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Directors Report of Oriental Bank of Commerce

Mar 31, 2015

Dear Members,

The Board of Directors have pleasure in presenting the Bank''s Annual Report along with audited accounts for the year ended 31st March 2015.

1. BUSINESS OPERATIONS

The Business of the Bank stood at Rs. 352048.72 crore as on 31st March, 2015 as against Rs.334254.04 crore in the previous year. Total deposits of the Bank stood at Rs.204009.70 crore and have shown an increase of Rs.10520.74 crore depicting a growth of 5.44%. Cost of deposits stood at 7.69% for the fnancial year 2014-15 as against 7.67% for fnancial year 2013-14. The Bank was cautious in procuring high cost bulk deposits during the year and as a result of the same, the ratio of bulk deposits has decreased from 18.19% as on 31.03.2014 to 15.93% as on 31.03.2015. On the other hand, net advances as at end-March 2015 stood at Rs.145261.30 crore, registering a growth of 4.44%. During the fscal 2014-15, yield on advances has decreased to 11.73% from previous year''s level of 11.94%. However, the Bank has taken measures to improve yield on advances through lending to SME, Mid Corporate and Retail sector which shall improve the yield on advances, in the current year.

The credit deposit ratio of the Bank, as at end-March 2015, stood at 72.59%. The Bank ensured adequate flow of credit to the productive sectors of the economy. The Loans and Advances portfolio of the Bank is well diversifed and balanced.

2. CAPITAL AND RESERVES

The Bank transferred a sum of Rs. 378.80 crore to Reserves (comprising Rs.124 crore transferred to Statutory Reserves, Rs.198 crore to Special Reserve under The Income Tax Act 1961, Rs.3 crore to Revenue and Other Reserves and Rs.53.80 crore to Investment Reserve) out of the Profit for the year 2014-15. With this, capital and reserves as on March 31, 2015 have gone upto Rs.13779.35 crore as against Rs.13430.67 crore as at end March 2014 and the ratio of Capital and Reserves to average working funds stood at 6.36% as on 31.03.2015 as against 6.60% as on 31st March 2014. During the year, the Bank has issued Basel III Compliant Tier II Bonds aggregating to Rs.1000 crore and Basel III Compliant Perpetual Debt Instruments (AT1Bonds) amounting to Rs.500 crore.

3. CAPITAL ADEqUACY RATIO

The Bank''s Capital Risk Weighted Assets Ratio (CRAR) as on 31.03.2015 under Basel III guidelines stood at 11.41% as against 11.01% as on 31.03.2014. The Bank''s Capital Risk Weighted Assets Ratio (CRAR) under Basel II as on 31.03.2015 stood at 12.28% as against 11.85% as on 31.03.2014. This is above the regulatory minimum requirement of 9%.

4. FINANCIAL PERFORMANCE

The Bank has posted a total income of Rs. 22082.78 crore during the year as against Rs. 20962.75 crore last year thus registering an increase of Rs.1120.03 crore showing a growth of 5.34% during the fscal 2014-15. The Operating Profit of the Bank has increased to Rs.4227.07 crore as against Rs.4155.49 crore last year. The Bank has earned a net Profit of Rs.497.08 crore during the fscal 2014-15.

Financial performance including appropriation from the Net Profit is given below:-

FINANCIAL PERFORMANCE (AMT. IN Rs. CRORE) 31.03.2015 31.03.2014

Interest Income 19961.38 19017.48

Other Income 2121.40 1945.27

Total Income 22082.78 20962.75

Interest Paid 14877.19 13890.38

Operating Expenses 2978.52 2916.88

Total Expenses 17855.71 16807.26

Operating Profit 4227.07 4155.49

Provisions and Contingencies 3449.56 3016.08

Net Profit for the Year before 777.51 1139.41

Exceptional Item - -

Less: Exceptional Item 280.43 0.00 (Reversal of Income for FY 2013-14)

Net Profit for the year after 497.08 1139.41

Exceptional Item - -

Add-Profit brought forward 0.96 0.17

Add-Investment Reserve Account 0.00 5.22

Net Profit available for 498.04 1144.80

appropriation

APPROPRIATION

Transferred to Statutory Reserve 124.00 285.00

Transferred to Revenue and 3.00 333.00

Other reserves

Transferred to Special Reserve u/s 198.00 259.00 36(1)(viii) of The Income Tax Act 1961

Transferred to Capital Reserve 0.00 0.23

Transferred to Investment 53.80 0.00

Reserve Account - -

Interim Dividend 0.00 119.94

Proposed Dividend 98.96 107.94

Tax on Dividend 20.14 38.73

Balance carried over to Balance 0.14 0.96 Sheet

5. DIVIDEND

Bank''s policy of declaring dividend is to reward the share holders as well as to plough back Profit for maintaining a healthy capital adequacy ratio and for supporting future growth. Accordingly, your Directors are pleased to propose a dividend of 33% (i.e. Rs.3.30 per share) for the fnancial year ended 31st March, 2015 as against 76.00% [i.e. Rs.7.60 per share (interim dividend @ Rs.4.00 per share and fnal dividend @ Rs.3.60 per share)] paid for the preceding year.

6. RISK MANAGEMENT

The Bank has Board approved policies in place for identifying, assessing, managing and mitigating various risks in the Bank which includes Loan Policy, Credit Risk Management Policy, Asset Liability Management, Liquidity Risk Management Policy and Market Risk Management Policy, Operational Risk Management Policy, Disclosure Policy, Compliance Policy, Internal Capital Adequacy Assessment Process (ICAAP) Policy, Integrated Treasury Policy and Stress Testing Policy, Credit Risk Mitigations and Collateral Management Policy, Policy guidelines of Delegated Powers for loans and advances, Integrated Risk Management Policy, Recovery Policy, Business Continuity Plan and Disaster Recovery Policy, Audit Policies, KYC and AML Policy and Customer Service Policy etc. Further the systems and procedures for risk management are detailed in the Management Discussion and Analysis annexed to this Report.

7. CORPORATE SOCIAL RESPONSIBILITY

Corporate Philosophy

y Bank is a corporate citizen, with resources at its command and benefits, which it derives from operating in society in general. It therefore has a commitment to give back to the community where it operates and owes a solemn duty to the less fortunate and underprivileged sections of the society.

y Staff members are encouraged to make contributions by understanding the aspirations of underprivileged sections and endeavoring to evolve measures to remove indisputable social and development lacunae. This will lead to their self-development and improvement of Bank''s image besides development of the community.

y Under the community service banking, various welfare and social activities are undertaken by the bank both in Banking and non-Banking areas to uplift the quality of life of the downtrodden and under privileged sections of the society.

y The focus of the Bank remains on education, health, sports and environment services.

Major initiatives undertaken by the Bank in FY 2014-15

The Bank has a Board approved Policy on Corporate Social Responsibility. A Committee has been constituted by the Board for the purpose of focusing / reviewing the CSR activities being undertaken by the Bank.

The Bank has undertaken various CSR initiatives under following categories:

Swachch Vidayalaya Campaign: The Bank has earmarked an amount of Rs.2.00 crore for constructing toilets in various Government schools. The construction is being done at Pan India level on priority and as focused CSR activity, leading towards the dream of a "Clean and Safe" India. During the year Bank has completed the construction of more than 227 Toilets in 177 Government Schools across the Country.

Prime Minister National Relief Fund: An amount of Rs.2.40 crores contributed by Staff towards Prime Minister National Relief Fund for undertaking relief works in Flood affected areas of J&K.

The Bank has participated in the noble cause of renovation and maintenance of PTC (Primary Teacher''s College) Building of Sabarmati Harijan Ashram Trust, Ahmedabad. The Building is used for teaching the poor and needy students of the society.

The Bank Created OBC-NIBM (National Institute of Bank Management) Endowment Chair on Financial Inclusion to provide strong academic leadership along with development of research programme for curriculum development.

To strengthen Financial Inclusion Initiative, the research work was initiated in association with NIBM, Pune and Bank on "Study on Effectiveness of Financial Inclusion Initiatives of our Bank".

The Bank has donated a School Bus for commutation purpose of poor and needy students of ''Saraswati Shishu Mandir Shiksha Samiti, Meerut''.

The Bank has donated Water Coolers for providing fresh and cool drinking water to the students/ teachers of MLM Public School, Ferozpur Cantt, Krishna Vatika School Village Bhokhra, District Bathinda and Government High School, Topra Kalan.

The Bank adopted 10 poor and needy girl children of St. Michael''s Hostel, Jangpura, New Delhi for fulflling their educational, medical and other needs.

The Bank contributed towards repair / renovation of toilets, awarded scholarships, provided benches to Government Schools, installed Hand-pumps in Benti Village, Lucknow which has been adopted by Honorable Home Minister, Government of India under Saansad Adarsh Gram Yojana.

In coordination with "Yogada Satsanga Society of India, Kolkata" the Bank distributed School Bags, RO Purifer, Benches and computers for their School at Ranchi.

To help the students to continue their studies, the Bank donated Hearing Aids to poor ''deaf and dumb'' students of ''Umang Bal Vikas, Patna''.

Donated Benches / Desks and Solar Lamp to two schools of Kasturba Gandhi Junior Residential Girls School at Village Gangoh and Village Tiwiaya, Saharanpur, Uttar Pradesh.

Donated Computers along with UPS System, Sewing Machines, Solar batteries and Cycles, through Jagruti - A social Venture by Oriental Bank Family in association with Navjyoti India Foundation at its Project Site office at Dhumaspur Road, Nayagaon (Bhondsi), Gurgaon.

Donated medical equipments, food items, medicines and other utility items for rehabilitation of persons of ''The Earth Saviours Foundation, New Delhi'', who were displaced due to fre.

Under its ongoing CSR initiatives, the Bank donated Medicines etc. to Leprosy Patients and Track Suits for children of Divya Prem Sewa Mission, Haridwar.

Donated Water Head Tanks, Aqua Guards and Water Cooler to Mother Teresa Saket Orthopedics Hospital, Panchkula.

The Bank donated Water Cooler and RO system for visitors and staff of BDPO office, Radaur, District Yamuna Nagar.

For the benefit of poor and needy patients the Bank donated an E-Mobile Clinic van to ''Medanta-The Medicity, Gurgaon'' and an Ambulance to ''All India Pingalwara Charitable Society'', Amritsar.

The Bank donated three Veterinary Ambulances to Shree Sadguru Datta Dharmik Evam Parmarthik Trust, Indore. The Ambulances shall be utilized under their ongoing project ''JEEVDAYA'' for taking care of injured, stray cattle on the streets.

The Bank donated four LED TV Screens to Shri Mahakaleshwar Temple, Ujjain which displays the schedule of events, timings of Aartis etc. to the pilgrims who visit the Mandir premises.

The Bank displayed Boards in the premises of ''Arulmigu Dhandayidapani Swami Temple, Palani, Tamil Nadu which shows Darshan and ticket details etc. of Temple activities for the benefit of pilgrims.

The Bank donated stationery, clothes and other utility items to widows and their children in cooperation with ''Swargiya Smt. Durga Devi Charitable Trust, Mathura''.

The Bank has provided fnancial literacy under Pradhan Mantri Jan Dhan Yojna (PMJDY).

The Bank has provided Skill Development Training to 3914 rural youth through Rural Self Employment Training Institute (RSETIs).

Green Initiatives to mitigate pollution

Under the Green Initiatives and to mitigate the pollution, Bank has planted saplings in Kolkata in association with Concern India Foundation, Kolkata.

The Bank contributed in cleaning the Dashashavghat at Varanasi by way of donation for clean and pollution free Ganga in coordination with Gangotri Sewa Samiti.

The Bank planted saplings along with Tree Guards on Road Divider in Sriganganagar which will help to provide green cover to mitigate pollution.

8. CORPORATE GOVERNANCE AND INSIDER TRADING

Securities and Exchange Board of India vide circular dated 17th April 2014 and 15th September 2014 amended clauses 35B and 49 of the Listing Agreement. In terms of Clause

35B, the Bank provided e-voting facility to its shareholders, in respect of shareholders'' resolutions, passed at the Annual General Meeting and Extra-ordinary General Meeting of the Bank held during the year 2014-15.

Pursuant to Clause 49 of the Listing Agreement, besides other compliances, the Bank has framed a Policy on Related Party Transactions and Whistle Blower Policy which are available on the website of the Bank https://www.obcindia.co.in

Whistle Blower Mechanism

In compliance with Clause 49 of the Listing Agreement and Government of India Resolution on "Public Interest Disclosures and Protection of Informer" (PIDPI), the Bank has framed a Whistle Blower Policy to establish a vigil mechanism for stakeholders of the Bank including directors and employees so as to report concerns about unethical behaviour, actual or suspected fraud or violation of the Bank''s code of conduct or ethics policy.

The mechanism also provides for adequate safeguards against victimization of those who avail of the mechanism. The Reporting Authority at the Bank level is the Chief Vigilance officer and in exceptional cases, direct access to the Chairman of the Audit Committee has been made available. The Audit Committee of the Board reviews the functioning of the Whistle Blower Mechanism on quarterly basis. Further, the details of the Whistle Blower Mechanism have been made available on the website of the Bank.

Insider Trading codes

The Securities and Exchange Board of India (SEBI) notifed the SEBI (Prohibition of Insider Trading) Regulations, 2015 on 15th January 2015 effective from 15th May 2015 and repealed SEBI (Prohibition of Insider Trading) Regulations, 1992 effective that date.

In conformity with new Regulations, the Bank has framed a comprehensive Code of Conduct for Regulating, Monitoring and Reporting of Trading by Insiders and a Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information which are available on the Bank''s website https://www.obcindia.co.in

9. BOARD OF DIRECTORS

During 2014-2015, 16 meetings of Board of Directors, 19 meetings of Management Committee of Board and 10 meetings of Audit Committee of Board, were held.

Sh. S L Bansal was the Chairman and Managing Director of the Bank for the Financial Year 2014-15 till the date of his superannuation i.e., upto 30.09.2014. Thereafter, on 31.12.2014, Sh. Animesh Chauhan assumed the charge of the Bank as Managing Director and Chief Executive officer under Section 9(3) (a) of The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980.Sh. Rajat Sachar who joined the Board of the Bank as Government of India Nominee Director on 16.04.2014 laid down the office with the appointment of Sh. Rajan Kumar as Government of India Nominee Director under Section 9(3)(b) of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 pursuant to Notifcation dated 12.09.2014. Sh. S Ganesh Kumar, joined the Board of the Bank on 10.06.2014 as RBI Nominee Director under Section 9(3)(c) of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980. Sh. Desh Deepak Khetrapal, Sh. Ashok Kumar Sharma and Sh. Dinesh Kumar Agrawal, joined the Board of the Bank on 30.09.2014 as Shareholder Directors under Section 9(3) (i) of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980. Sh. M.S. Sahoo, Part-time Non-offcial Director of the Bank appointed under Section 9(3) (h) of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 on 12.12.2013 vacated his office on 27.03.2015.

10. EXPLANATION/COMMENTS BY THE BOARD OF DIRECTORS IN RESPONSE TO qUALIFICATIONS/ ADVERSE REMARKS/EMPHASIS OF MATTER IF ANY, IN THE AUDITORS'' REPORT

In respect of Pt. 7 (i) - The Pension Trusts are permitted to invest in Bank Bonds/deposits. The plan assets of the pension and gratuity fund include investments made in Bank''s own Bonds (minimum ''A'' rated) / Deposits as per prevailing practice followed by the banking industry. The observation has no impact on the fnancial statements. After April, 2012 the Trusts have not invested funds in Bank''s own Bonds/deposits and funds are now being placed in other banks.

In respect of Pt. 7 (ii) –The Bank has made a provision of Rs.24.46 crore being one-fourth of the outstanding during the quarter ended 31.03.2015 and the balance provision of Rs.73.39 crore will be made in the next three quarters in terms of RBI circular No.RBI / 2014 – 15 / 535 DBR.No.BP.BC.83 /21.04.048 / 2014-15 dated 01.04.2015.

11. DIRECTORS'' RESPONSIBILITY STATEMENT

The Directors confrm that, in preparation of the Annual Accounts for the year ended 31st March, 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 true and fair view of the state of affairs of the Bank at the end of fnancial year and of the Profits of the Bank for the year ended 31st March, 2015,

- proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of applicable laws governing banks in India and for preventing and detecting frauds and other irregularities.

- internal fnancial controls were laid down and these were adequate and operating effectively

- proper systems were in place to ensure compliance of all laws applicable to the Bank and these were adequate and operating effectively

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

12. ACKNOWLEDGEMENTS

The Board of Directors expresses its gratitude to the Government of India, Ministry of Finance, Department of Financial Services, Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI) and other Government and Regulatory Agencies for their valuable guidance and continued support provided to the Bank throughout the year. The Board of Directors is also grateful to the valued customers, esteemed shareholders, stakeholders and public at large for their patronage and confdence reposed in the Bank.

The Board of Directors wishes to place on record its great appreciation of the commitment, sense of involvement and dedication exhibited by each staff member in the overall development, growth and prosperity of the Bank and looks forward to their continued support and whole-hearted co-operation for realization of the corporate goals in the year ahead.

For and on behalf of the Board

Place: Gurgaon (ANIMESH CHAUHAN) Date: 14.05.2015 MANAGING DIRECTOR & CEO


Mar 31, 2014

1. BUSINESS OPERATIONS

The Business of the Bank stood at Rs.334254.04 crores as on 31st March, 2014 as against Rs.306083.69 crores in the previous year. Total deposits of the Bank stood at Rs.193488.96 crores and have shown an increase of Rs.17591.44 crore depicting a growth of 10.00%. Cost of deposits stood at 7.67% for the financial year 2013-14 as against 7.90% for financial year 2012-13. The Bank was cautious in procuring high cost bulk deposits during the year and as a result of the same, the ratio of bulk deposits has decreased from 20.26% as on 31.03.2013 to 18.19% as on 31.03.2014. On the other hand, net advances as at end-March 2014 stood at Rs.139079.84 crore, registering a growth of 7.85%. During the fiscal 2013-14, yield on advances has decreased to 11.94% from previous year''s level of 12.27%. However, the Bank has taken measures to improve yield on advances through lending to SME, Mid Corporate and Retail sector in the current year.

The credit deposit ratio of the Bank, as at end-March 2014, stood at 72.91%. The Bank ensured adequate fow of credit to the productive sectors of the economy. The Loans & Advances portfolio of the bank is well diversified and balanced.

2. CAPITAL & RESERVES

During the year, the Bank has raised Equity Capital by way of preferential allotment of shares to the Government of India by issuing 8087561 equity shares of Rs.10.00 each at an issue price of Rs.185.47 per share aggregating to Rs.150.00 crore on 12.12.2013 thus increasing the paid-up capital to Rs.299.85 crore. Further, the bank transferred a sum of Rs.877.23 crore to Reserves (comprising Rs.285.00 crore transferred to Statutory Reserves, Rs.259.00 crore to Special Reserve under IT Act, Rs.333.00 crore to Revenue and Other Reserves and Rs.0.23 crore to Capital Reserve) out of the profit for the year 2013-14. With this, capital & reserves as on March 31, 2014 have gone upto Rs.13430.67 crore as against Rs.12775.54 crore as at end March 2013 and the ratio of Capital & Reserves to average working funds stood at 6.60% as on 31.03.2014 as against 6.87% as on 31st March 2013.

3. CAPITAL Adequacy RATIO

The Bank''s Capital Risk Weighted Assets Ratio (CRAR) as on 31.03.2014 under Basel III guidelines stood at 11.01%. The Bank''s Capital Risk Weighted Assets Ratio (CRAR) under Basel II stood at 11.85% as against 12.04% as on 31.03.2013. This is above the regulatory minimum requirement of 9%.

4. FINANCIAL PERFORMANCE

The Bank has posted a total income of Rs.20962.75 crore during the year as against Rs.19359.49 crore last year thus registering an increase of Rs.1603.26 crore showing a growth of 8.28% during the fiscal 2013-14. Operating Profit of the Bank has increased to Rs.4155.49 crore as against Rs.3690.69 crore last year showing a growth of 12.59% The Bank has earned a net profit of Rs.1139.41 crore during the fiscal 2013-14.

Financial performance including appropriation from the Net Proft is given below:-

TABLE 1: FINANCIAL PERFORMANCE (AMT Rs. IN CRORE)

31.03.2014 31.03.2013

Interest Income 19017.48 17704.78

Other Income 1945.27 1654.71

Total Income 20962.75 19359.49

Interest Paid 13890.38 13003.62

Operating Expenses 2916.88 2665.18

Total Expenses 16807.26 15668.80

Operating Profit 4155.49 3690.69

Provisions & Contingencies 3016.08 2362.74

Net Profit 1139.41 1327.95

Add-Profit brought forward 0.17 0.49

Add-Investment Reserve Account 5.22 0.00

Net Profit available for appropriation 1144.80 1328.44

APPROPRIATION

Transferred to Statutory Reserve 285.00 332.00

Transferred to Revenue and Other 333.00 442.00 reserves

Transferred to Special Reserve u/s 259.00 223.00 36(1) (viii) of I-T Act

Transferred to Capital Reserve 0.23 12.01

Transferred to Investment Reserve 0.00 5.22

Account

Proposed Dividend Including interim 227.88 268.42 dividend during the FY 2013-14

Tax on Dividend 38.73 45.62

Balance carried over to Balance Sheet 0.96 0.17

5. DIVIDEND

Bank''s policy of declaring dividend is to reward the share holders as well as to plough back profit for maintaining a healthy capital adequacy ratio & for supporting future growth. Accordingly, based on the performance of the Bank up to 30.09.2013, the Bank has all ready paid an interim dividend of Rs.4.00 per share (40%) in January 2014 and now your Directors are pleased to propose final dividend of Rs.3.60 per share thereby aggregating dividend of Rs.7.60 per share (76 %) for the full year ended 31st March, 2014.

