The Directors have pleasure in presenting the Annual Report of the
 Bank with the audited Balance Sheet, Profit & Loss Account and the
 Report on Business and Operations for the year ended March 31, 2011.
 
 2.14 Income, Expenditure and Profitability
 
 The total income of the Bank grew to Rs. 6,093.95 crore from Rs.
 5,326.80 crore depicting revenue growth of 14.40 per cent during the
 year. The detailed income/ expenditure components are as under:
 
                                                  (Rs. in crore)
 
                                                          Variation 
 Particulars              2009-10        2010-11         (per cent)
 
 Interest / discount on
 advances / bills         3369.63        4006.14             18.89
 
 Income on investments    1297.90        1520.30             17.13
 
 Interest on interbank 
 lending & other 
 Interest                   68.03          36.65            -46.13
 
 Total interest income    4735.56        5563.09             17.47
  
 Non-interest income       591.24         530.86            -10.21
 
 Total Income             5326.80        6093.95             14.40
 
 Interest on deposits     3183.06        3282.75              3.13
 
 
 Interest on borrowings    256.25         311.94             21.73
 
 Interest expenditure     3439.31        3594.69              4.52
 
 Staff expenses 
 (INCLUDING Provision 
 as per AS-15
 (Revised)                 655.50        1157.08             76.52
 
 Staff expenses 
 (EXCLUDING
 Provision as per 
 AS-15
 (Revised)                 603.20         681.39             12.96
 
 Non staff expenses        417.45         487.14             16.69
 
 Total Non interest 
 expenses                 1072.95        1644.22             53.24
 
 Total Operating 
 Expenses                 4512.26        5238.91             16.10
 
 Operating Profit          814.55         855.03              4.97
 
 Provisions and 
 Contingencies             374.97         524.64             39.91
 
 Net Profit                439.58         330.39            -24.84
 
 
 
 2.15 Financial ratios
 
 Particulars                         2009-10              2010-11
 
 EPS (Rs. )                            10.21                 6.86
 
 Cost to Income Ratio 
 (per cent)                            56.85                65.79
 
 Return on assets (per cent)            0.70                 0.47
 
 Return on equity (per cent)           20.79                15.58
 
 Book Value per Share (Rs. )           49.12                49.18
 
 Profit per Branch ( Rs. In lakh)      30.25                21.51
 
 Profit per Employee (Rs. In lakh)      3.21                 2.38
 
 Business per Branch (Rs. In crore)    71.73                74.43
 
 Business per Employee (Rs. In crore)   7.62                 8.25
 
 Interest income as per cent to 
 Average working funds                 7.50                  7.92
 
 Non Interest income as per cent 
 to average working funds              0.94                  0.76
 
 Interest spread as per cent 
 to average working funds              2.05                  2.80
 
 Operating Profit as per cent 
 to average working Funds              1.29                  1.22
 
 Staff expenses to average 
 working funds                         1.04                  1.65
 
 Staff expenses (excluding 
 Provision as per  AS-15 
 (Revised) to average 
 working funds)                        0.95                  0.97
 
 Dividend (per cent)                  20.00                 20.00
 
 
 
 2.16 Capital from GOI
 
 During the year, the major share holder, Government of India, have
 infused additional capital in the form of perpetual non-cumulative
 preference shares (PNCPS) Rs. 588 crore and equity share capital Rs.
 352 crore.
 
 2.17 Networth
 
 The Bank’s Net worth increased from Rs. 2,114.46 crore as on 31.03.2010
 to Rs. 2,709.24 crore as on 31.03.2011.
 
 2.18 Capital Adequacy Ratio
 
 The Capital Adequacy Ratio stood at 13.35 per cent as on 31.03.2011,
 against the minimum 9 per cent prescribed by RBI in terms of Basel II
 norms. The Tier I capital adequacy ratio stood at 8.02 per cent as
 against RBI’s prescription of 6 per cent.
 
 2.19 Dividend
 
 The Board of Directors has proposed a dividend of 20 per cent for the
 year ended 31.03.2011.
 
 
 3. ORGANISATION AND SUPPORT SYSTEM
 
 3.1 Branch Expansion
 
 During the year, the Bank opened 83 new branches. As on 31.03.2011, the
 total branch network comprised of 1536 branches spread over 24 states
 and 2 union territories. The branch network includes specialized
 branches of foreign exchange, government business, treasury &
 international banking, industrial finance, SME, hi-tech agriculture,
 pension payment, pension processing, retail credit, Self Help Group and
 asset recovery. Area wise classification of branches as on 31.03.2011
 is given in the table below:
 
 Sr. 
 No.  Classification           As on 31.03.2010      As on 31.03.2011
 
 1    Rural                          526                   538
 
 2    Semi-Urban                     266                   293
 
 3    Urban                          281                   301
 
 4    Metropolitan 380 404 
 
      Total                         1453                  1536
 
 
 
 3.2 Human Resources Management
 
 The Bank has put in place a comprehensive HRM Policy Document that
 provides road map for acquiring appropriate & need based Human
 Resources, its development through training, job enrichment, reward and
 recognition for better performance, career progression, welfare and
 retention.
 
 As part of Platinum Jubilee Celebration, a memento in the form of Gold
 Coin was presented to all eligible employees who were in service of the
 Bank as on 16.09.2009.
 
 During the year, Bank has for the first time taken up recruitment of
 1000 Clerks through direct interview process. Internal promotion
 process for all cadres was also carried out. During the year,
 promotions have taken place from Scale I to Scale VII and total 583
 Officers were promoted in the process besides 400 Clerks getting
 promoted to Officer Cadre. Process of recruitment of 392 Probationary
 Officers is completed. Considering the requirement of specialized cadre
 of staff and ever changing CBS technology for improving operational
 capabilities and specialized customer service, 96 MBA qualified
 Officers, 25 Chartered Accountants, 32 Agriculture Officers, and 38
 Agri. Business Facilitators were recruited.
 
 In the year 2010-11, 732 employees ceased to be in service on account
 of retirement, resignation etc.
 
 To recognize outstanding performance in Banking activities and to
 motivate others to perform better, membership to Chairman’s Club,
 Better Managed Branch/Region trophy, cash incentives to all staff of
 Best Performing Branches are in vogue.
 
 From this year, a Rolling Trophy in the name of Bharat Ratna Dr.
 Babasaheb Ambedkar to the best performing branch in disbursement and
 recovery of advances to SC/ST borrowers has been instituted.
 
 The Bank has been allocating up to 3 per cent of its net profit towards
 various schemes for the welfare of staff including retired staff. The
 welfare schemes are administered by a Trust.
 
 The Bank has continued to promote and maintain a healthy industrial
 relations climate through fair, transparent and firm handling of
 Industrial related matters.
 
