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Directors Report of State Bank Of Bikaner and Jaipur

Mar 31, 2015

FINANCIAL HIGHLIGHTS

NET INTEREST INCOME

The Bank''s total interest income increased from Rs.8168.56 crore during 2013-14 to Rs.9005.45 crore during 2014-15, recording a growth of 10.24%. Interest expenditure increased by 13.45% to Rs.5344.78 crore, as against Rs6064.02 crore in the previous year. The net interest income recorded a growth of 4.16% to Rs2941.43 crore, as against Rs2823.78 crore in 2013-14. The net interest margin (NIM) stood at 3.37% at the end of March 2015.

NON-INTEREST INCOME

The non-interest income of the Bank has increased by 5.71% from Rs.876.34 crore in 2013- 14 to Rs926.39 crore during 2014-15. The increase during the year as compared to the last year is mainly on account of increase in profit on Sale of Investment of Rs15.38 crore and recovery in Written-off accounts to the tune of Rs16.19 crore.

OPERATING EXPENSES

The operating expenses declined by 12.05% from Rs2005.46 crore in 2013-14 to Rs1763.71 crore during 2014-15. This is due to decrease in staff provisions from Rs543.69 crore in 2013-14 to Rs254.90 crores during 2014-15.

PROFIT

During 2014-15, the operating profit increased to Rs2104.11 crore, recording a growth of 24.16% as against Rs1694.66 crore in the previous year. The net profit recorded a growth of Rs45.18 crores (6.17%) from Rs731.69 crore in 2013-14 to Rs776.87 crore in 2014-15.

DIVIDEND

During the year 2014-15, the Bank declared an Interim Dividend of 143% i.e. Rs14.30 per equity share (face value of share Rs.10/- per share) which is same as the dividend of 143% i.e. Rs14.30 per share declared in the previous year. Record date for ascertainment of entitlement of shareholders for Interim Dividend was 31.03.2015. Interim dividend may be treated as final dividend.

KEY FINANCIAL INDICATORS

The Return on Assets of the Bank stood at 0.84% during 2014-15 as against 0.87% in the previous year. The return on equity (ROE) stood at 12.92% at the end of March, 2015. The earnings per share increased from Rs104.53 in 2013-14 to Rs110.98 in 2014-15, while the book value per share improved from Rs765.13 in 2013-14 to Rs858.95 in 2014-15. As at the end of March, 2015. The capital adequacy ratio of the Bank stood at 11.69% and 11.57% as per Basel II and III norms respectively, as against 11.71% and 11.55% as per Basel II and III norms respectively, as at the end of March, 2014. This was well above the RBI benchmark of 9%. The Bank''s Gross NPA ratio and Net NPA ratio decreased from 4.18% and 2.76% respectively as at the end of March 2014 to 4.14% and 2.54% respectively, at the end of March, 2015. The average business per employee increased to Rs11.00 crores during 2014-15, as against Rs9.77 crores in the previous year. The net profit per employee remained same at Rs6.00 lacs during 2014-15. The average business per branch increased to Rs123.22 crore during 2014-15, as against Rs121.26 crore in the previous year.

CREDIT MANAGEMENT

The overall credit demand remained muted during the FY 2014-15 due to overall slowdown in the economy leading to lower level of investment activity. However, the Bank continued to focus on qualitative credit growth and faster credit delivery.

Total advances of the Bank grew by 8.90% during 2014-15, as against growth of 11.72% during 2013-14.

The Bank''s Commercial & Institutional (C&I) segment advances (other than food credit) during the FY 2014-15 marginally grew by 0.38% with an increase of Rs139 crore over FY 2013-14, whereas non C&I segment comprising personal, small business and agricultural advances grew by Rs5765 crore (20.51%).

In the backdrop of stress in the various segments of the industry, the impetus of financing remained mainly towards top rated PSUs and other sectors such as Real Estate (RH), textiles and NBFCs etc.

In view of the prevailing competitive and stressed market scenario, closer interaction and regular meetings by the Top Management with high value customers at major centers in the country resulted in booking of several good quality advances.

PERSONAL BANKING

Personal Banking Segment continued to be the thrust area. The Bank''s retail operations recorded robust growth during the year 2014-15.

Personal Segment deposits recorded a growth of 16.60%, and increased to Rs57462 crores as at end of March, 2015. Acquisition of new customers remained one of the focus area consequently resulting in increase of customer base by 26% with opening of 34 lac new CASA accounts during the year. The Bank''s savings account deposits also grew by 13.90% during the year to Rs28536 Crores.

PERSONAL FINANCE

In Personal Segment lending, Bank was committed to fine tune the products and service delivery to the market expectations. Most of the prime P Segment products have undergone fine tuning in its features.

The Bank''s Home loan and Personal loan disbursements recorded a robust growth of 24.23% and 22.53%, respectively. The overall P Segment loan portfolio has grown by 18.36% to Rs12187 Crores during the year.

Online approvals: Online in-principal approval for Home loans and Car loans have attracted good number of new customers to our fold. In-principal approvals of Rs598.50 crores and Rs382.70 Crore were accorded during the year for Home loans and Car loans respectively.

PRIORITY SECTOR LENDING (PSL)

Bank gives utmost importance to lending to Priority Sector and during the FY 2014-15, more than 60% of the total growth in advances is registered under priority sector. The Priority Sector Advances of Bank is 42.54% of ANBC at the end of 31st March 2015, as against the RBI stipulation of 40%. In value terms priority sector advances grew Rs5127 crore from Rs22733 crore to Rs27860 crore during 2014-15. To meet the specific need of this sector Bank is sensitizing the operating functionaries at the branch level to give special attention to Agriculture, MSE, Education, Housing, Export Credit etc. Special thrust is also given on increasing awareness among operative staff about targets/ sub-targets and products/schemes for lending to Priority Sector.

AGRICULTURE

Lending to agriculture remained one of the major thrust areas of the bank. The outstanding level of agriculture advances increased from Rs10962 crore as at the end of March 2014 to Rs11927crore as at the end of March 2015.

The flow of credit in agriculture stood at Rs9672 crore during the current financial year as against Rs7669 crore during the last financial year. Agriculture advances constitute 18.21% of the Adjusted Net bank Credit (ANBC).

The Bank has issued 71046 Kisan Credit Cards (KCC) with sanctioned limit of Rs1928 crore during the financial year 2014-15. The Total number of KCCs stood at 628428 at end of March, 2015.

PROGRESS UNDER FI PLAN (2013-16)

As per RBI FIP Plan (2013-16), the Bank was required to cover 3144 villages by BCs up to March, 2015. As against this, the Bank has covered 7048 villages. Bank''s Branch Network has also crossed the milestone of 1250 branches to touch 1261 branches by opening 117 branches during the year. 935299 accounts have been opened through BC channel against the target of 6,00,000.

PROGRESS UNDER PMJDY

The Bank took the PMJDY Scheme announced by the Hon''ble Prime Minister in true spirit and 24.61 lac accounts have been opened under PMJDY, out of which 11.24 lac accounts are in rural areas and 13.37 lac accounts are in urban areas. Deposit of Rs599.66 crore has been mobilized and 21.52 lac Rupay Debit Cards have been issued under PMJDY up to 31.03.2015.

The Bank completed the task of opening of one account per household in its allocated SSAs (Sub Service Areas) before 31.12.2014.

Rupay debit card having inbuilt accidental insurance cover of Rs. one lac and Life Cover (LIC Scheme) of Rs. 30,000/- is also available to the beneficiaries who opened their accounts for the first time from 15.08.2014 to 26.01.2015.

STATUS OF SSA COVERAGE

The Bank has been allotted 1948 SSAs (Sub Service Areas) in our Service Area in Rajasthan and in other States. Out of this, 1935 SSAs are in Rajasthan. The Bank covered all these SSAs either by opening of branches or by engagement of Corporate/ Individual BCs.

FINANCIAL LITERACY

The Bank has 9 FLCCs in its Lead Districts and till 31.03.2015, 1298 counseling camps have been organized and 91511 people counseled in such programs. Out of these, 39422 people are linked to Banking system and 1529 people have benefited with credit linkage. After launch of PMJDY, SBBJ has organised 312 Financial Literacy camps, where 16182 persons have been counseled. Our rural branches regularly meet the villagers and hold Financial Literacy Camps. Wide publicity is ensured and financial literacy material is distributed in those camps.

DIRECT BENEFIT TRANSFER (DBT)/ (DBTL)

All our branches are enabled for individual & bulk seeding of Aadhaar numbers in accounts. Our nodal branch for DBT is uploading the seeded data on NPCI mapper on daily basis. We have issued newspaper advertisements in leading newspapers to improve our Aadhaar Seeding position.

LEAD BANK SCHEME

Bank is shouldering Lead Bank responsibility in nine Districts in the State of Rajasthan viz. Bikaner, Barmer, Hanumangarh, Jaisalmer, Jalore, Pali, Sirohi, Rajsamand and Udaipur. The Bank has been implementing and monitoring the Annual Credit Plan and other developmental and poverty eradication schemes launched by the Govt. of India, Govt. of Rajasthan and NABARD. Against target of Rs4564 crore in 9 Lead Districts for Annual Credit Plan for the year 2014-15, we have disbursed Rs6342Crore, achieving 139% % of the annual targets.

MICRO CREDIT (SHGs)

At the end of March, 2015, the Bank has credit linked a total of 44624 Self Help Groups with outstanding amount of Rs535.70 crore, out of which 35654 accounts are of women beneficiaries with outstanding amount of Rs467.29crore Ministry of Finance, Govt. of India launched a project for financing to Women Self Help Groups with the support of Anchor NGO as SHPI in 24 backward Districts of 24 States in the country, later on it was extended to 150 back ward Districts, including 109 Left Wing Extremism (LWE) districts. In Barmer District, NGO has Linked 1269 SHGs by SB Linkage and 1090 SHGs by Credit Linkage during the year against the targets of 1000 up to March, 2015.

RURAL SELF EMPLOYMENT TRAINING INSTITUTES (RSETI)

In order to impart job- oriented skills to rural unemployed youth, the Bank has set-up eight RSETIs at Bikaner, Hanumangarh, Barmer Jaisalmer, Jalore, Pali, Sirohi and Nathdwara (Distt. Rajsamand).

By the end of March, 2015, 39911 candidates have been imparted training for various local demand jobs in these institutions and by imparting skill trainings, 4795 candidates have been engaged in various jobs and 18180 candidates have started their own ventures. 9666 persons have been credit linked amounting to Rs6589.75 lac. All our RSETIs have secured AA /AB rating indicating overall good position.

GOVERNMENT SPONSORED SCHEMES

The Bank continued to play a pioneering role in financing entrepreneurs under various governments sponsored schemes. Under National Rural Livelihood Mission (NRLM scheme) the Bank sanctioned amount of Rs100.53 lacs to 114 beneficiaries. Similarly, under Prime Ministers Employment Generation Programme (PMEGP) an amount of Rs3028.99 lacs was sanctioned to 690 beneficiaries and Rs1365.89 lacs to 4511 beneficiaries under POP.

REGIONAL RURAL BANK

Rajasthan Marudhara Gramin Bank (RMGB) has come into existence on 01.04.2014 with the amalgamation of the erstwhile Marudhara Gramin Bank (MGB), sponsored by SBBJ and Mewar Anchalik Gramin Bank (MAGB), sponsored by ICICI Bank). The Bank is playing vital role in the economy of the 15 districts of their area of operation by extending financial assistance to both priority and non priority sectors.

SBBJ continues to provide managerial support and financial assistance by way of refinance etc. to RMGB. All branches of RMGB are on CBS platform and provide Electronic Fund Transfer facility. RMGB has installed its five on site ATMs and one mobile ATM. RMGB has a deposit of Rs6332 crore and advances of Rs4572 crore as on 31.03.2015. RMGB recorded a net profit of Rs90 crore.

II) MICRO, SMALL AND MEDIUM ENTERPRISES (MSMEs)

The Micro, Small and Medium enterprises(MSME) sector contributes in a big way to the growth of Indian Economy with a vast network of over 5.77 crore units, creating employment for more than 8 crore people, manufacturing more than 6000 products, contributing about 45% of manufacturing output and about 40% of exports. As on 31st March, 2015, Bank''s total exposure to Micro, Small and Medium Enterprises (MSME) sector was Rs11719 crore in more than 144000 MSME units. MSME Segment is one of the key growth areas identified by the Bank and constitutes more than 15% of Bank''s total advances. During the year, Bank has sanctioned credit facilities to more than 25804 new MSME units amounting to Rs2555 crore. The loans upto Rs.10 lacs in SME is Rs1424 crore.

Bank is extending collateral free loans up to Rs1.00 crore to MSE sector under CGTMSE Scheme of Credit Guarantee Trust, which provides 50 to 85% guarantee cover on eligible MSE accounts for limit up to Rs100 lacs. Bank has covered 3149 fresh accounts amounting to Rs122 crore during the FY 2014-15 under CGTMSE.

GOVERNMENT BUSINESS

The Bank conducts Government Business on behalf of State/Central Government through 985 Authorized Branches. Income Tax, Central Excise, Service Tax, Value Added Tax (VAT) etc. are collected through physical chalans and also through the electronic mode. The Bank has established a Centralized Pension Processing Centre (CPPC) which calculates as well as credits pension to the accounts of pensioners across all the branches. Bank also has an online treasury Branch for online payment of salary of Rajasthan Govt. employees on behalf of the State Govt. Presently our online Treasury Branch is processing 9.75 lakh State Govt. transactions received through 18000 digitally signed files in a month. During 2014-15, the Bank has earned Rs96.18 crore commission income from Government business.

INTERNATIONAL BANKING

The Bank provides Foreign Exchange related services to exporters/ importers, other resident and non-resident customers through a network of 69 Authorized Category "B" and 184 category ''C'' branches and 4 Trade Finance Central Processing Centres (TFCPC).

Bank''s forex dealing room at Mumbai and all the authorized category ''B'' branches are equipped with latest technology for real-time communication and are connected through SWIFT network with more than 750 offices of foreign banks throughout the world. The Bank maintains 21 NOSTRO accounts in all major currencies and non-account correspondent banking relationship with all major banking groups in the world. To facilitate NRI customers for inward remittances, there is online remittance facility and tie-up with 4 Gulf based Exchange Houses.

The Bank also undertakes proprietary Forex trading to increase profit by taking advantage of market movements. Our Merchant forex turnover stood at Rs31186 crore at the end of March 2015, as against Rs31678 crore for the same period in last financial year representing a marginal decrease of Rs492 crore (1.56 %) during the year.

Our NRI deposits stood at Rs1630 crore at the end of March 2015 as against the base of Rs1384 crore in March 2014, registering a growth of Rs246 crore (17.77%).

Our export credit stood at Rs2544 crore at the end of March, 2015 as against Rs2740 crore at the end of March, 2014, recording a marginal decrease of Rs 196 crore (7.15 %) during the financial year.

INDUSTRIAL REHABILITATION

As at end of 31st March, 2015, the Bank had 19 large sick /weak units on its books with aggregate outstanding of Rs278.55 crore. There are 47 Corporate Debt Restructuring cases with aggregate exposure of Rs3038.36 crore and 18 BIFR cases with exposure of Rs343.27 crore. The Bank has been acting as BIFR''s Operating Agency in 4 cases. During the year under review 8 accounts with aggregate exposure of Rs996.28 crore have been restructured under CDR mechanism as warranted basically by the tight economic scenario.

AUDIT

State Bank of India, with the concurrence of the Reserve Bank of India, approved the appointment of 4 firms of Chartered Accountants viz. M/s M.K. Agarwal & Co. of Delhi, M/s Chaturvedi & Co. of Kolkata, M/s Uberoi Sood & Kapoor of Delhi and M/s PSD & Associates of Jaipur as the Statutory Central Auditors of the Bank for the year 2014-15. During the period under review, the scope of audit covered 742 branches/ centralised processing units as against 664 branches/ centralised processing units covered in 2013- 14.

RESPONSIBILITY STATEMENT

The Board of directors hereby states:

1. That in the preparation of the annual accounts, the applicable Accounting Standards have been followed alongwith proper explanation relating to material departures;

2. That they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Bank as on the 31st March, 2015, and of the profit or loss of the Bank for the year ended on that date;

3. That they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Banking Regulation Act, 1949, and State Bank of India (Subsidiary Banks) Act, 1959 for safeguarding the assets of the Bank and preventing and detecting frauds and other irregularities; and

4. That they have prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE

The details on Corporate Governance are annexed.

ACKNOWLEDGMENT

The Board of Directors is grateful to the valued customers, esteemed shareholders and the public at large for their patronage and confidence reposed in the Bank and places on record its deep appreciation. The Board of Directors thanks the Government of India, State Bank of India, Reserve Bank of India and other regulatory agencies for their valuable support and guidance throughout the year.

The Board of Directors places on record its deep appreciation of the commitment, sense of involvement and dedication exhibited by each staff member and constructive role played by the Employees'' Union and Officers Association in the overall development, growth and prosperity of the Bank.

For and on behalf of the Board of Directors

Place :Mumbai Jyoti Ghosh Dated :06th May,2015 Managing Director


Mar 31, 2014

The Board of Directors of State Bank of Bikaner and Jaipur have pleasure in presenting this Annual Report together with the audited Balance Sheet and Profit and Loss Account of the Bank for the year ended 31st March 2014.

FINANCIAL HIGHLIGHTS

NET INTEREST INCOME

The Bank''s total interest income increased from Rs. 7498.19 crore during 2012-13 to Rs.8168.56 crore during 2013-14, recording a growth of 8.94%. Interest expenditure increased by 8.36% to Rs. 5344.78 crore, as against Rs. 4932.38 crore in the previous year. The net interest income recorded a growth of 10.05% to Rs. 2823.78 crore, as against Rs. 2565.81 crore in 2012-13. The net interest margin remained the same at the last year''s level of 3.62%.

NON-INTEREST INCOME

The non-interest income of the Bank has increased by 20.66% from Rs. 726.28 crore in 2012-13 to Rs. 876.34 crore during 2013-14. The increase during the year as compared to the last year is mainly on account of increase in profit on sale of Investment by Rs. 63.08 crore and recovery in Written- off accounts by Rs. 38.57 crore.

OPERATING EXPENSES

The operating expenses recorded a growth of 26.99% from Rs. 1579.22 crore in 2012-13 to Rs. 2005.46 crore during 2013-14. Of this, employee costs increased by 31.20% to Rs. 1295.64 crore, while total other operating expenditure increased by 19.96% to Rs. 709.82 crore.

PROFIT

During 2013-14, the operating profit decreased to Rs. 1694.66 crore, (by -1.06%) as against Rs. 1712.87 crore in the previous year. The net profit recorded a growth of 0.20% from Rs. 730.24 crore in 2012-13 to Rs. 731.69 crore in 2013-14.

DIVIDEND

During the year 2013-14, the Bank declared an Interim Dividend of 143% i.e. Rs. 14.30 per equity share (face value of Rs. 10/- per share). Record date for ascertainment of entitlement of shareholders for Interim Dividend was 31st March, 2014. Interim Dividend may be treated as final dividend.

KEY FINANCIAL INDICATORS

The Return on Assets of the Bank stood at 0.87% during 2013-14 as against 0.96% in the previous year. The Return on Equity decreased to 13.66% as against 15.33% in the previous year. The Earnings Per Share increased from Rs. 104.32 in 2012-13 to Rs. 104.53 in 2013-14, while the book value per share improved from Rs. 678.74 in 2012-13 to Rs. 765.13 in 2013-14. As at end-March 2014, the Capital Adequacy Ratio of the Bank stood at 11.71% and 11.55% as per Basel II and III norms respectively, as against 12.16% as per Basel II norms respectively, as at end-March 2013. This was well above the RBI benchmark of 9%. Due to rise in NPAs on account of continued stress faced by the industrial sector coupled with agriculture NPAs, the Bank''s Gross NPA ratio and Net NPA ratio increased from 3.62% and 2.27% respectively as at end-March 2013 to 4.18% and 2.76% respectively, as at end- March 2014. The average business per employee increased to Rs. 977 lakh in 2013-14, as against Rs.900 lakh in the previous year. The net profit per employee decreased to Rs.5.62 lakh in 2013-14, compared to Rs.5.91 lakh during 2012-13. The average business per branch increased to Rs. 116.52 crore during 2013-14, as against Rs.112.42 crore in the previous year.

CREDIT MANAGEMENT

The overall credit demand remained muted during the FY 2013-14, with GDP growth in sub 5% range due to overall slowdown in the economy leading to a lower level of investment activity. However, the Bank continued to focus on qualitative credit growth and faster credit delivery. Total advances of the Bank grew by 11.72% during 2013-14, as against growth of 16.98% during 2012-13.

The Bank''s Commercial & Institutional (C&I) segment advances (other than food credit) during the FY 2013-14 grew by 9.40% with an increase of Rs.3099.00 crore over FY 2012-13, whereas non C&I segment comprising personal, small & micro enterprises and agricultural advances grew by Rs.2907.42 crore (11.50%).

Against the backdrop of stress in the various segments of the industry, the impetus of financing remained mainly towards top rated PSUs and other sectors such as Real Estate (RH), textiles and NBFCs etc.

In view of the prevailing competitive and stretched market scenario, closer interaction and regular meetings by the Top Management with high value customers were held at major centres in the country which resulted in booking several good advances.

PERSONAL BANKING

Deposits under Personal Segment grew from Rs. 41,905 Crore as on 31st March 2013 to Rs. 46,726 Crore as on 31st March 2014, thus recording a growth of 11.50%.

ACQUISITION OF NEW CUSTOMERS

Acquisition of new customers was the prime focus of the Bank during the year to augment its retail deposit base. We could open 24.97 lakh new Savings Bank Accounts during the year, which accounts for 23.46% of the base level. The resources mobilized in the Savings Bank portfolio was Rs. 3,617 crores, which helped the Bank to improve its CASA deposits.

55% of the new accounts were opened by either students or youth which reflects the Bank''s penetration amidst the younger age groups of the population.

Nearly 73% of the total deposit in the newly opened accounts were contributed by youth and middle aged customers ranging from 20 years to 60 years which shows the Bank''s effective linkage to salaried/ income earning segments of the society.

MAHALAKHPATI CAMPAIGN

To encourage the habit of regular monthly savings among customers, we have made our Recurring Deposit scheme popular through a special campaign called "Mahalakhpati RD Campaign." The campaign was focused on the opening of high value recurring deposit with a maturity value of Rs.10 lakh and above. We could mobilize 27,397 new Millionaire Recurring Deposit accounts during the campaign. We could open 70,084 Recurring Deposit accounts during the year.

SBBJ VAIBHAV & SBBJ DHANSHAKTI

We could mobilize Rs.1,190 Crore in a specially designed term deposit/ product called SBBJ Vaibhav launched during the year. SBBJ Dhanshakti, another deposit product for short term deposit, has mobilized Rs. 104.74 Crores during the year.

PERSONAL FINANCE

The Personal finance portfolio has crossed a landmark of Rs.10,000 crore during the financial year 2013-14. The Bank continued to be active in catering the credit requirements of P segment customers, mainly by way of Home Loans, Car Loans, Education Loans and Personal Loans. The advances under the personal segment rose to a level of Rs.10,295 crore as at March 2014 from Rs.9,131 Crore as at the end of March 2013.

