Directors Report of State Bank of Travancore
Mar 31, 2015
During the course of the fnancial year 2014-15, the following changes
have occurred in the Board of Directors of the Bank.
1. Shri. M.C Jacob and Shri Sajen Peter were elected as Shareholder
Directors of the Bank with efect from 29th April 2014.
2. Shri. S Vishvanathan, Managing Director & Group Executive (A&S),
Director under clause (c) of sub-section
(1) of Section 25 of the State Bank of India (Subsidiary Banks) Act,
1959 upon superannuation, tendered his resignation on 1st May 2014,
from the Board of Directors.
3. Shri. Rajeev Nandan Mehra, Director under clause (c) of sub-section
(1) of Section 25 of the State Bank of India (Subsidiary Banks) Act,
1959 upon superannuation, tendered his resignation on 1st May 2014,
from the Board of Directors.
4. Shri. B Ramesh Babu, Chief General Manager (A&S), State Bank of
India, was appointed as Director, under Clause (c) of sub-section (1)
of Section 25 of the State Bank of India (Subsidiary Banks) Act 1959
with efect from 5th May 2014.
5. Shri. Ramesh Chandra Srivastava, General Manager (A&S), State Bank
of India, was appointed as Director under Clause (c) of sub-section (1)
of Section 25 of the State Bank of India (Subsidiary Banks) Act 1959
with efect from 17th July 2014 in place of Shri Purna Chandra Jena.
6. Shri. V.G Kannan, Managing Director & Group Executive (A&S), was
appointed as Director, under Clause (c) of sub-section (1) of Section
25 of the State Bank of India (Subsidiary Banks) Act 1959 with efect
from 21st October 2014.
7. Shri. Ashok Kumar Singh, was appointed as Director under Clause (e)
of sub-section (1) of Section 25 of the State Bank of India (Subsidiary
Banks) Act 1959 with efect from 29th January 2015 in place of Shri
Jitendar Kumar Mehan.
The Board of Directors welcomed Shri. V.G Kannan, Shri. B Ramesh Babu,
Shri. Ramesh Chandra Srivastava, Shri. Ashok Kumar Singh, Shri. M.C
Jacob and Shri. Sajen Peter, as Directors of the Bank.
The Board of Directors placed on record their appreciation and thanks
for the valuable services rendered by Shri. S Vishvanathan, Shri.
Rajeev Nandan Mehra, Shri. Purna Chandra Jena and Shri. Jitendar Kumar
Mehan, during their tenure as Directors of the Bank.
15. Board and Executive Committee Meetings
During the year 2014-15, ten Meetings of the Board of Directors were
held. The Executive Committee of the Board of Directors met 14 times.
16. Statutory Audit
M/s Kumar Vijay Gupta & Co., New Delhi, M/s G.Venugopal Kamath & Co.
Kochi, M/s Gopalaiyer and Subramanian, Coimbatore, M/s.Babu A
Kallivayalil & Co. Kochi, were appointed as Statutory Auditors of the
Bank for the year 2014-15 by State Bank of India, with the approval of
Reserve Bank of India. The Board of Directors sincerely appreciates the
valuable suggestions ofered and the excellent support and cooperation
extended by the Statutory Central Auditors for the completion of the
audit well in time.
17. Acknowledgments
The Board of Directors gratefully acknowledge the valuable advice and
support extended by the Ministry of Finance, Government of India,
Reserve Bank of India, Indian Banks'' Association, State Bank of India
and the cooperation and support extended by the Securities and Exchange
Board of India, Financial Institutions, Stock Exchanges and
Correspondents.
The Board also wishes to place on record its sincere
appreciation for the excellent support, goodwill and patronage received
from the esteemed customers and shareholders, the support and
cooperation extended and contributions made by the members of staf-
award and supervising. The Board also places on record its appreciation
for the contributions made by the Employees'' Union and Ofcers''
Association.
By Order of the Board,
Jeevandas Narayan
Managing Director
Mar 31, 2014
The Bank''s Performance
Net Profit for the year stood at Rs.304.34 crore as compared to T615.04
crore for the previous year 2012-13, showing a decline of 50.52% over
last year. The Operating Profit (after Staff Provisions) for the year
ended 31st March, 2014 stood at Rs.1369.69 crore as compared to Rs.1351.00
crore recorded for the year ended 31st March, 2013.
The capital adequacy ratio under Basel II stood at 11.52% as on March
31st, 2014 as compared to 11.70% as on March 31st, 2013 against a
minimum of 9% stipulated by RBI. The Capital Adequacy Ratio under Basel
III improved from 10.74% as on 1st April, 2013 to 10.79% as on 31 st
March, 2014.
Bank''s aggregate deposits showed a growth of 5.54 % and stood at
Rs.88,707 crore as on 31st March, 2014 compared to Rs.84,047 crore in the
previous year. The share of Personal Segment Deposits was Rs.62,246.92
crore which constituted 70.17% of Aggregate Deposit. In absolute terms,
Personal Segment Deposits has grown by Rs.9,656 crore Y-o-Y.
Total Deposits of the Bank (including Inter Bank Deposits) stood at
Rs.89,337 crore as on 31 st March, 2014 from the level of Rs.84,624 crore
as on 31 st March, 2013.
The Gross Advances of the Bank stood at Rs.70,782 crore as at the end of
31 st March, 2014 as against Rs.68,389 crore a year ago, registering a
growth of 3.50%. The subdued growth Is mainly due to sluggish credit
off take coupled with macroeconomic condition. Further, focus was
shifted from large corporate to retail lending. Personal segment
advances grew by Rs.374 crore and reached a level of Rs.18,294 crore,
whereas the C&l segment declined byRs.311 crore and reached a level
ofRs.34,901 crore.
Retail lending atRs.3S381 crore constituted 50.69% of the Gross Advance
as at the end of 31 st March, 2014.
The Credit Deposit Ratio of the Bank as on 31st March, 2014 was 7923%
as against 79.75% a year ago.
The Bank''s gross business crossed Rupees One Lakh Sixty Thousand crore
during FY 13 - 14. The total business of the Bank reached a level of Rs.
1,60,119 crore as on 31st March, 2014, from Rs.1,52,108 crore as on 31 st
March, 2013. showing a growth of 5.27%.
The Bank continued to give special emphasis on lending to the priority
sector in conformity with national policies, expectations and
fulfillment of social objectives. Bank''s Gross Advances to the Priority
sector increased from Rs.24378 crore as at the end on March 2013 to
Rs.29,179 crore as at the end of March 2014 and constituted 42.26% of the
Adjusted Net Bank Credit against the benchmark of 40%.
The Bank disbursed an amount of Rs.10,4Q8 crore under Agriculture segment
as at the end of March 2014 against the Special Agricultural Credit
Plan target of T7.20O crore. Agriculture segment showed a growth ofRs.
1,137 crore during the financial year 2013-14. Exposure to Agriculture
segment reached a level of Rs.13,212 crore as on 31st March, 2014, which
is 19.13% of ANBC, against a benchmark of 18%.
MSMEs play a major role in the country''s economic development. The Bank
gives due Importance for the growth of this vital segment of the
economy. Total lending to MSME sector as on 31st March, 2014 stood at
11,460.54 crore, registering a growth ofRs.2,230.31 crore over the
previous year. The lending to Micro and Small Enterprises (MSEs) stood
at Rs.7,774.10 crore which is 37.37% higher over the previous year level.
The Gross NPA level of the Bank as on 31st March, 2014 stood at Rs.3,077
crore and its percentage to Gross Advances stood at 4.35% compared to
2.56% as on 31.03.2013.The Net NPA level of the Bank as on 31st March,
2014 stood at 71,929 crore. The percentage of Net NPA was 2.78% in FY
13 -14 compared to 1.46% as at the end of the previous year.
Branch Network
The Bank opened 104 new branches during the year. As at the end of 31st
March, 2014 the total number of branches touched 1117, and now is
represented in 15 States and 3 Union Territories. It has 13 Extension
Counters.
The number of branches in Kerala increased from 758 in March, 2013 to
820 as at the end of 31st March, 2014. A new Zonal office at Bengaluru
was opened during the year. Seven Regional offices were opened at
Thiruvalla, Kottarakara, Madurai, Thodupuzha, Hyderabad, Pala &
Malappuram during the year for better operational control and faster
credit dispensation.
Dividend
The Bank declared a dividend of 72.50 per share (25%) for the year to
the shareholders, entailing a total pay-out of 712.50 crore. The
dividend Pay-out Ratio for the year 2013-14 works out to 4.11% of the
Net Profit.
Market Share
The Bank''s market share in ASCB Deposits was 1.16% as on 21 st March,
2014 as compared to 1.22% as on 22nd March, 2013. The market share in
Advances has come down from 1.25% as on 22nd March, 2013 to 1,16% as on
21st March, 2014. The Bank''s All India Market share in total business
as on 21st March, 2014stoodat1.16%. (Source: RBI)
The Bank continued to maintain its position as the premier Bank in
Kerala with a market share of 21.32% in business among all Commercial
Banks (as at the end of December 2013) with a 14.06% of the total
branch network. In respect of NRI deposits, our market share in the
State is 24.24%. (Source SLBC, KERALA)
Business Initiatives
The Bank opened 3 specialised MSME Branches at Kollam, Kozhikode and
Palakkad during the financial year 13 - 14, taking the total number of
specialized MSME branches to 8 (eight).
In order to provide personalized service to the NRI Customers, Bank has
opened NRI specialized Branches at Mumbai, Kottayam and Kollam during
the current year taking the total of such branches to eleven. Two more
Relationship Managers have been deputed to the gulf countries during
the year to strengthen Bank''s International presence taking the total
number of Relationship Managers posted abroad to Nine.
Rupee drawing arrangements were established with five more Exchange
Houses in the Gulf countries during the year, taking the total number
of such arrangements to 43.
Another major initiative during FY 13 -14 was the arrangement for a
fully automated payment of salary and pension for 80,000 KSRTC
employees.
In order to provide one-stop service to customers, the Bank introduced
a 3-in-1 account for securities transactions. In this regard Tie-up
arrangement with SBICAP Securities Ltd, (SSL) was put in place to
enable the customers for opening of Demat and Trading accounts.
With the objective of improving the market share in Corporate segment
and enhancing the business mix to global standards, Bank established a
separate network called "Commercial Business Network°(CBNW). The core
idea behind the formation of CBNW is to cater to the banking needs of
Mid Corporate, emerging Business Groups and large SMEs which
contribute to the Bank''s asset portfolio. Now, CBNW has in its fold, 13
branches across the country and it is proposed to add more branches
during 2014-15.
Development Banking
The Marketing Department of the Bank continues to play its role in
facilitating customer acquisition, retention and broadening of the
Bank''s customer base by conducting segment centric marketing drives.
Financial Inclusion is delivery of banking services at an affordable
cost to the vast sections of the disadvantaged and low-income groups.
The Bank opened over 25.56 Lac No-frills accounts (Janapriya accounts).
90% of these accounts were opened in the State of Kerala. Joint
Liability Group (JLG) schemes, Biometric Smart Card Project, General
Credit Cards to the Janapriya Account Holders are other initiatives in
this direction,
The Bank has formulated a Financial Inclusion Plan, which has been
rolled out during 2013-14 and ail Fl villages allotted to the Bank have
been covered in the State of Kerala. This plan for Financial Inclusion
will bean integral part of the business plan of the Bank.
The Bank continues to give due importance in extending financial
assistance to meet the credit requirements of the Scheduled Caste
(SC)/Scheduled Tribe (ST) customers. A credit Cell is functioning at
Head Office under the control of Deputy General Manager (MSME) for
monitoring flow of credit to SC/ ST. Advances to SC and ST borrowers
under priority sector, aggregated to Rs.4,038 crore constituting 13.84%
of priority sector lending.
The Bank continues to give due importance in extending financial
assistance to meet the credit requirements of the Minority Communities,
Advances to Minority Communities stood at X9.692 crore as on 31.03.14,
as against Rs.8,536 crore as on 31.03.2013, constituting 3321% of the
Bank''s priority sector lending.
The Bank actively encouraged lending to women entrepreneurs. Total
lending to women entrepreneurs stood at Rs.8,625.32 crore covering
7,69351 borrowers. The exposure constitutes 12.49% of ANBC.
As a member of the Aadhaar Payments Bridge System (APBS) and National
Automated Clearing House (NACH) of the National Payments Corporation of
India (NPC), Bank started processing of files received from NPCI. Bank
a so processed files received through CPSMS (Central Plan Scheme
Monitoring System) of the Controller General of Accounts. Both these
channels are meant for payment of Government Direct Benefits Transfer
(DBT) to the beneficiaries.
As on 31/03/2014 Bank has processed 35,13,357 records un- der NACH
amounting Rs.217,39,86,410/- and 1,04336 records amounting to
Rs.22,67,04,863/- under CPSMS. From July 2013, Bank started processing
ECS files from NPCI also.
Technology Initiatives
The Bank has a network of 1352 ATMs. The Bank''s ATM cum Debit cards are
accepted in all outlets having Master Card / Visa logo. Several
facilities such as Visa Money Transfer (VMT), Money Send, SBI Credit
Card payment, SBI Life Premium payment, Mobile recharge, Donations, Fee
payment, JMET / GATE Application Fee payment. Mobile Banking
registration, Cheque Book order have also been enabled in the ATMs.
The Bank''s highly secure Internet Banking platform supported by
encryption offers utmost security to Internet Banking customers against
phishing / hacking threats and provides Intra-Bank / Inter-Bank funds
transfer facility up to a limit of Rs.500 crore per transaction. 1,55,527
new registrations were activated during the FY 13 - 14, showing a
growth of 27.71% over previous year.
Mobile Banking provides customers with another safe, secure, fast and
convenient channel for banking transactions. The services provided
includes enquiry services, fund transfer, Interbank Mobile Payment
System (IMPS), Demat account services, bill payment, mobile top-up, DTH
recharge,
M-commerce etc. The daily limit for Mobile Banking services (MBS)
transaction is Rs.50,000/- for aggregate of funds transfer & transactions
involving purchase of goods & services, within an overall calendar
month limit of Rs.2,50,000/-. A more advanced fund transfer channel, P2A,
was added to the existing IMPS payment services enhancing the ease and
convenience of the Mobile Banking facility. The new channel provides 24
x 7 instant-payment facility to any IMPS member Bank.
All the branches of the Bank are enabled for RTGS/GRPT/ NEFT
remittances. The total number of outward electronic remittances for the
year ended 31.03.2014 was 63,74,055 registering an increase of 32% over
the previous year. While growth in number of RTGS transactions had
remained at the same level of 14% recorded in the previous year, number
of GRPT outward transactions increased by 50% in the current year. NEFT
transactions registered an increase of 50% over the last year level.
RTGS application was moved over to an upgraded versions complying with
ISO 20022 messaging protocol with effect from October 2013. In order to
improve customer service, one more settlement batch was started for
NEFT transactions at 8.00 AM during the year.
Customer Service
Customer service in the Bank is accorded top priority and every
endeavour is made to improve the quality of service to the customers
and redress their grievances.
A well defined and full-fledged Customer Grievances Redressal Mechanism
is put in place in the Bank. An official of the rank of Deputy General
Manager is placed as head of the Customer Service Department to give
greater focus on redressal of complaints.
Bank has provided a facility (SMS SBT CARE) to the customers whereby
they can send a message from anywhere by SMS to 56363 or give a missed
call to 9847198471 from their mobile, The customer is contacted by the
officials of the Bank and the complaints are taken up for redressal on
priority.
Bank has also established a call centre with toll free number: 1800 425
5566 which enables the customers and general public to seek
clarification on Bank''s products and service.
Corporate Social Responsibility (CSR)
Bank, under Corporate Social Responsibility initiatives has extended a
wide range of social activities both in rural and urban areas to serve
the community at large. The major CSR initiatives under taken by the
Bank during the year areas under:
Medical equipment like BP apparatus, glucometer kit to Life Style
Disease Clinic managed by Malabar Cancer Society, Kannur -YuvaVimukthi
Project.
Donation of ceiling fans and water purifiers to needy schools all over
India.
Installation of solar lighting panels at school building, provision of
books, stationery items, bags and laboratory equipments to the students
at Shanti Bhavan Educational Trust-Residential School, Hosur.
Donation of Ambulance to Deena Daya Seva Trust, Thodupuzha.
Reimbursed the full treatment and food expenses of identified deserving
patients at Regional Cancer Centre Thiruvananthapuram, for one day.
Donation of EEG machine to Vivekananda Medical Mission Hospital,
Attapady.
Provision of mid-day meal to 12,000 students in 52 institutions in
Central Kerala.
Reimbursed full expenses of poor cancer patients for two days at
Malabar Cancer Centre, Thalassery.
Internal Control Systems & Supervision
The Integrated Risk Management facilitates the Bank to have a holistic
view of the risk management. Modular structure under Integrated Risk
Management has various divisions focused on management of a specific
risk - Asset Liability, Market Risk, Credit Risk, Operational Risk, and
Information Systems Security. The risk management architecture of the
Bank consists of the Board of Directors at the top having overall
responsibility to implement Risk Management Systems in the Bank.
Asset Liability Management (ALM) system has been implemented in the
Bank, since April 1, 1999, as per the Reserve Bank of India guidelines
on ALM and Liquidity Risk Management As per the Bank''s ALM Policy, the
Asset Liability Management Committee (ALCO) is authorised to evolve
appropriate systems and procedures for ongoing identification and
analysis of liquidity and market risks and to prescribe parameters for
efficient management of these risks. The ALCO headed by Managing
Director meets regularly to review and monitor the same.
Market Risk is largely managed through adherence to various policies,
in the conduct of the investment and trading activities along with
adherence to various risk limits like position limits, stop loss
limits, Value at Risk (VaR), Management Action
Trigger (MAT) and Cut Loss Triggers (CLT) etc through constant
monitoring of the risk positions. The policies are reviewed
periodically keeping in view regulatory changes, business requirements
and market developments.
For Credit Risk management, the Bank has a structured and standardised
credit approval process which includes comprehensive credit rating of
proposals. For retail loans, Bank uses a risk scoring model. Bank has
in place various exposure limits - for single borrower, group of
borrowers, specific sectors, industries - as per regulatory requirement
and as per its internal policies. Bank takes up regular reviews of its
various loan portfolios to assess the risk profile and initiates
proactive measures.
The Bank is estimating capital charges for Operational Risk under Basic
Indicator Approach. Other risk prone operational areas of the Bank''s
business are monitored and proactive actions for improvement are
initiated in consultation with other departments like Inspection,
Systems & Procedure, Frauds Prevention, and Monitoring & Recovery etc.
Apart from the above, Bank has put in place an effective institutional
mechanism for Risk Based Supervision (RBS) through RBS Cell in the
Inspection Department. As envisaged by the Regulator, the Bank
introduced Risk Focused Internal Audit (RFIA) under RBS with effect
from 1st April, 2003. Based on the guidelines on Internal Audit issued
by Government of India, Bank''s Inspection & Audit Policy has been
suitably modified. The Bank has also incorporated the RBI guidelines on
Information System Audit in the IS Audit Policy.
Preventive Vigilance
Due to initiation of Preventive Vigilance mechanism through various
measures, such as Surprise Inspections, Branch visits, circulars,
vigilance awareness meetings etc, Bank could inculcate a sense of
positive approach towards compliances from vigilance angle among all
the functionaries including adherence to systems and procedures.
Leveraging technology in vigilance administration has been given
priority. The technology initiatives introduced during the year
includes E-WR checking, E-tendering software solutions and Biometric
access to CBS.
A programme on positive vigilance in Contracts and Procurements was
conducted in May 2013 for the benefit of officers handling various
contracts and procurements in the Bank. At the request of CBI a
training programme for inspecting officials of the CBI was conducted by
the Department at Thiruvananthapuram from 2/09/2013 to 6/09/2013.
"A Whistle Blow of Policy" was introduced by the anti corruption
initiative and also to detect and prevent unfair practices wherever
reported. The complaints received under the policy were studied and
investigations were conducted. The details of Whistle Blower are kept
confidential.
Human Resources
As on 31-03-2014, the Bank had on its rolls 14,491 members of staff,
comprising 5,094 officers, 7,005 clerical and cash department staff and
2,392 subordinate staff inclusive of 643 Maintenance Staff. The number
of women employees and ex-service personnel constituted 5,864 and 1,665
respectively of the total work force. Out of the women employees, 1,557
are officers, 3,521 are non-subordinate staff and 786 are subordinate
staff. The Bank has also on its rolls 231 persons with disability.
During the year, 2,761 staff were recruited (116 in the officers'' cad
re, 2,210 in Non - subordinate and 435 in the subordinate cadre).
Business per employee stood at Rs.1156 crore as at the end of March 2014
as against Rs.12.59 crore for the same period a year ago. Net Profit per
employee is Rs.2.20 lac as on March 2014 compared to Rs.5.06 lac for the
year ended March 2013.
Bank has formulated a scheme to recognize and motivate high achievers
amongst branches by awarding the honor of MD''s Club, CGM''s Club and
GM''s Club membership to top performing branches.
Changes in the Board of Directors
During the course of the financial year 2013-14, the following changes
have occurred in the Board of Directors of the Bank,
1. Shri P Nanda Kumaran, Managing Director State Bank of Travancore,
upon superannuation on 31st May, 2013 tendered his resignation from the
Board of Directors.
2. Shri S Vishvanathan, Managing Director & Group Executive (A&S)
appointed as Director under clause (c) of sub-section (1) of Section 25
of the State Bank of India (Subsidiary Banks) Act, 1959 with effect
from 17th July, 2013.
3. The tenure of Shri K Muraleedharan Pillai, Director ended on 18th
July, 2013.
4. Shri P V Prasad, Special Assistant, State Bank of Travancore, NRI
Thiruvalla Branch, appointed as Workmen Employee Director under
Clause (ca) of sub-section (1) of Section 25 of the State Bank of India
(Subsidiary Banks) Act 1959 with effect from 19th July, 2013 in place
of Shri K Muraleedharan Pillai, Director.
5. Shri Pratip Chaudhuri, Chairman State Bank of India, under Clause
(a) of sub-section (1) of Section 25 of the State Bank of India
(Subsidiary Banks) Act 1959 upon superannuation on 30th September, 2013
tendered his resignation from the Board of Directors.
6. Shri C Rajkumar, Chief Manager State Bank of Travancore was
reappointed as Director under Clause (cb) of sub-section (1) of Section
25 of the State Bank of India (Subsidiary Banks) Act 1959 with effect
from 1st October, 2013.
7. Smt Arundhati Bhattacharya became a Director and Chairman of the
Board of Directors of the Bank under Clause (a) of sub-section (1) of
Section 25 of the State Bank of India (Subsidiary Banks) Act 1959 with
effect from 7th October, 2013.
8. Shri V Kaliappan, became a Director under Clause(c)of sub-section
(1) of Section 25 of the State Bank of India (Subsidiary Banks) Act
1959, from 11th November, 2013.
9. Shri Pradip Kumar Sanyal, General Manager (A&S), State Bank of
India, Director under Clause (c) of sub-section (1) of Section 25 of
the State Bank of India (Subsidiary Banks) Act 1959 tendered his
resignation from the Board of Directors of the Bank with effect from
20th November, 2013
10. Shri Purna Chandra Jena, General Manager (A&S), State Bank of
India was appointed as Director under Clause (c) of sub-section (1) of
Section 25 of the State Bank of India (Subsidiary Banks) Act 1959 with
effect from 26th November, 2013 in place of Shri Pradip Kumar Sanyal.
11. Shri Jeevandas Narayan, appointed as Managing Director from 10th
January, 2014, became a Director on the Board of Directors in terms of
section 25(1) (aa) of the State Bank of India (Subsidiary Banks) Act
1959.
12. The tenure of Shri C N Venugopalan, Director ended on 10th
January, 2014.
13. The tenure of ShriT Balakrishnan and Shri KT Rajagopalan,
Directors ended on 31st January, 2014.
The Board of Directors welcomed Smt Arundhati Bhattacharya, Shri S
vishvanathan, Shri Jeevandas Narayan, Shri P V Prasad, Shri C Rajkumar,
Shri V Kaliappan, Shri Purna Chandra Jena as Directors of the Bank.
The Board of Directors placed on record their appreciation and thanks
for the valuable services rendered by Shri Pratip Chaudhuri, Shri P
Nanda Kumaran, Shri Pradip Kumar Sanyal, Shri K Muraleedharan Pillai,
Shri T Balakrishnan, Shri K T Rajagopalan and Shri C N Venugopalan
during their tenure as Directors of the Bank.
