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Directors Report of Indian Bank

Mar 31, 2023

Your Directors have immense pleasure in presenting the Bank’s Annual Report along with the Audited Statement of Accounts and the Cash Flow statement for the year ended 31st March 2023.

FINANCIAL HIGHLIGHTS

The major highlights of your Bank’s performance during FY23 are as follows:

A. Resource mobilization & Advances:

(Amount '' in Cr)

Particulars

31.03.22

31.03.23

YoY (%)

Domestic Deposits

584661

608027

4.00

Of which Current

35969

35366

-1.68

Savings

211120

224873

6.51

CASA

247089

260239

5.32

CASA Mix (%)

42.26

42.80

54 bps

Overseas Deposits

8957

13139

46.68

Global Deposits

593618

621166

4.64

Domestic Advances (Gross)

395698

443921

12.19

Overseas Advances (Gross)

19927

29665

48.87

Total Advances (Gross)

415625

473586

13.95

Total Business

1009242

1094752

8.47

Total Assets

671668

710501

5.78

1. Global Deposits grew by 4.64% YoY and stood at '' 6,21,166 Cr in March 2023.

2. Domestic CASA increased to ''2,60,239 Cr registering a growth of 5.32% YoY. In order to augment the CASA portfolio, Bank has mobilised 38,98,084 new CASA accounts (excluding BSBD Savings account) during FY23.

3. Gross Advances of the Bank (Global) grew by 13.95% YoY and stood at ''4,73,586 Cr as on March 31, 2023 from ''4,15,625 Cr as March 31, 2022.

4. Priority Sector Advances were at ''1,52,992 Cr as on March 31, 2023. Priority sector as a percentage to Adjusted Net Bank Credit (ANBC) for FY23 stood at 44.26% as against the mandatory target of 40%.

5. Agriculture Credit (Priority Sector) was at ''66,607 Cr and as a percentage to ANBC the same stood at 19.27% as against the mandatory target of 18%.

6. All mandatory targets stipulated by RBI have been surpassed during FY23.

7. Gross NPA and Net NPA reduced to ''28,180 Cr (5.95%) and ''4,043 Cr (0.90%) respectively as on March 31, 2023 as against ''35,214 Cr (8.47%) and ''8,849 Cr (2.27%) respectively in March 31, 2022.

8. Total recovery of NPAs (including recovery in AUC accounts and MoI) during FY23 amounted to ''7,358 Cr as against ''5,542 Cr in the previous year.

9. Recovery in bad debts amounted to ''2,177 Cr during FY23 as against ''1,612 Cr in during FY22.

10. Provision Coverage Ratio (PCR) of the Bank improved by 644 bps to 93.82% in FY23 as against 87.38% in FY22.

11. As on 31st March 2023, Bank has a network of 5,787 domestic branches, 3 overseas branches and

1 IFSC Banking unit (GIFT City), taking the total branch network to 5,791.

12. Total number of Bank’s ATMs and BNAs stood at 4929 which include 591 offsite ATMs/BNAs and

2 mobile ATMs.

13. 2914 Passbook Kiosks have been installed by Bank as on 31st March 2023.

B. INCOME AND EXPENDITURE

(Amount '' in Cr)

Particulars

31.03.22

31.03.23

YoY (%)

Interest Earned

38856

44942

15.66

Interest Expended

22128

24717

11.70

Net Interest Income (nii)

16728

20225

20.91

Other Income

6915

7143

3.30

Of which - Fee Income

2555

2969

16.20

Profit on sale of Investments

1626

381

-76.57

Recovery of bad debts

1612

2177

35.05

(Amount '' in Cr)

Particulars

31.03.22

31.03.23

YoY (%)

Operating Revenue (NII Other income)

23643

27369

15.75

Operating Expenses

10926

12098

10.72

Of which - Employee Expenses

6695

7527

12.41

Other operating Expenses

4231

4571

8.01

Operating Profit

12717

15271

20.08

Provisions

8772

9989

13.87

Of which - Provisions for NPA (inclusive of NPI)

8557

6921

-19.11

Provision for

Standard

advances

962

2295

139

Provision for Tax

(741)

633

-

Net profit

3945

5282

33.89

As on March 31, 2023,

1. Total income of the Bank increased by 13.79% and stood at ''52,085 Cr, with Interest Income at ''44,942 Cr and other Income at ''7,143 Cr.

2. Bank’s total expenditure inceased by 11.37% and stood at ''36,185 Cr with Interest Expenditure at ''24,717 Cr and Operating expenses at ''12,098 Cr.

3. Bank’s Operating Profit and Net Profit witnessed an increase of 20% and 34% respectively and stood at ''15,271 Cr and ''5,282 Cr respectively. (For FY22 the same were at ''12,717 Cr and ''3,945 Cr respectively).

C. Key Ratios for Mar''23 are as under:

(in %o)

Parameters

31.03.22

31.03.23

Yield on Advances

721

7.76

Cost of Deposits

3.97

4.09

Return on Assets

0.63

0.77

Return on Equity

12.13

14.73

Net Interest Margin

2.93

3.37

Cost Income ratio

4621

44.20

Average Business per employee ('' in lakh)

2252

2355

Profit per employee ('' in lakh)

9.91

12.95

D. NETWORTH AND CRAR

1. Networth of the Bank stood at ''37,431 Cr as on March 31, 2023 as against ''33,625 Cr in March 31, 2022.

2. As per Basel III norms, the Capital to Risk

weighted Assets Ratio (CRAR) was at 16.49% as on March 31, 2023, compared to 16.53% in

March 31, 2022 and as against the regulatory requirement of 11.50%. The CET- I ratio was at 12.89% as against 12.53% in March 31, 2022 and the minimum requirement of 8.00%. The CRAR of Tier I capital was at 13.48% as of March 31, 2023.

(in %)

BASEL III

As on

31.03.2022

31.03.2023

CET- I

12.53

12.89

Tier- I Capital

13.17

13.48

Tier-II Capital

3.36

3.01

Total

16.53

16.49

E. RECRUITMENT / TRAINING

As per Government guidelines, pre-recruitment and pre-promotion trainings were offered to SC/ST employees during the process of direct recruitment and internal promotions.

F. CHANGES IN THE BOARD DURING THE YEAR:

All the Directors have been appointed/nominated by the Govt. of India (GOI) except Shareholder Directors.

• Shri Sanjeev Kaushik was GoI Nominee Director of the Bank upto 13.09.2022. Government of India, Ministry of Finance, Department of Financial Services, vide notification dated 14.09.2022 nominated Dr. M P Tangirala as GoI Nominee Director of the Bank in place of Shri Sanjeev Kaushik.

• Shri Mahesh Kumar Bajajwas appointed as Executive Director of the Bank vide Government of India, Ministry of Finance, Department of Financial Services, notification dated 21.11.2022.

G. DIRECTORS'' RESPONSIBILITY STATEMENT

The Directors confirm that in the preparation of the

annual accounts for the year ended March 31, 2023: -

1. The applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

2. The accounting policies framed in accordance with the guidelines of the Reserve Bank of India, were consistently applied;

3. Reasonable and prudent judgment and estimates were made so as to give a true and fair view on the state of affairs of the Bank at the end of the financial year and profit of the Bank for the year ended March 31, 2023.

4. Proper and sufficient care were taken for the maintenance of adequate accounting records in accordance with the provisions of applicable laws governing banks in India; and

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

H. ACKNOWLEDGEMENT

The Board expresses its deep sense of gratitude to the Government of India, State Governments, Reserve Bank of India and Securities & Exchange Board of India for the valuable guidance and support received from them. The Board also thanks the financial institutions and correspondent Banks for their co-operation and support. The Board acknowledges the unstinted support of its customers and shareholders.

The Board places on record its appreciation for the valuable contribution made by Shri. Sanjeev Kaushik who ceased to be member during the year.

The Board also places on record its appreciation for the dedicated services and contribution made by members of staff for the overall performance of the Bank.

For and on behalf of Board of Directors

S L JAIN

MANAGING DIRECTOR & CHIEF EXECUTIVE OFFICER


Mar 31, 2022

Your Directors have immense pleasure in presenting the Bank''s Annual Report along with the Audited Statement of Accounts and the Cash Flow statement for the year ended 31st March 2022.

FINANCIAL HIGHLIGHTS

The major highlights of your Bank''s performance during FY22 are as follows:

A. Resource mobilization &Advances:

('' in Cr)

Particulars

31.03.21

31.03.22

YoY (%)

Domestic Deposits

529264

584661

10.47

Of which Current

31861

35969

12.89

Savings

195166

211120

8.17

CASA

227027

247089

8.84

CASA Mix (%)

42.89

42.26

-63 bps

Overseas Deposits

8807

8957

1.70

Global Deposits

538071

593618

10.32

Domestic Advances (Gross)

379537

395698

4.26

Overseas Advances (Gross)

10780

19927

84.85

Total Advances (Gross)

390317

415625

6.48

Total Business

928388

1009242

8.71

Total Assets

626005

671668

7.29

1. Global Deposits grew by 10.32% YoY and stood at '' 5,93,618 Cr in March 2022.

2. Domestic CASA increased to '' 2,47,089 Cr registering a growth of 8.84% YoY. In order to augment the CASA portfolio, Bank has mobilised 40,87,902 new CASA accounts during FY22.

3. Bank''s Domestic Term Deposits posted a growth of 11.69% in FY22 as against 6.92% in FY21.

4. GrossAdvances of the Bank increased by 6.48% on a YoY basis to '' 4,15,625 Cr as on March 31, 2022 from '' 3,90,317 Cr as on March 31,2021.

5. Priority Sector Advances were at '' 1,48,806 Cr as on March 31, 2022. Priority sector as a percentage to Adjusted Net Bank Credit (ANBC) for FY22 stood at 45.47% as against the mandatory target of 40.00%.

6. Agriculture Credit (Priority Sector) was at'' 68,936 Cr and the percentage to quarterly ANBC stood at 21% as against the mandatory target of 18.00%.

