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ubi's annual report for 2013-14 FY

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  • lPFWF=+ FkFBoard of Directors 2

    lF]&F FFFkF=+ JFk FFFkF=+;FFChief General Manager and General Managers 3

    lFYk=+ =+F FkP FF GPFFF EFYfi Fk=+FBrief History & Vision Statement of the Bank 5

    lPFFFF =+U J=+ FF=+Performance at a glance 6-7

    l=+FFa=+FfiU PFWF=+ =+F FkWFMessage of the Executive Directors 8-9

    lPFWF=+FWk =+U PfiFFWa JFk FkFF PF FFfi-PFFFa EZfi PFFWFFDirectors' Report & Management Discussion and Analysis 10-46

    l=k+FFU EPFFFFF =+U PfiFFWaCorporate Governance Report 47-81

    lfFXFFFDeclaration 82

    lF[ FU=+fiF =+fiFfi =W+ &F 49V =W+ EF]FFfi FFFFFCertificate Pursuant to Clause 49V 83

    of the Listing Agreement

    l=k+FFU EPFFFFF Ffi FW&FF FfiU F=+FWk =+F FFFFFAuditors' Certificate on Corporate Governance 84-

    lFW&FF FfiU F=+FWk =+U PfiFFWaAuditors' Report 85-87

    l31 FF Fa, 2014 =+F F]FF-FFBalance Sheet as on 31st March 2014 90-91

    lEF]F[ FU 1 - EF]F[ FU 12Schedule 1 - Schedule 12 92-103

    l31 FF Fa 2014 =+FW FFFF FFa =+F FFF-FPF FW&FFProfit & Loss Account for the year 104-105

    ended 31st March 2014

    lEF]F[ FU 13 - EF]F[ FU 18Schedule 13 - Schedule 18 106-143

    l31 FF Fa, 2014 =+FW FFFF FFa =+F F=+U FF PFFfiFCash Flow Statement for the year 144-145

    ended 31st March 2014

    lFWFF - III FFFkFWk =W+ EF;FaF FUFfi-3 =+F =+U=+fiFPillar -3 Disclosure under Basel - III Norms 146-189

    PFFF-F[ FUCONTENTS

    Annual Report 2013-14

  • FU F]FUF ;FXFFEkF=+FPF=+ ;FYfi-=+FFFaFFUF PFWF=+

    Shri. Sunil GoyalPart-time Non-official Director

    under CA Category

    PFWF=+ FkF BOARD OF DIRECTORS

    FU UF=+ FFfik;F=+FFaFFF=+ PFWF=+

    Shri Deepak NarangExecutive Director

    FU FkFF EFFa=+FFaFFF=+ PFWF=+Shri Sanjay Arya

    Executive Director

    FU F[F PFFFWFfiFFfi=+ PFWF=+Pratyush Sinha

    Shareholder Director

    FU P=+fiF FU. FFXPfiFFEkF=+FPF=+ ;FYfi-=+FFFaFFUF PFWF=+

    Shri Kiran B VadodariaPart-time Non-official Director

    FU FkFUF FPF=+FF;FFfi =+Fa FFfiU PFWF=+

    Shri Sanjib PatiWorkmen Employee Director

    FU FUF[F =+FkPF fFXFEPF=+FfiU =+Fa FFfiU PFWF=+

    Shri. Pijush Kanti GhoshOfficer Employee Director

    FU PFPfi =]+FFfiFFfiF Ffi=+Ffi FfiF FFPFF

    Shri. Mihir KumarNominee-Govt. of India

    FUFFU FFFaFU FU F]fiFFFPFFU-FFfiFUF PfirFFa FYk=+S

    Nominee

    mt. Parvathy V SundaramReserve Bank of India

    FUFFU fiWF]=+F F]hFWEkF=+FPF=+ ;FYfi-=+FFFaFFUF PFWF=+

    Smt. Renuka MuttooPart-time Non-official Director

    2

    2013-14

  • FFFkF=+;FF GENERAL MANAGERS

    FU FU. =W+. FFFF=+Shri B. K. Patnaik

    FU FFFF FfiShri Manash Dhar

    FU fiPFF WShri Rathin De

    FU EkFfiUF FkShri Ambarisha Nanda

    FU PF=+FF FUFFfiFF &F]FFShri Vikas Sitaram Khutwad

    FU FfiWF =]+FFfi =+F[fiShri Naresh Kumar Kapoor

    FFW. E]F FFPMd. Abdul Wahid

    FU WFFFUF F]&FFUaShri Debashish Mukherjee

    FUFFU F]FkF FF] Smt. Sunanda Basu

    FU HFWF =]+FFfi fiFFShri Umesh Kumar Roy

    FU FkFF =]+FFfiShri Sanjay Kumar

    FU FU. F]kfiWFFShri V. Sundareshan

    F]&F FFFkF=+ CHIEF GENERAL MANAGER

    1033

    Annual Report 2013-14

  • Statutory Central Auditors:

    Bikramjit Shom

    Registrar & Share Transfer Agent:

    Link Intime India Pvt. Ltd.

    C-13 Pannalal Silk Mills Compound

    L B S Road, Bhandup (W)

    Mumbai 400078

    Registered Office Address:

    United Bank of India

    United Tower

    11 Hemanta Basu Sarani

    Kolkata 700001

    M/s. Ramamoorthy (N) & Co.

    M/s. P. C. Bindal & Co.

    M/s. S P M R & Associates

    M/s. Dinesh Mehta & Co.

    Website

    www.unitedbankofindia.com

    E-mail

    [email protected]

    =k+FFU FP FF, EF]FFFF EPF=+FfiU JF

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    FkFU=_+F =+FFFaFF =+F FFF :F]FFGW FYk=+ EsFgr+ GkPFFF]FFGW FFfi11 WFkF FF] FfiFU=+XF=+FFF - 700 001

    FFkPFPF=+ =Wk+UF FW&FF FfiU F=+ :

    Company Secretary, Compliance Office &Secretary to the Board of DirectorsPFWF=+ FkF =W+ FP FF :

    FU PF=e+FFUF FXF

    FWFFa fiFFF[PFa (JF) Jk =k+FFUFWFFa FU FU PFF Jk =k+FFUFWFFa JF FU JF EFfi Jk EFFWPFFWhFFWFFa PFWF FW FF Jk =k+FFU

    4

    2013-14

  • History of United Bank of India dates back to 1914. Comilla Banking Corporation Ltd. (established in

    1914), Comilla Union Bank Ltd. (established in 1922) and Hooghly Bank Ltd. (established in 1932)

    amalgamated with Bengal Central Bank Ltd., formed on October 12, 1950, originally established in 1918 as

    Bengal Central Loan Company Ltd. to form United Bank of India Ltd. on December 18, 1950. On July 19,

    1969, the Bank was nationalized along with 13 other Banks as a Corresponding New Bank. Subsequently,

    Cuttack Bank Ltd., Tezpur Industrial Bank Ltd., Hindustan Mercantile Bank Ltd., and Narang Bank of India

    Ltd. were merged with the Bank. The Head Office of the Bank was situated at 4, Clive Ghat Street (presently

    known as N. C. Dutta Sarani), Kolkata - 700001 from where it was shifted to United Tower, its present Head

    Office in 1971.

    United VisionF]FFGW Fk=+F

    FYk=+ =+F FkP FF GPFFFF]FFGW FYk=+ =+F GPFFF 1914 FW F]fl XFF Y =]+PFFF FYkP=k+;F =+FfiFXfiWFF PFPFW (1914 FWk &F]FF FF), =]+PFFF F]PFFF FYk=+ PFPFW (1922 FWk &F]FF FF) EZfi C;FFU FYk=+ (1932 FWk &F]FF FF) 12 E [Ffi, 1950 =+X Fk;FFF FWdF FYk=+ PFPFW FWk FFFFWPFF CEF F FYk=+ 1918 FWk Fk;FFF FWkdF FXF =+FFU PFPFW =W+ flF FWk &F]FF FF GF=W+ FFFFWFF FW 18 PFFfi, 1950 =+X F]FFGW FYk=+ EFgr++GkPFF PFPFW FFF 19 F]FFGa, 1969 =+X 13 EF FYk=+Xk =W+ FFF GF FYk=+ =+F FU fiFdUF=+fiF CEF EZfi FF]F J=+ FJ FYk=+ =W+ flF FWk GF=+F HhFF CEF FF FWk =+=+ FYk=+ PFPFW, FWFF]fi GkPdFF FYk=+ PFPFW, P]FFF F=+FbFGF FYk=+ PFPFW EZfi FFfik;F FYk=+ EFgr+ GkPFF PFPFW =+F FU GF FYk=+ FWk PFFFF CEF FYk=+ =+F FFF =+FFFaFF 4, FFGF fFF dU (FkPF GFW JF. FU. F FFfiFU =W+ FFF FW FFFF FFFF Y) FWk FF PFFW 1971 FWk FZF[F FFF =+FFFaFF, F]FFGW FFfi FWk FFFFkFPfiF P=+FF ;FFF

    BRIEF HISTORY OF THE BANK

    FFfiF Fk=+F FFFFFPF=+FF, PFFFF JFk FFfiPFaFF =W+ FFFFFfiF FWk, FFP EPFFFFF EZfi FFFFPF=+ HFfiFPFFXk =W+ H FFF FFF=+Xk =+X EFFF=+fi, FFF FFFFFPfiFXk =+U EFW FFEXk EZfi EFFW =+Fa FFPfiFXk =+U FFF=+Fk FFEXk =+FW F[fiF =+fiFW EZfi FXP&FF FkFF Ffi FF]P FF FF WFW CJ, FFfiW WF =W+ J=+, FFFFF F_P JFk FFFFF Ffi =Wk+UF[F, ;FPFFUF, ZXP;F=+U HFF, ;FeF=+ PFWFU, ;FFFU, EFPFa=+ F FWk F]_s, EP&FF FFfiFUF FYk=+ =W+ F =W+ F FWk HFfiFF YkFFfiF:, FFXa=_+FF =+U FPF U, FFfiW FYk=+ =+F EFkFPfi=+ FaF EZfi WfiFFFFWF X;FF

    To emerge as a dynamic, techno savvy, customer- centric, progressive and financially sound premier bank of

    our country with pan India presence, sharply focused on business growth and profitability, with due

    emphasis on risk management in an environment of professionalism, trust and transparency, observing

    highest standards of corporate governance and corporate social responsibilities, meeting the expectations of

    all its stakeholders as well as the aspirations of its employees.

