Directors Report of Allahabad Bank [Merged]

Mar 31, 2019

During the financial year 2018-19 (FY19), the Bank''s global business reached the level of Rs. 377887 crore (Rs.3.77 lakh crore), registering a Y-o-Y de-growth of 0.57%. The Bank''s international business stood at Rs.3,299 crore and recorded a negative Y-o-Y growth of 74.37% on account of 67.69% Y-o-Y drop in overseas advances and 98.80% drop in overseas deposit. The Bank is about to wind up its sole international branch soon. Global deposits of the Bank stood at Rs.214335 crore which increased by 0.34% and gross advances decreased by 1.73% and stood at Rs.163552 crore as at the end of MARâ19. Your Bank''s continued focus on low cost deposits resulted in a healthy Y-o-Y growth of 7.77% in CASA deposits and the build-up stood at Rs.106070 crore as on 31st MARâ19. Subsequently, CASA share improved to 49.49% as on 31^st MARâ19 from 46.50% a year ago.

The Bank''s operating profit decreased by 19.52% Y-o-Y on account of stress on advances portfolio and resultant reversal/ non-booking of interest. It stood at Rs.2767 crore during FY19. In terms of net profit, the quantum of losses increased in FY19 as provisions were higher by 36.83% and there was a decrease in non-interest income levels. Net loss rose to Rs.8334 crore in FY19 as compared to a net loss of Rs.4674 crore a year ago. The Bank''s CRAR stood at 12.51% in FY19 as compared to 8.69% in FY18. Owing to reduction in bulk deposits by 43.87% Y-o-Y, the cost of deposits decreased to 5.10% during FY19 from 5.33% in FY18.

Against this backdrop, your Directors take pleasure in placing the Bank''s Annual Report for 2018-19 along with audited annual financial statements.

OUR PERFORMANCE A. FINANCIAL HIGHLIGHTS

A.1. BALANCE SHEET

(Amount Rs. in Crore)

	31^st MARâ18	31^st MARâ19	Y-O-Y GROWTH %
Total Business	380040	377887	-0.57
Total Deposits	213604	214335	0.34
Gross Advances	166436	163552	-1.73

A.2. PROFIT

(Amount Rs. in Crore)

	31^st MARâ18	31^st MARâ19	Y-O-Y GROWTH %
Operating Profit	3438	2767	-19.52
Provision	8113	11101	36.83
Net Profit/(Loss)	-4674	-8334

A.3. key ratios

Parameter	MARâ18	MARâ19
Cost of Deposits	5.33	5.10
Cost of Funds	5.23	5.05
Yield on Funds	7.61	7.89
Cost of Borrowings	4.15	4.44
Net Interest Margin	2.20	2.58
Return on Assets	-1.96	-3.48
Cost to Income Ratio	53.69	61.63

B. ASSET QUALITY

FY19 was a challenging year for the Indian Banking Industry due to continued stress faced in asset quality on account of various macroeconomic and other factors. As on 31^st MARâ19, Gross NPA of the Bank stood at Rs.28704.78 crore (FY18: Rs.26562.79 crore) and Net NPA stood at Rs.7419.31 crore (FY18: Rs.12229.13 crore). In terms of ratio, Gross NPA Percentage and Net NPA Percentage were 17.55% (FY18: 15.96%) & 5.22% (FY18: 8.04%) respectively.

The Bank initiated various measures to arrest fresh slippage and restricted it to Rs.10726.32 crore during the FY19 compared to Rs.12903.28 crore for the FY18. Provision Coverage Ratio (PCR) also improved to 79.85% in FY19 from 62.91% in FY18.

To improve asset quality, the Bank initiated consistent recovery drive and recovered Rs.4288.83 crore, out of which Cash Recovery was Rs.2826.71 crore with a growth of 36.43 % due to concerted efforts, daily monitoring and account specific resolution plan. During the aforesaid period, total reduction in NPA accounts stood at Rs.8584.33 crore.

The Bank also made suitable amendments in existing OTS schemes by rationalizing the slabs in OTS module under Thumb Rule for NPA accounts having balance of Rs.1.00 lac upto Rs.15.00 Lac to accelerate settlement of small borrowal accounts.

Further, compromise/negotiated settlement approach has been adopted through Rin Mukti Shivir and one-to-one meeting with borrowers as another vital tool to tackle NPAs. For this Village Mohalla Contact Programme and âEach One Reach Tenâ campaigns were initiated during the year 2018-19.

For effective and timely monitoring of NPA accounts and follow up of due process in NPA accounts having Ledger balance of Rs.1.00 Cr and above, concept of âStressed Asset Management Vertical (SAMV)â has been introduced at Head Office level as well as field level with dedicated executives.

The Bank also has Stressed Assets Management Branches which function exclusively for resolving NPAs.

Initiatives taken during FY 19

- Bank has launched Project Navoday wherein two separate verticals at corporate level have been formed for management of NPA.

- The Bank has activated Stressed Assets Management Vertical (SAM-Large) for focused follow up & Recovery of NPA accounts with O/s of Rs.25.00 Cr & above at HO level.

Further, the Bank has SAM Branches for resolving NPA accounts with outstanding above Rs.1.00 Cr to below Rs.25.00 Cr with a focused approach.

- Online OTS module has been implemented for easy access to borrowers/guarantors for offering OTS along with facility to track status thereof.

- Monitoring of daily recovery was introduced with Zones/ FGMOs to improve penetration in NPA accounts.

- The Bank organized 16 Recovery Camps involving all the branches. This step was very successful in terms of recovery that amounted to Rs.3579.82 crore. Services of Recovery Agencies and Banking Correspondents were properly utilized for marketing of One Time Settlement Schemes (OTS).

- During the FY19 Bank sanctioned 71958 Compromise cases with ledger balance of Rs.2738.03 Cr and compromise amount of Rs.1760.38 Cr.

- The Bank participated in National Lok Adalat/District Lok Adalat actively and settled 35812 cases having outstanding of Rs.527.47 Cr.

- E-auctions of charged immovable & movable securities were carried out through-out the year. Special thrust was given in taking physical possession of immovable properties either with the help of Enforcement Agencies or by moving application before the concerned DM/CMM taking advantage of amended SARFAESI Act. This step resulted into increased auction of properties under physical possession of the Bank.

- Sale of chronic/difficult stressed accounts to ARC was another option utilized in 42 Stressed accounts and NPA accounts involving amount of Rs.398.97 Cr were sold to various ARCs during the FY19.

- Initiatives for identifying Wilful Defaulters were undertaken in terms of guidelines of Reserve Bank of India. On completion of due diligence exercise, identified borrowers were declared as Wilful Defaulter by the Bank and the number now stands at 341, as on 31.03.2019.

- For effective and better monitoring, all NPA borrowal accounts were categorized under four broad heads , viz.

(i) Below Rs.50,000 (ii) Rs.50,000 to Rs.15,00 lakhs (iii) Rs.15.00 lakhs to 1.00 crore and (iv) above Rs.1.00 crore. While OTS was the main focus in first two categories, other additional options like sale under SARFAESI, declaration of willful Defaulter, restructuring, suit with DRT were followed very methodically for next two categories. Resolution through IBC/ NCLT was also used as important tools for recovery in high value NPA accounts. Further, for borrowal accounts having outstanding balance above Rs.1.00 crore, monthly VC meetings were held with Zonal Heads and FGMs and ''Doable'' accounts were identified where turnaround/recovery was expected within the quarter. These accounts were then followed-up on daily basis to ensure resolutions.

- Bank has referred 156 NPA borrowal cases involving an amount of Rs.18322.55 Cr to NCLT for resolution under IBC during FY19.

C. CREDIT MONITORING

Fresh slippage to NPA during FY19 was Rs.10726 crore comprising Rs.2786 crore in Agriculture sector, Rs.2361 crore in MSME sector and Rs.1141 crore in Retail Credit (Schematic) sector. The outstanding was NIL under SDR in MARâ18 as well as in MARâ19.

Outstanding was Rs.498 crore under S4A Standard category as on MARâ18 which came down to Rs.279 crore in MARâ19.

Total standard restructured advances remained at Rs.495 crore (Rs.149 crore in SME & Rs.346 crore in Others) in MARâ19 against Rs.945 crore (Rs.44 crore in SME & Rs.901 crore in Others) in MARâ18. There was fresh restructuring of Rs.122 crore under MSME, upgradation of Rs.172 crore to restructured standard category, decrease in existing outstanding/ closure by Rs.91 crore, moved to satisfactory list by Rs.262 crore and slipped to NPA by Rs.391 crore resulting in net outstanding at Rs.495 crore in MARâ19 under standard restructuring advances.

During MARâ19 quarter, gross slippage was Rs.2826 crore as compared to Rs.2540 crore in DecRs.18 quarter. Out of which, slippage in Agriculture Sector was Rs.886 crore (31.36% of total slippage), Rs.790 crore in MSME sector (27.95% of total slippage) and Rs.283 crore in Retail Credit - Schematic (10.00% of total slippage). Further, a sum of Rs.918 crore slipped in high value loan accounts of Rs.10.00 crore & above during MARâ19 quarter.

D. DIGITALIZATION

Alternate Delivery Channels Internet Banking:

The Bank is providing Retail Internet banking & Corporate Internet banking facilities to its customers. The Internet Banking Customers of the Bank reached 14.90 lacs as on 31^st March 2019. The Bank updated its Internet Banking Services during FY19 as under:

Facilities available to both Personal/Individual and Corporate customers

- View account balances and transactions

- Transfer funds between designated accounts

- Cheques Book request

- Stop/Revoke cheque

- Cheque Status Enquiry

- Download statement

- Bill Payment/Online Payment & e-Commerce -Personal/ Retail customer

- Bill Payment/Online Payment -Corporate customers

- Payment of Direct Tax, GST, Customs Duty, EPFO and State Taxes

- Money transfer through RTGS/NEFT to all customers and through IMPS. Customer can also schedule NEFT/RTGS for future date ( Upto 1 month only ).

- Utility Bill Payment through BBPS.

- Utility Bill Payment through Third Party integration (i.e. BillDesk, Tech Process/ Ingenico, SBIePay, CCAvenue , Atom Technologies, PayU/Citrus and Razorpay etc.).

- E-Statements.

- Registration/ Deregistration for Mobile Banking.

- Opening/closing of the Term Deposit accounts.

- Debit Card related facilities (Hotlisting, locking /unlocking, PIN generation and ATM card request).

- Internet Banking facility to NRI customers as per FEMA guidelines. Presently NEFT, NRE to NRE/NRO/Normal and NRO to NRO/Normal account fund transfer facility .

- Facility of Registration of digital certification for login and/ or transaction authentication.

- E-Tax filing/Form 26AS

- Submission of form 15G/H.

- Add Nomination for Deposit accounts.

- Enrolment for Atal Pension Yojana (APY)

- Standing Instruction (SI) creation/modification.

- SMS banking request.

- Mobile number and Email id updation.

- Purchase of Sovereign Gold Bond (SGB).

- Bulk Fund transfer through File upload. ( Corporate IB only )

- Apply for IPO

- Online Registration of Internet banking.

Mobile Banking and empower app

Bank is providing banking services through mobile application. At present there are two mobile applications: (i) All Mobile (existing Mobile Banking) and (ii) emPower. All facilities available in All Mobile application are also available in emPower in addition to more value added services. All Mobile application will be phased out. The Bank is providing Mobile Banking services to around 4.5 lakh customers through empower application.

Customers may access different banking and value added services in a convenient and secured manner on a single platform.

Features & functionalities of emPower:

- Account summary with last five transaction details

- Funds/Money Transfer facility (Intra-bank and Inter-bank through IMPS, NEFT & UPI).

- Transaction History.

- Collect Money through UPI Collect Request.

- mPassbook (passbook in electronic format) with narration and searching & sorting features.

- Mobile/DTH recharge

- Opening and Closure of FD/RD account.

- Cheque Book Issue Request.

- Bill Payment facility - Under process and will be available shortly.

- Locking and Unlocking of Debit Card transactions & Internet Banking transactions.

- Hotlisting of Debit Card

- Debit Card Pin Generation

- Debit Card Request

- Internet Banking registration

- Creation/Amendment of Standing Instruction.

- Creation/Amendment of nominee in deposit accounts.

- Mobile number and Email id updation.

- Stop/Revoke cheque

- Cheque Status Enquiry.

- Apply for IPO - Under process and will be available shortly.

- Submission of Form 15G/H - - Under process and will be available shortly.

- Payment through Bharat QR code scanning Unified Payment Interface (UPI)

The Bank has launched âAllBank Unified Payment Interfaceâ, a Mobile App which allows funds transfer facility through Mobile from one account to another account. Any Bank account holder, after registration in the app, can pay or pull funds through the application. Features & Functionalities of UPI Application:

- Virtual Payment Address (VPA) as payment identifier for sending and collecting money in contrast to providing Beneficiary Account details.

- Sender initiated (PUSH) and receiver initiated (PULL) transactions in secured and convenient manner.

- Balance Enquiry

- Instant Transfer and Collection of funds on 24X7 basis.

- Facility to add multiple bank accounts of a customer of different banks participating in UPI.

- Facility to collect money instantly from any customer having Virtual Payment Address (VPA).

- Scan & Pay through BHARAT QR Code

- Facility to send money using either of Virtual Payment Address (VPA), Account Number and IFSC, Mobile Number and Mobile Money Identifier (MMID). MMID may be generated through Mobile Banking.

RuPay Prepaid Card:

The Bank has launched RuPay Prepaid card. After reloading the card with a specified amount, the user can use the card at ATMs, POS machines & Online sites. A non bank customer can also purchase the card for use.

Point of Sale (PoS):

The Bank has launched merchant acquiring business through Point of Sale machines (PoS) for the merchants to accept payments from its customers through electronic means. All card (RuPay, MasterCard & VISA) are accepted in the PoS. Around 2995 PoS machines have been installed as on 31.03.2019.

BC Channel (AEPS & Card Based)

Under Financial Inclusion Project, the bank has provided Banking Facilities on line Inter-operable Kiosk Banking Solutions at 6106 Bank Mitra locations using Micro ATMs. The AEPS based transactions through Bio-metric authentication process & Card based transactions using Pin Pad device do happen to promote financial inclusion for both Rural & Urban masses. The PMJDY programme of GOI is being implemented in mission mode along with Financial Literacy Programme, Micro Insurance & Micro Pension Enrollment. At the other hand BC channel is also used for funded SB account opening, low cost retail deposits, recovery of Bank''s dues up to Rs.15.00 Lakh, Collection of EMI/Interest in Loan accounts as well as for Non financial services like of Balance Enquiry, Pass book Printing etc.

National common Mobility Card (NCMC):

Bank is issuing RuPay EMV Chip Dual Interface Contactless NCMC Card with offline wallet as a default option to customers as per directive received from Ministry of Finance.

SMS Alert Services

- SMS alert is being sent prior to/after account becomes inoperative to the SB & Current account holders.

- Customers are being intimated through SMS regarding deduction of penal charges for fall in minimum balance.

- Customers are being intimated through SMS regarding maturity of the Term Deposit.

ATMs

The Bank has 836 ATMs/CDs as on 31^st MARâ19.

Cheque Truncation System (CTS)

CTS has been successfully implemented in all the three grids (Northern, Western & Southern) covering pan India. 67 new centers were added in the above grids during last year. With the implementation of CTS and to consolidate banking operations and reduce operating costs, 15 service branches were dismantled during FY18.

CTS based clearing is covering about 95% of clearing volume of Banks. The CTS volume in our Bank, including both inward and outward clearing, is about 1 Lac cheques per day. CTS operations are being managed by our Service Branches at New Delhi, Mumbai and Chennai, working as Banks gateway for respective Grids.

The inward clearing volume of our Bank is being processed at Service branch, New Delhi and Lucknow for Northern Grid, Service Branch Mumbai for western and Centralized CTS Operations Centers (CCOC), Bhubaneswar for Southern Grid.

Outward cheques are processed at about 245 hub branches, linked to their respective grid.

To improve efficiency and cut the operations cost, consolidation of CTS operations with a single SI/software was done. Southern and Western Grid have now been migrated to Multigrid and Northern Grid migration to Multigrid is under process and shall be completed shortly.

Information Security

- The Bank has a well documented, Board approved IT security policy and an IT security procedure in place that is being reviewed annually to keep it updated as per latest trend and best practices.

- Board approved Cyber Security Policy and Cyber Crisis Management Plan have also been introduced separately apart from IT Security Policy and IT Security Procedure.

- Bank has set up its Cyber Security Operation Centre (CSOC) with twelve major security solutions to detect, monitor and manage cyber security events to protect its IT assets.

- The Bank has deployed various security tools such as firewall, Intrusion Detection System (IDS), Intrusion Prevention System (IPS), e-Mail Security Gateway, Antivirus Solution etc. to mitigate various security threats.

- The Bank has implemented Hyper Text Transfer Protocol Secure (HTTPS), Extended Validation Secure Sockets Layer (EV SSL) for internet banking.

- Second Factor Authentication (One Time Password /Grid Card), Virtual Keyboard and CAPTCHA are implemented in Internet Banking.

- Quarterly VAPT (Vulnerability Assessment and Penetration Testing) and yearly Information System Audit are also conducted for CBS & allied infrastructures to plug in gaps related to security, if any

Business Continuity Plan and Disaster Recovery

- The Bank has its Data Centre in Tier 4 Data Centre (DC) and a Disaster Recovery Site (DRS) for its core banking solution and other critical applications as well as a Near DR site (NDR) for business continuity.

- The Bank has ISO 27001:2013 Certification for its DC and DR site.

- The Bank has well documented, Board Approved Business Continuity Plan to provide un-interrupted Customer Services in case of any exigency.

- DR Drill is conducted on a quarterly basis to keep testing DR site''s functional preparedness for any emergency.

Other Initiatives

- CKYCR implemented in CBS.

- Registered Device (RD) Services incorporated in CBS for biometric authentication as per UIDAI guidelines.

- Integration of PFMS based e-payment system for the state of Rajasthan and Madhya Pradesh.

- Facility of sending SMS in preferred language of the customer has been implemented.

- Filling form 60 in CBS.

- Implementation of Inland Bank Guarantee Functionality in CBS.

- Implementation of GST Software Module: Bank has implemented GST software âSaralGSTâ and the module went live on 01.07.2017

- Bulk payment Facility for various agency and Corporates.

- New FI Gateway implemented & integrated with CBS SWIFT

Interface of SWIFT application with CBS, Exim Bills, treasury and Other Systems: To comply with the RBI regulatory guidelines, Bank has completed the process of integrating EximBills and CBS with SWIFT w.e.f 10.04.2018.

Digitalisation- New Business Buzz Word

The Bank has taken leap forward in digitization of its business processes. New IT initiatives have been put in place to improve delivery of services. New Digital products like UPI, Micro ATM and Aadhar Pay have been launched. The Bank has a strong network of 10171 outlets providing IT enabled online Banking Facilities with special focus on rural and remote areas of country. The Bank is focusing to innovate alternate e-delivery channels with customer friendly options.

Moving forward with Government''s thrust on digitization of transactions and gearing up for less cash society, the Bank has introduced a number of products.

- AEPS On-Us & Off-Us transactions in Aadhaar seeded accounts.

- PIN based On-Us & Off-Us transactions using RuPay cards

- Third party Deposits are allowed at BC locations.

- Aadhaar seeding facility at BC Point.

- Online account opening (Customer Enrolment ) Module.

- Account opening is enabled through e-KYC and auto population is live.

- Passbook Printing Facility is live at BC locations.

- Aadhaar based payment solution, Aadhaar Pay solution has been made live for making payment at Merchant Locations.

- Small Term Deposit (RD/FD/DDP/MIP) account opening facility is enabled at BC locations.

- Real time/Online SB account opening facility is enabled at BC locations.

- PNR Status enquiry (to check the status of account opening at BC location -12 digit reference number enquiries).

- Bhim Aadhar Pay Merchant On boarding (Mobile App) Solution.

New features have been introduced to make our existing e-products more and more convenient for our customers.

- OTP authentication for better security in e-commerce transaction

- On-line employees PF payment to EPFO

- On-line payment of customs-duty (ICEGATE)

- On-line student fee collection

Virtualization

Bank has implemented Virtualization environment for the non-core applications at DC & DRS. Currently Forty (40) applications such as Mail Messaging, CMS, ADS & DNS, UPI, GST, DeVA, Inspection, OSMC, ASBA etc. have been successfully migrated to Virtualization environment. Virtualization of the servers will provide the following benefits:

- Reduce the total number of physical servers considerably which interns contributes to reduction on Total cost of ownership

- Optimum utilization of resources viz. cores, storage, memory etc.

- Dynamic Scalability of the resource

- Increase efficiency for development and test environments

- Improve availability and business continuity Security Operation Center (SOC)

To improve cyber security posture of the bank and to achieve an effective cyber security shield against numerous threats to Bank''s IT Asset on a 24x7x365 basis, a full fledged Cyber Security Operation Centre (CSOC) has been set up by the Bank at its DC & DRS and the same is now operational with following 12 solutions:

- Data Loss/Leakage Prevention (DLP)

- Cyber Security Operations Center (C-SOC) with Security Information and Event Management solution (SIEM)

- Web Application Firewall (WAF)

- Database Activity Monitoring (DAM)

- Proxy and WEB Gateway

- Privilege Identity Management Solution (PIM)

- Anti-Advanced Persistent Threat (Anti-APT)

- Vulnerability Assessment Scanners (VAS)

- Network Access Control (NAC)

- End-point Behavioral Based Protection Solution

- Mobile Device Management(MDM)

- Anti-DDoS Call Centre Setup

- Bank has launched the service Call Centre facility in Complete outsourced model. The call centre setup facilitate various services/functionalities such as Inbound Calls (from customer), Outbound Calls (for new product promotions, soft recovery), IVR etc

Branch-wise Vacant Locker Status:

- Branch-wise position of vacant locker is being displayed in the Bank''s website.

E. MANAGEMENT INFORMATION SYSTEM (MIS)

The Bank has its Automated Data Flow (ADF) system developed in-house to provide MIS to RBI seamlessly. Bank has set up Data Repositories for Deposits, Advances and Customers information for maintaining accuracy and consistency in data provided to various stake holders. The MIS also provides data for preparation of Balance Sheet through new accounting system IndAS.

The present MIS setup of the Bank is the result of in-house development and caters to all the scheduled and adhoc data requirements of the various offices of the Bank and that of all the regulators as well.

Recently the MIS department has stepped into data analytics technology to support the decision making process of the Bank.

Status of Implementation of Ind AS

For effective implementation of Ind AS, a Steering Committee headed by an Executive Director has been formed at Head Office, to monitor the progress of implementation of Ind AS from time to time. Moreover, a separate Ind AS Cell to handle various activities pertaining to implementation of Ind AS has been formed at Head Office. Necessary system changes, including IT, have been envisaged and the steps for implementation of such changes are in progress.

As per earlier RBI guidelines, banks were required to implement Indian Accounting Standards (Ind AS) from Financial Year 2019-20, with comparatives of previous year. RBI vide its notification dated 22.03.2019, has advised their decision to defer the implementation of Ind AS till further notice, since the legislative amendments recommended by them are still under consideration of the Government of India.

Bank has been submitting Proforma Ind AS financial statements as per Ind AS to RBI every quarter, within 15 days of declaration of quarterly results or within 60 days from the end of the quarter, whichever is earlier, as per directives of RBI. The last such Proforma Ind AS Financial Statements submitted was for the period ended 31^st December 2018.

F. BRANCH AND OFFICE NETWORK

Domestic Presence

The Bank has pan India presence of 3229 branches. Out of 3229 domestic branches, 1205 are at Rural, 759 at Semi-urban, 647 at Urban and 618 in Metropolitan Centres. 1 new branch has been opened during FY19 at Rural center. Further, 8 Metro, 2 Urban, 5 semi-urban and 2 Rural branches have been merged to consolidate the business of closely located centres.

International Presence

The Bank is having one overseas branch with a dealing room at Hong Kong. In the current financial year, in order to consolidate it''s operations the Board has approved for the closure of its Hong Kong operations. Accordingly the business of Hong Kong branch has decreased from Rs.12,871.38 crore as on 31^st MARâ18 to Rs.3,299.29 crore as on 31^st MARâ19.The business of the branch decreased by 74.37% on Y-o-Y basis. The total deposit as on 31^st MARâ19 stood at Rs.33.15 crore, whereas advances stood at Rs.3,266.14 crore. The Hong Kong branch earned operating profit of Rs.57.59 crore and net loss of Rs.46.06 crore in FYRs.19. The net loss is due to increase in provisions on NPA accounts.

G INTERNATIONAL BANKING

During the year Bank has opted for centralization of foreign exchange business through its Forex Processing Cells at Kolkata and Mumbai. The Bank also has a centralized fully equipped Forex dealing room at Integrated Treasury Branch, Mumbai which handles forex transactions in 9 currencies and maintains 13 Nostro accounts and 1 Vostro account. Export Credit of the Bank as on 31^st MARâ19 stood at Rs.2,434.57 crore as compared to Rs.2,424.65 crore as on 31^st MARâ18. The Bank is taking all steps to increase the credit flow to exporters. The Bank maintains correspondent relationship with prime banks abroad. The Bank is also catering to the needs of Non-Resident Indians through its branches by providing various types of deposit & loan products e.g. FCNR, NRE & NRO deposits, Housing Loan etc. Presently Bank is having an arrangement with M/s. Unimoni Financial Services Ltd. to facilitate Money Transfer Services to the domestic customers receiving remittances from their relatives residing abroad. Bank during the year has also initiated the process for entering into fresh agreement with M/s EBIX Money Express Pvt. Ltd.(EBIXCASH) in order to increase global reach under MTSS scheme of Reserve Bank of India.

H. OPERATIONS DIVISION

Business Processes

Business Process Re-engineering (BPR) Cell is functioning with the purpose of bringing desired changes in the existing systems and processes, products and business processes of the bank on a continuous basis for maximizing performance, mainly productivity and efficiency.

With a view to optimisation of resources, reducing operating costs, the bank is taking steps for re-organisation of establishments, prune establishments which are not essential. One such move is introduction of Transformation Project namely Navoday - Rising for a Change-Changing to Rise.

Under the said project various changes have been introduced like dedicated processing centres to improve the turnaround time, asset quality and customer service. The dedicated Retail and MSME Processing centres will bring uniformity in loan sanctions and procedures followed.

More stress is laid upon less paper banking by introduction of green channel for cash transactions at the branches namely Sugam.

The bank has identified a number of areas where new systems & processes are under development. This will improve the customer convenience and quality of customer service.

I. BUSINESS DIVERSIFICATION

a. Insurance Business:

Total income earned from marketing of wealth products stands at Rs.74.44 Cr as on 31.03.2019 against Rs.53.43 Crore earned till 31.03.2018 registering a growth of 39.32% i.e. Rs.21.01 Cr in excess to that earned for similar period in last financial year.

i. Life Insurance:

Bank has a corporate agency with M/S Life Insurance Corporation of India and SBI Life Insurance.

Income under Life Insurance business witnessed a growth of 49.12% on Y-O-Y basis registering an income of Rs.11.81 Cr as on 31.03.2019 against Rs.7.92 Cr in the preceding year up to 31.03.2018. An increase of Rs.3.89 Cr is achieved in absolute terms.

ii. Non Life Insurance:

Bank, as a corporate agent of M/s. Universal Sompo General Insurance Company Limited, earned revenue of Rs.17.53 crore (including HCP) as against Rs.17.05 crore, during FY18.

Under Health Insurance segment, Health Care Plus Scheme has generated an income of Rs.3.11 Crore as on 31.03.2019 against Rs.2.35 Cr for the similar period last year registering a growth of 32.34%

b. Mutual Funds:

Bank is distributing the Mutual Fund schemes of 6 AMCs i.e. Reliance Nippon AMC, PNB Principal AMC, Kotak Mutual Fund AMC, UTI MF AMC, Franklin Templeton AMC and Essel AMC (formerly known as Peerless) through Bank branches.

Bank earned commission of Rs.53 lacs from distribution of Mutual Fund.

c. Depository Services:

Income in Depository Operations stood at Rs.0.69 Cr as on 31.03.2019 which has grown 27.78% in comparison to the income earned last year i.e. Rs.0.54 Cr as on 31.03.2018.

Online facility to open Trading account has been made live with our channel partner Aditya Birla Money Ltd.

d. Applications Supported by Blocked Amount (ASBA) Services:

Being Self Certified Syndicate Bank (SCSB) for submitting of application in public issues (IPO/FPO/ Right Issue), this facility has now been made available from all the branches of the Bank and also through Internet Banking for Retail Customers.

ASBA facility is also available for Syndicate/Sub syndicate Members for processing broker bidded IPO forms at 92 designated bank branches. During FY 2017-18, the Bank processed applications of the customers for 206 IPOs.

e. Cash Management Services:

Activities undertaken under CMS business have earned an income of Rs.43.88 Cr. as on 31.03.2019 against Rs.27.37 Cr for the similar period in last fiscal. An absolute growth of Rs.16.51 Cr. is registered which is 60.32% higher than the previous year.

New Products & Initiatives

a. 1/1/1 Newly launched Customer Relationship Management Initiative

In order to enjoy edge over other Banks in acquisition & retention of valuable individual customers such an initiative was launched in which the Branch Head is required to personally contact/get in touch with the new customer under target group as under:

- After 1 Day of opening of account:

-For thanking him/her for showing interest in the Bank.

- After 1 Week of opening of account:

-For confirming that he/she has received Debit Card, Cheque Book, Internet Banking Kit, Mobile Banking facility etc.

- After one month of opening of account:

-For confirming that everything is going on fine and trouble shoot in case of any deficiency.

b. MACT Claims SB Account and Motor Accident Claims Deposit Account

In terms of the direction of Hon''ble Delhi High Court and in line with the model scheme drafted by IBA, our Bank has formulated special Deposit Products for disbursement of compensation amount to the victims of road accidents, so that compensation amount may be disbursed by the Claims Tribunals to the claimant(s) in a phased manner.

The one time lump sum amount, as decided by the Court/ Tribunal as compensation to the motor accident victims, will be deposited in a special Term Deposit Account in the name of the claimant to be opened for the purpose, known as âMotor Accident Claims Annuity Deposit (MACAD)â. The amount will be received by the claimant from the Bank in Equated Monthly Installments (EMIs) comprising a part of principal amount as well as interest. Bank will deposit the EMIs over a certain period, as decided by Court, to a special SB Account of the claimant to be opened by the Bank, named âMACT Claims SB Account.â

c. Capital Gains Accounts Scheme 1988

Government of India, Ministry of Finance, Department of Revenue (Central Board of Direct Taxes) formulated a Scheme called the Capital Gains Accounts Scheme,1988â for the tax payers to avail the benefit of exemption from Capital Gains on or before due date of filing return of income. In terms of the said scheme, our Bank has introduced two separate types of accounts Deposit Account Type A (Savings Account) and Deposit Account Type B (Term Deposit Account) which may be cumulative or non-cumulative. Eligible taxpayers who wish to claim exemption from income arising on sale of long term Capital Assets, meant for re-investment by way of acquisition of any other specified asset within stipulated time frame, may avail the scheme.

d. AllBank GenX - A specially designed Savings Account for the Youth

In order to tap the huge potential for economic and social progress of youth of the nation in the age group of 18-40 years and to meet their dynamic financial needs and aspirations, Bank has decided to offer a specially designed product, âAllBank GenXâ for them.

The product encompasses multiple benefits,viz. concessional rates on MSME loans and education loans, waiver of processing charges on housing loan and car loan, discount on locker rentals and optional health insurance premium, free remittances and demat account for first year and much more.

The product thus not only inculcates the habit of Savings in today''s Youth but also empowers them to achieve greater ''Financial Freedom'' by catering to their Savings, investment and lifestyle needs.

e. AllBank Kishore

Keeping in mind the Banking needs of Minors in the Age Group of 10-18 years, Bank has introduced AllBank Kishore for educating them the art of ''Saving'' and tenets of financial discipline. The product envisages various benefits like minimum opening amount of Rs.500/- with no average minimum balance requirement, Cash withdrawal limit of Rs.10000/- per day, internet banking & empower facility with transaction limit of Rs.10000/- per day. Facility of Rupay debit card with transaction limit of Rs.5000/- per day with no maintenance charge for the 1^st year and concessions in interest rate of education loans. The account will be converted to AllBank Gen-X automatically on attainment of 18 years.

f. AllBank Salaam Savings Account

The Bank has introduced a new Savings Banks account named as AllBank Salaam, specially designed for Indian Soldiers who work in far flung locations of the country to ensure national security.

