Your Directors have pleasure in presenting the Annual Report of the Bank along with theAudited Statement of Accounts the Profit and Loss accounts and the cash flow statementfor the year ended March 31 2020.
1. Performance highlights
Total Business of the Bank stood at Rs. 486007 crore as at March 31 2020 compared toRs. 467584 crore as at March 31 2019.
Total Deposits stood at Rs. 313763 crore as against Rs. 299855 crore in March 31 2019.
Total ADVANCEs of the Bank stood at Rs. 172244 crore as against Rs.167729 crore inMarch 31 2019.
Total Income for the financial year ended March 31 2020 was Rs. 27200 crore ascompared to Rs. 25052 crore for the financial year ended March 31 2019.
Non-Interest Income of the Bank stood at Rs. 3637 crore for the financial year endedMarch 31 2020 compared to Rs. 2413 crore for the financial year ended March 312019.
Operating Profit of the Bank increased to Rs. 4344 crore for the financial yearended March 31 2020 as compared to Rs. 3127 crore for the corresponding previousfinancial year ended March 31 2019 showing increase of 38.92%.
The Bank has incurred Net Loss of Rs. 1121 crore for the financial year endedMarch 31 2020 as compared to Net Loss of Rs. 5641 crore during previous financial yearended March 31 2019.
Expenses on employees increased by Rs. 651 crore during the financial year ended March31 2020 to Rs. 4217 crore from Rs. 3566 crore in the previous financial year ended March31 2019 due to higher provisions for terminal benefits.
Capital Adequacy Ratio (as per Basel-II) stood at 11.95 with Tier I at 7.57% andTier II at 4.38% for the financial year ended March 31 2020. Capital Adequacy Ratio (asper Basel-III) stood at 11.72% with Tier I at 9.33% and Tier II at 2.39% for the financialyear ended March 31 2020.
Net worth stood at Rs. 18467 crore.
Cash Recovery (including sale of NPA) reduced to Rs. 3326 crore in the financialyear ended March 31 2020 as compared to Rs.5161 crore in the previous financial yearended March 31 2019.
Gross NPA to Gross ADVANCEs improved to 18.92% as on March 31 2020 from 19.29%as on March 31 2019.
Net NPA to Net ADVANCEs reduced to 7.63% as on March 31 2020 as against 7.73%as on March 31 2019.
Provision Coverage Ratio improved to 77.29% as on March 31 2020 from 76.60% ason March 31 2019.
Net Interest Margin (NIM) improved to 2.80 % in the financial year ended March31 2020 from 2.54% in the Financial Year ended March 31 2019.
Business per Employee stood at Rs.14.06 crore in the financial year ended March 312020.
Return on Assets (ROA) is -0.35% for the Financial Year ended March 31 2020.
The credit deployment under priority sector stood at Rs. 79988 crore during FY 2019-20.However to take an advantage of excessive lending over ANBC in Priority Sector creditBank undertook sale/purchase transactions in PSLCs. During the year Bank sold PLSCs worthRs. 16325 crore under PS ADVANCEs and purchased PSLC's worth Rs. 3136 crore under MSMEportfolio. Thus net Sale as at the close of FY was Rs. 13190 crore.
Agriculture ADVANCE of the Bank stood at Rs. 34419 crore for the financial year endedMarch 31 2020 as against Rs.35655 crore for the previous financial year ended March 312019.
MSME ADVANCEs for the Financial Year ended March 31 2020 stood at Rs. 29250crore without PSLC and Investment in SIDBI and Mudra Ltd. constituting 16.98 % of thetotal Loans & ADVANCEs.
Retail Loans increased to Rs. 46106 crore in financial year ended March 31 2020from Rs. 41042 crore in financial year ended March 31 2019.
Housing Loan portfolio of the Bank stood at Rs. 25821 crore for the financialyear ended March 31 2020 as against Rs.23301 crore for financial year ended March 312019 registering y-o-y growth of 10.81%. Housing Loan Portfolio constitutes 63.58% of thetotal Retail Portfolio as on March 31 2020.
There are 46 RSETIs in 9 States of the country viz. Madhya Pradesh(18)Bihar(9) Maharashtra(6) Uttar Pradesh(5) West Bengal(3) Chhattisgarh(2) Rajasthan(1)Odissa(1) and Assam(1). During the year 2019-20 the RSETIs conducted 969 trainingprogrammes and imparted training to 27376 candidates. Out of this 19170 (i.e.70%)trainees were settled through bank credit wage settlement and self-finance. Creditlinkage of settled candidates achieved is 12045 i.e. 44%.
