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State Bank of India.

BSE: 500112 Sector: Financials
NSE: SBIN ISIN Code: INE062A01020
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VOLUME 462042
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VOLUME 462042
52-Week high 339.50
52-Week low 232.00
P/E
Mkt Cap.(Rs cr) 257,430
Buy Price 288.25
Buy Qty 1131.00
Sell Price 288.45
Sell Qty 687.00

State Bank of India. (SBIN) - Director Report

Company director report

Directors' Report

I. ECONOMIC BACKDROP AND BANKING ENVIRONMENT

GLOBAL ECONOMIC SCENARIO

Global economic activity gathered momentum in the second half of last year and itcontinues to grow in 2018. World GDP growth recovered to an estimated 3.8% in 2017compared to 3.2% in the previous year. Both the developed and the developing countriesperformed well growing at 2.3% and 4.8% respectively. The US economy grew more thanexpected against the backdrop of abatement of past exchange rate appreciation impact andoil price movement coupled with support from good consumption growth and rebound ininvestment. Euro area also surprised positively witnessing its fastest pace of growth in adecade and surpassing the US growth in 2017. The uncertainty surrounding Brexit weighed onthe UK economy however it recovered in the final months of the year. In Japan improvedglobal demand for technological products stimulated investment in high-end sectorsincluding auto machinery including robots and semi-conductors.

Among the emerging and developing world economic contraction ended in Russia andBrazil thereby adding to growth. However despite improvement in oil dynamics SaudiArabia witnessed negative growth owing to low oil output and sluggish performance ofnon-oil sector. Even Mexico suffered against the backdrop of uncertainty surrounding NAFTAand presidential elections. Meanwhile China witnessed its first annual acceleration since2010 with export growing at their quickest pace in four years.

India's GDP growth is expected to have moderated to 6.6% in FY2018. However this islikely to be transitory. Meanwhile Government reforms continue to provide support toaggregate demand.

Looking ahead as per IMF projections the world economy is poised to grow at 3.9% in2018 as well as 2019. However looming threat of trade wars against the background ofincrease in tariffs by the US and retaliation by China is one of the risks to globalgrowth. World trade is recovering smartly in 2017 registering a growth of around 10% and11% for exports and imports respectively but rising protectionism and trade war canthreaten trade and economic growth. In addition uncertainty surrounding elections in many

European countries including Russia Italy Hungary among others and escalation ofsanction issue in Iran are other key risks that could dampen the growth prospects.

Another major development having an impact on global economy is the oil price which hasrecovered to over US$ 80 per barrel recently. Looking ahead geo-political tensions inmiddle-east with probable sanctions on Russia may affect oil price dynamics.

INDIA'S ECONOMIC SCENARIO

India's economic growth is expected to gather momentum in FY2019 benefitting from aconducive domestic and global environment. The factors that will help in achieving 7.4%GDP growth in FY2019 compared to 6.7% in FY2018 are: (i) the troubles relating toimplementation of the GST have been sorted out (ii) credit off-take has improved and isbecoming increasingly broad-based (iii) large resource mobilisation from the primarymarket strengthening investment activity (iv) the process of recapitalisation of PSBs andresolution of distressed assets under the Insolvency and Bankruptcy Code may improve thebusiness and investment environment (v) global trade growth has accelerated which shouldencourage exports and reduce the drag from net exports and (vi) the thrust on rural andinfrastructure sectors in the Union Budget 2018-19 could rejuvenate rural demand and alsoencourage private investment.

Inflation both CPI and WPI remain under control for entire FY2018. Average CPI was3.6% in FY2018 compared to 4.5% in FY2017 while the corresponding figures for WPI are2.9% and 1.8% respectively. Assuming a normal monsoon and no major exogenous/policyshocks CPI is expected to remain in the range of 4.0-4.5% for FY2019 and even go below3.5% for some months in Q3 FY2019. Major risks to the inflation outlook are crude oil andother commodity prices and _scal slippage at both the central and state levels.

For the third consecutive year Indian Meteorological Department (IMD) has forecastedthat monsoon would be "Normal" or around 97% of Long Period Average (LPA) withan error of 5% and with a fair distribution of rainfall across major parts of countryin 2018.

As a result of normal rainfall during monsoon 2017 and various policy initiatives takenby the Government the country has witnessed record foodgrain production at 279.50 milliontonnes for FY2018 1.6% higher than the previous record achieved in FY2017 (275.1million tonnes). The production of rice pulses and coarse cereals touched newhighs during the year but wheat production declined.

Gross value added in the industrial sector at basic prices decelerated to 6.8% inFY2018 from 9.8% in FY2017. The slowdown in FY2018 was due to a sharp deceleration inmining and quarrying. In the mining sector contraction was on account of slowdown in itskey constituents such as coal and natural gas production and decline in crude oil output.The growth of manufacturing on the other hand improved with the waning of the transienteffects of GST.

On the external front the current account deficit (CAD) increased to 2% of GDP (US$13.5 billion) in Q3 FY2018 from 1.4% of GDP (US$ 8.0 billion) a year ago. For FY2018 webelieve CAD would be around 1.8% of GDP compared to 0.7% of GDP in FY2017. This slightincrease in CAD during FY2018 is due to US$ 156.8 billion trade balance which is at a5-year high.

BANKING ENVIRONMENT

FY2018 remained an eventful year for the banking fraternity. Asset quality resolutionof stressed assets and muted credit growth in H1 continued as major challenges for mostbanks during the current year. Higher NPAs impacted interest income adversely and led toelevated provisions thus putting pressure on the Profitability of banks. Further somePublic Sector Banks (PSBs) have been put under the Prompt Corrective Action (PCA)framework of RBI which puts restrictions on key areas viz. dividend payment branchexpansion etc.

After remaining depressed for nearly two years the bank credit built upon the uptickthat started around June 2017 and expanded in double digits from December 2017. Theresurgence in credit growth was observed across bank groups though the pace of growthcontinues to vary among bank groups. The YoY growth rate of bank credit for ASCBs was 10%as on 30th March 2018. Credit extended by private sector banks is higher thanPSBs while credit extended by foreign banks has returned to positive territory after along contraction. Credit to sectors is becoming broad-based with off-take by industryturning positive after a protracted period of contraction. Due to the continued stress inother sectors most of the banks made efforts to lend to retail sector which registeredreasonably good growth with most banks expanding their retail loan book. However withresolutions through National Companies Law Tribunal (NCLT) expected to gather momentum andglobal growth and private investment in India beginning to pick up green shoots of creditdemand have started appearing. On the other hand the aggregate deposits growth (YoY)continued to decline and is at 54-year low of 6.2% due to the base effect and currencywithdrawal by public.

During the last quarter of FY2018 the bond yields continued to _rm up which hitseverely the banks' balance sheet due to the mark-to-market losses incurred by the banksin their investments. In the post-demonetisation period banks have invested a huge amountof money in Government bonds due to tepid credit growth. In Q3 FY2018 quarterly resultsmost of the banks have reported a loss due to their higher provisioning against themark-to-market losses in investments in Government bonds. To ease the pressure RBIrecently has advised the banks to do the mark-to-market loss provisioning in the next fourquarters.

On a positive note in the year the Government took a significant step to capitalisePSBs in a front-loaded manner with a view to support credit growth and job creation. Thisentails the mobilisation of capital to the tune of about Rs. 2.11 lakh crore over twoyears through budgetary provisions of Rs. 18139 crore recapitalisation bonds to thetune of

Rs. 1.35 lakh crore and the balance through raising of capital by banks from themarket while diluting non-Government equity (estimated potential Rs. 58000 crore). Theother possibility is to raise funds through rights issue to maintain parity of holdings.Going by the MoF (Ministry of Finance) estimates the Rs. 1.35 lakh crore package seemslargely adequate. In FY2018 Government has notified Rs. 80000 crore recapitalisationbonds to capitalise 20

PSBs for meeting their regulatory capital requirement and growth needs.

State Bank of India has merged its five associate banks and Bharatiya Mahila Bank Ltd.with itself from 1st April 2017. This is the first such large scaleconsolidation in the Indian Banking industry. With this merger your Bank is ranked at the54 position among the top 1000 global banks as per the global ranking by "TheBanker" in July 2017. This merger helped your Bank to reduce 1805 branches andrationalised 244 administrative offices which saves around

Rs. 1099 crore per annum. We believe that the long-term benefits of the merger willsignificantly outweigh the near term challenges and the efficiencies generated through themerger will help the Bank to sustain the mission of being an enduring value creator.

Meanwhile under the Pradhan Mantri Jan Dhan Yojna (PMJDY) banks have opened 31.4crore accounts with Rs. 79012 crore deposits (around 6% of the total demand deposits ofthe ASCBs) till 4th April 2018 deposited in their accounts. Out of the 31.4crore accounts PSBs have opened 25.4 crore accounts RRBs have opened 5.1 crore accountswhereas private sector banks (PrSBs) have opened only 0.9 crore accounts. This indicatesthat PSBs have accepted the responsibility and have ful_lled their promises in a recordtime. On a positive note zero balance accounts under PMJDY have been continuouslydeclining from 76.8% in September 2014 to around 20% now. PMJDY has also helped theimplementation of the Mudra Yojana with Rs. 5.28 lakh crore distributed to 11.96 crorebeneficiaries in the last 3-years. In an in-house study within your Bank we have foundthat there is a traction across Jan Dhan and Mudra accounts.

In regards to competition while the new breed of Payment and Small Finance Bankswhich have started functioning are still in the process of _ne tuning theirbusiness models the Fintech companies with disruptive technologies and havingcapabilities to address specific pain-points of financial customers such asremittance credit and savings have emerged as a challenge to the banking system.

OUTLOOK

The coming years will be very challenging for the banking system as a whole. Theoperating environment has become increasingly complex. Although resolution of stressedassets has progressed satisfactorily the final outcome will take some more time to re_ectin the P&L. This delay is mainly because new laws take some time to mature inpractice. However the structural transformation of banks must move beyond the NPAresolution and address other pressing issues such as frauds customer retention andservicing human resource cyber security and governance.

The policy initiatives over the last four years have gathered momentum with farreaching structural transformation in all sectors. GST is moving to the next phase withthe introduction of e-ways module. Infrastructure growth has notably picked in roadscivil aviation and railways. Digitalisation will gather pace as evident from the Report ofthe Taskforce on Artificial Intelligence. It is unlikely that banks will escape thesetransformations. Digitalisation of banking process will continue during the next yearcreating new improved service experience. With capital infusion it is now up to the banksto grab the opportunity and deploy technology in addressing some of the pressing issuesmentioned above.

The external environment nevertheless has become uncertain despite a positive outlookon growth. Trade wars which are a sign of renegotiation of the old order have becomemore acute. The situation will continue in the same direction in 2018. Thus across theworld banks have revisited their foreign business strategy in line with growing risks.Such cautions prevails among Indian banks as well. The Government of India has advisedbanks to rationalise their foreign branches. However this does not constitute a blanketwithdrawal but a more realistic strategy in line with changing trade patterns of thecountry. This rationalisation in foreign business will therefore continue.

The coming year will be the last year after which general elections are due. Howeverwe do not expect that policy direction will markedly turn populist. The _scal and monetaryconditions will continue to remain stable even if there are momentary aberrations. But thechallenge will lie in taking a decision amid growing uncertainty. Overall the NPAresolution is in sight and the time is opportune for tough and strategic decision making.

II. FINANCIAL PERFORMANCE

ACQUISITION OF ERSTWHILE DOMESTIC BANKING SUBSIDIARIES (E-DBS) & BHARATIYA MAHILABANK LIMITED:

Your Bank has acquired five domestic banking subsidiaries (DBS) of SBI; namely (i)State Bank of Bikaner & Jaipur (SBBJ) (ii) State Bank of Mysore (SBM) (iii) StateBank of Travancore (SBT) (iv) State Bank of Patiala (SBP) (v) State Bank of Hyderabad(SBH); and Bharatiya Mahila Bank Limited (BMBL) with effect from 01st April2017. The merger of DBS & BMBL with SBI has been accounted under the ‘pooling ofinterest' method as per Accounting Standard 14 (AS 14) "Accounting foramalgamation" and the approved Scheme of Acquisition. Pursuant thereto all assetsand liabilities of the transferor Banks have been recorded in the books of SBI at theirexisting carrying amounts as on effective date. The net difference between share capitalof transferor banks of e-DBS & BMBL and corresponding investments by SBI and cash inlieu of fractional entitlement of shares have been transferred to Capital Reserve.

The total assets taken over are as under:
( Rs. in crore)
Particulars Total
Cash & balances with RBI 32743.73
Balances with Banks & Money at Call & Short Notice 66680.19
Investments 176603.55
Advances 297884.25
Fixed Assets 6987.51
Other Assets 38012.45
Total Assets 618911.68

Since the figures of the current period include the results of the branches of theseBanks the figures of the previous period are strictly not comparable.

ASSETS AND LIABILITIES

The total assets of your Bank have increased by 27.67% from Rs. 2705966.30 crore atthe end of March 2017 to Rs. 3454752.00 crore as at the end of March 2018. During theperiod the loan portfolio increased by 23.16% from Rs. 1571078.38 crore to Rs.1934880.19 crore. Investments increased by 38.51% from Rs. 765989.63 crore to Rs.1060986.71 crore as at the end of March 2018. A major portion of the investment was inthe domestic market in government securities.

Your Bank's aggregate liabilities (excluding capital and reserves) rose by 28.52% fromRs. 2517680.24 crore as on 31st March 2017 to Rs. 3235623.44 crore as on31st March 2018. The deposits rose by 32.36% and stood at Rs. 2706343.28crore as on 31st March 2018 against Rs. 2044751.39 crore as on 31stMarch 2017. The borrowings also increased by 13.99% from Rs. 317693.66 crore at the endof March 2017 to Rs. 362142.07 crore as at the end of March 2018.

NET INTEREST INCOME

Net interest income increased by 21.01% from Rs. 61859.74 crore in FY2017 to Rs.74853.71 crore in FY2018. Total interest income has increased from Rs. 175518.24 crorein FY2017 to Rs. 220499.31 crore in FY2018 registering a growth of 25.63%. Totalinterest expenses have increased from Rs. 113658.50 crore in FY2017 to Rs. 145645.60crore in FY2018. Interest expenses on deposits during FY2018 recorded an increase of28.53% compared to the previous year.

NON INTEREST INCOME AND EXPENSES

Non-interest income increased by 25.77% to Rs. 44600.69 crore in FY2018 as againstRs. 35460.93 crore in FY2017. During the year your Bank received an income of Rs. 448.52crore ( Rs. 688.35 crore in FY2017) by way of dividends from subsidiaries and jointventures in India and abroad and Rs. 13423.35 crore ( Rs. 10749.62 crore in FY2017) byway of Profit on sale of investments an increase of 24.87%. Cost to Income ratio is50.18% in FY2018 as compared to 49.54% in FY2017.

OPERATING PROFIT

Your Bank registered a growth of 17.04% in Operating Profit in the current financialyear. The Operating Profit of your Bank for FY2018 was at Rs. 59510.95 crore as comparedto Rs. 50847.90 crore in FY2017. Your Bank posted a Net Loss of Rs. 6547.45 crore forFY2018 as compared to Profit of Rs. 10484.10 crore in FY2017 due to higher provisioningrequirements on NPAs MTM losses in HFT and AFS portfolio additional employee benefitsprovisions etc.

PROVISIONS & CONTINGENCIES

Major provisions made in FY2018 were as under:

Rs. 70680.24 crore for non-performing assets (as against Rs. 32246.69 crore inFY2017) write back of Rs. 3603.66 crore towards Standard Assets (as against provision ofRs. 2499.64 crore in FY2017) Rs. 8087.57 crore towards Investments Depreciation (asagainst Rs. 298.39 crore in FY2017).

RESERVE & SURPLUS

Since the Bank has incurred loss in FY2018 no amount (as against Rs. 3145.23crore in FY2017) has been transferred to Statutory Reserves. An amount of Rs. 3288.88crore (as against Rs. 1493.39 crore in FY2017) has been transferred to Capital Reserves.An amount of Rs. 1165.14 crore (as against Rs. 143.69 crore in FY2017) has beentransferred from Investment reserve to Revenue and other Reserves and Rs. 192.32 crorefrom Revaluation Reserve to General Reserve.

REVALUATION OF FIXED ASSETS

Your bank has reversed the effect of revaluation amounting to Rs. 11210.94 crore madein earlier periods in the value of certain leasehold properties which has resulted inwrite back of depreciation charged in previous year amounting to Rs. 193.24 crore.Consequential effect on capital adequacy ratio arising from the above has been made in theresults for the year ended March 2018.

PROGRESS ON IMPLEMENTATION OF IND AS

RBI in its press release dated 5th April 2018 has deferred implementationof Ind AS by one year till 1st April 2019. Earlier RBI had issued aroad map for implementation of Ind AS for Banks in India for accounting periods beginningfrom 1st April 2018. A Steering Committee headed by Managing Director (RiskIT & Subsidiaries) is monitoring the progress in implementation of Ind AS in the Bankto ensure a smooth transition to Ind AS as per the time schedule.

III. CORE OPERATIONS

1. RETAIL & DIGITAL BANKING GROUP

The Retail & Digital Banking Group is the largest business vertical of your Bankanchoring 96% of total Domestic Deposits and 57.53% of total Domestic Advances as of 31stMarch 2018. The Group comprises seven strategic business units and is the largest interms of its branch network and human resources.

Retail Banking is playing an increasing role in customer acquisition and CASA growth.Your Bank continues to see a strong momentum in the addition of retail deposit customersand consequently a steady growth in the retail deposits base. Simultaneously to meet theaspirations of this growing customer base retail assets are being strategicallypositioned with a view to occupying a much larger proportion of total advances. Within theretail portfolio Home and Auto loans are the major contributors. Your Bank is also thelargest dispenser of education loans which demonstrates its un_inching commitment toserve the society at large.

A steady stream of technology driven innovations necessitated by changing customerpreferences are transforming the retail banking landscape. Your Bank has a multi-channeldelivery model which allows it to offer its customers a choice to carry out transactionsthrough any channel at any time and at any place. In FY2018 your Bank increasedits offerings across various channels – digital mobile internet social media inaddition to branches ATMs and Customer Service Points.

With collective efforts across functions especially operational level your Bank hasstreamlined a number of key issues surrounding the Bank. Amidst heightened concern onfuture regulatory requirements cost of funds fast changing consumer preferencesintensifying competition and Profitability pressure your Bank has made a road map towardsProfitability-oriented performance management. As a way forward to achieve this your Bankhas introduced Return on Risk Weighted Assets (RoRWA) budgeting including bench markingefficiency parameters.

With a view to increase the Profitability and Return on Assets (ROA) curtailment ofoverheads has always been the prime focus of your Bank. With this objective of containingcosts especially in the post-merger scenario your Bank has conducted various audits likeSpace Audit Energy Audit Telephone Audit and Internet Audit to name a few in erstwhileAssociate Bank (e-ABs') branches.

Your Bank accords highest priority towards creating an environment of increased riskawareness at all levels. It also aims at constantly safeguarding the appropriate securitymeasures including cyber security measures to ensure avoidance or mitigation of variousrisks. Your Bank is equipped with a Disaster Recovery/Business Continuity Plan (BCP)across all branches and offices to render uninterrupted services in the event of anypossible business disruption.

A. PERSONAL BANKING

The significant transformation of the banking industry in India is clearly evident fromthe changes that have occurred in the financial market. Disruptive innovations in thetechnological and digital banking products has opened up new vistas for banks to augmentrevenues and enhance customer delight. This has entailed greater competition andconsequently greater risks. Cross-border _ows and entry of new products have significantlyimpacted the domestic banking sector. This is paving the way for innovative product mixand also necessitates rapid changes in the process and operations to remain competitive.These developments have facilitated greater choice for consumers and subsequentlyrequires adoption of a strong and transparent prudential regulatory supervisorytechnological and institutional framework in the financial sector at parwith international best practices.

Your Bank offers a wide range of services in the Personal Banking Segment as mentionedbelow:

1. Home Loans

Your Bank has the largest Home Loan portfolio in the country with a market share of32.13% as on 31st March 2018 amongst All Scheduled Commercial Banks (ASCBs).Home Loan portfolio constituted 18% of the Whole Bank Advances as on 31st March2018.

Total Home Loan and Home Loan Related portfolio as on 31st March 2018 stoodat Rs. 341081 crore.

During the current financial year there were internal challenges with the merger offive Associate Banks and Bharatiya Mahila Bank Ltd. with your Bank. Further slowdown inproject launches due to the teething problems in implementation of RERA impactedbusiness during the first half of the year. Your Bank undertook initiatives to streamlinethe operations post merger and the growth revived back in second half of the year despiteslow down in the Home Loan market. Various initiatives were taken up during the year toprovide superior experience to a home buyer and maintain its position of the mostpreferred Home Loan provider. Some of the key initiatives undertaken during the year areas under:

To meet the customer expectations of better and faster delivery your Bank undertook:

Home Loan Customer Connect Programme through which the Bank reached out toover 1 lakh Home Loan Customers across the country to thank them for their continuedpatronage and to offer after-sales services.

Assured Turn-Around-Time Drive resulted in reduction of average turn aroundtime (TAT) of Home Loan Sanction to 9 days for the month of March 2018. This TAT iscomparable to the best in the industry.

Increased number of feet-on-street to provide door step service at more than25 centres.

The rise in internet penetration and faster adoption of internet has necessitated easyaccess to information at the touch of customers' _ngertips. To ful_l these needs yourBank launched two websites this financial year:

SBI Home Loans website (https://homeloans.sbi): It is an exclusivewebsite for Home Loans which apprise customers with instant information regarding Bank'shome loan products. It also provides customers with pre and post sales services includingApplication for Disbursement Statement of Accounts Next Instalment Due Date and InterestRate History among others.

SBI Realty Website (www.sbirealty. in): This website showcases your Bank'sapproved projects across India to prospective home buyers. It helps to bring togetherdevelopers and buyers on a single platform giving buyers the access to the deals on SBIapproved projects. Affordable Housing is a thrust area of the Government to bridge thehuge demand-supply gap of houses in India. Your Bank has been working in tandem to ful_lthe mission of "Housing for All" by 2022 by facilitating affordable housing tohome buyers. Few initiatives in this regard are as follows:

The launch of "SBI Grih Nirman Affordable Housing Project FinanceScheme" with attractive features to tap the emerging potential for financingaffordable Housing Projects and is especially geared towards first-time home buyers.

Partnered with CREDAI in an event where 375 affordable housing projects werelaunched by builders across India.

Sanctioned 37007 home loans under PMAY scheme aggregating to Rs. 7997crore during the financial year.

