The Board of Directors have pleasure in presenting the Annual Report together withAudited Balance Sheet and Profit & Loss Account of the Bank for the year ended 31stMarch 2021.
Global Business Performance
Outbreak of novel Corona virus (COVID-19) pandemic resulted in contraction of globaleconomy growth by 3.3 percent in 2020 as against 2.8 percent growth witnessed in 2019marking one of the worst financial crises. Substantial fiscal and monetary stimuluspackages are released by the Governments and Central Banks across the globe to fight thedeadly virus and bring life to normal. Indian Economy is no exception to this event. Inline with global economy India witnessed major economic disruptions during the FinancialYear forcing the Government to impose strict lockdown measures bringing the manufacturingand trade activities to almost zero. Continuous lockdown forced mobility restrictions andsocial distancing led to unparalleled supply chain disruption and fall out in consumerdemand. This forced Indian GDP growth to contract by 8.0% in FY 2020-21 as against thegrowth of 4.0 percent in FY 2019-20.
During FY 2020-21 the major focus of the Bank was to impart continuous service to thecustomer amidst the spread of virus while keeping in place the interest of all the staffmembers. Bank followed Business Continuity Plan duly adhering to COVID Protocol to servethe interest of the Customer Staff and all stakeholders.
Bank's global business stood at Rs.379885 Crores as of 31st March 2021 as compared toRs.357723 Crores as of 31st March 2020. Deposits and Advances stood at Rs.240288Crores and Rs.139597 Crores as of 31st March 2021 as compared to Rs.222952 Crores andRs.134771 Crores as of 31st March 2020 respectively.
On Deposits front Bank further reduced the concentration of Bulk deposits and improvedthe share of low cost deposits. CASA deposits grew by 13.83 percent over 31st March 2020and stood at Rs. 102165 Crores as on 31st March 2021 a milestone achievement in thehistory of the Bank. CASA ratio remained at 42.52 percent.
The operational efficiency of the Bank improved further during the year. Constraints oncapital has restricted the Bank to expand the credit portfolio. Bank continued toaccelerate the growth under Capital light advances such as Housing and jewel loan in orderto protect the interest income under a falling interest rate regime. The improvednon-interest income during the year has further strengthened the operating efficiency ofthe Bank. Bank could contain its expenditure on account of lower interest expenses. As aresult Bank could achieve operating profit to the extent of Rs.5896 Crores for FY2020-21.
Bank could reduce the Gross Non Performing Assets substantially from Rs 19913 Crores toRs 16323 Crores and thereby brought down the GNPA percent from 14.78 percent to 11.69percent through multi-pronged and focused recovery initiatives. NNPA has been brought downfrom Rs 6603 Crores to Rs 4578 Crores in absolute terms and from 5.44 percent to 3.58percent. PCR of the Bank has improved substantially from 86.94 percent as on 31.03.2020 to90.34 percent as on 31.03.2021 one of the highest in industry.
As a result of this approach Bank could register Net profit to the tune of Rs 831Crores for FY 2020-21.
Income and Expenditure Analysis
The Interest on advances was limited to Rs.10834 Crores as compared to Rs.11513 Croresreceived previous year. Interest on investments has improved from Rs.5208 Crores in FY2019-20 to Rs.5712 Crores in FY 2020-21. However overall interest income has recordeddecline during the year mainly due to falling interest rate regime. Besides the InterestIncome which includes interest recovered from NPA accounts stood lower in FY 2020-21 asagainst in FY 2019-20.
Growth under low cost deposits and shedding of bulk deposits has helped in controllingthe cost of deposit. CASA has improved from Rs.89751Crores as of 31st March-2020 toRs.102165 Crores as of 31st March-2021 with a growth of 13.83%. CASA% has moved up from40.26% as of 31st March-2020 to 42.52% as of 31st March-2021. Further the fallinginterest rates in Savings Bank deposit and term deposits has kept interest expenditure incontrol.
Despite reduction in interest on advances Net Interest Income has improved fromRs.5303 Crores in FY 201920 to Rs 5899 Crores in FY 2020-21. Operating expenses has goneup marginally from Rs 5129 Crores in FY 201920 to Rs.5562 Crores in FY 2020-21 due toprovision for performance linked incentives and pension commutation arrears on account ofthe XIth Bipartite settlement.
Yield on Advances has decreased from the level of 8.62 percent in FY 2019-20 to 8.00percent in FY 2020-21. Cost of deposits has been brought down from 5.33 percent in FY2019-20 to 4.70 percent in FY 2020-21. As a result Net Interest Margin (NIM) stood higherby 9 bps at 2.39 percent in FY 2020-21 as against 2.30 percent in FY 2019-20.
Capital Raised during FY 2020-21
Capital Infusion by Government of India
The Bank received a capital infusion of Rs.4100 Crores (Rupees Four Thousand OneHundred Crores only) from Government of India towards contribution of Central Governmentin the preferential allotment of equity shares of the Bank during the Financial Year2020-21 as Government's Investment. The amount of Rs.4100 Crores (Rupees Four ThousandOne Hundred crores only) received by the Bank on 31.03.2021 is kept in Share ApplicationMoney Account as on 31.03.2021 for allotment of shares to Government of India.