 The Bank has been complying with the reservation policy of Govt. of
 India.  Special Cells at Central Office and all Regional Offices are
 functioning to monitor the implementation of the Reservations Policies
 and to redress grievances of SC/ST/OBC & Physically Challenged
 employees as well as Ex-Servicemen. The Bank has designated two Chief
 Liaison Officers at C.O. and has set up SC/ST Cells at all its Regional
 Offices for the purpose. During the year, periodical meetings were held
 with SC/ST/OBC Employees’ Association at C.O. to discuss implementation
 of reservation policy and other constitutional safeguards and also to
 facilitate involvement in business growth. Similar meetings were also
 held at Regional level.
 
 The number of employees belonging to different categories is as under:
 
 Sr. 
 No   Category 
      of Employees             No. of            Percentage
                               Employees         to total
 
 1.  Women                     3154              22.75
 
 2.  Physically Challenged     192               1.39
 
 3.  SC Employees              2754              19.87
 
 4.  ST Employees              991               7.15
 
 5.  OBC Employees             880               6.35
 
 Rosters have been maintained as per Govt. guidelines and are regularly
 inspected / checked.
 
 Training Activities:
 
 The Bank has a training system which facilitates attention to regular
 periodic assessment of skill gaps at various levels in relation to
 existing and emerging business opportunities. Skill building in Credit,
 Forex, Customer Relationship Management, Marketing of products and
 services, Credit Monitoring and Recovery, Risk Management, Technology
 based Banking Branch Management, complying with statutory, legal and
 policy requirements and preventive vigilance were given special
 attention for imparting training during the year.
 
 The training programmes were also held on thrust areas like financing
 SMEs, retail lending, agriculture finance and rural development.
 
 Presently, the Bank has an apex Training College at Pune with three
 training establishments operating under it, one each at Mumbai, Nagpur
 and Pune.  Information Technology Training Institute and Computer Labs
 at Regional Offices train the Officers and staff to utilize Information
 Technology for effective customer service and efficient back office
 functions.
 
 During the year, all the training establishments of the Bank together
 conducted a total of 330 programs, out of which 108 were for Officers,
 141 for clerks and 81 for sub-staff members. Out of above, 33
 locational trainings were arranged at 28 Regions and trained 592 staff
 members.
 
 A total of 8748 employees participated in various training programmes
 during the year, both in-house and external, comprising of 4294
 officers, 3324 clerks and 1130 sub-staff members of whom 2277 were SC
 employees, 1130 ST employees and 1218 women employees.
 
 The IT Labs across the country in addition to the existing training
 infrastructure cater to the training needs of the end users at the
 branches and Regional Offices. During the year, 1848 staff members were
 imparted training under IT. Out of above, 1374 members of staff were
 trained to handle the Core Banking Solution (CBS) software for
 efficient customer service and back office function.
 
 76 Executives / Senior Officers participated in CRISIL Executive
 training modules on Credit which were held during the year for building
 skills & enhancing efficiency. 12 Executives / Officers were deputed
 abroad for training programmes, participation in seminars,
 International meetings etc.  for facilitating global experience and
 exposure to developments taking place in banking & financial services
 in other countries.
 
 A unique Pre- retirement Counseling programme for the employees
 retiring by March 2011 was arranged at Head Office in November 2010.
 119 employees participated in the programme. Besides lectures on
 investments, health checkup of participants was also arranged.
 
 3.3 Technology Initiatives
 
 The Bank has been leveraging the tools of Information and Communication
 Technology for improving the operational capabilities and for meeting
 the customer needs and aligning with the business requirements of the
 Bank.  The year 2010-2011 has been a fruitful year for the Bank in the
 Information Technology area. During the year, the Bank stabilized the
 Core Banking Solution at all 1536 branches, expanded the ATM network to
 417 and introduced various new products & services.
 
 The implementation of 100 percent CBS in the Regional Rural Bank of the
 Bank, i.e. Maharashtra Gramin Bank was initiated and completed during
 the year.
 
 The Bank has been offering an enticing bouquet of customer-centric IT
 products and services.
 
 3.3.1 Major IT Initiatives & Achievements during 2010-11
 
 •!• Facility of income tax payment through Bank’s ATMs is made
 available.
 
 •!• Facility to view tax credit statement (Form 26AS) through internet
 banking is made available.
 
 •!• Inter bank funds transfer facility is made available to internet
 banking users for directly remitting funds through RTGS/NEFT
 
 •!• Centralized Salary: As part of the various BPR initiatives,
 Centralized Salary Processing was implemented during the year, whereby
 the entire salary processing and related activities have been
 centralized and undertaken from Central Office for the Bank as a Whole.
 Credit of salary, credit to loan accounts, TDS deduction & remittance,
 generation and submission of Form 16, etc are all undertaken centrally
 now.
 
 •!• Financial Inclusion Plan implemented adopting the ICT (Information
 and Communication Tool) model during the year. 484 villages have been
 covered having 1.12 lakh uncovered households, as on 31.03.2011.
 
 •!• e-Lounge: Bank has set up e-lounges, one each at Pune, Mumbai and
 Delhi, for the benefit of High Networth Individuals, tech savvy and
 young generation customers for doing online banking transactions using
 the infrastructure. The lounge is equipped with self servicing passbook
 printer and electronic cheque deposit machine and internet available
 terminals.
 
 3.3.2 Other IT Initiatives
 
 Core Banking Solution (CBS):
 
 All the 1536 branches across the country are covered under Core Banking
 Solution (CBS).
 
 Bank has implemented FOREX module under CBS at all the 34 FEX centers
 and e-Treasury module at TIBD.
 
 Bank has implemented Anti Money Laundering module and is in the process
 of implementing other modules relating to Customer Relation Management,
 Transfer Pricing Mechanism and Asset Liability Management which will
 strengthen decision support system (DSS) of the bank management.
 
 Implementation of Core Banking Solution in Regional Rural Bank (RRB):
 
 As on 31/03/2011, all the 329 branches of Maharashtra Gramin Bank, the
 RRB sponsored by the Bank, have been brought on CBS platform.
 
 Data Centre, Disaster Recovery Site & Near Site:
 
 The Bank has its own Data Center (CMM Level III) at Pune to take care
 of the CBS infrastructure requirements with Disaster Recovery (DR) site
 at Hyderabad. The concept of NEAR SITE as a third site replication
 mechanism has been implemented by the Bank with effect from 13/03/2011.
 This solution was selected by the Bank for its anticipated zero data
 loss over distance, high levels of data availability, high performance,
 accuracy and reliability, while enhancing the IT infrastructure
 efficiency level, reducing costs and enabling operational flexibility.
 We are one of the few public sector banks to implement the concept of
 near site.
 
