During the financial year 2017-18 (FY18) the Bank's global businessreached the level of `380040 crore (`3.80 lakh crore) registering a Y-o-Y growth of5.57%. The Bank's international business stood at `12871 crore and recorded a negativeY-o-Y growth of -8.91% on account of 12.82% Y-o-Y drop in overseas advances. Globaldeposits of the Bank stood at `213604 crore which increased by 5.81% and gross advancesgrew by 5.27% and stood at `166436 crore as at the end of Mar'18. Your Bank's continuedfocus on low cost deposits resulted in a healthy Y-o-Y growth of 7.45% in CASA depositsand the build-up stood at `98419 crore as on 31st Mar'18. Subsequently CASA shareimproved to 46.50% as on 31st Mar'18 from 45.79% a year ago.
The Bank's operating profit decreased by 11.08% Y-o-Y on account ofstress on advances portfolio and resultant reversal non-booking of interest. It stood at`3438 crore during FY18. In terms of net profit the quantum of losses increased in FY18as provisions were higher by 94.07% and there was a decrease in net-interest incomelevels. Net loss rose to `4674 crore in FY18 as compared to a net loss of `314 crore ayear ago. The Bank's CRAR stood at 8.69% in FY18 as compared to 11.45% in FY17. Owing toreduction in bulk deposits the cost of deposits decreased to 5.33% during FY18 from 5.94%in FY17.
Against this backdrop your Directors take pleasure in placing theBank's Annual Report for 2017-18 along with audited annual financial statements.
OUR PERFORMANCE A. FINANCIAL HIGHLIGHTS A.1. BALANCE SHEET
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31ST MAR' 17
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A.3. KEY RATIOS
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B. ASSET QUALITY
FY18 was a challenging year for the Indian Banking Industry due tocontinued stress faced in asset quality on account of various macroeconomic and otherfactors. As on 31st Mar'18 Gross NPA of the Bank stood at `26562.76 crore (FY17:`20687.83 crore) and Net NPA remained at `12229.13 crore (FY17: `13433.51 crore). In termsof ratio Gross NPA Percentage and Net NPA Percentage were 15.96% (FY17: 13.09%) &8.04% (FY17: 8.92%) respectively.
The Bank initiated various measures to arrest fresh slippage andrestricted it to `12903.28 crore for the FY18 compared to `11417.00 crore for the FY17.Provision Coverage Ratio (PCR) also improved to 62.91% in FY18 from 50.11% in FY17.
To improve asset quality the Bank initiated consistent recovery driveand recovered `3379.08 crore out of which Cash Recovery was Rs. 2071.86 crore with agrowth of 28.58 % due to concerted efforts daily monitoring and account specificresolution plan. During the aforesaid period total Reduction in NPA accounts stood at`7028.32 crore.
The Bank also made suitable amendments in existing OTS schemes byincreasing the cut off limit from `10.00 lacs to `15.00 lacs in OTS module for other NPAacs in Thumb Rule module as in existing module for Farm Sector. This resulted inaccelerated settlement of Unsecured small borrowal accounts. Further power to sanctionOTS in fraud declared accounts was also delegated to various authorities but not below thelevel of FGMLCC subject to placement of process notes to Board of Directors MCBOD forinformation on monthly basis.
Further compromisenegotiated settlement through Rin Mukti Shivir andone-to-one meeting with borrowers was adopted as another vital tool to tackle NPAs.
However recovery in big borrowal accounts above `1.00 crore remained aconstraint for the Bank for obvious reasons. For follow-up monitoring and recovery inthese accounts online module "PARTH" (Portal for Asset Resolution through Hotchase) was introduced which was very useful in assuring resolution in this segment. Nowthe coverage in PARTH has been extended to NPA accounts having outstanding above `50lakhs.
For effective and timely monitoring of NPA accounts and follow up ofdue process in NPA accounts having Ledger balance of `50.00 Lacs and above concept of"War Room" has been introduced at Head Office level with dedicated executives.
The Bank also has 9 Asset Recovery Management Branches (ARMBs) whichfunction exclusively for resolving NPAs.
Initiatives taken during FY18
The Bank introduced Online Module "PARTH" for effectivemonitoring of big borrowal accounts having outstanding above Rs. 50.00 lacs. Hot chase ofsuch borrowers and timely legal action increased our penetration rate to crack theseaccounts for recovery.
Bank introduced "War Room" with dedicated executives (TwoAsstt. General Managers and One Chief manager) at Head Office level for close monitoringof due process in NPA accounts having outstanding balance of `50.00 lacs and above.
Suitable amendments in OTS module by increasing the Cut Off limit from`10.00 Lacs to `15 Lacs for Thumb Rule method in other NPA accounts.
Power to sanction OTS in fraud declared accounts was also delegated tovarious authorities but not below the level of FGMLCC subject to placement of processnotes to Board of Directors MCBOD for information on monthly basis. This resulted insettlement of 71 OTS proposals with ledger balance of `6.52 Cr and Compromise sum of `4.02Crore in Fraud declared accounts.
