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yeQkeÀ Dee@]HeÀ Fbef[³ee BANK OF INDIA | Jeeef<e&keÀ efjHeesì& | Annual Report | 2005-2006

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yeQkeÀ Dee@]HeÀ Fbef[³eeBANK OF INDIA

HeÓeeve keÀe³ee&ue³e ë mìej neGme, meer-5, `peer' yuee@keÀ, yeebêe-kegÀuee& mebkegÀue, yeebêe (HetJe&), cegbyeF& - 400 051.Head Office : Star House, C-5, ‘G’ Block, Bandra-Kurla Complex, Bandra (East), Mumbai - 400 051.

met®evee NOTICE

SleÜeje met®evee oer peeleer nw efkeÀ yeQkeÀ Dee@]HeÀ Fbef[³ee kesÀ µes³ejOeejekeÀeW keÀer omeJeeR Jeeef<e&keÀDeece yewþkeÀ meesceJeej efoveebkeÀ 10 pegueeF&, 2006 keÀes oesHenj 2.30 yepes jecee JeeìgceueDee@ef[ìesefj³ece, efkeÀµeve®ebo ®esueejece keÀe@uespe, efoveµee Jeeíe jes[, ®e®e&iesì, cegbyeF& - 400

020. ceW efvecveefueefKele keÀe³e& kesÀ efueS Dee³eesefpele keÀer peeSieer ë

’yeQkeÀ kesÀ legueve-He$e ³eLee efoveebkeÀ 31 cee®e& 2006 SJeb Fmeer efoveebkeÀ keÀes meceeHle Je<e& kesÀefueS ueeYe SJeb neefve uesKee, uesKeeJeefOe ceW yeQkeÀ keÀer keÀe³e&HeĆeeueer Deewj keÀe³e&keÀueeHeeW kesÀmebyebOe ceW efveosµekeÀ ceb[ue keÀer efjHeesì& Deewj legueve He$e leLee uesKee Hejer#ekeÀeW keÀer efjHeesì& Hej®e®ee& keÀjvee“~

NOTICE is hereby given that the Tenth Annual General Meeting of theShareholders of Bank of India will be held on Monday, 10th July, 2006 at2.30 PM at Rama Watumull Auditorium, Kishinchand Chellaram College,Dinshaw Wacha Road, Churchgate, Mumbai – 400 020, to transact thefollowing business:

“To discuss the Balance Sheet as at 31st March, 2006 and the Profit andLoss Account for the year ended on that date, the Report of the Board ofDirectors on the working and activities of the Bank for the period coveredby the Accounts and the Auditors’ Report on the Balance Sheet andAccounts.”

mLeeve ë cegbyeF& (Sce. yeeue®ebêve) Place: Mumbai M. Balachandran

efoveebkeÀ ë 28.05.2006 DeO³e#e SJeb HeýebOe efveosµekeÀ Date : 28.05.2006 Chairman & Managing Director


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1. Hejes#eer keÀer efve³egefkeÌleyewþkeÀ ceW Yeeie uesves leLee celeoeve kesÀ nkeÀoej µes³ejOeejkeÀ DeHeves mLeeve Hej Yeeie uesvesleLee celeoeve nsleg SkeÀ Hejes#eer efve³egkeÌle keÀj mekeÀles nQ~ Hejes#eer HeÀece& keÀes HeÝeeJeeryeveeves kesÀ efueS mebyebefOele HeÀece& GmeceW efveOee&efjle mLeeve Hej Jeeef<e&keÀ Deece yewþkeÀ kesÀkeÀce mes keÀce 4 (®eej) efove HetJe& DeLee&le yegOeJeej 5 pegueeF&, 2006 keÀes ³ee GmemesHenues DeJeµ³e HeéHle nes peevee ®eeefnS.

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4. Heles ceW HeefjJele&veefpeve Mes³ejOeejkeÀeW kesÀ Heeme µes³ej FueskeÌìeefvekeÀ / Decetleeake=Àle ©He ceW nQ GvnW DeHeves HelesceW ³eefo keÀesF& HeefjJele&ve nes lees GmekeÀer met®evee Gvemes mebyebefOele menYeeieer efve#esHeeieej keÀesDeewj efpevekesÀ Heeme µes³ej Hel³e#e ©He ceW nQ Gvns DeHeves Heles ces HeefjJele&ve keÀer met®evee yeQkeÀkesÀ Hebpeer³ekeÀ SJeb µes³ej DeblejCe SpeWì keÀes efvecveefueefKele Heles Hej osveer ®eeefnS~

cesmeme& µes³ejHeés meefJe&mespe (Fbef[³ee) Heé. efue. ³etefveì ë yeQkeÀ Dee@]HeÀ Fbef[³ee,meeìce Fmìsmì, leermejer cebefpeue, yeQkeÀ Dee@]HeÀ yeæ[ewoe kesÀ THej, keÀeef[&veue iesefme³emejes[, ®ekeÀeuee, DebOesjer (HetJe&), cegbyeF& - 400 099.ìs. veb. ë 28215168, 28215169 He@ÀkeÌme ë 022-28375646F&-cesue ë [email protected]

5. ueeYeebµe keÀe Yegieleeveµes³ejOeejkeÀeW keÀes efveosµekeÀ yees[& Üeje Ieesef<ele ueeYeebµe keÀe Yegieleeve Jeeef<e&keÀ DeeceyewþkeÀ keÀer leejerKe mes 30 efoveeW kesÀ Yeerlej efkeÀ³ee peeSiee.

6. GHeefmLeefle He®eea-men-HeJesµeHe$eMes³ejOeejkeÀeW keÀer megefJeOee kesÀ ef}S GHeefmLeefle He®eea-men-He´JesµeHe$e Fme efjHeesì& kesÀmeeLe mebueive nw~ Mes³ejOeejkeÀeW / Hejesef#e³eeW/HeéfleefveefOe³eeW mes DevegjesOe nw efkeÀ JenefveOee&efjle mLeeve Hej nmlee#ej keÀjW Deewj yewþkeÀ mLeue Hej GHeefmLeefle He®eea-men-He´JesµeHe$e megHeto& keÀjs oW~ µes³ejOeejkeÀ kesÀ Hejes#eer / HeéfleefveOeer keÀes GHeefmLeefle He®eea-men-He´JesµeHe$e ceW Hejes#eer DeLeJee HeéfleefveOeer ceW mes Jen efpeme ©He ceW GHeefmLele nes jns neWGmekeÀe GuuesKe keÀj osvee ®eeefnS~

1. APPOINTMENT OF PROXYA shareholder entitled to attend and vote at the Annual General Meetingis entitled to appoint a Proxy to attend and vote on his/her behalf. TheProxy form, in order to be effective, must be received at the placespecified in the Proxy form not later than 4(four) days before the dateof the Annual General Meeting i.e. on or before the close of bankinghours on Wednesday, the 5thJuly, 2006.

2. APPOINTMENT OF AUTHORISED REPRESENTATIVENo person shall be entitled to attend or vote at the meeting as a dulyauthorised representative of a Company or any other Body Corporatewhich is a shareholder of the Bank, unless a copy of the Resolutionappointing him/her as a duly authorised representative, certified to betrue copy by the Chairman of the meeting at which it was passed,shall have been deposited at the Head Office of the Bank not less than4 (four) days before the Annual General Meeting i.e. on or before theclose of banking hours on Wednesday, the 5th July, 2006.

3. BOOK CLOSUREThe Register of the shareholders and the Share Transfer Register ofthe Bank will remain closed from Thursday, July 6, 2006 to Monday,July10, 2006 (both days inclusive), for the purpose of Annual GeneralMeeting and ascertainment of entitlement for payment ofdividend.

4. CHANGE OF ADDRESSShareholders holding shares in dematerialised form shouldcommunicate the change of address, if any, to their DepositoryParticipant. Shareholders who hold shares in physical form shouldcommunicate the change of address, to the Registrar and Share TransferAgent of the Bank at the following address :

M/s. Sharepro Services (India) Pvt. Ltd., Unit: Bank of IndiaSatam Estate, 3rd Floor, Above Bank of Baroda, Cardinal GraciousRoad, Chakala, Andheri (East), Mumbai - 400 099.Phone - 28215168/69 Fax:022-28375646E-mail: [email protected]

5. PAYMENT OF DIVIDENDPayment of dividend to shareholders as declared by the Board ofDirectors shall be made within 30 days from the date of AnnualGeneral Meeting.

6. ATTENDANCE SLIP-CUM-ENTRY PASSFor the convenience of the shareholders, Attendance slip-cum-Entrypass is annexed to this Report. Shareholders/ Proxy holders/representatives are requested to affix their signatures at the spaceprovided therein and surrender the Attendance slip- cum-Entry passat the venue. Proxy/Representative of a shareholder should state onAttendance slip-cum-Entry pass “Proxy” or “Representative” as thecase may be.

efìHHeefCe³eeb ë NOTES:


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DIRECTORS’ REPORT

The Board of Directors have pleasure in presenting the Bank’s AnnualReport along with the audited statement of accounts and the cash flowstatement for the year ended 31st March 2006.

PERFORMANCE HIGHLIGHTS

Operating Profit Rs.1701.22 crore.

Net Profit Rs.701.44 crore.

Capital Adequacy at 10.75 %.

Networth at Rs.4577.26 crore, grew by 13.24 %.

Book value per share Rs.93.77 (Rs.82.93) .

Gross NPA declined by Rs.677 crore (-21.44%). Gross NPA ratiodeclined to 3.72% from 5.53% at March-end 2005.

Net NPA declined by Rs.585 crore (-37.62%). Net NPA ratiodeclined to 1.49% from 2.80% at 31.03.2005.

Cash Recovery of Rs.721 crore towards NPA reduction.

Total business of the Bank increased to Rs.160594 crore, a growthof 18.14%. Domestic business grew by 20.31% to reach the level ofRs.131873 crore.

Total deposits of the Bank increased to Rs. 93932 crore, a growth of19.17%. Domestic deposits increased by 18.35% to reach the levelof Rs.77850 crore. Share of low cost deposits in domestic depositsincreased to over 40.64 % in FY 2006 from 40.06% in FY 2005.

Total gross credit of the Bank touched Rs.66662 crore (growth16.71%) with domestic credit recording growth of 23.27% to reachthe level of Rs.54023 crore.

Retail lending grew by 36.71% and contributed 38.12% of total non-food credit growth in FY 2006. Share of retail credit in Non-FoodCredit has gone upto 28 % at 31.03.2006 from 25.51% a year ago.

Priority sector lending at 49.08% of Net Bank Credit and Agriculturefinance at 19.58% surpassing national targets.

Export Credit registered a growth of Rs.514 crore i.e. 13.25%.

Shatabdi Krishi Vikas Card introduced.

Star Vidya Card (Visa Card) and Global Debit cum ATM card (MasterCard) introduced.

All the branches computerised.

Star Insta Remit (RTGS enabled remittance product) introduced forinter bank remittances.

Star e-remit product introduced for facilitating faster remittance forNRIs from our branches abroad.

About 16000 ATMs made available to customers through sharedATMs/VISA network.

Core Banking Solution implemented in 555 branches.

RTGS/SFMS enabled in 555 branches.

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515 branches enabled for On-line Tax Accounting System (OLTAS).

Equity participation in ASREC, the Asset Reconstruction Companyfloated by UTI and Multi Commodity Exchange (MCX).

Value added Savings and Current deposit products for high-endcustomers launched in major urban and metro centres as a part ofBusiness Process Re-engineering initiative.

Major initiatives in international operations involving ramp-up offoreign presence, enhancement in product offerings and technologyupgradations.

FINANCIAL REVIEW

Financial markets remained generally stable during 2005-06 although

interest rates firmed up in all segments. The performance of the Indian

economy turned out to be better than expected. The pick up in real economic

activity reflected in a robust expansion of Bank credit for the second year

in succession. Non-food credit remained the key driver of banking industry

growing by 37.3 percent on top of 27.5 percent, net of conversion, a year

ago. Substantial increase was observed in credit flow to industries like

food processing, iron & steel, cotton textiles, vehicles, chemicals, gems

and jewellery and construction. Added thrust to agriculture in the

Government policies resulted in an increase of 22.8 percent in agricultural

credit as compared with 18.9 percent in the corresponding period of the

previous year. Credit growth outpaced deposit growth by a substantial

margin as the aggregate deposits of scheduled commercial banks increased

by 22.4 percent as compared with 18.9 percent in the corresponding period

of the previous year. The efforts of the banks to raise deposits to fund the

credit demand led to a visible shortening of the maturity profile of deposits

in the banking system.

The Bank took advantage of the opportunities offered by the robust growth

in the Indian economy and expanded credit in all segments including

priority sector and retail. Conforming to the Government guidelines the

Bank effectively ensured improved flow of credit to agriculture sector.

Continued thrust on mobilising low cost savings and current deposits

improved the Bank’s share in low cost deposits to over 40% and the cost

of deposits declined to 4.05% from 4.17%. Sluggish growth in deposits

firmed up interest rates.

The equity market witnessed robust activity and the BSE sensex increased

from an average of 6,379 in April 2005 to 10,857 in March 2006. Bank

participated in the market rally and traded in scrips. Bank also earned more

income than any year in the past from the numerous IPOs and follow on

offers.

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4.05% nes ieF&~ peceeDeeW ceW Oeerceer Òeieefle kesÀ keÀejCe y³eepe keÀer ojW efmLej yeveer jneR~

FeqkeÌJeìer yeepeej ceW cegKej ieefleefJeefOe yeveer jner Deewj yeerSmeF& meWmeskeÌme DeÒewue 2005 kesÀ

6,379 kesÀ Deewmele mes yeæ{keÀj cee®e& 2006 cesb 10,857 Hej pee HengB®ee~ yeQkeÀ ves yeepeej jwueer

ceW menYeeefielee keÀer Deewj eqm¬eÀHme mes efJeiele mece³e kesÀ efkeÀmeer Yeer Je<e& keÀer leguevee ceW p³eeoe

Dee³e Deefpe&le keÀer~


9

yeQkeÀ keÀe keÀe³e& efve<Heeove Performance of the Bank (OevejeefMe ©. keÀjesæ[ ceW) (Amount in Rs. crore)

2004-05 2005-06 (%) Je=ef× Growth (%)

Meg× y³eepe Dee³e Net Interest Income 2236.89 2631.98 17.66

iewj-y³eepe Dee³e Non-Interest Income 1155.80 1184.38 2.47

efpemeceW mes Of which:

ÒeefleYetefle³eeW keÀer efye¬eÀer mes ueeYe Profit from sale of securities 180.23 114.09 -36.70

mLee³eer iewj-y³eepe Dee³e (ÒeefleYetefle³eeW keÀer efye¬eÀer íesæ[keÀj) Core Non-interest income (excl. sale of securities) 975.57 1070.29 9.70

Heefj®eeueve J³e³e Operating Expenses 1932.33 2115.14 9.46

Heefj®eeueve ueeYe Operating Profit 1460.36 1701.22 16.49

Heefj®eeueve ueeYe (ÒeefleYetefle³eeW keÀer efye¬eÀer íesæ[keÀj) Operating Profit excl. sale of securities 1280.13 1587.13 23.98

ÒeeJeOeeve / DeekeÀeqmcekeÀleeSb Provisions / Contingencies 1120.31 999.78 -10.76

Meg× ueeYe Net Profit 340.05 701.44 106.28

Meg× ueeYe ÒeefleYetefle³eeW keÀes íesæ[keÀj Net Profit excl. sale of securities 159.82 587.35 267.50

Deewmele Meg× nwefme³ele Hej ÒeefleHeÀue (%) Return on Average Networth (%) 8.63 16.28 88.64

Deewmele Deeefmle³eeW Hej ÒeefleHeÀue (%) Return on Average Assets (%) 0.38 0.68 78.95

Depe&ve Òeefle Mes³ej (©.) Earnings per share (Rs.) 6.98 14.39 106.16

yener cetu³e Òeefle Mes³ej (©.) Book-value per share (Rs.) 82.93 93.77 13.07

Operating Profit of the Bank was Rs.1701.22 crore. Net Profit was

Rs.701.44 crore.

Net interest income shows improvement of 17.66%.

Non interest income of the Bank was Rs.1184.38 crore.

The important yield, cost and other financial ratios are as under:

Important Financial Ratios(Percentages)

2004-05 2005-06

Yield on Advances 7.14 7.58

Yield on Investments 7.62 7.15

Yield on funds 6.71 6.78

Cost of Deposits 4.17 4.05

Cost of Funds 4.22 4.24

Spread 2.49 2.54

Other Income to Average Assets 1.29 1.14

Operating cost to Average Assets 2.15 2.04

Staff cost to Average Assets 1.41 1.28

Other operating cost to Average Assets 0.74 0.76

Asset Utilisation Ratio 1.62 1.64

Non-Interest Income to total Income 16.08 14.42

Non-Interest Income to Net Income 34.07 31.03

Cost to Net Income 56.96 55.42

yeQkeÀ keÀe Heefj®eeueveiele ueeYe ©. 1701.22 keÀjesæ[ Lee~ Meg× ueeYe ©. 701.44 keÀjesæ[

Lee~

Meg× y³eepe Dee³e ceW 17.66% keÀer Je=ef× ngF&~

yeQkeÀ keÀer iewj-y³eepe Dee³e ©. 1184.38 keÀjesæ[ Leer~

cenlJeHetCe& GHeueeqyOe, ueeiele SJeb Dev³e efJeÊeer³e DevegHeele efvecveevegmeej nw ë-

cenlJeHetCe& efJelleer³e DevegHeele(Òee fleMele)

2004-05 2005-06

DeefûeceeW mes ueeqyOe 7.14 7.58

efveJesMeeW mes ueeqyOe 7.62 7.15

efveefOe³eeW mes ueeqyOe 6.71 6.78

peceejeefMe³eeW keÀer ueeiele 4.17 4.05

efveefOe³eeW keÀer ueeiele 4.22 4.24

Devlej 2.49 2.54

Deewmele Deeefmle³eeW ceW Dev³e Dee³e 1.29 1.14

Deewmele Deeefmle³eeW ceW Heefj®eeueve ueeiele 2.15 2.04

Deewmele Deeefmle³eeW ceW mìeHeÀ ueeiele 1.41 1.28

Deewmele Deeefmle³eeW ceW Dev³e Heefj®eeueve ueeiele 0.74 0.76

Deeefmle GHe³eesie DevegHeele 1.62 1.64

kegÀue Dee³e ceW iewj-y³eepe Dee³e 16.08 14.42

Meg× Dee³e ceW iewj-y³eepe Dee³e 34.07 31.03

Meg× Dee³e ceW ueeiele 56.96 55.42

The Financial performance of the Bank for the year 2005-06 is summarised

below:-Je<e& 2005-06 nsleg yeQkeÀ keÀe efJeÊeer³e keÀe³e&efve<Heeove meb#esHe ceW veer®es efo³ee ie³ee nw ë-


10

Segment-wise performance

The Bank earned an Operating Profit of Rs.1701.22 crore during the Year

2005-06. The contribution made by Treasury was Rs.373.04 crore and

other banking operations earned a profit of Rs.1429.47 crore. The

unallocable expenditure net of unallocable income was Rs.101.29 crore

during the year 2005-06.

Investments under ‘Held to Maturity’ were earlier amortised over the

remaining period of maturity by adopting ‘Straight Line Method’. From

the current year the Bank has switched over to the ‘Constant Yield Method’.

Consequently the amortisation expenses are lower at Rs.241 crore

(Domestic) as against Rs.268 crore had straight-line method been continued.

Dividend

The Bank has declared a Dividend of 30% for the year. The total dividend

payment amounts to Rs.166.73 crore (including dividend distribution tax).

Capital

Net worth of the Bank has gone upto Rs. 4577.26 crore from Rs. 4042.15

crore in FY 2005. During the year the Bank annulled the forfeiture in

respect of 600 equity shares of Rs.10/- each. Consequently, the paid up

capital of the Bank has gone up by Rs.6000/-.

Capital Adequacy

The Bank maintained Capital Adequacy Ratio of 10.75% against the

regulatory minimum of 9%. The Bank raised Tier II Capital aggregating to

Rs.950 crore during the year.

HetBpeer He³ee&Hlelee kesÀ efJeJejCe efvecveevegmeej nQ ë Details of Capital Adequacy are shown as under:-

(©. keÀjesæ[ ceW)(Rs. in Crore)

31 cee®e& kesÀ Devegmeej : As on 31st March

2005 2006

OevejeefMe Yeeefjle peesefKece Deeefmle³eeW cesb % OevejeefMe Yeeefjle peesefKece Deeefmle³eeW ceW %Amount % to Risk weighted Assets Amount % to Risk weighted Assets

ìe³ej ~ HetBpeer Tier I Capital 3684 7.05 4552 6.75

ìe³ej ~~ HetBpeer Tier II Capital 2334 4.47 2696 4.00

kegÀue HetBpeer Total Capital 6018 11.52 7247 10.75

peesefKece Yeeefjle Deeefmle³eeb Risk Weighted Assets 52230 67422

#es$eJeej keÀe³e&efve<Heeove

Je<e& 2005-06 kesÀ oewjeve yeQkeÀ ves ©. 1701.22 keÀjesæ[ keÀe Heefj®eeueveiele ueeYe Deefpe&le

efkeÀ³ee~ keÀes<eeieej Üeje ©. 373.04 keÀjesæ[ keÀe ³eesieoeve efo³ee ie³ee Deewj Dev³e yeQefkebÀie

Heefj®eeueveeW ves ©. 1429.47 keÀjesæ[ keÀe ueeYe keÀcee³ee~ efveJeue iewj-Deeyebìve ³eesi³e Dee³e

mes iewj-Deeyebìve³eesi³e J³e³e Je<e& 2005-06 ceW ©. 101.29 keÀjesæ[ Lee~

`HeefjHekeÌJelee lekeÀ Oeeefjle' kesÀ Devleie&le Deeves Jeeues efveJesMeeW keÀes `mì^sì ueeF&ve He×efle'

DeHeveekeÀj HeefjHekeÌJelee keÀer Mes<e DeJeefOe kesÀ efueS Henues Decee@jìeFpe efkeÀ³ee ie³ee Lee~ ®eeuet

Je<e& mes yeQkeÀ ves `keÀebmìWì F&u[ He×efle' DeHevee ueer nw~ HeÀuemJeªHe Decee@jìeF&pesMeve J³e³e

keÀce nes ieS nQ pees ©.241 keÀjesæ[ (mJeosMeer) nQ~ ³eefo mìsìueeF&ve He×efle DeHeveeF& ieF& nesleer

lees J³e³e ©.268 keÀjesæ[ Deelee~

ueeYeebMe

Je<e& kesÀ efueS yeQkeÀ ves 30% keÀe ueeYeebMe Ieesef<ele efkeÀ³ee nw~ kegÀue ueeYeebMe Yegieleeve jeefMe

©.166.73 keÀjesæ[ nw~ (efpemeceW ueeYeebMe efJelejCe keÀj Meeefceue nw)

HetBpeer

efJeÊeer³e Je<e& 2005 ceW yeQkeÀ keÀer Meg× nwefme³ele ©.4042.15 keÀjesæ[ mes yeæ{keÀj 4577.26

keÀjesæ[ nes ieF& nw~ Je<e& kesÀ oewjeve yeQkeÀ ves Òel³eskeÀ ©.10/- kesÀ 600 FeqkeÌJeìer Mes³ejeW keÀer peyleer

keÀes jÎ efkeÀ³ee~ HeefjCeeceleë yeQkeÀ keÀer ®egkeÀlee HetBpeer ceW ©.6000/- mes Je=ef× ngF&~

HetBpeer He³ee&Hlelee

HetBpeer He³ee&Hlelee kesÀ efve³eecekeÀ v³etvelece 9% DevegHeele keÀer leguevee ceW yeQkeÀ keÀe HetBpeer He³ee&Hlelee

DevegHeele 10.75% jne~ Je<e& kesÀ oewjeve yeQkeÀ ves ©.950 keÀjesæ[ keÀer ìe³ej ~~ HetBpeer pegìeF&~


11

MANAGEMENT DISCUSSION AND ANALYSIS

Business Environment

The Indian economy recorded an impressive performance during the year

2005-06. GDP is estimated to have grown by 8.4% according to an advance

estimate of CSO in the year 2005-06. The progress in the economy was

marked by a new industrial resurgence, a pick up in investment, modest

inflation, rapid growth in exports and imports. After dipping below 1.0

per cent in 2004-05, mostly on account of erratic rainfall, agriculture and

allied’s growth in 2005-06 is estimated at 2.3 per cent.

