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Directors Report of Punjab & Sind Bank

Mar 31, 2022

The Board of Directors has the pleasure of presenting the 12th Annual Report of the Bank together with the Balance Sheet as on 31st March 2022 and the Profit and Loss Account for the year ended 31st March 2022.

MANAGEMENT DISCUSSION AND ANALYSIS

The COVID-19 pandemic that started in 2019 has been the first of its kind the world has witnessed in the 21st century. We all learnt to live with the Covid and faced three waveswith self-belief and courage.

Central Banks and Governments around the world have taken structural and financial reforms to save their economies. Banks especially public sector banks played a major role in carrying forward and implementing the policies announced by the Government and central bank.

In this unfavourable situation, our bank''s performance was remarkable and achieved a net profitof Rs.1039 crore.

The positive bankresults are possible only with the contribution of each and every one.

GLOBAL OUTLOOK:

At present, economies around the world are facing multiple risks like geopolitical conflicts, supply disruptions, and mounting commodity prices, especially of food and energy, which have fuelled inflationary pressuresaround the World.

Global financial conditions are a bit fragile with the global uncertainties, liquidity tightening, higher inflation, and rising interest rates. Financial stability risks have risen on several fronts, even though so far, no global systemic event affecting financial institutions or markets hasmaterialized.

In many countries, inflation has become a central concern. In some advanced economies, including the United States and some European countries, it has reached its highest level in more than 40 years. Central banks are facing a challenging trade-off between fighting record-high inflation and safeguarding the post-pandemic recovery at a time of heightened uncertainty about prospects for the global economy. Bringing inflation back down to the target and preventing an unmooring of inflation expectations require a delicate act of removing accommodation while preventing a disorderly tightening of financial conditions that could interact with financial vulnerabilities and weigh on growth.

Central banks of major economies around the world have started policy normalisation to lower the inflation rate, but the ongoing geopolitical tension disrupted the global supply chains and has increased input cost pressure. The resurgence of COVID-19 infections in some major economies and the associated lockdowns run the risk of further aggravating the global supply bottlenecks and input costpressures.

With the invasion and rising interest rates in developed economies, capital outflows increased markedly from emerging market and developing economies. Tightening financial conditions, net importers of commodities is putting downward pressure on the currencies of the most exposed countries to the developed economies.

Going forward, rising inflation expectations prompts a more aggressive tightening response from central banks in emerging markets and developing economies.

International Monetary Fund (IMF) in its World Economic Outlook April 2022, projected a slowdown in global growth from an estimated 6.1% in 2021 to 3.6% in 2022 and 2023. Inflation is projected on the higher side with rising commodity prices and supply-chain bottlenecks, it is projected at 5.7 % in advanced economies and 8.7 % in emerging market and developing

economies for 2022.

Global growth momentum can be regained with multilateral efforts like maintaining global liquidity, opening economic activities following pandemic protocols, and end of the waras early as possiblewith bilateral talk.

Domestic Outlook:

The Indian economy is not immune to negative externalities. The surge in commodity prices is already posing inflation risks and forcing RBI to policy normalization and leading to a rise in interest rates inthe system.

Domestic growth momentum slowed down a bit in Q3 of FY21-22 with the emergence of the Omicron variant in January 2022 but Growth momentum picked up in February itself. RBI in its Monetary Policy Statement, April 2022 projected real GDP growth of 7.2% in FY2022-23 (revised from 7.8%). IMF, in its World Economic Outlook April 2022 report, has slashed its forecast for India''s gross domestic product growth to 8.2 % from 9% for 2022, saying that higher commodity prices will weigh on private consumption and investment. Even though the growth forecast was reduced, India is still the fastestgrowing major economyin the World.

With the third wave behind us and, with the removal of all restrictions alongside a broadening of vaccination coverage, economic activity is returning to speed. Most sectors of the economy are reaching or have exceeded pre-pandemic levels. Notably, bank credit has gathered pace and the job market is gathering steam. There is acceleration in the travel and hospitality sectors. The construction and real estate sectors havealso registered a pick-up.

Indian economy is expected to expand in FY 2022-23 with rise in rural and urban demand, financial sector resilience, robust export and remittances,and higherGovernmentcapital expenditure.

BANKING SECTOR:

Banking sector successfully overcame the second wave and third wave related risks in 2021-22. This is possible because banks entered the pandemic with relatively strong balance sheets, higher levels and quality of capital and ample liquidity. Timely measures took bygovernmentsand centralbanks to support the economy alsohelped the banks to face thepandemic.

Bank''s Credit growth and asset quality improved with the growth in key sectors. Credit off-take picked up during 2021-22, with the gradual return of normalcy after the pandemic.

Banks entered the financial year 2022 -23 with risks like geopolitical tensions, input price inflation, the spike in crude oil and a global rate hike cycle which could put some pressure on growth / NIMs in the near term.

During the financial year 2022-23, the banking sector may register double-digit credit and deposit growth with the green shoots in the economy provided geopolitical risk ends.

WORKING RESULTS:

Highlights of Bank''s financial performance are given below:

• Total business of the Bank increased by 5.25% reached at Rs.172524.10 crore as on 31.03.2022, from Rs. 163919.35 crore as on 31.03.2021.

• CASA deposits increased by 9.51% on Y-o-Yand stood at Rs.34528.42 crore as on 31.03.2022, as compared to Rs. 31530.39 crore as on 31.03.2021.

• Total deposits of the Bank stood at Rs.102137.10croreason 31.03.2022 as compared to Rs. 96108.18 crore as on 31.03.2021. The average costof deposits ofthe bank stood at 4.28%(FY 2021-22) ascomparedto5.06% (FY2020-21) in previous year.

• Bank''s Advances registered a growth of 3.80% from Rs. 67811.17 crore as on 31.03.2021 to Rs.70387.09 crore as on 31.03.2022. The average yield on Advances stood at 7.20% (FY 2021-22) as compared to 7.78% (FY 2020-21) during the last year.

• Total Priority Sector Advances increased from Rs. 28228 Crore (43.95% of ANBC) as on 31.03.2021 to Rs.31178 crore (50.20% of ANBC) as on31.03.2022, registering a growth of 10.45 %. Bank has also surpassed regulatory lending target of 40%.

• Retail Lending portfolio of the Bank grew to Rs.11737 crore as on 31.03.2022 and registered a growth of 15.29 % over the previousyear(Rs. 10180crore).

• The percentage of Retail credit (Rs.11737 crore) to Gross Advances (Rs.70387 crore) was 16.68 % as on 31.03.2022 compared to 15.01% as on 31.03.2021.

• MSME Credit grew by 13.25% from Rs. 11497 crore as on 31.03.2021 to Rs. 13021 crore as on 31.03.2022. The share of MSME Credit to total Advanceswas 18.5%ason 31.03.2022.

FINANCIAL PARAMETERS:

• Operating profit stood at Rs.1330.09 crore as on 31.03.2022 against Rs. 772.03 crore as on 31.03.2021.

• Net profit stood at Rs. 1039.05 crore as on 31.03.2022 as compared toa Net Loss of Rs. 2732.90 crore as on 31.03.2021.

• Return on Assets(ROA) stood at 0.85%(FY 2021-22) as compared to that at (-2.55)% (FY 2020-21).

• The Net Worth ofthe Bank stood at Rs.5051.90 crore as compared to Rs. 5126.25 crore as on 31.03.2021.

• Capital Adequacy Ratio (Basel III) of the Bank is 18.54 % as on 31.03.2022 against the minimum stipulated requirement of 10.875%.

• Gross NPAs of the Bank is Rs. 8564.82 crore (12.17%) as on 31.03.2022 as compared to Rs. 9334.00 crore (13.76%) as on 31.03.2021

• Net NPA ofthe Bankis Rs.1742.27 crore as on 31.03.2022 as compared to Rs. 2461.95 crore as on 31.03.2021.

• Net NPA percentage improved to2.74% as on 31.03.2022 from 4.04% as on 31.03.2021

• The Board of Directors ofthe Bank has recommended a dividend of Rs.0.31 per equity share (i.e. 3.1%) of face value of Rs.10/-eachto the Shareholdersfortheyear 2021-22, subject totheapprovalof the Shareholdersat the AGM.

The Financial performance of the Bank for the year 2021-22 is summarized below:

(Rs. Crore)

Particulars

2021-22

Net Interest Income

2651.32

Non-Interest Income

959.38

Operating Expenses

2280.61

Operating Profit

1330.09

Provisions / Contingencies

291.04

Net Profit

1039.05

Earnings per share (Rs.)

2.56

Book Value per share (Rs.)

7.54

Key Financial Ratios for the year 2021-22 are as under:

(Percentage - %)

Particulars

2021-22

Yield on Advances

7.20

Yield on Investments

6.69

Cost of Deposits

4.28

Net Interest Margin

2.80

Cost to Income Ratio

63.16

Capital and Reserves:

During the financial year 2021-22 Government of India infused Rs.4600.00 crore towards preferential allotment of Equity shares. Accordingly, the bank has allotted 2725118483 equity shares of Rs.10/- each fully paid up at an issue price of Rs.16.88 (including a premium of Rs.6.88 per equity share) consequently, the Government of India''s holding in the bank has increased to 98.25% as on 31st March 2022.

Date of issue

No. of shares

Price

Amount (Crores)

Details

31.03.2022

2725118438

16.88 ( including premium of Rs. 6.88 per equity share)

4600

Preferential issue to the Govt. of India

Capital Adequacy

• As per the Basel III framework, the Bank''s Capital Adequacy Ratio is 18.54% which is higher than the regulatory requirement of 11.50%

• Details of Capital Adequacy (BASEL III) are:

(Rs. In Crore)

Particulars

BASEL-III

31.03.2021

31.03.2022

CET 1 CRAR

6243

12.05%

6307

12.77%

ATI CRAR

1000

1.93%

1000

2.03%

TIER I Capital

7243

13.98%

7307

14.80%

TIER II Capital

1598

3.12%

1849

3.74%

Total Capital

8841

17.06%

9156

18.54%

Risk Weighted Assets

51790

49381

Business Initiatives:

During the current financial year, Bank has implemented various initiatives to enhance customer convenience and boost its compettve edge. Some of the important among them are:

• Bank has on-boarded its 13 credit schemes on National Portal for Credit Linked Government Schemes, an initiative taken by the Department ofFinancialServices (DFS), forfaster credit decisionsand better monitoring through reports.

• The bank has started a Co-lending arrangement with Non-Banking Financial Institutions for MSME-LAP and Housing Loan (PS).

• Bank has started IVR(Interactive Voice Response) facilitesfor:

i) Chequestatus ii) Card Hot listng iii) MiniStatementuptolast5transactons

• Bank has implemented "Unified Dispute & Issue Resolution" (UDIR) functonality for UPI.

• Bank has migratedall the ATMstoEMV for enablingthe acceptance of card plus PIN transactons.

• Bank has implemented SMS Alert services on remote On-Us transactons to provide nearby PSB ATM Machine details to Cardholder.

• Facility to switch on /off and set/modify transaction limits (within the overall Debit card limit set by the bank) for all types of transactons - domestc and internatonal, at PoS / ATMs / online transactons / contactless transactons, etc. is provided through PSBUnICApp/Web toenhance Security of Card Transactons.

• Bank has enabled the acceptance of Rupay Domestic Cards at POS terminals at NETS network in Singapore & ATM, POS and ECOM at RMA network in Bhutan.

• Dispatch of Personalized Debit Cards directlyto the customer''s address.

• The Bank adopted a Multi-Media Strategy to advertise and build up its image in public. Besides publicity through print, outdoor and electronic media, the Bank has been using social media platforms likeTwitter, Facebook, Instagram, Youtube, and LinkedInto advertise its productsand schemes.

To offer a full range of services to customers Bank has added the following products and services during the year to its existing

bouquet:-

• PSB SMART Salary Account for salaried employees oflower-incomebracket i.e. below Rs.25000/-.

• Special Home Loan product for Defence personnel (PSB Apna Ghar-with attractive features including concession in ROI.

• PSB Aarogyam scheme for financing various stakeholders engaged in healthcare activities for meeting their working capital requirement and acquisition of fixed assets.

• Separate scheme "PSB E-Vahan" for the financing of Electric Car. The scheme covers the purchase of a new electrical car (e-vehicle) and reimbursement of the cost of a new electrical car (vehicle should not be older than 3 months from the date ofinvoice)

• Special scheme for One Time Settlement of NPA (Doubtful 2, Doubtful 3 & Loss) and TWO Accounts with Book Outstanding up to Rs.5.00Cri.e. PSB RinSamadhanScheme2022.

• New OMNI Solution (common platform for Internet Banking, Mobile Banking, and UPI) "PSB UnIC" and "PSB UnIC Biz" for retail and corporate customers.

• Chat-Bot facility for customers. It assists customers in resolving their queries related to the bank''s various services/information.

• Scheme for Financing Solar Power Projects Under PM KUSUM for setting up decentralized ground-mounted grid-connected solar power plants/procuring necessary gadgets for individual plant sizes up to 2 MW (Component A). The scheme also provides collateral-free credit for the portion other than a subsidy to the beneficiaries under PM KUSUM (Components Band C).

• Loan Guarantee Scheme for Covid Affected Sectors (LGSCAS) for providing finance to eligible projects in the healthcare sectorwith guarantee coverage from NCGTC.

• PSB Scheme for Storage Infrastructure" to meet term loan and working capital requirements of the farmers/ eligible organizations in the construction/ running of Scientific Storage Facilities such as Godowns, Dry Warehouse, Cold Storage, Cold Chain, Silos, Market Yards.

• Indira Gandhi Urban Credit Card Scheme- 2021 for the State of Rajasthan for providing financial assistance to Street vendors, and people providing essential services in the informal sector such as hairdressers, rickshaw-pullers, potters, carpenters, cobblers, masons, tailors, washermen, painters, tap-electricity repairmen, etc.& unemployed youth in the urban area for their rehabilitation.

AWARDS & ACHIEVEMENTS

Bank has been awarded with

• Exemplary Gold Award under "Leadership Capital (4.0)" campaign organised by PFRDA for Atal Pension Yojna (APY) Enrolments.

• Runner-up in Best digital FinancialInclusion Initiative categoryaward declared by IBA.

• 3rd Top Performing Bank in Theme 3 i.e. Collaborating for synergistic outcomes under EASE 4.0 as on 31.12.2021

• 3rd Position in DSB (Doorstep Banking) Udaan Campaign launched by PSB Alliance Pvt. Ltd. From 01.02.2022 to 02.03.2022

• Highest Rajbhasha Kirti Puraskar (Second) of the Official Language for the best implementation of Official Language Policy 14.09.2021

• Third prize in the Rajbhasha Shield Competition from Delhi Town Official Language Implementation Committee for the best implementationof the Official Language Policy oftheUnion.

• Bank''s Hindi magazine ''RajbhashaAnkur'' got the IncentiveAward inthe category of Hindi homemagazine by the DelhiTOLIC.

DIRECTORS'' RESPONSIBILITYSTATEMENT:

The Directors confirm thatin the preparation of the annual accounts for the year ended March 31,2022:

a) The applicable accounting standards have been followed in the preparation of the annual accounts along with proper explanation relatingtomaterial departures, ifany

b) The accounting policies framed in accordance with the guidelines of the Reserve Bank of India were consistently applied. Reasonable and prudent judgements and estimates were made to give a true and fair view of the state of affairs of the Bank at theend ofthefinancialyearand oftheprofitand loss ofthe Bank for the year ended March31,2022.

c) Proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of applicable laws governing banks in India for safeguarding the assets of the Bank and for preventing and detecting fraud and other irregularities,

d) Annual accounts have been prepared on a going concern basis,

e) Internal financial controls system to be followed by the Bank were laid down and that such internal financial controls are adequate and were operating effectively,

f) Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

HUMAN RESOURCE MANAGEMENT

The Bank is having proactive HR management practices where Employees are considered as Assets. The Bank is having Total of 8735 Employees as on 31.03.2022 out of which 6606 are in Officer Cadre, 1878 are in Clerical cadre and 241 are Sub-staff. Out of total 8735 employees 2621 employees are women Employees.

Promotions: Bank is regularly promoting its employees almost in all the cadres every year to keep on rewarding its top performers and enabling them to assume higher responsibilities. Following promotions have been effected during the year 2021-22:-

DGM

AGM

CM

SRM

MGR

OFF

CLK

Promotions from

to

to

to

to

to

to

to

GM

DGM

AGM

CM

SRM

MGR

OFF

Total

4

15

43

79

148

335

179

Training & Human Resources Development: The Bank endeavored to provide maximum trainings to its employees through various modes (Online, Offline & Hybrid Modes) during the Financial Year 2021-22. With this in view, 282 Training programmes were conducted by using expertise of National Institute of Banking Studies and Corporate Management (NIBSCOM), Noida & Staff Training College (STC), Delhi. Also, Bank had conducted specialized training programmes on Attitude, Behaviour and other various modules in the current FY by using expertise of external institutions.

A total of 8067 staff members have attended the training programmes on different coursemodules from 1st April 2021 to 31st March 2022 through 427 Training Programmes, out of which, 145 Training programmes were conducted by Apex Institutions (like NIBM, Pune, IDRBT Hyderabad, CAB Pune, etc). 756 staff members (including top executives) have attended training programmes/webinars from ApexTraining Institutions.

In FY 2021-22, Two General Managers & 1 DeputyGeneral Manager wereundergoing the Leadership DevelopmentProgrammefrom IIM, Bangalore and BBB. Further, the department has also nominated 9 AGMs & 1 CM in the 10th Advanced Management Programme of IIBF in FY2021-22. Also, Bank had nominated 11 officers (1GM, 2 DGM and 8 AGMs) in OnlineTraining Programme on Applied Financial Risk Managementby IIM-Raipur

The PSB Digital Learning Portal was launched in FY 2020-21 to increase Job knowledge and enhance skills of staff members digitally. This portal is accessible to all the Staff Members (Clerks & Above) on 24*7 basis and they can appear in E-Learning modules through their mobiles/laptop/PC as pertheir convenience. In FY 2021-22 we have conducted 60 E-Learning tests.

The bank has renewed its MoU with Centre of Excellence (CoE), SBI Foundation to empower Persons with Disabilities. In FY 2020-21 CoE has conducted onlinewebinars/workshopsforDivyangjans (staff members).

To review training needs and course curriculum of trainings a Training Review and Advisory Committee (TRAC) is constituted at Head Office Level which is headed by Executive Director (HR). In FY 2021-22 three meetings of TRAC were conducted at Head Office.

Creation of Talent Pool through Job Families: In order to create talent pool in different verticals, bank has identified 11 job families for the staff members wherein they can apply to work, on the basis of their professional/academic qualification, experience and are of interest. In FY 2020-21, options were called from Staff members under Job Family and thereafter applications were scrutinized, screened (by interview) and were imparted trainings inthe respected field, before their postings under specializedJob Family.

Recruitment: Bank has consistently looked to address the challenges of superannuation, business growth and expansion. To meet this challenge, Bank has recruited following staff members during financial year2020-21:

POST

Allotted (in FY 2021-22)

Joined

(in FY 2021-22)

SUB-STAFF

00

11*

SWO- CWE-IX (Reserved List)

72

30

SWO- CWE-X

218

139 10*

PO- CWE-X

228

159

AFO

4

4

IT Manager (Scale-II)

16

11

IT Manager (Scale-III)

1

1

Risk Manager (Scale-III)

2

0

Risk Manager (Scale-IV)

2

1

TOTAL

543

366

*CompassionateAppointment.

Industrial Relations: Bank is maintaining cordial & harmonious relations with all the workmen/ officers unions/ associations operating inthe Bank to develop the spirit of co-operation and understanding with the management. IR Cell is conducting Quarterly IR Meetings with both Workmen & Officerunions.

Employment to Reserved Category Employees: The Bank implementsall guidelines stipulated by the Govt. of Indiain respect of Reservation Policyforreservation of posts in recruitments/promotions, whereverapplicable.

The staff strength of SC, ST, OBC & EWS employees stood at 2872, 607, 2382 & 55 respectively on 31.03.2022. The staff strength under various reserved categories is as under-

CATEGORY

SC

ST

OBC

EWS

EX-SM

PWD

OFFICERS

6606

509

1653

25

72

398

CLERKS

1878

57

494

30

180

90

SUB-STAFF

241

12

23

0

8

10

TOTAL

8725

578

2170

55

260

498

Corona Pandemic Initiatives: Bank has provided various relaxations/incentives to staff members who were coming and attending the officeduring the lockdown phase. Some of them were:

• All lactating mothers having infants up to 10 months, pregnant ladies and Divyangjan Employee were sanctioned onetime special leave to insulatethem from any infection or outbreak.

• Zonal Offices/Administrative Offices were advised to ensure 40%-50% of their staff strength to work from home (during lockdown period).

• Introduction of staggered working hours during Covid-19 outbreak.

• An initiative is taken to pay an amount of Rs. 20.00 lakhs to the legal heirs of the employee, as financial assistance in case of death (while in service) of an employee due to infection of Corona Virus (COVID-19).

SportsCell:

Our Bank is having two Hockey teams (Senior Men''s Hockey Team, affiliated with Hockey India and one Junior Hockey Academy) and they are performing well in all the major events of their respective categories. In FY 2020-21, our Bank''s Hockey Team has done well in all the major Tournaments (All India 38th Surjit Hockey Tournament, 57th Nehru Hockey Tournament, National Championship, Obaidullah Khan Hockey Tournament, etc.). However, this year due to COVID-19 restrictions, Bank could not organize "PSB AAO KHELEIN,"an annual sports event ofthe Bank.


Mar 31, 2019

The Board of Directors has pleasure in presenting Annual Report of the Bank along with the Balance Sheet and Profit and Loss Account for the year ended 31st March, 2019.

WORKING RESULTS

TOTAL BUSINESS: During the year ended 31.03.2019, total Business of the Bank stood at Rs.1,71,305.07 crore as compared to Rs.1,71,464.95 crore as on 31.03.2018.

PROFIT: The Bank recorded a Net Loss of Rs.543.48 crore for the year 2018-19 as compared to Net Loss of Rs.743.80 crore during the FY 2017-18. The Return on Assets (ROA) stood at (-) 0.47% as compared to that at (-) 0.69% in the year 2017-18.

DIVIDEND:

The Board has not recommended any dividend for the year 2018-19.

CAPITAL & RESERVE: The Net Worth of the Bank stood at Rs.3652.26 crore as on 31.03.2019 compared to Rs.4733.96 crore as on 31.03.2018.

The Capital Adequacy Ratio (Basel III) of the Bank is 10.93% as on 31.03.2019 against the minimum stipulated requirement of 10.875%.

DEPOSITS:

The total deposits of the Bank stood at Rs.98,557.60 crore as on 31.03.2019 as compared to Rs. 1,01,726.17 crore as on 31.03.2018. The average cost of deposits of the bank stood at 6.01% as compared to 5.93% in previous year.

ADVANCES:

The Bank''s Advances stood at Rs.72,747.47 crore as on 31.03.2019 as compared to Rs.69,738.78 crore as on 31.03.2018. The average yield on Advances stood at 8.61% as compared to 8.80% during the last year.

ACHIVENMENTS UNDER PMSBY, PMJJBY AND APY

The Bank continues to accord importance to the three Social Security schemes launched by Govt. of India. During the FY 2018-19, enrollment of subscribers under the Pradhan Mantri Suraksha Bima Yojana (PMSBY) was 10,04,470 and under the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) it was 1,99,498. The Bank could add 1,47,639 subscribers under the Atal Pension Yojana (APY) during the same period.

Bank has earned Rs. 119.28 Lac as a non-fund income on account of the above enrollments.

The Bank''s branches had participated in every APY Campaign launched by PFRDA and the Bank secured Three Awards for the campaign “APY Formation Day (May 2018)”, “APY Exemplary Eight (Jan 2019)” and “APY Art of Inclusion (Mar 2019)” alongwith 7 awards to Best Zonal Managers and Branch Manager.

The performance of the bank under different Small Saving Schemes of the Government continued to be good and during FY 201819, a total of 9166 new accounts were opened under the Public Provident Fund (PPF), Senior Citizen Saving Schemes (SCSS) & Sukanya Samriddhi Account (SSA).The Bank has earned Rs. 14.75 Lac as non fund income from these Schemes.

FINANCIAL INCLUSION

Our Bank has been an active participant in promoting Financial Inclusion. This is evident from the number of accounts opened, being successful in getting the account holders to keep the accounts funded, in providing Rupay Card linkage and providing all the attendant services with excellent coverage.

A. Bank''s Status under PMJDY as on 31.03.2019:

Sl No.

Parameter

Status

1.

Total PMJDY A/Cs

13.05 lac

2.

Operative PMJDY Accounts

11.18 lac (86%)

3.

Total Rupay Cards Issued

11.74 lac (90%)

4.

Balance held in the PMJDY accounts

R 685 Cr.

5.

Average Balance in the the accounts

R 5250/-

6.

Number of Over Drafts Sanctioned in the accounts

64180

7.

Amount Sanctioned under the overdraft

R 9.48 Cr.

8.

Number of Zero balance accounts

18574 (1.4%)

B. Gram Swaraj Abhiyan & Extended Gram Swaraj Abhiyan :

Department of Financial services launched two subsequent schemes for bringing villagers from far-flung areas also under the ambit of Banking services. The first one named, ''Gram Swaraj Abhiyan (GSA)'' as launched on 14.04.2018 and it lasted up to 05.05.2018. The second one named ''Extended Gram Swaraj Abhiyan (EGSA)'' launched on 01.06.2018 continued up to 14.08.2018. Performance of our Bank under the GSA is mentioned below:

Campaign

Target

Bank''s Achievement

GSA (14.04.18 - 05.05.18)

15339

11669(76%)

EGSA was launched with the objective of providing universal coverage under financial inclusion. The Department of Financial Services allotted villages to Executive Directors of Public Sector Bank for supervising and coordinating the activities of various banks and support service agencies in the respective areas. Our Bank was allotted Moga & Ferozepur districts of Punjab for achieving 100% saturation under the flagship FI programmes of the government. We could achieve the targets allotted to the respective areas by effectively coordinating with all the banks operating there.

PMJDY

PMSBY

PMJJBY

District/ state

Villages

Targets

Achv

% achv

Targets

Achv.

% Achv

Targets

Achv.

% Achv

Ferozepur (19 banks)

254

25814

27528

107

34201

35960

105

21523

21510

100

Moga (17 banks)

207

13536

14990

111

13535

14873

110

8092

8282

102

Total

461

39350

42518

108

47736

50833

106

29615

29792

101

The performance of our Bank is mentioned below:

PMJDY

PMSBY

PMJJBY

Target

Achv

% Achv.

Target

Achv

% Achv.

Target

Achv

% Achv.

9546

11290

118.27

11161

12496

112

6810

7160

105.14

C. PMJDY Campaign (Oct''18 - Mar''19):

Department of Financial services, Govt of India decided to extend the comprehensive PMJDY program beyond 28.08.2018 with the change in focus on opening accounts from “every household” to “every adult”. The campaign was launched with the objective of opening 3 crore PMJDY accounts additionally and provide Rupay card linkage in all those new accounts. The target allotted to our Bank and achievement are given below:

Bank''s performance under Campaign:

Sl No.

Parameter

Target

Bank''s status

% Achievement

1

Opening of PMJDY Accounts (Oct-March)

3.19 lac

2.23 lac

70%

2

Issuance of PMJDY RuPay Cards (Oct-March)

3.19 lac

1.75 lac

55%

D. Individual Bank Mitr Model:

Bank has appointed a total of 353 Bank Mitrs in 11 states divided through 19 Zonal Offices to provide Banking Services to rural areas where brick & mortar branch is not available. Bank has adopted individual BC Model. M/S TCS has been selected for FIG/Service provider. BCs provide basic Banking services like A/C opening, Deposit/ Withdrawal & Fund Transfer (interoperable), Balance Enquiry & Mini Statement, sourcing of GCC/KCC, FD/RD opening, sourcing of various micro insurance schemes (PMJJBY,PMSBY) along with pension schems (APY) & helping Branches in recovery of NPA/TWO accounts etc.

Performance of Bank Mitrs:

Particulars

FY 2017-18

FY 2018-19

Total Business brought by Bank Mitrs

Rs. 359 Cr

Rs 382 Cr

Total No of Transactions done on MicroATMs

Rs 16.17 Lac

Rs 10.34 lac

Total FD/RD Accounts opened

8857

9809

Total Deposit brought

Rs 242 Cr

Rs 266 Cr

No of KCC opened and Amount disbursed

2990

2760

Rs 104 Cr

Rs 97.06 Cr

No of GCC opened and Amount disbursed

135

145

Rs 1.65 Cr

Rs 2.47 Cr

No of Accounts with NPA Recovery & Amount Recovered

2180

3083

Rs 11.82 Cr

Rs 16.86 Cr

E. Awards & Achievement:

The bank was adjudged as the Runner Up in the category of the Best Financial Inclusion Initiatives amongst Small Banks by Indian Banks'' Association in ''Banking technology, Conference, Expo & Awards 2019''.