Your Bank is helping upgrade the living standards of its customers by providing autoloans and making owning a car affordable. These auto loan products of your Bank areavailable in many variants to suit the requirements of various customer segments -salaried businessmen self-employed professionals senior citizens NRIs agriculturistsand existing borrowers among others. Multi-channel sourcing of proposals and faster TAThas made the auto loan products highly popular. This has helped your Bank to increase itspenetration in financing cars sold by various manufacturers such as Maruti Hyundai TATAMotors to name a few. The market share of your Bank in Car Loans has also gone up from33.77% as on 31st March 2017 to 34.97% as on 31st March2018.

3. Education Loans

Education is the key growth driver for any economy as it helps create skilled andproductive human resources who contribute to the development of the nation. Your Banktakes pride in being the largest Education Loan provider in the country. It has helped56042 meritorious students during the financial year to realise their dreams by providingfinancial assistance to the tune of Rs. 4949 crore (out of which 35% of the loans havebeen extended to girl students). In order to broaden the scope of Education Loans to bookquality business and enhance customer satisfaction as under your Bank has taken varioussteps:

Provided Education Loans to students of 147 top-rated premier and reputedinstitutions identified by the Bank at relaxed norms and concessional interest rates.

Door-step services are extended for sourcing high-value education loanapplications at select centres.

All courses and institutes approved by the Director General of CivilAviation (DGCA)/ Director General of Shipping (DGS) in the list of eligible coursescovered under Education Loans have been included for financing by the Bank.

Bank's Loan Origination System has been integrated with Vidya Lakshmi Portal(VLP) of Government of India to ensure better tracking of the loan applications and fastersanctioning of loans.

4. Personal Loans

Personal Loan is one of the most popular products of your Bank and is amongst theleaders in this segment. Your Bank has been aggressively catering to the needs of salariedclass (both government and private) pensioners and other customers. During FY2018 yourBank has provided Personal Loans to 14 lakh customers amounting to Rs. 50971crore. The Bank's delinquency under this segment is one of the lowest in the industry.This has been possible because of your Bank's utmost caution in selection of borrowers andcareful due diligence.

Your Bank has adopted various technological innovations mentioned as under to servethe digital-savvy customers:

Top-up Insta Credit loan to existing Xpress credit Personal Loan borrowersthrough internet banking in an end to end digitised mode.

Pre-approved instant Personal Loans to the existing SB account holders ofthe Bank through its YONO app.

Overdraft (OD) facility for select customers for purchases done throughonline shopping websites like Flipkart.

Tatkal e-Personal Loans to cater to the needs of unserved and under-servednon-salaried customers based on selected parameters.

Personal loan against security of Sovereign Gold Bonds of Government ofIndia on a pilot basis.

Personal loans to non-customers by evaluating credit history of theapplicants and Credit Information Reports (CIR) of various CICs.

5. NRI Business

As on 31st March 2018 your Bank has a 33.34 lakh strong NRI customer basewho are being catered to by 150 NRI intensive branches and 95 dedicated branches acrossIndia. With an aim of providing all the NRI related service at a single point your Bankhas set up a centralised back office. This major process innovation undertaken in NRIservices will handle the entire gamut of non-financial services including customer supportand query management. Your Bank has introduced a mobile app-based remittance facility tothe Indian diaspora residing in USA to remit the funds to India with a cap of US$ 10000.SBI Intelligent Assistant (SIA) also known as Smart Chat Assistant evolved from thecutting-edge technology which efficiently answers queries is also extended to NRIs.

6. Corporate and

Institutional Tie-ups for Salary Package

A dedicated Sales Architecture has been created in your Bank to facilitate opening ofsalary accounts of Corporate Employee Armed forces and other Central/ State GovernmentEmployees. A dedicated marketing force named Key Accounts Manager (KAM) providespersonalised service along with a bouquet of products under Corporate Salary Package (CSP)at the door step of the salaried customers. ThetotalSalaryaccountcustomerbasehas reached124.07 lakh accounts registering a growth of 38% over FY2017. Under CSP your Bank offersComplimentary Accident (Death) Insurance cover up to Rs. 20 lakh. During the year Bankhas settled 763 insurance claims amounting to

Rs. 37.77 crore.

7. Wealth Management Business - SBI EXCLUSiF

Your Bank's Wealth Management Services are now made available at 13 centres with 76dedicated Wealth Hubs and 3 e-Wealth centres. An addition of 5 new centres and 55 newwealth hubs were made during the financial year. The Wealth Hubs are managed by adedicated group of Relationship Managers and Investment Counsellors having in-depthknowledge on markets and products along with senior internal staff in operational roles.

An open platform for investment with a state-of-the-art technology and right sellingapproach based on Risk Pro_ling provides the best possible experience to your Bankcustomers through the EXCLUSiF journey.

The e-Wealth Centres are equipped with on-Video and on-Phone transaction executionfacilities with extended Banking Hours. Your Bank's endeavour is to provide a best inclass holistic experience to Customers.

Your Bank also launched Wealth Management Services for Non-Resident Indians. Clientsresiding in U.A.E. Bahrain Qatar Kuwait and Sultanate of Oman are eligible to onboardas wealth customers. They can access services through e-Wealth Centres or through WealthHub during their visit to India.

Your Bank also conducted Signature ‘Annual Investment Conclaves' addressed by theexperts from Financial Industry and Markets on the prevalent market conditions andinvestment opportunities. These Conclaves were well attended by a large number of existingand prospective EXCLUSiF customers.

Your Bank's Wealth Management Business has shown an exponential growth in terms ofclient acquisition and Net New Money generation during FY2018. The number of wealthclients grew 528% during the year to reach 24168 clients as on 31st March2018. The Net New Money grew by 566% to Rs. 1998 crore and AUM increased by 390% to Rs.14284 crore.

Your Bank aspires to play a leading role in building the momentum for investments byembracing the changes happening in the economy and enhancing wealth creation for esteemedcustomers.

B. ANYTIME CHANNELS

As on ATMs Kiosks (MFK + SSK) Cash Deposit Machines(CDMs) Recyclers Total (SBI)
31st March 2015 42454 2595 1849 46898
31st March 2016 42733 1231 5760 49724
31st March 2017 42222 986 6980 50188
31st March 2018* 51616 # 7925 59541

1. ATMs/ Recyclers

Your Bank has one of the largest ATM networks in the world with 59541 ATMs includingCash Deposit Machines and Recyclers as on 31st March 2018. During FY2018 yourBank replaced 6793 old ATMs and installed 3883 new ATMs with improved features andequipped with the latest technology. Your Bank has so far installed 7925 Recyclers andCash Deposit Machines (CDM) to provide 24x7 cash deposit and withdrawal facilities. YourBank has procured new software which will enrich the Customers' experience while using theATM machines. This new software will have Hi-resolution graphics screens for better userinteractions; one-to-one specific advice to customers of banking products; real timeintegration with other digital channels; and a host of other new features.

Nearly 80% of the financial transactions of your Bank are routed through AlternateChannels. Your Bank has a 28.76% of market share (as per RBI Data) in ATM network inIndia. SBI ATM network transacts 47.21% of the country's total ATM transactions. On anaverage over 1 crore transactions per day are routed through our ATM network.

Over 2000 e-Corners (including 250 hi-tech SBI Intouch branches) have been set upacross the country where customers can avail entire gamut of services. To ensure andprotect customers' interest coverage under electronic surveillance is being enhanced.

2. Swayam: Barcode based Passbook Printing Kiosks

Your Bank rolled out more than 14000 SWAYAMs (Barcode based Passbook Printing Kiosks)at its branches and e-lobbies/Intouch. Using these kiosks customers can print theirpassbooks on their own using barcode technology. On a monthly basis more than 3.2 croretransactions are recorded at these kiosks.

3. Green Channel Counter (GCC)

GCC is a POS terminal installed at counters in retail branches. Transaction through GCCis done by swiping ATM/ Debit card followed by PIN validation. The services extendedthrough GCC are cash withdrawal cash deposit funds transfer within SBI. GCC pertransaction limit is up to Rs. 40000 and daily withdrawal limit is a part of ATMwithdrawal limit (card variant wise). On an average 9.35 lakh transactions are beingrouted through GCC per day.

4. Green Remit Card (GRC)

SBI Green Remit Card is a deposit card through which an individual can remit money in aspecified account of SBI. This is especially useful for the migrant depositors. Money canbe deposited using GRC through GCC CDMs and Recyclers. The per transaction limit is of

Rs. 25000 with a monthly cap of Rs. 1 lakh per remitter. On a daily average over 1.50lakh transactions are being routed through GRC.

5. Banking on Mobile

State Bank Anywhere Personal: Your Bank's Mobile Banking App for Retail customersoffers a wide range of features apart from the general banking. The features includeIntra/Inter Bank funds transfer (NEFT/RTGS/IMPS/UPI) opening of _xed deposits/e-MODAccounts add and manage beneficiaries among others. Additional value added services suchas Aadhaar Linking Voice Assisted Banking myFitness e-statement subscription/ downloadStop/ Revoke cheque instructions and facility to submit Form 15G/ 15H online for TDSexemption are also available.

State Bank Anywhere Saral: Your Bank's Mobile Banking App for proprietorship _rmsallows businesses to transfer funds across Banks open and operate _xed deposit accountsmake payment to EPFO view account statements schedule transactions and recharge/billpayment among others.

State Bank Anywhere Corporate: Your Bank's Mobile Banking App for Large Corporate_rms with multiple users allows business houses to operate accounts transfer fundsthrough NEFT/RTGS make bill payments/supplier payments authorise e-cheques /e-STDR openand operate _xed deposit accounts among others.

The Mobile Banking channel now has over 305 lakh registered users and has processedtransactions amounting to Rs. 600000 crore in FY2018. Your Bank has also retained itsprime numero-uno position among Banks both in terms of volume of transactions (21.20%)and value of transactions (19.81%) as per the latest RBI Market Share Report.

6. SBI Pay (BHIM)

Your Bank's Unified Payments Interface based-app provides any registered/onboardeduser/merchant the convenience of transferring funds across different Bank accounts throughmultiple modes (Virtual Payment Address Bank Account Number IFSC and scanning QR Code)making it a truly inter-operable offering. 184 lakh users have registered on the SBI UPIsystem and transactions amounting to Rs. 68000 crore have been successfully processedthrough the SBI UPI channel.

Large multinational corporations have leaped on to the digital payments bandwagon tohelp India become a less cash economy. Your Bank has leveraged on this opportunity toprovide the latest digital payment offerings through various collaboration. Your Bank hasalso partnered with Google India to offer PSP services to their UPI App – Google Tezunder the UPI Multi-Bank Integration Model. Over 13 lakh Tez users have linked their Bankaccounts with their @ OKSBI handle offered by SBI to transact on the App. In additiondebit card based payment services P2P lending services

7. SBI Buddy

Your Bank's Mobile Wallet allows users to send and receive money. In addition userscan also shop; book rail movie or _ight tickets; use virtual debit card – Buddy Cardto make payments; withdraw cash at SBI ATMs using the wallet and a lot more. Users can nowcomplete the full KYC check to enjoy enhanced limits on the wallet as well. Buddy has seenremarkable growth and has reached a user base of 129 lakh as on 31st March2018. The wallet has facilitated over 496 lakh transactions to the tune of Rs. 1505.79crore as on 31st March 2018.

Emergence of Fintech companies has made data the prime point for selectively andeffectively targeting customers. Increasingly digital products from banks are beingpromoted through social networking sites and online advertising. Your Bank has establisheddigital solutions that offer one of the best all-round omni-channel experience for itscustomers.

8. YONO

On 24th November 2017 State Bank of India launched India's firstcomprehensive are also being planned among others. Users now have the convenience ofmaking bill payments booking _ight tickets recharging and ordering food through BHIM SBIPay.

Your Bank has also brought digital payments to the masses to enable UPI payments forover 37 lakh members of Self Help Groups under the Shri Kshetra Dharmasthala RuralDevelopment Programme (SKDRDP) in the state of Karnataka. This was launched in thepresence of Hon'ble Prime Minister of India on 29th October 2017. digitalservice platform "YONO" an acronym for ‘You Only Need One'. An integratedomni-channel digital platform YONO offers banking and other financial products along withaccess to India's largest B2C marketplace for its customers to meet their lifestyle needsacross 16 categories including Fashion & Lifestyle Electronics Education Home

& Furnishing Travel & Hospitality Cab Booking & Car RentalsEntertainment Food & Dining Health & Personal Care and others. Your Bank haspartnered with 70+ top e-commerce players to provide customised offers and discounts toits customers. With YONO customers can:

Open an SBI bank account digitally in 4 minutes

Avail Pre-approved personal loan sans any paperwork in 4 clicks

Get overdraft facility against _xed deposit instantly online

Get one view of the banking and financial portfolio of SBI Group companies

Benefit from intelligent spend analyser

Utilise Chatbot ‘SIA'

Create dreams to target and fund the dreams

Access B2C Marketplace

Open a new demat/trading account

Link trading/demat account

Apply for credit cards online

Link credit cards and pay credit card bills seamlessly

Avail insurance products online.

Performance highlights of YONO as on 31st March 2018

4.37 Million Application Downloads

1.36 Lakh Digital and Insta Savings Accounts opened

6.52 Lakh Funds Transfers executed

17000+ Fixed Deposits opened

71000+ Bill payments done

77000+ SBI Credit Cards linked; 41000 Card payments of Rs. 43 crore done;33000 new Card leads generated

41000+ SBI Cap Sec portfolios linked; 9000 new demat account leadsgenerated

11000+ SBI Life policies linked

2400+ Pre-approved Personal Loans of Rs. 12 crore disbursed

9. Customer Experience Excellence Project (CEEP)

The Customer Experience Excellence Project CEEP has been rolled out at 5364 branchesacross the country which are equipped with Self Service machines as ATM CDM/ RecyclerSWAYAM for Passbook Printing Electronic Cheque Drop Box and Internet enabled PCs. Anintegrated Queue Management system (QMS) is in place at these branches to ensure that thecustomers are serviced promptly without having to wait in queues at the counters. There isa provision of separate token for Senior Citizens/ Disabled persons in QMS to give thempreferential service. A Customer Feedback Tab is provided at these branches to enable thecustomers to give their feedback on the services of the branch. Real time monitoring andBranch choreography are undertaken at these branches to give the customers an excellentservice experience.

Your Bank's Mobile App "State Bank No Queue" enables customers toself-generate e-tokens for availing Banking services at CEEP Branches. This App isavailable on both Android and iOS phones and it helps in reducing waiting time forcustomers at the branch. It also reduces crowding at a branch as the token is generatedbefore the customer reaches the branch. This helps customers to skip the queue and availbanking services faster. As on 31st March 2018 the App has registered morethan 2366000 (2.37 million) downloads. The usage of the App is increasing on dailybasis. The HNI customers are tagged as Priority Customers at these branches.

Your Bank has also undertaken Customer Service Feedback Survey at select CEEP branchesto assess the impact of the CEEP initiative on the quality of customer service. Thefeedback thus received is being used to improve the customer service and facilitiesavailable for the customers.

10. Digital Banking

Your Bank has always been a pioneer in innovating new concepts in Banking Sector. Onesuch step was setting up the high-tech one of its kind sbiINTOUCH branches which hasbrought in a new paradigm in banking. At present your Bank has 262 sbiINTOUCH branchesequipped with state-of-the-art digital technology. These sbiINTOUCH branches cover morethan 148 districts across the country.

At the sbiINTOUCH branches your Bank provides banking services such as the opening ofaccounts and the printing of personalised Debit Cards in 15 minutes. This has been madepossible by revolutionary Touch Technology. Your Bank's strategy is to create a‘Phygital' marketplace within these futuristic branches to offer customers 1)Banking through self- service kiosks and 2) Services of other SBI subsidiaries suchas Life Insurance General Insurance Mutual Funds Credit Cards and online tradingthrough SBI Cap Securities. Financial counselling through hi-de_nition Audio Videoconferencing service is provided at select sbiINTOUCH branches where customers caninteract with financial experts.

In August 2017 your Bank has also launched the facility of instant issuance ofpersonalised Photo Debit Card – ‘Quick Photo Debit Card' within five minutes toSaving Bank (SB) account holder of any branch of SBI. Under the facility an individual SBaccount holder who has an account with SBI and has lost or damaged his debit card canvisit any sbiINTOUCH Branch with his Aadhar Card and obtain Instant Photo DebitCard bearing his photograph through Debit Card Printing Kiosk.

11. Cross Selling

Your Bank is the Corporate Agent of SBI Life Insurance Co. Ltd & SBI GeneralInsurance Co. Ltd. and has Distribution Agreement with SBI Mutual Fund SBI Cards &Payment Services Pvt. Ltd & SBI Cap Securities Limited for distributing theirproducts. Your Bank also distributes mutual fund products of UTI Mutual Fund Tata MutualFund Franklin Templeton Mutual Fund L&T Mutual Fund ICICI Mutual Fund and HDFCMutual Fund. In addition all branches are authorised for opening pension accounts underNational Pension System.

Performance Highlights (Income)

( Rs. in crore)
JVs YTD ACTUALS YTD % YoY change
March 2017 March 2018
SBI LIFE 575.97 714.75 24.10
MF 185.24 560.51 202.59
SBI GENERAL 125.97 212.57 68.74
SBI CARDS 25.13 135.83 440.51
SSL 2.43 5.14 111.52
NPS - 2.44 -
TOTAL 914.74* 1631.24 78.33

*YTD Mar'17 figure inclusive of e ABs data - 776.61 (SBI) + 138.13 (eABs)

The key highlights for FY2018 are mentioned below:

SBI Mutual Fund became 2nd largest amongst Bank distributors in the Industrywith an AUM of more than Rs. 54000 crore. Your Bank has become India's number one Bankdistributor in SIP with 14.6 lakh live SIPs. Net sales increased from Rs. 11464 crore inMarch 2017 to Rs. 24374 crore YTD March 2018 reporting an increase of 113%.

Cards issued through Banca Channel crossed 10 lakh and sourcing hasincreased from an average of 35% upto September 2017 to 53% in March 2018.

Your Bank received SKOCH Award

– Platinum for its National Pension System Application and was ranked No. 1 inPoint of Presence (POP) under various log in day campaigns observed by PFRDA.

Under SBI Life CIF grew to 46180 in YTD March 2018 as against 24470 inYTD March 2017 reporting an increase of 89%. The Home Loan Insurance penetrationincreased from 45% to 58%.

Under SBI General SP number has increased to 20646 in YTD March 2018 asagainst 14348 in YTD March 2017 reported a growth of 44%. The number of HealthInsurance policies issued increased by 11% to 7.82 lakh and premium increased by 16% toRs. 179.45 crore over March 2017. In FY2018 net Profit earned by SBI General InsuranceCo. stood at Rs. 380 crore out of which Rs. 170 crore seeding commission was earned fromLong Term Home (LTH) reinsurance.

12. Internet Banking and e-Commerce

YourBank'sInternetBankingServicebrings on board a seamless online experience hostingdiverse Banking offerings. Opening and operation of Fixed Deposits/ PPF accountsIntra/Inter Bank transfer of funds through NEFT/RTGS submission of Form 15G/15HNomination updation facility foreign international remittances are among the manyfunctionalities being offered. Some of the services/features launched during the yearthat have made Bank's digital platform more robust and customer-friendly are access toCIBIL score Aadhaar linking with CIF purchase of Sovereign Gold Bonds SMS alerts inHindi GSTN integration submission of 15G/H Form through RINB portal submission ofFinancial Follow up Report

C. SMALL AND MEDIUM ENTERPRISES

Your Bank is pioneer and market leader in SME financing. With over one millioncustomers the SME portfolio of

Rs. 269875 crore as on 31st March 2018 accounts for nearly 13.17% of theBank's total advances.

Considering the important role being played by SMEs in the Indian economy in terms oftheir contribution to manufacturing output exports and employment generation your Bankhas always held SME as an important segment.

Your Bank is committed to providing Simple and Innovative Financial Solutions. YourBank's approach in driving SME growth rests on the following three pillars:

a) Customer Convenience b) Risk Mitigation c) Technology based digital offerings.

1) Customer Convenience

With a view to building and sustaining the momentum for Transforming India your Bankhas created largest number of touch points in terms of number of branches and other modesreaching out to public at large which includes RMSEs (866) RMMEs (775) CSOs (900)SMECs (89) RASMECs (81) and SME Intensive Branches (1248).

With a view to enhancing Ease of Doing Business to the Small and Micro Enterprisesyour Bank modified its existing delivery model for Small & Medium Enterprises Center(SMEC) and created Asset Management Teams (AMT) for providing end to end relationship withthe customers for small value loans up to Rs. 50 lakh. The SMECs have also beenstrengthened in terms of manpower which has resulted in improvement in service.

Webbasedloanapplicationandtracking system: Your Bank is hosting an online loanapplication and tracking facility for MSME borrowers on the Corporate Website www.sbi.co.in.It is an Intranet-based Credit Proposal Tracking System called Lead Management system(LMS) which allows customers to apply online loan request and receive an acknowledgementin the form of application reference number. The data of customers is then automaticallyforwarded (through concerned network in Circles) to relationship points for convertingthese leads into business.

Participation in Business Conclaves/ Summits: Your Bank has been activelyparticipating in Business Conclaves and Summits to reach out to entrepreneurs andunderstand and meet their requirements.

2) Risk Mitigation

Your Bank has been increasingly shifting focus towards Risk Mitigated Products whichincludes Supply Chain finance Asset Backed Loans Overdraft against Bank Deposits/Govt.Securities Bills Discounting facility and CGTMSE covered loans among others.

Supply Chain Finance: Leveraging the state-of-the-art technology and branchnetwork your Bank is further strengthening its relationship with the Corporate World andhas emerged as a major player in Supply Chain Finance.

During the _scal your Bank entered into 49 new e-DFS (Electronic Dealer FinanceScheme) and 8 new e-VFS (Electronic Vendor Finance Scheme) tie-ups covering 292 IndustrialMajors and 22406 of their dealers and 12512 vendors. The number of oil dealers (PetrolPumps) on e-DFS crossed 13000 during the last _scal. There has been 19% YoY growth in e-DFSportfolio.

Pradhan Mantri Mudra Yojana: In line with the initiatives of the Government ofIndia your Bank has laid considerable emphasis on extending credit facilities to eligibleunits under different variants of Pradhan Mantri Mudra Yojana and has disbursed

Rs. 28556 crore for FY2018 under PMMY against a target of Rs. 28300 crore.

Credit Flow to Micro and Small Enterprises under CGTMSE: Your Bank has been apioneer in supporting MSMEs and for Micro and Small business. Your Bank is extendingcollateral free lending up to Rs. 2 crore under guarantee of CGTMSE. SBI has a portfolioof Rs. 12549 crore under CGTMSE as on 31st March 2018.

