Bank of Maharashtra Directors Report, Bank of Mah Reports by Directors
Bank of Maharashtra
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Directors Report Year End : Mar '14    « Mar 13
The Directors have great pleasure in presenting before you the Annual
 Report of the Bank along with the audited Balance Sheet, Profit  ACY- Loss
 Account and the Report on Business and Operations for the year ended
 March 31, 2014.
 2.1 Business
 Total business of your Bank stood at X 2,07,172 crore as on 31.03.2014,
 as compared to X 1,70,734 crore a year ago, registering a year-on-year
 growth of 21.34 per cent.
 2.2 Deposits
 Total deposits of the Bank stood at X 1,16,803 crore, up by 23.8 per
 cent over the level of X 94,337 crore as at the end of March 2014.
 Current  ACY- Savings Bank (CASA) deposits increased to X 41,921 crore as
 on 31.03.2014. Share of CASA deposits in total deposits of your Bank
 stood at 35.89 per cent as on 31.03.2014 which is one of the highest
 among Public Sector Banks.
 2.3 Credit Deployment
 The Bank has put in place a lending policy in conformity with the
 guidelines issued by RBI and also the lending norms of the Government
 of India. It emphasizes on qualitative credit growth and ensures
 compliance with regulatory requirements as well as the prudential
 exposure limits.
 Gross advances of the Bank increased from X 76,397 crore as on
 31.3.2013 to X 90,369 crore as on 31.3.2014 with growth of 18.29 per
 cent. Efficient service with customer centric approach has enabled the
 bank in registering growth, in-line with the banking industry during
 the year 2013-14.
 Several steps have been taken for improving credit delivery mechanism
 along with improvement in turnaround without compromising the overall
 quality of credit.
 Mid Corporate shall continue to be one of the thrust areas for the bank
 in future for increasing yield on advances and dispersion of credit
 Efforts are continued to improve portfolio yield by reshuffling the
 portfolio mix.
 2.3.1 Sectoral Deployment of Credit
 While financing to various segments of the economy, the Bank has
 endeavored to maintain a diversified credit portfolio, with a view to
 ensuring credit dispersion across sectors. The Bank has continued its
 efforts to support core, manufacturing and priority sectors as well as
 infrastructure projects, which serve to drive economic growth. This
 focus of the Bank will continue in future, in line with the national
 economic growth priorities.
 Industry wise credit deployment as on 31.03.2014 is as under.
                                        Percen-              Percen-
                            Outsta-     tage to    Outsta-   tage to 
 Sr                         nding                  nding
 No. Credit deployed        as on       total      as on     total
                                        credit               credit
                           31.03.2014            31.03.2013
                           X in crore   outsta-  X in crore  outsta-
                                        nding                nding
 1   Industry               48889.64     54.10 ACU-   41307.25   54.49 ACU- 
     of which
 i.  Infrastructure         13004.99     14.39 ACU-   12223.59   16.13 ACU-
 ii. Chemicals, Dyes,        1578.92      1.75 ACU-    1387.15    1.83 ACU- 
     Paints, etc
 iii.Petroleum               2270.61      2.51 ACU-    1552.71    2.05 ACU-
 iv. Iron  ACY- Steel        2689.22      2.98 ACU-    1640.21    2.16 ACU-
 v.  NBFCs  ACY- Trading    15111.27     16.72 ACU-   12671.06   16.72 ACU-
 vi. Engineering             2946.42      3.26 ACU-    2496.14    3.29 ACU-
 vii.Construction             387.52      0.43 ACU-     318.29    0.42 ACU-
 viii. Other Industries     10900.69     12.06 ACU-     9018.1   11.90 ACU-
 2   Agriculture            10276.07     11.37 ACU-    7378.35    9.73 ACU-
 3   MSME                   19062.99     21.09 ACU-   16788.21   22.15 ACU-
 4   Housing                 8854.16      9.80 ACU-    6578.23    8.68 ACU-
 5   Education                622.71      0.69 ACU-     551.59    0.73 ACU-
 6   Exports                 1880.71      2.08 ACU-    1886.06    2.49 ACU-
 7   Commercial Real 
     estate                  4793.96      5.30 ACU-    3551.63    4.69 ACU-
 2.3.2 Credit Administration and Monitoring
 Early warning signals are captured from the CBS system on daily basis
 for close monitoring of stressed accounts on near real time basis.
 System generated SMS alerts are sent to the customers to pre-empt
 delinquency. An integrated web-based reporting has been introduced in
 the Bank to enable instant communication between branches/Zones/Head
 Office for effective monitoring of credit portfolio.
 The credit quality of borrowal accounts is further monitored through
 periodical asset performance review, credit audits  ACY- stock audits.
 Timely rescheduling of repayment terms is undertaken in deserving
 2.4 Asset Performance
 During the Financial Year (FY) 2013-14, total cash recovery in NPAs was
 X 706.41 crore (last year X 411.22 crore). Of this.  recovery in Ledger
 balance was X 646.46 crore (X 198.73 crore), including recovery in sale
 of Assets X 242.16 crore (NIL), recovery in written off accounts was X
 303.32 crore (X 156.76 crore) and recovery in cases of unapplied
 interest was X 38.22 crore (X 55.73 crore). This was besides up
 gradation of NPAs to the tune of X 101.39 crore (X 105.19 crore).  This
 year''s achievement was possible due to intensive follow up adopted by
 the Branches with the defaulting borrowers through letters, notices,
 recovery camps, Lok Adalatas, actions under SARFAESI and through DRTs.
 To address and improve recovery in small sized NPAs having ledger
 balances upto X 10.00 lakh, the bank established additional 5 Micro
 Asset Recovery Cells (MARC) at Zonal offices thereby making total 39
 MARCs. The recovery performance through this vertical was encouraging
 with MARCs recovering X 376.66 crore (X 210.53 crore). The share of
 recovery of MARCs in total cash recovery of the bank was 54.05 ACU-
 (51.20 ACU-).