Statutory Audit
M/s, Abraham &Jose, Thrissur, M/s, G,K Rao & Co,, Hyderabad, M/s R.G.N,
Price & Co, Chennai, and M/s Kumar vljay Gupta & Co. New Delhi were
appointed as Statutory Auditors of the Bank for the year 2013-14 by
State Bank of India, with the approval of Reserve Bank of India. The
Board of Directors sincerely appreciates the valuable suggestions
offered and the excellent support and cooperation extended by the
Statutory Central Auditors for the completion of the audit well in
time,
Acknowledgments
The Board of Directors gratefully acknowledge the valuable advice and
support extended by the Ministry of Finance,
Government of India, Reserve Bank of India, Indian Bank''s Association,
State Bank of India and the cooperation and support extended
By the Securities and Exchange Board of India, Financial Institutions,
Stock Exchanges and Correspondents.
The Board also wishes to place on record its sincere appreciation for
the excellent support, goodwill and patronage received from the
esteemed customers and shareholders, the support and cooperation
extended and contributions made by the members of staff - award and
supervising. The Board also places on record its appreciation for the
contributions made by the Employees'' Union and Officers'' Association.
By Order of the Board,
Jeevandas Narayan
Managing Director
Mar 31, 2012
1. The Bank's Operations and Performance
1.1 Total Business
The gross business of the Bank crossed the milestone of Rupees One Lakh
Twenty Five Thousand crore. The total business of the Bank stood at
Rs.1,26,816 crore as on 31st March 2012, registering a growth of 21.70%
from the level of Rs. 1,04,202 crore as on 31st March 2011.
1.2 Working Results and Operating Profit
Operating profit (after staff provisions) of the Bank for
2011-12 went up by 6.19 % to Rs. 1248.80 crore from Rs. 1,175.97 crore
for the previous year. Net Profit for the year stood at Rs.510.46 crore
as compared to Rs. 727.73 crore in 2010-11. The Earnings per share (of
Rs.10 face value) stood at Rs.102.09 compared to Rs.145.55 at the end of
the previous year.
The Net Interest Income increased by 7.92 % from Rs.1,696.03 crore in
FY 10-11 to Rs. 1830.37 crore in FY 11-12. Net Interest Margin stood at
2.66%.
1.3 Dividend
The Bank declared a dividend of Rs.18 per share (180%) for the year to
the shareholders, entailing a total pay out of Rs. 90 crore Of this, an
interim dividend of Rs.16 per share (160%) was paid out in April 2012.
The Dividend Pay-out Ratio works out to 17.73 % of the Net Profit.
1.4 Capital Augmentation & Capital Adequacy
The Bank's capital funds improved from Rs. 4,881.08 crore as at the end
of March 2011 to Rs. 5,867.09 crore as at the end of March 2012. The
capital adequacy Ratio under Basel II stood at 13.55% in March 12 as
compared to 12.54% in March 11 against a minimum of 9% stipulated by
RBI. The Tier-I CRAR on this date is 9.35% as against 9.00% as at the
end of the previous year. The Bank's Board of Directors had approved a
Rights Issue of shares to the shareholders for an amount of Rs.500
crore. The approvals from the RBI and State Bank of India for the issue
have been received. The capital augmentation will serve to improve the
Capital adequacy ratio of the Bank in 2012-13.
1.5 Deposits
Aggregate Deposits of the Bank registered a growth of 23%, reaching the
level of Rs.70,965 crore as on 31st March 2012 as against Rs. 57,599
crore as on 31st March 2011. Personal Deposits, which contribute the
bulk of the resources, grew by Rs.9,281 crore to reach Rs.45,378 crore.
NRI Deposits recorded improved performance compared to the previous
year, grew by Rs 3,747 crore, surpassed the annual budgeted growth and
stood at Rs.15,309 crore as on 31st March 2012. NRI Deposits
constituted 22 % of the Aggregate Deposits of the Bank as on 31st March
2012. Total Deposits of the Bank [including Inter Bank Deposits] moved
up to Rs. 71,470 crore as on 31st March 2012 from Rs. 58,158 crore as
on 31st March 2011.
1.6 Advances
Advances of the Bank registered a growth of 20.20% during the year and
reached a level of Rs. 55,346 crore as on 31st March 2012 as against
Rs. 46,044 crore as on 31st March 2011. The main contributions came
from the C&I segment [growth of Rs.6,266 crore] and Agriculture segment
[growth of Rs.3,322 crore]. The Bank's Retail lending stood at
Rs.26,353 crore and constituted 47% of Gross Advances as at the end of
March 2012. The Credit Deposit Ratio of the Bank stood at 77.44% as on
31st March 2012 as against 79.17% as on 31st March 2011.
1.7 Market Share
Bank's All India market share in Deposits has improved from 1. 10% on
25 th March 2011 to 1.16% on 3 0th March 2012. The market share in
Advances has improved from 1.16% to 1.18% during the same period.
However, the market share in Advance would be 1.22% when including the
Rs.2,000 crore of Inter Bank Participation Certificate (IBPC) issued by
the Bank during the year. The Bank continued to maintain its position
as the premier bank in Kerala with a market share in business of 23.78%
as at September 2011 [the latest date up to which data has been
released by RBI] with 16.11% of the total branch network in the state.
1.8 Priority Sector Lending
The Bank continued to give special emphasis on lending to the Priority
Sector in conformity with the national policies, expectations and
fulfillment of social objectives. Bank's gross Advances to the Priority
Sector increased from Rs. 17,353 crore as at the end of March 2011 to
Rs.20,287 crore as at the end of March 2012, and constituted 43.64% of
the Adjusted Net Bank Credit against the benchmark of 40%.
1.9 Agricultural and Rural Finance &
Self Help Groups
The Bank's performance under Agriculture segment is remarkable during
the year under review. Bank was able to achieve the bench mark of 18%,
stipulated. Bank has disbursed an amount of Rs. 9,639 crore under
agriculture segment as at the end of March 2012 against the Special
Agricultural Credit Plan target of Rs. 5,000 crore. The level of
lending to agriculture sector stood at Rs.8,902 crore as on 31st March
2012. Agric segment showed a positive growth of Rs. 3,322 crore as at
the end of the financial year 2011-12, compared to a growth of Rs.2,280
crore during the same period last year. The share of Agricultural
Advances to Adjusted Net Bank Credit [ANBC] improved to 19.15 % from
14.17% as at the end of previous year.
During the current fiscal 16,197 Kisan Credit Cards (Working capital
facility to farmers) and 2,950 Kisan Gold Cards (Investment credit to
farmers) were issued with an outlay of funds of Rs.192 crore and Rs.127
crore respectively. A campaign was conducted from 1st September 2011 up
to 15th January 2012 for coverage of all eligible farmers under Kisan
Credit Card.
The Bank had conducted an intensive agriculture lending campaign called
"SBT- Haritotsavam-2011" during the period 20th June to 20th
October 2011 with a lending target of Rs.2,000 crore to cover 2,50,000
farmers.
The amount disbursed during the period was Rs.2,780 crore benefiting
3,29,000 farmers. 12 episodes of 'SBT Vayalum Veedum' - (Farm and Home)
- was broadcasted through All India Radio as publicity to the campaign.
The program me, wholeheartedly received by the general public, was
intended to give awareness on Bank's various agricultural schemes and
the procedures for availing them.
Bank has sponsored 222 Farmers Club, including the three new Clubs
formed during the year. At the Farmers' Club meetings, issues faced by
the farmers were brought to the notice of the Bank and other Agencies
working in the field and necessary solutions suggested. Farmers' Meets
with Agricultural Seminars, 'Karshaka Mela' etc. were conducted at
various centers to give wide publicity of schemes available to farmers.
A special brochure on agricultural schemes in local languages was
printed and supplied to the branches for the benefit of farmers.
Advertisements were given in leading newspapers and magazines
highlighting our various schemes. Farmers' Day was observed and
celebrated throughout the branches in Kerala on 17th August 2011 (1st
day of 'Chingam'), associated with Krishi Bhavans, Animal Husbandry
Department etc. Best farmers were felicitated and agricultural loans
distributed at the function."Onattukara Sangamam" with agricultural
exhibition and seminars were organized by the branches in and around
Mavelikara area (previously known as 'Onattukara').
Schemes for food processing and agro based industries (with investment
in plant and machinery upto Rs.10 crore) was introduced at special
reduced rate of interest, covering a wide variety of activities like
manufacturing and processing of food products including rice mills,
cotton mills etc. Centrally sponsored subsidy linked scheme for rearing
sheep, goats and rabbits were also introduced. Schemes for Dairy
Entrepreneurship Development and poultry farming with NABARD subsidy
were marketed vigorously.
Micro Credit / Self Help Groups: Bank continued to be active in
assisting Self Help Groups (SHGs) and financing them through Micro
Financing Institutions (MFIs) and Non-Government Organizations (NGOs).
88,273 SHGs were assisted up to March 2012 with a financial outlay of
Rs. 738 crore. The Bank disbursed loans aggregating to Rs. 82 crore to
3,486 SHGs during the year.
1.10 Lending to Micro, Small and Medium Enterprises (MSMEs)
MSMEs play a major role in the country's economic development. The Bank
gives due importance for the growth of this vital segment of the
economy.
The total lending to MSME sector recorded a growth of 6.59% over
previous year to touch Rs.9,047 crore. The lending to Micro & Small
Enterprises [MSEs] stood at Rs.5,476 crore which is 8.19% higher over
the previous year level.
The growth in this sector was fuelled by an intensive MSME lending
campaign conducted from 1st September 2011 to 31st March 2012. Against
a target of Rs.750 crore under MSME segment the total loan disbursement
during the campaign period was Rs. 727.86 crore covering 5,873
Accounts.
Road Transport Operators (RTO) is an important sub segment under
service enterprise. The relaxation in security norms and reduction in
interest rate have contributed steady growth under this vital segment.
Outstanding under RTO segment as on March 2012 is Rs. 464 crore
comprising 7847 accounts.
The Bank is a Member Lending Institution of CGTMSE which provides
guarantee cover to collateral free loans. A book on CGTMSE Scheme was
published for the benefit of the operating officials. Awareness
programmers'/ workshops / seminars on the scheme were conducted in all
Regional Offices of the Bank and other important centers for operating
staff. Meetings of entrepreneurs were also conducted to educate them
about the scheme. 12,891 loan accounts amounting to Rs. 420.09 crore
have been extended under the scheme.
1.11 Commercial & Institutional Finance
The Bank performed well under the segment by tapping the potential in
the market and C&I advance of the Bank reached Rs. 29,682 crore as on
31st March 2012 with a growth of 26.76% over March 2011. This segment
contributes more than 52.97 % of Bank's total advances, which comprises
financing Trade and Services, Industry, Infrastructure, financing
corporate customers and other institutions.
Commercial Net-Work (CNW) Branch System was introduced in the Bank for
giving focused attention to select branches to achieve substantial
growth in large value advances. Commercial branches at Bangalore,
Chennai, Ernakulum and New Delhi and Corporate Finance Branch Mumbai
were brought under the system. The 5 CNW branches put together have a
business level of Rs.17,000 crore. CNW branches' Credit portfolio is
Rs.14,870 crore which is about 25% of the Bank's total advances. They
also handle Non Fund Based advances of Rs.2,528 crore.
With the objective of improving the market share in the Corporate
segment and enhancing business mix to global standards, Bank has
established a separate module called "Commercial Business Group"
(CBG), in line with the Commercial Net-Work branches. The CBG concept
came into existence with effect from 01st November 2011.
The core idea behind the formation of CBG module is to cater to the
banking needs of Corporate customers, Emerging Business Groups and Mid
Corporate and also large SME/SSI & Agri clients which will contribute
for the bank's asset size to a great extent. To begin with, 11
potential branches across the country were brought under the CBG
module: Kolkata Main Branch, R.K.Puram Branch-New Delhi, Indore
Branch, Nagpur Main Branch, Ahmadabad Branch, Bangalore City Branch,
Hyderabad Branch, Secunderabad Branch, Mount Road Branch-Chennai,
Tirupur Branch and Coimbatore Main Branch. More branches will be
brought under the CBG module.
At present, CBG branches contribute about 7% of the banks business as a
whole and have much more potential to contribute further with the new
concept under the specialized network. The CBG network is expected to
achieve the desired objectives in the coming years and will become a
flag-ship segment of the Bank in future.
Bank has a Project Finance Unit (PFU) at Head Office. The PFU was
formed in the Bank to develop project appraisal skills in-house and to
avoid good business proposals go past the Bank for want of Techno
Economic Viability (TEV) study. PFU undertake technical and financial
appraisal of small and medium sized projects, which have not been
vetted by agencies of national/ international repute. The Technical
Consultancy Cell (TCC) attached to the Micro Small and Medium
Enterprises Business Department at Bank's Head Office also got merged
with the PFU. Apart from conducting viability studies, PFU is exploring
the avenues for preparation of Information Memorandum and Debt
Syndication also to supplement Bank's income. PFU conducted TEV study
on 23 projects and earned an income of Rs.25 lakh as 'study charge'
during 2011-12.
1.12 Personal Finance
The Bank continued to be active in extending finance to Personal
Segment, mainly by way of Housing Loans, Car Loans and Education Loans.
The personal segment advances have gone up to Rs. 15,320 crore
(including IBPC of Rs. 2,000 crore) as at March 2012 from Rs. 14,345
crore (including IBPC of Rs.1,000 crore) as at the end of the previous
year, recording a growth of 6.80 %. As many as 14,652 Housing Loans
aggregating to Rs. 1,750 crore were extended during the year, taking
the outstanding Housing Loan level to Rs. 8,022 crore as on 31st March
2012. Similarly, 10,141 Car Loans aggregating to Rs. 392 crore were
extended during the same period, taking the outstanding car loan level
to Rs.1,271 crore.
As in the previous years, the Bank continued to support the growing
generation to pursue higher studies by extending Education Loans under
Gyan Jyothi Scheme. During the year under report, Bank sanctioned
11,836 Education Loans amounting to Rs. 342 crore. The total amount
outstanding under this head stood at Rs. 2,263 crore.
1.13 Treasury Operations
The Gross Investments of the Bank stood at Rs. 22,473 crore as on 31st
March 2012 as against Rs 17,956 crore as on 31st March 2011 and the
average investments during 2011-12 was Rs. 21,155 crore as against Rs.
18,188 crore during 2010-11.The revenue from investment operations
(interest and dividend) for the year was Rs. 1,379 crore as against Rs. 1,147.00 crore for the previous year. The average yield on investments was
at 7.06 % during the year as compared to 6.82 % during the year ended 31st March 2011. The Bank earned a profit of Rs. 134 crore from Treasury
Operations during the period under report.
1.14 International Banking
Bank's total Force turn-over during the year for merchant transactions
was Rs. 26,830 crore compared to Rs. 16,746 crore during the previous
year. Inter bank turnover was higher at Rs 8,89,498 crore as against Rs
4,34,520 crore during the previous year. The total profit from Forex
operations during the year was Rs. 42.49 crore as against Rs. 40.29
crore as on 31 st March 2011. The export finance extended by the Bank
stood at Rs.1,506 crore, which was 36.86 % higher over the level at the
end of the previous year. Bank is a member in MCX-SX (Multi Commodity
Exchange) for trading in Currency Futures and the total turnover in
Currency Futures trading was Rs. 458 crore. During the year Forex
Treasury of the Bank migrated to Core Banking platform and integrated
its accounting applications with the other accounting packages used at
the branches viz B@ncs24, Exim Bills and Finance-1. Bank implemented
OFAC (Office of Foreign Asset Control) filter for all the outbound
swift messages to United States and Nassau.
The Bank has drawing arrangements with 33 exchange houses in the Gulf
at present, of which five arrangements have been concluded during the
current financial year. 'Moneytrans E Remit', a state of the art,
technologically advanced Speed Remittance Product developed in-house
ensures speedy and safe remittance from the Gulf countries. 'Moneytrans
E Remit' has been extended to 32 of the 33 Exchange houses with which
the bank has drawing arrangements. Remittances through 'Moneytrans E
Remit' (including credits through NEFT) numbered 49.22 lakh aggregating
to Rs. 25,376 crore during 2011-12 as against 43.50 lakh and Rs 18,882
crore respectively during the previous year. The Bank continues to be
the leading Bank in Kerala both in terms of number and volume of
remittances. The Bank has launched the instant credit whereby
remittances made through 'Money Trans E-Remit' will be credited
instantaneously to the account of the beneficiaries with the Bank as
and when uploaded by the Exchange Companies. This product has been well
received by several exchange houses. Other products like Xpress Remit,
an online remittance facility from US and UK and Viswa Yatra Foreign
Travelers Card providing an alternative to carrying foreign currency
while travelling abroad continue to be much favored by the public in
general. To facilitate remittance in Foreign Currencies, Bank has
opened 21 Nostro accounts in 13 major currencies with correspondent
banks around the globe.
1.15 Cross Selling
The Bank has been constantly endeavoring to meet the requirements of
its customers by making available Life, Non life insurance products as
well as other non- banking investment products like Mutual Funds.
Bank's Cross Selling products include SBI Life Insurance Company's life
Insurance products, United India Insurance Company's Non Life (General
Insurance) products, SBIMF's Mutual Fund products and SBI Credit Cards
which are being made available to the customers through the branch
network. With auto debit facility in place, SIP mode of investment in
Mutual Funds is becoming popular amongst the Bank's customers. The Bank
also has tie up arrangements with UTI Mutual Fund, Sundaram Mutual
Fund, Franklin Templeton and Tata Mutual fund houses whose products are
available to customers through the branch network.
As against Rs.20.57 crore income earned during the year 2010-11, income
from the Cross Selling business during the current year is Rs.11.83
crore.
SBI Life Insurance with a share of over 69.40% continues to be the
major contributor to Cross Selling Income followed by General
Insurance, Mutual Fund and SBI Cards at around 22.23%, 8.20% and 0.17%
respectively.
Bank has a tie up with United India Insurance Company Limited for
marketing its Non life products through our branch network.
"Unisuraksha", a personal accidental Death and Total Permanent
Disability cover, "Unhealthy", a Health plan (Medicaid) for
resident account holders of the Bank and "NRI Care", a health cum
accident plan for NRI customers of the Bank are some of the major non
life products that are available for the customers of the Bank.
"Unisuraksha", the Personal Accidental Death and Total Permanent
Disability cover has gained wide acceptance. During the year more than
3 7 families, most of them being poor and needy have benefited from
these claims. Claims of Rs.5 lac in each of these cases were paid by
the Insurance Company. Bank's Health plan 'Unihealth' a co branded
product of the Bank and UIICO too is gaining popularity.
Among the Mutual fund products Systemic Investment Plans [SIPs], Fixed
Maturity Plans [FMPs], debt and equity funds of SBIMF launched from
time to time are also marketed through our branches. SBI Mutual Fund's
Gold Fund too is gaining acceptance amongst the investing public.
SBI credit cards are also being sold to the Bank's customers through
its branch network. Platinum Credit Cards for high value customers,
Secure Cards, SBI Gift Cards and Vishwa Yatra Cards for overseas
travelers are some of SBI Cards products being marketed by us. Auto
debit facility for SBI Credit Cards is expected to be in place soon and
this will give a boost to Credit Cards sourcing in the coming fiscal.
Bank as on date have 1054 Certified Insurance facilitators and over 848
AMFI qualified employees who form the Insurance and Mutual fund sales
force of the Organization. Plans have been drawn out to increase these
numbers substantially in 2012-13.
1.16 Sale of Gold Coins
The Bank has launched sale of gold coins through 35 select branches
during this year. The bank has entered into an arrangement with State
Bank of India for the procurement of Gold Coins in the denomination of
2,4,8,10,20,50 grms. The bank has sold 36 Kg of Gold coins during the
year under review.
1.17 Opening of Gold Point Branches
As a strategic initiative, the Bank planned to open exclusive Gold Loan
branches branded as "Gold Point" Branches in all the 14 District
Head Quarters in the State of Kerala and one at Nagercoil in the State
of Tamilnadu. The bank has opened 13 branches in Kerala and one in
Nagercoil during last year.
The Gold Point branches are opened to focus on Gold loans. The Unique
Selling Proposition (USP) of the branches is disbursal of the loans in
"10" minutes. The branches have disbursed Rs.47.21 crore during
last year. The Bank has planned to open Gold Kiosks in major branches
to boost our market share in the Gold Loan business.
1.18 Asset Quality
The Bank continued to give special focus to improve the quality of
Assets and containing NPAs. The Gross NPA level of the Bank as on 31st
March 2012 is Rs 1,488.75 crore and its percentage to Gross Advances
stood at 2.66 % compared to 1.80% of last year. The Net NPA level of
the Bank as on 31st March 2012 stood at Rs 853.57 crore. The percentage
of Net NPA is 1.54 % compared to 0.98% as at the end of the previous
year.
Asset Tracking Centre (ATC): Asset Tracking Centre is a new initiative
inaugurated by the Bank's Chairman on 28th May 2011 at Head Office for
follow up of irregular accounts by tele calling the borrowers. Based on
the good response, the same has been extended to all RASMECCCs, Zonal
Offices and Regional Offices. So far 62,792 accounts were tracked and
8,767 accounts were regularized with a recovery of Rs. 27.67 crore.
System based classification of assets: Bank has moved on to system
based identification and collation of Non Performing Assets.
Revival of viable sick industrial units through appropriate
rehabilitation packages is an important strategy of the Bank.
Rehabilitation/Restructuring packages are under implementation in
respect of 34 units with a total exposure of Rs.331.13 crore. Of which
12 units are under CDR scheme with an exposure of Rs.213.86 crore and
22 units under BIFR scheme with exposure of Rs.117.27 crore.
1.19 Government Business
The Bank maintains its status as the Principal Banker to Government of
Kerala with a market share of 70% of total Kerala State Government
transactions. The Bank conducts State Government Business at 118
branches in the State of Kerala and 2 branches in Tamil Nadu. Bank has
agreed to link 9 more Non-Banking Treasuries to our branches during the
year. Bank has closed 3 unviable currency chests and at present have
115 currency chest branches in Kerala, 1 in Karnataka and 8 in Tamil
Nadu. 196 branches of our Bank are authorized by CBDT for collection
of direct taxes (136 branches in Kerala and 60 branches outside Kerala)
and 148 branches are authorized by CBEC in Kerala for indirect taxes in
physical mode. All branches are authorized for e-payment of direct and
indirect taxes. The Bank has accounts of 341 Post Offices and the total
turnover during the Financial Year is Rs. 4,981 crore. Several Post
Offices are coming forward to open their accounts with the Bank as per
the Government Policy for linking of Post Offices with the banks.
The E-payment facility launched by the Government of Kerala through our
Bank for payment of Commercial Taxes is well received by the business
community and the Bank has clocked a Turnover of Rs.7,925 crore for the
year. E-payment for remittance of vehicle taxes and related fees has
been introduced by the Bank in co- ordination with the Commissioner of
Transport on a pilot basis in Kazhakuttom Sub-RTO and
Thiruvananthapuram RTO Offices. The Bank also successfully launched
online facility for remitting fees for various UPSC examinations.
The Bank has received Rs.64 crore of commission on account of
Government business during the year under review as compared to Rs.54
crore during the last financial year.
1.20 Electronic Payment Systems
Electronic Payments of the Bank is managed by the Payment and
Settlement Group which functions at Ballarpur, Navi Mumbai, in the same
premises where the PSGs of other Associate Banks are functioning. All
the branches of the Bank are enabled for RTGS/GRPT/NEFT remittances.
The total number of outward electronic remittances for the year ended
31st March 2012 was 30,95,326 registering an increase of 35.76% over
the previous year. While the number of RTGS outward transactions was
at the previous year level, NEFT and GRPT transactions showed
considerable improvement with corresponding reduction in the number of
Demand Drafts issued by branches. There is also a shift from the RTGS
to the Group Payment System (GRPT), in view of higher awareness at
branches. NEFT outward transactions for the year was 22,64,650
registering a growth of 46.38% over the previous year level. The
NEFT system moved over to a higher version of SFMS in Windows 2008
platform. RTGS system moved over to high security SHA2 regime during
the year. The Business Continuity Plan is in place for both RTGS and
NEFT. GRPT outward transactions for the year was 3,18,398 showing an
increase of 45.30% over the previous year. A new system of inter bank
payments under the name "Inter Bank Mobile Payment System" (IMPS)
was tested successfully during the current year and the same will be
implemented shortly. Being a very convenient mode of inter bank payment
available 24 x 7 through mobile, IMPS will gain popularity.