SME ASSIST: Introduction of GST is a transformational move by the Government ofIndia. Your Bank conducted GST workshops in 91 modules/centers as a part of knowledgedissemination initiative on GST covering 4087 SME borrowers. Town Hall Meetings werealso conducted at all the District Headquarters to bring awareness about GST among MSMEs.

Your Bank rolled out a new Product - SME ASSIST during the _scal to finance pendinginput credit claims under GST. As on 31st March 2018 your Bank has funded 431units with a total portfolio of

Rs. 228 crore.

3) Digital offerings

Your Bank is leveraging technology in every aspect of the value proposition fromsourcing business designing products streamlining process improving delivery tomonitoring.

Your Bank has taken several initiatives to build SME portfolio in a risk mitigatedmanner and has brought about significant changes in (i) Product suite (ii) Process (iii)Delivery.

Ecosystem Financing (Project Shikhar) has been introduced by your Bank to takeadvantage of growing e-commerce footprint in the economy.

Cluster Based Funding: Cluster based approach enables your Bank to deal withwell-de_ned and recognised groups and to tap the growth potential. Since the units belongto a cluster with same kind of activity it helps in assessing their needs and monitor theoverall portfolio. As on 31st March 2018 your Bank has helped 441 units underCluster Finance with total portfolio of Rs. 450 crore.

Warehouse Receipt Finance: Your Bank has introduced Warehouse Receipt Financingscheme (WHR) to extend finance to traders/owners of goods/ manufacturers for ownprocessing against Warehouse Receipts. Warehouse receipt is issued by Collateral Managerswith whom your Bank has a tie-up (presently NBHC NCML Star Agri Origo). Further WHRissued by Central Warehousing Corporation (CWC)/State Warehousing Corporation (SWC) isalso eligible for WHR finance. The WHR portfolio as on 31st March 2018 standsat Rs. 5795 crore.

Project Vivek

Project Vivek heralded paradigm shift in your Bank's appraisal system from traditionalBalance Sheet based funding to a more objective appraisal system of leveraging cash _owand other information sources. It is a promising initiative taken and launched by yourBank for new Credit Underwriting Engine (CUE) for the SME segment which brings inobjectivity for better risk assessment. It also reduces Turn Around Time (TAT) resultingin better customer experience. As on 31st March 2018 a total 13713proposals have been processed under Project Vivek.

Trade Receivables Discounting System (TReDS): TReDS have been set up for _ow offinance to MSMEs. Your Bank was first among all PSBs to register on the TReDS platformRXIL and M1xchange. Your Bank has been actively participating in the online biddings onthe platform and has been offering very competitive rates to the benefit of MSMEs.

Loan Origination Software (LOS-SME) and Loan Life-Cycle Management System (LLMS): Witha view to adopt the uniform standards of credit dispensation and for ensuring quality andpreserving corporate memory LOS & LLMS have been introduced for small and high valueloans respectively.

Digital Inspection Application (DIA-SME): This is a Tab and Mobile basedapplication for recording inspection of SME units as a process of digitalisation ofpre-sanction/ post sanction processes of SME units. Your Bank also records collateralsecurity location of the properties and place of business with photograph andgeo-coordinates through this Digital application.

D. RURAL BANKING

1. Agri Business

Against the background of the Union Government's goal of doubling farmers' income by2022 Agriculture and allied activities have got greater focus during the year in yourBank's lending activity. Your Bank serves about 1.35 crore farmer families all over India.It surpassed the Agri credit _ow target set by the Government of India during FY2018 asit has done in the past. This is depicted in the table below:

Flow of Credit to Agriculture Trend

( Rs. in crore)
Year Target Disbursement % Achievement
FY2015 84500 86193 102%
FY2016 89781 102423 114%
FY2017 95168 125270 132%
FY2018 105741 166819 158%

In order to ease the _ow of credit for Agriculture your Bank has now raised the limitfor renewal of mortgage-free crop loans from Rs. 1 lakh to Rs. 1.5 lakh. It has alsointroduced a scheme for financing of dairy units under the Mudra scheme with liberalisedterms for loans up to

Rs. 10 lakh as allied agricultural activity is a mean of increasing farmers' income.

A new product which is designed to meet the general-purpose needs of farmers againstthe collateral of property called the Asset Backed Agri Loan (ABAL) picked up momentumduring the year and the growth under this product was about 200% albeit on a lower base.This product has been accepted by customers because of the _exibility it offers.

Your Bank is de-risking its Agri portfolio and supporting farmers at the same time byentering into local level and national level tie-ups with Agri Corporates wherein thesupply chain will ensure cash _ows for timely renewal of loan and better incomes for thefarmers. Your Bank is also lending under a Cluster-based approach to tap opportunitiesthat revolve around areas and centres which have traditionally been known for activitieslike shrimp farming dairy poultry and higher value horticulture crops like pineapple andmango.

Recognising the contribution of rural India to the nation's economic growth your Bankhas been striving to meet the financial needs of the rural segment through various newchannels and services. A pilot project on a hub-and-spoke model for improving turn-aroundtime and the quality of credit appraisals in the Rural and Semi-urban branches was rolledout in over 80 Regions across the country.

As widely reported the Agriculture sector saw a number of developments with a fewStates announcing waiver of farm loans in response to demands by the farmers. Your Bank onits own announced two Rinn Samadhan schemes covering farm sector loans and the internaltargets set under both the schemes were achieved.

Keeping in view the large number of customers served by your Bank it took the lead andorganised mass contact programmes on six occasions during the year. Under this initiativeon a pre-_xed day all Rural and Semi-urban branches of your Bank held informal meetingswith farmers to improve customer connect and spread awareness about the Bank's andGovernment's schemes. It is estimated that at least 1.5 million farmers attended thesemeets.

Other important initiatives taken during the year included issuance of 71.66 lakhKCC-ATM-RuPay Cards to Kisan Credit Card (KCC) borrowers for ease and operationalconvenience. KCC RuPay Cards work seamlessly with ATMs and PoS machines enabling farmersto purchase their day-today farm requirements on 24x7 basis.

2. Financial Inclusion (FI)

Your Bank realises the role it must play as the largest bank in the country inpracticing and promoting financial inclusion activities. The spread of digital bankingchannels and expansion of Business Correspondents (BC) networks are giving your Bank theimpetus to further grow its financial inclusion activities. Thus to achieve inclusivedevelopment and growth your Bank has worked out several strategies and leveragedtechnology to expand financial services to the door steps of people with the purpose ofbringing the excluded under the ambit of formal banking system.

Your Bank has 58274 operating Business Correspondents and over 22400 branches acrossthe country to offer banking services. The Business Correspondent channel has recorded31.21 crore transactions amounting to

Rs. 124930 crore in FY2018 translating to around 1-1.5 million transactions per day.The Business Correspondent channel provides customers with access to various bankingproducts and services reducing the foot-falls in the branches.

Under the Pradhan Mantri Jan Dhan Yojana (PMJDY) your Bank has paved the way foruniversal financial access by being a pioneer in implementing the programme. Your Bank hasopened more than 10 crore accounts up to 31st March 2018 and issued6.62 crore RuPay debit cards to eligible customers. These initiatives taken underfinancial inclusion are a part of key economic policy agenda of the Government. Over thelast decade your Bank has a major share in providing access to banking services to theexcluded in the ecosystem.

a. Imparting Financial Literacy

With the objective of imparting financial literacy and facilitating effective use offinancial services your Bank has set up 336 Financial Literacy Centres (FLCs) across thecountry. During FY2018 a total of 23962 financial literacy camps were conducted by theseFLCs across the country. As part of the pilot project being implemented by RBI your Bankhas also set up 15 centres for Financial Literacy at Block level 5 each in the state ofMaharashtra Chhattisgarh and Telangana in association with NGOs identified by RBI.

b. Rural Self Employment Training Institutes (RSETIs)

Rural Self Employment Training Institutes (RSETIs) play an important role in skilldevelopment by imparting comprehensive quality training programme to rural youth. It alsofacilitates them in setting up of micro enterprises. Your Bank has set up 151 RSETIsspread across 27 States and one Union Territory.

Your Bank RSETIs have trained more than 1 lakh rural youth during FY2018. Over 63% ofthe candidates trained are women and 83% of the candidates trained belong to non-generalcategories (SC/ST/OBC/ Minorities). More than 6 lakh candidates have been trained bySBI-RSETIs over a period of seven years of which 67% have been settled thus buildingmomentum for transforming rural India.

E. OTHER NEW BUSINESS INITIATIVES

1. Payment Solution Vertical

Banking system is witnessing new challenges in its traditional business domain from newdigitally enabled entrants. Payment systems of late have become the most sought afteraspect of banking business on account of the growing penetration of smart phonese-commerce and launch of a number of innovative products/mobile apps.

Debit Cards: With approximately 26 crore actively used Debit Cards as on 31stMarch 2018 your Bank continues to lead in Debit Card issuance in the country. SBI has amarket share of 32.35% in terms of Debit Card penetration as on 31st March2018. In line with the approach of moving towards a digital economy your Bank has adopteda focused strategy on shifting the usage of Debit Cards by customers from ATM (for cashwithdrawals) to PoS/eCom websites by executing regular promotional/activation campaigns incollaboration with leading e-comm and retailers. Your Bank has successfully launchedvarious innovations and functionalities around Debit Cards like Contactless Debit CardsBharat QR Samsung Pay and Visa Checkout.

In order to increase digital participation with customers your Bank has also tied upwith various institutions like Mumbai Metro Chennai Metro IIM Ahmedabad College ofEngineering - Pune and others for launching co-branded Debit Cards/ combo Cards.

Such consistent initiatives towards digitising payment transactions not only reducecost of transactions but also help in reducing carbon footprint through lesser use ofpaper. As a result of these initiatives your Bank has improved its market share in DebitCard spends from 29.33% as on 31st March 2017 to 30.40% as on 31stMarch 2018.

State Bank Foreign Travel Cards: State Bank Foreign Travel Cards (SBFTC) areavailable on the VISA platform in eight Foreign currencies namely Japanese Yen CanadianDollar Australian Dollar Saudi Riyal Singapore Dollar US Dollar Euro and BritishPound providing safety security and convenience to overseas travellers. SBFTC is alsoissued as Multicurrency card on MasterCard platform. Initially it was launched in fourcurrencies viz. US$ GBP Euro and SGD. During the year three new currencies viz. AUDCAD and AED have been added. Your Bank is also aggressively promoting tie-ups with FFMCs(Full Fledged Money Changers).

Rupee Prepaid Cards: Prepaid card usage has been growing for purchase of goods andservices as well as for funds transfer in India. Your Bank has issued PPIs for Rs. 950.31crore during FY2018 registering a growth of 122.90% over the previous year.

Enterprise Wide Loyalty Program - State Bank Rewardz: To encourage and maximisedigital adoption amongst SBI customers and also to attract more customers on SBI platformyour Bank launched Loyalty Rewardz program across seven channels during 2015 which isbeing extended to 4 more channels including YONO. This will encourage repetitive usage ofdigital transactions thereby creating digital habit amongst customers. State Bank Rewardzhas also been implemented through mobile app which can be downloaded from the Google PlayStore and from App Store in iOS

Foray into digitalisation of Mass Transit:

The advent in digital technology along with rapid urbanisation and infrastructuredevelopment has given a significant boost to the urban public transportation in India.With a vision to ‘Be the Bank of Choice for a Transforming India' your Bank hastaken the following steps on its journey of transforming the transit space in India:

(a) Your Bank has successfully implemented the ambitious project of NHAI - NationalElectronic Toll Collection (NETC). Your Bank is issuing SBI FASTag; working on RadioFrequency Identification technology (RFID) and enables the Customers to pay the tollelectronically across all the National Highway Toll plazas. Through SBI FASTag customerscan pay their toll electronically and can top up/recharge their SBI FASTag wallet onlinethrough a dedicated portal by using various modes like Debit Cards Credit Cards InternetBanking of any Bank. The customer can also view the history of transactions of theirvehicle. Your Bank has issued more than 2.7 lakh tags to customers. Toll transactionsthrough the SBI FASTag has crossed a mark of 68 lakh and total transaction amount hascrossed

Rs. 140 crore level in FY2018.

(b) With the aim of digitising micro-payments rapidly your Bank has participated invarious metro and transit projects. Your Bank has been awarded the Nagpur and Noida metroproject for implementation of open loop Automatic Fare Collection System based on theqSPARC technology on the RuPay platform. Your Bank has designed SARVATRA Card in line withthe National Common Mobility Card (NCMC) guidelines as envisioned by Ministry of UrbanDevelopment (MoUD). This card offers features of a metro travel card on RuPay PrepaidCard wherein transactions can be conducted of_ine. Apart from payment of fares in themulti modal transit this card offers extended usage for retail payments as well ase-commerce.

2. Acceptance

Infrastructure (Merchant Acquiring Businesses vertical)

Your Bank is playing effective role in building momentum for transforming India throughdigitalisation of the economy. In sync with the focus of the Government of India to createa less-cash economy your Bank has expanded digital payment acceptance infrastructure androlled out new payment acceptance solutions.

Your Bank continues to be the top acquirer in the country in terms of number ofterminals with a market share of 20.20% (as per the latest available RBI data as on 28thFebruary 2018). During the year your Bank introduced two new digital payment acceptanceproducts - Bharat QR and BHIM-Aadhhar-SBI; and on-boarded 2.02 lakh and 4.97 lakhmerchants respectively on these platforms. PoS deployed by your Bank has grown from 5.09lakh as on 31st March 2017 to 6.10 lakh as on 31st March 2018. Intotal the number of merchant payment acceptance touch points crossed 1.96 million as on31st March 2018.

The value of acquiring transactions has reached almost Rs. 1 trillion with 68% increaseon Y-o-Y basis. Your Bank has been successful in digitising sale transactions of retailoutlets of oil marketing companies by installing 34000+ PoS terminals at more than 20000retail outlets.

In order to increase penetration of digital merchant payment acceptance infrastructurein semi-urban and rural areas your Bank has focused on tier V and tier VI centers. As on31st March 2018 about 31% of total PoS terminals deployed are in rural andsemi urban areas.

In addition to offering basic acquiring services your Bank is also providing ValueAdded Services such as:

DCC-Dynamic Currency Conversion

EMI facility

Cash@POS facility for cash dispensation to debit card holders

State Bank of India has collaborated with major Corporates and also with governmentdepartments in digitising their operations from cash to digital mode. Your Bank hascreated a robust payment infrastructure for facilitating digital acceptance whichinvolved customisation and integration of its systems with those of corporates andGovernment departments to ensure seamless _ow of digital transactions. Some of the notableintegrations have been with the systems of Indian Railways India Posts and e-GRAS for theGovernment of Haryana.

F. GOVERNMENT BUSINESS

Your Bank has traditionally been the preferred and accredited Banker to major CentralGovernment Ministries/ Departments. Commanding the market in Government Business yourBank has a share of more than 80% in Government Commission. Your Bank is at the forefrontin developing e-Solutions for both Central and State Government undertakings. This hasfacilitated transition of Government Business to the online mode resulting in greaterefficiency and transparency. Your Bank is an active stakeholder in the Government's latestinitiatives such as the Government e-Marketplace and is continuously engaged in developingcustomised technology solutions such as e-Tendering e-BG and e-Trade to keep pace withthe Government's digital initiatives.

( Rs. in crore)
FY2017 FY2018
Turnover 4977798 5561295
Commission 2879 3050

With a view to facilitate e-Governance digitalisation and bringing in more efficiencyand transparency the following initiatives were implemented during the year:

1. GSTN: Your Bank has been designated as the sole banker for refunds of GSTwith a 30% market share in GST collections.

2. GeM (Govt. e-Marketplace): A MoU has been signed with GeM for financialintegration of payments to suppliers to facilitate procurement of goods and servicesthrough GeM portal.

3. Indian Railways: Your Bank was awarded the contract to open Inland LCsagainst indigenous contracts of supplies and works of Indian Railways for an estimatedamount of

Rs. 50 000 crore per annum.

4. Direct Benefit Transfer (DBT/L):

During FY2018 over 28.26 crore transactions were successfully processed through DBTamounting to Rs. 124881 crore. Your Bank is the sole banker for processing DirectBenefit Transfer of LPG (DBTL). Over 114.39 crore transactions amounting to Rs. 23076crore were processed through DBTL.

5. GCCS: Your Bank sponsored GCCS 2017 (5th Annual Global Conference onCyber Space) as a Platinum Sponsor which attracted delegates from over 100 countries.

6. Bharat ke Veer Portal (BKV): Your Bank has proudly associated with theBKV portal of Ministry of Home Affairs by enabling payment gateway to collect donationsfor NoK (Next of Kin) of Martyrs of 8 Para Military Forces.

7. Migration of Salary/Vendor payments to e-Mode: Migrated salary/vendorpayments of Lok Sabha 80 CDDOs (Cheque Drawing & Disbursing Officers) of MoUD(Ministry of Urban Development); and made salary payments of 1.84 lakh Indian Air Forcepersonnel.

8. PoS (Point of Sale) terminals: Your Bank has provided PoS terminals tothe Indian Railways Post Offices Passport Seva Kendras and Ministry of External Affairs.

9. BHIM UPI: Solution implemented for Passenger Reservation System (PRS) ofIndian Railways (Railway reservation counters across India).

10. e-MRO (Military Receivables Order):

All 31 CDAs/PCDAs (Controller/ Principal Controller of Defence Accounts) have beenon-boarded.

11. e-BG (Bank Guarantee): Your Bank is the first to integrate with Governmente-Marketplace (GeM) for online con_rmation of BGs/PBGs for procurement.

12. e-Tendering: MoU (Memorandum of Understanding) has been signed with UttarPradesh Government for e-Tendering solution of State Government Departments and AutonomousBodies.

13. RFID FASTag: MoU signed with Odisha State Transport Corporation to provide SBIFASTag facility for their 470+ buses. A MoU was also signed with South Bengal StateTransport Corporation to provide SBI FASTag facility to their 750+ buses.

14. e-Trade: PCDA New Delhi has been on-boarded for online opening of LCs. Morethan 90% of LCs are being routed through the portal of SBI.

15. Pension Payments: Your Bank has been administering pension payment to over53.23 lakh pensioners through the 16 CPPCs (Centralised Pension Processing Centres). Thetotal pension amount disbursed has exceeded Rs. 133475 crore during FY2018. Your Bankhas added 2.81 lakh new pension accounts during the year. A number of Pensioner ConnectProgrammes were held across the country.

16. Small Savings Schemes: Your Bank services more than 71.58 lakh PPF and 11.64lakh Sukanya Samriddhi Accounts which is the highest among all authorised banks. Over5.31 lakh new PPF accounts and 3.66 lakh new SSA Accounts were opened during FY2018.

G. EFFICIENCY AND COST CONTROL

Your Bank has set up Insurance Cell for Insurance of Bank's assets and other risks inorder to reduce requirement of Capital under Advanced Measurement Approach (AMA) ofBasel-II framework. It has enabled your Bank in procuring Insurance Cover with betterwordings/cover in Insurance Policy at competitive pricing. This has also facilitatedtimely lodgment of claims and improved claim settlement. Request for Quotes/Bids areissued only to those Insurance Companies which have a record of settlement of at least 50%of claims in the last three years.

Your Bank has also introduced an innovative dedicated customer care centre ‘SBICARE' a customer facing out_t to cater to customer queries and their non-financialbanking requirements with opening centres in Mumbai Hyderabad Delhi and Chandigarh. SBICARE centre will handle Account related enquiry enquiry on all products updation of KYCAadhaar Mobile PAN numbers Cheque Book requests Account Statement ATM Card requestATM Pin generation Account opening through Digital platform lodging of complaints etc.and will offer delightful interactive experience to your Bank's customers/ public.

Outsourcing Model of Stationery Management Project is currently rolled out in 9Circles. The Project was implemented to reduce costs incurred on premises storageobsolescence of stationery items manpower overheads and transportation costs etc. YourBank is in the process of rolling out the Project in all Circles in the near future.

Under Scanning and Digitalisation of post LCPC AOFs out of total stock of 15.89 croreAOFs held in LCPCs as on 31.03.18 your Bank has scanned 15.74 crore AOFs (99.05%completion) images of such 14.73 crore AOFs have been migrated to Bank's centralised(EDMS) server. This will help facilitate digital storage and retrieval of AOFs data foroperational purpose.

As a result of these initiatives Branch premises will be decongested and have morespace and better look to offer to the customers for their convenience and more ful_llingexperience.

2. CORPORATE BANKING GROUP

The Wholesale Banking business ecosystem at your Bank focuses on servicing corporatecustomers through customised financial solutions and is comprised of several teamsfocused on specific areas to facilitate specialisation and customised product offerings toyour Bank's clients.

A. CORPORATE BANKING

The Corporate Accounts Group (CAG) provides corporate banking services to largecorporates and institutions including state-owned enterprises and caters to customerswith total credit exposure in excess of Rs. 5 billion.

It offers fund-based and non-fund-based products fee and commission-based products andservices deposits foreign exchange services as well as a range of foreign currency andtreasury services including RBI permitted derivative arrangements provided by theInternational Banking Group and the Global Markets Group. It also facilitates cashmanagement initiatives centralised payment solutions derivatives products wealthmanagement services remittance and collection services online tax payment end to endpayment solutions cross-selling of a variety of financial products and services offeredby other groups in the Bank including personal banking services co-branded credit cardsand supply chain finance.

Corporate Accounts

The Corporate Accounts unit focuses on your Bank's prime corporate clients acrossIndia. Each client is assigned a dedicated accounts management team led by a relationshipmanager to coordinate the client's banking requirements. The Corporate Accounts unit aimsto leverage its corporate relationships to grow its fund-based non-fund-based andfee-based products.

Your Bank ensures focused marketing and customer service for its corporate clients. Inaddition to corporate internet banking facility with multi-level access and authorisationcontrols other delivery channels include the Bank's extensive branch network credit cardofferings and electronic payments platforms. The Corporate Account units' services aredelivered through the Bank's specialised branches in Mumbai New Delhi Chennai KolkataAhmedabad and Hyderabad.

The Corporate Accounts unit's corporate loan portfolio primarily consists of fund basedproducts (including cash credit working capital demand loans bills discounting exportfinance corporate loans and term loans for project and corporate finance) and non-fundbased products (including letters of credit bank guarantees deferred paymentguarantees). Varied investment products like bonds commercial paper and non-convertibledebentures among others are arranged by the Global Market Group of your Bank to corporatecustomers.