6. RISK MANAGEMENT

The Bank has Board approved policies in place for assessing, managing and mitigating various risks in the Bank which includes Loan Policy, Credit Risk Management Policy, Asset Liability Management and Market Risk Policy, Operational Risk Management Policy, Disclosure Policy, Compliance Policy, Internal Capital Adequacy Assessment Process (ICAAP) Policy, Stress Testing Policy, Credit Risk Mitigations & Collateral Management policy, Policy guidelines of Delegated Powers for loans & advances, Integrated Risk Management

Policy, Recovery Policy, Business Continuity Plan & Disaster Recovery Policy, Audit Policies, KYC-AML Policy and Customer Service Policy etc. Further the systems and procedures for risk management are detailed in the Management Discussion and Analysis annexed to this Report.

7. CORPORATE SOCIAL RESPONSIBILITY

The Bank has Board approved Policy on Corporate Social Responsibility in place with a thrust on the philosophy that Bank is a corporate citizen, with resources at its command and benefits, which it derives from operating in society in general. It therefore has a commitment to give back to the community where it operates and owes a solemn duty to the less fortunate and underprivileged sections of the society. The Staff members are encouraged to make contributions by understanding the necessities of underprivileged sections and endeavoring to evolve measures to remove undisputable social and development lacunae which will lead to their self development and improvement of Bank''s image besides development of the community. Under the community service Banking, various welfare and social activities are undertaken by the bank both in Banking and non Banking areas to raise the quality of life of the downtrodden and under privileged sections of the society besides providing assistance on education, health and environment services.

8. MAJOR CSR INITIATIVES UNDERTAKEN BY THE BANK IN FY 2013-2014

- The Bank donated Rs.5 lacs for the Govt. High School at Milaganoor for construction of school compound wall. Further, Wheelchairs were also donated to the physically handicapped persons in Milagnoor.

- All the employees of the Bank contributed Rs.2.15 Crore to the Prime Minister''s National Relief Fund by donating their one day''s salary to help the food victims of Uttarakhand. Besides, the Bank organised camps in Kedarnath & Badrinath and provided food, medicines, mineral water and other sorts of help to the persons affected by the calamity.

- During the current year, the Bank has provided 6700 ceiling fans to Govt. Primary Schools located in rural centres.

- In 23 financial inclusion villages and other rural areas, water purifiers, water coolers, schoolbags, hand pumps, stitching machines, benches & chairs have been provided.

- The Bank has continued with various CSR/Welfare activities like distribution of books to poor blind students, free medical treatment for the poor and needy, donation of Ambulances, Vans, DG Sets, Computers, Water Coolers and support to Mid Day Meal programmes, Tree Plantation, Benches at Parks, Construction of Toilets, etc.

- Distributed Solar Power lanterns to the students in Rural / SU centres in Banglore region under ''Light for Education'' programme.

- For the development of the sports activities among the school going children, support has been given to "Subroto Cup International Football Tournament" and also to "Sub-Junior Under 15 Girls National Hockey Championship" at Bassi Pathana in Punjab.

- The Bank has adopted 10 orphan Girl Children from St. Michael''s Hostel, and has paid for their Boarding, Lodging, Education, Medical, and other needs.

- The Bank has donated 70 Tricycles to poor and disabled persons in Mathura. The Bank has re-constructed and adopted the "Female Surgical Ward'' at Civil Hospital Sriganganagar which gives relief to patients

- The Bank donated an eleven seater Electric van for transportation of elderly pilgrims visiting ''Khole Ke Hanumanji'', Jaipur.

On the Bank''s 72nd Foundation Day the Bank organized various CSR activities:

- Blood Donation Camps & Health Check up camps - The Bank organized a large number of Blood Donation and health check-up Camps on Pan India basis.

- Activities in Rural and semi-urban areas - In 400 primary Health Centers in rural areas, 1006 Wheel Chairs, 303 Stretchers & 340 Settees were donated.

- Medical Equipments - The Bank also provided medical equipments to Hospital run by Rama Krishna Mission in Bhubneshwar

- Activities in the primary schools in rural and semi- urban areas - In the primary Schools, Stationery items were distributed among students & Water-cooler were installed.

- Solar Lights - On this occasion, the Bank also installed solar lights in 21 (twenty one) villages under Lucknow Region.

9. BOARD OF DIRECTORS

During 2013-2014, 15 meetings of Board of Directors, 17 meetings of Management Committee of Board, 8 meetings of Audit Committee of Board, were held.

Sh. S L Bansal was the Chairman and Managing Director for the Financial Year 2013-14. Sh. Suresh N Patel, joined the Board of the Bank as Executive Director under Sec 9 (3) (a) of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 on 01.01.2014 after Sh.V Kannan laid down offce on 31.12.2013 on elevation as Chairman & Managing Director of Vijaya Bank. Sh.S Ganesh, joined the Board of the Bank on 31.05.2013 as RBI Nominee Director under Section 9 (3) (c) of the Banking (Acquisition and Transfer of Undertakings) Act, 1980. Sh.Kingshuk Bhattacharya, joined the Board of the Bank on 14.06.2013 as Workmen Employee Director under Section 9 (3) (e) of the Banking (Acquisition and Transfer of Undertakings) Act, 1980. Sh.M S Sahoo, joined the Board of the Bank on 12.12.2013 as Part-time Non-Offcial Director, appointed by Government of India under Section 9 (3) (h) of the Banking (Acquisition and Transfer of Undertakings) Act, 1980 and Sh. Narendra J Kotiawala, joined the Board of the Bank on 30.01.2014 as Officer Employee Director under Section 9 (3) (f) of the Banking (Acquisition and Transfer of Undertakings) Act, 1980. Sh. Rajat Sachar, joined the Board of the Bank as Government of India Nominee Director under Sec 9 (3) (b) of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 on 16.04.2014.

10. Explanation / COMMENTS BY THE BOARD OF DIRECTORS IN RESPONSE TO AUDITORS'' REPORT

In respect of point no.6 - The Pension Trusts are permitted to invest in Bank Bonds/deposits. The plan assets of the pension and gratuity fund include investments made in Bank''s own Bonds (minimum ''A'' rated)/Deposits as per prevailing practice followed by the banking industry. The observation has no impact on the financial statements. After April, 2012 the Trusts have not invested funds in Bank''s own Bonds/deposits and funds are now being placed in other banks.

In respect of point no. 8 (i) - The Reserve Bank of India has granted exemption to the public sector banks from application of the provisions of Accounting Standards (AS) 15, "Employee Benefits" vide its circular no. DBOD. BP. BC / 80 / 21.04.018/2010-11 dated 09.02.2011 on Re-opening of Pension Option to Employees of Public Sector Banks and Enhancement in Gratuity Limits – Prudential Regulatory Treatment. Accordingly, the Bank decided to amortise 2nd Pension option liability during the specified period.

In respect of point no. 8 (ii) – Various additional checks and balances have been put into place such as (a) fishing of an alert / SMS to the Regional Head & Second Man on any remittance / receipt above a threshold limit in any branch for immediate monitoring and avoidance of suspicious transactions (b) threshold limit defend in the newly opened account for a period of 6 months and any transaction beyond the threshold limit to be allowed only by Regional Head (c) specific branches per region authorized for handling of bulk deposits instead of acceptance of bulk deposits by all branches.

11. DIRECTORS'' RESPONSIBILITY STATEMENT

The Directors confirm that, in preparation of the Annual Accounts for the year ended 31st March, 2014

(a) the applicable accounting standards have been followed along with proper explanation relating to material departures, if any,

(b) the accounting policies framed in accordance with the guidelines of the Reserve Bank of India, were consistently applied,

(c) reasonable and prudent judgment and estimates were made so as to give true and fair view of the state of affairs of the Bank at the end of financial year and of the profits of the Bank for the year ended on 31st March, 2014.

(d) proper and sufficient care was 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.

(e) Internal financial controls were laid down and these were adequate and operating effectively.

(f) Proper systems were in place to ensure compliance of all laws applicable to the Bank.

12. ACKNOWLEDGEMENTS

The Board of Directors thank Government of India, Ministry of Finance, Department of Economic Affairs and Reserve Bank of India and other Government & Regulatory Agencies for their valuable guidance and continued support provided to the Bank throughout the year. The Board of Directors are also grateful to the valued customers, esteemed shareholders, stakeholders and public at large for their patronage and confidence reposed in the Bank.

The Board of Directors place on record their great appreciation of the commitment, sense of involvement and dedication exhibited by each staff member in the overall development, growth and prosperity of the Bank and look forward to their continued support and whole-hearted co-operation for realization of the corporate goals in the year ahead.



For and on behalf of the Board

Gurgaon (S L BANSAL)

12th May 2014 CHAIRMAN & MANAGING DIRECTOR


Mar 31, 2013

1. BUSINESS OPERATIONS

The Business of the Bank stood at Rs.306083.69 crores as on 31st March, 2013 as against Rs.269014.73 crores in the previous year. Total deposits of the Bank stood at Rs.175897.52 crores and have shown an increase of Rs.19932.60 crore depicting a growth of 12.78%. Cost of deposit stood at 7.90% as against 7.69% for financial year 2011-12. With the decreasing interest rate regime during the starting of the financial year 2012-13, though the bank has cautiously introduced special schemes to procure deposits, yet it has adversely impacted the cost of deposit which for the year ended 31.03.2013 increased to 7.90% from 7.69% for the year ended 31.03.2012.However, the Bank has considerably reduced high cost bulk deposits during the year. As a result of the above, the ratio of bulk deposits has decreased from 27.56% as on 31.03.2012 to 20.26% as on 31.03.2013. On the other hand, net advances as at end- March 2013 stood at Rs.128955.06 crore, registering a growth of 15.16%. During the fiscal 2012-13, yield on advances has increased to 12.27% from previous year''s level of 12.16%. The measures taken up by the bank to improve yield on advances through lending to sMe, Mid Corporate and Retail sector has enabled the bank to improve the yield on advances.

The credit deposit ratio of the Bank, as at end-March 2013, stood at 74.10%. The Bank ensured adequate flow of credit to the productive sectors of the economy. The Loans & Advances portfolio of the bank is well diversified and balanced.

2. CAPITAL & RESERVES

During the year, the bank transferred a sum of Rs.1014.23 crore to Reserves (comprising Rs.332.00 crore transferred to Statutory Reserves, Rs.223.00 crore to Special Reseve under IT Act, Rs.5.22 crore to Investment Reserve Account, Rs.442.00 crore to Revenue and Other Reserves and Rs.12.01 crore to Capital Reserve) out of the profit for the year 2012- 13. With this, capital & reserves as on March 31, 2013 have gone upto Rs.12775.54 crore as against Rs.11942.50 crore as at end March 2012 and the ratio of Capital & Reserves to average working funds stood at 6.87% as on 31.03.2013 as against 7.00% as on 31st March 2012.

3. CAPITAL ADEQUACY RATIO

The Bank''s Capital Risk Weighted Assets Ratio (CRAR) as on 31.03.2013 under Basel II guidelines (applicable up to 31.03.2013) stood at 12.04% as against 12.69% as on 31.03.2012. This is above the regulatory minimum requirement of 9%.

4. FINANCIAL PERFORMANCE

The Bank has posted a total income of Rs.19359.49 crore during the year as against Rs. 17055.13 crore last year thus registering an increase of Rs.2304.36 crore showing a growth of 13.51% during the fiscal 2012-13. Operating Profit of the Bank has increased to Rs.3690.69 crore as against Rs.3140.58 crore last year showing a growth of 17.52% The Bank has earned a net profit of Rs.1327.95 crore, after making all requisite provisions showing an increase of Rs.186.39 crore, a growth of 16.33% during the fiscal 2012-13.

Financial performance including appropriation from the Net Profit is given below:-

Table 1: Financial Performance (Rupees in crore)

31.03.2013 31.03.2012

Interest Income 17704.78 15814.88

Other Income 1654.71 1240.25

Total Income 19359.49 17055.13

Interest Paid 13003.62 11599.09

Operating Expenses 2665.18 2315.46

Total Expenses 15668.80 13914.55

Operating Profit 3690.69 3140.58

Provisions & Contingencies 2362.74 1999.02

Net Profit 1327.95 1141.56

Add-Profit brought forward 0.49 0.79

Net Profit available for appropriation 1328.44 1142.35

APPROPRIATION

Transfer to Statutory reserve 332.00 286.00

Transfer to Revenue and Other reserves 442.00 16.00

Transfer to Special Reserve u/s 36 (1)(viii) 223.00 565.00 of I-T Act

Transfer to capital reserve 12.01 6.98

Investment Reserve Account 5.22 -

Proposed Dividend 268.42 230.49

Tax on Dividend 45.62 37.39

Balance carried over to Balance Sheet 0.17 0.49

5. DIVIDEND

Your Bank''s policy of declaring dividend is to reward the share holders as well as to plough back profit for maintaining a healthy capital adequacy ratio & for supporting future growth. Accordingly, your Directors are pleased to propose a total dividend of 92.00 % (i.e Rs.9.20 per share) for the year ended 31st March, 2013 as against 79.00 %(i.e. Rs.7.90 per share) paid for the preceding year.

6. SECTORAL DEPLOYMENT OF CREDIT TO PRIORITY SECTOR

Bank''s advances to priority sector increased by Rs 6254 crore from Rs. 40527 crore in March 2012 to Rs. 46780 crore in March 2013, registering a growth of 15.43%. The Priority Sector Advances constituted 41.78% of the Adjusted Net Bank Credit (ANBC) against the stipulation of 40%. The comparative position of advances under various segments under Priority Sector at the end of March 2012 and March 2013 are as follows:

(Amount Rs. in crore)

S. No. Sector March 2012 March 2013

1. Priority sector credit 40527 46780

2. Agriculture 15411 17881

3. Direct Agriculture 11860 13866

4. Indirect Agriculture 3551 4015

5. SSI / SE 17978 20945

6. Educational Loan 1124 1172

7. Housing Loan 5982 6753

6.1 Agriculture Advances

Bank''s advances to agriculture increased by Rs. 2470 crore from 15411 crore in March 2012 to Rs.17881 crore in March 2013, registering a growth of 16.03%. The advances to direct agriculture segment increased by Rs.2006 crore from Rs.11860 crore as on 31.3.2012 to Rs.13866 crore as on 31.3.2013 constituting a growth of 16.91%. The Indirect agriculture advances increased by Rs.464 crore from Rs.3551 crore as on 31.3.2012 to Rs.4015 crore as on 31.3.2013 showing an increase of 13.07%.

6.1.1. Flow of credit to Agriculture sector (Disbursement)

During the financial year 2012-13, flow of credit to agriculture sector amounted to Rs. 10986.00 crore.

6.1.2. Small and Medium Enterprises (SMEs)

Bank''s exposure to Small Enterprises stood at Rs 20945 crore at the end of March, 2013 and has shown an increase of Rs. 2967 crore, recording a growth of 16.50% against the Year- on-Year growth stipulation of 20%. Further, SME advances increased by Rs.5,886 crore to Rs.26,013 crore registering a growth of 29.25%. The Micro Enterprises sector advances increased by Rs.1700 crore to Rs.7746 crore posting a growth of 28.11%. Bank has covered 2338 fresh accounts amounting to Rs. 296.53 Crore during the FY 2012-13 under CGTMSE.

6.1.3. Oriental Green Card (OGC) & Oriental Kisan Gold Card (OKGC)

During the Financial Year 2012-13, Bank has issued 1,25,011 cards to farmers to meet their credit requirement for crop production, repairing of agricultural machinery & equipment, working capital for allied activities, to repay their old debts taken from non institutional money lenders and consumption needs. The total amount of loan disbursed through these cards during the year was Rs.3442.57 crore. Bank has issued 45,123 ATM debit cards to OGC holders up to March 2013 and 2,02,384 ATM cards have been issued in KCC as on 17.05.2013.

6.1.4. Advances to Weaker Sections

Advances to weaker sections, consisting of beneficiaries belonging to scheduled castes/scheduled tribes, small and marginal farmers, landless labourers, rural artisans, beneficiaries under Central Govt. Sponsored Schemes (except PMEGP) was Rs. 11549 crore as on 31.03.2013 against Rs. 8703 crore as on 31.03.2012. Bank has achieved the target of 10% of ANBC to Weaker Sections.

6.1.5. Micro finance to Self Help Groups (SHG)/ Joint liability Group (JLG).

Bank has 11127 saving linked SHGs/JLGs accounts under SHG-Bank Linkage Programme. The Bank has directly financed 5876 SHGs / JLGs accounts amounting Rs. 29 crore as on 31.03.2013. Bank has also financed SHGs/JLGs through 13 MFIs amounting Rs. 222.39 crore as on 31.03.2013.

6.1.6. Credit under Differential Rate of Interest Scheme

Credit at concessional rate of interest of 4% p.a. to the low- income group of the society both in rural having annual family income upto Rs. 18,000/- and urban having annual family income upto Rs. 24,000/- centres was Rs. 46 crore as at the end of March 2013.

6.1.7. Loans to SCs/STs

Bank continues its thrust in providing financial assistance to SCs/STs beneficiaries. The advances to these beneficiaries increased to Rs 1478 crore in March 2013 against Rs. 732 crore as at the end of March 2012.

6.1.8. Prime Minister Employment Generation Programme (PMEGP)

The Scheme has been implemented by the Government of India by merging the two schemes viz. pMrY and REGP w.e.f. 1st April 2008. The scheme aims at generation of employment opportunities through establishment of micro enterprises in rural as well as urban areas. The bank has sanctioned credit assistance of Rs 39.46 crores to 864 applicants under the scheme during 2012-13.

6.1.9. Swaran Jyanti Shahri Rojgar Yojana (SJSRY)

For providing gainful employment to urban poor (living below the urban poverty line) through setting up self employment ventures, bank is providing financial assistance under the scheme. The bank sanctioned to 1924 beneficiaries to the tune of Rs.13.63 crores during 2012-13.

6.1.10. Swarn Jyanti Gram Swarojgar Yojana (SGSY)

The scheme is operative in rural areas of the country and cover the aspects of self employment such as organization of rural poor into Self Help Group (SHGs) training credit technology, infrastructure and marketing. The bank is participating in the schemes. During 2012-13 bank sanctioned financial assistance to 2801 swarojgaris to the tune of 21.61 crore.

6.1.11. Credit Flow to Women Beneficiaries

Bank''s advance to women increased by Rs.1794.00 crore from Rs. 4621.00 crore as on March 2012 to Rs. 6415.00 crore as on March 2013, registering a growth of 38.82%. Bank''s advances to women beneficiaries as on March 2013 was 5.73% of ANBC against the required stipulation of 5%.

6.1.12. Lending to Minority community

Bank has achieved 15.81% of Priority Sector Lending towards minority communities to during FY 2012-13 in comparison to 14.98% during FY 2011-12 against stipulated norm of 15%.

6.1.13. Financial Inclusion

With a view to provide banking facilities in un banked villages, Bank has rolled out Financial Inclusion Plan in 569 allotted villages with population more than 2,000 and in 336 villages with population between 1600 - 2000. Bank has covered all the 905 villages under Financial Inclusion Plan as on 31.03.2013. Out of 905 villages, 779 are covered through Business Correspondent model, 63 through brick & mortar Branch Model and remaining 63 through Mobile Branch Model.

Bank has opened a total number of 6,52,207 No-Frill/ Other savings accounts in these 905 villages. Further 2,92,592 customers, whose accounts were opened through BC Agents, have been issued activated Bio-metric cards for extending IT enabled banking services.

A special drive has been launched at Delhi w.e.f. 16.07.2012 to extend banking facilities to the migrant labourers and street vendors/ hawkers in urban areas by opening their Small SB accounts. A Call center service with toll free telephone number, SMS & e-mail facility have been put in place to reply the queries of the persons/ guiding the persons intending to open accounts with the banks. A total number of 34,335 accounts of the migrant labourers and street vendors/ hawkers have been opened by our bank in Delhi since 16.07.2012 out of 2,60,370 accounts opened by all SLBC member banks. Our bank opened 13.18% of total accounts. This initiative of our bank got due coverage under the heading "Bank Accounts for Migrant Labour" in Issue -I, Sept''2012 edition of Banking, Insurance, Pension - A Journal of the Department of Financial Services, Ministry of Finance, Govt. of India. All PSBs have been advised by the Department of Financial Services, Ministry of Finance, Govt. of India to initiate similar drives in the State(s)/ UTs where their bank is SLBC convener.

6.1.14 Implementation of DBT Scheme.

Bank received list of 14,341 beneficiaries in 26 district out of 43 pilot Districts (Phase- I) and accounts of all the beneficiaries have been opened. Bank received the list of 4,790 beneficiaries in 10 districts out of 78 additional districts (phase-II) and accounts of all the beneficiaries have been opened. Bank has received the lists of 54,895 beneficiaries in total 61 districts throughout the country and accounts of all beneficiaries have been opened. Bank has issued ATM debit cards to 23735 beneficiaries. Bank has seeded Aadhaar number in 16293 accounts.

Bank has three Lead districts, which are not among 43 (Phase-I) and 78 (Phase-II) districts. However, We have taken initiative to implement DBT in our Lead districts. The details of list of beneficiaries obtained and accounts opened are as follows:

Total No. of No. of No. of S. Name of the Beneficiar- Schemes Accounts No District Implemented ies list opened received

1 Sriganganagar 13 53115 42479

2 Palwal 4 17068 17068

3 Ferozepur 7 38475 35574

Total 108658 95121

There is no gap in opening of accounts for our branches.

