regularly.

The ''Liquidity Risk is measured and managed through ''Gap analysis'' for maturity mismatches by reviewing structural liquidity position on daily basis and short term dynamic liquidity on fortnightly basis. Bank is conducting behavioral studies in GAP analysis. Stress testing is undertaken periodically.

Operational Risk Management

Operational risk is the risk of loss resulting from inadequate or failed internal processes, people or systems or from external events. Bank''s primary aim is the early identification. recording, assessment, monitoring, prevention and mitigation of operational risks, as well as timely and meaningful management reporting.

The Operational Risk Management Committee (ORMC) meets regularly to review the matters related to operational risk. Under the Operational Risk Management Framework and ORM Policy, Bank is identifying, measuring, monitoring and controlling/mitigating operational risks by analyzing historical loss data, Risk and Control Self-Assessment Surveys (RCSAs) and Key Risk Indicators (KRIs). The Bank has put in place policy on Business Continuity Planning. A policy on outsourcing is also formulated which facilitates use of expertise available in the market with adequate safeguards against risk associated with outsourcing.

Under the Risk based supervision, Risk Profile Template covering five business risks and two control risks are prepared on quarterly basis and submitted to RBI.

Rating of the branches is done under Risk-based Internal Audit (RBIA) and the position is reviewed every quarter.

Implementation of Advanced Approaches of Capital Computation

The Bank will enhance its Risk and Capital Management capabilities by migrating to the Advanced Approaches of the Basel framework. Advanced approaches include Foundation and Advanced Internal Ratings Based Approach (''FIRBA ACY- ''AIRBA) for Credit Risk, Standardized and Advanced Measurement Approach (TSA ACY- AMA) for Operational Risk and Internal Models Approach (''IMA) for Market Risk.

3.7 Internal Control Systems

Inspection ACY- Concurrent Audit:

The Inspection and Audit system ACY- various measures of internal control are adopted by the Bank to ensure identification /assessment and mitigations of operational risks.

Internal Audit of branches:

As per Seth Committee guidelines the Bank is conducting Risk Based Internal Audit of the branches. RBIA of all the branches which were due for RBIA during the year, were conducted while complying with the Jilani Committee recommendations. It was endeavored that the top 200 branches in advances terms of the Bank are covered under RBIA during the year.

During the year the Bank has implemented some strategic decisions so as to strengthen the internal control system such as,

- Commencement of Off-site monitoring system in which reports on some important/sensitive areas are extracted from the CBS system on daily/weekly/monthly basis so that necessary timely rectification/action can be taken.

- On the spot rectification of at least 51 ACU- irregularities during the course of inspection itself in the branches.

- Implementation of Document mechanization system.

- Initiating the process of Web Based application system so as to improve Branch Inspection, Concurrent Audit system and Off-site surveillance.

During the year the Bank also organized conference of all Inspecting Officials and Heads of Inspection Cells so as to update them on policies, procedures, business environment, opportunities and challenges for banks, emerging areas of risks and their role in alerting the Top Management of existing and impending risks at branches and offices.

Surprise Inspection:

Surprise Inspection of 23 branches, focusing mainly on high risk areas was also carried out in pursuance of Ghosh Committee Recommendations. All the 23 reports are closed.

Concurrent Audit:

As per approved Audit Plan for 2013-2014, 418 branches and three departments of the Bank are covered under Concurrent Audit covering about 75.78 ACU- of Bank''s total business.

Income ACY- Expenditure Audit (I. ACY- E. Audit):

I. ACY- E. audit is carried out at 180 branches as per approved plan for the period 01.10.2012 to 30.09.2013 having total business above X 25.00 crore ACY- advances above X 5.00 crore.

Expenses Audit of Zonal Office:

In order to have control over expenditure at Zonal Offices a system has been put in place through half yearly Expenses Audit for every March and September half years. The expenses audit of 34 Zones were conducted as of 30.09.13.

Snap Audit:

The Bank has also initiated the process of Snap audit of select branches where the growth in advances is inconsistent or especially contrary to the past trend.

Management Audit:

For assessing their effectiveness of Zonal Offices and different departments in the Head Office in terms of supervision and control, Management Audit of 17 Zonal offices and 16 departments at Head Office was carried out during the year.

RBI Inspection under Section 35 of the Banking Regulation Act:

The Bank was also subject to RBI inspection under Section 35 of the Banking Regulation Act besides that two branches were also inspected during the year.

AML:

Bank has also reviewed the AML parameters as per IBA guidelines and Prevention of Anti Money Laundering Act. In order to ensure efficacy of the AML system, a centralized AML Cell has been established at Head Office.

3.8 Vigilance

Vigilance activity in the Bank is an integral part of the managerial function. Its objective is to enhance the level of managerial efficiency, effectiveness and to ensure a proper climate for an efficient administration, where officials can perform the duties without any fear or favor. ''Vigilance'' in the Bank is maintaining a proper balance between flexibility and accountability.

Preventive Vigilance is the most important aspect of vigilance. With a view to improve functioning at all levels, the Bank has taken several necessary steps. ''Fraud Risk Management Policy'' on prevention, detection, classification and reporting of frauds including action to be taken, has been adopted by the Bank and circulated for the guidance and use of the branches and field functionaries.

''Vigilance Manual'' has been issued by the bank and various aspects of vigilance and other related issues have been dwelt upon for information and necessary action of the field functionaries.

3.9 Compliance

The Bank has put in place a Compliance Policy, based on the guidelines of Reserve Bank of India. The Compliance Department, headed by the Chief Compliance Officer monitors the compliance functions. It ensures the implementation of the statutory/regulatory guidelines coming into force from time to time. The issues relating to regulatory/ statutory compliances are addressed appropriately. The status of compliance is placed for review to the Top Management / Audit Committee of the Board periodically. To improve the awareness on the compliance functions in the Bank, sessions are appropriately included in various training programmes arranged for the officers /staff members.

3.10 Marketing ACY- Publicity

With a view to publicize Bank''s various products and also brand image coupled with corporate social responsibilities, Bank has sponsored various programs like ACI-Sponsorship to BWF Badminton world super series ACY- Ashian Athletics Championship ACI- ACI-Connotation on Global warming ACI- ACI-Sponsorship for Mobile dispensary/Dialysis machine ACY- other medical equipments ACI- ACI-Child Development Centre ACY- Health camps for SHGs ACI- ACI-Project Spinal injury centre ACI- etc. Bank has also donated towards relief fund to Flood ACY- Cyclone affected people and development of Tribal villages.

3.11 Citizen''s Charter

The Bank has adopted the Charter since 2000-01, which details the duties and responsibilities of the Bank towards its customers. The Charter is displayed at all the branches and at the website and has been updated from time to time. The Bank has also adopted a Citizen Charter of RBI on exchange of notes and coins.

4. SOCIAL BANKING

4.1 Priority Sector Lending

It has been the constant endeavor of the Bank to facilitate equitable and sustainable economic development by timely and hassle-free availability of credit for productive purposes to Small and Marginal Farmers, Micro ACY- Small Enterprises, Retail Traders, Professional ACY- Self Employed, Women Entrepreneurs and entrepreneurs from economically weaker sections.

The outstanding advances under Priority Sector as of 31st March 2014 aggregates to X 32010.68 crore, constituting 41.99 ACU- of the Adjusted Net Bank Credit.

The rise in Priority Sector Advances in absolute terms is X 7291.32 crore over previous year March 2013, resulting into growth of 29.50 ACU- on y-o-y basis.

4.2 Agriculture

The Bank disbursed X 5909.54 crore for agriculture and allied activities during the year 2013-14. The total outstanding advances to agriculture sector have shown a growth of 28.89 per cent on y-o-y basis, to reach a level of X 10276.07 crore as on 31.03.2014.

The Bank undertook awareness/sensitization programmes for all the branches for increasing advances to agriculture by providing hassle free credit to farmers.

4.2.1 Mahabank Kisan Credit Card (MKCC)

This scheme gained popularity especially in rural areas where it is being propagated successfully and vigorously. The Bank has issued total 470762 Kisan Credit Cards to farmers. Credit flow to MKCC beneficiaries has reached to the level of X 4312.60 crore as on 31.03.2014, registering a growth of 42.83 ACU- on y-o-y basis.

4.3 Micro, Small and Medium Enterprises (MSME)

SMEs are recognized as a major growth engine for the Indian economy. They generate opportunities for direct and indirect employment by facilitating use of natural resources and local skills to stem the tide of migration to urban areas and promote low investment enterprises. Finance is made available to viable enterprises at an attractive and low rate of interest. On line enquiry portal is made available on the Bank''s website during the year.

The Bank has adopted Simplified Loan Application for MSEs and the same is displayed on the Bank''s website. The Bank has also adopted Bank''s Code of Commitment to Micro and Small Enterprise and it is displayed on the Bank''s website.

The Bank''s lending to Micro, Small and Medium Enterprises which was at the level of X 11288.92 crore as at 31.03.2013, increased to X 15098.25 crore as at 31.03.2014, which translates into a y-o-y growth of 33.74 per cent.

Mahabank MSME centres - Centralized Processing Cell have been set up for speedy disposal of MSME proposals at Pune, Hyderabad, Delhi and Chandigarh.

4.3.1 Maha-Entrepreneur

Under the scheme, the Bank is providing for supporting SMEs in rural areas finance up to X 100.00 lacs to Micro and Small Enterprises without Collateral Security and/ or Third Party Guarantee.

Accounts under the scheme are covered under Credit Guarantee Fund Scheme for Micro, Small and Medium Enterprises of Government of India. The Bank is bearing 50 ACU- annual guarantee fee for loans above X 10.00 lakh ACY- entire annual guarantee fee for loans below X 10.00 lakh. The Bank sanctioned loans of X 1040.37 crore to 11,436 borrowers under this scheme up to March 2014. During the current FY coverage under Credit Guarantee Fund Scheme has increased by 36.11 ACU-.

5. IMPORTANT SCHEMES/PROJECTS OF THE BANK

5.1 Credit Flow to Retail Sector

The Bank is providing retail loans to salaried persons, professionals, businessmen and pensioners for purchase of consumer durables, two/four wheeler vehicles and also for other personal needs.

5.1.1 Centralized Processing of Retail loans:

There are 14 Retail Asset Branches and 18 Retail Processing Centers covering all the Zones for hassle free and quality disbursement of retail loans.

5.1.2 Mahabank Gold Loan Scheme

Gold ornaments are the traditional and inherited form of savings among the people in India. Being one of the most liquid and precious asset, it serves as a dependable and acceptable form of security to raise loans for meeting immediate financial needs for business, agricultural. consumption purposes such as marriage, medical, educational expenses etc. With a view to meet the credit requirement of our customers, Bank has launched a new retail loan product ACI-Mahabank Gold Loan Scheme ACI- w. e. f. 01.11.2010. The total portfolio of Gold Loan of our Bank is X 624.62 crore.

5.1.3 Mahabank Top-Up Loan Scheme

In order to extend additional credit support to our regular housing loan borrowers, Bank launched another new Retail Loan product ACI-Mahabank Top-Up loan scheme ACI- w.e.f. 01.11.2010.

5.2 Housing loan to public

The Bank has in place Housing Loan Scheme to meet the needs of all economic segments including NRIs. Financing housing sector in rural and urban parts of India is a thrust area. The Bank''s lending to housing sector has grown by 34.63 percent during the year to reach the level of X 8854.40 crore as of 31.03.2014. The Bank is also implementing Golden Jubilee Rural Housing Scheme of the Government of India in rural areas having population not exceeding 50,000. Bank is having online facility to apply for housing loan, which has evoked positive response.

5.2.1 One per cent Interest Subvention on Housing Loan up to X 15.00 Lakh.

As per GOI guidelines, Bank has provided 1 ACU- interest subvention to borrowers, who availed housing loans upto X 15.00 lakh costing worth upto X 25.00 lakh. During the year 2013-14, 5941 borrowers benefited under the scheme to the extent of X 5.50 crore.

5.3 Model Educational Loan scheme

With the objective of ensuring that all deserving students get opportunity to pursue higher education, the Bank implemented a Model Educational Loan Scheme. As of March 2014, the Bank had lent X 637.34 crore to 29,876 students. The Bank has provided the facility of submission of application for education loan through web-access (on line) also.

5.4 Micro Finance

The Bank has always recognized the importance of credit to rural and urban poor for taking economic activity. The SHGs have proved to be effective instruments for empowerment of women. Bank has specialized SHG branches in all six lead districts and at Goregaon, Mumbai.

As on 31.03.2014, there were 108964 SHGs formed by the Bank, out of which 97261 SHGs have been linked with the bank credit with outstanding of X 160.71 crore as on March 2014.

5.5 Assistance to SC/ST beneficiaries:

The Bank has been actively extending finance to SC/ST beneficiaries through various schemes. Total finance as on 31.03.2014 to SC/ST beneficiaries stood at X 1511.80 crore, constituting 20.41 per cent of advances to weaker sections.

5.6 Advances to Minority Community

A special cell has been set up at Central Office to review ACY- ensure smooth flow of Credit to minority community. As of March 2014, the outstanding advances to minority communities were at X 2258.72 crore to 102,106 beneficiaries.

5.7 Door Step banking Services

Bank has introduced Door Step Banking Services for its High End Customers and the services include Corporate and Retail Cash pickup and delivery ACY- Cheque Collection Services, at Clients'' Doorstep. The Services has been initially introduced in Mumbai and Pune which is now extended to all Centers except branches in the Bhopal Zone.

5.8 BOM SBI International Credit Card

Bank is offering Co-branded International Credit Card to its customer under tie-up arrangement with SBI cards. The card is offered in two variants viz.Platinum and Gold card. As on 31.03.2014, the outstanding number of cards issued to its customer is 23861.

5.9 National Pension System (Swavlamban)

NPS Lite Swavalamban was made live in July 2013 and total 1806 branches are registered as NLCC (NPS Lite Collection Centre) with NSDL for collecting contribution under the scheme. 11833 accounts were opened under the scheme up to 31.03.2014.

5.10 Tie Up

5.10.1 Empanelment as lead Generation agent for SHCIL.

Bank has entered into tie up arrangement with Stock Holding Corporation of India Ltd. (SHCIL) in Maharashtra wherein Bank is empanelled with SHCIL as the lead generation agent. The bank role is to popularize e-stamping system across Maharashtra and provide information to customers and guide customers to SHCIL office for their e-stamp business.

5.10.2 Remit2india'' by ''Timesofmoney''

Bank has tie up with Timesofmoney for introducing remit2india an online platform for remittance of funds by NRI customers.

5.10.3 Payment Gateway Facility

Bank has tie up with M/s India ldeas.com Ltd, M/s Avenues India Ltd., M/s Atom Technologies Ltd, M/s ibibo web Solution Ltd, M/s Citrus Payment Solutions Pvt Ltd, M/s One 97 Communication Ltd, M/s EBS payment System, M/s Techprocess Payment System, M/s Times of Money Limited for facilitating e-commerce and utility bill payment facility to its internet banking customers.