Monitoring of daily recovery was introduced with Zones FGMOs to improvepenetration in NPA accounts.
The Bank organized 12 Recovery Camps in the previous year (one camp ineach month) involving all the branches. This step was very successful in terms of recoverythat amounted to `3564.55 crore. Services of Recovery Agencies and Banking Correspondentswere properly utilized for marketing of One Time Settlement Schemes (OTS).
During the FY18 Bank sanctioned 73198 Compromise cases with ledgerbalance of `1123.18 crore and compromise amount of `700.32 Crore.
The Bank participated in National Lok Adalat actively and settled 26950cases having outstanding of `314.56 crore.
E-auctions of charged immovable & movable securities were carriedout through-out the year. Special thrust was given in taking physical possession ofimmovable properties either with the help of Enforcement Agencies or by moving applicationbefore the concerned DMCMM taking advantage of amended SARFAESI Act. This step resultedinto increased auction of properties under physical possession of the Bank.
Nodal Officer at each DRT centre was assigned the role of follow-up oflegal cases on daily basis so as to minimize delay in obtaining decrees and execution.
Sale of chronicdifficult accounts to ARC was another option availableto tackle rising NPA. This was utilized in 216 accounts and assets worth `2539.21 Crorewere sold to various agencies during the FY18.
Initiatives for identifying Wilful Defaulters were undertaken in termsof guidelines of Reserve Bank of India. On completion of due diligence exerciseidentified borrowers were declared as Wilful Defaulter by the Bank and the number nowstands at 257 a two and half -fold jump from Mar'17 figure of only 101.
For effective and better monitoring all NPA borrowal accounts werecategorized under four broad heads viz. (i) Below `50000 (ii) Rs.50000 to `1500 lakhs(iii) `15.00 lakhs to 1.00 crore and (iv) above `1.00 crore. While OTS is the main focusin first two stages other additional options like sale under SARFAESI declaration ofwillful Defaulter restructuring suit at DRT are followed very methodically for next twocategories. Resolution through IBC NCLT are also used as important tools for recovery inhigh value NPA accounts. Further for borrowal accounts having outstanding above `1.00crore monthly VC meetings are held with Zonal Heads and FGMs and 'Doable' accounts areidentified where turnaround recovery is expected within the quarter. These accounts arethen followed-up on daily basis to ensure resolutions.
Bank has referred 65 NPA borrowal cases involving an amount of`12566.11 cr to NCLT for resolution under IBC during FY18.
Tie-up with National E-governance Service Ltd. (NeSL) was done forutilizing the latter's information utility services envisaged under the IBC.
New initiates to be adopted
A separate "NCLT Cell" at Head Office for exclusivemonitoring of NCLT referred cases is being formed .
Marketing of chronic NPA accounts among ARCs will be done to get betterbids.
C. CREDIT MONITORING
Fresh Slippages to NPA in FY 18 were Rs 12903 Cr. The outstanding of`3011 Cr under SDRS4A as on Mar 17 came down to `498 Cr in Mar 18. Under 525 schemeoutstanding stood at `993 Cr.
Total standard restructured advances of `4656 Cr in Mar 17 came down to`945 Cr in Mar 18. The reduction of `3711 Cr comprised `2289 Cr of slippages to NPA `929Cr up-gradation and `494 Cr net reduction in outstanding closure of accounts.
Amount of standard restructuring under CDR SME & other enterprisesof `1567 Cr `383 Cr and `2705 Cr respectively in Mar 17 was reduced to NIL `44 Cr and`901 Cr in Mar 18
RBI vide its circular no. RBI2017-18131 DBR.No.BP.BC. 101 21.04.0482017-18 dated February 12 2018 issued Revised Frame-work for Resolution of StressedAssets. As an impact of the said circular slippage to NPA was `1565 Cr and a provision of`645 Cr in Q4 of FY 18. The Bank has taken adequate steps to comply with the guidelines.
The Bank is classifying accounts into SMA as per the revised RBIguidelines and reporting them on CRILC accordingly.
Monitoring of accounts is done right from SMA-0 level. The Branchesoffices are continuously followed up for stepping up credit monitoring through use ofvarious credit monitoring tools such as Unit Visit Stock statement & DP assessmentStock verification End use verification Security Visit & Valuation QIS monitoringConduct of account Stock Audit Loan review Mechanism Periodic legal Audit Inspection& Concurrent Audit CRILC Daily SMA tracking Early Warning Signals etc.
Document Electronic Verification & Archival (DeVA) is used as a pre-disbursement tool to check & verify documentation & to weed out irregularities ifany. LAMP is another online post-disbursement tool that captures data on all creditmonitoring parameters rates accounts and facilitates monitoring. It also provides EarlyWarning Signals (EWS)
Bank has designated "Nodal Officers for Credit Monitoring" inits various controlling offices (FGMO and ZO) who oversee all the credit monitoringfunctions in their span.
Bank is committed to 360 Credit monitoring to improve health ofaccounts and prevent slippage.