Capital Adequacy Ratio
The Bank's capital adequacy ratio as on 31st March 2021 stood at 15.32 % as per BaselIII norms.
The Bank has 3217 domestic Branches as on 31st March 2021 as against 3270 Branches ason 31st March 2020 comprising of 903 Rural Branches (28.07%) 960 Semi Urban Branches(29.84%) 653 Urban Branches (20.30%) and 701 Metropolitan Branches (21.79%). The Bankalso has 48 Regional Offices 3 Extension Counters 1 Satellite Office 3 City BackOffices and 6 Nodal Audit Offices. During the year under review (FY 2020-21) the Bank hasmerged 53 Branches with other existing branches and closed 7 Zonal Offices and 1 SatelliteOffice.
Corporate Governance reflects the built in value system of the Bank in conducting itsday to day affairs. The Bank recognizes the critical importance of effective CorporateGovernance for the safe and sound functioning of the Bank and lays emphasis on ensuringthat structures processes and systems are put in place to establish strategic objectivesto serve the interest of the Bank and its stakeholders with a view to facilitate effectivemonitoring.
SEBI (Listing Obligations and Disclosure Requirements Regulations) 2015 (LODR)
As perSEBI (LODR)
The Bank is providing remote e-voting facility to its shareholders in allAnnual General Meetings/ Extraordinary General Meetings.
The Code of Conduct is applicable to all members of the Board and the SeniorManagement (i.e. General Managers of the Bank).
The Bank is submitting a quarterly compliance report on Corporate Governance tothe Audit Committee of the Board and to BSE & NSE where the shares of the Bank arelisted.
The Bank is also submitting Quarterly Investor Grievance Report to BSE &NSE.
In view of ongoing Covid19 pandemic the Bank has conducted Annual General Meeting (AGM2020) through virtual mode i.e. in compliance with SEBI guidelines.
Pursuant to SEBI (Prohibition of Insider Trading) Regulations 2015 the Bank hasformulated IOB Code of Conduct for Prohibition of Insider Trading for its DesignatedPerson.
Investor Education & Protection Fund (IEPF)
As per the guidelines of Ministry of Corporate Affairs (MCA) Government of India theBank transferred Unpaid Dividend amount pertaining to the year 2012-13 to IEPF duringSeptember 2020. The unpaid dividend data pertaining to the years 2013-14 has beenuploaded in MCA website and is also available at www.iob.in. Accordingly the Bank hascomplied with the guidelines of Government of India in respect of transfer of unpaiddividend to IEPF.
Bank is complying with all guidelines/regulations laid down by the RegulatoryAuthorities and Government of India from time to time. The Bank redresses the shareholdersgrievances without any delay.
Board of Directors
The business of the Bank is vested with the Board of Directors. The MD & CEO andEDs function under the superintendence direction and control of the Board. The strengthas on date is six directors comprising three whole time Directors one GOI NomineeDirector one RBI nominee director one director elected from amongst the shareholders toduly represent their interest. The MD & CEO presides over the meetings of the Board asChairman.
The position of the terms of directors during the FY 2020-21 is as under:
|Name ||Date of Joining ||Term Ended on ||Designation |
|Shri Partha Pratim Sengupta ||24.07.2020 ||31.12.2022 ||Managing Director & Chief Executive Officer |
|Shri Ajay Kumar Srivastava ||09.10.2017 ||08.10.2022 ~ ||Executive Director |
|Ms S Srimathy ||10.03.2021 ||09.03.2024 ||Executive Director |
|Ms Annie George Mathew ||22.07.2016 ||*** ||Govt. Nominee Director |
|Dr. Deepak Kumar ||18.09.2019 ||*** ||RBI Nominee Director |
|Shri Navin Prakash Sinha ||08.12.2017 29.01.2021 # ||07.12.2020 28.01.2024 ||Share Holder Director |
^ - Shri Ajay Kumar Srivastava term of office extended for a period of two years witheffect from 09.10.2020.
# - Shri Navin Prakash Sinha has been re-elected as Share Holder Director for thesecond term from 29.01.2021 till 28.01.2024 *** Until Further Orders
During the FY 2020-21 the following directors' tenure ended as below:
|Name ||Date of Joining ||Term Ended on ||Designation |
|Shri Karnam Sekar ||15.04.2019 (w.e.f. 01.04.2019) ||30.06.2020 ||Managing Director & Chief Executive Officer |
|Shri Sanjay Rungta ||08.12.2017 ||07.12.2020 ||Share Holder Director |
The Board of Directors are grateful for the valuable guidance and support received fromthe Government of India Reserve Bank of India Securities and Exchange Board of India(SEBI) Stock Exchanges State Governments Financial Institutions and all OverseasRegulators. The Board of Directors acknowledge with thanks the valued Customers EmployeesUnion Officers Association domestic and international banking group the shareholders& other stake holders for their valued support and continued patronage with the Bank.
The Board also wishes to place on record its profound appreciation for the valuablecontribution of the Bank's Staff at all levels and looks forward to their continuedinvolvement with commitment towards achieving the future goals.
| ||For and on behalf of the Board of Directors |
| ||-Sd/- |
|Chennai ||Partha Pratim Sengupta |
|14th June 2021 ||Managing Director & Chief Executive Officer |