6.1.15 State Level Bankers Committee Responsibility

Bank was bestowed with prestigious assignment of Convener- State Level Bankers'' Committee for Delhi State by the Government of India from November, 2011. Bank has taken over reins from State Bank of India. There are 33 member banks of SLBC - Delhi State which include all banks i.e. PSBs, Private Sector Banks and Coop Banks. Delhi State is served by 2650 branches of these member banks. The SLBC achieved 101.86% of Annual Credit Plan, 2012-13.

SLBC, Delhi has played important role in launching of Delhi Annashree Yojana of Govt. of NCT of Delhi and campaign for opening of accounts of school children.

It has also closely co-ordinated with DFS, MoF, GoI/ RBI/ State Govt. departments/ Member Banks for implementation of Government and RBI directions.

6.1.16. Lead Bank Responsibility

Bank is performing the functions of Lead Bank in three Districts, namely, Ferozepur in Punjab, Sriganganagar in Rajasthan and Palwal in Haryana. There is more than 100% achievement under ACP in all three districts respectively.

6.1.17. OBC Rural Development Trust

Bank has set up a special purpose vehicle in the name of Oriental Bank Rural Development Trust (OBCRDT) for setting up Training Centres at various places across the country for imparting training for capacity building in rural areas. The Trust came into being on 9th December 2005 as a registered body.

The main objective of the Trust is to establish training colleges/ institutes and workshops for providing training for farmers on modern techniques of farming, tractor/farm machinery repair & maintenance and other aspects of agriculture/rural development; micro finance and capacity building of the rural youth and women.

Presently five OBCRSETIs (OBC Rural Self Employment Training Institutes) are functional at Dehradun, Sriganganagar, Jaipur, Ferozepur and Palwal.

We have been allotted land by the State Governments in Chomu (Jaipur- Rajasthan), Zira (Ferozepur-Punjab), Jassowala (Dehradun-Uttrakhand), Manaksar (Sriganganagar- Rajasthan) and Rattipura (Palwal- Haryana).

The RSETIs at Chomu (Jaipur) and Zira (Ferozpur) are operating and holding training programmes from their own premises. The process of construction of buildings for the remaining 3 RSETIs is under progress.

During the Financial Year 2012-13, a total of 339 training programmes were conducted and 10749 candidates were given training. Of these 125 were Skill Development Programmes on subjects like tailoring & dress designing, watershed management, phulkari embroidery, milch animal rearing, crop production, beauty parlour, medicinal plantation, mobile repairing, etc which benefitted 3648 candidates. A total of 2146 persons trained under Skill Development Programmes were settled during FY 2012-13. The settlement rate of trainees improved to 57% during the FY 2012-13 as compared to 39% during FY 2011-12. Emphasis is also given to train candidates from BPL strata of the society for which list of candidates are obtained by the centres from respective DRDA. Cumulatively these centres have conducted 1092 training programmes since inception benefiting 36597 candidates.

6.1.18 CSR Initiatives taken during FY 2012-13.

As an entity responsible to the society, the bank under takes Corporate Social Responsibilities for benefit of the larger section of the society. During 2012-13, bank has under taken the following CSR activities.

a. The Bank has adopted 461 Primary School by installing 1442 electricity fans, constructing 87 toilets and providing clean drinking water facility to 299 schools. Further, 21 solar panels also for uninterrupted power back-up. Total expenses incurred were Rs. 67.04 lakh in Govt. Primary schools.

b. Bank has incurred expenses of Rs. 179.01 lakhs in 766 financial inclusion villages and other rural areas by providing Water purifier, water coolers, school bags, Hand pumps, Stitching Machines, and Chairs besides organizing Eye Operation camps.

c. The Bank has initiated campaign ''Smoke Free Jodhpur'' in coordination with local authorities under COPTA for display of banners in school premises.

d. Sponsored "Hunger Free Delhi" Campaign- ''Aap ki Rasoi'' under Bhagidari Programme of Govt. of NCT. Of Delhi to provide food to poor.

e. Van donated to ''Arunodaya Deseret Eye Hospital, Gurgaon'' for transportation of patients from slums dwelling areas to Hospital.

f. Ambulance donated to ''Maharaja Agrasen Charitable Hospital'' for medical benefits to poor and needy patients.

g. Donation of Bus named ''School on wheels'' to NGO ''Help Us To Help Them'' at Kolkata for educating street children.

h. Solar Panels were installed in Bulandsahar district of Uttar Pradesh for uninterrupted power supply in schools and other works of the village

7. RETAIL CREDIT

Retail Credit segment continues to be the thrust area of lending. Our 16 Retail Credit products are customer friendly, competitive and specifically designed to suit all sections of the society.

In current FY, bank has achieved YOY growth of 25% in Retail Credit & recorded 11.16% of total advances.

During the year, the bank has introduced loyalty concession for Home / Car loan borrowers as well as revamped loan against immovable property & personal loan schemes to make it more attractive to meet the various needs of Retail Customers.

7.1 Home Loan

The Home Loan depicts YOY growth of 19.79% (previous year-18.79%). During the year fresh home loan of Rs. 2096 Crore were sanctioned in 16204 accounts.

7.2 Car / Vehicle Loan

Despite recessionary trend in Car / Auto industry, our car loan segment depicts YOY growth of 22.64%. During the year fresh car loan of Rs. 837 Crore were sanctioned in 17419 accounts.

7.3 Education Loan

The Education Loan portfolio of the Bank stood at Rs. 1227.04 Crore as on 31.03.2013 and showed Y.O.Y Growth of 3.02%. The growth is adversely affected due to credit of interest subsidy Rs. 30.00 Crore (approx.)

Bank continued its efforts for extending education loans for higher studies & vocational courses on soft terms based upon IBA guidelines. Specific provision for management quota & nursing education has been elaborated in the scheme.

A specific customized collateral free scheme for students of premier institutions viz- IIMs, IITs, XLRIs & ISBs has been introduced on Base Rate of interest.

8. TREASURY OPERATIONS

The G-Sec yields softened during FY 2012-13. This was due to reduction in inflation levels, stunted economic growth and fiscal deficit remaining within targeted levels. RBI reduced Repo and Reverse Repo rates by 100 basis points during FY 2012-13 to revive growth. Equity market remained volatile during 2012-13 and ended the year with a muted return of 8%. The secondary market turnover has been Rs. 85,332.20 crore in FY 2012-13.

The net profit in the secondary market operations has been Rs.168.48 crore during FY 2012-13. The Bank has transferred Securities amounting to Rs. 4970.51 crore from ''Available for Sale'' category to ''Held to Maturity'' category. Further, Securities amounting to 18.30 crores were transferred from ''Held to Maturity'' category to'' Available for Sale'' category. In the process, Bank booked depreciation of Rs. 185.74 crore. The aggregate investment of the Bank has increased to Rs. 58,719.20 crore as on 31-03-2013 from Rs. 52,460.22 crore as on 31-03-2012 an increase of 11.93%. The yield on investments have increased to 7.41% from 7.36% last year (excluding income on RIDF deposits classified as Non-SLR investments) owing to maturity of low yielding securities vis-a- vis fresh investments in high yielding securities in Investment portfolio.

9. FOREIGN EXCHANGE BUSINESS:

During the fiscal year 2012-13, Bank achieved Forex turnover of Rs 96,444 Crore as on 31.03.2013. The total earning from foreign exchange Business for the financial year 2012-13 was Rs 237.79 Crore. The Export credit of the Bank stood at Rs 5,750 Crore as on 31.03.2013 as against Rs 4,976 Crore as on 31.03.2012, thus registering a growth of 15.55%. Bank has 86 Specialized Branches to conduct foreign exchange business. The Bank has mobilized Non Resident deposits to the tune of Rs 3068 Crores as on 31.03.2013 as against Rs 2323 Crores for the year ended 31.03.2012, thereby registering a growth of 32% over the preceding financial year. The operations at Representative Office, Dubai has completed four years of operations, acting as a catalyst to canvass non- resident accounts of Indian Expatriates in UAE to expand the Non- resident customer base of the bank.

10. Merchant Banking Activities

The Bank is a registered Category I Merchant Banker and holds registration certificate valid upto 28.02.2014. The Bank also holds permanent registration as Banker to an Issue. As Bankers to Issue, the Bank has acted as Paying Banker for payment of dividend warrants and as Self Certified Syndicate Bank (SCSB) for providing ASBA facility.

Applications Supported by Blocked Amount (ASBA)

Our Bank has been registered with SEBI as Self Certified Syndicate Bank (SCSB) for providing Applications Supported by Blocked Amount (ASBA) facility to its customers. ASBA is an application containing an authorisation to block the application money in the bank account maintained with SCSB.

Under the ASBA facility, the application amount for subscribing to an issue (IPO/Rights issue), remains in the bank account of the customer till allotment is finalized and actual amount equal to allotted shares is only debited instead of total application amount. SEBI also allowed syndicate / sub-syndicate members to procure ASBA forms from the investors, upload the details in the bidding platform and forward the same to Self Certified Syndicate Banks (SCSBs) which is referred to as "Syndicate ASBA".

In compliance with SEBI guidelines, Bank is providing ASBA / Syndicate ASBA facility through all its 2000 branches across the country.

11. THIRD PARTY PRODUCTS:

11.1 Life Insurance Business (JV):

During FY 2012-13, the Bank has sold 34205 policies with First Premium Collection of Rs. 123.22 Crores and has earned commission of Rs. 12.66 Crores (Net).

11.2 General Insurance Business:

In General Insurance Business, the Bank has again registered a steady growth and has collected a premium of Rs. 49.66 Crores earning a commission of Rs. 5.69 Crores.

11.3 Oriental Bank Mediclaim Policy

Our Bank has signed an MoU with Oriental Insurance Company on 3rd October 2011 and launched Oriental Mediclaim Policy. The product has been designed exclusively for OBC Customers and available in all the branches across the country. During the FY 2012-13, the Bank has marketed 20865 policies and collected a premium of Rs. 7.74 croes thereby earned a commission of Rs. 1.20 crore.

11.4 Mutual Fund Business:

Our Bank is selling the Mutual Fund products of the 7 Asset Management Companies. During the Financial year 2012-13, the Bank has earned a commission of Rs. 41.93 lakhs from Mutual Fund Business.

11.5 Demat Accounts:

The Bank is a Depository Participant for both NSDL and CDSL. As on 31.03.2013, our Bank has 71186 Demat accounts and 1193 Online Trading accounts. The commission earned in FY 2012-13 from Demat business is Rs. 2.69 crores. The Bank has tied up with the M/s. IDBI Capital Market Services Ltd. & M/s. Karvy Stock Broking Limited for providing Online Trading facilities to its Demat Account holders through 298 identified Branches.

11.6 Gold Coins:

The retail sale of Gold Coins in different denominations (5 grams, 8 grams & 10 grams) was launched on 30.10.2010 in our Bank. During the FY 2012-13, our bank has sold 19572 Gold Coins through 270 designated branches across all regions and earned a profit of Rs. 2.04 Crores.

11.7 UID Cards:

Bank is appointed as Registrar by Unique Identification Authority of India and carried out more than 14.60 Lac enrolments in Phase II of the Project in FY 2012-13. We have received a gross commission of Rs. 3.08 crore in FY 2012- 13 from UIDAI. UID enrolment process is being carried out in Eight States/U.Ts which includes Delhi, Punjab, Haryana, Madhya Pradesh, Rajasthan, Maharashtra and Kerala.

11.8 Cash Management Services (CMS):

The Bank provides an efficient and tailor-made CMS solution to suit the customer requirements. The Bank is offering Collections, Payments and Custodial Services to the Customers under Cash Management Services. The Bank has 136 CMS collection centres across India. The Bank has registered a turnover of above Rs. 749.89 Crores and earned a commission of Rs.1.21 Crores during the financial year of 2012-13.

11.9 Oriental Bank of Commerce-SBI Credit Cards

Our Bank signed an MOU with SBI Cards on 14.09.2011 and launched Co-branded Credit Cards on 22.10.2011. There are two types of Credit Cards being issued: (i) SBI-Oriental Bank of Commerce Gold & More (ii) SBI-Oriental Bank of Commerce Platinum. These cards are being issued in two variants i.e. Secured and Unsecured. There are 19 Regional Offices and 456 branches have been authorized to source unsecured credit cards. Secured Cards can be sourced by all the branches. As on 31.03.2013, 22666 cards had been sourced by the branches, out of which 14198 cards were issued.

12. BRANCH EXPANSION

During 2012-13, the Bank has opened 209 new branches besides up gradation of 19 Extension Counters. As on 31.03.2013, the total number of branches stood at 2000 as against 1772 as on 31.03.2012.

The population group-wise classification of branches is as under :

S.N. Classification 31.03.2013 31.03.2012

1. Rural 468 369

2. Semi-urban 561 482

3. Urban 541 524

4. Metropolitan 430 397

Total 2000 1772

13. CUSTOMER SERVICE

The Bank in its endeavor to achieve excellence in customer service has started many customer friendly services viz. Mobile Banking (OBCMPAY) besides Internet Banking Services both for individuals and corporates, SMS alert service, Cheque/ Cash deposit facility through some of the Bank''s ATMs. Funds transfer through ATMs (only among accounts linked to a ATM card), facility of Cheque Status Inquiry and Stop cheque payment available 24x7 on Bank''s ATMs, deployment of Point of Sale (POS) Terminals at the identified prospective Merchant Establishments, Cheque deposit machines at some of the branches to facilitate cheque deposit with acknowledgment generated by the machine itself, online payment of service taxes etc. These services are helpful for the customers to get their transactions done speedily and easily. For Senior Citizens customers there is provision for separate queue in the branches. Format of passbooks (Savings Deposit, Progressive Deposit, OGC) have been reviewed in order to make it more informative.

The Bank has adopted and implemented voluntary codes of BCSBI for individual customers, Fair Practice code for lenders, Micro and Small Enterprise (MSEs) code to provide fair, transparent and quality service to all the customers and to provide greatest satisfaction to the customers. The codes are displayed on the Bank''s website for information and printed copies are also available at branches for customers'' information.

The updated information on Bank''s Deposit Schemes, Loan Schemes, Citizen''s Charter, Banking Ombudsman, SSI Charter, Forex Remittances, Service Charges and Bank''s Policies viz Financial Inclusion Policy, Cheque Collection and Compensation Policy, Grievance Redressal Policy, Policy on Collection of dues & Repossession of Security etc. have been displayed in Public domain of Bank''s website. These are also available at branches in booklet/pamphlet form. "Query & Suggestion" link is provided on website to get feedback from customers. Complaint/Suggestion Boxes are provided at branches where a customer can drop his/her complaint or suggestion.

The Customer Service Meetings are being held regularly at Branch level, Regional Office level and Head Office level. These meetings ensure the proper implementation of guidelines issued by regulatory authorities. The customers are invited to attend these meetings and give their valuable suggestion/feedback on bank''s services and schemes. The Bank is committed to give excellent customer service for the customers'' maximum satisfaction.

Web-based Customer Grievance Redressal system is provided for prompt redressal of customers grievances. A dedicated Customer Care Centre on toll free Number 1800- 180-1235 has been set up for clarifying the customers account related and other queries. Separate SLBC Helpline Number 1800-180-0124 has also been started.

14. KNOW YOUR CUSTOMER (KYC) NORMS & ANTIMONEY LAUNDERING (AML) MEASURES

To comply with the various laws and regulations, national as well as international, Govt. of India and Reserve Bank of India directives / instructions & guidelines, primarily to prevent the bank from being used, intentionally or unintentionally, by criminal elements for money laundering activities, OBC ''KYC'' Policy has been formulated. The Policy combines four key elements viz. "Customer Acceptance Policy", "Customer Identification Procedures", "Monitoring of Transactions" and "Risk Management". This enables the bank to know / understand the customers and their financial dealings better and helps in managing risks prudently. The detailed guidelines and subsequent instructions are being reiterated from time to time for strict compliance by the field functionaries. The bank is already complying with the requirement of submission of statutory reports to the FIU-IND as a sequel to the legislation on Prevention of Money Laundering Act, 2002 and its Amendment Act, 2012. The Bank has already operationalised Anti-Money Laundering software solution for complying with KYC Norms / AML Measures and generation of alerts to detect any suspicious transaction. Alerts are being scrutinized and STRs are being submitted to FIU-IND. Bank is also submitting all the required data/returns relating to KYC/AML to the regulatory bodies.

15. USE OF HINDI IN THE BANK

During the year 2012-13, Bank continued its concerted efforts to accelerate use of Hindi and implement the guidelines/ directives received from Govt. of India and Reserve Bank of India. Concrete and effective steps were taken to achieve the region wise targets set in the Annual Programme- 2012-13 by the Department of Official Language, Ministry of Home Affairs, Govt. of India Bank was awarded Indira Gandhi Rajbhasha Protsahan Puraskar for the year 2010-11 by Hon''ble President Of India Sh. Pranab Mukharjee and Consolation prize in ''B'' region under Reserve Bank Rajbhasha Shield Competition 2010-11 for its excellent performance in the field of Rajbhasha Hindi. Regional Office, New Delhi was selected for Second Prize by Northern Regional Implementation Office, Rajbhasha Vibhag, Min. of Home Affairs. Regional Offices Gurgaon,Delhi/ New Delhi & B/O Mangalore were awarded by respective Town Official Language Implementation Committees (2011-12) for doing excellent work in Hindi. Bank''s In-House Magazine AADHAAR was awarded Second Prize by the Delhi Bank''s Town Official Language Implementation Committee.

Hon''ble Parliamentary Committee on Official Language visited our Uttarkashi Branch on 02.06.2012 & Drafting & Evidence Sub-Committee Of Parliamentary Committee on Official Language held discussions on progress made in the use of Hindi with Regional Head, RO Bangalore and appreciated the works being done in Hindi in the Bank.

Progress made in use of Hindi in IT

i. Weekly SMS Alerts in Hindi were sent to Bank''s account holders.

ii. Hindi Templates of routine letters, on line English- Hindi Banking Glossary, Official Language Act & Rules, directions for unicode settings, bilingual software & Hindi Fonts for download and e-circulars, schemes, policies,forms, Finacle Job Cards etc. were provided in Hindi at Bank''s Web Portal to facilitate working in Hindi.

iii. Bank''s Website is available in Hindi Unicode besides English.

iv. Officers/ Employees were imparted training to work on computer in Hindi and send e-mail in Hindi with the help of Unicode.

v. To provide banking facilities to customers in Hindi also by CBS branches, bilingual Software Script Magic has been provided in the branches of the Bank .

vi. Bank implemented on-line submission & consolidation of Quarterly & Annual Hindi Progress Report through Chris Mac-MIS.

Bank hosted 87th meeting of Coordination Committee on Training, RBI at Chandigarh on 07.12.2012 in which higher officials from public sectors Banks & financial institutions participated. A Hindi Handout on" Sarkari Karobar" was also released in the meeting. A three day conference of Hindi Officers of the Bank was organized at STC, Noida. Noting Sahayika in Hindi was prepared & provided to employees to increase use of Hindi.

Hindi-Day/Hindi-Fortnight was celebrated in all offices / branches of the bank in the month of September, 2012 and various competitions were conducted. The winners of Hindi competitions were awarded by our worthy CMD in a function organized at Corporate Office. Bank conducted an Inter Bank Hindi Chitra Kahani Lekhan Competition under auspices of Delhi Banks Town Official Language Implementation Committee. Our staff members won prizes in various Inter Bank competitions.

Bank''s Quarterly IT magazine ''IT Chintan'' is being published in Hindi also. All the issues of Bank''s quarterly In-House Magazine "AADHAAR" were published regularly in bilingual form i.e. in Hindi and English.

16. RECOVERY

The Bank has made concerted efforts for recovery of NPAs and as a result of this the Bank could make Cash Recovery of Rs.1525.77 Crore during the Financial Year 2012-13. Out of the said Cash Recovery, a sum of Rs.771.83 Crore has been added as recovery towards the Revenue of the Bank. Further, all the available recovery mechanism have been utilized by the Bank, viz. holding of Recovery Camps, floating of "Special One Time Settlement Schemes for NPAs with O/S upto Rs. 10.00 Lakh", participating in Lok Adalats, taking action under SARFAESI Act-2002, initiating legal action in the competent Courts of Law and settling of cases under general settlement policy of the Bank. However, due to global recession, Indian economy has also been affected and the NPAs of the Bank has increased in comparison to the previous financial year from Rs. 3580.49 Crore as on 31.03.2012 to Rs. 4183.96 Crore as on 31.03.2013. Accordingly, the Gross NPA percentage to gross advances has increased to 3.21% against 3.17% of corresponding F.Y. and the Net NPA of the bank has increased to 2.27% against 2.21% of corresponding F.Y.

The Bank is taking all possible efforts to strengthen the recovery mechanism to minimize the delinquencies. A sub-committee of Board has been constituted to monitor the position NPA, Slippages and Recovery.

17. HUMAN RESOURCE DEVELOPMENT & TRAINING

Human Resource Development Department during the year 2012-13 has taken a significant turn with Government of India, Ministry of Finance, Department of Financial Services bringing changes in Eligibility criteria for Promotions with Rural/ Semi-Urban experience, Timelines for Transfers, Annual Performance Appraisal System etc for uniform implementation across Public Sector Banks. This necessitated PSBs to gear up their machinery to meet the aspirations of the Govt. of India. Our Bank has been one among the first groups to implement the above Government guidelines and complete the process in time.