 The bank continued during this FY a special ''One Time Settlement''(OTS)
 scheme and also launched special OTS product (M-zero) for recovery in
 NPA accounts having ledger balance up to X 5.00 lakh. The total
 recovery in NPAs under this scheme was X 50.15 crore as against X 38.40
 crore in the previous year.
 The Gross NPA ratio of the bank stood at 3.16 ACU- during the financial
 year from 1.49 ACU- as of 31.03.2013. Similarly the ratio of Net NPAs stood
 at 2.03 ACU- as on 31.03.2014 as against 0.52 ACU- a year ago. The NPA 
 ratios of the Bank are much better than not only of the peer Banks but 
 also of many large Banks.
 2.5 Foreign Exchange Business and Export Finance
 During the year 2013-14, the Bank has achieved merchant turnover of X
 28,370 Crores (X 30,437 Crores) and an inter- bank turnover of X
 4,71,327.30 (X 4,14,162 Crores) and earned Forex Profit of X 74.60
 Crores (X 60.41 Crores). The outstanding export credit as on 31st Mar
 2014 was X 1948.97 as against X 1908.31 as on 31st Mar 2013. The
 Treasury  ACY- International Banking Branch at Mumbai (A category branch)
 and 33 B Category branches across the country cater to the
 International business needs of the customers of the Bank.  In order to
 provide prompt service to Non Resident Indian (NRI) clients, Bank has a
 NRI Cell at Deccan Gymkhana Branch, Pune which provides online
 remittance facilities for its NRI customers. With a view to enable
 branches to provide better service to NRI clients, Bank has provided
 Instant NRI information which is updated on monthly basis.
 2.6 Investments
 The net investments of the Bank stood at X 37249.58 crore as on
 31.03.2014 as compared to X 31430.31 crore as on 31.03.2013.
 Investments under Held to Maturity (HTM) category consist of 86.97 per
 cent while Available for Sale (AFS) comprised 12.74 per cent of total
 investment portfolio as on 31.03.2014.  The net interest income from
 investment activity increased to X 2543.03 crore from X 2231.28 crore
 during the last year, a growth of 13.97 per cent.
 2.7 Borrowings
 The borrowings of the Bank as on 31.03.2014 stood at X 8326.47 crore,
 including refinance availed from RBI.  NABARD and SIDBI to the extent
 of X 2861.08 crore. The total borrowings as at 31.03.2013 were X
 12877.49 crore.
 2.8 Merchant Banking
 The Bank handled 84 issues of Commercial Paper amounting to X 20160.85
 crore for its clients as an Issuing and Paying Agent (IPA) during the
 year and earned a commission income ofRs. 9.52 lakh.
 2.9 Depository Services
 The Bank is Depository Participant (DP) of Central Depository Services
 of India Ltd. (CDSL) since September 1999. Account level queries
 related to Demat account balances etc. are available at the 131
 identified branches of the Bank. All the branches of the Bank can open
 Demat account through the Demat Cell of Mumbai. The Bank also provides
 free  ACI-EASI ACI- facility (through CDSL) to view account position 
 through internet.  Query compliance facility is available at Maha Seva
 (Customer Care Center). The Bank has added tie up with two Share
 Broking Companies i.e. Reliance Securities Ltd and Ventura Securities
 Ltd for Maha-e-trade (Online Share Trading) Services for its customers
 along with existing Religare Securities Ltd.  In order to add new
 customers in its fold under Demat, Banks is offering waiver in annual
 maintenance charges for the Demat Accounts opened under Rajiv Gandhi
 Equity Scheme for three years.
 The Annual Maintenance Charges and Dematerialization charges (for
 converting Bank''s physical shares into electronic form) are waived for
 staff/Ex-staff and share holders of the Bank. The Bank has also
 introduced Basic Services Demat Account Facility (BSDA).
 2.10 Banc assurance
 All the branches of the Bank are authorized to sell life and non-life
 insurance products of Life Insurance Corporation of India and United
 India Insurance Co. Ltd. under corporate agency arrangements,
 respectively. The Bank has sold 98929 Non-life Insurance Policies and
 30554 Life Insurance policies during the year 2013-14. The LIC
 accredited 198 branches of the Bank as Bima Bank, besides 17 Zones
 which were declared as BIMA Zone. The Delhi Zone became Double Bima
 Zone.  The Bank offers group insurance scheme of LIC namely ''Maha
 Suraksha Deposit Scheme (New One Year Renewable Group Assurance Plan'')
 a life insurance cover of Rs 1 lakh for deposit account holders. The
 Bank offers Maha Swasthya Yojana, a Family Floater Group Mediclaim
 Policy of United India Insurance Co. Ltd. for its customers.
 The Bank earned a commission of X 7.32 crore from life insurance,
 showing growth of 10 per cent and X 4.12 crore for non-life insurance
 business during the year 2013-14 showing increase of 18 per cent.
 2.11 Mutual Fund Activity
 The Bank has a tie-up with 25 AMCs (Asset Management Companies) for
 selling Mutual Fund products. The mutual fund business mobilized by the
 Bank earned commission income of X 5 lakh during the year.
 2.12 Government Business
 During the year 2013-14, 544553 challans of Direct Taxes were
 collected ADs- similarly 1,89,696 challans of Indirect taxes were 
 collectedby the branches. Our Branches are also collecting other state 
 Govt. taxes including GRAS of Maharashtra State and the total number of
 Challans collected during the Year is 5,41,220.  Total commission to
 the tune of X 2.70 Cr was received on Tax collection business from
 Central Government and Commission received from states Tax collection
 business is X 0.72 Cr.  The Bank has started processing and crediting
 monthly pension payments of more than 1,13,624 Central Government,
 Defence, Railway and Telecom pensioners at Central Pension Processing
 Cell (CPPC), Pune. The processing and payment for new PPOs/ corrigendum
 PPOs Master Data base for central Government pensioners etc are being
 handled by CPPC. This facilitates faster and accurate payment of
 pension as well as quick settlement of funds by RBI. Timely complaint
 redressal system has also been established for pension complaint. The
 commission on Government Business (Pension) for the Year 2013-14 is X
 13.57 Cr.
 The unique facility of direct  ACY- Indirect taxes  ACY- VAT collection 
 of Maharashtra is provided by the Bank, at the branch counter in all
 branches through Maha e-seva services. E-payment of Taxes facility
 available for net banking customers is also available for direct /
 Indirect Taxes / VAT payments (for Govt. of Maharashtra).  The tax
 payment facility has been introduced for e-payment of custom duty  ACY- 
 the Maharashtra State taxes are collected through integration in Govt.