MARKETING AND INSURANCE

Sovereign Gold Bond: During FY 2018-19 Bank participated in all the six issues and was able to mobilize the sale of 61.18 Kg Gold with earning a commission of Rs 19.35 Lakh.

Gold Monetization Scheme (GMS): The Bank successfully rolled out the Gold Monetization Scheme of Govt. of India and joined the list to become one of the leading public sector bank to implement this scheme.

Bancassurance: The Bank sold a total of 5629 Life insurance policies during FY 2018-19 of both SBI Life Insurance Co and LIC of India, while a premium to the tune of Rs 10.69 Crore was collected resulting in a commission income of Rs 2.08 Crore.

NEW INITIATIVES

- Implementation of NCMC cards

- Card Blocking through Bank''s Call Centre PRIORITY SECTOR ADVANCES

Bank has won Social Banking Excellence Awards from ASSOCHAM as the Best Bank under the Priority Sector Lending other than Agriculture'' and Runner-up under the Agricultural Banking Category for Small class'' at the 14th Annual Banking Social Banking Excellence Awards, 2018.

- Total Priority Sector Advances stood at Rs. 28287 crore (39.04% of ANBC) as on 31.03.2019. However, as per RBI guidelines, Bank was able to surpass the regulatory target of (40% of ANBC) to PS Advances on average basis achieving 41.12% of ANBC.

- Bank''s Agriculture advance stood at Rs.11750 crore (16.22% of ANBC) as on 31.03.2019. On average basis, Bank has achieved 17.35% of ANBC under Agriculture Advances.

- Bank''s advance to Small & Marginal Farmers stood at Rs.6825 Crore (9.42% of ANBC) as on 31.03.2019 against the target of 8.00% of ANBC.

- Bank made advances to the tune of Rs. 1150 crore against the target of Rs. 1200 crore under Pradhan Mantri Mudra Yojana which is 95.83% against the target.

- Bank has issued RuPay Debit Cards in 2.16 lac KCC accounts out of the total operative KCC accounts of 2.21 lac (97.76%) as on 31.03.2019

- Bank has 17 Financial Literacy Centres (FLCs) at block level in Punjab & Haryana to spread financial literacy among people. A total of 1293 camps have been organized during the 2018-19 by FLC Counsellors wherein 62509 people actively participated and were sensitized about Basic Banking Services, so that they are able to avail banking services according to their requirements.

- Bank''s lending to weaker sections stood at Rs.7948 Crore achieving 10.97% of ANBC as against a target of 10% of ANBC.

New Initiatives in Priority Sector:

- Bank has added 36 branches in the category of specialized MSME branches thus raising total number of Specialized MSME branches to 144.

- Relationship Officers have been appointed in specialized MSME branches to take care of various financial needs of existing MSME Customers and special helpdesk created at each of these branches for MSME Customers.

- Bank has adopted cluster-based Financing. We have 803 Branches in 268 MSME clusters, 71 Specialized Branches in 156 MSME clusters. Bank has presence in 73 Food and Agro Processing Clusters.

- Each Zonal office has adopted two MSME clusters having good potential in their area/ region during this FY 2018-19 and liaisoning with industries/ trade associations for identifying their needs.

- Bank has entered into tie up arrangement with M/s Online PSB loans Limited for mobilizing online MSME loan proposals.

- Bill discounting of MSME borrowers through TReDS platform has been introduced.

RETAIL LENDING

- The Retail Lending portfolio of the Bank as on 31.03.2019 stands at Rs 15826 Cr and thereby, Retail Lending has registered a business growth of 8.22 % over the previous year.

- Total advance of the Bank has increased by Rs. 3042 crore and out of that the share of retail credit is Rs. 1202 crore which is 40% of the total increase.

- The percentage of Retail credit to Gross Advances was 21.74% as on 31.03.2019.

- We have opened four centralized processing centres for retail (RLCs) to improve quality of lending and to curtail TAT. Presently 155 branches of the Bank are under the ambit of RLCs.

- The Bank has modified it''s Retail Loan products to make them more attractive and competitive. A new product viz., PSB Contractor plus has been designed in order to meet credit demands of contractors under the MSME category.

- A special campaign titled “Festival Bonanza” was run from October 2018 to March 2019, covering the Retail products viz. PSB Apna Ghar and PSB Apna Vahan. The Bank sanctioned fresh loans to the tune of Rs. 1091 crore during the campaign.

Asset Quality:

The Bank continued to make concerted efforts to contain NPAs and has used all available tools of recovery including negotiated settlements and legal means. The provisions of “The Securitization & Reconstruction of Financial Assets & Enforcement of Security Interest Act -2002” were used effectively. The Bank had also organized Recovery Camps during the year at various centers.

The performance of the Bank under recovery of NPAs during the year remained reasonable. The aggressive and focused efforts resulted in the total recovery of over R2369.34 Crore during the year including recovery of R186.01 Crore in Technically Written Off Accounts.

Bank has made earnest efforts to contain fresh slippage. As a result our gross NPAs and net NPAs as on 31.03.2019 have been stood at R8605.87 Crore and R4994.23 Crore respectively against R7801.65 Crore and R4607.87 Crore as on 31.03.2018.

The position of Gross and Net NPAs as on 31.03.2019 vis-a-vis previous year is as under;

Amount in Rs. Crore

NPA

As on 31.03.2018

As on 31.03.2019

Gross

7801.65

11.19%

8605.87

11.83%

Net

4607.87

6.93%

4994.23

7.22%

The Provision Coverage Ratio of the Bank as on 31.03.2019 stood at 59.46%.

Formation of Stressed Asset Management Vertical (SAMverT)

The SAMverT is a specialized vertical for management of all stressed assets of Rs.25 Crore and above. The following are the mandates of the vertical:

i. SMA accounts -To monitor the SMA- 1 & 2 accounts having Balance Outstanding amount Rs.25.00 Crores and above.

ii. NPA/TWO accounts - Ensures that timely action is taken under SARFAESI Act/ DRT Act/ Insolvency & Bankruptcy Code etc. Role & Responsibilities of credit monitoring department

The credit monitoring department will continue to monitor all standard accounts and SMA accounts having outstanding below Rs.25 Crore.

Progress made in the FY 2018-19

In the financial year 2018-19, the department has made total recovery amounting to Rs.2327.86 Crores against the target of Rs.2000.00 Crores. This recovery includes TWO recovery of Rs.186.18 Crores against the target of Rs.160.00 Crores.

CREDIT MONITORING

The Department has already set up a Control Room for proper and effective monitoring of large accounts, with exposure above Rs.25 Lac at HO and accounts up to Rs.25 Lac by separate Control Rooms at Zonal Offices. These Control Rooms maintain close follow-up with the zones and branches on an ongoing basis so that there is an effective management of SMA and prevention of slippage. Restructuring of eligible cases also is being done as per the RBI guidelines.

The Department has entered into tie-up with agencies like Experian and also subscribed products like the “CIBIL like e-verify” and “CRISIL MSME Rank” for enhanced Due diligence. Various functionalities have been developed for easy reporting and having an effective check on revenue leakage besides bringing about Capital Conservation with the help of automation.

INFORMATION TECHNOLOGY

Alternate Delivery Channels

- Automation of Password Generation in E-banking/ Automation of E- banking Download & upload for new users. Implementation of Online Opening of Sukanya Samridhi Accounts through Internet Banking / Online credit and applying for account opening. Registeration of Mobile Banking in Internet Banking Module.

- On Line Applications available on website for Agriculture Loan Apply & Track, SHG Loan Apply & Track and Locker Online Apply & Check.

SMS facilities

- SMS for overdue Loan installment after two days of overdue date and the next reminder on 13th day of the installment overdue / Customer will receive SMS for both transactions debit & credit in Loan account except interest entry.

- Sending Birthday Greeting Message to all customers , whose mobile number is registered in Bank''s branch.

- Sending transactional SMS both in English as well as in Hindi.

- SMS to customer at the time of closer & pre Mature closer of FDR.

- SMS to customer registering complaints through SPGRS portal at the time of registration of complaints / after closer of the complaints. Facilities for Senior Citizens

- Waiver of Cheque Book issue charges to Senior Citizens.

- Display of PPO Number on the front page of the passbook of pensioners having saving account with our Bank.

- Implementation of Door Step Banking Services for Senior Citizens and differently abled persons .

- Implementation of New tax slab TXSCZ has been created in finacle. System will not deduct TDS on interest on FDR ( including Recurring Deposits Credited/ Accrued/ Paid upto Rs.50000/ to senior citizen for a particular financial year). Existing tax slab has been changed in Cust ID for all accounts opened under the Senior Citizen Schemes.

Others initiatives

- Implementation of Auto Updation of Overdue interest in KCC account / Loan accounts.

- Printing of purchaser name in Demand Draft.

- E- Statement to Valuable Customer through Email.

Information Technology (CBS)

- A new report made available in Finacle for generating Acknowledgement for Nomination of all kind of deposit accounts.

- Introduction field made optional in Finacle as per HO KYC guidelines. Aadhaar Card made optional in finacle as per HO KYC guidelines. Implementation Of CKYC functionality in our Bank.

- A new menu has been deployed in Finacle for entering denomination details at the time of all Cash Receipts/ Cash Payments/ Exchange at branch level.

- When a Minor Account Holder turns into Major, system will raise an alert to the branch user while executing any transactions in such accounts.

- Implementation of A new menu for entering the premium details of SBI Life Insurance in order to facilitate fund transfer and smooth reconciliation process.

- Execution of SASCAL on monthly basis.

- Introduction of Single Menu for AADHAAR SEEDING , SMS REGISTRATION and MOBILE REGISTRATION.

COMPLIANCE FUNCTION

Compliance Department is working under the guidance and supervision of Chief Compliance Officer. The independent Compliance Department works as per Board approved Compliance Policy. Compliance Department disseminates the regulatory guidelines to respective business departments and places the status of compliance before Board/ ACB. Compliance Department ensures the compliance of various regulatory/statutory guidelines & codes by the way of self-certification and compliance testing.

During the FY 2018-19, RBI SSM team conducted on-site Inspection for Supervisory Evaluation (ISE) from June 11 to August 06, 2018, submitted it''s Risk Assessment Report (RAR) as on 31.03.2018 along with Risk Mitigation Plan (RMP). Bank is working in coordination with the SSM, Reserve Bank of India (RBI) to implement the Risk Mitigation Plan (RMP).

During the FY 2018-19, RBI imposed monetary penalty of Rs. 1 crore on bank for non-compliance of RBI''s directions on SWIFT related operational controls.

PUBLIC RELATION AND PUBLICITY

During the financial year 2018-19, the Bank adopted a multi-media strategy to build up its image in public at corporate and regional level. The publicity budget and its utilization was decentralized empowering the Zonal Heads to decide the means of the publicity depending upon the business potential of the local area, to sanction the deserving cases under their discretionary powers for proper and effective control.

The Bank sponsored various events of high publicity value, as under:-

- The Statesman Vintage and Classic Car Rally 2019 held in New Delhi.

- 4th Global Exhibition on Services 2018 held in Mumbai.

- Annual Conference of Indian Economic Association organized by Institute for Studies in Industrial Development, New Delhi.

- TEDx event organized by Indira Gandhi Technical University, New Delhi.

- Convention on Transforming India organized by Department of Commerce, Delhi School of Economics.

- International Conference on Guru Nanak''s philosophy and legacy organized by SGTB Khalsa College.

- Surjit Hockey Tournament held in Jalandhar.

- P&SB Maharaja Ranjit Singh Hockey Tournament held in Amritsar. On initiative taken by the Department, the title of above tournament was changed and Bank''s name was prefixed to the title.

- The Bank also received immense publicity through its traditional Wall Calander 2019 on the theme 550th Birth Anniversary of Sh. Guru Nanak Dev Ji.

- (j) To felicitate Bank''s large clientele and the public, greetings ad was published in leading newspapers of India on the occasion of Prakash Utsav of Shri Guru Nanak Dev Ji and Lohri/Makar Sankranti/Bihu/Pongal festivals.

- (k) At zonal level, Bank''s branding was also done across buses, metro stations and ferry vessel, in Kolkata. Besides, Bank''s audio-visual advertisement was also displayed at Interstate Bus Stand at various places of Punjab, namely, Ludhiana, Sangrur, Patiala, Amritsar, Jalandhar, and Bathinda. Bank''s advertisement was also broadcasted in TV Channels and FM Radio. Resorting to outdoor media publicity, Bank''s hoarding was put up at departure lounge of Jammu Airport and Round about at Chandigarh Sector 41, 42 and 37.

VIGILANCE

PREVENTIVE VIGILANCE

Our focus is to achieve highest level of transparency in transactions and overall operations of the Bank. We have been regularly sensitizing all employees of the Bank to ever remain vigilant while carrying out their duties. Necessary instructions/guidelines have been circulated from time to time with an endeavor to cut down the time taken for initiation of Disciplinary action cases. Frequent exchange of ideas/opinions have taken place between CVO and other Top level Executives focusing on steps to be taken for adhering to underlying systems and procedures, framing and revising policies and emphasizing the need for ethical banking at all levels. Efforts have been made to percolate the message at all levels in the Institution.

As part of our preventive vigilance strategy, Vigilance Officers (VOs) have been posted at various Zonal Offices. Besides undertaking surprise field visits they are also scrutinizing transactions offsite in Nominal Head accounts, various Office accounts and Staff accounts at branches under the jurisdiction of concerned Zonal Office to check for any unauthorized / abnormal transactions which can have wider implications later.

It has also been our endeavor to ensure that all grievances of stakeholders are promptly redressed by the Bank and steps have been taken to ensure that the complaints received are redressed to the satisfaction of complainant. Due importance is being given to publicize and make popular the Whistle Blower Policy of the Bank.

As preventive vigilance measure, various CVC references have been taken into consideration and the inputs were provided to HO HRD Department, based on which the HO HRD Department has issued various circulars / guidelines for the benefit of operating functionaries.

Close interaction and coordination is maintained with other Departments also like General Administration, IT, Law & Recovery, Credit Monitoring etc. to discuss ways to improve systems and procedures.

Following Systemic improvements have been implemented on the basis of observations made / feedback given by vigilance officers who are working in the field under control of Vigilance department:

1) Sundry accounts: Reversal of entries from Sundry Creditors Account has been restricted. Now the system does not permit branches to debit any entry in Sundry Creditors account if the transaction amount is more than a specified limit. In cases where the amount exceeds the specified limits, consent / permission from competent authority is required.

2) Proxy accounts: Usage of proxy accounts has been limited to evade its mistreatment.

3) Recurring Deposit (RD) accounts: Closure of RD accounts through proper flow ID has been implemented in Finacle. Zero balance RD accounts are automatically closed at backend during end of the day.

The Bank observed Vigilance Awareness Week in the year 2018-19 with this year''s central theme “Eradicate Corruption - Build a New India” from 29.10.2018 to 03.11.2018 in true spirit.

During this period, the Bank has organized various programmes at different locations across the country by including participation of general public at large. During the week, 220 Gram Sabhas, 521 programmes in the schools, 100 programmes in the colleges were held. Various other activities including -Debates, Elocution, Quiz programmes, Rallies, Seminars / Workshops, Walkathons, Cyclothons, Road shows, Awareness through Mobile Vans, health camps, Distribution of Pamphlets/Banners, Issue of Journal/ Newsletter, Slogan Competition, Essay Writing Competition etc. were organized. These programmes were graced by eminent personalities of the society. The staff members / customers of the Bank/ general public were encouraged to have E-Pledge through URL provided on Bank''s web site, which resulted in participation of more than 15000 people and availed E-Pledge facility across the nation.

The main function was held at Staff Training College, Rohini, Delhi on 01.11.2018. The MD & CEO Sh. S. Harisankar and Executive Directors graced the occasion and addressed the gathering of more than 300 participants, mainly consisting of citizens, school students and Bank Officers. During the programme, latest updated version of Vigilance Manual was also released.

PUNITIVE VIGILANCE

Special efforts have been made to reduce the pendency of disciplinary action cases, with the active involvement of the Disciplinary Authorities (DAs) / Controllers and with coordination with the Hon''ble CVC.

Earnest efforts are made to bring down the pendency of enquiries of more than 6 months. Efforts are also made to conclude Disciplinary action cases quickly to convey strong message in the Organization that wrong doing and malafide intent will be dealt with severely.

Special emphasis is laid on conducting training programmes on preventive vigilance and enhancement of skills and job knowledge on Disciplinary matters.

SECURITY

The Bank has a well established Security set-up within the Bank''s organizational structure. The H.O. Security department has been regularly reviewing the security arrangements at all Currency Chests and branches and accordingly strengthening the security arrangements to meet prevailing security scenario with effective, modern and unobstructed Security Systems. All the essential and mandatory security arrangements in terms of RBI/ IBA guidelines are provided at almost all branches.

The Zonal Security Officers periodically carry-out Security audit of branches to assess the security arrangements in vogue and recommend implementation of additional preventive security measures wherever desired. They maintain close liaison with the law enforcing and administrative authorities. Besides, the Chief Security Officer and other officials from Head Office are also carrying out the security audit of the Currency Chests and also undertake random visits of the vulnerable branches of the Bank.

The Access Control System at all Currency Chests of the Bank has been strengthened in terms of RBI guidelines. A proper system of regulating access to Currency Chest Strong Rooms and proper records of entry into / exit from the Vault Room of the chest is being maintained.

Security Alarm Systems are installed at all branches and currency chests. Strong Room conforming to RBI specification are provided at majority of branches.

The Bank has a total of 12 (twelve) currency chests and all of them are being guarded by the State Police guards. All branches of the Bank except the low risk branches are provided with armed guards.

All the Security Officers undergo refresher training on security, once in a year.

Keeping in view the threat perception, volume of cash and valuables handled and need for continuous surveillance, CCTV Surveillance System have been installed at all the Currency chests, Branches & ATMS.

IMPLEMENTATION OF OFFICIAL LANGUAGE

The year 2018-19 was a year of achievements in view of implementation of official language. This year, our bank received the highest award Kirti Shield (seconod prize) for implementation of official language in A region. On 14.09.2018 at Vigyan Bhawan in the grand ceremony, our bank''s Executive Director, Dr. Fareed Ahmed Ji received the award from Hon-ble Deputy President Shri N. Venkaiyya Naidu Ji. In addition to this, the bank-s Hindi magazine

During the financial year 2018-19, Bank made significant progress in implementation of official language Policy of Govt. of India for promoting and propagating the use of Official Language in the Bank. The implementation of official language was prevalented and extended on the basis of the principles of project implementation by taking out Hindi from the balustrade of translation. A total of 83 workshops were organized, in which 1464 staff members were trained. Besides this, in 446 Hindi Desk Training Programmes, 1693 staff members were imparted training for using official language and Unicode training on Computers. With the aim of reviewing the progress of Official Language, inspections were conducted in 416 Branches / offices.

From financial year 2018-19, the honorarium amount given to the writers for writing in Rajbhasha Ankur Magazine has been enhanced. And , at Head office level, attractive cash prizes were also given to the winners participated in different competitons.

General Administration Department

- Completed the Furnishing and renovation work of all 8 Floors and Basement of HO building at 21,Rajendra Place,New Delhi.

- Won the title deed case which was pending since 29years against Madan and Co. for Bank owned property at Safdarjung Enclave. Lease deed has been registered in favor of the Bank by DDA.

- Bank successfully saved Rs 2.9 crore against DDA in a case where DDA claimed 3.20crore as composition fee for Extension of Time charges for construction of Banks'' Staff Training college at Rohini. As per court order bank paid Rs.30lacs only.

- Successfully completed the tender for Empanelment of vendors for procurement of 675 No.s 1 1Pocket Note Sorting Machine for Branches all over the country.

- Successfully completed the sale of following unutilized non-core assets of Bank under Reform Agenda:

i) 11No.s Flats at Mumbai for Total Rs.8.91crore.

ii) Commercial property at Sanjaouli for Rs.1crore.

- Branch Ambience Standardization Manual-2018 has been circulated to Zonal Offices/Branches to have pleasing ambience of customer service area, with proper seating, uncluttered surroundings, cleanliness, proper whitewashing and painting, etc. Bank has provided Basic customer amenities to public such as access to clean toilets and safe drinking water with good hygiene.

- Bank has provided the Ramp facility in 1048 ATMs out of Total 1201 ATMs. Construction of ramps in 6 ATMs is under progress. Ramps are not feasible in remaining 147 ATMs due to various reasons like ATM located at Upper Ground/1st Floor, steeper slope, insufficient space, objection from local authority etc.

HANDLING OF COMPLAINTS

The public grievances are handled at three levels in the Bank i.e. Branch, Zonal Office and Head Office. Complaints received at any of these Offices is immediately acknowledged, redressed and final reply is given to the complainants within the timeframe.

Henceforth, HO. Inspection Dept., which is a Nodal Office for Public grievances, issue guidelines & operational instructions w.r.t. Public grievances & about complaints with Banking Ombudsman. There are 7 Nodal Offices for Handling Banking Ombudsman Complaints (ZO. Delhi 1, Chandigarh, Mumbai, Bhopal, Chennai, Kolkata & Lucknow)

Besides Bank''s own designed SPGRS portal, the department is using two other portals; namely CPGRAMS (Ministry of Finance) and INGRAM (Ministry of Consumer Affairs), for receipt of public grievances and subsequent reporting of redressal/ closure.

TIMELINE

For the Public grievances received, the Grievance is assigned to the BO/ ZO / HO Deptt. by the HO Inspection Deptt. After the assignment, the system allows 10 days to BO/ZO/ HO Deptt. to resolve the grievance. On expiry of the 11th day, if grievance remains unresolved, it automatically escalated to the respective ZOs in case of Branches and to HO Inspection Deptt. in case of ZOs and HOs deptt.

TAT TIME

Tat for the redressal of complaints is on the reducing side every Financial year owing to the Root Cause analysis of the complaints. Grievances Redressal System is continuously improving on account of ABC analysis of the complaints/ grievances conducted every quarter by the department under the guidance of higher authorities.

By Order of the Board of Directors

Place : New Delhi S Harisankar

Date : 04 June, 2019 MD & CEO


Mar 31, 2018

The Board of Directors has pleasure in presenting Annual Report of the Bank along with the Balance Sheet and Profit and Loss Account for the year ended 31st March, 2018.

PUBLIC RELATION AND PUBLICITY

During the financial year 2017-18, the Bank adopted a multi-media strategy to build up its image in Public at corporate level and accordingly publicity was made through the print media by release of its product, tender, financial and other display/notice ads in different newspapers, magazines and souvenirs targeting various audiences all over the country. The publicity budget and its utilization was decentralized empowering the Zonal Heads to decide the means of the publicity depending upon the business potential of the local area, to sanction the deserving cases under their discretionary powers for proper and effective control.

The Bank at HO level used outdoor publicity tools i.e. Sponsorship and Display of Banners & Hoardings on events of high publicity value e.g. Gurpurab celebrations, Surjit Hockey Tournament, participation in Exhibition organized by Bhai Vir Singh Sahitya Sadan on Sri Guru Gobind Singh Ji at Patna Sahib, Bihar, participation at National Talent Olympiad for students with special needs, participation at SARAS Mela and also corporate publicity through hoardings at Amritsar Airport and at Wagha International Border facilitated extension of outreach of the Bank. The Bank also received immense publicity through Bank’s traditional Wall Calander 2018 which was widely distributed among clients and well wishers of the Bank and the Bank also earned well deserved publicity by way of coverage of its press releases by the print media.

All these activities facilitated the Bank to rededicate itself to the service of the nation and enabled it to earn a well deserved mileage on the publicity front.

VIGILANCE

With the aim to sensitize and enrich the knowledge of Vigilance Administration and in order to inculcate and nurture a culture of alertness at the ground level and to educate the operating staff for curbing non-observance of the laid down procedures or other malpractices. Various measures like lectures on Preventive Vigilance in training programmes, release of PSB Vigil (IIIrd Volume) incorporating various articles on Preventive Vigilance etc. were implemented.

During the year 2017-18, the Bank observed Vigilance Awareness Week with the central theme HMy vision - Corruption Free IndiaH from 30.10.2017 to 04.11.2017 in true spirit. During the programme Vigilance News Letter 0 DOs & DONTs 0 was also released. Besides, different programmes were also organized at the Bank level across the country at Gram Sabhas / schools and colleges which were attended by over one lakh participants. Various activities were performed during Vigilance Awareness Week including -Debates, Elocution, Quiz programmes, Rallies, Seminars / Workshops, Walkathons, Cyclothons, Road shows, Awareness through Mobile Vans, health camps, Distribution of Pamphlets/Banners, Issue of Journal/ Newsletter, Slogan Competition, Essay Writing Competition etc. These programmes were graced by eminent personalities of the society. The staff members / customers of the Bank/ general public were encouraged to have E-Pledge through URL provided on Bank’s web site, which resulted in participation of more than 15000 people and availed E-Pledge facility across the nation.

On recommendations of Vigilance Department, Bank has decided to nominate two nodal officers for each zone who will regularly monitor transactions in Nominal heads, Dormant accounts, Inoperative Accounts at Branch level, as Preventive vigilance measure.

PUNITIVE VIGILANCE

As in vogue, this year also special thrust was given to reduce the pendency of disciplinary action cases, with the active involvement of all the Disciplinary Authorities (DAs) / Controllers and with proper coordination with the Hon’ble CVC / other Govt. Agencies, which is evident from the following details:

2014-15

2015-16

2016-17

2017-18

Vigilance (RDA) Cases pending

70

58

49

54*

Pending CVC referred Complaints

01

00

00

00

Charge Sheet issued

63

56

53

62

No. ofofficials in the ODI List

120

98

81

75

*Out of these 54 cases, 2nd stage advices have been conveyed in 5 cases to the respective Disciplinary Authorities before 31.03.2018 and the same shall be disposed off shortly after following the due process.

SECURITY: The Bank has a well established Security set-up within the Bank’s organizational structure. The H.O. Security department has been regularly reviewing the security arrangements at all Currency Chests and branches and accordingly strengthening the security arrangements to meet prevailing security scenario with effective, modern and unobstructed Security Systems. All the essential and mandatory security arrangements in terms of RBI/ IBA guidelines are provided at almost all branches.

The Zonal Security Officers periodically carry-out Security audit of branches to assess the security arrangements in vogue and recommend implementation of additional preventive security measures wherever desired. They maintain close liaison with the law enforcing and administrative authorities. Besides, the Chief Security Officer and other officials from Head Office are also carrying out the security audit of the Currency Chests and also undertake random visits of the vulnerable branches of the Bank.

The Access Control System at all Currency Chests of the Bank has been strengthened in terms of RBI guidelines. A proper system of regulating access to Currency Chest Strong Rooms and proper records of entry into / exit from the Vault Room of the chest is being maintained.

Security Alarm Systems are installed at all branches and currency chests. Strong Room conforming to RBI specification are provided at majority of branches.

The Bank has a total of 12 (twelve) currency chests and all of them are being guarded by the State Police guards. All the branches of the Bank are provided with armed guards. All cash remittances are escorted by armed guards.

All the Security Officers undergo refresher training on security, once in a year.

Keeping in view the threat perception, volume of cash and valuables handled and need for continuous surveillance, CCTV Surveillance System have been installed at all the Currency chests, Branches & ATMS.

IMPLEMENTATION OF INDIAN ACCOUNTING STANDARDS

The Reserve Bank of India issued a circular DBR.BP.BC.No.76/21.07.001/2015-16 on February 11, 2016, requiring scheduled commercial banks to comply with the Indian Accounting Standards (Ind AS) for accounting periods beginning from April 1, 2018 onwards, with comparatives for periods ending on or after March 31, 2018. Ind AS would be applicable to both Standalone Financial Statements and Consolidated Financial Statements.

RBI, on April 5,2018, through its first monetary policy statement for FY2018-19, deferred Ind AS implementation for the scheduled commercial banks (excluding RRBs) by one year such that the implementation of Ind AS would begin from April 1, 2019 onwards, with comparatives for the year beginning April 1, 2018.

The Bank is currently in the process of identifying the changes required to be made to its systems and processes and is evaluating technology solutions.

Further, as per Reserve Bank of India (RBI) directions, the Bank submitted Standalone proforma Ind AS financial statements along with other computations to the RBI for the half-year ended September 30, 2016 and for the quarter ended June 30, 2017 in FY 2017-18, as required.

IMPLEMENTATION OF OFFICIAL LANGUAGE: The year 2017-18 was a year of achievements in view of implementation of official language. This year, our bank received the highest award Kirti Shield (first prize) for implementation of official language in A region. On 14.09.2017 at Vigyan Bhawan in the grand ceremony our bank’s Chairman and Managing Director, Mr. Jatinderbir Singh (IAS) received the award from Hon’ble President Shri Ram Kovind ji. Simultaneously, the bank’s Hindi magazine ‘Rajbhasha Ankur’ was awarded second prize by the committee formed for all the banks of Delhi (Delhi Bank Nagar Official Language Implementation Committee) and also received an incentive award for the implementation of official language at Head office. During the year, our bank received a total no. of 16 awards in different interbank competitions organized by different banks under Delhi Bank Nagar Official Language Implementation Committee, is a record. Besides this, Bank was also awarded Rajbhasha Shields in Ludhiana, Delhi, Bareilly, Bhopal, Patiala, Chandigarh, Gandhi Nagar and Durg (Bhilai) Chhattsgarh by respective Town Official Language Implementation Committees for better Implementation of Official Language in banking sector.

