Directors Reports
REPORT OF THE BOARD OF DIRECTORS
Dear Members,
Your Directors have great pleasure to present the Ninety-sixth Annual Report on the
business and the operations of your Bank together with the Audited Accounts for the year
ended 31st March, 2014.
1. THE GLOBAL ECONOMY AND INDIA
Growth in advanced economies is still some distance from a full fledged recovery. In
the United States (US) itself, the economy which had shown recovery during FY 2013-14,
contracted sharply at a much steeper pace i.e. by 2.9 per cent in the first quarter of
this financial year. Drags to the first quarter growth are on account of lower household
consumption, lower consumer spending and weak export growth. Growth numbers are expected
to improve in the subsequent quarters. The situation in Euro zone is no better, where the
fears of deflation have surfaced. The
European Central Bank (ECB) has cut the deposit rate from 0 per cent to – 0.10 per
cent recently. The latest GDP numbers stand at 0.2 per cent for Q1 of FY 2014-15. The
Japanese economy advanced 1.6 per cent in Q1 of FY 2014-15, after decelerating for three
previous quarters, on unexpected surge in capital spending. As regards China, growth seems
to have moderated, with a gradual transition to a more market based economy.
As regards the Emerging Market Economies (EMEs), growth remained subdued as high
inflation, pressure on exchange rates, tight Monetary Policy and tightening of financial
conditions acted as a drag on the path of growth acceleration. The volatility unleashed in
the second and third quarter of FY 2013-14 after the tapering indication by the US Federal
Reserve (FED) has now subsided. Further, ECB’s Policy of lower rates along with
easing in Japan may also reduce the impact of the FED’s tapering on global liquidity.
Geo-political risks emanating in Iraq, Ukraine and their consequent impact on the global
crude oil prices remain a major source of concern.
To sum up, the global financial markets after major turmoil are showing early signs of
improved stability and pick up is taking place after a significant deceleration. Pent-up
demand, lower interest rates for a foreseeable period and an easing of uncertainty are the
factors which predict that the next stage of international growth will be stronger than
seen so far.
The Indian Economy in FY 2013-14:
India’s GDP growth remained at 4.7 per cent for FY 2013-14, which is marginally
better than 4.5 per cent figure clocked for FY 2012-13. The growth numbers were sub 5 per
cent for the second consecutive year. Primarily, this was driven by better agricultural
output of 4.7 per cent vis--vis 1.4 per cent last year.
Industrial growth contracted by 0.1 per cent, reflecting subdued investment and
consumption demand. The services sector grew at 6.2 per cent. The Indian economy during FY
2013-14 was characterized by a persistently elevated level of inflation, sharp industrial
contraction, exchange rate volatility and worsening Current Account Deficit
(CAD). During May 2013, as the possibility of the US Federal Reserve tapering its bond
purchase programme surfaced, a cascading effect was felt with large-scale capital outflows
from all financial markets. This led to heightened Rupee volatility and unsustainable
Current Account Deficit (CAD). As an immediate measure to shield from the exchange rate
volatility emanating from the tapering by the US FED, RBI introduced several measures and
policies aimed at attracting capital flows and facilitating overseas borrowings. Measures
include moderating outflows and encouraging forex inflows through liberalized
External Commercial Borrowings (ECB) and Foreign Currency Non Resident or FCNR (B)
deposits.
With revival of portfolio flows, India’s forex reserves touched USD 304.22 billion
as on 31st March, 2014. Policy measures were also undertaken by Reserve Bank of
India to curb the gold imports which helped in reducing the Current Account Deficit (CAD).
The CAD which had deteriorated to 4.7 per cent of the GDP narrowed down to 1.7 per cent of
the GDP. With a lower CAD and build up of foreign exchange reserves, the Rupee which had
touched a historical low of 68.80 per US Dollar during the turmoil stabilized to 59.89 per
US Dollar on 31st March, 2014. Reserve Bank of India also announced
unprecedented measures like capping Repo borrowing to 0.5 per cent of NDTL and increasing
MSF rate by 200 bps to 10.25 per cent, which led to a sudden surge in bond yields despite
repo rate being unchanged.
Price Situation and Reserve Bank of India:
On the domestic side, inflation remained the dominant macro risk. Consumer Price Index
(CPI) averaged around 9.5 per cent throughout the year, even touching an all-time high of
11.16 per cent during November 2013, on the back of elevated food and fuel inflation.
Reserve Bank of India calibrated its Monetary Policy stance in line with macro-economic
conditions.
In the early part of the fiscal, considering easing inflation, Reserve Bank of India
reduced the repo rate by 25 basis points from 7.50 per cent to 7.25 per cent. In the
second half of the year as concerns over elevated inflation levels rose, Reserve Bank of
India responded by hiking the repo rate by 75 bps to counter the elevated inflation and
exchange rate depreciation.
Fiscal Situation:
The fiscal deficit during the year 2013-14 was 4.5 per cent of the GDP, narrower than
4.8 per cent a year earlier. The numbers show continued fiscal consolidation. Though
expenses on subsidies, interest payments and pensions overshot the budgeted target, their
impact was absorbed by lower planned expenditure.
Financial Markets:
Indian stock markets which had closed at 18,835.77 as on 31st March, 2013
showed upward trend in the second half of FY 2013-14, as Foreign Institutional Investors
(FII) flocked towards equities buoyed by Reserve Bank of India measures to boost the Rupee
and revive growth. The momentum of inflows picked up sharply towards year-end, when hopes
of a stable Government at the Centre looked realistic. The markets moved nearly 3,500
points up and closed at 22,339.97 as on 31st March, 2014.
Exceptional Policy measures during June 2013-August 2013 followed by monetary
tightening by Reserve Bank of India took its toll on the debt markets. The 10-year
benchmark yield opened at 7.99 per cent, then sky-rocketed to 9.45 per cent during August
2013, and finally closed at 8.80 per cent as on 31st March, 2014.
Overall Assessment :
The domestic economic activity has remained sluggish with contracting industrial
production and weak investment demand. External sector risks have receded because of
timely policy interventions, although there is a need to work towards reducing structural
current account imbalances. With the twin deficits viz. fiscal deficit and current account
deficit within control and the Rupee regaining lost ground, the focus now will shift to
addressing supply side constraints, which will help in reviving the investment cycle and
moderating inflationary expectations.
Domestically, with a strong Government at the Centre, the next level of reforms, better
policy implementation, stronger governance and initiation of concrete steps by the new
Government will be the deciding factors.
Further progress on fiscal consolidation in the Budget, a predictable tax and policy
regime, and low and stable inflation rates will be the key anchors for the economic
progress, going forward. Barring failed monsoon and crude oil prices, Indian economy is
expected to grow at 5 – 5.2 per cent in FY 2014 -15.
2. MAJOR DEVELOPMENTS IN THE BANKING AND FINANCIAL SECTOR IN INDIA
During the past year, the Reserve Bank of India has introduced several new policies and
reforms that will affect the Banking and Financial Sector. Some of the major developments
are as follows:
• Approval of new Banking Licences in Private Sector:
IDFC and Bandhan Financial Services Private Ltd. have been selected by the Reserve Bank
of India to set up commercial banks, from a group of twenty-five aspirants. IDFC and
Bandhan Financial Services Private Ltd. were granted "in-principle" approval by
the High Level Advisory Committee set up by Reserve Bank of India. The
"in-principle" approval granted will be valid for a period of eighteen months
during which the applicants have to comply with all the regulatory requirements stipulated
by the Reserve Bank of India. The Department of Posts is also in talks with the Government
of India for similar banking licence.
• Extension for implementation of the Basel III norms:
Following industry-wide concerns about asset quality and the consequential impact on
the performance and profitability of banks, the Reserve Bank of India has extended the
transitional period for full implementation of Basel III Capital Regulations in India up
to 31st March, 2019, vis--vis the earlier stipulated 31st March,
2018. This will also align full implementation of Basel III in India closer to the
internationally agreed date of 1st January, 2019.
• Reserve Bank of India panel recommends buffers of up to 2.5 per cent of
risk weighted assets:
A Reserve Bank of India panel has recommended banks to set aside up to 2.5 percent of
risk weighted assets as a ‘Counter-Cyclical Capital Buffer’ (CCCB) to help
remain solvent during times of stress. It is also expected to curb indiscriminate lending
during spells of excessive growth.
• Guidelines of restructuring of advances:
As per guidelines issued by Reserve Bank of India in May 2013, loans that are
restructured from 1st April, 2015 onwards would be classified as
non-performing. General Provision on standard accounts restructured after 1st
June, 2013 was increased to 5 per cent. The General Provision required on standard
accounts restructured prior to 1st June, 2013 has been increased to 3.5 per
cent from 31st March, 2014 and would further increase to 4.25 per cent and 5
per cent from 31st March, 2015 and 31st March 2016 respectively.
• Framework on Re-vitalising Distressed Assets in the Economy:
During January 2014, Reserve Bank of India has issued the said framework outlining an
action plan for early recognition of financial distress, prompt steps for resolution and
fair recovery for lenders, which will be effective from 1st April, 2014.
Accounts have to be categorised as ‘Special Mention Accounts’ based on the
period of overdues of principal and interest. Further, reporting of credit information of
large borrowers to the proposed Central Repository of Information on Large Credits
(CRILC), formation of Joint Lenders Forum (JLF) and Corrective Action Plan by JLF will be
mandatory.
• Discussion paper on structure of banking system in India:
Reserve Bank of India released a discussion paper on the structure of the banking
system in India. The paper addresses various issues such as financial inclusion, providing
specialised services, expanding competition, etc. The paper suggests to have continuous
licensing for entry of new banks as against block licensing.
• First All-Women Bank starts operations:
The Government of India has launched the country’s first All-W Bank, called
‘Bharatiya Mahila omen
Bank’ (BMB) on 19th November, 2013. BMB will offer loans to women for
various activities such as education, housing, setting up of food and catering business,
day-care centres, and SMEs. BMB will be an universal bank that will undertake multifarious
banking activities including financial services such as insurance, mutual funds and
commercial/investment banking.
• Banks are free to open branches in Tier-1 cities:
Banks have been given freedom to open branches in Tier-1 cities without Reserve Bank of
India’s prior approval. However, the freedom is linked to the number of branches a
bank would open in an un-banked or under-banked centre. The number of branches opened in
Tier-I centres cannot exceed the total number of branches opened in Tier-II to Tier-VI
centres and all centres in the North Eastern States & Sikkim. It was also specified
that at least 25 per cent of total new branches opened in a year should be in unbanked
rural Tier V and Tier VI centres.
• Updated guidelines on Stress Testing:
Reserve Bank of India issued updated guidelines on stress testing. Banks would have to
carry out stress tests for credit risk and market risk to assess their ability to
withstand shocks. As per these guidelines, banks will be classified into three categories
based on size of risk weighted assets.
• Introduction of cash-settled Interest Rate Futures (IRF):
Reserve Bank of India has launched cash-settled contracts to help investors hedge
interest rate risks while investing in Government securities. Reserve Bank of India has
allowed IRF contracts in 91-day Treasury bills and other Government securities. IRF is a
more transparent alternative to the current over-the-counter interest rate swaps.
• Other Measures
• Reserve Bank of India launches new RTGS system:
Reserve Bank of India introduced the revamped Real-Time Gross Settlement (RTGS) system
on 19th October, 2013 to facilitate online real time settlements of payments.
The other features are advanced liquidity and queue management features, gridlock
resolution mechanism, hybrid settlement facility, facility to accept future value dated
transactions and options to process multi-currency transactions.
• Withdrawal of old series of prior to 2005:
Reserve Bank of India has stipulated that all older series banknotes issued prior to
2005 will be completely withdrawn from circulation w.e.f. 1st January, 2015.
The reason behind the withdrawal is that they have fewer security features compared to
bank notes printed from 2005.
• ATM transactions without bank account:
In another effort towards financial inclusion,
RBI has given in-principle approval for establishing a new payment system to facilitate
fund transfers from bank account holders to those without accounts through Automated
Teller Machines (ATMs).
• Investment limit for foreign investors raised to $10 billion:
In order to attract more US dollars on a long-term basis into Government bonds, the RBI
has hiked the investment limit for foreign investors (viz. sovereign wealth funds, pension
funds and foreign central banks) from USD 5 billion to USD 10 billion.
3. MAJOR DEVELOPMENTS IN THE URBAN CO-OPERATIVE BANKING SECTOR
• Scheduled Bank status to Urban Cooperative Banks (UCBs): Reserve Bank
of India has allowed Urban Co-operative Banks (UCBs) with total deposits of over Rs. 750
crore to graduate to the Scheduled Bank category. If
UCBs fulfil certain listed criteria viz. continuous net profits for three years, CRAR
at 12 per cent and gross NPAs less than 5 per cent, they will be eligible for inclusion in
the second schedule. All the PSBs, RRBs, Private Sector Banks and Foreign Banks are part
of the second schedule.
• W ell-managed UCBs permitted to undertake intra-day short selling of
Government Securities:
Reserve Bank of India has permitted well managed Urban Co-operative Banks, who are
members of NDS-OM and have regular concurrent audit of their treasury operations, to
undertake intra-day short selling of Government Securities.
• Guidelines to invest in Security Receipts (SR) issued by Securitisation
Company/ Reconstruction Company (SC/RC):
Reserve Bank of India has issued guidelines to Urban Co-operative Banks (UCBs) to
invest in Security
Receipts issued by SC/RC in respect of financial assets sold by them to the SC/RC.
