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Directors Report of UCO Bank

Mar 31, 2019

I. PERFORMANCE OF THE BANK DURING 2018-19:

1. UCO’s Delivery Channels:

1.1 BRICK AND MORTAR NETWORK:

Bank has a geographically well-spread branch network in India and also has presence abroad. As of 31.03.2019, Bank has 42 Zones and 3086 domestic branches and 2 overseas branches (one each in Singapore and Hong-Kong). Bank’s representative office has been established in Tehran, Iran which is functional w.e.f. 25.03.2017.

The Global branch network over 5 years is as under:- (Global)

March’15

March’16

March’17

March’18

March’19

SUT/Branch 3020

3077

3104

3108

3088

1.2 BRANCHES & OFFICES NETWORK:

The population category-wise break-up of domestic branches as of 31.03.2018 & 31.03.2019 is given below:

The domestic branches include 5 Flagship corporate branches, 7 AssetManagement branches, 4 service branches and 1 central processing centre, 1 integrated treasury branch. Further 27 Retail loan hubs, 1 SME hub, 72 currency chests are also functioning across the country attached to the major city branches of various centres.

2. BUSINESS PROFILE:

2.1. GLOBAL:

- Global business of the Bank stood at Rs.3,17,480 crore as of 31.03.2019 compared to Rs.3,05,838 crore showing an increase of 3.81% over March 2018.

- Global Deposits has increased by 8.83% as of 31.03.2019 and stood at Rs.1,97,906.78 crore. Global advances fell by 3.56% and stood at Rs.1,19,573.01 crore compared to Rs.1,23,990 crore as of 31.03.2018.

2.2. DOMESTIC:

- Overall domestic business of the Bank has increased by 8.28% reached at Rs.3,04,016.68crore as of 31.03.2019 from Rs.2,80,763.62 as of 31.03.2018.

- Total deposits increased by 11.78% and stood at Rs.1,92,278.15 crore.

- Advances registered a growth of 2.75% from Rs.108746.19 crore to Rs.111738.53 crore.

- CASA deposits increased by 33.53% on Y-O-Y and stood at Rs.85,559.42 crore, SB deposits grew by 8.35% and stood at Rs. 59,316 crore. Current deposits stood at Rs.26243.07 crore compared to Rs. 9329.68 as of 31.03.2018, showing a growth of 181.29% on Y-O-Y basis.

- Share of low cost deposits (CASA), in domestic deposits improved from 37.25% as of 31.03.2018 to 44.50% as of 31.03.2019.

2.3 FINANCIAL PERFORMANCE:

Bank has incurred loss of Rs.4321 core during FY 2019 as compared to Rs.4436 crore in FY 2018. The loss during FY19 is decreased and the operating Profit for FY 2019 is Rs.2760 crore as against Rs.1334 crore during FY 2018, thereby reflecting an increase of 106.89%. During the year FY 2019 Total income registered growth of 4.64% from Rs.15141 crore in FY 2018 to Rs.15844 crore in FY 2019. Total expenses of the Bank has declined by Rs.723 crore in FY 2019 against the previous year FY 2018. During the year Bank made provision of Rs.7081 crore against Rs.5771 crore in FY 2018.Cost of deposits has decreased from 5.37% in FY 2018 to 5.07% in FY 2019. Net interest income increased to Rs.4311 crore in FY 2019 from Rs.3125 crore in FY 2018. Capital Adequacy Ratio (CAR) under Basel lII stood at 10.70% as on March 2019. Govt. of India infused Capital to the tune of Rs.3330 crore during the quarter ended 31.3.2019.

3. TREASURY & INTERNATIONAL:

Domestic Investment of the Bank during the year 2018-19 increased by 15.20% from Rs.69987 crore as on 31.03.2018 to Rs.80622 crore as on 31.03.2019 largely due to allotment of recapitalization bond and purchase of Government securities.

The SLR investment of the Bank increased by 8.31% from Rs.52471 crore as on 31.03.2018 to Rs.56834 crore as on 31.03.2019 mainly due to purchase of high yielding Govt. Securities. The Non-SLR Investment (Domestic) grew by 35.81% from Rs.17516 crore as on 31.03.18 to Rs.23788 crore as on 31.03.19 mainly due to allotment of recapitalization bond from GoI amounting to Rs.6406 crores.

During the year 201 8-1 9, the bank has earned income from Treasury operations including profit from sale of investments amounting to Rs.6252.47 crore vis-a’- vis Rs.6005.45 crore during the year 2017-18, thereby registering a 4.11% increase in treasury income y-o-y basis mainly due to higher interest income from investments and profit from sale of investments.

During the year 2018-19, the bank has registered a growth of 2.97% in interest income from domestic investments which stands at Rs.5326.45 crore as on 31.03.19 as compared to Rs.5173.03 crore as on 31.03.18 thereby registering a growth of Rs.153.43 crore y-o-y basis mainly due to increase in domestic Investment portfolio.

3.1 Export Business:

“With 66 ‘B’ Category Branches across India, UCO Bank is committed to actively cater to the needs of its exporters. Total Merchant Turnover of the Bank during the Financial Year ended 31st March, 2019 stood at Rs.72,485.11 crore which is 78.82 % higher than previous year. Bank Export credit outstanding during 31st March, 2019 is 2,204.40 crore, registering a growth of 11.46% over 31st March, 2018.

‘UCO Bank’, has been facilitating Bi-lateral Banking Trade transactions with Iran under “Rupee Payment Mechanism” since Feb, 2012 as mandated by Govt. of India/RBI, thereby facilitating Indian Exporters, exporting permissible goods and services to Iran.

4. SOCIAL BANKING:

4.1. Priority Sector Advances:

The Bank has been showing significant performance in lending to Priority Sector over the years and has been effectively servicing the priority sector and agriculture sector with its vast network of rural and semi-urban branches.

As on 31.03.2019 the Priority Sector Advances of the Bank stood at Rs.54,849 crore constituting 43.48% of Adjusted Net Bank Credit (ANBC).

4.1.1. Agriculture Advances:

Total Agriculture Advances of the Bank stood at Rs.21,420 crore constituting 16.98% of ANBC. Direct Agriculture stood at Rs.16,452 crore constituting 13.04% of ANBC.

4.1.2. Advances to Weaker Sections:

Advances to Weaker Section stood at Rs.16479 crore as of 31st March, 2019 constituting 13.06% of ANBC.

4.1.3. Minority Community Advances:

Total Minority Community Advances of the Bank as on 31.03.2019 stood at Rs.7141 crore constituting 15.25% of Priority Sector Advances.

5. Unique Schemes:

The Bank has one unique scheme - “UCO Uthaan” for upliftment of BPL families & all-round development of adopted villages.

UCO Uthaan Scheme: Social-cum-Financial upliftment scheme for BPL families & all-round development of villages.

Under the Scheme, villages having large number of BPL families are adopted by the Bank through its nearest branch to bring the BPL families out of the clutches of poverty and to bring about a holistic change in the villages. Under the scheme, a holistic development plan of the villages is drawn and followed up for covering areas like education, financing for rural housing, formation of SHG and micro-financing, development of handicrafts & rural artisans and extending finance under DRI Scheme.

The Bank has adopted 31 villages in 10 states i.e. Assam, Bihar, Gujarat, Maharashtra, Odisha, Punjab, Rajasthan, Tamil Nadu, Uttar Pradesh & West Bengal under UCO Uthaan Scheme.

In these villages, Bank has conducted financial literacy camps to educate the villagers, extended financial support to them and has also initiated developmental activities under Corporate Social Responsibility. Under financial assistance, Bank has given General Credit Cards (GCC) to small traders, Artisan Credit Cards (ACC) to artisans, Kisan Credit Cards (KCC) to farmers, loan to SHGs, loan for doing animal husbandry activities, loan to women & SC/ST beneficiaries. Many small traders have started their own business with the support of Bank loan. Through CSR activities, Bank has given Ceiling Fans, Water purifiers to different schools, Steel Almirahs, Books for school library, School uniform for school going children, installation of hand pumps for drinking water in the villages, installation of Solar street lights in the villages, construction of metallic road.

In two villages, out of above 31 villages, Bank has provided doorstep banking facilities to the villagers of these unbanked villages through Mobile Van. The Van visits these two villages on a predetermined day and time during the week and provides all types of banking facilities to the villagers at their doorstep. There has been increase in the saving habits of the villagers due to this initiative. Through these vans, villagers are also being financially educated. By these activities, there is an all-round development in the adopted villages and the villagers are very much benefitted.

By these efforts, 6568 BPL families, in these 31 adopted villages have been provided with credit assistance by Bank to uplift their livelihood in better way during last 4 years. These BPL families are generating their income by adopting several activities like dairy farming, goat farming, betel leaf cultivation, vegetable growing, cycle repairing, shoe mending, fruit vending, grocery shop, tea stall, beedi making, trolley plying, mason jobs etc.

5.3 During the year 2018-19, Bank has introduced many new schemes to increase agriculture business. Some of the schemes are given below:

- UCO Food & Agro Processing Unit.- Financing new/existing Agro & Food Processing units.

- Two- wheeler, light &Medium Vehicle for farmer.- The scheme is specially designed to provide hassle free financial assistance for conveyance needs of farmer for farm activities.

- UCO FPC( Farmer Producer Company) & UCO NFPC(UCO Non- Farmer Producer Company) .

- UCO AMI - Agricultural Marketing Infrastructure.- The UCO AMI Scheme lays special focus on developing and upgrading Gramin Haats as Gramin Agricultural Markets (GrAMs) through strengthening of infrastructure.

- UCO BC PLUS - UCO Bank has entered in to tie up arrangement with M/s atyati Technologies Private Limited for increase of Credit linkage in Agriculture & Allied Activities under Business Correspondent (BC) Channel.

The Bank has signed MoU with M/s Atyati Technologies on 31-01-2019 in this regard. Following Loan products have been implementedon UCO BC PLUS scheme:

a) UCO BC PLUS - DAIRY.

b) UCO BC PLUS - CROP PRODUCTION.

c) UCO BC PLUS - RURAL BUSINESS CENTRE.

6. REGIONAL RURAL BANKS (RRBs):

UCO Bank sponsored RRB namely, Paschim Banga Gramin Bank (PBGB) is head quartered at Howrah, West Bengal with four regional offices and 230 branches as on 31.03.2019. Another sponsored RRB, Bihar Gramin Bank has been amalgamated with Madhya Bihar Gramin Bank(sponsored by Punjab National Bank) and a new RRB named Dakshine Gramin Bank (Sponsored by Punjab National Bank) has been formed w.e.f. 01.01.2019.

6.1 Capital Position of RRBs:

The total capital composition of Paschim Banga Gramin Bank as on 31.03.2019 stood at Rs.154.51 crore (Govt. Of India), Rs.108.16 crore (UCO) & Rs.46.35 crore (West Bengal State Govt.).

Performance of RRB during 2018-19:

6.1.1. Paschim Banga Gramin Bank:

As per unaudited financial results, total deposit of Paschim Banga Gramin Bank stood at Rs.5181.30 crore as on 31.03.2019, registering growth of 8.79 percent. Total advance reached a level of ‘.2739.53 crore with an annual growth of 13.25 percent as on 31.03.2019. CD ratio stood at 52.87% on 31.03.2019 as against 50.79% on 31.03.2018.

The gross NPA stood at Rs.373.45 crore as on 31.03.19 vis-a-vis Rs.474.54 crore as on 31.03.2018. Gross NPA to Gross Advance stood at 13.63% as on 31.03.2019 as against 19.62% as of 31.03.2018. The net NPA ratio of the RRB stood at 9.16% as on 31.03.2019 as against 14.85% as of 31.03.2018.

Paschim Banga Gramin Bank has recorded a net profit of Rs.25.57 crore as on 31.03.2019 as compared to net loss of Rs.39.40 crore as on 31.03.18, thereby decreasing accumulated loss from Rs.107.97 crore as on 31.03.2018 to Rs.82.40 crore as on 31.03.2019.

6.2. Corporate Social Responsibility:

Bank has taken several programmes/initiatives as a part of Corporate Social Responsibility. Few of these programmes/ initiatives are as under:

a) Our Bank has set up 27 Rural Self Employment Training Institutes in 7 States namely Assam, Bihar, Himachal Pradesh, Odisha, Punjab, Rajasthan and West Bengal. These 27 institutes, with dedicated infrastructures, are devoted to impart training and skill upgradation and to mitigate the unemployment and under employment problems for rural youths. These institutes are set up by the Bank as a part of the initiative taken up by the Ministry of Rural Development to establish dedicated training institutions for development of entrepreneurship skills in rural youth, under Corporate Social Responsibility (CSR). All RSETI trained 17883 candidates and 7792 beneficiaries have been provided Credit Linkage of Rs.98.72 crore during the Financial Year 2018-19.

b) Our RSETI, Goalpara, Assam was adjudged best performing RSETI among North Eastern & Hilly states for the year 2018-19 and was awarded certificate of excellence on Aajeevika Evam Kushal Vikas Mela held on 5th May, 2018 in Ranchi Jharkhand.

c) Bank under UCO Utthan scheme has adopted 31 villages falling under 26 UCO Branches in 19 Zones of the Bank for upliftment of BPL families and all-round development of adopted villages with financial & social intervention.

d) Under the initiative of Reserve Bank of India, bank has set up 10 CFLs (Centres for Financial Literacy) in 10 Blocks, 5 each in Bhadrak and Dhenkanal district of Odisha. The Bank and NABARD bear the cost of operationalisation of these CFLs in 40:60 ratios.

e) Bank has 34 Financial Literacy Centres across the country and has recruited 29 Financial Literacy Counsellors for conducting Financial Literacy Camps. During Financial Year 2018-19 the Financial Literacy Counsellors have conducted 6008 Financial Literacy Camps thereby spreading Financial Awareness to 353303 participants.

f) Under the initiative of NABARD, Financial Literacy Awareness Programme (FLAP) has been initiated in all Rural Branches of Our Bank for imparting financial literacy awareness for different target segments of population. Programmes were on digital literacy and safety measures to be adopted while doing e-transaction. Our Bank has 1075 Rural Branches where 9258 FLAPs were organised with contribution from our Bank in these programmes amounting to Rs.1.13 crore.

7. MICRO, SMALL & MEDIUM ENTERPRISES (MSME):

Bank recognizes importance of MSME sector in economic growth of the country. The advance under Micro, Small & Medium Enterprises (MSME) as on 31.03.2019 is Rs.23416.28 crore.

New Initiatives taken under MSME during FY 2018-19:

- Bank has taken Board approval for signing MOU with CGTMSE for participating as lender on the Udaan Portal. Since guarantees would be extended upfront, Bank can take credit decision right at the beginning.

- SME hubs proposed to be established in nine centres i.e. Kolkata, Mumbai, Hyderabad, Chennai, Bangalore, Ahmedabad, Chandigarh, Coimbatore and Surat. SME Hub at New Delhi has already been made functional to augment the business under MSME.

- New product on E-Rickshaw i.e. “E-Rickshaw under Mudra Scheme” has been launched on 28.06.2018.

- Bank introduced “Mukhya Mantri Swavalamban Yojana 2018” scheme for “Bonafide Himachali” i.e. resident of the State of Himachal Pradesh on 28.11.2018.

- New Schemes “UCO PM Credit Scheme for Powerloom Weavers under MUDRA” and “UCO PM Credit Scheme for Powerloom Weavers under Standup India” has been launched on 29.11.2018.

- Bank has tied-up with RXIL, one of the players at TReDS platform and is discounting online bill w.e.f. February 2019. A total of 656 bills were purchased amounting to Rs.35.45 crore during 05/02/2019 to 31/03/2019 on this platform.

- Scheme for financing “Two Wheeler under Mudra” launched w.e.f. 22.02.2019.

- Bank has tie-up with www.psbloansin59minutes.com, one of the fintech companies, for generation of leads and reduction of TAT.

8. RETAIL BANKING:

The performance highlights of the bank under retail banking during FY 2018-19 are furnished hereunder:

(Rs. in crore)

As on March 2018

As on March 2019

% Growth Y-o-Y

Product

Home Loan

12694

13545

6.70%

Car Loan

1356

1357

0.07%

Personal Loan

464

514

10.78%

Other Retail Loan

7439

7076

-4.88%

Total Retail

21953

22492

2.46%

- Retail loan portfolio registered Y-o-Y growth of 2.46%. There is a growth of 6.70%, 0.07%, and 10.78% in Home loan, Car Loan, and Personal Loan Categories respectively during the FY 2018-19.

- NPA under Retail loan Portfolio (excluding Pool) reduced by Rs.91.88 crore during the year ended 31st March 2019 in comparison to 31st March 2018. During this period, NPA in all Retail Loan products, except UCO Property loan, has shown a downward trend.

- Pool account of Rs.500.00 crore under Home loan has been sourced during this Financial Year.

- Integration of Credit Information Report pulling through CIBIL and CRIF has been implemented in LAPS.

- Seven Retail loan Schemes have been customised for processing through LAPS.

- A new Education Loan Scheme “Chief Minister’s B.Ed. Anuprerna Yojna” is introduced to cater the financial needs of students domiciled in the State of Tripura who are pursuing B.Ed. course.

- UCO Gold Loan Scheme was modified and Processing & Documentation charges are completely waived in UCO Gold Loan Scheme to make it more competitive and in line with similar scheme of our peer Banks.

- An MOU was signed with M/s Prasar Bharti to provide Retail Loans at concessional rate to Employees/Deemed Employees of M/s Prasar Bharti.

- 100% waiver of processing charges was given to the Land Lords of our Bank’s Branch/ATM premises under UCO Rent Scheme till 31.03.2019.

- To streamline processing of Retail Loans and reduce the turnaround time, “Revised structure & Operational Guidelines of Retail Loan Hubs” were implemented. Three more RLHs at Bangalore, Shimla and Bhubaneswar were established during the current Financial Year.

- Bank has introduced “Monsoon Offer-2018” from 01.07.2018 to 30.09.2018 wherein 100% processing and documentation charges are waived in Home and Car Loans.

- Bank has also introduced “Grand festive offer-2018” from 01.11.2018 to 31.01.2019 which is further extended to 31.03.2019 wherein 100% processing and documentation charges are waived in Home and Car Loans.

9. BANCASSURANCE:

- Bank increased the number of Specified Persons (SPs) during the Fiscal 2018-19 for augmenting Bancassurance business. These Specified Persons are duly trained and certified by Insurance Regulatory & Development Authority of India (IRDAI). Number of Specified Persons posted in Branches/Zones is 316 in March 2018 and subsequently increased to 332 in March 2019.

- Bank is a Corporate Agent for Life and General Insurance Companies and Master Policy Holder for Group Life Insurance category.

1. Life Insurance Channel Partner:-

(a) M/s Life Insurance Corporation of India

2. General Insurance Channel Partners:-

(a) M/s Reliance General Insurance Company Co Ltd.

(b) M/s Future Generali India Insurance Co Ltd.

(c) M/s Liberty General Insurance Ltd.

3. Group Life Insurance Channel Partner:-(a) M/s Kotak Mahindra Old Mutual Life Insurance Co. Ltd.

- Bank also distributes units of the following Mutual Fund Channel Partners:-

1. M/s. Kotak Mahindra AMC Ltd.

2. M/s. Reliance Nippon Life Asset Management Limited,

3. M/s. SBI Funds Management Private Limited.

4. M/s. UTI AMC Limited

5. M/s. HDFC Mutual Fund

6. M/s. Baroda AMC India Limited

7. M/s. ICICI Prudential AMC Limited

8. M/s. Franklin Templeton Mutual Fund

9. M/s. Aditya Birla Sun Life AMC Limited

Business Performance under Bancassurance Life, Non-Life & Mutual Fund

Business:

(01/04/2018 to 31/03/2019)

Sl

Name of the Company

Premum

Commission

No of Policy/

Collected

Earned

Folio

(Rs. in Lakhs)

(Rs. in Lakhs)

(Rs. in Lakhs)

1.

M/s Life Insurance Corporation of India

4577.00

274.87

2899

2.

M/s Reliance General Insurance Co. Ltd.

1667.00

197.45

283387

3.

M/s Future Generali India Insurance Co. Ltd.

803.65

121.83

44859

4.

M/s Liberty General Insurance Co. Ltd.

1758.39

270.49

79222

5.

M/s. Kotak Mahindra Old Mutual Life Insurance Co. Ltd.

1279.11

N/A

8896

6.

Mutual Fund Business

228.72

33.24

798

Total Business

10313.86

897.88

420061

The total Commission earned from Bancassurance Business for FY 2018-19 is Rs 897.88 lakhs.

10. FINANCIAL INCLUSION:

10.1. Pradhan Mantri Jan Dhan Yojna (PMJDY):

Bank has been allotted with 16225 villages across the country to provide inclusive Banking Facility in unbanked / under banked areas. In line with DFS directives these villages were categorized into 4066 Sub Service Area (SSA). Out of these 4066 SSAs, 3600 SSAs are covered though BC agents and remaining 466 SSAs in tier 5 villages (Population above 5000) are covered through Branches for ensuring universal Financial Inclusion and to bring the entire population under ambit of structured Banking facility. Bank has deployed 3564 Bank Mitras in these allotted SSAs. During the FY 2018-19 total 167.78 lacs transactions amounting Rs.6281.55 crore averaging every month about 13.98 lacs transactions amounting Rs.523.46 crore carried out through Micro ATMs used by BC Agents.

By end of March 2019 Bank has Rs.2221.30 crore deposits in 76.43 lacs PMJDY Accounts with average balance of Rs.2906.08. We have distributed around 39.98 lacs RuPay Cards to the eligible PMJDY account holders. During the FY 2018-19 average transactions to the order of 1.50 lacs took place through Rupay Cards on Micro ATMs used by BC agents amounting to Rs.75.70 crore in aggregate.

10.2. Aadhaar Seeding & Authentication:

As per revised guidelines Aadhaar can be given voluntarily as identity proof for opening customer accounts. Aadhaar is required for availing benefits under various welfare schemes. By 31st March 2019, around 84% operative CASA have been seeded with Aadhaar number and Aadhaar authentication has been done in 52% of operative CASA. Aadhaar based Direct Benefit Transfer worth Rs.5905.90 crore was transferred to the accounts of beneficiaries.

10.3. Aadhaar Enrolment Centre:

A total no of 300 Aadhaar Enrolment centers has been set up covering 10% of the branches as per UIDAI guidelines in our Bank. So far, 1016 staff members (operators/supervisor) have passed the certification exam and 1016 User IDs are activated in our bank. At present Bank is doing about 8 enrolments/updations per day per centre.

10.4. Micro Credit-Overdraft Facility:

Detailed guidelines by IBA for providing Overdraft facility up to 10,000/- has been sent to all branches/zones. Number of PMJDY accounts using the OD facility in the bank as on 31.03.2019 is 161556 involving aggregating sanctioned amount of Rs.32.38 crore.

10.5. Social Security Schemes:

Working on the government’s theme of providing social security to hitherto unbanked masses, Bank has implemented Insurance and Pension products namely, Pradhan Mantri Jeevan Jyoti Bima Yojna (PMJJBY), Pradhan Mantri Suraksha Bima Yojna (PmSBY), Atal Pension Yojna (APY) through its Branch and BC network. Under PMJBY scheme, 7.95 lakh subscribers are insured and under PMSBY scheme 15.58 lakh lives are insured. So far a total of 3137 claims are settled under PMJJBY and 665claims are settled under PMSBY. Further, total subscribers under Atal Pension Yojna crossed 1.99 lac till year end.

10.6. Revenue generated through Financial Inclusion Project:

Consistent, efforts under Financial Inclusion have given good results and Bank has started gaining both tangible and intangible benefit out of these activities. While decongestion of branches, reduction of transaction cost and increase in CASA base are intangible benefits of FI Project. Tangible benefits have come in the form of commission earned under various products. Bank has earned Rs.193.13 lacs in PMJJBY, Rs.22.80 lacs in PMSBY and Rs.76.34 lacs in APY as commission during FY-2018-19. Similarly an aggregate amount of Rs.7.28 crore is earned against DBT / DBTL during the year.

11. GOVERNMENT BUSINESS:

Government Business Cell handle Small Saving deposit schemes, collection of direct and indirect taxes, Central and State Government Pension, Atal Pension Yojna (APY), Sovereign Gold Bonds (SGB) and National Pension System (NPS).

During the 2018-19 all Branches have been authorized for the opening of account under Public Provident Fund (PPF), Sukanya Samriddhi Accounts (SSA) and Senior Citizen Saving Scheme (SCSS). There was increase in the accounts opened under PPF -9984 (23%) and Sukanya Samriddhi Accounts scheme -14,675(71%) during the year 2018-19.

There was a substantial increase in accounts opened under APY Scheme, from 64730 during 2017-18 to 78745 during 2018-19 shows 22% Y-o-Y growth.

Bank earned Turn over Commission to the tune of Rs.20 crore during 2018-19 on various productsnamely different state tax collections, CBDT tax collections, CBEC tax collections, central and state government pensions, Atal pension Yojna(APY), PPF, Sukanya Samridhi Yojana , SCSS and Sovereign Gold Bond etc.

12. LEGAL MATTERS:

With the ever changing trend of the legal contours concerning the Banking industry, the significance of the role & responsibilities shouldered has been manifold. With the PCA looming over the Bank, the primary focus has been recovery & Law Department, Head Office has been working in tandem with the other departments’ viz. Recovery, Retail etc. in augmenting Bank’s recovery prospects.

The periphery work has been expanding entailing within its ambit framing of Policies as well as providing tangible assistance to other Departments for the same, rendering opinion as and when referred to from various Corporate Departments of Head Office as well as Zonal Offices / Branches from time to time, vetting, drafting, monitoring of cases (wherein Bank is a party) filed / pending before various fora of Law and adapting the various changes ushered in the legal spectrum involving the Banking Sector, thus ensuring protection of Bank’s interest in every step. As on 31st March, 2019, Law Department, Head Office has issued 20 Circulars, highlighting, all the amendments made to the recently enacted Insolvency and Bankruptcy Code, 2016 as well as its analogous Regulations / Rules issued thereunder in view of the various Gazette Notifications published in this regard by the Ministry of Corporate Affairs & insolvency and Bankruptcy Board of India (IBBI), Companies Act, 2013, Security Interest (Enforcement) Rules, 2002 etc.

Law Department, Head Office has also been instrumental in framing a policy on ‘Issuance of Look out Circulars’ after the Ministry of Home Affairs accorded authority to the MD & CEOs of PSBs for making requests for issuance of Look out Circulars. Further, necessary assistance has also been rendered for imparting effective training to Bank’s Staff on topics of banking pertinence viz. ‘Documentation’, Tendering Processes etc.,

Further, Law Department, Head Office has been regularly monitoring cases filed before various fora of Law (viz. Hon’ble Supreme Court, Hon’ble High Courts, Debts Recovery Tribunal, Debts Recovery Appellate Tribunal, Consumer Forum etc.) and has contributed towards ensuring protection of Bank’s interest therein.

13. RECOVERY:

The increasing trend of NPAs in the Banking Industry over last four years has become concern for the Bank. Gross NPA level of our Bank increased from 24.64% in March, 2018 to 25.00% in March, 2019 and the quantum of GNPAs has decreased from Rs.30549.92 crore to Rs.29888.33 crore respectively. The NNPA percentage decreased to 9.72% from 13.10% of previous year.

During the FY 2018-19 the Bank has witnessed fresh slippages of Rs.9082.44 crore. Cash Recovery for Rs.2991.52 crore for the year ended 31st March, 2019. The total reduction in Cash Recovery & Up-gradation of NPA during FY 2018-19 is Rs.5323.72 crore. Maintaining Bank’s Asset quality and recovery of Bad debts remain main focus area for the Bank.

13.1. Recovery performance:

Bank’s recovery mechanism is also geared up at all levels of the organization to take advantage of modified compromise settlement scheme, SARFAESI Act, DRTs, Lok Adalats, NCLT, Country wide mega Recovery Camps, Road Shows, MAO campaigns, declaration of willful defaulters etc. were organized for speedy recovery.

The details of GNPA, NNPA, Cash Recovery and upgradation for the last three years are as under:

(Rs. in crore)

Particulars

31.03.2017

31.03.2018

31.03.2019

Cash Recovery

2038.66

1680.04

2991.52

Up gradation

4300.45

2610.08

2332.20

Total

6339.11

4290.12

5323.72

Recovery in Loss Assets

(ML & Technical Write-off accounts)

139.81

181.56

435.49

Gross NPA

22540.95

30549.92

29888.33

Gross NPA %

17.12%

24.64%

25.00%

Net NPA

10703.39

14082.07

9649.92

Net NPA %

8.94%

13.10%

9.72%

The total cash recovery plus upgradation for the year ended 31st March, 2019 Rs.5323.72 crore as against Rs.4290.12 crore for the year ended 31st March, 2018. The recovery in written-off accounts is Rs.435.49 crore for the year ended 31st March, 2019 compared to Rs.181.56 crore for the previous year.

Recovery in Loss assets has a direct impact upon the profitability and the Bank giving priority in monitoring / follow-up for recovery in such accounts. A separate vertical in the Bank is monitoring consistently for recovery in loss assets including technically as well as prudentially written-off accounts.

13.2. Some Recovery initiatives:

Bank has liberal compromise Settlement scheme for NPA and ML accounts having O/s Balance up to Rs.25.00 Lac under which the branch heads are empowered to approve compromise proposal to ensure more NPA accounts are covered under the proposed non-discretionary/ non-discriminatory OTS Scheme.

- Bank has formed 144 clusters covering all the zones, with each cluster comprising of 4-5 branches of highly concentrated NPA to maintain contact with the borrowers, organize recovery camps at regular intervals and scout OTS proposals. Emphasis is also given for OTS/Compromise settlement for eligible NPA accounts under all categories.

- Bank has empanelled 513 Enforcement & Recovery Agents and 1267 Business Correspondents (BCs) for effective and time-bound enforcement of action under SARFAESI Act and early resolution of NPA accounts.

- Bank has implemented the Legal Management System with the objective to facilitate different departments at Head Office & Zonal Offices for monitoring legal matters, creating database of all cases pending before different courts for effective monitoring and early resolution of accounts.

- MAO (Many against One) approach is adopted against recalcitrant borrowers on a regular basis and being monitored at HO level.

- Countrywide Mega Recovery Camps are being organized on Two days every month.

- Mega e-auction of properties under SARFAESI is being condued on quarterly basis.

- Eligible properties put for auction are uploaded on ‘e-B-G-r a common web portal of IBA (https://ibapi.in) (Indian Banks Auction Properties Information) for meaningful search by the prospective buyers from 28.02.2019.

- Accounts eligible for NCLT are being explored vigorously. Bank is in liaison with other financial creditors on regular basis, for considering the way forward in respect of NCLT cases.

Most of the accounts under NCLT are consortium / multiple banking accounts which are being monitored for resolution on case to case basis in consultation with leader of consortium etc. Where we are the leader of the consortium, the department is meticulously following up each and every account for the purpose of resolution.

Where our Bank is a member of Consortium / JLF, we are taking up the critical issues from Head Office with the top management of the respective Leader Banks on regular basis, specifically to convene meeting of JLF at frequent intervals and ensuring our Bank’s participation at suitable levels in such meetings.

- Eligible NPA accounts are identified for Sale to ARCs from time to time at regular interval. A total of 434 A/cs amounting to Rs.6150.99 crores since inception and 2 accounts sold for Rs.46.24 crore during the year ending 31.03.2019.

- State specific Schemes were formulated to widen the scope of NPA recovery as per requirement under Debt Waiver at the State Level through the SLBC of the respective states such as 1) Kerala Govt. Educational Loan assistance, 2) Debt Redemption Scheme - U.P., 3) Chatrapati Shivaji Maharaj Swetkari Sanman Yojna (CSMSSY-2017) of Maharashtra Govt. etc.

14. CREDIT MONITORING:

Present economic situation has accentuated upsurge of bad loans in the banking industry and force banks to deal with NPA more proactively by stressed asset management for arresting fresh slippage. Bank has geared up mechanism of tracking by initiating measures as under:-

1. Bank has put in place framework for identification of Red Flagged Account (RFA) based on triggers known as Early Warning Signals (EWS) as per guidelines on Framework for dealing with loan frauds leading to the identification of the account as fraud or not within the period of six months from date of marking the account as RFA. Regarding System identification of EWS, Proof of Concept (POC) is completed and total process will be completed within 30.06.2019.

2. Considering severe stress in Micro, Small and Medium Enterprises (MSME) sectors, Framework for revival and rehabilitation ofMicro,Small and Medium Enterprises and one time restructuring of MSME, formulated in terms of RBI guidelines and has been put in place for resolution of stressed asset under these sectors.

3. As a part of stressed asset management, default assets Rs.5 crore and above weekly reporting done to RBI at Central Repository of Information on Large Credit (CRILC) platform and monitored on daily basis.

4. NPA Tracker through mobile application has been introduced for monitoring stressed and NPA accounts at base level.

To improve upon functioning at the grass root level,bank has devised furtherfollowingstrategic policy and guidelines:

a) Operational guidelines for Credit Monitoring has been updated and put in place on 27.07.2018 after obtaining approval of the Board.

b) Policy for empanelment of TEV consultants has been revised and put in place on 04.05.2018.

c) Based on the feedback received from field functionaries and following the guidelines of Reserve Bank of India (RBI), thirty Seven (37) numbers of circulars issued on effective credit monitoring during Financial Year (FY) 2018-19.

d) Engagement of Agencies for Specialized Monitoring and effective monitoring of Large Borrowal accounts with exposure above Rs.250.00 crore has been introduced on 15.02.2019 after obtaining approval of the Board.

e) Guidelines for empanelment and appointment of Stock & Book Debt auditors has been revised and put in place on 10.12.2018.

f) Stressed accounts of Rs.5.00 crore and above was directly monitored by High Power Committee (HPC), headed by Executive Director (ED) on fortnightly basis.

15. RISK MANAGEMENT:

The Score of our Bank under EASE index under PSB Reform Agenda has improved. As on 31.12.2018, our Bank’s position is 11th among all PSBs.

Bank has a Contingency Funding Plan to manage a range of scenarios of severe liquidity stress. The funding plan contains the details of potential contingency sources, estimated amount which can be drawn from these sources, lead time needed and procedure detailing when and how each of the actions will be activated.

In order to bring our Bank out of Prompt Corrective Action (PCA), the department in consultation with other Corporate Department, has initiated various Turn Around Strategies and Action Plans. The Strategies are being implemented by the functional Departments in a time bound manner.

The risk culture in Bank is being developed by the Department by conducting in- house Training / workshop programme related to Risk Management in Bank, from time to time.

The Department has come up with a monthly Bulletin namely “The Risk Mirror”, containing latest topics on Risk Management in Bank.

The Department has developed Standard Operating Procedure (SOP) on Fraud Risk, Risk Mitigation Plan (RMP) under Risk Based supervision by RBI, Credit Audit and PCA.

Best practices at Industry level in Credit & Operational risk areas have been identified and their implementation in the Bank in a time- bound manner has been initiated. All the Policies of our Bank have been revisited / reviewed.

Root cause analysis of frauds/ large value NPA accounts is being carried out. Necessary changes in the respective policies / system & procedures to curb the recurrences of fraud/slippage are being done.

Our pricing of loan to Corporate Borrowers is linked with RAROC document. The risk appetite of the Bank on different segments is also captured in ICAAP Document.

The online module for Credit Audit system has been implemented

16. INFORMATION TECHNOLOGY & ALTERNATIVE DELIVERY CHANNELS:

A. New Projects/Applications launched in Current Financial Year

1. Near Disaster Recovery (NDR)- Implementation of NDR site has been completed on 12th December, 2018 for zero data loss during exigencies and to enable quick recovery and continuity of critical business operations.

2. ATMs/Debit Cards -

- Introduction of NFC enabled Contactless Debit Card equipped with NCMC functionality.

- Implementation of Fraud Risk Management (FRM) Solution at ATM Switch level.

- SMS to customers on decline of Ecommerce transaction using new Debit Card with Printed PIN (as First time usage in ATM is required)

3. M-banking

- Introduction of UCO container app--having Mobile banking, UPI, UCOPay , mpassbook, UCOSecure together

- Implementation of Cluster app for assistance in Loan Recovery efforts

- BHIM UCO UPI app made available in Apple Store for iPhone / iPad users.

- BBPS pre-login implementation with URL https:// bbps.ucobank.com.

- Upgradation of UPI app to UPI 2.0

- Implementation of EASE features like FD Closure, RD closure, PAN seeding, submission of Form 15G/H, Enrolment for Pradhan Mantri Suraksha Bima/ Jeevan Jyoti Yojana, TDS/Form 16 certificate issuance etc.

4. E-Banking

- Implementation of EASE features like 15G/15H form submission, Issuance of loan interest certificate, launch/ follow up of compliants, TDS/Form 16 certificate issuance etc.

- Maharastra GRAS Treasury integration for collection of Maharashtra Tax

- Transactional Email alert to customer’s registered email id.

- Facility of online transaction to Sukanya Samridhi Yojna through e-banking

- Nomination facility feature implemented in e-banking for Online FD opened .

- 21 new college/school have been added in Smarty Pay module for collection of Fee/funds.

B. Performance/Feature enhancement of existing projects

1. In-house software development and CBS Customizations:

- Application Software Developments

- Implementation of ONLINE module for One Time Settlement (OTS) of bad loan through our Bank’s website for processing of OTS application of any amount.

- Whistle Blower Module under HRMS portal for employees to lodge financial and non-financial complains.

- The UCO Employee Share Purchase Scheme (ESPS) 2019 application was developed for processing of employees DEMAT a/c opening applications, processing of Equity share applications.

- Online Portal for customer for reporting unauthorized transaction by customers.

- Development of online application module for Retirees to apply Medical Insurance as per the guidelines provided by the IBA

- Development of Provident Fund (PF) Management module in HRMS application for settlement of PF/ Pension optee after retirement for Head Office PF Department with Dual authentication (Maker & Checker) system

- Customisations in CBS Environment

- Implementation of Motor Accident annuity deposit module in FINACLE towards disbursement of compensation to the beneficiaries of motor vehicle road accidents

- Incorporation of additional security features such as Random number (Secret Code) and Sequence number in each cheque leaf of personalized chequebook.

- Customizations for Dual Aadhaar authentication for AEPS SHG Transactions.