During the financial year 2017-18, Bank made significant progress in implementation of official language Policy of Govt, of India for promoting and propagating the use of Official Language in the Bank. The implementation of official language was prevalented and extended on the basis of the principles of project implementation by taking out Hindi from the balustrade of translation. A total of 85 workshops were organized, in which 1496 staff members were trained. Besides this, in 603 Hindi Desk Training Programmes, 2793 staff members were imparted training for using official language and Unicode training on Computers. With the aim of reviewing the progress of Official Language, inspections were conducted in 691 Branches / offices.

The special achievement of financial year 2017-18 is that from the financial year 2018-19, the honorarium amount given to the writers for writing in Rajbhasha Ankur Magazine has been enhanced as per experience. In the year 2017-18, at Head office level, attractive cash prizes were also given to the winners participated in different competitons for initiating implementation of official language. Similarly, this system is proposed to be started at the Zonal office level also.

GENERAL ADMINISTRATION:

Construction of Office Building at Ranjit Nagar was completed by April’2017 and as on date B/O Ranjit Nagar &RCC, Delhi has shifted to the premises and renovation of Bank House Building (except basement) was completed by July’2017. The tender for the renovation of Basement and External beautification of the HO Building was floated and renovation/ External beautification work is in process

CONSTITUTION OF BOARD OF DIRECTORS

As on 31st March 2018, the Board comprised of two Executive Directors besides seven other Directors including representatives from Ministry of Finance, Reserve Bank of India, two Share Holder Directors and one Part Time Non Official Director under CA category and two other Part Time Non Official Directors.

The constitution of Bank’s Board of Directors underwent following changes during the year 2017-18:

INCLUSIONS

- Sh. Govind N Dongre was appointed as Executive Director of the Bank vide Government of India, Ministry of Finance, Department of Financial Services, New Delhi Notification No. F.No. 4/5(2)/2017-BO.I dated 09.10.2017.

- Sh. S Selvakumar was nominated as MOF Nominee Director of the Bank vide Government of India, Ministry of Finance, Department of Financial Services, New Delhi Notification No. F.No. 6/3/2012-BO.I dated 17.08.2017.

- Sh. S R Ghedia was nominated as Non Official Part Time Director under CA category vide Government of India, Ministry of Finance, Department of Financial Services, New Delhi Notification No. F.No. 6/1/2015-BO.I dated 27.12.2017

- Sh. Madhu Sudan Dadu was nominated as Non Official Part Time Director vide Government of India, Ministry of Finance, Department of Financial Services, New Delhi Notification No. F.No. 6/1/2015-BO.I dated 27.12.2017

- Sh. Harsh bir Singh was elected as Director from amongst the Shareholders of Punjab and Sind Bank on 01.07.2017

- Sh.TR Mendiratta was elected as Director from amongst the Shareholders of Punjab and Sind Bank on 01.07.2017 CESSATIONS

- Sh. Jatinderbir Singh completed his term as Chairman and Managing Director of the Bank on 31.12.2017 i.e. the last day of the month in which he attained the age of superannuation.

- Sh. Mukesh Kumar Jain, Executive Director of the Bank was appointed as Managing Director & CEO, Oriental Bank of Commerce vide Government of India, Ministry of Finance, Department of Financial Services, New Delhi Notification No. F. No. 4/4/2016-BO/l(Vol.ll)

- Sh.SR Mehar, MOF Nominee Director was on the Board of the Bank upto 17.08.2017

- Sh.MS Sarang completed his term as Shareholder Director on 30.06.2017.

- Sh.SP Babuta completed his term as Shareholder Director on 30.06.2017.

CORPORATE GOVERNANCE

The Bank is committed to good Corporate Governance and is constantly striving to further strengthen the same to ensure greater transparency and better coordination at all levels in the Organization. The working of the Bank reflects transparent ownership structure, improved risk management practices, well defined delegation of powers, accountability and an elaborate audit function carried out by both its Inspection & Audit Division and by independent Statutory Central Auditors.

The Bank has complied with the guidelines of RBI and SEBI on the matters relating to Corporate Governance which have been examined by the Statutory Central Auditors.

DIRECTORS’ RESPONSIBILITY STATEMENTS

The Directors confirm that in preparation of the Annual Accounts for the year ended 31st March, 2018:

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

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

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

- 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.

STAUTORY AUDIT: As approved by Reserve Bank of India, the Bank has appointed M/s Dhawan & Co., New Delhi and M/s Davinder Pal Singh & Co., Mohali, M/s S Mann & Co, New Delhi and M/s Baldev Kumar & Co Chandigarh as Statutory Central Auditors for the accounting year ended March 2018.

ACKNOWLEDGEMENTS

The Board of Directors of the Bank thanks valued customers, shareholders, well-wishers and correspondents of the Bank in India and abroad for their goodwill, patronage and continued support.

The Directors also acknowledge with gratitude the valuable and timely advice, guidance and support received from Government of India, Reserve Bank of India, Securities and Exchange Board of India (SEBI), Stock Exchanges of various State Governments, Financial Institutions and the Statutory Central Auditors of the Bank in the functioning of the Bank.

The Directors place on record their deep appreciation for the valuable contribution of the members of the staff at all levels for the progress of the Bank during the year and look forward to their continued co-operation in realization of the corporate goals in years ahead.

For and on behalf of Board of Directors

Place: New Delhi Fareed Ahmed

Date: 16 May, 2018 Executive Director


Mar 31, 2017

The Board of Directors has pleasure in presenting Annual Report of the Bank along with the Balance Sheet and Profit and Loss Account for the year ended 31st March, 2017.

MANAGEMENT DISCUSSION AND ANALYSIS:

ECONOMIC OUTLOOK

Economy can draw considerable comfort from prevailing favorable macro conditions in terms of decline in inflation, increase in foreign capital inflows, fairly stable currency, narrowing trade deficit and current account deficit, lower interest rate regime and growth supportive government policies and initiatives, including the adoption of fiscal discipline. 2016-17 has been marked by several historic economic policy developments. On the domestic side, we are very close to introduction of the long-awaited and transformational goods and services tax (GST) while demonetization of the large currency notes signaled a regime shift to punitively raise the costs of illicit activities. There is a widespread view that Economy has moved on a high growth path and it could expand by between 6.75% and 7.5% in 2017-18 signaling that growth could recover sooner than expected after scrapping of high-value banknotes. Demonetization would bring long-term benefits to the economy, structural reforms and a proposed Goods and Service Tax could boost growth rate to desired level. The growth in GDP during 2016-17 is estimated at 6.8%. Industry has shown significant improvement primarily on account of the surprising acceleration in manufacturing. Meanwhile, services continue to expand rapidly. Industry and services sector are expected to grow by 5.7% and 8.5% respectively in 2016-17. The CPI based inflation remains under control with a median forecast of 4.7% for 2016-17, with a minimum and maximum range of 3.8% and 5.1% respectively. Low inflation has been sustained due to low commodity prices. Current Account Deficit declined from about 1% of GDP last year to 0.3% of GDP in the first half of 2016-17. Foreign exchange reserves have reached 366.7 billion US Dollars.

Economy continued to recover strongly, benefiting from a large improvement in terms of trade, effective policy actions and stronger external buffers. Government remains committed in establishing incremental economic reforms and taken important policy actions toward the implementation of the goods and services tax, which will be positive for investment and growth. The challenges for the economy is to activate agricultural growth and rural demand, trade, future movements in the commodity prices, and private investment. However, the Government, RBI and other concerned agencies are undertaking suitable measures for facing the same.

As far as banking sector is concerned, profits and profitability was affected mainly by the deterioration in the asset quality that remains a serious cause of concern for the Bank and Capital Adequacy. Profitability is under pressure along with greater challenge in increasing the NIM. The Bank, among other things, continues to focus on decreasing the Cost of Deposit and improving the Return on Assets. Different measures with focus on product innovation, off-balance sheet activities to increase income from non-core activity, efficiency in service delivery process, effective risk management etc. and more importantly on customer satisfaction are being taken up to face the challenges.

WORKING RESULTS

TOTAL BUSINESS: During the year ended 31.03.2017, total Business of the Bank stood at Rs.145803 crore as compared to Rs.156527 crore as on 31.03.2016.

PROFIT: The Bank recorded a Net Profit of Rs.201.08 crore for the year 2016-17 as compared to that at Rs.335.97 crore during the FY 2015-16. The Return on Assets (ROA) stood at 0.20% as compared to that at 0.34% in the year 2015-16.

DIVIDEND: As the Bank does not conform to the eligibility criteria prescribed by RBI for declaration of dividend, the Board has not recommended any dividend for the year 2016-17.

CAPITAL & RESERVE: The Net Worth of the Bank stood at Rs.5046.39 crore as compared to Rs.5068.08 crore as on 31.03.2016. The Capital Adequacy Ratio (Basel III) of the Bank is 11.05% as on 31.03.2017 against the minimum stipulated requirement of 9.625%. UNSECURED REDEEMABLE BONDS: (Subordinated Debts for Tier -II Capital)

During the Year, Bank has redeemed Tier II Bonds of Rs.150.00 crore and has raised Rs.500.00 crore. Thereby, total outstanding of Tier II Bonds as on 31.03.2017 is Rs.1,675.00 crore.

DEPOSITS : The total deposits of the Bank stood at Rs.85540.16 crore as on 31.03.2017 as compared to Rs.91249.96 crore as on 31.03.2016. The average cost of deposits of the bank improved to 6.73% as compared to 7.47% in previous year.

ADVANCES: The Bank''s Advances stood at Rs.60263.09 crore as on 31.03.2017 as compared to Rs.65277.22 crore as on 31.03.16 The average yield on Advances stood at 9.73% as compared to 10.70% during the last year.

GOVERNMENT BUSINESS : The Bank continues to accord importance to the three Social Security/Pension Schemes launched by Government of India and 157951 enrollments under Pradhan Mantri Jeevan Jyoti Bima Yojna (PMJJBY), 850936 cases under Pradhan Mantri Suraksha Bima Yojana (PMSBY) and 40039 number of cases under Atal Pension Yojna (APY) were got enrolled by the Bank up to 31.03.2017.

Efforts were made to popularize / cross sell the facility of depositing Direct & Indirect taxes and approximately 100000 (One lac) challans were mobilized.

The performance of the Bank under different Govt. Small Saving Schemes continued to be good and about 5000 accounts as on 31.03.2017 were mobilized under Public Provident Fund (PPF), Senior Citizen Saving Scheme (SCSS) and Sukanya Samridhi Account (SSA) schemes.

ACHIEVEMENTS UNDER PRADHAN MANTRI JAN DHAN YOJNA

- The Bank has opened 11.72 lac accounts through branches and 351 Business Corresponds (BCs); and mobilized CASA/FD/RD deposit of Rs. 610.82 crore, with an average deposit of Rs.5211 per account.

- Total Business generated by BCs is Rs. 290 crore, which includes Recovery in 950 NPA/TWO accounts amounting to Rs. 3.82 crore.

- During the financial year 2016-17, the Bank received a sum of Rs. 21.46 lac as miscellaneous income for 3.07 lac Adhar enrollments done through M/s Matrix Processing House.

- The Bank has so far received subsidy amount of Rs. 42.45 lac for 283 Micro ATMs from UIDAI. Punjab & Sind Bank is one of few Public Sector Bank to receive such subsidy from UIDAI for Micro ATMs

- Total zero balance accounts in PMJDY are at 1.3 % against industry average of 23 % (lowest among all Banks).

- Total Aadhaar seeding in active PMJDY Accounts is 85%.

- 100% BCs of our RRBs and 91% BCs of our Bank are certified through Indian Institute of Banking & Finance (IIBF) (highest among all banks).

- The Bank in coordination with the Financial Literacy Centers (FLCs) took the initiative to spread financial literacy among rural population by conducting Financial Literacy Camps in the villages where Basic Banking services along with other financial schemes like PMJDY, PMJJBY, PMSBY, APY, OD etc are discussed with the villagers, so that they are able to avail these services as per their requirements. Total number of 418 Camps were organized in FY 2016-17 with the help of FLCs, Branch Managers & BCs.

- Our Micro ATMs are Adhar Enabled Payment System (AEPS) & Rupay PINPAD enabled, helping rural customers to do intra and inter Bank transactions using their biometrics or Rupay Debit Cards.

MARKETING AND INSURANCE

- Sovereign Gold Bond: Bank has participated in Sovereign Gold Bond Scheme of Govt of India, during 2016-2017, and performed consistently well to be among the top performers.

- ASBA: The ASBA facility was launched during the year, and a total of 93 Issues have since been handled.

- Gold Monetization Scheme (GMS): The Bank has tied up with MMTC PAMP for Gold Monetization Scheme of Govt. of India.

- Bancassurance business: Bank successfully completed the process for Corporate Agent Tie up with Life Insurance Companies, under which formal agreement with SBI Life Insurance Company has been executed.

NEW INITIATIVES

- The Bank launched "Priority Sector Credit Campaign- PSCC" from 15.12.2016 to 14.03.2017 to boost the Priority Sector Lending. An amount of Rs. 808.60 crore has been disbursed during the campaign.

- To boost investment credit in Agriculture Sector, the Bank has dispensed with the ceiling of minimum 12% rate of interest under two schemes namely PSB scheme of Financing Two Wheeler/ Jeep/ Car/ SUV to farmers and PSB Farm Mechanization Scheme

- The Bank has launched a scheme "P&SB Weaver''s MUDRA Scheme" for extending loans up to Rs.5.00 lac to handloom weavers to provide adequate and timely assistance to the weavers to meet their credit requirements i.e. for investments need as well as for working capital, in a flexible and cost effective manner.

- Under the Shishu category of Mudra loan (up to Rs. 50,000/-), margin has been reduced from 25% to 10% & Inspection charges have been waived.

- New functionalities developed in Internet Banking for customers :-

a) Cheque Stop facility;

b) Auto generation of password for retail customer;

c) RTGS facility;

d) Online Aadhar Seeding;

e) Online Registration for Pradhan MantriJeewanJyotiYojna / Pradhan MantriSurakshaBeemaYojna;

f) E-filing of ITR.

- The Bank has opened two new Zonal Offices at Ahmedabad and Noida for effective monitoring of the branch network. AWARDS & ACHIEVEMENTS

Federation of Industries Trade Services (FITS) has awarded the Bank, "FITS MSME Excellence Award" by Hon''ble Union Minister Sh. Kalraj Mishra for contribution in growth of MSME Segment.

The Bank has been awarded CIMSME Excellence Award 2016-17 for contribution to Micro Credit by Hon''be Union Minister of State for Finance and Corporate Affairs Sh. Arjun Ram Meghwal.

Bank''s Hockey Team won the following National Tournaments:

- All India S.N. Vohra Gurmit Hockey Tournament

- Senior National Hockey Championship (B Division)

PRIORITY SECTOR ADVANCES

- Total Priority Sector Advance increased from Rs.24508 crore as on 31.03.2016 to Rs.24928 crore as on 31.03.2017.

- The Bank''s Agriculture advance increased by Rs.190 crore to Rs.11355 crore as on 31.03.2017 from Rs.11165 crore as on 31.03.2016.

- The Bank''s advance to Small & Marginal Farmers increased to Rs.5656 crore which is 8.08% of March 2017 Adjusted Net Bank Credit (ANBC) against the RBI stipulated target of 8%

- The Bank made advance to the tune of Rs.691.27 crore against the target of Rs.900 crore under Pradhan Mantri Mudra Yojana which is 76.81% against the target of Rs.900 crore.

- The Bank has issued RuPay Debit Cards in 2.01 lac KCC accounts against the total operative KCC accounts of 2.02 lac (99.48 %) as on 31.03.2017.

- The Bank has opened another 4 Financial Literacy Centres (FLCs) at block level in Punjab thus raising total number of FLCs to 13 as on 31.03.2017.

- One of three Rural Self Employment Training Institute (RSETI) i.e. Faridkot were given highest grade ''AA'' by Ministry of Rural Development, Govt. of India, for the year ended 31.03.2016 making it eligible for Govt. grants for training of rural unemployed youth. The Bank spent Rs. 24,36,410/- to provide basic infrastructure such as Computer labs, Sewing & Embroidery machines, CCTV cameras, Air conditioner & Refrigerator, window curtains & fittings and for planting trees, shrubs & other green beautification at Rural Self Employment Training Institute (RSETI) Moga and Faridkot.

RETAIL LENDING

- The Bank has primarily focused on the growth of its Retail Lending portfolio during the FY and accordingly liberalized and rationalized its Retail Lending offerings to make them more attractive and competitive. Festival Bonanza Scheme offering attractive concessions under the Housing Loan, Auto Loan and Consumer Loan segments was launched.

- Retail Lending portfolio of the Bank as on 31.03.2017 stands at Rs.7296.51 crore and thereby, registered a business growth of 12.38% over the previous year.

- The percentage of Retail Advances to Gross Advances was 12.10% as on 31.03.2017.

ASSET QUALITY

The Bank continued to make concerted efforts to contain NPAs and has used all available tools of recovery including negotiated settlements & legal means and organized Recovery Camps at various centers.

The performance of the Bank under recovery of NPAs during the year remained reasonable. The aggressive and focused efforts could result in the total recovery of over Rs. 958.91 crore including recovery of Rs. 42.13 crore in Technically Written Off Accounts. Gross NPAs and Net NPAs as on 31.03.2017 stood at Rs 6297.59 crore and Rs.4375.08 crore respectively against Rs.4229.05 crore and Rs.2949.47 crore as on 31.03.2016.

The position of Gross and Net NPAs as on 31.03.2017 vis-a-vis previous year is as under

(Amount in Rs. crore

NPA

As on 31.03.2016

As on 31.03.2017

Gross

4229.05

6.48 %

6297.59

10.45%

Net

2949.47

4.62 %

4375.08

7.51%

The Provision Coverage Ratio of the Bank (including T.W.O.A/Cs), as on 31.03.2017 stood at 46.69 %.

CREDIT MONITORING

The Bank has setup Control Room at Head Office and Zonal Offices for effective monitoring of large accounts and to check fresh slippages. Restructuring of eligible cases is being undertaken as per Bank/RBI guidelines.

In order to supplement the aforesaid, various policy related initiatives have also been taken by the Bank which inter-alia include implementation of Framework for Revitalizing Distressed Assets in the Economy for Early Recognition of Financial Distress, Prompt steps for Resolution and Fair Recovery for lenders, guidelines on refinance by way of flexible structuring/takeout financing etc.

INVESTMENT & FOREIGN EXCHANGE

The Bank''s total gross investment as on 31.03.2017 was Rs28080.16 crore, with a portfolio composition consistent with the corporate requirement, risk perception, and investment policy of the Bank.

On account of active trading in G-sec and Non SLR securities, the trading profit has increased by 87% from Rs. 140.12 crore for year ended March 2016 to Rs. 261.97 crore for the year ended 31.03.2017. This year, Bank has put a step forward to add a new line of profit with initiation of secondary market trading in Non SLR Bonds. Besides this, well assessed participation in Equity Share IPOs has further strengthened and diversified the earning avenues.

The profit from foreign exchange business is Rs 38.99 crore in FY 2016-17.

RISK MANAGEMENT: The Bank has put in place a robust and integrated Risk Management system to ensure that the risks assumed by it are within the defined risk appetites and are adequately monitored

POLICY FRAMEWORK: The Bank has Board approved policies and procedures in place to measure, manage & control various risks that the Bank is exposed to. Following Risk Management policies are in place —Risk Management Policy, Asset-Liability Management (ALM) Policy, Credit Risk Management Policy, Market Risk Management Policy, Operational Risk Management (ORM) Policy, Business Continuity Planning (BCP) & Disaster Recovery Management (DRM) Policy, Stress Testing Policy, Policy on Utilization of Credit Risk Mitigation Techniques & Collateral Management, ICAAP Policy, Integrated Risk Management Policy, Policy on Management of Intra Group Transactions & Exposures and Loss Data Management Framework.

BANK''S COMPLIANCE WITH BASEL-II: In terms of Regulatory Guidelines of Reserve Bank of India, the Bank has adopted the New Capital Adequacy Framework w.e.f. 31.03.2009. Based on Basel II norms, the Bank has adopted Standardised Approach for Credit Risk, Modified Duration approach for Market Risk and Basic Indicator approach for Operational Risk for computing the capital charge. The Bank has also implemented Basel III Guidelines and has started computing CRAR w.e.f. June 2013. The Bank has geared for moving towards advanced approaches under BASEL II as suggested by RBI. A Consultant has been appointed for setting up Enterprise Wide Integrated Risk Management System (EIRMS) in the Bank for moving to Advance approaches of Basel II and implementation of Basel III Guidelines.

ICAAP POLICY: In compliance with Reserve Bank of India guidelines on Basel II & Basel-III, Pillar 2- Supervisory Review and Evaluation Process (SREP), the Internal Capital Adequacy Assessment Process (ICAAP) Policy has been formulated to assess the capital requirement commensurate with the size, level of complexity, risk profile and scope of operations of the Bank. Various residual risks are assessed and additional capital is provided for wherever required. The ICAAP outcome is prepared on half yearly basis and is reviewed by RMC.

DISCLOSURE: In compliance with the Reserve Bank of India guidelines on Basel II& Basel III - Pillar 3 - Market Discipline, the Bank has put in place a Disclosure Policy duly approved by the Board and the disclosures on quarterly / Half yearly / Annual basis, as per the policy, are displayed on the Bank''s Website / Annual Report.

CREDIT RISK: Credit Risk Management processes involve identification, measurement, monitoring and control of credit exposures. Credit risk and its policy formulation is managed by the Credit Risk Management Committee (CRMC). It regularly monitors prudential caps in different loan segments including industry, corporate, retail and individual/group borrowers. Comprehensive credit rating framework comprising of Credit Risk Rating Models for Corporate Exposure, NBFC Exposure, Real Estate Exposure and Retail Exposure , pricing of loans linked to risk assessment and credit rating, study & analysis of industries/portfolio, migration of credit ratings is undertaken.

MARKET RISK: The Bank''s portfolio is exposed to market risk on account of changes due to interest rates and currency rates. The Asset and Liabilities Management Committee (ALCO) is overseeing the functions relating to market risk. The Bank has put in place a variety of market risk measurement systems and tools. Strict adherence to various limits and proper escalation of breaches, if any, are followed. Moreover, a Mid Office is also in place.

The Liquidity Management Framework is well established, which safeguards the ability of the Bank to meet all payment obligations when they come due. It is designed to identify measure and manage the liquidity risk position of the Bank. The Bank is computing the market risk capital charge as per the Modified Duration approach, by using Modified duration method, as per the regulator''s guidelines. The Bank also calculates Value at Risk (VaR) on its foreign exchange portfolio.

OPERATIONAL RISK: The Operational Risk Management Committee (ORMC) oversees the matters relating to risks associated with operations and ensures the continuity / restoration of business in the event of contingency / exigencies. Presently, capital charge on operational risk is calculated as per Basic Indicator Approach. The Bank is in the process of strengthening its ORM Framework & ORM systems so as to be able to migrate to advance approaches of calculation of Operational Risk Capital. The Bank has Board approved Framework for Loss Data Management to set minimum standards for management of Bank''s Operational Loss Data in order to comply with the overall Operational Risk Management (ORM) Policy of the Bank and facilitate creation of a robust and comprehensive Operational Loss Database.

HUMAN RESOURCE MANAGEMENT

The cadre wise staff strength as on 31.03.2017 is as under:

Category

31st March 2016

31st March 2017

Officers

6632

6663

Clerks

2202

2241

Sub-staff

569

496

Total

9403

9400

Women in employment: Out of the total strength of 9400 as on 31.03.2017, the women employees are 2454 constituting 26.11% of the total strength.

Women Empowerment: The Bank has taken specific steps to empower its women employees and to plan their career growth. HO HRD Women Cell at Head Office looks after feedback/ suggestions, requests and complaints/grievances, received from women staff of the Bank for quick disposal and Welfare of all Women Staff Members of the Bank. Women''s Week was also celebrated in the Bank. The Bank has implemented Sabbatical Leave Scheme for all permanent full time Women employees for maximum of 2 years during their entire career.

Promotions: The Bank is regularly promoting its employees almost in all cadres year after year to keep on rewarding the top performers and make them assume higher responsibilities.

Training & Human Resources Development:

The newly recruited Probationary Officers were provided training under different fields such as Orientation Programme, Training on Advances at Branch Level, Training Programme on Credit Management, Credit Appraisal, NPA Management & Recovery of NPAs. Single Window Operators (SWO) were also imparted Induction Training.

To encourage staff members to upgrade their professional skills, the Bank has incentivized re-imbursement of the full course fee of 21 Certificate and Diploma Courses offered by IIBF. The Bank has also tied up with IIBF for e-learning material for JAIIB & CAIIB which has been placed on the Bank''s intranet under the head "HRD Initiative: E-Learning"

In view of MoF guidelines, the Bank regularly conducts Webinars to reach out to all the staff members working in the branches/ offices at the same time to train them in a short span.

Staff Training College, Rohini, Delhi : Bank''s New Staff Training College situated at Rohini, Delhi was inaugurated by Chairman & Managing Director on 06/02/2017.

The Bank has engaged a Chief Customer Service Officer (Internal Ombudsman) in view of the recommendations of the Committee on Customer Service in the Banks (Damodaran Committee) in order to strengthen the Grievance Redressal Mechanism available for the Bank customers.

Industrial Relations: The Industrial relations in the Bank remained cordial throughout the year. A Grievance Redressal Committee has been constituted as per the guidelines received from Ministry of Finance to redress the grievances raised by the staff members. The Bank opened a Holiday Home facility at Mumbai.

Employment to Reserved Category Employees: The Bank is committed to the constitutional safeguards and social objectives for the development and welfare of persons belonging to SC, ST and Other Backward Classes of the society.

A special SC/ST cell has been set up in the Bank to monitor reservation & other provisions for SC/ST employees. A General Manager has been designated as Chief Liaison Officer for SC/ST employees who ensures compliance of various guidelines pertaining to SC/ ST employees and takes care of all matters of grievance redressal of SC/ST employees of the Bank.

The staff strength on 31.03.2017 under various reserved categories is as under:-

CATEGORY

SC

ST

OBC

EX-SM

PWD

OFFICERS

1057

474

1185

54

100

CLERKS

496

70

460

153

38

SUB-STAFF

182

23

29

92

11

TOTAL

1735

567

1674

299

149

Compassionate appointments and financial assistance to the dependents of Deceased Employees:

The Bank is having a scheme for appointment on compassionate grounds or payment of ex-gratia amount in lieu of compassionate appointment to eligible family of the deceased employee who dies while in service.

Staff Welfare: In order to motivate and encourage the staff for effective participation in development activities, the Welfare Trust of Employees is maintaining various welfare schemes for the staff. During the financial year 2016-17, welfare schemes of the Bank were successfully implemented.

INFORMATION TECHNOLOGY

- As on 31.03.2017, all 1500 branches are on Core Banking Solution with RTGS/NEFT facility.

- Users in Internet Banking/Mobile Banking have increased by 50% during FY 2016-17.

- The revenue collection of Financial Year 2016-17(Bill Aggregators) is Rs.5.78 Lac (Approx).

- The Bank has installed 30 new ATMs during the Year 2016-17. Total number of ATMs of the Bank as on 31.03.2017 is 1253.

- All new cards are being issued as EMV Chip Cards.

- Hot listing of debit cards through SMS has since been implemented

- The Bank had migrated existing ATM interface to Rupay Interface

- Sukanya Samrithi Yojna(SSY) has been implemented in the Bank.

- Auto renewal of FDRs with maturity value of <1 Crore has been implemented in the Bank.

- Pradhan Mantri Garib KalyanYojna (PMGKY) has been implemented in the Bank.

- The Bank has implemented Customer satisfaction feedback

- Missed Call inquiry facility has been provided to the customers of the Bank.

- UPI/ POS/ Aadhar-Pay/ Bharat-QR are in pipeline and shall be implemented shortly.

- RBI guidelines on demonetization were strictly followed and implemented including re-caliberation of ATMs in the Bank. . INTERNAL CONTROLS

The Bank has in-built control systems with well-defined responsibilities at each level. It conducts internal audit through Inspection & Audit Department. Audit Committee of Executives, being first tier Committees oversees the Inspection & Audit function.

The Bank carries out audits-like Risk Based Internal Audit (RBIA), Concurrent Audit (CCA), Information System Audit, Management Audit & Inspection (MAI) and Credit Audit through which different facets of Internal Audit requirements are covered. The Bank''s business units/offices are subjected to RBIA, CCA & IS Audit and Bank''s Management Audit & Inspection covers Zonal Offices & other Administrative Offices and examines policies and procedures, besides quality of execution thereof and credit exposures of Rs. 3.00 crore & above are subjected to Credit Audit by external Auditors.

Inspection & Audit Department is monitoring redressal of public grievances/complaints. During FY 2016-17, 4437 complaints were received of which 86 complaints are in process for redressal.