The emphasis of training for the year 2012-13 is more on developing leadership in pipeline to meet the challenges ahead of large scale retirements. The Bank has drawn up a full fledged document on Succession Planning by preparing a talent pool and identifying High Potential Individuals to man the key positions in the Bank. These High Potential Individual are being groomed to take over the key positions in future in the Bank. The Bank has also conducted number of programmes on Leadership Development viz Leadership for Branch Managers, Role Change for Officers, Management Development Programme for Senior Executives.

The focus of training however continued to be on the following functional areas:

Credit Management, Risk Management, Forex Management, Customer Relationship Management, NPA & Recovery Management, Agriculture Financing & Rural Development, Financial Inclusion, Refresher Programme for POs, Programme for Hall Incharge, General Banking for Officers, Soft Skills Development, CBS & IT Products, Programme on Reservation Policy for SC/ST/OBC etc.

In 418 programmes 10738 employees were imparted training in the above and other areas of Banking. In addition, 1395 officers were nominated in Advanced Training Programmes in key operational and behavioral areas in pioneer institutions like NIBM, Pune, College of Agricultural Banking, Pune; IBA, Mumbai; IDRBT, Hyderabad; NIBSCOM, Noida, Centre for Organizational Development, Hyderabad etc. Few Senior and Top Management functionaries were deputed for overseas training for Management Development Programmes/ Conferences/ Seminars to give them exposure to International best practices and their impact in Indian Banking.

During the year 2012-13, the Bank recruited 159 Probationary Officers, 167 Clerks, 216 Subordinate Staff and 172 Specialist Officers in different grades and streams such as Manager (FA), Manager (Risk Management), Officer (FA), Officer (Marketing) and Agriculture Officers, etc. The Bank further during the ensuing year plan to recruit around 1689 employees. The total staff strength as on 31st March, 2013 is 18891 comprising of 9905 Officers, 5601 Non-subordinate and 3385 Subordinates. The Bank also promoted 1482 employees in different cadres during the year 2012-13.

The bank complied with Govt. guidelines in respect of reservation in recruitment and promotion for SC/ST/OBC/ PWD/Ex-Servicemen in letter and spirit. The Bank recruited 341 SC/ST/OBC category personnel in Officer, Clerical & Subordinate cadres during the year. The grievances of SC/ ST/OBC employees, if any, were resolved through SC/ST and OBC Cells created at all Regional Offices and at Head Office with the coordination of Liaison Officers/Chief Liaison Officer. During the year 2012-13, the National Commission for Scheduled Castes held series of review meetings with the Bank in different geographical areas and expressed their satisfaction over the implementation of Government guidelines in respect of reservation for Scheduled Castes in the Bank. The Ministry of Finance, Govt. of India, Department of Financial Services during the period have also inspected the Reservation Rosters maintained for SC/ST/OBC/pWd/Ex-SM in the Bank and expressed satisfaction.

BOARD OF DIRECTORS

During 2012-2013, 15 meetings of Board of Directors, 12 meetings of Management Committee of Board, 10 meetings of Audit Committee of Board, were held.

Sh. S L Bansal was the Chairman and Managing Director for the Financial Year 2012-13. Sh. Bhupinder Nayyar, joined the Board of the Bank as Executive Director under Sec 9 (3) (a) of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 on 05.10.2012 after Sh.S C Sinha laid down office on 31.07.2012. Sh.P.M.Chopda, joined the Board of the Bank on 18.01.2013 as Part-time Non-Official Director, appointed by Government of India under Section 9 (3) (h) of the Banking (Acquisition and Transfer of Undertakings) Act, 1980. Sh. B. Srinivas, RBI nominee Director has superannuated on 31.03.2013.

DIRECTORS'' RESPONSIBILITY STATEMENT

The Directors confirm that, in the preparation of the Annual Accounts for the year ended 31st March, 2013

a. the applicable standards have been followed along with proper explanation relating to material departures, if any,

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

c. reasonable and prudent judgment and estimates were made so as to give true and fair view of the state of affairs of the Bank at the end of financial year and of the profits of the Bank for the year ended on 31st March, 2013,

d. proper and sufficient care was 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.

ACKNOWLEDGEMENTS

The Board of Directors thank Government of India, Ministry of Finance, Department of Economic Affairs and Reserve Bank of India and other Government & Regulatory Agencies for their valuable guidance and continued support provided to the Bank throughout the year. The Board of Directors are also grateful to the valued customers, esteemed shareholders, stakeholders and public at large for their patronage and confidence reposed in the Bank.

The Board of Directors place on record their great appreciation of the commitment, sense of involvement and dedication exhibited by each staff member in the overall development, growth and prosperity of the Bank and look forward to their continued support and whole-hearted co-operation for realization of the corporate goals in the year ahead.

For and on behalf of the Board

Gurgaon (S.L. BANSAL)

2nd May 2013 CHAIRMAN & MANAGING DIRECTOR


Mar 31, 2012

The Board of Directors have pleasure in presenting this Annual Report together with the Audited balance Sheet and Profit & Loss Account of the Bank for the year ended 31st March, 2012.

1. BUSINESS OPERATIONS

The Business of the Bank stood at Rs. 269014.73 crore on 31st March 2012 as against Rs. 235893.16 crores in the previous year. Total deposits of the Bank stood at Rs. 155964.92 crore and have shown an increase of Rs. 16910.66 crore depicting a growth of 12.16%. Cost of deposit stood at 7.69% as against 6.03% for financial year 2010-11. With the increasing interest rate regime, though the bank has cautiously introduced special schemes to procure deposits during the last year, still it has adversely impacted the cost of deposit which for the year ended 31.03.2012 has increased to 7.69% from 6.03% for the year ended 31.03.2011.However, the Bank has cautiously procured high cost bulk deposits during the year. As a result of the above, the ratio of bulk deposits has decreased from 34.26% as on 31.03.2011 to 27.56% as on 31.03.2012. On the other hand, net advances as at end-March 2012 stood at Rs. 111977.69 crore, registering a growth of Rs. 16.76%. During the fiscal 2011-12, yield on advances has increased to 12.16% from previous year's level of 10.52%. The measures taken up by the bank to improve yield on advances through lending to SME, Mid Corporate and Retail sector has enabled the bank to improve the yield on advances.

The credit deposit ratio of the Bank, as at end-March 2012, stood at 72.68%. The Bank ensured adequate flow of credit to the productive sectors of the economy. The Loans & Advances portfolio of the bank is well diversified and balanced.

2. CAPITAL & RESERVES

During the year, the bank transferred a sum of Rs.873.98 crore to Reserves (which includes Rs. 286.00 crore transferred to Statutory Reserves, Rs. 565.00 crore to Revenue and Other Reserves and Rs.6.98 crore to Capital Reserve) out of the profit for the year 2011-12. With this, capital & reserves as on March 31, 2012 have gone upto Rs.11942.50 crore as against Rs. 11097.14 crore as at end March 2011 and the ratio of Capital & Reserves to average working funds stood at 7.00% as on 31.03.2012 as against 7.62% as on 31st March 2011.

3. CAPITAL ADEQUACY RATIO

As on March 31. 2012 the Capital Adequacy Ratio of the Bank under Basel -II stood at 12.69% as against 14.23% as on 31st March, 2011. This is well above the regulatory minimum requirement of 9.00%.

4. FINANCIAL PERFORMANCE

The Bank has posted a total income of Rs. 17055.13 crore during the year as against Rs. 13047.89 crore last year thus registering an increase of Rs. 4007.24 crore (a growth of 30.71% during the fiscal 2011-12. Operating Profit of the Bank has decreased to Rs. 3140.58 crore as against Rs 3245.14 crore last year showing a marginal decline of 3.22% The Bank has earned a net profit of Rs. 1141.56 crore, after making all requisite provisions showing a decrease of Rs. 361.31 crore showing a decline of 24.04% during the fiscal 2011-12.

Financial performance including appropriation from the Net Profit is given on next page:-

Table 1: Financial Performance (Rupees in crore)

31.03.2012 31.03.2011

Interest Income 15814.88 12087.82

Other Income 1240.25 960.07

Total Income 17055.13 13047.89

Interest Paid 11599.09 7910.27

Operating Expenses 2315.46 1892.48

Total Expenses 13914.55 9802.75

Operating Profit 3140.58 3245.14

Provisions & Contingencies 1999.02 1742.27

Net Profit 1141.56 1502.87

Add-Profit brought forward 0.79 0.58

Net Profit available for 1142.35 1503.45 appropriation

APPROPRIATION

Transfer to Statutory reserve 286.00 376.00

Transfer to Revenue and 16.00 692.00 Other reserves

Transfer to Special Reserve 565.00 82.00 u/s 36(1)(viii) of I-T Act

Transfer to capital reserve 6.98 -

Proposed Dividend 230.49 303.43

Tax on Dividend 37.39 49.23

Balance carried over to 0.49 0.79 Balance Sheet

5. DIVIDEND

Your Bank's policy of declaring dividend is to reward the share holders as well as to plough back profit for maintaining a healthy capital adequacy ratio & for supporting future growth. Accordingly, your Directors are pleased to propose a total dividend of 79 % (i.e Rs.7.90 per share) for the year ended 31st March, 2012 as against 104 %(i.e. Rs.10.40 per share) paid for the preceding year.

6. SECTORAL DEPLOYMENT OF CREDIT TO PRIORITY SECTOR

Bank's advances to priority sector increased by Rs4875.83 crore from Rs. 35650.71 crore in March 2011 to Rs. 40526.54 crore in March 2012 registering a growth of 13.68%. The Priority Sector Advances constituted 42.26% of the Adjusted Net Bank Credit (ANBC) against the stipulation of 40%. The comparative position of advances under various segments under Priority Sector as at the end of March 2011 and March 2012 is as follows:

(Amount Rs in crore)

S.No. Sectors March 2011 March 2012

1. Priority sector credit 35650.71 40526.54

2. Agriculture 12721.13 15411.10

3. Direct Agriculture 8887.91 11860.40

4. Indirect Agriculture 3833.22 3550.70

5. SSI / SE 15844.45 17978.48

6. Educational Loan 1065.15 1123.99

7. Housing Loan 5979.69 5981.89

8. Other P.S. 40.29 31.08

6.1 Agriculture Advances

Bank's advances to agriculture increased by Rs.2689.97crore from 12721.13 crore in March 2011 to Rs.15411.10 crore in March 2012, registering a growth of 21.15%. The advances to direct agriculture segment increased by Rs.2972.49 crore from Rs .8887.91crore as on 31.3.2011 to Rs11860.40 crore as on 31.3.2012 constituting a growth of 33.44%. The Indirect agriculture advances decreased by Rs.282.52 crore from Rs.3833.22 crore as on 31.3.2011 to Rs.3550.70 crore as on 31.3.2012 showing an decrease of 7.37% due to change in norms of classification of indirect agriculture loans by R B I .

6.1.1. Flow of credit to Agriculture sector (Fresh disbursement) During the financial year 2011-12, fresh flow of credit to agriculture sector amounted to Rs. 9174.00 crore.

6.1.2. Small and Medium Enterprises (SMEs)

Bank's exposure to Small Enterprises sector stood at Rs.17978.48 crore at the end of March ,2012 and has shown an increase of Rs..2134.03 crore, recording a growth rate of 13.47%. Further, SME advances increased by Rs.2456.24 crore to Rs.20126.51crore registering a growth of 13.90% against the Year on Year growth stipulation of 20%. The Micro sector advances increased by Rs.929.42 crore to Rs.6046.37 crore posting a growth of 18.16%. Bank has entered into a MOU with NSIC for outsourcing credit proposals for lending.

6.1.3. Oriental Green Card (OGC) & Oriental Kisan Gold Card (OKGC)

During the Financial Year 2011-12, Bank has issued 1,22,233 cards to farmers to meet their credit requirement for crop production, repairing of agricultural machinery & equipment, working capital for allied activities, and consumption needs. The total amount of loan disbursed through these cards during the year was Rs.2829.72 crore.

6.1.4. Oriental Bank Grameen Project ( OBGP )

Bank is providing finance to rural poor under home grown model of micro finance viz. Oriental Bank Grameen Project. It is being implemented through Joint Liability Group concept consisting of 5 members in each group, preferably women.

The Bank has formed 4288 Groups reaching out to 21440 poor families spread across 251 villages. The cumulative amount advanced to these groups as at the end of March 2012 was Rs. 30.51 crore. Savings to the tune of Rs. 9.16 crore have been mobilized by the groups.

6.1.5. Advances to Weaker Sections

Advances to weaker sections, consisting of beneficiaries belonging to scheduled castes/scheduled tribes, small and marginal farmers, landless labourers, rural artisans, beneficiaries under Govt. Sponsored schemes (except PMRY) were of the order of Rs. 8702.69 crore as a the end of March 2012 as against Rs. 6221.02 crore as at the end of March 2011.

6.1.6. Credit under Differential Rate of Interest Scheme Credit flow at concessional rate of interest of 4% p.a. to the low- income group of the society both in rural and urban centres having annual family income upto Rs. 18,000/- and upto Rs. 24,000/- respectively was Rs. 59.52 crore as at the end of March 2012.

6.1.7. Loans to SCs/STs

Bank continues its thrust in providing financial assistance to SCs/STs beneficiaries. The advances to these beneficiaries improved to Rs 732.10 crore in March 2012 against Rs. 530.66 crore as at the end of March 2011.

6.1.8. Prime Minister Employment Generation Programme (PMEGP)

The Scheme has been implemented by the Government of India by merging the two existing schemes viz. PMRY and REGP w.e.f. 1st April 2008. The scheme aims for generation of employment opportunities through establishment of micro enterprises in rural as well as urban areas. The bank has sanctioned credit assistance to the tune to Rs 45.17 crores to 1085 applicants under the scheme during the year 2011-12.

6.1.9. Swaran Jyanti Shahri Rojgar Yojana (SJSRY)

For providing gainful employment to urban poor (living below the urban poverty line) through setting up self employment ventures, bank is providing financial assistance under the scheme since its inception. The bank sanctioned to 2436 beneficiaries to the tune of Rs.12.28 crores during 2011-12.

6.1.10. Swarn Jyanti Gram Swarojgar Yojana (SGSY)

The scheme is operative in rural areas of the country and cover the aspects of self employment such as organization of rural poor into Self Help Group (SHGs) training credit technology, infrastructure and marketing. The bank is participating in the schemes. During 2011-12 bank sanctioned financial assistance to 271 swarojgaries to the tune of 2.91 crore.

6.1.11. Credit Flow to Women Beneficiaries

Women are assuming greater responsibilities and playing an active role in the economic growth of the nation but remain under represented while receiving the credit delivery from the Financial Institutions of the country. So for strengthening of credit flow to women, Bank has implemented 13-points action plan as advised by the Government of India. Bank has designated 10 branches as specialized branches for women entrepreneurs.

A number of credit schemes, such as Oriental Mahila Vikas Yojana, Loan scheme for Professional & Self Employed Women, Loan scheme for Beauty Parlour/ Boutiques/ Saloons/ Tailoring, Scheme for Financing Working Women, etc. are designed by the bank especially for women. Besides, a special project called Oriental Bank Grameen Project (OBGP) provides all types of banking assistance to the rural poor women.

As a result the Bank's advance to women increased by Rs. 527 crore from Rs. 4279 crore as on March 2011 to Rs. 4806 crore as on March 2012 registering a growth of 12.31%. Bank's advances to women beneficiaries as on March 2012 was 5.01% of ANBC against the required stipulation of 5%.

6.1.12. Financial Inclusion

With a view to provide banking facilities in un banked villages, Bank has rolled out Financial Inclusion Plan in all the 569 allotted villages

with population more than 2,000. Bank has covered 492 villages through Business Correspondent model, 23 villages through Branch Model and 54 villages through Mobile Branch Model.

Bank has opened a total number of 4,38,314 No-Frill/ Other savings accounts in these 569 villages. Further 1,59,207 customers have been issued activated Bio-metric cards for extending IT enabled banking services.

Bank is also participating in distribution of Social Welfare scheme funds in 6 districts namely Amritsar, Muktsar, Gurdaspur (Punjab), Sriganganagar, Hanumangarh (Rajasthan) and Jind (Haryana). A total number of 2,75,766 beneficiaries have been issued Bio- metric cards/ Smart cards for distribution of benefits of Social Welfare schemes.

6.1.13 State Level Bankers Committee Responsibility

For the first time Bank has been bestowed with prestigious assignment of Convener - State Level Bankers' Committee for Delhi State by the Government of India from November, 2011. Bank has taken over reins from State Bank of India. There are 33 member banks of SLBC - Delhi State which include all prominent banks i.e. PSBs, Private Sector Banks and Coop Banks. Delhi State is served by 2544 branches of these member banks.

6.1.14. Lead Bank Responsibility

Bank is performing the functions of Lead Bank in three Districts namely Ferozpur in Punjab, Sriganganagar in Rajasthan and Palwal in Haryana.

6.1.15.OBC Rural Development Trust

Bank has set up a special purpose vehicle in the name of Oriental Bank Rural Development Trust (OBCRDT) for setting up Training Centres at various places across the country for imparting training for capacity building in rural areas. The Trust came into being on the 9th December 2005 as a registered body.

The main objective of the Trust is to establish training colleges/institutes and workshops for providing training for farmers on modern techniques of farming, tractor/farm machinery repair & maintenance and other aspects of agriculture/rural development; micro finance and capacity building of the rural youth and women.

Presently five OBCRSETIs (OBC Rural Self Employment Training Institutes) are functional at Dehradun, Sriganganagar, Jaipur, Ferozepur and Palwal. We have been allotted land by the State Governments in Chomu (Jaipur), Rajasthan, Zira (Ferozepur), Punjab, Jassowal (Dehradun) Uttrakhand, Manaksar (Sriganganagar) Rajasthan and Palwal, Haryana.

The RSETI building at Chomu was inaugurated by Shri. Namo Narain Meena Hon'ble Union Minister of State for Finance on 30.03.2011. Construction work is almost complete at Zira (Ferozepur). Govt of India has sanctioned an amount of Rs. 3 crores for constructions at Zira, Jassowal and Manaksar .

During the Financial Year 2011-12, a total of 170 training programmes were conducted and 5236 candidates were given training. Of these 62 were entrepreneurship development programmes on subjects like tailoring & dress designing, watershed management, phulkari embroidery, milch animal rearing, crop production, beauty parlour, medicinal plantation, etc which benefitted 1325 candidates. A total of 362 trained persons were credit linked for pursuing/setting up of economic activities. Emphasis is also given to train candidates from BPL strata of the society for which list of candidates is obtained by the centres from respective DRDA. Cumulatively these centres have conducted 753 training programmes since inception benefiting 25848 candidates

6.2 RETAIL CREDIT

Retail Credit segment continues to be the thrust area of lending. The bank is having 15 Retail Credit Schemes including Home loans to meet the requirements of various sections of the society. Our Retail Credit Schemes are customer friendly, competitive and specifically designed to suit all sections of the society. The Bank has revised the discretionary powers of field functionaries for quick disposal of loan application & also made our interest rate competitive.

6.3 EDUCATION LOAN

The Education Loan portfolio of the Bank stood at Rs. 1191.07 Crore as on 31.03.2012 and showed Y.O.Y Growth of 8.04%. Bank continued its efforts for extending education loans to students on soft terms & conditions and competitive rates besides 0.50% concessions in rate of interest to girl students are being given. During the year Bank has revised Education Loan Scheme as per IBA guidelines and has also launched new IBA formulated Education Loan for vocational courses.

7. TREASURY OPERATIONS:

The G-Sec yields hardened during FY 2011-12 owing to sticky inflation, higher Government borrowing and higher fiscal deficit. RBI raised Repo and Reverse Repo rates by 125 bps during FY 2011-12 to rein in inflation and prevent inflationary pressure building in the economy. The equity markets underperformed owing to bleak domestic and global economic scenario. The secondary market turnover has been Rs. 93,416.91 Crores in FY 2011-12. The net profit in the secondary market operations has been Rs.170.26 Crores during FY 2011-12. The Bank has not transferred any securities from 'Available for Sale' category to 'Held to Maturity' category and transferred Rs. 2263.84 Crores from 'Held to Maturity' category to 'Available for Sale' category during 2011-12, and in the process booked depreciation of Rs. 4.53 Crores. Bank also transferred securities amounting to Rs.0.85 crores from 'Held for Trading' to 'Available for Sale' category by booking depreciation of Rs.0.20 crores. The aggregate investments of the Bank have increased to Rs. 52,460.23 Crores in FY 2011-12 from Rs.49,623.69 crores previous financial year, an increase of 5.72%. The yield on investments has increased to 7.36 % from 7.21% last year (excluding income on RIDF deposits classified as Non-SLR investments) owing to rise in the yield of fixed income securities in the investment portfolio.

8. Merchant Banking Activities:

The Bank has been registered as Depository Participant with both NSDL & CSDL. More than 73,000 customers are availing the demat services of the Bank and PAN non-complaint zero balance accounts have been closed as per SEBI directive. The number of branches offering demat services are 307. The Bank is also offering online trading services in collaboration with IDBI Capital Market Services and Karvy Stock Broking Ltd. for its customers.

8.1 Applications supported by Blocked Amount (ASBA)

Our Bank has been registered with SEBI as Self Certified Syndicate Bank (SCSB) for providing Applications Supported by Blocked Amount (ASBA) facility to its customers. ASBA is an application containing an authorisation to block the application money in the bank account maintained with SCSB.

Under the ASBA facility, the application amount for subscribing to an issue (IPO/Rights issue), remains in the bank account of the customer till allotment is finalized and actual amount equal to allotted shares is only debited instead of total application amount.