2. Grid Cheque Truncation System & NACH:

As on 31.03.2019, 465 centres are live under CTS under three Grids (Northern Grid - 132 centres, Southern Grid - 200 centres & Western Grid -124 centres).

3. Lending Automation Processing System (LAPS):

- Incorporation of 7 new retail schemes (UCO top-up/Gold/ Securities/Two Wheeler/Shopper/Rent/Property Loan) in LAPS.

- Implementation of facility to pull Credit Information Report (CIR) from CIBIL & CRIF Highmark of the customer thereby getting to know the credit history of the prospective borrower.

- Integration of LAPS with Vidya Lakshmi portal (VLP) for receiving education loans from online applications applied by the student/borrower.

- Implementation of multiple channels, multiple ports, multiple Accounts for ADC channel for smoother transaction to cater to increasing volume of data through ATM, UPI, IMPS, NPCI, NFS, PFMS channels.

4. Government Business Module (GBM):

- All the branches are enabled to handle Public Provident Fund (PPF) scheme with full functionality including Intersol transactions.

- CBDT is enabled in 308 branches and CBIC is enabled in 26 branches.

- State taxes of West Bengal and Odisha are enabled in both offline and online mode and the data put together is submitted to RBI in the e-kuber file format.

- Pensioner can submit his/her Life and other certificates from any branch as GBM has the inter sol certificate submission feature with acknowledgement.

- Aadhaar number can be seeded in GBM for Pension and PPF accounts.

5. ATM:

- As on 31.03.2019, Bank has 2,358 ATMs (Onsite - 2,047 and Offsite - 311). Department has taken below mentioned initiatives in the area of ATMs during FY 2018-19 -

- EMV Enabled ATMs migration completed

- Closure of all loss making/ low hit ATM sites to reduce operational cost

- Relocation of ATMs from low hit sites to new potential sites where more hit/ revenue can be achieved.

- Replacement of all obsolete ATMs ,which undergo frequent breakdown with new ATM machines with latest configuration

- Modification in existing ATMs to get them updated with latest Anti fraud measures

- To simplify the process for collecting reconciliation report from zones and branches a portal (name as Unified Portal For ATM Reconciliation Report) developed for submission of monthly ATM recon/ cash status.

- Procurement and installation of 500 ATMs

6. Network:

- Internet access in controlled environment using Proxy solution in all branches and offices

- Successfully provided network through 4G LTE (Wireless) for Mobile ATM during Kumbh Mela & Saras Mela.

- For improving connectivity of VSAT branches, pool Bandwidth has been increased.

7. Call Centre:

- Function of call centre improved by increasing number of agents. Abandoned call percentage decreased to markable point.

8. Official Facebook/Twitter:

- Creation of Bank’s official Facebook and Twitter pages and YouTube Channel for promotion of digital products of bank to customers

9. SWIFT/SFMS:

- Implementation of STP (Straight Through Processing) between SWIFT and Finacle

- Implementation of STP between Finacle and SFMS for outward LC/BG messages.

10. BHIM Aadhaar Pay:

- Bank has successfully implemented Payable and Receivables for BHIM Aadhaar Transactions.

- On boarding of Bank on “Auth 2.0” Platform for usage of Registered Devices after certification with NPCI.

11. Bharat QR:

- Bank has successfully implemented Bharat QR v 1.1 and subsequently v 4.0.

17. CISO OFFICE:

- Bank has Cyber Crisis Management Plan in place to ensure rapid identification, information exchange, swift response and remedial actions to mitigate and recover from cyber threats impacting critical business functions.

- Bank has Cyber Security Policy and Information Security Policy in place to provide direction and support for cyber security in accordance with business requirements, relevant laws and regulations.

- Cyber risk awareness workshops and programmes have been conducted for employees for disseminating awareness at different user level.

- Table top exercises and mock drills have been carried out to assess the preparedness and efficiency of Branches and Offices in reporting cyber incidents.

- Cyber security best practices and safety tipsare shared through Facebook and Twitter to help customers be aware of the challenges of cyber risks and threats.

- Cyber Security Handbook has been published to spread awareness amongst employees with different types of cyber security breaches, their consequences and best practices.

- Employee awareness has also been enhanced through various kind of advisory viz Cyber Security Thought of the Week series, Cyber Security words covering alphabets from A to Z, Be Aware Be Secure Series. Information Security Awareness Month has also been celebrated in August 2018 where regularly pictorial messages were circulated to all employees.

18. CUSTOMER SERVICE:

Standardised Public Grievance Redressal System (SPGRS) is available for the public to lodge complaints online. 98.30% of the total complaints received during the financial year 2018-19 have been redressed. Under RTI, a total of 1125 applications were received, during FY 2018-19. There were 220 appeals made under RTI.

19. MIS & ADF Cell:

Bank is having Management Information System (MIS) vertical for internal reporting as well as reporting to regulatory and various statutory bodies etc.

MIS-ADF is integrated with all the discrete systems available in our Bank, viz. Finacle (Domestic and Overseas), GBM, LAPS, Domestic Treasury, E-Banking, Mobile Banking, M-Wallet etc. and performing as a one stop solution for providing information to the organization for the purpose of data analysis, strategic planning, evolving the business plans, its implementations and TOP Management level decision making.

Bank has developed reporting system under MIS ADF for submission of RBI returns/data viz. BSR, SIBC, NRDCSR etc. without any manual intervention through XBRL platform. Internal reports made available for business verticals - Credit, Risk Management, Recovery, Treasury, International, Overseas and Finance for control, monitoring and reporting day to day business parameters.

Digital channel performance reporting to Ministry of Electronics & Technology, Govt. of India on daily basis. Bank is reporting data related to consumer, commercial and SHG segments on daily/ monthly basis to different Credit Bureau like CIBIL, CRIF Highmark, Equifax.

Implementation of Centralised Information Management System (CIMS) project launched by RBI is under process. Under this project 117 RBI returns to be automated in a time bound manner.

20. CORPORATE COMMUNICATION:

Bank reinforces strong corporate reputations through its high degree of transparency and consistency in communication with stakeholders and also disseminates timely information with clarity, coherence and credibility including information through the websites of the Bank on real-time basis. Bank aims to inform, persuade and involve one and all in the activities and growth through sustained, consistent and relevant messages and using a judicious mix of both external and internal communication tools.

Bank has taken up multiple initiatives through various channels namely Print Media, Outdoor Media, Sponsorship of different events, CSR activities and dissemination of requisite information to stakeholders to build and maintain the brand-image of a world class financial institution.

a) Publicity Campaigns : Print Media:

Print Media is an effective medium to connect to masses. Corporate Communications Department has utilized it effectively by carrying out intensified and vigorous publicity campaigns throughout the FY 2018-19. Liability products and Asset products viz. UCO Home Loan, UCO Car Loan, Monsoon Offer & Festival offer for UCO Home & Car loan, PMMY, Stand Up India, psbloanin59minutes, KCC etc. were prominently promoted during the period.

With a thrust on routing the transactions through Alternate Delivery Channels (ADC) and making banking more personalized and customer-oriented, UCO Pay , E-Banking etc. were widely publicized through Print Media during the period.

Publication of financial results in leading national and local dailies was also carried through Print Media.

Outdoor Media:

The contribution of Outward Media towards establishing a strong brand value in the market cannot be underestimated. Outdoor media publicity is basically done through hoardings, kiosks, wall paintings, banners, sponsorship and beautification of gardens/ parks etc. Proposals related to sponsorship of events, health check-up camps, sporting events etc. are also done from time to time.

Rural Publicity:

Rural publicity is an integral part of publicity-campaign for UCO Bank having pan-India and strong rural presence. Bank has promoted and monitored various rural publicity campaigns through zonal offices located across the country. Wall-Paintings, announcements by Rickshaw, Loan fairs etc. were carried out for promoting awareness about products and services offered by the Bank.

b) Celebration of 76th Foundation Day:

The Bank completed 75th glorious years of service to the nation on 6th January, 2019. The occasion was celebrated with much enthusiasm and vigor across the country and overseas centers. Employees and executives of the Bank jubilantly participated in a Walkathon from Head Office II, Salt Lake to Central Staff College. Zonal Offices and branches across the country organised different activities viz. planting saplings, blood-donation camp, health check-up camp etc. A booklet on Cyber Security & Updated M Banking App were also launched by the MD & CEO on this auspicious occasion.

c) Public Relations:

- Press Meet :

Dissemination of information and coverage of important events and occasions viz. Financial Results, Awards & Recognition, Opening of new branch is prerequisite for strengthening the public relations. During the FY 2018-19, Corporate Communications Department organised Press Meets for declaration of quarterly and yearly financial results and other important events.

Department has also arranged for press-release of financial results, AGM & EGMs and other important events in leading national and local newspapers throughout the Financial Year.

Corporate Social Responsibility :

Bank believes that carrying out CSR activities help in tangible value creation. Moreover, CSR creates a positive image in the mind of customers and society at large. This creates a sense of belongingness and loyalty in existing and prospective customers.

d) UCO TOWER :

Bank is also publishing the in-house magazine “UCO Tower” where all the constituents are encouraged to participate. UCO Tower also aims to create awareness of all happenings and activities of the Bank among all employees.

21. HUMAN RESOURCE:

Human resources Management Department Comprises of various Cells looking after different segments of the department. All these cells worked in tandem during FY 2018-19 to create a harmonious and productive work environment. Training and workshops were organised for improving/enhancing the skills and knowledge of the staff.

21.1. Manpower:

The total staff strength as on 31st March, 2019 stood at 23133, including employees serving overseas. The total staff strength comprises of 12088 Officers, 7456 Clerks, 1671 Subordinate Staff and 1918 House-keeping Staff. The percentage of Scheduled Castes (4759) & Scheduled tribes (1946) taken together in the total staff strength is 28.98%. Besides, there are 4261 OBC employees in service of the Bank as on 31st March, 2019. 1486 employees belong to the Minority Communities. The total workforce constitutes 25.02% women employees (5787) as of 31st March, 2019.

21.2. IR Negotiation Cell:

During the period, the Industrial Relations climate in the Bank remained cordial between the Management and the Unions/ Associations. Meetings and discussions were held with Unions/ Associations at periodic intervals through mutual co-operative attitude and respect during the financial year 2018-19.

21.3. Reservation Cell:

Bank has been implementing reservation policy of Government of India. Reservation and other relaxations and concessions extended to SC/ST/OBC / Differently Abled Persons and ExServicemen employees of our bank are strictly adhered. During internal promotion process for the FY 2018-19, as per GOI guidelines, Bank has imparted Pre-promotion Training to 928 employees (SC - 337, ST - 178, OBC - 391 and PH - 22) belonging to SC/ST/OBC and PWDA category. Our Bank, being the Nodal Agency in two state i.e. Shimla and Odisha, provides pre -recruitment training. In order to address the issues of SC/ST and OBC employees of the bank, regular periodical meetings are being held at Apex level as well as at Zonal office level (where reservation roster is maintained) with Welfare Association of such employees. The grievances of such category of employees are heard in such meetings and subsequently grievances are redressed as per Bank’s policy guidelines.

The reservation cell hosted a review meeting with Dr. Nand Kumar Sai, the Hon’ble Chairman (Status of Union Cabinet Minister), National Commission for Scheduled Tribes at Kolkata on 25.02.2019. Two officials from DFS along with other dignitaries also participated in the meeting.

21.4. Recruitment Cell:

Bank has recruited 465 Probationary Officers during the year 2018-19. These 465 Probationary Officers comprise of 77 SCs, 24 STs, 168 OBCs, 10 VIs, 2HIs and 6 OCs, out of which 131 are females. 541 clerks have also been recruited during the year 2018-19 of which 85 SCs, 60 STs, 112 OBCs, 4VIs, 1HIs, 5OCs and 57 EXSs out of which 156 are females.Bank also proposes to recruit 18 Probationary Officers and 46 Clerks under CRP VII reserve list for 2018-19 and 550 Probationary Officers and 600 clerks for 2019-20 under CRP VIII. Bank has initiated the process for appointment of Internal Ombudsman on contractual basis.

21.5. Training Cell:

Our Organization, being a part of one of the most dynamic industries, has to keep up with the constantly changing environment by continuously updating its workforce with various Training Programmes in the concerned Fields. Training programmes are held aligning the corporate vision, mission and fulfilling the expectations of the Top Management.

During the FY 2018-19, Several important modifications were carried out in Online Training Management Module in HRMS to stabilize the system and transforming it into a robust MIS platform. Policy on Capacity Building through Certified courses was formulated and being implemented with vigour to encourage our Staff members by payment of honorarium/incentives to them. In FY 2018-19, Total of 334 employees were paid honorarium/ incentive for passing Bank approved courses as per RBI guidelines on Capacity Building.

Bank has already initiated the process of implementing ELearning for its employees to ensure continuous development of Human Resources through effective learning process. In FY 2018-19, 197 Executives, 9058 Officers, 3085 Clerks and 402 SubStaffs were trained in Internal Training programmes conducted at our Central Staff College (CSC) situated at Kolkata and 7 Regional Training Centres situated at Durgapur, Bhubaneswar, Bhopal, Chennai, Ahmedabad, Jaipur and Chandigarh. Under Locational/Camp based Training programmes conducted at Zonal Level, 3857 employees were trained. This year also we continue to sponsor our Executives & Officers in reputed External Training Institutes like NIBM, ASCI, IIBM, etc.in which 565 employees were trained in External Training programmes which helped them in acquiring a global competitive edge.

FY 2018-19 witnessed the introduction of some important Training programmes like Cyber Security and Cyber Risk Awareness programmes for Senior Mgmt as well as Top Management, Risk Management programme for Risk Officers, Workshop for Officers/ Executives handling Iran Business, GST & MSME related Workshops. We are continuously evolving our Training Department with the adoption of latest inventions to develop sustainable solutions so as to fulfil the desired Corporate expectations.

22. AUDIT & INSPECTION:

After the introduction of Risk Based Supervision of Banks by RBI and adoption of Basel-III norms, the function of Inspection & Audit has undergone a sea change. Along with traditional functions of ensuring proper follow up of policies & procedures, strengthening the internal control, the Inspection & audit measures the risk the Bank faces in day to day operations. Hence the policies, process followed up by the Inspection & audit department have undergone significant changes.

The risk based regular inspection of branches and other service outlets have been adopted since 2014. The Bank has switched over to Risk based online Concurrent Audit and Management Audit Modules.

The department has achieved ZERO overdue reports in RBIA as on 31-03-2019.

The Offsite surveillance Cell in the Inspection Department has been strengthened. The system generated alerts are being generated in 21 parameters. The disposal of alerts by branches has reached 86%. Apart from alert generation this cell is also monitoring various internal accounts, suspicious transactions through back-end data mining.

During the year RBIA has been conducted in 2191 branches. 878 branches / offices are under Concurrent Audit.

23. VIGILANCE DEPARTMENT:

I. Preventive Vigilance initiative taken by the organisation

Following preventive vigilance initiatives have been taken by the Bank during the year 2018-19.

- Dormant accounts are made active by the respective BH/ ABH on receipt of application and KYC documents of customers and report on dormant accounts activation is generated on the next day for perusal of the Branch Head.

- The Balance sheets and other financial statements submitted by the borrower companies to the bank are compared with the one submitted with the Registrar of the Companies (ROC)

- Antecedents of the prospective/ existing borrowers checked with CFR portal of RBI before taking any credit decision.

- Periodic investigations are done in suspicious transaction/ activities at branch level by deploying Field Vigilance Officer.

- Programmes on vigilance awareness programs are undertaken at periodic interval at branches / offices to create awareness among the staff members/ customers/ general Public.

II. Systemic improvements undertaken by the organization

- Flash messages on preventive vigilance measures displayed as a ticker in CBS platform and on the intranet site of the bank to avert frauds.

- Use of Bio-metric access to office/ CBS system has been introduced to prevent possible fraud threat.

- Additional security features in CTS cheque is being incorporated to prevent unauthorised debit from customers account by cloned cheque.

- To further stem the possibility of fraud in the remittance through RTGS/ NEFT or payment of outstation cheques, the process of verification which used to take place at a later stage/ at the end of day, had been added with the process as a second tier confirmation only after which transaction will take place.

- Instructions were given to Strategic Planning Department for uploading the latest specimen card in Finacle System, masking the old specimen signature, so as to avoid any confusion about which card is the latest.

- Under our advice an offsite surveillance cell was constituted at Head Office, Inspection Department to look after the accounts of the staff for any suspicious transactions.

III. Initiative taken by the organization for strengthening Whistle Blower Mechanism

Whistle Blower portal has been introduced in bank’s internal HRMS portal (www.ucoonline.in) for staff members for uploading/ sharing of details of unethical/ malafide misconducts by any employee/ group of employees so that timely corrective action may be taken.

All the complaints made through Whistle Blower portal are accessible to the Chief Vigilance Officer of the Bank only and not to anyone else.

Confidentiality of the contents and identity of the complainant are not disclosed to anyone.

IV. Initiative taken by the organization for inculcating ethical behavior in the organization during the year 2018-19

Human Resource Department issues circulars/ notices from time to time advising all the staff members on ethical behavior within the officer premises.

V. Workshop/ training programmes undertaken in area of vigilance

The following workshops/ training programmes have been conducted in area of vigilance during the current year:

Name of the Program

Institute

Duration

One day Workshop for field Vigilance Officer (FVOs)

Central Staff College

4th August 2018

Kolkata

Workshop on Vigilance Awareness

Regional Training Centre Bhubaneswar

3rd November 2018

Positive Approach to Vigilance

Central Staff College

9th -10th February 2018

One Day work shop on Preventive

Vigilance and Disciplinary matters

Central Staff College

7th Jan 2019

Apart from that Bank has introduced one session on preventive vigilance and case study in all the training programmes conducted at Central Staff College and other Regional Training Centres across the country.

In addition Bank has nominated officers/ executives to different training programmes on vigilance matters organised by CBI Academy, Ghaziabad, International Management School, Kolkata, NIBM Pune and in other organizations.

24. OFFICIAL LANGUAGE:

The Bank was proactive in implementation of the Official Language policy of the Union Government. The Bank also made suitable follow-up for implementation of the Annual Programme Hindi issued by Official Language Department, Ministry of Home Affairs, Government of India with regard to the use of official Language. During the period under review, the sub committees of the Parliamentary Committee on Official Language visited ourSri Nagar branch under our Deharadun Zone on 07.05.2018.

Town Official Language Implementation Committee, Kolkata was awarded First Prize amongst the TOLICs in Eastern Region by Official Language Department, Ministry of Home Affairs, Government of India for excellence in implementation of Official Language during the Year 2017-18. UCO Bank, Head Officeis the convener of this committee. Varanasi, Indore, Dharmshala, Hyderabad, Jodhpur, Pune, Begaluru, Raipur and Bhubaneswar Zonal Offices and Allahabad and Ghazipur branches under Varanasi Zone as well as Himatnagar branch, under Ahmedabad Zone bagged prizes for their commendable performance in the field of Official Languages implementation in their respective cities. Besides, Varanasi Zone’s e-magazine Kashi Amrit, Chandigarh Zone’s e-Magazine Sankalp, Indore Zone’s e-magazine Malavanchal and New Delhi Zone’s e-magazine UCO Indraprastha have been awarded by the respective TOLICs.

Under the aegis of Town Official Language Implementation Committee (Bank), Kolkata an Advanced Translation Training Programme was organised from 10.12.2018 to 14.12.2018 with support from Central Translation Bureau, Department of Official Language, Home Ministry, and Government of India. The programme was organised for the OL officers of the member Banks at our Central Staff College, Kolkata. A State-level Hindi seminar on “Role of Indian Languages in Digital India” was organized in Patna on 5.12.2018 by the Zonal Office, Patna.

An All India UCO Bank Inter-Bank Hindi Essay Competition was organized on “Contribution of PSU Banks to the Economy of India” in February, 2019. The Official Language Conference was organized in Kolkata on March 15, 2019 by the Town Official Language Implementation Committee (Bank). It is worth mentioning that UCO bank was the convener of this committee.

Zonal Office, Bhagalpur has been made Convener of Town Official Language Implementation Committee, Bhagalpur by Department of Official Language, Ministry of Home Affairs, and Government of India.

25. COMPLIANCE DEPARTMENT:

Our Bank carries out the Compliance Functions mandated by the Reserve Bank of India with enormous dedication. An enviable level of customer service is being ensured at all levels of Bank’s Network. Emphasis is being laid on continuous perfection in reporting of KYC/AML issues, STRs (Suspicious Transactions Report), CTRs (Cash Transaction Reports), CBWTRs (Cross Border Wire Transfer Reports, CFT (Combating of Finance for Terrorism), etc., to the Regulators, Govt. Of India Authorities, SEBI, FIU-IND, under PMLA Act 2002, as Reporting Entity (RE).

Compliance & KYC/AML Policies are being revisited / reviewed periodically and approved by the Board of Directors to mitigate breaches in Compliance Functions if any. During FY 2018-19, Compliance Test Checking (CTC) was undertaken in 843 Branches and all Branches/Offices have been sensitized about the need for ensuring timely Compliance functions. Critical issues are being discussed at appropriate levels before being reported to the Regulatory/Statutory Authorities, thus enhancing the system efficacy.

Periodic interactions with Risk Management Department and Audit & Inspection Department, is being done on critical control and compliance functions as a part of effective Risk Management and development of robust Compliance Culture.

26. FUTURE PLAN OF BANK:

Department of Financial Service is monitoring performance of all public sector Banks through Enhanced Access and Service Excellence (EASE) . To improve performance in EASE Index among other banks is the main objective of our bank. Bank has Sankalp for the year 2019-20 to come out of PCA and start earning Profit. For this Bank has prepared different strategies focussing more on i) Recovery ii) Resources & iii) Retail, Agriculture and MSME(RAM) .Recovery of at least Rs.2000 crore per quarter through relentless efforts, and Bank mantra is recovery, Recovery and recovery. Zero tolerance on customer complaints through, strict adherence to compliance and control system and deepening products per customer through cross selling our banking products and also marketing of Alternate delivery channels. The future Plan of bank is reflected in SANKALP Rs.2020’ which envisages turn around of the bank ensuring profitability this financial year.

Customer acquisition, Promoting Govt. Flagship programme through Financial Inclusion, Revamping Credit Monitoring System and restricting Slippages, through different measures are other important areas of Banks concern.

HR strategy through differentiated Banking, better employee relationship with better productivity and improved customer service will be the priority of the bank for 2019-20.

27. Board of Directors:

27.1. Corporate Governance:

Bank firmly believes in and has consistently practiced good corporate governance woven around its core values of transparency, professionalism and accountability. By constantly focusing on these aspects in its day-to-day operations, the Bank strives to enhance shareholders’ value. The Bank being committed to the principles of good governance, its Board of Directors has formed various committees of the Board to monitor every aspect of Bank’s business. The systems and business processes of the Bank are continuously reviewed at various levels for identifying and strengthening areas of weaknesses, if any. The Directors of the Bank believe that good governance is the key to earn trust, loyalty and goodwill of clients, business associates, employees and investors and also to have respectable position in the society at large.

27.2. Changes in the Board of Directors:

- Mr Atul Kumar Goel is appointed as Managing Director & CEO on the Board of UCO Bank w.e.f November 02, 2018 for a period of three years.

- Mr Anand Madhukar was nominated as Government Nominee Director on the Board of UCO Bank w.e.f December 04, 2018 till further orders.

- Mr Amit Chatterjee was nominated as Part-time Non-official Director on the Board of the Bank w.e.f March 01, 2019 for a period of one year.

27.3.Meetings of the Board of Directors:

During the FY 2018-19, fourteen meetings of the Board of Directors were held. The number of meetings of various Committees of the Board held during the period is given below:

Sl.No

Name of the Committee

No. of meetings held

1.

Management Committee of the Board

11

2.

Audit Committee of the Board

8

3.

Risk Management Committee of Board

4

4.

Stake holders’ Relationship Committee of the Board

2

5.

Share Transfer Committee of the Board

2

6.

Special Committee of the Board for Monitoring Large Value Frauds

3

7.

Customer Service Committee of the Board

4

8.

Committee on HR Related Issues of the Bank (HR Committee)

1

9.

Remuneration Committee of the Board

1

10.

IT Strategy Committee of the Board

4

11.

Board Level Committee for Monitoring Recovery in NPA Accounts

6

12.

Committee of the Board for Disposal of Appeal Cases

6

13.

Review Committee (Wilful Defaulters)

5

14.

Committee of Directors on ESPS

1

15.

Nomination Committee of the Board

0

27.4. Statement of Directors’ Responsibility:

The Board of Directors confirm that in the preparation of the annual accounts for the year ended March 31, 2019, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any. The accounting policies framed in accordance with the guidelines of Reserve Bank of India, were consistently applied. Reasonable and prudent judgements and estimates were made so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit of the Bank for the year ended March 31, 2019. Proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of applicable laws governing banks in India; and the accounts have been prepared on an on-going basis. Internal financial controls have been laid down by the bank for ensuring orderly conduct of business.

28. Acknowledgements:

The Board welcomes the new Directors, Mr K Rajivan Nair, Dr. Asish Saha and looks forward to their valuable inputs towards the growth of the Bank. The Directors remain thankful to the Government of India, Reserve Bank of India and other regulatory authorities for their support and valuable guidance. The Board also thanks other financial institutions and correspondent banks for their co-operation.

The Board of Directors expresses its gratitude to the loyal customers for their trust and continuous patronage of the Bank. The Board also thanks the staff unions/associations and shareholders of the Bank for the support extended by them. The Directors place on record their deep appreciation of the dedication shown by each employee of the Bank.

By order of the Board of Directors

sd/-

(A. K Goel)

Place: Kolkata Managing Director &

Place: Kothlkata Chief Executive Officer

Date: 28th May, 2019


Mar 31, 2018

I PERFORMANCE OF THE BANK DURING 2017-18

1. UCO’s Delivery Channels

1.1. BRICK AND MORTAR NETWORK:

Bank has a geographically well - spread branch network in India and also has presence Abroad. As of 31.03.2018, Bank has 3 Circle Offices, 42 Zones and 3104 domestic branches and 4 overseas branches (two each in Singapore and Hong-Kong). Bank’s representative Office has been established in Tehran, Iran which is functional w.e.f. 25.03.2017.

The Global branch network over 5 years is as under:- (Global)

March, Rs.14

March Rs.15

March Rs.16

March Rs.17

/March Rs.18

Branch 2894

3020

3077

3104

3108

The population category-wise break-up of domestic branches as of 31.03.2017 and 31.03.2018 is given below.

1.2. The domestic branches include 5 Flagship Corporate branches, 7 Asset Management branches, 4 Service branches functioning independently and 1 Central Pension Processing Centre, 1 Integrated Treasury Branch. Further, 28 Retail Loan Hubs and 72 Currency Chests, 54 City Back offices are also functioning across the country, attached to the major city branches of various centres.

2. Business Profile

2.1 GLOBAL

Bank’s Global Deposits stood at Rs.1,81,849 crore and gross global advances at Rs.1,23,990 crore as on 31.3.2018. Total Business of Bank was Rs.3,05,838 crore as on 31.3.2018 compared to Rs.3,32,940 crore on 31.3.2017.

2.2 DOMESTIC

Domestic Deposits of bank were Rs.1,72,017 crore as on 31.3.2018 against Rs.1,85,102 crore as on 31.3.2017, Gross advances were Rs.1,08,746 crore compared to Rs.1,12,917crore during the above period. Total deposits of the bank declined due to the shedding of bulk deposits and advances declined because of some selective infrastructure sectors declared as stress.

Saving deposits have grown by 6.39% from Rs.51,456 crore to Rs.54,746 crore as on 31.3.2018 . Current Deposits stood at Rs.9330 crore compared to Rs.11323 as on 31.3.2017. Decline in Current deposits is due to decline in Iran deposits of the Bank. The share of CASA deposits to total domestic deposits has increased from 33.92% in 31.3.2017 to 37.25% in 31.3.2018.CASA deposits of the Bank have improved from Rs.62,779 crore to Rs.64,076 crore as of 31.3.2018.

2.3 Financial Performance:

During the FY 2017-18, Bank posted a Net loss of Rs.4436 crore compared to Rs.1851 crore for the previous year FY 2016-17. Net loss of the bank increased due to increase in provisioning in FY 2017-18. Operating profit of Bank stood at Rs.1334 crore. Total income declined by Rs.3299 crore while total expenses of the bank also declined by Rs.1707 crore in FY 17-18. During the year Bank made provision of Rs.5771 crore as compared to Rs.4777 crore in FY16-17. Cost of deposits declined to 5.37% in FY 17-18 from 5.83% in FY 16-17. Interest income of the Bank declined by Rs.2306 crore. Cost income ratio of the Bank stood at 68.57% in FY 17-18 as against 50.67% in FY 16-17.CD ratio has improved from 65.41% to 68.18% during the period.

3. TREASURY & INTERNATIONAL

Bank has been performing its Treasury & Investment Operations by keeping track of the macroeconomic scenario and market developments in accordance with the regulatory guidelines issued by Reserve Bank of India from time to time as also the Bank’s Domestic Investment Policy approved by the Board. In the changed scenario, where state of the art technology is providing the cutting-edge in Treasury & Risk Management, Bank has also embarked upon a globally deployable Integrated Treasury Management Solution for an effective and efficient way to optimize resource utilization and maximize returns on investment and trading. In order to mitigate risk and proper balance sheet management, the bank has gone for interest rate swap transactions.

The Domestic Investment of the Bank during the year 2017-18 declined by 3.64% from Rs.72628 crore as on 31.03.2017 to Rs.69987 crore as on 31.03.2018.The SLR Investment of the Bank declined by 12.43% from Rs.59921 crore as on 31.03.2017 to Rs.52471 crore as on 31.03.2018 mainly due to sale of Govt. securities to manage market risk. The Non SLR Investment (Domestic) grew by 37.85% from Rs.12707 crore as on 31.03.2017 to Rs.17516 crore as on 31.03.2018 mainly due to Recapitalization Bonds to the tune of Rs.5132 crore received from Govt. of India. During the year 2017-18, the bank has earned profit from investment operations amounting to Rs.6005.45 crore vis-a-vis Rs.7507.47 crore during the year 2016-17, thereby registering a decrease of 20% y-o-y basis due to adverse market movement on account of rise in yield.

During the year 2017-18, the Interest Income from domestic investment declined by 9.82% from Rs.5736.41 crore as on 31.03.2017 to Rs.5173.03 crore as on 31.03.2018 mainly due to decrease in the domestic Investment portfolio.

3.1 Export Finance:

With 66 ‘B’Category Branches across India, UCO Bank is committed to actively cater to the needs of its Exporters. Total Merchant Turnover of the Bank during the Financial Year ended 31st March, 2018 stood at Rs.40,535 crore which is 18.61 % higher than the previous year. Bank’s Export credit outstanding during 31st March, 2018 is Rs.1,977.66 crore, registering a decline of 7.32% over 31st March, 2017. ‘UCO Bank,’has been facilitating Bi-lateral Banking Trade transactions with Iran under “Rupee Payment Mechanism” since Feb, 2012 as mandated by Govt. of India/RBI, thereby facilitating Indian Exporters, exporting permissible goods and services to Iran.

4. SOCIAL BANKING

4.1 Priority Sector Advances:

The Bank has been showing significant performance in lending to Priority Sector over the years and has been effectively servicing the priority sector and agriculture sector with its vast network of rural and semi-urban branches.

As on 31.03.2018, the Priority Sector Advances of the Bank stood at Rs.54,698 crore constituting 41.45% of Adjusted Net Bank Credit (ANBC).

4.1.1 Agriculture Advances:

Total Agriculture Advances of the Bank stood at Rs.20,876 crore constituting 15.82% of ANBC. Direct Agriculture stood at Rs.13,019 crore constituting 9.87% of ANBC.

4.1.3 Advances to Weaker Sections:

Advances to Weaker Section stood at Rs.15396 crore as of 31st March, 2018 constituting 11.66% of ANBC.

4.1.4 Minority Community Advances:

Total Minority Community Advances of the Bank as on 31.03.2018 stood at Rs.8208 crore constituting 15% of Priority Sector Advances.

5. Unique Schemes:

The Bank has two unique schemes - (1) “UCO Uthaan” for upliftment of BPL families of adopted villages & (2) “UCO Samagra Gramin Vikas Yojna” - Adoption of villages for all-round development.

5.1 UCO Uthaan Scheme: Social-cum-Financial upliftment scheme for BPL families.

Under the Scheme, villages having large number of BPL families are adopted by the Bank through its nearest branch to bring the BPL families out of the clutches of poverty and to bring about a holistic change in the villages. Under the scheme, a holistic development plan of the villages is drawn and followed up for covering areas like education, financing for rural housing, formation of SHG and micro-financing, development of handicrafts & rural artisans and extending finance under DRI Scheme.

The Bank has adopted 31 villages in 10 states i.e. Assam, Bihar, Gujarat, Maharashtra, Odisha, Punjab, Rajasthan, Tamil Nadu, Uttar Pradesh & West Bengal under UCO Uthaan Scheme.

Bank has conducted several financial literacy camps in these villages and has provided financial assistance particularly to BPL families to improve their livelihood, to generate more income so that they come above the poverty line.

By these efforts, 6568 BPL families, in these 31 adopted villages have been provided with credit assistance by Bank to uplift their livelihood in a better way during last 4 years. These BPL families are generating their income by adopting several activities like dairy farming, goat farming, betel leaf cultivation, vegetable growing, cycle repairing, shoe mending, fruit vending, grocery shop, tea stall, beedi making, trolley plying, mason jobs etc.

5. 2 UCO Samagra Gramin Vikas Yojna : For all-round development of villages

The Bank has adopted 10 villages in 6 states i.e. Gujarat, Himachal Pradesh, Odisha, Kerala, Uttar Pradesh & West Bengal for its all-round development under UCO Samagra Gramin Vikas Yojna.

In these villages, Bank has conducted financial literacy camps to educate the villagers, extended financial support to them and has also initiated developmental activities under Corporate Social Responsibility. Under financial assistance, Bank has given General Credit Cards (GCC) to small traders, Artisan Credit Cards (ACC) to artisans, Kisan Credit Cards (KCC) to farmers, loan to SHGs, loan for doing animal husbandry activities, loan to women & SC/ST beneficiaries. Many small traders have started their own business with the support of Bank loan. Through CSR activities, Bank has given Ceiling Fans, Water purifiers to different schools, Steel Almirahs, Books for school library, School uniform for school going children, installation of hand pumps for drinking water in the villages, installation of Solar street lights in the villages, construction of metallic road.

In two villages, out of above 10 villages, Bank has provided doorstep banking facilities to the villagers of these unbanked villages through Mobile Van. The Van visits these two villages on a predetermined day and time during the week and provides all types of banking facilities to the villagers at their doorstep. There has been an increase in the saving habits of the villagers due to this initiative. Through these vans, villagers are also being financially educated.

By these activities, there is an all-round development in the adopted villages and the villagers are very much benefitted.

6.REGIONAL RURAL BANKS (RRBs)

UCO Bank has sponsored two RRBs namely, Bihar Gramin Bank(BGB) head quartered at Begusarai, Bihar and Paschim Banga Gramin Bank (PBGB) head quartered at Howrah, West Bengal with four regional offices each. The RRBs have a total of 606 branches as on 31.03.2018.

6.1 Capital position of RRBs

The total capital composition of Paschim Banga Gramin Bank as on 31.03.2017 stood at Rs.154.51 crore (Govt. Of India), Rs.108.16 crore (UCO) & Rs.46.35 crore (West Bengal State Govt.). Similarly, for Bihar Gramin Bank, it stood at Rs.109.07 crore (Govt. Of India), Rs.76.35 crore (UCO) & Rs.32.73 crore (Bihar State Govt.)

The capital requirement of both the RRBs sponsored by the Bank, to maintain regulatory CRAR of 9% as on 31.3.2018 (unaudited) is estimated to be Rs.178 crore (approximately) . Out of which Bank’s share @35% comes to Rs.62.30 crore. Bank will take up the issue suitably at an appropriate time.

Performance of RRBs as under during 2017-18

6.1 Paschim Banga Gramin Bank:

As per unaudited financial results, total deposits of Paschim Banga Gramin Bank stood at Rs.4762.79 crore as on 31.03.2018, registering growth of 5.17 percent. Total advances reached a level of Rs.2419.01 crore with an annual growth of 8.74 percent as on 31.03.2018. CD ratio stood at 50.79% on 31.03.2018 as against 49.12% on 31.03.2017.

The gross NPAs stood at Rs.474.54 crore as on 31.03.18 vis-a-vis Rs.183.17 crore as on 31.03.2017. Gross NPA ratio stood at 19.62% as on 31.03.2018 as against 8.23% as of 31.03.2017. The net NPA ratio of the RRB stood at 15.63% as on 31.03.2018 as against 5.89% as of 31.03.2017.

Paschim Banga Gramin Bank has registered a net loss of Rs.31.99 crore as on 31.03.2018 as compared to net profit of Rs.14.49 crore as on 31.03.2017, thereby increasing accumulated loss from Rs.68.57 crore to Rs.100.56 crore as on 31.03.2018.

6.1.2 Bihar Gramin Bank:

As per unaudited financial results, total deposits of Bihar Gramin Bank stood at Rs.5367.07 crore as on 31.03.2018, registering growth of 13.13 percent. Total advances reached a level of Rs.3533.78 crore with an annual growth of 12.42 percent as of 31.03.2018. CD ratio stood at 65.84% on 31.03.2018 as against 66.26% on 31.03.2017.

The gross NPAs of the bank stood at Rs.909.99 crore as on 31.03.2018 vis-a-vis Rs.257.16 crore as on 31.03.2017. Gross NPA ratio increased from 8.18 percent as on 31.03.2017 to 25.75 percent as on 31.03.2018. The net NPA ratio has also increased from 6.64 percent as on 31.03.2017 to 20.92 percent as on 31.03.2018.

Bihar Gramin Bank has registered a net loss of Rs.70.26 crore as on 31.03.2018 as compared to net profit of Rs.4.22 crore as on 31.03.2017.

