It gives me great pleasure to present the Annual Report of the Bank
 together with audited financial statement for the year ended
 31.03.2011.
 
 The Bank had to operate in an economic condition dominated by
 persistent high level of domestic inflation, rising interest rates,
 rising international commodity prices and slowdown in growth of
 domestic industrial production. In this economic backdrop, the Bank
 showed consistent growth in various business parameters during the year
 with your whole-hearted support, patronage of our customers and
 enthusiastic participation of all staff members.
 
 I am presenting herewith highlights of performance of the Bank during
 FY11.
 
 1.  Total business increased to Rs. 1,14,332 crore as on 31.03.2011
 from Rs. 1,04,230 crore recording a growth of 9.69 per cent.
 
 2.  The Bank achieved a steady business growth during the year. Average
 business increased by 15.15 per cent.
 
 3.  Current account and savings account (CASA) deposits increased to
 Rs. 27,032 crore as of 31.03.2011 from Rs. 23,364 crore a year ago,
 registering a growth of 15.70 per cent. Share of CASA deposits in total
 deposits of the Bank improved to 40.44 per cent as on 31.03.2011, as
 against 36.91 per cent as on 31.03.2010.
 
 4.  Due to improved share of CASA deposits and shedding of high cost
 deposits, cost of deposits improved to 5.38 per cent for the year ended
 31.03.2011 from 5.90 per cent for year ended 31.03.2010.
 
 5.  Gross advances registered a growth of 16.03 per cent to reach the
 level of Rs. 47,487 crore as of 31.03.2011 from Rs. 40,926 crore as of
 31.03.2010.
 
 6.  During FY11, yield on advances increased to 9.69 per cent from 9.55
 per cent in the previous year.
 
 7.  There was substantial improvement in asset quality. Gross
 non-performing assets (NPAs) declined from Rs. 1,210 crore (2.96 per
 cent of advances) as on 31.03.2010 to Rs. 1,174 crore (2.47 per cent)
 as on 31.03.2011. Net NPAs declined from Rs. 662 crore (1.64 per cent)
 to Rs. 619 crore (1.32 per cent) during the period.
 
 8.  The net interest income (NII) was Rs. 1,968 crore for the year
 ended 31.03.2011 as against Rs. 1,296 crore for the previous year
 showing an increase of 51.85 per cent.
 
 9.  Net interest margin (NIM) of the Bank improved to 2.80 per cent for
 FY11 from 2.05 per cent for FY10.
 
 10.  Operating profit was increased to Rs. 855 crore for year ended
 31.03.2011 from Rs. 815 crore for year ended 31.03.2010 (y-o-y growth
 of 4.97 per cent). The slower growth recorded was due to provisions
 made towards employee benefits under AS-15 and additional provision of
 5 per cent on standard advances over the regulatory minimum provision
 of 10 per cent.
 
 11.  But for the provisions made for the employee benefits under AS 15,
 the operating profit would have been Rs. 1,331 crore for FY11 showing
 y-o-y growth of 53.47 per cent.
 
 12.  Net profit was Rs. 330.39 crore for the year as compared to Rs.
 439.57 crore of previous year.
 
 13.  During the year, the Bank has received capital support from the
 Government of India in the form of perpetual non-cumulative preference
 shares (PNCPS) to the extent of Rs. 588 crore and equity share capital
 to the extent of Rs. 352 crore.
 
 14.  Capital Adequacy Ratio under Basel II norms improved to 13.35 per
 cent as on 31.03.2011 as against 12.78 per cent as on 31.03.2010.
 
 15.  During 2010-11, the Bank took following major initiatives for
 faster growth in business and further improve the efficiency.
 
 i. For result oriented active participation of every staff member of
 the Bank in business development, “Maha Chetna initiative was launched
 in October 2010. Besides taking number of initiatives for staff
 welfare, active cooperation from all the trade unions was ensured for
 accelerated business growth through business development meetings with
 them.
 
 ii.  83 new branches were opened taking the branch network to 1536.
 
 iii. 72 new ATMs were installed. Total number of ATMs stood at 417 as
 on 31.03.2011 compared to 345 as on 31.03.2010.
 
 iv. New retail loan products, “Maha Jewel Loan scheme and “Maha Top-
 up Loan scheme, were introduced.
 
 v.  A new current deposit product, “Diamond was launched which offers
 substantial concessions in service charges to the account holder/s.
 
 vi.  For speedy and quality processing of retail loans, 12 Retail Asset
 branches were opened taking the total number of Retail Asset Branches
 to 15.  
 
 vii.  To ensure faster and quality processing of retail loans at the
 regional offices, 18 retail asset processing cells were also opened.
 
 viii. For better monitoring of asset quality and swift action on
 non-performing assets, 10 Micro Asset Recovery Centres were established
 in addition to existing 5 Asset Recovery Branches.
 
 ix. Asset classification through the CBS system has been started which
 eliminates any manual intervention.
 
 x. Separate verticals have been created in Central Office of the Bank
 to ensure focused attention for increasing advances to Mid corporates
 and for increasing non-interest income through Alternative Channels of
 Business.
 
 xi. Under financial inclusion initiative – “Swabhiman programme – the
 Bank covered 484 villages with ICT based technology through 421
 Customer Service Providers (CSPs). Under the programme, 50,478 no-frill
 accounts were opened.
 
 xii. Two branches were opened at financial inclusion villages, Zari in
 Chandrapur district and Asangaon in Thane district.
 
 xiii. Two exclusive Self Help Group (SHG) branches at Pune and Mumbai
 were opened for catering to the SHGs, including financial counseling.
 
 xiv. For the convenience of tech savvy, High Networth and new
 generation customers, three e-Lounges were opened, one each in Pune,
 Mumbai and Delhi. The lounges are equipped with internet banking
 terminals, self servicing passbook printer, ATM, electronic cheque
 deposit machine and internet facility for use of customers.
 
 xv. “Maha Mitra teams have been formed in all regional offices to
 accelerate marketing efforts of the Region for increasing the core
 business.
 
 xvi. The Bank’s Anniversary Day on 8.2.2011 was celebrated as
 Customers’ Day and interaction with customers was held across the
 country through video conferencing.
 
 xvii. The Bank instituted Rolling Trophy in the name of Bharat Ratna
 Dr.  Babasaheb Ambedkar for the best performing branch in disbursement
 and recovery of advances to SC/ST borrowers and first annual trophy was
 presented at the hands of Executive Director of RBI on 14.04.2011.
 
 xviii. The Bank has been interacting with press and media through press
 meets and analyst meets for sharing performance highlights of the Bank
 in a transparent manner.
 
 All these initiatives taken during 2010-11 have started yielding
 favorable results now.
 
 The net profit earned in the year after meeting the substantial
 provision in accordance with AS-15 for employee benefit was less than
 the net profit of previous year. However, considering the strong
 fundamentals of the Bank, the Board of Directors has recommended a
 dividend of 20% for the year 2010-11, in recognition of your
 expectations and sentiments. I request you to approve the same.
 
 I thank you for your support and patronage and solicit the same in
 future.
 
 With warm regards, 
 
 Yours sincerely,
 
 (Anup S. Bhattacharya)
 
 April 30, 2011