7. All mandatory targets stipulated by RBI have been surpassed during FY22.

8. Gross NPAand Net NPA reduced to '' 35,214 Cr (8.47%) and '' 8,849 Cr (2.27%) respectively as on March 31,2022 as against'' 38,455 Cr (9.85%) and '' 12,271 Cr (3.37%) respectively in March 31,2021.

9. Total recovery of NPAs (including recovery in AUC accounts) during FY22 amounted to '' 5,087 Cr as against '' 4,477 Crinthe previous year.

10. Recovery in AUC accounts amounted to '' 1,612 Cr during FY 22 as against'' 618 Cr in during FY 21.

11. Provision Coverage Ratio (PCR) of the Bank improved by 526 bps to 87.38% in FY 22 as against 82.12% in FY21.

12. Bank has a network of 5,732 domestic branches as on March 31, 2022 and 3 overseas branches, taking the total branch network to 5,735.

13. Total number of Bank''s ATMs and BNAs stood at 4,925 which include 624 offsiteATMs/BNAs and 3 mobileATMs.

14. 1969 Passbook Kiosks have been installed by the Bank as on 31st March 2022.

B. INCOME AND EXPENDITURE ('' in Cr)

Particulars

31.03.21

31.03.22

YoY (%)

Interest Earned

39106

38856

-0.64

Interest Expended

23440

22128

-5.60

Net Interest Income (NII)

15666

16728

6.78

Other Income

5650

6915

22.39

Of which- Fee Income

2368

2555

7.90

Profit on sale of Investments

2124

1626

-23.45

Recovery of bad debts

618

1612

160.84

Operating Revenue (NII Other income)

21316

23643

10.92

Operating Expenses

10349

10926

5.58

Of which Employee Expenses

6378

6695

4.97

Other operating Expenses

3971

4231

6.55

Operating Profit

10967

12717

15.96

Provisions

7962

8772

10.17

Of which Provisions for NPA (inclusive of NPI)

7318

8557

16.93

Provision for Standard advances

469

962

105.12

Provision for Tax

(99)

(741)

-

Net profit

3005

3945

31.28

As on March 31,2022,

1. Total income of the Bank increased by 2% and stood at '' 45,771 Cr, with Interest Income at'' 38,856 Cr and other Income at'' 6,915 Cr.

2. Bank''s Total Expenditure contracted by 2.17% and stood at'' 33,054 Cr with Interest Expenditure at'' 22,128 Cr and Operating expenses at'' 10,926 Cr

3. Bank''s Operating Profit and Net Profit witnessed an increase of 16% and 31% respectively and stood at '' 12,717 Cr and '' 3,945 Cr respectively. (For FY21 the same was at'' 10,967 Crand '' 3,005 Cr respectively).

C. Key Ratios for Mar’22 are as under:

(in %)

Parameters

Mar’21

Mar’22

Yield on Advances

7.45

7.21

Cost of Deposits

4.44

3.97

Return on Assets

0.50

0.63

Return on Equity

10.63

12.13

Net Interest Margin

2.81

2.93

Cost Income ratio

48.55

46.21

Average Business per employee ('' in lakh)

2077

2252

Profit per employee ('' in lakh)

7.22

9.91

D. NETWORTH AND CRAR

1. Networth of the Bank stood at '' 33,625 Cr as on March 31,2022 as against'' 29,812 Cr in March 31,2021.

2. As per Basel III norms, the Capital to Risk weighted Assets Ratio (CRAR) was at 16.53% as on March 31, 2022, compared to 15.71% in March 31,2021 and as against the regulatory requirement of 11.50%. The CET- I ratio was at 12.53% as against 11.27% in March 31, 2021 and the minimum requirement of 8.00%. The CRAR of Tier I capital was at 13.17% as of March 31,2022.

3. During the year, Bank raised Equity capital of'' 1,650 Cr through Qualified Institutional Placement (QIP). Government holding has come down from 88.06% as on March 31,2021 to 79.86% as on March 31,2022.

(in %)

BASEL III

As on

Mar’21

Mar’22

CET- I

11.27

12.53

Tier- I Capital

11.93

13.17

Tier-II Capital

3.78

3.36

TOTAL

15.71

16.53

E. RECRUITMENT /TRAINING

As per Government guidelines, pre-recruitment and prepromotion trainings were offered to SC/ST employees during the process of direct recruitment and internal promotions.

F. CHANGES IN THE BOARD DURING THEYEAR:

All the Directors have been appointed/nominated by the Govt. of India (GOI) except Shareholder Directors.

1. Shri Shanti Lal Jain assumed charge as Managing Director and Chief Executive Officer of the Bank from 01.09.2021 vide Government of India, Ministry of Finance, Department of Financial Services, notification dated 26.08.2021.

2. Shri Ashwani Kumar assumed charge as Executive Director of the Bank from 21.10.2021 vide Government of India, Ministry of Finance, Department of Financial Services, Notification dated 21.10.2021.

3. Ms.Papia Sengupta was elected as shareholder Director of the Bank for a period of three years from 29.10.2021.

4. Shri.Balmukund Sahay was nominated as Part-time Non official Director of the Bank for a period of three years vide Government of India, Ministry of Finance, Department of Financial Services, notification dated 21.12.2021.

5. Shri Vishvesh Kumar Goel was nominated as Part-time Non official Director of the Bank for a period of three years vide Government of India, Ministry of Finance, Department of Financial Services, notification dated 21.12.2021.

6. Government of India, Ministry of Finance, Department of Financial Services, notification dated 08.03.2022 nominated Dr. Aditya Gaiha as RBI Nominee Director in the place of Shri S K Panigrahy. Shri S. K. Panigrahy was RBI Nominee Director upto 07.03.2022.

7. Shri K Ramachandran was Executive Director of the Bank till 30.06.2021

8. The three-year term of Ms. Padmaja Chunduru as Managing Director and Chief Executive Officer of the Bank ended on 31.08.2021.

9. The term of Shri V V Shenoy as Executive Director of the Bank ended on 31.03.2022 on his superannuation.

G. DIRECTORS’ RESPONSIBILITYSTATEMENT

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

March 31,2022:

1. The applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

2. The accounting policies framed in accordance with the guidelines of the Reserve Bank of India, were consistently applied;

3. Reasonable and prudent judgment and estimates were made so as to give a true and fair view on the state of affairs of the Bank at the end of the financial year and profit of the Bank for the year ended March 31,2022.

4. Proper and sufficient care were taken for the maintenance of adequate accounting records in accordance with the provisions of applicable laws governing banks in India; and

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

H. ACKNOWLEDGEMENT

The Board expresses its deep sense of gratitude to the Government of India, State Governments, Reserve Bank of India and Securities & Exchange Board of India for the valuable guidance and support received from them. The Board also thanks the financial institutions and correspondent Banks for their co-operation and support. The Board acknowledges the unstinted support of its customers and shareholders.

The Board places on record its appreciation for the valuable contribution made by Ms. Padmaja Chunduru, Shri K Ramachandran, Shri S. K. Panigrahy, and Shri V V Shenoy who ceased to be members during the year.

The Board places on record its appreciation for the dedicated services and contribution made by members of staff for the overall performance of the Bank.


Mar 31, 2019

To

The Members,

The Directors have immense pleasure in presenting the Bank’s Annual Report along with the Audited Statement of Accounts and the Cash Flow statement for the year ended 31s’March 2019.

FINANCIALHIGHLIGHTS

FY 2018-19 ended on an encouraging note with a YOY growth of 16%. Global business touched Rs.4.30 lakh crore mark, contributed by 16.2% growth in deposits and 15.5% in advances. The loan book growth was broad-based which led to appreciable increase in interest income. There were challenges on asset quality front which led to increased provisioning requirement and consequent impact on Net Profit. Having taken all necessary steps to align with regulatory and audit requirements during the past year, the path ahead is clear and bright.

As per RBI data as on 29th March 2019, the aggregate deposits and advances of ASCBs have grown by 13.15% and 17.02% respectively. In comparison, Bank’s deposits and advances had grown at 20.37% and 20.83% respectively. The market share of the Bank has went up from 1.75% to 1.88% in deposits and from 1.80% to 1.83% in advances.

Bank was among the top 4 positions in respect of key parameters like Business (Deposits & Advances growth), Profitability (Interest/Total income, ROA and Net Profit to business), Asset Quality (Gross/Net NPA ratios) and Productivity (Costto Income ratio).

The major highlights of your Bank’s performance during FY 2018-19 are as follows:

- Global Business of the Bank reached Rs.4,29,972 Cr during the year, registering a growth of 15.89%.

- Global Deposits reached Rs.2,42,076 Cr with a growth of 16.22% and Global Advances reached Rs.1,87,896 Cr with a growth of 15.47%. Overall Credit-Deposit ratio was at 77.62%.

- Priority Sector Advances reached Rs.66,847 Cr and as a percentage to Adjusted Net Bank Credit (ANBC) was 41.93% as against the mandatory target of 40.00%.

- Agriculture Credit (priority sector) was at Rs.31,748 Cr and as a percentage to ANBC stood at 19.91% as against the mandatory target of 18.00%.

- Domestic Net Interest Margin was at 3.00%.

- Total income increased by 7.93% to Rs.21,067.71 Cr, with Interest income growing by 12.1% to reach Rs.19,184.82 Cr and other Income at Rs.1882.89 Cr.

- Net interest income grew by 12.05% and was at Rs.7,018.10 Cr

- Operating Profit was Rs.4880.62 Cr and Net Profit was Rs.321.95 Cr (Rs.1258.99 Cr for FY 2017-18).

- Return on Average Assets was at 0.12% and Return on Net worth was at 2.00%.

- Capital Adequacy Ratio (Basel III)wasat 13.21% (12.55% for FY 2017-18).

- Total recovery of NPAs during FY 2018-19 amounted to Rs.1808 Cr as against Rs.910 Cr in the previous year.

