Directors Report of Indian Overseas Bank
Mar 31, 2023
The Board of Directors have pleasure in presenting the Annual Report together with Audited Balance Sheet and Profit & Loss Account of the Bank for the year ended 31st March, 2023.
The global economy remained volatile in FY 2022-23. It has been a challenging year for the global economy in general and the banking industry in specific. In addition to COVID-19''s lingering impact, the world witnessed multi-decade high level of inflation rates across countries due to supply chain disruptions and elevated energy prices following Russia''s invasion of Ukraine.
To combat this situation, Central Banks across the world continued to withdraw their accommodative stance in a calibrated manner which led to tightening of liquidity across global markets and an increase in interest rates. This posed a downside risk to global economic growth prospects due to contraction in consumption and output. More recently, the turmoil of a few banks in US and Europe has resulted vulnerabilities in the banking sector and concerns about global financial stability and systemic risk.
The International Monetary Fund (IMF) predicts the global economy will grow by 2.8% this year and 3% in 2024. Emerging and developing economies to grow 3.9% in 2023 from 4% in 2022, with major contributions from India and China.
Indian economy remained resilient amidst these uncertainties on account of strong economic fundamentals and robust balance sheets of the corporate sector and banks enabled a rebound in credit demand, which was also facilitated by a large increase in capex by the centre.
India''s GDP growth accelerated to 6.1% in the January to March 2023 quarter from an upwardly revised 4.5% growth in previous quarter. For the full financial year, the economy growth was reported at 7.2% higher than the earlier Second Advance Estimate of 7%. In the previous financial year, India had seen 9.1% GDP growth. The surge is primarily driven by improved performance in agriculture, manufacturing, mining, and construction sectors. There was a broad-based improvement in growth across sectors. The strength in domestic demand supported the growth amid the global slowdown
The Reserve Bank of India has projected real GDP growth of India for 2023-24 at 6.5 % with Q1:2023-24 at 7.8%; Q2 at 6.2 %; Q3 at 6.1 %; and Q4 at 5.9 %; with risks evenly balanced.
Banks global Business stood at Rs.4,49,892 Crores as of 31st March 2023 as compared to Rs.4,17,960 Crores as of 31st March 2022. Deposits and Advances stood at Rs.2,60,883
Crores and Rs.1,89,009 Crores as of 31st March 2023 as compared to Rs.2,62,159 Crores and Rs.1,55,801 Crores as of 31st March 2022 respectively.
CASA deposits stood at Rs.1,14,113 Crores as on 31st March 2023 as compared to Rs.1,13,877 Crores as on 31st March 2022 a landmark achievement in the history of the Bank. CASA ratio improved from 43.44% to 43.74% during the financial year 2022-2023.
The credit growth of the bank has increased by 21.31% (Y-o-Y) to Rs 1,89,009 Crores as on March 31st 2023. The efforts during the current year were aimed at sustaining the higher operational efficiency levels as the operating environment remained firm. Bank continued to expand RAM segment advances and accelerated the growth under Capital light advances such as Housing and Jewel loan. As a result, operating profit for the Bank has increased to Rs.5942 Crores as on 31st March 2023 as compared to Rs. 5763 Crores as on 31st March 2022.
On the asset quality side, the Bank has seen decrease in both gross NPA & Net NPA. The Gross NPA of the Bank has deceased to Rs 14,072 Crores (7.44%) as on 31.03.2023 from Rs 15,299 Crores (9.82%) reported in the financial year ended 31.03.2022. Similarly, the Net NPA of the bank has decreased to Rs 3,266 Crores (1.83 %) from Rs 3,825 Crores (2.65 %) for the above said period.
As a result of this approach, The Net profit of the Bank has increased by 22.76 % to Rs 2,099 Crores in the financial year ended 2022-23 from Rs 1,710 Crores as on 31.03.2022 on the back of strong growth in Net Interest Income and Improvement in asset quality.
Income and Expenditure Analysis
The Interest received on advances increased by 23.31 % (YoY) to Rs.13151 Crores as on 31st March 2023 on compared to Rs.10665 Crores received over previous year . Interest on investments has increased to Rs. 5899 Crores in FY 2022-23 as against Rs. 5675 Crores in FY 2021-22. Overall interest income has improved substantially to Rs. 19401 Crores in FY 2022-23 as against 16730 Crores in FY 2021-22.
The Interest on Deposits stood at to Rs.10536 Crores in FY 2022-23 as compared to Rs.10220 Crores paid in previous year. Interest on Borrowings has increased to Rs.609 Crores in FY 2022-23 as against Rs.199 Crores in FY 2021-22. Overall Interest Expenses has increased to Rs. 11145 Crores in FY 2022-23 as against Rs.10419 Crores in FY 2021-22.
CASA has improved from Rs.113877 Crores as of 31st March-2022 to Rs.114113 Crores as of 31st March-2023 with a growth of 0.21%. CASA% has moved up from 43.44% as of 31st March-2022 to 43.74% as of 31st March-2023.
Net interest income has improved from Rs. 6311 Crores in FY 2021-22 to Rs. 8255 Crores in FY 2022-23. Operating expenses has increased to Rs. 6422 Crores in FY 2022-23 as against Rs.5451 Crores in FY 2021-22.
Yield on Advances has improved from the level of 7.24 % in FY 2021-22 to 8.52 % in FY 2022-23. Cost of deposits has been increased from 4.12 % in FY 2021-22 to 4.27 % in FY 2022-23. As a result, Net Interest Margin (NIM) stood higher by 79 bps at 3.20 percent in FY 2022-23 as against 2.41 percent in FY 2021-22.
Capital Raised during 2022-23 Raising of Tier II Bonds
Bank has raised Basel III compliant Tier II Bonds (Series V) aggregating to Rs.1000 crore on private placement basis at a coupon rate of 9.00% with a tenor of 10 years from the date of allotment with a call option at the end of 5th year & on subsequent coupon payment date. The instrument was rated by M/s ICRA Ratings and M/s CARE Ratings, and they had assigned ratings of AA-/Stable.
Corporate Governance
Corporate Governance reflects the built in value system of the Bank in conducting its day to day affairs. The Bank recognizes the critical importance of effective Corporate Governance for the safe and sound functioning of the Bank and lays emphasis on ensuring that structures, processes and systems are put in place to establish strategic objectives to serve the interest of the Bank and its stakeholders which also facilitate effective monitoring.
SEBI (Listing Obligations and Disclosure Requirements Regulations), 2015 (LODR)
As per SEBI (LODR),
⢠The Bank is providing remote e-voting facility to its shareholders, in Annual General Meetings/ Extraordinary General Meetings.
⢠The Code of Conduct is applicable to all members of the Board and the Senior Management (i.e., General Managers of the Bank).
⢠The Bank is submitting a quarterly compliance report on Corporate Governance to the Audit Committee of the Board and to BSE & NSE, where the shares of the Bank are listed.
The Bank is also submitting Quarterly Investor Grievance Report to BSE & NSE.
Investor Education & Protection Fund (IEPF)
As per the guidelines of Ministry of Corporate Affairs (MCA), Government of India, the Bank has transferred Unpaid Dividend amount up to the year 2013-14 to IEPF.
Bank is complying with all guidelines/regulations laid down by the Regulatory Authorities and Government of India from time to time. The Bank redresses the shareholders grievances without any delay.
Capital Adequacy Ratio
The Bank''s capital adequacy ratio as on 31st March 2023 stood at 16.10 % as per Basel III norms.
Branch Network
The Bank has 3,220 domestic Branches as on 31st March 2023 as against 3,214 Branches as on 31st March 2022, comprising of 906 Rural Branches (28.13%), 961 Semi Urban Branches (29.84%), 655 Urban Branches (20.34%) and 698 Metropolitan Branches (21.68%). The Bank also has 49 Regional Offices, 2 Extension Counters, 1 Satellite Office, 3 City Back Offices and 6 Nodal Audit Offices. During the year under review (FY 2022-23), the Bank has opened 4 Rural Branches, 2 Digital Banking Units & One Regional Office.
Board of Directors
The business of the Bank is vested with the Board of Directors. The MD & CEO and EDs function under the superintendence, direction and control of the Board. The strength as on date is nine directors comprising three whole time Directors, one GOI Nominee Director, one RBI nominee director, one director elected from amongst the shareholders to duly represent their interest and three part time non-official directors. The MD & CEO presides over the meetings of the Board as Chairman.
|
The position of the terms of directors during the FY 2022-23 is as under: |
||||
|
Name |
Date of Joining |
Term to end on |
Designation |
|
|
Shri Ajay Kumar Srivastava |
01.01.2023 |
31.12.2025 |
Managing Director & Chief Executive Officer |
|
|
Smt S Srimathy |
10.03.2021 |
09.03.2024 |
Executive Director |
|
|
Shri Sanjay Vinayak Mudaliar |
01.01.2023 |
31.12.2025 |
Executive Director |
|
|
Smt Annie George Mathew |
22.07.2016 |
*** |
Govt. Nominee Director |
|
|
Shri Vivek Aggarwal |
25.02.2022 |
*** |
RBI Nominee Director |
|
|
Shri Sanjaya Rastogi |
03.12.2022 |
02.12.2025 |
Share Holder Director |
|
|
Shri Suresh Kumar Rungta |
21.12.2021 |
20.12.2024 |
Part Time Non-Official Director |
|
|
Shri B Chandra Reddy |
21.12.2021 |
20.12.2024 |
Part Time Non-Official Director |
|
|
Shri Deepak Sharma |
21.12.2021 |
20.12.2024 |
Part Time Non-Official Director |
|
|
*** Until Further Orders |
||||
|
During the FY 2022-23, the following directorâs tenure ended as below: |
|||
|
Name |
Date of Joining |
Term Ended on |
Designation |
|
Shri Partha Pratim Sengupta |
24.07.2020 |
31.12.2022 |
Managing Director & Chief Executive Officer |
|
Shri Ajay Kumar Srivastava |
09.10.2017 |
31.12.2022 |
Executive Director |
|
08.12.2017 |
07.12.2020 |
||
|
Shri Navin Prakash Sinha |
29.01.2021 # |
07.10.2022 |
Share Holder Director |
# Shri Navin Prakash Sinha has been re-elected as Share Holder Director for the second term from 29.01.2021 till 28.01.2024. However, Shri Navin Prakash Sinha has resigned on 07.10.2022.
The Board of Directors are grateful for the valuable guidance and support received from the Government of India, Reserve Bank of India, Securities and Exchange Board of India (SEBI), Stock Exchanges, State Governments, Financial Institutions and all Overseas Regulators. The Board of Directors acknowledge with thanks the valued Customers, Employees Union, Officers Association, Domestic and International Banking group, the shareholders & other stake holders for their valued support and continued patronage with the Bank.
The Board also wishes to place on record its profound appreciation for the valuable contribution of the Bank''s Staff at all levels and looks forward to their continued involvement with commitment towards achieving the future goals
For and on behalf of the Board of Directors
Place : Chennai Ajay Kumar Srivastava
Date : 13th June 2023 Managing Director & Chief Executive Officer
Mar 31, 2022
The Board of Directors have pleasure in presenting the Annual Report together with Audited Balance Sheet and Profit & Loss Account of the Bank for the year ended 31st March, 2022.
Global Business Performance
The continuation of Russia-Ukraine conflict is posing a significant challenge to global recovery. At the same time, economic damage from the conflict will contribute to a significant slowdown in global growth during 2022 and significantly increase in inflation. Fuel and food prices have increased rapidly, hitting vulnerable populations in low-income countries hardest.
Global growth is projected to slow from an estimated 6.1 percent in 2021 to 3.6 percent in 2022 and 2023. This is 0.8 and 0.2 percentage points lower for 2022 and 2023 than projected in January 2022.
Indian Economy is no exception to this event. In line with global economy, India also witnessed economic disruptions during the Financial Year. India''s gross domestic product (GDP) grew by 5.4 per cent in the December 2021 quarter of the fiscal year 2021-22, lower than 8.50 % growth seen in the September 2021 quarter. However, it was much higher than 0.50 % growth which was witnessed in the corresponding period (October-December) of the previous fiscal (2020-21).
Financial Performance
Banks global Business stood at Rs.4,17,960 Crores as of 31st March 2022 as compared to Rs.3,79,885 Crores as of 31st March 2021. Deposits and Advances stood at Rs.2,62,159 Crores and Rs.1,55,801 Crores as of 31st March 2022 as compared to Rs.2,40,288 Crores and Rs.1,39,596 Crores as of 31st March 2021 respectively.
On Deposits front, Bank further reduced the concentration of Bulk deposits and improved the share of low cost deposits. CASA deposits grew by 11.46 percent over 31st March 2021 and stood at Rs.1,13,877 Crores as on 31st March 2022, a milestone achievement in the history of the Bank. CASA ratio remained at 43.44 percent.
The operational efficiency of the Bank improved further during the year. Constraints on capital has restricted the Bank to expand the credit portfolio. Bank continued to accelerate the growth under Capital light advances such as Housing and jewel loan in order to protect the interest income under a falling interest rate regime. The improved non-interest income during the year has further strengthened the operating efficiency of the Bank. Bank could contain its expenditure on account of lower interest expenses. As a result, Bank could achieve operating profit to the extent of Rs.5763 Crores for FY 2021-22.
Bank could reduce the Gross Non-Performing Assets substantially from Rs 16,323 Crores to Rs 15,299 Crores and thereby brought down the GNPA percent from 11.69 % to 9.82 % through multi-pronged and focused recovery initiatives. NNPA has been brought down from Rs 4578 Crores to Rs 3825 Crores in absolute terms and from 3.58 % to 2.65 %. PCR of the Bank has improved substantially from 90.34 % as on 31.03.2021 to 91.66 % as on 31.03.2022, one of the highest in industry.
As a result of this approach, Bank could register Net profit to the tune of Rs 1710 Crores for FY 2021-22.
Income and Expenditure Analysis
The Interest on advances stood at to Rs.10,665 Crores FY 22-23 as compared to Rs.10,834 Crores received in previous year. Interest on investments has declined to Rs.5675 Crores in FY 2021-22 as against Rs.5,712 Crores in FY 2020-21. Overall interest income has also declined to Rs.16730 Crores in FY 2021-22 as against Rs.16966 Crores in FY 2020-21. The reduction in interest income during the year was mainly due to falling interest rate regime and lower Interest income recovered from NPA accounts.
Growth under low cost deposits and maintaining bulk deposits at minimal level has helped in controlling the cost of deposit. CASA has improved from Rs.102165
Crores as of 31st March-2021 to Rs.113877 Crores as of 31st March-2022 with a growth of 11.46%. CASA% has moved up from 42.52% as of 31st March-2021 to 43.44% as of 31st March-2022. Further, the falling interest rates in Savings Bank deposit and term deposits has kept interest expenditure in control.
Despite reduction in interest on advances, Net interest income has improved from Rs.5899 Crores in FY 202021 to Rs.6311 Crores in FY 2021-22. Operating expenses has reduced to Rs.5451 Crores in FY 2021-22 as against Rs.5562 Crores in FY 2020-21.
Yield on Advances has decreased from the level of 8.00 % in FY 2020-21 to 7.38 % in FY 2021-22. Cost of deposits has been brought down from 4.70 % in FY 2020-21 to 4.22 % in FY 2021-22. As a result, Net Interest Margin (NIM) stood higher by 2 bps at 2.41 percent in FY 2021-22 as against 2.39 percent in FY 2020-21.
Capital Raised during 2021-22Capital Infusion by Government of India
For the capital infusion by Government of India (Rs.4,100 crore received on 31.03.2021) the Bank had issued & allotted 246,54,23,932 equity shares of Rs.10/- each for cash at an issue price of Rs.16.63 per share (including premium of Rs.6.63 per equity share) aggregating to
the Board and to BSE & NSE, where the shares of the Bank are listed.
Rs.4,100 crore Government of India, on preferential basis on 02.06.2021.
During the year under review, the shareholding of Government of India has increased to 96.38% from 95.84% and the public shareholding stands at 3.62%. The paid-up capital of the Bank has increased to Rs.18, 902.41 crore from Rs.16, 436.99 crore.
Raising of Tier II Bonds
Bank has raised Basel III compliant Tier II Bonds (Series IV) aggregating to Rs.665 crore on private placement basis at a coupon rate of 8.60% with a tenor of 10 years from the date of allotment with a call option at the end of 5th year & on subsequent coupon payment date. The instrument was rated by M/s India Ratings and M/s CARE Ratings and they had assigned ratings of AA-/Stable.
Corporate Governance
Corporate Governance reflects the built in value system of the Bank in conducting its day to day affairs. The Bank recognizes the critical importance of effective Corporate Governance for the safe and sound functioning of the Bank and lays emphasis on ensuring that structures, processes and systems are put in place to establish strategic objectives to serve the interest of the Bank and its stakeholders which also facilitate effective monitoring.
SEBI (Listing Obligations and Disclosure Requirements Regulations), 2015 (LODR)
As per SEBI (LODR),
⢠The Bank is providing remote e-voting facility to its shareholders, in Annual General Meetings/ Extraordinary General Meetings.
⢠The Code of Conduct is applicable to all members of the Board and the Senior Management (i.e., General Managers of the Bank).
⢠The Bank is submitting a quarterly compliance report on Corporate Governance to the Audit Committee of
⢠The Bank is also submitting Quarterly Investor Grievance Report to BSE & NSE.
Investor Education & Protection Fund (IEPF)
As per the guidelines of Ministry of Corporate Affairs (MCA), Government of India, the Bank has transferred Unpaid Dividend amount pertaining to the year 2013-14 to IEPF.
Bank is complying with all guidelines/regulations laid down by the Regulatory Authorities and Government of India from time to time. The Bank redresses the shareholders grievances without any delay.
Capital Adequacy Ratio
The Bank''s capital adequacy ratio as on 31st March 2022 stood at 13.83 % as per Basel III norms.
The Bank has 3,214 domestic Branches as on 31st March 2022 as against 3,217 Branches as on 31st March 2021, comprising of 902 Rural Branches (28.06%), 961 Semi Urban Branches (29.90%), 653 Urban Branches (20.32%) and 698 Metropolitan Branches (21.72%). The Bank also has 48 Regional Offices, 3 Extension Counters, 1 Satellite Office, 3 City Back Offices and 6 Nodal Audit Offices. During the year under review (FY 2021-22), the Bank has merged 3 Branches with other existing branches.
The business of the Bank is vested with the Board of Directors. The MD & CEO and EDs function under the superintendence, direction and control of the Board. The strength as on date is nine directors comprising three whole time Directors, one GOI Nominee Director, one RBI nominee director, one director elected from amongst the shareholders to duly represent their interest and three part time non-official directors. The MD & CEO presides over the meetings of the Board as Chairman.