With the introduction of this product, Defence Personnels can get an easy access of the banking facilities. Moreover, special offer and discounts for the âAllBank Salaamâ account holders is a wonderful gift by the Bank to the Defence Personnel for their selfless service to the nation.

âAllBank Salaamâ Account offers a host of features, benefits, and concessions, including the life time unique zero balance Savings Account. Defence Personnels will also be able to get wealth advisory services through Branch Manager, who will be a one point contact for all financial services needs including banking, investments, insurance, and other special needs.

g. AllBank FDD-Foundation Day Deposit for 155 days & 333 days

With a view to mobilise sizeable volume of Domestic Retail Term Deposits and with recent increase in the amount for classification of Bulk Deposits, the Bank has decided to introduce a Foundation Day Deposit (FDD) products for 155 days, valid up to 31.03.2020, to celebrate 155th Anniversary of the Bank and 333 days, valid up to 31.03.2020, to generate the growth of Retail Term Deposits that bundles many benefits viz. co- branded credit card, facility of loan/overdrafts. The product is available to all the customer categories.

h. Introduction of new Savings Account, Current Account, TASCG(Trust, Association, Society, Club and Government) Accounts

In order to augment low cost deposits in a substantial manner to reduce the cost of resource mobilization and dependence on high cost bulk deposits new Savings Account (Silver, Gold & Platinum), Current Account (Silver, Gold & Platinum) and TASCG (Trust, Association, Society, Club and Government) Accounts were introduced. The products have lucrative features like discount on service charges, processing fees of retail loans, NEFT/RTGS and many more to attract new customers.

i. Doorstep Banking Services- Senior Citizens more than 70 years of age and differently- abled or infirm persons

In order to provide convenient and friendly Banking services to Senior Citizens of more than 70 years of age and differently abled persons (having medically certified chronic illness or disability) including those who are visually impaired, a Scheme has been formulated by our Bank. Such Door-Step banking facility includes pickup of cash and instruments against receipt, delivery of cash against withdrawal from account, delivery of IOIs, submission of KYC documents and Life Certificate at the premises/ residence of such customers. Door-Step Banking services will be provided at the residence/office of the eligible customer or at any place as specified by him/her in the application form. The Pickup and delivery address may be changed by the customer subsequently by giving a written request for the same. However, the distance of the pickup/ delivery point will be restricted to 10 kms. from the branch.

j. emPower

In order to strengthen the digital delivery effectively, the Bank has introduced a mobile app named âempowerâ. This app is available on Playstore / AppStore which has since been downloaded by over 1 million customers and transactions on this app are increasing on daily basis. The APP is scheduled to get major enhancements like Chatbot and Artificial Intelligence based e-Commerce payments.

J. GOVERNMENT BUSINESS

a. Atal Pension Yojana (APY)

Since inception, we have mobilized 4.08 lac subscribers under Atal Pension Yojana as on 31.03.2019. In FY 2018-19 number of APY subscribers mobilized is 1.74 lac.

- Hon''ble MD & CEO of our Bank qualified for award & felicitation by PFRDA / DFS in APY campaign âLeadership Capitalâ.

- Hon''ble Executive Director of our Bank qualified for award & felicitation by PFRDA / DFS in campaigns âMakers of Excellence-2.0â & âBig Believersâ.

- Corporate General Manager of our Bank qualified for award & felicitation by PFRDA / DFS in APY campaign âExemplary Eightâ.

- âZonal Head, Guwahatiâ and âBranch Head Bangaon branchâ nominated to receive award from PFRDA / DFS for exemplary performance in APY campaign âArt of Inclusionâ.

b. National Pension System (NPS)

There are three NPS corporate clients in our bank namely Allahabad Bank, Tenughat Vidyut Nigam Limited (TVNL) and Rahee Infratech Ltd. For Allahabad Bank total 13782 corporate accounts have been mobilized as on 31.03.2019. We are conducting sensitization programme at various locations to mobilize more NPS All Citizen & Corporate accounts.

c. Sukanya Samriddhi Accounts (SSA)

Since inception we have mobilized total 28187 accounts having total balance of Rs.128 crore as on 31.03.2019. In FY- 2018-19 we mobilized 12542 accounts.

d. Public Provident Fund (PPF)

Since inception we have mobilized total 121406 PPF accounts having total balance of Rs.2893 Crore as on 31.03.2019. During FY- 2018-19 we mobilized 33588 accounts.

e. Senior Citizen Savings Scheme (SCSS)

Since inception we have mobilized total 20965 SCSS accounts having total balance of Rs.1074 Crore as on 31.03.2019. In FY- 2018-19 we mobilized 17402 accounts.

f. CBDT

We have total 1012 authorized branches for CBDT collection. In FY 2018-19 total 5.50 lac CBDT transaction was done through our bank out of which 3.26 lac transactions were in physical mode and remaining 2.24 lac transactions were online transactions.

g. Goods & Services Tax (GST)

All of our branches are equipped for collection of GST. In FY 2018-19 total 3.45 lac GST transactions were done through our bank out of which 0.20 lac transactions were in physical mode and remaining 3.25 lac transactions were online transactions.

h. Pension Disbursement

Our bank is presently disbursing pension to1.08 lac Central Pensioners & 0.70 lac state pensioners. Central pension is being disbursed through Central Pension Processing Centre, Lucknow. We are in the process of migrating disbursement of State Government Pensioners through CPPC, Lucknow.

K. TREASURY - OPERATIONAL HIGHLIGHTS

Domestic Operations:

The treasury booked a trading loss of Rs.267.44 crores during FY19, thereby posting a Y-o-Y de-growth of 56.17% over FY18. Further, the Interest Income earned during FY19 was Rs.4937.61 crores, a 20.59% Y-o-Y growth over the previous period. There was an increase in domestic Investment portfolio of Rs.12,257.36 crores, i.e., from Rs.68,738.24 crores in MARâ18 to Rs.80,995.60 crores in MARâ19.

Portfolio Highlights:

The global investment portfolio of the Bank as on 31.03.2019 stood at Rs.81,317.46 crores, which included domestic investment of Rs.80,995.60 crores and Overseas investment by our HongKong Branch to the tune of HKD 365.33 mio, i.e., Rs.321.86 crores (converted @ 1HKD = Rs.8.81).

The portfolio of Rs.81,317.46 crores was split in to HTM category carrying Rs.49,816.08 crores (i.e., 61.26%), AFS Category carrying Rs.31,501.38 crores (i.e., 38.74%) and HFT category carrying Rs.0.00 crores(i.e. 0.00%).

On an effective NDTL of Rs.2,22,220.51 crores as on 31.03.2019, the Bank maintained SLR securities of Rs.56,218.31 crores which was 25.30% of NDTL against a requirement of 19.25%. Out of our SLR holdings, Rs.36,386.28 crores, which was 16.37% of NDTL, was held in HTM category against a limit of 19.50%.

The Bank''s NSLR portfolio of Rs.25,099.15 crores comprised mainly of Rs.13240.00 Cr of GOI Recapitalization Bond, Rs.4088.74 crores of Bonds/ Debentures, Rs.1836.26 crores of Security Receipts and Rs.1318.80 crores of shares, Rs.3611.77 crores of CD and Rs.25.02 crores of Special SDL Bonds, Subsidiary & JV of Rs.156.27 crore, HKTB of Rs.321.86 Cr and Others for Rs.500.44 crore. The equity portfolio of the Bank stood at Rs.1318.80 crores, which included Rs.930.13 crores of shares received through conversion of Debt under CDR/SDR/S4A schemes.

L. CUSTOMER CARE

The Bank has formulated customer centric policies, such as Customer Rights Policy, Deposit Policy, Cheque Collection Policy, and Compensation Policy and these are displayed in Bank''s website. The Bank has adopted âThe Code of Bank''s Commitment to Customersâ & âCode of Bank''s Commitment to Micro & Small Enterprisesâ formulated by BCSBI. Citizen Charter is adopted by the Bank and is available at the branches and website of the Bank. The Bank also conducts Customer Service Committee meetings at every branch and Zonal Office on monthly basis for providing better customer service. Based on the feedback received and issues raised by the customers, the Bank also conducts a quarterly meeting of Standing Committee on Customer Service and the same is placed before the Customer Service Committee of the Board on quarterly basis.

Customer Grievance Redressal Cell

A web based Portal, aimed at providing the customers with a platform to lodge their grievances against the Bank for deficiency in services, has been provided on the Bank''s website, www.allahabadbank.in, under Customer Care. Complaints received directly at Head Office are also lodged through this portal for monitoring, record & follow up. In order to prioritise & expedite the redressal, all Complaints are categorized into 3 Baskets viz, A,B & C. Complaints received through MOF, DPG (CPGRAMS portal), RBI, BCSBI, MPs/ MLAs and other regulators are put in the Basket A for their expeditious redressal. Bank has a dedicated Customer Grievance Redressal Cell at Head Office. The Principal Nodal Officer, of the rank of General Manager designated by the Bank, monitors the implementation of customer service and complaint handling mechanism for the entire Bank. Complaints received from customers are being redressed and suitable replies are sent to the customers. The partially or wholly rejected complaints are escalated to the Internal Ombudsman for obtaining an impartial view of the customers'' grievances.

Initiatives taken during FY19 for improvement in customer service

Several initiatives were taken to provide timely and quality redressal to customer complaints. Auto-escalation of complaints has been made functional for systematic and timely redressal of complaints. Real-time tracking of complaints and provision for receiving customer feedback has also been implemented in the CGRS Portal. A 24*7 Contact Centre has also been opened in Hyderabad to take complaints through phone call.

Disclosure of Complaints

No. of Complaints pending at the beginning of the year	134
No. of Complaints received during the year	39081
No. of Complaints redressed during the year	35978
No. of Complaints pending at the end of the year	3237

Excluding AUPGB

Awards passed by the Banking Ombudsman	No. of Awards passed

No. of unimplemented awards at the beginning of the year	NIL
No. of Awards passed by Banking Ombudsman during the year
No. of Awards implemented during the year
No. of unimplemented awards at the end of the year

M. PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

The Parliament of India passed the âSexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013â in the year 2013. The Act provides protection against sexual harassment of women at workplace and for the prevention and redressal of complaints of sexual harassment and for the matters connected therewith or incidental thereto.

The Bank has constituted committee under the sexual harassment of women at workplace (prevention, prohibition and Redressal) Act, 2013 and has devised a Complaint Mechanism to redress the complaint(s) made by the victim(s) and to ensure time bound treatment of the same.

The Bank is committed to provide a safe and conducive work environment to its employees during the financial year.

No. of complaints filed during the financial year	No. of complaints pending as at end of the financial year
3	0

N. IMPLEMENTATION OF OFFICIAL LANGUAGE POLICY

The Bank has been leading in the area of implementation of Official Language and achieved all targets in all parameters prescribed by Government of India, Ministry of Home Affairs, Department of Official Language for FY19. In addition, the Bank is using Unicode Fonts for Hindi correspondence at all level. During FY19, the Bank has been bestowed various awards for its excellent performance for the use of Hindi. Further Town Official Language Committees situated in different locations of the country have also awarded the Bank offices including First Prize to our Head Office by Town Official Language Implementation Committee (Bank), Kolkata. The bank is successfully convening the Town Official Language Implementation Committee constituted by the Government of India in Ranchi and Gonda. Town Official Language Implementation Committee (Bank), Ranchi has been awarded with Third Prize in Eastern Zone under Region âAâ for the year 2017-18.

The third sub-committee of Committee of Parliament on Official Language visited our Rudrapryag Branch under ZO Dehradun on 03.05.2018 and Sanatan Dharm Mandir Marg Gwalior Branch under ZO Bhopal on 29.08.2018. The Committee not only expressed satisfaction but also appreciated the efforts made by the Bank for progressive use of Hindi. Officials of DFS, MOF, GOI also inspected our Zonal Office, Delhi NCR on 30.07.2018 and ZO Nagpur on 09.11.2018 regarding implementation of Official Language and appreciated the work being done by the Bank for implementation of Rajbhasha.

The Bank observes âHindi Maahâ in the month of September every year. Various competitions are organized at all India level in which staff members of all cadres participate enthusiastically. The winners are awarded with prizes in Rajbhasha function. This year also, the Bank organized Hindi Maah and other programmes/competitions and winners were awarded in the main function of Hindi Diwas.

Further, selected Hindi essays from All India Inter Bank Hindi Essay Writing Competition organized by the bank have been compiled and published namely âAvsar Aur Chunautian: NPA Vasooli, E-Banking Aur Jokhim Prabandhanâ and same has been released during Hindi Diwas programme.

Akhil Bhartiya Rajbhasha Adhikari Sammelan was organized by the Bank at Staff College Kolkata on 28-29 March, 2019. Offices which performed remarkably well in implementation of Official Language have been awarded with Shield and Certificates by our Hon''ble Managing Director and Chief Executive Officer.

O. JOINT VENTURES & ASSOCIATES

- The Bank holds 27.04% equity stake in Asset Management Company âASREC (India) Ltd.â, along with other Banks/ Institutions.

- The Bank holds 28.52% equity stake in insurance company namely âUniversal Sompo General Insurance Company Limitedâ along with Indian Overseas Bank, Karnataka Bank Ltd., Dabur Investment Ltd. and Japanese insurance major âSompo Japan Nipponkoa Insurance Incâ

- Allahabad UP Gramin Bank (AUPGB) with Head Office at Banda (UP).

Allahabad UP Gramin Bank (AUPGB)

Allahabad UP Gramin Bank (AUPGB) with Head Office at Banda (UP) was sponsored by our Bank till 31.03.2019.

The Government of India vide notification no. 7/8/2017-RRB (Uttar Pradesh II) dated 25.01.2019 has notified the amalgamation of AUPGB and Gramin Bank of Aryawart (sponsored by Bank of India) into a single Regional Rural Bank. The AUPGB, our sponsor RRB has ceases the business w.e.f 01.04.19 and amalgamated to Gramin Bank of Aryawart, sponsored by Bank of India (BOI).

During the last financial year, total business of AUPGB rose to Rs.18204 crore in MARâ19 from Rs.16541 crore in MARâ18 showing Y-o-Y growth of 10.05%. The Net loss of our sponsored RRB in FY19 stood at Rs 459 crore as against profit of Rs.35.32 crore in FY18.

P. AWARDS AND ACCOLADES

- Shri SVLN Nageswara Rao, General Manager of our Bank has been awarded by PFRDA as âExemplary Eightâ Best Performing General Manager for their APY registration campaign in January 2019.

- Bank was awarded Banking Technology 2019 awards by IBA at a function held at Mumbai on the following parameters : 1) Best Payment Initiatives (2) Best Financial Inclusion Initiatives (3) Most Innovative Product using Technology

- FGM New Delhi Shri Vikas Kumar received âLeadership Capitalâ award on behalf of our Hon''ble MD & CEO Shri CH S S Mallikarjuna Rao conferred by PFRDA/DFS on 23.01.2019 at New Delhi for mobilizing 27355 number of new APY Subscribers during the Campaign period 12.11.18 to 30.11.18

- Bank Received award of âMakers of Execellence-ME-2.0â in Financial year 2018-19 from PFRDA

- Bank has been conferred 3rd Rank in the category of Best Performing Public Sector Bank in terms of average Aadhaar Generation and Update. Bank also bagged 7th rank in the category of âAchievers Awardâ for opening highest percentage of Aadhaar Centres as per given targets.

Q. PCA FRAMEWORK OF RBI & PSBs REFORM AGENDA OF GOI

Owing to high non-performing assets (NPA) and negative Return on Assets (RoA) for two consecutive years, Bank was brought under Prompt Corrective Action (PCA) framework by RBI on 2^nd January 2018.

During FY19, Government of India infused capital to the tune of Rs.11740 crore in three tranches. The RBI, on the basis of capital infusion, decided to lift the restriction imposed on the Bank under the PCA framework with effect from February 26, 2019.

The Bank is also pursuing the reforms agenda (EASE) prescribed by the MOF, GOI for turnaround of the Bank.

R. FUTURE BUSINESS PLAN OF THE BANK

Business Growth:

Bank is looking at a modest business growth of 9% during FY20 through focus on consolidating CASA base & increasing dependency under retail sector.

Slippage:

We expect slippage to moderate and to be contained at approximately 1% per quarter.

Recovery/Resolution:

Dedicated SAM verticals are in place to ensure recovery of around Rs.2000 crores/quarter.

Earnings:

We expect the Bank to break even during Q1FY20 and thereafter to post Net Profits consistently. The NIM is expected to be around 2.65% and visible improvement in Cost to Income Ratio.

Capital Raising Plans:

The Bank shall be requiring to augment growth capital during the year and has obtained board approval for raising equity capital up to Rs.4000 crores through various modes during the year.

S. BOARD OF DIRECTORS

As on 31.03.2019, there were 10 Directors on the Board of the Bank including 3 whole time Directors, i.e., one Managing Director & Chief Executive Officer (MD & CEO) and two Executive Directors. During FY19, following changes took place in the composition of Board of Directors.

- Shri CH. S. S. Mallikarjuna Rao took over as the MD & CEO of the Bank w.e.f 19^th September 2018.

- Shri K. Ramachandran was appointed as the Executive Director of the Bank w.e.f 26.12.2018.

- Shri P.R. Rajagopal was appointed as the Executive Director of the Bank w.e.f 01.03.2019.

- Prof Radha R Sharma was re-nominated as Part Time Non-Official Director w.e.f 01.03.2019 after completion of her tenure on 27.01.2019.

- Shri S. Harisankar Ex-Executive Director on the Board of the Bank was appointed as MD & CEO of Punjab & Sind Bank on 19.09.2018.

- Shri N.K. Sahoo Ex-Executive Director retired on 28.02.2019.

- Smt Usha Ananthasubramanian Ex- MD & CEO demitted office on 13.08.2018 as per GOI directive vide DFS, MOF notification No- F. No. 16/13/2018-BO. I dated 13.08.2018.

T. DIRECTORS'' RESPONSIBILITY STATEMENT

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

- The applicable Accounting Standards were followed along with proper explanation relating to material departures, if any;

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

- Reasonable and prudent judgment and estimates were made so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the proft/loss of the Bank for the year ended March 31, 2019;

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

- The accounts have been prepared on the principle of âgoing concernâ basis.

U. ACKNOWLEDGEMENT

The Board of Directors places on record its gratitude to the Reserve Bank of India, Securities Exchange Board of India, and Government of India and other regulatory authorities and financial institutions for their co-operation, strong support and guidance. The Board acknowledges the support of shareholders and also places on record its sincere thanks to its valued clients and customers for their continued patronage. The Board also expresses its deep sense of appreciation for the commitment shown by the employees in supporting the Bank in its performance on all fronts.

For and on behalf of the Board of Directors,

(CH. S. S. Mallikarjuna Rao)

Managing Director and CEO

Mar 31, 2018

During the financial year 2017-18 (FY18), the Bankâs global business reached the level of Rs.3,80,040 crore (Rs.3.80 lakh crore), registering a Y-o-Y growth of 5.57%. The Bankâs international business stood at Rs.12,871 crore and recorded a negative Y-o-Y growth of -8.91% on account of 12.82% Y-o-Y drop in overseas advances. Global deposits of the Bank stood at Rs.2,13,604 crore which increased by 5.81% and gross advances grew by 5.27% and stood at Rs.1,66,436 crore as at the end of March18. Your Bankâs continued focus on low cost deposits resulted in a healthy Y-o-Y growth of 7.45% in CASA deposits and the build-up stood at Rs.98,419 crore as on 31st March18. Subsequently, CASA share improved to 46.50% as on 31^st March18 from 45.79% a year ago.

The Bankâs operating profit decreased by 11.08% Y-o-Y on account of stress on advances portfolio and resultant reversal/ non-booking of interest. It stood at Rs.3438 crore during FY18. In terms of net profit, the quantum of losses increased in FY18 as provisions were higher by 94.07% and there was a decrease in net-interest income levels. Net loss rose to Rs.4674 crore in FY18 as compared to a net loss of Rs.314 crore a year ago. The Bankâs CRAR stood at 8.69% in FY18 as compared to 11.45% in FY17. Owing to reduction in bulk deposits, the cost of deposits decreased to 5.33% during FY18 from 5.94% in FY17.

Against this backdrop, your Directors take pleasure in placing the Bankâs Annual Report for 2017-18 along with audited annual financial statements.

OUR PERFORMANCE

A. FINANCIAL HIGHLIGHTS

A.1. BALANCE SHEET

( Amount Rs. in Crore)

Parameter	31^st March17	31^st March18	Y-O-Y GROWTH %
Total Business	359974	380040	5.57
Total Deposits	201870	213604	5.81
Gross Advances	158103	166436	5.27

A.2. PROFIT

(Amount Rs. in Crore)

Parameter	31^st MARâ 17	31^st MARâ 18	Y-O-Y GROWTH %
Operating Profit	3867	3438	-11.08
Provision	4180	8113	94.07
Net Profit/(Loss)	(314)	(4674)

A.3. KEY RATIOS

Parameter	Marchâ 17	Marchâ 18
Cost of Deposits	5.94	5.33
Cost of Funds	5.74	5.23
Yield on Funds	8.41	7.61
Cost of Borrowings	3.52	4.15
Net Interest Margin	2.54	2.20
Return on Assets	-0.13	-1.96
Cost to Income Ratio	51.25	53.69

B. ASSET QUALITY

FY18 was a challenging year for the Indian Banking Industry due to continued stress faced in asset quality on account of various macroeconomic and other factors. As on 31^st March18, Gross NPA of the Bank stood at Rs.26562.76 crore (FY17: Rs.20687.83 crore) and Net NPA remained at Rs.12229.13 crore (FY17: Rs.13433.51 crore). In terms of ratio, Gross NPA Percentage and Net NPA Percentage were 15.96% (FY17: 13.09%) & 8.04% (FY17: 8.92%) respectively.

The Bank initiated various measures to arrest fresh slippage and restricted it to Rs.12903.28 crore for the FY18 compared to Rs.11417.00 crore for the FY17. Provision Coverage Ratio (PCR) also improved to 62.91% in FY18 from 50.11% in FY17.

To improve asset quality, the Bank initiated consistent recovery drive and recovered Rs.3379.08 crore, out of which Cash Recovery was Rs. 2071.86 crore with a growth of 28.58 % due to concerted efforts, daily monitoring and account specific resolution plan. During the aforesaid period, total Reduction in NPA accounts stood at Rs.7028.32 crore.

The Bank also made suitable amendments in existing OTS schemes by increasing the cut off limit from Rs.10.00 lacs to Rs.15.00 lacs in OTS module for other NPA a/cs in Thumb Rule module as in existing module for Farm Sector. This resulted in accelerated settlement of Unsecured small borrowal accounts. Further, power to sanction OTS in fraud declared accounts was also delegated to various authorities but not below the level of FGMLCC, subject to placement of process notes to Board of Directors/ MCBOD for information on monthly basis.

Further, compromise/negotiated settlement through Rin Mukti Shivir and one-to-one meeting with borrowers was adopted as another vital tool to tackle NPAs.

However, recovery in big borrowal accounts above Rs.1.00 crore remained a constraint for the Bank for obvious reasons. For follow-up, monitoring and recovery in these accounts, online module âPARTHâ (Portal for Asset Resolution through Hot chase) was introduced which was very useful in assuring resolution in this segment. Now the coverage in PARTH has been extended to NPA accounts having outstanding above Rs.50 lakhs.

For effective and timely monitoring of NPA accounts and follow up of due process in NPA accounts having Ledger balance of Rs.50.00 Lacs and above, concept of âWar Roomâ has been introduced at Head Office level with dedicated executives.

The Bank also has 9 Asset Recovery Management Branches (ARMBs) which function exclusively for resolving NPAs.

Initiatives taken during FY18

- The Bank introduced Online Module âPARTHâ for effective monitoring of big borrowal accounts having outstanding above Rs. 50.00 lacs. Hot chase of such borrowers and timely legal action increased our penetration rate to crack these accounts for recovery.

- Bank introduced âWar Roomâ with dedicated executives (Two Asstt. General Managers and One Chief manager) at Head Office level for close monitoring of due process in NPA accounts having outstanding balance of Rs.50.00 lacs and above.

- Suitable amendments in OTS module by increasing the Cut Off limit from Rs.10.00 Lacs to Rs.15 Lacs for Thumb Rule method in other NPA accounts.

- Power to sanction OTS in fraud declared accounts was also delegated to various authorities but not below the level of FGMLCC, subject to placement of process notes to Board of Directors/ MCBOD for information on monthly basis. This resulted in settlement of 71 OTS proposals with ledger balance of Rs.6.52 Cr and Compromise sum of Rs.4.02 Crore in Fraud declared accounts.

- Monitoring of daily recovery was introduced with Zones/ FGMOs to improve penetration in NPA accounts.

- The Bank organized 12 Recovery Camps in the previous year (one camp in each month) involving all the branches. This step was very successful in terms of recovery that amounted to Rs.3564.55 crore. Services of Recovery Agencies and Banking Correspondents were properly utilized for marketing of One Time Settlement Schemes (OTS).

- During the FY18 Bank sanctioned 73198 Compromise cases with ledger balance of Rs.1123.18 crore and compromise amount of Rs.700.32 Crore.

- The Bank participated in National Lok Adalat actively and settled 26950 cases having outstanding of Rs.314.56 crore.

- Nodal Officer at each DRT centre was assigned the role of follow-up of legal cases on daily basis so as to minimize delay in obtaining decrees and execution.

- Sale of chronic/difficult accounts to ARC was another option available to tackle rising NPA. This was utilized in 216 accounts and assets worth Rs.2539.21 Crore were sold to various agencies during the FY18.

- For effective and better monitoring, all NPA borrowal accounts were categorized under four broad heads, viz.

(i) Below Rs.50,000 (ii) Rs.50,000 to Rs.15,00 lakhs (iii) Rs.15.00 lakhs to 1.00 crore and (iv) above Rs.1.00 crore. While OTS is the main focus in first two stages, other additional options like sale under SARFAESI, declaration of willful Defaulter, restructuring, suit at DRT are followed very methodically for next two categories. Resolution through IBC/ NCLT are also used as important tools for recovery in high value NPA accounts. Further, for borrowal accounts having outstanding above Rs.1.00 crore, monthly VC meetings are held with Zonal Heads and FGMs and âDoableâ accounts are identified where turnaround/ recovery is expected within the quarter. These accounts are then followed-up on daily basis to ensure resolutions.

RBI vide its circular no. RBI/2017-18/131 DBR.No.BP.BC. 101/ 21.04.048/ 2017-18 dated February 12, 2018 issued Revised Frame-work for Resolution of Stressed Assets. As an impact of the said circular, slippage to NPA was Rs.1565 Cr and a provision of Rs.645 Cr in Q4 of FY 18. The Bank has taken adequate steps to comply with the guidelines.

The Bank is classifying accounts into SMA as per the revised RBI guidelines and reporting them on CRILC accordingly.

Monitoring of accounts is done right from SMA-0 level. The Branches / offices are continuously followed up for stepping up credit monitoring through use of various credit monitoring tools, such as Unit Visit, Stock statement & DP assessment, Stock verification, End use verification, Security Visit & Valuation, QIS monitoring, Conduct of account, Stock Audit, Loan review Mechanism, Periodic legal Audit, Inspection & Concurrent Audit, CRILC, Daily SMA tracking, Early Warning Signals etc.

Document Electronic Verification & Archival (DeVA) is used as a pre -disbursement tool to check & verify documentation & to weed out irregularities if any. LAMP is another online postdisbursement tool that captures data on all credit monitoring parameters, rates accounts and facilitates monitoring. It also provides Early Warning Signals (EWS) Bank has designated âNodal Officers for Credit Monitoringâ in its various controlling offices (FGMO and ZO), who oversee all the credit monitoring functions in their span.

Bank is committed to 360Â° Credit monitoring to improve health of accounts and prevent slippage.

D. DIGITALIZATION

Alternate Delivery Channels

Internet Banking:

The Bank is providing Retail Internet banking & Corporate Internet banking facilities to its customers. The Internet Banking Customers of the Bank reached 12.8 lacs as on 31^st March 2018. The Bank updated its Internet Banking Services during FY18 as under:

- Registration of Atal Pension Yojana (APY).

- Online registration of Mobile Banking

- Facility to link different accounts in Mobile Banking

- Scheduling RTGS / NEFT transactions

- Tamil Nadu & Chhattisgarh State tax payment

- Online 15G/15H submission Mobile Banking

The Bank is providing Mobile Banking services to around 31 lakh customers. During FY18, upgraded version of the Mobile App was introduced, enabling the customers to do transactions with more ease. The Bank also introduced the facility to register for Mobile Banking through its network of ATMs.

Unified Payment Interface (UPI)

The Bank has launched âAllBank Unified Payment Interfaceâ, a Mobile App which allows funds transfer facility Mobile from one account to another account. Any Bank account holder, after registration in the app, can pay or pull funds through the application. The payments can be made to the beneficiary through four modes as under:

- Virtual address,

- Account Number & IFSC Code,

- MMID & Mobile Number

- Aadhaar Number RuPay Prepaid Card:

Point of Sale (PoS):

The Bank has launched merchant acquiring business through Point of Sale machines (PoS) for the merchants to accept payments from its customers through electronic means. All card (RuPay, MasterCard & VISA) are accepted in the PoS. Around 2638 PoS machines have been installed as on 31.03.2018.

SMS Alert Services

- SMS alert is being sent prior to/after account becomes inoperative to the SB & Current account holders.

- Customers are being intimated through SMS regarding deduction of penal charges for fall in minimum balance.

- Customers are being intimated through SMS regarding maturity of the Term Deposit.

ATMs

The Bank has 1105 ATMs/CDs as on 31^st March18. Out of this, 624 are under MOF project, 315 under opex and 166 under capex model.

Cheque Truncation System (CTS)

CTS has been successfully implemented at 145 MICR/ Non MICR locations in all the three grids (Northern, Western & Southern) covering pan India. 63 new centres were added in the above grids during last year. Average volume of cheques processed is about 1,21,500 cheques per day. Bank has setup Centralised Clearing Operations Centre (CCOC) at Bhubaneswar for centralized inward clearing operations of Southern Grid.

With the implementation of CTS, and in order to consolidate banking operations and reduce operating costs, 15 service branches were dismantled during FY18.

Information Security

- The Bank has a well documented, Board approved IT security policy and an IT security procedure in place that is being reviewed annually to keep it updated as per latest trend and best practices.

- Board approved Cyber Security Policy and Cyber Crisis Management Plan have also been introduced separately apart from IT Security Policy and IT Security Procedure.

- The Bank has implemented Hyper Text Transfer Protocol Secure (HTTPS), Extended Validation Secure Sockets Layer (EV SSL) for internet banking.

- Second Factor Authentication (One Time Password /Grid Card), Virtual Keyboard and CAPTCHA are implemented in Internet Banking.

- Quarterly VAPT (Vulnerability Assessment and Penetration Testing) and yearly Information System Audit are also conducted for CBS & allied infrastructures to plug in gaps related to security, if any.

Business Continuity Plan and Disaster Recovery

- The Bank has its Data Centre in Tier 4 Data Centre (DC) and also has a Disaster Recovery Site (DRS) for its core banking solution and other critical applications.

- The Bank has ISO 27001:2013 Certification for its DC and DR site.

- The Bank has well documented, Board Approved Business Continuity Plan to provide un-interrupted Customer Services in case of exigency.

- Bank has selected M/s SIFY Solutions to provide near site DR. The installation of equipments along with the links has been completed. The setup is made operational at Vashi,Navi Mumbai.

- DR Drill is conducted on a quarterly basis to keep testing DR siteâs functional preparedness in case of any emergency.

Other Initiatives

- CKYCR implemented in CBS.

- Registered Device (RD) Services incorporated in CBS for biometric authentication as per UIDAI guidelines.

- Integration of PFMS based e-payment system for the state of Rajasthan and Madhya Pradesh.

- Facility of sending SMS in preferred language of the customer has been implemented.