 Revenue Accounting System (GRAS) both online and across the counters.
 The Bank has added Karnataka and Delhi states for collection of state
 Government commercial taxes. Bank is offering its services in VAT
 Collection in U.P in all branches.
 2.13 Non Interest Income
 The non-interest income stood at X 894.19 crore for the year ended
 31.03.2014 as against X 912 crore for the year ended 31.03.2013.
 Non-interest income (other than profit from sale of investment),
 increased by X 23.20 crore in the FY 2013- 14, showing a growth of
 3.02 ACU- over previous year. During the year, income from commission,
 exchange and brokerage increased by X 53.48 crores from X 491.34 to X
 544.82 crores.
 2.14 Income, Expenditure and Profitability
 The total income of the Bank grew from X 10525.43 crore to X 12850.85
 crore indicating a growth of 22.09 per cent during the year.
 The detailed income/ expenditure components are as under:
                                                         (Rs. in crore)
 Particulars                     2013-14     2012-13      Variation
                                                          (per cent)
 Interest / discount on          9187.15     7298.50          25.88 
 advances / bills
 Income on investments           2543.03     2231.28          13.97
 Interest on interbank 
 lending  ACY-                        226.48       83.65         170.74 
 other Interest
 Total interest income          11956.66     9613.43          24.37
 Non-interest income              894.19      912.00          -1.95
 Total Income                   12850.85    10525.43          22.09
 Interest on deposits            7697.04     5879.25          30.92
 Interest on borrowings           107.93      312.27         -65.44
 Other Interest expenditure       642.76      388.57          65.42
 Staff expenses                  1595.76     1187.82          34.34
 Other Operating expenses         800.99      608.82          31.56
 Total Non interest expenses     2396.75     1796.64          33.40
 Total Operating Expenses       10844.48     8376.73          29.46
 Operating Profit                2006.37     2148.70          -6.62
 Provisions and Contingencies    1620.40     1389.18          16.64
 Net Profit                       385.97      759.52         -49.18
 2.15 Financial ratios
 Particulars                         2013-14     2012-13
 EPS (Rs.)                                .56       11.88
 Cost to Income Ratio (percent)         54.43       45.54
 Return on assets (percent)              0.30        0.74
 Return on equity (per cent)             5.93       17.32
 Book value per share (Rs.)             66.69       67.10
 Profit per Branch(Rs. in lakh)          20.42       43.95
 Profit per employee (Rs. in lakh)        2.68        5.59
 Business per Branch (Rs. in crore)     109.61       98.80
 Business per employee (Rs. in crore)    14.39       12.56
 Interest income as per cent to 
 Average                                  9.24        9.33
 working funds
 Non Interest income as per 
 cent to average                          0.69        0.88
 working funds
 Net Interest Margin (per cent)           2.71        3.10
 Operating Profit as per cent 
 to average                               1.55        2.08
 working Funds
 Staff expenses as a percent 
 to average                               1.23        1.15
 working funds
 Dividend (per cent)                     10.00       23.00
 Net worth (Rs. Crore)                 6184.11     5026.57
 CRAR ( ACU-) (Basel II)                     10.79         Nil
 Of which, Tier I CRAR ( ACU-) 
 (Basel II)                               7.44         Nil
 2.16 Capital from Government of India
 During the year, the Bank received equity share capital amounting to X
 800 crore (including share premium of X 622.38 crore) from Government
 of India (GOI) through allotment of shares on preferential basis. With
 capital infusion, the share holding of GOI in equity share capital
 increased to 85.21 ACU- as on 31.03.2014.
 2.17 Net worth
 The Bank''s Net worth increased from X 5026.57 crore as on 31.03.2013 to
 X 6184.11 crore as on 31.03.2014.
 2.18 Capital Adequacy Ratio
 The Capital Adequacy Ratio stood at 10.79 per cent as on 31.03.2014,
 against the minimum 9 per cent prescribed by RBI in terms of Basel III
 norms. The Common Equity Tier I capital adequacy ratio stood at 7.44
 per cent.
 2.19 Dividend
 The Board has recommended X 1 per share (10 ACU-) being interim dividend as
 final dividend for FY 2013-14.
 3.1 Branch Expansion
 During the year, the Bank opened 162 new branches, the largest number
 of branches opened by the Bank in a financial year since inception. As
 on 31.03.2014, the total branch network comprised of 1890 branches
 spread over 29 states and 4 union territories. The branch network
 includes specialized branches in the areas of foreign exchange.
 government business, treasury  ACY- international banking.  industrial
 finance, small-scale industry and hi-tech agriculture.  pension
 payment, pension processing, retail credit, Self Help Groups and asset
 Area wise classification of branches as on 31.03.2014 is given in the
 table below:
 No.  Classification    As on 31.03.13   As on 31.03.14
 1    Rural                  591              648
 2    Semi-Urban             357              424
 3    Urban                  344              368
 4    Metropolitan           436              450
      Total                 1728             1890
 3.2 Human Resources Management
 The Bank has put in place a comprehensive HRM Policy that provides the
 road map for acquiring appropriate  ACY- need based human resources, its
 development through training, job enrichment, reward and recognition
 for better performance, career progression, welfare and retention.
 During the year the Bank recruited 1224 probationary officers and 10
 law officers. The Bank has also recruited 487 Clerks during the year.
