Directors Report of State Bank Of Mysore
Mar 31, 2015
Dear Members
To the State Bank of India, Reserve Bank of India and the Central
Government, in terms of Section 43(1) of State Bank of India
(Subsidiary Banks) Act, 1959.
1. MANAGEMENT DISCUSSIONS AND ANALYSIS
Management Discussion and Analysis is available in separate section.
2. REVIEW OF BANKING OPERATIONS
2.1. Market Share and Business Growth
2.1.1. The business levels of the Bank and the position of market share
in recent years are furnished hereunder:-
(RS. in crores)
Year ended 31st March 2011 2012 2013 2014 2015
Aggregate Deposits 42,779 49,663 56,712 61,087 65,058
(Percentage of growth) (113) (161) (14.2) (1.1) (6.5)
Of which Non-Bulk (69.9) (706) (74 7) (831) (9°.6)
Deposits (%)
29,844 35,041 42,360 50,753 58,946
Gr. In Non-Bulk Dep (%) (7.7) (17.4) (20.9) (19.8) (16.1)
Deposits Market share % 0 79 0 78 0 83 0.76* 0.76*
Total Advances 34,442 40,653 45,981 50,862 53,296
1 (Percentage of growth) (15 3) (18.0) (131) (106) (48)
Adavance Market share % 0.87 0.85 0.85 0.79* 0.78*
2.1.2. The Bank has seen continuity in growth during the current year,
with aggregate deposits reaching a level of RS. 65,058 crs, a growth of
RS. 3,971 crs over the previous year at a rate of 6.5%. The growth in
Non Bulk deposit at 16.1% is in tune with the past trend and in
accordance with our conscious policy of shedding high cost/bulk
deposits. The total advances have reached a level of RS.53,296 crs,
recording a growth of RS. 2,434 crs over the previous year at a growth
rate of 4.8 %. As on 23.03.2015 the Bank''s market share of Deposits
remained intact at 0.76%, though Bank''s market share of Advances has
decreased marginally to 0.78% from 0.79%.
2.2 Kev Performance Indicators
Sl. No Key Indicators 2012-13 2013-14 2014-15
1. Net Profit (RS. in crs) 416.10 274.25 409
2. Return on Assets (%) 0.66 0.40 0.54
3. Return on Equity (%) 11.05 6.84 9.40
4. Expenses - Income Ratio (%) 46.26 53.40 53.34
5. Earnings per Share (in RS.) 88.91 57.39 85
6. (%) Gross NPA to Gross 4.53 5.54 4.00
Advances (%)
7. Net NPA to Net Advance (%) 2.69 3.29 2.16
8. Cost of Deposit 7.32 7.21 7.25
9. Yield on Advances 11.62 10.93 11.11
10. NIM 3.22 3.02 2.98
*The Bank has recorded improved performance over the previous year
under these parameters
2.3. Income
Total Income of the Bank increased by 12%, from RS. 6,895 crs as at
March 2014 to RS. 7,706 crs in March 2015. Interest Income increased
from RS. 6,323 crs to RS. 6940 crs (10%). Average Yield on Advances
increased from 10.93% in 2013-14 to 11.11 % during 2014-15, while
Average Yield on Investments increased from 7.37% in March 2014 to 7.49
% during the same period. Non Interest Income increased by impressive
34% from RS. 572 crs to RS. 767 crs with the growth in profit from sale
of investments improving from RS. 69.36 crs to RS. 125 crs (81%) and
Recovery from Written Off Accounts recording whopping 155% growth over
RS. 45 crs in Mar''14 to RS. 115 crs in Mar''15. The ratio of
Non-Interest Income to Total Income, therefore, stood at a higher level
of 10% (8.4% last year).
2.4. Expenses
The Total Expenditure (before provisions and contingencies) increased
by RS. 574 crs, from RS. 5,732 crs in 2013-14 to RS. 6,376 crs in
2014-15. While Interest Expenses increased by RS. 456 crs (10.5%), the
Operating Expenses increased by RS. 128 crs (9%) during the current
year. The Average Cost of Deposits increased from 7.21% in March 2014
to 7.25.% in March,2015 owing to customers'' marked preference for
investment in TD of 1-3 years maturities, despite increase in CASA
share from 33.25% (31.03.14) to 33.73% (31.03.15) and decrease in
higher cost bulk deposits.
2.5. Profit
While the Operating Profit increased from RS. 1164 crs in 2013-14 to
RS. 1,331 crs in 2014-15 (14%), the Net Profit increased from RS.
274.25 crs to RS. 409 crs (49%). The improvement in bottom-line is on
account of proactive steps taken by the Bank in recovery of NPAs and
AUC and also by Strategic Sale of Assets. While Return on Assets (ROA)
increased from 0.40% to 0.54% owing to improved profit despite growth
in average assets, Return on Equity (ROE) also increased from 6.84% to
9.40% during the year.
2.6. Dividend
Keeping in mind the need to strengthen Tier I capital of the Bank in
the current economic scenario, the Board of Directors has declared a
dividend of 60% (Rs. 6 per Equity share of Rs. 10/-) for the year
2014-15. This involved a pay-out of Rs. 34.59 crs, including the tax
component. The pay-out ratio for 2014-15 works out to 8.46 %, as
against 5.25 % for 201314.
3. BUSIneSS reVIeW
3.1. Deposits
3.1.1. Total Deposits of the Bank grew by Rs. 4,504 crs, to reach the
level of Rs. 66,064 crs. Aggregate Deposits (total deposits excl.
inter Bank deposits) stood at Rs. 65,058 crs as at March 2015,
recording a growth of Rs. 3,971 crs (6.5%) during the year. The share
of CASA deposits to Aggregate Deposits increased from 33.25% in March
2014 to 33.73 % in March 2015.
3.1.2. Personal Segment Deposits
Personal segment deposits grew by RS.5,236 crs, registering a growth of
15.8% to reach a level of RS. 38,342 crs as on 31st March 2015. NRE
deposit registered a growth of 26%, Recurring Deposit grew by 37% and
Term Deposit by 21.5%. Share of Personal segment deposits to aggregate
deposits has increased from 54.2% to 58.9% during the year. The number
of deposit accounts under Personal segment have increased by 17,20,185
during the year.
3.1.3 To further boost deposits growth under Personal segment, a new
product viz "Mybank Sanchay", a Savings Bank with add on benefits
including free accidental Insurance Cover, free Gold/ Platinum Cards
etc was introduced. A special campaign was also held from 02 Feb 2015
to 31st March 2015.
3.1.4 DEPOSITORS EDUCATION AND AWARENESS FUND (DEAF) SCHEME 2014
"Pursuant to the amendment of the Banking Regulation Act, 1949, and
under the provision of section 26A inserted, the amount to the credit
of any account in India with any Bank, which has not been operated upon
for a period of 10 years and more shall be credited to the Fund within
a period of three months from the expiry of said period of ten years.
The amount due under the Scheme is to be transferred to DEAF account
with Reserve Bank of India before closing of the banking hours of the
last working day of every month".
''The Bank has transferred a sum of RS.46.15 crores to DEAF account from
June 2014 to December 2014.''
3.2. Credit Expansion
3.2.1.While the total advances of the Bank increased from RS. 50,862
crs to RS.53,296 crs, thus registering a growth of RS. 2,434crs ( 4.8%)
during the year. Net advances (i.e. net of NPA related/floating
Provisions, and outstanding under Staff Festival Advance) of the Bank
increased from '' 49,482crs in March 2014 to RS.52,026 crs. Credit
Deposit Ratio of the Bank decreased from 83.3% in March 2014 to 81.9%
in March 2015 due to our highly selective approach in taking further
exposure in the Corporate sector.
3.2.2 Corporate network
Our Bank has a Corporate Network consisting of 11 large branches spread
over Metro and other big centers of the country, for catering to the
needs of large Corporates.
The Corporate Network of the Bank has achieved a business level of
RS. 31,480.71crs, comprising RS. 4386.50 crs of deposits & RS.
27,094.21 crs of advances, as on 31.03.2015. The credit to CNW accounts
form 51% of the total advance and 88% of the C&I advance of our Bank.
The current sluggishness in the economy has also impacted Corporate
advances portfolio. In order to improve the quality of assets, the Bank
has been consciously moving its portfolio to investment grade and above
[BBB or above], which accounts for 78% of total advances. This strategy
has started yielding desired results.
The CNW Network opened 1 more branch at Mysore and upgraded Ahmedabad
Branch to Corporate Network grade in FY 2014-15, besides consolidating
Advances from other nearby branches, to lend more strength and quality
to its portfolio.
Highlights of the performance of Corporate Network in FY 2014-15 are
summarized below:
* With the slew of measures like recoveries, restructuring, sale of
assets, the Network has significantly brought down its NPA level by 33%
with positive impact resulting in reduction of Bank''s NPA to 4%
* Total Forex Turnover of CNW was at RS. 24,46,526 crs, accounting for
89% of the total Bank''s Forex Turnover, recording an increase of 87%
over FY14.
* The growth in AAA to A grade of advances [ECR] is apprx. 41%.
3.2.3. Credit Committees
Credit Committees were first established in May 2002, in order to
facilitate taking decisions through committee approach to provide more
professional touch to credit appraisal, by thread-bare discussion on
the risk factors. Two committees have been constituted at Head office
viz. HOCC-I chaired by Managing Director and HOCC-II chaired by Chief
General Manager (CB) with CGM/GMs as members of the committee.
The Bank has held 53 HOCC-I and 39 HOCC-II Meetings, respectively,
during 2014-15, to facilitate growth in advances.
Besides the above HOCCs, in order to provide speedier credit and
consequent to devolution of wider powers to the Networks, 4 Network
Credit Committees with Network General Managers as Chairmen were
constituted and 97 meetings were held in aggregate.
Similar Committees are also constituted at Zonal & Regional office
levels viz. ZOCC & ROCC respectively.
3.3 Personal Segment Advances
Personal segment advances registered a record growth of RS. 1,636 crs
(18.46%) to reach a level of RS. 10,500 crs. Special campaigns were
conducted during the year to provide boost to the growth in Housing
loans including Overdraft under Max Gain facility, Car loans, Gold
loans etc. Housing loans recorded a growth of RS. 974 crs (22.15%) to
reach a level of RS.5,372 crs. Car loans recorded a growth of RS. 118
crs (16.67%) to reach a level of RS. 826 crs and Personal loans
recorded a growth of RS. 287 crs (25.40.%) to reach a level of RS.
1,417 crs.
3.4. Priority Sector Lending and Social Banking
3.4.1. Total credit provided to the Priority sector as on March, 2015
stood at RS.19,401 crs (36.5% of ANBC), including Inter Bank
Participation certificate (IBPC) of RS. 485 crs issued by Kaveri
Grameena Bank, as against RS. 17,813 crs, including IBPC of RS. 375
crs, in the previous year ended March 2014 (yoy growth 8.9%).
Segment-wise status of these advances are as under:
* agriculture: The direct Agricultural advances increased by 16.8% from
RS. 6,377crs in FY14 to RS. 7,448 crs in FY15. Total agricultural
advances went up from RS. 9,819 crs (including IBP of RS. 375 crs and
RIDF investments of Rs.2,356 crs) to RS. 10,643 crs (including IBP of
RS. 485 crs and RIDF investments to the extent of RS. 2,263 crs).
* FreshAgriculturalAdvances sanctioned during FY15 stood at RS. 4,988
crs benefiting 2.45 lacs farmers.
* Agricultural Gold loan registered a growth of 39%, from RS. 1,314 crs
to RS.1,828 crs.
* Micro and Small Enterprises (MSE): The Bank''s Advances to Micro &
Small Enterprises for year the ended FY14-15 stood at RS. 5,267 crs as
against RS. 4,524 crs for FY13-14 reflects a yoy growth of over 16.4%.
* Personal & Services Banking (P&SB): Housing loans under
priority sector reached a level of RS.2,865 crs during the year.
Education loans under priority sector stood at a level of RS. 625 crs
as at March 15.
3.5. Agriculture Finance:
The following initiatives were taken to increase the flow of credit to
the Agriculture Segment.
* We have introduced a scheme for Polyhouse/Green House financing. Bank
has financed RS. 3.41 crs consisting of 15 accounts under the said
scheme.
* Bank has entered into an MOU with M/s RML information Services Pvt
Limited for providing information on agricultural practices, local
weather forecast and commodity specific market intelligence for crops
through SMS to its subscribers.
* Bank has issued 15,149 Rupay Kisan cards to eligible KCC account
holders during the year in compliance with GOI directives.
* Interest subvention amounting to RS.18.53 crs has been provided under
Agri segment to farmers for prompt repayment of loan.
* During 2014-15, GOK declared 35 taluks as drought-hit. All branches
of the Bank considered rephasement/ restructuring of dues from farmers
who were in distress. Additional financing in the shape of production
and investment credit was also extended to such farmers.
In order to provide some succour from the hardship suffered by the
farmers from drought and other natural calamities, Bank launched OTS
scheme to settle old NPA accounts. 4,083 accounts amounting to RS.
47.88 crs were settled during the year.
3.5.1 SELF HELP GROUP (SHG) LENDING
The Bank has credit linked 8,157 groups with an advance amount of RS.
288.35 cr during the current year, taking the cumulative total of such
credit linkage programme to 1,64,616 groups with a financial outlay of
RS. 2,620.37 cr up to March 2015. As on 31/03/2015, there are 22,143
SHGs with an outstanding balance of RS. 663.46 cr.
The Ministry of Rural Development, Government of India has launched
National Rural Livelihood Mission by replacing SGSY scheme with effect
from 01/04/2013. We have financed 6,226 women SHGs under National Rural
Livelihood Mission (NRLM) with an advance amount of RS. 241.49 cr
during FY2014-15 and as on 31/03/2015, there are around 19,926 women
SHGs with an outstanding balance of RS. 490.50 cr. Necessary benefits
have been passed on to all eligible women SHGs and claims for interest
subvention have been lodged with NRLM Department of Ministry of Rural
Development, Government of India.
The Bank has credit linked 672 Joint Liability Groups with an advance
amount of RS. 9.33 cr during FY2014-15 and as on 31/03/2015, there are
1,925 JLGs with an outstanding balance of RS. 24.44 cr.
3.6. Micro and Small Enterprises (Manufacturing)
The Bank''s advances to Micro and Small Enterprises (Manufacturing) as
at March RS.15 are RS. 2,781 crs, as against RS. 2,628 crs as on March
2014, registering an increase of RS. 153 crs (yoy 5.8%) during the year
3.7. Micro and Small Enterprises (Services)
The Bank''s advances to Micro and Small Enterprises (Services) as at
March ''15 is RS. 2,486 crs, as against RS. 1,896 crs as on March 2014,
registering an increase of RS. 590 crs (yoy 31%) during the year.
During the year 2014-15, Bank has taken various initiatives to increase
flow of credit to MSE sector. Interest rates on all loan schemes were
rationalized to give equal focus to each scheme under MSE segment. We
have re-designating 14 General Banking branches as MSE Specialized
branches in addition to 6 existing SME specialized branches, in
compliance to the RBI''s guidelines of having at least one MSE
Specialized branch in each district, We have also identified 74 more
branches for targeted lending under this segment. Uniform loan
application form for MSEs for loans upto RS. 1.00 cr has been
introduced, which is simple and user-friendly.
During the year 2014-15, Bank introduced web-based Credit Proposal
Tracking System (CPTS) exclusively for MSE segment, for online
monitoring of loan applications received by the Bank at various levels.
It has helped in ensuring timely delivery of credit to the MSE sector.
Bank also rolled out new product "SBM Pharma" to capture the business
of Retail/Wholesale traders dealing in pharmaceutical and surgical.
Customer meet/ Seminars and workshops were conducted at various key
centres including Bangalore (Peenya), Karwar, Gulbarga, Mangalore,
Hubli etc. in association with local trade bodies to get feedback from
the customers/industry and increase our outreach.
During the year 2014-15, Bank has signed an MOU with National Small
Industries Corporation to further boost up the lending to MSE Sector.
3.8 Credit Guarantee Scheme
The Bank continued to extend collateral-free financial assistance to
MSE sector by participating in Credit Guarantee Scheme of CGTMSE.
CGTMSE cover is available to eligible MSE units upto RS.1 crore.
Guarantee fee on loans upto RS. 50 lacs are borne by the Bank. As at
March 2015, 7,239 accounts amounting to RS. 462 crs were covered under
the Scheme.
3.9 Assistance to Weaker Sections of the Society
The Bank continued to extend financial assistance to Weaker Sections of
the Society, comprising small & marginal farmers with land-holdings
upto 5 acres, landless labourers, tenant farmers, village & cottage
industries with individual limits not exceeding RS. 50,000, besides
assistance under schematic lending to SJSRY, SGSY, SLRS, DRI, Self-Help
Groups and to SC/ST beneficiaries. The outstanding amount under lending
to Weaker Sections stood at RS. 6,411 crs as on March 2015,
constituting 12% of ANBC, as against the stipulated benchmark of 10%.
3.10 assistance to Women Entrepreneurs
Being fully conscious of the deep positive financial and social impact
of extending credit to women entrepreneurs, we continued to lay special
emphasis on extending liberalized credit to MSE units being run by
women entrepreneurs. The Bank''s total credit to women as at March 2015
stood at RS. 3,636 crs covering 2.04 lacs beneficiaries, which works
out to 6.8% of Adjusted Net Bank Credit, as against the stipulated
benchmark of 5%.
3.11 Measures to improve the economic conditions of SCs/STs
In line with the national objective to extend all-out support for the
development of SCs/STs, we, as a responsible corporate citizen, are
ensuring that adequate credit is available to SCs/STs, in their role of
self-employed entrepreneurs. Credit is extended to this section in
tie-up with the State-level development corporations dedicated to
SCs/STs. The Bank''s assistance to the SCs/STs under various schemes as
at March 2015 stood at RS.672 crs covering 1,00,425 beneficiaries,
which forms 3.5 % of Priority Sector Advances.
3.12 Finance to Minority Communities
With the objective of promoting economic activities amongst the
notified minorities, Bank has been whole-heartedly participating in
this national task for promoting self-employment activities amongst the
eligible beneficiaries belonging to the minority communities. The
Bank''s assistance to the notified minorities under various schemes as
at March 2015 stood at RS. 2,038 crs covering 43,668 beneficiaries,
which forms 10.5% of Priority Sector Advances.
3.13 Government Sponsored Schemes
The position of assistance rendered under various Government sponsored
schemes by our Bank as at March 2015 is as detailed below:-
3.13.1 Prime Minister''s Employment Generation Programme (PMEGP)
"Prime Minister''s Employment Generation Programme (PMEGP)" is the
scheme launched by GOI to empower first generation entrepreneurs to set
up micro enterprises across the country, by subsuming the earlier Prime
Minister''s Rozgar Yojana (PMRY) and Khadi & Village Industries
Commission''s Rural Employment Generation Programme (REGP), from the FY
2008-09. The Bank''s total credit under PMEGP Scheme as at March 2015
stood at RS.57.7 crs, covering 1,540 beneficiaries.
3.13.2 National Urban Livelihood Mission Scheme (erstwhile SJSRY)
The Bank has extended financial assistance of RS. 11.25 crs under NULM
during the year to 1,222 beneficiaries.
Total amount outstanding under NULM scheme as on March 2015 is RS.
33.74crs, covering 4,402 beneficiaries.
3.13.3 Differential Rate of Interest (Dn) Scheme
The Bank''s advances under DRI scheme stood at RS. 15.9crs as at March
2015 covering 13,605 beneficiaries and the share of advances to SC/ST
beneficiaries under DRI scheme is 52.8%.
3.14 Investments
3.14.1. The total investments of the Bank in Government securities,
other approved securities and Non-SLR securities increased from RS.
19,300 crs as at March 2014 to RS. 20,663 crs as at March 2015.
3.14.2. Profit on sale of investments increased from RS. 69.36 crs in
201314 to RS. 125.33 crs in 2014-15. During the year, interest and
dividend income from investments, net of amortization charges,
registered a growth of RS. 137.95 crs (10.54%) over March, 2014 level
of RS. 1.309.03 crs. to RS. 1446.98 crs
3.14.3. While interest yield on investments increased from 7.37%
(2013-14) to 7.49% (2014-15), due to the fact that new securities
purchased were at higher yield levels, the total yield on investments,
including profit on sale of securities, increased from 7.56 % to 7.73%
during the same period.
3.14.4. Foreign Exchange Turnover of the Bank in 2014-15 increased to a
level of RS. 403,102 crs (Merchant Turnover-RS. 51,904 crs and Trading
Turnover- RS. 351,198 crs) against previous year''s level of RS. 297,331
crs (Merchant Turnover- RS. 30,635 crs and Trading Turnover-
RS. 266,696 crs.)
3.14.5. The profit generated from Foreign Exchange business during FY
2014-15 was higher at RS. 74.13 crs as against RS.59.60 crs in the
previous year.
3.15 International Banking
3.15.1. The level of Export Credit as on 31st March 2015 was RS. 1617
crs (RS. 1666 crs as on 31st March 2014) constituting 3 % of ANBC. With
a view to encouraging export business, seminars of exporters/importers
were conducted in Chennai, Bangalore and Delhi during the financial
year 2014-15. Also, Exporters Gold Cards have been offered to eligible
exporter units. The Bank has entered into an arrangement with two
foreign banks for availing Buyer''s credit for our customers at
affordable rates.
3.15.2. NRI Deposits as on 31.03.2015 stood at RS. 1525.76 crores as
against RS. 1228.80 crs, as on 31.03.2014 comprising of FCNR (B)/RFC
deposits of RS. 274.8 crs and NRE/NRO deposits of RS. 1250.96 crs.
3.15.3. As per Bank''s BPR objectives, the Bank had set up five TFCPCs
at Bangalore, Chennai, Hyderabad, Mumbai and New Delhi. During FY
2013-14, more branches, including CAB branches have been linked to
TFCPCs, in order to consolidate the front-line processing and
contribute expertise to all such branches, for extending quality
service to Exporters.
3.15.4. During the year Bank''s Export Credit portfolio, other than
exposures to Central PSU and LC-backed bills business, have been
covered under Export Credit Insurance for Banks (ECIB), Whole Turnover
Packing Credit (WTPC) and Whole Turnover Post Shipment (WTPS) Schemes
of Export Credit Guarantee Corporation of India.
3.16 Cross Selling
During the year over 24,588 lives were insured through various products
of SBI Life Insurance Company Ltd with a premium collection of RS. 64
crs. The Bank has collected a premium of RS. 20 crs while marketing
General Insurance Products. In respect of Investment Products, the Bank
is extending Mutual Funds products of SBI MF. Applications for SBI
Credit Cards are also sourced by the Bank. The Bank has earned an
income of RS. 11 crs from Cross Selling Business during FY 2014-15.
3.17 Government Business
3.17.1. State Government Transactions:
The Bank has been handling a major share of Government of Karnataka
transactions since inception (1913). About 88% of our total Government
Business emanates from State Government transactions and the turnover
is directly linked to the budget of the State Government. A turnover of
RS. 69,569 cr has been achieved during the year 2014-15, as against RS.
63,886 crs in 2013-14 with a net accretion of RS.62.29 crs commission
representing 92% of income from Government business.
3.17.2. Central Government Transactions:
During the year 2014-15, business from Central Government Departments
like Postal, Railways, Defence, Central Board of Direct Taxes, Central
Board of Excise and Customs and business from various Central Schemes
like Public Provident Fund, Senior Citizens Savings Scheme, etc.,
constituted approximately 12% of the Bank''s total Government Business
turnover. Our business turnover from Central Government departments
during the year 2014-15 is placed at RS.9,622 crs against a turnover of
RS. 9,005 crs registered during 2013-14 with an earnings of RS. 5.68
crs as commission.
3.18 NPA Management
3.18.1. The general economic slowdown coupled with high inflation and
twin deficits of fiscal and CAD had its adverse affect on the health of
the loan books of the Banks, leading to an increase in Non Performing
Assets. Though the economy showed signs of recovery, on the ground are
yet to be fully realized.
The problems faced by Textiles, Food processing, Steel, Gems &
Jewellery and Infrastructure sectors continued to persist with
Corporate sector accounting for major share in NPAs. This, coupled with
problems on the agricultural front, caused by drought in some parts of
the State further compounded our problems.
However Bank took pro-active steps to recover dues by way of strategic
sale of Assets and other recovery mechanisms which resulted in
reduction in GNPA from RS. 2,819 crs & NNPA from RS. 1,630 as on March
2014 to the present level of RS. 2,136 crs and RS. 1,122 respectively
in the current year. A time-bound action plan with measures including
effective use of SARFAESI Act, rehabilitation of viable units, sale of
assets to ARCs and vigorous follow-up of DRT cases was put in place &
regularly monitored at the highest level to reduce NPA levels.
