BCSBI Annual Report-2017-18 · S.A.Q., Suryoday Small Finance Bank Ltd., Utkarsh Small Finance Bank...

Annual Report2017-18

BANKING CODES AND STANDARDSBOARD OF INDIA

www.bcsbi.org.in

PUBLISHED BY

Anand ArasChief Executive OfficerBanking Codes and Standards Board of IndiaC-7, 4th Floor, Reserve Bank of India BuildingBandra Kurla ComplexMumbai- 400051

Banking Codes and Standards Board of India

Governing Council

Chairman

A C Mahajan

Members

C Krishnan Rama Bijapurkar

Shubhalakshmi Panse Uday Phadke

Anand ArasChief Executive Officer

Banking Codes and Standards Board of India

Annual Report 2017-18Banking Codes and Standards Board of India

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BANKING CODES AND STANDARDS BOARD OF INDIAAnnual Report of the activities of BCSBI during the year 2017-18

Governing Council

The present Governing Council (GC) was last reconstituted by RBI with effect from December 14, 2014 for a period of three years ending on December 13, 2017. As per BCSBI’s rules and regulations, pending the reconstitution of the GC, the present GC will continue to helm and guide the affairs of BCSBI. During the year under reporting, there has been no change in the constituent members of the GC.

The GC which is vested with the powers of general superintendence, direction and control of the affairs and funds of BCSBI, held eight meetings during the year 2017-18. Several new initiatives/ strategies with regard to Code Monitoring Studies, Identification of Thrust Areas and drawing up of Annual Action Plan, including advising member banks to hold a select number of customer meets, etc. were discussed in the meetings and requisite resolutions passed.

Membership

During the year under review, 4 scheduled commercial banks (viz. Qatar National Bank S.A.Q., Suryoday Small Finance Bank Ltd., Utkarsh Small Finance Bank Ltd. and Capital Small Finance Bank Ltd.) have been enrolled as members of BCSBI. With these four additions and six deletions due to merger of five associate banks and Bharatiya Mahila Bank with State Bank of India (SBI), the total number of members stood at 133 as on March 31, 2018. The year saw several Small Finance Banks and Payment Banks evincing interest in becoming members of BCSBI. They have been advised of the procedural requirements for becoming members. BCSBI will continue its efforts to enlist eligible banks as members so that all bank customers benefit from the provisions of the Code of Bank’s Commitment to Customers and the Code of Bank’s Commitment to Micro and Small Enterprises.

During the year under review, an amount of `802 lakh was collected from members towards their annual membership fees. There were no arrears of membership fees. Names of member banks as on March 31, 2018 are listed in Annex I.

Monitoring of Code Implementation and visits to bank branches to assess implementation of the Codes

BCSBI, apart from its main task of evolving and periodic reviewing of Codes for customer service in banks, also looks into the aspect of ongoing monitoring of implementation of the Codes by the member banks. BCSBI has been monitoring the implementation of Code provisions by examining Annual Statement of Compliance (ASC) which itself is a self-certified statement submitted by banks covering status of implementation of some of the important provisions of the Codes as at the end of December. In addition to this, BCSBI has also adopted a system of conducting visits to select bank branches/ processing centres to verify


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the position regarding ground level implementation of the Code of Bank’s Commitment to Customers and the Code of Bank’s Commitment to Micro and Small Enterprises (MSE) as a tool for on-site monitoring. Such visits to branches for verification are confined to a sample of branches selected at random and are undertaken by authorized representatives of BCSBI, who record their observations in a structured questionnaire on important Code provisions. During such visits, BCSBI representatives also interact with a few customers of the bank branches and obtain their feedback. During the year under reporting, they visited 460 select branches of Regional Rural Banks and collected insightful information on Code compliance by these banks.

In the year 2017-18, BCSBI, for the first time, conducted an exclusive round of visits to the branches of Regional Rural Banks (RRBs). Authorised representatives of BCSBI visited as many as 460 branches of 28 member RRBs, each having a branch network of 300 and above, in October 2017. During the visits, feedback about their banking experience was obtained from 1392 customers. The findings of branch visits and customers’ response were taken up with the banks concerned. It was followed up with a conference of Chairmen of these RRBs, held on February 9, 2018, where the findings were discussed in detail and the banks were urged to chalk out an action plan for further improvement in implementation of the Codes.

The ASCs that are received so far are under process and the preparations for the ensuing Code Compliance Rating – 2019 are undertaken. Additional inputs, if any, for BCSBI’s studies, etc. are also sought along with the ASCs.

Code of Bank’s Commitment to Customers

The Code of Bank’s Commitment to Customers was first introduced in the year 2006 and revised in 2009 and 2014. As stated in the last Annual Report, a fresh review of the Code was done during the year under reporting. A Working Group comprising senior officials nominated by RBI, IBA, member banks and depositors’ association was constituted for the purpose. The Working Group met four times and after detailed discussions, made various suggestions. These and further suggestions made by the RBI, IBA and the GC were then considered for finalisation. A draft code duly vetted by RBI/ IBA was prepared on the basis of these suggestions and approved by the GC.

The revised Code became operational in January 2018. Like its earlier versions, the Code sets minimum standards of banking practices when dealing with individual customers. The Code contains obligations of banks towards the customers in their day to day banking operations.

In the revised Code, the Charter of Customer Rights has been integrated with Key Commitments to make it comprehensive. Operational changes that characterized the digital and mobile banking space over the last three years have been captured, including safeguards to be exercised by the customers. All the relevant RBI guidelines pertaining to customer service, including the recent ones on customer’s Limited Liability for Unauthorised Electronic


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Transactions and Doorstep Banking for senior citizens, are incorporated.

