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 2018.
1. PERFORMANCE HIGHLIGHTS
Total Business of the Bank stood at ' 472323 crore as at March 31 2018 compared to '449679 crore as at March 31 2017.
^ Total Deposits stood at ' 294839 crore in March 31 2018 as against ' 296671 crore inMarch 31 2017.
Total Advances of the Bank increased to ' 177484 crore in March 31 2018 asagainst ' 153008 crore in March 31 2017 registering y-o-y growth of 16%.
# Total Income for the financial year ended March 31 2018 was ' 26659 crore ascompared to ' 27537 crore for the financial year ended March 31 2017.
# Non-Interest Income of the Bank stood at ' 2623 crore for the financial year endedMarch 31 2018 compared to ' 2876 crore for the financial year ended March 31 2017.
Operating Profit of the Bank stood at ' 2733 crore for the financial year ended March31 2018 as compared to ' 3089 crore for the corresponding previous financial year endedMarch 31 2017.
# The Bank has incurred Net Loss of ' 5105 crore for the Financial Year ended March 312018 as compared to Net Loss of ' 2439 crore during previous financial year ended March31 2017 primarily due to higher NPA provisions higher slippages/ ageing and additionalprovision in NCLT accounts significant decline in Trading Profit on Investments declinein net interest income etc.
Expenses on employees decreased by ' 230 crore during the financial year endedMarch 31 2018to ' 3984 crore from ' 4214 crore in the previous financial year ended March31 2017.
# Capital Adequacy Ratio (as per Basel-II) stood at 9.46% with Tier I at 5.50% and TierII 3.96% for the financial year ended March 31 2018. Capital Adequacy Ratio (as per BaselIII) stood at 9.04% with Tier I at 7.01% and Tier II 2.03% for the financial year endedMarch 31 2018.
Net worth stood at ' 14845 crore.
Cash Recovery increased to ' 2403 crore in the financial year ended March 31 2018 ascompared to ' 2378 crore in the previous financial year ended March 31 2017.
# Gross NPA to Gross Advances stood at 21.48% as on March 31 2018 as against 17.81% ason March 31 2017. Net NPA to Net Advances stood at 11.10% as on March 31 2018 as against10.20% as on March 31 2017.
Provision Coverage Ratio improved to 63.31% as on March 31 2018 from 58.43% ason March 31 2017.
Net Interest Margin (NIM) stood at 2.47% in the Financial Year ended March 312018.
Business per Employee stood at ' 12.71 crore in the Financial Year ended March31 2018.
Return on Assets (ROA) is (1.61)% for the Financial Year ended March 31 2018.
# The credit deployment under priority sector increased to ' 82834.61 crore during2017-18 recording a growth of ' 9484.37 crore over previous year. However to take anadvantage of excessive lending over ANBC in Priority Sector credit Bank undertooksale/purchase transactions in PSLCs. During the year Bank sold PLSC's worth ' 22030 croreunder PS Advances and purchased PSLC's worth ' 7524.50 crore under MSME portfolio. Thusnet Sale as at the close of FY was ' 14505.50 crore. Bank also sold IBPC of ' 1500 croreunder Priority sector advances. Inspite of aforesaid sale; Bank's PS lending is in excessby ' 6669.28 crore to ANBC.
# Agriculture Advance of the Bank stood at ' 30776 crore for the financial year endedMarch 31 2018.
MSME Advances for the Financial Year ended March 31 2018 stood at ' 34025 croreconstituting 19.17% of the total loans and advances.
Retail Loans increased by 50.35% to ' 48123 crore in March 2018 from ' 32008 crore inMarch 2017. Bank had launched intensive programme 'Retail Dhamaka' in December 2017 toboost Retail Credit. Proposals amounting to ' 4980 crore were sanctioned during thecampaign period.
# Housing Loan portfolio of the Bank stood at ' 21392 crore in March 2018 as against' 12510 crore in March 2017 registering y-o-y growth of 71.00%. Housing Loan Portfolioconstitutes 44.45% of the total Retail Portfolio as on March 31 2018.
Bank has established 46 RSETIs in 9 States of the country viz. MadhyaPradesh(18) Bihar(9) Maharashtra(6) Uttar Pradesh(5) West Bengal(3) Chhattisgarh(2)Rajasthan(1) Orissa(1) and Assam(1). During the year 201718 the RSETIs conducted 1280training programmes and imparted training to 33428 candidates. Out of this 23403(i.e.70%) trainees were settled through Bank credit wage settlement and self-finance.
Bank has 3 RRBs as on 31st March 2018 in 3 states covering 48 districts with anetwork of 1629 branches.