D. DIGITALIZATION Alternate Delivery Channels Internet Banking:
The Bank is providing Retail Internet banking & Corporate Internetbanking facilities to its customers. The Internet Banking Customers of the Bank reached12.8 lacs as on 31st March 2018. The Bank updated its Internet Banking Services duringFY18 as under:
Registration of Atal Pension Yojana (APY).
Online registration of Mobile Banking
Facility to link different accounts in Mobile Banking
Scheduling RTGS NEFT transactions
Tamil Nadu & Chhattisgarh State tax payment
Online 15G15H submission
The Bank is providing Mobile Banking services to around 31 lakhcustomers. During FY18 upgraded version of the Mobile App was introduced enabling thecustomers to do transactions with more ease. The Bank also introduced the facility toregister for Mobile Banking through its network of ATMs.
Unified Payment Interface (UPI)
The Bank has launched "AllBank Unified Payment Interface"a Mobile App which allows funds transfer facility Mobile from one account to anotheraccount. Any Bank account holder after registration in the app can pay or pull fundsthrough the application. The payments can be made to the beneficiary through four modes asunder:
Account Number & IFSC Code
MMID & Mobile Number
RuPay Prepaid Card:
The Bank has launched RuPay Prepaid card. After reloading the card witha specified amount the user can use the card at ATMs POS machines & Online sites. Anon bank customer can also purchase the card for use.
Point of Sale (PoS):
The Bank has launched merchant acquiring business through Point of Salemachines (PoS) for the merchants to accept payments from its customers through electronicmeans. All card (RuPay MasterCard & VISA) are accepted in the PoS. Around 2638 PoSmachines have been installed as on 31.03.2018.
SMS Alert Services
SMS alert is being sent prior toafter account becomes inoperative tothe SB & Current account holders.
Customers are being intimated through SMS regarding deduction of penalcharges for fall in minimum balance.
Customers are being intimated through SMS regarding maturity of theTerm Deposit.
The Bank has 1105 ATMsCDs as on 31st Mar'18. Out of this 624 are underMOF project 315 under opex and 166 under capex model.
Cheque Truncation System (CTS)
CTS has been successfully implemented at 145 MICR Non MICR locations inall the three grids (Northern Western & Southern) covering pan India. 63 new centreswere added in the above grids during last year. Average volume of cheques processed isabout 121500 cheques per day. Bank has setup Centralised Clearing Operations Centre(CCOC) at Bhubaneswar for centralized inward clearing operations of Southern Grid.
With the implementation of CTS and in order to consolidate bankingoperations and reduce operating costs 15 service branches were dismantled during FY18.
The Bank has a well documented Board approved IT security policy andan IT security procedure in place that is being reviewed annually to keep it updated asper latest trend and best practices.
Board approved Cyber Security Policy and Cyber Crisis Management Planhave also been introduced separately apart from IT Security Policy and IT SecurityProcedure.
The Bank has deployed various security tools such as firewallIntrusion Detection System (IDS) Intrusion Prevention System (IPS) e-Mail SecurityGateway Antivirus Solution etc. to mitigate various security threats.
The Bank has implemented Hyper Text Transfer Protocol Secure (HTTPS)Extended Validation Secure Sockets Layer (EV SSL) for internet banking.
Second Factor Authentication (One Time Password Grid Card) VirtualKeyboard and CAPTCHA are implemented in Internet Banking.
Quarterly VAPT (Vulnerability Assessment and Penetration Testing) andyearly Information System Audit are also conducted for CBS & allied infrastructures toplug in gaps related to security if any.
Business Continuity Plan and Disaster Recovery
The Bank has its Data Centre in Tier 4 Data Centre (DC) and also has aDisaster Recovery Site (DRS) for its core banking solution and other criticalapplications.
The Bank has ISO 27001:2013 Certification for its DC and DR site.
The Bank has well documented Board Approved Business Continuity Planto provide un-interrupted Customer Services in case of exigency.
Bank has selected Ms SIFY Solutions to provide near site DR. Theinstallation of equipments along with the links has been completed. The setup is madeoperational at VashiNavi Mumbai.
DR Drill is conducted on a quarterly basis to keep testing DR site'sfunctional preparedness in case of any emergency.
CKYCR implemented in CBS.
Registered Device (RD) Services incorporated in CBS for biometricauthentication as per UIDAI guidelines.
Integration of PFMS based e-payment system for the state of Rajasthanand Madhya Pradesh.
Facility of sending SMS in preferred language of the customer has beenimplemented.
Filling form 60 in CBS.
Implementation of Inland Bank Guarantee Functionality in CBS.
Implementation of GST Software Module: Bank has implemented GSTsoftware "SaralGST" and the module went live on 01.07.2017
Interface of SWIFT application with CBS Exim Bills treasury and OtherSystems: To comply with the RBI regulatory guidelines Bank has completed the process ofintegrating EximBills and CBS with SWIFT w.e.f 10.04.2018
Digitalisation- New Business Buzz Word
The Bank has taken leap forward in digitization of its businessprocesses. New IT initiatives have been put in place to improve delivery of services. NewDigital products like UPI Micro ATM and Aadhar Pay have been launched. The Bank has astrong network of more than 8250 outlets providing IT enabled online Banking Facilitieswith special focus on rural and remote areas of country. The Bank is focusing to innovatealternate e-delivery channels with customer friendly options.
