You are here » Home » Companies » Company Overview » Punjab & Sind Bank

Punjab & Sind Bank.

BSE: 533295 Sector: Financials
NSE: PSB ISIN Code: INE608A01012
BSE LIVE 15:40 | 13 Dec 46.55 -0.45
(-0.96%)
OPEN

46.65

HIGH

47.00

LOW

46.50

NSE 15:31 | 13 Dec 46.50 -0.40
(-0.85%)
OPEN

47.10

HIGH

47.10

LOW

46.25

OPEN 46.65
PREVIOUS CLOSE 47.00
VOLUME 2498
52-Week high 72.30
52-Week low 44.45
P/E 14.92
Mkt Cap.(Rs cr) 1,864
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 46.65
CLOSE 47.00
VOLUME 2498
52-Week high 72.30
52-Week low 44.45
P/E 14.92
Mkt Cap.(Rs cr) 1,864
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Punjab & Sind Bank. (PSB) - Director Report

Company director report

The Board of Directors has pleasure in presenting Annual Report of the Bank along withthe Balance Sheet and Profit and Loss Account for the year ended 31st March 2017.

MANAGEMENT DISCUSSION AND ANALYSIS:

ECONOMIC OUTLOOK

Economy can draw considerable comfort from prevailing favorable macro conditions interms of decline in inflation increase in foreign capital inflows fairly stablecurrency narrowing trade deficit and current account deficit lower interest rate regimeand growth supportive government policies and initiatives including the adoption offiscal discipline. 2016-17 has been marked by several historic economic policydevelopments. On the domestic side we are very close to introduction of the long-awaitedand transformational goods and services tax (GST) while demonetization of the largecurrency notes signaled a regime shift to punitively raise the costs of illicitactivities. There is a widespread view that Economy has moved on a high growth path and itcould expand by between 6.75% and 7.5% in 2017-18 signaling that growth could recoversooner than expected after scrapping of high-value banknotes. Demonetization would bringlongterm benefits to the economy structural reforms and a proposed Goods and Service Taxcould boost growth rate to desired level. The growth in GDP during 2016-17 is estimated at6.8%. Industry has shown significant improvement primarily on account of the surprisingacceleration in manufacturing. Meanwhile services continue to expand rapidly. Industryand services sector are expected to grow by 5.7% and 8.5% respectively in 2016-17. The CPIbased inflation remains under control with a median forecast of 4.7% for 2016-17 with aminimum and maximum range of 3.8% and 5.1% respectively. Low inflation has been sustaineddue to low commodity prices. Current Account Deficit declined from about 1% of GDP lastyear to 0.3% of GDP in the first half of 2016-17. Foreign exchange reserves have reached366.7 billion US Dollars.

Economy continued to recover strongly benefiting from a large improvement in terms oftrade effective policy actions and stronger external buffers. Government remainscommitted in establishing incremental economic reforms and taken important policy actionstoward the implementation of the goods and services tax which will be positive forinvestment and growth. The challenges for the economy is to activate agricultural growthand rural demand trade future movements in the commodity prices and private investment.However the Government RBI and other concerned agencies are undertaking suitablemeasures for facing the same.

As far as banking sector is concerned profits and profitability was affected mainly bythe deterioration in the asset quality that remains a serious cause of concern for theBank and Capital Adequacy. Profitability is under pressure along with greater challenge inincreasing the NIM. The Bank among other things continues to focus on decreasing theCost of Deposit and improving the Return on Assets. Different measures with focus onproduct innovation off-balance sheet activities to increase income from non-coreactivity efficiency in service delivery process effective risk management etc. and moreimportantly on customer satisfaction are being taken up to face the challenges.

WORKING RESULTS

TOTAL BUSINESS:

During the year ended 31.03.2017 total Business of the Bank stood at Rs.145803 croreas compared to Rs.156527 crore as on 31.03.2016.

PROFIT:

The Bank recorded a Net Profit of Rs.201.08 crore for the year 2016-17 as compared tothat at Rs.335.97 crore during the FY 2015-16. The Return on Assets (ROA) stood at 0.20%as compared to that at 0.34% in the year 2015-16.

DIVIDEND:

As the Bank does not conform to the eligibility criteria prescribed by RBI fordeclaration of dividend the Board has not recommended any dividend for the year 2016-17.

CAPITAL & RESERVE:

The Net Worth of the Bank stood at Rs.5046.39 crore as compared to Rs.5068.08 crore ason 31.03.2016. The Capital Adequacy Ratio (Basel III) of the Bank is 11.05% as on31.03.2017 against the minimum stipulated requirement of 9.625%.