During the year under review, 7,631 home loans aggregating to Rs.816 crore were granted, taking the outstanding home loan level to Rs. 3,768 crores as on 31.03.2014. Similarly 14,507 Car Loans aggregating Rs.648 crore were granted during the same period taking outstanding car loan level to Rs. 1,452 crore as on 31.03.2014. We could disburse 37,741 Personal loans aggregating Rs.1,116 crore during the same period.

As in the previous years, the Bank contributed to support the younger generation to pursue higher studies by extending Education Loan. To support the efforts of Government of India to boost the sentiments of retail/consumer durable segments, the Bank has introduced a new Scheme for financing of Consumer Durables during the year. The other retail segment products like Max Gain Scheme, Rent Plus and Home Cash have been revamped during the year to make them more customer/market friendly.

PRIORITY SECTOR LENDING(PSL)

Priority Sector Lending is the major thrust area of the Bank''s operations. As at the end of March, 2014, the Bank''s Priority Sector Advances increased to a level of Rs.23641 crore as compared to Rs. 20807 Crore in the previous year i.e. growth of 13.72% over March 2013. The PSL constituted 40.73% of the Adjusted Net Bank Credit, against the RBI benchmark of 40%. However, Priority Sector Lending in Rajasthan stood higher at 66.40% of Rajasthan''s ANBC.

AGRICULTURE

Lending to Agriculture remains one of the major thrust areas of the Bank. The outstanding level of Agriculture advances increased from Rs.9188 crore as at the end of March 2013 to Rs. 10962 crore as at the end of March 2014, a growth of 19.31%. Our Bank''s total direct agriculture lending is 99.35% of total Agriculture advances amounting to Rs.10911 crore, and has registered a growth of Rs.2658.90 crore during the Financial Year under review. The flow of credit to agriculture stood at Rs. 7644 crore against the annual target of Rs.3500 crore during the current financial year. Agriculture advance constituted 18.90% of the Adjusted Net Bank Credit (ANBC), against RBI benchmark of 18%. In the State of Rajasthan, it is even higher at 37.2% of ANBC for Rajasthan State.

The Bank has issued 109933 Kisan Credit Cards (KCCs) with sanctioned limits of Rs.2302 crore during the financial year 2013-14. The total number of KCC stood at 600317 as at end of March 2014.

FINANCIAL INCLUSION (FI)

In the first phase, our Bank was allocated 829 villages with population above 2000. Accordingly 794 USBs (Ultra Small Branches) were established using PoS technology and BCs/BCAs were engaged covering 823 villages and in the remaining 6 villages, Brick and Mortar branches were opened. In the second phase of FI (2013-16), our Bank has been allocated 7588 villages with population below 2000 in 1878 Gram Panchayats which are to be covered by engaging BCs and / or opening of branches by 31.03.2016. During the current Financial Year i.e. 2013-14 we have been allocated target to cover 1067 villages and we have covered 1070 villages by 31.03.2014.

The KIOSK Banking Software developed by M/s TCS Ltd. and provided by SBI has been rolled out in our Bank. Our Bank has entered into agreement with M/s CSC E-Governance Services India Limited on 07.01.2013 and with M/s. FIA Technology Services Pvt. Ltd. (a Corpoprate BC) on 20.11.2013 for providing the BC service. M/s CMS Computers Ltd., which is a Service Centre Agency (SCA) of M/s. CSC e-Governance Services India Ltd., has been allotted 19 districts in Rajasthan for engaging CSCs as BCAs in the Gram Panchayats allocated to our Bank. Pali and Barmer districts have been allotted to M/s FIA Technology Services Pvt. Ltd. for engaging their BCAs. In the remaining 12 districts, our existing Corporate BCs namely Lupin Human Welfare & Research Foundation Samiti / P2P Microfinance and Allied Services or Individual BCs will continue to provide banking services.

AADHAAR SEEDING AND MAPPING ON NPCI PORTAL:

Our Bank has successfully implemented Aadhaar based payment system (APBS/NACH) through National Payment Corporation of India (NPCI) gateway. Seeding of Aadhaar Number in CBS account is under progress. We have seeded 625759 accounts with Aadhaar, of which 616746 Aadhaars have been uploaded on NPCI Portal.

DIRECT BENEFIT TRANSFER:

DBT has been rolled out in 121 districts across the country, of which 6 districts are in the State of Rajasthan and SBBJ is the Lead Bank in two DBT districts i.e. Udaipur and Pali. In both the districts, banks have opened accounts of all the beneficiaries as per the list received from District Authorities.

MICRO, SMALL AND MEDIUM ENTERPRISES (MSMES)

The Micro, Small and Medium Enterprises (MSME) sector is crucial to the Indian Economy. There are 3 crore enterprises in various industries, employing approx 7 crore persons. Together, these account for 45% of the industrial output and 40% of the exports. This sector is contributing approx.11% per annum to India''s GDP and is critical for the overall GDP growth. RBI has also emphasized to adopt suitable strategies for higher lending to MSMEs. Accordingly, our Bank has also given high priority to this area.

We have arranged MSME customers meet at Jaipur, Alwar, Bhiwadi, Udaipur, Chittorgarh & Bikaner centres. We have also sensitized our operating officials by way of training & seminar etc.

The Bank has assisted 21156 new MSME units during the year 2013-14. In order to boost MSME advances, the Bank has modified its existing MSE loan schemes to make them most competitive.

The Bank has continued its thrust to provide collateral free loans to MSMEs under the Credit Guarantee Scheme of CGTMSE. During the year (April 13 to March, 14), the Bank provided new collateral free loans under Credit Guarantee Scheme of CGTMSE to MSE units amounting to Rs 119.11 crore, taking the CGTMSE covered accounts (cumulative) at Rs405.40 crore as at the end of March 2014.

LOANS TO WOMEN BENEFICIARIES:

The Bank finance as on 31st March, 2014 to women beneficiaries has increased to Rs 3181.21 Crore in 212925 accounts against Rs 2732.87 crore in 204680 accounts as on March 2013, registering a growth of Rs 448.34 crore. This constitutes 5.48 % of ANBC against the benchmark of 5%.

ASSISTANCE TO MINORITY COMMUNITIES, WEAKER SECTIONS AND SCHEDULED CASTES / SCHEDULED TRIBES

As at end March 2014, assistance to minority communities stood at Rs. 2960.73 crore spread over 101591 accounts.

Financing to weaker sections stood at Rs. 10998.90 crore benefiting 1014090 persons as at the end of March, 2014. The assistance to weaker sections as a percentage of Adjusted Net Bank Credit (ANBC) is 18.93% as at end March, 2014. This is well above the benchmark of 10% prescribed by RBI.

The outstanding assistance towards Scheduled Castes (SCs)/ Scheduled Tribes (STs) stood at Rs 3070.27 crore in 258602 accounts under priority sector as on 31st March, 2014.

GOVERNMENT SPONSORED SCHEMES

Laying utmost emphasis on Government sponsored schemes has been amongst the major strategies of the Bank in pursuit of financial inclusion. The Bank continued to play a pioneering role in financing entrepreneurs under various Government sponsored schemes. The SGSY scheme was replaced by National Rural Livelihood Mission (NRLM scheme) w.e f. 01/04/2013. The position under various Government sponsored schemes as on 31 March, 2014 is as under: -

Scheme Number of Amount Beneficiaries sanctioned during financial year (Rs. crore)

Swarn Jayanti 1893 10.88 Shahri Rojgar Yojana (SJSRY)

Prime 712 34.77 Ministers Employment Generation Programme (PMEGP)

Mukhya Mantri 2564 53.00 Swavlamban Yojana (MMSY)

POP 5612 22.55

LEAD BANK SCHEME

Our Bank has Lead Bank responsibility in nine Districts in the State of Rajasthan viz. Bikaner, Barmer, Hanumangarh, Jaisalmer, Jalore, Pali, Sirohi, Rajsamand and Udaipur. The Bank has been implementing and monitoring the Annual Credit Plan and other developmental and poverty eradication schemes launched by the Govt. of India, Govt. of Rajasthan and NABARD. Target allotted for Annual Credit Plan to our Bank for the year 2013-14 was Rs4011.00 crore, as against which the achievement of our Bank up to March, 2014, was Rs.4670.00 crore, thereby achieving 116%.of the annual targets.

MICRO CREDIT (SHGs)

At the end of March,2014, the Bank has credit linked a total of 44244 Self Help Groups (SHGs) with outstanding amount of Rs.200.94 crore, out of which 36363 accounts are of women beneficiaries with outstanding amount of Rs.169.08 crore. NABARD had, in the past ranked the Bank as Number One in Rajasthan State for its performance under Micro Credit continuously from the year 2004-05 to 2008-09.

Ministry of Finance, Govt. of India launched a project for financing to Women Self Help Groups with the support of Anchor NGO as SHPI in 24 backward Districts of 24 States in the country, which was later extended to 150 back ward Districts, including 109 Left Wing Extremism (LWE) districts. In Rajasthan, Barmer (our lead district), Banswara, Dungarpur and Jhalawar districts have been selected for this purpose.

The progress in this regard is directly reviewed by Department of Financial Services, Ministry of Finance, Govt. of India. Bank branches and NGO have been identified and Anchor NGO, CECOEDECON has surveyed and mapped the area in Barmer District. In Barmer District, NGO has Linked 931 SHGs by SB Linkage and 521 SHGs by Credit Linkage during the year against the targets of 1000 up to March, 2014.

RURAL SELF EMPLOYMENT TRAINING INSTITUTES (RSETI)

In order to impart job-oriented skills to rural unemployed youth, the Bank has set-up eight RSETIs at Bikaner, Hanumangarh, Barmer Jaisalmer, Jalore, Pali, Sirohi and Nathdwara (Distt. Rajsamand).

By the end of March, 2014, 33702 candidates have been imparted training for various local demand jobs in these institutions and by imparting skill trainings, 4270 candidates have been engaged in various jobs and 15340 candidates have started their own ventures. 8935 persons have been credit linked amounting to Rs.4734.45 lakh. Rating process was introduced by MoRD, New Delhi through State Project Co-coordinator of RSETIs in the year ending March 2013. All our RSETIs secured AA /AB rating. Our Managing Director and Directors of four RSETIs namely Bikaner, Barmer, Hanumangarh and Jaisalmer were honoured at the felicitation function organized by MoRD, GoI on RSETI Diwas at Vigyan Bhawan, MoRD, Delhi on 21/11/2013.

FINANCIAL LITERACY AND CREDIT COUNSELLING CENTRES (FLCCs)

During the year 2010-11, in order to educate farmers and other people in rural / urban areas with regard to various financial products, Bank schemes and services available from the formal financial sector, the Bank had set up 9 Financial Literacy and Credit Counseling Centres (FLCCs) in all nine Lead Districts in Rajasthan. These FLCCs are providing awareness service, free of charge. Up to 31/03/2014, 111598 persons have been counselled by these centres out of which 23605 persons have been linked with Banks.

A campaign was launched to arrange five awareness camps per month in nearby villages by FLCC Counsellors, which is still continuing and is very beneficial to rural people. In addition to this, a campaign was also launched by way of wall paintings, brochures and pamphlets. The FLCC Counsellors also organized awareness camps in minority concentrated blocks, in their districts.

REGIONAL RURAL BANK

The Marudhara Gramin Bank (MGB) sponsored by SBBJ with its Head office at Jodhpur has a network of 501 branches spread over 12 districts of Rajasthan state namely Pali, Jalore, Sirohi, Sriganganagar, Bikaner, Hanumangarh, Jaisalmer, Barmer, Jodhpur, Nagaur, Jaipur & Dausa. SBBJ continues to provide managerial support and financial assistance by way of refinance etc. to MGB. All branches of MGB are on CBS platform and provide Electronic Fund Transfer facility. MGB had deposits of Rs. 5143.57 Crore and advances of Rs. 3792.89 Crore as on 31.03.2014. MGB recorded Gross Profit of Rs. 80.60 Crore & Net Profit of Rs. 55.50 Crore.

GOVERNMENT BUSINESS

The Bank conducts Government Business on behalf of State/Central Government departments through 494 Authorized Branches. Income Tax, Central Excise, Service Tax, Value Added Tax etc. are collected through physical challans and also through the electronic mode. The Bank has established a Centralized Pension Processing Centre (CPPC) which calculates as well as credits pension to the accounts of pensioners across all the branches. We also have an Online Treasury Branch for online payment of salary of Rajasthan Govt. employees on behalf of the State Govt. Presently our Online Treasury Branch is processing 9 lakh State Govt. transactions received through 18000 digitally signed files in a month. During 2013-14, the commission income from Government business was Rs. 132 crore.

INTERNATIONAL BANKING

The Bank provides Foreign Exchange related services to exporters/ importers, other resident and non- resident customers through a network of 68 Authorized Category "B", 184 Category ''C branches and 4 Trade Finance Central Processing Centres(TFCPCs).

The Bank''s forex dealing room at Mumbai and all the Authorized Category ''B'' branches are equipped with infrastructure of latest technology for real-time communication and are connected through SWIFT network with more than 750 offices of foreign banks throughout the world. The Bank maintains 21 NOSTRO accounts in all major currencies and non-account correspondent banking relationship with all major banking groups in the world. To facilitate NRI customers for inward remittances, there is online remittance facility and tie-ups with 5 Gulf based Exchange Houses.

The Bank also undertakes proprietary Forex trading to increase profit by taking advantage of market movements. Our Merchant Forex turnover stood at Rs. 31678 crore in the FY 2013-14 as against Rs. 26717 crore of last financial year, representing an increase of Rs.4961 crore (18.57 %) during the year.

Our NRI deposits stood at Rs. 1384 crore at the end of March 2014 against the base of Rs.1249 crore in March 2013, registering a growth of Rs. 135 crore (10.80%). Our export credit stood at Rs.2740 crore at the end of March 2014 as against Rs. 2334 crore of March 2013, recording a growth of Rs. 406crore (17.39%) during the financial year.

The Bank chairs the local chapter of Foreign Exchange Dealers'' Association of India (FEDAI). The Bank is also an active member of FEDAI, International Chamber of Commerce (ICC) and Clearing Corporation of India Limited (CCIL).

INDUSTRIAL REHABILITATION

Rehabilitation / restructuring of potentially viable industrial unit remains an important thrust area of the Bank. For this purpose, the Bank has its own Industrial Rehabilitation Policy containing detailed guidelines for undertaking rehabilitation / revival package and the same is updated from time to time. Whenever units are found to be non-viable or not responding to the rehabilitation / restructuring package, the focus is shifted to recovery of Bank''s dues through legal recourse such as action under SARFAESI / compromise settlement / assignment of debt / through courts/ Debt Recovery Tribunals (DRTs).

As at the end of 31st March 2014, the Bank had 23 large sick /weak units on its books with aggregate outstanding of Rs. 405.39 crores. There are 41Corporate Debt Restructuring (CDR) cases with aggregate exposure of Rs. 2069-68 crores and 24 BIFR cases with exposure of Rs. 498.19 crores. The Bank has been acting as BIFR''s Operating Agency in 4 cases. During the year under review, 16 accounts with aggregate exposure of Rs. 954-26 crores have been restructured under CDR mechanism as warranted basically by the tight economic scenario. Sustained efforts are undertaken by the Bank in timely restructuring of the accounts and post sanction close monitoring and follow up have resulted in retaining most of the restructured assets as Standard Assets.

NPA MANAGEMENT

The Bank continues with its multipronged strategy of controlling Non-Performing Assets (NPAs) through intensive monitoring of large value accounts, close follow-up with DRT/BIFR, restructuring of viable accounts and effectively utilizing the remedies available under the SARFAESI and RODA Acts. GMs, DGMs and AGMs posted at Head Office have been assigned the role of mentors of Zones / Regions and Branches to provide support and monitor the NPA level. Due emphasis has been given to follow-up with the Court and filing of Execution Petitions. During the year, large numbers of "Recovery Camps", Bank Adalats and Lok Adalats were organized for NPA recovery, the results of which were quite encouraging. Recovery camps are being held in every village every week. The progress in NPA / AUC recovery is being discussed / reviewed by the Management Committee by conducting Video-conferencing with all the Zones and DGM headed branches. The "Loan Tracking Centre" monitors / tracks the irregular Standard accounts from Head Office level. Pre-emptive measures such as restructuring etc. are also taken, as per RBI guidelines. By adopting the above measures and utilizing the provision of SARFAESI Act effectively, Bank also received a number of acceptable compromise proposals which resulted in good recovery in NPA. There has been an addition of Rs. 2123.54 crore in NPA during 2013-14. However, there has been recovery / upgradation to the tune of Rs. 1110.77 crore. At the end of March 2014, gross NPA ratio of the Bank Stood at 4.18% and Net NPA ratio stood at 2.76%.

LOAN TRACKING

The Bank had set up the Loan Tracking Centre (LTC), a Centralized Outbound Call Centre at Jaipur in June 2011, for follow-up of Personal and SME Segment Loan accounts in IRAC4, IRAC3, IRAC2 and IRAC1 categories to avoid slippages of accounts into hardcore NPAs. Subsequently in July 2012, the LTC started following up AGR segment accounts also. The Call Executives at the LTC make calls to the borrowers, where contact details are available in CBS, in a sustained manner to recover the overdue amount and upgrade accounts in co- ordination with Branches / CPCs.

IMPROVEMENT DONE DURING THE CURRENT YEAR:

(a) LTC has been set up at all the 8 Zonal Offices of the Bank.

(b) Auto-Dialler system has been installed at the Head Office LTC, whereby the telephone / mobile numbers of borrowers are dialled by the Auto-Dialler system and our staff communicates with the borrower using a Head Phone attached with the PC.

(c) With the setting up of Zonal LTCs, all the NPA borrowers of the Bank are contacted, at least once during every 2 months.

RISK MANAGEMENT STRUCTURE OF THE BANK

The Bank has an independent Risk Management framework in place.

At the apex level, there is a Risk Management Committee of the Board (RMCB), which oversees the policies and strategies for Risk Management in the Bank. The Credit Risk Management Committee (CRMC), Asset Liability Management Committee (ALCO), Market Risk Management Committee (MRMC) and Operational Risk Management Committee (ORMC) provide support to RMCB. These sub-committees are required to place all critical issues/ development in their respective areas before the RMCB. The Bank has Credit, Market and Operational Risks Management Policies for identification, measurement and management of major risks. These policies are reviewed and updated from time to time, keeping in view the dynamic business environment. Integrated Risk Management Department (IRMD) at the Head Office, functions under a Deputy General Manager. The IRMD acts as the nodal centre for coordination with other departments/ operating units engaged in managing risk in their respective business areas.

CAPITAL FRAMEWORK

BASEL II : Under Pillar-I of the New Capital Adequacy Framework (NCAF) guidelines issued by Reserve Bank of India, the Bank is computing Capital to Risk Weighted Assets Ratio (CRAR) using Standardised Approach for Credit Risk, Standardised Duration Approach for Market Risk and Basic Indicator Approach for Operational Risk. Under Pillar-II of NCAF, the Bank has assessed capital requirement for 2013-14 for other risks in its Internal Capital Adequacy Assessment Process (ICAAP) document, a copy of which has been submitted to RBI. Basel-II Disclosures have been made by the Bank in the Annual Report as also on Bank''s website as part of the Pillar-III guidelines of NCAF.

BASEL III : In order to improve the quality of capital and address the liquidity risk issues, Basel III Capital Regulation has been implemented in phases in India w.e.f. 01.04.2013. Accordingly, the Bank is computing Capital to Risk Weighted Assets Ratio (CRAR) as per Pillar-I of Basel III framework. With a view to improve market discipline under Pillar 3 of Basel III framework and to improve transparency of capital base, Basel-III Disclosures have been made by the Bank in the Annual Report as also on the Bank''s website.

CREDIT RISK

Credit Risk management remains a major task for Bank and receives prime attention. Control and monitoring of Credit Risk is dealt with as per the Loan Policy and Credit Risk Management, Credit Risk Mitigation & Collateral Management Policy of the Bank approved by the Board. These policies cover methodologies for measuring, monitoring and control of credit risk. In order to control the magnitude of credit risk, prudential norms on benchmark, financing ratios, single borrower or borrower- group exposure, industry specific and sector-specific exposure, exposure to sensitive sectors, hurdle rate for taking a fresh exposure etc. have been set up. Credit appraisal systems and a clearly defined Delegation of Powers form an integral part of the Bank''s Loan Policy.

MARKET RISK

To monitor market risks and treasury operations, mid-offices (domestic & forex) are functional at IRMD. Scenario Analysis on market risk covering events such as decline in stock markets, rise in bond yields and foreign exchange rate movements are conducted regularly as per the Stress Testing Policy of the Bank to assess resilience of Investment portfolio.

OPERATIONAL RISK

One of the major tools for managing operational risk is to put in place a well established internal control system, which includes segregation of duties, clear management reporting lines and adequate operating procedures.

Most of the operational risk events are associated with weak links in internal control systems or laxity in complying with the existing internal control procedures. The Bank has suitable systems and procedures for managing and control of operational risks.

PREPARATION FOR ADVANCED APPROACHES OF BASEL-II

Bank plans to move over to Advanced Approaches of Basel-II guidelines for Credit, Market & Operational Risks in a phased manner. Letter of Intents (LOIs) for all the three Risks have been submitted to Reserve Bank of India for this purpose. On receipt of approval from Reserve Bank of India, Internal Rating Based (IRB) Approach for Credit Risk, Internal Models Approach (IMA) for Market Risk and Advanced Measurement Approach (AMA) for Operational Risk will be followed under Advanced Approaches. This will not only help the Bank to maintain Economic Capital, but will also strengthen the risk monitoring framework and control aspects.

DATA CLEANSING

Augmentation of capital is not only costly but its availability is also scarce. Hence, efforts are being made for optimum utilisation of the existing capital. Bank aims at conservation of capital by improving data quality. Cleansing of data will lead to accurate computation of the Risk Weighted Assets of the Bank and is likely to reduce requirement of additional capital.

ASSET LIABILITY MANAGEMENT

A comprehensive Asset Liability Management (ALM) System is in place for effective management of Liquidity Risk and Interest Rate Risk. These Risks are assessed and monitored through Structural Liquidity Reports and Traditional Gap Analysis respectively. The structural liquidity report is being prepared and reviewed on a daily basis as per RBI guidelines.

Both these risks on Foreign Assets & Liabilities are being monitored through Maturity & Positions (MAP) and Sensitivity to Interest Rate (SIR) statements. The monitoring of liquidity on a dynamic basis, over a time horizon spanning 1-90 days, is in place. Duration Gap Analysis is also used to manage interest rate risk for the entire Balance Sheet.

The Asset Liability Management Policy, coupled with Investment Policy of the Bank specifies various prudential limits for management of Liquidity and Interest Rate Risks. The Bank is regularly monitoring these limits. A comprehensive Contingency Funding Plan and a system of daily monitoring of inflows & outflows of deposits are in place for managing liquidity on a day-to-day basis. Calculation of Value at Risk (VaR) on Foreign Exchange Forward Positions and Stress Testing on Liquidity, Interest rate and Foreign Exchange Open & Forwards Positions is also undertaken regularly.