 ATM Network:
 
 Bank has increased its ATM Network from 345 ATMs at the start of the
 year to 417 ATMs across the country by the end of the year and the
 project is totally outsourced on end to end basis. Bank has
 collaborated with VISA for the Debit Cards. Bank has joined other
 shared ATM Networks like NPCI which enabled access to 50000 plus ATMs
 in the country for our customers.  Eleven ATMs are bio-metric enabled
 for the benefit of illiterate customers and pensioners. Bank is
 planning to expand the ATM network further in the ensuing year to make
 it 750 in all.
 
 Corporate Network:
 
 The bank has established its own Corporate Network - ‘MAHANET’. The
 network was restructured to take care of the latest IT requirements. As
 of date, the connectivity has been established at 1536 branches,
 Regional Offices, Training Colleges / Centres and Central Office.
 
 Applications like CBS, ATM Network, RTGS, DEMAT, INTRANET, Credit Risk
 Rating, Online Tax Collection System (OLTAS), ROSE, etc. are put to use
 through MAHANET.
 
 IP Telephones are extensively used through MAHANET at all the Regional
 offices, CBS branches and Head office.
 
 Bank is continuously making efforts in doing Research & Development on
 latest network technologies such GPRS, 3G , MPLS and VPN etc, for
 providing high availability to the branches.
 
 Real Time Gross Settlement (RTGS) / National Electronic Funds Transfer
 (NEFT):
 
 To give an impetus to the Remittances functionality for convenience of
 the customer as well as inter-bank transactions, Bank has implemented
 RTGS and NEFT at all 1536 branches across the country. Straight Through
 Processing (STP) facility is implemented at all CBS branches whereby
 credit for inward remittances through RTGS / NEFT is given to the
 customer accounts directly by the system. It is proposed to extend the
 same facility to Bank’s sponsored MGB.
 
 Internet Banking / Phone Banking / SMS Banking:
 
 Bank has implemented the Net Banking suite – Internet Banking / Phone
 Banking and SMS / Mobile Banking with online and offline request
 processing and e-payment of Taxes (CBDT, CBEC & VAT). As on 31.03.2011,
 there are more than 1,02,000 customers using Internet Banking, 35,000
 customers using Phone Banking and 49,000 customers using the SMS /
 Mobile Banking facilities.
 
 Information System Security Policy:
 
 Bank has put in place its “Information System Security Policy (ISSP)
 comprising 34 different policy documents. The ISSP along with the
 Procedures are modified keeping in view the changed requirements of the
 Bank and approved by the Board. The Policy document has been circulated
 to all the staff members of the Bank for compliance.
 
 Bank has completed the process of implementation of the ISSP across the
 organization. Compliance verification of the same has been initiated.
 
 Cheque Truncation System (CTS):
 
 Bank successfully implemented Cheque Truncation System (CTS) introduced
 by RBI in the National Capital Region, New Delhi. The process for
 implementing CTS at Chennai has been initiated, as per RBI guidelines.
 Bank is in readiness to participate in the CTS in Chennai as and when
 it is implemented. Bank has migrated all 14 Service Branches to CBS.
 Service branches at Pune and Mumbai have been provided with high-end
 MICR processors.
 
 Video Conferencing:
 
 Bank expanded the Video Conferencing facility through MPLS technology
 to all the Regional Offices for facilitating interactions, imparting
 trainings, conducting interviews and review of performance of Regions
 by the Top Management of the Bank. In view of the extensive use of the
 Video Conferencing facility, it is proposed to upgrade the facility so
 as to enable improved audio and video quality features (high
 definition) and facilitate extension of the usage of video conferencing
 to more areas including e-learning.
 
 Business Process Re-engineering (BPR):
 
 As a part of BPR, Bank had implemented Centralized Cheque Processing
 system at all its 14 service branches, Cheque Truncation System at NCR,
 New Delhi, Issuance of VISA Debit Card (Insta Card) as Welcome Kit at
 the time of opening of Account, straight- through-processing for RTGS /
 NEFT, Online Processing of ATM Card & Internet Banking Applications,
 Core to Core DD / CO / POB Reconciliation Systems and automation of
 outstation cheque collection process.
 
 It is envisaged to undertake BPR initiatives involving activities such
 as Centralised Chequebook Issue, Personalised Cheque Printing,
 Centralised Customer Statement Printing & Dispatch, e-Payment Gateway,
 Centralised stationery indenting and printing software etc. during
 2011-12.
 
 Identification and collation of NPA from CBS system has been one of the
 major BPR initiatives undertaken by the Bank and implemented in
 accordance with the directives of Ministry of Finance, Government of
 India.  This will help reduce manual intervention and facilitate
 improved monitoring of the credit portfolio.
 
 MIS & Data warehousing:
 
 Under MIS, Bank has developed and implemented a web-based MIS Portal
 for Branch Profile, Region Profile, CO Profile & Executive Dash Board
 of Bank’s Trial Balance and Profit and Loss account. The daily business
 figures are sent through SMS to all branch managers, field executives
 and CO executives and top management. Bank has taken implementation of
 a separate solution for MIS called Branch Banking Management
 Information System (BBMIS) to cater to the overall MIS requirements of
 the Bank.
 
 It is proposed to initiate steps for implementation of Data Warehouse
 and Business Intelligence project during the year 2011-12.
 
 IT Training:
 
 Bank has operationalized 14 IT Labs across the country in addition to
 the existing training infrastructure to cater to the training needs of
 the end- users. CBS training has been imparted to 7065 staff members.
 
 In-House Software Development:
 
 Bank has a well-trained pool of software developers who are
 continuously engaged in development of various systems as per the
 requirements of various functional departments, regional offices etc.
 including various utility systems related to year-end and audit related
 activities.
 
 Implementation of CPSMS: All banks have been directed by Controller
 General of Accounts to develop and implement the integration between
 their respective CBS and Central Plan Scheme Monitoring System (CPSMS)
 functionality which would be an online management information system
 and decision support system for the various plan schemes of Government
 of India. This would cover the accounts of various agencies who shall
 be receiving funds from Government. The primary objective was to have a
 tracking and monitoring mechanism for the fund disbursement and fund
 utilization under Plan schemes on real time basis. The necessary
 integration with CBS to facilitate viewing of transactions in the
 account by Government of India has been developed by our internal team
 within the timeline specified by Government of India.
 
 Bank has developed e-TDS system which enables the branches to collate,
 compile and submit quarterly e-TDS return to tax authorities.
 
 Facilities are provided on the Banks intranet for the benefit of
 branches for viewing and printing various analytical statements and
 statistics about the business parameters of the branch / regions.
 
 Facility has also been provided to branches to generate and print the
 Form 16 (TDS Certificate) to be issued to customers as and when
 required. This is applicable for the TDS deducted on the interest paid
 to customers on their various deposits with the Bank. The facility will
 enable the branches to print and issue the Form 16 as and when required
 by the customers.
 
 The other major systems developed and implemented are Regional Office
 Software (ROSW), HRM Software (Payroll and other modules), Branch
 Inspection Software (BRAINS), Online Tax Collection System (OLTAS),
 Credit Risk Rating System, PF System, INTRANET, ATM card and
 application status tracking, etc.
 