5.10.4 ECS Mandate and Direct Debit System

Bank has tied up with Bajaj Finance Ltd. and TVS Credit Pvt. Ltd for ECS Mandate verification of Fresh Mandate and Direct debit system of PDCs.

5.10.5 Online Fee Collection

Bank has entered into tie up with various Institutions during the year where bank is getting commission on collection of fees for Institutes from Branches. The bank is collecting online fee collection for Mumbai University from the students appearing for external educational programme. The Mumbai University selected Bank from the group of 5 Banks.

6. CORPORATE SOCIAL RESPONSIBILITY

The Rural Development Centres at Hadapsar and Bhigwan in Pune District of Maharashtra have been undertaking various rural developmental activities for the benefit of farmers viz. Lab to Land Project, Re-development of Saline Soils, Soil Testing etc. Bank has established Soil testing Lab (STL) through MARDEF Trust at RDC Bhigwan. The Soil Testing Laboratory has analyzed 8892 Soil ACY- Water samples in the year 2013-14 and accordingly counseling is done. Farmers from the districts of Pune, Ahmednagar, Solapur and Satara are taking benefit of the lab.

A Trust viz. Mahabank Agricultural Research and Rural Development Foundation (MARDEF) established by the bank, undertakes various projects and village improvement programmes. MARDEF is imparting training to farmers on various subjects in Agriculture, e.g. Dairy, Goat rearing, Best practices in farming, Application of fertilizers, Agriculture credit schemes, etc. MARDEF Trust has implemented 96 training programmes for farmers at RDC Bhigwan ACY- Hadapsar and has benefited 5211 farmers from April 2013 to March, 2014.

The Bank has established Seven Mahabank Self Employment Training Institutes (MSETI) for providing training to rural youth and women to enable them to acquire skills for self- employment through small business enterprises. The Institute has centers located at Pune, Nagpur, Aurangabad, Amravati Jalna, Thane and Nasik. The Institute has so far imparted training to 12,666 educated unemployed youths. The settlement rate is 67 per cent.

Gramin Mahila Va Balak Vikas Mandal (GMVBVM), an NGO formed by Bank of Maharashtra and National Institute of Bank Management is actively involved in formation, nurturing, training and ensuring linkage of SHGs to Bank Credit. The GMVBVM also helps SHGs in marketing products of SHGs through outlet established in Pune City under the name ACI-SAVITRI ACI-. The GMVBVM guides and actively helps SHGs for selection and purchase of raw materials and quality production.

The Bank has opened Financial Literacy Centers in Six Lead Districts namely Pune, Nasik, Aurangabad, Satara, Jalna ACY- Thane for creating awareness about banking schemes.

Bank has helped various NGOs during the year extending financial support to acquire necessary inputs for carrying their activities. These include the following:

- Fixing of artificial limbs to the needy patients.

- Diesel Generator set for the school meant for physically challenged children

- Building / classroom / Kindergarten equipments for the needy, mentally retarded and cerebral palsy children, cancer patients and Old age home.

- Conducting cancer detection camps in slums for the needy.

Moreover Bank has always stood for the cause of society by contributing at large for improving medical facilities, vocational training, basic amenities etc. Bank is also helping emerging sports persons at budding stage by sponsorships and providing financial assistance to bring the glory to the Nation and contributing to social cause.

7. LEAD BANK SCHEME

7.1 Lead Bank Scheme

Bank has Lead Bank responsibility in six districts of Maharashtra State viz. Aurangabad, Jalna, Nasik, Pune, Satara ACY- Thane. Every year our Bank is successful in achieving the targets under Annual Credit Plan with achievement under various sub sectoral targets.

7.2 State Level Bankers'' Committee

Bank is the Convener of State Level Bankers'' Committee (SLBC) for the State of Maharashtra. Quarterly meetings are held regularly. Detailed discussions are held and implementation of various schemes like ACP achievement, Priority Sector lending, financial inclusion and Government Sponsored Schemes are reviewed. The performance of various participants is monitored and guidelines are given to LDMs / Banks for their improvement. A special SLBC meeting was convened which was chaired by Hon''ble Chief Minister of the State. An ambitious ACP of X 1.00 lakh Crore was accepted, which is highest in the country. The performance of SLBC was commended by Chief Minister. The crop loan achievement for this year was 90 ACU-. SLBC has taken proactive steps for supporting the farmers suffered due to Drought / Hail Storms by issuing guidelines immediately and following up with all the implementing agencies. SLBC has also taken a proactive step in providing the credit to the farmers in all the districts where the DCCBs are not in a position to lend by providing a major share of crop loans to Commercial Banks.

As conveners of SLBC, Bank is also coordinating with all member banks in implementing Direct Benefit Transfer. As Convener, bank has taken special emphasis on opening of accounts and seeding of aadhaar numbers of the DBT beneficiaries, in formation of 13,431 Sub service areas and in coverage of all the sub service areas in DBT districts. SLBC has also taken proactive role in implementation of DBTL scheme. Meetings were held with District Authorities, OMCs and District Coordinators of member Banks to ensure better coordination among these implementing agencies. SLBC has also taken the lead in monitoring the progress for making available the delivery channels such as opening of branches, installation of ATMs and providing the services of Business correspondent.

7.3 Aadhaar Initiatives

The Bank is acting as Non State Registrar (NSR) with Unique Identification Authority of India (UIDAI) to assist authority for enrolment of Aadhaar. For Aadhaar enrollment to the resident''s bank has engaged agencies. Bank has enrolled more than 21 lakh Aadhaar numbers with the help of these agencies Bank has taken the initiative for seeding of Aadhaar numbers and has approached customers requesting them for submission of their Aadhaar numbers. Aadhaar seeding is also done through our ATMs and Internet Banking apart from requests received directly. Due to these initiatives Bank is successful in seeding of more than 26 lakh Aadhaar numbers.

7.4 Financial Inclusion Plan

Financial inclusion is one of the key agenda items of the Government as well as Reserve Bank of India. Bank has taken Financial Inclusion as business opportunity and has made banking services available in 6,713 villages of the State through innovative BC - ICT model. For this purpose bank has appointed 2,472 BC agents of various agencies for providing basic banking services as opening of bank accounts of villagers, provide need based credit, remittance facilities and help to promote financial literacy in rural India using various models and technologies including branchless models.

Bank has opened 4,40,646 customers'' accounts through BC agents ACY- a total of 28.43 lakh Basic Saving Bank Deposit Accounts (BSBDA) with an outstanding balance of X 203.19 Crore. Bank has also made efforts to make BC model sustainable by way of introducing card less technology for FI customers. Bank has introduced AEPS - Aadhaar Enabled Payment System (On us and Off us - Acquirer and Issuer) technology, both functioning in the same POS machine. This has helped to increase the number of transactions during the financial year. The number of transactions increased from 0.95 lakhs to 4.66 lakhs during the year. The amount increased multifold from X 2.93 crore to X 101 crore.

Govt, of India is implementing the scheme of Direct Benefit Transfer (DBT). Under this scheme Govt. subsidies to the beneficiaries of 26 notified schemes are directly credited to the Aadhaar enabled bank account of the beneficiary in 121 districts. Out of these 121 districts we are operating in 71 districts with 632 branches. Under this scheme Bank has the responsibility of three districts as lead districts. Bank has ensured that all the beneficiaries under the scheme have their account with the bank and their Aadhaar number received from the district authority has been seeded to the accounts and uploaded with NPCI server. Bank had arranged special camps for opening of accounts as well as for enrolment of Aadhaar. Bank has also participated in implementing DBTL program and ensured maximum Aadhaar seeding of the beneficiaries.

8. SUBSIDIARIES/JOINT VENTURES AND SPONSORED INSTITUTIONS

8.1 Performance of Regional Rural Bank

Maharashtra Gramin Bank (MGB) is a Regional Rural Bank sponsored by our bank having its Head Office at Nanded, Maharashtra state. Total no of branches as on 31.3.2014 stood at 378 in its area of operation covering 16 out of 33 districts of Maharashtra State.

All 378 branches ACY- controlling offices are now under CBS. During this year, MGB opened 27 new branches and plans to open further more.

During this year, CASA share has improved from 62.75 ACU- to 64.27 ACU-, other income has improved from 21.75 Crore to 25.13 Crore resulting in increase in Net profit from 26.97 Crore to 35.51 Crore.

Under Financial Inclusion programme, all 355 allotted villages are covered under ICT based model. M/s Vakrangee Finserve Ltd., selected through common RFP has been engaged as the BC for providing BC services in all the villages allotted to the Bank, which is functioning actively.

During this year 2013-14, MGB has grown by 7.68 ACU- in total deposits and 14.20 ACU- in advances. It has achieved three SOI targets for the year 2013-14. The position of SOI targets and achievement are as under:-

Sr. Actual Target Actual No. Parameter 31.03.2013 31.03.2014 31.03.2014

14 Performance of RRBs

14.1 Deposit Growth in ACU- 19.12 ACU- 12.50 ACU- 7.68 ACU-

14.2 Advance Growth in ACU- 38.09 ACU- 20.00 ACU- 14.20 ACU-

14.4 Branches under CBS 351 365 378 (Nos.)

14.5 Profit per employee (Rs. In 2.13 2.40 2.67 Lakh)

14.6 No. of loss making 18 30 18 branches (being 12 months old or more)

8.2 The Maharashtra Executor ACY- Trustee Company Pvt. Ltd. (METCO)

The Maharashtra Executor ACY- Trustee Company Pvt. Ltd. (METCO), the 100 ACU- subsidiary of Bank of Maharashtra was established in 1946 with an aim to provide services auxiliary to banking such as:

- Consultation, Drafting ACY- Execution of will

- Consultation, Drafting and Management of Private Trusts / Public Trusts

- Management of investments ACY- house properties as attorney

- Guardianship of minor''s property

- Consultation for sale / purchase of property

- Filing of I-Tax Returns for individuals

The Company is located at Pune having its branch units at Pune, Vashi-Mumbai, Thane and Nagpur

During 2013-14, company could get new assignments for management of additional 9 Trusts bringing total 1070 Public ACY- Private Trusts under our fold for management. During the year, additional 41 WILLS were added making total 1069 WILLS in our custody for execution.

At present, the Company manages properties both movable and immovable of 82 clients under the Power of Attorney. The Company also acts as the Trustees in respect of 170 policies under Married Women''s Property Act and as Court appointed Guardian of minor''s property in 6 cases.

9. IMPLEMENTION OF OFFICIAL LANGUAGE POLICY

During the year 2013-14, the Bank has made various remarkable achievements in the field of Official Language implementation.

Two prestigious Hindi-serving Institutions, Mumbai based Aashirvad and Kolkata based Rashtreeya Hindi Academy, Roopambra, awarded trophy to our bank for better use of Hindi implementation and and shield for Rajbhasha Visheshank of our house magazine ACI-Mahabank Pragati ACI-.

On 17th and 18th August, 2013, a two-day seminar was organized in Kolkata for all Official Language Officers of our bank. Seminar was Inaugurated by the then C ACY-MD Shri Narendra Singh. Director of the bank, Dr.R.K.Agrawal also graced the occasion.

On 14th September, 2013, Hindi day function was held in Head Office, Pune, which was headed by the then C ACY-MD Shri Narendra Singh. On this occasion, shields were presented to the winner Zonal Offices, Branches and Head Office Deptts of bank''s internal Rajbhasha Trophy Scheme for the year 2012- 13.

On 3rd March, 2014, 29th meeting of Maharashtra State Level Banker''s Committee (Rajbhasha) was held at Head Office, Lokmangal, Pune. Executive Director, Shri R. Athmaram headed the meeting. Shields were presented to the winner member banks and financial institutions of state level Rajbhasha Shield competition.

Zonal Office, Akola, Raipur, Nagpur ACY- Kolkata and Vijaywada branch of Hyderabad Zone were awarded various prizes for better use of Hindi by various Town official Language Implementation Committees.

During the year 2013-14, Deputy Director (O.L.), Regional Implementation Office, Department of Official Language. Ministry of Home Affairs inspected the progressive use of Hindi at our Nagpur, Nasik ACY- Chennai Zonal Offices.

Chief Manager (Rajbhasha) Shri Anand Prakash Jaiswal has been nominated as a member in RBI''s ACI-Banking Glossary Committee ACI-.

Shri Deepak Bhalchandra Karpe, Clerk of our Dewas branch has been awarded in RBI''s Inter-bank Hindi Essay competition.

Hon''ble Governor of Madhya Pradesh handed over Madhya Pradesh Rashtrbhasha Prachar Samiti, Bhopal ACI-Hinditar Sevi Samman ACI- along with certificate to our Chief Manager, Shri Girish Vaghela.

A national level one-day seminar was arranged by TOLIC Pune with support from Pune College, Camp. Our Bank is the convener of this Committee.

10. DIRECTORS'' RESPONSIBILITY STATEMENT

The Directors confirm that in the preparation of the annual accounts for the year ended 31.03.2014:

- The applicable accounting standards of the Institute of Chartered Accountants of India, have been followed along with proper explanation relating to material departures, if any ADs-

- The accounting policies framed in accordance with the guidelines of the Reserve Bank of India, are consistently applied and proper disclosures are made for changes, if any ADs-

- Reasonable and prudent judgment and estimates were made so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and the profit of the Bank for the year.

- Proper and sufficient care was taken for maintenance of adequate accounting records in accordance with the provisions of applicable laws governing banks, in India ADs- and

- The accounts have been prepared on a going concern basis.

11. CHANGES IN THE BOARD OF DIRECTORS

During the year 2013-14, the following changes took place in the Board of Directors:

Shri S.D. Dhanak ceased to be Director w.e.f. 21st July 2013.

Shri Narendra Singh, Chairman ACY- Managing Director superannuated on 30th September 2013.

Dr N.K. Drall resigned from Directorship w.e.f 15th November 2013.

Dr. D.S. Patel, Shareholder''s Director ceased to be Director w.e.f 1st February 2014.

Dr Rajkumar Agrawal, Shareholder''s Director ceased to be Director w.e.f. 1st February 2014.

Shri C.VR. Rajendran, Executive Director appointed as Chairman ACY- Managing Director of Andhra Bank w.e.f 13.12.2013.

Ms Kamala Rajan, RBI Director superannuated on 28th February 2014.

Dr. S.U. Deshpande''s Directorship is kept in abeyance w.e.f 16th March2014, by Government of India.

Shri R.L. Saydiwal was appointed as Director w.e.f. 21st July 2013.

Shri R. Athmaram was appointed as Executive Director w.e.f 07th August 2013.

Shri Sanjeev Jain was appointed as Director w.e.f. 19th August 2013.

Shri Sushil Muhnot was appointed as Chairman ACY- Managing Director w.e.f 09th November.2013.