    Essentially, Pursuit of Excellence is going to be core philosophy and driving force for the bank.

    1035

    Annual Report 2013-14

  • PFFUF FFa 2013-14 =W+ PFFFF =+U F]&F FFFWk Performance Highlights ofFinancial Year 2013-14

    =]+F FFFFF FWk 5.36% =+U F_P

    FPfi FFFF;FF FFF FWk 6.30% =+U F_P

    FFF EFF FWk 14.60% =+U F_P

    ;FYfi-FFF EFF FWk 13.12% =+U F_P

    FFF FWk 10.79% =+U F_P

    F[kFU FFaFFFF 9.81%; Ffi, UFfi 1- 6.54 % Ffi

    FFPF=+FF FF FW F F kW PJ FFF W FFF W EP;Fe FX k F kW2.70% =+U FP_

    =+FFF =]+F FFF =+F 37%

    Total Business grow by 5.36%

    Operating Profit up by 6.30%

    Interest Income up by 14.60%

    Non-Interest Income up by 13.12%

    Deposits up by 10.79%

    Capital Adequacy at 9.81%; Tier 1 at 6.54 %

    Advances to Priority Sector grew by 2.70%

    CASA stood at 37% of Total Deposit

    6

    2013-14

  • =+FFaPFFFF =+U J=+ FF=+PERFORMANCE AT A GLANCE fiFPF =+fiXs FWk

    Amount in ` Crore

    FFFk / Parameters 2012-132011-12

    FF&FFEXk =+U Fk&FF / No. of BranchesF[kFU / Capital 117471 135475GaP FU / EquityFU JF FU FU JF / PNCPSFfiP FF JFk EPFFWF / Reserve & SurplusF[kFU FFFaFFF / Capital AdequacyFFFWF II / Basel II 12.69% 11.66% 11.46%FFFWF III / Basel III - 9.01% 9.81%F=+F FFF / Gross Profit 1829 2050 2061.74F] FFF / Net Profit 632.53 391.9 (1213.44)=]+F FFF / Total DepositEZFF FFF / Average DepositPFFF F_P / Per Cent IncreaseF=+F EP;FeF / Gross AdvancesEZFF F=+F EP;FeF / Average Gross AdvancesPFFF F_P / Per Cent Increase=]+F FFFFF / Total BusinessPFFF F_P / Per Cent IncreasePFFWF / InvestmentsFFPF=+FFFF FWF EP;FeF / Advances to Priority SectorF] FFF =+F PFFF / J JF FU FU / Per Cent of Net Credit / ANBC=]+F =+Fa FFfiU / Total StaffPF =+Fa FFfiU FFFFF / Business Per Employee

    1680 1929 2001

    361.00 374.71 554.75

    800 800 800

    4418.69 4709.01 3927.91

    89116 100651 111510

    76242 87791 106010

    12% 15.15% 20.75%

    63873 69708 67982

    53433 60962 72208

    16% 14.09% 18.45%

    152989 170359 179492

    16.10% 11.35% 5.36%

    29059 33463 44876

    22258 25604 26378

    41.30% 40.09% 40.10%

    15500 15479 16499

    9.70 10.83 10.67

    2013-14

    1037

    Annual Report 2013-14

  • x
  • | i E | Bx{B { 8545 Ec E { 7118 Ec M*
  • MANAGEMENT DISCUSSION AND ANALYSIS

    I. ECONOMIC ENVIRONMENT

    Global Economy:The Global economy has broadly strengthened and is expected to improve further in 201415, with much of the impetus coming from advanced economies. Inflation in these economies, however, has underperformed projections, reflecting still-large output gaps and recent commodity price declines. Activity in many emerging market economies has disappointed in a less favorable external financial environment, although they continue to contribute more than two-thirds of global growth.

    Indian Economy:

    India's economic growth rate for the FY 2013-14 is estimated at 4.9 per cent which shows better performance than the previous year, mainly due to improved performance in the agriculture and allied sectors.

    Gross Domestic Product:

    The Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation had estimated the growth of GDP at 4.9 per cent for 2013-14 as compared to the growth rate of 4.5 per cent in 2012-13.

    The highlights of the performance of GDP in the third quarter Q3 (October-December) of 2013-14 released by Ministry have been summarized below:

    The GDP for Q3 of 2013-14 was estimated at Rs.14.78 lakh crore, as against Rs.14.12 lakh crore in Q3 of 2012-13, showing a growth rate of 4.7 per cent over the corresponding quarter of last year.

    The economic activities which registered significant growth in Q3 of 2013-14 over Q3 of 2012-13 were, 'finance, insurance, real estate and business services' at 12.5 per cent, 'community, social & personal services' at 7.0 per cent, 'electricity, gas & water supply' at 5.0 per cent, 'trade, hotels, transport and communication' at 4.3 per cent and 'agriculture, forestry & fishing' at 3.6 per cent.

    Sectoral growth of Credit:

    As per the sectoral deployment of credit data released by the RBI, incremental non-food credit witnessed significant growth in 2013-14. The rise in incremental non-food credit in 2013-14 was particularly significant during August and September 2013. Liquidity tightening measures of RBI in July 2013 made the market borrowing via commercial paper (CPs) and other debt instruments expensive. Thus, corporates avoided raising money via debt instruments and moved towards bank financing for their

    DIRECTORS' REPORT

    thThe Board of Directors have pleasure in presenting the 64Annual Report of the Bank along with the Audited Balance Sheet, Profit and Loss Account and the report on Business and Operations for the year ended March 31, 2014 (FY 2013-14).

    xnE E {]

    xnE b 31 S, 2014 {i E B E E 64 E {] il

  • working capital needs. Bank creditrose sharply by 20.1 per cent compared to preceding year and reached Rs.6.96 trillion. This was the first instance such a rise was noticed in the incremental non-food credit in last three years.

    Owing to the healthy rise in incremental non-food credit, growth in outstanding non-food credit recorded a growth of 14.3 per cent in 2013-14 from 13.5 per cent in the preceding year. However, it remained lower than the levels that were seen during the 2008-12 period. Non-food credit had risen by 18.1 per cent per annum between 2008-09 and 2011-12.

    On a year-on-year (y-o-y) basis, non-food bank credit increased by 14.3 per cent in March 2014 as compared with the increase of 13.5 per cent in March 2013.

    lCredit to agriculture and allied activities increased by 13.5 per cent in the year ending March 2014 as compared with the increase of 7.9 per cent in March 2013.

    lCredit to industry increased by 13.1 per cent during the year 2013-14 as compared to 15.1 per cent during 2012-13. Deceleration in credit growth was observed in respect of mining and quarrying, textiles, wood and wood products, petroleum and coal product, chemical and chemical products, glass and glassware, cement and cement products, basic metals, engineering, gems and jewellery and infrastructure.

    lCredit to the services sector increased by 16.1 per cent in March 2014 as compared to the increase of 12.6 per cent recorded in March 2013.

    lCredit to Non Banking Financial Companies (NBFCs) increased by 13.2 per cent in March 2014 as compared with the increase of 11.6 per cent in March 2013.

    lPersonal loans increased by 15.5 per cent in March 2014 as compared to the increase of 14.7 per cent in March 2013.

    Inflation:

    Reversing its downward trend, the annual rate of inflation as measured by the Wholesale Price Index (WPI) rose by 5.7% in the month of March 2014. Mirroring the trend in WPI, CPI for the month of March '14 rose by 8.31% compared with 8.1% in February '14.

    Primary articles basket witnessed a marginal increase in inflation from 7.4% in March '13 to 7.7% in March '14. Inflation in food articles rose to 9.9% in March '14 compared with 8.6% inflation in March '13. However, the rise in food inflation was offset to a substantial extent by the fall in inflation in the non food articles from 9.3% in March '13 to 4.6% in March '14.

    Fuel and power inflation which had been on the higher end over the last six months rose to 11.2% in March '14 compared to 7.8% in the corresponding month of the previous year. This was the highest inflation rate for the industry in the last six months.

    Inflation in manufactured products had dropped to 3.2% in March '14 from 4.3% in March '13. This was reflective of the fact that the manufacturing sector has had a slack run in FY14.

    V @hnx E M E n*

  • Average Inflation FY 2013-14: Inspite of the high WPI inflation which persisted for the larger part of FY14, the average WPI inflation for FY14 stood much lower at 5.92% as opposed to the 7.36% of inflation in FY13. Average inflation in primary articles remained unchanged at 9.9% in FY14 vis--vis 9.8% in FY13. Inflation in food articles escalated to 12.8% in FY14 compared with 9.9% in FY13 and inflation in non food articles has decelerated to 5.6% from 10.6% it averaged in FY13. Fuel and power inflation on average had fallen only marginally to 10.1% from 10.4%. Average inflation in manufactured products reduced sharply from 5.4% in FY13 to 2.9% in FY14. This further reiterated the apparent slowdown of the manufacturing sector in the country.

    External Sector:

    A large trade deficit made the Indian economy vulnerable to external sector shocks in the first half of the FY 2013-14 and saw the Indian currency touching a record low of almost 69 per dollar in August. However, a pickup in exports and curbs on gold imports helped India to rein in its current account deficit in the last two quarters of 2013-14.

    The trade deficit reached a five-month low in March, totaling USD 10.5 billion, which was just below the USD 10.4 billion shortfall recorded in the same month last year. In the 12 months up to March, the trade deficit totaled USD 138.5 billion, which marked an improvement over the USD 189.5 billion shortfall seen in the same period of last year.March's result reflected a contraction in both imports and exports. Overseas sales contracted 3.2% over the same month last year, which was up from the 3.7% contraction recorded in February. Imports decreased 2.1% in March (February: -17.1% year-on-year). This marked the softest pace in seven months following six months of double-digit contractions, which were driven by the strong government-imposed curb on gold imports.

    The 12-month sum of exports up to March totaled USD 312.4 billion. Accordingly, India's overseas sales came in 3.9% short of its export target of USD 325 billion for FY 2013-2014.

    Government managed to bring the current account deficit (CAD) in 2013-14 down to $32 billion, or 1.7 per cent of gross domestic product (GDP), compared with the $45 billion estimated in the interim Budget in February and $35 billion projected towards the end of March.