Under Financial Inclusion Bank has covered 4330 villages with population above2000 and 18376 villages with population below 2000. Bank has covered all these villagesthrough 6387 BC Agents. Bank has opened 177 Urban Financial Inclusion centres. Bank hasfurther opened 184.19 lakhs Basic Saving Bank Deposit Accounts (BSBDA) through its BCs andBranches. Total balance in these accounts is ' 2567 crore as on 31st March 2018.
# Total earning from Bancassurance business is ' 21.42 crore for the financial yearended March 31 2018.
As on 31st March 2018 Bank has network of 4685 branches 4886 ATMs 10satellite offices and 1 Extension Counter across the country.
2. INCOME & EXPENDITURE
Details of income and expenditure for the financial year 2017-18 are given hereunder:
(Rs. in Crores)
| ||31.03.2018 ||31.03.2017 ||Variation ||% |
|1 INTEREST INCOME ||24036 ||24661 ||(625) ||(2.53) |
|- Advances ||14478 ||16283 ||(1805) ||(11.09) |
|- Investments ||7138 ||7372 ||(234) ||(3.17) |
|- Others ||2420 ||1006 ||1414 ||140.56 |
|2 NON INTEREST INCOME ||2623 ||2876 ||(253) ||(8.80) |
|3 TOTAL INCOME (1+2) ||26659 ||27537 ||(878) ||(3.19) |
|4 INTEREST EXPENDED ||17519 ||18087 ||(568) ||(3.14) |
|- Deposits ||16222 ||17330 ||(1108) ||(6.39) |
|- Others ||1297 ||757 ||540 ||71.33 |
|5 OPERATING EXPENSES ||6407 ||6361 ||46 ||0.72 |
|- Establishment ||3984 ||4214 ||(230) ||(5.46) |
|- Others ||2423 ||2147 ||276 ||12.86 |
|6 TOTAL EXPENSES (4+5) ||23926 ||24448 ||(522) ||(2.14) |
|7 SPREAD (1-4) ||6517 ||6574 ||(57) ||(0.87) |
|8 OPERATING PROFIT (3-6) ||2733 ||3089 ||(356) ||(11.52) |
|9 PROVISIONS ||7838 ||5528 ||2310 ||41.79 |
|10 PROVISIONS FOR TAX ||(2791) ||(1090) ||(1701) ||156.06 |
|11 NET PROFIT/(LOSS) ||(5105) ||(2439) ||(2666) || |
Details of Total Provisions of ' 7838 crore charged to the Profit and Loss Accountduring the financial year 2017-18 vis-a-vis previous financial year are detailed as under:
(Rs. in Crores)
| ||31.03.2018 ||31.03.2017 ||Variation |
|Provisions for Standard Assets ||7 ||(164) ||171 |
|Provisions for NPAs ||10543 ||6216 ||4327 |
|Provisions for Restructured Accounts ||(951) ||321 ||(1272) |
|Provision on Investments ||799 ||300 ||499 |
|Provisions for Taxes ||(2791) ||(1090) ||(1701) |
|Others ||231 ||(55) ||286 |
|TOTAL ||7838 ||5528 ||2310 |
4. PROFITABILITY RATIOS
| ||31.03.2018 ||31.03.2017 |
|Cost of Deposits ||5.53 ||6.20 |
|Cost of Funds ||5.79 ||6.27 |
|Yield on Advances ||8.31 ||9.01 |
|Yield on Investments ||7.14 ||7.38 |
|Net Interest Margin ||2.47 ||2.51 |
|Cost to Income Ratio ||70.10 ||67.31 |
5. BUSINESS RATIOS
| ||31.03.2018 ||31.03.2017 |
|Interest Income to Average Working Fund (AWF) ||7.59 ||8.10 |
|Non-Interest Income to AWF ||0.83 ||0.94 |
|Operating Profit to AWF ||0.86 ||1.01 |
|Return on Average Assets ||(161) ||(0.80) |
|Business Per Employee (Rs. In crore) ||12.71 ||11.81 |
|Net Profit per Employee (' in lakh) ||(13.86) ||(6.49) |
6. CAPITAL TO RISK WEIGHTED ASSETS RATIO (CRAR)
The components of Capital Adequacy Ratio were as under:
| || |
| ||Basel-II ||Basel-III ||Basel-II ||Basel-III |
|Tier-I ||5.50 ||7.01 ||6.87 ||8.62 |
|Tier-II ||3.96 ||2.03 ||3.50 ||2.33 |
|Capital Adequacy Ratio ||9.46 ||9.04 ||10.37 ||10.95 |
7. NET LOSS
The Bank has incurred net loss amounting to ' 5105 crore during the financial yearended March 31 2018. Accordingly Board of Directors has not recommended any dividend onequity shares for the Financial Year 2017-18.
