Your Directors have pleasure in presenting the Annual Report of the Bank along with theAudited statement of Accounts the Profit and Loss accounts and the cash flow statementfor the year ended March 31 2016.
1. PERFORMANCE HIGHLIGHTS
Total Business of the Bank increased by Rs. 5798 crore to Rs. 456337 crore fromRs. 450539 crore in previous year registering y-o-y growth of 1.29 per cent.
Total Deposits increased by Rs. 10612 crore to Rs. 266184 crore registeringy-o-y growth of 4.15 per cent.
Total Advances of the Bank decreased by Rs. 4815 crore to Rs. 190152 croreregistering y-o-y decline of 2.47 per cent.
Operating Profit decreased to Rs. 2643 crore from Rs. 3559 crore in FY 2014-15registering y-o-y decline of 25.74 per cent.
Net loss stood at Rs. 1418 crore in 2015-16 as against net profit of Rs. 606crore in FY 2014-15.
Capital Adequacy Ratio (as per Basel-II) stood at 11.07 per cent with Tier I at7.44 percent as against 11.89 per cent in previous year. Capital Adequacy Ratio (as perBasel III) stood at 10.41 per cent with Tier I at 8.20 percent as against 10.90 per centin previous year.
Net worth stood at Rs. 14921.76 crore.
Gross NPA of the Bank increased by Rs. 10848 crore to Rs. 22721 crore from Rs.11873 crore in previous year. In percentage term Gross NPA stood at 11.95%.
Net NPA increased to Rs. 13242 crore from Rs. 6807 crore in previous year. Inpercentage term Net NPA stood at 7.36%.
Provision Coverage Ratio (PCR) stood at 51.52 per cent in March 2016.
Net Interest Margin (NIM) stood at 2.75 per cent in FY 2015-16.
Business per Employee increased to Rs. 1195 lakh from Rs. 1138 lakh in previousyear.
Return on Assets (ROA) is (0.48) per cent for the current financial year.
Credit to Priority Sector increased to Rs. 83030 crore from Rs. 75997 crore inprevious year recording y-o-y growth of 9.25 per cent.
Agriculture Advance of the Bank increased to Rs. 36833 crore from Rs. 35957crore in FY 2014-15 registering y-o-y growth of 2.44 per cent.
Advances to Micro & Small Enterprises (MSE) increased to Rs. 27800 croreduring the year under review from Rs. 26503 crore in previous year.
Education Loan grew by 8.72 per cent during the year and the total loan reachedto Rs. 3742 crore.
Bank has established 46 Rural Self Employment and Training Institute (RSETIs) in9 States of the country viz. Madhya Pradesh(18) Bihar(9) Maharashtra(6) UttarPradesh(5) West Bengal(3) Chhattisgarh(2) Rajasthan(1) Orissa(1) and Assam(1). Duringthe year 2015-16 the RSETIs conducted 1050 training programmes and imparted training to28244 candidates. Out of this 18926 (i.e.67%) trainees were settled through bank creditwage settlement and self-finance.
Bank has 3 RRBs as on 31st March 2016 in 3 states covering 47districts with a network of 1629 branches.
Under Financial Inclusion Bank has covered 4330 villages with population above2000 and 18376 villages with population below 2000. Bank has covered all these villagesthrough 6387 BC Agents. We have opened 41 Urban Financial Inclusion centres in NCR andBhopal Region. Bank has opened all its 3677 Ultra Small Branches attached to 1427 BaseBranches. Bank has opened 157.26 lacs Basic Saving Bank Deposit Accounts (BSBDA) throughits BCs and Branches. Total balance in these accounts is 1277.92 crores as on 31stMarch 2016.
Under Pradhan Mantri Jan Dhan Yojana our Bank has opened 74.18 lacs BSBDaccounts and increased business with a deposit of Rs. 870.60 Crores.
The corporate credit of the Bank decreased to Rs. 87014 crore from Rs. 97568crore in previous year registering y-o-y reduction of 10.82 per cent.
The retail credit grew by 10.21 per cent from Rs. 34939 crore in FY 2014-15 toRs. 38505 crore in FY 2015-16.
Total earning from Bancassurance business is Rs. 19.48 crore for FY 2015-16.
As on 31st March 2016 Bank has a network of 4728 branches 3677ultra-small branches (USBs) 5254 ATMs 29 Satellite Offices & 4 Extension Countersacross the country.
2. INCOME & EXPENDITURE
Details of income and expenditure for the period 2015-16 are given hereunder:
Rs. In Crores
| ||31.03.2016 ||31.03.2015 ||Variation ||% |
|1 INTEREST INCOME ||25888 ||26409 ||- 521 ||- 1.97 |
|- Advances ||18978 ||19517 ||- 539 ||- 2.76 |
|- Investments ||6474 ||6707 ||- 233 ||- 3.47 |
|- Others ||436 ||185 ||251 ||135.68 |
|2 OTHER INCOME ||1939 ||1894 ||45 ||2.38 |
|3 TOTAL INCOME (1+2) ||27826 ||28303 ||- 477 ||- 1.69 |
|4 INTEREST EXPENDED ||18822 ||19162 ||-340 ||-1.77 |
|- Deposits ||17653 ||17520 ||133 ||0.76 |
|- Others ||1169 ||1642 ||- 473 ||- 28.81 |
|5 OPERATING EXPENSES ||6361 ||5582 ||779 ||13.96 |
|- Establishment ||4465 ||3825 ||640 ||16.73 |
|- others ||1896 ||1757 ||139 ||7.91 |
|6 TOTAL EXPENSES (4+5) ||25183 ||24744 ||439 ||1.77 |
|7 SPREAD (1-4) ||7066 ||7247 ||- 181 ||- 2.50 |
|8 OPERATING PROFIT (3-6) ||2643 ||3559 ||- 916 ||- 25.74 |
|9 PROVISIONS-NPA/INVST./OTHERS ||5313 ||2669 ||2643 ||99.03 |
|10 PROVISIONS FOR TAX ||(1252) ||284 ||(968) ||(340.85) |
|11 NET PROFIT ||(1418) ||606 ||(812) ||(134) |
Interest Income declined by 1.97 per cent during the year
Interest expenses on Deposits increased by 0.76 per cent to Rs. 17653 crore in March2016 from Rs. 17520 crore in previous year.