Moving forward with Government's thrust on digitization of transactionsand gearing up for less cash society the Bank has introduced a number of products.
AEPS On-Us & Off-Us transactions in Aadhaar seeded accounts.
PIN based On-Us & Off-Us transactions using RuPay cards
Third party Deposits are allowed at BC locations.
Aadhaar seeding facility at BC Point.
Account opening is enabled through e-KYC and auto population is live.
Passbook Printing Facility is live at BC locations.
Aadhaar based payment solution Aadhaar Pay solution has been made livefor making payment at Merchant Locations.
Small Term Deposit (RDFDDDPMIP) account opening facility is enabled atBC locations.
Real timeOnline SB account opening facility is enabled at BC locations.
New features have been introduced to make our existing e-products moreand more convenient for our customers.
OTP authentication for better security in e-commerce transaction
On-line employees PF payment to EPFO
On-line payment of customs-duty (ICEGATE)
On-line student fee collection
Bank has implemented Virtualization environment for the non-coreapplications at DC & DRS. Currently Twenty Eight (28) applications such as MailMessaging Antivirus UPI GST ASBA etc. have been successfully migrated toVirtualization.Virtualization will reduce the total number of physical serversconsiderably through optimum utilization of resources.
Security Operation Center (SOC)
Bank is in the process of Implementation of SOC (Security OperationsCenter) for which tendering process has been initiated
1. Call Centre Setup
Bank is in the process of setting up Call Centre facility in Completeoutsourced model. The call centre setup will facilitate various servicesfunctionalitiessuch as Inbound Calls (from customer) Outbound Calls (for new product promotions softrecovery) IVR Web Chat etc
Under Financial Inclusion Project the Bank has provided BankingFacilities through Online Inter-operable Kiosk Banking Solution at 5937 Bank Mitralocations using Micro ATMs.
The facility of RuPay Card operations (Micro ATMPin Padfunctionalities) has been operationalised and encouraged as a part of digital push throughusage of domestic RuPay card at Bank Mitra Locations.
Branch-wise Vacant Locker Status: Branch-wise position of vacantlocker is being displayed in the Bank's website.
E. MANAGEMENT INFORMATION SYSTEM (MIS)
The Bank has launched Automated Data Flow (ADF) to provide MIS to RBIseamlessly. Bank has set up a Centralized Data Repository (CDR) for maintaining accuracyand consistency in data provided to various stake holders. The MIS also provides analysisand information for preparation of Balance Sheet through new accounting system IndAS.
Status of Implementation of Ind AS
As per RBI guidelines banks were required to implement IndianAccounting Standards (Ind AS) from Financial Year 2018-19 with comparatives of previousyear. The Bank has submitted its Proforma Ind AS Financial Statements of Sept. 2016 andJune 2017 to RBI within the stipulated timeframe.
Meantime RBI vide its Press Release dated 05042018 has announced itsdecision to defer implementation of Ind AS by one year for making necessary legislativeamendments including Third Schedule to Banking Regulation Act 1949. Accordingly the dateof implementation of Ind AS stands deferred to 01042019 from the originally scheduleddate of 01042018.
For effective implementation of Ind AS a Steering Committee headed byExecutive Director has been formed. Further a separate Cell to handle various activitiesrelating to implementation of Ind AS has been formed at Head Office. Necessary systemchanges including IT changes have been envisaged and the steps for implementation ofsuch changes are in progress.
F. BRANCH AND OFFICE NETWORK
The Bank has pan India presence of 3245 branches. Out of 3245 domesticbranches 1207 are at Rural 764 at Semi-urban 648 at Urban and 626 in MetropolitanCentres. 3 new branches have been opened during FY18 out of which 1 is at Rural and 2 atSemi Urban centers. Further 2 Metro and 1 semi-urban branches have been merged toconsolidate the business of closely located centres.
The Bank is having one overseas branch with a dealing room at HongKong. The business of Hong Kong branch has decreased from `14130.68 crore as on 31stMar'17 to `12871.38 crore as on 31st Mar'18.The business of the branch decreased by 8.91%on Y-o-Y basis. The total deposit as on 31st Mar'18 stood at `2762.43 crore whereasadvances stood at `10108.95 crore. The Hong Kong branch earned operating profit of Rs.90.52 crore and net profit of `44.86 crore in FY18.