 Inter scale promotions of officers were carried out for promotions to
 Scales MMGS II and above. Total 1237 officers were promoted to higher
 The cadre wise staff position shows that there is net addition of 776
 employees during the FY 2013-14. The particulars are as below:
 No.  Particulars     March 2014    March 2013
 1    Executives          514          418
 2    Officers           5576         4589
 3    Clerks             5867         6065
 4    Sub Staff          2439         2548 
      Total             14396        13620
 To recognize outstanding performance in Banking activities and to
 motivate others to perform better, various schemes like Performance
 Linked incentives to all staff of Best Performing Branches etc. are in
 vogue. Tamiya Branch (Jabalpur Zone) has been awarded the Rolling
 Trophy in name of Bharat Ratna Dr.  Babasaheb Ambedkar for Excellent
 Performing Branch Category in disbursement and recovery of advances to
 SC/ST community.
 During the year, 1053 employees ceased to be in service on account of
 retirement, resignation, termination and death.
 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 Central Welfare Committee
 consisting of management  ACY- employees representatives.
 The Bank has endeavored to promote 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 Head Office and all Zonal Offices are
 functioning to monitor the implementation of the reservation policies
 and to redress grievances of SC/ST/OBC  ACY- Physically challenged
 employees as well as ex-servicemen.  The Bank has designated Chief
 Liaison Officers at Head Office and has set up SC/ST Cells at each of
 its 34 Zonal Offices for the purpose. During the year periodical
 meetings were held with SC/ST/OBC Employees Association to discuss
 implementation of reservation policy and other constitutional safe
 guards and also to facilitate involvement in business growth. Similar
 meetings were also held at Zonal level.
 The number of employees belonging to different categories is as under:
 Sr.  Category of Employees     No. of     Percentage
 No                            Employees    to total
 1.   Women                      3767        26.17
 2.   Physically Challenged       188         1.31
 3.   SC Employees               2788        19.37
 4.   ST Employees               1091         7.58
 5.   OBC Employees              1738        12.07
 Rosters have been maintained as per Government 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 received special attention
 during the year.
 The training programmes were also held on thrust areas like financing
 SMEs, retail lending, agriculture finance and rural development.
 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 train the
 Officers and staff to utilize information technology for effective
 customer service and efficient back office functions.
 The highlights of training activity during the year are as under ADs-
 - 322 training programs were conducted during the year out of which 111
 were for officers, 153 were for clerks and 58 were for sub staffs.
 - Total of 8661 staff members participated in various training
 programs, consisting of 5429 officers, 2139 clerks and 1093 sub staff.
 - A total of 917 SCs, 315 STs and 1207 women employees were trained
 during the year.
 - During the year 1461 employees were trained in Information
 - In addition, 2024 employees were deputed to different external
 training establishments.
 - 11 Executives were deputed to Training Institutes outside India for
 International Exposure.
 - 7 programmes for pre- promotional training to SC/ST employees were
 conducted during May - June 2013.  Total 298 candidates attended the
 - 4 programmes on Pre retirement counseling were conducted for the
 employees retiring during the year.  Besides lecture on investment
 planning, health check up of participants were also arranged.
 3.3 Technology Initiatives
 The year 2013-2014 has been a milestone year for the Bank as far as
 technology implementation and up-scaling is concerned. During the year,
 Bank expanded its ATM Network from 692 ATMs to 1827 ATMs, covering
 nearly all the 1890 Branches of the Bank. The implementation of Bank''s
 Own ATM Switch commenced during the Year and has been implemented LIVE
 from 08th May 2014. Bank has been in the forefront of Technology in
 Business  ACY- related activities.
 Bank has a state-of-the-art Tier III Data Centre and Disaster Recovery
 (DR) Centre. A Near DR Site is also established to help the Bank
 achieve Zero Data Loss Objective, in the event of any untoward
 incident. We are one of the few Public Sector Banks to implement Near
 DR Site over last two years. The efficacy of Near Site is tested twice
 a year during DR Drills conducted by the Bank.
 Bank has its own Corporate Network  ACI-MAHANET ACI- with all Branches, 
 Zonal Offices, Training Colleges / Centers and Head Office interconnected 
 and working under Core Banking Platform. Its robust  ACY- secure Network
 Technology Architecture ensures seamless services to the customers.
 During the year 2013-14, the process of migration of the network to
 highly redundant and reliable Multi Protocol Label Switching (MPLS)-
 VPN (Virtual Private Network) based architecture has been completed.
 With this, we are sure that the Bank''s new network is scalable so as to
 serve our customers even better and introduce more customer centric
 applications. Bank has also pioneered in implementing niche network
 technologies such as 3G, CDMA, etc as back up communication media to
 ensure high availability to the branches.
 Bank is having two ATM Galleries, one in Bajirao Raod  ACY- one in Shivaji
 Nagar, set-up with a view to provide integrated technology services
 under one roof.
 Bank has collaborated with VISA for International Debit Cards and with
 NPCI for Rupay Debit Cards. Bank has also been the first Bank to launch
 Rupay Kisan Debit Card - a Government of India initiative.
 The payment and settlement systems viz., RTGS and NEFT are running on
 robust platform facilitating straight-through- processing (STP) model.
 In order to promote e-transactions  ACY- popularize the usage of NEFT
 Transactions, the service charges on NEFT transactions up to X 1.00
 Lakh are waived.
 The Bank is taking special efforts to encourage transactions through
 alternate channels such as ATM, RTGS / NEFT Internet Banking, Mobile
 Banking, ECS etc. More than 40 percent transactions are now being
 carried out by customers through these alternate channels. Bank is
 constantly pursuing efforts to enhance usage of these channels through
 various incentive schemes which have been implemented during the year.
 Various facilities are being provided through our Internet Banking
 platform for facilitating online payment of taxes, utility bill
 payments, online shopping / e-commerce, railway reservation, LIC
 premium payment, etc and facility for viewing tax credit statement 26AS
 and Demat account with the Bank.
 As a part of the effort to respond to the ever evolving information
 security trends and the responsibility to enhance security features in
 the Internet Banking facility, Two Factor Authentication (2FA) Solution
 for Retail Users  ACY- active Corporate Users is rolled out.