Thematic Studies on the Codes and Customer Service related matters

BCSBI undertook certain studies around select themes relating to Code provisions and also certain other important customer service related areas. During the year 2017-18, BCSBI conducted the following studies:

1) Study of Best Practices followed by High Ranked Banks under the parameters of ‘Information Dissemination’ in the BCSBI Code Compliance Rating 2017:

A quick study of four top scoring banks in Code Compliance Rating, 2017 was carried out to learn the best practices followed by these banks for effective “Information Dissemination.” The Study was carried out in August 2017 and the best practices related to a) responsibility for display requirement of the Comprehensive Notice Board (CNB), b) availability of folders on policies, c) cut-off time for same day clearing of instruments, d) notice for Branch Level Customer Service Meeting, e) monitoring of implementation of display requirement in branches, f) training of Branch Managers/ Staff, etc. were shared with Managing Director/ Chief Executive Officer of 51 Banks covered in the Code Compliance Rating, 2017.

2) A study of the methodology of select banks to train the staff attending to customers in branches in the relevant topics relating to Codes:

In the Code Compliance Rating 2017, it was observed that in most cases the staff at the front desk was not fully aware of the Bank’s Code of Commitment to its customers. Accordingly, a study on Best Practices prevailing in Member Banks for training their frontline Officers/ staff regarding Customer Service and BCSBI Codes was conducted through data collection from 21 Public sector banks, 6 Private sector banks and 2 foreign banks. After analysing the information received and establishing the linkage between the training methods in banks and the rating received by them in Code Compliance Rating 2017, BCSBI compiled the best practices followed by banks and shared the same with them. The best practices suggested for training are: a) including a detailed session on Codes and Customer Service in their induction training for Officers/ Staff, b) imparting training to all frontline officers/ staff at least once a year, c) making passing in e-module compulsory for frontline officers/ staff with at least 80% score and d) having a scheme for encouraging officers/ staff to undertake the certificate course on Customer service and Banking Codes and Standards conducted by IIBF. As a part of actionables of the study, BCSBI has prepared and shared with member banks an e-module on Codes for imparting training to frontline officers/ staff and Question Banks for evaluating their knowledge of Codes. It is also extending faculty support wherever possible to Banks for training on the two Codes.


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3) Pilot study to assess customers’ opinion on charges and penalties levied by banks for the basic banking services:

At the behest of Consumer Education and Protection Department of Reserve Bank of India, a pilot study to assess customers’ opinion on charges and penalties levied by banks for the basic banking services was undertaken by BCSBI in August-September, 2017. For this purpose, feedback from 635 customers of 30 banks was obtained from the city of Mumbai and its satellite towns. A report on the findings of this study was submitted to RBI.

Resolution of Systemic Issues

BCSBI receives a number of complaints, though it is not a complaint redressal organization. However, these complaints and Awards of Banking Ombudsmen received at the BCSBI are studied to find out whether there is any systemic deficiency which can be remedied. During the year under reporting, BCSBI received 1076 complaints, as against 878 in the preceding year. All the complaints received are classified into twelve categories, based on the issues raised in the complaints. An analysis of the complaints indicates that most of the complaints pertained to deposits, loans and advances and ATM/ Debit cards. The profile of complaints is given in Annex II.

BCSBI at a Glance

Particulars 2016-17 2017-18

Members of BCSBI

Banks admitted as members during the year

Applications in process for membership

Participation in Town Hall Meetings/ Customer Awareness Programmes/ Training Programmes

Workshops/ Conferences/ Seminars

Customer Meets organised by BCSBI

Meeting with Bank Officers on Code Implementation

Branches/ Centralised Processing Centres visited to look into Code implementation

Monitoring Studies – Branches/ Units visited

Complaints received and dealt with

135

2

-

19

4

11

12

2733

57

878

133

4

-

29

5

21

14

460^

8

1076

^BCSBI conducted the first ever Code Compliance Survey of 28 select Regional Rural Banks involving 460 branches.


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Shri A C Mahajan, Chairman, BCSBI addresses the officers of banks at Jalandhar. Seated from left are Shri Gagandeep Singh, Manager, TransUnion CIBIL Ltd. and Shri Anand Aras, CEO, BCSBI

Shri A C Mahajan, Chairman addresses the Customer Meet at Kolkata. Seated on the dais are Smt.Shruti Sinha, TransUnion CIBIL Ltd., Shri Anand Aras, CEO, BCSBI, Smt. Reena Banerjee,

Banking Ombudsman and Shri Vinay Gandotra, GM, United Bank of India


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Seen at the Customer Awareness Meet organized at Raipur on October 9, 2017, are from left Smt. Hemalatha Rajan, SVP, BCSBI; Shri Deepak Dubey, DGM, SBI; Shri Keshab Korkora,Banking Ombudsman, Raipur; Shri Anand Aras, CEO, BCSBI; Shri Brahm Singh, DGM, SBI and Shri Yogesh Tarate, TransUnion CIBIL

A scene from the skit performed during “Know Your Rights” Programme organized at Khariar, Odisha on October 10, 2017

A cross section of the audience


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Seen at the Customer Meet organized at Ajmer are from left Shri K P Singh, Chairman, Baroda Rajasthan Gramin Bank (BRGB), Shri Anand Aras, CEO, BCSBI and

Shri Vivek Sabharwal, TransUnion CIBIL Ltd.