G. INTERNATIONAL BANKING
The Bank carries out its international business in India through its 53authorized designated branches which include 5 international branches and also throughits overseas branch at Hong Kong. The Bank also has a centralized fully equipped forexdealing room at Integrated Treasury Branch Mumbai which handles forex transactions in 9currencies and maintains 12 Nostro accounts and 1 Vostro account. Export Credit of theBank as on 31st Mar'18 stood at `2424.65 crore as compared to `2620.96 crore as on 31stMar'17. The Bank is taking all steps to increase the credit flow to exporters. Exporters'meets are arranged at various centres to explain various facilities available to them. TheBank maintains correspondent relationship with prime banks abroad. The Bank is alsocatering to the needs of Non-Resident Indians through its branches by providing varioustypes of deposit & loan products e.g. FCNR NRE & NRO deposits Housing Loan etc.The Bank is also having an arrangement with Ms. UAE Exchange & Financial Services Ltd.to facilitate Money Transfer Services to the domestic customers receiving remittances fromtheir relatives residing abroad.
H. OPERATIONS DIVISION
Business Process Re-engineering (BPR) Cell is functioning with thepurpose of bringing desired changes in the existing systems and processes products andbusiness processes of the bank on a continuous basis for maximizing performance mainlyproductivity and efficiency.
With a view to optimisation of resources reducing operating costs thebank is taking steps for re-organisation of establishments prune establishments which arenot essential. One such move was closure of 15 Service Branches across the Bank andmerging their activities with some designated branches without affecting customer service.
Various changes have been introduced to make the use of internetbanking more customer-friendly without compromising with the security aspect.
For ensuring quick and better monitoring of transactions of high valueand exceptional in nature the bank has developed a designated portal.
The bank has identified a number of areas where new systems &processes are under development. This will improve the customer convenience and quality ofcustomer service.
I. BUSINESS DIVERSIFICATION
a. Insurance Business:
i. Life Insurance:
Bank as a corporate agent of Ms. Life Insurance Corporation of Indiamobilized premium of `124.64 crore during FY18 from 21860 policies as against totalpremium of `103.73 crore mobilized during FY17. Bank's earnings from Life-Insurancebusiness during FY18 amounted to `10.34 crore as against `9.63 crore during FY17.
ii. Non Life Insurance:
Bank as a corporate agent of Ms. Universal Sompo General InsuranceCompany Limited collected premium amounting to `171.25 crore during FY18 from 371142policies mobilized by the Bank which earned revenue of `17.04 (including HCP) crore asagainst `11.81 crore during FY17.
Bank collected premium amounting to `18.45 crore during FY18 from saleof 84693 customized "Allahabad Bank Health Care Plus" policies which earnedrevenue of `2.35 crore as against `1.51 crore during FY17.
b. Mutual Funds:
Bank is distributing the Mutual Fund schemes of 6 AMCs i.e. RelianceNippon AMC Principal PNB AMC Kotak Mutual Fund AMC UTI MF AMC Franklin Templeton AMCand Essel (formerly known as Peerless) AMC through Bank branches.
Bank earned commission of Rs 66 lacs from distribution of Mutual Fundproducts during the FY18 as against `49 lakhs during FY17.
c. Depository Services:
Bank as Depository participant of NSDL & CDSL is providingDepository services to the customers and has earned an income of `51 lakhs during FY18 forproviding Depository Services.
Bank received award from NSDL for opening the maximum number of DematAccounts under PSU Banks category in the Eastern region during the NSDL's 32nd DPConference held at Kolkata on 16th December 2017.
d. Online Trading Account:
Bank is providing Broking facility to the demat customers of the Bankin association with Ms. Aditya Birla Money Limited. An income of Rs. 6.89 lakh was earnedby the Bank during FY18 on account of online trading activities.
e. Applications Supported by Blocked Amount (ASBA) Services:
Being Self Certified Syndicate Bank (SCSB) for submitting ofapplication in public issues (IPOFPO Right Issue) this facility has now been madeavailable from all the branches of the Bank.
ASBA facility is also available for SyndicateSub syndicate Members forprocessing broker bidded IPO forms at 92 designated bank branches. During FY 2017-18 theBank processed applications of the customers for 206 IPOs.
f. Cash Management Services:
The income under Cash Management Services was Rs. 4.35 crore for the FY2017-18 as against Rs. 3.98 crore during FY17.
a. AllBank Shakti:
As a step towards women empowerment the Bank has decided to offer thewomen of the nation a savings bank product "Allbank Shakti" that makes availableinvestment opportunities & much more. This product also provides benefits to them inthe form of discounts on healthcare product locker facility and concessional rate ofinterest on their housing loans & education loan for self daughter.
b. AllBank Cash Option
This product gives an instant Overdraft facility in online and offlinemode for all individual deposit holders above 18 years of age.
In order to strengthen the digital delivery effectively the Bank hasintroduced a mobile app named "emPower". This app is available on PlaystoreAppStore which has since been downloaded by over 100000 customers and transactions on thisapp are increasing on daily basis. The app is scheduled to get major enhancements likeChatbot and Artificial Intelligence based e-Commerce payments.
d. AllBank Senior
In a bid to pay its tribute to the senior citizens of the country Bankhas decided to offer a specially designed scheme" Allbank Senior" for them. Thescheme comes with multiple benefits for the senior citizens e.g. preferential treatment atbranches discount on locker rentals discount in health checkups concessional rate ofinterest in car loans and much more.
