I. MANAGEMENT DISCUSSION AND ANALYSIS:
Global growth is projected to increase from an estimated 3.1% in 2016 to 3.5% in 2017and 3.6% in 2018. Economic activity gained some momentum in the second half of 2016especially in advanced economies. Economic performance across emerging markets anddeveloping economies has remained mixed. Advanced economies as a group is forecasted togrow by 2.0% in 2017 and 2018. Growth in the group of emerging markets and developingeconomies is to rise to 4.5% and 4.8% in 2017 and 2018 respectively.
Global consumer price inflation has also ticked up as the retail prices of gasoline andother energy related products have increased. Inflation is expected to be higher in 2017than in 2016. For advanced economies as a whole inflation is forecasted to be 2.0% in2017 up from 0.8% in 2016. Inflation in emerging market and developing economics isprojected to rise to 4.7% in 2017 from 4.4% last year due to higher commodity prices.Global trade is estimated to have grown in volume by 2.2% in 2016. Global trade isprojected to grow at a rate of close to 4% in 2017-18.
2. DOMESTIC ECONOMY
The growth in GDP during 2016-17 is estimated at 7.1% as compared to the growth rate of7.6% in 2015-16. The sectors which registered growth of over 7.0% are 'Publicadministration defence& other services' 'financial real estate & professionalservices' and 'manufacturing'. The growth in the 'Agriculture forestry &fishing''mining & quarrying 'Electricity gas water supply & other utility services''Construction'and' Trade hotels transports communication& services related tobroadcasting' is estimated to be 4.1% (-) 1.8% 6.5% 2.9% and 6.0% respectively. As perthe Economic Survey 2016-17 India's GDP is expected to grow at 6.75% to 7.5% in FY 2018.Looking beyond 2017-18 and assuming a normal monsoon and a congenial global environmentRBI expects a real GVA growth of 8.1% in FY 2018-19.
CPI inflation declined to 3.81% in March 2017 from 4.83% as of Mar 2016.Headlineinflation (WPI) stood at 5.70% during FY 2016-17.
On November 8 2016 the Government announced a historic measure with profoundimplication for the economy. The two largest value notes Rs. 500 and Rs. 1000 werewithdrawn. The government restricted the usage of these notes only to a few purposes.Though this measure had its short-term and modest repercussions on the economy it couldbe beneficial for the economy in the long run.
Inflows on account of FIIs particularly into the equity segment and positivesentiments generated by narrow CAD in first HY of 2016-17 helped the rupee to move withina narrow range. The subsequent depreciation of rupee could be attributed largely to thestrengthening of the US dollar globally following the US presidential election resultsand tightening of monetary policy by the Federal Reserve. Nevertheless in 2016-17 therupee has performed better than most of the other emerging market economics (EMEs).
India's export during the year 2016-17 stood at $ 274.6 billion registering 4.7% riseover the previous year. Imports declined by (-) 0.17% to $ 380.36 billion. However thetrade deficit fell for the entire year by 11 % to $ 105.7 billion from $ 118.7 billion theprevious year.
Budget Financial Markets and Banking Sector:
The union budget mentioned India's CAD declined to about 0.3% of GDP in the first HY ofFY 2016-17 from 1% of GDP in the previous year. Fiscal deficit for 2016-17 is targeted at3.2% of GDP and government remains committed to achieve 3% in the coming years. Variousproposals made by the Government in the union budget 2017-18 to boost rural economyprovide affordable housing and to attract higher FDI through initiatives like abolishingthe Foreign Investment Promotion Board (FIPB) are expected to stimulate growth. The GSTbillis also a good step for the economy.
Yields in the Government securities (G-Sec.) market remained volatile due to repo ratecut by RBI expectation of Fed rate hike in December 2016 demonetization and resultantsurge of liquidity. Stock market gained 6.3% in the second half of the financial year2016-17.
There was a muted credit growth of 5.1% in banking industry while deposit grew at 11.8%by 31st March 2017. Several factors however overstate this slowdown. Credit growth wasimpacted by loan write offs swapping of bank credit under UDAY (Ujwal DISCOM AssuranceYojana) scheme use of SBNs for repaying loans and depressed investment cycle. RBI haschanged the policy rates two times in FY 2016-17. Banks have targeted to introduceadditional 10 lakh new POS terminals by March 2017 as per the union budget 2017.
Government's ambition of making India a cashless economy has vested upon the banks theonus of promoting digital banking.
II. PERFORMANCE OF THE BANK DURING 2016-17: 1. UCO's Delivery Channels: 1.1. BRICK andMORTAR Network:
Bank has a geographically well spread branch network in India and abroad. As on31.03.2017 Bank has 8 Circle Offices 42 Zones 3100domestic branches and 4 overseasbranches (two each in Singapore and Hong Kong) 2 Extension Counters. Bank'sRepresentative Office has been established in Tehran Iran which is functional w.e.f25.03.2017.
The number of domestic branches has increased from 3077 as on 31st Mar 2016 to 3100 ason 31st Mar 2017. The Global branch network over 5 years is as under: (Global)
| ||March' ||March' ||March' ||March' ||March' |
|Branch ||2614 ||2894 ||3020 ||3077 ||3104 |
The population category-wise break-up of branches as on 31.03.2016 and 31.03.2017 isgiven below.
1.2. The domestic branches include 5 FC branches 7 AMBs 22 service branchesfunctioning independently 1 CPPC and 1 Integrated Treasury Branch. Further 28 RetailLoan Hubs and 72 Currency Chests 54 City Back Offices are also functioning across thecountry attached to the major city branches of various centres.
2. Alternative Delivery Channels:
2.1. As on 31.3.2017 Bank had 2779 ATMs out of which 2201are onsite and 578 areoffsite. Bank has issued 9706629 Debit/ ATM cards as on 31.3.2017 as compared to 8566186cards as on 31.03.2016 thereby achieving an increase of 13.31% over the previous year. Thebank is issuing Rupay cards under financial inclusion and ATM enabled Kisan Cards linkedto Kisan account.
2.2. Internet banking facility is available to customers for utility bills paymentfor air and rail ticket booking online shopping inter-bank and intra bank fund transferetc. Bank is also providing services like balance enquiry account statement transactionrelated SMS alerts payment of indirect taxes Direct taxes and many other bankingservices. The total e-banking users as on 31.03.2017are689572 as against 530566 as on31.03.2016 registering a Y-O-Y increase of 29.97%.
2.3. Bank has introduced Mobile Banking services during the year 2011-12 wherebycustomers can take advantage of conducting their banking transactions through mobilephones. Through the mobile banking facility customers are now performing bankingactivities like balance enquiry account statement mobile recharge intra &inter-bank funds transfer with their mobile handset using SMS/GPRS modes of connection.M-banking users as on 31.03.2017are534007 as against 272969 as on 31.03.2016 recording anincrease of 95.63% Y-o-Y.
2.4. Bank has introduced the service of POS Terminal facility to our merchant customersduring the financial year. The service was launched on 5th Sep 2016 with a deployment of55 POS terminals. As of 31st Mar 2017 Bank has provided 5145 POS Terminals to variousmerchant establishments. The average number of transactions clocked was 4200 per day andthe average amount transacted per day stood at an average of Rupees one crore.
2.5. Bank is rapidly adapting technology in all spheres. In FY
2016-17 the bank received 25306 applications through our online account openingchannel of which 24352 (96%) were processed as on 31.03.2017.
3. Business Profile:
Total deposits of the bank stood at Rs. 201285 crore as on March 2017 compared to Rs.207118 crore a year ago and gross advances of bank as on March 2017 are at Rs. 131655crore compared to Rs. 135508 crore a year ago. Total Business of Bank stood at Rs.332940 crore as of March 2017 as against Rs. 342626 crore as on 31.03.2016.