 3.4 Customer Centric Initiatives taken by the Bank
 
 The Bank has pursued high standards of customer service to ensure
 customer satisfaction through out the year.
 
 As member of the Banking Codes and Standards Board of India (BCSBI)
 Bank has adopted the Code of Bank’s Commitment to Customers and Bank’s
 Code of Commitment to SMEs.
 
 Duly documented policies approved by the Board on “Deposits,
 “Collection of Cheques / instruments, “Redressal of Grievances,
 “Compensation and “Operational Procedure for settlement of claims of
 Deceased Depositors are in place. These policies are displayed on
 Bank’s website.
 
 The Committee of the Board on Customer Service meets periodically to
 monitor the quality of customer service and redressal of customer
 grievances to ensure customer satisfaction. The Standing Committee on
 Customer Service at Central Office and Regional Level Customer Service
 Committees at all the regional offices also meet regularly to address
 and review various customer related matters to take steps for
 improvement on an ongoing basis.
 
 Customer Service Committees at all the branches are formed and a cross
 section of customers representing depositors, corporates, businessmen
 and senior citizens are invited to attend its meetings to have feedback
 and suggestions on schemes, products and services.
 
 A full fledged grievances redressal machinery is in place to respond
 promptly to customer grievances. Complaint Management Cells are
 operative at Central Office and at all Regional Offices of the Bank.
 The Committee of the Board on Customer Service and Standing Committee
 on Customer Service at Central Office monitor the progress of redressal
 of customer grievances regularly.
 
 The Bank has implemented all major recommendations of Goiporia
 Committee and Dr. S.S.Tarapore Committee relating to customer service.
 
 The Bank has in place internet based mechanism for lodging the
 complaint or to give suggestions / feedback on services by the
 customers and for providing acknowledgement and status of their
 feedback / complaint.
 
 The Bank’s Anniversary Day on 8.2.2011 was celebrated as Customers’ Day
 and Chairman & Managing Director interacted with the customers across
 the country through video conferencing.
 
 3.5 KYC/AML
 
 Know Your Customer (KYC) norms/Anti-Money Laundering (AML) standards/
 Combating of Financing of Terrorism (CFT) and obligation of Bank under
 PMLA, 2002
 
 • The Bank has Board approved KYC-AML-CFT Policy in place. The said
 Policy is the foundation on which the Bank’s implementation of KYC
 norms, AML standards and CFT measures is based.
 
 The full KYC compliance entails staff education as well as customer
 education for which the following measures are taken by the Bank.
 
 • A comprehensive list of KYC documents is uploaded on the Bank’s web
 site for the benefit of customers
 
 • Regular training sessions are conducted on KYC-AML-CFT guidelines at
 the Bank’s training establishments.
 
 3.6 Information Facilitation Centre:
 
 Mahabank Facilitation Centre is operating from Mumbai since June 2005
 and can be accessed through two All India Toll Free Numbers i.e. 1800-
 222340 and 1800-220888. Toll Free Telephone Numbers have been made
 available at 12 major cities.
 
 During the year, 27,840 calls were received on toll free numbers
 regarding various products and services offered by the Bank, queries
 and feedback on the Bank’s services.
 
 An Information Facilitation Centre had been set up in July 2001 in Head
 Office for providing information on various schemes and products of the
 Bank and any other information / assistance that may be required by
 customers and public.
 
 During the year, 6,695 complaints were received and redressed through
 this center.
 
 3.7 Risk Management
 
 Banking business is becoming more complex and exposed to wide array of
 risks. Success of a bank will be derived based on its risk management
 capabilities. Keeping this in mind the Bank has adopted various
 strategies for effective risk management.
 
 Credit Risk
 
 The Credit Risk Management process forms an integral part of overall
 risk management of the Bank. The Bank has put in place comprehensive
 Lending Policy, Loan Review Policy and Risk Management Policy for
 credit risk management. The policies prescribe various guidelines,
 procedures, standards and prudential / exposure norms.
 
 The Bank has constituted Credit Risk Management Committee (CRMC) which
 reviews the policies, procedures and systems relating to credit
 administration and monitoring, at periodic intervals.
 
 Credit concentration risk is regulated through prescribing, monitoring
 and reviewing of credit exposure limits in terms of single borrower /
 group borrower exposure, exposure to sensitive sectors, industry
 exposure, substantial exposure, geographical exposure, identifying the
 thrust and low priority areas.
 
 To evaluate the risk perception in a lending proposition, the Bank has
 put in place an in-house developed Credit Risk Rating Framework (CRRF)
 for rating of existing as well as entry level borrowers in various
 asset classes, as desired under Basel II. The Bank has prescribed
 threshold ratings for entry level exposures with a view to building up
 credit portfolio within the risk appetite and achieve the profit plan.
 With a view to separating the Credit Risk Management function from
 credit sanctioning, Credit Approval Grids are set up at various levels
 which assess the risk perception through a committee approach.
 
 The Bank has undertaken migration analysis of credit risk rating of
 borrowers over a time horizon and probability of default has been
 estimated in line with Basel II requirements. To achieve risk-return
 trade off, risk based pricing framework has been implemented. Portfolio
 reviews and industry studies are undertaken to assess the risks lying
 in the credit portfolio and adopt strategies to improve credit quality.
 Stress testing is also undertaken periodically.
 
 Market Risk
 
 Market Risk is the risk to the Bank resulting from the movements in
 market prices due to changes in interest rates, foreign exchange rates,
 equity price and commodity price. The changes impact the Bank’s
 earnings and capital and can have ramifications on the Bank’s liquidity
 and profitability.
 
 The ALM Policy, which is reviewed annually and approved by the Board,
 prescribes the parameters for management of Market Risk and Liquidity
 Risk. The Bank has constituted Asset Liability Management Committee
 (ALCO), which meets at regular intervals to review the interest rate
 scenarios, liquidity positions etc. The ALCO manages and supervises
 Market Risk and Liquidity Risk through review of rates of interest on
 deposits / advances.  ALCO also monitors adherence to various risk
 limits and determines the business strategy in light of prevailing
 interest rate scenario and liquidity position in the market with a view
 to optimizing profit and overall balance sheet management.
 
 Interest Rate Risk is managed through the prescriptions of ALM Policy.
 Various tools viz. Earnings at Risk, Duration and Value at Risk models
 are used for monitoring interest rate risk. The ALCO reviews the risk
 on regular basis and measures are initiated to minimize the interest
 rate risk.
 
 Investment Risk is managed through the prescriptions made in the
 Investment Management Policy & Investment Risk Management Policy.
 
 For management of Foreign Exchange Risk, prudential limits for open
 foreign exchange position, aggregate gap position, Daylight limit,
 Overnight limit, Net open overnight position, Stop loss limit, Limit
 for undertaking swaps / investment / borrowing overseas, inter bank
 exposure limits etc.  have been put in place. These limits are
 monitored regularly.
 