The growth of real GDP originating in industry is estimated by the CSO

to have stepped upto 8.05% in 2005-06 from 7.4% in the previous year.

The industrial growth was driven by robust performance from

manufacturing and construction sectors. Services sector growth continued

to be broad-based. Among the three sub sectors of services, trade,

hospitality, transport and communication services continue to lead by

growing at double digit rates for the third successive year. Growth in

financial services (comprising banking, insurance and real estate services),

which after dipping in 2003-04, had bounced back in the following year,

maintained the momentum with progressive maturing of Indian financial

markets. Real GDP originating in the services sector is estimated to have

increased by 10.1 percent during 2005-06 as against 10.2 percent a year

ago.

The stock market achieved dizzying heights. BSE Sensex crossed 11000

mark in March 2006. It was spurred by overflowing liquidity. Both domestic

mutual funds as well as FIIs are pumping in money into Indian equities.

Prices remained at comfortable level with the WPI inflation at 4.0 per cent

at March-end 2006. Broad money M3 grew at the rate of 20.4% in 2005-

06 as compared with the 12.1 percent, net of conversion in the previous

year. Fiscal deficit was well under control. The gross fiscal deficit in

2005-06 is estimated to be 4.1 per cent of the gross domestic product. This

is lower than the projected 4.3 per cent.

Merchandise Exports increased by 24.7 percent during 2005-06 as

compared with 26.4% in the previous year. Imports showed an increase of

31.5% as compared with 36.4% in the previous year.

Trade deficit widened to US $ 39.6 billion during 2005-06, which was

52.7 percent higher than the deficit of US $ 26.0 billion in the corresponding

period of the previous year.

Foreign exchange reserves increased from U.S.$ 141.5 billion at end

March 2005 to U.S.$ 151.6 billion by end March 2006.

During 2005-06, the rupee depreciated by 1.95% against the U.S.Dollar

but appreciated by 4.4% against the euro, by 5.5% against the pound

sterling and by 7.5% against the Japanese yen.

Industry Structure and Developments

The overall banking environment remained benign in 2005-06, other than

the drying of liquidity and resultant hardening of interest rates in the last

quarter.

ÒeyebOeve ®e®ee& SJe efJeMues<eCe

keÀejesyeej JeeleeJejCe

Je<e& 2005-06 kesÀ oewjeve Yeejleer³e DeLe&J³eJemLee ceW ÒeYeeJeMeeueer keÀe³e&efve<Heeove ¢ef<ìiees®ej

ngDee~ meerSmeDees kesÀ SkeÀ HetJee&vegceeve kesÀ Devegmeej Je<e& 2005-06 ceW peer[erHeer ceW 8.4% keÀer

Je=ef× nesves keÀe Devegceeve nw~ veS DeewÐeesefiekeÀ Go³e, efveJesMe ceW lespeer, cegveeefmeye cegêemHeÀerefle,

Dee³eele Deewj efve³ee&le ceW lJeefjle Je=ef× kesÀ HeÀuemJe©He DeLe&J³eJemLee ceW Òeieefle Heefjueef#ele

ngF&~ 2004-05 ceW 1.0 ÒeefleMele mes keÀce efiejeJeì kesÀ yeeo, p³eeoelej DeefveefM®ele Je<ee& nesves

kesÀ keÀejCe ke=Àef<e Deewj mecye× ieefleefJeefOe³eeW ceW 2005-06 ceW Je=ef× 2.3 ÒeefleMele Devegceeefvele nw~

GÐeesie ceW Meg© nesvesJeeueer JeemleefJekeÀ peer[erHeer keÀer Je=ef× kesÀ yeejs ceW meerSmeDees keÀe Devegceeve

nw efkeÀ ³en iele Je<e& kesÀ 7.4% kesÀ yeæ{keÀj 2005-06 ces 8.05% lekeÀ HengB®e peeSieer~

GlHeeove SJeb efvecee&Ce #es$eeW ceW Meeveoej keÀe³e&efve<Heeove nesves keÀer Jepen mes DeewÐeesefiekeÀ Òeieefle

ngF&~ mesJee #es$eeW ceW Je=ef× J³eeHekeÀ DeeOeej Hej yeveer jner~ mesJeeDeeW kesÀ leerve GHe-#es$eeW kesÀ ceO³e,

J³eeHeej, DeeefleLes³e, HeefjJenve Deewj meb®eej mesJeeDeeW ceW ueieeleej leermejs Je<e& Yeer oesnjs DebkeÀ

keÀer ojeW mes Je=ef× yejkeÀjej jKe DeûeCeer yeves jns~ efJeÊeer³e mesJeeDeeW ceW Je=ef× (efpeveceW yeQefkebÀie,

yeercee Deewj efj³eue Fmìsì mesJeeSB Meeefceue nQ~) ves ÒeieefleMeerue HeefjHekeÌJe nes jns Yeejleer³e

efJeÊeer³e yeepeejeW kesÀ meeLe ieefle keÀes yejkeÀjej jKee efpemeceW 2003-04 ceW efiejeJeì kesÀ yeeo

Deieues Je<e& HegveëmegOeej Dee ie³ee~ Je<e& 2005-06 kesÀ oewjeve mesJee #es$e mes GlHevve nesves Jeeueer

JeemleefJekeÀ peer[erHeer ceW 10.1 ÒeefleMele keÀer Je=efÎ keÀe Devegceeve nw peyeefkeÀ SkeÀ Je<e& Henues ³en

10.2 ÒeefleMele Lee~

mìe@keÀ yeepeej ves Meeveoej TB®eeF&³eeW keÀes ígDee~ yeerSmeF& meWmeskeÌme ves cee®e&, 2006 ceW

11000 keÀe DeebkeÀæ[e Heej keÀj efue³ee~ ³en lejuelee mes mejesyeej Lee~ mJeosMeer c³eg®egDeue

HeÀC[me SJeb efJeosMeer mebmLeeiele efveJesMekeÀ, oesveeW ner Yeejleer³e FeqkeÌJeìerpe ceW OevejeefMe efveJesMe

keÀj jns nQ~ cetu³e SkeÀ cegveeefmeye mlej Hej yejkeÀjej jns pewmee efkeÀ cee®e& 2006 kesÀ Deble ceW

LeeskeÀ cetu³e met®ekeÀebkeÀ 4.0 ÒeefleMele Hej yevee jne~ Je<e& 2005-06 ceW ye´es[ ceveer Sce 3 ceW

20.4% keÀer oj mes Je=ef× ngF& pees iele Je<e& keÀer leguevee ceW efveJeue 12.1 Leer~ efJeÊeer³e Ieeìe Hetjer

lejn mes efve³eb$eCe ceW Lee~ 2005-06 ceW kegÀue efJeÊeer³e Ieeìe, kegÀue mJeosMeer GlHeeo keÀe 4.1

ÒeefleMele nesvee Devegceeefvele nw~ ³en Devegceeefvele 4.3 ÒeefleMele mes keÀce nw~

iele Je<e& ceW 26.4% keÀer leguevee ceW ceeue efve³ee&le ceW Je<e& 2005-06 ceW 24.7% keÀer Je=ef× ngF&~

efHeíues meeue kesÀ 36.4% keÀer leguevee ceW Dee³eeleeW ceW 31.5% keÀer Je=ef× ¢ef<ìiees®ej ngF&~

Je<e& 2005-06 kesÀ oewjeve J³eeHeej Ieeìe yeæ{keÀj ³etSme $39.6 efyeefue³eve nes ie³ee

pee s iele Je<e & keÀe r Gmee r DeJee fOe ke sÀ Ieeìs ³e t Sme $26.0 e fyee fue³eve me s 52.7

ÒeefleMele DeefOekeÀ Lee~

cee®e& 2005 kesÀ Deble ceW efJeosMeer efJeefvece³e meb®e³e ³etSme $141.5 efyeefue³eve mes yeæ{keÀj cee®e&

2006 kesÀ Deble ceW ³et Sme $151.6 efyeefue³eve lekeÀ HengB®e ieS~

Je<e& 2005-06 kesÀ oewjeve DecesefjkeÀve [e@uej kesÀ efJe©× ©HeS ceW 1.95% keÀer efiejeJeì DeeF&

uesefkeÀve FmeceW ³etjes kesÀ cegkeÀeyeues 4.4% keÀer, HeewC[ mìefueb¥ie keÀer leguevee ceW 5.5% keÀer leLee

peeHeeveer ³esve ceW 7.5% keÀer yeæ{esÊejer ngF&~

DeewÐeesefiekeÀ {eB®ee SJeb efJekeÀeme

2005-06 ceW yeQefkebÀie JeeleeJejCe meewc³e yevee jne uesefkeÀve lejuelee keÀce nesleer ieF& efpemekesÀ

HeÀuemJeªHe iele efleceener ceQ y³eepe ojW meg¢æ{ yeveer jneR~


12

RBI continued the process of financial reforms for induction of best

practices and technological changes emphasizing transparency,

diversification of ownership and strong corporate governance practices to

mitigate the prospects of systemic risks in the Banking Sector.

The road map for entry of foreign banks was also released requiring that

the ownership and control should be well diversified while at the same

time ‘fit & proper’ criteria was applied for Directors, CEOs and

shareholders.

Continuing the liberalization process banks were granted permission to

declare dividend subject to their capital to risk weighted assets ratio (CRAR)

being 9% for the preceding two years apart from the accounting year for

which it proposes to declare dividend and also subject to their net NPA

ratio being less than 7%.

The RBI also took steps to reduce the deployment of loans to the housing

and commercial real estate sectors. Asset prices can have a powerful effect

on investment and/or consumption through a financial acceleration effect.

This step was taken by RBI to check sectoral growth of credit and financial

imbalances arising on account of rising asset prices.

Opportunities

The Indian economy is indicating the beginning of a new phase of business

cycle since 2003-04. There is considerable optimism for 2006-07. Robust

growth of the industrial sector and Government’s conscious decision to

increase credit to agriculture sector offers increasing opportunities to bankers

for increasing credit.

Some of the companies have seen a revised fortune due to the buoyant

economic growth. This led to a surge in corporate lending. This would

also lower bad loan provisioning and even trigger some writing back of

earlier provisions improving profitability of the banks.

Public Sector Banks have been given autonomy package which permits

them to close or merge unviable branches, acquire new companies, open

overseas branches and set up new line of business without any permission

from the Government. They have been given freedom to decide on human

resources issues. All these will help public sector banks in facing marketing

challenges.

The bankers had something to cheer about in the Union Budget 2006-07.

Term Deposits of scheduled commercial banks with maturity of not less

than 5 years are now eligible for deduction under Section 80 C of the

Income-Tax Act. This is likely to give an impetus to deposit mobilisation

by banks.

The Union Budget 2006-07 proved to be a boon for the banks struggling

to raise resources. The banks were also allowed to recapitalise the special

securities issued by the Government since 1993-94 into tradable, dated

securities that could qualify for statutory liquidity ratio purposes. This

move will facilitate increased access of the banks to additional resources

for lending to productive sectors in the light of increasing credit needs of

the economy.

yeQefkebÀie #es$e ceW He×efleiele peesefKeceeW keÀer mebYeeJeveeDeeW mes ye®eves kesÀ efueS HeejoefMe&lee,

mJeeefcelJe ceW efJeefJeOelee Deewj meMekeÌle keÀejHeesjsì ieJeveW&me ÒeLeeDeeW Hej peesj osles ngS meJe&Þes<þ

ÒeLeeDeeW Deewj ÒeewÐeesefiekeÀer³e HeefjJele&veeW keÀes ueeiet keÀjves nsleg Yeejleer³e efj]peJe& yeQkeÀ ves efJeÊeer³e

megOeejeW keÀer Òeef¬eÀ³ee keÀes peejer jKee~

efJeosMeer yeQkeÀeW kesÀ ÒeJesMe keÀe jes[ cewHe Yeer peejer efkeÀ³ee ie³ee efpemekesÀ Devegmeej mJeeefcelJe SJeb

efve³eb$eCe megmHe<ì ªHe mes efJeefJeOeleeHetCe& nesvee ®eeefnS meeLe ner meeLe `efHeÀì SC[ ÒeeHej'

keÀmeewìer keÀes efveosMekeÀeW, meer F& Deesme leLee Mes³ejOeejkeÀeW Hej ueeiet efkeÀ³ee ie³ee~

GoejerkeÀjCe keÀer Òeef¬eÀ³ee keÀes peejer jKeles ngS ueeYeebMe Ieesef<ele keÀjves kesÀ efueS efJeiele oes

Je<eeX kesÀ DeueeJee efpeme Je<e& nsleg ueeYeebMe Ieesef<ele keÀjvee ÒemleeefJele nw Gme uesKee Je<e& ceW

GvekesÀ peesefKece Yeeefjle Deeefmle DevegHeele (meerDeejSDeej) 9% SJeb GvekeÀe efveJeue SveHeerS

DevegHeele 7% mes keÀce nesves kesÀ DeO³eOeerve yeQkeÀeW keÀes Devegceefle oer ieF& Leer~

DeeJeemeer³e SJeb JeeefCeefp³ekeÀ efj³eue Fmìsì #es$eeW ceW efoS peeves Jeeues $eÝCeeW kesÀ efJeefve³eespeve

keÀes Ieìeves nsleg Yeejleer³e efj]peJe& yeQkeÀ ves Yeer GHee³e efkeÀS~ efJeÊeer³e lespeer kesÀ ÒeYeeJe kesÀ peefjS

Deeefmle cetu³e efveJesMe Deewj ³ee GHe³eesie Hej SkeÀ meMekeÌle ÒeYeeJe jKe mekeÀles nQ~ $eÝCe keÀer

#es$eJeej Je=ef× keÀes Deewj yeæ{eles ngS Deeefmle cetu³eeW kesÀ keÀejCe GlHevve nesvesJeeues efJeÊeer³e

DemeblegueveeW keÀes efve³ebef$ele jKeves kesÀ efueS Yeejleer³e efj]peJe& yeQkeÀ Üeje ³en keÀoce Gþe³ee ie³ee~

DeJemej

Je<e& 2003-04 mes Yeejleer³e DeLe&J³eJemLee keÀejesyeej ®e¬eÀ kesÀ SkeÀ veS ®ejCe keÀer MegªDeele

keÀes oMee& jner nw~ Je<e& 2006-07 mes keÀeHeÀer Gcceero yebOeer ngF& nw~ DeewÐeesefiekeÀ #es$e keÀer

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nsleg $eÝCe yeæ{eves kesÀ Jeemles keÀeHeÀer p³eeoe DeJemej Òeoeve efkeÀS nQ~

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13

Banks have been allowed to raise capital through issues of innovative

instruments like perpetual bonds and other hybrid capital securities to

shore up their capital base to meet increasing business requirements as

well as to maintain the capital adequacy ratio under the Basel-II norms.

In the backdrop of a slowdown in deposit growth, many banks are raising

funds through overseas bond issues and domestic equity issues in order to

meet the increasing credit demands.

Banks have been asked to introduce ‘no frills’ account to bring a large

section of population under the banking net. The idea has been propelled

by the realisation that a large section of the population continue to remain

credit starved. The ‘no-frills’ account is a win-win opportunity for banks

to cater to such segment and attract profitable customers. Banks will be

able to create a database of these customers and can prudently use this

information to target the customers in their databases to cross-sell various

products.

Challenges

The biggest challenge before the banks is to arrest sliding bottomlines due

to decline in treasury profits. Banks need to work hard to adjust with the

reality that the windfall gains from treasuries have stopped.

In order to match up to the capabilities of foreign banks and private banks,

PSU banks are moving to centralised operations and core banking solution.

The surplus staff of the bank is also being diverted for marketing. There is

a need to reskill the staff for these new activities.

Banks also have to prepare a roadmap for migrating to more sophisticated

approaches of risk management. They may have to alter the profile of risk

exposures in order to meet Basel II norms.

Another challenge before the banks is to compete with small savings

schemes of NSO/post offices that offer higher returns. There exists a

fractured structure of interest rates with respect to mobilisation of resources.

The banking industry will also be put to a difficult test when the process of

mergers and acquisition commences.

RISK & CONTROL

Risk Management

The Bank has adopted an integrated approach to risk management.

Risk Management is a Board driven function in the Bank. At the apex

level of the risk management apparatus, there is a Board level Risk

Management Committee. At the operational level, a full-fledged Risk

Management Department headed by a General Manager is in place. The

Bank also has Committees of top executives for managing various risks

viz.-

Asset Liability Management Committee (ALCO) for management of market

risk.

Credit Risk Management Committee (CRMC) for management of credit

risk

Committee for Operational Risk Management (CORM) for management

of operational risk.

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14

All major policies including Enterprise wide risk management policy,

Credit risk management policy, Operational risk management policy, ALM

policy and Dealing room policy are in place. Based on the recommendations

of our Risk Management Consultants IMACS(ICRA Management

Consulting Services), systems and tools including introduction of new

rating models having greater granularity in ratings are in the process of

implementation. In tandem with rolling out revised credit rating models

the bank has geared up to support functions in upgrading technology and

MIS. CBS has been implemented in over 555 branches. Data warehousing

project is at an advanced stage of implementation to provide comprehensive

information for analysis. Integrated credit risk management software is

being procured.

Risk Profile of the Bank is updated quarterly. Internally the Bank has

carried out the exercise of estimation of capital charge based on Standardised

Approach for Credit and Market Risk and Basic Indicator Approach for

Operational Risk. The Bank has geared up to align with draft RBI guidelines

for undertaking parallel run for computation of capital charge effective

01.04.2006 and migration to Basel II effective 31.03.2007.

Going forward the Bank is preparing for migration to more sophisticated

approaches. A roadmap for enhancing the effectiveness and robustness of

risk management systems has been prepared by the bank. Some of the

priorities are as under:

Introduction of the new Rating models and measurement of

Probability of Default (PD).

Tracking operational risk events.

Introduction of score card approach.

Active Portfolio Management.

Estimation of Loss Given Default (LGD) and Exposure at Default

(EAD).

RAROC (Risk Adjusted Return on Capital) based pricing.

Estimation of Economic Capital.

Internal Control Systems and their adequacy

Inspection and Audit is important for evaluating the effectiveness of internal

control mechanisms in the Bank. The Bank has an internal Audit and

Compliance Department, which is responsible for independently evaluating

the adequacy of all internal controls. The Department also actively

recommends improvements in operational processes and service quality.

The Bank also has a well defined policy for Management Audit of

controlling offices and Head Office Departments. Consequent upon

bringing more and more branches under CBS (Core Banking Solution), a

well defined Information Systems Audit Policy has also been framed.

Concurrent Audit system has been further strengthened and now covers

537 branches, which includes Treasury branch and foreign branches.

Special focus is given to Information System Audit of fully computerised

branches. During the year 2005-06, Information System Audit of 1749

branches has been carried out as per schedule. Well defined Audit policies

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15

duly approved by Audit Committee of the Board and Manual of Instructions

are in place for various types of audit.

In line with the objectives of Risk Based Supervision of Banks propounded

by the Reserve Bank of India, the Bank has a well defined risk focused

Internal Audit Policy.

Developments in Human Resources

Essential functions of managerial personnel in any organisation are to

motivate the staff for obtaining better results, good treatment, transparent

working environment, providing regular and equal opportunities to all,

rewarding hard work and providing challenging assignments, regular

promotional avenues are the normal expectations of an employee.

A number of initiatives were taken by the Bank for changing the mindset

of the employees, constantly upgrading their knowledge and motivating

them suitably. A new Employee Motivation Scheme was introduced to

cover a larger section of the 42206 employees of the Bank. In order to

recognize the performance of an individual and at the same time recognize

the collective performance of the team as a whole, the awards were instituted

for individual as well as team performance.

Different functional areas were identified for the purpose of awards to

provide opportunities to a wide cross section of employees working in

such functional areas, with a view to recognize their contribution in these

areas. A total of 819 awards were given during the year 2005-06.

A number of in-house training programmes were conducted to upgrade

the knowledge and skill levels of employees. Necessary steps were taken

by the Bank to make the employees computer literate. Training programmes

were also conducted for staff members to ensure smooth transition of our

branches to Core Banking Solution.

Outlook

The bank is well positioned to take advantage of the robust growth in the

Indian economy. The resurgence of the industrial sector, a pick up in

investment, rapid growth in exports and imports and government’s policy

to lay a foundation for faster development of physical infrastructure have

thrown up opportunities for showing improved performance in the coming

years.

The bank has entered the centenary year on 7th September, 2005 and our

‘century young’ bank’s initiative in technology, marketing, human

resources and business process reengineering have set the bank on a high

growth trajectory.

An ambitious business plan has been drawn up for increasing the market

share of the bank and for galvanising the entire workforce into high action.

There has been increased focus for credit expansion in Agriculture, Retail

and SME sectors.

Risk Management systems are being continuously upgraded to match

with international standards. The Bank also took initiative to revamp its

product portfolio to suit the ever increasing expectations of customers.

Value added customised products were introduced to retain and attract

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efoS ieS~

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meceeOeeve ceW menpeleeHetJe&keÀ HeefjJele&ve keÀes megefveefM®ele keÀjves kesÀ efueS mìeHeÀ meom³eeW nsleg

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¢ef<ìkeÀesCe

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GHeueyOe keÀjeS nQ~

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ke=Àef<e, Kegoje Deewj ueIeg SJeb ceO³ece GÐece #es$eeW keÀer Deesj Deewj DeefOekeÀ O³eeve kesÀeqvêle

efkeÀ³ee ie³ee nw~

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Gvvele efkeÀ³ee pee jne nw~ yeQkeÀ ves ûeenkeÀeW keÀer yeæ{leer ngF& DeHes#eeDeeW kesÀ DevegªHe DeHeves

GlHeeo mebefJeYeeie keÀes megmebiele yeveeves keÀer Yeer Henue keÀer nw~ G®®e cenlJe kesÀ ûeenkeÀeW keÀes

DeHeves ³eneB yeveeS jKeves Deewj DeekeÀef<e&le keÀjves kesÀ efueS GHe³eesefieleeJeefOe&le mecevegªefHele


16

high-end customers. On the technology front, 555 branches migrated to

Core Banking Solution and various tech driven products like STAR Insta

Remit (RTGS) for remittance of funds for inter-bank transactions and

OLTAS for on line tax payments pertaining to direct tax collections were

introduced. A major drive was also initiated by the bank to ramp up its

international operations by expanding its network overseas.