6.1.3 Inclusive Growth

In addition to various initiatives on financial inclusion, the Bank took part in the Pradhan Mantri Awas Yojna launched by Government of India to extend central assistance for the economically weaker section and the low income group for acquiring affordable houses. Bank has signed memorandum of understanding with National Housing Bank for implementation of this scheme. An assistance of Rs.1500 lac is being extended to the eligible borrowers and concession in interest rate @ 6.5% per annum is being provided upfront to reduce EMI and principal loan amount. Our Bank assisted 305 beneficiaries to the tune of Rs.1500.78 lac upto March, 2018.

6.1.4 Corporate Social Responsibility : Bank has taken several programmes/initiatives as a part of Corporate Social Responsibility. Few of these programmes/initiatives are as under:

a) Twenty Seven Rural Self Employment Training Institutes are set up by the Bank in seven states namely Himachal Pradesh, Odisha, Assam, Bihar, Punjab, West Bengal and Rajasthan to impart training and skill up gradation for rural youth with dedicated infrastructure. These institutes are set up by the Bank as a part of the initiative taken up by the Ministry of Rural Development to establish dedicated training Institutions for development of entrepreneurship skills in rural youth. All RSETIs trained 17900 candidates and 7067 beneficiaries have been provided Credit linkage of Rs.1.33 crore during the Financial Year 2017-18.

b) RSETI, Goalpara, Assam was adjudged best performing RSETI among North Eastern & Hilly states for the year 2017-18 and was awarded certificate of excellence on Aajeevika Evam Kushal Vikas Mela held on 5th May, 2018 in Ranchi Jharkhand.

c) Bank under UCO Utthan scheme has adopted 31 villages falling under 26 UCO Branches in 19 Zones of the Bank for the upliftment of BPL families with financial & social intervention.

d) Under the initiative of Reserve Bank of India, the bank has set up 10 CFLs (Centres for Financial Literacy) in 10 Blocks, 5 each in Bhadrak and Dhenkanal district of Odisha. The Bank and NABARD bear the cost of operationalisation of these CFLs in 40:60 ratios.

e) Bank has 34 Financial Literacy Centres across the country and has recruited 28 Financial Literacy Counsellors for conducting Financial Literacy Camps. During Financial Year 2017-18 the Financial Literacy Counsellors have conducted 4755 Financial Literacy Camps thereby spreading Financial Awareness to 259706 participants.

7. Micro, Small & Medium Enterprises (MSME)

Bank recognizes the important role of MSME sector in the economic development of the Country which is also supporting in generating employment opportunities in the Country. The advances under Micro & Small Enterprises (MSE) as on 31.03.2018 stood at Rs.20603 crore and under Micro, Small & Medium Enterprises (MSME), the advances are Rs.23982 crore as on 31.03.2018.

Award to Bank:

UCO Bank was awarded by ASSOCHAM “Fifth ASSOCHAM SMEs Excellence Award - 2017” under the below mentioned category during Dec Rs.17:

UCO Bank, Micro Lending 7.1. New Initiative taken under MSME during FY 2017-18:

- Under different schemes of MSME, the Working Capital limits sanctioned to MSME units shall be assessed at minimum 25% of projected annual sales.

- The working capital limits sanctioned to MSME units that transact digitally with their customers shall be assessed at minimum 30% of projected annual sales. The same has been extended to all GST registered MSMEs units.

- Modification in UCO Commercial Vehicle Loan Scheme for financing taximen, for the purchase of New Taxis, under Mumbai Zone in MOU with M/s Mumbai taximen Unions.

- UCO Trader login day was celebrated on 21st to 23rd Jun 2017 to improve the credit under MSME and credit proposals amounting to Rs.28.74 Crore were sanctioned during the campaign period.

- Department organized a MUDRA Loan campaign from 01.12.2017 to 06.01.2018. With an overwhelming response from the field functionaries, the target of sanctioning of 75000 MUDRA Loan accounts was not only achieved but was surpassed also and the Bank sanctioned 95436 MUDRA loan accounts during the campaign period.

- Implemented the guidelines of RBI to provide relief for MSME Borrowers registered under Goods and Services Tax (GST).

- The Bank has tie-up with RXIL on TReDS platform to finance the loans against Trade receivables.

- Bank is in the process of tie-up with several FINTECH Companies to generate the leads under MSME, streamlining the appraisal and processes of MSMEs applications including monitoring and recovery

8.Financial Inclusion

8.1 Pradhan Mantri Jan Dhan Yojna (PMJDY)

Bank has been allotted with 16161 villages across the country to provide inclusive Banking Facility in unbanked / underbanked areas. These 16161 villages were re-organised in clusters of 3-4 villages comprising 1000-1500 households called Sub Service Area (SSA). Bank is implementing mission mode project PMJDY in these 3966 SSAs for ensuring universal Financial Inclusion and to bring the entire population under the ambit of structured Banking facility. By end of March 2018 Bank has opened more than 66 Lakh Accounts under PMJDY and distributed around 40 lakh RuPay Cards to the eligible account holders. Total deposits as of 31.03.2018 in these PMJDY Account is Rs.1661.68 crore.

Further, Bank has deployed 3500 Bank Mitrs in the SSAs allotted to it while remaining 466 SSAs with population more than 5000 are being covered through Branches itself. Every month more than 11 lakh Aadhaar Enabled financial transactions are being carried out through Micro ATMs used by BC Agents.

8.1.2 Aadhaar Seeding & Authentication

As notified by the government of India in PMLA Rule on 1 st June 2017 the Bank has initiated process of Aadhaar Seeding and authentication in operative CASA. By the end of March 2018 around 84% operative CASA have been seeded with Aadhaar number. Bank further introduced eKYC facility in Branches, BC Points and through its website for authentication of the Aadhaar. Aadhaar based Direct Benefit Transfer worth Rs.4779.46 crore was transferred to the accounts of beneficiaries. Aadhaar based DBT has helped in ensuring benefit transfer to the right person.

8.1.3 Social Security Schemes

Working on the government’s theme of providing social security to hitherto unbanked masses, Bank has implemented Insurance and Pension products namely, Pradhan Mantri Jeevan Jyoti Bima Yojna (PMJJBY), Pradhan Mantri Suraksha Bima Yojna (PMSBY), Atal Pension Yojna (APY) through its Branch and BC network. Under PMJBY scheme, there are 6.72 lakh subscribers insured whereas under PMSBY scheme more 12.51 lakh lives are insured. So far a total of2228 claims were settled under PMJBY and 523 under PMSBY. Further, total subscribers under Atal Pension Yojna crossed 1.17 lac till year end.

Revenue generated through Financial Inclusion Project

Gradually, efforts under Financial Inclusion are showing results and Bank has started gaining both tangible and intangible benefit out of these activities. While decongestion of branches, reduction of transaction cost and increase in CASA base are intangible benefits of FI Project; tangible benefits have come in the form of commission earned under various products. Bank has earned Rs.198.98 lac in PMJJBY, Rs.24.18 lac in PMSBY and Rs.74 lac in APY. Rs.3.05 crore commission is earned against DBT / DBTL during the year.

9. Retail Banking:

The performance highlights of the bank under retail banking during FY 2017-18 are furnished hereunder:

(Rs.in crore)

As on March 2017

As on March 2018

% Growth Y-o-Y

Product

Home Loan

13049

12698

-2.69%

Car Loan

1197

1356

13.29%

Personal Loan

424

464

9.43%

Other Retail

6426

7449

15.92%

Total Retail

21096

21967

4.13%

- Total Retail loan portfolio on Y-o-Y growth is 4.13%.

- NPAs under Retail loan Portfolio have reduced by Rs.26.06 crore during year ended March2018 in comparison to March17. During this period NPA in all Retail Loan products, except UCO Property loan, has shown a downward trend.

- Modification under UCO Rent scheme has been carried out to make the Rate of Interest more competitive and in line with the market.

- Modifications have been made in UCO Car loan scheme, with regard to guarantee criteria and sanctioning authority powers, to make the scheme more attractive & viable.

- Bank has further extended UCO Grand Festive Offer till 31.03.2018 where 100% waiver of processing fee is available on Home Loans & Car Loans sanctioned during the period.

- UCO Home Loan Campaign was organised from 06.11.2017 to 08.12.2017 & Home loans amounting to Rs.471.08 crore were sanctioned during the campaign.

- UCO Car Loan Campaign was organised from 12.10.2017 to 21.10.2017 & Car loans amounting to Rs.38 crore were sanctioned during the campaign.

- To enhance the performance under RETAIL & MSME portfolio of the Bank & to bring essence of competitive environment among field functionaries, the bank has launched “Retail and MSME Loan Dhamaka” Campaign from 01.02.2018 to 03.03.2018.

- Provision to capture vetting of Credit Rating of various loan products in finacle system, has been implemented.

- Bank has tied Up with M/s DYS Impex Private limited to finance Commercial Electric Vehicle E-Rickshaw and variants thereof, for transportation of goods and passengers to increase our MSME Loan Portfolio under Priority Sector.

- Bank has tied up with Coolwinks.com for discounted promotional offers on online purchase. Coolwinks, is offering Discount to our valued customers upon usage of UCO Bank Debit Card only.

- Bank has tied up with Ferns N Petals Private Limited for discounted promotional offer on online purchases. Ferns N Petals is offering a discount to our valued customers upon the usage of UCO Bank Debit Card and Net Banking facility.

- Bank has tied up with NPCI for different promotional offers on UCO Rupay Debit Cards. NPCI has given various offers to our valued customers upon usage of UCO Bank Rupay Debit Cards. A Circular has been issued in December 2017 to all the branches, incorporating the updated discounting offers on usage of UCO Rupay Debit Card.

- Bank has tied up with Foodpanda & Cleartrip, for discounted promotional offers on online purchases. Foodpanda & Cleartrip have offered discounts to our valued customers upon usage of UCO Bank Debit Card only.

10. Bancassurance:

- At present, our Bank is a Corporate Agent for Life Insurance Corporation of India (LICI) for selling Life Insurance policies under Corporate Agency tie-up arrangement. During the Financial Year, Bank canvassed Rs.26.35 crore of First Premium by selling new Life Insurance policies.

- In General Insurance Business our Bank is Corporate Agent for three General Insurance Companies. These Companies are: 1) M/s. Reliance General Insurance Company Ltd. 2) M/ s. Future Generali India Insurance Company Ltd. 3) M/s. Liberty Videocon General Insurance Company Ltd. During the Financial Year, Bank canvassed Rs.34.19 crores premium by selling insurance policies of above mention General Insurance Companies. These Insurance Companies provided a wide choice of Insurance products to our customers to meet their insurance needs at reasonable premium, which resulted in increase in premium collection and commission income for the Bank during the Financial Year.

- Under tie up agreement with M/s. Kotak Mahindra Life Insurance Company Ltd for Group Credit Life Insurance Bank covered life risk of about 8,700 Home, Education and Retail Loan borrowers during the year and secured the risk of loan default in case of any eventuality. Total premium collected by the Insurance Company during the Financial Year under Group Credit Life Insurance was Rs.11.64 crore.

- Bank increased the number of Specified Persons (SPs) substantially during the Financial Year for doing Bancassurance business. These Specified Persons are duly trained and certified by Insurance Regulatory & Development Authority of India (IRDAI) and are posted at different Branches across the Country for generating bancassurance business for the Bank.

11.LEGAL MATTERS

Bank, with utmost diligence ensures protection of its interest at every step through formulating policies, adapting the recent changes ushered in the legal fraternity. Bank issued guidelines to its branches on the Insolvency and Bankruptcy Code, 2016 highlighting, inter - alia, all the amendments made in the recently enacted Insolvency and Bankruptcy Code, 2016 in view of the various Gazette Notifications issued in this regard by the Ministry of Corporate Affairs & Insolvency and Bankruptcy Board of India (IBBI). Further, the recent developments in law (affecting the Banking Sector) steered in through the Maharashtra Stamps (Second Amendment) Act, 2017, the Companies Act, 2013, Debts Recovery Tribunal (Procedure) Rules, 1993 etc. have been intimated to the field functionaries through various Circulars issued from time to time.

Bank regularly monitors cases filed before various fora of law (viz., Hon’ble Supreme Court, Hon’ble High Courts, Debts Recovery Tribunal, Consumer Forum etc.) for speedy disposal of cases.

12. Recovery

The increasing trend of NPAs in the Banking Industry over last four years has become a concern for the Bank. Gross NPA level of our Bank increased from 17.12% in March, 2017 to 24.64% in March, 2018 and the quantum of GNPAs has increased from Rs.22540.95 crore to Rs.30549.92 crore respectively. The NNPA percentage increased to13.10% from 8.94% during the previous year.

During the FY 2017-18, the Bank has witnessed fresh slippages of Rs.15033.80 crore. Cash Recovery for Rs.1680.04 crore for the year ended 31st March, 2018. The total reduction in Cash Recovery & Up-gradation of NPA during FY 2017-18 is Rs.4290.12 crore. Maintaining Bank’s Asset quality and recovery of Bad debts remain the focus area for the Bank.

12.1. Recovery performance:

Bank’s recovery mechanism is also geared up at all levels of the organization to take advantage of modified compromise settlement scheme, SARFAESI Act, DRTs, Lok Adalats, NCLT, Country wide mega Recovery Camps, Road Shows, MAO campaigns, declaration of willful defaulters etc. were organized for a speedy recovery.

The details of GNPA, NNPA, Cash Recovery and upgradation for the last three years are as under:

(Rs.in crore)

Particulars

31.03.2016

31.03.2017

31.03.2018

Cash Recovery

1368.58

2038.66

1680.04

Up gradation

1357.86

4300.45

2610.08

Total

2726.44

6339.11

4290.12

Recovery in Loss Assets

(ML & Technical Write-off accounts)

131.01

139.81

181.56

Gross NPA

20907.73

22540.95

30549.92

Gross NPA %

15.43%

17.12%

24.64%

Net NPA

11443.59

10703.39

14082.07

Net NPA %

9.09%

8.94%

13.10%

The total cash recovery plus upgradation for the year ended 31st March, 2018 is Rs.4290.12 crore as against Rs.6339.11 crore for the year ended 31 st March, 2017. The recovery in written-off accounts is Rs.181.56 crore for the year ended 31st March, 2018 compared to Rs.139.81 crore for the previous year.

Recovery in Loss assets has a direct impact upon the profitability and the Bank giving priority in monitoring / follow-up for recovery in such accounts. A separate vertical in the Bank is monitoring consistently for recovery in loss assets including technically as well as prudentially written-off accounts.

For portfolio reduction in GNPA, the Bank has also given special emphasis to Sale of Assets to ARCs for the year ended 31st March, 2018 for Rs.1764.29 crore as compared to Rs.1123.41 crore in previous year.

12.2. Some Recovery initiatives:

- Bank has liberal compromise Settlement scheme for NPA and ML accounts having O/s Balance up to Rs.10.00 Lac under which the branch heads are empowered to approve so that more NPA accounts are covered under the proposed non-discretionary/ non-discriminatory OTS Scheme.

- Bank has formed 216 clusters in all the zones comprising of 4-5 branches of highly concentrated NPAs in each cluster to maintain contact with the borrowers, organize recovery camps at regular intervals and scout OTS proposals. Emphasis is also given for OTS/Compromise settlement for eligible NPA accounts under all categories.

- Bank has empanelled 547 Enforcement & Recovery Agents and 84 Business Correspondents (BCs) for effective and time-bound enforcement of action under SARFEASI Act and early resolution of NPA accounts.

- The Bank is in the process of implementing the Legal Management System with the objective to facilitate different departments at Head Office & Zonal Offices for monitoring legal matters, creating database of all cases pending before different courts for effective monitoring and early resolution of accounts.

- MAO (Many Against One) approach is adopted against recalcitrant borrowers on a regular basis and being monitored at HO level.

- Countrywide Mega Recovery Camps are being organized Two days in every month.

- Mega auction is being conducted on quarterly interval with common auction dates on all India basis for commercial vehicle/Cars/Tractors etc. accounts.

- Mega e-auction of properties under SARFAESI Act being conducting on quarterly basis.

- Accounts eligible for NCLT are being explored vigorously. Bank closely remained in touch with other Lenders/ operational creditors, on regular basis, for discussion on way forward in respect of filing NCLT cases. Most of the accounts under NCLT are consortium / multiple banking accounts and are monitored for resolution on case to case basis in consultation with leader of consortium etc. Where the Bank is leader of the consortium, the Bank is meticulously following up each and every account for the purpose of resolution.

Where the Bank is a member of Consortium / JLF, Bank is taking up the critical issues with the top management of the respective Leader Banks on regular basis, specifically to convene the meeting of JLF at frequent intervals and ensuring Bank’s participation at suitable levels in such meetings.

- Eligible NPA accounts are identified for Sale to ARCs from time to time on a regular interval. Accounts sold to ARCs of 432 A/cs amounting to Rs.6104.75 crore since inception and 20 accounts amounting Rs.1764.29 crore during the year ended 31.03.2018.

- State- specific Schemes were formulated to widen the scope of NPA recovery as per requirement under Debt Waiver at the State Level through the SLBC of the respective states such as 1) Kerala Govt. Educational Loan assistance, 2) Debt Redemption Scheme - U.P., 3) Chatrapati Shivaji Maharaj Swetkari Sanman Yojna (CSMSSY-2017) of Maharashtra Govt. etc.

13. CREDIT MONITORING

Continued volatility and uncertainty in the economic situation have accentuated upsurge of bad loans in the banking industry. In the backdrop of prompt corrective action (PCA) advised by RBI and Reform Agenda for responsive and responsible PSBs as advised by Government of India, bank has geared up in tackling the situation by initiating measures as under.

- Bank has formed High Power Committee comprising top executives of Bank to review SMA-2 accounts with total credit exposure of Rs.5.00 crores and above fortnightly basis and directsfield functionaries for proper steps to resolve the stress,

- A separate Stressed Asset Vertical has been created at Head Office level for monitoring, follow up and resolution of all special Mentioned Accounts above Rs.20.00 crores under SMA-1 and SMA-2 categories to focus recovery effort through a dedicated specialised and motivated team for enhanced and timely recovery.

- On dispensation of earlier frameworks viz.CDR, SDR, S4A, change in management outside SDR Flexible Restructuring etc. for resolution of stress, policy for resolution of stressed assets under revised framework has been formulated and put in place.

- Workshop at Zonal Office Level has been conducted for Credit Auditors to enhance quality of the credit audit report vis-a-vis health of credit portfolio.

- Entrusting executive as Nodal Officer to oversee enforcing credit discipline by continuous monitoring to check opening current accounts by borrower companies with other Banks.

- Top 20 branches with higher delinquencies under each of 42 zones of Bank have been followed up continuously for resolution of stress

Apart from the above, some of the other initiatives taken by the bank to improve the functioning at the grass root level include:

- Bank is in process of capturing early warning signals (EWS) along with root cause analysis from system to identify the delinquent borrowers for identification of Red Flagged Accounts (RFA) for early detection of loan fraud and preventive measures thereafter,

- Monthly Credit Monitoring Report (MCMR) has been made system driven to ensure real -time monitoring by the monitoring authority.

- Based on feedback from the field functionaries and as per directions from RBI and top management of Bank ,20 (Twenty) no.of circulars issued for effective credit monitoring during 2017-18

14.RISK MANAGEMENT

- Introduced well-defined Contingency Funding Plan to manage a range of scenarios of severe liquidity stress. The funding plan contains the details of potential contingency sources, estimated amount which can be drawn from these sources, lead time needed and procedure detailing when and how each of the actions will be activated.

- To diversify the funding sources, we have defined an internal limit for sources of fund and tenor of funding; funding from different counterparties and funding from types of Instruments.

- Best practices at Industry level in Credit & Operational risk areas have been identified and their implementation in the Bank in a time- bound manner has been initiated.

- Development of Software package for Self-Assessment of controls in existing processes and new products before their introduction has been initiated.

- Root cause analysis of frauds is being carried out and necessary changes in the respective policies / system & procedures to curb the recurrences of fraud are being done.

- Policy for determination of spread for different types of products, borrower and tenor over the MCLR has been introduced.

- For effective determination of the risk appetite, policies on moratorium limits for different types of products / facilities and tenor wise exposure limits for different types of funded facilities have also been implemented.

- Be aware Be Secure” - a new initiative in pictorial format has been designed and is being circulated amongst the Branches / Offices for increasing awareness relating to Cyber Security.

- To increase Information Security awareness among staff, a mandatory session has been introduced in all in-house training programs.

- The process has been initiated for making the Credit Audits system driven.

15. INFORMATION TECHNOLOGY, BPR and BTD

15. 1. New Projects/Applications launched in Current Financial Year

- eKYC - Both biometric based and OTP based eKYC facility is made available.

- GST (Goods and Services Tax) Collection Module:

As per directions from GOI/GSTN/RBI, GST Collection Module (both Online/Offline mode), GST determination module and GST Compliance module is implemented in the Bank.

- Document Management System (DMS): Bank has initiated implementation of the centralized Document Management branches.

- UCOPay (e-wallet) - On the auspicious occasion of Bank’s 75th Foundation Day, Bank launched UCOPAY mobile application with Instant Online Account Opening features and UCO Secure app to disable/enable digital banking services anytime, anywhere 24x7.

- BHIM Aadhaar Pay& Bharat QR: Bank is promoting digitalization by facilitating retail payments through Bhim Aadhaar Pay which will allow the customer to perform a purchase transaction using his/her Aadhaar Number and biometric (Finger print/IRIS) upon the device of the merchant. Bharat QR code provides customers with an easy scan and pay option irrespective of their card types for payments across merchant outlets. UCO bank is live on Bharat QR code (issuer mode) for BHIM UCO UPI and mobile banking app and Bharat QR code (Card) in acquirer mode through POS vendor

- Bharat Bill Payment System (BBPS): Bank is now LIVE in the BBPS platform developed by the National Payments Corporation of India (NPCI) for all kinds of bill payments.

- Digital Village Adoption: On the occasion of 75th Foundation Day, UCO Bank has proudly adopted 75 villages spread across 19 States under Digital Village Adoption Program - UCO Digi-Gram.

15. 2. Performance/Feature enhancement of existing projects

15.2.1. In-house software development:

The following feature enhancements are made in HRMS

- Pension Slip for Retired Employees has been made available in HRMS.

- Implementation of Discomfort Allowance module is there in HRMS. Claim, Verification & payment through monthly salary.

- Raise Issue module in HRMS package has been implemented to address different functional Issues faced by the employees.

- Online system for Risk Control Self-Assessment (RCSA) for Branches has been implemented.

- JSON Creation Toolis generated as per the requirement of Pune/Mumbai Zonal office. JSON file was generated from FINACLE data to RBI for providing subsidy to farmers.

15.2. 2. Grid Cheque Truncation System & NACH:

90 centres were brought under CTS under the three Grids (Northern Grid - 28 centres, Southern Grid - 31 centres & Western Grid -31 centres).

E-Mandate with e-Sign facility has been implemented in the month of October 2017. Till date, total 663 e-Mandates have been processed.

15.2. 3. Core Banking System: To improve the functionality and to cater the requirements raised due to regulatory authorities, Bank has implemented various modules such as cash Denomination Module, Centralized Locker Rent recovery module, Centralized Cash handling charge recovery module, capturing details of Form 60, implementation of system generated reference no. for 15G/

15 H submission; seven different important daily reports have been merged into a single Finacle menu “DAILYRP” for effective monitoring at branch level, NPA module has been successfully implemented. Bank has also implemented Capturing SMA0 module.

Bank has introduced new functionalities in Finacle, the major ones are as below:

- Automatic reschedule in interest capitalization scheme on moratorium period.

- Senior Citizen saving scheme has been implemented.

15.2.4. Lending Automation Processing System (LAPS)

Six retail loan products such as Home Loan, Car Loan, Education Loan, Pension Loan, Property Loan and Cash Loan are processed through LAPS. Bank is in the process of bringing few more schemes under LAPS.

15.2.5. Government Business Module (GBM):

- Processing of pension record in case of revision orders for CPAO treasury has been enabled under the e-PPO project.

- Pensioner’s Certificates submission across the CBS branches (Inter-sol Certificates submission) is enabled.

15.2.6. ATM - As on 31.03.2018, Bank has 2,769 ATMs. From 01.04.2017 to 31.03.2018, total 155 ATMs have been installed, 107 ATMs have been closed and 46 ATMs have been shifted to feasible sites.

15.2.7. Debit Card - As on 31.03.2018,Bank has issued 1.04 crore of Debit/ATM cards as compared to 0.97crore cards as on 31.03.2017. Out of 1.03 crore of debit/ATM cards, total number of active cards is 0.78 crore, out of which 0.40 crore cards are with EMV chip. Bank is in the process of replacing all magstripe cards issued earlier.

Bank has recently implemented Green PIN initiatives enabling customers to set their Debit Card PIN at Bank’s ATM on their own and thus not requiring waiting for the physical PIN mailer.

15.2.8. Pre-paid Card - To encourage and divert customers more towards digital payment, Bank has introduced RuPay EMV chip based pre-paid card “suvidha (e) Pre paid”. This card is reloadable and card holder can spend upto the loaded amount at ATM, POS (point of sale) & e-commerce. As on 31.03.2018, number of pre-paid cards issued is 5,066 as against 608 as on 31.03.2017.

15.2.9. Internet Banking - Facility is available to customers for utility bills payment, for air ticket booking, online shopping, inter- bank and intra bank fund transfer etc. Bank is also providing services like balance enquiry, account statement, transaction related SMS alerts, payment of indirect taxes, Direct taxes and many other banking services. The total e-banking users as on 31.03.2018 are 8.14 lac as against 6.89 lac as on 31.03.2017 recording an increase of 18.14% Y-o-Y.

15.2.10. Mobile Banking - Bank has introduced Mobile Banking services during the year 2011-12, whereby customers can take advantage of conducting their banking transactions through mobile phones. With new version (version 1.1.2),m-banking application has various new features like Bharat QR (RuPay card), OTP auto-fetch, mobile recharge through contact book, mobile recharge receipt generation, password protected account statement etc. .The total M-banking users as on 31.03.2018 are 8.42 lac as against 5.34 lac as on 31.03.2017 recording an increase of 57.68% Y-o-Y.

15.2.11. Digital Passbook (m-Passbook) - Digital Passbook application (mpassbook) is also developed for enabling customers to view all their accounts & manage finances effectively. Besides Hindi and English both the applications are available in 10 different regional languages. As on 31.03.2018, total number of m-passbook users is 6.35 lac as against 2.70 lac as on 31.03.2017 recording an increase of 135.19% Y-o-Y.

15.2.12. BHIM UCO-UPI -. Bank’s UPI solution empowers multiple bank accounts to be linked into a single mobile application (of any participating bank), merging several banking features, seamless fund routing & merchant payments into one hood. It also caters to the “Peer to Peer” collect request, which can be scheduled and paid as per requirement and convenience. The number of users (as on 31.03.2018) is 1.18 lac as against 0.47 lac as on 31.03.2017 recording an increase of 151.06% Y-o-Y.

15.2.13. BHIM-BHIM (Bharat Interface for Money - BHIM App) is a Mobile App developed by National Payments Corporation of India (NPCI), based on the Unified Payment Interface (UPI). BHIM allow users to send or receive money to other UPI payment addresses or scanning QR code or account number with IFSC code or MMID (Mobile Money Identifier) Code to users who do not have a UPI-based bank account. The number of merchant on-boarding (as on 31.03.2018) is 6,802.

15.2.14. USSD-The innovative payment service *99# works on Unstructured Supplementary Service Data (USSD) channel. This service allows mobile banking transactions using basic feature mobile phone,

15.2.15. Network:

- Bank has replaced Network and security device at data centres

- 980 no. of alternative MPLS links has been commissioned at branches and admin offices.410 no. of BSNL MPLS links has been upgraded

- Centralized antivirus has been installed in the Bank.

- Active Directory has been implemented in the Bank

- Internet access is controlled through Centralized proxy at HO. The same will be extended to branches in second phase.

15.2.16. SWIFT - SWIFT system is operational in the Bank since 26.06.1989.

15.3. New projects

- Near Disaster Recovery (NDR):. As per RBI guidelines, to reduce loss during exigencies, Bank is in the process of setting up Near DR Site to enable quick recovery and continuity of critical business operations.

15.4. Awards

During FY 2017-18, Bank has crossed several milestones in Information Technology area, some of which are -

- Finacle Innovation Award by M/s Infosys - Bank acquired 1st position under Project Management category for Gen-Script.

- IDRBT Innovative Mobile App 2017 - Bank was selected in the list of Top 10 Banks for UCO MIS Dashboard and became 2nd Runner Up for UCO HRMS Plus mobile app.

- IBA Payment Initiative Award- Bank was honoured with this award as Best Bank among Mid-sized Banks.

- Skotch Award for Technology Innovation Mobile Application-UCO MIS Dashboard was selected in Best 100 projects and Bank won Silver Award for UCO HRMS mobile application.

- IDRBT Banking innovative Technology Award 2018: Our Bank has been shortlisted in Top 10 Banks for UCO Secure app and NetAssist app (a Software application for Network Management).

16 Customer Service

Standardised Public Grievance Redressal System (SPGRS) is available for the public to lodge complaints online. 97.87% of the total complaints received during the financial year 2017-18 have been redressed . Under RTI, a total of 1207 applications were received, during FY2017-18 and 21 applications were yet to be replied as on 31.03.2018. There were 284 appeals made under RTI, and 16 appeals were yet to be disposed of as on 31.3.2018

17. CORPORATE COMMUNICATIONS

Bank reinforces strong corporate reputations through its high degree of transparency and consistency in communication with stakeholders and also disseminates timely information with clarity, coherence and credibility including information through the websites of the Bank on real- time basis. Bank aims to inform, persuade and involve all in the activities and growth through sustained, consistent and relevant messages and using a judicious mix of both external and internal communication tools. Apart from CSR activities, Publicity campaign of various Retail Assets and Liabilities, IT and MSME products through different media has been main thrust of the Bank in the Financial Year 2017-18. Bank takes pride in sponsoring Honorable Prime Minister’s “ Mann Ki Baat” programme wherein the Bank’s various products namely UCO Pay, UCO Suvidha, Prepaid Cards, Government Insurance schemes and Atal Pension Yojana were broad casted regularly.

Keeping in view the Bank’s commitment towards Financial inclusion, Publicity in Rural areas had been given special attention during the FY 2017-18 like all previous years.

To commemorate our Bank’s “Platinum Jubilee Foundation Day” on 06.01.2018, Celebrations were organized in all States. No stones were left unturned to make the Celebrations a grand success. Our honorable Finance Minister Shri Arun Jaitley consented and graced the celebrations at New Delhi as Chief Guest and launched our bank’s new Applications” UCO Securities “and “UCO Pay ”. Postal Stamps were released to mark the Platinum Jubilee Foundation Day by Chief Postmaster General and Finance Secretary, Government of India Mr Rajiv Kumar also graced the occasion as Guest of Honour. Bank also distributed 25000 silver coins to all its employees and bank Board approved a total Expenditure of Rs.3.25 Crores towards the same.

Aggressive Publicity was made befitting the occasion and Greetings of Our MD and CEO and Executive Directors were published/ broadcast/telecast in all media.

Bank is also publishing the in-house magazine “UCO Tower” where all the constituents are encouraged to participate. UCO Tower also aims to create awareness of all happenings and activities of the Bank among all employees.

Bank will continue to utilize all available Publicity tools to the maximum extent to enhance its Brand Image and will establish itself as a World-Class Customer Centric Financial Institution.

Bank has been actively engaging itself in various CSR activities and social causes from time to time. Fulfilment of SocioEconomic obligation is part of the Bank’s Mission. In order to ameliorate and become inseparable part & parcel of Nation’s Socio-economic development process, the bank has contributed a substantial amount for CSR activities during the Financial Year 2017-18.

18. Human Resources

Human Resource Management Department comprises of various cells looking after different segments of the department. All these cells worked in tandem during FY2017-18 to create a harmonious and productive work environment. Training and workshops were organized for improving/ enhancing the skills and knowledge of the staff.

18.1 Manpower

The Total staff strength as on 31st March, 2018 stood at 23943 including employees serving overseas. The total staff comprises of 11968 Officers, 8149 Clerks,1830 subordinate Staff and 1996 House - keeping Staff. The percentage of Scheduled Castes (4942) & Scheduled tribes (1960) taken together in the total staff strength is 28.83%. Besides, there are 3984 OBC employees in Service of the Bank as on 31.03.2018. 1945 belong to the Minority Communities. Woman employees (5731) constitute 23.94%of the total Workforce as on 31st, March 2018.

18.2 IR Negotiation

During the period, the industrial Relations climate in the Bank remained by and large cordial between the Management and the Unions/ Associations. Meetings and discussions were held with Unions/ Associations at periodic intervals through mutual cooperative attitude and respect during the financial year 2017 - 18.

18.3 Reservation cell of Head Office, HRM Department

The Bank has been implementing reservation policy of Government of India. Reservation and other relaxation and concessions extended to SC/ST/OBC/Persons with Disability (PWD) and Ex-Servicemen employees is strictly adhered to in the Bank. As per GOI guidelines, Bank has imparted Prepromotion Training to 2052 candidates ( SC-805, ST-342, OBC-883 and PWD - 22) belonging to SC/ST/OBC and PWD category in this financial year 2017-18.

In order to address the issues of SC/ST and OBC employee of the Bank, regular periodical meetings are being called, held at Apex level as well as Zonal Office level (where reservation roster is maintained) with Welfare Association of such employees. The grievance of such category of employees is heard in such meetings and subsequently, grievances are redressal as per Bank’s policy guidelines.

During the period, review meetings on welfare of Safai Karamcharis has been held at three centres including HO with National Commission for Safai Karamcharis with satisfaction.

18.4 Recruitment Cell

Bank has recruited 430 Officers during the year 2017-18. These 430 officers comprise of 78 SC, 32 ST, 106 OBC and 110 women. 762 clerks have also been recruited during the year 2017-18 of which 119 are SC, 102 ST, 164 OBC and 219 females. Bank has reviewed and extended the service of International Ombudsman for further one year on contractual basis.

18.5 Training Cell

The Bank, being a part of one of the most dynamic industries, has to keep up with the constantly changing environment by continuously updating its workforce with various Training Programmes in the concerned Fields. In the FY 2017-18, Bank has introduced user- friendly Online Training Management Module in HRMS. All Zones, CSC Kolkata and all RTCs worked in tandem for successful execution of the Module. Now, meaningful information can be extracted from the Online Training Management Module which helps in facilitating proper decisionmaking process and reducing redundant errors. Bank has organized exclusive Training programmes for 1st Time Branch Heads as well as Branch Heads to develop a talent pool.

In the FY 2017-18, 55 Executives, 8598 Officers, 4042 Clerks and 610 Sub- staffs were trained in our Training Centres. A total of 4282 Officers, 961 Clerks and 97 Sub - staffs were trained at Zonal Level through Locational/ Camp Based Training Programmes. Bank has also sponsored Executives & Officers for training in reputed External Training Institutes like CAFRAL, BIRD, ASCI, etc. In FY 2017-18, total of 508 Executives & Officers attended the External training programmes which helped in acquiring a global competitive edge. The Bank is continuously evolving the Training Department with the adoption of latest inventions to develop a sustainable solution and so as to fulfill the desired corporate expectations.

19. Government Business

Government Business Cell handles Small Savings Deposit Schemes, Collection of Direct and Indirect Taxes, Central and State Government Pension, Atal Pension Yojana (APY), Sovereign Gold Bonds (SGB) and National Pension System (NPS).

During the FY 2017-18 all Branches have been authorised for the opening of account under Public Provident Fund (PPF), Sukanya Samriddhi Accounts (SSA) and Senior Citizen Saving Scheme (SCSS). Senior Citizen Saving Scheme was successfully implemented and operationalised through Finacle. There was an increase in the accounts opened under PPF - 10,639 (33%) and Sukanya Samriddhi Accounts Scheme - 12,420 (158%).

There was a substantial increase in the accounts opened under APY Scheme. It increased three fold from 21073 to 64730 in the year 2017-18.

Achieved 15% (Rs.3.60 Crore) Y-O-Y growth in Turnover commission on Government Business which includes commission in Sovereign Gold Bonds (SGB) and Atal Pension Yojana (APY).

Goods & Service Tax (GST) collection module was successfully implemented and operationalised in all Branches of the Bank.

20. AUDIT & INSPECTION

To ensure strict adherence to bank’s system & procedure, Risk Based Internal Audit has been conducted at 2210 branches and 1147 branches have been covered under concurrent audit. In pursuance of audit findings, prompt corrective action has been initiated for rectification of irregularities including recovery of revenue leakages.

The Offsite Concurrent Audit Surveillance (OCAS) has been strengthened and extended to all branches of the Bank. At present alerts are generated in 15 critical items.

A new IS Audit Policy in line with the observation made by RBS team of RBI has been approved by the Board of Directors of the Bank. The Concurrent Audit Module and Management Audit Module are being made risk- based and system driven.

A training programme has been conducted to update the knowledge and skill of newly inducted inspecting officers. More focus was given to make the mobile inspecting officers familiar with the e-THIC package of Risk Based Internal Audit.

21. VIGILANCE DEPARTMENT

During the year 2017-18, our Field vigilance Officers posted at various Zones/ Circles of the Bank have conducted preventive vigilance inspection at 422 branches to ensure that preventive vigilance measures are being taken up at the branches.

A number of preventive vigilance programmes were conducted at different centres of the Bank to increase awareness among staff on various aspects of misconducts and works associated with non - adherence to rules & regulation of the Bank. A two -day workshop for the Disciplinary Authorities was conducted at CSC - Kolkata during FebRs.2018 on the subject “Positive approach to Vigilance”.

This year Vigilance Awareness Week was celebrated across the country with the theme “My Vision - Corruption Free India”. Various public meetings and seminars have been organized across the branches and administrative offices to make both staff and the public more vigilant and encourage them for a corruption- free India. Various competitions like essay, debates, art, story writing etc. have been organized amongst the staff members and school/ college children. A Magazine” Eternal Vigilance” was also launched to increase awareness amongst staff members.

22. Compliance of Official Language Policy:

The bank took proactive approach to implement the Official Language Policy of the Union Government. The Bank also took appropriate follow-up-action to implement the directives as contained in the Annual Program with regard to the use of Official Language Hindi issued by Official Language Department, Ministry of Home Affairs, Government of India.