The Bank is providing ASBA offline facility through 552 authorized branches across the country Online ASBA facility has also been started in March 2012. (From July, 2011 our Bank has started "Syndicate ASBA" operations and for that purpose there are 12 designated Syndicate ASBA branches.)*

9. Foreign Exchange Business

During the fiscal year 2011-12, Forex turnover increased to Rs 96,753.46 Crore as on 31.03.2012 as against Rs 66,912.60 Crore as on 31.03.2011, thus registering a growth of44.60%. The Export credit of the Bank stood at Rs 4,976 Crore as on 31.03.2012 as against Rs 4,356 Crore as on 31.03.2011, thus registering a growth of 14.23%. Bank has 94 Specialized Branches to conduct foreign exchange business. The total earning from foreign exchange Business registered a substantial increase to Rs 280.50 Crore for the year ended 31.03.2012 as against Rs 225.63 Crore during the financial year ended 31.03.2011 , registering a growth of 24.32% over the preceding financial year. The Bank has mobilized Non Resident deposits to the tune of Rs 2323 Crores as on 31.03.2012 as against Rs 1755 Crores for the year ended 31.03.2011, thereby registering a growth of 32.36% over the preceding financial year. The operations at Representative Office, Dubai has completed three years of operations, acting as a catalyst to canvass non- resident accounts of Indian Expatriates in UAE to expand the Non- resident customer base of the bank.

The Bank started selling 999.9 Gold coins in different denominations w.e.f 30.10.2010 through 68 Authorized Branches. During the current financial year, the Authorized Branch network to sell Gold coins has been increased to 216 Branches covering all the Regions of the Bank. Bank has sold 18480 gold coins weighing 136.19 kg and earned a net profit of Rs 1.86 Crore during the F.Y 2011-12, as against 0.37 Crore during the previous F.Y 2010-11.

10. THIRD PARTY PRODUCTS:

10.1 Life Insurance Business (JV):

During FY 2011-12, the Bank has sold 28318 policies with First Premium Collection of Rs. 100.28 Crores and has earned commission of Rs. 14.41 Crores (Net).

10.2 General Insurance Business:

In General Insurance Business, the Bank has again registered a steady growth and has collected a Premium of Rs. 33.36 Crores earning a Commission of Rs. 3.68 Crores.

10.3 Oriental Bank Mediclaim Policy :

Our Bank signed an MoU with Oriental Insurance Company on 3rd Oct'2011 and launched the Oriental Bank Mediclaim Policy. The Product has been designed exclusively for OBC Customers and available in all OBC Branches across the country. During the period from 03.10.2011 to 31.03.2012, 9976 policies have been sold by the Bank.

10.4 Mutual Fund Business:

The Bank has Tie Up with 6 Asset Management Companies (AMCs) for selling different Mutual Fund products. During the FY 2011-12, the Bank has collected AUM of Rs. 57.45 Crores by selling Mutual Fund Products and earned income of Rs. 43.09 Lacs under this segment.

10.5 New Pension Scheme (NPS):

Pension Fund Regulatory and Development Authority (PFRDA) has appointed our Bank as Points of Presence (POP) w.e.f. 01.05.2009 for the purpose of subscribing to New Pension Scheme (NPS) for all citizens of India. Total 505 branches are registered to act as POP-SPs as on 31.03.2012 and 183 NPS accounts have been opened till 31.03.2012.

10.6 Demat Accounts:

The Bank is a Depository Participant for both NSDL and CDSL. As on 31.03.2012, our Bank has 73861 Demat accounts and has generated a revenue of Rs.3.72 Crores during FY 2011-12. The Bank has tied up with M/s IDBI Capital Market Services Ltd. & M/s Karvy Stock Broking Limited for providing Online Trading services to its Demat Account holders through 297 Demat Authorized Branches.

10.7 Gold Coins:

The Retail sale of Gold Coins in different denominations (5 grams, 8 grams & 10 grams) was launched on 30.10.2010 in our Bank. During the FY 2011-12, our Bank has sold 18480 Gold Coins through 216 designated branches across all the 30 Regions and earned a profit of Rs. 1.86 Crores.

10.8 UID Cards:

The Bank has entered into MoU with Unique Identification Authority of India (UIDAI) on 11.08.2010 as Registrar for issuing UID-Aadhaar Number to Residents of India. Bank has successfully completed more than 19.80 Lac UID enrolments all over India out of which approximately 16.75 lac UID were issued through our Bank till 31.03.2012. Bank has booked and earned a profit of Rs. 3.79 crore till 31st March, 2012.

10.9 Cash Management Services (CMS):

The Bank provides an efficient and tailor-made CMS solution to suit the customer requirements. The Bank is offering Collections, Payments and Custodial Services to the Customers under Cash Management Services. The Bank has coverage of more than 126 cities through own Branches and 500 Locations through Correspondent arrangements offering CMS services to clients across the country. The Bank has registered a turnover of above Rs. 910.41 Crores and earned Non-Interest income of Rs.1.27 Crore during FY 2011-12.

10.10 SBI-OBC Co-Branded Credit cards

Our Bank signed an MoU with SBI Cards on 14th Sep'2011 and launched the Co-Branded Credit Cards on 22nd Oct'2011.There are two types of Credit Cards to be issued: (i)SBI-Oriental Bank of Commerce Gold & More (ii) SBI-Oriental Bank of Commerce Platinum. The cards is being issued in two variants:1.Secured 2.Unsecured. For sourcing unsecured credit cards, 18 Regions and 455 Branches have been mapped. Secured Cards can be issued in all the branches. As on 31.03.2012, 8550 unsecured cards are sourced by our branches out of which 5910 cards were issued.

10.11 e-Stamping services

The Bank signed MoU with Stock Holding Corporation of India Ltd. (SHCIL) on 27.07.2011 to act as Authorized Collection Centre (ACC) for e-Stamping services. It has already started in 8 branches of Gujarat and 1 branch of Karnataka. The Bank has also received the approval from Govt. of NCT of Delhi for starting e-Stamping services in Delhi.

11. BRANCH EXPANSION

During 2011-12, the Bank has opened 147 new branches besides up gradation of 5 Extension Counters. As on 31.03.2012, the total number of branches stood at 1772 as against 1620 as on 31.03.2011. The population group-wise classification of branches is as under :

S.N. Classification 31.03.2012 31.03.2011

1 Rural 369 334

2 Semi-Urban 482 423

3 Urban 524 489

4 Metropolitan 397 374

Total 1772 1620

12. CUSTOMER SERVICE

The Bank in its endeavor to achieve excellence in customer service has started many customer friendly services viz. Mobile Banking (OBCMPAY) besides Internet Banking Services both for individuals and corporates, SMS alert service, Cheque/Cash deposit facility through some of the Bank's ATMs. Funds transfer through ATMs, RTGS/NEFT, facility of Cheque Status Inquiry and Stop cheque payment available 24x7 on Bank's ATMs, deployment of Point of Sale (POS) Terminals at the identified prospective Merchant Establishments, State-of-the-Art e-Lobbies at select centres, Electronic Cheque deposit machines at some of the branches to facilitate cheque deposit with acknowledgment generated by the machine itself, online payment of service taxes etc. These services are helpful for the customers to get their transactions done speedily and easily. For Senior Citizens customers there is provision for separate queue in the branches. The Bank has adopted and implemented voluntary codes of BCSBI for individual customers , Fair Practice code for lenders, Micro and Small Enterprise (MSEs) code to provide fair , transparent and quality service to all the customers and to provide greatest satisfaction to the customers. The codes are displayed on the Bank's website for information and printed copies are also available at branches for customers information. The updated information on Bank's Deposit Schemes, Loan Schemes, Citizen's Charter, Banking Ombudsman, SSI Charter, Forex Remittances, Service Charges and Bank's Policies viz Financial Inclusion Policy, Cheque Collection and Compensation Policy, Grievance Redressal Policy, Policy on Collection of dues & Repossession of Security etc. have been displayed in Public domain of Bank's website. These are also available at branches in booklet/pamphlet form. "Query & Suggestion" link is provided on website to get feedback from customers. Complaint/Suggestion Boxes are provided at branches where a customer can drop his/her complaint or suggestion.

The Customer Service Meetings are being held regularly at Branch level , Regional Office level and Head Office level. These meetings ensure the proper implementation of guidelines issued by regulatory authorities. The customers are invited to attend these meetings and give their valuable suggestion/feedback on bank's services and schemes. The Bank is committed to give excellent customer service for the customers' maximum satisfaction.

Web-based Customer Grievance Redressal system is provided for prompt redressal of customers grievances. A dedicated Customer Care Centre on toll free Number 1800-180-1235 has been set up for clarifying the customers account related and other queries.

13. KNOW YOUR CUSTOMER (KYC) NORMS & ANTIMONEY LAUNDERING (AML) MEASURES

To comply with the various laws and regulations, national as well as international, Govt. of India and Reserve Bank of India directives / instructions & guidelines, primarily to prevent the bank from being used, intentionally or unintentionally, by criminal elements for money laundering activities, OBC 'KYC' Policy has been formulated. The Policy combines four key elements viz. "Customer Acceptance Policy", "Customer Identification Procedures", "Monitoring of Transactions" and "Risk Management". This will enable the bank to know / understand the customers and their financial dealings better and shall further help in managing risks more prudently. The detailed guidelines and subsequent instructions are being reiterated from time to time for strict compliance by the field functionaries. The bank is already complying with the requirement of submission of statutory returns to the FIU-IND as a sequel to the new legislation on Prevention of Money Laundering Act-2002. The Bank has already operationalised Anti-Money Laundering software solution for complying with KYC Norms / AML Measures and generation of alerts to detect any suspicious transaction. Alerts are being scrutinized by us and STRs are being submitted to FIU-IND. Bank is also submitting all the required data/returns relating to KYC/AML to the regulatory bodies.

14. USE OF HINDI IN THE BANK

During the year 2011-12, Bank continued its concerted efforts to accelerate use of Hindi and implement the guidelines/directives received from Govt. of India and Reserve Bank of India. Concrete and effective steps were taken to achieve the region wise targets set in the Annual Programme- 2011-12 by the Department of Official Language, Ministry of Home Affairs, Govt. of India Bank was awarded Consolation prize in 'B' region under Reserve Bank Rajbhasha Shield Competition 2010-11 for Public Sector Banks/Financial Institutions for its excellent performance in the field of Rajbhasha Hindi. Bank was awarded Third Prize for doing good work in Hindi under Inter Bank Rajbhasha Shield Competition - 2010-11 and our Bank's In-House Magazine AADHAAR was awarded Third Prize by the Delhi Bank's Town Official Language Implementation Committee. Besides, our Regional Offices, Ludhiana & Jaipur were awarded Second Prize by Town Official Language Implementation Committees, Ludhiana & Jaipur respectively. Branch Office Coimbatore was awarded Second prize by TOLIC Coimbatore for doing excellent work in Hindi.

Drafting & Evidence Sub-Committee of the Committee of Parliament on official Language held discussions on progress made in use of Hindi with Regional Head, Jaipur on 20.09.2011 and appreciated the work being done in Hindi in the Bank.

Bank continued its efforts to promote use of Hindi in field of Information Technology. Rules and Directives regarding Official Language Policy, English-Hindi Banking Glossary, Bilingual Softwares and Templates of routine Hindi letters of various departments were provided online at OBC Web Portal to facilitate working in Hindi. Officers/ Employees were imparted training to work on computer in Hindi and send e-mail in Hindi with the help of Unicode. Bilingual Software Script Magic was installed in the branches of the Bank to provide banking facilities to customers in Hindi . Job -Cards regarding working in Hindi in Finacle were made available on Portal . Bank's e-circulars and Executive's messages, policies, deposit / loan schemes, retail schemes, Power chart, Finacle menues, branch directory, ATM list etc. were made available in Hindi on OBC web portal. Bank's Website is available in Hindi and English.

Hindi-Day and Hindi-Fortnight were celebrated in different offices / branches of the Bank in the month of September,2011 and various Hindi competitions were conducted for the staff members. An All India Hindi Essay Competition was conducted by the Head Office. Bank also conducted an Inter Bank Hindi Essay Competition under the auspices of Delhi Banks Town Official Language Implementation Committee. The winners of the competitions were awarded certificates & prizes. Besides, our staff members won prizes in various Inter Bank competitions too.

Bank's quarterly In-House Magazine "AADHAAR" was published regularly in bilingual form i.e. in Hindi and English.

15. RECOVERY:

The Bank has made concerted efforts for recovery of NPAs and as a result of this the Bank could make Cash Recovery of Rs.945.64 Crore during the Financial Year 2011-12. Out of the said Cash Recovery, a sum of Rs.323.07 Crore has been added as recovery towards the Revenue of the Bank. Further, all the available recovery mechanism have been utilized by the Bank, viz. holding of Recovery Camps, floating of "Special One Time Settlement Schemes for NPAs with O/S upto Rs. 5.00 Lakh" and with O/S upto Rs. 10.00 Lakh, participating in Lok Adalats, taking action under SARFAESI Act-2002, initiating legal action in the competent Courts of Law and settling of cases under general settlement policy of the Bank. However, the impact of global recession, Indian economy has also been affected adversely and the NPAs of the Bank has increased in comparison to the previous financial year resulting in increase in Gross NPA percentage to gross advances to 3.17% against 1.98% of corresponding F.Y. The Net NPA of the bank has also increased to 2.21% against 0.98% of corresponding F.Y.

The Bank is taking all possible efforts to strengthen the recovery mechanism to minimize the higher delinquencies

16. HUMAN RESOURCE DEVELOPMENT & TRAINING

Indian banking industry is governed by the policies and priorities of the Government, directives of Reserve Bank of India and Banking Regulation Act, 1949. Banking activities are guided by economic and social conditions of the masses.

The training plan for 2011-12 has been prepared keeping in view the above objectives and various task / challenges before the Bank. In the midst of the above the Bank has also drawn a tagline for training during the year "Attitude comes first". The idea is to bring attitudinal change among staff members with customer centric approach. The Bank was able to meet the above objective to a large extent. The focus of training during the year was on the following areas:

Credit Management, Risk Management, Forex Management, Customer Relationship Management, NPA & Recovery Management, Agriculture Financing & Rural Development, Retail Banking Products; Financial Inclusion; Management Development Programme for Executives; Soft Skills Development, Workshops on HRMS; CBS & IT Products, SC/ST/OBC Reservation Policy etc.

In 677 programmes 15761 employees were imparted training in the above streams and other areas of Banking. In addition, 861 officers were nominated in Advanced Training Programmes in key operational and behavioural areas in pioneer institutions like NIBM, Pune, College of Agricultural Banking, Pune; IBA, Mumbai; IDRBT, Hyderabad; NIBSCOM, Noida etc. Few Senior and Top Management functionaries were deputed for overseas training for Management Development Programmes/ Conferences/ Seminars to give exposure to International best practices and their impact in Indian Banking.

During the year 2011-12, the Bank recruited 452 Probationary Officers, 1327 Clerks, 159 Subordinate Staff and 311 Specialist Officers in different grades and streams such as Sr. Manager (FA), Manager (IT), Marketing Managers, Manager (FA), Manager (Credit & Risk), Manager (Law), Officer (IT), Officer (FA), Agriculture Officers, etc. The Bank further during the ensuing year plan to recruit around 1100 employees. The total staff strength as on 31st March, 2012 is 18371 comprising of 9440 Officers, 5949 Non-subordinate and 2982 Subordinates. The Bank also promoted 955 employees to different cadre during the year 2011-12.

The Bank complied with Government guidelines in respect of reservation in recruitment and promotion for SC/ST/OBC/ PWD/Ex-Servicemen in letter and spirit. The Bank recruited 1132 SC/ST/OBC category personnel in Officer, Clerical & Subordinate cadres during the year. The grievances of SC/ST/OBC employees, if any, were resolved through SC/ST and OBC Cells created at all Regional Offices and at Head Office with the coordination of Liaison Officers/Chief Liaison Officer.

BOARD OF DIRECTORS

During 2011-2012, 12 meetings of Board of Directors, 22 meetings of Management Committee of Board, 11 meetings of Audit Committee of Board, were held.

During the year, Sh.S L Bansal, Chairman and Managing Director, took charge of the Bank on 01.03.12 after the superannuation of Sh. Nagesh Pydah. Smt Sreya Guha, joined the Board of the Bank as Government of India Nominee Director under Sec 9 (3) (b) of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980. Sh.C.P.Singh and Sh.K.S.Sreenivasan, joined the Board of the Bank on 22.09.2011 and 23.09.2011 as Part-time Non-Official Director and Chartered Accountant Director respectively, appointed by Government of India under Section 9 (3) (h) and Section 9 (3) (g) of the Banking (Acquisition and Transfer of Undertakings ) Act, 1980.

Sh.T Valliappan, Dr.Abha Chaturvedi and Sh.P B Santhanakrishnan were elected as Shareholder Directors, also joined the Board of the Bank w.e.f 30.09.2011, under Sec 9 (3) (i) of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980.

DIRECTOR'S RESPONSIBILITY STATEMENT

The Directors confirm that, in the preparation of the Annual Accounts for the year ended 31st March, 2012

a) the applicable standards have been followed along with proper explanation relating to material departures, if any,

b) the accounting policies framed in accordance with the guidelines of the Reserve Bank of India, were consistently applied,

c) reasonable and prudent judgment and estimates were made so as to give true and fair view of the state of affairs of the Bank at the end of financial year and of the profits of the Bank for the year ended on 31st March, 2012,

d) proper and sufficient care was 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.

ACKNOWLEDGEMENTS

The Board of Directors thanks Government of India, Ministry of Finance, Department of Economic Affairs and Reserve Bank of India and other Government & Regulatory Agencies for their valuable guidance and continued support provided to the Bank throughout the year. The Board of Directors are also grateful to the valued customers, esteemed shareholders, stakeholders and public at large for their patronage and confidence reposed in the Bank.

The Board of Directors place on record their great appreciation of the commitment, sense of involvement and dedication exhibited by each staff member in the overall development, growth and prosperity of the Bank and look forward to their continued support and whole-hearted co-operation for realization of the corporate goals in the year ahead.

For and on behalf of the Board

New Delhi (S.L. BANSAL)

30th April 2012 CHAIRMAN & MANAGING DIRECTOR


Mar 31, 2011

The Board of Directors have pleasure in presenting this Annual Report together with the Audited balance Sheet and Profit & Loss Account of the Bankforthe year ended 31st March, 2011.

1. BUSINESSOPERATIONS

The Business of the Bank stood at Rs. 235893.16 crore on 31st March 2011 as against Rs. 204441.53 crores in the previous year. Total deposits of the Bank stood at Rs. 139054.26 crore and have shown an increase of Rs. 18796.67 crore depicting a growth of 15.63%. Cost of deposit stood at 6.03% as against 6.57% for financial year 2009-10. The Bank has taken conscious decision of shedding high cost deposit and substituting the same with normal rate and lower cost deposits so as to contain the cost of deposits. On the other hand, net advances as at 31st March 2011 stood at Rs. 95908.22 crore, registering a growth of 14.87%. During the fiscal 2010-11, yield on advances has increased to 10.32% from previous years level of 10.20%. The measures taken up by the bank to improve yield on advances through lending to SME, Mid Corporate and Retail sector besides implementation of Base Rate has enabled the bank to improve the yield on advances.

The credit deposit ratio of the Bank, as at 31st March 2011, stood at 69.73% . The Bank ensured adequate flow of credit to the productive sectors of the economy. The Loans & Advances portfolio of the bank is well diversified and balanced. The Bank has ensured that its exposure to sensitive sectors such as Capital Markets, Real Estate, NBFCs etc. is well within the regulatory & prudential cap.

2. CAPITAL & RESERVES

During the year, the bank transferred a sum of Rs.1150 crore to Reserves (which includes Rs. 376.00 crore transferred to Statutory Reserves, Rs. 774.00 crore to Revenue and other Reserves) out of the profit for the year 2010-11. With this, capital & reserves as on March 31, 2011 have gone upto Rs.11097.14 crore as against Rs. 8237.95 crore as at end March 2010 and the ratio of Capital & Reserves to average working funds stood at 7.62% as on 31.03.2011 as against 6.61% as on 31st March 2010.

3. CAPITAL ADEQUACY RATIO

As on March 31. 2011 the Capital Adequacy Ratio of the Bank under Basel -II stood at 14.23% as against 12.54% as on 31st March, 2010(under Basel-ll). This is well above the regulatory minimum requirement of 9.0%.

4. FINANCIAL PERFORMANCE

The Bank has posted a total income of Rs. 13047.89 crore during the year as against Rs. 11457.17 crore last year thus registering an increase of Rs. 1590.72 crore (a growth of 13.88% during the fiscal 2010-11. Operating Profit of the Bank has increased to Rs. 3245.14 crore as against Rs 2421.50 crore last year showing a growth of 34.01 % The Bank has made a net profit of Rs. 1502.87 crore, after making all requisite provisions showing an increase of Rs. 368.19 crore (growth of 32.45%) during the fiscal 2010-11.

