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Directors Report of IDBI Bank Ltd.

Mar 31, 2015

Dear Members,

The Bank''s Board of Directors is pleased to present the Report on the business and operations for the financial year ended March 31,2015.

In 2014-15, the Bank strived to improve its performance on all fronts despite confronting significant challenges emanating from the macroeconomic environment as well as various other sector-specific factors. The Bank surmounted these challenges through strategic initiatives which were complemented by organisational restructuring and mission-mode approach to catalyse growth in its business. Furthermore, the Bank continued to expand its reach across the country by rapidly adding to its branch and ATM network. With the objective of ensuring highest level of customer satisfaction, the Bank focused on optimizing its customer service to provide hassle-free experience to all its customers. The Bank was also able to expand its customer base by expanding its network which allowed easier accessibility as also offering an array of customized products and services with innovative features to meet the customers'' needs in a suitable manner. As on March 31, 2015, aggregate deposits and advances touched Rs. 2,59,836 crore and Rs. 2,08,377 crore, reflecting a growth of 10% and 5%, respectively, over the previous year. Your Bank''s performance highlights for the period under review are presented in Table 1.

Profit and Appropriations

During 2014-15, your Bank''s gross income amounted to Rs. 32,162 crore, comprising interest income at Rs. 28,154 crore and other income at Rs. 4,008 crore. Interest expenses stood at Rs. 22,406 crore and operational expenses at Rs. 4,027 crore, accounting for total expenditure (excluding provisions and contingencies). Total provisions during the year were at Rs. 4,855 crore, which mainly include Rs. 3,480 crore towards provision for bad and doubtful debts and investments. During 2014-15, your Bank''s operations resulted in Profit Before Tax (PBT) of Rs. 1,287 crore. After provision of Rs. 414 crore towards tax, Profit After Tax (PAT) amounted to Rs. 873 crore. The appropriation of PAT, as approved by the Board of Directors, is given in Table 2.

Table 1 : Financial Highlights

(Rs. In crore)

As on March 31 2014 2015

Capital 1,603.94 1,603.96

Reserves & Surplus 22,034.92 22,712.96

Deposits 2,35,773.63 2,59,835.97

Borrowings 60,146.29 61,832.98

Other Liabilities & Provisions 9,429.57 10,044.69

Total Liabilities 3,28,988.36 3,56,030.56

Cash & Balances with RBI 12,711.11 13,035.77

Balances with Banks & Money at Call & Short Notice 4,106.80 1,489.99

Investments 1,03,773.50 1,20,963.21

Advances 1,97,686.01 2,08,376.87

Fixed & Other Assets 10,710.94 12,164.73

Total Assets 3,28,988.36 3,56,030.56

For the period 2013-14 2014-15

Total Income 29,576.27 32,161.62

Total Expenses (other than provisions) 23,894.88 26,433.52

Provisions (other than tax) 3,940.26 4,440.78

Profit Before Tax 1,741.13 1,287.33

Provision for Tax* 619.73 413.94

Profit After Tax 1,121.40 873.39

* Net of Current Income Tax and Deferred Income Tax

Table 2 : Appropriation of Profits

(Rs. In crore)

For the year ended March 31 2014 2015

Net Profit/(Loss) for the year 1,121.40 873.39

Profit/(Loss) brought forward 903.86 896.77

Profit available for Appropriations 2,025.26 1770.16

Appropriations

Transferred to Statutory Reserve 281.00 218.35

Transferred to Capital Reserve 9.32 229.07

Transferred to General Reserve 400.00 65.00

Transferred to Special Reserve created and maintained u/s 36(1)(viii) of 250.00 200.00 IT Act, 1961

Dividend

- Equity Shares 160.41 120.30

- Tax on Dividend 27.76 25.25

Balance of Profit carried to Balance Sheet 896.77 912.19

For each share with face value of Rs. 10, Earnings Per Share (EPS) during the year stood at Rs. 5.45, while Book Value per Share stood at Rs. 141.24 as on end-March 2015. The Directors have the pleasure in recommending dividend at 75% on the fully paid-up equity share capital for 2014-15.

Report on the Performance and Financial Position of Subsidiaries and Joint Venture included in the Consolidated Financial Statement

As required by Accounting Standard-21 issued by the Institute of Chartered Accountants of India, the Bank''s consolidated financial statements included in this Annual Report incorporate the accounts of its subsidiaries and other consolidating entities.

The Bank holds more than 20%, but less than 50%, of equity capital of five companies. In the opinion of management, the Bank does not have any significant influence in these companies. Accordingly, these companies have not been considered as "associate companies" and the financial statements of these companies are not included in the consolidated financial statements. Financial Statements of the Joint Venture (IDBI Federal Life Insurance Company Ltd.) as incorporated in these accounts are unaudited and subject to Audit Committee/Board approval.

A statement pursuant to Section 129 of Companies Act, 2013 showing key financials of the Bank''s subsidiaries/Joint Venture is included separately in this Annual Report.

Material changes and commitments, if any affecting financial position of IDBI Bank which have ocurred during the end of financial year and the date of Board Report.

There are no material changes and commitments, affecting the financial position of the Bank which has occurred between the end of the financial year of the Bank i.e. March 31,2015 and the date of the Directors'' Report i.e May 26, 2015.

The details in respect of adequacy of internal financial controls with reference to the financial statements.

The Bank has adequate internal controls and processes in place with respect to its financial statements which provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements. These controls and processes are driven through various policies, procedures and certifications. The processes and controls are reviewed periodically.

Capital Adequacy

Your Bank computes regulatory capital requirement for Credit, Market & Operational Risks as prescribed under the Pillar-1 guidelines of the Basel III framework. With regard to the requirement for higher quality capital highlighted under Basel III norms, your Bank, at present, has sufficient common equity to meet the regulatory requirements as stipulated in the guidelines.

As on March 31, 2015, the Capital to Risk-weighted Assets Ratio (CRAR) of your Bank was 11.76% which is above the minimum regulatory requirement of 9.0%. Your Bank''s Common Equity Tier 1 (CET 1) ratio was 729% which is also above the minimum applicable CET 1 ratio of 5.5% stipulated by RBI. The Tier-I ratio stood at 8.18% as on March 31, 2015 against the regulatory requirement of 70%.

Your Bank has a Board approved policy on Internal Capital Adequacy Assessment Process (ICAAP), in line with the Pillar-2 norms of the Basel III framework, which enables the Bank to internally assess and quantify those risks that are not covered under Pillar-1 in addition to developing appropriate strategies to manage risks under normal and stress conditions. Your Bank has adopted a Disclosure Policy in accordance with the Pillar-3 requirements under the Basel norms and consequently, publishes disclosures on the Bank''s website at end of each quarter.

Business Strategy

During the year, your Bank continued to focus on rebalancing its business mix, through increasing accent on retail business and priority sector lending, with the intent of meeting regulatory requirements as well as de- risking its business portfolio. As a critical enabler, the Bank recalibrated its organization structure by adopting a decentralized approach by dividing the offices across the country into zones. Simultaneously, the zonal offices were vested with greater powers to facilitate better decision- making to drive the Bank''s business growth. A mission- mode approach has been adopted for strengthening the Bank''s position in retail banking as well as priority sector business while continuing to maintain predominance in industry and infrastructure financing. The Bank offers an entire gamut of products and services to cater to the financial needs of all segments of the society under one roof. These products and services are periodically reviewed and modified as well as innovative and customized features are introduced in tandem with the constantly evolving demand of your Bank''s customers to ensure high level of customer satisfaction and consequently, drive growth in its business.

Key Business Initiatives

As July 1, 2014 marked the completion of fifty epoch- making years of the Bank''s existence, various activities were planned as a part of the Golden Jubilee celebrations, commencing from the date. The opportunity was used to establish active engagement with various stakeholders of the Bank. The stakeholder engagement included activities aimed at customers (both Retail and Corporate), employees, society at large and opinion makers. The accent of all the activities was to reinforce the IDBI Bank brand identity, reiterate that we are a true friend of all our stakeholders which finally led to top-of-the-mind recall for the brand. The celebrations were kicked-off at a flagship event at Head Office on July 1, 2014. As a part of the celebrations, the Bank launched its Signature Debit Card, e-inaugurated 50 branches, inaugurated Zonal Intranet Section and launched its mobile banking services, among other such initiatives. Simultaneous events were held at all nine zonal headquarters of the Bank (viz. Mumbai, Delhi, Kolkata, Chennai, Ahmedabad, Bhuwaneshwar, Bengaluru, Chandigarh and Nagpur). To mark the occasion, a special logo was designed and was displayed prominently in the Bank''s ATMs, calendar, stationery and other such collaterals. The entire set of activities was planned with the theme "celebration of 50 years of friendship" with the customer and was used as an extension of the brand positioning as ''Bank Aisa Dost Jaisa'' as well as synchronizing its advertising campaigns, including creation of IDBI Anthem, with the Golden Jubilee theme.

Your Bank continues to target a progressively larger retail business portfolio to facilitate a more balanced business mix, in keeping with its intended positioning as a full- service commercial bank. Towards this end, the Bank continued to rapidly expand its branch and ATM network to establish wide presence across the country. As on March 31, 2015, your Bank''s network stood at 1717 branches (includes one overseas branch) marking an addition of 329 branches during the year.

Pursuant to the objective of expanding the share of retail business in the overall business mix, your Bank currently offers a bouquet of Liability, Asset, Capital Market and Third Party products which are primarily aimed at meeting the customized needs of customers in the Retail Banking segment. The Bank''s important products and services for the retail segment have been listed in the Corporate Overview Section of this Report.

Your Bank undertook organizational restructuring by merging its Priority Sector Group with its Retail Banking Group to provide for a more focussed approach to Priority Sector Lending (PSL) across all its branches by leveraging its growing branch network for augmenting priority sector business. The Bank has established 29 dedicated Credit Processing Centers (CPCs) that are staffed with specially trained personnel to expedite credit process.

The Bank has continued to update and strengthen its numerous alternate channels of delivery. Expanding the bouquet of its products, your Bank launched Credit Card on Visa Platform in two variants, viz. Royale (Visa Signature Card) for elite HNI customers and Aspire (Visa Platinum Card) for other existing customers. Additionally, the Bank has launched its e-lounge facility, which is an automated banking service designed for delivering a wide range of banking services on 24x7 basis, beginning with Mumbai and has expanded its reach in a number of major centres across the country.

Your Bank''s Corporate Banking Group (CBG) has been structured as CBG-I with mandate of looking after large- sized accounts and CBG-II with mandate of looking after medium-sized accounts. CBG has presence across the country. Your Bank''s CBG accords critical importance to multi-product sales, both in assets and liabilities, in order to offer a comprehensive portfolio of financial products and services and maximise yield.

Actively providing project appraisal, debt syndication, structuring and advisory services across various sectors, your Bank, during the year, procured several mandates for appraisal and syndication of debt. Your Bank has been consistently ranked as one of the leading debt syndicators in India.

Your Bank conducts its Trade Finance (TF) business through its full-fledged TF Centres (Authorized Dealer in Foreign Exchange) with presence across the country. Furthermore, more than 60 Retail Banking branches have been enabled for undertaking Inland TF Business (LCs/ BGs) so as to reach majority of domestic TF customers.

Your Bank has continued to pursue various legal/ non- legal recovery efforts rigorously to improve asset quality and consequently, improve its bottom-line.