    Economic Environment in West Bengal

    West Bengal is the 4th largest State in India in terms of population with over 91 million people. Percentage growth in population for the period 2001-2011 was 13.9%. It holds a large and rich human capital. The area of the State is 88,752 sq. km. and the density of population is 1029 per sq. km, which is 2nd in the country.

    Against the national GDP growth of 4.9% in 2013-14, Bengal's GSDP growth is estimated to be 7.7% contributed by a growth of 5.28% in agriculture, 9.58% growth in Industry and 7.8% growth in Services.

    +i pi k 2013-14 =SS b{+

  • lWest Bengal holds the 5th position in Social Sector Expenditure in India.

    lThe city of Kolkata has the 3rd highest GDP, based on Purchasing Power Parity amongst all Indian cities.

    In respect of Institutional Finance, the State of West Bengal has a robust, dynamic and resilient banking infrastructure. In recent times, the State has shown significant increase in both deposits and credit.

    State's Robust Banking Infrastructure

    ?The State of West Bengal enjoysthe presence of 26 Public Sector Banks, 18 PrivateBanks, 3 Regional Rural Banks, 18 Co-operative banks and 8 Foreign Banks operating across the State.

    ?The Credit-Deposit Ratio (CDR) of the State is around 64%, creating huge potential for credit availability for industrial activities.

    United Bank of India, owing its origin to the State, continuesto hold a key position in the economic growth of the State. The Bank has been playing a leading role in extending financial services to large number of people through a network of 789 branches, spread across the State of West Bengal.

    In March 2013-14, the total business of the Bank in the State stood at Rs.93178 crore, comprising of total deposit at Rs.68112 crore and advance at Rs.25066 crore which accounted for 51.91% of Bank's total business in the country.

    II. MONETARY AND BANKING DEVELOPMENTS

    The Annual Monetary Policy for 2013-14 was formulated by Reserve Bank of India in an environment of incipient signs of stabilization in the global economy and prospects of a turnaround, albeit modest, in the domestic economy. The monetary policy stance for 2013-14 was intended to:

    lcontinue to address the accentuated risks to growth;

    lguard against the risks of inflation pressures re-emerging and adversely impacting inflation expectations, even as corrections in administered prices release suppressed inflation; and

    lappropriately manage liquidity to ensure adequate credit flow to the productive sectors of the economy.

    The year 2013-14 saw the following key policy measures announced by the RBI

    A. Changes in CRR, SLR and Repo Rate during the year:

    Review Date

    CRR SLR Repo Reverse Repo

    MSF Bank Rate

    03.05.2013 4.00 23.00 7.25 6.25 8.25 8.25

    15.07.2013 4.00 23.00 7.25 6.25 10.25 10.25

    20.09.2013 4.00 23.00 7.50 6.50 9.50 9.50

    07.10.2013 4.00 23.00 7.50 6.50 9.00 9.00

    29.10.2013 4.00 23.00 7.75 6.75 8.75 8.75

    28.01.2014 4.00 23.00 8.00 7.00 9.00 9.00

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  • B. Apart from the above monetary policy announcements, the RBI also announced the following development and regulatory policies;

    1. Basel III Regulation on Countercyclical Capital Buffer:

    As part of the Basel-III capital framework, an internal Working Group (Chairman: Shri B. Mahapatra) was constituted to operationalise the countercyclical capital buffer framework in India and the draft report was placed on the Reserve Bank's website on December 02, 2013 for inviting comments/ suggestions from various stakeholders.

    2. Framework for Dealing with Domestic Systemically Important Banks

    The Basel Committee on Banking Supervision (BCBS) provided a framework for dealing with domestic systemically important banks (D-SIBs) in October 2012. The D-SIBs framework is principle-based and provides broad guidance to national authorities on assessment of the systemic importance of banks and additional capital requirements of D-SIBs. RBI placed a draft of the proposed framework for D-SIBs on the Reserve Bank's website on Dec 02, 2013 for inviting comments/suggestions from various stakeholders.

    3. Guidelines on Stress Testing

    The Reserve Bank issued guidelines on stress testing on 02 December 2013. These guidelines required banks to have a sound stress testing policy which will determine liquidity risk, interest rate risk, credit risk and foreign exchange risk under stressed scenarios.

    4. Un hedged Foreign Currency Exposures of Corporates

    The Reserve Bank of India introduced incremental provisioning and capital requirements for banks' exposures to entities with un hedged foreign currency exposures from April 1, 2014.

    Un hedged foreign currency exposures (UFCEs) of corporates are an area of concern as the corporates which do not hedge their foreign currency exposures can incur significant losses due to exchange rate movements. These losses may reduce their capacity to service the loans taken from the banking system and, thereby, affect the health of the banking system.

    5. Periodicity of Payment of Interest on Rupee Savings/ Term Deposits

    As per extant instructions, banks are required to pay interest on savings deposits and term deposits at quarterly or longer intervals. As all commercial banks are now on core banking platforms, RBI decided to give banks the option to pay interest on savings deposits and term deposits at intervals shorter than quarterly intervals.

    6. Licensing of New Banks in the Private Sector

    The Reserve Bank of India (RBI) released the final guidelines for issuing new bank licences on 22nd February 2013, paving the way for corporate houses to enter the banking sector. The RBI assessed the quantitative and qualitative aspects of the 27 applicants which included analysis of the financial statements of

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  • the key entities in the group, 10-year track record of running their businesses, proposed business model for the bank as well as the applicants' demonstrated capabilities for running a bank, among others.Thereafter, the applications were referred to the High-Level Advisory Committee (HLAC) headed by former RBI Governor Bimal Jalan., which submitted its recommendations to the RBI on February 25, 2014.The RBI issued bank licences on 2nd April 2014 after a gap of a decade to IDFC and Bandhan Financial Services Pvt Ltd. It had last awarded licences to Kotak Mahindra Bank and Yes Bank in 2003-04.

    7. Mode of Presence of Foreign Banks in India - Scheme of

    Subsidiarisation

    From a financial stability perspective, RBI is in the process of finalizing a scheme of subsidiarisation of foreign banks in India, guided by the two cardinal principles of reciprocity and single mode of presence. The Wholly Owned Subsidiaries (WOSs) would be given near-national treatment, including in the opening of branches.While it will not be mandatory for existing foreign banks (i.e., banks set up before August 2010) to convert into WOSs, they will be incentivised to convert into WOSs by the attractiveness of the near-national treatment afforded to WOSs. The initial minimum paid-up voting equity capital or net worth for a WOS shall be Rs.5 billion.

    OUTLOOK FOR 2014-15

    rowth is projected to be around 1 percent in 2014

    Overall, growth in emerging market and developing economies is expected to increase to 5.1 percent in 2014. Portfolio shifts and some capital outflows are likely with Fed tapering. Increased financial market and capital flow volatility and exchange rate adjustments remain a concern.

    The Reserve Bank's policy stance is firmly focused on keeping the economy on a disinflationary glide path that is intended to hit

    The global economy in 2014 appears to be in a better shape than what it was in 2012 and 2013. The IMF forecasts global growth to pick up to 3.6% in 2014 from approximately 2.9% in 2013.

    US economy is on a strong recovery path being helped by the reviving job market, increase in manufacturing activity and better conditions for export.

    The Eurozone climbed out of recession in the second half of 2013. The European Commission estimates that the negative impact of fiscal austerity on growth will come down from 0.75% in 2013 to 0.2% of Eurozone GDP in 2014. However, weak private sector growth and high unemployment continue to limit recovery and g .

    Resurgence of exports, prospects of revival in the global economy, unclogging of domestic policy logjam and moderation in inflation observed recently, point to a better outlook for the Indian economy in 2014-15 vis--vis 2013-14. In the World Economic Outlook update released by the IMF in January 2014, growth projection for India for the year 2014 has been kept at 5.4% over the estimated growth of 4.9% during the year 2013-14. RBI expects the real GDP of the country to grow in a range of 5 to 6 per cent in 2014-15 with downside risks to the central estimate of 5.5 per cent.

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    8 per cent CPI inflation by January 2015. However, there are downside risks stemming from a less-than-normal monsoon due to possible el nino effects; uncertainty on the setting of minimum support prices for agricultural commodities and the setting of other administered prices, especially of fuel, fertiliser and electricity; the outlook for fiscal policy; geo-political developments and their impact on international commodity prices.

    In 2013-14, CAD is estimated to have fallen to $45 billion (2.5% of GDP) from $88 billion (4.8% of GDP) inthe previous year. The improvement in CAD is a result of; (i) the curbs on gold imports, ii) a sharp slowdown in domestic demand pulling down consumption and investment goods' imports, and (iii) a weak rupee and (iv) recovery in US benefiting exports.Despite the sharp reduction in CAD this year, the nature of improvement is unsustainable and the Current Account gap is expected to widen to about 3.0% of GDP during the year 2014-15.

    FINANCIAL PERFORMANCE

    Bank's performance during the year was in line with the slackened business growth and increase in stressed assets at the industry level. The main performance indicators of growth, profitability, efficiency, productivity, and solvency are as under:

    The Bank has registered an Operating Profit of 2061.74 crore during the financial year 2013-14 compared to Rs. 2049.91crore in the financial year 2012-13, registering a growth of Rs.11.83 crore (0.58%). However, due to higher provisioning requirement for rise in NPA and staff pension

    Operating Profit Net Profit

    and gratuity requirement, Bank suffered a Net Loss of Rs (-)1213.45 crore in FY 2013-14 compared to a net profit of Rs. 391.90 crore earned last year. Gross Profit per Employee worked out to Rs.12.50 lakh for the year.