COMPLIANCE FUNCTION: Compliance Department disseminates the regulatory guidelines to respective business departments and ensures its compliance.

During the FY 2016-17, Compliance Department ensured migration from CAMELS framework to RBS supervisory framework as per RBI directives.

PUBLIC RELATION AND PUBLICITY

During the financial year 2016-17, the Bank adopted a multi-media strategy to build up its image in public at corporate level and accordingly publicity was made through the print media by release of its products, tenders, financial and other display/notice advertisements in different newspapers, magazines and souvenirs targeting various audiences all over the country. The Bank received immense publicity through Bank''s traditional Wall Calendar 2017 which was widely distributed.

VIGILANCE

PREVENTIVE VIGILANCE

With the aim to sensitize /enrich the knowledge of Vigilance Administration in the Senior functionaries of Banks, One Day Workshop on "Vigilance Administration & Preventive Vigilance" for the Senior Functionaries of Five Banks was organized at Administrative Staff College of India, Banjara Hills, Hyderabad on 05.08.2016. Hon''ble Shri K.V Chowdary, Central Vigilance Commissioner inaugurated the programme being the Chief Guest of Honour.

On this occasion the Hon''ble Commissioner CVC also released Bank''s Periodical " PSB Vigil " (2nd Volume). More than 100 Senior Functionaries of 5 Banks viz Punjab & Sind Bank, Central Bank of India, Andhra Bank, State Bank of Hyderabad and Bhartiya Mahila Bank, actively participated in the programme.

The Bank observed Vigilance Awareness Week with the central theme ^Participation in Promoting Integrity and Eradicating Corruption^ in true spirit. During the course of observance of Vigilance Awareness Week 2016, the Bank organized different programmes at different centres across the country and the main function was organized at New Delhi on 3rd November 2016. Ms Nilam Sawhney, IAS, Secretary, Central Vigilance Commission, being Chief Guest graced the occasion and addressed the gathering of more than 200 participants, mainly consisting of citizens representing different sections of the society and senior functionaries of the Bank. Shri Jatinderbir Singh, IAS, CMD along with Ms Nilam Sawhney, IAS, Secretary, CVC inaugurated the programme, being the Guest of Honour. During the programme Vigilance News Letter ffl DOs & DONTs ffl was also released. Besides, different programmes were also organized at the Bank level across the country at Gram Sabhas / schools and colleges which were attended by more than 68000 participants.

This year the Hon''ble Commission introduced E-Pledge (Integrity Pledge) activity to create greater awareness and participation of public at large. In this respect, staff members / customers of the Bank were encouraged to have E-Pledge through hyper link provided on Bank''s web site, which resulted in participation of more than 10000 people and availed E-Pledge facility across the nation.

DEMONITSIATION DRIVE

During the Demonetization period i.e. from 9th November, 2016 to 30th December, 2016, Vigilance Officials played a key role in follow up and monitoring with the concerned Department and the Controllers that guidelines issued by the Govt. / RBI from time to time in respect of Demonetization drive are being followed in the Bank in true spirit. The Vigilance Department took up the matter with the respective Controllers and Management to ensure that wherever there were serious irregularities; the same have been dealt with suitably and firmly.

PUNITIVE VIGILANCE

With the active involvement of all the Disciplinary Authorities (DAs) / Controllers and proper coordination with the Hon''ble CVC / other Govt. Agencies, pending vigilance (RDA) matters / complaints etc. were brought down to bare minimum level which is evident from following table:

2013 - 14

2014 - 15

2015 - 16

2016 - 17

Vigilance (RDA) Cases pending

75

70

58

49

Pending CVC referred Complaints

02

01

00

00

Charge Sheet issued

102

63

56

53

No. of officials in the Agreed List

53

23

20

18

No. of officials in the ODI List

135

120

98

81

SECURITY: The Bank has a well established Security set-up within the Bank''s organizational structure. All essential and mandatory security arrangements in terms of RBI/ IBA guidelines are provided at almost all branches.

Security Alarm Systems are installed at all branches and currency chests. Strong Room conforming to RBI specification are provided at majority of branches. CCTV Surveillance System has been installed at all Currency chests.

IMPLEMENTATION OF INDIAN ACCOUNTING STANDARD (Ind AS): RBI vide circular dated February 11, 2016 had advised scheduled commercial banks (except RRBs) to follow the Indian Accounting Standards as notified under the Companies (Indian Accounting Standards) Rules, 2015, subject to any guideline or direction issued by the RBI.

Scheduled commercial banks are required to comply with Ind AS for financial statements for accounting periods beginning from April 1, 2018 onwards, with comparatives for the period ending March 31, 2018.

In compliance with the regulatory requirements, the Bank has constituted a Steering Committee headed by Executive Director to oversee the implementation of Ind AS. The scope of the Steering Committee includes evaluating the impact on the following areas:

(a) Ind AS technical requirements

(b) Systems and processes

(c) Business impact

(d) People

(e) Project management

The Audit Committee of Board will oversee the progress of implementation of Ind AS and update to the Board on a quarterly basis. As a part of the Ind AS implementation plan, the bank is currently in the process of completion of diagnostic analysis of differences between the current accounting framework and Ind AS. The Bank is also in the process of preparation of proforma financial statements for the six months ended 30 September 2016 to be submitted to RBI."

IMPLEMENTATION OF OFFICIAL LANGUAGE : 2016-17 was the year of achievements in the area of implementation of Official Language. On the one hand, Bank''s Hindi Magazine ''RAJBHASHA ANKUR'' was awarded 1st Prize continuously for the second year by Delhi Bank Town Official Language Implementation Committee (TOLIC) and on the other hand, the Magazine was awarded All India Level "Rajbhasha Shield" from Reserve Bank of India on 24th of May 2016. During the year, Delhi Bank TOLIC also awarded Punjab & Sind Bank with 16 Prizes which is a new record. Besides this, Bank was awarded Rajbhasha Shields in Ludhiana, Bhatinda, Delhi, Patna, Bengluru, Chennai, Jodhpur, Guwahati and Panjim (Goa) by respective TOLICs for better Implementation of Official Language in banking sector.

Bank launched ''RAJBHASHA PORTAL'' during the year. Portal will help in submitting online Quarterly Progress Report and will facilitate viewing of the Bank magazine, E- magazines & official language related other information / activities.

A remarkable achievement of this year was that our Bank has constituted a TOLIC for the first time under Ministry of Home Affairs, Govt. of India. On 10.03.2017 in the city of Faridkot, our Bank presided over the committee of Central Government offices, banks/undertakings etc. The innovative step such as publishing the writings in Regional Languages has been given importance in the Magazine which is richly complemented by banking industry. So far, stories/articles in Odiya, Bengali, Santhali, Punjabi, Tamil and Marathi languages have been published with their Hindi versions.

SPORTS

The Bank has a Sports Academy which nurtures Bank''s Hockey Team at National Level, besides Hockey Academy for age group of 15-18 years.

Following players of the Bank''s Hockey Team have represented the Country:

Sh. Ramandeep Singh

Sh. Harbir Singh

Sh. Satbir Singh

Sh. Prabdeep Singh

Sh. Harjot Singh

Shri Ramandeep Singh has represented Indian Hockey Team in Rio Olympic in August 2016.

9 players represented Indian Premier League 2017 from different teams, which was organized by Hockey India. Out of these, five players namely Sh. Simranjeet Singh, Sh. Vikramjit Singh, Sh. Parvinder Singh, Sh. Gurinder Singh and Sh. Santa Singh also represented Junior World Cup Hockey Tournamant held at Lucknow and Indian Team won GOLD MEDAL in the tournament.

Sh. Baljeet Singh Saini was appointed as Coach of Indian Junior Women Hockey Team for the year 2016-17 and Coach of Delhi Wave Riders Team for Indian Premier League.

The Bank has recruited eight hockey players during the year to strengthen its hockey team. The Bank has also enrolled 22 Hockey players for Bank''s Junior Hockey Academy under Scholarship Scheme.

GENERAL ADMINISTRATION: The Bank is undertaking construction works/projects on its owned premises and is also involved in the procurement of assigned Goods/Services. Construction of Staff Training College (STC) at Rohini, Delhi has been completed and STC was inaugurated on 06.02.2017. Bank''s Corporate house and residential flats at East Kidwai Nagar, New Delhi are likely to be completed in FY 2017-18.

CONSTITUTION OF BOARD OF DIRECTORS

As on 31st March 2017, the Board comprised of three Whole Time Directors viz Chairman & Managing Director and two Executive Directors besides five other Directors including representatives from Ministry of Finance, Reserve Bank of India, two Share Holder Directors and one Part Time Non Official Director.

The constitution of Bank''s Board of Directors underwent following changes during the year 2016-17:

INCLUSIONS

- Sh. Fareed Ahmed was appointed as Executive Director of the Bank vide Government of India, Ministry of Finance, Department of Financial Services, New Delhi Notification No. F.No. 4/5/(6) 2016-BO.I dated 16.02.2017.

CESSATIONS

- Sh. Sanjay Verma completed his term as Non Official Director on 11.08.2016

- Smt. Anita Karnavar completed her term as Non Official Director on 29.01.2017

- Sh. A K Jain completed his term as Executive Director of the Bank on 31.01.2017, i.e., the last day of the month in which he attained the age of superannuation.

CORPORATE GOVERNANCE

The Bank is committed to good Corporate Governance and is constantly striving to further strengthen the same to ensure greater transparency and better coordination at all levels in the Organization. The working of the Bank reflects transparent ownership structure, improved risk management practices, well defined delegation of powers, accountability and an elaborate audit function carried out by both its Inspection & Audit Division and by independent Statutory Central Auditors.

The Bank has complied with the guidelines of RBI and SEBI on the matters relating to Corporate Governance which have been examined by the Statutory Central Auditors.

DIRECTORS'' RESPONSIBILITY STATEMENTS

The Directors confirm that in preparation of the Annual Accounts for the year ended 31st March, 2017:

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

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

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

- 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.

STAUTORY AUDIT : As approved by Reserve Bank of India, the Bank has appointed M/s Dhillon & Associates, Chandigarh; M/s Tiwari & Associates, New Delhi; M/s Dhawan & Co., New Delhi and M/s Davinder Pal Singh & Co., Hoshiarpur as Statutory Central Auditors for the accounting year ended March 2017.

ACKNOWLEDGEMENTS

The Board of Directors of the Bank thanks valued customers, shareholders, well-wishers and correspondents of the Bank in India and abroad for their goodwill, patronage and continued support.

The Directors also acknowledge with gratitude the valuable and timely advice, guidance and support received from Government of India, Reserve Bank of India, Securities and Exchange Board of India (SEBI), Stock Exchanges of various State Governments, Financial Institutions and the Statutory Central Auditors of the Bank in the functioning of the Bank.

The Directors place on record their deep appreciation for the valuable contribution of the members of the staff at all levels for the progress of the Bank during the year and look forward to their continued co-operation in realization of the corporate goals in years ahead.

For and on behalf of Board of Directors

Place: New Delhi Jatinderbir Singh

Date: 16 May, 2017 Chairman & Managing Director


Mar 31, 2016

The Board of Directors has pleasure in presenting the Annual Report of the Bank along with the Balance Sheet & Profit and Loss Account for the year ended 31st March, 2016.

The Banking sector in India is growing, so is our Bank. However, there are some major issues before us. Assets quality remain a serious cause of concern for the Bank and Capital Adequacy, Profitability is under pressure along with greater challenge in increasing the NIM, decreasing the Cost of Deposit and improving the Return on Assets. Different measures at different levels are being taken up to face the challenges.

WORKING RESULTS TOTAL BUSINESS

During the year ended 31.03.2016, total Business of the Bank recorded an increase of 3.31% at Rs.156527 crore as compared to Rs.151511 crore as on 31.03.2015.

PROFIT

The Bank recorded a Net Profit of Rs.335.97 crore for the year 2015-16 as compared to that at Rs.121.35 crore during the FY 2014-15. The Return on Assets (ROA) stood at 0.34% as compared to that at 0.13% in the year 2014-15.

HIGHLIGHTS OF RESULTS FOR THE YEAR ENDED 31ST MARCH 2016

(Rs. in Lac)

Year Ended %age change 31.03.2016 31.03.2015

Interest Income 874434 858855 1.81

Other Income 47848 42875 11.60

Total Income 922282 901730 2.28

Total Expenditure 795293 824185 -3.51

Operating profit 126989 77545 63.76

Net Profit 33597 12135 176.86

ROA 0.34% 0.13%

Net Interest Margin (NIM) 2.22% 1.80%

Gross NPA 6.48% 4.76%

Net NPA 4.62% 3.55%

Capital Adequacy Ratio (Basel II) 11.75% 11.88%

Capital Adequacy Ratio (Basel III) 10.91% 11.24%

EPS (Rs.) 8.39 3.59

CAPITAL & RESERVE

The Net Worth of the Bank has improved from Rs.4811.56 crore as on 31.03.2015 to Rs.5068.08 crore as on 31.03.2016. The Capital Adequacy Ratio (Basel III) of the Bank is 10.91% as on 31.03.2016 against the minimum stipulated requirement of 9.625%.

UNSECURED REDEEMABLE BONDS: (Subordinated Debts for Tier -II Capital)

Total outstanding of Tier II Bonds as on 31.03.2016 remains unchanged at Rs.1,325 crore.

DEPOSIT GROWTH

The total deposit of the Bank registered a growth of 5.23% with net accretion of Rs. 4535.24 crore to reach Rs. 91249.96 crore as on March 31, 2016 from Rs. 86714.72 crore as on March 31, 2015. The average cost of deposits of the bank stood at 7.47% as compared to 8.21% in previous year.

ADVANCES

The Bank''s Advances increased by 0.74% from Rs. 64796.42 crore as on 31.03.2015 to Rs. 65277.22 crore as on 31.03.2016. The average yield on advances stood at 10.70% as on 31.03.2016 compared to 11.12% during the last year.

PRIORITY SECTOR ADVANCES

The Bank continues to accord importance to various goals under national priority. Some of the highlights under Priority Sectors Advances are as under:

- Total Priority Sector Advance increased to Rs. 24508 crore as on 31.03.2016 from Rs. 20234 crore as on 31.03.2015 registering a growth of Rs. 4274 crore (21.12%).

- Total Priority Sector advance increased from 34.55% of ANBC to 36.86% of ANBC on Y-o-Y basis as on 31.03.2016, an increase of 2.31%.

Bank''s Agriculture advance increased by Rs. 2101 crore (23.18%) to Rs. 11165 crore as on 31.03.2016 from Rs. 9064 crore as on 31.03.2015.

- Bank''s advance to Small & Marginal Farmers increased to Rs. 4663 crore which is 7.01% of total advance against the RBI stipulated target of 7.0%.

- Bank''s flow of credit to agriculture for FY 2015-16 was to the tune of Rs. 10012 crore against the target of Rs. 9056 crore (110.56%) registering an Y-o-Y growth of 15.69%.

- The Bank has issued RuPay Debit Cards in 1.84 lac KCC accounts against the total operative KCC accounts of 1.91 lac (94.02%) as on 31.03.2016.

- The Bank has opened another 6 FLCs at block level in Punjab thus raising total number of FLCs to 12 as on 31.03.2016.

- Two of three RSETI i.e. Moga and Faridkot were given highest grade ''AA'' by Ministry of Rural Development for the year ended 31.03.2015 making them eligible for Govt grants for training of rural unemployed youth.

- E-book on Priority Sector guidelines prepared and put on Bank''s website.

- A comprehensive Booklet on documentation and appraisal of MSE loan prepared and put on Bank''s website.

- The Bank has also achieved sub target for lending to Minority Community.

CREDIT MONITORING

The Bank had setup a Control Room for proper and effective monitoring of large accounts and to check fresh slippages, with exposures above Rs. 50 lacs at HO level. To further strengthen the monitoring, separate Control Rooms have now been set up at Zonal Offices level to monitor all standard borrowal accounts from Rs.5.00 lac upto Rs. 50.00 lac. Restructuring of eligible cases are being undertaken as per Bank/RBI guidelines.

In order to supplement the aforesaid, various policy related initiatives have also been taken by the Bank which inter-alia include implementation of Framework for Revitalizing Distressed Assets in the Economy for Early Recognition of Financial Distress, Prompt Steps for Resolution and Fair Recovery for lenders, guidelines on refinance by way of flexible structuring/take out financing, Classification and reporting of borrower as non-cooperative borrower etc.

COMPLIANCE FUNCTION

Full-fedged Compliance Department is working since 01/10/2009. A comprehensive Compliance-policy is in place. Compliance Manuals of various HO Departments were drafted/updated during the year.

As per RBI guidelines a New Audit format based on Risk Based Supervision for Zonal Offices was introduced during the year duly approved by GMs committee. A short term and long term action plan was approved by the Board for strengthening of Bank''s Compliance functions on the basis of check list sent by IBA. The short term plan has been implemented by Compliance Dept. Consequent to AFI observations RBS cell was merged with Compliance Department. RBI has intimated that our Bank will be migrated from CAMELS supervision to RBS supervision from the supervisory cycle of 2016-2017. For implementation of migration, Bank has submitted Board approved action plan to the RBI.

The Bank has followed various guidelines issued by RBI in its Circular dated April 20, 2007 on Compliance Functions in Bank and other guidelines issued on Compliance Functions. During the year Compliance Department has ensured that Statutory/Regulatory and other mandatory information required by the Regulator/GOI or any other Authority, has been sent. The compliance department also pursued HO Departments for timely submission of returns to RBI/SEBI/MOF. Gists of all RBI circulars and Internal guidelines, issued during the FY 2015-16, were prepared on monthly basis and were placed on the intranet site of the Bank for reference of the staff.

It was also ensured that the functioning of Branches, Zonal Offices and HO Departments is synchronized with their Functional Manuals. This functioning has been regularly checked through Annual Compliance Audits and random cross-checking of some of the branches at regular intervals.

PUBLIC RELATION AND PUBLICITY

During the financial year 2015-16, the Bank adopted a multi-media strategy to build up its image in Public and at the corporate level and accordingly publicity was made through the print media by release of its product, tender, financial and other display/ notice ads in different newspapers, magazines and souvenirs targeting various audiences all over the country.

Bank also used outdoor publicity tools i.e. Sponsorship and Display of Banners & Hoardings on events of high publicity value e.g. Surjit Hocket Tournament, Jawahar Lal Nehru Hockey Tournament, Gala Baisakhi Evening organized by World Punjabi Organization and corporate publicity through hoardings at Amritsar Airport facilitated extension of outreach of the Bank. Bank also received immense publicity through the Bank''s Wall Calendar 2016 which was widely distributed among clients and well wishers of the Bank.

Bank got huge publicity by way of coverage of its press releases by the print media. All these activities facilitated the Bank to rededicate itself to the service of the nation and enabled it to earn a well deserved mileage on the publicity front.

VIGILANCE PREVENTIVE VIGILANCE

As a measure of preventive vigilance and also to sensitze the staff towards a corruption free environment, the Bank organized two days workshop/ training on Vigilance Administration & Disciplinary Proceedings The programme was inaugurated by Shri. Vijay Kumar Dev, IAS, Advisor to the Commissioner, Chandigarh. Shri. R.N Nayak, Director and Shri. Rajesh Verma, Advisor from Hon''ble CVC had also valuable sessions on various aspects.

During "Vigilance Awareness Week", the Bank organized its main function at India International Centre, New Delhi on 26th October, 2015. Sh T M Bhasin, Vigilance Commissioner, Central Vigilance Commission, being Chief Guest graced the occasion and addressed the gathering of students from School /College/Institute and Senior Functionaries of the Bank. A quarterly newsletter namely PSB- Vigil was brought out during this function for the first time. Thereafter, during the week 20 other programmes were also organized in different Schools / Colleges / Institutions in Delhi and one of the programme was presided by Sh J Vinod Kumar, OSD, Central Vigilance Commission. On the occasion, various programmes were organized at the Bank level across the country at 162 schools where 17235 students participated.

In line with this year''s theme observing Vigilance Awareness Week by Hon''ble CVC "Preventive Vigilance as a tool of good governance" and on the basis of information received from various sources / quarters regarding Revenue Leakage in Big Borrowal Accounts, a special drive under the name "Mission Compliance" i.e. checking of the compliance of terms and conditions of sanction in big borrowal accounts by Vigilance Officers on sample basis.

PUNITIVE VIGILANCE

Special thrust was given, to bring down the pendency of disciplinary action cases. In respect of enquiries for more than 6 months old, endeavor was not only to bring down the number of enquiries not only to a single digit but to a minimum possible level and as a result NIL pendency was achieved. The comparative position of such cases is given below:

2012-13 2013-14 2014-15 2015-16

Pending inquiries more than 6 months old 03 07 01 00

Constant monitoring at all levels has yielded positive result as pendency of complaints especially received from CVC / DFS / CBI, has reduced to bare minimum/NIL, as is evident from the data / table given below:

31.03.13 31.03.14 31.03.15 31.03.16

Pending CVC referred Complaints 02 02 01 00

With focus on preventive vigilance and as a result of preventive vigilance measures / awareness efforts amongst the staff members across the organization, the number of issuance of Charge Sheet and number of Vigilance Cases has declined over the period which is evident from the below:

2012 - 13 2013 - 14 2014 - 15 2015 - 16

Vigilance Cases pending 133 75 70 58

Charge Sheet issued 151 102 63 56

With constant monitoring and emphasis on strengthening the internal control mechanism in the Bank, there is considerable decline in fraud, as is evident from table below.

2013-14 2014-15 2015-16

Number of Fresh Frauds Reported during the Financial Year 35 31 12

Total Number of Frauds cumulative over the years 450 446 442

SECURITY

The Bank has a well established Security set-up within the Bank''s organizational structure. The Bank has been regularly reviewing the security arrangements at all Currency Chests and branches and accordingly strengthening the security arrangements to meet prevailing security scenario with effective, modern and unobstructed Security Systems. All the essential and mandatory security arrangements in terms of RBI/ IBA guidelines are provided at almost all branches.

Security Alarm Systems are installed at all branches and currency chests. Strong Room conforming to RBI specification are provided at majority of branches.

Training, including fringe practice, for Armed Guards deployed at currency chests / branches is imparted on an annual basis. Also, all the security officers undergo refresher training on security once in a year.

Keeping in view the threat perception, volume of cash and valuables handled and need for continuous surveillance, CCTV Surveillance System has been installed at all the Currency chest branches and 738 identified High Risk and vulnerable branches in the first phase. CCTV systems shall be installed at remaining branches at the earliest.

IMPLEMENTATION OF OFFICIAL LANGUAGE

Year 2015-16 was the year of achievements in Official Language implementation. Ministry of Finance, Department of Financial Services awarded our Bank with Two Letters of Appreciation for publishing Tri-Language Glossary (English, Hindi & Punjabi) and for promoting Regional Languages.

Some new and innovative experiments were made in Bank''s Magazine "Rajbhasha Ankur". Besides Hindi, the Bank has encouraged Regional Languages in the magazine and this initiative has been richly complemented in banking industry. So far, material in Odiya, Bengali, Santhali and Assamese languages have been published with their Hindi versions. The Bank also had a unique initiative for its executives. "Aaj ka Shabd" and a line on Rajbhasha is being sent to all executives via SMS.

During the financial year 2015-16, the Bank made significant progress in implementation of official language Policy of Govt. of India for promoting and propagating the use of Official Language in the Bank. A total of 60 workshops were organized, in which 847 staff members were trained. Besides this, in 672 Hindi Desk Training Programmes, 2938 staff members were imparted training for using official language and Unicode training on Computers. With the aim of reviewing the progress of Official Language, inspections were conducted in 732 Branches / offices. As per directions of MOF, Department of Financial Services "Mastshk - Manthan" Programmes were organized in 968 offices / branches of the Bank.

SPORTS

The following players of the Bank''s Hockey Team have represented the Country:

Sh. Ramandeep Singh Sh. Harbir Singh Sh. Satbir Singh

Sh. Prabdeep Singh Sh. Harjot Singh

6 players represented Indian Premier League 2016 from different teams, which was organized by Hockey India with the sponsorship of HERO Group.

Sh. Sarvanjit Singh, Sh. Guriqbal Singh, Sh. Gautampal Singh, Sh. Vikramjit Singh represented Punjab state in National Games held at Kerala 2015.

Sh. Baljit Singh Saini (Olympian) was appointed as Coach of Indian Women Hockey Team for 2015-16.

Sh. Sanjeev Kumar (Olympian) was the Chief Coach of Punjab State Hockey team for National Games 2015 held at Kerala.

GENERAL ADMINISTRATION

The Bank is undertaking construction works/projects on its owned premises and is also involved in the procurement of assigned Goods/Services. Projects viz. Construction of Bank building at Gurgaon, Fort Mumbai and Noida have been completed and the offices/branches are functional in the said premises. The remaining projects are in their completion stages and the construction of Bank buildings at Rohini and Ranjit Nagar are likely to be completed in FY 2016-17.

CONSTITUTION OF BOARD OF DIRECTORS

As on 31st March 2016, the Board comprised of three Whole Time Directors viz Chairman & Managing Director and two Executive Directors besides seven other Directors including representatives from Ministry of Finance, Reserve Bank of India, two Share Holder Directors and three Part Time Non Official Directors.

Various Committees constituted under the Board as listed below, oversee the functioning and control the affairs of the Bank:

- Management Committee

- Audit Committee

- Risk Management Committee

- Committee for Monitoring of Large Value Frauds

- Vigilance Committee

- Customer Service Committee

- Stakeholders Relationship Committee

- IT Strategy Committee

- HR Committee

- Committee of Board on Appellate/Reviewing Authority

- Remuneration Committee

- Committee of Board on Executives'' Promotion

- Committee for Monitoring of Recovery

- Election of Shareholders Director Committee voting by Public Sector Bank

During the year 2015-16, nine meetings of the Board of Directors, eleven meetings of the Management Committee and seven meetings of the Audit Committee of the Board were held, besides meetings of other Committees of the Board.

The constitution of Bank''s Board of Directors underwent following changes during the year 2015-16:

INCLUSIONS

- Sh. A. K. Jain was appointed as Executive Director of the Bank vide Government of India, Ministry of Finance, Department of Financial Services, New Delhi Notification No. F.No. 4/5/2013-BO-I dated 15.12.2015.

- Sh. Atanu Sen was nominated as Part Time Non Official Director of the Bank vide Government of India, Ministry of Finance, Department of Financial Services, New Delhi Notification No.F.No. 6/24/2015-BO-I dated 28.01.2016.

CESSATIONS

- Sh. Mahesh Kumar Gupta completed his term as CA Category Director on 29.01.2016

CORPORATE GOVERNANCE

The Bank is committed to good Corporate Governance and is constantly striving to further strengthen the same to ensure greater transparency and better coordination at all levels in the Organizaton. The working of the Bank reflects transparent ownership structure, improved risk management practices, well defined delegation of powers, accountability and an elaborate audit function carried out by both its Inspection & Audit Division and by independent Statutory Central Auditors.

Bank has complied with the guidelines of RBI and SEBI on the maters relating to Corporate Governance which have been examined by the Statutory Central Auditors.

DIRECTORS'' RESPONSIBILITY STATEMENTS

The Directors confirm that in the preparation of the Annual Accounts for the year ended 31st March, 2016:

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

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

- Reasonable and prudent judgment and estimates were made so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the Profit of the bank for the year ended on 31st March, 2016.

- 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.

STAUTORY AUDIT

As approved by Reserve Bank of India, Bank has appointed M/s Dhillon & Associates, Chandigarh; M/s Tiwari & Associates, New Delhi; M/s Dhawan & Co., New Delhi and M/s Davinder Pal Singh & Co., Hoshiarpur as Statutory Central Auditors for the accounting year ended March 2016.

ACKNOWLEDGEMENTS

The Board of Directors of the Bank thanks valued customers, shareholders, well-wishers and correspondents of the Bank in India and abroad for their goodwill, patronage and continued support.

The Directors also acknowledge with gratitude the valuable and timely advice, guidance and support received from Government of India, Reserve Bank of India, Securities and Exchange Board of India (SEBI), Stock Exchanges of various State Governments, Financial Institutions and the Statutory Central Auditors of the Bank in the functioning of the Bank.

The Directors place on record their deep appreciation for the valuable contribution of the members of the staff at all levels for the progress of the Bank during the year and look forward to their continued co-operation in realization of the Corporate goals in years ahead.

For and on behalf of Board of Directors

Place: New Delhi Jatnderbir Singh

Date: 10 May, 2016 Chairman & Managing Director


Mar 31, 2015

Dear Members,

The Board of Directors have pleasure in presenting Annual Report of the Bank along with the Balance Sheet & Profit and Loss Account for the year ended 31st March, 2015.

ECONOMIC OUTLOOK

The country''s total population, as recorded in Census 2011, at 1.21 billion, is slightly more than what was forecast. But the population growth rate has decelerated from 1.97 per cent per annum between1991 and 2001, to 1.64 per cent per annum between 2001 and 2011. Reserve Bank of India estimates that the trend/potential growth rate of the Indian economy, which averaged around 5.3 per cent during 2011-12 to 2013-14, dipped gradually thereafter and presently stands at about 4.7 per cent.