INTERNAL CONTROL, INSPECTION AND AUDIT

The Bank has in place a well established independent audit system and structure to ensure adequate internal control for safe and sound operations. Internal Audit is carried out under Risk Focused Internal Audit (RFIA) as envisaged under Risk Based Supervision of RBI with focus on assessment of risk and internal control mechanism.

The branches have been categorised into three groups as per risk perception and are subject to varying degrees of audit. During FY 2013-14, 738 Branches and 50 Centres/Processing Centres (under Business Process Re- engineering (BPR) initiatives) have been subjected to Internal Audit. No branch of the Bank remained overdue for audit as on 31.12.2013.

As at the end of March, 2014, 99.90% of the Bank''s branches were rated "Well Controlled" and "Adequately Controlled ".

CONCURRENT AUDIT

106 branches and 35 Centres/ Processing Centres (under BPR initiatives) covering 66.31% of advances and 40.70% of deposits as on 31.03.2013, alongwith 13 Head Office Departments have been placed under Concurrent Audit.

INFORMATION SYSTEM (IS) AUDIT

Information System Audit Cell is in place to conduct IS audit of major IT establishments including Core Banking Project, Zonal Computer Centres, etc. in accordance with RBI directives and Bank''s IT Security Policy.

RECONCILIATION OF INTER- OFFICE TRANSACTIONS

As per the RBI guidelines, all the entries need to be reconciled within a period of six months from the date of their origin. By the end of March 2014, the bank has reconciled inter- branch debit transactions originated up to 28.02.2014 i.e. well before the time limit prescribed. The Bank shall aim at reconciling all entries within two months of their origin.

INFORMATION TECHNOLOGY

1. CORE BANKING SOLUTION (CBS)

All our branches are running successfully on Core Banking Solution (CBS). We were able to provide better customer satisfaction and services by providing many Value Added Services like multi functional ATMs, Internet Banking, Mobile Banking, Flexi Deposit Scheme, Multi City Cheque Facility, instant credit of local and outstation cheques, etc. For all type of Debit/ Credit transactions in CBS, SMS alert is sent to customers, where mobile number is registered with the Bank.

2. ELECTRONIC PAYMENT SYSTEMS: RTGS, NEFT & SBGRPT

Real Time Gross Settlement (RTGS) is an instant payment and settlement system and National Electronic Fund Transfer (NEFT) is a scheme for inter- bank funds transfer operated by the RBI. All branches of our bank are RTGS & NEFT enabled. Our customers can make their inter-bank remittances in a faster and secured manner at very nominal cost. SB Group Payment (SBGRPT) functionality for electronic funds transfer within State Bank Group is also available for customer.

3. AUTOMATED TELLER MACHINES (ATMS)

The Bank has installed 467 new networked ATMs and replaced 123 ATMs during the year to take the tally of ATMs to 1554. All the ATMs are connected to the network of State Bank Group ATMs, thereby enabling more than 62.50 lakh card holders of the Bank to have free of cost access to over 45000 ATMs of the State Bank Group all over the country.

4. INTERNET BANKING

All our branches are enabled to offer Internet Banking facility to our Retail as well as Corporate customers. Looking to the rapid increase in the usage of Internet banking worldwide, the Bank has introduced several new features during the year. Apart from own account and third party transfer within bank, our customers can transfer funds to other banks in online mode. TDS enquiry for Term Deposits from the comfort of their homes or offices, opening / closing of e - TDR / e - STDR / e - Recurring Deposit (RD) account, facility to view the details of Income - Tax Statement (26 -AS) and viewing of Pension Slip is available. Retail Internet Banking facility for visually challenged persons has also been made available. For Corporate customers, a new facility ''SB - Collect'', for on line collection of funds has been provided.

Online payment of direct and indirect taxes e.g. Income Tax, Service Tax, Excise Duty, Customs Duty of Central Government, VAT/CST of Rajasthan State Government and Maharashtra State Government, EGRAS facility for online collection of all Tax and non Tax revenue of Rajasthan Government, facility of online payment of Professional Tax of Maharashtra State Govt. has also been provided. Facility of online application for IPOs using ASBA (Application Supported with Blocked Amount) facility where investor customer continues to earn interest during the application process is available to internet banking users.

Facility of online booking of Railway / Air Tickets has been widely accepted. Electronic payment of railway freight (E-Freight) is gaining popularity. We have integrated number of Aggregators to our online system to provide the payment facility of wide range of merchants, e-commerce services and utility bills to our Internet Banking users.

Bank has taken steps to increase awareness about Internet banking among staff as well as customers through seminars and awareness meets. To popularize online payment of taxes, a facility of "Zero Balance Internet Current Account" has been introduced.

5. MOBILE BANKING & IMMEDIATE PAYMENT SERVICES (IMPS)

Mobile Banking facility was introduced in 2009, for our customers having a Savings / Current Account. The product is named "State Bank Freedom. Presently, there is upper ceiling of Rs. 50000/- for fund transfer and for purchase of goods / services per day within overall calendar month limit of Rs.2,50,000/-. In order to make the registration process more robust and to eliminate the threat of frauds/ phishing attempts, our Bank enabled registrations over ATM/CBS, only if the mobile number entered matches with the mobile number already available in the customer''s CIF in CBS.

"Immediate Payment Service" (IMPS) P2P (Person-to-Person), was launched in our Bank in 2012 for enabling our customers to use mobile instruments as a channel for remitting funds 24 x7 using MMID (Mobile Money Identifier) & Mobile Number. During 2013-14, two more services P2A (Person-to-Account) & P2M (Person-to-Merchant) has been enabled in our Bank to make fund transfer using Account No. & IFS code and to make various utility payments at shops and commercial establishments, ticket booking though IRCTC website etc., The upper ceiling for remittance or payment of bills is same as in Mobile Banking facility.

6. GREEN CHANNEL COUNTER

Bank has implemented "Green Channel Counter" facility at various branches viz. all district headquarters in Rajasthan, branches situated at Delhi NCR, Mumbai, Bangalore and Ahmedabad and other identified urban, semi-urban and rural branches.

It is a paperless, eco-friendly and easy facility for the customers to be carried out through ATM cum Debit Card using a Transaction Processing Device (TPD) placed at the Single Window Operator''s (SWO) terminal connected to CBS terminal of the SWO. Presently this facility is available at 506 branches with 2 such counters minimum at each branch.

7. PREPAID CARDS

The Rupee Pre-paid Card (eZPay Card) has been launched, particularly for salaried persons and students for pocket money and scholarship payments, who undertake only one or two transactions in a month and maintain account for the purpose. The Rupee Pre-paid Card (eZPay Card) is equally useful for the Corporate, who have to make various payments to their staff and vendors. The cards can be reloaded and can be used in any ATM or with any POS merchant, any number of times during their validity period.

8. BUNCH NOTE ACCEPTOR (BNAs)

BNA machines are installed at the Bank''s 2 branches. It is a full-functional freestanding lobby machine installed in the branch''s Banking Hall. The BNA machine is capable of accepting Rs. 49,900/- cash in bundles and receipt is given to the customer and cash is immediately credited to the customer on real time basis.

9. CASH DEPOSIT MACHINE (CDM)

The Bank has planned to install CDM at various High Cash Receipt branches providing 24×7 availability with round the clock security in onsite ATM kiosk. The CDM machine is operable through ATM-cum-Debit card and is capable of accepting cash up-to Rs.49,900/-. Receipt of the deposit transaction is given to the customer and cash is immediately credited to customer''s account on real time basis.

10. SELF SERVICE KIOSKS (SSKs)

75 Self Service Kiosks (SSKs) have been installed at various branches of our Bank. Customers can perform financial and non-financial transactions such as passbook printing, fund transfer etc. using State Bank ATM- cum-Debit Cards at these SSKs. The SSK solution has user friendly touch screen based customer interface.

11. ADOPTION OF ADVANCED IT INFRASTRUCTURE PRODUCTS FOR INTERNAL HOUSEKEEPING AT THE BRANCHES/OFFICES:

I. BIOMETRIC AUTHENTICATION OF CBS USERS

For improved security in Core Banking Solutions, the Bank has rolled out Biometric Authentication Solution (BAS) at branches/offices for the front end tellers using CBS. The solution is used as a second factor for authentication of CBS tellers, the primary mode being the CBS password combination.

II. ACTIVE DIRECTORY SERVICES (ADS )

For enhanced security, Bank has implemented Active Directory Services (ADS) within State Bank Connect Network in all the branches/ offices. Active Directory (AD) provides centralized administration of network and security. It authenticates and authorizes all users and computers in a Windows domain, assigning and enforcing security policies for all computers and facilitates installing or updating software centrally.

III. SB-CONNECT:

At present all 1100 branches/offices are connected through State Bank Connect. A technology shift from ''Point to Point'' to MPLS has been initiated by Bank to ensure seamless best path connectivity at all the branches with availability of redundant circuits at all times. Wifi / Wimax / 3G and 4G modes of connectivity is also under consideration at the Group level, after ensuring information security clearance of these products in our Bank.

IV. ONLINE VOUCHER VIEWING AND VERIFICATION MODULE(OVVVM)

OVVVM has been implemented in the Bank at all branches/offices (other than single officer branches). Same day transactions can be verified by the supervisors after posting of the transactions in CBS. With the viewing / verifying of transactions online on the same day, any fraud / malpractices can come to notice on near real-time basis and adverse position can be avoided to the extent possible.

12. MGNREGA E-PAYMENT

Government of Rajasthan has designated our Bank as the Nodal Bank for MGNREGA e-Payments in the State of Rajasthan. MGNREGA e-Payment system has been implemented for centralized payment of NREGA wages and other expenditures directly to the beneficiaries'' accounts. The project has been smoothly handling about 2 to 2.5 lakh transactions per month.

13. SMS UNHAPPY

The "Project SMS Unhappy" was launched by the Bank with the objective to provide a simple and economical way to the customers to represent their grievances. This has reduced complaint resolution time drastically, to below 48 hours, thereby enhancing the customer satisfaction level and creating a loyal customer pool.

14. INSTANT LOAN SANCTION

Bank is providing the facility of online instant sanction of Housing Loan and Car loan to the customers under the head "Home Loan in 20 minutes" and "Car Loan in 10 minutes" respectively on Bank''s website http: //www.sbbjbank.com.

The customer gets a sanction letter instantly on submitting completely filled application form on Bank''s website, if he fulfills the eligibility criteria.

15. ONLINE LOAN APPLICATION TRACKING SOFTWARE

Bank has introduced a web based application for Online Tracking of Loan application for customer and status of their application can be viewed by customer on internet through our Bank''s website.

16. INFORMATION SYSTEM (IS) SECURITY

With the efforts of the Bank to popularize IT enabled services, the threats and risks to our IT assets have increased manifold. To control these threats and risks our Bank has formulated a comprehensive IT and Information Systems (IS) Security Policy that addresses all these concerns, including maintenance of customers'' confidentiality, security and integrity of data. State Bank''s Data Centre, where our CBS data base resides (both at the Primary and Disaster Recovery Site), has already acquired the accreditation from the International Standard for Information Security Management Systems ISO/IEC: 27001: 2005. All the Banking applications have built-in security features like access control, data encryption and transmission through secured channels, as per requirement of the application. The threat of ''virus'' and ''worms'' is minimized by having a centralized anti-virus solution.

Adequate Firewalls and Intrusion Detection Systems are in place, so as to prevent unauthorized access to the network. The Disaster Recovery Plan (DRP) and Business Continuity Plan (BCP) for all branches are in place.

KNOW YOUR CUSTOMER (KYC)/ ANTI MONEY LAUNDERING (AML)/ COMBATING OF FINANCING OF TERRORISM MEASURES

The Bank follows Reserve Bank of India/ Government of India guidelines on Know Your Customer/ Anti Money Laundering / Combating Financing of Terrorism. Prescribed documents relating to the identity and address are obtained from customers while opening their accounts.

With the objective of Universal Financial Inclusion, Bank facilitates opening of ''Small Account'' by migrant labourers, street hawkers and other poorer sections of the society, with limited KYC documents.

To facilitate inclusion of lower strata of society to mainstream banking, Basic Saving Bank Deposit Account (BSBA) for the customer having prescribed KYC documents has been introduced. BSBA shall not have the requirement of minimum balance. At the same time, the entire range of services available to a normal saving bank account is extended to this product.

In order to identify and examine suspicious transactions, the Bank has installed the AMLOCK software besides setting up an Anti Money Laundering Cell at the Head Office. The customers'' accounts have been allocated different risk categories and alerts are generated once any transaction exceeds a predefined threshold limit.

These alerts help in identification of suspicious transactions, which are further reported to the Financial Intelligence Unit, Government of India, in appropriate cases.

DEMAT SERVICES

Our Bank is providing Depository Participant Services with National Securities Depository Limited (NSDL) to our customers, wherein they can hold their securities as electronic book entries and transfer securities, without actually handling physical scripts. Customers can also obtain loans against Demat shares. SBBJ is registered with NSDL as a Depository Participant.

CUSTOMER SERVICE:

Customer Service is a top priority for the Bank. We are in a service industry and our success to a very large extent depends on the satisfaction level of our customers. The environment we operate in is increasingly becoming intensely competitive.

The meetings of the Customer Service Committee of the Board and Standing Committee on Customer Service were convened at regular intervals to review the position of customer service rendered. Similar committees are also functioning at branches, Zonal Offices and Head Office, which helps in continuous improvement in service standards.

The Bank is a member of the Banking Codes and Standards Board of India (BCSBI) and has voluntarily adopted a ''Code of Bank''s Commitment to Customers,'' which sets a framework for setting a minimum standard of banking services to be provided by the banks. An awareness camp for BCSBI code was organised at Jaipur on 19 November 2013 in coordination with BCSBI.

CUSTOMER GRIEVANCES REDRESSAL MECHANISM:

The Bank has put in place a multi pronged grievances redressal mechanism to suit varied customer requirements. An aggrieved customer can either make a written complaint at branch / Regional / Zonal / Head Office of the Bank or make an online submission in the form provided on the Bank''s website / through e-mail against acknowledgement.

DISCLOSURE OF COMPLAINTS/ UNIMPLEMENTED AWARD OF BANKING OMBUDSMENT :-

In terms of RBI circular DBOD.No.Leg BC.60/09.07.005/2006-07 dated 22.02.2007, the information in respect of customer complaints and awards passed by the Banking Ombudsman is given in the Table below :-

A. Customer Complaints

(a) No. of Complaints 71 pending at the beginning of the year

(b) No. of Complaints 6470 received during the year(*)

(c) No. of Complaints 6434 redressed during the year(*)

(d) No. of Complaints 107 pending at the end of the year

(*) Excluding 1499 Complaints found non maintainable.

B. Awards passed by the Banking Ombudsman (BO)

(a) No. of unimplemented 01 Awards at the beginning of the year

(b) No. of Awards passed by 17** the Banking Ombudsman during the year

(c) No. of Awards 12 implemented during the year

(d) No. of unimplemented 03 Awards at the end of the year(in 2 cases Appeal has been made before Appellate Authority and in 1 case matter in under process)

** Out of the remaining 3 cases, under 1st case BO Delhi has re-examined the case and cancelled the award against the Bank. In 2nd case, the complainant not accepted the award and in another one, the appeal allowed and award passed by BO is set aside by the Appellate Authority.

ATM COMPLAINTS

To monitor the ATM failed transactions related customer complaints received at the branches, ATM Complaints Reconciliation Cell has been established at Head Office. Reserve Bank of India has prescribed that all ATM related complaints be resolved within 7 working days. For faster resolution /redressal of complaints, an online ATM Complaint Management System (ATMCMS) has been developed and implemented. During the year 2013-14, the Bank has received 20567 ATM failed transactions related complaints, out of which 20477 complaints were resolved. No home bank complaint (where customer and ATM both belong to our bank) is pending for more than 7 working days. Number of complaints pending for more than 7 days, where claim is pending with other banks, is 3.

THE RIGHT TO INFORMATION (RTI)

The Right to Information (RTI) Department was constituted at the Bank''s Head Office in December, 2010 for better coordination and effective implementation of the Right to Information Act, 2005 . The Department has since then been instrumental in ensuring that information sought for under the various RTI applications received by them is dispensed with efficiently and effectively in a time bound manner as per the provisions of the RTI Act, 2005 and that the appeals too, if received, are redressed timely, while also complying with the directives of the Hon''ble Central Information Commission (CIC) in this regard.

During financial year 2013-14, the RTI Department received 1553 applications under the RTI Act, 2005, out of which 1532 applications were disposed off. 21 applications were awaiting disposal as on 31st March, 2014, and these were all pending for less than 30 days.

Besides, the Department also received 73 appeals under the RTI Act, 2005 during financial 2013-14, out of which 71 appeals were disposed off. 2 appeals were awaiting disposal as on 31st March, 2014, and these also were pending for less than 30 days.

BUSINESS PROCESS RE-ENGINEERING

Business Process Re-engineering (BPR) Initiatives stabilized further during 2013-14 and their coverage was extended to more branches. Bank operates 12 city-centric loan CPCs, viz. Retail Assets Central Processing Centre (RACPC)/ Small & Medium Enterprises City Credit Centre (SMECCC)/ Retail Assets and Small & Medium Enterprises City Credit Cell (RASMECCC) having end- state at 11 centres with 275 branches linked to them. Coverage of Rural Central Processing Centre (RCPC) was increased to 374 branches at 19 centres. 22 Relationship Managers- Medium Enterprises (Hub Model) and 1 Relationship Manager-Small Enterprises are working at 14 major business centres.

Non loan CPCs/ initiatives, viz. Liability Central Processing Centre (LCPC), Trade Finance Central Processing Centre (TFCPC), Currency Administration Cell (CAC), Central Pension Processing Cell (CPPC), Clearing CPC (CCPC), Multi Product Sales Team (MPST), Relationship Manager-Personal Banking (RMPB) have helped in further improvement in customer service. The coverage of various non loan CPCs / initiatives as on 31.03.2014 vis-à-vis 31.03.2013 was as under:

CPC / Branches Covered Initiative 31.03.2013 31.03.2014

LCPC 996 1097

TFCPC 122 124

CAC / 155 180 SCAB

Clg. CPC 224 250

CPPC 844 909

Branch Re- 185 196 design

During the Financial Year 2013-14, the following developments took place to make CPCs / initiatives more effective and to optimize gains:

- In Branch Cash Handling (IBCH) has been rolled out w.e.f. 15.06.2013.

- RASMECCC at Bhiwadi centre started functioning w.e.f. 31.01.2014.

- CAC at Delhi centre started functioning w.e.f. 26.02.2014. Shifting of back office activities to loan CPCs, implementation of revised roles for branch functionaries and better ambience in branches has not only improved the Bank''s image but also helped the linked branches to focus more on customer service and marketing for business.

CURRENCY MANAGEMENT DEPARTMENT

Owing to our Bank having the highest market share in Rajasthan, RBI has designated our Bank''s 199 branches as Currency Chest branches in the state and 15 Currency Chest branches in other parts of the country. All our Currency Chest branches are undertaking the following activities in an efficient manner:-

1. Circulation of New Currency Notes among Public.

2. Distribution of Coins to the Public.

3. Exchange of torn/damaged/ soiled/mutilated notes.

4. Providing of linkage facilities to branches of other banks which are linked to them.

5. Our 9 branches are providing facilities of Note Exchange and coin distribution on 3rd Sunday of every month and 6 branches are providing facilities of Note Exchange and coin distribution on 3rd Sunday of alternate month.

CROSS SELLING

The Bank continues to market life and non-life insurance, mutual fund and credit card products in order to augment its non interest income. For the purpose, the Bank has in place tie up arrangements with SBI Life Insurance Co. Ltd., SBI General Insurance Co. Ltd., SBI Fund Management Pvt. Ltd. and SBI Cards and Payments Services Pvt. Ltd. Various campaigns were launched for marketing of these products, and the bank earned a total income of Rs. 20.03 crore from cross selling activities.

COMMUNITY SERVICES BANKING

As a responsible Corporate Citizen, the Bank undertakes community based social activities such as tree plantation, free health check up & blood donation camps, establishing of water huts and water coolers, sponsoring prizes / kit for sports competitions, honouring meritorious students etc. During the year 2013- 14, the Bank donated Rs. 1.00 crore for Uttarakhand Chief Minister''s Relief Fund and Rs.25 lakh for Odisha Chief Minister''s Relief Fund as assistance in relief measures to people affected by natural calamity. The Bank also provided 5 ambulances, one each to Maheshwari Hospital & Research Centre Trust, Jaisalmer, Ram Niwas Dham Trust, Shahpura, Bhilwara, Sant Sukhdev Shah Memorial Religious & Charitable Trust, Alwar, L.K.C. Shri Jagdamba Andh Vidhyalaya Samiti, Sriganganagar and People Welfare Society, Sikar as also one Antim Darshanika Vahini (Mortuary Van) to Jagriti, Jaipur.

Other activities or financial assistance by our Bank are listed as under :-

- Providing of Water purifiers and ceiling fans by every branch of the Bank to its nearby School which had scarcity of funds.

- Provided medical equipments to Manav Sewa Sangh, Jaipur, which has been providing free treatment of Bone Marrow Transplantation to Thalassemia affected children of poor families.

- Financial assistance to Society for Rational Development, Jodhpur for free education to poor children in rural areas.

- Providing of Computer, Projector, Laptop, Printer and T.T. Table to ''Udayan Care'' Jaipur, an NGO which shelters, educates and rehabilitates, orphaned/ abandoned children.

- Providing of Computer & Projecter to ''I Create'' Jaipur, an NGO which organizes training programmes and vocational training for youth and women.

- Provided furniture to ''Vimukti Sansthan'' engaged in providing free education and vocational training to girls in slum areas.

- Donated Generator to RamaKrishana Mission, Khetri for running various welfare activities like health support programmes (free eye surgery) and providing nutritious food for poor children and their mothers.

- Branches of the Bank Continues to adopt one girl child each from a poor family with an objective of providing financial assistance for pursuing their studies in Government /Municipal Schools.

- Distributed 200 folding sticks to poor blinds at Blind & Humanity Welfare Centre, Mumbai.

- Provided Roti Making Machine to Manav Sewa Samiti Udaipur, serving poor people by way of providing free meals to attendants of patients at Hospitals.

- Provided Vela Ventilator (Life Saving Equipment) to Sheth D.C.Shroff Ashaktashram Hospital, Surat which is charity based hospital.

Bank shall remain dedicated to respond to the needs of the less fortunate and under- privileged members of the society and will also do its bit for a clean environment.

BRANCH EXPANSION

During 2013-14, the Bank opened 113 new fully computerized branches which includes 34 branches in unbanked rural centres in Tier V and VI. 25 branches were inaugurated online from the Head Office on 27.02.2014.

As on 31.03.2014, the total number of branches of the Bank stood at 1148, the category wise distribution thereof being as under:

Rural Semi Urban Metro Total Urban

416 308 214 210 1148

The Bank continued to maintain its dominant presence amongst all other banks in the State of Rajasthan with a network of 932 branches as on 31.03.2014, with 699 branches being located in rural and semi urban areas.

The Bank continues to play a pivotal role in the socio-economic development, alleviation of poverty and resultant overall uplift of the masses in the State .