- Earnings per share were at Rs.6.70 and Book value was at Rs.328.64.

- Total domestic branch network of the Bank in India increased to 2872 as on 31.03.2019 from 2820 as on 31.03.2018. Besides, the Bank has 3 overseas branches, taking the total branch networkto2875.

- Total number of ATMs increased to 2849 as on 31.03.2019 from 2846 as on 31.03.2018, which includes 653 offsite ATMs, 5 mobile ATMs. Apart from the above, Bank has 1043 BNAs as on 31.03.2019 which includes 43 off site BNAs.

- Passbook Kiosks have been installed at 481 locations as on31.03.2019.

KEY RATIOS FOR THEPERIOD2018-19

(in %)

Parameters

2018-19

2017-18

Yield on Advances

8.45

8.50

Cost of Deposits

5.28

5.30

Return on Assets

0.12

0.53

Cost Income ratio

45.17

42.31

Business per employee (‘ in lakh)

2174.26

1856.40

Profit per employee (‘ in lakh)

1.64

6.34

Gross NPA (in %)

7.11

7.37

Net NPA (in %)

3.75

3.81

OTHER SIGNIFICANT ACHIEVEMENTS:

FY 2018-19 witnessed several other positive developments viz.,

- Successful issue of Basel III compliant Tier II bonds for Rs.1,000 crore,

- Bank designated as an exclusive banker for Direct benefit transfer under major Government schemes, both in the State of Tamil Nadu and UT of Puducherry.

- Successfully on boarded on all the three TReDs platforms for MSME bill discounting.

- Adjudged ‘Top performing Bank’ for multiple scheme payments’ under PFMS, 2nd highest among PSBs and 5th among all Banks in ATM transactions, Mobile Banking Transactions recorded 4-fold increase and highest Rupay Platinum card issuer among all banks.

- Bank continued to win coveted awards from NABARD, PFRDA, Government of India and Tamilnadu Government for its performance and initiatives in Financial Literacy, SHG Bank Linkage, Priority Sector Lending, Technology for Social Banking, APY, PMSBY etc.

- Formation of Tamil Nadu Grama Bank under Bank’s sponsorship with the successful amalgamation of Pandyan Grama Bank, an RRB sponsored by IOB with our own Pallavan Grama Bank.

NET WORTH AND CRAR:

- Networth of the Bank stood at Rs.15,784.53 Cr (Rs.15,826.98 Cr as on 31.03.2018)

(in %)

BASEL III

As on

March 2019

March 2018

CET- I

10.96 #

11.00

Tier- I Capital

11.29

11.33

Tier-II Capital

1.92

1.22

Total

13.21 *

12.55

(As against the requirement of # 7.375% and *10.875% respectively)

RECRUITMENT/TRAINING

- As per Government guidelines, pre-recruitment and prepromotion trainings were offered to SC/ST employees during the process of direct recruitment and internal promotions.

CHANGES IN THE BOARD DURING THEYEAR:

All the Directors have been appointed/nominated by the Govt. of India (GOI) except Shareholder Directors.

- Smt. Padmaja Chunduru assumed charge as MD&CEO of the Bank on 21.09.2018.

- Shri Kishor Kharat was MD &CEO of the Bank upto 13.08.2018.

- Shri AS Rajeev was Executive Director of the Bankupto 30.11.2018.

- Shri. V V Shenoy assumed charge as Executive Director on 01.12.2018.

- Ms Mudita Mishra was Government Nominee Director of the Bank upto 04.04.2018.

- Mr Amit Agrawal was nominated as the Govt. of India Nominee Director from 05.04.2018.

- Shri T C Venkat Subramanian was Part-Time NonOfficial Director as well as Non-Executive Chairman of the Bank upto 13.08.2018.

DIRECTORS’ RESPONSIBILITY STATEMENT

The Directors confirm that in the preparation of the annual accounts for the year ended March 31,2019: -

- The applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

- The accounting policies framed in accordance with the guidelines of the Reserve Bank of India, were consistently applied;

- Reasonable and prudent judgment and estimates were made so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit of the Bankfor the year ended March 31,2019.

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

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

ACKNOWLEDGEMENT

The Board expresses its deep sense of gratitude to the Government of India, Reserve Bank of India and Securities & Exchange Board of India for the valuable guidance and support received from them. The Board also thanks the financial institutions and correspondent banks for their cooperation and support. The Board acknowledges the unstinted support of its customers and shareholders.

The Board places on record its appreciation for the valuable contribution made by Shri. T.C.Venkat Subramanian, Shri. A.S.Rajeev, Ms. Mudita Mishra, who ceased to be members during the year.

The Board also places on record its appreciation for the valuable contribution made by Shri. Kishor Kharat, MD & CEO who demitted office on 13.08.2018.

The Board places on record its appreciation for the dedicated services and contribution made by members of staff for the overall performance of the Bank.

For and on behalf of Board of Directors

PADMAJA CHUNDURU

MANAGING DIRECTOR &

CHIEF EXECUTIVE OFFICER


Mar 31, 2018

DIRECTORS'' REPORT 2017-18

To

The Members,

The Directors have immense pleasure in presenting the Bank''s Annual Report along with the Audited Statement of Accounts and the Cash Flow statement for the year ended 31st March 2018.

FINANCIAL HIGHLIGHTS

The major highlights of your Bank''s performance during

FY 2017-18 are as follows:

- Global Business of the Bank reached Rs,3,71,020 crore during the year, registering a growth of 17.91%.

- Total Deposits grew by Rs, 25785 crore (14.13%) for the financial year 2017-18 to Rs, 2,08,294 crore.

- Gross Advances stood at Rs,1,62,726 crore as on 31.03.2018. Overall Credit-Deposit ratio was at 78.12%.

- Priority Sector Advances was at Rs, 63,036 crore as on

31.03.2018. Priority sector as a percentage to quarterly average Adjusted Net Bank Credit (ANBC) for 2017-18 stood at 47.08% as against the mandatory target of 40.00%.

- Agriculture Credit (priority sector) was at Rs, 27,383 crore and the percentage to quarterly average ANBC stood at 20.91% as against the mandatory target of 18.00%.

- Net Interest Margin was at 2.90% for FY 2017-18.

- Operating Profit increased to Rs,5000.99 crore as against Rs,4000.71 crorefor FY2016-17.

- Net Profit for FY 2017-18 was at Rs,1258.99 crore as compared to Rs,1405.68 crore for 2016-17.

- Return on AverageAssets was at 0.53% for FY 2017-18 as against 0.67%for FY 2016-17.

- Capital Adequacy Ratio (Basel III) was at 12.55% as at March 31, 2018 as compared to 13.64% as at March 31,2017.

- Return on Net worth for FY 2017-18 was at 8.27%, as compared to 9.97% in FY2016-17.

- Gross NPAwas at 7.37% as on March 31,2018 as against 7.47% as on March 31, 2017 while Net NPAwas at 3.81% as on March 31, 2018 as against 4.39% as on March 31,2017.

- Total recovery of NPAs during FY 2017-18 amounted to Rs,910 crore as against Rs,846 crore in the previous year.

- Earnings per share was at Rs,26.21 and Book value was at Rs, 329.53 as on 31.03.2018.

- Total domestic branch network of the Bank in India increased to 2820 as on 31.03.2018 from 2679 as on

31.03.2017. Besides, the Bank has 3 overseas branches, taking the total branch network to 2823.

- Total number ofATMs increased to 2846 as on 31.03.2018 from 2816 as on 31.03.2017, which includes 620 offsite ATMs, 6 mobile ATMs. Apart from the above, Bank has 553 BNAs as on 31.03.2018 which includes 25 off site BNAs.

- Passbook Kiosk have been installed at 481 locations as on

31.03.2018 as against 256 locations as on 31.03.2017.

- In order to improve and enhance the security of ATM transactions carried out through the BankRs,s debit cards, Bank has implemented Dynamic Key Exchange (DKE) for NFS transactions. The PIN entered by the customer during an ATM transaction is encrypted to form Pin Block and transmitted over the network issued by NPCI.

INCOMEAND EXPENDITURE

- During the year 2017-18, total income of the Bank increased by 6.95% to Rs,19,519.49 crore, with Interest Income at Rs,17,113.65 crore and other Income at Rs, 2405.84 crore.

- The Bank''s total expenditure increased marginally by Rs,268.09 crore (1.88%) to Rs,14,518.50 crore during FY 2017-18.

- Total operating expenses was at Rs,3668.40 crore for FY 2017-18 as compared to Rs,3,356.73 crore in FY 2016-17.

IMPORTANT RATIOS FOR THE PERIOD OF 2017-18 ARE

ASUNDER:

(in %)

Parameters

2017-18

2016-17

Yield on Advances

8.50

9.17

Cost of Deposits

5.30

6.03

Return on Assets

0.53

0.67

Cost Income ratio

42.31

45.62

Business per employee (Rs, in lakh)

1856.40

1487.73

Profit per employee (Rs, in lakh)

6.34

6.72

DIVIDEND

- The Board of Directors have recommended a dividend of 60% for FY 2017-18. The dividend shall be subject to tax on dividend to be paid by the Bank. The total outflow on account of dividend for FY 2017-18 is Rs,288.17 crore, excluding dividend tax. The payout ratio works out to 22.89%.

- Networth of the Bank improved to Rs,15826.98 crore as on

31.03.2018 from Rs,14,461.59 crore as on 31.03.2017, registering a growth of 9.44%.

- As per Basel III norms, the Capital to RiskweightedAssets Ratio (CRAR) was at 12.55% as on 31st March 2018, compared to 13.64% as of 31st March 2017 and as against the requirement of 10.875%. The CET-1 ratio was 11.00% as of 31st March 2018 as compared to 11.82% as of 31st March 2017 and against the minimum requirement of 7.375%. The CRAR of Tier I capital was 11.33% as of 31st March 2018 as against 12.20% as of31st March 2017.