Looking at our growth history and our performance vis-a-vis the rest of the World, we can definitely say that the Indian economy has the potential to grow at 9 per cent and above. Therefore, we are currently growing below our potential and closing this negative output gap (i.e., actual growth minus potential growth) should be our highest priority. The next priority would be to raise the potential growth path. However, there are some fundamental problems facing our economy and Government, RBI and other concerned agencies undertaking corrective measures.

The median forecast for fiscal deficit as a percent of GDP for 2014-15 was put at 4.4%, with an indicative range of 4.1% to 5.5%. This is slightly higher than the 4.1% estimate announced recently in the interim budget. The possibility of subsidy bill overshooting leading to a fiscal slippage remains real.

However, the State of economy has improved with decline in inflation by over 6% points since late 2013 and downfalls of current account deficit from a peak of 6.7% of GDP (in Q3 2013) to an estimated 1% in 2014-15.Foreign portfolio flows have stabilized the rupee and with the Government, RBI and other concerned agencies undertaking number of measures real GDP has been growing at 7.2% since 2013-14 after a newly 12 quarter phase of declaration.

Agriculture sector is expected to grow by 3.3% in the next fiscal year. Respondents expect the industry sector to recoup, with a projected growth of 3.3% in 2014-15. The industrial growth estimate ranges between 1.8% (minimum) and 4.4% (maximum). Meanwhile, service sector performance is expected to remain consistent with a growth rate of 7.0% in 2014-15.

The quarterly growth is expected to improve in FY15. Industrial sector is likely to see a better performance, the performance of services sector is also expected moderate growth.

State of Economy:

* CPI inflation projected at 5% by the end of the year, consequently, easing of monetary policy.

* Monetary Policy Framework Agreement with RBI, to keep inflation below 6%.

* GDP growth in 2015-16, projected to be between 8 to 8.5%.

* Accordingly, journey for fiscal deficit target of 3% will be achieved in next 3 years rather than 2 years. The fiscal deficit targets are 3.9%, 3.5% and 3.0% in FY 2015-16, 2016-17 & 2017-18 respectively.

Bank faced the challenges bravely but still throughout the year, asset quality remained a serious cause of concern for the bank and there has been pressure on the profitability with high cost of deposit, low income and lower Net Interest Margin.

WORKING RESULTS

TOTAL BUSINESS

During the year ended 31.03.2015, total Business of the Bank recorded an increase of 6.26% at Rs.151511 crore as compared to Rs.142588 crore as on 31.03.2014.

PROFIT

The Bank recorded a Net Profit of Rs.121.35 crore for the year 2014-15 as compared to that at Rs.300.63 crore during the FY 2013-14. The Return on Assets (ROA) stood at 0.13% as compared that at 0.35% in the year 2013-14.

(Rs in Lac) Year Ended %age 31.03.2015 31.03.2014 change

Interest Income 858855 797271 7.72

Other Income 42875 42728 0.34

Total Income 901730 839999 7.35

Total Expenditure 824185 759945 8.45

Operating profit 77545 80054 (3.14)

Net Profit 12135 30063 (59.63)

ROA 0.13% 0.35% ---

Net Interest Margin (NIM) 1.80% 1.88% ---

Gross NPA 4.76% 4.41% ---

Net NPA 3.55% 3.35% ---

Capital Adequacy Ratio 11.88% 12.10% — (Basel II)

Capital Adequacy Ratio 11.24% 11.04% — (Basel III)

EPS (Rs.) 3.59 10.69 ---

CAPITAL & RESERVE

During the year, the Bank has issued 3,04,36,252 Equity Shares of Rs.10/- each to Life Insurance Corporation of India by way of Preferential Issue at a price of Rs.59.14 per share determined as per SEBI ICDR Regulation after taking necessary approval from RBI/ MOF.

Perpetual Non Cumulative Preference Shares (PNCPS) of Rs.200 crore, Perpetual Cumulative Preference Shares (PCPS) of Rs.200 crore and Innovative Perpetual Debt Instruments (IPDI) of Rs.160 crore held by Government of India have been converted into 9,46,90,563 Equity Shares of Rs.10/- each by way of Preferential Issue at a price of Rs.59.14 per share determined as per SEBI ICDR Regulation after taking necessary approval from RBI/ MOF.

Accordingly, the Equity Share Capital of the Bank has increased by Rs.125.13 crore to Rs.400.41 crore and Share Premium has increased by Rs.614.06 crore (Share Premium Received Rs.614.87 crore minus Share Issue Expenses Rs.0.81 crore) to Rs.1318.04 crore.

The Net Worth of the Bank has improved from Rs.4180.40 crore as on 31.03.2014 to Rs.4811.56 crore as on 31.03.2015.

The Capital Adequacy Ratio (Basel III) of the Bank is 11.24% as on 31.03.2015 against the minimum stipulated requirement of 9%

UNSECURED REDEEMABLE BONDS: (Subordinated Debts for Tier -II Capital)

During the Year, the Bank has redeemed Tier II Bonds of Rs.40.00 crore. Thereby, total outstanding of Tier II Bonds was Rs.1325.00 crore.

DEPOSIT GROWTH

The total deposit of the Bank registered a growth of 2.34% with Net accretion of Rs.1984.55 crore to reach at Rs.86714.71 crore as on March 31, 2015 from Rs.84730.16 crore as on March 31, 2014. The average cost of deposit of the bank stood at 8.21% as compared to 8.22% in previous year.

ADVANCES

The Bank''s Advances increased by 11.99% from Rs.57857.74 crore as on 31.03.2014 to Rs.64796.42 crore as on 31.03.2015. The average yield on Advances stood at 11.12% as on 31.03.2015 compared to 11.34% during the last year.

PRIORITY SECTOR ADVANCES

Bank continues to accord top priority to varied goals under national priorities, including Agriculture, Micro & Small Enterprises, Housing, Education, Micro-credit, Weaker sections, SC/STs and Minority communities

Priority Sector advances of the Bank increased by Rs. 2554 Crore (14.45%) from Rs.17680 Crore as on 31.3.2014 to Rs. 20234 Crore as on 31.3.2015.

SPECIAL AGRICULTURE CREDIT PLAN (SACP)

Bank has disbursed Rs. 8654 crore under Special Agriculture Credit Plan (SACP) achieving 104% of target of Rs 8290 Crore for the financial year 2014-15.

RUPAY KISAN DEBIT CARDS

During the year 2014-15, the bank issued ATM enabled ''RuPay Kisan Debit Cards'' to 160563 KCC holders covering 99.38% of eligible KCC holders till 31.03.2015.

WELFARE OF MINIORITY COMMUNITY

Advances to specified minority communities aggregated to Rs.7658.59 crore accounting for 37.85% of the total priority sector advances against the stipulated target of 15%.

ADVANCES TO ECONOMICALLY WEAKER SECTION

Bank''s advances to weaker section aggregated to Rs. 5857 crore, achieved target of 10% of ANBC.

NEW INITIATIVES

* To widen the spread of Electronic Delivery Channels, the Bank has installed 260 new ATMs during the year 2014-15. Total number of ATMs of the Bank as on 31.03.2015 is thus 1268 as compared to 1008 as on 31.03.2014

* Bank has implemented bilingual receipt printing (Hindi & English) in ATMs

* Bank has installed 8 Bunched Note Acceptor machines in e-lobbies across the Country.

* Bank has implemented solution for Visually Impaired (Talking facility) in 360 Capex ATMs. Implementation of the same in the remaining Capex ATMs is under process.

* Introduced Miller Card for Millers of Punjab State. (Total of 316 cards were issued).

* Implemented RuPay e-commcerce in the Bank for online purchases through Rupay Debit Card.

* Bank has opened 126 new branches during the year 2014-15. Out of these, 59 branches have been opened under Financial Inclusion. S To facilitate the aging customers, the Bank has launched a scheme "VRIDHJAN VISHESH SAMMAN YOJNA".

* E-Book on Priority Sector Lending compiled and published.

* MSE Booklet including documentation issued for field functionaries.

* Bank introduced new scheme "PSB Kisan Suvidha Scheme" for boosting Term Lending to agriculture sector.

* The system generated Interest Subvention on Crop Loan implemented through Finacle.

* In addition to existing 29 specialized MSME branches, 22 more general branches have been categorized as specialized MSME branch, taking the total to 51.

* Out of three, two RSETIs moved in newly constructed Bank''s own premises.

CREDIT MONITORING

Credit Monitoring Department continues to give direction to its Loan Assets portfolio so that it is in conformity with Corporate Business Plan , in line with RBI/Government of India directions.

For proper and effective monitoring of High value acccounts and to check fresh slippages, the Control Room set up in the year 2013, has since stabilised and monitoring high value accounts at HO level. To further strengthen the monitoring, seperate Control Rooms have now been set up at Zonal Offices level to monitor all standard borrowal accounts from Rs. 5.00 lac upto Rs. 50.00 lac .

Timely restructuring of loan assets, which were under stress due to economic downturn and required financial support under Sole Banking as well as CDR, has also been undertaken, to prevent slippage and impairment in credit quality.

In order to suppliment the aforesaid, various policy related initiatives have also been taken by the Bank which inter-alia include implimentation of Framework for Revitalising Distressed Assets in the Economy for Early Recognition of Financial Distress, Prompt Steps for Resolution and Fair Recovery for lenders, guidelines on refinance by way of flexible structuring/ take-out financing, Classification and reporting of borrower as non-cooperative borrower etc.

PRADHAN MANTRI JAN DHAN YOJNA

PM launched "Pradhan Mantri Jan Dhan Yojna (PMJDY) on 28th August 2014 nation wide - a comprehensive Financial Inclusion Plan on Mission Mode and fixed time lines were set for 100% coverage of SSAs and opening of accounts upto 26.01.2015. PMJDY is a flagship project of Government of India and it has been decided at the level of Hon''ble Prime Minister to cover every habitation in SSA''s allotted to our Bank by opening of atleast one bank account per household. All the households should have access to Banking services within 5 km area by 26th January 2015.

The present PMJDY scheme cover following in Pillar 1 phase from 16.08.2014 to 26.01.2015

* Universal access to banking facilities

* Financial Literacy Programme

* Providing Basic Banking account

* Micro Insurance

In Pillar 2 following will be covered

* Unorganized sector pension schemes like ''Atal Pension Scheme''

* Micro Credit availability (Overdraft facility of Rs.5000/.)

Excellence Award:-

Bank has won an Excellence Award for Achievement in PMJDY parameters on 25.03.2015. The Award was given by Shri Kalraj Mishra, Union Cabinet Minister (MSME) .

Bank is making a good progress under PMJDY as under:-

* Survey in all 961 SSAs and 535 Wards is completed

* All households as per Survey report have since been covered by opening at least one account per household.

* Bank has opened nearly 12.39 lac accounts under PMJDY and issued 12.03 lac RuPay cards to them from 15.08.2014 to 31.03.2015.

* Bank is also doing Aadhaar seeding in these accounts and as on 31.03.2015, 6.13 lac (49%) accounts are Aadhaar seeded under PMJDY

* Bank is issuing passbooks to account holders and as on 31.03.2015, 11.70 lac (94.5%) passbooks have been issued to the customers.

* Bank has successfully appointed its own 383 BCAs, provided them with PoS machines to work exclusively in the villages. Nearly 0.62 lac enrollments have been done through PoS machines and about 1.22lac transactions have been done successfully by BCAs, upto 31.03.2015.

* AEPS (Aadhaar Enabled Payment System) has already been implemented on PoS machines and the Bank is in the process of implementing RuPay card inter-operability on the PoS machines.

* Now the Bank is in the process of implementing Overdraft facility of Rs.5000/- in PMJDY accounts, as per the guidelines.

* Directly receiving subsidies/payments (including DBTL) into the account based on both Aadhaar number and account.

* In DBTL, Bank has received a total number of 20.54 lac entries w.e.f. 15.11.2014 and total amount received is Rs. 71.46 crore.

RETAIL MARKETING

The Bank accorded top priority to Retail Lending and declared it as ''Niche'' area, the products under the Retail Lending segment have been customized to be competitive in the market, undertook specific marketing initiatives including organization of more than 800 Retail Lending Camps.

Further, Festival Bonanza Scheme was launched for Housing Loan, Auto Loan and Consumer Loan borrowers. A new Retail Lending product exclusively for younger staff of the Bank named "PSB Family Bonding Scheme" was launched during the year.

An incentive scheme for the top performers in Retail Lending in the field was also launched during the year.

The growth in fresh Retail disbursement lending was above 52% over previous year.

Retail Lending Outstanding grew at the rate of 25% over previous Year.

Further, the Bank participated in the booking schemes launched by various Development Authorities viz. DDA, PUDA, GMADA for financing of the earnest money and received an encouraging response.

ASSETS QUALITY

The Bank continued to make concerted efforts to contain NPAs and has used all available tools of recovery including negotiations, settlements and legal means. The provisions of "The Securitization & Reconstruction of Financial Assets & Enforcement of Security Interest Act -2002" were used effectively. The Bank also organized Recovery Camps during the year at various centers. During the year, two short term schemes for settlement of NPAs were formulated under Agriculture Sector and unsecured T.W.O. accounts apart from Bank''s Recovery Management Policy. In all 1371 cases were settled at Rs. 97.42 crore.

The performance of the Bank under recovery of NPAs during the year continued to be good. The aggressive and focused efforts could result in the total recovery of over Rs. 832.52 crore including recovery of Rs. 73.21 crore in Technically Written Off Accounts.

Bank has been able to contain fresh slippage. As a result our gross NPAs and net NPAs as on 31.03.2015 have been contained at Rs. 3082.19 crore and Rs. 2266.00 crore respectively against Rs. 2553.52 crore and Rs. 1918.60 crore as on 31.03.2014.

The position of Gross and Net NPAs as on 31.03.2015 vis-a-vis previous year is as under (Rs. in crore) NPA As on 31.03.2014 As on 31.03.2015

Gross 2553.52 4.41 % 3082.19 4.76%

"Net 1918.60 3.35 % 2266.00 3.55%

The Provision Coverage Ratio of the Bank (including T.W.O.A/cs), as on 31.03.2015 stood at 46.81 %

INVESTMENT & FOREIGN EXCHANGE

The Bank''s total gross investment as on 31.03.2015 was Rs 26791.69 Crore, with a portfolio composition consistent with the corporate requirement, risk perception, and investment policy of the Bank.

The profit on sale of securities for the year has increased from Rs. 125.37 crore for year ended March 2014 to Rs. 133.66 crore for the year ended 31.03.2015 on account of trading activities in G-sec and Non SLR securities.

Exchange profit in Forex transactions for the year 2014-15 was Rs 26.51 crore (forex treasury).

RISK MANAGEMENT

The Bank has put in place a robust and integrated Risk Management system to ensure that the risks assumed by it are within the defined risk appetites and are adequately monitored. The overall responsibility of setting the Bank''s risk appetite and effective risk management rests with the Board and apex level management of the Bank.

Risk is managed through following Apex committees viz.

1. Risk Management Committee (RMC)- a Board level subcommittee

2. Credit Risk Management Committee (CRMC)

3. Asset and Liabilities Management Committee (ALCO)

4. Operational Risk Management Committee (ORMC)

5. Market Risk Management Committee (MRMC) and

6. Capital Planning Committee as per ICAAP

These committees work within the overall guidelines and policies approved by the Risk Management Committee (RMC) / Board.

POLICY FRAMEWORK

The Bank has Board approved policies and procedures in place to measure, manage and control various risks that the Bank is exposed to.

Integrated Risk Management Policy has been formulated with the objective of analyzing the overall risk profile of the bank and to integrate all the risks of the Bank. The other important risk policies comprise of Asset-Liability Management (ALM) Policy, Credit Risk Management Policy, Market Risk Management Policy, Operational Risk Management (ORM) Policy, Business Continuity Planning (BCP) & Disaster Recovery Management (DRM) Policy, Stress Testing Policy, Policy on Utilization of Credit Risk Mitigation Techniques & Collateral Management, ICAAP Policy. The policies are reviewed annually by the RMC / Board.

BANK''S COMPLIANCE WITH BASEL-II

In terms of Regulatory Guidelines of Reserve Bank of India, the Bank has adopted the New Capital Adequacy Framework w.e.f. 31.03.2009. Based on Basel II norms, the Bank has adopted Standardized Approach for Credit Risk, Modified Duration approach for Market Risk and Basic Indicator approach for Operational Risk for computing the capital charge. The Bank has also implemented Basel III Guidelines and has started computing CRAR w.e.f. June 2013. The CRAR position of the Bank is reviewed by the Board on quarterly basis. Bank has geared up for moving towards advanced approaches under BASEL II as suggested by RBI. Bank has also appointed a Consultant for setting up Enterprise Wide Integrated Risk Management System (EIRMS) in the Bank for moving to Advance approaches of Basel II and implementation of Basel III Guidelines.

ICAAP POLICY

In compliance with the Reserve Bank of India guidelines on Basel II & Basel III - Pillar 2- Supervisory Review and Evaluation Process (SREP), the Internal Capital Adequacy Assessment Process (ICAAP) Policy has been formulated to assess the capital requirement commensurate with the size, level of complexity, risk profile and scope of operations of the Bank. Various residual risks are assessed and additional capital is provided for wherever required. The capital adequacy of the Bank is assessed based on the analysis of current and projected financial/capital position as well as the headroom available.

Stress Testing exercises are also undertaken to assess the likely impact of various stress situations in relation to capacity of Bank''s profitability to absorb the shock and consequent impact on Bank''s capital. The ICAAP outcome is prepared on half yearly basis and is reviewed by RMC.

DISCLOSURE:

In compliance with the Reserve Bank of India guidelines on Basel II & Basel III - Pillar 3 - Market Discipline, the Bank has put in place a Disclosure Policy duly approved by the Board and the disclosures on quarterly / Half yearly / Annual basis, as per the policy, are displayed on the Bank''s Website / Annual Report.

CREDIT RISK

Credit risk management processes involve identification, measurement, monitoring and control of credit exposures. Credit risk and its policy formulation is managed by Credit Risk Management Committee (CRMC). It regularly monitors prudential caps in different loan segments including industry, corporate, retail and individual/group borrowers.

Comprehensive credit rating framework comprising of Credit Risk Rating Models for Corporate and Retail Loans, pricing of loans linked to risk assessment and credit rating, study & analysis of industries/portfolio, migration of credit ratings is undertaken.

Awareness of Basel II norms at the operating level is created and continuously enhanced to achieve the aim of conservation and optimum use of capital.

MARKET RISK

The Bank''s portfolio is exposed to market risk on account of changes due to interest rates and currency rates.

The Asset and Liabilities Management Committee (ALCO) is overseeing the functions relating to market risk. The Bank has put in place a variety of market risk measurement systems and tools. Strict adherence to various limits and proper escalation of breaches, if any, are followed. Moreover, a Mid Office is also in place.

The Liquidity Management Framework is well established, which safeguards the ability of the Bank to meet all payment obligations when they become due. It is designed to identify measure and manage the liquidity risk position of the Bank.

The Bank is computing the market risk capital charge as per the Modified Duration approach, by using Modified duration method, as per the regulator''s guidelines. The Bank also calculates Value at Risk (VaR) on its foreign exchange portfolio.

The Bank periodically undertakes stress test exercise to highlight the potential risks, on account of liquidity & interest rate risk that may arise due to events that are rare but plausible. The impacts of shock on account of different risk factors that may generate worst case scenario are studied and to counter the impact possible solutions are derived.

OPERATIONAL RISK

The Operational Risk Management Committee (ORMC) oversees the matters relating to risks associated with operations and ensures the continuity / restoration of business in the event of contingency / exigencies. Presently, capital charge on operational risk is calculated as per Basic Indicator Approach. The Bank is in the process of strengthening its ORM Framework & ORM systems so as to be able to migrate to advance approaches of calculation of Operational Risk Capital.

HUMAN RESOURCE MANAGEMENT

The cadre wise staff strength as on 31.03.2015 is as under:-

Category 31st March 2014 31st March 2015

Officers 6062 6409

Clerks 2029 2113

Sub-staff 779 658

Total 8870 9180

WOMEN IN EMPLOYMENT: -

Out of the total strength of 9180 as on 31.03.2015, the women employees are 2082 constituting 22.68% of the total strength.

EMPLOYMENT TO RESERVED CATEGORY EMPLOYEES:-

Bank is committed to the constitutional safeguard and social objectives for the development and welfare of persons belonging to SC, ST and other backward classes of the society. The Bank observes all guidelines stipulated by the Govt. of India in respect of Reservation Policy for reservation of Posts in all India, local recruitments.

A special SC/ST cell has been set up in the Bank to monitor the Reservation & other provisions for SC/ST employees. An executive in the rank of General Manager has been designated as Chief Liaison Officer for SC/ST employees who ensures compliance of various guidelines pertaining to SC/ST employees & takes care of all matters of grievance redressal of SC/ST employees of the Bank.

The staff strength of SC/ST employees stood at 1572 and 533 respectively on 31.03.2015. The staff strength under various reserved categories viz OBC/EX-SM/PH is as under:-

CATEGORY SC ST OBC Ex-SM PH

OFFICERS 952 439 994 48 86

CLERKS 420 71 410 136 40

SUB-STAFF 200 23 29 128 14

Total 1572 533 1433 312 140

FINANCIAL ASSISTANCE TO THE DEPENDENTS OF DECEASED EMPLOYEES:-

During the Financial year 2014-15, the Bank made total payment of Rs 37,21,633/- in 6 cases towards financial assistance to the dependants of the deceased employees under the scheme for the payment of EX Gratia in lieu of appointment on compassionate grounds.

PROMOTIONS: -

Bank is regularly promoting people almost in all cadres year after year to keep on rewarding its top performers and make them assume higher responsibilities. Special drive was made during the year under review to fulfill the growing aspirations of the employees for fast career progression thereby motivating employees for higher productivity.

Following promotions have been affected during the year:-

Promotions DGM AGM CM SRM MGR OFFICER CLERK SUBSTAFF TOTAL TO TO TO TO TO TO TO TO From GM DGM AGM CM SRM MGR OFFICER CLERK

General 5 18 35 122 269 741 196 30 1416

Specialist - - - 12 63 9 - - 84

Total 5 18 35 134 332 750 196 30 1500

TRAINING & HUMAN RESOURCES DEVELOPMENT:-

Training is an integral part of human resource development. In the current competitive environment in the Banking industry, it is all more important to keep the staff abreast of the latest developments in technology, system and procedures, legal aspects etc., especially amongst the peers.

Training and grooming are important steps in creating a vibrant organizational culture in which employees are encouraged & motivated to perform better. It helps in augmenting the competencies of employees & equip them with the right skills & knowledge for meeting ever changing business needs of customers in different segments. The training programs organized by the Bank are geared towards integrating the new recruits into the Bank & in enhancing the skills, knowledge and for reorienting the attitude of its existing work force to the organizational objectives so as to transform the Bank to a technology & service driven Bank of the country.

Newly recruited POs were addressed by Chairman and Managing Director to introduce them to Bank''s history, Ethics, Structure, Business and Future Plans. The objective was to familiarize them with the Banking environment so that they get an overview and adapt to the Bank''s system quickly apart from getting the knowledge inputs. They were made familiar with their career & succession plans in the Bank. The newly recruited staff was provided Orientation Training on Advances at Branch Level.

The Bank endeavored to provide training to 50% of its employees during the Financial Year 2014-15. With this in view, 269 programmes were conducted in General Banking & Computer related programmes at CBRT Chandigarh, NIBSCOM, Noida & Locational trainings conducted at Zonal Offices in various fields from 1st April 2014 to 31st March 2015, in which training was imparted to 7144 employees of different cadres.

With a view to sensitize the top executives of our the Bank with the fast changing scenario in the Banking Industry and to assume leadership role to carry forward the institution''s vision/goals, a five days Management Development Programme for newly promoted GMs, DGMs, AGMs and other executives was conducted in June 2014 at NIBM, Pune. 60 Executives attended the same.

Besides 180 Officers were also imparted training at Apex Level.

INDUSTRIAL RELATIONS: -

The industrial relations in the Bank remained cordial throughout the year. The representatives from Workers and Officers unions participated in various discussions on developmental and other issues with the management at various levels and efforts were made to resolve the same. A grievance Redressal Committee has also been formulated as per the guidelines received from Ministry of Finance to redress the grievances raised by staff members.

DIRECT RECRUITMENT: -

The Bank launched a special recruitment drive to cater to the challenges of superannuation, sustained business growth and rapid branch expansion in the FY 2014-15. Recruitment of both the Specialist Officers and Probationary Officers was done to address the diverse manpower requirement of the Bank.

During the year, 6 CAs in Scale II, 9 Law Officers in Scale -II, 913 Probationary Officers, 53 AFO in Scale -I, 5 HR/IR Officers in Scale I and 448 Single Window Operators-A in Clerical cadre have joined the Bank under Bank''s Recruitment Project 2014-15.

STAFF WELFARE

In order to motivate and encourage the staff for effective participation in development activities, the Bank is maintaining various welfare schemes for the staff. During 2014-15, welfare schemes of the bank were successfully implemented.

INFORMATION TECHNOLOGY

* As on 31.03.15, all the branches/ offices are on Core Banking Solution.

* Electronic fund transfer facility through RTGS & NEFT is available in 1449 branches.

* Biometric based Authentication for employees'' login into CBS application has been introduced to prevent the incidence of frauds taking place on account of password theft/sharing of CBS users. Bank is presently enabled for Biometric Authentication for Finacle users. All the new branches are being opened in the ambit of Biometric Authentication.

* Bank launched Inter-bank fund transfer service USSD facility using NUUP on 28.08.2014, with two fund transfer options: P2P (Mobile to Mobile) and P2A (Mobile to Account). Through this facility customers can access their bank accounts and make interbank fund transfers on 24*7 basis without logging in through the portal.

* Bank on 28.08.2014 launched an Aadhaar Based ''Know Your Customer (E-KYC) Service'' of Unique Identification Authority of India (UIDAI). The service is available in all the branches using Biometric system.

* Five e-lobbies have since been opened

INTERNAL CONTROLS

The well-established Inspection & Audit Deptt (IAD) ensures review of institutional performance, to maintain financial discipline, check productivity levels in the Bank through the teams of internal/external auditors. The IAD constantly aims at checking the inherent risks through its effective control mechanism, to protect the Bank''s interest by conducting RBIA and Inspection of branches/offices and Endeavour to minimize perpetration of frauds.

The Audit Committee of the Board (ACB), which met on 8 occasions during FY 14-15, oversees the Internal Audit function of the Bank as well as the functioning of the Audit Committee of Executives (ACE), which is a first tier Committee to oversee Inspection and Audit function in the bank.

During FY 2014-15, Risk Based Internal Audit was conducted in 808 branches of the Bank,435 branches were brought under Concurrent Audit System; the Information System Audit was conducted in 591 branches and Zonal Offices and Departments at Head Office have been subjected to Management Audit & Inspection.

The Inspection and Audit Department is also monitoring redressal of the customer grievances/complaints. During FY 2014-15, 1432 complaints were received, of which 1349 complaints have been disposed off. The Banking Ombudsman passed 5 awards against the Bank out of which the Bank has preferred appeal against one award.

During the year the Inspection and Audit Department formulated ''Legal Audit Policy'' to ensure better supervision & thus covering an important aspect to exercise proper control by the field functionaries to fall in line with RBI directives.

To summarize, Bank''s Inspection and Audit Department has been effectively monitoring the compliance of Systems and Procedures laid down by Bank''s Board, the Regulator and Government of India.

COMPLIANCE FUNCTION

The compliance cell was upgraded into a full-fledged Compliance Department wef.01/10/2009.

A comprehensive Compliance-policy was drafted during FY 2013-14, which was reviewed during 2014-15. Further, Compliance Manuals of Zonal Offices and Various HO Departments were drafted/updated during the year. HO P&D Department also drafted the Functional Manual of the bank and placed it on the intranet site of the bank.

The Bank has followed various guidelines issued by RBI regarding Compliance Functions in bank. During the year, the bank has ensured that Statutory/Regulatory and any other mandatory information required to be sent to the Regulator/GOI or any other Authority has been sent. Further, gists of all RBI circulars and Internal guidelines, issued during the FY 2014-15, were prepared month-wise and placed on the intranet site of the bank for reference of the staff.

It was also ensured that the functioning of Branches, Zonal Offices and Departments is synchronized with their Functional Manuals. This functioning has been regularly checked through Annual Compliance Audits and random cross-checking of some of the branches at regular intervals.

PUBLIC RELATION AND PUBLICITY

During the financial year 2014-15, the Bank adopted a multi-media strategy to build up its image in Public and at the corporate level and accordingly publicity was made through the print media by release of its product, tender, financial and other display/ notice ads in different newspapers, magazines and souvenirs targeting various audiences all over the country.

Bank also used outdoor publicity tools i.e. Sponsorship and Display of Banners & Hoardings on events of high publicity value e.g. Surjit Hocket Tournament, Jawahar Lal Nehru Hockey Tournament ,T20 Cricket Tournament and Annual function of Bhai Vir Singh Sahitya Sadan facilitated extension of outreach of the Bank. Bank also received immense publicity through the Bank''s Wall Calendar 2015 which was widely distributed among clients and well wishers of the Bank.