Expenses on employees increased by Rs. 640 crore during the year to Rs. 4465crore from Rs. 3825 crore in previous year.
Details of Total Provisions of Rs. 4061 crore charged to the Profit and Loss Accountduring the year 2015-16 vis-a-vis previous year are detailed as under:
(Rs. in crore)
| ||31.03.2016 ||31.03.2015 ||Variation |
|Provisions for Standard Assets ||316 ||39 ||277 |
|Provisions for NPAs ||3828 ||2610 ||1218 |
|Provision on Investments ||849 ||(21) ||828 |
|Provisions for Taxes ||(1252) ||284 ||(968) |
|Others ||320 ||41 ||279 |
|TOTAL ||4061 ||2953 ||1108 |
4. PROFITABILITY RATIO
| ||31.03.2016 ||31.03.2015 |
|Cost of Deposits ||6.86 ||7.22 |
|Cost of Funds ||6.95 ||7.34 |
|Yield on Advances ||10.09 ||10.75 |
|Yield on Investments ||8.14 ||8.22 |
|Net Interest Margin ||2.75 ||2.79 |
|Cost Income Ratio ||70.65 ||61.07 |
|5. BANKING RATIOS || ||(In percentage) |
| ||2015-16 ||2014-15 |
|Interest Income to Average Working Fund (AWF) ||8.85 ||9.29 |
|Non-Interest Income to AWF ||0.66 ||0.67 |
|Operating Profit to AWF ||0.90 ||1.25 |
|Return on Average Assets ||(0.48) ||0.21 |
|Business Per Employee (' in lakh) ||11.95 ||11.38 |
|Net Profit per Employee (' in lakh) ||(3.76) ||1.53 |
6. CAPITAL TO RISK WEIGHTED ASSETS RATIO (CRAR)
The components of Capital Adequacy Ratio were as under:
| || |
| ||Basel-II ||Basel-III ||Basel-II ||Basel-III |
|Tier-I ||7.44 ||8.20 ||8.46 ||8.05 |
|Tier-II ||3.63 ||2.21 ||3.43 ||2.85 |
|Capital Adequacy Ratio ||11.07 ||10.41 ||11.89 ||10.90 |
7. NET LOSS
The Bank has incurred net loss amounting to Rs. 1418 crore during the financial yearended March 31 2016. Accordingly Board of Directors has not recommended any dividend onequity shares for the Financial Year 2015-16.
8. CHANGES IN THE BOARD DURING THE YEAR
During the year under review the following changes took place in the Board ofDirectors of the Bank:
Shri M.P.Shorawala ceased to be the Part-Time Non-official Director of the Bankw.e.f. close of working hours on 02.01.2016 consequent upon completion of his three years'tenure.
Shri Krishan Sethi ceased to be the Part-Time Non-official Director of the Bankw.e.f. close of working hours on 27.02.2016 consequent upon completion of his three years'tenure.
The Board places on record its appreciation of valuable contribution extended by ShriM.P.Shorawala and Shri Krishan Sethi who ceased to be the directors of the Bank duringFinancial Year 2015-16.
9. WHISTLE BLOWER POLICY
Bank follows Central Vigilance Commission Guidelines on Whistle Blower complaints underPublic Interest Disclosure and Protection of Informers (PIDPI) resolution. Bank also has aweb based portal in the name of "Cent Vigil" to
facilitate reporting malpractices by employees and directors without revealing theiridentities which would be known to the Chief Vigilance Officer only. Directors andEmployees may also approach Chairman of the Audit Committee on need basis. This helps tocurb malpractices prevent frauds and boost up morale of the employees.
10. DIRECTORS' RESPONSIBILTY STATEMENT
The Directors confirm that in the preparation of the annual accounts for the financialyear ended March 31 2016:
The applicable accounting standards have been followed along with properexplanation relating to material departure if any;
The accounting policies framed in accordance with the guidelines of the ReserveBank of India were consistently applied;
Reasonable and prudent judgement and estimates were made so as to give a trueand fair view of the state of affairs of the Bank at the end of the financial year and ofthe profit of the Bank for the financial year ended March 312016;
Proper and sufficient care was taken for the maintenance of adequate accountingrecords in accordance with the provisions of the applicable laws governing banks in India; and
The accounts have been prepared on a going concern basis.
Internal Financial Control are adequate and were operating effectively.
Proper systems have been devised to ensure compliance with the provisions of allapplicable laws and these systems were adequate and operating effectively.
11. CORPORATE GOVERNANCE
The Board of the Bank is committed to adapt Corporate Governance practices in letterand spirit. The Bank has adopted well documented system and practice on CorporateGovernance.
The Board of Directors places on record its gratitude to the Government of IndiaReserve Bank of India and the Securities and Exchange Board of India for their valuableguidance and support. The Board acknowledges with gratitude the unstinted support andfaith of its customers and shareholders. The Board wishes to place on record itsappreciation of the dedicated services and contribution made by members of staff for theoverall performance of the Bank.
For and on behalf of the Board of Directors
Chairman & Managing Director
Place : Mumbai
Date : May 27 2016