- Filling form 60 in CBS.

- Implementation of Inland Bank Guarantee Functionality in CBS.

- Implementation of GST Software Module: Bank has implemented GST software âSaralGSTâ and the module went live on 01.07.2017

SWIFT

Digitalisation- New Business Buzz Word

The Bank has taken leap forward in digitization of its business processes. New IT initiatives have been put in place to improve delivery of services. New Digital products like UPI, Micro ATM and Aadhar Pay have been launched. The Bank has a strong network of more than 8250 outlets providing IT enabled online Banking Facilities with special focus on rural and remote areas of country. The Bank is focusing to innovate alternate e-delivery channels with customer friendly options.

Moving forward with Governmentâs thrust on digitization of transactions and gearing up for less cash society, the Bank has introduced a number of products.

- AEPS On-Us & Off-Us transactions in Aadhaar seeded accounts.

- PIN based On-Us & Off-Us transactions using RuPay cards

- Third party Deposits are allowed at BC locations.

- Aadhaar seeding facility at BC Point.

- Account opening is enabled through e-KYC and auto population is live.

- Passbook Printing Facility is live at BC locations.

- Aadhaar based payment solution, Aadhaar Pay solution has been made live for making payment at Merchant Locations.

- Small Term Deposit (RD/FD/DDP/MIP) account opening facility is enabled at BC locations.

- Real time/Online SB account opening facility is enabled at BC locations.

New features have been introduced to make our existing e-products more and more convenient for our customers.

- OTP authentication for better security in e-commerce transaction

- On-line employees PF payment to EPFO

- On-line payment of customs-duty (ICEGATE)

- On-line student fee collection

Virtualization

Bank has implemented Virtualization environment for the noncore applications at DC & DRS. Currently Twenty Eight (28) applications such as Mail Messaging, Antivirus, UPI, GST, ASBA etc. have been successfully migrated to Virtualization.Virtualization will reduce the total number of physical servers considerably through optimum utilization of resources.

Security Operation Center (SOC)

Bank is in the process of Implementation of SOC (Security Operations Center) for which tendering process has been initiated

1. Call Centre Setup

- Bank is in the process of setting up Call Centre facility in Complete outsourced model. The call centre setup will facilitate various services/functionalities such as Inbound Calls (from customer), Outbound Calls (for new product promotions, soft recovery), IVR, Web Chat etc

Micro ATMs:

- Under Financial Inclusion Project, the Bank has provided Banking Facilities through Online Inter-operable Kiosk Banking Solution at 5937 Bank Mitra locations using Micro ATMs.

- The facility of RuPay Card operations (Micro ATM/Pin Pad functionalities) has been operationalised and encouraged as a part of digital push through usage of domestic RuPay card at Bank Mitra Locations.

Branch-wise Vacant Locker Status: Branch-wise position of vacant locker is being displayed in the Bankâs website.

E. MANAGEMENT INFORMATION SYSTEM (MIS)

The Bank has launched Automated Data Flow (ADF) to provide MIS to RBI seamlessly. Bank has set up a Centralized Data Repository (CDR) for maintaining accuracy and consistency in data provided to various stake holders. The MIS also provides analysis and information for preparation of Balance Sheet through new accounting system IndAS.

Status of Implementation of Ind AS

As per RBI guidelines, banks were required to implement Indian Accounting Standards (Ind AS) from Financial Year 2018-19, with comparatives of previous year. The Bank has submitted its Proforma Ind AS Financial Statements of Sept. 2016 and June 2017 to RBI, within the stipulated timeframe.

Meantime, RBI vide its Press Release dated 05/04/2018 has announced its decision to defer implementation of Ind AS by one year for making necessary legislative amendments including Third Schedule to Banking Regulation Act, 1949. Accordingly, the date of implementation of Ind AS stands deferred to 01/04/2019, from the originally scheduled date of 01/04/2018.

For effective implementation of Ind AS, a Steering Committee headed by Executive Director has been formed. Further, a separate Cell to handle various activities relating to implementation of Ind AS has been formed at Head Office. Necessary system changes, including IT changes, have been envisaged and the steps for implementation of such changes are in progress.

F. BRANCH AND OFFICE NETWORK

Domestic Presence

The Bank has pan India presence of 3245 branches. Out of 3245 domestic branches, 1207 are at Rural, 764 at Semi-urban, 648 at Urban and 626 in Metropolitan Centres. 3 new branches have been opened during FY18, out of which 1 is at Rural and 2 at Semi Urban centers. Further, 2 Metro and 1 semi-urban branches have been merged to consolidate the business of closely located centres.

International Presence

The Bank is having one overseas branch with a dealing room at Hong Kong. The business of Hong Kong branch has decreased from Rs.14,130.68 crore as on 31^st March17 to Rs.12,871.38 crore as on 31st March18.The business of the branch decreased by 8.91% on Y-o-Y basis. The total deposit as on 31^st March18 stood at Rs.2,762.43 crore, whereas advances stood at Rs.10,108.95 crore. The Hong Kong branch earned operating profit of Rs. 90.52 crore and net profit of Rs.44.86 crore in FY18.

G. INTERNATIONAL BANKING

The Bank carries out its international business in India through its 53 authorized/ designated branches, which include 5 international branches, and also through its overseas branch at Hong Kong. The Bank also has a centralized fully equipped forex dealing room at Integrated Treasury Branch, Mumbai which handles forex transactions in 9 currencies and maintains 12 Nostro accounts and 1 Vostro account. Export Credit of the Bank as on 31^st March18 stood at Rs.2424.65 crore as compared to Rs.2620.96 crore as on 31^st March17. The Bank is taking all steps to increase the credit flow to exporters. Exportersâ meets are arranged at various centres to explain various facilities available to them. The Bank maintains correspondent relationship with prime banks abroad. The Bank is also catering to the needs of Non-Resident Indians through its branches by providing various types of deposit & loan products e.g. FCNR, NRE & NRO deposits, Housing Loan etc. The Bank is also having an arrangement with M/s. UAE Exchange & Financial Services Ltd. to facilitate Money Transfer Services to the domestic customers receiving remittances from their relatives residing abroad.

H. OPERATIONS DIVISION

Business Processes

With a view to optimisation of resources, reducing operating costs, the bank is taking steps for re-organisation of establishments, prune establishments which are not essential. One such move was closure of 15 Service Branches across the Bank and merging their activities with some designated branches without affecting customer service.

Various changes have been introduced to make the use of internet banking more customer-friendly without compromising with the security aspect.

For ensuring quick and better monitoring of transactions of high value and exceptional in nature, the bank has developed a designated portal.

The bank has identified a number of areas where new systems & processes are under development. This will improve the customer convenience and quality of customer service.

I. BUSINESS DIVERSIFICATION

a. Insurance Business:

i. Life Insurance:

Bank, as a corporate agent of M/s. Life Insurance Corporation of India, mobilized premium of Rs.124.64 crore during FY18 from 21860 policies, as against total premium of Rs.103.73 crore mobilized during FY17. Bankâs earnings from Life-Insurance business during FY18 amounted to Rs.10.34 crore as against Rs.9.63 crore during FY17.

ii. Non Life Insurance:

Bank, as a corporate agent of M/s. Universal Sompo General Insurance Company Limited, collected premium amounting to Rs.171.25 crore during FY18 from 371142 policies mobilized by the Bank, which earned revenue of Rs.17.04 (including HCP) crore as against Rs.11.81 crore, during FY17.

Bank collected premium amounting to Rs.18.45 crore during FY18 from sale of 84693 customized âAllahabad Bank Health Care Plusâ policies, which earned revenue of Rs.2.35 crore as against Rs.1.51 crore, during FY17.

b. Mutual Funds:

Bank is distributing the Mutual Fund schemes of 6 AMCs i.e. Reliance Nippon AMC, Principal PNB AMC, Kotak Mutual Fund AMC, UTI MF AMC, Franklin Templeton AMC and Essel (formerly known as Peerless) AMC through Bank branches.

Bank earned commission of Rs 66 lacs from distribution of Mutual Fund products during the FY18 as against Rs.49 lakhs during FY17.

c. Depository Services:

Bank, as Depository participant of NSDL & CDSL, is providing Depository services to the customers and has earned an income of Rs.51 lakhs during FY18 for providing Depository Services.

Bank received award from NSDL for opening the maximum number of Demat Accounts under PSU Banks category in the Eastern region during the NSDLâs 32nd DP Conference held at Kolkata on 16^th December 2017.

d. Online Trading Account:

Bank is providing Broking facility to the demat customers of the Bank in association with M/s. Aditya Birla Money Limited. An income of Rs. 6.89 lakh was earned by the Bank during FY18 on account of online trading activities.

e. Applications Supported by Blocked Amount (ASBA) Services:

Being Self Certified Syndicate Bank (SCSB) for submitting of application in public issues (IPO/FPO/ Right Issue), this facility has now been made available from all the branches of the Bank.

f. Cash Management Services:

The income under Cash Management Services was Rs. 4.35 crore for the FY 2017-18 as against Rs. 3.98 crore during FY17.

New Products

a. AllBank Shakti:

As a step towards women empowerment, the Bank has decided to offer the women of the nation a savings bank product âAllbank Shaktiâ that makes available investment opportunities & much more. This product also provides benefits to them in the form of discounts on healthcare product, locker facility, and concessional rate of interest on their housing loans & education loan for self / daughter.

b. AllBank Cash Option

This product gives an instant Overdraft facility in online and offline mode, for all individual deposit holders above 18 years of age.

c. emPower

In order to strengthen the digital delivery effectively, the Bank has introduced a mobile app named âemPowerâ. This app is available on Playstore / AppStore which has since been downloaded by over 100000 customers and transactions on this app are increasing on daily basis. The app is scheduled to get major enhancements like Chatbot and Artificial Intelligence based e-Commerce payments.

d. AllBank Senior

In a bid to pay its tribute to the senior citizens of the country, Bank has decided to offer a specially designed schemeâ Allbank Seniorâ for them. The scheme comes with multiple benefits for the senior citizens e.g. preferential treatment at branches, discount on locker rentals, discount in health checkups, concessional rate of interest in car loans and much more.

J. GOVERNMENT BUSINESS

For implementing the Prime Ministerâs dream for creating a pensioned society, the Bank extended the coverage for APY by enrolling 164683 individuals in 2017-18 to address the old age income security needs of the citizen.

As a Point of Presence (POP) for National Pension System (NPS), the Bank is catering needs of two of its corporate clients i.e. Allahabad Bank and M/S Tenughat Bidyut Nigam Limited, Ranchi. Apart from these, the Bank is acting as Point of Presence Service Provider (POP SP) for old age pension need of general public through its 286 branches.

During FY18, the Bank participated in 3 series (14 tranches) of Sovereign Gold Bond Scheme, launched by Govt. of India aiming to reduce the holding of the yellow metal and also to reduce import of Gold.

Central Governmentâs decision on the recommendations of the 7^th Pay Commission-Revision of pension of pre-2016 pensioners/ family pensioners was implemented by the Bank in August 2017 to all the eligible pensioners.

K. TREASURY - OPERATIONAL HIGHLIGHTS

Domestic Operations:

The treasury earned a trading profit of Rs.610.23 crores during FY 18, thereby posting a Y-o-Y de-growth of 33.09% over FY 17. Further, the Interest Income earned during FY18 was Rs.4094.67 crores, a 0.61% Y-o-Y de-growth over the previous period. There was an increase in domestic Investment portfolio of Rs.13,304.88 crores, i.e., from Rs.55,433.36 crores in March17 to Rs.68738.24 crores in March18.

Portfolio Highlights:

The global investment portfolio of the Bank as on 31.03.2018 stood at Rs.69036.12 crores, which included domestic investment of Rs.68738.24 crores and Overseas investment by our HongKong Branch to the tune of HKD 358.68 mio, i.e., Rs.297.88 crores (converted @ 1HKD = Rs.8.3050).

The portfolio of Rs.69036.12 crores was split in to HTM category carrying Rs.41383.49 crores (i.e., 59.94%), AFS Category carrying Rs.27647.70 crores (i.e., 40.05%) and HFT category carrying Rs.4.93 crores(i.e. 0.01%).

On an effective NDTL of Rs.2,19,669.83 crores as on 31.03.2018, the Bank maintained SLR securities of Rs.61277.19 crores which was 27.90% of NDTL against a requirement of 19.50%. Out of our SLR holdings, Rs.39691.88 crores, which was 18.07% of NDTL, was .held in HTM category against a limit of 19.50%.

The Bankâs NSLR portfolio of Rs.7758.93 crores comprised mainly of Rs.2554.70 crores of Bonds/ Debentures, Rs.1910.23 crores of Security Receipts and Rs.1496.26 crores of shares and Rs.1525.02 crores of Special SDL Bonds, Subsidiary & JV of Rs.156.27 crore and Others for Rs.116.45 crore. The equity portfolio of the Bank stood at Rs.1496.26 crores, which included Rs.940.89 crores of shares received through conversion of Debt under CDR/SDR/S4A schemes.

L. CUSTOMER CARE

The Bank has formulated customer centric policies, such as Customer Rights Policy, Deposit Policy, Cheque Collection Policy, and Compensation Policy and these are displayed in Bankâs website. The Bank has adopted âThe Code of Bankâs Commitment to Customersâ & âCode of Bankâs Commitment to Micro & Small Entrprisesâ formulated by BCSBI. Citizen Charter is adopted by the Bank and is available at the branches and website of the Bank. The Bank also conducts Customer Service Committee meetings at every branch and Zonal Office on monthly basis for providing better customer service.

Customer Grievance Redressal Cell

A web based Portal aimed at providing the customers with a platform to lodge their grievances against the Bank for deficiency in services has been provided on the Bankâs website www.allahabadbank.in under customer care. Complaints received directly at Head Office are also lodged through this portal for monitoring, record & follow up. In order to prioritise & expedite the redressal, all complaints are categorized in 3 Baskets, viz. A,B & C. Complaints received through MOF,DPG (CPGRAMS portal) ,RBI,BCSBI, MPs/MLAs, other regulators are put in the Basket A for expeditious redressal. Bank has Customer Grievance Redressal Cell at Head Office. The Principal Nodal Officer of the rank of General Manager designated by the Bank monitors the implementation of customer service and complaint handling mechanism for the entire Bank. Complaints received from customers are being redressed and suitable replies are sent to them.

Initiatives taken during FY18 for improvement in customer service

Several initiatives were also taken to remain customer focused by providing fast service, bringing in diversified products/ services, responding to customersâ queries in time and redressal of customer complaints.

Standing Committee of the Board on customer service are held quarterly. Also, Customer Service Committees have been formed at each and every branch and at Zonal Offices. The Customer Service Committee meets once a month to study complaints/ suggestions, cases of delay, difficulties faced/ reported by customers/ members of the Committee and evolve ways and means of improving customer service. The members include a senior citizen too.

M. IMPLEMENTATION OF OFFICIAL LANGUAGE POLICY

The bank has been leading in the area of implementation of Official Language and achieved almost all targets in all parameters prescribed by Government of India, Ministry of Home Affairs, Department of Official Language for FY18. All the bilingual CBS and HRMS computers are under Hindi interface. By adopting this bilingual system, implementation of Rajbhasha is increasing. In addition, the Bank is using Unicode Fonts for Hindi correspondence at all levels.

During FY18, the Bank was awarded various awards for its excellent performance in the use of Hindi. Further, Town Official Language Committees situated in different locations of the country also awarded the Bank offices, which included awards from TOLIC Hyderabad, Meerut, Pune, Sitapur and Varanasi. The bank is successfully convening the Town Official Language Implementation Committee constituted by the Government of India in Ranchi and Gonda.

The third sub-committee of Committee of Parliament on Official Language visited our Pathankot Branch under ZO Amritsar on 14.06.2017 and ZO New Delhi on 10.02.2018. The Committee not only expressed satisfaction but also appreciated the efforts made by the Bank for progressive use of Hindi. Officials of DFS, MOF, GOI also inspected our Head Office on 08.09.2017 regarding implementation of Official Language and appreciated the work being done by the Bank for implementation of Rajbhasha.

The Bank observes âHindi Maahâ in the month of September every year. Various competitions are organized at all India level in which staff members of all cadre participate enthusiastically. The winners are awarded with prizes in Rajbhasha function. This year also, the Bank organized Hindi Maah and other programmes/competitions and awards and prizes were given.

In addition, the Bank organized the first All India Inter Bank Hindi Essay Writing Competition in which a number of essays were received from various PSBs and RBI. The winners were awarded in the Akhil Bhhartiya Rajbhasha Sammelan organized by the Bank at Staff College Lucknow on 19-20 January, 2018.

N. SUBSIDIARY & JOINT VENTURE

- AllBank Finance Ltd., a wholly owned subsidiary of Allahabad Bank, engaged in Corporate Advisory Services, Project Appraisal, Issue Management, Loan Syndication, Debenture Trusteeship and Underwriting, has since been merged with the Bank w.e.f. 14.03.2018.

- The Bank holds 27.04% equity stake in Asset Management Company âASREC (India) Ltd.â, along with other Banks/ Institutions.

- The Bank holds 28.52% equity stake in joint venture company âUniversal Sompo General Insurance Company Limitedâ for general insurance along with Indian Overseas Bank, Karnataka Bank Ltd., Dabur Investment Ltd. and Japanese insurance major âSompoâ.

O. ALLAHABAD BANK UP GRAMIN BANK (AUPGB)

At present, one RRB i e Allahabad UP Gramin Bank (AUPGB) with Head Office at Banda (UP) is sponsored by our Bank. This is operating in 11 districts of UP with 650 branches under 10 Regions. AUPGB was formed in 2010 by amalgamating six RRBs sponsored by our Bank.

The paid up capital of our sponsored RRB is Rs.61.93 crore. Central Government, State Government and Allahabad Bank contributed in paid up capital of AUPGB in the ratio of 50:15:35, respectively. The bankâs contribution towards capital of this RRB was Rs.21.67 crore. The Net worth of sponsored RRB as on 31^st March 18 was Rs.824.69 crore.

During the year, total business of AUPGB increased from Rs.16182 crore as on 31.03. 2017 to Rs.16541 crore as on 31.03.2018 showing an increase of Rs.359 crore ( YoY growth : 2.22 %). The deposit of AUPGB as on 31.03.2018 stood at Rs 10231 crore (YoY growth: 6.42%).

The Net Profit of our sponsored RRB as on 31.03.2018 stood at Rs.35.33 crore as against Rs.31.37 crore as on 31.03.2017, showing a YoY growth of 12.62 %. AUPGB is in profit since inception. The Gross NPAs of AUPGB decreased from Rs 607 crore to Rs.605 crore (9.59% of total advances) during FY 18. All the 650 branches, 04 Extension Counters and 13 Administrative locations are functioning under CBS platform. AUPGB is the only RRB in India, which is managing its own Data Center. Total number of employees were 2589 as on 31.03.2018.

Progress in opening of accounts under PMJDY as on 31.03.2017 stood at 10,95,392 accounts, out of which Rupay Debit Cards were issued in 7,81,002 accounts. Balance outstanding in those accounts was Rs.293.44 crore. AUPGB enrolled 294118 customers under PMJJBY and 668130 under PMSBY. AUPGB was awarded by PFRDA for the campaign âCHAMPION OF CHANGEâ for achievement under APY scheme. Out of 27325 savings linked SHGs, credit linkage was done in 22756 SHGs accounts with an outstanding of Rs 123.08 crore.

The RRB sponsored by the Bank is actively participating in economic development of the areas of their presence. With the implementation of Core Banking Solution (CBS), rural customers are also getting benefit of latest technology, thus providing services to the rural poor under Financial Inclusion Plan at their doorsteps. CBS is running with anywhere banking and SMS alert.

In our sponsored RRB, the facility of Micro ATMs, RTGS, NEFT, Rupay ATM cards/ KCC cards, KIOSK banking Solution (KBS) under FIP, E-KYC, Aadhar Payment Bridge System (APBS) under DBT etc, are also being provided to customers by AUPGB.

P. AWARDS AND ACCOLADES

- The Bankâs MD & CEO was conferred the âBMA Management Women Achiever of the Year Award 201617â

- The Bank was adjudged the winner in category of âBest Payment Initiative amongst Medium Bankâ by the IBA.

- The Bank also bagged the âNational Payment Excellence Award 2016â on Aadhaar enabled Payment System from National Payments Corporation of India (Sponsored by RBI).

- The Bank was adjudged as the Best Bank in PMJDY implementation in the category of Group-Other states and bagged prestigious Prime Ministerâs Award for excellence in Public Administration for North 24 Parganas (West Bengal).

- Acknowledging the Financial Inclusion Landscape achieved by the Bank, it was adjudged as Runner Up in the category of Best Financial Inclusion Initiatives amongst Medium Banks -âBanking Technology Award 2017â by Indian Banks Association.

- Bank was conferred the prestigious â51^st SKOCH AWARD 2018-Platinum Award in PMJDYâ in the category of Financial Inclusion from the independent think and policy advisory body of SKOCH Group.

- The Bank also bagged âMakers of Excellenceâ award under Atal Pension Yojana from PFRDA.

Q. EMPLOYEE SHARE PURCHASE SCHEME

âAllahabad Bank Employee Share Purchase Schemeâ (AllBankESPS) was launched, offering upto 5,00,00,000 (Five crore) new equity shares of face value Rs.10/- each of the Bank, for cash at an Issue Price of Rs.53.94 per equity share including a premium of Rs.43.94 per equity share as determined by the Committee of Directors on ESPS to all the Eligible Employees of the Bank. The Bank was able to achieve 87.66% of total subscription offered as equity shares under ESPS and as many as 21,742 staff subscribed to the issue.

R. NEW REGULATORY PRESCRIPTIONS

Owing to high non-performing assets (NPA) and negative Return on Assets (RoA) for two consecutive years, Bank was brought under Prompt Corrective Action (PCA) framework by RBI on 2^nd January 2018. The regulatory prescriptions suggested there in by the RBI are being meticulously followed by the Bank, which include restriction on expansion of Risk Weighted Asset (RWA), exposure to un-rated and high-risk advances, creation of non- Banking assets and accessing / renewing wholesale/costly deposits/certificate of deposits. The Bank also faces restrictions on distributing dividends & remitting profits and expanding branch network.

Similarly, the Bank is also pursuing the reforms agenda prescribed by the MOF, GOI for turnaround of the Bank.

S. FUTURE BUSINESS PLAN OF THE BANK

Taking into account the optimistic outlook of the economy and its different sectors, the Bank will align its business objective to maximize its gains. The Bank shall primarily focus on aggressive recovery drive, further build-up in CASA, rebalancing of loan book with focus on SMARt loans (S: Small, M: Micro, A: Agriculture and Rt: Retail loans), thereby increasing its share to the loan book supported by technology. Further, the Bank believes that its employees are its valuable assets and therefore, up-scaling of officers by means of training shall be undertaken. The Bank will also look at different avenues to raise capital with simultaneous reduction in RWA.

T. BOARD OF DIRECTORS

As on 31.03.2018, there were 10 Directors on the Board of the Bank including 3 whole time Directors, i.e., one Managing Director & Chief Executive Officer (MD & CEO) and two Executive Directors. During FY 2017-18, following changes took place in the composition of Board of Directors.

- Smt. Usha Ananthasubramanian took over as the MD & CEO of the Bank w.e.f. 6^th May, 2017.

- Shri Rajeev Ranjan was appointed as Government Nominee Director on the Board of the Bank w.e.f. 17.08.2017 vice Shri Anshuman Sharma. Shri Rajeev Ranjan is posted as Joint Secretary in the Department of Expenditure, Govt. of India.

- Dr. Bijaya Kumar Sahoo, Shri Sarath Sura and Dr. Parthapratim Pal have been elected as new Shareholder Directors w.e.f. 22^nd March 2018 on the Board of the Bank in place of the 3 retired Shareholder Directors.

- The Board wishes to place on record its appreciation for the valuable contributions made by the retired Government Nominee Director and three retired Shareholder Directors.

U. DIRECTORSâ RESPONSIBILITY STATEMENT

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

- The applicable Accounting Standards were followed along with proper explanation relating to material departures, if any;

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

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

- The accounts have been prepared on the principle of âgoing concernâ basis.

V. ACKNOWLEDGEMENT

For and on behalf of the Board of Directors,

Usha Ananthasubramanian

Managing Director & CEO

Mar 31, 2017

During the financial year 2016-17 (FY17), the Bank''s global business reached the level of Rs.3,59,974 crore (Rs.3.60 lakh crore), registering a Y-o-Y growth of 0.45%. The Bank''s international business stood at Rs.14,131 crore and recorded a Y-o-Y growth of 12.87%. Global deposits of the Bank stood at Rs.2,01,870 crore that increased by 0.61% and gross advances that grew by 0.25% and stood at Rs.1,58,103 crore as at the end of Mar''17. Your Bank''s continued focus on low cost deposits has resulted in a robust Y-o-Y growth of 27.15% in CASA deposits and the build-up stood at Rs.91,598 crore as on 31^st Mar''17. Subsequently, CASA share improved to 45.79% as on 31^st Mar''17 from 36.20% a year ago.

The Bank''s operating profit decreased by 6.46% Y-o-Y on account of stress on advances portfolio and resultant reversal/ non-booking of interest. It stood at Rs.3867 crore during FY17. In terms of net profit, the quantum of losses decreased in FY17 as provisions were lower by 14.29% and there was an increase in non-interest income levels. Net loss decreased to Rs.314 crore in FY17 as compared to a net loss of Rs.743 crore a year ago. Your Bank has been able to maintain its Capital Adequacy Ratio above the regulatory requirement. The Bank''s CRAR stood at 11.45%, which is above the prescribed limit. Owing to reduction in bulk deposits, the cost of deposits decreased to 5.94% during FY17 from 6.61% in FY16.

Against this backdrop, your Directors take pleasure in placing the Bank''s Annual Report for 2016-17 alongwith audited annual financial statements

OUR PERFORMANCE A. FINANCIAL HIGHLIGHTS

A.1. BALANCE SHEET

( Amount Rs.in Crore)

Parameter	31ST MAR''16	31ST MAR''17	Y-O-Y GROWTH %
Total Business	358352	359974	0.45
Total Deposits	200644	201870	0.61
Gross Advances	157707	158103	0.25

A.2. PROFIT

( Amount Rs. in Crore)

Parameter	31^st MAR'' 16	31^st MAR'' 17	Y-O-Y GROWTH %
hRs-ic-mmm Â±TW / Operating Profit	4134	3867	-6.46
mcitiM / Provision	4877	4180	-14.29
PWl	(743)	(314)

A.3. KEY RATIOS

Parameter	¹Mar''16	Mar''17
Cost of Deposits	6.61	5.94
Cost of Funds	6.37	5.74
Yield on Funds	9.24	8.41
Cost of Borrowings	3.85	3.52
Net Interest Margin	2.65	2.54
Return on Assets	-0.33	-0.13
Cost to Income Ratio	47.06	51.25

B. OPERATIONAL HIGHLIGHTS

The modification of surveillance application LAMP has facilitated dynamic and quantified monitoring. In the first phase this tool will be used for all accounts greater than Rs.1.00 Crores. An account has to undergo checks at 61 points which would include almost all the Early Warning Signals proposed by RBI. Based on the score depicting the deficiency; corrective & prompt action is to be taken to restore the wellness of the account. As a result, the slippage ratio has come down from 8.93% (FY16) to 8.02% (FY17).

DeVA (Document e-Verification & Approval) is a set-up tool to ensure that irregularities mostly pertaining to documentation are taken care of. This ensures that there is full adherence to the guidelines while sanctioning the proposal and the documentation is correct and complete to ensure enforceability at a later stage, if required. Consequently, short comings would be plugged at the 1 st stage itself and it would supplement the inspection of branch.

C. ASSET QUALITY

FY17 was a challenging year for the Indian Banking Industry due to continued stress faced in asset quality on account of various macroeconomic and other factors. In the previous year, the RBI had also conducted Asset Quality Review in banks.

As on 31^st Mar''17, Gross NPA of the Bank stood at Rs.20687.83 crore (FY16: Rs.15384.57 crore) and Net NPA remained at Rs.13433.51 crore (FY16: Rs.10292.51 crore). In terms of ratio, Gross NPA Percentage and Net NPA Percentage were 13.09% (FY16: 9.76%) & 8.92% (FY16: 6.76%) respectively.

The Bank initiated various measures to arrest fresh slippage and restricted it to Rs.11417 crore for the FY17 compared to Rs.12924 crore for the FY16. Provision Coverage Ratio (PCR) also improved to 50.11% in FY17 from 48.22% in FY16.

To improve asset quality, the Bank initiated consistent recovery drive and recovered Rs.3671.69 crore with a growth of 63.70%. Of this, Cash Recovery was Rs.1611.32 crore with a growth of 72.22% due to concerted efforts, daily monitoring and account specific resolution plan. During the aforesaid period, total Reduction in NPA accounts stood at Rs.6113.74 crore.

The Bank also formulated two new OTS schemes for small NPA accounts, which resulted in accelerated settlement of Farm Sector/ Unsecured small borrowal accounts. Further, compromise/negotiated settlement through Rin Mukti Shivir and one-to-one meeting with borrowers was adopted as another vital tool to tackle NPAs.

However, recovery in big borrowal accounts above Rs.1.00 crore remained a constraint for the Bank for obvious reasons. For follow-up, monitoring and recovery in these accounts, online module "PARTH" (Portal for Asset Resolution through Hot chase) was introduced which was very useful in assuring resolution in this segment. The Bank also has 9 Asset Recovery Management Branches (ARMBs) which function exclusively for resolving NPAs.

Initiatives taken during FY17

- The Bank introduced Online Module "PARTH" for effective monitoring of big borrowal accounts having outstanding above Rs.1.00 crore. Hot chase of such borrowers and timely legal action increased our penetration rate to crack these accounts for recovery.

- Two new OTS schemes were launched for settlement of NPA accounts related to Farm sector and small unsecured loans.

- Monitoring of daily recovery was introduced with Zones/ FGMOs to improve penetration in NPA accounts.

- The Bank organized 33 Recovery Camps in the previous year involving all the branches which was very successful in terms of recovery that amounted to Rs.3157.26 crore. Services of Recovery Agencies and Banking Correspondents were properly utilized for marketing of One Time Settlement Schemes (OTS).

- The Bank participated in National Lok Adalat actively and settled 15154 cases having outstanding of Rs.148.30 crore.

- E-auctions of charged immovable & movable securities were carried out through-out the year. Special thrust was given in taking physical possession of immovable properties either with the help of Enforcement Agencies or by moving application before the concerned DM/CMM taking advantage of amended SARFAESI Act. This step had resulted into increase in the percentage of properties under physical possession of the Bank which leading to auction of properties.

were declared as Wilful Defaulter by the Bank and the number now increased to 101, a three-fold jump from Mar''16 figure of only 32.

- For effective and better monitoring, all borrowal accounts were categorized in four broad heads, viz., (i) Below Rs.50,000 (ii) Rs.50,000 to Rs.10,00 lakhs (iii) Rs.10.00 lakhs to Rs.1.00 crore and (iv) above Rs.1.00 crore. While OTS is the main focus in first two stages, other additional options like sale under SARFAESI, declaration of willful Defaulter, restructuring, suit at DRT are followed very methodically in next two categories. Further, borrowal accounts having outstanding above Rs.1.00 crore, monthly VC meetings are held with Zonal Heads and FGMs and ''Doable'' accounts are identified where turnaround/recovery is expected within the quarter. These accounts are then followed-up on daily basis to ensure resolutions.

New initiates to be adopted

- Formation of a "War Room" at Head Office is under consideration wherein round the clock NPA monitoring will be undertaken in a more systematic and aggressive manner by a team of 4 dedicated executives who will have no other duty other than following up all NPA accounts above Rs.50.00 lakhs on ''actionable parameter'' basis.

- After being successfully implementing PARTH module for online follow up, now coverage will be extended to NPA accounts having outstanding above Rs.50 lakhs.

- Marketing of chronic NPA accounts among ARCs will be done to get better bids.

D. INDUSTRIAL RESTRUCTURING

(a) Industrial Restructuring

The total Standard Restructured advance of the Bank came down from Rs.8332 crores (as on 31^st Mar''16) to Rs.4656 crores as on 31^st Mar''17. The reduction of Rs.3676 crores has happened on account of Rs.2234 crores of slippages to NPA category and Rs.1078 crores being upgraded. The Bank had an outstanding of Rs.2466 crores under SDR and Rs.545 crores under S4A as on 31^st Mar''17. Under the 5/25 scheme, the outstanding amount stood at Rs.1187 crores.