UNSECURED REDEEMABLE BONDS:

(Subordinated Debts for Tier -II Capital)

During the Year Bank has redeemed Tier II Bonds of Rs.150.00 crore and has raisedRs.500.00 crore. Thereby total outstanding of Tier II Bonds as on 31.03.2017 isRs.1675.00 crore.

DEPOSITS :

The total deposits of the Bank stood at Rs.85540.16 crore as on 31.03.2017 as comparedto Rs.91249.96 crore as on 31.03.2016. The average cost of deposits of the bank improvedto 6.73% as compared to 7.47% in previous year.

ADVANCES:

The Bank's Advances stood at Rs.60263.09 crore as on 31.03.2017 as compared toRs.65277.22 crore as on 31.03.16 The average yield on Advances stood at 9.73% as comparedto 10.70% during the last year.

GOVERNMENT BUSINESS:

The Bank continues to accord importance to the three Social Security/Pension Schemeslaunched by Government of India and 157951 enrollments under Pradhan Mantri Jeevan JyotiBima Yojna (PMJJBY) 850936 cases under Pradhan Mantri Suraksha Bima Yojana (PMSBY) and40039 number of cases under Atal Pension Yojna (APY) were got enrolled by the Bank up to31.03.2017.

Efforts were made to popularize/cross sell the facility of depositing Direct &Indirect taxes and approximately 100000 (One lac) challans were mobilized.

The performance of the Bank under different Govt. Small Saving Schemes continued to begood and about 5000 accounts as on 31.03.2017 were mobilized under Public Provident Fund(PPF) Senior Citizen Saving Scheme (SCSS) and Sukanya Samridhi Account (SSA) schemes.

ACHIEVEMENTS UNDER PRADHAN MANTRI JAN DHAN YOJNA

• The Bank has opened 11.72 lac accounts through branches and 351 BusinessCorresponds (BCs); and mobilized CASA/FD/RD deposit of Rs. 610.82 crore with an averagedeposit of Rs.5211 per account.

• Total Business generated by BCs is Rs. 290 crore which includes Recovery in 950NPA/TWO accounts amounting to Rs. 3.82 crore.

• During the financial year 2016-17 the Bank received a sum of Rs. 21.46 lac asmiscellaneous income for 3.07 lac Adhar enrollments done through M/s Matrix ProcessingHouse.

• The Bank has so far received subsidy amount of Rs. 42.45 lac for 283 MicroATMsfrom UIDAI. Punjab & Sind Bank is one of few Public Sector Bank to receive suchsubsidy from UIDAI for MicroATMs

• Total zero balance accounts in PMJDY are at 1.3 % against industry average of 23% (lowest among all Banks).

• Total Aadhaar seeding in active PMJDY Accounts is 85%.

• 100% BCs of our RRBs and 91% BCs of our Bank are certified through IndianInstitute of Banking & Finance (IIBF) (highest among all banks).

• The Bank in coordination with the Financial Literacy Centers (FLCs) took theinitiative to spread financial literacy among rural population by conducting FinancialLiteracy Camps in the villages where Basic Banking services along with other financialschemes like PMJDY PMJJBY PMSBY APY OD etc are discussed with the villagers so thatthey are able to avail these services as per their requirements. Total number of 418 Campswere organized in FY 2016-17 with the help of FLCs Branch Managers & BCs.

• Our Micro ATMs are Adhar Enabled Payment System (AEPS) & Rupay PINPADenabled helping rural customers to do intra and inter Bank transactions using theirbiometrics or Rupay Debit Cards.

MARKETING AND INSURANCE

• Sovereign Gold Bond: Bank has participated in Sovereign Gold Bond Scheme of Govtof India during 2016-2017 and performed consistently well to be among the topperformers.

• ASBA: The ASBA facility was launched during the year and a total of 93 Issueshave since been handled.

• Gold Monetization Scheme (GMS): The Bank has tied up with MMTC PAMP for GoldMonetization Scheme of Govt. of India.

• Bancassurance business: Bank successfully completed the process for CorporateAgent Tie up with Life Insurance Companies under which formal agreement with SBI LifeInsurance Company has been executed.

NEW INITIATIVES

• The Bank launched "Priority Sector Credit Campaign- PSCC" from15.12.2016 to 14.03.2017 to boost the Priority Sector Lending. An amount of Rs. 808.60crore has been disbursed during the campaign.

• To boost investment credit in Agriculture Sector the Bank has dispensed withthe ceiling of minimum 12% rate of interest under two schemes namely PSB scheme ofFinancing Two Wheeler/ Jeep/ Car/ SUV to farmers and PSB Farm Mechanization Scheme

• The Bank has launched a scheme "P&SB Weaver's MUDRA Scheme" forextending loans upto Rs.5.00 lac to handloom weavers to provide adequate and timelyassistance to the weavers to meet their credit requirements i.e. for investments need aswell as for working capital in a flexible and cost effective manner.