Profit is expected to rise on account of healthy core performance and

increased opportunities offered by the robust growth in the Indian economy.

The bank is sanguine about a propitious outlook for its business.

BUSINESS REVIEW

Deposits

Bank’s deposits increased by Rs.15111 crore to Rs.93932 crore during

the year recording a growth of 19.17%. The growth in domestic deposits

was to the tune of Rs.12069 crore or 18.35%. Deposits at foreign branches

increased by Rs.3042 crore, recording

a growth of 23.33%.

Non Resident Deposits of the Bank

increased from Rs.9358 crore from

March end 2005 to Rs. 9759 crore as

at March end 2006 which constituted

14.52% of aggregate domestic

deposits. 6 NRI branches and 12 NRI

Centres have been providing services

to the Non Resident depositors

matching with international standards.

143 branches spanning across the

country have been authorised to handle

Foreign Currency Non Resident (FCNR-B) deposits. The Bank is accepting

FCNR deposits denominated in six currencies viz. USD, GBP, JAP Yen,

Euro, CAD and AUD.

Savings Bank deposits grew by

20.86% and Current Deposits by

22.19% in domestic operations. The

share of low cost deposits comprising

of Savings Bank and Current

Deposits, in domestic operations

increased from 40.06% to 40.64%.

Various efforts were made by the bank

to augment low cost deposits. Our

Bank has been approved by the

Government of Maharashtra for

disbursement of salaries of the

employees of entire Maharashtra.

Bank’s Savings and Current deposit

products were realigned, as a part of business process reengineering.

Savings Bank accounts have been tierised into Silver, Gold and Diamond

segments based on the balances maintained by the customers in the account.

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mes mebyebefOele Dee@veueeFve keÀj YegieleeveeW kesÀ efueS Deesuìeme Megª efkeÀS ieS~ DeHeves Devleje&<ì^er³e

Heefj®eeueveeW keÀes yeæ{eves kesÀ efueS yeQkeÀ ves DeHeves efJeosMeer vesìJeke&À ceW efJemleej keÀjves keÀer Yeer

Henue keÀer nw~

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keÀjeS ieS DeJemejeW mes ueeYe ceW Je=ef× DeHesef#ele nw~ yeQkeÀ DeHeves keÀejesyeej kesÀ efueS

mece=ef×Meerue ¢efäkeÀesCe keÀer DeeMee jKelee nQ~

keÀejesyeej meceer#ee

peceejeefMe³eeB

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93932 keÀjesæ[ nes ieF¥ Fme ÒekeÀej FveceW 19.17% keÀer Je=ef× ngF&~ mJeosMeer peceejeefMe³eesb ceW

©.12069 keÀjesæ[ ³ee 18.35% keÀer Je=ef× ngF&~ efJeosMeer MeeKeeDeeW ceW peceejeefMe³eeW ceW

23.33% keÀer Je=ef× ope& neskeÀj ©. 3042

keÀjesæ[ keÀer yeæ{esÊejer ngF&~

yeQkeÀ keÀer DeefveJeemeer peceejeefMe³eeb cee®e& 2005

keÀer meceeeqHle kesÀ ©. 9358 keÀjesæ[ mes yeæ{keÀj

cee®e& 2006 keÀer meceeeqHle Hej ©. 9759 keÀjesæ[

nes ieF& pees meceûe mJeosMeer peceejeefMe³eeW keÀe

14.52% nw~ 6 SveDeejDeeF& MeeKeeSB SJeb

12 SveDeejDeeF & ke s Àvê Dee f v eJeemee r

peceekeÀlee&DeeW keÀes Devleje&<ì^er³e ceevekeÀeW kesÀ

DevegªHe mesJeeSB Òeoeve keÀj jns nQ~ osMeYej

ceW 143 MeeKeeDeeW keÀes efJeosMeer cegêe DeefveJeemeer

(SHeÀmeerSveDeej-yeer) peceejeefMe³eeW mes

mebyebefOele keÀe³e& keÀjves kesÀ efueS DeefOeke=Àle efkeÀ³ee ie³ee nw~ yeQkeÀ íë veeefcele cegêeDeeW leLee

³etSme[er, peeryeerHeer, pesHe³esve, ³etjes, meerS[er SJeb S³et[er ceW SHeÀmeerSveDeej peceejeefMe³eeB

mJeerkeÀej keÀj jne nw~

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peceejeefMe³eeW ceW 20.86% Deewj ®eeuet

peceejeefMe³eeW ceW 22.19% keÀer Je=ef× ngF&~

mJeosMeer Heefj®eeueveeW ceW keÀce ueeiele keÀer

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peceejeefMe³eeB meeqcceefuele nQ, 40.06% mes

yeæ{keÀj 40.64% nes ieF¥~

keÀce ueeiele keÀer peceejeefMe³eeW keÀes yeæ{eves kesÀ

efueS yeQkeÀ Üeje efJeefYevve Òe³eeme efkeÀS ieS

nQ~ nceejs yeQkeÀ keÀes ceneje<ì^ mejkeÀej Üeje

mecHetCe& ceneje<ì^ kesÀ keÀce&®eeefj³eeW kesÀ Jesleve

mebefJelejCe keÀjves nsleg Devegceesefole efkeÀ³ee ie³ee nw~ keÀejesyeej Òeef¬eÀ³ee Hegvej&®evee kesÀ ªHe ceW

yeQkeÀ kesÀ ye®ele SJeb ®eeuet pecee GlHeeoeW keÀes HegveëefveOee&efjle efkeÀ³ee ie³ee nw~ ûeenkeÀeW Üeje jKeer

pee jner Mes<e jeefMe³eeW kesÀ DeeOeej Hej ye®ele yeQkeÀ KeeleeW keÀes efmeuJej, ieesu[ SJeb [e³eceb[


17

Certain privileges such as free ledger folios, multi city cheque book, free

International Gold Debit and Credit cards, free statement etc. have been

accorded to Diamond customers. Bank has also introduced tierised Current

Account deposit products called Star Gold Current Account, Star Diamond

Current Account and Star Diamond plus Current Account. The customers

under these categories get privileges by way of certain facilities besides

dedicated Relationship Managers in the branches.

The Bank has carved out a marketing set up across the country to meet the

challenges. Bank’s marketing personnel are being continuously trained in

marketing skills particularly with a view to focus on garnering retail

deposits.

The bank has a well-diversified deposit base with 49.5% of domestic

deposits coming from rural, semi-urban and urban centres. The Bank has

a total of 2.46 crore deposit customers and 19 lakh advances customers.

Advances

The gross domestic credit excluding investment by Treasury of the Bank

registered a higher growth of 23.27% from Rs.43826 crore as on

31.03.2005 to Rs.54023 crore as at 31.03.2006. The growth has been

made possible with continued increase in credit off-take by corporates

coupled with increase in SME and retail segments. The component of

other than Priority Sector credit as on 31.03.2006 was Rs.32700 crore.

While continuing financing activities to

borrowers in the core sector where the

bank has a higher exposure, the bank

expanded its share in retail and SME

sectors during the year, at the same time

continuing its thrust on bill finance and

trade finance. In the areas of Corporate

finance and export finance, Bank’s thrust

has been on selective mobilisation of new

clientele while at the same time nurturing

existing clientele by meeting all their

credit requirements.

Bank through its 117 specialised

branches caters to the various specialised segments of borrowers in Exports

& Imports, Small Scale Industries, High-tech Agricultural sector, Corporate

finance and Commercial and Personal segments.

Nine corporate banking branches of the bank continue to cater exclusively

to the specialised credit requirements of Corporate borrowers. They account

for more than 21% of Bank’s Domestic Credit.

Export Credit

The Bank is active in meeting the financial requirements of exporters and

importers. The Bank’s export credit registered a growth of Rs. 514 Crore

(13.25 %) over March end 2005 and reached a level of Rs. 4393 Crore as

at March end 2006. The share of export credit to net bank domestic credit

reached 9.53 % and to the total domestic credit at 8.12 % .

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efveëMegukeÀ Devleje&<ì^er³e ieesu[ SJeb ¬esÀef[ì keÀe[&, efveëMegukeÀ efJeJejCe Deeefo oer ieF& nQ~ yeQkeÀ

ves ÞesCeerke=Àle ®eeuet pecee Keelee GlHeeo mìej ieesu[ ®eeuet Keelee, mìej [e³eceb[ Hueme ®eeuet

Keelee Megª efkeÀS nQ~ Fve ÞesefCe³eeW kesÀ Devleie&le ûeenkeÀeW keÀe MeeKeeDeeW kesÀ ÒeyebOekeÀebs mes

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ÒeeHle neslee nw~

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Deefûece

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keÀejCe mebYeJe ngF& nw~ ³eLee efoveebkeÀ 31.03.2006 keÀes ÒeeLeefcekeÀlee #es$e $eÝCe keÀes íesæ[keÀj Mes<e

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pee se fKece nw, ceW GOeejkeÀlee &Dee W keÀe s

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yeQkeÀ ves Kegoje SJeb SmeSceF& #es$eeW ceW

DeHeveer efnmmesoejer yeæ{eF& Deewj Fmeer kesÀ

meeLe efyeue efJeÊeHees<eCe SJeb J³eeHeej

efJeÊeHees<eCe Hej peesj osvee peejer jKee~

kebÀHeveer efJeÊeHees<eCe SJeb efve³ee&le efJeÊeHees<eCe

kesÀ #es$eeW ceW yeQkeÀ ves ®egves ngS veS ûeenkeÀeW

keÀes ÒeeHle keÀjves Deewj meeLe ner Jele&ceeve

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DeeJeM³ekeÀleeDeeW keÀes Hetje keÀj jner nQ~ yeQkeÀ kesÀ mJeosMeer $eÝCe ceW GvekeÀe ³eesieoeve 21% nw~

efve³ee&le $eÝCe

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8.12% nes ieF& nw~


18

The Bank met financial requirements in Foreign Currency of both exportersand non-exporters through ECB loans at its overseas branches and foreigncurrency loans at domestic branches. The total amount of such advance asat 31-3-2006 was USD 954 Mn. ( ECB USD 472 Mn. & Foreign CurrencyLoan USD 482 Mn.) equivalent to Rs. 4245 crore. In addition, the bankalso extended pre-shipment & post-shipment credit in foreign currency tothe exporter and the total amount outstanding as at 31-3-2006 was USD258 Mn. equivalent to Rs. 1212 crore.

The Bank issued 800 Gold cards till March end 2006 to exporters withgood track record, under the Exporters’ Gold Card Scheme.

Infrastructure Finance

During the year, the bank actively participated in financing of infrastructureprojects in Roads, Power generation & distribution andTelecommunications. The outstanding advances for infrastructure sectoras on 31.03.2006 are Rs.4099 crore. This is exclusive of an investment inthis sector aggregating to Rs.502 crore.

Retail Credit

Retail lending is the buzzword in the banking circles. Every Bank is chasingRetail Assets to increase the credit portfolio, resulting in a phenomenalgrowth in retail loans in the recent past. The contribution of Retail credit to

overall growth is significant.

In order to sustain the credit growthwith accent on higher yields, theBank gave greater thrust to Retaillending, which has a vast potential.

The Bank has specialised productsto suit various personal/businessfinance requirements viz. Housing,Personal, Education, Auto finance,Mortgage, IPO, Holiday Loan,Retail Trade, Small Business,Professional & Self-employed,Transport Operators etc. in theRetail segment.

During the Financial Year 2005-06, Retail Credit recorded a growth

of 36.71%, constituting 38.12% of the incremental non-food credit, andits share in Non-food credit increased to 28%.

The Bank has fine tuned its rates of interest, other terms of these productsfrom time to time to keep these schemes most competitive/attractive, witha market driven and customer centric approach. To give required push tomarketing of these products, Bank has deployed adequate sales force foraggressive field level marketing/cross-selling of products. The wider reachand skilled staff to support intensive marketing, provides the Bank acompetitive edge for developing retail credit business. During the year,Bank has introduced ‘Retail Hub & Spokes Model’ at certain centres (likeMumbai, Ahmedabad etc.) to give greater thrust to retail credit products.Special thrust is given to these products through the Bank’s 9 Housing &Personal Banking branches and 35 Commercial & Personal Bankingbranches.

With a view to improve marketability of Home Loan and secure it withinsurance cover, the Bank has provided :-

i. Free Personal Accident Insurance cover to its home loanborrowers;

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ceW Heesle ueoeve HetJe& SJeb Heesle ueoeveesÊej $eÝCe Yeer efoS nQ~ efoveebkeÀ 31.03.2006 keÀes kegÀue

yekeÀe³ee jeefMe 258 efceefue³eve ³etSme [e@uej Leer pees ©. 1212 keÀjesæ[ kesÀ yejeyej nw~

yeQkeÀ kesÀ efve³ee&lekeÀ ieesu[ keÀe[& ³eespevee kesÀ Devleie&le De®ís efjkeÀe@[& Jeeues efve³ee&lekeÀeW keÀes

cee®e& 2006 kesÀ Deble lekeÀ 800 ieesu[ keÀe[& peejer efkeÀS nQ~

mebj®eveelcekeÀ efJeÊe

Je<e& kesÀ oewjeve yeQkeÀ ves meæ[keÀ, efJeÐegle-GlHeeove SJeb efJelejCe Deewj otjmeb®eej keÀer mebj®eveelcekeÀ

Heefj³eespeveeDeeW kesÀ efJeÊe Hees<eCe ceW meef¬eÀ³e menYeeefielee keÀer nw~ mebj®eveelcekeÀ #es$e ceW Deefûece

yekeÀe³ee ³eLee efoveebkeÀ 31.03.2006 keÀes ©. 4099 keÀjesæ[ jne~ ³en Fme #es$e ceW ©.502

keÀjesæ[ kesÀ SkeÀ efveJesMe keÀes íesæ[keÀj nw~

Kegoje $eÝCe

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yeæ{eves kesÀ efueS Kegoje Deeefmle³eeW keÀes ÒeeHle keÀjves keÀe Òe³eeme keÀj jne nw~ HeefjCeeceleë neue

kesÀ efHeíues Je<eeX ceW Kegoje $eÝCeeW ceW DemeeOeejCe Je=ef× nF& nw~ meceûe efJekeÀeme ceW Kegoje $eÝCeeW

keÀe ³eesieoeve cenlJeHetCe& nw~

$eÝCe Je=ef× keÀes G®®elej ÒeefleHeÀue kesÀ meeLe yeveeS

jKeves kesÀ efueS yeQkeÀ ves Kegoje $eÝCe Hej Del³eefOekeÀ

peesj efo³ee nw keÌ³eeWefkeÀ FmeceW Del³eefOekeÀ mebYeeJ³elee

nw~

yeQkeÀ kesÀ Heeme Kegoje #es$e ceW efJeefYeVe J³eeqkeÌle/

keÀejesyeej keÀer efJeÊeer³e DeeJeM³ekeÀleeDeeW kesÀ

Deve gke tÀue e fJee fJeOe GlHeeo ³eLee DeeJeeme,

J³eeqkeÌleiele, efMe#ee, Dee@ìesHeÀeFveebme, yebOekeÀ,

DeeF&HeerDees, ne@ueer[s $eÝCe, Kegoje J³eeHeej, íesìs

keÀejesyeej, ÒeesHesÀMeveue SJeb mJeefve³eesefpele,

HeefjJenve Òe®eeuekeÀ Deeefo kesÀ efueS GHeueyOe nw~

efJeÊeer³e Je<e& 2005-06 kesÀ oewjeve Kegoje $eÝCe ceW

36.71% keÀer Je=ef× ope& ngF& pees Je=ef×Meerue KeeÐeslej $eÝCe keÀe 38.12% nw Deewj FmekeÀer

efnmmesoejer KeeÐeslej $eÝCe ceW yeæ{keÀj 28% nes ieF& nw~

yeQkeÀ ves DeHeveer y³eepe ojeW keÀes yeepeej kesÀ DevegªHe SJeb ûeenkeÀ keÀes O³eeve ceW jKeles ngS Fve

³eespeveeDeeW keÀes DeefOekeÀ Òeefle³eesieer/DeekeÀ<e&keÀ yeveeS jKeves kesÀ efueS Fve GlHeeoeW keÀer Dev³e

MeleeX keÀes mece³e-mece³e Hej Deewj DevegketÀue yevee³ee nw~ Fve GlHeeoeW kesÀ efJeHeCeve keÀes DeHesef#ele

ªHe mes Deeies yeæ{eves kesÀ efueS yeQkeÀ ves keÀe³e&#es$eeW ceW GlHeeoeW kesÀ efJeHeCeve/Òeefleefye¬eÀer keÀjves kesÀ

efueS mìeHeÀ kesÀ He³ee&Hle efye¬eÀer oue keÀer lewveeleer keÀer nw~ J³eeHekeÀ HengB®e SJeb kegÀMeue mìeHeÀ kesÀ

ienve efJeHeCeve ceW men³eesie mes yeQkeÀ keÀes Kegoje $eÝCe keÀejesyeej yeæ{eves kesÀ efueS Òeefle³eesieer

meeceL³e& efceuee nw~ Je<e& kesÀ oewjeve yeQkeÀ ves Kegoje $eÝCe GlHeeoeW Hej DeefOekeÀ peesj osves kesÀ efueS

kegÀí kesÀvêeW (pewmes cegbyeF&, Denceoeyeeo Deeefo) Hej ``efjìsue nye SJeb mHeeskeÌme cee@[ue''Megª

efkeÀS nw~ yeQkeÀ keÀer 9 DeeJeeme SJeb Jew³eeqkeÌlekeÀ yeQefkebÀie MeeKeeDeeW Deewj 35 JeeefCeeqp³ekeÀ SJeb

Jew³eeqkeÌlekeÀ yeQefkebÀie MeeKeeDeeW kesÀ ceeO³ece mes Fve GlHeeoeW Hej efJeMes<e peesj efo³ee ie³ee nw~

DeeJeeme $eÝCe kesÀ efJeHeCeve keÀes yesnlej keÀjves Deewj yeercee Üeje megjef#ele jKeves kesÀ efJe®eej mes

yeQkeÀ ves efvecveefueefKele megefJeOee GHeueyOe keÀjeF& nw ë

i. DeHeves $eÝCe GOeejkeÀlee&DeeW keÀes ceg]HeÌle J³eeqkeÌleiele ogIe&ìvee yeercee megj#ee.


19

yeQkeÀ keÀer Òeieefle ceW efnmmesoejer yeæ{eves kesÀ efueS Kegoje $eÝCe Deeefmle³eeW Hej Fme #es$e ceW

GHeueyOe DeJemejeW kesÀ mecevegªHe efJeMes<e O³eeve efo³ee peelee jnsiee~

ÒeeLeefcekeÀlee #es$e Deefûece

SkeÀ efpeccesoej kebÀHeveer veeieefjkeÀ nesves kesÀ veeles yeQkeÀ ûeeceerCe efJekeÀeme keÀes megefveefM®ele keÀjves kesÀ

efueS je<ìêr³e veerefle³eeW keÀe Heeueve meef¬eÀ³e ªHe mes keÀjlee jne nw~

yeQkeÀ ves Hee$e efkeÀmeeveeW keÀes jenle GHeueyOe keÀjeves SJeb meeLe ner meeLe GvekesÀ efueS DeewHe®eeefjkeÀ

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ÒeYeeJeer ªHe mes megefveefM®ele efkeÀ³ee nw~ yeQkeÀ meceepe kesÀ keÀcepeesj Jeieex kesÀ DeeefLe&keÀ-meeceeefpekeÀ

efJekeÀeme kesÀ efueS Òeefleye× nw~ yeQkeÀ jespeieej kesÀ DeJemejeW keÀes Òeeslmeeefnle keÀjves Deewj iejeryeer

Gvcetueve, iejerye Deewj DeuHemebK³ekeÀ mecegoe³eeW keÀes THej Gþeves Deewj meeLe ner meeLe ceefnueeDeeW

kesÀ meMeeqkeÌlekeÀjCe kesÀ efueS ueieeleej men³eesie os jne nw~ yeQkeÀ meeceev³e ªHe mes ÒeeLeefcekeÀlee

ÒeeHle #es$e Deewj efJeMes<e ªHe mes ke=Àef<e keÀes keÀejesyeej DeJemej kesÀ ªHe ceW ueslee nw Deewj

ÒeeLeefcekeÀlee #es$e kesÀ Devleie&le GOeej osvee SkeÀ

ueeYeÒeo GÐece ceevelee nw~

meceer#eeOeerve Je<e& kesÀ oewjeve ÒeeLeefcekeÀlee #es$e

Deefûece ©. 17910 keÀjesæ[ mes yeæ{keÀj ©.

22611 keÀjesæ[ nes ieS Deewj FveceW ©. 4701

keÀjesæ[ keÀer Je=ef×Meerue yeæ{esÊejer ngF& ~ efJeiele

Je<e& keÀer leguevee ceW 26.25% Je=ef× ope& ngF&

nw~ efveJeue yeQkeÀ $eÝCe kesÀ 40% kesÀ efveOee&efjle

v³etvelece ceeveob[ kesÀ efJe©× ÒeeLeefcekeÀlee #es$e

Deefûece efveJeue yeQkeÀ $eÝCe keÀe 49.08% jns~

kegÀue ke=Àef<e Deefûece yeQkeÀ $eÝCe kesÀ efveOee&efjle

18% kesÀ efJeª× 19.58% jns~

Retail credit assets would be aggressively pursued to contribute increasing

share in the growth of the Bank, in synchronization with the opportunities

in this segment.

Priority Sector Advances

As a responsible corporate citizen, the bank has been actively involved in

pursuing the national policies, for ensuring rural development.

The Bank has effectively ensured improved flow of credit to agriculture

sector while providing relief measures to eligible farmers vis-à-vis

improving their accessibility to formal credit. The bank is committed

towards socio-economic development of the weaker sections of Society.

The Bank is relentlessly extending support to promote employment

opportunities and poverty alleviation, upliftment of poor and minority

communities as well as empowerment of women. The Bank considers

Priority Sector in general and Agriculture in particular as a business

opportunity and lending under Priority Sector as a profitable venture.

During the year under review Priority

Sector advances increased from

Rs.17910 crore to Rs.22611 crore

recording an incremental growth of

Rs.4701 crore and registering a

growth of 26.25% over previous

year. Priority Sector advances

account for 49.08% of NBC as

against stipulated benchmark of 40%

of NBC. Total Agricultural advances

constitute 19.58% as against

stipulated 18% of NBC.

[ ©. keÀjesæ[ ceW Rs. in crore]

³eespevee ³eLee efoveebkeÀ ³eLee efoveebkeÀ jeefMe % Je=ef×

Scheme As on 31.03.2005 As on 31.03.2006 Amount Growth

mìej DeeJeeme $eÝCe

Star Home Loan 2258 3300 1042 46mìej yebOekeÀ $eÝCe

Star Mortgage Loan 747 1858 1111 149mìej efMe#ee $eÝCe

Star Education Loan 291 467 176 60mìej Dee@ìesefHeÀve

Star Autofin 103 286 183 178mJeCe& pe³ebleer DeeJeeme $eÝCe

Golden Jubilee Rural Housing 446 533 87 20

ii. Life Insurance cover to home loan borrowers for loanprotection (optional).