Consequently, the Gross NPA ratio decreased from 5.54% to 4.00%. The
net NPA ratio also declined from 3.29% to 2.16%. The SBM is one of the
few Banks to have bucked the trend of rising NPAs and effected
substantial recovery. Provision Coverage Ratio improved to all time
high of 69.34%. The provision for Non Performing Assets (including
floating provision and counter cyclical provisioning buffer) stood at
RS. 1,189 (LY RS. 872 ) crs.
3.19 Restructuring of Debts
The Bank continues to provide Restructuring Package within the
framework of RBI guidelines to deserving borrowers under the
Rehabilitation Programme or under packages approved by CDR / BIFR,
subject to the viability of such units. As at Mar''15,the Bank has
extended the package to 45,468 borrowal accounts with dues amounting to
RS. 4109 Crores as against 67,113 accounts amounting to RS. 4,068 crs
in the previous year. During FY15, 3,157 accounts with outstanding
debts of RS. 1579 crs. were restructured. Towards diminution in their
fair value on account of economic loss caused in the process of
restructuring, provision to an extent of RS. 256 crs (LY RS. 192 crs)
has been made by the Bank.
3.20 LEAD BANK SCHEME
3.20.1 The Bank has been discharging lead Bank responsibilities in 3
districts viz. Mysore, Charmarajnagar and Tumkur. The Annual Credit
Plan for 201516 has been launched with the combined annual credit plan
target for all Banks in 3 districts going up from RS. 10,039 crs to
RS.11,600 crs, at a growth rate of 15.54%.
The Block Level Bankers'' Committee (BLBC), District Consultative
Committee (DCC), District Level Review Committee (DLRC), Standing
Committee (SC) meetings are regularly conducted as per Reserve Bank
guidelines in all the three Lead Districts.
Bank has established Financial Literacy Centres at our Lead District
Office in all the three districts. Bank has been conducting literacy
camps during Melas at village level besides distributing Literacy
materials at all the rural branches.
3.20.2 Rural Self Employment Training Institute(RSETI) / Rural
Development and Self Employment training Institute (RUDSETI ) :
The Bank has established RUDSETI type of training centres viz. MyBank
Institute for Promotion of Self Employment and Development (MIPSED) at
Tumkur. Similar Institute called JSS RUDSETI is established at
Chamarajnagar in association with JSS Mahavidyapeetha. These Institutes
have been established to impart entrepreneurial skill development and
guidance to unemployed rural youth, to become gainfully self employed.
We have also constructed our own building at MIPSED, Tumkur with
financial grant from National institute of Rural Development (NIRD).
Total number of 1,756 participants have been trained during 2014-15
with 54% settlement rate through financial assistance from Bank loans
and their own resources. The participants have been trained under
various Government sponsored schemes such as PMEGP , Mobile servicing,
Tailoring, Beautician courses, etc. Our RSETI has been awarded AA as
per the latest rating released by MoRD.
3.20.3 Regional Rural Bank - Kaveri Grameena Bank
Our Bank has sponsored Kaveri Grameena Bank (KGB) which is
headquartered at Mysore. The Bank is operating in 10 districts of
Karnataka viz. Mysore, Hassan, Chamrajanagar, Tumkur, Bangalore-Urban,
Bangalore-Rural, Ramangar, Chikmagalore, Kodagu and Mandya and crossed
a land mark figure of 450 branches. Bank has opened 50 branches during
2014-15. All the branches are on CBS mode. The total deposits and
advances of KGB as on March 2015 were RS. 5,907 crs and RS. 4,649 crs
respectively, registering a total business of RS. 10,556 crs, with a
growth of RS. 2,154 crs (25.6%).
3.21 Financial Inclusion
3.21.1 Bank has drawn a comprehensive Financial Inclusion Plan for
2013-2016 for coverage of villages with Banking infrastructure. The
Bank having already covered all the 260 villages with a population of
above 2,000 allotted under "Swabhiman", further covered all the
allotted 152 villages with population between 1600 to 2000 under
"extension of Swabhiman".
3.21.2 In respect of the villages with population below 2,000 allotted
by SLBC for coverage with Banking infrastructure, the Bank has covered
all 3,248 villages upto Mar''15. These villages are covered through 38
brick & mortar branches and remaining through BC outlets. In total, the
Bank has so far opened 81 branches in unbanked rural centres. In
addition, 154 Ultra Small Branches are also functioning in the unbanked
rural centres.
3.21.3 Implementation of Pradhan Mantri Jan-Dhan Yoiana :
The Bank has covered all the 11.97 lakh households in the 713 SSAs and
634 Wards allotted to the Bank with atleast 1 bank account under PMJDY.
Bank has opened 8,07,359 accounts under PMJDY during the period from
16.8.2014 to 31.3.2015 with a balance outstanding of RS. 37.31 crs.
Tthe total number of accounts opened from inception of FI programme to
31st March 2015 are 14,91,758, with a balance of Rs.70.54 crores. The
Bank has successfully seeded 53% Aadhaar numbers in PMJDY accounts.
7,60,196 (94%) RuPay Cards have also been issued to the PMJDY account
holders.
3.21.4 Implementation of Modified Direct Benefit Transfer Scheme for
LPG (MDBTL) :
The Bank is actively participating in implementation of Modified Direct
Benefit Transfer Scheme for LPG (PAHAL). The progress in seeding of
Aadhaar numbers in Bank accounts in the districts of Tumkur, Mysore and
Chamarajanagara (Lead Districts) is to the extent of 94%, 94.59% and
70% respectively.
3.21.5 Implementation of Electronic Benefit Transfer Scheme for
distribution of Social Security Pensions:
Bank has also implemented smart-card based Electronic Benefit Transfer
(EBT) scheme for distribution of Social Security Pensions in all the
Taluks in Chamarajanagar district and allotted service area villages in
Bellary and Chitradurga districts. The Bank has so far issued 3,86,000
Smart Cards and distributed pensions amounting to RS. 39.83 Crs during
the Financial Year.
4. HUMAN RESoURCES:
4.1. Manpower Profile
The total manpower strength of the Bank as at March 2015 stood as
10,193, as against 10,845 in the previous year. The staff strength
comprised 3,477 officers, 4,731 clerical staff and 1,985 subordinate
staff. Of these, 862 are Ex-defense personnel, 162 belong to physically
handicapped category and 539 belong to the Minority community.
4.1.2 Women''s Representation:
As at March 2015, there were 2,891 Women employees (comprising 543
Officers and 2,348 Other Employees) in the Bank, compared to 2,991 as
at March 2014 (comprising 542 Officers and 2,449 Other Employees). The
share of women employees stood at 28.4% as at March 2015. The Bank
continued to provide equal opportunity to women in their career
progression.
4.1.3 Scheduled Castes/Scheduled Tribes - Representation:
As at March 2015, there were 1,738 Scheduled Caste employees,
comprising 586 Officers, 691 Clerical Staff and 461 Subordinate staff.
There were 561 Scheduled Tribe employees comprising 202 Officers, 241
Clerical staff and 118 Subordinate staff as at March 2015. All the
guidelines of the Government of India for safeguarding the interests
of SC/ST employees have been complied with.
4.1.4 Human resources Management Solutions (HRMS) :
BankhasimplementedHumanResources Management Solutions (HRMS) on 1st
April 2010, to handle all HR activities in a phased manner. HRMS Cell
was formed to integrate salary, perquisites, reimbursement and leave
details of the employees. The cell has implemented salary,
reimbursement of Annual Medical expenses, furniture supplied to
officers, furniture maintenance charges, monthly reimbursements of
perks, reimbursement of brief case expenses, besides sanction of
increment through HRMS portal. Asset & Liability Statement and Annual
Appraisal Report are also implemented through HRMS.
HRMS portal facilitates uploading of Annual Appraisal Report of
officers which are reviewed and noted by respective authorities online.
It is planned to integrate e-learning portal ''Gnanodaya'' with HRMS site
so that lessons which are to be mandatorily attended gets automatically
reflected in their Annual Appraisal Report.
4.2 Training:
4.2.1 Training Activities and Coverage:
The Bank regards its employees as its critical & valuable assets. To
make the employees more competitive and knowledgeable in banking field,
honing their skills is one of its priorities.
With a view to achieve the desired goals and to establish
high-performance work culture, Bank''s learning centers at Bangalore,
Mysore and Hubli are imparting training on wide spectrum of subjects
viz. Advances and Deposits and knowledge about their various products,
communication & leadership skills, marketing, behavioral science, etc.
Also to gain competitive edge in new technology being adopted by the
Bank, several programmes on latest technology developments like
Internet Banking, Mobile Banking and other alternate delivery channels
are conducted regularly.
4.2.2. In addition to the existing Learning Centres at Bangalore,
Mysore & Hubli, we have added further capacity by setting up Strategic
Training Unit "Gyan Jyothi"-a centralized training establishment with
state-of-the art facility at Jakkur (Bangalore). The STU Campus is
spread over 35,000 sq ft built-up area with 2 class rooms, 2 computer
labs, Auditorium besides good residential facility, etc. The centre
beside providing specialised high level training is also expected to
undertake innovative research in the field of Banking and design
products towards furtherance of customer satisfaction and enhancement.
The centre is headed by a Senior official of the rank of DGM.
4.2.3. The training methodology of the Bank constantly aims at keeping
its workforce pro-active and customer centric, so that they can
discharge their duties effectively in the challenging Banking scenario.
Bank continues to focus on imparting training to maximum number of
employees to update their skills & knowledge periodically.
Our Learning Centers at Bangalore, Mysore and Hubli have conducted in
all 172 training/workshops both functional and computer based
programmes. During the year total 3,732 staff got trained at our
Learning Centers.
4.2.4. The Bank regularly deputes officers, based on the job profiles,
for training to Apex Training Institutes of SBI and other training
institutes like NIBM, IIBF, College of Agricultural Banking- RBI
(Pune), CAFRAL (Centre for Advanced Financial Research & Learning),
IDRBT, etc. to hone their skills and update their knowledge. During the
year, 956 officials were deputed to the Apex Institutes and external
training institutes.
4.2.5. Keeping in view the need for imparting training in specialized
areas, the Bank has also conducted several specialized training
programmes/ workshops on MSME business, NRI business, Forex business
(through FEDAI), Cross selling, currency management, Loan Originating
System, Project Ganga, KYC compliance, workshop for EOs-POs,
Disciplinary authorities (Vigilance Dept.) and retiring staff members
to prepare them to face the new innings of their life confidence.
To bring conformity to the Govt. of India guidelines with regard to
providing inservice training to the SC/ST officers, the Bank has also
conducted specialized skill development training programme exclusively
for officers belonging to SC/ ST category, which was well appreciated
by all.
4.2.6 Conclave of Assistant General Managers:
We have organized a Conclave of AGMs (Controllers and select Branch
Heads) from 23rd - 25th May''2014 at Madikeri on topics like-
Motivation/ Leadership/ Change Management/ Target Orientation/
Marketing, etc. This programme was arranged with a vision of providing
participants the required confidence to handle their assignments more
effectively.
4.2.7 e-learning (Gyanodava):
In addition to the class-room training provided to employees at our
Staff Learning Centres and ATIs, Bank had also launched an e-learning
portal "Gyanodaya" with the objective of imparting on-line learning and
training to all the employees of our Bank. SBM e-Learning portal is
available 24X7 and all 365 days on internet system and also on intranet
system.
4.2.8 AAROHAN
A mass communication programme was rolled out to cover all the
employees of State Bank of Mysore - from clerical staff to Scale-V
officers, in order to sensitize the employees about the current state
of the Bank and necessity to change their orientation to meet the
rising expectation of the customers in a fiercely competitive
environment. The main objectives of the AAROHAN workshop were:
a) To make every one aware of the need to bring quality and
professionalism in the workplace.
b) To bring in consciousness of our role in eliminating waste and
maximizing returns.
c) To reinforce the importance of the Customer and inculcate our
individual & collective responsibility to the Customer and the Bank.
4.2.9 Pre-promotional training:
Pre-Promotion training programmes for SC/ST/Minority Community
employees were conducted at the Learning Centers at Bengaluru & Mysuru
during the year, for eligible and aspiring candidates from Sub-Staff to
Clerical, Clerical cadre to Officer and JMGS I to MMGS II cadres.
During the year 314 employees belonging to SC/ST category were given
training. Based on the feedback received the programmes were well
appreciated by the participants.
4.2.10 Training to subordinate staff:
To bring about awareness among the subordinate staff and to make them
realize their potential & importance in the organization, Bank has
conducted one day capsule training programme exclusively for 519
subordinate staff at our Learning Centre, Bengaluru, Mysore and Hubli.
4.2.11 Training to KGB employees:
Our Mysore Learning Center has also imparted training to officers /
clerical staff of Kaveri Grameen Bank (sponsored by SBM) as and when
requested. During the current year 9 training programmes for KGB
employees were conducted, covering 265 employees.
4.2.12 Training to retiring officers/ staff:
To enable our retiring officers / staff to lead a happy and peaceful
retired life with inputs on financial planning matters, our Learning
Center, Mysore had conducted 10 special training programmes for
retiring employees during the year 201415 covering 376 employees.
5. Industrial RELATIoNS:
5.1 Terminal Benefits to Retired Staff: Terminal Benefits to Retired
staff:
The Bank gives due importance to the timely settlement of terminal
benefits to the staff, either on reaching superannuation or any other
grounds. During the FY 2014-15 as many as 492 members of staff have
retired from the service of the Bank. Their Provident Fund, Gratuity,
Pension and Commutation benefits, were settled on top priority, on
time.
5.2 New Pension Scheme (NPS):
Employees joining the service of the Bank w.e.f 01.04.2010 are eligible
to join the New Pension Scheme (Corporate Model), which is governed by
the provisions of the NPS introduced for employees of Central
Government w.e.f. 01.04.2004 and modified from time to time. As at
March 2015, as many as 2,643 employees have been covered under NPS.
5.3 Retired Employees Medical Benefit Scheme II:
In addition to the existing Retired Employees'' Medical Benefit Scheme
(SBMREMBS), effective from 15.12.2012, a new scheme has been launched
for employees retiring / retired under Superannuation, with upper limit
for claims ranging from RS. 2 lacs to RS. 20 lacs, based on eligibility
criteria. During 2014-15, the Bank has received 960 applications and
disbursed an amount of RS. 218 lacs.
5.4 STAFF WELFARE ACTIVITIES :
Central Staff Welfare Committee allocates funds for various staff
welfare activities.
The welfare measures provided to the members of the staff are : Holiday
Homes, Group Insurance Cover, Scholarship Scheme, Farewell Scheme for
the retiring employees, financial assistance to the employees with
physically / mentally challenged children, Medical Expenses
Reimbursement Scheme, Birthday Memento & recurring expenses for Staff
Welfare Activities.
6. technology Up-gradation &Support functions
6.1.1 automated teller Machines as Acquirer and issuer
Our Bank crossed the milestone of installing its 1300th ATM at Double
Road Chamrajanagara, Mysore and as on March 2015 the total ATMs
installed stood at 1,327 including 9 Outsourced Model ATMs (Brown
label).
With this the Bank has also complied with the Govt. of India, Ministry
of Finance guidelines of One branch One ATM norm. With this every
branch in Direct Benefit Transfer (DBT) districts is having an ATM.
6.1.2 Value added services:
In addition to the withdrawal of cash, many other value added services
are also available through ATMs, like payment of insurance premium,
mobile recharge, card payments, mobile Banking registration, etc. Bank
has also introduced Platinum card for affluent class customers, which
is a chip-based Magstripe card with higher limit for daily cash
withdrawal and POS transactions.
6.1.3 Internet Banking:
Internet Banking as an alternate Banking channel has gained
acceptability and has become popular among retail and corporate
customers. The number of registrations and volume of transactions
through internet Banking has seen a growth of 30% and 26%,
respectively, during the year. The facility is now available for
Visually-challenged customers also. Bank''s Internet Banking site www.
onlinesbm.com is secured through 256 bit EVSSL (Extended Validation
Secured Socket Layer) encryption. A new smart phone based application
STATE BANK ANYWHERE for Internet Banking access was launched in Nov''14.
With necessary anti-phishing measures in place, there has been no
instance of phishing attack reported.
6.1.4 Mobile Banking:
Bank is offering Mobile Banking Services under the name State Bank
Freedom to all its retail customers under four different modes viz.:
Application mode, WAP mode, USSD and SMS banking, with a daily
transaction limit of RS. 50,000/- and overall calendar month limit of
RS. 2,50,000/- The services include enquiry, mini statements, Mobile/TV
top-up and recharge, interbank fund transfer through NEFT and IMPS and
bill payment facilities. During the year, Person to Account (P2A) and
Person to Merchant (P2M) services through IMPS were also introduced.
There is a steady growth in the number of registrations and
transactions taking place through the channel. The number of mobile
Banking registrations and transactions have grown by 133% and 112%,
respectively during the FY 2014-15.
6.1.5 Electronic Payment System:
All branches of the Bank are enabled for RTGS/NEFT/GRPT remittance
facility. In addition Bank also offers Electronic Clearing Service
(ECS) and Immediate Payment Service (IMPS) over Mobile Banking
Platform. Percentage of all electronic (ATM, Internet Banking, Mobile
Banking, RTGS, NEFT and ECS) transactions to Total transactions of the
Bank is over 49%. These figures have improved from 45% as on
31.03.2014.
6.1.6 Bank''s Website:
The Bank''s website (http://www. stateBankofmysore.co.in) is a
repository of information about the Bank, its products and services
available to the customers and general public alike, in bilingual and
Braille form.
* Information on Schemes and products for various segments like
Personal, Commercial and Institutional, Micro, Small and
Medium enterprises and Agriculture is available on the website.
Besides, information on the interest rates, service charges & fees,
information on Bank''s financials, policies, acts, online loan enquiry
form, online complaint form, etc. are also available.
* Online loan application on downloadable forms for Education, Housing,
Car and Gold loan are also available, along with online tracking of the
application status.
* Special links have been provided to access sites of RBI, IBA, SBI,SBI
Life, SBI Cards, SBI Mutual Funds, SBI Capital & Security and RBI
Financial Inclusion.
* Various downloadable formats are also available.
6.1.7 Digital Signage Solution:
Digital Signage Solution is a method of providing information to our
branch customers on various products and services offered by the Bank,
which is displayed on LED screen at the branches. The system is
capable of working both in online and offline mode across various
branches/offices.
We have installed centrally controlled Digital Signage Solution at 600
branches of Metro, Urban and Semi Urban locations and propose to cover
remaining branches in FY15-16.
6.1.8 Access to CBS by staff and officers are enabled by implementing
additional factor of authentication through biometric login in addition
to the user id and password.
6.1.9 Bank has uploaded the features of Bank''s products and
technological initiatives on Facebook, YouTube and Twitter site.
6.1.10 E-touch:
It is a ONE-STOP solution for all Banking needs like ATM, Cash Deposit,
Mobile/ Cash Recyclers and Self Service Kiosks, Bar Code based Passbook
printers, Automatic Cheque Drop Box and Internet kiosk, etc. Our Bank
has installed its first E-lobby facility for its esteemed customers at
its Avenue Road premises, Bangalore and plans are afoot to open 10 such
lobbies at key centers in the city.
A new variant of card called as Euro Master Visa (EMV) card, which is
chip-based with Magstripe is being issued to customers. The new card
has more security features and protected database.
Bank has taken adequate measures to strengthen security at ATM kiosks,
with guards, surveillance cameras and alarm systems.
6.2. NEW BUSINESS:
Under New Business initiatives, different range of IT products and
services have been introduced in Bank. The intention is to maximize
customer satisfaction, along with increasing business and minimizing
transaction cost. Concepts like Point of Sale machine, Self Service
Kiosk, Cash Deposit Machines are customised to cater to the new
generation, which are self servicing in nature. The following New
Business Initiatives have been launched in the Bank
6.2.1 MERCHANT ACQUIRING BUSINESS (MAB):
It is a mechanism of facilitating payment for purchase of Goods and
services through the medium of debit/credit card, using Point of Sale
(POS) machines. We introduced this concept in our Bank since 2013. For
the merchant, it is favorable cash-less sale with increased volume of
business. For the Acquiring Bank, it is increase in CASA deposit, float
funds and additional income from Merchant in the form of Merchant
Discount Rate (MDR). It is a convenience to the card-holder, as he need
not carry cash for purchase of merchandise. In Mar''15, our Bank
launched mobile POS (mPOS) facility to enable customer to pay for
merchandise through vendors mobile application at their doorstep. We
have so far installed 4,500 POS mPOS machines. Our target for the FY
2015-16 is 10,000 POS machines to achieve industry average of 10 POS
per branch.
6.2.2 Cash DEPoSIT Machine (CDM):
Cash Deposit Machine accepts deposit of cash from customers into their
accounts using Debit cards. Credit is extended instantly to the
customer account. It is available to the customers 24 hours of the day
7 days a week. It is also a green initiative as no Chillan is to be
written for deposit. The customer is provided with a printed receipt.
Other functions like balance enquiry and mini statements are also
enabled in the CDM''s. At present it is available in 34 branches which
will be extended to 200 branches next year.
6.2.3 Green CHANNEL Counter (GCC):
Last year we had 425 GCC machines in 284 branches. The base now stands
increased to 400 branches and 535 GCC machines. It is a green
initiative where in cash deposit, withdrawal and transfer and
remittances can be done by swiping the Debit card in Point of Sale
like machine held at the single window operator (SWO) counters, without
the need to enter voucher/cheque details.
6.2.4 SELF SERVICE KIOSKS (SSk):
Self Service Kiosks are the revised version of Multi Function Kiosks
with added features like Pass book printing, Funds transfer, Balance
enquiry, Account statement, Stop Cheque payment etc. SSKs are operated
through the use of Debit cards. We have deployed in total 38 SSKs in
various branches of our Bank.
6.2.5 SME Insta Deposit Card:
This facility enables SME a/c holder to deposit cash and use GCC
facility by swiping their card. It is proposed to cover all SME
borrowers in all branches where CDM/GCC facility is available.
6.3. Information Security, Business Continuity and Disaster recovery:-
6.3.1. In the backdrop of growing complexity of financial products and
the increased leveraging of technology, operational risks have assumed
critical importance in recent times. The treatment of technology risk/
operational risk as part of the movement towards Advanced/Management
approach is a manifestation of the significance of the risks in
impacting the risk profile of a Bank. Keeping this in mind our Bank has
* Adopted well-defined IT Policy and IS Security Policy, which is
being periodically reviewed and updated.
* Become a part of well-established (common for State Bank Group)
state-of-the art IT infrastructure which is certified as ISO 22301.
6.3.2 Our Bank has taken proactive measures to respond to business
discontinuities and ensure uninterrupted availability of all key
business resources that support critical Banking functions. The Bank
has adopted a well defined Business Continuity Plan and Disaster
Recovery Plan Policy. Our Bank is part of a well established high-end
Business Continuity and Disaster Recovery infrastructure which ensures
seamless continuity in case of need. The Disaster Recovery drill is
being conducted on a half-yearly basis, during which the transactions
of our branches are routed through the DR site. In addition to this,
the Bank has a nearby site to ensure zero data loss in the event of a
disaster. The Bank has implemented Business Continuity Plan in all the
branches and also in the administrative offices together with periodic
reviews and updates.
6.4 Management Information System (MIS):
6.4.1. The MIS Department consolidates and maintains the Credit
Information System (CIS) database apart from collating information from
branches and Head Office Departments for submission of various
statements to Reserve Bank of India like Basic Statistical Returns,
Sectoral Deployment of Funds etc,. The Department also provides
information to the Top Management and other user Departments in Head
Office.
6.4.2. The scope of CIS has also been extended to submission of data to
Credit Information Companies to whom the Department is submitting
individual borrower-wise credit information every month after due
processing. In turn, the Credit Information Reports (CIRs), drawn from
the CICs database, serve as important fraud prevention tool to the
credit appraisal/sanction functionaries.
6.4.3. The Department coordinates with SBI-EDWP for submission of
various reports validated from User Departments to RBI under Automated
Data Flow (ADF) apart from collating logic information from Head Office
User Departments and providing logic, source system to SBI-EDWP for
generating various reports.
6.4.4. The Department coordinates with CDC and the Centralized Credit
Data Processing (CCDP) for facilitating data correction and improvement
in data quality.
7. SYSTEMS AND PROCEDURES
7.1.1. Systems and Procedures Department is a special resource
available at Head office for effective management of work organization
concerning the Systems and Procedures. The Department regularly reviews
the systems and procedures in the area of general service charges. The
Department vets process changes and reviews charges on the general
service provided and modifies the same in accordance with the changing
environment and aspirations of customers.
7.1.2. The Department in the year under review has issued
circulars/guidelines in regard to Implementation of Aadhar based e-KYC
service in the bank, Implementation of Depositors'' Education and
Awareness Fund Scheme 2014 of RBI and Precautions & safeguards against
frauds in respect of loan against Large Value Fixed Deposits.