• UCBs can now lend more for house Reserve Bank of India has enhanced
the ceiling on loans extended by UCBs to individuals for carrying out repairs / additions
/ alterations to their dwelling units. The new ceiling on such loans will be Rs. 2 lakh
(Rs. 1 lakh earlier) in rural and semi-urban areas and Rs. 5 lakh (Rs. 2 lakh earlier) in
urban areas. Loans granted under the enhanced limits will also be eligible for
classification under priority sector.
4. THE COVER PAGE:
A YEAR OF CONSOLIDATION
The downward spiral in India’s growth momentum over the past two years has been
markedly sharp. The economy faltered on several fronts viz. waning performance of the
industrial sector, weakening in consumption and investment demand, persistence of high
inflation and high interest rates. A direct consequence of this slump was in the form of
strong impact on the asset quality of banks resulting in rising NPAs. Maximum distress was
witnessed in infrastructure, metals, power, textiles and telecom sector. Your Bank also
witnessed a rise in NPAs, especially with certain large sized consortium financed accounts
slipping into NPA category.
Your Bank was aware that if deceleration in the industrial activity and adverse
macro-economic conditions persist, credit quality could deteriorate further. In order to
minimize such eventuality, your Bank at the start of the year itself, decided to refrain
from aggressive commercial lending. During FY 2013-14, the Bank therefore focused on
retail lending and only select corporate loans of the highest credit quality were
disbursed. The Bank thus as a conscious strategy, utilized this period of economic slump
to consolidate its existing business. In spite of this, your Bank could achieve an overall
business growth of Rs. 3,241.81 crore, touching a business level of nearly Rs. 40,000
crore i.e. Rs. 39,409.56 crore as on 31st March, 2014. This growth could have
been easily higher if we had continued with aggressive commercial lending. However, the
Bank is aware of the perils of lending to riskier assets and hence has repairs: utilized
this year for the process of consolidation.
Our Cover Page for this year is symbolic of the consolidation process undertaken by
your Bank during the year. Consolidation was undertaken at all fronts viz.
• Garnering capital - The CRAR of the Bank improved from 11.15 per cent as on
31st March, 2013 to 12.11 per cent as on 31st March, 2014.
• Improving the CASA numbers - The CASA deposits have increased from Rs.
5,382.01 crore as on 31st March, 2013 to Rs. 5,923.24 crore as on 31st
March, 2014 i.e. by Rs. 541.23 crore during the year. During FY 2013-14, a total of
3,29,647 Savings and 8,525 Current accounts have been opened.
• Maintaining the profitability levels - The net profit after tax of your Bank
has increased from Rs. 112.09 crore in FY 2012-13 to Rs. 147.09 crore in FY 2013-14.
• Disbursement of retail loans - Retail loan business of the Bank increased
from Rs. 3,117 crore in FY 2012-13 to Rs. 3,803.41 crore in FY 2013-14.
• Continuous monitoring of the existing loan accounts - The amount of recovery
of gross NPAs increased from Rs. 154.65 crore during FY 2012-13 to Rs. 183.10 crore during
FY 2013-14. All the above action plans were detailed by the Chairman of your Bank in his
speech at the Bank’s last Annual General Meeting. Once we sail smoothly through this
tumultuous phase of economic downturn with minimum impact, the Bank can pick up pace and
easily surpass Dr. Adarkar Mission of Rs. 50,000 crore by 31st March, 2016.
5. CHAIRMAN’S 2013 SPEECH IN RETROSPECT
The Chairman of your Bank, Shri E. K. Thakur, while delivering his speech on 30th
September 2013, at the 95th Annual General Meeting of the Bank had elaborated
on the difficult phase through which
Indian economy was passing and its effects on the banking sector, measures to control
rising NPAs of your Bank and Bank’s future plans to achieve goals set under Dr.
Adarkar Mission.
The Chairman had during his speech, emphasized on the fact that the sticky and stubborn
inflation will not allow RBI much elbow room to ease interest rates. As gauged by him,
inflation remained at elevated levels throughout the year, with WPI and CPI numbers at all
time high of 7.5 per cent and 11.16 per cent respectively during November 2013.
With the food inflation remaining sticky, RBI had to raise the interest rates on three
occasions during the financial year. Despite good agricultural output, the GDP numbers
also came lower at 4.7 per cent for FY 2013-14, a prediction which was spelt by the
Chairman in his last year’s speech. With the Reserve Bank of India granting the
necessary permission, your Bank re-embarked on the ‘Ashwamedh’ programme of
branch expansion during FY 2013-14. Your Bank opened thirty-eight branches during the
year, thus making a total of 267 branches as on 31st March, 2014. In this
expansion, we have covered Vadodara with four branches and apart from Bengaluru and
Mangalore, also covered cities like Tumkur, Dharwad, Davangere in Karnataka. Since the
beginning of the Ashwamedh programme in FY 2008-09, the Bank has thus expanded its branch
network not only across the length and breadth of Maharashtra State but is also making
footprints in the adjacent States of Gujarat, Karnataka and Goa, besides New Delhi. In
today’s e-age, even stand-alone ATMs serve the purpose of a branch. Your Bank opened
forty-six ATMs during the year, taking the total number of ATMs to 205 as on 31st
March, 2014. Your Chairman had also explained the key challenge faced by the Bank in the
form of rising gross Non Performing Assets (NPAs) and the priority given to recover these
gross NPAs by establishing the Central Recovery Council (CRC), with a single point agenda
of bringing down the gross NPAs. During the financial year 2013-2014, your Bank has
recovered Rs. 183.10 crore of gross NPAs as against Rs. 154.65 crore during the previous
year. Your Chairman had also announced the establishment of a Special Credit Monitoring
Cell (SCMC), comprising of a team headed by a Chief General Manager. The SCMC has been
constantly monitoring each and every borrowal account showing early signs of sickness.
With a focused approach, the SCMC to a great extent was able to detect early signs of
problems and carry out corrective action so that the accounts do not fall in the NPA
category. As regards retail banking, your Bank had rolled out the ‘Mobile Banking
facility’ - "Go-Mo" during FY 2013-14. The new technology, being more
user-friendly, has attracted younger customers and we are pleased to inform that since the
launch, 8,378 customers have registered for this facility. With all such ongoing sustained
efforts, your Bank is marching ahead with renewed vigour and zeal towards its Missions.
6. KEY ACHIEVEMENTS DURING FY 2013-14
The financial year 2013-14 was an even more challenging year for the banking sector
compared to the preceding financial year. Sluggish domestic growth, continued uncertainty
in the global markets and stalled infrastructure projects led to persistent strain on
asset quality of the banks. This has affected the profitability of the banks as major
portion of their profits needs to be kept aside for making provisions for the
Non-Performing Assets.
Against this tough scenario, the key financials of your
Bank during FY 2013-14 are as follows:
• The total business of your Bank increased from Rs. 36,167.75 crore as
on 31st March, 2013 to Rs. 39,409.56 crore as on 31st March, 2014
i.e. a rise of Rs. 3,241.81 crore.
• The deposit figures increased from Rs. 21,144.33 crore as on 31st
March, 2013 to Rs. 23,939.51 crore as on 31st March, 2014, a rise of 13.22 per
cent. Of these, the CASA deposits increased from Rs. 5,382.01 crore to Rs. 5,923.24 crore,
a rise of 10.06 per cent.
• Advances rose from Rs. 15,023.42 crore as on 31st March, 2013 to
Rs. 15,470.05 crore as on 31st March, 2014, a rise of 2.97 per cent. In view of
the economic slowdown and the unprecedented rise in NPAs of banks, your Bank made a
conscious effort to refrain from lending in risky corporate loans, instead focusing on the
less risky retail housing loans.
• The net profit before tax of the Bank has increased from Rs. 152.91 crore
in FY 2012-13 to Rs. 174.59 crore in FY 2013-14.
• The net profit after tax of your Bank has increased from Rs. 112.09 crore
in FY 2012-13 to Rs. 147.09 crore in FY 2013-14.
• Own funds of your Bank have risen from Rs. 1,961.31 crore as on 31st
March, 2013 to Rs. 2,141.81 crore as on 31st March, 2014. The Capital to
Risk-Weighted Assets Ratio (CRAR) improved from 11.15 per cent as on 31st
March, 2013 to 12.11 per cent as on 31st March, 2014, in spite of lack of
adequate capital raising avenues.
• The net NPAs continued to remain zero per cent for the tenth consecutive
year. The Provision Converge Ratio (PCR) of your Bank is 100 per cent as against 70 per
cent prescribed by RBI for Scheduled Commercial Banks.
• Your Bank has between March 2006 till 2009 acquired seven sick and weak
Urban Cooperative Banks spread across Mumbai, Nasik, Sangli and Kolhapur. The total
business of these banks as on the date of merger, which was Rs. 1,894.78 crore then, has
crossed Rs. 10,000 crore as on 31st March, 2014. The following table details
the business of these merged banks as on the date of merger.
Table No. 1:
Details of merged banks' Business
(Rs. in crore)
| Name of Merged Bank |
Date of Merger |
Business on Date of Merger |
| Maratha Mandir Co-op Bank Ltd. |
20.03.2006 |
292.55 |
| Mandvi Co-op Bank Ltd. |
30.03.2007 |
885.33 |
| Annasaheb Karale Janata |
30.06.2007 |
253.57 |
| Sahakari Bank and |
|
|
| Murgharajendra Sahakari Bank Ltd. |
|
|
| Nashik People’s Co-op Bank Ltd. |
21.12.2007 |
207.95 |
| South Indian Co-op Bank Ltd. |
01.09.2008 |
167.21 |
| Kolhapur Maratha Co-op Bank Ltd. |
06.03.2009 |
88.17 |
| Total |
|
1,894.78 |
As a strategic business decision, your Board of Directors defined and created a
Strategic Business Unit (SBU) on 17th August, 2009 by grouping together seven
merged banks and naming it as ‘SBU-Gandhakosh’. SBU-Gandhakosh has grown by
leaps and bounds over the last five years and has been able to scale a total business
level of Rs. 10,488.12 crore as on 31st March, 2014.
It may be noted that the original ‘The Saraswat Co-operative Bank Ltd.’ took
eighty-eight years to accomplish the said feat. Thus, your Board of Directors’
decision to assimilate these weak and sick banks has been fully vindicated by the business
level achieved by SBU-Gandhakosh in a mere span of eight years from the date of first
merger. The dream of establishing a "Bank within the Bank", which was
conceptualized under SBU-Gandhakosh and mentioned in the Annual Report of FY 2009-10 has
been accomplished. It needs to be highlighted that the total business of SBU-Gandhakosh, a
unit of merged banks is bigger than some of the mid-sized Urban Co-operative Banks (UCBs)
operating in this country for decades. Not only that, SBU-Gandhakosh today contributes
one-fourth of the total business of your Bank. By 31st March, 2016, the share
of business of SBU-Gandhakosh will be around one-third of the total business of your Bank.
7. OUR MISSION: ALL EYES ON ONE TRILLION!
Against the backdrop of weak fundamentals of the Indian economy and the paucity of good
commercial advances in the market, emphasis was laid on schematic lending, in particular,
housing loans which are backed by a strong security. This was a challenging task as every
player in the banking industry was vying for the same. This retail push has given momentum
to the advances portfolio and despite a total repayment of Rs. 2,400 crore during FY
2013-14, the Bank was able to cross the advances figure of FY 2012-13.
As regards deposit growth, your Bank registered 13.22 per cent rise in total deposits
in tune with the banking industry growth rate. Thus, the total business of the Bank
touched a level of Rs. 39,409.56 crore as on 31st March, 2014. With stable
Government at the Centre, the Policy reforms will gather pace resulting in pick-up in
industrial and infrastructure activity leading to credit pick-up. This along with rising
savings ratio will give a fillip to the growth rate. This buoyancy will get reflected in
an improved performance of the banking industry and your Bank will not be an exception.
Thus, your Bank is confident of achieving Dr. Adarkar Mission III target of Rs. 50,000
crore business level by 31st March, 2016 and Dr. Adarkar Mission IV target of
Rs. 100,000 crore business level by 31st March, 2021.
8. HUMAN RESOURCES DEVELOPMENT DEPARTMENT
The HRD Department continues to perform its role of recruiting and nurturing the
Bank’s human resources and creating an environment conducive for learning, growth and
creation of better service conditions than our peers in the industry to their staff.
Some of the initiatives taken by the HRD Department are as follows:
• Deputing Executives for training programmes conducted by highly reputed
Harvard Business School :
Y our Bank has always promoted a culture and believes in the power of knowledge and
training in shaping the lives of individuals.
The Bank therefore utilizes every opportunity to ensure that the employees are
well-informed and well-equipped through well-planned and organized training and
development sessions.
Y our Bank conducted three residential programmes for the officials of the Bank in
partnership with Harvard Business School (HBS) at their new state-of-the-art class room at
the Taj Land’s End in Mumbai.
The said training programmes were as below:
• Leadership in Financial Organisations-India:
The objective of the programme was to help Executives to address the key issues related
to the leadership and management of financial companies and improving the ability to lead
change and drive growth in an uncertain global economy. The Bank nominated two officials
of the level of Chief General Manager and above for this programme.
• Improving Corporate Performance and
Profitability-India:
The objective of the programme was to help the Senior/Middle Management to explore the
critical connections among business strategy, performance measurement, management
accountability, organizational design, and corporate governance. The Bank nominated six
officials of the cadre of Chief Manager and above for this programme.
• Leading Growth Through Customer Centricity-India:
The objective of the programme was to help Executives gain a deeper insight as regards
building a customer-centric organization by identifying actionable market segments,
implementing segment-specific strategies and expanding the market share of the
organization. The Bank nominated two Executives of the cadre of Deputy General Manager and
above for this programme.