J. GOVERNMENT BUSINESS
For implementing the Prime Minister's dream for creating a pensionedsociety the Bank extended the coverage for APY by enrolling 164683 individuals in 2017-18to address the old age income security needs of the citizen.
As a Point of Presence (POP) for National Pension System (NPS) theBank is catering needs of two of its corporate clients i.e. Allahabad Bank and MS TenughatBidyut Nigam Limited Ranchi. Apart from these the Bank is acting as Point of PresenceService Provider (POP SP) for old age pension need of general public through its 286branches.
During FY18 the Bank participated in 3 series (14 tranches) ofSovereign Gold Bond Scheme launched by Govt. of India aiming to reduce the holding of theyellow metal and also to reduce import of Gold.
Central Government's decision on the recommendations of the 7th PayCommission-Revision of pension of pre-2016 pensioners family pensioners was implemented bythe Bank in August 2017 to all the eligible pensioners.
K. TREASURY - OPERATIONAL HIGHLIGHTS
The treasury earned a trading profit of `610.23 crores during FY 18thereby posting a Y-o-Y de-growth of 33.09% over FY 17. Further the Interest Incomeearned during FY18 was `4094.67 crores a 0.61% Y-o-Y de-growth over the previous period.There was an increase in domestic Investment portfolio of `13304.88 crores i.e. from`55433.36 crores in Mar'17 to `68738.24 crores in Mar'18.
The global investment portfolio of the Bank as on 31.03.2018 stood at`69036.12 crores which included domestic investment of `68738.24 crores and Overseasinvestment by our HongKong Branch to the tune of HKD 358.68 mio i.e. `297.88 crores(converted @ 1HKD = `8.3050).
The portfolio of `69036.12 crores was split in to HTM category carrying`41383.49 crores (i.e. 59.94%) AFS Category carrying `27647.70 crores (i.e. 40.05%) andHFT category carrying `4.93 crores(i.e. 0.01%).
On an effective NDTL of `219669.83 crores as on 31.03.2018 the Bankmaintained SLR securities of `61277.19 crores which was 27.90% of NDTL against arequirement of 19.50%. Out of our SLR holdings `39691.88 crores which was 18.07% ofNDTL was .held in HTM category against a limit of 19.50%.
The Bank's NSLR portfolio of `7758.93 crores comprised mainly of`2554.70 crores of Bonds Debentures `1910.23 crores of Security Receipts and `1496.26crores of shares and `1525.02 crores of Special SDL Bonds Subsidiary & JV of `156.27crore and Others for `116.45 crore. The equity portfolio of the Bank stood at `1496.26crores which included `940.89 crores of shares received through conversion of Debt underCDRSDRS4A schemes.
L. CUSTOMER CARE
The Bank has formulated customer centric policies such as CustomerRights Policy Deposit Policy Cheque Collection Policy and Compensation Policy and theseare displayed in Bank's website. The Bank has adopted "The Code of Bank's Commitmentto Customers" & "Code of Bank's Commitment to Micro & SmallEntrprises" formulated by BCSBI. Citizen Charter is adopted by the Bank and isavailable at the branches and website of the Bank. The Bank also conducts Customer ServiceCommittee meetings at every branch and Zonal Office on monthly basis for providing bettercustomer service.
Customer Grievance Redressal Cell
A web based Portal aimed at providing the customers with a platform tolodge their grievances against the Bank for deficiency in services has been provided onthe Bank's website www.allahabadbank.in under customer care. Complaints received directlyat Head Office are also lodged through this portal for monitoring record & follow up.In order to prioritise & expedite the redressal all complaints are categorized in
3 Baskets viz. AB & C. Complaints received through MOFDPG(CPGRAMS portal) RBIBCSBI MPsMLAs other regulators are put in the Basket A forexpeditious redressal. Bank has Customer Grievance Redressal Cell at Head Office. ThePrincipal Nodal Officer of the rank of General Manager designated by the Bank monitors theimplementation of customer service and complaint handling mechanism for the entire Bank.Complaints received from customers are being redressed and suitable replies are sent tothem.
Initiatives taken during FY18 for improvement in customer service
Several initiatives were also taken to remain customer focused byproviding fast service bringing in diversified products services responding tocustomers' queries in time and redressal of customer complaints.
Standing Committee of the Board on customer service are held quarterly.Also Customer Service Committees have been formed at each and every branch and at ZonalOffices. The Customer Service Committee meets once a month to study complaintssuggestions cases of delay difficulties faced reported by customers members of theCommittee and evolve ways and means of improving customer service. The members include asenior citizen too.
M. IMPLEMENTATION OF OFFICIAL LANGUAGE POLICY
The bank has been leading in the area of implementation of OfficialLanguage and achieved almost all targets in all parameters prescribed by Government ofIndia Ministry of Home Affairs Department of Official Language for FY18. All thebilingual CBS and HRMS computers are under Hindi interface. By adopting this bilingualsystem implementation of Rajbhasha is increasing. In addition the Bank is using UnicodeFonts for Hindi correspondence at all levels.