• Under the Shishu category of Mudra loan (upto Rs. 50000/-) margin has beenreduced from 25% to 10% & Inspection charges have been waived.

• New functionalities developed in Internet Banking for customers :-

a) Cheque Stop facility;

b) Auto generation of password for retail customer;

c) RTGS facility;

d) Online Aadhar Seeding;

e) Online Registration for Pradhan MantriJeewanJyotiYojna/PradhanMantriSurakshaBeemaYojna;

f) E-filing of ITR.

• The Bank has opened two new Zonal Offices at Ahmedabad and Noida for effectivemonitoring of the branch network. AWARDS & ACHIEVEMENTS

Federation of Industries Trade Services (FITS) has awarded the Bank "FITS MSMEExcellence Award" by Hon'ble Union Minister Sh. Kalraj Mishra for contribution ingrowth of MSME Segment.

The Bank has been awarded CIMSME Excellence Award 2016-17 for contribution to MicroCredit by Hon'be Union Minister of State for Finance and Corporate Affairs Sh. Arjun RamMeghwal.

Bank's Hockey Team won the following National Tournaments:

• All India S.N. Vohra Gurmit Hockey Tournament

• Senior National Hockey Championship (B Division)

PRIORITY SECTOR ADVANCES

• Total Priority Sector Advance increased from Rs.24508 crore as on 31.03.2016 toRs.24928 crore as on 31.03.2017.

• The Bank's Agriculture advance increased by Rs.190 crore to Rs.11355 crore as on31.03.2017 from Rs.11165 crore as on 31.03.2016.

• The Bank's advance to Small & Marginal Farmers increased to Rs.5656 crorewhich is 8.08% of March 2017 Adjusted Net Bank Credit (ANBC) against the RBI stipulatedtarget of 8%

• The Bank made advance to the tune of Rs.691.27 crore against the target ofRs.900 crore under Pradhan Mantri Mudra Yojana which is 76.81% against the target ofRs.900 crore.

• The Bank has issued RuPay Debit Cards in 2.01 lac KCC accounts against the totaloperative KCC accounts of 2.02 lac (99.48 %) as on 31.03.2017.

• The Bank has opened another 4 Financial Literacy Centres (FLCs) at block levelin Punjab thus raising total number of FLCs to 13 as on 31.03.2017.

• One of three Rural Self Employment Training Institute (RSETI) i.e. Faridkot weregiven highest grade 'AA' by Ministry of Rural Development Govt. of India for the yearended 31.03.2016 making it eligible for Govt. grants for training of rural unemployedyouth. The Bank spent Rs. 2436410/- to provide basic infrastructure such as Computerlabs Sewing & Embroidery machines CCTV cameras Air conditioner & Refrigeratorwindow curtains & fittings and for planting trees shrubs & other greenbeautification at Rural Self Employment Training Institute (RSETI) Moga and Faridkot.

RETAIL LENDING

• The Bank has primarily focused on the growth of its Retail Lending portfolioduring the FY and accordingly liberalized and rationalized its Retail Lending offerings tomake them more attractive and competitive. Festival Bonanza Scheme offering attractiveconcessions under the Housing Loan Auto Loan and Consumer Loan segments was launched.

• Retail Lending portfolio of the Bank as on 31.03.2017 stands at Rs.7296.51 croreand thereby registered a business growth of 12.38% over the previous year.

• The percentage of Retail Advances to Gross Advances was 12.10% as on 31.03.2017.

ASSET QUALITY

The Bank continued to make concerted efforts to contain NPAs and has used all availabletools of recovery including negotiated settlements & legal means and organizedRecovery Camps at various centers.

The performance of the Bank under recovery of NPAs during the year remained reasonable.The aggressive and focused efforts could result in the total recovery of over Rs. 958.91crore including recovery of Rs. 42.13 crore in Technically Written Off Accounts. GrossNPAs and Net NPAs as on 31.03.2017 stood at Rs 6297.59 crore and Rs.4375.08 crorerespectively against Rs.4229.05 crore and Rs.2949.47 crore as on 31.03.2016.

The position of Gross and Net NPAs as on 31.03.2017 vis-a-vis previous year is as under

(Amount in Rs. crore)

NPA

As on 31.03.2016

As on 31.03.2017

Gross 4229.05 6.48 % 6297.59 10.45%
Net 2949.47 4.62 % 4375.08 7.51%

The Provision Coverage Ratio of the Bank (including T.W.O.A/Cs) as on 31.03.2017 stoodat 46.69 %.