Proactively engaging itself in Corporate Social Responsibility (CSR) activities, the Bank has put in place a Board-approved CSR Policy which provides the platform for undertaking interventions in areas such as education, health, gender equality and socio-economic empowerment, environmental sustainability, rural development projects, etc.. In order to make an even greater impact on targeted strata of society, your Bank, during the year, has not only been associated with deserving organizations but also has been proactively involved with Government of India''s Swachh Bharat Swachh Vidyalaya Abhiyan (SBSVA).

In cognizance of the imperative to ensure inclusive growth, your Bank, in addition to various initiatives undertaken under Financial Inclusion, actively participated in the Pradhan Mantri Jan Dhan Yojana (PMJDY) which was launched as a National Mission on Financial Inclusion by the Hon''ble Prime Minister on August 15, 2014. Under the programme, your Bank opened 9.29 lakh accounts with facility of RuPay Debit cards and has been extending overdraft facility of up to Rs. 5,000/- to the eligible account holders. Additionally, your Bank has also contributed to IBA Corpus Fund for PMJDY which was created to fund the PMJDY campaign.

Your Bank''s advertising and publicity initiatives intensified during the year with focus on enhancing visibility and top- of-mind recall of the Bank by augmenting its profile in the media and financial community and thereby, reinforce stakeholder perceptions. Your Bank found numerous mentions in Print, Electronic and Digital media with an overall positive impression. The Bank''s advertisements, which essentially depict its supportive role through the visual images of everlasting friendship between kids while duly incorporating overall theme of Golden Jubilee, were released as a national television campaign and in print, Out of Home (OOH) and digital space. Various other product-specific campaigns, which focused on different products and services offerings of the Bank, were also launched to create awareness amongst the customers - existing as well as prospective.

Your Bank recognises that in the banking sector, a strong Brand Equity is extremely important for deepening and widening customer relationships as also acquisition of new customers. Accordingly, your Bank has invested on building a strong Brand Identity, reinforcing the same through multiple initiatives. As a result, the Bank witnessed a rise in its Brand Equity as reflected in brand valuation and rankings which can be accredited to appropriate strategies, consistently supported by brand development activities through advertisements, internal communications and public relations. These strengths have been recognized by leading global professional bodies and got reflected in the high growth of Brand Value and ranking. Leading global research organisations like Millward Brown (Brand Z) and Interbrand have come out with their listing of top 50 brands in India across sectors. As per Brand Z, IDBI Bank ranks 39th among the top 50 brands in the country across sectors. As per recent Interbrand rankings, IDBI Bank ranks 37th among the top 50 brands in the country across sectors. The Brand Finance Banking 500, published by Brand Finance, a leading global brand consultant, evaluates and compares the value of the world''s leading banking brands annually. As per the 2015 study, the valuation of IDBI Bank Brand has increased by 79% as at December 31, 2014 over the previous year. Globally, the ranking of IDBI Bank has improved from 351 to 255 while in India the ranking has improved from 11th to 9th position. As per ''Brand Trust Report 2015, IDBI Bank''s Brand Trust ranking has shown a considerable improvement over the past years. The Bank was ranked 159th in 2013, 85th in 2014 and 64th in 2015 as per the latest report released recently. In the BFSI category, the Bank was ranked at the 5th position while among the PSU Banks, it was ranked at the 2nd position.

Gyan Sangam-A Step towards New Banking Paradigm

Ministry of Finance, Government of India, had organised the Bankers'' Retreat - Gyan Sangam for Public Sector Banks (PSBs) on January 2-3, 2015 at Pune to take forward the Government''s commitment to reforms in the financial sector. Six working groups were formed therein for deliberating and making recommendations on following issues relating to banking sector viz. (i) Leveraging Technology and Digital to improve banking operations efficiency, (ii) Rethinking Priority Sector Lending, (iii) Achieving Universal Financial Inclusion, (iv) Improving Risk Management, Asset Quality and Recovery, (v) Building a robust people strategy for PSBs and (vi) Consolidation and Restructuring of PSBs for better efficiency, governance and capital efficiency. The Working Groups made various recommendations which were summarized into two categories with separate actionable for the PSBs and policymakers, under two different time frames 0-12 months and one-three years. Your Bank is drawing up a detailed action plan to systematically take forward actionable on the part of the Bank.

The details of your Bank''s key initiatives during 2014- 15 are featured under the Management Discussion and Analysis section of this Annual Report.

Board of Directors

Your Bank''s Board of Directors is broad-based and its constitution is governed by the provisions of the Banking Regulation Act, 1949, the Companies Act, 2013, the Articles of Association of your Bank and the requirements of Corporate Governance, as envisaged in clause 49 of the Listing Agreement. The Board functions directly as well as through various Board Committees constituted to provide focused governance in the important functional areas of your Bank.

As on March 31, 2015, the Board comprised of eight Directors, including Chairman and Managing Director (CMD), two Deputy Managing Directors (DMDs), one Non-Executive Director and four Independent Directors. Shri M.S. Raghavan, Chairman & Managing Director as Executive Director, Shri B.K. Batra and Shri M.O. Rego, Dy. Managing Directors as Executive Directors, Ms. Snehlata Shrivastava, Central Government official Nominee as

Non-Executive Director, Shri P.S. Shenoy, Shri S. Ravi, Shri Ninad Karpe and Shri Pankaj Vats as Independent Directors constituted the Board as on March 31,2015.

As per Government of India''s directives, it is proposed to separate the post of CMD into two posts of a Chairman and a Managing Director & CEO by amendment of Article 116(1)(a) at the ensuing AGM.

Apex Committees

The Board has a total of sixteen committees, namely Audit Committee of the Board, Customer Service Committee, Business Review Committee, Information Technology Committee, Executive Committee, Remuneration Committee, Stakeholders'' Relationship Committee, Nomination Committee, Fraud Monitoring Committee, HR Steering Committee, Risk Management Committee, Recovery Review Committee, Corporate Social Responsibility Committee, Independent Directors'' Committee, Non-Cooperative Borrowers'' Review Committee, Wilful Defaulters Review Committee, to oversee various functional aspects of your Bank''s business and operations.

Corporate Governance

Your Bank is committed to adopting the best corporate governance practices. It believes that proper corporate governance is not just a requirement for regulatory compliance, but also a facilitator for enhancement of stakeholders'' value. The details of your Bank''s corporate governance practices are given in this Annual Report as a separate section under Corporate Governance Report.

Statement under Section 134 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

There were no personnel in your Bank''s services, during the financial year under review, who received remuneration over Rs. 60 lakh annually. Besides, there were no personnel in the service of the Bank for a part of the year who received remuneration in excess of Rs. 5 lakh per month. Further there was no personnel employed throughout the financial year or part thereof who was in receipt of remuneration at a rate, which in the aggregate, was in excess of that drawn by CMD or DMDs of the Bank and who held by himself or along with his spouse and dependent children, not less than two per cent of the equity shares of the Bank.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

The provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are not applicable to your Bank. However, your Bank has been increasingly using information technology in its operations.

Directors'' Responsibility Statement

The Board of Directors, hereby, declares and confirms that:

a. In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b. 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 this Act 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 laid down internal financial controls to be followed by the Bank 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.

Acknowledgements

Your Bank''s Board of Directors is sincerely grateful to the Government of India, Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority of India (IRDA) and all other Statutory/ Regulatory Authorities for their valuable co-operation and guidance. The Board also acknowledges, with gratitude, the co-operation and support received from various State Governments and other banking/ financial institutions. The Board thanks various multilateral institutions and international banks/ institutions for their periodic support. The Board takes this opportunity to put on record its deep sense of gratitude to its loyal shareholders and customers for extending their support during the year, and looks forward to their continued association in the years ahead. During the financial year, the Bank has received various recognitions and accolades for its excellence in the banking domain. The Board is thankful to all such organisations/agencies for formally recognising the Bank''s efforts. The Board appreciates the sincere and devoted services displayed by its entire staff and highly values their commitment in improving your Bank''s performance.

Place: Mumbai [M.S. Raghavan]

Date : May 26, 2015 Chairman and Managing Director


Mar 31, 2014

Dear Members,

During 2013-14, your Bank''s gross income amounted to Rs. 29,576 crore, comprising interest income at Rs. 26,597 crore and other income at Rs. 2,979 crore. Interest expenses of Rs. 20,576 crore and operational expenses of Rs. 3,319 crore accounted for total expenditure, excluding provisions and contingencies, of Rs. 23,895 crore. Total provisions during the year were at Rs. 4,560 crore, which mainly include Rs. 1,862 crore towards provision for bad and doubtful debts and investments, Rs. 1,393 crore towards bad debts written off, Rs. 486 crore towards restructured assets, Rs. 173 crore towards incremental prudential provisions for standard assets and Rs. 620 crore towards tax. During 2013-14, your Bank''s operations resulted in Profit Before Tax (PBT) of Rs. 1,741 crore. After a provision of Rs. 620 crore towards tax, Profit after Tax (PAT) amounted to Rs. 1,121 crore. The appropriation of PAT, as approved by the Board of Directors, is given in Table 2.

(Rs. crore)

For the year ended March 31, 2013 2014

Net Profit/(Loss) for the year 1,882.08 1,121.40

Profit/(Loss) brought forward 672.65 903.86

Profit available for Appropriations 2,554.73 2,025.26

Appropriations

Transferred to Statutory Reserve 470.83 281.00

Transferred to Capital Reserve 191.82 9.32

Transferred to General Reserve 150.00 400.00

Transferred to Special Reserve created and maintained u/s 36(1)(viii) of IT Act, 1961 300.00 250.00

Dividend

- Equity Shares 466.47 160.41

- Tax on Dividend 71.75 27.76

Balance of Profit carried to Balance Sheet 903.86 896.77

For each share with face value of Rs. 10, Earnings per Share (EPS) during the year stood at Rs. 8.00, while Book Value per Share stood at Rs. 136.52 as on end-March 2014. The Directors are pleased to recommend dividend at 2.75% on the fully paidup equity share capital for 2013-14, which along with Interim dividend at 7.25% paid during the year, aggregates to 10%.

CAPITAL ADEQUACY

Your Bank computes regulatory capital requirement for credit, market and operational risks in compliance with the Pillar-I guidelines under Basel norms. Your Bank has migrated to the Basel III framework and has been calculating capital ratios on a quarterly basis as per Basel III norms since April 1, 2013. Your Bank also computes capital ratios following the Basel II norms as stipulated by RBI since March 31, 2009. With regard to the requirement for higher quality capital highlighted under Basel III norms, your Bank, at present, has sufficient common equity to meet the regulatory requirements as stipulated in the guidelines.

Currently, your Bank follows the Standardised Approach for credit risk, Standardised Measurement Method (SMM) for market risk and the Basic Indicator Approach (BIA) for operational risk. Your Bank is upgrading its systems and processes in order to migrate to advanced approaches under Basel II. To comply with the Basel Pillar II norms, your Bank has a Board-approved policy on the Internal Capital Adequacy Assessment Process (ICAAP). In compliance with the Pillar III requirements under Basel norms, your Bank has implemented a Disclosure Policy. The disclosures for every quarter are available on your Bank''s website.