Shri R.K.Gupta was appointed as Executive Director w.e.f 31st December 2013.

Dr S.Rajagopal was appointed as RBI Director w.e.f. 13th March 2014.

The Board of Directors place on record their sincere appreciation for the valuable contribution made by the outgoing Directors.

12. ACKNOWLEDGMENTS:

The Board of Directors wishes to express sincere gratitude to the Government of India, the Reserve Bank of India, the Securities and Exchange Board of India, Insurance Regulatory and Development Authority, Indian Banks'' Association and Stock Exchanges and CDSL for their valuable advice and support ADs- to the customers and shareholders for their patronage ADs- to the correspondents and associates for their co-operation and to all the members of staff of ACI-Mahabank Family ACI- for their unstinted commitment and contribution to the overall development of the Bank.



For and on behalf of the Board of Directors



Pune (S. Muhnot)

Date : 26.05.2014 Chairman and Managing Director

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Mar 31, 2011

The Directors have pleasure in presenting the Annual Report of the Bank with the audited Balance Sheet, Profit & Loss Account and the Report on Business and Operations for the year ended March 31, 2011.

2.14 Income, Expenditure and Profitability

The total income of the Bank grew to Rs. 6,093.95 crore from Rs. 5,326.80 crore depicting revenue growth of 14.40 per cent during the year. The detailed income/ expenditure components are as under:

(Rs. in crore)

Variation Particulars 2009-10 2010-11 (per cent)

Interest / discount on advances / bills 3369.63 4006.14 18.89

Income on investments 1297.90 1520.30 17.13

Interest on interbank lending & other Interest 68.03 36.65 -46.13

Total interest income 4735.56 5563.09 17.47 Non-interest income 591.24 530.86 -10.21

Total Income 5326.80 6093.95 14.40

Interest on deposits 3183.06 3282.75 3.13

Interest on borrowings 256.25 311.94 21.73

Interest expenditure 3439.31 3594.69 4.52

Staff expenses (INCLUDING Provision as per AS-15 (Revised) 655.50 1157.08 76.52

Staff expenses (EXCLUDING Provision as per AS-15 (Revised) 603.20 681.39 12.96

Non staff expenses 417.45 487.14 16.69

Total Non interest expenses 1072.95 1644.22 53.24

Total Operating Expenses 4512.26 5238.91 16.10

Operating Profit 814.55 855.03 4.97

Provisions and Contingencies 374.97 524.64 39.91

Net Profit 439.58 330.39 -24.84



2.15 Financial ratios

Particulars 2009-10 2010-11

EPS (Rs. ) 10.21 6.86

Cost to Income Ratio (per cent) 56.85 65.79

Return on assets (per cent) 0.70 0.47

Return on equity (per cent) 20.79 15.58

Book Value per Share (Rs. ) 49.12 49.18

Profit per Branch ( Rs. In lakh) 30.25 21.51

Profit per Employee (Rs. In lakh) 3.21 2.38

Business per Branch (Rs. In crore) 71.73 74.43

Business per Employee (Rs. In crore) 7.62 8.25

Interest income as per cent to Average working funds 7.50 7.92

Non Interest income as per cent to average working funds 0.94 0.76

Interest spread as per cent to average working funds 2.05 2.80

Operating Profit as per cent to average working Funds 1.29 1.22

Staff expenses to average working funds 1.04 1.65

Staff expenses (excluding Provision as per AS-15 (Revised) to average working funds) 0.95 0.97

Dividend (per cent) 20.00 20.00



2.16 Capital from GOI

During the year, the major share holder, Government of India, have infused additional capital in the form of perpetual non-cumulative preference shares (PNCPS) Rs. 588 crore and equity share capital Rs. 352 crore.

2.17 Networth

The Bank’s Net worth increased from Rs. 2,114.46 crore as on 31.03.2010 to Rs. 2,709.24 crore as on 31.03.2011.

2.18 Capital Adequacy Ratio

The Capital Adequacy Ratio stood at 13.35 per cent as on 31.03.2011, against the minimum 9 per cent prescribed by RBI in terms of Basel II norms. The Tier I capital adequacy ratio stood at 8.02 per cent as against RBI’s prescription of 6 per cent.

2.19 Dividend

The Board of Directors has proposed a dividend of 20 per cent for the year ended 31.03.2011.

3. ORGANISATION AND SUPPORT SYSTEM

3.1 Branch Expansion

During the year, the Bank opened 83 new branches. As on 31.03.2011, the total branch network comprised of 1536 branches spread over 24 states and 2 union territories. The branch network includes specialized branches of foreign exchange, government business, treasury & international banking, industrial finance, SME, hi-tech agriculture, pension payment, pension processing, retail credit, Self Help Group and asset recovery. Area wise classification of branches as on 31.03.2011 is given in the table below:

Sr. No. Classification As on 31.03.2010 As on 31.03.2011

1 Rural 526 538

2 Semi-Urban 266 293

3 Urban 281 301

4 Metropolitan 380 404

Total 1453 1536



3.2 Human Resources Management

The Bank has put in place a comprehensive HRM Policy Document that provides road map for acquiring appropriate & need based Human Resources, its development through training, job enrichment, reward and recognition for better performance, career progression, welfare and retention.

As part of Platinum Jubilee Celebration, a memento in the form of Gold Coin was presented to all eligible employees who were in service of the Bank as on 16.09.2009.

During the year, Bank has for the first time taken up recruitment of 1000 Clerks through direct interview process. Internal promotion process for all cadres was also carried out. During the year, promotions have taken place from Scale I to Scale VII and total 583 Officers were promoted in the process besides 400 Clerks getting promoted to Officer Cadre. Process of recruitment of 392 Probationary Officers is completed. Considering the requirement of specialized cadre of staff and ever changing CBS technology for improving operational capabilities and specialized customer service, 96 MBA qualified Officers, 25 Chartered Accountants, 32 Agriculture Officers, and 38 Agri. Business Facilitators were recruited.

In the year 2010-11, 732 employees ceased to be in service on account of retirement, resignation etc.

To recognize outstanding performance in Banking activities and to motivate others to perform better, membership to Chairman’s Club, Better Managed Branch/Region trophy, cash incentives to all staff of Best Performing Branches are in vogue.

From this year, a Rolling Trophy in the name of Bharat Ratna Dr. Babasaheb Ambedkar to the best performing branch in disbursement and recovery of advances to SC/ST borrowers has been instituted.

The Bank has been allocating up to 3 per cent of its net profit towards various schemes for the welfare of staff including retired staff. The welfare schemes are administered by a Trust.

The Bank has continued to promote and maintain a healthy industrial relations climate through fair, transparent and firm handling of Industrial related matters.

The Bank has been complying with the reservation policy of Govt. of India. Special Cells at Central Office and all Regional Offices are functioning to monitor the implementation of the Reservations Policies and to redress grievances of SC/ST/OBC & Physically Challenged employees as well as Ex-Servicemen. The Bank has designated two Chief Liaison Officers at C.O. and has set up SC/ST Cells at all its Regional Offices for the purpose. During the year, periodical meetings were held with SC/ST/OBC Employees’ Association at C.O. to discuss implementation of reservation policy and other constitutional safeguards and also to facilitate involvement in business growth. Similar meetings were also held at Regional level.

The number of employees belonging to different categories is as under:

Sr. No Category of Employees No. of Percentage Employees to total

1. Women 3154 22.75

2. Physically Challenged 192 1.39

3. SC Employees 2754 19.87

4. ST Employees 991 7.15

5. OBC Employees 880 6.35

Rosters have been maintained as per Govt. guidelines and are regularly inspected / checked.

Training Activities:

The Bank has a training system which facilitates attention to regular periodic assessment of skill gaps at various levels in relation to existing and emerging business opportunities. Skill building in Credit, Forex, Customer Relationship Management, Marketing of products and services, Credit Monitoring and Recovery, Risk Management, Technology based Banking Branch Management, complying with statutory, legal and policy requirements and preventive vigilance were given special attention for imparting training during the year.

The training programmes were also held on thrust areas like financing SMEs, retail lending, agriculture finance and rural development.

Presently, the Bank has an apex Training College at Pune with three training establishments operating under it, one each at Mumbai, Nagpur and Pune. Information Technology Training Institute and Computer Labs at Regional Offices train the Officers and staff to utilize Information Technology for effective customer service and efficient back office functions.

During the year, all the training establishments of the Bank together conducted a total of 330 programs, out of which 108 were for Officers, 141 for clerks and 81 for sub-staff members. Out of above, 33 locational trainings were arranged at 28 Regions and trained 592 staff members.

A total of 8748 employees participated in various training programmes during the year, both in-house and external, comprising of 4294 officers, 3324 clerks and 1130 sub-staff members of whom 2277 were SC employees, 1130 ST employees and 1218 women employees.

The IT Labs across the country in addition to the existing training infrastructure cater to the training needs of the end users at the branches and Regional Offices. During the year, 1848 staff members were imparted training under IT. Out of above, 1374 members of staff were trained to handle the Core Banking Solution (CBS) software for efficient customer service and back office function.

76 Executives / Senior Officers participated in CRISIL Executive training modules on Credit which were held during the year for building skills & enhancing efficiency. 12 Executives / Officers were deputed abroad for training programmes, participation in seminars, International meetings etc. for facilitating global experience and exposure to developments taking place in banking & financial services in other countries.

A unique Pre- retirement Counseling programme for the employees retiring by March 2011 was arranged at Head Office in November 2010. 119 employees participated in the programme. Besides lectures on investments, health checkup of participants was also arranged.

3.3 Technology Initiatives

The Bank has been leveraging the tools of Information and Communication Technology for improving the operational capabilities and for meeting the customer needs and aligning with the business requirements of the Bank. The year 2010-2011 has been a fruitful year for the Bank in the Information Technology area. During the year, the Bank stabilized the Core Banking Solution at all 1536 branches, expanded the ATM network to 417 and introduced various new products & services.

The implementation of 100 percent CBS in the Regional Rural Bank of the Bank, i.e. Maharashtra Gramin Bank was initiated and completed during the year.

The Bank has been offering an enticing bouquet of customer-centric IT products and services.

3.3.1 Major IT Initiatives & Achievements during 2010-11

•!• Facility of income tax payment through Bank’s ATMs is made available.

•!• Facility to view tax credit statement (Form 26AS) through internet banking is made available.

•!• Inter bank funds transfer facility is made available to internet banking users for directly remitting funds through RTGS/NEFT

•!• Centralized Salary: As part of the various BPR initiatives, Centralized Salary Processing was implemented during the year, whereby the entire salary processing and related activities have been centralized and undertaken from Central Office for the Bank as a Whole. Credit of salary, credit to loan accounts, TDS deduction & remittance, generation and submission of Form 16, etc are all undertaken centrally now.

•!• Financial Inclusion Plan implemented adopting the ICT (Information and Communication Tool) model during the year. 484 villages have been covered having 1.12 lakh uncovered households, as on 31.03.2011.

•!• e-Lounge: Bank has set up e-lounges, one each at Pune, Mumbai and Delhi, for the benefit of High Networth Individuals, tech savvy and young generation customers for doing online banking transactions using the infrastructure. The lounge is equipped with self servicing passbook printer and electronic cheque deposit machine and internet available terminals.

3.3.2 Other IT Initiatives

Core Banking Solution (CBS):

All the 1536 branches across the country are covered under Core Banking Solution (CBS).

Bank has implemented FOREX module under CBS at all the 34 FEX centers and e-Treasury module at TIBD.

Bank has implemented Anti Money Laundering module and is in the process of implementing other modules relating to Customer Relation Management, Transfer Pricing Mechanism and Asset Liability Management which will strengthen decision support system (DSS) of the bank management.

Implementation of Core Banking Solution in Regional Rural Bank (RRB):

As on 31/03/2011, all the 329 branches of Maharashtra Gramin Bank, the RRB sponsored by the Bank, have been brought on CBS platform.

Data Centre, Disaster Recovery Site & Near Site:

The Bank has its own Data Center (CMM Level III) at Pune to take care of the CBS infrastructure requirements with Disaster Recovery (DR) site at Hyderabad. The concept of NEAR SITE as a third site replication mechanism has been implemented by the Bank with effect from 13/03/2011. This solution was selected by the Bank for its anticipated zero data loss over distance, high levels of data availability, high performance, accuracy and reliability, while enhancing the IT infrastructure efficiency level, reducing costs and enabling operational flexibility. We are one of the few public sector banks to implement the concept of near site.

ATM Network:

Bank has increased its ATM Network from 345 ATMs at the start of the year to 417 ATMs across the country by the end of the year and the project is totally outsourced on end to end basis. Bank has collaborated with VISA for the Debit Cards. Bank has joined other shared ATM Networks like NPCI which enabled access to 50000 plus ATMs in the country for our customers. Eleven ATMs are bio-metric enabled for the benefit of illiterate customers and pensioners. Bank is planning to expand the ATM network further in the ensuing year to make it 750 in all.

Corporate Network:

The bank has established its own Corporate Network - ‘MAHANET’. The network was restructured to take care of the latest IT requirements. As of date, the connectivity has been established at 1536 branches, Regional Offices, Training Colleges / Centres and Central Office.

Applications like CBS, ATM Network, RTGS, DEMAT, INTRANET, Credit Risk Rating, Online Tax Collection System (OLTAS), ROSE, etc. are put to use through MAHANET.

IP Telephones are extensively used through MAHANET at all the Regional offices, CBS branches and Head office.

Bank is continuously making efforts in doing Research & Development on latest network technologies such GPRS, 3G , MPLS and VPN etc, for providing high availability to the branches.

Real Time Gross Settlement (RTGS) / National Electronic Funds Transfer (NEFT):

To give an impetus to the Remittances functionality for convenience of the customer as well as inter-bank transactions, Bank has implemented RTGS and NEFT at all 1536 branches across the country. Straight Through Processing (STP) facility is implemented at all CBS branches whereby credit for inward remittances through RTGS / NEFT is given to the customer accounts directly by the system. It is proposed to extend the same facility to Bank’s sponsored MGB.

Internet Banking / Phone Banking / SMS Banking:

Bank has implemented the Net Banking suite – Internet Banking / Phone Banking and SMS / Mobile Banking with online and offline request processing and e-payment of Taxes (CBDT, CBEC & VAT). As on 31.03.2011, there are more than 1,02,000 customers using Internet Banking, 35,000 customers using Phone Banking and 49,000 customers using the SMS / Mobile Banking facilities.

Information System Security Policy:

Bank has put in place its “Information System Security Policy" (ISSP) comprising 34 different policy documents. The ISSP along with the Procedures are modified keeping in view the changed requirements of the Bank and approved by the Board. The Policy document has been circulated to all the staff members of the Bank for compliance.

Bank has completed the process of implementation of the ISSP across the organization. Compliance verification of the same has been initiated.

