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 2017.
1. PERFORMANCE HIGHLIGHTS
Total Business of the Bank stood at Rs. 449679 crore as at March 31 2017compared to Rs. 456336 crore as at
March 31 2016.
Total Deposits reached to Rs. 296671 crore in March 2017 from Rs. 266184 croreas at March 2016 showing a y-o-y growth of 11.45 %.
Total Advances of the Bank stood at Rs. 153008 crore in March 2017 as againstRs. 190152 crore in March 2016 which was due to sale of loan assets of Rs. 22991.22 crorethrough IBPC participation.
Total Income for the financial year ended March 31 2017 was Rs. 27537 crore ascompared to Rs.27825 crore for the financial year ended . March 31 2016
Non-Interest Income of the Bank increased to Rs. 2876 crore for the financialyear ended March 31 2017 compared to Rs. 1938 crore for the financial year ended March31 2016 registering y-o-y growth of 48.38 %.
Operating Profit of the Bank stood at Rs. 3089 crore for the financialyear endedMarch 31 2017 as compared to Rs. 2642 crore for the corresponding previous financial yearended March 31 2016 registering y-o-y growth of 16.92 %.
Net Loss for the quarter ended March 31 2017 reduced to Rs. 592 crore incomparison to Net Loss of Rs. 898 crore for the quarter ended March 31 2016. Net Loss ofthe Bank stood at Rs. 2439 crore for the financial March 31 2017.
Expenses on employees decreased by Rs. 251 crore during the year to Rs. 4214crore from Rs. 4465 crore in previous year.
Capital Adequacy Ratio (as per Basel-II) stood at 11.28 per cent with Tier I at7.16 percent as against 11.07 per cent in previous year. Capital Adequacy Ratio (as perBasel III) stood at 10.95 per cent with Tier I at 8.62 percent as against 10.41 per centin previous year.
Net worth stood at Rs. 14735.84 crore.
Cash Recovery increased to Rs. 2378 crore in the financial year ended March 312017 as compared to Rs.1287 crore in the previous financial year ended March 31 2016.
Upgradation of assets improved to Rs. 1183 crore in the financial year March 312017 as compared to Rs.608 crore in the previous financial year ended March 31 2016.
Gross NPA to Gross Advances increased to 17.81 % as on March 31 2017 from 11.95% as on March 31 2016 which was due to sale of loan assets of Rs. 22991.22 crore throughIBPC participation.
Net NPA to Net Advances increased to 10.20 % as on March 31 2017 from 7.36 % ason March 31 2016.
Provision Coverage Ratio improved to 58.43% as on March 31 2017 from 51.52 % ason March 31 2016.
Net Interest Margin (NIM) stood at 2.51 per cent in FY 2016-17.
Business per Employee stood at Rs.11.81 crore in FY 2016-17.
Return on Assets (ROA) is (0.80) per cent for the financial year ended March 312017.
The credit deployment under priority sector increased from Rs.82771 crore toRs.88085.80 crore during 2016-17 recording a growth of Rs.5314.80 Crore over previousyear. However to take a benefit PS advances Bank sold PSLCs worth Rs.1065 Crore and IBPCRs.8761.80 Crore Inspite of the sale; Bank's PS lending is in excess by Rs.1621.40 Crore.
Agriculture Advance of the Bank increased to Rs.37537 crore from Rs.36760 crorein FY 2016-17 registering y-o-y growth of 2.11 per cent.
MSME Advances for the Financial Year ended March 31 2017 stood at Rs. 30701crore constituting 20.06 % of the total loans and advances.
Retail Loans for the Financial Year ended March 31 2017 stood at Rs. 32008crore constituting 20.92% of the total loans & advances.
Housing Loan portfolio of the Bank stood at Rs. 12510 crore constituting 39.08 %of the total Retail Portfolio as on March 31 2017.
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 2016-17 the RSETIs conducted 1153 training programmes and imparted training to31961 candidates. Out of this 26511 (i.e.83%) trainees were settled through bank creditwage settlement and self-finance.