As on March 31, 2014, your Bank''s Capital to Risk-weighted Assets Ratio (CRAR) works out to 11.7%, which is above the minimum regulatory requirement under Basel III of 9.0%. Similarly, your Bank has a CET1 ratio of 7.8%, which is above the minimum applicable CET1 ratio of 5.0% as stipulated by the RBI. The Tier-I ratio also stands at 7.8% as on March 31, 2014 against the regulatory requirement of 6.5%.''

BUSINESS STRATEGY

During 2013-14, your Bank has undertaken various initiatives to register growth in the retail business segment with special emphasis on higher mobilisation of Current Account and Savings Account (CASA) deposits. Your Bank followed a strategy of deepening and widening the corporate banking and investment banking relationships. Simultaneously, special emphasis was laid on acquisition and expansion of its Priority Sector Business, which includes lending to weaker sections, MSE and Agri business, to broaden its asset portfolio.

KEY BUSINESS INITIATIVES

Business initiatives in the retail banking space during the year were driven by significant expansion in branch network and matching skilled manpower. Your Bank added 309 new branches during the current financial year, taking the total number of branches to 1388 as on March 31, 2014. Your Bank, as part of customer convenience, also demonstrably strengthened its alternate delivery channels by expanding its ATM network from 1,702 as on March 31, 2013 to 2301 as on March 31, 2014.

Your Bank has emerged as one of the dominant, competitive and sought-after players in the structured retail finance segment, offering an array of innovative products catering to the financial needs of all customer segments in this domain. To ensure wider customer coverage and tap the growing opportunities emerging from the expanding delivery network, your Bank, apart from expanding its bouquet of retail asset offerings, introduced a simplified and customer friendly process for structured retail asset products. This is expected to augment your Bank''s market share. Your Bank has also leveraged its state-of-the-art technology platform to implement several key initiatives, which are detailed in the Management Discussion and Analysis section of the Report.

Your Bank continued to aggressively pursue a ramp up in its Priority Sector Lending (PSL), broadly comprising loans to weaker sections, agriculture, MSE, housing and education loan segments. As an enabler, a dedicated business vertical, viz. Priority Sector Group (PSG) was formed by merging your Bank''s Agri and MSE business verticals. In addition to six dedicated PSG Processing Centres (PPCs) with trained staff to process PSL proposals expeditiously, there are 44 dedicated branches exclusively for PSL business. Your Bank has also empowered retail branches to service the MSE and Agri customers across India. Additionally, it conducted workshops in various Agri and MSE clusters for acquainting existing and potential clients with its PSG products, facilities and services. Your Bank also actively participated in various conferences, trade fairs and promotional events to expand its reach in this sector.

Your Bank continued to strengthen its Alternate Banking Channels like ATMs, internet banking, mobile banking, among others, to reduce customers'' dependence on the branch channel, while simultaneously offering 24x7 facilities. From your Bank''s perspective, these facilities are cost-effective as the transaction cost is less compared to the branch channel. Your Bank gainfully leveraged the branch network during the festive season for maximising sales of Prepaid Card products. Your Bank also initiated various measures to induce its customers to use the IDBI Bank Debit Card more frequently for purchases at Point-of- Sale (POS) locations. The Alternate Channels and Merchant Acquisition Business provide avenues for augmenting fee based income, besides helping acquire/ deepen existing relationships. Your Bank has also been actively engaged in initiatives aimed at enhancing customer awareness on cyber frauds and its prevention. It undertook measures to improve the security level of Alternate Channels, especially through internet banking, in view of rising incidence of cyber frauds.

Your Bank has a dedicated vertical, viz. Corporate Banking Group (CBG), which caters to the financial needs of medium and large corporate clients. The Group is organised across seven regions spanning 25 cities and operates through 29 Specialised Corporate Branches (SCBs). As a strategic initiative, the portfolio was granularised to avoid concentration of risk and Non-Fund business/Fee based Income from its corporate clientele was aggressively pursued. To provide personalised services to customers, Client Service Teams (CSTs), comprising members from various product verticals, have been formed at regional and branch levels. In view of the turbulent macroeconomic environment and difficulties confronting the customers, a dedicated Focused Asset Management Group (FAMG) was established to ensure timely resolution of issues, and thereby, manage assets effectively.

During 2013-14, your Bank opened two new Nostro Accounts in EURO and GBP currencies. Further, to make available timely foreign currency funds to the exporters at a competitive rate, your Bank signed Agreements with its Foreign Correspondent Banks for Foreign Currency Borrowing.

During the year, your Bank opened 12 new full – fledged Trade Finance (TF) Centres (Authorized Dealer in Foreign Exchange) pan-India, taking the total number of TF locations to 52. Your Bank continued to strengthen its relationship with foreign banks for facilitating Trade Finance business. During the reference period, your Bank established Relationship Management Application (RMA) with 21 major Foreign Banks, taking the total number of RMAs to 1,442. With the enhanced networking, your Bank has been able to handle bi-directional trade transactions in major parts of the world.

Your Bank continued to derive first-mover advantage in a number of key areas. It was the first Bank in India to develop online payment of stamp duty and registration fees by issuing e-SBTR (Online Secured Bank Treasury Receipt) in Maharashtra. Your Bank was the first lender to finance the toll collection projects of NHAI, awarded under a long-term Operate-Maintain-Transfer (OMT) arrangement, spanning a stretch of 275 km-long highways out of the total 1,800 km highways identified by NHAI for such OMT projects. Your Bank continued to garner awards and accolades from various quarters for operational excellence and its initiatives beyond its core banking business.

Your Bank''s advertising and publicity initiatives intensified during the year with its re-branding campaign, launched after a gap of four years, serving as its centre-piece. The campaign, which spanned from end-October 2013 to early February 2014 in assorted media, but primarily as a television commercial, focused on repositioning your Bank, using a simple concept like friendship to convey the brand attribute and positioning. A new tagline, ''Bank Aisa Dost Jaisa'', was conceived to echo the brand''s USP as a warm, friendly Bank that cares for its constituents. After the new brand campaign closed out, retail product campaigns of its flagship products were launched, drawing upon the DNA and tonality of brand campaign communication. The brand campaign also finds its echo in the core theme of this year''s Annual Report: ''Strengthening Friendship. Touching Lives.''

The details of your Bank''s key initiatives during 2013-14 are featured under the Management Discussion and Analysis section of this Annual Report.

ORGANISATION STRUCTURE

To execute its core strategy of building a robust customer base, facilitate CASA and retail-cum-PSL growth, improve customer service and enhance inclusive banking, your Bank embarked on a calibrated branch expansion drive, while adding 309 branches during 2013-14. Of the domestic branch network of 1387 branches as on March 31, 2014, 319 branches are located in metropolitan centres, 426 in urban centres, 372 in semi-urban centres, 146 in rural centres and 124 branches at rural unbanked centres. Besides, your Bank has one fully operational overseas branch at Dubai International Financial Centre (DIFC), Dubai.

BOARD OF DIRECTORS

Your Bank''s Board of Directors is broad-based and its constitution is governed by the provisions of the Banking Regulation Act, 1949, the Companies Act, the Articles of Association of your Bank and the requirements of corporate governance, as envisaged in the Listing Agreement with the Stock Exchanges. The Board functions directly as well as through various Board-level Committees constituted to provide focused governance in your Bank''s important functional areas.

As on March 31, 2014, the Board comprised nine Directors, including the Chairman and Managing Director (CMD), two Deputy Managing Directors (DMDs), one Non-Executive Director and five Independent Directors. No Director is related to any other Director on the Board.

APEX COMMITTEES

The Board has a total of 13 committees to oversee various functional aspects of your Bank''s business and operations. Two new Committees, viz. Business Review Committee and Corporate Social Responsibility Committee, were added during the reporting period.

CORPORATE GOVERNANCE

Your Bank is committed to adopting the best corporate governance practices. It believes that proper corporate governance is not just a requirement for regulatory compliance, but also a facilitator for enhancement of stakeholders'' value. The details of your Bank''s corporate governance practices are given in this Annual Report as a separate section under Management Discussion and Analysis.

STATEMENT UNDER SECTION 217 (2A) OF THE COMPANIES ACT 1956

There were no personnel in your Bank''s services, during the financial year under review, who received remuneration over Rs. 60 lakh annually. Besides, there were no personnel in the service of your Bank for a part of the year who received remuneration in excess of Rs. 5 lakh per month. The provisions of Section 217(1) (e) of the Act relating to conservation of energy and technology absorption do not apply to your Bank.

DIRECTORS'' RESPONSIBILITY STATEMENT

The Board of Directors hereby declares and confirms that: a. In the preparation of accounts, the applicable accounting standards had been followed along with proper explanation relating to material departure.

b. The Directors had adopted accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent to give a true and fair view of the state of affairs of your Bank at the end of the accounting year and of your Bank''s profit or loss for that year.

c. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records, in accordance with the regulatory provisions, to safeguard your Bank''s assets, prevent and detect fraud and other irregularities.

d. The Directors had prepared the accounts on a going concern basis.

ACKNOWLEDGEMENTS

Your Bank''s Board of Directors is sincerely grateful to the Government of India, Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority (IRDA) and all other Statutory/ Regulatory Authorities for their valuable co-operation and guidance. The Board also acknowledges, with gratitude, the co-operation and support received from various State Governments and other banking/ financial institutions. The Board thanks various multilateral institutions and international banks/ institutions for their periodic support. The Board takes this opportunity to put on record its deep sense of gratitude to its loyal shareholders and customers for extending their support during the year and looks forward to their continued association in the years ahead.

During the financial year, your Bank has received various recognitions and accolades for its excellence in the core banking domain and beyond. The Board is thankful to all such organisations/ agencies for formally recognising your Bank''s efforts. The Board appreciates the sincere and devoted services displayed by its entire staff and highly values their commitment in improving your Bank''s performance on a sustained basis.

Place: Mumbai [M.S. Raghavan]

Date: April 30, 2014 Chairman and Managing Director


Mar 31, 2013

The Board of Directors of your Bank is pleased to present its Report on the business and operations of your Bank for the financial year ended March 31, 2013.

Your Bank''s performance during the financial year 2012-13 improved significantly on many fronts, enabled by strategic policy initiatives, enhanced reach in terms of branch and ATM network and focussed customer service delivery. As on March 31, 2013, your Bank''s aggregate deposits and advances touched Rs. 2,27,116 crore and Rs. 1,96,306 crore, respectively, reflecting a corresponding growth of 7.90% and 8.71% over the previous year. The Performance highlights of your Bank for the period under review is presented in Table 1.