During FY18 the Bank was awarded various awards for its excellentperformance in the use of Hindi. Further Town Official Language Committees situated indifferent locations of the country also awarded the Bank offices which included awardsfrom TOLIC Hyderabad Meerut Pune Sitapur and Varanasi. The bank is successfullyconvening the Town Official Language Implementation Committee constituted by theGovernment of India in Ranchi and Gonda.
The third sub-committee of Committee of Parliament on Official Languagevisited our Pathankot Branch under ZO Amritsar on 14.06.2017 and ZO New Delhi on10.02.2018. The Committee not only expressed satisfaction but also appreciated the effortsmade by the Bank for progressive use of Hindi. Officials of DFS MOF GOI also inspectedour Head Office on 08.09.2017 regarding implementation of Official Language andappreciated the work being done by the Bank for implementation of Rajbhasha.
The Bank observes "Hindi Maah" in the month of Septemberevery year. Various competitions are organized at all India level in which staff membersof all cadre participate enthusiastically. The winners are awarded with prizes inRajbhasha function. This year also the Bank organized Hindi Maah and otherprogrammescompetitions and awards and prizes were given.
In addition the Bank organized the first All India Inter Bank HindiEssay Writing Competition in which a number of essays were received from various PSBs andRBI. The winners were awarded in the Akhil Bhhartiya Rajbhasha Sammelan organized by theBank at Staff College Lucknow on 19-20 January 2018.
N. SUBSIDIARY & JOINT VENTURE
AllBank Finance Ltd. a wholly owned subsidiary of Allahabad Bankengaged in Corporate Advisory Services Project Appraisal Issue Management LoanSyndication Debenture Trusteeship and Underwriting has since been merged with the Bankw.e.f. 14.03.2018.
The Bank holds 27.04% equity stake in Asset Management Company"ASREC (India) Ltd." along with other Banks Institutions.
The Bank holds 28.52% equity stake in joint venture company"Universal Sompo General Insurance Company Limited" for general insurance alongwith Indian Overseas Bank Karnataka Bank Ltd. Dabur Investment Ltd. and Japaneseinsurance major "Sompo".
O. ALLAHABAD BANK UP GRAMIN BANK (AUPGB)
At present one RRB i e Allahabad UP Gramin Bank (AUPGB) with HeadOffice at Banda (UP) is sponsored by our Bank. This is operating in 11 districts of UPwith 650 branches under 10 Regions. AUPGB was formed in 2010 by amalgamating six RRBssponsored by our Bank.
The paid up capital of our sponsored RRB is `61.93 crore. CentralGovernment State Government and Allahabad Bank contributed in paid up capital of AUPGB inthe ratio of 50:15:35 respectively. The bank's contribution towards capital of this RRBwas `21.67 crore. The Net worth of sponsored RRB as on 31st March'18 was `824.69 crore.
During the year total business of AUPGB increased from `16182 crore ason 31.03. 2017 to `16541 crore as on 31.03.2018 showing an increase of `359 crore ( YoYgrowth : 2.22 %). The deposit of AUPGB as on 31.03.2018 stood at Rs 10231 crore (YoYgrowth: 6.42%).
The Net Profit of our sponsored RRB as on 31.03.2018 stood at `35.33crore as against `31.37 crore as on 31.03.2017 showing a YoY growth of 12.62 %. AUPGB isin profit since inception. The Gross NPAs of AUPGB decreased from Rs 607 crore to `605crore (9.59% of total advances) during FY 18. All the 650 branches 04 Extension Countersand 13 Administrative locations are functioning under CBS platform. AUPGB is the only RRBin India which is managing its own Data Center. Total number of employees were 2589 as on31.03.2018.
Progress in opening of accounts under PMJDY as on 31.03.2017 stood at1095392 accounts out of which Rupay Debit Cards were issued in 781002 accounts.Balance outstanding in those accounts was `293.44 crore. AUPGB enrolled 294118 customersunder PMJJBY and 668130 under PMSBY. AUPGB was awarded by PFRDA for the campaign"CHAMPION OF CHANGE" for achievement under APY scheme. Out of 27325 savingslinked SHGs credit linkage was done in 22756 SHGs accounts with an outstanding of Rs123.08 crore.
The RRB sponsored by the Bank is actively participating in economicdevelopment of the areas of their presence. With the implementation of Core BankingSolution (CBS) rural customers are also getting benefit of latest technology thusproviding services to the rural poor under Financial Inclusion Plan at their doorsteps.CBS is running with anywhere banking and SMS alert.
In our sponsored RRB the facility of Micro ATMs RTGS NEFT Rupay ATMcards KCC cards KIOSK banking Solution (KBS) under FIP E-KYC Aadhar Payment BridgeSystem (APBS) under DBT etc are also being provided to customers by AUPGB.
P. AWARDS AND ACCOLADES
The Bank's MD & CEO was conferred the "BMA Management WomenAchiever of the Year Award 2016-17"
The Bank was adjudged the winner in category of "Best PaymentInitiative amongst Medium Bank" by the IBA.