(in %)

BASEL III

As on

March 2018

March 2017

CET- I

11.00

11.82

Tier- I Capital

11.33

12.20

Tier-II Capital

1.22

1.44

Total

12.55

13.64

RECRUITMENT/TRAINING

As per Government guidelines, pre-recruitment and prepromotion trainings were offered to SC/ST employees during

the process of direct recruitment and internal promotions.

CHANGES INTHE BOARD DURING THEYEAR

- Shri. Mahesh Kumar Jain was MD&CEO of the Bank upto 03.04.2017.

- Shri. Kishor Kharat assumed charge as MD&CEO of the Bank on 04.04.2017.

- Shri. Sriram Ramachandran was shareholder director of the Bank upto 30.06.2017.

- Shri. Vinok Kumar Nagar was shareholder director of the bank upto 30.06.2017 and was re-elected as shareholder director from 01.07.2017.

- Dr Bharath Krishna Sankar was elected as shareholder director of the Bank from 21.12.2017.

- Shri. Salil Kumar Jha was appointed as Non-official Director of the Bank with effect from 27.12.2017.

The Directors confirm that in the preparation of the annual accounts for the year ended March 31,2018: -

- The applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

- The accounting policies framed in accordance with the guidelines of the Reserve Bank of India, were consistently applied;

- Reasonable and prudent judgment and estimates were made so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit of the Bank for the year ended March 31,2018.

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

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

ACKNOWLEDGEMENT

The Board expresses its deep sense of gratitude to the Government of India, Reserve Bank of India and Securities & Exchange Board of India for the valuable guidance and support received from them. The Board also thanks the financial institutions and correspondent banks for their co-operation and support. The Board acknowledges the unstinted support of its customers and shareholders.

The Board places on record its appreciation for the valuable contribution made by Shri. Sriram Ramachandran who ceased to be a member during the year.

The Board places on record its appreciation for the dedicated services and contribution made by members of staff for the overall performance of the Bank.

For and on behalf of Board of Directors

KISHOR KHARAT

MANAGING DIRECTOR & CHIEF EXECUTIVE OFFICER


Mar 31, 2017

DIRECTORS'' REPORT 2016-17

To

The Members,

The Directors have immense pleasure in presenting the Banks Annual Report along with the Audited Statement of Accounts and the Cash Flow statement for the year ended 31st March 2017.

FINANCIAL HIGHLIGHTS

The major highlights of your Bank’s performance during FY 2016-17 are as follows:

- Global Business of the Bank reached Rs,3,14,654 crore during the year, registering a growth of 1.20 %.

- Total Deposits grew by Rs,4223 crore (2.37%) for the financial year2016-17 to Rs,1,82,509 crore.

- Gross Advances stood at Rs,1,32,145 crore as on 31.03.2017. Overall Credit-Deposit ratio was at 72.40 %.

- Priority Sector Advances was at Rs,54,976 crore as on 31.03.2017. Priority sector as a percentage to quarterly average Adjusted Net Bank Credit (ANBC) for 2016-17 stood at 42.31% as against the mandatory target of 40.00%.

- Agriculture Credit was at Rs,24,820 crore and the percentage to quarterly average ANBC stood at 19.95% as against the mandatory target of 18.00%.

- In accordance with the priorities accorded by the Government of India, the Banks Advances to SC/STs reached Rs,2244.86 crore as of March 31,2017, constituting 4.08% of total Priority Sector Advances.

- Net Interest Margin was at 2.59% for FY 2016-17.

- Operating Profit increased to Rs,4000.71 crore as against Rs,3032.09 crore for FY2015-16.

- Net Profit for FY 2016-17 was at Rs,1405.68 crore as compared to Rs,711.38 crore for 2015-16.

- Return on Average Assets was at 0.67% for FY2016-17 as against 0.36% for FY 2015-16.

- Capital Adequacy Ratio (Basel III) was at 13.64% as at March 31, 2017 as compared to 13.20% as at March 31,2016.

- Return on Net worth for FY 2016-17 was at 9.97%, as compared to 5.46% in FY2015-16.

- Gross NPAwas at 7.47% as on March 31,2017 as against 6.66% as on March 31, 2016 while Net NPA was at 4.39 % as on March 31, 2017 as against 4.20% as on March 31,2016.

- Total recovery of NPAs during FY 2016-17 amounted to Rs, 846 crore as against Rs,901 crore in the previous year.

- Earnings per share were at Rs,29.27 and Book value was at Rs,301.10 as on 31.03.2017.

- Total domestic branch network of the Bank in India increased to 2679 as on 31.03.2017 from 2562 as on 31.03.2016. Besides, the Bank has 3 overseas branches, taking the total branch network to 2682.

- Total number ofATMs increased to 2816 as on 31.03.2017 from 2531 as on 31.03.2016, which includes 716 offsite ATMs and customers can access more than 2.1 lakhATMs in the (NFS) shared network.

- During the year, Bank deployed 289 Cash Deposit Machines/Bunch Note Acceptors with recycling functionality, wherein the machines can receive and dispense cash to the customers. Bank installed 122 e-lounges at various locations, which are unmanned kiosks with BNAs, secured pass book printers and cheque deposit machines with 24 x 7 operations on all days including holidays.

INCOMEAND EXPENDITURE

- During the year 2016-17 total income of the Bank increased by 1.25% to Rs,18,251.12 crore, with Interest Income at Rs,16,039.75 crore and other Income at Rs,2211.37 crore.

- The Bank s total expenditure decreased by Rs,742.70 crore (-4.95%) to Rs,14,250.41 croreduringFY2016-17.

- Total operating expenses was at Rs,3,356.73 crore for FY2016-17 as compared to Rs,3,195.51 crore in FY2015-16.

IMPORTANT RATIOS FOR THE PERIOD OF 2016-17 ARE

ASUNDER:

(in %)

Parameters

2016-17

2015-16

Yield on Advances

9.17

9.63

Cost of Deposits

6.03

6.76

Return on Assets

0.67

0.36

Cost Income ratio

45.62

51.31

Business per employee (Rs, in lakh)

1487.73

1531.19

Profit per employee (Rs, in lakh)

6.72

3.53

DIVIDEND

- The Board of Directors have recommended a dividend of 60% for FY 2016-17. The dividend shall be subject to tax on dividend to be paid by the Bank. The total outflow on account of dividend for FY 2016-17 is Rs,288.17 crore, excluding dividend tax. The payout ratio works out to 20.50%.

NETWORTH AND CRAR

- Networth of the Bank improved to Rs,14,461.59 crore as on

31.03.2017 from Rs,13,478.35 crore as on 31.03.2016, registering a growth of 7.29%.

- As per Basel III norms, the Capital to RiskweightedAssets Ratio (CRAR) was at 13.64% as on March 2017, compared to 13.20% as of March 2016, against the requirement of 10.25%. The CET-1 ratio was 11.82% as of March 2017 as compared to 11.68% as of March 2016 and against the minimum requirement of 6.75%. The CRAR of Tier I capital was 12.20% as of March 2017 as against 12.08% as of March 2016 and as against the minimum requirement of 8.25%.

(in %)

BASEL III

As on

March 2017

March 2016

CET- I

11.82

11.68

Tier- I Capital

12.20

12.08

Tier-II Capital

1.44

1.12

Total

13.64

13.20

RECRUITMENT/TRAINING

As per Government guidelines, pre-recruitment and

pre-promotion trainings were offered to SC/ST employees

during the process of direct recruitmentand internal promotions.

CHANGES IN THE BOARD DURING THEYEAR

- Shri Padmanaban Vittal Dass was nominated as a Part Time Non-Official Director on the Board of the Bank by Government of India for a period of three years with effect from April 25, 2016.

- Shri P Venkata Krishna Rao was Workmen Employee Director upto May 28,2016.

- Shri Vijay Kumar Goel was appointed as Chartered Accountant Director of the Bank from July 26,2016.

- Shri. R Subramania Kumar was Executive Director upto September 29,2016.

- Shri J K Dash was appointed as RBI nominee to the Board on November 16,2016 in place of Shri B PVijayendra who ceased to be RBI Nominee Director from October 31,2016.

- During the period under review, Shri. M K Bhattacharya assumed charge as Executive Directoron February 16,2017.

- Shri Deepak D Samant was Officer Employee Director upto March 10,2017.

DIRECTORSRESPONSIBILITYSTATEMENT

The Directors confirm that in the preparation of the annual accounts for the year ended March 31,2017:

- The applicable accounting standards have been followed along with proper explanation relating to material departures, ifany;

- The accounting policies framed in accordance with the guidelines of the Reserve Bank of India, were consistently applied;

- Reasonable and prudent judgment and estimates were made so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit of the Bankfor the year ended March 31,2017.

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

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

ACKNOWLEDGEMENT

The Board expresses its deep sense of gratitude to the Government of India, Reserve Bank of India and Securities & Exchange Board of India for the valuable guidance and support received from them. The Board also thanks the financial institutions and correspondent banks for their co-operation and support. The Board acknowledges the unstinted support of its customers and shareholders.

The Board places on record its appreciation for the valuable contribution made by Shri R Subramania Kumar, Shri B P Vijayendra, Shri P Venkata Krishna Rao and Shri Deepak D Samant who ceased to be members during the year.

The Board also places on record its appreciation for the valuable contribution made by Shri Mahesh Kumar Jain, MD & CEO who demitted office on April 03,2017.

The Board places on record its appreciation for the dedicated services and contribution made by members of staff for the overall performance of the Bank.

For and on behalf of Board of Directors

KISHOR KHARAT

Managing Director & CEO


Mar 31, 2015

The Members,

The Directors have immense pleasure in presenting the Bank''s Annual Report along with the Audited Statement of Accounts and the Cash Flow statement for the year ended 31 st March 2015.

FINANCIAL HIGHLIGHTS

The major highlights of your Bank''s performance during FY 2014-15 are as follows:

- Global Business of the Bank reached Rs. 2,98,056.96 crore during the year, registering a growth of 3.99 per cent.

