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IDBI Bank Ltd.

BSE: 500116 Sector: Financials
NSE: IDBI ISIN Code: INE008A01015
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VOLUME 41540
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OPEN 37.10
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VOLUME 41540
52-Week high 55.75
52-Week low 17.50
P/E
Mkt Cap.(Rs cr) 37,837
Buy Price 36.35
Buy Qty 1.00
Sell Price 36.65
Sell Qty 20.00

IDBI Bank Ltd. (IDBI) - Director Report

Company director report

Your Bank's Board of Directors is pleased to present the Report on its Business andOperations for the financial year ended March 31 2020.

In the year 2019-20 the Indian economy experienced a broad-based decelerationwith as low down in private consumption on the demand side and the weakening of growthmomentum in both industry and services on the supply side. While agriculture and alliedactivities remained buoyant industrial activities decelerated on the back of sharpslowdown in manufacturing activity electricity gas water supply & other utilityservices as well as construction and growth in services sector moderated due to slowdownin trade hotels transport communication and services related to broadcasting andfinancial services real estate and professional services. The subdued domestic economicactivities during the year was further impacted by the nation-wide lockdownannounced in March 2020 to contain spread of coronavirus (Covid-19) pandemic. Banks beingan integral part of the economy were consequently impacted due to India's economicslowdown and towards the end of the fiscal due to the effect of Covid-19 pandemic. Whilecomprehensive policy measures were initiated to minimise the impact of Covid-19 on theeconomy the overall impact of these measures is expected to be observed with a lag. Itis therefore crucial to view the performance of your Bank in this context.

Financial Highlights

As on March 31 2020 your Bank's aggregate deposits and advances touchedRs. 222424crore andRs. 129842 crore respectively. Your Bank's business highlights for the periodunder review are presented in Table 1.

Table 1: Key Financials

(InRs. crore)
As on March 31 2019 As on March 31 2020
Capital 7736 10381
Reserves & Surplus 29875 23644
Deposits 227372 222424
Borrowings 45288 36749
Other Liabilities & Provisions 10013 6745
Total Liabilities 320284 299942
Cash & Balances with RBI 12730 10539
Balances with Banks & Money at Call & Short Notice 8503 19892
Investments 93073 81780
Advances 146790 129842
Fixed & Other Assets 59188 57890
Total Assets 320284 299942
For the period 2018-19 2019-20
Total Income 25372 25295
Total Expenses (other than provisions) 21319 20183
Provisions (other than tax) 26879 14079
Profit/ (Loss) Before Tax (22827) (8967)
Provision for Tax (7711) 3920
Profit/ (Loss) After Tax (15116) (12887)

During the year under review your Bank's total income amounted toRs. 25295 crorecomprising interest income ofRs. 20825 crore and other income ofRs. 4470 crore. Interestexpenses stood atRs. 13847 crore and operational expenses atRs. 6336 crore accountingfor total expenditure (excluding provisions and contingencies) ofRs. 20183 crore.

Total provisioning of your Bank declined for the year due to lower provisioning forNon-Performing Assets (NPAs). The provisions includeRs. 1 3920 crore towards provisionforNon-Performing Assets (NPAs) bad debts written-off and investments. As theprovisioning remained substantial your Bank incurred a net loss ofRs. 12887 crore duringFY 2019-20.

While the Earnings per Share (EPS) during the year was negative due to the losses theBook Value per Share (excluding intangible assets) stood atRs. 11.21 as at end-March2020.

Report on the Performance and Financial Position of Subsidiaries and Joint Ventureincluded in the Consolidated Financial Statement as on March 31 2020