Table 1 : Financial Highlights (Rs. crore)

As on March 31, 2012 2013

Capital 1,278.4 1,332.7

Reserves & Surplus 18,148.7 19,902.5

Deposits 2,10,492.6 2,27,116.5

Borrowings 53,477.6 65,808.9

Other Liabilities & Provisions 6,919.0 8,607.9

Total liabilities 2,90,316.3 3,22,768.5

Cash & Balances with RBI 15,090.2 10,544.0

Balances with Banks & Money at Call & Short Notice 2,967.4 7,380.6

Investments 83,175.4 98,801.0

Advances 1,80,572.3 1,96,306.4

Fixed & Other Assets 8,551.0 9,736.5

Total Assets 2,90,316.3 3,22,768.5

For the Period 2011-12 2012-13

Total Income 25,482.1 28,283.8

Total Expenses (other than provisions) 21,432.5 22,825.6

Provisions (other than tax) 1,419.9 2,836.4

Profit Before Tax 2,629.7 2,621.8

Provision for Tax* 598.1 739.7

Profit After Tax 2,031.6 1,882.1

* Net of current income tax and deferred income tax

PROFIT AND APPROPRIATIONS

During FY 2012-13, your Bank''s gross income amounted to Rs. 28,284 crore, comprising interest income at Rs. 25,064 crore and other income at Rs. 3,220 crore. Interest expenses of Rs. 19,691 crore and operational expenses of Rs. 3,134 crore led to total expenditure, excluding provisions and contingencies, of Rs. 22,826 crore. Total provisions during the year were at Rs. 3,576 crore, which mainly includes Rs. 1,758 crore towards provision for bad and doubtful debts and investments, Rs. 383 crore towards bad debts written off, Rs. 493 crore towards restructured assets, Rs. 172 crore towards incremental prudential provisions for standard assets, and Rs. 740 crore towards tax. Your Bank''s working during FY 2012-13 resulted in a Profit Before Tax (PBT) of Rs. 2,622 crore, After making a provision of Rs. 740 crore towards taxation, Profit After Tax (PAT) amounted to Rs. 1,882 crore. The appropriation of PAT, as approved by the Board of Directors, is given in Table 2.

Table 2 : Appropriation of Profits (Rs. crore)

For the year-ended March 31, 2012 2013

Net Profit/(Loss) for the year 2,031.6 1,882.1

Profit/(Loss) brought forward 615.0 672.6

Profit available for Appropriations 2,646.6 2,554.7

Appropriations

Transferred to Statutory Reserve 507.9 470.8

Transferred to Capital Reserve 17.0 191.8

Transferred to General Reserve 750.0 150.0

Transferred to Special Reserve created and maintained u/s 36(1)(viii) of IT Act, 1961 250.0 300.0

Dividend

- Equity Shares 388.7 466.5

- Tax on Dividend 60.3 71.7

Balance of Profit carried to Balance Sheet 672.6 903.9

For each share with a face value of Rs. 10, Earning Per Share (EPS) during the year stood at Rs. 14.70, while Book Value per Share stood at Rs. 145.89 as at the end of March 2013. The Directors have the pleasure in recommending dividend at 35% on the fully paid-up equity share capital for the FY 2012-13.

CAPITAL ADEQUACY

Your Bank is Basel-II compliant and hence, computes its Capital to Risk-weighted Assets Ratio (CRAR) in adherence to norms prescribed by the RBI in this regard. Credit Risk is computed using the Standardised Approach, Market Risk is arrived at by using Duration Method of Standardised Approach and Operational Risk exposure is based on Basic Indicator Approach. The equity shareholding of the Government of India increased to 71.72% as at end-March 2013, through infusion of fresh equity capital to the extent of Rs. 555 crore during the FY 2012-13. Against the stipulated RBI norm of 9% for total CRAR and 6% for Tier-I CRAR, your Bank''s total CRAR stood at 13.13% with Tier-I CRAR of 7.68%, as at end-March 2013.

BUSINESS STRATEGY

During FY 2012-13, your Bank undertook various initiatives to drive growth in Retail business segment, with special emphasis on mobilising higher CASA deposits. Your Bank followed a strategy of deepening and widening the corporate banking and investment banking relationships. Simultaneously, it also laid special emphasis on acquiring and expanding its Priority Sector Business, which includes the MSME and Agri business, to broaden its asset portfolio.

KEY BUSINESS INITIATIVES

Pursuant to its aim of targeting a progressively larger retail business portfolio to facilitate a balanced business-mix as also to increase the complement of low-cost funds, your Bank currently offers a bouquet of Liability, Asset, Capital Market and Third Party products, primarily aimed at meeting the customised needs of customers in the Retail Banking segment. The products are periodically reviewed and modifications/ innovations/ customisation of existing products as well as introduction of new products are carried out on a regular basis. This is done in sync with observed and latent customer preferences, both as part of customer-centric service as well as for facilitating growth in business volumes.

Business initiatives in the retail banking space are skilfully driven by enabling expansion in branch network and skilled manpower. Your Bank added 104 new brick and mortar branches during the current financial year. Your Bank, as a part of its customer convenience initiatives, continued to strengthen its alternate delivery channels by expanding its ATM network from 1,542, as on March 31, 2012, to 1,702 on March 31, 2013.

In the retail liability product segment, your Bank continued to design new products aligned to emerging customer needs. Your Bank rationalised existing products and also unveiled other customer-friendly initiatives to, inter alia, increase the complement of low-cost funds. As a tech- savvy, customer-friendly initiative for customers, who prefer to transact over the internet, your Bank enabled on-line opening of Savings Bank accounts in certain categories. Your Bank also successfully launched Online PPF Subscription Facility for its customers in February 2013. A customer maintaining PPF account with the Bank can now view his/ her PPF account details, print the account statement and also transfer funds from Savings Bank account to PPF account through Net Banking.

With a view to promote transactions through electronic mode, your Bank has made NEFT transactions up to Rs. 1 lakh free of charge for all Retail Savings and Current Account customers with effect from June 20, 2012. Further, your Bank has extended NEFT facility to walk-in customers for cash deposits up to Rs. 50,000. A Floating Rate Interest on Retail Term Deposit (FRTD) product was launched in August 2012 to enable your Bank''s customers to leverage the upside of an increase in interest rates and also hedge floating rate advances. Your Bank has been authorised to accept deposits under the Capital Gains Accounts Scheme (CGAS), 1988. Four more currencies have been added to help your Bank''s NRI customers choose from a total basket of nine currencies for booking their FCNR (B) Deposits.

In the retail lending space, a bouquet of initiatives and business enablers were put in place during the year. The objective was to ramp up business volumes in all constituents of the retail lending area in an otherwise difficult year. Your Bank proceeded with missionary zeal to bring about business growth in the socially important Education Loan segment. Towards this end, attractive and bespoke schemes were put out for various constituencies of this segment. In the Auto Loan segment, apart from attractive pricing, special festive campaigns, payout policy regarding Auto Dealers and their functionaries have been made conducive for enhanced sourcing of Auto Loan business and mutually gainful tie-ups with auto dealers/ manufacturers.

Your Bank introduced online loan application facility with tracking system during FY 2012-13, beginning with Home Loans, which was subsequently extended to Auto Loans, Personal Loans and Education Loans. It is expected that the cost-effective, fast and transparent facility will provide an additional and more convenient option to your Bank''s customers to apply for its Loan products. Simultaneously, with a view to improve the turnaround time, transparency and accuracy in loan processing as well as decision making, your Bank has launched an automated Loan Originating System (LOS). LOS is an end- to-end solution for retail loan products, which automates the loan process from login of the proposal till opening of loan account in Finacle Core.

To augment the Bank''s Priority Sector Loans (PSL) business and develop a PSL portfolio, all the personal banking branches of your Bank have been tasked with the responsibility of sourcing and processing Agri and MSME loans, along with Home Loans and Education Loans, qualifying as PSL, from the current financial year.

Your Bank continued to strengthen its Alternate Banking channels like ATMs, internet banking, mobile banking and others to provide customers with enabling options to reduce their dependence on the branch channel, while simultaneously offering 24x7 capabilities. From the Bank''s perspective, they are also cost-effective as the transaction cost is less compared to the branch channel. The Alternate Channels and Merchant Acquisition Business also provided avenues to your Bank for augmenting fee-based income, apart from helping acquire/ deepen existing relationships. Share of Alternate

Banking Transactions total Branch Banking (Financial) transactions increased by 5% during the year to around 49% by March 2013. It helped reduce your Bank''s transaction costs, apart from freeing up soft resources at the Branch for redeployment in product sales.

Your Bank was ranked among the Top 10 Banks having initiated more than 10,000 M-remit (IMPS) mobile- based transactions during the National Payment Corporation of India (NPCI) campaign conducted in August 2012. Your Bank is in the process of launching a comprehensive Mobile Banking solution, which would enable customers to have access to their accounts 24x7 on the move.

Several initiatives were also undertaken by your Bank in the internet banking area during the year. To further enhance security of the internet banking channel from phishing and various other online frauds, your Bank took the lead to expeditiously implement a Digital Signature Certificate (DSC) based authentication solution to strengthen and further secure its Corporate I-net Banking channel. To drive awareness on cyber frauds and its prevention, customers are being educated about security measures taken by the Bank through E-mails and SMS. Inserts are sent in statements on a periodic basis. A pre-Login caution page explaining safe Internet banking practices is also being displayed. A series of Safety measures (Do''s and Don''ts) to use Net Banking is also displayed on the Bank''s website. In addition to channel alerts (ATM, Net Banking and Point of Sale transactions), SMS alerts for all channel transactions, including stop payment confirmation/ cheque(s) deposited and returned are being sent to all Personal Banking Group (PBG)-tagged customers, irrespective of registration for the service, to keep them informed and avoid possible misuse.

Your Bank has constantly endeavoured to cater to the diverse needs of its MSME clients. Your Bank has also developed innovative and user-friendly products and services for the MSME sector to promote their growth in the sphere of industry and services. Considering the importance of credit rating, your Bank has signed Memorandums of Understanding (MoUs) with CRISIL and SME Rating Agency of India (SMERA) to provide credit rating-related services to the MSME clients. Your Bank has also entered into a MoU with Small Industries Development Bank of India (SIDBI) - the apex financial institution for MSME Sector - to offer Loan syndication services to the Sector. Your Bank has also entered into a Memorandum of Co-operation (MoC) with the Export Import Bank of India (Exim Bank) to co-finance, co- arrange and syndicate Rupee and Foreign Currency loans to eligible export-oriented companies, particularly in the MSME sector.

Consequent upon the reclassification of direct agriculture exposure by the Reserve Bank of India in July 2012, the Bank''s focus has veered towards catering to direct retail lending to farmers involved in crop cultivation and allied activities. To reach out to the remotest part of the country, the Bank appointed 35 Business Correspondents/ Business Facilitators (BC/BF). Your Bank continued to encourage formation of farmers'' clubs in the villages covered by rural branches for garnering higher Agri Business. Your Bank''s engagement with farmers and other agriculture intermediaries was also enhanced through participation in various ''Agri Expos'' and ''Loan Melas'' conducted at different locations in the country.

Your Bank''s Corporate Banking Group (CBG) has a strong focus on multi-product sales - both assets and liabilities - to maximise yield. With the reorganisation of Large and Mid-Corporate Group, a unified Corporate Banking Group was formed in June 2012 to cater to all corporate clients with funding requirement of more than Rs. 5 crore. To effectively operationalise the business, CBG has been reorganised into seven regions and operates through 29 Specialised Corporate Branches (SCBs) present across 25 cities.