Cheque Truncation System (CTS):

Bank successfully implemented Cheque Truncation System (CTS) introduced by RBI in the National Capital Region, New Delhi. The process for implementing CTS at Chennai has been initiated, as per RBI guidelines. Bank is in readiness to participate in the CTS in Chennai as and when it is implemented. Bank has migrated all 14 Service Branches to CBS. Service branches at Pune and Mumbai have been provided with high-end MICR processors.

Video Conferencing:

Bank expanded the Video Conferencing facility through MPLS technology to all the Regional Offices for facilitating interactions, imparting trainings, conducting interviews and review of performance of Regions by the Top Management of the Bank. In view of the extensive use of the Video Conferencing facility, it is proposed to upgrade the facility so as to enable improved audio and video quality features (high definition) and facilitate extension of the usage of video conferencing to more areas including e-learning.

Business Process Re-engineering (BPR):

As a part of BPR, Bank had implemented Centralized Cheque Processing system at all its 14 service branches, Cheque Truncation System at NCR, New Delhi, Issuance of VISA Debit Card (Insta Card) as Welcome Kit at the time of opening of Account, straight- through-processing for RTGS / NEFT, Online Processing of ATM Card & Internet Banking Applications, Core to Core DD / CO / POB Reconciliation Systems and automation of outstation cheque collection process.

It is envisaged to undertake BPR initiatives involving activities such as Centralised Chequebook Issue, Personalised Cheque Printing, Centralised Customer Statement Printing & Dispatch, e-Payment Gateway, Centralised stationery indenting and printing software etc. during 2011-12.

Identification and collation of NPA from CBS system has been one of the major BPR initiatives undertaken by the Bank and implemented in accordance with the directives of Ministry of Finance, Government of India. This will help reduce manual intervention and facilitate improved monitoring of the credit portfolio.

MIS & Data warehousing:

Under MIS, Bank has developed and implemented a web-based MIS Portal for Branch Profile, Region Profile, CO Profile & Executive Dash Board of Bank’s Trial Balance and Profit and Loss account. The daily business figures are sent through SMS to all branch managers, field executives and CO executives and top management. Bank has taken implementation of a separate solution for MIS called Branch Banking Management Information System (BBMIS) to cater to the overall MIS requirements of the Bank.

It is proposed to initiate steps for implementation of Data Warehouse and Business Intelligence project during the year 2011-12.

IT Training:

Bank has operationalized 14 IT Labs across the country in addition to the existing training infrastructure to cater to the training needs of the end- users. CBS training has been imparted to 7065 staff members.

In-House Software Development:

Bank has a well-trained pool of software developers who are continuously engaged in development of various systems as per the requirements of various functional departments, regional offices etc. including various utility systems related to year-end and audit related activities.

Implementation of CPSMS: All banks have been directed by Controller General of Accounts to develop and implement the integration between their respective CBS and Central Plan Scheme Monitoring System (CPSMS) functionality which would be an online management information system and decision support system for the various plan schemes of Government of India. This would cover the accounts of various agencies who shall be receiving funds from Government. The primary objective was to have a tracking and monitoring mechanism for the fund disbursement and fund utilization under Plan schemes on real time basis. The necessary integration with CBS to facilitate viewing of transactions in the account by Government of India has been developed by our internal team within the timeline specified by Government of India.

Bank has developed e-TDS system which enables the branches to collate, compile and submit quarterly e-TDS return to tax authorities.

Facilities are provided on the Banks intranet for the benefit of branches for viewing and printing various analytical statements and statistics about the business parameters of the branch / regions.

Facility has also been provided to branches to generate and print the Form 16 (TDS Certificate) to be issued to customers as and when required. This is applicable for the TDS deducted on the interest paid to customers on their various deposits with the Bank. The facility will enable the branches to print and issue the Form 16 as and when required by the customers.

The other major systems developed and implemented are Regional Office Software (ROSW), HRM Software (Payroll and other modules), Branch Inspection Software (BRAINS), Online Tax Collection System (OLTAS), Credit Risk Rating System, PF System, INTRANET, ATM card and application status tracking, etc.

3.4 Customer Centric Initiatives taken by the Bank

The Bank has pursued high standards of customer service to ensure customer satisfaction through out the year.

As member of the Banking Codes and Standards Board of India (BCSBI) Bank has adopted the Code of Bank’s Commitment to Customers and Bank’s Code of Commitment to SMEs.

Duly documented policies approved by the Board on “Deposits", “Collection of Cheques / instruments", “Redressal of Grievances", “Compensation" and “Operational Procedure for settlement of claims of Deceased Depositors" are in place. These policies are displayed on Bank’s website.

The Committee of the Board on Customer Service meets periodically to monitor the quality of customer service and redressal of customer grievances to ensure customer satisfaction. The Standing Committee on Customer Service at Central Office and Regional Level Customer Service Committees at all the regional offices also meet regularly to address and review various customer related matters to take steps for improvement on an ongoing basis.

Customer Service Committees at all the branches are formed and a cross section of customers representing depositors, corporates, businessmen and senior citizens are invited to attend its meetings to have feedback and suggestions on schemes, products and services.

A full fledged grievances redressal machinery is in place to respond promptly to customer grievances. Complaint Management Cells are operative at Central Office and at all Regional Offices of the Bank. The Committee of the Board on Customer Service and Standing Committee on Customer Service at Central Office monitor the progress of redressal of customer grievances regularly.

The Bank has implemented all major recommendations of Goiporia Committee and Dr. S.S.Tarapore Committee relating to customer service.

The Bank has in place internet based mechanism for lodging the complaint or to give suggestions / feedback on services by the customers and for providing acknowledgement and status of their feedback / complaint.

The Bank’s Anniversary Day on 8.2.2011 was celebrated as Customers’ Day and Chairman & Managing Director interacted with the customers across the country through video conferencing.

3.5 KYC/AML

Know Your Customer (KYC) norms/Anti-Money Laundering (AML) standards/ Combating of Financing of Terrorism (CFT) and obligation of Bank under PMLA, 2002

• The Bank has Board approved KYC-AML-CFT Policy in place. The said Policy is the foundation on which the Bank’s implementation of KYC norms, AML standards and CFT measures is based.

The full KYC compliance entails staff education as well as customer education for which the following measures are taken by the Bank.

• A comprehensive list of KYC documents is uploaded on the Bank’s web site for the benefit of customers

• Regular training sessions are conducted on KYC-AML-CFT guidelines at the Bank’s training establishments.

3.6 Information Facilitation Centre:

Mahabank Facilitation Centre is operating from Mumbai since June 2005 and can be accessed through two All India Toll Free Numbers i.e. 1800- 222340 and 1800-220888. Toll Free Telephone Numbers have been made available at 12 major cities.

During the year, 27,840 calls were received on toll free numbers regarding various products and services offered by the Bank, queries and feedback on the Bank’s services.

An Information Facilitation Centre had been set up in July 2001 in Head Office for providing information on various schemes and products of the Bank and any other information / assistance that may be required by customers and public.

During the year, 6,695 complaints were received and redressed through this center.

3.7 Risk Management

Banking business is becoming more complex and exposed to wide array of risks. Success of a bank will be derived based on its risk management capabilities. Keeping this in mind the Bank has adopted various strategies for effective risk management.

Credit Risk

The Credit Risk Management process forms an integral part of overall risk management of the Bank. The Bank has put in place comprehensive Lending Policy, Loan Review Policy and Risk Management Policy for credit risk management. The policies prescribe various guidelines, procedures, standards and prudential / exposure norms.

The Bank has constituted Credit Risk Management Committee (CRMC) which reviews the policies, procedures and systems relating to credit administration and monitoring, at periodic intervals.

Credit concentration risk is regulated through prescribing, monitoring and reviewing of credit exposure limits in terms of single borrower / group borrower exposure, exposure to sensitive sectors, industry exposure, substantial exposure, geographical exposure, identifying the thrust and low priority areas.

To evaluate the risk perception in a lending proposition, the Bank has put in place an in-house developed Credit Risk Rating Framework (CRRF) for rating of existing as well as entry level borrowers in various asset classes, as desired under Basel II. The Bank has prescribed threshold ratings for entry level exposures with a view to building up credit portfolio within the risk appetite and achieve the profit plan. With a view to separating the Credit Risk Management function from credit sanctioning, Credit Approval Grids are set up at various levels which assess the risk perception through a committee approach.

The Bank has undertaken migration analysis of credit risk rating of borrowers over a time horizon and probability of default has been estimated in line with Basel II requirements. To achieve risk-return trade off, risk based pricing framework has been implemented. Portfolio reviews and industry studies are undertaken to assess the risks lying in the credit portfolio and adopt strategies to improve credit quality. Stress testing is also undertaken periodically.

Market Risk

Market Risk is the risk to the Bank resulting from the movements in market prices due to changes in interest rates, foreign exchange rates, equity price and commodity price. The changes impact the Bank’s earnings and capital and can have ramifications on the Bank’s liquidity and profitability.

The ALM Policy, which is reviewed annually and approved by the Board, prescribes the parameters for management of Market Risk and Liquidity Risk. The Bank has constituted Asset Liability Management Committee (ALCO), which meets at regular intervals to review the interest rate scenarios, liquidity positions etc. The ALCO manages and supervises Market Risk and Liquidity Risk through review of rates of interest on deposits / advances. ALCO also monitors adherence to various risk limits and determines the business strategy in light of prevailing interest rate scenario and liquidity position in the market with a view to optimizing profit and overall balance sheet management.

Interest Rate Risk is managed through the prescriptions of ALM Policy. Various tools viz. Earnings at Risk, Duration and Value at Risk models are used for monitoring interest rate risk. The ALCO reviews the risk on regular basis and measures are initiated to minimize the interest rate risk.

Investment Risk is managed through the prescriptions made in the Investment Management Policy & Investment Risk Management Policy.

For management of Foreign Exchange Risk, prudential limits for open foreign exchange position, aggregate gap position, Daylight limit, Overnight limit, Net open overnight position, Stop loss limit, Limit for undertaking swaps / investment / borrowing overseas, inter bank exposure limits etc. have been put in place. These limits are monitored regularly.

Management of Liquidity Risk is achieved through ongoing review of structural liquidity and short term dynamic liquidity as well as daily liquidity position. Stress testing is undertaken periodically.

Operational Risk

The Operational Risk Management Policy of the Bank outlines the framework for measuring, monitoring and controlling operational risk in the Bank. The Bank lays due emphasis on identifying risk prone areas and taking suitable remedial actions by streamlining systems & procedures, imparting training so as to control operational risks. The Operational Risk Management Committee (ORMC) meets regularly to review the matters related to operational risk. The Bank has put in place policy on Business Continuity Planning. A policy on outsourcing is also formulated which facilitates use of expertise available in the market with adequate safeguards against risk associated with outsourcing.

Basel II Compliance

The Bank is Basel II compliant in terms of the New Capital Adequacy Framework (Basel II) guidelines issued by RBI. Bank has adopted Standardized Approach for Credit Risk, Standardized Duration Approach for Market Risk and Basic Indicator Approach for Operational Risk as per RBI guidelines for capital adequacy computation. External credit ratings from approved rating agencies are used for risk weighting of corporate exposures as required under Basel II. Bank has also put in place a policy on Utilization of Credit Risk Mitigation Techniques & Collateral Management.

The Bank has evolved Board approved Internal Capital Adequacy Assessment Process (ICAAP) which covers identification and measurement of risks other than Pillar 1 risks (i.e. Credit Risk, Market Risk & Operational Risk), to meet the requirements of Pillar 2 of Basel II norms. The Bank has adhered to disclosure norms as stipulated in the guidelines of RBI to meet Pillar 3 requirements of Basel II.

Bank has drawn a roadmap for implementation of advanced approaches under Basel II.

Improvement in awareness of Basel II norms amongst the employees is ensured through training. Knowledge and skill levels of risk management team at Central Office are constantly upgraded through exposure to external trainings, workshops and seminars.

3.8 Internal Control Systems

Inspection & Concurrent Audit:

The Inspection and Audit system and various measures of internal control are adopted by the Bank to ensure identification/assessment and mitigation of operational risks.

Inspection of Branches:

The Bank continued to adhere to the Jilani Committee recommendations and inspected 1011 branches during the year covering 65.82 per cent of total branches of the Bank. As per RBI guidelines under Risk Based Supervision, the Bank has undertaken Risk Based Internal Audit (RBIA) al all these 1011 branches.

Conference of all inspecting officials and heads of inspection cells was organized during September/October 2010 to update them on policies, procedures, business environment, opportunities and challenges for banks, emerging areas of risks and their role in alerting the top Management of existing and impending risks at branches and offices.

Surprise Inspection:

In pursuance of the Ghosh committee recommendations, surprise inspection was carried out at 110 branches focusing mainly on high risk areas at the branches.

Concurrent Audit:

312 Branches and 4 central office Departments were subjected to Concurrent Audit during the year. These branches covered 66 per cent of aggregate deposits and 77.50 per cent of total advances of the Bank.

Income & Expenditure Audit:

Income & Expenditure Audit for the period from October 2009 to September 2010 was carried out at 720 branches to identify and recover income leakages, if any. Half yearly Expenses Audit of all the Regional Offices was carried out during the year.

Management Audit:

Management Audit of 16 Regional Offices and 13 departments at Central Office was carried out for assessing their effectiveness in terms of supervision and controls.

RBI Inspection under Section 35 of the Banking Regulation Act:

During the year 2010-11, RBI inspected 5 branches and 3 Regional Offices under Section 35 of RBI Act. RBI conducted AFI of the bank during the period 01.06.2010 to 21.07.2010.

3.9 Vigilance

Vigilance activity in the Bank is an integral part of the managerial function. Its objective is to enhance the level of managerial efficiency, effectiveness and to ensure a proper climate for an efficient administration, where officials can perform the duties without any fear or favour.

‘Vigilance’ in bank is maintaining a proper balance between flexibility and accountability.

Preventive Vigilance is the most important aspect of vigilance. With a view to improve functioning at all levels, the Bank has taken the necessary steps as under:

In accordance with CVC directives, Vigilance Committees have been formed at the Branches having staff of 20 and more, to review/ monitor sensitive and fraud prone areas and report abnormalities observed therein, if any.

‘Fraud Risk Management Policy’ on prevention, detection, classification and reporting of frauds including action to be taken, has been adopted by the Bank and circulated for the guidance and use of the branches and field functionaries.

3.10 Compliance

As per the Reserve Bank of India guidelines, Board approved Compliance Policy is in place and the compliance department is headed by Chief Compliance Officer who is in the rank of Deputy General Manager. The Compliance Department ensures timely compliance to the directions / communications received from Reserve Bank of India / Government of India / IBA and other agencies. The compliance status is reviewed by the Top Management / Audit Committee of the Board on weekly / monthly/ quarterly basis. To improve the compliance culture in the Bank session on compliance has been included in training programme for staff members.