CREDIT MONITORING

The Bank has setup Control Room at Head Office and Zonal Offices for effectivemonitoring of large accounts and to check fresh slippages. Restructuring of eligible casesis being undertaken as per Bank/RBI guidelines.

In order to supplement the aforesaid various policy related initiatives have also beentaken by the Bank which inter-alia include implementation of Framework for RevitalizingDistressed Assets in the Economy for Early Recognition of Financial Distress Prompt stepsfor Resolution and Fair Recovery for lenders guidelines on refinance by way of flexiblestructuring/takeout financing etc.

INVESTMENT & FOREIGN EXCHANGE

The Bank's total gross investment as on 31.03.2017 was Rs28080.16 crore with aportfolio composition consistent with the corporate requirement risk perception andinvestment policy of the Bank.

On account of active trading in G-sec and Non SLR securities the trading profit hasincreased by 87% from Rs. 140.12 crore for year ended March 2016 to Rs. 261.97 crore forthe year ended 31.03.2017. This year Bank has put a step forward to add a new line ofprofit with initiation of secondary market trading in Non SLR Bonds. Besides this wellassessed participation in Equity Share IPOs has further strengthened and diversified theearning avenues.

The profit from foreign exchange business is Rs 38.99 crore in FY 2016-17.

RISK MANAGEMENT:

The Bank has put in place a robust and integrated Risk Management system to ensure thatthe risks assumed by it are within the defined risk appetites and are adequately monitored

POLICY FRAMEWORK:

The Bank has Board approved policies and procedures in place to measure manage &control various risks that the Bank is exposed to. Following Risk Management policies arein place —Risk Management Policy Asset-Liability Management (ALM) Policy CreditRisk Management Policy Market Risk Management Policy Operational Risk Management (ORM)Policy Business Continuity Planning (BCP) & Disaster Recovery Management (DRM)Policy Stress Testing Policy Policy on Utilization of Credit Risk Mitigation Techniques& Collateral Management ICAAP Policy Integrated Risk Management Policy Policy onManagement of Intra Group Transactions & Exposures and Loss Data Management Framework.

BANK'S COMPLIANCE WITH BASEL-II:

In terms of Regulatory Guidelines of Reserve Bank of India the Bank has adopted theNew Capital Adequacy Framework w.e.f. 31.03.2009. Based on Basel II norms the Bank hasadopted Standardised Approach for Credit Risk Modified Duration approach for Market Riskand Basic Indicator approach for Operational Risk for computing the capital charge. TheBank has also implemented Basel III Guidelines and has started computing CRAR w.e.f. June2013. The Bank has geared for moving towards advanced approaches under BASEL II assuggested by RBI. A Consultant has been appointed for setting up Enterprise WideIntegrated Risk Management System (EIRMS) in the Bank for moving to Advance approaches ofBasel II and implementation of Basel III Guidelines.

ICAAP POLICY:

In compliance with Reserve Bank of India guidelines on Basel II & Basel-III Pillar2- Supervisory Review and Evaluation Process (SREP) the Internal Capital AdequacyAssessment Process (ICAAP) Policy has been formulated to assess the capital requirementcommensurate with the size level of complexity risk profile and scope of operations ofthe Bank. Various residual risks are assessed and additional capital is provided forwherever required. The ICAAP outcome is prepared on half yearly basis and is reviewed byRMC.

DISCLOSURE:

In compliance with the Reserve Bank of India guidelines on Basel II& BaselIII-Pillar 3-Market Discipline the Bank has put in place a Disclosure Policy dulyapproved by the Board and the disclosures on quarterly/Half yearly/Annual basis as perthe policy are displayed on the Bank's Website/Annual Report.

CREDIT RISK:

Credit Risk Management processes involve identification measurement monitoring andcontrol of credit exposures. Credit risk and its policy formulation is managed by theCredit Risk Management Committee (CRMC). It regularly monitors prudential caps indifferent loan segments including industry corporate retail and individual/groupborrowers. Comprehensive credit rating framework comprising of Credit Risk Rating Modelsfor Corporate Exposure NBFC Exposure Real Estate Exposure and Retail Exposure pricingof loans linked to risk assessment and credit rating study & analysis ofindustries/portfolio migration of credit ratings is undertaken.

MARKET RISK:

The Bank's portfolio is exposed to market risk on account of changes due to interestrates and currency rates. The Asset and Liabilities Management Committee (ALCO) isoverseeing the functions relating to market risk. The Bank has put in place a variety ofmarket risk measurement systems and tools. Strict adherence to various limits and properescalation of breaches if any are followed. Moreover a Mid Office is also in place.