The total outstanding loans to clients in the Corporate Accounts unit stood at

Rs. 3385.78 billion and Rs. 4118.97 billion in respect of fund-based products and

Rs. 1895.99 billion and Rs. 2172.88 billion in respect of non-fund-based products asof 31st March 2017 and 31st March 2018 respectively.

The CAG has been instrumental and a co-participant in various development schemes ofthe Government aimed towards transforming India through sustainable development within the15-year road map. Towards achieving this vision CAG has been actively supporting manyInfrastructure projects like Roads and Ports (improving connectivity all over India andalso contributing to ease of business); Power (in line with the

B. TRANSACTION BANKING UNIT

Transaction Banking Unit (TBU) a technology driven platform offers comprehensivetransaction related products and solutions to clients. The objectives of TBU are to adoptnew technology initiatives catering to bulk transaction requirements of clients along withother value additions like customised MIS integration with ERP and dedicated single pointClient Support Cell among others. Study and analysis of transaction patterns enables yourBank to develop non-traditional techniques for assessing other Banking requirements likeCredit Fund Management Cross Selling and other for clients.

Your Bank offers a wide range of TBU products to Corporates Mid-Corporates GovernmentDepartments Financial Institutions viz. NBFCs Insurance Companies Banks Mutual Fundsand SME Clients which facilitates their fund management requirements.

By keeping a track on market development your Bank provides technology basedfuturistic solutions to clients to keep TBU products updated and ahead of its competitors.

While Corporate Customers and Government clients (both Central and State Government)continue to be the key focus segment your Bank has grown thrust to SME sector to increasepenetration among existing as well as start-up business.

TBU fee Income increased by 33.62% from Rs. 616.96 crore in FY2017 to

Rs. 824.39 crore in FY2018. A 30% growth in fee Income has remained consistent in thelast three years. Turnover registered a Y-o-Y increase of 67.30% with transactionsamounting to Rs. 2137369 crore in FY2018 over Rs. 1277580 crore in FY2017. Your Bankwas awarded with "Best Transaction Bank in India" by The Asian Banker forFY2017.

C. PROJECT FINANCE AND LEASING

The project finance environment presented contrasting pictures of sector-specificchallenges where on the one hand sectors like Roads exhibited some signs of revival whileon the other hand Power in particular non-renewable and telecom sectors continued tograpple with the macro-economic issues. The overall sentiments of the promoters andlenders remained subdued owing to the continuously rising number of bad loans and stalledinfrastructure projects. There are several new initiatives taken by Government as well asRBI and if these steps deliver successfully FY2019 may offer some hope to all thestakeholders.

Your Bank's special business unit Project Finance and Leasing (PFSBU) deals with theappraisal and arrangement of funds for large projects in infrastructure sectors such aspower telecom roads ports and airports. It also covers other non-infrastructureprojects in sectors like metals cements oil & gas among others with certainthreshold on minimum project cost. PFSBU also provides support to other verticals forvetting their large ticket term loan proposals. In order to strengthen the policy andregulatory framework for financing infrastructure inputs are also provided to variousMinistries of Government of India and the RBI with respect to lenders' views on newpolicies Model Concession Agreements and broader issues being faced in infrastructurefinancing. The role of PFSBU has further expanded in stressed asset management in view ofthe substantial increase in the number of stressed assets.

During the year PFSBU in all earned Rs. 176 crore as fee income which was a growth of25% over previous year.

Project Finance and Leasing Business Performance

FY2016 FY2017 FY2018
Project Cost 77227 83434 81701
Project Debt 59094 51227 58754
Sanctioned Amount 18125 26557 19835
Syndication Amount 18082 5809 11937

D. MID CORPORATE BANKING

Your Bank's Mid Corporate Group (MCG) operates through its 14 Regional

Offices across Ahmedabad Bangalore Chandigarh Chennai (2) Hyderabad IndoreKolkata (2) Mumbai (2) New Delhi (2) and Pune. The MCG has 55 branches as on 31stMarch 2018 with 21 branches in metro centres and 34 branches in other urban centres.

MCG Loan Portfolio (Non-Food Domestic)
( Rs. in crore)
31st March
2018
MCG Loan Portfolio (Non-Food Domestic) 329772

The overall growth of MCG Vertical during the FY2018 was Rs. 9433 crore with a Y-o-Ygrowth rate of 3.20%. During the year MCG has sanctioned 80 new connections withaggregate Fund Based exposure of Rs. 21551 crore most of which are investment gradeassets.

The Trade Finance (LC & BG) turnover volume of the Group improved by 25.96% fromRs. 76589 crore as on 31st March 2017 to Rs. 96469 crore as on 31stMarch 2018. The forex turnover of the group has improved by 6.22% from Rs. 341837 croreas on 31st March 2017 to Rs. 363084 crore as on 31st March 2018.

MCG follows the approach of having periodical structured interactions essentiallyserving as brain-storming sessions among the key functionaries in the Group for betterunderstanding of the portfolio handled by the Group. The exchange of ideas and views inthese interactions among the top executives and the operating officials on the groundhas been useful in the Group's planning for business growth and asset quality management.

The Group continues to partner in growth of its customers in India to expand theiractivities and provides them support for acquiring assets/companies overseas including byway of loans to overseas subsidiaries/JVs (backed by Letters of Comfort or Stand-byLetters of Credit).

Your Bank has been an epitome of trust across the length and breadth of the country. Ithas extended its wings across the globe with financial products for the NRI communityIndian corporates exporters and importers as well as the local populace and corporates.

Your Bank was the first Indian bank to transcend borders with opening of branch of Bankof Madras in Colombo Sri Lanka in July 1864. A branch of Imperial Bank of India atLondon followed in 1921. SBI has now become a pioneer of International Banking among theIndian Public Sector Banks with its presence across all time zones in 206 offices in 35countries. These offices are being managed by the International Banking Group of the Bank.

The breakup of overseas offices of our Bank is as under:

Overseas Offices as on 31.03.2017 Offices opened during last 12 months Offices closed during last 12 months Overseas Offices as on 31.03.2018
Branches /Sub-Offices / 74 2 4 72
Other Offices
Offices of 8 Subsidiaries/JV 113 9 - 122
Representative Offices 5 2 - 7
Associates / Managed 3 2 - 5
exchange Cos /Investments
Total 195 15 4 206

During FY2018 the Bank opened 1 new branch viz. Hulhumale in Maldives. Nepal SBI BankLimited a subsidiary of SBI has opened 7 new branches during the year. During the sameperiod Sylhet branch (Bangladesh) and Doha branch (Qatar) were closed. Further

2 Managed Exchange companies and 2 Representative Offices (Dubai & Abu Dhabi) cameinto the gamut of SBI on account of merger with Associate Banks.

The International Banking Group of your Bank has a balance sheet size of US$ 59819 Mioand Net Profit of US$ 206 Mio as on 31st March 2018. The International Bankingarm of the Bank has consistently been a major contributor to the bank's Profits as under:

Financial Years 2015 2016 2017
Contribution of Foreign Offices to Net Profit 24% 42% 27%
of the Bank (Solo)

The International Banking Group has contributed immensely in transforming the industrylandscape of the country. It has positioned itself in the growth trajectory of the economywith its specialised verticals offering their expertise and services on various frontsthus playing its part in building the momentum for a transforming India in tandem withother drivers which are mentioned as under:

1. Credit: Stimulating Growth

Your Bank has facilitated Indian corporates in their growth strategy including GreenField ventures by arranging debt in Foreign Currency.

SBI has financed bilateral loans to the tune of US$ 3.00 billion to Indian corporatesand syndicated loans worth US$ 1.60 billion during the year.

Your Bank was awarded Syndicated Loan House of the Year - India by APLMA (Asia PacificLoan Market Association).

Infrastructure is a key driver of the overall development of Indian economy. TheInternational Banking Group of the Bank has played pivotal role in setting forth thetransforming India journey. Coordinated efforts have been made to ensure fasterdevelopment of the economy by providing Foreign Currency funds at competitive rates to keyinfrastructure sectors like Telecom Ports Fertilizers and Power sector.

Telecom: Your Bank is the only Indian Bank to have extended ExternalCommercial Borrowings to one of the leading telecom players.

Energy - Oil & Natural Gas: Your Bank has been active in funding overseasacquisition by Oil Exploration and Marketing companies. These acquisitions havesignificant strategic importance to India both in terms of augmenting India's energysecurity amid unstable crude prices by tying up new sources of crude oil as well asenhancing India's stature in the global political and economic arenas.

Power: Your Bank has always been leader in providing External Commercial Borrowingsto Power sector companies and NBFCs engaged in on-lending to power sector.

Ports: With the current emphasis on "Make in India" the proportion ofmerchandise trade in India's GDP is expected to increase rapidly. Thus ports would play avital role in enhancing trade and commerce potential of the country by enhancing theiroperational efficiency and capacity. With this backdrop and with the intent to have accessto cheaper cost of funds Ministry of Shipping Government of India has directed all majorports to avail External Commercial Borrowing (ECB) to fund their future capex program.Your Bank was the first among major Banks to support the initiative and meet the foreigncurrency requirements of Integrated Ports thus demonstrating its long-term commitment tosupport country's infrastructure needs.

Fertiliser: The fertilizer industry has a major role to play in transforming theIndian farming sector and helping India achieve the goal of self-sufficiency inagricultural production. Your Bank has extended External Commercial Borrowing facility tomajor fertilizer producers in India that is slated to play a very important role inachieving the GoI's stated target of doubling the income of the farmers in fiveyears.

2. Collaborative Partnership and Image Building

DIFC Dubai Branch of your Bank has partnered with Indian Companies in setting up green_eld projects in Dubai thereby promoting Indian Entrepreneurship Skills and Technologyproviding employment to the local populace and Indian immigrants and contributing to theNew Image of India to be reckoned with in the global arena.

3. Retail & Remittances

Your Bank has been a "window to India for NRIs residing in different parts of theworld through its specialised retail and remittances products. As IT infrastructure is thebedrock for improving customer offerings in Retail & remittances segment a detailedIT strategy was put in place for implementation of IT enablers. The highlights ofthe year are mentioned hereunder:

Remittance business strategy was re-imagined by focusing on developingvarious area specific Payment and remittance corridors like India to Nepal Indonesia toIndia Korea to India Bhutan to India remittance corridors. In addition to this tie upswere made with third party platform for US-India leg and also for launching of Appbased remittances.

FEBA was launched at all Subsidiaries & FOs on Finacle platform. Finaclealert server for SMS delivery rolled out in 21 territories.

InTouch Branches opened at Male SBI Mauritius & SBI Nepal during theyear.

Digital Village initiative rolled out in Nepal to acquire dominant positionin digital sphere in Nepalese financial sector.

Remittances through ATMs rolled out in Mauritius.

Mobile banking launched in UK Mauritius Maldives Canada Nepal and SriLanka.

Online Account opening launched at SBI California.

Call centre operations of SBIUK relocated to India resulting in significantcost savings.

Launched remittance from USA to India through Transfast Remittance LLC USA.

Student GIC Scheme launched at SBI Canada thereby offering ease of entryand banking to Indian students interested in pursuing higher studies in Canada.

Global Payment & Services:

Global Payments & Services (GP&S) a unit under International Banking Group(IBG) comprises three branches/offices viz. Global Link Services (GLS) InternationalServices Branch Mumbai (ISBM) and International Services Branch Ernakulam (ISBE). Itfacilitates online inward remittances from overseas locations to India Foreign CurrencyCheque collection Opening & Maintenance of Vostro Accounts Asian Clearing Union(ACU) Transactions and Bank for Foreign Economic Affairs (BFEA) of USSR section.

Highlights:

Tie-up with 62 Exchange Companies and Six Banks for channelising inwardrupee remittances from Middle-East Countries to India.

Compliance framework strengthened for enhanced post transaction monitoringthrough AMLOCK related to remittances.

During FY 2108 GP&S on behalf of domestic branches handled 65765Export bills (in US$ and Euro currencies) and 65232 Foreign Currency cheque collectionaggregating to US$ 13601 Mio.

During FY2018 GP&S handled 14.03 million online inward remittancetransactions amounting to US$ 9746 Mio received from various global centres.

4. Trade Finance

SBI has been providing a wide portfolio of Trade Services through a varied range ofproducts and services to exporters and importers through an extensive well equippedbranch network that operates in all time zones in India and abroad. Monitored through afocused Department Global Trade Department (GTD) in International Banking Group (IBG)the Trade Finance forms a significant part of the International Asset portfolio. SBI beingone of the top global banks is in a position to arrange low cost Trade finance to IndianCorporates for their imports.

Global Trade Department in IBG contributes immensely in synergizing Forex business _owsfrom Domestic Offices to Foreign Offices by acting as a robust link between them andaddressing related gaps. It also endeavors to leverage the Correspondent / Partner Banksrelationships for prospective Trade related business.

Recently in Nov'2017 your Bank hosted the 34th Asian Banker Association AnnualConference to reiterate its commitment to provide support to projects that willencourage Trade Industrial and Investment Co-operation in the Asian region.

SBI is a prominent player in India- Asia Trade corridor and has been recently awardedas "The Best Trade Finance Bank for the South Asia region" by GlobalTrade review London. This is the second consecutive year SBI is awarded at a regionallevel. We are already "The Best Trade Finance Bank – India" forseven consecutive years in Global Finance.

5. Foreign Direct Investment

Your Bank has set up Japan Desk which aims to act as a nodal point for channelising _owof investments between Japan and India through State Bank of India. It provides necessaryinformation / market research / legal support to Japanese companies wanting to incorporatein India. Japanese corporates looking for investment opportunities in India are beingfacilitated in identifying sectors/industries of interest to them and are providedcredible market information. This has facilitated _ow of FDI from Japan to India.

SBI has also set up Korea Desk in collaboration with The Korea Development Bank (KDB).Korea Desk in coordination with KDB connects the Korean companies with the opportunitiesin Indian market. It facilitates Korean companies in setting up new business entities inIndia. Korea Desk has facilitated acquisition deals.

Under the aegis of Japan Desk and Korea Desk corporates are provided tailor madecredit products and services in a seamless manner for their ease of doing business.

Japan Desk and Korea Desk are unique facilities created in India which have facilitatedHigh Tech companies from Japan & Korea in the area of Automobile Engineering GoodsFood Processing etc. set up manufacturing facilities in India which helped in creation ofemployment and also in the mission of Make in India.

6. IT Initiatives:

Your Bank as a truly Digital Bank has taken a holistic approach to innovate processesto make them customer centric thereby enabling it to capture and convert data intoactionable insights by creating a simple virtual organisation that appears ubiquitous toevery customer offering tailored products to the likes needs and preferences.

The initiatives taken at Overseas Offices are:

Finacle E-Banking Application (FEBA) i.e. Retail INB Corporate INB andMobile banking solution Implemented at all overseas offices.

UK Based Contact Centre has been migrated to Bengaluru (India) therebyextending availability of services to 24x7x365 for UK Customers at much reduced cost.

Trade Finance Solution-eTrade from Misys Plc. (UK) a back-end Applicationfor 22 Trade Finance Products such as Bank Guarantee LCs Buyers Credit MRPA etc. sinceimplemented at all FOs to support all Trade Finance requirements at Foreign Offices.

Truly digital sbiINTOUCH facility has been extended from Domestic to ForeignOffices as well. As on date it has been rolled out at 3 countries- Male Mauritius andNepal.

Standalone SWIFT Centers at London and New York have been migrated back toIndia to ensure better control oversight and protection against possible cyber threats

Enterprise level CRM solution is being implemented across all Foreignoffices to improve deep understanding of customer needs and behaviour requiring verylittle remote support.

Bank's Digital Banking strategy is continuously reworking to initiatevarious technologies such as Internet of Everything Open Banking to enhance the choiceutility and experience Mobility and Wearable. Your Bank has initiated :

Enterprise Project Management tool where every IT project is tracked. a. Big dataanalytics to help deliver products on customer preferences and tracking customerstickiness for successful customer retention. b. Bank has begun using Private Cloudselectively and has plan for Document Management Solution to capture its recordsdigitally. c. Generation of regulatory and other reports directly from core data under ADF(Automatic Data Flow) for International Banking Statistics (IBS) Bank Exposure andCountry Exposure.

Your Bank has always been an integral part of the growth strategy of the Indianeconomy and has once again been on the forefront in stimulating growth and facilitatingopportunities for building momentum towards a transforming India.

3. STRESSED ASSET MANAGEMENT

For the last few years the entire banking sector has been under stress due to a spurtin the growth of Non-Performing Assets (NPAs). Rising NPA levels and fresh slippagesacross sectors can be attributed to the following factors:

i. Inadequate pickup in the global economy and negative spill overs from globalfinancial markets. ii. Less than adequate pick up in domestic growth and decliningexports. iii. Cancellation of coal blocks. iv. Delay in realisation of receivables due tosubdued demand and reduced market confidence among others. v. Stress in Steel sector dueto volatility in prices of steel; low capacity utilisation and cheap imports from othercountries; imposition of trade barriers by countries; and inverted duty structure. vi.Stress in Power sector due to delayed tariff revisions; issues in environmental clearancesand land acquisition; high Aggregate Technical

& Commercial (AT&C) losses; and poor financial health of DISCOMS. vii. Delay inexecution of infrastructure projects and related escalation of costs coupled with increasein receivable days and unbilled WIP impacting EBITDA margins stalled projects highlyleveraged business model and lower than expected equity returns for promoters/ sponsors.viii. Stress in other major sectors like Textiles Telecom Sugar and Aviation amongothers.

According to the Financial Stability Report of RBI for December 2017 risks to theBanking sector remained at an elevated level weighed down by further asset qualitydeterioration. Further results of macro stress tests for credit risk at system bankgroup and sectoral levels (to test the resilience of the Indian banking system againstmacroeconomic shocks) predict a grim picture under which GNPA ratio of all ScheduledCommercial Banks (SCB) may increase to 10.8% by March 2018 11.1% by September 2018 andmay further deteriorate if macro-economic situation worsens. Moreover sensitivityanalysis conducted to study the resilience of SCBs with respect to credit interest rateequity prices and liquidity risks predicts that a severe credit shock is likely to impactthe capital adequacy and Profitability of a significant number of banks mostly PSBs.

The movement of NPAs and recovery in written-off accounts during the last four yearsare furnished below:

( Rs. in crore)
FY2015 FY2016 FY2017 FY2018
Gross NPA 56725 98173 177866 223427
Gross NPA (%) 4.25% 6.50% 9.11% 10.91%
Net NPA (%) 2.12% 3.81% 5.19% 5.73%
Fresh Slippages + 29444 64198 115932 100287
Increase in O/s
Cash Recoveries / 13011 6987 32283 14530
Up-gradations
Write-Offs 21313 15763 27757 40196
Recoveries in AUCA 2318 2859 3963 5333
PCR (%) 69.13% 60.69% 61.53% 66.17%

The substantial rise in Gross NPAs is partly due to the merger of erstwhile AssociateBanks (e-ABs) and Bhartiya Mahila Bank Ltd. (BMBL) with your Bank wherein a total of

Rs. 65523 crore of NPAs were added to the portfolio.

The Government of India in its Reforms Agenda for Responsive and Responsible PSBs hasdirected creation of a Stressed Assets Management Vertical (SAMV). Your Bank takes immensepride in the fact that SBI has been a pioneer in establishing such a dedicated verticalalmost decade and a half ago by establishing Stressed Assets Management Group (SAMG)during FY2005.

In order to give dedicated focus towards resolution of stressed accounts SAMG has beenrenamed as Stressed Assets Resolution Group (SARG). SARG continues to work as a dedicatedand specialised vertical for efficient resolution of high value NPAs. At present it isheaded by a Deputy Managing Director with three Chief General Managers overseeing theentire effort. SARG has turned into a centre of excellence in resolution of NPA andstressed assets. As on 31st March 2018 SARG has 20 Stressed Assets ManagementBranches (SAMBs) and 57 Stressed Assets Recovery Branches (SARBs) across the country andcovers 26.34% and 73.16% of your Bank's Non-Performing Assets (NPAs) and Advances underCollection Account (AUCA) respectively. Besides initiating hard recovery measures SARGout with a revised framework for resolution of stressed assets scrapping variousrestructuring schemes like S4A SDR CDR 5:25 Flexi restructuring. The revised frameworksends out a strong message by ending regulatory forbearance and places higher reliance onthe NCLT framework for resolution of stressed assets. In fact enforcement of Insolvencyand Bankruptcy Code (IBC) for resolution of Stressed/NPA borrowers has provided Banks witha time bound transparent and effective mechanism to tackle stressed assets. Some of thelarge accounts initially referred to NCLT are moving towards resolution. It is reckonedthat most of the large value accounts referred to NCLT may undergo resolution preventingbanks from taking up huge haircuts as the going concern value of those accounts shall berealised. As the system evolves with IBC it may even pave the way for development of arobust secondary market for stressed assets leading to efficient price discovery andtransparent resolution of accounts resulting in unlocking maximum value for your Bank.

4. TREASURY OPERATIONS

The Global Markets Group performs the treasury functions of your Bank. It isresponsible for ensuring safety liquidity and yield besides maintaining statutoryreserve requirements. The corpus under management of Global Markets increased by 13.6%Y-o-Y to Rs. 1026439 crore as of 31st March 2018. Global Market Group alsoprovides foreign exchange services and hedging instruments for risk management tocustomers and offers portfolio management services to many retirement funds. The yearstarted off with a challenge to complete the merger of treasuries of the five AssociateBanks and Bhartiya Mahila Bank Ltd. with SBI's treasury. This was successfully completedand the combined treasury started operations on 3rd April 2017.

A. SLR AND NON SLR PORTFOLIO

Your Bank's Global Markets Group is also responsible for managing the Bank's SLRportfolio as well as liquidity management which includes maintenance of CRR and HQLAs forLiquidity Coverage Ratio (LCR). After an impressive performance in the last two yearsthis year has proven to be challenging for bond markets due to rising yields. During theyear RBI had cut repo rate by 25 bps to 6% in August 2017 but has held rates constantsince then. The benchmark 10 year (of 6.97% due 2026) paper which was trading at 6.69% on31st March 2017 ended the current _scal year at 7.53% as on 28thMarch 2018. The new benchmark (of 6.79% due 2027) paper introduced in May 2017 fell toa low of 6.41% in July 2017 (on closing basis) but increased for most of the remainingperiod and reached a high of 7.95% in March 2018 before easing off to 7.55% as on 28thMarch 2018. Due to this sharp rise in yields your Bank had to increase provisions oninvestments. The rise in yields was significantly sharper by historical parameters likerepo-GSec spread and real interest rates.

During the year the net interest income from treasury investments grew 15% Y-o-Y.Global Markets' G-Sec portfolio also increased 22% Y-o-Y mainly on account of the mergerwith Associate Banks and Bhartiya Mahila Bank Ltd. on 1st April 2017.