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:
Dr. Saurabh Garg ceased to be the Director of the Bank w.e.f. close of workinghours on 16th August 2017 in terms of Notification of Ministry of Finance Government ofIndia.
Shri Govind Mohan was appointed as Government of India Nominee Director of theBank w.e.f 17th August 2017 vide Government of India Notification dated 17th August2017.
# Shri B. S. Shekhawat was appointed as Executive Director of the Bank w.e.f 09thOctober 2017 for a period of 3 years.
Prof (Dr.) Atmanand was appointed as Part time Non Official Director of the Bankfor a period of 3 years w.e.f. 27th December 2017.
Shri Supratim Bandyopadhyay ceased to be Shareholder Director of the Bank w.e.f.close of working hours on 17th March 2018 consequent upon his appointment as Whole-timeMember (Finance) in Pension Fund Regulatory and Development Authority (PFRDA).
The Board places on record its appreciation of valuable contribution extended by Dr.Saurabh Garg and Shri Supratim Bandyopadhyay who ceased to be the directors of the Bankduring the Financial Year 2017-18.
8.1 Government of lndia Ministry of Finance vide Notification dated 14th May 2018 hasnominated Dr. Bhushan Kumar Sinha Economic Adviser Government of India Ministry ofFinance Department of Financial Services as Government Nominee Director in place ofexisting Government Nominee Director- Shri Govind Mohan on the Board of our Bank withimmediate effect (i.e. with effect from 14th May 2018) and until further orders. Dr. Sinhabelongs to the 1993 batch of Indian Economic Service. Presently he is posted as EconomicAdviser in the Department of Financial Services (DFS) Ministry of Finance Government ofIndia New Delhi. Before joining DFS in May 2018 Dr Sinha had a three year stint asEconomic Adviser in the Department of Investment & Public Asset Management (DIPAM).Dr. Sinha holds a Master's degree in Business Administration (MBA) from the NationalGraduate School of Management (NGSM) Australian National University (ANU) CanberraAustralia and a Ph.D from the Department of Financial Studies University of Delhi.
8.2 Government of lndia Ministry of Finance Department of Financial Services videnotification dated 23rd May 2018 has appointed Shri Tapan Ray as Part-time Non-officialDirector as well as Non-Executive Chairman in Central Bank of India for a period of threeyears from the date of notification of his appointment (i.e. with effect from 23rd May2018) or until further orders whichever is earlier. Shri Tapan Ray retired as Secretary(Corporate Affairs) Government of India after 35 years in the Gujarat cadre of the IAS.He has a Degree in Mechanical Engineering from the Indian Institute of Technology Delhi.He is also a Post Graduate in Public Policy from the Woodrow Wilson School PrincetonUniversity USA and a Master of Public Administration from the Maxwell School SyracuseUniversity USA. He also holds degrees in Law and International Trade. He has served inthe Ministries of Defence Textiles Power Science & Technology InformationTechnology and Planning in the Government of India. He has been Principal Secretary in theFinance Department in Gujarat. Shri Ray has a wide corporate experience of over 12 yearsin various companies of Government of Gujarat as well as Government of India. He has beenthe Managing Director of the Gujarat State Petroleum Corporation and its group companiesfor about 5 years. As Secretary (Corporate Affairs) he has served on the Board of SEBI.
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 Chief Vigilance Officer only. Directors and Employees may also approachChairman of the Audit Committee on need basis. This helps to curb malpractices preventfrauds 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 out of the PCA 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 2018:
# The applicable accounting standards have been followed along with proper explanationrelating to material departure if any;
The accounting policies framed in accordance with the guidelines of the ReserveBank of India were consistently applied;
# Reasonable and prudent judgement and estimates were made so as to give a true andfair view of the state of affairs of the Bank at the end of the financial year and of theprofit of the Bank for the financial year ended March 312018;
Proper and sufficient care was taken for the maintenance of adequate accountingrecords in accordance with the provisions of the applicable laws governing banks in India; and
# The accounts have been prepared on a going concern basis;
# Internal Financial Control are adequate and were operating effectively; and
Proper systems have been devised to ensure compliance with the provisions of allapplicable laws and these systems were adequate and operating effectively.
13. CORPORATE GOVERNANCE
The Board of the Bank is committed to adapt Corporate Governance practices in letterand spirit. The Bank has adopted 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. The Board wishes to place on record itsappreciation of the dedicated services and contribution made by members of staff.
| ||For and on behalf of the Board of Directors |
| ||Sd/- |
|Place : Mumbai ||Rajeev Rishi |
|Date : May 25 2018 ||Managing Director & Chief Executive Officer |