    AWF Average Working Fund

    Key Financial Ratios (%) March 2013 March 2014

    Cost of Funds

    Yield on Funds

    Cost of Deposits

    Yield on Advances

    Yield on Investments

    Spread as a % of AWF

    Net Interest Margin (NIM)

    Operating Expenses to AWF

    Return on Avg. Assets (RoAA)

    Return on Equity

    Business per Employee (Rs. In Crore)

    Net Profit per Employee (Rs. In Lakh)

    Book Value

    7.23

    9.44

    7.14

    10.83

    8.00

    2.10

    2.28

    1.40

    -0.99

    -35.56

    10.67

    -7.35

    84.88

    7.24

    9.73

    7.08

    11.31

    7.91

    2.39

    2.67

    1.45

    0.38

    7.20

    10.83

    2.53

    115.83

    Income and Expenditure Analysis

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  • Interest Expenditure increased to Rs. 8036.47 crore with a lower Y-o-Y increase of 18.8% compared to 23.4% registered during last year. The Bank contained its increase in operating expenses at 13.57% amounting to Rs.1707.95 crore. The Net interest income recorded a growth of Rs.75.6 crore (3.04%) during the year

    Composition of Expenditure 2013-14

    Staff Cost10%

    OtherOperatingExpenses

    7%

    InterestExpenses

    83%

    Interest income of the Bank during 2013-14 increased by Rs.1347.79crore (14.57%) from Rs. 9251.50 crore in the year 2012-13 to Rs. 10599.29crore. Non-interest income increased by Rs.140.3crore (13.15%) from Rs.1066.57crore in the financial year 2012-13 to Rs.1206.87crore in the financial year 2013-14. The Cost of Deposits increased to 7.14% due to uptrend in interest

    Composition of Income 2013-14

    Invest-ments22%

    Non-InterestIncome

    10%

    Others2%

    Loans &Advances

    66%

    rates during the year. The Yield on Advances declined to 10.83% as at March 2014 compared to 11.31% as at March 2013.

    and the Net Interest Margin (NIM) worked out at 2.28%.

    Capital & Reserves

    Net Worth of the Bank was assessed at Rs.4188 crore as on March 31, 2014. Total paid-up capital of the Bank was Rs.1355 crore while the reserves and surplus stood at Rs.3928 crore. The Government shareholding in the Bank accounted for at 88% at March 2014.

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  • Capital Adequacy Ratio under Basel-III norms was assessed at 9.81% with Tier-1 Ratio reaching 6.54% as at March 2014. Capital Adequacy Ratio under Basel-II norms was assessed at 11.46% with Tier-1 Ratio at 8.40% in the same period. The Bank has adequate headroom available under both Tier-1 and Tier-2 options to raise capital to support business growth momentum.

    BUSINESS GROWTH

    Deposits

    During the year 2013-14, Total Deposits of the Bank increased from Rs. 100651 crore as on

    st31 March, 2013 to Rs. 111510 crore, registering a growth of 10.79 per cent.Bank's Savings deposits grew by 9.16 per cent and Bank's share of CASA deposits to total deposits stood

    120000

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    2011-12 2012-13 2013-14

    Deposits (Rs. Crore)

    at 36.98 per cent as on March 31, 2014. With a view to reduce the cost of deposits, the Bank shed a substantial amount of bulk deposits including certificate of deposits. Thrust had also been given to maintain the share of CASA deposits to total deposits at 40%.

    The Bank's customer acquisition campaign resulted in growth of customer base of the Bank from 2.72 crore as at March 2013 to 3.05 crore as at March 2014.

    The total credit portfolio of the Bank went down by Rs.1726 crore (-2.48%) and reached Rs. 67982 crore as on March 31, 2014.

    Credit deposit ratio stood at 60.96% as on March 31, 2014. Bank achieved the PRISEC Advance target of 40% of ANBC. Intensive marketing of

    70000

    68000

    66000

    64000

    62000

    60000

    2011-12 2012-13 2013-14

    Advances (Rs. Crore)

    retail credit products brought considerable growth in Retail Advances.The muted growth in Advances is mainly due to the restrictions on disbursement of loans beyond Rs.10 crore to any single borrower or group as advised by RBI in November 2013 considering the deterioration in the asset quality and capital adequacy position.

    The Bank is taking all necessary steps to recoup its asset quality. The bank has adequate capital buffer for provision purposes. Moreover, bank is taking necessary steps to improve and strengthen its capital adequacy position and will be approaching RBI for relaxation in credit dispensation.

    Bank's non-food credit declined from Rs.68154 crore to Rs.66480 crore, while food credit came down from Rs.1554 crore as on March 31, 2013to Rs.1502 crore at the end of March, 2014.

    Advances

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  • Total Business

    180000

    175000

    170000

    165000

    160000

    155000

    150000

    145000

    140000

    135000

    2011-12 2012-13 2013-14

    Total Business ( ` in Crore)

    During 2013-14, the total business of the Bank grew by 5.36% to reach Rs.179492 crore as against Rs.170359 crore during the previous financial year.

    Productivity, as measured by business per employee, increased to Rs.10.83 crore compared to Rs.9.87 crore a year ago.

    SWOT analysis of the Bank

    STRENGTHS

    lBank has a Pan India presence spread in 28 states and 5 union territories

    lMaintaining healthy CASA Ratio of 37% - 40% year after year.

    lCustomer acquisition remains a top priority of the Bank and customer base crossed the milestone of 3 crore this financial year.

    lStrong customer loyalty in the ethnic areas of East & North East India has provided the Bank with stability and has won appreciation and awards in Customer Service on national platform

    lGrowing fee based and other non-interest income provides better overhead efficiency.

    WEAKNESSES

    lBank's advance has posted a negative growth but non-performing assets have increased. Despite good recovery and upgradation, the Gross NPA to Total Advances ratio still continues to remain high and affects earnings.

    lCapital base needs to be strengthened further to support credit expansion and ensure compliance to BASEL-III norms.

    lLow credit off take due to industrial downturn in Eastern and North Eastern part of the country where bank is having strong presence

    OPPORTUNITIES

    lRecent branch expansion in industrially active states will open new vistas for business expansion

    lGrowth in demand for housing sector opens up scope for Retail Credit expansion

    lIndustrial climate is likely to improve with stable government in place.

    THREATS

    lBank is trying hard to retain borrower base, in view of restrictions on further financing.

    lBank is tackling the issue of retirement of experienced manpower by fresh recruitment

    E {

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  • Retail Lending Operations

    Retail Credit has been one of the thrust areas of the Bank for growth of credit during the FY 2013-14. Bank has laid special focus on sanctioning of Retail Loans like Housing Loan, Auto Loan and Mortgage Loan which were the major engines of growth under Retail Credit comprising of 65.07% of total Retail Credit Portfolio.

    Performance during FY 2013-14:

    Lending under Retail Credit witnessed a positive growth of Rs. st308.32 Crore from Rs. 10048.50 Crore as on March 31 , 2013 to

    stRs. 10356.82 Crore as on March 31 , 2014, registering a Y-o-Y growth of 3.07 %. The growth during the period was primarily accounted for by the following segments: Housing 24.89 %; Car 20.91 % and Mortgage 14.39 %.

    lHousing Loan had shown an impressive positive growth during the FY 2013-14. It registered a growth of Rs. 873.28 Crore (24.89%) from Rs. 3508.22 Crore as on 31.03.2013 to Rs. 4381.50 Crore as on 31.03.2014.

    lCar Loan also registered a satisfactory growth of 20.91% during FY 2013-14. It surged from Rs. 536.97 Crore as on 31.03.2013 to Rs. 649.24 Crore as on 31.03.2014.

    lWith repackaging of the scheme, the Mortgage Loan registered substantial growth to reach Rs. 1708.16 Crore as on 31.03.2014 compared to Rs.1493.29 Crore as on 31.03.2013 recording a growth of 14.39 % during the period.

    Retail Hubs

    With a view to promote hassle free credit delivery with reduced turn around time, Bank has set up 26 Retail hubs all over the country In these retail hubs, retail credit proposals are processed electronically. During FY 2013-14, these 26 Retail Hubs functioning in 21 Regions of the Bank sanctioned 9522 retail credit proposals amounting to Rs.1087 crore.

    During the Financial Year 2013-14 Bank has launched an innovative scheme for Business Correspondents namely United Sanyog Paribahan Scheme to enable them to buy two wheelers to facilitate the cause of financial inclusion.

    Besides most other loans like Housing Loan, Auto Loan, Consumer Loan, Education Loan, Mortgage Loan etc. were offered at very competitive rates of interest with various customer friendly features to boost up consumer demand in line with the

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  • objectives of Govt. of India. Housing Loan and special Education Loan for premier institutes were offered at Base Rate.

    During the Financial Year, the Bank has extended interest subsidy scheme to eligible Education Loan borrowers and interest subvention schemes to eligible Housing Loan accounts as per the Govt. Guidelines.

    The online application facility for Retail Loans like Housing and Education has been a major success in FY 2013-14 with many applicants having taken advantage of this hassle free system. Online Education Loan applications facility are also being extended to the prospective tech savvy students.

    TREASURY AND INTERNATIONAL OPERATIONS

    The investment portfolio of the Bank increased from Rs. 33659 cr as on 31.03.2013 to Rs. 45127 cr as on 31.03.2014 registering a growth of 34%. The SLR investment portfolio increased from Rs. 25672 cr as on 31.03.2013 to Rs. 35100 cr as on 31.03.2014 registering a growth of 36.7%. Portfolio modified duration came down to 4.11 as at March 2014 compared to 4.90 a year ago. The modified duration of the Available for Sale (AFS) portfolio has decreased to 1.96 as at March 2014 from 4.14 as at March 2013.

    The Bank had earned a total trading profit of Rs 526 Cr during the year as compared to Rs467 Cr during the previous year.

    The average return on investment during the year was 8.05% (8.04% during previous year) and the Yield on Investment increased from 7.91% as on 31.03.2013 to 8.00% as on 31.03.2014.

    Foreign business turnover of the Bank aggregated to Rs.16361 crore comprising of Rs. 5838 crore under exports, Rs. 3384 crore under Imports and Rs. 7139.37 crore under remittances as on March,2014.

    Outstanding export credit of the Bank stood at Rs. 1191 crore as at March, 2014. Bank earned exchange income of Rs. 155.98 crore during the year 2013-14.

    The Bank's overseas presence covered two countries namely Myanmar and Bangladesh with one Representative Office each at Dhaka, Bangladesh and Yangoan, Myanmar. Indo-Myanmar trade is routed through our Bank. Twenty banks of Bangladesh maintain thirty (30) Vostro accounts in USD and EUR currency and thirteen(13) banks in Myanmar maintain sixteen (16) Vostro accounts in EUR, USD, SGD with our Bank. One Vostro account of Global IME Bank Ltd & one vostro account of Commerz Bank Ltd. is maintained in INR.

    The Bank's International operations are well supported by a wide network of more than 616 Correspondent relationships opened with overseas Banks with 25 Nostro accounts in ten(10) Currencies maintained abroad.