Appropriation from the Net Profit have been effected as per table given on next page:-

Table 1: Financial Performance (Rupees in crore)

31.03.2011 31.03.2010

Interest Income 12087.82 10257.13

Other Income 960.07 1200.04

Total Income 13047.89 11457.17

Interest Paid 7910.27 7349.69

Operating Expenses 1892.48 1685.98

Total Expenses 9802.75 9035.67

Operating Profit 3245.14 2421.50

Provisions & Contingencies 1742.27 1286.82

Net Profit 1502.87 1134.68

Add-Profit brought forward 0.58 0.83

Net Profit available for 1503.45 1135.51 appropriation

APPROPRIATION

Transfer to Statutory reserve 376.00 284.00

Transfer to Revenue and 692.00 351.00

Other reserves

Transfer to Special Reserve 82.00 60.00 u/s36(1)(viii) of I-T Act

Transferto capital reserve -- 173.19

Proposed Dividend 303.43 227.99

Tax on Dividend 49.22 38.75 Balance carried over to 0.79 0.58 Balance Sheet

5. DIVIDEND

Your Banks policy of declaring dividend is to reward the share holders as well as to plough back profit for maintaining a healthy capital adequacy ratio & for supporting future growth. Accordingly, your Directors are pleased to propose a total dividend of 104 % (i.e Rs.10.40 per share)for the year ended 31st March, 2011 as against 91 %(i.e. Rs.9.10 pershare) paid for the preceding year.

6. SECTORAL DEPLOYMENT OF CREDIT TO PRIORITY SECTOR

Banks advances to priority sector increased by Rs. 6267.10 crore from Rs. 29383.61 crore in March 2010 to Rs. 35650.71 crore in March 2011 registering a growth of 21.33%. The Priority Sector Advances constituted 42.70% of the Adjusted Net Bank Credit (ANBC) against the stipulation of 40%. The comparative position of advances under various segments under Priority Sector as at the end of March 2010 and March 2011 is as follows:

(Amount Rs. in crore) S.No. Sectors March 2010 March 2011

1. Priority sector credit 29383.61 35650.71

2. Agriculture 11267.51 12721.13

3. DirectAgriculture 6564.47 8887.91

4. Indirect Agriculture 4703.04 3833.22

5. SSI/SE 10868.81 15844.45

6. Educational Loan 942.72 1065.15

7. Housing Loan 6258.03 5979.69

8. Other P.S. 46.544 0.29

6.1 Agriculture Advances

Banks advances to agriculture increased by Rs. 1453.62 crore from Rs.11267.51 crore in March 2010 to Rs.12721.13 crore in March 2011, registering a growth of 12.90%. The advances to direct agriculture segment increased by Rs.2323.44 crore from Rs.6564.47crore as on 31.3.2010 to Rs.8887.91 crore as on 31.3.2011 constituting a growth of 35.39%. The Indirect agriculture advances decreased by Rs.869.82 crore from Rs.4703.04 crore as on 31.3.2010 to Rs.3833.22 crore as on 31.3.2011 showing an decrease of 18.49% due to change in norms of classification of indirect agriculture loans by RBI.

6.1.1. Flow of credit to Agriculture sector (Fresh disbursement) During the financial year 2010-11, fresh disbursement of credit to agriculture sector amounted to Rs. 6947.06 crore. During the year, a total of 221651 new agriculture loan accounts were added. There was an average addition of 293 new agriculture loan accounts per rural and semi-urban branch against stipulation of 250 acconts.

6.1.2. Hi-Tech Dairy

The bank is providing credit to rural youths for their self employment under Hi Tech commercial dairy scheme. Under the scheme State Government Agencies / Dairy Development Boards impart one month training to unemployed youth for their skill upgradation. As on 31.03.11, an amount of Rs. 84.03 Crore has been sanctioned to 722 units.

6.1.3. Oriental Saur Urja Dohan Scheme

With a view to exploit the extensive use of unconventional energy resources and reduce the dependence on limited fossil fuel, the bank is implementing a scheme for financing solar water heating & lighting system, for creating a viable alternate to conventional source of energy. The scheme is open to individual, institutional, commercial and industrial users. Bank is also providing loan for solar water heating system, under MNRE scheme of IREDA. The bank finance for Solar Water Heating System amounted to Rs. 25.79 Lac under MNRE tie up arrangement and bank claimed subsidy of Rs. 4.83 Lac during the year.

6.1.4. Small and Medium Enterprises (SMEs)

Banks exposure to Small Enterprises sector reached at Rs.15844.45 crore at the end of March 2011 with an increase of Rs. 4975.64 crore (Y-o-Y growth 45.78%) over Rs. 10868.81 crores as on March 2010. Further, SME advances increased by Rs. 5098.97 crore to Rs. 17670.27 crore registering a growth of 40.56% against the stipulation of 20%. The Tiny/ Micro sector advances increased by Rs. 1750.72 crore to Rs.5116.95 crore posting a growth of 52.01 %.

Bank has a MOU with NSIC for outsourcing credit proposals. The Bank has a tie-up arrangement with SME Rating Agency of India Ltd. (SMERA) for providing comprehensive rating services of SMEs borrowers of the Bank at subsidized rates.

6.1.5. Oriental Green Card (Kisan Credit Card) & Oriental Kisan Gold Card (OKGC)

During the Financial Year 2010-11, Bank has issued 1,02,206 cards to farmers to meet their credit requirement for crop production, repairing of agricultural machinery & equipment, working capital for allied activities, to repay their old debts taken from non institutional money lenders and consumption needs. The total amount of loan disbursed through kisan credit cards during the year was Rs.2089.69 crore. At the end of financial year 2010- 11, the total number of cards issued to farmers rose to 754734.

6.1.6. Oriental Bank Grameen Project (OBGP)

Bank is providing finance to rural poor under home grown model of micro finance viz. Oriental Bank Grameen Project. It is being implemented through Joint Liability Group concept consisting of 5 members in each group, preferably women. The Bank has formed 3327 Groups reaching out to 16136 poor families spread across 256 villages in the states of Pubjab, Haryana, Rajasthan, Uttar Pradesh and Uttarakhand. The cumulative amount advanced to these groups as at the end of March 2011 was Rs. 30.88 crore. Savings to the tune of Rs. 8.76 crore have been mobilized by the groups.

6.1.7. Advances to Weaker Sections

Advances to weaker sections, consist of beneficiaries belonging to scheduled castes/scheduled tribes/small and marginal farmers/ landless labourers/rural artisans/minority community/ beneficiaries under Govt. Sponsored schemes (except PMEGP) reached to Rs. 6221.02 crore as a the end of March 2011 as against Rs. 4131.25 crore as at the end of March 2010 registering growth of 50.58%.

6.1.8. Credit under Differential Rate of Interest Scheme Credit flow at concessional rate of interest of 4% p.a. to the low- income group of the society both in rural having annual family income upto Rs. 18,000/- and urban having annual family income upto Rs. 24,000/- centres was Rs. 73.52 crore as at the end of March 2011.

6.1.9. Loans to SCs/STs

Bank continues its thrust in providing financial assistance to SCs/STs beneficiaries. The advances to these beneficiaries improved to Rs.530.66 crore in March 2011 against Rs. 421.03 crore as at the end of March 2010.

6.1.10. Prime Minister Employment Generation Programme (PMEGP)

The Scheme has been implemented by the Government of India by merging the two existing schemes viz. PMRY and REGP w.e.f. 1M April 2008. The scheme aims for generation of( employment opportunities through establishment of micro enterprises in rural as well as urban areas. The bank has sanctioned credit assistance to the tune to Rs.75.47 crores to 1260 applicants under the scheme during the year 2010-11 against allocated target of benefiting 1497 persons.

6.1.11. Swaran Jyanti Shahri RojgarYojana (SJSRY)

For providing gainful employment to urban poor (living below the urban poverty line) through setting up self employment ventures, bank is providing financial assistance under the scheme since its inception. The bank sanctioned to 2339 beneficiaries to the tune of Rs.12.18 crores during 2010-11.

6.1.12. Swarn Jyanti Gram SwarojgarYojana (SGSY)

The scheme is operative in rural areas of the country and cover the aspects of self employment such as organization of rural poor into Self Help Group (SHGs) training credit technology, infrastructure and marketing. The bank is participating in the schemes. During 2010-11 bank sanctioned financial assistance to 2015 swarojgaries to the tune of 16.69 crore.

6.1.13. Credit Flow to Women Beneficiaries

Women are assuming greater responsibilities and playing an active role in the economic growth of the nation but remain under represented while receiving the credit delivery from the Financial Institutions of the country. So for strengthening of credit flow to women, Bank has implemented 13-points action plan as advised by the Government of India. Bank has designated 10 branches as specialized branches for women entrepreneurs. A number of credit schemes, such as Oriental Mahila Vikas Yojana, Loan scheme for Professional & Self Employed Women, Loan scheme for Beauty Parlour/ Boutiques/ Saloons/ Tailoring, Scheme for Financing Working Women, Oriental Swaran Yojana etc. are designed by the bank especially for women. Besides, a special project called Oriental Bank Grameen Project (OBGP) provides all types of banking assistance to the rural poor women.

As a result the Banks advance to women increased by Rs.632.29 crore from Rs. 3646.69 crore as on March 2010 to Rs. 4278.98 crore as on March 2011 registering a growth of 17.33%. Banks advances to women beneficiaries as on March 2011 was 5.12% of ANBC against the required stipulation of 5%.

6.1.14. Financial Inclusion

With a view to provide banking facilities to the sections of society so far deprived from the formal financial sector, Bank has rolled out Financial Inclusion Plan in 300 allotted villages with population more than 2,000 through Business Correspondent model. Bank is providing services to people in these villages at their doorsteps using biometric cards and hand held devices (POS).

In these 300 villages 77,940 Financial Inclusion Plan (FIP) customers have been enrolled for issuance of Bio-metric card; out of which 25,823 customers have been issued activated Bio-metric card for extending banking services.

Further, Bank is also implementing project of distribution of Social Welfare scheme funds in 6 districts namely Amritsar, Muktsar, Gurdaspur (Punjab), Sriganganagar, Hanumangarh (Rajasthan) and Jind (Haryana). A total number of 1,66,146 beneficiaries have been issued Bio-metric cards/ Smart cards for distribution of benefits of Social Welfare schemes under Urban Financial inclusion bank has issued 1158 biometric cards to Kalkaji Agri Mandi labourers.

6.1.15. Lead Bank Responsibility

Bank is performing the functions of Lead Bank in three Districts namely Ferozpur in Punjab, Sriganganagar in Rajasthan and Palwal in Haryana.

6.1.16.0BC Rural Development Trust

Bank has set up a special purpose vehicle in the name of Oriental Bank Rural Development Trust (OBCRDT) for setting up Training Centres at various places across the country for imparting training for capacity building in rural areas. The Trust came into being on the 9th December 2005 as a registered body.

The main objective of the Trust is to establish training colleges/institutes and workshops for providing training for farmers on modern techniques of farming, tractor/farm machinery repair & maintenance and other aspects of agriculture/rural development; micro finance and capacity building of the rural youth and women.

Presently four OBCRSETIs (OBC Rural Self Employment Training Institutes) are functional at Dehradun, Sriganganagar, Jaipur and Ferozepur.

We have been allotted land by the State Government in Chomu (Jaipur), Rajasthan and Zira (Ferozepur), Punjab. The RSETI building at Chomu was inaugurated in the hands of Shri. Namo Narain Meena Honble Union Minister of State for Finance on 30.03.2011. Construction work is also in full swing at Zira (Ferozepur). Govt of India has sanctioned an amount of Rs. 2 crores for constructions of two centres. Trust is also in the process of setting up training centre in the Palwal district of Haryana.

During the Financial Year 2010-11, a total of 177 training programmes were conducted and 5379 candidates were given training. Of these 50 were entrepreneurship development programmes on subjects like tailoring & dress designing, watershed management, phulkari embroidery, milch animal rearing, crop production, beauty parlour, medicinal plantation, etc which benefitted 1325 candidates. A total of 457 trained persons were credit linked for pursuing/setting up of economic activities. Emphasis is also given to train candidates from BPL strata of the society for which list of candidates is obtained by the centres from respective DRDA. Cumulatively these centres have conducted 588 training programmes since inception benefiting 20586 candidates.

6.1.17. Financial Literacy & Credit Counselling (FLCC)

Bank has established 2 FLCC centers in District Karnal and Palwal in the state of Haryana. These centres are being manned by counselors who provide preventive and curative debt counselling within the district. As on March 2011, 795 persons benefitted from the FLCC. Further 5 seminars on preventive debt counselling were conducted.

6.2. Retail Credit

Retail Credit segment continues to be the Thrust area of lending. The Bank is having 10 Retail Credit Scheme including Home loans to meet the requirements of various sections of the society. Our Retail Credit Schemes are customer friendly, competitive and specifically designed to suit all sections of the society. The Bank has been formulating customized schemes and is also having tie- ups with various reputed builders and auto manufacturers to boost its Retail segment.

6.3. Education Loan

The education loan portfolio of the Bank stood at Rs. 1102.44 crore as on 31.03.11 and showed Y.O.Y. Growth of 13.45%. Bank continued its efforts for extending education loans to students on soft terms & conditions and competitive rates besides 0.50% concessions in rate of interest is being given to girl students. During the admission season, education loan camps were organized in the campus of the educational institutions.

7. TREASURY OPERATIONS:

The G-Sec yields hardened across the curve owing to stubbornly higher inflation and tighter system liquidity. During the FY 2010-11, RBI raised Repo rates by 175 bps and Reverse Repo by 225 bps in a calibrated manner to reign in inflation and prevent inflationary pressure building in the economy. The Equity market remained positive on account of global economic recovery and strong growth reported by domestic companies. The secondary market turnover has been Rs. 85,626.03 crore in FY 2010-11.The net profit in the secondary market operations has been Rs. 78.06 crores during the FY 2010-11. During the FY 2010-11 Bank has shifted government securities having book value Rs. 1720.17 crores from Available for sale(AFS) category to Held to Maturity (HTM) category, and shifted securities having book value Rs 962.34 crores from Held to Maturity (HTM) to Available for Sale (AFS) category, and in the process booked depreciation of Rs. 64.05 crores. The aggregate investments of the Bank have increased to Rs 42,153.04 crores in FY 2010-11 from Rs 35785.32 crores last year, an increase of 17.8%. The yield on investments has increased to 7.21% from 7.08% last year owing to rise in the yield of Fixed income securities in the investment portfolio.

8. MERCHANT BANKING ACTIVITIES:

The Bank has been registered as Depository Participant with both NSDL & CSDL. More than 76,000 customers are availing the demat services of the Bank and PAN non-complaint zero balance accounts have been closed as per SEBI directive. The number of branches offering demat services has gone up to 307 during the year 2010-11. The Bank is also offering online trading services in collaboration with IDBI Capital Market Services Ltd. for its customers.

During the fiscal year, the Bank raised Tier I Capital through issue of Innovative Perpetual Debt Instrument aggregating Rs.300 crore on private placement basis at the coupon of 9.05% p.a with a step up of 50 bps after 10 years in case the call option is not exercised. The Bonds were allotted to 23 subscribers on 17.09.2010.

During the fiscal year, the Bank also raised Tier II Capital through issue of Unsecured Redeemable Non-Convertible Subordinated Upper Tier-ll Bonds aggregating Rs.200 crore on private placement basis at the coupon of 8.68% p.a with a step up of 50 bps after 10 years in case the call option is not exercised. The Bonds were allotted to 6 subscribers on 20.09.2010. 8.1 Applications supported by Blocked Amount (ASBA) Our Bank has been registered with SEBI as Self Certified Syndicate Bank (SCSB) for providing Applications Supported by Blocked Amount (ASBA) facility to its customers. ASBA is an application containing an authorisation to block the application money in the bank account maintained with SCSB. Under the ASBA facility, the application amount for subscribing to an issue (IPO/Rights issue), remains in the bank account of the customer till allotment is finalized and actual amount equal to allotted shares is only debited instead of total application amount. The Bank is providing ASBA offline facility through 552 authorized branches across the country. Online ASBA facility has also been started in March 2011 for internet banking customers.

9. FOREIGN EXCHANGE BUSINESS

During the fiscal year 2010-11, Forex turnover increased to Rs.66912.60 Crore as on 31.03.2011 as against Rs.49924 Crore as on 31.03.2010, thus registering a growth of 34.02%. The export credit of the bank stood at Rs.4507 Crore as on 31.03.2011 as against Rs.3963 Crore as on 31.03.2010, thus registering a growth of 13.72%. During the year under review, 7 more branches were authorized to conduct foreign exchange business taking up such authorized branches to 94. The tie ups with exchange houses for Draft and Speed drawing arrangement has further increased from existing 2 to 6, which facilitates in garnering more & more NRI accounts and increase in remittance business. The total earning from foreign exchange business also registered a substantial increase from Rs.162.43 Crore for the year ended 31.3.2010 to Rs.225.63 crore for the current financial year, registering a growth of 38.90 % over the preceding financial year. The bank has mobilized non resident deposits to the tune of Rs.1755 Crore as on 31.03.2011. The operations at Representative Office at Dubai has completed its two years of operations, acting as catalyst to canvass non-resident accounts of Indian expatriates in UAE to expand the Non resident customer base of the bank. The fee-based products like Western Union Money Transfer have also shown growth during the preceding financial year.

Bank also started selling the gold coins w.e.f. 30.10.2010 i.e. on the auspicious occasion of Dhanteras / Deepawali. Presently the Gold coins of different denominations are being sold from 68 locations spread all over India. This has supplemented the banks non-interest income. During the short span of 6 months bank earned Rs0.37 crore on sale of gold coins.

10. THIRD PARTY PRODUCTS:

10.1 Life Insurance Business (JV):

During April 2010 - March 2011 the Bank sold 42393 policies with First Premium Collection of Rs. 159.20 Crores and has earned commission of Rs. 35.56 Crores (Gross).

10.2 General Insurance Business:

Under General Insurance Business the Bank has been registering steady growth and has collected around Rs. 24.45 Crores as Premium collections and income by way of Commission at Rs. 3.09 Crores.

10.3 Mutual Fund Business:

The Bank has been selling the Mutual Fund products of the 6 Mutual Fund Houses. During the Financial year 2010-11 the Bank has sold Mutual Fund products and collected AUM of Rs. 62.14 Crores and earned income of Rs. 31.07 Lacs under this segment.

10.4 New Pension Scheme (NPS):

Pension Fund Regulatory and Development Authority (PFRDA) has appointed the Bank as Points of Presence (POP) w.e.f. 01.05.2009 for the purpose of subscribing to New Pension Scheme (NPS) for all citizen of India. Total 251 branches have been selected to act as POP-SPs.

10.5 Demat Accounts:

The Bank is a Depository Participant for both NSDL and CDSL. It has more than 76,000 accounts under this category of Business and has recorded a revenue generation of Rs.4.34 Crores in this Financial year 2010-11. The Bank has tied up with the IDBI Capital Market Services Ltd., and providing Online Trading facilities to its DEMAT Account holders through 289 identified Branches.

10.6 Gold Coins:

The Retail sale of Gold Coins in different denominations (5 grams, 8 grams & 10 grams) was launched on 30.10.2010 through 83 branches in 12 Regions. 5937 Gold Coins have been sold during the financial year 2010-11.

10.7 UID Cards:

The Bank has entered into MOU with Unique Identification Authority of India (UIDAI) on 11.08.2010 as Registrar for issuing UID cards to its customers base of about 1.5 Crores, staff members and other citizens through our Branches. Approximate 66,300 UID cards got enrolled during the financial year 2010-11

10.8 Cash Management Services (CMS):

The Bank provides an efficient and tailor-made CMS solution to suit the customer requirements. The Bank is offering Collections, Payments and Custodial Services to the Customers under Cash Management Services. The Bank has coverage of more than 121 cities through own Branches and 500 Locations through Correspondent arrangements offering CMS services to clients across the country. The Bank has registered a turnover of above Rs. 1351.07 Crores and earned Non-Interest income of Rs.1.38 Crore during the financial year of 2010-11.

11. BRANCH EXPANSION:

During 2010-11, the Bank has opened 84 new branches besides up gradation of 28 extension counters. As on 31.03.2011, total number of branches stood at 1620 as against 1508 as on 31.03.2010. The population group-wise classification of branches as at end-March 2011 is as under:

S.N. Classification 31.03.2011 31.03.2010

1 Rural 334 306

2 Semi-Urban 423 373

3 Urban 489 473

4 Metro 374 356

Total 1620 1508

12. CUSTOMER SERVICE:

The Banks endeavor to provide excellent customer service has been through improving existing and innovating new services by leveraging the advanced technology platform of the bank. The bank has introduced, Mobile Banking (OBCmPAY), Internet Banking Services, International Proton Debit Card, SMS Banking service, Funds transfer through ATMs (only among accounts linked to ATM card), facility of Cheque Status Inquiry and Stop Payment of Cheques available 24x7 on Banks ATMs, deployment of Point of Sale (POS) Terminals at the identified prospective Merchant Establishments, Cheque deposit machines at some of the branches to facilitate cheque deposit with acknowledgment generated by the machine itself, online payment of service taxes etc. to provide efficient and effective service for delight of customers.

For better customer service the online Education Loan, OBC-e- shoppe, OBC-e-taxes, online fee deposit, online Tax Accounting System(OLTAS) are some of the popular online products which the bank offers to its customers. The Bank also offers cash management product for corporate. Facility of speed clearing is available at selected centres. In view of urgent needs the third party withdrawal of cash through cheques at nonparent branches have been permitted upto certain limit, The Bank has launched Variable Progressive Deposit Scheme called Aadhar. The bank has services to meet the requirements of different groups like Old & sick, physically handicapped, visually impaired etc. to meet their needs.

The Banks codes of commitment to customers are displayed on the Banks website for information and printed copies are available at branches for customers information.. A dedicated Customer Care Centre on toll free Number 1800-180-1235 has been set up for clarifying the customers account related and other queries.

The website has a link "Query & Suggestion" for receiving customers feedback on the services of the bank for its examination and application wherever required. Complaint/Suggestion Boxes are provided at branches where a customer can drop his complaint or suggestion and the customer can also make complaints through the banks website. The Customers are invited at customer service meetings held regularly at Branches, Regional Offices and Head Office. The Bank emphasizes on the updation of knowledge of the staff on the banking products and services through continuous training to meet the requirements of the customers.The Bank is committed to provide excellent service for the customers maximum satisfaction and delight.