During this period third Sub - Committees of the Parliamentary Committee on Official Language visited Pathankot Branch under Jallandhar Zone on 14.06.2017, Falodi Branch under Jodhpur Zone on 19.09.2017 and Kavaratti Branch of Lakshwadeep under Ernakulam Zone on 14.10.2017

UCO Bank Head Office, the Convenor of Town Official Language Implementation Committee (Banks), Kolkata was awarded First Prize of TOLIC of Eastern Region by Official Language Department, Ministry of Home Affairs, Govt. of India for excellence in implementation of Official Language during the year 2016-17. Our Zonal Offices at Varanasi, Jorhat & Patna received First Prize from concerned TOLIC for their performance in their respective towns.

23. COMPLIANCE DEPARTMENT

Bank has emphasized on compliance issues mandated by RBI. Bank has been ensuring the level of customer service, functions and compliance of rules of deposits, advances, KYC/AML, other services, submission of statutory/regulatory reports, information and data asked by RBI, GOI, SEBI & IBA, etc. through a strict compliance system. Compliance policy was prepared incorporating necessary changes to prevent breaches in compliance and the same has been circulated throughout the bank after board approval. Test checking of compliance functions was undertaken in 842 branches. Deficiencies observed are being rectified. Branches/offices have been sensitized to compliance functions so as to avoid breaches. Critical issues were reported and discussed at appropriate level to enhance system efficacy. Interactions are also being held with Inspection & Risk management departments periodically to discuss compliance issues to arrive at measures to avoid recurrence thereof.

24. FUTURE PLAN OF BANK

The performance of the Banking sector, PSBs in particular, continued to be subdued in the current financial year. GNPA ratio of SCBs increased to more than 10%. Stressed Advances ratio rose. In this scenario, Bank future Plan and strategies are to reduce NPA and check further slippages. Bank has put all its efforts to recover the bad loans. Moreover, containment in expenses and increase in non-interest income will be also in focus for a turnaround.

To reduce the expenses, the Bank has dismantled Circles offices and 18 Service Branches.The biggest challenges before the bank are to maintain RWA and CRAR as per the requirement of Govt. guidelines/Regulatory Standard. So the focus has been given on low capital requirement advances such as LCBD business. Retail, MSME and Agriculture are the core area of the advances of the Bank.

Bank has already decided not to go for high-cost deposit so that low-cost deposit (CASA) will be more.Among the other strategy enhancing non- interest income, reduction in expenses and promoting e-product is also important.

25.BOARD OF DIRECTORS

25.1. Corporate Governance

Bank firmly believes in and has consistently practised good corporate governance woven around its core values of transparency, professionalism and accountability. By constantly focusing on these aspects of its day-to-day operations, the Bank strives to enhance shareholders’value. The Bank is committed to the principles of good governance, its Board of Directors has formed various committees of the Board to monitor every aspect of Bank’s business. The systems and business processes of the Bank are continuously reviewed at various levels for identifying and strengthening areas of weaknesses, if any. The Directors of the Bank believe that good governance is the key to earn trust, loyalty and goodwill of clients, business associates, employees and investors and also to have a respectable position in the society at large.

25.2 Changes in the Board of Directors

- Mr K Rajivan Nair was elected as Director on the Board of UCO Bank under shareholder category w.e.f. 02.12.2017 for a period of three years.

- Dr Asish Saha was appointed as Part-time Non-official Director on the Board of UCO Bank w.e.f. 27.12.2017 for a period of three years.

25.3 Meetings of the Board of Directors

During the FY 2017-18, ten meetings of the Board of Directors were held. The number of meetings of various committees of the Board held during the period is given below:

Sl.No

Name of the Committee

No. of meetings held

1.

Management Committee of the Board

9

2.

Audit Committee of the Board

6

3.

Risk Management Committee of Board

2

4.

Stake holders’Relationship Committee of the Board

1

5.

Share Transfer Committee of the Board

2

6.

Special Committee of the Board for Monitoring Large Value Frauds

3

7.

Customer Service Committee of the Board

2

8.

Committee on HR Related Issues of the Bank (HR Committee)

Nil

9.

Nomination Committee of the Board

1

10.

Remuneration Committee of the Board

1

11.

Strategy Committee of the Board

4

12.

Board Level Committee for Monitoring Recovery in NPA Accounts

3

13.

Committee of the Board for Disposal of Appeal Cases

2

14.

Review Committee (Wilful Defaulters)

3

25.4 Statement of Directors’ Responsibilities

The Board of Directors confirm that in the preparation of the annual accounts for the year ended March 31, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any. The accounting policies framed in accordance with the guidelines of Reserve Bank of India, were consistently applied. Reasonable and prudent judgements and estimates were made so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit of the Bank for the year ended March 31, 2018. Proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of applicable laws governing banks in India; and the accounts have been prepared on an on-going basis. Internal financial controls have been laid down by the bank for ensuring orderly conduct of business.

25.5 Acknowledgements

The Board welcomes the new Directors, Mr K Rajivan Nair, Dr. Asish Saha and looks forward to their valuable inputs towards the growth of the Bank. The Directors remain thankful to the Government of India, Reserve Bank of India and other regulatory authorities for their support and valuable guidance. The Board also thanks other financial institutions and correspondent banks for their co-operation.

The Board of Directors expresses its gratitude to the loyal customers for their trust and continuous patronage of the Bank. The Board also thanks the staff unions/associations and shareholders of the Bank for the support extended by them. The Directors place on record their deep appreciation of the dedication shown by each employee of the Bank.

By Order of the Board of Directors

sd/-

(R.K. Takkar)

Date: 29th May, 2018 Managing Director &

Place : Kolkata Chief Executive Officer


Mar 31, 2017

18.3. Reservation Cell of Head office, HRM Department

Bank has been implementing reservation policy of Governments of India. Reservation and other relaxations and concessions extended to SC/ST/OBC / Differently abled persons and Ex-servicemen employees of our bank are strictly adhered. As per GOI guidelines, Bank has imparted Pre-promotion Training to 146 candidates (SC-62, ST-13, OBC-68 and PH-3) belonging to SC/ST and OBC category. In order to address the issues of SC/ ST and OBC employees of the bank, regular periodical meetings are being held at Apex level as well as at Zonal office level (where reservation roster is maintained) with Welfare Association of such employees. The grievances of such category of employees is heard in such meetings and subsequently grievances are redressed as per Bank''s policy guidelines.

The reservation cell participated in two review meetings with Shri Raju Parmar, the Hon''ble member, National Commission for Scheduled Castes at Raipur and Ahmadabad on 04.05.2016 and 05.11.2016 respectively. The observations were noted and Action Taken report was submitted to the Commission in time. The cell also participated in two review meetings with the Parliamentary Committee on welfare of OBC at Gangtok on 27.06.2016 and Parliamentary Committee on welfare of SC and ST at Kolkata on 21.10.2016.

Department of Financial Services (DFS) of Ministry of Finance examined the implementation of Reservation Policy of our bank for the year 2014 and 2015 along with Reservation Rosters/ Registers pertaining to SC/ST/OBC, Complaint Register and Guard file of our bank on 11.01.2017 at New Delhi. They found the implementation of reservation Policy in our bank as satisfactory.

18.4.Recruitment Cell

Bank has recruited 735 Officers during the year 2016-17. These 735 Officers (Including Specialist Officers as IT, AFO, Security, Law etc) comprise of 126 SC''s, 42 ST''s, 175 OBC''s and 221 women. Bank has reviewed and extended the service of Chief Customer Service Officer (Internal Ombudsman) for further one year on contractual basis. 1181 clerks have also been recruited during the year 2016-17 of which 163 are SC''s, 93 are ST''s, 306 are OBC''s, 336 are females and 14 clerks are Persons with Disabilities individuals.

18.5. TRAINING Cell

Our organization, being a part of one of the most dynamic industries, has to keep up with the constantly changing environment by continuously updating its workforce with various Training programmes in the concerned field. Bank has reviewed Training Policy with latest updates and infused value addition. During Financial Year 2016-17, emphasis was given for imparting Training to all sections of employees and organizing Vocational and Camp Based Training Programmes which are organized at Zonal Office level. 9433 Officers, 3615 Clerks and 504 Sub-staffs were Trained under in-house training programmes in CSC, Kolkata and Seven (7) RTCs of the Bank. Besides 647 Officers, 929 sub staffs were trained Vocationally at ZO Level across the country. This year a special one day training for newly promoted/converted HKPs (Housekeeper cum peon) were arranged.

Apart from general topics viz Credit Appraisal, NPA Management, Priority Sector Lending, LAPS, Unicode, CBS, Security Aspects, Managerial Skills, Operation in Finacle, Leadership Development etc, special topics viz Soft skills, Documentation, ADC, KYC, HR Issues etc. have been introduced in Training System. This year, complying with direction of the Competent Authority, specially designed Soft Skill Training has been introduced for Officers up to Scale III and Award Staffs at CSC/RTCs.

Bank has nominated 165 Officers/Executives to outside Training Institutes like NIBM PUNE, CAB PUNE, IIBM Guwahati, BIRD Luck now, IIBF Mumbai, IDRBT Hyderabad and many other Institutes for External Training. Specially designed Training Programmes on Leadership Development were conducted for newly promoted DGMs, AGMs & Chief Managers with External Training Institutes viz. IICA Manesar, ASCI Hyderabad and NIBM etc. Overseas Training also given to three of our Top Executive. Special programmes on Forex Management, Public Procurement, IFRS also conducted to create talent pool on the respective subjects. A system has also been designed for better capacity utilization of Training colleges. Bank has given utmost importance for nomination of right persons in Training. The selection of new Faculty Members for Training Colleges is under process.

19.AUDIT & INSPECTION

To ensure strict adherence to bank''s system & procedure, Risk Based Internal Audit has been conducted at 2331 branches and 995 branches have been covered under concurrent audit. In pursuance of audit findings, prompt corrective action has been initiated for rectification of irregularities including recovery of revenue leakages. A new policy termed as "Policy on Audit Committee of the Board" has been formulated to re-define specific functioning of the Audit Committee of the Board.

Amendments have been made in the current Inspection policy, for optimum utilization of inspection man days and as a cost control measure, to utilize 40% of man days to conduct offsite inspection of the allotted branch from the Head Quarter and rest 60% of the man days to be utilized for onsite inspection by the field inspectors.

Two training programmes have been conducted to update the knowledge and skill of newly inducted inspecting officers. More focus was given to make the mobile inspecting officers familiar with e-THIC package of Risk Based Supervision."

20.VIGILANCE DEPARTMENT

During the year Field Vigilance Officers posted at various Circle Offices have conducted Surprise Inspection at 396 branches to ensure that staff working at these branches is vigilant in following the Bank''s guidelines in their daily routine.

In May 2016, Hindi version of Bank Vigilance Manual called "SatarkataAnudesh" has been launched.

A number of preventive vigilance programmes were conducted at different centre’s to increase the awareness of staff on various aspects of misconduct and pitfalls associated with non adherence to rules and regulations of the Bank. This included a two days workshop for Vigilance officers at CSC - Kolkata during January 2017 which covered Vigilance Officers of all Circle and Zonal Offices.

This year the theme of Vigilance Awareness Week (celebrated in October/ Nov. 2016) was "Public Participation in promoting integrity and eradicating corruption". Various public meetings and seminars have been organized across the branches and administrative offices to make both the staff and public more vigilant and encourage them to counter corruption. Various competitions like essay debates etc. have been organized amongst staff members and school/College children. A Magazine "Victory of Vigilance" was also launched to increase awareness among staff members."

21.COMPLIANCE OF OFFICIAL LANGUAGE POLICY:

The Bank took proactive steps to implement the Official Language Policy of Govt. of India and took actions to comply with the provisions of the Official Language Act and the Rules made there under on continual basis. The Bank has also taken appropriate follow-up action to implement the directives as contained in the Annual Program with regard to the use of Official Language Hindi issued by Government of India, Ministry of Home Affairs, Dept. of Official Language and has regularly channelized its efforts to achieve the various targets involved. Taking a decision at top level in the first Quarter of this financial year, the Official Language officers posted at Official Language Dept., Head Office were given the responsibility of overseeing and guidance with regards to Official Language related assignments of the Departments of Head Office. The result of this approach was encouraging and an increased awareness has been evident in Departments as far as doing official work in Hindi is concerned.

The Third sub-Committee of the Parliamentary Committee on Official Language, during its Kolkata visit, conducted inspection with regard to the state of Official Language implementation at the Head Office of our Bank. It appreciated the efforts of our Bank for enhancement of usage of Hindi. The Drafting and Evidence Sub-Committee of the Parliamentary Committee on Official Language also conducted discussion with the Chairman (UCO Bank) of Town Official Language Implementation Committee (Banks), Kolkata and a few other Member Banks on 27th May, 2016. Being the Convener Bank of the TOLIC (Banks), Kolkata, many Official Language and other competitions were organized under the aegis of UCO Bank, Head Office and assistance was also provided to other Banks in organizing Hindi Programs.

UCO BANK, Head Office, the Convener of Town Official Language Implementation Committee (Banks), Kolkata has been awarded Third Prize of Eastern Region for excellent implementation of Official Language during the year 2015-16. Our Zonal Offices at Jorhat and Varanasi received First Prize while Zonal Office at Patna received Second Prize, awarded by the respective TOLICs for successful implementation of Official Language.

During the period under reference, the Circle / Zonal Offices organized Hindi workshops in the whole of India in which a great number of officers/staff were trained for work in Official Language, which involved a session on utilization of UNICODE and Lingua Bank. Along with the issues of the quarterly house-magazine "Anugoonj" published by Head Office, many Hindi e-magazines were also published by circles/zones. Besides, the Official Language officers posted at Circle and Zonal Offices conducted Official Language inspections of 903 branches/offices.

A five-day "Banking Oriented Training Programme" was organized at Central Staff College, Kolkata for the Official Language officers of the Bank from 30th May to 03rd June, 2016 in which the officers were acquainted with the modes of operation of general banking. Also, an All India Official Language Officers Conference was organized on 06th and 07th March, 2017 in the same premises. Moreover, an Official Language Awareness Programme was organized on 22.12.2016 for the executives posted at Head Office. Zonal Office, Pune conducted a Official Language Conference on DIGITAL INDIA on 02.03.2017. The Department consistently worked for making the Bank''s website in bilingual, duly updated according to the changes made in it from time to time.

Different programmes were conducted during the Hindi Month in the offices and branches of the Bank including Head Office. The Hindi Diwas Celebration at Head Office involved dance and musical presentations.

22.COMPLIANCE DEPARTMENT

Bank has emphasized on compliance issues mandated by RBI. Bank has been ensuring the level of customer service, functions and compliance of rules of deposits, advances, KYC/AML, STR CTR under PMLA Act, other services, submission of statutory/ regulatory reports, information and data asked by RBI, GOI, SEBI & IBA, etc. through a strict compliance system. Compliance policy was prepared incorporating necessary changes to prevent breaches in compliance and the same has been circulated throughout the bank after board approval. Test checking of compliance functions was undertaken in844 branches. Deficiencies observed are being rectified on the spot. Branches/ offices have been sensitized about compliance functions so as to avoid breaches. Critical issues were reported and discussed at appropriate level to enhance system efficacy. Interactions are also being held with Inspection & Risk management departments periodically to discuss compliance issues to arrive at measures to avoid recurrence thereof.

23.LEGAL MATTERS

Law Department has ensured with utmost diligence effective legal assistance in preparation of legal opinions, legal vetting, research and correspondence as required by bank from time to time. Policies on ''Settlement of Claims in respect of deceased account holders and missing persons'' and ''Schedule of Advocate Fees'' have been reviewed in line with industry standards and circularized. Policy on ''Empanelment of Advocates'' has been reviewed to include nomination of Standing Counsel and engagement of legal retainer as well. Twenty five (25) Circulars have been issued highlighting, inter alia, the recent and important judgments of the Hon''ble Supreme Court and various other High Courts in relation to its applicability for the Bank, recent amendments in SARFAESI Act 2002, establishment of Special Courts under Section 435 of Companies Act, 2013, constitution of the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT), information on the Insolvency and Bankruptcy Code, 2016 (IBC,2016). The claim lodged against the Bank before various fora of law are defended by the Bank meticulously. Branches/Zonal Offices/Circle Offices have been sensitized using step by step guide to take action under SARFAESI Act, 2002, strategies and guidelines for effective monitoring and follow-up of DRT cases in order to augment Bank''s recovery. Cases filed against various defaulting borrowers/ guarantors are closely followed up by the Bank.

24. Government Business:

Successfully implemented and operationalised Pradhan Mantri Garib Kalyan Yojana (PMGKY) and Pradan Mantri Garib Kalyan Deposit Scheme(PMGKYDS) in our Bank. Under PMGKDS 185 Declarants have deposited 6.43 Crores through our Bank. There is an increase of 8930 (38%) accounts in PPF and 6334 (420%) accounts in SukanyaSamriddhi Scheme in the FY2016-17.

Successfully operational zed Sovereign Gold Bond Scheme (SGB) Tranche IV, V, VI and VII at all our Branches. Our Bank earned Non-interest income of Rs,55.11 lacs by mobilizing 179.43 Kgs worth of Sovereign Gold Bonds amounting to Rs,55.11 crores in FY 2016-17. Achieved 19% (3.91Crore) Y-O-Y growth in Turnover commission on Government Business along with commission on SGB and APY.

Very old outstanding Pension Paid entries substantially reduced through consistent follow-up with Branches/Zones. Achieved 86% Aadhaar seeding in Central Pensioner''s accounts. Provision to accept Digital Life Certificates (DLC) from Pensioners have been successfully implemented at all Central Pension paying Branches. 20638 DLCs received during the FY 2016-17.

Online Subscriptions facility through internet Banking for Sovereign Gold Bonds & APY has been implemented. Facility of downloading SGB certificate by Branches through UCO Online has been implemented. 1851 Branches have been registered with PFRDA for National Pension System (NPS) All Citizen model. Regular updating of Corporate website with respect to all Govt. of India Schemes. LTA (Life Time Arrears) &Aadhaar seeding field have been integrated in GBM module.

25.Awards to Bank:

- UCO Bank was awarded "MSME EXCELLENCE AWARDS-2016" by CIMSME under the below mentioned category during Jan''17:

- Best Bank for Promotional Scheme under Mid-Sized Bank-Winner.

- UCO BANK has been conferred with Special Award by National Payments Corporation of India (NPCI), recognizing excellent performance of the Bank in in select parameters of various NPCI products.

- UCO BANK has been awarded the runners-up under the category of "Best Payments Initiatives" amongst mid-sized banks for the year ended 2016, by Indian Banks'' Association (IBA).

- UCO Bank has been awarded Skoch Order of Merit Award -2016 for MIS Dashboard App.

- UCO Bank has been awarded Skoch Order of Merit Award - 2016 for HRMS Mobile App.

26.FUTURE PLAN:

FY 2016-17 had been a testing year for the banking industry. The bank, honed its resources, devised its strategies to achieve sustainable and progressive business for the future years. Bank will continue its emphasis on retail business, mobilization of CASA, and NPA recovery. Bank intends to improve its momentum in priority sector advances, including Agriculture and MSME advances. To increase Non-interest income, Bank is aiming to mobilize more non-fund based business and aggressive sale of banc assurance. Bank, would also take all measures to reduce other operating expenses.

Reserve Bank of India (RBI), through its letter dated 05.05.2017, communicated its decision to put Bank under Prompt Corrective Action (PCA) in view of high Net NPA ad negative ROA. Under the PCA framework, the bank will take steps to reduce NPA and improve profitability. As a part of action plan to improve profitability, Bank strives to reduce cost of deposits by increasing CASA. Customer service will be improved and standardized. Bank''s competitive CASA and technology products will be instrumental in the process of improving deposit mix and hence in increasing NIM (Net Interest Margin).

Bank, emphasizes on rigorous follow-up of overdue accounts to avoid slippage. Capturing and analysis of Early Warning Signals (EWS) and initiating corrective measures in a time bound manner, Judicious use of tools like NPA Tracker (android based app), DAILYRP (finale report) etc by the field functionaries, and formation of dedicated team for credit monitoring at each tier will improve asset quality. Bank will also use Many Against One (MAO) approach to use collective strength to speed up NPA recovery. Soft NPAs will be targeted for speedy resolution.

Bank will focus on these key areas, by involving all staff members to contribute with rigour, for the bright future of Bank.

27.BOARD OF DIRECTOR

27.1. Corporate Governance

Bank firmly believes in and has consistently practiced good corporate governance woven around its core values of transparency, professionalism and accountability. By constantly focusing on these aspects in its day-to-day operations, the Bank strives to enhance shareholders'' value. The Bank being committed to the principles of good governance, its Board of Directors has formed various committees of the Board to monitor every aspect of Bank''s business. The systems and business processes of the Bank are continuously reviewed at various levels for identifying and strengthening areas of weaknesses, if any. The Directors of the Bank believe that good governance is the key to earn trust, loyalty and goodwill of clients, business associates, employees and investors and also to have respectable position in the society at large.

27.2. Changes in the Board of Directors

- Mr Sunil Kumar Maheshwari served as Part-time Non-official Director in the Board from 21.06.2013 to 20.06.2016.

- Mr Salahuddin Ansari served as Part-time Non-official Director in the Board from 26.06.2013 to 25.06.2016

- Mr Anil Sharma has been nominated as Part-time Non-official Director under CA Director category w.e.f.30.07.2016.

27.3. Meetings of the Board of Directors

During the financial year 2016-17, Bank had 10 meetings of the Board of Directors. The number of meetings of various other committees of the Board held during the year 2016-17 is given below:

Sl.No

Name of the Committee

No. of meetings held

1.

Management Committee of the Board

13

2.

Audit Committee of the Board

8

3.

Risk Management Committee of Board

4

4.

Stake holders'' Relationship Committee of the Board

2

5.

Share Transfer Committee of the Board

4

6.

Special Committee for Monitoring Large Value Frauds

5

7.

Customer Service Committee of the Board

4

8.

Committee on HR Related Issues of the Bank

Nil

9.

Nomination Committee of the Board

2

10.

Remuneration Committee of the Board

Nil

11.

Strategy Committee of the Board

5

12.

Board Level Committee for Monitoring Recovery in NPA Accounts

5

13.

Committee of the Board for Disposal of Appeal Cases

3

27.4. Statement of Directors'' Responsibilities

The Board of Directors confirm that in the preparation of the annual accounts for the year ended March 31, 2017, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any. The accounting policies framed in accordance with the guidelines of Reserve Bank of India, were consistently applied. Reasonable and prudent judgments and estimates were made so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit of the Bank for the year ended March 31, 2017. Proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of applicable laws governing banks in India; and the accounts have been prepared on an on-going basis. International financial controls have been laid down by the bank for ensuring orderly conduct of business.

27.5. Acknowledgements

The Board of Directors places on record its deep appreciation of the contributions made by outgoing Directors namely, Mr. Sunil Kumar Maheshwari and Mr Salahuddin Ansari. The Board welcomes the new Director, Mr Anil Sharma and looks forward to his valuable inputs towards growth of the Bank. The Directors remain thankful to the Government of India, Reserve Bank of India and other regulatory authorities for their support and valuable guidance. The Board also thanks other financial institutions and correspondent banks for their co-operation.

The Board of Directors expresses its gratitude to the loyal customers for their trust and continuous patronage of the Bank. The Board also thanks the staff unions/associations and shareholders of the Bank for the support extended by them. The Directors place on record their deep appreciation of the dedication shown by each employee of the Bank.

(R.K.Takkar)

Date: 3°,h May, 2017 Managing Director &

Place : Kolkata Chief Executive Officer


Mar 31, 2015

Dear Members,

The Bank firmly believes in and has consistently practiced good corporate governance which is woven around its core values of transparency, professionalism and accountability. By constantly focusing on these aspects in its day-to-day operations, the Bank strives to enhance shareholders' value. The Bank being committed to the principles of good governance, its Board of Directors has formed various committees of the Board to monitor every aspect of Bank's business. The systems and business processes of the Bank are continuously reviewed at various levels for identifying and strengthening areas of weaknesses, if any. The Directors of the Bank believe that good governance is the key to earning trust, loyalty and goodwill of clients, business associates, employees and investors and respect from the society at large.

1.2. Changes in the Board of Directors

Mr. S. Chandrasekharan served as Executive Director in the Board from 01.10.2011 to 30.06.2014.

Mr. Charan Singh has been appointed as Executive Director with effect from 10.03.2015.

Mr. B.P. Vijayendra served as RBI Nominee Director in the Board from 06.09.2012 to 22.02.2015.

Dr. Arvind Sharma has been appointed as RBI Nominee Director in the Board w.e.f.23.02.2015.

Mr. Manoj Kumar Gupta served as CA Director in the Board from 02.08.2011 to 01.08.2014.

1.3. Meetings of the Board of Directors

During the financial year 2014-15, the Bank had 14 meetings of the Board of Directors. The number of meetings of various other committees of the Board held during the year 2014-15 is given below:

Name of the Committee No.of meetings held

Management Committee of the Board 14

Audit Committee of the Board 7

Risk Management Committee 4

Shareholders' Grievance Redressal Committee 2

Share Transfer Committee 4

Special Committee for Monitoring Large Value Frauds 4

Customer Service Committee 3

Committee on HR Related Issues of the Bank 5

Nomination Committee of the Board 3

Remuneration Committee of the Board 1

IT Strategy Committee of the Board 2

Board Level Committee for Monitoring Recovery in NPA Accounts 4

Committee for Disposal of Appeal Cases 2

1.4. Statement of Directors' Responsibilities

The Directors confirm that in the preparation of the annual accounts for the year ended March 31, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any. The accounting policies framed in accordance with the guidelines of Reserve Bank of India, were consistently applied. Reasonable and prudent judgements and estimates were made so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit of the Bank for the year ended March 31, 2015. Proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of applicable laws governing banks in India; and the accounts have been prepared on an on-going basis. Internal financial controls have been laid down by the bank for ensuring orderly conduct of business.

1.5. Acknowledgements

The Board of Directors places on record its deep appreciation of the contributions made to the deliberations of the Board by outgoing Directors namely, Shri S. Chandrasekharan, Shri B. P. Vijayendra and Shri Manoj Kumar Gupta. The Board would like to welcome the new Directors and looks forward to their valuable inputs towards growth of the Bank. The Directors remain thankful to the Government of India, Reserve Bank of India and other regulatory authorities for their support and valuable guidance. The Board also thanks other Financial Institutions and correspondent banks for their sincere cooperation.

The Directors express their gratitude to the loyal customers for their trust and continuous patronage of the Bank. The Board also thanks the Staff Unions/Associations and shareholders of the Bank for the support extended by them. The Directors place on record their deep appreciation of the dedication shown by each employee of the Bank due to which the Bank could achieve so many milestones.

For and on behalf of Board of Directors.

Date: May 21,2015 (Arun Kaul) Kolkata Chairman & Managing Director


Mar 31, 2014

I. PERFORMANCE OF THE BANK 2013-14:

3. UCO''S DELIVERY CHANNELS:

BRICK and MORTAR Network/ USBs / Bank on Wheels :

The Bank has a geographically well spread branch network in India and abroad. The Bank has 10 Circle Offices, 45 Zones and 2894 branches as on 31.3.2014, which includes four overseas branches,( two each in Singapore and Hong Kong). The Bank has two Extension Counters as of March, 2014.

The Bank has strengthened its PAN-India network by opening 280 branches during the year 2013-14, which takes the total number from 2610 in March, 2013 to 2890 in March, 2014. During the year 2013-14, 33 branches in Tier-V and 70 in Tier-VI centres were opened.

March, ''10 March ''11 March ''12 March ''13 March ''14

Branch 2152 2206 2394 2614 2894

In the year 2013-14, 482 Ultra Small Branches (USBs) were opened by the Bank to enhance Financial Inclusion in the unbanked regions. The total number of Ultra Small Branches stood at 1245 as of 31st March, 2014. The Bank has 24 "UCO Bank-on-Wheels" operating in 19 Zones covering 11 states.

To have a better focus and monitoring over the performance of branches, the Bank had opened four more Zones namely, Agartala, Solan, Hooghly, and Vijayawada in the year 2013-14. It takes the total number of Zones of the Bank from 41 in March, 2013 to 45 in March, 2014.

The population category-wise break-up of branches is given be- low.

Specialized Branches :

As of March, 2014, the Bank had six Flagship Corporate branches, 15 Mid-Corporate branches, 23 Service branches, 8 Asset Management branches and one Integrated Treasury Management Branch at Mumbai. The Bank continues to have 27 Retail Loan Hubs and 12 SME Hubs as of March, 2014.

As at the end of 31st March, 2014, the Bank had 76 City Back Offices covering 911 branches.

The Bank has a customer base of 25.84 million as at 31st March, 2014, as against 22.36 million at the end of the previous fiscal registering a growth of 16 percent.

Alternative Delivery Channels:

The Bank has joined National Financial Switch (NFS) which enables customers to access more number of ATMs across the country. As on 31.3.2014, we had 2085 ATMs, out of which 1450 were onsite and 635 were offsite. Bank has issued Debit –cum – ATM card through VISA. There has been good increase in the issuance of Debit Cards. We have issued 42,52,965 Debit cum ATM cards as on 31.3.2014 as compared to 27,43,543 cards during the financial year as on March 2013. The bank is issuing Rupay cards under financial inclusion and ATM enabled Kisan Cards linked to Kisan account. Internet banking facility is available to customers for utility bill payments, air and rail ticket booking, on line shopping, inter- bank and intra-bank fund transfer etc. Bank is also providing services like balance enquiry, account statement, transaction related SMS alerts, payment of Indirect taxes, Direct taxes and many other banking services.

31 March 2013 31 March 2014 Y-o-Y increase Onsite Offsite Total Onsite Offsite Total

CAPEX 587 225 812 712 224 936 15.27%

OPEX - 137 137 - 102 102 -

CPP 263 299 412 738 309 1047 154.12%

Total 886 475 1361 1450 635 2085 53.20%

Alternative Delivery Channel (ADC) --

Debit Card

as on March 2013 March 2014 Y-o-Y increase

Debit Card 27,43,543 41,52,965 51.3%

Type INTERNET BANKING USERS REGISTERED

RETAIL Users 155652 222438 42.9%

CORPORATE Users 36500 47790 30.9%

Total e-Banking Users 192152 270228 40.6%

Number of registered users for Mobile-Banking 26628 41803 57.0%

MOBILE BANKING :

The Bank has implemented Mobile Banking services during the year 2011-12, whereby customers can take advantage of conducting their banking transactions through mobile phones. Customers through this mobile banking facility are now performing banking activities like balance enquiry, account statement, mobile recharge, intra & inter-bank funds transfer with their mobile handset using SMS/GPRS modes of connection.

4. BUSINESS PROFILE :

The global business of the Bank grew by 15.64 percent from Rs.305000 crore in 2012-13 to Rs.352697 crore in 2013-14, whereas Bank''s domestic business rose by 16.34 percent from Rs.277591 crore in 2012-13 to Rs.322958 crore in 2013-14. Global Deposits of the bank grew by 15.05 percent from Rs.173431 crore in 2012- 13 to Rs.199534 crore in 2013-14. Domestic Deposits grew by 15.37 percent from Rs.158386 crore in 2012-13 to Rs.182730 crore in 2013-14 .

The Bank''s global advances rose to Rs.153163 crore in 2013-14 from Rs.131569 crore in 2012-13 registering a growth of 16.41 percent. Domestic advances of the bank registered a growth of 17.64 percent from Rs.119205 crore in 2012-13 to Rs.140228 in 2013- 14.The global credit deposits ratio stood at 76.76 in 2013-14 as compared to 75.86 of the last year.

The overseas business of the Bank showed an increase of 8.50 percent and stood at Rs.29738 crore as on 31st March 2014. The total deposits of the overseas branches increased from Rs.15,045 crore as of March 2013 to Rs.16803 crore as of March 2014, thereby showing an increase of 11.69 percent. The overseas advances increased by Rs.571 crore and reached at Rs.12,935 crore as of 31st March, 2014 registering Y-O-Y growth of 4.62 percent.

CASA Deposits:

Domestic CASA deposits of the bank increased from Rs.55374 crore in 2012-13 to Rs.58884 crore registering a growth of 6.34 percent. Percentage of domestic CASA to domestic deposits stood at 32.14. The bank''s Saving deposits reached at Rs.33530 crore as of March 2014 compared to Rs.29680 crore, registering a growth of 12.97 percent and Current deposits stood at Rs.25353 crore as at March 2014 .

Employee''s Productivity:

Business per employee of the Bank improved from Rs.13.43 crore as at March 31, 2013 to Rs.15.28 crore as at 31st March 2014. Net Profit per employee also improved from Rs.2.72 crore as of March 31, 2013 to Rs.6.55 crore as of March, 31, 2014.

Profitability:

The Bank earned an operating Profit of Rs.4940 crore during the year 2013-14 from Rs.3357 crore during the financial year 2012-13 and recorded a growth of 47.16 percent. Net profit of the Bank rose by 144.34 percent from Rs.618 crore in 2012-13 to Rs.1511 crore in 2013-14.

Income and Expenditure:

The Bank''s total income rose by 10.43 percent from Rs.17704 crore in 2012-13 to Rs.19550 crore in 2013-14. The Bank''s interest income rose by 8.82 percent from Rs.16752 crore in 2012-13 to Rs.18230 crore in 2013-14. The non- Interest income of the Bank improved by Rs.369 crore from Rs.952 crore in 2012-13 to Rs.1321 crore in 2013- 14. The interest expenditure of the bank increased by 0.01 percent from Rs.12170 crore as at 31.3.2013 to Rs.12171 crore as at 31.3.2014. Operating expenditure of the bank increased by 12.03 percent from Rs.2177 crore as on 31st March 2013 to Rs.2439 crore as on 31st March 2014. Net Interest Income grew by 32.23 percent from Rs.4582 crore in 2012-13 to Rs.6059 crore in 2013-14.

5. CAPITAL :

Net worth of the Bank has increased to Rs.10284.89 crore during the financial year ending 2013-14 from Rs.8869.17crore. During the year. Bank has issued 262080580 Equity Share of Rs.10 each at price of Rs.77.19 amounting to Rs.262.08 crore to Government of India.

Capital Adequacy Ratio:

As per Basel III framework, the Bank''s Capital Adequacy Ratio of 12.68 percent which was higher than the regulatory requirement of 9 percent. Details of Capital Adequacy (Basel-III) are shown as under.

(in Rs. crore)

Particular 31.03.2014

CRAR(%) Amount

Tier- I 8.71 10157.22

Tier- I 3.97 4627.31

Total Capital 12.68 14784.53

Risk Weight assets - 116636.78

6. TREASURY & INVESTMENT MANAGEMENT

The Bank has been performing its Treasury & Investment Operations keeping track of the macroeconomic scenario and market developments in accordance with the regulatory guidelines issued by the Reserve Bank of India from time to time as also the Bank''s Corporate Investment Policy approved by the Board of Directors. In the changed scenario, where state of the art technology is providing cutting edge in Treasury & Risk Management, the Bank has also embarked upon a globally deployable Integrated Treasury Management Solution for an effective and efficient way to optimize resource utilization and maximize returns on investment/trading.

In order to mitigate risk and balance sheet management, the bank has gone for interest rate swap transactions. During the year 2013-14, the Bank toiled through the hostility of severe market volatility and despite all odds the bank could significantly improve the yield of its Investment portfolio.

The global investment (Gross) of the Bank during the year 2013- 14 grew by 29.19 percent from Rs.52, 515 crore as on 31.03.2013 to Rs.67,845 crore as on 31.03.2014. The domestic investment grew by 28.32 percent from Rs.51, 335 crore as on 31.03.2013 to Rs.65,875 crore as on 31.03.2014. SLR investment registered a growth of 22.30 percent during the year 2013-14 touching the level of Rs.53,017 crore compared to Rs.43,347 crore in March 2013. Non SLR investment (domestic) registered a growth of 60 percent to reach a level of Rs.12, 782 crore from Rs.7,988 crore in 2012-13, mainly on account of State Govt Bonds for DISCOMs. The yield on domestic investment improved significantly from 7.59 percent as on 31.03.2013 to 7.79 percent as on 31.03.2014. Total investment income has registered an average growth of 20.66 percent recording Rs.4,386 crore in 2013-14 compared to Rs.3635 crore in 2012-13.

EXPORT FINANCE:

With 74 ''B'' Category Branches, across India, UCO Bank is committed to actively cater to the needs of its Exporters. Export Turnover of the Bank during the Financial Year ended March, 2014 stood at Rs.33,226.97 crore which is 67.96 percent higher than previous year. Our Bank''s Export credit outstanding during 31st March, 2014 is Rs.2,519.40 crore, registering a growth of 3.78 percent over 31st March, 2013.

''UCO Bank,'' is the sole Bank to facilitate bi-lateral trade with Iran by agreeing to receive payment in INR for Iranian oil exports to India. Simultaneously, to boost exports under this Rupee Payment mechanism, ''UCO BANK'' negotiated 524 export bills amounting to Rs.6127 crore cumulative from April, 2013 to March, 2014. The Export Credit outstanding as of 31st March, 2014 on account of Iran Trade is Rs.450.45 crore.

In order to promote exports, during FY 2013-14, Bank organised around 125 exporter meet/ workshop/ seminar at important export- originating centres in the country. Bank is also catering to ECB needs of the customers.

7. SOCIAL BANKING:

Priority Sector Advances:

The Bank has been showing significant performance in lending to Priority sector over the years and has been effectively servicing to the priority sector and agriculture with its vast network of rural and semi-urban branches.

i) Priority Sector Lending:

During the year 2013-14, the Priority Sector Advance of the Bank stood at Rs.51965 crore constituting thereby 42.71 percent of Adjusted Net Bank Credit(ANBC). The Y-o-Y growth of Priority Sector advances stood at 48.63 percent.

ii) Agriculture Advances:

Total Agriculture advances of the Bank stood at Rs.16642 crore constituting 13.68 percent of ANBC. Direct Agriculture Credit stood at Rs.11166 crore constituting 9.18 percent of ANBC and Indirect Agriculture credit stood at Rs.5476 crore constituting 4.50 percent of ANBC. The Y-o-Y growth of total Agriculture Advances stood at 31.82 percent and under Direct Agriculture 11.82 percent.

iii) Micro, Small & Medium Enterprises(MSME)

Bank recognizes the important role of MSME in the economic development of the country and helping in generating employment opportunities in the country .The Bank has recorded a healthy growth in MSME Sector during 2013-14. Under Micro & Small Enterprises (MSE) Bank advance stood at Rs.26389 crore and under Micro, Small & Medium Enterprises (MSME) Rs.30828 crore as of 31st March 2014. The Y-o-Y growth of MSE Advances stood at 60.71 percent.

iv) Advances to Weaker Sections:

Advances to Weaker Section stood at Rs.14319 crore as of 31st March 2014, with percentage to ANBC being 11.77. The Y-o-Y growth of advance to Weaker Section stood at 38.66 percent.

v) Minority Community Advances:

Total Minority Community Advances of the Bank stood at Rs.7285 crore constituting 14.02 percent of Priority Sector Advances.