    OTHER SERVICES

    Merchant Banking Division managed Bank's first-ever issue of Basel III compliant Tier II Bonds for Rs.500 Crore on 25.06.2013 amongst PSU Banks. Bank holds Certificate of Registration issued by SEBI on Banker to an Issue, Debenture Trustee and Merchant Banker under which it continues to discharge defined duties and responsibilities as per regulatory norms.

    * |J l+ E B + @h + I @h +v n n V *k E nx E x E E nxn E +x M I @h E B V b Vx + M + @h E B V n U] Vx+ E i E *k 2013-14 + + I @h V Jn @h E B +x

  • The Bank has tie-up arrangements in both life and non-life insurance segments under its 'Bancassurance' arm. The Bank earned a commission income of Rs. 6.23 crore from the life insurance segment and Rs. 3.78 crore from the non-life insurance segment.

    Bank is providing the service of Inward Money Transaction from overseas locations working as an agent of Western Union, Moneygram and Xpress Money. Bank earned a commission of Rs.11.56 lakh in this segment.

    Under Government Business, the Bank undertakes different types of Government Business Activities like

    lCollection of Central Government Revenue viz. Direct and Indirect Taxes (CBDT, CBEC and Customs) through physical mode by Authorized branches and through e-mode (Internet Banking) by all branches of the Bank.

    lCollection of State Revenue and Taxes (Sales Tax, VAT, Professional Tax etc), both on line and off line.

    lMobilization of Govt deposit (PPF, SCSS, Savings Bond, Inflation Linked Index Bonds etc.)

    lHandling of Govt Fund ( Departmentalized Ministries' Accounts, State Govt Treasury Operation)

    lPayment of School Teachers' Salary and different types of pension (Central Govt, State Govt and different autonomous organizations).

    The Bank has been authorized to act as Point of Presence (POP) by the Pension Fund Regulatory and Development Authority (PFRDA) and 1093 Branches have been registered as Point of Preference-Service Provider (POP-SP) in Central Record keeping Agency (CRA) system for implementation of subscribers' registration process in National Pension System (NPS) for all citizens of India.

    The Bank has also been authorized to act as Aggregator by PFRDA in January, 2013 and 1400 branches of the Bank have been registered as NPS lite Collection Centers (NL-CCs) in Central record keeping agency system for implementation of subscribers' registration process in NPS lite / Swavalamban Yojana for unorganized sector and economically disadvantaged people. The Bank has registered 8356 subscribers from unorganized section of the society under NPS/ NPS lite / Swavalamban Yojana.

    Central Pension Processing Centre (CPPC) set up at H.O. is handling disbursement of Pension to nearly 1.00 lac Central Civil, Telecom, Political, Railway and Defense Pensioners. The Bank has also been authorized to disburse Postal Pension w.e.f 01.01.2013.

    To facilitate dissemination of relevant information to the Pensioners, Pensioners' Charter has been displayed in Bank's website and also in all pension disbursing branches. On-line pension grievance redressal mechanism is available on Bank's website.

    Total Turnover in respect of Government Business handled by the Bank and Agency Commission earned on such business

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    during the financial year amounted to Rs. 25756.20 Crore and Rs.66.22 Crore respectively. Agency commission earned from Government business during financial year 2013-14 was as follows:

    BUSINESS TYPE Turn Over Commission (TOC) Earned (Rs. in crore)

    2012 -13 2013 -14

    TAX 3.25 2.27

    PENSION 16.94 15.90

    SCHOOL SALARY

    32.26 40.67

    TREASURY 9.16 6.21

    PPF, SCSS, BOND & SDS

    0.47 0.41

    DMA 0.8 3 0.76

    TOTAL 62.91 66.22

    ASSET QUALITY AND RISK MANAGEMENT

    Asset Quality

    The Bank has been complying with RBI guidelines relating to Income Recognition, Asset Classification and Provisioning In percentage terms, gross NPA Ratio of the Bank stood at 10.47% as on 31.03.2014 as against 4.25% at the end of the previous year. In absolute terms Gross NPA stood at Rs. 7118 crore as on 31.03.2014. The Net NPA ratio of the Bank stood at 7.18% as on 31.03.2014 against 2.87% as on 31.03.2013. In absolute terms, Net NPA stood at Rs. 4664 crore as on 31.03.2014. There was fresh generation of NPA of Rs.8007 crore during the FY 2013-14. However, the Bank could effect a NPA reduction of Rs. 3853 crore during the FY 2013-14 which included Rs. 1084 crore of cash recovery and Rs.2288 crore of up gradation. The cash recovery in technically written off accounts was Rs. 95 crore during the year.

    Bank's Recovery Policy has been revised to facilitate quick settlement in existing NPA accounts. The Regional Offices are now empowered with more discretionary power to settle existing NPA accounts and even Branch Heads have been delegated with discretionary power to allow write off in eligible cases. The Bank also came out with a liberalized guidelines during the year for recovery of small value NPA accounts having outstanding balance below Rs.10 lac. The Bank has a well settled policy for sale of assets to Asset Reconstruction Companies. However, no sale of NPA was made during the FY 2013-14.

    Risk Management

    Capital Adequacy framework and future strategies

    The Bank has a robust and integrated Risk Management system to ensure that the risks assumed by it are within the defined risk appetites and are adequately ring fenced. The Bank has a robust Risk Management Architecture comprising Risk Management Structure, Risk Management Polices and Risk Management Implementation and Monitoring Systems in order to address the various risks to which Bank is exposed.

    Risk Management Structure:

    The overall responsibility of setting the Bank's risk appetite and effective risk management rests with the Board of Directors, apex

    Ec + . 66.22 Ec E +Vi E M

  • level management of the Bank. Bank has constituted a Board level Committee named as Risk Management Committee of Board of Directors (RMCBOD) to monitor the implementation of the Risk Management system of the Bank. There are other internal committees of Top Executives like In-House Risk Management Committee (Credit Risk Management Committee), Asset Liability Management Committee (ALCO) and Operational Risk Management Committee to supervise respective risk management functions.

    Bank's Asset Liability Management Committee (ALCO) is a decision making unit responsible for the strategic management of interest rate and liquidity risks. ALCO met times during the year to review various issues namely interest rates scenario, product pricing for both deposits and advances, desired maturity profile of the incremental assets and liabilities, demand for Bank funds, fixation of Bank's Base Rate, cash flows of the Bank, profit planning and overall balance sheet management.

    The Operational Risk Management Committee (ORMC) has the responsibility of monitoring the operational risk of the Bank and the responsibility of evaluating and taking necessary steps for mitigation of operational risk by designing and maintaining an explicit operational risk management process. It also ensures that the norms, policies and guidelines laid down in Operational Risk Management Policy are strictly adhered to. ORMC met times to discuss various issues from operational risk point of view.

    The In-House Risk Management Committee (Credit Risk Management Committee) monitors various credit risk aspects of the Bank by monitoring Bank's credit risk management functions, apart from market risk and other risks. The Committee met times during the year to monitor the credit risk, market risk and Pillar 2 risks etc.

    Risk Management Policies:

    To address various risks like credit risk, market risk, operational risk, liquidity risk, Forex risk and Pillar-2 risks, the Bank has formulated various risk management policies to measure, manage and mitigate such risks that the Bank is exposed to. The major policies developed and approved by the Board of Directors of the Bank to address such risks are Lending Policy, Policy on ICAAP, Operational Risk Management Policy, Business Line Mapping Policy, Asset Liability Management Policy, Investment Policy, Disclosure Policy, Credit Audit Policy, Stress Testing Policy, and Policy on Credit Risk Mitigation Technique & Collateral Management etc. All such policies have been reviewed during the year and approved by the Board.

    Credit Risk:

    To address the Credit risk, Bank has formulated a Lending Policy which lays down policy guidelines for Credit Management covering all areas of operation where credit Risk is involved. The policy enables the Bank to enhance the risk management capabilities by undertaking lending decisions guided by the policy framework for a steady and healthy growth in its loan portfolio.

    The Bank has set various prudential limits to individual borrowers, group borrowers, entry level exposure norms,

    14

    13

    2

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  • substantial exposure limits, benchmark financial ratios, borrower standards, exposure limits/ceilings to industries, sensitive sectors, rating category etc in alignment with RBI directives. The Board has reviewed such limits during the year.

    During the year, analysis of various exposure norms has been undertaken on half yearly basis to ensure Bank's various exposures are within the exposure limits/ceilings fixed by RBI/ Bank's Board.

    Bank has made its loan appraisal function independent of Risk Rating function. Internal risk rating of loan accounts is carried through a software based rating model to assess the credit proposal and rating of a borrower.

    During the year, Bank conducted the credit portfolio analysis on quarterly interval, to study the impact of a particular industry / sector on the credit portfolio of the Bank and adopt strategies to improve the quality of credit portfolio and reduce the potential adverse impact of concentration risk.

    During the year, Bank has also undertaken the rating migration analysis of its borrowers on half yearly interval to analyze the stability rate, up gradation rate, down gradation rate and default rate for one year, two year, three year and four year time horizons and appropriate corrective actions are initiated to protect the portfolio quality.

    The Bank has put in place a Loan Review Mechanism to improve the quality of loan assets and to ensure adherence to the policies, procedures and other statutory requirements. The Bank also undertakes on-site credit audit for accounts having credit limit over Rs.40.00 lacs to improve the quality of credit portfolio.

    Market Risk:

    For management of Market Risk, the Bank has given emphasis on measuring, monitoring and managing liquidity, interest rates, foreign exchange and equity risk of the Bank. The Market Risk in trading book is monitored and managed as per appropriate control mechanism in place. Market position, funding patterns, duration, counterparty limits and various sensitive parameters are also monitored by the Bank on regular basis. The advanced Risk Management tools such as Value at Risk (VaR), Earnings at Risk (EaR), Net Overnight Open Position Limits (NOOPL) and modified duration limits are used in managing Market Risk.

    The Bank measures and monitors liquidity risk for all items of balance sheet through structural liquidity statements and stock ratios on regular basis. The Bank also monitors its Interest rate risk through interest rate sensitivity gap reports.

    The Bank has formulated and reviewed its Investment Policy to set operating guidelines for its treasury functions. The Bank has also put in place an Asset Liability Management Policy to address the liquidity risk, interest rate risk etc. These policies comprise management practices, procedures, prudential risk limits, review mechanisms and reporting systems etc. These policies are reviewed periodically in line with changes in financial and market conditions.