Bank has 2 RRBs as on 31st March 2019 in 2 states covering 23 districts with anetwork of 1174 branches.
Under Financial Inclusion Bank has covered 22706 villages by deploying 6387 BCAgents. Bank has opened 156 Urban Financial Inclusion centres. Bank has further opened 126lakh Basic Saving Bank Deposit Accounts (BSBDA) through its BCs and Branches.
Total earning from Bancassurance business is Rs. 39.55 crore for the financial yearended March 31 2020.
As on 31st March 2020 Bank has network of 4651 branches spanning 63.32%branches in rural & semi-urban areas 3642 ATMs 10 satellite offices and 1 ExtensionCounter across the country.
2. INCOME & EXPENDITURE
Details of income and expenditure for the financial year 2019-20 are given hereunder:
| || || || ||(Rs. in Crores) |
| ||31.03.2020 ||31.03.2019 ||variation ||% |
|1 INTEREST INCOME ||23563 ||22639 ||924 ||4.08 |
|ADVANCEs ||12506 ||12950 ||(444) ||(3.43) |
|Investments ||9916 ||8454 ||1462 ||17.29 |
|Others ||1141 ||1235 ||(94) ||(7.61) |
|2 NON INTEREST INCOME ||3637 ||2413 ||1224 ||50.73 |
|3 TOTAL INCOME (1+2) ||27200 ||25052 ||2148 ||8.57 |
|4 INTEREST EXPENDED ||15934 ||15866 ||68 ||0.43 |
|Deposits ||15402 ||15276 ||126 ||0.82 |
|Others ||532 ||590 ||(58) ||(9.83) |
|5 OPERATING EXPENSES ||6922 ||6059 ||863 ||14.24 |
|Establishment ||4217 ||3565 ||652 ||18.29 |
|Others ||2705 ||2494 ||211 ||8.46 |
|6 TOTAL EXPENSES (4+5) ||22856 ||21925 ||931 ||4.25 |
|7 SPREAD (1-4) ||7629 ||6773 ||856 ||12.64 |
|8 OPERATING PROFIT (3-6) ||4344 ||3127 ||1217 ||38.92 |
|9 PROVISIONS ||5465 ||8768 ||(3303) ||(37.67) |
|10 PROVISIONS FOR TAX ||212 ||(2529) ||2741 ||108.38 |
|11 NET PROFIT/(LOSS) (8-9) ||(1121) ||(5641) ||4520 ||80.13 |
Details of Total Provisions of Rs. 5465 crore charged to the Profit and Loss Accountduring the financial year 2019-20 vis-a-vis previous financial year are detailed as under:
| || || ||(Rs. in Crores) |
| ||31.03.2020 (FY) ||31.03.2019 (FY) ||Variation |
|Provisions for Standard Assets ||172 ||(115) ||287 |
|Provisions for NPAs ||4230 ||11011 ||(6781) |
|Provisions for Restructured Accounts ||(159) ||(425) ||266 |
|Provision on Investments ||1065 ||984 ||81 |
|Provisions for Taxes ||212 ||(2529) ||2741 |
|Others ||(55) ||(158) ||103 |
|Total ||5465 ||8768 ||(3303) |
4. PROFITABILITY RATIOS
| ||31.03.2020 ||31.03.2019 |
| ||(FY) ||(FY) |
|Cost of Deposits ||5.11 ||5.21 |
|Cost of Funds ||5.18 ||5.28 |
|Yield on ADVANCEs ||7.53 ||7.28 |
|Yield on Investments ||7.01 ||7.15 |
|Net Interest Margin ||2.80 ||2.54 |
|Cost to Income Ratio ||61.44 ||65.96 |
5. BUSINESS RATIOS
| ||31.03.2020 (FY) ||31.03.2019 (FY) |
|Interest Income to Average Working Fund (AWF) ||7.40 ||6.81 |
|Non-Interest Income to AWF ||1.14 ||0.73 |
|Operating Profit to AWF ||1.36 ||0.94 |
|Return on Average Assets ||(0.35) ||(1.70) |
|Business Per Employee (Rs. in crore) ||14.06 ||12.78 |
|Net Profit per Employee (Rs. in lakh) ||(3.27) ||(15.55) |
6. CAPITAL TO RISK WEIGHTED ASSETS RATIO (CRAR)
The components of Capital Adequacy Ratio were as under:
| ||31.03.2020 (FY) ||31.03.2019 (FY) |
| ||Basel-II ||Basel-III ||Basel-II ||Basel-III |
|Tier-I ||7.57 ||9.33 ||5.70 ||7.49 |
|Tier-II ||4.38 ||2.39 ||4.43 ||2.12 |
|Capital Adequacy Ratio ||11.95 ||11.72 ||10.13 ||9.61 |
7. NET PROFIT/LOSS
The Bank has incurred net loss amounting to Rs. 1121 crore during the financial yearended March 31 2020. Board of Directors has not recommended any dividend on equity sharesfor the Financial Year 2019-20.