8. CONTROL AND SUPERVISION
8.1 RISK MANAGEMENT:
8.1.1. An independent Risk Governance structure is in place for
Integrated Risk Management, covering Credit, Market and Operational
Risks. This framework visualizes empowerment of business units at the
operating level, with technology being the key driver, enabling
identification and management of risk at the place of origination.
8.1.2 Basel Implementation
The Bank has migrated to the Basel II framework, with the Standardized
Approach for Credit Risk, Basic Indicator approach for Operational Risk
and Standardized Measurement Method for Market Risk.
Capital regulations under Basel III have come into effect in India
w.e.f 01.04.2013.
Bank has complied with both the norms and has maintained its capital
adequacy above the RBI mandated level of 9% along with Tier-I at 6%.
The Capital Adequacy Ratio computed as per Basel III guidelines
effective from 1st April 2013 stands at 11.42 % as at March 2015,
against 11.08 % (recast under Basel III) as at March 2014. The CRAR of
11.42 % consists of CET - I of 8.37%, AT-I of 0.15% both forming TIER-I
Capital besides 3.01% of TIER-II Capital. The CRAR under Basel II
guidelines as at March 2015 stood at 12.02% as against
11.50% in the previous year. The Capital Adequacy ratio of the Bank
increased on account of improved profitability, control on RWAs,
raising of Tier-II capital of RS. 500 crs during the year.
8.1.3 CREDIT RISK MANAGEMENT
Reserve Bank of India has issued guidelines on implementation of
Internal Ratings Based Approach for calculation of capital charge for
Credit Risk in Dec 2011 and our Bank applied for permission to RBI for
migrating to Advanced Approach for Credit Risk under Basel II. The Bank
has submitted Letter of Intent to RBI in terms of the guidelines, where
the Bank has developed the models for risk components - Probability of
Default Estimation (PD), Loss Given Default (LGD) & Exposure at Default
(EAD) and also adopted Basel II compliant policies approved by the
Board of Directors. The Bank has received a response from RBI in July
2013, advising the Bank to further strengthen the areas of IRB
framework before the commencement of parallel run process for
Foundation IRB (FIRB) approach.
As part of migration to Advanced Approaches under BASEL-II, State Bank
Group is building a technology platform known as the Credit Risk Data
Mart (CRDM) to manage all the information required for computing,
verifying and monitoring credit portfolio risks. The CRDM will be the
single source of data for model implementation, risk component
estimation and capital computation. This would subsequently be used
for model development and validation purposes. EDWP (Enterprise Data
Warehouse Project) team is building the database by capturing the
Bank''s data for various reporting dates.
8.1.4 MARKET RISK MANAGEMENT
Bank is using Standardized Measurement Method (SMM) for computation of
capital charge and the necessary systems for migration to IMA are in
place. The Bank has submitted Letter of Intent to RBI in Oct 2013 for
migration to IMA. The Bank would be on parallel run for computation of
capital charge under both SMM & IMA, after the approval from RBI.
8.1.5. OPERATIONAL RISK MANAGEMENT:
Reserve Bank of India has prescribed three approaches for computing
capital charge for Operational Risk, viz.
a) Basic Indicator Approach (BIA)
b) The Standardized Approach (TSA)
c) Advanced Measurement Approach (AMA)
Currently the Bank is following the Basic Indicator Approach. As per
AMA guidelines, Banks are allowed to switch over from BIA to AMA
directly. Bank is endeavoring to move directly to the Advanced
Measurement Approach in view of the minimal changes in capital
requirement under TSA, as compared to BIA. All the policies and
documents have been reviewed, as suggested by our consultants, to meet
minimum required standards. A Letter of Intent (LOI) was submitted to
Reserve Bank of India in Oct 2013, seeking permission to migrate to
AMA. However, as per the communication received from RBI, the AMA
application has been put on hold till a detailed assessment is
completed in respect of similar application by SBI. The Operational
Risk Management Department (ORMD) has been organizing training
programmes for creating awareness among officers about Basel II
requirements, Operational Risk Management, Advanced Measurement
Approach for Capital Computation and Fraud Prevention Measures.
8.1.6 ASSET LIABILITY MANAGEMENT
10.1. The Asset Liability Management System has been functioning as per
the guidelines prescribed by RBI. The Asset Liability Management
Committee (ALCO) of the Bank is entrusted with the task of managing
liquidity and interest rate risk. The committee meets regularly to
monitor the risks and Net Interest Margin (NIM) on an ongoing basis.
The tolerance limits for liquidity mismatches and interest rate risks
are fixed in accordance with RBI guidelines and Bank''s ALM Policy and
these are reviewed by ALCO at regular intervals. Various interest rate
revisions including the revision of Base Rate is thoroughly discussed
and decided by ALCO duly considering all the relevant factors. Possible
mismatches in the Structural Liquidity projections of the Bank are also
discussed with regard to long term asset exposures and appropriate
decisions are taken to mitigate the risk.
9. BUSINESS PROCESS RE-ENGINEERING (BPR)
Bank has rolled out various BPR initiatives since 2005, in consonance
with the design principles provided by SBI. The BPR initiatives
leverage technology to significantly enhance customers'' satisfaction
and convenience. So far 19 BPR initiatives have been rolled-out. Loan
Origination Software for processing of Retail Loans has been
successfully implemented in our Bank at Bangalore, Mysore and Delhi
Centres besides other Metro centres. The software is likely to be
extended to other Urban / Semi-Urban centres next year thereby cutting
down the processing period besides improving the quality of the
processing and asset. In order to consolidate our presence in
Bangalore, we have decided to open one more RACPC in the city to
provide speedy sanctions to Housing loan, Car loan customers.
9.1.1 The Central Pension Processing Centre (CPPC):
The Central Pension Processing Centre (CPPC) is functioning at
Mangalore and pension/arrears of pension is disbursed to 1,53,777
pensioners online throughout the Bank. CPPC is now using SBI package
for disbursing Central Government pensions. We have also introduced
system of online submission of Digital Life Certificate (Jeevan
Praman),whereby pensioners can submit life certificate from the comfort
of their house after seeding their Aadhar & Mobile numbers with the
Bank.
9.1.2. Our Centralized Clearing Processing Centres (CCPCs) at
Bangalore, Mysore, Chennai, Delhi and Mumbai undertake entire clearing
work of all the linked branches. Further all the MICR Centres of
Karnataka have been linked and brought under decentralized Model of
Cheque Truncation System of clearing, obviating the necessity of
physical transfer of cheques as per the directions received from
Reserve Bank of India in this regard. GOI/GOK has also announced plans
to completely switch over to CTS mode in respect of Govt cheques also
and do away with Paper to Follow procedure.
9.1.3 Branch Redesigning:
Branches are designed as per BPR design principles, keeping in view the
customer''s convenience and comfort. In the FY14-15, 71 branches were
opened and 7 redesigned / renovated as per BPR design principles at
various places.
9.1.4 Currency Administration Cells:
Rollout of 4 Currency Administration Cells at Davangere, Hubli, Bellary
and Shimoga has been completed during the year. We are planning to add
2 more CACs at Tumkur and Hoskote besides setting up a Megachest at
Bangalore.
9.1.5 In Branch Cash Handling (IBCH) System:
A new process viz. In Branch Cash Handling (IBCH) System has been
approved by the Operational Risk Management Committee and is rolled out
in March'' 2015. This process enables instantaneous cash transactions at
commencement of business at the branches and is designed with a view to
give better service to the customers.
10. AUDIT AND INSPECTION
10.1 Audit
10.1.1. "The overall objective of Internal Audit is to contribute to
the effectiveness of the Internal Control System in achieving the
Bank''s objectives, besides providing high quality counsel to management
on the effectiveness of Risk Management and Regulatory compliance by
the Bank. Towards this end, Risk Focused Internal Audit (RFIA) and IS
Audit were conducted in all the 676 branches/BPR entities, envisaged in
the Annual Audit Plan 2014-15. That apart, 96 newly opened branches
were subjected to Spot Audit, besides 8 Head Office departments. We
have also conducted Management Audit of 3 Zonal Offices and Kaveri
Grameen Bank sponsored by us. During 2014-15, 100% of our branches have
secured Well Controlled/ Adequately Controlled rating and none rated as
''Unsatisfactory'' branch. Only 1 Branch is rated ''Needs Improvement'' and
we are taking steps to strengthen compliance level at that branch also.
10.1.2 Concurrent Audit is a major function which monitors proper
followup of laid down systems and procedures on a continuous basis. 167
branches/ offices covering 50.8% of aggregate deposits and 71.62% of
total advances and 8 Head Office departments were subjected to
Concurrent Audit during this year.
10.1.3 We also conduct Special Revenue Audit every year to guard
against income leakage. 462 branches with advances level of more than
RS. 10 crs and income leakage of RS. 1 Lakh and above were subjected to
Special Revenue Audit (as against 497 branches during the previous
year).
The summary findings enumerated in these audit reports are appraised to
the Audit Committee of the Board and follow up actions are ensured.
10.2. Credit Audit
The audit of loan appraisal and administration for high value credit
accounts with the aim of improving the asset quality of the Bank is
undertaken by the Credit Audit Department. Accounts with total exposure
of RS. 2 cr and above are covered under Credit Audit. During the
financial year 1,348 loan accounts in 190 branches were covered under
Credit Audit. Out of 1,348 accounts, 1,196 accounts (89%) were rated as
Low and Very Low Risk accounts.
10.3. Vigilance
10.3.1. Vigilance administration as an important aspect of management
function is carried out as per the directives of the Central Vigilance
Commission so as to achieve good Corporate Governance for the overall
growth of the Bank.
10.3.2. "Whistle Blower" policy has been introduced in our Bank for the
employees to report to the Management, instances of unethical behavior,
actual or suspected fraud or violation of the Bank''s code of conduct or
ethics policy.
10.3.3. The officers from Vigilance Department conducted surprise
inspections of 84 offices/branches during the year under report. The
main areas of scrutiny are adherence to systems and procedures,
rotation of staff and deficiencies in fraud-prone areas. The deviations
and other irregularities are brought to the notice of the Module/
Regional Heads for taking corrective actions. Vigilance Department is
bringing out a Quarterly House Magazine, which contains vital
information on vigilance related matters useful to the operating staff.
10.3.4 In accordance with the guidelines of the Central Vigilance
Commission, the ''Vigilance Awareness Week'' was observed at all the
offices of the Bank from 27th October 2014 to 1st November 2014. The
focus of observing the Vigilance Awareness Week was "Combating
Corruption-Technology as an enabler". Seminars and meetings were
conducted, wherein information relating to evolving and effectively
implementing preventive techniques in vigilance administration, which
includes transparency accountability and fair play, objectivity and
timely response in dealing with matters relating to public
administration etc., were explained to customers/Staff members.
Besides, the role of leveraging of technology in respect of all systems
and process for deliverance of services, which has to be synchronized
through use of technology was strongly emphasized.
10.3.5. As per the directions of Ministry of Finance, Banking Division,
Vigilance section, Govt. of India, New Delhi, a vigilance setup has
been established in Kaveri Grameena Bank and the Chief Vigilance
Officer of the Bank is overseeing the vigilance administration.
10.3.6 Fraud Monitoring and Investigation Cell (FMIC):
The Fraud Monitoring and Investigation Cell (FMIC), functioning under
the administrative control of the General Manager & CVO, monitors
certain critical areas of branch functioning on regular basis. Thrust
is laid for taking certain preventive measures by monitoring various
exceptional reports generated through CBS covering transactions related
to expenditure, advances, manual debits to interest a/c besides all
other unusual transaction including those reported in Sundays and
holidays.
11. other aspects
11.1.1 Customer Service:
The Bank continues to accord highest priority for customer service. The
Bank has adopted the BCSBI Code of Commitment to Customers and has
placed the same in the Bank''s website. The Bank is committed to provide
service of highest order in a transparent manner.
As per the survey conducted by NIBM, Pune in Oct''14 on customer
service, the customer affinity/satisfaction score is as high as 91% in
Mysuru and slightly lower at 78% in Bengaluru. We are taking steps to
improve our service to meet the rising aspirations of our esteemed
customers.
New Initiatives for Customer Grievance Redressal:
11.1.2 Customer Grievance Redressal:
The Bank has also implemented a friendly Customer Redressal System
called SMS UNHAPPY to facilitate customers air their
grievances/complaints/ feed back by simply sending an SMS message
"UNHAPPY" to 99 0002 0002. The bank''s dedicated staff from "Happy Room"
call back the customers for speedy redressal of their grievance.
11.1.3 Complaint Management System (CMS) package:
The Bank has implemented a three tier automated system for complaints
management and monitoring and resolution. All the complaints received
at the Branches/Regional Offices/ Zones/Networks and Head Office level
are lodged in a common digital platform. The complaints are
acknowledged with a unique number on their receipt. Presently, the
acknowledgements are being sent through e-mails registered by the
complainants with us or by post.
11.1.4. Contact Centre-State Bank of Mysore has established a dedicated
"SBM Contact Centre" to provide information on Products and Services of
the Bank besides status of customer''s account through a toll free
number 1800425-2244 accessible throughout the country. The information
is provided in English, Hindi and Kannada languages 24x7x365 basis.
Further, as a part of the initiative, Lead Management System (LMS)
launched in our Bank generate leads through customer calls helpline
No.1800 425 2244 which are forwarded to the concerned branches, and
converted into business.
11.1.5 Online KIOSK
The Bank has developed a new software package for registering customer
complaints online through ''online customer complaints kiosk''. Customers
can now visit those kiosks and lodge their complaints themselves.
11.1.6 Customer Services Committee of the Board
The Bank has put in place Standing Committee on Customer Service and
Customer Service Committee of the Board are in place to oversee the
implementation of Customer service initiatives/directions of Government
of India/Reserve Bank of India. Standing Committee on Customer Service
held 2 meetings on 17.10.2014 and 03.02.2015 during the year. The
Customer Service Committee of the Board has met thrice on 24.06.2014,
28.11.2014 and 07.03.2015 during the year.
11.1.7 Right to Information
The Right to Information Act 2005 -The required authority Structure for
implementation of the Act has been put in place for prompt disposal of
RTI requests for Information within the time frame period as prescribed
under the Act. The Bank''s website also carries all the relevant
information on the implementation of the Act.
11.2 Productivity
Business per employee increased from RS. 10.38 crs as at March 2014 to
RS. 11.72 crs as at March 2015. The Business per branch has marginally
decreased from RS.119.26 crs in March 2014 to RS. 117.75 crs in March
2015 due to addition of 71 new branches during the year besides our
policy of going slow in the growth of bulk/corporate business.
11.3 Public relations
11.3.1 State Bank of Mysore has an enduring brand image of its own
through its century old close association with its clients. It is known
as ''Mysore Bank'' in its traditional area of operation. In
order to preserve, project and enhance its corporate image and brand
equity, a well laid out strategy has been put in place to effectively
carry out publicity of its products and services through print and
electronic media, with appropriate annual budget allocation.
11.3.2 The Bank has also organized free distribution of Bed sheets and
Blankets to the patients of 5 Government run Hospitals on 2nd October
2014 to commemorate the Banks foundation day coinciding with Birth
anniversary of Mahatma Gandhi.
11.3.3 The hoardings installed at vantage points were periodically
changed with attractive themes, greeting the public on festivals with
our latest deposits/lending schemes, revision of interest rates, etc.
Special media campaigns covering the various loan schemes, special
offer in housing, vehicle, gold loans, and MSME loans under CGTMSE
scheme, other retails loans and new deposit schemes like Savings Bank,
My Bank Sanchay, Term Deposit, Personal Accident Insurance, Centenary
Liquid Deposit were carried out periodically in the print and
electronic media and through hoardings.
11.3.4 Bank''s performance highlights, launching of new products and
services, opening of new branches, ATMs, BPR initiatives and
technological achievements were also extensively covered in print and
electronic media.
12.4 Organizational Development
12.4.1. Branch Expansion:
The Bank has opened 71 new branches during the year 2014-15. With this,
the Bank''s network of branches stands at 1,015 spread over 16 states.
The Bank opened its 1000th Branch on 23.12.2014 at Siddaramanahundi; an
unbanked village near Mysore, which was inaugurated by the Hon''ble
Chief Minister of Karnataka through Telelink. As at 2015, the branch
network comprised 239 Metro, 221 Urban, 222 Semi- Urban and 333 Rural
branches.
12.4.2 With a view to consolidate our presence and tap vast potential
from the burgeoning services sector, the Bank''s EC approved creation of
one more zone at Bangalore to become operational from FY15-16.
12.4.3 Branches in Minority Concentrated Districts- Centers (MCDs)/
Under Banked Districts: During the year, the Bank has opened 6 branches
in Minority Concentrated Districts/Centers and 10 branches in
Under-Banked Districts. As at March 2015, out of 1,015 branches, the
Bank has 86 branches in MCDs constituting 8.5% of the branch network
and 113 branches in Under-Banked Districts, constituting 11.1% of the
branch network.
12.5 Implementation of Official Language Policy:
12.5.1. Bank is progressively encouraging usage of Hindi and Regional
Languages to facilitate ease of doing business to the customers in the
language of their choice. Constant efforts are being made to create
healthy atmosphere for use of Official Language.
12.5.2 For progressive use of Hindi, our Bank''s Website is also made
available in Hindi and also Kannada with constant updates from time to
time. The option of Hindi and Regional Language is provided in all ATMs
of our Bank along with generation of transaction slips in Hindi. Hindi
facility has been made available in Mobile Banking also.
12.5.3 For enriching knowledge of Hindi of our Staff, separate
Quarterly Hindi Magazine "MYBANK BHASHADARSHINI" is being published
regularly.
12.5.4 During the year under review, the Committee of Parliament on
Official Language inspected Zonal Office, Mysore on 11.02.2015 and
appreciated our efforts made for the progressive use of Hindi in our
Bank.
12.5.5 Head Office received an "EXCELLENCE CERTIFICATE" and a "SHIELD"
by the Town Official Language Implementation Committee (Banks),
Bangalore for the special efforts made by the Bank in the field of
Official Language Implementation. Mysore, Hubli, Central and Mangalore
Zones also received awards from respective Town Official Language
Implementation Committees.
12.5.6 Under the aegis of Government of India, "Hindi Sanghosti" and
"Hindi Seminars" were organised at various places apart from organising
"Functional" and "Computer" Workshops at various places.
12.6 Community Services Banking
12.6.1. Our Bank as a caring and responsible corporate entity is
conscious of the nurturing we have received from society and are alive/
aware of our duty to payback a fraction of what we have received from
them as a sense of gratitude. As per the Government of India
guidelines, bank is authorized to spend 1% of its net profit towards
Community Service activities by making equitable donations to any
organization engaged in Community Development activity with a clean
image and good track records. Such donations are made without any
strings attached.
12.6.2 During the FY14-15, Bank took special interest in dedicating a
multidisciplinary paediatric ward named ''State Bank of Mysore Centenary
Block'' for augmenting facilities for treating children affected with
cancer at Kidwai Memorial Institute of Oncology, Bangalore and
constructed with a donation of RS. 1.57 crs from SBM.
12.6.3 During FY15, Bank generously donated over RS. 95 lac towards
improvement of health services to various hospitals and Research
Institutes which includes RS. 8 lac to Dharwad Institute of Mental
health and Science, RS. 7.22 lac to NIMHANS, RS. 11 lac to Shankara
Cancer Foundation for construction of SBM ward and RS. 7.5 lac to
Jayadeva Institute of Cardiovascular science for purchase of Ambulance
van.
12.6.4 Bank also participated in the Swachchh Bharat Abhiyaan and
donated RS. 25 lac for constructing Green Toilet to rural schools.
13. observations made by the shareholders in the AGM in respect o
matters pertaining to the "Profit ani Loss account and Balance Sheet fo
2013-14", clarification thereto:
observations of the Shareholders Clarifications by Chairman
Efforts made by the Bank The Bank will continue to give top
towards the recovery proceedings. priority for recovery proceedings.
Action under SARFAESI, filing suit
under DRT, e-auction, sale of
stressed assets are some of the
measures that will be pursued with
vigour for early recovery.
Reasons for reduction in the Income has come down due to higher
payment of dividend from 115% provisioning for NPA as per RBI
to 30%. guidelines and increase in the
provision for superannuation and
impending wage revision.
An option may be provided to the As a onetime measure, Management
shareholders to select the was advised to seek the language
language in which he/she wishes preference of shareholders
to receive the Annual Report. for the Annual Reports.
Measures taken to provide adequate Bank has provided security to
security to safe guard the Bank''s ATMs in Bangalore. SBI is working
ATMs. towards provision of electronic
surveillance devices in all the
ATMs of the group across the
country.
Appreciating the contribution of The observation to diversify CSR
the Bank towards CSR activity, activities is well taken. To
shareholders requested the Chairman benefit many, CSR activities like
to diversify the activity further fixing of fans and tube lights and
to entire Karnataka installation of water filters in
schools, etc., have been
implemented through Branches.
The Management is advised to
diversify the activities
still further.
Clarification on the extension of Nomination facility would take
Nomination facility to some more time as amendment in the
shareholders of State Bank of legislation is required. As
Mysore. nomination facility is available
for dematerialised shares,
shareholders are encouraged to
dematerialise their shares.
14. Board of Directors 2014-15
* Shri.V G Kannan,Managing Director & GE(A&S),SBI, was nominated as a
Director on the Board of the Bank representing SBI under section 25(1)
(c) of SBI(Subsidiary Banks)Act 1959, with effect from 22.10.2014 in
place of Shri. Vishvanathan.
* Shri B.Ramesh Babu, Chief General Manager (A&S) , SBI, was nominated
as a Director on the Board of the Bank representing SBI under Section
25(1)(c) of SBI (Subsidiary Banks) Act 1959, with effect from 05.05.
2014 in place of Shri Rajeev N.Mehra.
* Shri.R C Srivastava, General Manager,(A&S), SBI was nominated as a
Director on the Board of the Bank representing SBI under Section 25(1)
(c) of SBI (Subsidiary Banks) Act, 1959, with effect from 17.07.2014 in
place of Shri. P C Jena.
* Shri J.S.Phaugat, Under Secretary, Department of Financial Services,
Government of India, New Delhi, was nominated as Government Nominee
Director on the Board of the Bank under Section 25(1)(e) of SBI
(Subsidiary Banks) Act 1959, with effect from 07.05.2014 in place of
Shri M.M.Dawla.
The Board places on record its appreciation for the invaluable services
rendered by Shri S.Vishvanathan, MD & GE (A&S), and Shri Rajeev
N.Mehra, Chief Gen.Mansger(A&S), SBI,Shri. P C Jena, General Manager,
SBI and Shri.M.M.Dawla, GOI Nominee Director and welcomes the new
Directors.
15. ACKNOWLEDGEMENTS
The Board wishes to place on record its sincere appreciation of the
patronage and support of the customers, shareholders, members of staff,
Employees'' Union and Officers'' Association for their contribution to
the overall development of the Bank.
By the Order of the Board
Sharad Sharma
Managing Director
Mar 31, 2013
To the State Bank of India, Reserve Bank of India and the Central
Government, in terms of Section 43(1) of State Bank of India
(Subsidiary Banks) Act, 1959.
1. REVIEW OF BANKING OPERATIONS:
1.1. Market Share and Business Growth:
1.1.1. The business levels of the Bank and the position of
market-share in recent years are furnished hereunder.
(Rs. in crores)
Year ended 31st March 2009 2010 2011 2012 2013
Aggregate Deposits 32,388 38437 42779 49663 56,712
Percentage of growth 20.94 18.68 11.30 16.09 14.19
Market share % 0.84 0.86 0.79 0.78 0.83*
Total Advances 25,880 29,874 34,442 40,653 45,981
Percentage of growth 21.42 15.43 15.29 18.03 13.11
Market share % 0.93 0.92 0.87 0.85 0.85*
ASCB as on 22.03.2013
2.1.2. The Bank has seen continuity in growth during FY 2013 also,
with aggregate deposits reaching a level of Rs. 56,712 crs., a growth
of Rs. 7,049 crs. over the previous year, at a rate of 14.19%. The
total advances have reached a level of Rs. 45,981 crs, recording a
growth of Rs. 5,328 crs. over the previous year at a growth rate of
13.11% . As on 22.03.2013 the Bank''s market share of Deposits increased
to 0.83% in the current year from 0.78% in the previous year, though,
Bank''s market share of Advances remained static at 0.85%.
2.2 Key Performance Indicators
Sl.
No Key Indicators 2010-11 2011-12 2012-13
1. Net Profit (Rs. in Crores) 500.62 369.15 416.10
2. Return on Assets (%) 1.03 0.67 0.66
3. Return on Equity (%) 16.17 10.82 11.05
4. Expenses-lncome Ratio (%) 43.87 49.55 46.29
5. Earnings per Share (in Rs.)* 121.66 78.88 88.91
6. Gross NPA to Gross Advances (%) 2.51 3.70 4.53
7. Net NPA to Net Advance (%) 1.38 1.93 2.69
*EPS restated on account of Rights Issue during financial year 2010-11.