• Policy Towards Women Co-workers:
The Bank is committed to provide a safe and congenial work environment to its
employees, more particularly, women employees and ensure that they are not subjected to
any sexual harassment. The Bank appreciates that such harassment constitutes infringement
of fundamental right to work in a safe and healthy environment. As you are aware, the
Board of Directors of the Bank has approved the Policy Towards Women Co-workers and also
formed a Complaint Committee as envisaged under the said Policy.
The Government of India has enacted Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013 (14 of 2013) on 9th December,
2013. The said Act makes it mandatory for every employer of a workplace to constitute a
Committee known as the ‘Internal Complaint Committee’. In cases where the
offices or administrative units of the workplace are constituted at different places or
divisional or sub-divisional level, it is directed that the Internal Committee be
constituted at all the administrative units or offices.
In compliance with the provisions of the Act, your Bank has formed Internal Complaint
Committees at all the Zonal Offices, which comprise respective Zonal Head, two lady
Branch Managers/Management Staff from each Zone and one Committee Member of the
Coordinating Committee representing an NGO. Mrs. Pearl R. Varghese, General Manager &
Head-HRD will be the Chairperson of all the committees. The earlier existing Complaint
Committee now functions as the Central Complaint Committee.
• Upgradation of select senior employees from Grade 'B' to Grade 'A':
Since FY 2012-13, your Bank is absorbing "Select Grade 'B' Staff" employed by
the Bank to Grade 'A' on the basis of their year-wise seniority. During the year 2013-14,
168 employees from various cadres of Grade 'B' pay scale were upgraded to Grade 'A' pay
scale, based on their seniority and acceptable performance reports. During the preceding
year, similar upgradation was done for 197 Grade 'B' employees.
• Recruitment:
In view of your Bank’s continued expansion programme and also to fill in the
vacancies created by exit of some employees, total 691 employees were recruited during the
year. The 691 employees include 3 Executive cadre, 151 Management cadre and 537
Non-Management cadre employees. Of these, 79 candidates viz. 64 Executive/Management cadre
and 15 Non-Management cadre are lateral recruits having rich and varied experience in the
banking industry. The new recruits include 29 Executives/ Management Staff members in
Grade 'A', 639 Management and Non-Management Staff members in Grade 'B' and 23 Management
and Non-Management Staff members in Grade 'C'.
• Promotional Exercises:
Identifying the need for managerial positions in the Bank in the wake of vacancies
generated due to retirement, resignation etc, the Bank conducted promotional exercises
across various cadres. The Bank identified suitable employees with exemplary performance
and potential to shoulder higher responsibilities, and promoted them to higher positions.
During the year under report, 133 employees were promoted to various cadres. (12 from
Sub-staff cadre to Junior Officer cadre, 57 from Clerical cadre to the Dy. Manager cadre,
58 to various positions in the Management cadre and 6 to various positions in the
Executive cadres). The 133 promoted employees include 75 Grade 'A', 57 Grade 'B' and 1
Grade 'C' employees.
Table No. 2:
Summary of Employees Recruited / Exited during FY 2013-14
| Number of Employees as on 31.03.2013 |
3,906 |
| Number of Employees recruited during the year 2013-14 |
691 |
| Sub Total |
4,597 |
| Less the number of Employees who exited during the year 2013-14 due to: |
|
| 1. Natural Death |
2 |
| 2. Retirement |
32 |
| 3. Termination |
11 |
| 4. Dismissals |
1 |
| 5. Resignations |
200 |
| Total Employees exiting the Bank |
246 |
| Number of Employees as on 31.03.2014 |
4,351 |
| Net Addition during the year 2013-14 |
445 |
Thus, there is a net increase of 445 employees during FY 2013-14. The recruitment
exercise was undertaken based on a Manpower Plan, so as to adequately equip the newly
opened thirty-eight branches.
• T raining for staff:
During the year, the Staff Learning Centre imparted training to 3,379 employees
comprising 1,427 members from Management cadre and 1,952 members from Non-Management
cadre. In total, 130 training programmes were conducted which included induction training
for new recruits, refresher programmes, orientation programmes for promoted staff members
and programmes on marketing. Need-based programmes were also conducted for branches, zones
and departments.
Staf f members were also encouraged to update their knowledge on a regular basis
through various initiatives like internal on-line tests, encouragement for Indian
Institute of Banking and Finance (IIBF) tests and educative articles and columns in the
magazine ‘Madhusattva’.
9. PRESENT STATUS OF EARLIER INITIATIVES
• Administrative Self Regulatory Authority (ASRA):
It has been three years since your Bank put in place the post of the Administrative
Self Regulatory Authority (ASRA), the first such initiative in the co-operative banking
sector. ASRA has continued to perform its role of ensuring compliances, both regulatory as
well as internal. Under the aegis of ASRA, your Bank updated and placed before the Board,
thirty-nine Policy Documents and thirty-eight reviews pertaining to various Departments
during FY 2013-2014. Due weightage was given to adherence to Policy documents, submission
of reviews, compliance with systems and procedures at various branches and study of status
of compliances. Looking back, it can be stated that this unique initiative of ASRA started
by your Bank has been a worthwhile one and has contributed to a healthier Bank in the area
of compliances with the multi-pronged regulatory requirements.
• Progress of New Initiatives Unit (NIU):
The New Initiative Unit of your Bank was set during October 2011. NIU refines and
defines the Bank’s Product Value Proposition, Product Feasibility, Benchmarking,
Digital Branding and Marketing, Cost Benefit Analysis, Product Mix and New Product
Development. NIU looks at possibilities for adopting modern technology platforms to
continuously improve the quality of products/services offered and performs competitive
analysis with similar products in the market. Also, NIU is actively involved in
conceptualizing ideas and finding best service providers for seamless and flawless service
delivery. NIU has been extensively working on various projects as seen below:
• Stepping into the world of Digital Media:
NIU successfully created Your Bank’s digital persona by launching official Social
Media Profiles/Pages of Saraswat Bank on Facebook and Twitter. This has facilitated your
Bank to reach out to young population of the country which uses online media as their
primary mode of information and communication. For easy access to our social media pages
of Facebook and Twitter on the website, Facebook and Twitter icons were added by NIU on
website’s scroll bar.
NIU effectively made use of Search Engine Marketing (SEM), an alternate and measurable
digital marketing platform to market our Home Loan product online. Through this campaign,
your Bank could reach a tremendous section of home hunting customers and helped them
fulfill their dream of a happy home. The final outcome exceeded estimates and the Bank
received more than twice the leads with roughly half of them resulting in conversions post
closure of campaign.
• Y our Bank on Electronic Media:
NIU played a pivotal role in creating and establishing your Bank’s presence in
multiple languages on Electronic channels like TV and Radio across India. This is the
first time in the history of your Bank that it set foot into these traditional yet
unexplored media only to receive great response to the home loan category.
• State of the Art Website:
NIU recommended some structural modifications with regard to look, design and content
of the website which has given visitors a visual feast to their eyes along with relevant
details about the Bank’s products and services. NIU also added latest widgets like
currency convertor, branch locator powered by Google Maps, list of holidays, easy form
downloads that increased visitors interests and enticed them to stay for long duration on
the website.
• Creation of New Product Development Team:
NIU created a dedicated New Product Development (NPD) Team comprising senior management
personnel that looks after innovative and new products to develop state of the art
products or services to stay relevant in the banking industry. NPD gives an open platform
to all employees of your Bank to place their ideas and suggestions for improving your
Bank’s existing products/services. New concepts pertaining to technological and
operational enhancement are also discussed and strategies are formulated to execute the
same.
• Research and Development in Technology Banking:
While addressing the immediate concerns of Tech Banking, the Research and Development
activity is focused towards anticipating the future needs and requirements of customers
and developing platforms and roadmaps to address them. NIU is currently concentrating on
researching Internet Banking features offered by other banks at large. This has helped
your Bank in restoring and providing value addition to the existing features of Internet
Banking and Mobile Banking.
• Payment Gateways:
With tremendous growth potential seen in on-line shopping and e-commerce industry which
is done using Payment Gateway platforms, NIU is working towards getting on-board payment
gateway service providers so as to offer convenient shopping facilities to our Internet
banking customers.
• Online Trading:
Many of your Bank’s stakeholders felt that the Bank should provide online trading
facility to its demat customers. NIU took up this project and met various brokers in order
to set up a 3 in 1 account facility for your Bank’s present as well as potential
customers. Your Bank was following up with RBI to seek approval for the launch of online
trading facility to our demat account holders. You will be pleased to note that RBI has
granted permission to UCBs for offering such online trading facility, subject to approval
on case-specific basis.
Your Bank is in the process of getting the neccesary regulatory clearances and
furthering other operational requirements. We will thus soon be delivering this service to
our 90,000 demat account-holders.
• Building relations through networking:
In order to stay relevant in the and ensure that your Bank doesn’t miss out on
value opportunities, NIU has been participating in various seminars and workshops
significant to projects undertaken. NIU has also visited various organizations across
industries that cater to Bank’s technology, communication and services, networking
actively to build healthy corporate relations.
NIU, with a dedicated and focused approach is all set to transform your Bank into a
vibrant, Tech-Enabled New Age Bank. NIU has been working towards making your Bank meet
innovative opportunities beneficial for business growth so as to make your Bank a global
bank.
Credit Portfolio Audit:
Credit Audit has, by now, stabilized well in Bank and all accounts with total exposure
of Rs. 5 crore and above, amounting to Rs. 13,152.46 crore were audited. Audit is
conducted online and rectification of compliances particularly in the Critical Areas of :
(i) Documentation (ii) Security Creation (iii) Mortgages (iv) ROC/ CERSAI Charges and (v)
Insurance is accorded utmost importance.
Apart from the review of the risk rating for accounts based on the warning signals and
non-compliances in the critical areas, the adverse movements in risk ratings, if any, for
the accounts subjected to audit are also being analyzed so that appropriate mitigating
measures can be taken up urgently.
Progress of BPR Project:
Y our Bank embarked on the Business Process Re-engineering (BPR) exercise five years
back. Under the said exercise, several Retail Asset and Small Enterprises Centres (RASECs)
were formed. These units now act as a one shop window for the customers at one place.
Further, Turn Around Time (TAT) has been reduced. Due to this set-up, control over quality
of retail loans can also be achieved and retail loans of the highest standard can be
tapped. Follow-up can be done from one centre.
The disbursements undertaken by RASEC since inception and the amount of NPAs is given
in the table below:
Table No. 3:
RASEC-wise disbursements and NPAs since inception
(Rs. in crore)
| NAME |
DISBURSEMENTS UPTO 31st March 2014 |
NPA AS ON 31st March 2014 |
| Borivali |
1,001.56 |
0.58 |
| Dadar |
661.58 |
0.09 |
| Thane |
801.62 |
0.15 |
| Pune |
837.45 |
0.73 |
| Aurangabad |
219.60 |
0.07 |
| Matunga |
440.15 |
1.26 |
| Others |
323.61 |
0.00 |
| Total |
4,285.57 |
2.88 |
Thus, it is evident that percentage of NPAs to total disbursement of retail loans done
through RASECs since their inception has been a meagre 0.06 per cent. This itself
vindicated the fact that establishment of RASECs was a grand success.
10. EV ALUATION OF MERGERS
At the time of takeover of erstwhile seven merged banks, there were total ninety-six
branches of these banks. Out of these ninety-six branches, only forty-nine old branches
are operational as on 31st March, 2014, i.e. they continue to remain located
where they were in the erstwhile merged banks. These forty-nine branches are operating
under SBU-Gandhakosh. One branch of a merged bank has been transferred to Zone V of Legacy
Saraswat – that is the original Saraswat Bank – for operational convenience.
Similarly three branches of Legacy Saraswat are transferred to SBU-Gandhakosh. After a
detailed viability study, forty-six branches of merged Banks have either been closed or
merged with the nearby branches of SBU-Gandhakosh.
Of the closed branches, nineteen licences of merged banks have been utilized by
SBU-Gandhakosh for opening new branches in new locations, as such shifting of unviable
branches in new locations was permissible under RBI Policy. Besides, thirty-six branches
were opened under SBU-Gandhakosh from the Annual Business Plans of your Bank approved by
RBI for the period 2008-2012. These branches were opened in Mumbai, Pune, Western
Maharashtra, New Delhi and Gujarat State. Seventeen licences of merged banks have been
allowed to be utilized by Legacy Saraswat for opening of their new branches and ten
licences of merged banks are still to be utilized for opening new branches.
As on 31st March, 2014, SBU-Gandhakosh has in its fold a total of 107
branches and Legacy Saraswat has 160 branches.
Table No. 4:
Progress of Gandhakosh (SBU – Merged Banks) at a glance:
(Rs. in crore)
| Total Business as on date of Merger (Original ninety- six branches of
seven merged banks) |
Total Business of one hundred and seven branches of Gandhakosh as on
31-03-14 |
Business per employee as on date of Merger |
Business per employee as on 31-03-14 of Gandhakosh |
Gross NPA as on date of Merger |
Gross NPA as on 31-03-14 |
Aggregate recovery (including write off) till 31-03-14 |
Accumulated Operating profit earned by the Branches of Gandhakosh
till 31-03-14 |
Post-tax Profit earned by Gandhakosh till 31-03-14 |
| 1,894.78 |
10,488.12 |
1.54 |
8.19 |
276.41 |
29.20 |
247.21 |
491.88 |
377.74 |
From the above table, it is observed that the total business of SBU-Gandhakosh has
increased from Rs. 1,894.78 crore as on the date of mergers to Rs. 10,488.12 crore as on
31st March, 2014.