    Bank has procured Integrated Treasury Management System (ITMS) software to monitor its investment and treasury

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  • portfolio on an ongoing basis along with automated computation of capital charge for Market Risk as well as strengthening the internal control system of investment portfolio of the Bank.

    Operational Risk:

    The Bank has framed an Operational Risk Management Policy for managing the Operational Risk in an effective manner. The Bank has also formulated Business Line Mapping Policy for mapping various products, activities, and income into different business lines.

    Bank's Operational Risk Management Committee (ORMC) has the responsibility of monitoring the operational risk of the Bank. ORMC also reviews the operational risk loss event data, new products, process and systems adopted by the Bank and provides suggestions for taking corrective/preventive measures to strengthen the internal systems and procedures.

    As a step towards implementation of advanced approaches for computation of Capital Charge under Operational Risk, Bank has submitted its application to RBI for migration to The Standardized Approach (TSA).

    Basel-II and Basel-III Compliance:

    In line with guidelines of the Reserve Bank of India, the Bank has stsuccessfully migrated to Basel-II framework w.e.f 31 March

    2009 by adopting Standardized Approach (SA) for Credit Risk, Basic Indicator Approach (BIA) for Operational Risk and Standardized Duration Approach (SDA) for Market Risk for computing the capital adequacy ratio.

    The bank has also followed Basel-III capital regulation norms stw.e.f 1 April 2013 in line with RBI guidelines. The Bank has been

    computing the Capital to Risk Weighted Assets Ratio (CRAR) on both under Basel-III and Basel-II norms at quarterly interval.

    To comply with Pillar 2 guidelines of RBI, the Bank has formulated a Policy on Internal Capital Adequacy Assessment Process (ICAAP) for the assessment of all material risks the Bank is exposed to and the risk management processes which are put in place to manage and mitigate those risks and also to evaluate its capital adequacy commensurate with such risks.

    In line with the ICAAP policy, the Bank prepares the ICAAP Document on yearly basis and submits to RBI after internal validation and approval by the Board of Directors of the Bank. The ICAAP document of the Bank for has been submitted to RBI.

    The Bank has reviewed its capital requirement both under Basel-II and Basel-III norms and taken necessary steps for strengthening its capital base. The Bank also reviewed its ICAAP on quarterly basis for monitoring both risks and capital requirement of the Bank.

    In line with RBI guidelines and as per the Stress Testing Policy of the Bank, the Bank conducted Stress Testing analysis on quarterly interval on various risks like Liquidity Risk, Interest Rate Risk, Forex Risk and Credit Risk and assessed the impact on capital adequacy and profitability.

    2013-14

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  • For skill development in Risk Management area, the Bank also nominates its officers on regular basis for various trainings/seminars on Risk Management conducted by reputed institutions like NIBM, IBA, IDRBT, NIBSCOM, SBI etc.

    NATIONAL PRIORITIES

    Priority Sector Advances

    Lending under Priority Sector has been increased by Rs. 774 crore (from Rs.25604 crore in March 2013 to Rs. 26378 crore in March 2014) representing a growth of 3.02% on a Y-O-Y basis. The percentage share of lending to priority sector was 40.05% of ANBC as on 31.03.2013 and the same stands at 40.11% as on 31.03.2014.

    Agriculture Lending:

    Lending to Agriculture has increased by Rs.154 crore from Rs. 9571 crore in March 2013 to Rs.9725 crore in March 2014 representing a growth of 1.61% on a Y -o -Y basis. The percentage share of lending to agriculture constitutes 13.62% of ANBC as on 31.03.2014.The percentage share of lending to direct agriculture constitutes 9.12% of ANBC as on 31.03.2014, while the Bank has crossed the stipulated target of Indirect Agriculture which is 4.5% of ANBC.

    The Bank disbursed fresh loan of Rs.5080 crore in agriculture covering 3.85 lakh farmers during the financial year registering an increase of 18.63%.

    Lending to MSE

    Lending under MSE sector has increased by Rs.166 crore (from Rs. 11072 crore in March 2013 to Rs. 11249 crore in March 2014) representing a growth of 1.50 % only on a Y-O-Y basis. Growth in MSE advances was subdued due to slowdown in economy.

    Lending to Weaker Section:

    Lending to weaker section stood at Rs.7495 crore as on st31 March, 2014. The share of weaker section to ANBC stood at

    10.75% as on 31st March 2014 against a national target of 10%.

    Lending to Minority Community:

    Bank's lending to Minority Communities increased from Rs.3,859 crore as at end of March 2013 to Rs. 3949 crore as at the end of March 2014. The share of lending to Minority Communities in the Priority Sector lending of the Bank stood at 15.02% as on 31st March 2014.

    Lending to Women Beneficiaries:

    Lending to women beneficiaries increased by Rs.156 Crore during 2013-14 (from Rs. 3395 Crore as on 31.03. 2013 to Rs. 3551 Crore as on 31.03.2014) representing a growth of 4.5%. As on 31.03.2014, the percentage share of lending to women beneficiaries stood at 5.09% of ANBC as against national target of 5%.

    Kisan Credit Card:

    Bank issued 164756 fresh Kisan Credit Cards during the year 2013-14 involving total credit limits of Rs.808.60 crore

    VJ |vx E Ij E E E B, E x Bx +

  • against 152502 KCCs involving Rs. 704 crore disbursed during the financial year 2012-13. As on 31.03.2014, the total number of KCCs issued by the Bank stood at 526883 which involve total credit limit of Rs.1802.06 crore against 466712 KCC holders enjoying a total credit of Rs.1454.26 crore as on 31.03.2013.The growth of KCC in amount during the year 2013-14 is 23.92%.

    In line with the Government guidelines on issuance of RuPay based ATM enabled cards to all the KCC holders, the Bank has issued 193104 such ATM cards to KCC holders in 2013-14.

    Self Help Group:

    During 2013 -14 the Bank has established credit linkages with 8529 SHGs providing credit support to the extent of Rs.46.05 crore .

    MSME LENDING

    The Bank's credit to Micro, Small and Medium Enterprises (MSMEs) reached Rs.12083 crore in FY 13-14 compared toRs.11822 crore for FY12-13.

    The highlights of the Bank's lending to MSME Sector as on 31.03.2014 are as under:-

    ?Total credit to MSME sector as on 31.03.2014 stood at Rs.12083 crore which accounted for 16.74% of Adjusted Net Bank Credit (ANBC).

    ?Credit to MSE sector increased to Rs.11484 crore as on 31.03.2014 from Rs.11072 as on March 2013 with a Y-O-Y growth of 3.71%.

    ?Out of this Rs.11484 crore, amount eligible to be classified under Priority Sector is Rs.11249 crore.

    ?Credit to MSE constitutes 15.91% of ANBC and 43% of Priority Sector lending of the Bank as on 31.03.2014

    ?Credit to Micro Enterprises has increased from Rs.7089 crore as on 31.03.2013 to Rs.7259 crore as on 31.03.2014 registering a Y-o-Y growth of 2.40%.

    ?The share of lending to Micro Enterprises in total Micro & Small Enterprises stands at 63.21% as against the target of 60% stipulated by RBI.

    Performance of Bank in Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE):

    Bank is one of the Member Lending Institutions (MLI) of Credit Guarantee Fund Trust of Micro and Small Enterprises (CGTMSE) for the purpose of making credit available to Micro and Small Enterprises without collateral security and /or third party guarantee. Bank has registered substantial growth in credit guarantee coverage under CGTMSE in the FY 2013-14.

    The performance of our bank under Credit Guarantee Scheme for the year ended on March, 2014 vis--vis corresponding period of March 2013 has been given below:

    Ec E 152,502 Ex Eb] Eb V E l * 31.03.2014 iE E u V E Ex Eb] Eb E J 526,883 , V .1802.06 E E Eb] il 31.03.2013 iE 466,712 E vE .1454.26 Ec E @h ={M E l * 201314 E nx E E r 23.92 |ii * E vE E { +vi B]B li Eb V Ex E v E E nxn E +xh , E x 201314 E vE E B 193104 B]B Eb V E * i 201314 E nx E x 8529 i E l Eb] EV l{i Ei B .46.05 Ec E iE @h i ={v E *BBB

  • Performance in CGTMSE Sector

    Amount (Rs. Cr.)

    Category

    Fresh Coverage

    Growth Y-O-Y(%)

    Cumulative

    Growth YO-Y(%)

    During FY 2012-13

    During FY 2013-14

    As on 31.03.13 As on 31.03.14

    J/Nos. 8232 10259 25 30839 41098 33

    /Amount 405.40 479.99 19 1308.88 1788.87 37

    Performance of Specialized MSME Branches

    As per RBI guidelines, Bank has designated 87 Branches as Specialized MSME Branches where 60% of total advance of the Branch has been extended to MSME Sector, Branch is situated in a cluster of MSEs and / or the branch is located in a District where Bank is the Lead Bank. The total credit extended through these Specialized MSME Branches amounted to Rs.1908 crore as on

    st31 March 2014.

    Progress under various Tie-ups

    Bank has entered into / renewed the tie-up arrangement during the year 2013-14 with various renowned manufacturers of Commercial Vehicle, Construction equipment, Solar System Manufactures/Dealers such as Tata Motors, Hindustan Motors, Volvo Eicher, USG Automobiles (Dealer of Force Motors for West Bengal), Piaggio, Kirti Solar, Hyundai Construction Equipments & Tata Power Solar, for extending credit to buy equipment. Further, Bank has signed MoU with NSIC, SIDBI & IIE, Guwahati, leading players in MSME Sector for sponsoring quality MSME proposals to our Branches.

    Financial Inclusion

    With the objective of bringing the large un-served population under the banking mainstream, the Bank is striving towards a more inclusive growth by making financial products and services available to the poor at their door step through the Business Correspondent Model. As per the Government of India and the Reserve Bank of India directives, the Bank has been actively pursuing the agenda of Financial Inclusion, with key interventions in four areas viz. expanding banking infrastructure, offering appropriate financial products, making extensive and intensive use of technology and through advocacy and active stakeholder participation.

    With a view to furthering the financial inclusion initiative, Bank has expanded its reach in more than 9900 villages across the country through the Business Correspondent model during the F.Y.2013-14. The achievements have been summarized below:

    Branch opening under ABEP 2013-14:

    As per the Annual Branch Expansion Plan (ABEP) for the F.Y.2013-14, Bank has already opened 271 new Branches. Out of the above, 78 Branches have been opened in un-banked rural centers.