Bank got huge publicity by way of coverage of its press releases by the print media. All these activities facilitated the Bank to rededicate itself to the service of the nation and enabled it to earn a well deserved mileage on the publicity front.

VIGILANCE

During the year, number of initiatives on Preventive as well as on Punitive Vigilance were taken to strengthen the vigilance administration.

The Vigilance Manual was updated and revised Manual was released during the year. The updated Vigilance Manual was released by Shri J.M.Garg, Vigilance Commissioner.

Special thrust was given, to bring down the pendency of disciplinary action cases more than 6 months old, not only to a single digit but to a minimum possible level, as evident from the last four year position given as under:

2010-11 2011-12 2012-13 2013-14 2014-15

Pending inquiries more 19 12 03 07 01 old than 6 months

As regards, pending cases of sanction for prosecution, it is matter of satisfaction that no case is pending for sanction of prosecution as on 31.03.2015 in the Bank. In all such cases received from CBI, the Bank had either given the sanction for prosecution or has declined the sanction for prosecution with the valid reasons and after intervention by Hon''ble Commission, where required.

Further, monitoring at all levels has yielded positive result as pendency of complaints especially received from CVC / DFS / CBI, has reduced significantly, as is evident from the data / table given below :

31.03.2011 31.03.2012 31.03.2013 31.03.2014 31.03.2015

Pending CVC 10 07 02 02 01* referred Complaints

With constant monitoring and emphasis on strengthening the internal control mechanism in the Bank, there is considerable decline in fraud, as is evident from the table below. In view of the fact that when almost all the Banks and Financial Institutions are having steep increase in frauds during the last 3/4 years, with effective control mechanism, the bank has been able to reverse the upward trend in frauds in the Bank.

(Rs. in crore) 2012 - 13 2013 - 14 2014 - 15

Amount Amount Amount

Frauds Reported 102.94 68.93 30.99

With effective internal controls, initiation of fresh RDA (Regular Disciplinary Action Cases) cases have declined considerably.

As on 31st March 2013 2014 2015

Vigilance Cases Pending 133 75 70

The bank is focusing more on the preventive vigilance and as a result of preventive vigilance measures / awareness efforts amongst the staff members across the organization, the number of issuance of Charge Sheet has declined over the period, as depicted hereunder:

2012 - 13 2013 - 14 2014 - 15

Charge Sheet issued 151 102 63

SECURITY

The Bank has a well established Security set-up within the Bank''s organizational structure. The H.O. Security department has been regularly reviewing the security arrangements at all the Currency Chests and branches and accordingly strengthening the security arrangements to meet prevailing security scenario with effective, modern and unobstructed Security Systems. All the essential and mandatory security arrangements in terms of RBI/ IBA guidelines are provided at almost all branches.

The Zonal Security Officers periodically carry-out Security audit of branches to assess the security arrangements in vogue and recommend implementation of additional preventive security measures wherever desired. They maintain close liaison with the law enforcing and administrative authorities. Besides, the Chief Security Officer and other officials from Head Office are also carrying out the security audit of the Currency Chests and also undertake random visits of the vulnerable branches of the Bank.

The Access Control System at all the Bank''s Currency Chests has been strengthened in terms of RBI guidelines. A proper system of regulating access to Currency Chest Strong Rooms and proper records of entry into / exit from the Vault Room of the chest is being maintained.

Security Alarm Systems are installed at all branches and currency chests. Strong Room conforming to RBI specification are provided at majority of the branches.

The Bank has a total of 12 (twelve) currency chests. Police guards have been provided at 11 currency chests. The Bank has outsourced round the clock guarding of Bhilai Currency Chest to a Private Security Agency sponsored by DGR. Efforts are continuing for deployment of Armed Police Guards at this Currency Chest. All the branches of the Bank are provided with armed guards and all the cash remittances are escorted by the armed guards.

Training, including firing practice, for Armed Guards deployed at currency chests / branches is imparted on an annual basis. Also, all the security officers undergo refresher training on security once in a year.

Keeping in view the threat perception, volume of cash and valuables handled and need for continuous surveillance, CCTV Surveillance System have been installed at all the Currency chest / branches and 507 identified High Risk and vulnerable branches in the first phase. CCTV systems shall be installed at the remaining branches in a phased manner.

IMPLEMENTATION OF OFFICIAL LANGUAGE

During the financial year 2014-15, the Bank made significant progress in implementation of Official Language Policy of Govt. of India for promoting and propagating the use of Official Language in the Bank. A total of 71 workshops were organized, in which 986 personnel were trained. Besides this, in 715 Hindi Desk Training Programmes, 2123 staff members were imparted training for using official language and Unicode training on Computers. With the aim of reviewing the progress of Official Language, inspections were conducted in 609 Branches/Offices. During the year, as per directions of the Finance Ministry, Rajbhash Vibhag, 461 "Aapsi Samvad-Sarthak Disha" and 266 "MastishkManthan", programmes were organized in different offices/branches of the Bank.

This year the Bank won Rajbhasha Shield (IInd prize) from Ministry of Home Affairs for implementation of Official Language Policy in Bank''s B region in Bank''s category. The Bank also won Rajbhasha Shield (consolation prize) from Reserve Bank of India. Apart from this, Delhi Town Official Language Implementation Committee (TOLIC), awarded Consolation Prize to our Bank In- House Hindi Magazine "Rajbhasha Ankur". Bank staff members also won six prizes in various interbank competitions organized by different banks under auspices of Delhi Bank TOLIC.

SPORTS

The Bank has a Sports Academy which nurtures the Bank''s Hockey Team at National Level, besides Hockey Academy for age group of 15-18 years. During the year, the Bank''s Hockey Team won the following National Tournament:

* All India Martyrs Hockey Tournament

The following players of the Bank''s Hockey Team and Hockey Academy have represented Indian Hockey Team in various International Tournaments during the year 2014-15:

Sh. Ramandeep Singh Sh. Harbir Singh Sh. Satbir Singh

Sh. Gurmail Singh Sh. Harjot Singh

6 players represented Indian Premier League from different teams which was organized by Hockey India with the sponsorship of HERO Group.

Presently 3 players are in the Indian Hockey Team for Azlan Shah Cup 2015 at Malaysia.

Savajit Singh, Guriqbal Singh, Gautampal Singh, Vikramjit Singh & one player from Hockey academy represented Punjab state in National Games held at Kerala.

Team from the Bank''s Hockey Academy (Age Group 15 to 18 Years) won the following tournaments during 2014-15

* All India Baba Farid Hockey Tournament

* All India Sat Guru Jagjit Singh Hockey Tournament

* Inter College Hockey Tournament ( Our 8 players played for Lyallpur Khalsa College, Jalandhar)

Apart from these, other contributions are as under:

Sh. Jaskaran Singh of Banks'' academy represented both Senior & Junior Nationals from Punjab State Hockey Team.

Sh. Sanjeev Kumar (Olympian) of our Bank was the Chief Coach of Punjab Team at National Games held at Kerala.

4 players represented GNDU Hockey Team in All India University Hockey Championship and won the Silver medal.

RECONCILIATION

Total outstanding in IBR & DD as on 31.03.2015 has been reduced by 99% during the financial year 2014-15. The efforts are being continued to reduce the old outstanding entries also.

GENERAL ADMINISTRATION

Various building projects viz staff Training College, Rohini, renovation of the Bank House building, Noida are in progress and likely to be completed in the next year 2015-16. Construction work at Fort Mumbai and Gurgaon has already been completed and work at East Kidwai Nagar and Possangipur is in progress.

CONSTITUTION OF BOARD OF DIRECTORS

As on 31st March 2015, the Board comprised of two Whole Time Directors viz Chairman & Managing Director and one Executive Director besides seven other Directors including representatives from Ministry of Finance, Reserve Bank of India, Non Official Director (Chartered Accountant Category), two Share Holders Directors and two Part Time Non Official Directors.

Various Committees constituted under the Board as listed below, oversee the functioning and control the affairs of the bank:

* Management Committee

* Audit Committee

* Risk Management Committee

* Committee for Monitoring of Large Value Frauds

* Vigilance Committee

* Customer Service Committee

* Stakeholders Relationship Committee

* IT Strategy Committee

* Nomination Committee

* HR Committee

* Committee of Board on Appellate/Reviewing Authority

* Remuneration Committee

* Committee of Board on Executives'' Promotion

* Committee for Monitoring of Recovery

* Election of Shareholders Director Committee Voting by Public Sector Bank

During the year 2014-15, Nine meetings of the Board of Directors, Twelve meetings of the Management Committee and Nine meetings of the Audit Committee of the Board were held, besides Meetings of other committees of the Board.

The constitution of Bank''s Board of Directors underwent following changes during the year 2014-15:

INCLUSIONS

* Sh. M M Dawla was nominated as MOF Nominee Director of the Bank vide Government of India, Ministry of Finance, Department of Financial Services, New Delhi Notification No.F.No. 6/3/2012-BO-I dated 07.05.2014.

* Sh. S R Mehar was nominated as MOF Nominee Director of the Bank vide Government of India, Ministry of Finance, Department of Financial Services, New Delhi Notification No.F.No. 6/3/2012-BO.1 dated 24.09.2014.

* Sh. M S Sarang was appointed as Share Holder Director of the Punjab & Sind Bank on 01.07.2014

* Sh. S P Babuta was appointed as Share Holder Director of the Punjab & Sind Bank on 01.07.2014

CESSATIONS

* Sh. S C Das MOF Nominee Director was on the Board of the Bank up to 07.05.2014.

* Sh. S P Babuta completed his term as Share Holders Director on 02.06.2014

* Sh. N Rajendran completed his term as Share Holders Director on 02.06.2014

* Sh. Suresh Thakur completed his term as Non Official Director on 12.07.2014

* Sh. Sanjeev Arora completed his term as Non Official Director on 14.07.2014

* Sh. M M Dawla MOF Nominee Director was on the Board of the bank up to 24.09.2014

* Sh. S P S Virk completed his term as Workman Director on 22.11.2014.

* Sh. Kishore Kumar Sansi, Executive Director of the Bank was appointed as Managing Director & CEO, Vijaya Bank vide Government of India, Ministry of Finance, Department of Financial Services, New Delhi Notification No. F.No.4/4/2013-BO-I

(i) dated 31.12.2014.

CORPORATE GOVERNANCE

The Bank is committed to good Corporate Governance and is constantly striving to further strengthen the same to ensure greater transparency and better coordination at all levels in the Organization. The working of the Bank reflects transparent ownership structure, improved risk management practices, well defined delegation of powers, accountability and an elaborate audit function carried out by both its Inspection & Audit Division and by independent Statutory Central Auditors.

Bank has complied with the guidelines of RBI and SEBI on the matters relating to Corporate Governance which have been examined by the Statutory Central Auditors.

DIRECTORS'' RESPONSIBILITY STATEMENTS

The Directors confirm that in the 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 a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit of the bank for the year ended on 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 the accounts have been prepared on a going concern basis.

STAUTORY AUDIT

As approved by Reserve Bank of India, bank has appointed M/s B K Shroff & Co., Kolkata, M/s R Kothari & Co., Kolkata; M/s Dhillon & Associates, Chandigarh and M/s Tiwari & Associates, New Delhi as Statutory Central Auditors for the accounting year ended March 2015.

ACKNOWLEDGEMENTS

The Board of Directors of the Bank thanks valued customers, shareholders, well-wishers and correspondents of the Bank in India and abroad for their goodwill, patronage and continued support.

The Directors also acknowledge with gratitude the valuable and timely advice, guidance and support received from Government of India, Reserve Bank of India, Securities and Exchange Board of India (SEBI), Stock Exchanges of various State Governments, Financial Institutions and the Statutory Central Auditors of the Bank in the functioning of the Bank.

The Directors place on record their deep appreciation for the valuable contribution of the members of the staff at all levels for the progress of the Bank during the year and look forward to their continued co-operation in realization of the Corporate goals in years ahead.

For and on behalf of the Board of Directors

Place : New Delhi Jatinderbir Singh Date : 12th May 2015 Chairman & Managing Director


Mar 31, 2014

DIRECTORS'' REPORT 2013-14

The Board of Directors have pleasure in presenting Annual Report of the Bank along with the Balance Sheet & Profit and Loss Account for the year ended 31st March, 2014.

ECONOMIC OUTLOOK

Indian economy continued to face challenging times during 2013-14. The slowdown of the economy that began in 2011-12 continued during this year. The sluggish growth and inflationary pressure remained serious concern of the economy throughout the year. In fact, since Sep 2009 the state of the world economy has been the most decisive factor impacting the economy of every developing country including India. Among India''s major trading partners, USA is showing signs of recovery from a long recession, Japan''s economy is responding to stimulus, Euro zone is reporting a fractional growth of 0.2% and China''s growth slowed during 2013-14. The challenges faced by India are common to all emerging economies. However, India coped with these challenges in a better way than other emerging economies during 2013-14.

The Govt. of India had declared fiscal consolidation, price stability, self sufficiency in food, revival of good environment in investment, promotion of manufacturing, encouragement to exports, quicker implementation of projects as its objectives. However, infrastructure, petroleum, power, coal and textiles continued to remain stressed sectors of the economy.

While the Government successfully contained the Current Account Deficit , controlling inflation proved to be difficult. However, economy once again proved its resilience.

The performance of Indian agriculture was better than industry. The industry continued to be a stressed sector of the economy. The deceleration in investment in manufacturing has remained particular area of concern. Though exports recovered sharply, however, imports remained down which did not augur well either for manufacturing or domestic trade.

The exchange rate affected the Rupee adversely. However, the Government, RBI and other concerned agencies undertook number of measures to improve capital inflow and stabilize foreign exchange market.

However, the state of the economy improved during Q3-Q4 of 2013-14 and growth is expected to be at least 5.2% against growth in Q1 and Q2 of 2013-14 at 4.4% and 4.8% respectively. The economy is more stable today. The fiscal deficit is declining, CAD has been contained, inflation has moderated, the exchange rate is stable, exports have increased and growth rate is on the rise.

In the given scenario of the economy, Bank faced the challenges bravely, even though the asset quality remained a serious cause of concern throughout the year and there has been pressure on the profitability of the Bank with high cost of deposit, rise in NPAs, low income and lower Net Interest Income.

WORKING RESULTS

TOTAL BUSINESS

During the year ended 31.03.2014, total Business of the Bank recorded an increase of 16.41% at Rs.142588 crore as compared to Rs.122485 crore as on 31.03.2013.

HIGHLIGHTS OF RESULTS FOR THE YEAR ENDED 31ST MARCH 2014

(Rs in Lacs)

Year Ended

31.03.2014 31.03.2013

%age change

Interest Income 797271 734012 8.62

Other Income 42728 39422 8.39

Total Income 839999 773434 8.61

Total Expenditure 759945 679549 11.83

Operating proft 80054 93885 (14.73)

Net Proft 30063 33922 (11.38)

Return on Assets (ROA) 0.35% 0.44% -

Net Interest Margin (NIM) 1.88% 2.15% -

Gross NPA% 4.41% 2.96% -

Net NPA(%) 3.35% 2.16% -

Capital Adequacy Ratio (%) (Basel II) 12.10% 12.91% -

Capital Adequacy Ratio(%) (Basel III) 11.04% NA -

EPS 10.69 13.49 -

PROFIT

The Bank recorded a Net Profit of Rs.300.63 crore for the year 2013-14 as compared to that at Rs.339.22 crore during the FY 2012-13.

CAPITAL AND RESERVE

During the year, Bank has issued 2,12,63,023 Equity Shares of Rs.10/ each to Government of India by way of Preferential Issue at a price of Rs.47.03 per share determined as per ICDR Regulation of SEBI after taking necessary approval from RBI/ MOF. Accordingly, the Equity Share Capital of the Bank has increased by Rs.21.26 crore to Rs.275.28 crore and Share Premium has increased by Rs.78.52 crore (Share Premium Received Rs.78.74 crore minus Share Issue Expenses Rs.0.22 crore) to Rs.703.98 crore.

The Net Worth of the Bank has improved from Rs.3897.25 crore as on 31.03.2013 to Rs.4180.40 crore as on 31.03.2014.

The Capital Adequacy Ratio (Basel III) of the Bank is 11.04% as on 31.03.2014 against the minimum stipulated requirement of 9%.

UNSECURED REDEEMABLE BONDS: (Subordinated Debts for Tier -II Capital)

Total outstanding of Tier II Bonds as on 31.03.2014 remains unchanged at Rs.1,365 crore .

DEPOSITS

The total deposit of the Bank registered a growth of 19.94% with Net accretion of Rs.14088.66 crore to reach Rs.84730.16 crore as on March 31, 2014 from Rs.70641.50 crore as on March 31, 2013. The average cost of deposits of the bank stood at 8.22% as compared to 8.32% in previous year.

ADVANCES

The Bank has registered qualitative credit growth of 11.60% during the FY 2013-14. The Gross Advances of the Bank increased from Rs.51843.35 crore as on 31.03.2013 to Rs.57857.74crore as on 31.03.2014. The average Yield on Advances stood at 11.34% as on 31.03.2014 as compared to 11.86 % as on 31.03.2013.

Non Fund Advances business of the bank stood at Rs.3433.42 crore as on 31.03.2014 as against Rs.3578.73 crore as on 31.03.2013.

The Bank has a diversified portfolio of Advances and has extended credit to all sectors i.e Industry, Services, Agriculture, Retail Lending etc; as per vibrant Loan Policy of the Bank. There was notable credit growth to preferred sectors like Agriculture, Construction, Housing sector, Education, Small & Medium Enterprises (MSME) etc. Advances to Housing Sector increased by 18.40% (from Rs.2360.33 crore as on 31.03.13 to Rs.2795.18 crore as on 31.03.14). Credit growth in MSME Sector was 39.50% (from Rs.10113.01 crore as on 31.03.13 to Rs.14107.89 crore as on 31.03.14). Credit exposure to industry other than infrastructure increased by 8.58% (from Rs.9000.80 crore on 31.03.2013 to Rs.9773.05 crore on 31.03.2014) which mainly comprised of sectors viz: Food processing (28.10%) from Rs.683.98 crore to Rs.876.19 crore etc. growth of credit to Textiles during FY 2013-14 was (3.17%) from Rs.1369.15 crore on 31.03.2013 to Rs 1412.67 crore on 31.03.2014. Credit growth to infrastructure sector was in Energy (2.21%) (Earlier Power & Electricity) from Rs.12164.55 crore to Rs.12433.73 crore. Exposure in Energy Sector has increased due to restructuring of accounts of DISCOMS with additional funding.

To strengthen its credit appraisal, the Bank has recruited Chartered Accountants and Technical personnel i.e; Engineers. For improving credit off-take and expeditious disposal of loan proposals, Bank has introduced concept of New Business Proposal Committee, where all proposals of High Value are given in principle sanction /expression of interest for ensuring expeditious processing.

PRIORITY SECTOR ADVANCES

Bank continues to accord importance to varied goals under National priorities, including Agriculture, Micro & Small Enterprises, Housing, Education, Micro-credit, Weaker sections, SC/STs and Minority communities.

Priority Sector advances of the Bank increased by Rs.4096 crore, up from Rs.13605 crore as on 31.3.2013 to Rs 17701 crore as on 31.3.2014 thereby registering a growth of 30% on year to year basis.

AGRICULTURE ADVANCES

Bank''s advances under agriculture portfolio stood at Rs.7919 crore as on 31.3.2014 registering a growth of Rs.3007 crore. The major accretion under Agriculture has been under Direct Agriculture and these advances increased to Rs.5537 crore with an absolute growth of Rs.1151 crore registering a growth rate of 26 % over the previous year.

SPECIAL AGRICULTURAL CREDIT PLAN (SACP)

Bank maintained credit flow to Agriculture achieving more than 100%. Bank has disbursed Rs.7271 crore under Special Agriculture Credit Plan (SACP) against the target of Rs.7055 crore, achieving 103% during the FY 2013-14.

KISAN CREDIT CARD (KCC)

During the year 2013-14, the total number of KCCs of the Bank increased by 19125 showing growth rate of 14%. As at March 2014, the credit outstanding under KCCs was Rs.4503 crore. As at March 2014, 99265 KCC holders have been provided with ATM enabled ''RuPay Kisan Debit Cards'' covering 86% of eligible KCC holders.

MICRO, SMALL & MEDIUM ENTERPRISES (MSMEs)

Micro, Small & Medium Enterprises is a thrust area of the Bank in credit dispensation. Advances to MSME sector increased by Rs.3996 crore registering a growth rate of 40% in 2013-14 and stood at Rs.14108 crore as on 31.03.2014.

WELFARE OF MINIORITY COMMUNITY

As at March 2014, advances to specified minority communities aggregated to Rs.6737 crore, registering a growth of 18% and accounting for 38% of the total priority sector advances against the stipulated level of 15%.

CREDIT TO WOMEN ENTREPRENEURS:

Bank''s credit to women entrepreneurs stood at Rs.2414 crore as on 31.03.2014 registering a growth of Rs.231 crore accounting for 5% of ANBC.

ADVANCES TO SC/ST BORROWERS

In support of the underprivileged sections of the society, the Bank''s advances to SC/ST beneficiaries reached Rs.357 crore as at March 2014 from Rs.327 Crore as at March-2013.

ADVANCES TO ECONOMICALLY WEAKER SECTIONS

Advances to weaker sections aggregated to Rs.5578 crore, with a y-o-y growth of 17%. Advances to weaker sections formed 11% of ANBC against the minimum norm of 10%.

Special thrust was laid by the Bank in financing weaker sections including SC/STs under various Government sponsored schemes namely Ajeevika under National Rural Livelihood Mission (NRLM), Rajiv Rinn Yojana, Swarna Jayanti Shahari Rojgar Yojana (SJSRY) and Prime Minister Employment Generation Programme (PMEGP).

CREDIT MONITORING

The Bank through its well-established Credit policy Department continues to give directions to its Advances Portfolios by preparing vibrant Loan Policy of the Bank and also monitor its Advances portfolio to maintain its quality and performance.

In order to have proper and effective monitoring to check fresh slippages and devise a strategy for their minimization, the department has started monitoring individual High Value Accounts at HO level.

Towards this end Bank has set up a control room at HO Credit Monitoring Department for monitoring of Credit Portfolio which is manned by a team of CAs and experienced officials. The team identifies emerging credit related issues in borrowable accounts and puts up the position before Top Management on daily basis for taking proactive corrective steps.

NEW INITIATIVES

Bank has opened 202 new branches during the year 2013-14 as against 101 new branches opened in last fiscal. Out of these, 72 branches were opened in unbanked rural centers including 40 Ultra Small Branches.

- To widen the spread of Electronic Delivery Channels, Bank installed 829 additional ATMs during the year. Total number of ATMs of the Bank as on 31.03.2014, stood at 1008 as compared to 179 as on 31.03.2013.

- Government Business Modules (PPF, NPS & SCSS) have been made operational.

- To facilitate customers, Bank has introduced 24*7 Call Center facility through Toll free number.

- Bank has launched Debit Card in tie up with Master Card during the year 2013-14.

- In order to outreach masses, Bank has opened 115 rural branches and recruited 37 Agriculture Field Officers in 2013-14 in addition to existing 97 Agriculture Field Officers.

- Bank has introduced new scheme for Financing Seed production and processing units and scheme for Financing of Agriculture Input dealers (Seeds, fertilizers, pesticides etc).

- As on 31.03.2014, Bank has 29 MSME branches as against 11 MSME branches as on 31.03.2013.

- To give boost to MSE credit, Bank signed a MOU with CRISIL for credit rating of MSE units at concessional rate to have rationalized mechanism of rate of interest on MSME advances.

- There has been a quantum jump in lending under Priority Sector through special drives. An amount of Rs.3851 crore was disbursed in 43152 accounts under Priority Sector during the Special Drives / Mega Credit Campaign/ Core Credit plus campaign held from 1st September, 2013 to 31st March, 2014.

RRB SPONSORED BY THE BANK

Sutlej Gramin Bank, Bhatinda, the RRB sponsored by the Bank, covers six districts of Punjab viz. Bhatinda, Faridkot, Mansa, Muktsar, Moga and Ludhiana and is in profit since its inception. The progress made by the RRB in various parameters is as under:

(Amount in Crore)

Parameter 31.3.2013 31.03.2014

Deposits 264.73 306.46

Advances 203.56 256.14

Priority Sector Advances 194.81 198.23

Agriculture Advances 175.28 181.79

Net Profit 1.55 2.36

LEAD BANK RESPONSIBILITY/SETTING UP OF FINANCIAL LITERACY AND CREDIT COUNSELLING CENTRES (FLCCs)

Bank has lead bank responsibilities in 3 districts of Punjab viz., Moga, Faridkot and Ludhiana. Pursuant to the directions of Reserve Bank of India, Bank has set up FLCCs in the name of "PSB Suvidha Centres" in all three lead

districts to impart free Financial Literacy/Credit Counseling Services to the needy persons to help them avail financial services from Banking system and also to provide counseling services to those who are under fnancial distress due to debt burden.

CONTRIBUTION TO RURAL DEVELOPMENT

''PSB Trust for Development of Agriculture and Rural Employment ''(PSB Trust for DARE) has been established with the objectives of setting up training institutes for imparting trainings to farmers and for capacity building of the rural youth/women/economically weaker sections and also organizing tractor maintenance, animal welfare camps etc. through Rural Development Centers.

As per initiative of Ministry of Rural Development (MoRD), Govt. of India, Bank under the aegis of ''PSB Trust for Development of Agriculture and Rural Employment has established ''Rural Self Employment Training Institutes

(RSETIs)'' in three of its lead districts Moga, Faridkot and Ludhiana in Punjab to promote entrepreneurship development among rural youth and encourage them taking up self-employment activities. The operational expenditures, salary to support staff and infrastructure facility of these RSETIs are fully met by Trust for Development of Agriculture and Rural Employment (DARE). During 2013-14, these training institutes have trained 1410 unemployed candidates, taking the tally to 4729 trained youths since inception.

As per MoRD guidelines, Government of Punjab allotted land for setting up Rural Self Employment Training Institutes (RSETIs). With the financial assistance of MoRD/Bank''s CSR fund assistance, the construction of RSETI Building at Moga is completed. The construction work at Faridkot is in full swing and at Ludhiana the work is under progress.

FINANCIAL INCLUSION

Financial Inclusion is not only a process but a Mission for the Bank to empower deprived and underserved sections of the population and the endeavor of the bank has been to connect these people with the banking system i.e. "inclusion of the excluded" and make them a productive asset of the society. Key initiatives of the bank are as under:

- Bank has been allotted 400 unbanked villages with population above 2000 and 2316 unbanked villages with population below 2000. These villages have been covered by the bank either by opening regular Brick and Mortar Branches or through Information Communication Technology (ICT) based Business Correspondent (BC) model. As on 31.03.2014, out of the 400 villages with population above 2000, 359 villages have been covered by deployment of BCAs and enrolment have already been started, 38 villages have been covered by opening Rural Branches. Out of 2316 villages with population less than 2000, 334 villages have been covered by deployment of 193 BCAs.

- Bank has planned to open 120 USBs over a period of 3 years i.e. 40 each in 2013-14, 2014-15 and 2015- 16. Bank has achieved the 2013-14 targets for opening of 40 USBs. These branches have been opened on CBS platform of the bank and are managed by permanent staff of the bank.

- FI Gateway has been successfully implemented and Bank has made Ist CSC Kiosk live on 31.01.2014 at Kurali (Punjab).

- During the year, Bank has opened 65,000 additional No-Frill Accounts through BCs and total No-frill accounts opened up to March 2014 are 1.45 Lacs with total outstanding of Rs. 0.26 crore. The Cumulative figure of No Frill Account is 10.86 Lac with total outstanding of Rs.61.84 Crore.

- Bank has issued 154570 KCCs with a total outstanding of Rs. 4503.31 crore.

- Bank has provided Over Draft facility of Rs. 500/- per account availed in 2.88 lacs No-frill Accounts with overdraft amount of Rs. 12.72 crore.

All FI accounts have been migrated to CBS Server and total system has since been operationalised.

IMPLEMENTATION OF DIRECT CASH TRANSFER (DCT) & DBTL

- In terms of the directions of Ministry of Finance, Direct Cash Transfer (DCT) has been implemented in 43 districts in a phased manner w.e.f. 01.01.2013 and has been extended to 78 more districts in Phase II w.e.f. 01.07.2013. The DCT Scheme is already implemented in 121 districts.

- The DBTL scheme for LPG beneficiaries has already been implemented in 289 districts and it will be rolled out in rest of the country in phased manner. Our Bank has a lead role in District Ludhiana, Faridkot and Moga. Bank is in the process of seeding Aadhaar number of LPG beneficiaries in their Bank accounts. District wise details of number of beneficiaries and Aadhaar seeding as on 31st March2014 is appended below :

Name of District Total beneficiaries Aadhaar seeded by OMCs Aadhaar seeded by bank

Faridkot 116811 88853 (76.07%) 82116 (70.30%)

Ludhiana 958241 647610 (67.58%) 554230 (57.84%)

Moga 181195 89654 (49.48%) 63981 (35.31%)

RETAIL MARKETING

The Bank aggressively pursued Retail Lending through liberalization of policy for products under the Retail segment, rationalized the interest rates to make the products most competitive in the market and undertook specific marketing initiatives to provide depth to the Loan book of the Bank.