- Total Deposits grew by Rs. 6 ,950.45 crore, or 4.28 per cent to Rs. 1,69,225.27 crore.

- Gross Advances at f1,28,831.69 crore, registered an increase of Rs.4 ,473.04 crore (3.60 per cent) as on 31.03.2015. Overall Credit-Deposit ratio was at 76.13 per cent.

- Priority Sector Advances at Rs.47,336.60 crore, grew by Rs.6 ,062.32 crore (14.69 per cent) as on 31.03.2015 and was 40.42 per cent of ANBC

- Agriculture Credit grew by Rs. 4,514.04 crore (23.55 per cent) to Rs.23,678.97 crore and accounted for 20.22 per cent of Adjusted Net Bank Credit (ANBC).

- In accordance with the priorities accorded by the Government of India, the Bank''s Advances to SC/STs reached Rs.2,149.41 crore as of 31st March 2015, constituting 5.06 per cent of total Priority Sector Advances.

- NetInterestMarginwasat2.50percentin FY2014-15.

- Operating Profit increased to Rs.3 ,013.71 crore as against Rs.2 ,900.60 crore in FY 2013-14, registering a growth of 3.90 per cent.

- Net Profit for FY 2014-15 was at Rs.1 ,005.17 crore as compared to Rs.1 ,158.95 crore for 2013-14.

- Return on Average Assets was at 0.54 per cent.

- Capital Adequacy Ratio (BASEL III) was at 12.86 percent as compared to 12.64 per cent as of March 2014.

- Return on Net worth for FY 2014-15 was at 8.34 percent, as compared to 10.22 per cent in FY2013-14.

- Gross NPAwas at 4.40 per cent as against 3.67 per cent in March 2014 while Net NPAwas at 2.50 per cent as against 2.26 per cent in March 2014.

- Total recovery of NPAs during FY 2014-15 amounted to Rs.753.74 crore as against Rs.625.13 crore in the previous year.

- Earnings per share were at Rs.21.62 and Book value was at Rs.261.46 during 2014-15.

- Total domestic branch network of the Bank in India increased to 2409 as on 31.03.2015. Besides, the Bank has 3 overseas branches, taking the total Branch Network to 2412.

- Total number of ATMs increased to 2344, which includes 599 offsite ATMs and customers can access more than 1,90,371 lakh ATMs in the shared network.

INCOME AND EXPENDITURE

- During the year, total income of the Bank increased by 3.58 per cent to Rs.17,216.28 crore, with interest income at Rs.15,852.93 crore.

- Net interest income at Rs.4 ,461.28 crore, registered a growth of 2.31 percent.

- The Bank''s total expenditure was at Rs.14,202.57 crore with interest expenditure at f 11 ,391.65 crore, an increase of Rs.502.86 crore or4.62 percent.

- Total operating expenses declined to Rs.2 ,810.92 crore for FY 2014-15 as compared to Rs.2 ,831.50 crore in FY 2013-14.

IMPORTANT RATIOS FOR THE PERIOD 2014-15 ARE AS UNDER:

(in per cent) Parameters 2014-15 2013-14

Yield on Advances 10.19 10.38

Return on Investments 7.31 7.43

Cost of Deposits 7.10 7.15

Return on Assets 0.54 0.67

Cost Income ratio 48.26 49.40

Business per employee (Rs. in lakh) 1443.40 1452.85

Profit per employee (Rs. in lakh) 4.95 5.97

DIVIDEND

- The Board of Directors has recommended a dividend of 42 per cent for FY 2014-15. The dividend shall be subject to tax on dividend to be paid by the Bank. The total outflow on account of dividend for FY 2014-15 is Rs.201.72 crore, excluding dividend tax. The payout ratio works out to 20.07 percent.

INFUSION OF EXTRA CAPITAL BY GOVERNMENT OF INDIA

- Hitherto, the Government of India was infusing capital into those banks that were having equity erosion. For FY 2014-15, Government adopted new criteria in which only banks which are more efficient would be rewarded with extra capital for their equity so that they can further strengthen their position.

- The efficiency parameter was based on the weighted average of return on assets (ROA) for all Public Sector Banks for the last three years and banks above the average have been selected for the equity infusion. The second parameter for capital infusion was return on equity (ROE) for the last financial year.

- Accordingly, Government of India infused capital of Rs.280 crore to Indian Bank. Following this infusion, Government holding in Indian Bank has gone up to 82.10 per cent.

- Out of this Rs.280 crore, Rs.15.44 crore was transferred to Share Capital Account and the remaining to Share PremiumAccount.

NET WORTH AND CRAR

- Networth of the Bank improved to Rs.12 ,557.73 crore as on 31.03.2015 from Rs.11535.58 crore as on 31.03.2014, registering a growth of 8.86 per cent.

- As per Basel III norms, the Capital to Risk weighted Assets Ratio (CRAR) was at 12.86 per cent as on March 2015, compared to 12.64 per cent as of March 2014, against the requirement of 9 per cent. The CRAR of Tier I capital was 10.61 per cent as of March 2015 as against 10.24 per cent asof March2014.

(in per cent) As on BASEL III March 2015 March 2014

Tier- I Capital 10.61 10.24

Tier-II Capital 2.25 2.40

Total 12.86 12.64

RECRUITMENT/TRAINING

- As per Government guidelines, during the process of direct recruitment and internal promotions, pre-recruitment and pre-promotion trainings were offered to SC/ST employees.

CHANGES IN THE BOARD DURING THE YEAR

- Dr N Srinivasa Rao was appointed as Government Nominee Director to the Board on November 25, 2014 in place of Smt. Sudha Krishnan who ceased to be Director from November24,2014.

- Shri B P Vijayendra was appointed as RBI nominee

Director to the Board on February 23, 2015 in place of Dr. Sathyan David who ceased to be Director from February 22,2015.

- Shri Vinod Kumar Nagar was appointed as Share Holder Director to the Board on July 01, 2014 in place of Shri. Chintaman Mahadeo Dixit who ceased to be Share Holder Director to the Board from June 30,2014.

- Shri Sriram Ramachandran was appointed as Share Holder Director to the Board on July 01, 2014 in place of Prof. Narendra Kumar Agrawal who ceased to be Share Holder Director to the Board from June 30,2014.

- Shri. Sanjay Maken ceased to be Non-Official Director to the Board from August 10,2014.

- Shri. Amarjit Chopra ceased to be Chartered Accountant Director to the Board from August 28,2014.

- Shri M Butchi Rami Reddy ceased to be Non-Official Director to the Board from September 21,2014.

DIRECTORS''RESPONSIBILITY STATEMENT

The Directors'' confirm that in the preparation of the annual accounts for the year ended March 31,2015: -

- The applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

- The accounting policies framed in accordance with the guidelines of the Reserve Bank of India, were consistently applied;

- Reasonable and prudent judgment and estimates were made so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit oftheBankforthe year ended March 31,2015.

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

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

ACKNOWLEDGEMENT

The Board expresses its deep sense of gratitude to the Government of India, Reserve Bank of India and Securities & Exchange Board of India for the valuable guidance and support received from them. The Board also thanks the financial institutions and correspondent banks for their co-operation and support. The Board acknowledges the unstinted support of its customers and shareholders. The Board places on record its appreciation for the valuable contribution made by Smt. Sudha Krishnan, Dr. Sathyan David, Shri. Chintaman Mahadeo Dixit, Prof. Narendra Kumar Agarwal, Shri. Sanjay Maken, Shri. Amarjit Chopra and Shri. M Butchi Rami Reddy, who ceased to be members during the year. The Board places on record its appreciation of the dedicated services and contribution made by members of staff for the overall performance of the Bank.

For and on behalf of Board of Directors MANAGING DIRECTOR AND CHIEF EXECUTIVE OFFICER


Mar 31, 2014

The Directors have immense pleasure in presenting the Bank''s Eighth Annual Report of your Bank along with the Audited Statement of Accounts and the Cash Flow statement for the year ended 31st March 2014.

FINANCIAL HIGHLIGHTS

The major highlights of your Bank''s performance are as under:

- Global Business of the Bank reached Rs. 286,633 crore during the year, registering a growth of 15.1 per cent.

- Total Deposits grew by Rs. 20,295 crore, or 14.3 per cent for the year 2013-14 toRs.162,275 crore.

- Gross Advances at Rs. 124,359 crore, registered an increase of Rs. 17,203 crore (16.1 per cent) as on 31.3.2014. Overall Credit-Deposit ratio was at 76.63 per cent.

- Priority Sector Advances atRs.41,157 crore, grew byRs.4736 crore (13.0 per cent) as on 31.3.2014.

- Agriculture Credit grew by Rs. 2046 crore (12.0 per cent) to Rs.19,047 crore and accounted for 18.8 per cent of Adjusted Net Bank Credit (ANBC).

- In accordance with the priorities accorded by the Government of India, the Bank''s Advances to SC/ST reached Rs. 2165 crore as of 31st March 2014, constituting 5.25 per cent of total Priority Sector Advances.

- Net Interest Margin was at 2.60 per cent in FY 2013-14.

- Operating Profit was at Rs. 2901 crore, while Net Profit for FY 2013-14 was atRs.1159 crore.

- Return on Average Assets was at 0.67 per cent.

- Capital Adequacy Ratio (Basel II) was at 13.1 per cent.

- Return on Net worth for FY 2013-14 was at 10.22 per cent.

- Gross NPA was at 3.67 per cent as against 3.33 per cent in March 2013 while Net NPA was unchanged at 2.26 per cent in March 2014.

- Total recovery of NPAs (including AUC) during FY 2013-14 amounted to Rs. 625 crore as against Rs. 653 crore in the previous year.

- Earnings per share were at Rs. 26.07 and Book value per share was atRs.248.16 as of end-March 2014.

- Total domestic branch network of the Bank in India increased to 2250 as on 31.3.2014 and all the branches are under CBS. Besides, the Bank has 3 overseas branches.