 Management of Liquidity Risk is achieved through ongoing review of
 structural liquidity and short term dynamic liquidity as well as daily
 liquidity position. Stress testing is undertaken periodically.
 
 Operational Risk
 
 The Operational Risk Management Policy of the Bank outlines the
 framework for measuring, monitoring and controlling operational risk in
 the Bank. The Bank lays due emphasis on identifying risk prone areas
 and taking suitable remedial actions by streamlining systems &
 procedures, imparting training so as to control operational risks. The
 Operational Risk Management Committee (ORMC) meets regularly to review
 the matters related to operational risk. The Bank has put in place
 policy on Business Continuity Planning. A policy on outsourcing is also
 formulated which facilitates use of expertise available in the market
 with adequate safeguards against risk associated with outsourcing.
 
 Basel II Compliance
 
 The Bank is Basel II compliant in terms of the New Capital Adequacy
 Framework (Basel II) guidelines issued by RBI. Bank has adopted
 Standardized Approach for Credit Risk, Standardized Duration Approach
 for Market Risk and Basic Indicator Approach for Operational Risk as
 per RBI guidelines for capital adequacy computation. External credit
 ratings from approved rating agencies are used for risk weighting of
 corporate exposures as required under Basel II. Bank has also put in
 place a policy on Utilization of Credit Risk Mitigation Techniques &
 Collateral Management.
 
 The Bank has evolved Board approved Internal Capital Adequacy
 Assessment Process (ICAAP) which covers identification and measurement
 of risks other than Pillar 1 risks (i.e. Credit Risk, Market Risk &
 Operational Risk), to meet the requirements of Pillar 2 of Basel II
 norms. The Bank has adhered to disclosure norms as stipulated in the
 guidelines of RBI to meet Pillar 3 requirements of Basel II.
 
 Bank has drawn a roadmap for implementation of advanced approaches
 under Basel II.
 
 Improvement in awareness of Basel II norms amongst the employees is
 ensured through training. Knowledge and skill levels of risk management
 team at Central Office are constantly upgraded through exposure to
 external trainings, workshops and seminars.
 
 3.8 Internal Control Systems
 
 Inspection & Concurrent Audit:
 
 The Inspection and Audit system and various measures of internal
 control are adopted by the Bank to ensure identification/assessment and
 mitigation of operational risks.
 
 Inspection of Branches:
 
 The Bank continued to adhere to the Jilani Committee recommendations
 and inspected 1011 branches during the year covering 65.82 per cent of
 total branches of the Bank. As per RBI guidelines under Risk Based
 Supervision, the Bank has undertaken Risk Based Internal Audit (RBIA)
 al all these 1011 branches.
 
 Conference of all inspecting officials and heads of inspection cells
 was organized during September/October 2010 to update them on policies,
 procedures, business environment, opportunities and challenges for
 banks, emerging areas of risks and their role in alerting the top
 Management of existing and impending risks at branches and offices.
 
 Surprise Inspection:
 
 In pursuance of the Ghosh committee recommendations, surprise
 inspection was carried out at 110 branches focusing mainly on high risk
 areas at the branches.
 
 Concurrent Audit:
 
 312 Branches and 4 central office Departments were subjected to
 Concurrent Audit during the year. These branches covered 66 per cent of
 aggregate deposits and 77.50 per cent of total advances of the Bank.
 
 Income & Expenditure Audit:
 
 Income & Expenditure Audit for the period from October 2009 to
 September 2010 was carried out at 720 branches to identify and recover
 income leakages, if any. Half yearly Expenses Audit of all the Regional
 Offices was carried out during the year.
 
 Management Audit:
 
 Management Audit of 16 Regional Offices and 13 departments at Central
 Office was carried out for assessing their effectiveness in terms of
 supervision and controls.
 
 RBI Inspection under Section 35 of the Banking Regulation Act:
 
 During the year 2010-11, RBI inspected 5 branches and 3 Regional
 Offices under Section 35 of RBI Act. RBI conducted AFI of the bank
 during the period 01.06.2010 to 21.07.2010.
 
 3.9 Vigilance
 
 Vigilance activity in the Bank is an integral part of the managerial
 function.  Its objective is to enhance the level of managerial
 efficiency, effectiveness and to ensure a proper climate for an
 efficient administration, where officials can perform the duties
 without any fear or favour.
 
 ‘Vigilance’ in bank is maintaining a proper balance between flexibility
 and accountability.
 
 Preventive Vigilance is the most important aspect of vigilance. With a
 view to improve functioning at all levels, the Bank has taken the
 necessary steps as under:
 
 In accordance with CVC directives, Vigilance Committees have been
 formed at the Branches having staff of 20 and more, to review/ monitor
 sensitive and fraud prone areas and report abnormalities observed
 therein, if any.
 
 ‘Fraud Risk Management Policy’ on prevention, detection, classification
 and reporting of frauds including action to be taken, has been adopted
 by the Bank and circulated for the guidance and use of the branches and
 field functionaries.
 
 3.10 Compliance
 
 As per the Reserve Bank of India guidelines, Board approved Compliance
 Policy is in place and the compliance department is headed by Chief
 Compliance Officer who is in the rank of Deputy General Manager. The
 Compliance Department ensures timely compliance to the directions /
 communications received from Reserve Bank of India / Government of
 India / IBA and other agencies. The compliance status is reviewed by
 the Top Management / Audit Committee of the Board on weekly / monthly/
 quarterly basis. To improve the compliance culture in the Bank session
 on compliance has been included in training programme for staff
 members.
 
 3.11 Marketing And Publicity
 
 The landmark of crossing Rs. 1.00 lakh crore business was achieved on
 31.03.2010. This occasion was given wide publicity by giving
 advertisements in print media and electronic media.
 
 The concluding ceremony of the Platinum Jubilee year was held at Vigyan
 Bhawan, Delhi. Hon’ble Finance Minister, Shri Pranab Mukherjee, Chief
 Minister of Maharashtra, Shri Ashok Chavan, Union Minister of State for
 Finance Shri Namo Narain Meena and Union Minister of State for
 Communications and IT, Shri Sachin Pilot, graced the occasion.
 
 A special commemorative Cover was released at the hands of Shri Sachin
 Pilot on Bank’s completing 75 years of service to the nation.
 
 Valued clients from all parts of the country along with top Government
 officials from Delhi attended the programme.
 
 Wide publicity was given in print and electronic media on 100 per cent
 CBS achievement of Maharashtra Gramin Bank (Bank sponsored RRB),
 observing Customer’s day at branches, Regional Offices and Central
 office, launch of new products/ services and CASA campaigns.
 