The position of the terms of directors during the FY 2021-22 is as under:
|
Name |
Date of Joining |
Term Ended on |
Designation |
|
Shri Partha Pratim Sengupta |
24.07.2020 |
31.12.2022 |
Managing Director & Chief Executive Officer |
|
Shri Ajay Kumar Srivastava |
09.10.2017 |
08.10.2022 |
Executive Director |
|
Ms S Srimathy |
10.03.2021 |
09.03.2024 |
Executive Director |
|
Ms Annie George Mathew |
22.07.2016 |
*** |
Govt. Nominee Director |
|
Shri Vivek Aggarwal |
25.02.2022 |
*** |
RBI Nominee Director |
|
Shri Navin Prakash Sinha |
08.12.2017 29.01.2021 # |
07.12.2020 28.01.2024 |
Share Holder Director |
|
Shri Suresh Kumar Rungta |
21.12.2021 |
20.12.2024 |
Part Time Non-Official Director |
|
Shri B Chandra Reddy |
21.12.2021 |
20.12.2024 |
Part Time Non-Official Director |
|
Shri Deepak Sharma |
21.12.2021 |
20.12.2024 |
Part Time Non-Official Director |
# - Shri Navin Prakash Sinha has been re-elected as Share Holder Director for the second term from 29.01.2021 till 28.01.2024 *** Until Further Orders
During the FY 2021-22, the following directorâs tenure ended as below:
|
Name |
Date of Joining |
Term Ended on |
Designation |
|
|
Shri Deepak Kumar |
18.09.2019 |
24.02.2022 |
RBI Nominee Director |
The Board of Directors are grateful for the valuable guidance and support received from the Government of India, Reserve Bank of India, Securities and Exchange Board of India (SEBI), Stock Exchanges, State Governments, Financial Institutions and all Overseas Regulators. The Board of Directors acknowledge with thanks the valued Customers, Employees Union, Officers Association, domestic and international banking group, the shareholders & other stake holders for their valued support and continued patronage with the Bank.
The Board also wishes to place on record its profound appreciation for the valuable contribution of the Bank''s Staff at all levels and looks forward to their continued involvement with commitment towards achieving the future goals.
For and on behalf of the Board of Directors
Chennai Partha Prathim Sengupta
18th May 2022 Managing Director & Chief Executive Officer
Mar 31, 2021
DIRECTORSâ REPORT 2020-21
The Board of Directors have pleasure in presenting the Annual Report together with Audited Balance Sheet and Profit & Loss Account of the Bank for the year ended 31st March, 2021.
Outbreak of novel Corona virus (COVID-19) pandemic resulted in contraction of global economy growth by 3.3 percent in 2020 as against 2.8 percent growth witnessed in 2019, marking one of the worst financial crises. Substantial fiscal and monetary stimulus packages are released by the Governments and Central Banks across the globe to fight the deadly virus and bring life to normal. Indian Economy is no exception to this event. In line with global economy, India witnessed major economic disruptions during the Financial Year forcing the Government to impose strict lockdown measures, bringing the manufacturing and trade activities to almost zero. Continuous lockdown forced mobility restrictions and social distancing led to unparalleled supply chain disruption and fall out in consumer demand. This forced Indian GDP growth to contract by 8.0% in FY 2020-21 as against the growth of 4.0 percent in FY 2019-20.
Financial Performance
During FY 2020-21, the major focus of the Bank was to impart continuous service to the customer amidst the spread of virus while keeping in place the interest of all the staff members. Bank followed Business Continuity Plan duly adhering to COVID Protocol to serve the interest of the Customer, Staff and all stakeholders.
Bank''s global business stood at Rs.3,79,885 Crores as of 31st March 2021 as compared to Rs.3,57,723 Crores as of 31st March 2020. Deposits and Advances stood at Rs.2,40,288 Crores and Rs.1,39,597 Crores as of 31st March 2021 as compared to Rs.2,22,952 Crores and Rs.1,34,771 Crores as of 31st March 2020 respectively.
On Deposits front, Bank further reduced the concentration of Bulk deposits and improved the share of low cost deposits. CASA deposits grew by 13.83 percent over 31st March 2020 and stood at Rs. 1,02,165 Crores as on 31st March 2021, a milestone achievement in the history of the Bank. CASA ratio remained at 42.52 percent.
The operational efficiency of the Bank improved further during the year. Constraints on capital has restricted the Bank to expand the credit portfolio. Bank continued to accelerate the growth under Capital light advances such as Housing and jewel loan in order to protect the interest income under a falling interest rate regime. The improved non-interest income during the year has further
strengthened the operating efficiency of the Bank. Bank could contain its expenditure on account of lower interest expenses. As a result, Bank could achieve operating profit to the extent of Rs.5896 Crores for FY 2020-21.
Bank could reduce the Gross Non Performing Assets substantially from Rs 19913 Crores to Rs 16,323 Crores and thereby brought down the GNPA percent from 14.78 percent to 11.69 percent through multi-pronged and focused recovery initiatives. NNPA has been brought down from Rs 6603 Crores to Rs 4578 Crores in absolute terms and from 5.44 percent to 3.58 percent. PCR of the Bank has improved substantially from 86.94 percent as on 31.03.2020 to 90.34 percent as on 31.03.2021, one of the highest in industry.
As a result of this approach, Bank could register Net profit to the tune of Rs 831 Crores for FY 2020-21.
Income and Expenditure Analysis
The Interest on advances was limited to Rs.10834 Crores as compared to Rs.11513 Crores received previous year. Interest on investments has improved from Rs.5208 Crores in FY 2019-20 to Rs.5712 Crores in FY 2020-21. However, overall interest income has recorded decline during the year mainly due to falling interest rate regime. Besides, the Interest Income which includes interest recovered from NPA accounts stood lower in FY 2020-21 as against in FY 2019-20.
Growth under low cost deposits and shedding of bulk deposits has helped in controlling the cost of deposit. CASA has improved from Rs.89751Crores as of 31st March-2020 to Rs.102165 Crores as of 31st March-2021 with a growth of 13.83%. CASA% has moved up from 40.26% as of 31st March-2020 to 42.52% as of 31st March-2021. Further, the falling interest rates in Savings Bank deposit and term deposits has kept interest expenditure in control.
Despite reduction in interest on advances, Net Interest Income has improved from Rs.5303 Crores in FY 201920 to Rs 5899 Crores in FY 2020-21. Operating expenses has gone up marginally from Rs 5129 Crores in FY 201920 to Rs.5562 Crores in FY 2020-21 due to provision for performance linked incentives and pension commutation arrears on account of the XIth Bipartite settlement.
Yield on Advances has decreased from the level of 8.62 percent in FY 2019-20 to 8.00 percent in FY 2020-21. Cost of deposits has been brought down from 5.33 percent in FY 2019-20 to 4.70 percent in FY 2020-21. As a result, Net Interest Margin (NIM) stood higher by 9 bps at 2.39 percent in FY 2020-21 as against 2.30 percent in FY 2019-20.
Capital Raised during FY 2020-21
Capital Infusion by Government of India
The Bank received a capital infusion of Rs.4,100 Crores (Rupees Four Thousand One Hundred Crores only) from Government of India towards contribution of Central
Government in the preferential allotment of equity shares of the Bank during the Financial Year 2020-21, as Governmentâs Investment. The amount of Rs.4,100 Crores (Rupees Four Thousand One Hundred crores only) received by the Bank on 31.03.2021 is kept in Share Application Money Account as on 31.03.2021 for allotment of shares to Government of India.
Capital Adequacy Ratio
The Bankâs capital adequacy ratio as on 31st March 2021 stood at 15.32 % as per Basel III norms.
The Bank has 3,217 domestic Branches as on 31st March 2021 as against 3,270 Branches as on 31st March 2020, comprising of 903 Rural Branches (28.07%), 960 Semi Urban Branches (29.84%), 653 Urban Branches (20.30%) and 701 Metropolitan Branches (21.79%). The Bank also has 48 Regional Offices, 3 Extension Counters, 1 Satellite Office, 3 City Back Offices and 6 Nodal Audit Offices. During the year under review (FY 2020-21), the Bank has merged 53 Branches with other existing branches and closed 7 Zonal Offices and 1 Satellite Office.
Corporate Governance
Corporate Governance reflects the built in value system of the Bank in conducting its day to day affairs. The Bank recognizes the critical importance of effective Corporate Governance for the safe and sound functioning of the Bank and lays emphasis on ensuring that structures, processes and systems are put in place to establish strategic objectives to serve the interest of the Bank and its stakeholders with a view to facilitate effective monitoring.
SEBI (Listing Obligations and Disclosure Requirements Regulations), 2015 (LODR)
As perSEBI (LODR),
⢠The Bank is providing remote e-voting facility to its shareholders, in all Annual General Meetings/ Extraordinary General Meetings.
⢠The Code of Conduct is applicable to all members of
the Board and the Senior Management (i.e., General Managers of the Bank).
⢠The Bank is submitting a quarterly compliance report on Corporate Governance to the Audit Committee of the Board and to BSE & NSE, where the shares of the Bank are listed.
⢠The Bank is also submitting Quarterly Investor Grievance Report to BSE & NSE.
In view of ongoing Covid19 pandemic, the Bank has conducted Annual General Meeting (AGM 2020) through virtual mode i.e. in compliance with SEBI guidelines.
Pursuant to SEBI (Prohibition of Insider Trading) Regulations, 2015, the Bank has formulated IOB Code of Conduct for Prohibition of Insider Trading for its Designated Person.
Investor Education & Protection Fund (IEPF)
As per the guidelines of Ministry of Corporate Affairs (MCA), Government of India, the Bank transferred Unpaid Dividend amount pertaining to the year 2012-13 to IEPF during September, 2020. The unpaid dividend data pertaining to the years 2013-14 has been uploaded in MCA website and is also available at www.iob.in. Accordingly, the Bank has complied with the guidelines of Government of India in respect of transfer of unpaid dividend to IEPF.
Bank is complying with all guidelines/regulations laid down by the Regulatory Authorities and Government of India from time to time. The Bank redresses the shareholders grievances without any delay.
Board of Directors
The business of the Bank is vested with the Board of Directors. The MD & CEO and EDs function under the superintendence, direction and control of the Board. The strength as on date is six directors comprising three whole time Directors, one GOI Nominee Director, one RBI nominee director, one director elected from amongst the shareholders to duly represent their interest. The MD & CEO presides over the meetings of the Board as Chairman.
The position of the terms of directors during the FY 2020-21 is as under:
|
Name |
Date of Joining |
Term Ended on |
Designation |
|
Shri Partha Pratim Sengupta |
24.07.2020 |
31.12.2022 |
Managing Director & Chief Executive Officer |
|
Shri Ajay Kumar Srivastava |
09.10.2017 |
08.10.2022 ~ |
Executive Director |
|
Ms S Srimathy |
10.03.2021 |
09.03.2024 |
Executive Director |
|
Ms Annie George Mathew |
22.07.2016 |
*** |
Govt. Nominee Director |
|
Dr. Deepak Kumar |
18.09.2019 |
*** |
RBI Nominee Director |
|
Shri Navin Prakash Sinha |
08.12.2017 29.01.2021 # |
07.12.2020 28.01.2024 |
Share Holder Director |
^ - Shri Ajay Kumar Srivastava, term of office extended for a period of two years with effect from 09.10.2020.
# - Shri Navin Prakash Sinha has been re-elected as Share Holder Director for the second term from 29.01.2021 till 28.01.2024 *** Until Further Orders
During the FY 2020-21, the following directors'' tenure ended as below:
|
Name |
Date of Joining |
Term Ended on |
Designation |
|
Shri Karnam Sekar |
15.04.2019 (w.e.f. 01.04.2019) |
30.06.2020 |
Managing Director & Chief Executive Officer |
|
Shri Sanjay Rungta |
08.12.2017 |
07.12.2020 |
Share Holder Director |
Acknowledgement
The Board of Directors are grateful for the valuable guidance and support received from the Government of India, Reserve Bank of India, Securities and Exchange Board of India (SEBI), Stock Exchanges, State Governments, Financial Institutions and all Overseas Regulators. The Board of Directors acknowledge with thanks the valued Customers, Employees Union, Officers Association, domestic and international banking group, the shareholders & other stake holders for their valued support and continued patronage with the Bank.
The Board also wishes to place on record its profound appreciation for the valuable contribution of the Bankâs Staff at all levels and looks forward to their continued involvement with commitment towards achieving the future goals.
For and on behalf of the Board of Directors
-Sd/-
Chennai Partha Pratim Sengupta
. ââ , âââ. Managing Director & Chief Executive Officer
14th June, 2021 a a
Mar 31, 2019
The Board of Directors have pleasure in presenting the Annual Report together with Audited Balance Sheet and Profit & Loss Account of the Bank for the year ended 31st March, 2019.
Global Business performance
Global growth is projected at 3.3% in 2019 and 3.4% in 2020, with downside risks continuing to build. High policy uncertainty, ongoing trade tensions, and a further erosion of business and consumer confidence are all contributing to the slowdown. Global trade growth has slowed sharply and new orders continue to decline in many countries. The trade restrictions introduced last year are a drag on growth, investment and living standards, particularly for low-income households.
GDP growth in India has eased, but is projected to be around 7% per cent in FY 2019 and FY 2020. Business confidence and investment remain strong, and activity should benefit from easing financial conditions, accommodative fiscal policy and recent structural reforms.
The Bank continued its efforts towards rebalancing its Balance Sheet under the current year. The focus was laid on to improve the RAM portfolio with a view to mitigate the risk and improve capital efficiency. The Bank further reduced the concentration of Bulk deposits and improved the share of low cost deposits. The Global Business level stood at Rs. 3,74,530 crores as on 31st March 2019 against Rs. 3,67,831 crores as on 31st March 2018. The global deposits and gross advances stood at Rs. 2,22,534 crores and Rs. 1,51,996 crores respectively as on 31st March 2019 against Rs. 2,16,832 crores and Rs. 1,50,999 crores respectively as on 31st March 2018.
Financial performance
The efforts during the current year were aimed at sustaining the higher operational efficiency levels as the operating environment remained firm. The right sizing of balance sheet had its impact felt on the revenue streams substantially which was cautiously balanced with optimising the expenses. Focused attention was laid to improve the other income sources which helped the Bank to report substantial improvement in its operational efficiency. As a result, the Bank improved its operating profit which ended at Rs.5,034 crores in FY 2018-19 compared to Rs. 3,629 crores recorded in previous year.
Focused attention was laid on Gross NPA reduction which decreased and ended at Rs. 33,398 crores for FY 2018-19 as against Rs. 38,180 crores in FY 2017-18. The higher provision requirements of Rs.8772 crores during the year forced the Bank to report a Net Loss of Rs.3738 crores for the year. The Bank had reported Rs. 6,299 crores of loss during 2017-18.
Income and Expenditure Analysis
The rebalancing of asset side of the Balance sheet had major impact on the revenues of the Bank. Even though, the Bank got benefit from its focused attention on low cost deposit with a favorable Cost of Deposits, the marginal easing under NPA levels & Capital constraints restricted the growth opportunities to improve the income level. Maximum effort was laid on towards improving the Non interest income with higher thrust given on automating charges which has yielded results. It is noteworthy to mention that the Non Interest Income recorded a growth of 12.28% to end at Rs. 4,206 crores as against Rs. 3,746 crores recorded in FY 2017-18.
The domestic CASA deposits stood at Rs. 84,394 crores as on 31st March 2019 as against Rs. 78,739 crores as on 31st March 2018. The CASA% stood higher at 38.72% as on 31st March 2019 as against 37.43% as on 31st Mar 2018.
The higher level of CASA and reduction of the bulk deposits helped the Bank to reduce the domestic Cost of deposits which ended at 5.49% for FY 2018-19 as against 5.62% in FY 2017-18. The yield on domestic advances came down to 7.41% for FY 2018-19 as against 7.91% in the previous year.
The domestic yield on investments stood at 6.97% for the whole year 2018-19 compared to 7.77% in FY 2017-18. The Bank was able to maintain the global Net interest margin at 2.08% in 2018-19 as against 2.19%. The Bank maintained a Provision Coverage Ratio of 70.19% for FY 2018-19 as against 59.45% for FY 2017-18.
Capital Raised during 2018-19
Capital Infusion by Government of India
The Bank issued 137,30,10,821 equity shares of Rs.10/-each for cash at issue price of Rs. 15.71 per equity share (including premium of Rs.5.71 per equity share) aggregating to Rs. 2,157 crores to Government of India on Preferential Basis on 12th November 2018 for the capital infusion received from Government of India on 23rd July 2018 and 269,54,67,422 equity shares of Rs.10/- each for cash at issue price of 14.12 per equity share (including premium of Rs.4.12 per equity share) aggregating to Rs.3,806 crores to Government of India on Preferential Basis on 28th March 2019 for the capital infusion received from Government of India on 21st February 2019.
Employee stock purchase scheme
The Bankâs ESPS was launched for subscription on 31st December 2018 and the Issue was closed on 21st January 2019 as scheduled. The Bank issued and allotted 18,24,00,000 equity shares to its employees at a discounted price of Rs. 11.90 per share. In this process the Bank augmented its capital funds to the extent of Rs. 261 crores. IOB has scripted history by becoming the first public sector Bank to record 100% subscription to Esps. Disclosures required under SEBI (Share Based Employee Benefits) Regulations, 2014 read with SEBI circular no. CIR/CFD/POLICYCELL/2/2015 dated June 16, 2015 are available on the Bankâs website https://www.iob.in/Investor-cell. The IOB ESPS 2018 Scheme is in compliance with the SEBI (Share Based Employee Benefits) Regulations, 2014.
During the year under review, the shareholding of Government of India, has increased from Rs. 4,389.08 crores (89.74%) to Rs. 8,457.56 crores (92.52%) and the Public shareholding stands at Rs.684.09 crores (presently 7.48%). The paid-up capital of the Bank has increased from Rs. 4890.77 crores to Rs. 9141.65 crores.
Raising of Tier II Bonds
During the quarter ended December 2018, the Bank had raised Basel III Compliant Tier II bonds aggregating Rs. 300 crore on private placement basis at a coupon rate of 11.70% with tenor of 10 years from the date of allotment and with call option at the end of the 5th year or on any coupon payment date thereafter. M/s. CRISIL and M/s. ICRA have assigned ratings of CRISIL A /Stable and [ICRA] A (hyb)/ Negative for the Tier II Bonds Issue of the Bank.
Authorized Capital
As on 31st March 2019, the Authorized Capital of the Bank is Rs. 10,000 crores.
Capital Adequacy Ratio
The Bankâs capital adequacy ratio as on 31st March 2019 stood at 10.21 % as per Basel III norms.
Branch Network
The Bank has 3,280 domestic branches as on 31st March 2019 as against 3,332 branches as on 31st March 2018, comprising of 914 rural branches (27.87%), 965 Semi Urban branches (29.42%), 669 Urban branches (20.40%) and 732 Metropolitan branches (22.32%). The Bank also has 7 Zonal Offices, 48 Regional Offices, 3 Extension Counters, 2 Satellite Offices, 3 City Back Offices and 6 Zonal Audit Offices. During the year under review, the Bank has closed 53 branches and opened one branch.
Corporate Governance
Corporate Governance reflects the built in value system of the Bank in conducting its day to day affairs. The Bank recognizes the critical importance of effective Corporate Governance for the safe and sound functioning of the Bank and lays emphasis on ensuring that structures, processes and systems are put in place to establish strategic objectives to serve the interest of the Bank and its stakeholders with a view to facilitate effective monitoring.
IOB - Code of Conduct for Prohibition of Insider Trading, 2019
Pursuant to Regulation 9 of Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, the Bank had formulated IOB Code of Conduct for Prohibition of Insider Trading, 2015, to regulate, monitor and report trading by the Directors, employees and other connected persons of the Bank with a view to comply with the provisions of the Regulations.
In view of the amendments vide SEBI (Prohibition of Insider Trading) (Amendment) Regulations, 2018, the Bank has now formulated IOB Code of Conduct for Prohibition of Insider Trading, 2019 effective from 1st April 2019. The new Code is prescribed to regulate, monitor and report trading by âInsidersâ limited to only âDesignated Personsâ.
SEBI (Listing Obligations and Disclosure Requirements Regulations), 2015 (LODR)
As per SEBI (LODR),
- The Bank is providing remote e-voting facility to its shareholders, in all Annual General Meetings/ Extraordinary General Meetings.