- Total number of ATMs increased to 2123, which includes 511 offsite ATMs and customers can access more than 1.63 lakh ATMs in the shared network.

INCOME AND EXPENDITURE

- During the year, total income of the Bank increased by 9.5 per cent to Rs. 16,621 crore, with interest income constituting Rs. 15,249 crore. Growth in interest income was at 9.7 per cent.

- Net interest income was at Rs.4360 crore .

- On the Expenditure front, the Bank''s interest expenditure was at Rs. 10,889 crore, a growth of 16.2 per cent.

- Total Operating expenses at Rs. 2831 crore for FY 2013-14 has shown an increase of 2.93 per cent.

IMPORTANT RATIOS FOR THE PERIOD 2013-14 ARE AS UNDER:

(in per cent)

Particulars 2013-14 2012-13

Return on Average Assets 0.67 1.02

Average Cost of Funds 6.27 6.06

Average Yield on Advances 10.38 11.04

Net Interest Margin 2.60 3.09

Cost-Income Ratio 4940 4733

Book Value per Shared(Rs) 248.16 242.89

Business per employee(Rs.in lakh) 1452.85 1300.98

Profit per employees(Rs.in lakh) 5.97 8.38

DIVIDEND

- The Board of Directors has recommended a dividend of 47 per cent for FY 2013-14. The dividend shall be subject to tax on dividend to be paid by the Bank. The total outflow on account of dividend for FY 2013-14 is Rs. 243.2 crore, excluding dividend tax. The payout ratio works out to 20.2 per cent.

CONVERSION OF PERPETUAL NON CUMULATIVE PREFERENCE SHARES INTO EQUITY SHARES ALLOTTED TO GOVERNMENT OF INDIA

- The Bank after obtaining permission from Government of India (GoI) converted Perpetual Non Cumulative Preference Shares (PNCPS) of Rs. 400 crore (held by GoI) into equity shares.

- Bank made a preferential allotment of 3,50,78,488 equity shares of face value Rs. 10 each at Rs. 114.03 per share (including premium of Rs. 104.03) to GoI on February 10, 2014.

- Following the conversion, the Government holding in the Bank has gone up to 81.51 per cent (37,88,98,488 equity shares) from 80 per cent (34,38,20,000 equity shares).

NETWORTH AND CRAR

- Net worth of the Bank improved to Rs. 11535.58 crore as on 31.3.2014 from Rs. 10838.84 crore as on 31.3.2013, registering a growth of 6.43 per cent.

- As per Basel II norms, the Capital to Risk weighted Assets Ratio (CRAR) was at 13.10 per cent as on March 2014, compared to 13.08 per cent as of March 2013, against the requirement of 9 per cent. CRAR of Tier I capital was 10.51 per cent as of March 2014 as against 10.88 per cent in the previous year.

- As per Basel III norms, CRAR was at 12.64 per cent for March 2014 and Tier- I capital was at 10.24 per cent.

(in per cent) BASEL II As on BASEL III March 2014 March 2013 March 2014

Tier-I capital 10.51 10.88 Tier-I Capital 10.24 Tier-II Capital 2.69 2.20 Tier-II Capital 2.40 Total 13.10 13.08 Total 12.64

CHANGES IN THE BOARD DURING THE YEAR

- During the period under review, Shri. Mahesh Kumar Jain assumed charge as Executive Director on September 2013.

- Shri. Rajeev Rishi, Executive Director demitted office on July 31st 2013 on his elevation as Chairman and Managing Director, Central Bank of India.

- Smt. Sudha Krishnan was appointed as Government of India nominee to the Board on July 26th 2013 in place of

Dr. Rajat Bhargava who ceased to be Director from July 25th 2013.

- Dr. Sathyan David was appointed as RBI nominee to the Board on May 31st 2013 in place of Dr. N. Krishna Mohan who ceased to be Director from May 30th 2013.

- Shri P Venkata Krishna Rao was appointed as Workmen Employee Director on May 29th 2013 in place of Shri. M. Jayanath who ceased to be Director from April 29th 2013.

- Shri. Deepak D.Samant was appointed as Officers'' Employee Director to the Board on March 11th 2014.

DIRECTORS'' RESPONSIBILITY STATEMENT

The Directors confirm that in the preparation of the annual accounts for the year ended March 31, 2014 -

- The applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

- The accounting policies framed in accordance with the guidelines of the Reserve Bank of India, were consistently applied;

- Reasonable and prudent judgment and estimates were made so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit of the Bank for the year ended March 31, 2014.

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

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

ACKNOWLEDGEMENT

The Board expresses its deep sense of gratitude to the Government of India, Reserve Bank of India and Securities & Exchange Board of India for the valuable guidance and support received from them. The Board also thanks the financial institutions and correspondent banks for their co-operation and support. The Board acknowledges the unstinted support of its customers and shareholders.

The Board places on record its sincere appreciation of the valuable contribution made by Shri. Rajeev Rishi as Executive Director of the Bank from 01.10.2010 to 31.07.2013.

The Board places on record its appreciation of the valuable contribution made by Dr. Rajat Bhargava, Dr. N. Krishna Mohan, and Shri. M. Jayanath who ceased to be members during the year.

The Board places on record its appreciation of the dedicated services and contribution made by members of staff for the overall performance of the Bank.

For and on behalf of Board of Directors

CHAIRMAN AND MANAGING DIRECTOR


Mar 31, 2012

The Directors have great pleasure in presenting the Bank's Annual Report along with the Audited Statement of Accounts and the Cash Flow statement for the year ended 31st March 2012.

Financial Highlights

The major highlights of the Bank's performance are as follows:

-- Operating profit increased to Rs 3463.17 crore as against Rs 3291.68 crore for 2010-11.

-- Net profit for 2011-12 stood at Rs 1746.97 crore as compared to Rs 1714.07 crore for 2010-11.

-- Net Interest Margin was at 3.43 per cent.

-- Return on average assets was at 1.31 per cent.

-- Capital Adequacy Ratio was at 13.47 per cent as compared to 13.56 per cent as of March 2011.

-- Return on Net worth for FY2011-12 was at 18.73 per cent.

-- Earnings per share was at Rs 39.57 and Book value per share was Rs 214.94 during 2011-12.

-- Global Business of the Bank reached Rs 2,11,988 crore during the year, registering a growth of 16.8 per cent.

-- Total Deposits grew by Rs 15,000 crore to Rs 1,20,804 crore, a growth of 14.2 per cent for the year 2011-12.

-- Gross Advances were at Rs 91,184 crore, registering an increase of Rs 15,458 crore (20.4 per cent) as on 31.3.2012. Overall Credit Deposit ratio was at 75.5 per cent.

-- Priority Sector advances at Rs 30,027 crore, grew by Rs 4,058 crore (15.6 per cent).

-- Agriculture credit grew by Rs 2,306 crore (20.9 per cent) to Rs 13,354 crore and accounted for 18.47 per cent of Adjusted Net Bank Credit.

-- During 2011-12, total recovery of NPAs (including AUC) amounted to Rs 466.26 crore.

-- Gross NPA was at 2.03 per cent and Net NPA was at 1.33 per cent in March 2012.

-- Under Financial Inclusion project 5.98 lakh 'No-Frill' accounts have been opened.

-- Total domestic branch network of the Bank in India increased to 1955 as on 31.3.2012 and all the branches are under CBS. Besides, the Bank has 3 overseas branches.

-- Total number of ATMs increased to 1280, which included 357 offsite ATMs and customers can access more than 89,000 ATMs in the shared network.

Income and Expenditure

-- During the year, total income of the Bank increased to Rs 13,463 crore with interest income at Rs 12,231 crore.

-- Net interest income at Rs 4418 crore registered a growth of 9.5 per cent.

-- On the Expenditure side, the Bank's interest expenditure was at Rs 7813 crore, an increase of Rs 2488 crore or 46.7 per cent.

-- Total operating expenses at Rs 2187 crore for 2011-12 has shown an increase of Rs 260.67 crore or 13.53 per cent, when compared to Rs 1926.33 crore in 2010-11.

The income and expenditure for the period 2011-12 are given hereunder:

(Rs in crore) 2010-11 2011-12 Growth particulars Actuals Absolute %

Total Interest Income 9361.03 12231.32 2870.29 30.7

Total Interest Expenditure 5324.91 7813.32 2488.41 46.7

Net Interest Income 4036.12 4418.00 381.88 9.5

Net Operating Income 5218.01 5650.17 432.15 8.3

Operating Expenses 1926.33 2187.00 260.67 13.5

Operating Profit 3291.68 3463.17 171.49 5.2

Provisions & Contingencies 1577.61 1716.20 138.60 8.8 including depreciation on account of transfer of securities to HTM category

Net Profit 1714.07 1746.97 32.9 1.9

IMPORTANT RATIOS

(in per cent)

parameters 2010-11 2011-12

Yield on Advances 10.28 11.28

Yield on Investment 6.94 7.29

Cost of Deposits 5.41 6.68

Return on Assets 1.53 1.31

Cost Income ratio 36.92 38.71

Business per employee (Rs in lakh) 929.75 1114.23

Profit per employee (Rs in lakh) 8.88 9.30

DIVIDEND

-- The Board of Directors has recommended a dividend of 75 per cent for FY 2011-12. The dividend for financial year 2011-12 shall be subject to tax on dividend to be paid by the Bank. The total outflow on account of dividend for FY 2011-12 is Rs 362.33 crore excluding dividend tax. The total dividend payout ratio works out to 20.74% per cent.

NET WORTH AND CRAR

-- The Net worth of the Bank improved to Rs 9637.41 crore as on 31.3.2012 from Rs8326.55 crore as on 31.03.2011, reflecting a growth of 12.5 per cent

-- As per Basel II, the Capital to Risk weighted Assets Ratio (CRAR) is 13.47 per cent as of March 2012, compared to 13.56 per cent as of March 2011, against the requirement of 9 per cent.