On the domestic front total deposit stood at Rs. 185102 crore as on 31.03.2017 asagainst Rs. 190885 crore in the previous corresponding year . Domestic Advances of bankstood at Rs. 112917 crore as of March 2017 as compared to Rs. 118791 crore in theprevious year. Total Deposit of Bank has declined as of Mar'17 due to shedding of bulkdeposit as a measure to reduce interest cost. Gross Advances of Bank has declined due todecline in LC BD business of the bank and subdued growth in the Major industries.
3.3 CASA (Domestic):
Domestic Current and Saving (CASA) deposits of the bank stood at Rs. 62779 crore as ofMarch 2017. The bank's CASA deposit to domestic deposits constituted 33.92% of TotalDeposits. Savings deposit rose by 27.25% to Rs. 51456 crore as at March 2017. Currentdeposit stood at Rs. 11323 crore as of Mar'2017 as against Rs. 20028 crore in Mar'16 onaccount of decline in Iran Deposits.The bank's customer base expanded by 8% to reach 3.10crore by Mar'17.
3.4 Financial Performance:
The bank incurred a Net Loss of Rs. 1851 crore for the whole year ending 31.03.2017compared to the net loss of Rs. 2799 crore for the corresponding previous year. OperatingProfit for the year ended Mar 2017 is Rs. 2926 crore compared to Rs. 3603 crore for thelast year.
Total provisioning and contingencies of bank decreased to Rs. 4777 crore compared toRs. 6403 crore for the last year. The bank's total income stood at Rs. 18440crore as ofMarch 2017 compared to Rs. 20157crore last year. Interest income from loans and advancesstood at Rs. 9871crore and interest from investment stood at Rs. 5734 crore. Net Interestincome was Rs. 3817crore as of Mar'17 against Rs. 4848crore as of Mar'16. The Non-Interestincome earned is Rs. 2114crore as on Mar'17 as compared to Rs. 1596crore in thecorresponding previous year. The bank's interest expenses declined to Rs. 12509 crore forMarch 2017 from Rs. 13713 crore in March 2016. Bank's total expenses stood at Rs. 15514crore as on Mar'17against Rs. 16554 crore as of March 2016. The Bank's cost of depositdeclined to 5.83% and yield on advances decroreeased to 9.60% as at March 2017 from 6.11%and 10.17% respectively in Mar'16. Cost to income ratio incroreeased to 50.67% from47.19%.
4. Capital :
Net worth of the Bank has increased to Rs. 10037 crore during the financial year ending2016-17 from Rs. 9720 crore of the corresponding previous year.In 2016-17 Govt. of Indiainfused Rs. 775 crore capital in the bank by way of preferential allotment of EquityShares on 21.09.2016 and Bank allotted 186972255 equity shares to the Government ofIndia on preferential basis at an issue price of Rs. 41.45 per share for the same on05.10.2016. Further Life Insurance Corporation of India infused Rs. 270.60 crore and bankallotted 71700000 equity shares to LIC on preferential basis at an issue price of Rs.37.74 per share for the same on 29.11.2016. The Government of India also infused Rs. 1150crore on 31.03.2017 which was maintained in the "Share Application MoneyAccount".
5.Capital Adequacy Ratio:
As per Basel III framework the Bank's Capital Adequacy Ratio of 10.93 % as at31.03.2017 was higher than the regulatory requirement of 10.25%. Details of CapitalAdequacy under Basel-III framework are shown as under.
(Rs. in crore)
|Particular ||%/ CRAR(%) ||Amount ||%/ CRAR(%) ||Amount |
|Tier- I || || || || |
|Tier- II || || || || |
|Total Capital || || || || |
6. TREASURY & INTERNATIONAL
Bank has been performing its Treasury & Investment Operations by keeping track ofthe macroeconomic scenario and market developments in accordance with the regulatoryguidelines issued by Reserve Bank of India from time to time as also the Bank's CorporateInvestment Policy approved by the Board of Directors. In the changed scenario where stateof the art technology is providing cutting edge in Treasury & Risk Management Bankhas also embarked upon globally deployable Integrated Treasury Management Solution for aneffective and efficient way to optimize resource utilization and maximize returns oninvestment and trading.
The aggregate Domestic Investment declined by 11.76%from
Rs. 82361 crores as on 31.03.2016 to Rs. 72628 crores as on 31.03.2017. Non SLRInvestment (Domestic) grew marginally by 0.41% from Rs. 12655 crores as on 31.03.2016 toRs. 12707 crores as on 31.03.2017. SLR Investment declined by 14.04% from Rs. 69706 croresas on 31.03.2016 to Rs. 59921 crores as on 31.03.2017. All efforts were made to maximiseprofits through treasury operations. During the year ended 31.03.2017 bank earned Profitfrom Investment Operations amounting to Rs. 7507.47 crore vis--vis Rs. 6565.18 croreduring the ended 31.03.2016 thereby registering an increase of 14.35% y-o-y.
During FY 2016-17 Bank negotiated 174 number of export bills amounting Rs. 534.94 croreand facilitated payment aggregating Rs. 7447 crore comprising 10000 number of bills undercollection and advance payment category.
Bank clocked Trading Profit to the tune of Rs. 1224.42 crores. Income from Investmentduring the year ended 31.03.2017 was Rs. 5736.41 Crore vis--vis Rs. 5681.76 Crorethereby registering a marginal increase of 0.96% on y-o-y basis.
6.1. Export Finance:
With 65 'B' Category Branches across India UCO Bank is committed to actively cater tothe needs of its Exporters. Total Merchant Turnover of the Bank during the Financial Yearended March 2017 stood at Rs. 34174 crore which is 47.94% lower than previous year.Bank's Export Credit outstanding as on 31st March 2017 is Rs. 2133.95 crore registeringa decline of 9.09% over 31st March 2016.
'UCO Bank' has been facilitating Bi-lateral Banking Trade Transactions with Iran under"Rupee Payment Mechanism" since Feb 2012 as mandated by Govt. of India/RBIthere by facilitating Indian Exporters exporting permissible goods and services to Iran.
7. SOCIAL BANKING
7.1. Priority Sector Advances:
The Bank has been showing significant performance in lending to Priority Sector overthe years and has been effectively servicing the priority sector and agriculture sectorwith its vast network of rural and semi-urban branches. As on 31.03.2017 the PrioritySector Advances of the Bank stood at Rs.56177 crore constituting 41.53% of Adjusted NetBank Credit (ANBC).
7.1.1. Agriculture Advances:
Total Agriculture Advances of the Bank stood at Rs.20092 crore constituting 14.85% ofANBC. Direct Agriculture stood at Rs. 12232 crore constituting 9.04% of ANBC.
7.1.2. Micro Small & Medium Enterprises (MSME):
Bank recognizes the important role of MSME in the economic development of the Countrywhich is also supporting in generating employment opportunities in the Country. Theadvances under Micro & Small Enterprises (MSE) as on 31.03.2017 stood at Rs. 22691crore and under Micro Small & Medium Enterprises (MSME) the advances are Rs. 26154crore as of 31.03.2017.
220.127.116.11. INITIATIVES UNDER MSME:
Revised guidelines for Working Capital limit for financing MSE units hasbeen enhanced from 20% of projected annual sales to 25% of projected annual sales. Theassessment of Working Capital limits sanctioned to MSME units that transact digitally withtheir customers has been enhanced from 20% of projected sales to 30% of projected sales.
15% additional working capital limit in existing MSME borrowal units is grantedin all existing standard & satisfactory accounts. This initiative will help theborrowers to tide over the temporary cash crunch arising out of the 'Demonetizationinitiative'.
Launched a new scheme 'UCO BunkarRinnYojana' for financing handloom weavers.This will help the handloom weavers to expand their business.
A PMMY application module has been operationalized in UCO M-Banking. Theprospective borrowers may now apply for MUDRA loans through UCO M-Banking.
An MSE application module has been made active in UCO
Bank website/portal. The prospective borrowers can apply MSE loans through UCO Bankwebsite.
7.1.3. Advances to Weaker Sections:
Advances to Weaker Section stood at Rs.12942 crore as of 31st March 2017 constituting9.57% of ANBC.