The Bank also bagged the "National Payment Excellence Award2016" on Aadhaar enabled Payment System from National Payments Corporation of India(Sponsored by RBI).
The Bank was adjudged as the Best Bank in PMJDY implementation in thecategory of Group-Other states and bagged prestigious Prime Minister's Award forexcellence in Public Administration for North 24 Parganas (West Bengal).
Acknowledging the Financial Inclusion Landscape achieved by the Bankit was adjudged as Runner Up in the category of Best Financial Inclusion Initiativesamongst Medium Banks -"Banking Technology Award 2017" by Indian BanksAssociation.
Bank was conferred the prestigious "51st SKOCH AWARD 2018-PlatinumAward in PMJDY" in the category of Financial Inclusion from the independent think andpolicy advisory body of SKOCH Group.
The Bank also bagged "Makers of Excellence" award under AtalPension Yojana from PFRDA.
Q. EMPLOYEE SHARE PURCHASE SCHEME
"Allahabad Bank Employee Share Purchase Scheme" (AllBankESPS)was launched offering upto 50000000 (Five crore) new equity shares of face value`10- each of the Bank for cash at an Issue Price of `53.94 per equity share including apremium of `43.94 per equity share as determined by the Committee of Directors on ESPS toall the Eligible Employees of the Bank. The Bank was able to achieve 87.66% of totalsubscription offered as equity shares under ESPS and as many as 21742 staff subscribed tothe issue.
R. NEW REGULATORY PRESCRIPTIONS
Owing to high non-performing assets (NPA) and negative Return on Assets(RoA) for two consecutive years Bank was brought under Prompt Corrective Action (PCA)framework by RBI on 2nd January 2018. The regulatory prescriptions suggested there in bythe RBI are being meticulously followed by the Bank which include restriction onexpansion of Risk Weighted Asset (RWA) exposure to un-rated and high-risk advancescreation of non- Banking assets and accessing renewing wholesalecostly depositscertificateof deposits. The Bank also faces restrictions on distributing dividends & remittingprofits and expanding branch network.
Similarly the Bank is also pursuing the reforms agenda prescribed bythe MOF GOI for turnaround of the Bank.
S. FUTURE BUSINESS PLAN OF THE BANK
Taking into account the optimistic outlook of the economy and itsdifferent sectors the Bank will align its business objective to maximize its gains. TheBank shall primarily focus on aggressive recovery drive further build-up in CASArebalancing of loan book with focus on SMARt loans (S: Small M: Micro A: Agriculture andRt: Retail loans) thereby increasing its share to the loan book supported by technology.Further the Bank believes that its employees are its valuable assets and thereforeup-scaling of officers by means of training shall be undertaken. The Bank will also lookat different avenues to raise capital with simultaneous reduction in RWA.
T. BOARD OF DIRECTORS
As on 31.03.2018 there were 10 Directors on the Board of the Bankincluding 3 whole time Directors i.e. one Managing Director & Chief ExecutiveOfficer (MD & CEO) and two Executive Directors. During FY 2017-18 following changestook place in the composition of Board of Directors.
Smt. Usha Ananthasubramanian took over as the MD & CEO of the Bankw.e.f. 6th May 2017.
Shri Rajeev Ranjan was appointed as Government Nominee Director on theBoard of the Bank w.e.f. 17.08.2017 vice Shri Anshuman Sharma. Shri Rajeev Ranjan isposted as Joint Secretary in the Department of Expenditure Govt. of India.
Dr. Bijaya Kumar Sahoo Shri Sarath Sura and Dr. Parthapratim Pal havebeen elected as new Shareholder Directors w.e.f. 22nd March 2018 on the Board of the Bankin place of the 3 retired Shareholder Directors.
The Board wishes to place on record its appreciation for the valuablecontributions made by the retired Government Nominee Director and three retiredShareholder Directors.
U. DIRECTORS' RESPONSIBILITY STATEMENT
The Directors confirm that in the preparation of the annual accountsfor the year ended March 31 2018:
The applicable Accounting Standards were followed along with properexplanation relating to material departures if any;
The accounting policies framed in accordance with the guidelines ofthe Reserve Bank of India were consistently applied;
Reasonable and prudent judgment 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 profit of the Bank for the year ended March 31 2018;
Proper and sufficient care was taken for the maintenance of adequateaccounting records in accordance with the provisions of applicable laws governing banks inIndia and
The accounts have been prepared on the principle of "goingconcern" basis.
The Board of Directors places on record its gratitude to the ReserveBank of India Securities Exchange Board of India and Government of India and otherregulatory authorities and financial institutions for their co-operation strong supportand guidance. The Board acknowledges the support of shareholders and also places on recordits sincere thanks to its valued clients and customers for their continued patronage. TheBoard also expresses its deep sense of appreciation for the commitment shown by theemployees in supporting the Bank in its performance on all fronts.
|For and on behalf of the Board of Directors |
|Usha Ananthasubramanian |
|Managing Director & CEO |