HUMAN RESOURCES DEVELOPMENT

The Bank''s staff strength as on 31.03.2014 was 13359 employees, with the following break up: -

AS ON 31.03.2014 OUT OF WHICH

STAFF CADRE SC ST GENERAL TOTAL WOMEN MINORITY

OFFICERS 1058 489 3837 5384 695 368

CLERKS 936 584 3744 5264 918 317

SUB-STAFF 318 219 1418 1955 125 67

SAFAI 591 19 146 756 234 6 KARAMCHARI

TOTAL 2903 1311 9145 13359 1972 758

Out of the Bank''s total staff strength as on 31.03.2014, 2903 (21.73%) belong to SC and 1311 ( 9.81%) to ST categories which is well above required percentage. SC/ST cell to safeguard interests of SC/ST employees is also well in place. Reservation policy is implemented in our Bank as per Government guidelines.

Necessary complement of staff has been made available for working in new frontiers like Core Banking Solution, Tele-banking, Internet Banking, ATMs, Credit / Debit cards, marketing, Cross Selling, Business Process Re-engineering etc. The Bank has been according high priority to training and sensitization of staff members to respond to the customers'' expectations and deliver modern banking facilities in the technology- driven environment.

Human Resource is the most important constituent and quintessence of an organization and its progressive development has now become a major corporate concern. An organization should be able to bring in proper integration of human resources management strategies with the business strategies. Qualitative training for human resources has become necessary for improvement of their efficiency. As most of the senior functionaries / operational staff are going to retire in next 2-4 years, the Bank, has to develop a second line of expertise and enable them to cater to the needs of its esteemed customers and the Organization . Looking to these facts, a total no of 8981 employees of all categories, including 787 employees of the sponsored RRBs, were provided training opportunities on various subjects related to banking and technology at all the three Staff Training Centres (STCs) of the Bank during the year.

The Bank also provided pre-promotion training to 27 SC/ST Clerical candidates, eligible for promotion to Officer Cadre Group A / B & 167 SC /ST Sub-Staff candidates eligible for promotion to Clerical Cadre during the year. In addition to this, 37 seminars / workshops were conducted on various burning issues to update skills of employees. More thrust has been accorded to Mobile Banking, Internet banking, ATM services, Soft skills, System & Procedures, Marketing, quality services to the customers, in view of the ever changing customer needs. In this direction we have also conducted 39 one day Motivational Programmes for Clerks encompassing 1518 clerks.

Two HR Conclaves were conducted by us - The first one for the Top Executives was held at Jaipur from 26.07.13 to 28.07.13, which was an open discussion for continuous growth of our Bank, NPA management etc. The second conclave was held at Udaipur from 29.11.13 to 30.11.13 wherein the target group was Controllers and was meant for team building and leadership development / BPR initiatives / NPA management.

Apart from in-house training, the Bank has provided facility of training to its officers in specialized areas at Apex Training Institutes like State Bank Academy, Gurgaon, State Bank Staff College, Hyderabad, SBIICM Hyderabad and SBIRD Hyderabad. During the said period, 1308 officers have been trained at these external agencies in different areas of Banking. For various other programmes, we have also deputed our officers for training to IDBRT, NIBM-Pune, CAB- Pune and FEDAI Mumbai.

During the financial year 2013-14, we deputed 10 officers for specialized training programmes abroad viz : - 24th Annual Forex Assembly of Forex Association of India at Dubai, Deutsche'' Bank International Banking Seminar at New York, Seminar & Annual Meeting of the IMF & World Bank Group at Washington,DC (USA), 12th Advanced Management Programme towards Next Orbit :Indian Banking Sector at Delhi, Paris, Milan and Berlin, Programme on Leadership Development for Corporate Excellence in Collaboration with Kellogg School of Management - North Western University, USA, 13th Advanced Management Programme "Building Global Competitive Edge in the Banking Sector" held at Delhi, Paris, Milan and Berlin.

Our "Gyanodaya" e-learning (anywhere, anytime learning) portal is in full swing. Due to our efforts for increasing the number of registrations by providing incentive of recognition and reward , a link to access the portal from the intranet site and by making it mandatory for newly promoted clerks/officers to pass at least 10/15 tests, the number of registrations has increased to 3297 (27.03.2014) and is increasing every day.

In the scheme of deputing top executives (GMs and DGMs) of the bank to one training programme of their choice, at reputed external training institutions, we deputed DGMs to IIM Ahmedabad and IIM Banglore. We also conducted 05 training programmes in the specialized area of Credit Management / SME Business / Analysis of Financial Statements / Corporate Credit with the support of outside faculty.

ORGANISATIONAL PLANNING

For faster credit dispensation by bringing credit decision nearer to business centres and customers as also to meet competition from other banks, the Delegation of Powers of various Credit Committees were revised and new credit committees (NWCC & RCC) were constituted to ease pressure on the HOCC- II & ZOCC. The financing powers for allied & general matters and advance related matters were also steamlined to impart more effectiveness. The Delegation of Financial Powers up to Scale -V was consolidated for ready reference to the staff. ATM Cell Mumbai was rechristened as ATM Nodal Office, Mumbai and reallocated under DGM (IT), in line with the other Associate Banks for sake of uniformity. The Calendar of Reviews submitted to the Board/ ACB/ M.Com was streamlined to impart more efficiency in the decision making process.

STAFF WELFARE

The Bank believes in keeping the morale and motivation of the employees high, considers employees as its most important assets and accords high priority to their welfare.

The Bank undertook following staff welfare activities

1. Granting of Scholarship to the meritorious wards of the employees.

2. Providing free medical consultancy services at various hospitals.

3. Insurance cover for employees to the extent of Rs.8.00 lakh f 16.00 lakh for accidental death) under Group Insurance Scheme of SBI Life.

4. A total amount of Rs.3.00 lakh outstanding in various loan a/ cs viz. Housing Loan, Overdraft limit (Personal loan), PF Loan, Conveyance Loan is allowed to be waived for employees who die in harness .

5. A one-time award of Rs. 10,000/- for education to one ward of the deceased employee is also given.

6. Reimbursement of funeral expenditure is being made to the extent of Rs. 10,000/- from staff welfare fund for both serving and retired employees.

7. Annual Health Check up scheme is extended to the spouse of the employees who are within the age group of 41 to 49 years.

8. For employees who are on leave for debilitating sickness and are on loss of pay, an amount of Rs. 15000/- per month (upto 24 months during the entire service period) is paid.

9. The Bank has set up Holiday Homes at Jaisalmer, Chandigarh, Mussoorie, Jaipur, Manali, Mumbai, Goa, Delhi, Haridwar, Katra, Bengaluru, Mt. Abu, Vrindavan and Udaipur. This facility is also available for retired employees.

10. Various cultural and sports activities were organized during the year.

INDUSTRIAL RELATIONS

The Bank has a long history of harmonious and cordial relations with both supervising as well as workmen employees enlisting their total commitment, support and cooperation. The Employee''s Union and Officers'' Association have extended their wholehearted cooperation for the all-round growth of the Bank. A well established and on going consultative machinery is functioning at various tiers of the administration for resolving issues through joint consultations and negotiations.

VIGILANCE ADMINISTRATION

Vigilance Administration is an integral part of the management. Vigilance activities are accorded high priority in the Bank. Keeping in view the paramount importance of the preventive vigilance, greater emphasis is laid on the preventive measures. Preventive Vigilance training programs have been conducted to improve skills of the staff. In other training programs conducted at Bank''s Training Centres also, areas with focus on "How to be a Vigilant Employee" and "Areas of Concern from Vigilance Angle" are dealt with. The training platform of the Bank has been effectively used to create awareness amongst all officials about Vigilance function, areas of concern where officials need to pay more attentions, nature of fraud/ serious irregularities taking place, determination of vigilance angle and how bonafide actions of the officials can be protected. The interaction and feedback from the participants has been used to identify operational risk areas and to suggest systematic improvement if any. Sensitization of officials on Vigilance related issues was also done at various Zones. Preventive Vigilance Committee set up has been revamped. Accordingly, branches having staff of 10 or more, processing centers irrespective of staff strength, unsatisfactory rated branches and fraud detected branches have been included for formation of Preventive Vigilance Committee. Meeting of Preventive Vigilance Committees are held regularly where staff is sensitized towards preventive vigilance measures. Complaints received in the Vigilance Department are dealt expeditiously and investigations were conducted wherever needed. An independent Internal Advisory Committee is functioning to examine all cases to decide whether there is a Vigilance Angle. Significant emphasis is laid on the transparency in the tendering process (procurement of goods and services, auctions, etc.) by the Bank. The tenders issued by the Bank are uploaded on the Bank''s website as well as Government of India website.

An In-house magazine titled as "Vigilance Bulletin" is published every quarter with an objective to create vigilance awareness amongst staff. Many new initiatives have been taken as preventive measures like Biometric login system, Electronic Voucher Verification, On line Tracking of status of loan application by the applicant, better pre-sanction due diligence process etc. Scheme of Recognition & Alertness Award for staff in respect of detection / foiling of frauds has been revamped and amount of incentive has been increased. Whistle Blower Policy has been implemented in the Bank whereby any staff member can provide information on any malpractices or instances of misuse of official powers where the identity of informer will be protected

The department disposed of 440 complaints, 104 Investigations and 32 preventive vigilance inspections were conducted. 90 disciplinary cases having vigilance angle have been concluded during the year 2013-14.

USE OF HINDI

The implementation of Official Language Policy in the Bank is not only a statutory requirement but also a business need. The Bank made all possible efforts to comply with the statutory provisions relating to the Official Language Policy of the Govt. of India during the year and took several initiatives to provide benefit of Bank''s different schemes to the masses through Hindi Language.

During the year 2013-14, the Bank made significant progress in promoting and propagating the use of Official Language and ensured compliance of various other statutory requirements framed under the Official Language Act /Official Language Rules. The Bank made all possible efforts to achieve the targets set by Official Language Deptt. Ministry of Home affairs, Govt. of India.

Bank continued its efforts to promote use of Hindi in the field of information Technology. A portal of Rajbhasha Vibhag was made available on Bank''s Infonet site. Various useful materials like Hindi typing tool, format of Quarterly Progress Report, Annual Programme etc. were made available on the portal. Officers/employees were imparted desk training to work on computer in Hindi with the help of Unicode.

Hindi Day and Hindi-fortnight were celebrated in Offices/Branches of the Bank in the month of September 2013 and various competitions were conducted for the staff members. An All India Hindi Essay competition was also conducted by the Head Office. To increase progressive use of Hindi Head Office Rajbhasha Trophy competition (Head office and Zonal level) was organized during the year. A Seminar was organised on 4th March, 2014 for all Hindi officers/nominated Hindi officers of our Bank.

Bank''s quarterly in House Rajbhasha magazine "Upwan" is being published regularly. Since last two years this magazine had been awarded consolation prize by Reserve Bank of India. During the year State Bank of Bikaner and Jaipur has been awarded consolation Prize by RBI for the progressive use of Hindi among Region "A".

Representative of Govt. of India also visited our Zonal Office Delhi , Kota , Regional Office Chandigarh, Sonipat, Amritsar, Ghaziabad and Saket branches and appreciated our efforts. Bank TOLIC Jaipur and Kolkata and TOLIC of Jodhpur and Kota also awarded our Bank for Official Language implementation.

AUDIT

State Bank of India, with the concurrence of the Reserve Bank of India, approved the appointment of 5 firms of Chartered Accountants viz. M/s. Agarwal Anil & Co. of Delhi, M/s. M K Aggarwal & Co. of Delhi, M/s. Chaturvedi & Co. of Kolkata, M/s. Uberoi, Sood & Kapoor of Delhi and M/s. P S D & Associates of Jaipur as the Statutory Central Auditors of the Bank for the year 2013-14. During the period under review, the scope of audit covered 664 branches / centralized processing units as against 587 branches/centralized processing units covered in 2012- 13.

RESPONSIBILITY STATEMENT

The Board of Directors hereby states:

1. That in the preparation of the annual accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

2. That they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Bank as on the 31st March 2014, and of the profit or loss of the Bank for the year ended on that date;

3. That they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Banking Regulation Act, 1949, and State Bank of India (Subsidiary Banks) Act, 1959 for safeguarding the assets of the Bank and preventing and detecting frauds and other irregularities; and

4. That they have prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE

The details on Corporate Governance are annexed.

ACKNOWLEDGMENT

The Board of Directors is grateful to its valued customers, esteemed shareholders and the public at large for their patronage and confidence reposed in the Bank and places on record its deep appreciation. The Board of Directors thanks the Government of India, State Bank of India, Reserve Bank of India and other regulatory agencies for their valuable support and guidance throughout the year.

The Board of Directors places on record its deep appreciation of the commitment, sense of involvement and dedication exhibited by each staff member and constructive role played by the Employees'' Union and Officers Association in the overall development, growth and prosperity of the Bank.

For and on behalf of the Board of Directors

B. Sriram

Managing Director

Place : Mumbai

Date : 23rd April, 2014


Mar 31, 2012

The year 2011-12 has been a year of major turbulence in the global economy triggered by the Euro Crisis, emanating from Greece, Ireland, Portugal and Cyprus and spreading to Italy and Spain, impacting not only Europe but the whole of the world and culminating into an overall economic crisis. The year was replete with a mixed sense of optimism and concerns. The optimism was attributed to a somewhat encouraging 'two speed' recovery in advanced and emerging economies, after a major slump. As per World Bank study, Indian economy is expected to grow faster than China. As inflation has emerged a major concern across the border too, China has seen the back of its fiscal stimulus. China and India have seen rapid growth and have helped push-up the global growth rate.

FINANCIAL HIGHLIGHTS

NET INTEREST INCOME

The Bank's total interest income increased from Rs4796.48 crore during 2010-11 to Rs6291.36 crore during 2011-12, recording a growth of 31.17%. Interest expenditure increased by 34.47% to Rs4069.96 crore, as against Rs 3026.76 crore in the previous year. The net interest income recorded a growth of 25.52% toRs2221.40 crore, as againstRs1769.72 crore in 2010-11. The net interest margin increased from 3.38% for the year ended March 2011 to 3.70% for the year ended March 2012.

NON INTEREST INCOME

The non-interest income of the Bank declined by 6.37% from Rs639.70 crore in 2010-11 to Rs598.97 crore during 2011-12. The decline during the year under review, as compared to the last year, is on account of decrease of Rs28.30 crore in Government Commission, Rs38.64 crore in profit on forex turnover, Rs12.59 crore in profit on sale of investments and Rs4.72 crore in exchange/brokerage. However, other commission has been increased by Rs44.90 crore.

OPERATING EXPENSES

The operating expenses recorded a growth of 4.85% from Rs1269.17 crore in 2010-11 to Rs1330.76 crore during 2011-12. Of this, employee costs decreased by 0.86% to Rs819.82 crore, while other operating expenditure increased by 15.54% to Rs510.94 crore.

PROFIT

During 2011-12, the operating profit increased to Rs1489.61 crore, recording a growth of 30.64% as against Rs1140.25 crore in the previous year. The net profit recorded a growth of 18.36% from Rs550.88 crore in 2010-11 to Rs652.03 crore in 2011-12.

KEY FINANCIAL INDICATORS

The Return on Assets of the Bank stood at 0.99% during 2011-12 as against 0.96% in the previous year. The return on equity decreased to 15.66% as against 19.32% in the previous year. The earnings per share also decreased from Rs101.53 in 2010-11 to Rs95.05 in 2011-12, while the book value per share improved from Rs570.16 in 2010-11 toRs594.98 in 2011-12. As at end-March 2012, the capital adequacy ratio of the Bank stood at 12.81 % and 13.76% as per Basel I and II norms respectively, as against 11.32% and 11.68% as per Basel I and II norms respectively, as at end-March 2011. This was well above the RBI benchmark of 9%. Due to rise in NPAs on account of continued stress faced by the industrial sector coupled with agriculture NPAs, the Bank's Gross NPA ratio and Net NPA ratio increased from 2.0% and 0.83% respectively as at end-March 2011 to 3.30% and 1.92% respectively, as at end-March 2012. The average business per employee increased to Rs827 lakh during 2011-12, as against Rs751 lakh in the previous year. The net profit per employee improved to Rs5.42 lakh during 2011-12, compared toRs4.84 lakh during 2010-11. The average business per branch increased to Rs104.73 crore during 2011-12, as against Rs94.72 crore in the previous year.

DIVIDEND

During the year 2011-12, the Bank declared an Interim Dividend of 145% i.e. Rs14.50/- per equity share (face value of share Rs10 per share) as against 164% i.e. Rs16.40 per share. Record date for ascertainment of entitlement of shareholders for interim dividend was 27th March, 2012. Interim dividend may be treated as Final dividend.

CREDIT MANAGEMENT

The overall credit demand remained buoyant during the FY 2011-12, in line with the economic recovery. However, the Bank continued to focus on qualitative credit growth and faster credit delivery with emphasis on Agricultural sector, Small & Medium Enterprises (SMEs) and Large Corporates with further emphasis on financing to infrastructure sector. Total advances of the Bank grew by 19.74% during 2011-12, as against a growth of 17.40% during 2010-11.

The Bank's Commercial & Institutional (C&I) segment advances (other than food credit) registered a growth of Rs4,978 crore (23.44%), while non-C&I segment comprising personal, small business and agriculture advances increased by Rs3,205 crore (16.34%) during 2011-12. The impetus of fnancing remained mainly towards infrastructure development, such as power, road, ports and petroleum, besides other sectors such as steel, textiles and non-banking finance companies.

During the year, the Bank sanctioned credit facilities aggregating Rs9,430 crore to 122 high value new customers under C&I segment, besides enhancing credit limits to the existing customers based on their requirements. Centralized Processing Cell (CPC), set up at Head Office for high value advances under Business Process Re-engineering initiative of the Bank, continued to appraise/ assess the advance proposals of high value promptly.

In view of the prevailing competitive market scenario, closer interaction and regular meetings by the Top Management with high value customers were held at major centres i.e. Delhi, Mumbai, Kolkata, Hyderabad, Ahmedabad, Pune, Jaipur, Udaipur and Bhilwara.

PERSONAL BANKING

During 2011-12, personal segment deposits recorded a growth of Rs6,114 crore against the target of Rs9,000 crore, resulting in YOY growth of 20.69%. Deposit mobilization campaigns were launched for improving the pace of acquiring new Savings Bank customers. One such campaign, namely "AKAASH", was launched on 1st Sept 2011 to acquire 500000 new SB accounts. During the year, the Bank opened a record number of 11.36 lakh new savings deposit accounts as against 9.83 lakh accounts in the previous year. Bank is celebrating the Year 2012 as "Golden Jubilee Year". To make this year memorable and growth oriented, a new product named "SBBJ- 7STAR SAVINGS BANK ACCOUNT" has been launched. This product has features aimed to attract High Net Worth, young and Tech Savvy customers by bundling the 7 technology equipped products in the account. Interest rates were also synchronized during the year in line with the market scenario.

Consequent upon creation of Personal Banking Vertical, to energize the personal banking streams of

Home Loan and Car Loan, Bank rolled out Home Loan & Car Loan centers, headed by senior officers of the rank of Asstt General Manager and Chief Manager respectively, as product specific special marketing units at Head office during the year ended 31st March 2012. To leverage the reoriented set up in the Personal segment department, 22 business potential centres were identified and named as STAR centres, covering 248 branches of the Bank all over India.

During the year, to attract prospective customers and to take maximum leverage of Technology, Bank started a unique initiative, first of its kind in Indian Banking space for online sanction of Car Loans in 10 minutes and online sanction of Home Loans in 20 minutes. These links are made available through our Bank's website, 'sbbjbank.com'. To cater to the online loan applicants and to translate these applications into business, Bank has put in place one 'Online Business Centre', which tracks the status of these applications. To keep the pace with the market trend, Bank has reoriented and modified existing schemes, such as Home loan, Car loan and Personal Loan and extended concessions in Interest rates, Processing fee and relaxed eligibility norms.

Despite the gloomy economic scenario coupled with rise in lending rates and RBI's tightening liquidity norms, the Bank booked 1.09 lakh new advances accounts and disbursed Rs2349.49 crore under various loan schemes under the personal banking segment. Car loans and housing loans recorded a growth of 25.51% and 8.50% respectively in 2011-12. During the year, growth of personal segment advances moderated to Rs692.36 crore (9.46%) as against Rs928.66 crore (14.53%) in the previous year.

The Bank, at the behest of Ministry of HRD (MOHRD), Government of India, implemented an Interest Subsidy Scheme for "Economically weaker section (EWS) of Education loan borrowers" and "1% Interest Subvention scheme for Housing loan borrowers having loan amount of Rs10/15 lac and project cost Rs20/25 lac" through RBI. Subsidy of Rs6.24 crore in 5815 accounts claimed and received in Education loan accounts of EWS category and subvention of Rs1.20 crore in 6151 accounts was claimed and received in home loan accounts.

PRIORITY SECTOR LENDING

Priority sector advances continued to remain the major thrust area of the Bank's operations. As at end- March 2012, the Bank's priority sector advances increased to a level of Rs17689.96 crore as against Rs15111.85 crore in the previous year. This constituted 42.38% of the Adjusted Net Bank Credit, which was above the RBI benchmark of 40%. Priority sector advances in Rajasthan stood higher at 62.76% of Rajasthan's ANBC.

AGRICULTURE

Lending to agriculture remains one of the major thrust areas of the Bank. The flow of credit to agriculture by way of disbursement increased from Rs4,636 crore in 2010-11 to Rs6,825 crore in 2011-12, recording a growth of 47.22%. The outstanding level of agriculture advances increased by 23.46% from Rs7,316 crore as at the end March, 2011 to Rs9,032 crore as at end of March, 2012.

Agriculture credit constituted 21.64% of the Adjusted Net Bank Credit, which was above the RBI benchmark of 18%. In the state of Rajasthan, the agricultural advances stood even higher at 36.75% of the Adjusted Net Bank Credit.

The Bank issued 128271 Kisan Credit Cards (KCCs) with sanctioned amount of Rs1,880 crore during the financial year, taking the total number of KCCs to 461913 as at end-March 2012. The Bank has added 172 new farmers per rural and semi-urban branch during the year.

In order to bring the farmers out of the clutches of the money lenders, the Bank introduced a Debt Swap Scheme in the year 2008. During 2011-12, assistance disbursed under the Debt Swap Scheme stood at Rs84.15 crore, benefiting 20912 farmers. The outstanding assistance under the scheme increased from Rs242.83 crore as at end-March 2011 to Rs291.42 crore as at end-March 2012. The number of beneficiaries under the Scheme also increased from 57153 in the previous year to 70377 farmers in March 2012, recording a growth of 23.13%. By providing financial assistance under this scheme, Bank has made the villagers of 42 villages completely free from the clutches of private money lenders.

FINANCIAL INCLUSION

Financial Inclusion aims to extend hassle free savings, loans and other services at an affordable cost to the under privileged and unbanked population living in remote villages. Our Bank has embarked upon its journey to implement the FI initiatives in the unbanked service area villages through ICT enabled banking correspondent outlets. 830 villages with population of 2000 and above have been allocated to our Bank for providing banking services by 31.03.2012. 796 business Correspondents have been engaged to cover 825 villages and in the remaining 5 villages brick and mortar branches have been opened. 195927 accounts have been enrolled and 63525 Smart Cards have been issued to the customers. Presently Savings Bank product is offered to the customers in FI villages and other products such as remittances, insurance etc. will be offered gradually in due course.