The Liquidity Management Framework is well established which safeguards the ability ofthe Bank to meet all payment obligations when they come due. It is designed to identifymeasure and manage the liquidity risk position of the Bank. The Bank is computing themarket risk capital charge as per the Modified Duration approach by using Modifiedduration method as per the regulator's guidelines. The Bank also calculates Value at Risk(VaR) on its foreign exchange portfolio.

OPERATIONAL RISK:

The Operational Risk Management Committee (ORMC) oversees the matters relating to risksassociated with operations and ensures the continuity/restoration of business in the eventof contingency/exigencies. Presently capital charge on operational risk is calculated asper Basic Indicator Approach. The Bank is in the process of strengthening its ORMFramework & ORM systems so as to be able to migrate to advance approaches ofcalculation of Operational Risk Capital. The Bank has Board approved Framework for LossData Management to set minimum standards for management of Bank's Operational Loss Data inorder to comply with the overall Operational Risk Management (ORM) Policy of the Bank andfacilitate creation of a robust and comprehensive Operational Loss Database.

HUMAN RESOURCE MANAGEMENT

The cadre wise staff strength as on 31.03.2017 is as under:

Category 31st March 2016 31st March 2017
Officers 6632 6663
Clerks 2202 2241
Sub-staff 569 496
Total 9403 9400

Women in employment: Out of the total strength of 9400 as on 31.03.2017 the womenemployees are 2454 constituting 26.11% of the total strength.

Women Empowerment:

The Bank has taken specific steps to empower its women employees and to plan theircareer growth. HO HRD Women Cell at Head Office looks after feedback/ suggestionsrequests and complaints/grievances received from women staff of the Bank for quickdisposal and Welfare of all Women Staff Members of the Bank. Women's Week was alsocelebrated in the Bank. The Bank has implemented Sabbatical Leave Scheme for all permanentfull time Women employees for maximum of 2 years during their entire career.

Promotions:

The Bank is regularly promoting its employees almost in all cadres year after year tokeep on rewarding the top performers and make them assume higher responsibilities.

Training & Human Resources Development:

The newly recruited Probationary Officers were provided training under different fieldssuch as Orientation Programme Training on Advances at Branch Level Training Programme onCredit Management Credit Appraisal NPA Management & Recovery of NPAs. Single WindowOperators (SWO) were also imparted Induction Training.

To encourage staff members to upgrade their professional skills the Bank hasincentivized re-imbursement of the full course fee of 21 Certificate and Diploma Coursesoffered by IIBF. The Bank has also tied up with IIBF for e-learning material for JAIIB& CAIIB which has been placed on the Bank's intranet under the head "HRDInitiative: E-Learning"

In view of MoF guidelines the Bank regularly conducts Webinars to reach out to all thestaff members working in the branches/ offices at the same time to train them in a shortspan.

Staff Training College Rohini Delhi : Bank's New Staff Training College situated atRohini Delhi was inaugurated by Chairman & Managing Director on 06/02/2017.

The Bank has engaged a Chief Customer Service Officer (Internal Ombudsman) in view ofthe recommendations of the Committee on Customer Service in the Banks (DamodaranCommittee) in order to strengthen the Grievance Redressal Mechanism available for the Bankcustomers.

Industrial Relations: The Industrial relations in the Bank remained cordial throughoutthe year. A Grievance Redressal Committee has been constituted as per the guidelinesreceived from Ministry of Finance to redress the grievances raised by the staff members.The Bank opened a Holiday Home facility at Mumbai.

Employment to Reserved Category Employees: The Bank is committed to the constitutionalsafeguards and social objectives for the development and welfare of persons belonging toSC ST and Other Backward Classes of the society.

A special SC/ST cell has been set up in the Bank to monitor reservation & otherprovisions for SC/ST employees. A General Manager has been designated as Chief LiaisonOfficer for SC/ST employees who ensures compliance of various guidelines pertaining to SC/ST employees and takes care of all matters of grievance redressal of SC/ST employees ofthe Bank.

The staff strength on 31.03.2017 under various reserved categories is as under:-

CATEGORY SC ST OBC EX-SM PWD
OFFICERS 1057 474 1185 54 100
CLERKS 496 70 460 153 38
SUB-STAFF 182 23 29 92 11
TOTAL 1735 567 1674 299 149

Compassionate appointments and financial assistance to the dependents of DeceasedEmployees:

The Bank is having a scheme for appointment on compassionate grounds or payment ofex-gratia amount in lieu of compassionate appointment to eligible family of the deceasedemployee who dies while in service.

Staff Welfare: In order to motivate and encourage the staff for effective participationin development activities the Welfare Trust of Employees is maintaining various welfareschemes for the staff. During the financial year 2016-17 welfare schemes of the Bank weresuccessfully implemented.