Name of the entity

Net Assets i.e. total assets minus total liabilities

Share in profit or loss

As % of consolidated net assets (InRs. Crore) As % of consolidated profit or loss (InRs. Crore)
1 2 3 4 5
Parent : IDBI Bank Ltd. 97.67% 34024.37 100.41% (12887.33)
Subsidiaries:
Indian:
1. IDBI Capital Markets & Securities Ltd. 0.88% 305.25 0.08% (9.66)
2. IDBI Intech Ltd. 0.18% 63.04 (0.07)% 9.07
3. IDBI Asset Management Company Ltd. 0.31% 108.85 (0.01)% 0.75
4. IDBI MF Trustee Company Ltd. 0.00% 1.57 0.00% 0.10
5. IDBI Trusteeship Services Ltd. 0.64% 224.40 (0.27)% 35.18
Foreign: NA NA NA NA
Minority Interests in all subsidiaries 0.30% 103.58 (0.12)% 15.94
Associates (Investment as per the equity method)
Indian
1. Biot ech Consortium India Ltd. NA NA 0.00% 0.35
2. National Securities Depository Ltd. NA NA (0.16)% 21.03
3. NSDL e-Governance Infrastructure Ltd. NA NA (0.05)% 6.72
4. Nor th Eastern Development Finance Corporation Ltd. NA NA NA NA
Foreign: NA NA NA NA
Joint Ventures (as per proportionate consolidation/ investment as per the equity method)
Indian
1. IDBI Federal Life Insurance Company Ltd. 1.27% 441.20 (0.55)% 70.96
Foreign NA NA NA NA
Total 100.96% 35168.66 99.48% (12768.76)
Elimination (0.96)% (332.94) 0.52% (66.48)
Net Total 100.00% 34835.72 100.00% (12835.24)

Note: None of the above subsidiaries have any subsidiary.

* - In respect of Pondicherry Industrial Promotion Development and InvestmentCorporation Ltd. (PIPDICL) the Bank has not received any financial statements &transactions details from the company. Hence information is not consolidated in the abovetable. The Bank has written down investment in PIPDICL to Rupee one.

Material changes and commitments if any affecting financial position of IDBI Bankwhich have occurred during the end of financial year and the date of Board Report

There were no material changes and commitments affecting the financial position of theBank which occurred between the end of the financial year of the Bank i.e. March 312020 and the date of the Directors' Report.

The details in respect of adequacy of internal financial controls with reference to thefinancial statements

According to Section 143(3)(i) of the Companies Act 2013 w.e.f. FY 2015-16 the reportof the Statutory Auditors shall state whether the Bank has adequate Internal FinancialControl (IFC) systems in place and the operating effectiveness of such controls in thecontext of the financial statements. IFCs as referred to in Section 143(3)(i) of theCompanies Act relate to Internal Financial Controls Over Financial Reporting (IFCO-FR).Your Bank's Management is responsible for establishing and maintaining internal financialcontrols based on the internal control over financial reporting criteria established bythe Bank considering the essential components of internal control stated in the GuidanceNote on Audit of IFCO-FR issued by the Institute of Chartered Accountants of India (ICAI).These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to the Bank's policiessafeguarding of its assets prevention & detection of frauds & errors accuracy& completeness of the accounting records and timely preparation of reliable financialinformation as required under the Companies Act 2013 the Banking Regulation Act 1949and the guidelines issued by the RBI.

Your Bank has put in place an IFCO-FR Framework for evaluation of the existing internalfinancial controls system and appointed a Consultant for validating the compliances withrespect to the documentation certification reporting process of the controls across allbusiness verticals/ departments and ascertaining the adequacy and effectiveness of thecontrols in the Bank in all material aspects with respect to financial reporting.

During 2019-20 the Consultant submitted the Internal Compliance Certificate for thequarters ended June 2019 to December 2019 after carrying out the testing and validation ofall the underlying processes as per the Bank's IFCO-FR framework. The Consultant reviewedthe status of action taken on the open issues carried forward in the quarterly report ason December 31 2019 the updated status of compliance as on May 15 2020 and reportedthat 5 out of the 13 open issues reported as on December 31 2019 were adequatelyaddressed and closed with the implementation of remedial measures. The concerneddepartments are working closely for addressing the remaining open issues.

Details of Significant changes (i.e. change of 25% or more as compared to the immediateprevious financial year)* in key financial ratios along with a detailed explanationthereof including:

Particulars 2018-19 2019-20 Comments
Net Interest Margin (%) 2.03 2.61 Interest expenses decreased byRs. 2319 crore and interest income decreased byRs. 1247 crore resulting in an increase in Net Interest Income byRs. 1072 crore.
Net NPA% to Net Advances 10.11 4.19 Net NPA has decreased byRs. 9398 crore.
Provision Coverage Ratio (including Technical Write- offs (TWO)) 82.88% 93.74% Net NPA as on March 31 2020 stood atRs. 5439 crore as againstRs. 14837 crore as on March 31 2019.
Total Provision (including TWO) as on March 31 2020 increased by Rs.9273 crore.
CASA to % of total deposits 42.54% 47.74% CASA balance increased toRs. 106188 crore as on March 31 2020 as againstRs. 96730 crore as on March 31 2019 and total deposits have reduced toRs. 222424 crore as on March 31 2020 fromRs. 227372 crore as on March 31 2019.