7.1.4. Minority Community Advances:
Total Minority Community Advances of the Bank as on 31.03.2017 stood at Rs. 7525 croreconstituting 13.40% of Priority Sector Advances.
7.2. Unique Schemes:
The Bank has two unique schemes - (1) "UCO Uthaan" for upliftment of BPLfamilies of adopted villages & (2) "UCO SamagraGraminVikasYojna" - Adoptionof villages for all-round development.
7.2.1. UCO Uthaan Scheme: Social-cum-Financial upliftment scheme for BPL families Underthe Scheme villages having large number of BPL families are adopted by the Bank throughits nearest branch to bring the BPL families out of the clutches of poverty and tobringabout a holistic change in the villages. Under the scheme a holistic development plan ofthe villages is drawn and followed up for covering areas like education financing forrural housing formation of SHG and micro-financing development of handicrafts &rural artisans and extending finance under DRI Scheme.
The Bank has adopted 21 villages in 10 states i.e. Assam Bihar Gujarat MaharashtraOdisha Punjab Rajasthan Tamil Nadu Uttar Pradesh & West Bengal under UCO UthaanScheme.
Bank has conducted several financial literacy camps in these villages and has providedfinancial assistance particularly to BPL families to improve their livelihood to generatemore income so that they come above poverty line.
By these efforts 2497 BPL families in these 21 adopted villages have been providedwith credit assistance by Bank to uplift their livelihood in better way during last 3years. These BPL families are generating their income by adopting several activities likedairy farming goat farming betel leaf cultivation vegetable growing cycle repairingshoe mending fruit vending grocery shop tea stall beedi making trolley plying masonjobs etc.
7.2.2. UCO Samagra Gramin Vikas Yojna : For all-round development of villages
The Bank has adopted 10 villages in 6 states i.e. Gujarat Himachal Pradesh OdishaKerala Uttar Pradesh & West Bengal for its all-round development under UCOSamagragramin VikasYojna.
In these villages Bank has conducted financial literacy camps to educate thevillagers extended financial support to them and has also initiated developmentalactivities under Corporate Social Responsibility. Under financial assistance Bank hasgiven General Credit Cards (GCC) to small traders Artisan Credit Cards (ACC) to artisansKisan Credit Cards (KCC) to farmers loan to
SHGs loan for doing animal husbandry activities loan to women & SC/STbeneficiaries. Many small traders have started their own business with the support of Bankloan.Through CSR activities Bank has given Ceiling Fans Water purifiers to differentschools Steel Almirahs Books for school library School uniform for school goingchildren installation of hand pumps for drinking water in the villages installation ofSolar street lights in the villages construction of metallic road.
In two villages out of above 10 villages Bank has provided doorstep bankingfacilities to the villagers of these unbanked villages through Mobile Van. The Van visitsthese two villages on a predetermined day and time during the week and provides all typesof banking facilities to the villagers at their doorstep. There has been increase in thesaving habits of the villagers due to this initiative. Through these vans villagers arealso being financially educated.
By these activities there is an all-round development in the adopted villages and thevillagers are very much benefitted.
8. FINANCIAL INCLUSION:
India is a country of more than 6 lakh villages wherein providing banking facility hasbeen a challenge. Govt. of India's mission mode project "PM Jan DhanYojna"launched on 28th Aug 2014 aims to bring excluded masses under the umbrella of structuredbanking system to inculcate the habit of saving among the people who are so far excludedfrom the economic mainstream and thereby to eliminate the dishonest practices of moneylenders by catering to credit needs of people below poverty line. Rising to the occasionBank has opened more than 57.21 lakh accounts so far under PMJDY and mobilized Rs. 1263crore in these accounts.
8.1 Micro ATM - UCO SARATHI
Bank has launched"RuPay Card transaction enabled Tab based Micro ATM" calledUCO SARATHI which can be used by BC Agents (Bank Mitr) for offering a wide range ofBanking Services. These Micro ATMs are equipped with plethora of banking servicesincluding Online opening of RD & FD to Bank's customer Aadhaar enabled serviceseKYC; RuPay Card PIN based transactions; real time Remittance through IMPS system for bothexisting and walk-in customers mobile recharge and other bill payments; Micro Insuranceproducts like PMJJBY & PMSBY and social security schemes like APY (Atal PensionYojna). Services like Aadhaar Seeding Aadhaar Mobile Update etc. are added to the MicroATM. Deployment of Micro ATMs has crossed 3000 mark during the financial year.
8.2 Implementation of PMJJBY and PMSBY:
Working on the government's theme of providing social security to hitherto unbankedmasses Bank has successfully implemented Insurance and Pension products namely PradhanMantriJeevanJyotiBimaYojna(PMJJBY) Pradhan Mantri Suraksha Bima Yojna (PMSBY) AtalPension Yojna (APY) through its Branch and BC network.
Gradually efforts under Financial Inclusion are showing results and Bank has startedgaining both tangible and intangible benefit out of these activities. While decongestionof branches reduction of transaction cost and increase in
CASA base are intangible benefits of FI Project; tangible benefits have come in theform of commission earned under various products.
Under PMJJBY scheme there are 4.81 lac subscribers whereas under PMSBY scheme morethan 11.03 lac people are insured. During the year a total of 1208 claims were settledunder PMJJBY and 182 under PMSBY.
Total subscribers under Atal Pension Yojna crossed 51000 during the year. Through APYand DBTL bank has earned a commission of Rs. 57 lac and Rs. 1.99 crore respectively.
9 . RETAIL BANKING:
During the FY 2016-17 Bank came out with various competitive and innovative productsand also several modifications were done in existing asset products.
9.1 RETAIL ASSETS
Our retail loan portfolio has grown 6.33% over March-16. UCO Home loan portfolio hasgrown by 6.99% over March-16 UCO Property loan has witnessed growth of 30.50% overMarch-16. UCO GOLD LOAN portfolio has witnessed a growth of 19.30% over March-16.
9.2 New Initiatives:
9.2.1 Schematic Retail Lending:
Bank had introducedInterest capitalization scheme for our existing Home Loan customers.Concessional rates of interest for loyal customers PSU employees central & stategovernment employees and our staff has been introduced. Several otherasset products weremodified in line with market requirements. Department organized UCO HOME LOAN CAMPAIGNSthroughout the year and mobilised over Rs. 850 Cr.
The bank has begun processing Education Loan applications on Vidhya Lakshmi portal.Bank has implemented Credit Guarantee fund Scheme for Education Loans for coverage ofeducation loans sanctioned up to Rs. 7.5 lac in case of default. We have launched BiharStudent Credit Card Scheme for the students of Bihar state. Super Premier Education LoanScheme with attractive features was launched for admission in eight premier educationalinstitutes. UCO Skill Loan Scheme was launched in line with IBA guidelines to promoteambitious skill development programme of Government of India.
Modifications were made in Pre-used Car Loan Scheme especially for those borrowers whoare purchasing pre used cars from certified car dealer's viz. Maruti true value etc.Modifications under UCO Cash Loan Scheme have been made to make the scheme more attractive& competitive.
9.2.2. Other initiatives
Our Bank tied up with Cleartrip.com and Yatra.com to offer instant discounts to ourcustomers on bookings of flights hotels etc. on their respective mobile apps. Ticketbooking through UCO MOBILE App had been introduced with attractive discounts & zeroconvenience fee in association with Goibibo.com. Our Bank tied up with Biz sciences foraffiliate merchant programme in which offers of Amazon
Flipkart etc. would be offered to customers for using bank's wallet UCO Pay.
Our Bank tied up with freecharge to offer special discounts to our customers. We havemore than 60000 customers registered on our Bank's loyalty programme and our POS/ ePOStransactions have doubled in the last quarter due to demonetization.
At present our Bank is Corporate Agent for Life Insurance Corporation of India (LICI)for Life Insurance business under Corporate Agency tie-up arrangements. During FY 2016-17Bank canvassed Rs. 30.60 crore of First Premium by selling new Life Insurance policies. InGeneral Insurance Business our Bank is Corporate Agent for selling the products ofReliance General Insurance Company Ltd. During the Financial Year Bank canvassed Rs.30.23 crore premium in General Insurance Business.