Innovative measures undertaken by the Bank to give further boost toRetail Credit growth included tie-up arrangements for financing – viz.with Yamaha Motor India Sales, TVS Motors, LG Electronics, PhillipsElectronics, Bajaj Auto, ‘Intel’ Tech India, Kesari Tours, etc.The growth in respect of Star Home Loan, Star Mortgage Loan, StarEducation Loan, Star Autofin, Golden Jubilee Rural Housing Scheme

during the year was as under :-

ii. $eÝCe keÀer j#ee kesÀ efueS DeeJeeme $eÝCe GOeejkeÀlee&DeeW keÀes peerJeve yeercee megj#ee

(JewkeÀefuHekeÀ)

Kegoje $eÝCe Je=ef× keÀes Deewj ieefle osves kesÀ efueS yeQkeÀ ves efJeÊeHees<eCe kesÀ efueS ³eeceene ceesìj

Fbef[³ee mesume, ìerJeerSme ceesìme&, Suepeer FueskeÌìê@efvekeÌme, efHeÀefueHme FueskeÌìê@efvekeÌme, yepeepe

Dee@ìes, ``Fvìsue'' ìskeÀ Fbef[³ee, kesÀmejer ìtme& Deeefo kesÀ meeLe ieþpeesæ[ J³eJemLee pewmes veS

GHee³e efkeÀS nQ~

mìej DeeJeeme $eÝCe, mìej yebOekeÀ $eÝCe, mìej efMe#ee $eÝCe, mìej Dee@ìesefHeÀve, mJeCe& pe³ebleer

ûeeceerCe DeeJeeme ³eespeveeDeeW kesÀ mebyebOe ceW Je<e& kesÀ oewjeve Òeieefle efvecveefueefKele jner ë


20

yeQkeÀ Üeje DeHeveeF& ieF& efJeefYevve keÀejesyeejer keÀe³e&veerefle³eeB SJeb veerefle³eeW kesÀ HeefjCeecemJeªHe

efJeMes<e ke=Àef<e $eÝCe ³eespevee (SmeSmeerHeer) kesÀ Devleie&le ©.4399 keÀe mebefJelejCe ngDee pees

efJeiele Je<e& kesÀ mebefJelejCe keÀer leguevee ceW 33% DeefOekeÀ nw~ GlHeeove $eÝCe ©. 2275 keÀjesæ[

SJeb efveJesMe $eÝCe ©. 2124 keÀjesæ[ jns~ yeQkeÀ ves 36086 veF& efveJesMe Heefj³eespeveeSB Megª keÀeRr

efpeveceW kegÀue $eÝCe jeefMe ©. 497 keÀjesæ[ meeqcceefuele nw~ MeeKeeDeeW ves 154278 efkeÀmeeve

¬esÀef[ì keÀe[& peejer efkeÀS efpevekeÀer meerceeSB ©. 659 keÀjesææ[ nQ~ efpeveceW mes 75818 ¬esÀef[ì

keÀe[& íesìs SJeb meerceeble efkeÀmeeveeW keÀes 2005-06 kesÀ oewjeve peejer efkeÀS ieS~ ³en efkeÀmeeve

¬esÀef[ì keÀe[& ³eespevee kesÀ Devleie&le ueeYeûeeefn³eeW keÀer kegÀue mebK³ee keÀe 49% nw~

yeQkeÀ ves veJeesvces<eer SJeb Devetþer ³eespeveeDeeW pewmes MekeÌkeÀj efceueeW, [s³ejer menkeÀejer meefceefle³eeW

SJeb keÀleeF& efceueeW kesÀ ceeO³ece mes mebefJeoe Kesleer leLee yeerpe GlHeeokeÀ kebÀHeefve³eeW kesÀ meeLe

®ewveue efJeÊesHees<eCe ³eespeveeDeeW keÀe efJeÊeer³eve Deeefo efkeÀ³ee nw~ yeQkeÀ ves keÀeueebefpe³ece HeÀeGb[sMeve

kesÀ meeLe menceefle %eeHeve efkeÀ³ee nw pees 4 jep³eeW ceW $eÝCe ³eespekeÀ Deewj mJe³ebmesJeer mecetneW keÀes

Òeeslmeeefnle keÀjvesJeeuee SkeÀ Òeefleef<þle iewjmejkeÀejer mebieþve nw~

yeQkeÀ ves veeyee[& kesÀ meeLe men-efJeÊesHees<eCe Heefj³eespeveeDeeW kesÀ efueS ueeYeÒeo mecePeewles kesÀ meeLe

meeLe vesyekeÀe@vme pees veeyee[& kesÀ HetCe& mJeeefcelJe keÀer mene³ekeÀ kebÀHeveer nw, kesÀ meeLe ke=Àef<e

Heefj³eespeveeDeeW kesÀ cetu³eebkeÀve kesÀ meeLe-meeLe efJemle=le Heefj³eespevee efjHeesì& lew³eej keÀjves kesÀ

efueS mecePeewlee efkeÀ³ee nw~

yeQkeÀ ves keÀvee&ìkeÀ SJeb iegpejele jep³eeW ceW ûeeceerCe pevelee efJeMes<ekeÀj ke=Àef<ekeÀefce&³eesb kesÀ ueeYe

kesÀ efueS ûeeceerCe efkeÀ³eesmkeÀ Megª efkeÀS nQ~ Fmes Deye Dev³e jep³eeW pewmes leefceuevee[g, kesÀjue

SJeb DeevOe´ÒeosMe ceW Yeer Megª efkeÀ³ee pee jne nw~

yeQkeÀ ves GÐeefce³eeW efJeMes<ekeÀj ûeeceerCe pevelee SJeb efkeÀmeeveeW keÀes ÒeefMe#eCe osves kesÀ efueS

YeesHeeue ceW SkeÀ ©[mesìer ÒekeÀej keÀe ÒeefMe#eCe mebmLeeve mìej mJejespeieej ÒeefMe#eCe mebmLeeve

(SmeSmeHeerSme) mLeeefHele efkeÀ³ee nw~ GÐeceer peneB ve kesÀJeue ÒeefMe#eCe ÒeeHle keÀjWies yeefukeÀ

GvnW iegCeeW kesÀ DeeOeej Hej efJeÊeer³e mene³elee Deewj oerIe&keÀeueerve DeepeerefJekeÀe nsleg mJejespeieej

kesÀ efueS Yeer ceeie&oMe&ve efo³ee peeSiee~

The various business strategies and policies adopted by the Bank have

resulted in achieving disbursement of Rs.4399 crore in agriculture sector

under special Agriculture credit plan (SACP) with a growth of 33% over

previous year’s disbursement. The production credit accounted for Rs.2275

crore and investment credit Rs.2124 crore. The Bank has implemented

36086 new investment projects involving a credit outlay of Rs.497 crore.

The Branches have issued 154278 Kisan Credit Cards with limit of Rs.659

crore of which 75818 credit cards were issued to small and marginal

farmers during 2005-06, which constitutes 49% of the total number of

beneficiaries under the Kisan credit card scheme.

The Bank has financed innovative and novel schemes such as Contract

Farming through sugar mills, Dairy co-operatives and spinning mills and

Channel Financing Scheme through corporates and seed producing

companies. The Bank has also entered into MOU with Kalanjiam

Foundation, a reputed NGO for promoting SHGs and credit linking in 4

states.

The Bank has also pioneered in entering into strategic alliance for co-

financing projects with NABARD besides MOU with NABCONS, the

wholly owned subsidiary of NABARD for preparation of detailed project

reports as well as appraisal of agricultural projects.

The Bank has initiated Rural Kiosks in Karnataka and Gujarat States for

the benefit of rural populace, in particular to Agriculturists. The experience

is now being extended to other states such as Tamil Nadu, Kerala and

Andhra Pradesh.

The Bank has established Star Swarozgar Prashiksha Sansthan (SSPS), a

RUDSETI type training institute at Bhopal for imparting training to

entrepreneurs, in particular, to rural populace and farmers. The entrepreneurs

shall not only get training but also will be guided for financial assistance

on merits as well as further self employment for their sustained livelihood.

[(©. keÀjesæ[ ceW Amt. Rs. in crore]

ÒeeLeefcekeÀlee #es$e kesÀ Keb[ Segments of Priority Sector ³eLee 31 cee®e& ³eLee 31 cee®e& Je=ef× GrowthAs of 31st March As of 31st March jeefMe Amount ÒeefleMele

2005 2006 Percentageke=Àef<e Agriculture 6990 9020 2030 29.04ueIeg GÐeesie Small Scale Industries 4598 5625 1027 22.33Dev³e ÒeeLeefcekeÀlee #es$e Other Priority Sector (inclusive of Agro(ke=Àef<e SJeb KeeÐe ÒemebmkeÀjCe GÐeesie & Food processing Industry &Deewj met®evee ÒeewÐees/meeHeÌìJes³ej-©.1 IT/Software upto Rs.1 crore) 6322 7966 1644 26.00keÀjesæ[ lekeÀ)

kegÀue ÒeeLeefcekeÀlee #es$e Total Priority Sector 17910 22611 4701 26.25

Direct Agricultural advances account for 13.64% as against statutory

requirement of 13.5% of NBC. The weaker section advances constitute

10.31% as against Government stipulation of 10% of NBC.

Advances to women beneficiaries constitute 7.08% as against statutory

requirement of 5% of NBC. The position of outstanding level of business

under various segment of Priority Sector for the year ending March 2005

and March 2006 is as under :-

Òel³e#e ke=Àef<e $eÝCe efveJeue yeQkeÀ $eÝCe kesÀ 13.5% keÀer meebefJeefOekeÀ DeeJeM³ekeÀlee kesÀ efJeª×

13.64% jns~ mejkeÀej Üeje efveJeue yeQkeÀ $eÝCe kesÀ efveOee&efjle 10% kesÀ ceeveob[ kesÀ efJeª×

keÀcepeesj Jeie& Deefûece 10.31% jns~

ceefnuee efnleûeeefn³eeW keÀes Deefûece efveJeue yeQkeÀ $eÝCe kesÀ 5% keÀer meebefJeefOekeÀ DeHes#ee kesÀ

efJeª× 7.08% jns~ Je<e& meceeeqHle cee®e& 2005 SJeb cee®e& 2006 keÀes ÒeeLeefcekeÀlee #es$e kesÀ

efJeefYeVe Keb[eW kesÀ Devleie&le keÀejesyeej kesÀ yekeÀe³ee mlej keÀer efmLeefle efvecveefueefKele Devegmeej jnerë


21

yeQkeÀ ves 4576 Yetefcenerve efkeÀmeeve keÀe[& peejer efkeÀS nQ~ yeQkeÀ ves kesÀvêer³e ÒeJeefle&le ³eespeveeSB

pewmes mJeCe&pe³ebleer ûeece mJejespeieej ³eespevee, mJeCe& pe³ebleer Menjer jespeieej ³eespevee, ÒeOeeveceb$eer

jespeieej ³eespevee SJeb meHeÀeF&keÀefce&³eeW kesÀ G×ej SJeb HegveJee&me kesÀ efueS ³eespevee nsleg efJeÊeHees<eCe

peejer jKee~ yeQkeÀ ûeeceerCe iejeryeeW efJeMes<ekeÀj meceepe kesÀ keÀcepeesj JeieeX lekeÀ DeHeveer HengB®e

yeæ{eves kesÀ efueS ceeFkeÀes $eÝCe kesÀ Devleie&le mJe³eb mene³elee mecetneW keÀe efJeÊeHees<eCe keÀj jne

nw~ Je<e& kesÀ oewjeve yeQkeÀ ves cee®e& 2006 lekeÀ 33300 mecetneW SJeb $eÝCe mecye× 28000 mecetneW

keÀes 49000 mJe³eb mene³elee mecetneW kesÀ meb®e³eer ªHe mes peesæ[les ngS Òeeslmeeefnle efkeÀ³ee nw~

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osves kesÀ efueS efme[yeer/veeyee[& mes ceev³eleeÒeeHle íesìs efJeÊe mebmLeeveeW kesÀ ceeO³ece mes Yeer

efJeÊeHees<eCe efkeÀ³ee nw~

yeQkeÀ ves Devegmetef®ele peeefle/pevepeeefle kesÀ HeefjJeejesb keÀes peue mebûenCe ³eespeveeDeeW leLee

efmeb®eeF& efJekeÀeme nsleg efJeÊeer³e mene³elee Òeoeve keÀer nw~ efkeÀmeeveeW kesÀ ueeYe kesÀ efueS efkeÀmeer Yeer

mece³e keÀneR Yeer yeweEkeÀie mesJeeDeeW keÀes GHeueyOe keÀjeves kesÀ Òe³eespeve mes yeQkeÀ ves yeerDeesDeeF&

Meleeyoer ke=Àef<e efJekeÀeme keÀe[&, efkeÀmeeveeW keÀes FueskeÌì^e@efvekeÀ meceLe& ¬esÀef[ì keÀe[& (Jeer]pee)

ÒeejbYe efkeÀ³ee nw Deewj Deye lekeÀ 6373 keÀe[& peejer efkeÀ³es pee ®egkesÀ nQ~

yeQkeÀ ves mebHetCe& osMe ceW efJemleeefjle 101 ieebJees kesÀ meceeqvJele efJekeÀeme kesÀ efueS leLee Meleeyoer

Je<e& Heefj³eespevee kesÀ ªHe ceW Òel³eskeÀ MeeKee Üeje 1 iejerye efkeÀmeeve, 1 iejerye ceefnuee, 1 iejerye

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kesÀ Debleie&le Meew®eeue³eeW kesÀ efvecee&Ce ceW ûeeceerCe HeefjJeejeW keÀes mene³elee os jne nw~ yeQkeÀ Üeje

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ceW ke=À<Ceeefiejer ceW meIeve efJeÊeer³e mene³elee Òeoeve keÀer nw~ ³en Òemevvelee keÀe efJe<e³e nw efkeÀ 9

Heb®ee³eleeW ves, efpeveceW nceves ³eespevee keÀe keÀe³ee&vJe³eve efkeÀ³ee nw, Je<e& 2006 kesÀ oewjeve

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keÀjves kesÀ efueS meceLe&ve Òeoeve keÀj jne nw~ yeQkeÀ J³eeqkeÌle³eeW keÀes GOeej osves kesÀ efueS ceO³emLe

DeeJeeme efJeÊe kebÀHeefve³eeW, HesÀ[jsMeveeW Deeefo keÀes efJeÊeHees<eCe Hej efJe®eej keÀj jne nw~ ûeeceerCe

DeeJeeme nsleg efJeÊeHees<eCe kesÀ Debleie&le yeQkeÀ keÀe keÀe³e& efve<Heeove efvecveevegmeej nw ë

The Bank has issued 4576 Bhumiheen Kisan Cards. The Bank continued

extending finance under centrally sponsored schemes viz. Swarnajayanti

Gram Swarozgar Yojana, Swarnajayanati Shahari Rozgar Yojana, Prime

Minister’s Rozgar Yojana and Scheme for Liberation and Rehabilitation

of Scavengers. The Bank in order to enhance the outreach to rural poor,

especially to weaker sections of the Society, is extending finance under

Micro credit to SHGs. During the year Bank has promoted 33300 Groups

and credit linked 28000 groups with cumulative linking of 49000 Self

Help Groups . The Bank has also financed through reputed Micro finance

Institutions which are accredited to SIDBI/NABARD for onlending to

SHGs from the undeveloped and developing centres of the various parts

of the country.

The Bank has extended financial support to SC/ST families for water

harvesting schemes and irrigation development. With a view to provide

anytime anywhere banking facilities for the benefit of farmers, the Bank

has launched BOI Shatabdi Krishi Vikas Card, an e-enabled credit card

(VISA) to the farmers and so far 6373 cards have been issued.

The Bank has undertaken an innovative and ambitious project for integrated

development of 101 villages spread all over the country and also hand holding

of one poor farmer, one poor artisan, one poor woman, one poor student and

one poor dalit by each branch till they sustain their livelihood and stand on

their own as a Centenary Year Project. The Bank has also organized 1067

Farmers’ Clubs and 58 Demonstration Plots in various states to sensitise the

farmers to increase their productivity and economic conditions. The Bank has

entered into MOU with National Collateral Management Services Ltd.,

(NCMSL) and will be signing MOU with National Bulk Handling

Corporation (NBHC) for enhancing our financing under Produce

Marketing Scheme.

The Bank is actively involved in implementing Golden Jubilee Rural

Housing Finance Scheme (GJRHFS) and is supporting rural families in

construction of toilets under Nirmal Gram Yojana of the Central

government. The Bank has extended financial assistance under this Scheme

extensively in Kolhapur, Sangli, Raigad Districts in Maharashtra and

Krishnagiri in Tamil Nadu. It is heartening to note that 9 panchayats in

which we have implemented the scheme have received presidential awards

during March 2006. The Bank is extending financial support for acquiring

solar equipments in rural areas. The Bank is considering financing to

intermediary housing finance companies, federations etc. for on lending to

individuals. Bank’s performance under financing for rural housing is as

under :-

(©. keÀjesæ[ ceW Rs. in crore)

mJeerke=Àle Sanctioned mebefJeleefjle Disbursed

Keeles A/cs jeefMe Amount Keeles A/cs. jeefMe Amount

peerpesDeejS®eSHeÀSmeGJRHFS 10795 168.00 10543 153.00


22

DeûeCeer yeQkeÀ

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(13), ceneje<ì^ (12), ceO³e ÒeosMe (12), GÊej ÒeosMe (7) Deewj Gæ[ermee (2) ceW HewÀuee nw~

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efJeosMeer keÀejesyeej

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efve#esHeeieej menYeeieer ([erHeer)mesJeeSb

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yeeo yeQkeÀ ves Denceoeyeeo, yeQieuetj, ®esVew, veF& efouueer, keÀesuekeÀelee Deewj cegbyeF& ceW meer[erSmeSue

mes mecye× meele [erHeerDees mLeeefHele efkeÀ³es nQ~ Hemeboeroe efve#esHeeieej keÀer efve#esHeeieej mesJeeDeeW

keÀe ueeYe uesves keÀe efJekeÀuHe yeQkeÀ Üeje ÒemleeefJele mesJeeDeeW keÀer Devetþer efJeMes<elee nw~

Lead Bank

The Bank has been assigned with Lead Bank responsibility in 46 Districtsspread over 5 States viz., Jharkhand (13), Maharashtra (12), MadhyaPradesh (12), Uttar Pradesh (7) and Orissa (2). The Bank has beensuccessfully discharging its duties of Lead Bank in all these Lead Districts.The Annual Credit Plan for the year 2005-06 was launched in all the LeadDistricts involving credit outlay of Rs.1916.38 crore for our Bank vis-a-vis Rs.12008 crore for all Banks. The Bank has disbursed Rs.2283 croreachieving 119% of the target, while all other banks have disbursedRs.12589 crore achieving 105% of the target.

Forex Business

The forex business handled by the bank showed robust growth. Exportturnover increased to Rs. 22510 crore, and import turnover reachedRs.26030 crore, during FY 2006, a growth of 11.65% and 63.16 %respectively.

The Bank continued to be a leading player in the Forex Market. Turnoverof the Bank’s three dealing rooms have gone up to Rs.315418.63 crore.Profit from domestic dealing room operations however, declined fromRs.162.24 crore in FY 2004-05 to Rs.133.35 crore in FY 2005-06 due tosqueeze in exchange margins.

Investments

During the year interest rates continued an upward bias with the yield onbenchmark 10-year G-secs. further increasing from 6.68 % as on March05 to 7.52 % as on 31-03-06. In view of the rising interest rate scenario,Bank maintained an optimum level of investments with a view to containmarket risk. As against the SLR requirement of 25% of Net Demand andTime Liabilities (NDTL) , Bank maintained SLR investments marginallyhigher at 26.21% of NDTL. At year-end SLR investments on grossbasis amounted to Rs.21094.52 crore (79.21%) of total investments) andNon SLR investments stood at Rs.5537.72 crore (20.79 %) of totalinvestments).

Investments are made in accordance with the comprehensive investmentpolicy approved by the Board. The policy is reviewed periodically torespond to market dynamics and regulatory requirements.

Treasury Operations

Bank played an active role in all segments of the market – Funds / Forexand Bonds during the year 2005-06. During the year the equity marketwitnessed robust activity with Sensex and Nifty reaching historic levels.Bank participated in the market rally and actively traded in scrips. Bankalso earned more income than any year in the past from the numerousIPOs and follow-on offers. The equity desk contributed an amount of Rs.49.55 crore towards Treasury income.

The Bank has been active in derivative business by offering a full spectrumof derivative products. A number of new customers were added in thederivative segment.

Depository Participants (DP) Services

The Bank made it’s initial foray into depository services during 1998-99with the setting up of a Depository Participant Office (DPO) affiliated tothe National Securities Depository Ltd (NSDL). Thereafter, Bank set upseven DPOs affiliated to CDSL at Ahmedabad, Bangalore, Chennai, NewDelhi, Kolkata and Mumbai. The option to avail depository services of aDepository of choice is an unique feature of the services offered by theBank.


23

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Another striking feature of Bank‘s depository services is the networkingof a large number of MBB/CBS branches with the DPOs by leveragingcore banking capabilities thus providing convenience to clients to havetheir time critical transactions done through their branch level. Major MBB/CBS branches at Ahmedabad, Bangalore, Chennai, Kolkata, Mumbai andNew Delhi are linked with the DPOs at their respective centre. Further,major MBB/CBS branches at Bhubaneshwar, Chandigarh, Hyderabad,Indore, Jaipur, Kolhapur, Ludhiana, Pune, Rajkot, Surat, Ujjain andVadodara are linked with the NSDL DPO at Mumbai. About 300 branchesare presently linked with the DPOs. This is also in tune with SEBI’sdesire to further reduce settlement cycle from T+2 presently to T+1. Bankhas developed a pool of qualified staff to handle depository services asprescribed by the Depositories.

The number of demat accounts opened by our DPOs by the end of FY2005-2006 have gone upto 115000 (no. of active accounts 88000 ) whichis significantly higher than the previous year’s tally of 90700. During theyear 2005-06, Bank earned gross revenue of Rs. 387 lakh from DP servicesas against Rs.283 lakh in the year 2004-05. Other than providing usualsecurities related depository services, Bank also extends depository servicesin commodity futures linked with NCDEX (Commodity Exchange) inNSDL/CDSL depository system.

Star Share Trade - On-line Trading in Shares

As internet trading in shares has been gaining popularity amongst theinvestors in the stock markets and its share in the traded volumes on theexchanges has been increasing, with a view to meeting the aspiration ofour clients, Bank has entered into tie-up arrangement with M/s Asit C.Mehta Investment Intermediates Ltd., a SEBI registered corporate memberof repute of both the stock exchanges viz. BSE and NSE during the year,to facilitate launching of various capital market related products including‘On-Line Trading in Shares’. To begin with the On-Line Trading in Sharesfacility was made available to clients of our CBS branches in MumbaiNorth, Mumbai South and Raigad-Thane Zones. The facility is proposedto be rolled out to clients of all our CBS branches in a phased manner. Thisis expected to provide our banking and demat products an edge in themarket.