FINANCIAL LITERACY

Bank is actively involved in Govt. of India sponsored Swabhimaan campaign enlightening the rural populace about FI initiatives. Pamphlets, brochures detailing the advantages of Saving Bank accounts are distributed in FI villages to educate the rural public about the Bank's FI initiatives. Our Bank has already set up Financial Literacy & Credit Counseling Centres (FLCCs) in all the nine Lead Districts to impart literacy among rural population. These FLCCs have conducted 163 literacy camps and counseled 19197 persons during the year 2011-12. Apart from this, the Bank has also set up 8 Rural Self Employment and Training Institutes (R-SETIs) to train the potential Small Entrepreneurs to start their own ventures / business / entrepreneur for self employment in rural areas. The 8 Rural Self Employment and Training Institutes (R-SETIs) have so far trained 19198 rural unemployed youth for various trades i.e. electric work, tailoring computer repair etc. Out of 19198 trained persons, 10029 persons belong to BPL families.

AADHAAR PROJECT OF UIDAI

UIDAI has been setup by the Government of India with a mandate to issue a unique identification number to all the residents in the country based on demographic and biometric data of the individual. UIDAI has entered into partnership with the Govt. and other agencies including Banks leveraging their existing infrastructure. These agencies are called the Registrars of UIDAI. Our Bank has also signed an MoU with UIDAI on 22nd January 2011 and has become a registrar in this project. During the first phase of Aadhaar enrollment up to 31.03.2012, 2.05 lac residents have been enrolled by our Bank as against target of 2.00 lac set by UIDAI.

MICRO, SMALL AND MEDIUM ENTERpRISES (MSMES)

The main growth driver of the Indian economy, MSME sector accounts for 45% of manufacturing sector output, 40% of India's exports and provides employment to more than 7.32 crore persons in 3.12 crore enterprises. Accordingly, the Bank has also been according high priority to this area.

With the help of renewed emphasis on fnancing this sector, the outstanding credit to MSME sector increased by 28.02% from Rs6,238 crore as at the end-March 2011 to Rs7985.81 crore as at the end- March 2012. As against the target of 3030 new MSME accounts (5 new accounts per urban/semi-urban branch), the Bank has assisted 25481 new MSME units during the year 2011- 12. In order to boost MSME advances, the Bank has launched 3 campaigns extending concessions in processing charges/up-front fee and relaxation in the interest rates during the year 2011-12.

As at end-March 2012, the outstanding assistance to Micro and Small enterprises has increased by 32.80% to reach a level of Rs6477.96 crore, as against Rs4877.63 crore as at end-March 2011.

The Bank has continued its thrust to provide collateral free loans to MSME units under the credit guarantee scheme of CGTMSE. During the year, Bank provided new collateral free loans under Credit Guarantee scheme of CGTMSE to MSE units amounting to Rs48.22 crore, taking the level of these loans to Rs211.09 crore to 12344 units as at end-March 2012.

LOANS TO WOMEN BENEfICIARIES

As at end-March 2012, 1.91 lakh women have benefited from financial assistance under different schemes of the Bank with a total outstanding of Rs2290.10 crore, equivalent to 5.49% of the Adjusted Net Bank Credit, which is above the 5% benchmark prescribed by RBI.

ASSISTANCE TO MINORITY COMMUNITIES, WEAkER SECTIONS AND SChEDULED CASTES / SChEDULED TRIBES

The programmes for minorities' welfare envisage a fair deal to the minority communities in terms of opportunities for employment and socio-economic upliftment. As at end-March 2012, assistance to these communities stood at Rs920.59 crore spread over 64926 accounts.

Financing to weaker sections stood at Rs6918.29 crore benefiting 7.64 lakh persons as at end-March 2012. The ratio of assistance to weaker sections as a percentage of Adjusted Net Bank Credit is 16.57% as at end-March 2012. This was above the benchmark of 10% prescribed by RBI.

As at end-March 2012, the outstanding assistance towards Scheduled Castes (SCs)/ Scheduled Tribes (STs) stood at Rs1715.47 crore in 192489 accounts under priority sector.

DIFFERENTIAL INTEREST RATE SCHEME (DIR)

Advances under the Differential Interest Rate (DIR) scheme stood at Rs29.94 crore benefiting 31906 persons which is at 0.07% of total advances outstanding at the end of previous year i.e 31.03.2011, as against the prescribed benchmark of 1%. The Bank has disbursed 10131 new loans under DIR scheme with credit limits of Rs14.54 crore during the year.

GOVERNMENT BUSINESS

The Bank conducts Government Business on behalf of State/ Central Government departments through 483 authorized branches. Income Tax, Central Excise, Service Tax, Value added tax etc. are collected through physical challans as also through the electronic mode. The Bank has established a Centralized Pension Processing Centre (CPPC) which calculates as well as credits pension to the accounts of pensioners across all the branches.

During the year, Bank has also established "Online Treasury branch" for online salary payment of Rajasthan State Government employees, Commercial Tax Department refunds, MNREGS wages payment etc. During 2011-12, Bank's earning under the head 'Commission Income from Government Business' amounts to Rs147.30 crore.

INTERNATIONAL BANkING

The Bank provides Foreign Exchange related services to exporters/ importers, other resident and non- resident customers through a network of 73 Authorized Category "B" and 182 category 'C branches. Bank's forex dealing rooms at Mumbai and Kolkata and authorized category 'B' branches are equipped with latest technology for real-time communication and connected through SWIFT with more than 725 offices of foreign banks throughout the world. The Bank maintains 20 NOSTRO accounts in all major currencies and non-account correspondent banking relationship with all major banking groups in the world. To facilitate NRI customers for inward remittances, there is online remittance facility and tie-ups with 7 Gulf based Exchange Houses. Western Union Money Transfer Payment services are also being provided at 231 of our branches. The Bank also undertakes proprietary Forex trading to increase profit by taking advantage of market movements.

During 2011-12, the Bank's forex merchant turnover increased by Rs2,853 crore to Rs19,652 crore, as against Rs16,799 crore in the previous year. The NRI Deposits increased by 18.30% to Rs950 crore at the year- end 2012, as against Rs803 crore of end-March 2011. The export credit stood at Rs1931.40 crore with a slight increase of 2.19% from the previous year.

The Bank chairs the local chapter of Foreign Exchange Dealers' Association of India (FEDAI). The Bank is an active member of FEDAI, International Chamber of Commerce (ICC) and Clearing Corporation of India Limited (CCIL).

INDUSTRIAL REhABILITATION

Rehabilitation/restructuring of potentially viable industrial units remains an important thrust area of the Bank. For this purpose, the Bank has its own Industrial Rehabilitation Policy containing detailed guidelines for undertaking rehabilitation/ revival package and the same is updated from time to time. Whenever units are found non-viable or not responding to the rehabilitation/ restructuring package, focus is shifted to recovery of Bank's dues through legal recourse, action under SARFAESI, compromise settlement or assignment of debt.

As at end-March 2012, the Bank had 25 large sick /weak units on its books with aggregate outstanding of Rs310.26 crores. There are 19 Corporate Debt Restructuring cases with aggregate exposure of Rs468.18 crores and 23 BIFR cases with exposure of Rs304.94 crores. The Bank has been acting as BIFR's Operating Agency in 6 cases. During the year under review, 2 accounts with a total exposure of Rs45.33 crores have been restructured under CDR mechanism as warranted by global economic meltdown. Sustained efforts undertaken by the Bank in restructuring the accounts and post-sanction close monitoring and follow up resulted in maintaining most of the assets as standard.

NPA MANAGEMENT

The Bank continues with its multipronged strategy of controlling Non-Performing Assets (NPAs) through intensive monitoring of large value accounts, close follow-up with DRT/ BIFR, restructuring of viable accounts and effectively utilizing the remedies available under the SARFAESI Act. Besides, the Bank resorted to outright sale of unproductive assets to Assets Reconstruction Companies in the public and private sector on cash basis. Due emphasis has been given to follow up with the courts and fling of Execution Petitions. During the year, 'Recovery Camps' were organized for NPA recovery, the results of which are quite encouraging. The progress is being monitored at the highest level. The progress in NPA/ AUCA recovery is discussed/reviewed by the Management Committee by conducting Video-conferencing with all the Zones and DGM headed branches. To contain the growth of NPAs, MIS data have been extensively used. The accounts in SMA/ Probable NPA category are discussed through video-conferencing with a view to regularise the position and not to allow any account to slip to NPA. The level of SMA/Probable NPA are also brought down by removing technical snags. A 'Loan Tracking Center' has been established to monitor and track the irregular standard accounts from Head Office level. Pre-emptive measures, such as restructuring etc., are also taken as per recent RBI guidelines. By adopting the above measures and utilizing the provisions of SARFAESI Act effectively, Bank has received good number of acceptable compromise proposals which resulted in good recovery in NPA. There has been an addition of Rs1571.92 crore in NPAs during the current financial year due to Global recessionary trend. However, there has been recovery/ up-gradation to the tune of Rs480.77 crore. The Gross NPA ratio stood at 3.30% and the Net NPA ratio of the Bank stood at 1.92% as at the end of the financial year 2011-12.

RISk MANAGEMENT STRUCTURE Of THE BANk

The Bank has an independent Risk Management Framework in place. At the apex level, there is a Risk Management Committee of the Board (RMCB), which oversees the policies and strategies for Risk Management in the Bank. Credit Risk Management Committee (CRMC), Asset Liability Management Committee (ALCO), Market Risk Management Committee (MRMC) and Operational Risk Management Committee (ORMC) have been constituted to support RMCB. These sub-committees are submitting all critical issues/ development in their respective areas to RMCB. The Bank has Credit, Market and Operational Risks Management Policies for identification, measurement and management of major risks, the Bank is exposed to. These policies have been reviewed and updated from time to time, keeping in view the dynamic business environment. The Integrated Risk Management Department headed by a DGM, at the Head Office, acts as the nodal centre for coordination with other departments/operating units engaged in managing risk in their respective business areas.

CAPITAL FRAMEWORK

Under Pillar-I of the New Capital Adequacy Framework (NCAF) guidelines issued by Reserve Bank of India, the Bank is computing Capital to Risk Weighted Assets Ratio (CRAR) using Standardized Approach for Credit Risk, Standardized Duration Approach for Market Risk and Basic Indicator Approach for Operational Risk. Under Pillar-II of NCAF, the Bank has assessed capital requirement for 2011-12 for other risks in its Internal Capital Adequacy Assessment Process (ICAAP) document submitted to RBI. Basel-II Disclosures have been made by the Bank in the Annual Report as also on Bank's website as part of the Pillar-III guidelines of NCAF.

CREDIT RISk

Control and monitoring of credit risk is dealt with as per the Board-approved Credit Risk Management, Credit Risk Mitigation & Collateral Management Policy and Loan policy of the Bank. Credit Risk management remains a major task for Bank and receives prime attention. The above policies cover methodologies for measuring, monitoring and control of credit risk. In order to control the magnitude of credit risk, prudential norms or benchmarks, financing ratios, single borrower or borrower-group exposure, industry-specific and sector-specific exposure, exposure to sensitive sectors, hurdle rate etc. have been set up. Credit appraisal systems and a clearly defined delegation of powers form an integral part of the Credit Risk Management process.

MARKET RISK

To monitor market risks and treasury operations, mid-offices (domestic & forex) are functioning at IRMD. To assess resilience of Investment portfolio, Scenario Analysis on market risk covering events such as decline in stock markets, rise in bond yields and foreign exchange rate movements are conducted regularly as per the Stress Testing Policy of the Bank.

OPERATIONAL RISk

One of the major tools for managing operational risk is to put in place a well established internal control system, which includes segregation of duties, clear management reporting lines and adequate operating procedures. Most of the operational risk events are associated with weak links in internal control systems or laxity in complying with the existing internal control procedures. The Bank has developed suitable systems and procedures for managing and control of operational risks.

PREPARATION FOR ADVANCED APPROACHES OF BASEL-II AND PROPOSED BASEL-III CAPITAL REGULATIONS

Bank has decided to move over to advanced approaches of Basel- II guidelines for Credit, Market and Operational Risks. Under advanced approaches, Internal Rating Based (IRB) Approach will be followed for Credit Risk, Internal Models Approach (IMA) for Market Risk and Advanced Measurement Approach (AMA) for Operational Risk.

In order to improve the quality of capital and address liquidity risk issues, Reserve Bank of India has issued draft guidelines on implementation of Basel-III Capital Regulations in India to be implemented in phases with effect from 1st January 2013. Bank has made a preliminary assessment of the impact of the guidelines and shall draw plans for smooth transition to Basel-III regime once the final guidelines are issued.

ASSET LIABILITY MANAGEMENT

A comprehensive Asset Liability Management (ALM) System is in place for effective management of market risk covering Liquidity Risk, Interest Rate Risk and Foreign Exchange Risk. Liquidity and Interest Rate Risks are assessed and monitored through Structural Liquidity Report and Traditional Gap Analysis respectively. The structural liquidity report is being prepared and reviewed on a daily basis as per RBI guidelines. Both the risks on Foreign Assets & Liabilities are being monitored through Maturity & Positions (MAP) and Sensitivity to Interest Rate (SIR) statements. The monitoring of liquidity on a dynamic basis, over a time horizon spanning 1-90 days, is in place. Duration Gap Analysis is also used to manage interest rate risk for the entire balance sheet.

The Asset Liability Management Policy coupled with Investment Policy of the Bank specifies various prudential limits for management of Liquidity and Interest Rate Risks. The Bank is regularly monitoring these limits. A comprehensive Contingency Funding Plan and a system of daily monitoring of inflows & outflows of deposits are in place for managing Liquidity on a day-to-day basis. Calculation of Value at Risk (VaR) on Foreign Exchange Forward Positions and Stress Testing on Liquidity, Interest rate and Foreign Exchange Open & Forwards Positions is also undertaken.

As per RBI guidelines, the Bank has migrated to the Base Rate regime w.e.f. 01 July, 2010 for new loan accounts except those exempted by RBI. Loan accounts sanctioned prior to 01.07.2010 continue to be governed by the BPLR system until the next renewal/reset date or earlier, if the individual borrowers decide to switchover to Base Rate regime.

INTERNAL CONTROL, INSpECTION AND AUDIT

The Bank has in place a well- established independent audit system and structure to ensure adequate internal control for safe and sound operations. Internal Audit is carried out under Risk Focused Internal Audit (RFIA) as envisaged under Risk Based Supervision of RBI with focus on assessment of risk and internal control mechanism.

The branches have been categorized into three groups as per risk perception and are subject to varying degrees of audit. During 2011-12, 684 branches and 54 Cells under Business Process Re-engineering (BPR) initiatives have been subjected to internal audit. No branch of the Bank remained overdue for audit as on 31.03.2012. 103 branches and 35 BPR initiatives covering 66.01% of advances including non-fund based business and 40.57% of deposits have been placed under continuous surveillance through concurrent audit. Besides, 13 Head Office Departments are also subjected to concurrent audit system. IS Audit cell is in place to conduct IS audit of major IT establishments including Core Banking project, Zonal Computer Centers, etc. in accordance with RBI directives and Bank's IT Security Policy.

In order to have better and uniform evaluation of risk factors, besides saving substantial working days, the Bank has introduced a "Cluster Audit Approach" in Delhi, Kota and Kolkata centres during 2011-12. Under this approach, simultaneous audit of BPR entities and its linked branches were conducted.

As at end-March, 2012, 99.88% of total branches of the Bank was rated "Well Controlled" and "Adequately Controlled".

RECONCILIATION OF INTER-OFFICE TRANSACTIONS

As per RBI guidelines, all entries need to be reconciled within a period of six months from the date of their origin. By end-March 2012, the Bank had reconciled all inter- office debit transactions originated upto 29.02.2012 i.e. well before the time limit prescribed. The Bank is committed to perform better than the target set by RBI and shall aim at reconciling all entries within two months of their origin.

INFORMATION TECHNOLOGY

CORE BANkING SOLUTION (CBS)

All branches of the Bank are running successfully on Core Banking Solution. We were able to provide better customer satisfaction by tendering many Value Added Services like: multi functional ATMs, Internet Banking, fexi-deposit scheme, multi-city cheque facility, instant credit of local and outstation cheques, introduction of RTGS/NEFT and SBGRPT for faster settlement of funds etc.

MOBILE BANkING

Bank has introduced Mobile Banking facility for its customers having a Savings/Current Account. The product is named "State Bank Freedom". Presently, there is an upper ceiling of Rs50,000 for fund transfer and for purchase of goods/services per day within overall calendar month limit of Rs2, 50,000.

INTERBANK MOBILE PAYMENT SERVICES (IMPS)

"Interbank Mobile Payment Service" (IMPS) has been launched enabling Bank's customers to use mobile instruments as a channel for remitting funds or to make various utility payments at shops and commercial establishments, making payment just with the MMID (Mobile Money Identifier) of the beneficiary in secure manner on 24 X 7 basis. The upper ceiling for remittance or payment of bills is same as in Mobile Banking facility.

AUTOMATED TELLER MACHINES (ATMS)

The Bank has installed 80 new networked ATMs during the year to take the tally of ATMs to 1082. All the ATMs are connected to the network of State Bank Group ATMs, thereby enabling more than 42.71 lac cardholders of the Bank to have access to over 26000 ATMs of the State Bank Group all over the country. Our customers can also access ATMs of other Banks free of charge upto fve transactions per month, including balance enquiry as transaction, subject to a maximum of Rs10,000 per transaction.

INTERNET BANKING

All branches of the Bank are enabled to offer Internet Banking facility to the retail as well as the corporate customers. Looking to the rapid increase in the usage of Internet banking worldwide, the Bank has introduced several new features during the year. Apart from transferring funds from their account to another account in our Bank, our customers can now transfer amount from their account to any other account in any bank (through RTGS/NEFT), make TDS enquiry for Term Deposits from the comfort of their homes or offices, open/close of e-TDR/e-STDR/e-Recurring Deposit (RD) account, and view the details of Income-Tax deposited (26-AS). Transaction rights with single ID up to Rs5.00 lac per day per user for small Corporate customers, named 'CINB Saral', has been provided. Retail Internet Banking facility for visually challenged persons has also been made available. For Corporate customers, a new facility 'I-Collect', for on line collection of funds has been provided.

Online payment of direct and indirect taxes have been enabled in our Internet banking. Bank's customers can now pay Income Tax, Service Tax, Excise Duty, Customs Duty of Central Government, Value Added Tax (VAT) and Central Sales Tax (CST) of Rajasthan State Government and Maharashtra State Government as also Professional Tax of Maharashtra State Government online. Facility of online application for IPOs through Bank's internet banking portal www.sbbjonline.com with ASBA (Application Supported with Blocked Amount) facility, where investor customer continue to earn interest during the application process, is available to users.

Facility of online booking of Railway/ Air Tickets has been widely accepted. Electronic payment of railway freight (E-Freight) is gaining popularity; now four Corporate customers are using the facility. Bank has integrated two more Aggregator to its online system to increase the range of merchants and utility billers to Bank's Internet Banking users. Customers can now make payment to 1200 plus merchants/billers. Steps have been taken by the Bank to further increase the merchants/billers list.

Bank launches a campaign to promote retail Internet Banking by initiating actions to increase awareness about Internet Banking among staff as well as customers. It has conducted seminars at Zonal/Regional offices and branches. Interaction with staff of Corporates and Institutions were also held. Meetings with Corporate customers were organized to popularize Corporate Internet Banking and facility of "Zero Balance Internet Current Account" for online tax payment.

ELECTRONIC PAYMENT SYSTEMS:

USAGE Of RTGS, NEFT & SBGRPT

Real Time Gross Settlement (RTGS) is an integrated payment and settlement system and National Electronic Fund Transfer (NEFT) is a scheme for inter- bank funds transfer operated by the RBI. Bank has taken several measures to increase usage of RTGS and NEFT system. All branches of the Bank are RTGS and NEFT enabled. Customers can make their inter-bank remittances in a faster and secure manner at a very nominal cost, to any RTGS/ NEFT enabled branch of other banks in India. State Bank Group Payment (SBGRPT) functionality for electronic funds transfer within State Bank Group is also available for customers.

SMS UNHAPPY

A new service "Project SMS Unhappy" has been launched during the year 2011 -12 with the objective of providing a simple and economical way to the customers to convey their grievances and reduce complaint resolution time drastically, to below 48 hours, thereby enhancing the customer satisfaction level and creating a loyal customer pool.

GREEN CHANNEL COUNTER

Bank has implemented "Green Channel Counter" facility at 250 branches including all district Head Quarter branches in Rajasthan and all branches situated in Delhi NCR, Mumbai, Bangalore and Ahmedabad during the year 2011 - 12. It is a paperless, eco- friendly and easy facility which would enable customers to pre-process selected transactions in a branch. This is being carried out by using a Transaction Processing Device (TPD) placed at a Single Window Operator's (SWO) terminal and linked with the desktop of the SWO and integrated with the CBS application. This TPD acts as a transaction pre-processing device, which is used by customers to enter data for a particular transaction authenticated by the four digit PIN provided for the ATM-cum-Debit Card. The facility provides safety and comfort to the customers by avoiding filling up of withdrawal forms / cheques / pay in slips and quicker service.

INFORMATION TECHNOLOGY (IT) SECURITY

As the level of usage of IT enabled services has increased, the threats and risks to our IT assets have also increased manifold. To control these threats and risks, the Bank has a comprehensive IT and Information Systems (IS) Security Policy that addresses all these concerns including maintenance of customers' confidentiality, security and integrity of data. State Bank's data centre, where Bank's CBS data base resides (both at the Primary and Disaster Recovery Site), has acquired the accreditation for the international standard for Information Security Management Systems ISO/IEC: 27001: 2005. All the Banking applications have built-in security features like access control, data encryption and transmission through secured channels as per requirement of the application. The threat of virus and worms is minimized by having a centralized anti-virus solution. Adequate Firewalls and Intrusion Detection Systems are in place so as to prevent unauthorized access to the network. The security of the network is being managed by Network Management Consultants of the Bank. The Disaster Recovery Plan (DRP) and Business Continuity Plan (BCP) for all branches are in place.

KNOW YOUR CUSTOMER/ ANTI MONEY LAUNDERING/ COMBATING Of FINANCING Of TERRORISM MEASURES

In order to identify and examine suspicious transactions, the Bank has installed the AMLOCK software, besides setting up an Anti Money Laundering Cell at Bank's Head Office. The customers' accounts have been divided into different risk categories. Alerts are generated once any transaction exceeds a predefined threshold limit. These alerts help in identification of suspicious transactions, which are further reported to Financial Intelligence Unit, Government of India, in appropriate cases.

CUSTOMER SERVICE

Customer Service continues to remain a prime focus of attention for the Bank. Leveraging core banking technology, providing value added services and re- designing key business processes, in line with the requirements of customers, is an ongoing process in the Bank aimed at improvement in Customer Service on a continuous basis.