It may be observed from Graph I, that rise in business on y-o-y basis i.e. in FY
2013-14 over FY 2012-13 has been Rs. 1,248.29 crore.
One of the most crucial aspects of the mergers of seven weak banks with our Bank has
been the concerted efforts on recovery of NPAs. During the current financial year, the
Gross NPAs of the SBU- Gandhakosh have been further reduced from Rs. 276.41 crore as on
the date of merger to Rs. 29.20 crore as on 31st March, 2014.
The productivity per employee of SBU-Gandhakosh branches which was Rs. 1.54 crore at
the time of merger has improved to Rs. 8.19 crore as on 31st March, 2014.
Operating profit of SBU-Gandhakosh has risen from Rs. 395.82 crore as on 31st
March, 2013 to Rs. 491.88 crore on 31st March, 2014, recording a rise of Rs.
96.06 crore i.e. by 24.27 per cent.
The increase in operating profit indicates the fact that the experiment of mergers
undertaken by your Bank has been a phenomenal success.
11. BRANCH EXPANSION
As mentioned in last year’s Annual Report, the Branch Expansion
programme-Ashwamedh has been re-initiated after a brief pause in FY 2012-13. In FY
2013-14, your Bank has opened thirty-eight new branches. The Bank added four more branches
in Vadodara, Gujarat, four branches in various cities in Karnataka, one in Madhya Pradesh,
one in Goa, eighteen branches in Mumbai and outskirts (including Thane District and Navi
Mumbai) and ten in rest of Maharashtra. The Bank has thus strengthened its existing branch
network, especially in Maharashtra, Karnataka and Gujarat.
The position of our branches during FY 2013-14 is as under:
Table No. 5:
| Particulars |
Number |
| Number of Branches as on 31st March, 2013 |
229 |
| Add: Number of Branches opened during FY 2013-14 |
38 |
| Less: Number of Branches closed / merged during FY 2013-14 |
0 |
| Total Number of Branches as on 31st March, 2014 |
267 |
The details of the new branches opened during FY 2013-14 are as below:
Table No. 6:
Details of thirty-eight new branches opened during 1.04.2013 to 31.03.2014
| Sr. No. |
Name of the Branch |
Location |
Date of Opening |
| 1 |
Karelibaug, Vadodara (with ATM) |
A/49,Ranchodpark Housing Society, Ground Floor, Near Amit Nagar Circle, VIP Road,
Karelibaug, Vadodara - 390 018. |
23.04.2013 |
| 2 |
Manjalpur, Vadodara (with ATM) |
A/8, Shreeji Dham Society,Ground Floor, Village Manjalpur,Deep Chamber Road, Vadodara
– 390 011. |
23.04.2013 |
| 3 |
Fatehganj, Vadodara (with ATM) |
"Airavat" , Ground Floor,Plot No.3,4, Sadhanagar Co-op. Society,Opp. Rangoli
Restaurant,Fatehganj, Main Road, Vadodara - 390 002. |
23.04.2013 |
| 4 |
Bhivandi (with ATM) |
J. P. Tower, Ground Floor,Shop Nos.1 to 6,Gauri Pada,Opposite BSNL Telephone Exchange,
Dhamankar Naka,Bhiwandi, Dist- Thane - 421 302. |
23.04.2013 |
| 5 |
Savedi Road, Ahmednagar (with ATM) |
Ground Floor,176/3A, Plot No.46/8,Savedi Road, Ahmednagar - 414 001. |
23.04.2013 |
| 6 |
MIDC, Ahmednagar (with ATM) |
Plot No.X-31/2,Nagpur-Ahmednagar MIDC,Near IT Building,Tal and District Ahmednagar -
414 111. |
23.04.2013 |
| 7 |
Wardha Road, Nagpur (with ATM) |
Ground Floor,Building of Maharashtra State Mining Corporation(MSMC),Plot No.7, Ajni
Square, Wardha Road,Nagpur - 440 015. |
23.04.2013 |
| 8 |
Pratap Nagar, Nagpur (with ATM) |
Ground Floor,22, Income Tax Colony, Main Road, Pratap Nagar,Nagpur - 440 022. |
23.04.2013 |
| 9 |
T V Centre, Aurangabad (with ATM) |
Ground floor,N-11/A,Plot No.25, T.V. Centre, HUDCO, Aurangabad - 431 003 |
23.04.2013 |
| 10 |
Solapur (with ATM) |
"Rathi Tower", Ground Floor, F.Plot No.I+23/ B,Budhwar Peth, Near
Neelanagar, Solapur - 413 002 |
23.04.2013 |
| 11 |
Kamothe (with ATM) |
Greenscape Royale,Shop Nos.1,2,3 & 4, Ground Floor,Plot No.25, Sector 7, Kamothe,
Navi Mumbai - 410 209. |
23.04.2013 |
| 12 |
Akola (with ATM) |
Shiv-Daya Complex, Ground Floor, Opp. Uday Talkies, Tilak Road, Akola - 444 001 |
23.04.2013 |
| 13 |
Khopat (with ATM) |
G-1, Akruti SMC, Ground Floor, Near S.T. Stand, Khopat Naka, L.B.S. Road, Thane(W) -
400 602. |
23.04.2013 |
| 14 |
CBD Belapur (with ATM) |
Shop No.20,21,37 and 38, Ground Floor, Shree Nand Dham, Sector 11, CBD Belapur, Navi
Mumbai - 400 614 |
23.04.2013 |
| 15 |
Uran |
Madina Complex, First Floor, Karanja Road, Uran, Navi Mumbai - 400 702. |
23.04.2013 |
| 16 |
Hindu Colony, Dadar (E) (with ATM) |
Indian Education Society,Ground Floor, Nabar Gurji Path (6th Lane),Raja
Shivaji Vidyasankul,Plot No.135-145, Hindu Colony, Dadar (East),Mumbai - 400 014. |
20.08.2013 |
| 17 |
Dahisar (W) (with ATM) |
Leelawati Apt.,Shop No. S1, S2 & B2,Ground Floor, L.T.Road, Dahisar (W), Mumbai -
400 068. |
20.08.2013 |
| 18 |
Ambernath (E) (with ATM) |
Ground Floor, Chandrama,Suryodaya Co-op. Housing Soc. Ltd., Plot no. 24, Ambarnath
(E), Dist- Thane - 421 501. |
20.08.2013 |
| 19 |
Santacruz (E) (with ATM) |
Orion, Ground Floor, Shop no.2,Nehru Road, |
18.09.2013 |
|
|
Santacruz (E),Mumbai – 400 059. |
|
| 20 |
Seawood (with ATM) |
Shop nos.11 to 14, Ground Floor,Ambika Apartment,Plot No.10, Sector 42-A, Seawood,
Nerul (West) , Navi Mumbai - 400 706. |
18.09.2013 |
| 21 |
Mumbai Central (with ATM) |
B - 3 & 4, Shri. Santoshimata CHS,Dr. D.B.Marg, Mumbai Central,Mumbai - 400 008 |
18.09.2013 |
| 22 |
Thakur Complex Kandivali (E) (with ATM) |
Shop Nos.12 & 13, Vaishnav Villa, Opp. Impression, Near Avenue Hotel,Thakur
Complex, Kandivali (East),Mumbai - 400 101. |
18.09.2013 |
| 23 |
Mysore, Karnataka (with ATM) |
2909, Kanthraj URS Road, Ground Floor, Saraswathipuram, Mysore, Karnataka - 570 009 |
14.12.2013 |
| 24 |
Tumkur, Karnataka (with ATM) |
Hotel Sri. Vigneshwara Comforts, 1st Floor, Opp. Tumkur University, BH
Road,Tumkur, Karnataka - 572 102 |
14.12.2013 |
| 25 |
Dharwad, Karnataka (with ATM) |
Vishwa Laxmi Arcade, Ground Floor,P.B.Road, Dharwad, Karnataka - 580 001. |
14.12.2013 |
| 26 |
Davangere, Karnataka(with ATM) |
269 / 1, Near Mallikarjuna Motor and Scooter Mart, Jayadeva Circle Road,Davangere,
Karnataka – 577 002. |
14.12.2013 |
| 27 |
Sahakar Nagar, Pune (with ATM) |
Pentagon Building, Plot No.477 A, Ground Floor, Shop nos. 1 to 5, Parvati, Kalpanamati
Housing Society,Sahakar Nagar, Pune – 411 009 |
16.12.2013 |
| 28 |
Bhusari Colony, Kothrud (with ATM) |
Bandal Capital, Ground Floor,Shop nos. 1,2,3,8,9,10, Near PMT Bus Stand Depot, Bhusari
Colony, Kothrud, Pune - 411 038. |
16.12.2013 |
| 29 |
Bandra Kurla Complex Branch, Bandra(E) (with ATM) |
Ground Floor, Madhava Commercial Premises Co.op. Soc. Ltd., Plot No. C-4, 'E' Block,
Bandra Kurla Complex,Bandra (E), Mumbai- 400 051. |
6.01.2014 |
| 30 |
Kalbadevi (with ATM) |
Ground Floor,285, Princess Street, Kalbadevi, Mumbai- 400 002. |
6.01.2014 |
| 31 |
Alkapuri Branch, Vadodara (with ATM) |
Ground Floor, Abhinav Complex, 67, Vishwas Colony,Below Venus Hospital, Jetalpur
Road,Vadodara,Gujarat – 390 005. |
20.01.2014 |
| 32 |
Annapurna Road Branch, Indore (with ATM) |
Unit No. 1-5, 7-8, Decent Tower,Sacchidanand Nagar,Annapurna Main Road,Indore, Madhya
Pradesh – 452 009. |
20.01.2014 |
| 33 |
Sankhali Branch, Sanquelium, Goa (with ATM) |
Taramahal, Ground Floor, Taranagar, Near Market Yard,Harvalem, Sanquelim-
Bicholim,Goa- 403 505 |
20.01.2014 |
| 34 |
Mazgaon (with ATM) |
19, Ground Floor, Chetak Apartment, S.M.S.Marg, Love Lane,Mazgaon,Mumbai - 400 010 |
20.01.2014 |
| 35 |
Badlapur (East) (with ATM) |
Madhukunj Apt., Old Katrap Road, At Post Kulgaon, Badlapur (East), Tal. Kalyan, Dist.
Thane – 421 503 |
29.03.2014 |
| 36 |
Goregaon Hub, Goregaon (East) (with ATM) |
Manthan House, Opp. Udyog Bhavan, Sonawala Road, Goregaon Hub, Goregaon (E), Mumbai
– 400 063 |
29.03.2014 |
| 37 |
Panchpakhadi, Thane (West) (with ATM) |
Nakshatra Tower, Opp. Thane Municipal Corporation, Panchpakhadi, Thane (W) – 400
602 |
29.03.2014 |
| 38 |
Vasai (West) (with ATM) |
Ashokvan Building, Vasant Karishma Complex, Ambadi Road, Vasai (W) – 401 202 |
29.03.2014 |
Table No. 7:
Details of Branches and Departments shifted during 1.04.2013 to 31.03.2014
| Sr. No. |
Name of the Branch / Department |
Shifted to |
Shifting Date |
| 1 |
Andheri (W) (with ATM) |
1-3 Arunodaya CHS,C.D. Barfiwala Road, Andheri (W),Mumbai 400 058. |
10.07.2013 |
| 2 |
RASEC Borivali |
Emperor Building' , 1st floor, Unit No 101,102,103,104 Bhabhai Naka,
L.T.Road, Borivali (west) Mumbai 400092 |
10.07.2013 |
| 3 |
F. C. Road (with ATM) |
Lohia Jain House, Ground Floor,893/6, Bhandarkar Road,Goodluck Chowk, Deccan Gymkhana,
Pune – 411 004. |
16.12.2013 |
| 4 |
RASEC, Karve Road, Pune |
Road, Pune-411004 |
|
| 5 |
Kudal (with ATM) |
Pratham Apartment,Near Kudal School, Kudal, Dist Sindhudurg - 416520 |
20.01.2014 |
Renovation of Branches:
In continuance with our exercise of renovating the existing old branches as per our new
branding standards, following eight branches / departments have been fully renovated
during the year.