 Bank has robust Information Security Management System (ISMS) framework
 in place. Its information security policy statement being:  ACI-Bank of
 Maharashtra is committed to protect and safeguard the critical
 information of all stakeholders in order to ensure secure business
 operations ACI-
 In order to strengthen the ISMS framework further, Bank had gone for
 ISO 27001:2005 Certification for its IT division including Data Center,
 Disaster Recovery Center and CBS Project Office. Bank has ensured
 continuation of the ISO 27001:2005 certification for the year 2012-13
 and now 2013-14 as well.
 Bank has in place a captive Security Operations Centre (SOC) for
 monitoring Critical IT Infrastructure on 24 x 7 basis. The SOC shall
 enable the Bank to effectively address security threats by constant,
 proactive monitoring of security events and meet the compliance
 requirements. This has enabled the Bank to automate the vulnerability
 discovery process by constantly analyzing the logs generated by the
 core IT security and application infrastructure. The other services
 namely Anti- Phishing  ACY- Anti-Trojan services are also implemented.
 As a part of Customer Initiatives, online facilities are made available
 to customers for opening of savings bank accounts and also accounts
 under New Pension Scheme. Bank has also made available facility for
 submitting applications online for various credit facilities including
 Housing, Education, Vehicle, MSME, Consumer and any other Loan product
 (Generic application to accommodate any other credit facility
 requirement of the customer).
 Bank has launched a plethora of New IT products/services for Customers
 like Cheque Deposit Machines, Digital Media Signage, Queue Management
 Solution (PoC Basis), Standardized Public Grievances Redress System
 (PGRS) Software, Software for Searching Branch  ACY- ATM Locations of the
 Bank, SMS to renewed Card Holders, e-Pact New Pension Scheme (NPS) LITE
 Software, POS Usage enabled for all Rupay Cards etc.
 Implementation of Biometric Authentication for Branch Staff is taken up
 and expected to be completed by 31/05/2014.
 Automated Data Flow, an RBI Initiative, has been implemented LIVE from
 31/12/2013, as per RBI Timelines.
 Cheque Truncation System has been implemented at all 27 Centres under
 Southern Grid  ACY- 20 Centres under Western Grid including Mumbai.
 Bank has implemented own Business Correspondent Model at Solapur. Under
 this model we have provided 1000 Micro ATMs to all Regions of the Bank
  ACY- implementation is in progress.
 All the branches of Maharashtra Gramin Bank, the Regional Rural Bank
 sponsored by the Bank are working under CBS since 2011  ACY- are
 implementing various initiatives to be in tune to meet the demands of
 customers and business development.
 Bank proposes to take up following new IT Initiatives during 2014-15.
 - Newer / Evolving Branch Transformation Initiatives with focus on
 enhancing customer experience. Centralization of Liability Processing
 Centre (CLPC) / Asset Processing Centre (CAPC).
 - Work towards establishment of Enterprise-Wide Data Warehouse,
 Business Intelligence  ACY- Analytical CRM.
 - New - generation Mobile Banking application that can work with
 variety of mobile phones  ACY- platforms and provide secure transactions.
 - Upgrade of Bank''s Call Centre to a complete inbound and outbound call
 - E-Surveillance System to cover all ATMs.
 Project  ACI-Utkarsha ACI-
 Bank has taken a novel step in the month of July, 2013 by forming a new
 department by name ACI- Department of Strategic Initiatives ACI-. The 
 project is named  ACI-Utkarsha ACI- and is a business transformation 
 programme. Bank has engaged EY as consultants for the transformation. A 
 team of 12 officers headed by an AGM is also formed to undertake this 
 project. Time lines and the scope of work are defined and the expected 
 time for the project completion is 18 months. The objective of Utkarsha 
 is to draw a strategic roadmap and align Bank''s operating model to emerge 
 as a more competitive, agile and efficient player. Project  ACI-Utkarsha 
 ACI- encompasses six core elements namely Branch Transformation,
 Centralization and Business Process Re-engineering, Sales Enablement
 for retail and SME loans, Alternate Channels, Human Capital and Capital
 The Outline of the Transformation Program  ACI-Utkarsha ACI-
 - Grow Rapidly
 - Identify key drivers for growing deposits and advances business
 - Revamp sales structure and augment skill-set to improve sales
 efficiency and effectiveness
 - Identify opportunities to streamline processes, aggregate non-core
 processes at back-end and enhance productivity
 - Design an efficient operating model to ensure business growth is not
 achieved at expense of efficiency
 - Optimize costs with rising scale of business, increase share of
 fee-based income and improve productivity to enhance profitability
 - Create a roadmap to ensure capital efficiency
 3.4 Customer Centric Initiatives taken by the Bank
 The Bank has pursued high standards of customer service to ensure
 customer satisfaction throughout 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  ACI-Deposits ACI-,  ACI-Collection of Cheques/ instruments 
 ACI-,  ACI-Redressal of Grievances ACI-,  ACI-Compensation ACI- and  
 ACI-Operational Procedure for settlement of claims of Deceased Depositors
  ACI- are in place.
 The Committee of the Board on Customer Service meets periodically to
 monitor the quality of customer service.  redressal of customer
 grievances to ensure customer satisfaction. The Standing Committee on
 Customer Service at Head Office and Zonal Level Customer Service
 Committees at all the Zonal 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, Corporate, businessmen,
 senior citizens are invited to attend the Customer Service meetings at
 Branch/Zonal/Head Office level, to have feedback and suggestions on
 schemes, products and services. Full-fledged grievances redressal
 machinery is in place to respond promptly to customer grievances.
 Complaint Management Cells are operative at Head Office and all Zonal
 Offices of the Bank. The Committee of the Board on Customer Service and
 Standing Committee on Customer Service at Head Office monitor the
 progress of redressal of customer grievances regularly.
 The Bank has implemented all major recommendations of Goiporia
 Committee, Dr.S.S. Tarapore Committee and Damodaran 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/
 Bank has printed folder called  ACI-My Folder ACI- containing all customer
 service policies, information on service charges, guidelines on
 Government Schematic Loans, Ombudsman and BCSBI codes. The same is
 printed in Marathi, Hindi and English and supplied to all branches and
 Zones for making the same available to all customers on demand.