Card Products Business

Various innovations brought in by the bank through additional features to

the existing Cards Products and introduction of new Cards during the year

2004-2005, have started bearing fruits this year. The year saw launch of

three new products, viz. Shatabdi Krishi Vikas Card, Star Vidya Card

(both VISA Cards) and Global Debit cum ATM Card(MasterCard).The

Shatabdi Krishi Vikas Card was issued to commemorate the centenary

year of the Bank and as a salute to the farmers of the country. The Card

was launched through the hands of the Hon. Minister of Finance Shri

P. Chidambaram on 10th September, 2005.

New innovations and additional features have enabled the bank to reverse

the trend in erosion of Card base. During the year 30518 new Credit Cards

were issued taking the active Card base to 1, 06,378 Cards (including

6373 Shatabdi Krishi Vikas Cards) as on 31st March, 2006, comprising of

both Master Card and VISA Cards. Merchant establishments enrolled

with the Bank stood at 1993 of which 1037 merchants are equipped with

EDC (Electronic Data Capture) machines. Issuing turnover of the bank

stood at Rs 143.83 Crore and acquiring turnover stood at Rs.140.14 Crore.


24

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J³eJemLee :

During the year, the bank issued 4.29 lakh Starlinks International Debit

cum ATM Cards (VISA Electron) and the total number of such Cards

issued by the Bank stood at 9.80 lakh as at the end of March, 2006. Global

Debit cum ATM Card (Master Card) was launched by the Bank on 22nd

February, 2006. The number of cards issued stood at 16540 as at the end

of March 2006.

By the end of March 2006 number of ATMs installed by the Bank stood

at 314 across the country including one mobile ATM.

One of our affiliate banks, Union Bank of India ceased to be our affiliate

since they have started issuing their own Cards. The Bank now has three

affiliate banks, viz. Bank of Maharashtra, United Western Bank and

Tamilnadu Mercantile Bank issuing Credit Cards under our brand name

‘India Card’. The relation continues on mutual trust and cooperation.

Apart from Credit Card issuing and acquiring business, the Bank also

performs the role of settlement bank for Master Card in India, Cash Tree

and Bancs ATM networks.

Bullion Exchange

The turnover in bullion business amounted to Rs. 414.76 crore during the

year as compared with Rs. 408.73 crore in the previous year. Under the

‘Bullion Loan Scheme for Exporters’(BLSE) at SEEPZ Branch, 5302 kgs

of gold was sold to exporters and 550 kg of gold was sold to domestic

customers at Ahmedabad Branch. Total earnings to the tune of Rs. 210.30

lakh were recorded during the year.

Star Cash Management Services

Star Cash Management Services has been in operation for the last five

years facilitating speedier collection of local and upcountry cheques. The

customers can pool the funds arising out of local and upcountry collections

and have these funds made available at a particular centre or at multiple

centres of their choice. This service is available at 33 centres of the Bank.

The turnover clocked during the year is Rs.59.61 crore. In tune with the

advancing technology we are revamping our Star Cash Management

Services.

THIRD PARTY PRODUCTS

Corporate Agency arrangement with ICICI Prudential Life Insurance Co

Ltd. for selling Life Insurance Products :

The Bank has entered into a corporate agency arrangement with ICICI

Prudential Life Insurance Co Ltd. for selling life insurance products. The

number of branches engaged in selling life insurance products has gradually

increased and presently more than 900 branches are undertaking this

business. Various initiatives were undertaken for giving thrust to this

business, like identifying Marketing Managers exclusively for Insurance

business in high potential areas and regular monitoring by controlling

offices. This resulted in increase in volume of business and referral

commission by 90% over the previous year.

Tie-up with National Insurance Company Limited for selling Non-Life

Insurance products :


25

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The existing tie-up with NICL has been further strengthened with all the

branches in all the Zones undertaking this business and thereby ensuring

more than 75% increase in commission on year to year basis.

Tie-up with UTI Mutual Funds for selling Mutual Funds Products :

Our existing tie-up as a distributor for ‘UTI MF’ has resulted in our

customers getting other financial products under one roof. Looking to the

potential and need to satisfy the ever growing demand for similar products

and to offer a choice, Bank has tied up with HDFC Asset Management

Company Ltd. in Feb 2006 for distributing their mutual fund products.

We have adequate number of AMFI qualified personnel placed strategically

at branches to ensure focussed sales activity at all our major centres.

ECGC Credit Insurance

Bank entered into a corporate agency tie-up with Export Credit Guarantee

Corporation of India Ltd. (ECGC) for marketing the credit insurance

products of ECGC. The agreement to this effect was signed on 7th June

2005. Under the tie-up, the Bank’s branches are undertaking the business

of distribution of various credit insurance products of ECGC to their

constituents.

Participation of the exporters in these ECGC insurance products is purely

voluntary and no charge or fees or commission is levied by us on these

products. During the Year 2005-06, the Bank procured a business of

Rs.23.72 lakh and earned commission of Rs.73,626/- from ECGC.

International Operations

The overseas network of the Bank consists of 20 branches and 3

Representative Offices spread across 12 countries in four continents, with

presence in all the major financial centres such as London, New York,

Paris, Tokyo, Singapore and Hong Kong. The Bank has 7 well equipped

active foreign exchange dealing rooms the world over covering all time

zones.

The Bank has one subsidiary and one associate abroad. The Bank has

correspondent relationship with 257 foreign entities spread over 104

countries.

The Foreign Branches are active in investment market and loan

syndications. The overseas branches of the Bank accounted for 18 % of

Bank’s total business as at March end 2006. Operating profit of foreign

branches contributed 15.41 % to the Bank’s global operating profit at the

end of March 2006.

Customer Deposits stood at a level of Rs 14125 crore recording a rise of

Rs. 3082 crore (27.90%) over the deposits of Rs. 11043 crore as on

31.3.2005. Advances stood at the level of Rs.12639 crore recording a fall

of Rs.652 crore (-4.90 %) over the advances of Rs. 13291 crore as on

31.3.2005. Investments stood at the level of Rs 5453 crore recording a rise

of Rs.552 crore (11.26 %) over the investments of Rs. 4901 crore as on

31.3.2005. Gross NPAs stood at the level of Rs 260 Crore recording a fall

of Rs. 18 crore (-6.47%) compared to the NPAs of Rs. 278 crore as on

31.3.2005. Operating Profit stood at the level of Rs.262 crore. Net profit

stood at the level of Rs.207 crore.


26

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SveHeerS keÀes keÀce keÀjves kesÀ efueS Deeefmle Hegveefve&cee&Ce kebÀHeefve³eeW keÀes DeefYe%eele Deeefmle³eeB

yes®eves keÀer mebYeeJeveeSb leueeMe jns nQ~

Je<e& kesÀ oewjeve Yeejleer³e efjpeJe& yeQkeÀ kesÀ efoMeeefveoxMeeW Hej DeeOeeefjle yeQkeÀeW/efJeÊeer³e mebmLeeDeeW/

iewj yeQefkebÀie efJeÊeer³e kebÀHeefve³eeW keÀes efJeÊeer³e Deeefmle³eeB yes®eves nsleg veerefle HetJe& ner Devegceesefole

keÀer ieF& nw~ nce Fme Je<e& Jemetueer keÀes yeæ{eves kesÀ efueS Fme ceeO³ece mes Yeer DeefYe%eele

Deeefmle³eeB yes®eves keÀer mebYeeJeveeSb leueeMe jns nQ~

Je<e& kesÀ oewjeve efJeMes<eerke=Àle yeæ[er Deeefmle Jemetueer MeeKee efpemekeÀe veece Deeefmle Jemetueer

ÒeyebOeve mesJeeSb (SDeejSceSme) nw Keesueer ieF& leeefkeÀ cegbyeF& Menj ceW G®®e cetu³e kesÀ ©.100

ueeKe kesÀ SveHeerS keÀe cegkeÀeyeuee efkeÀ³ee pee mekesÀ~ ³en GHee³e meHeÀue meeefyele ngDee keÌ³eeWefkeÀ

MeeKee ves ©.75.46 keÀjesæ[ keÀer Jemetueer keÀer nw~

nceejs yees[& ves pegueeF& 2005 ceW ©. 50,000/- lekeÀ Mes<e kesÀ íesìs SveHeerS/yeÆs KeeleeW keÀe

cegkeÀeyeuee keÀjves kesÀ efueS SkeÀ efJeMes<e ³eespevee Devegceesefole keÀer nw, efpemeceW meYeer MeeKee

ÒeyebOekeÀeW keÀes Òel³ee³eesefpele DeefOekeÀej efo³es ie³es nQ~ ³eespevee kesÀ ÒeejbYe mes ner nceves Deye

lekeÀ 1.14 ueeKe mes DeefOekeÀ KeeleeW ceW ©. 59.20 keÀjesæ[ keÀer Jemetueer keÀer nw~ FmekesÀ keÀejCe

®eeuet Je<e& kesÀ oewjeve yeQkeÀ keÀes yeæ[er mebK³ee ceW íesìs KeeleeW keÀe efveHeìeve keÀjvee mebYeJe nes

mekeÀe nw~

efJeefYevve MeeKeeSb/Deb®eue Jemetueer kewÀcHe Dee³eesefpele keÀj jns nQ Deewj ueIeg SveHeerS kesÀ

lJeefjle efveHeìeve kesÀ efueS ueeskeÀ DeoeueleeW ceW menYeeefielee keÀj jns nw~ yeQkeÀ DeefOekeÀ mebK³ee

ceW Jemetueer kewÀcHe Dee³eesefpele keÀjves Hej yeue os jne nw~

Je<e& 2005 kesÀ veJecyej ceen ceW, Yeejleer³e efj]peJe& yeQkeÀ Üeje SmeSceF& meskeÌìj kesÀ Debleie&le ©.

10 keÀjesæ[ kesÀ yekeÀe³ee Mes<e Jeeues KeeleeW kesÀ efueS DeesìerSme ³eespevee ÒeejbYe keÀer ieF& nw~

The ratio of net non-performing assets of the Foreign Branches has also

come down to 0.03% as at March-end 2006 as against 0.11 % as at

March-end 2005.

During the year the Bank raised USD 250 Million under Medium Term

Note (MTN) program of USD 1 Billion for its overseas operations. The

MTN issue of USD 250 Million was rated as Baa3 by Moodys and BB+

by S &P. The rating are on par with the sovereign rating assigned by these

agencies to India.

NPA Management

Reduction of NPAs is given utmost priority and this function has been

achieved successfully over the years. Suitable measures were initiated to

augment recovery and contain NPAs. Efforts were also made to maximise

recovery in written off accounts and uncharged / unrealised interest in

NPA accounts which improves Bank’s profits significantly. To highlight

importance of these aspects during the year, the slogan ‘ARD- A profit

centre’ was adopted. During the year, a sizeable contribution to bank’s

profitability amounting to Rs. 235 crore came through recovery in Written

off accounts/ URI/UCI.

Sale of assets to Asset Reconstruction Companies is being explored as

one of the options. We have sold to ARCIL 3 impaired assets receiving

Rs. 43 crore during the year. More and more ARCs are expected to become

functional in times to come and hence we are further exploring the

possibilities of selling identified assets to ARCs for reducing NPAs.

During the year policy for sale of financial assets to Banks/FIs/NBFCs

based on RBI guidelines is already approved. We are exploring the

possibilities of selling identified assets through this route also to increase

recovery.

During the year, a Specialised Large Asset Recovery Branch – named

ASSET RECOVERY MANAGEMENT SERVICES (ARMS) was

opened to tackle high value of NPAs of Rs.100 lakhs in the city of

Mumbai. The step proved a success as the branch could recover Rs. 75.46 crore.

A special Scheme to tackle Small NPA/written off accounts with balances

upto Rs. 50,000 was approved by our Board in July 2005 delegating

powers to all Branch Managers. Since inception of the Scheme we could

recover about Rs. 59.20 crore in more than 1.14 lakh accounts. This has

enabled bank to resolve a large number of Small accounts during the

current year.

Various Branches/Zones have been conducting recovery camps and

participating in LOK ADALATs for speedy resolution of small NPAs.

Bank is laying emphasis on organizing more and more recovery camps.

In the month of November, 05, an OTS Scheme was introduced by RBI for

accounts with outstanding balances upto Rs.10 crore under SME Sector.


27

ceo mJeosMeer efJeosMeer JeweféekeÀ

Item Domestic 31.03.2006 Foreign 31.03.2006 Global 31.03.2006

³eLee 31.03.2006 keÀes ÒeejbefYekeÀ SveHeerS Opening NPA as on 31.03.2005 2878 278 3156IeìeSb ë Less:vekeÀo Jemetueer Cash Recovery 707 14 721mecegVe³eve Upgradation 142 — 142yeÆs Keelee Write Off 515 08 523kegÀue keÀìewleer Total Reduction 1364 22 1386peesæ[s ë Add:eqmueHespe Slippage 705 04 709³eLee 31.03.2006 keÀes Mes<e SveHeerS Closing NPA as on 31.03.2006 2219 260 2479

(©. keÀjesæ[ ceW Rs. in crore)

nceejer MeeKeeDeeW ves ³eespevee kesÀ Debleie&le Hee$e KeeleeW keÀes Meeefceue keÀjves nsleg ³eespevee keÀe

ueeYe efue³ee nw~

DeefOekeÀlece ueeYe kesÀ efueS SmeSDeejSHeÀSF&SmeDeeF& DeefOeefve³ece kesÀ ÒeeJeOeeveeW keÀe Yeer

keÀe³ee&vJe³eve efkeÀ³ee ie³ee Deewj Fme ceeO³ece mes Je<e& 2005-06 kesÀ oewjeve iele Je<e& kesÀ ©.235

keÀjesæ[ keÀer leguevee ceW ©.288 keÀjesæ[ keÀer Jemetueer

keÀer ieF&~

Je<e& kesÀ oewjeve, ©.1386 keÀer keÀceer/Jemetueer

(©.721 keÀjesæ[ keÀer vekeÀo Jemetueer Deewj ©.142

keÀjesæ[ keÀe mecegVe³eve) neefmeue keÀer ieF& nw~

DeefleefjkeÌle ªHe mes yeÆs KeeleeW, DeJemetueerke=Àle/

DeÒeYeeefjle y³eepe KeeleeW ceW ©.235 keÀjesæ[

keÀer Jemetueer Deewj FmekesÀ meeLe Jemetueerke=Àle

SveHeerS ceW ÒeeJeOeeveeW keÀes peejer keÀjves mes yeQkeÀ

kesÀ ueeYe ceW megOeej ngDee nw~ mJeosMeer SveHeerS

ceW vekeÀo Jemetueer, mecegVe³eve, yeÆs Keeles Deewj

DeJemetueerke=Àle y³eepe Deewj DeÒeYeeefjle y³eepe

keÀe meYeer yepeì neefmeue keÀj efue³ee ie³ee nw~ FmekesÀ efJeefYeVe DeebkeÀæ[s efvecveevegmeej nQ ë

Our branches have taken advantage of the Scheme to cover the eligible

borrowers under the Scheme.

The provisions of SARFAESI Act have also been implemented to the

maximum advantage and Rs. 288 crore is recovered through this route

during the year 2005-06 as against Rs. 235 crore in the previous year.

During the year, reduction of Rs.1386

crore (including cash recovery of Rs.

721 crore and upgradation of Rs. 142

crore) have been achieved.

Additionally, recoveries in written

off accounts, unrealised/uncharged

interest amounted to Rs. 235 crore

and this coupled with the release of

provision in the NPAs recovered

have improved the bottom line of the

Bank. In domestic NPAs all the

budgets of Cash Recovery,

Upgradation, Recovery in Written off

accounts and URI & UCI have been surpassed. The various figures are as

below:

Je<e& kesÀ oewjeve SveHeerS kesÀ GHe®e³e ceW Ieìlee ÒeJeen jne nw~ eqmueHespe keÀer jeskeÀLeece SJeb

efve³eb$eCe kesÀ efueS Òe³eeme peejer nw leeefkeÀ mekeÀue SveHeerS ceW ve³ee GHe®e³e YeefJe<³e ceW Yeer

kegÀue $eÝCe Deeefmle³eeW kesÀ 1% mes keÀce jns~

Yeejleer³e efj]peJe& yeQkeÀ ves efoveebkeÀ 31.03.2005 mes ÒeeJeOeeveerkeÀjCe kesÀ mebMeesefOele ceeveob[

efveOee&efjle efkeÀ³es nQ~ mebMeesefOele ceeveoC[eW kesÀ Devegmeej ÒeeJeOeeve DeeJeM³ekeÀleeDeeW keÀes Hetje

keÀjves kesÀ efueS, pees 31.03.2005 mes ÒeYeeJeer nw, ®ejCeye× ªHe ceW ÒeeJeOeeve efkeÀ³ee ie³ee nw~

yeQkeÀ ves ©. 195 keÀjesæ[ keÀe DeefleefjkeÌle/ÒeJeener ÒeeJeOeeve jKee nw~

There has been a decreasing trend in the accretion to NPAs in the year.Efforts will continue to contain and arrest the slippages so that fresh accretionto gross NPA are lower than 1% of the total Loan Assets in future.

Reserve Bank of India has prescribed revised norms of Provisioningw.e.f. 31.03.2005. Sufficient provisions have been made in a phased mannerto take care of provision requirements as per the revised norms, whichhave come into effect from 31.3.2005. The Bank has an extra/floatingprovision to the extent of Rs. 195 crore

(Rs. in crore)

2003-04 2004-05 2005-06

Gross NPA 3734 3156 2479

Net NPA 2061 1554 970

% of Gross NPA 7.86% 5.53% 3.72%

(to gross advances)

% of Net NPA 4.50% 2.80% 1.49%

(to net advances)

efvecveevegmeej DeebkeÀæ[s ³en oMee&les nQ efkeÀ efHeíues kegÀí Je<eeX mes JewefMJekeÀ mekeÀue SveHeerS kesÀ

meeLe ner efveJeue SveHeerS keÀer Òecee$ee ceW keÀceer nes jner nQ ë-

(©. keÀjes[ ceW)

2003-04 2004-05 2005-06

mekeÀue SveHeerS 3734 3156 2479

efveJeue SveHeerS 2061 1554 970

mekeÀue SveHeerS keÀe % 7.86% 5.53% 3.72%

(mekeÀue Deefie´ceeW mes)

efveJeue SveHeerS keÀe % 4.50% 2.80% 1.49%

(Mg× Deefie´ceeW mes)

The following figures show that there is decline in the quantum of globalGross NPAs as well as Net NPA over the years:


28

As on 31.3.2006, the gross Non-performing Advances stood at a reduced

level of Rs.2479 crore as compared to Rs. 3156 crore in the previous year.

Ratio of gross NPA to gross advances has come down to 3.72 % from

5.53 % recorded last year. The ratio of net NPA to net advances for the

Bank has also declined to 1.49% this year from 2.80 % last year.

Branch Network and Expansion

The Bank has a geographically well-spread branch network in India and

abroad. The bank has 2622 branches in India as at the end of March 2006.

In foreign countries, 20 branches and 3 representative offices make our

presence felt in all time zones of the globe.

During the year, 34 new branches were opened and 2 extension counters

were converted into full-fledged branches. Distribution of these new

branches is Metropolitan 12, Urban 12, Semi Urban 9 and Rural 3. The

Bank closed one extension counter and opened a new extension counter

during the year.

As part of branch rationalisation exercise the Bank closed or merged 8 un-

remunerative branches. These were, Sion Housing & Personal Finance

Branch, Mullakkal Branch, Maniadih Branch, Kolkata Capital Market

Branch, Mumbai Drafts Paying Branch, Limbi Branch, Pipalzopa Branch

and Padlya Branch.yeQkeÀ keÀe MeeKee vesìJeke&À efvecveevegmeej nw ë Composition of branch network of the Bank :

ÒeJeie& 31.03.2005 31.03.2006

Category MeeKeeDeeW keÀer mebK³ee kegÀue keÀe % MeeKeeDeeW keÀer mebK³ee kegÀue keÀe %No. of Brs. % to Total No. of Brs. % to Total

ceneveiejer Metropolitan 423 16.3 505 19.2

Menjerr Urban 446 17.2 432 16.5

DeOe& Menjer Semi Urban 488 18.8 484 18.5

ûeeceerCe Rural 1237 47.7 1201 45.8

kegÀue MeeKeeSb Total Branches 2594 100 2622 100

efJemleej Heìue Extension Counters 165 - 163 -

³eLee 31.3.2006 keÀes, mekeÀue Devepe&keÀ Deefûece efJeiele Je<e& ceW ©. 3156 keÀjesæ[ keÀer leguevee

ceW ©. 2479 keÀjesæ[ kesÀ Ieìs ngS mlej Hej jne nw~ mekeÀue DeefûeceeW keÀer leguevee ceW mekeÀue

SveHeerS keÀe DevegHeele efJeiele Je<e& ope& 5.53% mes keÀce neskeÀj 3.72% jne nw~ yeQkeÀ kesÀ

efueS efveJeue Deefûece keÀer leguevee ceW efveJeue SveHeerS DevegHeele Yeer Fme Je<e& efJeiele Je<e& kesÀ

2.80% keÀer leguevee ceW keÀce neskeÀj 1.49% jne nw~

MeeKee vesìJeke&À SJeb efJemleej

yeQkeÀ keÀe YeewieesefuekeÀ ªHe mes Yeejle Deewj efJeosMe ceW megefJemleeefjle MeeKee vesìJeke&À nw~ yeQkeÀ

keÀer Yeejle ceW ³eLee cee®e& 2006 keÀer meceeeqHle lekeÀ 2622 MeeKeeSb nQ~ efJeosMeeW ceW 20

MeeKeeDeeW Deewj 3 ÒeefleefveefOe keÀe³ee&ue³eeW Üeje nceejer GHeefmLeefle efJeée kesÀ meYeer mece³e #es$eeW

ceW nw~

Je<e& 2005-2006 kesÀ oewjeve, 34 ve³eer MeeKeeSb Keesueer ieF¥ Deewj 2 efJemleej HeìueeW keÀes

HeefjHetCe& MeeKee kesÀ ªHe ceW HeefjJeefle&le efkeÀ³ee ie³ee~ Fve ve³eer MeeKeeDeeW ceW 12 MeeKeeSb

ceneveiejer, 12 Menjer, 9 DeOe&Menjer Deewj 3 ûeeceerCe nQ~ yeQkeÀ ves Je<e& kesÀ oewjeve SkeÀ efJemleej

Heìue yebo efkeÀ³ee Deewj SkeÀ ve³ee efJemleej Heìue Keesuee~

MeeKee ³egeqkeÌlekeÀjCe GHee³e kesÀ ªHe ceW yeQkeÀ ves 8 neefve GþevesJeeueer MeeKeeSb yebo keÀeR ³ee

mebefJeue³eerve keÀer nQ~ ³es MeeKeeSb nQ, mee³eve neGefmebie SC[ Heme&veue HeÀeFvewvme MeeKee,

ceguueekeÀue MeeKee, ceeefve³eeoen MeeKee, keÀesuekeÀelee Hetbpeer yeepeej MeeKee, cegbyeF& os³e

[^eHeÌì MeeKee, efuecyeer MeeKee, efHeHeueemeesHee MeeKee Deewj Hew[u³ee MeeKee~


29

RBI has announced a liberalised policy of Branch Authorisation in

September 2005. Banks have been given more autonomy to shift, merge

and close branches without referring to RBI. Banks also have been

authorized to freely convert specialised branches into general banking

branches and extension counters into full-fledged branches. Taking

advantage of this policy we propose to have a close look at our un-

remunerative branches and shift them to alternate sites where their

contribution to Bank’s profit will be enhanced. Similarly specialised

branches will be converted into general banking branches wherever they

are found to have outlived their purpose. The extension counters showing

good performance and those which have locational advantage will be

converted into full-fledged branches to increase our branch network during

the year.