    BC Outlets: Bank has opened BC outlets in 7337 un-banked villages having population of less than 2000 during the F.Y. 2013-14. A total of 9921 BC outlets are now operational in the un-

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  • banked villages. 4058 BC Agents are engaged to service the FI customers in these villages.

    Ultra Small Branches: Bank has opened 1758 Ultra Small Branches in the CSP locations where the Branch officials are visiting with Laptops having VPN connectivity to the CBS.

    On-line transaction in BC outlets:

    lBank has rolled out real time 'On-line' transaction facility in st2290 BC Outlets opened in the 1 phase. New BC Outlets have

    been opened with 'Online' services only.

    l2.5 Million no frill accounts have been opened with the help of these BC Agents who have mobilized Rs. 24.34 crore deposits as at the end of March'14.

    Direct Benefit Transfer:

    Leveraging the Aadhaar platform and using the BC infrastructure Bank has successfully rolled out Direct Benefit Transfer (DBT) in 121 identified Districts. Cash subsidy to the tune of Rs.23.77 crore has been disbursed through APBS/NACH channel.

    Lead Bank Scheme

    The Bank is the Convener of State Level Bankers' Committee (SLBC) in the State of West Bengal and Tripura. It has assumed lead responsibility in 34 districts spread over four states; 10 districts in West Bengal,12 districts in Assam, 4 districts in Manipur and 8 districts in Tripura.

    As Lead Bank of the State, the Bank has been actively involved in formulation and finalization of Annual Credit Plan( ACP) for the State which is embedded in the Lead Bank Scheme and has been taking up suitable action plans for implementation of different socio economic activities keeping close liaison with the State Government authorities .

    The year 2013-14 had been eventful for the bank as SLBC Convener for both West Bengal and Tripura. The SLBC meetings organized in Tripura State have been attended by dignitaries like Shri Manik Sarkar, Hon'ble Chief Minister and Shri Badal Choudhury, Honorouble Finance Minister of the State, Regional Director, RBI and the Principal Secretaries of Line Department of the State.

    Dr.Amit Mitra, Hon'ble Finance Minister of West Bengal, Regional Director, RBI, CGM, NABARD, Director, DFS, MoF, GoI and the Principal Secretaries of Line Deptts. of the State attended all the SLBC meetings organized in the West Bengal State during the year 2013-14.

    Under leadership of the Bank the following achievements took place during the year in the State of West Bengal and Tripura.

    lIn both the states of West Bengal & Tripura the unbanked villages identified and allotted to banks under FIP having population of less than 2000 have been covered under the target set during the year 2013-14 by opening of banking outlets. In West Bengal, out of target of 8405 villages, all the banks have covered 11602 villages through banking outlets during the year 2013-14 and in Tripura all the identified villages numbering 619 have already been covered through banking outlets during the year 2013-14.

    u E v i M 9921 +=]] {Sx E V *

  • lThe Roadmap for covering the villages through banking outlets have been prepared and uploaded in the SLBC (West Bengal) websites.

    lThe Annual Credit Plan for 2014-15 for both West Bengal and Tripura were finalized during the year and made effective

    stright from 1 April, 2014.

    CORPORATE SOCIAL RESPONSIBILITY

    CSR has been assuming greater importance in the corporate world, including the banking sector. Over the years, we at United Bank of India, have integrated CSR principles with the Bank's financial, promotional and development assistance to the Priority Sector, industrial growth, infrastructure development, as well as our own internal functioning through good corporate governance practices. Our CSR pillars are Sustainable Banking, Environment, Social Commitments, Human Resources Development and Stakeholders Engagements.

    We acknowledge that lending to MSME sector, Priority Sector including Education Loans has significant sustainability impact. Responsible banking, along with realization of economic benefits and protection of environment form an integral part of our CSR strategy. For instance, we do not provide credit to Ozone depleting industries. We extend credit to industrial units only after they obtain 'No Objection Certificate' from the Pollution Control Board, wherever required.

    An important plank of our CSR framework has been to widen and deepen the process of financial inclusion by way of purveying micro credit to the disadvantaged sections, such as women, minorities and backward classes in rural, unorganized and weaker section of the society.

    Rural Self-Employment Training Institute (RSETI) :Bank has so far set up 12 RSETIs in the states of West Bengal, Assam and Tripura to impart training to the prospective entrepreneurs from the downtrodden community of the society.

    Up to 31.03.2014, these institutes have imparted training to 33445 rural youths /women of which 23600 trainees are self employed and 2198 trainees are wage employed. Out of 23600 self employed trainees 13338, trainees have got loan from Banks. These institutes are providing post training support (Escort Services) including arrangement of loan from our Bank branches to enable the trainees to set up their own ventures.

    FLCC: Bank has also set up 38 Financial Literacy Centers in the states of West Bengal, Assam, Tripura and Manipur to extend financial literacy and credit counseling services to the poorer section of the society. In the Financial Year 2013-14, these FLCs conducted 1612 no of Outdoor Activity, wherein 40489 persons participated and also conducted regular Indoor activity wherein 12771 persons participated.

    United Bank Socio Economic Development Foundation th(UBSEDF) was established on 30 March 2007 with the

    objective of promoting and carrying out social and economic developmental activities and rendering assistance to weaker and under privileged section of the society in terms of decision taken

    thby the Board of Directors of the Bank in its meeting held on 18

    EM Exp E v M E { Ex E B b{ i EE BB ({S M) E

  • December, 2006, towards discharging corporate social responsibility of the Bank.

    Till the Financial Year 2013-14, the Trust has undertaken various welfare activities involving total assistance of Rs. 138.02 Lac in 62 cases, Year wise break up of which is furnished below.

    Year No. of Units Amount of Assistance (Rs/lacs)

    2007-08 8 6.50

    2008-09 8 7.21

    2009-10 7 8.05

    2010-11 16 49.39

    2011-12 6 17.40

    2012-13 9 16.45

    2013-14 8 33.02

    TOTAL 62 138.02

    A few important projects assisted through UBSEDF are, setting up of Arsenic free drinking water plant at Dharampur, 24 Parganas (North), construction of concrete roof of the class rooms of Dakshin Kamarpole F.P.School at 24 Parganas (South) district, setting up Diagonistic Clinic for economically weaker section of the society at Khardah, 24 Parganas (North), self employment unit for the women life convicts of Alipur Correctional Home (Kolkata), construction of Hostel Building and purchase of furniture for physically and mentally challenged children at Duliajan, Assam, providing computers to Kamala Devi Saraswati Shishu Mandir, Meerut for girls students. Assisting Bharat Sevashram Sangha, Varanasi for purchase of an ambulance and assisting Bijoy krishna Ashram Relief Society, Netaji Eye Hospital, Sarsuna for purchase of one ophthalmological Ultra sound A/B Scan instrument etc.

    ORGANIZATION & SUPPORT SERVICES

    Branch Network

    With the opening of 272 branches during the year 2013-14, the total number of branches stands at 2001 as on 31.03.2014 spreading across all the States of the country consisting of 799 Rural (39.93%), 409 Semi-urban (20.44%), 461 Urban (23.04%) and 332 Metro (16.59%) branches. The Bank has also 4 Extension Counters. The Bank has 35 Regional Offices across the country. State wise position of opening of branches during 2013-14 is as under:

    State No. of branches branchesopened opened

    Assam 50 Chhattisgarh 6

    Arunachal Pradesh 1 Maharashtra 2

    Tripura 10 Gujarat 9

    West Bengal 64 Tamil Nadu 15

    Bihar 9 Dadra & NH 1

    State No. of

    vE |{i M E i |nx Ex E =q 30 S 2007 E

  • State No. of State No. of branches branchesopened opened

    Orissa 8 Kerala 6

    Jharkhand 6 Karnataka 10

    Rajasthan 16 Andhra Pradesh 10

    Uttar Pradesh 27 Himachal Pradesh 2

    Haryana 9 Madhya Pradesh 1

    Nagaland 1 Punjab 6

    Uttarakhand 3 TOTAL 272

    Out of 272 Branches opened during the year 2013-14, 78 Branches (28.68%) have been opened in unbanked rural centers and 83 branches (30.51%) in Minority Concentration Districts (MCDs). The Bank has also opened 2 Regional offices at Ahmedabad and Jaipur during the year. Out of total 2001 Branches as on 31.03.2014, 884 Branches (44.18%) are located in 85 Minority Concentration Districts (MCDs) throughout the country. 60.37% of total Branches are located at rural and semi urban centers to cater to the people living in hinterland.

    Population group-wise Composition of Total Branch Network

    Location Number of Branches (% of total)

    31.03.2013 31.03.2014

    Metropolitan 330 (19.09%) 332 (16.59%)

    Urban 397 (22.96%) 461 (23.04%)

    Semi-Urban 324 (18.74%) 409 (20.44%)

    Rural 678 (39.21%) 799 (39.93%)

    Total 1729 2001

    Geographical location-wise Composition of Total Branch Network

    Location Number of Branches (% of total)

    31.03.2013 31.03.2014

    Eastern Region 1081 (62.52%) 1168 (58.37%)

    North Eastern Region 289 (16.71%) 351(17.54%)

    Western Region 73 (4.22%) 85 (4.25%)

    Northern Region 92 (5.33%) 125 (6.25%)

    Southern Region 77 (4.45%) 118 (5.90%)

    Central Region 117 (6.77%) 154 (7.69%)

    Total 1729 2001

    2013-14 E nx J M

  • Special Category Branches

    Branch Category Number of Branches

    31.03.2013 31.03.2014

    Service Branch 19 19

    Retail Hub 26 26

    ARM Branch 4 4

    Corporate Finance Branch 3 4

    Treasury Branch 1 1

    CPPC 1 1

    Cash Management Service Hub 1 1

    InfoTech Progress

    Virtualisation KC

    Bank has taken a green initiative by consolidating few physical servers into virtual environment for non-critical applications. By enabling virtual services, Bank has reduced the power consumption, carbon footprint and thereby enabling better server management in the Data Centre.

    Self-service Kiosk KC

    A new technology initiative of self-service kiosk services has been deployed in the selected branches. The services offered for Passbook printing, Cash deposit and Cheque deposit services.