2.3. Income:
Total Income of the Bank increased by 16.42% from Rs. 5,595 crs. as at
March, 2012 to Rs. 6,514 crs. in March,2013. Interest Income increased
from Rs. 5,078 crs. to Rs. 5,965 crs. (17.47%). Average Yield on
Advances increased from 11.44% in FY 2012 to 11.62% during FY 2013,
while Average Yield on Investments increased from 7.22% in March 2012
to 7.30% during the same period. Non Interest Income increased by Rs.
32 crs. (6.2%) from Rs. 516 crs. to Rs. 548 crs.; the growth in profit
from sale of securities increased from Rs. 38.60 crs. to 7 66.53 crs.
2.4. Expenses:
The Total Expenditure (before provisions & contingencies) increased by
15.3% from Rs. 4,535 crs. in 2011-12 to Rs. 5,230 crs. in 2012-13.
While Interest Expenses increased by Rs. 631 crs. (18.1%) the Operating
Expenses increased by Rs. 64 crs. (6.1%) during the current year. The
Average Cost of Deposits increased from 7.09% in March, 2012 to 7.32%
in March 2013. CASA deposit share declined marginally from 32.1% as on
31.03.12 to 31.4% as on 31.03.13.
2.5. Profit:
The Operating Profit increased by 25% from X 1,059.61 crs. in FY12 to
Rs. 1,331.03 crs. in FY13, while the Net Profit increased from Rs.
369.15 crs. to Rs. 416.10 crs. (12.7%). Return on Assets (ROA) remained
largely static at 0.66 (0.67 in FY12) .Return on Equity (ROE) increased
from 10.8% to 11.1% during the year.
2.6. Capital Adequacy Ratio:
The Capital Adequacy Ratio under Basel II guidelines stood at 11.79% as
on 31st March 2013, against 12.55% as on 31st March 2012, consequent
upon an increase in Risk Weighted Assets by 14%, as against an increase
in Capital funds by 7%.
2.7. Dividend:
The Board of Directors has declared a dividend of 115% (Rs. 11.50 per
equity share of Rs. 10/-) for the year 2012-13, our Centenary Year.
This will involve a pay-out of Rs. 62.56 crs. including the tax
component. The pay out ratio for 2012- 13 works out to 12.93% as
against 12.68% for 2011-12.
3. BUSINESS REVIEW:
3.1. Deposits:
3.1.1. Total Deposits of the Bank grew by Rs. 6,784 crs. to reach the
level of Rs. 56,970 crs. Aggregate Deposits (total deposits excluding
Inter Bank deposits) stood at t 56,712 crs. as at the end of March
2013, recording a growth of Rs. 7,049 crs. (14.2%) during the year.
3.1.2. Personal Segment Deposits Personal segment deposits grew by Rs.
4,248 crs., registering a growth of 18.03%, to reach a level of Rs.
27,810 crs. as on 31st March 2013. To augment deposit growth under
Personal segment, three new deposit products were introduced.
3.2. Credit Expansion:
3.2.1. While the total advances of the Bank increased from Rs. 40,653
crs. to Rs. 45,981 crs. registering a growth of Rs. 5,335 crs. (13.1%)
during the year. Net advances (i.e. net of NPA related/ floating
Provisions, and outstanding under Staff Festival Advance) of the Bank
increased from Rs. 39,835 crs. in March 2012 to Rs. 44,932 crs. Credit
Deposit Ratio of the Bank decreased from 81.9% in March 2012 to 81.1%
in March 2013. Average Total Advances grew by Rs. 5,705 crs. (16.06%)
during the year.
3.3. Personal Segment Advances:
Personal segment advances grew by Rs. 1,081 crs. to reach a level of
Rs. 7,459 crs. Housing loans grew by Rs. 516 crs. and reached a level
of Rs. 3,732 crs. Bank has waived Pre-payment penalty/Pre- closure
charges for floating rate Housing loans and Car loans, besides
Educational loans.
3.4. Priority Sector Lending and Social Banking:
3.4.1. The total credit provided to the Priority Sector for the year
ended March 2013 stood at Rs. 13,483 crs., including Interbank
Participation Certificate of Rs. 685 crs. invested in Kaveri Grameena
Bank, which constitutes 33.8% of the Adjusted Net Bank Credit (ANBC).
Segment-wise status of these advances is as under:
- Agriculture: The direct Agricultural advances increased by 17.2%
from Rs. 4,404 crs. to Rs. 5,179 crs. Total agricultural advances went
up from Rs. 5,247 crs. to Rs. 5,752 crs, registering a growth of 10%.
- Micro and Small Enterprises (MSE): The Bank''s advance to Micro and
Small Enterprises as on 31.03.2013 is Rs. 3,756.41 crs.
- Personal & Services Banking (P&SB): While housing loans under
priority sector reached a level of Rs. 2,808.22 crs. during the year,
education loans grew by over 5.1% and were Rs. 593.89 crs. during
2012-13.
3.5. Agriculture Finance:
- SBM RECOTRAC SCHEME: A special OTS scheme for tractor NPA accounts
was introduced during the year. A recovery of Rs. 40.64 crs. was made,
involving closure of 620 accounts.
- DROUGHT RELIEF MEASURES:
With the prevalence of drought like situation in 157 of the 175 taluks
in Karnataka State, 63,809 farmers were relieved of repayment of
Agriculture loans by restructuring/ rescheduling of their loans,
amounting to Rs. 707 crs. Fresh finance was also considered for the
affected farmers.
3.6. Micro and Small Enterprises (Manufacturing):
The Bank''s advances to Micro and Small Enterprises (Manufacturing) as
on 31.03.2013 is Rs. 2,311.54 crs.
3.7. Micro and Small Enterprises (Services):
Bank''s advances to Micro & Small Enterprises (Services) as on
31.03.2013 is Rs. 1,444.87 crs.
- Credit Guarantee Scheme: The maximum limit of coverage under the
scheme is Rs. 100 lakhs. As at 31st March 2013, 8,727 accounts
amounting to Rs. 530 crs. were covered under the Scheme.
- Assistance to Weaker Section of Society: The outstanding amount
under lending to Weaker Sections at Rs. 5,787 crs. as at March 2013
constitutes 14.37% of ANBC, as against stipulated benchmark of 10%.
3.8. Assistance to Women Entrepreneurs:
The Bank''s total credit to women as at March 2013 stood at Rs. 2,502
crs, covering 1,66,998 beneficiaries, which works out to 6.27% of
Adjusted Net Bank Credit, as against the stipulated benchmark of 5%.
The Bank''s assistance to the Minorities under various schemes as at
March 2013 stood at Rs. 1,416 crs. covering 35,187 beneficiaries, which
forms 10.50% of Priority Sector Advances. The Bank has extended
financial assistance of Rs. 3.77 crs. to 93 beneficiaries under PMEGP
during the year. The Bank''s total credit under PMEGP Scheme as at March
2013 was Rs. 50 crs, covering 999 beneficiaries. The Bank has extended
financial assistance of Rs. 3.46 crs. under SJSRY during the year to
289 beneficiaries. The Bank''s advances under DRI scheme stood at Rs.
25.32 crs. as at March 2013 covering 15,181 beneficiaries and the share
of advances to SC/ST beneficiaries within this is 53.2% (Rs. 13.48
crs.). The Bank has extended financial assistance under SGSY during the
year to 69 group beneficiaries and individual beneficiaries were also
extended financial assistance to the tune of Rs. 143 lacs.
3.9. Banking Codes and Standards Board of India (BCSBI) issued revised
guidelines on Code for Banks commitment to Micro and Small Enterprises,
2012 during the year. The guidelines are hosted in Bank''s website also.
3.10.1. The total investments of the Bank in Government securities,
other approved securities and Non-SLR securities increased from Rs.
14,786 crs. as at March 2012 to Rs. 16,864.01 crs. as at March 2013.
3.10.2. Profit on sale of investments increased from Rs. 38.60 crs. in
2011-12 to Rs. 66.53 crs. in 2012-13. Yield in investment increased
from 7.22% to 7.30%.
3.11.1. Foreign Exchange Turnover of the Bank 2012-13 touched Rs.
404,178 crs. (Merchant Turnover - Rs. 24,978 crs. and Trading Turnover
- Rs. 379,200 crs.) against previous year level of Rs. 177,988 crs.
3.11.2. The exchange profit generated from Foreign Exchange business
during the 2012-13 was Rs. 58.25 crs.
3.12 International Banking
3.12.1. The level of Export Credit as on 31st March 2013 was Rs.
1,395.44 crs. (Rs. 1,325.17 crs. as on 31st March 2012) constituting
3.50% of ANBC.
3.12.2. NRI Deposits as on 31.03.2013 stood at Rs. 972 crs. showing an
increase of Rs. 201.02 crs. as against Rs. 770.98 crs., comprising
FCNR(B)/ RFC deposits of Rs. 181 crs. and NRE/ NRO deposits of Rs. 791
crs.
3.12.3. As per Bank''s BPR objectives, the Bank had set up five TFCPCs
at Bangalore, Chennai, Hyderabad, Mumbai and New Delhi. During FY 2013,
more branches have been linked to TFCPCs in order to consolidate the
front line processing and contribute expertise to all such branches,
for extending quality service to Exporters.
3.12.4. During the year Bank''s Export Credit portfolio other than
exposures to Central PSU and LC backed bills business, have been
covered under Export Credit Insurance for Banks (ECIB), Whole Turnover
Packing Credit (WTPC) and Whole Turnover Post Shipment (WTPS) Schemes
of Export Credit Guarantee Corporation of India.
3.13. Cross Selling:
During the year over 33,125 lives were insured through various products
of SBI Life Insurance Company Ltd with a premium collection of Rs.
47.17 crs. The Bank has collected a premium of Rs. 1.87 crs. while
Marketing General Insurance Products.
3.14. Government Business: State Government Transactions:
About 86% of our total Government Business emanates from State
Government transactions and the turnover is directly linked to the
budget of the State Government. A turnover of Rs. 55,854 crs. has been
achieved during FY 2012-13, as against Rs. 60,394 crs. in 2011-12. The
decrease of Rs. 4,540 crs. is on account of rise in the number of
participating Banks in the e-payment initiatives of the Government.
3.14.1. Income from Government Business: In FY 2012-13 we have earned
a commission of Rs. 67.95 crs. (FY 2011-12 Rs. 68.04 crs.) from
Government business. The average yield on Government transactions for
the year is 0.104%.
3.15.1. Contact Centre - As a customer friendly service, State Bank of
Mysore has established a dedicated "SBM Contact Centre". The Centre is
provided with a Toll Free Number 1800-425-2244 which is accessible from
throughout the country. A separate Primary Rate Interface (PRI) Number
080-22300020 is also provided. The information from Contact Centre is
available in English, Hindi and Kannada and it provides services "24
hours on 365 days (24*7*365) basis."
3.15.2. Customer Grievance Redressal:- The Bank has launched a
Customer Redressal System called SMS Unhappy. The system facilitates
customers to air their feedback/ grievances through the process of a
simple SMS message "Unhappy" to 99 0002 0002. On receipt of the message
the Bank''s dedicated Happy Room staff calls back the customer for the
purpose of Grievance Redressal.
3.16. NPA Management:
3.16.1. The stresses in the various sectors of the economy has ied to
the pressures on the quality of assets. The problems faced by textiles,
food processing and infrastructure sector contributed to a substantial
increase in NPAs in the C & I Segment. This, coupled with problems on
the agricultural front, caused by drought in most parts of the State,
has resulted in an increase of NPAs from Rs. 1,503 crs. as on March
2012 to Rs. 2,081 crs. as on March 2013. The Gross NPA ratio increased
from 3.70% to 4.53%. The net NPA ratio also increased from 1.93% to
2.69%. The provision for Non Performing Assets (including floating
provision and counter cyclical provisioning buffer) stood at Rs. 872
(735) crs. Provision Coverage Ratio is at 60.10%. A time bound action
plan with measures including effective use of SARFAESI Act,
rehabilitation of viable units, vigorous follow-up of DRT cases has
been put in place to reduce NPA levels.
3.16.2. Restructuring of Debts; The Bank continues to provide
Restructuring Package within the framework of RBI guidelines to
deserving borrowers under the Rehabilitation Programme or under
packages approved by CDR / BIFR, subject to the viability of the units
being established. The Bank has extended the package to 60491 (19569)
borrowal accounts with dues amounting to Rs. 3237.13 crs. (Rs.
2671.23crs.). Towards diminution in their fair value on account of
economic loss caused in the process of restructuring, provision to an
extent of Rs. 180.20crs. (Rs. 90.95*) crs. has been made by the Bank,
(''indicate last year''s figure)
3.17. Lead Bank Scheme:
3.17.1. The Bank has been discharging Lead Bank responsibilities in
three districts viz., Mysore, Tumkur and Chamarajanagar. The Annual
Credit Plans for 2013-2014 have been launched. The combined annual
credit plan target for 2013-2014 for all Banks in the three districts
has gone up to Rs. 8,186.87 cr from Rs. 6,513.17 cr. showing a
growth of Rs. 1,673.70 cr. (25.70% growth). As regard achievement of
previous year''s credit plan i.e. for 2012-13 it is more than 100% in
all the districts concerned.
3.17.2. To impart entrepreneurial skill and guidance to Unemployed
Youth, in general and rural youth in particular and become gainfully
self employed the Bank has established RUDSETI type of Training Centers
viz., MyBank Institute for Promotion of Self Employment and Development
(MIPSED) at Hirehally Industrial Estate, Tumkur. A similar institute
called "JSS RUDSET" is established at Mariyala, Chamarajanagar Taluk,
in association with JSS Mahavidyapeetha. Both the institutes are being
managed by personnel on deputation from the Bank.
3.18. Financial Inclusion:
3.18.1. Bank has a comprehensive Financial Inclusion Plan for the
years 2013 to 2016 for covering 3,232 villages in Karnataka with
population below 2,000 as per census 2001 based on Gram Panchayat wise
allocation of villages by SLBC. The Bank had earlier covered all 254
allotted villages with population above 2.000 with BC outlets before
31.03.2012 and another 143 villages with population of 1,600 to 2,000
as part of extension of "Swabhiman" by 31.03.2013.
3.18.2. Further the Bank implemented the smart card based EBT Scheme
in Chamarjanagar District covering all the villages in the District in
all the 4 taluks. The SSP Scheme is operational in the entire district
covering more than 53.000 beneficiaries.
3.18.3. The Bank is also participating in the Direct Benefit Transfer
Scheme of Government of India for direct credit of benefits under
Central Sponsored schemes.
3.19. Self Help Group (SHG) Lending:
The Bank has credit linked 6,790 groups with an advance amount of Rs.
348.96 crs., during the current year and taking the cumulative total of
such credit linkage programme to 1,50,103 groups with a financial
outlay of Rs. 2,041.62 crs., upto 31st March 2013.
3.20. Regional Rural Banks (RRB):
Kaveri Grameena Bank (KGB) the RRB sponsored by the Bank is having its
Head Office at Mysore, and covers 10 districts viz. Mysore, Hassan,
Chamarajanagar, Tumkur, Bangalore Urban, Bangalore Rural and
Ramanagara. After amalgamation of Chickmagalur Kodagu Grameena Bank and
Vishveshvaraiah Grameena Bank, three more districts are added viz
Chickmagalur, Kodagu and Mandya districts. Their total branch network
is 331 branches. All the branches are functioning under CBS. The total
deposits and advances of the KGB as on 31.03.2013 stood at Rs. 3845
crs. and Rs. 3013 crs. respectively.
4. HUMAN RESOURCES:
4.1. Manpower Profile:
4.1.1 Staff Strength: The total strength of the Bank as at March 2013
stood at 10,784, as against 10,249 as at March 2012. The staff
strength comprised of 3,661 officers, 4,899 clerical staff and 2,224
subordinate staff.
4.1.2. Women''s Representation: As at March 2013, there were 2,843
Women employees (comprising of 520 Officers and 2,323 Other Employees)
in the Bank, compared to 2,821 as at March 2012.
4.1.3. Scheduled Castes/Scheduled Tribes - Representation:-As at March
2013, there were 2,062 Scheduled Caste employees comprising 667
Officers, 742 Clerical Staff and 653 Subordinate staff. There were 626
Scheduled Tribe employees comprising 253 Officers, 232 Clerical staff
and 141 Subordinate staff as at March 2013.
4.1.4. Human Resources Management Solutions (HRMS):
Bank has implemented Human Resource Management Solutions (HRMS) to
handle all HR activities in a phased manner.
4.2. Training:
4.2.1. Training Activities and Coverage: The Bank regards its
employees as its critical assets and honing their skills to make them
more competitive and knowledgeable is one of its priorities. With a
view to achieve the desired results and to establish high-performance
work culture, Bank''s Learning Centers at Bangalore and Mysore are
imparting training on various subjects such as Advances and Deposits,
Bank''s various products, communication skills, marketing, behavioral
science, etc. and also to familiarize with the new technology adopted
by the Bank and upgraded on a continuous basis. Several programmes on
latest technology developments like internet Banking, mobile Banking
and other alternate delivery channels are also conducted. During the
year the Bank had trained nearly 600 newly recruited Probationary
Officers successfully. The training methodology of the Bank aims at
keeping its work-force proactive and customer centric at all times, to
meet the challenges of the competitive environment. The Bank continues
to focus on imparting training to maximum number of staff. A new
Learning Centre is due to commence operation in Hubli shortly.
4.2.2. Our Learning Centers at Bangalore and Mysore have conducted in
all 106 training / workshops both functional and computer based
programmes. During the year, 3.625 staff got trained at our Learning
Centers.
4.2.3. E-Learning: - Bank launched e- learning portal, "Gyanodaya"
with the help of State Bank of India e-learning Dept, for providing its
staff with on-line learning and training. This has an in- built
facility for self-evaluation through on-line tests. The portal is
available 24X7 and all 365 days on internet. The portal is going to
help management in training and identifying the suitable staff for
specialized areas of operation.
5. Industrial Relations
The Bank gives due importance to the settlement of terminal benefits
well in time to the staff on leaving the service of the Bank, either on
superannuation or on other grounds. During the current year 2012-2013,
as many as 449 staff members have retired from the services of the
Bank. Gratuity, Pension and commutation benefits, wherever applicable,
have also been settled on top priority. Employees joining the services
of the Bank from 01st April, 2010 are eligible under the Defined
Contributory Pension Scheme (Corporate Model). Keeping the increase in
medical cost in mind, Bank has extended limit of the existing Retired
Employees'' Medical Benefit Scheme.
5. The Banks relationship with its employees remained harmonious and
cordial through-out the year.
6. SUPPORT FUNCTIONS:
6.1. Technology Up-qradation:
6.1.1. Automated Teller Machines as Acquirer and Issuer: We have
analyzed the ATM Operations for the year 2012-13 and observed that the
Bank is a NET acquirer i.e. other Bank customers using our Bank''s ATMs
are more than our Bank customers using other Bank ATMs.
6.1.2. Value added service in our ATMs and launch of new debit cards:-
In addition to the withdrawal of cash, many other value added services
are also available through ATMs, like payment of insurance premium,
mobile recharge, card payments, mobile Banking registration, etc. The
Point of Sale transactions have registered a consistent growth and with
a view to further increase the POS usage and e- commerce transactions,
a new card strategy has been formulated and introduced in our Bank.
Accordingly, new 16 digit Debit Cards and Card Verification Value (CVV)
have been rolled out. Bank has recently introduced Platinum card for
affluent class customers, which is a chip-based Magstripe card, with
higher limit for daily Cash withdrawal and POS transaction.
6.1.3. Dash-Board/Trackina in our ATMs:- We have launched a dedicated
page for ATMs on our intranet site, furnishing the month-wise
performance of all the ATMs in various parameters with regard to
availability/ Zone wise, Region-wise down-time, frequency of breakdown,
etc., and is used as a Dash Board for monitoring individual ATM,
Branch, Region, Zone- wise ATM performance.
6.1.4. Internet Banking:- Bank is offering Internet Banking facility
to both retail and corporate customers under the url www.onlinesbm.com,
with a host of functionalities, which includes inter-bank fund
transfer, e-payment of State and Central taxes, e-commerce facilities
for online shopping of goods and services, online opening of fixed and
recurring deposits, etc., The number of registrations and volume of
transactions through Internet Banking has seen a growth of 38.34% and
64.52%, respectively, during the year.
6.1.5. Mobile Banking: Mobile Banking service, under the name State
Bank Freedom, is available through four different modes viz.
Application mode, WAP mode, Unstructured Supplementary Services Data
(USSD) and SMS-based, for use by customers. All important
functionalities, including enquiry, mini statements, inter-bank fund
transfer through NEFT and IMPS and bill payment facilities are offered.
The service has seen a growth of 193.36% and 476% in terms of the
number of registrations and transactions, respectively, during the
year.
6.1.6. Electronic Payment System:
Percentage of transactions through Alternate Delivery Channels to total
transactions of the Bank is 31.06%. Percentage of all electronic (ATM,
Internet Banking, Mobile Banking, RTGS, NEFT and ECS) transactions to
Total transactions of the Bank is 33.28%. These figures have improved
from 28.68% as on 31.03.2012 to 31.06% as on 31.03.2013
6.1.7. Bank''s Website :
www. statebankofmysore.co.in. The Bank''s Website started as a
technology platform to showcase Bank''s products and schemes in the
cyberspace, has transformed slowly into a compendium of information
encompassing all areas of Bank''s business initiatives, financials,
acts, codes, policies, charters, products and services, interest rates,
NRI/Forex services etc. Information on Technology initiatives products
like Internet Banking, Mobile Banking, Automated Teller Machines are
provided in the website. Customers can also know their KYC status
through the website.
6.1.8: Online Customer Complaint Kiosk: Bank has developed new software
packages for registering of customer complaints through Online Customer
Complaints Kiosk. Customers can now visit these Kiosks and lodge their
complaint themselves. Currently the Kiosk has been installed in Head
Office and all Zonal Offices and will be rolled-out to Regional Offices
shortly.
6.1.9. Cheque Truncation System: CTS (Cheque Truncation System) is
basically an online image-based cheque clearing system where cheque
images and Magnetic Ink Character Recognition (MICR) data are captured
at the collecting Bank branch and transmitted electronically. The
objective of CTS is faster clearing of cheques through truncation or
stopping of physical movement of cheques. In addition to Chennai and
Delhi centers, CTS has been successfully rolled out in Bangalore,
Coimbatore, Hyderabad and Kolkata centers during 2012-13.
6.2. NEW BUSINESS:
6.2.1: Merchant Acquiring Business (MAB): It is a New Business
initiative, which is a mechanism of facilitating payment for goods and
services purchased through medium of a debit/ credit card, using Point
of Sales (POS) machines. It is advantageous to the merchants since it
involves cash-less and increased volume of sale. Merchant Acquiring
Business has been successfully launched by our Bank in various Merchant
establishments. We propose to install 2,000 POS machines within FY
2013-14.
6.2.2: Cash Deposit Machine:- Cash Deposit Machines are designed to
accept cash from customers using Debit Cards. It instantly gives credit
to the customer''s a/c online. We have deployed 4 CDMs and intend to
deploy 30 more CDMs in the year 2013-2014.
6.2.3: Self Service Kiosk (SStO:- Presently we have 40 Multi Functional
Kiosks (MFK) in various places. We have undertaken to convert them into
SSKs with their improved features of pass book printing, fund transfer
through NEFT/RTGS/GRPT by using ATM Debit Cards.
6.2.4: We are going to introduce Business Debit cards for our
Commercial Customers, in order to divert such transactions to the
Alternate channels. Initially we plan to issue 5000 VISA Pride Business
Debit Cards.
6.2.5: We already have a base of 300 Green Channel Counters (GCC)
machines deployed in 153 branches. GCC is a device of paperless
transactions by using ATM Debit cards in order to decongest the single
window counters. We propose to deploy 200 more GCC machines for our
branches in the year 2013-2014.
6.3. Business Continuity Planning:
6.3.1. In the backdrop of growing complexity of financial products and
the increased leveraging of technology, operational risks have assumed
critical importance in recent times. The treatment of operational risk
as a distinct risk category along with credit and market risks in the
Basel II framework is a manifestation of the significance of
operational risk in impacting the risk profile of a Bank. Working in
this direction our Bank has adopted well defined IT Policy and IS
Security Policy which is being periodically reviewed and updated.
6.4.1.The MIS Department consolidates and maintains the Credit
Information System (CIS) database apart from collating information from
branches and Head Office Departments for submission of various
statements to Reserve Bank of India like submission of Basic
Statistical Returns, Sectoral Deployment of Funds etc,.
7. SYSTEMS AND PROCEDURES:
7.1.1. Systems & Procedure Department is a special resource available
at Head Office for effective management of work organization,
concerning Bank''s Systems and Procedures. The department regularly
reviews the systems and procedures in the area of general service
charges and systems & procedure of the Bank.