The Bank has adopted timely restructuring for Small, Medium and for other enterprises as well. As on 31^st Mar''17, the restructuring for CDR, SME and other enterprises stood at Rs.1567 crores, Rs.383 crores & Rs.2705 crores respectively.

(b) Other Initiatives

The Bank has strengthened the monitoring system by laying emphasis on SMA 0 (Depicting over dues from Day 1 itself) level thereby arriving at a resolution at an early stage. Creating awareness about credit monitoring has been given priority through marking a slot in training programs and during interaction with field functionaries.

E. DIGITALIZATION

E1. Alternate Delivery Channels

Internet Banking:

The Bank is providing Retail Internet banking & Corporate Internet banking facility to its customers. The Internet Banking Customers of the Bank reached 8.43 lacs as on 31^st March 2017. The Bank as updated its Internet Banking Services during FY17 which are as under:

- Registration of for Atal Pension Yojana (APY).

- Online registration of Mobile Banking

- Facility to link different account in Mobile Banking

- Scheduling RTGS / NEFT transactions

- Tamil Nadu & Chhattisgarh State tax payment

- Online 15G/15H submission

Mobile Banking

The Bank is providing Mobile Banking services to around 26 lakh customers. During FY17, upgraded version of the Mobile App was introduced which enables the customer do transactions with ease. The Bank has also introduced the facility to register for Mobile Banking through its network of ATMs.

Unified Payment Interface (UPI)

The Bank has launched "AllBank Unified Payment Interface", a Mobile App which allows funds transfer facility from one account to another account. Any Bank account holder after registration in the app can pay or pull funds through the application. The payments can be made to the beneficiary through four modes as under:

- Virtual address,

- Account Number & IFSC Code,

- MMID & Mobile Number

- Aadhaar Number RuPay Prepaid Card:

Point of Sale (PoS):

The Bank has launched merchant acquiring business through Point of Sale machines (PoS) for the merchants to accept payments from its customers through electronic means. All card (RuPay, MasterCard & VISA) are accepted in the PoS. Around 370 PoS machines have been installed as on 31.03.2017.

SMS Alert Services

- SMS alert is being sent prior to/after account becomes inoperative to the SB & Current account holders.

- Customers are being intimated through SMS regarding deduction of penal charges for fall in minimum balance.

- Customers are being intimated through SMS regarding maturity of the Term Deposit.

ATMs

The Bank has a total 1214 ATMs/CDs as on 31^st Mar''17. Out of this, 742 are under MOF project, 315 under opex and 157 under capex model.

E2. Cheque Truncation System (CTS)

CTS clearing was introduced in the Bank as per RBI guidelines. The CTS clearing of the Bank is handled by 3 Grid centres viz. New Delhi, Mumbai & Chennai.

In the Bank, inward clearing of Southern Grid (Chennai) was decentralized at four centres i.e., Kolkata, Chennai, Hyderabad and Bangalore. In order to make the CTS clearing process more time efficient, prompt and cost efficient, steps have been taken to centralize the CTS clearing of 4 centres to a single centre- Bhubaneswar.

The Branches have been advised to ensure that only CTS compliant cheque leaves are used by the customers. Non-CTS cheques will be completely withdrawn from the system w.e.f. 01.07.2017.

E3. Information Security

- The Bank has a well documented, Board approved IT security policy and an IT security procedure in place that is being reviewed annually to keep it updated as per latest trend and best practices.

- Board approved Cyber Security Policy and Cyber Crisis Management Plan has also been introduced separately apart from IT Security Policy and IT Security Procedure.

- The Bank has implemented Hyper Text Transfer Protocol Secure (HTTPS), Extended Validation Secure Sockets Layer (EV SSL) for internet banking.

SMS Alert Services

- SMS alert is being sent prior to/after account becomes inoperative to the SB & Current account holders.

- Customers are being intimated through SMS regarding deduction of penal charges for fall in minimum balance.

- Customers are being intimated through SMS regarding maturity of the Term Deposit.

ATMs

The Bank has a total 1214 ATMs/CDs as on 31^st Mar''17. Out of this, 742 are under MOF project, 315 under opex and 157 under capex model.

E2. Cheque Truncation System (CTS)

CTS clearing was introduced in the Bank as per RBI guidelines. The CTS clearing of the Bank is handled by 3 Grid centres viz. New Delhi, Mumbai & Chennai.

In the Bank, inward clearing of Southern Grid (Chennai) was decentralized at four centres i.e., Kolkata, Chennai, Hyderabad and Bangaluru. In order to make the CTS clearing process more time efficient, prompt and cost efficient, steps have been taken to centralize the CTS clearing of 4 centres to a single centre- Bhubaneswar.

The Branches have been advised to ensure that only CTS compliant cheque leaves are used by the customers. Non-CTS cheques will be completely withdrawn from the system w.e.f. 01.07.2017.

E3. Information Security

- The Bank has a well documented, Board approved IT security policy and an IT security procedure in place that is being reviewed annually to keep it updated as per latest trend and best practices.

- Board approved Cyber Security Policy and Cyber Crisis Management Plan has also been introduced separately apart from IT Security Policy and IT Security Procedure.

- The Bank has implemented Hyper Text Transfer Protocol Secure (HTTPS), Extended Validation Secure Sockets Layer (EV SSL) for internet banking.

- The Bank has ISO 27001:2013 Certification for its DC and DR site.

- The Bank has well documented, Board Approved Business Continuity Plan to provide un-interrupted Customer Services in case of exigency.

- DR Drill is conducted on a quarterly basis to keep testing DR site''s functional preparedness in case of any emergency.

E4. Other Initiatives

- The Bank has added some new features in "on line opening of Term/Recurring Deposit" to make it more customer friendly and attractive. New functionality of opening of Savings Bank account through "Selfie" has been developed and introduced in consultation with the Project Management Office.

- The existing Cheque book issue and delivery system has been re-engineered to make it more customer friendly. As per RBI guidelines, the Bank has re-designed and introduced 10 commonly used forms with effect from 01.01.2017.

- The Documents & Record Management Policy-2016-17 has been reviewed/ updated with the addition of new reports/returns as required by RBI/other controlling authorities.

- Exceptional Transaction Reports generated by CBS has been reviewed and redesigned with the inclusion of 4 new reports in Exceptional Transaction category.

- The Bank has introduced new CIF & Account Opening Forms for the customers

- The Bank has put in place a well defined procedure for bringing about any change in the Systems and Procedures or introducing a new system. The compliance of the Systems & Procedures of the Bank by the branches/ offices is periodically audited/ verified.

- During FY17, a new department, "New Business Initiative" was opened for strategic business development. The Bank has planned to provide its employees an e-platform for learning and development and a blue print for the programme has been prepared. The Bank is reviewing some of the loan facilities provided to the employees at concessional rate.

Digitalization- New Business Buzz Word

The Bank has taken leap forward in digitization of its business processes. New IT initiatives have been put in place to improve delivery of services. New Digital products like UPI, Micro ATM and Aadhar Pay have been launched. The Bank has a strong network of more than 8250 outlets providing IT enabled online Banking Facilities with special focus on rural and remote areas of country. The Bank is focusing to innovate alternate e-delivery channels with customer friendly options.

Moving forward with Government''s thrust on digitization of transactions and gearing up for less cash society, the Bank has introduced a number of products.

- Aadhar enabled AEPS transactions

- Allbank-Selfie'' - Mobile app based on-line customer on-boarding

- Account opening using e-KYC facility extended by UIDAI.

- Aadhaar based payment at merchant locations replacing cash transactions.

- Prepaid Card for walk-in customers and account holders.

- On-line Home loan approval

New features have been introduced to make our existing e-products more and more convenient for our customers.

- OTP authentication for better security in e-commerce transaction

- On-line employees PF payment to EPFO

- On-line payment of customs-duty (ICEGATE)

- On-line student fee collection

a) Micro ATMs:

- Under Financial Inclusion Project, the Bank has provided Banking Facilities through Online Inter-operable Kiosk Banking Solution at 5063 Bank Mitra locations using Micro ATMs.

- The facility of RuPay Card operations (Micro ATM functionalities) has been operationalised and encouraged as a party of digital push through usage of domestic RuPay card at Bank Mitra Locations.

b) Branch-wise Vacant Locker Status: Branch-wise position of vacant locker is being displayed in the Bank''s website.

F. MANAGEMENT INFORMATION SYSTEM (MIS)

Status of Implementation of Ind AS

As per RBI guidelines, banks are required to follow Indian Accounting Standards (Ind AS) from Financial Year 2018-19 with comparatives of previous year. The Bank has submitted its Proforma Ind AS Financial Statements of Sept. 2016 to RBI within stipulated timeline of 30th Nov''16.

The Bank has formed a Steering Committee headed by Executive Director. It has also set up a separate Cell at Head Office to handle various activities relating to implementation of Ind AS. The diagnostic study has been completed to ascertain impact due to Ind AS. The I.T. changes which may be required are being studied by the Consultant. Bank is in the process of drafting Ind AS compliant Accounting Policies.

G BRANCH AND OFFICE NETWORK

Domestic Presence

The Bank has pan India presence of 3245. Out of 3245 domestic branches, 1205 are at Rural, 764 at Semi-urban, 647 at Urban and 629 in Metropolitan Centres. A total of 40 new branches have been opened during FY17, out of which 12 are at Rural, 14 at Semi Urban, 7 each at Urban and Metro centers. The rural branches include opening of 7 branches in unbanked rural centres. Further, 2 Metro and 1 each in Urban and semi-urban branches have been merged to consolidate the business of close by located centres.

International Presence

The Bank is having one overseas branch with a dealing room at Hong Kong. The business of Hong Kong has increased from Rs.12,519 crore as on 31^st Mar''16 to Rs.14,130.68 crore as on . 31^st Mar''17. The business of the branch increased by 12.87% _ on Y-o-Y basis. The total deposit as on 31^st Mar''17 stood at Rs.2535.54 crore, whereas advances stood at Rs.11595.14 crore. The Hong Kong branch has earned operating profit of Rs.112.20 crore and net profit of Rs.17.49 crore in FY17.

H. INTERNATIONAL BANKING

The Bank carries out its international business in India through its 53 authorized/ designated branches, which includes 5 : international branches & through its overseas branch at Hong Kong. The Bank also has a centralized fully equipped forex dealing room at FCTM Branch Mumbai which handles forex transactions in 9 currencies and maintains 13 Nostro accounts and 1 Vostro account. Export Credit of the Bank as on 31^st Mar''17 stood at Rs.2620.96 crore as compared to Rs.2539.80 . crore as on 31^st Mar''16. The Bank is taking all steps to increase ¹ the credit flow to exporters. Exporters'' meets are arranged at various centres to explain various facilities available to them. The Bank maintains correspondent relationship with prime banks abroad. The Bank is also catering to the needs of Nonresident Indians through its branches by providing various types of deposit & loan products e.g. FCNR, NRE & NRO deposits, Housing Loan etc. The Bank is also having an . arrangement with M/s. UAE Exchange & Financial Services Ltd. to facilitate Money Transfer Services to the domestic customers receiving remittances from their relatives residing abroad.

I. OPERATIONS DIVISION Business Processes

Business Process Re-engineering (BPR) Cell is functioning with the purpose of bringing desired changes in the existing _: systems and processes, products and business processes of

- the bank on a continuous basis for maximizing performance, mainly productivity and efficiency.

J. BUSINESS DIVERSIFICATION a. Insurance Business:

i. Life Insurance:

i The Bank as a corporate agent of M/s. Life Insurance Corporation of India, mobilized premium of Rs.103.73 crore during FY17 from 27888 policies, as against total premium of Rs.111.79 crore mobilized during FY16. The Bank''s earnings from Life-Insurance business during FY17 amounted to Rs.9.63 crore as against Rs.10.28 crore during FY16.

ii. Non Life Insurance:

The Bank as a corporate agent of M/s. Universal Sompo General Insurance Company Limited collected premium amounting to Rs.119.54 crore during FY17 from 283369 policies mobilized by the Bank, which earned revenue of Rs.11.81 crore as against Rs.11.34 crore in FY16.

The Bank has collected premium amounting to Rs.10.06 crore during FY17 from sale of 37247 customized âAllahabad Bank Health Care Plusâ policies, which earned revenue of Rs.1.42 crore.

b. Mutual Funds:

The Bank is distributing the Mutual Fund schemes of 6 AMCs i.e. Reliance Nippon AMC, Principal PNB AMC, Kotak Mutual Fund AMC, UTI MF AMC, Franklin Templeton AMC and Peerless AMC through Bank branches.

The Bank has augmented commission from distribution of Mutual fund business amounting to Rs.49 lakhs during the FY17 as against Rs.46 lakhs during the FY16.

c. Depository Services:

The Bank as Depository participant of NSDL & CDSL is providing Depository services to the customers and has earned an income of Rs.82.99 lakh during FY17 as against Rs.31.89 lakh during FY16 for providing Depository Services.

d. Online Trading Account:

The Bank is providing Broking facility to the demat customers of the Bank in association with M/s. Aditya Birla Money Limited. An income of Rs. 7.82 lakh was augmented by the Bank during FY17 on account of online trading activities.

e. Applications Supported by Blocked Amount (ASBA) Services:

Being Self Certified Syndicate Bank (SCSB) for submitting of application in public issues (IPO/FPO/ Right Issue) this facility has now been made available from all the branches of the Bank.

ASBA facility is also available for Syndicate/Sub syndicate Members for processing broker bidded IPO forms at 58 designated bank branches. During FY17, the Bank processed applications of the customers for 54 IPOs.

f. Cash Management Services:

The income under Cash Management Services is Rs.3.92 crore for the financial year 2016-17 as against Rs.3.18 crore during corresponding period last year.

K. GOVERNMENT BUSINESS

For implementing the Prime Minister''s dream for creating a pensioned society, the Bank extended the coverage for APY by enrolling 73830 individuals to address the old age income security needs of the citizen.

As a Point of Presence (POP) for National Pension System (NPS), the Bank is catering needs of two of its corporate clients i.e. Allahabad Bank and M/S Tenughat Bidyut Nigam Limited, Ranchi . Apart from these, the Bank is acting as Point of Presence Service Provider (POP SP) for old age pension need of general public through its 286 branches.

During FY17, the Bank participated in four tranches of Sovereign Gold Bond Scheme, launched by Govt. of India aiming to reduce the holding of the yellow metal and also to reduce import of Gold.

Central Government''s decision on the recommendations of the 7^th Pay Commission-Revision of pension of pre-2016 pensioners/ family pensioners has been implemented by the Bank in August 2016 to all the eligible pensioners.

During FY17, the Bank has participated in Income Declaration Scheme, 2016 and Pradhan Mantri Garib Kalyan Deposit Schme (PMGKDS).

L. TREASURY - OPERATIONAL HIGHLIGHTS Domestic Operations:

The treasury has earned a record trading profit of Rs.912.00 crores during FY 2016-17, thereby posting a Y-o-Y growth of 120.29% over FY 2015-16. Further, the Interest Income earned during FY17 is Rs.4091 crores, which is a 2.53% Y-o-Y growth over the previous period. Despite of a decrease in domestic Investment portfolio Rs.600.77 crores, i.e., from Rs.56034.13 crores in MarRs.2016 to Rs.55433.36 crores in MarRs.17, such feat could be achieved through prudent trading strategies in SLR securities and judicious investments in Non-SLR category.

Portfolio Highlights:

The global investment portfolio of the Bank as on 31.03.2017 stands at Rs.55711.96 crores, which includes domestic investment of Rs.55433.36 crores and Overseas investment by our HongKong Branch to the tune of HKD 333.85 mio, i.e., Rs.278.60 crores (converted @ 1HKD = Rs.8.3450). The portfolio of Rs.55711.96 crores is split in to HTM category carrying Rs.38526.97 crores (i.e., 69.15%) and AFS Category carrying Rs.17184.98 crores (i.e., 30.85%).

On an effective NDTL of Rs.2,03,860.00 crores as on 31.03.2017 the Bank has maintained SLR securities of Rs.47,600.00 crores which is 23.35% of NDTL against a requirement of 20.50%. Out of our SLR holdings, Rs.37,211.00 crores which is 18.25% of NDTL is held in HTM category against a limit of 20.50%.

The Bank''s NSLR portfolio of Rs.7833.65 crores comprises mainly of Rs.2584.51 crores of CD, Rs.1361.40 crores of Bonds/ Debentures, Rs.1457.99 crores of Security Receipts and Rs.1290.87 crores of shares and Rs.855.00 crores of Special SDL Bonds received under UDAY scheme. The equity portfolio of the Bank stood at Rs.1290.87 crores includes Rs.825.63 crores of shares received through conversion of Debt under CDR/SDR/ S4A schemes.

With the Modified duration under control the bank is maintaining a good investment portfolio in dated securities. The bank has increased the trading volume many fold in the HFT category. The bank is also venturing into the interest rate futures. The bank is also investing more in good corporate bonds which will attract more yields and also invest in commercial paper considering the short term liquidity management. With the favorable market conditions bank is also trying to invest in IPOs and FPOs of good companies and churn the equity portfolio in an effective manner.

The bank is trying to increase the forex turnover in the merchant by establishing a strong relationship with the existing exporters and imports and also meeting the prospective client. The bank has also succeeded in maintaining the business of oil companies by providing best quotes and services to these entities who jointly provides the largest forex turnover in the whole industry. The interbank trading activities have also improved thus increasing the profitability to the bank.

M. CUSTOMER CARE

The Bank has formulated customer centric policies such as Customer Rights Policy, Deposit Policy, Cheque Collection Policy, and Compensation Policy and these are displayed in Bank''s website. The Bank has adopted "The Code of Bank''s Commitment to Customers" & "Code of Bank''s Commitment to Micro & Small Entrprises" formulated by BCSBI. Citizen Charter is adopted by the Bank. It is available at the branches and website of the Bank. The Bank also conducts Customer Service Committee meetings at every branch and Zonal Office on monthly basis for providing better customer service.

Customer Grievance Redressal Cell

A web based Portal aimed at providing the customers with a platform to lodge their grievances against the Bank for deficiency in services has been provided on the Bank''s website www.allahabadbank.in under customer care. Complaints received directly at Head Office are also lodged through this portal for monitoring, record & follow up. In order to priorities & expedite the redressal, all Complaints are categorized in 3 Baskets viz, A,B & C. Complaints received through MOF,DPG,RBI and VIPs are put in the Basket A for expeditious redressal . Bank has Customer Grievance Redressal Cell at Head Office. The Nodal Officer of the rank of General Manager designated by the Bank monitors the implementation of customer service and complaint handling mechanism for the entire Bank. Complaints received from customers are being redressed and suitable replies are sent to the customers.

Initiatives taken during FY17 for improvement in customer service

Several initiatives were also taken to remain customer focused by providing fast service, bringing in diversified products/ services, responding to customers'' queries in time and redressal of customer complaints.

Customer Service committees have been formed at each and every branch and at Zonal offices. The Customer Service Committee meets once a month to study complaints/ suggestions, cases of delay, difficulties faced/ reported by customers/ members of the Committee and evolve ways and means of improving customer service. The members include a senior citizen too.

N. IMPLEMENTATION OF OFFICIAL LANGUAGE POLICY

The Bank has been leading in the area of implementation of Official Language and achieved almost all the targets in all parameters fixed by the Government of India, Ministry of Home Affairs, Department of Official Language for FY17. All the bilingual CBS and HRMS computers are under Hindi Interface. By adopting this bilingual system, implementation of Rajbhasha is increasing. In addition, the Bank is using Unicode Fonts for Hindi correspondence at all level.

During FY17, the Bank has been awarded with more than 30 awards for its excellent performance for the use of Hindi which includes regional level awards of Ministry of Home Affairs. In addition, Town Official Language Implementation Committees situated in different locations of the country have also awarded the Bank offices. The Bank is successfully convening the Town Official Language Implementation Committees constituted by the Government of India in Ranchi and Gonda.

The Draft and Evidence Committee of Parliament on Official Language inspected Allahabad Bank, Head Office on 27^th May, 2016 and the third sub-committee of Committee of Parliament on Official Language visited Jammu branch on 10^th June 2016, Abu Road (Mount Abu) on 19.09.2016 and Head Office on 17.01.2017. The Committee not only expressed satisfaction but also appreciated the efforts made by the Bank for progressive use of Hindi.

The Bank celebrates "Hindi Maah" in the month of September every year. Various competitions are organized at All India and Zonal levels in which staff members of all cadres participate enthusiastically. The winners are awarded with prizes in the Rajbhasha function. This year also, the Bank organized Hindi Maah and other programmes / competitions and awards and prizes were given.

O. SUBSIDIARY & JOINT VENTURE

The paid up capital of our sponsored RRB is Rs.61.93 crore. Central Government, State Government and Allahabad Bank contributed in paid up capital of AUPGB in the ratio of 50:15:35, respectively. The Bank''s contribution towards capital of this RRB was Rs.21.67 crore. The Net worth of sponsored RRB as on 31^st March''17 was Rs.789.36 crore.

During FY17, the total business of AUPGB increased from Rs.14346 crore in FY 2016 to Rs.16182 crore, showing an increase of Rs.1836 crore by 12.80%. The deposit and advances as on 31^st Mar''17 stood at Rs.9613 crore (Y-o-Y growth: 17.55%) and Rs.658 crore (Y-o-Y growth: 6.49%).

The Net Profit of our sponsored RRB as on 31.03.2017 stood at Rs.31.37 crore as against Rs.9.31 crore as on 31.03.2016, showing a Y-o-Y growth of 236.94 %. AUPGB is in profit since inception. The Gross NPAs of AUPGB increased from Rs.541 crore to Rs.607 crore (9.24% of total advances) during FY 17. All the 650 branches, 04 Extension Counters and 13 Administrative locations are at CBS. AUPGB is the only RRB in India, which is managing its own Data Center. Total no of employee were 2614 as on 31.03.2017.

Progress in opening of accounts under PMJDY as on 31.03.2017 stood at 10,87,228 accounts, out of which Rupay debit cards were issued in 7,68,051 accounts. Balance outstanding in those accounts was Rs.258.69 crore. Total number of accounts having zero balance as on 31.03.2017 stood at 78,892. AUPGB enrolled 291503 no of customers under PMJJBY and 650021 under PMSBY. Out of 28318 saving linked SHGs credit linkage was done in 22756 no of SHGs accounts with an outstanding of Rs.133.95 crore.

The RRB sponsored by the Bank is actively participating in economic development of the areas of their presence. With the implementation of Core Banking Solution (CBS), rural customers are also getting benefit of latest technology thus providing services to the rural poor under Financial Inclusion Plan at their doorsteps. CBS is running with anywhere banking and SMS alert.

In your sponsored RRB, the facility of Micro ATMs, RTGS, NEFT, Rupay ATM cards/ KCC cards, KIOSK banking Solution (KBS) under FIP, E-KYC, Aadhar Payment Bridge System (ABPS) under DBT etc is also being provided to customers by AUPGB.

Q. AWARDS AND ACCOLADES

- The Bank has been awarded by M/s. Life Insurance Corporation of India for mobilizing maximum no. of policies among 153 channel partners of M/s. LICI during FY17.

- FGMOs - Lucknow, Kolkata & Mumbai, Zonal Offices -Raipur, Bhubaneswar, New Delhi & Bhagalpur were awarded by LICI during FY17 for becoming BIMA FGMOs and Bima Zones respectively.

- The Bank was adjudged as the Best Bank in PMJDY implementation in the category of Group-Other states and bagged prestigious Prime Ministers Award for excellence in Public Administration for North 24 Parganas (West Bengal).

- Acknowledging the Financial Inclusion Landscape achieved by the Bank, it was adjudged as Runner Up in the category of Best Financial Inclusion Initiatives amongst Medium Banks -"Banking Technology Award 2017" by Indian Banks Association.

R. FUTURE BUSINESS PLAN OF THE BANK

Taking into account the optimistic outlook of the economy and its different sectors, your Bank will align its business objective to maximize its gains. The Bank shall primarily focus on aggressive recovery drive, further build-up in CASA, rebalancing of loan book with focus on SMARt loans (S: Small, M: Micro, A: Agriculture and Rt: Retail loans), thereby increasing its share to the loan book supported by technology. Further, the Bank believes that its employees are its valuable assets and therefore, up-scaling of officers by means of training shall be undertaken. The Bank will also look at different avenues to raise capital.

S. BOARD OF DIRECTORS

As on 31.03.2017, there were 10 Directors on the Board of the Bank including 3 whole time Directors i.e. One Chairman & Managing Director and two Executive Directors. The following changes took place in the composition of Board of Directors.

- Shri Rakesh Sethi completed his tenure as Chairman and Managing Director due to attaining the age of superannuation as on 30.04.2017.

- Smt. Usha Ananthasubramanian was appointed as Managing Director and CEO of the Bank w.e.f. 6th May, 2017.

- Shri Gautam Guha was appointed as Part-time Nonofficial Director on the Board of the Bank for a period of three years w.e.f. 25.04.2016. Shri Guha was Additional Deputy Comptroller & Auditor General of Govt. of India.

- Shri J. K. Singh Kharb completed his tenure as Executive Director due to attaining the age of superannuation as on 30.06.2016.

- Shri Anshuman Sharma was appointed as Government Nominee Director on the Board of the Bank w.e.f. 14.06.2016 in place of Dr. Shashank Saksena. Shri Sharma is posted as Deputy Secretary at Department of Financial Services, Ministry of Finance.

- Shri Y. P. Singh completed his 3 years tenure as Workmen Employee Director on 28.08.2016. On the same day, Shri Ajay Shukla, completed his 3 years tenure as Part Time Non Official Director.

- Shri Vivek Deep was appointed as RBI Nominee Director on the Board of the Bank w.e.f. 06.12.2016 in place of Shri A. Udgata. Shri Vivek Deep is posted at RBI Kanpur and working as Regional Director of RBI for the State of Uttar Pradesh.

- Shri Sanjeev Kumar Sharma completed his 3 years tenure as Chartered Accountant Director on 17.12.2016.

- Shri S. Harisankar was appointed as Executive Director of the Bank for a period of three years w.e.f. 18^th February, 2017.

- The Board wishes to place on record its appreciation for the valuable contribution made by Shri Rakesh Sethi (Chairman and Managing Director), Shri J. K. Singh Kharb (Executive Director), Dr. Shashank Saxena, Shri A. Udgata, Shri Y. P. Singh, Shri Ajay Shukla and Shri Sanjeev Kumar Sharma (Directors).

T. DIRECTORS'' RESPONSIBILITY STATEMENT

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

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

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

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

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

- The accounts have been prepared on the principle of "going concern" basis.

U. ACKNOWLEDGEMENT

For and on behalf of the Board of Directors,

Usha Ananthasubramanian

Managing Director & CEO

The Directors have pleasure in presenting the Annual Report together with audited financial statements of the Company for the year ended 31st March, 2017.

FINANCIAL RESULTS

During the year under review, your company earned total income of Rs.1330.31 lacs as against Rs.994.62 lacs in the previous year. The summary of the financial results is as follows:

(Fig. in Rs.)

	31st March, 2017	31st March, 2016
Total Income	1330.31	994.62
Total Expenses	128.47	147.00
Profit Before tax (PBT)	1201.84	847.62
Provision for tax	250.67	244.53
Income Tax Adjustment (Previous Years)	274.93	28.58
Profit after tax	676.24	574.51

DIVIDEND

Directors do not recommend any dividend for the year ended 31st March, 2017.

RESERVES

The Directors do not propose to carry any amount to any reserves.

COMPANY''S OPERATIONS AND AFFAIRS

During the year 2016-17, your Company''s activities have been confined mostly to Debenture / Security Trusteeship, conducting TEV study, vetting of financials besides holding shares of various companies in trust / as a pledgee for holding securities as a security trustee . During the FY 2016-17, your Company generated a total revenue of Rs.1330.31 lacs against revenue of Rs.994.62 lacs earned during the year 2015-16 out of which Investment income was Rs.1200.58 lacs for the year ended 31/03/2017against Rs.642.05 lacs earned during the year

2015-16 and the revenue earned from the other sources for the year ended 31/03/2017 was Rs.129.73 lacs as against Rs. 352.57 lacs for the year ended 31/03/2016.

OUTLOOK FOR THE CURRENT YEAR

Your company''s top management has undergone significant changes. Some of the Directors have vacated from the office pursuant to relinquishment of office and in their place new directors were nominated on the Board of the Company by Allahabad Bank. Pursuant to superannuation of Shri J.K.SinghKharb as Executive Director, Allahabad Bank with effect from 31/5/2016 he ceased to be a Director of AllBank Finance Ltd. (ABFL) and in place of him Allahabad Bank nominated Shri Shrawan Kumar Srivastava, Chief General Manager, Allahabad Bank, as a Director of AllBank Finance Ltd. Also pursuant to the appointment of Shri A.K.Goel as

Executive Director of Union Bank of India with effect from 15/ 9/2016, he resigned from the Board of Directors of AllBank Finance Ltd. and in place of him, Allahabad Bank nominated Shri PC.Sharma, General Manager, Allahabad Bank as a Director of AllBank Finance Ltd. Shri N.K.Sahoo, Executive Director of Allahabad Bank has also been appointed as a Director of AllBank Finance Ltd. with effect from 6/12/2016.

The GOI & RBI have asked the PSU banks to close their noncore business and in view of this, in principle approval has been accorded by the respective Boards of the promoter Bank i.e. Allahabad Bank and our Company i.e. ABFL for its merger with the bank and therefore, the future business plan for the F.Y. 2017-18 has not been envisaged.

CORPORATE SOCIAL RESPONSIBILTY COMMITTEE

A Corporate Social Responsibility Committee was formed of Mr. Subir Das, Mr. Atul Kumar Goel and Mr. M.V Rao as members of the Committee which was reconstituted on appointment of Sri Atul Kumar Goel as the Executive Director of Union Bank of India and his retirement from the Board of ABFL by taking Shri PC.Sharma as one of the members of the above Committee. The annual report of CSR containing the particulars specified in the Annexure to the Companies (CSR policy) Rules, 2014 is annexed as âAnnexure- Bâ and forms a part of this Directors report.

DEPOSITS

Your Company has not accepted any deposits and as such, no amount of principal or interest was outstanding as at March 31, 2017.

OTHER MATTERS OF EMPHASIS

Your Directors have the following views on the comments made by the Auditor in his report:

1. Comments of Auditors on Notes No.1.6 of Notes on financial statement

As per the applicable Schedule II of the Companies Act, 2013, residual value of the assets to be kept after depreciation has been prescribed up to 5% as upper limit and as there is no lower limit, your company has been considering residual value of the assets as Nil. To ensure that this is in conformity with the provisions of Schedule II of the Companies Act, 2013, opinion was sought from M/s MookherjeeBiswas&Pathak,practicing Chartered Accountants who have confirmed vide their opinion dated 9^th May 2017 that the method adopted by your company is correct.

2. Comments of Auditors on Note No.2.26 of Notes on financial statement-

As explained in Note No.2.26 of Notes on Financial Statement, Deferred Tax Asset is not recognized unless there is virtual certainty that sufficient future taxable income will be available against which such deferred tax asset will be realized. Your company in its earlier years consistently followed the principle of non- recognition of net deferred tax asset( i.e. deferred tax asset net of deferred tax liability)in its books of accounts in accordance with prudential accounting principle. Moreover, in view of the proposed merger of AllBank Finance Ltd. with Allahabad Bank, it has been considered more prudent not to recognize net deferred tax asset in the financial year 2016-17.

3. Comments of Auditors on Note No.2.31 of Notes on Financial Statement

The Note 2.31 of the Audited Financial Statement on recording of shares of various companies in the book of AllBank Finance Ltd, is self-explanatory in nature.

Regarding debiting Investment and crediting Other Income with the face value of the shares, your company has followed consistently the same method in line with the previous years in similar circumstances based on opinions of Chartered Accountants and Company Secretaries.

There is no significant financial impact in the financial statements of the year 2016-17 on account of the above.

