1. The Board of Directors has great pleasure in presenting the Annual Report alongwith the Audited Financial Statement of Accounts and the Cash Flow Statement of the Bankfor the year ended March 31 2018.
2. Performance Highlights i. Savings Bank Deposits of the Bank increased from36239 cr as on 31st March 2017 to Rs. 36471 cr as on 31st March 2018 registering agrowth of 0.64%. ii. CASA Deposits of the Bank decreased from Rs. 43222 cr as on 31stMarch 2017 to Rs. 42485 cr as on 31st March 2018 registering a reduction of 1.71%. CASAas percentage of Total Deposit has increased from 37.93% as on 31st March 2017 to 40.03%as on 31st March 2018. iii. Priority Sector Advances decreased from Rs. 36992 crore ason 31st March 2017 to Rs. 35949 crore as on 31st March 2018 registering a negativegrowth of 2.82%. Priority Sector Advances as of 31.03.2018 42.27% of Adjusted Net BankCredit (ANBC) surpassed the regulatory target of 40%. iv. Agricultural Advances increasedfrom Rs. 16375 crore as on 31st March 2017 to Rs. 18179 crore as on 31st March 2018registering a Y-o-Y growth of 11.02%. Agriculture Advances constituted 21.38% of AdjustedNet Bank Credit (ANBC) surpassing the regulatory target of 18%. v. MSME advance underpriority sector decreased from Rs. 15316 crore as on 31st March 2017 to Rs. 11638 croreas on 31st March 2018 registering a negative growth of 24.01%. vi. Total Retail advancehas registered Y-o-Y negative growth of 0.46 % and stood at the level of Rs. 13240 croreas on 31st March 2018 as against Rs.13301 crore as on 31st March 2017. vii. Bank'sOperating profit for the FY 2017-18 has decreased by 15.76 % to Rs. 1171 cr as comparedto Rs. 1390 cr for the FY 2016-17. viii. Interest income on investments for the FY2017-18 has decreased by 7.71% to Rs. 2682 cr as against Rs. 2906 cr for the FY 2016-17.ix. Capital to Risk (Weighted) Asset Ratio (CRAR) under Basel III has decreased and stoodat 11.09 % as on 31st March 2018 as compared to 11.39% as on 31st March 2017. x. Tier Icapital ratio of the Bank decreased from 9.05% as on 31st March 2017 to 8.81% as on 31stMarch 2018. xi. Cash recovery in NPA accounts stood at 931.24 cr in FY 2017-18 compared toRs. 1119.87 cr in FY 2016-17. xii. Recovery in Written-Off accounts increased from Rs.115 cr for FY 2016-17 to Rs. 142 cr in FY 2017-18. xiii. Cost of Deposits reduced from6.43% for FY 2016-17 to 5.62% for FY 2017-18 and as a result Interest Expenses on Depositsreduced from Rs. 7213 cr as on 31st March 2017 to Rs. 5955 cr as on 31st March 2018.xiv. Key Statistics
| || ||(Rs. In Crore) |
|Particulars ||As of 31st 2017 ||March 2018 |
|Deposits ||113943 ||106130 |
|Advances ||77538 ||74239 |
|Business Mix ||191481 ||180369 |
|Investments ||40190 ||38040 |
|Priority Sector ||36992 ||35949 |
|Agriculture ||16375 ||18179 |
|Particulars ||As of 31st March |
| ||2017 ||2018 |
|Retail ||13301 ||13240 |
|MSME-PS ||15316 ||11638 |
|Gross NPA ||12619 ||16361 |
|Net NPA ||7735 ||7839 |
|% of Gross NPA to Gross ||16.27 ||22.04 |
|Advance || || |
|% of Net NPA to Net Advance ||10.66 ||11.95 |
3. Income Analysis
The financial performance of the Bank for the year 2017-18 is summarized below:
(Rs. In Crore)
|Particulars ||As of 31st March |
| ||2017 ||2018 |
|Operating Profit ||1390.21 ||1171.16 |
|Interest Income ||10181.67 ||8932.23 |
|Interest Expenditure ||7773.31 ||6456.41 |
|Net Interest Income ||2408.36 ||2475.82 |
|Non-Interest Income ||1251.39 ||1163.52 |
|Provisions and contingencies ||2253.84 ||3094.31 |