Bank has 3 RRBs as on 31st March 2017 in 3 states covering 47districts with a network of 1629 branches.
Under Financial Inclusion Bank has covered 4330 villages with populationabove 2000 and 18376 villages with population below 2000. Bank has covered allthese villages through 6387 BC Agents. We have opened 176 Urban FinancialInclusion centres. Bank has opened 170.89 lacs Basic Saving Bank Deposit Accounts(BSBDA) through its BCs and Branches. Total balance in these accounts is 2070.14 croresas on 31st March 2017.
Total earning from Bancassurance business is Rs. 17.07 crore for FY 2016-17.
As on 31st March 2017 Bank has a network of 4714 branches 3677 ultra-smallbranches (USBs) 5285 ATMs 10 Satellite Offices & 1 Extension Counters across thecountry.
2. INCOME & EXPENDITURE
Details of income and expenditure for the period 2016-17 are given hereunder:
Rs. In Crores
| ||31.03.2017 ||31.03.2016 ||Variation ||% |
|1 INTEREST INCOME ||24661 ||25887 ||(1226) ||(4.73) |
|- Advances ||16283 ||18978 ||(2695) ||(14.20) |
|- Investments ||7372 ||6474 ||898 ||13.87 |
|- Others ||1006 ||435 ||571 ||131.26 |
|2 NON INTEREST INCOME ||2876 ||1938 ||938 ||48.40 |
|3 TOTAL INCOME (1+2) ||27537 ||27825 ||(288) ||(1.03) |
|4 INTEREST EXPENDED ||18087 ||18822 ||(735) ||(3.90) |
|- Deposits ||17330 ||17653 ||(323) ||(1.83) |
|- Others ||757 ||1169 ||(412) ||(54.43) |
|5 OPERATING EXPENSES ||6361 ||6361 ||0 ||0 |
|- Establishment ||4214 ||4465 ||(251) ||(5.62) |
|- others ||2147 ||1896 ||251 ||13.24 |
|6 TOTAL EXPENSES (4+5) ||24448 ||25183 ||(735) ||(2.92) |
|7 SPREAD (1-4) ||6574 ||7065 ||(491) ||(6.95) |
|8 OPERATING PROFIT (3-6) ||3089 ||2642 ||447 ||16.91 |
|9 PROVISIONS ||5528 ||4060 ||1468 ||36.15 |
|10 PROVISIONS FOR TAX ||(1090) ||(1251) ||161 ||(12.87) |
|11 NET PROFIT/(LOSS) ||(2439) ||(1418) ||(1021) ||(72.00) |
Details of Total Provisions of Rs.5528 crore charged to the Profit and Loss Accountduring the year 2016-17 vis-a-vis previous year are detailed as under:
(Rs. in crore)
| ||31.03.2017 ||31.03.2016 ||Variation |
|Provisions for Standard Assets ||(164) ||470 ||(634) |
|Provisions for NPAs ||6216 ||4913 ||1303 |
|Provisions for Restructured Accounts ||321 ||(1235) ||1556 |
|Provision on Investments ||300 ||851 ||(551) |
|Provisions for Taxes ||(1090) ||(1251) ||161 |
|Others ||(55) ||312 ||(367) |
|TOTAL ||5528 ||4060 ||1468 |
4. PROFITABILITY RATIOS
| ||31.03.2017 ||31.03.2016 |
|Cost of Deposits ||6.20 ||6.86 |
|Cost of Funds ||6.27 ||6.95 |
|Yield on Advances ||9.01 ||10.09 |
|Yield on Investments ||7.38 ||7.46 |
|Net Interest Margin ||2.51 ||2.78 |
|Cost Income Ratio ||67.31 ||70.65 |
5. BUSINESS RATIOS
| ||31.03.2017 ||31.03.2016 |
|Interest Income to Average Working Fund (AWF) ||8.10 ||8.85 |
|Non-Interest Income to AWF ||0.94 ||0.66 |
|Operating Profit to AWF ||1.01 ||0.90 |
|Return on Average Assets ||(0.80) ||(0.48) |
|Business Per Employee (Rs. in crore) ||11.81 ||11.95 |
|Net Profit per lakh) Employee(Rs.in ||(6.49) ||(3.76) |
6. CAPITAL TO RISK WEIGHTED ASSETS RATIO (CRAR)
The components of Capital Adequacy Ratio were as under:
| ||31.03.2017 ||31.03.2016 |
| ||Basel-II ||Basel-III ||Basel-II ||Basel-III |
|Tier-I ||7.16 ||8.62 ||7.44 ||8.20 |
|Tier-II ||4.12 ||2.33 ||3.63 ||2.21 |
|Capital Adequacy Ratio ||11.28 ||10.95 ||11.07 ||10.41 |
7. NET LOSS
The Bank has incurred net loss amounting to Rs.2439 crore during the financial yearended March 31 2017. Accordingly Board of Directors has not recommended any dividend onequity shares for the Financial Year 2016-17.