The meetings of the Customer Service Committee of the Board and Standing Committee on Customer Service were convened at regular intervals to review the position of customer service rendered. Similar Committees are also functioning at Branches, Zones and Head Office, which help in continuous improvement in service standards.

The Bank has put in place a multi pronged grievances redressal mechanism to suit varied customer requirements. An aggrieved customer can either make a written complaint at branch / regional / zonal / head office of the Bank or make an online submission in the form provided on the Bank's website / through e-mail against acknowledgement.

During the year, the Bank has launched an initiative code-named 'Mission Five', encompassing 5 voluntary initiatives to be undertaken by the branches for maintaining cleanliness of premises, punctuality of staff members, serving customers with a smile, thanking its customers by name and promptly resolving their complaints.

The Bank is a member of the Banking Codes and Standards Board of India (BCSBI) and has voluntarily adopted a 'Code of Bank's Commitment to Customers,' which sets a framework for setting a minimum standard of banking services to be provided by the banks.

DISCLOSURE Of COMPLAINTS/ UNIMPLEMENTED AWARD Of BANKING OMBUDSMEN

In terms of RBI circular DBOD.No.Leg BC.60/09.07.005/2006-07 dated 22.02.2007, the information in respect of customer complaints and awards passed by the Banking Ombudsmen is given in the Table below :-

A. Customer Complaints ( Position upto' March 2012)

(a) No. of Complaints pending at the be- 32 ginning of the year

(b) No. of Complaints received during 6227 the year(*)

(c) No. of Complaints redressed during 6198 the year(*)

(d) No. of Complaints pending at the 61 end of the year

(*) Excluding 1446 Complaints found non maintainable.

B. Awards passed by the Banking Ombudsman (BO)(Position upto March 2012)

(a) No. of unimplemented Awards at the Nil beginning of the year

(b) No. of Awards passed by the Banking 05 Ombudsman during the year

(c) No. of Awards implemented during 04 the year

(d) No. of unimplemented Awards at the 01st end of the year

* Appeal allowed and award passed by BO set aside by the Appellate Authority.

ATM COMPLAINTS

To monitor the ATM failed-transactions related customer complaints received at the branches, ATM complaints Reconciliation Cell has been established at Head Office. Reserve Bank of India has prescribed that all ATM complaints to be resolved within 7 working days. For faster resolution /redressal of complaints, an online ATM Complaint Management System (ATMCMS) has been developed, through which we are able to adhere to RBI Guidelines. During the year 2011- 12, the Bank has received 45408 ATM failed-transactions related complaints, out of which 44905 complaints were resolved. No home-bank complaint (where customer and ATM both belong to our bank) is pending for more than 7 working days, since 01-04-2010.

THE RIGHT TO INFORMATION (RTI)

The Right to Information (RTI) Department, constituted at the Bank's Head Office for better coordination and effective implementation of the Right to Information Act, 2005, has been instrumental in ensuring that information sought for, under the various RTI applications received by them, is dispensed with efficiently and effectively in a time bound manner as per the provisions of the Act and that the appeals too, if received, are redressed timely.

During the current year ended 31.03.2012, the RTI Department received 1466 applications under the RTI Act, 2005, out of which, 1434 applications were disposed. Only 32 applications, all less than a month old were awaiting disposal as on 31.03.2012.

Besides, the Bank had also received 64 appeals upto 31.03.2012 under the RTI Act, 2005, out of which 62 appeals have been disposed off by the Appellate Authority by 31.03.2012.

BUSINESS PROCESS RE- ENGINEERING

During FY 2011-12, Business Process Re-engineering (BPR) Initiatives further stabilized in Bank and their coverage extended to more branches. Bank operates 12 city-centric loan CPCs, viz. Retail Assets Central Processing Centre (RACPC), Small & Medium Enterprises City Credit Centre (SMECCC) and Retail Assets and Small & Medium Enterprises City Credit Cell (RASMECCC) in end-state at 11 centres with 228 branches linked to them, as against 223 branches linked as on 31.03.2011. During the year, RASMECCC & SARC were combined at Ajmer, Bhilwara, Bikaner, Jodhpur, Kolkata, Kota, Mumbai, Sriganganagar and Udaipur (where number of linked branches is < 20) for faster and cost effective processing. Similarly, coverage of Rural CPC went up to 255 branches as on 31.03.2012, as against 235 branches at the end of previous year. Number of Relationship Managers (Medium Enterprises) increased to 17 at 13 major business centres compared to 14 RMMEs at 11 centres at the end of previous year.

Non loan CPCs / initiatives, viz. Liability Central Processing Centre (LCPC), Trade Finance Central Processing Centre (TFCPC), Currency Administration Cell (CAC), Central Pension Processing Cell (CPPC), Clearing CPC (CCPC), Multi Product Sales Team (MPST), Relationship Manager-Personal Banking (RMPB) have helped further improvement in customer service. Bank joined SBI's Contact Centre at Vadodara w.e.f. 03.02.2012, which is an effective alternate delivery channel designed to boost customer information and satisfaction. Customers' queries relating to Bank's products/services are responded through Toll Free Help Line Number 1800 180 6005 on 24x7 basis.

During FY 11-12, the following developments took place to make CPCs / initiatives more effective and to optimize gains and obviate staff & space costs:

(a) Upon creation of business verticals at HO, the ownership & responsibility for stimulating and tracking the performance of CPCs and initiatives was assigned to respective vertical heads.

(b) Personal Loans and Car Loans were delinked from loan CPCs / MPST and their sourcing, sanction, disbursement and maintenance vested with the respective linked branches w.e.f. 14.11.2011. This shifting was necessitated due to branches enjoying area-specific car dealers linkages (for car loans) and for ease of interface with customers having salary accounts (for personal loans).

(c) MPSTs at 10 major centres, viz. Ajmer, Bhilwara, Bikaner, Delhi, Jaipur, Jodhpur, Kota, Mumbai, Sriganganagar and Udaipur became leaner and re-oriented towards sourcing one or combination of Home Loans, MSME loans and Corporate Salary Package, in most productive manner.

Coverage of various CPCs / initiatives as on 31.03.2012 vis-à-vis 31.03.2011 was as under :

CPC / Initiative Branches Covered

31.03.2011 31.03.2012

LCPC 377 486

CPPC 754 792

CAC 129 136

Clg. CPC 197 206

TFCPC 99 116

RM-PB 16 16

Branch Re-design 145 159

(v) Shifting of back office activities to loan CPCs, implementation of revised roles for branch functionaries and better ambience in branches at core BPR centres not only improved the Bank's image but also helped the linked branches to focus more on customer service. BPR initiatives in the Bank are set to improve the quality of service and market share in business by leveraging technological changes. Efforts are being made by the Bank to back various CPCs with advanced work-flow software aimed at further improving quality, flexibility and productivity.

CURRENCY MANAGEMENT

RBI has designated 200 branches as Currency Chest branches in the State and 16 branches in other parts of our Country. All the Currency Chest branches are undertaking the following activities in an efficient manner:

(i) Circulation of New Currency Notes among public.

(ii) Distribution of coins to the public.

(iii) Exchange of torn /damaged/ soiled / mutilated notes.

(iv) Providing linkage facilities to branches of other banks which are linked to them.

(v) 16 branches are providing facilities of note exchange and coins distribution on 3rd Sunday of every month.

CROSS SELLING

In order to augment non-interest income, the Bank has continued marketing of life and non-life insurance, mutual funds and credit card products. For the purpose, the Bank has in place tie up arrangements with SBI Life Insurance Co. Ltd., National Insurance Co. Ltd., SBI Mutual Fund, Birla Sunlife Mutual Funds and SBI Cards & Payments Services Pvt. Ltd. During 2011-12, the Bank launched campaigns for marketing of these products which helped in getting a total income of Rs17.32 crores from cross selling activities.

APPLICATION SUPPORTED BY BLOCkED AMOUNT (ASBA)

In order to impart greater efficiency in public issuance, a supplementary process of applying in Public Issues as well as to right issues had been introduced by the SEBI viz. Applications Supported by Blocked Amount (ASBA). The Bank, being registered as Bankers to an issue, had been authorized by SEBI as Self Certified Syndicate Bank, eligible to accept applications under the ASBA process. During the year 2011-12, the Bank has designated 2 more branches under the ASBA process. Thus, the Bank has so far designated 17 branches, which can accept these applications. Besides, customers of all branches of the Bank can apply in the public/right issues under the ASBA process, through Internet Banking. During the year, the Bank has also started work of Syndicate ASBA and 4 branches has been designated under this process. During the period under review, 22207 applications aggregating Rs230.42 crore were processed by 17 designated branches of the Bank. The Bank earned a commission of Rs0.31 crore in the process.

COMMUNITY SERVICES BANKING

As a responsible Corporate Citizen, the Bank continues to undertake community based social activities such as tree plantation, free medical camps, blood donation camps, establishing water-huts, sports competition etc. During 2011-12, the Bank provided Ambulances to "Kota Cancer Society", Kota and "Ashadham Ashram", Udaipur each for the treatment of Cancer Patients and other regular patients who are under-priviledged members of the society. One mortuary van was also given to "Shree Amrapur Jankalyan Charitable Trust", Jaipur. Every branch of the Bank adopted one girl child each from poor families with an objective of providing financial assistance for pursuing studies in Govt./Municipal schools. The Bank provided financial assistance to two schools, which are imparting education to the children of poor/down-trodden families of the Society for purchase of computers, furniture, peripherals etc. To help visually challenged children, one braille printer and a laptop were provided to Rajasthan Netraheen Kalyan Sangh. Blankets / quilts /sweaters were distributed to the needy people in another initative. The Bank also honoured the meritorious students of the state with cash reward.

GOVERNMENT SPONSORED SCHEMES

Laying utmost emphasis on Government sponsored schemes has been amongst the major endeavors of the Bank in pursuit of financial inclusion. The Bank continued to play a pioneering role in fnancing entrepreneurs under various Government sponsored schemes during the year 2011-12. The position under various Government sponsored schemes as at end-March 2012 is as under: -

Scheme Number of Amount Beneficiaries sanctioned during financial year (Rs. crore)

Swarn Jayanti 2103 9.09

Shahri Rojgar

Yojana (SJSRY)

Prime Ministers 348 12.86

Employment

Generation

Programme

(PMEGP)

Swarn Jayanti

Gram Swarojgar 4386 47.59

Yojna (SGSY)

Artisan Credit HOOH , no 1281 4.08 Card Scheme

LEAD BANK SCHEME

The Bank has Lead Bank responsibility in nine Districts in the State of Rajasthan viz. Bikaner, Barmer, Hanumangarh, Jaisalmer, Jalore, Pali, Sirohi, Rajsamand and Udaipur. The Bank has been implementing and monitoring the Annual Credit Plan and other developmental and poverty eradication schemes launched by Govt. of India, Govt. of Rajasthan and NABARD. Target allotted for Annual Credit Plan to our Bank for the year 2011-12 was Rs2,014 crore, against which achievement of our Bank, has been Rs2,574 crore, recording 128% of target.

MICRO CREDIT

At the end of March 2012, the Bank has credit linked a total of 41349 Self Help Groups with disbursement of Rs265.89 crore, out of which 34444 accounts are of women beneficiaries with disbursement of Rs178.37 crore. NABARD has ranked the Bank as number one in Rajasthan State for its performance under Micro Credit continuously from the year 2004- 05 to 2008-09. In the year 2009-10, the Bank has secured first position in Rajasthan for Micro Credit as per "Status of Micro Finance in India 2009-10" published by NABARD.

Recently, the Ministry of Finance, Govt. of India launched a project for fnancing Women Self Help Groups with the support of Anchor, a NGO as SHPI in 24 backward Districts of 24 States in the country. In Rajasthan, Barmer district, which is Bank's Lead District has been selected for this purpose.

RURAL SELF EMPLOYMENT TRAINING INSTITUTES (RSETI)

In order to impart job-oriented skills to rural unemployed youth, the Bank has set-up seven RSETIs at Bikaner, Hanumangarh, Barmer, Jaisalmer, Jalore, Sirohi and Nathdwara (Distt. Rajsamand). The Bank has also set up a Skill & Entrepreneurship Development Institute (SEDI) at Jaitaran, Distt. Pali in association with Ambuja Cement Foundation.

By March 2012, 19198 candidates have been imparted training for a range of jobs, which are locally in demand, in these institutions. With the help of this training, 3609 candidates have been engaged in various jobs and 8429 candidates have started their own ventures.

FINANCIAL LITERACY AND CREDIT COUNSELLING CENTRES (FLCC)

In order to educate farmers and other people in rural / urban areas with regard to various financial products, different Bank schemes and services available from the formal financial sector, the Bank has set up 9 Financial Literacy and Credit Counseling Centres (FLCC) in all the nine Lead Districts of Bank in Rajasthan. These FLCCs are providing awareness service free of charge. Upto 31/03/2012, 19197 persons have been counseled by these centres.

REGIONAL RURAL BANk

MGB Gramin Bank, the Regional Rural Bank (RRB) sponsored by the Bank, has a network of 222 branches spread over six districts viz. Pali, Jalore, Sirohi, Sriganganagar, Hanumangarh and Bikaner of Rajasthan. The Bank continues to provide managerial support and financial assistance by way of refinance etc. to MGB Gramin Bank. All branches of MGB Gramin Bank are working on CBS platform. As at end-March 2012, MGB Gramin Bank had deposits of Rs2253.12crore, advances of Rs1852.62 crore and recorded a profit before tax of Rs42.50 crore during 2011-12.

BRANCH EXPANSION

During 2011-12, the Bank opened 48 new fully computerized branches. As at end-March 2012, the total number of branches stood at 950, comprising 946 business branches, 2 asset recovery branches and 2 treasury branches. Of these, there are 335 rural branches, 271 semi-urban branches, 167 urban branches and 177 metro branches. The number of branches in Rajasthan increased to 791 which are the largest among all banks. Out of these, 599 branches are located in rural and semi-urban areas, which play an important role in rural development and poverty alleviation in the State.

HUMAN RESOURCES DEVELOPMENT

The Bank's staff strength as on 31.03.2012 was 12866 employees, with the following break up: -

AS ON 31.03.2012 OUT OF WHICH

STAFF CADRE SC ST GENERAL TOTAL WOMEN MINORITY

OFFICERS 914 451 3319 4684 340 77

CLERKS 865 493 3669 5027 825 62

SUB-STAFF 412 262 1693 2367 133 27

SAFAI KARMCHARI 641 21 126 788 16 2

TOTAL 2832 1227 8807 12866 1314 168

Out of the Bank's total staff strength as on 31.03.2012, 2832 (22.01%) belong to SC and 1227 (9.54%) to ST category. During 2011-12 while 195 members of clerical staff have been promoted as officers, 12 officers, 1269 clerks and 378 guards cum peons have been recruited.

The percentage of SC/ST employees to the total employees at 31.55% is much above the benchmark stipulated by the Govt. of India. The reservation policy of the Govt. is being implemented scrupulously in the Bank.

The Bank believes that its human resources are the most important assets and their development is necessary for growth of the Bank. In the dynamic business environment, it is necessary that adequate training and sensitization is provided to the staff members on an on-going basis to meet the challenges in the wake of globalization of economies introduction of new concepts in management areas as also of advanced technologies in day to day activities. With this aim in mind, Bank has imparted training to 6347 employees which includes 3490 officers, 2326 clerks and 531 sub-staff during the year under review.

A total of 6443 employees of all categories, including 96 employees of sponsored RRBs, were provided training opportunities on various subjects related to banking and technology at three STCs of the Bank during the year. The Bank also provided pre recruitment training to 983 SC/ST candidates appearing in the written test for recruitment of clerical cadre and officer cadre during the year. In addition to this 31 seminars / workshops were conducted on various contemporary issues to update the skills of employees. We have also conducted special training programmes to all newly promoted officers up-to cadre MMGS-III and all Branch Managers during the current fnancial year.

Apart from in-house training, the Bank provides facility of training to its officers in specialized areas at training institutes of repute like State Bank Academy, Gurgaon, State Bank Staff College, Hyderabad, SBIICM, Hyderabad, SBIRD, Hyderabad, NIBM, Pune, CAB, Pune etc. During the period under review 1085 officers have been trained at these outside agencies in areas of Core Banking Solution, Forex, Fraud Detection, Market Risk Management, Electronic Payment System, Liquidity Risk Management, Export & Import, International Banking, Marketing, Credit Risk management, Stressed Assets Management, Legal option of Recovery, NPA Management, Risk Management, KYC, IT, IS Audit, Trade Finance, HR, Foreign Currency Funding, SME, Rural and Agriculture Advances, Industry Specific Programme, Balance Sheet Analysis, ATM & Internet Banking Programmes, Project Appraisal of high value proposals, Credit Appraisal Programme, Advanced Programme on International Trade Finance, Mobile Banking, SME Gyanshala, Marketing and Presentation Skills etc.

In addition to the above, Bank deputed 3 officers for specialized programmes aboard for Advance Management Programme (AMP) Strategic thinking for business leadership in collaboration with Standard Graduate School of Business, California, USA, Duke Corporate Education Enterprise Leadership programme for DMD & CGMs in Singapore conducted by Prof. Joe Divanna, faculty from the United Kingdom and FIMMDA-PDAI, 13th Annual Conference on emerging global regulations, Risk Management & Trading Best Practices at Kuala Lumpur.

ORGANISATIONAL PLANNING

With a view to facilitating improved supervision, organisational effecti- veness and customer services, 2 branches were reallocated during 2011 -12 from Region - IV (Chandigarh) to Region - I in the Delhi Zone. Fraud Risk Management functions were put under supervision of Asstt General Manager (Scale-V) to strengthen the system. A position of Asstt General Manager (Scale-V) was also created for better co-ordination with SBI for Contact Centre. In view of several changes that have taken place in IT department, it was restructured for synergy in ABs and 2 posts of Asstt General Manager (special cadre) were created. As BPR initiatives are established and working smoothly, the position of Asstt General Manager (BPR) and Asstt General Manager SARC, Mumbai were de- categorized. RASMECCCs and SARCs have been merged. Keeping in view the importance of work handled by RAMECCCs and SARCs, the positions of the heads of RAMECCC & SARC at Bhilwara and Sriganganagar were upgraded as Asstt General Managers.

With a view to improving the control mechanism, over-all efficiency as also the rate of business growth re-structuring of Head Office was made whereas separate business verticals were created. Ownership of each business vertical have been vested with a General Manager. For better performance Demat services & E-trading cell was shifted from Tilak Marg, Jaipur branch to Head Office and placed under control of the DGM (P&SB).

Delegation of powers for relaxation in prescribed rates/ceiling or deviations in hospitalization scheme for staff was revised.

STAFF WELfARE

The Bank believes in keeping the morale and motivation of the employees high, considers employees as its most important assets and accords high priority to their welfare. The Bank undertook staff welfare activities like granting scholarship to the meritorious wards of the employees, providing free medical consultancy services at various hospitals etc. Insurance cover for employees has been raised from Rs7.00 lac to Rs8.00 lac (Rs14.00 lac to Rs16.00 lac for accidental death) w.e.f. 01.03.2012 under group insurance scheme of SBI Life. Waiver of housing loan of the deceased employees has been extended to cover overdraft limit (Personal loan), PF loan and conveyance loan upto Rs3.00 lac. Special award of Rs10,000 for education (one time payment) to one ward of the deceased employee has been approved. Reimbursement of funeral expenditure is being made to the extent of Rs10,000 from staff welfare fund. Annual Health Check-up scheme extended to the spouse of the employees (age of employee between 41 to 49 years). Besides, relief to the employees, who are on leave without pay on sickness grounds, has been enhanced from Rs7,500 upto 18 months to Rs15,000 upto 24 months during the entire service period. The Bank has set up holiday homes at Jaisalmer, Chandigarh, Mussoorie, Jaipur, Manali, Mumbai, Goa, Delhi, Haridwar, Katra, Bengaluru and Udaipur. Various cultural and sports activities were also organized during the year.

INDUSTRIAL RELATIONS

The Bank has for long been maintaining harmonious and cordial relations with both supervising as well as workmen employees. The Employees' Union and Officers' Association have extended their wholehearted cooperation for the all-round growth of the Bank. A well established and consultative mechanism is in place in the Bank for resolution of various issued emerging from time to time.

VIGILANCE ADMINISTRATION

The object of vigilance activity in Bank is to enhance the level of managerial efficiency and effectiveness in the organization. As risk-taking forms an integral part of banking business, every loss caused to the organization, either in pecuniary or non-pecuniary terms, needs to be distinctly divided into a business loss which has arisen as a consequence of a bonafide commercial decision and an extraordinary loss which has occurred due to any malafide, motivated or reckless performance of duties. While the former has to be accepted as a normal part of business and ignored from the vigilance point of view, the latter has to be viewed seriously and dealt with under the extant disciplinary procedures. In order to minimize the impact of latter, the Vigilance Department constantly practices preventive vigilance, apart from extant surveillance system in the Bank. The punitive vigilance measures are applied while dealing with the complaints and frauds having vigilance angle.

The preventive vigilance comprises the dissemination of knowledge and precautions, to be exercised by the operating staff while discharging their duties. During the year, Bank has conducted seven preventive vigilance training programmes at various training centers, where 187 participants were benefited. Meetings of preventive vigilance committees in big branches are arranged, where staff is sensitized in regard to the preventive vigilance measures. The Vigilance department of Bank has disposed off 57 complaints during the year. 52 investigations have been initiated after 01.04.2011 and total 36 cases of investigations have been disposed off during the period. 48 preventive vigilance inspections were conducted during the period. The constant supervision of the cases resulted into disposal off 122 vigilance cases, during the period. The Bank celebrated 'Vigilance Awareness Week' in the month of November 2011, as per CVC's guidelines. In order to bring about vigilance awareness amongst the Bank staff, a quarterly in-house magazine titled as "Vigilance Bulletin" is also being published.

USE Of HINDI

The Official Language Implementation Committee at Head Office held 8-meetings during the year to discuss the progressive use of Hindi in the Bank. 881 branches / offices of the Bank have been notified under rule 10 (4) of the Official Language Rules 1976. Out of these, 702 branches / offices are specified under rule 8(4), which constitute 79.68% of total notified branches / offices of the Bank.

Section 3(3) of Official Language Act 1963 is being meticulously followed in the Bank. Facility of Hindi version has also been made available in the Core Banking Software. In compliance to the order of the Hon'ble President of India ,"Unicode" System has been implemented in the Bank and all the ATM's are operated in bilingual / trilingual manner.

'Hindi Fortnight' was observed

during September 1 to 14, 2011 during which, various competitions were held and prizes awarded to the winners. To impart the knowledge of Official Language Policy and job oriented Hindi, 27 workshops /training programmes were organized. During the year, 871 branches / offices were inspected for implementation of the Official Language. To increase progressive use of Hindi, Head Office Raj Bhasha Trophy competition was organized during the year.

Representatives of the Government of India visited Bank's Head Office to review the position and appreciated the efforts made in the implementation of the Of


Mar 31, 2011

The Board of Directors of State Bank of Bikaner and Jaipur have pleasure in presenting this Annual Report together with the audited Balance Sheet and Profit and Loss Account of the Bank for the year ended 31st March 2011.