During FY 2012-13, your Bank opened two new Nostro Accounts in AUD and SGD currencies, with Australia & New Zealand Banking Group Ltd. (ANZ), Melbourne, Australia and United Overseas Bank, Singapore, respectively, for DIFC, Dubai Branch operations. A new Nostro account was also opened in Korean Won (KRW) currency with Standard Chartered First Bank, Seoul, South Korea, for Indian operations. During the year, your Bank opened one new Trade Finance (TF) Centre at Bandra-Kurla Complex (BKC), Mumbai, thereby increasing the total number of TF locations to 40. Your Bank has been establishing inland Letters of Credit (LCs) through Structured Financial Messaging System (SFMS) developed by the Institute for Development and Research in Banking Technology (IDRBT), Hyderabad. Your Bank implemented the SFMS system in all its 40 Specialised Trade Finance Branches for issuance of LCs according to the directive of the Ministry of Finance, with effect from January 1, 2013. SFMS is a highly secure messaging standard developed to serve as a platform for intra-bank and inter-bank applications. Your Bank is also fully ready for issuance of Bank Guarantees using this highly efficient platform. Your Bank is also among the first few institutions to issue Electronic Bank Realisation Certificate of Export Realisation (e-BRC). The process envisages direct uploading of digitally signed e-BRC covering export realisation details to Directorate General of Foreign Trade''s (DGFT) site, thereby making the process of settlement of export-related benefits/ incentives faster and hassle-free for the exporters.

Strengthening relationship with Foreign Banks continued to be your Bank''s priority to enhance Trade Finance Business, which has contributed to the augmentation of fee income.

The Singapore Dollar Bond issue by your Bank was the first benchmark public bond transaction by any Indian entity in the Singapore Dollar bond market, opening up a new source of funding and investor diversification for Indian issuers.

Your Bank became the first in the country to launch an internet-based portal dedicated to retail investors in Government Securities, christened as "IDBI Samriddhi GSEC". To popularise Certificate of Deposit (CD) as a mode of investment among retail investors, your Bank, in August 2012, launched the first online CD portal in the country, called IDBI Samriddhi CD portal. This CD portal helps retail investors subscribe online to CDs issued by your Bank with a minimum of Rs. 1 lakh and in multiples of Rs. 1 lakh thereafter. Your Bank also entered into Global Master Repurchase Agreements (GMRA) with various market participants and was the first Public Sector Bank in the country to undertake Repo deal in corporate bonds.

ORGANISATION STRUCTURE

To execute its strategy of building a robust customer base, facilitate CASA growth, improve customer service and further the cause of inclusive banking, your Bank embarked on a calibrated branch-category wise expansion drive. The Bank added 104 domestic branches during FY 2012-13. Of the domestic network of 1,076 branches, as on March 31, 2013, as many as 274 are located in metropolitan centres, 388 in urban centres, 282 in semi-urban centres and 132 in rural centres, including 21 branches at hitherto unbanked areas; besides, your Bank has one fully operational overseas branch at DIFC, Dubai. Branches at a few locations were relocated and renovated to have a uniform decor across all branches.

Customer relationship and service forms the core of your Bank''s initiatives. Accordingly, your Bank is currently organised on the lines of ''Customer Focused Vertical'' model, capable of delivering improved services. The model has achieved significant success in enhancing customer relationship management. Besides, it has improved credit delivery and brought sharper focus to business lines, which are sustainable and remunerative. Both the retail and corporate business segments of your Bank were further reorganised to enhance business delivery and reduce turnaround time.

BOARD OF DIRECTORS

Your Bank''s Board of Directors is broad-based and its constitution is governed by the provisions of the Banking Regulation Act, 1949, the Companies Act, 1956 and the Articles of Association of the Bank. Your Bank''s constitution satisfies the requirements of good corporate governance as envisaged in the Listing Agreement with the Stock Exchanges. The Board functions directly as well as through various Board Committees, which are constituted to provide focussed governance in important functional areas of the Bank.

As on March 31, 2013, the Board comprised seven Directors with two Whole-Time Directors (viz., Chairman and Managing Director and Deputy Managing Director), one Non-Executive Director and four Independent Directors. None of your Bank''s Directors are related to each other.

APEX COMMITTEES

The Board has, in all, eleven committees, viz., Executive Committee, Audit Committee, Shareholders''/ Investors'' Grievance Committee, Frauds Monitoring Committee, Risk Management Committee, Customer Service Committee, Information Technology Committee, Remuneration Committee, Nomination Committee, HR Steering Committee and Recovery Review Committee. These committees oversee various functional aspects of your Bank''s business and operations.

CORPORATE GOVERNANCE

Your Bank is committed to adopt the best practices in corporate governance. Your Bank believes that proper corporate governance is not just a requirement for regulatory compliance, but also a facilitator for enhancement of stakeholders'' value. The details of corporate governance practices followed in your Bank are given in this Annual Report as a separate section under the Management Discussion and Analysis.

Statement under Section 217(2A) of the Companies Act, 1956

During the entire financial year under review, there were no personnel in your Bank''s services who received remuneration over Rs. 60 lakh per annum. Further, there were no personnel in the service of the Bank for a part of the year who received remuneration in excess of Rs. 5 lakh per month. The provisions of Section 217(1)(e) of the Act relating to conservation of energy and technology absorption do not apply to your Bank.

DIRECTORS'' RESPONSIBILITY STATEMENT

The Board of Directors hereby declares and confirms that:

a. In the preparation of accounts, the applicable accounting standards had been followed, along with proper explanation relating to material departure.

b. The Directors had adopted 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 your Bank at the end of the accounting year and of the profit or loss of your Bank for that year;

c. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records, in accordance with the regulatory provisions, for safeguarding the assets of your Bank and for preventing and detecting fraud and other irregularities; and

d. The Directors had prepared the accounts on a going concern basis.

ACKNOWLEDGEMENTS

The Board of Directors of your Bank expresses its sincere thanks to the Government of India, Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority (IRDA) and all other Statutory/ Regulatory Authorities for their valuable co-operation and guidance. The Board is equally grateful for advice received from distinguished colleagues, who ceased to be Directors of the Bank during 2012-13. The Board also acknowledges the co-operation and support received from various state governments and other banking/ financial institutions. The Board thanks various multilateral institutions and international banks/ institutions for their periodic support. The Board also takes this opportunity to thank all its shareholders and customers for extending their support during the year and looks forward to their continued association in the years ahead. During the financial year, the Bank has received various recognitions and accolades for its excellence in the banking domain. The Board is indeed thankful to all such organisations/ agencies for their appreciation of the Bank''s efforts. The Board appreciates the sincere and devoted services displayed by its entire staff and highly values their commitment towards improving your Bank''s performance.

(M. S.Raghavan)

Chairman and Managing Director

Place: Mumbai

Date: July 8, 2013


Mar 31, 2012

The Board of Directors of your Bank takes pleasure in presenting its Report on the business and operations of your Bank for the financial year ended March 31, 2012.

During the financial year 2011-12, the performance of your Bank has shown considerable growth on different fronts driven by strategic policy initiatives; expansion in branch network, focus on improved customer service delivery, superior product characteristics, which has resulted in improvement in key profitability indicators. Your Bank was able to widen its customer base both by expanding its outreach, as also by providing a range of innovative products and services. As on March 31, 2012 aggregate deposits and advances of your Bank touched Rs. 2,10,493 crore and Rs. 1,81,158 crore reflecting a growth of 16.63% and 15.32%. The Performance highlights of your Bank for the period under review are presented in Table 1.

Table 1: Financial Highlights

Particulars (Rs. in Crore)

As at year-end 2010-11 2011-12

Capital 984.6 1,278.4

Reserves & Surplus 13,582.0 18,148.7

Deposits 1,80,485.8 2,10,492.6

Borrowings 51,569.6 53,477.6

Other Liabilities & Provisions 6,754.8 7,439.9

Total Liabilities 2,53,376.8 2,90,837.2

Cash & Balances with RBI 19,559.0 15,090.2

Balances with Banks and 1,207.0 2,967.4

Money at Call & Short Notice

Investments 68,269.2 83,175.4

Advances 1,57,098.1 1,81,158.4

Fixed & Other Assets 7,243.5 8,445.8

Total Assets 2,53,376.8 2,90,837.2

For the period 2010-11 2011-12

Total Income 20,684.5 25,488.7

Total Expenses (other than 16,526.6 21,432.5 provisions)

Provisions (other than tax) 1,876.9 1,426.5

Profit Before Tax 2,281.0 2,629.7

Provision for Tax* 630.7 598.1

Profit After Tax 1,650.3 2,031.6

* Net of Current Income Tax and Deferred Income Tax

Profit and Appropriations

During the financial year April 2011 - March 2012, gross income of your Bank increased to Rs. 25,488.7 crore with contribution of interest income at Rs. 23,369.9 crore and other income at Rs. 2,118.8 crore. Interest expenses of Rs. 18,825.1 crore and operational expenses of Rs. 2,607.5 crore, led to total expenditure, excluding provisions and contingencies, of Rs. 21,432.5 crore during FY 2011-12. Total provisions during the year were at Rs. 2,024.6 crore, which includes Rs. 591.9 crore towards provision for bad & doubtful debts and investments, Rs. 263.7 crore towards restructured assets, Rs. 231.9 crore towards incremental prudential provisions for standard assets, and Rs. 598.1crore towards tax. The Profit before Tax (PBT) of your Bank during the FY 2011-12 stood at Rs. 2,629.7 crore. After making a provision of Rs. 598.1 crore towards taxation, Profit after Tax (PAT) amounted to Rs. 2,031.6 crore. The appropriation of PAT as approved by the Board of Directors is given in Table 2.

Table 2 : Appropriation of profits

Particulars (Rs. in Crore)

As at year-end 2010-11 2011-12

Net Profit for the year 1,650.3 2,031.6

Profit brought forward 479.1 615.0

Profit available for 2,129.4 2,646.6

Appropriations

Appropriations 2010-11 2011-12

Transferred to Statutory 413.0 507.9

Reserve

Transferred to Capital Reserve 1.5 17.0

Transferred to General 600.0 750.0

Reserve

Transferred to Special Reserve 100.0 250.0 created and maintained u/s 36(1)(viii) of IT Act, 1961

Dividend

- Equity Shares* 344.6 388.7

- Tax on Dividend** 55.3 60.3

Balance of Profit carried to 615.0 672.6

Balance Sheet

*Dividend on equity shares includes interim dividend of Rs. 2/- per share paid during 2011-12.

**Tax on dividend includes tax on interim dividend paid during 2011-12.

For each share with face value of Rs. 10, Earning Per Share (EPS) during the year stood at Rs. 20.6 and Book Value Per Share stood at Rs. 137.24 as at end-March 2012. The Directors have pleasure in recommending dividend at 35% (including 20% paid on interim basis) on the fully paid-up equity share capital for the financial year 2011-12.

Capital Adequacy

Your Bank is Basel-II compliant and the Capital to Risk weighted Assets Ratio (CRAR) is computed in adherence to norms prescribed by RBI in this regard. Credit Risk is computed using the Standardised Approach, Market Risk is measured by using Duration Standardised Approach and Operational Risk measure is Basic Indicator Approach. During FY 2011-12, the equity shareholding of Government of India has increased to 70.52% as at end-March 2012 through infusion of fresh equity capital to the extent of Rs. 810 crore and conversion of Tier I Bonds of Rs. 2,130.5 crore into equity. Against the stipulated RBI norm of 9% for total CRAR and 6% for core CRAR, your Bank's total CRAR worked out to 14.58 % with Tier-I CRAR of 8.38 % as at end-March 2012.

Vision and Mission Statement

Over the years, your Bank has undergone a number of structural and organizational changes while transforming itself into a universal commercial bank. The journey of your Bank has always encompassed enhancing value for all its stakeholders. In order to reflect of the current ethos of your Bank, new Vision and Mission Statement have been crafted. The new vision statement of your Bank is "To be the most preferred and trusted bank enhancing value for all stakeholders". With the new vision statement, your Bank has formalized a goal to share a common dream with all the stakeholders of the Bank.