|Profit before Tax ||[1275.36] ||[3178.75] |
|Provision for Taxes ||[411.73] ||[1255.60] |
|Net Profit ||[863.63] ||[1923.15] |
4. Key Financial Indicators
| ||(in %) |
|Particulars ||As of 31st March |
| ||2017 ||2018 |
|Net Interest Margin ||2.00 ||2.19 |
|Return on Assets ||[0.67] ||[1.59] |
|Cost to Income Ratio ||62.01 ||67.82 |
|Provision Coverage Ratio ||50.56 ||60.20 |
|Cost of Deposit ||6.43 ||5.62 |
|Cost of Funds ||6.54 ||5.84 |
|Yield on Advance ||8.98 ||8.00 |
|Yield on Fund ||8.03 ||7.51 |
|Yield on Investments ||7.57 ||7.26 |
|Return on Equity ||[13.50] ||[26.17] |
|Earning Per Share (Rs.) ||[11.89] ||[18.06] |
|Book Value (Rs.) ||65.42 ||27.45 |
5. During the year 2017-18 Bank has not opened any new Branch due to PromptCorrective Action (PCA) enforced on Bank by Reserve Bank of India. Further Bank hasmerged two Branches in other existing Branch and Branch network of the Bank stood at 1872(including 72 Satellite Offices). All the branches of the Bank are covered under CBS.
6. During the year 2017-18 Bank has established 3 new E-Smart centers taking thetotal to 98. In E-Smart centers customers can deposit cash deposit cheques withdrawcash get their passbooks printed and access their account through internet bankingfacility on 24*7 basis.
7. During the year 2017-18 Bank installed 1775 POS and has launched a new mobilebanking channel i.e. Unified payment
Interface (UPI) promoted by NPCI.
Board of Directors has not recommended any Dividend for the FY 2017-18.
9. Net Worth and CRAR
9.1 Net Worth of the Bank stood at Rs. 5108.04 cr as on 31st March 2018.
9.2 CRAR :
| || ||(in %) |
| ||Basel III || |
| ||March 2017 ||March 2018 |
|CRAR Tier- I Capital ||9.05 ||8.81 |
|CRAR Tier -II Capital ||2.34 ||2.28 |
|Total ||11.39 ||11.09 |
10. Changes in Board of Directors
10.1 The Board of Directors of the Bank as on 31st March 2018 comprised twoExecutive Directors being whole-time Directors and six other directors as under:
One Government of India Nominee Director
One Reserve Bank of India Nominee Director;
Two Directors appointed by Govt. of India; and
Two Shareholders' elected Directors;
10.2 Shri Ashwani Kumar Chairman & Managing Director ceased to be a Directorof the Bank w.e.f. 31.12.2017 after completion of his 5 years tenure in terms ofNotification No. F.No.4/4/2011-BO.I. dated 09th November 2012 received from Government ofIndia Ministry of Finance Department of Financial Services. The Board of Directorsplaced on record their appreciation for the exemplary leadership and direction provided byShri Ashwani Kumar during his tenure as Chairman & Managing Director on the Board ofthe Bank.
10.3 Smt Trishna Guha Executive Director retired from the Board on August31 2018 upon attaining superannuation. The Board of Directors placed on record theirappreciation for valuable contribution made by Smt Trishna Guha during her tenure asExecutive Director on the Board of the Bank.
10.4 Dr. Rajesh Kumar Yaduvanshi has been appointed as Executive
Director in terms of Notification No. F.No.4/5/(6)2017-BO.I. dated
09th October 2017 received from Government of India Ministry of Finance Departmentof Financial Services w.e.f. 09th October 2017 for a period of three years or untilfurther orders whichever is earlier under Clause (a) of Sub-Section (3) of Section 9 ofthe Banking Companies (Acquisition and Transfer of Undertakings)
Act 1970/1980 read with sub-clause (1) of clause 3 and subclause (1) of clause 8 ofThe Nationalized Banks (Management & Miscellaneous Provisions) Scheme 1970.