Marketing & Publicity

The Bank has carved out a marketing set up across the country to meet the

challenges of the present day scenario . At the corporate level, an independent

Marketing Department has been set up to focus on image building, strong

visibility and campaigning of the products. During the year under review,

advertisements were released through various channels of media to give

discernible boost to Bank’s visibility in Metros as well as interior India.

Bank’s over 1000 ‘feet on street’ marketing personnel are continuously

trained in marketing skills apart from product knowledge. Marketing of

Bank’s products is taken up as a thrust area particularly in respect of retail

credit, low cost deposits, credit cards and third party products. Bank has

clearly defined Personal Banking teams for retail banking products and

Business Banking teams for SME products to ensure focussed penetration.

The histroric happening of our centenary year was suitably publicised

across various media and a symbolic and dynamic logo was designed. A

systematic and concerted campaign was carried out to highlight the Bank’s

strides in areas such as Core Banking, Anytime Anywhere Banking, global

and instant national remittances, crossing the landmark Rs.1,50,000 crore

business mix and its pioneering initiative in taking technology to rural/

Yeejleer³e efjpeJe& yeQkeÀ ves efmelebyej 2005 ceW MeeKee mJe®eueve keÀer Goej veerefle Ieesef<ele keÀer nw~

yeQkeÀeW keÀes Yeejleer³e efj]peJe& yeQkeÀ keÀes meboYe& efkeÀS yeiewj MeeKeeDeeW keÀe mLeeve yeoueves,

efJeue³eve keÀjves Deewj yebo keÀjves kesÀ efueS Deewj DeefOekeÀ mJee³eÊelee oer ie³eer nw~ yeQkeÀeW keÀes

efJeMes<eerke=Àle MeeKeeDeeW keÀes, GvcegkeÌle ªHe mes, meeceev³e yewefkebÀie MeeKeeDeeW SJeb efJemleej

HeìueeW keÀes HetCe& MeeKee ceW leyoerue keÀjves kesÀ efueS Yeer DeefOeke=Àle efkeÀ³ee ie³ee nw~ Fme veerefle

keÀe ueeYe uesles ngS nce nceejer DeueeYeÒeo MeeKeeDeeW Hej iebYeerjlee mes efJe®eej keÀjves SJeb Gvnbs

Ssmes JewkeÀefuHekeÀ mLeeveeW Hej ues peeves keÀe ÒemleeJe keÀjles nw peneB yeQkeÀ kesÀ ueeYe ceW GvekeÀer

Yeeieeroejer yeæ{ mekesÀ~ Fmeer lejn efJeMes<eerke=Àle MeeKeeDeeW keÀes Yeer meeceev³e yeQefkebÀie MeeKeeDeeW

ceW leyoerue efkeÀ³ee peeSiee peneB Deye Jen DeHeves Òe³eespeve keÀes Hetje keÀjves ceW DecemeLe& nes ie³eer

neW~ De®íe keÀe³e& efve<Heeove keÀjves Jeeues efJemleej HeìueeW SJeb Gve efJemleej HeìueeW efpevekeÀes

DeJeefmLeefle keÀe ueeYe ÒeeHle nw, keÀes Je<e& kesÀ oewjeve MeeKeeDeeW kesÀ vesìJeke&À keÀes yeæ{eves keÀer ¢ef<ì

mes HetCe& MeeKeeDeeW kesÀ ªHe ceW leyoerue efkeÀ³ee peeSiee~

efJeHeCeve Deewj Òe®eej

yeQkeÀ ves Jele&ceeve Heefj¢M³e keÀer ®egveewefle³eeW keÀe cegkeÀeyeuee keÀjves kesÀ efueS mebHetCe& osMe ceW

efJeHeCeve efJeYeeie keÀer mLeeHevee keÀer nw~ keÀeHeexjsì mlej Hej íefJe efvecee&Ce, cepeyetle Heefj¢M³e

Deewj GlHeeoeW kesÀ DeefYe³eeve Hej HeÀeskeÀme keÀjves kesÀ efueS mJeleb$e efJeHeCeve efJeYeeie keÀer mLeeHevee

keÀer ie³eer nw~ meceer#eeOeerve Je<e& kesÀ oewjeve ceeref[³ee kesÀ efJeefYevve ®ewveueeW kesÀ ceeO³ece mes

ceneveiejeW SJeb Deboªveer Yeejle ceW yeQkeÀ keÀer Heefj¢M³elee keÀes ¢ef<ìiees®ej keÀjves kesÀ efueS

efJe%eeHeve peejer efkeÀS ieS~ yeQkeÀ kesÀ 1000 mes DeefOekeÀ efJeHeCeve keÀeefce&keÀeW keÀes GlHeeo kesÀ %eeve

kesÀ DeueeJee efJeHeCeve keÀewMeue ceW efve³eefcele ªHe mes ÒeefMeef#ele efkeÀ³ee peelee jne nw~ yeQkeÀ kesÀ

GlHeeoeW kesÀ efJeHeCeve keÀes efJeMes<e ªHe mes Kegoje $eÝCe, efvecveueeiele keÀer peceejeefMe³eeW, ¬esÀef[ì

keÀe[eX Deewj Dev³e He#e kesÀ GlHeeoeW keÀes cenlJe Jeeues #es$e kesÀ ªHe ceW efue³ee peelee nw~ yeQkeÀ

ves mebkesÀefvêle ÒeYeeJe megefveeqM®ele keÀjves nsleg Kegoje yeQefkebÀie GlHeeoeW kesÀ efueS Jew³eeqkeÌlekeÀ

yeQefkebÀie ìerce Deewj SmeSceF& GlHeeoeW kesÀ efueS keÀejesyeej yeQefkebÀie ìerce mHe<ì ©He mes HeefjYeeef<ele

keÀer nw~ nceejs Meleeyoer Je<e& ceveeves keÀer SsefleneefmekeÀ Ieìvee keÀes efJeefYeVe ceeref[³ee Üeje

GHe³egkeÌle ªHe ceW ÒekeÀeefMele efkeÀ³ee ie³ee Deewj SkeÀ ÒeleerkeÀelcekeÀ SJeb MeeqkeÌlemecHeVe MeyomebkesÀle

([e³evee@efcekeÀ ueesiees) lew³eej efkeÀ³ee ie³ee~ yeQkeÀ keÀer keÀesj yeQefkebÀie, keÀYeer Yeer keÀneR Yeer

yeQefkebÀie, YeewieesefuekeÀ Deewj lelkeÀeue je<ì^er³e OeveÒes<eCeeW, 1,50,000 keÀjesæ[ ªHe³es kesÀ GuuesKeveer³e

efceefÞele keÀejesyeej keÀes Heej keÀjves Deewj leefceuevee[g kesÀ efMeJeiebiee ceW ceesyeeFue SìerSce kesÀ

meeLe MeeKee KeesuekeÀj ûeeceerCe DeOe&Menjer #es$e ceW lekeÀveerkeÀer keÀes ues peeves keÀer FmekeÀer

The bank has 119 specialised branches catering to the specific financialneeds of certain categories in the domestic market. Details are as under:

31.03.2005 31.03.2006

1 SME Branches 32 32

2 Overseas Branches 7 7

3 Corporate Banking Branches 9 9

4 N.R.I. Branches 6 6

5 Capital Market Branches 3 2

6 Agricultural Hi-Tech Finance Branches 4 4

7 Recovery Branches 12 13

8 Commercial & Personal Banking Brs. 35 35

9 Treasury Branch 1 1

10 Housing & Personal Finance Brs. 9 911 Government Business Branch — 1

TOTAL 118 119

mJeosMeer yeepeej ceW kegÀí efveeqM®ele ÒeJeie& keÀer efJeefMe<ì efJeÊeer³e DeeJeM³ekeÀleeDeeW keÀes Hetje

keÀjves kesÀ efueS yeQkeÀ keÀer 119 efJeefMe<ìerke=Àle MeeKeeSb nQ~ FvekeÀe y³eewje Fme ÒekeÀej nw ë

31.03.2005 31.03.2006

1 SmeSceF& MeeKeeSb 32 32

2 DeesJejmeerpe MeeKeeSb 7 7

3 keÀeHeexjsì yeQefkebÀie MeeKeeSb 9 9

4 SveDeejDeeF& MeeKeeSb 6 6

5 kesÀefHeìue ceekexÀì MeeKeeSb 3 2

6 ke=Àef<e G®®e lekeÀveerkeÀ efJeÊe MeeKeeSb 4 4

7 Jemetueer MeeKeeSb 12 13

8 JeeefCeeqp³ekeÀ SJeb Jew³eeqkeÌlekeÀ yeQefkebÀie MeeKeeSb 35 35

9 keÀes<eeieej MeeKee 1 1

10 ie=n efvecee&Ce SJeb Jew³eeqkeÌlekeÀ efJeÊe MeeKeeSb 9 9

11 mejkeÀejer keÀejesyeej MeeKee - 1

kegÀue 118 119


30

semi urban areas by opening a branch with a Mobile ATM at Sivaganga in

Tamilnadu.

INFORMATION TECHNOLOGY

Branch Automation

As on March 2006, all branches have been computerized, with 555 Brancheson CBS mode, 1979 Branches on TBM mode and 88 Branches on AELPMmode.

Branch Networking

Leveraging on technology, over 1200 branches in more than 300 centreshave been networked through Core Banking Solution (CBS) or MultiBranch Banking (MBB) software so that customers can avail of anywhereanytime banking facility. Other high tech facilities of telebanking, internetbanking and SMS banking are also made available in all these branches.

Internet Banking

Internet Banking has been introduced in all 1200 networked Brancheswith features like viewing statement of accounts, enquiring status ofcheques, request for cheque book, transfer of funds between designatedaccounts, etc.

Automated Teller Machines

As on 31.03.2006, 314 ATMs (both on-site & off-site) are presently inoperation. The Bank is sharing its ATMs with 11 other Banks under thenetwork name ‘Cash Tree’. The Bank is also the Settlement and Nodal Bankfor Cash Tree ATMs. Besides, the Bank has formed a new network of ATMscalled BANCS. 13 banks have joined this network including PSBs / Private& Co-operative banks. The Bank is Settlement and Nodal Bank for thisnetwork too. At present the bank’s customers have access to about 16000ATMs across the country through shared ATM network. Bilateral agreementsare being worked out for sharing the ATMs with State Bank of India.

Other IT initiatives

BOI Star e-Pay

Bank has started a new utility payment

service called ‘BOI Star e-pay’.

Under this service, customers can

register for select utility services like

payment of telephone bills, electricity

bills, cell-phone bills, credit card bills,

insurance premia and certain other

service providers for periodic

payments through automatic or on-

line payments. Presently this service

covers 18 cities viz. Mumbai, Pune,

Hyderabad, Kolkata, New Delhi, Bangalore, Chennai, Surat, Ahmedabad,

Kolhapur, Goa, Indore, Bhopal, Chandigarh, Coimbatore, Jaipur, Lucknow

and Nagpur. The Bank also activated the ‘direct pay’ mode for making

payments through Biller’s website.

Core Banking Solution

555 Branches are already migrated to CBS mode as on 31.03.2006. The

CBS will be extended to a total of 900 branches, by December 2006.

Deûeieeceer Henue keÀes efJeefMe<ìlee Òeoeve keÀjves kesÀ efueS ÒeCeeueerye× Deewj þesme lejerkesÀ mes

DeefYe³eeve ®euee³ee ie³ee~

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oesveeW efceueekeÀj) Heefj®eeueve ceW nQ~ yeQkeÀ kewÀMeì^er veece kesÀ lenle 11 Dev³e yeQkeÀeW kesÀ meeLe

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Deewj vees[ue yeQkeÀ nw~ Jele&ceeve ceW yeQkeÀeW kesÀ ûeenkeÀeW keÀer mecet®es osMe ceW ueieYeie 16000

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jner nQ~

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yeQkeÀ ves ``yeerDeesDeeF& mìej-F-Hes'' veece mes

veF& GHe³eesefielee Yegieleeve mesJee DeejbYe keÀer nw~

Fme mesJee kesÀ Devleie&le ûeenkeÀ kegÀí ®egefveboe

GHe³eesefielee mesJeeDeeW ³eLee ìsueerHeÀesve efyeueeW,

efyepeueer efyeueeW, mesue-HeÀesve efyeueeW, ¬esÀef[ì

keÀe[& efyeueeW kesÀ Yegieleeve Deewj kegÀí Dev³e

mesJeeÒeoeleeDeeW keÀes mJe®eeefuele DeLeJee Dee@ve

ueeF&ve YegieleeveeW kesÀ ceeO³ece mes DeeJeefOekeÀ

Yegieleeve keÀjves kesÀ efueS Hebpeerke=Àle keÀj mekeÀleer

nQ~ Jele&ceeve ceW ³en mesJee 18 MenjeW ceW GHeueyOe nw ³eLee cegbyeF&, HegCes, nwojeyeeo, keÀesuekeÀelee,

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ceeO³ece mes YegieleeveeW kesÀ efueS ``meerOes Yegieleeve'' cees[ keÀes Yeer meef¬eÀ³e efkeÀ³ee~

keÀesj yeQefkebÀie mee@u³egMeve

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meeryeerSme keÀes efomebyej, 2006 lekeÀ kegÀue 900 MeeKeeDeeW ceW efJemleeefjle efkeÀ³ee peeSiee~


31

Wireless connectivity

Wireless connectivity has been introduced for Extension Counters at Patna,

Hyderabad, Chennai, Ranchi, Ghaziabad, Nagpur and Bangalore Zones.

Star Insta Remit

The bank introduced Star Insta Remit which is a RTGS enabled remittance

product. This is used for remittance of funds arising out of inter bank or

customer transactions utilizing the RBI initiatives of Real Time Gross

Settlement (RTGS) / Structured Financial Messaging System (SFMS).

OLTAS

Bank enabled 515 branches effecting On-Line Tax Payments pertaining to

Direct Tax collection under On-Line Tax Accounting System (OLTAS).

RTGS

555 branches of the Bank have been RTGS enabled. The turnover is over

Rs.1500 crore per day. All the CBS branches of the bank are RTGS

enabled.

Arrangement with Directorate General of Foreign Trade (DGFT)

Online filing of applications for importers and exporters with DGFT has

been enabled.

Tie up with Western Union

This service has been launched for facilitating Rupee Remittances from

NRIs to India.

Star e-remit

A remittance product facilitating faster NRI remittance from our Branches

abroad like Singapore, London, Tokyo, etc.is put in place.

EFT (Electronic Funds Transfer) has been enabled in all the 15 specified

centers, wherever RBI manages the Clearing House.

Business Process Re-engineering

The Bank has undertaken Business Process Re-engineering in consultancy

with M/s Boston Consulting Group in view of the changed technological

and market environment and to stay competitive, to identify niche market

segments for focused growth and increased profitability, and to remove

the redundancies in the system. The current phase of BPR is over and the

Bank is rolling out various initiatives.

Bank has gained proficiency in Product Profitability Studies and accordingly

some of the plain vanilla products have been redesigned with various tiers.

More profitable tiers have higher levels of service enhancement/and other

complimentary features. This will ensure that the Bank retains and attracts

high end discerning customers by ensuring highest quality service standards

to them. As part of this study the Bank has also moved on to a more

elaborate and accurate Matched Funds Transfer Price Mechanism

technique. This will enable the Top Management to make strategic business

decisions based on more accurate empirical data. The Product Profitability

Study has been institutionalized in the Bank and the MIS is helping the

Management to revisit the strategies on an ongoing basis.

As part of Customer Focus, the Bank has already launched over 1000

strong ‘feet on street’ sales force to get more customers and service them.

The sales force is specific and is divided into Personal Banking sales force

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keÀjlee nw, ceW F&SHeÀìer keÀes meceLe& yevee³ee ie³ee nw~

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32

and Business Banking sales force to give them more focus and to service

the customers efficiently. Sales force is backed by Relationship Managers

for high-end customers at the branches.

The Organization has been restructured into Strategic Business Units

(SBUs) for better business focus and to make it more nimble footed. To

sharpen the focus on SME segment and to reduce turn around time, SME

cells have been established based on cluster approach and backed by sales

force. Large Corporate branches are being established to service the specific

needs of large corporates. The division has the backing of Relationship

Managers and Product Managers. Retail division looks after the burgeoning

demand for personal loans in the economy. Retail Hubs supported by

sales force have been established under this division for faster sanctions.

Based on sound principles of Corporate Governance the three arms of

Organization, viz. Business, Support and Control have been segregated

and now function at an arms length with one another.

The various Processes in the Bank have been reengineered in view of the

core banking solution being implemented across the Bank. The Back Office

processes are being centralized at a remote location to attain economies of

scale, reduce white spaces and increase productivity through specialization.

This will also help branches to free resources for crucial customer related

activities. We have already centralized, Inward Clearing, Outward Clearing,

Account Opening, Pension Processing and Cheque book issuance at few

centres. The results are encouraging and the learnings will help us in

hastening the tasks. We are now stepping up the pace of centralization at

all major centers. The aim of the exercise is to rejuvenate the processes by

making full use of technology for improving customer service, reduction

in branch load and reducing transaction cost.

HUMAN RESOURCES DEVELOPMENT

Bank has continued to lay great emphasis on Human Resources

Development, to make its employees attain high standards in efficiency

and productivity. A number of initiatives have been undertaken by the

bank for changing the mindset of the employees, constantly upgrading

their knowledge to ensure significant improvements in their performance

and to motivate / recognize / reward them suitably. In that direction the

focus of HR Policy of the Bank has been to facilitate knowledge

management, skill enhancement, motivational strategies and cultural change

to equip staff members for the ever changing competitive environment.

Accordingly, the training system and infrastructure has been revamped

and dovetailed to the business plan, branch expansion, technology plan

and business environment. During the year various in-house training

programmes aimed at upgrading the knowledge and skill levels of

employees were conducted at Bank’s training colleges. A number of short

duration capsule workshops were introduced, on locational basis towards

achieving this objective.

Bank has initiated necessary steps to make all the employees computer-

literate by nominating them to various computer training programmes. For

the smooth migration of our Branches to Core Banking Solution (CBS)

numerous programmes like Roll-over Training and End User’s Training

were conducted for the staff members. Total numbers of staff members

trained for CBS are 4228.

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efueS Òeef¬eÀ³eeDeeW keÀes ve³ee ªHe osvee nw~

ceeveJe mebmeeOeve efJekeÀeme

yeQkeÀ ves DeHeves keÀce&®eeefj³eeW ceW o#elee Deewj ueeYeÒeolee kesÀ Tb®es ceevekeÀeW keÀes ÒeeHle keÀjves kesÀ

efueS ceeveJe mebmeeOeve efJekeÀeme Hej yengle DeefOekeÀ peesj osvee peejer jKee nw~ keÀce&®eeefj³eeW keÀer

ceeveefmekeÀlee ceW HeefjJele&ve ueeves kesÀ efueS, GvekesÀ keÀe³e&efve<Heeove ceW cenlJeHetCe& megOeej ueeves kesÀ

efueS, GvekesÀ %eeve ceW efve³eefcele ªHe mes Je=ef× keÀjves kesÀ efueS Deewj GvekeÀes Òesefjle keÀjves/

ceev³elee osves/ Gef®ele mLeeve osves kesÀ efueS yeQkeÀ ves DeveskeÀ Henue keÀer nQ~ Fme efoMee ceW yeQkeÀ keÀer

ceeveJe mebmeeOeve veerefle keÀe mebkebsÀêCe efvejblej yeoueles ÒeeflemHeOeea JeeleeJejCe mes mìeHeÀ meom³eeW

keÀes lew³eej jKeves kesÀ efueS %eeve ÒeyebOeve, efveHegCelee ceW Je=ef×, DeefYeÒesjCe jCeveerefle³eeW Deewj

meebmke=ÀeflekeÀ HeefjJele&ve ceW megefJeOee GHeueyOe keÀjevee jne nw~

leodvegmeej ÒeefMe#eCe ÒeCeeueer Deewj FvÖeÀemìkeÀ®ej ceW yeoueeJe efkeÀ³ee ie³ee nw Deewj keÀejesyeej

³eespevee, MeeKee efJemleej, lekeÀveerkeÀer ³eespevee Deewj keÀejesyeej JeeleeJejCe kesÀ meeLe GmekeÀe

meecebpem³e efkeÀ³ee ie³ee nw~ Je<e& kesÀ oewjeve keÀce&®eeefj³eeW kesÀ %eeve Deewj efveHegCelee kesÀ mlej ceW

Je=ef× keÀjves kesÀ efueS efJeefYeVe DeebleefjkeÀ ÒeefMe#eCe keÀe³e&¬eÀce ³ee yeQkeÀ kesÀ efJeefYeVe ÒeefMe#eCe

ceneefJeÐeeue³eesb ceW efJeefYeVe DeebleefjkeÀ ÒeefMe#eCe keÀe³e&¬eÀce Dee³eesefpele efkeÀS ieS~ Fme

Òe³eespeve keÀes ÒeeHle keÀjves kesÀ GÎsM³e mes mLeeveer³elee kesÀ DeeOeej Hej DeveskeÀ DeuHeDeJeefOe keÀer

kesÀHmetue keÀe³e&MeeueeSb Dee³eesefpele keÀer ie³eeR~

yeQkeÀ ves efJeefYeVe keÀcH³etìj ÒeefMe#eCe keÀe³e&¬eÀceeW ceW keÀce&®eeefj³eesb keÀes veeefcele keÀj GvekeÀes

keÀcH³etìj efMeef#ele yeveeves keÀer ¢ef<ì mes DeeJeM³ekeÀ keÀoce GþeS nQ~ keÀesj yewefkebÀie meeu³egMeve

ceW MeeKeeDeeW kesÀ Deemeeveer mes ÒeJemeve kesÀ efueS mìeHeÀ meom³eeW kesÀ efueS DeveskeÀeveskeÀ keÀe³e&¬eÀce

³eLee DeeJeleea/Hegveefve&OeejCeer³e ÒeefMe#eCe Deewj JeemleefJekeÀ GHe³eeskeÌlee keÀe³e&¬eÀce Dee³eesefpele

efkeÀS ieS~ kegÀue efceueekeÀj 4228 keÀce&®eeefj³eeW keÀes meeryeerSme ceW ÒeefMeef#ele efkeÀ³ee ie³ee~

FmekesÀ DeefleefjkeÌle, kegÀí efJeK³eele mebmLeeveeW ³eLee SSmemeerDeeF&, nwojeyeeo Deewj yeQkeÀme&


33

Besides, a few specially designed in-company training programmes were

arranged at institutions of repute like ASCI, Hyderabad and Bankers

Training College, Mumbai. In all, 24853 employees were imparted training

at bank’s own colleges, 8902 were recipients of locational learning in

capsule workshops and another 529 had the benefit of attending the

programmes conducted by outside institutions. Besides, 4 officers were

deputed abroad for seminars and workshops. Bank had expended

Rs.470.43 lakh towards training activities during the year.