2. Marketing Initiatives and Development of New Products
2.1 As in the earlier years, the Bank continued its proven strategy of
customer acquisition and retention and broadening the customer base by
conducting massive marketing campaign. The following are the marketing
initiatives implemented during the year.
Kerala Govt. Employees' Salary Account: The efforts to route the salary
payment of State Government employees has became a reality with the new
Government issuing orders in this regard. More than 50% (2,51,000
accounts) of the employees have already opened salary account with the
Bank and many departments started disbursing salary through SBT.
Arrangements with remaining departments are in progress. Bank
introduced a power packed Salary Savings Bank product for the benefit
of State Govt employees.
Traffic e-challan system - collection arrangement with Police
Department: Kerala Police Department has introduced collection of petty
fine from traffic violators through bank accounts for the benefit of
public in Thiruvananthapuram on pilot basis. Bank entered into an
agreement with the Department for maintaining the collection account.
The arrangement facilitates the payment of traffic fines at all the
branches of State Bank of Travancore.
Skink Welfare Department: Arrangement has been finalized with Sainik
Welfare Department for disbursement of pension to war widows,
ex-servicemen and their dependents through the Bank accounts of State
Bank of Travancore.
E-Payment in PWD: Government of Kerala has decided to introduce
e-tender system for PWD works and e- payment system for payment to
contractors in PWD, as part of National e-governance initiative. The
Bank had tied up with PWD to arrange the e-payment to the contractors
through out Kerala.
2.2 Other Marketing Initiatives and New Products
The following new customer friendly products were added to the
impressive basket of the Bank's products and schemes during the year.
- SBT Gold Savings Scheme: For purchase of gold ornaments/coins from
jewellers having tie up with Bank.
- SBT Home Loan PAL (Pre Approved Limit): The loan limit is approved
in advance even before the finalization of property. Hence the loan
amount and quick sanction of the loan is assured to the client. The
client can also confidently negotiate with the seller/builder.
- SBT Green: Savings Bank account introduced for the commitment in
social cause in good spirit and for the cause of Green Banking.
- SBT Suraksha: Product exclusively launched for funding 100% of the
SBI Life premium to cover Home loan outstanding through a separate
account.
- SBT Swarna Saphallyam: For financing purchase of gold coins. Min:
Rs. 25000/- Max: Rs. 10 lacs. Margin: 20% of security value plus VAT.
Interest: 3% above Base rate.
- OD in Savings Bank Account: As part of our Financial Inclusion
initiatives, a new product has been introduced, extending the benefit
of Savings account with Overdraft facility upto Rs. 10,000/- for non
farmers, landless laborers in rural areas for meeting their
contingencies.
- SBT Defense Salary Account: The product is exclusively designed for
Defence Service Personnel and has four variants viz., Silver, Gold,
Diamond and Platinum, suiting to the personnel in different ranks in
Defence Service.
- SBT Construction Equipment Loan: Finance for purchase of
construction equipments like Cranes, Tippers, Excavators, Proclaimers,
JCBs, Concrete Batch Mixing etc.
- RTO Loans - Tie up arrangement with Tata Motors: To improve
business under RTO segment, a tie up arrangement was made with Tata
Motors Ltd. for financing purchasers of their commercial vehicles.
- SBT Solar Special: Scheme for financing off-grid and decentralized
solar home lighting system and water heating system under Jawaharlal
Nehru National Solar Mission (JNNSM).
- SBT Jewellery Nirman Special: New scheme for financing jewellery
manufactures in Thrissur District.
- Weavers Credit Card: Scheme to provide Term Loan and Working
Capital to weavers in the handloom sector through issue of weavers
credit card.
- SBT Hotel Special: A new scheme for financing Hotels, Restaurants,
Fast Food Chains, Pizza Centers, Caterers etc.
- SBT Auto BIZ: A new current account with Quarterly Average Balance
(QAB) of Rs.25,000 formulated to keep the cost of deposits low and to
enhance the share of Current Accounts in the total deposits.
- Shakthi Plus: A new modified version of 'Shakthi' current account
with pre-uploaded fee collection functionality, which is most suitable
for Universities, Colleges, State Electricity Boards, Corporations,
Chit funds, etc.
- Flexi ax: A new term deposit product for 15 days to 180 days for
Rs.15 lac and above in lieu of the high cost CDs.
3. Customer service
3.1 Customer service in the Bank is accorded top priority and every
Endeavour is made to improve the quality of service to the customers
and redress their grievances. All efforts are made to improve the
customer satisfaction by offering suitable products.
3.2 A well defined and full-fledged customer grievances redressed
mechanism is put in place in the Bank. Reports on the number of
complaints received / disposed / pending in the Bank as a whole are
submitted to the Bank's Board and the Apex Level Customer Service
Committee at Head Office. The Standing Committee on Customer Service
constituted pursuant to Tara pore Committee recommendations also reviews
the quality of customer service extended in the Bank at regular
intervals.
3.3 An official of the rank of Assistant General Manager is placed as
head of the Customer Service Department to give greater focus on
complaints received from Customers and speedy redressed of the
complaints. The Department acts as a coordinator between the branch and
the complainant and ensures quick disposal of complaints.
3.4 As a proactive measure, apart from acknowledging each complaint
immediately on receipt, senior officials at Customer Service Department
Endeavour to call the complainant personally wherever contact numbers
are available. Many of the complaints get resolved on the same day
itself. The average time taken for disposal of complaints at Head
Office/Zonal Office level has been reduced substantially. This has
created a very positive effect with our customers and various letters
of appreciation are received.
3.5 Bank has provided a facility (SMS SBT CARE) to the customers
whereby they can send their grievances from anywhere by SMS to
9847198471 and to 56363 from their mobile. The customer is contacted by
the officials of the Bank and the complaints are taken up for redressed
on priority.
3.6 Bank has also established a Call Centre with Toll Free No:1800 425
5566 which enables the customers and general public to seek
clarification on Bank's products, service, etc. Adequate publicity
through print and visual media is ensured during the year.
3.7 Branches were encouraged to conduct Customer Relations Programmes.
Customer Meets were conducted at several centres to ascertain customer
responses and suggestions. The suggestions received were recorded and
action taken. Bank celebrated "Customer Contact Week" from 12th
December 2011 to 18th December, 2011. Various Town Hall meetings and
Customer Meets were conducted during this period.
3.8 With the intention to tune staff members/officers for rendering
better customer service and drive home the importance of customer
service/customer grievance management, Bank had organized Seminars
which were addressed by the Banking Ombudsman for Kerala at select
centers.
4. NRI Services
SBT, the pioneer and the most preferred Bank of NRIs is the market
leader of NRI business in Kerala. The products and services offered to
NRIs are continuously being reviewed and improved to suit their
requirements. The representative office at Dubai, Two exchange
companies managed by us in Dubai and Oman and the relationship managers
posted in the GCC countries have helped substantially for this
achievement.
NRI PLATINUM account, our specialized NRE product is well accepted by
High Net-Worth NRIs because of its special features. The rise in NRE
fixed deposit rates consequent to the deregulation of interest rates on
Non- Resident External Rupee (NRE) Deposits and Ordinary Non-Resident
(NRO) Accounts by RBI as well as the favorable exchange rates has
resulted in the increased remittances from abroad. Instant credit
facility, an improved version of 'Money Trans-E remit' has been
introduced during the year for immediate direct online credit to the
beneficiary's account and acknowledgement by SMS/E mail A premium NRI
branch has been opened during the year in Thiruvananthapuram increasing
the number of NRI Specialized Branches to five. Three more branches
will be opened shortly.
5. Lead Bank Scheme
5.1 The Bank is shouldering Lead Bank responsibilities in three
districts of Kerala State viz. Alappuzha, Kottayam and Pathanamthitta.
The District Credit Plans for the year 2012-13 was launched in the lead
districts during March 2012. The total outlay by all financial
institutions in the three Lead Districts for 2011-12 was Rs.15, 830.10
crore of which the Bank's share was Rs.3,373.30 crore (21.31%).
5.2 The Lead Banks coordinated several activities like out-reach
program me in unbanked areas, where Banking Ombudsman of RBI, Executive
Director / Regional Director attended. Counseling for students seeking
educational loans, seminars on Financial Literacy and Entrepreneur
Development Program me for different target groups were also arranged in
the lead districts. Service Area Approach for education loans was
implemented and redressed forum for education loans was formed with
LDMs as convener. A Special Campaign was conducted on Priority Sector
Advances particularly for extending Kisan Credit Cards. A campaign for
opening of Savings Bank accounts was conducted by our Lead Bank Offices
in the Lead Districts for widening the coverage of banking services.
5.3 Rural Self-Employment Training Institutes (RSETIs)
RSETIs have been started by the Bank in Weaned, Pathanamthitta,
Alappuzha, and Kottayam for providing training in skill up gradation to
the rural youth with focus on BPL category. These 4 institutes had
trained 13,022 persons and 92% of the people are women beneficiaries.
Majority of the trainees are reported to be successful in starting
self-employment ventures. The courses for which training is imparted
includes beautician, ornaments manufacturing, Computer Tally, Mobile
Phone Servicing & Repairing, aluminum fabrication, tailoring, textile
ornamentation, kitchen gardening, mushroom cultivation with vegetable
growing, dairying & vermin compost and off-site programmers' like rubber
tapping, driving etc. RSETIs also imparted training to beneficiaries
selected under Kerala State Self Entrepreneur Development Mission
(KSSEDM).
5.4 Financial Literacy and Credit Counseling Centre (FLCCs)
Bank has started FLCC along with RSETIs in the Lead Districts of
Alappuzha, Kottayam and Pathanamthitta, for providing financial
literacy & credit counseling. The main initiatives implemented are
imparting financial literacy, information about product and credit
availabilities and arranging seminars for counseling students aspiring
for higher education.
6. Financial Inclusion
6.1 Financial Inclusion (FI) is delivery of banking services at an
affordable cost to the vast sections of the disadvantaged and
low-income groups. The Bank has opened over One Million No-frills"
accounts (Janapriya accounts). Bank has opened around 13.20 lacs
No-frills accounts, out of which 70% are in the State of Kerala. Joint
Liability Group (JLG) schemes, Biometric Smart Card Project, General
Credit Cards to the Janapriya Account Holders etc. are other
initiatives in this direction.
6.2 In conformity with the directions of Reserve Bank of India, the
Bank has formulated a Financial Inclusion Plan, which has been rolled
out during 2010-11 and all FI villages allotted to the Bank have been
covered. The Financial Inclusion will be an integral part of the
business plan of the Bank.
6.3 The following activities have been undertaken by the Bank as part
of fulfilling the Bank's commitment to Financial Inclusion.
- SLBC Kerala has allotted 29 villages in the population category of
above 2000 to the Bank for providing basic banking services through
Banking Facilitator (BF) / Banking Correspondent (BC) route or by
opening branches.
- Bank has provided basic banking in these villages through the BF/BC
route, except in Peru manna Village in Kozhikode District where a new
branch was opened on 30th March 2011.
- Bank has engaged Kudumbashree" as Banking Correspondent in the
State of Kerala.
- M/s Baronies India Ltd., Hyderabad is the Technical Service
Provider for Smart Cards and Financial Inclusion Project of the Bank.
- The Bank has been allotted 6 villages in Tamilnadu for providing
basic banking services, which has been covered through the BF/BC route
for which the Bank has engaged Individual BCs.
- All the BCs / Customer Service Providers (CSPs) and Link Branch
Managers have been imparted training.
- The FI Project of the Bank has been christened as SBT-SAHAYA
HASTHAM".
- Bank has appointed 6 Channel Managers for the FI Project.
- The Bank has enrolled nearly 13,000 customers under SAHAYA HASTHAM in
the 34 FI Villages and added 1,954 No-Frills Accounts through the new
branch at Peru manna Village during the year.
6.4 UID Project:
- Unique Identification Authority of India (UIDAI) has appointed the
Bank as Registrar for the UID Project of the Government of India.
- M/s Tear Software Ltd., Hyderabad has been selected as the
Enrolment Agency for the Bank's Unique Identification Project in
Kerala.
- The Bank has enrolled 21,763 residents under the UID Project.
7. Support to disadvantaged segments
7.1 Assistance to Scheduled Caste / Scheduled Tribes [SC/ST]
The Bank continues to give due importance in extending financial
assistance to meet the credit requirements of the SC/ST borrowers. Bank
has adopted 4 villages in Kerala and one village in Tamil Nadu where
SC/ST concentration is more, for extending credit for their
development. The advances to SC and ST borrowers under Priority sector
stood at Rs 2,604.04 crore (12.84%). The percentage of NPAs in respect
of SC/ST borrowers under Priority Sector is 1.01 % of the outstanding.
7.2 Assistance to Minority Communities [MCs]
The Bank continues to give due importance in extending financial
assistance to meet the credit requirements of the Minority Communities.
The advances to MCs under Priority Sector stood at Rs. 6,968.25 crore.
This works out to 34.34% of the Bank's Priority Sector advances,
compared to 34.05% as at the end of the previous year.
8. Information Technology - Technology Up gradation & IT Initiatives
8.1 The Core Banking System (CBS) has provided the Bank with the
state-of-the-art software that has greatly enhanced the efficiency of
customer services, speeded up data processing capabilities,
strengthened MIS, enabled efficient Asset Liability Management, reduced
transaction cost and offered alternative channels to customers for
transacting their business. The CBS is a product-based system whereby
new schemes of the bank can be introduced easily with global parameter
setting at CDC level. The capacity of the servers and other equipments,
and other performance parameters are periodically reviewed and
up gradation / addition of new equipment is arranged as and when felt
necessary.
8.2 Alternative Delivery Channels
The CBS has facilitated effective implementation of Alternative
Channels viz. Automated Teller Machines [ATMs], Internet Banking and
Mobile Banking. The ATM network was beefed up by adding more ATMs. The
Internet Banking facility is recognized to be the best among its class.
Mobile Banking Service, which was rolled out in July 2009, is getting
steady acceptance from customers.
8.3 ATMs
The Bank has a network of 929 ATMs, including 273 offsite ATMs. The
network of 764 ATMs in Kerala is the largest in the State. All ATMs are
part of the State Bank Group ATMs, having around 27,000 ATMs. Ninety
six new ATMs were installed during the year. The Bank's ATM-cum-Debit
cards are accepted in all outlets having Master Card/Visa logo. Several
facilities such as Visa Money Transfer (VMT), Money Send, SBI Credit
Card payment, SBI Life Premium payment, Mobile recharge, Donations, Fee
payments, JMET / GATE Application Fee payment, Mobile Banking
registration, Cheque Book order etc. have also been enabled in our
ATMs. The Bank has a card base of 54.25 lacs as on 31st March 2012,
which translates into an increase of 22.03% over the card base as at
the end of the previous year.
8.4 Internet Banking
The Bank offers a convenient and efficient Internet Banking ( INB)
facility through 256 bit EVSSL (Extended Validation Secured Socket
Layer) encryption. This provides more security to Internet Banking
customers against phishing / hacking threats. The Bank has added 90,434
new INB registrations during this year, ie. an increase of24.86% over
the registrations as at the end of previous year. The total number of
INB registrations as on 31st March 2012 is 4,54,131.
Major initiatives in Internet Banking during the year are as follows:
a) Site to site integration has been done with:
- Kerala State Motor Vehicles Department for making online payment
for any of the 20 services provided by the department.
- UPSC for fees payment.
- CBEC for making payment of Excise and Customs Duty.
- M/s Atom Technologies, M/s E-Billing solutions and M/s Tech Process
Solutions, thus enabling customers to make payment for online purchases
in around 2,500 online merchant sites.
- NSDL for viewing Form 26 AS and payment for application for PAN.
b) Other initiatives:
- ATM Cards enabled for making payments for merchant transactions and
Direct taxes (OLTAS) through Internet Banking.
- Simplified, single user Corporate Internet Banking facility with
transaction rights (SARAL) launched.
- Facility for opening and closure of e-TDR/ e-RD introduced.
- Internet Banking facility to Visually challenged persons rolled
out.
- i-Collect, the generic e-payment and e-collection module suitable
for Retail/ Corporate Internet Banking Customers has been introduced.
- E-payment of Maharashtra State Professional Taxes has been enabled
through SBT ONLINE.
- SBT Insta pay, an electronic Bill payment facility has been
enabled, which does not require prior registration with Billers. Online
recharge of Mobile phones and DTH TVs are also enabled in this module.
- Customized Corporate Internet Banking provided to Kerala State
Housing Board and M/s Strathy Motors for their centralized funds
management and monitoring.
- Anti phishing measures: Several anti-phishing steps have been taken
to protect the interest of our customers such as:
- Website Authentication to customers: Extended validation SSL
certificate has been implemented for the site which makes the address
bar green when the customer visits the site.
- Customers are educated periodically through security alert messages
to their registered mobile number.
- One Time Password over SMS, for online transfer of amounts more than
Rs. 10,000/- (per day limit) for online transfer of funds to third
parties and for all merchant transactions irrespective of the amount,
excluding few merchant sites like IRCTC, LIC & Govt. sites. This is in
addition to One Time password over SMS required for adding the
beneficiary's account.
- For every transaction, post transaction SMS alert is sent to the
customer's registered mobile number.
8.5 Mobile Banking Service (MBS)
Mobile Banking provides the customers with another safe, secure, fast
and convenient channel for banking transactions. The services provided
includes enquiry services, funds transfer, demit account services,
bills payment, mobile top up, DTH recharge, m-commerce etc. The daily
limit for MBS transaction is Rs. 50,000/- for funds transfer &
transactions involving purchase of goods & services, within an overall
calendar month limit of Rs.2,50,000/-.
49,363 new Mobile Banking registrations were activated during the year
ie. an increase of 144.77 % over the registrations as at the end of
previous year. The total number of MBS registrations as on 31st March
2012 is 83,461.
The customers also have an option of using Mobile Banking Service over
any of the following four channels viz., (a) Application based (b) WAP
based (c) USSD based and (d) SMS based.
8.6 A standing committee has been formed for conducting Gap analysis on
Information Security, Electronic Banking, Technology Risk Management
and Cyber Frauds as per RBI Guidelines.
9. Business Process Re-Engineering (BPR) Initiatives
9.1 With the objective of improving performance and enhancing customer
service to global standards, the Bank has embarked on implementation of
various BPR initiatives by leveraging on its core competencies, state
of the art technology and redesigned operating architecture.
9.2 Retail Assets & Small and Medium Enterprises City Credit Centers
(RASMECCCs) for appraisal, sanction, disbursement and maintenance of
loans in Retail, Small & Medium Enterprises segments have been set up
at 8 major centers. This has enabled the Bank to reduce the response
time in sanction and disbursal of loans at these centers, thereby
improving the level of customer satisfaction. It has also enabled
standardization of internal processes leading to improved quality of
assets.
9.3 A Rural Central Processing Centre (RCPC), set up at Palakkad
covering all the branches in the District, has improved the quality and
pace of lending under Agriculture, MSME and Personal Segments.
9.4 Multi Product Sales Teams have been established at 7 of the
RASMECCCs to target specific markets, for effectively canvassing new
business.
9.5 Stressed Assets Resolution Centers (SARCs) have been rolled out at
8 centers for more focused attention on recovery, thereby releasing
funds blocked in non- performing assets which can then be utilized for
more productive purposes.
9.6 A Liability Central Processing Centre (LCPC) has been established
in Thiruvananthapuram to provide back office support to branches, in
opening and servicing of liability accounts such as Savings Bank and
Current Deposit Accounts. The Centre provides pre-generated Welcome
Kits consisting of ATM cards and cheque books to all the branches. This
facilitates the customers to operate the accounts immediately after
opening the account. Issue of Personalized Cheque Books to the
customers of all the branches is also centralized at LCPC.
9.7 Pension processing has been centralized at Centralized Pension
Processing Centre (CPPC) set up at Thiruvananthapuram. This Centre
covers all pensioners drawing pension from all branches. The Centre
ensures accuracy in pension calculations, timely disbursement of
pension and quick settlement of transactions.
9.8 A Centralized Clearing Processing Centre (CCPC) is established at
Thiruvanathapuram with a view to move back office non customer facing
activities related to clearing and collections away from branches to
enable branches to focus more on customer service. The initiative also
helped the Bank to afford credit to the accounts in respect of local
clearing instruments on the day following the day of deposit of the
cheque.
9.9 Trade Finance Central Processing Centres (TFCPCs), aimed at
ensuring efficient and uniform handling of transactions related to
inland and foreign trade and Bank Guarantees have been rolled out at
Ernakulum and Chennai.
9.10 Drop Boxes have been provided at the branches for hassle free and
safe handling of instruments deposited. Drop Boxes have been provided
at two on- site ATMs on a pilot basis.
9.11 'Graham Mithras' have been positioned at select branches to
proactively guide the customers in conducting transactions.
9.12 Relationship Managers have been posted at select branches to
extend personalized services to the customers.
10. Internal Control Systems & Supervision
10.1 Integrated Risk Management
The Bank's risk management philosophy is based on a clear and timely
identification of various types of risks, accurate risk assessment and
measurement procedures and continuous monitoring. The risk management
architecture of the Bank consists of the Board of Directors at the top
having overall responsibility to implement Risk Management System in
the Bank. In order to have focused attention on various risks, Credit
Risk Management Committee (CRMC), Market Risk Management Committee
(MRMC) and Operational Risk Management Committee (ORMC) are in place to
manage Credit Risk, Market Risk and Operational Risk respectively at
the granular level. The General Manager (P&D) is designated as the
Chief Risk Officer (CRO). The Integrated Risk Management Department
headed by Deputy General Manager is responsible for the overall daily
management of risks at micro level.
Management of all the risks is governed by various policies such as
Credit Risk Management Policy, Loan Policy, Market Risk Management
Policy, Investment Policy, Operational Risk Management Policy, Loss
data Policy, Business Continuity Planning Policy, Outsourcing Policy,
etc. As part of credit risk management, the Bank has a structured and
standardized credit approval process which includes comprehensive
credit rating of proposals. Other risk prone operational areas of the
Bank's business are monitored and proactive actions for improvement are
initiated in consultation with other departments like Inspection,
Systems & Procedure, Fraud Prevention, Monitoring and Recovery
Department etc.
The year witnessed great volatility in both domestic and fore markets.
However, the Bank could tide over the situation as sound market risk
management practices were in place. The market risk is largely managed
through adherence to various position limits, stop loss limits, Value
at Risk (VaR), Management Action Triggers (MAT), Cut Loss Triggers
(CLT) etc. The Bank is in the process of upgrading the present software
so as to compute market risk capital charge on a daily basis as per RBI
guidelines.
The Bank is closely monitoring the roadmap for migration to advanced
approaches of Basel II and Basel III norms by striving to create
sufficient and accurate database, ensuring involvement and awareness
among all the staff members of the Bank and planning for build up of a
capital base of the desired quantity and quality.
During the financial year 2011-12, the following major risk management
initiatives were taken:
- Credit Rating models for trading and manufacturing sectors modified
and introduced in IT platform capable of retaining historic data.
- New Credit Rating models introduced for NBFCs and infrastructure
projects were launched in IT platform capable of retaining historic
data.
- Purchase of Loan Origination Software for retail loans was
finalized and expected to be introduced to facilitate retention of data
for migration to advanced approaches.
- The bank started computing Value at Risk for all investments in
trading book as part of risk management.
- As part of spreading awareness and risk management culture all over
the Bank and as part of capital conservation measure, officials from
risk management department conducted day-long workshops for all the
branches.
- External consultants have been appointed for guiding the bank
through the process of migration to advanced approaches for Credit
Risk, Market Risk and Operational Risk.
10.2 Asset Liability Management
The Asset Liability Management System implemented effective from 1st
April 1999 is functioning as per the guidelines prescribed by Reserve
Bank of India. The Asset Liability Management Committee (ALCO) headed
by Managing Director meets regularly.
The Bank's ALM Policy based on RBI guidelines lays down broad benchmark
levels in managing liquidity and market related risks. Liquidity and
interest rate risks are identified, measured and monitored by the ALCO
through the prescribed statements, viz. Statements of Structural
Liquidity and Interest Rate Sensitivity, Short Term Dynamic Liquidity,
Duration Gap Analysis, Stress Testing on Liquidity and Interest Rate
Risks etc. ALCO discusses these statements in detail and takes
corrective actions whenever necessary. As per the Bank's ALM Policy a
contingency funding plan is reviewed on a quarterly basis. Revisions
of interest rates on deposits and advances, including the Benchmark
Prime Lending Rate (BPLR) and Base Rate (BR) are discussed and decided
by the ALCO. The ALCO also discusses the economic developments and
monitors the changes in the market on an ongoing basis.