- The Code of Conduct is applicable to all members of the Board and the Senior Management (i.e., General Managers of the Bank).
- The Bank is submitting a quarterly compliance report on Corporate Governance to the Audit Committee of the Board and to BSE & NSE, where the shares of the Bank are listed.
- The Bank is also submitting Quarterly Investor Grievance Report to BSE & NSE.
Investor Education & Protection Fund (IEPF)
As per the guidelines of Ministry of Corporate Affairs (MCA), Government of India, the Bank transferred Unpaid Dividend amount pertaining to the year 2010-11 to IEPF on 7th September 2018. The unpaid dividend data pertaining to the years 2011-12 to 2013-14 is ported in MCA website and is also available at www.iob.in. Accordingly, the Bank has complied with the guidelines of Government of India in respect of transfer of unpaid dividend to IEPF.
Bank is complying with all guidelines/regulations laid down by the Regulatory Authorities and Government of India from time to time. The Bank redresses the shareholders grievances without any delay.
Board of Directors
Shri Vishnukumar Bansal, Additional Director, two yearsâ term ended on 7th August 2018 and Shri Sivaraman Anant Narayan, Non-Official Director, resigned from the Board on 15th November 2018.
Acknowledgement
The Board of Directors are grateful for the valuable guidance and support received from the Government of India, Reserve Bank of India, Securities and Exchange Board of India (SEBI), Stock Exchanges, State Governments, Financial Institutions and all Overseas Regulators. The Board of Directors acknowledge with thanks the valued Customers, Employees Union, Officers Association, domestic and international banking group, the shareholders & other stake holders for their valued support and continued patronage with the Bank.
The Board also wishes to place on record its profound appreciation for the valuable contribution of the Bankâs Staff at all levels and looks forward to their continued involvement with commitment towards achieving the future goals.
For and on behalf of the Board of Directors
Chennai R Subramaniakumar
9th May, 2019 Managing Director & Chief Executive Officer
Mar 31, 2018
DIRECTORSâ REPORT 2017-18
The Board of Directors have pleasure in presenting the Annual Report together with Audited Balance Sheet and Profit & Loss Account of the Bank for the year ended 31st March, 2018.
Global Business Performance
Fiscal year 2017 witnessed a signifi cant improvement in global economic growth and trade situation. However, Geopolitical tensions between US and China was a major cause of concern as strenuous relations between the two could weigh down global trade. India is pegged to be the fastest growing economy in the world in 2017-18 and will be a key driver for global growth. As per the economist reports, the fi rst quarter of the year saw the impact of demonetisation settling down, in the next quarter, introduction of the Goods and Services Tax (GST) brought in some pressures as businesses adjusted to the new regime. However, from the third quarter onwards, signs of growth returning were evident. Private investment activity in India has been weighed down by capacity related issues and firmsâ (especially corporate) stressed balance sheets. Economic growth has been heavily dependent on consumer spending and public investment by the government. However, capital goods output, a proxy for investment activity in the economy, rose for the seventh straight month in February at 20%, the fastest pace in 20 months. Indiaâs retail inflation decelerated for the fourth consecutive month in March to 4.28%. RBI has lowered its inflation forecast for 2018-19 to 4.7%-5.1% in the fi rst half and 4.4% in the second half. The central bank has a mandate of achieving the medium-term target for inflation of 4% within a band of /- 2 percentage points, while supporting growth. The Reserve Bank of India has steadily cut the repo rate from 7.25 per cent in August 2015 to 6 per cent in August 2017. Since then the RBI has held the policy rate steady, with a greater emphasis on reviving domestic growth.
The Bank continued its efforts towards rebalancing its Balance Sheet under the current year. The focus was laid on to improve the RAM portfolio with a view to mitigate the risk and improve capital eff i ciency. The Bank further reduced the concentration of Bulk deposits and improved the share of low cost deposits. The Global Business level stood at Rs. 3,67,831 crores as on 31st March 2018 against Rs. 3,68,118 crores as on 31st March 2017. The global deposits and gross advances stood at Rs. 2,16,832 crores and Rs. 1,50,999 crores respectively as on 31st March 2018 against Rs. 2,11,343 crores and Rs. 1,56,776 crores respectively as on 31st March 2017.
Financial Performance
The efforts during the current year were to improve the operational efficiency as the operating environment remained firm. The right sizing of balance sheet had its impact felt on the revenue streams substantially. Focused attention was laid to improve the income from non-core operations which helped the Bank to maintain its operational eff i ciency. As a result, the Bank maintained its operating profi t which ended at Rs 3,629 crores in FY 2017-18 compared to Rs. 3,650 crores recorded in previous year.
Gross NPA had increased to end at Rs. 38,180 crores for FY 201718 as against Rs. 35,098 crores in FY 2016-17, major fallout of the changes in regulatory guidelines. The resultant higher provision requirements of Rs.9,929 crores during the year forced the Bank to report a Net Loss of Rs.6,299 crores for the year. The Bank had reported Rs. 3,417 crores of loss during 2016-17.
Income and Expenditure Analysis
The rebalancing of asset side of the Balance sheet had major impact on the revenues of the Bank. Even though, the Bank got benefit from its focused attention on low cost deposit with a favorable Cost of Deposits, the NPA levels & Capital constraints restricted the growth opportunities to improve the income level. Maximum effort was laid on towards improving the Non interest income with higher thrust given on automating charges which has yielded results. It is noteworthy to mention that the Non Interest Income recorded a growth of 11.08% to end at Rs. 3,746 crores as against Rs. 3,373 crores recorded in FY 2016-17.
The domestic CASA deposits stood at Rs. 78,739 crores as on 31st March 2018 as against Rs. 75,446 crores as on 31st March 2017. The CASA% stood higher at 37.43% as on 31st March 2018 as against 36.78% as on 31st Mar 2017.
The higher level of CASA and reduction of the bulk deposits helped the Bank to reduce the domestic Cost of deposits which ended at 5.62% for FY 2017-18 as against 6.32% in FY 2016-17. The Bankâs one year MCLR rate which stood at 8.65% as of 1st April 2017 was brought down to 8.40 % during the review period in line with the industry trend. Further, the incremental NPAs also resulted in decline in incomes. As a result, the yield on domestic advances came down to 7.91% for FY 2017-18 as against 8.92% in the previous year.
The domestic yield on investments improved to 7.77% for the whole year 2017-18 compared to 7.36% in 2016-17. The Bank was able to maintain the global Net interest margin at 2.19% in 2017-18 as against 2.03% in 2016 - 17. The Bank maintained a Provision Coverage Ratio of 59.45 % for FY 2017-18 as against 53.63% for FY 2016-17.
Capital Raised during 2017-18
The Bank issued 39,78,30,018 equity shares of Rs.10/- each for cash at issue price of Rs.27.65 per equity share (including premium of Rs.17.65 per equity share) aggregating upto Rs.1,100 crores to Government of India on Preferential Basis on 31.08.2017 for the capital infusion received from Government of India on 16.03.2017 and 203,82,11,029 equity shares of Rs.10/- each for cash at issue price of Rs.23.03 per equity share (including premium of Rs.13.03 per equity share) aggregating upto Rs.4,694 crores to Government of India on Preferential Basis on 28.03.2018. Hence, the paid-up capital of the Bank has increased from Rs.2,454.73 crores to Rs. 4,890.77 crores. The shareholding of Government of India, has increased from Rs.1,953.04 crores (79.56%) to Rs.4,389.08 crores (89.74%) and the Public shareholding stood at Rs.501.69 crores (presently 10.26%).
Set off of Share Premium Account as on 31.03.2017 as against the accumulated losses as on 31.03.2017
The Bank had, after obtaining the approval of the shareholders by way of a Special Resolution at the EGM held on 30.01.2018 for utilizing the balance available in the Share Premium account as at 31.03.2017 to set off the accumulated losses as at 31.03.2017, so as to present a true and fair picture of the state of affairs of the Bank, utilised an amount of Rs.6,978.94 crores out of an amount of Rs. 7,650.06 crores standing to the credit of Share Premium account as at 31.03.2017 to set off the accumulated losses of Rs. 6,978.94 crores as at 31.03.2017 and the Share Premium account and accumulated losses stand reduced accordingly. Authorised Capital
As on 31st March 2018, the Authorized Capital of the Bank is Rs. 10,000 crores which was increased from Rs.3000 crores vide GOI notification dated 27th Feb 2017.
Capital Adequacy Ratio
The Bankâs capital adequacy ratio as on 31st March 2018 stood at 9.25 % as per Basel III norms.
Branch Network
As on 31st March 2018, the Bank had 3,332 domestic branches, as against 3,373 branches as on 31st March 2017, comprising of 922 rural branches (27.67%), 990 Semi Urban branches (29.71%), 678 Urban branches (20.35%) and 742 Metropolitan branches (22.27%). Besides, the Bank has 7 Zonal Off ces, 48 Regional Off ces, 4 Extension Counters, 20 Satellite Off ces, 3 City Back Off ces and 6 Inspectorates. During the year under review, the Bank has closed 41 branches and one Regional Off ce with a view to rationalize administrative costs.
Corporate Governance
Corporate Governance ref I ects the built in value system of the Bank in conducting its day to day affairs. The Bank recognizes the critical importance of effective Corporate Governance for the safe and sound functioning of the Bank and lays emphasis on ensuring that structures, processes and systems are put in place to establish strategic objectives to serve the interest of the Bank and its stakeholders and which also facilitate effective monitoring. IOB - Code of Conduct for Prohibition of Insider Trading, 2015
Pursuant to Regulation 9 of Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, the Bank has formulated IOB Code of Conduct for Prohibition of Insider Trading, 2015, to regulate, monitor and report trading by the Directors, employees and other connected persons of the Bank with a view to comply with the provisions of the Regulations. Securities and Exchange Board of India - Listing Obligations and Disclosure Requirements Regulations, 2015 (LODR)
As per SEBI (LODR),
- The Bank is providing remote e-voting facility to its shareholders, in all Annual General Meetings/ Extraordinary General Meetings.
- The Code of Conduct is applicable to all members of the Board and the Senior Management (i.e., General Managers of the Bank).
- The Bank is submitting a quarterly compliance report on Corporate Governance to the Audit Committee of the Board and to BSE & NSE, where the shares of the Bank are listed.
- The Bank is also submitting Quarterly Investor Grievance Report to BSE & NSE.
Investor Education & Protection Fund (IEPF)
As per the guidelines of Ministry of Corporate Affairs (MCA), Government of India, the Bank transferred Unpaid Dividend amount pertaining to the year 2009-10 to IEPF on 27.10.2017. The unpaid dividend data pertaining to the years 2010-11 to 2013-14 is ported in MCA website and is also available at www. iob.in. Accordingly, the Bank has complied with the guidelines of Government of India in respect of transfer of unpaid dividend to IEPF.
Bank is complying with all guidelines/regulations laid down by the Regulatory Authorities and Government of India from time to time. The Bank redresses the shareholdersâ grievances without any delay.
Board of Directors
Shri Niranjan Kumar Agarwal, Shareholder Director, completed his three yearsâ term on 07.12.2017. Shri Sanjay Rungta, Shareholder Director, completed his three yearsâ term on 07.12.2017.
Shri R. Subramaniakumar has been appointed as Managing Director & Chief Executive Officer of the Bank from 05.05.2017 to 30.06.2019. Previously, he was appointed as Executive Director with effect from 29.09.2016. He was entrusted with the additional charge of MD & CEO for a period of 3 months from 11th November 2016 to 10th February 2017 and for a period of another 3 months from 28th February 2017 to 27th May 2017. Shri Ajay Kumar Srivastava has been appointed as Executive Director of the Bank from 09.10.2017 to 08.10.2020. Shri Sanjay Rungta has been re-elected as Shareholder Director of the Bank from 08.12.2017 to 07.12.2020. Shri Navin Prakash Sinha has been elected as Shareholder Director of the Bank from 08.12.2017 to 07.12.2020. Shri Sivaraman Anant Narayan has been appointed as NonOfficial Director of the Bank from 27.12.2017 to 26.12.2020.
Acknowledgement
The Board of Directors are grateful for the valuable guidance and support received from the Government of India, Reserve Bank of India, Securities and Exchange Board of India (SEBI), Stock Exchanges, State Governments, Financial Institutions and all Overseas Regulators. The Board of Directors acknowledge with thanks the valued Customers, Employees Union, Officers Association, domestic and international banking group, the shareholders & other stake holders for their valued support and continued patronage with the Bank.
The Board also wishes to place on record its profound appreciation for the valuable contribution of the Bankâs Staff at all levels and looks forward to their continued involvement with commitment towards achieving the future goals.
For and on behalf of the Board of Directors
Chennai (R. SUBRAMANIAKUMAR)
29th May, 2018 Managing Director & Chief Executive Officer
Mar 31, 2017
The Board of Directors has pleasure in presenting the Annual Report together with Audited Balance Sheet and Profit & Loss Account of the Bank for the year ended 31st March, 2017.
Global Business Performance
The Indian economy is growing strongly and remains a bright spot in the global landscape. The halving of global oil prices that began in late 2014 boosted economic activity in India, further improved the external current account and fiscal positions, and helped lower inflation. In addition, continued fiscal consolidation, by reducing government deficits and debt accumulation, and an anti-inflationary monetary policy stance have helped cement macroeconomic stability.
The government has made significant progress on important economic reforms, which will support strong and sustainable growth going forward. In particular, the upcoming implementation of the goods and services tax, which has been in the making for over a decade, will help raise Indiaâs medium-term growth to above 8 percent, as it will enhance the efficiency of production and movement of goods and services across Indian states. However, a key concern for India is the health of the banking system, which is still dealing with a large amount of bad loans, and also heightened corporate vulnerabilities in several key sectors of the economy.
As a result, the Bank continued its efforts towards rebalancing its Balance Sheet under review year also. The Bank reduced the concentration of Bulk deposits and stayed away from large scale lending during the year. As a result, the Global Business level stood at Rs.3,68,118 crore as on 31st March 2017 against Rs. 3,97,241 crore as on 31st March 2016. The global deposits and gross advances stood at Rs.2,11,343 crore and Rs.1,56,776 crore respectively as on 31st March 2017 against Rs. 2,24,514 crore and Rs. 1,72,727 crore respectively as on 31st March 2016. The demonetization gave much needed boost to the low cost deposit profile of the Bank. The Bank also went ahead with reducing the dependence on bulk deposits to reduce the concentration risk and to have a stable deposit profile. The larger focus lied towards curtailing the NPAs with concerted efforts towards containing the fresh slippages level along with recoveries from the existing NPAs. The Banks new CBS platform has been stabilized and is currently poised towards leveraging the benefits of the new software version.
Financial Performance
The overall efficiency of the Bank has seen substantial improvement during the year under review. This has helped the Bank to report a higher global operating profit of Rs.3,650 crore in 2016-17 compared to Rs.2,885 crore in 2015-16. It may also be noted that the higher level of efficiency has been obtained with a rebalanced business levels in comparison to previous years. Even though the gross NPA level has increased over the year, the growth % has been substantially brought down in comparison to the previous year. The Gross NPAs stood at Rs.35,098 crore for March 2017 as against Rs. 30,049 crore in March 2016. The resultant higher provision requirement of Rs.7,067 crore during the year forced the Bank to report a Net Loss of Rs.3,417 crore for the year. The Bank had reported Rs. 2,897 crore of loss during 2015-16.
Income and Expenditure Analysis
The year under review focused mainly on efficiency in operations and had put in place various strategies towards cost reduction at all levels. The Bank continued its efforts to reduce the bulk deposits contain fresh slippages, reduce the administrative expenses.
The domestic CASA deposits stood at Rs.75,446 crore as on 31st March 2017 as against Rs. 63,609 crore as on 31st March 2016. The CASA% stood higher at 36.78 % as on 31st March 2017 as against 29.10% as on 31st March 2016.
The higher level of CASA and reduction of the bulk deposits helped the Bank to reduce the domestic Cost of deposits which ended at 6.32% for FY 2016-17 as against 7.28% in FY 2015-16. RBI had reduced Repo rates by 50 basis points during the period under review which also helped in reducing the card rates in a gradual manner.
The Bankâs one year MCLR rate which stood at 9.70% as of 1st April 2016 was brought down to 8.65 % during the review period in line with the industry trend. Further, the incremental NPAs had higher impact on the revenues. As a result of the above factors, the yield on domestic advances came down to 8.92% for FY 2016-17 as against 9.87% in the previous year.
The domestic yield on investments was maintained at 7.36% for the whole year 2016-17 compared to 7.41% in 2015-16. The Bank was able to maintain the global Net interest margin reasonably at 2.03% in 2016-17 as against 1.94%. The Bank maintained a Provision Coverage Ratio of 53.63 % for FY 2016-17 as against 47.39% for FY 2015-16.
Capital Raised during 2016-17
The Bank issued 9,17,48,448 equity shares of Rs.10/- each for cash at issue price of Rs.28.55 per equity share (including premium of Rs.18.55 per equity share) aggregating up to Rs.261.94 crore on QIP basis and 55,57,14,797 equity shares of Rs.10/- each for cash at issue price of Rs.27.91 per equity share (including premium of Rs.17.91 per equity share) aggregating upto Rs.1,551 crore to Government of India on Preferential Basis. Hence, the paid up capital of the Bank has increased from Rs.1807.27 crore to Rs. 2454.73 crore. Government of Indiaâs shareholding has increased from Rs.1397.33 crore (77.32%) to Rs.1953.04 crore (79.56%) and the Public Shareholding stood at Rs.501.69 crore (20.44%).
Authorized Capital
As on 31st March 2017, the Authorized Capital of the Bank is Rs.10,000 crore which was increased from Rs.3000 crore vide GOI notification dated 27th Feb 2017.
Capital Adequacy Ratio
The Bankâs capital adequacy ratio as on 31st March 2017 stood at 10.50 % as per Basel III norms.
Branch Network
During the year under review, the Bank opened 9 branches across the country. Out of these, 5 branches (55.55%) are located in Rural and Semi Urban centres, of which 3 branches are located in Unbanked Rural centres.
As on 31st March 2017, the Bank had 3,373 domestic branches, as against 3,397 branches as on 31st March 2016, comprising of 922 rural branches (27.33%), 1001 Semi Urban branches (29.67%), 692 Urban branches (20.51%) and 758 Metropolitan branches (22.47%). Besides, the Bank has 7 Zonal Offices, 49 Regional Offices, 4 Extension Counters, 20 Satellite Offices, 3 City Back Offices, 18 MSME Processing Centres and 6 Inspectorates. During the year under review, the Bank has closed 33 branches with a view to rationalize administrative costs.
Corporate Governance
Corporate Governance reflects the built in value system of the Bank in conducting its day to day affairs. The Bank lays emphasis on ensuring that, structures and processes are put in place to help in compliance of the government responsibilities.
IOB - Code of Conduct for Prohibition of Insider Trading, 2015
IOB Code of Conduct for Prohibition of Insider Trading, 2015 regulates monitors and report trading by the designated persons of the Bank.
Securities and Exchange Board of India - Listing Obligations and Disclosure Requirements Regulations, 2015 (LODR)
As per SEBI (LODR),
- The Bank is providing remote e-voting facility to its shareholders, in all Annual General Meetings/ Extraordinary General Meetings
- The code of conduct is applicable to all members of the Board and the Senior Management (i.e., General Managers of the Bank).
- The Bank is also submitting a quarterly compliance report on Corporate Governance to the Audit Committee of the Board and to Stock Exchanges.