Besides Bank had tied up with M/S Future Generali India Insurance Company ltd & b)M/S Liberty Videocon General Insurance Company Ltd during the Financial Year underCorporate Agency tie up arrangements for selling their products at our Branches from 1stApril'2017 onwards. Reliance General Insurance Company Ltd along with the above mentionedcompanies are expected to provide wide choice of Insurance products to our customers tomeet their insurance needs.
Under tie up agreement with Kotak Mahindra Life Insurance ltd for Group Credit LifeInsurance Bank covered life risk of about 9000 Home Education and Retail Loanborrowers. Bank created good number of Specified Persons (SPs) who are posted atdifferent Branches across the Country for generating bancassurance business for the Bank.These Specified Officers are duly trained and certified by Insurance Regulatory &Development Authority of India (IRDAI).
The increasing trend of NPAs in the Banking Industry over last three years has become aconcern for the bank. Gross NPA level of our bank increased from 15.43% in March 2016 to17.12% in March 2017 and the quantum of GNPAs has increased from Rs.20907.73 crore to Rs.22540.95 crore respectively. However NNPA percentage decreased to 8.94% from 9.09% ofprevious year.
During the FY 2016-17 the bank has witnessed fresh slippages of Rs.9909.28 crore. Cashrecovery has increased over the previous year to Rs. 2038.66 crore. The overall reductionin NPA during the FY 2016-17 is Rs. 8276.05 crore over Rs. 4299.67 crore in FY 2015-16.Maintaining Bank's asset quality and recovery of bad debts remain the focus area for thebank.
10.1. Recovery Performance:
Bank's recovery mechanism is also geared up at all levels of the organization to takeadvantage of modified compromise settlement scheme SARFAESI Act DRTs and LokAdalat.Country-wide mega recovery camps Road shows MAO campaigns declaration of willfuldefaulters etc. were organized for speedy recovery. All other strategies and action ofsetting up call centers at Zonal Offices have also strengthened the follow up mechanism instressed accounts.
The details of Cash Recovery and up gradation for the last three Years are as under :
(Rs. In Crores)
|Particulars ||31.03.2016 ||31.03.2017 |
|Cash Recovery ||1369 ||2038.66 |
|Up gradation ||1358 ||4300.45 |
|Total ||2727 ||6339.11 |
|Recovery in Loss Assets || || |
|(ML & Tech W/off accounts) ||131 ||139.81 |
The total cash recovery plus upgradation for the year ended 31st March 2017 is Rs.6339.11 crores as against Rs. 2726.44 crores for the year ended 31st March 2016. Therecovery in written off accounts is Rs. 139.81crores for the year ending March 2017compared to Rs.131 crore for the previous year.
Recovery in loss assets has a direct bearing on the profitability and the bank isgiving priority in monitoring / follow-up for recovery in such accounts. A separatevertical in the bank is monitoring consistently for recovery in loss assets includingtechnically as well as prudentially written off accounts.
10.2. Some Recovery initiatives:
ABC Analysis of NPA Portfolio is done to monitor NPAs. Efforts were also made torecover & upgrade NPAs particularly focusing on freshly generated NPAs whereinimmediate scope of recovery is better. Mega Recovery camps and OTS camps for one-timesettlement under Modified Compromise Settlement for NPA borrowal accounts with outstandingRs. 10.00 Lac were conducted. Critical examination of each NPA Account is done forinitiation of segment wise and account specific action for recovery of Bank's dues. Highvalue NPA accounts were assigned to top executives for close monitoring of recoveryprocess. Zonal level dedicated recovery teams are visiting high NPA branches andconducting Recovery camps so as to facilitate borrowers/guarantors for early settlement.MAO approach for two to five NPA borrowers has been focused in every Zone every month.
Initiation of timely SARFAESI Action & filing of Recovery Suit with DRT/CivilCourts are done. DRT is approached wherever felt necessary for impounding of Passportsof the promoters/ guarantors of NPA borrowal entities as well as attachment of theirpersonal assets before judgement. Engagement of Detective Agencies to locate unchargedpersonal assets of borrowers/ guarantors in high value NPAs.
Mega E-auction of properties is being conducted periodically. Vehicle seizure policy isbeing implemented and Specialized Vehicle Seizure Recovery Agents are utilized. The listof Wilful Defaulters declared by the bank has been uploaded on bank's website forinformation to the general public. Other steps include implementation of CDR invokingSDR S4A (Scheme for sustainable restructuring of stressed assets) Flexible RestructuringScheme (5:25) Change of management in A/Cs outside SDR etc.
Continued volatility and uncertainty in the economic situation has accentuated upsurgeof bad loans in the banking industry. However bank has geared up in tackling the situationby initiating measures as under.
1. Bank has put in place framework for identification of Red Flagged Account (RFA)based on the triggers known as Early Warning Signals as per the RBI guidelines on"Framework for dealing with loan frauds" leading to the identification of theaccount as fraud or not within the period of six months from date of marking the accountas RFA.
2. Considering severe stress in MSME sectors ' Framework for revival andrehabilitation of Micro Small and Medium Enterprise(MSME)' formulated in terms of RBIguidelines has been put in place for resolution of stressed asset under these sectors
3. Various schemes for resolution of stressed asset viz. S4ASDR Flexible Structuringetc have been duly revised in terms of RBI guidelines and put in place
4. For better management of irregular &Non performing (NPA) borrowal accountsrevision in Delegated authority for allowing "Holding on Operation" has beeneffected.
Apart from the above some of the other initiatives taken by the bank to improve thefunctioning at the grass root level include:
1. Operational guidelines for credit monitoring has been updated and put in place on17.10.2016 after obtaining approval of the board.
2. 'Policy for empanelment of valuers' based on suggestions of IBA has been revised andput in place on 30.06.2016.
3. Based on feedback from the field functionaries and the guidelines from RBI 25(twenty five) no of circulars issued on effective credit monitoring during 2016-17
4. Meeting of the Corporate Borrower under stress are being arranged with TopManagement.
12. RISK MANAGEMENT
Extraction of Data for Liquidity Coverage Ratio has been made available in MIS on adaily basis to assess Bank's short term resilience to survive acute liquidity stressconditions. Reverse stress testing exercises are conducted to identify the impact ofstress events such as MTM losses impact of interest rate risk on banking book (IRRBB) andlevel of NPAs on Bank's ability to maintain Regulatory CRAR. Computation of M-Duration andPV01 has been customized in the Treasury Systems (i.e. ITMS). Operational Risk relatedLoss Data is shared with CORDEx on quarterly basis. Bank has started using the services ofCRIF High Mark Credit Information Company (CIC) in addition to CIBIL for pulling of creditinformation on borrowers. Bank has also made operational the usage of Central FraudRegistry (CFR) of RBI which contains information pertaining to frauds of Rs. 1.00 lakhand above reported by commercial banks and select financial institutions. Process forderiving data from Finacle system for computation of Risk Weighted Assets (RWA) for Loansand Advances under Standardized Approach of BASEL - III has been initiated. 24x7 CyberSecurity Operation Centre (SOC) has been operationalized. Security Operation Centre (SOC)is using tools such as Web firewall application (WAF) Advance persistent threatprotection (APT) Database activity monitoring (DAM) Network behavior analysis (NBA) andPrivilege identity Management (PIM) for effective monitoring / analyzing of CyberIncidents. Video conferences are being arranged with CERT-IN for detailed analysis ofCyber Security Incidents. Advisories on cyber security incidents are being hosted in UCOOnline for facilitating Web Based learning. Emergency response team has been formed formitigation/reporting of cyber security incidents.
13.REGIONAL RURAL BANKS (RRBs)
UCO bank has sponsored two RRBs namely Bihar Gramin Bank (BGB) head quartered atBegusarai Bihar and PaschimBangaGramin Bank (PBGB) head quartered at Howrah West Bengalwith four regional offices each. The RRBs have a total of 606 branches as on 31.03.2017.