To improve the portfolio yield and to optimally utilise the surplus liquidity yourBank has increased its Commercial Paper and Corporate Bond portfolio by around 9% on aY-o-Y basis.

B. EQUITY MARKETS

Equity markets continued their rally for most of FY2018. However post budget trackingglobal equity markets a sharp correction in the markets was seen but Nifty still endedFY2018 with 10.25% gains. Your Bank has managed the equity portfolio using a strategy ofactively rebalancing the portfolio based on key events global and domestic marketconditions quarterly earnings of the companies and their future outlook backed by itsresearch. In addition to the secondary markets your Bank continues to Profitably investin IPOs to improve the return on the portfolio. A 112% Y-o-Y Profit growth has beenachieved from equity investments during the year.

C. FOREX MARKETS

The Global Markets Group also handles the foreign exchange business of your Bankproviding solutions to customers for managing their currency _ows and hedging risksthrough options swaps and forwards in addition to providing liquidity to markets. TheGroup also manages the FCNR(B) deposit corpus of your Bank and provides FCNR(B) loans andPre & Post shipment Export Finance in foreign currency to its customers.

In order to improve ease of doing business for its customers and to keep pace with thetransforming India your Bank continues to increase the use of IT in its Forex offerings.A new platform for large volume customers Forex Edge has been launched during the year.This is in addition to your Bank's earlier platforms e-Forex and FX-Out which completesthe bouquet of products for forex services. While the Forex Edge platform is for highvolume customers e-Forex is committed towards providing a world class forex solution tomedium and small corporate customers and FX-Out caters to the forex remittances ofretail clients without having to route them through a forex authorised branch.

Treasury Marketing Group is the customer engagement arm of Global Markets and plays apivotal role in marketing of Treasury Products to Institutional and Corporate clients ofyour Bank. Treasury Marketing Units located across the country are the face of GlobalMarkets to the customers. They interact with the customers on a daily basis identifytheir needs and coordinate with other business units for pricing product structuring anddelivery.

In May 2017 your Bank has set up a separate FPI desk for focused attention on FPI/FDIbusiness. Various processes have been put in place to mobilise business from these largeinvestors and the desk has successfully on-boarded 33 counterparties for the _xed incomemarket along with catering to the forex requirements of many large FPI clients. Earlierin order to improve engagement with other financial sector players including banks andfinancial institutions an Interbank Marketing Desk was created under Global MarketsGroup. This desk is actively building and maintaining mutually beneficial relationshipswith these clients. Global Markets Group has also augmented its in-house market researchteam to enhance value added services to your Bank's clients as well as its own investmentdecisions. Your Bank believes that increased resources dedicated towards buildingrelationships with customers and counterparties as well as augmenting the scope andquality of its research will bear rich dividends and help your Bank in maintaining itsleadership position well into the future.

Private Equity / Venture Capital Fund

In this space the JV set up with Macquarie and IFC in 2008 to manage the US$ 1.2billion India-focused PE fund has invested approximately 96% of its total capitalcommitments. The Fund has invested across eight infrastructure assets namely TelecomTowers Airport Thermal Power Hydro power and NHAI road assets. It is currently in theexit phase and has successfully exited from two road assets.

The Oman India Joint Investment Fund (OIJIF) a JV set up in 2010 in partnership withState General Reserve Fund of Oman has completed its investments for Fund-I of US$ 100million. Fund-I has made two full exits and one partial exit. Based on the success ofFund-I both the partners (SBI and SGRF) decided to launch Fund-II with a target corpus ofUS$ 300 million. Till date Fund-II has received commitments of US$ 230 million fromsponsors and various domestic financial institutions. Fund-II is currently assessingvarious opportunities for investing.

During FY2018 your Bank picked up a stake in National e-Repository Ltd. and made anadditional equity investment in National e-Governance Services Ltd.

Portfolio Management Services

Your Bank is the largest retirement benefit fund manager in the country with animpeccable track record. The total AUM as on 31st March 2018 is Rs. 451237crore. Your Bank is ranked No. 1 fund manager (out of 3 fund managers) by Coal MinesProvident Fund Organisation and No. 2 fund manager (out of 5 fund managers) by EmployeesProvident Fund Organisation as per the latest data made available by respective client.

IV SUPPORT AND CONTROL OPERATIONS

1. HUMAN RESOURCES AND TRAINING

A. HUMAN RESOURCES

Human Capital is the most critical component for your Bank to achieve the StrategicCorporate Goals. Your Bank's HR policy is being constantly reviewed to align with businessgoals.

Your Bank considers its employees as its core strength and is proud of its performanceoriented and meritocratic culture. It cares for the aspirations of its staff members byconstantly trying to enrich their lives and job experiences. Your Bank believes thatchallenges of the future can be overcome only by a committed and dedicated work force.Your Bank's HR vision has been built around the principles of inclusiveness empowermentand development.

The financial year began with the historic merger of SBI with its five Associate Banksand Bhartiya Mahila Bank Ltd. (BMB). The merger also witnessed the addition of around71000 new employees to the existing work force of around 200000 employees. Initiativesintroduced by your Bank such as ‘SANGAM' helped in smooth on-boarding of employees.The summarised HR Pro_le of your Bank as on 31st March 2018 is as under:

Category 31st March 2017 31st March 2018
Officers 81041 107077
Associates 92979 110348
Subordinate staff & Others 35547 46616
Total 209567 264041

1. Vision Mission & Value

Your Bank is a pioneer in the Indian public sector in starting an independent‘Ethics & Business Conduct' Department to weave its ethos in the operationalfabric. Your Bank's entire work force is committed to adhere to its newly crafted VisionMission and Values.

The entire team at SBI is dedicated towards providing simple responsive and innovativefinancial solutions to a transforming India by being the preferred choice for any bankingtransaction. Your Bank believes in providing world class banking facilities through livingdaily its values of Service Transparency Ethics Politeness & Sustainability (STEPS)towards creating a differentiated experience of our esteemed customers.

2. Recruitment

Your Bank is focused on developing processes to attract the best talent within thecountry. It has revamped the recruitment process and developed a stronger employee valueproposition to attract the right talent. During FY2018 2220 young tech savvy andcustomer friendly probationary officers and 600 Specialist Officers were selected throughlateral and contractual recruitment process.

3. Manpower Planning

Your Bank has adopted a scientific model for manpower planning to ensure optimalutilisation of its human resources. To foster optimum expertise and deep domain knowledgeyour Bank introduced Job Families concept which is being adopted to place right person inthe right job. Your Bank has anticipated the need to prepare future leaders of the Bank.Project Saksham is designed to achieve all this in a structured and holistic way.Leadership development will remain the key focus of the HR function.

4. Staff Welfare Measures

Your Bank believes its human resource to be professionally trained with high standardsof proficient competence. At the same time your Bank also cares for the employee'spersonal life. With this motive your Bank has taken a transformative initiative topromote healthy work-life balance. The Bank is also taking proactive measures to reducethe hardship of the officers by reducing the transfer/posting to its minimum andcurtailing it to need based. This new approach will provide the employees a good andhealthy work

Your Bank believes in recognising and rewarding good work done by the employees. It hasrolled out the scheme called ‘SBI Gems'. Senior officials may award Gems to thejunior colleagues across the Bank as a token of appreciation. It enhances the loyalty andmotivation of employees for the organisation.

In extension of the various HR best practices to increase employees engagement yourBank has launched ‘SANJEEVANI-SBI HR Helpline'. It is a two-way communication channelbetween the employees and HR Team through Interactive Voice Response System to providequick and meaningful resolution of HR matters. Employees can approach SANJEEVANI throughphone SMS and e-mail.

Your Bank always aims to set examples by adopting best HR practices to make SBI as amodel organisation to work for. Your Bank introduced the ‘Bereavement Leave' of sevendays to help the employee to cope with loss of a near and dear ones. This leave allowsemployees to spend time with their families in the hour of crisis and grief.

5. Gender Diversity

Gender sensitivity and inclusiveness have always been the corner stone of your Bank'sHR policy. Women employees are spread across all levels of hierarchy as well asgeographical spread. Close to 2400 Branches are being headed by women officers. Out oftotal work force of 264041 24% comprises of women employees.

Your Bank maintains a Zero Tolerance Policy against Sexual Harassment at Workplace andhas put in place an appropriate mechanism for prevention as well as redressal ofcomplaints of sexual harassment.

TEAM COMPOSITION

Year Women Men
FY2017 23% 77%
FY2018 24% 76%

6. Reservation Policy

Your Bank meticulously follows the GOI directives on Reservation Policy for SC/ST/OBCs. It has a representation of SC ST OBCs and differently-abled persons among all thecadres of its work force. Your Bank believes in having an empathic and caring approachtowards all its employees. It has appointed Liaison Officers at Corporate Centre and atall the Local Head Offices of the Bank to redress the grievances of the SC/ ST employeeson real time basis. Your Bank also conduct the Pre-Recruitment and Pre-Promotion trainingprogrammes regularly for SC/ST candidates.

Representation of SCsSTsOBCs and Differently Abled as on 31st March 2018

Cadre Total Representation
SCs STs OBCs DAPs *
Officers 107077 18767 8340 17953 1707
Clerks 110348 18089 9322 26269 2322
Sub-staff 46616 11909 2946 10598 290
Total 264041 48765 20608 54820 4319

*Differently Abled Persons

7. Industrial Relations

Your Bank has a strong focus on industrial relations. Apart from proactively takingmeasures towards employee welfare your Bank holds constructive dialogue with Associationsand Unions for understanding and addressing the needs of our employees.

8. Care for Retired Employees

Your Bank recognises the contribution of its employees who have retired from activeservice and extends a helping hand whenever required. During the year your Bank has notonly provided financial aid for partially meeting the premium for Medical Insurance buthas also set aside funds from the Staff Welfare Fund to provide assistance to the retireesin case of critical illnesses.

9. Inculcating Learning Culture

Your Bank emphasises on the importance of skill in its work force and constantlyupgrades it through continuous learning process. Your Bank has designed inhouse e-Learningcourses for the entire team according to the nature and role of the employee's function.The completion of such courses has been made mandatory by linking them with AnnualAppraisal System of the employees.

B. STRATEGIC TRAINING UNIT

Your Bank has always been a learning organisation. To achieve this objective over theyears your Bank has developed a robust training system which caters to all categories ofthe Bank employees. It gears them not only to meet the present needs but also enablesthem to remain ahead of the learning and competitive curve. SBI's training infrastructurein terms of facilities (consisting of six Apex Training Institutes 54 State BankInstitutes of Learning and Development) content programmes and trainers is the largestand unparalled in the Indian Banking space.

Your Bank's endeavour is always to ensure a continuous planned and proactive trainingprocess for individual growth and organisational effectiveness. New techniques andmethodologies are adopted and imparted on a regular basis to establish a virtuous cycle ofteach and learn to enhance quality and efficacy of training. This will also transformemployees into knowledge workers and enable them to carry forward the Bank's initiativestowards creating customer delight and enhanced customer experience. Further in thefast-changing Banking environment in order to stay relevant your Bank is continuouslygrooming all new employees and reskilling the existing ones by adopting world class andprudent techniques in training and development.

REVAMPING THE ‘TRAINING SYSTEM' AND MAKING SBI FUTURE READY

As quality and competence of the workforce is most critical to your Bank's performanceand future growth there is a continuous need to inculcate a culture of self-learning andskill enhancement. Moreover to enhance the reach of training to more employees in auniform manner use of digital technology to transform learning is increasingly beingadopted through e-learning e-Gyanshala and Knowledge Helpline. Mass communicationprogrammes for building employee ownership and internal branding have successfully helpedyour Bank in the past to overcome challenges and will also continue to be a part of thenew dispensation. With the objective of making the Bank future ready several newinitiatives have been taken few of them are as follows:

1. Resource Optimisation

• Faculty Selection Process: The selection process for faculty / trainer hasbeen modified with the objective of selecting officials with passion and _air forteaching as well as requisite command over the chosen _eld of subject.

• Verticalisation of Apex Training Institutes (ATIs) to provide specific domainknowledge: With Banking becoming increasingly specialised a need was felt to haveinstitutes which would specialise in providing domain specific quality training in areasof Credit International Banking Risk Marketing Rural Banking IT Leadership and HumanResources among others. In this backdrop the Apex Training Institutes have beenentrusted to focus on specialised domains. Each ATI will be guided by an Advisory Councilcomprising of senior officials of your Bank and an eminent external expert to steer theway forward. An Apex Advisory Council for the whole training system has also been formed.

• Centralised Control of Learning Centres: The Learning Centres have beenrenamed as "State Bank Institute of Learning & Development" (SBILD). TheseILDs provide short duration role based capsule programs for certifications.

2. Capacity Building

• Taking Classroom to Desktop - e-Gyanshala: To assist your Bank's operationalworkforce in their daily functioning a google like search engine - e-Gyanshala has beendeveloped for providing real time on-line support through various help documents which canbe emailed and printed.

• E-learning: To inculcate self-learning your Bank continues to invest in itse-learning portal to develop e-learning courses on all relevant topics with in-builtopportunity of self-assessment and certification through tests.

• Certification Programmes for Capacity Building: The banking Industry iswitnessing change at an unprecedented and relentless pace. It therefore becomes imperativethat your Bank's workforce is abreast of the changes and equipped with latest knowledgeand operational guidelines for effectively discharging their duties. Your Bank is thefirst Bank to roll out this initiative as per RBI directives in all areas in associationwith external accredited agencies including Forex Operations (IIBF) Treasury Operations(IIBF) Risk Management (IIBF) Accounts & Audit (NIBM) and Credit Management(Moody's).

• Launch of Moody's Certification: With the objective of Capacity Building inthe area of Commercial credit your Bank launched Credit Certification programme inassociation with Moody's Analytics on 10th October 2017.

• Role Based Grade Level Certifications for Employees: All roles in your Bankare being divided in over 40 major categories and role manuals for certifications havebeen developed by the ATIs for each of these categories to ensure quality and uniformity.All employees up to Assistant General Manager grade will be required to do role specificcertification. This will also ensure that all employees attend at least one trainingduring FY2019.

• Institutional Training for Skill Development: While the ATIs would beimparting domain specific specialised training programmes related to job families SBILDswill be providing role-based trainings in a uniform manner across locations.

• Leadership Development: Your Bank has set up the new state-of-the-art‘State Bank Institute of Leadership' in Kolkata which has become operational on 23rdSeptember 2017. Originally named as State Bank Institute of Management it has beenrechristened to focus on Leadership Development in the changing paradigm. SBIL has beenlaunched as a _agship institute for training senior executives in the BFSI sector andenvisioned as a centre of global excellence with world class infrastructure. The facilitywill be used for enhancing the Leadership Skills of senior executives of SBI/BFSI sectorin collaboration with reputed institutions (in India and abroad).

In addition your Bank is engaging external faculty and subject matter experts apartfrom its senior executives selected as Guest Faculty. Engaging such external faculty fromreputed universities and business schools will not only make participants aware of thebest practices in leadership and management across the world but will also equip themwith contemporary managerial and leadership knowledge and skills.

• National Pool of Trainers:

Your Bank is associated with retired officers who have domain knowledge requisitecommunication skills for imparting knowledge and a _air for teaching.

• Participants Trained through ATIs/SBILDs: During FY2018 over 193994 SBIemployees have received at least one training (excluding multiple trainings).

• Agradoot: This mass communication programme is conducted for all sub-staffmembers. Under this programme in FY2018 43275 subordinate staff constituting 94% oftotal subordinate staff (including subordinate staff of e-ABs) were covered.

3. Honing Skills Of Leadership

• Comprehensive Development Plan for Probationary and Trainee Officers: Toensure proper onboarding of new entrants and imparting of comprehensive training thetraining policy for Probationary and Trainee Officers has been revised to facilitatecontinuous learning.

• Competency Assessment and 360 degree Feedback for Leadership Development: Aleadership competency framework helps in de_ning the knowledge and skills required foreffective leadership. Your Bank has a prede_ned leadership competency framework for itstop executives detailing the desired competencies and proficiency level for each grade.All TEG officials are being taken through the Assessment Process to identify theirdevelopmental areas.

4. Marketing of Training

• Marketing of Training Capacity to other Banks and Undertakings:

Spare capacity at ATIs and SBILDs would get created once our proposed digital andstructured training interventions viz. e-Gyanshala e-learning and Certificationprogrammes are fully implemented. This surplus capacity is proposed to be used for revenuegeneration from other Banks and undertakings .

• Marketing of e-lessons: Your Bank's generic e-lessons which have a hugedemand due to its rich content is also proposed to be marketed to other Banks in India andabroad.

5. Research

A dedicated research wing is being set up at SBIL Kolkata for high end qualityresearch focused on banking and financial services in the areas across managementdiscipline and _ntech.

6. Transition To Retirement

Your Bank conducts this programme for the senior executives of the Bank on the eve oftheir retirement. This is to equip and orient them with the change and enable them to leada happy and satisfying second innings after having served the Bank for long years.

2. INFORMATION TECHNOLOGY

Your Bank is a strong proponent of leveraging information technology to deliverconvenience to its customers. Your Bank has been offering innovative and cutting-edgeproducts to its customers with the objective of enabling banking transactions at anytimeand from anywhere.

Digitalisation and excellence in operations has been core to your Bank's strategy inproviding convenience to customers. It has resulted in a reduction in turnaround time andextended benefits to your Bank's customers.

A. INTERNET BANKING

Internet Banking solutions cater to the various payments fund-transfers e-Tenderinge-Auction and bulk payments related requirements of the Government/ PSUs/ Large and MediumCorporates as well as for Retail Internet Banking (RINB) customers. This channel hasenabled more than 159 crore transactions during FY2018.

Internet Banking Users (No. in lakh)

FY2013 FY2014 FY2015 FY2016 FY2017 FY2018
130 177 220 263 327 479

Some of the new features launched in Net Banking in FY2018 are as under:

ABC E-procurement: White Label e-Tendering Portal integrated with MOPS

CFMS Andhra Pradesh Integration (SBMOPS GBSS and RBI for e-Kuber)

CPWD Integration Settlement and Refunds

Payment Integration with GEM (Government e-Market Place)

PPF Account Nominee display through INB

e-Mail Alerts for INB transactions-Retail

MySBIWorld (Integration with Credit Cards Mutual Funds) for Migration fromElectra ACS to Bill Desk ACS for Maestro Mastercard and Prepaid card

Integration with GSTN and reporting of transactions to FRT-TAX Engine ondaily basis:

- Beneficiary addition threshold count increased from 1 to 3 per day for retailcustomer.

- Multicity cheque book issue for CA in INB

- Option of 20 leaves cheque books through INB

B. ATM

Your Bank is building momentum and embracing change for transforming India through thefollowing initiatives:

Samsung Pay participation for Token Service - Tap and Go Payment wasintroduced. It is secured as Tokenised PAN is stored on mobile.

INTOUCH Instant Card Issuance Services for SBI Nepal and MauritiusCustomers.

Branches facilitated with Debit Card Management System (DCMS) supportfunctions for addressing customer concerns with respect to debit cards.

Bank issued over 39.50 crore debit cards with approximately 26 croreactively used debit cards till 31st March 2018.

C. "YONO" (YOU ONLY NEED ONE)

YONO (You Only Need One) is one of the most ambitious path-breaking secure digitaloffering of State Bank of India which was launched on 24th November 2017.

D. CUSTOMER RELATIONSHIP MANAGEMENT (CRM) SOLUTION AND PROJECT IMPACT

The entire project consists of seven releases for CRM (covering Sales Service andmarketing modules) development of IMPACT platform CRM for FOs and implementation ofother solutions (MDM DLP SAS Analytics CRM e-Learning Solution etc.)

The key activities completed during the year are as follows:

Lead modules for retail (PBU REHBU SME Agri MCS NRI) and corporatebusiness segments (CAG & MCG) rolled out

e-CRM Learning tool deployed and integrated with Gyanodaya

Customer 360 for Retail CAG and MCG rolled out

Informatica Master Data Management (MDM) went live with Customer 360; MDMwill hold master data of Customer Geography Product and Service

Non-Financial Service (NFS) request module enabled in CRM; 24 differenttypes of service requests can be lodged and tracked through CRM

Deceased claim settlement request can also be lodged and tracked through CRM

Complaint Management System went live for 13 FOs

Data Loss Prevention (DLP) agents deployed in Domestic and Foreign Offices

Work in progress towards CRM roll out for contact centre and complaintmanagement as part of Service Module

Automation of Service Request processing envisaged with integration of CBSand CRM and handling of service requests by CPCs in coming months

E. FINANCIAL INCLUSION & GOVERNMENT SCHEMES (FIGS)

Some of the key developments of FY2018 are as under:

Development of SAP for Corporate Customers to facilitate acceptance ofpayment based on Aadhaar Number to Non - Individual / Corporate Merchants like PetroleumBanks Chain Stores Malls and Indian Railways.

Modification in RD STDR in BC Channel to enable the closure of RD STDRavailable at BC Channel.

Functionality for Referral Code (PF number of staff/ BC Code or AadhaarNumber) Capture from Aadhaar Pay App.

Customer Enrolment through eKYC for all States except Assam Meghalaya andJammu & Kashmir and minor customers under liberalised KYC product.

Mini ATM a new service for Mobile seeding introduced for both non-FI and FIcustomer enabled.

Mini ATM a new service for Aadhaar linking through Kiosk for both FI andNon FI customers introduced by using Mini ATM.

F. CORE BANKING DEVELOPMENT

During the year your Bank's key developments are as under:

Exim Enterprise Edition rolled out at Branches for Trade Finance.

Changes for regulatory compliance like GST FATCA/CRS Aadhar Linking toaccounts CKYC introduced to reduce efforts and paperless banking.

Electoral Bond made available at identified branches.

Merger activity of Associate Bank with SBI completed successfully. Aftermerger your Bank has around 42.42 crore customer base in over 24000 branches.

G. OPERATIONS AND TECHNOLOGY SUPPORT

Post-merger there was a necessity to rationalise operations and to mergebranches/offices located in close proximity to strategic locations within a reasonabletime frame so that your Bank may start reaping the benefit of merger.

With this objective bulk merger of branches was scheduled on various dates and 1805branches and 244 admin offices were rationalised. This is expected to reduce operatingcost to the tune of

Rs. 1099 crore in a year.

To facilitate geographical distribution of pensioners your Bank has set up 16 CPPCs atall Local Head Office Locations and one dedicated CPPC for Defence pensioners atAllahabad.