10.3 Inspection and Supervision
Internal audit/inspection is an independent appraisal of operations of
various Systems of Controls within an organization to determine whether
acceptable policies and procedures, designed to add value and improve
an organization's objectives, are followed and resources are used
efficiently and economically. Inspection and Audit Department at Head
Office monitors various risk parameters by conducting regular Internal
Inspection, IS Audit, Compliance Audit, Surprise Inspection of Branches
and System Audit of various Head Office Departments and Modules.
Apart from the above, Bank has put in place an effective institutional
mechanism for Risk Based Supervision through RBS Cell in the Inspection
Department. As envisaged by the Regulator, the Bank introduced Risk
Focused Internal Audit (RFIA) under RBS w.e.f. 1st April 2003. With
effect from 1st April 2010, score for Business Parameters has been
taken out of the purview of the RFIA. Subsequent to migration to Core
Banking, corresponding changes have been brought in, especially in the
area of Audit Rating, Audit Report Formats, grouping of branches,
sampling norms and periodicity of inspection. The Bank has introduced
separate systems for verification of Gold, Cash and securities and for
regular RFIA. Various user friendly formats have been introduced for
Cash and Gold verification, FEMA Audits, Tax Audits, IS Audits etc. The
Department is also involved in the area of monitoring Concurrent Audit
of designated branches and movement of audit rating of these branches.
In order to instill knowledge and to improve the quality of various
reports, the department is imparting training for the existing and
newly joined inspecting officials in the area of RFIA, IS Audits and
Concurrent Audit. In order to improve the efficiency of Internal Audit,
during the year 2011-12, the Bank started awarding Certificates to
Branches who have secured highest rating in two successive audits.
10.4 Credit Audit
The audit of high value credit accounts with the aim of improving the
asset quality of the Bank is undertaken by the Credit Audit Department.
Accounts with total exposure of Rs.2 crore and above are covered under
Credit Audit. The Department conducted audit of 1060 accounts during
the year, covering the pre-sanction and post sanction aspects. The
Department had also conducted credit audit of 26 accounts with exposure
below Rs.2 crores and above Rs.1 crore on a random basis during the
year.
10.5 Inter-Office Reconciliation
As per RBI guidelines, all high value debit entries of Rs.1 lakh and
above and 99.99% debit amount need to be reconciled within a period of
six months from the date of their origin. The Bank has completed
reconciliation of Inter Branch accounts up to 30th September 2011,
achieving 100% reconciliation of debit entries.
10.6 Compliance
The Bank ensures timely compliance of various statutory and regulatory
returns and also prompt reply to references received from Government of
India / Reserve Bank of India and other institutions viz., State Bank
of India, Indian Banks Association etc. The Chief Compliance Officer
monitors the Compliance function effectively and submits periodical
reports to the Audit Committee of the Board for information.
10.7 KYC norms & AML/CFT measures
The Bank has put in place a Board approved revised policy on Know Your
Customer (KYC)/ Anti Money Laundering (AML)/ Combating of Financial
Terrorism (CFT) measures as per RBI policy. A dedicated KYC- AML Cell
is functioning in the Head Office to oversee the compliance of
KYC/AML/CFT measures. Dy. General Manager (Compliance) is the
designated Principal Officer for KY C/AML in our Bank.
As per the policy, the branches are required to obtain photograph,
identity proof and address proof while opening new accounts. Customer
acceptance and Customer identification are the most important pre-
requisites in the opening of new accounts. Branches also have been
advised to update the identity proof and address proof of the existing
customers at regular intervals. Controllers during their visits to the
branches as also the Auditors and Concurrent Auditors verify compliance
of KYC norms while opening accounts.
Monitoring of transactions is done with a view to submit the required
reports to the Financial Intelligence Unit- India (FIU - IND) mandated
by Prevention of Money Laundering Act 2002. With a view to implementing
and supporting the monitoring of transactions, the Bank has acquired
appropriate software which is processing all transactions handled by
all the branches of the Bank on a day to day basis. Monthly Cash
Transaction Reports (CTRs) and NPO Transaction Reports (NTRs) are being
generated by the system for submission to FIU-IND. Suspicious
Transaction alerts are generated daily, for analysis by the KYC-AML
Cell. After due analysis, suspicious transactions are reported to
FIU-IND through Suspicious Transaction Report (STRs), wherever felt
necessary. Counterfeit Currency Reports (CCRs) are also being submitted
to FIU-IND as and when detected.
KYC/AML Cell is publishing a quarterly news letter and maintains a web
site to provide relevant and up-to-date information for Branches/
Administrative Offices.
Training on KYC/AML is being imparted on an ongoing basis in the Bank.
Staff awareness programmers' are conducted regularly through seminars at
Zonal/ Regional Office levels, Learning Centres and during branch
visits.
10.8 International Financial Reporting Standards
As per the Road Map laid down by Ministry of Finance, Government of
India ,all Scheduled Commercial Banks are to convert their opening
Balance Sheet as on 1st April 2013 in compliance with the Converged
IFRS ( IND- AS). The Ministry of Corporate Affairs have notified the
Converged Indian Accounting Standards (Ind-AS) and is yet to announce
the date of implementation of these standards.
The Bank being a member of State Bank Group will be taking a common
group approach on convergence to IFRSs. The Bank had formed an IFRS
Cell at its Head Office for the preparatory works. The cell is engaged
in collection, compilation and submission of data as required by State
Bank of India for preparation of Consolidated Financials by them under
Converged IFRSs.
11. Security arrangements
There was no significant loss due to security breach in the Bank,
during the Year. Risk assessment of all bank branches was done and
accordingly security guards have been deployed in vulnerable branches.
Manning of currency chests by five security guards is being ensured by
timely recruitment. Formal security audit of all currency chests has
been carried out this year and corrective measures initiated wherever
required. Security at Head Office has been strengthened by installation
of CCTVs system with comprehensive coverage. Chief Security Officer,
Fire officer and Zone/Region Security Officers are reviewing security
arrangements at branches constantly through branch visits and
corrective measures taken wherever required.
12. Information security
The Information Systems Security Cell functioning at the Head Office is
in charge of creating , maintaining and disseminating information
security strategy, plans and policies. The Cell co-ordinates the
Information Systems security activities . The formulation and periodic
reviews of IS Security policies , vetting of software etc. are some of
the major functions of the IS Security cell.
The cell also undertakes spreading the Information Security awareness
among the staff and customers of the Bank. More than 400 staff members
have been trained in the Information Security activities during the
year under review. Bank has initiated campaigns to spread awareness
about various threats faced by the customers like PHISHING, Skimming
etc. Awareness campaigns have been conducted through emails, pamphlets
, news letter etc. The cell also keeps the staff members conscious of
the security threats,.
13. Vigilance Machinery and Frauds Monitoring
The vigilance climate of the Bank during the period under review was
generally normal. The integrity level of staff / officers in the Bank is
of a high order and instances of criminal misconduct by the staff /
officers were minimal. Only two fraud cases with staff involvement
have been reported in the year. Regular Department Action (RDA) has
been initiated against the erring officials.
The periodic internal review mechanism by the Vigilance Department has
focused on the delay at various stages and addressed this issue with
close coordination with the Disciplinary Proceedings Department. There
has been increased emphasis on preventive vigilance with futuristic
approach to ensure compliance with various guidelines/instructions.
During the current year 40 fraud cases have been reported, compared to
17 cases in 2010-11. There has been a recovery of Rs.1,322.65 lakh in
the current year consisting of cash recovery of Rs.308.86 lakh,
settlement of insurance claims of Rs.36.79 lakh and ECGC claims of
Rs.977 lakh. 29 cases involving amounts up to Rs.25 lakh have been
closed as per the revised guidelines of RBI. Various measures have been
implemented for prevention of frauds. Alertness Awards were distributed
to three staff members in recognition of their contribution in the
detection/prevention of frauds. 'Whistle Blower' scheme also has been
put in place in the Bank for prevention of frauds.
Preventive Vigilance Committees were initially set up in major branches
and such Committees are functioning in 184 branches. In order to
enhance the effectiveness of vigilance administration in the branches,
Preventive Vigilance Committees have been constituted in 330 more
branches during the year. As part of green initiative, the minutes of
the committee meetings at branches are received through e-mail. The
minutes are perused by Vigilance Department and branches are given
direction for focusing on preventive vigilance measures.
Surprise inspections from vigilance angle are also conducted at select
branches. The reports are scrutinized by CVO who suggests compliance/
corrective action at the branches. The compliance is closely monitored
through the controllers. The CVO has also made surprise visits to 15
branches during the year to ensure compliances from vigilance angle.
CVO heads the Dedicated Unit on Frauds Review and Monitoring to review
the progress of action taken on frauds involving an amount of Rs.10
lakhs and above but less than Rupees One Crore. The frauds involving an
amount of Rupees One Crore and above are reviewed by the Committee of
Directors once in a quarter. CVO closely monitors action taken on the
complaints received from CVC/CBI. In addition, all the complaints
received from the customers/ others are also monitored and those having
vigilance angle are subjected to appropriate action through vigilance
mechanism.
Vigilance Awareness Week was observed from 31st October 2011 to 5th
November 2011 in terms of CVC's directions. The activities carried out
during the week include
- Administration
Mar 31, 2011
Report of the Board of Directors to the State Bank of India, the
Reserve Bank of India and the Central Government in terms of Section 43
(1) of State Bank of India (Subsidiary Banks) Act, 1959 Period covered
by the Report: 1st April 2010 to 31st March 2011
2. The Banks Operations and Performance
2.1 Business Turnover
The gross business turnover of the Bank crossed the major milestone of
Rs.One lac crore in December 2010. The total business of the Bank stood
at Rs.104,202 crore on 31st March 2011, registering a growth of 16.63%
from the level of Rs.89,345 crore as on 31st March 2010.
2.2 Working Results and Operating Profit
Operating profit (after staff provisions) of the Bank for 2010-11 went
up by 21% to Rs.1,175.97 crore from Rs. 972.27 crore for the previous
year. Net Profit for the year stood at Rs.727.73 crore as compared to
Rs.684.27 crore in 2009-10. The Earnings per share (of Rs.10 face
value) stood at Rs. 145.55 compared to Rs.136.85 at the end of the
previous year.
The Net Interest Income increased by 21% from Rs.1,400 crore in FY
09-10 to Rs. 1696 crore in FY 10-11. Net Interest Margin stood at
2.87%.
2.3 Dividend
The Bank declared a higher dividend of Rs. 18 per share (180%) for the
year to the shareholders, entailing a total payout of Rs. 90 crore. Of
this, an interim Dividend of Rs. 8 per share (80%) was paid out in
October 2010. The Pay-out ratio works out to 12.41% of the
distributable profit (excluding dividend tax).
2.4 Capital Augmentation & Capital Adequacy
The Banks capital funds improved from Rs.4397 crore as at the end of
March 2010 to Rs.4881 crore as at the end of March 2011. The capital
adequacy Ratio under Basel II stood at 12.54% in March 11 as compared
to 13.74% in March 10 against a minimum of 9% stipulated by RBI. The
Tier-I CRAR on this date is 9% as against 9.24% as at the end of the
previous year. The Banks Board of Directors had approved a Rights
Issue of shares to the shareholders for an amount of Rs. 500 crore. The
approvals from the RBI and State Bank of India for the issue have been
received. The capital augmentation will serve to improve the Capital
adequacy ratio of the Bank in 2011-12.
2.5 Deposits
Aggregate Deposits of the Bank registered a growth of 15.49%, reaching
the level of Rs.57,599 crore as on 31st March 2011 as against Rs.
49,874 crore as on 31st March 2010. Personal Deposits, which contribute
the bulk of the resources, grew by Rs.3,618 crore to reach Rs. 36,096
crore. NRI Deposits recorded improved performance
compared to the previous year, grew by Rs. 725 crore and stood at
Rs.11,562 crore. NRI Deposits constituted 20.07% of the Aggregate
Deposits of the Bank as on 31st March 2011. Total Deposits of the Bank
[including Inter Bank Deposits] moved up to Rs. 58,158 crore as on 31st
March 2011 from Rs. 50,883 crore as on 31st March 2010.
2.6 Advances
Advances of the Bank registered a growth of 19.72% during the year and
reached a level of Rs. 46,044 crore as on 31st March 2011 as against
Rs. 38,461 crore as on 31st March 2010. The main contributions came
from the C&I segment [growth of Rs.4,637 crore] and Agriculture segment
[growth of Rs.2,280 crore]. The Banks Retail lending stood at
Rs.23,055 crore and constituted 50% of Total Advances as at the end of
March 2011. The Credit Deposit Ratio of the Bank stood at 79.17% as on
31st March 2011 as against 75.59% as on 31st March 2010.
2.7 Market Share
Banks All India market share in Deposits has improved from 1.09% on
31st March 2010 to 1.10% on 26th March 2011. The market share in
Advances has been static at 1.16% in the same period. However, the
market share would be 1.17% if the Rs.1,000 crore of Inter Bank
Participation Certificate (IBPC) issued by the Bank during the year is
included. The Bank continued to maintain its position as the premier
bank in Kerala with a market share in business of 22.13% as at
September 2010 [the latest date up to which data has been released by
RBI] with 14% of the total branch network in the state.
2.8 Priority Sector lendings
The Bank continued to give special emphasis on lending to the Priority
Sector in conformity with the national policies, expectations and
fulfilment of social objectives. Banks gross Advances to the Priority
Sector increased from Rs. 14,260 crore as at the end of March 2010 to
Rs.17,353 crore as at the end of March 2011, and constituted 44.07% of
the Adjusted Net Bank Credit against the benchmark of 40%.
2.9 Agricultural and Rural Finance & Self Help Groups
Agriculture segment was the standout performer during the year under
review. Bank has disbursed an amount of Rs. 5,716 crore under
Agriculture segment as at the end of March 2011 against the Special
Agricultural Credit Plan target of Rs.4,000 crore. The level of lending
to agriculture sector stood at Rs. 5,580 crore as on 31st March 2011.
Agri segment showed a positive growth of Rs. 2,280 crore as at the end
of financial year 2010-11 compared to a growth of Rs.449 crore during
the same period last year. The share of Agriculture Advances to
Adjusted Net Bank Credit [ANBC] improved sharply to 14.17% from 10.33%
at the end of the previous year.
During the current fiscal 16,677 Kisan Credit Cards (Working capital
facility to farmers) and 4,519 Kisan Gold Cards (Investment credit to
farmers) were issued with an outlay of funds of Rs. 146 crore and Rs.
182 crore respectively. During the current year, the level of Kissan
Credit Card loans increased by 29% and 79% in number and amount
respectively against the RBI stipulation of 20%.
The growth in Agriculture lending was driven by an intensive
agriculture lending campaign called "SBT- Haritotsavam- 2010" during
the period June to September 2010. Against a lending target of Rs.1,000
crore, the amount disbursed during the period was Rs.1,424.25 crore,
benefiting 2,04,082 farmers.
Bank continued to be active in assisting Self Help Groups and financing
them through MFIs and NGOs. 84,787 groups were assisted so far with a
financial outlay of Rs.656 crore. Bank has entered into an MOU with
Kudumbasree (State mission for poverty alleviation) for giving loans to
SHGs at low rate of interest. The notable feature of the programme is
community farming by women neighbourhood groups with bank assistance.
600 women who are active in Self Help Groups were honoured with SBT
Kudumbasree Award.
Farmers meetings were conducted at various centres to give wide
publicity for schemes available to farmers. A special brochure on
agricultural schemes in local languages was printed and supplied to the
branches for the benefit of farmers. The Bank stands in the first
position in terms of number of Farmers Clubs among Commercial banks in
Kerala. The farmers Clubs sponsored by Pattanakkad and Bharananganam
branches were awarded merit certificates by NABARD for their farmer
friendly performance.
2.10 Lending to Micro, Small and Medium Enterprises (MSMEs)
The Bank continued to extend support to Micro, Small and Medium
Enterprises, in conformity with national objectives. The total lending
to MSME sector recorded a growth of 14.49% over previous year to touch
Rs. 8,487 crore. The lending to Micro & Small Enterprises [MSEs] stood
at Rs. 5,061 crore which is 18.69% higher over the previous year level.
The Small Scale Industries and Small
Business segment recorded a growth of Rs.214 crore during the year,
reaching a level of Rs.3906 crore as on 31st March 2011.
The growth in this sector was fuelled by an intensive MSME lending
campaign conducted from 01st October 2010 to 31st January 2011. Against
a target of Rs. 500 crore under MSME segment [including Rs.150 crore
under micro segment, Rs. 150 crore under small segment and Rs. 200
crore under medium segment], the total lending during the campaign
period was Rs.628 crore. 1% reduction in interest and waiver of
processing charges were offered during the campaign period.
Road Transport Operators (RTO) segment has recorded steady progress
after liberalization of collateral security norms and interest rate
concession. The lending to the sector grew by 43.98% to reach Rs. 514
crore as at March 31, 2011.Tie up arrangements with various
manufacturers / dealers of commercial vehicles served to increase the
presence in the market.
The Bank is a Member Lending Institution under the Credit Guarantee
Fund Trust for Micro and Small Enterprises (CGTMSE) scheme for
providing collateral free loans. Awareness programmes / workshops
/seminars were conducted in all Regional Offices of the Bank / Training
sessions and other important centres for operating staff about the
scheme. Meetings of entrepreneurs were also conducted to educate them
about the scheme. 10,350 loans amounting to Rs. 316 crore have been
extended under the scheme so far.
The Banks Technical Consultancy Cell carried out three project
appraisals, four rehabilitation studies and two general studies during
the year. The cell also involved in the three Entrepreneurship
Development Programmes (EDPs) conducted by the Bank during the year.
2.11 Commercial & Institutional Finance
The Bank performed well under the segment by tapping the potential in
market and C&I advance of the Bank reached Rs. 23,835 Crore as on 31st
March 2011. This segment contributes more than 50 % of Banks total
advances, which comprises financing Trade and Services, Industry,
Infrastructure, financing Corporate customers and other institutions.
The 4 Industrial Finance Branches at New Delhi, Bangalore, Chennai and
Ernakulam were re- designated as Commercial Branches, to sharpen their
focus and broad base their portfolio. The 5 Commercial Network branches
(including the Corporate Finance Branch at Mumbai) contribute 40% of
the Credit growth. These
branches share of the Credit of the Bank has moved up from 22% to 25%
during the year. Their share of the Non- fund based income of the Bank
improved from 19% to 23% in the same period. Account Planning
Initiative was rolled out at these branches during the year to improve
the share of income of the Bank from major accounts.
2.12 Personal Finance
The Bank continued to be active in extending finance to Personal
Segment, mainly by way of Housing Loans, Car Loans and Educational
Loans. The Personal segment Advances went up to Rs. 13,345 crore as at
March 2011 from Rs. 12,696 crore as at the end of the previous year,
recording a growth of 5.11%. As many as 20,646 Housing Loans
aggregating Rs. 2,363 crore were extended during the period under
review, taking the outstanding Housing Loan level to Rs. 6,714 crore as
at 31 Mar 2011, an improvement of 20.34% over March 2010 level of Rs.
6144 crore. Similarly 17,215 Car Loans aggregating Rs. 590 crore were
extended during the same period, taking the outstanding Car Loan level
to Rs. 1,420 crore as at 31 Mar 2011, which is higher by Rs. 96 crore
over March 2010 level of Rs. 1,324 crore.
As in the previous years, the Bank continued to support the growing
generation to prosecute higher studies by extending Educational Loans
under Gyan Jyothi Schemes. The Bank has granted the maximum number of
education loans in the State of Kerala. During the year under report,
Bank sanctioned 19,782 Educational loans amounting to Rs. 565 crore.
The total amount outstanding under this head stood at Rs. 1,713 crore.
The Bank also extended the subsidy assistance provided by the
Government for Housing Loans and Educational Loans. These included the
1% interest Subvention for Home Loan borrowers up to a limit of Rs.10
lac where the estimate/cost of construction should not exceed Rs.20
lac, (applicable to the loans disbursed from 01st October 2009 to 31st
March 2011), Interest Subsidy for Housing Urban Poor (ISHUP) Scheme to
provide home loans with interest subsidy to Economically Weaker
Sections (EWS) / Low Income Groups (LIG) for acquisition/construction
of house and Central Scheme to provide Interest Subsidy on Education
Loan borrowers. Maximum permissible loan amount under ISHUP is Rs.1 lac
for EWS and Rs.1.60 lac for LIG category of borrowers (maximum amount
eligible for subsidy is Rs.1 lac).
The subsidy scheme for education loans is available to students
belonging to Economically Weaker Sections whose
parental annual income does not exceed Rs.4.5 lac. Interest Subsidy
will be provided by the Government during the moratorium period for the
disbursements made on or after 01st April 2009.
2.13 Policies and Guidelines
A comprehensive Policy for lending to Micro Finance Institutions
(MFIs)/Non Governmental Organisations (NGOs) has been formulated for
regulating and standardising the Advances to the sector. The policy
gives detailed guidelines to enable the Bank to increase the outreach
by financing large number of SHGs/JLGs in a cost effective manner and
supplement the efforts of the branches in financing SHGs/JLGs and
enabling financial inclusion. The policy will also act as a precaution
to pursue caution while funding micro finance institution (MFIs/NGOs)
by adhering to the norms for funding.
Interest rate and charges on Bill Discounting under Inland Letter of
Credit Scheme have been revised in line with the market condition to
make the products the best in the market and to maintain the
profitability.
The Policy on valuation of properties and empanelment of valuers has
been revised comprehensively in order to improve smooth and quick
delivery of credit and also to ensure speedy recovery of NPAs.
2.14 Introduction of Base Rate
The Bank has introduced Base Rate System effective on July 1, 2010, in
conformity with RBI guidelines. Base rate was set at 7.75% on date,
which has since been increased three times in tune with the market
conditions. The Base rate of the Bank stands at 9% as at 31st March
2011.
2.15 Treasury Operations
The Gross investments of the Bank stood at Rs.17,956 crore as on 31st
March 2011 as against Rs.15,881 crore as on 31st March 2010. The
revenue from investment operations (interest and dividend) for the year
was Rs.1,147 crore as against Rs.957 crore for the previous year. The
average yield on investments was at 6.82% during the year as compared
to 6.40% during the year ended 31st March 2010. The Bank earned a
profit of Rs.98 crore from treasury operations during the period under
report.
2.16 International Banking
The Banks total forex turnover during the year for merchant
transactions was Rs.16,746 crore compared to Rs.15,050 crore during the
previous year. Inter Bank turnover was higher at Rs.4,34,520 crore as
against Rs.3,66,210 crore during the previous year. The total profit
from forex
operations during the year was Rs. 40.29 crore as against Rs.39.99
crore as on 31st March 2010. The Export Finance extended by the Bank
stood at Rs. 1,101 crore, which was 15.13% higher over the level at the
end of the previous year.
Moneytrans E Remit a state of the art, technologically advanced Speed
Remittance Product developed in-house ensures speedy and safe
remittance from the Gulf countries. Moneytrans E Remit has been
extended to 27 of the 28 Exchange houses with which the bank has
drawing arrangements. Remittances through Moneytrans E Remit (including
credits through NEFT) numbered 32.73 lac aggregating to Rs. 14,207.69
crore during 2010-11 as against 24.51 lac and Rs. 9,892 crore
respectively during the previous year. The Bank continues to be the
leading Bank in Kerala both in terms of number and volume of
remittances.
Xpress Money, instant cash transfer arrangement with UAE Exchange and
Financial Services Limited operating through select branches has been
extended to branches in Thiruvananthapuram, Kottayam, Ernakulam and
Kozhikode Zone.
Other products like Xpress Remit, an online remittance facility from US
and UK and Viswa Yatra Foreign Travellers Card providing an alternative
to carrying foreign currency while travelling abroad continue to be
much favoured by the public in general
2.17 Cross Selling
The Bank has been constantly endeavouring to meet the requirements of
its customers by making available Life, Non life insurance products as
well as other non-banking investment products like Mutual Funds to its
customers.
Banks Cross Selling products include SBI Life Insurance CompanyÃs life
Insurance products, United India Insurance Companys Non Life (General
Insurance) products, SBIMFs Mutual fund products and SBI Cards Credit
cards which are being made available to the customers through the
branch network. With auto debit facility in place SIP mode of
investment in Mutual Funds is becoming popular amongst the Banks
customers. The Bank also has tie up arrangements with UTI Mutual Fund,
Sundaram Mutual Fund, Franklin Templeton and Tata Mutual fund houses.