INFORMATION TECHNOLOGY

• As on 31.03.2017 all 1500 branches are on Core Banking Solution with RTGS/NEFTfacility.

• Users in Internet Banking/Mobile Banking have increased by 50% during FY2016-17.

• The revenue collection of Financial Year 2016-17(Bill Aggregators) is Rs.5.78Lac (Approx).

• The Bank has installed 30 new ATMs during the Year 2016-17. Total number of ATMsof the Bank as on 31.03.2017 is 1253.

• All new cards are being issued as EMV Chip Cards.

• Hot listing of debit cards through SMS has since been implemented

• The Bank had migrated existing ATM interface to Rupay Interface

• Sukanya Samrithi Yojna(SSY) has been implemented in the Bank.

• Auto renewal of FDRs with maturity value of <1 Crore has been implemented inthe Bank.

• Pradhan Mantri Garib KalyanYojna (PMGKY) has been implemented in the Bank.

• The Bank has implemented Customer satisfaction feedback

• Missed Call inquiry facility has been provided to the customers of the Bank.

• UPI/ POS/ Aadhar-Pay/ Bharat-QR are in pipeline and shall be implementedshortly.

• RBI guidelines on demonetization were strictly followed and implementedincluding re-caliberation of ATMs in the Bank.

INTERNAL CONTROLS

The Bank has in-built control systems with well-defined responsibilities at each level.It conducts internal audit through Inspection & Audit Department. Audit Committee ofExecutives being first tier Committees oversees the Inspection & Audit function.

The Bank carries out audits-like Risk Based Internal Audit (RBIA) Concurrent Audit(CCA) Information System Audit Management Audit & Inspection (MAI) and Credit Auditthrough which different facets of Internal Audit requirements are covered. The Bank'sbusiness units/offices are subjected to RBIA CCA & IS Audit and Bank's ManagementAudit & Inspection covers Zonal Offices & other Administrative Offices andexamines policies and procedures besides quality of execution thereof and creditexposures of Rs. 3.00 crore & above are subjected to Credit Audit by externalAuditors.

Inspection & Audit Department is monitoring redressal of publicgrievances/complaints. During FY 2016-17 4437 complaints were received of which 86complaints are in process for redressal.

COMPLIANCE FUNCTION:

Compliance Department disseminates the regulatory guidelines to respective businessdepartments and ensures its compliance.

During the FY 2016-17 Compliance Department ensured migration from CAMELS framework toRBS supervisory framework as per RBI directives.

PUBLIC RELATION AND PUBLICITY

During the financial year 2016-17 the Bank adopted a multi-media strategy to build upits image in public at corporate level and accordingly publicity was made through theprint media by release of its products tenders financial and other display/noticeadvertisements in different newspapers magazines and souvenirs targeting variousaudiences all over the country. The Bank received immense publicity through Bank'straditional Wall Calendar 2017 which was widely distributed.

VIGILANCE

PREVENTIVE VIGILANCE

With the aim to sensitize /enrich the knowledge of Vigilance Administration in theSenior functionaries of Banks One Day Workshop on "Vigilance Administration &Preventive Vigilance" for the Senior Functionaries of Five Banks was organized atAdministrative Staff College of India Banjara Hills Hyderabad on 05.08.2016. Hon'bleShri K.V Chowdary Central Vigilance Commissioner inaugurated the programme being theChief Guest of Honour.

On this occasion the Hon'ble Commissioner CVC also released Bank's Periodical "PSB Vigil " (2nd Volume). More than 100 Senior Functionaries of 5 Banksviz Punjab & Sind Bank Central Bank of India Andhra Bank State Bank of Hyderabadand Bhartiya Mahila Bank actively participated in the programme.

The Bank observed Vigilance Awareness Week with the central theme ^Participation inPromoting Integrity and Eradicating Corruptions in true spirit. During the course ofobservance of Vigilance Awareness Week 2016 the Bank organized different programmes atdifferent centres across the country and the main function was organized at New Delhi on3rd November 2016. Ms Nilam Sawhney IAS Secretary Central Vigilance Commission beingChief Guest graced the occasion and addressed the gathering of more than 200 participantsmainly consisting of citizens representing different sections of the society and seniorfunctionaries of the Bank. Shri Jatinderbir Singh IAS CMD along with Ms Nilam SawhneyIAS Secretary CVC inaugurated the programme being the Guest of Honour. During theprogramme Vigilance News Letter ffl DOs & DONTs ffl was also released. Besidesdifferent programmes were also organized at the Bank level across the country at GramSabhas/schools and colleges which were attended by more than 68000 participants.