- The Bank is submitting Quarterly Investor Grievance Report to the BSE Limited and National Stock Exchange Limited, where Bankâs shares are listed.
Investor Education & Protection Fund (IEPF)
Ministry of Corporate Affairs (MCA), Government of India has advised the Bank the process of transfer of unpaid dividend amount to the Central Government. Accordingly, Unpaid Dividend amount pertaining to 2008-09 has been transferred to IEPF by the Bank on 5th August 2016 and complied with the Government of India guidelines. The unpaid Dividend data pertaining to the years 2009-10 to 2013-14 is ported in MCA website and is also available at www.iob.in.
Bank is complying with all guidelines/regulations laid down by Regulatory authorities and Government of India. Bank regularly redresses the shareholders grievances without any time delay.
Board of Directors
Dr. Jai Deo Sharma, Officer Employee Director completed his three year term on 1st May 2016. Shri R.Koteeswaran, Managing Director & Chief Executive Officer retired on attaining superannuation on 30th June 2016. Dr.Alok Pande, Govt. Nominee Director demitted office on 21st July 2016. Shri Pawan Kumar Bajaj, Executive Director demitted office on 9th August 2016. Shri Atul Agarwal, Executive Director, retired on superannuation on 30th Sept 2016. Shri Chinnaiah, Smt. S.Sujatha and Shri A.B.D.Badushas, Parttime Non- Official Directors completed their three year terms on 12th Nov 2016, 4th Dec 2016 and 11th Dec 2016 respectively. Shri R. Sampath Kumar, Workmen Employee Director, completed his three year term on 23rd Jan 2017.
Ms.Annie George Mathew has been nominated as Government Nominee Director with effect from 22nd July 2016. Shri K.Raghu, has been nominated as Chartered Accountant Director for a period of three years from 26th July 2016 to 25th July 2019. Shri Vishnukumar Bansal, has been appointed as Additional Director from 8th August 2016 to 7th August 2018. Shri R. Subramaniakumar has been appointed as Executive Director of the Bank from 29th September 2016 to 21st Jan 2019. He has been entrusted the additional charge of MD & CEO for a period of 3 months from 11th November 2016 to 10th February 2017 and for a period of another 3 months from 28th February 2017 to 27th May 2017. Shri T.C.A. Ranganathan has been appointed as Non Executive Chairman from 16th Feb 2017 to 15th Feb 2020. Shri K. Swaminathan, has been appointed as Executive Director of the Bank from 17th Feb 2017 to 16th Feb 2020.
The Board of Directors places on record their appreciation for the valuable contributions made by the erstwhile Directors and welcomes the new Directors.
Acknowledgement
The Board of Directors are grateful for the valuable guidance and support received from the Government of India, Reserve Bank of India, Securities and Exchange Board of India (SEBI), Stock Exchanges, State Governments, Financial Institutions and all Overseas Regulators. The Board of Directors acknowledge with thanks the valued Customers, Employees Union, Officers Association, domestic and international banking group, the shareholders & other stake holders for their valued support and continued patronage with the Bank.
The Board also wishes to place on record its profound appreciation for the valuable contribution of the Bankâs Staff at all levels and looks forward to their continued involvement with commitment towards achieving the future goals.
For and on behalf of the Board of Directors
Chennai (R. SUBRAMANIAKUMAR)
17th May, 2017 Managing Director & Chief Executive Officer
Mar 31, 2015
Dear Members,
The Board of Directors has pleasure in presenting the Annual Report
together with Audited Balance Sheet and Profit & Loss Account of the
Bank for the year ended 31st March, 2015.
Global Business Performance
The Bank has improved its Business Mix quite significantly in the last
few years which has formed a strong base for future prospects. The
business level of the Bank has reached Rs. 4,25,090 crores by March 2015
as against Rs. 4,09,051 crores in March 2014 with Balance sheet total
size comprising of all assets mainly including Advances and Investments
to the tune of Rs. 2,85,637 crores during the year. The Bank has larger
scope in improving the potential with wide spread 3381 branches in all
the states of the country. The Bank has decided to migrate to a new CBS
model and be aligned with a common platform as being widely used in
other PSBs. The technological advancement will work as a morale booster
for the Bank to effectively deliver and enhance the customer service.
This is a remarkable & significant task which the Bank has scheduled to
achieve in a phased manner.
The year 2014-15 has been more challenging for the Bank as a whole.
There was a sluggish growth in the credit front. Accordingly, the
Bank''s total deposits increased from Rs. 2,27,976 crores in March 2014 to
Rs. 2,46,049 crores in March 2015 with a moderate growth of 8%. The
global advances stood at Rs. 1,79,041 crores as of 31st March 2015. The
domestic advances increased marginally from Rs. 1,61,992 crores in March
2014 to Rs. 1,62,838 crores in March 2015.
Financial Performance
The global operating profit has stood at Rs. 3,322 crores in 2014-15
compared to Rs. 3,997 crores in 2013-14 mainly due to constraints on
interest spread during this financial year. However, the performance of
the Bank in Q4 is significant resulting into a positive turnaround by
achieving a net profit of Rs. 35.5 crores as against off-putting results
in the preceding two quarters. As the Bank has to make bottom line
provisions to the tune of Rs. 3,777 crores constituting 113% of total
operating profit. However, the net loss for the whole year 2014-15 has
come down to Rs. 454 crores as against Rs. 490 crores for the period
April-December 2014.
Income and Expenditure Analysis
The year 2014-15 has been more challenging as far as the Bank''s
profitability is concerned. Despite the constraints on interest spread
the Bank has made a successful turnaround during the fourth quarter
2014-15 registering a net profit of Rs. 35 crores in Q4. This is made
possible mainly on account of larger recoveries, containment of
operating expenses, more control on funding costs apart from
substantial treasury gains mainly in the fourth Quarter.
The Bank has taken serious measures in controlling the cost of domestic
deposits to 7.68% in Q4 as against 7.93% in Q1,7.94% in Q2 and 7.81% in
Q3 during the year. However, the overall domestic cost of deposits
ended with 7.84% for FY 2014-15 compared to 7.81% in 2013-14. The Bank
has been maintaining the card rates on term deposits in line with the
market trend. As RBI reduced the repo rates favorably by overall 50
basis points in the second half of the financial year to the present
level of 7.50%, the Bank is able to reduce Its domestic cost of
borrowings marginally to 9.64% for the year as a whole as against 9.65%
in 2013-14. As such, the domestic cost of funds ended favorably at
7.92% for the full year 2014-15 compared to 8.03% in Q1,8.02% in Q2,
7.88% in Q3 and 7.73% in Q4. This can be attributed to efficient ALM
techniques which resulted in substantial growth in Bank''s average
retail term deposits apart from reducing average bulk deposits
excluding high cost deposits.
Although, the Bank has opened around 52 lacs CASA accounts during the
year under review, the quantum of CASA deposit would stimulate only
over a period. As such, domestic average CASA% was marginally lower at
23.71% compared to last year level of 24.25%, in line with the market
trend.
Due to higher incremental NPAs during the year, the yield on domestic
advances has come down to 10.62% as against 10.95% in last year.
Despite volatile market conditions, the yield on investments was
maintained at 7.38% for the whole year 2014-15 compared to 7.39% in
2013-14. This has a major impact on Net Interest Income affecting the
profitability. However, the Bank has been able to maintain the global
Net interest margin reasonably at 2.06% in 2014-15. Also the Bank has
maintained a comfortable Provision Coverage Ratio of 50.92% in March
2015.
Capital Adequacy Ratio
The Bank''s Capital Adequacy Ratio as on 31st March 2015 has stood at
10.11% as per Basel III norms. The Bank has issued Unsecured, Non
Convertible, Additional Tier I, Basel III Compliant Perpetual Bonds to
the extent of Rs. 1,000 crores including the green shoe option of Rs. 300
crores to augment additional Tier-I capital and overall capital of the
Bank. The entire issue was fully subscribed by the investors.
Branch Network
During the year under review, the Bank has opened 116 branches across
the country. Out of these, 86 branches (74.14%) are located in Rural
and Semi Urban centres, of which 28 branches are located in Unbanked
Rural Centres. These new branches have enabled the Bank to enhance new
relationship and spread Bank''s Network covering all states.
Further, the Bank has opened 8 Rapid Retail Centres, one City Back
office and one extension counter during the year. As on 31st March
2015, the Bank has 3,381 domestic branches, as against 3,265 branches
as on 31st March 2014, comprising of 1028 rural branches (30.41%), 947
Semi Urban branches (28.00%), 747 Urban branches (22.09%) and 659
Metropolitan branches (19.49%). Besides, the Bank has 7 Zonal Offices,
59 Regional Offices, 4 Extension Counters, 20 Satellite Offices, 40
City Back Offices, 41 Rapid Retail centers (RLPCs), 18 MSME Processing
Centres and 6 Inspectorates.
Corporate Governance
Corporate Governance reflects the built in value system of the Bank in
conducting its day to day affairs. The Bank lays emphasis on the need
for ensuring that structures and processes are put in place to help in
compliance of its government responsibilities.
During the year, SEBI has decided to review the provisions of the
Listing Agreement with the objectives to adopt best practices on
corporate governance and to make the corporate governance framework
more effective. Clause 35B and Clause 49 of the Listing agreements are
the main clauses amended. As per Clause 35B, the issuer agrees to
provide E-voting facility to its shareholders in respect of all
shareholders resolutions, to be passed at AGM/ EGM. Bank is in
preparedness to provide e-voting facility to its shareholders at the
time of AGM/EGM.
In compliance to the amendments of Clause 49 of the Listing Agreement,
the code of conduct has been put in place by the Bank which is
applicable to all members of the Board and the Senior Management (i.e
upto General Managers of the Bank). The Bank is also submitting a
quarterly compliance report on Corporate Governance to The Audit
Committee of the Board and to Stock Exchanges.
Ministry of Corporate Affairs (MCA), Government of India has amended
the Investor Education and Protection Fund (IEPF) Rules and advised the
Bank the process of transfer of unpaid dividend amount to the Central
Government. Accordingly, Unpaid Dividend amount pertaining to the years
from 2000-01 to 2006-07 has been transferred to IEPF by the Bank and
complied with the Government of India guidelines. The unpaid Dividend
data pertaining to the years 2007-08 to 2013-14 is ported in MCA
website and also available at www.iob.in.
Bank is complying with all guidelines/regulations laid down by
Regulatory authorities and Government of India. Bank regularly
redresses the shareholders grievances without any time delay.
Vision-Mission: 2013-2020
With the changing dynamics in the competitive environment, the Bank has
reviewed its medium term Vision-Mission outlook for the period 2013 -
2020. The Bank has convened an exclusive meeting of the Board of
Directors to discuss the Strategic Business Plan for the next year
2015-16 covering all the key aspects. Frame work analysis has been laid
down in terms of growth in business, capital and profitability in the
years to come. The Bank expects that the targets be well achieved with
the support of migration to new CBS.
Board of Directors
Shri. M. Narendra, Chairman and Managing Director retired on
superannuation on 31st July 2014 followed by Shri. A.D.M. Chavali,
Executive Director on 31st October 2014. Shri. Niranjan Kumar Agarwal,
Director (nominated under Section 9 (3) (g) - Chartered Accountant
Category) had completed his 3 year term on 31st October 2014 and ceased
to be Director. Shri. Ajit Vasant Sardesai and Prof. S. Sadagopan,
Shareholder Directors had completed their 3 year term on 7th December
2014 and ceased to be Directors.
Shri. Niranjan Kumar Agarwal and Shri. Sanjay Rungta have been elected
as Shareholder Directors for a period of 3 years from 8th December 2014
to 7th December 2017. Shri. R. Koteeswaran has been appointed as
Managing Director and Chief Executive Officer of the Bank from 31st
December 2014 to 30th June 2016. Shri. Pawan Kumar Bajaj has been
appointed as Executive Director from 10th March 2015 to 30th September
2018.
The Board of Directors places on record their appreciation for the
valuable contributions made by the erstwhile Directors and welcomes the
new Directors.
Acknowledgement
The Board of Directors are grateful for the valuable guidance and
support received from the Government of India, Reserve Bank of India,
Securities and Exchange Board of India (SEBI), Stock Exchanges, State
Governments, Financial Institutions and all Overseas Regulators. The
Board of Directors acknowledge with thanks to the valued Customers,
Employees Union, Officers Association, domestic and international
banking group, the shareholders & other stake holders for their valued
support, continued patronage with the Bank.
The Board also wishes to place on record its profound appreciation for
the valuable contribution of the Bank''s Staff at all levels and look
forward to their continued involvement with commitment towards
achieving the future goals.
For and on behalf of the Board of Directors
Chennai (R. KOTEESWARAN)
May 8, 2015 Managing Director & Chief Executive Officer
Mar 31, 2014
The Board of Directors have pleasure in presenting the Annual Report
together with audited Balance Sheet and Profit & Loss Account of the
Bank for the year ended 31st March, 2014.
Global Business Performance
It is a matter of pride that the Bank has made a significant growth in
Business Mix during the last 3½ years (business almost doubled) with a
CAGR growth of 21.64%, which forms a strong base for future prospects.
The business level of the Bank now crossed Rs.4,00,000 crores mark.
During the same period, the Bank has opened more than 1,200 branches
and crossed the milestone of 3,000 branches taking the domestic branch
network to 3,265 as of 31st March 2014. This is a remarkable
achievement ever made in the history of the Bank.
During the year 2013-14, there was a sluggish growth in the credit
front due to slowdown in the economy as a whole. Accordingly, the
Bank''s total deposits increased from Rs.2,02,135 crores in March 2013
to Rs.2,27,976 crores in March 2014 with a moderate growth of 12.78%.
The total advances increased to Rs.1,81,081 crores with a growth of
10.17% from the last year level of Rs.1,64,366 crores. In terms of
business mix, the Bank has been maintaining its 7th position among all
the 19 nationalized banks since 2011. The market share is maintained at
2.67% for the year as a whole.
Financial Performance
The global operating profit marginally increased to Rs.3,997 crores in
2013-14 compared to Rs.3,817 crores in 2012-13. As the constraints on
provisions continued during this financial year also, the Bank has to
make higher provisions to a sum of Rs.3,395 crores constituting 85% of
total operating profit. As a result, the Bank has posted Rs.602 crores
Net Profit in 2013- 14 with a marginal growth of 6.2% compared to Rs.
567 crores in 2012-13. The Bank has already paid an interim dividend of
7% in February 2014. As a whole, the Bank has proposed to pay a total
dividend of 12% for the whole year 2013-14.
Income and Expenditure Analysis
In the domestic front, during 2013-14, the cost of deposits was
maintained at 7.81% compared to 7.80% in last year. This was possible
despite the fact that the average domestic CASA has come down to 24.25%
compared to last year level of 24.78% domestically. The Bank was
maintaining the card rates on term deposits in line with the market
trend. There was a moderate increase in card rates on term deposits
also. The growth in average core term deposit was significant at 39%
which had offset the impact of the above 0.53% CASA reduction. Though
the Bank has opened around 38 lakhs CASA accounts during the year
2013-14, those CASA accounts will generate more volume in CASA only
over a period of time.
There was a reduction in base rate by overall 50 basis points with
effect from February 2013. As about 80% of total advances are linked to
Bank''s base rate, there was an adverse impact on interest earnings to
the tune of Rs.600 crores affecting the Bank''s core operating profit as
well as Net Interest Margin for the year under review. However, the
Bank was able to maintain the incremental yield apart from substantial
recoveries. Hence, the domestic yield on advances stood at 10.95% when
compared to 11.26% last year. As such, the global yield on advances for
the year 2013- 14 stood at 10.04% compared to 10.34% in last year.
Despite volatile market conditions, the yield on investments was steady
at 7.39% for the whole year 2013-14 compared to 7.37% in 2012-13.
However, the domestic cost of borrowings increased to 9.65% in the
period under review when compared to 9.17% last year mainly due to
increase in repo rate to the present level of 8% compared to 7.50%
earlier, Also, Bank rate & MSF increased to 9 % compared to 8.50% last
year. As a result, the domestic cost of funds increased to 7.93% in
2013-14 compared to 7.90% in 2012-13. Apart from this, the constraints
on Net Interest Margin continued with incremental NPAs and interest
reversal on restructured advances. With this, the Bank maintained the
NIM at 2.34% domestically and 2.28% globally for the year 2013-14.
Capital Adequacy Ratio
The Bank''s Capital Adequacy Ratio as on 31st March 2014 stood at 10.78%
as per Basel III norms. The Bank has issued 22,97,53,015 Equity Shares,
of face value Rs.10/- each, at the rate of Rs.52.23 per equity share
(including premium of Rs.42.23 per equity share) amounting to Rs.1200
crores to Government of India on Preferential Basis and 8,15,00,000
Equity shares, of face value Rs.10/- each, at the rate of Rs.48.84 per
equity share (including premium of Rs.38.84 per equity share)
aggregating to Rs.398.05 crores to LIC of India on Preferential Basis.
Hence, the Paid-up Capital of the Bank has increased from Rs.924.10
crores to Rs.1235.35 crores and Government of India''s shareholding has
increased from Rs.681.96 crores (73.80%) to Rs.911.71 crores (73.80%),
retaining their holding level at 73.80% as on 31st March 2014.
Branch Network
Rapid branch expansion continues to be one of the strategic initiatives
taken by the Bank for augmenting its pan India branch net work and
organic growth. During the year under review, the Bank opened 363
branches across the country. Out of 363 branches opened during
2013-14, 232 branches (63.91%) are located in Rural and Semi Urban
centres, of which 98 branches are located in Unbanked Rural Centres.
These new branches have enabled the Bank to enhance new relationships
and spread our presence and net work farther and wider now covering all
states. The average CASA in the new branches is about 45%.
In order to decentralize the decision making process and reduce the
turnaround time for credit delivery, the Bank opened 19 Rapid Retail
Centres, 9 MSME Processing Centres and 8 City Back Offices during the
year. As on 31st March 2014, the Bank had 3,265 domestic branches, as
against 2,902 branches as on 31st March 2013, comprising of 985 rural
branches (30.17% to total branches), 904 Semi Urban branches (27.68%),
728 Urban branches (22.30 %) and 648 Metropolitan branches (19.85%). In
addition, the Bank has 7 National Banking General Managers Offices, 59
Regional Offices, 3 Extension Counters, 20 Satellite Offices, 39 City
Back Offices, 33 Rapid Retail centers (RLPCs), 18 MSME Processing
Centres and 6 Inspectorates.
Corporate Governance
Corporate Governance refers to the system by which organizations are
directed and controlled. The governance structure specifies the
distribution of rights and responsibilities among different
participants in the organisation such as the Board of Directors,
Managers, Shareholders, Creditors, Auditors, regulators and other
stakeholders and specifies the rules and procedures for making
decisions in corporate affairs.
Bank''s Corporate Governance Practices are based on total commitment to
ethical practices in the conduct of business, striving hard to enhance
all stakeholders'' value, maintaining a high degree of disclosure levels
and adhering to the Laws and Regulations. Bank has complied with the
guidelines of the regulators and the same has been examined by the
Statutory Central Auditors. The Bank follows a well-defined Code of
Conduct, which fairly addresses the issues of integrity, conflict of
interest and confidentiality and stresses the need of ethical conduct,
which is the basis of good Governance. This code of conduct as
approved by our Board is applicable to all the members of the Board and
the Senior Management (i.e. up to General Managers of the Bank).