Further, Special Festival Bonanza Scheme was launched for providing Housing Loan, Auto Loan and Consumer Loan to existing and new customers. New innovative Retail products were also launched during the year. The growth in fresh Retail lending was above 6% over previous year.

The percentage of Retail loans to gross advances was 6.91% as on 31-03-14.

Further, the Bank participated in the booking schemes launched by various Housing Development Authorities of State Governments for financing of the earnest money.

The Bank has introduced a facility of online submission of application form by prospective borrowers for Retail Loans with a facility to track the status online.

The Bank also initiated the process for entering into MOU with major commercial and passenger car manufactures to boost Auto lending.

ASSETS QUALITY

The Bank continued to make concerted efforts to contain NPAs and has used all available tools of recovery including negotiated settlements and legal means. The provisions of "The Securitization & Reconstruction of Financial Assets & Enforcement of Security Interest Act – 2002" were used effectively. The Bank also organized Recovery Camps during the year at various centers. During the year, two short term schemes for settlement of NPAs were formulated under Agriculture Sector and unsecured T.W.O accounts apart from Bank''s Recovery Management Policy. In all 1554 cases were settled at Rs.85.87 Crore.

The performance of the Bank under recovery of NPAs during the year continued to be good. The aggressive and focused efforts could result in the total recovery of over Rs.493.72 Crore including recovery of Rs.95.21 crore in Technically Written Off accounts.

However, despite higher slippage, the gross and net NPAs as on 31.03.2014 have been contained at Rs.2553.52 crore and Rs.1918.60 crore as against Rs. 1536.90 crore and Rs. 1110.38 crore as on 31.03.2013 respectively.

The position of Gross and Net NPAs as on 31.03.2014 vis-à-vis previous year is as under:

(Amount in crore)

NPA As on 31.03.2013 As on 31.03.2014

GROSS 1536.90 2.96% 2553.52 4.41%

NET 1110.38 2.16% 1918.60 3.35%

The Provisioning Coverage Ratio of the Bank (including T.W.O a/cs), as on 31.03.2014 stood at 45.51%.

INVESTMENT & FOREIGN EXCHANGE

The Bank''s total investment increased by 25.48% during current financial year to Rs.28346.61 crore with a portfolio composition consistent with the corporate requirement, risk perception and investment policy of the Bank.

The profit on sale of securities for the year increased from Rs. 62.98 crore for year ended March 2013 to Rs. 125.37 crore for the year ended 31.03.2014 on account of trading activities in G-sec and Non-SLR securities.

Exchange profit in Forex transactions for the year 2013-14 was Rs 26.91crores (Forex Treasury).

RISK MANAGEMENT

The Bank has put in place a robust and integrated Risk Management system to ensure that the risks assumed by the Bank are within the defined risk appetites and are adequately monitored. The overall responsibility of setting the Bank''s risk appetite and effective risk management rests with the Board and apex level management of the Bank. The implementation of Integrated Risk Management System in the Bank is monitored by HO Risk Management Department (RMD) which is headed by General Manager.

Risk is managed through following Apex committees viz.

- Risk Management Committee (RMC)- a Board level Committee

- Credit Risk Management Committee (CRMC)

- Asset and Liabilities Management Committee (ALCO)

- Operational Risk Management Committee (ORMC) and

- Capital Planning Committee as per ICAAP

These committees work within the overall guidelines and policies approved by the Risk Management Committee (RMC) / Board.

POLICY FRAMEWORK

The Bank has Board approved policies and procedures in place to measure, manage and control various risks that the Bank is exposed to.

Integrated Risk Management Policy has been formulated with the objective of analyzing the overall risk profile of the bank and to integrate all the risks of the Bank. The other important risk policies comprise of Asset-Liability Management (ALM) Policy, Investment Policy, Loan Policy, Risk Based Internal Audit (RBIA), Credit Audit, Country Risk Management Policy, Derivatives Policy, Operational Risk Management Policy, Business Continuity Planning (BCP) & Disaster Recovery Management (DRM) Policy, Stress Testing Policy, Policy on Utilization of Credit Risk Mitigation, ICAAP Policy. The policies are reviewed annually by the RMC / Board.

BANK''S COMPLIANCE WITH BASEL-II

In terms of Regulatory Guidelines of Reserve Bank of India, the Bank has adopted the New Capital Adequacy Framework w.e.f. 31.03.2009. Based on Basel II norms, the Bank has adopted Standardized Approach for Credit Risk, Modified Duration approach for Market Risk and Basic Indicator approach for Operational Risk for computing the capital charge. The Bank has also implemented Basel III Guidelines and has started computing CRAR w.e.f. June 2013. The CRAR position of the Bank is reviewed by the Board on a quarterly basis. Bank is geared for moving towards advanced approaches under BASEL II as suggested by RBI. Bank has also appointed a Consultant for setting up Enterprise Wide Integrated Risk Management System (EIRMS) in the Bank for moving to Advance approaches of Basel II and implementation of Basel III Guidelines.

ICAAP POLICY

In compliance with the Reserve Bank of India guidelines on Basel II & Basel III - Pillar 2- Supervisory Review and Evaluation Process (SREP), the Internal Capital Adequacy Assessment Process (ICAAP) Policy has been formulated to assess the capital requirement commensurate with the size, level of complexity, risk profile and scope of operations of the Bank. Various residual risks are assessed and additional capital is provided for wherever required. The capital adequacy of the Bank is assessed based on the analysis of current and projected financial/capital position as well as the headroom available.

Stress Testing exercises are also undertaken to assess the likely impact of various stress situations in relation to capacity of Bank''s profitability to absorb the shock and consequent impact on Bank''s capital. The ICAAP outcome is prepared on half yearly basis and is reviewed by RMC.

DISCLOSURE

In compliance with the Reserve Bank of India guidelines on Basel II & Basel III - Pillar 3 - Market Discipline, the Bank has put in place a Disclosure Policy duly approved by the Board and the disclosures on quarterly / Half yearly / Annual basis, as per the policy, are displayed on the Bank''s Website / Annual Report.

CREDIT RISK

Credit risk management processes involve identification, measurement, monitoring and control of credit exposures. Credit risk and its policy formulation is managed by Credit Risk Management Committee (CRMC). The Committee regularly monitors prudential caps in different loan segments including industry, corporate, retail and individual/ group borrowers.

Comprehensive credit rating framework comprising of Credit Risk Rating Models for Corporate and Retail Loans, pricing of loans linked to risk assessment and credit rating, study & analysis of industries/portfolio, migration of credit ratings is undertaken.

MARKET RISK

The Bank''s portfolio is exposed to Market Risk on account of change of Interest rates and Currency rates.

The Asset and Liabilities Management Committee (ALCO) is overseeing the functions relating to market risk. The Bank has put in place a variety of market risk measurement systems and tools including a Mid office in Treasury Department. Strict adherence to various limits and proper escalation of breaches, if any, are followed.

The Liquidity Management Framework is well established, which safeguards the ability of the Bank to meet all payment obligations when they become due. It is designed to identify measure and manage the liquidity risk position of the Bank.

The Bank is computing the Market Risk Capital charge as per the Modified Duration approach, by using Modified duration method, as per the guidelines received from the regulator. The Bank also calculates Value at Risk (VaR) on its foreign exchange portfolio at prescribed intervals.

The Bank periodically undertakes stress test exercise to highlight the potential risks, on account of liquidity and Interest rate risk that may arise due to events that are rare but conceivable. The impacts of shock on account of different risk factors that may generate worst case scenario are studied and to counter the impact possible solutions are derived.

OPERATIONAL RISK

The Operational Risk Management Committee (ORMC) oversees on matters relating to risks associated with operations and ensures the continuity / restoration of business in the event of contingency / exigencies. Presently, capital charge on operational risk is calculated as per Basic Indicator Approach. The Bank is in the process of strengthening its ORM Framework & ORM systems to migrate to advance approaches for calculation of Operational Risk Capital.

Bank has posted Risk Managers in all the Zonal Offices and also at Top 10 branches for ensuring compliance of Basel norms at the operating level and with the aim of conservation and optimum use of capital.

HUMAN RESOURCE DEVELOPMENT

The cadre wise staff strength as on 31.03.2014 is as under:-

Category 31st March 2013 31st March 2014

Officers 5932 6062

Clerks 1640 2029

Sub-staff 961 779

Total 8533 8870

WOMEN IN EMPLOYMENT:- Out of the total strength of 8870 as on 31.03.2014, the women employees are 1738 constituting 19.60% of the total strength.

EMPLOYMENT TO RESERVED CATEGORY EMPLOYEES:- Bank is committed to the constitutional safeguard and social objectives for the development and welfare of persons belonging to SC, ST and other backward classes of the society. The Bank observes all guidelines stipulated by the Govt. of India in respect of Reservation Policy for reservation of Posts in all India and local recruitments.

A special SC/ST cell has been set up in the Bank to monitor the Reservation and other provisions for SC/ST employees. An executive at the rank of General Manager has been designated as Chief Liaison Officer for SC/ST employees who ensures compliance of various guidelines pertaining to SC/ST employees and takes care of all matters of grievance redressal of SC/ST employees of the Bank.

The staff strength of SC/ST employees stood at 1382 and 436 respectively on 31.03.2014. The staff strength under

various reserved categories viz OBC/EX-SM/PH is as under:-

CATEGORY SC ST OBC EX-SM PH

OFFICERS 813 348 692 43 71

CLERKS 342 60 334 121 44

SUB-STAFF 227 28 32 173 15

TOTAL 1382 436 1058 337 130

FINANCIAL ASSISTAN CE TO THE DEPENDENTS OF DECEASED EMPLOYEES

During the Financial year 2013-14 the Bank made total payment of Rs.55,06,108/- in 9 cases received from the dependants of the deceased employees under the scheme for the payment of ex-Gratia in lieu of appointment on compassionate grounds.

PROMOTIONS

Bank is regularly promoting employees almost in all cadres year after year to keep rewarding its top performers and make them assume higher responsibilities. Special drive was made during the year under review to fulfill the growing aspirations of the employees for fast career progression thereby motivating employees for higher productivity.

Following promotions have been effected during the year:

Promotions from DGM to GM AGM to CM to DGM AGM SRM to CM MGR to SRM OFFICER Total to MGR

General 6 5 3 95 59 128 296

Specialist - - 1 4 2 5 12

Total 6 5 4 99 61 133 308

TRAINING

Training is an integral part of Human Resource development. In the current competitive environment in the Banking Industry, it is all the more important to keep the staff abreast of the latest developments in technology, system and procedures, legal aspects etc., especially amongst the peers.

The training programs organized by the Bank are focused towards integrating the new recruits into the Bank and in enhancing the skills, knowledge and for reorienting the attitude of its existing work force to achieve the organizational objectives.

The Bank endeavored to provide training to 50% of its employees during the Financial Year 2013-14. With this in view, 236 programmes were conducted by PSB Centre for Banking Research & Training at Chandigarh in General Banking & Computer related programmes at NIBSCOM, NOIDA in various fields from 1st April 2013 to 31st March 2014, in which training was imparted to 4654 employees of different cadres.

7 Special Training Programmes were conducted at NIBSCOM on Credit Appraisal, Foreign Exchange and Security Workshop in which 219 officials were imparted training.

Besides 213 officers were also imparted training at Apex Level. Bank also deputed four officials in various cadres for overseas trainings.

INDUSTRIAL RELATIONS:- The industrial relations in the Bank remained cordial throughout the year. The representatives from Workers and Officers unions participated in various discussions on developmental and other issues with the management at various levels and efforts were made to resolve the same.

DIRECT RECRUITMENT:- The Bank launched a special recruitment drive to cater to the challenges of superannuation, sustained business growth and rapid branch expansion in the FY 2013-14. Recruitment of both the Specialist Officers and Probationary Officers was done to address the diverse manpower requirement of the Bank.

During the year, 1 Chief Security Officer in Scale -V, 3 CAs in Scale -III, 22 CAs in Scale II, 8 Law Officers in Scale -II,772 Probationary Officers, 38 AFO in Scale -I, 10 HR/IR Officers in Scale I and 495 Single Window Operators-A in Clerical cadre have joined the Bank under Bank''s Recruitment Projects.

STAFF WELFARE

In order to motivate and encourage the staff for effective participation in development activities, the Bank is maintaining various welfare schemes for the staff.

During 2013-14, Bank introduced new schemes for the welfare of staff. Also improvement / betterment in the existing schemes of Housing Loans, Mediclaim Policy for retired employees etc. have been made for the welfare of staff.

INFORMATION TECHNOLOGY

- As on 31.03.14, all 1330 branches of the Bank are on Core Banking Solution.

- Bank has implemented Anti Money Laundering Solution which facilitates generation of Cash Transaction Report (CTR), Suspicious Transaction Reports (STR) and Non-profit Transaction Report (NTR).

- Cheque Truncation System has been implemented across the country and bank is participating in all the grids i.e. Southern, Western and Northern Grids.

- Biometric based Authentication for employees'' login into CBS application has been introduced to prevent the incidence of frauds taking place on account of password theft/sharing of password. As on 31.03.2014, rollout in 445 branches has been completed. Rollout in the remaining branches shall be completed by June 2014.

- Video Conferencing Facility has been extended to 74 centers, which includes Head Office, Zonal Offices and top Business Branches.

INTERNAL CONTROL

The Internal control function like many other functions of the management is carried out in the Bank through a well- established Inspection & Audit Dept.(IAD), which ensures examination & verification of adherence to systems, policies and procedures of the Bank. The IAD constantly aims at checking the inherent risks through its effective control mechanism, enforced through five Zonal Inspectorates, to protect Bank''s interest and endeavors to prevent frauds by conducting RBIA and Inspection of branches/ offices as per risk prioritised Annual Audit Plan (AAP) approved by the Audit Committee of the Bank.

The Audit Committee of the Board (ACB) oversees the internal Audit function of the Bank for improving the efficiency of systemic controls. The ACB, which met 8 times during FY 2013-14, also monitors the functioning of the Audit Committee of Executives (ACE), which is a first tier Committee to oversee Inspection and Audit function in the bank.

During FY 2013-14, Risk Based Internal Audit was conducted in 876 branches of the Bank; 496 branches were brought under Concurrent Audit System; the Information System audit was conducted in 288 branches; Post migration audit was conducted in 600 branches, and Zonal Offices and Departments at Head Office have been subjected to Management Audit & Inspection.

The Inspection and Audit Department is also assigned the responsibility of monitoring redressal of the customer grievances/ complaints. The Bank has implemented Standardized Public Grievances Redressal System (SPGRS), a web-based customer complaint redressal module. During FY 2013-14, 1810 complaints were received, of which 1775 complaints have been disposed off. The Banking Ombudsman passed 5 awards against the Bank out of which against 2 awards bank has gone into appeal.

During the year, the Inspection and Audit Department formulated ''Risk Based Internal Audit Policy'' and revised & devised computer aided reporting formats of Risk Based Internal Audit & Concurrent Audit.

To summarize, Bank''s Inspection and Audit Dept. has been effectively monitoring the compliance of systems and procedures laid down by Board, the Regulator and the Government of India.

COMPLIANCE FUNCTION

During the financial year 2013-14, Bank reviewed the Compliance-policy. Compliance Manuals of Zonal Offices and various HO Departments were drafted /updated during the year. Functional Manual of the bank has also been placed on the Intranet site of the bank.

Bank complied with the various guidelines issued by the RBI on Compliance functions. The Compliance Department ensures that the functioning of Zonal Offices, Branches and Departments is synchronized with their Functional Manuals. Annual Compliance Audits of branches/offices are conducted at regular intervals.

PR and PUBLICITY

During the financial year 2013-14, the Bank adopted a multi-media strategy to build up its image in Public and at the corporate level and accordingly publicity was made through the print media by release of its product, tender, financial and other display/notice ads in different newspapers, magazines and souvenirs targeting various audiences all over the country.

Bank also used effective outdoor media signifying display of Balloon at Chandigarh and Amritsar Airports. Bank''s banners, hoardings displayed on events of high publicity value facilitated extension of outreach of the Bank.

Bank also received immense publicity through Bank''s Wall Calendar & Table Calendar 2014 which was widely distributed among clients and well wishers of Bank.

Bank got huge publicity by way of coverage of its press releases by the print media.

All these activities facilitated the Bank to rededicate itself to the service of the Nation and enabled it to earn a well deserved mileage on the publicity front.

VIGILANCE PREVENTIVE VIGILANCE

During the year, the Vigilance Department has taken number of initiatives on Preventive as well as on Punitive Vigilance to strengthen the vigilance administration and also to instill compliance culture within the organization.

To educate staff across the organization to work with utmost sincerity, honesty and uniformity in a most transparent manner and to spread awareness about stronger compliance culture and strengthening vigilance administration, series of programmes, conferences and workshops were organized. These programmes were participated by senior officials of the Bank and also presided over by the Top officials of the Central Vigilance Commission and CBI.

VALUE ADDITION TO THE ORGANIZATION

In line with this year''s theme observing Vigilance Awareness Week by Hon''ble CVC "Promoting Good Governance – Positive Contribution of Vigilance" and on the basis of information received from various sources, quarters regarding Revenue Leakages in Big Borrowal Accounts, Bank started a special drive under the name "Mission Compliance" i.e. checking of the compliance of terms and conditions of sanction in big borrowal accounts on sample basis.

OBSERVANCE OF VIGILANCE AWARENESS WEEK FROM 28.10.2013 TO 02.11.2013

As desired by Hon''ble Commission, the Bank undertook number of initiatives during "Vigilance Awareness Week" w.e.f. 28.10.2013 to 02.11.2013 for observing the same in a befitting manner. Besides, a programme for all the senior functionaries of Delhi based Zones was also organized. The programme was inaugurated by Vigilance Commissioner, Central Vigilance Commission.

SECURITY ARRANMGEENT

The Bank has a well established Security set-up within the Bank''s organizational structure. Security department of the Bank has been regularly reviewing the security arrangements at all Currency Chests and branches and accordingly strengthening the security arrangements to meet prevailing security scenario with effective, modern and unobstructed Security Systems. All the essential and mandatory security arrangements in terms of RBI/ IBA guidelines are provided at most of the branches.

The Zonal Security Officers periodically carry-out Security audit of branches to assess the security arrangements in vogue and recommend implementation of additional preventive security measures wherever desired. They maintain close liaison with the law enforcing and administrative authorities. Besides, the Chief Security Officer, other offcials from Head Office are also carrying out the security audit of the Currency Chests and also undertake random visits of the vulnerable branches of the Bank.

The Access Control System at all Banks'' Currency Chests has been strengthened in terms of RBI guidelines. Security Alarm Systems are installed at all branches and currency chests.

All the branches of Bank are provided armed guards and all the cash remittances are escorted by armed guard. Training, including fringe practice, for Armed Guards deployed at currency chests / branches is imparted on an annual basis. Also, all the security officers undergo refresher training on security once in a year.

CCTV Surveillance System has been installed at all the Currency chest branches and 237 identified High Risk and vulnerable branches in the first phase, keeping in view the threat perception, volume of cash and valuables handled and need for continuous surveillance. CCTV systems shall be installed at remaining branches in a phased manner.

IMPLEMENTATION OF OFFICIAL LANGUAGE

During the financial year 2013-14, Bank made significant progress in implementation of Official Language Policy for promoting and propagating the use of Official Language in the Bank. During the year 2013-14, a total of 84 workshops were organized, in which 1039 personnel were trained. Besides, 3203 personnel were trained during 705 Hindi Desk Training Programmes and 286 personnel were imparted training for using Unicode on Computers. With the aim of reviewing the progress of Official Language, inspections were conducted in 705 Branches/Offices.

This year ''Delhi Town Official Language Implementation Committee'' (TOLIC), awarded ''Consolation Prize'' to our Bank In-House Hindi Magazine ''Rajbhasha Ankur''. Apart from this five employees of our Bank won eight prizes in various competitions organized by different banks under the auspices of Delhi Bank TOLIC.

SPORTS

The Bank has a Sports Academy which nurtures Bank''s Hockey Team at National Level, besides Hockey Academy for age group of 15-18 years. During the year, Bank''s Hockey Team won the following three National Tournaments:

- All India Gurmit Hockey Tournament

- All India Surjit Hockey Tournament

- All India Nehru Hockey Tournament

The Bank''s Hockey Academy also brought laurels to the Bank by winning All India Level Tournaments.

The following players of the Bank''s Hockey Team and Hockey Academy have represented Indian Hockey Team in various International Tournaments during the year 2013-14:

Sh. Harbir Singh Sh. Harjot Singh Sh. Satbir Singh Sh. Ramandeep Singh

Sh. Gurmail Singh Sh. Prabhdeep Singh Sh. Talwinder Singh

Sh. Baljit Singh Saini Olyampian was appopinted as coach of the Indian Hockey Team and

Sh. Rajinder Singh Olyampian was appointed as coach of Indian University Team.

In addition to the above said achievements, the officials attached with Bank''s Hockey Team have also worked for the deposit mobilization during this financial year.

RECONCILIATION

Total outstanding in Inter Bank Reconciliation (IBR) & Demand Draft as on 31.03.2014 has been reduced by 99% from the level as on 31-03-2013.

GENERAL ADMINISTRATION

Various building projects viz Staff Training College, Delhi, Fort Mumbai, Gurgaon, Noida etc. are in progress and are likely to be completed this year. During the year, Bank has gone for revaluation of Bank owned properties after a gap of three years.

CONSTITUTION OF BOARD OF DIRECTORS

As on 31st March 2014, the Board comprised of three Whole time Directors viz Chairman & Managing Director and two Executive Directors besides ten other Directors including representatives from Ministry of Finance, Reserve Bank of India, Non Official Director (Chartered Accountant Category), two Share Holders Directors and five Part Time Non Official Directors.

Various Committees constituted under the Board as listed below, oversee the functioning and control the affairs of the bank:

- Management Committee

- Audit Committee

- Risk Management Committee

- Committee for Monitoring of Large Value Frauds

- Vigilance Committee

- Customer Service Committee

- Shareholders''/Investors Grievance Committee

- IT Strategy Committee

- Nomination Committee

- HR Committee

- Appellate Committee

- Remuneration Committee

- Committee of Directors on Executives'' Promotion

- Committee for Monitoring of Recovery

- Concurrent Audit Committee

During the year 2013-14, sixteen meetings of the Board of Directors, twenty one meetings of the Management Committee and eight meetings of the Audit Committee of the Board were held besides meetings of other Committees of the Board.

The constitution of Bank''s Board of Directors underwent following changes during the year 2013-14:

INCLUSIONS

- Sh. Pradipta K Jena was nominated as RBI Nominee Director of the Bank vide Government of India, Ministry of Finance, Department of Financial Services, New Delhi Notification No.F. No. 6/34/2013-BO.1 dated 31.05.2013.

- Sh. Kishore Kumar Sansi was appointed as Executive Director of Punjab & Sind Bank, vide Government of India, Ministry of Finance, Department of Financial Services, New Delhi Notification No.F.No. 4/5/2012- BO.1 dated 05.08.2013.

- Sh. Mukesh Kumar Jain was appointed as Executive Director of Punjab & Sind Bank, vide Government of India, Ministry of Finance, Department of Financial Services, New Delhi Notification No.F.No. 4/5/2012- BO.1 dated 05.08.2013.

- Sh. Sanjay Verma was nominated as Non-official Director of the Bank vide Government of India, Ministry of Finance, Department of Financial Services, New Delhi Notification No.F.No. 6/16/2011-BO.1 dated 12.08.2013.

- Sh. S C Das was nominated as Ministry of Finance Nominee Director of the Bank vide Government of India, Ministry of Finance, Department of Financial Services, New Delhi Notification No.F.No. 6/3/2012- BO.1 dated 22.10.2013.

- Smt. Anita Karnavar was nominated as Non-official Director of the Bank vide Government of India, Ministry of Finance, Department of Financial Services, New Delhi Notification No.F.No. 6/56/2013-BO.1 dated 30.01.2014.

- Sh. Jatinderbir Singh-IAS was appointed as Chairman & Managing Director of Punjab & Sind Bank vide Government

of India, Ministry of Finance, Department of Financial Services, New Delhi Notification No.F.No. 4/7/2013-BO.1 dated 31.01.2014.

CESSATIONS

Sh. Devinder Pal Singh, Chairman & Managing Director attained the age of superannuation and thus retired on 31.01.2014.

Sh. Rajat Sachar, MOF Nominee Director was on the Board of the Bank up to 21.10.2013.

Sh. Karanpal Singh Sekhon completed his term as Non-Official Director on the Board of the Bank on 04.07.2013.

Sh. B P Kanungo, RBI Nominee Director was on the Board of the Bank up to 30.05.2013.

Sh. P K Anand, Executive Director attained the age of superannuation and thus retired from the service of the bank on 31.05.2013.

CORPORATE GOVERNANCE

The Bank is committed to good Corporate Governance and is constantly striving to further strengthen the same to ensure greater transparency and better coordination at all levels in the Organization. The working of the Bank reflects transparent ownership structure, improved risk management practices, well defined delegation of powers, accountability and an elaborate audit function carried out by both its Inspection & Audit Division and by independent Statutory Central Auditors.

Bank has complied with the guidelines of RBI and SEBI on the matters relating to Corporate Governance which have been examined by the Statutory Central Auditors.

DIRECTORS'' RESPONSIBILITY STATEMENTS

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

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

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

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

- 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 going concern basis.

STATUTORY AUDIT

As approved by Reserve Bank of India, Bank has appointed M/s.R.M.Lall & Co., Lucknow, M/s.O.P Tulsyan & Co, New Delhi; M/s B K Shroff & Co., Kolkata; and M/s R Kothari & Co., Kolkata as Statutory Central Auditors for the accounting year ended March 2014.

ACKNOWLEDGEMENTS

The Board of Directors of the Bank thanks valued customers, shareholders, well-wishers and correspondents of the Bank in India and abroad for their goodwill, patronage and continued support.

The Directors also acknowledge with gratitude the valuable and timely advice, guidance and support received from Government of India, Reserve Bank of India, Securities and Exchange Board of India (SEBI), Stock Exchanges, various State Governments, Financial Institutions and the Statutory Central Auditors of the Bank in the functioning of the Bank.

The Directors place on record their deep appreciation for the valuable contribution of the members of the staff at all levels for the progress of the Bank during the year and look forward to their continued co-operation in realization of the Corporate goals in years ahead.

For and on behalf of Board of Directors

Sd/-

Place: New Delhi (Jatinderbir Singh)

Dated:10.05.2014 Chairman &

Managing Director


Mar 31, 2011

The Board of Directors has pleasure in presenting Annual report of the Bank alongwith with the Balance Sheet & profit and loss Account for the year ended 31st March, 2011.

ECONOMIC SCENARIO

In a globalized world with its share of uncertainties and rapid changes, this year brought some opportunities and challenges as India moved ahead with steady steps on the chosen path of fiscal consolidation and higher economic growth.

Indias growth in 2010-11 has been swift and broad based. the economy is back to its pre-crisis growth trajectory. While agriculture has shown a rebound, industry regained its earlier momentum. Service sector continued its near double digit growth. Fiscal consolidation was impressive. the year also saw some significant progress in those critical institutional reforms that would set the pace for double digit growth in the near future.

The GDP of India is estimated to have shown growth at the rate of 8.6 per cent in the real terms in 2010- 11. Agriculture/Industry/Service Sector is estimated to have grown at the rate of 5.4 per cent, 7.8 per cent and 9.6 per cent respectively. the economy has thus shown remarkable resilience to both external and domestic shocks.

The developments in the external sector during the current year have been encouraging & trade performance has improved. exports have grown at the rate of 29.4 per cent to reach USD 184.6 billion while imports at USD 273.6 billion have recorded a growth of 17.60 per cent during April to January 2010-11 over the corresponding period last year. the current account deficit is around 2009-10 level and poses some concerns because of composition of its financing.

The money supply (M3) growth at 15.9 per cent (year- on-year) during 2010-11 was lower than the reserve Banks indicative trajectory of 17 per cent due to slow deposit growth and acceleration in currency growth. the higher currency demand slowed the money multiplier. Consequently, M3 growth slowed despite a significant increase in reserve money.

The Base rate system replaced the Benchmark prime lending rate system (Bplr) with effect from July 1, 2010. the Base rates of 67 banks, with a share of 98 per cent in the total bank credit, were in the range of 7.5-9.5 per cent.

During the year 2010-11, credit growth which was earlier driven by infrastructure sector became increasingly broad based across sectors and industries evidencing growth momentum and demand pressures. Credit flow to services sector increased significantly for transport operators, tourism, hotel and restaurant and commercial real estate besides retail, housing and personal loans.