8. CHANGES IN THE BOARD DURING THE YEAR
During the year under review the following changes took place in the Board ofDirectors of the Bank:
Shri Thomas Mathew was appointed as RBI Nominee Director of the Bank in terms ofDepartment of Financial Services Government of India Notification w.e.f. 26th April2019.
Shri Shekhar Bhatnagar RBI Nominee Director ceased to be the Director of the Bankw.e.f. close of working
Notification hours 26th April 2019 in terms of of Ministry of Finance Governmentof India. official Shri N. Nityananda part time non- director ceased to be the Directorof the Bank w.e.f. close of working hours on 20th June 2019.
Shri P. Ramana Murthy Executive Director ceased to be the Director of the Bank w.e.f.close of working hours on 16th February 2020.
The Board places on record its appreciation of valuable contribution extended by ShriShekhar Bhatnagar Shri N. Nityananda and Shri P. Ramana Murthy who ceased to be theDirectors of the Bank during the Financial Year 2019-20.
9. WHISTLE BLOWER POLICY
Bank follows Central vigilance Commission Guidelines on Whistle Blower complaints underPublic Interest Disclosure and Protection of Informers (PIDPI) resolution. Bank also has aweb based portal in the name of "Cent vigil" to facilitate reportingmalpractices by employees and directors without revealing their identities which would beknown to the General Manager Central Audit and Inspection only. Directors and Employeesmay also approach Chairman of the Audit Committee on need basis. This helps to curbmalpractices prevent frauds and boost up morale of the employees.
10. PROMPT CORRECTIVE ACTION
Reserve Bank of India vide their letter dated June 13 2017 has put the Bank underPrompt Corrective Action (PCA) in view of high net NPA and negative Return on Assets. Bankbelieves that corrective measures arising thereof will help in improving overallperformance of the Bank.
11. BUSINESS RESPONSIBILITY REPORT
Business Responsibility Report as stipulated under Regulation 34 of the Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 has been hosted on the website of the Bank (www.centralbankofindia.co.in). Any memberinterested in obtaining a physical copy of the same may write to the Company Secretary atthe Head Office of the Bank.
12. DIRECTORS' RESPONSIBILTY STATEMENT
The Directors confirm that in the preparation of the annual accounts for the financialyear ended March 31 2020:
The applicable accounting standards have been followed along with proper explanationrelating to material departure if any; The accounting policies framed in accordance withthe guidelines of the Reserve Bank of India were consistently applied; Reasonable andprudent judgement and estimates were made so as to give a true and fair view of the stateof affairs of the Bank at the end of the financial year and of the profit/ loss of theBank for the financial year ended March 31 2020;
Proper and sufficient care was taken for the maintenance of adequate accounting recordsin accordance with the provisions of the applicable laws governing banks in India; Theaccounts have been prepared on a going concern basis; Internal Financial Controls areadequate and were operating effectively; and Proper systems have been devised to ensurecompliance with the provisions of all applicable laws and these systems are adequate andoperating effectively.
13. CORPORATE GOVERNANCE
The Board of the Bank is committed to adopt best Corporate Governance practices in bothletter and spirit. The Bank has a well documented system and practice on CorporateGovernance.
The Board of Directors places on record its gratitude to the Government of IndiaReserve Bank of India and the Securities and Exchange Board of India for their valuableguidance and support. The Board acknowledges with gratitude the unstinted support andfaith of its customers and shareholders.
| ||For and on behalf of the Board of Directors |
| ||Sd/- |
|Place : Gandhinagar ||tapan ray |
|Date : June 29 2020 ||Chairman |