Bank is complying with all the norms laid down by Regulatory
Authorities and Government of India. A compliance Officer under Clause
47 of the Listing Agreement is appointed to oversee the compliance with
various provisions of SEBI and the Listing Agreement entered with the
Stock Exchanges, where the Bank''s shares are listed. The Bank is also
submitting a quarterly compliance report on Corporate Governance in
compliance of Clause 49 of the Listing Agreement besides putting up the
same to Audit Committee of the Board for their information. Bank also
ensures that all the shareholders'' complaints are duly resolved then
and there.
Vision-Mission: 2013-2020
Taking in to consideration the changing dynamics in the competitive
environment, the Bank formulated its medium term Vision-Mission outlook
for the period 2013 - 2020.
The Bank convened a Business Plan Conference at Chennai on 4th & 5th
April 2013, The Business Plan Conference was followed by a Business
Plan Review Conference on 6th & 7th November 2013. The Bank also
convened an exclusive meeting of the Board of Directors on 14th March
2014 to discuss the Strategic Business Plan including products &
markets, Innovation in Business and e-governance.
Awards & Accolades
- Bank won the Platinum Award for the category "Training Excellence HR
Award" for the year 2011-12 from the Greentech Foundation, New Delhi.
- Bank won IPE BFSI Awards 2013 under three categories namely Best Bank
in PSU Sector, Best Bank in Rural Outreach and Best CSR.
- Bank has been accorded as the Best Public Sector Bank under Priority
Sector lending in Dun & Bradstreet - Polaris Financial Technology
Banking Awards 2013.
- Bank has won the Skoch Awards 2013 - for High Availability of WAN and
Paperless Board.
- Bank has won The Sunday Standard Best Bankers Awards 2013 under three
categories namely Best Indian Bank - Large, Best Public Sector Bank -
Large and Best Public Sector Bank - Customer Orientation.
- Bank was declared Runner up in the ASSOCHAM''s Social Banking
Excellence Awards 2013.
- Bank won Development Leadership Award 2013 under Agriculture
Leadership Awards.
- Bank won National Award for the in-house Magazine in Hindi for
2012-13 - First Prize under "C" Category.
- Bank was nominated as winner of FIPS Awards 2013 for the project of
integration of Payment Gateway.
- 2 RSETIs were awarded "AA" ranking and 3 RSETIs were awarded "A"
ranking in RSETI Awards.
- CIMSME gave the Bank "MSME Banking Excellence
Award 2013" in three categories namely Financial Inclusion Award, Jury
Award for New Initiatives & MSME Excellence Award (Runner up)
- Bank was adjudged as the First Runner Up in the category of "Best Use
of Business Intelligence" among Public Sector Banks in IBA Banking
Technology Awards 2012-13 by Indian Banks Association.
- Public Relations Council of India in their Collateral Awards 2013
declared Bank winner for Wall Calendar and CSR Initiatives.
- Tamil Nadu Government declared the Bank as the Best Bank Award for
Excellence in Credit Linking Self Help Groups for 2011-12.
- Bank won National Award for Outstanding Performance in Implementing
PMEGP in South Zone level for 2012-13.
- India Business Journal''s IBJ Business Excellence Award 2013 -
Customer Focus Award.
Board of Directors
Shri A.K.Bansal, Executive Director who retired on superannuation on
31st May 2013 ceased to be Director. Shri Atul Agarwal joined the Bank
as Executive Director on 27th September 2013. Shri J. D. Sharma has
been nominated as Officer Employee Director on 2nd May 2013. Shri
Chinnaiah has been nominated as Part time Non Official Director on 13th
November 2013. Smt. Sujatha has been nominated as Part time Non
Official Director on 5th December 2013. Shri A.B.D.Badushas has been
nominated as Part time Non Official Director on 12th December 2013.
Shri S.L.Lakhotia, Workmen Employee Director, ceased to be Director on
completion of his 3 years term on 8th August 2013. Shri R. Sampath
Kumar has been nominated as Workmen Employee Director on 24th January
2014. Shri S.V Raghavan, RBI Nominee Director, demitted office on 12th
March 2014. Shri Nirmal Chand has been nominated as RBI Nominee
Director on 13th March 2014. The Board of Directors places on record
their appreciation for the valuable contributions made by the erstwhile
Directors and welcome the new Directors.
Acknowledgement
The Board of Directors acknowledge with gratitude, the valuable
guidance received from the Government of India, Reserve Bank of India,
Securities and Exchange Board of India (SEBI), Stock Exchanges, State
Governments, Financial Institutions& Overseas Regulators. The Board of
Directors is thankful to the valued Customers, Employees Union,
Officers Association, its domestic and international banking community,
the shareholders & other stake holders for their valued support,
continued patronage and confidence exhibited with the Bank.
The Board also wishes to place on record its deep appreciation for the
valuable contribution of the Bank''s Staff at all level and look forward
to their continued involvement and spirited team effort towards
achieving the future goals.
For and on behalf of the Board of Directors
Chennai M. NARENDRA
April 29, 2014 Chairman and Managing Director
Mar 31, 2013
The Board of Directors have great pleasure in presenting the Annual
Report together with audited Balance Sheet and Profit & Loss Account of
the Bank for the year ended March 31, 2013. Indian Overseas Bank
developed as a major business growth centre maintaining the 7th Rank
among the list of 19 nationalised banks. The banks growth in business
during the year 2012-13 was more comfortable at 13.92% which helped the
bank to significantly improve the market business share from 2.71% in
last fortnight March 2012 to 2.74% in the ending fortnight of March
2013. The bank also reached yet another mile stone of Rs. 3,50,000
crores Business in the current fiscal. The new slogan "Touching
Hearts, Spreading Smiles" has created greater enthusiasm in the
organization inducing more vibrancy on the staff & customer clientele.
The Bank continued its commitment towards financial inclusion in
creating more depth in the rural market. Today, Indian Overseas Bank is
proud of its country wide presence with 2902 branches and 1883 ATM
Centers and around 2.70 crore of customers'' trust and belief in IOB as
"Good People to Grow With".
Global Business Performance
The Bank''s total deposits increased from Rs. 1,78,434 crore as at the
end of March 2012 to Rs. 2,02,135 crore as of March 2013 registering a
growth of 13.28 %. Most impressive was the growth in gross advances
which improved from Rs. 1,43,273 crore to Rs. 164366 crore with growth
of 14.72 %. As a result, the total business improved significantly by
Rs. 44,794 crore to Rs. 3,66,501 crore with a growth of 13.92% over
last year. This elevation has made the bank to enter into the group of
Big banks entity of business mix of over Rs. 350000 crore with a
sizable margin. It is noteworthy that this achievement is well recorded
in average terms with a business growth of 19.01% surpassing the
terminal growth. (Growth in average deposits 16.88%/ Growth in average
advances 21.64%)
Financial Performance
The operating profit of the Bank went up from Rs. 3,534 crore in
2011-12 to Rs. 3817 crore in 2012-13 with a growth of 8%. The Bank has
set apart a sum of Rs.3250 crore towards provisions and contingencies.
Due to constrains on higher provisions, the Bank''s net profit stood at
Rs. 567 crore in 2012-13 compared to Rs. 1050 crore in 2011-12.
However, the Bank has proposed to pay a dividend of 20% for the year
2012-13 as the profitability trend is expected to move favorably in the
near future.
Income and Expenditure Analysis
During the year 2012-13, the growth in business was significant at
19.01% in averages. This resulted in the Bank''s average Credit Deposit
ratio to reach the top level of 84.25% compared to terminal CD ratio of
81.31%, as compared to 80.29% last year. This indicates the improvement
in operational efficiency at the field level. Further, the bank was
serious in reducing the bulk deposits with the prudent ALM techniques.
The share of card plus deposits to total deposits has been successfully
brought down to 14.95% as against the desired level of 15% by the Govt.
The Bank took concerted efforts in opening of many new branches apart
from conducting well organized CASA & Recovery Campaigns. As a result,
the bank maintained the CASA% at 26.51% in March 2013 compared to
26.42% in March 2012. In the domestic front, the cost of deposits
declined to 7.76% in the 4th quarter compared to 7.79% in 3rd quarter,
7.89% in 2nd quarter and 7.77% in the 1st quarter of the current year.
For the year as a whole, the cost of deposit was contained at 7.80%
compared to 7.39% in last year. The increase in the above cost is
justified with the increase in card rates on term deposits in line with
the market. The cost of domestic term deposits increased to 9.30% in
2012-13 compared to 8.91% in 2011-12. It is noteworthy that the average
growth in domestic core term deposits was significant around 35% during
the current year.
Also, domestic cost of borrowings decreased to 9.17% in 2012- 13
compared to 9.87 % in 2011-12 mainly due to decrease in repo rate at
frequent intervals. As a result, the global cost of funds stood at
7.28% in 2012-13 compared to 7.11% in the last year.
Further, the constraints on NIM continued during the financial year due
to increase in provisions on restructured advances / system generated
Non Performing Assets (NPAs). The impact was higher as the bank reduced
the base rate from 10.75 % to 10.50% (effective 01.05.2012) and further
to 10.25% with effect from 18.02.2013. As such, the Bank''s domestic
yield on advances has come down to 11.27% for the whole year compared
to 11.65% last year. This has reduced the Bank''s domestic interest
spread at branch level to 3.47% compared to 4.26% of last year. Hence,
the Bank''s global Net Interest Income (NII) growth was marginal at
4.69% compared to 19.23% recorded last year. Consequently, the global
NIM for the year 2012-13 stood at 2.43% compared to 2.75% in 2011- 12.
However domestic Net Interest Margin was favorable at 2.51% during the
current fiscal despite the impact of additional interest reversals
during the last quarter.
Despite volatile market conditions, the domestic Yield on Investments
was favorable at 7.38% during the year compared to 7.39% in last year.
The Bank booked higher profit on sale of investment at Rs. 311 crore
(before netting loss on the revaluation of investment) compared to a
similar profit of Rs. 172 crore earned last year.
Capital Adequacy Ratio
The Bank''s Capital Adequacy Ratio as on 31.3.2013 stood at 11.85% as
per Basel II norms. The Bank has issued 12,70,97,102 Equity Shares of
face value of Rs. 10/- each, at the rate of Rs. 78.68 per equity share
(including premium of Rs. 68.68 per equity share) aggregating to Rs.
1000 crore (Rs. one thousand crore only) to Government of India on
preferential basis. Hence the Paid-up Capital of the Bank has increased
from Rs. 797 crore to Rs. 924.09 crore and Government of India''s
shareholding has increased from Rs. 554.86 Crore (69.62%) to Rs. 681.96
Crore (73.80%).
Branch Network
The Bank continues to step up its domestic branch expansion programme
for augmenting its pan India branch network and organic growth. During
the year, the Bank opened 273 branches across the country. Out of 273
branches opened during 2012-13, 188 branches (68.86%) are located in
Rural and Semi Urban centres, of which 92 branches are located in
Unbanked Rural centres. These new branches have enabled the Bank to
enhance new relationships and spread our presence and network farther
and wider. The average CASA in the new branches is about 48%. As at the
end of the year, the Bank had 158 pending licenses for opening of new
branches. With a view to stepping up vertical growth in advances
portfolio, 5 Specialized Large Corporate Branches, 5 Specialised Mid
Corporate Branches, 4 Specialised SME branches, and 22 Specialised
Agricultural Credit Branches were opened during the year.
In order to decentralize the decision making process, reduce the
turnaround time for credit delivery and increase efficiency in
transaction handling, the Bank opened 14 Regional Offices, 10 Rapid
Retail Centres, 9 MSME Processing Centres and 11 City Back Offices
during the year.
As on 31.03.2013, the Bank had 2902 domestic branches, as against 2629
branches as on 31.03.2012, comprising of 849 rural branches (29.26% to
total branches), 808 Semi Urban branches (27.84%), 649 Urban branches
(22.36 %) and 596 Metropolitan branches (20.54%). The Bank added 50.08
lacs new relationships during the year.
Apart from 2902 branches, as on 31.03.2013, the Bank had 59 Regional
Offices, 3 Extension Counters, 20 Satellite Offices, 31 City Back
Offices, 14 Rapid Retail Centers (RLPCs), 9 MSME Processing Centers and
6 Inspectorates.
RBI has also approved for opening of two Overseas Branches (FCBU at
Colombo and a Branch at Sukhumvit, Thailand).
Corporate Governance
Corporate Governance is based on the principles such as conducting the
business with integrity and fairness, ensuring transparency in all the
transactions, making all relevant disclosures as per the various
Regulations in Force and complying with all the laws of the land,
ensuring Accountability and Responsibility in all dealings with the
stakeholders and commitment for conducting the business in an ethical
and transparent manner.
The Bank has laid down a well-defined Code of Conduct, which fairly
addresses the issues of integrity, conflict of interest and
confidentiality and stresses the need of ethical conduct, which is the
basis of good Governance. This Code of Conduct is applicable to all the
members of the Board and the Senior Management (i.e. upto General
Managers) of the Bank.
The Bank has complied with the guidelines of RBI, SEBI and other
Regulatory Authorities for Corporate Governance, which has been
examined by the Statutory Central Auditors. Bank gives high priority to
good Governance, which reflects on transparent ownership structure,
Management and Accounting practices of the Bank. The Board recognizes
its role in promoting good Governance and in creating a framework of
best practices, processes, and ethics to observe and promote high
ethical standards.
The Bank is also committed to follow high disclosure standards and
transparency in financial reporting so as to keep investors and
stakeholders adequately well-informed and updated at frequent
intervals.
The Bank is complying with all the norms laid down by the Regulatory
Authorities in all its functional areas. There is an exclusive
compliance officer under Clause 47 of the Listing Agreement entered
into with the Stock Exchanges to comply with various provisions of SEBI
and Stock Exchanges.
The Bank is submitting a "Quarterly Compliance Report on Corporate
Governance" as per Clause 49 of the Listing Agreement with the Stock
Exchanges besides putting up to the Board and Audit Committee of the
Board (ACB) for information. As part of the good Corporate Governance,
the Bank ensures that there is no investor Grievance pending for a
period exceeding one week against the bank as per the records
maintained by Registrar and Transfer Agent. During the period
01.04.2012 to 31.03.2013, Registrar and Transfer Agent received 616
complaints from Shareholders and all are redressed /resolved.
Salient Features: 2012-13
- The Bank''s Vision-Mission Statement formulated in 2007 was valid till
March 2013. The Bank revisited the changing dynamics and came out with
a medium- term Vision / Mission outlook for the period 2013 - 2020,
which is as stated below:
"To be among the top five nationalised banks in terms of business
volumes and sustained profitability with global recognition guided by
high standards of governance and ethics; and emerge as the "Most
Preferred Banking Partner" to unlock value to all its
stakeholders."
- The Bank organized the Strategic Planning Conference in May 2012 .An
exclusive meeting of the Board of Directors was held to discuss the
Strategic Business Plan covering the innovative products to compete in
the market, Innovation in Business and E- Governance.
The bank has changed the organizational setup at the Central Office
level by putting in place vertical organizational structure
(Agriculture, MSME, Mid corporate, Large Corporate & Retail) to provide
focused implementation of strategies and for driving growth in assets
and liabilities in the respective business segments which would act as
profit centers for the bank.
- The Bank raised US$500 mn via sale of dollar denominated bonds for
5.5 years. This issue was oversubscribed by 10 times. The proceeds of
the issue is being exclusively deployed for the Bank''s overseas
operations. Further, Government cleared licenses for opening up of two
overseas branches at Bangkok and Colombo respectively.
- National Award for MSME lending for 2012 was awarded to the Bank and
CMD received the National Award for excellence in MSME lending (2nd
Place) from His Excellency, The President of India, Shri. Pranab
Mukherjee. The Bank was also conferred for its outstanding performance
at South Zonal level for implementation of Prime Ministers Employment
Guarantee Programme (PMEGP).
- Bank has bagged Responsible Business Awards 2012 from World Education
Congress in 6 categories namely Best Bank of the year Award, Best
Service Initiative Awards, Outstanding Banking Leader of the year
Award, Best CSR Practices Award, Best organization with Innovation HR
Practices Award, Best Security Initiative Award.
- Bank has received Best Indian Banker and Best Public Sector Banker
awards in the large bank category from "The Sunday Standard FINWIZ
2012". Bank has been conferred with Gold Award in Business
Intelligence and Data warehousing in the SKOCH Digital Awards 2012.
- Bank''s Chairman and Managing Director Shri. M. Narendra was awarded
the JGBS Top Rankers Excellence Visionary Leadership Award by Jindal
Global Business School and Top Rankers on the occasion of the 14th
National Management Summit in New Delhi during January 2013.
- The history of the bank recording the 75 year journey has been
brought out as a book titled "Indian Overseas Bank @75 - The Saga of
Good People to Grow With". The book was released by Hon''ble Finance
Minister Mr. P Chidambaram during Dec 2012.
- On 5th January 2013, Bank''s Executive Director Shri. A.K Bansal
received the Skoch Financial Inclusion Award for the Bank''s exemplary
work in promotion of Financial Inclusion among the Fishermen of Besant
Nagar,Chennai under the project "Turning the Tide".
- The Bank was adjudged as the Top Performer for the year 2012-13 on
the Central Excise Day. Bank''s Executive Director Shri. A.D.M Chavali
received the certificate and memento from Justice Shri R. Sudhakar,
High Court of Madras during February 2013.
- The bank has observed the year 2012-13 as the year of Retail
Credit.Bank has conducted a 3 month long campaign " Touching Hearts,
Spreading Smiles" with a view to increase our performance under CASA,
Retail Credit, Para Banking Products, Non Interest Income, Recovery
etc.
- 77th Foundation Day of the Bank was marked with a "Walk-In-Bank"
campaign at all branches wherein huge number of Savings and Current
Accounts were opened. The Bank also opened 77 branches across the
county to mark the occasion and 1,25,000 CASA Accounts were opened.
- Bank organized Platinum Jubilee commemoration oration by Dr. D Subba
Rao, Governor of RBI on 04.07.2012. On this occasion, "Banking for
the Unbanked" book was released.
- The Bank has set a record premium collection of Rs. 247 crore under
Bancassurance - Marketing of LIC Policies retaining No.1 position.
- In order to improve the exposure to SHGs, SHG Festival from
15.01.2013 to 15.03.2013 was celebrated to improve the credit linkage
with fresh SHGs. Campaign on IO B U rban Horticulture and marketing of
rural credit products was conducted during November and December 2012.
- The Bank celebrated International Women''s Day on 8th March 2013 and
CMD addressed all women IOBians in a special function organized at
Central Office. International Women''s day was also celebrated at
Ethiraj College for Women on 16.03.2013 where women customers & SHGs
participated and eminent women personalities were honoured.
- Contract for another one year with Ace Badminton player Ms. Saina
Nehwal, gold medalist in Common Wealth Games & Bronze medalist in
Olympics, is renewed. Her image was extensively used in print and
electronic media. "Brand IOB" has been made more versatile and
visible so as to reach the youth.
Board of Directors
Shri Sooraj Prakash Khatri, part time non-official director, ceased to
be Director, on completion of his 3 years term on 26.10.2012. Shri K.
Anand a Ku m ar. Offi ce r Employee Director, ceased to be the
director, on completion of his 3 year term on 25.03.2013. The Board of
Directors places on record its appreciation for the valuable
contributions made by the erstwhile Directors.
Acknowledgements
The Board of Directors acknowledge with gratitude, the valuable
guidance received from the Government of India, Reserve Bank of India,
Securities and Exchange Board of India (SEBI), Stock Exchanges, State
Governments, Financial Institutions& Overseas Regulators. The Board of
Directors is thankful to the valued Customers, Employees Union,
Officers Association, its domestic and international banking community,
the shareholders & other stake holders for their valued support,
continued patronage and confidence exhibited with the Bank. The Board
also wishes to place on record its deep appreciation for the valuable
contribution of the Bank''s Staff at all level and look forward to their
continued involvement and abundance in team effort towards achieving
the future goals.