13. KNOW YOUR CUSTOMER (KYC) NORMS & ANTI-MONEY LAUNDERING (AML) MEASURES:

To comply with the various laws and regulations, national as well as international, Govt, of India and Reserve Bank of India directives / instructions & guidelines, primarily to prevent the bank from being used, intentionally or unintentionally, by criminal elements for money laundering activities, OBC KYC Policy has been formulated. The Policy combines four key elements viz. "Customer Acceptance Policy", "Customer Identification Procedures", "Monitoring of Transactions" and "Risk Management". This will enable the bank to know / understand the customers and their financial dealings better and shall further help in managing risks more prudently. The detailed guidelines and subsequent instructions are being reiterated from time to time for strict compliance by the field functionaries. The bank is already complying with the requirement of submission of statutory returns to the FIU-IND as a sequel to the new legislation on Prevention of Money Laundering Act-2002. The Bank has already operationalised Anti-Money Laundering software solution for complying with KYC Norms / AML Measures and generation of alerts to detect any suspicious transaction. Alerts are being scrutinized by us and STRs are being submitted to FIU-IND. Bank is also submitting all the required data/returns relating to KYC/AMLtothe regulatory bodies.

14. USE OF HINDI IN THE BANK:

During the year 2010-11, Bank continued its concerted efforts to accelerate use of Hindi and to implement the guidelines/directives received from Govt, of India and Reserve Bank of India. Concrete and effective steps were taken to achieve the region wise targets set by the Department of Official Language, Ministry of Home Affairs, Govt, of India in the Annual Programme- 2010-11.

Bank was awarded Second prize in A region under Reserve Bank Rajbhasha Shield Competition 2009-10 for Public Sector Banks / Financial Institutions for its excellent performance in the field of Rajbhasha Hindi. Regional Offices Delhi & New Delhi were awarded Third Prize for doing good work in Hindi and our Banks In-House Magazine AADHAAR was awarded Second Prize under Inter Bank Rajbhasha Shield Competition - 2009-10 by the Banks Town Official Language Implementation Committee, Delhi. Besides, our Regional Offices, Ludhiana & Jaipur were awarded First Prize by Banks Town Official Language Implementation Committees, Ludhiana & Jaipur respectively.

Drafting & Evidence Sub-Committee of the Committee of Parliament on official Language held discussions on progress made in use of Hindi with the Branch Incumbents of our branch offices Coimbatore & Jhansi on 13.09.2010 & 22.12.2010 respectively and appreciated the work being done in Hindi in the Bank.

Bank continued its concerted efforts to promote use of Hindi in field of Information Technology. To provide banking facilities to customers in Hindi also by CBS branches, the bilingual Data Processing Software Script Magic was installed in the branches of the Bank. To facilitate work in Hindi in CBS environment various job cards were prepared in Hindi and made available on OBC web portal. Bank web site was updated in Hindi. For the convenience of the employees an English-Hindi Banking Glossary was provided online at OBC Web Portal. Training for use of Hindi on Computers was imparted to employees of the Bank.

Banks e-circulars and Executives messages, policies, deposit / loan schemes, retail schemes, Power chart, Finacle menues, branch directory, ATM list etc. were prepared and uploaded on OBC web portal. Hindi-Fortnight was celebrated in different offices / branches of the Bank in month of September and various Hindi competitions for staff members were conducted. The winners were awarded certificates & prizes. Besides, our staff members won prizes in various Inter Bank competitions also conducted by different Banks.

All the issues of Banks quarterly In-House Magazine "AADHAAR" were published regularly in bilingual form i.e. in Hindi and English.

15. RECOVERY:

During the Financial Year 2010-11, concerted recovery efforts continued at all levels and consequently, the Bank could effect cash recovery of Rs.512.72 Crore. Out of cash recovery a sum of Rs. 179.59 Crore has been added to the Revenue of the Bank. The bank has effectively utilized the various recovery mechanism e.g. holding recovery camps, "Special One Time Settlement Schemes for NPAs with O/S upto Rs. 1.00 Lakh" which lasted upto 31.01.2011 and after that a New One Time Settlement Schemes for settlement of NPA accounts with O/S upto Rs. 5.00 Lakh was floated which is valid upto 30.06.2011, Lok Adalat, taking action under SARFAESI Act-2002 and general settlement policy of the Bank. However, due to the impact of global recession, the NPAs of the Bank has increased in comparison to the previous financial year resulting in increase in Gross NPA percentage to gross advances to Rs.1.98% against 1.74% of corresponding year.

The Bank is taking all possible steps to strengthen the recovery mechanism to minimize the higher delinquencies.

16. HUMAN RESOURCE DEVELOPMENT & TRAINING:

The year 2010-11 witnessed the continuing effect of the economic turmoil of the past years with the Government and Regulators balancing the growth with inflation on the domestic front. The year also brought into the industry new recruitees in various cadres including specialists in Marketing, Agriculture, IT, Credit etc. There was compelling need to train them in various aspects of Banking to help them to settle down into their jobs with confidence and effectiveness.

The training plan for the year 2010-11 was started on the premise that at least one training be given to each employee during the year. The Bank was able to meet this objective to a maximum extent. The focus of training during the year continued on the following areas:

Credit Management, Risk Management, Forex Management, Customer Relationship Management, NPA & Recovery Management, General Banking/Induction Programmes for newly recruited Probationary Officers / Specialist Officers /Clerks, Management Development Programme for Executives, Soft Skills Development, Workshops on HRMS, CBS, SC/ST/OBC Reservation Policy etc.

In 483 programmes 11544 employees were imparted training in the above streams and other areas of Banking. In addition, 1441 officers were nominated in Advanced Training Programmes in key operational and behavioural areas in pioneering institutions like NIBM, Pune, College of Agricultural Banking, Pune; IBA, Mumbai; MDI, Gurgaon; IDRBT, Hyderabad; NIBSCOM, Noida etc., to quote a few. Few Senior and Top management functionaries were deputed for overseas training for Management Development Programmes and to give exposure to International best practices and their impact in Indian Banking.

During the year 2010-11, the Bank recruited 292 Probationary Officers, 836 clerks, 467 Subordinate staff and 241 Specialist Officers in different grades and streams such as Manager (IT), Marketing Managers, Agriculture Officers etc., Further the process for recruitment of 500 Probationary Officers, 1750 Clerks and 526 Officers in the Specialist cadre of Marketing, Credit, Forex, IT, Law, Agriculture, HRD etc is under way. The total staff strength as on 31st March, 2011 is 16618 comprising of 8766 officers, 5527 Non-subordinates and 2671 subordinates. The Bank complied with Government guidelines in respect of reservation in recruitment and promotion for SC/ST/OBC/PWD/ Ex-Servicemen in letter & spirit. The Bank recruited 911 SC/ST/OBC category personnel in Officer, Clerical & Subordinate cadres during the year. The grievances of SC/ST/OBC employees, if any, were resolved through SC/ST and OBC Cells created at all Regional Offices and at Head Office under the charge of Liaison Officers / Chief Liaison Officer. The Bank also launched a Special Drive to clear the backlog of SC/ST vacancies in promotion as per the guidelines of the Ministry of Finance, Govt. of India and were able to fill 10 SC/ST backlog vacancies.

BOARD OF DIRECTORS

During 2010-11,13 meetings of Board of Directors, 20 meetings of Management Committee of Board, 10 meetings of Audit Committee of Board, were held.

During the year, Sh.Nagesh Pydah, Chairman and Managing Director, took charge of the Bank on 01.01.11 after the superannuation of Sh.T Y Prabhu. Sh.V Kannan, Executive Director, joined the Board of the Bank on 01.12.2010 after the superannuation of Sh.H Rathnakara Hegde and Sh.B Srinivas, RBI Nominee Director appointed under Sec 9 (3) (c ) of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 joinedthe BoardoftheBankon30.07.2010,asperhis notification. Sh. K H Pandey and Sh S.S Shishodia, joined the Board of the Bank on 31.05.2010 and 21.07.2010 as Workmen Employee Director and Officer Employee Director respectively, appointed by Government of India Under Section 9 (3) (e) and Section 9 (3) (f) of the Banking (Acquisition and Transfer of Undertakings) Act, 1980. DIRECTORS RESPONSIBILITY STATEMENT The Directors confirm that, in the preparation of the Annual Accounts for the year ended 31 st March, 2011

(a) The applicable standards have been followed along with proper explanation relating to material departures, if any,

(b) The accounting policies framed in accordance with the guidelines of the Reserve Bank of India, were consistently applied,

(c) reasonable and prudent judgment and estimates were made so as to give true and fair view of the state of affairs of the Bank at the end of financial year and of the profits of the Bank for the year ended on 31st March, 2011,

(d) proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with and provisions of applicable laws governing banks in India and the accounts have been prepared on a going concern basis.

ACKNOWLEDGEMENTS

The Board of Directors thanks Government of India, Ministry of Finance, Department of Economic Affairs and Reserve Bank of India and other Governments & Regulatory Agencies for their valuable guidance and continued support provided to the Bank through out the year. The Board of Directors are also grateful to the valued customers, esteemed shareholders, stakeholders and public at large for their patronage and confidence reposed in the Bank. The Board of Directors place on record their great appreciation of the commitment, sense of involvement and dedication exhibited by each staff member in the overall development, growth and prosperity of the Bank and look forward to their continued support and whole-hearted co-operation for realization of the corporate goals in the year ahead.

For and on behalf of the Board

New Delhi (Nagesh Pydah)

29th April 2011 CHAIRMAN & MANAGING DIRECTOR


Mar 31, 2010

The Board of Directors have pleasure in presenting this Annual Report together with the Audited Balance Sheet and Profit & Loss Account of the Bank for the Year ended 31 st March, 2010.

1. BUSINESS OPERATIONS

The Business of the Bank crossed Rs. 200000 crore mark and stood at Rs. 204442 crore on March 31st 2010 as against Rs. 167434 crores in the previous year. Total deposits of the Bank stood at Rs. 120258 crore and has shown an increase of Rs. 21889 crore depicting a growth of 22.25%. Cost of deposit stood at 6.57%. The Bank has taken conscious decision of shedding high cost bulk deposits and substituting the same with normal rate and lower cost deposits so as to contain the level of bulk deposits. The percentage of bulk deposits has declined marginally from 21.42% as on 31.03.2009 to 21.37% as on 31.03.2010. On the other hand, net advances as at end-March 2010 stood at Rs. 83489 crore, registering a growth of Rs. 21.88%. During the fiscal 2009-10, yield on advances has declined to 10.20% from previous years level of 10.82%. The measures taken up by the bank to improve yield on advances through lending to SME, Mid Corporate and Retail sector besides implementation of Base Rate would enable the bank to improve yield on advances.

The credit deposit ratio of the Bank, as at end-March 2010, stood at 70.22% . The Bank ensured adequate flow of credit to the productive sectors of the economy. The Loans & Advances portfolio of the bank is well diversified and balanced. The Bank has ensured that its exposure to sensitive sectors such as Capital Markets, Real Estate, NBFCs etc. is well within the regulatory & prudential cap.

2. CAPITAL & RESERVES

During the year, the bank transferred a sum of Rs. 868.19 crore to Reserves (which includes Rs. 284.00 crore transferred to Statutory Reserves, Rs. 411.00 crore to Revenue and other Reserves, Rs. 173.19 crs. to Capital Reserves) out of the profit for the year 2009-10. With this, capital & reserves as on March 31, 2010 have gone upto Rs.8237.95 crore as against Rs. 7403.45 crore as at end March 2009 and the ratio of Capital & Reserves to average working funds stood at 6.61% as on 31.03.2010 as against 7.17% as on 31st March 2009.

3. CAPITAL ADEQUACY RATIO

As on March 31. 2010 the Capital Adequacy Ratio of the Bank under Basel -II stood at 12.54% as against 12.98% as on 31st March, 2009(under Basel-H). This is well above the regulatory minimum requirement of 9.0%.

4. FINANCIAL PERFORMANCE

The Bank has posted a total income of Rs. 11457.17 crore during the year as against Rs. 9927.79 crore last year thus registering an increase of Rs. 1529.38 crore (a growth of 15.41%) during the fiscal 2009-10. Operating Profit of the Bank went upto Rs. 2421.50 crore as against Rs. 1669.98 crore last year showing a growth of 45.00%. The Bank has made a net profit of Rs. 1134.68 crore, after making all requisite provisions showing an increase of Rs. 244.26 crore (growth of 27.43%) during the fiscal 2009-10.

Appropriation from the Net Profit have been effected as per table given below:-

Table : Financial Performance

(Rupees in crore)

31.03.2010 31.03.2009

Interest Income 10257.13 8856.47

Other Income 1200.04 1071.32

Total Income 11457.17 9927.79

Interest Paid 7349.69 6859.97

Operating Expenses 1685.98 1397.84

Total Expenses 9035.67 8257.81

Operating Profit 2421.50 1669.98

Provisions & Contingencies 1286.82 779.56

Net Profit 1134.68 890.42

Add-Profit brought forward 0.83 0.51

Less-Amalgamation adjustment Written-off

Net Profit available for appropriation 1135.51 890.93

APPROPRIATION

Transfer to Statutory reserve 284.00 227.00

Transfer to Revenue and Other reserves 351.00 21.00

Transfer to Special Reserve u/s 60.00 86.00 36(1) (viii)of I-T Act

Transfer to capital reserve 173.19 342.12

Proposed Dividend 227.99 182.90

Tax on Dividend 38.75 31.08

Bfilance carried over to Balance Sheet 0.58 0.83

5. DIVIDEND

Your Banks policy of declaring dividend is to reward the share holders as well as to plough back profit for maintaining a healthy capital adequacy ratio & for supporting future growth. Accordingly, your Directors are pleased to propose a total dividend of 91% (i.e Rs. 9.10 per share)for the year ended 31st March, 2010 as against 73%(i.e. Rs. 7.30 per share) paid for the preceding year.

6. SECTORAL DEPLOYMENT OF CREDIT TO PRIORITY SECTOR

Banks advances to priority sector increased by Rs. 7068.54 crore from Rs. 22315.07 crore in March 2009 to Rs. 29383.61 crore in March 2010 registering a growth of 31.68%. The Priority Sector Advances constituted 42.90% of the Adjusted Net Bank Credit (ANBC) against the stipulation of 40%. The comparative position of advances under various segments under Priority Sector as at the end of March 2009 and March 2010 is as follows:

(Amount Rs. in crore)

S. No. Sectors March 2009 March 2010

1. Priority sector credit 22315.07 29383.61

2. Agriculture 8614.03 11267.51

3. Direct Agriculture 4644.43 6564.47

4. Indirect Agriculture 3969.60 4703.04

5. SSI/SE 5576.33 10868.81

6. Educational Loan 767.97 942.72

7. Housing Loan 6197.17 6258.03

8. Other P.S. 1159.57 46.54

6.1 Agriculture Advances

Banks advances to agriculture increased by Rs.2653.48 crore from Rs.8614.03 crore in March 2009 to Rs.11267.51 crore in March 2010, registering a growth of 30.80%. The advances to direct agriculture segment increased by Rs. 1920.04 crore from Rs.4644.43 crore as on 31.3.2009 to Rs.6564.47 crore as on 31.3.2010 constituting a growth of 41.34%. The Indirect agriculture advances increased by Rs.733.44 crore from Rs.3969.60 crore as on 31.3.2009 to Rs.4703.04 crore as on 31.3.2010 showing an increase of 18.48%.

6.1.1 Flow of credit to Agriculture sector (Fresh disbursement)

During the financial year 2009-10, fresh flow of credit to agriculture sector amounted to Rs. 4937.07 crore. During the year, a total of 207517 new agriculture loan accounts were added. There was an average addition of 305 new agriculture loan accounts per rural and semi-urban branch.

6.1.2. Hi-Tech Dairy

The bank is providing credit to rural youths for their self employment under Hi Tech commercial dairy scheme in Punjab & Haryana states. Under the scheme Punjab Dairy Development Board /Animal Husbandry & Dairying department Haryana impart one month training to unemployed youth for their skill up gradation. As on 31.3.10, an amount of Rs. 77.32 Crore has been sanctioned to 661 units.

6.1.3. Oriental Saur Urja Dohan Scheme

The fossil fuel resources are limited in quantity and are fast depleting. The poor use Kerosene as common fuel for lighting. The rural people face problem of home lighting due to non-availability of grid electric power supply. Even if there is power supply, frequent load shedding and low voltage is a regular phenomenon in rural areas. To overcome these problems the bank is implementing a scheme for financing solar water heating & lighting system, for creating a viable alternate to conventional source of energy. The scheme is open to individual, institutional, commercial and industrial users.

Bank is also providing loan for solar water heating system, under MNRE scheme of IREDA. The bank finance for Solar Water Heating System amounted to Rs.4.78 Lac under MNRE tie up arrangement and bank claimed subsidy of Rs.0.82 Lac during the year.

6.1.4. Small and Medium Enterprises (SMEs)

Banks exposure to Small Enterprises sector stood at Rs.10868.80 crore at the end of March 2010 and has shown an increase of Rs..5292.47 crore, recording a growth rate of 94.91%. Further, SME advances increased by Rs. 5629.96 crore to Rs.12571.29 crore registering a growth of 81.11% against the Year on Year growth stipulation of 20%. The Tiny/ Micro sector advances increased by Rs. 1962.30 crore to Rs.3366.23 crore posting a growth of 139.77%.

Bank has entered into a MOU with NSIC for outsourcing credit proposals for lending. The Bank has entered into a tie-up arrangement with SME Rating Agency of India Ltd. (SMERA) for providing comprehensive rating services of SMEs borrowers of the Bank at subsidized rates.

6.1.5. Oriental Green Card (Kisan Credit Card) & Oriental Kisan Gold Card (OKGC)

During the Financial Year 2009-10, Bank has issued 83,885 cards to farmers to meet their credit requirement for crop production, repairing of agricultural machinery & equipment, working capital for allied activities, to repay their old debts taken from non institutional money lenders and consumption needs. The total amount of loan disbursed through these cards during the year was Rs. 1278.47 crore. At the end of financial year 2009-10, the total number of cards issued to farmers rose to 652528.

6.1.6. Oriental Bank Grameen Project ( OBGP )

Bank is providing finance to rural poor under home grown model of micro finance viz. Oriental Bank Grameen Project. It is being implemented through Joint Liability Group concept consisting of 5 members in each group, preferably women.

The Bank has formed 3745 Groups reaching out to 17340 poor families spread across 280 villages. The cumulative amount advanced to these groups as at the end of March 2010 was Rs. 28.36 crore. Savings to the tune of Rs. 13.11 crore have been mobilized by the groups.

Bank has also participated in the Janashree Bima Yojana a social security group insurance scheme of Life Insurance Company of India (LIC). The JBY scheme was launched with the aim of providing life and accidental cover to women belonging to the un-organised sector. The scheme was launched by Bank in the month of December 2008 and as on 31.03.2010, 1706 members of 481 SHGs were covered under the scheme.

6.1.7. Advances to Weaker Sections

Advances to weaker sections, consisting of beneficiaries belonging to scheduled castes/scheduled tribes, small and marginal farmers, landless labourers, rural artisans, beneficiaries under Govt. Sponsored schemes (except PMRY) were of the order of Rs. 4131.25 crore as a the end of March 2010 as against Rs. 3018.71 crore as at the end of March 2009.

6.1.8. Credit under Differential Rate of Interest Scheme

Credit flow at concessional rate of interest of 4% p.a. to the low- income group of the society both in rural having annual family income upto Rs. 18,000/- and urban having annual family income upto Rs. 24,000/- centres was Rs. 90.06 crore as at the end of March 2010.

6.1.9. Loans to SCs/STs

Bank continues its thrust in providing financial assistance to SCs/ STs beneficiaries. The advances to these beneficiaries improved to Rs.591.22 crore in March 2010 against Rs. 483.03 crore as at the end of March 2009.

6.1.10. Prime Minister Employment Generation Programme (PMEGP)

The Scheme has been implemented by the Government of India by merging the two existing schemes viz. PMRY and REGP w.e.f. 1st April 2008. The scheme aims for generation of employment opportunities through establishment of micro enterprises in rural as well as urban areas. The bank has provided financial assistance to the tune to Rs.62.45 crores to 1653 applicants under the scheme during the year 2009-10.

6.1.11. Swaran Jyanti Shahri Rojgar Yojana (SJSRY)

For providing gainful employment to urban poor (living below the urban poverty line) through setting up self employment ventures, bank is providing financial assistance under the scheme since its inception. The bank financed to 2244 beneficiaries to the tune of Rs.6.88 crores during 2009-10.

6.1.12. Swarn Jyanti Gram Swarojgar Yojana (SGSY)

The scheme is operative in rural areas of the country and cover the aspects of self employment such as organization of rural poor into Self Help Group (SHGs) training credit technology, infrastructure and marketing. The bank is participating in the schemes. During 2009-10 bank provided financial assistance to 3227 swarojgaries to the tune of 13.60 crore.

6.1.13. Credit Flow to Women Beneficiaries

Women are assuming greater responsibilities and playing an active role in the economic growth of the nation but remain under represented while receiving the credit delivery from the Financial Institutions of the country. So for strengthening of credit flow to women, Bank has implemented 13-points action plan as advised by the Government of India. Bank has designated 10 branches as specialized branches for women entrepreneurs.