Previously, there was no separate Mission statement as the Vision statement itself incorporated the mission of the Bank. Also, in consonance with the change in the Vision Statement, a new Mission statement was crafted, in line with the organization's long-term and short-term goals. Accordingly, the mission statement of your Bank is:

- Delighting customers with our excellent service and comprehensive suite of best-in-class financial solutions;

- Touching more people's lives with our expanding retail footprint while maintaining our excellence in corporate and infrastructure fi nancing;

- Continuing to act in an ethical, transparent and responsible manner, becoming the role model for corporate governance;

- Deploying world class technology, systems and processes to improve business efficiency and exceed customers' expectations;

- Encouraging a positive, dynamic and performance- driven work culture to nurture employees, grow them and build a passionate and committed work force;

- Expanding our global presence;

- Relentlessly striving to become a greener bank.

The mission statement which charts the route map has seven key elements which will make the new vision come to reality. Your Bank will strive to provide best in class services and solutions, and maintain high standards of ethical values. Your Bank will be a responsible bank that contributes to social sustainability in all its activities. The focus of your Bank would be on continuous growth and it will continue to delight every customer by its unique and innovative products and services and pioneering efforts.

Business Strategy

Your Bank's strategy during the year under review focused on aggressive growth in Retail lending and repositioning of delivery channels to realize higher CASA deposits. At the same time, your Bank sought to maintain its leadership position in the corporate banking and investment banking space, so as to meet the requirements of the corporate sector. Specific focus was laid on cross selling of your Bank's entire product and service offerings across the entire range of customers, so as to build sustainable and stable relationships. Your Bank's strategy during the year resulted in improvement in various profitability parameters and consolidated its business position across various benchmarks, so as to bring them more in line with the prevailing industry standards.

Key Business Initiatives

Your Bank continued to target a progressively larger retail business portfolio to facilitate a more balanced business mix, in keeping with its intended positioning as a full- service new generation commercial bank. Further, in order to build a strong foundation for sustainable growth on long term basis, as also ensure compliance with regulatory norms, your Bank took initiatives to build up its priority sector lending portfolio. Your Bank has been a pioneer in the field of Corporate Finance for the last nearly five decades. Your Bank has maintained its focus on corporate banking and laid Specific emphasis on cross-selling of your Bank's diverse range of products and services. Your Bank increased substantially its presence in government business and enabled higher direct and indirect tax collections.

Your Bank offers a bouquet of Liability, Asset, Capital Market and Third Party products aimed at meeting the customized needs of customers in the Retail Banking segment. Your Bank introduced a number of products in the pre-paid cards arena during the year under review. Your Bank has initiated a project on facilitating usage of ATM network to Co-operative Banks and RRBs on National Financial Switch (NFS) network in association with National Payments Corporation of India (NPCI). This would enable Co-operative Banks and RRBs to issue ATM cards to their account holders and get connected to the NFS network to have access to more than 84,000 ATMs across India.

Your Bank entered into MOUs with several reputed educational institutions across India for granting educational loans to eligible students during the year. Your Bank is also offering additional concessions to girl students from SC/ST and Minority communities.

Your Bank had launched its Internet Banking services way back in October 2001. Since then, the ambit of this channel has progressively broadened to include several value-added services. Keeping in view the need to secure online shopping/e-commerce based transactions initiated through the internet banking channel from phishing related frauds, an Online Shopping Password (OSP) security feature has been introduced by the Bank from December 2011. Your Bank also introduced an online password-generation facility for the Retail Net Banking customer, to instantly create their own login and transaction password and also set their access profile.

As part of a Financial Inclusion project in four Talukas of Gujarat, your Bank has, inter alia, launched a specially designed Co-branded Photo ATM Card on 'Rupay' Platform. The Card can be used for ATM transactions at your own as well as other Bank ATMs that are members of National Payment Corporation of India (NPCI).

Your Bank has constantly endeavored to cater to the diverse needs of its MSE clients and has continuously been developing customized MSE products. During FY 2011-12, your Bank introduced a new product, viz., "Line of Credit to Vendors of Corporates" that augments the liquidity position of MSE vendors. Considering the growing importance of credit rating for MSE clients, which enhances the confidence in MSEs while dealing with financial institutions, banks and corporates for their fi nancial needs and business opportunities, your Bank signed an MoU with Credit Analysis and Research Ltd. (CARE) for credit rating of the MSE customers at preferential rate.

Your Bank has put in place a state-of-the-art Technology Platform which is supporting the Government's dual objective of improvement of tax collection efficiency and e-governance. Your Bank had gone live in January 2012 in providing online duty payment services in respect of Customs Duty for all the 103 Electronic Data Interchange (EDI) locations across the country. With this development, taxpayers are now in a position to route all of their Central Taxes and Duties payments through IDBI Bank, making your Bank an important Agent in its pursuit of partnering the Government of India in enabling online tax payments and enhancing the tax contribution to the Exchequer.

Your Bank became the first ever Bank in the country to launch an internet based portal dedicated to retail investors in Government Securities. The portal, named "IDBI Samriddhi G-Sec" has been received favourably by the investor class. This trend setting initiative by your Bank offers retail investors the opportunity to benefit from the safety, liquidity and risk free returns that Government Securities offer.

Your Bank became the first entity from India as also other emerging markets to access foreign currency funds in the Dim Sum Market. In November 2011, your Bank raised Renminbi (RMB) 650 million 4.5% fixed rate Dim Sum Bonds for 3 year maturity. This issue provides testimony to the faith reposed by global fixed income investors in your Bank.

Organizational Structure

Your Bank has continued its thrust on improving organizational structure, which places customer relationship and service at the centre of all banking initiatives. Accordingly, your Bank is currently organized on the lines of "customer focused vertical" model, capable of delivering improved services. The model has achieved significant success in enhancing customer relationship management, improving credit delivery and bringing sharper focus to business lines which are sustainable and remunerative.

With the addition of 157 branches during FY 2011-12, including Specialized Corporate Branches, the total number of domestic branches went up to 972 as on March 31, 2012 in addition to one overseas branch at DIFC, Dubai. Of the domestic branch network, 264 are located in metropolitan centres, 377 in urban centres, 236 in semi-urban centres and 95 in rural centres.

Board of Directors

Your Bank's Board of Directors is broad based and its constitution is governed by the provisions of the Banking Regulation Act, 1949, the Companies Act, 1956, the Articles of Association of the Bank and satisfies the requirements of good corporate governance as envisaged in the Listing Agreement with the Stock Exchanges. The Board functions directly as well as through various Board Committees constituted to provide focussed governance in important functional areas of the Bank.

As on March 31, 2012, the Board of Directors of your Bank comprised of six Directors with two Executive Directors (including the Chairman & Managing Director and the Deputy Managing Director), one Non Executive Director and three Independent Directors. No Director on the Board of your Bank is in any way related to any other Director on the Board of the Bank.

Apex Committees

The Board has in all eight committees, viz., Executive Committee, Audit Committee, Shareholders'/Investors' Grievance Committee, Frauds Monitoring Committee, Risk Management Committee, Customer Service Committee, Information Technology Committee and Remuneration Committee, to oversee various functional aspects of the Bank's business and operations.

Corporate Governance

Your Bank is committed to adopting the best practices in the area of corporate governance. Your Bank believes that proper corporate governance is not just a requirement for regulatory compliance, but also a facilitator for enhancement of stakeholders' value. The details of corporate governance practices followed in your Bank are given in this Annual Report as a separate section under the Management Discussion and Analysis.

Statement under Section 217(2A) of the Companies Act, 1956

There were no personnel in the services of the Bank for the whole year, who were in receipt of remuneration of over Rs. 60 lakh per annum. Further, there were no personnel, who were in the service of the Bank for part of the year, received remuneration in excess of Rs. 5 lakh per month for the period they were in the service of the Bank.

The provisions of Section 217(1) (e) of the Act relating to conservation of energy and technology absorption do not apply to your Bank.

Directors' Responsibility Statement

The Board of Directors hereby declares and confirms that:

a. in the preparation of accounts, the applicable accounting standards had been followed along with proper explanation relating to material departure;

b. the Directors had adopted 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 your Bank at the end of accounting year and of the profit or loss of your Bank for that year;

c. the Directors had taken proper and sufficient care for the maintenance of adequate accounting records, in accordance with the regulatory provisions, for safeguarding the assets of your Bank and for preventing and detecting fraud and other irregularities;

d. the Directors had prepared the accounts on a going concern basis.

Acknowledgements

The Board of Directors of your Bank expresses its sincere thanks to the Government of India, Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority (IRDA) and all other Statutory/ Regulatory Authorities for their valuable co-operation and guidance. The Board also acknowledges the co-operation and support rendered by various State Governments and other banking/financial institutions. The Board thanks various multilateral institutions and international banks/ institutions for their periodic support. The Board takes this opportunity to thank all its shareholders and customers for extending their support during the year and looks forward to their continued association in the years ahead. During the financial year, the Bank has received various recognitions and accolades for its excellence in banking domain. The Board indeed is thankful to all such organizations/agencies for their appreciation of the Bank's efforts. The Board appreciates the sincere and devoted services displayed by its entire staff and highly values their commitment in improving your Bank's performance.

Place : Mumbai R. M. Malla

Date : April 21, 2012 Chairman & Managing Director


Mar 31, 2011

Dear Members,

The Board of Directors of your Bank takes pleasure in presenting its Report, reflecting the business and operations of your Bank for the financial year ended March 31, 2011.

During the financial year 2010-11, the operations of your Bank witnessed considerable progress driven by strategic policy realignments, focus on customer delight, superior product characteristics, service delivery among others, which consequentially led to improvement in business and key profitability indicators. The approach per se reflects a paradigm shift in banking space, enabling your Bank to expand its products and services range, availed by increased number of customers which we value the most. As on March 31, 2011 aggregate deposits and advances of your Bank reached Rs 1,80,485.8 crore and Rs 1,57,098.1 crore respectively. Performance highlights of your Bank for the period under review are presented in Table 1.

Table 1 : Financial Highlights

Particulars (Rs crore)

As at year-end 2009-10 2010-11

Capital 724.9 984.6

Reserves & Surplus 9,438.4 13,582.0

Deposits 1,67,667.1 1,80,485.8

Borrowings 47,709.5 51,569.6

Other Liabilities & Provisions 8,032.9 6,754.8

Total liabilities 2,33,572.8 2,53,376.8

Cash & Balances with RBI 13,903.5 19,559.0

Balances with Banks and Money 679.4 1,207.0 at Call & Short Notice

Investments 73,345.5 68,269.2

Advances1, 38,201.8 1,57,098.1

Fixed & Other Assets 7,442.6 7,243.5

Total Assets 2,33,572.8 2,53,376.8

For the Period 2009-10 2010-11

Total income 17,563.0 20,684,5

Total Expenses(other than provoisions) 14,836.6 16,526.6

Provisions (other than tax) 1,681.7 1,876.9

Profit Before Tax 1,044.7 2,281.0

Provision for tax * 13.6 630.7

Profit after Tax 1,031.1 1,650.3

Profit and Appropriations

During the financial year April 2010 - March 2011, total income of your Bank increased to Rs 20,684.5 crore with the contribution of interest income at Rs 18,600.8 crore and other income at Rs 2,083.7 crore. Interest expenses of Rs 14,271.9 crore and operational expenses of Rs 2,254.7 crore, led to total expenditure, excluding provisions and contingencies, ofRs 16,526.6 crore during FY 2010-11. Total provisions during the period remained at Rs 2,507.6 crore, comprising Rs 1650.1 crore towards bad & doubtful debts and investments, Rs 122.6 crore towards restructured assets, Rs 104.2 crore towards incremental prudential provisions for standard assets, and Rs 630.7 crore towards tax.