 Standardized Public Grievances Redressal System:
 Bank is in process of implementing  ACI-Standardized Public Grievances
 Redressal System (SPGRS) ACI- introduced by GOI, MOF, Department of
 Financial Services, New Delhi on 11.06.2012. I T Department and
 Planning Department in Head Office are developing In House software for
 Integrated Public Grievances System.
 Installation of Kiosk Machine for online registration of complaints:
 Kiosk Machine arrangement has been made at Head Office to enable the
 customers to register on line complaints/ suggestions, and its
 operation is started w.e.f. 14.03.2013.
 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 Prevention of Money Laundering Act (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 to sensitize the employees.
 3.6 Risk Management
 Banks are faced with a variety of risks while conducting day to day
 banking operations. Bank has its Risk Management Frame work in
 accordance with the RBI Guidelines and benchmarks itself against the
 industry best practices. This enables the Bank to identify, measure,
 monitor and manage risk efficiently.
 The Board of Directors of the Bank reviews all Risk Management Policies
 and Strategies and establishes control systems in line with the Bank''s
 aggregate Risk Appetite. The Board of Directors is supported by the
 Risk Management Committee of the Board (RMC) and RMC is supported by
 sub- committees known as Credit Risk Management Committee (CRMC),
 Market Risk Management Committee (MRMC), Operational Risk Management
 Committee (ORMC) and Asset Liability Management Committee (ALCO). These
 Committees are headed by Chairman and Managing Director. Executive
 Directors and General Managers are the members of the Committees.
 Risk Management Policies
 In order to provide ready reference and guidance to field
 functionaries, Bank has put in place various Board approved Risk
 Management Policies viz. (i) Credit Risk Management Policy, (ii) Market
 Risk Management Policy, (iii) Asset Liability Management Policy, (iv)
 Operational Risk Management Policy, (v) Stress Testing Policy, (vi)
 Outsourcing Policy, (vii) Business Continuity Planning Policy, (viii)
 Disclosure Policy, (ix) Utilization of Credit Risk Mitigation
 Techniques and Collateral Management Policy  ACY- (x) Internal Capital
 Adequacy Assessment Process (ICAAP).
 Credit Risk Management
 Credit risk is the possibility of a loss being incurred as the result
 of a borrower or counterparty failing to meet its financial obligations
 or as a result of deterioration in the credit quality of the borrower
 or counterparty. Effective credit risk management is a structured
 process to assess, measure, monitor and manage risk on a consistent
 basis. This requires careful consideration of proposed extensions of
 credit, the setting of specific limits, monitoring during the life of
 the exposure, active use of credit mitigation tools and a disciplined
 approach to recognizing credit impairment. The Credit Risk Management
 process forms an integral part of overall risk management of the Bank.
 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.
 The Bank has put in place comprehensive Lending Policy, Loan Review
 Policy and Credit Risk Management Policy for credit risk management.
 The policies prescribe various guidelines, procedures, standards and
 prudential / exposure norms.
 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 III. In house developed rating
 model in TIBD is also in use to rate Non-SLR Investments. The Bank
 utilizes industry risk rating from reputed credit rating agency and
 incorporates the industry risk score in the CRR Models. Bank also uses
 the rating assigned by RBI approved external credit rating agencies in
 its credit decision.
 The Bank has prescribed threshold ratings for entry level exposures
 with a view to building up credit portfolio within the risk appetite
 and achieves the profit plan. With a view to separating the Credit Risk
 Management function from credit sanctioning, Credit Risk Rating
 Approval Grids are set up at various levels at Head Office and at
 Treasury  ACY- International Banking Division (TIBD), Mumbai 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 requirements. To achieve risk-return trade
 off, risk based pricing framework has been implemented and reviewed
 The Bank undertakes following studies periodically to assess Credit
 Compliance to Prudential Norms as per Lending Policy
 Credit Portfolio Review
 Assessment of Concentration Risk in Assets  ACY- Liabilities
 Quick Mortality of Loans and Advances
 Country Risk Management
 Aggregate exposure on other banks
 Stress Test Report - Credit Risk
 Finding of these studies are placed before the Credit Risk
 Management Committee (CRMC), Risk Management Committee (RMC) and the
 Board on periodical basis.
 Market Risk Management
 Market Risk is the risk to the Bank resulting from adverse movements in
 market prices due to changes in interest rates, foreign exchange rates
 and equity price. The changes impact the Bank''s earnings and capital
 and can have ramifications on the Bank''s liquidity and profitability.
 Bank has its separate Market Risk Management Committee which reviews
 Market Risk Management Policy on regular basis and reports
 modifications, if any, to the Risk Management Committee  ACY- the Board for
 approval. The Bank''s Market Risk Management Policy aims to set out the
 broad processes i.e. by which the Bank will identify risks in the areas
 of Interest Rate Risk, Forex Risk, Equity Price Risk and Options Risk.
 Reporting framework has been prescribed for internal reporting,
 Regulatory reporting and Pillar III disclosures.
 Interest Rate Risk Management
 Interest rate risk is the risk where changes in market interest rates
 affect a bank''s financial position. Changes in interest rates impact a
 bank''s earnings (i.e. reported profits) through changes in its Net
 Interest Income (NII) and also impact a bank''s Market Value of Equity
 (MVE) or Net Worth through changes in the economic value of its rate
 sensitive assets, liabilities and off-balance sheet positions. The
 interest rate risk, when viewed from these two perspectives, is known
 as ''earnings perspective'' and ''economic value perspective'',
 Accordingly, Bank uses the following tools to manage interest rate
 1.  Traditional Gap Analysis (TGA) which is undertaken through the
 preparation of Interest Rate Sensitive Gap Reports on a monthly basis.
 2.  Earning at Risk: Calculation of impact on NII due to 1 ACU- change in
 interest rates. It also takes into account Basis Risk, Embedded Option
 Risk, Yield Cure Risk, Net Interest Position Risk, Price Risk and
 Reinvestment Risk.
 3.  Duration Gap Analysis (DGA) which focuses on the bank''s exposure to
 Interest Rate Risk in Banking Book (IRRBB) in terms of sensitivity of
 Market Value of its Equity (MVE) to interest rate movements.