* Including change of less than 25% in case of PCR and CASA

Capital Adequacy

In adherence to the Pillar 1 guidelines of the RBI under Basel III framework your Bankcomputes regulatory capital requirement for credit market and operational risks on aquarterly basis. As per the Basel guidelines banks in India are mandated to maintainCapital Conservation Buffer (CCB) in a phased manner commencing from March 31 2016. Inline with the RBI's notification dated March 27 2020 whereby the transitionalarrangements of Basel III capital regulations were reviewed the applicable CCB for March31 2020 was stipulated at 1.875%. Accordingly the minimum regulatory requirement of ‘TotalCapital + CCB' was 10.875% as on March 31 2020. Your Bank's ‘Total Capital +CCB' ratio was 13.31% as on March 31 2020. Similarly your Bank's ‘CommonEquity Tier 1 (CET1) + CCB' ratio was 10.54% as against the regulatory requirement of7.375%. Your Bank's ‘Tier 1 + CCB' ratio stood at 10.57% as on March 31 2020as against the regulatory requirement of 8.875%.Your Bank's Leverage Ratio as on March 312020 was 4.97% against the minimum regulatory requirement of 3.50%.

Your Bank has a Board-approved policy on Internal Capital Adequacy Assessment Process(ICAAP) in line with the Pillar 2 norms of the Basel III framework. This policy enablesyour Bank to internally assess and quantify those risks which are not covered under Pillar1 as well as to develop appropriate strategies to manage and mitigate risks under normaland stressed conditions.

Your Bank has also put in place a comprehensive stress testing framework in line withthe RBI guidelines. The stress testing framework enables your Bank to assess itsperformance under exceptional but plausible events and facilitates appropriate proactivestrategies to meet unforeseen contingencies. The framework also includes scenario analysisand reverse stress testing. Scenario analysis covers a study on impact of further increasein gross NPA crystallisation on Non-Fund facilities in NPAs & Technically Written-Off(TWO) accounts and impact of illiquid securities on capital and profitability of the Bank.Your Bank also separately created scenarios to make a preliminary assessment of thedetrimental impact of Covid-19 pandemic on the various sectors to which the Bank hasexposure which in turn will adversely affect the Bank's profitability. The mechanism ofreverse stress testing has been added to the framework to find the level of stress whichmay adversely impact the capital to take it to a pre-determined floor level.

Your Bank has adopted a Disclosure Policy in accordance with the Pillar 3 requirementsunder the Basel norms. Accordingly disclosures as at the end of each quarter are hostedon your Bank's website thereby exhibiting high degree of transparency.

Your Bank follows the Standardised Approach under Credit Risk for computation ofcapital charge. Your Bank follows Basic Indicator Approach (BIA) to compute regulatorycapital charge for Operational Risk. A comprehensive set of Key Risk Indicators (KRIs) andRisk & Control Self-Assessment (RCSA) framework has been rolled out across differentbusiness segments for ensuring effective control mechanism. For Market Risk your Bankuses Standardised Measurement Method (SMM) to compute regulatory capital requirements.

Business Strategy

During the year your Bank continued to pursue its strategic endeavours ofrepositioning itself as a retail-focussed bank by rebalancing its business mix. On theasset front the Bank undertook concerted efforts to granularise its portfolio mix throughtargeted growth in retail assets. Towards this end your Bank focussed on augmentinggrowth in advances towards Retail Agri and MSME (RAM) segments which has also aided inlowering the Bank's Risk Weighted Assets (RWAs). On the liability front measures wereinitiated to augment the share of low-cost deposits in total deposits by enhancing theshare of CASA and retail deposit base which has aided the Bank in reducing its overallcost of deposits. In alignment with its business strategy your Bank consciouslyrestricted its corporate loan book in order to migrate towards a capital light model whilesimultaneously de-risking its business portfolio.