As motivation is an integral part of human resources development, as part

of its Centenary Year Celebrations bank suitably recognised the outstandingperformance of a number of staff members. Bank has also put in place anincentive scheme to recognize significant individual and team-efforts inachieving the bank’s business goals. Numerous staff members wererecognized for their outstanding performance under this scheme. Apartfrom enthusing the achievers under the scheme, this initiative is expectedto have beneficial demonstrative effect on others in enhancing their

competencies.

To encourage staff members to enrich their knowledge base, the Bank hasintroduced incentives to encourage participation in management courses,computer courses, various diploma examinations conducted by the IndianInstitute of Bankers, programmes for learning foreign languages, NationalCertification in Financial Market Examination (Depository ParticipantModule and AMFI Mutual Fund Module), Diploma in Training &Development, Certified Information Systems Auditor Examination (CISA)and Post Graduate Diploma in Securities Law.

Bank’s house journal ‘Taarangan’ was awarded 2nd Prize in ‘BilingualPublication’, by the Association of Business Communicators of India,Mumbai. It also received the Certificate of Merit from the Public Relations

Society of India, Hyderabad Chapter.

With the advent of technology, organisations all over the world are

undergoing a startling transformation in all important aspects of functioning.

A major initiative taken by the bank during the year is to make the entire

HR tech-savvy and technology-driven.

Compliance with Reservation Policy

The Bank is complying with the reservation policy of the Government of

India. Special Recruitment and SC/ST Cells at Head Office / Zonal Officesare functioning to monitor the implementation of the reservation policyand redressal of grievances relating to SC/ST/OBC Employees.

Pre-Recruitment Training and Pre-Promotion Training from clerical cadreto General Banking Officers cadre and from Scale - I to Scale - II promotionsare imparted to SC/ST candidates / staff. Details of such pre-promotion

trainings imparted to SC/ST employees during the year, 2005-06 are as

under :

ÒeefMe#eCe ceneefJeÐeeue³e, cegbyeF& ceW kegÀí efJeefMe<ì ªHe mes lew³eej efkeÀS ieS DeebleefjkeÀ kebÀHeveer

ÒeefMe#eCe keÀe³e&¬eÀce Dee³eesefpele efkeÀS ieS~ kegÀue efceueekeÀj, yeQkeÀ kesÀ mJe³eb kesÀ ÒeefMe#eCe

ceneefJeÐeeue³eeW ceW 24853 keÀce&®eeefj³eeW keÀes ÒeefMe#eCe Òeoeve efkeÀ³ee ie³ee~ 8902 keÀce&®eeefj³eeW

keÀes mLeeefvekeÀlee kesÀ DeeOeej Hej kesÀHmegue keÀe³e&¬eÀceeW ceW ÒeefMeef#ele efkeÀ³ee ie³ee Deewj Dev³e

529 ves yeenjer mebmLeeveeW Üeje Dee³eesefpele keÀe³e&¬eÀceeW ceW Yeeie efue³ee~ FmekesÀ DeefleefjkeÌle

4 DeefOekeÀeefj³eeW keÀes mesefceveejeW Deewj keÀe³e&MeeueeDeeW ceW Yeeie uesves kesÀ efueS Òeefleefve³egkeÌle

efkeÀ³ee ie³ee~ yeQkeÀ ves Je<e& kesÀ oewjeve ÒeefMe#eCe keÀe³e&¬eÀceeW Hej 470.43 ueeKe ©He³es J³e³e

efkeÀS~

®etbefkeÀ DeefYeÒesjCe ceeveJe mebmeeOeve efJekeÀeme keÀe SkeÀ DeefYevve Debie nw~ yeQkeÀ ves DeHeves Meleeyoer

Je<e& kesÀ SkeÀ Yeeie kesÀ ªHe ceW DeveskeÀ mìeHeÀ meom³eeW kesÀ Glke=À<ì keÀe³e&efve<Heeove keÀes ³eLee³eesi³e

ªHe mes ceev³elee oer~ yeQkeÀ ves J³eeqkeÌle efJeMes<e kesÀ GuuesKeveer³e keÀe³eeX SJeb yeQkeÀ kesÀ keÀejesyeejer

ue#³eeW keÀer ÒeeeqHle nsleg efkeÀS ieS ìerce Òe³eemeeW keÀes ceev³elee osves keÀer ¢ef<ì mes Òeeslmeenve

³eespevee Yeer DeejbYe keÀer nw~ DeveskeÀeveskeÀ mìeHeÀ meom³eeW keÀes Fme ³eespevee kesÀ Devleie&le GvekesÀ

GuuesKeveer³e keÀe³e&efve<Heeove kesÀ efueS ceev³elee oer ie³eer~ Fme ³eespevee kesÀ Devleie&le ceev³eleeÒeeHleeW

keÀes Glmeeefnle keÀjves kesÀ DeefleefjkeÌle Fme Henue keÀe Dev³e ueesieeW Hej Yeer GvekeÀer me#ecelee keÀes

yeæ{eves ceW mebkesÀleelcekeÀ ÒeYeeJe Heæ[ves keÀer iegbpeeFMe nw~

mìeHeÀ meom³eeW keÀes GvekesÀ %eeve DeeOeej ceW DeefYeJe=ef× keÀjves kesÀ efueS Òeeslmeeefnle keÀjves keÀer

o=ef<ì mes yeQkeÀ ves ÒeyebOeve keÀesmeex, keÀcH³etìj keÀesmeex, Yeejleer³e yeQkeÀj mebmLeeve Üeje Dee³eesefpele

efJeefYeVe ef[Hueescee Hejer#eeDeeW, efJeosMeer Yee<eeDeeW keÀes meerKeves kesÀ efueS keÀe³e&¬eÀceeW, efJeÊeer³e

yeepeej Hejer#ee (efve#esHeeieej menYeeieer cees[îetue Deewj SSceSHeÀDeeF& c³eg®³egDeue HebÀ[ cee[îetue)

ceW je<ì^er³e ÒeceeCeve, ÒeefMe#eCe SJeb efJekeÀeme ceW ef[Hueescee, ÒeceeefCele met®evee ÒeCeeueer uesKee

Hejer#ekeÀ Hejer#ee Deewj ÒeefleYetefle efJeefOe (keÀevetve) ceW Heer.peer.ef[Hueescee ceW menYeeefielee keÀes

Òeeslmeeefnle keÀjves kesÀ efueS Òeeslmeenve ³eespevee DeejbYe keÀer nw~

yeQkeÀ keÀer ie=nHeef$ekeÀe ``leejebieCe'' keÀes efÜ-Yeeef<ekeÀ ÒekeÀeMeveeW keÀer ÞesCeer ceW Yeejleer³e keÀejesyeej

mecÒes<ekeÀ mebIe, cegbyeF& keÀer Deesj mes efÜleer³e HegjmkeÀej mes veJeepee ie³ee~ Fmes Yeejleer³e pevemebHeke&À

meesmee³eìer, nwojeyeeo ®esHìj keÀer Deesj mes Yeer Þes<þlee ÒeceeCeHe$e ÒeeHle ngDee~

lekeÀveerkeÀer kesÀ Deeieceve mes efJeMJeYej kesÀ meYeer mebieþve keÀe³e&keÀueeHeeW kesÀ meYeer cenlJeHetCe&

HenuegDeeW ceW ®eeQkeÀevesJeeues ªHeevlejCe mes iegpej jns nQ~ yeQkeÀ Üeje Je<e& kesÀ oewjeve keÀer ie³eer

SkeÀ cenlJeHetCe& Henue mebHetCe& ceeveJe mebmeeOeve keÀes ìskeÀ-mesJeer Deewj lekeÀveerkeÀer ®eeefuele yeveeves

kesÀ ªHe ceW jner nw~

Deej#eCe veerefle keÀe DevegHeeueveyeQkeÀ Yeejle mejkeÀej keÀer Deej#eCe veerefle keÀe DevegHeeueve keÀj jne nw~ ÒeOeeve keÀe³ee&ue³e/

Deeb®eefuekeÀ keÀe³ee&ue³eeW ceW efJeMes<e efve³eespeve Deewj Devegmetef®ele peeefle/pevepeeefle keÀ#e Devegmetef®ele

peeefle/pevepeeefle/Dev³e efHeíæ[s Jeie& kesÀ keÀce&®eeefj³eeW mes mebyebefOele Deej#eCe veerefle kesÀ keÀe³ee&vJe³eve

kesÀ DevegÒeJele&ve Deewj efMekeÀe³eleeW kesÀ efveHeìeve keÀe keÀe³e& osKe jns nQ~

Devegmetef®ele peeefle/pevepeeefle kesÀ DeY³eefLe&³eeW/mìeHeÀ meom³eeW keÀes efueefHekeÀ Jeie& mes meeceev³e

yeQefkebÀie DeefOekeÀejer mebJeie& Deewj Jesleveceeve I mes II ceW HeoesVeefle mes mebyebefOele efve³eespeve HetJe&

ÒeefMe#eCe Deewj HeoesVeefle HetJe& ÒeefMe#eCe Òeoeve efkeÀ³ee peelee nw~ Je<e& 2005-06 kesÀ oewjeve

Devegmetef®ele peeefle/pevepeeefle kesÀ keÀce&®eeefj³eeW keÀes HeoesVeefle HetJe& efoS ieS Fme lejn kesÀ

ÒeefMe#eCeeW keÀe y³eewje efvecveevegmeej nw ë

1. Officers 7 6 days 177 89Staff

2. Clerical 19 6 days 1227 420Staff

3. SubordinateStaff 37 6 Days 935 284

No. of programmes

Conducted

Duration of

Programme

No. of Employees

SC ST

¬eÀ.meb. mebJeie& Dee³eesefpele keÀe³e&¬eÀceeW keÀer keÀce&®eeefj³eeW keÀer mebK³ee

keÀe³e&¬eÀceeW DeJeefOe

keÀer mebK³ee Depee Depepee

1. DeefOekeÀejer mebJeie& 7 6 efove 177 89

2. efueefHekeÀer³e mebJeie& 19 6 efove 1227 420

3. DeOeervemLe mebJeie& 37 6 efove 935 284

Sr.

No.Cadre


34

The Bank has designated two General Managers as Chief Liaison Officers

for OBCs and SCs/STs respectively at Head Office. Officers belonging to

SC/ST/OBC categories are designated as Liaison Officers / Cell Officers

at Zonal Offices. In terms of Government guidelines, Rosters maintained

at Head Office/ Zonal Offices are inspected annually. SC/ST Cells

established at Head Office and Zonal Offices are also associated with

implementation of reservations in respect of other categories like Ex-

servicemen / Physically Handicapped etc. Category-wise break-up of staff

is as under :

cee®e& meceeeqHle March-end 2005 2006

kegÀue keÀce&®eeefj³eeW keÀer mebK³ee Total No. of Employees 42635 42206

DeefOekeÀejer Officers 12166 13119

efueefHekeÀ Clerks 20879 19620

DeOeervemLe keÀce&®eejer Sub-staff 9590 9467

Yeejleer³e keÀe³ee&ue³eeW ceW In Indian Offices 42220 41808

DeesJejmeerpe keÀe³ee&ue³eeW ceW In Overseas Offices 415 398

ceefnuee keÀce&®eejer Women Employees 6525 6517

kegÀue keÀe % % to Total 15.30 15.44

MeejerefjkeÀ efJekeÀueebie Handicapped 620 636

kegÀue keÀe % % to Total 1.45 1.50

DeefOekeÀejer efueefHekeÀ DeOeervemLe keÀce&®eejer kegÀue

cee®e& meceeeqHle-2006 March-end-2006 Officers Clerks Sub-staff Total

Deveg. peeefle SC 2212 2894 3423 8529

Yeejleer³e keÀe³ee&ue³eeW % to total Staff in Indian Offices 17.11 14.88 36.29 20.40

kesÀ kegÀue mìeHeÀ keÀe %

Deveg. pevepeeefle ST 947 1165 899 3011

Yeejleer³e keÀe³ee&ue³eeW % to total Staff in Indian Offices 7.32 5.99 9.53 7.20

kesÀ kegÀue mìeHeÀ keÀe %

Deesyeermeer OBC 236 544 576 1356

Yeejleer³e keÀe³ee&ue³eeW % to total Staff in Indian Offices 1.83 2.80 6.10 3.24kesÀ kegÀue mìeHeÀ keÀe %

Inspection and Audit

Inspection and Audit is an important tool in the hands of the Management

to ensure that the systems and procedures laid down by the Bank are

implemented in right earnest by all the branches/controlling offices. It also

helps the Management at various levels in evaluating the effectiveness of

the Internal Control Mechanism in the Bank. The audit report is a blue

print to the branch functionaries and controllers for initiation of actions for

correction of systemic deficiencies. Bank is having a well established

Internal Control Mechanism.

The following are some of the highlights of functioning of Inspection &

Audit Department during the year 2005-2006:

� All branches have been audited under Risk Based Internal Audit

system for the 3rd successive year.

� Completion of Internal Audit Plan 2005-06 in time.

yeQkeÀ ves ÒeOeeve keÀe³ee&ue³e ceW oes ceneÒeyebOekeÀeW keÀes ¬eÀceMeë Dev³e efHeíæ[e Jeie& Deewj Devegmetef®ele

peeefle/pevepeeefle mes mebyebefOele keÀce&®eeefj³eeW kesÀ efueS cegK³e mebHeke&À DeefOekeÀejer kesÀ ªHe ceW

Heoveeefcele efkeÀ³ee nw~ Depee/Depepeeefle/Dev³e efHeíæ[e Jeie& kesÀ DeefOekeÀeefj³eeW keÀes Deeb®eefuekeÀ

keÀe³ee&ue³eeW ceW mebHeke&À DeefOekeÀejer / keÀ#e DeefOekeÀejer kesÀ ªHe ceW Heoveeefcele efkeÀ³ee ie³ee nw~

mejkeÀejer efoMeeefveoxMeeW kesÀ DevegªHe ÒeOeeve keÀe³ee&ue³e/Deeb®eefuekeÀ keÀe³ee&ue³eeW ceW jKes ie³es

jesmìjeW keÀe Jeeef<e&keÀ DeeOeej Hej efvejer#eCe efkeÀ³ee peelee nw~ ÒeOeeve keÀe³ee&ue³e/Deeb®eefuekeÀ

keÀe³ee&ue³eeW ceW mLeeefHele Deveg peeefle/pevepeeefle keÀ#e Dev³e ÒeJeieexb ³eLee YetleHetJe& mewefvekeÀeW/

MeejerefjkeÀ ªHe mes efJekeÀueebie J³eeqkeÌle³eeW kesÀ Deej#eCe kesÀ keÀe³ee&vJe³eve mes Yeer mecye× nQ~

mìeHeÀ keÀe ÒeJeie&Jeej y³eewje efvecveevegmeej nw ë

efvejer#eCe Deewj uesKee Hejer#ee

efvejer#eCe SJeb uesKee Hejer#ee ÒeyebOeve kesÀ neLe ceW ³en megefveefM®ele keÀjves kesÀ efueS SkeÀ

cenlJeHetCe& meeOeve nw efkeÀ yeQkeÀ Üeje efveOee&efjle ÒeCeeueer SJeb Òeef¬eÀ³eeDeeW keÀe meYeer MeeKeeDeeW/

efve³eb$eCe keÀe³ee&ue³eeW Üeje mener HeefjÒes#³e cebs keÀe³ee&vJe³eve efkeÀ³ee peelee nw~ Fmemes yeQkeÀ keÀes

yeQkeÀ kesÀ Yeerlej efJeefYeVe mlejeW Hej DeebleefjkeÀ efve³eb$eCe cewkesÀefvepce keÀer ÒeYeeJeMeeruelee kesÀ

cetu³eebkeÀve ceW Yeer ceoo efceueleer nw~ uesKee Hejer#ee efjHeesì& MeeKee, efve³eb$ekeÀ keÀe³ee&ue³eeW ceW

HeomLe HeoeefOekeÀeefj³eeW kesÀ efueS ÒeCeeueer mes pegæ[er keÀefce³eeW kesÀ efvejekeÀjCe kesÀ efueS keÀej&JeeF&

DeejbYe keÀjves kesÀ efueS cenlJeHetCe& ªHejsKee (yuet efÒebì) nw~ yeQkeÀ ceW megmLeeefHele DeebleefjkeÀ

efve³eb$eCe cewkesÀefvepce efJeÐeceeve nw~

� Je<e& 2005-06 kesÀ oewjeve efvejer#eCe SJeb uesKee Hejer#ee efJeYeeie kesÀ Üeje efkeÀS ieS

keÀe³e&keÀueeHeeW ceW mes kegÀí efvecveefueefKele Devegmeej nQ ë

� ueieeleej leermejs Je<e& meYeer MeeKeeDeeW keÀer peesefKece DeeOeeefjle DeebleefjkeÀ uesKee

Hejer#ee ÒeCeeueer kesÀ DeOeerve uesKee Hejer#ee keÀj oer ieF&~


35

� Management Audit of controlling offices was completed as per

schedule.

� 81% of Advances and 67% of Deposits of the Bank were covered

under Concurrent Audit as against the stipulated level of 50% each.

� All the Foreign Branches of the Bank were covered under Concurrent

Audit.

� Internal audit of all the Foreign Branches was completed under the

18 months cycle by deputing India based officers.

� 2022 branches were covered under Revenue Audit.

� Credit Audit of 2191 accounts in 417 branches were undertaken.

� System Audit (Computer Audit) of branches and controlling offices

completed as per schedule.

� Consequent upon bringing more and more branches under CBS (Core

Banking Solution), a well defined Information Systems Audit Policy

has been framed.

� Well defined Audit Policies duly approved by Audit Committee of

Directors and Manual of Instructions are in place for various types

of audit.

� 96% of the branches audited were rated as Satisfactory as a result of

overall improvement in their functioning.

Compliance with Reserve Bank of India Guidelines

Compliance Unit was established at Head Office as per Reserve Bank of

India guidelines in switching over to Risk Based Supervision under Basel

II norms. A General Manager has been designated as Compliance Officer

of the Bank to monitor the implementation of various guidelines being

received from Reserve Bank of India and Government of India. The Unit

is reporting to the Board of Directors on quarterly basis. Systematic

approach is being followed in the process of compliance.

Compliance Unit is also monitoring the submission of various calendar

Review items to the Board and its various Committees as per Reserve

Bank of India guidelines. There was no overdue position for submission

of such Review items as on 31.03.2006.

Vigilance

The Vigilance machinery of the Bank is headed by the Chief Vigilance

Officer of the rank of General Manager and assisted by officers having

knowledge / background of investigation and disciplinary action matters

as well as banking, for professional management of the department.

CUSTOMER SERVICE

The bank is conscious of the fact that the customer is the king and has

taken initiatives to meet the ever escalating expectations of the customers.

The bank is also alive to the emerging competition from new more agile

and tech savvy players and is continuously fine tuning its strategies to

meet the challenges. Various recommendations of the Government, Reserve

Bank of India and Indian Banks’ Association have been implemented by

the Bank. Excellent customer service, which has always been an ingrained

culture with us, is being constantly improved to create customer delight.

� DeebleefjkeÀ uesKee Hejer#ee ³eespevee 2006 keÀe mece³e Hej DevegHeeueve~

� efve³eb$ekeÀ keÀe³ee&ue³eeW keÀer ÒeyebOeve uesKee Hejer#ee efveOee&efjle mece³eeJeefOe ceW HetCe& keÀer ieF&~

� Òel³eskeÀ kesÀ efueS efveOee&efjle 50% mlej kesÀ meeceves yeQkeÀ kesÀ DeefûeceeW kesÀ 81% Yeeie

Deewj peceejeefMe³eeW kesÀ 67% Yeeie keÀes meceJeleea uesKee Hejer#ee kesÀ oe³ejs ceW uee³ee ie³ee~

� yeQkeÀ keÀer meYeer efJeosMeer MeeKeeDeeW keÀes meceJeleea uesKee Hejer#ee kesÀ oe³ejs ceW uee³ee ie³ee~

� Yeejle efmLele DeefOekeÀeefj³eeW keÀes Òeefleefve³egkeÌle keÀjkesÀ meYeer efJeosMeer MeeKeeDeeW keÀer

DeebleefjkeÀ uesKee Hejer#ee 18 cenerveeW kesÀ ®e¬eÀ kesÀ DeOeerve HetCe& keÀj oer ieF&~

� 2022 MeeKeeDeeW keÀes jepemJe uesKee Hejer#ee kesÀ oe³ejs ceW uee³ee ie³ee~

� 417 MeeKeeDeeW kesÀ 2191 KeeleeW ceW $eÝCe uesKee Hejer#ee keÀer ieF&~

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efkeÀ³ee ie³ee~

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Leer~ Yeejleer³e efj]peJe& yeQkeÀ SJeb Yeejle mejkeÀej mes ÒeeHle efJeefYeVe efoMeeefveoxMeeW kesÀ keÀe³ee&vJe³eve

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meleke&Àlee

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mejkeÀej, Yeejleer³e efj]peJe& yeQkeÀ leLee Yeejleer³e yeQkeÀ mebIe keÀer efJeefJeOe efmeHeÀeefjMeeW keÀes

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pegæ[ ie³ee nw Deewj ûeenkeÀeW ceW meblees<e keÀe me=peve keÀjves nsleg nce FmeceW melele megOeej keÀjles Dee

jns nQ~


36

8 a.m. to 8 p.m. Banking

With a view to increasing our customer base and also to extend additional

banking hours to our existing clientele, the bank has introduced 8 a.m. – 8

p.m. banking in 105 branches across the country. It was increasingly felt

that customers feel more comfortable to physically visit the branch and

transact business. This personal touch is of vital importance. The facilities

of cash withdrawal and deposit, cheque deposit, issuance of Demand

Drafts and payslips, updation of pass books etc. are being offered during

the extended hours of business in these branches.

Quality Policy

The Bank has taken steps in order to render speedy, efficient and quality

service to our customers.

The policy, as enumerated by the Bank, centres around our commitment to

become the ‘Bank of Choice’ by providing superior proactive, innovative

state-of-the-art banking services with care and concern for the customers

and patrons.

Adhoc Committee on Procedures and Performance Audit on

Customer Service

The Adhoc Committee in the Bank was set up in January 2004 as directed

by the Reserve Bank of India to support broad-based improvement in

customer service through simplification of the processes and procedures

in relation to various banking services. In terms of RBI instructions, the

Adhoc committee, which was in operation up to March 2005, has been

renamed and restructured into Standing Committee on Customer Service

with broad-based membership of Chairman & Managing Director,

Executive Director, five General Managers and one Assistant General

Manager. Three non official members add value to deliberations of the

committee. During the year, the committee met 3 times to deliberate and

discuss various issues for effecting improvements in customer service.

