Dear Shareholders and Stakeholders
1. The year 2018-19 started on a promising note with expectation of strengthening ofglobal growth. However the economic and political scenario during the year changedgradually with escalation of trade tensions economic disruption in Europe and financialtightening in China and developed countries especially the USA. Consequently centralbanks paused on monetary tightening towards end of the year to ward off a possible globalslow-down.
2. The Domestic economic growth decelerated on account of lower agriculture andindustrial growth. The tight money policy pursued by the RBI in the 1st half of FY 201819later gave way to relaxation in policy stance by way of reduction in repo rates.
3. The deposits and advances growth rate of the banking industry during FY 2018-19 washigher particularly advances grew by 13.2% on the top of 10% growth rate of previousyear. The performance of Indian Banking industry also improved with improvement in GrossNPAs ratio and CRAR with Capital infusion by the Government.
4. Of course there were sector specific issues. The NBFC sector faced severe liquiditycrunch after the default of IL & FS. The MSME Sector also faced cash flow problemsbecause of economic stress. RBI and banks realizing the genuine need of these sectorshad to adopt an accommodative stance to alleviate their problem.
5. The year also saw the consolidation of PSU Banks with the merger of BOB VijayaBank and Dena Bank which created fourth largest Bank in Indian Banking space. This alsosent a signal to all the PSU Banks that they should be in readiness for such aneventuality. This move needs to be seen as an opportunity for PSBs to explore theirinherent strength for creating a synergy amongst them.
6. The EASE Reforms Agenda of the Ministry of Finance Government of India furthergained ground as the Ranking of PSU banks was rolled out during the year. The EASEranking in a way has hastened the process of digitalization and establishing the rightkind of set up and processes in the direction of 'responsible banking' 'customerresponsiveness' etc.
7. One of the important development during FY 2018-19 has been the Supreme Court'ssquashing of RBI Notification dated 12th February 2018 which mandated resolution ofstressed accounts within 180 days failing which they were to be referred to the NCLT to bedealt under IBC. At present the industry waits revised guidelines from the central bankto provide a direction and clarity to the process of bad loans clean up.
8. IT and Technology is going to be the cutting edge in banking space in future. Alongwith the upgradation of IT platform the use of data analytics for business developmentand better targeting of clientele base will be of immense significance.
9. The use of Fin-tech solutions in banking in various fields be it payment systemsSME and retail lending insurance wealth management etc. has assumed greater importance.Because of complementarity and cooperative nature of relationship between the Fintech andfinancial institutions we can visualize an exponential growth in this field.
10. Your Bank during FY 2018-19 has consolidated its position and has come out of PCAin the shortest possible time. There has been improvement in financial indicators likeNIM NPA ratios CRAR and above all the Bank has posted a net profit of Rs.252 crore in Q4FY 2018-19. With expected resolutions of large accounts which are being dealt with underIBC the financial position will further strengthen in FY 2019-20.