This year the Hon'ble Commission introduced E-Pledge (Integrity Pledge) activity tocreate greater awareness and participation of public at large. In this respect staffmembers/customers of the Bank were encouraged to have E-Pledge through hyper link providedon Bank's web site which resulted in participation of more than 10000 people and availedE-Pledge facility across the nation.

DEMONITSIATION DRIVE

During the Demonetisation period i.e. from 9th November 2016 to 30thDecember 2016 Vigilance Officials played a key role in follow up and monitoring with theconcerned Department and the Controllers that guidelines issued by the Govt./RBI from timeto time in respect of Demonitisation drive are being followed in the Bank in true spirit.The Vigilance Department took up the matter with the respective Controllers and Managementto ensure that wherever there were serious irregularities; the same have been dealt withsuitably and firmly.

PUNITIVE VIGILANCE

With the active involvement of all the Disciplinary Authorities (DAs)/Controllers andproper coordination with the Hon'ble CVC/other Govt. Agencies pending vigilance (RDA)matters/complaints etc. were brought down to bare minimum level which is evident fromfollowing table:

2013-14 2014-15 2015-16 2016-17
Vigilance (RDA) Cases pending 75 70 58 49
Pending CVC referred Complaints 02 01 00 00
Charge Sheet issued 102 63 56 53
No. of officials in the Agreed List 53 23 20 18
No. of officials in the ODI List 135 120 98 81

SECURITY:

The Bank has a well established Security set-up within the Bank's organizationalstructure. All essential and mandatory security arrangements in terms of RBI/ IBAguidelines are provided at almost all branches.

Security Alarm Systems are installed at all branches and currency chests. Strong Roomconforming to RBI specification are provided at majority of branches. CCTV SurveillanceSystem has been installed at all Currency chests.

IMPLEMENTATION OF INDIAN ACCOUNTING STANDARD (Ind AS):

RBI vide circular dated February 11 2016 had advised scheduled commercial banks(except RRBs) to follow the Indian Accounting Standards as notified under the Companies(Indian Accounting Standards) Rules 2015 subject to any guideline or direction issued bythe RBI.

Scheduled commercial banks are required to comply with Ind AS for financial statementsfor accounting periods beginning from April 1 2018 onwards with comparatives for theperiod ending March 31 2018.

In compliance with the regulatory requirements the Bank has constituted a SteeringCommittee headed by Executive Director to oversee the implementation of Ind AS. The scopeof the Steering Committee includes evaluating the impact on the following areas:

(a) Ind AS technical requirements

(b) Systems and processes

(c) Business impact

(d) People

(e) Project management

The Audit Committee of Board will oversee the progress of implementation of Ind AS andupdate to the Board on a quarterly basis. As a part of the Ind AS implementation plan thebank is currently in the process of completion of diagnostic analysis of differencesbetween the current accounting framework and Ind AS. The Bank is also in the process ofpreparation of proforma financial statements for the six months ended 30 September 2016 tobe submitted to RBI."

IMPLEMENTATION OF OFFICIAL LANGUAGE:

2016-17 was the year of achievements in the area of implementation of OfficialLanguage. On the one hand Bank's Hindi Magazine 'RAJBHASHA ANKUR' was awarded 1stPrize continuously for the second year by Delhi Bank Town Official Language ImplementationCommittee (TOLIC) and on the other hand the Magazine was awarded All India Level"Rajbhasha Shield" from Reserve Bank of India on 24th of May 2016.During the year Delhi Bank TOLIC also awarded Punjab & Sind Bank with 16 Prizes whichis a new record. Besides this Bank was awarded Rajbhasha Shields in Ludhiana BhatindaDelhi Patna Bengluru Chennai Jodhpur Guwahati and Panjim (Goa) by respective TOLICsfor better Implementation of Official Language in banking sector.

Bank launched 'RAJBHASHA PORTAL' during the year. Portal will help in submitting onlineQuarterly Progress Report and will facilitate viewing of the Bank magazine E- magazines& official language related other information/activities.

A remarkable achievement of this year was that our Bank has constituted a TOLIC for thefirst time under Ministry of Home Affairs Govt. of India. On 10.03.2017 in the city ofFaridkot our Bank presided over the committee of Central Government officesbanks/undertakings etc. The innovative step such as publishing the writings in RegionalLanguages has been given importance in the Magazine which is richly complemented bybanking industry. So far stories/articles in Odiya Bengali Santhali Punjabi Tamil andMarathi languages have been published with their Hindi versions.

SPORTS

The Bank has a Sports Academy which nurtures Bank's Hockey Team at National Levelbesides Hockey Academy for age group of 15-18 years.

Following players of the Bank's Hockey Team have represented the Country:

Sh. Ramandeep Singh Sh. Harbir Singh Sh. Satbir Singh
Sh. Prabdeep Singh Sh. Harjot Singh

Shri Ramandeep Singh has represented Indian Hockey Team in Rio Olympic in August 2016.