Smt. Jyoti Sharma, SVP, BCSBI addresses the Customer Meet at Barabanki. Others from left are Shri Mukul Saxena, GM, SBI, Shri S B Singh, Chairman, GBA and Shri P K Agrawal, SVP, BCSBI


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Smt. Sati Nair, SVP, BCSBI addresses the Customer Meet at Thrissur. Seated from left are Shri Kanakambaran, LDM, Canara Bank; Shri C K Girish, AGM, Canara Bank; Shri S M Pillai,

SVP, BCSBI and Ms. Asha Jain, Manager, TransUnion CIBIL Ltd.

Shri Arun Shiravadekar, SVP, BCSBI addresses the Customer Meet at Agartala while Shri S K Nayak, SVP, BCSBI and Shri A K Chowdhury, Chief Manager, United Bank of India look on




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Conference of Principal Code Compliance Officers

The annual Conference of Principal Code Compliance Officers (PCCOs) representing all member banks of BCSBI was held on May 30, 2017 in Mumbai. Shri S.S. Mundra, Deputy Governor (DG), Reserve Bank of India (RBI) delivered the keynote address. The meeting was also addressed by Shri A.C. Mahajan, Chairman, Shri C. Krishnan and Shri Uday Phadke, members of GC of BCSBI and Shri S.V. Patil, Deputy General Manager, Consumer Education and Protection Department (CEPD), RBI. Shri Anand Aras, Chief Executive Officer(CEO), BCSBI also addressed and interacted with the participants.

Shri Mundra stated that during the past 11 years of its existence, BCSBI had played a pivotal role in enhancing awareness about customer service in banks. Referring to the BCSBI’s rating of member banks on Code compliance, he emphasised that it will instill a sense of competition among member banks for achieving a higher level of customer service. The Deputy Governor expressed concern that the number of complaints received at the offices of the Banking Ombudsmen continued to rise and urged the PCCOs to take effective steps like introducing a query portal or FAQ for creating greater awareness and understanding of the BCSBI Codes amongst the front line staff. He focussed on a few important measures which the BCSBI, the PCCOs and the Banks could initiate to further the cause of customer service in the sector. He stressed on the updation of Codes and added that Banks should take ownership of Business Correspondents that they employ and also put in place appropriate grievance redressal mechanism. While acknowledging the role of BCSBI in the area of customer protection and in formulation of policies for elimination of customers’ grievances, he opined that it is imperative to design an architecture where BCSBI, Banking Ombudsmen (BOs), Internal Banking Ombudsmen (IBOs) and PCCOs complement each other’s efforts.

Shri A.C. Mahajan, Chairman observed that though the Codes are developed by BCSBI, the customer belongs to the Bank. Hence it was all the more imperative that Banks adhere to the Codes and protect the interest of their customers. According to the Chairman, the increase in the number of complaints was mostly due to lack of awareness among the staff members.

Spreading Awareness of the Codes

The Codes are commitments of banks towards their customers. While spreading awareness of the Codes among the staff and customers is the primary responsibility of banks, BCSBI supplemented their efforts by organizing a few “Customer Meets” at different places such as Kolkata, Panjim, Ajmer, Barabanki (Uttar Pradesh), Indore, Mysore, Bhopal, Mandar (Jharkhand), Rohtak, Agartala, Siliguri, etc. This year, meetings have been organised mainly in Tier II and Tier III cities. Quite a few of these meetings were held in association with TransUnion CIBIL Ltd. As the banks’ frontline staff plays a key role in spreading awareness of the Codes, it is also felt necessary to educate and enhance their level of awareness through separate meetings for them. Towards this, meetings were organised for bank officers in various parts of the country, such as Bengaluru, Ranchi, Chandigarh, Coimbatore, Patiala, Thrissur, Agartala etc.


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In addition to the above, the CEO and other officials of BCSBI participated in the Awareness Programmes organized by Banking Ombudsmen of RBI and Banks. BCSBI has provided faculty support to training establishments such as Indian Institute of Banking and Finance (IIBF), Reserve Bank of India Zonal Training Centre, New Delhi, Bank of Baroda Zonal Office, Pune, etc.

Although BCSBI has been organising customer meetings/ townhalls for spreading awareness of the Codes and participating in similar meetings hosted by RBI/ Banking Ombudsmen and member banks, the magnitude of the task is huge and calls for concerted efforts by all concerned. It may be added that over the last 4 years, BCSBI has conducted 50 to 60 meetings and participated in about 150 meetings/ townhalls conducted by RBI/ Banking Ombudsmen/ member banks which were attended by approximately 50,000 customers. This number pales into insignificance when compared to the total number of bank accounts estimated at about 60 crores. Against this backdrop, a new policy initiative taken by BCSBI makes it mandatory for member banks to hold a stipulated number of customer meets in a year from April 2018 onwards, linked to their branch network, subject to a minimum number of meetings. In order to ensure greater compliance, banks will be incentivised by adding this as a separate group parameter in BCSBI Code Compliance Rating Model with appropriate weightage. This is also expected to enable member banks to transcend to a higher rating level, say from ”Average’’ to ”Above Average” or “High”. This measure is expected to go a long way in elevating the level of customer awareness.

“Know Your Rights” Programmes

As you may recollect, it was reported in the last year’s Annual Report that BCSBI for the first time organized a “Know Your Rights” programme for underprivileged women in Kerala in association with Kudumbashree (NGO) on Jan 23, 2017. The programme focused on simplifying the technicalities of the banking Codes through a skit. The Programme has since gathered momentum and three more such programmes were organised in 2017-18 as described below:

The second “Know Your Rights” Programme was held in Kishangarh of Ajmer district. This event, in association with Lok Samvad Sansthan (NGO), was organized to empower 200 underprivileged daily wage workers in the marble industry who were new to the banking system. The session focussed on familiarising the audience with the Banking Codes in a simple language through a skit and a puppet show.