Table No. 8:
Details of Renovation of Branches and Departments during 1.04.2013 to 31.03.2014
| Sr. No. |
Name of the Branch |
Date of Completion |
| 1 |
Santacruz (West), Mumbai |
7.06.2013 |
| 2 |
Station Road, Aurangabad |
30.09.2013 |
| 3 |
Waluj, Aurangabad |
30.09.2013 |
| 4 |
CIDCO, Aurangabad |
30.09.2013 |
| 5 |
Panjim, Goa |
30.09.2013 |
| 6 |
Vengurla |
30.09.2013 |
| 7 |
Sakinaka, Mumbai |
2.12.2013 |
| 8 |
Karve Road RASEC & Zone |
16.01.2014 |
Table No. 9:
In the following Branches, ATMs (On-site & Off-site) were opened during 1.04.2013
to 31.03.2014
| Sr. |
Name of the Branch |
Merged with Branch |
Merging |
| No. |
|
|
Date |
| 1 |
Santacruz (W) |
Fashqua Shopping Centre, Kalakar Kanu Desai Marg, Station Road, Santacruz (West),
Mumbai - 400 054. |
7.06.2013 |
| 2 |
Jogeshwari (E) On-site |
Saidham Co. op Hsg. Society Ltd., Ground floor, Near Ganesh Hotel, Majaswadi,
Jogeshwari (East) - 400 060 |
16.09.2013 |
| 3 |
CIDCO Aurangabad (Additional ATM) |
Plot No.6, Town Center C-2, Near CIDCO Bus Stand, CIDCO, New Aurangabad - 431003 |
30.09.2013 |
| 4 |
Vengurla |
Saraswat Bank Bldg. Baristor Balasaheb Khardekar Road, Vengurla , Dist.- Sindhudurg-
416516. |
30.09.2013 |
| 5 |
Sakinaka Andheri (E) |
K – 8, Ansa Industrial Estate, Ground Floor, Saki Naka, Andheri (E), Mumbai - 400
072. |
2.12.2013 |
| 6 |
Nashik ATM Off-site |
Daiwat Bungalow, Sarveshwar Gruh Nirman Sanstha (Niyojit), College Road, Nashik- 422
005. |
11.12.2013 |
| 7 |
Ratnagiri Branch On-Site |
Benjamin Enclave, 1st Floor,Opp Central Bus Depot, Ratnagiri Kolhapur
Highway Ratnagiri - 415 612 |
22.02.2014 |
Financial performance of New Branches:
As we are marching ahead on our Branch Expansion programme ‘Ashwamedh’, it is
worthwhile to analyze the performance of the new branches opened since July 2008 i.e.
start of ‘Ashwamedh’ programme till end-March 2014. To ensure clarity amongst
the shareholders about the viability of new branches, each year we report the progress of
these new branches in the Annual Report.
Number of branches opened since July 2008 till end-March 2014:
Table No. 10:
(Rs. in crore)
(A) Profit making Branches
| No of Branches |
Deposits |
Advances |
Total Business |
Profit |
| 59 |
2,540.25 |
3,028.16 |
5,568.41 |
59.77 |
(B) Loss-making Branches
| No of Branches |
Deposits |
Advances |
Total Business |
Profit |
| 66 |
816.44 |
497.01 |
1,313.45 |
-19.37 |
| Grand Total (A+B) |
|
|
|
|
| 125 |
3,356.69 |
3,525.17 |
6,881.86 |
40.40 |
From July 2008 till 31st March, 2013, your Bank had opened eighty-seven new
branches, out of which forty-two were profit-making and forty-five were loss-making
branches as detailed in last year’s Annual Report. It may be noted that in order to
bring these loss-making branches into profit within a reasonable period of time, meetings
are held at periodical intervals with these branches. These meetings are headed by your
Bank’s Chairman wherein guidance is given, strategies are deliberated with the
respective Branch Managers, Zonal Managers and SBU-Retail Heads. As a result of these
sustained efforts, sixteen loss-making branches out of forty-five loss-making branches of
FY 2012-13 have turned around during the FY 2013-14. Thus, total new profit-making
branches opened since year 2008 are now fifty-nine, while loss-making branches are
twenty-nine of FY 2012-13 plus thirty-seven branches opened during FY 2013-14. One new
branch opened in FY 2013-14 which is dedicated to Foreign Exchange business is in profit
right from inception.
12. RISK MANAGEMENT
The need for and importance of Risk Management have been reiterated time and again by
your Bank. The Risk Management Department of your Bank not only helps in identifying,
monitoring and measuring the risk profile of the Bank but also helps to maintain a healthy
trade-off between risk and returns.
In times of volatility and fluctuations in the market, financial institutions need to
prove their mettle by withstanding the market variations and achieving sustainability in
terms of growth. The foremost thing is to understand the risks run by the Bank and to
ensure that the risks are properly confronted, effectively controlled and rightly managed.
Each transaction that the Bank undertakes changes the risk profile of the Bank. Any new
avenue for the Bank brings new risks as well, which the Bank will have to handle and
overcome.
Following are broad categories of risks managed and looked into by your Bank:
Credit Risk:
Credit Risk is the potential risk that a bank borrower/ counterparty fails to meet the
obligations on agreed terms. Considering the tough economic scenario and the rising NPAs
of the banking industry in general, the ‘SCMC’ or Special Credit Monitoring Cell
has been formed which focuses on accounts showing signs of weaknesses at an early stage,
scrutinizes the same, identifies the SMAs and assists in relevant steps to avoid account
becoming NPA. Thus, not only is risk assessment largely carried out at the
pre-disbursement stage but even at the post disbursement stage by regular monitoring of
the credit portfolio.
Besides the risk assessment of credit proposals and additional screening of proposals
relating to low credit ratings, your Bank is also undertaking initiatives crucial to the
risk management like- Industry Analysis, Sectoral Caps, Monitoring of Exposure Norms,
Review of Rating Models and their validation, rating migration, etc. These measures are
being conducted at regular intervals to help in maintaining and improving the quality of
credit portfolio of your Bank.
Operational Risk:
Operational risk involves breakdown in internal controls leading to error, fraud,
performance failure, compromise on the interests of the Bank resulting in financial loss.
The key to the management of operational risk lies in the Bank’s ability to assess
its existing operational procedures and establish internal controls which provide
safeguards against unanticipated worst-case scenarios. In order to have an integrated risk
control approach, your Bank has the Operational Risk Management Committee (ORMC) in place,
which helps identify the risk prone areas and suggests the mitigating measures for these
risks. The key activities performed by the Risk Management Department at Operational Risk
level are:
• Monitoring of the AML software.
• Study various procedures from the risk mitigation angle.
• Implementing Red-flag indicators as per IBA guidelines.
• Reporting to and liaisoning with BCSBI and FIU IND and implementation of various
directives of RBI, FIU IND, BCSBI, etc.
• Ensuring strict adherence to the Know Your Customer (KYC) Policy.
• Ensuring steps to prevent Money Laundering.
• Risk Categorisation of customers based on the customer profile.
• Combating Financial Terrorism (CFT) by strictly adhering to RBI norms as regards
banned entities and undertaking precautions while dealing in foreign exchange transactions
with high risk countries.
• Compliance with Banking Codes and Standards Board of India (BCSBI) codes.
Market Risk:
Market Risk is the risk to the Bank’s earnings and capital due to changes in the
market level of interest rates or prices of securities as well as the volatility of those
prices. Your Bank has in place an Asset Liability Management Committee (ALCO) which meets
every month to take a view on the interest rate and liquidity gap position of the Bank in
the backdrop of the prevailing trends in the economy.
The Market Risk activities in your Bank primarily focus on:
• Management of Liquidity Risk on account of Asset Liability mismatches and
Interest Rate Risk.
• Preparation and study of the Structural Liquidity Statement (weekly basis) and
Interest Rate Sensitivity Statement (monthly basis).
• Monitoring of the static liquidity position as well as the dynamic position by
preparing the short term dynamic statement which assesses the short term liquidity
position based on the projected business levels, etc.
• Study of the Liquidity Risk Profile and Mismatch Profile by using various
monitoring tools.
• Study of the adverse impact of interest rate movements (if any) on the
investment portfolio of the Bank.
The Risk Management Team of your Bank endeavours to adopt the best practices in Risk
Management to mitigate the various types of risks emanating from its day-to-day banking
activities.
13. AUDIT AND INSPECTION
As the business of your Bank is growing, the responsibility of the audit function has
also increased. Conducting, controlling and monitoring audit and inspection activities at
various branches, departments and service centres situated at diverse locations across
multiple states and regions is undertaken by the Audit Department under the proficient and
watchful Audit, Accounts and NPA Management Committee of the Board. Concurrent auditors/
external audit firms are selected through a rigorous selection process. Audit is conducted
online, thereby the paper work has reduced to a great extent, even the ‘Compliance
Module’ is browser-based.
An exhaustive model of Audit is followed as below:
• All branches, including service centers departments are subjected to audit from
external professional audit firms.
• Under the RBIA (Risk Based Internal Audit), all branches and departments are
classified as Concurrent and Non-Concurrent, based on their financial position and the
risk weightage attached to each unit. Branches which are not under concurrent audit are
subjected to quarterly audit by external audit firms.
• All Concurrent and Non-Concurrent branches are inspected yearly by Internal
Audit Department.
• All advance accounts of Rs. 5 crore and above are brought under the purview of
special Credit Audit.
• All RASECs and SME branches are inspected half yearly.
• Newly-opened branches are subjected to quarterly audit by the Audit Department.
Audit Department also conducts training programmes for BMs and staff at these new
branches.
• Audit Department accords ratings viz. A, B or C, C being the lowest, to each
branch on various Board-approved parameters.
• Branches with lower ‘Audit Rating’ are covered by monthly SNAP
inspection by senior experienced bank staff and by quarterly inspection by Audit &
Inspection Department, to help them rectify their errors and discrepancies.
• All security issues related to either Database or Network are closely monitored
by the Audit Department. IS audit of all new products is conducted before they are
launched.
14. VIGILANCE
The Vigilance Department of your Bank mainly performs four functions viz. fraud
detection, correction, prevention and cure. High weightage is given to surprise checks and
detection, thus ensuring a pro-active and pre-emptive role of vigilance. All the frauds
and actions taken are reported to the Board of Directors and Reserve Bank of India in
FMR-2 returns on frauds periodically. As a preventive measure, theand modus operandi of
frauds, if any, detected at your Bank as well as in banking industry are reported to all
the branches so as to take adequate precautions in future.
15. YOUR BANK’S FINANCIAL PERFORMANCE FOR FY 2013-14
The following Tables Nos. 11, 12 and 13 reflect your Bank’s financial performance
during FY 2013-14 as a snapshot:
Table No. 11:
Business Growth
(Rs. in crore)
| Particulars |
31-03-2014 |
31-03-2013 |
% change |
| Deposits (i+ii = A) |
23,939.51 |
21,144.33 |
13.22 |
| (i) Low-Cost Deposits (a+b) |
5,923.24 |
5,382.01 |
10.06 |
| (a) Current |
1,130.05 |
965.83 |
17.00 |
| (b) Savings |
4,793.19 |
4,416.18 |
8.54 |
| (ii) T erm Deposits |
18,016.27 |
15,762.32 |
14.30 |
| Advances (B) |
15,470.05 |
15,023.42 |
2.97 |
| Total Business Turnover (A+B) |
39,409.56 |
36,167.75 |
8.96 |
| Investments |
7,804.74 |
6,444.03 |
21.12 |
Table No. 12:
Operating Results
(Rs. in crore)
| Particulars |
31-03-2014 |
31-03-2013 |
% change |
| Interest Income |
2,379.59 |
2,290.51 |
3.89 |
| Interest Expenses |
1,754.67 |
1,616.03 |
8.58 |
| Net Interest Income |
624.92 |
674.48 |
-7.35 |
| Non-Interest Income |
267.19 |
260.63 |
2.52 |
| Total Operating Income |
892.11 |
935.11 |
-4.60 |
| Operating Expenses |
480.47 |
452.76 |
6.12 |
| Gross Profit |
411.64 |
482.35 |
-14.66 |
| Provisions |
237.05 |
329.44 |
-28.04 |
| Profit before Tax and Exceptional Items |
174.59 |
152.91 |
14.18 |
| Income Tax* |
27.02 |
31.18 |
-13.34 |
| Profit after Tax and before Exceptional Items |
147.57 |
121.73 |
21.23 |
| Exceptional Items |
0.48 |
9.64 |
-95.02 |
| Net Profit after Tax and Exceptional Items |
147.09 |
112.09 |
31.22 |
*For the FY 2013-14, your Bank paid total Income Tax of Rs. 84.10 crore. After netting
out the Deferred Income Tax benefit of Rs. 56.83 crore and excess provision of Income Tax
for earlier years of Rs. 0.25 crore, the net amount of Rs. 27.02 crore has been charged to
Profit and Loss A/c statement.
Table No.13:
Key Indicators of Performance
| Particulars |
31-03-2014 |
31-03-2013 |
| Return on Average Assets % |
0.55 |
0.46 |
| Non Interest Income to Total Income %* |
10.09 |
10.22 |
| Cost to Income % |
53.86 |
48.42 |
| Net Interest Margin % |
2.79 |
3.30 |
| Average yield on Advances % |
11.58 |
12.35 |
| Average yield on Investments % |
8.12 |
7.94 |
|
|
(Rs. in crore) |
| *Non Interest Income to Total Income % |
10.09 |
10.22 |
| Non Interest Income |
267.19 |
260.63 |
| Total Income |
2,646.78 |
2,551.14 |
16. SEGMENT–WISE PERFORMANCE SBU – RETAIL BANKING:• Multiple
Delivery Channels: VISA Debit card:
The VISA debit card facility was launched for our customers in the year 2008-09. During
FY 2013-14, the total number of VISA Debit Cards issued has increased to 8,50,582 as
against 7,29,319 during the preceding year i.e. 1,21,263 cards issued this year.
Table No. 14:
Usage of Visa Debit Card:
| Year |
Cash Withdrawal |
Domestic POS |
International POS |
|
No. of Transactions |
Amount Rs. ( in crore) |
No. of Transactions |
Amount (Rs. in crore) |
No. of Transactions |
Amount (Rs. in crore) |
| 2012-13 |
49,35,877 |
1,501.94 |
8,15,785 |
105.81 |
1,879 |
0.65 |
| 2013-14 |
65,53,607 |
1,815.75 |
13,04,034 |
147.38 |
1,328 |
0.51 |
The following initiatives have been during the year under review:• Chip
cards (RuPay/VISA) have been issued to all international users and executives. •
The sub-membership model has been taken up actively. Presently there are seven banks
registered as sub-members with us. The sub-member banks are granted various facilities
like Ru-Pay Debit Cards, RTGS/NEFT, APBS for their customers which they have to avail
under our membership• PIN@POS i.e. entering PIN at the POS machine every time
a customer uses his debit card has been activated.