7.1.2. The Department during the year has also reviewed the service
charges structure with regard to NEFT/SBGRPT Transactions, Multi-city
cheque transactions removal of charges for non-maintenance of minimum
balance and revision of Inter core service charges.
8. CONTROL AND SUPERVISION:
8.1. RISK MANAGEMENT:
8.1.1. An independent Risk Governance structure is in place for
Integrated Risk Management, covering Credit, Market anet Operational
Risks. This framework visualizes empowerment of Business Units at the
operating level, with technology being the key driver, enabling
identification and management of risk at the place of origination.
8.1.2. BASEL IMPLEMENTATION: The Bank has migrated to the Basel II
framework, with the Standardized Approach for Credit Risk and Basic
Indicator approach for Operational Risk. Bank has implemented the
Standardized Measurement Method for Market Risk.
8.1.3. CREDIT RISK MANAGEMENT:
Reserve Bank of India has issued final guidelines on implementation of
Internal Ratings Based (IRB) Approaches for calculation of Capital
Charge for Credit Risk on 22.12.2011 and our Bank (along with SBI and
other Associate Banks) has decided to apply for permission to RBI for
migrating to Advanced Approach for Credit Risk under Basel II.
8.1.4. MARKET RISK MANAGEMENT:
Bank is using Standardized Measurement Method (SMM) for computation of
capital charge and preparations are on for migrating to Internal Models
Approach (IMA) for which the Bank has been utilizing the services of a
consultant. The Bank is likely to make an application to RBI, for
migration to IMA by 30th June 2013.
8.1.5. OPERATIONAL RISK MANAGEMENT: Reserve Bank of India has
prescribed three approaches for computing capital charge for
Operational Risk, viz. (i) Basic Indicator Approach (BIA), (ii) The
Standardized Approach (TSA) and (iii) Advanced Measurement Approach
(AMA). Currently the Bank is following the Basic Indicator Approach.
As per AMA guidelines Banks are allowed to switch over from BIA to AMA
directly. Bank is endeavoring to move directly to the Advanced
Measurement Approach in view of the minimal changes in capital
requirement under TSA as compared to BIA. All the policies and
documents have been reviewed as suggested by the consultants to meet
minimum required standards.
9. BUSINESS PROCESS RE- ENGINEERING (BPR}:
9.1.1. Bank has rolled-out various BPR initiatives since 2004, in
consonance with the design principles provided by the Corporate Centre.
The BPR initiatives leverage technology to significantly enhance
customers'' satisfaction and convenience. BPR initiatives rolled out
over the years have stabilized and started yielding desired results. So
far 19 BPR initiatives have been rolled-out. CCPC Mangalore has been
rolled-out during this year.
10. ASSET LIABILITY MANAGEMENT:
10.1. The Asset Liability Management System has been functioning as
per the guidelines prescribed by RBI. The Asset Liability Management
Committee (ALCO) of the Bank is entrusted with the task of managing
liquidity and interest rate risk. The tolerance limits for liquidity
mismatches and interest rate risks are fixed in accordance with RBI
guidelines and Bank''s ALM Policy, and these are reviewed by ALCO at
regular intervals. Various interest rate revisions, including the
revision of BPLR/Base Rate are thoroughly discussed and decided by
ALCO, duly considering all the relevant factors. Possible mismatches
in the Structural Liquidity projections of the Bank are also discussed
with regard to long term asset exposures and appropriate decisions
taken.
11. AUDIT AND INSPECTION:
11.1 .Audit:
11.1.1. The overall objective of Internal Audit is to contribute to
the effectiveness of the Internal Control System in achieving the
Bank''s objectives besides providing high quality counsel to management
on the effectiveness of Risk Management and Regulatory compliance of
the Bank. Towards this end, Risk Focussed internal Audit (RFIA) and IS
Audit is conducted in 567 branches/BPR entities, as against a target of
branches/BPR entities envisaged in the Annual Audit Plan 2012-13.
11.1.2. Concurrent Audit is a major function which monitors proper
follow-up of laid down systems and procedures on a continuous basis.
142 branches/offices covering 54.42% of deposits and 73.62% of advances
and 7 Head Office Departments were subjected to Concurrent Audit during
this year.
11.1.3. We conduct Special Revenue Audit every year to guard against
income leakage. 480 branches with advances level of more than Rs. 10
crs. and income leakage of Rs. 1 lakh and above were subjected to
Special Revenue Audit (as against 423 branches during the previous
year).
11.1.4. Structured meetings were held at quarterly intervals at Zonal
Centres and half-yearly intervals at Regions headed by Deputy General
Managers during 2012-13, to follow up pending compliances and bring
about qualitative improvement in compliances at all levels.
11.2. Credit Audit:
The audit of loan appraisal and credit management for high value credit
accounts, with the aim of improving the asset quality of the Bank, is
undertaken by the Credit Audit Department. Accounts with total
exposure (FB&NFB) of Rs. 2 crs. and above are covered under Credit
Audit. During the FY 2013 1,229 loan accounts in 214 branches were
covered under Credit Audit. Out of 1,229 accounts, 1,109 accounts (90%)
were rated as low and very low Risk accounts.
11.3. Vigilance:
11.3.1. Vigilance administration as an important aspect of management
function is carried out as per the directives of the Central Vigilance
Commission, so as to achieve good Corporate Governance for the overall
growth of the Bank.
11.3.2. As an initiative, the "Fraud Cell" has been revamped,
strengthened and christened as "Fraud Monitoring and Investigation Cell
(FMIC)" and brought under the Vigilance Department. The FMIC will
monitor certain critical areas of branch functioning on regular basis
as part of surveillance responsibilities.
11.3.3. In accordance with the guidelines of the Central Vigilance
Commission, the ''Vigilance Awareness Week'' was observed at all the
offices of the Bank from 29th October 2012 to 3rd November 2012.
11.3.4, The Vigilance Department is maintaining liaison with outside
agencies like the Central Vigilance Commission and Central Bureau of
Investigation and also effectively coordinating with various
departments within the Bank so that vigilance cases are disposed of
speedily.
12. OTHER ASPECTS:
12.1. Customer Service:
12.1.1. The Bank continues to accord highest priority for customer
service. The Bank has been a voluntary member of Banking Code and
Standards Board of India (BCSBI) and is committed to provide services
of a high order, in a transparent manner. Bank has adopted the BCSBI
Code of Commitment to Customers and placed the same in the Bank''s
website. The Policy guidelines relating to Collection of Cheques,
Grievance Redressal Mechanism and Compensation were placed on the
Bank''s website for the use of the customers.
12.1.2. Right to Information: The Right to Information Act 2005 - The
required authority structure for implementation of the Act has been put
in place for prompt disposal of RTI requests for information, within
the time frame period as prescribed under the Act. The Bank''s website
also carries all the relevant information on the implementation of the
Act.
12.2. Productivity: Business per employee increased from Rs. 8.81 crs.
as at March 2012 to Rs. 9.55 crs. as at March 2013. The Business per
branch increased from Rs. 124.27 crs. in March 2012 to Rs. 132 crs. in
March 2013.
12.3. Public Relations:
12.3.1. As a part of its strategy to give a thrust to its corporate
image and brand equity, the Bank''s publicity has been effectively
carried out through the medium of attractive hoardings, press
advertisements, banner displays, glow sign displays at Bangalore
International Airport Limited, Railway Station and Bus Stations, in
important cities/towns and advertisements on modern bus shelters, etc.
Customers meetings were conducted in many of the branches, especially
in rural centres, to project the image of the Bank and publicize the
advantages of thrift and timely repayment of Bank loans.
The Bank also co-sponsored ''Smarananjali'' - tribute to Jawans - held at
Rajbhavan Bangalore. These activities have resulted in good publicity
thus enhancing the Bank''s image in the eyes of the public. A LCD based
video hoarding has also been put up in the Head Office compound for
improved publicity display of our products and services.
12.4. Organizational Development:
12.4.1. Branch Expansion: The Bank has opened 44 new branches during
the year 2012-13. With this, the Bank''s network of branches stands at
780 spread over 15 States.
12.5. Implementation of Official Language Policy:
12.5.1. In pursuance of constitutional provisions, Bank is making
all-out efforts to speed up propagation of Official Language Hindi and
its progressive use in day-to-day official work. Bank is progressively
improving usage of Hindi and Regional Language to serve the customers
to their best satisfaction bringing transparency in administration.
Efforts have also been made to create favorable atmosphere for use of
our own languages.
12.6. Our Bank as a caring and responsible corporate entity is alive
to the social expectations and well-being of society, and is
undertaking community services activities through the network of
Branches, and associating with community development projects.
12.6.1. During this year our Bank actively participated in the State
Bank Group initiative of donating water purifiers to Government/Aided
schools through each of its branches /offices on Teachers Day -2012 and
also on the eve of New Year-2013. The Bank donated a total of 1,553
water purifiers at a cost of Rs. 140 lacs (approximate) for the benefit
of the students at Rural schools. The Bank has sanctioned an amount of
Rs. 100 lacs to Bharata Ratna Sir M. Visvesvaraya National Training
Facilities for skills for all (BMV NTSFA) Society Project.
13. CORPORATE GOVERNANCE:
13.1.1 State Bank of Mysore, as an organization driven by values, is
committed to pursue objectives that are in the interests of the Bank,
shareholders and all stake holders and the society at large, in
consonance with best practices.
14.AUDIT
M/s. Bhasin Raghavan & Co., M/s. K. P. Rao & Co., M/s. B. L. Ajmera &
Co., M/s. M K P S & Associates, M/s. Bubber Jindal & Co ., and M/s.
Maharaja N. R. Suresh & Co., have been appointed as the Statutory
Central Auditors of the Bank for the accounting period ended 31 st
March, 2013 by State Bank of India, with the approval of Reserve Bank
of India. 402 branches of the Bank were subjected to Statutory Branch
Audit, as against 654 branches audited last year.
15. ACKNOWLEDGEMENTS
The Board wishes to place on record its sincere appreciation of the
patronage and support of the customers, shareholders. members of staff,
Employees'' Union and Officers'' Association for their contribution to
the overall development of the Bank,
Sharad Sharma
Managing Director
Mar 31, 2012
REPORT OF THE BOARD OF DIRECTORS
To the State Bank of India, Reserve Bank of India and the Central
Government, in terms of Section 43(1) of State Bank of India
(Subsidiary Banks) Act, 1959.
2. REVIEW OF BANKING OPERATIONS
2.1. Market Share and Business Growth
2.1.1. The business levels of the Bank and the position of market share
in the recent years are furnished hereunder.
Year ended 31st March
2008 2009 2010 2011 2012
Aggregate Deposits 26,781 32,388 38437 42779 49663
Percentage of growth 25.17 20.94 18.68 11.30 16.09
Market share % 0.84 0.84 0.86 0.79 0.78*
Total Advances 21,315 25,880 29874 34442 40653
Percentage of growth 27.09 21.42 15.43 15.29 18.03
Market share % 0.90 0.93 0.92 0.87 0.85*
ASCB as on 30.03.2012
2.1.2. The Bank has seen continuity in growth during the current year
also with aggregate deposits reaching Rs 49663 crores, a growth of Rs
6884 crores at 16.09% and total advances reaching a level of Rs.40653
crores recording a growth of t 6211 crores at 18.03%. As on 30.03.2012
the Bank's market share in deposits decreased to 0.78% from 0.79%, and
the Bank's market share in Advances also reduced to 0.85% from 0.87%
during the year 2011-12. The marginal decline in the market share is on
account of subdued growth in advances at 15.76% as on 30.3.2012 as
against ASCB growth of 19.35%. The market share under advances
marginally declined, notwithstanding to the fact an increase in growth
rate in advances from 15.29% as on 31st March 2011 to 18.03% as on 31st
March 2012. The Bank is proposing a corporate business plan for the
year 2012-13 to improve its retail business base & hence improve its
market share.
2.2 Key Performance Indicators
2009-10 2010-11 2011-12
Key Indicators
SI.
No.
1. Net Profit (Rs in Crores) 445.77 500.62 369.15
2. Return on Assets (%) 1.06 1.03 0.67
3. Return on Equity (%) 21.50 16.17 10.82
4. Expenses-lncome Ratio (%) 43.60 43.87 49.55
5. Earnings per Share (in Rs) 111.07* 121.66 78.88
6. Gross NPA to Gross Advances (%) 2.00 2.51 3.70
7. Net NPA to Net Advance (%) 1.02 1.38 1.93
EPS restated on account of Rights Issue during financial year 2010-11.
2.3. Income
Total Income of the Bank increased by 23.39% from Rs4534 crores as at
31st March, 2011 to Rs5595 crores in 31st March,2012. Interest Income
increased from Rs4079 crores to Rs 5078 crores (24.50%). Average Yield on
Advances increased from 10.33% in 2010-11 to 11.44% during 2011-12,
while Average Yield on Investments increased from 6.95% as on 31st
March 2011 to 7.22% as on 31st March,2012. Non Interest Income
increased by Rs 61 crores (13.45%) from Rs 455 crores to Rs 516 crores;
the growth in profit from sale of securities from Rs 13.62 crores to Rs
38.60 crores. The ratio of Non-Interest Income to Total Income was
lower at 9.23% (10.04% last year).
2.4. Expenses
The Total Expenditure (before provisions and contingencies) increased
by 34.96% from Rs3361 crores in 2010-11 to t 4535 crores in 2011-12.
While Interest Expenses increased by X 1051 crores (43%) the Operating
Expenses increased by Rs 124 crores (13%) during the current year. The
Average Cost of Deposits increased from 5.56% in March, 2011 to 7.09%
in March, 2012 predominantly owing to reduction in CASA share from
33.97% (31.03.11) to 32.03% (31.03.12).
2.5. Profit
While the Operating Profit decreased from Rs1173.75 crores in 2010-11 to
Rs 1059.61 crores in 2011-12 (down by 9.72%), the Net Profit decreased
from X 500.62 crores to Rs 369.15 crores (26.26%). The decline in net
profits was predominantly on account of the necessity to provide more
on our non- performing assets. Return on Assets (ROA) decreased from
1.03 % to 0.67% and Return on Equity (ROE) decreased from 16.17 % to
10.82% during the year.
2.6. Capital Adequacy Ratio
The Capital Adequacy Ratio under Basel II guidelines stands at 12.55%
as on 31st March 2012, against 13.76% as on 31st March 2011. The
Capital Adequacy Ratio of the Bank, however, is above the statutory
requirement of 9%.
2.7. Dividend
The Board of Directors has declared a dividend of 100% (Rs10 per equity
share of Rs10/-) for the year 2011-12. This will involve a pay-out of Rs
54.39 crores including the tax component. The pay out ratio for 2011-12
works out to 12.68% as against 9.35% for 2010-11.
3. BUSINESS REVIEW
3.1. Deposits
3.1.1. The Total Deposits of the Bank grew by Rs 6961 crores to reach
the level of Rs 50186 crores and the Average Total Deposits grew by Rs
5475.05 crores (13.71%) during the year 2011-12. While the Aggregate
Deposits (total deposits excluding inter bank deposits) stood at Rs
49663 crores as at the end of 31st March 2012 recording a growth of Rs
6884 crores (16.09%) during the year, the share of CASA deposits to
Aggregate Deposits decreased from 33.97% as on 31st March 2011 to
32.03% as at 31st March 2012.
3.1.2. Personal Segment Deposits
The Personal segment deposits grew by Rs 4100 crores, registering a
growth of 21.07% to reach a level of Rs 23562 crores as on 31st March
2012. Campaigns were conducted to increase the Personal segment
deposit base of the Bank. As a result the share of Personal segment
deposits in the aggregate deposits has increased to 47.44% during the
year from 45.49%. The number of deposit accounts under Personal segment
has increased by 7,08,574 during the year.
To increase Savings Bank growth under Personal segment three new
deposit products viz. Mybank Suraksha Savings, Mybank Suraksha Savings
Plus and Mybank Suraksha Time deposit account were introduced. These
products provide depositors free Accidental death cover upto Rs 5.00
lacs
3.2. Credit Expansion
3.2.1. While the total advances of the Bank increased from Rs 34442
crores to Rs 40653 crores registering a growth of Rs 6211 crores (
18.03%) during the year, net advances (i.e. net of NPA related/floating
Provisions, and outstanding under Staff Festival Advance) of the Bank
increased from Rs 34030 crores as on 31st March 2011 to Rs 39835 crores
as at 31st March,2012. Credit Deposit Ratio of the Bank increased from
80.51% as on 31st March 2011 to 81.86% as at 31st March 2012. The
Average Total Advances grew by Rs 4543 crores (14.66%) during the year.
3.2.2. The Head Office Credit Committee - I (HOCC-I) with the Managing
Director as Chairman and Head Office Credit Committee - II (HOCC-II)
with the Chief General Manager as Chairman, which have been set up in
order to make the credit process speedier and to take decisions through
a committee approach, held 63 and 38 meetings respectively to
facilitate growth in Non-food Advances. In addition, Zonal Office
Credit Committees are functioning at all the five Modules of the Bank,
while in respect of DGM headed branches, a committee called HOCC-III is
functioning.
3.3 Personal Segment Advances
Personal segment advances grew by Rs 443 crores to reach a level of Rs
5815 crores. Housing loans grew by 235 crores and reached a level of Rs
3216 crores. The Bank has introduced a new scheme Mybank Suraksha Loan,
which provides loans to cover the life insurance premium for Home loan
borrowers. To increase the Gold loan business under Personal segment a
Special Campaign was conducted. As a result gold loans grew by Rs 31
crores to reach a level of Rs 58 crores.
The Bank has waived Pre-payment penalty/Pre-closure charges for
floating rate Housing loans and Car loans. The Bank has introduced a
facility of applying online for Home loans and Car loans besides
Education loans.
3.4. Priority Sector Lending and Social Banking
3.4.1. The total credit provided to the Priority Sector for the year
ended March 2012 stood at Rs11631.10 crores, which constitutes 34.16 %
of the Adjusted Net Bank Credit (ANBC). Segment wise status of these
advances are as under:
- Agriculture: The direct agricultural advances increased by 16.87%
from Rs 3767.94 Crores to Rs 4403.68 Crores. However, the overall
agricultural advances declined by 2.43% from Rs 5377.75 Crores to Rs
5247.21 Crores mainly due to decrease in indirect agriculture from Rs
1609.81 crores to Rs 843.53 crores.
- Micro and Small Enterprises (MSE): The Bank's advances to Micro and
Small Enterprises as on 31.03.2012 is Rs 3353.68 crores.
- Personal & Services Banking (P&SB): While housing loans under
priority sector grew by 2.85 % and reached a level of Rs 2465.34 crores
during the year, education loans grew by over 1.66% and reached a level
of 564.87 crores during 2011-12.
3.5. Agriculture Finance
3.5.1. During the year ended 31st March 2012, the Bank has sanctioned
57295 Kissan Credit Cards amounting to Rs 1000.31 crores. A special
campaign was also conducted during the year for coverage of all
eligible farmers with KCC limits and all non- farmers in rural areas
with SB-cum-OD Limit in the bank's Service Area.
3.6. Micro and Small Enterprises (Manufacturing)
3.6.1. The Bank's advances to Micro and Small Enterprises
(Manufacturing) as on 31.03.2012 is Rs 2209.07 Crores.
3.6.2. While continuing all the existing products and schemes
introduced to take care of the varying financial needs of the sector,
the Bank has introduced MyBank Surya Kiran Scheme to extend finance for
purchase of Solar Photo Voltaic home Lighting system at a concessionary
rate of interest. The bank has introduced a Scheme for issuance of
Weavers Credit Card for the handloom weavers for their working capital
and investment requirements. Bank has several schemes to cater to the
needs of Micro and Small Enterprises (Manufacturing) sector.
3.7. Micro and Small Enterprises (Services)
3.7.1.The Bank's advances to Micro and Small Enterprises (Services) as
on 31.03.2012 is Rs 1346.99 Crores.
3.7.2.The Bank has introduced My bank Home Stay to help development of
tourism in the State of Karnataka. Initially the Scheme is restricted
to branches in Kodagu and Chikmagaluru District.
3.8. Credit Guarantee Scheme
3.8.1.The Bank continued to extend collateral free financial assistance
to MSE sector by participating in Credit Guarantee Scheme of CGTMSE.
The maximum limit of coverage under the scheme is Rs 100 lakhs. As at
31st March 2012, 6169 accounts amounting to Rs 349.23 crores were
covered under the scheme.
3.9. Assistance to Weaker Sections of the Society
3.9.1.The Bank continued to extend financial assistance to Weaker
Sections of the Society comprising of small & marginal farmers with
land holdings of 5 acres or less, landless labourers, tenant farmers
etc., village & cottage industries whose individual limits does not
exceed Rs 50,000/-, SJSRY, SGSY, SLRS, DRI, Self-Help Groups and
advances to SC/ST beneficiaries. The outstanding amount under lending
to Weaker Sections at Rs 4756 crores as at the end of March 2012
constitutes 13.97% of ANBC, as against the stipulated benchmark of 10%.
3.10. Assistance to Women Entrepreneurs
3.10.1.A booklet on "Charter for Women" containing the details of
concessions available to women has been supplied to all the branches
for display and distribution. The Bank's total credit to women as at
the end of March 2012 stood at X 2006 crores covering 140461
beneficiaries, which work out to 5.89% of Adjusted Net Bank Credit as
against the stipulated benchmark of 5%.
3.11. Measures to improve the economic conditions of Minority
Communities
3.11.1.The Bank's assistance to the minorities under various schemes as
at the end of March 2012 stood at Rs 1359.87 crores covering 31298
beneficiaries, which forms 11.69% of Priority Sector Advances.
3.12. Government Sponsored Schemes
The position of assistance rendered under various Government sponsored
schemes by our Bank as at the end of March 2012 is as detailed below:-
3.12.1. Prime Minister's Employment Generation Programme (PMEGP)
The Government of India has launched the new scheme "Prime Minister's
Employment Generation Programme (PMEGP)" to empower first generation
entrepreneurs to set up micro enterprises across the country by merging
the earlier Prime Minister's Rozgar Yojana (PMRY) and Khadi & Village
Industries Commission's Rural Employment Generation Programme (REGP)
from the financial year 2008- 09. The Bank has extended financial
assistance of Rs.6.62 crores to 154 beneficiaries under PMEGP during the
year. The Bank's total credit under PMEGP Scheme as at the end of March
2012 stood at Rs 41.50 Crores covering 812 beneficiaries.
3.12.2. Swarna Jayanthi Shahari Rojgar Yojana (SJSRY) Scheme
The Bank has extended financial assistance of Rs 6.42 crores under SJSRY
during the year to 542 beneficiaries. Total amount outstanding under
SJSRY scheme as at the end of March 2012 is at Rs 20.70 crores covering
4232 beneficiaries.
3.12.3. Differential Rate of Interest (DRI) Scheme
The Bank's advances under DRI scheme stood at Rs 15.94 crores as at the
end of March 2012 covering 16790 beneficiaries and the share of
advances to SC/ST beneficiaries within this is 52.24 % (Rs 8.32crores).
3.12.4. Swarna Jayanthi Gram Swarozgar Yojana (SGSY) Scheme
The Bank has extended financial assistance of Rs 359.00 lacs under SGSY
during the year to 92 group beneficiaries, and 120 individual
beneficiaries were also extended financial assistance to the tune of Rs
76.00 lacs.
3.13.lnvestments
3.13.1. The total investments of the Bank in Government securities,
other approved securities and Non-SLR securities increased from Rs
12,949 crores as at the end of March 2011 to Rs 14,786 crores as at the
end of March 2012.
3.13.2. The Profit on sale of investments increased from Rs 13.62
crores in 2010-11 to Rs 38.60 crores in 2011-12 due to churning in
liquid mutual funds & softening of G-Sec yields in the second half of
the year. During the year interest income from investments, registered
a growth of Rs 135.66 crores (15.69%) over March, 2011 level.
3.13.3. While interest yield on investments increased from 6.95 %
(2010-11) to 7.22 % (2011-12) due to the fact that new securities
purchased were at higher yield levels, the yield on investments
including profit on sale of securities increased from 6.97 % to 7.24 %
during the same period.
3.13.4 As part of Group Synergy exercise Integrated Forex Module was
introduced in the Bank effective from 05th September 2011. Foreign
exchange transactions are now under Core Banking Solutions.
3.13.5. The exchange profit generated from Foreign Exchange business
during the year 2011-12 was Rs 32.56 crores
3.14. International Banking
3.14.1. The level of Export Credit as on 31st March 2012 was Rs
1,325.17 Crores (Rs 1260.62 Crores as on 31st March 2011) constituting
3.85% of ANBC. In order to encourage exports, more eligible exporting
units were offered Gold Card Scheme on ' competitive terms including
interest rate concession of 0.25%. Exporters1 meets were arranged at
strategic centers periodically.