    Payment Systems AB

    RTGS facility is extended to Bank sponsored RRBs through Bank's Participant Interface Facility of direct credit to loan account by Inward NEFT messages and additional Settlement Batch of 0800 hrs has been successfully incorporated at our end as per IDRBT/RBI instructions. One 'B' Category AD branch (Treasury Branch, Head Office) has been upgraded to 'A' Category AD branch during the FY 2012-2013. Also, 40 'B' category branches are using SWIFT facility. New SWIFT DC & DR setup has been implemented at Bank's DR Site (Vashi) and Bank's DC (Kolkata) respectively during the FY 2012-2013. Risk Module for Treasury operation using ITMS has been made operational. LC Operation has been made Live via SFMS in selected branches and all Regional Offices across the country. Around 485 Branches across the country are using MDSS system for collection of mini deposits for small investors through our authorized agents.

    CMS AS

    Bank has launched U-Connect an integrated portal for online registration for dematerialization of shares and a unique trading platform

    CTS KSR

    Bank has implemented CTS solution at Southern Grid covering all branches in the Southern Region. Also, a centralized inward cheque processing centre has been operational in Kolkata for handling all inward clearing instruments under Southern Grid. In addition to the above, 6 outward cheque scanning hubs are established for clearing outward instruments at the Regional Offices in and around Kolkata.

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    31.03.2013 31.03.2014

    19 19

    26 26

    4 4

    3 4

    1 1

    1 1

    1 1

  • Network KC

    Bank has implemented WAN optimization solution in all Branches to improve network performance. Bank has implemented VSAT links as second backup at selected single centre branches to provide network connectivity in situations like cable cut, exchange failure etc. Also, Bank has implemented High Speed Data connectivity using 3G at selected branches using latest mobile technology.

    Mail Messaging System KC

    Corporate Mail Messaging System with centralized archival solution covering all offices is in place.

    Bank Website and Intranet KC

    Bank's Intranet portal is used extensively for information sharing, knowledge management and online examinations. Bank has implemented Grievance online, Housing loan, Car loan and Personal loan on Bank's website as per directions of Ministry of Finance. These applications enable customers to make all requests online and permit online tracking.

    SOC & IT Security KC

    With the growing dependence on IT systems and exponential increase in transactions through electronic delivery channels, Bank has identified Information Security as the key area for sustenance of business. RBI guidelines on Information Security, Electronic Banking, Technology Risk Management and Cyber Frauds are taken as the guiding principles for management of Information Security in the Bank. Bank is actively pursuing to mitigate gaps to fully comply with RBI guidelines. Bank has engaged professional agency for providing Anti-Phishing, Anti-Pharming, Anti-Trojan and Anti-Malware Managed Services for Bank websites. Bank has implemented Security Operations Centre (SOC) by mapping all devices accessed in data centre and disaster recovery centre for 24x7 monitoring and recording of logs. The Database Activity Monitoring (DAM) management server and Database Firewall (X2500) has been installed and configured at both DC and DRC. Internet banking, CMS database, Finacle Core database in Data Centre and in Disaster Recovery Centre has been integrated with DAM server. SOC provides the centralized view of Information Security status and command centre for IS Security operations.

    Following enhancement has been made as part of fine tuning of Security Operations Centre:

    a. Generation of Internet Banking transaction count status on hourly basis to monitor availability of Internet Banking System.

    b. Generation of Internet Banking Beneficiary registration within Bank and other banks count status on hourly basis.

    c. Real-time rules have been created to detect presence of BOT (a type of malware) in network, which are communicating with their command control centre.

    d. Real-time dashboard has been created to monitor the critical link like DC-DR replication and ATM link.

    ]B E B +E x nIh Ij E J+ E B nIh Ob ]B vx M E *

  • e. Privilege user monitoring for database access is enabled and reported to concerned team for review.

    f. Antivirus daily update status monitored through SOC.

    g. Phishing dashboard is created to track any direct attack towards Bank's Internet Banking Web server.

    Biometric -KC

    Department of Financial services, Ministry of Finance directed all the Public Sector Banks to introduce biometric log-in for employees of the Bank to prevent incidence of authentication frauds. 1662 Branches have been successfully rolled out and implementation in remaining branches is in progress.

    ADC

    The Bank provides all the popular alternate delivery channels available in the industry, enabling its customers 24X 7 banking. The status of the channels as on 31.03.14 is as under:

    ATMs:

    685 ATMs have been deployed in the FY 13-14, thereby taking the total ATM count to 1602. Apart from this network, our customers can access all NFS / VISA ATMs in the country and abroad.

    Debit Cards:

    The total active debit card base of the Bank stood at 27.43 lac. The Bank is issuing both VISA & RuPay brand of cards. The cards are enabled for transactions at ATMs, shops & at e-commerce sites. Apart from this the Bank is issuing KCC debit cards for all its KCC borrowers and has also forayed in to chip based debit cards (EMV) for extra security.

    Internet Banking:

    A total of 1.70 lakh customers have been registered for internet banking through which they can perform a host of activities such as self user registration, account view, funds transfer, bill payments, purchases, tax payments, opening of term deposits etc on a round the clock basis from the comfort of their home / office.

    Mobile Banking:

    The mobile bank registration base of the Bank as on 31.03.14 stood at 39,726, consisting of an array of features like account view, funds transfer ( including IMPS ), bill payments, purchases etc on a round the clock basis.

    SMS based Account balance:

    Customers can know their account balance at any point of time through SMS by giving a missed call at 9015431345.

    Manpower Profile

    The total Staff strength of the Bank stood at 16499 as on March 31, 2014 as against 15479 last year.

    Category of Employees March 2013 March 2014

    Total No. of Employees 15479 16499

    Officers 6445 7550

    Clerks 6056 6306

    Sub -Staff 2978* 2643*

    *Excludes part-time employee

    P. b b+ + B]B E V i{h E { Ec xV Jx E B ]

  • The total staff strength comprises of 45.76% Officers, 38.22% Clerks and 16.02% Sub-Staff. Women employees numbering 3073 constitute 18.63% of the Bank's total staff strength.

    As a part of the effective succession planning, process for recruitment of Probationary Officers, Specialist Officers & Clerks were undertaken successfully during the year 2013-14, and 1232 Probationary Officers, 64 Specialist Officers and 1166 Clerks joined the bank.

    Inter cadre and inter scale promotions were successfully conducted during the FY 2013-14 and in total 851 number of employees were promoted to next higher cadre/scale.

    Training / Human Resource Development (HRD)

    Banking technologies are evolving at a rapid pace and Competence Development is the prime need of the bank by reinforcing the traditional banking skills with the new technology based skills. Major steps have been initiated to augment the capacity of the in house training system both quantitatively and qualitatively. Presently the Bank is having one Staff Training College at Kolkata and four Regional Training Centres at Guwahati, Bhubaneswar, Delhi and Mumbai where full time faculties are posted to conduct regular courses throughout the year. For the specialized subject like Government Transaction and Cash Management, Effective Delivery of Rural Credit, Micro Enterprises Development, Forex etc., training has been arranged during the year under the auspices of reputed institutes like RBI, IIBF Mumbai, BIRD, IDRBT, NIRD, IIBM Guwahati, FEDAI etc.

    Special Training Programmes were conducted with focus on creation of talent pool of officers in critical areas like Credit, Risk Management, Financial Inclusion, Management Development, Fraud Analysis, Forex etc. During the year 7414 employees comprising 5225 officers, 1832 clerks and 357 subordinate staff of the Bank attended in-house training.

    As per Govt of India guidelines, pre-promotion training for employees belonging to Scheduled Castes and Scheduled Tribes were conducted for 333 employees at Staff Training College, Kolkata, Regional Training Centers and other different locations. Bank has also conducted in-company Training Programmes during the year wherein 77 employees have participated. Bank had sent 107 officer employees for 69 different external training programmes. During the year Bank had sent 7 senior officers/top executives for 4 different overseas training programmes.

    Employee Welfare

    As a welfare measure, considering the aspect of health care for working employees along with dependent members of their families as also the retired employees of the Bank along with their spouse, the Bank has renewed the existing Mediclaim insurance schemes. Besides , the Bank has entered into tie-up arrangements with Vasan Eye Care taking the total number of such arrangements to 80 Hospitals and Diagnostic Centers located all over India to meet hospitalization / health check-up / diagnostic requirements of employees / retired employees at a concessional / competitive rate. The Bank has also renewed the tie up arrangement with Apollo Gleneagles Hospital, Ruby General Hospital, B.P. Poddar and Pulse Diagnostic Centre at Kolkata

    E E E ES 45.76 +vE, 38.22 {E + 16.02 +vxl ES *

  • Reservation Policy in respect of SC and ST

    The Bank has been meticulously following the government guidelines for reservation in employment/promotion in respect of specific reserved categories. All backlog vacancies in recruitment in all cadres have been filled up and at present there is no backlog vacancy in recruitment.

    The representation of SC and ST employees in total staff stood at 3058 (19%) and 1075 (7%) respectively as on 31.03.2014.

    During the year, 234 employees belonging to SC/ST category were promoted to next higher cadre. They constituted 29% of the total number of promotions, wherever reservation is applicable, effected during the year. The Bank had organized pre-promotion training programmes for the eligible employees from reserved categories prior to holding inter-cadre promotions in different cadres.

    Dependents of 16 deceased employees belonging to SC/ST category who died while in service were paid ex-gratia lump-sum amount to the tune of Rs. 88 lakh during the financial year. Quarterly meetings between the Top Management and SC/ST Employees Welfare Council of the Bank were held on regular basis during the year. Complaints received from individuals/organizations on SC/ST matters were looked into for early redressal of grievances.

    Saral Samadhan

    It is a unique employee grievance redressal scheme wherein a special portal has been made available on the Bank's Intranet Website so that all employees can conveniently register their grievances on-line. A reference serial number is being generated on registering a grievance and the employee can track the status. The HRM Department at Head Office takes up the issue with the concerned deptt. at HO/RO/branch for speedy redressal of grievance. Once the grievance is redressed the concerned employee is communicated about the same. Till date the success rate of grievance redressal is 83%.

    Customer Orientation

    The bank has taken several initiatives to remain customer friendly through providing prompt service, bringing in diversified technology supported products/services, responding to customer queries/ suggestions and redressal of customer complaints. The 'code of commitment to customers' issued by BCSBI is made available at bank's websi