• ATMs:
During the year, forty-six new ATM centres were opened, taking the total number to 205
ATM centres as on 31st March, 2014. Major upgradations this year in ATMs were:
• Disabling of cash retraction facility• Appointment of a
special team to monitor the working/maintenance of ATM
• A TM failure monitoring
• Internet Banking:
As st March, 2014 a total of 1,87,125on 31 customers have registered for
Internet Banking (rise of 37 per cent over last year) and 6,06,321 for SMS Banking (rise
of 108 per cent over last year).
Major initiatives this year in Internet Banking are
• Nomination facility for Fixed Deposit booked online
• ‘Forgot password’ facility introduced Corporate Banking
• Online bill payment of various utility bills through Bill Desk
Mobile Banking: up
Your Bank has launched Mobile Banking viz. "Go-Mo" on 14th August,
2013 and since then we have registered 8,378 customers for the same.
• Mobile Banking application which was earlier available through a link sent
by SMS has now been uploaded on Android Market. Hence, customers can visit this
application and download the link directly and register for mobile banking.
• A new introduction in the Welcome-
Kit has been done where a customer education series has been initiated.
• Branches are being guided constantly to increase the awareness of the usage
of this tool.
• RTGS/NEFT:
As you are aware, your Bank is one of the pioneer members of RTGS/NEFT initiatives. As
the usage of these systems has now expanded, the Reserve Bank of
India has added new functionalities like advanced liquidity management system, queue
management system, future dated funds transfers and status of transactions through SMS
alerts. Your Bank has also assimilated the new features and the amount of transactions
during FY 2013-14 has shot up to Rs. 4,96,449.50 crore.
• Distribution of Third Party Products: During the year under review, your
Bank has aggressively marketed Insurance Policies and collected a premium of Rs. 28.75
crore and earned revenue of Rs. 7.08 crore.
Table No. 15:
|
|
|
(Rs. in lac) |
| Particulars |
|
Revenue Achievement |
|
|
2012-13 |
2013-14 |
| Life Insurance |
M/s HDFC LIFE |
1.24 |
1.20 |
|
Insurance Co. Ltd |
|
|
| Non-Life Insurance |
M/s Bajaj Allianz |
2.55 |
2.53 |
|
General Insurance |
|
|
|
Co Ltd. |
|
|
| Personal Loan |
M/s Bajaj Allianz |
1.54 |
3.25 |
| Insurance |
Life Insurance Co Ltd. |
|
|
| Mutual Funds & |
|
0.19 |
0.10 |
| others |
|
|
|
| Total |
|
5.52 |
7.08 |
• Demat:
The Bank is performing depository operations through the two depositories – NSDL
and CDSL. The total number of branches offering depository services is 215.
• The total number of IPOs handled through ASBA: 49 Equity Issues, 36 Debt
Issues and 14 Rights Issue
• Renewal of certification of ISO 9001:
2008
• Conducted training for 25 ISO branches during the year•
Savings Bank accounts are now linked with the demat accounts through Swift-core system
Retail loan portfolio:
Retail Loans form nearly one-fourth of the total advances of your Bank. With the
opening of new branches, we have expanded our reach to cover new areas and a newer
customer base. With such expansion and also as a part of the Bank’s Mission to cross
business level of Rs. 50,000 crore by FY 2016, it is expected that the Retail Loan
contribution to total advances also increases in a phased manner from 25 per cent to 40
per cent of the total advances in the coming few years. The outstanding Retail Loan
Business of the Bank increased from Rs. 3,117 crore in FY 2012-13 to Rs. 3,803.41 crore
which is an absolute growth of Rs. 686.41 crore i.e. an increase of 22.02 per cent over
the previous financial year.
Table No. 16:
Scheme-wise Retail Loans Disbursed during FY 2013-14:
(Rs. in lac)
| Scheme |
No. of A/cs |
Disbursed Amt. |
| Vastu Siddhi Home Loan |
5,041 |
99,566.84 |
| Super Fast Car Loan |
1,979 |
14,323.76 |
| Samruddhi OD Scheme |
475 |
6,509.38 |
| Multipurpose Loan |
2,041 |
3,218.39 |
| Gold Loan scheme |
1,977 |
3,223.86 |
| Doctor Delite |
61 |
1,333.32 |
| Saraswati Education |
319 |
866.54 |
| Others |
253 |
4,880.59 |
| TOTAL |
12,146 |
1,33,922.68 |
The percentage of Retail advances to Total advances stood at 24.59 per cent as on 31st
March, 2014 as against 20 per cent as on 31st March, 2013.
Retail Loan NPAs also have decreased from Rs. 43.16 crore as on 31st March,
2013 to Rs. 25.20 crore as on 31st March, 2014. This is 0.66 per cent of
outstanding retail advances as on 31st March, 2014.
Table No. 17:
(Rs. in crore)
| Retail Loan Outstanding as on 31st March, 2014 |
3,803.41 |
| Total Advances as on 31st March, 2014 |
15,470.05 |
| % of Retail Loans to total advances |
24.59 |
Table No. 18:
RASEC wise disbursements for the year 2013-14
(Rs. in crore)
|
Disbursements During FY 2013-14 |
NPA Position as on 31-03-2014 |
|
No. of Branches |
No. of A/cs |
Amount |
No. of A/cs |
Amount |
| BORIVALI |
35 |
1,670 |
212.21 |
17 |
0.58 |
| DADAR |
25 |
1,440 |
173.39 |
9 |
0.09 |
| THANE |
33 |
1,455 |
193.94 |
6 |
0.15 |
| PUNE |
20 |
1,771 |
194.42 |
41 |
0.73 |
| AURANGABAD |
19 |
792 |
58.71 |
4 |
0.07 |
| MATUNGA |
26 |
1,602 |
177.30 |
13 |
1.26 |
| OTHERS |
102 |
3,416 |
329.25 |
0 |
0 |
| TOTAL |
260 |
12,146 |
1,339.22 |
90 |
2.88 |
RASECs have played a crucial role in increasing retail loan disbursements without
compromising the quality of the proposals sanctioned and also in monitoring and
controlling the NPAs in retail loans. In the FY 2013-14, along with the six existing
RASECs, three new processing centres (Vile Parle, Ghatkopar, Pimpri) became operational
covering all the branches across the Bank.
During the FY 2013-14, RASECs received 15,730 proposals out of which 12,146 proposals
have been disbursed.
• Retail Deposits:
The Deposit portfolio has a mix of Savings/Current accounts ranging from premier
accounts such as Platinum/Gold/Silver/Elite to Regular accounts and Zero balance accounts
like Cubs, Easy Deposit savings. This year a total of 3,29,647 Savings and 8,525 Current
accounts have been opened. In the preceding year, 2,14,039 Savings and 6,118
Current accounts had been opened. Thus, there is a rise of 53 per cent on a y-o-y
basis. The CASA base has increased by Rs. 541.23 crore over last year. Though our CASA
percentage has not increased this year due to substantial rise in term deposits, it will
be our constant endeavour to maintain the CASA atleast at 25 per cent.
Table No. 19:
Position of CASA Deposits
(Rs. in crore)
| Particulars |
31-03-14 |
31-03-13 |
| Total Deposits |
23,939.51 |
21,144.33 |
| CASA Amount |
5,923.24 |
5,382.01 |
| CASA (%) |
24.74 |
25.45 |
| in |
|
|
| Increase in CASA |
541.23 |
300.63 |
SBU - WHOLESALE BANKING:
With the slowdown of the economy, it was a challenging year for the banking industry in
the area of commercial advances with meagre investments in the industrial sector. Many
large projects were kept on hold due to pending clearances. This adversely affected credit
demand in the commercial credit segment.
Your Bank’s commercial loan portfolio mainly comprised loans to Small and Medium
Enterprises (SMEs) and a few large mid-corporate borrowers. During the year under report,
the commercial advances portfolio has remained almost static i.e. from Rs. 10,167 crore as
on 31st March, 2013 to
Rs. 10,109.59 crore as on 31st March, 2014. Overall credit off-take was low,
as your Bank adopted a cautious approach in lending, in view of the prevalent adverse
economic climate and increasing delinquencies. Also, your Bank remained more cautious to
lending for long gestation projects through consortium lending.
Your Bank has focused on Small and Medium Enterprises (SMEs) with moderate ticket size
advances up to Rs. 10 crore. Your Bank took a step of forming of Business Loan Cell for
commercial advances up to Rs. 1 crore which will be a tool / instrument for continuous
future business growth. The new initiative is expected to bear fruit during FY
2014-15.
Your Bank has a well diversified commercial credit portfolio spread over a large number
of industries from various sectors. Credit concentration on any particular industry has
been consciously avoided as a policy. As a prudent measure, Bank’s exposure to any
particular industry does not exceed 10 per cent of our total advances. Sector-wise highest
exposure during F.Y. 2013-14 was to ‘Auto and Auto Components industry’, which
was at 6.88 percent of Total Advances at the end of FY 2013-14 and NPAs in this segment
were negligible.
In view of the rising impairment in industrial/corporate loans, more and more cases are
being referred to Corporate Debt Restructuring/Restructuring by the banking industry. The
outstanding advances of your Bank under CDR/Restructuring aggregated Rs. 277.06 crore as
on 31st March, 2014. Your Bank has also tightened its internal systems for
monitoring such accounts.
Total Advances sanctioned but pending for disbursement as on 31st March,
2014 were to the tune of Rs. 1,103.12 crore.
Commercial Real Estate Exposure: Table No. 20:
Credit Exposure to Real Estate as on 31.03.2014.
|
(Rs. in crore) |
| Housing Loans: |
Amount |
| Housing Loans upto Rs. 25 lac |
1,841.11 |
| Housing Loans above Rs. 25 lac |
1,176.46 |
| Total Housing Loans (A) |
3,017.57 |
| Commercial Real Estate Exposure |
|
| Term loans |
430.17 |
| Overdraft (Limit/Balance whichever is higher) |
230.24 |
| Bank Guarantee |
2.62 |
| Investment made by Treasury in housing sector |
5.00 |
| Total Commercial Real Estate Exposure (B) |
668.06 |
| Total Real Estate Exposure (A+B) |
3,685.63 |
It may be noted that as on 31st March, 2014, our total Real Estate Exposure
stood at Rs. 3,685.63 crore which was well within RBI prescribed exposure norms. The major
portion of Real Estate Exposure was contributed by housing loans extended to individuals
which was of the order of Rs. 3,017.57 crore, constituting 81.87 per cent of Total Real
Estate Exposure and 19.50 per cent of our Total Advances. Loans to Commercial Real Estate
(CRE) sector constituted only 4.31 per cent of the Total Advances.
Movement of NPAs:
With the economy deteriorating during the FY 2013-2014, there was increasing stress on
the credit portfolio of the banking industry. However with the concerted efforts in credit
monitoring and recovery, the net additional rise in NPAs during FY 2013-2014 in your Bank
was contained at Rs. 62.76 crore only. Thus, the gross NPAs which were Rs. 663.44 crore as
on 31st March, 2013 have risen to Rs. 726.20 crore as on 31st March,
2014.
Movement of NPAs and Provisions during the year were as under: Table No. 21:
(Rs. in crore)
| GROSS NPAs |
|
| As on 31st March, 2013 |
663.44 |
| Additions during the year |
691.46 |
| Reductions during the year |
628.70 |
| As on 31st March, 2014 |
726.20 |
| PROVISIONS |
|
| As on 31st March, 2013 |
663.48 |
| Additions during the year |
227.92 |
| Reductions during the year |
165.19 |
| As on 31st March, 2014 |
726.21 |
| NET NPAs |
|
| As on 31st March, 2013 |
0.00 |
| As on 31st March, 2014 |
0.00 |
Out of Gross NPAs of Rs. 726.20 crore, Rs. 579.69 crore i.e. 76 per cent of the NPAs
were contributed by seventeen accounts under consortium/multiple banking where action is
being taken in concert with other banks.
The Central Recovery Council (CRC) which was established during FY 2012-13, continued
to play a key role during FY 2013-14 too. During the year under review, eight meetings of
CRC were conducted during which the recovery actions taken for NPAs were deliberated and
any change in course of action, if necessary, was directed to the Recovery Department. As
a result, a record recovery of Rs. 183.10 crore of gross NPAs was made in FY 2013-14.
Your Bank has maintained zero net NPA status for the tenth consecutive year by
providing full provisioning.
Special Credit Monitoring Cell (SCMC):
The importance of credit monitoring cannot be undermined. Reserve Bank of India has
released a ‘Framework for Revitalizing Distressed Assets in the Economy’
effective from 1st April, 2014, which lays down guidelines for early
recognition of financial distress, taking prompt steps for resolution and thereby ensuring
fair recovery for lending institutions. This framework is not yet applicable to the
Cooperative banking sector. However, we are glad to state that your Bank through the
efforts of Special Credit Monitoring Cell (SCMC) is undertaking prompt, effective and
continuous monitoring of loan accounts in line with guidelines issued by the Reserve Bank
of India so as to arrest slippages to the NPA category.
One account was restructured under CDR, involving an amount of Rs. 102.15 crore during
FY 2013-14. Total thirty accounts amounting to Rs. 277.06 crore are under restructured
portfolio as on 31st March, 2014. Out of these, five accounts constituting an
amount of Rs. 195.20 crore are under Corporate Debt Restructuring. Remaining accounts were
restructured under Special Regulatory Guidelines issued by Reserve Bank of India in FY
2008-09.