COMPLIANCE OF SEBI GUIDELINES

Your company has complied with various guidelines, directives and circulars issued by SEBI pertaining to Merchant Banking, Debenture Trusteeship and other applicable capital market related activities.

PARTICULARS OF EMPLOYEES

None of the employees are covered under section 134 of the Companies Act, 2013 read with Companies (particulars of Employees) Rules 1975.

CONSERVATION OF ENERGY, TECHNOLOGY, ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGOINGS

The company has nothing to report under this head.

BOARD OF DIRECTORS

Shri RakeshSethi, Chairman & Managing Director of Allahabad Bank resigned from The Board of Directors of ABFL on 30.04.2017 pursuant to his superannuation from Allahabad Bank on 30.4.17.

Pursuant to superannuation of Shri J.K.SinghKharb as Executive Director, Allahabad Bank with effect from 31/5/2016 he ceased to be a Director of AllBank Finance Ltd. and in place of him Allahabad Bank had nominated Shri Shrawan Kumar Srivastava, Chief General Manager, Allahabad Bank, as a Director of AllBank Finance Ltd. Also pursuant to the appointment of Shri A.K.Goel as Executive Director of Union Bank of India with effect from 15/9/2016, he resigned from the Board of Directors of AllBank Finance Ltd. and Allahabad Bank has nominated Shri P.C.Sharma, General Manager, Allahabad Bank as a Director of AllBank Finance Ltd. Shri N.K.Sahoo, Executive Director of Allahabad Bank has also been appointed as Director AllBank Finance Ltd. with effect from 6/12/2016.

None of the Directors of the Company has been disqualified under section 274(i) (g) of the Companies Act, 1956.

CORPORATE GOVERNANCE

(a) Board Meetings:

During the year 2016-17, four (4) Board meetings were held and attendance of the Board Members was as under:

Director	No. of meetings	Meetings attended
Shri Rakesh Sethi	4	3
Shri J. K. Singh Kharb	1	1
Shri N.K. Sahoo	1	1
Shri S.K. Srivastava	3	3
Shri M. Venkata Rao	4	4
Shri Atul Kumar Goel	2	2
Sri PC. Sharma	2	2
Shri Subir Das	4	4
Shri Vinod Kothari	4	1
Shri Ashok Vij	4	2

(a) Audit Committee:

At the beginning of the year 2016-17, Audit Committee comprised of Shri Subir Das as Chairman, Shri J.K.SinghKharb& Shri VinodKothari as Members. However, due to changes in the constitution of the Board of Directors during the year, the Audit Committee was also reconstituted. As on 31/3/2017, the Audit Committee comprised of Shri Subir Das as Chairman and ShriVinod Kothari and Shri P.C.Sharma as its members. The scope of Audit Committee is as per Section 177 of the Companies Act, 2013.

During the year 2016-17, four (4) Audit Committee Meetings were held and attendance by Audit Committee members was as under:

Director	No. of meetings	Meetings attended
Shri Subir Das, Chairman	4	4
Shri Vinod Kothari	4	1
Shri J. K. Singh Kharb	1	1
Shri Atul Kumar Goel	1	1
Sri PC. Sharma	2	2

The Nomination and Remuneration Committee comprises of Shri M.V. Rao as Chairman, Shri Subir Das & Shri Vinod Kothari as Members. The scope of Nomination and Remuneration Committee is as per Section 178(1) of the Companies Act, 2013 and Rule 6 of the Companies (Meetings of Board and its Powers) Rules, 2014. During the year 2016-17, two (2) Nomination and Remuneration Committee Meeting were held and attendance by Nomination and Remuneration Committee members was as under:

Director	No. of meetings	Meetings attended
Shri M.V Rao, Chairman	2	2
Shri Subir Das	2	2
Shri Vinod Kothari	2	0

DIRECTORSâ RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134 of the Companies Act, 2013 with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

a) In the preparation of the annual accounts for the financial year ended 31^st March, 2017, the applicable accounting standards had been followed along with proper explanation relating to departures, if any.

b) The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit or loss of the Company for the year under review.

c) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) The Directors had prepared the accounts for the financial year ended 31^st March 2017 on a going concern basis.

e) The Directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

f) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

REGARDING KEY MANAGERIAL PERSONNEL

During the year, the followings were the Key Managerial Personnel of the Company :-

Mr. M Arumugam as the Chief Executive Officer (Till 11.11.2016)

Mr. Ajai Kumar as the Chief Financial Officer

Mr. Anil Kale as the Assistant Vice President

Mr. K.S.Shenoy as the Assistant Vice President

Mrs.Melvita Lewis as the Company Secretary

Mr. Debraj Roy as the Manager and Compliance Officer

INTERNAL CONTROL SYSTEM AND ADEQUANCY

The Company has in place internal financial control policy, commensurate with the size and complexity of operations to ensure proper recording of financial and operational information and compliance of various internal controls and other regulatory and statutory compliances.

DECLARATION BY INDEPENDENT DIRECTOR

The Independent Directors of the Company have given their individual declarations under section 149 (6).

PARTICULARS UNDER SECTION 186 &188

All transaction entered into with related parties as defined under the Companies Act, 2013 during the financial year were in ordinary course of business and do not attract the provisions of Section 186 and 188 of the Companies Act, 2013. Thus disclosure in form AOC- 2 is not required. Further there are no materially significant related party transactions made by the Company with Directors, Key Managerial personnel or other designated persons which may have a potential conflict with the interest of the Company at large. Suitable disclosure as required by the Accounting Standard (AS 18) has been made in the notes to the Financial Statements.

SUBSEQUENT EVENTS

1. There are no material changes and commitments affecting the financial position of the company which have occurred between March 31, 2017 and the date of the report.

2. The GOI & RBI have asked the PSU banks to close their non-core business and in view of this, in principle approval has been accorded by the respective Boards of the promoter Bank i.e. Allahabad Bank and our Company i.e. ABFL for its merger with the bank.

AUDITORS Statutory Auditors

The provisions of Section 139 read with Section 129(4) of the Companies Act, 2013 being applicable to the Company, the Comptroller and Auditor General of India, New Delhi had appointed M/s. N. Alam& Co, Chartered Accountants as Statutory Auditors of the Company for the year 2016-17. Internal Auditor

Pursuant to Section 138 of the Companies Act, 2013, on approval of the Board of Directors, M/s M.V.Damania&Varaiya are appointed as Internal Auditor for the Company.

MANAGEMENTâS REPLY TO THE AUDITORSâ REPORT

The Auditors made no specific qualification during the course of their audit.

EXTRACT ON ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as Annexure A.

ACKNOWLEDGEMENTS

Your Directors wish to place on record their gratitude to the Comptroller and Auditor General of India for their valuable guidance.

Your Directors also wish to place on record their sincere thanks to the Bankers viz, Allahabad Bank for their assistance, support and guidance from time to time and also thankfully acknowledge contributions made and efforts put in by the company''s employees.

For on and behalf of the Board of Directors

(P. C. Sharma) (N.K. Sahoo)

Director Chairman

Mar 31, 2014

The Board of Directors has pleasure in presenting the Directors'' Report along with the audited Statement of Accounts of the Bank for the year ended 31st March 2014.

1. PERFORMANCE OF ALLAHABAD BANK

The performance of the Bank is to be analyzed concomitantly with the aforesaid macroeconomic and banking environment during FY 13-14.

1.1 OPERATING RESULTS

Bank''s performance in key business parameters is presented below :

(Amt in Rs. Crore)

Parameter Mar''12 Mar''13 Mar''14 Growth (%) (Y-O-Y)

Total Business 271843 309678 331748 7.13

Total Deposits 159593 178742 190843 6.77

Total Advances 112250 130936 140905 7.61

Gross Investments 54770 58617 64348 9.78

Net Profit 1867 1185 1172 (1.11)

Operating Profit 3770 3385 4020 18.76

Operating Profit Ex. Trading Profit 3657 2705 3733 38.00

Provisions & Contingencies 1903 2200 2848 29.45

Total Income 16822 18913 20913 10.57

Total Expenditure (Excl. Prov) 13052 15527 16892 8.79

Interest Spread 5163 4866 5311 9.14

2.2 PERFORMANCE HIGHLIGHTS

- Total Business of the Bank increased to Rs.3,31,748 Crore as against Rs.3,09,678 Crore in previous year showing a YOY growth of 7.13 %.

- Operating Profit surged to Rs.4020 Crore as against Rs.3385 Crore last year showing a YOY growth of 18.76%.

- Net Profit came down to Rs.1172 Crore during the Financial Year ending 31.03.2014 as againstRs.1185 Crore last year showing a negative YOY Growth of 1.11 %.

- Net Interest Margin (NIM) decreased to 2.75 % during the Financial Year ending March, 2014 as against 2.81% last year.

- Deposits of the Bank went up to Rs.190843 Crore from Rs.178742 Crore last year. Year-on-Year basis, Total Deposits grew by 6.77 %.

- Gross Credit surged to Rs.140905 Crore from Rs.130936 Crore last year. Year-on-Year basis, the Gross Credit increased by 7.61 %.

- Credit Deposit Ratio stood at 74.26% as at March, 2014.

- Retail Credit grew to Rs.19308 Crore from Rs.17654 Crore last year, with an Y-O-Y growth of 9.37%.

- Non-Fund Non Interest Income during the Financial Year ending March, 2014 stood atRs.1085 Crore as againstRs.918 Crore last year.

- Capital Adequacy Ratio stood at 10.26 % as on 31.03.2014 under Basel-II norms and at 9.96% under Basel-III norms.

- Gross NPA to Gross Advances and Net NPA to Net Advances Ratios stood at 5.73% and 4.15 % as on 31st March, 2014 respectively.

- Provision Coverage Ratio stood at 46.03%.

2.3 CAPITAL AND RESERVES

Due to preferential allotment of equity to Government of India, the paid-up equity capital of the Bank increased from Rs.500.03 crore as on 31.03.2013 to Rs.544.61 Crore as on 31.3.2014. The reserves & surplus went up to Rs.11256.12 Crore as on 31.03.2014 from Rs.10852.49 Crore as on 31.03.2013.

2.4 DIVIDEND

The Board of Directors of the Bank in its meeting dated 11th January, 2014 declared an interim dividend of Rs.2.50 per equity share i.e. @ 25% of the paid up equity capital of the Bank. The Dividend payment date was 30th January, 2014.

Further, the Board of Directors of the Bank has not recommended any final dividend for the financial year 2013- 14.

2.5 Financial Ratios

Parameters 31.03.12 31.03.13 31.03.14

Capital Adequacy Ratio (%)

As per BASEL-II

Capital Adequacy Ratio Tier I (%) 9.13 8.05 7.67

Capital Adequacy Ratio Tier II (%) 3.71 2.98 2.59

Total Capital Adequacy Ratio Tier II (%) 12.84 11.03 10.26

As per BASEL-III

Common Equity Tier I Capital Adequacy Ratio (%) NA NA 7.35

Total Tier I Capital Adequacy Ratio (%) NA NA 7.51

Tier II Capital Adequacy Ratio (%) NA NA 2.45

Total Capital Adequacy Ratio (CRAR) (%) NA NA 9.96

Spread to Average Working Fund (%) 3.48 2.62 3.70

Average Cost of Funds (%) 6.98 7.31 7.04

Average Yield on Funds (%) 10.48 10.08 9.71

Average Cost of Deposits (%) 7.07 7.51 7.24

Average Yield on Advances (%) 12.09 11.43 10.83

Earnings per Share (Rs.) 39.18 23.70 22.89

Book Value per Share (Rs.) 192.93 209.93 201.04

Return on Assets (%) 1.02 0.64 0.57

Return on Average Net Worth (%) 19.35 11.77 10.93

Provision Coverage Ratio (%) 74.00 50.00 46.03

Net NPAs (%) 0.98 3.19 4.15

Profit per Employee (Rs.in lacs) 8.36 5.25 4.77

Productivity per Employee (Rs.in lacs) 1217 1373 1350

2.6 OFFICES & BRANCHES

The Bank is having 2840 domestic branches and one overseas branch at Hongkong. Out of 2840 domestic branches, 1131 are at Rural, 592 at Semi-urban, 581 at Urban and 536 at Metropolitan Centre. During the financial year 13-14 Bank opend 124 new branches, out of which 26 are at Rural, 39 at Semi Urban, 30 at Urban and 29 are at Metro centers. Further, 18 branches have been opened at Unbanked centers. Bank has plans to open 450 new branches during the financial year 14-15.

3. DEPOSIT MOBILISATION

Total deposits of the Bank showed a growth of 6.77 % to Rs.190843 Crore as on 31.03.2014 as against a growth of 12 % a year ago. The reason being, a conscious decision taken by the Bank to shed part of high cost bulk deposits and CDs during the year and this has resulted into lower growth rate in Deposits and Business figures of the Bank, compared to previous years. SB deposits grew by Rs.5753 crore to Rs.50728 Crore as on 31.03.2014, constituting 26.74 % of aggregate deposits. Bank emphasized on CASA deposits mobilization and observed saving deposits & CASA deposit mobilization campaigns during the year.

4. CREDIT DEPLOYMENT

Total advances of the Bank went up by 7.61% to Rs.140905 Crore as on 31.03.2014. Credit-Deposit ratio (gross) stood at 74.26 % as against 74.00% last year. The Base Rate (BR) of the Bank was at 10.25 % on 31.03.2014. Yield on advances stood at 10.83 % during 2013-14 as against 11.43% during 2012-13 in line with the general market scenario.

4.1 CORPORATE & MID CORPORATE CREDIT

The bank has major thrust on faster delivery & adoption of best practices in credit administration. During the year, efforts were made to improve the speed of decision making without compromising on quality. As a part of its ongoing business strategy to improve the quality of assets, the bank analyses the prevailing position, problems foreseen in near future and identifies weaknesses/potential defaults at any stage. This enables the Bank to take corrective steps to prevent impairment in credit quality, which includes restructuring in deserving cases.

4.2 RETAIL CREDIT

Total Outstanding under Retail Credit as on 31.03.2014 stood at Rs.16976.00 Crore as against Rs.14773.00 Crore as on 31.03.2013. The growth so registered on Y-o-Y basis is 14.91%. In Housing Loan segment and Car Loan segment there is appreciable growth (Y-o-Y) of 26.23% and 25.57% respectively.

To enhance the confidence / comfort level of the customers, recently, Bank has introduced the facility for Pre Approved Housing Loan limit (All Bank Pre Approved Limit-APPL) based on the income criteria of the prospective Housing Loan borrowers before finalizing their House / Flat. This will enhance the comfort to the prospective Housing Loan customers about their eligibility of Housing Loan, even before finalization of the property.

Education Loan Scheme has been made more customers friendly with attractive rate of interest and lower security requirement for premier Institutions. Management quota students have also been brought under the purview of Education Loan Scheme subject to fulfillment of other terms and conditions. Interest concession of 0.50% is offered to Girl students.

A new product namely "All Bank Home Appliance Finance Scheme" have been launched for financing consumer durables like TV Set/Washing Machine/Air Conditioner etc. to all categories of customers to boost Retail Credit portfolio.

5. Priority Sector Credit

- Priority Sector Credit grew from Rs.39403 Crore as on 31.03.2013 to Rs.47741 Crore as on 31.03.2014, registering an absolute YOY growth of Rs.8338 Crore (21.16%). Bank has achieved 38.30 % of ANBC as on Mar''14.

- Agriculture Credit increased from Rs.17688 Crore as on March 2013 to Rs.21924 Crore as on March 2014, registering an absolute YOY growth of Rs.4236 Crore (23.95%). Bank has achieved 17.59 % of ANBC as on Mar''14.

- Direct Agriculture Credit increased from Rs.13712 Crore as on March 2013 to Rs.16687 Crore as on March 2014, registering an absolute YOY growth of Rs.2975 Crore (21.70%). Bank has achieved 13.39 % of ANBC as on Mar''14.

- Fresh Credit Disbursal in Agriculture Loans reached Rs.7970 Crore during the current year 2013-14 against the target of Rs.7590 Crore, achieving 105.01% of the target.

The achievements under PS and Agriculture were marginally lower than stipulated norms.

Bank''s Performance under Priority Sector and Weaker Sections as on 31.03.2014 is presented below:

(Amount Rs. in Crore)

Mar-12 Mar-13 Mar-14 Sub-Sector Growth (%) (Y-O-Y)

Direct Agriculture 12304.38 13711.99 16686.99 21.70 (% to ANBC) (13.55%) (12.69%) (13.39%) (Norm 13.5% Min.)

Indirect Agriculture 4285.43 3976.20 5236.88 31.71 (% to ANBC) (4.50%) (3.68%) (4.20%) (Norm 4.5% max.)

Total Agriculture (% to ANBC) 16589.81 17688.19 21923.87 23.95 (Norm 18%) (18.05%) (16.37%) (17.59%)

Micro & Small Enterprises 16182.28 16570.21 19519.66 17.80

Other Priority Sector Credit 4624.34 5145.04 6297.66 22.40

Total Priority Sector Credit 37396.43 39403.44 47741.19 21.16

(% to ANBC) (41.19%) (36.47%) (38.30%)

(Norm 40%)

5.1 RUPAY KISAN CARDS (RKC)

- The Bank issued 2.58 lacs fresh Kisan Credit Cards involving a credit amount of Rs.4037.21 crores during the financial year 13-14.

- Bank is digitally processing all KCC loan applications under Akshay Krishi-Kisan Credit Card Scheme.

- Bank has issued 257123 Rupay Kisan Cards till March 2014 and has planned to issue cards to all eligible KCC account holders during this Financial Year.

Through Rupay Kisan Cards the borrowers can withdraw cash from Rupay enabled ATMs and can make purchases at point of sales (POS) machines.

5.2 RE-VERIFICATION OF ACCOUNTS UNDER ADWDR SCHEME-2008

The process of re-verification of agriculture accounts under Agriculture Debt waiver & Debt Relief (ADWDRS) scheme- 2008 has been completed. No incidences of any tampering of material facts have been found.

5.3 MSE SECTOR FINANCING

Credit to Micro and Small Enterprises (MSE) grew from Rs.16570 Crore as on March 2013 to Rs.19520 Crore as on March 2014, registering an absolute YOY growth of Rs.2950 Crore (17.80%).

5.4 COLLATERAL FREE LOANS VIS-Ã-VIS COVERAGE UNDER CGTMSE

Bank has given much thrust on credit delivery to collateral free loans covered under CGTMSE. As on 31.03.2014, 37903 proposals have been covered under CGTMSE amounting to Rs.1611.23 Crores.

5.5 BANK''S EXPOSURE TO MICRO FINANCE INSTITUTIONS (MFIS)

As on 31.03.2014, outstanding prevails at Rs.234.22 crores in 12 number of MFI accounts.

6. CORPORATE SOCIAL RESPONSIBILITY

6.1 During the financial year 2013-14 Bank provided fianancial support aggragating to Rs.29.68 lac under Corporate Social Responsibility (CSR) to various organisations/activities as detail below.

Sl. Organisations/Activities Amount Spent No. (Rs. in lac)

1 Saroj Gupta Cancer Centre & Research Institute 2.89

2 Udyan Shalini Fellowship Prog. 0.24

3 Water Purifier & Sewing Machine 0.55 (Distributed by ZO Guwahati)

4 Bhawna Aj O Kal 1.00

5 Repairing/ Renovation of Girl''s Hostel of Sabarmati 10.00 Harijan Ashram Trust, Ahmedabad

6 Centurian University of Technology and Management, Bhubaneshwar 15.00

6.2 Bank''s endevaour is to serve the society through various means. Taking its inititave further towards Corporate Social Responsibility, the Bank made donations to various charitable institutations/fund as detailed below:

a. Uttarakhand Chief Minister''s Relief Fund (Rs.5.00 Crore)

b. Bhagwan Mahaveer Viklang Sahataya Samiti, Jaipur (Rs.0.05 Crore)

7. LEAD BANK SCHEME

- Bank is having Lead Bank responsibilities in 17 districts, 13 in Uttar Pradesh, 2 in Jharkhand and one each in Madhya Pradesh and West Bengal.

- The Bank disbursed Rs.3494.26 crore under Priority Sector Credit against a target of Rs.3256.40 crore under Lead District Credit Plan 2013-14 achieving 107.30% of the target.

- As Lead Bank, our Bank took initiatives in implementing all State and Central Government programmes.

8. REGIONAL RURAL BANK (RRB)

- There is one Regional Rural Bank sponsored by our Bank i.e., Allahabad UP Gramin Bank (AUPGB), Banda (UP). The gross profit of AUPGB has come down to Rs.27.46 Crore during FY 13-14 as against Rs.87.46 Crore during FY 12-13.

- The RRB reached a deposit level of Rs.6437.08 crore registering a negative growth of 1.85% over March 2013. The main reason for this negative growth was due to delays in receipt of cane payment by farmers as well as shedding of bulk and high cost deposit by the Bank.

- Advances of the RRB increased from Rs.4253.71 crore to Rs.5098.91 Crores (Target Rs.5470.00 crore) achieving a growth of 19.87% over March 2013.

- As per Government Guidelines, all the branches of the RRB were migrated successfully to CBS and are providing NEFT/RTGS facilities to its customers.

9. STATUS OF RURAL SELF EMPLOYMENT TRAINING INSTITUTE (RSETI)

- Bank has a total of 21 RSETIs. These are in the states of Uttar Pradesh (15), Jharkhand (3), Madhya Pradesh (1) and West Bengal (2), which are actively imparting skill development training to the rural youth and creating financial literacy awareness among the rural people.

- During a recent review by Ministry of Rural Development, Govt. of India out of 18 eligible RSETIs for grading, 9 have been graded as ''AA''/ ''A as compared to one ''A grade during the previous review as on March''2012.

- Bank has provided 442 skill developments training to 13425 unemployed youth, out of which 5160 are settled with bank finance during FY13-14 for starting their own entrepreneurship ventures.

- Our RSETI, namely Lakhimpur Kheri has been selected as top performing institute in the country based on overall performance & RSETI Hamirpur has been awarded consolation prize. Our Bank has been awarded 3rd Prize as a stakeholder.

10. FINANCIAL LITERACY AND CREDIT COUNSELING CENTRES (FLCC)

- Bank has 17 FLCs operating in all 17 Lead Districts and one in Kolkata. As such, 18 FLCs are functioning now.

- All the Rural and Semi Urban branches are also actively participating in the financial literacy initiatives of Reserve Bank of India.

- 41211 Rural youth have been benefitted of which 12020 have been converted into Bank customer.

11. FINANCIAL INCLUSION

- Bank has achieved coverage of 5110 villages on 31.03.2014 under its Board approved financial Plan by way of 121 brick & mortar branches, 4 Satellite branches and 4985 villages covered through ICT based BC Model.

- Out of 4985 villages, 412 Ultra Small Branches(USB) have been opened , where one Officer visits the village on all working days with Lap top having VPN connectivity to render all types of banking solutions.

- Three year plan for FI Implementation (2013-2016) for population below 2000 in 15196 villages allotted to our Bank has been prepared and being implemented towards universal Financial Inclusion.

12. NON-PERFORMING ASSETS (NPAs) MANAGEMENT - 2014

The Gross NPA and Net NPA stood at Rs.8068.04 Crore and Rs.5721.81 Crore as on 31.03.2014 respectively. The Gross & Net NPAs as percentage to gross advances & net advances was 5.73 % & 4.15 % respectively. Though the Bank was able to recover fairly good amount (Rs.3446.48 Crore), due to fresh addition of NPAs to the tune of Rs.6021.22 Crore, the outstanding NPA has increased. The provision coverage ratio stood at 46.03 %.

12.1 CREDIT MONITORING & RESTRUCTURED DEBTS

At Head Office level a separate vertical, headed by General Manager (Credit Monitoring), has been set up because of the challenging scenario, for monitoring and supervising the loan assets. The Credit Monitoring Department alerts, guides and follows up with the field functionaries for up-keeping of the asset quality, preventing down-gradation and slippage and advises measures against the delinquent assets.

The slippage ratio of the assets has been contained at 4.79% during FY13-14 as against 5.35% of corresponding previous FY12-13.

12.2 RESTRUCTURED DEBTS

Towards revitalising the distressed assets as per guidelines from Reserve Bank of India, the restructuring of debts has been considered by bank as under:

(Rs. in Crore)

31.03.2014 Type of Restucturing No. of cases Amount Outstanding %to Gross Credit Sacrifice

CDR cases 42 4445.85 3.16 380.14

Non-CDR 13473 6451.66 4.58 174.09

(i) Non-CDR-SME 1807 489.45 0.35 9.69

(ii) Non-CDR-Others 11666 5962.61 4.23 164.40

Total Restructuring 13515 10906.51 7.74 554.23

The quantum of restructured debts (Standard) is 7.74% of Gross Credit as on 31.03.2014 as against 9.09% as on 31.03.2013.

13. INTERNATIONAL BANKING

The Bank carries out its International business in India through its 53 authorised/ designated branches, which includes 5 International branches & through its overseas branch at Hong Kong. Export credit of the Bank as on 31.03.2014 stood at Rs.2859 crore. The Bank is taking all steps to increase the credit flow to exporters. Exporters'' meets are arranged at various centres to explain various facilities available to them. The Bank maintains correspondent relationship with prime banks abroad and has ''Standard Settlement Instructions'' in various currencies with 15 foreign banks. The Bank is also catering to the needs of Non-Resident Indians through its branches.

14. OVERSEAS PRESENCE

Bank is having one overseas branch at Hong Kong. The Business of Hong Kong branch has increased from Rs.7354 cr as on 31.03.2013 to Rs.7590 cr as on 31.03.2014. The Hong Kong branch has earned a net profit of Rs.62 cr in FY13-14.

The Bank is also having a Representative Office at Shenzhen, China. Bank has received approval from the Reserve Bank of India for opening a Branch at Dhaka, Bangladesh and has filed the application with Bangladesh Bank for their permission

15. FEE BASED INCOME

Total fee based income of the Bank during the financial year 13-14 was Rs.1084.68 as against Rs.917.88 in the financial year 12-13 registaring a Y-O-Y growth of 18.17%.

The Bank has deployed 144 Marketing Officers and 58 specified persons for sale of these financial products pan India.

16. BUSINESS PROCESS RE-ENGINEERING (BPR)

Improvement in Productivity, Efficiency & Profitability with introduction of technology enabled products for rendering convenient, caring and attractive services to customers continued to remain the prime focus of the Bank under Business Process Re-engineering.

With this vision to strive for excellence, the Bank has moved towards Customer Centric activities from Process and Product Centric activities. The existing processes are being reviewed continuously by streamlining & simplifying the systems & processes and also as preventive steps against possible frauds & forgeries.

During the financial year 13-14, Centralized Processing Hubs (CPH) have been further strengthened by linking more than 1100 branches for back office activities like issuance of Personalized Cheque Books, SB Account Opening through Welcome Kits, Term Deposit Maturity Notices etc. For rest of the Non-CPH branches, personalized Cheque Intending System has been centralized. Grid based Cheque truncation System (CTS) has been extended to Western & Northern Grid also in addition to the existing Southern Grid.

17. NEW INITIATIVES - E-DELIVERY

E-LOBBY

- Bank has introduced E- Lobbies in 25 metro/urban branches and plans to open 225 during FY14-15. E- Lobbies will include the following:

- Passbook Printing Kiosk

- Cheque Deposit Kiosk

- Internet Banking Kiosk

- Cash Deposit Kiosk (Single Note acceptor)

Besides, above, Bank installed Cash Deposit Kiosks in 9 rural branches and plans to open 91 during FY14-15.

18. INFORMATION TECHNOLOGY

Total number of ATMs of Bank has been increased to 901 as on March''14. Bank has issued more than 27.97 lacs ATM- cum Debit Cards to its customers. VISA debit card has been made live for e-commerce (VbV). Total number of Point of Sale (POS) has been increased to 316. POS has been made live for Master Card also. Online Payment gateway services are running successfully at the merchant websites through our Internet Banking channel. More than 2300 merchants added to our gateway through M/s Bill Desk and M/s Tech Process.

19. CUSTOMER SERVICE

As a commitment to provide excellent customer service and services to Micro and Small Enterprises & to create awareness to customers about the common codes provided by Banking Codes and Standards Board of India (BCSBI), Bank has introduced various steps. Notable among them are:

(i) Display on ATM screens inviting customers to visit the Bank''s website or BCSBI''s website for getting to know about their rights in terms of the Codes

(ii) Printing of such messages on the backside of the ATM transaction slip

(iii)Grievance Redressal Mechanism has been strengthened for quick disposal of complaints with the help of Internal Ombudsman posted by the Bank at Head Office.

20. KNOW YOUR CUSTOMER & ANTI MONEY LAUNDERING

The Bank has adopted the comprehensive policy guidelines on Know Your Customer / Anti Money Laundering Norms in consonance with the Reserve Bank of India''s directives. The guidelines for submission of reporting under Prevention of Money Laundering Act, PMLA, 2002 viz. Cash Transaction Reports (CTRs), Suspicious Transaction Reports (STRs), Non Profit Organizations Transaction Reports (NTRs) and Counterfeit Currency Reports (CCRs) have been issued from time to time. The reporting system has been made online as per instructions of Financial Intelligence Unit of India (FIU-IND) and all the reports are uploaded on their website within prescribed time.

21. RISK MANAGEMENT

RBI guidelines on Basel III Capital Regulations have been implemented from 1st April 2013. Policies and procedures for credit and operational risk have been formalized and documented in compliance with RBI guidelines. The Bank has developed score cards for retail loans and new models for non-retail rating. In order to implement Internal Rating Based (IRB) approaches for Credit Risk, Facility Rating Model has also been developed, implementation of which will make the rating system of the Bank two-dimensional. The Bank is in the process of development of risk based pricing mechanism, Risk Adjusted Performance measurement and calculation of Risk- Adjusted Return on Capital (RAROC) Framework.

22. RIGHT TO INFORMATION

In pursuance of the enactment of Right to Information Act, 2005, the Bank has designated 48 Central Public Information Officers at all its Zonal Offices including Head Office and an Appellate Authority at Head Office. Further, as per the directions of Central Information Commission (CIC), a Transparency Officer for the Bank, has also been designated. The Bank is providing information to the citizens of India through suo-moto disclosures on website as well as through disposal of requests for information received under the Act. During FY13-14, the Bank received 3082 requests for information and 590 First Appeals, under the Act, out of which 3010 RTI applications and 516 RTI appeals were disposed of.

23. INSPECTION & AUDIT

With the implementation of Risk Based Internal Audit & Risk Based Concurrent Audit, the Audit plan is now made as per the Risk profile of the branches and the audit resources are directed towards high risk areas.

Bank has since indentified certain areas as ''Zero Tolerance Areas''. This will foster and ensure further robustness of the system and control in the branches as well as to keep the deviations and irregularities at a bare minimum level.

24. VIGILANCE

Bank has taken many new initiatives in the area of preventive & predictive vigilance in the recent years. Certain important measures undertaken to curb incidents of frauds include mandatory reference to Cautionary list of Third Party Entities, verification of genuineness of auditing of Financial Statements submitted by Borrowers/Guarantors, mandatory reference to CIBIL Reports of the borrowers, Guarantors, Mortgagors, checking status of properties proposed for mortgage through reference to Central Registry (CERSAI) and to ascertain noting/ registration of Bank''s charge on the property.

In recognition of spectacular performance of Allahabad Bank in vigilance functions, the Bank has been awarded "Vigilance Excellence Award 2013-14" by the Institute of Public Enterprises, Hyderabad during its Golden Jubilee Celebrations.

25. GOVERNMENT BUSINESS

Under National Pension System (NPS), the Bank expanded the coverage area for NPS lite (Swabalamban) by getting authorization of 2290 additional branches during the FY13- 14. During the FY13-14, the Bank has accepted subscription under Inflation Indexed National Savings Securities-(IINSS- C) launched by the Government of India.

26. AUTOMATED DATA FLOW (ADF)

As per the RBI Approach Paper, ADF cell of the Bank at Head Office is implementing a uniform and seamless reporting system, where information from Bank''s different source systems are flowing to a Centralized Data Repository (CDR) without any manual intervention and reports are being generated.