The acquisition of majority stake by the Life Insurance Corporation of India (LIC) inthe Bank also unfolded a number of business synergies especially on the retail front. Torealise the full potential arising out of these business synergies a joint Task Force hasbeen constituted with the senior management of the Bank and LIC as its members to chartout the future roadmap both for the Bank as also for the associate companies. The TaskForce has identified major areas of synergies for the short-term such as selling of LICpolicies through the Bank's branches management of cash and other premium receipts of LICthrough the Bank's branches enabling the technical wherewithal available in both the Bankand LIC for offering digital solutions to both the policy holders of LIC and customers ofthe Bank. To derive mutual benefit from these synergies a Working Group has alsobeen created to carry forward the initiatives identified for synergy by the Task Force andeffectively implement the decisions taken at the management level.

Your Bank remained committed towards its vision of becoming one of the most preferredand trusted banks for all its stakeholders. Accordingly your Bank adopted a customer-centricstrategy by focusing on customer delight. The Bank has successfully launched DataAnalytics and Customer Relationship Management (CRM) sales modules which enabled the Bankto adopt a focussed and targeted approach towards delivering the right product at theright time to its customers. Furthermore your Bank continued to invest in technologicalinnovation and up-gradation in order to ensure better customer service and experience.Your Bank also remains committed towards the Government of India's (GoI's) Enhanced Accessand Service Excellence (EASE).

Apart from measures undertaken to augment its business performance your Bank alsostrived to strengthen its financial health by improving its asset quality. Your Bankfocussed its efforts towards containment of fresh Non-Performing Assets (NPAs) andmaximising recovery from the existing impaired assets. Your Bank has a dedicated verticalviz. NPA Management Group (NMG) for focussed and aggressive approach towards resolutionand recovery. Your Bank has set up a dedicated desk to handle cases under CorporateInsolvency Resolution Process (CIRP). Furthermore your Bank has also set up a dedicatedteam for focussed attention for recovery in the retail segment. Apart from these measuresthe Bank has a Credit Monitoring Group (CMG) with the objective of monitoring the onset ofstress in the Bank's portfolio. Your Bank also successfully implemented an automated andcomprehensive bank-wide Early Warning Signals (EWS) System which has augmented the Bank'scapabilities to identify high-risk accounts and accounts showing early signs of stress inthe pre-Special Mention Accounts (SMAs) stage. These initiatives have resulted inreduction of incipient stress containment of slippage and improvement in credit qualityof the Bank.

Your Bank recognising the importance of a robust risk infrastructure in decisionmaking process and enhancing business sustainability has been proactively strengtheningits risk management practices. Additionally your Bank is also promoting a strongcompliance culture in the Bank by adhering to key laws rules regulations and variouscodes of conduct to maintain its reputation and win the trust of customers investors andregulators.

Key Business Initiatives

In alignment with its strategic imperatives your Bank has undertaken a number ofinitiatives across the entire spectrum of its products and services to meet the bankingrequirements and financial goals of its retail as well as corporate customers. In additionto introducing new products and services your Bank has also revamped its existing suiteof products and services to cater to the evolving customer preferences and emergingbanking and regulatory landscape.

To tap the synergies emerging from the majority stake acquisition by LIC your Bank hascontinued to offer a wide array of innovative specialised and customised products andservices to the employees agents and subsidiaries of LIC for meeting their banking andinvestment requirements.

Your Bank is effectively leveraging its geographical network of 1892 branches 3683ATMs and 58 e-lounges to serve its customers. In addition to the brick-and-mortarbranches the Bank is also strengthening and revamping its digital infrastructure withstate-of-the-art features for smooth convenient safe and secure anytime anywherebanking experience for its customers. Furthermore your Bank also introduced a number ofnew and innovative applications to pass on the benefits of technological advancement toits customers. In alignment with the GoI's ‘DigiDhan Mission' aimed atencouraging greater use of digital payments by all sections of the society your Bank hasdesignated one officer at every retail branch as a ‘Digital Guru' to act as asingle point of contact for all digital product related queries.