Sale of NPAs to Asset Reconstruction Company (ARC):
The sale of assets to Asset Reconstruction Company was not available to Scheduled Urban
Co-operative Banks till 27th March, 2014. Your Bank persuaded the Reserve Bank
of India to grant permission to Urban Co-operative Banks to sell the distressed assets.
With your Bank’s rigorous follow-up, the Reserve Bank of India issued a circular to
that effect on 28th March, 2014. As per the said circular ref no. UBD. BPD
(PCB). Cir. No. 53/13.05.000/2013-14, the Reserve Bank of India has permitted Urban
Co-operative Banks registered under the Multi-State Co-operative Societies Act, 2002 to
invest in Security Receipts issued by Securitisation Company/Reconstruction
Company (SC/RC) in respect of the financial assets sold by them to the Bank. In view of
the same, your Bank proactively invited offers from ARCs for sale of assets and approved
the ARCs on the basis of their market performance in recovery of NPAs.
The Bank has sold NPAs worth Rs. 445.60 crore to M/s Phoenix ARC during FY 2013-14 and
received Securitisation Receipts for the same. A noteworthy feature of this sale is that
accounts have been sold at book value i.e. at no loss to the Bank.
Forex Business:
Your Bank has a RBI licence for foreign exchange business since 1979 and since then the
Bank caters to the foreign exchange requirements of its customers through well-established
Forex Centres and Overseas Branch.
The year under review witnessed remarkable growth of 28.37 per cent in foreign exchange
merchant turnover, to reach the level of Rs. 14,521.40 crore as against Rs. 11,311.95
crore in the previous year. The foreign exchange interbank turnover increased to Rs.
43,992.11 crore as against Rs. 31,345.97 crore for the preceding year. Export finance of
the Bank also increased by 25.27 per cent, to achieve the level of Rs. 686.75 crore as
against Rs. 548.21 crore in the previous year. The growth in foreign exchange business of
your Bank is noteworthy against the backdrop of overall slowdown in the economy. On the
income side, your Bank has generated net profit of Rs. 45.92 crore from foreign exchange
operations, with more than 40 per cent fee-based earnings. The diamond business in South
Mumbai has shifted to Bharat Diamond Bourse at Bandra Kurla Complex (BKC) in recent times.
In order to cater to the business exclusively so as to provide operational convenience to
these customers, your Bank decided to open a Branch with forex centre at BKC. This branch
is well equipped with manpower having foreign exchange expertise in diamond business.
Besides, during the review year, the Bank has started selling VISA Travel Currency Cards
of Axis Bank to its customers.
Your Bank also handles foreign exchange business of customers of select co-operative
banks which do not have RBI licence to deal in foreign exchange, under lines of credit
sanctioned to them. During the year, lines of credit for foreign exchange business
extended to eighteen co-operative banks were renewed at an aggregate level of Rs. 128
crore.
SBU-TREASURY OPERATIONS:
As you are aware, SBU-Treasury of your Bank primarily entails maintenance of the
statutory obligations of maintenance of Cash Reserve Ratio (CRR) and Statutory Liquidity
Ratio (SLR). With introduction of financial sector reforms and deregulation of interest
rates, the role of Treasury has changed significantly. Interest rates came to be
determined by market forces and Treasury unit started to be looked upon as a profit
centre.
This year, in particular, was an extremely complex year for Treasury as the Government
security yields saw marked volatility throughout the year. The yields opened for the year
at 7.99 per cent. Fear of tapering by the US Federal Reserve, capital outflows and
exchange rate pressures amid unsustainable
Current Account Deficit (CAD) prompted the Reserve
Bank of India to undertake exceptional measures for tightening the Monetary Policy. At
this point in time i.e. during August 2013, the yields touched 9.45 per cent. As normalcy
got restored in the currency market, the Reserve Bank of India reversed the exceptional
liquidity and monetary measures. To contain the spiralling inflation, Reserve Bank of
India hiked the
Policy repo rate by 75 bps to 8 per cent on three occasions during the year. At the end
of the financial year, the yields closed at 8.80 per cent.
In spite of the adverse situation, SBU-Treasury increased the scale of trading
activities and has contributed Rs. 1 16 crore through trading profits during the year.
SBU-Treasury has thus emerged as a major contributor to the overall net profit of the
Bank, which stood at Rs. 147.09 crore for FY 2013-14.
The interest income yield from Treasury operations has also been improved from 7.94
percent in FY 2012-13 to 8.12 percent in FY 2013-14.
17. CAPITAL ADEQUACY RATIO – CRAR
In spite of pressure on margins due to severe competition, your Bank was able to
improve the Capital Adequacy Ratio from 11.15 per cent as on 31st March, 2013
to 12.11 per cent as on 31st March, 2014.
Table No. 22:
Capital Adequacy Ratio - CRAR:
(Rs. in crore)
| Particulars |
31-03-2014 |
31-03-2013 |
| Capital-Tier I |
|
|
| a. Share Capital |
166.91 |
126.13 |
| b. Reserves and Surplus |
|
|
| Statutory Reserve |
486.49 |
454.83 |
| Other Reserves |
702.50 |
700.68 |
| Profit and Loss Account |
117.71 |
86.10 |
| Sub-Total |
1,306.70 |
1,241.61 |
| Gross Tier I Capital (a+b) |
1,473.61 |
1,367.74 |
| Less: Intangible assets & losses |
300.05 |
279.90 |
| Tier I Capital (A) |
1,173.56 |
1,087.84 |
| Capital-Tier II |
|
|
| Revaluation Reserve |
132.29 |
135.96 |
| General Provisions |
87.07 |
79.08 |
| Investment Fluctuation |
97.35 |
80.00 |
| Reserve |
|
|
| Subordinated Debts |
290.00 |
120.00 |
| Tier II Capital (B) |
606.71 |
415.04 |
| Total Capital Funds (A+B) |
1,780.27 |
1,502.88 |
| Risk Assets |
|
|
| i. Funded Risk Assets |
13,582.29 |
12,659.84 |
| ii. Non-funded Risk Assets |
578.46 |
425.87 |
| iii. Risk Weighted Assets |
535.04 |
388.13 |
| for market risk |
|
|
| Total Risk Weighted |
14,695.79 |
13,473.84 |
| Assets (i+ii+iii) |
|
|
| Capital Adequacy Ratio % |
12.11 |
11.15 |
18. APPROPRIATIONS
We propose the following appropriations from
Net Profit for the Financial Year 2013-14:
Table No. 23:
(Rs. in lac)
| Particulars |
2013-14 |
2012-13 |
| Transfer to Reserve Fund (25%) |
3,677.34 |
2,802.28 |
| Contingency Reserve (10%) |
1,470.94 |
1,120.91 |
| Provision for payment of |
147.09 |
112.09 |
| contribution to Education |
|
|
| Fund of N.C.U.I.(1%) |
|
|
| Proposed Dividend on |
87.96 |
0.00 |
| PNCPS @10.50% |
|
|
| Proposed Dividend @10% |
1,292.80 |
1,213.10 |
| Provision for Ex-gratia |
1,490.00 |
1,350.45 |
| payment to Employees @10% |
|
|
| Building Fund |
0.00 |
0.00 |
| Members' Welfare Fund |
50.00 |
50.00 |
| Provision for Staff Welfare |
10.00 |
10.00 |
| Provision for Public, |
147.09 |
112.09 |
| Charitable & Co-operative |
|
|
| Purposes (1%) |
|
|
| Investment Fluctuation Reserve |
2,000.00 |
1,735.00 |
| Special Reserve |
1,000.00 |
1,000.00 |
| General Reserve |
3,335.00 |
1,700.00 |
| Balance to be carried forward |
81.05 |
79.91 |
| to the next year |
|
|
| Total |
14,789.28 |
11,285.83 |
Dividend:
Your Board of Directors recommends a dividend of 10 per cent for the year ended 31st
March, 2014 on equity shares and dividend of 10.5 per cent on Perpetual Non-Cumulative
Preference Shares.
Members Welfare Fund:
Your Board of Directors recommends contribution of
Rs. 50 lakh towards this fund. After this accretion, the total amount in this fund will
be Rs. 798.50 lakh. During the year, 989 members availed of reimbursement of the medical
expenses and expenses for medical check-up facilities. Fifty-three awards were granted to
meritorious children of members.
Ex-gratia to Employees:
We propose that a 10 per cent ex-gratia be granted to our employees for the financial
year ending 31st March, 2014.
Provision for Public, Charitable and Co-operative Purposes:
As permitted under RBI Circular No. UBD.(PCB)/ BPD/Cir/43 dated 11th April, 2005, your
Board recommends an appropriation of one per cent of the net profit i.e. Rs. 147.09 lakh
for public, charitable and co-operative purposes.
Special Reserve:
In accordance with Section 36(1)(viii) of the Income Tax Act, 1961, Urban Co-operative
Banks are eligible for a deduction in respect of profits earned from eligible businesses
e.g. profits earned from loans and advances granted to industries, infrastructure,
agriculture and housing sectors. Twenty per cent of such profits transferred to a Special
Reserve will be eligible for deduction from taxable income. Your Board, therefore,
recommends an amount of Rs. 1,000 lakh to be appropriated out of profits derived from the
said eligible businesses towards Special Reserve.
19. AMENDMENTS TO BANK’S BYE-LAWS
(1) Amendment to Bye-law No. 6: Admission of new member to the Bank:
Addition of clause for 'admission of Non Resident Indian to the membership of the Bank
for availing loans as permitted by the Reserve Bank of India'. The text of amendment of
Bye-law No. 6 will be circulated in the Annual General Meeting.
(2) Amendment to Bye-law No. 25: Investment in various instruments as permitted
by the Reserve Bank of India.
Addition of the words ‘permitted by the Reserve Bank of India’ after the word
‘other instruments’ appearing in the existing Bye-law. The text of amendment of
Bye-law No. 25 will be circulated in the Annual General Meeting.
20. CORPORATE SOCIAL RESPONSIBILITY
Ideal Shareholder:
As you are aware, your Bank has been felicitating one selected shareholder every year
since FY 2009-10 as ‘Adarsh Sabhasad’. This year, the ‘Ideal
Shareholder’ was bestowed on Shri Raghunandan Kamath, Founder - Chairman of Natural
Icecream. Shri Raghunandan Kamath was born in the year 1954 at Mullky, in the South Canara
District of Karnataka. Passionate about fruits since childhood, he created
Natural Icecream in 1984 in a humble 300 sq feet store in Juhu in Mumbai. In no time,
‘Natural’ carved a niche for itself as an authentic, artisan icecream made from
quality natural ingredients. Started with a seed capital of Rs. 4 lakh, with a turnover of
Rs. 1 lakh in the first year of operations, Natural Icecream today has a turnover of Rs.
65 crore through 115 outlets across the country.
Badalta Maharashtra:
Your Bank believes in staying connected with the needs and aspirations of the society
at large and has always been involved in various social causes. During FY 2013-14, your
Bank in association with leading Marathi daily ‘Loksatta’ initiated a unique
campaign to bring about a positive and constructive change in the current situation of
Maharashtra. The sole objective of this campaign was fostering all-round progress of the
State by bringing forth solutions to at least some of the difficulties faced by the State.
Under this project, it was proposed that various social issues related to education,
urbanization, industrialization, etc. would be discussed and analyzed by eminent
specialists at seminars held once in a quarter. The first such seminar was inaugurated on
2nd August, 2013 by the Chairman of your Bank. Four such seminars have been
held till date and significant social issues and their proposed solutions were deliberated
at length. The proposed solutions are also being documented as a booklet.
21. OTHER DEVELOPMENTS
Appointment of Padmashri Madhu Mangesh Karnik as ‘Cultural Advisor’ of the
Bank:
On 5th July, 2013, your Bank appointed noted Marathi litterateur, Padmashri
Madhu Mangesh Karnik as ‘Cultural Advisor’ of your Bank. As you know, your Bank
is heading towards completing its centenary – hundred years of its existence –
in September 2018. The Board has entrusted the responsibility of writing the hundred year
history of your Bank to Padmashri
Madhu Mangesh Karnik. Earlier, the seventy-five year history of your Bank was also
written by him as ‘Amrut Saraswat’.
Customer Relation Programmes:
On the eve of completion of eight years of the first merger, various branches of the
erstwhile Maratha Mandir Co-op. Bank Ltd. (MMCB) held Customer Service Meets. These
branches include Vikhroli (E),
Barve Nagar, Jogeshwari (E), Kandivali (GIE), Antop Hill, Borivali (E), Thakurdwar,
Nerul and Dombivali (W). Customers who attended these meets put forth their suggestions
and also expressed great satisfaction over the services rendered to them by the Bank.
22. CORPORATE GOVERNANCE
Composition of your Bank’s Board:
The composition of the Board is governed by the Multi-State Co-operative Societies Act,
2002 and the Bye-laws of the Bank. As on 31st March, 2014, there are fifteen
Directors on your Board in addition to the Managing Director. The Board includes eminent
persons with professional expertise and experience in Banking, Finance and other fields.
As against the stipulation of RBI of having at least one Chartered Accountant and one
Banker on the Board of Urban Co-operative Banks, your Bank has three Chartered Accountants
and five Bankers as its Directors as on 31st March, 2014. During the period
under Report, twenty-six Board meetings were held.