27. OFFICIAL LANGUAGE

The Bank received several National level prizes for outstanding performance in the area of implementation of Official Language. The Bank was awarded "Consolation Prize" under prestigious "Indira Gandhi Rajbhasha Puraskar" for the year 2011-12 for commendable performance in the area of Official Language Implementation from Official Language Department, Ministry of Home affairs, Government of India. This coveted prize was received by the then Chairman & Managing Director of the Bank Smt. Shubhalakshami Panse on 14th September, 2013 from His Excellency, The President of India Shri Pranab Mukherjee, in presence of Hon''ble Union Minister of State for Home Affairs Shri R. P. N. Singh and Hon''ble Union Minister of State for Home Affairs Shri M. Ramchandran.

Our Bank was awarded "Third Prize" in Region ''C'' under "Reserve Bank Rajbhasha Shield Competition" for the year 2011-12. The then Executive Director of the Bank, Shri Arun Tiwari received the prize from the then Governor of Reserve Bank of India Dr. D. Subbarao on 28th August, 2013 in a grand ceremony held at Mumbai in Central Office of the Reserve Bank of India. One officer of the Bank secured ''First'' Position in linguistic group ''A'' in the All India Inter Bank Hindi Essay Writing Competition 2012-13 organized by the Reserve Bank of India and was awarded by the Governor, RBI in the same ceremony.

The 3rd Sub-committee of Committee of Parliament on Official Language inspected our Pithoragarh branch (Z. O. Dehradun), Karvi Branch (Z. O. Allahabad) and Head Office during the year. The Drafting & Evidence Sub-committee of Committee of Parliament on Official Language also inspected our Zonal Office, Ahmedabad and Lucknow.

28. HUMAN RESOURCES

The Bank continues to focus on overall development of its human assets through manpower planning, knowledge enrichment, capacity building, promotion & career progression, staff welfare measures etc. to make them focussed and productive.

28.1 RECRUITMENT & MANPOWER MIX

In order to meet the strategic needs of the Bank our Human Resource Department has been constantly infusing new recruits to the system to strengthen the existing manpower. During the financial year 13-14, total 3384 officers/employees have been recruited by the Bank, which includes 1508 officers (including specialist officers) and 1876 SWOs-A in clerical cadre. Further, we are in the process of recruiting 600 officers (including specialist officers) and 500 SWOs-A during the Financial year 2014-15.

28.2 THE MANPOWER MIX OF THE BANK IS AS UNDER:

Category As on 31.3.2013 As on 31.03.2014

Officer 11407 12270

Clerk 6829 8349

Sub-staff 4321 3950

Total Manpower 22557 24569

Out of which

Scheduled Castes 5827 6246

Scheduled Tribes 1440 1669

Other Backward Class 2666 3406

Women 3293 4063

Others (MC, PH & XSM) 1824 2082

SC/ST and OBC Cells have been set up in Head Office and Zonal Offices under the Chief Liaison Officer and Liaison Officers respectively. Besides dealing with the grievances of SC/ST and OBC employees of the Bank, they look after the implementation of Government guidelines issued from time to time in this regard.

29. PUBLICITY ENDEAVOURS

The Bank has gone for nation-wide campaign on Television, Radio, and Newspapers/Magazines, hoardings etc. Bank has also made publicity for popularizing and marketing various products of the Bank.

30. SUBSIDIARY & JOINT VENTURE

AllBank Finance Ltd., a wholly owned subsidiary of Allahabad Bank, engaged in Corporate Advisory Services, Project Appraisal, Issue Management, Loan Syndication, Debenture Trusteeship and Underwriting, posted a profit of Rs.3.70 Crore during FY 13-14.

The Bank holds 27.04% equity stake in Asset Management Company "ASREC (India) Ltd" along with other Banks/ Institutions

The Bank holds 30% equity stake in joint venture company "Universal Sompo General Insurance Company Limited" for general insurance business along with Indian Overseas Bank, Karnataka Bank Ltd., Dabur Investment Ltd. and Japanese insurance major Sompo.

31. FUTURE PLANS

The Bank will focus on Retail Business, Loan Syndication, etc in addition to other core banking activities. Focus areas of business for FY14-15 will be growth in Retail Business, Improving Asset quality and improving credit Monitoring, Customer acquisition and maximizing usage of e-delivery channels to reduce costs.

The Bank is planning for overseas expansion.

32. OPPORTUNITIES & CHALLENGES:

- Mortgages in the Retail banking opportunities in India is the best opportunity for Banking industry as the mortgages are to cross Rs.40 trillion by 2020.

- The next opportunity will be financial inclusion for both urban & rural population, opening of branches & ATMs, going into deep penetration with e-banking, making full utilization of technology with massive use of SMS banking, internet banking and mobile banking.

- The foremost challenges to the Banks in next few years will be Human Resources Management & asset quality maintenance and monitoring.

33. BOARD OF DIRECTORS

- The details of meetings of the Board and its Committees held during the Financial Year13-14 are as under:

Board/Committee(s) Number of meetings held

The Board of Directors 17

The Management committee of the Board (MCBOB) 21

The Audit Committee of the Board (ACB) 10

The Directors'' Promotion Committee (DPC) 04

Shareholders'' / Investors'' Grievance committee (SHIGC) 02

IT committee of the Board (IT-Comm) 03

Fraud Monitoring Committee (FMC) 09

Customer Service Committee (CSC) 04

Remuneration Committee (Remu Comm) 02

Risk Management Committee (RMC) 04

Share Issue & Allotment Committee 02

Credit Approval Committee (CAC) 32

Recovery Committee of the Board (RCB) 07

Election Committee of the Board (ECB) 03

- Shri Rakesh Sethi, Chairman & Managing Director joined the Bank on 12.03.2014. Prior to his present appointment Shri Sethi was the Executive Director of Punjab National Bank since 01.01.2011.

- Shri Jal Karan Singh Kharb joined the Bank as Executive Director on 23.01.2014. Prior to his present assignment Shri Kharb was the General Manager of Dena Bank.

- Shri Ajay Shukla and Shri Y. P. Singh joined the Board as Part-Time Non-Official Director and Workmen Employee Director, respectively, on 29.08.2013.

- Shri Sanjeev Kumar Sharma joined the Board as Part-Time Non-Official Director under Chartered Accountant category w.e.f. 18.12.2013.

- Shri Dinesh Dubey, Part Time Non-Official Director resigned from the Board of Directors on 17.02.2014.

- During the year Smt. Subhalakshmi Panse, Chairman & Managing Director retired from the Bank after completion of her tenure on 31.01.2014 & Shri Arun Tiwari, Executive Director was relieved from the Bank on 26.12.2013 for taking over his new assignment at Union Bank of India as Chairman & Managing Director.

- Shri Gour Das, Workmen Employee Director on the Board completed his tenure on 15.08.2013.

- Shri Rajesh M. Chaturvedi, Part-Time Non-Official Director under Chartered Accountant category on the Board completed his tenure on 13.07.2013

34. ACKNOWLEDGEMENTS

The Board of Directors records its appreciation for continued support and patronage of the shareholders/investors of the Bank. The Board of Directors gratefully acknowledges the valuable and timely advice, guidance and support from the Reserve Bank of India, Government of India and other regulatory agencies and look forward to their continued support and co-operation. The Board of Directors is thankful to the customers for their continued trust and confidence on the Bank. The Board records its appreciation for valuable contributions of the outgoing members and welcomes the new incumbents. The Board of Directors is pleased to place on record their appreciation for the committed services of all the employees of the Bank.

For and on behalf of the Board of Directors,

Date : 7 th May, 2014 (Rakesh Sethi)

Place : Kolkata Chairman & Managing Director

Mar 31, 2012

The Board of Directors has pleasure in presenting the Directors' Report along with the audited Statement of Accounts of the Bank for the year ended 31st March 2012.

BANKING & FINANCIAL SECTOR DEVELOPMENT

Financial markets in India have acquired greater depth and liquidity over the years. During FY 2011-12, Indian banks remained robust, notwithstanding a decline in capital to risk- weighted assets ratio and a rise in non-performing asset levels in the recent past. Capital adequacy levels remain above the regulatory requirements. The financial market infrastructure continues to function without any major disruption. With further globalization, consolidation, deregulation, and diversification of the financial system, the banking business becomes more challenging.

During FY 2011-12, growth in bank credit extended by scheduled commercial banks (SCBs) stood at 19.18% as on 30th March 2012 (21.51% the corresponding period of previous year). The growth in aggregate deposits has been 17.40% on the same date as against 15.9% of corresponding period last year. The business growth of SCBs has been in line with RBI's credit growth projection of 18% and deposits growth projection of 17%. Financial markets in India have acquired greater depth and liquidity over the years. Steady reforms since 1991 have led to growing linkages and integration of the Indian economy and its financial system with the global economy. Weak global economic prospects and continuing uncertainties in the international financial markets therefore, have had their impact on the emerging market economies. Sovereign risk concerns, particularly in the euro area, affected financial markets for the greater part of the year, with the contagion of Greece's sovereign debt problem spreading to India and other economies by way of higher-than-normal levels of volatility.

The macroeconomic fundamentals during the year exhibited challenging interest rate environment. There was hardening of interest rates in general for both the assets and liabilities. The cost of funds was escalated due to this situation and put pressure on NIM (Net Interest Margin) of the Bank during the year. The financial and banking system have been experiencing the twin problem of slackening growth and high inflation. To counter price spiral problems, RBI has increased Repo rates 5 times in FY 2011-12. The repo rate was increased to 7.25% as on 3rd May 2011 from 6.75% earlier which further increased to 8.50% on 5th October 2011.

PERFORMANCE OF ALLAHABAD BANK

The performance of the Bank is to be analyzed concomitantly with the aforesaid macroeconomic and banking environment during FY 2011-12.

OPERATING RESULTS

Bank's performance in key business parameters is presented below.

(Rs in crore)

Parameter Mar'10 Mar'11 Growth (%) Mar'12 Growth (%)

Net Profit 1206 1423 17.97 1867 31.18

Operating Profit 2549 3055 19.86 3770 23.42

Operating Profit Ex. Trading Profit 1972 2894 46.77 3657 26.34

Provisions & Contingencies 1342 1631 21.55 1903 16.65

Total Income 9885 12385 25.29 16822 35.82

Total Expenditure (Excl. Prov.) 7337 9331 27.18 13052 39.89

Interest Spread 2650 4022 51.76 5163 28.35

Total Deposits 106056 131887 24.36 159593 21.01

Total Advances 72437 94571 30.56 112250 18.69

Total Business 178493 226458 26.87 271843 20.04

Gross Investments 38680 43545 12.58 54770 25.78

Performance Highlights

- Total Business of the Bank increased to Rs 2, 71,843 Crore as against Rs 2, 26,458 Crore in previous year showing a YOY growth of 20.04 %.

- Operating Profit surged to Rs 3770 Crore as against Rs 3055 Crore last year showing a YOY growth of 23.42%.

- Net Profit rose to Rs 1867 Crore during the Financial Year ending 31.03.2012 as against Rs 1423 Crore last year showing a YOY Growth of 31.18 %

- Net Interest Margin (NIM) increased to 3.48 % during the Financial Year ending March, 2012 as against 3.38% last year.

- Deposits of the Bank went up to Rs 1,59,593 Crore from Rs 1,31,887 Crore last year. Year-on-Year basis, Total Deposits grew by 21.01 %.

- Gross Credit surged to Rs 1,12,250 Crore from Rs 94,571 Crore last year. Year-on-Year basis, the Gross Credit increased by 18.69 %.

- Credit Deposit Ratio stood at 71% as at March, 2012.

- Retail Credit grew to Rs 15,114 Crore from Rs 13,029 Crore last year, constituting an increase of 16% during the financial year.

- Non-Fund Non Interest Income during the Financial Year ending March, 2012 stood at Rs 953 Crore as against Rs 857 Crore last year.

- Capital Adequacy Ratio stood at 12.83% as on 31.03.2012.

- Gross NPA to Gross Advances and Net NPA to Net Advances Ratios stood at 1.83% and 0.98% as at March, 2012 end respectively.

- Provision Coverage Ratio stood at 74%.

CAPITAL AND RESERVES

Due to preferential allotment of equity to LIC of India the paid- up capital of the Bank increased from Rs 476.22 Crore to Rs 500.03 Crore as on 31.3.2012. The reserves & surplus went up to Rs 10006.59 Crore as at end of this year from Rs 8031.17 Crore as on 31.03.2011.

Dividend

The Board of Directors of the Bank has recommended a dividend @ 60 % i.e. Rs 6 per equity share of Rs 10 each.

OFFICES & BRANCHES

The Bank is having 2516 domestic branches and one overseas branch at Hongkong. Out of 2516 domestic branches, 1033 are at Rural, 493 at Semi- urban, 517 at Urban and 473 at Metropolitan Centre. 101 new branches have been opened during the financial year 2011-12 out of which 40 are at Rural, 39 Semi Urban,9 Urban and 13 at Metro centers. 25 branches have been opened under FI Plan against target of 21. Further, 29 branches have been opened at Unbanked centers and 34 in Under Banked Districts of Under Banked States, fulfilling statutory requirements setup by RBI. Besides the above, 2 Field Inspection Offices, one Mobile branch & 4 satellite branches have been opened during the year. Bank has plans to open 250 new branches during the fiscal 2012-13.

DEPOSIT MOBILISATION

Total deposits of the Bank showed a significant growth of 21.01 % to Rs 1,59,593 Crore as on 31.03.2012. Low cost deposits grew by 10.22 % to Rs 48,668 Crore as on 31.03.2012, constituting 30.78% of aggregate deposits. Bank emphasized on low cost deposit mobilization and observed saving deposits & CASA deposits mobilization campaign during the year.

FINANCIALS

Parameters 31.03.10 31.03.11 31.03.12

Capital Adequacy Ratio (%) 13.62 12.96 12.83

Of which Tier I (%) 8.12 8.57 9.13

Tier II (%) 5.50 4.39 3.71

Spread to Average Working Fund (%) 2.54 3.12 3.24

Average Cost of Funds (%) 5.99 5.85 6.98

Average Yield on Funds (%) 8.68 9.19 10.48

Average Cost of Deposits (%) 5.97 5.83 7.07

Average Yield on Advances (%) 10.57 10.50 12.09

Earnings per Share (Rs) 27.01 31.85 39.18

Book Value per Share (Rs) 151.17 178.64 192.93

Return on Assets (%) 1.16 1.11 1.02

Return on Average Net Worth (%) 22.21 21.04 19.35

Provision Coverage Ratio (%) 78.95 75.67 74.00

Net NPAs (%) 0.66 0.79 0.98

Profit per Employee (Rs in lacs) 5.76 6.70 8.36

Productivity per Employee (Rs in lacs) 845 1063 1217

CREDIT DEPLOYMENT

Total advances of the Bank went up by 18.69% to Rs 1,12,250 Crore as on 31.03.2012. Credit-Deposit ratio (gross) stood at 71 % as against 72.18% last year. The Bank increased its market share in the system to 2.39 % from 2.23% during the period. The Benchmark Prime Lending Rate (BPLR) of the Bank was at 14.75 % on 31.03.2012. Yield on advances stood at 12.09 % during 2011-12 as against 10.50 % during 2010- 11 in line with the general market scenario.

NON-PERFORMING ASSETS (NPAs) MANAGEMENT

The Gross and Net NPA stood at Rs 2058.98 Crore and Rs 1091.70 as on 31.03.2012. The Gross & Net NPAs as percentage to gross advances & net advances was 1.83 % & 0.98% respectively. Though the Bank was able to recover fairly good amount, due to fresh addition of NPAs to the tune of Rs 2232.06 Crore, the outstanding NPA has increased. The provision coverage ratio stood at 74%.

SOCIAL BANKING

- Priority Sector Credit grew from Rs 30,764 Crore as on 31.03.2011 to Rs 37,396 Crore as on 31.03.2012, registering an absolute YOY growth of Rs 6633 Crore (21.56 %). Bank has exceeded the National Goal (40.00%) of PSC to ANBC by achieving 41.19 % as on Mar'12.

- Agriculture Credit increased from Rs 13,387 Crore as on March 2011 to Rs 16,590 Crore as on March 2012, registering an absolute YOY growth of Rs 3203 Crore (23.93%). Bank has exceeded the National Goal (18.00%) of Agriculture to ANBC by achieving 18.05% as on Mar'12.

- Direct Agriculture Credit increased from Rs 9808 Crore as on March 2011 to Rs 12304 Crore as on March 2012, registering an absolute YOY growth of Rs 2496 Crore (25.45%). Bank has exceeded the National Goal (13.50%) of Direct Agriculture to ANBC by achieving 13.55% as on Mar'12.

Bank's performance under Priority Sectors and Weaker Sections is presented below: (Rs in Crores)

Mar-10 Mar-11 Mar-12 GROWTH(YOY) Mar'12 over Mar'11 SUB-SECTOR AMT. AMT. AMT. AMT. %

Direct Agriculture 8339.81 9807.88 12304.38 2496.50 25.45

(% to ANBC)* 14.18 13.86 13.55

Indirect Agriculture 3227.60 3578.71 4285.43 706.72 19.74

(% to ANBC)* 4.50 5.06 4.50

Total Agriculture 11567.41 13386.59 16589.81 3203.22 23.93

(% to ANBC)* 18.68 18.92 18.05

Micro & Small Enterprise(MSE) 8187.84 11990.30 16182.28 4191.98 34.96

Total PSC 24279.35 30763.73 37396.43 6632.70 21.56

(% to ANBC)* 41.29 43.48 41.19

(Norm 40%)

Total MSME (MSE ME) 9770.71 14383.89 18446.35 4062.46 28.24

Weaker Section 6150.00 7547.00 9487.00 1940.00 25.71

(% to ANBC)* 10.46 10.67 10.45

Women Beneficiaries 2961.73 3582.45 4765.1 3 1182.68 33.01

(% to ANBC) 4.19 5.06 5.25

*ANBC March'2010 : Rs70760 crore

*ANBC March2011: Rs90782 crore

- MSME Sector Financing :

Credit to Micro and Small Enterprises (MSE) grew from Rs 11,990 Crore as on March 2011 to Rs 16,182 Crore as on March 2012, registering an absolute YOY growth of Rs 4192 Crore (34.96%). Credit to Micro, Small & Medium Enterprises (MSME) increased from Rs 14,383 crores to Rs 18,446 crores as on 31.03.2012, showing a YOY growth of 28.24%.

- Collateral Free Loans vis-a-vis Coverage under CGTMSE :

Bank has given much thrust on credit delivery to collateral free loans covered under CGTMSE. As on 31.03.2012, 35501 proposals have been covered under CGTMSE amounting to Rs 1348.63 Crores.

New Structured Products launched:

The Bank has launched following structured products under Priority Sector Credit:

- Scheme for providing Savings-cum-OD account to Non- Farm Sector (NFS) poor families living in Rural/ Urban areas,

- Scheme for extending produce loan to farmers against Warehouse Receipts under Tie-Up arrangement with Warehouse companies for providing Collateral Management Services in Tie-Up with National Bulk Handling Corporation,

- Weavers Credit Card Scheme,

- Akshay Krishi-Kisan Credit Card Scheme,

- Allahabad Bank Potato Growers Credit Card Scheme

- Bank's Exposure to Micro Finance Institutions(MFIs) 19 number of MFI accounts involving Rs 258.54 crores has been sanctioned by Bank. As on 31.03.2012, outstanding prevails at Rs 93.08 crores.

- State Level Bankers' Committee (SLBC)

The Bank as SLBC convenor, continued to give thrust for economic upliftment of State of Jharkhand. The Bank has been playing a lead role in the state to plan and open Bank branches in unbanked and underbanked areas on priority basis. Bank took necessary steps for implementation of special programmes of Government of India and Government of Jharkhand such as Bringing Green Revolution in Eastern India. As on 31.03.2012, all the 1541 villages with a population of over 2000 have been provided with banking facilities. As a leader, our bank provided banking facilities in 112 villages. A mobile banking van with ATM was also operationalised to cover 12 villages in the state to provide banking facilities. The bank also started one coin vending machine at Ranchi. The Bank conducted meetings of SLBC timely and the SLBC in the state has proved to be a strong forum to discuss and review banking initiatives for the development of the state.

- Lead Bank Scheme:

Under Lead Bank responsibilities in 17 districts, 13 in Uttar Pradesh, 2 in Jharkhand and one each in Madhya Pradesh and West Bengal, the Bank disbursed Rs 2174.35 crores against a target of Rs 2128.66 crores under District Credit Plan 2011-12 achieving 102.15% of the target

- Regional Rural Banks:

Government of India adopted "One State One RRB" for each sponsor Bank. Thus the number of Regional Rural Banks sponsored by our Bank now is two, one in Uttar Pradesh (Allahabad UP Gramin Bank, Banda) and another in Madhya Pradesh (Sharda Gramin Bank, Satna). These two RRBs continued to show their performance with a net profit of Rs 53.43 Crore (Target Rs 40.00 crores) during 2011-12. The accumulated profit stood at Rs 612.05 Crores in 2011-12 as against Rs 558.67 Crores during 2010-11. As per Government Guidelines, all the branches of both the RRBs were migrated successfully to CBS. The RRBs are providing NEFT/ RTGS facilities to its customers also.

- Financial Inclusion:

In accordance with the guidelines and observations of Govt. of India/ Reserve Bank of India, Bank prepared a comprehensive Financial Inclusion Plan with an outlay of Rs 215.82 Crore to provide banking services in unbanked rural as well as urban areas through BC Model, Banking Kiosks, Bio-metric ATMs and Mobile van fitted with ATM, ultra small branches etc.

The Bank has covered the 2618 villages allotted to it with population of 2000 and above and 15549 villages with population less than 2000.In addition to existing 5 Brick & Mortar Branches, Bank has opened another 25 Brick & Mortar Branches taking the total no. of B&M branch under Financial Inclusion to 30, exceeding the target of 26 branches during the FY 2011-12.

- CORPORATE SOCIAL RESPONSIBILITY

The Bank, as a responsible Corporate Citizen, has initiated several measures towards sustainable development of the society reflecting its concern for social welfare and developments, some of which are as under:

- Training Facilities to Farmers / Unemployed Youths through RSETI

The Bank has established five more Rural Self Employment Training Institutes (RSETI) this year for imparting training to Farmers, unemployed youths, NGOs, SHGs etc. for improvement of skills and entrepreneurship ability. Thus the Bank has at present 18 RSETIs. During the FY 2011-12, 262 programmes were conducted upto Feb, 12 and extended trainings to 8317 farmers / unemployed youths, out of which 3396 trainees were linked to Bank Credit.

- Financial Literacy and Credit Counseling Centres (FLCC) :

Financial Literacy and Credit Counseling Centres (FLCC) aims at strengthening financial inclusion initiatives by providing financial education and credit counseling. Our Bank is having 13 FLCCs at RBI identified (financially excluded) centers:

Three Mobile vans were launched at Dumka branch of Jharkhand State covering 12 villages, Kasraila branch of Sitapur, U.P. covering 4 villages and Khaira Branch in New Delhi, covering 6 villages.

- INTERNATIONAL BANKING

The Bank carries out its International business in India through its 54 authorised/ designated branches, which includes 5 International branches & through its overseas branch at Hong Kong. Export credit of the Bank as on 31.03.2012 stood at Rs 2,808.61 crore. The bank is taking all steps to increase the credit flow to exporters. The Bank maintains correspondent relationship with prime banks abroad and has 'Standard Settlement Instructions' in various currencies with 15 foreign banks.

- Overseas Presence

Bank is having one overseas branch at Hong Kong.

The Business of Hong Kong branch has increased from Rs 3,284 crore as on 31.03.2011 to Rs 5,327 crore as on 31.03.2012. The Hong Kong branch has earned a net profit of Rs 48.10 crore in 2011-12 as against Rs 19.01 crore in 2010-11. The Bank is also having a Representative Office at Shenzhen, China and in terms of regulatory guidelines, Bank has applied to Reserve Bank of India for opening of a full fledged branch in China. Bank has taken up with the regulators regarding opening of overseas branches at Dhaka, Shanghai, Singapore & Kowloon (Hong Kong).

- RETAIL CREDIT

The Bank has always been keen on exploring novel avenues to excel in Retail Credit business. A mosaic of Retail Credit Products caters to the personal, consumer and business needs of various sections of the society. The Bank has centralized various processes from mobilization to disbursement of Retail loans, by opening Centralized Retail Banking Boutiques (CRBBs) at important centers across the country.

The Bank added 7 new CRBBs to the existing network of 27 CRBBs & 61 Retail Banking Boutiques (RBBs) spread across the country. Outstanding under Retail Credit as on 31.03.2012 stood at Rs 15114.00 Crore that is 13.41% of the Gross Credit Outstanding exhibits an increase of 16.00 % during the year. During the fiscal 2011-12 Bank launched two new Retail Finance Schemes, i.e. "ALLBANK AASHIANA" under Housing Loan segment & "PENSIONERS" PERSONAL LOAN" to meet the changing requirement patterns of the senior citizens.

Bank entered into tie-up with the leading Automobile manufacturer M/s Tata Motors Ltd. for financing their vehicles in addition to the various Automobile manufacturers, Scheme of 1% interest subvention on housing loans up to Rs 15 Lac announced by Finance Minister is being implemented by the Bank.

Fee Based Income:

Performance under overall fee based income of the Bank as on 31.03.12 stood at Rs 953 crore as against Rs 857 crore as on 31.03.11 registering a growth rate of 11.20%

MOU entered with the Government by the Bank

The Bank has signed MOU with Government of India under fee based income to achieve 7% of total income for FY 2011- 12(achievement 5.71%); 10% of the total income for FY 2012- 13; 15% of Total Income for FY 2013-14 and 20% of total in- come for FY 2014-15.

GOVERNMENT ACCOUNTS DEPARTMENT

Processing of Central Government Pensions viz. Central Civil, Defence, Railways & Telecom of all the Zones centralized at CPPC, Lucknow since April 2011.CPPC, Lucknow is authorized by the Central Pension Accounting Office with effect from 01.11.2011.

Collection of Commercial Taxes of Government of West Ben- gal, Orissa & Jharkhand through the e-payment mode commenced from 06.07.2011, 15.09.2011 & 19.01.2012 respectively.PPF Remittances automated with effect from 02.07.2011.

225 Branches additionally authorized as Points of Presence- Service Providers (POP-SPs) by PFRDA for NPS.

BUSINESS PROCESS RE-ENGINEERING (BPR)

Improvement in Productivity, Efficiency & Profitability with introduction of technology enabled products for rendering convenient and attractive services to customers continued to re- main the prime focus of the Bank. Centralized Processing Centre had been established for Back Office activities like Clearing Process and Pension Processing. Other activities of the branches like Account Opening, Signature Scanning; Issuance of personalized Cheque Books etc. has been shifted to Back Office Processing Centre at Lucknow.

Information Technology:

- All 2516 branches and 81 offices are covered under the ambit of CBS. All the 567 branches & 4 extension counters of Gramin Banks sponsored by us have been migrated to CBS as on 24.09.2011

- Total no of ATMs has been increased to 316

- Bank has issued more than 12.78 lacs ATM cum Debit card to its customers

- As part of green initiative high definition video conferencing system implemented at 59 identified locations across the country in order to have seamless communication

- Mobile banking facility for the customers launched on 24th April 2011.

- Bank has extended internet banking facility to corporate customers also, the facility has been made available in current, cash credit & overdraft accounts also with certain terms & conditions.

Customer Service

The Bank's "Customer Service Committee of the Board" is committed towards excellence in customer service. The suggestions of the Committee on Procedures and Performance Audit on Public Services (CPPAPS), constituted by Reserve Bank of India, are accorded top priority for implementation in the Bank. The Bank is making constant endeavor to strive for and achieve an ideal situation of complaint free environment. An online complaint redressal mechanism has been introduced.

Know Your Customer & Anti Money Launderings

The Bank has adopted the comprehensive policy guidelines on Know Your Customer/Anti Money Laundering Norms in consonance with the Reserve Bank of India directives. The guidelines for submission of mandatory returns viz., Cash Transaction Reports (CTRs), Suspicious Transaction Re- ports (STRs) and Counterfeit Currency Reports as per the provisions of the PLMA, 2002 have been issued from time-to- time and all branches/offices have been sensitized on sub- mission of these return within the prescribed time limit.

INSPECTION AND AUDIT

Bank has switched over to Risk Based Internal Audit (RBIA) from 1st April 2010. Under this system the audit plan is pre- pared with reference to the Risk Profile of the branch and audit resources are directed towards high risk areas.

An Off-Site Monitoring Cell has been established during the year which undertakes continuous Monitoring of any major deviation / error in transactions by the branches during the previous day's operation & follows up with them for immediate corrective action. A fraud Risk Management Cell has been set up during March 2012 with the objective of better administration of Concurrent Audit Report findings. Further, the Bank has also appointed Consultant for implementation of Integrated Risk Management Solution (IRMS) towards Advanced Approach.

VIGILANCE

Bank has taken many new initiatives in the area of preventive & predictive vigilance in the recent years.

- Introduction of intranet-site on vigilance issues which display important guidelines and information on various issues of vigilance department.

- Bank has taken initiative to impart training to officers of CBI/ Police on various issues relating to Bank with the objective to help them understand intricate banking transactions/procedures and also to understand bank's viewpoints, concerns & priorities in the cases referred to them. One such training programme for the officers of CBI/ Police is scheduled to be organised in May, 2012.

- Bank has published 4 issues of quarterly News Magazine on Vigilance matters covering detailed information on variety of important issues relating to vigilance, especially concerning preventive vigilance matters.

- Department has taken initiative for organising workshops/ meetings on preventive vigilance issues at various zones wherein CVO deliberated on various burning vigilance issues, especially on modus operandi of recent frauds & default / deviation in observance of systems & procedures of the Bank.'

OFFICIAL LANGUAGE

Compliance of various provisions under the Official Language Policy was ensured in order to achieve the targets stipulated in the annual programme. Accordingly, statutory requirements in regard to bilingual issuance of documents under Section 3(3) of Official Language Act, reply of Hindi letters in Hindi, bilingual publication of manuals & codes, bilingualisation of stationery items was ensured. During the year a large number of officers and employees, not having working knowledge of Hindi, were nominated for various Hindi courses conducted by the Govt. of India. During the year, 187 Hindi Workshops (3159 Officers/Employees participated) and 75 Desk Training Programmes (669 Officers/Employees participated) were organized.

The Bank received several National level prizes for outstanding performance in the area of implementation of Official Language. Bank was awarded First Prize under prestigious "Indira Gandhi Rajbhasha Puraskar" for the year 2009-10 for excellent performance in the area of Official Language Implementation from Official Language Department, Ministry of Home affairs, Government of India. The Prize was received by our Chairman and Managing Director on 14th September, 2011 from Her Excellency, Smt. Pratibha Devisingh Patil, President of India in presence of Hon'ble Union Home Minister Shri P. Chidambaram and Hon'ble Union Home Minister of State Shri M. Ramchandran and Hon'ble Union Home Minister of State Shri Jitendra Singh.

Our Bank secured "First Position" in linguistic Region 'A' and "Third Position" in linguistic Region 'B' and 'C' respectively under "Reserve Bank Rajbhasha Shield Competition" for the year 2009-10. Our Executive Director Shri M. R. Nayak received the prizes from Shri D. Subbarao, Hon'ble Governor of Reserve Bank of India on 1st June, 2011 in a grand ceremony held at Central Office of the Reserve Bank of India.

Our Bank received 'Third Prize' for Bank's Bilingual House Magazine 'Triveni Dhara' for the year 2010-2011. The award was received by the Sri M.R. Nayak, Executive Director from

Shri D. Subbarao, Hon'ble Governor, Reserve Bank of India in the R.B.I. Prize Distribution ceremony.

Two participants of our Bank secured 'First' and 'Second' Position in linguistic groups 'A' and 'C' respectively in the All India Inter Bank Hindi Essay Writing Competition 2010-11 organized by the Reserve Bank of India.

Under the Town Official Language Implementation Committee prizes, Bank's Head Office received the "Shresthata Pramanpatra".

HUMAN RESOURCES DEVELOPMENT

In line with the Bank's established conviction that the Human resources are the greatest asset, our bank has been constantly responding to the changing needs of human capital and strengthening the existing man power with the infusion of new blood in the system from time to time in accordance with the strategic needs of the Bank. During the financial year 2011-12,1541 officers ,879 Single window operator-A in clerical cadre ,324 sub-staff have been inducted in the system. Further intake of 1600 Probationary officers and 225 specialist officers in lateral line during the year is in the pipeline. Bank has been giving paramount importance to the training and capacity building. Much emphasis was laid on e-learning and other alternate advanced channels of training during the year.