Your Bank remains committed towards promoting the priority sectors by activelycontributing to Priority Sector Lending (PSL) thereby also adhering to the RBI's mandate.Your Bank is also proactively contributing towards the national objective of inclusivegrowth by ensuring access to financial products and services by the vulnerable sections ofthe society at affordable cost in a fair and transparent manner. Your Bank also leveragedits network of Business Correspondents (BCs)/ Business Facilitators (BFs) in an effort toincrease penetration in rural and semi-urban areas and thereby ensure greater financialinclusion as also provide an added impetus to its Priority Sector Lending (PSL) business.As financial literacy is a pre-requisite for effective financial inclusion your Bankundertook a number of initiatives to improve financial literacy among the beneficiaries toenable them to make best use of the financial services offered to them.

Your Bank provides an entire gamut of Trade Finance (TF) products and services to itscustomers through its Category B Authorised Dealer TF centres and identified Retail TFbranches. Your Bank also secured a mandate from the GoI in March 2019 to conduct oil andnon-oil Indo-Iran trade settlements in Indian Rupees (INR) under the Bilateral RupeePayment Mechanism.

Your Bank acts as an agent for Central Government and State Governments to manage theirreceipts and payments. Your Bank is authorised to collect Central Government Taxes andState Receipts in select States and Union Territories offer Small Savings Schemes throughits branches and disburse Central Civil Defence and Railway Pensions. Your Bank has alsoenabled online collection of Employees' Provident Fund Organisation

(EPFO) and Employees' State Insurance Corporation (ESIC) dues. Your Bank offerseffective Cash Management Services (CMS) by extending a comprehensive range of collectionsand payment solutions. Your Bank has been empanelled as the sole sponsor bank for variousGoI schemes such as Pradhan Mantri Shram Yogi Maan-Dhan Pradhan Mantri Kisan Maan-Dhanand Pradhan Mantri Laghu Vyapari Samman. Your Bank is also authorised to participate ine-freight payment system of Indian Railways and is collecting e-freight in select Zones.Your Bank is also authorised to facilitate utility bill payments through Bharat BillPayment System (BBPS).

During the year your Bank continued to invest in technological innovation andupgradation to augment its business while maintaining its focus on customer service andexperience. Your Bank also laid special emphasis on upgrade and overhaul of many of itscritical IT hardware systems and committed long term investments in the enrichment of itsIT assets.

In order to promote data-driven sales your Bank has set up a Centre of Excellence(COE) for Data Analytics with the objective of achieving improved customer wallet share bydelivering the right products at the right time. The detailed description of the Bank'sinitiatives undertaken during the year is outlined in the Management Discussion andAnalysis section of the Annual Report.

Impact of Covid-19 pandemic on the Bank's business

The SARS-CoV-2 virus responsible for Covid-19 continues to spread across the globeincluding India. This has resulted in a significant volatility and adversity in global andIndian markets and economic activity. Implementation and extensions of lockdown haveresulted in disruptions of business and common life. With the situation still unfoldingit is difficult to predict time horizons and to gauge the eventual impact. The majoridentified challenges for the Bank's borrowers across various industry sectors areexpected to arise from eroding cash flows and elongated working capital cycles. The Bankis gearing itself on all fronts to meet these challenges. Despite these events andconditions the Bank's results in future are not expected to be significantly adverse norhave an impact on the going concern assumption.

The liquidity position ability to service debt or any other commitments capital orprofitability of the Bank may not be significantly impacted. However the Bank isconstantly monitoring the status of above parameters and taking corrective actions.

Board of Directors

Your Bank's Board of Directors is broad-based and its constitution is governed by theprovisions of the Banking Regulation Act 1949 the Companies Act 2013 the Articles ofAssociation of the Bank and the requirements of corporate governance as envisaged in theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 (LODRRegulations). The Board functions directly as well as through various board committeesconstituted to provide focussed governance in the important functional areas of the Bank.The Board of Directors includes 15 members with the Chairman of LIC as Non-ExecutiveChairman of the Bank MD & CEO and two DMDs one Official Nominee Director of LIC twoNominee Directors of GoI and eight Independent Directors including one Woman IndependentDirector.