The third “Know Your Rights” Programme was held in Khariar village (Odisha) in association with Sahabhagi Vikash Abhiyan (NGO) to empower 400 small and marginal farmers with their banking rights. The farmers were informed of their rights as a bank customer through a folk dance followed by an interactive quiz in local dialect to assess their understanding of the same.

The fourth “Know Your Rights” Programme was held in Siliguri in association with workers in Singhi Jhora tea estate, to empower 200 tea plantation workers, mostly women, with their rights as a bank customer. The plantation workers were made aware of their rights as a bank customer through a programme in local dialect followed by an interactive quiz in local language to assess the understanding.


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Animation film based on Pictorial booklet of basic rights contained in the Code of Bank’s Commitment to Customers:

Based on the pictorial booklet on Codes, published in the preceding year, an animation film in Hindi covering 11 basic rights of bank customers like ease of opening BSBD account, nomination facility, activation of dormant accounts, loss of debit card, grievance redressal mechanism etc. was produced by BCSBI. The film has been shown at several customer meetings and it received good feedback from viewers.

The pictorial booklet is now available in several vernacular languages besides English and Hindi and Banks are encouraged to distribute the same to marginalised and poorer sections of customers in Customer Meets to make them aware of their rights.

BCSBI Newsletter-“Customer Matters”

The quarterly Newsletter “Customer Matters” was launched in the year 2009 with the main objective of educating and increasing awareness of the rights of bank customers with the ultimate goal of customer satisfaction. Its coverage includes changes in regulations pertaining to customer service areas in the banking industry along with recent developments in that space.

The newsletter also highlights the activities of BCSBI aimed at increasing the awareness of the Banking Codes and Standards developed by it. During the year, the Newsletter covered various relevant topics like ‘Rating of Banks on Code Compliance 2017’, ‘Digital Banking’, ‘Mis-selling of Financial Products’ and ‘Revision of Code of Bank’s Commitment to Customers, 2018’.

A guest column was introduced this year and many topics like ‘’Challenges in Customer Service in Digital India”; “Customer Service...The Key Differentiator” ; “Customer....The Most Important Stakeholder” ; “Service Irritants for Banking Customers....An Outside-In Approach to Handle Customer Discomforts” were covered by senior bankers for the benefit of members.

Funds Position

During the year under review, BCSBI has expended an amount of `328.13 lakh. This was partly met out of Public Awareness Fund (PAF) created in previous years and partly from interest income from the Corpus Fund as detailed below:

(a) Transfer from PAF ......................................................... `189.85 lakh

(b) Part amount of interest earned during the year .............. `138.28 lakh

A part of unspent interest income amounting to `195.28 lakh has been transferred to Public Awareness Fund to be spent on the objectives of the BCSBI Trust during the next five years and remaining `58.86 lakh is excess over income to be carried over to next year.


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As the funding support from RBI has ceased from the year 2016-17 onwards, BCSBI will be required to meet all its expenditure out of income generated from the funds invested. For the year 2017-18, Members’ contribution was retained at `800 lakh as of previous year to be contributed by each member in proportion to their Gross Domestic Assets as on March 31, 2016 subject to a minimum contribution of `50,000/-. As in the past, the entire contribution made by the member banks in the form of registration fees and annual membership fees has been credited to the Corpus Fund as directed by them.

A decision on the amount of membership fee to be collected from member banks for the year 2018-19 is yet to be taken pending the decision of Advance Ruling Authority of GST on applicability of the same to BCSBI.

As on March 31, 2018, the accumulated Corpus Fund amounted to `4597.42 lakh. As in previous years, BCSBI will continue to build up the Corpus steadily with a view to become more self sufficient and manage future capital and revenue expenditure. As on March 31, 2018, BCSBI’s investments stood at `4005.15 lakh comprising of `35.00 lakh in GoI securities and `3970.15 lakh in Term Deposits with Member Banks. During the year, total income from investments amounted to `392.41 lakh.

Acknowledgements

BCSBI wishes to thank all the stakeholders including the top management of RBI and its Consumer Education and Protection Department for their continued guidance and support in discharging the responsibility cast on the BCSBI and associating it in the awareness programmes and town halls organized by various departments of RBI/ Banking Ombudsmen. BCSBI also wishes to thank Indian Banks’ Association and all Member Banks for their support and co-operation.


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Sl.No. Name of the bankScheduled Commercial Banks

1. AB Bank Ltd.2. Allahabad Bank3. Andhra Bank4. Axis Bank Ltd.5. Bandhan Bank Ltd.6. Bank of America N A7. Bank of Baroda8. Bank of Ceylon9. Bank of India

10. Bank of Maharashtra11. Bank of Nova Scotia12. Barclays Bank PLC13. BNP Paribas14. Canara Bank15. Catholic Syrian Bank16. Central Bank of India17. Citibank N A18. City Union Bank Ltd19. Corporation Bank20. Credit Agricole Corporate and Investment