The Bank has two unique schemes - (1) "UCO Uthaan"-for upliftment of BPL families & (2) "UCO Samagra Gramin Vikas Yojna" – Adoption of villages for its all round development.

UCO Uthaan Scheme: Social-cum-Financial upliftment scheme for BPL families

Under the Scheme, villages having a large number of BPL families are adopted by the Bank through its nearest branch to bring the BPL families out of the clutches of poverty and bring about a holistic change in the villages. Under the scheme, a holistic development plan of the villagers is drawn up and followed for covering areas like education, financing for rural housing, formation of SHG and micro-financing, development of handicrafts and rural artisans, extending finance under DRI Scheme.

The Bank has adopted 12 villages in 4 states i.e. Odisha, Rajasthan, Uttar Pradesh & West Bengal for upliftment of BPL families under UCO Uthaan Scheme.

The Bank has conducted several financial literacy camps in these villages and has provided financial assistance particularly to BPL families to improve their livelihood, to generate more income so that they come out from Poverty line.

By these efforts, out of 2968 BPL families in these 12 villages, 1821 families have come out above Poverty Line and are earning their livelihood in a better way with the assistance provided by the Bank during last 2 years. In 3 villages all 636 BPL families have come out above Poverty Line. These uplifted families in 12 such villages are generating their income by adopting several activities like Dairy farming, Goatery, Betel leaf cultivation, vegetable growing, Cycle repairing, Shoe mending, Fruit vending, Grocery shop, Tea stall, Bidi making, Trolley plying, Mason Jobs etc. By these activities household income has increased by 20- 25 percent.

UCO Samagra Gramin Vikas Yojna : For all-round development of village.

The Bank has adopted 10 villages in 6 states i.e. Gujarat, Himachal Pradesh, Odisha, Kerala, Uttar Pradesh & West Bengal for its alround development under UCO Samagra Gramin Vikas Yojna.

In these villages, the Bank has conducted financial literacy camps to educate the villagers, extended financial support to them and has also initiated developmental activities under Corporate Social Responsibility. Under financial assistance, the Bank has given General Credit Cards (GCC) to small traders, Artisan Credit Cards (ACC) to artisans, Kisan Credit Cards (KCC) to farmers, loan to SHGs, loan for doing animal husbandry activities, loan to women & SC/ST beneficiaries. With the help of Bank loan many small traders have started their own business. Under CSR activities in these villages, the Bank has given Ceiling Fans, Water purifiers to different schools, Steel almirah, Books for school library, School uniform to school going children, installation of hand pumps for drinking water in the villages, installation of Solar street lights in the villages, construction of metallic road.

In 2 villages, out of above 10 villages, the Bank has provided doorstep banking facilities to the villagers of these unbanked villages through Mobile Van. The Van visits these 2 villages on a predetermined day and time during the week and provides all types of banking facilities to the villagers at their doorstep. There has been increase in the saving habits of the villagers due to this initiative. Through these vans, villagers are also being financially educated.

By these activities, there is an all round development in the adopted villages and the villagers are very much benefited.

Awards to Bank

- Ministry of MSME, Govt. of India awarded National Award to UCO Bank for implementation of PMEGP scheme in the North-East Zone for the year 2012-13.

- UCO Bank bagged "MSME BANKING EXCELLENCE AWARDS-2013 from CIMSME under following categories.

- Jury Award for New Initiative

- Best Branding Award

- UCO Bank received SKOCH RENAISSANCE AWARD 2013

for Development.

Ministry of Rural Development, Govt. of India awarded UCO Bank as 3rd Best Bank for nurturing the RSETI movement in the country for the year 2012-13.

UCO Bank received Global Sustainability Award from World CSR Congress under the category "Outstanding Social Impact".

8. FINANCIAL INCLUSION:

Financial inclusion plays a critically important role in poverty reduction, reducing income disparities and enhancing economic growth. If broadly defined, refers to universal access to a wide range of financial services at a reasonable cost. These include not only banking products but also other financial services such as insurance and equity products. The essence of financial inclusion is to ensure delivery of financial services which include bank accounts for savings and transactional purposes, low cost credit for productive, personal and other purposes, financial advisory services, insurance facilities etc.

Under the financial inclusion plan, bank has followed three models: i) BC Model ii) 24 Mobile vans with CBS connectivity iii) Brick and Motor branches opened in the unbanked villages. Bank has also introduced Kiosk Banking Model and it was launched on the foundation day of the bank. Kiosk banking model was developed with an intention to make financial inclusion more of a business promotive than obligatory through individual BC, individual grocery / medical / fair price shop owners / PCO operators and to engage CSC e- governance.

Under the financial inclusion bank has covered 5528 unbanked villages during the year and cumulative figure reached at 9635 villages with banking facility to the people. During the year 2013- 14, Bank has opened 14.60 lakhs of Basic Saving Bank deposits accounts and cumulatively touched at 40.23 lakhs as on 31st March 2014. The Bank has established 482 USBs during the year and total reached at 1245 as on March 2014. Bank is the pioneer in implementation of Mobile van banking for providing banking facility in the unbanked villages. It has deployed 24 Mobile Vans with Core Banking connectivity for online banking. Our Mobile vans cover 132 unbanked villages with population of 2000 and above and nearby small villages with population of less than 2000.

Direct Benefit transfer (DBT) and Direct Transfer for LPG (DBTL) :

The Bank has taken a number of steps for smooth roll out of Direct benefit Transfer in the 117 districts out of 121 districts identified for implementation of the schemes. Our branches in these districts have opened accounts of 43,429 beneficiaries.

Direct Benefit transfer for LPG (DBTL) :

Our Bank has been assigned with lead bank responsibilities in 16 districts out of 293 districts under the DBTL scheme which the Bank has implemented and monitoring the progress of implementation of the scheme by opening the account of the LPG consumer and seeding their Aadhar number in their accounts in all banks operating in these 16 districts. As our Bank is a lead bank, hence the responsibilities of our District Manager is to monitor the progress of all banks operating in the district and ensure that Aadhar number has been seeded in 12.65 lakhs of LPG consumers.

New initiatives for implementation of Financial Inclusion:

1. Financial Inclusion Gateway: Bank has Commissioned FI Gateway & Central Biometric Authentication Server to introduce interoperability of transactions through the BC Agents. This will create an avenue for the Bank to give an opportunity to the customers to transact with BCs of the Bank and BCs of other Banks.

2. Bank has developed Kiosk Banking solution named as UCO Samaveshan Sarathi with its launching on 6th January, 2014 on Bank''s foundation day as an alternative model to bring progress in Financial Inclusion in the villages allotted to the Bank. It is a Web Based Kiosk Banking Solution; a noble initiative of Bank; is a part of FI Gateway Project to open new avenue of Secure and hassle free Banking Services for the financially excluded group in the society, who are covered through our Financial Inclusion Project.

9. RETAIL BANKING

The year 2013-14 being the year of Retail Business, the Bank''s focused efforts resulted in good performance. In this direction, the Bank came out with various competitive and innovative products in both asset and liability side and also several modifications were done in existing asset products.

Retail Liability Portfolio

Under Liability portfolio, the Bank had launched special term deposit schemes to boost growth of term deposits of (Rs.5 crore) such as UCO Dhan Laxmi Scheme, UCO Century Scheme, UCO Double Century Scheme, UCO Monthly Income Scheme, UCO Triple One, which significantly added to our deposit portfolio. Department re-launched UCO Sowbhagya Scheme, a Recurring Deposit Scheme which was a great success. Bank also launched a special saving scheme for paramilitary armed forces named UCO Veer Shakti. These schemes were a huge success and contributed to the growth of the Retail Portfolio of the bank.

Schematic Retail Lending

Under Asset portfolio, the Bank had launched new loan schemes such as UCO CA scheme, UCO Top Up Home Loan Scheme, UCO Corporate Home Loan Scheme. Also, the Bank modified existing retail asset products such as UCO Home loan Scheme, UCO Pension Loan scheme, UCO Shopper loan, UCO Property Loan in line with market demand.

The Bank introduced the concept of having business facilitator in the branches to increase the retail business of the bank. UCO HOME loan scheme registered a growth of 57 percent and UCO Car loan scheme 275 percent during 2013-14.

Actuals Growth

Parameters FY13 (in Crs) FY14 (In Crs) Absolute (In Crs) Percentage (%) UCO Home 5196 8176 2980 57

UCO Car 772 2896 2124 275

UCO Gold 1805 2384 579 32

UCO EDUCATION 1141 1262 121 11

10. BANCASSURANCE

In Bancassurance – Life, Bank is the Corporate Agent of Life Insurance Corporation of India, the only Public Sector Life Insurance Company, since August 2003.

During the Financial Year 2013-14, Bank mobilized 33358 Policies and First Premium of Rs.62 crore registering a YOY growth of 21 percent.

In Group Credit Life Insurance, Bank has a group credit life insurance cover for the educational loan borrowers since July 2009 in tie-up with Kotak Mahindra Old Mutual Life Insurance Ltd. During the current Financial Year, Bank introduced other two Group Credit Life Insurance Cover Schemes for Home Loan and other Retail Loan Borrowers (UCO Cash, UCO Two Wheeler, UCO Car, UCO Doctor and UCO Properties) in tie up with the same Kotak Life Insurance.

In Banc assurance - Non-Life, Bank initially was the Corporate Agent of National Insurance Company Ltd, from September 2003 to end of April 2009. Since 30th September 2009, Bank has entered into a Corporate Agency tie-up with Reliance General Insurance Company Ltd. (RGICL) for its Non-Life Insurance Business. During this Financial Year, Bank mobilised 89503 Policies and Premium of Rs.35 crore registering a YOY growth of 10 percent. Besides, there are other three insurance products viz. (1) ''UCO Griha Raksha Policy'' to cover the House Properties/ Assets, (2) ''UCO Griha Raksha Plus'', a Home Loan Protector offering cover to the Home Loan borrowers against default in repayment of loan in the event of death/permanent total disability arising out of accident and being diagnosed for contracting any of the listed critical illness and (3) ''Reliance Healthy Family Policy'' a medi claim insurance scheme in tie up with the same RGICL.

In Mutual Fund Business, Bank continues its distributorship tie- up relation with eight Mutual Fund Houses of good repute viz. Franklin Templeton, ICICI Prudential, Kotak, Reliance, UTI, Birla Sun Life, Baroda Pioneer and SBI Mutual Fund.

11. RECOVERY:

The increasing trend of NPAs in the Banking Industry over last two-three years has become a great challenge to the banks. In our bank also Gross NPA has increased substantially during the period and as on 31.03.2013 GNPA had increased to Rs.7130 crore from Rs.4086 crore as on 31.03.2012. The increase in volume of impaired assets over previous years was due to fresh slippages during the period over its previous years on account of various reasons which include legacy angle. However, in the current FY 2013-14, the Gross NPA of the Bank has reduced to Rs.6621 crore from Rs.7130 crore in the corresponding period of previous year due to higher recovery/up-gradation during the period.

Main reason of high level of NPA is due to the global recession coupled with economic slowdown in the country. Large number of big borrowal accounts across the country have suffered slippage in the recent past due to non fulfillment of the repayment obligations in time. Besides, the bank''s earlier policy of concentration on bulk business was also one of the reasons of higher slippages.

Due to various recovery actions against the defaulting borrowers coupled with close monitoring of borrowable accounts, the quality of assets have started improving in the FY2013-14. Moreover, the Bank has changed its business model from its earlier Bulk business to Retail business for last two-three years which has likely helped in arresting higher slippages in the Bank. The result has also started forthcoming and as on 31.03.2014, GNPA ratio of the Bank is reduced to 4.32 percent from a high of 5.53 percent as on 31.12.2012 and 5.42 percent as on 31.03.2013. Consequently the NNPA ratio has also come down to 2.38 percent in the current FY 2013-14 from its 3.17 percent in the corresponding period of the last year. Maintaining Bank''s asset quality and recovery of dues are engaging the attention of top management and are being monitored practically on daily basis.

Recovery performance :

The performance of recovery & up gradation in NPA accounts during the FY 2013-14 has substantially improved over the previous years. Recovery performance in the current FY is more than double the figure of corresponding period of the last year. The robust performance of recovery in the current year is due to the various recovery measures being undertaken by the bank including assignment of impaired assets to the SCs/RCs for early resolution of the cases. During the FY 2013-14, bank assigned 133 NPA accounts to ARCs involving Rs.1869 crore as against sale of Rs.2.96 crore in 1 account in the last FY 2012-13.

(In Rs. Crores)

Particulars 31.03.2012 31.03.2013 31.03.2014

Cash Recovery 658 828 2015

Up gradation 417 673 1032

Total 1075 1501 3047

Loss assets (ML & tech w/off a/as) 83 117 295

Recovery in loss assets has a direct bearing in the profitability and Bank is attaching priority in monitoring/follow up in such accounts. There has been substantial increase in recovery in loss assets in the current FY over the previous years and Bank has created a separate vertical in Recovery department for effective monitoring of loss assets and its recovery.

Committee approach for follow up & monitoring of recovery in NPA accounts.

For the purpose of strengthening the monitoring mechanism of recovery performance, a committee approach is adopted by the Bank for different purposes.

i) Board Level Committee has been constituted in our Bank where CMD, EDs & Govt. nominee Director are members of the Committee for monitoring of recovery Performance of NPA accounts. Progress of recovery in all such NPA accounts is being monitored by this Committee periodically and report is being submitted to the Board accordingly.

ii) CMD/EDs of the Bank are personally monitoring the large NPA accounts particularly top 30 NPAs through personal meeting the borrowers at different centers or through video conferencing at our Circle Office level. This attempt has at least created a psychological pressure on them.

iii) General Manager, Recovery is visiting Circles/Zones with high concentration of NPAs to take first hand stock of situation and conducting meetings with Branch Heads, Advocates, EAs/ RAs in order to remove the bottlenecks of recovery.

iv) for effective monitoring of the NPAs, Asset Management Branches (AMBs) are in operation in various centers of the country depending upon the concentration of NPAs. The performance of AMBs is reviewed by various controlling offices at regular intervals.

Other Recovery actions initiated by the Bank for effective recovery:

Various recovery measures have been adopted by the Bank for boosting up recovery in NPA/ML accounts and to bring down the GNPA of the Bank. We enumerate our action plans as under:

- ABC analysis of NPA portfolio is done for minimizing NPAs through up-gradation and cash recovery, particularly for freshly generated NPAs wherever immediate scope of recovery is there.

- In case of viable units, Bank extends its hand holding approach towards them by way of restructuring/ reschedulement for its revival.

- Initiation of actions under SARFAESI Act immediately in case the unit is not viable after the account becomes NPA in all eligible accounts followed by taking possession and auction sale of the property(ies).

- Filing of Recovery suits in DRT/ Civil courts and identification & declaring borrowers with outstanding balance of Rs.25.00 lacs and above as ''Wilful Defaulters'' as per RBI guidelines.

- Decreed cases, where details of assets of borrowers and/or guarantors are not available, are being handed over to the detective agency for identification of their other unencumbered assets, if any.

- In deserving cases, Bank is filing application with DRTs/ Civil Courts to direct the Borrowers / Guarantors for surrender of their Passports with Passport authority especially in large NPA cases.

- Bank is filing caveat in SARFAESI cases of all big NPA accounts in apprehension of filing SA by the borrowers/guarantors to stop bank''s actions under SARFAESI act.

- Wherever needed, winding up petitions are filed for early/effective recovery.

- For effective monitoring the performance of AMBs, review meetings with Branch Heads of AMBs have been conducted at Head Office, Recovery Department in addition to regular reviews through video conferencing.

- Country wide Lok Adalat being held periodically by the Bank to boost up recovery in NPA accounts and during the FY 2013-14 recovery made through this channel is Rs.15.39 crore against recovery of Rs.9 crore during the last year. Bank also participated in the country wide National Lok Adalat held on 23.11.2013 in which recovery of Rs.5.89 crore was made.

12. CREDIT MONITORING

System based monitoring mechanism of advances has been put in place and Special Watch Reports and Reports on Overdue are generated and posted on UCO Online where from all concerned i.e., Branches, Zones and Circles can have the access to the reports so that focused monitoring for timely recovery of over dues can be effected. The frequency of generating Annexure V has been increased and now this important monitoring report is generated every week so as to know the overdue position and has been found useful for launching swift drives of recovery.

There are various monitoring tools used as obtaining of MSOD, QMR and HMR in large borrowal accounts, stock statement and conducting stock inspections for maintaining asset quality. Conducting Legal Audit, Stock Audit and Credit Audit as per extant policy guidelines has been ensured and especially Credit Audit reports are being used as one of the important tools for early warning signals.

Credit Audits are being conducted by Specialist Officers (Chartered Accountants) posted at Circle Offices /Zonal Offices and in Credit Monitoring Department, HO.

A separate vertical for monitoring of retail loans has been formed in the department with a view to prevent slippages under this segment. Bank has switched over to 100 percent system driven identification of NPAs as on 31st March 2014. More thrust has been given pertaining to branch officers meeting the borrowers for effecting timely recovery.

Department has also geared up to provide information as per the revised reporting system on large borrowal accounts with aggregate exposure of Rs.10.00 crores and above to CRILC data base maintained by RBI in order to bring about discipline among the borrowers.

13. RISK MANAGEMENT

During the financial year 2013-14, Bank has put in place a few new initiatives in the area of risk management. A new score card model for all Retail, MSE and agriculture loans up to one crore has been developed in house and implementation on pilot basis is going on in one Zone. Enhancement in our existing Rating Models for big advances has been effected and the testing of the efficiency of the new models vis-a-vis the existing models in predicting the probability of default is in progress at user level. Market Risk Management Policy has been comprehensively revised. Stress testing policy is put in place and is implemented for liquidity position under various stress scenarios. Dynamic Liquidity Statement is being prepared every month with time horizon of three months and Back Testing of Dynamic Liquidity projections has been implemented. Under operational Risk Management a separate Loss Data Management Policy is put in place.

14. REGIONAL RURAL BANKS:

There are two RRBs sponsored by our Bank. Those two are Bihar Gramin Bank having its Head Office at Begusarai (Bihar) and Paschim Banga Gramin Bank having its Head Office at Howrah (West Bengal). All RRBs taken together have a network of 519 branches as on 31st March 2014.

Recapitalisation of RRBs:

The total amount of Recapitalisation of Paschim Banga Gramin Bank as on 31.03.2014 stood at Rs.153.01 crore (Govt. of India), Rs.107.11 crore (Sponsor Bank) & Rs.45.90 crore (Govt. of West Bengal). Similarly, in Bihar Gramin Bank, it stood at Rs.107.07 crore (Govt. of India), Rs.74.95 crore (Sponsor Bank) & Rs.32.12 crore (Govt. of Bihar).

Performance of RRBs (Unaudited)

In respect of performance under key business parameters , total deposit of RRBs sponsored by the Bank stood at Rs.6245 crore as on 31.03.2014, registering growth of 14.09 percent. Total advance reached a level of Rs.3437 crore with an annual growth of 48.17 percent as of 31.03.2014. CD ratio of RRBs improved from 42.09 to 55.03 as on 31.03.2014.

The gross NPA of the RRBs stood at Rs.149 crore as on 31.03.2014 vis-à-vis Rs. 168 crore as on 31.03.2013. Gross NPA to Gross Advance reduced from 7.29 percent as on 31.03.2013 to 4.34 percent as on 31.03.2014. The net NPA ratio of the RRBs (NNPA) as on 31.03.2014 stood at 2.68 percent.

Bihar Gramin Bank has recorded a net profit of Rs.79 crore as on 31.03.2014 as compared to Rs.42.71 crore as on 31.03.2013 and Paschim Banga Gramin Bank has also reported a net profit of Rs.19 crores thereby reducing accumulated loss to Rs.98 crore as on 31.03.2014.

15. INFORMATION TECHNOLOGY

1. Biometric Authentication for CBS Application:

- Biometric authentication has been implemented in 1273 branches for logging to Finacle application. As of 31.03.2014, 9052 users of the above 1273 branches are allowed to log in to CBS application only after Bio-metric authentication.

- By April 2014, it is expected that biometric authentication would be completed in 1974 branches with 15000 users covering 96 percent of Bank''s business.

2. CBS Migration of Overseas Branches:

- Two branches in Hong Kong were successfully migrated to CBS on 4th Feb 2013.

- The Singapore Centre has been migrated to Finacle on 03/03/2014.

3. Unique Customer Identification Code (UCIC)

- Based on PAN number, Mobile number, Aadhar number & Passport number, multiple CUST ids available in the database, has been identified for merging.

Technological Upgradation During April, 2013 - March, 2014

1. Grid CTS:

Northern Grid

- NPCI has identified 21 centers from the states of Delhi, Uttar Pradesh, Uttarakhand, Bihar, Jharkhand, Jammu & Kashmir, Punjab and Rajasthan for implementation of CTS under Northern Grid. NPCI has directed bank to complete the CTS implementation in a phased manner. The Centers to be covered under the first phase are Jaipur, Amritsar, Agra and Jalandhar. Implementation of CTS at Jaipur, Amritsar, Agra and Jalandhar has been completed. The timeline set by NPCI for completion of the project is extended to 30th April 2014.

Southern Grid:

MICR centres:

- Total 29 MICR centres have been migrated to CTS in Southern Grid comprising of 23 MICR centers from Southern states and 6 centres Kolkata, Chandigarh, Ludhiana, Bhubaneswar, Guwahati and Cuttack.

NON-MICR centres:

- 4 Non MICR centres in Tamil Nadu have been migrated to CTS Southern Grid.

Western Grid:

- CBO Mumbai went live on CTS Western Grid on 26th August 2013 on pilot basis. CBO Mumbai is processing all the inward instruments centrally. 21 CBO centres from the States of Maharashtra, Goa, Rajasthan, Madhya Pradesh, Chhattisgarh, Gujrat are participating in CTS Western Grid.

2. SFMS:

- SFMS platform is available for all the branches for sending/receiving LC.

3. Integrated Treasury Management Solution (ITMS) Project :

Money Market Modules has been made on-line w.e.f. 16.12.2013 with Call/Term/Notice Money - Borrowing/ Lending, Mutual Fund equity/Preference Shares and Venture Capital Fund.

Fixed Income Modules (except CSGL) has been made parallel w.e.f. 10th March 2014 comprising of a) Treasury Bills b)Central Govt Securities c) State Development Loans d) Bonds e) Debentures f) Security General Ledger g) STP with NDS Systems.

Remaining Money Market Modules have also been made parallel w.e.f. 10.03.2014 to take care of -

1. Liquidity Adjustment Facility (LAF):a) Repo b) Term Repo c) Marginal Standing Facility (MSF) d) Reverse Repo and

2. Collateralized Borrowing & Lending Obligation (CBLO).

4. In-House Software Development:

The Bank has developed following software in house-

- Electronic Voucher Checking System (EVCS) for supplementary checking has been developed and made live since 21st September 2013.

- Conducted Computer Literacy Exam for promotion process.

- Branch Visit Report for Zonal Managers has been made live from 16th August 2013.

- Legacy to CBS (14 digit) Account Number Conversion Utility (ANCU) for NACH-ECS Credit Clearing files as per the advice of NPCI done. The package has been live since last week of November, 2013.

- Online facility module for "submission of monthly progress report of probationary officers (PO/MBA) is developed and is live.

- Online Annual Property Return (APR) module is developed and is live.

The following softwares are in development phase:

- Visitor Management module has been developed and tested. It is under trial run.

- Iranian Vostro Management Solution is being developed to manage/ monitor Iranian Vostro Account Transactions. All the masters (Applicant, Beneficiary, User etc) have been made live for data feeding purpose. Module for Swift Message MT103 & MT202 has been developed & tested. Developments of remaining LC related modules are in progress.

- A module has been developed for ''Inclusion of statements pertaining to Law department in Bank''s MIS and deployed for testing by Law department.

- Bank has developed and integrated a module in Finacle for issuance of ''Inflation Indexed National Saving Securities- Cumulative, 2013("The Bonds") issued by RBI in consultation with Govt of India.

- A new menu ''DUPCUST'' is provided in Finacle for use by branches at pre account opening stage to ascertain if customer is already having account with Bank.

- The Bank has developed a module for submission of online application form for the promotion of Sub-staffs, & Clerks.

- Loss Data Management System & Letter Tracking System is under development by Bank''s in-house development team.

- Bank has developed a module to capture the details of Fixed assets purchased prior to 01.04.2012.

16. OPERATION AND SERVICES :

During the year 2013-14, the Bank has come out with Business Continuity Plan Policy. "UCO Sujhav" a webpage in UCO online provide opportunity for the staff member to give their suggestions to improve the procedures and processes. The same has been operationalized during 1st quarter of 2013-14.

i) ATM Switch and Finacle Cash Tally - Development of In-house package. An in-house package has been developed to check the differences, if any, in the cash balance between ATM Switch and respective ATM cash A/c in Finale (GL A/c). Automatic e-mails will be generated and sent to the branches having difference in aforesaid heads for immediate rectification with a copy of the said e-mail to Zone and Circle concerned for monitoring.

ii) Use of ADMIN Cards - Development of In-house package. For ensuring usage of ADMIN Cards properly by the branches while loading cash in ATMs to match the cash position, Bank has developed a system (package ) to check whether the branches are using the ADMIN Cards while loading cash.

iii) Monitoring of reconciliation between CBO and branches in their jurisdiction - Software is developed in-house to compare the balances of Service Branch and balances of branches. If balances are not brought to zero on every Friday day-end/Saturday day beginning, automatic e-mail is being sent to CBOs and respective branches with a copy to Zonal/Circle Office concerned for immediate rectification.

Customer Grievances Redressal :

There is a well defined Grievances Redressal Mechanism in the Bank and efforts are made to resolve the complaints within the time frame. Customer complaints are resolved completely to the satisfaction of customers. The standardized Public Grievance Redressal System, a completely system based grievance management system, facilitating a customer to lodge on-line complaint by visiting Bank''s Website was successfully launched w.e.f 01.11.2013. The system has auto acknowledgement facility. The same system provides the facility to different administrative set-ups as well as branches to enter and maintain the complaints received through other modes.

Government Business:

- Revised procedure has been implemented for receipt of challans and payment of cheques issued by Geological Survey of India (GSI) and Indian Bureau of Mines (IBM) and thereby claiming reimbursement from link cell Sitabuildi Branch Nagpur (0296).

- Tamil Nadu State Government Tax collection scheme has been integrated with our internet banking for all types of tax collection of Tamil Nadu Government from Dec 2013 onwards.

National Pension System (NPS): The Swavlamban Scheme under National Pension System was successfully customized under Government Business Module of Finacle and made operational in the month of January, 2014 for use by the branches for enrolment of subscribers under the scheme.

Frequency of Branch Visits by Zonal Managers has improved . Bank has reviewed the a) Compensation Policy b) Deposit Policy c) Unclaimed Deposit Policy and d) Grievances Redressal Policy in order to incorporate the RBI Guidelines.

17. CORPORATE COMMUNICATIONS :

Bank has taken up various initiatives through various channels namely Print Media, Outdoor Media, Digital and sponsorship for publicity, public relations, CSR activities and dissemination of requisite information to customers and common public at large ultimately to build and maintain a brand-image that is relevant, customer-oriented and trustworthy.

a) Publicity Campaigns:

Print Media:

Print media is an effective medium to connect to masses, and Corporate Communications has utilised it effectively by carrying out intensified and vigorous publicity campaigns throughout the FY 2013-14. Liability products, viz, UCO Double, UCO Triple One, UCO Double Century, Dhanvarsha, Dhanlaxmi, UCO Tax-Saver, Sowbhagya, UCO Savings Account were publicized through print media. Asset products, viz., UCO Home Loan, CAR Loan, CA Loan and Festival Bonanza scheme for UCO Home and Car loan were also promoted during the period.

With a thrust on routing the transactions through alternate channels and making banking more personalized and customer- oriented, E-Banking, M-banking, Online FDR facility were publicized through Print media during the period.

Publication of financial results in leading national and local dailies was also carried through Print Media.

Radio Jingles and Television Commercials:

Electronic media aided by technological development has widened its reach to remotest corner of country. Campaigns through Television were carried for promoting bank''s debit card facility. Radio jingles were carried out during Foundation Day for spreading its message to its customers and common public at large after completion of 71 glorious years of its existence.

Rural Publicity:

Rural publicity is an integral part of publicity-campaign for Bank having pan-India and strong rural presence and can not be overlooked. Bank has promoted and monitored various rural publicity campaigns through circle offices located across the country. Wall-Paintings, announcements by Rickshaw, Loan- Fairs, etc were carried out for promoting awareness about products and services offered by bank.

b) Celebration of 72nd Foundation Day:

On occasion of completion of 71 glorious years of its existence, bank celebrated foundation day on 6th January 2014 with great zeal and enthusiasm. Employees and executives of the Bank participated in the Road Show from Founder''s Branch to General Administration Department, Russel Street, Kolkata. During the celebration, Asset and Liability products viz, UCO Home Loan, UCO Car Loan, MIS, Sowbhagya were publicized through Banners and standees at venue and road-show. Circle and Zonal offices across the country organised various events viz, plant sapling, blood-donation and free health check-up camps on the occasion. Super achievers under different categories were felicited at Head Office and Circle Offices. Also, Customers having log-term relationship with Bank were honoured by the Bank.

c) Public Relations:

l Press Meet:

Dissemination of information and coverage of important events and occasions viz, Financial Results, Awards & Recognition, Opening of new branch & ATMs is prerequisite for strengthening the public relations. During the FY 2013-14, Corporate Communications department of the Bank, organised press meets for declaration of quarterly and yearly financial results and as required from time to time.

l Press Release:

Timely coverage of important events plays an integral role in creating awareness about important events and achievements of Bank. Corporate Communications department of the Bank arranged for press-release of financial results, foundation day celebrations, annual business meet and other important events in leading national and local newspapers throughout the FY 2013-14.

d) Corporate Social Responsibility:

Bank believes that carrying out CSR activities helps in creating tangible value-creation and ultimately contributing to brand- image. Moreover, CSR creates a positive image in the mind of customers and society at large. This creates a sense of belongingness and loyalty in existing and prospective customers. During the financial year 2013-14, following CSR activities were carried out by the Bank :

- Financial assistance of Rs.100 lacs to the Prime Minister''s Relief fund for the victims of Uttarakhand Floods-2013.

- Financial assistance of Rs.155 lacs to 1204 number of schools adopted by our Rural and Semi-Urban branches in form of Fans/Water Purifiers/Toilet Blocks.

- Financial assistance of Rs.4.62 lacs to "Aim for Seva" for its Free Student Homes, Jeypore, Odisha.

- Financial assistance of Rs.15.69 lacs to Akal Charitable Hospital for procuring Ambulance Van in service of tribal/ rural underprivileged critical patients.

- Financial assistance of Rs. 3.13 lacs to Kamakhya Debutter Board, Guwahati for purchase of one ambulance for assisting primary health care service.

- Financial assistance of Rs.2.54 lacs to Ramakrishna Mission Ashrama, Kothar, Bhadrak, Odisha.

- Financial assistance of Rs.15 lacs to Chief Minister''s Relief Fund for rehabilitation of cyclonic storm "Phalin" affected people, under Bhubaneswar Circle.

- Financial assistance of Rs.3.5 lacs to the Prisons Department of Himachal Pradesh Government for procurement of one vehicle for use as"mobile canteen" for prisoners.

- Financial assistance of Rs.22 lacs for installation of 100 solar lights towards development of 23 villages adopted during centralised inauguration of 7 branches under Circle office lucknow at Rae Bareli.

- Financial assistance of Rs.10.72 lacs for procurement of Tipper to Panaji Muncipal Corporation, Mumbai, under Mumbai circle office.

18. HUMAN RESOURCE MANAGEMENT:

Human Resources play an important role in the growth of an organization. Human resources department is instrumental in creating a vibrant organisational culture in which employees are encouraged and motivated to perform their best. Human Capital plays a vital role in accomplishment of corporate goals. Banking is a service oriented industry and achievement of business goal of Bank depends on good service provided to customers . In order to provide efficient customers service, recruitment of talented people is essential.

MANPOWER

The total Staff Strength as on 31st March,2014 stood at 24557, including employees serving overseas, 14 of which are expatriate officers. The total domestic staff strength of 24543 comprises of 11580 Officers, 8421 Clerks and 2785 Subordinate staff and 1757 Sweepers.

The percentage of Scheduled castes (4827) and Scheduled Tribes (1583) taken together In the total domestic staff strength is 26.09. Besides, there are 2435 OBC employees in service of the Bank at the end of March, 2014 and 1126 employees belong to Minority Communities. The total work force constitutes 17.80% women employees (4371) as of March, 2014.

During the year 2013-14 pre-promotion trainings were imparted to SC/ST candidates as per Government of India directives.

Recruitment

Bank has recruited 1209 officers during the year 2013-14, which comprises of 186 SCs, 87 STs and 299 OBCs and 408 Women. 889 Clerks have also been recruited during the year 2013-14, of which includes 112 SCs 87 STs, and 271 OBCs,304 women, 37 Ex-servicemen,4 dependents of Ex-servicemen and 23 persons with disabilities and 67 persons belonging to Minority Communities. Moreover, the Bank has also initiated the process of recruitment of 2100 Clerks, 1300 Probationary Officers and 600 Generalist Officers in Scale-II (CA-150 , MBA – 300, ICWA -100 and CFA-50) during the year 2014-15.

Promotions

During the year 2013-14, Bank promoted 5 Executives to Top Executives Grade scaleVII, 8 Executives were promoted from ScaleV to Top Exewcutive Grade ScaleVI and 7 Executives were promoted from Scale IV to Scale V. Besides 67 officers were promoted to ScaleIV, 433 to ScaleIII and 342 to Scale II. In addition, under specialist category, 4 officers were promoted from Scale III to Scale IV, 8 officers were promoted to Scale III and 6 officers to Scale II. Further, during the period 374 Clerical Staff were promoted to Officers Cadre. Promotion from sub-ordinate to clerical cadre was also completed. Permission was granted to Zones for recruitment of 323 peons and 292 sweeper during the financial year.

Industrial Relations

During the period, the Industrial Relations climate in the Bank remained healthy and cordial between the Management and the Unions/Associations. IR meetings and discussions were held with Unions/Associations at periodic intervals through mutual co- operative attitude and respect during the financial year 2013-14.

Personnel Services

A separate Pensioners Grievance Cell for retired Staff members has been established. Simplified Family Pension format for Family Pension introduced. Pensioners Corner for our Pensioners has been put in our Bank''s Website. In Group Medi claim Insurance, the individual Buffer coverage has been increased from Rs.2.00 Lac to Rs. 3.00 lac for 5 in-service employees. Holiday Home facility at Shirdi, Tirupati and Mussourie is extended for the year 2014- 15.

Training

Top Management of the Bank gives due weighage to training because human resources in the Bank is the most valuable asset and this asset not only require proper care but also skill development and upgradation of knowledge. Concept paper on Training policy of the Bank has been prepared by Training Department. Emphasis was given to conduct more and more locational and camp based training programmes that are organized at Zonal Office level, taking care of current problems faced by the staff at grass root level. A total of 1077 clerks, 8766 officers and 139 sub-staffs were trained under in house training programmes in Central Staff College and Regional Training Centers of the Bank across the country upto Feb 2014.

A special training called CHETNA-III was conducted where 7286 clerical and 2100 subs-staffs were trained at Zonal Office level, where every aspects like basic retail products, behavioral science ,motivation etc were covered. 634 Field Officers were specially trained on Priority Sector Lending. More than 5560 officers and 1100 subs-staffs were trained location ally at Circle level. The detail of the topics covered for respective employee categories were Credit Appraisal, NPA Management, Priority Sector Lending, LAPS, Unicode, CBS, Security Aspects, Managerial Skills, Finacle Operation, Leadership Development etc.

Bank has sent 264 Officers/Executives to other Training Institutes like NIBM (Pune), CAB (Pune),IIBM (Guwahati), BIRD (Lucknow), IIBF (Mumbai), IDRBT (Hyderabad) and many other Institutes. During the financial year, Bank has sent six executives for overseas training programme also. Training schedule for women employees was also prepared by Training Department. One training per employee per year is the ultimate goal of the Bank.

The Bank is going to open 3 new Regional Training Centres at Durgapur, Pondicherry and Shillong. Bank is constructing additional classrooms /accommodation at their Central Staff College and Regional Training Centres for optimum capacity utilisation of faculty, space and quality time.

Initiatives by HRM Department

Launch of UCO Sadasya on Facebook.

UCO Sadasya is the name given to the profile exclusively for UCO bank staff members. It''s an initiative to connect all our staff members at once by overcoming the geographical barriers. This medium is best suited for the staff members who need to communicate, talk, discuss, and share their activities /concerns. As Facebook is very commonly used by most of the existing staff members for social interaction with their friends, relatives, other staff members, etc., UCO SADASYA was launched on 14.03.2014 in Facebook.

Attractions for staff members:

Facebook would be used to share information and data relevant and useful to the employees in their day to day office work. It would be used as a platform to share information on various retail products, divided into two broad categories, deposit products and other relating to loans and advances. Through this medium various staff related queries regarding retail products, job profile, branch performance, targets, etc. will be answered.

Through UCO Sadasya, various outperforming staff, branches, Zones and Circles will get recognition and their achievements will be shared with the entire UCO family. It will work as a medium to upload pictures, videos, news relating to any event or functions organized at the Head Office level, Zonal level or at the Branch level, etc. This initiative would be available at all time for all staff members, with an option to share or even download at their end for personal use. The Human Resource Management department will manage/monitor UCO Sadasya at present.