As on March 31 2020 the Board comprised fourteen Directors viz. Shri M. R. KumarNon-Executive Chairman Shri Rakesh Sharma MD & CEO Shri Samuel Joseph Jebaraj andShri Sur esh Khatanhar DMDs as Whole Time Ms. Meera Swarup and Shri Sudhir ShyamGovernment Nominee Directors and Shri Rajesh Kandwal LIC Nominee Director asNon-Executive Directors; Shri Gyan Prakash Joshi Dr. Ashima Goyal Shri Bhuwanchandra B.Joshi Shri Samaresh Parida Shri N. Jambunathan Shri Deepak Singhal and Shri S anjayGokuldas Kallapur as Independent Directors. present strength of 14 (fourteen) Directors onthe Board meets the requirement provided under Article 114(a) of the Articles ofAssociation.

Apex Committees

The Board has a total of fourteen committees to oversee various functional areas ofyour Bank's business and operations. The Board committees include Audit Committee of theBoard Executive Committee Nomination and Remuneration Committee Stakeholders'Relationship Committee HR Steering Committee Frauds Monitoring Committee RecoveryReview Committee Risk Management Committee Independent Directors' Committee CorporateSocial Responsibility Committee Non-Cooperative Borrowers' Review CommitteeCustomer Service Committee Wilful Defaulters' Review Committee and Information TechnologyStrategy Committee.

Corporate Governance

Your Bank is committed to adopt the best corporate governance practices. It believesthat effective corporate governance is not just a requirement for regulatory compliancebut also a facilitator for excellence in governance including enhancement of stakeholders'value. The details of your Bank's corporate governance practices are given in this AnnualReport as a separate section under Corporate Governance Report.

Business Responsibility Report

Securities and Exchange Board of India (SEBI) vide Gazette Notification dated December26 2019 amended the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015. As per the amendment the Annual Report of the top one thousand listed entitiesbased on market capitalisation must include Business Responsibility Report (BRR). The BRReport should describe initiatives taken by the listed entity from an The environmentalsocial and governance perspective. The Bank's Business Responsibility Report has beenhosted on the website of the Bank(https://www.idbibank.in/business-responsibility-report.asp).

Statement under Section 134 of the Companies Act 2013 read with Rule 5 of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014

There were no personnel in your Bank's service during the financial year under reviewwho received remuneration of overRs. 1.02 crore annually. Besides there were no personnelin the service of the Bank for a part of the year who received remuneration in excessofRs. 8.50 lakh per month. Further there were no personnel employed throughout thefinancial year or part thereof who was in receipt of remuneration at a rate which in theaggregate was in excess of that drawn by Managing Director & CEO or Deputy ManagingDirector of the Bank and who held by himself or along with his spouse and dependentchildren not less than 2% of the equity shares of the Bank.

Statement under Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 for year ended March 31 2020 – Details of Top Ten Employees

The statement indicating details of top ten employees of the Bank in terms ofremuneration drawn during FY 2019-20 is as follows:

Sr. No. Name

Desig- nation

Annual Remuneration received (`)

Nature of employment whether contractual or otherwise

Qualifications and experience of the employee Date of commencement of employment

The last employment held by such employee before joining the company

The age of such employee

1. Shri Ashok Kumar Gautam ED 6067840.67 Contractual B.Sc and CAIIB (CAIIB - Certified Associate of the Indian Institute of Bankers) Experience in IDBI Bank – 11 months June 24 2019 Axis Bank 57 years 5 months
2. Shri Suresh Khatanhar

DMD

5406776.95

Formerly ED and currently DMD

M.Com (Commerce Post Graduate) I.C.W.A. (Cost Accountant) CAIIB (CAIIB - Certified Associate of the Indian Institute of Bankers) Certification Programme in IT and Cyber Security for Senior Management (Certification - Other) Experience in IDBI Bank – 22 years 11 months January 15 2020 (as DMD)

Dena Bank

56 years 9 months

3. Shri Shailendra Govind Nadkarni

ED

4571304.44

Confirmed Employee

B.E (Engineering Graduate) M.E (Engineering Post Graduate) Certification Programme in IT and Cyber Security for Senior Management (Certification - Other) CAIIB (CAIIB - Certified Associate of the Indian Institute of Bankers) Experience – 26 years 7 months