3.11 Marketing And Publicity

The landmark of crossing Rs. 1.00 lakh crore business was achieved on 31.03.2010. This occasion was given wide publicity by giving advertisements in print media and electronic media.

The concluding ceremony of the Platinum Jubilee year was held at Vigyan Bhawan, Delhi. Hon’ble Finance Minister, Shri Pranab Mukherjee, Chief Minister of Maharashtra, Shri Ashok Chavan, Union Minister of State for Finance Shri Namo Narain Meena and Union Minister of State for Communications and IT, Shri Sachin Pilot, graced the occasion.

A special commemorative Cover was released at the hands of Shri Sachin Pilot on Bank’s completing 75 years of service to the nation.

Valued clients from all parts of the country along with top Government officials from Delhi attended the programme.

Wide publicity was given in print and electronic media on 100 per cent CBS achievement of Maharashtra Gramin Bank (Bank sponsored RRB), observing Customer’s day at branches, Regional Offices and Central office, launch of new products/ services and CASA campaigns.

3.12 Citizen’s Charter

The Bank has adopted the Charter since 2000-01, which details the duties and responsibilities of the Bank towards its customers. The Charter is displayed at all the branches and at the website and has been updated from time to time. The Bank has also adopted a Citizen Charter of RBI on exchange of notes and coins.

4. SOCIAL BANKING

4.1 Priority Sector Lending

It has been the constant endeavor of the Bank to facilitate equitable and sustainable economic development by timely and hassle-free availability of credit for productive purposes to Small and Marginal Farmers, Micro & Small Enterprises, Retail Traders, Professional & Self Employed, Women Entrepreneurs and entrepreneurs from economically weaker sections.

The outstanding advances under Priority Sector as of March 2011 aggregated to Rs. 16,480.04 crore, constituting 40.66 per cent of the Adjusted Net Bank Credit of previous year against the stipulated minimum target of 40 per cent.

The rise in Priority Sector Advances was Rs. 2,247.78 crore over March 2010 in absolute terms.

4.2 Agriculture

The Bank disbursed Rs. 2874.28 crore for agriculture and allied activities during the year 2010-11. The outstanding advances to agriculture sector as of 31.03.2011 were Rs. 4691.17 crore i.e.11.58 per cent of Adjusted Net Bank Credit.

The Bank undertook awareness/sensitization programmes for all the branches for increasing advances to agriculture.

4.2.1 The Bank successfully implemented Agriculture Debt Waiver and Debt Relief Scheme of the Government of India and the Maharashtra state Government.

Under Government of India Scheme bank has covered 86584 small and marginal farmers for debt waiver involving Rs. 219.28 crore and 39320 farmers for debt relief involving Rs. 82.01 crore.

Under Government of Maharashtra’s Debt Waiver & Debt Relief Scheme bank has covered 36317 farmers for debt waiver involving Rs. 36.99 crore and 49353 farmers for debt relief involving Rs. 98.12 crore.

4.2.2 Mahabank Kisan Credit Card (MKCC)

This scheme gained popularity especially in rural areas where it is being propagated successfully and vigorously. The Bank has issued total 281879 Kisan Credit Cards to farmers. Credit flow to MKCC beneficiaries is Rs. 1493.42 crore as on 31.03.2011.

4.3 Micro, Small and Medium Enterprises (MSMEs)

SMEs are recognized as a major growth engine for the Indian economy. They generate opportunities for direct and indirect employment by facilitating use of natural resources and local skills to stem the tide of migration to urban areas and promote low investment enterprises. Finance is made available to viable enterprises at an attractive and low rate of interest. On line enquiry portal is made available on the Bank’s website during the year.

The Bank has adopted Simplified Loan Application for MSEs and the same is displayed on the Bank’s website. The Bank has also adopted Bank’s Code of Commitment to Micro and Small Enterprise and it is displayed on the Bank’s website.

The Bank’s lending to Micro, Small and Medium Enterprises which was at the level of Rs. 3,699.64 crore as at 31.03.2010, increased to Rs. 7,037.31 crore as at 31.03.2011, which translates into a y-o-y growth of 90.22 per cent.

4.3.1 Maha-Entrepreneur

Under the scheme, the Bank is providing finance up to Rs. 100.00 lakh to Micro and Small Enterprises without Collateral Security and/ or Third Party Guarantee.

Accounts under the scheme are covered under Credit Guarantee Fund Scheme for Micro, Small and Medium Enterprises of Government of India. The Bank is bearing the entire guarantee fee and 50 per cent of annual service fee, which is to be paid to the Trust under CGFMSE. The Bank sanctioned loans of Rs. 311.94 crore to 5495 borrowers under this scheme up to March 2011. During the year, coverage under Credit Guarantee Fund Scheme has increased by 66.87 per cent.

5. IMPORTANT SCHEMES/PROJECTS OF THE BANK

5.1 New initiatives under Retail Loans:

a. Centralized processing of retail loans.

The Bank has opened 15 Retail Assets Branches and 18 Retail Processing Centers covering all the Regions for hassle free and quality disbursement of retail loans.

b. Mahabank Jewel Loan Scheme.

Gold ornaments are the traditional and inherited form of savings among the people in India. Being one of the most liquid and precious asset, it serves as a dependable and acceptable form of security to raise loans for meeting immediate financial needs for business, agricultural, consumption purposes such as marriage, medical, educational expenses etc., With a view to meet the requirement of our customers, Bank has launched a new Retail Loan product “Mahabank Jewel Loan Scheme" w.e.f. 01.11.2010. For senior citizens, loan against gold ornaments is available at 0.75 per cent less than the regular interest rate.

c. Mahabank Top-Up Loan Scheme.

In order to extend additional credit support to our regular housing loan borrowers, Bank has launched another new Retail Loan product “Mahabank Top-Up loan scheme" w.e.f.01.11.2010.

5.2 Housing loan to public

The Bank has in place Housing Loan Scheme to meet the needs of all economic segments including NRIs. Financing housing sector in rural and urban parts of India is a thrust area.

The Bank’s lending to housing sector has grown by 17.99 percent during the year to reach the level of Rs. 4,279.68 crore as at 31.03.2011. The Bank is also implementing Golden Jubilee Rural Housing Scheme of the Government of India in rural areas having population not exceeding 50,000.

5.2.1 One per cent Interest Subvention on Housing Loan up to Rs. 10.00 lakh.

As per GOI guidelines, Bank has provided 1 per cent interest subvention to borrowers, who availed housing loans upto Rs. 10.00 lakhs costing upto Rs. 20.00 lakhs.

5.3 Model Educational Loan scheme

With the objective of ensuring that all deserving students get opportunity to pursue higher education, the Bank implemented a Model Educational Loan Scheme. As of March 2011, the Bank had lent Rs. 481.40 crore to 24354 students. The Bank has provided the facility of online submission of application for education loan through web-access.

5.3.1 Interest subsidy to Education loan borrowers under Economically Weaker Sections:

Bank has implemented interest subsidy scheme of Government of India for the year 2009-10 where the parental annual income is upto Rs. 4.50 lakh. Under the scheme, entire interest charged during moratorium period is reimbursed by the Central Govt.

5.4 Micro Finance

The Bank has always recognized the importance of credit to rural and urban poor for taking economic activity. The SHGs have proved to be effective instruments for empowerment of women. Bank has opened specialized branches for financing SHGs at Hadapsar, Pune and Goregaon, Mumbai during the year. The Bank has actively financed non-traditional activities of various Self Help Groups (SHGs).

As on 31.03.2011, there were 84087 SHGs formed by the Bank, out of which 81471 SHGs had availed aggregate financial assistance of Rs. 229.63 crore from the Bank constituting a growth of 54 per cent over previous year.

5.5 Assistance to SC/ST beneficiaries:

The Bank has been actively extending finance to SC/ST beneficiaries through various schemes. Total finance as on 31.03.2011 to SC/ST beneficiaries stood at Rs. 789.85 crore, constituting a growth of 15 per cent.

5.6 Advances to Minority Community:

A special cell has been set up at Central Office to review & ensure smooth flow of Credit to minority community. As of March 2011, the outstanding advances to minority communities were at Rs. 874.53 crore to 57135 beneficiaries.

5.7 Mahabank Current Account Diamond Scheme:

Existing schemes viz Pearl and Sapphire have been refurbished and another new Current Account Scheme viz Diamond Scheme with additional free facilities has been introduced wef 14th December 2010.

5.8 Mahanidhi Scheme:

New “Maha Nidhi" Deposit scheme was introduced on 26.02.2011 to shore up retail term deposits of the Bank. Deposits amounting to Rs. 2,922.68 crore were mobilized under the scheme till 31.03.2011.

5.9 Additional rate of Interest to Senior Citizens

Interest rate on deposits in maturity slabs of one year and above has been increased to 0.75 per cent from 0.50 per cent for an amount less than one crore only w.e.f 10.01.2011

5.10 Maha Chetana Programme:

Maha Chetana Programme, a staff motivation campaign, was launched in October 2011 as an empowerment programme for the active participation of all staff members to achieve the desired goals of the Bank and take it to new heights in coming years. Maha Chetana Programme focused mainly on 4 key business parameters i.e. –

1. Reduction in NPA

2. Sustaining deposit growth / further increasing CASA deposits

3. Increasing quality advances

4. Increasing fee based income

Hon.Chairman & Managing Director visited all the 32 regions & interacted with all the employees for their active participation in business growth, NPA recovery etc under the Maha Chetana programme, which was overwhelmingly received by the staff who vowed for the business development of the bank.

6. CORPORATE SOCIAL RESPONSIBILITY

6.1 The Rural Development Centres at Hadapsar and Bhigwan in Pune District

of Maharashtra have been undertaking various developmental activities for the benefit of farmers viz. Lab to Land Project, Re-development of Saline Soils, Soil Testing and offering advice on the use of fertilizers.

6.2 A Trust viz. Mahabank Agricultural Research and Rural Development Foundation (MARDEF) established by the Bank undertakes various projects and village improvement programmes. MARDEF is imparting training to farmers on various subjects in agriculture, e.g. dairy, Emu farming, goat rearing, best practices in grape farming, application of fertilizers, agriculture credit schemes, etc.

6.3 The Bank has established Mahabank Self Employment Training Institute (MSETI) for providing training to rural youth and women to enable them to acquire skills for self-employment through small business enterprises. The Institute has centers at Pune, Nagpur, Aurangabad, Amravati and Nasik. The Institute has so far imparted training to 7117 youths and has achieved settlement rate of 70 per cent.

6.4 Gramin Mahila Va Balak Vikas Mandal (GMVBVM), an NGO formed by the Bank is actively involved in formation, nurturing, training and ensuring linkage of SHGs to Bank Credit. The GMVBVM also helps SHGs in marketing their products through outlets established in Pune City under the name “SAVITRI". The GMVBVM guides and actively helps SHGs for selection and purchase of raw materials and quality production.

6.5 The Bank has opened three Financial Literacy & Credit Counselling centers

in three Lead Districts namely Pune, Nasik and Aurangabad.

6.6 Bank has helped various NGOs during the year extending financial support to acquire necessary inputs for carrying their activities. These include the following:

i) An Audio logical assessment equipment which helps detection of hearing related challenges among children below the age of 3 years in underdeveloped areas around Pune

ii) CCTV for use in free eye check up camps conducted in backward areas in Maharashtra

iii) Retinal camera for use in eye surgeries

iv) Building and physical comforts to mentally retarded and cerebral palsy children

v) Motorized vehicles to physically challenged persons in Delhi

vi) Construction of toilets in remote underdeveloped villages.

7. LEAD BANK SCHEME

The Bank has Lead Bank responsibility in six districts of Maharashtra State viz. Aurangabad, Jalna, Nasik, Pune, Satara & Thane. Every year district credit plans for the districts are prepared and implemented with the cooperation of other banks. The Performance of the Bank during the year in respect of six lead districts under priority sector lending was 109 per cent of the targets.

State Level Bankers’ Committee:

The Bank is the Convener of State Level Bankers’ Committee (SLBC) for the State of Maharashtra. Quarterly meetings are held regularly to oversee the implementation of State Annual Credit Plans, priority sector lending and Govt. sponsored schemes in the State. During the year four SLBC meetings were held.

As an SLBC convener, state specific financial inclusion Plan (Swabhiman) was drawn for 4292 unbanked villages having population over 2000 in the state for extending banking services to unbanked habitations. The banks in the state have opened banking outlets in 1692 unbanked villages through brick & mortar branches, mobile van and Business correspondents’ model for extending branchless banking as of 31.03.2011.

Registrar for issue of Aadhaar- UIDAI

The Bank has entered into MoU with Unique Identification authority of India (UIDAI) for enrolment of Aadhaar (Unique identification number to residents of India) and became a Registrar.

With the signing of the MoU, the Bank became a partner in the efforts of the UIDAI set up by Government of India, for issuing Unique Identity Numbers to residents of India.

Bank has commenced the enrolment process on pilot basis at Pune & Mumbai for issuance of unique identification number (Aadhaar) for its staff and customers on 8th Feb 2011 (Anniversary day) and completed 13000 enrolments as on 31.03.2011.

Financial Inclusion plan – Swabhiman

Swabhiman is path-breaking initiative by Government of India to cover the economic distance between rural and urban India. It promises to bring basic banking services to all unbanked villages in the country with population above 2000. Accordingly, our bank has been allotted 1215 unbanked villages in the country to be covered under financial inclusion for inclusive growth.

The swabhiman movement facilitates opening of bank accounts, provide need based credit, remittance facilities and help to promote financial literacy in rural India using various models and technologies including branchless models through Business correspondent (BC)/ Customer Service Provider (CSPs) models.

Bank has been implementing IT enabled financial inclusion for providing branchless banking in allotted 1215 unbanked villages. As on 31.03.2011, bank has covered 484 villages through BC model and opened two branches at financial inclusion villages i.e., Zari-Jamani and Asangon in Chandrapur and Thane districts of Maharashtra respectively.

8. SUBSIDIARIES/JOINT VENTURES AND SPONSORED INSTITUTIONS

8.1 Performance of Regional Rural Bank

Maharashtra Gramin Bank (MGB) is a Regional Rural Bank sponsored by our bank having its Head Office at Nanded, Maharashtra state. Total no of branches as on 31.03.2011 stood at 329 covering 16 out of 33 districts of Maharashtra state.

MGB has migrated all its 329 branches to CBS platform within a record time period of 77 days.

During the year 2010-11, as per GOI policy, MGB has received recapitalization support of Rs. 45.34 crore for improving Capital to Risk Asset Ratio (CRAR) from all stake holders i.e. Government of India, Bank of Maharashtra and Government of Maharashtra in the proportion of their share holding of 50:35:15 respectively.