As against Rs. 12.19 crore income earned during the year 2009-10 income
from the Cross Selling business during the current year has improved to
Rs. 20.57 crores, which represents a YOY growth of 68.74%.
SBI Life Insurance with a share of over 83% continues to be the major
contributor to Cross Selling Income followed by General Insurance and
Mutual Fund at 10% and 7% respectively.
Our Bank has a tie up with United India Insurance Company Limited for
marketing its Non life products through the branch network.
Unisuraksha, a personal accidental Death and Total Permanent disability
cover, Unihealth, a Health plan (Mediclaim) for resident account
holders of the Bank and NRI care, a health cum accident plan for NRI
customers of the Bank are some of the major non life products that are
available for the customers of the Bank
Unisuraksha, the Personal Accidental Death and Total Permanent
disability cover has gained wide acceptance. During the year under
consideration more than 45 families, most of being poor and needy have
benefited from these claims. Banks Health plan "Unihealth" a
co-branded product of the Bank and UIICO too is gaining acceptance
fast.
Among the Mutual fund products Systematic Investment Plans, [SIPS]
Fixed Maturity Plans [FMPs] debt and equity funds of SBIMF launched
from time to time are also marketed through the branches.
SBI credit cards are also being sold to the Banks customers through
its branch network. Platinum Credit cards for high value customers,
Secure Cards, SBI Gift Cards and VIshwa Yatra Cards for overseas
travellers are some of SBI Cards products being marketed by us. Auto
debit facility for SBI Credit Cards is expected to be in place soon and
this will give a boost to Credit Cards in the coming fiscal.
Bank has as on date 1,003 Certified Insurance facilitators and 751 AMFI
qualified employees, which form the Insurance and Mutual fund sales
force of the Bank. Plans have been drawn out to double these numbers in
2011-12.
2.18 Asset Quality
The Bank continued to give special focus to improving the quality of
Assets and containing NPAs. The percentage of Gross NPAs to Gross
Advances stood at 1.80% on 31st March 2011 with the Gross NPA level at
Rs. 835 crore. The percentage of Net NPA to Net Advances stood at
0.98% as on 31st March 2011 compared to 0.91%, a year ago.
Banks approach to Asset Management includes revival of viable sick
industrial units as an important strategy through appropriate
rehabilitation packages. Rehabilitation/ Restructuring packages are
under implementation in respect of 37 units with a total exposure (Fund
Based +Non Fund Based) of Rs.297.50 crore. Out of these 37 units,
10 units are under Corporate Debt Restructuring [CDR] scheme with
exposure of Rs.175.87 crore, 27 units under BIFR scheme with exposure
of Rs.121.63 crore. During the year, 12 accounts were referred to CDR
scheme for restructuring. Out of these 12 accounts, restructuring
packages for four accounts were approved, three accounts were withdrawn
from the CDR mechanism and the others are under process.
2.19 Government Business
The Bank conducts State Government Business in 108 branches in Kerala
and 2 branches in Tamil Nadu. Approval is awaited from Reserve Bank of
India for linking 10 more Non-Banking Treasuries to the branches in
Kerala. Further, 196 branches (136 branches in Kerala and 60 outside
branches) are authorized for Central Board of Direct Taxes (CBDT)
collection and 148 branches in Kerala are authorized for Central Board
of Excise and Customs (CBEC) collection. 314 Post Offices are having
drawing arrangements with the Bank and 43 Railway Stations have opened
accounts with the branches.
The e-payment facility launched by the Bank for payment of commercial
taxes for Kerala is well received by the Business Community. As many as
6.82 lac transactions amounting to Rs. 6,245 crore were collected under
this Scheme. Proposal for introduction of e-payment of Motor Vehicle
Taxes in Kerala State is in the final stages of implementation and will
be launched from the beginning of the next financial year 2011-12.
E-payment facility for Karnataka Commercial Taxes through the Bank is
also expected to be introduced shortly.
The Bank became the exclusive Banker to 14 FRIENDS Centres promoted by
IT Mission, Kerala, with 4 more FRIENDS Centres linked to the Bank
during 2010-11. Around 2000 Akshaya Centres under IT Mission are also
linked with the Bank. The number of Currency Chests maintained by the
Bank stood at 127 after 5 unviable Currency Chests were surrendered to
Reserve Bank of India during the year. The Bank successfully
operationalised the Electronic Data Interchange (EDI) Project at the
new Thiruvananthapuram International Airport Cargo Complex. The Bank
is one among the 16 banks selected for introduction of e-payment of
Customs on all-India basis, scheduled for FY 2011-12. The Bank has
maintained a market share of 70% of Kerala State Government
transactions during the financial year. Angamally Branch has been
authorised by CBEC for collection of Customs Duty at Cochin
International Airport, which was functioning as a sub-agency of State
Bank of India since 1999.
2.20 Electronic Payment Systems
There was greater focus on migrating more remittance transactions to
electronic modes. The Payment & Settlement Group functioning at
Belapur, Mumbai attends to electronic remittances like RTGS/NEFT and
GRPT transactions and the funds settlements between the bank and other
Banks/ RBI. There has been increased awareness among the customers to
use electronic mode of remittances. The total number of outward
electronic messages (RTGS/NEFT/GRPT) emanating from the branches has
increased from 12.18 lac during FY 2009- 10 to 22.80 lac in FY 2010-11,
registering an increase of 87% during the year.
3. Marketing Initiatives and Development of New Products
3.1 Bank has been nominated as authorised Bank for import of Gold by
Reserve Bank of India. This is a pre-requisite for carrying out retail
sale of Gold coin through the branches in tie up with State Bank of
India. The sale of Gold Coins through the branches will be
operationalised in the first quarter of financial year 2011-12.
3.2 As in the earlier years, the Bank continued its proven strategy of
customer acquisition and retention and broadening the customer base by
conducting massive marketing campaigns. These campaigns contributed to
increase the business level significantly. ÃAishwaryotsav 2010, the
retail loan campaign and ÃSBT Mahotsav 2010, the Deposit Mobilization
campaign conducted during the financial year 2010-11 were very
successful and helped the Bank to reach out to the mass of the
population in the country, especially in the State of Kerala.
3.3 Aishwaryotsav 2010, the retail loan campaign for the intensive
marketing of Home Loans and Car Loans covered the whole festival season
of Kerala State and other parts of the country. The campaign commenced
just before ONAM, the National Festival of Kerala, run through
Dusserah, Deepavali, Ramzan, Bakrid and Christmas and continued till
the New Year Eve (from 01st August to 31st December 2010). Against the
lending target of Rs.800 Crore the campaign recorded sanctions
aggregating Rs. 1,706 Crore from 11,113 Car Loans and 11,170 Housing
Loans.
3.4 The intensive Deposit Mobilization Campaign, SBT Mahotsav 2010, was
conducted during October to December 2010. Against a targeted growth of
Rs. 2,000 crore in Aggregate Deposits, the campaign saw opening of new
accounts aggregating Rs. 2,950 crore including
1,13,288 new SB Accounts. Free Unisuraksha Accident Insurance coverage
was offered to new SB Account customers who opened accounts with an
initial Deposit of Rs.5,000/-.
3.5 A special Current Account campaign for the 3 special Current
Accounts namely "SBT Biz, SBT Easy Biz and SBT Easy Biz Plus"accounts
were conducted from 10th February 2011 to 31st March 2011, to enhance
the share of Current Accounts in Deposit mix, through selected
branches.
3.6 Project Finance Unit was set up in the Bank to develop project
appraisal skills in-house, and also to avoid good proposals go past the
bank for want of Techno Economic Viability (TEV) study. Bank undertakes
Technical and Financial appraisal of small and medium sized projects,
which have not been vetted by agencies of national/ international
repute. During this year TEV study conducted on 37 projects, having
total project cost of Rs. 2,093 crore.
3.7 Other Marketing initiatives included:
- Assisting Customers for obtaining of PAN Card by tie-up arrangement
with UTI Technology Services Ltd. [UTITSL], the official agent for
issuing Permanent Account Number. The Branches collect applications for
PAN Card from customers and forward them to the Central Processing Unit
of the Company at Chennai. Approximately 40,000 customers have
utilised this facility so far.
- Arrangements were made with telecom companies - BSNL, Airtel,
Vodafone and Idea to provide Ring Back Tone using the Banks ÃSignature
Tune in the Landlines and Mobile connections of the Bank for creating
a new identity and image for the institution.
- As a step to reach out to the younger generation of the Society,
Appreciation Letters were sent to 7,000 top ranking Students in the
Common entrance test conducted by Government of Kerala with an
invitation to open savings bank account with the Bank. Most of the
students responded positively and the initiative served to broaden the
customer base.
- National/International days of importance were celebrated for
reaching out to different sections of the Society as a tool of customer
acquisition and for better visibility. During such observations,
selected products, which are appropriate for the occasion, were
highlighted through advertisements in Newspapers.
3.8 Many New Products and services were designed and offered to ensure
total satisfaction to the customer by anticipating customer needs and
after collecting market
intelligence on the Banks products as well as analyzing the offerings
by the competitors. The new customer friendly products were added to
the impressive basket of the Banks products and schemes during the
year include:
- Scheme for financing against the pledge of warehouse receipts issued
by private warehouses to individual farmers, traders, commission
agents, partnership firms, proprietorship concerns who have stored
their agricultural commodities in the private warehouses was introduced
during the year.
- Dairy Entrepreneurship Development Scheme (DEDS), in association with
NABARD, a venture capital scheme with capital subsidy (25%). The scheme
covers all districts in the state. This will help in mitigating the
shortage of milk in Kerala.
- Finance for Solar Home Lighting System, launched under DRI scheme.
Solar products provide reliable and cost effective electricity. There
is a wide range of solar products in the market viz. lamps, portable
lanterns, road lighting luminaries, single-phase energy meters etc.
which are clean, reliable, noise free and pollution free, and free from
electric tariff volatility.
- SBT Gold Loan Premium, a new gold loan product aimed at premium
customers. The minimum and maximum amount of loan under the product is
Rs.25,000/- and Rs.10 lac respectively for a period of 6 months.
- Banking Arrangement with the Kerala Non-Resident Keralites Welfare
Board [KNRWB] for the members of the Board, who are NRIs or Ex-NRIs
to remit their monthly contribution to the scheme through the Banks
Branches.
- SBT School Special, a simplified loan product introduced for
educational institutions which fall under service segment as per the
classification under MSMED Act, for providing financial support to
Education sector.
3.9 Several modifications/improvements have been effected in the
existing schemes to meet customer expectations and to facilitate better
customer service as shown hereunder:-
- The eligible finance for Home Decor Scheme has been enhanced to 25%
of Housing loan amount or Rs. 5 lac whichever is less (from 15% of
Housing loan or Rs.1.5 lac whichever is less).
- The Diamond Jubilee Open Term Loan has been simplified to enable SME
manufacturing and service segment units with ratings of SB 7 and above
eligible
for loan. Maximum loan for manufacturing segment is enhanced to Rs. 250
lac and for Service sector Rs. 100
lac.
- ÃSME Easy Loan scheme, has been liberalised to enable Professional &
Self Employed Individuals and Smal Business Enterprises also eligible
for loan under the scheme. The maximum loan amount is enhanced to
Rs.300 lac for Small Enterprises and Rs.500 lac for Medium Enterprises.
The eligibility for Micro Enterprises is however, restricted to Rs.25
lakh.
- Car Loan to MSME units: MSME Current Account holders of the Bank or
their family members are also eligible for car loan under the modified
scheme. Margin has been stipulated uniformly at 20% of the invoice
price.
- The maximum loan limit under Prasanthi Elite Loan for pensioners
enhanced to 18 months net pension to pensioners with a maximum of Rs.5
lac. The limit for family pensioners is 15 months of net family pension
with ceiling of Rs.1.5 lac and the repayment period fixed at 60 months
or completion of 75 years of age whichever comes earlier.
- The "Rent Plus" scheme variant introduced at reduced interest rate
for limits sanctioned upto 31st March 2011, to select group of
customers who rented out their building to Banks and MNCs, in order to
canvass more quality loans.
4. Customer service
4.1 Customer service in the Bank is accorded top priority and every
endeavour is made to improve the quality of service to the customers
and redress their grievances. All efforts are made to improve the
customer satisfaction by offering suitable products enhanced by quality
value-added services.
4.2 A well-defined and full-fledged customer grievances redressal
mechanism is functioning in the Bank. Reports on the number of
complaints received / disposed / pending in the Bank as a whole are
submitted to the Banks Board and the Apex Level Customer Service
Committee at Head Office. The Standing Committee on Customer Service
constituted pursuant to Tarapore Committee recommendations also reviews
the quality of customer service extended in the Bank at regular
intervals.
4.3 An official of the rank of Assistant General Manager is placed as
head of the Customer Service Department to give greater focus on
complaints received from Customers and speedy redressal of the
complaints. The Department
acts as a coordinator between the branch and the complainant and
ensures quick disposal of complaints.
4.4 As a proactive measure, apart from acknowledging each complaint on
the day on which it is received, senior officials at Customer Service
Department endeavour to call the complainant personally wherever
contact numbers are available. Many of the complaints get resolved on
the same day itself. The average time taken for disposal of complaints
at Head Office/Zonal Office level has been reduced significantly. The
feedback being received from customers has been encouraging.
An SMS based facility (SMS SBT CARE) has been put in place whereby
customers can send their grievances from anywhere by SMS to 98471 98471
from their mobile.
4.5 The updated version of Citizens Charter is made available in
booklet form and also in the Banks website which provides customers
and the general public with the key information regarding the common
areas of customer banker relationship. Similarly the details of service
charges levied by the Bank are also published in the Banks website for
the information of the public.
4.6 Progress of implementation of Citizens Charters and the Fair
Practices Code are also being monitored at Head Office and Zonal Office
level customer Service Committee meetings. Inspecting officials are
also examining the quality of customer service rendered at the
branches.
4.7 Bank has also established a Call Centre with Toll free No.
1800425-5566 enabling the customers/ general public to clear their
doubts/ complaints expeditiously. Adequate publicity of the aforesaid
facilities available to public is in place both through print and
visual media.
4.8 "Customer Day" is observed at all the offices of the Bank on the
15th of every month to enable the customers to voice their grievances
or offer suggestions for the betterment of customer service.
4.9 Banking Codes & Standards Board of India (BCSBI) - The Bank is a
member of the Banking Codes & Standards Board of India, which is a
registered society, sponsored by Reserve Bank of India. The Code of
Banks Commitment to Customers is available on the Banks website. This
is a voluntary Code, which sets minimum standards of banking practices.
The Deputy General Manager (Compliance) is the designated Principal
Code Compliance Officer at Head Office. The relative Annual Statement
of Compliance has also been submitted by the Bank to the BCSBI.
5. NRI Services
The Bank, the pioneer and market leader in NRI business in Kerala, has
been continuously improving its products and services to NRIs. All
technology based products and services have been made available to NRIs
also, so that they can bank with their most preferred bank from any
corner of the globe.
The Representative Office in Dubai, opened in August 2008, is acting as
an interface between branches and NRIs to meet their banking needs.
Banks extended arms are available in UAE and Sultanate of Oman, the
two vibrant and developing countries in the Gulf Cooperation Council
(GCC), through its managed Exchange companies, viz., City Exchange LLC
in UAE and Global Money Exchange in Sultanate of Oman. Bank has made
available Relationship Managers at the door steps of NRIs in UAE,
Qatar, Oman, and Bahrain.
A team headed by Chief General Manager participated in the Biennial
Convention of Federation of Keralite Associations in North America
(FOKANA) at Albeny, USA during July 2010, which was well accepted by
American Malayalees and paved way for establishing several new
contacts.
The recently developed product, NRI PLATINUM account, has been well
accepted by high net worth NRIs, as the product provides special
identity to customers and a host of services free of cost. Personalized
multicity cheque payable at all branches at par and SBT Gold Card
(VISA) that provides complimentary insurance is the special features of
the product.
Premium Rupee Account is a special product designed to provide NRIs the
twin benefit of interest plus premium in the foreign exchange market.
NRE funds invested in this product are absolutely tax-free and retain
NRI status for the funds on maturity. The benefit derived from the
scheme works out to 8-9% per annum, at present, depending on foreign
exchange market conditions.
All transactions of Rs. 5,000 and above are acknowledged through SMS to
NRIs. Internet banking facility offered by the bank enables the NRIs to
effect transfer of funds within the Bank as well as to other banks in
India and also third party transfers, carry out their standing
instructions for various payments, rail bookings, fee payments, and
also online shopping and opening Term Deposits and Recurring Deposits.
It also enables them to view their accounts and transactions.
NRI News Channel, a monthly newsletter containing important news items
and information regarding products and services, interest rates etc.
useful to NRIs, is circulated
to all NRI constituents through the branches by email.
NRE account opening for new customers sourced by Exchange Companies are
now centralized at the Liability Central Processing Centre [LCPC]
functioning at Thiruvananthapuram, which facilitates immediate opening
of accounts and issuance of Multicity chequebooks and ATM Card to NRIs.
Welcome Kit containing welcome letter, non-personalised chequebook, ATM
card and brochures on various products and services are provided with
Representative Office, Exchange Companies and Relationship Managers to
facilitate issuance to NRIs who approach them for opening accounts. The
account is subsequently activated to enable them to carry out the
transactions.
The four NRI Branches at Attingal, Mavelikkara, Thiruvalla and
Ernakulam and specialized NRI Cells in more than 50 branches in NRI
centres provide very specialized and personalized services to the NRIs.
6. Lead Bank Scheme
6.1 The Bank is spearheading the Lead Bank activities in three
districts of Kerala State viz. Alappuzha, Kottayam and Pathanamthitta.
The District Credit Plans for the year 2010-11 was launched in the
Banks lead districts during March 2010 with 58 % increase in outlay
over the previous year.
6.2 Considering the importance of District Level Review meetings of
Lead Banks, academicians from various fields and successful
entrepreneurs were invited as per the recommendation of the Thorat
committee on Lead Bank Scheme. The Lead Banks also initiated several
innovative activities like outreach programme in unbanked areas, where
Banking Ombudsman RBI attended. Kissan Credit Card beneficiaries
meetings, Counselling for students seeking educational loans, Financial
Literacy seminars and EDPs for different target groups were also
arranged in the lead districts.
6.3 The total outlay by all financial institutions in the three Lead
Districts for 2010-11 was Rs. 13,801.79 crore of which the Banks share
was Rs. 3,270.93 crore (23.70%). The disbursement under Priority
Sector Advances in the districts during the year 2010-11 by all
financial institutions is Rs. 10,206.66 crore of which the Banks share
is Rs. 2,171.82 crore, which constitutes 21.22% of the outlay.
7. Financial Inclusion
7.1 Financial Inclusion is delivery of banking services at an
affordable cost to the vast sections of the disadvantaged and
low-income groups. The Bank has opened over One
Million No-frills accounts (Janapriya accounts). 89% of the 1.97 lac
No-frills accounts were opened in the state of Kerala. Joint Liability
Group (JLG) schemes, Biometric Smart Card Project, General Credit Cards
to the Janapriya Account Holders etc. are other initiatives in this
direction.
7.2 In conformity with the directions of Reserve Bank of India, the
Bank has formulated a Financial Inclusion Plan, which has been rolled
out during the year and is, expected to be streamlined by the next two
years. This plan for Financial Inclusion will be an integral part of
the business plan of the Bank.
7.3 The following steps/activities have been undertaken by the Bank as
a part of fulfilling the Banks commitment to Financial Inclusion.
- 29 villages having a population over 2,000 have been allocated to the
Bank by SLBC Kerala for providing basic banking services through BF/BC
route or by opening branches.
- Bank has decided to provide Basic banking in these villages through
the BF/BC route except in Perumanna village in Calicut district, where
a new branch was opened on 30th March 2011.
- An MoU has been signed between "Kudumbashree" and Bank for engaging
"Kudumbashree as Banking Correspondents for the Bank in the state of
Kerala.
- An agreement has been signed between Bank and M/s. Bartronics India
Limited, Hyderabad for engaging them as Technical Service Providers for
Smart Cards and Financial Inclusion Project of the Bank.
- In Tamilnadu the Bank has been allocated 14 villages for providing
basic Banking Services, which will also be covered through the BF/BC
route.
- The Bank has set up Customer Service Points in all the 28 villages
allocated to the Bank in Kerala and enrolments have started in 16
villages. The services were flagged off on 22nd February 2011 by the
Managing Director and Banking Ombudsman, RBI in a very colourful
function at Veeranakavu village in Thiruvananthapuram district and
given much publicity by the print and electronic media.
- The products offered under the Product name "SBT- SAHAYA HASTHAM"
consists of an SB Account (Zero balance), A Recurring Deposit account
and an Overdraft (General Credit Card) for Maximum of Rs. 10,000/- for
the rural poor.
- Two days training was imparted to 27 Customer Service Providers and
their standbys. One day training was also imparted to Branch Managers
of 25 Link Branches in Kerala.
- Trusts have been formed for 3 Financial Literacy and Credit
Counselling Centres in the 3 districts where Bank has lead bank
responsibility ie., Alappuzha, Kottayam and Pathanamthitta districts in
Kerala
- An MoU has been signed between Bank and Unique Identification
Authority of India (UIDAI) for the Bank to function as Registrars for
UID Project of the Government of India on 23rd November 2010.
- M/s Tera Software Ltd, Hyderabad has been selected as the Enrolment
Agency for the Banks Unique Identification Project in Kerala.
7.4 Rural Self-Employment Training Institutes (RSETIs)
RSETIs have been started by the Bank in Wayanad, Pathanamthitta,
Alappuzha and Kottayam for providing skill upgradation training to the
rural youth with focus on BPL category. The 4 institutes had trained
9847 persons and 95% of the people are women beneficiaries, majority of
the trainees are reported to be successful in starting self-employment
ventures. The important courses includes beautician, electrical wiring,
ornaments manufacturing, accounting, Computer hardware servicing,
aluminium fabrication, kitchen gardening, mushroom cultivation with
vegetable growing and off-site programmes like rubber tapping.
7.5 Financial Literacy And Credit Counselling Centre (FLCCs)
FLCC has been established in Banks Lead Districts, along with RSETIs
for providing financial literacy & credit counselling. Their major
action point includes popularization of financial literacy activities,
arranging seminars for counselling students aspiring for higher
education.
8. Support to disadvantaged segments
8.1 Assistance to Scheduled Caste / Scheduled Tribes [SC/ST]
The Bank continues to give due importance in extending financial
assistance to meet the credit requirements of the Scheduled Caste /
Scheduled Tribes [SC/ST] borrowers. The advance to SC/ST borrowers
under Priority sector aggregated to Rs. 1,991 crore. This works out to
11.47% of the banks Priority sector Advances, compared to 0.77% of the
banks Priority sector lending at the end of the previous year. The Non
Performing Asset position in respect of SC/ST borrowers under Priority
Sector stood at about 3% of the outstanding as furnished above.
8.2 Minority Communities [MC] / Other Backward Communities [OBC] /
Physically Handicapped [PH] / Ex Servicemen [EX-SER] Cell
The Bank has designated an Officer of General Manager rank as Chief
Liaison Officer for OBC Cell and PH/Ex- Servicemen Cell. The Bank has
also designated an Officer of Deputy General Manager rank as Chief
Liaison Officer for Minority Community Cell assisted by Liaison
Officers at Head Office, five Zonal offices, and two Regional Offices
to protect the interests of the employees belonging to the respective
sections.
The Cell ensures:
- Compliance by the Bank with orders and instructions pertaining to the
reservation of vacancies in favour of Ex-Servicemen and Physically
handicapped in the matter of recruitment/ promotions and other service
benefits.
- Compliance by the Bank with orders and instructions pertaining to the
reservation of vacancies in favour of MC/OBC in the matter of
recruitment and other service benefits.
- The Bank takes appropriate steps to provide all help and co-operation
to the Backward classes Development Corporation.
8.3 Assistance to Minority Communities [MC]
The Bank continues to give due importance in extending financial
assistance to meet the credit requirements of the MC borrowers. The
advance to MC borrowers under Priority sector aggregated to Rs. 5,908
crore. This works out to 34% of the Banks Priority sector Advances for
MC, compared to 22% of the Banks Priority sector lending as at the end
of the previous year.