ELECTRONIC CLEARING SERVICE

Electronic Clearing Service (ECS) facility for payment of dividend is being extended in 24 centres to shareholders who have opted for the same. These centres are Agra, Ahmedabad, Bangalore, Chandigarh, Chennai, Coimbatore, Ghaziabad, Hyderabad, Indore, Jaipur, Jodhpur, Kanpur, Kolkata, Lucknow, Ludhiana, Mumbai, Nagpur, New Delhi, Patna, Pune, Surat, Udaipur, Vadodara and Varanasi.

AUDIT

State Bank of India, with the concurrence of the Reserve Bank of India, approved the appointment of six firms of Chartered Accountants viz. M/s Vyas & Vyas of Mumbai, M/s S.C.J. Associates of Agra, M/s S.L. Chhajed & Co. of Bhopal, M/s L.U. Krishnan & Co. of Chennai, M/s B. Khosla & Co. of Jaipur, and M/s S. Daga & Co. of Hyderabad as the Banks Statutory Central Auditors for the year 2010-11. The scope of audit covered 844 branches/ central processing cells as against 829 branches/ central processing cells covered in 2009-10.

RESPONSIBILITY STATEMENT

The Board of Directors hereby states:

i. that in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. that they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Bank as on the 31st March 2011, and of the profit or loss of the Bank for the year ended on that date;

iii. that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Banking Regulation Act, 1949, and State Bank of India (Subsidiary Banks) Act, 1959 for safeguarding the assets of the Bank and preventing and detecting frauds and other irregularities; and

iv. that they have prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE

The Details on Corporate Governance are annexed.

ACKNOWLEDGMENTS

The Board of Directors is grateful to the valued customers, esteemed shareholders and the public at large for their patronage and confidence reposed in the Bank and places on record its deep appreciation. The Board of Directors thanks the Government of India, State Bank of India, Reserve Bank of India and other regulatory agencies for their valuable support and guidance throughout the year.

The Board of Directors places on record its deep appreciation of the commitment, sense of involvement and dedication exhibited by each staff member and constructive role played by the Employees Union and Officers Association in the overall development, growth and prosperity of the Bank.

For and on behalf of the Board of Directors

Mumbai Shiva Kumar

Dtd.28.04.2011 Managing Director


Mar 31, 2010

FINANCIAL HIGHLIGHTS

NET INTEREST INCOME

The Banks gross interest income increased from Rs.3810.28 crore during 2008-09 to Rs.3977.22 crore during 2009-10, recording a growth of 4.4%. Interest expenditure increased by 2.2% to Rs.2765.69 crore, as against Rs. 2707.06 crore in the previous year. The net interest income recorded a growth of 9.8% from Rs.1103.22 crore in 2008-09 to Rs.1211.53 crore during 2009-10. Due to higher decline in yield on advances relative to cost of deposits, the net interest margin declined from 2.81 % in 2008-09 to 2.70% in 2009-10

N0N INTEREST INCOME

The non-interest income of the Bank recorded a growth of 1.0%from Rs.577.05 crore in 2008-09 to Rs.582.67 crore during 2009-10. The growth was lower on account of 67.2% decline in profit on foreign exchange transactions from Rs.69.74 crore in 2008-09 to Rs.22.88 crore in 2009-10. The Government Commission income and profit on sales of investments recorded a growth of 15.0% and 20.9% respectively during the year under review.

OPERATING EXPENSES

During 2009-10, the operating expenditure increased to Rs.890.47 crore, recording a growth of 13.1 % from Rs.787.43 crore during 2008-09. Of this, employee costs increased by 8.9% to Rs.501.82 crore, while other operating expenditure increased by 19.0% to Rs.388.65 crore.

PROFIT

The operating profit of the Bank increased to Rs.903.73 crore during 2009-10, recording a growth of 1.2% compared to Rs.892.84 crore in the previous year. The net profit recorded a growth of 12.8% from Rs.403.45 crore in 2008-09 to Rs.455.16 crore in 2009-10.

KEY FINANCIAL INDICATORS

The return on assets improved to 0.93% during 2009-10 as against 0.92% in the previous year. The return on equity stood at 18.83% as against 19.71% in the previous year. The earnings per share increased from Rs.80.69 in 2008-09 to Rs.91.03 in 2009-10 while the book value per share improved from Rs.409.29 in 2008-09 to Rs.483.48 in 2009-10. As at end-March 2010, the capital adequacy ratio of the Bank stood at 11.94% and 13.30% as per Basel I and II norms, respectively as against 13.18% and 14.52% as per Basel I and II norms, respectively as at end-March 2009. This was well above the RBI benchmark of 9%. Due to rise in NPAs on account of continued stress faced by the industrial sector, the Banks Gross NPA ratio increased from 1.63% as at end-March 2009 to 1.72% as at end-March 2010 while Net NPA ratio improved from 0.85% to 0.77%. The average business per employee increased to Rs.628 lakh during 2009-10 as against Rs.555 lakh in the previous year. The net profit per employee improved to Rs.3.96 lakh during 2009-10, compared to Rs.3.55 lakh during 2008-09. The average business per branch increased to Rs.83.89 crore during 2009-10, as against Rs.74.34 crore in the previous year.

DIVIDEND

The Bank has declared a dividend of 144% (Rs. 14.40 per share of face value Rs.10) for the year 2009-10, which is higher than the dividend of 120% paid for the year 2008-09.

CREDIT MANAGEMENT

The overall credit demand remained subdued during the first three quarters of 2009-10 and signs of improved growth became more evident during the fourth quarter. While the Bank continued to target large corporates for qualitative volume growth, the thrust of the year remained on retail advances particularly agriculture, personal segment and Micro, Small & Medium Enterprises (MSMEs).

The Banks retail advances comprising

personal segment, small business and agriculture advances increased by Rs.2,798 crore, registering a growth of 19.9% which was better than the growth of 8.7% recorded in the previous year. The Commercial & Institutional (C&l) segment advances (other than food credit) registered a growth of Rs.3,066 crore i.e. 20.4%, compared to the growth of 27,5% in the previous year. Under the C&l segment, the Bank continued to lay emphasis on financing infrastructure projects including power and road, besides steel, cement, textiles and construction sectors.

In order to further improve the turn- around time for credit delivery, a Centralized Processing Cell (CPC) has been set up during 2009-10 for high value advances on the lines of similar initiatives for retail advances under the Business Process Re-engineering initiatives. Further, the Project Finance Cell set up at the Head Office in July 2008, continued focused attention on appraisal of projects involving cost upto Rs. 100 crore. A total of 35 projects, with an outlay of Rs.2,092 crore were appraised by the Cell during the year. The CPC sanctioned credit facilities aggregating Rs.6,390 crore to high value new customers under the C&l/ mid-corporate segment besides increasing credit limits of the existing customers based on assessment. In view of slowdown in demand, a total of 28 large accounts were re-structured upto 31 -03-2010 involving an exposure of Rs. 1,097 crore.

REPLACING HIGH COST BULK DEPOSITS

In line with the efforts initiated in the previous year, the Bank continued to replace high cost bulk deposits by a relatively more stable personal segment deposits. The ratio of high cost (over card rate) bulk deposits and Certificates of Deposits to total deposits, which was brought down from 29.5% in end-March 2008 to 18.4% as at end-March 2009, declined further to 14.2% as at end- March 2010.

PERSONAL BANKING

The growth in personal segment deposits during 2009-10 stood at Rs.4,585 crore (22.7%) which was better than the Banks overall deposit growth of 17.4%. in order to increase new customer acquisition, special campaigns were launched for opening of savings and current accounts with the Bank. During the year, the Bank opened 9.66 lakh new savings accounts including 1.53 lakh no-frills accounts (Saral Bachat Khata) launched for the purpose of financial inclusion.

With aggressive marketing, the personal segment advances recorded a growth of Rs.956 crore (17.6%), which was better than the growth of Rs.563 crore (11.4%) recorded in the previous year. The Bank launched an "Interest Subsidy Scheme for Housing the Urban Poor" and "Pension Plus Loan" schemes during the year. Besides, existing schemes such as car, housing, education, mortgage, two-wheeler, rent- plus, gold loan and personal loan schemes were modified in view of the market dynamics. "My Home Loan" and "Easy Car Loan" campaigns were also launched during the year. With special efforts, outstanding car loans and housing loans recorded a growth of 75.2% and 18.1%, respectively during 2009-10, as against a growth of 53.8% and 8.9% respectively in the previous year. During the year the Bank booked around 1.29 lakh new advances accounts and disbursed Rs.2,497 crore under various loan schemes under the personal banking segment.

PRIORITY SECTOR LENDING

Priority sector advances remain a major thrust area of the Banks operations. As at end-March 2010, the Banks priority sector advances increased to a level of Rs. 13,560 crore, as against Rs.11,758 crore in the previous year. This constituted 45.06% of the Adjusted Net Bank Credit, which was above the RBI benchmark of 40%. Priority sector advances in Rajasthan stood higher at 70.77%.

AGRICULTURE

The Bank accords high priority towards lending to agricultural sector. The flow of credit to agriculture increased from Rs.2,855 crore in 2008-09 to Rs.3,315 crore in 2009-10, recording a growth of 16.1%. The outstanding level of advances to agriculture, including the amount receivable from Government on account of Agriculture Debt Waiver Scheme, increased by 18.7%, from Rs.5,134 crore as at end-March 2009 to Rs.6,092 crore as at end-March 2010. Agriculture credit (including investments in RIDF) constituted 20.35% of the Adjusted Net Bank Credit, which was above the RBI benchmark of 18.0%. In the State of Rajasthan, the agricultural advances stood even higher at 38.27% of the Adjusted Net Bank Credit. As against the stipulated target of adding 100 new farmers on an average by each rural and semi-urban branch, the Bank added 191 new farmers per rural and semi-urban branch during the year. The Bank issued 1.35 lakh Kisan Credit Cards (KCCs) during the year, taking the total number of KCCs to 6.98 lakh as at end-March 2010.

In order to bring the farmers out of the clutches of the money lenders, the Bank had introduced a Debt Swap Scheme in the previous year. During 2009-10, assistance disbursed under the Debt Swap Scheme stood at Rs.71.52 crore benefiting 17,273 farmers. The outstanding assistance under the Scheme more than doubled from Rs.65.69 crore as at end-March 2009 to Rs. 134.67 crore as at end-March 2010. The number of beneficiaries under the Scheme also increased from 17,127 in the previous year to 33,376 farmers in March 2010, recording a growth of 94.9%.

Under Agriculture Debt Waiver and Debt Relief Scheme, 2008, the focus has now shifted towards maximizing the recovery in respect of cases where the 25% relief is to be provided subject to recovery of balance amount within the stated period. A special scheme of One- Time Settlement (OTS within OTS) was launched by the Bank during the year so as to provide some additional relief to the distressed farmers. Out of the total recoverable amount of Rs.636 crore under this category, an amount of Rs.557 crore (87.6%) has been recovered up to end-March 2010. In the Union Budget 2010-11, the Government of India has extended the due date of repayment by these farmers from December 31, 2009 to June 30, 2010, which has provided some more time to the Bank for recovery of these dues.

FINANCIAL INCLUSION

Following successful implementation of financial inclusion in 6 districts of Rajasthan, the Bank has commenced IT-enabled Financial Inclusion scheme viz.SBBJ Tiny which entails opening of no-frills accounts and providing biometrically enabled smart cards to population living in the unbanked areas of the State. Initially, the scheme covers savings account facility, but gradually other products like recurring deposits, fixed deposits, investments, insurance, remittances, loans, etc. are proposed to be added in a phased manner. The technology platform for the same has been finalized during the year 2009-10 conforming to the Open Standards for Smart Card Based Financial Inclusion solutions prescribed by Indian Banks Association and Institute for Development and Research in Banking Technology (IDRBT).

In line with RBI / Government of India directives, the Bank is expected to provide banking facilities in the identified 906 villages of Rajasthan having a population of over 2000 each, with the help of biometrically configured smart cards and by engaging business correspondents, by March 2011. During 2009-10, the Bank commenced the pilot phase of financial inclusion initiatives in three villages viz. Boore Khurd in Alwar District, Ranchorpur in Udaipur District and Bhairwa in Jaisalmer District and opened 450 smart card based no-frills savings accounts. With the help of experience gained, the Bank plans to open 3 lakh such accounts during 2010-11.

FINANCIAL LITERACY AND CREDIT COUNSELLING CENTRES

The Bank believes that the financial education is an integral part of financial inclusion. Accordingly, in order to educate farmers and other people in rural/ urban areas with regard to various financial products and services available from the formal financial sector, the Bank plans to set up Financial Literacy and Credit Counselling Centres (FLCCs) in 9 districts of Rajasthan where the Bank has the lead bank responsibility. These FLCCs are expected to become operational during 2010-11 and such services would be provided free of charge.

MICROCREDIT

In another initiative in the pursuit of financial inclusion, the Bank has been consistently ranked number one in credit linking Self Help Groups in the State since 2004-05. As at end-March 2010, the Bank has credit linked a total of 27,019 Self Help Groups with disbursements of Rs.142.32 crore, out of which 24,580 accounts are of women beneficiaries with disbursements of Rs. 122.63 crore.

MICRO, SMALL AND MEDIUM ENTERPRISES (MSMEs)

The main growth driver of the Indian economy, MSME sector accounts for 45% of manufacturing sector output, 40% of Indias exports and provides employment to about 6 crore persons spread over 2.6 crore enterprises.

With the help of renewed emphasis on financing this sector, the outstanding credit to MSME sector increased by 46.8% from Rs.4,015 crore as at end- March 2009 to Rs.5,896 crore as at end- March 2010. This includes retail trade advances amounting to Rs.803 crore, which were included in the definition of MSME sector by Government of India during the year 2009-10. As against the target of doubling the credit flow to SME sector between 2005-06 and 2009-10 in terms of the policy package of Government of India, the Bank has tripled the credit flow to this sector during the five year period.

As at end-March 2010 the outstanding assistance to micro and small enterprises increased by 50.5% to reach a level of Rs.4,652 crore, as against Rs.3,092 crore as at end-March 2009. As against the target of financing 2805 new SME accounts (5 new accounts per urban/ semi-urban branch), the Bank has assisted 25,730 new MSME units during the year 2009-10. Since August 2008, the MSME units have been facing major constraints on account of slowdown of demand from domestic and export sectors. In order to help these units, the Bank has continued providing relief and concessions, including relaxation in the lending rates, so as to enable them to revert to the growth trajectory at the earliest. The benefit of SME Help Scheme was extended to the new customers during the year. Besides, in order to benefit the small borrowers, the maximum eligible loan under Laghu Udyami Credit Card (LUCC) scheme was increased from Rs. 10 lakh to Rs.20 lakh during the year.

The Bank attaches high importance to providing collateral free loans to Micro

and Small Enterprises (MSEs) under the Credit Guarantee Scheme of Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). During the year, the Bank provided new collateral free loans under the Credit Guarantee scheme to 5,080 MSEs amounting to Rs.70.34 crore, taking the level of these loans to Rs.105.56 crore to 8,403 units as at end-March 2010.

GOVERNMENT SPONSORED SCHEMES

Providing assistance to entrepreneurs under the Government sponsored schemes has been one of the key strategies of the Bank in pursuit of financial inclusion. The position under various Government sponsored schemes as at end-March 2010 is as under:-

Scheme Number of Amount Beneficiaries sanctioned during the financial year (Rs. crore)

Prime Ministers 836 44.43 Employment .

Generation Programme (PMEGP)

Swarn Jayanti 22079 43.83 Gram Swarojgar Yojana (SGSY)

Swarn Jayanti 4403 13.11 Shahri Rojgar Yojana (SJSRY)

LOANS TO WOMEN BENEFICIARIES

As at end-March 2010,1.61 lakh women have benefited from financial assistance under different schemes of the Bank with total outstanding of Rs.1628.29 crore, equivalent to 5.41 % of the Adjusted Net

Bank Credit, which is above the 5% benchmark prescribed by RBI.

GOVERNMENT BUSINESS

The Bank conducts Government business on behalf of the State/ Central Government departments through the authorised branches. Collection of income tax, central excise, service tax, value added tax, etc. is also done through the electronic mode. The Bank has established a Centralized Pension Processing Centre (CPPC) which calculates as well as credits the accounts of pensioners across all the branches. During 2009-10, commission income from Government business increased by 15.0% to Rs. 150.87 crore, as against Rs.131.19 crore in the previous year.

INTERNATIONAL BANKING

The Bank has a wide network of 73 Authorized Category B branches and 180 Category C branches, equipped with the state of the art technology to cater to the needs of exporters, importers and Non-Resident Indians (NRIs). The Bank maintains 20 NOSTRO accounts in all major currencies and non-account correspondent banking relationship with all major banking groups in the world. Online remittance facility has been made available for NRIs and the inward remittances are also facilitated through tie-ups with Gulf based Exchange Houses. During 2009-10, the total number of Exchange Houses with which the Bank has such arrangement, increased to 8. Besides, proprietary forex trading has continued during the year to take the advantage of the market movements.

During 2009-2010, the Banks NRI deposits increased to Rs.816 crore, recording a growth of 6.9% over the previous year. Despite steep fall in countrys exports and imports, the Banks merchant turnover increased from Rs. 14,818 crore during 2008-09 to Rs.14,863 crore during 2009-10. Export credit outstanding declined marginally from Rs. 1,738 crore as at end-March 2009 to Rs. 1,735 crore as at end-March 2010.

INDUSTRIAL REHABILITATION

In the area of Industrial Rehabilitation, the Bank continued to emphasize on timely placing the potentially viable units under rehabilitation / restructuring packages drawn under the aegis of BIFR/Corporate Debt Restructuring (CDR) system. The Bank has its own Industrial Rehabilitation Policy and Policy for Sale of NPAs which are reviewed and updated from time to time. For recovery of Banks dues in hard core stressed cases where rehabilitation/ restructuring is not feasible, other measures including action under SARFAESI Act, legal recourse, compromise settlements, assignment of debt, are being adopted.

As at end-March 2010, the Bank had 27 large sick/weak units on its books with aggregate outstanding of Rs.224.88 crore. There were 16 CDR cases with aggregate exposure of Rs.423.75 crore and 23 BIFR cases with exposure of Rs.200.58 crore. The Bank has been acting as BIFRs operating agency in 9 cases. During the year under review, 8 accounts with the exposure of Rs.215.65 crore have been restructured under the CDR mechanism as required by the economic crisis.

NPA MANAGEMENT

In order to control the Non-Performing Assets (NPAs), the Bank has been intensively monitoring large value accounts, following closely with DRT/ BIFR and undertaking restructuring of viable accounts besides utilizing the remedies available under the SARFAESI Act. Wherever desirable, the outright sale of un-productive assets to Asset Reconstruction Companies is also considered by the Bank. The progress in respect of current and potential NPAs is monitored on a daily basis by providing separate templates on the Banks Intranet site, and also discussed with regional and zonal offices through periodical videoconferencing. The total number of NPA free branches stood at 83 as at end-March 2010, unchanged from the previous year.

Total reduction in NPAs during the year

2009-10was Rs.395.18 crore. However, due to continued stress faced by many sectors of the economy, new additions to NPAs stood at Rs.516.70 crore. As a consequence, the gross and Net NPAs increased to Rs.611.85 crore and Rs.271.25 crore respectively as at end- March 2010, compared to Rs.490.33 crore and Rs.252.94 crore respectively as at end-March 2009. The Gross NPA ratio increased from 1.63% as at end- March 2009 to 1.72% as at end-March 2010, while the net NPA ratio improved from 0.85% as at end-March 2009 to 0.77% as at end-March 2010. The Bank is putting in place a multi-pronged strategy to reduce NPAs during the year 2010-11.

RISK MANAGEMENT

The Bank has an integrated Risk Management System to deal with the credit, market and operational risks. Risk management function is undertaken with the help of well-designed organizational structure consisting of different Committees at various tiers of administration. At the apex level, there is a Risk Management Committee of the Board (RMCB) which is responsible for policy and strategy for integrated risk management in the Bank. Besides, there are Credit Risk Management Committee (CRMC), Asset Liability Management Committee (ALCO), Market Risk Management Committee (MRMC) and Operational Risk Management Committee (ORMC) for formulating and reviewing the risk management policies and monitoring their implementation. Zonal Risk Management Committees (ZRMCs) constituted at the Zonal Offices manage operational risk at branches under their control. The Bank is Basel-ll compliant and the Capital to Risk Weighted Assets Ratio (CRAR) is also being worked out as per the guidelines of Basel-ll.

The risk management policies covering credit, market and operational risks envisage identification, measurement and management of major risks faced by the Bank. These policies are reviewed and updated from time to time keeping in view the dynamic business environment. During 2009-10, the third phase (Part-I) of Risk & Control Self Assessment (RCSA) workshop was completed at 350 branches. Phase-Ill (Part-ll) of RCSA has also been rolled out at the remaining 348 branches, BPR Processing centres and HO

Departments. The Operational Risk Management Manualjs also in place for the help of the operating staff.

In terms of RBI guidelines, the Bank is endeavouring to get the corporate customers rated by external agencies for which the tie-ups have been made with CRISIL, ICRA, CARE and Fitch (India) Ltd. Stress testing is being done regularly for both credit and market risks and the policies relating to such stress are updated annually. The Bank is in the process of migrating to advanced approaches and the creation of a historical data base for the purpose of computing Probability of Default (PD), Exposure at Default (EAD) and Loss Given Default (LGD).

During the year, mid-office (domestic and forex) has been shifted from Treasury and brought under the control of Integrated Risk Management Department for effective monitoring of Market Risk, independent of treasury operations. To monitor the resilience of the Investment Portfolio of the Bank, stress tests and scenario analysis on market risk covering events such as decline in stock indices, rise in bond yields and adverse movement in foreign exchange rates have been conducted regularly during the year as per the Stress Testing Policy of the Bank.

The Bank has-a comprehensive Asset Liability Management (ALM) system in place for effective management of liquidity position. The Asset Liability Management Committee (ALCO) oversees and gives guidance for managing liquidity mismatches in line with the prudential guidelines of RBI and Banks internal policies.

INTERNAL CONTROL, INSPECTION AND AUDIT

A well-established independent audit system and structure is functioning in the Bank to ensure adequate internal control for safe and sound operations. Internal Audit is carried out under Risk Focused Internal Audit (RFIA) as envisaged under Risk Based Supervision of RBI with focus on assessment of risk and internal control mechanism.

The branches have been categorized into three groups as per risk perception and are subject to varying degrees of audit. During 2009-10, 606 branches and 55 Cells under Business Process Re-engineering (BPR) initiatives h^ve been subjected to internal audit. No branch of the Bank remained overdue for audit as on 31.03.2010. 124 branches, covering 66.8% of advances, 50.8% of deposits and 95.0% of the non- fund based business have been placed under continuous surveillance through the concurrent audit. Besides, 12 Head Office Departments and 25 BPR entities are also subjected to concurrent audit system. IS audit cell is in place to conduct IS audit of major IT establishments including Core Banking project, Zonal Computer Centers, etc. in accordance with RBI directives and Banks IT Security Policy.

As at end March 2010, 98.9% of total branches of the Bank were rated "Efficiently Run" or "Well Run."