 4.  Modified Duration: Considering the interest rate risk in the
 portfolio, the Bank has set upper limits of Modified Duration for
 AFS HFQ- category and also the upper limit for total investment
 5.  Value at Risk: Value at Risk (VaR) for treasury positions is
 calculated for 1 Day, 10 Days and 30 Days for 99 ACU- Confidence Level.
 The Bank has constituted Asset Liability Management Committee (ALCO),
 which meets at regular intervals to review the interest rate scenarios,
 liquidity positions in the banking book etc. The ALCO manages and
 supervises 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 while
 managing interest rate risk.
 The ALM Policy, which is reviewed annually, prescribes the parameters
 for management of Liquidity Risk, Interest Rate Risk, etc.
 Investment Risk is managed through the prescriptions made in the
 Investment Management Policy  ACY- Investment Risk Management Policy.
 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, interbank exposure
 limits etc. have been put in place. These limits are monitored
 The ''Liquidity Risk is measured and managed through ''Gap analysis'' for
 maturity mismatches by reviewing structural liquidity position on daily
 basis and short term dynamic liquidity on fortnightly basis. Bank is
 conducting behavioral studies in GAP analysis. Stress testing is
 undertaken periodically.
 Operational Risk Management
 Operational risk is the risk of loss resulting from inadequate or
 failed internal processes, people or systems or from external events.
 Bank''s primary aim is the early identification.  recording, assessment,
 monitoring, prevention and mitigation of operational risks, as well as
 timely and meaningful management reporting.
 The Operational Risk Management Committee (ORMC) meets regularly to
 review the matters related to operational risk.  Under the Operational
 Risk Management Framework and ORM Policy, Bank is identifying,
 measuring, monitoring and controlling/mitigating operational risks by
 analyzing historical loss data, Risk and Control Self-Assessment
 Surveys (RCSAs) and Key Risk Indicators (KRIs). 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
 Under the Risk based supervision, Risk Profile Template covering five
 business risks and two control risks are prepared on quarterly basis
 and submitted to RBI.
 Rating of the branches is done under Risk-based Internal Audit (RBIA)
 and the position is reviewed every quarter.
 Implementation of Advanced Approaches of Capital Computation
 The Bank will enhance its Risk and Capital Management capabilities by
 migrating to the Advanced Approaches of the Basel framework. Advanced
 approaches include Foundation and Advanced Internal Ratings Based
 Approach (''FIRBA  ACY- ''AIRBA) for Credit Risk, Standardized and Advanced
 Measurement Approach (TSA  ACY- AMA) for Operational Risk and Internal
 Models Approach (''IMA) for Market Risk.
 3.7 Internal Control Systems
 Inspection  ACY- Concurrent Audit:
 The Inspection and Audit system  ACY- various measures of internal control
 are adopted by the Bank to ensure identification /assessment and
 mitigations of operational risks.
 Internal Audit of branches:
 As per Seth Committee guidelines the Bank is conducting Risk Based
 Internal Audit of the branches. RBIA of all the branches which were due
 for RBIA during the year, were conducted while complying with the
 Jilani Committee recommendations. It was endeavored that the top 200
 branches in advances terms of the Bank are covered under RBIA during
 the year.
 During the year the Bank has implemented some strategic decisions so as
 to strengthen the internal control system such as,
 - Commencement of Off-site monitoring system in which reports on some
 important/sensitive areas are extracted from the CBS system on
 daily/weekly/monthly basis so that necessary timely
 rectification/action can be taken.
 - On the spot rectification of at least 51 ACU- irregularities during the
 course of inspection itself in the branches.
 - Implementation of Document mechanization system.
 - Initiating the process of Web Based application system so as to
 improve Branch Inspection, Concurrent Audit system and Off-site
 During the year the Bank also organized conference of all Inspecting
 Officials and Heads of Inspection Cells so as 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:
 Surprise Inspection of 23 branches, focusing mainly on high risk areas
 was also carried out in pursuance of Ghosh Committee Recommendations.
 All the 23 reports are closed.
 Concurrent Audit:
 As per approved Audit Plan for 2013-2014, 418 branches and three
 departments of the Bank are covered under Concurrent Audit covering
 about 75.78 ACU- of Bank''s total business.
 Income  ACY- Expenditure Audit (I.  ACY- E. Audit):
 I.  ACY- E. audit is carried out at 180 branches as per approved plan for
 the period 01.10.2012 to 30.09.2013 having total business above X 25.00
 crore  ACY- advances above X 5.00 crore.
 Expenses Audit of Zonal Office:
 In order to have control over expenditure at Zonal Offices a system has
 been put in place through half yearly Expenses Audit for every March
 and September half years. The expenses audit of 34 Zones were conducted
 as of 30.09.13.
 Snap Audit:
 The Bank has also initiated the process of Snap audit of select
 branches where the growth in advances is inconsistent or especially
 contrary to the past trend.
 Management Audit:
 For assessing their effectiveness of Zonal Offices and different
 departments in the Head Office in terms of supervision and control,
 Management Audit of 17 Zonal offices and 16 departments at Head Office
 was carried out during the year.
 RBI Inspection under Section 35 of the Banking Regulation Act:
 The Bank was also subject to RBI inspection under Section 35 of the
 Banking Regulation Act besides that two branches were also inspected
 during the year.
 Bank has also reviewed the AML parameters as per IBA guidelines and
 Prevention of Anti Money Laundering Act. In order to ensure efficacy of
 the AML system, a centralized AML Cell has been established at Head
 3.8 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 favor. ''Vigilance'' in the 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 several
 necessary steps. ''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.
 ''Vigilance Manual'' has been issued by the bank and various aspects of
 vigilance and other related issues have been dwelt upon for information
 and necessary action of the field functionaries.
 3.9 Compliance
 The Bank has put in place a Compliance Policy, based on the guidelines
 of Reserve Bank of India. The Compliance Department, headed by the
 Chief Compliance Officer monitors the compliance functions. It ensures
 the implementation of the statutory/regulatory guidelines coming into
 force from time to time. The issues relating to regulatory/ statutory
 compliances are addressed appropriately. The status of compliance is
 placed for review to the Top Management / Audit Committee of the Board
 periodically. To improve the awareness on the compliance functions in
 the Bank, sessions are appropriately included in various training
 programmes arranged for the officers /staff members.