For and on behalf of the Board of Directors
Chennai M. NARENDRA
April 29, 2013 Chairman and Managing Director
Mar 31, 2012
The Board of Directors have great pleasure in presenting the Annual
Report together with audited Balance Sheet and Profit & Loss Account of
the Bank for the year ended March 31, 2012.
The Bank has the pride of completing its historic delightful event of
Platinum Jubilee year on 10th February 2012 during the financial year
2011-12 and crossing the milestone of Rs.3,00,000 crore mark in
business. The Bank's growth in deposits at 22.86% and advances at
25.91% during 2011-12 were much higher than the Banking system's
growth.
Global Business Performance
The Bank's global deposits increased from Rs 1,45,229 crore as on 31st
March 2011 to Rs 1,78, 434 crore as on 31st March 2012 registering a
growth of 22.86%, while global gross advances improved from Rs 1,13,791
crore to Rs 1,43,273 crore with significant growth of 25.91 %. As a
result, the total business improved significantly by Rs 62,687 crore to
Rs 3,21,707 crore with a growth of 24.20% over last year.
Overseas Branches
During the year, the Bank has been actively pursuing setting up of the
Banking subsidiary in Malaysia, under the joint venture agreement
signed with Bank of Baroda and Andhra bank. The subsidiary is expected
to become operational shortly.
With an intention to expand its overseas operations, the Bank had
identified 14 prospective centres abroad and entrusted the job of
geographical assessment of these overseas centres to external
consultant M/s. Deloitte Touche Tohmatsu India Pvt. Ltd . The
consultants had submitted their Final Report, prioritizing the
countries identified, under Wave 1, Wave 2 and Wave 3. The Bank will be
focusing its overseas expansion plan initially, in the countries
identified under Wave 1 - Kenya, South Africa, Australia and U.S.A.
The Bank is following up with Reserve Bank of India (RBI) for approval
of opening another Branch at Bangkok and for upgrading its
representative offices at Dubai and Guangzhou. RBI's approval is
awaited for obtaining Full Bank licence for Singapore Branch.
As at the end of March 2012, the Bank had 13 establishments abroad,
including 6 full fledged branches, 4 Representative offices, 2
Remittance Centres and 1 Extension counter.
The Bank has two branches in Hong Kong and one each in Singapore, Seoul
(South Korea), Colombo (Sri Lanka) and Bangkok (Thailand).
Representative offices are located at Guangzhou (China), Ho Chi Minh
City (Vietnam), Kuala Lumpur (Malaysia) and at Al Karama, Dubai (UAE).
Remittance Centres operate at Boonlay and Serangoon, Singapore and the
Extension Counter is located in Sri Lanka. Financial Performance
The operating profit of the Bank went up from Rs 2,861crore in 2010-11
to Rs 3,534 crore in 2011-12 with a growth of 23.52%.
Provisions
The Bank has set apart a sum of Rs 2,484 crore towards provisions and
contingencies.
Net Profit / Dividend
The Bank's net profit stood at Rs 1,050 crore in 2011-12 compared to Rs
1073 crore in 2010-11. The Bank has proposed to pay a dividend of 45%
for the year 2011-12.
Income and Expenditure Analysis
During the year 2011-12, the growth in business was significant at
24.20% at par with System's growth of around 16%. This resulted in
the Bank's Credit Deposit ratio to reach the level of 80.29% , as
compared to 78.35% last year. Due to increase in card rates on term
deposits, the domestic cost of term deposits increased from 7.40% in
2010-11 to 8.91% in 2011-12 coupled with increase in interest rate on
Savings Bank deposit from 3.5% earlier to 4% effective from 01.04.2011.
As a result, domestic cost of deposits increased to 7.39% for the year
2011-12. Domestic cost of borrowings also increased from 9.25% in
2010-11 to 9.86% in 2011-12 mainly due to increase in repo rate from
6.75% to 8.50% at frequent intervals during the same period. As a
result, domestic cost of funds increased to 7.61% in 2011-12 as against
6.25% in 2010-11. Further, the constraints on NIM continued during the
financial year due to increase in provisions on certain restructured
advances / system generated Non Performing Assets (NPAs). Despite
increase in Benchmark Prime Lending Rate (BPLR) / Base rate to the
level of 15.50% / 10.75%, the Bank's domestic yield on advances was
only at 11.65% compared to 10.43% in 2010-11. Hence, the domestic
interest spread decreased to 4.26% during the financial year as against
4.48% in 2010-11. This has resulted in Year on Year increase of 67%
interest payments on domestic deposit over the last year as against 54%
growth in interest receipts on advances.
Despite volatile market conditions, the Domestic Yield on Investments
increased to 7.39% (Net of amortization) during the year compared to
7.15% in the last year. The profit on sale of investment was higher at
Rs 171 crore before accounting loss on revaluation of investments at Rs
35 crore. The profit on exchange from forex business improved to Rs 186
crore as against Rs 127 crore in last year.
On the expenses side, the increase in domestic operating expenses was
at 23% and the other non-staff expenditure showed an increase of 30%
over the last year, mainly due to business expansion and opening of 447
new branches during the financial year. However, the Bank's cost to
income ratio was favorable at 47.23% during the year 2011-12 compared
to 47.35% in the last year. The global income increased to Rs 19,578
crore with an increase of 47% whereas total expenses accounted for
Rs16,044 crore, leaving an operating profit of Rs 3,534 crore with a
growth of 23.52% for the whole year 2011-12. The Bank's Net Interest
Income (NII) growth was at 19.20% taking the global NIM to 2.75%
compared to 3.11% in the last year.
Capital Adequacy Ratio
The Bank's Capital Adequacy Ratio as on 31.3.2012 stood at 13.32%
compared to 14.55% as at the end of March 2011 (as per Basel II norms).
During the year 2011-12, The Bank issued 14,73,11,388 equity shares of
face value of Rs.10 each at Rs 97.82 per equity share ( including
premium of Rs 87.82 per equity share) to the Government of India on
30.03.2012 aggregating to Rs1441 crore, and 3,09,37,467 equity shares of
face value of Rs10 each at Rs 97.82 per equity share (including premium
of Rs 87.82 per share) to Life Insurance Corporation of India and its
various schemes on 24.03.2012 on preferential basis aggregating to Rs
302.63 crore.
Branch Network
The Bank has stepped up its branch expansion efforts towards its pan
India presence. During the year, the Bank opened 447 branches across
the country, highest in the history of the Bank. The Bank had reached
yet another milestone of crossing 1000 branches in Tamil Nadu State as
committed to the Hon'ble Chief Minister of Tamil Nadu under MISSION
TAMILNADU - PLATINUM 1000, on 10th February 2012 exactly on the
concluding day of Platinum Jubilee year of the Bank. Towards reaching
the said milestone, the Bank opened 147 branches in Tamil Nadu within
the short span of 65 days. The Bank has joined the group of very few
banks, having 1000 or more branches in a particular State.
Out of the 447 branches opened during 2011-12, 73.38% are located in
Rural and Semi Urban centres. As on 31.03.2012, the Bank had 2,629
domestic branches comprising 731 Rural branches (27.81% of total
branches), 738 Semi Urban (28.07%), 599 Urban (22.78%) and 561
Metropolitan branches (21.34%). Besides, the Bank had 3 Extension
counters and 20 Satellite Offices, 45 Regional offices, 18 City Back
Offices and 6 Inspectorates as at the end of the March 2012. These new
branches will provide speedy growth of business in the years ahead. The
average CASA in the new branches is about 50%.
To augment the vertical growth in advances portfolio, 3 specialised
Large Corporate branches, 11 Specialised Mid Corporate branches and 8
Specialised SME branches were opened during the year 2011-12. Besides,
11 specialised Asset Recovery Management (ARM) branches and 1
Specialised Bullion Branch were also opened.
The existing Central Clearing Offices are renamed as City Back Offices
(CBO) so as to strengthen the functions of back office jobs and one
more CBO at Pune was opened during the year. The Bank intends to open
23 more City Back Offices across the country so that every Region of
the Bank will have at least one CBO in their Region /city.
Platinum Jubilee year Celebrations
The Bank entered its Platinum Jubilee year on 10th February 2011 and
celebrated this proud event by organizing a year long celebrations
across the country and abroad. The Bank is translating those efforts
into business results.
As a part of the year long Platinum Jubilee year celebrations, the Bank
organized Four Platinum Jubilee Commemorative orations of the following
eminent personalities in contemporary topics at Chennai and Hyderabad.
- By Shri Montek Singh Ahluwalia, Deputy Chairman, Planning
Commission on '12th Five Year Plan - Gateway to a Defining Decade'
at Chennai.
- By Dr C Rangarajan, Chairman, Economic Advisory Council to the
Prime Minister on 'Economic Growth and Inflation' at Chennai.
- By Dr M Veerappa Moily, Hon'ble Minister of Corporate Affairs,
Government of India on "Corporate Governance with special reference
to Banking Industry" at Chennai.
- By Dr. Y.V. Reddy, former Governor of Reserve Bank of India on
"Development & Regulation of Financial Sector" at Hyderabad.
A Special Platinum Jubilee function was organized by the Bank on 6th
January 2012 in Chennai, in which the Hon'ble Finance Minister Shri
Pranab Mukherjee participated as the Chief Guest.
- On the occasion, representatives from select Self Help Groups and
Farmers Clubs were felicitated.
- Seven eminent personalities who had contributed to the society were
honoured.
- The Bank's book on its Corporate Social Responsibility
initiatives was launched by Hon'ble Finance Minister Shri Pranab
Mukherjee.
Bancon 2011
BANCON is the Bankers' conference held every year to discuss and
deliberate on a theme of paramount importance to the Banking Industry.
It is hosted by different Banks at different Regions.
This prestigious event was brought to Southern Region during the year
and hosted by Indian Overseas Bank BANCON 2011 was organised by the
Bank, as a part of Platinum Jubilee Celebrations, on 4th, 5th and 6th
November 2011 in Chennai. Top Bankers, Economists, Industrialists and
renowned Speakers from the financial world participated in this
Conference.
The theme of the Conference was "Competing in the Defining Decade for
Indian Banking". 23 sessions involving more than 120 speakers were
held during the three days. More than 600 delegates participated in
the Conference. Hon'ble Union Minister of State for Finance Shri
Namo Narain Meena inaugurated BANCON 2011 on 4th November 2011. Shri
Anand Sinha, Deputy Governor, Reserve Bank of India delivered the
valedictory address.
Financial Inclusion
Coverage of villages with banking outlet
Our Bank introduced Smart Card Banking through Business Correspondents
as per the guidelines of Reserve Bank of India for providing Banking
facilities in un-banked villages. Business Correspondents deliver the
services at the front end by using bio-metric smart cards and Hand Held
Devices. The devices are voice enabled in vernacular language and user
friendly even for illiterates. This has enabled villagers even in
remote locations to transact banking business at their own place. In
the first phase, the Bank covered all the 1294 allotted villages with
population above 2000 under Smart Card Banking across the country. In
addition to the above, the Bank has also covered 115 other villages
under Smart Card Banking. Smart Card Banking is now being implemented
in 20 States and 2 Union Territories spread over 42 Regions.
During the year under review, the Bank has opened 7,62,268 No-frills
Savings Bank accounts taking the total number of such accounts to
24,44,032. So far, the Bank has issued 1,66,237 smart cards and the
number of transactions undertaken in the smart card terminal is
5,60,248.
Setting up Ultra Small Branch
As per the guidelines of Ministry of Finance, the Bank has set up Ultra
Small Branches in 32 Financial Inclusion villages during the year.
Award
The Bank bagged SKOCH AWARD for Financial Inclusion which was conferred
to the Bank for "Best Practices through Banking & Financial Services
for promoting Inclusive growth & Poverty Alleviation from across Urban
and Rural India".
Regional Rural Banks
The two Regional Rural Banks (RRBs) sponsored by the Bank, viz.,
Pandyan Grama Bank and Neelachal Gramya Bank performed well during the
year. Pandyan Grama Bank has earned Net Profit after Tax consecutively
for the past sixteen years and recorded NIL Net NPA continuously for
the past nine years. Pandyan Grama Bank and Neelachal Gramya Bank have
achieved 100% Core Banking Solution of all their branches. Neelachal
Gramya Bank has completely wiped out the accumulated loss two years
ahead of schedule.
Customer Service
The Bank is a member of Banking Codes and Standards Board of India
(BCSBI) and has adopted the Code of Commitment to Bank's Customers
drafted by BCSBI.
As a part of Bank's customer centric initiative, Customer Fortnight
was observed in all branches during November 2011 and executives from
the Central Office and Regional Offices have visited the branches and
met the customers. Again, customers contact week was observed from
5.12.2011 to 10.12.2011.
The details of customer complaints received and redressed during the
year 2011-12 are given below.
Sl. Details At Central At Regional
No. Offices Office
1. No. of complaints pending at the
beginning of the year 45 111
2. No. of complaints received during
the year 1046 1542
3. No. of complaints redressed during
the year 1006 1588
4. No. of complaints pending at the
end of the year 85 65
Settlement Rate 92.20 96.06
Number of awards passed by the Banking Ombudsman and implemented by the
Bank are as follows.
1. No. of complaints pending at the beginning of the year : 1
2. No. of awards passed by Banking Ombudsman during the year: 0
3. No. of awards implemented during the year : 1
4. No. of unimplemented awards at the end of the year : 0
The Bank is the Convenor for Customer Service Centre in Chennai City
and the Bank resolved all the complaints during this year.
Customers are provided with the facility of Toll Free Teleservices by
engaging an outside agency for receiving complaints. These complaints
are being resolved within 48 hours. The Complaints are being received
directly by Central Office and Regional Office (through letters,
e-mails and telephone) and also through other channels like Reserve
Bank of India, Banking Ombudsman, and Government of India. To speed up
the process of redressal, an online Grievance Redressal And Monitoring
System ( IOB GRAMS) was introduced which enables the Regional Offices
and branches to view the complaints and resolve the same immediately.
Another system viz. SMS)< REDRESS was introduced to facilitate the
customers wherein the grievances of customers received through SMS are
resolved immediately. The message will be received by the Regional
Manager concerned, who, in turn, will contact the customer to resolve
the complaint.
Retail Banking and Marketing
The Business under Retail segment showed a remarkable improvement
during the year 2011-2012. The total income generated on fee based
products registered a growth of 20.36% during the year.
In Life Insurance Business, the Bank continued to achieve the status of
No. 1 Corporate Agent and recorded history by crossing Rs 250 crores
premium collection mark in Bancassurance. Thus the Bank registered an
increase of 49.80% over 2010-11 in Premium mobilization. The income
through mobilization of Non Life Insurance Policies also registered a
growth of 34.48% over 2010-11.
The Bank earned an income of Rs 12.79 crore from sale of Gold coins with
a growth of 44.92% over 2010-11. In quantum, the Bank sold Gold Coins
of 1666 kgs during 2011-12 as against 1392 kgs sold during last year.
The Bank conducted various Campaigns viz.
1. Akshaya Tritya Campaign for sale of gold coins.
2. CASA Fest for mobilizing new Savings Bank and Current Accounts.
3. Housing Loan Campaign - To increase the Housing Loan portfolio.
4. IOB Elite Campaign to mobilize Life insurance Business and increase
the fee based income.
5. Non Life Insurance Mobilization Campaign.
during the year 2011-12 towards improving the retail business. Retail
Loans improved by 20.34%over the previous year with Housing Loans and
Educational Loans as major contributors. New product developments such
as Career Dream - Loan for financing Coaching/ Tuition Fee of reputed
institution in India to prepare for Professional Entrance examinations,
IOB Scholar - Education Loan for the students who were kept outside the
purview of Indian Banks Association (IBA) Model Scheme were developed
to expand business across all segments. The Repayment periods of all
the existing and new
Retail Loans were extended and rephased in order to attract more retail
borrowers to the Banks fold.
Official Language Policy
The Bank has taken all efforts to implement the Official Language
Policy of Government of India during the year 2011-12. During the year,
141 Staff members, who did not possess working knowledge of Hindi were
trained in Prabodh, IOB Praveen and Banking Pragya Courses. 1,774 Staff
members possessing working knowledge of Hindi were trained in General
Hindi Workshops held during the year. Rajbhasha Sangoshti was held on
10.09.2011 for heads of Central Office departments to strengthen the
Official Language Implementation in Central Office.
Miniutes of all meetings of all board level committees were translated
in Hindi. As per the directives of Government of India, the Bank has
enabled Hindi Unicode font in all Regional Offices and has provided the
facility of downloading of the same on the intranet - IOB Online. The
Bank has also provided the Banking terminology on IOB Online for the
benefit of staff members. The Bank has given necessary training to
1,386 staff members for use of Hindi in computers. The Bank has
provided Script Magic package in all branches for issuing passbooks,
statement of account, Demand Draft and deposit receipts in Hindi. The
Bank has published all the four issues of quarterly Hindi Magazine
"VANI" in print as well as in digital form. The Bank's website
has been made available in Hindi also.
The Bank's Hindi (In-house) Magazine "VANI" has been awarded
First Prize by Department of Official Language, Ministry of Home
Affairs, New Delhi in "C" Region for the year 2010-11. The award
was received by the Bank's Chairman & Managing Director Shri M
Narendra from Honourbale President of India Smt. Pratibha Devisingh
Patil on 14th September, 2011.
Reserve Bank of India has awarded Fourth Prize for the Bank's Hindi
house magazine "VANI" for the year 2010-11 in the Inter-Bank
Competition for Hindi house magazines of banks and financial
institutions. Regional Offices were inspected on Official Language
implementation by Official Language Department, Central Office.
Rajbhasha Shields were awarded to Regional Offices and branches doing
good work in official language implementation.
Annual Official Language Review Meeting and Unicode training for
Official Language Officers was held from19th to 21st May 2011 to assess
the progress made in the area of Official Language implementation in
Regional Offices.
The Third Sub Committee of Parliamentary Committee on Official Language
inspected the Bank's Regional Office at Puducherry and Mandi branch.
The Committee expressed satisfaction over the performance of the Bank
at these centres.
As convener of Chennai Town Official Language Implemen- tation
Committee, the Bank has received the Second Prize for its efforts in
implementation of Official Language Policy during the year 2010-11 from
Official Language Department, Ministry of Home Affairs, Government of
India. The Prize was given by Shri A N P Sinha, Secretary, Department
of Official Language, Ministry of Home Affairs, New Delhi on 8th
December 2011. On behalf of the Committee, the Bank conducted two
General Hindi Workshops, 12 Inter-Bank Hindi competitions, Joint Hindi
Month Celebration function and Hindi Unicode training programme for the
staff members of member banks / Financial Institutions. A special Joint
Rajbhasha Samaroh was held on 13th May 2011 on the occasion of Silver
Jubilee year of the Committee and Platinum Jubilee year of Bank. In
addition to this two half yearly meetings were also conducted. A
Souvenir on the activities of the committee was released on the
occasion. Two Seminars in Hindi on Banking subject were held for the
Bank's Executives and Official Language Officers. A Joint Hindi Day
Celebration function was held on 13th March 2012. Annual issue of
magazine of "Chennai Bharathi" was brought out.
A Revised booklet on Notings in Hindi was also published.