November 01 1993

Bombay Port Trust

55 years 5 months

4. Shri Arun Kumar Aggarwal

CGM

4456558.46

Confirmed Employee

B.Sc (Science Graduate) M.B.A (Management Graduate) CAIIB (CAIIB - Certified Associate of the Indian Institute of Bankers) Dip. in COBOL (Diploma) Experience – 33 years 5 months

December 22 1986

J.K Industries Ltd

58 years 7 months

5.Shri Subroto Gupta*

Advisor

4437579.75

Formerly ED and currently Advisor

B.Tech (Engineering Graduate) I.C.W.A. (Cost Accountant) Certification Programme in IT and Cyber Security (Certification - Other) Experience - 31 years 11 months

November 18 2019 (As Advisor)

West Bengal Consultancy Organisation Ltd.

60 years 8 months

6.Shri Sunit Sarkar

CGM

4399904.36

Confirmed Employee

B.Tech (Engineering Graduate) Post Graduate Diploma in Business Management (Management Graduate) I.C.W.A (Cost Accountant) CAIIB (CAIIB - Certified Associate of the Indian Institute of Bankers) Experience - 26 years 9 months

September 01 1993

ESAB(I) Ltd

53 years 10 months

7.Shri Mohammad Afzal Khan

CGM

4386950.01

Confirmed Employee

B.Sc (Science Graduate) Certification Programme in IT and Cyber Security (Certification - Other) Dip. in Computer Programming System Analysis & Design (Diploma) Experience - 31 years 6 months

November 21 1988

Right Business Systems Pvt. Ltd.

57 years 9 months

8.Shri Anil C. Raj

CGM

4378086.59

Confirmed Employee

B.Sc (Science Graduate) L.L.M (Law Post Graduate) Experience - 30 years 4 months

February 01 1990

Practicing Advocate

57 years 10 months

9.Shri Sudhir Sharad Kulkarni

CGM

4346025.8

Confirmed Employee

B.E (Engineering Graduate) JAIIB (JAIIB - Junior Associate of the Indian Institute of Bankers) Experience - 29 years 8 months

September 26 1990

Hindustan Fluoro Carbons Ltd.

55 years 10 months

10.Smt. Baljinder Kaur Mandal

CGM

4338429.97

Confirmed Employee

B.E (Engineering Graduates) P.G.D.M (PGD in Management) JAIIB (JAIIB - Junior Associate of the Indian Institute of Bankers) Experience - 32 years

June 01 1988

IDBI Bank Ltd.

54 years 8 months

* - Includes remuneration as ED up to September 30 2019 and subsequently as Advisorw.e.f. November 18 2019.

Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo a)Conservation of Energy

Y our Bank has taken the following measures towards conservation of energy:

C onventional light fixtures have been replaced with energy-efficient LED lightfixtures/ lamps/ tubes to save power consumption at the Bank's Head Office in Mumbai aswell as all other offices and residential buildings of the Bank.

? The new signages at the Bank's branches are being fitted with LED lights in place ofconventional power consuming light fixtures.

? F or all new or refurbished branches LED lights being used in place of conventionalfluorescent/ PL lamps.

? Solar panels have been installed for common lighting/ pumps etc. in the Bank's newoffice building as well as residential buildings developed by NBCC (India) Ltd. at NewDelhi and new residential buildings developed by Central Public Works Department of India(CPWD) at the Jawaharlal Nehru Institute of Banking and Finance (JNIBF) Annexe inHyderabad.

? W ater harvesting facility has also been new residential buildings constructed at theJNIBF Annexe in Hyderabad.