8.2 The Maharashtra Executor & Trustee Company Pvt. Ltd. (METCO)

The Maharashtra Executor & Trustee Co. Pvt. Ltd (METCO) was established in 1946 with an aim to provide services auxiliary to banking such as

• Drafting & Execution of will

• Management of private trusts

• Management of public charitable trusts

• Management of investments & house properties as attorney

• Guardianship of minor’s property

• Consultation for sale/purchase of property

• Filing of I-Tax Returns for individuals

The Company has its units at Pune, Mumbai, Thane and Nagpur.

During 2010-11, new assignments for Management of Trusts received were 24, bringing the total number of Public & Private Trusts under management to 1002. New Wills added during the year were 46 bringing the total number of Wills in custody and execution to 1063.

The Company manages properties both movable and immovable of 120 clients under the Power of Attorney. The Company also acts as the Trustees in respect of 147 policies under Married Women’s Property Act and acts as Court appointed Guardian of minor’s property in 10 cases.

9. IMPLEMENTATION OF OFFICIAL LANGUAGE POLICY

Progressive use of Official Language.

During the year 2010-11, the Bank has made various remarkable achievements in the field of Official Language Implementation.

¦ Our former Chairman & Managing Director received the 2nd prize won by the Bank in Reserve Bank of India Bilingual House Magazine competition for the year 2008-09 at a function held at Mumbai on 26th May, 2010.

¦ TOLIC, Mumbai convened by our Bank has received Indira Gandhi Rajbhasha shield. The prize was received by the then General Manager Shri V. Kannan at the hands of Honorable Vice President of India on 14th September, 2010 at New Delhi.

¦ The Bank also secured 4th place in Reserve Bank of India Bilingual House Magazine Competition for the year 2009-10.

¦ Our Regional office, Raipur was awarded 3rd prize for better use of Hindi by the TOLIC, Raipur.

The Bank is the Convener for Town Official Language Implementation Committee (TOLIC) in Pune, Mumbai and Solapur. Meetings of these committees were held regularly. The Bank is also a Convener of State Level Bankers Committee (Rajbhasha). Meeting of the committee for this year was held on 8 March, 2011.

10. DIRECTORS’ RESPONSIBILITY STATEMENT

The Directors confirm that in the preparation of the annual accounts for the year ended 31.03.2011:

• The applicable accounting standards of the Institute of Chartered Accountants of India, have been followed along with proper explanation relating to material departures, if any;

• The accounting policies framed in accordance with the guidelines of the Reserve Bank of India, are consistently applied and proper disclosures are made for changes, if any;

• Reasonable and prudent judgment and estimates were made so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and the profit of the Bank for the year.

• Proper and sufficient care was taken for maintenance of adequate accounting records in accordance with the provisions of applicable laws governing banks, in India; and

• The accounts have been prepared on a going concern basis.

11. CHANGES IN THE BOARD OF DIRECTORS

During the year 2010-11, the following changes took place in the Board of Directors:

Shri Shirish D. Dhanak was appointed as Workmen Employee Director w.e.f 21st July, 2010.

Shri S.K.Gogia, RBI Nominee director, ceased to be the Director w.e.f 29th July 2010.

Mrs. Kamala Rajan was appointed as RBI nominee director from 30th July, 2010.

Shri Allen C.A. Pereira, CMD, demitted office on 30th September 2010 on reaching superannuation.

Shri A.S. Bhattacharya was appointed as Chairman and Managing Director w.e.f 1st October, 2010.

Shri. T.Parameswara Rao, ceased to be the Director w.e.f 12th November 2010.

Shri Chittaranjan Patwari ceased to be the Director w.e.f. 22nd January 2011.

Shri Anand K Pandit and Dr. Dinesh Shatilal Patel, were re-elected as directors representing Share holders w.e.f 1st February, 2011

The Board of Directors place on record their sincere appreciation for the valuable contribution made by the former Chairman & Managing Director, Shri Allen C.A. Pereira and other outgoing Directors.

12. ACKNOWLEDGMENTS

The Board of Directors wishes to express sincere thanks to the Government of India, the Reserve Bank of India, the Securities and Exchange Board of India, Insurance Regulatory and Development Authority, Indian Banks’ Association and Stock Exchanges for their valuable advice and support; to the customers and shareholders for their patronage; to the correspondents and associates for their co-operation and to all the members of staff of “Mahabank Family" for their unstinted commitment and contribution to the overall development of the Bank.

For and on behalf of the Board of Directors

(Anup S. Bhattacharya)

Chairman and Managing Director

Pune

April 30, 2011

---

Mar 31, 2010

2.16 Income, Expenditure and Profitability

There has been a rise in total income from Rs. 4,791.58 crore at March 2009 to Rs. 5,326.81 crore at March 2010, i.e. a growth of 11.17 per cent during the year. The details of income components are as under:

(Rs. in crore)

Particulars 2008-09 2009-10 Variation (%)

Interest/ discount on advances/ bills 3266.60 3369.63 3.15

Income on investments 989.84 1297.90 31.12

Interest on interbank lending & 35.12 68.03 93.71 other interest

Total interest income 4291.56 4735.56 10.35

Non-interest income 500.02 591 -2418.24

Total income 4791.58 5826.81 11.17

Interest on deposits 2783.22 3183.06 14.37

Interest on borrowings 251.81 256.25 1.76

Interest expenditure 3035.03 3439.31 13.32

Staff expenses 579.62 655.50 13.09

Non staff expenses 383.40 417.45 8.88

Total non interest expenses 963.02 1072.95 11.41

Total operating expenses 3998.05 4512.25 12.86

Operating profit 793.52 814.55 2.65

Provisions and contingencies 418.36 374.97 -10.37

Net profit 375.171 439.581 17.17

2.17 Financial Ratios

Particulars 2008-09 2009-10

EPS (Rs.) 8.71 10.21

Cost to income ratio (%) 54.82 56.85

Return on assets (%) 0.72 0.70

Return on equity (%) 21.93 21.43

Book value per share (Rs.) 39.74 49.11

Profit per branch (Rs. in lakh) 26.40 30.25

Profit per employee (Rs. in lakh) 2.75 3.21

Business per branch (Rs. in crore) 61.28 71.73

Business per employee (Rs. in crore) 6.39 7.62

Interest income as % to average working funds 8.29 7.50

Non int. income as % to average working funds 0.97 0.94

Interest spread as % to average working funds 2.43 2.05

Operating profit as % to average working funds 1.53 1.29

Staff expenses to average working funds 1.12 1.04

Dividend (%) 15.00 20.00

2.18 Dividend

The Board of Directors have proposed a dividend of 20.00 per cent (i.e. Rs. 2.00 per share) for the year ended 31.03.2010.

3. ORGANISATION AND SUPPORT SYSTEM

For the quick and efficient decision making, the Bank took steps in opening specialized branches and introducing technology based services and support systems. Three retail credit hubs were established during the year one each at Pune, Mumbai and Delhi to facilitate robust and qualitative growth in retail credit with special focus on housing loans.

Five Asset Recovery branches were also set up one each at Pune, Mumbai, Nagpur, Kolkata and Aurangabad to provide greater thrust to the legal and administrative measures for recovery of NPAs.

3.1 Branch Network and Expansion

During the year, the Bank opened 33 new branches. As on 31.03.2010, the total branch network comprised of 1453 branches spread over 22 states and 2 union territories. The branch network includes specialized branches for foreign exchange, government business, treasury & international banking, industrial finance, micro, small and medium enterprises including small- scale industry, hi-tech agriculture, pension payment, pension processing, retail credit and asset recovery. Area wise classification of branches as on 31.03.2010 is given in the table below:

Sr. No. Classification As on 31.03.09 As on 31.03.10

1 Rural 520 526

2 Semi-Urban 262 266

3 Urban 271 281

4 Metropolitan 368 380

Total 1421 1453

The Bank has on hand 79 licenses for opening of new branches including 7 branches in the North East states of Assam, Arunachal Pradesh, Sikkim and Meghalaya.

3.2 Human Resource

As on 31.03.2010, the Bank had a human resource of 13,673 employees comprising of 4,448 Officers, 6,356 Clerks and 2,869 Sub-staff.

3.2.1 Human Resource Development

The Bank has put in place a comprehensive HRM Policy Document that provides road map for acquiring need based and appropriate human resources, its development and retention through training, job enrichment, reward, recognition and accountability for performance, career progression and welfare.

During the year, internal promotion process was carried out and 244 clerks were promoted to Officer cadre.

682 employees ceased to be in service during the year on account of retirement, resignation and other reasons.

The Bank recruited 176 Clerks and 312 Officers including 129 Specialist Officers in various disciplines viz., Treasury, Risk Management, Marketing, Human Resources, Agriculture, Security, Information Technology and Law. In February 2010 the Bank has completed recruitment of 100 Post Graduates in Business Management / Administration from the campuses of reputed Business Management Schools. Out of total 489 persons recruited during the year, 166 persons belong to SC/ST and OBC categories.

The Schemes of reward and recognition to officers and staff for outstanding contribution to business development, customer service includes membership to the Chairmans Club, Better Managed Branch / Region Trophy, cash incentives to all members of staff of Best Performing branches besides deputation for training at prestigious institutions in India and abroad.

The Bank has been allocating upto 3 per cent of its net profits towards schemes for the welfare of staff. The schemes are administered by a Trust. The Bank has endeavoured to promote a healthy industrial relations climate through fair, transparent and firm handling of issues keeping in view the interest of all stakeholders.

3.2.2 The Bank has been complying with the Reservation Policy of Government of India. Special Cells at Central Office and all Regional Offices are functioning to monitor the implementation of the Reservation Policy and to redress grievances of SC/ ST/ OBC/ Physically Challenged employees as weil as Ex- servicemen. The Bank has designated two Chief Liaison Officers at Central Office and has set up SC/ST Cells at each of its 32 Regional Offices for the purpose. During the year, periodical meetings were held with SC/ ST/ OBC Employees Association to discuss implementation of reservation policy and other constitutional safeguards and also to facilitate involvement in business growth. Similar meetings were also held at Regional level.

The numbers of employees belonging to different categories are as under:

S.NO EMPLOYEES NO. OF PERCENTAGE EMPLOYEES TO TOTAL

1. Women 2954 21.61%

2. Physically Challenged 199 1.45%

3 SC Employees 2754 20.14%

4 ST Employees 951 6.96%

5. OBC Employees 617 4.51%

Rosters have been maintained as per Govt, guidelines and are regularly inspected/ checked.

3.2.3 Training Activities

The Bank has a Training system which facilitates attention to regular/ periodic assessment of skill gaps at various levels in relation to existing and emerging business opportunities, Skill building in Credit, Forex, Customer Relationship Management, Marketing of Products and Services, Credit Monitoring and Recovery, Risk Management, Technology based Banking, Branch Management. Complying with statutory, legal and policy requirements and Preventive Vigilance received special attention during the year.

The training programmes were also held on thrust areas like financing SMEs, retail lending, agriculture finance and rural development.

Presently, the Bank has an apex Training College with three training establishments operating under it, one each at Mumbai, Nagpur and Pune. Information Technology Training Institute and Computer Labs train the officers and staff to utilize Information Technology for effective customer service and efficient back office functions.

During the year, all the training establishments of the Bank together conducted a total of 504 programmes, out of which 191 were for officers, 280 for clerks and 33 for sub-staff members.

A total of 10,047 employees participated in various training programmes during the year, in-house and external, comprising of 5,044 officers, 4,366 clerks and 637 sub-staff members, of whom 2,036 were SC employees, 458 ST employees and 1,358 women employees. 1,192 members of staff were trained to handle the Core Banking Solution (CBS) software for efficient customer service and back office function.

10 Executives/ Officers were deputed abroad for training programmes, participation in seminars/ international meets etc. for facilitating global experience and exposure to developments taking place in Banking and Financial services.

A total of 397 staff members from 19 Regions were covered under Camp/ Locational Training.

The IT Labs across the country in addition to the existing training infrastructure cater to the training needs of the end-users at the branches and regional offices. During the year, 7,826 staff members were imparted training under CBS.

Executive Development Programmes were also held during the year for building skills and enhancing efficiency.

3.3 Information Technology

The Bank has been leveraging the tools of Information and Communication Technolgy for improving the operational capabilities and customer service. The year 2009-2010 has been a landmark year in the chronicle of the Bank as far as technology implementation and up-scaling are concerned. The Bank completed the process of networking of all the 1,453 branches and bringing them under Centralized Solution on February 2,2010, thereby achieving 100% CBS. The Bank offers a bouquet of customer-centric IT products and services as part of its endeavour to be a one stop mall for banking and financial services.

3.3.1 Core Banking Solution (CBS)

In addition to covering all branches, the Bank has brought all the 32 Regional Offices under CBS fold.

The Bank has implemented FOREX module under CBS at all the 28 FEX centers and e-Treasury at TIBD. The Anti Money Laundering (AML) Module has been implemented at 1,258 branches generating various statutory reports. The Bank is in the final stages of implementing other modules like e-Credit, Performance Budgeting, Transfer Pricing, Asset Liability Management (ALM), Customer Relationship Management (CRM) etc.

3.3.2 New Initiatives

Welcome Kit - Issuance of Mahabank Insta Debit Card: Issuance of VISA ATM Debit Card (Insta-Card) as Welcome Kit at the time of opening of accounts for Savings and Current Accounts.

The Mobile Banking product Mafia Mobile was launched offering services like balance enquiry, view last three transactions, cheque status enquiry, request for cheque book / statement of accounts, change MPIN and intra bank fund transfer up to Rs.50,000 per day.

Maha E-Statement - Account statement on email: A customer centric product Maha e-statement for sending weekly / monthly electronic statements for saving, current, cash credit and loan accounts automatically to the registered customers via e-mail.

SMS Alerts for transactions: Sending transaction alerts and reminders to customers for the transactions done by them.

Online Share Trading - Maha e-Trade: For facilitating safe and easy online share trading for its customers, the Bank has entered into an arrangement with three vendors viz., M/s. Religare Securities Pvt. Ltd., M/s. Munoth Securities and M/s. Enam Securities.

Online Shopping/e-Commerce through Net Banking: Facilitating e-commerce transactions including online shopping, utility bill payments, airline ticketing etc through the Internet.

Electronic Cheque Deposit System: Facilitating deposit of cheques for collection and obtaining instant acknowledgement with cheque image has been rolled out at 15 centers on a pilot basis.

Application Supported by Blocked Amount (ASBA): Facility to apply for public offers, based on lien marking (without remitting the share application money) as per SEBI guidelines has been extended to retail investors.

Queue Management System for customers: An electronic queue management system for streamlining the customer service at frontline counters has been implemented for the customers at select branches in Pune, Nasik and Delhi.

Implementation of CBS in Regional Rural Bank (RRB): As per directives of the Government of India, the Bank has initiated steps to implement CBS in the Maharashtra Gramin Bank, a RRB sponsored by the Bank.