PUBLICITY ENDEVOURS

The bank has gone for nation-wide campaign on Television, Radio, and Newspapers/Magazines, hoardings etc. during the year 2011-12 for enhancing visibility and Image of the Bank. Bank has also made publicity for popularizing and marketing various products of the Bank.

SUBSIDIARY & JOINT VENTURE

All Bank Finance Ltd., a wholly owned subsidiary of Allahabad Bank, engaged in Corporate Advisory Services, Project Appraisal, Issue Management, Loan Syndication, Debenture and Trusteeship Underwriting, posted a profit of Rs 2.90 Crore during 2011-12.The Bank holds 27% equity stake in Asset Management Company "ASREC (India) Ltd" along with other Banks/ Institutions

The Bank holds 30% equity stake in joint venture company "Universal Sompo General Insurance Company Limited" for general insurance business along with Indian Overseas Bank, Karnataka Bank Ltd., Dabur Investment Ltd. and Japanese insurance major Sompo.

FUTUREPLANS

The Bank will focus on Retail Business, Loan Syndication, Sale of Gold Coins, CMS and Bancassurance etc in addition to other core banking activities.

The Bank is planning for overseas expansion.

BOARD OF DIRECTORS

The Board of Directors, the Management Committee and the Audit Committee of the Board met 16, 20 and 11 times respectively during 2011-12. The Director's Promotion Committee, Shareholders'/ Investors' Grievance Committee, IT Committee, Fraud Monitoring Committee, Customer Service Committee, Remuneration Committee, Risk Management Committee, Nomination Committee, Share transfer Committee, Share Issue & Allotment Committee met 4, 2, 5, 6, 4, 2, 4, 1, 21, and 2 times respectively during 2011-12.

The Govt. Nominee Director, Dr. Shashank Saksena joined the Board as Director from 15.11.2011. Dr. Saksena is working as Director, Department of Financial Services, Ministry of Finance, Govt. of India.

The RBI Nominee Director, Shri A Udgata joined the Board as Director from 13.10.2011. Shri Udgata is working as Chief General Manager (CGM), Urban Banks Department, at Central Office RBI Mumbai.

Dr. Sudip Chaudhuri rejoined the Board as Shareholders' Director from 10.02.2012. Dr. Chaudhuri has been serving Indian Institute of Management, Calcutta as Professor (Economics Group) since 1990.

Shri A .P. V. N. Sarma joined the Board as Shareholders' Director from 10.02.2012. Shri Sarma is a retired IAS officer and is having 36 years of experience in Public Administration and Industries.

Shri Ashok Vij joined the Board as Shareholders' Director from 10.02.2012. Shri Vij is a Chartered Accountant having 32 years experience in the areas of Financial & Management consultancy, Audit, Taxation and Business Advisory Services.

During the year Smt Sukriti Likhi, Shri S Ramaswamy, Shri P. V. Guddi Reddy, Shri D K Kapila, Dr. Shakeel-Ul-Zaman Ansari, Dr. V. B. Kaujalgi & Dr. Sudip Chadhuri retired from the Board of Directors after completion of their tenure.

ACKNOWLEDGEMENTS

The Board of Directors records its appreciation for continued support and patronage of the shareholders/investors of the Bank. The Board of Directors gratefully acknowledges the valuable and timely advice, guidance and support from the Reserve Bank of India, Government of India and other regulatory agencies and look forward to their continued support and co-operation. The Board of Directors is thankful to the customers for their continued trust and confidence on the Bank. The Board records its appreciation for valuable contributions of the outgoing members and welcomes the new incumbents. The Board of Directors is pleased to place on record their appreciation for the committed services of all the employees of the Bank.

For and on behalf of the Board of Directors,

Date : 5 May, 2012 (J.P.Dua)

Place : Kolkata Chairman & Managing Director

Mar 31, 2011

The Board of Directors has pleasure in presenting the Directors Report along with the audited Statement of Accounts of the Bank for the year ended 31st March 2011.

Dividend

The Board of Directors of the Bank has recommended a dividend @ 60 % i.e. Rs. 6 per equity share of Rs.10 each subject to approval by the Govt. of India.

FINANCIALS

Important ratios of the Bank are depicted below;

Parameters 31.3.09 31.3.10 31.3.11

Capital Adequacy Ratio (%) 13.11 13.62 12.96

Of which Tier I (%) 8.01 8.12 8.57

Tier II (%) 5.10 5.50 4.39

Spread to Average Working Fund (%) 2.54 2.54 3.31

Average Cost of Funds (%) 6.67 5.99 5.85

Average Yield on Funds (%) 9.62 8.68 9.19

Average Cost of Deposits (%) 6.62 5.97 5.83

Average Yield on Advances (%) 10.88 10.57 10.50

Earnings per Share (Rs.) 17.21 27.01 31.85

Book Value per Share (Rs.) 131.00 151.17 178.64

Return on Assets (%) 0.90 1.16 1.11

Return on Average Net Worth (%) 16.49 22.21 21.04

Provision Coverage Ratio (%) 76.45 78.95 75.67

Net NPAs (%) 0.72 0.66 0.79

Profit per Employee (Rs. in lacs) 3.76 5.76 6.70

Productivity per Employee (Rs. in lacs) 706 845 1063

OFFICES & BRANCHES

The Bank opened 129 new branches during 2010-11, taking total branches to 2416 as on 31.3.2011, with 993 rural, 454 semi-urban, 508 urban, 460 metropolitan branches and 1 foreign branch.

DEPOSIT MOBILISATION

Total deposits of the Bank showed a significant growth of 24.36 % to Rs. 131887 crores as on 31.3.2011. Low cost deposits grew by 20.69% to Rs.44156 crores as on 31.3.2011, constituting 33.70 % of aggregate deposits.

Bank emphasized on low cost deposits mobilization and observed saving deposits & CASA deposits mobilization campaign during the year. During the SB mobilization campaign (from 01.09.10-31.03.11), over 1.3 million new saving accounts were opened and saving deposit mobilized to the tune of Rs.2663.37 crores.

CREDIT DEPLOYMENT

Total advances of the Bank went up by 30.56% to Rs.94570 crores as on 31.3.2011. Credit-deposit ratio (gross) stood at 72.18 % as against 68.93% last year. The Bank increased its market share in the system to 2.23 % from 2.15% during the period. The Benchmark Prime Lending Rate (BPLR) of the Bank was at 13.75 % on 31.03.2011. Yield on advances stood at 10.50 % during 2010-11 as against 10.57 % during 2009-10 in line with the general market scenario.

NON-PERFORMING ASSETS (NPAs) MANAGEMENT

The Bank attached great importance on recovery of non- performing assets. The Bank has recovered Rs 929.16 cr from non performing assets including written off debts during 2010- 11 as against Rs 681.35 cr in 2009-10. The Gross & Net Non- performing assets of the Bank stood at Rs. 1647.92 crores & Rs. 736.37 crores as on 31.03.2011 The Gross & Net NPAs as percentage to gross advances & net advance was 1.74 % & 0.79 % respectively. The provision coverage ratio of the Bank stood at 75.67%

SOCIAL BANKING

Priority Sector Credit grew from Rs.24279 Crore as on 31.03.2010 to Rs.30764 Crore as on 31.03.2011, registering an absolute YOY growth of Rs. 6485 Crore (26.71 %). the Bank has exceeded the National Goal (40.00%) of PSC to ANBC by achieving 42.96 % as on Mar11.

. Agriculture Credit outstanding increased from Rs.11567 Crore as on March 2010 to Rs.13387 Crore as on March 2011. The Agricultural advance to Adjusted Net Banking Credit was 18.20% as on March 2011, thereby achieving the National goal of 18%.

. Direct Agriculture Credit outstanding increased from Rs.8340 Crore as on March 2010 to Rs. 9808 Crore as on March 2011. Bank has exceeded the National Goal (13.50%) of Direct Agriculture to ANBC by achieving 13.70% as on Mar11.

MSME Sector:

. The Bank was awarded 1st prize for outstanding work in MSME lending from Her Excellency Honble President of India Smt Pratibha Patil.

. Credit to Micro and Small Enterprises (MSE) grew from Rs. 8188 Crore as on March 2010 to Rs.11990 Crore as on March 2011, registering an absolute YOY growth of Rs.3802Crore (46.44%). Share of Micro Enterprises to

Micro & Small Enterprises has exceeded the National Goal (50%) by achieving 50.68% as on Mar11. Credit to Micro, Small & Medium Enterprises (MSME) increased from Rs.9771crores to Rs.14384 crores as on 31.03.2011, showing a YOY growth of 47.21%.

. Further the Bank has given thrust on credit delivery to collateral free loans covered under CGTMSE. As on 31.03.2011, 26092 proposals have been covered under CGTMSE amounting to Rs.896.80 crores and the Bank has emerged amongst best performing Banks in terms of number of proposals covered under CGTMSE during 2010-11

Table 1: Priority Sector Credit :

March 2010 March 2011

Sector / Schemes Amount Amount (Rs. crores) (Rs. crores)

Priority Sector Credit 24279 30764 Of Which

a) Agriculture 11567 13387

-Direct 8340 9808

- Indirect 3227 3579

b) Micro & Small Entp.(MSE) 8188 11990 Of Which

Micro Enterprises 5091 6077

Other PSC 4524 5387

2. Weaker Section. 6150 7547

Table 2: Ratios (in percentage)

March March Important Ratios National Goal 2010 2011

PSC to Adjusted Net Bank Credit (ANBC) 40 41.29 42.96

Agriculture Credit to Adjusted Net Bank Credit 18 18.68 18.20

Micro Enterprises to Total Micro & Small Entp. 50 62.25 50.68

Weaker Section Credit to Net Bank Credit 10 10.46 10.54

. New Products / Schemes launched:

The Bank has launched several structured products under Priority Sector Credit to promote agro-based industries and support trading of farm produce viz Scheme for Financing to Rice Shelling Units, Allbank Liquid Scheme for Artiyas (Commission Agents),Scheme for financing Doctors/Medical Practitioners for Clinics/Nursing Homes, Scheme for Construction of Godown under lease agreement with FCI/ Central Govt/ State Govt. Corporation /Agencies and Scheme for Seed Processing Units.

. Banks Exposure to Micro Finance Institutions (MFIs)

18 number of MFI accounts involving Rs.218.54 crores has been sanctioned by Bank. As on 31.03.2011, there is an outstanding of Rs.127.93 crores,

. State Level Bankers Committee (SLBC)

The Bank as SLBC convener, continued thrust on co- coordinating banking efforts for Economic upliftment of state of Jharkhand in association with other banks operating in the state and drew roadmap for providing banking facilities to 1541 villages having population over 2000. A mobile banking van with ATM was also operationalised to cover 12 villages in the state to provide banking facilities. The bank also started one coin vending machine at Ranchi. The Bank conducted meetings of SLBC from time to time and converted the SLBC into a strong forum to discuss and review banking initiatives for the development of the state.

. Lead Bank Scheme

Under Lead Bank responsibilities in 17 districts (13 in Uttar Pradesh, 2 in Jharkhand and one each in Madhya Pradesh and West Bengal) the Bank disbursed Rs.1605.53 crores under District Credit Plan 2010-11 achieving 93.31% of the target.

. Regional Rural Banks (RRBs)

The Bank-sponsored two RRBs, one in UP namely Allahabad UP Gramina Bank and the other in M.P. namely Sharada Gramina Bank. The two RRBs cumulatively disbursed Rs.1637.07 crores during 2010-11 under the Annual Credit Plan against a target of 1681.50 crores achieving 97.36% of target. The two RRBs continued to improve their performance with an aggregate profit of Rs.79.20 Crores during 2010-11. The accumulated profit stood at Rs 553.42 Crores in 2010-11 as against Rs.474.21 Crores during 2009-10.

. Financial Inclusion

Bank has been given the responsibility of 2618 villages having population of 2000 and above where banking services are to be provided by opening of banking outlet by March2012 under ICT enabled Financial Inclusion by adopting various models viz. Biometric Smart Card solution through Business Correspondents, Mobile Banking Van fitted with ATM, and opening of Brick & mortar branches. During the year the Bank had covered 1054 villages against a target of 1046 villages Transaction by Smart cards through HHD has commenced.

. CORPORATE SOCIAL RESPONSIBILITY

The Bank, as a responsible Corporate Citizen, has initiated several measures towards sustainable

development of the society reflecting its concern for social welfare and developments, some of which are as under.

. Financial Literacy And Credit Counselling Centres

In order to provide financial education and credit counselling to the people having limited resources and skills to appreciate the complexities of financial dealings, the Bank has so far opened two Financial Literacy and Credit Counselling Centres christened "Samadhan"- one at Kolkata (WB) and another at Banda (UP). Setting up of another 11 more FLCCs is in progress.

. Rural Self Employment Training Institute (RSETI)

Bank has so far established 11 Rural Self Employment Training Institute (RSETI) up to 31.03.2011 to impart training to the rural youths and Farmers for setting up of small business enterprises with hand holding and escort services. Bank has planned to establish another 10 RSETIs in rest of the lead district during 2011-12.

INTERNATIONAL BANKING

The Bank carries out its International business through its 56 authorised/designated branches, which includes 5 international branches. Export credit of the Bank as on 31.03.2011 stood at Rs.2911.23 crore. The bank is taking steps to increase the credit flow to exporters. Exporters meets are arranged at various centers

Overseas presence

. The Bank is having one overseas branch at Hong Kong, The business of the Hong Kong branch has increased from Rs 1128 cr as on 31.03.2010 to Rs3284 cr as on 31.03.2011. The Hong Kong branch has earned a profit of Rs 19.01 cr in 2010-11 as against a profit of Rs 12.63 cr during 2009-10

. The Bank is also having a Representative office at Shenzhen, China and in terms of regulatory guidelines; the Bank is eligible to open a full fledged branch. The Bank is exploring the possibilities of opening more overseas branches.

RETAIL CREDIT

In order to deliver outstanding service to our customer with focused attention in a specialized manner, the Bank has dedicated delivery channel for Retail Lending through its 27 CRBBs & 75 Retail Banking Boutiques (RBBs) across the country. Total outstanding under Retail Credit as on Mar 2011 stood at Rs. 13028.96 Crore as against Rs. 10082.14 Crore as on Mar2010. This shows an increase of 29.23 % during the year. Disbursement under Retail Credit during 2010-11 was Rs. 3868.63 Crore as against Rs.3148.97 Crore during 2009-10 registering a growth of 22.85 %. Online application of Retail Loans through INTERNET at 27 centers was introduced. Bank has finalized tie-up with a number of reputed Automobile manufacturers for financing their vehicles. Bank

has launched "Premium Housing Finance scheme for High Net worth Individuals (HNIs)"and"SARAL- 2" for the employees of the Organizations/Institutions, where the salaries are disbursed through Banks branches.

FEE BASED INCOME

The income from the Third Party Product (TPP) Business (Life, Non Life, Mutual Fund) grew by 12.07 % to reach at Rs 19.69 Crores during FY 2010-11 from Rs 17.57 Crores in the last FY. Banks corporate General Insurance partner Universal Sompo General Insurance Company has designed a special health insurance policy (Universal Sompos Sampoorna Swasthya Kavach) for the customers and the employees of the Bank. The policy is for the protection against spiraling medical cost and available for individuals & families.

RISK MANAGEMENT

The Bank has implemented Basel II norms for calculation of Capital Adequacy Ratio under Standardized Approach for Credit Risk, Modified Duration Approach for Market Risk and Basic Indicator Approach for operational Risk for the year 2010-11.

CUSTOMER SERVICE

The Banks "Customer Service Committee of the Board" is committed towards excellence in customer service. The suggestions of the Committee on Procedures and Performance Audit on Public Services (CPPAPS), constituted by Reserve Bank of India, are accorded top priority for implementation in the Bank. The Bank is making constant endeavour to strive for and achieve an ideal situation of complaint free environment.

KNOW YOUR CUSTOMER & ANTI MONEY LAUNDERINGS

The Bank has adopted the comprehensive policy guidelines on Know Your Customer/ Anti Money Laundering Norms in consonance with the Reserve Bank of India directives. The guidelines for submission of mandatory returns viz. Cash Transaction Reports (CTRs), Suspicious Transaction Reports (STRs) and Counterfeit Currency Reports as per the provisions of the PMLA, 2002 have been issued from time-to-time and all branches/offices have been sensitised on submission of these return within the prescribed time limit

INFORMATION TECHNOLOGY

. As on 31.03.2011, the Bank has implemented CBS in all its branches

. Online Retail Loan processing and sanction to the customers of the lead generating branches of CRBB has been made available in the intranet site.

. The Internet Website http://www.allahabadbank.in is available in 3 languages i.e. Hindi, English and vernacular language Bengali.

. The Internet banking for both the individuals and for corporate customers with RTGS/ NEFT fund transfer facilities has been started and is live since 01.01.2011.

. Mobile banking Van with ATM through CDMA VPN

connectivity with CBS network has been introduced at Dumka, Jharkhand,at Kasraila branch under Sitapur Zone and at Khaira branch in New Delhi Zone.

. Beta version of Mobile banking application deployed successfully in test region.

. In line with the directives of CBEC/RBI/IBA, EASIEST has been rolled out in entire India. Bank has 183 authorized branches, which are participating in the project. E-Payment facility for Indirect Taxes (CBEC- EASIEST) for Tax payers and this facility is available to the customers of all branches. This facility is also available through e-payment on Internet banking.

. The Bank has implemented Cheque Truncation System under NCR (National Capital Region) of Delhi. The implementation of CTS in Chennai grid is in progress.

. SMS Alerts is operational and on an average 31000 SMS Alerts are generated.

. RTGS / NEFT have been made live in 2372 branches.

. In arrangement with M/s UAE Exchange and Financial Services Ltd., Bank has launched two products namely X-press Money and Money Gram for making hassle free inward Remittances.

INSPECTION AND AUDIT

Bank has switched to on line Risk Based Internal Audit (RBIA) from 1st April 2010. Under this system the audit plan is prepared with reference to the Risk Profile of the branch and audit resources are directed towards high risk areas.

VIGILANCE

. Preventive Vigilance Committee has been formed at every branch & office of the bank. Bi-monthly Preventive Vigilance Committee Meetings are organized at all branches/offices.

. Banks Quarterly Newsletter on vigilance issues called ALL-ALERT is Introduced

. Initiative has been taken for formation of Off-site Monitoring System to screen high value suspected transactions.

. Preventive vigilance workshops at various zones all over India were conducted during the year.

OFFICIAL LANGUAGE

. Compliance of various provisions under the Official Language Policy was ensured viz bilingual issuance of documents under Section 3 (3) of Official Language Act, reply of Hindi letters in Hindi, bilingual publication of manuals & codes, bilingualisation of stationery items was ensured.

. Bank was awarded prestigious "Indira Gandhi Rajbhasha Puraskar" for the year 2008-09 for excellent

performance in the area of Official Language Implementation from Official Language Department, Ministry of Home Affairs, Government of India. The prize was received by our Chairman and Managing Director on 14th September, 2010 from His Excellency, Mohd. Hamid Ansari in presence of Honble Union Home Minister and Honble Union Home Ministers of State.

. Our Chairman and Managing Director received First Prize for Banks Bilingual House Magazine Triveni Dhara and Third Prize for official language implementation 2008-09 from Shri D. Subbarao, Honble Governor of Reserve Bank of India in the Prize Distribution Ceremony held on 26.05.2010 at the Central Office of R.B.I., Mumbai.

. Bank has secured "First Position" in linguistic region "A" and "Third Position" in linguistic regions "B" and "C" under "Resereve Bank Rajbhasha Shield Competition"for the year 2009-10.

. Bank has secured Third Position for our House Magazine Triveni Dhara under the Reserve Bank Bilingual House Magazine Competition 2009-10 among all the public sector banks and financial institutions.

. Two participants of our Bank secured First and Second position in linguistic groups A and B respectively in the All India Inter Bank Hindi Essay Competition 2009-10 organised by Reserve Bank of India.

. Under the Town Official Language Implementation Committee prizes, Banks Head Office received the "Rajbhasha Shield", Zonal Office, Dehradun received the First Prize, Zonal Office, Lucknow, Rajmahal Road Branch, Baroda and Staff Training Centre, Hyderabad received the "Second Prize" and Zonal Office Hyderabad received the Third Prize for excellent implementation of Official Language.

HUMAN RESOURCES DEVELOPMENT

. The Bank laid prime importance on developing human capital in tune with its quest to emerge as a bank of global stature. During 2010-11, the Bank undertook processes for recruitment of 1,117 Officers (including Specialist Officers) & 990 clerical cadre employees.

. Training and capacity building was given paramount importance. Much emphasis was laid on e-learning and other alternate advanced channels of training/learning of the human capital during the year, in tune with the changing scenario.

PUBLICITY ENDEVOURS

. The bank has gone for nation-wide campaign on Television, Radio, and Newspapers/Magazines, hoardings etc. during the year 2010-11 for enhancing Banks image and brand visibility.

SUBSIDIARY & JOINT VENTURE

. All Bank Finance Ltd., a wholly owned subsidiary of Allahabad Bank, engaged in Corporate Advisory Services, Project Appraisal, Issue Management, Loan

Syndication Debenture and Trusteeship Underwriting, posted a profit of Rs. 2.80 crores during 2010-11.

. The Bank holds 27% equity stake in Asset Management Company "ASREC (India) Ltd" along with other Banks/ Institutions

. The Bank holds 30% equity stake in joint venture company "Universal Sompo General Insurance Company Limited" for general insurance business along with Indian Overseas Bank, Karnataka Bank Ltd., Dabur Investment Ltd. and Japanese insurance major Sompo.

FUTURE PLANS

. The Bank will focus on Retail Business, Loan Syndication, Sale of Gold Coins CMS and Bancassurance etc in addition to other core banking activities.

. The Bank is planning for overseas expansion.

BOARD OF DIRECTORS

. The Board of Directors, the Management Committee and the Audit Committee of the Board met 15, 22 and 9 times respectively during 2010-11. The Directors Promotion Committee, Shareholders/Investors Grievance Committee, IT Sub-Committee, Fraud Monitoring Committee, Customer Service Committee, Remuneration Committee, Risk Management Committee, Nomination Committee, Share transfer Committee, Share Allotment Committee and Flat Purchase Committee met 5, 1, 8, 7, 4, 1, 4, 1, 18, 1 and 2 times respectively during 2010-11.

. The RBI Nominee Director, Shri Ramaswamy joined the Board as Director from 30.07.2010. Shri Ramaswamy is working as Chief General Manager (CGM), Expenditure & Budgetary control, at Central Office RBI Mumbai.

. Shri Sudip Chaudhuri joined the Board as Shareholders Director from 03.06.2010. Shri Chaudhuri has been serving Indian Institute of Management, Calcutta as Professor (Economics Group) since 1990.

. Shri R.M.Chaturvedi joined the Board as Government Nominee Director under Chartered Accountant category wef 14.07.2010 for a period of 3 years. Shri Chaturvedi is a Chartered Accountant and is having 26 years of experience.

. Shri Gour Das joined the Bank as workmen Employee Director wef 16.08.2010 for a period of 3 years. Shri Gour Das is a Commerce Graduate and is having 38 years of banking experience.

. During the year Shri Mohammad Tahir, Shri K. K. Dogra & Smt. Joginder Kaur retired from the Board of Directors after completion of their tenure.

ACKNOWLEDGEMENTS

The Board of Directors records its appreciation for continued support and patronage of the shareholders/investors of the Bank. The Board of Directors gratefully acknowledges the valuable and timely advice, guidance and support from the Reserve Bank of India, Government of India and other regulatory agencies and look forward to their continued support and co-operation. The Board of Directors is thankful to the customers for their continued trust and confidence on the Bank.

The Board records its appreciation for valuable contributions of the outgoing members and welcomes the new incumbents.

The Board of Directors is pleased to place on record their appreciation of the committed services of the Banks employees.

For and on behalf of the Board of Directors,

(J. P. Dua) Chairman & Managing Director

Date : 02.05.2011 Place : Kolkata

Mar 31, 2010

PERFORMANCE OF ALLAHABAD BANK OPERATING RESULTS

BankÃs performance in key business parameters is presented below.

(Rs. in crores)

Parameter MarÃ08 MarÃ09 Growth (%) MarÃ10 Growth (%)

Net Profit 974.74 768.60 -21.15 1206.33 56.95

Operating Profit 1479.51 1901.15 28.50 2548.55 34.05

Operating Profit Ex. Trading Profit 1008.48 1328.45 31.73 1972.00 48.44

Provisions & Contingencies 504.77 1132.55 124.37 1342.22 18.51

Total Income 7135.97 8506.65 19.21 9885.10 16.20

Total Expenditure (Excl. Prov.) 5656.46 6605.50 16.78 7336.55 11.07

Interest Spread 1672.34 2158.67 29.08 2650.48 22.78

Total Deposits 71616.38 84971.79 18.65 106055.75 24.81

Total Advances 50312.16 59443.40 18.15 72437.31 21.86

Total Business 121928.54 144415.19 18.44 178493.06 23.60

Gross Investments 23722.28 30081.35 26.81 38680.43 28.59

CAPITAL AND RESERVES

The paid-up capital of the Bank remained at Rs.446.70 crores as on 31.3.2010. The reserves & surplus went up to Rs.6306.25 crores as at end of this year from Rs.5405.25 crores as on 31.03.2009.

PROFITABILITY

Operating Profit

The Operating Profit of the Bank grew by 34.05% to Rs.2548.55 crores during 2009-10 from Rs.1901.15 crores during the preceding year. During 2008-09, the growth in operating profit was to the tune of 28.50%.

Net Profit

The net profit of the Bank grew by 56.95% to Rs.1206.33 crores during 2009-10 from Rs.768.60 crores during the preceding year. Higher profitability of the Bank may be attributed to increased volume of interest income from advances, enhanced fee-based income, reduction in cost of fund due to larger share of low cost deposits and refraining from bulk deposits and better recovery in written off accounts.

Dividend

The Board of Directors of the Bank has recommended a dividend @ 55% i.e. Rs.5.50 per equity share of Rs.10 each.

Voluntary Delisting of Equity Share from The Calcutta Stock Exchange Limited (CSE)

In terms of approval granted by shareholders in the last Annual General Meeting, the equity share of the Bank got delisted from the CSE with effect from 09.03.2010.

FINANCIALS

Important ratios of the Bank are depicted below;

Parameters 31.3.08 31.3.09 31.3.10

Capital Adequacy Ratio (%) 11.99 13.11 13.62

Of which / Tier I (%) 7.71 8.01 8.12

II (%) / Tier II (%) 4.28 5.10 5.50

Spread to Average Working Fund (%) 2.26 2.54 2.54

Average Cost of Funds (%) 6.66 6.67 5.99

Average Yield on Funds (%) 9.26 9.62 8.68

Average Cost of Deposits (%) 6.67 6.62 5.97

Average Yield on Advances (%) 10.76 10.88 10.57

Earnings per Share (Rs.) 21.82 17.21 27.01

Book Value per Share (Rs.) 116.88 131.00 151.17

Return on Assets (%) 1.32 0.90 1.16

Return on Average Net Worth (%) 24.56 16.49 22.21

Provision Coverage Ratio (%) 75.62 76.45 78.95

Net NPAs (%) 0.80 0.72 0.66

Profit per Employee (Rs. in lacs) 4.85 3.76 5.76

Productivity per Employee (Rs. in lacs) 604 706 845

OFFICES & BRANCHES

The Bank opened 27 new branches during 2009-10, taking total branches to 2287 as on 31.3.2010, with 976 rural, 411 semi-urban, 472 urban, 427 metropolitan branches and 1 foreign branch. The specialized branches, numbering 76, including 7 Industrial Finance Branches, 5 International Branches, 1 Industrial Finance-cum-International Branch, 1 NRI Branch, 2 Specialized Personal Banking Branches, 18 SME Finance Branches, 7 Recovery Branches, 1 CMS Hub, 1 Specialized Savings Bank Branch, 2 Trading Finance Branches, 1 Specialized Commercial Agricultural Finance Branch, 4 Agriculture Finance Branches, 2 Agriculture

Development Branch, 3 Regional Processing Centres, 1 Forex- cum-Treasury Management Branch and 20 Service Branches. Extension Counters numbered 66 as on 31.3.2010. The Bank constituted two more zonal offices- Berhampore & Bhagalpur for effective management. Moreover, one of the zonal offices was shifted from Jhansi to Agra.

DEPOSIT MOBILISATION

Total deposits of the Bank showed a significant growth of 24.81% to Rs.106056 crores as on 31.3.2010. Low cost deposits grew by 24.45 % to Rs.36587 crores as on 31.3.2010, constituting 34.82 % of aggregate deposits as compared to 35.08% a year ago. Cost of deposits decreased to 5.97 % from 6.62% during the period.

In line with the directions from Ministry of Finance, the Bank emphasized on low cost deposits mobilization and observed saving deposits & current deposits mobilization campaign during the year. During the SB mobilisation campaign (from 17.08.09-31.12.09), over 10 million new saving accounts were opened and saving deposit mobilized to the tune of Rs.424.86 crores. During the Current Deposit Mobilisation campaign (from 01.01.10-31.03.10), Current deposits of Rs.322.49 crores were mobilized in 20,393 accounts.

CREDIT DEPLOYMENT

Total advances of the Bank went up by 21.86% to Rs.72,437 crores as on 31.3.2010. Credit-deposit ratio (gross) stood at 68.93% as against 70.93% last year. The Bank increase its market shares in the system to 2.15% from 2.00% during the period. The Benchmark Prime Lending Rate (BPLR) of the Bank was at 12.00%. Yield on advances stood at 10.57 % during 2009-10 as against 10.88% during 2008-09 in line with the general market scenario.

NON-PERFORMING ASSETS (NPAs) MANAGEMENT

The Bank continued its emphatic thrust on recovery of non- performing assets. The thrust areas included, among others;

ÃÂ¼ Arrest of Fresh addition of NPAs by ensuring close monitoring and other control measures,

ÃÂ¼ Reduction in NPA through invocation of SARFAESI Act and application of other legal measures for logical conclusion,

ÃÂ¼ Increase in income from derecognised interest through recovery in written-off debt accounts,

ÃÂ¼ Strengthening credit risk management,

ÃÂ¼ Thrust on upgradation of fresh NPAs A/cs and accounts under restructuring/CDR,

ÃÂ¼ Settlement scheme for different segment of borrowers like; small & marginal farmers, Govt. sponsored loans, agricultural credit etc, ÃÂ¼ Recovery of small & cluster loans (including written off debts through settlement camps/recovery camps and Lokadalats), Gross Non-performing assets of the Bank increased to Rs.1221.80 crores as on 31.3.2010 from Rs.1078.25 crores as on 31.3.2009 while net non-performing assets increased to Rs.470.15 crores from Rs.422.11 crores during the period. The gross NPAs as percentage to gross advances declined to 1.69% from 1.81%. The ratio of net NPAs to net advances reduced to 0.66% from 0.72%. The provision coverage ratio of the Bank stood at 78.95% as compared to 76.45% while the slippage ratio increased to 1.98% from 1.72% during the period.

Asset Recovery Management Branches:

The Bank has reconstituted the erstwhile Recovery Branches as Asset Recovery Management Branches (ARMBs) in terms of policy approved. According to the newly laid down policy, three of the existing Recovery Branch Kolkata, Mumbai & New Delhi have started functioning. The fourth one is opened recently at Lucknow. The ARMBs at Chennai, Allahabad, & Patna are to be opened recently. These ARMBs are to deal with in all NPA cases of Rs 10.00 lacs & above including non- suit filed accounts.

SOCIAL BANKING:

BankÃs performance under Priority Sectors and Weaker Sections is presented below:

Ã Priority Sector Credit grew from Rs.20435 Crore as on 31.03.2009 to Rs.24279 Crore as on 31.03.2010, registering an absolute YOY growth of Rs.3844 Crore (18.81 %). Bank has exceeded the National Goal (40.00%) of PSC to ANBC by achieving 41.29% as on MarÃ10.