Annual Property Return Package – 2014

In terms of Regulation 20 (2) UCO Bank Officer Employees'' (Conduct) Regulation 1976 as amended, every Officer is required to submit Annual Property Return Statement (Form B, C, D & E) as on 31st March every year. As per the directives of the Central Vigilance Commission (CVC) Govt. of India, the Chief Vigilance Officer of the Bank is required to furnish a compliance certificate to this effect to CVC by 30th June every year.

In order to have better monitoring and timely completion of Annual Property Return (APR) submission process, the Bank decided that for the year ending 31.03.2014 onwards APRs up to Scale VII will have to be filled up Online. After development of APR – 2014 package, it was made live in UCO Online.

Achievements of SC/ST/OBC Cell of Head Office, HRM Department

The Bank has been implementing reservation policy of Government of India. Reservation and other relaxation and concessions extended to SC/ST/OBC/Persons With Disability (PWD) and Ex-Servicemen employees of our Bank is strictly adhered. As per GOI guidelines the Department imparted Pre- Promotion Training to 840 candidates (SC-590 and ST-250) belonging to SC/ST category. The motive behind organizing such training was to bring such SC/ST candidates up to the level of other candidates. Also, in order to educate HR functionaries working at various Zonal Offices regarding Reservation Policy of Government of India and maintenance of Reservation Rosters, the Department arranged training programmes in Varanasi and New Delhi. 17 officers working in different Zonal Offices participated in the training programme. Further, a separate workshop on writing of Reservation Roster and Reservation Policy of Government of India was organized at Central Staff College, Kolkata on 3rd and 4th March, 2014 on the above subject in which 17 officers representing various Zonal Offices participated in the programme. Also, in order to address the issues of SC/ST and OBC employees of the Bank periodical meetings are being held at Apex level as well as at Zonal Office level with welfare association of such employees.

19. AUDIT & INSPECTION

The Bank has a well-established Audit and Inspection Department that examines adherence to the Systems and Procedures. Bank has comprehensive Inspection and Audit Policy for undertaking Internal Inspections, Concurrent Audit, Revenue Audit, Risk Based Internal Audit, and information System Audit. The guidelines received on various issues of Internal Control from Reserve Bank of India. Government of India, Board and Audit Committee of the Board have become part of the internal control system for better risk management.

During the year 2013-14, the Bank has given focused attention to close overdue inspection reports outstanding for more than 3 months by rectification of major & other irregularities. The regular branch inspection report is the most comprehensive feed-back to the management about compliance of the Bank''s systems and procedure and guidelines at operational level.

A focused attention is given to bridge the knowledge gap of Inspecting Officers (Mobile) by imparting periodical training to them for putting the system and procedure of the Bank at a desired / better level.

The major achievements during 2013-14 was that the Bank has successfully implemented System based Risk Based Internal Audit in compliance to Basant Seth Committee recommendation and also out of total revenue leakage detected Rs.55.50 crore, Rs.48.38 Crore was recovered on the spot by internal/external auditors concerned.

20. VIGILANCE:

Vigilance Department of the Bank is headed by the Chief Vigilance Officer (CVO) of the rank of General Manager who is on deputation from State Bank of Travencore. The Vigilance Department focuses on initiation and dissemination of preventive vigilance measures.

During the year 2013-14, CVO has visited 112 branches and quite a few administrative offices to create awareness among staff members. In the field level, field vigilance officers also visited 285 branches to plug the loopholes in the existing system to prevent recurrence of similar frauds and to strengthen the preventive vigilance. The Vigilance Department also conducted four training programmes for EOS and POS covering more than 135 officers all over the country for imparting knowledge for expeditious conclusion of RDA cases. It also conducted training programme for officers of CBI to acquaint them with Bank''s system and procedures for investigation of bank frauds. The department has also compiled Vigilance Manual for the Bank and unveiled it in the Annual Business Meet of the bank held on 21st & 22nd April, 2014.

21. MANAGEMENT AUDIT AND HR AUDIT:

During the year 2013-14 the department has conducted Management Audit in 13 Zonal Offices, 6 Circle Offices, and Four Corporate Departments. The Reports have been closed in all cases after getting the irregularities rectified by the concerned Authorities. So far Performances related to HR Audit is concerned, H R Audit (Manpower Assessment) of 6 Specialised Branches (FCC, Treasury and CBO) and 11 Corporate Departments were conducted during the period under Review. Observations/directions of the Competent Authority in respect of such Reports have been forwarded to the respective departments for taking necessary action.

22. MANAGEMENT INFORMATION SYSTEM:

To ensure timely and consistent submission of returns, RBI had proposed for automation of the data flow from the Banks ,since most of the reports were being submitted manually. Under the aegis of Core Banking Platform our Bank has implemented Automated Data Flow (ADF) to comply to the direction of RBI.

The Automated Data Flow has been implemented and within the stipulated time frame, Bank has delivered 132 RBI reports applicable to us and are ready for online submission to RBI through ADF portal. At present 132 RBI Reports are available and as per XBRL taxonomy supplied by RBI, 13 reports are ready for online submission to the RBI in XBRL format.

To reap the additional benefit of ADF under CBS environment, Bank is also utilizing the ADF platform for single source of data to cater to all the concerns both external (RBI , Government, etc) & internal authorities (Corporate Departments) steps have been taken to remove data inconsistency.

Bank has taken steps for integrating discrete systems like GBM, ATM, e-Banking , ALM , Treasury & International Division and Overseas Branches to have all information in the palm for proper control & monitoring of business & draw meaningful business continuity plan .

Bank has also initiated action for Business intelligence ( BI) tool for effectively monitoring the business growth & taking timely corrective action wherever necessary. Training on BI tool has been imparted to all IT skilled officials of Circles, who can utilize the benefit of BI tool for monitoring & accessing business performances of Zones & Branches.

23. COMPLIANCE OF OFFICIAL LANGUAGE POLICY

The Bank has taken proactive steps to implement the Official Language Policy of Govt. of India and has meticulously taken steps to comply with the provisions of the Official Languages Act and the Rules made there- under. The Bank has also taken appropriate follow-up action to implement the directives as contained in the Annual programme with regard to the use of Official Language Hindi issued by Government of India, Ministry of Home Affairs, Dept. of Official Language and also endeavored to achieve various targets prescribed in the said programme. The Bank has also given preferred attention to comply with the instructions of Financial Services Department, Ministry of Finance and Reserve Bank of India regarding the use of Hindi in official work.

Ninety Seven Hindi Workshops were organised by the Bank for the Officers and employees to motivate them to do their work in Hindi. Total 2199 Officers / employees were trained through these Hindi Workshops. In view of the directives of Govt. of India to promote ''UNICODE'' application on all the computers, a session was allotted in these workshops to acquaint all Officers and employees with its application and activation. Apart from this, Officers/employees were nominated to attend 5 days Basic computer training programme conducted by Dept. of Official Language, Ministry of Home Affairs, Govt. of India.

449 branches were inspected by Official Language Officers posted at different Zonal offices, 4 Zonal offices, and one department of Head Office were also inspected by Chief Manager(O.L.) posted at Head Office during the period under review to evaluate the performance in the area of implementation of Official Language Policy of Govt. of India and necessary remedial measures were also taken to remove the deficiencies observed in such inspections.

During the period under review a seminar on the subject was successfully organized by Zonal Office, Lucknow and Dharamshala.

During the period under review 5 day Translation training programme for Hindi Officers was organized at our Central Staff College, Kolkata under the aegis of Central Translation Bureau, Govt of India. Our Bank successfully organised ''HINDI UNICODE WORKSHOP'' for the Executives of all Public Sector Banks & Financial Institutions posted in the Kolkata Pin Code area under the auspices of Kolkata Town Official Language Implementation Committee (Banks'').

In view of the requirement to accelerate the pace of implementation and effective compliance of Official Language Policy of Govt. of India at Head Office, a two day motivation programme for the Official Language Officers and Nodal Officers posted in various departments of Head Office was organised at our Central staff College, Kolkata. In addition, monthly meeting is also held to review the progress made and difficulties being faced in compliance of the OL Policy of the Union at HO.

Zonal Office Jaipur, Raipur, Mumbai, Indore, Jodhpur, Ahmedabad, Ranchi, Pune, Chandigarh, Coimbatore and Bhopal continued to publish Hindi e-magazines during the period under review.

Our Bank successfully organised various competitions, rendered editorial assistance to other Public Sector Banks & Financial Institutions in conducting ''HINDI UNICODE WORKSHOP'' & ''Hindi workshop'' under the auspices of different TOLIC''s.

Various forms / publicity materials / procedural booklets and report of Annual General meeting of Shareholders, Manual of Instructions, Minutes of various Board Committees were prepared in bilingual form. Hindi text of the materials for our Bank''s Website was also prepared. Sufficient amount was allocated by the Bank for the purchase of classic literary Hindi books, dictionaries, technical glossaries, Hindi books on computer/banking etc. and famous literary books in regional languages written by renowned litterateurs.

In view of effective monitoring of the work with regard to the use of Hindi in official work, the position of our Bank was vividly reviewed in the meetings of Apex Official Language Implementation Committee of the Bank.

"Hindi Month", "Hindi Fortnight", "Hindi Week" was celebrated enthusiastically at Head Office as well as Zonal Offices, Central Staff College, Regional Training Centers and Branches.

During the period under review Zonal Office, Patna and Zonal Office, Jalandhar were awarded 1st Prize / Shield and Zonal Office, Ranchi, Zonal Office, Bhubaneswar and Zonal Office, Dharamshala were awarded 2nd Prize by TOLIC Patna, Jalandhar, Ranchi, Bhubaneswar and Dharmashala respectively

The Third Sub-Committee of the Committee of Parliament during their visit to Kolkata inspected our Head Office on 4th October, 2013 in respect of implementation of Official Language Policy in our Bank and expressed their satisfaction on observing the steps taken by our Bank for augmenting the use of Official Language Hindi in official work. The Drafting and Evidence sub Committee of the Committee of Parliament also discussed regarding about implementation of Official Language Policy with the Chairman and few member Banks of TOLIC, New Delhi including our Zonal Office, Delhi on 11.01.2014.

24. COMPLIANCE:

The Bank has emphasized on compliance issues as mandated by RBI. The Bank has been ensuring the level of customer service, functions and compliance of rules of deposit, advances, KYC/AML, other services, prompt submission of statutory/ regulatory reports, information and data asked by RBI, GOI, etc. through a strict compliance system. Compliance Policy – 2013 was prepared incorporating necessary changes to prevent breaches in the areas of compliance functions and the same has been circulated to all branches and offices of the Bank after due approval by the Board of Directors in its meeting held on 10.04.2013. During the year, Test Checking of compliance functions has been undertaken in 333 branches and 8 corporate offices. Deficiencies observed are being rectified on the spot and branches/offices have been sensitised about compliance functions so as to avoid compliance breaches. Critical issues were reported and discussed at the appropriate level to enhance efficacy of the system. Interactions are also being held with Inspection Department & Risk Management Department periodically to discuss issues relating to compliance functions and to suggest measures to avoid recurrence thereof.

25. LEGAL MATTERS :

The Law Department of the Bank plays a significant role in the various legal matters of the Bank. It is acting as a facilitator and attends to various matters covering opinion, documentation, litigation etc., emanating from various functional departments at Head Office, Circles/Zones, branches and overseas branches. The department has organized a 3-day workshop for Law Officers during 2013-14. Hand Book on SARFAESI was prepared and sent to all branches/offices for reference and exhaustive guidelines issued for filing and handling of DRT cases. Bank conducted various workshops at Circle Offices to streamline monitoring and follow up of cases filed by and against the Bank.

The department regularly advises the Circle and Zonal offices about further course of action to be taken in DRT and SARFAESI cases, BIFR, CGIT, NI Act and other cases filed by and against the Bank.

Exhaustive guidelines including latest amendments in various Acts and Case Laws affecting bankers have been issued on topics covering DRT, SARFAESI, Indian Registration Act, Maharashtra Stamp Act, liabilities of legal heirs as borrower, New Companies Act, Lok Adalat etc,. Matters pertaining to agreement for sale & assignment of assets, finalisation and execution. Loan document for UCO Pensioners'' Scheme was also introduced by the department.

26. FUTURE PLAN:

During the year, Bank has further strengthened its retail base on both Liability & Assets side. Bank''s focus will continue to remain towards Retail business model and credit flow other than retail advances will mainly constitute potential segments/sectors which have low risk weights. However, with the improvement in Economic Scenario and with Govt''s intervention to create a favorable investment climate for development of Infrastructure facilities in the country, bank will take a call to participate in New large projects. Keeping in view the significant performance in priority sector lending and inclusion of large number of rural population into the bank''s fold through direct agriculture, allied activities & MSE advances, Bank will continue to strive for maintaining the sustainability of providing small loans to rural & semi urban population.

Another area of focus shall remain the customer acquisition campaigns in all geographical regions of the country through branch network spread, through Ultra small branches and other out - reach programms.

Leveraging the technology to provide convenient & safe banking for customers will continue to remain focused. Technology upgradation with changing times and in sync with new business initiatives/opportunities will always remain the facilitator for delivery & control tool for the management. Keeping in view the sentiment of consolidation of Retail business across various sectors of the economy, Bank will sum up the year 2014-15 for third time in succession as "Retail Business Year".

27. BOARD OF DIRECTORS:

Corporate Governance

The Bank firmly believes in and has consistently practiced good corporate governance which is woven around its core values of transparency, professionalism and accountability. By constantly focusing on these aspects in its day-to-day operations, the Bank strives to enhance shareholders'' value. The Bank being committed to the principles of good governance, its Board of Directors has formed various committees of the Board to monitor every aspect of Bank''s business. The systems and business processes of the Bank are continuously reviewed at various levels for identifying and strengthening areas of weaknesses, if any. The Directors of the Bank believe that good governance is the key to earning trust, loyalty and goodwill of clients, business associates, employees and investors and respect from the society at large.

Changes in the Board of Directors

Mr. N.R.Badrinarayanan served as Executive Director in the Board from 01.09.2010 to 30.06.2013.

Mr. J.K.Garg has been appointed as Executive Director with effect from 05.08.2013.

Prof. S.L.Morris served as Shareholder Director in the Board from 13.07.2010 to 12.07.2013.

Mr. Sunil Kumar Maheshwari has been appointed as Part Time Non-Official Director in the Board w.e.f.21.06.2013.

Mr. Salahuddin Ansari has been appointed as Part Time Non- Official Director in the Board w.e.f. 26.06.2013.

Meetings of the Board of Directors

During the financial year 2013-14, the Bank had 13 meetings of the Board of Directors, 14 meetings of the Management Committee of the Board, 9 meetings of the Audit Committee of the Board. The number of meetings of various other Committees of the Board held during the year 2013-14 is given below:

Sl No. Name of the Committee No. of meetings held

1. Management Committee of the Board 14

2. Audit Committee of the Board 9

3. Risk Management Committee 5

4. Shareholders Grievance Redressal Committee 3

5. Share Transfer Committee 5

6. Special Committee for Monitoring Large Value Frauds 3

7. Customer Service Committee 4

8. Committee on HR Related Issues of the Bank 2

9. Nomination Committee of the Board 1

10. Remuneration Committee of the Board 1

11. IT Strategy Committee of the Board 3

12. Board Level Committee for Monitoring Recovery in NPA Accounts 4

13. Committee for Disposal of Appeal Cases 3

Statement of Directors'' Responsibilities

The Directors confirm that in the preparation of the annual accounts for the year ended March 31, 2014, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any. The accounting policies framed in accordance with the guidelines of Reserve Bank of India, were consistently applied. Reasonable and prudent judgements and estimates were made so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit of the Bank for the year ended March 31, 2014. Proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of applicable laws governing banks in India and the accounts have been prepared on an on-going basis.

Acknowledgements

The Board of Directors places on record its deep appreciation of the contributions made to the deliberations of the Board by out- going Directors namely, Shri N.R.Badrinarayanan, and Shri S.L .Morris. The Board would like to welcome the new Directors and looks forward to their valuable inputs towards growth of the Bank. The Directors remain thankful to the Government of India, Re- serve Bank of India and other regulatory authorities for their sup- port and valuable guidance. The Board also thanks other Financial Institutions and correspondent banks for their sincere co-operation. The Directors express their gratitude to the loyal customers for their trust and continuous patronage of the Bank. The Board also thanks the Staff Unions/Associations and shareholders of the Bank for the support extended by them. The Directors place on record their deep appreciation of the dedication shown by each employee of the Bank due to which the Bank could achieve so many milestones.

For and on behalf of Board of Directors,

Date: May 29, 2014 (Arun Kaul)

Chairman & Managing

Kolkata

Director


Mar 31, 2013

1. BUSINESS PROFILE:

The Bank has crossed Rs. 3,00,000 lakh crore of business as of 31st March, 2013, which is a milestone in Bank''s history.

The year 2012-13 was ''Retail Business Year'' for the Bank. The Bank has been successfully able to transform itself in following retail business model. On Asset side, the focus which the Bank laid on retail advances, particularly financing of ''UCO Home'', ''UCO Car'' and ''UCO Gold'' resulted into a growth of 22.30 per cent during the year 2012-13.

The emphasis on portfolio of LC Bill discounting resulted in reducing the dependence on corporate credit. LC bill discounting portfolio increased from Rs. 4215 crore as of 31.03.2012 to Rs. 12615 crore as of 31.03.2013, thereby showing an increase of Rs. 8400 crore. In fact, the major growth of incremental advances during the year 2012-13 was from Retail and Priority Sectors along with LC bill discounting portfolio.

On Liability side, the increase in CASA portfolio, particularly that of Iranian funds as also increase in term deposits portfolio of less than Rs. 5 crore brought down the dependence on bulk deposits, thereby the proportion of bulk deposits C-D getting reduced from 46 per cent as of 31st March, 2012 to 28 per cent as of 31st March, 2013.

During the year 2012-13, the Bank showed a respectable growth in all business parameters. The global business of the Bank increased from Rs.2,71,507 crore as of 31st March, 2012 to Rs. 3,05,000 crore as of 31st March, 2013, with a growth of 12.34 per cent. In deposits, the growth was 12.62 per cent, increasing from Rs. 1,54,003 crore as of 31st March, 2012 to Rs. 1,73,431 crore as of 31st March, 2013. In advances, the growth was 11.97 per cent.

SL NO. Particulars FY 12 FY 13 GROWTH

Global - (In Rs. Cr) A bsolute Percentage

(i) Deposits 154003 173431 19428 12.62

(ii) Advances 117504 131569 14065 11.97

(iii) Total Business 271507 305000 33493 12.34

The domestic business of the Bank showed an increase of 11.10 per cent or in absolute terms Rs. 27734 crore and stood at Rs. 277591 crore as of 31st March, 2013. The total domestic deposits increased from Rs. 142017 crore as on 31st March, 2012 to Rs. 158386 crore as on March 31,2013; thereby showing an increase of Rs. 16369 crore or 11.53 per cent. Total domestic advances increased by 10.54 per cent with an absolute growth of Rs. 11365 crore and stood at Rs. 119205 crore.

SL NO.Particulars FY 12 FY 13 GROWTH

Domestic - (In Rs. Cr) Absolute Percentage

(i) Deposits 142017 158386 16369 11.53

(ii) Advances 107840 119205 11365 10.54

(iii)Total Business 249857 277591 27734 11.10

Per branch business improved from Rs. 104.54 crore as of March, 2012 to Rs. 106.36 crore as of March, 2013. In terms of Per branch deposits, it increased from Rs. 59.42 crore as of March, 2012 to Rs. 60.68 crore as of March, 2013. Per branch advances also improved from Rs. 45.12 crore as of March, 2012 to Rs. 45.67 crore as of March, 2013.

The Bank''s CASA deposit to total domestic deposit ratio stood at 34.96 per cent up from 23.85 per cent last year. The Bank''s Savings deposits reached Rs. 29680 crore as at March, 2013 compared to Rs. 26267 crore as on March, 2012, registering a growth of 12.99 per cent and current deposits at Rs. 25694 crore as at March, 2013 showed a growth of 238.08 per cent from Rs. 7600 crore as at March, 2012.

SL NO. Particulars FY 12 FY 13 GROWTH In Rs. Cr) Absolute Percentage

(i) Current 7600 25694 18094 238.08

(ii) Savings 26267 29680 3413 12.99

(iii Domestic 33867 55374 21507 63.50

(iv) CASA Ratio 23.85 34.96

During the year, the Bank added over 25.10 lakh CASA customers.

The overseas business of the Bank showed an increase of 26.60 per cent and stood at Rs. 27409 crore. The total deposits of the overseas branches increased from Rs. 11986 crore as of March, 2012 to Rs. 15045 crore as of March, 2013; thereby showing an increase of 25.52 per cent or in absolute terms Rs. 3059 crore. The overseas advances increased by Rs. 2700 crore or 27.94 per cent and stood at Rs. 12364 crore as of 31st March, 2013.

The global per employee business of the Bank has increased from Rs. 12.47 crore as of March, 2012 to Rs. 13.43 crore as of March, 2013.

SL NO. Particulars FY 12 FY 13 GROWTH In Rs. Cr) Absolute Percentag



(i) Deposits 11986 15045 3059 25.52

(ii) Advances 9664 12364 2700 27.94

(iii Total Business 21650 27409 5759 26.60

2. PROFITABILITY:

The operating profit of the Bank, during the year 2012-13, increased by 19.41 per cent from Rs. 2811.42 crore during 2011-12 to Rs. 3357.09 crore in 2012-13. However, the net profit of the Bank showed a decline by 44.24 per cent from Rs. 1108.67 crore during 2011-12 to Rs. 618.20 crore in 2012-13. The decrease in net profit has been primarily due to heavy provisioning on account of NPAs. Total provision requirement for the entire financial year was at Rs. 2739 crore, compared to earlier year''s provision of Rs. 1703 crore. The provision for only NPAs during the year 2012-13 was Rs. 1779 crore vis-a-vis Rs. 756 crore in 2011-12.

Net Interest Income of the Bank showed a healthy growth of 17.41 per cent during 2012-13 with Cost to Income Ratio coming down by 2.91 percentage points in the same period.

Total Income for the full year FY 2013 was Rs. 17704 crore compared to Rs. 15598 crore for FY 2012. The Bank''s interest income for the whole year was at Rs.16752 crore compared to

Parameter 31.03.12 31.03.13 Change(%) As on 31.03.12 As on 31.03.13

Net Interest Income 3902.10 4581.53 17.41

Variation

Cost of Income 42.24 39.33 (-) 2.91

Rs.14632 crore for FY''12. Total expenses for the whole year was Rs. 14347 crore compared to Rs. 12787 crore for FY12. Operating expenses reached Rs.2177 crore during the entire year compared to Rs.2056 crore for FY12.

Parameter 31.03.12 31.03.13 As on 31.03.12 As on 31.03.13

Book Value per Share 94.72 97.19

Net Interest Margin (Global) 2.77 2.34

Return on Assets 0.69 0.33

3. CAPITAL :

During the year, the Bank allotted 8,79,16,343 equity shares to Government of India on preferential basis at an issue price of Rs. 77.46 per share determined in accordance with SEBI ICDR Regulations, 2009. Bank had received Rs. 681 crore from Government of India against allotment of above equity shares.

The total capital of the Bank as on 31st March, 2013 stood at Rs. 2575.63 crore. The Reserves and Surplus stood at Rs. 7106.78 crore as on 31st March, 2013.

4. CAPITAL ADEQUACY RATIO:

The Bank continues to maintain healthy capital base. As at March, 2013, Capital Adequacy Ratio as per Basel-II norm stood at 14.15 per cent (as against a mandatory requirement of 9 per cent) with a Tier I capital ratio at 9.05 per cent (as against mandatory requirement of 6 per cent). Adequate headroom is now available under both Tier-I and Tier-II options to raise capital to support business growth. Government shareholding as at 31st March, 2013 stood at 69.25 per cent. The Bank has a strong Common Equity Capital to meet the stringent Basel III norms during the current year.

(Rs. in Crore)

2011-12 2012-13

Sl. No. Capiital Adequacy Ratio (%)

1. Tier I (Absolute) 7890.76 9157.13

2. Tier II (Absolute) 4151.46 5140.94

3. Total Capital (I II) (Absolute) 12042.22 14298.07

4. Tier I (%) 8.09 9.05

5. Tier II (%) 4.26 5.10

6. Basel-II (%) 12.35 14.15

7. Basel-I (%) 11.03 12.43

5. TREASURY & INVESTMENT MANAGEMENT:

The Bank has been performing its Treasury & Investment Operations keeping track of the macroeconomic and market developments in accordance with the guidelines issued by the Reserve Bank from time to time as also the Bank''s Corporate Investment Policy approved by the Board of Directors. In the changed scenario, where state of the art technology is providing cutting edge in Treasury and Risk Management, the Bank has also embarked upon a globally deployable Integrated Treasury management Solution for an effective and efficient way to optimize resource utilization and maximize returns on investment/ trading.

In order to mitigate risk and balance sheet management the Bank has gone for interest rate swap transactions. During the year 2012-13, the Bank has concentrated a lot on improving its M - Duration by investing in short term highly liquid instruments such as the Treasury Bills.

Total global Investment (Gross) of the Bank during the year 2012-13 grew by 13.71 per cent from Rs. 46185 crore as on 31.03.2012 to Rs. 52515 crore as on 31.03.2013. The Domestic Investment grew by 13.98 per cent from Rs 45038 crore as on 31.03.2012 to Rs 51335 crore as on 31.03.2013. SLR investment increased by 8.09 per cent during the year 2012-13 by registering the level of Rs. 43347 crore in March 2013 as compared to Rs. 40102 crore in March 2012. Non-SLR investment (Domestic) registered a robust growth of 61.83 per cent to rise from Rs. 4936 crore in 2012 to Rs. 7988 crore in 2013. The yield on domestic investment increased from 7.45 per cent as on 31.03.2012 to 7.59 per cent as on 31.03.2013. Total Investment income has registered a reasonable growth of 15.15 per cent to reach the level of Rs 3635 crore in March 2013 from Rs 3156 crore in March 2012.

SL NO. Particulars FY 12 FY 13 GROWTH

(in Rs. cr) Absolute Percentage

(i) Global 46185 52515 6330 13.71

(ii) Domestic 45038 51336 6297 13.98

(iii) Overseas 1147 1180 33 2.88

6. SOCIAL BANKING:

i) Priority Sector Lending:

During the year 2012-13, the Priority Sector advances of the Bank stood at Rs. 34962 crore constituting thereby 32.13 per cent of Adjusted Net Bank Credit (ANBC). The Y-O-Y growth of Priority Sector advances stood at 23.54 per cent.

ii) Agriculture Advances:

Total agriculture advances of the Bank stood at Rs. 12625 crore constituting 11.60 per cent of ANBC. Direct agricultural credit stood at Rs.9986 crore constituting 9.18 per cent of ANBC and Indirect agricultural credit stood at Rs. 2639 crore constituting 2.42 per cent of ANBC. The Y-O-Y growth of total Agriculture Advances was 30.79 per cent.

iii) Advances to Weaker Sections:

Advances to Weaker Sections stood at Rs.10327 crore as of 31st March, 2013, with percentage to ANBC being 9.49%. The Y-O-Y growth of advances to Weaker Sections stood at 31.37 per cent.

iv) Micro, Small & Medium Enterprises (MSME) and Micro & Small Enterprises (MSE):

In order to focus on MSME segment of advances, the Bank created a separate vertical for MSME during the year 2012-13. The Bank had recorded a healthy growth in MSME and MSE sectors with advances under MSME and Micro & Small Enterprises (MSE) standing at Rs. 20871 crore and Rs. 16421 crore, respectively. The Y-O-Y growth of MSE Advances stood at 22.20 per cent.

v) Minority Community Advances:

Total Minority Community advances of the Bank stood at Rs. 5256 crore constituting 15.03 per cent of Priority Sector Advances, thereby achieving the stipulated target.

vi) Other Activities:

The Bank had put emphasis on Government Sponsored Schemes like PMEGP (Prime Minister a Employment Generation Programme), SGSY (Swarnajayanti Gram Swarozgar Yojana), SJSRY (Swarna Jayanti Shahari Rozgar Yojana), SHG (Self Help Group), JLG (Joint Liability Group), etc.

The Bank''s outstanding credit to Self-Help Groups (SHGs) stood at Rs. 483 crore, with 69877 accounts. 26 Financial Literacy Centres in 26 Lead Districts provided financial education to 30803 persons. The Bank also conducted Financial Literacy programmes for children studying in government schools. During the year, the Bank had set up 1812 Farmers'' Clubs all over the country.

The Bank assisted 3.74 lakh women beneficiaries to the tune of Rs. 5637.41 crore, constituting 5.18 per cent of ANBC as against the RBI norm of 5 per cent.

vii) Initiatives to boost Priority Sector financing:

The Bank had organized a large number of credit camps throughout the country to boost advances under Agriculture and MSE Sectors.

During the year 2012-13, the Bank had entered into MOUs with different organizations like M/s. Mahindra & Mahindra Ltd., Action Construction Equipment Ltd., Gujarat Mahindra Tractor Ltd., HMT Ltd. to lend Commercial Vehicles under MSE and Tractors under Agriculture Sector.

The Bank has launched several new Schemes during the year 2012-13:

1. UCO KISAN BHOOMI VRIDHI Scheme:

The Scheme was launched for financing Small/Marginal farmers, Share Croppers/Tenant farmers for purchase of land for agricultural purpose (Maximum Loan amount Rs.10.00 lac).

2. UCO KISAN TATKAL Scheme:

It has been launched based on the guidelines received from Department of Financial services, Ministry of Finance, Government of India for providing instant credit to the farmers to meet their emergency financial requirements (minimum Rs.1000/- to maximum Rs.50000/-) for Agriculture and Domestic purposes.

3. UCO ESTATE PURCHASE LOAN Scheme:

A new scheme named "UCO Estate Purchase Loan" was launched based on the guidelines received from Department of Financial services, Ministry of Finance, Government of India to extend financial assistance for purchase of Estates growing traditional crops like coffee, tea, rubber, cardamom, cashew nut, pepper, coconut and other perennial crops.

4. Scheme for Solar Irrigation Pump set:

A new scheme named "Solar Irrigation Pumpset" has been launched to extend Financial Assistance to the farmers for purchase of Solar Irrigation Pumpset which is cost effective. The Scheme has been prepared based on the guidelines received from department of Financial Services, Ministry of Finance, Govt. of India to help the farmers in saving their crop from erratic rainfall.

5. UCO KISAN ALL PURPOSE TERM LOAN SCHEME:

The scheme has been formulated for hassle-free single term loan limit to farmers for all term loan requirements. The limit granted shall not be a part of the Kisan Credit Card Limit and it shall be a separate single transaction account, based on the investment plan given by the farmer to be undertaken in next 2- 3 years. The scheme will be a combination of Investment/ development activities relating to agriculture and allied activities.

6. Scheme for relending to individual borrowers having settled their Direct Agriculture loan dues under Compromise/ One time settlement scheme (OTS)/legal action:

To help bona-fide farmers, who are not able to repay their loans in due course, settle their dues under various compromise schemes, Bank has formulated a scheme for relending to individual borrowers (singly or jointly) who have settled their Direct Agriculture loan dues under various compromise/One time settlement schemes/legal action. Fresh loan under the scheme will be considered only for Direct Agriculture activities both for production and investment credit.

7. FINANCIAL INCLUSION

The Bank has adopted 3-way Approach to implement the Financial Inclusion Programme which constitutes;

(i) Opening of Brick & Mortar branches in unbanked villages,

(ii) Launching of UCO Bank on Wheels (Mobile Van)

(iii) Implementation of ICT based BC Model.

During the year 2012-13 the Bank has covered 645 villages each with population below 2000. Further, the Bank has also covered 936 villages under Direct Benefit Transfer (DBT) Programme of Government of India launched from 01.01.2013. Thus the Bank has covered 3284 number of villages as on 31.03.2013 including 1703 villages each with a population over 2000 covered during 2011-12.

Basic Savings Bank accounts to the tune of 25.63 lac have been opened in these villages; out of which 6.25 lac accounts are opened under ICT based BC Model and 240139 no. of Smart Cards have been issued to these customers. Overdraft facility is also built in for the customers in the Basic Savings accounts opened under Financial Inclusion.

The Bank has opened till 31st March, 2013, 19 branches & 763 Ultra Small Branches (UCO MITRA SAKHA) in the unbanked villages in compliance with the guidelines of Government of India on Financial Inclusion. Out of these 763 Ultra Small branches, 178 USBs have been opened in the villages each with a population over 5000.

The Bank has 24 "UCO Bank on Wheels" (Mobile Vans) operating in 12 states. These Mobile vans move to the villages all the six days in a week and offer all banking services as available in a regular branch under CBS environment.

Under Direct Benefit Transfer (DBT) Programme of Government of India, launched from 01.01.2013 in 43 districts, the Bank has presence in 39 districts. Out of 18968 beneficiaries allotted to the Bank in these districts, the Bank opened accounts of all the 18968 beneficiaries.

8. RETAIL BANKING:

The year 2012-13 being the year of Retail business, the Bank focussed on retail business both on asset and liability sides. In this direction, the Bank had came out with several new repackaged liability products both under term deposits as well as in current deposits and, on asset side, made several modifications in existing asset products such as UCO Home, UCO Education, UCO CAR etc. to make the asset products competitive and marketable.

Under liability portfolio, the Bank had launched a new customized Current Account Product titled ''UCO CARE'' to cater to the needs of business class society with add-on facility of overdraft. Further, the Bank launched special repackaged Term deposit schemes to boost growth of term deposits of (< Rs. 5 crore), such as UCO Dhan Varsha (444 days), UCO Double, UCO Triple One, UCO 999, UCO 222, UCO 111 and UCO 66. These schemes had gone very well with the public.

On asset side, besides modifications under UCO Home and UCO CAR, the Bank launched a new Special Educational Loan Scheme titled ''UCO Premier Educational Loan Scheme'' for financing under preferential terms to students securing admission in premier educational institutes of the country.

The retail lending of the Bank had shown a healthier growth of 22.30 per cent during the year 2012-13. UCO CAR registered a growth of 101.04 per cent and UCO Home 17.30 per cent growth.

SL NO. Particulars FY 12 FY 13 GROWTH (In Rs. Cr) Absolute Percentage

(i) Total Retail 7228 8840 1612 22.30

(ii) Home 4235 4968 733 17.30

(iii) UCO Car 384 772 388 101.04

(iv) UCO Education 996 1141 145 14.56

9. BANCASSURANCE:

The Bank showed a y-o-y growth of 29 per cent under Life Insurance business and 52 per cent in non-Life Insurance business. 12 Zones of the Bank was declared as Bima Zones during the year 2012-13.

10. RECOVERY:

The performance of recovery & upgradation in NPA accounts during the FY 2012-13 has substantially improved over the previous years. The Bank has undertaken vigorous recovery efforts in NPA accounts for early recovery in the accounts and there has been substantial improvement in the recovery and upgradation during the current FY over the previous two years.

Particulars 31.03.2011 31.03.2012 31.03.2013

Cash Recovery 434 658 828

Upgradation 226 417 673

Total Redemption 660 1075 1501

However, the gross NPA as on 31.03.2013 of the Bank has increased to Rs.7130 crore from Rs.4086 crore as on 31.03.2012 and this is mainly due to the slippage of a large number of borrowal accounts to NPA in the FY 2012-13, particularly some high value group accounts. This sudden slippage is mainly due to the effect of global recession which affected domestic economic activity also to a large extent; and large projects could not either be completed or generate sufficient cash flow as anticipated, hence failed to fulfil their repayment obligations to the Bank. Similarly, SME accounts also got affected badly. The sudden slippage has resulted in increase in GNPA/NNPA Ratios in the FY 2012-13 as compared to the FY 2011-12.

(Rs. in Crore)

SL. NO. Parameter FY 12 FY 13

(i) (%)/Gross NPA (%) 3.48 5.42

(ii) Net NPA (%) 1.96 3.17

(iii NPA Provision Coverage Ratio (%) 54.39 52.08

Committee approach for follow-up & monitoring of recovery in NPA accounts.

In order to strengthen the monitoring mechanism of recovery, a Committee approach was adopted by the Bank.

i) In terms of the direction of Ministry of Finance, DFS, GOI, Board Level Committee has been constituted in the Bank where CMD, EDs & Govt. nominee Director are members of the Committee for monitoring of recovery Performance of NPA accounts. Progress of recovery in all such NPA accounts is being monitored by the Committee periodically and the report being submitted to the Board accordingly.

ii) For monitoring/follow-up of high value borrowal accounts in regard to the recovery and prevention of fresh slippage, a Committee comprising of five Corporate GMs was set up at HO level, and the Committee is meeting on weekly basis.

iii) Committees were also constituted at Zonal & Circle Office level for effective monitoring of recovery in NPA accounts as well as for containment of slippage.

iv) For effective monitoring of the recovery performance in technically written-off accounts a Task Force/dedicated team at HO level is formed consisting of a DGM, AGM, CM and 4 other officers for close follow up with the circles regarding the development of recovery in such accounts.

v) Bank extended the modified compromise settlement scheme for small NPA/ML accounts with outstanding balance up to Rs.10 lac during the FY 2012-13 to give benefit to the small NPA borrowers and thus recovered through this channel Rs. 58.78 crore in FY 2012-13 as against recovery of Rs. 34.96 crore in corresponding period of last year. Bank also introduced a separate scheme for compromise settlement in MSME borrowers.

Various other recovery measures that have been adopted by the Bank for boosting Recovery in NPA/ML accounts and bring down the GNPA of the Bank include:

- Immediate initiation of action under SARFAESI Act where the unit is not viable after the account becomes NPA in all eligible accounts followed by taking possession and auction sale of the property(ies).

- Filing of Recovery suits in DRT/Civil courts and identification & declaring borrowers with outstanding balance of Rs. 25.00 lac and above as ''Willful Defaulters'' as per RBI guidelines.

- Monitoring and follow up in regard to development in each account with balance of Rs. 5 crore and above with the Circle Offices on fortnightly basis through video conference.

- Close follow-up of all NPA A/cs of Rs. 1 Crore & above by Circle Heads of Chennai, Kolkata & Mumbai and Rs.50 Lac & above by Circle Heads of other Circles.

- Decreed cases, where details of assets of Borrowers / Directors & Guarantors are not available, to be handed over to reputed Detective Agencies for identification of their assets within the stipulated time schedule.

- Steps for timely execution of Decrees issued by the Court / Certificate of Recovery issued by the DRTs through Recovery Officers of DRTs.