9. Information Technology - Technology Upgradation & IT Initiatives
9.1 With Core Banking Solution (CBS) implemented across all the
branches of the bank including the newly opened branches, ITS
department is playing a key role in facilitating corporate innovation
and growth. The Core Banking System has provided the Bank with
state-of-the-art software that has greatly enhanced the efficiency of
customer services, speeded up data processing capabilities,
strengthened MIS, enabled efficient Asset Liability Management, reduced
transaction cost and offered alternate channels to customers for
transacting their business. The Corporate Data Centre (CDC) is at
Belapur in Navi Mumbai. The Core system is a product-based system
whereby new schemes of the bank can be introduced easily with global
parameter setting
at CDC level. Global setting of parameters of various products, both
deposits and loans, are done at CDC. The capacity of the servers and
other equipments, and other performance parameters are periodically
reviewed and upgradation / addition of new equipment is arranged as and
when felt necessary.
9.2 Alternative Delivery Channels: The CBS facilitates effective
implementation of Alternative Channels like Automated Teller Machines
[ATMs], Internet Banking, and Mobile Banking for extending products and
services to the customers. The ATM network was beefed up by adding more
ATMs. The Internet Banking facility is recognised to be the best among
its class. Mobile Banking Service, which was rolled out last year, is
getting acceptance from customers.
9.3 ATMs: The Bank has a network of 833 ATMs, including 244 offsite
ATMs. The network of 699 ATMs in Kerala is the largest in the state.
All of the ATMs are networked with State Bank Group ATMs numbering over
25,000.
07 new ATMs and 40 Multi Function Kiosks (MFK) were installed during
the year. The Banks ATM-cum-Debit cards are accepted in all outlets
having Master Card logo. Several facilities such as Visa Money Transfer
(VMT), Money Send, SBI Credit Card payment, SBI Life Premium payment,
Mobile recharge, Donation, Fee payment, JMET / GATE Application Fee
payment, Mobile Banking registration, Cheque Book order etc. have also
been enabled in the ATMs.
9.4 The Bank has a card base of 44.44 lac as on 31st March 2011, which
translates into an increase of 20.92% over the card base as at the end
of the previous year.
9.5 Internet Banking - The Bank offers a convenient and efficient
Internet Banking (INB) facility through 256 bit EVSSL (Extended
Validation Secured Socket Layer) encryption. This provides more
security to Internet Banking customers against phishing / hacking
threats.
9.6 Major initiatives in Internet Banking during the year are as
follows:
- Site-to-site integration was done in March 2011, with NSDL, to enable
the customers to view online, their Income Tax Annual Credit statement
(Form 26AS) for the current assessment year and past five assessment
years.
- Site-to-site integration was done in March 2011, with the University
of Kerala, to facilitate e-payment of examination fees, for students
and colleges. This procedure is the first of its kind in Kerala.
- e-TDR, e-STDR, and e-RD facilities which enables the customers to
open fixed deposits and recurring deposits without branch intervention,
were rolled out during the year.
- e-Payment of Kerala Water Authority bills was introduced in August
2010.
- Online Bill Payment facility for customer who does not have Internet
Banking Facility was introduced in July 2010. The Branch INB officer
can register the biller on behalf of the customer and initiate Autopay
facility for payment of utility bills
9.7 Anti phishing measures: Several anti-phishing steps have been taken
to protect the interest of the customers including:
- Introduction of mandatory high security SMS passwords for completing
all online transactions above Rs.10,000/- per day, other than to own
accounts.
- A cooling period of 4 to 16 hours has been introduced for adding
newly created beneficiary. A message will be sent to customers mobile
phone regarding creation of new beneficiary, as an alert against
probable phishing attempt.
- A new facility called "Limited transaction and View" has been
introduced, wherein the transaction rights of the customer can be
restricted to own accounts opened under the same CIF (Customer
Information File).
- A new option has been enabled where the customer can login to the
site and register for SMS alerts, which will be updated in CBS.
- Mobile number has been made mandatory both in CIF and temporary
address for INB registration.
9.8 Mobile Banking Service (MBS)
Mobile banking provides the customers with another safe, secure, fast
and convenient channel for banking transactions. The services provided
include enquiry services, funds transfer, demat account services, bills
payment mobile top up, m-commerce etc. The daily limit for MBS
transaction is Rs. 50,000/- for aggregate of funds transfer &
transactions involving purchase of goods & services, with an overall
calendar month limit of Rs. 2,50,000/-. 32,519 new Mobile Banking
registrations were activated during the year.
Our customers are having the option of using Mobile Banking Service
over any of the following four channels viz.
a) Application based b) WAP based c) USSD based d) SMS based.
9.9 A slew of value added applications were developed to make the
system more useful to the customers. These include:
- ATM Complaint Management System software: An in house web based
application for speedier ATM complaint resolution was implemented.
Branches can directly lodge the ATM / POS (Point of Sale) related
failed transaction complaints through a simple data entry menu provided
in the software.
- Interface for ascertaining the status of Online Loan Applications
from the Homepage: Applicants who have applied for loan online can
verify the status of their loan application from the website.
- Collection of Customs Duty through e-payment - Software for
electronic Data submission: A new interface Package has been developed
for Dwarka Branch, which is identified as the e-FPB for Customs duty
collection through Internet The package helps to generate various
electronic data required for the EASeR-C (Electronic Accounting System
for e-Receipts in Customs) system conceived by CBEC
- Customization of "Paysys" application for Higher Education
Department, Kerala State:
"Paysys", a web based package which enables Corporates to make bulk
payments to their customers through core banking and NEFT, was
customized for use by the Higher Education Department for distribution
of scholarship to students through Thiruvananthapuram Main and Fort
branches.
10. Business Process Re-Engineering (BPR) Initiatives
10.1 With the objective of improving performance and enhancing customer
service to global standards, the Bank has implemented various BPR
initiatives by leveraging on its core competencies, state of the art
technology and redesigned operating architecture.
10.2 Centralised Loan Processing Centres for appraisal, sanction and
disbursement of loans in Retail, Small & Medium Enterprises segments
have been set up at 8 major centres. This has enabled the Bank to
reduce the response time in these centres, thereby, improving the level
of customer satisfaction. It has also enabled standardization of
internal processes leading to improved quality of assets and speeding
the delivery time. Banks Rural Central Processing Centre is set up at
Palakkad covering all the branches in the District, which has improved
the quality of lending at the Centre.
10.3 Multi Product Sales Teams have been established at 7 of the loan
CPC centres to target specific markets, for canvassing business.
Stressed Assets Resolution Centres (SARCs) have been rolled out at 7
centres for more focused attention on recovery, thereby releasing funds
blocked in non-performing assets which can then be utilised for more
productive purposes.
10.4 Pension processing has been centralized at the Centralised Pension
Processing Centre set up at Thiruvananthapuram. This Centre covers all
pensioners drawing pension from all the branches. The Centre ensures
accuracy in pension calculations, timely disbursement of pension and
quick settlement of transactions.
10.5 As a forerunner to setting up Centralised Clearing Processing
Centres at MICR centres, the outward clearing work is centralized at
the service branches at the MICR centres of Thiruvananthapuram,
Ernakulam, and Kozhikode and Bengaluru. With the introduction of this
initiative, the Bank is able to afford credit to the accounts in
respect of local clearing instruments on the day following the day of
deposit of the cheque.
10.6 Trade Finance Central Processing Centres, aimed at ensuring
efficient and uniform handling of transactions related to inland and
foreign trade and Bank Guarantees by experienced operating personnel,
have been rolled out at Ernakulam and Chennai.
10.7 A Liability Central Processing Centre has been established in
Thiruvananthapuram to provide back office support to branches, in
opening and servicing of liability accounts such as Savings Bank and
Current Deposit Accounts. The Centre provides pre-generated Welcome
Kits to the linked branches consisting of ATM cards and cheque books.
This facilitates the customers to operate the accounts immediately
after opening the account.
10.8 Drop Boxes have been provided at the branches for hassle free and
safe handling of instruments deposited. Grahak Mitras have been
positioned at select branches to proactively guide the customers in
conducting transactions. Relationship Managers have been posted at
select branches to extend personalized services to the customers.
10.9 The above major BPR initiatives implemented by the Bank are
contributing to improvement of the overall efficiency, service
delivery, customers convenience and business growth
11. Internal Control Systems & Supervision
11.1 Integrated Risk Management
The Banks risk management philosophy is based on a clear and timely
identification of various types of risks, accurate risk assessment and
measurement procedures and continuous monitoring. The risk management
architecture of the Bank consists of the Board of Directors at the top
having overall responsibility to implement Risk Management System in
the Bank. Subordinate to the Board, Risk Management Committee of the
Board has been constituted to have an oversight on all the risks
assumed by the Bank and to decide appropriate policy and strategy for
risk management. In order to have focused attention on various risks,
Credit Risk Management Committee (CRMC), Market Risk Management
Committee (MRMC) and Operational Risk Management Committee (ORMC) are
in place to manage Credit Risk, Market Risk and Operational Risk
respectively at the granular level. The General Manager (P&D) is
designated as the Chief Risk Officer (CRO). The Integrated Risk
Management Department headed by Deputy General Manager is responsible
for the overall daily management of risks at micro level.
Management of all the risks is governed by various policies such as
Credit Risk Management Policy, Loan Policy, Market Risk Management
Policy, Investment Policy, Operational Risk Management Policy, etc. As
part of credit risk management, the Bank has a structured and
standardised credit approval process, which includes comprehensive
credit rating of proposals. The market risk is largely managed through
adherence to various position limits, stop loss limits, Value at Risk
[VaR] limits etc. The operational risk management framework comprises
risk and controls self- assessment (RCSA) and identification,
measurement and monitoring of various losses experienced by the Bank
and mitigation of risks. The risk management objectives will be
accomplished by leveraging technology.
The Bank is closely monitoring the roadmap for migration to advanced
approaches of Basel-II with respect to all risks by striving to create
sufficient and accurate database and ensuring involvement and awareness
among all the staff members of the Bank.
During the financial year 2010-11, the following major risk management
initiatives were taken:
- New Credit Rating models were introduced for NBFCs (Non Banking
Financial Companies) and infrastructure
projects.
- Retail Pool Scoring Models were introduced for personal loans,
housing loans, education loans, car loans and two wheeler loans.
- Credit Rating models for trading and manufacturing sector were
modified.
- The Bank started computing Value at Risk for all investments in
trading book as part of risk management.
- As part of spreading awareness and risk management culture all over
the Bank, during the quarter October- December 2010, officials from
risk management department conducted daylong workshops for the
Controllers and the AGMs and Chief Managers heading branches in
Thiruvananthapuram, Ernakulum and Kottayam zones and all Branch
Managers and Controllers in Mumbai and Delhi regions.
11.2 Asset Liability Management
The Asset Liability Management System implemented effective from 1st
April 1999 is functioning as per the guidelines prescribed by Reserve
Bank of India. The Asset Liability Management Committee (ALCO), headed
by Managing Director, meets regularly.
Liquidity and Interest Rate Risks are identified, measured and
monitored by ALM Section through Duration Gap Analysis, Stress Testing
on Liquidity and Interest Rate Risks etc. and put up to ALCO for
discussion and decision making. ALCO also discusses in detail other
statements of Structural Liquidity & Interest Rate Sensitivity, Short
Term Dynamic Liquidity, Quarterly Review of Contingency Funding Plan,
etc.
The ALM Section prepares the statements of Structural Liquidity &
Interest Rate Sensitivity and Short Term Dynamic Liquidity which helps
to monitor the liquidity levels vis-a-vis the benchmark levels fixed by
RBI / as per Banks ALM Policy and proposes corrective action wherever
found necessary. Various interest rate revisions including the
revisions of the Benchmark Prime Lending Rate (BPLR) and Base Rate (BR)
of the Bank are discussed and decided by the ALCO.
The ALCO also discusses the current financial position of the country
on an ongoing basis. The changes in the market are monitored
continuously and decision support papers on the current economic
developments are put up to the Top Management.
11.3 Inspection and Supervision
The Bank has put in place an effective institutional mechanism for Risk
Based Supervision through RBS Cell in Inspection Department. As
envisaged by the regulator, the Bank introduced Risk Focused Internal
Audit (RFIA) under RBS w.e.f 1st April 2003, where business parameters
have been de-linked from the Risk Parameters. With effect from 1st
April 2010, score for Business Parameters has been taken out of RFIA
In addition to the regular internal inspection, IS Audit, Compliance
Audit, Surprise Inspection, System Audit of Zonal Offices and Head
Office departments, etc. are conducted by the Inspection Department.
Following the migration to the Core Banking System, RFIA was revamped
by way of revision in Audit Report Formats, rating mechanism, grouping
of branches, sampling norms and periodicity of Inspection. The
Information System Audit (IS Audit) cell was formed within the
Inspection Department
11.4 Credit Audit
The audit of high value credit accounts is undertaken by the Credit
Audit Department, with the aim of improving the asset quality of the
Bank. Accounts with total exposure of Rs. 2 crore and above are covered
under Credit Audit. The Department conducted audit of 1,077 accounts
during the year, covering the pre-sanction and post sanction aspects.
This includes 14 AUC accounts and 73 accounts with exposure below Rs. 2
crore and above Rs.1 crore on a random basis during the year.
With the integration of Credit Audit with Risk Focussed Internal Audit
(RFIA), the marks awarded by the credit auditor are normalized by the
internal auditors under Credit Risk Management, wherever necessary.
Monthly performance reports of the department are regularly submitted
to the Audit Committee of the Executives and the review reports are
being submitted to the Audit Committee of the Board at its next meeting
for information.
11.5 Inter-Office Reconciliation
As per RBI guidelines, all high value debit entries of value Rs.1 lac
and above and 99.99% of debit amount need to be reconciled within a
period of six months from the date of their origin. The Bank has
completed reconciliation of Inter-branch accounts up to 30th September
2010 achieving 100% reconciliation of debit entries. The Bank is
committed to perform better than the target set by RBI and shall aim at
reconciling all entries within three months of their origin.
11.6 Compliance
The Bank ensures that GOI and RBI directives/instructions received are
being complied with promptly. Quarterly review reports on the
compliance status and performance of the department are regularly
submitted to the Audit Committee of the Board for information.
11.7 KYC norms & AML/CFT measures
The Bank has put in place a Board approved revised policy and
procedural guidelines on Know Your Customer (KYC)/ Anti Money
Laundering (AML) /Combating of Financial Terrorism (CFT) measures in
line with the master policy and subsequent guidelines issued by Reserve
Bank of India. A dedicated KYC-AML Cell is functioning in the Head
Office to oversee the compliance of KYC/AML/CFT measures. Deputy
General Manager (Compliance) is the designated Principal Officer for
KYC/AML in the Bank.
Monitoring of transactions is carried out to submit the required
reports to Financial Intelligence Unit-India, (FIU- IND), as mandated
by Prevention of Money Laundering Act 2002. With a view to implementing
and supporting monitoring of transactions, the Bank has acquired
appropriate software, which is processing all transactions handled by
all branches of the Bank, on a day-to-day basis. Monthly Cash
Transaction Reports (CTRs) are being generated by the system along with
Suspicious Transaction alerts daily, for analysis by the KYC-AML Cell.
After due analysis, suspicious transactions are reported to FIU-IND
through STRs where ever necessary. Counterfeit Currency Reports (CCRs)
are also being submitted to FIU-IND as and when detected.
Data cleansing of the existing database of customers is now under
progress to update in the Core Banking System [CBS] all relevant
customer data. The progress in the implementation is being reported to
the Board periodically.
KYC/AML Cell is publishing a quarterly newsletter and maintaining a web
site to provide relevant and up to date information for Branches /
Administrative Offices.
Training on KYC / AML is being imparted on an ongoing basis in the
Bank. Staff awareness programmes are conducted regularly through
seminars on Zonal/ Regional Office levels, Learning Centers and branch
visits.
11.8 International Financial Reporting Standards (IFRS)
As per the Road Map laid down by Ministry of Finance, Government of
India ,all Scheduled Commercial Banks are to convert their opening
Balance Sheet as on April 1, 2013 in compliance with the Converged IFRS
(IND-AS). The
Bank being a member of State Bank Group will be taking a common group
approach on convergence to IFRS. The IFRS cell at Head Office
coordinates with relevant Departments for collection, compilation and
submission of data as required by the parent Bank (State Bank of India)
for preparation of Consolidated Financials by them under Converged
IFRS. The Bank shares a common IT platform with the State Bank of India
and any changes made in Core Banking System as per the requirement
under IFRS will also be available to the Bank. The IFRS Cell had
arranged a presentation on "Implementation of IFRS-Challenges for
Indian Banks" by Shri. P.R. Ravi Mohan, Chief General Manager, Reserve
Bank of India, to the Top Executives of the Bank to create awareness on
the challenges and issues for the Bank on transition to Converged
IFRS".
12. Security arrangements
12.1 The year under review was largely free from security incidents,
except for ten attempts / security incidents this year (compared to 8
last year). However there was one major incident where Rs. 1 Crore cash
was lost while in transit near Chennai. But the resultant loss was
contained at Rs. 1.24 lacs, as most of the stolen cash was recovered
soon after, thanks to quick action by the functionaries and police
authorities. There were seven theft attempts on ATMs, a minor fire
incident and minor attempts of break in on bank b
Mar 31, 2010
BANKÃS PERFORMANCE
2.1 Working Results and Operating Profit
Operating profit (after staff provisions) of the Bank for 2009-10 stood
at Rs.1,055.87 crore as against Rs.1,056.27 crore for the previous
year. Net Profit for the year stood at Rs.684.27 crore as compared to
Rs.607.84 crore in 2008-09. The Earnings per share (of Rs.10 face
value) improved from Rs.121.57 to Rs.136.85.
2.2 Dividend
The Bank declared a higher dividend of 160% to the shareholders,
entailing a total payout of Rs.93.60 crore, including dividend tax. The
Pay-out Ratio works out to 12.05% of the distributable profit
(excluding dividend tax).
2.3 Capital Augmentation & Capital Adequacy
The BankÃs capital funds improved from Rs.3,843.34 crore as at the end
of March 2009 to Rs.4,397.23 crore as at the end of March 2010. The
Bank has migrated to Basel-II framework with effect from 31st March
2008. The Capital Adequacy Ratio under Basel II stood at 13.74% in
March 10 as compared to 14.03% in March 09 against a minimum of 9%
stipulated by RBI. The Tier-I CRAR on this date is 9.24% as against
8.59% as at the end of the previous year.
2.4 Deposits
Total deposits of the Bank registered a growth of 21.03%, reaching the
level of Rs.50,883 crore as on 31st March 2010 as against Rs.42,041
crore as on 31st March 2009. Personal Deposits grew by Rs.3,891 crore
to reach Rs.32,478 crore. As a consequence of economic slowdown
experienced in the Gulf countries, particularly the UAE, the NRE
Deposits were subdued during the year. Other factors like the low NRE
interest rates, unfavourable exchange rates, large scale conversion of
NRI deposits to domestic deposits and the lure of real estate sector
also contributed to the subdued trend. NRI deposits stood at Rs.10,837
crore and constituted 21.30% of the Total deposits of the Bank as on
31st March 2010.
2.5 Advances
Total advances of the Bank registered a growth of 17.97% during the
year and reached a level of Rs.38,461 crore as on 31st March 2010 as
against Rs.32,601 crore as on 31st March 2009. The main contributions
came from the C&I segment [growth of Rs.3,242 crore] and Personal
segment [growth of Rs.1,974 crore]. The BankÃs Retail lending stood at
Rs.19,688 crore and constituted 51.19% of the credit portfolio as at
the end of March 2010. The Credit Deposit Ratio of the Bank stood at
75.59% as on 31st March 2010 as against 77.54% as on 31st March 2009.
2.6 Business Turnover
The business turnover of the Bank stood at Rs.89,345 crore on 31st
March 2010, registering a growth of 19.70% from the level of Rs.74,642
crore as on 31st March 2009.
2.7 Market Share
BankÃs All India market share in deposits has improved from 1.08% on
27th March 2009 to 1.09% on 26th March 2010. In Advances the share has
improved from 1.15% to 1.18% in the same period. The Bank continued to
maintain its position as the premier bank in Kerala with a market share
in business of 22.56% as at December 2009 (as per latest published Data
by Reserve Bank of India as on date of this report) with 14.23% of the
total branch network in the state.
2.8 Priority Sector Lendings
The Bank continued to lay special emphasis on lending to the Priority
Sector in conformity with the national policies, expectations and
fulfillment of social objectives. BankÃs Priority Sector Lendings
increased from Rs.13,015 crore as at the end of March 2009 to Rs.14,091
crore as at the end of March 2010, recording a growth of Rs.1,076
crore. As at March 2010, Priority Sector advances [including eligible
investments] constituted 43.87% of the Adjusted Net Bank Credit [ANBC]
against the benchmark of 40%.
2.9 Agricultural and Rural Finance & Self Help Groups
Bank has disbursed an amount of Rs.3,083 crore under agriculture
segment as at the end of March 2010 against the Special Agricultural
Credit Plan target of Rs.3,000 crore. The level of lending to
Agriculture segment (including eligible investments) stood at Rs.3,414
crore as on 31st March 2010 which represents a growth of Rs.461 crore
over the previous year. BankÃs Agriculture Advances constitute 10.33%
of ANBC.
An intensive Agricultural lending campaign titled ÃSBT
HARITOTSAVAM-2009Ã was conducted during Jul-Sep 2009 with a lending
target of Rs.500 crore and 70,000 new accounts under various heads in
Agriculture segment. The campaign was a grand success achieving
disbursements aggregating Rs.502 crore under 94,000 new accounts.
During the current fiscal 28,804 Kisan Credit Cards (Working capital
facility to farmers) and 5,311 Kisan Gold Cards (Investment credit to
farmers) were issued with an outlay of funds of Rs.188 crore and Rs.172
crore respectively. In order to spread the message of lending to needy
farmers and to create awareness among the rural folk on the various
agricultural schemes being implemented in the Bank, a publicity van was
plied through the rural areas.
The security norms were relaxed for crop loans up to Rs.1 lac in
respect of farmers having legal ownership of agricultural land with
good repayment track record for last two years to improve the lending
to agriculture and bring maximum number of farmers to the bankÃs books.
Under the SGSY scheme, exemption in collateral security for individual
loans was raised from Rs.50,000/- to Rs.1 lac and Group loans from Rs.5
lac to Rs.10 lac respectively.
Bank has been committed in promoting Self Help Groups and financing
them through MFIs and NGOs. 78,677 groups were assisted so far with a
financial outlay of Rs.542 crore. Bank during the year financed 37
families with an outlay of funds of Rs.29 lac under Bhavansree Scheme
for constructing houses to members of Self Help Groups / Neighbourhood
groups living below poverty line.
With a view to pass on the benefit of technological advancement to the
farmers, a utility has been provided for registration of applications
on-line in respect of Agricultural advances for the use of general
public. The facility is available in the internet website of the Bank.
Farmersà Meets were conducted in most of the rural and semi-urban
branches with the involvement of NABARD officials and Government
Development Departmental functionaries to create awareness among the
public of the various agricultural products. The 210 Farmers Clubs
functioning in rural and semi urban areas act as catalyst in rural
transformation.
2.10 Lending to Micro, Small And Medium Enterprises (MSMEs)
Bank continued its active support to Micro, Small and Medium
Enterprises (MSMEs). Lending to this segment has recorded a growth of
Rs.885 crore to touch Rs.7,412 crore as on 31st March 2010.
The impact of the economic slowdown continued for the better part of
the year, though recovery was seen in many sectors. Manufacturing
units, especially under the traditional sectors like coir, cashew and
textiles, which have a high dependence on exports, continued to face
fewer orders. The relief measures introduced to assist the affected
units like providing of additional working capital, term loan,
relaxation in margin requirements, longer period for financing
receivables, reducing interest rates etc, helped many units survive the
difficult period. Some of the measures taken for assisting the units
affected by the economic slowdown include:
i. Additional working capital limits upto 20% of the existing working
capital facilities.
ii. New term loan facility for purchase of generator sets and also
machinery/tools/ other fixed assets.
iii. MSME Care Centres have been opened at all Zonal Offices and
Regional Offices at Mumbai and Delhi for rendering support to units.
Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) -
The Bank is a Member Lending Institution under the CGTMSE scheme for
providing collateral free loans. Workshops were conducted in all
Regions of the Bank to improve the awareness of the operating staff
about the scheme. Meetings of entrepreneurs were also conducted to
educate them about the scheme. So far the Bank has covered 5,914 loans
amounting to Rs.146 crore under the scheme.
2.10.4. The BankÃs Technical Consultancy Cell carried out 15 project
appraisals, rehabilitation studies and industry specific studies during
the year. 3 Entrepreneurship Development Programmes (EDPs) were
conducted by the Bank during the year.