Various facilities provided to pensioners are as under:

Submission of Life Certificate at any branch or digitally as per pensioner'sconvenience

SMS to pensioners containing details of pension after credit of pensionevery month

Pension slips can be generated from any branch through Internet bankinge-mail and Samadhaan App

Helpline facility is available at all CPPCs

Arrear calculation sheet provided to pensioners after every revision

For registering complaints the following can be done:

- Pensioner can send an SMS "UNHAPPY" to 8008202020

- Connect with the Bank's Contact Centre at Toll Free No. 1800110009 which is available24x7

- Contact Designated Nodal Officer at all LHO Centre

Some of the key highlights for FY2018 were:

Successful revision of pension for Defence pensioners under OROP scheme

Payment of arrears to Defence pensioners after de-linking of qualifyingservice

7th CPC revision completed for over 38.50 lakh pensioners of variouscentral state and autonomous body categories

Successful merger of pension data of Associate Banks comprising over 9.5lakh pensioners

H. OPERATIONS AND PAYMENT SYSTEM GROUP

Prepaid Cards: Your Bank is leveraging its Prepaid cards solution to provideAutomated Fare Collection (AFC) facility to upcoming Metro projects.

Funds Transfer and Settlement: The volume (number) of outward fund transfersthrough NEFT increased by 37.74% to 316.39 million during FY2018 compared to 229.70million in FY2017. Your Bank has established itself as a leader in NEFT with a marketshare of 15.19% as of 31st March 2018 (as per latest data by RBI). The volume(number) of outward fund transfers through RTGS increased by 46.39% to 16.25 millionduring FY2018 compared to 11.10 million in FY2017. In RTGS your Bank maintained a marketshare on 13.36% as on 31st March 2018 (as per latest data by RBI).

The volume (number) of messages sent through SWIFT increased by 15.64% to 3.03 millionduring FY2018 compared to 2.62 million in FY2017.

I. INNOVATION PROGRAM

Some of the important IT-Innovation projects and activities undertaken by your Bank areas follows:

• Intrapreneurship Scheme: Your Bank is encouraging employees to undertakeinnovative projects in the same way as an Entrepreneur. Your Banks developed ‘SBIIntelligent Voice Assistant – SIVA' which is based on Artificial Intelligence (AI)Machine learning (ML) and Natural Language Processing (NLP).

• Start-up Engagement Program: Products/solutions from Fin-Tech start-upswhich are based on

Emerging/ Niche technologies and are useful for the Bank are procured. During the year6 startups have been engaged. In some cases use case evaluation is being undertaken.

• Hackathons: During the year your Bank conducted three end-to-end Hackathons(Idea submission till Working prototype submissions) to secure solutions for YONO WealthManagement and CMP across themes such as Facial Recognition Voice based authentication/chatbot Signature Recognition Mandate Registration process automation Automated realtime customer identification using AI/ ML/ Cognitive tech/ IOT/ Beacons and others.

J. IT SPECIAL PROJECTS III

During the financial year Quick Photo debit Card facility was made available to allSBI customers for getting their debit Card printed at any of our sbiINTOUCH branches. Inaddition sbiINTOUCH branches were launched at three overseas centres of Nepal(Kathmandu) Maldives (Male) and Mauritius during the financial year.

During FY2018 onboarding facility and OTP through email for NRI customers; and SecureOTP for all transactions have been provided in Wealth Management Application. Further forbetter monitoring of performance of SWAYAM Barcode based Passbook printing kiosks atvarious levels SWAYAM Transaction and Health Dashboard have been deployed.

Branch Darpan a web-based application has been made operational in the FY2018 whichprovides self-assessment for the Branches on various parameters/ aspects of CustomerDelight including infrastructure ambience cleanliness display of notices andsubsequent monitoring by Controllers at various levels.

K. ANALYTICS

The future of Banking business is data driven and SBI with its mammoth database haspotential to reap the benefits.

Some of the major works carried out by Analytics Team during FY2018 are listedbelow:

1. Cost Efficiency

To improve the CIR of the Bank Analytics Team has completed few projects whichare:

Rationalisation of currency chests

Cost per transaction across various digital channels

Performance analysis of SBI POS Machines

Identification of Mini Currency Administration Cell (Mini-CACs)

2. Business Opportunities

Churn Prediction Model for Current Accounts

Propensity Model for Loans to (SSBL & Mudra)

Churn Prediction Model for HNI Customers

3. Risk Management

Identification of Shell companies

4. Innovation

Downtime and reduction via ATM Fault Prediction

Tweet Classification

Employee Search Engine

Collaborative Project with BU to increase Cross-selling Income

L. BUSINESS INTELLIGENCE

Business Intelligence is core of any business and Business Intelligence Department atGITC also plays a pivotal role. Your Bank's Business Intelligence Department has made dataavailable at right time for business decisions through various reports and dashboards.

For operational convenience and control a number of new dashboards have been hosted byBID on mobile devices as well as on desktops. Latest BI tools are being procured toimprove visualisation and ease of use.

M. OFFICE365

Office365 provides a productivity suite of applications for the employees of your Bank.All State Bank users were migrated on Office365 platform in the month of September 2017.This has enabled employees to access the Banks email and other services like one DriveSkype and others from anywhere reducing the dependency on office desktop.

The Office365 suite of application has replaced the old email solution in your Bank(EMS) and also provided services like OneDrive for business which solves the documentssharing problem among employees for better collaboration. Microsoft Teams provides anintegrated virtual workplace to the employees which will increase communication andcollaboration among the departments and teams on a single platform.

N. SOCIAL MEDIA

Your Bank's social media presence was established in November 2013 and its socialmedia strategy has come a long way in last few years. Your Bank has been consistentlyranked number one globally among Top 100 Banks using Social Media by The Financial Brandin their list of ‘Power 100 Ranks'.

Taking cue from various interactions on social media focus has been kept on creatingcontact of customer's choice be it tutorial videos on our various digital productsimportant announcements security tips for using digital products or tax saving options.

Your Bank's Twitter handle has featured on Brand Equity's Twitter Advertising Indexseven times during this financial year. SBI was the first Indian bank to achieve 100Million views on YouTube and 1.5 million views on Quora. Your Bank has also focused oncreating content for the new age professionals present on LinkedIn and is one of the mostengaging Indian banks on the platform. This year the official pages on Instagram andFacebook started making use of the ‘stories' feature to engage the audience.

O. COMPLAINT MANAGEMENT DEPARTMENT (GITC)

Complaint Management Department (CMD) at GITC handles customer complaints lodged inComplaint Management System (CMS) and also complaints received through e mails relating toAnytime channels including Debit Card Transactions (ATM/POS/PG); Prepaid Card Transactions(ATM/POS/PG); INB (Corporate & Retail INB) Transactions; Mobile Banking Transactions -SB Anywhere State Bank Buddy and UPI; AEPS (Debit Card Transactions) and SBI E-payTransactions.

The objectives of the department are as follows: a. To handle and resolve thecomplaints within prescribed TAT. b. Analyse the reasons for complaints and suggestremedial measures. c. Coordination with contact centres of SBI other bank's complainthandling teams and NPCI to ensure effective handling of complaints.

P. IT SPECIAL PROJECT II

Oracle Financial Services Analytical Application (OFSAA): The key metrics which de_nesthe coverage of project consists of the following:

Consistent and Integrated delivery across 22 modules

With insights of more than 650 OBIEE reports

Covering 10 departments in risk and finance

Covering more than 250 internal stakeholders

Covering 500 million accounts

Across 23500 branches

Spread over 27 countries

Through more than 15 sources of data

List of IT - Awards received during FY2018

CII Award for Customer Obsession 2016 1. Order of Merit Award for Banking
Events.
2. Accelerator (BEDA_T+O)
Skoch Award 1. Order of Merit Award for Banking
Events Data
2. Accelerator(BEDA_T+O)
ABF Retail Banking Awards 2017 Debit Card Initiative of the Year – India
IDRBT Banking Technology Excellence 1. Best Bank Award for Use of
Awards for the year FY2017 Technology for Financial Inclusion
Among Large Banks
2. Best Bank Award for Electronic
Payment Systems among Large
Banks
CIO 100 by IDG Best CIO
CSI 1. Best CIO of the year
2. Best CISO of the year 2017
3. Best Bank in terms of
Implementations of Cognitive
Technologies
ASSOCHAM Technology Award Emerging technology award
SKOCH AWARD Technologies for Growth 1. 5 Order of Merit
Awards 2017 2. 3 Gold
3. 2 Platinum
4. 1 Best Technology Bank
FINNOVITI 2018 Best Innovative Product Award
IBA Banking Technology Conference 1. Best Technology Bank of the Year
Awards FY2017 (Large Category Bank)
2. Most Innovative Project using IT
(Emotion Tracker)
3. Best Financial Inclusion Iinitiatives
4. Runner up- Best use of Digital and
Channels Tech
ET NOW BFSI (Banking Financial Services 1. Banking
& Insurance) Awards 2018 2. Best CIO (Individual Category)

3. RISK MANAGEMENT

A. RISK MANAGEMENT OVERVIEW

Risk Management at your Bank includes risk identification risk assessment riskmeasurement and risk mitigation and its main objective is to minimise negative impact onProfitability and capital.

Your Bank is exposed to various risks that are an inherent part of any bankingbusiness. The major risks are credit risk market risk liquidity risk and operationalrisk which includes IT risk.

Your Bank has policies and procedures in place to measure assess monitor and managethese risks systematically across all its portfolios. Your Bank is amongst the leaders toundertake implementation of the Advanced Approaches under Credit Market and Operationalrisk. Your Bank has also undertaken the Enterprise and Group Risk Management Projectswhich aim to adopt global best practices. The projects are being implemented with supportfrom external consultants.

RBI Guidelines on Basel III Capital Regulations have been implemented and your Bank isadequately capitalised as per the current requirements under Basel III. An independentRisk Governance Structure in line with international best practices has been put inplace in the context of separation of duties and ensuring independence of RiskMeasurement Monitoring and Control functions. This framework visualises empowerment ofBusiness Units at the operating level with technology being the key driverenabling identification and management of risk at the place of origination. The variousrisks across Bank and the SBI Group are monitored and reviewed through the Executive LevelCommittees and the Risk Management Committee of the Board (RMCB) which meets regularly.Risk Management Committees at Operational unit and Business unit level are also in place.

1. Credit Risk

Credit Risk is de_ned as the possibility of losses associated with the diminution inthe credit quality of borrowers or counter-parties from outright default or from reductionin portfolio value. Credit Risk emanates from a bank's dealings with an individualnon-corporate corporate Bank financial institution or sovereign.

Mitigation Measures

Your Bank has put in strong credit appraisal and risk management frameworks in placefor identification measurement monitoring and control of the risks in credit exposures.Industrial environment is scanned researched and analysed in a structured manner by adedicated team for deciding your Bank's outlook and growth appetite for each of theidentified 39 industries/sectors which constitute about 70% of the Bank's total domesticexposure. Risks in these sectors are monitored continuously and wherever warranted theindustries concerned are reviewed immediately. Impact of events like rise in Crude oilprices Profitability of telecom majors power sector reforms RERA implementation Gems& Jewellery the upheaval in commodity prices to name a few were analysed andappropriate responses to these situations were strategised by your Bank to mitigatepossible risks. Exposure to sensitive/ stressed sectors like Real Estate/Telecom arereviewed at regular intervals. Sectors like Power Telecom Iron & Steel Textileswhich are going through a challenging phase are watched continuously and analysis of newdevelopments are shared with the business groups to enable them to make informed creditdecisions. Knowledge sharing sessions are conducted for the benefit of the operating staffat various levels.

Credit rating thresholds for each industry are decided on the basis of the outlook.Your Bank uses various internal Credit Risk Assessment Models and scorecards for assessingborrower wise credit risk. Models for internal credit ratings of the borrowers have beendeveloped in-house. They are reviewed through cycles of comprehensive validation and backtesting frameworks.

Your Bank has adopted an IT platform for credit appraisal processes through a LoanOriginating Software/Loan Lifecycle Management system (LOS/LLMS). Models developed by theBank are hosted on these platforms which are interfaced with CIBIL and RBI defaulter'slists.

In order to focus on capital conservation and maximisation of return on capital yourBank has introduced Risk Based Budgeting (RBB). Risk sensitive return on capital ismeasured based on Return on Credit Risk Capital (RoCrC). Achievement of the budgetedadvances level are subject to scrutiny under the specified levers. Risk Adjusted Return onCapital (RAROC) framework has been implemented from July'2015. The Customer level RAROCcalculation has also been digitised. Further behavioural models for monitoring andscoring the retail borrower performance have been developed and hosted on Credit Risk DataMart. Your Bank has procured the ORACLE "OFSAA" platform for the Credit RiskManagement System and the implementation of the system has been initiated with theshortlisted System Integrator.

Your Bank has put improved mechanism in place to manage Credit Concentration Risk byway of risk sensitive Internal Prudential Exposure Limits framework for single as well asgroup borrowers. These limits are _xed on the basis of the internal risk rating of theborrower. This framework is one step ahead of the regulatory prescription of PrudentialExposure norms which is ‘one size _ts all' in nature. These exposure norms aremonitored regularly at a de_ned periodicity.

Your Bank conducts Stress Tests every half-year on its Credit portfolio. StressScenarios are regularly updated in line with RBI guidelines industry bestpractices and changes in macro economic variables.

RBI has allowed your Bank to participate in the parallel run process for FoundationInternal Ratings Based (FIRB) under the Advanced Approaches for Credit Risk. The dataunder parallel run of FIRB is being submitted to RBI. Models for estimation of Probabilityof Default (PD) Loss Given Default (LGD) and Exposure at Default (EAD) are hosted inCredit Risk Data mart for computation of IRB capital. Independent Risk Advisory (IRA)launched last year to examine Medium and High value credit proposals has been furtherstrengthened to increase the coverage.

2. Market Risk

Market Risk is the possibility of loss that Bank may suffer on account of change invalue of its trading portfolio on account of market variables such as exchange rateinterest rate and equity price among others.

Mitigation Measures

Your Bank's market risk management consists of identification and measurement of riskscontrol measures monitoring and reporting systems.

Market risks are controlled through various risk limits such as Net Overnight OpenPosition Modified Duration PV01 Stop Loss Upper Management Action Trigger LowerManagement Action Trigger Concentration and Exposure Limits.

Your Bank has Asset class wise risk limits for its trading portfolio and monitors thesame on an ongoing basis.

Currently market risk capital is computed under the Standardised Measurement Method(SMM). Your Bank has submitted Letter of Intent to the Reserve Bank of India for migrationto Internal Models Approach (IMA) under the Advanced Approaches for market risk.

Value at Risk (VaR) is a tool used for monitoring risk in your Bank's tradingportfolio. Enterprise level VaR of the Bank is calculated on a daily basis and also backtested daily. The Stressed VaR for market risk is also computed on a daily basis. The VaRmethodology is supplemented by conducting quarterly stress tests of the trading portfolio.

3. Operational Risk

Operational Risk is the risk of loss resulting from inadequate or failed internalprocesses people and systems or from external events.

Mitigation Measures

Key elements of your Bank's Operational Risk Management Policy among others includeongoing review of systems and controls creation of awareness of operational riskthroughout the Bank timely incident reporting enhancing operational risk awarenessthrough RAW (Risk Awareness Workshop) improving early warning information throughimplementation of Key Indicators (comprising of Key Risk Indicators (KRIs) Key ControlIndicators (KCIs) and Key Process Indicators (KPI)) the resolution of risk issues byeffectively tracking and follow- up of outcomes of assessment assigning risk ownershipaligning risk management activities with business strategy. All these components ensurebetter capital management and improve quality of Bank's services/ products/ processesbesides ensuring compliance with regulatory requirements.

RBI has granted In-Principle approval to your Bank (on a solo basis) to migrate to AMA(Advanced Measurement Approach) for computation of operational risk capital charge onParallel Run basis.

For FY2018 your Bank on a stand-alone basis had assigned capital for Operational Riskas per Basic Indicator Approach (BIA). Capital charge as per AMA has also been calculatedas part of Parallel Run.

Your Bank Celebrated Risk Awareness Day on 1st September. Risk culture isbeing embedded through training to staff at all levels through e-learning lessons.

4. Enterprise Risk

Enterprise Risk Management aims to put in place a comprehensive framework to managevarious risks and alignment of risk with strategy at the whole Bank level. Itencompasses global best practices such as Risk Appetite Material Risk Assessment and RiskAggregation among others.

Mitigation Measures

As part of your Bank's vision to transform the role of Risk into a Strategic functiona Board approved Enterprise Risk Management (ERM) Policy is in place.

With an objective of maintaining a sound risk pro_le your Bank has developed a RiskAppetite Framework incorporating limits for major risk metrics. For promotion of a strongrisk culture in the Bank Risk Culture Framework is being operationalised in a phasedmanner.

Your Bank conducts a comprehensive Internal Capital Adequacy Assessment Process (ICAAP)exercise on a yearly basis with respect to adequacy of Capital under normal and stressedconditions. The Pillar 2 risks such as Liquidity Risk Interest Rate Risk in Banking Book(IRRBB) Concentration Risk and others along with the Pillar 1 risks such as CreditMarket and Operational risks are covered under ICAAP.

5. Group Risk

Group Risk Management aims to put in place standardised risk management processes inGroup entities.

Mitigation Measures

Policies relating to Group Risk Management Group Liquidity and Contingency FundingPlan (CFP) Arm's Length and Intra Group Transactions and Exposures are in place.

Monitoring of consolidated Prudential Exposures and Group Risk components is also beingdone regularly. A quarterly analysis of risk-based parameters for Credit Risk MarketRisk Operational Risk and Liquidity Risk among others is presented to theEnterprise & Group Risk Management Committee (EGRMC)/ Risk Management Committee of theBoard (RMCB).

The Group Internal Capital Adequacy Assessment Process (Group ICAAP) document includesan assessment of identified risks by Group entities internal controls and mitigationmeasures and capital assessment under normal and stressed conditions. All Group entitieswhere SBI has 20% or more stake and management control including Non-banking entitiescarry out the ICAAP exercise and a Group ICAAP Policy is in place to ensure uniformity.

6. Basel Implementation

Your Bank has been identified as D-SIB by the Regulator and has to keep additionalCommon Equity Tier 1 (CET1) 0.60% of RWAs applicable from 1st April 2016 in aphased manner and it will become fully effective from 1st April 2019. YourBank has also started maintaining Capital Conservation Buffer (CCB) in a phased manner andwill reach 2.5% by 31st March 2019.

Your Bank has been declared as the Winner of ‘Golden Peacock Award for RiskManagement' for the year 2017.

B. INTERNAL CONTROL

Your Banks' internal audit function evaluates effectiveness of controls and theadherence to internal processes and procedures. The internal audit function undertakes acomprehensive risk based audit of all operating units of your Bank in line with regulatoryguidelines relating to Risk Based Supervision. Internal audit in your Bank is independentenjoys sufficient standing in the Bank and is headed by a Deputy Managing Director. TheInternal Audit (IA) function works under the guidance and supervision of the AuditCommittee of the Board.

Keeping pace with rapid digitalisation your Bank has initiated technology driveninterventions in conducting various audits and moving towards automation in your Bank'saudit processes. Some key initiatives include the following: a) System-based off-sitetransaction monitoring and Concurrent Audit of business units to ensure continuousmonitoring of controls. b) Early Review of sanctions to assess quality of loans of Rs. 50lakh and above. c) Web based RFIA (Risk Focused Internal Audit) which is _exible scalableand expandable with enhanced level of automation. d) Online self audit by branches forself-assessment by branches and vetting by controllers. e) Audit _ndings are madeavailable on MIS dash board on T+1 basis to facilitate identification of concerns andmonitoring of compliance by Management.

ii. Your Bank has adopted the process of Risk Focused Internal Audit (RFIA) whereinaudit prioritisation is decided based on assessment of risk in various activities andbusinesses conducted by the Bank.

iii. As part of RFIA IA Department conducts various audit viz. Credit AuditInformation Systems Audit Home Office Audit (audit of foreign offices) Concurrent AuditFEMA Audit Audit of Outsourced Activities of the Bank Expenditure Audit and complianceaudit. It also undertakes Management Audit of business verticals to assess their strategiceffectiveness.

Risk Focused Internal Audit (RFIA)

IA Department undertakes a critical review of the entire operations of auditee unitsthrough RFIA an adjunct to Risk Based Supervision as per RBI directives. The domesticbranches have been broadly segregated into three groups (Group I II & III) on thebasis of business pro_le and risk exposures. During FY2018 IAD has audited14638 domesticbranches/BPR entities under the RFIA.

FEMA Audit

FEMA Audit of branches categorised as authorised dealers is conducted by auditofficials who are well versed with Foreign Exchange Business and FEMA

/ RBI guidelines. During the FY2018 430 auditee units were covered under FEMAAudit.

Credit Audit

Credit Audit aims at achieving continuous improvement in the quality of CommercialCredit portfolio of the Bank through critically examining individual large commercialloans with exposures of

Rs. 10 crore and above annually. Critical accounts with exposure of Rs. 100 crore andabove are reviewed at Half-Yearly intervals. The Credit Audit System also providesfeedback to the Business Units by way of warning signals about the quality of advanceportfolio in the unit and suggests remedial measures.

Early Review of Sanction (ERS – Large Loans)

Audit in high value credit area has an off-site review machanism (Early Review ofSanction – Large Loans) of all the pre-sanction and sanction process of individualadvances of Rs. 5 crore and above within 3-6 months of sanction / enhancement / renewal.ERS has been integrated with Loan processing software for online review submission of ATRand monitoring by controllers.

Early Review of Sanction (ERS – Small Loans) was introduced to reviewsanctions of more than Rs. 50 lakh up to

Rs. 5 crore to capture the critical risks in the proposals sanctioned at an earlystage and apprise the Controllers of such risks for mitigation thereof.

Information System and Cyber Security Audit

All Branches are subjected to Information System (IS) Audit to assess the IT relatedrisks as part of the periodic audit. IS Audit of centralised IT establishments is carriedout by a team of qualified officials/ outside experts. During the FY2018 IS Audits of 86centralised IT establishments were conducted. In line with the RBI guidelines on ensuringCyber Security of the IT System of the Bank we have initiated the process of conductingCyber Security audit from the yerar 2017-18.

Foreign Offices Audit – Home Office Audit

During the FY2018 Home Office Audit was carried out at 20 foreign offices. ManagementAudit was completed at one Representative office and one Subsidiary.

Concurrent Audit System

Concurrent Audit system is essentially a control process integral to the establishmentof sound internal accounting functions and effective controls. Concurrent Audit coversyour Bank's Advances and other risk exposures as prescribed by the regulatory authority.Concurrent Audit System has been revamped by introducing a web-based solution.