3.3.3 Data Centre & Disaster Recovery Site

The Bank has its own Data Center (CMM Level III) at Pune to take care of the CBS infrastructure requirements with Disaster Recovery (DR) site at Hyderabad. Disaster Recovery Drills were conducted twice during the year and the systems have been tuned up to ensure business continuity under various contingencies.

3.3.4 ATM Network

The Banks ATM Network of 345 ATMs is fully stabilized and VISA enabled. Card base has crossed 12.66 lakh. Average cash dispensed per day is Rs. 13.00 crore.

The Bank has also joined National Financial Switch (NFS) Network for broadening its ATM Network and enabling the customers to access more than 50,000 ATMs all over India.

Eleven ATMs are Bio-metric for the benefit of those customers, including pensioners, who do not find the regular ATMs convenient. The Bank is in the process of installing additional 75 ATMs during the Platinum Jubilee Year celebrations.

3.3.5 Corporate Network

The Bank has established its Corporate Network MAHANET with classical leased lines/ISDNs and VSATs. All branches, Regional Offices, Training Colleges/Centers and Central Office are now connected. The Bank has used VSATs (Pooled Bandwidth through VSAT connectivity) for networking 640 plus rural and semi-urban branches during the year.

Applications like CBS, ATM Network, RTGS, Demat, INTRANET, Credit Risk Rating, Online Tax Collection System (OLTAS), etc. are put to use through MAHANET.

IP Telephones are extensively used through MAHANET at all the Regional offices, CBS branches and Head office.

3.3.6 RTGS/NEFT

Straight-Through-Processing (STP) has been introduced for RTGS/NEFT system at all CBS branches facilitating inter bank funds transfer without manual intervention.

3.3.7 Internet/ Phone/ SMS Banking

The Bank has implemented the Net Banking suite-Internet Banking/Phone Banking and SMS Banking with online and offline request processing and e-payment of direct taxes. As on 31.03.2010, 52,060 users under Internet Banking, 13,842 under Phone Banking and 20,777 users under SMS Banking are utilizing the facility.

3.3.8 Information System Security Policy

The Bank has put in place its Information System Security Policy (ISSP) comprising of 32 different policy documents and the same are updated periodically to keep pace with developments. The Policy document has been circulated to all members of staff of the Bank for compliance. The policy has been implemented at 1,113 branches.

3.3.9 Videoconferencing

MPLS Connectivity for Video Conferencing has been installed and commissioned for better connectivity and quality conferencing. This facility is being used for review meetings with Regional Heads, Managers of strategically important branches and interface with officers and staff attending training.

3.3.10 Business Process Reengineering (BPR)

As part of BPR, the Bank had implemented centralized clearing system through 14 service branches already migrated into CBS and Centralized Pension Payment System for Central Government Pensions. Other BPR activities like Centralized Cheque Book Issuance, Personalized Cheque Printing, and Centralized Customer Statement Printing and Dispatch would be explored during the year 2010-11.

3.3.11 In-House Software Development

The Bank is having a well-trained pool of software developers continuously engaged in development of various systems as per the requirement of user departments, Regional Offices and Central Office

The major systems developed and implemented are Regional Office Software (ROSW), HRM Software (Payroll and other modules), Branch Inspection Software (BRAINS), Online Tax Collection System (OLTAS), Credit Risk Rating System, PF System, INTRANET, ATM card tracking etc.

3.4 Vigilance

Vigilance activity in the Bank is an integral part of the managerial function. Its objective is to enhance the level of managerial efficiency, effectiveness and to ensure a proper climate for an efficient administration, where officials can perform their duties without fear or favour.

Vigilance activity in the Bank recognizes the need for a judicious mix of commercial decision making process, transparency and accountability.

Preventive Vigilance is an important aspect of vigilance. The Bank has taken various measures for improving decision making, administration and operations.

- In accordance with CVC directives, Vigilance Committees have been formed at branches having staff of 20 and more, to review/monitor sensitive and fraud prone areas and report abnormalities observed therein, if any.

- Communication is sent to all the branches/regions periodically educating them about the modus operandi adopted in various frauds and advising precautions to be taken to guard against such incidents.

- Vigilance Awareness Week is observed in the Bank during which period meetings with staff and general public are held by branches/regions. Lectures/talks by eminent personalities, emphasizing the need to be vigilant in the present environment were arranged.

- Sessions on "Preventive Vigilance" are included in the training programmes conducted by the Staff College.

- Fraud Risk Management Policy on prevention, detection, classification and reporting of frauds including action to be taken, has been issued by the Bank for the guidance and use of the branches and field functionaries.

3.5 Customer Service

The Bank has over 13.2 million customers and full-fledged grievances redressal machinery is in place to respond promptly to customer grievances. Complaint Management Cells are operative in Central Office as well as in Regional Offices to ensure quick redressal of grievances. The Committee of the Board on Customer Service meets periodically to monitor the quality of customer service, redressal of customer grievances and provide customer satisfaction. The Bank level Standing Committee on Customer Service also meets regularly to review customer service related matters and to make improvements.

Regional Office Customer Service Committee and Branch Level Customer Service Committee are atso set up. A cross section of customers representing depositors, corporates/ businessmen, senior citizens is invited to the meetings to provide feedback and suggestions on schemes, products and services.

The Bank has implemented all major recommendations of Goiporia Committee and Dr. S. S. Tarapore Committee. The Bank has adopted policies/operational procedures for Depositing and Collection of Cheques/ Instruments, Compensation Policy in case of delay in collection of instruments or loss, policy for collection of dues and repossession of security, Operational Procedure for Settlement of Claims of Deceased Depositors. These policies/ procedures are displayed on the Banks website.

The Bank is also a member of the Banking Codes and Standards Board of India and has adopted the Revised Code of Banks Commitment to Customers-August 2009 and Banks Code of Commitment to MSEs for implementation.

The Bank has in place internet based mechanism for inviting suggestions/ feedback on services from customers and for providing acknowledgement and status of their feedback / complaint.

3.6 Information and Facilitation Centre

Mahabank Facilitation Centre has been operating from Mumbai since June 2005 and can be accessed through two Toll Free Numbers which are 1800-222340 and 1800-220888. Toll Free Telephone Numbers have been made available at 12 major cities. During the year, 21,982 calls were received on our toll free numbers relating to various products offered by the Bank, queries and feedback on the Banks services. During the year, 5,508 complaints were received and redressed through this center.

An Information Facilitation Centre has been set up since July 2001 for providing information on various schemes and products of the Bank and any other information/assistance that may be required by customers and public.

3.7 Risk Management

3.7.1 General

The Banking business is exposed to a wide array of risks as compared to yesteryears and these risks create a charge over the capital of the Bank if not managed properly.

The Bank has formulated a comprehensive Risk Management Policy to effectively identify measure, monitor and control various risks in view of their implications on the Banks business growth and financial soundness.

Organizational set up of the Bank for risk management comprises of the Risk Management Committee of the Board, Executive level committees for Credit Risk Management, Market Risk Management, Operational Risk Management and Asset Liability Management, to identify, measure and take steps to mitigate the risks and monitor them.

3.7.2 Risk Management Systems

3.7.2.1 Credit Risk

For better credit risk management, the Bank has put in place comprehensive Lending Policy, Loan Review Pol icy and Risk Management Policy.

The Bank has also set up Credit Approval Grids at various levels and at Treasury & International Banking Division (TIBD), Mumbai to provide preliminary clearance through a committee approach on credit and investment proposals, from the risk view point.

To evaluate the risk perception in a lending proposition, the Bank has put in place an in-house developed Credit Risk Rating Framework (CRRF) as desired under Basel II. The Bank has prescribed threshold ratings for entry level exposures.

The Bank has undertaken migration analysis of credit risk rating and estimated probability of default in line with Basel II requirements. Stress testing results are evaluated periodically.

3.7.2.2 Market Risk

Interest Rate Risk is managed through prescriptions of Asset Liability Management (ALM) Policy which is reviewed regularly. The Asset Liability Management Committee (ALCO) of the Bank reviews the risk on a regular basis.

For management of Liquidity Risk, review of structural liquidity and short term dynamic liquidity is undertaken on an on-going basis. The Bank has put in place a contingency plan for managing liquidity.

Investment Risk is managed through the prescriptions made in a comprehensive Investment Management Policy & Investment Risk Management Policy.

Foreign Exchange Risk is managed by the Bank by stipulating prudential limits for open foreign exchange position, the aggregate gap position, Daylight limit, Overnight limit, Net open overnight position, Stop loss limit, Limit for undertaking swaps/ investment/ borrowing overseas, inter bank exposure limits etc. These limits are monitored on daily basis.

The Bank is using Asset Liability Management system for studying and analyzing the interest rate sensitivity, maturity and liquidity analysis of assets and liabilities. Models like earnings at risk, duration and Value at Risk are used for interest rate risk management,

The Asset-Liability Management Committee (ALCO) monitors liquidity risk, interest rate risk and earnings risks at frequent intervals.

3.7.2.3 Operational Risk Management

The Bank has put in place Board approved policies for Business Continuity Planning and Operational Risk Management. Policy on outsourcing facilitates use of the expertise available in the market with adequate safeguards for risks associated with outsourcing.

3.7.2.4 Basel II

In line with the RBI guidelines, the Bank has migrated to capital adequacy under New Capital Adequacy Framework (Basel II) on 31.3.2009. The Bank has provided capital as per Standardized Approach for Credit Risk,

Standardized Duration Approach for Market Risk and Basic Indicator Approach for Operational Risk as per RBI guidelines. The Bank has entered into MoUs with all the four designated external credit rating agencies, for rating of corporate exposures, as required under Basel II and has also drawn a roadmap for migrating to the advanced approaches under Basel II.

The Bank has put in place policy on Internal Capital Adequacy Assessment Process (ICAAP) covering procedures for identification and measurement of appropriate level of internal capital in relation to risks, to meet the requirements of Pillar 2 of Basel II norms. The Bank has also put in place the policies on Utilization of Credit Risk Mitigation Techniques, Collateral Management and Disclosures, in line with Basel II Framework. The Bank has adhered to Disclosure norms as stipulated in the guidelines of RBI to meet Pillar 3 requirements.

Awareness of Basel II norms among staff is created and continuously enhanced through training. Knowledge and skill levels of staff at Central Office are periodically upgraded through participation in external trainings, workshops and seminars.

3.8 Inspection and Concurrent Audit

The Inspection and Audit system and various measures of internal control adopted by the Bank ensure identification/assessment and mitigation of operational risks.

3.8.1 Inspection of branches:

The Bank continued to adhere to the Jilani Committee recommendations and inspected 1,055 branches during the year, covering 72.60 per cent of the total branches of the Bank. Similarly, as per RBI guidelines under Risk Based Supervision, the Bank has undertaken Risk Based Internal Audit [RBIA] at all these 1,055 branches.

Conference of all inspecting officials and heads of inspection cells was organized during September 2009 to update them on policies, procedures, business environment, opportunities and challenges for banks, emerging areas of risks and their role in alerting the top management of existing and impending risks at branches and offices.

3.8.2 Surprise Inspection:

In pursuance of the Ghosh committee recommendations, surprise inspection was carried out at 146 branches focusing mainly on high risk areas at the branches.

3.8.3 Concurrent Audit

300 Branches were subjected to Concurrent Audit during the year. These branches covered 62.23 per cent of aggregate deposits and 77.30 per cent of total advances of the Bank. Four Central Office departments were also subjected to Concurrent Audit during the period.

3.8.4 Income & Expenses Audit

Income & Expenditure Audit for the period October 2008 to September 2009 was carried out at 670 branches to identify and recover income leakages, if any. Half yearly Expenditure Audit of all the Regional Offices was carried out during the year.

3.8.5 Management Audit:

Management Audit of all 32 Regional Offices and 15 departments at Central Office was carried out for assessing their effectiveness in terms of supervision and controls.

3.8.6 RBI inspection under Section 35 of the Banking Regulation Act

During the year 2009-10, RBI inspected 23 branches and 6 Regional Offices under Section 35 of RBI Act.

3.9 Marketing and Publicity

The Bank is utilizing the print and electronic media to create awareness among customers, prospective customers and citizens at large about the uniqueness of its services and to facilitate a distinct Brand of a reliable, responsive banking institution.

During the year, the Bank launched new IT enabled services like Mobile Banking and Maha-e-Trade etc. Besides the existing tie up with 15 mutual funds, for sale of mutual fund products, the Bank established similar arrangement with SBI Mutual Fund also.

A dedicated CASA campaign was conducted across India for mobilization of Current and Savings accounts.

Mrs. Pratibha Devi Singh Patil, Her Excellency the President of India launched the Banks Platinum Jubilee Celebrations on 26th November 2009 at Pune by unveiling the Platinum Jubilee Logo of the Bank and declaring adoption of 75 backward villages across the country. The Bank would endeavour to promote basic sanitation, health, education and conservation of energy and water resources, self employment, besides agricultural best practices and banking facility for all households in these adopted villages. The event received wide coverage in the print and electronic media, especially on the national television channel, Doordarshan.

The Bank has also organized cultural programmes by associating acclaimed artistes in major cities and towns for customers and citizens as part of the Platinum Jubilee Celebrations.

The fact of the Bank having networked all its branches through Core Banking Solution has been highlighted in the electronic and print media in addition to outdoor displays to market its anywhere, anytime banking capabilities.

3.10 CitizensCharter

The Bank has adopted the Citizens Charter since 2000-01, which details the duties and responsibilities of the Bank towards its customers and the mechanism for redressal of customers grievances. The Charter is displayed at all the branches and on the website of the Bank. The Bank has also adopted a Citizens Charter on exchange of notes and coins in line with the guidelines issued by the Reserve Bank of India.

4. SOCIAL BANKING

4.1 Priority Sector Lending

It has been the constant endeavour of the Bank to facilitate equitable and sustainable economic development by timely and hassle-free availability of credit for productive purposes to Small and Marginal Farmers, Micro & Small Enterprises, Retail Traders, Professional & Self Employed, Women Entrepreneurs and entrepreneurs from economically weaker sections.

The outstanding advances under Priority Sector as of March 2010 aggregated to Rs.14,232.26 crore, constituting 40.88 per cent of the Adjusted Net Bank Credit of previous year against the stipulated minimum target of 40 per cent

The rise in Priority Sector Advances was Rs. 1,996.26 crore over March 2009 in absolute terms.

4.2 Agriculture

The Bank disbursed Rs.3,833.61 crore for agriculture and allied activities during the year 2009-10. The outstanding advances to agriculture sector as of 31.03.2010 were Rs.6,249.98 crore i.e. 17.95 per cent of Adjusted Net Bank Credit.

The Bank undertook awareness/sensitization programmes for all the branches for increasing advances to agriculture. To streamline the agricultural lending and promote best practices among farmers, the Bank recruited 140 Agricultural Field Officers and 75 Agricultural Business Facilitators and has placed them at strategic branches.