-- The CRAR of Tier I capital was 11.13 per cent as of March 2012 as against 11.02 per cent as of March 2011.

(in per cent) As on March 2011 March 2012

Tier-I Capital 11.02 11.13

Tier-II Capital 2.54 2.34

Total 13.56 13.47

-- In accordance with the priorities accorded by the Government of India, the BankRss Advances to SC/STs reached Rs 2231 crore as on 31st March 2012 constituting

7.4 per cent of total Priority Sector advances.

-- Also, as per Government guidelines, during the process of direct recruitment and internal promotions, pre- recruitment and pre-promotion trainings were offered to SC/ST employees.

CHANGES IN THE BOARD DURING THE YEAR

-- During the period under review, Shri B Raj Kumar as- sumed charge as Executive Director with effect from January 1, 2012.

-- Shri. V RamaGopal, Executive Director demitted office on December 31, 2011 on superannuation.

-- Dr. N Krishna Mohan was appointed as the RBI nomi- nee to the Board on May 30, 2011. Shri Amarjit Chopra, Chartered Accountant, Part time Non Official Director was appointed on August 29, 2011. Shri Sanjay Maken and Shri Butchi Rami Reddy were appointed as Part time Non Official Directors on August 11, 2011 and on September 22, 2011 respectively.

-- Shri Chintaman Mahadeo Dixit was appointed Share- holder Director on July 01, 2011.

-- Shri S Karuppasamy and Shri. C K Ranganathan were Directors of the Bank upto 30.05.2011 and 30.06.2011 respectively.

DIRECTORS' RESpONSIBILITY STATEMENT:

The Directors confirm that in the preparation of the annual accounts for the year ended March 31, 2012 -

-- The applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

-- The accounting policies framed in accordance with the guidelines of the Reserve Bank of India, were consistently applied;

-- Reasonable and prudent judgment and estimates were made so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit of the Bank for the year ended March 31, 2012.

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

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

ACKNOWLEDGEMENT

The Board expresses its deep sense of gratitude to the Government of India, Reserve Bank of India and Securities & Exchange Board of India for the valuable guidance and support received from them. The Board also thanks the financial institutions and correspondent banks for their co-operation and support. The Board acknowledges the unstinted support of its customers and shareholders.

The Board places on record its sincere appreciation of the valuable contribution made by Shri V RamaGopal, as Executive Director of the Bank from 01.04.2011 to 31.12.2011.

The Board places on record its appreciation of the valuable contribution made by Shri S Karuppasamy and Shri. C K Ranganathan who ceased to be members during the year.

The Board places on record its appreciation of the dedicated services and contribution made by members of staff for the overall performance of the Bank.



For and on behalf of Board of Directors

CHAIRMAN AND MANAGING DIRECTOR


Mar 31, 2011

The Directors have great pleasure in presenting the Banks Annual Report along with the Audited Statement of Accounts and the Cash flow statement for the year ended 31st March 2011.

Financial Highlights

The Bank took forward its growth story and the major highlights are as follows:

- Operating profit increased to Rs.3291.7 crore as against Rs.2747.4 crore for 2009-10 registering a growth of 19.8 per cent.

Net profit for 2010-11 crossed the Rs.1700 crore mark and was at Rs.1714.1 crore as compared to Rs.1555 crore for 2009-10, showing a growth of 10.2 per cent.

- Net Interest Margin improved to 3.75 per cent from 3.55 per cent.

- Return on average assets was at 1.53 per cent.

- Capital Adequacy Ratio was at 13.56 per cent as compared to 12.71 per cent as of March 2010.

Return on Net worth for 2010-11 was at 21.50 per cent.

- Earnings per share was at Rs.38.79 and Book value per share was Rs.184.44.

- Global Business of the Bank crossed Rs.180,000 crore during the year and was at Rs.181,530 crore, registering a growth of 20.3 per cent.

Total Deposits grew by Rs.17,576 crore to Rs.105,804 crore, a growth of 19.9 per cent for the year 2010-11.

- Gross Advances were at Rs.75,726 crore, registering an increase of Rs.13,068 crore (20.9 per cent) as on 31.3.2011. Overall Credit Deposit ratio was at 71.6 per cent.

- Priority Sector Advances at Rs.25,969 crore, grew by Rs.4304 crore (19.9 per cent).

- Agriculture Credit grew by Rs.1904 crore (20.8 per cent) to Rs.11,048 crore and accounted for 18.57 per cent of Adjusted Net Bank Credit.

- The Bank scaled new heights in the recovery of NPA. During 2010-11, total recovery of NPA (including AUC) amounted to Rs.756.58 crore as against Rs.587.48 crore last year.

- Gross NPA was at 0.98 per cent as against 0.81 per cent for March 2010 and Net NPA was at 0.53 per cent as against 0.23 per cent in March 2010.

- Under Financial Inclusion project, a total of 1.53 lakh No-Frill accounts have been opened.

- Total domestic branch network of the Bank in India increased to 1860 as on 31.3.2011 and all the branches are under CBS. Besides, the Bank has 3 overseas branches.

- Total number of ATMs increased to 1128, which included 322 offsite ATMs and our customers can have access to 70000 ATMs in the shared network.

Income and Expenditure

- During the year, total income of the Bank increased to Rs.10542.9 crore with a strong growth in interest income to the tune of Rs.9361.0 crore or 21.4 per cent.

- Net interest income registered a rise to Rs.4036 crore (27.7 per cent).

- Core non-interest income increased to Rs.905.65 crore (26.7 per cent).

- On the Expenditure side, the Banks interest expenditure was at Rs.5324.9 crore, an increase of Rs.771.7 crore or 16.9 per cent.

- Total operating expenses at T1926.3 crore for 2010-11 has shown an increase of Rs.196.0 crore, an increase of 11.3 per cent, when compared to the level of Rs.1730.3 crore in 2009-10.

The income and expenditure for the period 2010-11 are given hereunder:

(Rs.. in crore)

Particulars 2009-10 2010-11 Absolute % Growth Growth

Total Interest Income 7714.37 9361.02 1646.65 21.4

Total Interest Expenditure 4553.18 5324.92 771.74 16.9

Net Interest Income 3161.19 4036.12 874.93 27.7

Net Operating Income 4477.60 5217.99 740.39 16.5

Operating Expenses 1730.25 1926.31 196.06 11.3

Operating Profit 2747.35 3291.68 544.33 19.8

Provisions & Contingencies 1192.36 1577.60 385.24 32.3 including depreciation on account of transfer of securities to HTM category

Net Profit 1554.99 1714.07 159.08 10.2

Spread Analysis

- The Banks Net Interest Income improved to Rs.4036 crore in 2010-11 from Rs.3161.2 crore in 2009-10, thereby registering a growth of 27.7 per cent.

- The increase in Interest Income led to an increase in Net Interest Margin to 3.75 per cent as of March 2011.

The Spread analysis is as under:

(Rs.. in crore)

Growth

Parameters 2009-10 2010-11 Absolute %

Interest Spread 3161.19 4036.12 874.93 27.7

Yield on Funds % 8.28 8.35

Cost of Funds % 4.89 4.75

Net Interest 3.55 3.75 Margin %

IMPORTANT RATIOS

(in per cent)

Parameters 2009-10 2010-11

Yield on Advances 10.71 10.28

Yield on Investment 6.35 6.91

Cost of Deposits 5.66 5.41

Return on Assets 1.67 1.53

Cost Income ratio 38.64 36.92

Business per employee (Rs. in lakh) 760.78 929.76

Profit per employee (Rs. in lakh) 7.92 8.88

DIVIDEND

The Board of Directors has recommended a dividend of 75 per cent for 2010-11. The dividend for financial year 2010-11 shall be subject to tax on dividend to be paid by the Bank. The total outflow on account of dividend for 2010-11 is Rs. 362.33 crore including dividend tax. The payout ratio works out to 21.1 per cent.

NET WORTH AND CRAR

- The Net worth of the Bank improved to Rs.8326.55 crore as on 31.3.2011 from n047.02 crore as on 31.03.2010, reflecting a growth of 18.16 per cent due to plough back of profits.

- As per Basel II, the Capital to Risk Weighted Assets Ratio (CRAR) is 13.56 per cent as of March 2011, compared to 12.71 per cent as of March 2010, against the requirement of 9 per cent.

The CRAR of Tier I capital was 11.02 per cent as of March 2011 as against 11.13 per cent as of March 2010.

(in per cent)

As on March 2010 March 2011

Tier-I Capital 11.13 11.02

Tier-ll Capital 1.58 2.54

Total 12.71 13.56

- In accordance with the priorities accorded by the Government of India, the Banks Advances to SC/ST reachedRs.1876.15croreasof31s,March2011 constituting 7.22 per cent of total Priority Sector advances.

- Also, as per Government guidelines, during the process of Direct Recruitment and Internal Promotions, Pre- recruitment and Pre-promotion trainings were offered to SC/ST employees.

- Periodical Quarterly Meetings were conducted and grievances, if any, were resolved then and there. The Cell also ensures prompt disposal of grievances/ representations of SC/ST employees. A Chief Liaison Officer in the rank of General Manager has been nominated for this purpose.

CHANGES IN THE BOARD DURING THE YEAR

During the period under review, Shri Rajeev Rishi assumed charge as Executive Director on October 1, 2010.

Shri. A S Bhattacharya, Executive Director demitted office on September 30, 2010 on his elevation as Chairman & Managing Director, Bank of Maharashtra.

Shri S Karuppasamy, was appointed as the RBI nominee to the Board on July 30, 2010. Shri M Jayanath, was appointed as the Workmen Employee Director of the Bank by the Government of India and assumed charge on April 21,2010.

Shri C R Gopalasundaram, Shri T T Natarajan, Shri G Charath Chandran and Mrs. Saria Khan were Directors of the Bank upto 29.07.2010, 21.11.2010, 13.01.2011 and 30.01.2011 respectively.