Off-Site Transaction Monitoring System (OTMS)

As part of our initiative towards continuous monitoring of controls Off-SiteTransaction Monitoring System (OTMS) a web based solution was introduced to furtherstrengthen the transaction audit to capture control gaps without much loss of time andtake corrective actions. At Present 37 types of exceptions are being monitored and _aggedto the branches for verification by them. The exceptions are periodically reviewed andenlarged depending upon the need and certain triggers.

Legal Audit

Legal Audit was conducted to cover all loan and Mortgage related documents of highvalue loans of Rs. 5 crore and above. During the FY2018 Legal Audit has been completed in11100 accounts.

Audit of Outsourced Activities

Audit of Outsourced activities is conducted to provide reasonable assurances thatadequate systems and procedures are in place to mitigate legal financial and reputationalrisks that may arise on account of outsourcing of financial and IT related activities tothird parties. During FY2018 657 audits have been conducted covering 57 activities whichincludes ATM services Corporate BCs Recovery & Resolution agents Doorstep bankingCheque printing etc. Total No. of 537 vendors have been covered during the year.

The Bank has engaged the services of 58000 individual BCs and CSP under financialinclusion plan who are being audited and during FY2018 29038 such audits wereconducted.

Management Audit

Management Audit covers business verticals administrative Offices / departments andexamines the strategy processes and risk management practices. It encompasses CorporateCentre establishments / Circle Local Head Offices

/ Apex Training Institutions and Regional Rural Banks (RRB) sponsored by the Bank.During FY2018 38 establishments / administrative offices were audited under ManagementAudit.

C. COMPLIANCE RISK MANAGEMENT

Your Bank has been ascribing highest level of importance to Compliance Risk Managementand has taken a number of initiatives to strengthen compliance function keeping in viewthe scale and complexities of business operations. Some key initiatives are:

All products process policies are vetted from the regulatory compliance perspectivebefore they are approved and operationalized or reviewed.

A Compliance Risk Management Committee comprising of Senior Executives from BusinessVerticals and Support functions oversees all compliance related issues. The committeemeets regularly and extends necessary guidance to the all concerned in the smoothimplementation of Risk Based Supervision (RBS) of RBI and other regulatory matters.

Compliance Testing of RBI's regulations and guidelines is regularly carried out and thetesting universe is being expanded to ensure that the control mechanisms are in place tocomply with regulatory guidelines.

Compliance culture is crucial for the Bank to manage the compliance risk effectivelyand is being strengthened through various forms of communication and interactions acrossthe organization. The Bank has also created a pool of trainers capable of handlingsessions on compliance.

All of the above will help your Bank in strengthening compliance function.

D. AML-CFT MEASURES:

In order to mitigate risks arising out of non-compliance of KYC norms AML/CFTguidelines your Bank has put in place a Board approved and transparent Know Your Customer(KYC) Policy incorporating therein Bank's framework for customer acceptance customeridentification monitoring of transactions Customer Risk categorisation and reporting oftransactions to FIU-IND. The Policy has been updated and subsequent changes as and whennotified by RBI are also being circulated through e-Circular for Branches /Offices forensuring meticulous compliance of the same by all operating functionaries. A robust systemis in place containing a combination of manual as well as system enabled methodology toensure KYC compliance in the Bank.

Your Bank has allotted Uniform Customer Identification Code (UCIC) to all individualcustomers as per RBI guidelines. Periodical updation of KYC is undertaken by the bank asper RBI guidelines. E-KYC is made mandatory for account opening to strengthen its AML andKYC procedures.

A number of initiatives have been undertaken to bring greater awareness amongst Bankstaff about KYC and AML/ CFT compliances. For creating awareness of KYC Compliancee-lessons have been mandatory for all staff members. AML-CFT Day is being observed on 2ndNovember every year. Pledge has been taken on that day at all branches/processing centresand Administrative Offices. Similary 1st August is observed as KYCCompliance and Fraud Prevention Day.

Your Bank has procured a new Anti-Money Laundering solution (FICO) which is beingrolled out in Domestic and Foreign branches and will enable online screening oftransactions/SWIFT messages Risk Scoring and Transaction Monitoring to fully comply withthe regulatory requirements in India and respective geographies of Foreign Offices.

4. OFFICIAL LANGUAGE

Your Bank took innovative steps to propagate use of official language in reaching outto its 42 crore customers. The key highlights are mentioned below:

Introduction of Online Rajbhasha Roster

Your Bank has developed and introduced an online Rajbhasha Knowledge Roster for itsstaff members where they can submit details of their knowledge of Hindi.

Executives of the Bank pledged to do most of their Correspondence and Internal work inHindi on 14th of every month

All executives of your Bank pledged to do most of their correspondence and internalwork in Hindi on 14th of every month which is being regularly followed by them.

One day Hindi Workshop at District Headquarters

Your Bank's different Administrative Offices conducted one day Hindi Workshop for staffof their offices and branches starting December 2017 in the district headquarters spreadall over the country.

5. MARKETING AND COMMUNICATIONS

The Marketing & Communications (M&C) department is responsible for your Bank'sinitiatives for all brand and product marketing and public relations. The primaryobjective of this department is to optimise your Bank's efforts in promoting its productsand services adopting contemporary marketing approach to get brand prominence amongprospective customers as well as to reinforce the brand's image among existing customers.The M&C department's key responsibilities include developing and implementingintegrated marketing strategies to address business challenges of different business unitsdivisions of your Bank including Indian and overseas operations. This department comprisesof skilled professionals and domain specialists drawn from various relevant _elds ofmedia marketing communications advertising and public relations.

Your Bank took a giant leap by merging five subsidiaries and Bhartiya Mahila Bank Ltd.with itself. With this mega merger your Bank also undertook a re-branding exercise. TheM&C department under the guidance of the Bank's senior management undertook theimplementation of a brand identity refresh to energise the brand to stay relevant to theyouth as well as global audiences. While the legendary SBI monogram has been retainedcombining it with the abbreviated SBI word is the key change in the refreshed brandidentity. The monogram has been re_ned for greater clarity. The M&C department playeda vital role in the implementation of the new brand identity across the country.

Apart from the re-branding campaign the M&C department rolled another big campaign'Home Loan Balance Transfer Campaign'. The department also rolled out integrated campaignmerging products for six different festivals. Appropriate media vehicles were used for allthese campaigns.

Your Bank launched YONO – India's only comprehensive omni channel digitalplatform in November 2017. The M&C department played a key role in this launch byway of developing the go-to-market strategy and executing a comprehensive communicationsplan across multiple media including digital media.

The M&C department developed and rolled out ‘The Green Marathon' incollaboration with your Bank's sustainability department. This initiative will raiseconsciousness among the Bank's staff and public at large. This activity was conducted insix cities in two months.

As a transforming economy India is witnessing several changes across various aspects.To help build momentum for the Bank's growth alongside routine marketing activitiespromotion of the Bank's various digital initiatives will hold the centre stage. The coreresponsibility of the department will remain towards maintaining favourable brandperception of SBI among varied cross sections of the country's populace; while playing therole of a catalyst in marketing its products and services by way of appropriate marketingand communications strategy implementation.

It would be the department's continued endeavour to enable business units to strategiseand implement cost efficient marketing programs and to enhance your Bank's image amongdifferent stakeholders. Your Bank is committed towards enhancing its brand equity andaf_nity through concerted marketing initiatives.

6. VIGILANCE MECHANISM

At your Bank there are three aspects to the vigilance function – PreventivePunitive and Participative. During this year Vigilance Awareness Week was observed from30th October 2017 to 4th November 2017 with the theme "My Vision -Corruption Free India". Vigilance Department has taken initiatives for spreading thismessages through various channels during the Vigilance Awareness Week 2017 throughAlternate Channels IVR Social Media Gram Sabha by RRBs and Mass pledge at RRB's.

The concept of Whistleblower is another effective tool for Preventive Vigilance. Tohighlight any malpractices under Whistle Blower Scheme a portal has been launched by yourBank. Whistle Blower can lodge a complaint online and also monitor the progress made inthis regard. There is already a well-de_ned Whistle Blower policy in our Bank which actsas a deterrent for the employees to keep themselves away from malicious activities. Wekeep the secrecy of the whistleblower and give protection to them so that they continue tobe an effective tool against wrongdoings without fear.

Branches where certain lapses of grave nature are observed are identified andsuo-motu investigations are conducted so that possible fraudulent activities could bechecked and remedial measures are undertaken.

During FY2018 a total of 1266 cases (908 new cases) were taken up for examinationout of which 786 cases have since been concluded.

7. ASSET AND LIABILITY MANAGEMENT

Effective Asset and Liability Management (ALM) is vital for sustainable and qualitativegrowth of banks. It aims to strengthen Balance Sheet Management by constantly reviewingthe market conditions capturing the signals emanating scanning the regulatoryenvironment and initiating proactive measures for value creation.

The Asset Liability Management Committee (ALCO) of your Bank oversees the Interest Rateand Liquidity Risks reviews the components of balance sheet and sets up benchmarks forefficient management of these risks and constantly monitors them. ALCO inter alia reviewsthe Interest Rate scenarios pattern of growth of liability products credit growthmarket behaviour liquidity management and adherence to the regulatory prescriptions. ALCOsets the pricing of the liabilities and reviews at monthly intervals the Marginal Cost ofFunds based Lending Rates (MCLR) in terms of regulatory requirements. Your Bank a pioneerin introducing global best practices has transformed the process of Asset & LiabilityManagement and rolled out updated Oracle Financial Services Analytical Application (OFSAA)during the year.

In order to encourage branches to garner stable funds and assess their Profitabilitybased on cost of funds a new model for Funds Transfer Pricing based on daily averagebalances and dynamic bid/offer curves for pricing loans and deposits raised by brancheshas been implemented.

The levels of High Quality Liquid Assets (HQLA) and cash out_ows are effectivelymonitored in a highly dynamic environment. As per regulatory requirement your Bank hasstarted computing LCR on daily basis. Monitoring LCR in significant currency (US$) is alsoundertaken and reviewed by ALCO.

Studies are conducted at regular intervals to assess the behavioural pattern ofnon-contractual assets and liabilities embedded options available to customersoff-balance sheet exposures impact of probable loan losses and others. The inputs derivedtherefrom are used for effective management of on-balance sheet and off-balance sheetitems.

As part of best Risk Management practices updated Internal Policies are put in placeon ‘Deposits' ‘Whole Bank Asset and Liability Management' ‘Whole BankStress Testing of Liquidity and Interest Rate Risks' by introducing the concepts such as‘reverse stress testing'. As part of contingency planning Contingency Funding Plan(CFP) is in place and reviewed regularly.

Your Bank has adopted the advanced approach for assessing the impact on Earnings atRisk (EaR) and Market Value of Equity (MVE) with pre-de_ned tolerance limits thatdetermine the risks associated with them and enables the Management to initiateappropriate preventive steps in a likely scenario of erosion in Net Interest Income.

In line with the regulatory requirements your Bank has evolved Internal CapitalAdequacy Assessment Process (ICAAP) with robust methodology responses and an effectiveframework.

8. ETHICS AND

BUSINESS CONDUCT

Banking deals with the trust of the people. Trust calls for the highest level ofethical conduct from the Banking sector. This is the reason for creation of Ethics &Business Control Department at SBI. This department came into operation last year underChief Ethics Officer who plays a major role. Ethical conditioning empowers its humanresources and helps in distinguishing right from wrong in a particular situation.

Your Bank _rmly believes that ethical character is shaped reinforced and in_uenced bythe decisions we make every day. In this context sustained promotion of ethical awarenesswill give impetus to the overall operating culture and take the Bank to the next level bystrengthening its moral muscles. Towards this purpose best international practices arebeing learnt technology being leveraged and ethics being encouraged as a part of regularconversations at different organisational layers; and a normative sense of congruence isbeing developed across various functions in the Bank.

Your Bank has already unveiled its New Vision Mission and Values Statements after agap of almost 10 years to re_ect its contemporary persona as an agile and tech savvy bank.

9. CORPORATE SOCIAL RESPONSIBILITY

Your Bank believes that it has a solemn duty to make sustainable social change in thelives of the less fortunate and underprivileged members of the society. Your Bank alwaysplaces the interest of the common man especially the most marginalised at its core. YourBank earmarked 1% of the previous year's net Profit as the budget for CSR spend for theyear. Its CSR activities are widespread and deep-rooted and have made true difference inthe lives of thousands from the underserved and downtrodden communities. CSR is acontinuing commitment of your Bank for developing the quality of life of the community andsociety as a whole.

FOCUS AREAS

Healthcare

Education

Sanitation

Skill Development and Livelihood Creation

Environment Protection

Culture Sports and others

CSR SPEND DURING FY2018

The CSR spend of the Bank for the FY2018 stood at Rs. 112.96 crore. This is the sixthsuccessive year where your Bank's CSR spend has crossed the mile stone of Rs. 100.00crore. The sector wise spend is as under:

SUPPORTING HEALTHCARE:

National Health Policy 2017 was approved by the Government in March 2017 with anobjective to achieve highest possible level of good health and well-being. It seeks toachieve universal access to quality health care. However since long healthcare sector hasremained a thrust area for your Bank's CSR activity. Your Bank provides basicinfrastructure to improve the conditions of the common man. To deliver quality healthcareto those belonging to underprivileged and economically weaker sections of the society.Your Bank has supported large number of hospitals. The major initiatives of your Bank inhealth care sector are as under:

Ambulances and Medical Vans: Your Bank has donated Rs. 2.88 crore to over 23charitable organisations for acquiring Ambulances and Medical Vans

Health Equipment and Surgeries: Your Bank has donated Rs. 5.33 crore to over 35charitable organisations/hospitals for acquiring various medical/surgical equipment likeStress Test Machine Dialysis Machine BIPAP Ventilators Digital X-Ray MachinesArtificial limbs Automated Bio-chemistry Analysers Surgical Microscopes and RetinalEquipment. This has improved the capacity and potential of the hospitals to serve largenumber of deprived patients.

Community Outreach Programmes:

Your Bank organised camps to focus on curative and preventive healthcare for the underprivileged rural population. The areas covered are mentioned below:

Eye check-up

Cancer detection

Reproductive healthcare check-up

Basic health check-up (Blood Pressure HB and others)

Diabetes check up

Mammography for women

Cataract operations

SUPPORTING EDUCATION

Your Bank always strives to support education of weaker social group in remoteunreachable and underdeveloped area. The areas covered are given below:

Donated computers and printers to various schools

Provided water _lters for access to clean drinking water

Provided toilets to the schools

Persons with Disabilities (PwDs) were given vocational training

Donated Rs. 82 lakh for providing school buses/vehicles for transportationfacilities to underprivileged children

DRINKING WATER AND SANITATION

Your Bank is committed to the Government's mission of "Swachh Bharat" and hasundertaken several initiatives across the country including building toilet blocks;providing sanitary napkin vending machines and incinerators dumper bins and dust binsamong others. Also provision of drinking water (R.O.) and toilets in schools is beingmade.

ENVIRONMENT AND SUSTAINABILITY

Your Bank is committed to environment protection and contributes positively to reducethe carbon footprint. Responsible interaction with environment to avoid depletion anddegeneration of natural resources and maintain long term quality of the environmentis a priority for your Bank.

Your Bank has contributed Rs. 2.05 crore towards the following:

Acquiring solar power plant solar water heater and solar street lamps

Tree plantations

Maintenance of parks and gardens

Donating battery operated vehicles

SBI CHILDREN'S WELFARE FUND

Your Bank constituted SBI Children's welfare Fund as a Trust in 1983 which extendsgrants to Educational Institutions engaged in the welfare of underprivileged children likeorphans destitute and physically challenged. The corpus of the fund is made by the staffmembers and matching contribution is provided by your Bank. During FY2018 your Bank hasdonated Rs. 98 lakh to various educational institutes all across the country.

SKILL DEVELOPMENT INITIATIVES AND LIVELIHOOD CREATION

Rural Self Employment Training Institutes (RSETIs): India is one of the youngestnation in the world with more than 54% of its population below 25 years of age.Employability of the growing young demography is one of the important factors in theeconomic development of the country. The skill development initiatives support the supplyof trained manpower.

Your Bank has set up 151 Rural Self Employment Training Institutes (RSETIs) across thecountry as institution to help mitigate the unemployment and underemployment problem amongyouth in the country.

Your Bank has contributed Rs. 9.03 crore for construction of 9 RSETI buildings. Therecurring expenditure for skill development programs for youth was

Rs. 47.52 crore at 151 RSETIs of your Bank across the country.

V. SUBSIDIARIES

As a part of mission to provide the entire gamut of financial services across Indiathe State Bank Group through its various subsidiaries provides a whole range offinancial services including Life Insurance Merchant Banking Trustee Business MutualFunds Credit Card Factoring Security Trading Pension Fund Management CustodialServices General Insurance (Non Life Insurance) and Primary Dealership in the MoneyMarket.

Non- Banking Subsidiaries:

( Rs. crore)
Sr. No Name of the Subsidiary Company Ownership (SBI interest) % of Ownership Net Profit (Losses) for FY2018
1 SBI Capital Markets Ltd. 58.03 100.00 327.32
(Consolidated)
2 SBI DFHI Ltd. 131.52 *69.04 32.07
3 SBI Mutual Fund Trustee 0.10 100.00 3.83
Company Pvt Ltd.
4 SBI Global Factors Ltd. 137.79 86.18 (3.24)
5 SBI Pension Funds Pvt. Ltd. 18.00 *60.00 1.39

*Group holding of SBI is 100% in SBI Pension Funds Pvt. Ltd. (SBI 60% SBI MF and SBICapital Markets 20% each) and in SBI DFHI State Bank holding is 72.17% (SBI 69.04% aftermerger of Associate Banks and SBI Capital Markets 3.13%).

Non- Banking Subsidiaries: Joint Ventures

( Rs. crore)
Sr. No Name of the Subsidiary Company Ownership (SBI interest) % of Ownership Net Profit (Losses) for FY2018
1 SBI Funds Management 31.50 63 331
Pvt. Ltd.
2 SBI Cards & Payment 581 74 363
Services Pvt. Ltd.
3 SBI Life Insurance 621.00 62.10 1150
Company Ltd.
4 SBI-SG Global Securities 52.00 65 26
Services Pvt. Ltd.
5 SBI General Insurance 159.47 74 396
Company Ltd.
6 SBI Business Process 17.46 74 66
Mgt. Services Pvt. Ltd.*

* Name of "GE Capital Business Process Mgt. Services Pvt. Ltd." has beenchanged to "SBI Business Process Mgt. Services Pvt. Ltd."

1. SBI CAPITAL MARKETS LIMITED (SBICAP)

SBICAPs is India's leading investment bankerofferingentirebouquetofinvestment bankingand corporate advisory services to varied client base across three product groups –Infrastructure Equity Capital Markets and Debt Capital Markets. These services includeProject Advisory Loan Syndication Structured Debt Placement Mergers & AcquisitionsPrivate Equity Restructuring Advisory Stressed Assets Resolution IPO FPO RightsIssues Debt and Hybrid Capital raising.

On a standalone basis SBICAPs posted a PBT of Rs. 349.35 crore during FY2018 asagainst Rs. 312.57 crore during the FY2017 and a PAT of Rs. 244.64 crore for FY2018against Rs. 217.95 crore in FY2017. On a consolidated basis it has posted a Profit of

Rs. 327.32 crore as against Rs. 251.80 crore in the previous year.

SBICAPS declared dividend at 225% during FY2018 as against 200% in FY2017.

A. SBICAP SECURITIES LIMITED (SSL)

SSL a wholly owned subsidiary of SBI Capital Markets Limited besides offering equitybroking services to retail and institutional clients both in cash as well as in Futuresand Options segments is also engaged in sales and distribution of other financialproducts like Mutual Funds Tax Free Bonds Home Loan Auto Loan Tractor Loan amongothers.

SSL has over 100 branches and offers Demat e-broking e-IPO and e-MF services to bothretail and institutional clients. SSL currently has more than 15 lakh clients. The Companyhas booked gross revenue of

Rs. 357.56 crore during FY2018 as against

Rs. 250.35 crore in FY2017.

B. SBICAP VENTURES LIMITED (SVL)

SVL is a wholly owned subsidiary of SBI Capital Markets Limited. DFID (Department forInternational Development) has joined hands with the SBI group to set up the "NeevFund" which is being managed by SBICAP Ventures Limited. SVL is acting as the AssetManagement Company.

The Neev Fund had its Initial close on 10th April 2015 and current corpusof the Fund is Rs. 469.39 crore. Fund will be invested in Infrastructure sectors such asrenewable energy water and sanitation agricultural supply chain in 8 identified statesof India (Bihar Chhattisgarh Jharkhand Madhya Pradesh Odisha Rajasthan Uttar Pradeshand West Bengal). SVL has started earning Management Fees.

C. SBICAP (UK) LIMITED (SUL)

SUL is a wholly owned subsidiary of SBI Capital Markets Limited. SUL is positioningitself as a relationship out_t for SBI Capital Markets Limited in UK and Europe.Relationships are the business products of SBICAP.

D. SBICAP (SINGAPORE) LIMITED (SSGL)

SSGL is a wholly owned subsidiary of SBI Capital Markets Limited. SSGL commencedbusiness from December 2012. Relationships are being built with FIIs FinancialInstitutions Law Firms Accounting Firms etc. to market the business products of SBICAP.It has been specialising in marketing of Foreign Currency Bonds and securing clients forSBICAP SEC.

E. SBICAP TRUSTEE CO. LIMITED (STCL)

SBICAP Trustee Co Limited (STCL) is a wholly owned subsidiary of SBI Capital MarketsLimited. STCL commenced security trustee business with effect from 1st August2008. STCL posted Net Profit of Rs. 11.90 crore during FY2018 as against Rs. 11.68 croreduring FY2017. STCL successfully launched an Online Will Creation service for theindividuals in the name of ‘My Will Service Online'. It also launched its‘Trustee Enterprise Management System' – an integrated system to address all thetrustee related operations and thus has become the first and only Trustee Company in Indiato have full automation across all trustee related operations.

2. SBI DFHI LIMITED (SBI DFHI)

SBI DFHI Limited is one of the largest standalone Primary Dealers (PD) with a pan Indiapresence. As a Primary Dealer (PD) it is mandated to support the book building process inprimary auctions and provide depth and liquidity to secondary markets in G-Sec. BesidesGovernment securities it also deals in money market instruments non G-Sec debtinstruments etc. As a PD its business activities are regulated by RBI.

SBI group holds 72.17% share in the Company. The Company posted Net Profit of Rs. 32.07crore in the FY2018 as against Rs. 176.44 crore in the FY2017. Total balance sheet sizewas Rs. 5659.46 crore as on 31st March 2018 as against Rs. 3187.70 crore ason 31st March 2017.

