It is my privilege to address you and release the Annual Report for the financial year2019-20. Your Bank has made material progress in several key areas during the financialyear 2019-20 and has put in place some of the best practices for the benefit of customerswhile at the same time taking care of stakeholders' interests. The Bank has continued tofocus its attention on creating efficiency at every step with a view to generate value indischarge of its functions.
As we are aware the novel COVID-19 pandemic has caused unprecedented disruptionsacross the world leading to considerable adverse impact on the global economy. Thecountry-wide lockdowns as one of the unavoidable measures that most countries haveadopted to fight this invisible enemy has resulted in slowdown in production consumerdemand trade and commerce etc. affecting both the supply side and the demand side of theeconomy. As per the latest IMF projection of June 2020 Indian economy is likely tocontract by 4.5% in 2020-21 and then to grow by 6.0% in 2021-22.
The banking system is an important driver of economic growth as it mobilizes savingsand channelizes them into productive investment. The Government of India announcedrecapitalization of public sector banks in 2019 and also took various measures tostrengthen the banking system. Banks have now moved towards risk based pricing creationof stressed asset verticals cash-flow ring fencing etc. with a view to improveefficiency. Such measures would inevitably strengthen the efficacy of the banking systemand increase credit flow in the economy. To ensure better transmission of policy rates tothe real economy the banks have linked their various products to external benchmarks.This move would further enhance the efficiency gains for the economy as a whole.
I am glad to report that your Bank has taken various initiatives during the year suchas organizational restructuring for better focus on business rationalization of retaillending products to suit the customers setting up of Centralized Credit Processingbranches for retail loans setting up of separate vertical for marketing in all regionaloffices etc. Further your Bank has taken initiatives as regards analytics based businesstransformation programme in the process of upgradation of data warehousing as well asfor planning of MSME hubs among others. All these efforts should take your Bank towards apath of sustained efficiency and profitability. Going forward the efficiency should befurther boosted by the various reforms undertaken effective resolution of stressedassets speeding up the process of recovery having effective fraud control mechanisms inplace improved transmission etc.
The Government of India had announced reforms agenda for public sector banks in January2018 under the Enhanced Access & Service Excellence (EASE) Reforms Index. The EASE 1.0(2018-19) and EASE 2.0 (2019-20) addressed different issues of public sector banks in asystematic manner and thus paved the way for more effective governance by the Boards andleadership. The reforms have resulted in the improvement in various dimensions such asunderwriting monitoring recovery smart banking etc. Thus having laid down a strongfoundation for robust banking in EASE 1.0 and EASE 2.0 the EASE 3.0 aspires to make thepublic sector banks "prime movers of smart lending and tech-enabled EASE of bankingfor an aspiring and inclusive India while simultaneously hard-wiring sound bankingthrough IT systems and adopting a transformative agenda for governance and outcome-centricHR".
Your Bank has embraced the core value of customer centricity through effective branchbanking and other novel mechanisms to keep pace with the fast evolving standards of thefinancial services industry. The Bank continues to leverage technology for better customerservice. Your Bank has put in place a strong risk management practice and structures forcompliance with very high standards of governance including internal controls andvigilance that will definitely have a long lasting impact on the overall performance ofthe Bank.
As regards corporate governance your Bank has adhered to the highest degree oftransparency. The thrust of corporate governance has always been to maximize stakeholdervalue by pursuing ethical practices in the conduct of business and maintaining highstandards of disclosure and transparency. The Bank has adopted best practices andstandards of governance that are monitored by various committees of the Board.
In conclusion I would like to thank our customers for allowing us to serve themdiligently. I also thank our stakeholders for their constant support in all our endeavors.
With best wishes
Date: June 29 2020