 3.12 Citizen’s Charter
 
 The Bank has adopted the Charter since 2000-01, which details the
 duties and responsibilities of the Bank towards its customers. The
 Charter is displayed at all the branches and at the website and has
 been updated from time to time. The Bank has also adopted a Citizen
 Charter of RBI on exchange of notes and coins.
 
 4. SOCIAL BANKING
 
 4.1 Priority Sector Lending
 
 It has been the constant endeavor of the Bank to facilitate equitable
 and sustainable economic development by timely and hassle-free
 availability of credit for productive purposes to Small and Marginal
 Farmers, Micro & Small Enterprises, Retail Traders, Professional & Self
 Employed, Women Entrepreneurs and entrepreneurs from economically
 weaker sections.
 
 The outstanding advances under Priority Sector as of March 2011
 aggregated to Rs. 16,480.04 crore, constituting 40.66 per cent of the
 Adjusted Net Bank Credit of previous year against the stipulated
 minimum target of 40 per cent.
 
 The rise in Priority Sector Advances was Rs. 2,247.78 crore over March
 2010 in absolute terms.
 
 4.2 Agriculture
 
 The Bank disbursed Rs. 2874.28 crore for agriculture and allied
 activities during the year 2010-11. The outstanding advances to
 agriculture sector as of 31.03.2011 were Rs. 4691.17 crore i.e.11.58
 per cent of Adjusted Net Bank Credit.
 
 The Bank undertook awareness/sensitization programmes for all the
 branches for increasing advances to agriculture.
 
 4.2.1 The Bank successfully implemented Agriculture Debt Waiver and
 Debt Relief Scheme of the Government of India and the Maharashtra state
 Government.
 
 Under Government of India Scheme bank has covered 86584 small and
 marginal farmers for debt waiver involving Rs. 219.28 crore and 39320
 farmers for debt relief involving Rs. 82.01 crore.
 
 Under Government of Maharashtra’s Debt Waiver & Debt Relief Scheme bank
 has covered 36317 farmers for debt waiver involving Rs. 36.99 crore and
 49353 farmers for debt relief involving Rs. 98.12 crore.
 
 4.2.2 Mahabank Kisan Credit Card (MKCC)
 
 This scheme gained popularity especially in rural areas where it is
 being propagated successfully and vigorously. The Bank has issued total
 281879 Kisan Credit Cards to farmers. Credit flow to MKCC beneficiaries
 is Rs. 1493.42 crore as on 31.03.2011.
 
 4.3 Micro, Small and Medium Enterprises (MSMEs)
 
 SMEs are recognized as a major growth engine for the Indian economy.
 They generate opportunities for direct and indirect employment by
 facilitating use of natural resources and local skills to stem the tide
 of migration to urban areas and promote low investment enterprises.
 Finance is made available to viable enterprises at an attractive and
 low rate of interest. On line enquiry portal is made available on the
 Bank’s website during the year.
 
 The Bank has adopted Simplified Loan Application for MSEs and the same
 is displayed on the Bank’s website. The Bank has also adopted Bank’s
 Code of Commitment to Micro and Small Enterprise and it is displayed on
 the Bank’s website.
 
 The Bank’s lending to Micro, Small and Medium Enterprises which was at
 the level of Rs. 3,699.64 crore as at 31.03.2010, increased to Rs.
 7,037.31 crore as at 31.03.2011, which translates into a y-o-y growth
 of 90.22 per cent.
 
 4.3.1 Maha-Entrepreneur
 
 Under the scheme, the Bank is providing finance up to Rs. 100.00 lakh
 to Micro and Small Enterprises without Collateral Security and/ or
 Third Party Guarantee.
 
 Accounts under the scheme are covered under Credit Guarantee Fund
 Scheme for Micro, Small and Medium Enterprises of Government of India.
 The Bank is bearing the entire guarantee fee and 50 per cent of annual
 service fee, which is to be paid to the Trust under CGFMSE. The Bank
 sanctioned loans of Rs. 311.94 crore to 5495 borrowers under this
 scheme up to March 2011. During the year, coverage under Credit
 Guarantee Fund Scheme has increased by 66.87 per cent.
 
 5. IMPORTANT SCHEMES/PROJECTS OF THE BANK
 
 5.1 New initiatives under Retail Loans:
 
 a.  Centralized processing of retail loans.
 
 The Bank has opened 15 Retail Assets Branches and 18 Retail Processing
 Centers covering all the Regions for hassle free and quality
 disbursement of retail loans.
 
 b.  Mahabank Jewel Loan Scheme.
 
 Gold ornaments are the traditional and inherited form of savings among
 the people in India. Being one of the most liquid and precious asset,
 it serves as a dependable and acceptable form of security to raise
 loans for meeting immediate financial needs for business, agricultural,
 consumption purposes such as marriage, medical, educational expenses
 etc., With a view to meet the requirement of our customers, Bank has
 launched a new Retail Loan product “Mahabank Jewel Loan Scheme w.e.f.
 01.11.2010. For senior citizens, loan against gold ornaments is
 available at 0.75 per cent less than the regular interest rate.
 
 c.  Mahabank Top-Up Loan Scheme.
 
 In order to extend additional credit support to our regular housing
 loan borrowers, Bank has launched another new Retail Loan product
 “Mahabank Top-Up loan scheme w.e.f.01.11.2010.
 
 5.2 Housing loan to public
 
 The Bank has in place Housing Loan Scheme to meet the needs of all
 economic segments including NRIs. Financing housing sector in rural and
 urban parts of India is a thrust area.
 
 The Bank’s lending to housing sector has grown by 17.99 percent during
 the year to reach the level of Rs. 4,279.68 crore as at 31.03.2011. The
 Bank is also implementing Golden Jubilee Rural Housing Scheme of the
 Government of India in rural areas having population not exceeding
 50,000.
 
 5.2.1 One per cent Interest Subvention on Housing Loan up to Rs. 10.00
 lakh.
 
 As per GOI guidelines, Bank has provided 1 per cent interest subvention
 to borrowers, who availed housing loans upto Rs. 10.00 lakhs costing
 upto Rs. 20.00 lakhs.
 
 5.3 Model Educational Loan scheme
 
 With the objective of ensuring that all deserving students get
 opportunity to pursue higher education, the Bank implemented a Model
 Educational Loan Scheme. As of March 2011, the Bank had lent Rs. 481.40
 crore to 24354 students. The Bank has provided the facility of online
 submission of application for education loan through web-access.
 
 5.3.1 Interest subsidy to Education loan borrowers under Economically
 Weaker Sections:
 
 Bank has implemented interest subsidy scheme of Government of India for
 the year 2009-10 where the parental annual income is upto Rs. 4.50
 lakh.  Under the scheme, entire interest charged during moratorium
 period is reimbursed by the Central Govt.
 