Corporate Governance
Corporate Governance refers to the set of systems, principles and
processes by which a company is governed. They provide the guide as to
how the company can be directed or controlled such that it can fulfill
its goals and objectives in a manner that adds to the value of the
company and is also beneficial to all its stakeholders in the long
term. Stake holders would include everyone from the Board of Directors,
Management, Shareholders, Customers, employees and society.
Corporate Governance is based on principles such as conducting the
business with integrity and fairness, being transparent with regard to
all transactions, making all necessary disclosures and decisions,
complying with all the laws of the land, accountability and
responsibility towards the stakeholders and commitment for conducting
business in an ethical manner.
The Bank has laid down a well-defined Code of Conduct which addresses
issues of integrity, conflict of interest and confidentiality and
stresses the need of ethical conduct, which is the basis of good
governance. This Code of Conduct is applicable to all the members of
the Board and the Senior Management (i.e. General Manager) of the Bank.
The Bank has complied with the guidelines of Reserve Bank of India
(RBI), Security Exchange Board of India (SEBI) and other regulatory
authorities for Corporate Governance, which has been examined by the
Statutory Central Auditor. The Bank gives high priority to good
Governance, which reflects in transparent ownership structure,
management and accounting practices of the Bank. The Board recognizes
its role in promoting good governance and in creating a framework of
best practices, processes, and ethics to observe and foster high
ethical standards.
The Bank is complying with all the norms laid down by the Regulatory
Authorities in all its functional areas. There is an exclusive
compliance officer under Clause 47 of the listing agreement entered
into with Stock Exchanges to comply with various provisions of SEBI and
Stock Exchanges.
Pursuant to Clause 49 of the Listing Agreement, Management Discussion &
Analysis Report, Report on Corporate Governance as well as certificate
by the auditors regarding Compliance of the conditions of Corporate
Governance, form part of this Annual report.
As part of the good Corporate Governance, the Bank ensures that there
is no investor grievance pending for a period exceeding one month
against the Bank as per the records maintained by Registrar and Share
Transfer Agent.
The Bank is submitting a "Quarterly Compliance Report on Corporate
Governance" as per Clause 49 of the listing agreement to Stock
Exchanges besides putting up to Board and Audit Committee of the Board
(ACB) for information.
Board of Directors
Smt.Nupur Mitra , demitted office on 31.10.2011 on her appointment as
Chairman and Managing Director of Dena Bank. ShrLA.D.M.Chavali, assumed
charge as Executive Director on 28.12.2011 .Dr.Vinita Kumar , Govt
Nominee director, demitted office on 21.07.2011.The Government of India
(GOI) nominated Dr.Alok Pande as Government of India Nominee director
with effect from 22.07.2011 .Shri B.V.Appa Rao, demitted office on
28.08.2011, on completion of his tenure of three years. The Government
of India (GOI) nominated Shri Niranjan Kumar Agarwal, under Chartered
Accountant category, with effect from 01.11.2011 .Shri.A.K.Bhargava and
Dr.Chiranjib Sen demitted office as shareholder Directors on
07.12.2011. Shri.Ajit Vasant Sardesai and Prof.S.Sadagopan elected as
Share Holders Director and assumed office on 08th December 2011.
Shri.A.Vellayan reelected as Share holder Director and assumed office
on 08th December 2011. Shri.A.Vellayan has demitted office as
Shareholder Director on 30.03.2012, consequent to the allotment of
14,73,11,388 equity shares to the GOI which took place on 30.03.2012,
whereby GOI shareholding has increased to 69.62%
The Board of Directors placed on record its appreciation for the
valuable contributions made by the erstwhile Directors and extended a
warm welcome to the new directors. Acknowledgements
The Board of Director place on record the valuable guidance received
from the Government of India, Reserve Bank of India, Securities and
Exchange Board of India (SEBI) and support from Stock Exchanges,
various State Governments and Financial Institutions. The Board
expresses its gratitude to the Hong Kong Monetary Authority, Monetary
Authority of Singapore, Financial Supervisory Services Korea, Central
Bank of Sri Lanka, China Banking Regulatory Commission, Bank Negara,
Malaysia, Bank of Thailand, State Bank of Vietnam and Central Bank of
UAE for their support.
The Board of Directors records the continued patronage and goodwill of
the valued customers, shareholders, other stakeholders and
correspondents of the Bank in India and abroad. The Directors are happy
that the industrial relations are very cordial on account of positive
attitude on the part of Employees' Union and Officers' Association.
For and on behalf of the Board of Directors
Chennai M. NARENDRA
May 5 , 2012 Chairman and Managing Director
Mar 31, 2011
The Board of Directors have great pleasure in presenting the Annual
Report together with audited Balance Sheet and Profit and Loss Account
of the Bank for the year ended March 31,2011.
During 2010-11, the Banks performance is more progressive in the
backdrop of growth momentum in the Indian economy. The Bank has
registered higher growth rate than the banking system both in deposits
and advances. The Bank has witnessed significant growth in business and
crossed the business level of Rs. 2,50,000 crore mark.
Global Business Performance
The Banks global deposits increased from Rs. 1,10,795 crore as on 31st
March 2010 to Rs. 1,45,229 crore as on 31st March 2011 with a growth of
31.08 % while global gross advances went up from Rs. 80,782 crore to
Rs. 1,13,791 crore at 40.86 %. Hence, the total business improved to
Rs. 2,59,020 crore with an excellent growth of 35.20 % over last year.
Overseas Branches
During the year, the Bank has been actively involved in the process of
setting up of the office at Malaysia, in respect of the joint venture
signed with Bank of Baroda and Andhra bank to open a Banking subsidiary
in Malaysia. The subsidiary has obtained license from Bank Negara, the
Central bank of Malaysia. The Bank is also looking ahead to expand its
overseas operations by availing funds out of a Medium Term Note issue.
As at the end of March 2011, the bank had 13 establishments abroad,
with 6 full-fledged branches, 4 Representative offices, 2 Remittance
Centres and 1 Extension counter.
There are two branches in Hongkong and one each at Singapore, South
Korea, Sri Lanka and Bangkok. Representative offices are located at
Guangzhou, China, at Kualalumpur, Malaysia, at Ho Chi Minh City,
Vietnam and at Al Karama, Dubai. Remittance Centres operate at Boonlay
and Serangoon, Singapore and the extension Counter is located at Sri
Lanka.
Medium Term Notes Issue (MTN)
The Bank embarked on the MTN programme for a total size of USD 1
billion in the beginning of January 2011. The primary objective of the
programme was to raise foreign currency funds for funding the long-term
assets of overseas branches. The key milestones associated in setting
up the programme were obtention of second rating from Fitch, listing
the issue on the Singapore Stock Exchange, finalizing extensive
documentation, conducting tradeshows and deliberations with
International Investors in a short span of time. The road shows were
spearheaded by Chairman and Managing Director Shri.M.Narendra,
Executive Director Mrs. Nupur Mitra and General Manager
Shri.S.Chandrasekharan. The first tranche of the issue under the
programme was successfully launched on 12th April 2011 for an issue
size of USD 500 Mio in the form of Senior Unsecured Debtforatenorof
5.5years. The pricing was, concluded at a competitive pricing of 5-year
US Treasury +290 BPs and the issue was over subscribed to the extent of
USD 1.9 Mio. The fixed coupon rate of the bond was fixed at 5%, semi
annual, with an issue price at USD 99.478.
Financial Performance
The operating profit of the Bank went up from Rs. 1,845 crore in
2009-10 to Rs. 2,861 crore in 2010-11 with a growth of 55.08 %. This
attainment was all the more significant when viewed in the light of
volatile market conditions leading to subdued treasury gains and
increased cost of funds. Growth in operating profit can be attributed
to expansion in volume of business especially in the second half of the
financial year and improvement in efficiency levels.
Provisions
The Bank has set apart a sum of Rs. 1, 788 crore towards provisions and
contingencies.
Net Profit Dividend
The Banks net profit increased to Rs. 1073 crore in 2010-11 from Rs.
707 crore in 2009-10 with a growth rate of 51.71%. The Bank has
proposed to pay a dividend of 50 % for the year 2010-11.
Income and Expenditure Analysis
During the financial year 2010-11, the growth in total global income
was favorable at 17.01 % over last year amounting to Rs. 13,327 crore.
At the other end, the total expenses was controlled at Rs. 10,466 crore
with a reasonable increase of 9.66 % over last year despite providing
provisions towards pension and gratuity as per extant RBI guidelines
and fresh recruitment. This was mainly possible due to various cost
control measures taken at the micro/macro levels apart from handling of
Asset Liability Management techniques effectively.
As a result, domestic cost of deposits came down to 5.95 % in 2010-11
compared to 6.36% in 2009-10 and the domestic yield on advances stood
at 10.43%. The cost of domestic borrowings/others increased to 9.25 %
in the current year due to higher borrowings to meet the liquidity
adjustments. The increased CRR and repo rates had an impact on the
domestic cost of funds, which increased to 6.46 % in Q4 of the
reviewing period. The global operatingexpenses showed a reasonable
increase of 4.30 % during the year amounting to Rs. 2,572 crore.
The domestic yield on investments increased to 7.15 % (net of
amortization) during the year compared to 7.02 % in the last year.
Profit on exchange (domestic) was also higher at Rs. 127 crore compared
to Rs. 98 crore last year. Due to volatile market conditions, as said
earlier, the profit on sale of investments reduced to Rs. 109 crore in
2010-11, compared to Rs. 292 crore in 2009-10. The global net interest
income increased to Rs. 4208 crore with a significant growth of 32.83%
compared to 10.39% in last year. Consequently, there was a perceptible
improvement in global Net Interest Margin , higher at 3.11 % during the
year compared to 2.74% of last year.
Thus, the operating profit showed a significant growth of 55.08 % over
last year aggregating to Rs. 2861 crore in 2010-11 with improved Net
interest income. Excluding the treasury gains earned under profit on
sale of investments as also the impact of loss on revaluation of
investments, the core operating profit increased from Rs. 1606 crore in
2009-10 to Rs. 2805 crore in 2010-11 at a growth of 74.66%.
Capital Adequacy Ratio
The Banks Capital Adequacy Ratio as on 31.3.2011 stood at 14.55%
compared to 14.78% as at the end of March 2010 (as per Basel II norms).
During the current financial year, the Bank had issued 7, 39,49,343
equity shares of face value of Rs.10 each at Rs. 142.53 per share
(including premium of Rs. 132.53 per share) to the Government of India
on preferential basis aggregating to Rs. 1,054 crore.
Branch Network
The Bank towards expanding its reach and pan India presence opened 173
branches across the country, upgraded 9 Extension Counters. As at the
end of the reporting period, the Bank had 2,184 domestic branches of
which 583 were Rural branches accounting for 26.7% of total branches,
558 Semi Urban (25.6%), 542 Urban (24.8%) and 501 Metropolitan branches
(22.9%). The number of Extension Counters in India stood at 5.
Changes in organization set up at Central Office
Towards driving the business fruther and to have focused approach in
business expansion, the bank has drawn the verticals viz. Large
Corporate, Mid Corporate, Micro and Small and Medium Enterprises at
Central Office. Besides the above , the Bank has integrated all its
Treasury functions at Central Office. An exclusive transaction banking
department was formed at Central Office for monitoring the performance
in respect of Trade finance, Cash Management Services, Supply Chain
Management/Channel Finance and Government business.
Platinum Jubilee year Celebrations- An image building exercise
The Bank has entered its 75th year of operations as on 10th February
2011 and the Bank inaugurated the platinum jubilee celebrations on 10th
February 2011 with a grand function organised in New Delhi followed by
a function in Chennai. Honble Union Ministers of State for finance
Shri Namo Narain Meena and Shri S.S. Palanimanickam graced the function
and inaugurated the function. Union Secretary of Finance Shri Shashi
Kant Sharma, Chairmen of
Public Sector Banks and the past Chairmen of the Bank participated in
the function. On this occasion, 75 branches and 75 Automatic Teller
Machines (ATMs) were opened. The Bank has launched new products viz. SB
Student IOB MSE Plus, Bhumilakshmi. The Bank also extended its reach of
its IOB Sampoorna, an innovative rural development project and
distributed scholarships to Girl Students. As a part of our Banks
Platinum Jubilee Celebrations in New Delhi, a booklet titled "Success
Stories... Making India grow since 1937" was released by the Honble
Union Ministers of State for finance Shri Namo Narain Meena and Shri
S.S. Palanimanickam. An exhibition of Self Help Groups products was
also organized.
Platinum Jubilee Celebrations is being celebrated with customer and
public participation in various places of the country till the end of
the Platinum Jubilee year. The Bank has been translating these efforts
for expanding the customer base.
The Banks image building exercise is impacting its presence well in
the market. Shri M.Narendra, Chairman and Managing Director of the Bank
has figured in the list of Top 10 Indian CEOs - Indias and Worlds
most talked-about CEOs in March 2011 published in the press recently
(Business Today magazine).
With the strong and committed staff at all levels and with the positive
industrial relations climate, the Bank has been converting all the
available business opportunities into results and do not foresee any
threats in its business growth.
Financial Inclusion
With a view to extending banking services and products in un-banked
villages (having population of over 2000) the Bank introduced Smart
Card Banking through Business Correspondent as per the guidelines of
Reserve Bank of India. Rural people can transact banking business at
the village itself with the use of biometric smart cards and Hand Held
Devices. Business Correspondents deliver the services at the front end.
The devices are voice enabled in vernacular language and user friendly
for illiterates.
The Bank so far covered 781 allotted villages under Smart Card Banking
across the country. In addition
to the above, other 30 villages were provided with the service of
Business Correspondent.ln all, smart Card Banking is being implemented
in 16 States and 1 Union Territory spreading over 33 Regions. During
the year under review the Bank has opened 5,38,219 No-frills SB
accounts and issued 36,625 biometric smart cards.
Regional Director, Reserve Bank of India, Chennai appreciated our
Banks initiative under Financial Inclusion plan in a press release
that Indian Overseas Bank was the only Bank to have begun its rural
operation in the State using Information and Communication Technology
model in April 2010. The Executive Director, Reserve Bank of India also
appreciated Banks performance by a special letter congratulating the
good job done by the Bank.
The Bank bagged SKOCH AWARD for Financial Inclusion. Award was
conferred to the Bank for redefining the concept of last mile banking
when it took the banking services to the Kaanni Tribal hamlets in
Papanasam, Tamil Nadu. On the Financial Inclusion Day (on 23.01.2011),
"Smile" - Walk-in-bank campaign was launched and over 2.20 lacs No-
frill accounts were opened.
Regional Rural Banks
The Regional Rural Banks (RRBs) sponsored by the Bank, viz., Pandyan
Grama Bank and Neelachal Gramya Bank performed well during the year.
Pandyan Grama Bank has earned Net Profit After Tax consecutively for
the past fourteen years and recorded NIL Net NPA continuously for the
past eight years. Pandyan Grama Bank has achieved 100% Core Banking
Solution of all 203 branches. Neelachal Gramya Bank has completely
wiped out the accumulated loss two years ahead of schedule.
Customer Service
The Bank is a member of Banking Codes and Standards Board of India
(BCSBI) and has adopted the Code of Commitment to Banks Customers
drafted by Banking Codes and Standards Board of India (BCSBI). During
this year, the Cheque Collection Policy document relating to customer
service, was amended by incorporating the guidelines issued by BCSBI.
Customer Fortnight was observed in all branches during November 2010.
The details of customer complaints received and redressed during the
year 2010-11 are given below.
Sl. Details At Central At Regional
No. Office Offices
1. No. of complaints pending at the
beginning of the year 58 62
2. No. of complaints received during
the year 1009 1447
3. No. of complaints redressed during
the year 1022 1398
4. No. of complaints pending at the end
of the year 45 111
Settlement Rate % 95.78 92.64
Number of awards passed by the Banking Ombudsman and implemented by the
Bank are as follows.
- No. of complaints pending at the beginning of the year 1
- No. of awards passed by Banking Ombudsman during the year 0
- No. of awards implemented during the year 0
- No. of unimplemented awards at the end of the year 1
The Complaints are being received directly by Central Office and
Regional Office (through letters, e-mails and telephone) and also
through other channels like Reserve Bank of India, Banking Ombudsman,
Government of India etc. Customer Service Centre, for which the Bank is
the Convenor in Chennai City, had resolved all the complaints during
this year.
Customers are provided with the facility of Toll Free Tele services
(No. 1800-425-4445) by engaging an outside agency for receiving
complaints. These complaints are being resolved within 48 hours.
Retail Banking and Marketing
The business under retail banking segment showed a remarkable
improvement during this year. Under fee based income, Life and General
Insurance products showed tremendous growth. The income from fee-based
products registered a growth of 27.26 % in 2010-11.
Distribution of life policies as a Corporate Agent of Life Insurance
Corporation of India showed excellent growth both in premium
mobilization as well as commission income. Bank had achieved the status
of No.1 Corporate Agent of LIC of India.
Income from life insurance products grew by 39.40% over 2009-10, income
from marketing of non life insurance products by 57.58% over
2009-10.insurance linked products like IOB Jeevan, IOB Healthcare Plus,
Vidya Jyothi with Suraksha (insurance cover for Educational Loans)
continued to register impressive growth . Distribution of non life
insurance products as a Corporate Agent of Universal Sompo General
Insurance had resulted in good business and income realizations.
Retail Sale of Gold coins continued to show impressive growth. The
mobilization under Mutual Fund Distribution also received special focus
and contributed to the fee based income of the Bank.
Retail Loans improved by 20.35% over the previous year with Housing
Loans and Educational Loans as major contributors.
The following campaigns were conducted during the year 2010-11 for
improving the retail business:
- Akshaya Thrithiai Campaign for Sale of Gold Coins.
- Debit & Credit Card Mobilisation Campaign.
- SB Month for Savings Account Expansion.
- "Catch them Young" for canvassing Student Accounts.
- Gold Coin Campaign for increasing retail gold coins sale.
- Platinum Jubilee Home Loan Exhibition to expand Home Loans.
- Tax Saving Month Campaign for Tax Saving Products.
- Customer Reach programmes like "Walk in Bank" and "IOB Smile"
Campaigns.
New product developments such as - Special and focused products like
Corporate Salary, SB Student, SB Platinum, CD Supreme, Gift Card and
IOB Career Dream were developed and marketed to capture and expand
business from the target segments.
All these coordinated campaigns and introduction of new products not
only improved the retail business segment but also strengthened its
customer base.
Official Language Policy
The Bank took all efforts to implement the Official Language Policy of
Government of India during the year 2010-11. During the year, 192 Staff
members who do not possess working knowledge of Hindi were trained in
IOB Praveen and Banking Pragya Courses. 1,912 Staff members possessing
working knowledge of Hindi were trained in General Hindi Workshops held
during the year. Rajbhasha Sangoshti was held on 25.09. 2010 for heads
of Central Office departments to strengthen the Official Language
Implementation.
Minutes of all meetings of all board level committees were translated
in Hindi. As per the directives of Government of India, the Bank has
enabled Hindi Unicode font in all Regional Offices and has provided the
facility of downloading the same in IOB ONLINE. The Bank has also
provided the Banking terminology in IOB ONLINE for the benefit of staff
members. The Bank has given necessary training to 1412 staff members
for the use of Hindi in computers. The Bank has published all the four
issues of quarterly Hindi Magazine "VANI" in print as well as in
digital form. The Banks website has been made available in Hindi also.
The Bank has been awarded Third Prize for Hindi house magazine "VANI"
for the year 2009-10 by Reserve Bank of India in the Inter-Bank Hindi
Magazine Competition for Hindi house magazines of banks and financial
institutions. The Bank has been awarded Consolatiion Prize under Indira
Gandhi Rajbhasha Shield for the year 2009-10 for commendable work in
the area of Official Language Implementation. The award was received by
our Banks General Manager Shri Ashok Shankar from His Excellency Vice
President of India Shri Mohd. Hamid Ansari on 14th September, 2010.