Bank21. DBS Bank Ltd22. DCB Bank Ltd.23. Dena Bank24. Deutsche Bank AG25. Dhanlaxmi Bank Ltd.26. Doha Bank QSC27. Federal Bank Ltd28. HDFC Bank Ltd.29. HSBC Ltd30. ICICI Bank Ltd.31. IDBI Bank Ltd.32. IDFC Bank Ltd.33. Indian Bank34. Indian Overseas Bank35. IndusInd Bank Ltd.36. Jammu & Kashmir Bank Ltd37. JP Morgan Chase Bank N A38. Karnataka Bank Ltd.39. Karur Vysya Bank Ltd40. Kotak Mahindra Bank Ltd.41. Krung Thai Bank PLC42. Lakshmi Vilas Bank Ltd43. Mashreq Bank PSC44. Nainital Bank Ltd45. National Australia Bank

Sl.No. Name of the bank46. Oriental Bank of Commerce47. Punjab & Sind Bank48. Punjab National Bank49. Qatar National Bank S.A.Q.50. RBL Bank Ltd51. Royal Bank of Scotland52. SBM Bank (Mauritius) Ltd.53. Shinhan Bank54. Societe Generale55. Sonali Bank Ltd.56. South Indian Bank Ltd57. Standard Chartered Bank58. State Bank of India59. Syndicate Bank60. Tamilnad Mercantile Bank Ltd.61. UCO Bank62. Union Bank of India63. United Bank of India64. Vijaya Bank65. Yes Bank Ltd.

Scheduled Urban Co-operative Banks1. Bharat Co-operative Bank (Mumbai) Ltd.2. Citizen Credit Co-operative Bank Ltd.3. Cosmos Co-operative Bank Ltd.4. Dombivli Nagari Sahakari Bank Ltd5. GP Parsik Sahakari Bank Ltd6. Janata Sahakari Bank Ltd.7. Kallapanna Awade Ichallkaranji Janata

Sahakari Bank Ltd8. The Karad Urban Co-operative Bank Ltd.9. Nagar Urban Co-operative Bank Ltd.

10. Nagpur Nagarik Sahakari Bank Ltd11. The Nasik Merchants Co-operative Bank Ltd12. Nutan Nagarik Sahakari Bank Ltd.13. Punjab & Maharashtra Co-operative Bank Ltd.14. Saraswat Co-operative Bank Ltd.15. SVC Co-operative Bank Ltd16. The Surat Peoples’ Co-op Bank Ltd17. Thane Bharat Sahakari Bank Ltd.18. Zoroastrian Co-operative Bank Ltd.

Regional Rural Banks 1. Allahabad U P Gramin Bank2. Andhra Pradesh Grameena Vikas Bank3. Andhra Pragathi Grameena Bank4. Baroda Gujarat Gramin Bank

Annex ILIST OF MEMBER BANKS OF BCSBI (As on 31.03.2018)


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Annex IIProfile of Complaints

Sr. No. Nature of Complaints 2016-17 2017-18

1 Deposit Accounts 223 276

2 Credit Cards 62 75

3 Pension 12 20

4 Tariff Schedule and Service Charges 59 96

5 Cheque Collection/ Clearing Cycle – Delayed Credit 26 20

6 ATM/ Debit Cards 94 144

7 CIBIL Records 5 15

8 Compensation Policy 0 7

9 Harassment by Recovery Agents 47 36

10 Loans and Advances 141 152

11 Insurance Products 14 12

12 Miscellaneous 195 223

Total 878 1076

Sl.No. Name of the bank5. Baroda Rajasthan Kshetriya Gramin Bank6. Baroda Uttar Pradesh Gramin Bank7. Bihar Gramin Bank8. Central Madhya Pradesh Gramin Bank9. Chaitanya Godavari Grameena Bank

10. Chhattisgarh Rajya Gramin Bank11. Dena Gujarat Gramin Bank12. Gramin Bank of Aryavarta13. Himachal Pradesh Gramin Bank14. J & K Grameen Bank15. Jharkhand Gramin Bank16. Karnataka Vikas Grameena Bank17. Kashi Gomti Samyut Gramin Bank18. Kaveri Grameena Bank19. Kerala Gramin Bank20. Langpi Dehangi Rural Bank21. Madhya Bihar Gramin Bank22. Madhyanchal Gramin Bank23. Maharashtra Gramin Bank24. Malwa Gramin Bank25. Meghalaya Rural Bank26. Mizoram Rural Bank27. Narmada Jhabua Gramin Bank28. Pallavan Grama Bank

Sl.No. Name of the bank29. Pandyan Grama Bank30. Pragathi Krishna Gramin Bank31. Prathama Bank32. Puduvai Bharathiar Grama Bank33. Punjab Gramin Bank34. Purvanchal Bank35. Rajasthan Marudhara Gramin Bank36. Saptagiri Grameena Bank37. Sarva Haryana Gramin Bank38. Sarva U P Gramin Bank39. Saurashtra Gramin Bank40. Sutlej Gramin Bank41. Telangana Grameena Bank42. Utkal Grameen Bank43. Uttar Bihar Gramin Bank44. Uttarakhand Gramin Bank45. Uttarbanga Kshetriya Gramin Bank46. Vananchal Gramin Bank47. Vidharbha Konkan Gramin Bank

Small Finance Banks1. Capital Small Finance Bank Limited2. Suryoday Small Finance Bank Limited3. Utkarsh Small Finance Bank Limited

Statement of Accounts for the year

2017-18


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INDEPENDENT AUDITOR’S REPORTTo The Trustees of Banking Codes and Standards Board of India

Report on the Financial Statements

We have audited the accompanying financial statements of Banking Codes and Standards Board of India (The Trust), which comprise the Balance Sheet as at 31st March 2018 and the Income and Expenditure Account of the Trust for the year ended on that date, and a summary of significant accounting policies.