- Number of Asset Management Branches (AMBs) of the Bank were increased to eleven from earlier five for effective monitoring and follow up of NPA accounts through the specialized branches across the country.

11. CREDIT MONITORING:

In order to be proactive in monitoring of all borrowal accounts on real time basis, the Bank has put in place a robust System to generate reports on Dues and sensitized all concerned to start follow up from Day one, Intensify after 30 days and get regularized within 60 days.

For hassle-free monitoring and follow up of all big borrowal accounts for Rs. 1 crore and above under stress, the Bank takes the leverage of the system in generation of one customized Report (CCMR) containing Financial and Non-Financial irregularities/ deficiencies, in addition to few other regular Reports available every month. To further accentuate the thrust on maintenance of asset qualities, meeting with borrowers by the branch and other field functionaries is being ensured.

Realising the importance of Credit Audit in ensuring the quality of assets, the Bank has identified 1345 borrowal accounts during 2012-13 for Credit Audit. Audit reports for the previous years from 2009-10 to 2011-12, barring a few for 2011-12 have since been closed during 2012-13.

To safeguard the security interest of the Bank, the Bank registered all cases numbering more than 1.30 lac pertaining to the period before 01-04-2011 with CERSAI. Security Interest created on or after 01-04-2011 is being registered with CERSAI on an ongoing basis.

12. RISK MANAGEMENT:

During the year 2012-13, the Bank has put in place several new initiatives in the area of Risk Management. Implementation of Advanced approaches under Basel II is in progress. Diagnostic Gap study in all the risk areas has been completed and separate Market Risk Management policy has been put in place. CIBIL helpdesks in all Zones have been formed, CIBIL workshops involving all Nodal officers of Zones and Circle offices along with Branch officials have been conducted. The percentage of credit data acceptance by CIBIL and pulling of CIBIL reports have increased substantially. CIBIL reports pulled has increased from 19 per cent as on March 2012 to 78 per cent as on March 2013. In absolute terms the number of CIBIL reports pulled has increased five fold from 3370 in the month of March 2012 to 15741 in the month of March 2013.

13. REGIONAL RURAL BANKS:

Of the five RRBs sponsored by the Bank as at the end of March, 2012, the Bank has two RRBs namely, Bihar Gramin Bank and Paschim Bangla Gramin Bank as on 31.03.2013.

Two important developments that took place in the year 2012-13 in terms of decision of the Government of India were namely, amalgamation of the RRBs as well as recapitalization of RRBs.

(I) Amalgamation of RRBs:

The amalgamation, thus, effected during the year are as detailed below:

- In the state of Madhya Pradesh, Mahakaushal Ksh. Gramin Bank was amalgamated with Satpura Narmada Gramin Bank and Vidisha Bhopal KGB to form Central Madhya Pradesh Gramin Bank under the sponsorship of Central Bank of India w.e.f. 08.10.12.

- In the state of Bihar the erstwhile Bihar Ksh. Gramin Bank & Samastipur Ksh. Gramin Bank got amalgamated to a single RRB as Bihar Gramin Bank w.e.f. 15.10.12 under the sponsorship of UCO Bank.

- In the state of Odisha, Odisha Gramya Bank is formed on amalgamation of Kalinga Gramya Bank, Neelachal Gramya Bank and Baitarani Gramya Bank under sponsorship of Indian Overseas Bank w.e.f. 07.01.13.

- In the state of Rajasthan, Jaipur Thar Gramin Bank has been amalgamated with Marudhara Gramin Bank to form a new entity as Marudhara Gramin Bank under the sponsorship of State Bank of Bikaner & Jaipur w.e.f. 25.02.13.

(II) Recapitalisation of RRBs:

Paschim Banga Gramin Bank has been recapitalised during the period 2012-13 to the tune of Rs. 25800 lakh in the ratio of 50% by Government of India, 35% by Sponsor Bank and 15% by State Government amounting to Rs. 129.00 crore, Rs. 90.30 crore & Rs. 38.70 crore, respectively. Thus the total amount of recapitalisation of PBGB at present stood at Rs. 153.01 crore (Government of India), Rs. 107.11 crore (Sponsor Bank) & Rs. 45.90 crore (Government of West Bengal). Similarly, Bihar Gramin Bank had already received amounts of Rs. 107.07 crore (Government of India), Rs. 74.95 crore (Sponsor Bank) & Rs. 32.12 crore (Government of Bihar).

Performance of RRBs (Unaudited):

The total number of branches of the Bank''s two sponsored RRBs stood at 487 as on 31.03.2013. The total deposits of two RRBs have increased from Rs. 4927 crore as on 31st March, 2012 to Rs. 5476 crore as on 31st March, 2013; thereby showing a growth of Rs. 547 crore or 11.15 per cent. The total advances recorded a growth of 23.94 per cent or Rs. 445 crore from Rs. 1859 crore as on 31st March, 2012 to Rs. 2304 crore as on 31st March, 2013. The C-D ratio of the RRBs improved from 37.74 per cent as on 31st March, 2012 to 42.08 per cent as on 31st March, 2013.

The gross NPAs of the RRBs was Rs. 154 crore as on 31st March, 2013 vis-a-vis Rs. 153 crore as of 31st March, 2012. The gross NPA ratio, however, reduced from 8.27 per cent as on 31st March, 2012 to 6.67 per cent as of 31st March, 2013. The net non- performing assets ratio (NNPA) of the RRBs as on 31.03.2013 stood at 3.59 per cent.

Bihar Gramin Bank recorded a net profit of Rs. 41.05 crore after having wiped out its accumulated losses. Paschim Banga Gramin Bank also reported a net profit of Rs. 2 crore vis-a-vis the loss incurred over the previous year.

13. INFORMATION TECHNOLOGY:

After the migration of all its domestic branches into CBS, way back in March 2010, the Bank has migrated two of its overseas branches in Hong Kong centre to CBS-Finacle on 4th Feb 2013 successfully. A separate helpdesk is formed at Head Office for providing continuous support to Hong Kong users. The Bank is in the process of migrating two other branches in Singapore centre to CBS shortly.

The Automated Data Flow (ADF) project, is a regulatory project wherein the MIS data pertaining to the Bank are presented as per formats finalised by RBI. Automated data flow ensures submission of various reports to the regulator without any manual intervention from Bank. The Bank is in the advanced stage of implementation of the project.

Online filing and tracking of loan applications was introduced by the Bank through its website. Facility for online filing of applications, MSME scheme and selected retail products are being made available through Bank''s Website. Customers can submit loan application online and track status online.

Government pension for the treasuries such as CPAO, Defence, Telecom is being paid centrally from CPPC Nagpur Branch. Centralised payment of pension for railways is being explored. Pension for State Govt depts. are paid from various branches. Payment of West Bengal state tax has been introduced in GBM (Counter Payment). New Pension Payment Module has since been implemented.

As an additional safeguard Bank has introduced a second factor authentication mechanism to login to CBS - Finacle. All staff are now required to authenticate themselves through finger print based authentication in addition to their user-id and password to gain access to Finacle software.

As of 31.03.2013, credentials of around 10,000 users are enrolled under Biometric authentication covering 1275 branches. 2200 fingerprint scanner devices delivered and installed in 239 branches. Another 2000 devices are being installed. Integration is completed with Finacle and has been made operational.

The Bank has implemented Cheque Truncation System (CTS) in NCR, Delhi from 2007. Later NPCI has expanded the project to Southern States such as Kerala, Tamilnadu, Karnataka, Andhra Pradesh & Pondicherry. Later centres like Kolkata, Chandigarh and Ludhiana were also added to the southern grid. The highlights of CTS implementation in the southern grid include:

- 17 out of 26 MICR centres across five southern states and Kolkata, Ludhiana & Chandigarh centres are participating in CTS Southern Grid.

- Out of the remaining 9 MICR centres, 5 centres are ready to be migrated to CTS and the migration is expected to be completed by 2nd week of April 2013. Site readiness for remaining 4 centres is in-process.

- NPCI has initiated CTS implementation in the Western grid. System Integrator has been identified to implement Grid CTS in the Western Grid. The project is expected to commence shortly.

The Bank had earlier connected all its branches using point to point leased line network in order to bring all the branches under CBS. To take advantage of the fault tolerant architecture offered by Multi Protocol Label Switching (MPLS) networks, the Bank has moved all its branches to MPLS network offered by BSNL. In addition to the Finacle software various other applications such as Video conference system are extensively used in the Bank using the MPLS network.

The in-house development team of the Bank has developed and deployed following two application software in production environment during the year 2012-13:

(1)Online Computer literacy test, first of its kind in the Bank was successfully conducted on 24.06.2012, as a part of promotion process from scale III to IV and from scale IV to V. Around 600 candidates across the country, involving 34 Inland Centers and two Overseas Centers have taken part in the test. (2) Online PAR Management System: Online PAR Management System has been successfully implemented for submission of APAR for all officers. This will enable submission of PAR (Performance Appraisal Report) online and evaluation online.

14. OPERATIONS & SERVICES:

i) Know Your Customer (KYC) & Anti-Money Laundering (AML):

During the year 2012-13, the Bank continued to focus on strengthening of KYC compliance and overseeing the Anti-Money Laundering (AML) activities. During the year, the Bank made System based KYC compliance through KYC (#) menu in CBS system. The installation of AML software for daily processing and monitoring of all transactions in the Bank to generate (a) Suspicious Transaction Reports (STRs) and (b) Cash Transaction Reports (CTRs) has been streamlined further and the Bank is able to effectively process and monitor all transactions particularly through new alerts. CTRs, STRs, CCRs and NIRs had been submitted regularly to FIU-IND, New Delhi.

ii) Customer Service:

Towards improving the Customer Service in the Bank, dedicated branches were identified for exchange of soiled notes and distribution of coins. Further, an independent RTGS-NEFT Cell has been created at Mumbai. The Bank continues to be committed in maintaining best customer service and keeps on aligning its practices in line with customer expectations, through continued process of review and evaluation.

The executives of the Bank, during the year 2012-13, interacted with the customers of the Bank at frequent intervals of different centres across the country at all tiers viz. Head Office, Circle Office, Zonal Office and branches through meetings of different Committees consisting of Customer Members, to have complete feedback and understanding of needs and grievances of the customers of the Bank. The meetings of Standing Committee on Customer Service at Corporate level of the Bank under the chairmanship of Executive Director were held as per schedule and were attended by Senior Executives of the Bank as well as customer representatives. Apart from this, Nodal Officers had been appointed at all the Zonal Offices to take care of customer grievances. Through adoption of effective grievance redressal mechanism the Bank was able to redress more number of grievances during this fiscal year than the previous one.

Transparency had been maintained by the Bank by hosting on Bank''s website the documents relating to (i) Policy on Customer Grievance Redressal, (ii) Cheque Collection, (iii) Compensation, (iv) Collection of dues and repossession of security.

iii) Right to Information (RTI) Act:

In terms of Right to Information (RT) Act, Bank''s commitments towards customers are well defined and published in the Bank''s website. The Bank is in continuous process of strengthening of review under Right to Information (RT) Act. The Bank had designated Central and Zonal Nodal Officers to cater to the queries of different customers and other stakeholders regarding RTI matters. Names and contact details of nodal offiers are mentioned in the Bank''s website. As per RTI Act 2005, the Bank has appointed 41 PIOs and APIOs, one at each Zonal Office level and two CPIOs and two CAPIOs at Head Office level to facilitate disposal of RTI applications seeking information and one Appellate Authority at each Circle Office and Head Office for disposal of appeals filed under their jurisdiction.

iv) New Pension Scheme (NPS) :

The corporate model of New Pension Scheme (NPS) has been operationalised by enabling the Personnel Services Department of the Bank to bring all Bank''s new recruits (since 01.04.2010) into the New Pension Scheme fold. The Bank has been registered as POP with PFRDA under ''Swavalamban'' (New Pension Scheme). Further, the Bank has been registered as a Corporate with PFRDA under New Pension Scheme as also with NSDL as Oversight Office.

v) Other Activities:

The Bank has successfully completed CTS - Southern Grid implementation in the year 2012-13. The Bank has also received authorization (Accredition by Govt. of India) for CPPC, Nagpur to act as a Single Window System for Payment/Disbursement of Central Civil Pension, Defence Pension, Postal and Telecom Pension. Further, tax collection of Govt. of West Bengal, both online and offline have been made GRIPS-enabled.

The Bank has started two new Clearing Houses at Mecheda and Barakar centres. During the year 2012-13, all 72 Currency Chests branches of the Bank have been made Bio-metric Access Control- enabled. The Bank has also installed 174 Account vending machines in line with RBI guidelines for catering to the general needs of the public. Further, high capacity note sorting machines were also installed in all 72 Currency Chest branches and also at 60 identified non-Currency Chest branches having daily cash receipt of Rs. 50 lakh and above.

15. CORPORATE COMMUNICATION:

With the aim of bringing about a quantum shift in the field of customer communications, the Bank, under the supervision of its Corporate Communications Department had taken up a number of initiatives through various channels namely electronic media, print media, internet, sponsorship, outdoor media, etc.

Publicity Campaigns:

- Campaigns in Print Media:

During the year 2012-13 vigorous publicity campaigns were launched in leading national and regional newspapers for mobilization of CASA deposits, Festival Bonanza scheme on Home & Car loans, launching of Customer-centric products such as UCO Double, UCO Dhan Varsha, UCO Triple One, UCO Triple Nine, UCO Triple Two, UCO Kisan Rupay Card, UCO Tax Saver Deposit Scheme, UCO 66, UCO CARE - Current Account. The Bank also conducted extensive publicity campaign on Gold Loan and e-banking products.

- Radio Jingles and Television Commercials:

In order to boost Bank''s brand image, and to propagate product information among the target customers, radio jingles were released through different radio stations. Intensive publicity on e-banking products was also done by way of television commercials on various news channels. Our bank received good publicity mileage out of all these publicity campaigns carried throughout the year.

- Rural Publicity:

As the Bank has a good number of branches in rural area, Corporate Communications Department through different Zonal Offices has conducted rural publicity campaign across the country. In order to extract maximum publicity mileage, the Bank has also participated in various rural fairs and festivals as sponsor.

- Customer Meets:

Since customers are of paramount importance to the Bank, a number of customer meets have been organized from time-to- time by all Zones and Circles. Corporate Communications Department at Head Office took the initiative to co-ordinate with all Zones and Circles for arrangement of such meets at regular intervals.

- Awards:

Internal Communication plays a vital role in transmitting messages in respect of Bank''s overall functioning and other relevant information among employees of the Bank. The Bank''s house journal, UCO Tower has been playing a key role in this aspect. The house journal has established itself as one of the effective conduits for spreading Bank''s Vision and Mission, as is evident from the fact that it has been awarded the Certificate of Merit at ''ICE Awards'' (In-House Communication Excellence), 2012 initiated by Shailaja Nair Foundation, Mumbai.

- Celebration of 71st Foundation Day:

In keeping with the tradition, the Bank during the year celebrated its 71st Foundation Day with the main function held at Science City Auditorium, Kolkata. To mark the occasion, the Bank planned to reach out to citizens at large and undertook some new customer centric initiatives. The Bank''s branded tableau was flagged off from Head Office and it moved across different places in and around Kolkata touching designated branches. Pamphlets on CASA, Retail loans with the prime focus on educating the people on Bank''s different products and services were distributed from the tableau. On the same day, towards fulfilling social commitments, the Bank handed over education kits to 70 specially abled children. To mark the anniversary celebration, the Bank made a donation of Rs. 10 lac in favour of Ramkrishna Sarada Mission Sister Nivedita Girls'' School for underprivileged girl children.

16. CORPORATE SOCIAL RESPONSIBILITY:

The Bank believes that carrying out Corporate Social Responsibility (CSR) helps in tangible value-creation. Moreover, CSR, creates a positive image in the society and inculcates essence of loyalty for the Bank among a cross-section of countrymen.

In tune with this perception, the Bank made separate donations for deserving as well as noble causes during the year.

- An amount of Rs. 4.90 lakh to Shivaji University, Kolhapur, Maharashtra under environment protection category for installation of Solar Plant Device.

- Rs. 2 lakh to Ramakrishna Math, Nattarampalli, Vellore, Tamilnadu for construction of building for an orphanage.

- Rs. 10 lakh to Mahaveer Viklang Sahayata Samity, Jaipur for helping the physically challenged.

- To facilitate education & women empowerment a sum of Rs. 10 lakh was donated to Ramakrishna Mission Sister Nivedita Girls'' School.

- Rs. 6 lakh to Rajiv Gandhi Foundation, New Delhi for purchasing vehicles with disabled-friendly attachment.

- Rs. 10 lakh was extended to Chief Minister''s Relief Fund, Sikkim for assistance during natural calamity.

- Under health care category Thalassaemia Society of India was provided with Bank''s donation of Rs. 6 lakh for treatment of Thalassaemic children belonging to BPL category.

- A van costing Rs. 7.90 lakh was donated to Disha Foundation, Jaipur for the physically and mentally retarded.

- Rs. 5.00 lakhs as donation was awarded to Kharda Janakalyan Rognirnoy Kendra, Kharda for running a diagnostic clinic for the weaker sections.

17. HUMAN RESOURCE MANAGEMENT:

MANPOWER

The total Staff Strength of the Bank as on 31st March, 2013 stood at 24,201, including 106 employees serving overseas, 14 of which are expatriate officers. The total domestic staff strength of 24,095 comprises of 10,807 Officers, 8,768 Clerks and 4,520 Subordinate staff.

The percentage of Scheduled castes (4809) and Scheduled Tribes (1355) in the total domestic staff strength is 25.58. Besides there are 1759 OBC employees in service of the Bank at the end of FY 12-13 and 1192 employees belong to Minority Communities. Out of the total work force 16.16 percent constitutes women employees as of March, 2013 compared to 14.33 percent in 2012.

During the year 2012-13 initiatives were taken by the Bank for development of SCs, STs, OBCs, Persons with Disabilities, Ex- Servicemen and Women; and pre-promotion/recruitment trainings were imparted to SC/ST candidates as per Government of India directives.

RECRUITMENT

A total number of 1791 Officers have been recruited during the year 2012-13 including 258 SCs, 105 STs and 477 OBCs. 575 of these Officers are Women, 26 are Persons with Disabilities and 82 belong to Minority Communities. 592 Clerks have also been recruited during the year 2012-13. These include 87 SCs, 53 STs and 167 OBCs, 30 Ex-Servicemen, 35 persons with Disabilities and 27 persons belong to Minority Communities. Moreover, the Bank has also initiated the process of recruitment for 1000 Clerks, 1000 Probationary Officers and 200 Specialist officers during the year 2013-14.

PROMOTIONS

During the year, 4 Executives were promoted to Top Executive Grade scale VII, 14 Executives were promoted from Scale V to Top Executive Grade Scale VI and 36 Executives were promoted from Scale IV to Scale V. Besides, 229 Officers were promoted to Scale IV, 675 to Scale III and 357 to Scale II. In addition, under specialist category, 8 Officers were promoted from Scale III to Scale IV, 27 Officers were promoted to Scale III and 19 Officers to Scale II. Further, during the period, 690 Clerical Staff were promoted to Officers Cadre and 257 Sub-ordinate Staff were promoted to Clerical Cadre.

INDUSTRIAL RELATIONS

During the period, the Industrial Relations climate in the Bank remained healthy and cordial between the Management and the Unions/Associations. IR meetings and discussions were held with Unions/Associations at periodic intervals sharing co-operative attitude and mutual respect during the financial year 2012-13.

PERSONNEL SERVICES

During the year 2012-13, several new Schemes were Implemented by the Bank under Staff Welfare Scheme which include

- Assistance by way of reimbursement of expenses on account of Health Check-up enhanced to Rs. 2,500/- from Rs. 1,500/- for employees and Rs. 1,500/- from Rs. 1,000/- for spouse - every year instead of earlier rule of once in two years. For employees, age criterion has also been reduced to 30 from 40.

- Coverage under Group Mediclaim Insurance Scheme for Retired Employees with Spouse has been enhanced from Rs. 1 lac to Rs. 2 lac on floater basis.

- Three Holiday Homes for Inservice as well as Retired employees have been started at SHIRDI, TIRUPATI and MUSSOORIE.

- CANTEEN SUBSIDY @ Rs. 250/- per employee per month is being disbursed to all employees across the country from January 2013.

- Reimbursement of further Hospitalization Expenses against uncovered Hospitalization Bills with a maximum limit of Rs.

25,000/- in case of Retired employees & Rs. 10,000/- in case of Spouse of Retired employees in connection with treatment of Heart Surgery, Brain Tumor, Kidney failure, Cancer & major Surgery in the event of any accident has been initiated.

- Lump sum Financial Assistance of Rs. 5,000/- every month to the Pre-1986 Retirees has been introduced.

- Bank started Centralized payment of pension to the staff pensioners w.e.f. November, 2012 through the Staff Pension Processing Centre of Personnel Service Department.

TRAINING

During the financial year 2012-13, more emphasis was given on training by the Bank. A separate vertical as Training Department had been created. One of the major highlights, during the year 2012-13, was delegation of authority and association of Circle and Zonal Offices in training of staff members upto Scale-III. The focus was on locational training to be conducted at branch level. Further, Camp Training was also given focus to be conducted at convenient centres to be decided by the Circe Heads. The Board of Directors has approved the decision for setting up of five new Regional Training Centres by the Bank.

During the year 2012-13, 8167 officers and 750 clerks were given class-room training. 263 Executives & Officers were nominated for different training at apex Training Institutions of India like NIBM, CAB, BIRD, IIBF, IIBM, NIRD, IDRBT, IIM Indore & IIM Lucknow, etc. 6 Officers were sent for overseas training & exposure. 5427 Officers, 1373 Clerks & 210 Sub-staff (Total 7010) have been imparted need-based training locationally. Training on Specialized Subjects like vigilance on public procurement, Disciplinary Proceedings, Security Officers, Forex Business, Inspecting Officers have been organized at Central Staff College, Kolkata. Managers Handbook and Handbook on Retail Loan Products have been published by CSC, Kolkata & RTC. Bhubaneswar. Incompany Training Programmes have been organized for Executives at ASCI-Hyderabad & IIM - Indore, for Faculty Members at NIBM-Pune , for Branch Heads at IIBM-Guwahati & NIRD-Hyderabad.

18. AUDIT & INSPECTION:

The Bank has a well-established Audit and Inspection Department that examines adherence to the Systems and Procedures. Bank has a comprehensive Inspection and Audit Policy for undertaking Internal Inspections, Concurrent Audit, Revenue Audit, Risk Based Internal Audit, and Information System Audit. The guidelines received on various issues of Internal Control from Reserve Bank of India, Government of India, Board and Audit Committee of the Board have become part of the internal control system for better risk management.

During the year 2012-13 the Bank has given focussed attention to close overdue inspection reports outstanding for more than 3 months by rectification of major & other irregularities. As a result of impetus given by the Bank there was no Annual Financial Inspection Report pending for closure as on 31st March, 2013. The regular branch inspection report is the most comprehensive feed-back to the management about compliance of the Bank''s systems and procedure and guidelines at operational level.

One of the major achievements during 2012-13 was that out of total revenue leakage of Rs. 46.60crore, Rs. 40.98 crore was recovered on the spot by internal/external auditors concerned.

19. VIGILANCE:

The Bank believes in adopting a Positive Approach in Vigilance Administration. During the year, emphasis was given to sensitizing the staff, mainly the new entrants with Vigilance measures in day to day operations. For this a number of Workshops & Training programmes were held at various centres.

With consistent follow up, the number of RDA cases reduced considerably except in matters where proceedings have been stopped by the intervention of Court/Police.

The earlier CVO, completed his tenure on 2nd November 2012 and a new CVO has been appointed. He took over on 18th February 2013.

There was a review of Vigilance functioning of the Bank by CVC in the month of March 2013.

20. MANAGEMENT AUDIT AND HR AUDIT:

In terms of the extant guidelines of the Bank, all the Corporate Departments, Circles Offices, Zonal Offices and Field Inspectorates are put to Management Audit once in every two years. The Bank has successfully conducted Management Audit in 18 Zonal Offices, 2 Circle Offices, 7 Field Inspectorates and one Corporate Department during the period from 01/04/2012 to 31/03/2013. The Reports have been closed in all eligible cases after getting the irregularities rectified by the Authorities concerned.

A snap Audit of the Transfer Policy being handled by HRM was conducted as instructed by the Competent Authority. H R Audit(assessment) of 8 Zonal Offices and 4 Circle Offices were conducted.

21. COMPLIANCE OF OFFICIAL LANGUAGE POLICY:

The Bank has taken proactive steps to implement the Official Language Policy of Govt. of India and has meticulously taken steps to comply with the provisions of Official Languages Act and the Rules made there-under. The Bank has also taken appropriate follow-up action to implement the directives as contained in the Annual programme with regard to the use of Official Language Hindi issued by Government of India, Ministry of Home Affairs, Dept. of Official Language and also endeavoured to achieve various targets prescribed in the said programme. Bank has also given preferred attention to comply with the instructions of Financial Services Department, Ministry of Finance and Reserve Bank of India regarding the use of Hindi in official work.

Sixty Nine Hindi Workshops were organised by the Bank for the Officers and employees to motivate them to do their work in Hindi. Total 1451 Officers / employees were trained through these Hindi Workshops. In view of the directives of Govt. of India to promote ''UNICODE'' application on all the computers, a session was allotted in these workshops to acquaint all Officers and employees with its application and activation.

481 branches were inspected by Official Language Officers posted at different Zonal offices, 3 Circle Offices, 9 Zonal offices.

One Regional Training Centre and four departments of Head Office were also inspected by Official Language Officers posted at Head Office during the period under review to evaluate the performance in the area as of implementation of Official Language Policy of Govt. of India. Necessary remedial measures were also taken to remove the deficiencies observed in such inspections.

During the period under review a National Seminar on the subject "Rajbhasha Implementation - Role of the executives" was successfully organized by the Bank on 17th May, 2012 in Kolkata. Prizes were also distributed to the winner of the Inter-bank and Intra-bank Hindi Essay Writing Competition organized by UCO Bank on the subject "Rajbhasha Implementation - Role of the executives" in this seminar.

In view of the requirement to accelerate the pace of implementation and effective compliance of Official Language Policy of Govt. of India in the Bankm 17 more Official Language Officers were recruited during the period under review.

On the occasion of "HINDI MONTH" celebration at Head Office a grand cultural evening was organized by the Bank in Science City Auditorium at Kolkata. Eminent Hindi poets from various cities of the country viz. Shri Surendra Sharma, Smt. Sita Sagar, Shri Ved Prakash, and Shri Sampat Saral recited their poems and songs in two sessions in this programme. Shri Ajoy Roy of Kolkata also presented songs penned by popular Hindi lyricists and poets. Dr. Amit Kumar Verma and Dr. Ravindra Kumar Das accompanied him on Tabla & Synthesizers. The programme was inaugurated by the CMD of the Bank. All the executives of the Bank posted at Kolkata, Howrah and Salt Lake and a large number of our valued customers along with their families were present on this occasion.

Zonal Offices, Jaipur, Raipur, Mumbai, Indore, Jodhpur, Ahmedabad, Ranchi, Pune and Bhopal have published Hindi e- magazines during the period under review.

The Bank successfully organised various competitions, rendered editorial assistance to other Public Sector Banks & Financial Institutions in conducting ''HINDI UNICODE WORKSHOP'' & ''Hindi workshop'' under the auspices of different TOLIC''s.

Various forms / publicity materials / procedural booklets and report of Annual General meeting of Shareholders, Manual of Instructions, Minutes of various Board Committees were prepared in bilingual form. Hindi text of the materials for our Bank''s Website was also prepared. Sufficient amount was allocated by the Bank for the purchase of classic literary Hindi books, dictionaries, technical glossaries, Hindi books on computer/banking, etc. and famous literary books in regional languages written by renowned litterateurs.

In view of effective monitoring of the work with regard to the use of Hindi in official work, the position of our Bank was vividly reviewed in the meetings of Apex Official Language Implementation Committee of the Bank.

"Hindi Month", "Hindi Fortnight", "Hindi Week" was celebrated enthusiastically at Head Office as well as Zonal Offices, Central Staff College, Regional Training Centres and Branches.

During the period under review Zonal Office, Patna and Zonal Office, Jalandhar were awarded 1st Prize / Shield and Zonal Office, Ranchi and Zonal Office, Dharamshala were awarded 2nd Prize respectively by TOLIC Patna, Jalandhar, Ranchi and Dharmashala.

Jt. Director (O.L.), Govt. of India, Ministry of Finance, Financial Services Dept., New Delhi inspected the Bank''s Head Office on 11th July, 2012 in respect of implementation of Official Language Policy in the Bank and expressed his satisfaction to observe the steps taken by the Bank for augmenting the use of Official Language Hindi in official work. In addition, on 18th July, 2012 the Dy. Director (Imp.), Govt. of India, Ministry of Home Affairs, Regional Implementation Office (East), Kolkata also reviewed the position of compliance of various aspects of the Official Languages Act and Official Languages Rules at the Head Office of the Bank on the basis of the Quarterly Progress Report for the quarter ended 31st March, 2012 submitted to them.

22. COMPLIANCE:

The Bank has emphasized on compliance issues as mandated by RBI. The Bank had ensured the level of customer service, functions and rules of deposit, advance, KYC/AML, other services, prompt submission of statutory/regulatory reports, information and data asked by RBI, GOI, etc. through a strict compliance system. Compliance Policy has been revised, reviewed and the same is being placed for approval of the Board of Directors in its meeting scheduled to be held on 10.4.2013. The revised Compliance Policy has been prepared incorporating necessary changes to prevent breaches in the areas of compliance functions. Compliance testing of operations at branches was introduced during the year 2011-12 to render deficiencies observed and rectified them on the spot to improve operational efficiency. Critical issues were reported and discussed at the appropriate level to enhance efficacy of the system.

23. Legal Matters

The Bank had delivered legal advice on various matters referred to it by all sections of stakeholders. The Bank had focused on the expeditious disposal of such matters for enhancing the efficiency of operational tiers. To ensure this, a continuous Monitoring System was in place. The Bank had extended its legal service to cater to the need of recovery issues, personal and industrial disputes filed by different sources, premises matters, legal audits, documentations, tribunal requirements, Ombudsman Compliance, etc. Empanelment of good lawyers was done successfully to set and maintain benchmark for legal issues.

24. FUTURE PLAN:

During the year 2013-14, the Bank will further strengthen its retail base, both on liability and assets sides. The Bank shall continue to focus on retail advances such as, ''UCO Home'', ''UCO CAR'', ''UCO Education'' and ''UCO Gold Loan''. Besides, the Bank will continue to lay emphasis on Priority Sector Advances with focus on Direct Agriculture and MSE. The endeavour of the Bank shall be to reduce its dependence on bulk deposits and advances further during the course of the current year 2013-14. The Bank will be strengthening its delivery channels by opening at least 400 branches to touch the Bank''s branch network to 3000 branches by the end of March, 2014 as also to double the number of ATM which will increase the Bank''s alternative delivery channel network.

The Bank''s focus on customer acquisition will further be increased by targeting at least 40 lakh new CASA accounts by March, 2014.

To sum up, the year 2013-14 shall be the ''Retail Business Year'', second time in succession.

25. BOARD OF DIRECTORS:

Corporate Governance

The Bank firmly believes in and has consistently practiced good corporate governance which is woven around its core values of transparency, professionalism and accountability. By constantly focusing on these aspects in its day-to-day operations, the Bank strives to enhance shareholders'' value. The Bank being committed to the principles of good governance, its Board of Directors has formed various committees of the Board to monitor every aspect of Bank''s business. The systems and business processes of the Bank are continuously reviewed at various levels for identifying and strengthening areas of weaknesses, if any. The Directors of the Bank believe that good governance is the key to earning trust, loyalty and goodwill of clients, business associates, employees and investors and respect from the society at large.

Changes in the Board of Directors

Smt. Uma Shankar served as the RBI nominee Director in the Board from 30.07.2010 to 06.09.2012. With effect from 06.09.2012, Shri B.P. Vijayendra has been appointed as RBI nominee Director.

Shri R. A. Sharma served as the Workman Employees Director in the Board from 15.02.2010 to 14.02.2013. With effect from 15.02.2013, Shri Partha Chanda has been appointed as Workman Employees Director.

Shri Diptendra Narayan Thakur was appointed as Officers'' employee Director in the Board w.e.f.12.12.2012.

Meetings of the Board of Directors

During the financial year 2012-13, the Bank had 14 meetings of the Board of Directors, 19 meetings of the Management Committee of the Board, 8 meetings of the Audit Committee of the Board. The number of meetings of various other Committees of the Board held during the year 2012-13 is given below:

Sl No. Name of the Committee No. of Meetings held

1. Risk Management Committee 3

2. Shareholders'' Grievance Redressal Committee 1

3. Share Transfer Committee 8

4. Special Committee for Monitoring Large-value Frauds 3

5. Customer Service Committee of the Board 4

6. Committee on HR-related issuesof the Bank 2

7. Nomination Committee of the Board -

8. Remuneration Committee of the Board 1

9. Committee of the Board on IT Management 4

Statement of Directors'' Responsibilities

The Directors confirm that in the preparation of the annual accounts for the year ended March 31, 2013, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any.The accounting policies framed in accordance with the guidelines of Reserve Bank of India, were consistently applied. Reasonable and prudent judgements and estimates were made so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit of the Bank for the year ended March 31, 2013. Proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of applicable laws governing banks in India; and the accounts have been prepared on an on-going basis.

Acknowledgements

The Board of Directors places on record its deep appreciation of the contributions made to the deliberations of the Board by outgoing Directors namely, Smt. Uma Shankar,and Shri R.A.Sharma. The Board would like to welcome the new Directors and looks forward to their valuable inputs towards growth of the Bank. The Directors remain thankful to the Government of India, Reserve Bank of India and other regulatory authorities for their support and valuable guidance. The Board also thanks other Financial Institutions and correspondent banks for their sincere co-operation. The Directors express their gratitude to the loyal customers for their trust and continuous patronage of the Bank. The Board also thanks the Staff Unions/Associations and shareholders of the Bank for the support extended by them. The Directors place on record their deep appreciation of the dedication shown by each employee of the Bank due to which the Bank could achieve so many milestones.

For and on behalf of Board of Directors,

Dated: 07th May, 2013 (Arun Kaul)

Place: Kolkata Chairman & Managing Director


Mar 31, 2012

1. BUSINESS PROFILE:

During the year 2011-12, the Bank showed a respectable growth in all the business parameters. Advances figures had shown a steady upward growth with global advances growing by 16.85 per cent during the year 2011-12 to reach the level of Rs 117504 crore as of March, 2012 from Rs 100561 crore as of March, 2011. Global deposit had also shown a positive growth of 6.01per cent to reach the level of Rs 154003 crore as of March, 2012 from Rs 145278 crore as of March, 2011. Global business had registered the volume of Rs 271507 crore as of March, 2012 from Rs 245839 crore as of March, 2011 by securing a respectable growth of 10.44per cent.

FY 11 FY 12 GROWTH

SL NO. Particulars (InRs.Cr) Absolute(PER CENT)

III GLOBAL

(i) Deposits 145278 154003 8725 6.01

(ii) Advances 100561 117504 16943 16.85

(iii)Total Business 245839 271507 25668 10.44

In case of domestic advances also bank had shown a steady growth of 15.65per cent to reach the level of Rs 107840 crore by March, 2012. Domestic deposit grew by 4.11per cent and reached the level of Rs 142017 crore by March, 2012. Domestic business also registered a respectable growth of 8.79per cent to reach the level of Rs 249857 crore as of March, 2012.

FY 11 FY 12 GROWTH

SL NO. Particulars (In Rs.Cr) Absolute(PER CENT)

I DOMESTIC

(i) Deposits 136415 142017 5602 4.11

(ii)Advances 93246 107840 14594 15.65

(iii)Total Business 229661 249857 20196 8.79

During the year 2011-12, the overseas centres of the Bank performed exceedingly well, with growth in deposits and advances at 35.24 per cent and 32.11 per cent, respectively to reach the level of Rs 11986 crore and Rs 9664 crore, respectively. Overseas business had shown a sharp upward trend to reach the level of Rs 21650 crore and recorded a 33.82 per cent growth during the financial year 2011-12.

FY 11 FY 12 GROWTH

SL NO. Particulars (InRs.Cr) Absolute (PER CENT)

II OVERSEAS

(i) Deposits 8863 11986 3123 35.24

(ii)Advances 7315 9664 2349 32.11

(iii)Total Business 16178 21650 5472 33.82

Per branch domestic business of the Bank has reached Rs 105 crore as of March, 2012. Per branch domestic deposits has reached Rs 59 crore in the year 2011-12. Per branch advances figure has improved from Rs 42 crore to Rs 45 crore during the year 2011-12.

2. PROFITABILITY:

During the year 2011-12, the Bank had shown a higher growth in net profit, which increased from Rs 907 crore in March, 2011 to Rs 1109 crore in March, 2012 by recording a growth of 22.27 per cent over the previous financial year. The net profit in the year 2011-12 was highest in the history of the Bank. The reason behind the respectable performance was basically the increase in interest income from Rs 11371 crore in March, 2011 to Rs 14632 crore in March, 2012 by recording a Y-O-Y growth of 28.68 per cent. Operating profit of the Bank had increased from Rs 2695 crore in March, 2011 to 2811 crore in March, 2012, thereby registering a y-o-y growth of 4.30 per cent. The declining Y-O-Y growth figure of operating profit was predominantly due to 42.57 per cent increase in interest paid during FY 11-12.

Important Ratios:

Sr Ratios Mar'2011 March, 2012

1 Return on Assets (per cent) 0.66 0.69

2 Cost to Income Ratio (per cent) 43.51 42.24

3 Book Value per Share (Rs.) 83.16 94.72

4 Earnings per Share (Rs.) 14.29 15.02

5 Net Interest Margin (per cent) 3.07 2.77

3. OPERATIONAL PERFORMANCE:

3.1. Investment:

Gross investment of the Bank has increased from Rs 43124 crore in March, 2011 to Rs 46185 crore in March, 2012 by registering a growth of 7 per cent in the year 2011-12. The Domestic investments (gross) of the Bank during the year 2011-12 grew by 8.82 per cent from Rs 41388 crore as of 31.03.2011 to Rs 45038 crore as of 31.03.2012. SLR investment (domestic) increased by 15 per cent during the year 2011-12 by registering the level of Rs 40102 crore in March,12 from Rs 34963 crore in March, 2011. Non-SLR investment (domestic) declined by 23 per cent from Rs 6425 crore in March, 2011 to Rs 4936 crore in March, 2012. Total income has also registered a reasonably good growth of 15.43per cent over the previous financial year to reach the level of Rs 3474 crore in March, 2012 from Rs 3009 crore in March,2011. Net profit on sale of investment (domestic) had shown a significant increase of (more than doubled) 115per cent by recording a level of Rs 191 crore in March, 2012 from Rs 89 crore in March, 2011.