Regional Offices were inspected on Official Language implementation by
Official Language Department, Central Office and Rajbhasha Shields were
awarded to Regional Offices and branches doing good work in official
language implementation.
Annual Official Language Review Meeting and Unicode training for
Official Language Officers was held from18th to 20th June 2010 to
assess the progress made in the area of Official Language
implementation in Regional Offices. The drafting and evidence
Sub-Committee of Parliamentary Committee on Official Language had
discussions with the Chairman and heads of Banks of Town Official
Language Committees at Coimbatore and Jhansi. The Bank was also
included for discussion and the committee expressed satisfaction over
the performance of the Bank at these centers.
As Convenor of Chennai Town Official Language Implementation Committee,
the Bank has received the Second Prize for its efforts in
implementation of Official Language Policy during the year 2009-10 from
Official Language Department, Ministry of Home Affairs, Government of
India. The Prize was given by Shri Ajay Makan, Honble Minister of
State for Home Affairs, New Delhi on 22nd December 2010. On behalf of
the committee, the Bank conducted two General Hindi Workshops, 12
Inter-Bank Hindi competitions, Joint Hindi Month Celebration function
and Hindi Unicode training programme for the staff members of member
banks / Financial Institutions. A special Seminar in Hindi on
Increasing Banking business/ Human Resource Development and Importance
of Marketing in banks / Prevention of frauds for Executives were held
on 21.02.2011 and 12.03.2011 respectively. In addition to this, two
half yearly meetings were also conducted. Two issues of half-yearly
magazine of "Chennai Bharathi" were brought out.
Corporate Governance
Corporate Governance extends beyond Corporate Law. Its fundamental
principle is not only fulfilling the requirement of law but also
fulfilling its responsibility towards the society. The social
responsibility evokes from the good governance enhances the social
relevancy of a business; It is needed to create a corporate culture,
openness and social responsive corporate entity.
The Bank has laid down a well-defined, Code of Conduct, which addresses
issues of integrity, conflict of interest and confidentiality and
stress the need of ethical conduct, which is the basis for good
governance. This Code of Conduct is applicable to all the members of
the Board and the Senior Management (i.e. General Manager) of the Bank.
The Bank has complied with the guidelines of Reserve Bank of India,
Securities and Exchange Board of India and other regulatory authorities
for Corporate Governance, which has been examined by the Statutory
Central Auditor. The Bank gives high priority to good Governance, which
reflects in transparent ownership structure, management and accounting
practices of the Bank. The Board recognizes its role in promoting good
governance and in creating a framework of best practices, processes and
ethics to observe and foster high ethical standards.
The Bank facilitates good Corporate Governance by its commitment for
ethical practices in the conduct of its business, to ensure
transparency and efficiency. The Bank is also committed to follow high
disclosure standards and transparency in financial reporting so as to
keep investors and stakeholders adequately informed. It is essential
for proper accountability between organization and its stakeholders.
Pursuant to Clause 49 of the Listing Agreement, Management Discussion &
Analysis Report, Report on Corporate Governance as well as certificate
by the auditors regarding Compliance of the conditions of Corporate
Governance form part of this Annual report.
Board of Directors
Shri S.A.Bhat, Chairman and Managing Director, demitted office on
31.10.2010 on his superannuation. Shri M.Narendra assumed charge as
Chairman and Managing Director on 01.11.2010. Shri Y.L. Madan,
Executive Director, demitted office on 31.08.2010 on his
superannuation. Shri A.K.Bansal, assumed charge as Executive Director
on 01.09.2010.
Smt. Chitra Chandramouliswaran, Reserve Bank of India nominee director,
demitted office on 29.07.2010. The Government of India (GOI) nominated
Shri S.V.Raghavan, as Reserve Bank of India nominee director with
effect from 30.07.2010.
Shri N.Sridaran, demitted office as Workmen Employee Director on
19.04.2010, on completion of his tenure of three years. The Government
of India (GOI) nominated Shri Sridhar Lal Lakhotia, as Workmen Employee
Director with effect from 9.8.2010.
The Board of Directors place on record the valuable contributions made
by the erstwhile Directors and extend a warm welcome to the new
Directors.
Acknowledgements
The Board of Director place on record the valuable co-operation
received from the Government of India, Reserve Bank of India,
Securities and Exchange Board of India (SEBI) and Stock Exchanges,
various State Governments and Financial Institutions. The Board
expresses its gratitude to the Hong Kong Monetary Authority, Monetary
Authority of Singapore, Financial Supervisory Services, Korea, Central
Bank of Sri Lanka, China Banking Regulatory Commission, Bank Negara,
Malaysia, Bank of Thailand, State Bank of Vietnam and Central Bank of
UAE for their support.
The Board of Directors records the patronage and goodwill of the valued
customers, shareholders, other stakeholders and correspondents of the
Bank in India and abroad. The Directors are happy that the industrial
relations are very cordial and happy on account of positive attitude on
the part of Employees Union and OfficersAssociation.
For and on behalf of the Board of Directors
M.NARENDRA
Chairman and Managing Director
Chennai
May 2 , 2011
Mar 31, 2010
The Board of Directors have great pleasure in presenting the Annual
Report together with audited Balance Sheet and Profit and Loss Account
of the Bank for the year ended March 31, 2010.
During 2009-10, the Banks performance is to be viewed in the backdrop
of economic slow down. The Bank has grown in a balanced manner and
crossed the business level of Rs. 1,90,000 crore mark. The Bank has
focused its attention in consciously shedding high cost deposits,
cautious credit expansion and NPA Recovery during the year.
Global Business Performance
The Banks global deposits went up from Rs. 1,00,116 crore in 2008-09
to Rs. 1,10,795 crore in 2009-10 by 10.67 %. Global gross advances
expanded from Rs. 75,810 crore to Rs. 80,782 crore at 6.56 %. Total
business reached Rs. 1,91,577 crore (growth at 8.90 %).
Overseas Branches
During the year the Bank has opened Representative Office at Dubai and
the Office has become fully operational from February 2010. The Bank
signed the joint venture with Bank of Baroda and Andhra Bank to open a
Banking subsidiary in Malaysia. The subsidiary has applied for license
from Bank Negara, the central bank of Malaysia.
As at the end of March 2010, the Bank had 13 establishments abroad,
comprising 6 full-fledged branches (two branches in Hongkong and one
each at Singapore, South Korea, Sri Lanka and Bangkok) 4 Representative
offices (Guangzhou-China, Kuala Lumpur-Malaysia, Ho Chi Minh
City-Vietnam and Al karama-Dubai), 2 Remittance Centres (Boonlay and
Serangoon, Singapore) and 1 Extension counter in Sri Lanka.
Financial Performance
Global operating profit of the Bank was at Rs.1,845 crore in 2009-10 as
against Rs.2,524 crore mainly due to lower treasury gains in the
subdued market condition and increased liability for Pension, Gratuity
and wage revision relating to employees of the Bank in the backdrop of
ongoing wage settlement negotiation process.
Provisions
The Bank has made a total provision of Rs.1,138 crore in keeping with
the guidelines issued by the RBI.
Net Profit Dividend
Net profit of the Bank was at Rs.707 crore for 2009-10 as against Rs.
1,326 crore in 2008-09 due to lower operating profit and increased
provision for ageing Non Performing Assets as per RBI guidelines.
Dividend for the year 2009-10 is proposed at 35 % as against 45% paid
last year.
Income and Expenditure Analysis
The total income increased to Rs. 11,389 crore in 2009-10 compared to
Rs.11,237 crore in 2008-09, with a marginal growth of 1.35% on account
of reduction in treasury income by Rs.345 crore over last year and
lower growth in credit due to global economic recession. The total
interest income increased to Rs. 10,246 crore in 2009-10 from Rs.9,641
crore in 2008-09 at 6.28%. Interest income on Advances increased to Rs.
7660 crore compared to Rs.7,290 crore in the last year. Interest
received on advances impacted by decline in domestic yield on advances
to 10.44 % in 2009-10 from 11.13% in 2008-09 on account of downward
revision in Bench Mark Prime Lending Rate by 50 basis points effective
from July 1, 2009.
The commission and exchange earnings stood at Rs. 578 crore against
Rs.594 crore last year. Profit on exchange was at Rs. 127crore as
compared to Rs.157 crore due to volatility in the currency market. The
profit on sale of investments was lower at Rs. 292 crore against Rs.
637 crore last year in the subdued market.
The increase in interest expenditure was significantly brought down to
4.52 % in 2009-10 from 28.04 % in 2008-09, due to conscious shedding of
card-plus deposits and successive interest rate realignment on domestic
term deposits during the year. Card- plus deposits as percentage to
total domestic deposits significantly came down to 3.82 % at the end of
March 2010 compared to 14.10% in March 2009. As a result, the domestic
cost of deposits declined by 51 basis points from 6.87% in 2008-09 to
6.36% in 2009-10.
Total operating expenses increased to Rs.2,466 crore compared to
Rs.1,942 crore last year due to increased provision for pension,
gratuity and wage revision which is under negotiation at the industry
level. The non-staff expenditure increased to Rs.731 crore from Rs. 670
crore mainly due to higher depreciation, rent and taxes during the
year. Net Interest Income increased to Rs. 3,168 crore in 2009-10 with
a growth of 10.39 %. Consequently Net Interest Margin was lower at
2.74% as against 2.84% in last year mainly due to downward revision in
Bench Mark Prime Lending rate in line with the market. Hence the Banks
operating profit stood at Rs.1,845 crore for 2009-10 as against
Rs.2,524 crore in 2008-09.
Capital Adequacy Ratio
The capital adequacy ratio of the Bank improved from 13.20% as at the
end of March 2009 to 14.78% as at the end of March 2010 as per the
Basel II norms.
Branch Network
The Bank opened 65 new branches and upgraded 20 extension counters into
full-fledged branches in the year ended March 2010. Total domestic
branch network reached 2,002 as at the end of the reporting year. As
regards population group wise break-up, rural branches numbered 589
accounting for 29.4% of the total branches, semi-urban 520(26%), urban
492(24.6%) and metropolitan 401(20%).
Customer Service
The Bank has adopted the Code of Commitment to Banks Customers as
drafted by Banking Codes and Standards Board of India (BCSBI). The Code
has been revised during August 2009. As part of customer education
"Information to Customers" Booklet is made available at all branches.
Customer Fortnight was observed in select branches in May 2009 and in
all branches during November 2009.
During the year, incorporating certain provisions of USD Cheque
Collection Policy, the Compensation Policy document related to customer
service was amended.
The details of customer complaints received and redressed are given
below.
a. Pending at the beginning of the year 47
b. Received during the year - 1291
c. Redressed during the year - 1280
d. Pending at the end of the year - 58
During the year 2009-10, 1338 complaints were handled (including the
complaints carried over from the earlier year) of which 1280 complaints
were resolved. The redressal rate was 95.67 % .
Number of awards passed by the Banking Ombudsman and implemented by the
Bank are as follows.
a. Unimplemented awards at the beginning of the year - 2
b. Awards passed by Banking Ombudsman during the year - 1
c. Awards implemented during the year - 1
d. Appeal against the awards allowed in the High Court - 1
e. Unimplemented awards at the end of the year - 1
Customer Service Centre, Chennai City, for which the Bank is the
Convener, had resolved all the complaints during the year. Customers
are provided with the facility of Toll Free Tele-services (No. 1800-
425-4445) by engaging an outside agency for receiving complaints. These
complaints are resolved within 48 hours. This facility is being
upgraded for 24x7 model.
Retail Banking and Marketing
Income from fee-based products including Life and General Insurance
Products and Insurance Linked Products, grew by 53.69 % over the
previous year. Life Insurance Linked Products, IOB Jeevan, IOB
Healthcare Plus, Vidya Jyothi with Suraksha performed well with wider
coverage and improved income.
Distribution of life policies, as a Corporate Agent of Life Insurance
Corporation of India, witnessed growth both in premium as well as
commission. So also were the non-life insurance products of Universal
Sompo General Insurance.
The income from marketing of life policies, life insurance linked
policies, non-life policies including health care was Rs. 14.28 crore.
Income from sale of retail gold coins clocked Rs.8.64 crore. Retail
Loans grew at 15.5 % over the previous year with major contribution
from Housing Loans.
The following campaigns were conducted during the year 2009-10.
1. CASA campaign
2. Retail Sale of Gold Coins.
3. Marketing of Healthcare Plus Policies.
4. Campaign for Asset Insurance Cover.
5. Marketing of Debit Cards.
6. Special Tax Saver Campaign
There was all round improvement in volume and increase in income in the
retail-banking segment.
Official Language Policy
During the year 2009-10, the Bank has taken all efforts to implement
the Official Language Policy of Government of India. During the year,
248 Staff members, who did not possess working knowledge of Hindi, were
trained in IOB Praveen and Banking Pragya Courses. 2,809 Staff members,
possessing working knowledge of Hindi, were trained in General Hindi
Workshops held during the year. Rajbhasha Sangoshti was held on
September 12, 2009 for heads of Central Office departments to
strengthen the Official Language Implementation in Central Office.
Minutes of meetings of all board level committees were translated in
Hindi. As per the directives of Govt, of India, the Bank has enabled
Hindi Unicode font in all Regional Offices and has provided the
facility of Hindi font Shusha on IOB ONLINE for downloading purpose in
branches. Bank has also provided the Banking terminology on IOB ONLINE
for the benefit of staff members. Bank has given necessary training to
2,445 staff members for the use of Hindi in computers. Bank has
published all the four issues of quarterly Hindi Magazine "VANI" in
print as well as in digital form. Banks website has been made
available in Hindi also.
Bank won the First Prize under Indira Gandhi Rajbhasha Shield for the
year 2008-09 for commendable work in the area of Official Language
Implementation. Shri S A Bhat, Chairman & Managing Director of the
Bank, received this Award from Her Excellency President of India Smt.
Pratibha Devi Singh Patil on September 14, 2009.
Reserve Bank of India awarded Second Prize to the Bank for Hindi house
magazine "VANI" for the year 2008-09 in the Inter-Bank & Financial
Institutions Hindi in-house Magazine Competition.
Regional Offices were inspected on Official Language implementation by
Official Language Department, Central Office and Rajbhasha Shields were
awarded to Regional Offices and branches doing good work in official
language implementation.
The drafting and evidence Sub -Committee of Parliamentary Committee on
Official Language had discussions with the Chairmen and heads of Banks
of Town Official Language Committees at Raipur. The Bank was also
invited for discussion and the committee expressed satisfaction over
the performance of the Bank at this centre.
As convener of Chennai Town Official Language Implementation Committee,
the Bank has received the Second Prize for its efforts in
implementation of Official Language Policy during the year 2008-09 from
Official Language Department, Ministry of Home Affairs, Government of
India. The Prize was given by Shri Ajay Makan, Minister of State for
Home Affairs, New Delhi on October 9, 2009. On behalf of the committee,
the Bank conducted two General Hindi Workshops, 12 Inter-Bank Hindi
competitions, Joint Hindi Month Celebration function and Hindi Unicode
training programme for the staff members of member banks / Financial
Institutions. A special Seminar in Hindi on Customer Service for
Managers of Scale IV was held on January 8 ,2010. In addition to this
two half yearly meetings were also conducted.
Regional Rural Banks
The Regional Rural Banks (RRBs) sponsored by the Bank, viz Pandyan
Grama Bank and Neelachal Gramya Bank performed well during the year.
Both the RRBs recorded net profit during the year.
Corporate Governance
The Bank prides itself on its diligence in ensuring compliance with
norms laid down by regulatory authorities. The Bank lays emphasis on
the need for ensuring that structures and processes are put in place to
help in fulfilling its governance responsibilities. The Board
recognizes its role in promoting good governance and in creating a
framework of best practices, processes and ethics to observe and foster
high ethical standards.
The Bank has laid down a well-defined Code of Conduct, which address
issues of integrity, conflict of interest and confidentiality and
stress the need for ethical conduct, which is the basis of good
governance. This Code of Conduct is applicable to all the members of
the Board and Senior Management (i.e. General Managers) of the Bank.
High standards of reporting and disclosure are essential for proper
accountability between an entity and its investors/stakeholders. Thus,
the Bank facilitates and adopts good Corporate Governance by its
commitment to ensuring timeliness and integrity of disclosures and
financial reporting so as to keep investors and stakeholders adequately
informed to ensure transparency and efficiency.
Pursuant to Clause 49 of the Listing Agreement, Management Discussion &
Analysis Report, Report on Corporate Governance as well as Certificate
by the auditors regarding compliance of the conditions of Corporate
Governance, form part of this Annual Report.
Board of Directors
Shri G. Narayanan, Executive Director, demitted office on October 31,
2009. Smt. Nupur Mitra assumed charge as one more Executive Director on
December 7, 2009 . Shri M. Ravindra Vikram, Director under section 9
(3) (g) of the Banking Companies (Acquisition and Transfer of
Undertakings) Act 1970 - Chartered Accountant Category, demitted office
as director on October 10, 2009 on completion of his tenure of three
years.
The Government of India nominated Shri Sooraj Khatri as a part-time
non-official Director for a second term of three years with effect from
October 26, 2009.
Shri J. D. Sharma, presently President of the Indian Overseas Bank
Officers Association (IOBOA) demitted office as Officer Employee
Director on November 30, 2009 . The Government of India nominated Shri
K. Ananda Kumar, presently General Secretary of IOBOA, as Officer
Employee Director for a period of three years with effect from March
26, 2010.
The Board of Directors place on record the valuable contributions made
by the erstwhile Directors and extend a warm welcome to the new
Directors.
Acknowledgements
The Board of Directors place on record their gratitude to the valued
customers, shareholders, other stakeholders and correspondents of the
Bank in India and abroad, for their goodwill, patronage and support.
The Board of Directors acknowledge with gratitude the valuable guidance
and cooperation received from the Government of India, Reserve Bank of
India, Securities and Exchange Board of India, Stock Exchanges, various
State Governments and Financial Institutions. The Board is also
thankful to the Hong Kong Monetary Authority, Monetary Authority of
Singapore, Financial Supervisory Services - Korea, Central Bank of Sri
Lanka, China Banking Regulatory Commission, Bank Negara - Malaysia,
Bank of Thailand, State Bank of Vietnam and Central Bank of UAE for
their support.
Industrial relations in the Bank have been cordial due to the positive
attitude of the Employees Union and Officers Association. The Board
of Directors expresses their appreciation of the contribution made by
the members of the staff.
For and on behalf of the Board of Directors
Chennai S.A.BHAT
April 29, 2010 Chairman and 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
More Information on Indian Overseas Bank
-
Indian Overseas Bank Tools
- Bulk Deals
- Block Deals
-
Indian Overseas Bank Company Details
- Company History
- Management Team
- Capital Structure
- Product Mix
- Banker/Auditor/Registrar
-
Company History
- BSE Price History
- NSE Price History
-
Indian Overseas Bank Key Financial Ratios
- Ratios
-
Indian Overseas Bank Results
- Quarterly Results
- Half Yearly Results
- Nine Months Results
- Annual Results
-
Indian Overseas Bank Financial Data
- Audited Results
- Cash Flow
- Balance Sheet
-
Indian Overseas Bank Reports
- Accounting Policies
- Auditors Report
- Directors Report
- Notes To Account
-
Indian Overseas Bank Corporate Announcements
- Book Closure
- Dividend
- Board Meetings