3.14.2. NRI Deposits as on 31.03.2012 stood at Rs 770.98 Crores showing
an increase of Rs 114.30 crores as against Rs 656.68 Crores, comprising
of FCNR(B)/RFC deposits of Rs 189.02 Crores and NRE/NRO deposits of Rs
581.96 Crores.
3.14.3. As at the end of the current financial year, the export credit
denominated in foreign currency stood at USD 136.02 million as at the
end of current financial year 2011-12, against USD 101.08 million as at
the end of previous year 2010-11.
3.14.4. The Bank has also been offering Foreign Currency Loans
(FCNR(B) Loans) to its customers at LIBOR linked rates which stood at
USD 37.41 million as at the end of the current financial year 2011-12
as against USD 42.29 million as at the end of previous year 2010-11.
3.14.5. The Foreign Exchange Turnover of the Bank 2011-12 touched Rs
177988 crores (Merchant Turnover - Rs 31583 crores and Trading Turnover
- Rs 146405 crores) against the previous year level of Rs 172001 crores
(Merchant Turnover- Rs 34343 crores and Trading Turnover - Rs 137658
crores)
3.14.6. As per Bank's BPR objectives, the Bank had set up five Trade
Finance Central Processing Centres (TFCPC) at Bangalore, Chennai,
Hyderabad, Mumbai and New Delhi. During the current financial year
(2011-12), more branches have been linked to TFCPCs for extending
quality service to Exporters.
3.15. Cross Selling
During the year the Bank sold 29135 policies of SBI Life Insurance
Company Ltd and collected a premium of Rs 46.83 Crores. The Bank has
collected a premium of Rs 19.76 Crores, while marketing General
Insurance Products. In respect of Investment Products, the Bank is
selling Mutual Funds products of SBI MF and UTI MF. Applications for
SBI Credit Cards are also sourced by the Bank. The Bank has earned an
income of Rs 8.77 Crores from Cross Selling Business during the Year
2011.12.
3.16. Government Business
3.16.1. State Government Transactions: The bank has been handling a
major share (about 46% during 2011-12) of Government of Karnataka
Transactions for the past many years. About 86% of our total Government
Business emanates from State Government transactions and the turnover
is directly linked to the budget of the State Government. A turnover of
Rs 60,394 crore has been achieved during the year 2011-12.
3.16.2. Central Government Transactions: During the year 2011- 12,
business from various Central Government Department like Postal,
Railways, Defence, Central Board of Direct Taxes, Central Board of
Excise and business from various Central Schemes like Public Provident
Fund, Senior Citizens Savings Scheme, etc., constituted approximately
14% of the Bank's total Government Business turnover. Our business
turnover from Central Government departments during the year 2011-12
was Rs 10,075 crores over the turnover of Rs 9,628 crores registered
during 2010-11 (up by Rs 446 crores (4.64%).
3.16.3. Income from Government Business: We have earned a commission
of Rs 68.06 crores (an increase of Rs 3.30 crores) from Government
business during the year 2011-12. The average yield on Government
transactions for the year was 0.09%.
3.16.4.The New system of e-Payment of Commercial Taxes/VAT introduced
by Government of Karnataka has been successfully launched during the
year in our bank.
3.16.5.We are actively involved in e-governance initiative of Govt, of
Karnataka in their proposed roll out of "Khajane-N" for integration of
operations of various stakeholders during 2012-13.
3.16.6. A major breakthrough was achieved by the bank in introducing a
"Straight Through Process" for timely and accurate transfer of New
Pension Scheme (NPS) subscriptions to the trustee bank account, to
mitigate the problem of reconciliation.
3.16.7. The Bank is actively involved in the e-governance initiatives
of Karnataka State Government for automation of all treasury payments.
3.17. Marketing Initiatives
3.17.1. For sustainable growth marketing of Bank's products and
services on an ongoing basis, assumes central role in its operational
activities. The institutional setup to meet the new challenges in
marketing, using the power of technology, has accordingly been
strengthened at various operating levels. Besides, a Marketing
Department functioning at Head Office, marketing functionaries are also
placed at Zonal/ Regional offices. To further strengthen the marketing
activities, Customer Relationship Managers are also placed in large
branches.
3.17.2. Marketing efforts at various levels of the Bank have enabled
the Bank to open large number of the salary accounts of Government
Employees.
3.17.3. Focused marketing efforts directed towards improving Retail/
Personal Segment advances by conducting Home Loan/Car Loan and
Educational Loan Melas at important centres of the Bank were conducted
during the year. With a view to provide our customers a wide basket of
products, the Bank has been introducing new products/services
regularly.
3.17.4. Contact Centre - As a customer friendly service, State Bank of
Mysore has established a dedicated "SBM Contact Centre". The Centre is
provided with a toll free number 1800-425-2244 which is accessible from
throughout the country. A separate primary rate interface (pri) number
080-22300020 is also provided. The information from the Contact Centre
is available in English, Hindi and Kannada and it provides services for
24 hours on 365 days (24*7*365) basis.
3.17.5. Customer Grievance Redressal: The Bank has launched a Customer
Redressal System called SMS Unhappy. The system facilitates customers
to air their feedback/ grievances through the process of a simple SMS
message, 'Unhappy', to 99 0002 0002. On receipt of the message, the
Bank's dedicated Happy Room staff call back the customer for the
purpose of Grievance Redressal.
3.18. NPA Management
3.18.1. Liquidity crisis and the recession that followed adversely
affected many sectors of the economy lending to a spurt in Non
Performance Assets.
The problems faced by the Iron & Steel and Aviation sector contributed
to a substantial increase in NPAs in the C & I Segment. This, coupled
with problems on the agricultural front, caused by severe drought in
most part of the state has resulted in the increase of NPAs from Rs 864
crores as on 31st March 2011 to Rs 1503 crores as on 31st March,2012.
The Gross NPA ratio increased from 2.51% to 3.70%. The net NPA ratio
also increased from 1.38% to 1.93%. The provision for Non Performing
Assets (including floating provision and counter cyclical provisioning
buffer) stood at Rs 734 crores (P.Y Rs.396 crores). Provision Coverage
Ratio is at 65.22%. An action plan with measures including effective
use of SARFAESI Act, rehabilitation of viable units, and vigorous
follow-up of DRT cases have been put in place to reduce NPA levels.
3.18.2. Restructuring of Debts: The Bank continues to provide
Restructuring Packages within the framework of RBI guidelines to
deserving borrowers under the Rehabilitation Programme or under
packages approved by CDR / BIFR, subject to the viability of the units
being established. The Bank has extended the package to 19569 (15879*)
borrowal accounts with dues amounting to Rs 2671.23 (Rs 2417*) crores.
Towards diminution in their fair value on account of economic loss
caused in the process of restructuring, provision to an extent of Rs
90.95 (Rs 80*) crores has been made by the Bank.
*Indicates last year's figure
3.19.Lead Bank Scheme
3.19.1. The Bank has been discharging Lead Bank responsibilities in
three districts viz., Mysore,Tumkur and Chamarajanagar, The Annual
Credit Plan for 2012-2013 has been launched. The combined annual credit
plan target for 2012-2013 for all banks in the three districts has gone
up to Rs 6513.17 crores, from Rs 5014.28 crores last year showing a
growth of Rs 1498.89 crores (29.89% growth).
3.19.2. In order to impart entrepreneurial skill and guidance to
Unemployed Youth, in general and rural youth in particular to enable
them to become gainfully self employed, the bank has established
Training Centers viz.,Mybank Institute for Promotion of Self Employment
and Development (MIPSED) at Hirehally Industrial Estate, Tumkur. A
similar institute called "JSS RUDSET" is established at Mariyala,
Chamarajanagar Taluk, in association with JSS Mahavidyapeetha. Both the
institutes are being managed by personnel on deputation from the Bank.
During the year, both the centers have conducted 104 programs, wherein
4269 trainees were given training.
3.20.Financial Inclusion
3.20.1 In terms of Reserve Bank of India directives, the Bank's Board
has approved the Disaggregated Financial Inclusion plan to implement
Financial Inclusion plan covering 254 villages in Karnataka and 6
villages in Tamil Nadu with population above 2000 (as per census 2001)
and the same has been submitted to RPCD, Reserve Bank of India.
3.20.2. Further the Bank has shouldered the responsibility of
implementing the smart card based EBT Scheme in Chamarajanagar District
covering all the villages in the District and the SSP scheme will be
fully operational shortly.
3.20.3. Apart from this the Bank is participating in EBT program in
Bellary and Chitradurga Districts through the allotted service area
villages.
3.20.4. The Bank has covered all the 254 villages with populations
above 2000 in Karnataka and 6 villages in Tamil Nadu by appointing
Business Correspondents for providing minimum banking facilities to the
rural populace at their doorstep.
3.20.5. Further the Bank has established 3 Financial Literacy and
Credit Counseling Centers in 3 Lead District of the Bank to impart
knowledge of banking and to inculcate saving habits and the repayment
responsibility of loans availed among the rural populace.
3.21 .Self Help Group (SHG) Lending
The Bank has credit linked 10355 groups with an advance amount of Rs
492.88 crores, during the current year, taking the cumulative total of
such credit linkage programme to 143313 groups with a financial outlay
of Rs 1692.66 crores upto 31st March 2012. These efforts of the Bank
have been recognized and the Bank has been awarded the Best Performance
Award instituted by NABARD under the Commercial Banks Category for its
overall performance under SHG Bank Linkage Programme for the year 2010-
11. The Bank has been the winner of either the 1st or the 2nd prize
award since March 2000 continuously.
3.22.Regional Rural Banks (RRB)
3.22.1 .Cauvery Kalpatharu Grameena Bank, the RRB sponsored by the Bank
is having its Head Office at Mysore, and covers 7 districts viz.,
Mysore,Hassan, Chamarajanagar, Tumkur, Bangalore Urban, Bangalaore
Rural and Ramanagara. The Bank has a net work of 230 branches, with the
opening of fifteen new branches. All the 230 branches have been
functioning under CBS. The total deposits and advances of the RRB, as
on 31st March 2012, stood at Rs 2604 crores and Rs 2042 crores,
respectively (provisional). The RRB has been the winner of the Best
Bank Award instituted by NABARD under RRB category for its overall
performance under SHG Bank Linkage program for the past six years
continuously from March 2006 to March 2011.
4. HUMAN RESOURCES
4.1. Manpower Profile
4.1.1 Staff Strength: The total strength of the Bank as at the end of
March 2012 stood as 10249 as against 9926 as at the end of March 2011.
The staff strength comprised of 3187 officers, 4914 clerical staff and
2148 subordinate staff. Of these, 814 are Ex- defence personnel, 161
belong to physically handicapped category and 599 belong to Minority
community.
4.1.2. Women's Representation:
As at the end of March 2012, there were 2821 Women employees
(comprising of 382 Officers and 2439 Other Employees) in the Bank
compared to 2514 as at the end of March 2011 (Comprising of 358
Officers and 2156 Other Employees). The share of women employees rose
from 25.32% as at 31.03.2011 to 27.52% as at 31.03.2012.
4.1.3. Scheduled Castes/Scheduled Tribes - Representation: As at the
end of March 2012, there were 1983 Scheduled Castes employees
comprising of 588 Officers, 764 Clerical Staff and 631 Subordinate
staff. There were 628 Scheduled Tribe employees comprising of 250
Officers, 239 Clerical staff and 139 Subordinate staff as at the end of
March 2012. All the guidelines of the Government of India for
safeguarding the interests of SC/ST employees have been complied with.
4.1.4. Human Resources Management Solutions (HRMS): Bank has
implemented Human Resource Management Solutions (HRMS) to handle all HR
activities in a phased manner. Mechanization of HR activities has
resulted in substantial reduction of man power for HR activities and
also helped in uniform HR policy across the Bank.
4.2.Training 4.2.1.Training Activities and Coverage:
To make progress in this competitive environment, it is imperative for
the Bank to hone the skills of its employees by imparting training to
improve their knowledge as well as soft skills. Further, it is
necessary to establish a high-performance work culture, both in the
operational and administrative areas. Towards this end, Bank's learning
centres at Bangalore and Mysore are conducting training programmes on
various topics viz., credit appraisal (both basic and advanced),
communication skills, marketing, Behavioural Science, Personal Segment
& MSME product awareness etc. Several programmes, aimed at keeping the
employees updated on the latest technology developments like internet
banking, mobile banking and other alternate delivery channels were also
conducted. All the programmes are designed, keeping the customer- needs
in mind. Bank has a focused approach to training and intends to subject
each employee to one or two trainings within a span of 2 years.
4.2.2 Our Learning Centers at Bangalore and Mysore have conducted 181
training / workshops. During the year, a total of 5250 members of staff
got trained at our Learning Centers. Based on the job-role being
played by the officers, bank is regularly deputing them for training to
Apex training institutes of SBI and others like NIBM, IIBF, RBI's
College of Agri. Banking etc. to update their knowledge with latest
developments in the area of Banking. During the year 608 officials
were deputed to the Apex Training Institutes of SBI and other premier
training institutions. Bank also conducted an exclusive work-shop for
the Regional Heads of the Bank with the assistance of faculty from
State Bank Staff College, Hyderabad. Training schedules were drawn up
for imparting training to the Probationary Officers and newly recruited
clerical staff and both were carried out smoothly.
4.2.3.Pre-examination and Pre- promotional training:
Pre-examination trainings for candidates belonging to SC / ST /
Minority communities and appearing for Probationary Officers / Clerical
recruitment examination for selection to Associate Banks of SBI were
conducted during the year at the Learning Centers, Bangalore & Mysore.
Faculty guided the participants in their preparation for the written
examination and also provided them with the reading material.
Pre-Promotion training programmes for SC/ST/Minority Community
employees were also conducted at the Learning Center, Bangalore during
the year. These trained candidates appeared for written examination for
promotions from subordinate cadre to clerical cadre, from clerical
cadre to officers' cadre and within officers' cadre, from JMGS I to
MMGS II.
4.2.4.Training to CKGB Staff :
Our Mysore Learning Centre had conducted training programmes for
officers & staff of Cauvery Kalapatru Grameen Bank (sponsored by SBM).
In the current year 9 training programmes for CKGB employees were
conducted covering 236 employees.
4.2.5.The Center also imparted pre- recruitment training to candidates
belonging to SC/ST/Minority/ Ex- Servicemen who applied for officers'
posts and Office Assistant posts in CKGB.
4.2.6.Training to retiring officers/staff:
To enable our retiring officers & staff to lead a happy, healthy and
peaceful retired life, our Learning Centre, Mysore conducted 7 special
training programmes for retiring employees, with inputs on financial
planning, health tips, yoga and relaxation techniques, during the year
2011-12 covering 246 employees.
5. INDUSTRIAL RELATION
5.1. Terminal Benefits to Retired : Staff: The Bank gives due
importance to the settlement of terminal benefits well in time to the
Staff on their ' termination from service of the Bank f either on
superannuation or on other grounds. During the current year 2011 - 2012
as many as 438 staff members retired from the services of the Bank.
Pension and Commutation benefits wherever applicable have also
been settled on top priority.
5.2. Defined Contributory Benefit Scheme:
Employees joining the services of the r Bank after 01st April, 2010
are eligible under the Defined Contributory Pension Scheme - which will
be governed by the provisions of New Pension Scheme introduced for
employees of Central Government with effect from 01.01.2004 and as
modified from time to time. As at the end of March, 2012 as many as
1156 are covered under "Defined Contributory Benefit Scheme".
5.3. Staff Welfare Activities:
The major welfare measures extended f to the members of the staff
include Holiday Homes, Group Insurance Cover, Scholarship Scheme,
Farewell Scheme for the retiring employees, Financial Assistance to the
employees with physically handicapped/ mentally challenged children,
Medical ' Expenses Reimbursement Scheme etc,. During the year, Mysore
and Goa Holiday Homes were shifted to new hotels.
5.4. The Banks relationship with its employees remained harmonious and
cordial through out the year.
6. SUPPORT FUNCTIONS
6.1. Technology Up-gradation
6.1.1. Automated Teller Machines: Our customers can now transact
through 802 of our ATMs and the daily average hits at these ATMs during
the year were 218. Our Bank has earned a record net income per ATM and
we stand first among the State Bank Group Banks in this respect. The
Point-of-Sale transactions have registered a consistent growth and with
a view to further increase the POS usage and e- commerce transactions,
a new Card strategy has been formulated and introduced in our Bank.
Accordingly, new 16 digit Debit Cards with Card Verification Value
(CVV) have been rolled out.
6.1.2 Internet Banking:
www.onlinesbm.com, the Internet Banking portal of our Bank, facilitates
instant, convenient, secure and safe Banking Solutions, for both
Corporate and Personal Banking customers alike. Apart from regular
e-Banking functionalities, the Bank Customer can transfer funds through
RTGS/NEFT/ SBGRPT, pay direct & indirect taxes, book train tickets
online, make utility bill payments, etc. A simplified version of the
Corporate Internet Banking, SARAL, was introduced during September 2011
for the use of micro enterprises with single entrepreneur and small
business enterprises managed by individuals. The Bank has seen a 38.52%
growth in Internet Banking registrations with 1,68,379 customers, of
which 16,585 are Corporate Customers.
6.1.3. Mobile Banking Service: State Bank Freedom is a simple,
convenient, secure, anywhere and anytime banking service offered by the
Bank since 2009. Some of the functionalities available through this
Mobile Banking service include enquiry, funds transfer, cheque book
requests, bill payments, mobile top-ups, etc. The total number and
volume of Mobile Banking transactions during the year 2011-2012
increased by 52.17% and 206.55% respectively.
6.1.4. Interbank Mobile Payment Service (IMPS) : The functionality of
Interbank Mobile Payment Service (IMPS) through Mobile Banking has been
made live during March 2012. This service enables better and faster
transfer of funds by the customers using the mobile number of the
recipient instead of the account number. Funds can be remitted by a
registered user of our Bank's Mobile Banking Service to a beneficiary
holding a 7 digit MMID (Mobile Money Identifier). The transfer is
routed through National Payment Corporation of India (NPCI).
6.1.5. Electronic Payment System:
Seamless and secure remittance of funds between accounts maintained at
different Banks / Branches are enabled through RTGS (Real Time Gross
Settlement) and NEFT (National Electronic Funds Transfer). Interbank
Electronic Funds transfer amongst the State Bank Group is available
through SBGRPT (State Bank Group Payment Transactions). The Bank has
recorded 67.27% growth in NEFT Inward transactions and about 50% growth
in SBGRPT transactions during the year ending 31st March 2012.
Cheque Truncation System: CTS
(Cheque Truncation System) is basically an online image-based cheque
clearing system where cheque images and Magnetic Ink Character
Recognition (MICR) data are captured at the collecting Bank branch and
transmitted electronically. Introduced by Reserve Bank of India, the
objective of CTS is faster clearing of cheques through truncation or
stopping of physical movement of cheques. CTS has currently been
successfully rolled out in Chennai & Delhi, and has effectively
benefited all our customers in these centres. Coimbatore and Bangalore
Centres will implement CTS shortly.
6.1.6. Bank's Website:
The Bank's website, http:// www.statebankofmysore.co.in, available in
English, Hindi and Kannada, hosts a variety of information on our
Products & Services, our Branches & ATMs, Interest Rates, Technology
Initiatives including e- Banking & Mobile Banking , NRI/Forex Services,
Bank's Profile & Financials, various application form downloads, etc.
For the benefit of the visually challenged, an official text version of
the web site has also been hosted. The home page also provides a link
to Grievance Redressal Mechanism which includes feedback and
complaints. The Bank's website also facilitates online requests for
Home Loans, Car Loans, Education Loans and SME Loans. Customers can now
check their eligibility before submitting their application and can
also track the status of their loan application through the site.
6.1.7 Green Initiatives: As part of the Green Initiative, the Bank is
moving towards less paper banking in all its administrative offices and
branches.
* The Bank's intra-net web site 'SBM Nest' has been put to effective
use for minimizing paper usage. SBM Nest is deployed as a channel for
routing all circular letters, instructions and inter- office
communications.
6.1.8. Green Channel Counter (GCC):
Is an innovative step towards migrating from the traditional paper
based banking in a limited way to card based 'Green Banking' focusing
on reduction in paper usage as well as saving transaction time.
Transaction Posting Device (TPD), a machine used for this purpose, is
very similar to the POS (Point of Sale) machines used at merchant
establishments for card transactions. The initiative has been
successfully launched in our Bank in some of the Bangalore City
Branches on pilot basis. Cash deposit, withdrawal and intra-bank funds
transfer up to Rs 40,000/- can be made using the ATM cum Debit Card at
Green Channel Counters (GCC).
6.2. Business Continuity Planning
6.2.1. In the backdrop of growing complexity of financial products and
the increased leveraging of technology, operational risks have assumed
critical importance in recent times. The treatment of operational risk
as a distinct risk category along with credit and market risks in the
Basel II framework is a manifestation of the significance of
operational risk in impacting the risk profile of a Bank. Keeping this
in mind our Bank has:-
- Adopted well defined IT Policy and IS Security Policy which is
being periodically reviewed and updated.
- Become a part of well established (common for State Bank Group)
state-of-the art IT infrastructure which is certified as BS 25999-
2:2007 by BSI.
6.2.2. Our Bank has taken proactive measures to respond to business
discontinuities and ensure uninterrupted availability of all key
business resources that support critical banking functions. In this
connection the Bank has adopted a well defined Business Continuity Plan
and Disaster Recovery Plan Policy. Our Bank is part of a well
established high- end Business continuity and Disaster Recovery
infrastructure which ensures seamless continuity in case of need. The
Disaster Recovery drill is being conducted on a half-yearly basis
during which the transactions of our branches are routed through the DR
site. In addition to this, the Bank has a nearby site to ensure zero
data loss in the event of a disaster. The Bank has implemented Business
Continuity Plan in all the branches and also in the administrative
offices together with periodic reviews and updates.
6.3. Management Information System (MIS):
6.3.1.The MIS Department consolidates and maintains the Credit
Information System (CIS) database apart from collating information from
branches and Head Office Departments for submission of various
statements to Reserve Bank of India like submission of Basic
Statistical returns, Sectoral Deployment of Funds etc,.
6.3.2. The scope of CIS has also been extended to submission of data
relating to Credit Information Bureau (India) Limited (CIBIL) and other
credit information companies (CICs).
6.3.3. The Department has developed a webpage in the SBMNEST,
providing useful information to the controlling offices and the
branches. The Department has also developed the software/ formats of
Balance Sheet, Profit and Loss Account, MOC etc,, and has hosted the
same in the SBMNEST for use by the branches.
7. SYSTEMS AND PROCEDURES
7.1. Systems and Procedure Department is a special resource available
at Head Office for effective management of work organization concerning
Bank's Systems and Procedures. The department regularly reviews the
systems and procedures in line with the technological developments in
the areas of Core Banking and the alternate delivery channels.
The department has, in the year under report, introduced Inter Office
Instrument in all branches/SBI and other Associate Banks in lieu of
Demand Draft and Banker's Cheque payable in any branches of the Bank/
SBI and Associate Banks. The department has introduced Universal Pass
Book for both deposits and advances accounts. The department has
promoted Government of India Green Initiative Policy by effecting
payments to vendors/contractors through NEFT/RTGS.
7.2. The department also reviewed the service charges structure with
regard to locker, multicity cheques transactions, non-maintenance of
any time quarterly balance in SB accounts of P segment customers etc.
The department has also updated directory of offices and designed
monthly visit report of single officer branch/fence sitting branches.
8. CONTROL AND SUPERVISION
8.1. Risk Management:
8.1.1 The Bank has achieved substantial progress in the implementation
of risk management systems, envisaged in RBI guidelines. An Integrated
Risk Management approach is followed, with a well- designed
organizational structure consisting of committees, viz. Risk Management
Committee of the Board (RMCB) at the Board level, Asset Liability
Management Committee (ALCO), Credit Risk Management Committee (CRMC),
Market Risk Management Committee (MRMC) and Operational Risk Management
Committee (ORMC). These committees meet at periodic intervals to
oversee the functions of Risk Management and Asset Liability
Management.
8.1.2 With regard to Credit Risk, a Credit Risk Mitigation and
Collateral Management Policy is in place. Bank has a comprehensive Loan
Policy document in place which addresses Credit Risk Management and is
reviewed and revised periodically.
8.1.3 Credit Risk Assessment System (CRAS) which is in the Bank has
separate models designed for trading and non-trading/service sectors.
While limit aggregating to Rs 5.00 crores and above will warrant
borrower as well as facility ratings, limits from Rs 25.00 lacs and
upto Rs 5.00 crores will carry only borrower rating.
8.1.4. With a view to controlling the risk relating to exposure on
domestic and foreign counterparty banks, detailed guidelines are laid
down and bank- wise exposure limits have been fixed and allocated among
the various user/ departments/branches. The exposures taken at the
branches/departments are being monitored at periodic intervals.
8.1.5. For managing risks arising out of adverse movement in market
interest rates, currency exchange rates, equity prices and commodity
prices, the Market Risk Management Policy has been framed. A Back
Testing Policy envisaging testing of market risk measurement models is
also included in this policy.