3.2. Retail and CASA:

The Bank put considerable emphasis on strengthening its retail portfolio during the year 2011-12. There had been several initiatives to improve bank's liability portfolio like several CASA and Total Freedom campaigns throughout the country, launch of different deposit schemes, promoting salary account UCO Suvidha, etc. Attractive deposit schemes like Rd scheme UCO Sowbhagya, TD scheme UCO Vasanth Bonanza were launched at the later part of 2011-12 to boost the deposit volumes.

In order to improve the asset portfolio of the Bank and improve credit delivery to the retail customers by cutting down delays in processing of Retail Loan Applications as also to serve customer in a better manner, the bank had taken several initiatives during the year 2011-12. The Bank had opened 13 new Retail Loan Hubs in the year 2011-12, which takes the total number of RLHs to 39 as of March, 2012 from 26 as of March, 2011. Several existing schemes meant for retail customers namely, UCO Home Loan, UCO Trader, UCO Education, UCO Pension, etc., had been modified to remain competitive in the market as well as to suit niche clientele. Gold Loan scheme had been modified and new UCO Gold Loan Scheme had been launched for financing Retail Asset Products on 31st January, 2012 under both Priority and Non-Priority Sectors at all branches. Online application facility launched since 11th August, 2011 for UCO Home and Car Loans in addition to existing facility for UCO Education Loan.

Banc assurance:

In order to facilitate marketing of Mutual Fund Investments by the Branches through the Systematic Investment Plan (SIP) route, auto debit facility has been introduced on 16th January, 2012 in tie up with Bill Desk as our Aggregator.

The Bank during the year 2011-12, focused on marketing more traditional products rather than the single premium products to increase the fee based income.

3.3. Mid Corporate:

The Bank had given special attention to SME advances and accordingly a dedicated channel; SME Loan Hubs were launched at SME concentrated areas. During FY 2011-12, the Bank had opened 12 SME Loan Hubs at Ahmedabad, Bangalore, Bhubaneswar, Chandigarh, Chennai, Hyderabad, Jaipur, Kolkata, Mumbai, Nagpur, New Delhi and Raipur, under Mid Corporate supervision. These loan processing Hubs take up proposals in the range of Rs 25 lac to Rs 25 crore. Total loan sanctioned by the SME Hubs were Rs 1512 crore including renewal and enhancement as on 31.03.2012.

3.4. Agriculture & Rural business: Priority Sector Lending

During the year 2011-12, the priority sector advances of the Bank stood at Rs 28301 crore constituting thereby 33.56 per cent of Adjusted Net Bank Credit (ANBC).

Agricultural Advances

The total agricultural advances of the Bank stood at Rs 9653 crore constituting 11.45 per cent of ANBC. Direct agricultural credit stood at Rs 7632 crore constituting 9.05 per cent of ANBC and Indirect agriculture credit stood at Rs 2021 crore constituting 2.40 per cent of ANBC.

Advances to Weaker Sections

Advances to Weaker Sections stood at Rs 7861 crore as of 31st March, 2012, with percentage to ANBC being 9.32.

Medium, Small & Micro Enterprises (MSME) and Micro & Small Enterprises (MSE)

The Bank had recorded a phenomenal growth in these sections with advances under MSME and Micro & Small Enterprises (MSE) standing at Rs 17860 crore and Rs 13437 crore, respectively with growth rates of 20.76 per cent and 12.22 per cent, respectively over the previous financial year.

Minority Community Advances

Total Minority Community advances of the Bank stood at Rs 4113 crore constituting 4.88 per cent of ANBC.

Other Developments

The Bank had organized several credit camps throughout the country to boost advances related to agriculture business. During the year 2011-12 the Bank had entered into MOU with different organizations like Ashok Leyland, Bajaj Auto Ltd., National Collateral Management Services Ltd., etc. to lend commercial vehicles and finance farmers against their Storage receipts. The Bank had put serious emphasis on Govt. sponsored schemes like PMEGP (Prime Minister Employment Guarantee Programme), SGSY (Swarnajayanti Gram Swarozgar Yojana), SJSRY (Swarnajayanti Shahari Rozgar Yojana), PMRY (Prime Minister Rozgar Yojana), SHG (Self Help Group), JLG (Joint Liability Groups), etc. Gold loan scheme was also revised and launched with a competitive structure to boost finance under Priority Sector and Agriculture Business. Famers had been facilitated with credit facilities through tie-up arrangement with sugar companies.

3.5. Financial Inclusion:

In compliance with the directions given by the Government of India and Reserve Bank of India, the Bank had taken up implementation of the project under Financial Inclusion'. The Bank had adopted 3-way Approach to implement the Financial Inclusion Programme which constitutes (i) Brick & Mortar branches, (ii) UCO Bank on Wheels (Mobile Van) and (iii) Business Correspondent (BC) Model using ICT-based financial inclusion.

The Bank had achieved a rare milestone in the field of Financial Inclusion. During the year 2011-12, the target for the Bank was to cover 1703 unbanked villages having a population of 2000 plus each. The Bank had covered all the villages within the stipulated time. In addition to that the bank has covered 107 villages with a population of 1000-2000 each. Thus the Bank has covered 1810 number of villages; and 639149 number of no -frill accounts were opened in these villages.

The Bank has 24 UCO Bank on Wheels operating in 18 Zones. Under ICT based BC Model, 47984 Smart cards had been issued to the customers. To extend business in the field of Financial Inclusion the Bank had also opened 62 Ultra Small Branches (UCO MITRA SAKHA) in the unbanked villages under 11 Zones in compliance with the latest guidelines of Government of India on Financial Inclusion.

3.6. Recovery:

Financial year 2011-12 has been declared as YEAR OF RECOVERY and there is substantial improvement in Recovery and Up gradation in NPA accounts during the financial year 2011- 12 over the last year.

(Rs.in Crore)

per cent Particulars 31.03.2011 31.03.2012 per cent Increase

Cash Recovery 434 658 51.61

Upgradation 226 417 84.51

Total 660 1075 62.88

Recovery made in Written-Off accounts during the year ended 31.03.2012 was Rs 23 crore. Recovery made during the year 2011- 12 through Compromise settlement is Rs 104 crore comprising of more than 5000 accounts.

The Bank had completed 100per cent system based identification and collation of NPAs as of the quarter ended 30.09.2011, in compliance with the directives of Government of India, Ministry of Finance. The Bank had decided that the Circle Heads would personally monitor all NPA accounts of Rs 1.00 crore and above under their jurisdiction and Zonal Heads would personally monitor NPA accounts of Rs 10 lac and above in the Zone on an on-going' basis. Periodic Monitoring of recovery performance of Zones/ Circles through VIDEO CONFERENCING had been done throughout the year.

As on 31.03.2012, 340 cases has been identified as willful defaulters and reported to CIBIL/RBI as against the corresponding figure of 134 as on 31.03.2011.

Number of Lok Adalats conducted during the year was 359 from which recovery of Rs 6.26 crore was achieved; and recovery made through Special Compromised Settlement Scheme in small loan accounts up to Rs 5.00 lakh was Rs 30.47 crore. The scheme had been further extended up to 31.03.2013, in order to boost up the recovery in small NPA accounts.

SARFAESI action being initiated immediately after the account became NPA; and as on 31.03.2012, total recovery made through SARFAESI action is Rs 210 crore as against Rs 108 crore during 2010-11.

4. BOLSTERING ACTIVITIES:

4.1. Risk Management:

During the year 2011-12 the Bank had put serious efforts to take several new initiatives under the guidelines of Risk Management. Fraud Risk Management Cell and Centralized Credit Rating System were put in place to strengthen monitoring system. Individual Borrower wise Exposure Ceiling based on the Constitution of the Borrowers had been fixed. Daily Structural Liquidity Report, Mid Office Report & Dynamic Liquidity Report were introduced and were being placed to the Top Management as per schedule. Computation of market risk on the trading book on a daily basis had been done successfully. Training on CIBIL for all the nodal officers in the Circle level had been provided to improve the data acceptance /pulling.

Capital Adequacy Basel II)

Particulars Mar'11 March, 2012 Capital Fund : Amt in Rs.Cr.

I / Tier I 7,012 7,891

I / Tier II 4,266 4,151

Total (Tier I Tier II) 11,278 12,042

Risk Weighted Assets 82,272 97,550

Capital Adequacy Ratio (per cent) 13.71 12.35

Tier I (per cent) 8.52 8.09

Tier II (per cent) 5.19 4.26

4.2. Corporate Communication:

During the year 2011-12, the Bank had taken several unities under the guidance of Corporate Communications through various media namely electronic media, print media, internet, publicity material, sponsorship, outdoor media, etc. Widespread publicity campaigns were carried out for mobilization of CASA deposits, celebrating Festival Bonanza Offer, launching of new schemes such as, 'UCO Sunshine Recurring Deposit Scheme, 'UCO Vasant Bonanza Fixed Deposit', 'UCO Sowbhagya Recurring Deposit', etc. The Bank also organized "Campaign for Gold Loan", "Campaign for Advantage UCO - Home Loan and Car Loan" etc. Payment of State Commercial Tax through the Bank in various states was one of the achievements during the year 2011-12.

In order to improve the brand name of the Bank, various campaigns were undertaken for different products through various jingles on different radio stations. Intensive campaigns were undertaken by the Bank for popularizing its brand name during the presentation of Union Finance Budget for the year 2011-12 through Radio jingle and telecast of Bank's promos on different television channels. Internet advertisement had been organized through different sites. The Bank had also displayed and installed banners at the entrance/exit points during various important activities/happenings like sports, festivals, musical programmes, etc. in the city of Kolkata to propagate various products and brand name of the Bank. Sponsorship of Gates, pillars, hoardings to various Puja Committees, display of 500 banners at various Puja Committees, distribution of UCO Bank branded T-shirts and caps, etc. had been arranged to promote different products during Durga Puja.

The Bank had celebrated its 70th foundation day with the main function held at Science City on 6th January, 2012. A branded canter/tableau was flagged off from Head Office and roamed for 7 days in Kolkata. Pamphlets on CASA, Retail loans, Education Loan, Home Loan were also distributed. School bags, school stationary were given to 69 needy students on the auspicious occasion of Foundation Day celebration.

4.3. Information Technology:

The Bank had become fully CBS enabled by February, 2011. As of March, 2012, all the new branches, CBOs and extension counters were made CBS enabled. Total number of 843 branches (100per cent) of Bank sponsored 5 RRB's migrated to CBS. RTGS/NEFT facility extended to Bank sponsored 5 RRBs.

On the technology front the Bank had held its flag high by taking several new initiatives during the year 2011-12. Some of these initiatives are stated below.

- Govt. Business Module implemented in all designated branches.

- Two factor Authentication implemented for e-banking customers.

- Anti-Phishing Services implemented to protect customer's data from going to the wrong hands.

- Collection of State Taxes for West Bengal, Orissa, Delhi, UP made live. In the previous financial year, Maharashtra's tax collection was made live.

- Online Payment facility of customs duty is available through e-Banking.

- Instant Fund Transfer to RD and Loan accounts through e-Banking.

- Bulk salary upload facility for Chhattisgarh Govt. activated.

- New e-products introduced in the Bank in the current year is given below:

Products Introduction Date

UCO e-trade 25th April, 2011

IMPS (Instant Mobile payment service) 22nd July, 2011

Personalized UCO VISA Debit Card 6th January, 2012

4.4. Operations & Services: Know Your Customer (KYC) & Anti Money Laundering (AML)

System Based KYC Monitoring has been put in place for KYC compliance through KYC menu in CBS System. The installation of AML software for daily processing and monitoring of all transactions in the Bank to generate (a) Suspicious Transaction Reports (STRs) and (b) Cash Transaction Reports (CTRs) has been streamlined further and the Bank is able to effectively process and monitor all transactions particularly through new alerts. KYC compliance had been achieved to the extent of 98.29per cent . CTRs, STRs, CCRs and NTRs had been submitted regularly to FIU-IND, New Delhi.

Customer Service

The Bank continues to attach utmost importance to the customer service and is constantly reviewing its business practices to provide the best possible services to the customers.

Top executives of the Bank, during the year 2011-12, interacted with the customers of the Bank at frequent intervals at different centres across the country to have complete feedback and understanding of the needs and grievances of the customers of the Bank. Apart from this, nodal officers had been appointed at all the Zonal Offices to look into the grievances. Effective steps were taken by the Bank to redress grievances of the customers; and accordingly, the Bank has brought down the number of customer complaints to a very low level through its prompt redressal mechanism. The meeting of the Standing Committee on Customer Service at corporate level of the Bank was held as per schedule and was attended by senior executives of the Bank as well as customer representatives.

Transparency had been maintained by the Bank by hosting at Bank's website: (1) Policies on Customer Grievance Redressal (2) Cheque Collection, (3) Compensation & (4) Collection Of Dues and Repossession Of Security.

Awards passed by Banking Ombudsman were being implemented by the Bank and as of date no Award is pending for implementation.

Right to Information (RTI) Act

Under the light of Right to Information (RTI) Act Bank's commitments for our customers are well defined and published in the Bank's website. The Bank is in continuous process of strengthening of review under Right to Information (RTI) Act. The Bank had designated central and zonal nodal officers to cater to the queries of different customers and other stake holders regarding RTI matters. Names and contact details of nodal officers are mentioned in the Bank's website. As per RTI Act 2005, the Bank has appointed 36 PIOs and APIOs, one at each Zonal Office level and two CPIOs and two CAPIOs at Head Office level to facilitate disposal of RTI applications seeking information and one Appellate Authority at each Circle Office and Head Office for disposal of appeals filed under their jurisdiction.

4.5. Credit Monitoring:

The Bank, in order to maintain and improve the quality of assets, strengthened its Credit Monitoring Mechanism through implementation of several measures particularly having a Graded system of monitoring of accounts at various levels by assigning responsibility of monitoring of accounts based on sanctioned credit limits with the objective to intensify the credit monitoring and have focused attention to critical accounts. In addition, the bank has also streamlined the information system by directly obtaining information from the CBS system for facilitating prompt decision making at various levels. The Bank has envisaged creation of a pool of dedicated Executives and Officers, with track record on handling large borrowal accounts & well versed in handling of credit at the operational level, for undertaking credit audits.

The Bank has done a commendable work in getting registered with the Central Registry of Securitization Asset Reconstruction and Security Interest of India (CERSAI) particulars of security interest over property created on or before 31/03/2011. Such registration under Central Registry Rules 2011 under section 20 (1) of the SARFAESI Act 2002 was permitted by the Central Government with retrospective effect to be completed within 31.03.2012. The Bank could ensure uploading of over 1.17 lac particulars of security interest over property created on or before 31.03.2011.

4.6. Inspection:

The Bank has a well-established Audit and Inspection Department that examines adherence to the Systems. Bank has a comprehensive Inspection and Audit Policy for undertaking Internal Inspections, Concurrent Audit, Revenue Audit, Risk Based Internal Audit, IS (Information System) Audit and Management Audit. The guidelines received on various issues of Internal Control from Reserve Bank of India, Government of India, Board and Audit Committee of the Board have become part of the internal control system for better risk management.

During the year 2011-12 the Bank had focused attention to close overdue inspection reports outstanding for more than 3 months by rectification of major/other irregularities. As a result of impetus taken by the Bank there was no Annual Financial Inspection Report pending overdue as on March, 2012. The regular branch inspection report is the most comprehensive feed-back to the management about compliance of the Bank's systems and procedure and guidelines at operational level.

One of the major achievements during the year 2011-12 was the restoration of original rating of downgraded branches. From December, 2011 to February, 2012 number of Unsatisfactory/ Downgraded branches has decreased due to regular follow up with Disciplinary Authorities/Controlling Offices and branches to expedite initiation of RDA and ensure restoration of original rating of all the downgraded branches. Similarly, status of unsatisfactory rated branches has been upgraded through fresh inspection within an interval of 9 months.

4.7. Vigilance:

The Bank has shifted its focus towards preventive vigilance and participatory vigilance from punitive vigilance. Extensive training programme had been organized for imparting training of employees at all level.

A separate 'Investigation Cell' has been carved out to ensure timely and effective follow up of vigilance complaints. A Fraud Risk Management Department was also created to monitor and maintain the centralized data of fraud. Policies regarding field functionaries have been updated and sensitized to regulatory requirements and guidelines issued with a view to improve compliance.

Some of the Preventive Vigilance Measures undertaken during the year 2011-12 include:

- All withdrawals of money should be informed to the customers, if possible, through SMS without delay.

- Every large amount of withdrawal should be verified with supporting documents. Cheque should be examined with UV & IR rays.

- If post withdrawal balance is negligible, cheque should be scrutinized.

- No blank cheque should be handed over by the customer to any unknown person.

7.8.Compliance:

The Bank has emphasized on compliance issues as mandated by RBI. The Bank had ensured the level of customer service, functions and rules of deposit, advance, KYC/AML, other services, prompt submission of statutory/regulatory reports, information and data asked by RBI, GOI, etc. through a strict compliance system. During the year 2011-12 the Compliance Policy was revised, reviewed and the same was adopted by Board of Directors in its meeting held on 11.5.2011. The revised Compliance Policy incorporating necessary changes to prevent deviations from standard norms was circularized to all sections of the Bank thereafter. Compliance testing of operations at branches was introduced during the year 2011-12 to render deficiencies observed and rectified them on the spot to improve operational efficiency. Critical issues were reported and discussed at the appropriate level to enhance efficacy of the system.

4.9. Legal Matters:

The Bank had delivered legal advice on various matters referred to it by all sections of stakeholders. The Bank had focused on the expeditious disposal of such matters for enhancing the efficiency of operational tiers. To ensure this, a continuous Monitoring System was in place. The Bank had extended its legal service to cater to the need of recovery issues, personal and industrial disputes filed by different sources, premises matters, legal audits, documentations, tribunal requirements, Ombudsman compliance, etc. Empanelment of good lawyers was done successfully to set and maintain benchmark for legal issues.

5. HUMAN RESOURCES MANAGEMENT:

Manpower

The total staff strength of the Bank as on 31st March, 2012 stood at 23,259 including 112 employees serving overseas, 15 of which are expatriate officers. The total domestic staff strength of 23,147 comprises of 9059 Officers, 9171 Clerks and 4917 Subordinate staff.

The percentage of Scheduled castes (4716) and Scheduled Tribes (1179) in the total domestic staff strength is 25.46. Besides there are 1309 OBC employees in service of the Bank at the end of FY 11-12 and 1148 employees belong to Minority Communities. Out of the total work force 14.33per cent constitutes women employees compared to 13per cent in 2011.

During the year 2011-12 initiatives were taken by the bank for development of SCs, STs, OBCs, Persons with Disabilities, Ex- Servicemen and Women; and pre-promotion/recruitment trainings were imparted to SC/ST candidates as per Government of India directives.

Recruitment

A total number of 768 Officers have been recruited during the year 2011-12 which includes 102 SCs, 51 STs and 216 OBCs. 243 of these Officers are Women, 11 are Persons with Disabilities and 46 belong to Minority Communities. 867 Clerks have also been recruited during the Year 11-12 which include 134 SCs, 117 STs, and 242 OBCs, 52 Ex-Servicemen, 43 Persons with Disabilities and 42 Persons belong to Minority Communities. Moreover the Bank has also initiated the process of recruitment for 1000 Clerks and 1100 probationary Officers during the year 2012-13.

Promotions

During the year, 8 Executives were promoted to Top Executive Grade Scale VII. 41 Executives were promoted from Scale-V to Top Executive Grade Scale-VI and 114 Executives were promoted from Scale-IV to Scale-V. Besides, 130 Officers were promoted to Scale-IV, 574 to Scale-III and 1040 to Scale- II. In addition, under specialist category, 2 Officers were promoted from Scale- IV to Scale-V, 3 Officers were promoted from Scale-III to Scale- IV, 12 Officers to Scale-III and 3 Officers to Scale- II. Further, during the period, 8 Sub-ordinate Staff got promoted to Clerical Cadre under Graduate channel and process for other 2 channels for promotion to Clerical Cadre is in progress.

Staff Welfare Measures

During Financial Year 2011-12, the Bank has implemented the following Staff Welfare Measures:

MODIFICATIONS/CHANGES IN THE EXISTING SCHEMES:

1) UCO Diamond Jubilee Prize Scheme - This scheme has also been extended to the meritorious wards of permanent subordinate staff members (including PT Sweepers in scale wages) in recognition of their merits for securing higher marks in 12th Standard & Graduation level (10 prizes- i.e. 5 each for 12th Standard & Graduation).

2) Reimbursement of cost of spectacles to the employees in the age group of 40 years and above - Increase in amount from Rs 500.00 to Rs 1000.00.

3) Educational assistance to the school/college going dependent son/daughter of the deceased employees where no compassionate appointment has been offered - Financial assistance of Rs 5000.00 p.a. has been extended till completion of the Course of the children.

4) Financial assistance of Rs 5000.00 to the mentally retarded child/ Rs 3000/- to physically challenged child of the employee and one time assistance for purchase of certain artificial aid/accessories - In respect of the scheme of financial assistance for physically challenged & mentally retarded children of employees, the age bar has been extended from 21 year to 25 years in cases of mentally retarded children of the employees.

5) Group Med claim Insurance Scheme for in-service employees and their dependents with M/s United India Insurance Co. Ltd. - Renewed with enhancement in sum assured from Rs 1.50 lac to Rs 2.00 lac which has further been enhanced from Rs 2.00 lac to Rs 5.00 lac with effect from 31.03.2012 valid up 31.10.2012.

6) Renewal of Group Mediclaim Insurance Scheme for retired employees and their spouse with M/s United India Insurance Co. Ltd. - Enhancement in sum assured from Rs 1 lac to Rs 2 lac - which is effective from 31.03.2012 and valid up to 30.03.2013.

NEW SCHEMES

1) Payment of funeral expenses to the family of retired employees from the staff welfare fund - Scheme for payment of funeral expenses has also been extended to family members (spouse/son/daughter) of retired employees in the event of death of the retired employee up to a maximum amount of Rs.5000.00 (one time).

2) Bank has decided to initiate a Holiday Home at Shirdi (Maharashtra).

3) Blood Donation & Preliminary Health Check-up camps have been organized at Zonal Office levels during the foundation week of the bank beginning with 6th January - Maximum permissible expenses were limited to Rs 10000.00 for each Zone.

Industrial Relations

During the period, the Industrial Relations climate in the Bank remained healthy and cordial between the Management and the Unions/ Associations. IR meetings and discussions were held with Unions / Associations at periodic intervals sharing co- operative attitude and mutual respect during the financial year 2011-12.

Training

During the year 2011-12, a total number of 8,160 participants comprising of Officers, Clerks and Sub-staff were trained in the Banks' Central Staff College and five Regional Training Centres through a total of 18 channels.

Over and above this, 243 Officers were nominated for specialized training in Credit, IT, Risk management, Forex, and Leadership programmes to Institutes such as NIBM, IIBM, IDBRT, BIRD, CAB, NIRD, and FEDAI. 7 Executives attended overseas training programmes.

6.COMPLIANCE OF OFFICIAL LANGUAGE POLICY:

The Bank has taken proactive steps to implement the Official Language Policy of Govt. of India and has meticulously taken steps to comply with the provisions of Official Languages Act and the Rules made there under. The Bank has also taken appropriate follow-up action to implement the directives as contained in the Annual programme with regard to the use of Official Language Hindi issued by Government of India, Ministry of Home Affairs, Dept. of Official Language and also endeavored to achieve various targets prescribed in the said programme. Bank has also given preferred attention to comply with the instructions of Financial Services Department, Ministry of Finance and Reserve Bank of India regarding the use of Hindi in official work.

Eighty six Hindi Workshops, including workshops for Chief Officers/ Senior Officers were organized by the Bank for the Officers and employees to motivate them to do their work in Hindi. Total 1711 Officers / employees were trained through these Hindi Workshops. 472 branches were inspected by Official Language Officers posted at different Zonal Offices, 10 Zonal Offices and 5 depts. of Head Office were also inspected by Official Language Officers posted at Head Office during the period under review to evaluate the performance in the area of implementation of Official Language Policy of Govt. of India and necessary remedial measures were also taken to remove the deficiencies observed in such inspections.

The Bank successfully organized various competitions, rendered editorial assistance to other Public Sector Banks & Financial Institutions in conducting 'HINDI UNICODE WORKSHOP' & 'Hindi workshop' under the auspices of different TOLICs. During the period under review Zonal Office, Luck now and Zonal Office, Dharamshala were awarded 1st Prize /Shield and 2nd Prize, respectively by TOLIC Luck now and Dharmashala. In addition, Members of staff of our Bank working at H.O., Kolkata won 10 prizes, Luck now 6 prizes, Ranchi 2 prizes, Jaipur 2 prizes, Raipur 1 prize, Bhagalpur 1 prize, Ahmadabad 2 prizes, Nagpur 2 prizes, Chennai 1prize, respectively at various competitions organized on the occasion of "HINDI DIWAS" under the aegis of different TOLICs.

"Hindi Month", "Hindi Fortnight", "Hindi Week" were celebrated enthusiastically at Head Office as well as Zonal Offices, Central Staff College, Regional Training Centres and Branches. During " Hindi Month " at Head Office, Hindi Competitions and various Official Language awareness programmes for the Executives/ Officers, Clerks and Sub-Staffs were organized.

During the period under review Our Bank successfully hosted the meetings of Official Language Implementation Committee of Financial Services Dept., Ministry of Finance (for Public Sector Banks and Financial Institutions) and Public Sector Banks under the auspices of Reserve Bank of India in Kolkata on 16th July, 2011. In view of the requirement to accelerate the pace of implementation of Official Language Policy of Govt. of India, All India UCO Bank Official Language Officers' Conference was organized in Mumbai on 29th and 30th December, 2011.

Various forms / publicity materials / procedural booklets viz. report of Annual General meeting of Shareholders, Manual of Instructions and Minutes of various Board Committees were prepared in bilingual form. Hindi text of the materials for our Bank's Website was also prepared and in ATM Screen of the Bank information /guidelines, as the case may be, were made available in trilingual form i.e. in Regional Language, Hindi and English. Sufficient amount was allocated by the Bank for the purchase of classic literary Hindi books, dictionaries, technical glossaries, Hindi books on computer/banking etc. and famous literary books in regional languages written by renowned litterateurs.

7.FUTURE PLANS:

The year 2012-13 shall be the year of Retail Banking in both asset and liability category for the Bank. However, the Bank shall continue to focus on Recovery. The Bank shall be aiming at crossing two major milestones such as total business of more than three lac crore rupees and branch network of more than 2500 by March, 2013. The Bank shall also be focusing on more leveraging technologies to make the Bank more user friendly by working through business reengineering processes.

I. BOARD OF DIRECTORS:

8. CORPORATE GOVERNANCE:

The Bank firmly believes in and has consistently practiced good corporate governance which is woven around its core values of transparency, professionalism and accountability. By constantly focusing on these aspects in its day-to-day operations, the Bank strives to enhance shareholders' value. The Bank being committed to the principles of good governance, its Board of Directors has formed various committees of the Board to monitor every aspect of Bank's business.

The systems and business processes of the Bank are continuously reviewed at various levels for identifying and strengthening areas of weaknesses, if any. The Directors of the Bank believe that good governance is the key to earning trust, loyalty and goodwill of clients, business associates, employees and investors and respect from the society at large.

Changes in the Board of Directors

On being appointed by the Government of India, Shri S. Chandrasekhar an took over as the Executive Director of the Bank w.e.f. 01.10.2011. Shri S. K. Sinha served as the Government Nominee Director in the Board from 10.06.2008 to 21.07.2011. Thereafter, Dr. K. L. Prasad served as the Government Nominee Director of the Bank from 22.07.2011 to 01.12.2011. With effect from 02.12.2011, Shri Pravin Rawal has been appointed as Government Nominee Director. Shri Manoj Kumar Gupta was appointed as Chartered Accountant Director on 02.08.2011.

Shri Ajai Kumar relinquished the charge of Executive Director of the Bank on 30.09.2011on his appointment as Chairman & Managing Director of Corporation Bank. Md. Akhruzzaman who joined the Board on 14.7.2010, resigned as Director of the Bank on 18.05.2011. Another Director Shri Jai Dev Gupta resigned from the Board on 13.06.2011. Shri Sanjeev Jain, on completion of his tenure ceased to be a Director from 02.03.2012.

Meetings of the Board of Directors

During the financial year 2011-12, the Bank had 15 meetings of the Board of Directors, 21 meetings of the Management Committee of the Board, 11 meetings of the Audit Committee of the Board. The number of meetings of various other Committees of the Board held during the year 2011-12 are given below.

Sl No. Name of the Committee No. of Meetings held

1. Risk Management Committee 4

2. Shareholders' Grievance Redressal Committee 2

3. Share Transfer Committee 12

4. Special Committee for Monitoring Large-value Frauds 4

5. Customer Service Committee of the Board 4

6. Committee on HR-related issues of the Bank 5

7. Nomination Committee of the Board 2

8. Remuneration Committee of the Board 1

9. Committee of the Board on IT Management 1

Statement of Directors' Responsibilities

The Directors confirm that in the preparation of the annual accounts for the year ended March 31, 2012

The applicable accounting standards have been followed along with proper explanation relating to material departures, if any.

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

Reasonable and prudent judgments and estimates were made so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit of the Bank for the year ended March 31, 2012.

Proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of applicable laws governing banks in India; and the accounts have been prepared on an on-going basis.

Acknowledgements

The Board of Directors places on record its deep appreciation of the contributions made to the deliberations of the Board by outgoing Executive Director, Shri Ajai Kumar and other outgoing Directors namely, Md. Akhruzzaman, Dr. K. L. Prasad, Shri Jai Dev Gupta, Shri S. K. Sinha and Shri Sanjeev Jain.

The Board would like to welcome the new Directors and looks forward to their valuable inputs towards growth of the Bank. The Directors remain thankful to the Government of India, Reserve Bank of India and other regulatory authorities for their support and valuable guidance.

The Board also thanks other Financial Institutions and correspondent banks for their sincere co-operation. The Directors express their gratitude to the loyal customers for their trust and continuous patronage of the Bank. The Board also thanks the Staff Unions/Associations and shareholders of the Bank for the support extended by them. The Directors place on record their deep appreciation of the dedication shown by each employee of the Bank due to which the Bank could achieve so many milestones.

For and on behalf of Board of Directors,

Dated: 05th May, 2012 (Arun Kaul)

Place: Kolkata Chairman & Managing Director


Mar 31, 2011

The Board of Directors presents the 42nd Annual Report on the working of the Bank. The Audited Balance Sheet as on 31.03.2011 and the Profit & Loss Account for the year ended 31.03.2011 appended with the Auditors Report are enclosed.

1. BOARD OF DIRECTORS

Corporate Governance :

The Bank firmly believes in and has consistently practiced good corporate governance which is woven around its core values of transparency, professionalism and accountability. By constantly focussing on these aspects in its day-to-day operations, the Bank strives to enhance shareholders value. The Bank being committed to the principles of good governance, its Board of Directors has formed various committees of the Board to monitor every aspect of Banks business.

The systems and business processes of the Bank are continuously reviewed at various levels for identifying and strengthening areas of weaknesses, if any. The Directors of the Bank believe that good governance is the key to earning trust, loyalty and goodwill of clients, business associates, employees and investors and respect from the society at large.

Changes in the Board of Directors:

During the year 2010-11, Shri Arun Kaul was appointed as the Chairman & Managing Director w.e.f. 01.09.2010. Shri S K Goel, on his appointment as Chairman & Managing Director of IIFCL Ltd., relinquished the charge as the Chairman & Managing Director of the Bank on 30th June, 2010. Shri Ajai Kumar, Executive Director of the Bank held the charge during the

intervening period till the new Chairman & Managing Director was appointed. Shri N R Badrinarayanan was appointed as Executive Director of the Bank on 01.09.2010. Smt. Uma Shankar was inducted into the Board as the Nominee of Reserve Bank of India on 30.07.2010. Two more Directors were inducted to the Board namely, Shri Sebastian Luckose Morris on 13.07.2010 and Md. Akhruzzaman on 14.07.2010.

During the year, Shri V K Dhingra, on completion of his tenure, relinquished the charge as Executive Director on 30.04.2010. Four more Directors namely, Shri N. P. Sinha, Shri J C Shandil, Shri S C Gupta and Shri R N Jain, on completion of their tenure, relinquished the charge on 29.07.2010, 07.10.2010, 12.03.2011 and 12.03.2011, respectively.

Meetings of the Board of Directors:

During the financial year 2010-11, the Bank had 13 meetings of the Board of Directors, 21 meetings of the Management Committee of the Board, 9 meetings of the Audit Committee of the Board. The number of meetings of various other Committees of the Board were –

Sl No. Name of the Committee No. of Meetings held

1 Risk Management Committee 4

2 Shareholders Grievance Redressal Committee 2

3 Share Transfer Committee 12

4 Special Committee for Monitoring Large-value Frauds 4

5 Customer Service Committee of the Board 3

6 Committee on HR-related issue of the Bank 5

7 Nomination Committee of the Board 1

8 Remuneration Committee of the Board 1

9 Committee of the Board on IT and Financial Inclusion 1

Statement of Directors Responsibilities:

The Directors confirm that in the preparation of the annual accounts for the year ended March 31, 2011 -

The applicable accounting standards have been followed along with proper explanation relating to material departures, if any.

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

Reasonable and prudent judgements and estimates were made so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit of the Bank for the year ended March 31, 2011.

Proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of applicable laws governing banks in India; and the accounts have been prepared on an on-going basis.

Acknowledgements:

The Board of Directors places on record its deep appreciation of the contributions made to the deliberations of the Board by outgoing Chairman & Managing Director and Executive Director namely, Shri S K Goel and Shri V K Dhingra and other outgoing Directors namely, Shri N. P. Sinha, Shri J C Shandil, Shri S C Gupta and Shri R N Jain.

The Board would like to welcome the new Directors and looks forward to their valuable inputs towards growth of the Bank. The Directors remain thankful to the Government of India, Reserve Bank of India and other regulatory authorities for their support and valuable guidance.

The Board also thanks other Financial Institutions and correspondent banks for their sincere co-operation. The Directors are also grateful to the loyal customers for their trust and continuous patronage of the Bank. The Board remains thankful for the support extended by the Staff Unions/Associations and shareholders of the Bank. The Directors place on record their deep appreciation of the dedication shown by each employee of the Bank due to which the Bank could achieve so many milestones.

For and on behalf of Board of Directors,

(Arun Kaul) Chairman & Managing Director

Kolkata : 30.05.2011


Mar 31, 2010

The Board of Directors presents the 41st Annual Report on the working of the Bank. The Audited Balance Sheet as on 31.03.2010 and the Profit & Loss Account for the year ended 31.03.2010 appended with the Auditors Report, are enclosed.

Corporate Governance :

The Bank firmly believes in and has consistently practiced good corporate governance which is woven around its core values of transparency, professionalism and accountability. By constantly focusing on these aspects in its day-to-day operations, the Bank strives to enhance shareholders value. The Bank being committed to the principles of good governance, its Board of Directors has formed various committees of the Board to monitor every aspect of Banks business.

The systems and business processes of the Bank are continuously reviewed at various levels for identifying and strengthening areas of weaknesses, if any. The Directors of the Bank believe that good governance is the key to earning trust, loyalty and goodwill of clients, business associates, employees and investors and respect from the society at large.

Changes in the Board of Directors:

During the FY09-10, Shri Ajai Kumar, Executive Director was inducted into the Board of Directors on 07.12.09 in place of Sri B M Mittal, Executive Director who demifted office on 01.1 1.09 on superannuation. Sri P L Mittal, Chartered Account Director retired from the Board w.e.f. 02.1.10. Sri Ram Avtar Sharma was inducted into the Board on 1 5.2.1 0 as Workman Director.

Meeting of the Board of Directors :

During the FY09-1 0, the Bank had 1 2 meetings of the Board of Directors, 22 meetings of the Management Committee and 8 meetings of the Audit Committee of the Board. The number of meetings held by various other Committees of the Board are as under:



SI. No. Name of the Committee No. of Meet ings held

1 Management Committee 4

2 Shareholders Grievance Redressal Committee 2

3 Share Transfer Committee 12

4 Remuneration Committee 1

5 Special Committee for Monitoring Large-value Frauds 3

6 Fhret/Customer Service Committee 4

7 Committee on HR Related issues of the Bank 3

8 Committee of Joint Insurance Venture (Non-life) 1



Statement of Directors Responsibilities:

The Directors confirm >haf in the preparation of the annual accounts for the year ended March 31, 201 0:

The applicable accounting standards have been followed along with proper explanation relating to material departures, if any.

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

Reasonable and prudent judgements and estimates were made so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit of the Bank for the year ended March 31, 2010.

Proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of applicable laws governing banks in India; and the accounts have been prepared on an on-going concern basis.

Acknowledgements:

The Board of Directors places on record its deep appreciation of the contributions made by Sri B M Mittal and Sri P L Mittal to the deliberations of the Board. The Board would like to welcome the new Directors and looks forward to their valuable inputs in running of the Bank. The Directors remain thankful to the Government of India, Reserve Bank of India and other regulatory authorities for their support and valuable guidance. The Board also thanks other Financial Institutions and correspondent banks for their sincere co-operation. The Directors are also grateful to the loyal customers for their trust and continuous patronage of the Bank. The Board remains thankful for the support extended by the Staff Unions/ Associations and shareholders of the Bank. The Directors place on record their deep appreciation of the dedication shown by each employee of the Bank because of which the Bank could achieve so many milestones.

For and on behalf of Board of Directors

Kolkata (S K Goel)

30.04.2010 Chairman & Managing Director

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