2.11 Commercial & Institutional Finance
Despite the repercussions of global recession during the year, the Bank
performed well under the segment by tapping the potential in the market
and C&I advance of the Bank reached Rs.19,198 crore as on 31st March
2010. Almost half of BankÃs Total Advances comes under this segment,
which comprises financing Trade and Services, Industry, Infrastructure,
financing corporate customers and other institutions.
The existing loan policy of the Bank was revised comprehensively in
January 2010 by incorporating latest directives from RBI/ SBI. The
policy on valuation of properties, empanelment of valuers, etc has been
revised in order to improve smooth and quick delivery of credit.
Project Finance Unit
Project Finance Unit was formed in the Bank in order to develop project
appraisal skills in-house, and also to avoid good proposals go past the
Bank for want of Techno- economic viability (TEV) study. The unit
undertakes Technical and Financial appraisal of small and medium sized
projects, which have not been vetted by agencies of
national/international repute. During the period ending March 2010, PFU
has conducted TEV study on 43 projects worth Rs.1,125 crore.
2.12 Personal Finance
The Bank continued to be active in extending finance to Personal
Segment, mainly by way of Housing Loans, Car Loans and Educational
Loans. The Personal segment Advances went up to Rs.12,696 crore as at
March 2010 from Rs.10,722 crore as at the end of the previous year,
recording a growth of 18%. As many as 24,517 Housing Loans aggregating
Rs.2,330 crore were extended during the period under review, taking the
outstanding Housing Loan level to Rs.6,144 crore as at 31 March 2010,
an improvement of 26.47% over March 2009 level of Rs.4,858 crore.
Similarly 24,121 Car Loans aggregating Rs.741 crore were extended
during the same period, taking the outstanding Car Loan level to
Rs.1,324 crore as at 31 March 2010, which is higher by 35% over March
2009 level of Rs.984 crore.
As in the previous year, the Bank has granted the maximum number of
education loans in the State of Kerala. The Bank extended over 30% of
the total number of the loans sanctioned in Kerala. During the year
under report, Bank sanctioned 14,611 loans amounting to Rs.416 crore
for various courses to deserving students. The total amount outstanding
increased by over 24% to Rs.1,682 crore from Rs.1,354 crore last year.
2.13 Assistance to SC/ST/Minority Community (MC)
The Bank continues to give due importance in extending financial
assistance to meet the credit requirements of the SC/ST/MC borrowers.
The advance to SC and ST borrowers under priority sector aggregated
Rs.1,562 crore and Rs.3,123 crore for MC.
This works out to 10.77% of the BankÃs priority sector advances for
SC/ST and 21.53% of the BankÃs priority sector lending for MC. In the
previous year this was 8.48% for SC/ST and 17.55% for MC of the BankÃs
priority sector lending. The non-performing asset position in respect
of SC/ST borrowers under Priority Sector stood at 2.72% of the
outstanding.
2.14 Treasury and International Operations
BankÃs total forex turnover during the year for merchant transactions
(including exchange company transactions) was Rs.32,197 crore compared
to Rs.33,582 crore during the previous year. Inter bank turnover was
higher at Rs.3,66,209 crore as against Rs.2,12,102 crore during the
previous year. The total profit from forex operations during the year
was Rs.77.91 crore as against Rs.86.64 crore as on 31st March 2009.
The Investments of the Bank stood at Rs.16,024 crore as on 31st March
2010 as against Rs.13,232 crore as on 31st March 2009 and the average
investments during 2009-10 was Rs.14,960 crore as against Rs.11,922
crore during 2008-09. The revenue from investment operations (interest
and dividend) for the year was Rs.1,105 crore as against Rs.860 crore
for the previous year. The average yield on investments was at 6.92%
during the year as compared to 7.30% during the year ended 31st March
2009. The Bank earned a profit of Rs.78.99 crore from Treasury
Operations during the period under report.
2.15 Government Business
The Bank conducts Government business in 107 branches in Kerala and 2
branches in Tamil Nadu. Further, 196 branches (136 branches in Kerala
and 60 outside Kerala branches) collect Direct Taxes (CBDT) and 148
branches in Kerala collect Indirect Taxes (CBEC). Bank has launched
e-payment facility for Direct and Indirect taxes and Commercial Taxes
of Governments of Kerala and Maharashtra. As many as 2.62 lac
e-payments aggregating Rs.2,360 crore were made using the On-line
Commercial Tax payment facility. 14 Non Banking
Treasuries have been converted as Banking Treasuries and linked to the
respective branches during 2009-10. The market share of the Bank in the
total turnover of Kerala State Government transactions for 2009- 10
works out to 73.77% compared to 72% in 2008-09.
3. Marketing Initiatives and Development of New Products
3.1 Marketing initiatives aimed at customer relationship management and
customer acquisition assumed a new dimension by organizing massive
campaigns for canvassing Agricultural Loans and other retail loans, and
for augmenting deposits. Conducting intensive drives during festive
seasons was one of the strategies adopted to enhance the business level
and customer base.
3.2 The marketing efforts were supplemented by high intensity
advertising campaigns spanning print, audio, video and web media. These
efforts brought about a palpable improvement in the image and
visibility of the Bank across the length and breadth of the country.
3.3 Aishwaryotsav- Retail Loan campaign: Special Home loan and Car loan
schemes were introduced in connection with Onam festival from 17th
August 2009 to 30th November 2009, with differential interest rate
fixed for first three years. The well received campaign ultimately
helped the Bank to bag 8,528 new Housing loan accounts with an outlay
of Rs.800 crore and 11,269 new car loans with a total outlay of Rs.348
crore.
3.4 SBT Mahotsav deposit mobilization campaign was celebrated during
the period between 2nd November and 16th December 2009 with a specific
target to increase the share in CASA Deposits, Card rate deposits and
CASA account numbers. It helped the Bank to mop up Rs.1,872 crore of
deposits and 1.58 lac new accounts.
3.5 New Products & Business Initiatives
The following new customer friendly products were added to the
impressive bouquet of the BankÃs products and schemes during the year:
- EZ Trade - 3-in-1 facility for Demat and Online Trading, highly
secure integrated platform comprising i) Savings bank/
Current/Overdraft account ii) Demat account and iii) Trading account.
This facilitates the customers to access their Online Demat and Trading
accounts from anywhere, anytime with paperless and hassle-free
processes. This facility, ntroduced in June 2009, is available in 58
branches.
- ÃSBT BIZà with Minimum Balance of Rs.25,000/- and ÃSBT Shakthià a
special Current Account with fee/subscription collection functionality
and minimum balance of Rs.25,000/- were launched to enhance the share
of Current Accounts in the Deposit Mix and to bring down the cost of
deposits.
- Sukanya Deposit Scheme: A new deposit scheme was introduced
exclusively for girl child aged between 10 and 18 years to commemorate
National Day for the Girl Child.
- SBT Nano Car Booking Funding Scheme: After entering into a tie-up
with M/s Tata Motors Ltd. a loan scheme for booking TATA Nano car was
introduced where 00% of the booking amount is advanced on simple terms.
- ÃASBAà - Applications Supported by Blocked Amountà - has been
launched by the Bank with the product name SBT e- Invest, which
facilitates investors to apply for public issues. The application money
is blocked in the investorÃs account til allotment is finalised and the
person continues to earn interest on the application money till the
amount is transferred from the account. The investor need not bother
about refund since money remains in the account
- Prasanthi Elite Loan for pensioners: A loan scheme to cater to the
needs of elite group of pensioners has been introduced with a maximum
limit of Rs.5 lac.
- Swagatham - A scheme for returning non- residents - In the backdrop
of a large number of non-resident Keralites returning due to the global
recession, the Bank ntroduced a scheme to provide financial assistance
to enable them to take up manufacturing, service, trade and agriculture
activities. The scheme has generated a lot of goodwill for the Bank
amidst the expatriates.
- ÃXPRESS RemitÃ, a new online remittance facility in Foreign Currency,
introduced by the Bank in association with SBI GLS, enables customers
in US and UK to make remittances from their desktop, round the clock to
their account with SBT, through Automated Clearing House (ACH)
mechanism.
- Vishwa Yatra Foreign Travel Card (VYFTC) - Bank has introduced VYFTC
on 13 November 2009 in association with State Bank of India and VISA to
meet the demands of customers going abroad and to provide a convenient,
cost effective and more secure alternative to carrying foreign currency
/ travellers cheques.
3.6 Electronic Payment Systems
The Bank has been able to bring about better awareness among the
customers on using electronic mode of remittances. The Payment &
Settlement Group functioning at Integrated Treasury, Mumbai, attends to
electronic remittances like RTGS/NEFT and Group Payment [GRPT]
transactions and the funds settlement between the Bank and other
Banks/RBI. The total number of outward electronic messages (RTGS/NEFT/
GRPT) emanating from branches has ncreased from 74,617 to 1,49,47
registering 100.32% increase during the year.
3.7 Other modifications/ additions in existing schemes
Based on market studies and the feedback received from branches as well
as customers, some of the schemes were modified/ revamped during the
year, to facilitate better customer acceptance.
- Reverse Mortgage Loan Scheme extended to all branches.
- Suvidha Loan amount limit increased to Rs.1 crore.
- Maximum loan amount in Car loan enhanced to Rs. 30 lac.
-The maximum amount of deposit in Super Surplus scheme increased to
Rs.1,00,000/-
- Interest concession of 0.25% on card rate on Housing loans, Car Loans
and Personal Loans under Corporate Salary Package.
- ÃHome Appliances Dealers Plusà and ÃDistributors Plusà schemes -
reduction in interest rate and relaxing the eligibility criteria.
Upward revision of limit cap to Rs.200 lac for ÃPharma Plusà scheme.
- Warehouse receipt financing for farmers and traders engaged in
Produce marketing - the maximum cap per borrower under the scheme for
financial assistance against warehouse receipt issued by National Bulk
Handling Corporation increased from Rs.2 crore to Rs.3 crore.
- Special Drought Relief Scheme to help the farmers affected by drought
and weak monsoon - Minor Irrigation Loan with reduced interest rate and
extended repayment periods.
- Special concessions to support the farmers who have been affected by
weak monsoon by extending crop loans at reduced interest rates.
- The Tradersà Special scheme modified to improve the quality of assets
- Doctorsà Special modified with interest rate changes and higher loan
amount.
- Interest rate and charges on Bill Discounting under Inland Letter of
Credit Scheme revised in line with the market condition to make the
product the best in the market.
- Collateral security norms for lending to RTO liberalized.
3.8 Tie-up arrangements
The Bank has tie-up arrangements with various manufactures/dealers/
organisations for improving business levels and accelerated customer
acquisition.
- Maruti Suzuki India Ltd.: The Bank has a tie-up with Maruti Suzuki
India Ltd. as preferred financier for extending finance for purchase of
Maruti cars. The Bank has extended maximum loans for Maruti Cars among
Associate Banks. The 15,667 such loans extended by the Bank constitute
30% of such loans extended by all the Associate Banks put together and
represent an improvement of 46% over the previous year.
- Hyundai Motors India Ltd.: The Bank entered into a tie-up with
Hyundai Motors India Ltd. as preferred financier for extending finance
for purchase of Hyundai cars.
- Mahindra & Mahindra Ltd : The Bank has entered into a tie-up with
Mahindra & Mahindra Ltd. as preferred financier for extending finance
for purchase of passenger vehicles of M&M.
- Commercial dairying is picking up as a rural enterprise in Kerala.
The farmers have to depend on professional milkers for milking, which
is costly. To mitigate the difficulty, Malabar Regional Co-operative
Milk Producers Union (MRCMPU) under MILMA has entered into an agreement
with M/s De Laval India to deliver milking machines at discounted rate
to the dairy farmers of Malabar Region. The bank has formulated a
scheme for financing of milking machine under this tie-up.
4. Cross Selling
4.1 The Bank continues to make efforts to meet the needs of the
customers for other investment channels like Insurance, Mutual Funds
etc through tie-up arrangements. The income from such activities has
also served to improve the Non-Interest income of the Bank. Income from
Cross selling has improved by more than 27% from Rs.9.63 crore in FY
2008-09 to Rs.12.19 crore in FY 2009-10. SBI Life Insurance business
improved substantially by more than 43%. General Insurance business
turnover in tie- up with United India Insurance Company and income
generated thereon have marginally gone up by 1.7%. The Accident
Insurance policy, SBT Uni Suraksha, carrying Accident Death Cover of
Rs.5 lac, has gained more popularity. More than 37 families, most of
them poor, have benefited from settlement of claims arising out of
death of policyholders. The number of such policies issued has crossed
2 lac. Efforts are afoot to improve sourcing of applications for SBI
cards through the Branches.
4.2 During the year as many as 244 members of BankÃs staff were trained
and qualified as AMFI Certified Employees (ACEs) authorised to handle
Mutual Funds, taking the total number of ACEs to 812. In order to
improve the SBI Life business, Bank trained several employees/officers.
There are as many as 902 employees qualified as Certified Insurance
Facilitators (CIFs) out of which 171 employees qualified during the FY
under report. With this the Bank has moved closer to the objective of
having an ACE and a CIF each in all branches.
4.3 Bank covered a record number of more than 15,000 Housing and Car
Loans during the year under Credit Protection facility of Dhanaraksha
provided by SBI Life which covers the loan outstanding as per repayment
Schedule in the event of unfortunate death of borrowers. The scheme
effectively provides succour to the bereaved family while preventing
the loan account from becoming a stressed/non- performing asset.
4.4 Grameen Shakthi, a micro Insurance product, which covers the life
of SHG borrowers to the extent of Rs.50,000 at a nominal cost of Rs.601
per annum, was also launched and marketed to benefit
5.000 borrowers.
5. NRI Services
5.1 SBT, the market leader in NRI business in Kerala, has been
continuously improving its products and services to NRIs. All
technology based products and services have been made available to NRIs
also, so that they can bank with their most preferred bank, SBT, from
any corner of the globe. The Representative Office in Dubai, opened in
August 2008, is acting as an interface between branches and NRIs to
meet their banking needs. BankÃs extended arms are available in UAE and
Sultanate of Oman, the two vibrant and developing countries in the Gulf
Cooperation Council (GCC), through the Bank managed Exchange companies,
viz., City Exchange LLC in UAE and Global Money Exchange in Sultanate
of Oman.
5.2 The recently developed product, NRI PLATINUM account, has been well
accepted by high networth NRIs, as the product provides special
identity to customers and a host of services free of cost. Personalized
multicity cheque payable at all branches at par and SBT Gold
International Debit Card (VISA) that provides complimentary insurance
are the special features of the product.
5.3 The MoneyTrans e-Remit, a web based fast and secure facility for
remittances from Gulf countries, introduced by the Bank is a unique
product well received by the customers and Exchange Companies. The
remittances through the scheme will reach the accounts with the bank
directly, immediately on upload and will be acknowledged by SMS/email
to the remitter. This facility has been extended to 25 exchange
companies that are having drawing arrangements with the Bank. This
facility is in addition to the existing Rupee draft drawing facility
and Swift remittance. Remittances through e-Remit numbered 24.36 lac
aggregating Rs.9,826 crore during 2009-10 as against 13.46 lac
aggregating Rs.5,929 crore during 2008-09.
5.4 All credits of Rs.5,000 and all debits above Rs.25,000 are
acknowledged through SMS to NRIs. Internet banking facility offered by
the bank enables the NRIs to effect transfer of funds within the Bank
as well as to other banks in India and also third party transfers,
carry out their standing instructions for various payments, rail
bookings, fee payments, and also online shopping. It also enables them
to view their accounts and transactions.
5.5 NRI News Channel, a monthly newsletter containing important news
items and information regarding products and services, interest rates
etc. useful to NRIs, is circulated to all NRI constituents through the
branches by email.
5.6 Opening of new NRE account sourced by Exchange Companies is now
centralized at the Liability Central Processing Centre [LCPC]
functioning at Thiruvananthapuram, which facilitates immediate opening
of accounts and issuance of Multicity cheque book and pass book to the
customers.
5.7 ISB Helpdesk attached to Foreign Exchange Dept., Ernakulam attends
to queries relating to various remittances made from Gulf countries.
ATM Helpdesk, Internet Banking Helpdesk and NRI Helpdesk attached to
Head Office, support the NRIs to resolve all their grievances in
respect of their accounts and transactions.
5.8 The four NRI Branches at Attingal, Mavelikkara, Thiruvalla and
Ernakulam and specialized NRI Cells in more than 50 branches in NRI
centres provide specialized and personalized services to the NRIs.
6. Business Process Re-engineering (BPR) Initiatives
6.1 The Bank has embarked on implementation of various BPR initiatives
beginning from February, 2005, with the objective of improving
performance and enhancing customer service to global standards, by
leveraging on its core competencies, state of the art technology and
redesigned operating architecture.
6.2 Centralised Loan Processing Centres (CPCs) for appraisal, sanction
and disbursement of loans in Retail, Small & Medium Enterprises
segments have been set up at 8 major centres, resulting in improved
quality of assets and shorter turnaround time in extension of loans.
BankÃs Rural Central Processing Centre functions at Palakkad covering
all the branches in the District and improving the quality of lending
to this segment.
6.3 Multi Product Sales Teams [MPSTs] have been established at seven of
the loan CPC centres to target specific markets, for canvassing
business. Stressed Assets Resolution Centres (SARCs) have been rolled
out at 7 centres in Kerala for more focused attention on recovery,
thereby releasing funds blocked in non-performing assets which can then
be utilised for more productive purposes.
6.4 Relationship Managers have been posted at select branches to extend
personalized services to the customers. Grahak Mitras have been
positioned at select branches to proactively guide the customers in
conducting transactions. Drop Boxes have been provided at the branches
for hassle-free and safe handling of instruments deposited. Currency
Administration Cells, which facilitate Cash transmittal between Chest
and non-chest branches to save the cost involved with idle cash, have
been rolled out in 11 centres
6.5 Pension processing has been centralized at the Centralised Pension
Processing Centre set up at Thiruvananthapuram, covering all pensioners
drawing pensions from any of the branches in Kerala State, ensuring
accuracy in pension calculations, timely disbursement of pension and
quick settlement of transactions.
6.6 As a forerunner to setting up Centralised Clearing Processing
Centres at MICR centres, the outward clearing work is centralized at
the MICR centres of Thiruvananthapuram, Ernakulam and Kozhikode. With
the introduction of this initiative, the Bank is able to afford credit
to the accounts in respect of local clearing instruments on the next
day of deposit.
6.7 Trade Finance Central Processing Centres [TFCPCs], aimed to ensure
efficient and uniform handling of inland and foreign trade finance
related transactions and Bank Guarantees by experienced operations
personnel, have been rolled out at Ernakulam and Chennai.
6.8 A Liability Central Processing Centre has been established in
Thiruvananthapuram to provide back office support to branches, in
opening and servicing of liability accounts such as Savings Bank and
Current Deposit Accounts. The Centre will provide to branches
pre-generated Welcome Kits consisting of ATM cards and cheque books,
facilitating the customers to open and operate the accounts within a
short span of time.
7. Information Technology - Technology Upgradation & IT Initiatives
7.1 With the Core Banking Solutions implemented across all the branches
of the bank including the newly opened branches, IT department is
playing a key role in facilitating corporate innovation and growth. In
order to minimize damage to network equipment, several proactive
actions were taken such as installing Surge arresters in lightning
prone branches.
Branches having frequent connectivity issues were provided with VSAT to
prevent branch isolation. Branches were rerouted to nearest City
Aggregation Points (CAP) to improve network performance and reduce BSNL
channel charges. The upgraded version of Antivirus named SEP is
installed in all the networked users, standalone PCs & Laptops to
protect the Network from operational risks due to the virus attacks and
to ensure full protection against virus/ worms.
7.2 Alternative Delivery Channels
The Bank has 726 ATMs as on 31st March 2010, including 222 offsite
ATMs. The BankÃs network of 611 ATMs in Kerala is the largest in the
state. All ATMs are networked with State Bank Group ATM Network of over
21,500 ATMs. In addition to withdrawal of cash round the clock, State
Bank Group customers can transfer funds up to Rs.50,000/- to accounts
within the Group (Card to Card Transfer) using ATM.
The Bank has an ATM-cum-Debit card base of 36.75 lac as on 31st March
2010, which represents an increase of 21.40% over the position as at
the end of the previous year. The total number of active cards
constitutes 96.13% of the total operative Savings Bank accounts.
The average number of hits of the ATMs during the period under review
is 262. The BankÃs ATM uptime is 94.86% during 2009-10. The total
number of ATM transactions put through during the year was 489.94 lac
involving a sum of Rs.12,280 crore. The total number of POS (Point of
Sale) transactions during the year was 4.86 lac involving a sum of
Rs.106 crore.
VISA Gold Card - an International ATM cum Debit card working on VISA
platform with higher maximum limit on daily cash withdrawal - was
introduced for the benefit of High Networth customers.
Internet Banking - The Bank offers a convenient and efficient Internet
Banking [INB] facility. Existing 128 bit SSL (Secured Socket Layer)
Encryption has been enhanced to 256 bit EVSSL (Extended Validation
Secured Socket Layer) Encryption, to provide more security to INB
customers. The total number of INB customers increased from 1.60 lac
as on 31st March 2009 to 2.67 lac as on 31st March 2010. The number of
transactions and value of transactions put through Internet Banking
increased by 193.15% and 188.39% respectively on year-on-year basis.
The Internet Banking facility has also enabled very significant
Government to Customer [G2C] and Business to Business [B2B]
transactions. The online payment of Commercial Tax of Kerala State
Government introduced in the month of September 2009 was a landmark
event. This was followed by Online payment of Commercial Tax of
Maharashtra State Government introduced in the month of February 2010.
Supplier Payment has been enabled for Hindustan Petroleum Corporation
Ltd., [HPCL] in the month of
February 2010. Corporate customers (dealers) having accounts with the
Bank can now remit online to HPCLÃs selected accounts.
Mobile Banking Service (MBS), another alternative channel for
banking/non-financial transactions, was started on 25th July 2009.
This helps the Bank to provide the customers with another channel for
banking transactions, which is safe, secure, fast and convenient. The
daily limit for MBS transaction is Rs.50,000 for aggregate of funds
transfer & transactions involving purchase of goods & services within
an overall calendar month limit of Rs.2,50,000.
Several value added applications were developed to make the system more
useful to the customers. These include:
- Corporate Payment Gateway - a Web based package - is developed
in-house enabling Corporate to make payments through core banking and
NEFT Internet Web Interface for corporate users was developed using
e-token double factor authentication.
-Auto Debit Facility, a package developed and ready for implementation
to facilitate the regular bill payments of corporates such as Kerala
Water Authority (KWA), Non Keralites Welfare Board etc. The mandates
have to be registered by the customer with the Bank to enable the
payment of bills on due date.
- Auto SMS generation through SBI gateway: The SMS Solution offered by
State Bank of India has been implemented for generating SMS Credit
alerts and other communications to NRI Customers. Installment due
intimation on loans etc are now routed through the new channel, which
is very cost effective and scalable.
- The BankÃs website was revamped during the year to make it more
efficient and user- friendly A web based online loan request package
has been developed and linked from the homepage. Customers can directly
apply for the Housing loan, Education loan, SME and Agriculture Loans
through this website. Necessary provisions are given in the software
for routing the application to Loan Cell at Head Office for preliminary
scrutiny and for forwarding it to the respective branch for further
processing.
8. Lead Bank Scheme
8.1 The Bank is shouldering Lead Bank responsibilities in three
districts of Kerala State viz. Alappuzha, Kottayam and Pathanamthitta.
The District Credit Plans for the year 2009-10 were launched in the
Lead Districts well in time. The various mandatory meetings in all the
blocks of the Lead Districts were conducted strictly in accordance with
the guidelines issued by RBI. The Bank had initiated several
developmental programmes like Entrepreneur Development Programmes,
Farmersà Meet and Plantersà Meet for different target groups in the
Lead Districts.
8.2 The total outlay under Priority Sector by all financial
institutions in the three Lead Districts for 2009-10 was Rs.8,735.50
crore of which the BankÃs share was Rs.1,840.96 crore. The estimated
disbursement under Priority Sector advances in these three districts
for the year 2010-11 by all financial nstitutions is Rs.13,801.76 crore
of which the BankÃs share is Rs.3,030.51 crore, which constitutes 22%
of the outlay.
9. Financial Inclusion
9.1 Financial Inclusion through deepening and widening of financial
services is one of the key challenges before the Indian Banking sector.