8.1.6. Operational Risk Management Policy duly approved by the Board
is put in place. Monitoring through the process of audit has been
tightened. As part of Risk Based Supervision, the Bank has introduced
Risk Focused Internal Audit (RFIA) as the exclusive form of audit
effective from 1st Aug 2003. The Audit Report Format (ARF) has been
suitably modified and adopted. A Fraud Risk Management Policy covering
identification and control, accountability, reporting and follow up
measures has also been formulated for effective control over incidence
of fraud.
8.1.7. The Bank has put in place a policy on Disclosures as required
by RBI under Pillar-3 of Basel-II and necessary disclosures are being
made periodically as stipulated.
8.1.8. Reserve Bank of India has issued final guidelines for migration
to Advanced Approaches for computation of Capital charge for Credit
Risk, as per Basel II guidelines, on 22.12.2011.
8.1.9. Having complied with the requirements of the basic approaches
in credit risk, market risk and operational risk for computation of
capital adequacy, the bank is preparing for migration to advanced
approaches viz. Internal Rating Based Approach in credit risk, Internal
Models Approach in market risk and Advanced Measurement Approach in
operational risk for computation of capital. With the proposed
migration, Bank's risk management systems would be further
strengthened.
8.1.10. To facilitate smooth migration to Advanced Approaches,
individual committees are in place for Credit Risk, Market Risk and
Operational Risk to interact with the Consultants and to oversee the
execution of the required tasks in time.
9. BUSINESS PROCESS RE- ENGINEERING (BPR)
9.1. The Bank has rolled out various BPR initiatives since 2004, in
consonance with the design principles provided by the Corporate Centre.
The BPR initiatives leverage technology to significantly enhance
customers' satisfaction and convenience. BPR initiatives rolled out
over the years have stabilized and started yielding desired results. So
far 19 BPR initiatives have been rolled out.
9.2. Based on the feedback received from the branches and the
initiatives, some changes in the processes have been brought out to
improve efficiency.
9.3. Our Centralized Clearing Processing Centres (CCPCs) at Bangalore.,
Mysore and Chennai undertake entire clearing work of all the linked
branches. All the branches at Mysore have been linked to CCPC Mysore
during the year. Service branch, Chennai and Bangalore were integrated
with CCPC, Chennai and Bangalore respectively during the year.
9.4. Cheque Truncation System has been implemented during the year at
Chennai and is working successfully. The process of implementing the
Cheque Truncation System at Bangalore is in progress and it will be
extended to other centers in a phased manner as the Reserve Bank of
India will direct from time to time.
9.5. 33 new branches have been opened at Bangalore, Mysore Zone, Hubli
Zone, Chennai Zone, and Delhi Region as per BPR design principles. 59
branches have been redesigned during renovation/shifting to new
premises as per BPR design principles at Bangalore, Mysore, Chennai,
Hyderabad, Mumbai, Delhi and Kolkata.
9.6. Mid Corporate Central processing Centre (MCCPC)
9.6.1. As part of the Bank's BPR initiative, a Mid Corporate Central
Processing Centre (MCCPC) was set up during February 2010 in our Bank
for Bangalore centre, with a view to pool specialized credit skills, to
standardize the credit processes, to improve the quality of assets and
to provide speedy credit delivery and reduction in turn around time
(TAT).
9.6.2. Initially 25 branches of Bangalore Zone I which were having
Medium Enterprises (ME) and mid-corporate accounts were linked to
MCCPC. During FY 2011-12 a further 10 branches of Bangalore Zone II
have been added. Currently there are 67 mid-corporate accounts with
aggregate sanctioned limit of X 1243.38 crores and outstanding of t
1,125.16 crores as on 31.3.2012.
9.6.3. MCCPC is engaged in the credit appraisal, sanction, supervision
and follow-up of corporate and mid- corporate advance accounts of
Bangalore. MCCPC is extending support to branches in the adjoining
district of Tumkur in the above matters.
10. ASSET LIABILITY MANAGEMENT
10.1. The Asset Liability Management System has been functioning as
per the guidelines prescribed by RBI. The Asset Liability Management
Committee (ALCO) of the Bank is entrusted with the task of managing
Liquidity and Interest rate risk. The Committee meets regularly to
monitor the risks and Net Interest Margin (NIM) on an ongoing basis.
The tolerance limits for liquidity mismatches and interest rate risks
are fixed in accordance with RBI guidelines and Bank's ALM Policy and
these are reviewed by ALCO at regular intervals. Various interest rate
revisions including the revision of BPLR/Base Rate are thoroughly
discussed and decided by ALCO duly considering all the relevant
factors. Possible mismatches in the Structural Liquidity projections of
the Bank are also discussed with regard to long term asset exposures
and appropriate decisions are taken.
11. AUDIT AND INSPECTION
11.1 Audit
11.1.1. As against a target of 545 branches/ BPR entities envisaged in
the annual audit plan, 586 branches / BPR entities were subjected to
Internal Audit and IS Audit during the year under reference. That
apart, 17 newly opened branches were subjected to Spot Audit, 7 Head
Office Departments and 2 Staff Training Centres were also subjected to
Internal Audit.
11.1.2. 73 branches (Scale IV & above) were subjected to Expenditure
Audit during the year. 423 branches selected, with advance levels of
more than Rs10.00 Crores and income leakage of Rs 1.00 lakhs & above were
subjected to Special Revenue Audit to ensure that there is no income
leakage (as against 388 branches during previous year).
11.1.3. 140 branches/offices covering 55.66% of deposits and 72.59% of
advances and 7 Head Office Departments were subjected to concurrent
audit for bringing improvement in functioning, compliance with the laid
down systems and procedures. The findings enumerated in these audit
reports are appraised to the Audit Committee of the Board and follow-up
actions are ensured.
11.1.4. Structured meetings were held at quarterly intervals at Zonal
Centres and half-yearly intervals at Regions headed by Deputy General
Managers during 2011-12, to follow up pending compliances and bring
about qualitative improvement in compliances at all levels. Workshops
were conducted at various centres (Bangalore, Hyderabad, Chennai,
Mumbai, Mysore & Delhi covering all the Modules) during 2011-12 for
concurrent auditors to update their knowledge and skills. Also, two
training programmes were conducted for RFIA (Risk Focussed Internal
Audit) auditors during 2011-12
11.2. Credit Audit
The audit of loan appraisal and amount management for high value credit
accounts with the aim of improving the asset quality of the Bank is
undertaken by the Credit Audit Department. Accounts with total
exposure of Rs 2 crore and above are covered under Credit Audit. During
the financial year 1135 loan accounts in 173 branches were covered
under Credit Audit. Out of 1135 accounts 1019 accounts (90%) were rated
as Low and Very Low Risk accounts.
11.3. Vigilance
11.3.1. Vigilance administration as an important aspect of management
function is carried out as per the directives of the Central Vigilance
Commission so as to achieve good Corporate Governance for the overall
growth of the bank.
11.3.2. To create better preventive vigilance awareness and to prevent
incidence of frauds, various preventive vigilance activities like
surprise visit to branches, formation of preventive vigilance
committees at all major branches and BPR entities, sessions in the
staff training centers, surprise verification of cash etc., are being
undertaken by the Vigilance Department.
11.3.3. The Fraud Monitoring and Investigation Cell (FMIC) under the
Vigilance Department monitors certain critical areas of branch
functioning on regular basis as part of surveillance responsibilities.
Besides, to speed up and monitor disciplinary proceedings, the Chief
Managers, General Banking/ Administration at the Zonal/Regional Office
level are designated as Zonal Vigilance Officers as an extension of the
Vigilance structure at Head Office.
11.3.4. The officers from Vigilance Department conducted surprise
inspections of 53 offices/branches during the year under report. The
main areas of scrutiny are adherence to systems and procedures,
rotation of staff and deficiencies in fraud-prone areas. The deviations
and other irregularities are brought to the notice of the
Module/Regional Heads for taking corrective actions. Vigilance
Department is bringing out a Quarterly House Magazine, which contains
vital information on vigilance related matters useful to the operating
staff.
11.3.5. In accordance with the guidelines of the Central Vigilance
Commission, the 'Vigilance Awareness Week' was observed at all the
offices of the Bank from 31st October 2011 to 5th November 2011. The
focus of observing the Vigilance Awareness Week was oriented towards
evolving and effectively implementing preventive techniques in
vigilance administration, which includes transparency, accountability
and fair play, objectivity and timely response in dealing with matters
relating to public administration. Besides, the role of leveraging of
technology in respect of all systems and processes for deliverance of
services, which has to be synchronized through use of technology was
strongly emphasized.
11.3.6. The Vigilance Department is maintaining liaison with outside
agencies like the Central Vigilance Commission and Central Bureau of
Investigation and also effectively coordinating with various
departments within the bank so that vigilance cases are disposed of
speedily.
11.3.7. As per the directions of Government of India, a Vigilance set
up has been established in Cauvery Kalpatharu Grameena Bank sponsored
by the bank and the Chief Vigilance Officer of the bank is overseeing
the vigilance administration in that Bank.
12. OTHER ASPECTS
12.1. Customer Service
12.1.1. The Bank continues to accord highest priority to Customer
Service. The Bank is a member of Banking Code and Standards Board of
India (BCSBI) and is committed to provide service of a high order in a
transparent manner. Bank has adopted the BCSBI Code of Commitment to
Customers and placed the same in the Bank's website. The Policy
guidelines relating to Collection of Cheques, Grievance Redressal
Mechanism and Compensation were placed on the Bank's website for the
use of the customers.
12.1.2. Right to Information
The Right to Information Act 2005 - The required authority structure
for implementation of the Act has been put in place for prompt disposal
of RTI requests for Information within the time frame period as
prescribed under the Act. The Bank's website also carries all the
relevant information on the implementation of the Act.
12.2. Productivity
Business per employee increased from Rs 7.95 crores as at the end of
March 2011 to Rs 8.81 crores as at the end of March 2012. The Business
per branch increased from Rs 109.86 crores in March 2011 to t 124.27
crores in March 2012.
12.3. Public Relations
12.3.1.Effective publicity of the Bank's schemes and services was
carried out through the medium of captivating hoardings at important
vantage points, advertisements in print and electronic media, glow sign
displays at railway and bus stations in important cities/ towns and
advertisements on modern bus shelters and police kiosks.
12.3.2. Special media campaigns covering the various loan schemes,
special offer in housing, vehicle, gold loans, MSE loans under CGTMSE
scheme, other retail loans and new deposit schemes like My Bank
Suraksha Savings Bank, Savings Bank Plus and Term Deposit account were
carried out in the print and electronic media and through hoardings.
12.3.3. The Bank has sponsored various State level seminars, District
ustavas, Fruit and Flower show at various districts/taluks, musical,
cultural and sporting events. Besides the Bank also sponsored Mysore
Dasara festivitites-2011 in a big way, India Finance Conference -2011
organized by Indian Institute of Management and a Bus Shelter and
drinking water facility at World Heritage site, Hampi, The Bank
extended financial aid to Sankalpa a unique theatre festival enacted by
prison inmates and supported the 12th Convocation organized by
Karnataka State Open University etc. These activities have resulted in
good publicity besides further enhancing the bank's image.
12.3.4. Bank's performance highlights, launching of new products and
services, opening of branches, ATMs, BPR initiatives and technological
achievements were extensively covered in print and electronic media.
12.4. Organizational Development
12.4.1. Branch Expansion: The Bank has opened 33 new branches during
the year 2011-12. With this, the Bank's network of branches stands at
737 spread over 15 states. As at the end of March,2012, the branch
network comprised of 197 Metro, 156 Urban, 159 semi- urban and 225
rural branches.
12.4.2. Branches in Minority Concentrated Districts- Centers (MCDs)/
Under Banked Districts: During the year, the Bank has opened 2 branches
and 4 branches in Minority Concentrated Districts/Centers and
Under-Banked Districts respectively. As on 31st March 2012, out of 737
branches, the Bank has 70 branches in MCDs constituting 9.50% of the
branch network and 83 branches in Under- banked Districts constituting
10.85% of the branch network.
12.5. Implementation of Official Language Policy:
12.5.1. In pursuance of constitutional provisions, Bank is making all
efforts for the propagation of the Official Language, Hindi, and its
progressive use in day-to-day official work. Bank is progressively
improving the usage of Hindi and the Regional Language to serve
customers to their satisfaction bringing transparency in
administration.
12.5.2. To ensure the usage of Hindi in official correspondence,
routine forms used on computers were identified and converted in
bilingual/trilingual form and were made available to the staff members,
providing Script Magic Hindi Software in our CBS and Unicode Mangal
fonts for word processing. Our Bank's website is made available in
Hindi and Kannada also and being updated simultaneously. Operating
option of Hindi & Regional Language is provided in all the ATMs of our
Bank.
12.5.3. Apart from publishing Hindi Articles in the House Magazine
"Sambrama", a separate Quarterly Hindi Magazine "Mybank Bhashadarshini"
is being published for enriching the Hindi knowledge of our staff.
Hindi version of Fire and Pension Manuals were issued during the year
under review besides publishing Bank address book in bilingual form.
12.5.4. 24 Functional/Computer Workshops/ On the Desk Training were
organized at different places and imparted functional knowledge of
Hindi to the 289 Staff Members and organized All India Official
Language Conference at Pondicherry inviting local dignitaries to create
favorable atmosphere for implementing Official Language Policy of
Government of India. Our efforts in this regard are appreciated by
various Town Official Language Committees.
12.5.5. Kannada being the Official Language of Karnataka , occupies
the place of prominence in the Bank, as more than 80% of our branches
are in Karnataka.
12.5.6. Account opening forms, pay in slips, withdrawal forms, DD and
pay order challans, all Agricultural and SHG loan applications and
other important forms are in Kannada / trilingual form. All our ATMs
display operational instructions in Kannada also. Correspondence with
the State Government and its departments is done in Kannada. Bank has
Kannada version for its website.
12.5.7. All press releases of the Bank, including quarterly and annual
financial results are being simultaneously published in Kannada.
Reports of community services and cultural programmes at Branches are
published in Kannada in the Bank's house magazines "Sambhrama" and
"Mybank Bhasha Darshini".
12.5.8. Kannada Rajyotsava is celebrated every year at Head Office,
Zonal Offices and Regional Offices during the month of November.
Renowned Kannada writers and aged artists are felicitated on the
occasion.
12.5.9. Our Kannada Department conducts Kannada language classes for
the Probationary Officers who do not know Kannada.
12.6. Community Services Banking
12.6.1. As a committed and responsible Corporate Citizen, the Bank
effectively associated with various community development activities
pertaining to education, health, social, art, culture and sports. The
Bank has sponsored 130 programmes during the year with a financial
outgo of Rs 130.02 lakhs including contributions for purchase of utility
assets by various social and charitable institutions.
12.6.2.The other activities/ programmes include conduct of various
health camps like eye camp, asthma camp, animal health check up camp,
general check up camp, conducting Tree Planting Programme, honoring
meritorious students in SSLC, sponsoring Taluk and District level
sports tournament, donating text books, utensils, blankets to
orphanages, supported the Care Earth Trust engaged in conserving
biodiversity, Sponsored prevention of cancer awareness programme and
SHG awareness programmes like health, girl child education programme
etc.
12.6.3. The Bank had, among others, made a donation to 'Ekal Vidyalaya
Movement for Elementary Education of Tribals' in Chamrajnagar and
Mysore District by adopting schools in 10 villages and an Ambulance to
SDS Tuberculosis Research Centre and Rajiv Gandhi Institute of Chest
Diseases. The Bank made a donation to Tumkur University to construct a
building for their Fine Arts College. It donated a Corpus Fund for
instituting a Chair at Visvesvaraya Technological University (VTU), and
to Mysore University for installing statues of Sir M.Visvesvaraya and
Nalwadi Krishnaraja Wadeyar.
13. CORPORATE GOVERNANCE
13.1. Statement of Bank's Philosophy on Corporate Governance
13.1.1 State Bank of Mysore, as an organization driven by values, is
committed to pursue objectives that are in the interests of the Bank,
shareholders and all stake holders and the society at large, in
consonance with best practices. The primary objectives of Corporate
Governance are:
- To protect the interests of the shareholders and all stakeholders
and to ensure that shareholder get the maximum benefit in the long run.
- To act in the best interests of all stakeholders like customers,
employees, government and the society.
- To ensure transparency, fairness, courtesy and dignity in all
transactions within and outside the Bank which form the hallmark of
good governance.
- To maximize operational efficiency in a well defined and
transparent manner and achieve excellence and benchmarks at all levels.
- As custodians of public thrift, ensure safety of funds and
investments.
- Focus on core competence areas, planned expansions and sustained
growth.
The Bank believes that Corporate Governance facilitates effective
management and better internal controls.
13.1.2.Compliance function is an integral part of corporate governance
along with internal control and risk management process. In view of
increasing complexities and sophistication in Banking business there is
a critical need for management of compliance risk arising out of
compliance failures.
13.1.3.The Compliance Department ensures that the guidelines of various
regulators like RBI, GOI, SBI, SEBI etc are complied with by the Bank
in its conduct of business.
13.1.4.During the year, the Department has conducted Compliance Audit
based on closed Branch Internal Audit Reports for 61 branches and
Compliance Credit Audit of 161 accounts, pointing out the omission and
commission committed, to the branches and the controllers for
rectification and sensitization.
13.1.5.KYC/AML Cell is a part of Compliance Department. The cell is
responsible for timely submission of Cash Transaction reports and
Counterfeit Currency Reports in addition to submission of Suspicious
Transaction Reports based on analysis of alerts.
The cell is responsible for the following:
- Framing and implementing Board approved policies on KYC/AML and
Combating Financing of Terrorism (CFT) measures.
- Analysis of transaction alerts for identifying transactions of
suspicious nature for reporting to the Financial Intelligence Unit-
India (FIU) and sharing of information as required under the law.
- Monitoring the process of risk categorization of accounts by
branches.
- Monitoring of KYC non-compliant Accounts (old/existing a/cs)
- Monitoring the implementation of provisions of 'Unlawful Activities
(Prevention Act 1967 (UAPA) on combating financing of terrorism.
- Issue of circulars regarding the list of individuals/entities
banned by United Nations received from RBI.
- Observance of KYC Compliance and Fraud Prevention day on 1st August
Every year.
- Detailed information on KYC guidelines and Anti Money Laundering
has been uploaded in the Bank's Website as a measure of customer
education.
- To sensitize and create awareness, the cell has brought out 5
issues of KYC- AML news letter.
- Job card on KYC/AML procedural guidelines put of on Bank's Internet
under tutorials menu, for the users.
13.1.6.The Compliance Department ensures submission of monthly and
quarterly DSB a
Mar 31, 2011
To the State Bank of India, Reserve Bank of India and the Central
Government, in terms of Section 43(1) of State Bank of India
(Subsidiary Banks) Act, 1959.
14. BOARD OF DIRECTORS 2010-11
14.1. Smt. Madhumita Sarkar Deb, Chief General Manager, Reserve Bank
of India, Central Office, Mumbai was nominated as RBI Nominee Director,
under section 25{1) (b) of SB) (Subsidiary Banks) Act 1959 with effect
from 3rd January 2011, in place of Smt.Ratna K.Makhija.
14.2. Shri S.A.Thimmiah, General Manager (A&S), SBI Corporate Centre,
tendered his resignation on 24th December 2010 consequent to his
transfer from SBI, Corporate Centre, Mumbai. In his place, Shri
B.Ramesh Babu, Deputy General Manager (A&S), Spi Corporate Centre, was
nominated as Director on the Board of the Bank representing SBI, under
Section 25(1) (c) of SBI (Subsidiary Banks) Act 1959, with effect from
25th December 2010.
14.3. Shri Milind S.Katti, was appointed as Workmen Director, with
effect from 31st August 2010 under section 25(1) (ca) of SBI
(Subsidiary Banks) Act 1959 consequent to the expiry of the term of
Shri S.R.Powar.
14.4. Shri Gururaja Rao was appointed as Non-workmen Director with
effect from 7th September 2010 under section 25(1) (cb) of SBI
(Subsidiary Banks) Act 1959 consequent upon the expiry of the term of
Shri D.S.Nagaraj.
14.5. The Board places on record its appreciation of the valuable
services rendered by Smt.Ratna K.Makhija, Shri SAThimmiah, Shri
S.R.Powar and Shri D.S.Nagaraj. The Board welcomes the new Directors.
15. AUDIT
M/S Gopala Iyer & Subramanian, Coimbatore, M/S Ramraj & Co., Bangalore,
M/S Grover, Lalla & Mehta, New Delhi, M/S K P Rao & Co, Bangalore and
M/S Bhasin Raghavan & Co., New Delhi have been appointed as the
Statutory Central Auditors of the Bank for the accounting period ended
31s March, 2011 by State Bank of India, with the approval of Reserve
Bank of India. 670 branches of the Bank were subjected to statutory
audit as against 660 branches audited last year.
16. ACKNOWLEDGEMENTS
The Board wishes to place on record its sincere appreciation of the
patronage and support of the customers, shareholders, members of staff,
Employees Union and Officers Association for their contribution to
the overall development of the Bank.
By the Order of the Board
DILIP MAVINKURVE
Managing Director
Mar 31, 2010
To the State Bank of India, Reserve Bank of India and the Central
Government, in terms of Section 43(1) of State Bank of India
(Subsidiary Banks) Act, 1959.
2.2 Key Performance Indicators
Sl.No. Key Indicators 2007-08 2008-09 2009-10
1. Net Profit (Rs. in Crores) 318.86 336.91 445.77
2. Return on Assets (%) 1.08 0.91 1.06
3. Return on Equity (%) 23.14 20.16 21.50
4. Expenses-Income Ratio (%) 52.08 50.43 43.60
5. Earnings per Share (in Rs.) 88.57 93.59 123.83
Face value of the Share was
Rs.100 as on 31.03.2008 and
Rs. 10/- from 31.03.2009.
Suitable adjustments in EPS
effected for the year 2007-08
6. Gross NPA to Gross Advances (%) 1.68 1.42 2.00
7. Net NPA to Net Advance (%) 0.42 0.50 1.02
2.3 Income
The Total Income of the Bank increased by 6.89% from Rs.3728 crores at
March, 2009 to Rs.3985 crores in March, 2010. Interest Income
increased from Rs.3247 crores to Rs.3559 crores (9.60%). The Average
Yield on Advances decreased from 10.68% in March, 2009 to 10.24% in
March, 2010, while Average Yield on Investments stood at 6.80% in the
same period. Non Interest Income decreased by Rs.55 crores (11.37%)
from Rs.480 crores to Rs.426 crores, mainty owing to reduction in
profit from sale of securities (This is caused partly by hardening of
yields on government securities and partly owing to our switching over
to investment in dividend bearing liquid mutual funds as against growth
oriented liquid mutual funds for deployment of short term surplus
funds). The ratio of Non-Interest Income to Total Income also therefore
stood at a lower level of 10.69% (12.88% last year). Efforts are being
made to improve this ratio, in the coming years.
2.4 Expenses
The Total Expenditure (before provisions and contingencies) decreased
by 0.88% from Rs.3074 crores in 2008-09 to Rs.3047 crores in 2009-10.
While Interest Expenses decreased by Rs.86.66 crores (3.60%) the
Operating Expenses increased by Rs.59.78 crores (8.99%) during the
current year. The Average Cost of Deposits decreased from 6.92% in
March, 2009 to 6.01% in March, 2010 due to soft interest rates
prevailing in the market during the year.
2.5 Profit
While the Operating Profit increased from Rs. 653.52 crores in 2008-09
to Rs.937.40 crores (43.44%) in 2009-10, the Net Profit increased from
Rs. 336.91 crores to Rs.445.77 crores (32.31%). Return on Assets (ROA)
increased from 0.91 % to 1.06% and the Return on Equity (ROE) increased
from 20.16 % to 21.50%.
2.6 Capital Adequacy Ratio
The Capital Adequacy Ratio under Basel II guidelines stands at 12.42%
as on 31st March 2010, against 12.99 % as on 31st March 2009. The Bank
had proposed raising equity Share Capital through a right issue, to
shore up Tier-I Capital and Capital Adequacy Ratio, and, had filed
Draft Offer Document with SEBI. Clearances in this regard, however, are
still awaited.
2.7 Dividend
Keeping in mind the need to strengthen Tier I capital of the Bank in
the current economic scenario, the Board of Directors has declared a
dividend of 100% for the year 2009-10. This will involve a pay-out of
Rs.41.98 crores including the tax component. The pay out ratio for
2009-10 was 8.08% as against 10.69% for 2008-09.
3. BUSINESS REVIEW
3.1 Deposits
3.1.1. The Total Deposits of the Bank grew by Rs.5965 crores to reach
the level of Rs. 38,880 crores and Average Total Deposits grew by Rs.