9 players represented Indian Premier League 2017 from different teams which wasorganized by Hockey India. Out of these five players namely Sh. Simranjeet Singh Sh.Vikramjit Singh Sh. Parvinder Singh Sh. Gurinder Singh and Sh. Santa Singh alsorepresented Junior World Cup Hockey Tournamant held at Lucknow and Indian Team won GOLDMEDAL in the tournament.

Sh. Baljeet Singh Saini was appointed as Coach of Indian Junior Women Hockey Team forthe year 2016-17 and Coach of Delhi Wave Riders Team for Indian Premier League.

The Bank has recruited eight hockey players during the year to strengthen its hockeyteam. The Bank has also enrolled 22 Hockey players for Bank's Junior Hockey Academy underScholarship Scheme.

GENERAL ADMINISTRATION:

The Bank is undertaking construction works/projects on its owned premises and is alsoinvolved in the procurement of assigned Goods/Services. Construction of Staff TrainingCollege (STC) at Rohini Delhi has been completed and STC was inaugurated on 06.02.2017.Bank's Corporate house and residential flats at East Kidwai Nagar New Delhi are likely tobe completed in FY 2017-18.

CONSTITUTION OF BOARD OF DIRECTORS

As on 31st March 2017 the Board comprised of three Whole Time Directors vizChairman & Managing Director and two Executive Directors besides five other Directorsincluding representatives from Ministry of Finance Reserve Bank of India two ShareHolder Directors and one Part Time Non Official Director.

The constitution of Bank's Board of Directors underwent following changes during theyear 2016-17:

INCLUSIONS

> Sh. Fareed Ahmed was appointed as Executive Director of the Bank vide Governmentof India Ministry of Finance Department of Financial Services New Delhi NotificationNo. F.No. 4/5/(6) 2016-BO.I dated 16.02.2017.

CESSATIONS

> Sh. Sanjay Verma completed his term as Non Official Director on 11.08.2016

> Smt. Anita Karnavar completed her term as Non Official Director on 29.01.2017

> Sh. A K Jain completed his term as Executive Director of the Bank on 31.01.2017i.e. the last day of the month in which he attained the age of superannuation.

CORPORATE GOVERNANCE

The Bank is committed to good Corporate Governance and is constantly striving tofurther strengthen the same to ensure greater transparency and better coordination at alllevels in the Organization. The working of the Bank reflects transparent ownershipstructure improved risk management practices well defined delegation of powersaccountability and an elaborate audit function carried out by both its Inspection &Audit Division and by independent Statutory Central Auditors.

The Bank has complied with the guidelines of RBI and SEBI on the matters relating toCorporate Governance which have been examined by the Statutory Central Auditors.

DIRECTORS' RESPONSIBILITY STATEMENTS

The Directors confirm that in preparation of the Annual Accounts for the year ended 31stMarch 2017:

> The applicable accounting standards have been followed along with properexplanation relating to material departures if any.

> The accounting policies framed in accordance with the guidelines of the ReserveBank of India were consistently applied.

> Reasonable and prudent judgment and estimates were made so as to give a true andfair view of the state of affairs of the Bank at the end of the financial year and of theprofit of the bank for the year ended on 31st March 2017.

> Proper and sufficient care was taken for the maintenance of adequate accountingrecords in accordance with the provisions of applicable laws Governing Banks in India andthe accounts have been prepared on a going concern basis.

STAUTORY AUDIT:

As approved by Reserve Bank of India the Bank has appointed M/s Dhillon &Associates Chandigarh; M/s Tiwari & Associates New Delhi; M/s Dhawan & Co. NewDelhi and M/s Davinder Pal Singh & Co. Hoshiarpur as Statutory Central Auditors forthe accounting year ended March 2017.

ACKNOWLEDGEMENTS

The Board of Directors of the Bank thanks valued customers shareholders well-wishersand correspondents of the Bank in India and abroad for their goodwill patronage andcontinued support.

The Directors also acknowledge with gratitude the valuable and timely advice guidanceand support received from Government of India Reserve Bank of India Securities andExchange Board of India (SEBI) Stock Exchanges of various State Governments FinancialInstitutions and the Statutory Central Auditors of the Bank in the functioning of theBank.

The Directors place on record their deep appreciation for the valuable contribution ofthe members of the staff at all levels for the progress of the Bank during the year andlook forward to their continued co-operation in realization of the corporate goals inyears ahead.

For and on behalf of Board of Directors
Place: New Delhi Jatinderbir Singh
Date: 16 May 2017 Chairman & Managing Director