Inlight of our results for the last financial year I must express my joy for meetingshareholders’ expectations. We will continue to transform our business and make itfuture-ready.

M V Rao

Managing Director and CEO

Dear Stakeholders

We are pleased to announce that our Bank has made tremendous progress in the lastfinancial year and that we have made a difference. I am presenting highlights of theperformance of our Bank for FY 2022 in the attached report.

Economic Outlook

The International Monetary Fund (IMF) Report released in April 2022 projects thegrowth of theed global economy by 3.6% in 2022 from a growth of 6.1% in 2021 and furtherprojects a growth of 3.6% in 2023. However the global growth is expected to be slow in2022 due to impact on economy due to ongoing war between Ukraine and Russia. The April2022 Report of the IMF estimates advanced economies to grow by 3.3% in 2022 from a growthof 5.2% in 2021. The economy of United States has suffered with the problem of highinflation in the FY22 for which they have started rate hikes to curb the inflationproblem. The emerging markets and developing economies are projected to grow by 3.8% in2022 after a growth of 6.8% in 2021. In 2023 the emerging markets and developingeconomies are projected to grow by 4.4%.

On the domestic front as per the provisional figures real GDP grew by 8.7% in 2021-22with a pickup in economic activity with the receding impact of Covid-19 pandemic. Sectorslike mining manufacturing construction and some other service sectors have reported adouble digit growth for two reasons- low base of FY21 and economic activity gainingmomentum after Covid-19 impact faded. The quarterly data shows that the domestic economyslowly started to recover from the pandemic. The Q4 2021-22 real GDP grew by (+) 4.1 percent vis-a-vis (+) 5.4 per cent in Q3 2021-22. However private final consumptionexpenditure as percentage of real GDP softened to 55.5 per cent in Q4 2021-22 as comparedto 61 per cent in Q3 2021-22. fix formation as Ontheotherhandgross percentage of real GDPinched up to 33.6 per cent in Q4 2021-22 vis-a-vis 30.1 per cent in Q3 2021-22.

The ongoing war between Ukraine and Russia is not over yet due to which we expectgrowth to remain muted in 2022-23. Nonetheless with the economic activities gainingtraction with government support provided through fiscal expenditure will help demand toachieve momentum.

This years’ Union Budget 2022-23 conveyed the futuristic viewpoint of attainingmacro-economic level growth targets with a micro-economic level all-inclusive welfare. Itlaid foundation & gave a blueprint of the economy over ‘Amrit Kal’ of next25 years from India at 75 to India at 100. In these 25 years India aims to attain thevision-promoting digital economy & fintech technology enabled development energytransition and climate action and relying on virtuous cycle starting from privateinvestment with public capital investment helping to crowd-in private investment.

Business

During the Financial Year 2021-22 the Business of the Bank stood at `532404 crore ascompared to `506886 crore in the Financial Year 2020-21 on 5.03% growth on a YoY basis.Bank’s business growth has remained robust in FY 2021-22 with deposit growth of3.85% and advances growth of 7.23%. The Deposit of the Bank stood at `342692 crore asagainst `329973 crore on March 31 2021 with a growth of `12719 crore. The CASA shareas a percentage of Total Deposits stood at 50.58% against 49.24% in the Financial Yearended March 31 2021. Total Advances stood at `189712 crore in March 31 2022 as against`176913 crore on March 31 2021 registering a growth of 7.23% on a YoY basis.

The Bank is always keen to maintain a well-balanced assets mix encompassing sectorssuch as Agriculture and Micro Small & Medium Enterprises (MSMEs) and keeping a focuson other retail assets including Housing Education and Vehicle finance. NotablyBank’s MSME portfolio has shown growth of 5.51% with Retail loan portfolio growth by5.57% on a YoY basis. Advances to MSMEs stood at `34139 crore and Agriculture at `38635crore.

Financial Performance

The Operating Profit of the Bank stood at`5742 crore in the financial year 2021-22 asagainst `4579* crore in the financial improved performance the Bank earned a net profitof `1045 crore against a net loss of `888 crore for the FY2022 over FY2021 and from`1349 crore loss to `310 crore profit during the fourth quarter on a YoY basis.

The Net Interest Income of the Bank increased to `9487 crore from `8245 during2021-22 whereas Non-Interest Income decreased to `2968 crore from `3116* crore during2020-21. Net Interest Margin (NIM) improved to 3.21% during the financial year 2021-22compared to 2.78% in the financial year 2020-21. The Cost to Income ratio alsosignificantly enhanced from 59.70%* for the financial year 2020-21 to 53.90% for thefinancial year 2021-22 Bank’s Cost of Deposits reduced to 3.86% during the financialyear 2021-22 as against 4.35% during the financial year 2020-21.

*Figures have been recalculated/ regrouped wherever necessary to confirm the currentyear classification.

Asset Quality

The consistent effort of the Bank on NPA management and garnering high-quality assetsimproved the asset quality. Thus the gross NPA percentage reduced to 14.84% as of March31 2022 compared to 16.55% as of March 31 2021 and also the Net NPA percentage wasbrought down to 3.97% as of March 31 2022 as from 5.77% as of March 31 2021. TheBank’s Provision Coverage Ratio improved to 86.69% as of 31.03.2022 from 82.54% as of31.03.2021 which has strengthened the Balance Sheet. We expect the resolution of certainbig NPA accounts through NCLT under IBC and outside during 2022-23. We shall continue tohave focused efforts to maximize NPA recovery improve asset quality and earn net profitduring the year 2022-23.