5,832 crores (20.04%) during the year 2009-10. The share of CASA
deposits to Total Deposits increased from 28.88% in March 2009 to
31.58% in March 2010. The Aggregate Deposits (total deposits excluding
inter bank deposits) of the Bank stood at Rs.38,437 crores as at the
end of March 2010, recording a growth of Rs.6,049 crores (18.68%).
Deposits under Personal Segment increased by Rs. 2,228 crores (14.80%)
to reach a level of Rs. 17,274 crores as on 31st March 2010. Term
Deposits and Savings Bank under personal segment stood at Rs. 11,140
crores and Rs. 5,738 crores forming a share of 64.49% and 33.21% of
the total personal segment deposits respectively.
3.2 Credit Expansion
3.2.1 While the Total Advances of the Bank increased from Rs. 25880
crores to Rs. 29874 crores registering a growth of Rs. 3994 crores
(15.43%) during the year, Net Advances (i.e. net of NPA
related/floating provisions, outstandings under staff festival advance
and Interest Not Collected Account) of the Bank increased from Rs.
25616 crores in March 2009 to Rs. 29536 crores. Credit Deposit Ratio
of the Bank decreased from 79.91% in March-2009 to 77.72% in March
2010, partly owing to general slowdown in the credit off take and
partly owing to reduction of low yielding advances. Average Total
Advances grew by Rs.3296 crores (14.17%) during the year.
3.2.2 The Head Office Credit Committee-I, (HOCC-I) with the Managing
Director as Chairman and Head Office Credit Committee II (HOCC-II) with
the Chief General Manager as Chairman, which have been set up in order
to make the credit process speedier and to take decisions through a
committee approach, held 89 and 57 meetings respectively and
facilitated growth in Non-food Advances. Zonal Office Credit Committees
are functioning at all the five Modules of the Bank and HOCC-III
examines proposals of DGM - headed branches.
3.3 Personal Segment Advances
3.3.1. Personal segment advances grew by 19.30 % to reach a level of
Rs.4758 crores. Housing loans grew by 18.73 % and reached a level of
Rs.2595 crores. Vehicle loans grew by 36.54 % to reach a level of
Rs.398 crores. Education loans grew by 25.42 % to reach a level of
Rs.491 crores and Mortgage loans grew by 24.08 % to reach a level of
Rs.239 crores.
3.3.2 To stimulate growth in Housing/ Car loan segment the bank has
introduced SBM Easy Home Loan, SBM Advantage Home Loan and SBM Ezee Car
loan scheme during the year. The scheme envisages fixed rate of
interest on the loans for the first 3 years and an option to the
borrower to have fixed or floating rate after 3 years. With a view to
targeting mid size and above car segments and also providing a suitable
scheme to the affluent customers, a new car loan scheme called SBM
Advantage Car loan scheme was introduced.
3.4 Priority Sector Lending and Social Banking
The total credit provided to the Priority Sector for the year ended
March 2010 stood at Rs.9314.22 crores constituting 35.99% of Adjusted
Net Bank Credit (ANBC) of Rs.25,881 crores as against the Bench mark of
40%. In order to achieve the desired bench mark, the following action
has been drawn up for the year 2010-11.
a) Renewed efforts will be made to cover all farmers in the villages
financed by our Branches under Kisan Credit Cards
b) A target of Rs.770 crores has been taken for financing of Micro and
Small Industrial units both towards Manufacturing and Service Sectors.
Efforts will be made to cover loans under CGTMSE wherever industrial
units are not able to offer the required Security to Bank.
3.5 Agricultural Finance
3.5.1 The agricultural advances of the Bank increased from Rs.3,839
crores to Rs.4,123 crores as at the end of March 2010, registering a
growth of Rs.284 crores (7.40%). This constitutes 15.36% of the
Adjusted Net Bank Credit (ANBC).
3.5.2 During the year 2009-10, Bank implemented new loan schemes to
assist farmers viz., Tractor Naveekarana (for renovation/repairs to
tractors), Comprehensive relief measures to persons affected by natural
calamities and Organic Coffee Scheme. An OTS within OTS Scheme to
assist farmers and to enable them to avail benefit under the extended
Debt Relief Scheme of ihe Government of India is currently in force.
3.6 Micro and Small Enterprises (MSE) Lending
3.6.1 Government of India, Ministry of MSME has conferred to our Bank
"National Award for Excellence in MSE Lending" and "National Award for
Excellence in lending to Micro Enterprises" (amongst Associate Banks)
for the year 2008-09. This special award is conferred to us in
recognition of our creditable performance in lending to MSE sector and
Micro Enterprises.
3.6.2 Micro and Small Enterprises (Manufacturing)
The Banks advances to Micro and Small Enterprises (Manufacturing)
sector has increased from Rs. 1290.26 crores in March 2009 to
Rs.1476.08 crores as at the end of March 2010 registering a growth of
14.40% . The impact of the economic slowdown had its effects during
this year also. The Bank has extended all the initiatives of the
Government of India and Reserve Bank of India to the MSE sector this
year also to help them to tide over the problems.
3.6.3 The prominent steps taken are:
à Reduction in the rate of interest on working capital limits.
à Sanction of additional credit limits of 20% of the fund based working
capital limits.
à Relaxing the norms for carry inventory and receivables to support the
elongated working capital cycle.
à Reduction in the margin requirements for issuing Letters of Credit
and Bank Guarantees.
à Rescheduling the installments of term loans wherever felt necessary.
à Extending term loans for purchase of gensets, machineries, tools at a
concessional rate of interest @ 9% p.a. for the first year.
à Setting of MSE Care Centers at all Zonal/Controlling Offices to
address the grievances of the entrepreneurs.
3.6.4 While continuing all the existing products and schemes introduced
to take care of the varying financial needs of the sector, the* Bank
has also introduced following schemes to extend finance at a
concessionary rate of interest to all the new accounts for a period of
one year.
à SME Help
à SME Care
à Micro Sector Collateral Free Loan upto Rs.5.00 lacs (this facility is
continued on an ongoing basis).
3.6.5 Micro and Small Enterprises (Services):
Banks lending to this sector increased from Rs.958.38 crores as at the
end of March 2009 to Rs.999.83 crores as at the end of March 2010
registering a growth of 4.33%. Bank has several schemes to cater to the
needs of Small Business Customers. Important among the schemes are as
under:
à Laghu Udyami Credit Card (LUCC) Scheme
à My Bank Professional Plus
à Small Retail Trades
à Small Road Transport Operators
à REMOT (upgradation of Coir Industry)
à Contractors Plus
3.7 Credit Guarantee Scheme
The Bank continued to extend Collateral Free financial assistance to
MSE sector by participating in Credit Guarantee Scheme of CGTMSE. The
coverage under the scheme is 1555 accounts amounting to Rs.99.60
crores.
3.8 Assistance to Weaker Sections of the Society
The Bank continued to extend financial assistance to Weaker Sections of
the Society comprising of small & marginal farmers with land holdings
of 5 acres or less, landless labourers, tenant farmers etc., village &
cottage industries whose individual limits does not exceed Rs.50,000/-,
SJSRY, SGSY, SLRS, DRI, Self-Help Groups and advances to SC/ ST
beneficiaries. The outstanding amount under lending to Weaker Sections
at Rs.2593.27 crores as at the end of March 2010 constitutes 10.02.% as
against stipulated benchmark of 10% of ANBC .
3.9 Assistance to Women Entrepreneurs
A booklet on "Charter for Women" containing the details of concessions
available to women has been supplied to all the branches for display
and distribution. The Banks total credit to women as at the end of
March 2010 stood at Rs. 1527.11 crores covering 127760 beneficiaries,
which works out to 5.90.% of Adjusted Net Bank Credit as against the
stipulated benchmark of 5%.
3.10 Measures to improve the economic conditions of Minority
Communities
The Banks assistance to the minorities under various schemes as at the
end of March 2010 stood at Rs. 1189.78 crores covering 99014
beneficiaries, which forms 12.97% of Priority Sector Advances.
3.11 Government Sponsored Schemes
3.11.1 The position of assistance rendered under various Government
sponsored schemes by our Bank as at the end of March 2010 is as
detailed below.
3.11.2 Prime Ministers Employment Generation Programme (PMEGP)
The Government of India has launched the new scheme "Prime Ministers
Employment Generation Programme (PMEGP)" to empower first generation
entrepreneurs to set up micro enterprises across the country by merging
the existing Prime Ministers Rozgar Yojana (PMRY) and Khadi & Village
Industries Commissions Rural Employment Generation Programme (REGP)
from the financial year 2008-09. The Banks total credit under PMEGP
Scheme as at the end of March 2010 stood at Rs.15.06 crores covering
481 beneficiaries while total credit under PMRY scheme is Rs.60.84
crores covering 11568 beneficiaries.
3.11.3 Swarna Jayanthi Shahari Rojgar Yojana (SJSRY)
The Bank has extended financial assistance of Rs.3.57 crores under
SJSRY during the year to 469 beneficiaries. Total amount outstanding
under SJSRY scheme as at the end of March 2010 is Rs. 12.82 crores
covering 3356 beneficiaries. *
3.11.4 Scheme For Rehabilitation Of Manual Scavengers (SRMS):
The Bank has extended financial assistance of Rs.0.11 crores under SRMS
to 35 beneficiaries as at the end of March 2010.
3.11.5 Differential Rate of Interest (DRI) Scheme
The Banks advances under DRI scheme stood at Rs.18.18 crores (Rs.
14.53 crores) as at the end of March 2010 covering 18095 beneficiaries
(13134), of which advances to SC/ST beneficiaries is at about 51.02%
(Rs.9.27 crores).
3.12 Investments
3.12.1 The total investments of the Bank in Government, approved and
other securities increased from Rs.11476 crores as at the end of March,
2009 to Rs. 11525 crores as at the end of March, 2010.
3.12.2 Profit on sale of investment decreased from Rs. 121.22 crores in
2008-09 to Rs. 32.41 crores in 2009-10 mainly due to hardening of
yields on debt securities. During the year, interest & dividend income
from investments net of amortisation charges registered a growth of Rs.
68.35 crores (9.69%) over March, 2009 level.
3.12.3 Yield on investments including profit on sale of securities is
at 6.98% as on 31st March 2010, as compared to 8.75% as on 31st March
2009.
3.13 International Banking
3.13.1 The knock-on effects of the global financial crisis, economic
slowdown and falling commodity prices in the global market has affected
the Indian economy to some extent. International credit channels
continue to be constrained; capital market valuations remain un-
improved over the previous year. Industrial production growth has
slackened and the anticipated export growth has not been registered
during the first two quarters of the financial year. However, there was
growth in export credit business during the latter half of the current
financial year.
3.13.2 The level of Export Credit as at the end of 2009-10 was Rs. 1214
crores as against Rs. 1158 crores of the previous year constituting
4.69% of ANBC. In order to encourage exports, more number of exporting
units have been offered Gold Card Scheme on competitive terms and
consequent benefit of subsidized interest rates of 0.15%. Exporters
meets were arranged at strategic branches.
3.13.3 As per Banks BPR objectives, the Bank has set up five TFCPCs at
Bangalore, Chennai, Hyderabad, Mumbai and New Delhi. During the current
financial year (2009-10), more branches have been linked to TFCPCs in
order to consolidate the front line processing and for extending
quality service to Exporters.
3.13.4 In the current financial year, due to easy availability of
dollars in the International Market, the export credit denominated in
foreign currency stood at USD 89.98 mio as at the end of the current
financial year, as against USD 55.21 mio in 2008-09.
3.13.5 The Bank has also been offering foreign currency loans (FCNR
Loans) to its customers at LIBOR related rates which stood at USD 38.18
mio as at the end of 2009-10 as against USD 35.14 mio as at the end of
previous year.
3.13.6 NRI Deposits as on 31.03.2010 stood at Rs.627.72 crores, of
which FCNR (B) deposit is at Rs.188.54 crores and NRE deposits at
Rs.439.18 crores.
3.13.7 The Foreign Exchange turnover of the Bank during 2009-10
improved to Rs. 155835 crores (Merchant Turnover - Rs.30678 crores and
Trading Turnover - Rs.125157 crores) recording an increase of Rs. 44030
crores over the previous year level of Rs. 101805 crores (Merchant
Turnover - Rs. 19608 crores and Trading Turnover - Rs.82197 crores).
3.13.8 The exchange profit generated from Foreign Exchange business
during 2009-10 was at Rs. 39.17 crores.
3.14 Cross selling
3.14.1 During the year over 26000 lives were insured through various
products of SBI Life Insurance Company Limited with a premium
collection of Rs.49.38 crores. Bank has collected a premium of Rs.
17.53 crores while marketing general insurance products. In respect of
investment products, Bank is extending mutual fund products of SBIMF
and UTIMF. Bank also sourced applications for SBI Credit Cards.
3.15 Government Business
3.15.1 State Government Transactions:
The bank has been handling a major share (55.11% during the year
2009-10) of Government of Kamataka Transactions for the past many
years. Around 86% of its total government business comes from State
Government transactions which is linked to the budget of the State
Government for the year. A Turnover of Rs.50,856 crore (provisional)
with a growth rate of 12.54% has been achieved during the year 2009-10.
3.15.2 Central Government Transactions
During the year 2009-10, business from various Central Govt,
departments like Postal, Railways, Defence, Central Board of Direct
Taxes, Central Board of Excise and business from various Central
Schemes like Public Provident Fund, Senior Citizens Savings scheme etc.
constituted approximately 14% of the Banks total Govt. Business
turnover. The turnover (provisional) of Central Government business
during the year 2009-10 has increased by Rs.1,038.81 crores registering
a growth of 13.86% and reached a level of Rs 8531.15 crores. Previous
year the turnover had increased by Rs 881.41 crores registering a
growth of 13.33% and reached a level of Rs.7,492 crores.
3.15.3 Income from Government Business
The average yield on Government transactions for the year is 0.09 %.
3.15.4 Qualitative improvements achieved
Special attention was given during the year 2009-10 to bring in
improvement in the reporting and reconciliation of Government business
and the following measures were initiated leveraging the technology
available.
à Funds settlement at Focal Point branches for most Government
Transactions were brought online based on the string generated at CDC
after the transactions are put through by the dealing branthes.
à Accounting and settlement procedure for all Government transactions
was streamlined and revised with effect from 1st February, 2010 to
facilitate prompt reconciliation of the transactions between the
dealing branches and Focal Point Branches.
à Link Cell, Nagpur, which is the focal point branch for settlement of
Central Govt, transactions, was brought under core-banking solution.
à Payment of Commercial Taxes (VAT & CST) through emode was introduced
in the State of Maharashtra.
à An add on utility was provided to G-Seva Branch for reporting of the
ICCOM transactions to RBI after reconciliation of the data with CBS.
3.16 Marketing
3.16.1 A full fledged Marketing Department is functioning in the Bank.
Marketing Officers have been placed in all the Regions. This initiative
has increased the visibility and marketing of Banks products and
services.
3.16.2 The marketing initiatives have resulted in getting a large
number of accounts from various Government Departments/Agencies.
3.16.3 A Toll Free Contact Centre set up to help the customers, has
been functioning actively. Bank has been giving adequate publicity in
electronic media, through news papers and hoardings regarding
establishment of our contact centre to enable the general
public/customers to call and collect the necessary information on
various products and services of our Bank.
3.17 NPA Management
3.17.1 Global recession and slowing down of the economy affected the
performance of all segments. This resulted in increase in NPAs from
Rs.368 crores as on 31st March 2009 to Rs.595 crores as on 31 st March
2010. The gross NPA ratio increased from 1.42% to 2.00%. The net NPA
ratio also increased from 0.50% to 1.02%. The provision for NPAs stood
at Rs.293 crores. Aggressive measures including effective use of
SARFAESI Act, rehabilitation of viable units, vigorous follow up of DRT
cases will be taken this year to reduce NPA levels.
3.17.2 Restructuring of Debt
The global recession of 2008 had contagion effect on the Indian economy
too. Industries across different sectors were affected by the downturn
with decline in sales, delay/default in realizations etc. As part of
the regulatory action, to protect the affected industries and provide a
stimulus for them to sustain and revive, Reserve Bank of India
permitted a Special Regulatory Treatment by allowing restructure of
accounts of such affected companies, without affecting their IRAC
(Income Recognition Asset Classification) status. Against this back
drop with a view to helping the affected sectors, our Bank extended the
special dispensation to 19592 borrowal accounts with dues amounting to
Rs.2330 crores. Towards diminution in their fair value on account of
economic loss caused in the process of restructuring, provision to an
extent of Rs.83 crores has been made by the Bank.
3.18 Lead Bank Scheme
3.18.1 The Bank has been discharging Lead Bank responsibilities in
three districts viz., Mysore, Tumkur and Chamarajanagar. Annual Credit
Plans for 2010-11 have been launched. The combined annual credit plan
target for 2010-11 for all banks in the three districts has gone up to
Rs.4327.09 crores from Rs.3422.64 crores showing a growth of Rs.904.45
crores (26.43 % growth).
3.18.2 To impart entrepreneurial guidance to Educated Unemployed Youth,
in general and rural youth in particular and enabling them to become
gainfully self-employed in their own ventures, the bank has established
RUDSETI type Training Centres viz., Mybank Institute for Promotion of
Self Employment and Development (MIPSED) at Hirehally Industrial
Estate, Tumkur. A similar institute has been established at Mariyala,
Chamarajanagar Taluk, in association with JSS Mahavidyapeetha viz.,
RUDSETI, Mariyala. Both the institutes are being managed by personnel
on deputation from the Bank. Both the institutes impart training to
candidates selected under various Government Sponsored Schemes, such as
PMEGP, SGSY, BCM Corporation, Watershed Development Program, Stree
Shakthi SHG Programs, Bee Keeping, Sericulture, Farmers Club Program,
Dairy Development Program etc. During the year, both the centres have
conducted 166 programs, wherein 5678 trainees were given training.
3.18(a) Regional Rural Bank
Cauvery Kalpatharu Grameena Bank, the RRB sponsored by the Bank is
having its Head Office at Mysore, and covers 7 districts viz., Mysore,
Hassan, Chamarajanagar, Tumkur, Bangalore Urban, Bangalore Rural and
Ramanagara. The Bank is having a net work of 210 branches. The total
deposits and advances of the RRB, as on 31st March 2010, stood at Rs.
1799 crores and Rs. 1413 crores respectively (provisional). The RRB has
been the winner of the Best Bank Award instituted by NABARD under RRB
category for its performance under SHG Bank Linkage Program for the
past four years continuously from March 2006 to March 2009.
3.19 Financial Inclusion
3.19.1 In terms of the Reserve Bank of India directives, the Bank
completed the first phase of the Financial Inclusion programme well
before the cut off date fixed by RBI in the lead districts. The Bank
actively implemented the programme in non lead districts also. The
Number of No Frill Accounts increased to 2,39,230 as on March 31st 2010
from 1,80,404 as on March 31st 2009 with an increase of Rs.1.68 crores
in the balance outstanding during the year.
3.19.2 The Bank is actively participating in the Renewed Drive
programme under Financial Inclusion, to cover all the house holds who
have been issued with Photo Identity Ration Cards from Food and Civil
Supplies Department of Government of Karnataka. Under this, project the
bank has opened more than 13,000 No Frill Accounts during the period
January to March 2010, when the programme was undertaken.
3.19.3 The Bank has achieved the benchmark of operationalising 50% of
its No Frill Accounts maintained as on 31st
March 2009 by sanctioning of GCCs / KCCs / Small Overdrafts and also by
means of effecting payments from GOK like SSP and NREGP through the No
Frills Accounts during the year.
3.19.4 The Bank has participated in implementing the second phase of
the Financial Inclusion Programme by issue of Smart Cards that will
herald branch- less banking in the remote rural areas, in 25 villages
through 11 rural branches covering 3019 rural folks on a pilot basis in
the districts of Bellary, Chitradurga and Tumkur under One district -
Many Banks Model.
3.19.5 Further the bank has shouldered the responsibility of
implementing the Smart Card based EBT scheme under One district - One
Bank Model successfully in Chamarajanagar district wherein, 2800 Smart
Cards have already been issued while enrolments were to a tune of 43570
accounts. The number of villages covered in this project is 39 in 2
taluks.
3.20 Self Help Group Lending
The Bank has credit linked 37454 groups with an advance amount of
Rs.337.70 crores during the current year and taking the cumulative
total of such credit linkage programme to 1,16,040 groups with a
financial outlay of Rs.897.19 crores upto 31st March 2010. These
efforts of the Bank have been recognized and the Bank has been awarded
the 1st Best Bank Award instituted by NABARD under the Commercial Banks
Category for its performance under SHG Bank Linkage Programme for the
year 2008-09. The Bank has been the winner of either the 1 st or the
2nd prize award since March 2000 continuously.
3.21 Corporate Social Responsi- bility - Green Banking
As a part of the national initiative, the Bank has adopted a pblicy on
"Corporate Social Responsibility, Sustainable Development and
Non-Financial Reporting - Role of Banks". As part of the policy, Green
Banking Committees have been formed at Head Office, Zonal Offices and
all Regional Offices of the Bank. More emphasis is being given through
Farmers Clubs, the need to concentrate on Organic Farming and Rain
Water Harvesting. Further, a campaign has been started in a number of
branches, to replace all fused GSL bulbs into CFL bulbs.
13. CORPORATE GOVERNANCE
13.1 Statement of Banks philosophy on Corporate Governance
13.1.1 State Bank of Mysore, as an organization driven by values, is
committed to pursue objectives that are in the interests of the Bank,
shareholders and all stake holders and the society at large,in
consonance with best practices. The primary objectives of Corporate
Governance are:
à To protect the interests of the shareholders and all stakeholders and
to ensure maximization of long term shareholder value in a legal and
ethical manner.
à To act in the best interests of all stakeholders like customers,
employees, government and the society.
à To ensure transparency, fairness, courtesy and dignity in all
transactions within and outside the Bank which form the hallmark of
good governance.
à To maximize operational efficiency in a well defined and transparent
manner and achieve excellence and benchmarks at all levels.
à As custodians of public thrift, ensure safety of funds and
investments.
à Focus on core competence areas, planned expansions and sustained
growth.
The Bank believes that Corporate Governance facilitates effective
management and better internal controls.
13.1.2. Compliance function is an integral part of corporate governance
along with the internal control and risk management process. In view of
increasing complexities and sophistication in Banking business, there
is a critical need for management of compliance risk and reputation
arising out of compliance failures.
13.1.3. During this year, the Compliance Department has conducted
Compliance Audit of branch Internal Audit report for 52 branches and
Credit Audit Compliance of 123 accounts which were closed during the
period ended 31/12/2009. The major observations pointed out were taken
up for rectification. All concerned have been sensitized to the need of
full compliance in this regard.
13.1.4. KYC/AML (Know Your Customer/ Anti Money Laundering) Cell is
also part of Compliance Department. Specified KYC standards to be
followed by the bank, measures to be taken with regard to AML and
Combating of Financing of Terrorism (CFT) are strictly adhered to. The
cell is technically equipped with appropriate systems and manpower for
analyzing alerts and wherever necessary reporting the same to
authorities. The cell also handles Cash Transaction reports and
Counterfeit Currency Reports in case of detection of counterfeit
currency.
13.1.5. Off-site Surveillance Cell an integral part of Compliance
Department submits its compliance reports on DSB returns to RBI
periodically.
13.1.6. The Bank is committed to:
à Ensure that the Banks Board of Directors meet regularly, provide
effective leadership, exercise control over the management and monitor
executive performance with their blend of expertise and
professionalism.
à Establish a frame work of strategic control and continuously review
its efficacy to promote integrity, openness and accountability. Better
disclosures and transparency will bolster investor/ share/stakeholder
confidence.
à Establish clearly documented and transparent management processes for
policy planning and development, coherent business strategies,
implementation and review, decision- making, monitoring control and
reporting.
à Ensure adherence to good business ethics and principles while
carrying out banking transactions and be responsive to the needs and
interests of wide range of constituencies.
à Practice sound financial and accounting procedures to ensure
statutory and regulatory compliances and constantly review
organisational structure and control systems to respond to new
challenges.
13.1.7. The Bank has implemented the revised Clause 49 of the Listing
Agreement. A code of conduct for the Directors and senior management
personnel is put in place and is also posted on the Banks website.
15. AUDIT
M/S PKKG Balasubramaniam & Associates, Chennai, M/s. Dhawan & Company,
New Delhi, M/S Gopala Iyer & Subramanian, Coimbatore, M/S Ramraj & Co.,
Bangalore and M/S Grover, Lalla & Mehta, New Delhi have been appointed
as the Statutory Central Auditors of the Bank for the accounting period
ended 31st March, 2010 by State Bank of India, with the approval of
Reserve Bank of India. 660 branches of the Bank were subjected to
statutory audit as against 639 branches audited last year.
16. ACKNOWLEDGEMENTS
The Board wishes to place on record its sincere appreciation of the
patronage and support of the customers, shareholders, members of staff,
Employees Union and Officers Association for their contribution to
the overall development of the Bank.
By the Order of the Board
DILIP MAVINKURVE
Managing Director
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