Management’s Responsibility for the Financial Statements

The Trust’s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position and financial performance of the Trust in accordance with the section 32 of Bombay Public Trust Act 1950. This responsibility includes the design, implementation and maintenance of internal controls relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Trust’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing opinion on the effectiveness of entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by trust’s management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion:

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give true and fair view in conformity with the accounting principles generally accepted in India :

a. in the case of the Balance Sheet, of the state of affairs of the Trust as at 31st March, 2018; and

b. in the case of the Income and Expenditure Account of the Trust of the surplus for the year ended on that date.

Report on other Legal and Regulatory Requirements :

We report that,

1. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit;

2. In our opinion, proper books of account as required by law have been kept so far as appears from our examination of those books;

3. In our opinion, the financial statements dealt with by the report comply with the Accounting Standards issued by the Institute of Chartered Accountants of India.

4. The financial statements dealt with by this report are in agreement with the books of account.

For Mukund M. Chitale & Co.Chartered AccountantsFirm Reg No. 106655W

Place: MumbaiDate : June 26, 2018

Sd/-(A. V. Kamat)

PartnerMembership No: 39585


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BANKING CODES AND STANDARDS BOARD OF INDIABalance Sheet as on 31st March 2018

(As per Schedule VIII of Bombay Public Trusts Act, 1950)

As on 31st March, 2017

(`)

FUNDS & LIABILITIES As on 31st March 2018

(`)

As on 31st March, 2017

(`)

PROPERTY & ASSETS As on 31st March 2018

(`)Fixed Assets(Net of Depreciation) (Sch A)

Trust Funds or Corpus 1,56,375 Computer and Peripherals 4,53,920

29,93,49,000 Balance as per last Balance Sheet 37,95,02,000 53,400 Office Appliances 45,390

8,01,53,000 Add: Contribution received during the year (including registration fees)

8,02,40,000 45,97,42,000 14,505 Furniture & fixtures 13,055 5,12,365

37,95,02,000 Immovable Properties -

Investments - Other earmarked funds 1,77,70,414 Govt Securities(Cost) (Sch B) 35,00,000

- Loans (Secured or unsecured) -

Public Awareness Fund - Advances- 2,45,39,358 Balance as per last Balance Sheet 2,67,99,866 - To others- -

2,08,51,786 Less: Trd to Income & expenditure account 1,89,85,912 61,110 Prepaid Expenses 25,460

2,31,12,294 Add: Trd from Income & expenditure account 1,95,28,214 2,73,42,168

2,67,99,866 11,56,518 Income Tax- 15,48,522

Advance from Member Banks- 2,51,00,000 Membership Fee for the following year - 621 Unamortised premium on

GOI Securities -

Liabilities 11,660 Provision for Expenses 6,28,364

1,23,900 Professional and Audit Fees Payable 1,62,000

10,08,000 Survey Expense Payable -

1,07,800 TDS Payable 31,729

- Payable to IndusInd Bank 18,160 Interest Outstanding 85,655 Payable to ICICI Bank - 8,40,253 6,59,53,769 On Fixed Deposit with banks 8,74,09,122

13,37,015 5,80,796 On Government of India Securities 1,24,842 8,75,33,964

Income and Expenditure Account Cash & Bank Balances includingFixed Deposits (Sch C)

- Balance as per last Balance Sheet - 3,32,75,741 - Cash and Bank Balance 36,74,777

- Add : Surplus brought over from Income and Expenditure Account

58,86,299 58,86,299 31,37,15,632 - Fixed Deposit with Banks 39,70,15,632 40,06,90,409

43,27,38,881 Total 49,38,10,720 43,27,38,881 Total 49,38,10,720

Notes on Accounts - Schedule F The above Balance Sheet to the best of our belief contains a true account of the Funds and Liabilities and of the Property and Assets of the Trust.

For Banking Codes and Standards Board of India As per our report of even date For Mukund M. Chitale & Co.Chartered AccountantsFirm Reg No:- 106655W

Sd/-(A C Mahajan)Chairman

Sd/-(Anand Aras)Chief Executive Officer

Sd/-(A.V.Kamat)PartnerMembership No:- 39585

Place : MumbaiDate : June 25, 2018



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BANKING CODES & STANDARDS BOARD OF INDIAIncome & Expenditure Account for the year ended 31st March, 2018

(As per Schedule IX of Bombay Public Trusts Act, 1950)

Year ended 31st March

2017 (`)

EXPENDITURE Year ended 31st March

2018 (`)

Year ended 31st March

2017 (`)

INCOME Year ended31st March 2018

(`)

- To Expenditure in respect of Properties - - By Rent - -

29,442 Repairs and maintenance 52,065 By Interest

42,82,203 To Establishment Expenses (Sch D) 67,39,157 15,07,487 On Securities 3,93,706

69,53,221 To Remuneration to Trustees 67,49,305 3,59,614 On Savings Bank account 5,91,394

- To Legal Expenses 3,26,15,828 On Fixed Deposits with banks 3,77,27,311 3,87,12,411

46,000 To Audit Fees 60,000 On Income Tax Refund

- To Contribution and Fees - By Dividend -

To Amount written off - By Donation in cash or kind -

1,358 Premium on Govt Securities amortised 621 By Miscellaneous receipts -

33,753 By Premium on maturity of Government Securities

5,29,586

- To Miscellaneous expenses -

92,164 To Depreciation 2,26,336 2,08,51,786 By Transfer from Public Awareness Fund

1,89,85,912

2,31,12,294 To Amount Transferred to Public Awareness Fund

1,95,28,214 -

2,08,51,786 To Expenditure on the objects of the trust- Educational (Sch E)