4.2.1 The Bank successfully implemented Agriculture Debt Waiver and Debt Relief Scheme of the Government of India, by reaching out to 86,549 eligible small and marginal farmers for debt waiver involving Rs.219.19 crore. The number of farmers eligible for debt relief was 48,237.

4.2.2 Mahabank Kisan Credit Card (MKCC)

This scheme gained popularity especially in rural areas where it is being propagated successfully and vigorously. The Bank has issued 3,32,965 Kisan Credit Cards to farmers involving amount of Rs.1,806.51 crore.

4.3 Micro, Small and Medium Enterprises (MSME)

SMEs are recognized as a major growth engine for the Indian economy. They generate opportunities for direct and indirect employment by facilitating use of natural resources and local skills to stem the tide of migration to urban areas and promote low investment enterprises. Finance is made available to viable enterprises at an attractive and low rate of interest. On line enquiry portal is made available on the Banks website during the year.

A MSME care center has been set up at each of the 32 Regional Offices of the Bank to handle MSEs problems. The Bank has adopted Simplified Loan Application for MSEs as devised by IBA and the same is displayed on the Banks website. The Bank has also adopted Banks Code of Commitment to Micro and Small Enterprise and it is displayed on the Banks website.

The Banks lending to Micro, Small and Medium Enterprises which was at the level of Rs.3,073.92 crore as at 31.03.2009, increased to Rs.4,069.41 crore as at 31.03.2010, which translates into a y-o-y growth of 32.39 per cent. This includes fresh credit facilities to the tune of Rs.2,022.50 crore extended to MSMEs between April 2009 and March 2010 under the special package announced by the Government of India in September 2008.

The Bank was presented with the Y. B. Chavan Memorial Award by the Maharashtra Industrial and Economic Development Association, at the Maharashtra Economic Summit held at Mumbai on March 12, 2010.

4.3.1 Maha-Entrepreneur

Under the scheme, the Bank is providing for supporting SMEs in rural areas finance up to Rs.100.00 lakh to Micro and Small Enterprises without Collateral Security and/ or Third Party Guarantee.

Accounts under the scheme are covered under Credit Guarantee Fund Scheme for Micro, Small and Medium Enterprises of Government of India. The Bank is bearing the entire guarantee fee and 50 per cent of annual service fee, which is to be paid to the Trust under CGFMSE. The Bank sanctioned loans of Rs. 154.15 crore to 3,293 borrowers under this scheme upto March 2010. Coverage under Credit Guarantee Fund Scheme has been more than doubled in FY 2009-10.

5. IMPORTANT SCHEMES / PROJECTS OF THE BANK

5.1 Retail Financing

The Bank is providing retail loans to individuals who are salaried persons, professionals, businessmen and pensioners for purchase of consumer durables, two/four wheeler vehicles and also for other personal needs. During the year 2009-10 the Bank has opened three Retail Credit Hubs one each at Pune, Mumbai and Delhi. Besides this, the Bank also started six Retail Loan Cells at Nasik, Nagpur, Indore, Thane, Aurangabad and Bangalore. The retail lending portfolio grew by 12.11 per cent during the year.

5.2 Housing loan to public

The Bank has in place Housing Loan Scheme to meet the needs of all economic segments including NRIs. Financing housing in rural and urban parts of India is a thrust area. The Scheme is simple and customer-friendly.

The Bank is also implementing Golden Jubilee Rural Housing Scheme of the Government of India in rural areas having population not exceeding 50,000 (as per 1991 census). The Banks lending to housing sector has grown by 22.58 per cent during the year to reach the level of Rs.3,627.27 crore (outstanding) as at 31.03.2010.

5.3 Model Educational Loan scheme

With the objective of ensuring that no deserving student is denied an opportunity to pursue higher education for financial reasons, the Bank implements a Model Educational Loan Scheme. As of March 2010, the Bank had lent Rs. 430.02 crore to 22,463 students. The Bank has provided the facility of submission of application for education loan through web-access (on line).

5.4 Aadhar Scheme for Pensioners

The Bank has introduced a special scheme called Aadhar for catering to the personal credit needs of the pensioners. This scheme has evoked an encouraging response from the pensioners and has enabled them to meet their financial needs such as medical expenses, travel plans etc. Outstanding advances under the Scheme stood at Rs.96.69 crore as on 31.3.2010.

5.5 Finance for Non-conventional Sources of Energy

The Bank has been implementing the scheme for financing non-conventional sources of energy in tune with the Governments policy by providing interest rate subsidy in respect of loans given for purchase of Solar Water Heaters since September 1998. During the year, the Bank has sanctioned 1416 cases with loans amounting to Rs.5.74 crore under the scheme.

5.6 Micro Finance

The Bank has always recognized the importance of credit to rural and urban poor for taking economic activity. The SHGs have proved to be effective instruments for empowerment of women. The Bank has actively financed non-traditional activities of various Self Help Groups (SHGs).

As on 31.03.2010, there were 75,015 SHGs formed by the Bank, out of which 73,208 SHGs had availed aggregate financial assistance of Rs.149.10 crore from the Bank. Repayment of these loans has been satisfactory and the Bank continues to encourage lending to SHGs.

5.7 Swarna Jayanti Shahari Rozgar Yojana (SJSRY) (Golden Jubilee Urban Employment Scheme)

The Bank has been implementing the scheme since 1997 and during the year, the Bank sanctioned loans to 1,704 beneficiaries under the scheme.

5.8 Assistance to SC/ST Category

The Bank has been actively extending finance to SC/ST beneficiaries through various schemes. Total finance as of March 2010 to SC/ST beneficiaries stood at Rs.687.77 crore, covering 80,957 beneficiaries.

5.9 Advances to Minority Community

A special cell has been set up at Central Office to review and ensure smooth flow of Credit to minority community. As of March 2010, the outstanding advances to minority communities were at Rs.770.93 crore to 60,306 beneficiaries.

5.10 Women Empowerment

Ever since the year 2001 (the Year of Women), the Bank is implementing the 13-point action plan in letter and spirit. The total credit extended to women beneficiaries amounted to Rs. 1,796.88 crore covering 1,73,537 women borrowers as on 31.03.2010.

6. CORPORATE SOCIAL RESPONSIBILITY

- On the eve of the Banks Platinum Jubilee celebrations during the year 2009-10 the Bank has selected 75 villages under "Mahabank Platinum Gramin Unnati Prakalp" (Mahabank Platinum Village Development Programme) for their overall socio-economic development, with emphasis on cleanliness, health, education, drinking water, housing,

financial inclusion, rain water harvesting and water shed development programmes. These villages are located in the states of Maharashtra, Karnataka, Andhra Pradesh, Madhya Pradesh, Goa, Chhattisgarh and Gujarat.

- The Rural Development Centres at Hadapsar and Bhigwan in Pune District of Maharashtra have been undertaking various developmental activities for the benefit of farmers viz. Lab to Land Project, Re-development of Saline Soils, Soil Testing and offering advice on the use of fertilizers.

- A Trust viz. Mahabank Agricultural Research and Rural Development Foundation (MARDEF) undertakes various projects and village improvement programmes. MARDEF is imparting training to farmers on various subjects in agriculture, e.g. dairy, emu farming, goat rearing, best practices in grape farming, application of fertilizers, agriculture credit schemes, etc.

- Financial Inclusion: As a part of corporate social responsibility, Financial Inclusion has been rolled out at Nandurbar, Malhar Peth (Satara) and Parvati (Pune) in Maharashtra.

- Mahabank Agri Bulletin is published every quarter with focus on new trends in agriculture. An interactive access to farmers/villagers is provided at doorstep in Pune and Satara districts through "Krishi Mitra", a mobile van carrying Touch Screen Facility and the officials accompanying the vehicle provide information to farmers on various schemes of the Bank.

- The Bank has established Mahabank Self Employment Training Institute (MSETI) for providing training to rural youth and women to enable them to acquire skills for self-employment through small business enterprises. The Institute has centres at Pune, Nagpur, Aurangabad, Amravati and Nasik. The Institute has so far imparted training to 5,742 youths and has achieved settlement rate of 71 per cent.

- Gramin Mahila Va Balak Vikas Mandal (GMVBVM), an NGO formed by Bank of Maharashtra and National Institute of Bank Management is actively involved in formation, nurturing, training and ensuring linkage of SHGs to Bank Credit. The GMVBVM also helps SHGs in marketing products of SHGs through outlets established in Pune City under the name "SAVITRI". The GMVBVM guides and actively helps SHGs for selection and purchase of raw materials and quality production.

- The Bank started a novel project for counseling farmers in six districts of Vidarbha area in Maharashtra State on different subjects, like agriculture, animal husbandry etc. under the "Mahabank Vidarbha Shetkari Jagruti Abhiyan".

7. Lead Bank Scheme

7.1 The Bank has Lead Bank responsibility in six districts of Maharashtra State viz. Aurangabad, Jalna, Nasik, Pune, Satara and Thane. Every year credit plans for the districts are prepared and implemented with the cooperation of other banks. Performance during the year in respect of our lead districts was 116 per cent of the targets.

7.2 State Level Bankers Committee

The Bank is the Convenor of State Level Bankers Committee (SLBC) for the State of Maharashtra and the Bank monitored implementation of State Annual Credit Plans and Government sponsored schemes in the state.

In order to speed up the work of identification of villages for providing banking services in every village having population of over 2000, a meeting of Lead District Managers was convened by SLBC on 24.02.2010 at Pune. Accordingly, 4,348 un-banked villages having population over 2000 were identified in 33 districts of Maharashtra and were allocated among banks to extend banking facilities and achieve Financial Inclusion.

As per the recommendations of High level Committee for review of Lead Bank Scheme, SLBC has formed 11 Sub-Committees on various subjects for effective implementation of Lead Bank Scheme.

During the year, three SLBC and two Steering Committee meetings were held.

7.3 Road Map on Financial Inclusion

The RBI in collaboration with Government of India has introduced the concept of Financial Inclusion which envisages delivery of banking services at an affordable cost to the vast sections of disadvantaged and low income groups so as to ensure inclusive growth.

The Bank has drawn up a road map to provide banking services through a banking outlet in every village having a population of over 2000, and such banking services may be provided through the various forms of ICT-based channels.

The Bank has identified 1,215 villages in 7 states and proposes to provide Banking services using ICT through existing 484 branches, new branches and/or Business Correspondents by 2012.

8. SUBSIDIARIES/JOINT VENTURES AND SPONSORED INSTITUTIONS

8.1 The Maharashtra Executor & Trustee Company Pvt. Ltd. (METCO)

The Company was established in 1946 as a wholly owned subsidiary of the Bank to provide services auxiliary to banking, such as:

- Drafting & Execution of will

- Management of private trusts

- Management of public charitable trusts

- Management of investments & house properties as attorney

- Guardianship of minors property

- Consultation for sale/purchase of property

- Filing of Income-Tax Returns for individuals

During the year 2009-10, 20 new Trusts were added to its client base, bringing the total number of Public and Private Trusts to 1,051 under its management. New wills added during the year were 59 bringing the total number of Wills in custody and execution to 979.

The Company is presently managing 116 properties under Power of Attorney. The Company also acts as Trustee in respect of 137 policies under Married Womens Property Act and as Court appointed Guardian for minors property in 10 cases.

8.2 Regional Rural Banks

Bank of Maharashtra had originally sponsored three RRBs viz., Marathwada Gramin Bank, Aurangabad-Jalna Gramin Bank and Thane Gramin Bank. As per the policy of the Government of India, process of amalgamation of RRBs was initiated and accordingly, during the year 2007-08, amalgamation of two erstwhile RRBs named Aurangabad - Jalna Gramin Bank and Thane Gramin Bank took place and Maharashtra Godavari Gramin Bank (MGGB) came in to existence w.e.f. March 25, 2008.

In the second phase during 2009-10, the erstwhile Marathwada Gramin Bank (MGB) and Maharashtra Godavari Gramin Bank (MGGB) were merged and a new entity named "Maharashtra Gramin Bank" came into existence on July 20, 2009 with Head Quarters at Nanded (Maharashtra).

In view of the above, Bank of Maharashtra has now only one RRB, covering 16 of the 33 districts in Maharashtra with 323 branches. The Sponsor bank has initiated necessary steps to bring all the branches under CBS by September 2011.

9. PROGRESSIVE USE OF OFFICIAL LANGUAGE

The Bank received 2nd Indira Gandhi Rajbhasha Shield at the hands of Her Excellency the President of India on 14.09.2009 at New Delhi for better use of Hindi.

The Bank is the Convenor Bank for Town Official Language Implementation Committee (TOLIC) in Pune, Mumbai and Solapur. Meetings of these committees were hetd regularly during the year.

The TOLIC at Mumbai and Pune have secured first and third prizes respectively from the Rajbhasha Vibhag, Ministry of Home Affairs, Govt, of India on 27th March, 2010.

The Banks House Magazine secured Second Prize under the Reserve Bank of India Bilingual House Magazine competition for the year 2008-09.

The Bank also received First Prize under Reserve Bank of India Rajbhasha Shield Scheme for both "A" and "B" regions (predominantly Hindi speaking) and Fourth Prize for C region for the year 2007-08 at a function held at Mumbai on 03.06.2009 for excellent use of Hindi.

10. DIRECTORS RESPONSIBILITY STATEMENT

The Directors confirm that in the preparation of the annual accounts for the year ended 31.03.2010:

- The applicable accounting standards of the Institute of Chartered Accountants of India, have been followed along with proper explanation relating to material departures, if any;

- The accounting policies framed in accordance with the guidelines of the Reserve Bank of India, are consistently applied and proper disclosures are made for changes, if any;

- Reasonable and prudent judgment and estimates were made so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and the profit of the Bank for the year;

- Proper and sufficient care was taken for maintenance of adequate accounting records in accordance with the provisions of applicable laws governing banks, in India; and

- The accounts have been prepared on a going concern basis.

11. CHANGES IN THE BOARD OF DIRECTORS

During the year 2009-10, the following changes took place in the Board of Directors:

Shri. R.K. Deshpande ceased to be the Director w.e.f 3rd July, 2009 on completion of tenure.

Shri. D.R. Tuljapurkar ceased to be the Director w.e.f. 24th September, 2009 on completion of tenure.

The Board of Directors place on record their sincere appreciation for the valuable contribution made by the outgoing Directors.

12. ACKNOWLEDGEMENTS

The Board of Directors wish to express sincere thanks to the Government of India, the Reserve Bank of India, the Securities and Exchange Board of India, Insurance Regulatory and Development Authority, Indian Banks Association and Stock Exchanges for their valuable guidance and support; to the customers and shareholders for their patronage; to the correspondents and associates for their co-operation and to all the members of staff of "Mahabank" for their unstinted commitment and contribution to the growth and development of the Bank.

For and on behalf of the Board of Directors,

Pune (Allen C. A. Pareira)

30th April, 2010 Chairman and Managing Director