b) T echnology Absorption

Y our Bank has been proactively scrutinising absorbing the latest technology-basedinnovations which have potential to empower its business functions enrich its customerexperience and optimise its readiness towards opportunities and challenges of the future.A few noteworthy technology-driven reforms adopted recently by your Bank includesuccessful and smooth migration of Bank's Core Banking Solution from 7.x to 10.xupgradation of its internet banking system from its current E-Banking (EB) version tolatest system namely Finacle E-Banking Architecture (FEBA) implementation of EarlyWarning Signals (EWS) Solution successful roll-out of Analytics and CRM Sales modulesbuild-up of Enterprise-wide Data Warehouse (EDW) successful roll-out of offsite moduleand online module with mobile application of Enterprise-wide Fraud Risk ManagementSolution (EFRMS). Under EDW project your Bank has built various analytical/ predictivemodels for NPA prediction for various loan products churn prediction for portfolio ofAgri/ MSME current/ saving account cross-sell up-sell model customer profilingand segmentation etc. Your Bank successfully implemented Automated Data Flow (ADF)application and Centralised Information Management System (CIMS) for generation of returnsand furnishing to RBI respectively through automated process. Your Bank's upgradedinternet banking application has features like UPI-based payments additional securityfeatures such as CAPTCHA image phrase while logging in for retail and corporate netbanking customisable widgets in dashboard personalised dashboard for retail &corporate net banking Bharat Bill Payment System (BBPS) integration etc. Your Bank'smobile banking application is also integrated with EFRMS for real-time adaptiveauthentication i.e. analysis of abnormal changes in login linking of other bank'saccounts through UPI in mobile banking and also to schedule interbank fund transfer (NEFT)option.

Y our Bank has already upgraded the capacity

Security Operations Centre (SOC). Your Bank is also working towards furtherstrengthening its security aspects enhance its capacity under the private cloudarchitecture to adequately provide for future business growth set-up and implement anApplication Programming Interface (API) gateway to be used for micro-services rolling ofVirtual Desktop Interface (VDI) chatbot on the cloud setup Artificial Intelligence (AI)and Machine Learning (ML) for emerging areas like Cognitive Chat Bots implementation ofnext generation firewalls. While your Bank has already embarked upon implementation ofvarious futuristic solutions like an Online Loan Review System for automation of thelending related processes the Bank is also in the foray of implementing many securityinitiatives like Enterprise Data Loss Prevention (DLP) and data classification solutionBackup Solution for in end-points and encryption etc. Details of other initiatives takenin the Information Technology space have been provided in the Management Discussion andAnalysis section of the Annual Report.

c) F oreign Exchange Earnings and Outgo

D uring the year total foreign exchange earned by Bank wasRs. 9284.35 lakh (excludingforeign currency cash flows in derivatives and foreign currency exchange transactions) andtotal foreign exchange outgo was

Rs.15147.09 lakh towards the operating and capital expenditure requirements.

RBI's Prompt Corrective Action (PCA)

The RBI vide its letter dated May 05 2017 initiated PCA for your Bank in view of itshigh net Non-Performing Assets (NPA) and negative Return on Assets (ROA). The Bank hasbeen taking necessary actions to comply with the RBI's directive in this regard. The Bankhas also put in place a comprehensive turnaround strategy to improve its financialposition. Furthermore in compliance with the RBI directive with regard to restriction infresh corporate exposure the Bank has reviewed its internal credit policy and has beenworking towards limiting its corporate exposure.

Directors' Responsibility Statement

The Board of Directors hereby declares and confirms that:

a. In the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

b. The Directors had selected such accounting policies and applied them consistentlyand made judgements and estimates that are reasonable and prudent 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 and loss of the Bank for that period;

of c.its The Directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Bank and for preventing and detecting fraud and other irregularities;

d. The Directors had prepared the annual accounts on a going concern basis;

e. The Directors had laid down internal financial controls to be followed by the Bankand that such internal financial controls are adequate and were operating effectively; andf. The Directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.

Acknowledgements

Your Bank's Board of Directors is sincerely grateful to the Government of IndiaReserve Bank of India (RBI) all other statutory/ regulatory authorities and LifeInsurance Corporation of India (LIC) for their valuable co-operation and guidance. TheBoard also acknowledges with gratitude the co-operation and support received fromvarious State Governments and other banks/ financial institutions. The Board thanksvarious multilateral institutions and international banks/ institutions for their support.The Board takes this opportunity to put on record its deep sense of gratitude to its loyalshareholders and customers for extending their support during the year and looks forwardto their continued association in the years ahead. The Board appreciates the sincere anddevoted services rendered by its entire staff and highly values their commitment towardsthe Bank.

[Samuel Joseph Jebaraj] [Rakesh Sharma]
Deputy Managing Director Managing Director & CEO
Place: Mumbai
Date: May 30 2020

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