13.1. Capital position of RRBs
The total capital composition of PaschimBangaGramin Bank as on 31.03.2016 stood at Rs.154.51 crore (Govt. of India) Rs. 108.16 crore (UCO) & Rs. 46.35 crore (West BengalState Govt.). Similarly for Bihar Gramin Bank it stood at Rs. 109.07 Crore (Govt. ofIndia) Rs. 76.35 crore (UCO) & Rs. 32.73 crore (Bihar State Govt.)
13.2. Performance of RRBs as under during 2016-17 PaschimBangaGramin Bank:
As per audited financial results total deposit of PaschimBangaGramin bank stood at Rs.4528.48 crore as on 31.03.2017 registering growth of 17.30 percent. Total advance reacheda level of Rs. 2224.52 crore with an annual growth of 12.10 percent as of 31.03.17. CDratio stood at 49.12% on 31.03.17 as against 51.40% on 31.03.2016.
The gross NPA stood at Rs. 183.17 crore as on 31.03.17 vis--vis Rs. 155.86 crore ason 31.03.2016. Gross NPA to Gross Advance stood at 8.23% as on 31.03.2017 as against 7.85%as of 31.03.2016. The net NPA ratio of the RRB stood at 6.03% as on 31.03.2017 as against5.67% as of 31.03.2016.
Paschim Bank has recorded a net profit of Rs. 14.49 crore as on 31.03.2017 as comparedto Rs. 6.26 crore as on 31.03.16 thereby reducing accumulated loss from Rs. 83.06 croreas on 31.03.2016 to Rs. 68.57 crore as on 31.03.2017.
Bihar Gramin Bank:
As per unaudited financial results total deposit of Bihar Gramin bank stood at Rs.4744.09 crore as on 31.03.2017 registering growth of 21.45 percent. Total advance reacheda level of Rs. 3203.51 crore with an annual growth of 14.71 percent as of 31.03.17. CDratio stood at 67.53% on 31.03.17 as against 71.50% as on 31.03.2016.
The gross NPA of the bank stood at Rs. 247.86 crore as on 31.03.17 vis--vis Rs.222.91 crore as on 31.03.2016. Gross NPA to Gross Advance decreased from 7.98 percent ason 31.03.2016 to 7.74 percent as on 31.03.2017. The net NPA ratio has also decreased from6.93% as on 31.03.2016 to 6.20% as on 31.03.2017.
Bihar Gramin Bank has recorded a net profit of Rs. 24.65 (unaudited) crore as on31.03.2017 as compared to Rs. 4.74 crore as on 31.03.16.
14. INFORMATION TECHNOLOGY BPR and BTD:
14.1. In-House Software Development:
The existing HRMS portal has been further enhanced by developing and integratingvarious modules such as PF module eService folder module Training module for trainingcolleges/ centres LFC/ LTC module terminal benefit module etc. The in-house softwaredevelopment team has also developed Mobile App for HRMS and MIS Dashboard.
The MIS Dashboard Mobile App provides the on-the-go ease for decision makers to accessvarious reports performance parameters policy circulars etc.
The Mobile App for HRMS package (exclusively for Employees) includes profilemanagement monthly perquisite reimbursement request PF statement employee wise searchsol-wise search leave availed finacle menu references scheme code references sol-wisebusiness report salary details helpline numbers etc.
14.2. Cheque Truncation System & NACH:
105 centres were brought under CTS under the three Grids (Northern Grid - 20 centresSouthern Grid - 62 centres & Western Grid -23 centres). Bank has upgraded the hardwareand software for CTS Southern Grid. Bank is now live on ACH credit & ACH debit on NACHplatform.
14.3. Core Banking System:
To improve the functionality and to cater to the requirements raised by regulatoryauthorities Bank has implemented various modules such as cash Denomination ModuleCentralised Locker Rent recovery module Centralised Cash handling charge recovery modulemodule for capturing details of Form 60 implementation of system generated reference no.for 15G/ 15 H submission NPA module has been successfully implemented and seven differentimportant daily reports have been merged into a single finacle menu "dailyrp"for effective monitoring at branch level.
14.4. Government Business Module (GBM):
Bank has implemented Centralized Interest Application on PPF One Rank One Pension(OROP) ePPO for three major treasuries i.e. CPAO Railways and Defence acknowledgementof Life Certificate Implementation of 7th Pay Commission Digital Life Certificate (DLC)etc. in GBM.
14.5. Card Banking:
New range of Debit card has been introduced viz. EMV chip based debit card RupayInternational & VISA signature Debit card. Customer can hot-list his card instantlyusing our newly developed SMS based hot-listing service. Temporary locking setting usagelimit and restriction of Debit card usage over different channels has been introducedthrough Card limit control solution.
Using the new menu developed for standing instructions Customer can manage hisstanding instructions through e-banking. An extra layer of security has been added usingOTP if the customer logs in from an IP address different from the previous login. VoiceOTP facility has been implemented which auto-initiates when OTP could not be deliveredwithin 60 seconds.
Till 31.03.2017 14 different payment gateway aggregators have been integrated foronline payment to merchants. Internet banking facility has been extended to cash creditaccount for Fund Transfer.
14.7. Digital Passbook (mPassbook):
Digital Passbook application (mpassbook) was also developed for enabling customers toview all their accounts & manage finances effectively. Besides Hindi and English boththe applications are available in 10 different regional languages.
14.8. Digital India:
The Digital India programme is a flagship programme of the Government of India with avision to transform India into a digitally empowered society and knowledge economy."Faceless Paperless Cashless" is one of professed role of Digital India. Aspart of promoting cashless transactions and converting India into less-cash societyvarious modes of digital payments are being facilitated by Bank through USSD AEPS UPIUCOPay (e-wallet) BHIM Prepaid Cards POS internet Banking mobile Banking Micro ATMsand Debit cards.
Bank has introduced RuPay EMV chip based pre-paid card "suvidha (e) Prepaid". This card can be reloadable and card holder can spend the loaded amount atATM POS (point of sale) & e-commerce.
14.8.2. UCOPay (e-wallet):
Bank's Mobile Wallet helps users for doing cashless transactions viz. mobile recharge& Bill Payments Self-generation of QR code merchant payments using mobile number orQR Code e-wallet to e-wallet Transfer Transfer of fund to Any Bank Account etc. Thetotal e-wallet users registered till 31.03.2017 are 81 074.
Unified Payments Interface (UPI) is an advanced version of Immediate Payment Service(IMPS) platform which empowers linking multiple bank accounts to a single mobileapplication (of any participating bank) merging several banking features facilitatingseamless fund routing & merchant payments into one hood. It also caters to the"Peer to Peer" collect request which can be scheduled and paid as perrequirement and convenience.
BHIM (Bharat Interface for Money - Bhim App) launched by GoI is intended to facilitatee-payments directly through banks as part of demonetisation to drive cashlesstransactions. BHIM allows users to send or receive money to other UPI payment addresses orQR code or using account number with IFSC code or MMID (Mobile Money Identifier) Code tousers who do not have a UPI-based bank account. Bank has also offers UPI through BHIM.
The innovative payment service *99# works on Unstructured Supplementary Service Data(USSD) channel. This service allows mobile banking transactions using basic feature mobilephone.There is no need to have mobile internet data facility for using USSD based mobilebanking. It is envisioned to provide financial deepening and inclusion of underbankedsociety in the mainstream banking services. Key services offered under *99# serviceinclude interbank account to account fund transfer balance enquiry mini statementbesides host of other services.
*Total users registered for UPI+BHIM+USSD as on 31.03.2017 are 47153.
14.8.6. UCO SMARTPay:
A Smart way for the collection of fees/charges for College/School and otherinstitutions for paying online/offline to educational institutions or any othercorporates/institutions who maintain their accounts with the Bank. 22 differentcollege/institution/ organisations are live in online mode and 01 institution is live inoffline mode till 31.03.2017.