A number of credit schemes, such as Oriental Mahila Vikas Yojana, Loan scheme for Professional & Self Employed Women, Loan scheme for Beauty Parlour/ Boutiques/ Saloons/ Tailoring, Scheme for Financing Working Women, Oriental Swaran Yojana etc. are designed by the bank especially for women. Besides, a special project called Oriental Bank Grameen Project (OBGP) provides all types of banking assistance to the rural poor women.

As a result the Banks advance to women increased by Rs. 736.15 crore from Rs. 2920.54 crore as on March 2009 to Rs. 3646.69 crore as on March 2010 registering a growth of 24.86%. Banks advances to women beneficiaries as on March 2010 was 5.32% of ANBC against the required stipulation of 5%.

6.1.14. Financial Inclusion

With a view to provide banking facilities to the sections of society so far deprived from the formal financial sector, bank implemented financial inclusion policy. Bank adopted three pronged strategies for financial inclusion. First, rural branches of the bank adopted villages for financial inclusion. Second, both Lead Districts of the bank volunteered for 100% financial inclusion. Third, banks branches participated in districts identified by the respective SLBCs.

Under village adoption scheme as on March, 2010, bank adopted 2162 villages having 1426240 households. Bank has achieved 100% financial inclusion in 1958 villages covering 1130942 households and opened 6,76,476 accounts under normal deposit/ loan schemes and 2,16,663 accounts under no-frills savings scheme.

In Banks Lead District of Ferozepur, completed 100% financial inclusion in 997 villages and 156 wards having 2,89,896 households and opened 68747 no-frills accounts. In Sriganganagar District, Bank completed 100% financial inclusion in 3031 villages and 231 wards having 3,22,270 households and opened 109,552 new accounts.

Further, Bank has started project of implementing Financial Inclusion by providing smart cards in 7 districts initially namely Muktsar, Delhi, Sriganganagar, Ferozpur Amritsar, Gurdaspur and Dehradun. 124283 smart cards have already been issued. Further the project for Financial Inclusion has been extended to 6 blocks in Amritsar namely Jandiala Guru, Harsha Chhina, Verka, Chogawan, Rayya and Tarsikka.

6.1.15. Lead Bank Responsibility

Bank is performing the functions of Lead Bank in three Districts namely Ferozpur in Punjab, Sriganganagar in Rajasthan and Palwal in Haryana.

6.1.16. OBC Rural Development Trust

Bank has set up a special purpose vehicle in the name of Oriental Bank Rural Development Trust (OBCRDT) for setting up Training Centres at various places across the country for imparting training for capacity building in rural areas. The Trust came into being on the 9 December 2005 as a registered body.

The main objective of the Trust is to establish training colleges/ institutes and workshops for providing training for farmers on modern techniques of farming, tractor/farm machinery repair & maintenance and other aspects of agriculture/rural development; micro finance and capacity building of the rural youth and women.

Presently four OBCRSETIs (OBC Rural Self Employment Training Institutes) are functional at Dehradun, Sriganganagar, Jaipur and Ferozepur.

We have been allotted land by the State Government in Chomu (Jaipur), Rajasthan and Zira (Ferozepur), Punjab where full- fledged training centres are being constructed and construction work has started in full swing. Govt of India has sanctioned an amount of Rs. 2 crores for constructions of these centres. Haryana and Uttar Pradesh are other two states where the Trust plans to set up training centres in the near future.

During the Financial Year 2009-10, a total of 176 training programmes were conducted and 6694 candidates were given training on subjects like tailoring & dress designing, watershed management, phulkari embroidery, milch animal rearing, crop production, beauty parlour, medicinal plantation, etc. A total of 2323 trained persons were credit linked for pursuing/setting up of economic activities. Emphasis is also given to train candidates from BPL strata of the society for which list of candidates is obtained by the centres from respective DRDA. Cumulatively these centres have conducted 411 training programmes since inception benefiting 15214 candidates.

6.2. Retail Credit

Retail Credit segment continues to be the Thrust area of lending. The Bank is having 10 Retail Credit Scheme including Home loans to meet the requirements of various sections of the society. Our Retail Credit Schemes are customer friendly, competitive and specifically designed to suit all sections of the society. The Bank has been formulating customized schemes and is also having tie-ups with various reputed builders and auto manufacturers to boost its Retail segment.

6.3. Education Loan

The education loan portfolio of the Bank stood at Rs.971.75 crores as on 31.03.10 and showed Y.O.Y. Growth of 23%. Bank continued its efforts for extending education loans to students on soft terms & conditions and competitive rates besides 0.50% concessions in rate of interest is being given to girl students. During the admission season, education loan camps were organized in the campus of the educational institutions.

7. TREASURY OPERATIONS

The G-Sec yields hardened across the curve as the underlying market sentiment was bearish on account of expectations of RBI reversing its easy monetary stance due to increase in Food led Inflation. However RBI continued its easy monetary stance during the major part of the financial year and reversed its monetary stance from January 2010 onwards. The equity market remained positive on account of economic recovery across the globe. Consequent upon this, turnover in the secondary market has increased from Rs.28,526 crore in the year 2008-09 to Rs.65,312.05 crore in the year 2009-10. The net profit from the secondary market operation was Rs.423.55 crore during the year 2009-10. During the Financial Year 2009-10 the bank shifted Government securities having book value of Rs.1271.48 crore from Available For Sale (AFS) category to Held To Maturity (HTM) category and booked depreciation of Rs.137.76 crore and shifted securities having book value of 979.59 from HTM to AFS category ignoring the appreciation as per RBI guidelines. The aggregate investment of the Bank increased to Rs.35785.32 crore at the end of the financial year 2009-10 as against Rs. 28658.39 crore in the FY 2008-09, an increase of 24.87%. The yield on investment has decreased to 7.08% from 7.63% as compared to last year due to maturing of high coupon securities and issuance of securities bearing low coupon in the FY 2009-10. Valuation of HFT & AFS portfolio is done on daily & quarterly basis respectively and depreciation, if any, is booked on quarterly basis.

8. MERCHANT BANKING ACTIVITIES:

The Bank has been registered as Depository Participant with both NSDL & CSDL. Nearly 78,000 customers are availing the demat services of the Bank and PAN non-complaint zero balance accounts have been closed as per SEBI directive. The number of branches offering demat services has gone up from 106 to 295 during the year 2009-10. The Bank is also offering online trading services in collaboration with IDBI Capital market services for its customers. During the fiscal year, the Bank raised Tier I Capital through issue of Innovative Perpetual Debt Instrument aggregating Rs.300 crore on private placement basis at the coupon of 9.10% p.a with a step up of 50 bps after 10 years in case the call option is not exercised. The Bonds were allotted to 27 subscribers on 17.12.2009.

8.1 Applications Supported by Blocked Amount (ASBA)

The Bank has been registered with SEBI as Self Certified Syndicate Bank (SCSB) for providing Applications Supported by Blocked Amount (ASBA) facility to its customers. ASBA is an application containing an authorisation to block the application money in the bank account maintained with SCSB. Under the ASBA facility, the application amount for subscribing to an issue (IPO/Right issue), remains in the bank account of the customer till allotment is finalized and actual amount equal to allotted shares is only debited instead of total application amount.

9. FOREIGN EXCHANGE BUSINESS

The financial year 2009-10 has witnessed remarkable turnaround in domestic as well as overseas market activities. The impact of global meltdown started fading away in the beginning of financial year due to various steps taken by Government. Industrial activities also got revived in the international market and global demand was also strengthened giving support to exports from our country. Our country was almost untouched by subprime crisis thankfully due to prudent actions taken by Government and RBI. The performance of our bank on forex front may be seen as synchronized with revival of business activities in domestic and overseas market. During the fiscal year 2009-10, Forex turnover increased to Rs.49924 Crores as on 31.03.2010 as against Rs.42500 Crore as on 31.03.2009, thus registering a growth of 13.60%. The non-interest income from forex operations also registered a growth of 21.51 % over the preceding financial year. The impact of global meltdown which affected the growth of export during the year 2008-09, had however been reversed during the financial year under review. The export credit of the bank stood at Rs.3963 Crores as on 31.03.2010 as against Rs.3283 Crores as on 31.03.2009, thus registering a growth of 20.71%. During the year under review, 4 more branches were authorized to conduct foreign exchange business .taking up such authorized branches to 87. Bank has also identified 37 branches for NRI business to augment NRI deposit base. Bank is in the process of revamping the International Banking Division at Head Office so that our Banks share in foreign exchange business reaches the desired level. Bank has also launched speed remittance facility for NRIs in association with three exchange houses. We are also expanding exchange House remittance tie-ups to garner more & more NRI accounts. The bank has mobilized non resident deposits to the tune of Rs. 1665 Crores as on 31.03.2010. The operations at Representative Office at Dubai have also stabilized and it is expected that our non resident portfolio may get boost by marketing non-resident accounts of Indian expatriates at Dubai by our Representative Office. The fee-based products like Western Union Money Transfer have also shown growth during the preceding financial year. Bank has also rationalised the Nostra accounts, reducing from 24 to 17 for better management of funds in Nostra accounts. The balances in the mirror accounts & forward position are revalued at FEDAI rate at every month end.

10. THIRD PARTY PRODUCTS

10.1 Life Insurance Business

During April 2009- March 2010 the Bank sold 38097 policies with First Premium Collection of Rs. 121.60 Crores and has earned commission of Rs. 37.10 Crores.

10.2 General Insurance Business

Under General Insurance Business the Bank has been registering steady growth and has collected around Rs. 22.00 Crores as Premium collections and income by way of Commission Of Rs. 2.77 Crores.

10.3 Mutual Fund Business

The Bank has been selling the Mutual Fund products of 4 Mutual Fund Houses. During the Financial Year 2009-10 the Bank has sold Mutual Fund Products and collected AUM of Rs. 10.00 crores and earned income of Rs. 18 Lacs under this segment.

10.4 Demat Accounts

The Bank is a depository participant for both NSDL and CDSL. It has more than 78000 accounts under this category of business and has recorded a revenue generation of Rs. 3.47 crores in the Financial Year 2009-10. The Bank has tied up with the IDBI Capital Market Services Ltd. for providing Online Trading facilities to its DEMAT Account holders through 276 identified Branches.

10.5 Cash Management

The Bank provides an efficient and tailor-made CMS solution to suit the customer requirements. The Bank is offering Collections, Payments and Custodial Services to the Customers under the Cash Management Services. The Bank has coverage of 117 cities through its own Branches and 500 Locations through Correspondent arrangements offering CMS services to clients across the country. The Bank has registered a turnover of above Rs. 858 Crore and earned non-interest income of Rs. 0.97 Crore during the financial year of 2009-10.

11. BRANCH EXPANSION

During 2009-10, the Bank has opened 93 new branches besides up gradation of 14 Extension Counters. As on 31/03/2010, the total number of branches stood at 1508 as against 1401 as on 31/03/2009. The population group-wise classification of branches as at end- March, 2010 is as under:

Sr.No. Classification 31.03.2010 31.03.2009

1. Rural 306 282

2. Semi-urban 373 341

3. Urban 473 443

4. Metropolitan 356 335 Total 1508 1401

12. CUSTOMER SERVICE

The Bank in its endeavor to achieve excellence in customer service has started many customer friendly services viz. Mobile Banking (OBCmPAY) besides Internet Banking Services both for individuals and corporates, SMS alert service, Cheque/Cash deposit facility through some of the Banks ATMs. Funds transfer through ATMs (only among accounts linked to a ATM card), facility of Cheque Status Inquiry and Stop cheque payment available 24x7 on Banks ATMs, deployment of Point of Sale (POS) Terminals at the identified prospective Merchant Establishments, Cheque deposit machines at some of the branches to facilitate cheque deposit with acknowledgment generated by the machine itself, online payment of service taxes etc. These services are helpful for the customers to get their transactions done speedily and easily. For Senior Citizens customers there is provision for separate queue in the branches. In Saving Bank accounts the interest is now being provided on daily products basis with effect from 1.4.2010.

The Bank has adopted and implemented voluntary codes of BCSBI for individual customers , Fair Practice code for lenders, Micro and Small Enterprise (MSEs) code to provide fair , transparent and quality service to all the customers and to provide greatest satisfaction to the customers. The codes are displayed on the Banks website for information and printed copies are also available at branches for customers information. The updated information on Banks Deposit Schemes, Loan Schemes, Citizens Charter, Banking Ombudsman, SSI Charter, Forex Remittances, Service Charges and Banks Policies viz Financial Inclusion Policy, Cheque Collection and Compensation Policy, Grievance Redressal Policy, Policy on Collection of dues & Repossession of Security etc. have been displayed in Public domain of Banks website. These are also available at branches in booklet/pamphlet form. "Query & Suggestion" link is provided on website to get feedback from customers. Complaint/Suggestion Boxes are provided at branches where a customer can drop his/her complaint or suggestion.

Web-based Customer Grievance Redressal system is provided for prompt redressal of customers grievances. Adedicated Customer Care Centre on toll free Number 1800-180-1235 has been set up for clarifying the customers account related and other queries.

The Customer Service Meetings are being held regularly at Branch level, Regional Office level and Head Office level. These meetings ensure the proper implementation of guidelines issued by regulatory authorities. The customers are invited to attend these meetings and give their valuable suggestion/feedback on banks services and schemes. The Bank is committed to give excellent customer service for the customers maximum satisfaction.

13. KNOW YOUR CUSTOMER (KYC) NORMS AND ANTI- MONEY LAUNDERING (AML) MEASURES

To comply with the various laws and regulations, national as well as international, Govt of India and Reserve Bank of India directives / instructions & guidelines, primarily to prevent the Bank from being used, intentionally or unintentionally, by criminal elements for money laundering activities, KYC Policy has been formulated. The Policy combines four key elements viz. "Customer Acceptance Policy", "Customer Identification Procedures", "Monitoring of

Transactions" and "Risk Management". This will enable the Bank to know / understand the customers and their financial dealings better and shall further help in managing risks more prudently. The detailed guidelines and subsequent instructions are being reiterated from time to time for strict compliance by field functionaries. The Bank is already complying with the requirement of submission of statutory returns to the Financial Intelligence Unit - India (FIU - IND) as a sequel to the new legislation on prevention of Money Laundering Act - 2002. The Bank has already operationalised Anti Money Laundering Software solution for complying with KYC / AML norms and generation of alerts to detect any suspicious nature transactions. The AML Cell is scrutinizing the alerts generated by the system for detecting any suspicious type of transaction (s) (STRs) for onward submission to FIU-IND.

14. USE OF HINDI IN THE BANK

During the year 2009-10, Bank continued its concerted efforts to further accelerate use of Hindi in its working and to implement the guidelines/directives received from Govt, of India and Reserve Bank of India. Concrete and effective steps were taken to achieve the region wise targets set by the Department of Official Language, Ministry of Home Affairs.Govt. of India in the Annual Programme-2009-10.

Bank was awarded Consolation prize in A region under Reserve Bank Rajbhasha Shield Competition 2008-09 for Public Sector Banks/Financial Institutions for its good performance in the field of Rajbhasha Hindi. Regional Office, Delhi was awarded Second prize for doing excellent work in Hindi for the year 2008-09 by Regional Implementation Office, Official Language Deptt., Ministry of Home affairs, Govt, of India. The Bank was also awarded first prize under Inter Bank Rajbhasha Shield Competition 2008-09 by the Banks Town Official Language Implementation Committee, Delhi. Further, our staff members won different prizes in various Inter Bank Competition conducted by the said committee.

During the year under review, concerted efforts were made to propagate use of Hindi on computers. Bilingual word processing software "Akruti Office" has been loaded in the PCs installed in all the administrative offices and the branches. The necessary training was imparted td the staff by conducting Hindi workshops as well as other programmes at regular intervals. Hindi Officers and IT Officers of Head Office and regional offices were imparted Hindi Unicode Training on computers by officials of Reserve Bank of India. To provide banking facilities to customers in Hindi also by the CBS branches, the bilingual Data Processing Software Script Magic was installed in the branches of the Bank and IT Officers and Hindi Officers of the Bank were imparted trainers- training regarding use of this software.

During the year, Hindi version of OBC web portal was launched and e-circuiars as well as Home page and other contents were made bilingual so that all staff members of the Bank are able to view circulars, executives messages, policies, various job cards.deposit / loan schemes, retail schemes, branch directory, ATM list and other contents in Hindi on the portal. Banks website is available in bilingual form. The option of Hindi is available on ATMs and Telebanking. IT Ready Reckoner was made available in Hindi for the convenience of the employees.

All the editions of Banks quarterly In-House Magazine "AADHAAR" were published regularly in bilingual form i.e. in Hindi and English. Quarterly In-House magazines were published by Regional Offices at Regional Office level.

15. RECOVERY

During the Financial Year 2009-10, concerted recovery efforts continued at all levels and consequently, the Bank could effect cash recovery of Rs.399.34 crore. Out of cash recovery a sum of Rs. 133.09 crore has added to the Revenue of the Bank. The bank has effectively utilized the various recovery mechanism e.g. holding recovery camps, One Time Settlement Schemes for MSE borrowers and Special One Time Settlement Scheme for NPA accounts with outstanding upto Rs.1.00 lac, Lok Adalat, provisions of SARFAESI Act and general settlement policy of the Bank. However, due to the impact of global recession, the NPA of the Bank has increased in comparison to the previous financial year resulting in increase in Gross NPA percentage to gross advances to Rs.1.74% as against 1.53% of corresponding year.

The Bank is taking all possible efforts to strengthen the recovery mechanism to minimize the higher delinquencies.

16. HUMAN RESOURCE DEVELOPMENT & TRAINING

The year 2009 -2010 has been the year of challenges for the Banking industry. The Indian Banking adapted to the changed Banking scenario admirably and helped in renewing the confidence levels and confirming resilience in our financial system. The changed economic environment has necessitated up-gradation of skill sets. The Bank has endeavored to match these requirements through extensive process of training. The focus of training during the year was on the following areas:-

Credit Management, Risk Management, Forex Management. Lending Strategies to SMEs, Soft Skills Development, Marketing of Banks Products, Induction Programmes for newly recruited officials, General Banking in CBS, IT enabled Products, Treasury Management, Risk Ratings, Management Development Programmes for Executives, SC/ST/OBC Reservation policy, Human Resources Management System etc.,

In 394 programmes 9325 employees were imparted training in the above streams and other areas of Banking. In addition, 1337 officers were nominated in Advanced Training Programmes in key operational and behavioral areas in pioneering institutions like NIBM Pune, College of Agriculture Banking Pune, Indian Banks Association, MDI, Gurgaon, Indian Institute of Management, Ahmedabad, Administrative Staff College of India, Hyderabad, NIBSCOM, Noida etc., to quote a few. Few senior and top management functionaries were deputed for overseas training to give exposure to international best practices and their impact in Indian Banking.

During the year 2009-10, the Bank recruited 221 Probationary Officers, 812 Clerks and 243 Specialist Officers in different grades and streams such as Manager (IT), Marketing Managers, Agriculture Officers etc., Further the process for recruitment of 313 Probationary Officers, 916 Clerks and 373 officers in the Specialist cadre of Marketing, Agriculture, IT, Security, Forex, Law, HRD etc., is under way. The total staff strength as on 31st March 2010 is 15358 comprising of 7989 officers, 4799 Non-subordinates and 2570 subordinates.

The Bank complied with Government guidelines in respect of reservation in recruitment and promotion for SC/ST/OBC/PWD/ Ex-servicemen besides extending concessions/relaxation as prescribed. The grievances of SC/ST/OBC employees, if any, were resolved through SC/ST and OBC cells created at all Regional Offices and at Head Office under the charge of Liaison Officers/ Chief Liaison Officer. The Bank also launched a Special Drive to fill up the backlog of SC/ST vacancies in promotion as per the guidelines of the Ministry of Finance, Govt, of India.

BOARD OF DIRECTORS

During 2009-2010,12 meetings of Board of Directors, 20 meetings of Management Committee of Board & 6 meetings of Audit Committee of Board were held.

During the year, Sh.T.Y Prabhu, Chairman and Managing Director, took charge of the Bank on 27.08.09 after the elevation of Sh.Alok K Misra to the post of Chairman and Managing Director of Bank of India. Two Directors namely Sh.V Vijay Sai Reddy & Sh.Kamal Bhushan, Directors appointed under Sec 9 (3) (g ) & Sec 9(3)(f) of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980, as per their notifications, retired from the Board of the Bank due to expiry of their term on 13.12.09 and 22.11.09 respectively.

DIRECTORS RESPONSIBILITY STATEMENT

The Directors confirm that, in the preparation of the Annual Accounts for the year ended 31st March, 2010

(a) the applicable standards have been followed along with proper explanation relating to material departures, if any,

(b) the accounting policies framed in accordance with the guidelines of the Reserve Bank of India, were consistently applied,

(c) reasonable and prudent judgment and estimates were made so as to give true and fair view of the state of affairs of the Bank at the end of financial year and of the profits of the Bank for the year ended on 31st March, 2010,

(d) proper and sufficient care was 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.

ACKNOWLEDGEMENTS

The Board of Directors thanks Government of India, Ministry of Finance, Department of Economic Affairs and Reserve Bank of India and other Government & Regulatory Agencies for their valuable guidance and continued support provided to the Bank throughout the year. The Board of Directors are also grateful to the valued customers, esteemed shareholders, stakeholders and public at large for their patronage and confidence reposed in the Bank.

The Board of directors place on record their great appreciation of the commitment, sense of involvement and dedication exhibited by each staff member in the overall development, growth and prosperity of the Bank and look forward to their continued support and whole-hearted co-operation for realization of the corporate goals in the year ahead.

For and on behalf of the Board

New Delhi (T. Y. PRABHU)

29th April 2010 CHAIRMAN & MANAGING DIRECTOR