Know Your Customer (KYC)

Indian Banks’ Association has framed a model policy on the Know Your

Customer norms. Our bank adopted the policy on 24.05.2005. The branches

properly identify the customer either by an introductory reference from an

existing account holder or on the basis of the documents provided by the

customer. Simplified KYC norms for accounts of low income customers

have also been introduced by our bank under RBI instructions.

Anti Money Laundering MeasuresImplementation of Prevention of Money Laundering Act, 2002

Gazette Notification of 01.07.2005 by Government of India

The Prevention of Money Laundering Act,2002 was enacted by the

Parliament to prevent Money Laundering. The Goverment of India in

consultation with the RBI has framed the Prevention of Money Laundering

Rules 2005 regarding Maintenance of Records of nature and value of

transactions, the procedure and manner of maintaining and the time for

furnishing information and verification of records of the identity of the

clients of the Banking companies, Financial Institutions and Intermediaries

for implementation of the said Act.

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nceejs ûeenkeÀ DeeOeej ceW Je=ef× keÀjves SJeb nceejs Jele&ceeve ûeenkeÀeW keÀes DeefleefjkeÌle yeQefkebÀie

mece³e ceW efJemleej keÀj kesÀ mesJee osves nsleg Yeer yeQkeÀ ves osMe Yej ceW 105 MeeKeeDeeW ceW megyen

8.00 yepes mes mee³eb 8.00 yepes lekeÀ yewefkebÀie ueeiet keÀj oer nw~ DeefOekeÀebMeleë ³en cenmetme

efkeÀ³ee peelee Lee efkeÀ ûeenkeÀeW keÀes MeeKee ceW J³eeqkeÌleMeë YeWì keÀjvee Deewj DeHeves J³eJenej

keÀjvee DeefOekeÀ Deemeeve ueielee nw~ ³en J³eeqkeÌleiele ueieeJe ner Del³eeJeM³ekeÀ ªHe mes

cenlJeHetCe& nw~ Fve MeeKeeDeeW ceW efJemleeefjle mece³e kesÀ oewjeve vekeÀo DeenjCe Je pecee, ®eskeÀ

pecee keÀjvee, ceebie [^eHeÌì Deewj Yegieleeve He®eer& peejer keÀjvee, HeemeyegkeÀ DeÐeleve keÀjvee

Fl³eeefo megefJeOeeSb Òeoeve keÀer peeleer nQ~

iegCeJeÊee veerefle

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efkeÀS nQ~

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yeveeves nsleg DeHeves ûeenkeÀeW Deewj mebj#ekeÀeW keÀes Glke=À<ì, J³eJene³e&, veJeesvces<e Del³eeOegefvekeÀ

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ûeenkeÀ mesJee mes mebyebefOele Òeef¬eÀ³ee Deewj keÀe³e& efve<Heeove Hej uesKee Hejer#ee

leoLe& meefceefle

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mejue yeveekeÀj ûeenkeÀ mesJee ceW efJemle=le DeeOeej Hej megOeej kesÀ efueS men³eesie keÀjsieer~

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meom³e meefceefle kesÀ efJe®eej efJeceMe& ceW men³eesie osves kesÀ efueS jnWies~ Je<e& kesÀ oewjeve ûeenkeÀ

mesJee ceW megOeej ueeves kesÀ efueS efJeefYeVe cegÎeW Hej ®e®ee& keÀjves kesÀ efueS meefceefle keÀer leerve yewþkeWÀ

ngF&~

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nw~ nceejs yeQkeÀ ves efoveebkeÀ 24.05.2005 keÀes ³en veerefle DeHeveeF& nw~ MeeKeeSb mecegef®ele ªHe

mes ûeenkeÀeW keÀer Hen®eeve ³ee lees Jele&ceeve KeeleeOeejkeÀ mes Heefj®e³eelcekeÀ meboYe& mes DeLeJee

ûeenkeÀ Üeje efoS ieS omleeJespeesb kesÀ DeeOeej Hej keÀj mekeÀleer nQ~ nceejs yeQkeÀ ves Yeejleer³e

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OeveMeesOeve efveJeejCe nsleg mebmeo Üeje Oeve MeesOeve efveJeejCe DeefOeefve³ece 2002 ueeiet efkeÀ³ee

ie³ee~ Yeejle mejkeÀej ves Yeejleer³e efj]peJe& yeQkeÀ kesÀ HejeceMe& mes keÀefLele DeefOeefve³ece kesÀ

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keÀe³e&efJeefOe Deewj efkeÀme ÒekeÀej efjkeÀe@[& jKevee nw Deewj met®evee keÀer Òemlegefle nsleg mece³eeJeefOe

leLee yeQefkebÀie kebÀHeefve³eeW, efJeÊeer³e mebmLeeveeW Deewj ceO³eJeleea mebmLeeveeW kesÀ ûeenkeÀeW keÀer Hen®eeve

kesÀ efjkeÀe@[& kesÀ mel³eeHeve nsleg Oeve MeesOeve efveJeejCe efve³eceeJeueer 2005 lew³eej keÀer nw~


37

The Act requires banks to appoint principal officer, verify identity of

clients, maintain records and furnish information. We have framed

guidelines for implementing the various provisions of the act. We have

designated General Manager (Operations) as the Principal Officer (MLRO)

for the bank. For submitting the various reports to Financial Intelligence

Unit – India, we have also formed Anti Money Laundering Cell at Head

Office. Necessary Technology initiatives have been taken to comply with

the requirement for implementing the guidelines/rules.

Setting up of Customer Committee of Directors

A Customer Service Committee at Board level was set up, consisting of

the Chairman & Managing Director, the Executive Director and three

Directors, including RBI Nominee Director. This committee is not only

overseeing the work of the Standing Committee on Customer Service but

also suggests innovative measures for enhancing the quality of customer

service and improving the level of customer satisfaction for all categories

of clientele.

Official Language

During the year, Bank’s performance in implementing Official Language

policy was commendable. Bank continued its vigorous efforts to achieve

the various targets set out in Annual Implementation Programme for the

year 2005-06. For effective implementation of Official Language Policy,

Bank has promoted 21 clerical staff as Official Language Officers and

posted them at various zones.

26 Hindi workshops were conducted during the year in which 675 Officers/

Clerks were trained to use Hindi in day to day banking. Hindi stenographers

were imparted training and training was also imparted within the time

frame to those who do not possess working knowledge of Hindi.

Third Sub-committee of Parliamentary Committee on Official Language

reviewed the Bank’s performance while inspecting the Bank’s branches.

The Drafting and Evidence Sub-committee of Parliamentary Committee

on Official Language reviewed performance of Bank’s branches. Officials

from various Regional Implementation Offices of Ministry of Home

Affairs, Official Language Deptt. inspected various branches of the Bank

across the country. Ministry of Finance (Banking Division) carried out a

detailed inspection of the Head Office and appreciated performance of the

Bank in implementing official language policy.

During the year, Bank received various awards for its performance for

implementation of official Language policy. Prominent among them are

first prize and second prize to the Bhubaneshwar Zonal Office and Patna

Zonal Office respectively from Ministry of Home Affairs. SLBC,

Maharashtra awarded consolation prize to the Bank.

During the year, Official Language Department of the bank translated into

Hindi Bank’s SME Policy, Booklet on Retail Banking products, Credit

Monitoring Policy, check list for Core Banking Branches as well as various

publicity materials/documents. Bank also gives wide publicity to its products

in Hindi through print and electronic media.

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ÒeeJeOeeveeW kesÀ keÀe³ee&vJe³eve kesÀ efueS nceves efoMeeefveoxMe lew³eej efkeÀS nQ~ nceves yeQkeÀ kesÀ efueS ÒeOeeve

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efJeÊeer³e met®evee FkeÀeF& - Yeejle keÀes efJeefJeOe efjHeesìeX kesÀ ÒemlegleerkeÀjCe kesÀ efueS nceves ÒeOeeve

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keÀe³ee&vJe³eve kesÀ efueS DeHes#eeDeeW kesÀ Heeueve nsleg DeeJeM³ekeÀ ÒeewÐeesefiekeÀer Henue Yeer keÀer ieF& nw~

yees[& efveosMekeÀeW keÀer ûeenkeÀ meefceefle keÀer mLeeHevee

yees[& mlej Hej ûeenkeÀ mesJee meefceefle mLeeefHele keÀer ieF& Leer efpemeceW yeQkeÀ kesÀ DeO³e#e SJeb ÒeyebOe

efveosMekeÀ, keÀe³e&HeeuekeÀ efveosMekeÀ Deewj Yeejleer³e efj]peJe& yeQkeÀ kesÀ veeefceefle efveosMekeÀ meefnle

leerve efveosMekeÀ meefcceefuele nQ~ ³en meefceefle ve kesÀJeue ûeenkeÀ mesJee Hej mLee³eer meefceefle kesÀ

keÀe³eeX keÀe efvejer#eCe keÀjleer nw yeefukeÀ ûeenkeÀ mesJee keÀer iegCeJeÊee ceW Je=ef× kesÀ efueS veJeesvces<eer

GHee³eeW keÀe megPeeJe osleer nw Deewj meYeer ÞesefCe³eeW kesÀ ûeenkeÀeW kesÀ efueS ûeenkeÀ meblegef<ì kesÀ mlej

ceW megOeej ueeleer nw~

jepeYee<ee

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jne~ Je<e& 2005-06 kesÀ efueS Jeeef<e&keÀ keÀe³ee&vJe³eve keÀe³e&¬eÀce kesÀ efJeefJeOe ue#³eeW keÀes ÒeeHle

keÀjves kesÀ efueS yeQkeÀ ves DeLekeÀ Òe³eeme peejer jKes~ jepeYee<ee veerefle kesÀ ÒeYeeJeer keÀe³ee&vJe³eve

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efnboer DeeMegefueefHekeÀeW keÀes Yeer ÒeefMe#eCe efo³ee ie³ee Deewj efpevnW efnboer keÀe keÀe³e&meeOekeÀ %eeve

veneR nw GvnW Yeer mece³e meercee kesÀ Yeerlej ÒeefMe#eCe efo³ee ie³ee~ jepeYee<ee Hej mebmeoer³e

meefceefle keÀer leermejer GHe meefceefle Üeje MeeKeeDeeW kesÀ efvejer#eCe kesÀ mece³e yeQkeÀ kesÀ keÀe³e&efve<Heeove

keÀer meceer#ee keÀer ieF&~ mebmeoer³e meefceefle keÀer DeeuesKe Deewj mee#³e GHe meefceefle Üeje yeQkeÀ keÀer

MeeKeeDeeW kesÀ keÀe³e&efve<Heeove keÀer meceer#ee keÀer ieF&~ ie=n ceb$eeue³e, jepeYee<ee efJeYeeie kesÀ

efJeefJeOe #es$eer³e keÀe³ee&vJe³eve keÀe³ee&ue³eeW kesÀ DeefOekeÀeefj³eeW Üeje osMe Yej keÀer efJeefYeVe MeeKeeDeeW

keÀe efvejer#eCe efkeÀ³ee ie³ee~ efJeÊe ceb$eeue³e (yeQefkebÀie ÒeYeeie) ves ÒeOeeve keÀe³ee&ue³e keÀe efJemle=le

efvejer#eCe efkeÀ³ee Deewj yeQkeÀ ceW jepeYee<ee veerefle kesÀ keÀe³ee&vJe³eve kesÀ keÀe³e& efve<Heeove keÀer

mejenvee keÀer~

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efpeveceW mes ÒecegKe nQ ie=n ceb$eeue³e Üeje YegJevesMJej Deeb®eefuekeÀ keÀe³ee&ue³e Deewj Heìvee

Deeb®eefuekeÀ keÀe³ee&ue³e keÀes ¬eÀceMeë ÒeLece HegjmkeÀej Je efÜleer³e HegjmkeÀej~ jep³e mlejer³e

yeQkeÀme& meefceefle, ceneje<ì^ Üeje yeQkeÀ keÀes meeblJevee HegjmkeÀej Òeoeve efkeÀ³ee ie³ee~

Je<e& kesÀ oewjeve jepeYee<ee efJeYeeie ves yeQkeÀ keÀer SmeSceF& veerefle, Kegoje yeQefkebÀie GlHeeoeW keÀer

HegefmlekeÀe, $eÝCe efveiejeCeer veerefle, keÀesj yeQefkebÀie meceeOeeve kesÀ efueS peeb®e met®eer Fve kesÀ meeLe-

meeLe keÀF& Òe®eej meeceûeer/omleeJespeeW keÀes efnboer ceW DevegJeeefole efkeÀ³ee~ yeQkeÀ ves efnboer ceW DeHeves

GlHeeoeW keÀe J³eeHekeÀ Òe®eej efÒevì Je FueskeÌì^eefvekeÀ ceeref[³ee ceW efkeÀ³ee~


38

BANK’S SUBSIDIARIES/ASSOCIATES

Regional Rural Banks (RRBs)

The Bank has sponsored 16 Regional Rural Banks which are located in 5

States. These RRBs are operating in 37 districts (with a network of 976

branches , 4 Extension counters and 2 Satellite Branches ) in which our

Bank is entrusted with the Lead Bank responsibility. Besides initial

subscription of Rs. 5.60 crore to their issued capital, the Bank has infused

additional equity of Rs. 54.70 crore towards restructuring of these RRBs.

The Bank is continuing to provide necessary managerial and administrative

support to these RRBs. As at the end of financial year 2005-2006 the total

deposits and advances of these RRBs have grown to Rs.4346 crore and

Rs.2176 crore respectively. 15 out of 16 RRBs have registered profit

during 2005-2006.

BOI Shareholding Ltd.

Bank’s association with the Capital Market spans over a period of more

than seven decades with the clearing and settlement functions of the Stock

Exchange, Mumbai being handled by the Bank. Later on in 1989, Bank set

up BOI Shareholding Ltd. as a joint venture with the Stock Exchange,

Mumbai (BSE) to manage the clearing house activities of BSE. The

company is carrying out the demat rolling settlements on T+2 basis of the

Exchange through the National Securities Depository Services Ltd.

(NSDL) and Central Depository Services (India) Ltd. (CDSL) efficiently

and also the settlement of G-Secs through an integrated computerized

system.

With a view to optimising use of its trained manpower and sophisticated

IT infrastructure, besides handling settlement related work of the Exchange,

the company also extends depository services to member brokers of the

stock exchanges and retail investors. During 2004-05, the company had

commenced new business activity i.e. franking of stamp documents, which

has proved to be highly lucrative and has been contributing significantly to

the revenues of the company. With the corporatisation of Mumbai Stock

Exchange, and its transformation into a corporate entity viz. the Bombay

Stock Exchange Ltd. during the year, the clearing and settlement functions

of BOI Shareholding Ltd. are likely to get transferred to a clearing

corporation in the near future.

BOISL earned a net profit of Rs. 309.25 lakh during 2005-06 as against

Rs.152.13 lakh earned during 2004-05. The company paid an interim

dividend of 15% during FY 2005-06 and a final dividend of 45% taking

total dividend for FY 2005-06 to 60% as against 25% dividend paid

during FY 2004-05.

Indo Zambia Bank Ltd.

Indo Zambia Bank Ltd. (IZB) is a joint venture of three Indian Banks viz.

Bank of India, Bank of Baroda, Central Bank of India and Government of

Zambia. Each of the Indian Banks holds 20% of the share capital, whereas

Government of Zambia holds 40% of the share capital. Indo-Zambia Bank

Ltd. is a fine example of a successful Joint venture. It enjoys the patronage

of two friendly republics, the Government of the Republic of Zambia and

the Government of India.

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mejkeÀej keÀe mebj#eCe efceuee ngDee nw~


39

Securities Trading Corporation of India Ltd. (STCI)

Securities Trading Corporation of India Ltd. (STCI) is one of the leading

Primary Dealers in the country enjoying the highest credit rating of P1+

by CRISIL and A1+ by ICRA for short term debt instruments. The Bank

is the single largest stakeholder of STCI with 29.95% stake in its equity.

The year 2004-05 witnessed a sudden and swift hardening of interest rates

and narrowing down of margins in trading and gilt securities. As such, all

major PDs including STCI incurred losses from operations. For the first

time in its history, the company incurred a loss of Rs. 97 crore during FY

2004-05. With diversification plan and strategies, the company made a

quick turn around and earned a net profit of Rs.24 crore during FY 2005-

06. During the year STCI also successfully bid for acquiring the UTI

Securities Ltd. from the specified undertaking of the Unit Trust of India.

With this acquisition, STCI hopes to mark its presence in the field of

equity trading, portfolio management services, commodity trading,

depository services etc.

Other Strategic Investments

IL&FS Investment Managers Ltd.

Bank is the second largest stakeholder of IL&FS Investment Managers

Ltd. with 14.39% participation in its equity capital. The company earned a

Net Profit of Rs.7.15 crore in FY 2005-06 as against Rs.5.22 crore in FY

2004-05 and declared a dividend of 35 % as against 30% paid in 2004-05.

Central Depository Services (India) Ltd. (CDSL)

Central Depository Services (India) Ltd. was set-up in 1998 as the second

depository in the Country promoted by the Stock Exchange, Mumbai

(BSE). Bank is one of the co-sponsors of CDSL and has an investment of

about 10% in the equity capital of the company. CDSL offers demat

facilities for all kinds of debt instruments, government securities, equity

shares etc.

ASREC (India) Ltd.

The company was floated by the Specified Undertaking of the Unit Trust

of India (SUUTI) to undertake securitisation and asset reconstruction

activities and was granted Certificate of Registration by RBI under the

SARFAESI Act, 2002 in the second half of FY 2004-05. Bank has an

investment of 13.6% in the equity capital of the company and expects to

earn good returns on its investment once full fledged operations commence.

Multi-Commodity Exchange of India Ltd. (MCX)

MCX is a new generation multi-commodity exchange undertaking future

trading in different specified commodities at the national level. The Exchange

commenced operation during FY 2004-05. Bank had acquired a nominal

stake of 2% by way of equity participation in the capital of MCX with a

view to be associated with one of the major commodity exchanges. Bank

also handles clearing bank functions of the Exchange through Bullion

Exchange Branch.

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ngDee nw~

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40

National Collateral Management Services Ltd. (NCMSL)

The Company, promoted by the National Commodity and Derivatives

Exchange Ltd. (NCDEX), a leading multi commodity exchange was

incorporated on 28.09.2004 to promote and provide collateral management

services for securing, managing and controlling securities and commodities.

It offers various services for the development of trades on commodity

exchange such as valuation, grading, insuring, securing, storage,

distribution, clearing and forwarding of securities and commodities etc.

Bank had taken a stake of 10% (Rs.3 crore) in the equity capital of the

Company. Bank has signed MOU with NCMSL.

Credit Information Bureau (India) Ltd. (CIBIL)

CIBIL is the first credit information bureau in the Country, incorporated in

August, 2000 for providing credit information and risk analysis services

to the banking and financial services sectors. The company launched its

consumer bureau operations in FY 2004-05 though its commercial bureau

operations are likely to commence shortly on a full scale. Bank acquired a

stake of 5% in the equity share capital of the company during 2005-06 and

expects to derive synergies through its association with the company.

SME Rating Agency of India Ltd. (SMERA)

SMERA was set-up during FY 2005-06 by SIDBI in association with

Dun & Bradstreet, one of the leading credit rating agencies. SMERA‘s

primary objective is to provide comprehensive, transparent and reliable

ratings which would facilitate greater and easier flow of credit to SME

sector. During the year Bank acquired a nominal stake of 4% in the equity

capital of the company.

Strategic Alliance

National Commodity & Derivatives Exchange Ltd. (NCDEX)

NCDEX is one of the prime commodity exchanges, promoted by the

National Stock Exchange and other FIs and permitted by the Forward

Market Commission to undertake on-line screen based trades in agricultural

and other commodities. Bank had joined NCDEX as a business associate

and is empanelled as a clearing bank through Stock Exchange Branch and

also extends Depository Services to the traders/members of NCDEX under

NSDL and CDSL through its DP offices. Bank expects to leverage the

association for business growth.

SME-SBU : (Small & Medium Enterprises Strategic Business Unit)

As part of implementing Business Process Re-engineering projects, Bank

has created a Strategic Business Unit for the Small and Medium

Enterprises in view of the importance and priority given to this sector by

the Government. In line with the Government’s policy Bank has to double

the advances in SME sector in Five years i.e. by 2009-2010.

In order to achieve the above objective Bank has taken several measures

like signing MOU with SIDBI (Small Industrial Development Bank Of

India) and APSFC (Andhra Pradesh State Finance Corporation) for joint

financing in SME sector, MOU with SMERA (SME Rating Agency) for

rating of SME and Bank has offered concession in rate of interest upto

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41

0.50% to units who obtain desired rating from SMERA. Bank has adopted

SME Policy and a Policy on Debt Restructuring and Rehabilitation of

SME units which are placed in Bank’s website for public information.

During the year under review advances in SME sector increased from

Rs.14525 crore to Rs. 17675 crore registering a growth of 22 %. Under

SSI sector the growth was from Rs.4598 crore to Rs. 5625 crore registering

growth of 22.34 %. Under the tie up arrangement with SIDBI for joint

finance 15 accounts with limit of Rs.27 crore have been financed.

New schemes have been evolved for financing such as Energy Efficiency

Project, Solar Water Heating System and greater impetus has been given

for Star Channel Financing Scheme, Cluster Finance and collateral

free loan upto Rs.25 lakh under CGTSI guarantee scheme besides

promoting advances under KVIC’s scheme under Rural Employment

Generation Programme (REGP), Technology Upgradation Fund Scheme

under Credit Linked Capital Subsidy Scheme (CLCS-TUF and CLCSS)

where capital subsidy of 20% to textile and Jute industries and 15% to

other industries are available. Bank has issued 3471 Artisan Credit Cards

and 4477 Laghu Udyami Trade Card. We have built up exposure under

Channel Financing to the extent of Rs.189.70 crore. Two cluster based

schemes have so far been implemented in the state of Kerala to the tune of

Rs. 42.93 crore in 2797 accounts.

Right to Information Act 2005

Bank in pursuance of the enactment of Right to Information Act 2005

which came into force w.e.f. 12.10.2005 designated the Central Public

Information Officers for Head Office and for all the Zones and also

designated Appellate Authority in order to implement the provisions of

the said Act and has placed the vital information about Bank required

under the Act on Bank’s web site. Bank is complying with the provisions

of the Act within the stipulated time provided under the Act. As on

31.03.2006 Bank has disposed of all the applications and all appeals received

from the parties within the time prescribed under the Act.

DIRECTORS’ RESPONSIBILITIES STATEMENT

The Directors confirm that in the preparation of the annual accounts for theyear ended March 31, 2006.

the applicable accounting standards have been followed along with

proper explanation relating to material departures, if any;

the accounting policies, framed in accordance with the guidelines of

the Reserve Bank of India, were consistently applied;

reasonable and prudent judgement and estimates were made so as to

give a true and fair view of the state of affairs of the Bank at the end

of the financial year and of the profit of the Bank for the year ended

on March 31, 2006.

proper and sufficient care was taken for the maintenance of adequate

accounting records in accordance with the provisions of applicable

laws governing banks in India, and

the accounts have been prepared on a ‘going concern’ basis.

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yeQkeÀ Dee@]HeÀ Fbef[³ee BANK OF INDIA...Star Insta Remit (RTGS enabled remittance product)...

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