14.9. Online Gold Sovereign Bond:
Bank has provided the facility to apply online for purchasing Sovereign Gold Bonds.
14.10. FIR (Foreign inward remittance) through IMPS channel:
This allows the receipt of money from abroad in NRI accounts through IMPS. UCO Bank hasgone on board with NPCI extending this facility
14.11. IDPMS & EDPMS:
Bank is live with both IDPMS and EDPMS as under.
The Import Data Processing & Monitoring System (IDPMS) is used by the InternationalDepartment Head Office for reporting of outstanding import remittances to RBI.
Export Data Processing and Monitoring System (EDPMS) -comprehensive integratedcomputerised system for effective monitoring and follow-up of export transactions.
14.12. Other Initiatives:
PFMS (Public financial management system) has been launched through which DirectBenefit Transfer and acknowledgement process has been automatized.
15. CUSTOMER SERVICE
Standardized Public Grievance Redressal System (SPGRS) is available for the public tolodge complaints online.98.47% of the total complaints received during the financial year2016-17 have been redressed.Under RTI a total of 1804 applications were received duringFY 2016 - 17 and 42 applications were yet to be replied as on 31.03.2017. There were245appeals made under RTI and 6 appeals were yet to be disposed as on 31.03.2017. Cashmodule has been activated in the CBS system resulting in smooth handling of SBNs (thewithdrawn legal tender notes of Rs. 500 & Rs.1000) during demonetization.
New vendor has been selected for the call centre who will takeover the maintenanceduring the first quarter of 2017-18.
Our locker module has been made online thereby locker rent will be recovered by CBSsystem without manual intervention.
16. INTERNAL OMBUDSMAN
In order to strengthen redressal systems improve Customer Service and expeditegrievance redressal an Internal Ombudsman has been appointed. The Internal Ombudsman isan independent authority to whom the Bank internally escalates all cases for finaldecision where either the complaint is rejected or only partial relief is provided to thecomplainant by the Bank's Internal Grievance Machinery in order that an impartial view istaken in all such cases. This ensures a meaningful resolution and complete satisfaction ofcustomer grievances.
Since resolution of customer grievances and effectiveness of the Internal GrievanceSystem are given very high importance the Managing Director & CEO as well as theExecutive Directors personally monitor 20 and 30 complaints each respectively every weekon an ongoing basis.
17. CORPORATE COMMUNICATIONS
Bank is doing publicity of its products and services through print outdoor anddigital media as well as participating in outdoor activities and sponsorships. Thestake-holders and public at large are provided information about Bank through press meetspress releases and one to one communication. Publicity Campaigns for various assets &liability products information on various technology initiatives taken by the Bank toenhance banking experience has been the essence of countrywide publicity during 2016-17.Advertisements of UCO Pay" & "UCO Suvidha e-Prepaid Card" were alsobroadcasted during the "Mann Ki Baat" programme of Hon'ble Prime Minister ofIndia on All India Radio and Doordarshan which popularized the Bank's cashless mediumsamong the masses.
Keeping in view the Bank's commitment towards financial inclusion publicity in ruralareas had been given special attention during the year. Bank had approved foradvertisements during the Sun-down shows (Movie shows in rural areas) at 98 Villagesacross 4 major States of the Country. Additionally Wall Paintings organising Loan Melasinstalling stalls at local haats/melas and other regular publicity activities had alsobeen carried in rural areas during the year.
Bank has organized a road show to mark the celebration of 74thfoundation day. Bankundertook various Corporate Social Responsibility (CSR) activities to the tune of Rs. 9.53Crore.
Bank has been regularly publishing the in-house magazine "UCO TOWER" to makeaware the employees about the various activities of the bank.
Bank will continue to utilize various publicity mediums to enhance its brand image toestablish itself as a world-class customer-centric financial institution.
Bank's Official Website: - Bank has been maintaining bank's website since 1998. As thebank's website is a window of information to the world the website is constantlymonitored and updated. Bank is in the process of revamping the whole website to make itmore interactive and responsive.
Human Resource Management Department comprises of various Cells looking after differentsegments of the department. All these cells worked in tandem during FY 2016-17 to create aharmonious and productive work environment. Training and workshops were organized forimproving/enhancingthe skills and knowledge of the staff.
The total staff strength as on 31st March 2017 stood at 24620 including employeesserving overseas. The total staff strength comprises of 11934 Officers 8491 Clerks 2145Subordinate Staff and 2050 House-keeping Staff. The percentage of Scheduled Castes (5088)& Scheduled tribes (1923) taken together in the total domestic staff strength is28.47%. Besides there are 3650 OBC employees in Service of the Bank as on 31.03.2017.1494 employees belong to the Minority Communities. Women employees (5610) constitute22.79% of the Total Workforce as of 31st March 2017.
18.2. IR Negotiation Cell
During the period the Industrial Relations climate in the Bank remained cordialbetween the Management and the Unions/ Associations. Meetings and discussions were heldwith Unions/ Associations at periodic intervals through mutual co-operative attitude andrespect during the financial year 2016-17.
18.3. Reservation Cell of Head office HRM Department
Bank has been implementing reservation policy of Governmenst of India. Reservation andother relaxations and concessions extended to SC/ST/OBC / Differently abled persons andEx-Servicemen employees of our bank are strictly adhered. As per GOI guidelines Bank hasimparted Pre-promotion Training to 146 candidates (SC-62 ST-13 OBC-68 and PH-3)belonging to SC/ST and OBC category. In order to address the issues of SC/ ST and OBCemployees of the bank regular periodical meetings are being held at Apex level as well asat Zonal office level (where reservation roster is maintained) with Welfare Association ofsuch employees. The grievances of such category of employees is heard in such meetings andsubsequently grievances are redressed as per Bank's policy guidelines.
The reservation cell participated in two review meetings with Shri Raju Parmar theHon'ble member National Commission for Scheduled Castes at Raipur and Ahmedabad on04.05.2016 and 05.11.2016 respectively. The observations were noted and Action Takenreport was submitted to the Commission in time. The cell also participated in two reviewmeetings with the Parliamentary Committee on welfare of OBC at Gangtok on 27.06.2016 andParliamentary Committee on welfare of SC and ST at Kolkata on 21.10.2016.
Department of Financial Services (DFS) of Ministry of Finance examined theimplementation of Reservation Policy of our bank for the year 2014 and 2015 along withReservation Rosters/ Registers pertaining to SC/ST/OBC Complaint Register and Guard fileof our bank on 11.01.2017 at New Delhi. They found the implementation of reservationPolicy in our bank as satisfactory.
Bank has recruited 735 Officers during the year 2016-17. These 735 Officers (IncludingSpecialist Officers as IT AFO Security Law etc) comprise of 126 SC's 42 ST's 175OBC's and 221 women. Bank has reviewed and extended the service of Chief Customer ServiceOfficer (Internal Ombudsman) for further one year on contractual basis. 1181 clerks havealso been recruited during the year 2016-17 of which 163 are SC's 93 are ST's 306 areOBC's 336 are females and 14 clerks are Persons with Disabilities individuals.
18.5. TRAINING Cell
Our organization being a part of one of the most dynamic industries has to keep upwith the constantly changing environment by continuously updating its workforce withvarious Training programmes in the concerned field. Bank has reviewed Training Policy withlatest updates and infused value addition. During Financial Year 2016-17 emphasis wasgiven for imparting Training to all sections of employees and organizing Locational andCamp Based Training Programmes which are organized at Zonal Office level. 9433 Officers3615 Clerks and 504 Sub-staffs were Trained under inhouse training programmes in CSCKolkata and Seven (7) RTCs of the Bank. Besides 647 Officers 929 substaffs were trainedLocationally at ZO Level across the country. This year a special one day training fornewly promoted/converted HKPs (Housekeeper cum peon) were arranged.