Resignation of Shri Neelkanth R. Warerkar from the Board:
Shri Neelkanth R. Warerkar has been a valuable contributor to your Bank for more than
sixty-five years. He joined the services of the Bank in the year 1949 as an
‘Assistant Accountant’ and rose to the then highest position of General Manager
and Secretary in the Bank. Post his retirement, he continued to serve the Bank as a
Director from 1987 onwards, Vice-Chairman in 1992 and Chairman in 1996. During the year
under review, he has resigned from the Board, after completion of ninety years of age. His
resignation was accepted by the Board of Directors on 6th December, 2013.
Co-option of Shri Gautam E. Thakur on the Board:
On 6th December, 2013, Shri Gautam Ekanath Thakur was co-opted as a Director
on the Board of Directors of your Bank. Shri Gautam Ekanath Thakur holds a B.E. (Civil
Engineering) qualification from
University of Pune. His vast and rich experience in construction, training and finance
will prove valuable in taking the Bank to greater heights.
Election of Shri Satish B. Samant as Chairman of your Bank:
Following the sad demise of your Bank’s Chairman, Shri Ekanath K. Thakur on 7th
August, 2014, the Board of Directors of the Bank at its meeting held on 14th August, 2014
elected Shri Satish B. Samant, Director of your Bank as Chairman of your Bank. Shri Satish
B. Samant is a Chartered Accountant and holds Masters degree in Law. He started his career
in 1977 with SICOM, a leading Financial Institution and was thereafter Financial Advisor
in a Public Sector Undertaking. He has a long and rich experience in finance and industry
after working in reputed corporate entities like Reliance Industries Ltd., Maxwell Group
and is presently the Chief Executive Officer of Coatings Specialties India Ltd., which is
a part of the Asian Paints Group.
Loans to Directors:
No Director has borrowed any money from your Bank. This has been a healthy tradition in
your Bank and has been enshrined in Bye-law No. 55 and Bye-law No. 63 (c) many years ago.
Working of Committees:
The Board has constituted Committees which include Directors and higher management
executives to take informed decisions in the best interests of the Bank. As on 31st
March, 2014, three Committees of the Board were in place viz. the Executive and HRD
Committee; the Audit, Accounts and NPA Management Committee; and the Merger Committee. The
various Committees and their scope are as follows:
Executive and HRD Committee:
The Executive and HRD Committee looks into HR and training issues, formulation and
implementation of action plan for sustaining/improving the quality of the Bank’s
Human Resources and welfare measures for employees at all levels. It also takes decisions
on all operational matters excepting sanction of loans/advances, decides upon branch
expansion, acquisition of premises on purchase or lease for branches/offices, approves
expenditures and costs in relation thereto and also considers any matter which requires
urgent consideration. During the year under review, eight meetings of the Committee were
held.
Audit, Accounts and NPA Management Committee:
The Committee provides direction, oversees the total audit function of the Bank,
follows up on the statutory/external/concurrent audit of the Bank and ensures strict
adherence to RBI’s guidelines and directives from time to time. Thirteen meetings of
the Committee were held during the year. It deliberates on the progress of recoveries of
overdues and NPAs, and issues directions as necessary.
Merger Committee:
The Merger Committee has been constituted to take appropriate decisions on probable
mergers of weaker/loss-making co-operative banks as also to oversee the affairs and
provide directions to SBU-Gandhakosh, an SBU formed to consolidate the business of the
erstwhile merged banks. During the year under review, three meetings of the Merger
Committee were held.
23. MEMBERSHIP
1,75,242 members of your Bank hold fifty and above fully-paid equity shares. The number
of nominal members of the Bank stood at 5,97,958 as on 31st March, 2014.
24. APPOINTMENT OF STATUTORY AUDITORS
Your Board of Directors recommends the appointment of M/s Kulkarni & Khanolkar,
Chartered Accountants, 13-14, Bell Building, Sir P.M.Road, Fort, Mumbai - 400 001, as the
Statutory Auditors of the Bank for the FY 2014-15.
25. DISCLOSURES
As per the disclosure norms stipulated by the RBI, we hereby declare that insurance
premium to DICGC has been paid upto 31st March, 2014 and there are no arrears
payable to DICGC.
26. SARASWAT INFOTECH LIMITED (SIL)
SIL, the wholly-owned subsidiary of your Bank, completed its eighth financial year on
31st March, 2014. We enclose herewith a Directors’ Report along with
Audited Profit and Loss Account of the Company for the period ended 31st
March, 2014 and Balance Sheet as on 31st March, 2014.
Further to reinstatement of IT department of your Bank, as mentioned in detail in last
year’s Annual Report, your Bank once again requested the Reserve Bank of India to
allow to continue with the operation of Bank’s wholly-owned subsidiary, Saraswat
Infotech Ltd. (SIL). However, the Reserve Bank of India vide its letter
No:UBD.MRO.BSS.1/9486/12.07.228/2013-14 dated 9th June, 2014 has informed that
your Bank’s request cannot be acceded to.
It was decided to take over the assets and liabilities of SIL for slump consideration
as decided by the Board of Directors of your Bank and the Board of Directors of SIL in
consultation with the Auditors of both the parties. The business takeover agreement was
executed by The Saraswat Co-op. Bank Ltd. and SIL on 28th March, 2014. As per
this agreement, assets which were owned by SIL from the Bank have been transferred to the
Bank for the consideration of Rs. 19.37 crore.
SIL still continues to provide services for managing the data centre and network of
your Bank and would also provide new technology-related services.
27. OBITUARY
Shri Ekanath K. Thakur, Chairman of your Bank passed away on 7th August,
2014.
Shri Thakur did his B.A. (Hons) from S. P. College, Pune in Maharashtra State. While
doing M.A., he was English-History scholar of the Pune University. During his M.A. studies
in 1966, he appeared for the All India Class I Officer - Probationary Officer examination
of State Bank of India and qualified with distinction among thousands of graduates and
postgraduates, joined State Bank of India and worked there in many capacities. While
serving the Bank, he was the All India President of the State Bank
Officers’ Federation and led thousands of officers of that Bank working in
thousands of branches and the seven subsidiary Banks of State Bank of India. After
nationalisation of the Banks in July 1969, Shri Thakur along with a few others, took
initiative in forming the All India Confederation of all Bank Officers in this country. He
was its founder Vice-
President and later, he became its All India President representing nearly two lakh
Bank Officers in India.
In 1973, he was elected as the National Secretary General of All India Coordination
Committee of Officers Organisations (AICCOO) representing six lakh fifty thousand officers
and executives working in all major industries such as Banking, Insurance, Aviation, Coal,
Steel, Mines, Fertilizer, Pharmaceuticals, Plantations, etc. both in public and private
sector.
In 1977, the Morarji Desai government nominated Shri Thakur to the World Conference
organized by International Labour Organization (ILO) at Geneva, Switzerland, as the single
representative from
India, representing nearly thirty lakh officers. In this conference, Shri Thakur was
elected unopposed as the Vice President of the World Group of Officers.
National School of Banking was founded by him thirty-three years ago. It has branches
across India and has trained nearly three lakh fifty thousand students so far. Eighty five
thousand of his students have secured jobs in various institutions.
In 2001, he was appointed Director on the Central Board of State Bank of India, the
largest banking group having fourteen thousand branches and an asset base of over ten lakh
crore rupees.
Shri Thakur was a Member of Parliament, Rajya Sabha and was elected unopposed from the
State of Maharashtra and completed a full term from 2002 to 2008. He was a Member of the
Parliamentary Standing Committee on Information Technology and Parliamentary Standing
Committee on Defence and Member of Parliamentary Consultative Committee on Finance, Member
of Parliamentary Consultative Committee on Commerce and Member of Parliamentary Standing
Committee on Food Processing Industry. He was a Member of the Indian Parliamentary
Association. He was the President of Maharashtra Chamber of Commerce, Industry and
Agriculture from 2004 to 2006. He was the Hon. Secretary and Chief Executive Officer of
Indian
Education Society, one of the largest educational institutions in Mumbai, having under
its canopy 75 educational institutions. Shri Thakur was associated with the Saraswat
Cooperative Bank Ltd. for over twenty years and led the Bank for the last fourteen years.
From 1918 to 2001 i.e. eighty-three years, the Bank’s total business was Rs. 4,600
crore. Under his leadership in the last fourteen years, the Bank surpassed the business
level of Rs. 39,000 crore. He personally initiated and introduced various changes in your
Bank, with the support of the Board of Directors and employees at all levels during these
past fourteen eventful years.
These were the changes that are responsible for total internal transformation and
vastly increased external visibility of your Bank. All these initiatives changed the old
status-quoist culture of the Bank to that of a modern-day banking solutions provider. Some
of his visionary initiatives are: Formation of CENMAC
Initiation and implementation of Dr. Adarkar Missions Formation of various Strategic
Business Units Appointment of Brand Ambassador Initiation and completion of Branding
exercise for the Bank Implementation of Ashwamedh Project, etc The ambitious Corporate
Center Project (Saraswat Bank Bhavan) was also completed during his tenure.
Awards received by him from NGOs and social organisations include –
(1) Samaj Ratna Award
(2) Dr. Babasaheb Ambedkar Award
(3) Sane Guruji Award
(4) Cancer Vijeta Award
(5) Cancer Survivor Award
(6) Rotary International’s ‘Lifetime Achievement Award’ at the hands of
Rotary International Club’s Dr. Mark Maloney and in the presence of Hon’ble Shri
Prafulji Patel, then Union Minister for Civil Aviation in the Rotary International’s
District 3140 Annual Conference held at Hotel Leela Kempinski, in the presence of
thousands of Rotarians
(7) The ‘Excellence in Business Communication Award’ given by the Association
of Business Communicators of India (ABCI)
(8) Udyog Ratna Award given by Manohar Pratishthan
(9) The national-level W.G. Alias Annasaheb Chirmule Charitable Trust conferred the
Annasaheb Chirmule Award on Shri Thakur in recognition of his outstanding work in the
field of banking and finance
(10) In October, 2011 the All India Saraswat Cultural Organisation and the All India
Saraswat Foundation conferred the prestigious ‘Saraswat Ratna Award’ on Shri
Thakur (11) In March 2012, he was honoured with the Outstanding Konkani of the Year-2012
by the TMA Pai Foundation, Manipal.
(12) In May, 2012 he was honoured with the Maxell Lifetime Achievement Award at the
hands of Shri Prithviraj Chavan, Hon’ble Chief Minister of Maharashtra by the Maxell
Foundation, Maharashtra
(13) In July, 2013 he was honoured with the Sangli Vaibhav Credit Society’s
Sahakar Gaurav Puraskar – from amongst 2,29,000 co-operative institutions in
Maharashtra – at the hands of Hon’ble Chief Minister of Maharashtra, Shri
Prithviraj Chavan
(14) In August, 2013 he was honoured with the MACCIA – IBN Lokmat Lifetime
Achievement Award at the hands of Hon’ble Union Minister for Agriculture, Shri Sharad
Pawar
(15) In September, 2013 he was honoured with the Lokmanya Matrubhoomi Puraskar of Rs.
5,51,000/- awarded by the Lokmanya Credit Society, Belgaum at the hands of Hon’ble
Chief Minister of Goa, Shri Manohar Parrikar.
The Board of Directors deeply mourns the sad demise of our beloved Chairman - an astute
Banker, National Level Officers’ Unionist, Educationist, Social Worker and Maker of
Modern Saraswat Bank. We also regret to record that two of our Directors passed away
during the year. Shri Madhav K. Mantri, Senior Director and former Chairman of your Bank
passed away on 23rd May, 2014. Shri Mantri, a well-known test cricketer and
former President of Mumbai Cricket Association, was on the Board of Directors of your Bank
since 1965. From December 1980 to November 1983, he was Vice-Chairman and from November
1983 to December 1986, he was Chairman of your Bank. In 2008, he was once again
respectfully invited on your Bank’s Board.
Shri Jagdish Pai K.L, Director of your Bank passed away on 1st December,
2013. He was elected unopposed on 10th August, 2011 as a Director on the Board
of your Bank. He could not however join the Board as he was still within the ‘cooling
period’ prescribed by the Government of India as he was a former Government appointee
as an Executive Director of Canara Bank. Shri Pai had been co-opted as a Director of your
Bank on 27th September, 2012. The Board gratefully recalls the valuable
contribution of these two Directors to the Bank. The Board of Directors offers its deepest
condolences to the families of the bereaved. The Board of Directors also deeply mourns the
passing away of several shareholders, former employees and employees of the Bank during
the year under Report.
We pray that the departed souls rest in peace and may the Almighty grant fortitude and
strength to their family members to bear the irreparable loss of their dear ones.
28. GRATITUDE
Your Board wishes to place on record the appreciation of the support which the Board of
Directors and the Bank have received from all our shareholders and other stakeholders and
thank them profusely for the confidence and trust that they have reposed in us and the
Bank.
Your Board would also like to place on record the deep sense of gratitude to the
authorities of the Reserve Bank of India, the Office of the Central Registrar of
Co-operative Societies, New Delhi, the Office of the Commissioner for Co-operation and
Registrar of Cooperative Societies, Maharashtra State, Pune for their valuable guidance,
support and co-operation. The Board is also grateful to the Registrars of Cooperative
Societies of the States of Madhya Pradesh, Karnataka, Goa, Delhi and Gujarat.
The Board of Directors places on record its appreciation to all sections of employees
for their loyalty, dedication and wholehearted involvement in achieving the goals and
missions of the Bank, including providing excellent service to all our customers.
Your Board wishes to assure all shareholders that we will continue to strive towards
attaining new heights through continued commitment to achieve and excel the ambitious
organizational goals that we have set in the form of Dr. Adarkar Missions.
For and on behalf of the Board
Satish Balkrishna Samant
Chairman
Mumbai, : 14th August, 2014
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