Profit Before Tax (PBT) of your Bank during the FY 2010-11 came toRs 2281.0 crore. After making a provision ofRs 630.7 crore towards taxation, Profit After Tax (PAT) amounted to Rs 1650.3 crore. Appropriation of PAT as approved by the Board of Directors is given in Table 2.

Table 2 : Appropriation of Profits

Rs Crore

Parlitulars 2009-10 2010-11

Net Profit(Loss) for the year 1,031.1 1,650.3

Profit (Loss) brought forward 71.2 470.4

Profit available for 1,102.3 2,120.7 appropriations

Appropriations

Transferred to Statutory Reserve 258.0 413.0

Transferred to Capital Reserve - 1.5

Transferred to General Reserve 100.0 600.0

Transferred to Special Reserve 25.0 100.0 created and maintained u/s 36(1)(viii)of IT Act, 1961

Dividend

- Equity Shares 217.4 344.6

- Tax on Dividend 31.5 55.3

Balance of Profit carried to 470.4 606.3 Balance Sheet

For each share with face value of Rs 10, Earning Per Share (EPS) during the year stood at Rs 18.4 and Book Value Per Share stood at Rs 128.4 as at end-March 2011. The Directors have pleasure in recommending dividend at 35% on the fully paid-up equity capital for the financial year 2010-11.

Capital Adequacy

Your Bank is Basel-ll compliant and the Capital to Risk- weighted Assets Ratio (CRAR) is computed in adherence to norms prescribed by RBI in this regard. Credit Risk is computed using the Standardized Approach, Market Risk is arrived by using Duration Method of Standardized Approach and Operational Risk exposure is based on Basic Indicator Approach. During FY 2010-11, Government of India infused fresh equity capital to the extent of Rs 3119.04 crore, thereby increasing its equity holding to 65.13% as at end-March 2011. Against the stipulated RBI norm of 9% for total CRAR and 6% for core CRAR, your Bank's total CRAR worked out to 13.64% with Tier-I CRAR of 8.03% as at end-March 2011.

Business Strategy

The Bank's strategy covered a very aggressive scale up of relationship base and product offerings with elevated features. Suitable measures have been undertaken along with infrastructure repositioning, so as to realize more amounts of CASA and other retail deposits. The Bank, in its quest to granularize its loan book, plans to build priority sector lending and rfnprove upon composition of corporate- retail loans. Investment Banking continued to be a focus area which contributed significantly to growth in fee based income. Your Bank's strategy during the year resulted in improving its profitability parameters and consolidating its business parameters so as to bring them more in line with the prevailing industry benchmarks.

New Business Initiatives

Fresh business efforts undertaken during the fiscal principally aim to impart value and comfort to our increasing clientele, derive associated benefits and realize the strategic vision of escalating your Bank to a sustainable growth path. The financial year 2010-11, would be remembered in the Indian Banking space wherein your Bank, in its quest "delight for its customers" freed all charges on CASA and retail deposit accounts. This shows improved product characteristics of the Bank's deposit products over its competitors. The measure empowers your Bank to optimize its risk-return matrices associated with its business portfolio.

The Bank has also provided facility of making on-line payments for e-commerce transactions though its debit card. A new variant debit card was launched exclusively for women customers. In order to encourage customers with regard to usage of debit card, a cash back scheme for debit card usage was also offered. Within the regulatory framework, cash withdrawal was allowed on debit card at various merchant establishments.

The Bank is increasingly committed to support government initiatives offering financial services to Economically Weaker Sections (EWSs) and Lower Income Groups (LIG) of society and accordingly offered, along with others, Interest Subsidy Scheme for Housing the Urban Poor (ISHUP). In its efforts to ensure improved financial inclusion, your Bank has signed MOU with Tribal Development Department, Government of Gujarat and is exploring similar partnership with other State Governments. The Bank has also signed MOU with Unique Identification Authority of India (UIDA!) for acting as a registrar.

Your Bank understands various needs of the MSME clients and is always on the lookout to offer new products that are customized to take care of such needs. During FY2010-11, your Bank launched 'Loan Against Property' for the MSMEs to unlock value of their assets/properties. 'SME Smart Line of Credit was also introduced so that MSMEs could take advantage of emerging business opportunities. In addition, your Bank implemented the 'Artisan Credit Card' scheme of Indian Banks' Association (IBA) to take care of the credit needs of the artisan community of the nation. With a view to move towards cleaner and green energy sources, your Bank joined hands with World Resource Institute (WRI), USA, one of the top international research institutes on a non-exclusive basis in developing a loan product for implementation of Energy Saving projects.

Apart from these, your Bank has taken steps to offer tailor- made, faster solutions to the MSME clients. In this spirit, and to further enrich the MSME loan basket, your Bank has tied-up with SIDBl in an exclusive arrangement to jointly finance MSME units, initially in 10 centres viz., Ahmedabad, Bangalore, Chennai, Coimbatore, Delhi, Indore, Jaipur, Lucknow, Ludhiana and Rajkot, subsequently to be rolled out across the country.

A series of new initiatives / projects were implemented during the year in order to improve Turn Around Time (TAT), soften cost and provide error free services in various facets of our operations. A new locker management system was launched linked to Core Banking software of the Bank. It helps the Bank to have online position of locker availability and rentals at any given point of time.

Your Bank has also launched a software for Complaint Resolution Management (CRM) at branches. An escalation mechanism has been built in the CRM module whereby if the complaint is not resolved within the stipulated time, the same is forwarded to the Customer Care Centre at Corporate Office for further action.

The Bank has introduced a new system of electronic registers in bilingual form at branches which is linked to Core Banking Software. This module was launched in order to achieve significant reduction in the cost as well as paper work.

Your Bank has received ISO 9001:2008 certification for all its Currency Chests. A new Currency Chest was opened at Kochi taking the number of Currency Chests of your Bank to six.

The Bank has also received ISO 9001:2008 certification for all its Centralised Clearing Units (CCUs). Equipped with ISO 9001:2008 Certification for its Centralised Operations, Currency Chests and CCUs, IDBI Bank is in the unique position to have its entire operations for retail banking as ISO 9001:2008 certified. This apart, IDBI Bank has also implemented Lean Six Sigma Project for its Centralised Operations, another feather in its cap, to provide error-free and timely services to its customers.

Keeping pace with the ever increasing work load in retail assets portfolio and also to take care of the additional volumes arising out of merger of IDBI Home Finance Ltd. with IDBI Bank, your Bank has installed a state-of-the- art software for management of post-dated cheques. The system will facilitate the Bank to handle more number of instruments with reduced Turn Around Time.

Organizational Structure

Your Bank has continued thrust on improving organizational structure, which values customer relations as the epitome of banking. Accordingly, your Bank is currently organized on the lines of "customer focused vertical" model, capable of delivering improved services. The model has achieved significant success in enhancing customer relationship management, improving credit delivery and bringing sharper focus to business lines which are sustainable and remunerative.

With the addition of 107 branches during FY2010-11, including Specialized Corporate Branches, total number of domestic branches went up to 815 as on March 31, 2011 in addition to an overseas branch at DIFC, Dubai. Of the domestic branch network, 238 are located in metropolitan centres, 307 in urban centres, 184 in semi-urban centres and 86 in rural centres. In order to ensure improved operating domain, branches at a few locations were relocated and renovated to provide fresh look and feel, similar to other branches of the Bank. The Bank constantly endeavours to expand its branch network to execute its strategy of building sufficiently larger customer base, improved customer service and improved CASA contribution. Your Bank also has plans to increase the number of Specialized Corporate Branches and Loan Processing Centers in retail segments.

Board of Directors

Your Bank's Board of Directors is broad based and constitution thereof is governed by the provisions of the Banking Regulation Act, 1949, the Companies Act, 1956, the Articles of Association of the Bank and satisfy the requirements of good corporate governance as envisaged in the Listing Agreement with the Stock Exchanges. The Board functions directly as well as through various Board Committees constituted to provide focussed governance in important functional areas of the Bank.

As on March 31, 2011, the Board comprised of 10 Directors with two Executive Directors (including Chairman), two Non Executive Directors and six Independent Directors. Shri R.M. Malla, Chairman & Managing Director as Executive Chairman, Shri B.P. Singh, Dy. Managing Director as Whole Time Director, Shri Rakesh Singh and Shri R.P. Singh, Central Government Officials as Non Executive Directors, Shri Analjit Singh, Smt. Lila Firoz Poonawalla, Shri K. Narasimha Murthy, Shri H.L. Zutshi, Shri Subhash Tuli and Dr. B.S. Bisht as Independent Directors constitute the Board.

No Director on the Board of your Bank is in any way related to any other Director on the Board of the Bank.

Apex Committees

The Board has in total eight committees, namely, Executive Committee, Audit Committee, Shareholders'/Investors' Grievance Committee, Frauds Monitoring Committee, Risk Management Committee, Customer Service Committee, Information Technology Committee and Remuneration Committee.

Corporate Governance

Your Bank is committed to adopting the best practices in the area of corporate governance. Your Bank believes that proper corporate governance is not just a requirement for regulatory compliance, but also a facilitator for enhancement of stakeholders' value. The details of corporate governance practices followed in your Bank are given in this Annual Report as a separate section under Management Discussion and Analysis.

Statement under Section 217(2A) of the Companies Act, 1956

There were no personnel in the services of the Bank for the whole year, who were in receipt of remuneration of over Rs 60 lakh per annum. Further, no personnel, who were in the service of the Bank for part of the year, received remuneration in excess of Rs 5 lakh per month for the period they were in the service of the Bank.

The provisions of Section 217(1)(e) of the Act relating to conservation of energy and technology absorption do not apply to your Bank.

Directors' Responsibility Statement

The Board of Directors hereby declares and confirms that:

i. in the preparation of accounts, the applicable accounting standards had been followed along with proper explanation relating to material departure.

ii. the Directors had adopted 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 your Bank at the end of accounting year and of the profit or loss of your Bank for that year.

iii. the Directors had taken proper and sufficient care for the maintenance of adequate accounting records, in accordance with the regulatory provisions, for safeguarding the assets of your Bank and for preventing and detecting fraud and other irregularities.

iv. the Directors had prepared the accounts on a going concern basis.

Acknowledgements

The Board of Directors of your Bank accords immense value to the direction, co-operation and guidance extended by Government of India, Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority (IRDA) and all other Statutory/ Regulatory Authorities. The Board also acknowledges the co- operation and support rendered by the State Governments and other banking/financial institutions. The Board thanks various multilateral institutions and international banks/ institutions for their periodic support. The Board takes this opportunity to thank all its shareholders and customers for extending their support during the year and looks forward to their continued association in the years ahead. During the financial year, the Bank has received various recognitions and accolades for its excellence in banking domain. The Board indeed is thankful to all such organizations/agencies for their appreciation to the Bank's efforts. The Board appreciates the sincere and devoted services displayed by its entire staff and highly values their commitment in improving your Bank's performance.