1,89,85,912

To Surplus carried over to Balance Sheet 58,86,299

5,53,68,468 Total 5,82,27,909 5,53,68,468 Total 5,82,27,909

Notes on Accounts - Schedule F








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Schedule A BANKING CODES AND STANDARDS BOARD OF INDIA

Schedule to Balance Sheet as on 31st March, 2018Particulars Rate of

Dep. %

Gross Block Depreciation Net Block As on

01.04.2017 (`)

Addition (`)

As on 31.03.2018

(`)

As on 01.04.2017

(`)

Charge for the year

(`)

As on 31.03.2018

(`)

As on 31.03.2018

(`)

As on 31.03.2017

(`)Computer 40% 2,44,992 5,14,420 7,59,412 95,632 2,14,070 3,09,702 4,49,711 1,49,360

Printer 40% 9,219 – 9,219 6,940 912 7,852 1,367 2,279

Tally Software 40% 17,600 – 17,600 14,544 1,222 15,766 1,834 3,056

Knowledge Manangement Tool Software 40% 6,000 – 6,000 4,320 672 4,992 1,008 1,680

TOTAL 2,77,811 5,14,420 7,92,231 1,21,436 2,16,876 3,38,312 4,53,920 1,56,375

Office Appliances 15% 58,500 – 58,500 5,100 8,010 13,110 45,390 53,400

Furniture 10% 15,520 – 15,520 1,015 1,450 2,465 13,055 14,505

Total 3,51,831 5,14,420 8,66,251 1,27,551 2,26,336 3,53,887 5,12,365 2,24,280 Previous Year 82,482 2,69,349 3,51,831 35,387 92,164 1,27,551 2,24,280 –

Schedule BBANKING CODES AND STANDARDS BOARD OF INDIA

Schedule of Investments belonging to the Trust as on 31st March , 2018(As per Part III - Schedule VIII of Bombay Public Trusts Act, 1950)

(Amount in Rupees)

Date and year of preparation

Kind of investments Full description such as name of the company, distinctive

Nos. of shares and certificates, type of shares, etc. Date of redemption or repayment

Face Value Cost Rate of interest borne by

investments

1 2 3 4 5 6

At the beginning of the year(as on 1st April, 2017)

(i) Shares -

(ii) Bonds and Debentures -(iii) Deposits -(iv) Others -(v) Public Securities a) 7.49% GOI Securities 2017 1,20,00,000 1,14,70,414 7.49%

b) 7.99% GOI Securities 2017 28,00,000 28,00,000 7.99%c) 8.24% GOI Securities 2018 35,00,000 35,00,000 8.24%

Total 1,83,00,000 1,77,70,414

Add : Increase during the year (2017-18)

– –

Less: Decrease during the year (2017-18)

(i) Public Securities a) 7.49% GOI Securities 2017 1,20,00,000 1,14,70,414

b) 7.99% GOI Securities 2017 28,00,000 28,00,000

Total as on 31st March, 2018 35,00,000 35,00,000








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Schedule C BANKING CODES AND STANDARDS BOARD OF INDIA

Schedule to Balance Sheet as on 31st March, 2018(Amount in Rupees)

As on 31st March, 2017 Bank Accounts As on 31st March, 2018In Savings Account

97,83,184 - ICICI Bank Ltd. 1,29,820 2,34,78,476 - Yes Bank Ltd. 35,13,917

In Current Account 14,081 - Central Bank of India 31,040

3,32,75,741 Total(I) 36,74,777

In Fixed Deposits 11,33,15,632 - State Bank of India (formerly State Bank of Mysore) 11,33,15,632

5,48,00,000 - Vijaya Bank 5,48,00,000 7,96,00,000 - State Bank of India (formerly State Bank of Travancore) 3,41,00,000

95,00,000 - ICICI Bank 95,00,000 1,65,00,000 - Saraswat Co-op Bank Ltd. 2,00,00,000 2,00,00,000 - Lakshmi Vilas Bank 75,00,000 2,00,00,000 - RBL Bank 2,00,00,000

- - Yes Bank 2,97,00,000 - - IndusInd Bank 4,00,00,000 - - Federal Bank 1,01,00,000 - - Kotak Bank 4,00,00,000 - - Union Bank of India 1,80,00,000

[All accounts in the name of Banking Codes and Standards Board of India]

31,37,15,632 Total (II) 39,70,15,632

34,69,91,373 Total (I)+(II) 40,06,90,409

Schedule D BANKING CODES AND STANDARDS BOARD OF INDIA

Schedule to the Income and Expenditure Account for the year ended 31st March, 2018

Establishment Expenses(Amount in Rupees)

Year ended 31st March 2017

Particulars Year ended 31st March 2018

18,092 News Paper and Periodicals 19,903 - Lease Registration Charges 17,000 - Lease Rent 19,84,500

42,64,111 Professional fees (Staff) 47,17,754 42,82,203 TOTAL 67,39,157








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Schedule E BANKING CODES AND STANDARDS BOARD OF INDIA

Schedule to the Income and Expenditure Account for the year ended 31st March, 2018

EXPENDITURE ON THE OBJECTS OF THE TRUST

(Amount in Rupees)

Year ended31st March 2017

Particulars Year ended31st March 2018

Educational -

1,514 Field Manager Expenses -

33,67,245 Advertisement and publicity 53,80,263

346 Bank charges -

1,97,576 Catering and refreshments 2,17,389

93,825 Conveyance and car hire 1,00,811

3,104 Internet Charges 5,427

1,00,098 Postal courier 1,10,387

3,14,292 Printing and stationary 2,28,079

21,67,724 Seminar and conference expenses 38,08,488

78,01,741 Survey expenses 21,71,380

1,13,432 Telephone expenses 1,15,344

64,20,300 Professional fees (Staff) 64,54,951

1,95,005 Professional fees - Others 2,77,378

75,584 Web site maintenance 1,16,015

2,08,51,786 TOTAL 1,89,85,912








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BANKING CODES AND STANDARDS BOARD OF INDIA

Schedule F

SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS FOR THE YEAR ENDED 31st MARCH 2018A. SIGNIFICANT ACCOUNTING POLICIES :1. Method of Accounting:

1.1 The financial statements are prepared under the historical cost convention on the basis of going concern and in accordance with the Generally Accepted Accounting Principles in India (GAAP) and provisions of the Bombay Public Trust Act, 1950.