Apart from general topics viz Credit Appraisal NPA Management Priority SectorLending LAPS Unicode CBS Security Aspects Managerial Skills Operation in FinacleLeadership Development etc special topics viz Soft skills Documentation ADC KYC HRIssues etc. have been introduced in Training System. This year complying with directionof the Competent Authority specially designed Soft Skill Training has been introduced forOfficers upto Scale III and Award Staffs at CSC/RTCs.
Bank has nominated 165 Officers/Executives to outside Training Institutes like NIBMPUNE CAB PUNE IIBM Guwahati BIRD Lucknow IIBF Mumbai IDRBT Hyderabad and many otherInstitutes for External Training. Specially designed Training Programmes on LeadershipDevelopment were conducted for newly promoted DGMs AGMs & Chief Managers withExternal Training Institutes viz. IICA Manesar ASCI Hyderabad and NIBM etc. OverseasTraining also given to three of our Top Executive. Special programmes on Forex ManagementPublic Procurement IFRS also conducted to create talent pool on the respective subjects.A system has also been designed for better capacity utilization of Training colleges. Bankhas given utmost importance for nomination of right persons in Training. The selection ofnew Faculty Members for Training Colleges is under process.
19.AUDIT & INSPECTION
To ensure strict adherence to bank's system & procedure Risk Based Internal Audithas been conducted at 2331 branches and 995 branches have been covered under concurrentaudit. In pursuance of audit findings prompt corrective action has been initiated forrectification of irregularities including recovery of revenue leakages. A new policytermed as "Policy on Audit Committee of the Board" has been formulated tore-define specific functioning of the Audit Committee of the Board.
Amendments have been made in the current Inspection policy for optimum utilization ofinspection man days and as a cost control measure to utilize 40% of man days to conductoffsite inspection of the allotted branch from the Head Quarter and rest 60% of the mandays to be utilized for onsite inspection by the field inspectors.
Two training programmes have been conducted to update the knowledge and skill of newlyinducted inspecting officers. More focus was given to make the mobile inspecting officersfamiliar with e-THIC package of Risk Based Supervision."
During the year Field Vigilance Officers posted at various Circle Offices haveconducted Surprise Inspection at 396 branches to ensure that staff working at thesebranches is vigilant in following the Bank's guidelines in their daily routine.
In May 2016 Hindi version of Bank Vigilance Manual called "SatarkataAnudesh"has been launched.
A number of preventive vigilance programmes were conducted at different centres toincrease the awareness of staff on various aspects of misconduct and pitfalls associatedwith non adherence to rules and regulations of the Bank. This included a two days workshopfor Vigilance officers at CSC - Kolkata during January 2017 which covered VigilanceOfficers of all Circle and Zonal Offices.
This year the theme of Vigilance Awareness Week (celebrated in October/ Nov. 2016) was"Public Participation in promoting integrity and eradicating corruption".Various public meetings and seminars have been organised across the branches andadministrative offices to make both the staff and public more vigilant and encourage themto counter corruption. Various competitions like essay debates etc. have been organisedamongst staff members and school/College children. A Magazine "Victory ofVigilance" was also launched to increase awareness among staff members."
21.COMPLIANCE OF OFFICIAL LANGUAGE POLICY:
The Bank took proactive steps to implement the Official Language Policy of Govt. ofIndia and took actions to comply with the provisions of the Official Language Act and theRules made there under on continual basis. The Bank has also taken appropriate follow-upaction to implement the directives as contained in the Annual Program with regard to theuse of Official Language Hindi issued by Government of India Ministry of Home AffairsDept. of Official Language and has regularly channelized its efforts to achieve thevarious targets involved. Taking a decision at top level in the first Quarter of thisfinancial year the Official Language officers posted at Official Language Dept. HeadOffice were given the responsibility of overseeing and guidance with regards to OfficialLanguage related assignments of the Departments of Head Office. The result of thisapproach was encouraging and an increased awareness has been evident in Departments as faras doing official work in Hindi is concerned.
The Third sub-Committee of the Parliamentary Committee on Official Language during itsKolkata visit conducted inspection with regard to the state of Official Languageimplementation at the Head Office of our Bank. It appreciated the efforts of our Bank forenhancement of usage of Hindi. The Drafting and
Evidence Sub-Committee of the Parliamentary Committee on Official Language alsoconducted aDiscussion with the Chairman (UCO Bank) of Town Official LanguageImplementation Committee (Banks) Kolkata and a few other Member Banks on 27th May 2016.Being the Convener Bank of the TOLIC (Banks) Kolkata many Official Language and othercompetitions were organized under the aegis of UCO Bank Head Office and assistance wasalso provided to other Banks in organizing Hindi Programs.
UCO BANK Head Office the Convener of Town Official Language Implementation Committee(Banks) Kolkata has been awarded Third Prize of Eastern Region for excellentimplementation of Official Language during the year 2015-16. Our Zonal Offices at Jorhatand Varanasi received First Prize while Zonal Office at Patna received Second Prizeawarded by the respective TOLICs for successful implementation of Official Language.
During the period under reference the Circle / Zonal Offices organized Hindi workshopsin the whole of India in which a great number of officers/staff were trained for work inOfficial Language which involved a session on utilization of UNICODE and LinguaBank.Along with the issues of the quarterly house-magazine "Anugoonj" published byHead Office many Hindi e-magazines were also published by circles/zones. Besides theOfficial Language officers posted at Circle and Zonal Offices conducted Official Languageinspections of 903 branches/offices. A five-day "Banking Oriented TrainingProgramme" was organized at Central Staff College Kolkata for the Official Languageofficers of the Bank from 30th May to 03rd June 2016 in which the officers wereacquainted with the modes of operation of general banking. Also an All India OfficialLanguage Officers Conference was organized on 06th and 07th March 2017 in the samepremises. Moreover an Official Language Awareness Programme was organized on 22.12.2016for the executives posted at Head Office. Zonal Office Pune conducted a Official LanguageConference on DIGITAL INDIA on 02.03.2017. The Department consistently worked for makingthe Bank's website in bilingual duly updated according to the changes made in it fromtime to time.
Different programmes were conducted during the Hindi Month in the offices and branchesof the Bank including Head Office. The Hindi Diwas Celebration at Head Office involveddance and musical presentations.
Bank has emphasized on compliance issues mandated by RBI. Bank has been ensuring thelevel of customer service functions and compliance of rules of deposits advancesKYC/AML STR CTR under PMLA Act other services submission of statutory/ regulatoryreports information and data asked by RBI GOI SEBI & IBA etc. through a strictcompliance system. Compliance policy was prepared incorporating necessary changes toprevent breaches in compliance and the same has been circulated throughout the bank afterboard approval. Test checking of compliance functions was undertaken in844 branches.Deficiencies observed are being rectified on the spot. Branches/ offices have beensensitized about compliance functions so as to avoid breaches. Critical issues werereported and discussed at appropriate level to enhance system efficacy. Interactions arealso being held with Inspection & Risk management departments periodically to discusscompliance issues to arrive at measures to avoid recurrence thereof.
Law Department has ensured with utmost diligence effective legal assistance inpreparation of legal opinions legal vetting research and correspondence as required bybank from time to time. Policies on 'Settlement of Claims in respect of deceased accountholders and missing persons' and 'Schedule of Advocate Fees' have been reviewed in linewith industry standards and circularized. Policy on 'Empanelment of Advocates' has beenreviewed to include nomination of Standing Counsel and engagement of legal retainer aswell. Twenty five (25) Circulars have been issued highlighting inter alia the recent andimportant judgments of the Hon'ble Supreme Court and various other High Courts in relationto its applicability for the Bank recent amendments in SARFAESI Act 2002 establishmentof Special Courts under Section 435 of Companies Act 2013 constitution of the NationalCompany Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT)information on the Insolvency and Bankruptcy Code 2016 (IBC2016). The claim lodgedagainst the Bank before various fora of law are defended by the Bank meticulously.Branches/Zonal Offices/Circle Offices have been sensitized using step by step guide totake action under SARFAESI Act 2002 strategies and guidelines for effective monitoringand follow-up of DRT cases in order to augment Bank's recovery. Cases filed againstvarious defaulting borrowers/ guarantors are closely followed up by the Bank.