Under the present economic Scenario, Bank registered the deposit growth of 21.50% & Credit Growth of 30.83%. the detail of the Banks performance is illustrated hereunder:

BANKS PERFORMANCE - 2010-11

TOTAL BUSINESS

During the year ended 31.03.2011, total gross Business of the Bank recorded an increase of 25.23% at Rs.1,02,556 crore as compared to Rs.81,894 crore as on 31.03.2010.

PROFIT

The Bank has posted 3.41% growth in net profit to Rs. 526.17 crore from Rs.508.80 crore during 2009-10. operating profit of the Bank increased by 15.49% at Rs.1013.50 crore in comparison to Rs. 877.57 crore in 2009-10.

DEPOSIT

The total deposit of the Bank registered a growth of 21.50% with net accretion of Rs.10,568 crore to reach Rs 59,723 crore as on March 31, 2011 from Rs.49,155 crore as on March 31, 2010. the average cost of deposits of the bank stood at 6.19% compared to 6.32% in previous year.

Highlights of Results For The Year Ended 31st March 2011

(Rs in lacs)

Year Ended %age 31.03.2011 31.03.2010 change

Interest Income 493251 393418 25.38

other Income 43708 41181 6.14

total Income 536959 434599 23.55

total expenditure 435610 346842 25.59

operating profit 101350 87757 15.49

net profit 52617 50880 3.41

ROA 0.90% 1.05% -

Net Interest 2.66% 2.45% - Margin (NIM)

Gross NPA% 0.99% 0.63% -

net NPA(%) 0.56% 0.36% -

Capital Adequacy 11.94% 11.74% - ratio (%)

Capital Adequacy 12.94% 13.10% - ratio(%) (Basel II)

EPS 26.40 26.98 -

CAPITAL & RESERVE

During the year the Bank issued 4,00,00,000 equity shares of Rs.10 each for cash at a price of Rs.120/- by way of Book Building process. the cutoff price was Rs.120/-, while retail investors and applicants under employees category were allowed discount of 5%. the Bank raised Rs.470.82 crore (including premium of Rs. 430.82 crore) which resulted in dilution of the Government of India share by 17.93% thus increasing the paid-up Capital of the Bank during the year to Rs.423.06 crore as detailed below:

(Amount in Rs. crore)

Particulars (31.03.2011) (31.03.2010)

equity Capital 223.06 183.06

perpetual Non- 200.00 200.00 cumulative preference Shares (PNCPS)

Total 423.06 383.06

The net Worth of the Bank has however improved from Rs.2128.23 crore as on 31.03.2010 to Rs. 3048.83 crore as on 31.03.2011.

The Capital Adequacy ratio (Basel II) of the Bank is 12.94% as on 31.03.2011 against the minimum stipulated requirement of 9% with core CRAR at 8.35%.

ADVANCES

The Banks Advances increased by 30.83% from Rs.32,738.67 crore as on 31.03.2010 to Rs. 42,832.62 crore as on 31.03.2011. the average yield on Advances stood at 10.31% as on 31.03.2011 compared to 10.45% during the last year.

Letter of Credit and Bank Guarantee business of the bank also increased to Rs.3267.44 crore as on 31.03.2011 from Rs.2340.01 crore as on 31.03.2010 thereby registering growth of 39.63% during FY 2010-11.

The Bank has diversified portfolio of Advances. there was notable credit growth in exposure to preferred sectors like Housing, Micro & Small enterprises (MSE), educational institutions, Infrastructure and Industry.

The Bank, through its well laid down Credit Growth & Monitoring System, continues to closely monitor its advances portfolio to maintain its quality and performance. the Standard Advances portfolio continues to be above 99% of total Advances.

PRIORITY SECTOR ADVANCES

priority Sector advances of the Bank increased from Rs. 10753 crore as on 31.3.2010 to Rs. 13249 crore as on 31.3.2011 constituting 40.4% of Adjusted net Bank Credit. the Bank has thus achieved priority Sector target for the year 2010-11. thrust in poverty alleviation schemes has been the hallmark of the attainment of priority Sector.

Agriculture credit increased from Rs.5063 crore as on 31.3.2010 to Rs. 5993 crore as on 31.3.2011 constituting 18.3% of Adjusted net Bank Credit. Bank continued to provide credit to small & marginal farmers including tenant farmers and oral lessees at cheaper interest rate of 5% p.a.

SPECIAL AGRICULTURAL CREDIT PLAN (SACP)

the Bank maintained Credit Flow to Agriculture achieving more than 100% of the allocated target consistently over the past several years. this year, Bank disbursed Rs.5213 crore under Special Agriculture Credit plan against the target of Rs.4450 crore, achieving 117.15%. the performance for the last three years is as under:

(Amt. in crore)

2008-09 2009-10 2010-11

Yearly Achievement %age Yearly Achieve ment %age Yearly Achiev ement %age target/ Target Target

3015 3295 109.30% 3860 8355 216.46% 4450 5213 117.15%

During the year 2010-11 the Bank has disbursed Rs.5.58 crore to 506 Self Help Groups.

MICRO, SMALL & MEDIUM ENTERPRISES (MSMEs)

Micro Small & Medium enterprises sector is a thrust area of the Bank in its Credit policy. Advances to MSME sector increased by 17.8% during the year 2010-11 to Rs. 6900 crore against GOI stipulation of 20% Y-O-Y growth. MSME credit dispensation has increased with special focus on the asset quality and diversified growth in priority Sector.

ADVANCES TO SC/ST BORROWERS

Advances to SC/Sts rose to Rs.295 crore during the year 2010-11 against Rs.287.66 crore as on 31.3.2010 as a consequence of special focus thrust given by the Bank.

WELFARE OF MINORITY COMMUNITY/ WOMEN ENTREPRENEURS:

lending to Minority Communities was 28.51% of total advances as on 31.3.2011 against national target of 15% and advances to Women entrepreneurs stood at 4.91% of total advances against national target of 5%.

EDUCATION LOANS

Banks exposure for education loans has shown a consistent upward trend during last three years through:

- Interest concession of 0.50% on the applicable card rate on fresh education loan sanctioned to Girl students

- Web Based online education loan application system was put in place.

- Implementation of Central scheme to provide interest subsidy for the moratorium period of education loan availed by students from economically weaker sections.

(Rs. in crore)

No. of students Amount Periods financed Outstanding

2008-09 6717 179.15

2009-10 7209 204.22

2010-11 7444 218.35

RURAL SELF EMPLOYMENT TRAINING INSTITUTES (RSETIs)

- In accordance with the initiative of Ministry of rural Development, GOI, our Bank has established rural Self employment training Institutes (RSETIs) at Ludhiana, Moga and Faridkot districts of Punjab State.

- the Bank has provided buses in all three RSETIs to facilitate transportation of the trainees to the training college from the hinterland.

- Bank has Financial literacy Counseling Centers (FlCCs) in all the three lead districts of the Bank i.e. Moga, Faridkot and Ludhiana.

RRB SPONSORED BY THE BANK

Sutlej Gramin Bank, Bhatinda, the RRB sponsored by our Bank, covering six districts of Punjab namely Bhatinda, Faridkot, Mansa, Muktsar, Moga and Ludhiana, is in profit since inception. the RRB made consistent progress in various parameters as under -

(Rs. in crore)

31.03.2011 31.03.2010

Deposits 221.72 195.48

Total Advances 157.82 116.58

Priority Sector Advances 147.98 106.33

Agriculture Advances 128.35 90.27

Net profit 1.68 1.63

Net NPA 0.12% 0.40%

FINANCIAL INCLUSION

- Bank has prepared a Financial Inclusion plan (FIP) for covering 387 unbanked villages with population above 2000 by March 2012.

- It is planned to provide banking services in all the allocated villages through delivery channels viz.,

1. Opening of brick and mortar branches in 20 villages.

2. Through ICT based Smart Card Model by engaging BCs in 367 villages.

While expanding coverage of FIs, 200 villages have been provided with banking services in 2010-11.

No of villages S.No Banking Outlet covered

1. Brick and Mortar branches 10

2. Business Correspondents 190

3. No. of Smart cards issued 200

- 67821 Financial Inclusion accounts have been opened in the allotted unbanked villages with population above 2000 under FIP during the year 2010-11.

- 4.42 lacs Financial Inclusion accounts have been opened in the bank including allotted villages.

UIDAI PROJECT

the Bank has signed MOU with UIDAI for enrolment of AADHAAR. A pilot project was initiated in Head office wherein 1200 members of staff and their families were enrolled.

NEW INITIATIVES

- Scheme formulated for financing of construction of godowns for FCI for storage of food grains

- Scheme formulated for financing against pledge of ware-house receipts issued by ware-houses managed by national Bulk Handling Corporation ltd.

- Dairy entrepreneurship Development Scheme.

ASSET QUALITY

The Bank continued to make concerted efforts for recovery of NPAs during the year. the aggressive and focused efforts in recovery could result in the total recovery of over Rs.288.02 crore including recovery of Rs.115.66 crore in Written off Accounts.

The position of Gross and net NPAs as on 31.03.2011 vis-a-vis previous year is as under:

(Amt in Rs. crore)

NPA As on 31.03.2010 As on 31.03.2011

Gross 206.15 0.63% 424.28 0.99%

Net 116.63 0.36% 237.94 0.56%

The provisioning Coverage ratio of the Bank stood at healthy level of 81.82% as against 70% required by RBI.

INVESTMENT MANAGEMENT & FOREIGN EXCHANGE

The Banks gross total investment increased by 3.97% during current financial year to Rs.18701.28 crore, with a portfolio composition consistent with the corporate requirement, risk perception and Investment policy of the Bank.

The profit on Sale of Securities for the year was Rs.75.16 crore as against Rs.109.06 crore for the previous year, primarily on account of rising yields during the course of the current year. Further, the Bank was able to effect recovery of an aggregate amount of Rs.35.34 crore in the technically written-off cases of the Investment portfolio and the said amount has been appropriated towards the profits.

There has been an increase of Forex Merchant turnover by 10.28% despite the fact that major international markets have still to come out of global financial crisis. there has been increase of 36.31% in the exchange profit as compared to previous year.

During the year, Bank launched sale of gold coins from designated branches of the Bank. Gold coins in denominations of 5, 8 & 10 grams aggregating to 115.00 Kg. were imported from Switzerland, out of which coins weighing 108.00 Kg were sold up to 31.03.2011.

RISK MANAGEMENT

The Bank has put in place a robust and integrated risk Management system to ensure that the risks assumed by it are within the defined risk appetites and are adequately monitored. the overall responsibility of setting the Banks risk appetite and effective risk management rests with the Board and apex level management of the Bank. the implementation of Integrated risk Management System in the Bank is monitored by Ho risk Management Department (RMD) headed by Chief General Manager.

Risk is managed through following Apex committees viz.

1. risk Management Committee (RMC)- a board level subcommittee

2. Credit risk Management Committee (CRMC)

3. Asset and liabilities Management Committee (ALCO) and

4. Operational risk Management Committee (ORMC) these committees work within the overall guidelines and policies approved by the risk Management Committee (RMC) / Board.

POLICY FRAMEWORK

The Bank has Board approved policies and procedures in place to measure, manage and control various risks that the Bank is exposed to. Integrated risk Management policy has been formulated with the objective of analyzing the overall risk profile of the bank and to integrate all the risks of the Bank. the other important risk policies comprise of Asset-liability Management (ALM) policy, Investment policy, loan policy, risk Based Internal Audit (RBIA), Credit Audit, Country risk Management policy, Derivatives policy, operational risk Management policy, Business Continuity planning (BCP) & Disaster recovery Management (DRM) policy, Stress testing policy, policy on utilization of Credit risk Mitigation and ICAAp policy. the policies are reviewed annually by the RMC / Board.

BANKS COMPLIANCE WITH BASEL-II

In terms of regulatory Guidelines of reserve Bank of India, the Bank has adopted the new Capital Adequacy Framework w.e.f. 31.03.2009. Based on Basel II norms, the Bank has adopted Standardised Approach for Credit risk, Modified Duration Approach for Market risk and Basic Indicator Approach for operational risk for computing the capital charge. the Bank is computing the Capital to risk Weighted Assets ratio (CRAR) on parallel

basis under Basel-I and Basel-II guidelines. the CRAR position of the Bank is reviewed by the Board on a quarterly basis. Bank has geared up to maintain time schedule for moving towards advanced approaches under BASEL II, as suggested by RBI.

ICAAP POLICY

In compliance with the reserve Bank of India guidelines on Basel II – pillar 2- Supervisory review and evaluation process (SREP), the Internal Capital Adequacy Assessment process (ICAAP) policy has been formulated to assess the capital requirement commensurate with the size, level of complexity, risk profile and scope of operations of the Bank. Various residual risks are assessed and additional capital is provided for wherever required. the capital adequacy of the Bank is assessed based on the analysis of current and projected financial/capital position as well as the headroom available.

Stress testing exercises are also undertaken to assess the likely impact of various stress situations in relation to capacity of Banks profitability to absorb the shock and consequent impact on Banks capital.

DISCLOSURE

In compliance with the reserve Bank of India guidelines on Basel II – pillar 3 – Market Discipline, the Bank has put in place a Disclosure policy, duly approved by the Board and the disclosures on Quarterly / Half yearly / Annual basis as per the policy are displayed in the Banks Website / Annual report.

CREDIT RISK

Credit risk management processes involve identification, measurement, monitoring and control of credit exposures. Credit risk and its policy formulation is managed by Credit risk Management Committee (CRMC). It regularly monitors prudential caps in different loan segments including industry, corporate, retail and individual/group borrowers.

Comprehensive credit rating framework comprising of Credit risk rating Models for Corporate and retail loans, pricing of loans linked to risk assessment and credit rating, study & analysis of industries/portfolio and migration of credit ratings is undertaken.

Awareness of Basel II norms at the operating level is created and continuously enhanced to achieve the aim of conservation and optimum use of capital.

MARKET RISK

The Banks portfolio is exposed to market risk on account of changes in interest rates and currency rates.

In the bank, the Asset liability Committee (ALCO) is overseeing the functions relating to market risk. the Bank has put in place a variety of market risk measurement systems and tools. Strict adherence to various limits and proper escalation of breaches, if any, are followed.

The liquidity Management Framework is well established, which safeguards the ability of the Bank to meet all payment obligations when they become due. It is designed to identify, measure and manage the liquidity risk position of the Bank.

The Bank is computing the market risk capital charge as per the standardized approach, by using Modified Duration Method, as per the regulators guidelines. the Bank also calculates Value at risk (VaR) on its foreign exchange portfolio.

The Bank periodically undertakes stress test exercise to highlight the potential risks, on account of liquidity & interest rate risk that may arise due to events that are rare but plausible. the impact of shock to one risk factor that may generate worst case scenario is studied and to counter the impact, possible solutions are derived.

OPERATIONAL RISK

the operational risk Management Committee (ORMC) oversees matters relating to risks associated with operations and ensures the continuity / restoration of business in the event of contingency / exigencies. presently, capital charge on operational risk is calculated as per Basic Indicator Approach. the Bank has started the process of collecting loss Data for migration to advanced approaches to operational risk.

ORGANISATION & SUPPORT SERVICE

With opening of 47 new branches and one currency chest during the year, the Bank has pan India presence with 965 branches and 12 currency chests as on 31.03. 2011.

The Central pension processing Center, established at Head office has been operationalized w.e.f. 01.12.2010 and disbursement of pension to Central Civil pensioners has since been started.

HUMAN RESOURCE MANAGEMENT TRAINING & HUMAN RESOURCES DEVELOPMENT

Training is an integral part of human resource development. In the current competitive environment

in the banking industry, it is all the more important to keep the staff abreast of the latest developments in technology, system and procedures, legal aspects etc. With this in view, 192 programmes were conducted by PSB Centre for Banking research & training at Chandigarh in General Banking & Computer related programmes and at NIBSCOM, NOIDA in various fields from 1st April 2010 to 31st March 2011, in which training was imparted to 3664 employees of different cadres. Besides, 209 officials were also nominated by Head office, personnel Department for specialized training programmes at Assocham, BRrD, CBI Academy, CAB, CRRID, FEDAI, FIU-India MOF, IBA, IBA-DBOD, IBA–FICCI, IDBRT, IIFT, IIM, IIMl, IIBF, ISB, MDI, RTC, SIDBI etc

STAFF STRENGTH

The Bank has a dedicated workforce of 8107 employees as on 31.03.2011:

Category Strength as on 31.03.2011

Officers 5512

Clerks 1452

Sub-staff 1143

Total 8107

WOMEN IN EMPLOYMENT

Out of the total staff strength of 8107 as on 31.03.2011, the women employees were 911, constituting 11.24% of the total strength.

EMPLOYMENT TO RESERVED CATEGORY EMPLOYEES

In terms of Govt. reservation policy, a General Manager has been designated as a Chief liaison officer for SC/ St employees.

The staff strength of SC/ST employees stood at 908 and 218 respectively on 31.03.2011. the staff strength under various reserved categories is as under: -

CATEGORY SC ST OBC Ex-SM PH

OFFICERS 526 153 149 69 51

CLERKS 133 29 110 70 43

SUB-StAFF 249 36 42 376 18

Total 908 218 301 515 112

FINANCIAL ASSISTANCE TO THE DEPENDENTS OF DECEASED EMPLOYEES

During the year 2010-11, Bank considered 58 cases received from dependants of deceased employees

and the employees who retired on medical grounds, under the scheme for payment of ex-gratia in lieu of appointment on compassionate grounds. out of 58 cases considered, 45 cases were approved for payment of ex-gratia and a total sum of Rs.291 lac has been paid during the year.

PROMOTIONS

In order to keep up the motivational level of staff 8, 9, 6, 8, 220, 251, 166 & 42 promotions have been made in Scale –VII, VI, V, IV, III, II, I & Clerical cadre respectively during the year ended 2011.

INDUSTRIAL RELATIONS

The industrial relations in the Bank remained cordial through out the year. the representatives from Workers and officers unions participated in various discussions on developmental and other issues with the management at various levels.

STAFF WELFARE

In order to motivate and encourage the staff for effective participation in developmental activities, the Bank is maintaining various welfare schemes for the staff. the bank is contributing a part of profit, as per Ministry of Finance guidelines, to PSB Welfare trust.

During the year 2011, bank introduced schemes for reimbursement of cost/ expenses of certain life saving devices/ methods of treatment, which are not covered under Bipartite Settlement/ OSR. Further, a new health check-up scheme was introduced for employees and their spouses for timely detection of any serious ailments. Also, improvement/ betterment in the existing schemes of Hospitalization expenses, assistance for bringing up handicapped / spastic child, financial aid in case of the death of the employee, educational incentive & scholarship schemes have been made during the year for the welfare of staff.

DIRECT RECRUITMENT

the Department has completed its first phase of recruitment process under which 454 officers including Specialist officers and 246 Clerks were selected. the Bank also initiated its second phase of recruitment process for the recruitment of 920 officers, including Specialist officers and 450 Clerks through direct recruitment, under which 7 EDP Scale –III Specialist officers, 28 Chartered Accountants, 46 EDp –II Specialist officers, 1 Security officer and 1 Forex officer in Scale –I have already been selected by the Bank. the remaining

process for recruitment of probationary officers, Hindi officers, Agriculture Field officers & Clerks is likely to be completed in the month of June 2011.

INFORMATION TECHNOLOGY

During the review period, the Bank initiated various projects viz. CBS, network expansion, ATM deployment & CTS in line with Banks It policy.

The Bank has entered into a contract with M/s Wipro ltd. for implementation of CBS in 500 branches and consequently 52 branches of the Bank have been migrated / opened in CBS environment.

Electronic fund transfer facility through RTGS & NEFT has been made available in 479 branches.

Bank has installed 83 onsite / offsite ATMs which are serving the banks customers in 17 major cities spread all over India. the CTS project of RBI is fully implemented and is running live in NCR Delhi branches of our Bank. At present 100% of the clearing volume of the Bank in NCR is received through CTS System. the CTS is under implementation in Chennai.

ATMs

During the year, Bank installed 22 online on-site ATMs at identified branches besides 2 online off- site ATMs to provide any-time banking facilities to customers. With this, ATM tally of the Bank has reached 83 & Non-ATM branch customers have also been brought under the ambit of ATM facility. the joining of NFS is a giant leap for ATM card users of our Bank. the Bank has issued 46,000 personalized and non-personalized cards.

INTERNAL CONTROL

The Bank has a well established Inspection Department that examines the adherence to system, policies and procedures of the Bank. the regular inspections, Concurrent Audit, risk Based Internal Audit, Credit Audit, revenue Audit, Management Audit, Information System Audit of all the eligible branches / offices were conducted as per plan.

The Audit Committee of the Board periodically reviewed the adequacy of the internal control system and other important aspects / functions of internal control.

COMPLIANCE FUNCTION

Subsequent to upgradation from a Compliance Cell to a full fledged Department, besides drafting of Compliance Manuals & Compliance templates,

all Zonal offices and Head office Departments were subjected to Compliance Audit to gauge the compliance risk. Further, in a bid to improve upon awareness of regulatory, Statutory and Internal guidelines, the gists of guidelines by RBI & Bank were compiled & uploaded on the intranet site of the Bank on monthly basis. this compliance initiative was well received, as it served as a ready reference for the field functionaries & also enhanced the Compliance level. the Chief Compliance officer places Monthly report on Compliance before the Ceo, while the position is reviewed by ACB/Board on quarterly basis.

PR & PUBLICITY

The Bank has adopted a well-planned strategy to build up its image amongst the public at large as also at corporate levels. the Bank gained immense publicity at pre and post IPO stage by adopting various modes of publicity including print & electronic media which covered press Conferences & interviews of Ceo.

Bank always endeavors to dedicate itself to the service of the nation in its publicity messages while earning a well deserved mileage in publicity.

VIGILANCE

As a measure of preventive vigilance, the Branches of the Bank are being visited by Vigilance officers posted at Zonal offices. 190 sensitive Branches have been identified on the basis of risk perceptions and the same have been bifurcated into two categories, namely A & B and are being visited on quarterly and half-yearly intervals respectively. 5 training programmes on operational risk Management, prevention, Detection & Investigation of Frauds were conducted by the Bank during the Financial Year at NIBSCOM, NOIDA & PSB-CBRT, Chandigarh. Sensitive posts in the Bank were also reviewed as another measure of preventive vigilance.

During the financial year 2010-11, the progress in disposal of disciplinary cases was reviewed regularly with thrust on disposal of disciplinary cases in a time-bound manner. Disciplinary Authorities, Inquiring Authorities as well as presenting officers were suitably guided & emphasis was laid on adherence to time schedule as stipulated by CVC while ensuring free & fair conduct of disciplinary proceedings. As a result, the Bank has been able to dispose of 58 Vigilance Disciplinary Cases during the year 2010-11.

96 complaints, including 17 through CVC, were received and an equal number of complaints were investigated / disposed of during the Financial Year.

During the year, 12 fraud cases for Rs.30.21 lacs were closed under the recent relaxations given by RBI.

SECURITY ARRANGEMENT

regular Security Inspections were carried out by Zonal Security officers, which were closely monitored by Head office. Consequently, there was marked improvement in the security arrangement in the Bank. All the branches are provided with an armed guard and electronic security gadgets, as per RBI stipulations

IMPLEMENTATION OF OFFICIAL LANGUAGE

During this year, 53 workshops were organized (49 Hindi and 4 Punjabi workshops) imparting training to 893 personnel.

Besides this, 2647 personnel were trained in 610 Hindi Desk training programmes, which were organized at various branches.

For the purpose of reviewing the progress of official language, O.L. Inspections were conducted in 610 branches, 14 Zonal offices and 22 Departments.

During this year, Banks Head office was honoured by Delhi TOLIC with third prize for best performance in the field of implementation of official language. Besides this, Zonal offices Ludhiana and Chennai, Bos Bangaluru, Thiruvananthpuram and Pune were also honoured with first prize for best performance in the field of implementation of official language. LHO Chandigarh was honoured with 11 prizes out of 12 competitions held by Chandigarh TOLIC.

To motivate all employees in the bank towards the use of Hindi, Hindi Day / fortnight was organized at Head office as well as in all the Zonal offices. Various competitions were organized and the winners were honoured. During Hindi fortnight, a Kavi Sammelan was organized in Lucknow and renowned poets of Hindi and Urdu participated in it.

Also to motivate all controlling offices of the Bank, Rajbhasha Shield Scheme was introduced amongst all Departments and Zonal offices and Zo-Delhi(I) – Region-A ZO Ludhiana – Region-B, ZO Chennai – Region-C and Ho P.F. Department were honoured with Rajbhasha Shields.

HO official language Department has computerized the All India record of notified branches in Govt. gazette under section 10(4) of official language rule, 1976 of official language Act, 1963 and the same was provided to all Zonal offices for further updation.

Official language Department of the Bank organized All India Rajbhasha Seminar and unicode based special workshop. 37 officers actively participated for two days. on this occasion, a booklet HINDI KARYA SAHAIKA, prepared by the Department was released. to ensure the implementation of OL policy of Govt. of India and to bring about uniformity in all Zonal offices, Hindi Indic software, Banks bilingual mono, booklet on official language standard forms were made available.

The Committee of parliament on official language inspected ZO Delhi-I. the Committee has conveyed its satisfaction with regard to Banks official language implementation, besides giving some suggestions, which are being implemented. the Committee also visited our Jhansi and Hing Ki Mandi, Agra branches and had discussion with the bank officials. Both the branches are implementing the suggestions conveyed by the Committee.

SPORTS

The Bank has a Sports Academy which nurtures Banks Hockey team at national level, besides Hockey Academy for age group of 15 to 18 years & Sub Junior Hockey Academy for age group of 12 to 15 years.

During the year, the Banks Hockey team won the following three tournaments:

- liberal Hockey tournament at Nabha

- Sahibzada Ajit Singh Hockey tournament at Ludhiana

- Independence Hockey tournament Mandi (H.P.)

Bank Hockey Academy won Inter-college tournament at Amritsar and was runner up in three tournaments.

CONSTITUTION OF BOARD OF DIRECTORS

The Bank is committed to good Corporate Governance and is constantly striving to further strengthen the same to ensure greater transparency and better coordination at all levels in the organization.

The Banks Board represented by persons with diversified professional experience is constituted in accordance with the Banking Companies (acquisition and transfer of undertakings) Act 1980 read with the nationalized Bank (Management and Miscellaneous provisions) Scheme 1980, as amended and is represented by persons with diversified professional experince.

As on 31st March, 2011, the Board comprised of a Whole time Director i.e. executive Director besides five other Directors including representatives of Ministry of Finance, reserve Bank of India, Non official Director (Chartered Accountant Category) and two part time Non official Directors appointed by the Government of India. Various Committees constituted under the Board as listed below, oversee the functioning and control the affairs of the Bank:

- Management Committee

- Audit Committee

- Risk Management Committee

- Committee for monitoring large Value Frauds

- Vigilance Committee

- Customer Service Committee

- Remuneration Committee

- Appellate Committee

- Shareholders / Investors Grievance Committee

- Nomination Committee

- IT Committee

- Committee of Directors on Executives promotion the constitution of Banks Board of Directors underwent the following changes during the year 2010-2011:

Appointments

- Shri Karanpal Singh Sekhon was nominated as Non official Director on the Board of the Bank on 05.07.2010.

- Shri Manish Gupta was nominated as Non official Director on the Board of the Bank on 12.07.2010.

- Shri B.P. Kanungo was nominated as RBI nominee Director on the Board of the Bank on 30.07.2010.

Cessations

- Shri G S. Vedi, Chairman & Managing Director attained the age of superannuation and thus retired from the service of the Bank on 30.06.2010.

- Shri Sandip Ghose completed his term as an Additional Director on the Board of the Bank on 27.07.2010.

- Shri R. Sadanandam, RBI nominee Director completed his tenure on 30.07.2010.

- The resignations of Shri Harichand Bahadur Singh, Non official Director & Shri Manish Gupta, Non official Director, from the Board of the Bank were

accepted by the Competent Authority on 08.12.2010 and 24.12.2010 respectively.

- Shri M.V. S. Prasad, Non official Director completed his term of three years as Director of the Bank on 24.01.2011.

Twelve Meetings of the Board of Directors, Fifteen Meetings of the Management Committee and nine Meetings of the Audit Committee of the Board were held during 2010-2011, besides other Committee Meetings of the Board.

STAUTORY AUDIT

The Bank appointed M/s Balram Chandra & Associates, Allahabad; M/s.Bansal Sinha & Co, new Delhi; M/s Bhatia & Bhatia, new Delhi; M/s Alka & Sunil, new Delhi; M/s G. S. Goel & Co., Delhi and M/s S.B.G. & Co., Delhi as Statutory Central Auditors for the accounting year ended March 2011.

ACKNOWLEDGEMENTS

The Board of Directors is grateful to the Government of India and reserve Bank of India for their continued assistance, active & timely support and guidance rendered throughout the year. the Directors also express sincere thanks to the Banks clientele for their continued patronage and confidence reposed in the Bank.

The Board appreciates and commends the contributions made by the staff of all cadres for their active involvement in the development/growth of the Bank and looks forward to their continued support and co-operation for realization of the corporate goals in the years ahead.

For and on behalf of Board of Directors

Sd/-

(P.K. Anand) Executive Director

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