DIRECTORS RESPONSIBILITY STATEMENT:

The Directors confirm that in the preparation of the annual accounts for the year ended March 31, 2011 -

- The applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

- The accounting policies framed in accordance with the guidelines of the Reserve Bank of India, were consistently applied;

Reasonable and prudent judgment and estimates were made so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit of the Bank for the year ended March 31, 2011.

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

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

ACKNOWLEDGEMENT

The Board expresses its deep sense of gratitude to the Government of India, Reserve Bank of India and Securities & Exchange Board of India for the valuable guidance and support received from them. The Board also thanks the financial institutions and correspondent banks for their co-operation and support. The Board acknowledges the unstinted support of its customers and shareholders.

The Board places on record its sincere appreciation of the valuable contribution made by Shri A S Bhattacharya as Executive Director of the Bank from 01.04.2010 to 30.09.2010

The Board places on record its appreciation of the valuable contribution made by Shri C R Gopalasundaram, Shri T T Natarajan, Shri G Charath Chandran and Mrs. Saria Khan, who ceased to be members during the year.

The Board places on record its appreciation of the dedicated services and contribution made by members of staff for the overall performance of the Bank.

For and on behalf of Board of Directors CHAIRMAN AND MANAGING DIRECTOR


Mar 31, 2010

The Directors have great pleasure in presenting the Banks Annual Report along with the Audited Statement of Accounts and the Cash flow statement for the year ended 31st March 2010.

Financial Highlights

The Bank took forward its growth story and major highlights are as follows:

- Operating profit increased to Rs. 2747.35 crore as against Rs. 2,055.83 crore for 2008-09 registering a growth of 33.64%.

Net profit for 2009-10 crossed the Rs. 1500 crore mark and was at Rs. 1554.99 crore as compared to Rs. 1245.32 crore for 2008-09, showing a growth of 24.87% in the current year.

- Net Interest Margin improved to 3.71% from 3.54%.

- Return on average assets improved to 1.67% from 1.62% in 2008-09.

- Capital Adequacy Ratio was at 12.71% as compared to 13.98% as of March 2009.

Return on Networth for 2009-10 was at 23.74% as against 23.35% for 2008-09.

- Earnings per share was Rs. 35.09 and Book value per share was Rs. 154.66 during the current year.

- Global Business (Gross) of the Bank crossed Rs. 150000 crore during the year and stood at Rs. 1,50,886 crore registering a growth of 21.28%.

Total Deposits grew by Rs. 15646 crore to Rs. 88228 crore, a growth of 21.56%

- Gross Advances were at Rs. 62658 crore, registering an increase of Rs.10827 crore (20.89%) as on 31.3.2010. Overall Credit Deposit ratio was at 71.02%.

- Priority Sector Advances at Rs. 21665 crore, grew by Rs. 3239 crore ( 17.58%).

Agriculture Credit grew by Rs. 1306 crore ( 16.66%) to Rs.9144 crore and accounted for 18.73% of Adjusted Net Bank Credit (ANBC)

- The Bank scaled new heights in the recovery of NPA. During 2009-10, total recovery of NPA (including AUC) amounted to Rs. 587.48 crore as against Rs. 457.10 crore last year.

Gross NPA was at 0.81% as against 0.89% for March 2009 and Net NPA was at 0.23%.

- Under Financial Inclusion project, a total of 22.31 lakh No-Frills accounts have been opened in 4637 villages. Cumulatively, Overdraft / General Credit Card facility has been allowed in 52678 accounts to the tune of Rs.11.60 crore.

- Total Branch network of the Bank in India increased to 1756 as on 31.3.2010 and all the branches are under CBS.

- Total number of ATMs increased to 1005 which included 274 offsite ATMs and customers can have access to ATMs in the shared network.

Income and Expenditure

- During the year, total income of the Bank increased to Rs. 9030.78 crore with a strong growth in interest income to the tune of Rs. 1026.73 crore or 15.03 %.

- Net interest income registered a rise of Rs.695.36 crore (26.66 %).

- Other Income at Rs. 1173.72 crore registered an increase of 13.33 %.

- On the Expenditure side, the Banks interest expenditure was at Rs. 4553.18 crore an increase of Rs. 331.37 crore or 7.85 %.

- Total operating expenses at Rs. 1730.25 crore for 2009-10 has shown an increase of Rs. 142.12 crore, an increase of 8.92 %, when compared to the level of Rs. 1588.13 crore in 2008-09.

The income and expenditure for the period 2009-10 are given hereunder:

(Rs. in crore)

Particulars 2008-09 2009-10 Absolute % Growth Growth

Total Interest Income 6830.33 7857.06 1026.73 15.03

Total Interest Expenditure 4221.81 4553.18 331.37 7.85

Net Interest Income 2608.52 3303.88 695.36 26.66

Profit on sale of 194.77 217.63 22.86 11.74 Investments

Net Operating Income 3643.96 4477.60 833.64 22.88

Operating Expenses 1588.13 1730.25 142.12 8.95

Operating Profit 2055.83 2747.35 691.52 33.64

Provisions & Contingencies including depreciation on account of transfer of 810.51 1192.36 381.85 47.11 securities to HTM category

Net Profit 1245.32 1554.99 309.67 24.87

Spread Analysis

- The Banks Net Interest income improved to Rs. 3303.88 crore in 2009-10 from Rs. 2608.52 crore in 2008-09, thereby registering a growth of 26.66 %.

- The increase in interest income led to an increase in Net Interest Margin to 3.71% as of March 2010.

The Spread analysis is as under:

(Rs. in crore

Growth

Parameters 2008-09 2009-10 Absolute %

Interest Spread 2608.52 3303.88 659.36 26.66

Yield on Funds 8.90 8.44 %

Cost of Funds 5.50 4.89 %

Net Interest 3.54 3.71 Margin %

IMPORTANT RATIOS

(in per cent)

Parameters 2008-09 2009-10

Yield on Advances 11.02 10.71

Yield on Investment 7.61 6.84

Cost of Deposits 6.27 5.66

Return on Assets 1.62 1.67

Cost Income ratio 43.58 38.64

Business per employee (Rs in lakh) 616.78 760.78

Profit per employee (Rs in lakh) 6.23 7.92

DIVIDEND

- The Board of Directors recommended a dividend of 65% (including the interim dividend of 25%). The dividend for financial year 2009-10 shall be subject to tax on dividend to be paid by the Bank. The total outflow on account of dividend for 2009-10 is Rs.319.35 crore including dividend tax. The payout ratio works out to 20.54%

NETWORTH AND CRAR

- The Networth of the Bank improved to Rs.7047.02 crore as on 31.3.2010 from Rs. 5880.30 crore as on 31.03.2009 reflecting a growth of 19.84% due to plough back of profits.

- As per the Basel II the Capital Risk Weighted Assets Ratio (CRAR) is 12.71% as of March 2010, compared to 13.98% as of March 2009, against the requirement of 9%.

The CRAR of Tier I capital was 11.13% as of March 2010 as against 11.88% as of March 2009.

As on March 2009 March 2010

Tier-I Capital 11.88 11.13

Tier-ll Capital 2.10 1.58

Total 13.98 12.71

In accordance with the priorities accorded by the Government of India, the Banks Advances to SC/ST reached Rs.1667.08 crore as of 31st March 2010 constituting 7.69% of total Priority Sector advances.

Also as per Government guidelines, during the process of Direct Recruitment and Internal Promotions, Pre-recruitment and Pre-promotion trainings were offered to SC/ST candidates.

Periodical Quarterly Meetings were conducted and grievances, if any were resolved then and there. The cell also ensures prompt disposal of grievances/representations of SC/ST employees. A Chief Liaison Officer in the rank of General Manager is nominated for this purpose.

CHANGES IN THE BOARD DURING THE YEAR

During the period under review, Shri V Rama Gopal assumed charge as Executive Director on 07.12.09. Shri Shaktikanta Das and Shri G Charath Chandran joined the Board as Directors on 09.12.09 and 22.12.09 respectively.

Shri. M.S. Sundara Rajan, Chairman and Managing Director laid down office on 31.3.2010 on superannuation. Shri T.M. Bhasin assumed charge as Chairman and Managing Director of the Bank on April 01,2010.

Shri. A Subramanian Executive Director superannuated on June 30, 2009. Shri.P.Sudhakar Reddy, Shri. Ashok Gupta, Dr. G. Sudhakar Rao and Shri. Kumar Sanjay Krishna were Directors of the Bank upto April 03, 2009, September 25,2009, October 12, 2009 and December 08, 2009, respectively. DIRECTORS RESPONSIBILITY STATEMENT:

The Directors confirm that in the preparation of the annual accounts for the year ended March 31, 2010 -

- The applicable accounting standards have been followed along with proper explanation relating to material departures, if any; *

- The accounting policies framed in accordance with the guidelines of the Reserve Bank of India, were consistently applied;

- Reasonable and prudent judgment and estimates were made so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit of the Bank for the year ended March 31, 2010.

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

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

ACKNOWLEDGEMENT

The Board expresses its deep sense of gratitude to the Government of India, Reserve Bank of India and Securities & Exchange Board of India for the valuable guidance and support received from them. The Board also thanks the financial institutions and correspondent banks for their co-operation and support. The Board acknowledges the unstinted support of its customers and shareholders.

The Board places on record its sincere appreciation of the valuable contribution made by Shri M S Sundara Rajan, as Chairman and Managing Director of the Bank from 04.06.2007 to 31.03.2010.

The Board places on record its appreciation for the valuable contribution made by Shri ASubramanian, Shri.P.Sudhakar Reddy, Shri. Ashok Gupta, Dr. G. Sudhakar Rao and Shri.Kumar Sanjay Krishna, who ceased to be members during the year.

The Board placed on record its appreciation of the dedicated services and contribution made by members of staff for the overall performance of the Bank.

For and on behalf of Board of Directors CHAIRMAN AND MANAGING DIRECTOR

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