Place : Mumbai R. M. Malla

Date : April 19, 2011 Chairman & Managing Director


Mar 31, 2010

The Board of Directors of your Bank has the pleasure of presenting its Report on the business and operations of your Bank for the financial year ended March 31, 2010.

Performance of your Bank improved significantly on many fronts primarily enabled by measures like organizational restructuring, strategic policy changes and improved monitoring mechanisms. During the financial year 2009-10, business of the Bank, comprising deposits and advances, crossed Rs.3,00,000 crore. Aggregate deposits of your Bank reached Rs.1,67,667 crore with a growth of 49.2% and total advances were Rs.1,38,202 crore recording a growth of 33.6%. Performance highlights of your Bank for the period under review are presented in Tabid.

Profit and Appropriations

With interest income of Rs.15,272.6 crore and other income of Rs.2,290.9 crore, gross income of your Bank

Table.1. Financial Highlights

(Rs.crore)

Particulars

As at year-end 2008-09 2009-10

Capital 724.8 724.9

Reserves & Surplus 8,699.1 9,440.0

Deposits 1,12,401.0 1,67,667.0

Borrowings 44,417.0 47,709.5

Other Liabilities & Provisions 6,160.4 8,030.6

Total Liabilities 1,72,402.3 2,33,572.0

Cash & Balances with RBI 8,591.5 13,903.5

Balances with Banks and 2,627.8 679.4 Money at Call & Short Notice

Investments 50,047.6 73,345.4

Advances 1,03,444.5 1,38,201.8

Fixed & Other Assets 7,690.9 7,441.9

Total Assets 1,72,402.3 2,33,572.0

For the period 2008-09 2009-10

Total Income 13,021.6 17,563.5

Total Expenses (other than 11,643.7 14,836.6 provisions)

Provisions (other than tax) 392.3 682.2

Profit Before Tax 985.6 1,044.7

Provision for Tax 127.1 13.6*

Profit After Tax 858.5 1,031.1



*Net of Current Income Tax of Rs. 346.3 crore and Deferred Income Tax of Rs.(-)332.7 crore

increased to Rs.17,563.5 crore during the financial year April 2009 - March 2010. Total expenditure of your Bank during FY 2009-10, excluding provisions and contingencies, came to Rs.14,836.6 crore, consisting Rs.13,005.2 crore of interest expenses and Rs.1,831.4 crore of operational expenses. With the provision of Rs.978.7 crore towards bad & doubtful debts and investments, Rs.599.3 crore towards restructured assets, Rs.104.2 crore towards incremental prudential provisions for standard assets, and Rs.13.6 crore towards tax, total provisions during the period amounted to Rs.1,695.8 crore.

Your Banks working during the year resulted in a Profit Before Tax (PBT) of Rs.1,044.7 crore. Considering a provision of Rs.346.3 crore towards taxation and deferred tax credit of Rs.332.7 crore, Profit After Tax (PAT) amounted to Rs. 1,031.1 crore. Appropriation of PAT as approved by the Board of Directors is given in Table 2.

Table.2.Appropriation of Profits

(Rs.crore) Particulars 2008-09 2009-10

Net Profit/(Loss) for the year 858.5 1,031.1

Profit/(Loss) brought forward 21.0 71.2

Profit available for 879.5 1,102.3 appropriations

Appropriations

Transferred to Statutory 215.0 258.0 Reserve

Transferred to Capital 106.3 - Reserve

Transferred to General 250.0 100.0 Reserve

Transferred to Special 25.0 25.0 Reserve created and maintained u/s 36(1)(viii) of IT Act, 1961

Dividend

- Equity Shares 181.2 217.4

- Tax on Dividend 30.8 31.5

Balance of Profit carried to 71.2 470.4





Balance Sheet

For each share with face value of Rs.10, Earning Per Share (EPS) during the year stood at Rs.14.2 and Book Value Per Share stood at Rs. 113.1 as at end-March 2010. The Directors have the pleasure of recommending dividend at 30% on the fully paid-up equity capital for the financial year 2009-10.

Capital Adequacy

Your Bank is Basel-ll compliant and therefore, computes its Capital to Risk-weighted Assets Ratio (CRAR) in adherence to norms prescribed by RBI in this regard. Credit Risk is computed using the Standardized Approach, Market Risk is arrived by using Duration Method of Standardized Approach and Operational Risk exposure is based on Basic

Indicator Approach. Against the stipulated RBI norm of 9% for total CRAR and 6% for core CRAR, your Banks total CRAR worked out to 11.31 % with Tier-I CRAR of 6.24% as at end-March 2010.

Business Strategy

Your Bank has followed a strategy of deepening and widening its existing relationships in the large corporate sector, while gradually widening its client base in the mid- corporate sector. Simultaneously, special emphasis was laid on quick expansion of its base in the SME segment which has a large potential both for asset as well as liability relationships. Retail base would be steadily expanded commensurate with expansion in branch network and development of stable back office systems. Investment Banking continued to be a focus area which contributed significantly to growth in fee based income.

New Business Initiatives

A series of innovative steps were introduced during the financial year in line with Banks strategy. The Bank began its overseas operations by opening its first foreign branch in Dubai. A dedicated Institutional Liability & Product Development team has been set up, presenting customized value added current account products, to bolster current account. Several new products were developed with added features, namely Salary Account with Overdraft Facility and Scheme for providing Subordinated Debt. Also existing products for lending to Commercial Real Estate Sector & NBFCs and Mibor Linked Loans have been modified to make them more competitive.

In line with its vision of being the global financial conglomerate, your Bank during the fiscal has floated a wholly owned Asset Management Company (AMC) to undertake Mutual Fund (MF) business. The AMC has already launched its first product "IDBI Nifty Index Fund" during May 2010.

In order to explore value in financing infrastructure and develop associated synergy, your Bank proposes to float a subsidiary/JV to undertake private equity business. In this direction, your Bank has approached RBI for necessary approval.

During the financial year 2009-10, your Bank has opened a currency chest at Panchkula taking the total number of currency chest to five. The Bank is planning to set up some more Currency Chests in coming years commensurate with the expansion of branch network and growth of business.

Your Bank opened its first Cash Processing Centre (CPC) at Mulund, Mumbai, during the financial year 2009-10, which is offering support to 63 branches located in and around Mumbai, by providing processed cash and ATM fit notes. The second CPC has been made operative at New Delhi since March 17, 2010. Encouraged by good client response for these two CPCs, the Bank is in the process of setting up few more CPCs during 2010-11.

Your Banks Centralized Operations received the coveted ISO 9001:2008 certificate of registration in July 2009. ISO 9001:2008 is an international quality management standard developed for companies to demonstrate their ability to provide services that meet statutory and regulatory requirements and implement a planned quality management system. The certification is only awarded to companies those ensure stringent regulations for quality management systems and demonstrate highly effective operational processes, commitment to continuous quality improvement and a focus on customer satisfaction. Being among the worlds few companies and the only Centralized Operations in the country to receive the newly updated

ISO 9001:2008 certification demonstrates IDBI Banks robust systems and continued commitment to quality in the operations and back-office processes.

Organizational Structure

Your Bank is currently organized on the lines of "customer focused vertical" model which was introduced in the previous year. The model has achieved significant success in enhancing customer relationship management, improving credit delivery and bringing sharper focus on profitable business.

Your Bank opened 199 new branches, including Specialized Corporate Branches during the financial year, taking the total number of domestic branches to 708 as on March 31, 2010. Of these, 210 are located in Metropolitan centres, 281 in urban centres, 144 in semi-urban centres and 73 in rural centres. Further, 30 existing branches have been relocated and another 40 branches have been renovated to bring them on par with look and feel of other branches of the Bank. The Bank has continued thrust on expanding branch network to support its strategy to build larger customer base, improved customer service and higher CASA contribution. In addition, the Bank has the plan of increasing the number of Specialized Corporate Branches and Loan Processing Centers in retail segments.

Board of Directors

Banks Board of Directors is broad based and constitution thereof is governed by the provisions of the Banking Regulation Act, 1949, the Companies Act, 1956, the Articles of Association of the Bank and satisfies the requirements of corporate governance as envisaged in the Listing Agreement with the Stock Exchanges. The Board functions through itself as well as various Board Committees constituted to provide focussed governance in important functional areas of the Bank.

As on March 31, 2010, the Board comprised of 10 Directors with 2 Executive Directors (including Chairman), two Non Executive Directors and six Independent Directors. Shri Yogesh Agarwal, Chairman & Managing Director as Executive Chairman, Shri B.P. Singh, Dy. Managing

Director as Wholetime Director, Shri G.C. Chaturvedi and Shri R.P. Singh, Central Government officials as Non Executive Directors, Shri Analjit Singh, Smt. Lila Firoz Poonawalla, Shri K. Narasimha Murthy, Shri H.L. Zutshi, Shri SubhashTuli and Dr. Sailendra Narain as Independent Directors constitute the Board.

No Director on the Board of your Bank is in any way related to any other Director on the Board of the Bank.

Apex Committees

The Board has in total eight committees, namely, Executive Committee, Audit Committee, Shareholders/Investors Grievance Committee, Frauds Monitoring Committee, Risk Management Committee, Customer Service Committee, Information Technology Committee and Remuneration Committee.

Corporate Governance

Your Bank is committed to adopting the best practices in the area of corporate governance. Your Bank believes that proper corporate governance is not just a requirement for regulatory compliance, but also a facilitator for enhancement of shareholders value. The details of corporate governance practices followed in your Bank are given in this Annual Report as a separate section under Management Discussion and Analysis.

Disclosure regarding Remuneration of Employees under Section 217(2A) of the Companies Act, 1956

There were no personnel in the services of the Bank for the whole year, who were in receipt of remuneration of over Rs.24 lakh per annum. Further, no personnel, who were

in the service of the Bank for part of the year, received remuneration in excess of Rs.2 lakh per month for the period they were in the service of the Bank.

The provisions of Section 21 7(1 )(e) of the Act relating to conversion of energy and technology absorption do not apply to your Bank.

Directors Responsibility Statement

The Board of Directors hereby declares and confirms that:

i. in the preparation of accounts, the applicable accounting standards had been followed along with proper explanation relating to material departure.

ii. the Directors had adapted 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 your Bank at the end of the accounting year and of the profit or loss of your Bank for that period.

iii. the Directors had taken proper and sufficient care for the maintenance of adequate accounting records, in accordance with the regulatory provisions, for safeguardingthe assets of your Bank and for preventing and detecting fraud and other irregularities.

iv. the Directors had prepared the accounts on a going concern basis.

Acknowledgements

The Board of Directors of your Bank acknowledges the direction, co-operation and guidance extended by Government of India, Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority (IRDA) and all other Statutory/Regulatory Authorities. The Board places its sincere thanks to the State Governments and other banking/ financial institutions for their cooperation and support. The Board expresses deep sense of appreciation to various multilateral institutions and international banks/ institutions for their timely support. The Board takes this opportunity to thank all its shareholders and customers for extending their support during the year and looks forward to their continued association in the years ahead. The Board highly applauds the commitment and responsible services displayed by the Banks employee in taking up the Bank to its prominent position.

Place : Mumbai Yogesh Agarwal

Date : April 30, 2010 Chairman & Managing Director



 
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