3. SBI CARDS & PAYMENTS SERVICES PRIVATE LIMITED (SBICPSL)

SBI Cards and Payment Services Private Limited is a joint venture between State Bank ofIndia and the Carlyle Group wherein SBI holds 74% stake and CA Rover Holdings (An af_liateof Carlyle) holds 26% stake. SBICPSL is a NBFC and is in the business of issuing creditcards in India. During the year SBI increased its stake in the company from 60% to 74% bybuying out shares from exiting partner GE Capital.

During the FY2018 the Company's Card base has grown by 37% YoY with total number ofcredit cards reaching to a level of 62.58 lakh as at 31st March 2018. TheSpends on card witnessed a YoY growth of 73% to reach a level of Rs. 79808 crore for thesame period. The company is positioned at Rank #2 with 16.75% Spends Share and 16.42%Cards base as per RBI report for Mar'18 (Previous Year 13.06% in terms of Spends and15.34% in terms of Cards base as per RBI report for March'17) The company delivered Profitafter Tax of Rs. 363 crore for the FY17-18 (PBT of

Rs. 776 crore). This includes one off adverse impact of Rs. 219.9 crore due to changein accounting policy. Excluding the one off PBT has grown by ~30% YoY.

During the period the Company received many awards which includes:

• SBI Unnati Card wins of SKOCH Financial Inclusion Award at the 48th SKOCH Summit

• Corporate Card Team has been awarded by VISA for becoming "No. 1 CommercialCard Issuer" for VISA India

• SBI Card awarded with ‘Best Data Quality Award' in NBFC category byCIBIL

4. SBI BUSINESS PROCESS AND MANAGEMENT SERVICES PRIVATE LIMITED (SBIBPMSL)

(Formerly GE Capital Business Process and Management Services Pvt Ltd)

SBIBPMSL is a joint venture between State Bank of India and the Carlyle Group whereinSBI holds 74% stake and CA Rover Holdings (An af_liate of Carlyle) holds 26% stake.SBIBPMSL provides back end services and solutions to SBICPSL. During the year SBIincreased its stake in the company from 40% to 74% by buying out shares from exitingpartner GE Capital.

During the FY2018 the Company generated PAT of Rs. 66 crore at a YoY growth rate of41%.

During FY2018 the Company undertook following key initiatives:

• Bharat QR launched on Mobile Application to enable transactions through mobileapplication

• Instant Payment Credit functionalities made available when online payment donethrough 3rd party

• New features like Card full statement and one click Loan Flexi-pay booking arenow available on MOBILE Application

• Digital for Customers – SBI mobile app "#1 rated MobileApp

5. SBI LIFE INSURANCE COMPANY LIMITED (SBI LIFE)

SBI Life Insurance is a joint venture between State Bank of India (SBI) and BNP ParibasCardif S. A. During the year ended 31st March 2018 Initial Public Offer of120000000 equity shares of face value of Rs. 10 each of the Company at Offer Price ofRs. 700 per equity shares aggregating to Rs. 8388.73 crore (net of employee discount)through an Offer for Sale by State Bank of India and BNP Paribas Cardif S.A. of 80000000equity shares and 40000000 equity shares respectively was completed. The equity sharesof the Company were listed on National Stock Exchange Limited (‘NSE') and BombayStock Exchange Limited (‘BSE') on 3rd October 2017.

SBI owns 62.1% of the total capital and BNP Paribas Cardif S. A. holds 22% whileremaining 15.9% share is held by public. SBI Life has a unique multi–distributionmodel encompassing vibrant Bancassurance Retail Agency Institutional Alliances andCorporate Solutions distribution channels.

The Company has proven its market leadership in FY2018 with number 1 position inIndividual New Business Premium among private insurers.

The company witnessed a 30% growth in Retail New Business Premium (NBP) vis--vis theprivate industry growth of 26%. The market share of SBI Life Retail New Business Premium(NBP) among all private players as on 31st March 2018 is 21.8% vis-a-vis 20.7%for last year.

SBI Life witnessed a PAT of Rs. 1150 crore in FY2018 against Rs. 955 crore in FY2017.AUM of the Company recorded a growth of 19% at Rs. 116261 crore as on 31stMarch 2018 as compared to Rs. 97737 crore as on 31st March 2017.

Leveraging wider reach achieved through its network of 825 offices SBI Life hassystematically brought large rural areas under insurance. The Company has sold 24% oftotal policies in this segment in FY2018. A total of 649599 lives covered by the companyare from the underprivileged social sector.

Awards and recognitions received during the year include:

1. Brand of the Year 2016-17 Award in the Insurance Category by WCRC.

2. Ranked #1 (in a jointly held spot) in Customer loyalty in the Life InsuranceCategory in a survey conducted across more than 15 key cities in India according toKantar – IMRB Survey 2017.

3. Won the "DSCI Excellence Awards 2017" under category "Best Practicesfor Insurance Sector" for the year 2017 by the Jury under the Chairmanship of Mr.Pramod Bhasin Founder & Non Executive Vice Chairman of Genpact.

4. Awarded ‘India's Leading insurance Company – Life' (Private sector) at theDun & Bradstreet BFSI Summit 2018'.

5. Adjudged as one of the ‘Most Trusted Brand 2017' for the Seventh consecutiveyear by The Economic Times Brand Equity - Nielsen survey.

6. SBI FUNDS MANAGEMENT PRIVATE LIMITED (SBIFMPL)

SBIFMPL the Asset Management Company of SBI Mutual Fund is the 5th largest Fund Housein terms of Average "Assets Under Management" and a leading player in the marketwith over 7.8 million investors. SBIFMPL is the largest ETF manager in India with over 50%market share in fast growing ETF market. SBIFMPL posted a PAT of Rs. 331.03 crore duringthe year ended Mar 2018 as against Rs. 224.32 crore earned during the year ended March2017. During the current year SBI MF crossed the historic milestone of INR 2 Trillion AUMmark. The average "Assets Under Management" (AUM) of the Company during thequarter ended March 2018 were Rs. 217649 crore with a market share of 9.44% as againstthe average assets under management of Rs. 157025 crore with a market share of 8.58%during the quarter ended March 2017. The Company has a fully owned foreign subsidiaryviz. SBI Funds Management (International) Private Limited which is based at Mauritius andmanages Off- shore Fund. SBIFMPL also provides Portfolio management services (PMS) andAlternative Investment Funds (AIF). During the year the Company's gross sales throughdigital platforms crossed Rs. 10000 crore.

7. SBI GLOBAL FACTORS LIMITED (SBIGFL)

SBIPFPL has been appointed as the SBIGFL is a leading provider of factoring servicesfor domestic and international trade. SBI holds 86.18% share in the Company. The Company'sservices are especially suitable for MSME clients for freeing up resources locked in bookdebts. By virtue of its membership of Factors Chain International (FCI) the Company isable to ameliorate credit risk from export receivables under the 2 factor model.

The Company reported a PBT of Rs. 2.08 crore during the year ended FY2018 (PY –PBT Rs. 3.25 crore) & PAT (Loss) of Rs. 3.24 crore (PY – PAT Rs. 1.01 crore).Turnover for 12 months ended FY2018 is Rs. 3555 crore as compared to turnover of Rs.3047 crore in previous year (i.e. an increase of 17%). FIU as on 31st March2018 is Rs. 1276 crore as compared to Rs. 1059 crore as on 31st March2017. Turnover in EF under

2 Factor Model for 12 months ended FY2018 is equivalent to EUR 59 Mio (PY EUR 42 mio).In INR terms the EF turnover touched Rs. 452 crore for 12 months ended FY2018 as againstRs. 321 crore in previous year i.e. an increase of 41%.

8. SBI PENSION FUNDS PRIVATE LIMITED (SBIPFPL)

SBIPFPL has been appointed as the Pension Fund Managers (PFM) along with 8 others tomanage the pension corpus under National Pension System (NPS). SBIPFPL is one of the threePFM appointed by the Pension Fund Regulatory & Development Authority (PFRDA) formanagement of Pension Funds under the NPS for Central Government (except Armed Forces) andState Government employees and one of eight PFM appointed for management of Pension Fundsunder the Private Sector. The total Assets Under Management

(AUM) of the company as on 31st March 2018 was Rs. 89283 crore (YoY growthof 34%) against Rs. 66723 crore on 31st March 2017.

The Company maintained lead position amongst Pension Fund Managers in terms of AUM inboth Government and Private Sectors. The overall AUM market share in Private Sector was58% while in the Government Sector it was 35%.

The Company was adjudged winner in the "Pension Fund House Category" byOutlook Money for the year 2017. Awards by Outlook money have been adjudged to the Companyfor 3rd consecutive year in a row.

9. SBI GENERAL INSURANCE COMPANY LIMITED (SBIGIC)

SBIGIC is a joint venture between State Bank of India and IAG Australia in which SBIholds 74% stake. The cornerstone of the Company's growth aspiration is focussed on theBanca channel whilst developing other channels and products that meet business objectivesand drive Profitable growth. The Company has entered in to strategic tie-ups with threelarge car manufactures to drive growth in the Motor portfolio.

Gross Written Premium (GWP) stood at Rs. 3553 crore for FY2017-18. In the seven yearsof operation for the first time in FY2017 SBIG had achieved Profit to the tune of Rs.396 crore. The Company recorded 36.1% growth in GWP YoY against an industry growth of17.5% including crop whereas excluding Crop SBIGIC recorded growth of 24.0% againstIndustry growth of 17.1% for FY2017-18. SBIGIC has grown by 124.8% in Crop Insurance inFY2017-18 by participating in the PMFBY schemes and extending our geographies. The Overallmarket share among all general insurance companies stands at 2.35% and 5.42% among privateinsurers. The Company's market ranking is 14th in the industry and 9th among the privateplayers in FY2017-18. SBIGIC occupies 2nd position in "Personal Accident" amongprivate insurers & 4th position in the industry in FY2018. The company ranks 3rd in"Fire" among private insurers and 7th position in the industry in FY2018. Shareof health business decreased marginally from 14.3% to 13.4%. However there is a growth tothe tune of 27.1% for FY2018 against Industry growth of 22.4%.

SBI General wins the ET Best BFSI Brands Award 2018. The ISO 27001:2013 certificationawarded to SBI General for its Information Security practices. SBI General Insurance wasawarded the Bancassurance Leader award in the 7th edition of Insurance awards organisedby Fintelekt.

10. SBI SG GLOBAL SECURITIES SERVICES PRIVATE LIMITED (SBI-SG)

SBI-SG a joint venture between State Bank of India and Societe Generale with 65%holding by SBI. The Company was set up to offer high quality custody and fundadministration services to complete the bouquet of financial services offered by the SBIGroup. SBI-SG commenced commercial operations in 2010. The Company's Net Profit was Rs.26.03 crore in FY2018 as against Rs. 11.74 crore in FY2017. Accumulated Profit is Rs. 45crore.

Average Assets Under Custody in March 2018 rose to Rs. 482435 crore from Rs. 327158crore as in March 2017 while the Average Assets Under Administration were at Rs. 254089crore in March 2018 as against Rs. 183779 crore in March 2017.

SBI-SG has been rated as one of the leading custodians in India in the Global Custodianmagazine's Agent Banks and Emerging Markets Survey 2017.

SBI-SG has been rated #1 custodian in India in the Global Investor/ISF Sub-Custodysurvey for 2017.

11. SBI INFRA MANAGEMENT SOLUTIONS PVT. LTD.

SBI Infra Management Solutions Private Limited incorporated on 17th June2016 is engaged in providing real estate management services to State Bank ofIndia.

The Company commenced its pilot operations w.e.f. 8th March 2017 at sixcentres in India i.e. Greater Mumbai and Navi Mumbai Twin City Ahmadabad and GandhinagarGreater Chennai Kolkata Metropolitan area Greater Hyderabad and Delhi NCR for somebenchmark value. The Company is at present efficiently handling more than 60 projects ofconstruction/ interior/retro_tting/ purchasing/leasing etc.

After successful run of pilot projects the Company has extended all the activitiesrelated to premises and estate irrespective of value of all the six circles (situated ataforesaid six centres) and corporate centre establishment from January 2018. The Companyis also likely to expand its operations further on pan India basis by the mid of financialyear 2018-19.

12. SBI FOUNDATION

SBI Foundation was established by State Bank of India in 2015 as a Section VIII companyunder Companies Act (2013) to undertake the CSR activities of SBI and its subsidiaries ina planned and focused manner.

SBI Foundation aims to give back to the society by working towards the socioeconomicwell-being of the marginalised and vulnerable communities. Your Bank is actively workingtowards impacting people on a grassroots level across PAN India with a vision to provide‘Service Beyond Banking'.

SBI Foundation is presently working on various projects and many initiatives has beentaken to build a momentum for a transforming India by creating an inclusive developmentparadigm that serves all Indians without any discrimination on the basis of regionallinguistic caste creed religious or other barriers.

The CSR budget for FY2018 was Rs. 20 crore the grant received was Rs. 25.71 crore(including grant received from subsidiaries). SBI Foundation sanctioned 28 proposalsamounting to Rs. 49.53 crore. The total disbursement during the year stood at Rs. 27.18crore.

The CSR activities are undertaken in the following focus areas:

A. HEALTHCARE

The vast majority of rural population is deprived of basic medical facilities due tolack of healthcare infrastructure in various parts of the country. SBI Foundation iscommitted to contribute positively to United Nation's Sustainable Development Goals(SDGs)-Goal#3: Good Health and Well Being by bringing about positive changes in the livesof underprivileged sections of society by providing free access to quality healthcare.

To contribute towards improve the health scenario your Bank has undertaken thefollowing CSR projects through SBI Foundation.

a. Sishu Rakhsha: A project to curtail infant mortality rate by providingcomplete screening facilities and immediate treatment to the infants.

b. SBI Life: An initiative to prevent and control of Thalassemia diseases byfacilitating Thalassemia tests to the public.

c. Cancer Care: A project which aims to prevent and control of Breast andCervical Cancer among women.

d. SBI Darpan: This project works on mitigating damages of Sickle Cell Anaemiadiseases.

e. SBI Umeed: The objective of the program is to curtail maternal infantmortality and morbidity in expecting mothers and their infants by providing the preventivecare information through mobile call facilities.

f. SBI Eye care: This initiative aims to provide free cataract surgeries in theunderprivileged rural areas of India.

B. EDUCATION

Education is one of the most powerful and proven vehicle to bring transformationalchange in the development landscape. Education plays a vital role in improving thestandard of life of an individual and is viewed as an effective tool for bringing socialeconomic changes. Scarcity of resources and lack of infrastructure are the majorhindrances in the education sector in India. SBI Foundation is committed to contributepositively to United Nation's Sustainable Development Goals (SDGs) Goal#4: QualityEducation. Through SBI Foundation your Banks has initiated various projects as mentionedbelow:

a. Gyanshala: This is a middle school education project for urban slum children(Grade IV to Grade VIII) to provide them quality education as other privileged childrenreceive in their schools.

b. Beti Padhao Kendras: Under this initiative Beti Padhao centres were startedwith an aim to provide basic education (up to Grade V) to girl children in remote ruralareas.

c. SBI Udaan: This project works towards quality education along with ArtsCrafts and Sports development for children in slums and remote areas.

d. Shiksha Sahay: This project supports tribal school for maintaining thequality education and other basic needs.

C. ENVIRONMENT AND SUSTAINABILITY

Your Bank is committed to environment protection and contribution to reduce the carbonfootprint.

a. Waste to gold: A project that aims to motivate and develop the skills ofvulnerable youth to address waste management in the city; and develop small sustainablebusinesses for their livelihood as well. b. SBI Corbett: Under this project SBIFoundation is providing villages a sustainable waste management system and conductingtrainings of SHG Workers to provide awareness in nearby schools and hotels.

D. ARTS CULTURE HERITAGE AND OTHERS

To achieve the dual goal of preservation of culture & heritage and contribute to‘The Swachh Iconic Places' SBI Foundation has started two projects under thiscategory as mentioned below:

a) Swachh Iconic CSMT: This initiative aims for conservation and restoration ofsouth and east faade of the heritage building at Chhatrapati Shivaji Maharaj TerminusMumbai (A UNESCO World Heritage Site). b) SBI Eklavya: SBI Foundation is providingbasic sports facility to the children under ashram schools of Marathwada region ofMaharashtra.

E. DISABILITY

The vision is to enable the Persons with Disabilities (PwDs) to avail better livelihoodopportunities by market linked training and jobs in the organised sector. Therefore tosupport the PwDs your Bank has started the following projects:

a. Project Parivarthan: The initiative aims to make inclusive employment of theunderprivileged and PwDs the norm in companies by providing them market-orientedtrainings.

b. Project SBI Shravan Shakti: Under this initiative your Bank has facilitated_tment of Cochlear Implants to hearing impaired children.

c. Project Swabhiman: This project aims to provide job linked training to PwDsby establishing and running skill centres.

Flagship Programs

SBI Youth for India Fellowship program:

SBI Youth for India (YFI) is a Fellowship program initiated funded and managed by theSBI Foundation in partnership with reputed NGOs. It provides a framework for India's bestyoung minds to join hands with rural communities empathise with their struggles andconnect with their aspirations

Under the initiative SBI Foundation has partnered with the reputed NGOs engaged indevelopment work in rural areas to deploy the youth enrolling for the fellowship forconceiving and working on innovative projects. YFI has an alumni base of 184 passionatechange makers 60% of Alumni are associated with the development sector after thefellowship.

Centre of Excellence for PwDs (CoE):

Majority of persons with disabilities can lead a better quality of life if they haveequal opportunities and effective access to rehabilitation measures. There has been anincreasing recognition of abilities of persons with disabilities and emphasis onmainstreaming them in the society based on their capabilities. It was conceptualised witha goal to be a centralised support centre for persons with disabilities.

CoE primarily works on empowering PwDs through skill enhancement to make significantand measurable improvement that enables individuals to enjoy a more productive andsatisfying life by optimising their cognitive physical social and vocationalfunctioning.

CoE has conducted five inclusive training programs for employees with disabilities andtheir trainers. Seven public sector Banks participated in the training program. CoE hasalso signed MoUs with Bank of Baroda and Union Bank of India for institutionalisation ofinclusion and empowerment of employees with disabilities. CoE has set up skilling centresin various cities for placement linked skill development of PwDs.

SBI Gram Seva: India resides in its villages and for the holistic development ofthe villages SBI Foundation has adopted 10 Gram panchayats covering 50 of villages in 6states of India.

The objectives of the flagship program are: a. To link and leverage the specificgovernment schemes/services to villages (families) b. To lay emphasis on digitalisationand create awareness about online service (including online banking) c. Improve the basicinfrastructure of villages (set up computer labs community rooms and others) d. EncouragePanchayat/Village self-governance and create environment for participatory efforts by thepeople for rural asset creation and community development. e. Integrated villagedevelopment is aimed to promote education for all environment protection livelihooddevelopment digitalisation in Gram Panchayat skill development and improvement ofpreventive and primary health care in villages.

Awards and Accolades

SBI Foundation has won seven national level awards during the year for its CSRinitiatives.

Name of the Award Category
Golden Globe Tiger Award for Excellence & Leadership in CSR Best CSR Practices
Golden Globe Tiger Award for Excellence & Leadership in CSR Innovation in CSR
Golden Globe Tiger Award for Excellence & Leadership in CSR CSR Leadership Award
ET Now presents CSR Leadership Awards Best CSR Practices
ET Now presents CSR Leadership Awards Innovation in CSR
ET Now presents CSR Leadership Awards Promoting Employment for the Disabled
Bureaucracy Today CSR Excellence Awards Care of Senior Citizens
FICCI CSR Awards Appreciation Plaque in the Health Category

VI. RESPONSIBILITY STATEMENT

The Board of Directors hereby states:

i. that in the preparation of the annual accounts the applicable accounting standardshave been followed along with proper explanation relating to material departures; ii. thatthey have selected such accounting policies and applied them consistently and madejudgements and estimates as are reasonable and prudent so as to give a true and fair viewof the state of affairs of your Bank as on the 31st March 2018 and of theProfit and loss of Your Bank for the year ended on that date; iii. that they have takenproper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of the Banking Regulation Act 1949 and State Bank of IndiaAct 1955 for safeguarding the assets of your Bank and preventing and detecting frauds andother irregularities; iv. that they have prepared the annual accounts on a going concernbasis; v. that the internal financial controls had been laid down to be followed by yourBank and that such internal financial controls are adequate and were operatingeffectively; and vi. that proper system had been devised to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

VII. ACKNOWLEDGEMENT

During the year Shri M. D. Mallya and Shri Deepak I. Amin retired from the Boardw.e.f. 25th June 2017 consequent upon completion of their term. Shri SanjivMalhotra was reappointed as Independent Director u/s 19(c) of the SBI Act w.e.f. 26thJune 2017 on the Board. Shri Bhaskar Pramanik Shri Basant Seth and Shri Pravin Kutumbewere elected by the Shareholders as Directors on the Board u/s 19(c) of the SBI Act w.e.f.26th June 2017. Smt. Anjuly Chib Duggal retired from the Board w.e.f. 31stAugust 2017 consequent upon her retirement as Secretary Department of Financial Servicesand Shri Rajiv Kumar was nominated as GOI Nominee Director in her place w.e.f. 12thSeptember 2017.

Smt. Arundhati Bhattacharya Chairman retired on completion of her tenure on 6thOctober 2017 and Shri Rajnish Kumar was appointed as Chairman in her place w.e.f. 7thOctober 2017.

Dr. Purnima Gupta has been nominated by GOI as Director u/s 19(d) of the SBI Act w.e.f.1st February 2018. Shri Pravin Kutumbe resigned from the Board w.e.f. 8thMarch 2018 consequent upon his appointment as Whole-Time Member in IRDA.

The Directors place on record their appreciation for the contributions made by theoutgoing Chairman Smt. Arundhati Bhattacharya and Directors namely Shri M. D. MallyaShri Deepak I. Amin Smt. Anjuly Chib Duggal and Shri Pravin Kutumbe to the deliberationsof the Board. The Directors welcome the new Chairman Shri Rajnish Kumar and Directors

Shri Bhaskar Pramanik Shri Basant Seth Shri Rajiv Kumar and Dr. Purnima Gupta on theBoard.

The Directors also express their gratitude for the guidance and co-operation receivedfrom the Government of India RBI SEBI IRDA and other government and regulatoryagencies.

The Directors also thank all the valued clients shareholders banks and financialinstitutions stock exchanges rating agencies and other stakeholders for their patronageand support and take this opportunity to express their appreciation for the dedicated andcommitted team of employees of the Bank.

For and on behalf of the

Central Board of Directors

Chairman

Date: 22nd May 2018