Financial inclusion is the delivery of financial services at an
affordable cost to the vast sections of disadvantaged and low- income
group. Achieving financial inclusion is seen necessary to improve and
achieve social inclusion. In response to the RBIÃs directives, the Bank
has formulated a Financial Inclusion Plan to be rolled out over the
next three years. This plan for Financial Inclusion will be an integral
part of the business plans with the following key objectives:
- Effecting improvements within the existing formal credit delivery
mechanism.
- Suggesting measures for improving credit absorption capacity
especially among rural folk
- Evolving new models for effective outreach
- Leveraging on technology based solutions.
The Bank proposes to implement this full- fledged Financial Inclusion
Plan, approved by the Board, over the next three years. The Bank has
set up a separate Financial Inclusion Department to monitor and
implement the plan, headed by an officer in Senior Management grade.
9.2 The Bank crossed the Million mark in ÃJanapriyaà No-frills
accounts, opening ,98,558 such accounts during the year to reach
10,10,978 accounts. These constitute about 45% of the total number of
accounts opened by all public sector banks in the state of Kerala. By
way of mainstreaming Self Help Groups, Joint Liability Groups, etc, the
Bank has opened 80,000 accounts. Biometric Smart Card pilot project,
implemented in Nedumkandam under a
Business Correspondent / Facilitator Model, will be extended to the
other centres.
9.3 Financial Literacy, Credit Counselling And Training
The Bank has established Rural Self- Employment Training Institutes
(RSETIs) and Financial Literacy and Credit Counselling Centres (FLCCs)
during the year in its Lead Districts viz. Pathanamthitta, Alappuzha
and Kottayam. The Wayanad Rural Micro Training Institute [WRMTI]
established in 2005, was converted to an RSETI. The RSETIs will support
the socio-economic development of the villages, by imparting vocational
training to disadvantaged sections of the society to enable them to
take up gainful economic activities. The RSETIs have trained 6,382
persons in Wynad and Pathanamthitta. 95% of the beneficiaries are
women. 60% of the trainees are reported to be successful in starting
self-employment ventures, with credit assistance from the Bank. The
FLCCs provide free financial literacy/education and credit counseling,
including education on responsible borrowing, proactive and early
savings. They will also extend debt counseling to individuals who are
indebted to formal and/or informal financial sectors.
10. Industrial Rehabilitation
10.1 BankÃs approach to Asset Management includes revival of viable
sick industrial units as an important strategy.
Rehabilitation/Restructuring packages are under implementation in
respect of 27 units with a total exposure (FB+NFB) of Rs.266.30 crore.
Out of these 27 units, 11 units are under CDR scheme with exposure of
Rs.194.12 crore, 15 units under BIFR scheme with exposure of Rs.71.52
crore and 1 unit under BankÃs scheme with exposure of Rs.0.66 crore.
10.2 During the year, six accounts were referred to CDR scheme for
restructuring. Out of these six accounts, restructuring packages for
two accounts were implemented and others are under process.
11. Management of NPAs
11.1 The Bank continues to give topmost priority to NPA management and
recovery of Non-Performing Assets (NPA) and Advance Under Collection
(AUC) accounts, with a view to improving the asset quality and
profitability. These assets have been frequently reviewed and followed
up by the management functionaries at various levels. Recoveries are
also made by constant follow-up of the DRT cases, and also by invoking
the provisions of SARFAESI Act 2002 etc. Recovery/settlement of
Stressed Assets through Compromise Scheme of the Bank, Lok Adalat and
Bank Adalat was taken up vigorously.
11.2 The percentage of Gross NPAs to Gross Advances stood at 1.65% on
31st March 2010 with the Gross NPA level at Rs.641.98 crore. The
percentage of Net NPA to Net advances stood at 0.91% as on 31st March
2010 compared to 0.58%, a year ago.
11.3 SME OTS-2009: A scheme for one time settlement of SME accounts
which had become doubtful asset as on 31.03.2009, was introduced on
September 15, 2009. The scheme was applicable to accounts with
outstanding below Rs.25 lac. The recovery effected under the scheme was
Rs.1.16 crore.
12. Internal Control Systems & Supervision
12.1 Integrated Risk Management
The Bank has a robust Risk Management framework in place. The Board of
Directors has the overall responsibility to implement a Risk Management
System in the Bank. Under the Board, Risk Management Committee of the
Board (RMCB) is the apex body to decide appropriate policy and strategy
for internal risk management. Subordinated to RMCB, Credit Risk
Management Committee (CRMC), Market Risk Management Committee (MRMC)
and Operational Risk Management Committee (ORMC) are in place to manage
Credit Risk, Market Risk and Operational Risk respectively at the
granular level. The General Manager (P&D) is designated as the Chief
Risk Officer (CRO). The Integrated Risk Management Department headed by
Deputy General Manager is responsible for the overall daily management
of risks at micro level.
12.2 The Internal Capital Adequacy Assessment Process (ICAAP) document
has been prepared in accordance with the Pillar-II requirements and has
been submitted to RBI. The Bank has completed Risk and Control Self
Assessment (RCSA) for the management of Operational Risk, in all the
branches and user departments. As part of preparedness towards
migrating to The Standardised Approach (TSA) of Operational Risk by the
next FY 2010- 2011, the Bank has completed the mapping of income
streams into eight Business Lines as stipulated by RBI. A web based
software has been installed to capture loss data for the management of
Operational Risk as required under Advanced Measurement Approach.
12.3 Asset Liability Management
The Asset Liability Management System implemented effective from April
1, 1999 is functioning as per the guidelines prescribed by Reserve Bank
of India. The Asset Liability Committee (ALCO) headed by Managing
Director meets regularly. The ALCO discusses in detail the statements
of Structural Liquidity and Interest Rate Sensitivity, Short Term
Dynamic Liquidity, Stress Testing on Liquidity and Interest Rate,
Quarterly Review of Contingency Funding Plan, Duration Gap Analysis,
Analysis of Interest Rate Risk by the Traditional and Duration Gap
Methods. Various interest rate revisions including the revision of the
Benchmark Prime Lending Rate (BPLR) of the Bank is discussed and
decided by the ALCO.
12.4 Market Related Funds Transfer Pricing (MRFTP)
In order to facilitate effective Asset Liability Management, the
existing Transfer Pricing Mechanism [TPM] using the Multiple Transfer
Price Formulae [MTPF], introduced in 2003 and fine-tuned in 2006, was
replaced with Market Related Funds Transfer Pricing [MRFTP] from 1st
April 2009. MRFTP is a scientific internal fund transfer price
mechanism evolved to ascertain the true profitability of operating
units by benchmarking the product prices to the market rates. Under
MRFTP, the performance measurement system reflects a consistent and
fair picture about the branchesà profitability. It also improves the
product pricing policy of the bank.
12.5 Inspection and Supervision
The Inspection Department at Head Office co-ordinates the Audit and
Inspection activities of the Bank. In addition to the regular internal
inspection, IS Audit, Compliance Audit, Surprise Inspection, System
Audit of Zonal Offices and Head Office departments, etc. are conducted
by the Inspection Department.
12.6 The Bank has put in place an effective institutional mechanism for
Risk Based Supervision through RBS Cell in Inspection Department. As
envisaged by the regulator, the Bank introduced Risk Focused Internal
Audit (RFIA) under RBS w .e. f. 1st April 2003, where business
parameters have been de-linked from the Risk Parameters.
12.7 Following the migration to the CORE Banking System, RFIA was
revamped by way of revision in Audit Report Formats, rating mechanism,
grouping of branches, sampling norms and periodicity of Inspection.
The Information System Audit (IS Audit) cell was formed within the
Inspection Department.
12.8 Credit Audit
The audit of loan appraisal and administration for high value credit
accounts with the aim of improving the asset quality of the Bank is
undertaken by the Credit Audit Department. Accounts with total exposure
of Rs.2 crore and above are covered under Credit Audit. The Department
conducted audit of 933 accounts during the year, covering the pre-
sanction and post sanction aspects. Of the 933 accounts, 42 related to
accounts with exposure below Rs.2 crore and above Rs.1 crore on a
random basis. With the integration of credit audit with RFIA, the marks
awarded by the credit auditor are normalized by the internal auditors
under Credit Risk Management, wherever necessary.
12.9 Inter-Office Reconciliation
As per RBI guidelines, all the high value debit entries of value Rs.1
lac and above and 99.99% of debit amount need to be reconciled within a
period of six months from the date of their origin. As against this
stipulation, the Bank had completed reconciliation of Inter-branch
accounts up to December 2009 achieving 100% reconciliation of debit
entries by end-March 2010. The Bank has also reconciled all credit
entries of value Rs.50,000/- and above for the quarter ended September
2009 in Branch Clearing General Account. The Bank aims to reconcile all
entries within a shorter time frame than the target of 3 months set by
RBI.
12.10 Compliance
The Bank ensures that GOI and RBI directives/instructions received are
being complied with promptly. Quarterly review reports on the
compliance status and performance of the Departments are regularly
submitted to the Audit Committee of the Board for information.
13. Vigilance Machinery And Frauds Monitoring
13.1 The period under review was a year where the vigilance climate in
the Bank was quite normal. The integrity level of staff/ officers in
this Bank is very high and hence the instances of criminal misconduct
committed by the staff/officers were minimal. Unfortunately two
instances of frauds, where staff members were involved, reported during
the year have posed some concern. Regular Departmental Action against
erring officials has been initiated.
13.2 As part of Preventive Vigilance measures, the Vigilance Department
officials handled sessions on Preventive Vigilance through BankÃs
training system highlighting the importance of adherence to systems and
procedures and probity in public life. The Bank issued circulars every
quarter stating the modus operandi of fraud cases so as to avoid
recurrence of similar instances. Surprise inspections were conduced at
branches. Structured meetings/ conferences were held by the CVO at
various Zones of the Bank and branches to propagate and ensure the
implementation of Preventive Vigilance mechanism in the Bank in its
true spirit. More than 700 branches spread all over India were covered
in three monthsà time.
13.3 During the year the CVO was attached to Central Vigilance
Commission for a week from 9th November to 13th November 2009. The
Vigilance Department officials attended a training programme at CBI
Academy, Gaziabad for one week. One official attended a National
Seminar on Cyber Crimes, Cyber Law, Cyber Security at
Thiruvananthapuram, conducted by Centre for Development of Imaging
Technology (C-DIT), an autonomous Centre under Govt. of Kerala.
13.4 Vigilance Awareness Week was observed as per CVC directives with
wide publicity. An Essay Competition was held for members of the staff
followed by a quiz programme for college students. SBT Honesty Awards
were conferred on 4 students, selected from various schools in and
around the city, to inculcate the policy of honesty in the minds of
young citizens and also with an idea to Ãcatch them youngà for the
fight against corruption. The Honesty Awards were given away by Shri K
P Somarajan IPS, Director, Vigilance and Anti Corruption Bureau,
Kerala.
14. Human Resources Development & Industrial Relations
14.1 Staff Resources & Recruitments
The Bank had on its rolls 12,192 members of staff as on 31st March
2010, comprising 4,182 officers, 5,784 clerical and cash department
staff and 2,226 subordinate staff inclusive of 404 Part Time Sweepers.
The number of women employees and ex- services personnel in the Bank
was 4,348 and 1,186 constituting 35.66% and 9.73% respectively of the
total workforce. Out of the women employees, 981 were officers, 2,836
non-subordinate staff and 531 subordinate staff. The Bank also had on
its rolls 117 physically handicapped employees.
14.2 As many as 1,191 staff were recruited during the year - 70 in the
officersà cadre, 1,019 in nonÃsubordinate and 102 in the subordinate
cadre. The recruitment of more than one thousand award staff in one
batch is a record achievement in the history of the Bank.
14.3 During the year, 64 employees were promoted from subordinate to
non- subordinate cadre, 264 RKGKs (promotees from subordinate cadre)
were converted to Computer Terminal Operators as a one- time
dispensation, 136 employees were promoted from clerical cadre to the
Officersà cadre, and 385 promotions effected within Officersà cadre.
14.4 Staff Productivity
The business per employee improved from Rs.686 lac as at the end of
March 2009 to Rs.758 lac at the end of March 2010. Net profit per
employee improved from Rs.5.58 lac as at the end of March 2009 to
Rs.5.80 lac at the end of March 2010.
14.5 Training Programmes
A variety of Training programmes are conducted at the Learning centres
to update the knowledge, awareness and skills of the staff members on
an ongoing basis with particular reference to corporate goals/ concern
areas. During the year under review 179 training programmes were
conducted imparting training to 2,567 officers, 1,497 non-subordinate
staff and 58 subordinate staff
14.6 In addition to in-house training programmes at Learning Centres in
Thiruvananthapuram and Ernakulam, 616 officers were deputed to other
institutions in India like the State Bank Academy, Gurgaon, State Bank
Staff College, Hyderabad, State Bank Institute of Rural Development,
Hyderabad, State Bank Institute of Information and Communication
Management, Hyderabad College of Agricultural Banking (RBI) Pune,
National Institute of Bank Management, Pune, Indian Institute of
Management, Bangalore, Administrative Staff College of India,
Hyderabad, CBI Academy, Gaziabad , etc.
14.7 In order to nurture the future leaders of the Bank 30 Assistant
General Managers were given a customized Leadership & Management
Training at the prestigious Indian Institute of Management, Bengaluru,
while 5 officials were deputed for attending the following foreign
trainings / Conferences:
- Advanced Management Programme at Stanford GSB, California
- Global Advanced Management Programme at Shanghai, China
- FEDAI Annual Conference at Nairobi, Kenya
- Kellogg School of Management, USA
14.8 Performance Recognition
Twenty two branches were selected for membership of MDÃs Club / CGMÃs
Club for the year 2008-09 and the Branch Heads and Staff
Representatives were felicitated at a glittering function held at
Thiruvananthapuram. Two new Incentive schemes à Award for Excellence in
Performance of AGMs (Region) and Performance Linked Incentive Scheme
for Staff à were introduced.
14.9 Library & Knowledge Forum
In order to inculcate reading habit among the staff/participants, the
library at Learning Centre, Thiruvananthapuram was renovated and books
on Leadership/ innovation/marketing / personal development etc were
added. Four computers have also been installed in the Library, for
viewing educational CDs and use of e-learning modules by the
participants. Functional libraries have also been made operational in
all the 7 Zonal/ Regional Offices. To impart knowledge/ skills to the
staff, weekly sessions were held by the Knowledge Forum coordinated by
HR Department at Head Office, on Fridays on various topics related to
Banking, Leadership, Personality Development, etc.
15. StaffÃSC/ST/Minority Community (MC)/Ex-ser./PH Cell
The Bank has a separate Cell headed by a Chief Liaison Officer in the
rank of General Manager assisted by Liaison Officers at the Module
levels, to take care of the welfare and interests of the SC/ST
employees. Periodical meetings of the Liaison Officers with the Chief
Liaison Officer and of the representatives of the SBT SC/ST Staff
Welfare Association with the Top Management, are held to understand
their specific issues, if any, and to redress their grievances. The
Welfare Association has been provided with furnished office premises
with all infrastructure. Salary check-off facility for payment of
subscription by the members to the Association is also provided.
15.1 Reservation policy was introduced in the Bank for Scheduled Castes
and Scheduled Tribes from 1972 in direct recruitment and from 1978 in
promotions. Reservation at 15% for SCs and 7.5% for STs are provided
both in direct recruitment as well as in promotion to officersà cadre
up to the specified levels. In direct recruitment for Clerical cadre
and Subordinate staff cadre, reservation at the percentage prescribed
by the respective State Governments is provided.
15.2 As on 31st March 2010 the percentage of SC/ST employees in the
rolls is as under:
15.3 Post based rosters as per Government of India guidelines are
maintained in the Bank.
15.4 A Concession of 5% of marks in written test for recruitment as
well as for promotion and relaxation of 5 years in upper age limit in
recruitment are allowed to candidates belonging to SCs and STs. In all
the recruitment drives, the total number of vacancies and number of
vacancies reserved for SCs and STs are advertised extensively in all
the major newspapers. Pre- examination training programmes were
conducted for candidates belonging to SC/ ST/Minority/ex-servicemen
category appearing for recruitment test of clerical staff and
Probationary Officers in Associate Banks. Training programmes were also
conducted for employees belonging to SC/ ST category appearing for
promotion from non-subordinate cadre to officer cadre.
15.5 The SC/ST Cell at Head Office acts as a Liaison Office between
Bank and the Ministry of Finance, Govt. of India for supply of
information, answering questions and queries and clearing doubts in
regard to matters covered by the reservation orders. Cases of
suspicious caste certificates are referred to 3 Member Scrutiny
Committee constituted by the respective State Governments and followed
up closely. In verified cases, actions as recommended by the Scrutiny
Committee are taken.
15.6 The Cell also ensures:
- Compliance by the Bank with orders and nstructions pertaining to the
reservation in favour of SCs/STs in the matter of recruitment/
promotions and other service benefits such as relaxations/ concessions
admissible to them.
- Placing of Annual Review Report on the progress of implementation of
reservation policy for SC/ST to the Board of Directors.
- De-reservation proposal has been made with the full knowledge and
concurrence of the Chief Liaison Officer, while making reference to the
Ministry of Finance (Banking Division) regarding de-reservation of
reserved vacancies,
- The Bank takes appropriate steps to implement instructions/guidelines
issued by the National Commission for SC/ST.
- GOIÃs directions are followed in respect of DPCs/ Selection
Committees pertaining to SC/ST/MC members.
- Proper implementation of the reservation orders by conducting annual
inspection of the rosters maintained in the organization.
15.7 Apart from SC/ST Cell, Bank has set up PH/Ex-Servicemen Cell and
OBC Cell headed by Chief Liaison Officers in the rank of General
Managers and Minority Community Cell headed by Chief Liaison Officer in
the rank of Deputy General Manager assisted by Liaison Officers at Head
Office, five Zonal offices, and two
Regional Offices at Mumbai and New Delhi to take care of the welfare
and protect the interests of the employees belonging to the respective
sections. The Cell ensures:
- Compliance by the Bank with orders and instructions pertaining to the
reservation of vacancies in favour of Ex-Service and Physically
Handicapped in the matter of recruitment/promotions and other service
benefits.
- Compliance by the Bank with orders and instructions pertaining to the
reservation of vacancies in favour of MC/OBC in the matter of
recruitment and other service benefits
15.8 Important Visits / Inspections
The National Commission for Scheduled Castes headed by its HonÃble
Chairman, Dr. Buta Singh conducted a review of implementation of
Reservation Policy in the Bank on 1st July 2009. The action points that
emerged in the meeting are being implemented.
15.9 An inspecting team from the Ministry of Finance headed by Shri L K
Meena, Deputy Secretary, visited the bank on 11th September 2009. The
reservation rosters maintained by the Bank were inspected by the team
which expressed satisfaction over the level of compliances of various
rules and regulations pertaining to reservation in the bank
16. Industrial Relations
16.1 The time tested mechanism of bilateral negotiations at various
levels of the organisation with the Employeesà Union and the OfficersÃ
Association through periodical structured meetings and redress of the
issues ensured harmonious and cordial ndustrial relations in the Bank
throughout the year.
16.2 Bipartite meetings were held with Employeesà Union and OfficersÃ
Association at Head Office level and Zonal Offices at periodic
intervals. The Bank hosted the Central Bipartite meeting with ABOA on
22nd February 2010 at Kumarakom. Staff Welfare Committee and
Sub-committee meetings of Staff Welfare Fund were held 6 times during
the year.
16.3 At the industry level, there were joint and separate strikes by
the employees & officers on 6th and 7th August 2009 and 16th December
2009.
16.4 The Bank has introduced many improvements/modifications in the
staff welfare schemes during the year, including higher reimbursement
on health check up charges for spouses of staff members and for retired
staff and their spouses, enhancement of the claim amount from
Rs.3,50,000/- to Rs.5,00,000/- for Super Suraksha Insurance scheme for
staff, enhancement of scholarship to wards of staff etc.
16.5 The Staff Literary, Sport and Cultural Festival, Bankfest, was
conducted at Thiruvananthapuram from 5th February to 7th February 2010.
More than 500 staff members participated from all the Zones
17. Security Arrangements
This has been another year without any loss of cash or valuables to the
Bank due to security lapses. There were eight attempts / security
incidents this year compared to eleven last year, of which four were of
minor nature. The other four were fire incidents. A number of measures
are in the process to qualitatively improve the security of bank
branches. Integrated fire and security alarm systems are being
installed in all branches. Many other measures are being taken to
upgrade the security of vulnerable branches. CCTVs are being installed
in all metros, large towns and vulnerable branches. The above measures
are significant steps to upgrade security. Recruitment of more security
guards, which is in progress, will further beef up the physical
security of currency chests and vulnerable branches. Head Office
security has been strengthened by installation of X-ray baggage
scanner. CCTVs would also be installed at Head Office shortly. The
availability of a fire officer has enabled significant improvement in
fire safety arrangements in branches. The security arrangements in
branches are being reviewed constantly by Security Officers on their
visits and corrective measures taken, wherever warranted. The
Department issued a Handbook on Security as a ready reckoner, covering
all aspects comprehensively. Besides, a number of important
circulars/letters were issued by the Department to improve security
arrangements in branches. Training to inculcate security awareness, not
only to the security guards but also to as many members of the staff as
possible, is being arranged through regular programmes.
18. CUSTOMER SERVICE
18.1 Customer service in the Bank is accorded top priority and every
endeavour is made to improve the quality of service to the customers
and redress their grievances. All efforts are made to improve the
customer satisfaction by offering suitable products enhanced by quality
value-added services.
18.2 A well-defined and full-fledged customer grievances redress
mechanism is functioning in the Bank. Reports on the number of
complaints received / disposed of / pending in the Bank as a whole are
submitted to the BankÃs Board and the Apex Level Customer Service
Committee at Head Office. The Standing Committee on Customer Service,
constituted pursuant to Tarapore Committee recommendations, also
reviews the quality of customer service extended in the Bank at regular
intervals.
18.3 A Customer Service Department headed by an Assistant General
Manager has been formed at Head Office with effect from 1st January
2010. The main emphasis is on quick disposal of customer complaints and
ensuring maximum customer satisfaction. The Department acts as a
coordinator between the branch and the complainant and ensures quick
disposal of the complaints. Many of the complaints get resolved on the
same day itself. The average time taken for disposal of complaints at
Head Office / Zonal Office level has been reduced drastically.
18.4 The establishment of the new Customer Service Department and the
immediate response has had very positive impact. The number of
complaints has come down significantly and many complainants have
conveyed their appreciation for the quick response by the Bank and
immediate resolution of the complaints.
18.5 The updated version of CitizenÃs Charter is made available in
booklet form and also in the BankÃs website, which provides customers
and the general public with the key information regarding the common
areas of customer-banker relationship. Similarly the details of service
charges levied by the Bank are also published in the BankÃs website for
the information of the public.
18.6 Progress of implementation of CitizenÃs Charters and the Fair
Practices Code is also being monitored at Head Office and Zonal Office
level Customer Service Committee meetings. Inspecting officials are
also examining the quality of customer service rendered at the
branches.
18.7 Bank has also established a Call Centre with Toll free No.
1800-425-5566 enabling the customers/ general public to clear their
doubts/ complaints expeditiously. Adequate publicity of the aforesaid
facilities available to public is in place both through print and
visual media.
18.8 The importance of maintaining highest level of customer service
has been reiterated through various circulars. Bank has also launched
an innovative mechanism called SMS ÃSBT CAREÃ for customer care.
Accordingly, the customers can send a query by sending an SMS in a
particular mobile number, if they require any information about the
BankÃs products and services or if they are not satisfied with any of
the services. ÃCustomer Dayà or ÃOpen House Meetà is observed at all
the offices of the Bank across the Organisation on the 15th of every
month (next day, if 15th is a holiday or half day), to enable the
customers to voice their grievances or offer suggestions for the
betterment of customer service.
18.9 Banking Codes & Standards Board of India (BCSBI)
The Bank is a member of the Banking Codes & Standards Board of India
which is a registered society sponsored by Reserve Bank of India. The
Code of BankÃs Commitment to Customers is available on the website.
This is a voluntary Code, which sets minimum standards of banking
practices. The Deputy General Manager (Compliance) is the designated
Principal Code Compliance Officer at Head Office. The relative Annual
Statement of Compliance has also been submitted by the Bank to the
BCSBI.
19. Corporate Governance
The Bank is committed to the best practices in the area of Corporate
Governance, in letter and in spirit. A detailed report on Corporate
Governance is given as annexure in the Annual Report.
20. Right To Information Act
The Right to Information
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