 5.4 Micro Finance
 
 The Bank has always recognized the importance of credit to rural and
 urban poor for taking economic activity. The SHGs have proved to be
 effective instruments for empowerment of women. Bank has opened
 specialized branches for financing SHGs at Hadapsar, Pune and Goregaon,
 Mumbai during the year. The Bank has actively financed non-traditional
 activities of various Self Help Groups (SHGs).
 
 As on 31.03.2011, there were 84087 SHGs formed by the Bank, out of
 which 81471 SHGs had availed aggregate financial assistance of Rs.
 229.63 crore from the Bank constituting a growth of 54 per cent over
 previous year.
 
 5.5 Assistance to SC/ST beneficiaries:
 
 The Bank has been actively extending finance to SC/ST beneficiaries
 through various schemes. Total finance as on 31.03.2011 to SC/ST
 beneficiaries stood at Rs. 789.85 crore, constituting a growth of 15
 per cent.
 
 5.6 Advances to Minority Community:
 
 A special cell has been set up at Central Office to review & ensure
 smooth flow of Credit to minority community. As of March 2011, the
 outstanding advances to minority communities were at Rs. 874.53 crore
 to 57135 beneficiaries.
 
 5.7 Mahabank Current Account Diamond Scheme:
 
 Existing schemes viz Pearl and Sapphire have been refurbished and
 another new Current Account Scheme viz Diamond Scheme with additional
 free facilities has been introduced wef 14th December 2010.
 
 5.8 Mahanidhi Scheme:
 
 New “Maha Nidhi Deposit scheme was introduced on 26.02.2011 to shore
 up retail term deposits of the Bank. Deposits amounting to Rs. 2,922.68
 crore were mobilized under the scheme till 31.03.2011.
 
 5.9 Additional rate of Interest to Senior Citizens
 
 Interest rate on deposits in maturity slabs of one year and above has
 been increased to 0.75 per cent from 0.50 per cent for an amount less
 than one crore only w.e.f 10.01.2011
 
 5.10 Maha Chetana Programme:
 
 Maha Chetana Programme, a staff motivation campaign, was launched in
 October 2011 as an empowerment programme for the active participation
 of all staff members to achieve the desired goals of the Bank and take
 it to new heights in coming years. Maha Chetana Programme focused
 mainly on 4 key business parameters i.e. –
 
 1.  Reduction in NPA
 
 2.  Sustaining deposit growth / further increasing CASA deposits
 
 3.  Increasing quality advances
 
 4.  Increasing fee based income
 
 Hon.Chairman & Managing Director visited all the 32 regions &
 interacted with all the employees for their active participation in
 business growth, NPA recovery etc under the Maha Chetana programme,
 which was overwhelmingly received by the staff who vowed for the
 business development of the bank.
 
 6. CORPORATE SOCIAL RESPONSIBILITY
 
 6.1 The Rural Development Centres at Hadapsar and Bhigwan in Pune
 District
 
 of Maharashtra have been undertaking various developmental activities
 for the benefit of farmers viz. Lab to Land Project, Re-development of
 Saline Soils, Soil Testing and offering advice on the use of
 fertilizers.
 
 6.2 A Trust viz. Mahabank Agricultural Research and Rural Development
 Foundation (MARDEF) established by the Bank undertakes various projects
 and village improvement programmes. MARDEF is imparting training to
 farmers on various subjects in agriculture, e.g. dairy, Emu farming,
 goat rearing, best practices in grape farming, application of
 fertilizers, agriculture credit schemes, etc.
 
 6.3 The Bank has established Mahabank Self Employment Training
 Institute (MSETI) for providing training to rural youth and women to
 enable them to acquire skills for self-employment through small
 business enterprises. The Institute has centers at Pune, Nagpur,
 Aurangabad, Amravati and Nasik.  The Institute has so far imparted
 training to 7117 youths and has achieved settlement rate of 70 per
 cent.
 
 6.4 Gramin Mahila Va Balak Vikas Mandal (GMVBVM), an NGO formed by
 the Bank is actively involved in formation, nurturing, training and
 ensuring linkage of SHGs to Bank Credit. The GMVBVM also helps SHGs in
 marketing their products through outlets established in Pune City under
 the name “SAVITRI. The GMVBVM guides and actively helps SHGs for
 selection and purchase of raw materials and quality production.
 
 6.5 The Bank has opened three Financial Literacy & Credit Counselling
 centers
 
 in three Lead Districts namely Pune, Nasik and Aurangabad.
 
 6.6 Bank has helped various NGOs during the year extending financial
 support to acquire necessary inputs for carrying their activities.
 These include the following:
 
 i) An Audio logical assessment equipment which helps detection of
 hearing related challenges among children below the age of 3 years in
 underdeveloped areas around Pune
 
 ii) CCTV for use in free eye check up camps conducted in backward areas
 in Maharashtra
 
 iii) Retinal camera for use in eye surgeries
 
 iv) Building and physical comforts to mentally retarded and cerebral
 palsy children
 
 v) Motorized vehicles to physically challenged persons in Delhi
 
 vi) Construction of toilets in remote underdeveloped villages.
 
 7.  LEAD BANK SCHEME
 
 The Bank has Lead Bank responsibility in six districts of Maharashtra
 State viz. Aurangabad, Jalna, Nasik, Pune, Satara & Thane. Every year
 district credit plans for the districts are prepared and implemented
 with the cooperation of other banks. The Performance of the Bank during
 the year in respect of six lead districts under priority sector lending
 was 109 per cent of the targets.
 
 State Level Bankers’ Committee:
 
 The Bank is the Convener of State Level Bankers’ Committee (SLBC) for
 the State of Maharashtra. Quarterly meetings are held regularly to
 oversee the implementation of State Annual Credit Plans, priority
 sector lending and Govt. sponsored schemes in the State. During the
 year four SLBC meetings were held.
 
 As an SLBC convener, state specific financial inclusion Plan
 (Swabhiman) was drawn for 4292 unbanked villages having population over
 2000 in the state for extending banking services to unbanked
 habitations. The banks in the state have opened banking outlets in 1692
 unbanked villages through brick & mortar branches, mobile van and
 Business correspondents’ model for extending branchless banking as of
 31.03.2011.
 
 Registrar for issue of Aadhaar- UIDAI
 
 The Bank has entered into MoU with Unique Identification authority of
 India (UIDAI) for enrolment of Aadhaar (Unique identification number to
 residents of India) and became a Registrar.
 
 With the signing of the MoU, the Bank became a partner in the efforts
 of the UIDAI set up by Government of India, for issuing Unique Identity
 Numbers to residents of India.
 
 Bank has commenced the enrolment process on pilot basis at Pune &
 Mumbai for issuance of unique identification number (Aadhaar) for its
 staff and customers on 8th Feb 2011 (Anniversary day) and completed
 13000 enrolments as on 31.03.2011.
 