Capital

CRAR after adjustment for reckoning NPV of non-interest-bearing recapitalization bondissued by the Government of India is 13.84% as of March 31 2022 as compared to 15.87% asof March 31 2021. NPV on zero-coupon Recapitalization Bonds has been computed on accountof observation of RBI in its Risk Assessment Report 2021. Without 2020-21. Withconsidering the impact of NPV CRAR is 15.75% as of March 31 2022.

Priority Sector and Financial Inclusion

The Bank is continuously emphasizing meeting various goals under national priorities.Under various national priorities your Bank has credibly achieved the mandated targets asfollows:

? Total Priority 44.08% of adjusted net bank credit against the norm of 40%

? Agriculture 19.79 % of adjusted net bank credit against the norm of 18%

? Small and Marginal Farmers 10.39% of adjusted net bank credit against the norm of 9%

? Weaker Section 16.30 % of adjusted net bank credit against the norm of 10%

The Bank has sold PSLC to the tune of `15528 crore in FY 2021-22. These achievementsindeed speak of the Bank’s commitment to inclusive nation-building.

Bank has been actively pursuing the agenda of Financial Inclusion with keyinterventions in offering appropriate financial products using technology and enhancingfinancial literacy.

Bank also performed well under social security schemes launched by the Government ofIndia. 33.32 Lakhs 55.75 Lakhs and 15.81 Lakhs enrolments have been done under PradhanMantri Jeevan Jyoti Bima Yojana Pradhan Mantri Suraksha Bima Yojana and Atal PensionYojana respectively.

Pan India Presence

As of March 31 2022 your Bank has a Pan India presence with 17803 Customer TouchPoints. This includes a network of 4528 branches 2976 ATMs and 10299 BC Outlets. ThePan India presence covers all 28 States 7 out of 8 Union Territories and NCT Delhi. TheBank has a strong Rural and Semi-Urban presence with 65% of its total branches in Ruraland Semi-Urban Centers.

Digital Banking & Alternate Delivery Channels

In the age of information and technology the Bank recognizes the customers’changing needs and caters to the needs of the young demographic base of the country.Accordingly the Bank gives thrust on digital footprints and alternate delivery channels.

As a result the share of digital transactions through alternate delivery channelsincreased from 77.63% for FY 2020-21 to 78.05% for FY 2021-22.

Human Resources

The Bank is committed to creating a productive work environment for its employees anddepartments to maximize individual potential and expand organizational capacity. In thisregard bank has taken various steps towards Designing Developing and

Implementing Best HR Practices like Competency-based Roles Performance-basedpromotions and incentivizing learning among others to facilitate the creation of anenvironment where each member of the organization can contribute their best for augmentingour business growth.

Employee Engagement Survey Capacity Building

Initiatives to enhance capabilities of staffs Mentorship Program Succession Planning(IDPs) HR Policies Reviewed and made contemporary as well as user-friendly Engagement ofRetirees on a contractual basis Compassionate Appointment for COVID-19 victims were someof the HR Interventions initiated during the year.

Bank will continue its efforts towards aligning the HRD role with the evolvingenvironment and initiating practices benefitting employees to lead the organization inadvancing its corporate objectives.

Covid-19 Relief for MSMEs/Small Businesses/Corporates

Bank has continued extending its support during 2021-22 through various Governmentschemes launched in 2020-21 to MSMEs / Small Businesses / Corporates and extension ofGuaranteed Emergency Credit Line 01 02 03 04 to protect them from hardships caused dueto the Covid-19 pandemic.

New Initiatives

"Success is not final; failure is not fatal: It is the courage to continue thatcounts." Bank has turned the corner and registered a Net Profit of `1045 Crore forFY2022 after incurring losses for the period FY2016 FY2021. This is due to vigorousengagement commitment and new ideas implemented. Nevertheless we will not be complacentand continue to thrive to envisage new and fresh ideas to keep the business flourishingwith new products and services besides fresh processes. With this impression a few of thenew initiatives put forward are as follows:-

? ‘CPAC - Pre-disbursal Credit Review Mechanism- Credit Processing & ApprovalCentre’ for pre-disbursement approval implemented w.e.f. May ‘21 has been verysuccessful in credit growth and taking out the fear from the field staff for undertakingprompt credit decisions. Going forward the CPAC will be further leveraged for CreditMonitoring Tools to maintain asset quality.

? Co Lending: New business Vertical will be strengthened to augment credit growth.

? Green Deposit: An online Time Deposit product with extra ROI to support ‘UnitedNations Sustainable Development Goals (SDGs) and empower our depositors to opt forfinancial products that positively impact the environment.

? Veteran Connect: All our retired staff will be considered as Deemed Direct SellingAgents (DSAs). On the one hand our retired staff would be getting a good incentive andon the other hand this would help the Bank garner robust business with their localconnections.

? Dedicated mail ID i.e. greenchannel@ centralbank.co.in for Corporate Borrowers forsharing of information and quick redress of issues.

? Revamped Net Banking/Mobile Banking facility launched with additional features forease of business and better customer experience.

? Recognition and Reward programs for top performers will be instituted.

? The customer On-Boarding process will be fully digitalized through Video KYC.

? Customized Bank’s App will be launched having multi-functionality andintegration for all-in-one banking needs.

Way Forward

In light of our results for the last financial year I must express my joy for meetingshareholders’ expectations. We will continue to transform our business to make themfuture-ready to the extent needed.

I would like to acknowledge and thank all the members of the Board for their valuablesupport guidance and input to the management in our endeavours. I also thank theDepartment of Financial Services Ministry of Finance and the Reserve Bank of India fortheir support and guidance from time to time.

I am happy to present the Bank’s Annual Report for the year ended on March 312022.