Ã Agriculture Credit outstanding increased from Rs.9568 Crore as on March 2009 to Rs.11567 Crore as on March 2010, registering an absolute YOY growth of Rs.1999 Crore (20.90%). Bank has exceeded the National Goal (18.00%) of Agriculture to ANBC by achieving 18.68% as on MarÃ10.

Ã Fresh Credit Disbursal in Agriculture Loans reached Rs.3615 Crore during the current year 2009-2010.

Ã Kisan Credit Cards ( KCC ) :

The Bank issued 2.23 lacs Kisan Credit Cards involving a credit amount of Rs. 1335.97 crores during 2009-10. The cumulative KCC numbered 9.12.lacs with a credit line of Rs4847.62crores as on 31.03.2010.

Ã Kisan Shakti Yojana ( KSY) :

The Bank extended credit facility to farmers under KSY to 1143 Kisan Credit Card holders involving a credit limit of Rs. 26.29 Crores during 2009-10. Cumulative number of Kisan Credit card holders financed under KSY scheme was 147935 involving Rs. 1962.38 Crores as on 31.03.2010.

Table 1: Priority Sector Credit

Sector/Schemes March 2009 March 2010

Number of Amount Number of Amount Accounts (Rs. crores) Accounts (Rs. crores) (in lacs) (in lacs)

1. Priority Sector Credit 15.02 20435 18.16 24279 Of Which

a) Agriculture 10.43 9568 12.76 11567

Direct 10.21 7306 12.47 8340

Indirect 0.22 2262 0.29 3227

b) Micro & Small Entp.(MSE 1.80 4593 3.52 8188 Of Which

Micro Enterprises 1.65 2768 3.01 5091

Other PSC 2.85 6275 1.88 4524

2. Weaker Section. 9.25 5010 10.75 6150

Table 2: Ratios (in percentage)

Important Ratios March March National Goal 2009 2010

PSC to Adjusted Net Bank Credit (ANBC) 40 41.10 41.29

Agriculture Credit to Adjusted Net Bank Credit 18 19.20 18.68

Micro Enterprises to Total Micro & Small Entp. 60 60.26 62.25

Weaker Section Credit to Net Bank Credit 10 10.07 10.46

Ã MSME Sector Financing:

Credit to Micro and Small Enterprises (MSE) grew from Rs. 4593 Crore as on March 2009 to Rs.8188 Crore as on March 2010, registering an absolute YOY growth of Rs.3595 Crore (78.27%). Share of Micro Enterprises to total Micro & Small Enterprises has exceeded the Na- tional Goal (60%) by achieving 62.25% as on MarÃ10. Credit to Micro, Small & Medium Enterprises (MSME) increased to Rs.9770.71crores as on 31.03.2010, show- ing a growth of 77.39% during 2009-10.

Ã New Products / Schemes launched:

The Bank launched two new schemes under Priority Sec- tor Credit to promote agro-based industries and support trading of farm produce.

(a) Scheme for Financing to Rice Shelling Units to meet the credit requirement of Rice Shelling Entrepreneurs.

(b) Allbank Liquid Scheme for Artiyas (Commission Agents) to meet the credit requirement of Artiyas for on lending to Farmers.

Ã State Level BankersÃ Committee (SLBC)

The Bank as SLBC convenor, continued to thrust in co-

ordinating banking efforts for economic upliftment of State of Jharkhand. The Bank has been playing a lead role in organiz- ing banks operating in the state to plan and open Bank branches in unbanked and underbanked areas on priority basis. Bank took necessary steps for implementation of spe- cial package for Drought Relief announced by the Govern- ment of Jharkhand. Under the directions of Government of India/Reserve Bank of India, our Bank, as SLBC convenor, in association with other banks operating in the state, drew roadmap for providing banking facilities to all villages having population over 2000. The Bank conducted meetings of SLBC timely and the SLBC in the state has proved to be a strong forum to discuss and review banking initiatives for the devel- opment of the state.

Ã Lead Bank Scheme:

Under Lead Bank responsibilities in 17 districts, 13 in Uttar Pradesh, 2 in Jharkhand and one each in Madhya Pradesh and West Bengal, the Bank disbursed Rs.1511.58 crores un- der District Credit Plan 2009-10 achieving 98.24% of the tar- get.

Ã Regional Rural Banks:

Government of India adopted ÃOne State One RRBÃ for each sponsor Bank. In pursuance to the above policy our two Spon- sored RRBs in Uttar Pradesh were amalgamated into one large size and strong RRB, Allahabad UP Gramin Bank, having 480 branches spread over 11 districts in Uttar Pradesh.

Thus the number of Regional Rural Banks sponsored by our Bank now remain two, one in Uttar Pradesh and another in Madhya Pradesh. These two RRBs continued to improve their performance with an aggregate profit of Rs.77.9 Crores during 2009-10 as against Rs. 47.66 Crores during 2008-09. The accumulated profit stood at. Rs 456.04 Crores in 2009- 10 as against Rs.386.62 Crores during 2008-09.

The Bank-sponsored RRBs disbursed Rs.1308.67 crores dur- ing 2009-10 under the Annual Credit Plan as against Rs.1033.02 Crores in 2008-09 achieving 101.44%.

Ã Agriculture Debt Waiver & Debt Relief Scheme, 2008(ADWDR)

A scheme in the name of Agriculture Debt Waiver & Debt Re- lief Scheme 2008 was launched by the Government of India on 23.05.2008. The scheme provided waiver of agriculture loans of small and marginal farmers having land holding upto 5 acres for overdue loan amount as on 31.12.2007 and re- maining unpaid upto 29.02.2008. The scheme also provided relief for farmers having land more than 5 acres upto an ex- tent of 25% of overdue loan amount as on 31.12.2007 and remaining unpaid upto 29.02.2008 on the condition that eli- gible farmers pay 75% of the overdue amount by 30.06.2010.

The audited claim of the Bank for debt waiver is Rs.1041.80Crores, of which Rs.673.90 Crores has so far been reimbursed by the Reserve Bank of India. The claim of debt relief will be submitted after JuneÃ2010.

Ã Providing Short Term Production Credit to Farmers upto Rs.3lacs. at 7% p.a. interest.

Government of India is providing interest subvention of 2% to Public Sector Banks in respect of short term production credit upto Rs.3lacs provided to farmers on the condition that such short term credit is provided at 7% p.a. at ground level. In addition Govt. is providing additional interest subvention of those prompt paying farmers who pay their short term produc- tion credit within one year of disbursement of such loans. The Bank is implementing the scheme. During 2009-10 Bank has claimed and availed of interest subvention of Rs.22.36 Crores.

Corporate Social Responsibility

The Bank, as a responsible corporate citizen, has initiated the following measures towards sustainable development of the society reflecting its concern for human rights and environ- ment.

Ã Financial Inclusion:

Bank has achieved 100% Financial Inclusion in Nine Lead Districts of the Bank in the State of Uttar Pradesh and Jharkhand. The Bank has taken steps for achieving greater financial inclusion through implementation of ICT Enabled Fi- nancial Inclusion by adopting Biometric Smart Card solution through Business Correspondents. As per directions of Re- serve Bank of India, our Bank has submitted ÃFinancial In- clusion PlanÃ for providing Banking facilities to all Villages having a population over 2000. The Bank has decided to bring 1000 unbanked villages in the fold of banking services during 2009-10.

Ã Financial Literacy and Credit Counselling Centres

In order to provide financial education on one hand and to offer credit counselling on the other to people having limited resources and skills to appreciate the complexities of finan- cial dealings, the Bank has opened Financial Literacy and Credit Counselling Centres christened Samadhan at Kolkata and Banda (UP).

The Centres act independently on its own under the auspices of Allahabad Bank Rural Development Trust.

The Centers are nonprofit organizations established with a view to rendering assistance in the form of advice to all those who are in need of advice on financial management even though they do not have any financial dealings with Allahabad Bank. The services offered by the counsellors are on one to one basis.

Ã Training Facilities to Farmers / Unemployed Youths:

The Bank has established two more Rural Self Employment Training Institutes (RSETI) this year for imparting training to Farmers, unemployed youths, NGOs, SHGs etc. for improve- ment of skills and entrepreneurship ability. Thus the Bank has at present six RSETIs in the following centres :

1. Rae Bareilly, U.P. 2. Hazaribagh, Jharkhand

3. Bolpur, W.B. 4. Debra, W.B.

5. Dumka, Jharkhand 6. Banda(U. P.)

The target groups for training interventions are: Small/Marginal/Tenant Farmers/Landless Labourers Medium & Large Farmers First Generation Entrepreneurs Established Entrepreneurs

Up to 31.03.2010, 636 programmes were conducted and ex- tended trainings to 17077 farmers / unemployed youths , out of which 7376 trainees were credit linked involving an amount of Rs.49.29 Crores.

Ã Welfare of Wild Animal

As a part of its CSR activities, the Bank has initiated adoption of wild animals at ÃVan ViharÃ Bhopal showing its love for wild animals. The Bank has adopted following animals for one year commencing from 1st April, 2010.

1. Tigress Ã ÃBASANIÃ

2. Leopard Ã ÃAGNIÃ

3. Sloth Bear Ã ÃKAMALÃ

Retail Credit

The Bank has emphasized to augment the loans under vari- ous retail loan schemes to cater to the personal, consumer & business needs of all sections of the society. The Bank has 126 Retail Banking Botiques (RRBs) all over the country. Again the Bank has opened 27 Central Retail Banking Botiques (CRBBs) to further the easy processing & disbursement of the of Retail loans with strong operational guidelines & efficient manpower.

Disbursement during the year 2009-10 was Rs. 3148.97 Crore as against Rs.1795.60 Crore during the last financial year reg- istering a growth of 75.37%. Total outstanding as on Mar- 2010 stood at Rs. 10082.14 Crore as against Rs. 8400.59 Crore as on MarÃ2009. This shows an increase of 20.02% during the year. The share of Retail credit having outstanding of Rs10082.14 Crore is 13.92% to Gross credit which is 72437 Crore.

Distribution of Retail Loans are as follows:

Scheme Outstanding % of Outstanding

HOUSING LOAN 3139.37 31.14%

PROPERTY 1590.14 15.77%

RENT 1228.02 12.18%

SARAL LOAN 1218.37 12.08%

EDUCATION 825.72 8.19%

ALL BK TRADE 638.07 6.33%

CAR LOAN 439.34 4.36%

Other 1003.11 9.95%

Total 10082.14 100.00%

Fee Based Income

The Bank has put a thrust towards promotion of third party products and other fee based activities. The income from TPP business grew by 39.88% to reach at Rs.17.57 crores during 2009-10 from Rs.12.56 crores last year.

Under Life Insurance and General Insurance segment of TPP business, Bank is having respective tie up with LICI and Universal Sompo General Insurance Company Ltd. (USGICL). Under Mutual Fund business, the Bank is having Tie up arrangements with countryÃs five leading Asset Management Companies viz. UTI, Principal PNB, Kotak Mahindra, Franklin Templeton & Reliance Mutual Fund for Providing wide range of products to its customers who intend to park their surplus fund in MFs. Under Cash Management Services (CMS), new avenues have emerged post migration to CBS and introduction of new Application Software (cash@will), the Bank has plans to fully exploit the situation with varied new CMS products. In order to augment income under CMS, Bank is focusing on Payment Products like DDF Drawing Dividend/ Interest Warrant and Direct Debit/ Direct Credit (Instrument and mandate based). Currently Bank is having six DPs and is in the process of expanding it at few more strategic locations. The Bank has launched retail selling of Gold Coins under ÃAllBank GoldÃ and sold as many as 36760 Gold Coins weighing 274.36 Kgs & booked an income of Rs.3.02 crore during 2009-10.

INVESTMENTS

Gross investments of the Bank were at Rs.38680 crores as on 31.3.2010 as against Rs.30081 crores as on 31.3.2009. The yield on investments declined to 6.83% during 2009-10 from 7.57% during 2008-09, in line with the market trend.

RISK MANAGEMENT

The Bank has implemented BASEL II norms and the calculation of Capital Adequacy Ratio (CRAR) for the year 2009-10 has been done as per the RBI prescription in this regard. In line with the RBI direction, the Bank has adopted Standardised Approach methodology for calculation of Risk weight under Credit Risk, Basic Indicator Approach for Operational risk and Standardised Approach-duration based approach for market risk. In line with the best practice in Industry, the Bank has set up a Comprehensive Risk Management Framework to effectively identify, measure and manage risk elements of Credit, Market and Operational Risks in an integrated and comprehensive manner. The Bank has evolved suitable Risk Management architecture comprising a Board Level Risk Management Committee. Further, towards preparedness for advance approach under BASEL II, the Bank is in the implementation process of a technology-based MIS system covering all the branches and offices.

Disclosures under BASEL - II norms is provided in a separate Annexure (Pg. No.54-81).

CUSTOMER SERVICE

The BankÃs ÃCustomer Service Committee of the BoardÃ is pivoted on the improvement in customer service. The suggestions of the Committee on Procedures and Performance Audit on Public Services (CPPAPS), constituted by Reserve

Bank of India, are accorded top priority for implementation in the Bank. Customer Service Audit, conducted at the branch level, receives immediate attention for rectification of irregularities, if any. The improvement in customer service is appraised to the Customer Service Committee of the Board of DirectorsÃ on quarterly basis. Besides, the Standing Committee on Customer Service has been reconstituted with the induction of three personalities of public eminence as non-executive members. The meeting of the committee are held on quarterly basis.The Bank lays emphasis on improving customer service par excellence to strive and achieve an ideal situation of complaint free environment. However, whenever the complaints are received, remedial measures are immediately taken to redress them. The complaints are categorized on the basis on the nature and gravity of the complaint by way of ABC analysis and it is ensured to redress these within the timeframe prescribed for the category. Besides, steps are taken as per suggestions of the Standing Committee on Customer Service towards grievance redressal and improvement of customer service.

Know Your Customer & Anti Money Laundering Measures

Bank has adopted the comprehensive policy guidelines on Know Your Customer/ Anti Money Laundering Norms in consonance with the Reserve Bank of India directives.The guidelines for submission of mandatory returns viz. Cash Transaction Reports (CTRs), Suspicious Transaction Reports (STRs) and Counterfeit Currency Reports as per the provisions of the PMLA, 2002 have been issued time-to-time and all branches/offices have been sensitized on submission of these return within the prescribed time limit. Bank continues to submit the monthly CTRs to Financial Intelligence Unit-India, Govt. of India. Adequate precautions are taken by the Bank while opening of accounts to protect the Bank from the risk of doing business with any individual or entity whose identity cannot be determined or refused to provide information, or who have provided information that contains significant inconsistencies which cannot be resolved after due investigation.

INFORMATION TECHNOLOGY Branch Computerisation

The Bank has achieved 100% computerisation as on 31.03.2010 by computerising all its 2287 branches (including Foreign Branch), 66 Extension counters and various Zonal/ Field Offices. The Bank has also computerised all its Currency Chests (41).

Centralized Banking Solution (CBS)

The Bank has been implementing CBS at a very rapid pace.

969 branches/offices CBS covering 81.68% of BankÃs business.

The CBS Project Office has been established at Vashi, Navi Mumbai for monitoring the project.

Data centre has been set up at DAKC, Navi Mumbai.

Disaster Recovery Site (DRS) has been built at Lucknow.

Help Desk has been set up at CBS Project Office for assisting the CBS branches and trouble shooting for daily operations.

Internet Banking

Internet Banking, Mobile Banking, SMS Banking and e-Payment facilities for customers of CBS branches are fully operational. The customers of CBS branches can avail the facility of Internet Banking and e-payment facility through BankÃs Internet Banking website https://www.allahabadbank.in. Online fund transfer through RTGS/NEFT provided to our Internet Banking Customers.

Automated Teller Machines (ATMs)

Instant debit card facility to the customers has started during the year. The Bank has installed 211 ATMs and added 892 branches on its network. In order to broaden the customer base and facilitate wider service coverage, Bank has joined National Financial Switch(NFS), a project by M/S IDRBT Hyderabad, an institute set up by RBI, for sharing ATM network across 28 member Banks. Our Bank customers can access all VISA & NFS ATM across the country for all sorts of transaction without any charges from 01.12.2008.

The Bank is also having principal membership of VISA for issue of ATM-cum-Debit card and has issued more than 6.46 lacs ATM-cum-Debit cards including 81 thousand Instant ATM cards to customers.

Electronic Payment/Settlement System

896 branches of the Bank are participating in RBI sponsored RTGS transactions. SFMS application required for doing the RTGS inter branch transactions has been implemented in 896 branches. The Disaster Recovery Site for RTGS has been set up at DIT, Head Office, Kolkata. Server for NDS/PDO is also operational. NEFT has been made live in 897 branches.

Electronic Accounting in Excise and Service Tax (EASIEST) for Indirect Taxes

The Bank has made all of its 183 authorised branches enabled for participating in Electronic Accounting in Excise and Service Tax(EASIEST). e-Payment facility for Indirect Taxes (CBEC- EASIEST) has been launched for Tax payers.

Online Tax Accounting System(OLTAS) for Direct Taxes

The Bank has made all its 167 designated branches enabled for participating in OLTAS system. e-Payment facility for Direct Taxes(CBDT-OLTAS) has been launched for Tax payers.

Networking

39 NAPs (Network Aggregation Points) for CBS has been set up across the country.

Corporate mail messaging system LOTUS DOMINO is in the process of implementation.

271 VSATs (both offsite & onsite) has been set up for ATM connectivity.

Bank has launched its Tri-lingual website (www.allahabadbank.in) with the introduction of Vernacular language Bengali along with Hindi & English.

The Internet Server has been shifted from USA to India and was set up at Pune.

Video Conferencing

Video Conferencing System has been installed at the following 21 locations facilitating Executives in holding meetings, group discussions, conducting training programmes etc. for officers/ employees of the Bank.

SL Location No

1 Head Office

2 STC Kolkata

3 STC Lucknow

4 IRT Panchkula

5 ZO Mumbai

6 ZO Kolkata Metro

7 ZO New Delhi

8 ZO Chennai

9 ZO Lucknow

10 ZO Ranchi

11 ZO Ahmedabad

12 ZO Chandigarh

13 ZO Ludhiana

14 Treasury Branch, Mumbai

15 CBS Project Office

16 ZO Hyderabad

17 STC Hyderabad

18 FGMO Bengal

19 STC Bhubaneshwar

20 STC Patna

21 FGMO Kanpur

12 CHEQUE TRUNCATION

Ã The Bank has already initiated the process of implemen- tation of Cheque truncation system under National Capital Region (NCR) of Delhi as per RBI requirement. M/s NCR Crop. India Pvt. Ltd. Mumbai was selected as vendor.

Ã Branches are participating in live operation of RBI CTS system from service Branch New Delhi since 27.06.2008.

CTS Report

Clearing Particulars during the Month

Sl No JanÃ10 FebÃ10

Inward Outward Inward Outward

1.Total No. Branches 65 65

2 Branched migrated to CBS 63 63

3 Branches Participating in CTS 62 62 62 62

4 No. of Cheque Processed 176487 125926 160402 110844

5 No. of Cheque Processed through CTS 176487 125926 160402 110844

6 Amount Processed (in crores) 993.44 794.51 1221.37 885.83

7 Amount processed through CTS 993.44 794.51 1221.37 885.83

(%) of Cheques cleared through CTS 100% 100%

Achievements in the Field of Research & Technology

The Bank has set up Institute for Research & Technology at Panchkula, Haryana to impart high quality technical education to its employees and to conduct research and development in banking technology. The bank has formed a team of IT specialists for implementation, maintenance and supporting branches for development and bug fixing of HKI Banksoft Software.

INTERNATIONAL BANKING

The Bank carries out its International business through its 53 authorised / designated branches, which includes 6 International branches and 1 International cum Industrial

Finance branch. Export Credit of the Bank as on 31.03.2010 stood at Rs. 2345.61 crores. The Bank is taking steps to increase the credit flow to exporters. ExportersÃ meets are arranged at various centres to explain various facilities available to them. The bank maintains correspondent relationship with prime banks abroad and Standard Settlement instructions in various currencies with 15 foreign banks. The Bank is also catering to the need of Non-Resident Indians through its branches. The Bank is having one NRI branch at Jalandhar.

Overseas presence

Bank is having one overseas branch at Hong Kong which has earned net profit in the current financial year. The branch is earning operational profit during last two years. Branch is having a Representative Office at Shenzhen, China which is eligible for upgradation into a full fledged branch.

INSPECTION AND AUDIT

Bank has a comprehensive Inspection & Audit Policy for undertaking Internal Inspection, Concurrent Audit, Revenue Audit, EDP/IS Audit, Risk Based Internal Audit(RBIA), Management Audit, Human Resource (HR) Audit and System Audit. EDP/IS Audit, RBIA, HR Audit & System Audit are carried out concurrently with regular inspection of Branches.

Branches including Large, Very Large, Exceptionally Large, Forex-cum-Treasury Branch and Dealing Rooms etc. are subjected to Concurrent Audit, that is, Ãsimultaneous checking of transactionsÃ, by outside Chartered Accountant Firms.

During the year 2009-10, regular inspection was carried out at 1649 branches, 42 Currency Chests, 13 Zonal Offices, 15 Head Office Departments, 03 Staff Training Centres (STC) and 02 Field Inspection Offices(FIO). Management Audit was also conducted in 32 Zonal Offices whereas Regular Inspection (Revenue Part) was covered at the 45 Zonal Offices, 08 FIOs and 06 STCs.

At Zonal Office level, Zonal Inspection Committees (ZIC) are formed with Zonal Head as convener and FIO Head as member to ensure effective monitoring of Internal control system, progress in rectification and considering closure of inspection report files. The meetings of ZIC are conducted at bi-monthly interval.

VIGILANCE

The vigilance policy followed by the Bank is in consonance with the various guidelines/directives issued by the Central Vigilance Commission, Reserve Bank of India and Ministry of Finance from time to time. Requisite steps are taken to contain and control fraud, forgery, malpractice etc, in the Bank through various preventive measures. Modus operandi of such cases, as also causative factors leading to the same, are regularly communicated to the field functionaries through Circulars, so as to educate them properly and avoid recurrence. Surprise Vigilance Inspection of fraud-prone Branches is to plug the loopholes. As measures of educative vigilance, training sessions and seminars are regularly conducted. In every training programme of duration 6 days & above, one or two sessions are incorporated on preventive vigilance. Systems improvement, whenever necessary, is taken up, to usher internal control mechanism. All these aspects are highlighted during field visits by the executives. However, punitive action is also taken against the erring officials through disciplinary proceedings, which acts as a deterrent to others. Stress is also given on measures of educative vigilance through training sessions, seminars & workshops.

Official Language

Compliance of various provisions under the Official Language Policy was ensured in order to achieve the targets stipulated in the Annual Programme. Accordingly, statutory requirements in regard to bilingual issuance of documents under Section 3 (3) of Official Language Act, reply of Hindi letters in Hindi, bilingual publication of manuals & codes, bilingualisation of stationery items was ensured. During the year, a large number of Officers & employees, not having working knowledge of Hindi, were nominated for various Hindi courses conducted by the Government of India. 86 Hindi workshops (1613 officers/ employees participated) and 78 Desk Training programmes (695 officers/employees participated) were organized, during the year.

The Parliamentary Committee on Official Language conducted an inspection of our Panna Branch under Satna Zone on 31.10.2009 regarding use of Official Language.

The Drafting and Evidence sub-Committee of the Committee of Parliament on Official Language held a discussion programme on 21.10.2009 and 19.03.2010 with Zonal Office, Hyderabad and Zonal Office, Raipur respectively through the Town Official Language Implementation Committee. The members of the Committee appreciated the efforts being made by our Bank in regard to use of Official Language.

Our General Manager (Official Language) was invited as a specialist of Banking and Law in a meeting of the Banking Glossary Standing Committee of Reserve Bank of India to finalise legal words.

The Reserve Bank of India inspected our Zonal Office, Kanpur on 29.07.2009, Zonal Office, Chandigarh on 26.06.2009 and Zonal Office, Kolkata (Urban) & Kasba Branch on 06.06.2009 and appreciated the efforts being made by our Bank in regard to use of Official Language.

Joint Director, Financial Services Department, Ministry of Finance, Government of India inspected our Head Office on 27.03.2010 and found the efforts being made by our Bank in regard to use of Official Language very satisfactory. The Deputy Director, Regional Implementation Office (Eastern Region), Kolkata, Government of India, Ministry of Home Affairs, Official Language Deptt. inspected our Zonal Office, Behala on

04.12.2010 and appreciated the efforts made by the Bank towards the use of Hindi.

The Bank observed the month of September as ÃHindi MonthÃ throughout the country. On this occasion, our HonÃble Chairman & Managing Director called upon all the officers and employees for progressive use of Hindi, through an appeal. During the month, various competitions including ÃAll India Essay Writing in HindiÃ were organized.

The Bank received several national level prizes for outstanding performance in the area of implementation of official language; ÃThird PositionÃ in linguistic region ÃAÃunder ÃReserve Bank Rajbhash Shield CompetitionÃfor the year 2007-08. The Bank has also been awarded ÃThird PositionÃ in linguistic region ÃAÃ for year 2008-09 under ÃResereve Bank Rajbhash Shield Competition.Ã Also, Zonal Office, Kolkata (Metro) was awarded ÃFirst PrizeÃ by Regional Implementation Office, Govt. of India, Ministry of Home Affairs, Deptt. of Official Language under Regional Implementation Rajbhasha Puraskar Scheme in Eastern region. Zonal Office, Guwahati was awarded ÃSecond PrizeÃ by Regional Implementation Office, Govt. of India, Ministry of Home Affairs, Deptt. of Official Language under Regional Implementation Rajbhasha Puraskar Scheme in North-East region. Zonal Office, Meerut was awarded ÃThird PrizeÃ by Regional Implementation Office, Govt. of India, Ministry of Home Affairs, Deptt. of Official Language under Regional Implementation Rajbhasha Puraskar Scheme in Northern region.

Our BankÃs bilingual House Magazine ÃTriveni DharaÃ received ÃFirst PrizeÃ by the Reserve Bank of India among all the public sector banks and financial institutions for the year 2007-08 and again the ÃFirst PrizeÃ has been announced for ÃTriveni DharaÃ for the year 2008-09 under bilingual House Magazine Competition.

Under the Town Official Language Implementation Committee prizes, BankÃs Head Office received the ÃExcellency CertificateÃ, Staff Training Centre, Hyderabad received the ÃFirst PrizeÃ, Zonal Office Dehradun and Zonal Office, Chennai received the ÃSecond PrizeÃfor excellent implementation of Official Language.

During the year, two meetings of Town Official Language Implementation Committee (Bank), Ranchi were organized in the convenorship of our Zonal Office, Ranchi with the participation of members in large number.

HUMAN RESOURCES DEVELOPMENT

The Bank laid prime importance on developing human capital in tune with its quest to emerge a bank of global stature. Initiatives have been taken for capacity building of human resources by focusing their competencies and maximizing their potential in critical & vital functional areas, handling international business and adequate succession plan.

Manpower

The manpower complement of the Bank is depicted hereunder:

Category 31.3.2009 31.3.2010

Officer 8,202 8,425

Clerk 7,631 8,249

Sub-staff 4,624 4,285

Total Staff 20,457 20,959

Of which

Scheduled Castes 5,130 5,506

Scheduled Tribes 1,041 1,194

Other Backward Castes 700 1,207

Women 2,260 2,560

Others (MC, PH, & XSM) 1,779 1,882

Recruitment & Promotion

During 2009-10, the Bank undertook processes for recruitment of 1,000 Officers (including Specialist Officers) & 1000 clerical cadre employees. Promotion Processes were completed in all cadres during the year starting from the lowest rung in subordinate staff cadre to the highest rank in OfficersÃ cadre. For the first time, three of our General Managers were elevated to the post of Executive Director in other Public Sector Banks.

Industrial Relations

In the backdrop of prevailing cordial & harmonious industrial relations climate scenario, the collective grievances and issues of mutual interest were discussed and settled in the bilateral forums with the recognized OfficersÃ Association and Workmen Union.

Welfare

In tune with BankÃs conviction that the Human Resources are the greatest asset of the organisation , Various welfare shemes such as i) Group Mediclaim Insurance Policy for all the Employees/ Officers ii) General Health Check up for all eligible employees /officers above 40 years & their spouse iii) Scholarship to the Wards of the Employees/Officers IV) Financial assistance to the Employees/Officers having mentally challenged children v) Death exgratia of Rs 1.00 lakh to the bereaved family of the deceased employee/ Officer dying in harness and vi) Reimbursement of Mediclaim Insurance premium to all retired employees and their spouse with a floater coverage for an amount of Rs. 1.00 lakh have been extended in the year 2009-10.

ALLBANK FINANCE LTD.

AllBank Finance Ltd. a wholly owned subsidiary of Allahabad Bank with a capital base of Rs.15 crores. The company has obtained Category-I Merchant Banking and Underwriting registration from SEBI. AllBank Finance Ltd. engaged in

Corporate Advisory Services, Project Appraisal, Issue Management, Loan Syndication Debenture and Trusteeship Underwriting. The subsidiary posted a profit of Rs.7.15 crores during 2009-10 as against Rs.9.41 crores during 2008-09.

FUTURE PLANS

The Bank has projected a business growth of around 25% during the current year.

The Bank will focus on Retail Business, Loan Syndication, Sale of Gold Coins CMS and Bancassurance etc. in addition to the core banking activities.

The Bank is looking ahead to spread out overseas. The process has already been initiated with a branch at Hong Kong and representative office at Shenzen, China. A representative office at Dhaka , Bangladesh is also being contemplated after receipt of approval from Reserve Bank of India and Government of Bangladesh.

The Bank has initiated various steps to develop a pool of knowledgeable Human Capital.

BOARD OF DIRECTORS

The Board of Directors, the Management Committee and the Audit Committee of the Board met 12, 20 and 8 times respectively during 2009-10. The DirectorÃs Promotion Committee, ShareholdersÃ/InvestorsÃ Grievance Committee, IT Sub-Committee, Fraud Monitoring Committee, Customer Service Committee, Renumeration Committee and Risk Management Committee ,Nomination Committee, Share transfer Committee of the Board met 5, 2,7, 3, 4, 4,1 and 16 times during 2009-10.

Shri D. Sarkar has assumed the office of Executive Director of the Bank on 07.12.2009. Prior to his present appointment, Shri Sarkar was the General Manager (Wholesale Banking / Credit) of Bank of Baroda at Corporate Office, Mumbai. He has 27 years experience of Banking and had worked in various capacities and had worked in various capacities in Branches, Regional Office, Zonal Office and Corporate / Head Office.

Shri M.R. Nayak has assumed the office of Executive Director of the Bank on 22.01.2010. Prior to his present appointment Shri Nayak was the General Manager of Corporation Bank, Head Office, Bangalore. Shri Nayak has 39 years experience of Banking. He has worked in various capacities in Branches and Corporate / Head Office. He was instrumental in introducing gold banking import of bullion by the Bank, one of the first in banking industry in India.

Dr. Kaujalgi is deemed to be elected as Director representing shareholders with effect from 12.06.2010. Dr. Kajulgi, an M.Tech in Production Engg. from IIT, Mumbai, M.S. in Operations Research and Computer Science from Case Institute of Technology, U.S.A. and Ph.D. from IIT, Mumbai, has been serving Indian Institute of Management, Bangalore since 1975. He has over 40 publications in National & International journal. His areas of interest include Computer

Science, Information Systems, Operation Research, Statistics and Production / Operation Management. He was the Director, Central Board, State Bank of India from November 1995 to October 1998. Also, he was the Shareholder Director on the Board of Bank of India from 25.10.2005 to 24.10.2008.

ACKNOWLEDGEMENTS

The Board of Directors records its appreciation for continued support and patronage of the shareholders/investors of the Bank. The Board of Directors gratefully acknowledges the valuable and timely advice, guidance and support from the Reserve Bank of India, Government of India and other regulatory agencies and look forward to their continued support and co-operation. The Board of Directors is thankful to the customers for their continued trust and confidence on the Bank.

The Board records its appreciation for valuable contributions of the outgoing members and welcomes the new incumbents.

The Board of Directors is pleased to place on record their appreciation of the committed services of the BankÃs employees.

For and on behalf of the Board of Directors,

Yours sincerely,

Kolkata (J. P. Dua)

30th April 2010 Chairman & Managing Director

Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article