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 S. B. Rode ceased to be the Officer Employee Director of the Bank w.e.f.close of working hours on 01.04.2016 consequent upon completion of his tenure.
Shri N. Nityananda was appointed as Part-time Non-official Director underChartered Accountant Category for a period of three years w.e.f 21st June 2016.
Shri Gurbax Kumar Joshi ceased to be the Workmen Employee Director of the Bankw.e.f. close of working hours on 09.07.2016 consequent upon completion of his tenure.
Smt N. S. Rathnaprabha ceased to be the Part-Time Non-official Director of theBank w.e.f. close of working hours on 18.12.2016 consequent upon completion of her threeyears' tenure.
Shri R. K. Goyal retired from the position of Executive Director of the Bankw.e.f. close of working hours on 31.12.2016 on attaining superannuation.
Shri P. Ramana Murthy was appointed as Executive Director of the Bank for aperiod of 3 years w.e.f. 17.02.2017.
Shri R. C. Lodha retired from the position of Executive Director of the Bankw.e.f. close of working hours on 28.02.2017 on attaining superannuation.
The Board places on record its appreciation of valuable contribution extended by ShriS. B. Rode Shri Gurbax Kumar Joshi Smt N. S. Rathnaprabha Shri R. K. Goyal and Shri R.C. Lodha who ceased to be the directors of the Bank during the Financial Year 2016-17.
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 reportingmalpractices by employees and directors without revealing their identities which would beknown to the Chief
Vigilance Officer only. Directors and Employees may also approach Chairman of the AuditCommittee on need basis.
This helps to curb malpractices prevent frauds and boost up morale of the employees.
10. BUSINESS RESPONSIBILITY REPORT
Business Responsibility Report as stipulated under Regulation 34 of the Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 has been hosted on the website of the Bank (www. centralbankofindia.co.in). Anymember interested in obtaining a physical copy of the same may write to the CompanySecretary at the Head Office of the Bank.
11. DIRECTORS' RESPONSIBILTY STATEMENT
The Directors confirm that in the preparation of the annual accounts for the financialyear ended March 31 2017:
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 theReserve Bank of India were consistently applied;
Reasonable and prudent judgement and estimates were made so as to give atrue and fair view of the state of affairs of the Bank at the end of the financial yearand of the profitoftheBankforthefinancialyear ended March 312017;
Proper and sufficient care was taken for the maintenance of adequateaccounting records in accordance with the provisions of the applicable laws governingbanks in India ; and
The accounts have been prepared on a going concern basis;
Internal Financial Control are adequate and were operating effectively; and
Proper systems have been devised to ensure compliance with the provisions of allapplicable laws and these systems were adequate and operating effectively.
12. 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 and on behalf of the Board of Directors |
| ||Sd/- |
|Place : Mumbai ||Rajeev Rishi |
|Date : May 23 2017 ||Chairman & Managing Director |