RECONCILIATION OF INTER OFFICE TRANSACTIONS

As per RBI guidelines, all the entries need to be reconciled within a period of six months from the date of their origin. By end-March 2010, the Bank had reconciled inter-branch transactions originated upto 31.12.2009 i.e. well before the time limit prescribed. The Bank is committed to perform better than the target set by RBI and shall aim at reconciling all entries within two months of their origin.

INFORMATION TECHNOLOGY MOBILE BANKING

After successful implementation of core banking solution, the Bank has taken technology to the next level by providing mobile banking facility for the customers during the year. This new product viz. State Bank Freedom provides mobile banking facility to customers having savings or current account with the Bank with an upper ceiling of Rs.50000 for funds transfer and for purchase of goods / services per day within overall calendar month limit of Rs.2.50lakh.

AUTOMATED TELLER MACHINES (ATMS)

During 2009-10, the Bank launched an aggressive drive to expand its ATM network. A total of 455 new ATMs were installed during the year as against 89

ATMs installed in the previous year, taking the total number of ATMs to 950 including 3 Mobile and 5 Biometric ATMs. With this the number of ATMs has surpassed the number of branches of the Bank. All the ATMs are connected to the network of State Bank Group ATMs, thereby enabling more than 28.9 lakh cardholders of the Bank to have access to over 21,465 ATMs of the State Bank Group all over the country. The customers can also access ATMs of other Banks free of charge upto five transactions per month subject to a maximum of Rs. 10,000 per transaction.

INTERNET BANKING

Internet banking facility for personal and corporate customers is available at all the branches of the Bank which enables the customers to undertake banking transactions from the comfort of their homes or offices. Various facilities available through internet banking include on-line funds transfer, payment of certain direct and indirect taxes of Central and State Government, on-line application of Initial Public Offers (IPOs), booking of railway tickets, payment of railway freight and utility bills of more than130billers.

In order to enhance the awareness about internet banking amongst customers as well as staff members, the Bank has organized various seminars and workshops besides releasing advertisements in the prominent newspapers. Internet banking kiosks have been installed at 77 branches. With special emphasis, the total number of internet banking users has nearly doubled during the year to 3.52 lakh, including 3.24 lakh retail customers and 28,430 corporate customers. The Bank has launched a Loyalty Rewards Programme for retail internet banking customers w.e.f. March 1,2010 to further popularize the product.

E-TRADE FACILITY

The Bank had launched an E-Trade facility during 2008-09 in association with SBI Cap Securities Ltd., with the help of which, the customers can trade on-line in stock markets, invest in IPOs or mutual funds. Encouraged with the response, all the branches of the Bank have been authorised to source the applications for Demat and E-trade accounts.

ELECTRONIC PAYMENT SYSTEMS

The Bank has continued to take measures to popularize Real Time Gross Settlement (RTGS) and National Electronic Fund Transfer (NEFT) which enable the customers to make their inter-bank remittances in a cost effective, faster and secure manner through any branch or the internet banking mode. Besides,State Bank Group Payment functionality for electronic funds transfer within the State Bank Group is also available to the customers of the Bank.

IT SECURITY

The Bank has a comprehensive IT and Information Systems (IS) Security Policy that addresses the threats and risks associated with IT enabled services including addressing concerns of maintaining customers confidentiality, security and integrity of data. The Banking applications have built-in security features like access control, data encryption and transmission through secured channels as per the requirement of the application. The threat of virus is minimized by having a centralized anti-virus solution. Adequate Firewalls and Intrusion Detection Systems are in place so as to prevent unauthorized access to the network. The security of the network is being managed by Network Management Consultants of the Bank. The Disaster Recovery Plan (DRP) and Business Continuity Plan (BCP) for all the branches are in place. During the year, a Disaster Recovery site for Head Office applications has been activated at the Zonal office, Udaipur, which initially covers service tax, debt relief and pension applications.

Steps have been taken to increase security awareness amongst the staff as well as the customers. An E-bulletin on IS Security and IT Governance has been made available at the Banks intranet site w.e.f. August 2009. A handbook viz. "Tips on Information Systems Security" has also been brought out. Besides, sessions on information Security have been made a regular feature in the training programmes conducted at the staff training centers.

In order to identify and examine suspicious transactions, the Bank has installed the AMLOCK software besides setting up an Anti Money Laundering Cell at the Head Office. The customers accounts have been divided into different risk categories and alerts are generated once any transaction exceeds a pre-defined threshold limit. These alerts help in identification of suspicious transactions, which are further reported to Financial Intelligence Unit, Government of India, in appropriate cases.

CUSTOMER SERVICE

The primacy of the customer is the cornerstone of the Banks policy. Accordingly, providing value added services and upgradation of key processes is a continuous feature in the Bank which has vastly helped in providing customers a highly satisfying banking experience.

A robust grievances redressal mechanism is in place in the Bank to address the problems faced by the customers and take proactive steps to mitigate them. The standards of customer services are periodically reviewed by the Customer Service Committee of the Board and Standing Committee on Customer Service. Besides, meetings of the Customer

Service Committee at the Head Office, Zonal Office & branches are regularly held to oversee the customer service standards. Customers are invited to attend the customer relations programmes to review the quality of services rendered and to initiate measures for bringing about on-going improvement in the service quality. The Bank abides by the Code of Banks Commitment to Customers instituted by the Banking Codes and Standards Board of India and is committed to provide quality services to its esteemed customers.

DISCLOSURE OF COMPLAINTS/ UNIMPLEMENTED AWARDS OF BANKING OMBUDSMEN

In terms of RBI circular DBOD. No. Leg BC.60/09.07.005/2006-07 dated 22.02.2007, the information in respect of customer complaints and awards passed by Banking Ombudsmen is given in the Table below:-

A. Customer Complaints

(a) No.of Complaints pending 31 at the beginning of the year

(b) No. of Complaints received 3703 during the year(*)

(c) No. of Complaints redressed 3677 during the year(*)

(d) No. of Complaints pending 57 at the end of the year

(*) Exduding 1660 complaints found non-maintainable.

B. Awards passed by the Banking Ombudsmen

(a) No. of unimplemented Awards at the beginning of the year

(b) No. of Awards passed by 1 the Banking Ombudsmen during the year

(c) No. of Awards implemented 1 during the year

(d) No. of unimplemented Awards at the end of the year

BUSINESS PROCESS RE-ENGINEERING

The Business Process Re-engineering (BPR) initiatives at select centers have gathered further momentum during 2009-10 with the loan Central Processing Cells (CPCs) migrating to end-state, thereby empowering the linked branches to concentrate on sales and service and optimize transaction costs. As at end-March 2010,15 loan CPCs at 14 centres including Retail Assets Central Processing Centre (RACPC) / Small and Medium Enterprises City Credit Centre (SMECCC) / Retail Assets and Small and Medium Enterprises City Credit Centres (RASMECCCs) are handling appraisal as well as maintenance of retail and SME loans for 238 linked branches. 8 Relationship Managers-Medium Enterprises (RM-MEs) are pro-actively mobilizing asset business from new and existing customers by providing them single-point contact at 5 centres. Rural Central Processing Centres (RCPCs) are operating at 11 centres catering to loan products in rural and semi-urban branches on proto-type basis. Stressed Assets Resolution Centres (SARCs) operating at 14 centres have helped in reducing workload of recovery from the linked branches with minimum time and costs. As at end-March 2010, 3 Trade Finance Central Processing Centres (TFCPCs) are operating at Jaipur, Delhi and Udaipur, handling trade finance related back office operations covering Inland and Foreign Trade transactions, including issuance of Bank Guarantees and Letters of Credit.

The Bank has positioned 19 Relationship Managers-Personal Banking (RM-PBs), providing relationship-based services to High Networth Individuals at 15 centres. Multi Product Sales Teams (MPSTs) are operating at 13 centres for doorstep marketing of retail loans, small enterprise business loans as also liability products. These teams also canvass cross-selling products of non-banking subsidiaries of SBI viz. SBI Life and SBI Mutual Funds.

Centralised Clearing Processing Centres (CCPCs) are operational at 9 centres & handle both inward and outward clearing instruments of linked branches. The Centralized Pension Processing Centre (CPPC) located at Jaipur has relieved the 731 pension paying branches, of back office functions related to pension payments and provides on-line credits to pensioners accounts. 9 Currency Administration Cells (CACs) at 8 centres are managing remittance & transport of cash across Currency Chest branches, linked branches and Off-site ATMs to help reduce hand balances.

The Liability Central Processing Centre (LCPC) located at Jaipur functions as a centralized, computerized, core- enabled back office, for opening and maintenance of liability accounts and related KYC compliances. The LCPC manages the providing of Welcome Kit, personalized cheque books, scanning and linking of signatures and centralized storage of account opening forms & related documents. Currently 281 branches are linked to LCPC with the coverage proposed to be extended to all branches in due course.

Keeping in view the centrality of customers, the Bank has taken up redesigning of branches in an aggressive manner. As at end-March 2010,114 branches at BPR centres have been re-designed as per the requirements of BPR initiatives of the Bank

CROSS-SELLING

Cross-selling of life and non-life insurance, mutual funds and credit card products has emerged as an important avenue to augment the non-interest income of the Bank. For the purpose, the Bank has in place tie up arrangements with SBI Life Insurance Co. Ltd., National Insurance Co. Ltd., SBI Mutual Funds, Birla Sun Life Mutual Fund and SBI Cards & Payments Services Pvt. Ltd. During 2009-10, the Bank launched several campaigns for marketing of these products which helped in increasing the total income from cross selling activities from Rs. 12.02 crore in 2008-09 to Rs. 19.24 crore in 2009-10, recording a growth of 60.1%.

APPLICATIONS SUPPORTED BY BLOCKED AMOUNT (ASBA)

In order to impart greater efficiency in public issuances, a supplementary process of applying in the public issues has been introduced by the Securities and Exchange Board of India (SEBI) viz. Applications Supported by Blocked Amount (ASBA). The Bank has been authorised by SEBI as Self Certified Syndicate Bank, eligible to accept applications under the ASBA process. Upon stabilization of the Scheme, the Bank has designated 8 more branches during 2009-10, which can acceptthese applications, taking the total number of designated branches to 15. A total business of Rs.22.91 crore has been handled under the ASBA process during the year under review.

COMMUNITY SERVICES BANKING

As a responsible Corporate citizen, the Bank continues to undertake community based social activities such as tree plantation, free medical camps, blood donation camps, establishing water huts, sports competitions, etc. During 2009-10, the Bank provided two delivery vans to the Akshaya Patra Foundation, Jaipur, for transportation of mid-day meals to the under-privileged children in the Government schools. Assistance was provided to Life Line Foundation engaged in the security, help and welfare of people suffering from accidents on the National Highways. The Bank honoured widows of ex- servicemen/ martyred soldiers in a rally organised for the welfare of war-widows atSikarandChuru. Every branch of the Bank continued to adopt one girl child each from a poor family with an objective of providing financial assistance for pursuing studies in Government/Municipal schools. During the year, Jaipur Foot were distributed to physically challenged persons while blankets/ quilts/ sweaters were distributed to the needy people. Assistance was also provided for development of a public park at Barmer.

Besides, State Sports Council was provided assistance for organizing summer sports camp for grooming junior sportspersons and the meritorious students of the State were honoured with cash rewards and SBBJ Trophy.

ASSISTANCE TO MINORITY COMMUNITIES, WEAKER SECTIONS AND SCHEDULED CASTES/ SCHEDULED TRIBES

The Bank continuously endeavours to reach out to the minority communities particularly in the minority concentration districts/ towns identified by RBI. As at end-March 2010, assistance to these communities stood at Rs.843.60 crore spread over 71,428 accounts, while the financing to weaker sections stood at Rs.5083.66 crore benefiting 6,71,802 persons. The ratio of assistance to weaker sections as a percentage of Adjusted Net Bank Credit stood at 16.89%, as at end-March 2010, which was above the benchmark of 10% prescribed by RBI.

As at end-March 2010, the outstanding assistance towards Scheduled Castes (SCs)/ Scheduled Tribes (STs) stood at Rs.1518.77 crore in 1,89,452 accounts. Advances under Differential Interest Rate (DIR) Scheme stood at Rs.35.84 crore benefiting 35,143 persons. The Bank has disbursed 5,956 new loans under the DIR Scheme during 2009-10 with credit limits of Rs.7.89 crore.

Under Government sponsored schemes viz. Swarn Jayanti Gram Swarojgar Yojana (SGSY), Swarn Jayanti Shahri Rojgar Yojana (SJSRY), Scheme for Liberation and Rehabilitation of Scavengers (SLRS) and Differential Interest Rate (DIR) Schemes, the total demands for recoveries from SC/ ST borrowers was made at Rs. 14.53 crore during the year. Against this, the actual recoveries stood at Rs.8.23 crore, i.e.56.6% of the demand made.

LEAD BANK SCHEME

The Bank continues to have lead bank responsibility in nine districts of Rajasthan viz. Barmer, Bikaner, Hanumangarh, Jaisalmer, Jalore, Pali, Rajsamand, Sirohi and Udaipur. The Bank has been implementing and monitoring the annual credit plan and other developmental and poverty eradication schemes launched by Government of India, Rajasthan Government, NABARD and other developmental agencies in these districts. Out of the total Annual Credit Plan of Rs.5,010 crore for the year 2009-10 set for all banks operating in these nine lead districts, the Banks share was envisaged at Rs.1,195 crore, against which the Banks performance stood atRs.1,793 crore as on 31.3.2010 recording an achievement of 150.1 %.

RURAL SELF EMPLOYMENT TRAINING INSTITUTE (RSETI)

In order to address the problem of unemployment amongst youth, the Bank has set up a "Skill & Entrepreneurship Development Institute (SEDI)" in Pali district and seven "Rural Self Employment Training Institutes (RSETIs)" at Bikaner, Sirohi, Jaisalmer, Jalore, Barmer, Rajsamand and Hanumangarh districts. Of these, two RSETIs at Jalore and Barmer were set up during 2009-10. By end-March 2010, 7836 candidates have been trained at these institutes and with the help of this training, 2051 candidates have been engaged in various jobs.

KISAN CLUBS AND TRAINING TO FARMERS

The bank has formed 472 Kisan Clubs as at end-March 2010. The 9 Lead District Offices conducted 374 training programmes for farmers for providing awareness on latest technological developments in agriculture, horticulture, dairy and vermiculture, etc. A total of 16,116 farmers have benefited from these training programmes.

REGIONAL RURAL BANK

The Bank has sponsored one Regional Rural Bank (RRB) viz.MGB Gramin Bank, which has a network of 216 branches spread over six districts viz. Pali, Jalore, Sirohi, Sriganganagar, Hanumangarh and Bikaner. The Bank continues to provide managerial support and financial assistance to MGB Gramin Bank. During 2009-10, the Bank enhanced the refinance limit for this RRB from Rs.212.62 crore to Rs.301.50 crore.

The Bank is in the process of providing technical assistance to MGB Gramin Bank for implementation of core banking solution and 10 branches have been brought under CBS on a pilot basis. As at end March 2010, MGB Gramin Bank had deposits of Rs.1,787 crore, advances of Rs.1,433 crore and recorded a profit before tax of Rs.22.63 crore during 2009-10.

BRANCH EXPANSION

During 2009-10, the Bank opened 10 new fully computerized branches. In an important restructuring exercise, the Bank converted 3 service branches into Centralised Clearing Processing Centres (CCPCs) while 5 service branches were closed down and their operations were shifted to CCPCs. Besides, two branches at Kolkata were merged into one branch. As at end- March 2010, the total number of branches stood at 861, comprising 858 business branches, 2 asset recovery branches and 1 treasury branch. Of these, there are 297 rural branches, 242 semi-urban branches, 157 urban branches and 165 metro branches. The number of branches in Rajasthan increased to 703, which is the largest among all banks. Out of these, 532 branches are located in rural and semi- urban areas, which play an important role in rural development and poverty alleviation in the State.

BRANCH AMBIENCE

During the year 2009-10, the Bank continued the exercise for face-lifting of branches so that the customers get adequate space and comfort while transacting their business. A total of 34 branches were renovated during the year.

HUMAN RESOURCES DEVELOPMENT

The Banks staff strength as on 31.03.2010 was 12,356 employees. Of these, 2,581 (20.9%) belong to Scheduled Caste (SC) and 995 (8.1%) belong to Scheduled Tribe (ST) categories. The reservation policy of the Government is being implemented scrupulously in the Bank. The Bank promoted 201 clerical staff to supervising cadre and recruited 137 Probationary Officers in addition to 613 clerical cadre employees during 2009-10.

The Bank believes that its human resources are the most important constituents and their development is necessary for growth of the Bank. In the dynamic business environment, it is necessary that adequate training and sensitization is provided to the staff members on an on-going basis. During 2009-10, a total of 6,047 employees, including 228 employees of the sponsored RRB, were provided training on various subjects related to banking and technology at the three Staff Training Centres of the Bank. Pre- recruitment training was provided to 484 SC/ST candidates appearing in the written test for recruitment of officer cadres during the year. Besides, 45 seminars / workshops were conducted to update the skills of the employees on contemporary issues. During the year 2009-10, 760 officials were deputed to apex training institutions within the country while 6 officials were deputed to prestigious foreign training institutes for specialized training.

ORGANISATIONAL PUNNING

With a view to facilitating improved supervision, organizational effectiveness and customer services, 9 branches were reallocated during 2009-10from Region-Ill (Pali district) to Region-IV (Nagaur district) in the Jodhpur Zone. Reorganization of Credit Department at Head Office was undertaken and the roles and responsibilities of Central Processing Cells were clarified. In order to improve operational control and exploit business potential, the incumbency of Clearing CPC (Jaipur), RASMECCC (Kolkata) and N.S. Road (Kolkata) were upgraded to Senior Management Grade Scale (SMGS)-V during the year.

STAFF WELFARE

During 2009-10, the insurance cover for employees under the group insurance scheme of SBI Life was increased from Rs.5 lakh to Rs.6 lakh (Rs. 10 lakh to Rs. 12 lakh in the case of accidental death) besides waiver of housing loan of the deceased employees to the extent of Rs.2lakh. Two new holiday homes were set up at Chandigarh and Mussorie apart from the existing holiday homes at Jaipur, Mt. Abu, Manali, Mumbai, Goa, Delhi, Haridwar, Nainital, Katra, Bengaluru and Udaipur. Other staff welfare activities like granting scholarship to meritorious wards of employees and providing free medical consultancy services at various hospitals were continued. The Jodhpur Zone also organized an All India Kabaddi Tournament during the year.

INDUSTRIAL RELATIONS

The industrial relations in the Bank continued to remain cordial during the year under review. The Employees Union and Officers Association have extended their wholehearted cooperation for the all-round growth of the Bank. A well-established and consultative mechanism is available in the Bank, for resolution of various issues emerging from time to time.

VIGILANCE ADMINISTRATION

The Bank considers the Vigilance Administration as an integral part of the Management. Particularly, preventive vigilance activities are being accorded high priority in the Bank rather than detective and punitive aspects of vigilance. The Vigilance Department conducts Preventive Vigilance Inspections that help in timely detection of frauds and in plugging the loopholes in the systems and procedures. They also create awareness among the staff members about certain vital systems and procedures at the branches. Complaints received in the Vigilance Department are dealt with expeditiously and in a professional manner. In order to decide vigilance angle, complaints received in the Vigilance Department are put up to the Internal Advisory Committee, consisting of two General Managers and one Dy. General Manager. Significant emphasis is laid on the transparency in the tendering process (procurements of goods and services, auctions, etc.) by the Bank. The tenders issued by the Bank are uploaded on the Banks website as well as Government of Indias (NICs) website. The Bank has also issued guidelines for lodging complaints under the "Whistle Blower Policy". A special appeal on the subject of "Whistle Blower Policy" was uploaded on the intranet website of the Bank for motivating the staff to make use of the policy. As in previous years, the Bank celebrated Vigilance Awareness Week in the month of November 2009, as per the guidelines issued by the Central Vigilance Commission.

USE OF HINDI

The Official Language Implementation Committee at Head Office held 8 meetings during the year to discuss the progressive use of Hindi in the Bank. 849 branches / offices of the Bank have been notified under rule 10 (4) of the Official Language Rules 1976. Out of these, 702 branches / offices are specified under rule 8(4), which constitute 82% of total notified branches / offices of the Bank.

Section 3 (3) of Official Languages Act, 1963 is being meticulously followed in the Bank. Facility of Hindi version has also been made available in the Core Banking Software. In compliance of the orders of the Honble President of India, "Unicode" system has been implemented in the Bank and all the ATMs are operated in bilingual/ trilingual manner.

Hindi Fortnight was observed during September 1-14, 2009, during which various competitions were held and prizes awarded to the winners. To impart the knowledge of Official Language Policy and job oriented Hindi, 37 workshops/ training programmes were organized. During the year, 901 branches / offices were inspected for implementation of the Official Language. To increase progressive use of Hindi, competitions for Head Office Raj Bhasha Trophy and Zonal Raj Bhasha Trophy were organised during the year. In compliance of the directions given by Third sub-Committee of the Sansadiya Rajbhasha Samiti, 17 Departments at Head Office and 8 Departments of each Zone are working completely in Hindi.

ELECTRONIC CLEARING SERVICE

Electronic Clearing Service (ECS) facility for payment of dividend is being extended in 24 centres to shareholders who have opted for the same. These centres are Agra, Ahmedabad, Bengaluru, Chandigarh, Chennai, Coimbatore, Ghaziabad, Hyderabad, Indore, Jaipur, Jodhpur, Kanpur, Kolkata, Lucknow, Ludhiana, Mumbai, Nagpur, New Delhi, Patna, Pune, Surat, Udaipur, Vadodara and Varanasi.

AUDIT

State Bank of India, with the concurrence of the Reserve Bank of India, approved the appointment of five firms of Chartered Accountants viz. M/s Vyas & Vyas of Mumbai, M/s L.U. Krishnan & Co. of Chennai, M/s B. Khosla&Co. of Jaipur, M/s S.L. Chhajed & Co. of Jaipur and M/s S.C.J. Associates of Agra as the Banks Statutory Central Auditors for the year 2009-10. The scope of audit covered 829 branches/ central processing cells as against 854 branches/ central processing cells covered in 2008-09.

RESPONSIBILITY STATEMENT

The Board of Directors hereby states:

i. that in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. that they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Bank as on the 31st March 2010, and of the profit or loss of the Bank for the year ended on that date;

iii. that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Banking Regulation Act, 1949, and State Bank of India (Subsidiary Banks) Act, 1959 for safeguarding the assets of the Bank and preventing and detecting frauds and other irregularities; and

iv. that they have prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE

The Details on Corporate Governance are annexed.

ACKNOWLEDGMENTS

The Board of Directors is grateful to the valued customers, esteemed shareholders and the public at large for their patronage and confidence reposed in the Bank and places on record its deep appreciation. The Board of Directors thanks the Government of India, State Bank of India, Reserve Bank of India and other regulatory agencies for their valuable support and guidance throughout the year.

The Board of Directors places on record its deep appreciation of the commitment, sense of involvement and dedication exhibited by each staff member and constructive role played by the Employees Union and Officers Association in the overall development, growth and prosperity of the Bank.

For and on behalf of the Board of Directors

Mumbai

Dtd.22.04.2010 Managing Director

 
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