 Financial Inclusion plan – Swabhiman
 
 Swabhiman is path-breaking initiative by Government of India to cover
 the economic distance between rural and urban India. It promises to
 bring basic banking services to all unbanked villages in the country
 with population above 2000. Accordingly, our bank has been allotted
 1215 unbanked villages in the country to be covered under financial
 inclusion for inclusive growth.
 
 The swabhiman movement facilitates opening of bank accounts, provide
 need based credit, remittance facilities and help to promote financial
 literacy in rural India using various models and technologies including
 branchless models through Business correspondent (BC)/ Customer Service
 Provider (CSPs) models.
 
 Bank has been implementing IT enabled financial inclusion for providing
 branchless banking in allotted 1215 unbanked villages. As on
 31.03.2011, bank has covered 484 villages through BC model and opened
 two branches at financial inclusion villages i.e., Zari-Jamani and
 Asangon in Chandrapur and Thane districts of Maharashtra respectively.
 
 8.  SUBSIDIARIES/JOINT VENTURES AND SPONSORED INSTITUTIONS
 
 8.1 Performance of Regional Rural Bank
 
 Maharashtra Gramin Bank (MGB) is a Regional Rural Bank sponsored by our
 bank having its Head Office at Nanded, Maharashtra state. Total no of
 branches as on 31.03.2011 stood at 329 covering 16 out of 33 districts
 of Maharashtra state.
 
 MGB has migrated all its 329 branches to CBS platform within a record
 time period of 77 days.
 
 During the year 2010-11, as per GOI policy, MGB has received
 recapitalization support of Rs. 45.34 crore for improving Capital to
 Risk Asset Ratio (CRAR) from all stake holders i.e. Government of
 India, Bank of Maharashtra and Government of Maharashtra in the
 proportion of their share holding of 50:35:15 respectively.
 
 8.2 The Maharashtra Executor & Trustee Company Pvt. Ltd. (METCO)
 
 The Maharashtra Executor & Trustee Co. Pvt. Ltd (METCO) was established
 in 1946 with an aim to provide services auxiliary to banking such as
 
 • Drafting & Execution of will
 
 • Management of private trusts
 
 • Management of public charitable trusts
 
 • Management of investments & house properties as attorney
 
 • Guardianship of minor’s property
 
 • Consultation for sale/purchase of property
 
 • Filing of I-Tax Returns for individuals
 
 The Company has its units at Pune, Mumbai, Thane and Nagpur.
 
 During 2010-11, new assignments for Management of Trusts received were
 24, bringing the total number of Public & Private Trusts under
 management to 1002. New Wills added during the year were 46 bringing
 the total number of Wills in custody and execution to 1063.
 
 The Company manages properties both movable and immovable of 120
 clients under the Power of Attorney. The Company also acts as the
 Trustees in respect of 147 policies under Married Women’s Property Act
 and acts as Court appointed Guardian of minor’s property in 10 cases.
 
 9.  IMPLEMENTATION OF OFFICIAL LANGUAGE POLICY
 
 Progressive use of Official Language.
 
 During the year 2010-11, the Bank has made various remarkable
 achievements in the field of Official Language Implementation.
 
 ¦ Our former Chairman & Managing Director received the 2nd prize won by
 the Bank in Reserve Bank of India Bilingual House Magazine competition
 for the year 2008-09 at a function held at Mumbai on 26th May, 2010.
 
 ¦ TOLIC, Mumbai convened by our Bank has received Indira Gandhi
 Rajbhasha shield. The prize was received by the then General Manager
 Shri V. Kannan at the hands of Honorable Vice President of India on
 14th September, 2010 at New Delhi.
 
 ¦ The Bank also secured 4th place in Reserve Bank of India Bilingual
 House Magazine Competition for the year 2009-10.
 
 ¦ Our Regional office, Raipur was awarded 3rd prize for better use of
 Hindi by the TOLIC, Raipur.
 
 The Bank is the Convener for Town Official Language Implementation
 Committee (TOLIC) in Pune, Mumbai and Solapur. Meetings of these
 committees were held regularly. The Bank is also a Convener of State
 Level Bankers Committee (Rajbhasha). Meeting of the committee for this
 year was held on 8 March, 2011.
 
 10.  DIRECTORS’ RESPONSIBILITY STATEMENT
 
 The Directors confirm that in the preparation of the annual accounts
 for the year ended 31.03.2011:
 
 • The applicable accounting standards of the Institute of Chartered
 Accountants of India, have been followed along with proper explanation
 relating to material departures, if any;
 
 • The accounting policies framed in accordance with the guidelines of
 the Reserve Bank of India, are consistently applied and proper
 disclosures are made for changes, if any;
 
 • Reasonable and prudent judgment and estimates were made so as to give
 a true and fair view of the state of affairs of the Bank at the end of
 the financial year and the profit of the Bank for the year.
 
 • Proper and sufficient care was taken for maintenance of adequate
 accounting records in accordance with the provisions of applicable laws
 governing banks, in India; and
 
 • The accounts have been prepared on a going concern basis.
 
 11. CHANGES IN THE BOARD OF DIRECTORS
 
 During the year 2010-11, the following changes took place in the Board
 of Directors:
 
 Shri Shirish D. Dhanak was appointed as Workmen Employee Director w.e.f
 21st July, 2010.
 
 Shri S.K.Gogia, RBI Nominee director, ceased to be the Director w.e.f
 29th July 2010.
 
 Mrs. Kamala Rajan was appointed as RBI nominee director from 30th July,
 2010.
 
 Shri Allen C.A. Pereira, CMD, demitted office on 30th September 2010 on
 reaching superannuation.
 
 Shri A.S. Bhattacharya was appointed as Chairman and Managing Director
 w.e.f 1st October, 2010.
 
 Shri. T.Parameswara Rao, ceased to be the Director w.e.f 12th November
 2010.
 
 Shri Chittaranjan Patwari ceased to be the Director w.e.f. 22nd January
 2011.
 
 Shri Anand K Pandit and Dr. Dinesh Shatilal Patel, were re-elected as
 directors representing Share holders w.e.f 1st February, 2011
 
 The Board of Directors place on record their sincere appreciation for
 the valuable contribution made by the former Chairman & Managing
 Director, Shri Allen C.A. Pereira and other outgoing Directors.
 
 12. ACKNOWLEDGMENTS
 
 The Board of Directors wishes to express sincere thanks to the
 Government of India, the Reserve Bank of India, the Securities and
 Exchange Board of India, Insurance Regulatory and Development
 Authority, Indian Banks’ Association and Stock Exchanges for their
 valuable advice and support; to the customers and shareholders for
 their patronage; to the correspondents and associates for their
 co-operation and to all the members of staff of “Mahabank Family for
 their unstinted commitment and contribution to the overall development
 of the Bank.
 
 For and on behalf of the Board of Directors
 
                                              (Anup S. Bhattacharya)
 
                                      Chairman and Managing Director
 
 Pune
 
 April 30, 2011