24. Government Business:
Successfully implemented and operationalised Pradhan Mantri Garib Kalyan Yojana (PMGKY)and Pradan Mantri Garib Kalyan Deposit Scheme(PMGKYDS) in our Bank. Under PMGKDS 185Declarants have deposited 6.43 Crores through our Bank. There is an increase of 8930 (38%)accounts in PPF and 6334 (420%) accounts in SukanyaSamriddhi Scheme in the FY2016-17.Successfully operationalized Sovereign Gold Bond Scheme (SGB) Tranche IV V VI and VII atall our Branches. Our Bank earned Non-interest income of Rs. 55.11 lacs by mobilising179.43 Kgs worth of Sovereign Gold Bonds amounting to Rs. 55.11 crores in FY 2016-17.Achieved 19% (3.91Crore) Y-O-Y growth in Turnover commission on Government Business alongwith commission on SGB and APY.
Very old outstanding Pension Paid entries substantially reduced through consistentfollow-up with Branches/Zones. Achieved 86% Aadhaar seeding in Central Pensioner'saccounts.Provision to accept Digital Life Certificates (DLC) from Pensioners have beensuccessfully implemented at all Central Pension paying Branches. 20638 DLCs receivedduring the FY 2016-17.
Online Subscriptions facility through internet Banking for Sovereign Gold Bonds &APY has been implemented. Facility of downloading SGB certificate by Branches through UCOOnline has been implemented. 1851 Branches have been registered with PFRDA for NationalPension System (NPS) All Citizen model. Regular updation of Corporate website with respectto all Govt. of India Schemes. LTA (Life Time Arrears) &Aadhaar seeding field havebeen integrated in GBM module.
25.Awards to Bank:
UCO Bank was awarded "MSME EXCELLENCE AWARDS-2016" by CIMSME underthe below mentioned category during Jan'17:
Best Bank for Promotional Scheme under Mid-Sized Bank-Winner.
UCO BANK has been conferred with Special Award by National Payments Corporationof India (NPCI) recognising excellent performance of the Bank in in select parameters ofvarious NPCI products.
UCO BANK has been awarded the runners-up under the category of "BestPayments Initiatives" amongst mid-sized banks for the year ended 2016 by IndianBanks' Association (IBA).
UCO Bank has been awarded Skoch Order of Merit Award -2016 for MIS DashboardApp.
UCO Bank has been awarded Skoch Order of Merit Award -2016 for HRMS Mobile App.
26. FUTURE PLAN:
FY 2016-17 had been a testing year for the banking industry. The bank honed itsresources devised its strategies to achieve sustainable and progressive business for thefuture years. Bank will continue its emphasis on retail business mobilization of CASAand NPA recovery. Bank intends to improve its momentum in priority sector advancesincluding Agriculture and MSME advances. To increase Non-interest income Bank is aimingto mobilise more non-fund based business and aggressive sale of bancassurance. Bank wouldalso take all measures to reduce other operating expenses.
Reserve Bank of India (RBI) through its letter dated 05.05.2017 communicated itsdecision to put Bank under Prompt Corrective Action (PCA) in view of high Net NPA adnegative ROA. Under the PCA framwork the bank will take steps to reduce NPA and improveprofitability. As a part of action plan to improve profitability Bank strives to reducecost of deposits by increasing CASA. Customer service will be improved and standardized.Bank's competitive CASA and technology products will be instrumental in the process ofimproving deposit mix and hence in increasing NIM (Net Interest Margin).
Bank emphasizes on rigorous follow-up of overdue accounts to avoid slippage. Capturingand analysis of Early Warning Signals (EWS) and initiating corrective measures in a timebound manner Judicious use of tools like NPA Tracker (android based app) DAILYRP(finacle report) etc by the field functionaries and formation of dedicated team forcredit monitoring at each tier will improve asset quality. Bank will also use Many AgainstOne (MAO) approach to use collective strength to speed up NPA recovery. Soft NPAs will betargeted for speedy resolution.
Bank will focus on these key areas by involving all staff members to contribute withrigour for the bright future of Bank.
27.BOARD OF DIRECTOR
27.1. Corporate Governance
Bank firmly believes in and has consistently practised good corporate governance wovenaround its core values of transparency professionalism and accountability. By constantlyfocusing on these aspects in its day-to-day operations the Bank strives to enhanceshareholders' value. The Bank being committed to the principles of good governance itsBoard ofDirectors has formed various committees of the Board to monitor every aspect ofBank's business. The systems and business processes of the Bank are continuously reviewedat various levels for identifying and strengthening areas of weaknesses if any. TheDirectors of the Bank believe that good governance is the key to earn trust loyalty andgoodwill of clients business associates employees and investors and alsoto haverespectable position in the society at large.
27.2. Changes in the Board of Directors
Mr Sunil Kumar Maheshwari served as Part-time Non-official Director in theBoard from 21.06.2013 to 20.06.2016.
Mr Salahuddin Ansari served as Part-time Non-official Director in the Board from26.06.2013 to 25.06.2016
Mr Anil Sharma has been nominated as Part-time Non-official Director under CADirector category w.e.f.30.07.2016.
27.3. Meetings of the Board of Directors
During the financial year 2016-17 Bank had 10 meetings of the Board of Directors. Thenumber of meetings of various other committees of the Board held during the year 2016-17is given below:
|Sl.No ||Name of the Committee ||No. of meetings held |
|1. ||Management Committee of the Board ||13 |
|2. ||Audit Committee of the Board ||8 |
|3. ||Risk Management Committee of Board ||4 |
|4. ||Stake holders' Relationship Committee of the Board ||2 |
|5. ||Share Transfer Committee of the Board ||4 |
|6. ||Special Committee for Monitoring Large Value Frauds ||5 |
|7. ||Customer Service Committee of the Board ||4 |
|8. ||Committee on HR Related Issues of the Bank ||Nil |
|9. ||Nomination Committee of the Board ||2 |
|10. ||Remuneration Committee of the Board ||Nil |
|11. ||IT Strategy Committee of the Board ||5 |
|12. ||Board Level Committee for Monitoring Recovery in NPA Accounts ||5 |
|13. ||Committee of the Board for Disposal of Appeal Cases ||3 |
27.4. Statement of Directors' Responsibilities
The Board of Directors confirm that in the preparation of the annual accounts for theyear ended March 31 2017 the applicable accounting standards have been followed alongwith proper explanation relating to material departures if any. The accounting policiesframed in accordance with the guidelines of Reserve Bank of India were consistentlyapplied. Reasonable and prudent judgements and estimates were made so as to give a trueand fair view of the state of affairs of the Bank at the end of the financial year and ofthe profit of the Bank for the year ended March 31 2017. Proper and sufficient care wastaken for the maintenance of adequate accounting records in accordance with the provisionsof applicable laws governing banks in India; and the accounts have been prepared on anon-going basis. International financial controls have been laid down by the bank forensuring orderly conduct of business.
The Board of Directors places on record its deep appreciation of the contributions madeby outgoing Directors namely Mr. Sunil Kumar Maheshwari and Mr Salahuddin Ansari. TheBoard welcomes the new Director Mr Anil Sharma and looks forward to his valuable inputstowards growth of the Bank. The Directors remain thankful to the Government of IndiaReserve Bank of India and other regulatory authorities for their support and valuableguidance. The Board also thanks other financial institutions and correspondent banks fortheir co-operation.
The Board of Directors expresses its gratitude to the loyal customers for their trustand continuous patronage of the Bank. The Board also thanks the staff unions/associationsand shareholders of the Bank for the support extended by them. The Directors place onrecord their deep appreciation of the dedication shown by each employee of the Bank.
| ||(R.K.Takkar) |
|Date: 30th May 2017 || |
|Place : Kolkata ||Managing Director & Chief Executive Officer |