1.2 The Presentation of financial statements are in conformity with generally accepted accounting principles, requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates and the differences between actual results and estimates are recognized in the periods in which the results are known/ materialized.

1.3 The Financial Statements are prepared on accrual basis.

2. Revenue Recognition: Interest Income:

Interest income is recognized on accrual basis.

3. Corpus Fund : As per the funding proposal agreed with Reserve Bank of India, the trust continues to

build up the Corpus from registration and membership fees as Reserve Bank of India has ceased funding, as the trust has become self financed. The member banks have also desired that the entire contribution made by member banks in the form of Registration Fees and Membership Fees be credited to the Corpus. Accordingly, the Registration Fees and the Membership Fees are credited to the Corpus Fund during the year.

4. Fixed Assets: Fixed Assets are stated at cost less accumulated depreciation. Direct costs are capitalized

until fixed assets are ready for use. Capital work in progress comprises of the cost of fixed assets that are not ready for their intended use at the reporting date.

5. Depreciation: Depreciation on fixed assets is provided on written down value method at rates specified

in the Income Tax Act, 1961.

6. Investments : Long term Investments are stated at cost. Provision for diminution in value of long term

investments if any is made, if such diminution is other than of temporary nature.

Investments under Held to Maturity (HTM) category are carried at Acquisition Cost. The premium paid, if any, under this category is amortised over the residual life as per the guidelines of the Reserve Bank of India and the policy of the trust.


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7. Related Party Transaction : Disclosure is made as per the requirement of the AS -18 – Related Party Disclosures

and the same is given as part of Notes to Accounts.

8. Operating Leases : Rentals paid in respect of operating leases have been charged to Income and Expenditure

Account.

9. Impairment of Assets : An Asset is considered as impaired when at the Balance Sheet Date there are Indications

of Impairment and the carrying amount of Asset exceeds its recoverable amount (i.e. the higher of the assets Net selling price and Value in Use). The carrying amount is reduced to the recoverable amount and the reduction is recognised as an Impairment Loss in the Income & Expenditure Account.

10. Provisions, Contingent Liabilities and Contingent Assets : Provisions are recognized for liabilities that can be measured only by using substantial

degree of estimation. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates. Contingent liability is disclosed in case of possible obligation where the probability of outflow of resource is not certain. Contingent Asset is neither recognized nor disclosed.

B. NOTES TO ACCOUNTS :1. Related Party Discourse : Reporting Enterprise : Banking Codes and Standards Board of India

Name of the related parties and description of relationship :

Governing Council Members – a. A C Mahajan (Chairman);

b. C Krishnan;

c. Rama Bijapurkar;

d. Nalin M Shah (upto 12th February 2017);

e. Shubhalakshmi Panse;

f. Uday Phadke (From 14th February 2017);

g. Anand Aras (Chief Executive Officer).

Details of Related Parties transactions are as under :

Particulars Governing Council Members

2017-18 2016-17

` `

Remuneration to Chief Executive Officer 34,38,815 34,17,434

Remuneration and Sitting Fees to Governing Council Members

33,10,490 35,35,787


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2. Leases :

During the year the trust has entered into a lease agreement with Reserve Bank of India for the office premises for the period from July 2016 to June 2019. The rent for the period July 2016 to March 2018 amounting to `19,84,500/- (Previous Year – ` Nil) has been debited to Income and Expenditure Account for the year shown in Schedule D.

Total of future minimum lease payments for the following period :

Particulars As at 31st March 2018

As at 31st March 2017

` `

Not later than 1 Year 11,34,000 -

1-5 Years 2,83,500 -

Later than 5 Years - -

Total ` 14,17,500 -

3. Public Awareness Fund :

The Board has transferred an amount of `1,95,28,214/- to the Public Awareness Fund during FY 17-18 from the Income and Expenditure Account. Public Awareness Fund to the tune of `1,89,85,912/- was transferred to Income & Expenditure account during the FY 17-18 to the extent of expenditure incurred on object of trust.

4. With the introduction of Goods and Services Tax (GST) w.e.f. 1st July 2017 the Trust had made an application for Advance Ruling on the applicability of GST for membership fees. The matter is pending before Appropriate Authority.

5. Previous Year’s figures

The corresponding figures for the previous year are re-grouped/ re-classified, wherever necessary.

Signatures to Schedule A to F

For Banking Codes and Standards Board of India As per our report of even date For Mukund M. Chitale & Co.Chartered AccountantsFirm Regn. No. 106655W

Sd/-(A.C. Mahajan)Chairman


Sd/-(A. V. Kamat)PartnerMembership No. 39585


BCSBI Annual Report-2017-18 · S.A.Q., Suryoday Small Finance Bank Ltd., Utkarsh Small Finance Bank...

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