10.5 Shri Bankim R Desai Workmen Employee Director appointed under Clause (e) ofSub-section (3) of Section 9 of the Banking Companies (Acquisition and Transfer ofUndertakings) Act 1970/1980 read with sub-clause (1) & (2) of clause 9 of TheNationalized Banks (Management & Miscellaneous Provisions)
Scheme 1970/1980 w.e.f. 19.09.2014 ceased to be a Director of the Bank from19.09.2017 on completion of his tenure. The Board of Directors placed on record theirappreciation for valuable guidance provided by Shri Bankim R Desai during his tenure asDirector on the Board of the Bank.
10.6 Dr. Umesh Bellur Shareholder Director elected under clause (i) ofsub-section (3) of Section 9 of Banking Companies (Acquisition and Transfer ofUndertakings) Act 1970/1980 w.e.f. 24th March 2015 ceased to be a Director of the Bankupon completion of his tenure of three years on 23rd March 2018. The Board of Directorsplaced on record their appreciation for valuable guidance provided by Dr. Umesh Bellurduring his tenure as Director on the Board of the Bank.
10.7 Shri V Chandrasekaran Shareholder Director elected under clause (i) ofsub-section (3) of Section 9 of Banking Companies
(A Acquisition and Transfer of Undertakings) Act 1970/1980 w.e.f. 24th March 2015ceased to be a Director of the Bank upon completion of his tenure of three years on 23rdMarch 2018. The
Board of Directors placed on record their appreciation for valuable guidance providedby Shri V Chandrasekaran during his tenure as Director on the Board of the Bank.
10.8 Dr. Yasho Verdhan Verma Shareholder Director elected under clause (i)of sub-section (3) of Section 9 of Banking Companies
(A Acquisition and Transfer of Undertakings) Act 1970/1980 w.e.f. 24th March 2015ceased to be a Director of the Bank upon completion of his tenure of three years on 23rdMarch 2018. The Board of Directors placed on record their appreciation for valuableguidance provided by Dr Yasho Verdhan Verma during his tenure as Director on the Board ofthe Bank.
10.9 During the Financial Year under review in terms of Clause (i) of sub-section(3) of Section 9 of the Banking Companies (Acquisition and Transfer of Undertakings) Act1970/1980 the Bank conducted an Extraordinary General Meeting of Shareholders of the Bankother than the Central Government for election of two Shareholder Directors at SirSorabji Pochkhanawala Bankers' Training College Mumbai on March 27 2018. After thesuccessful exercise of election two Shareholder Directors i.e. (i) Dr Yasho Verdhan Vermaand (ii) Shri Rakesh Kumar were elected as Shareholder Directors representingshareholders other than Central Government. These Directors have hold office for threeyears w.e.f. March 28 2018.
11. Directors' Responsibility Statement
The Directors in preparation of the annual accounts for the year ended March 31 2018confirm the following: i. That in the preparation of the annual accounts the applicablestandards have been followed along with proper explanation relating to materialdepartures. ii. That they have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Bank at the end of the financialyear and of the profit or loss of the Bank during the period. iii. That they have takenproper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of applicable laws governing banks in India for preventingand detecting frauds and other irregularities. iv. That they have prepared the annualaccounts on a going concern basis.
12.1 The Board of Directors expresses its patronage and sincere thanks to theBank's valued customers shareholders and well-wishers for their valuable contributiontowards the progress of the Bank and seek their continued support and co-operation infuture. 12.2 The Board of Directors acknowledges with gratitude the timely advicevaluable guidance and support received from Government of India Reserve Bank of India& other regulators.
12.3 The Board of Directors is also thankful to the Financial Institutions / Banksand Correspondents for their cooperation and support to the Bank.
12.4 The Board of Directors wish to place on record the deep appreciation ofthe valuable contribution made by the staff at all levels for the progress achieved inBank's business. The Directors look forward to their continued cooperation in fasterbusiness development and progress of the Bank.
| ||For and on behalf of Board of Directors |
|Place: Mumbai ||(Ramesh S. Singh) |
|Date: 31.05.2018 ||Executive Director |