 3.10 Marketing  ACY- Publicity
 With a view to publicize Bank''s various products and also brand image
 coupled with corporate social responsibilities, Bank has sponsored
 various programs like  ACI-Sponsorship to BWF Badminton world super 
 series  ACY- Ashian Athletics Championship ACI-  ACI-Connotation on 
 Global warming ACI-  ACI-Sponsorship for Mobile dispensary/Dialysis 
 machine  ACY- other medical equipments ACI-  ACI-Child Development Centre 
  ACY- Health camps for SHGs ACI-  ACI-Project Spinal injury centre ACI- 
 etc. Bank has also donated towards relief fund to Flood  ACY- Cyclone 
 affected people and development of Tribal villages.
 3.11 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.
 4.1 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  ACY- Small Enterprises, Retail Traders, Professional  
 ACY- Self Employed, Women Entrepreneurs and entrepreneurs from 
 economically weaker sections.
 The outstanding advances under Priority Sector as of 31st March 2014
 aggregates to X 32010.68 crore, constituting 41.99 ACU- of the Adjusted 
 Net Bank Credit.
 The rise in Priority Sector Advances in absolute terms is X 7291.32
 crore over previous year March 2013, resulting into growth of 29.50 
 ACU- on y-o-y basis.
 4.2 Agriculture
 The Bank disbursed X 5909.54 crore for agriculture and allied
 activities during the year 2013-14. The total outstanding advances to
 agriculture sector have shown a growth of 28.89 per cent on y-o-y
 basis, to reach a level of X 10276.07 crore as on 31.03.2014.
 The Bank undertook awareness/sensitization programmes for all the
 branches for increasing advances to agriculture by providing hassle
 free credit to farmers.
 4.2.1 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
 470762 Kisan Credit Cards to farmers.  Credit flow to MKCC
 beneficiaries has reached to the level of X 4312.60 crore as on
 31.03.2014, registering a growth of 42.83 ACU- on y-o-y basis.
 4.3 Micro, Small and Medium Enterprises (MSME)
 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 X 11288.92 crore as at 31.03.2013, increased to X 15098.25
 crore as at 31.03.2014, which translates into a y-o-y growth of 33.74
 per cent.
 Mahabank MSME centres - Centralized Processing Cell have been set up
 for speedy disposal of MSME proposals at Pune, Hyderabad, Delhi and
 4.3.1 Maha-Entrepreneur
 Under the scheme, the Bank is providing for supporting SMEs in rural
 areas finance up to X 100.00 lacs 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 50 ACU- annual guarantee fee for loans above X 10.00
 lakh  ACY- entire annual guarantee fee for loans below X 10.00 lakh. The
 Bank sanctioned loans of X 1040.37 crore to 11,436 borrowers under this
 scheme up to March 2014. During the current FY coverage under Credit
 Guarantee Fund Scheme has increased by 36.11 ACU-.
 5.1 Credit Flow to Retail Sector
 The Bank is providing retail loans to salaried persons, professionals,
 businessmen and pensioners for purchase of consumer durables, two/four
 wheeler vehicles and also for other personal needs.
 5.1.1 Centralized Processing of Retail loans:
 There are 14 Retail Asset Branches and 18 Retail Processing Centers
 covering all the Zones for hassle free and quality disbursement of
 retail loans.
 5.1.2 Mahabank Gold 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 credit requirement of our customers, Bank
 has launched a new retail loan product  ACI-Mahabank Gold Loan Scheme ACI- w.
 e. f. 01.11.2010. The total portfolio of Gold Loan of our Bank is X
 624.62 crore.
 5.1.3 Mahabank Top-Up Loan Scheme
 In order to extend additional credit support to our regular housing
 loan borrowers, Bank launched another new Retail Loan product  ACI-Mahabank
 Top-Up loan scheme ACI- 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 34.63 percent during the year to reach the level of
 X 8854.40 crore as of 31.03.2014. The Bank is also implementing Golden
 Jubilee Rural Housing Scheme of the Government of India in rural areas
 having population not exceeding 50,000. Bank is having online facility
 to apply for housing loan, which has evoked positive response.
 5.2.1 One per cent Interest Subvention on Housing Loan up to X 15.00
 As per GOI guidelines, Bank has provided 1 ACU- interest subvention to
 borrowers, who availed housing loans upto X 15.00 lakh costing worth
 upto X 25.00 lakh. During the year 2013-14, 5941 borrowers benefited
 under the scheme to the extent of X 5.50 crore.
 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 2014, the Bank had lent X 637.34
 crore to 29,876 students. The Bank has provided the facility of
 submission of application for education loan through web-access (on
 line) also.
 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 specialized
 SHG branches in all six lead districts and at Goregaon, Mumbai.
 As on 31.03.2014, there were 108964 SHGs formed by the Bank, out of
 which 97261 SHGs have been linked with the bank credit with outstanding
 of X 160.71 crore as on March 2014.
 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 31.03.2014 to SC/ST
 beneficiaries stood at X 1511.80 crore, constituting 20.41 per cent of
 advances to weaker sections.
 5.6 Advances to Minority Community
 A special cell has been set up at Central Office to review  ACY- ensure
 smooth flow of Credit to minority community. As of March 2014, the
 outstanding advances to minority communities were at X 2258.72 crore to
 102,106 beneficiaries.
 5.7 Door Step banking Services
 Bank has introduced Door Step Banking Services for its High End
 Customers and the services include Corporate and Retail Cash pickup and
 delivery  ACY- Cheque Collection Services, at Clients'' Doorstep. The
 Services has been initially introduced in Mumbai and Pune which is now
 extended to all Centers except branches in the Bhopal Zone.
 5.8 BOM SBI International Credit Card
 Bank is offering Co-branded International Credit Card to its customer
 under tie-up arrangement with SBI cards. The card is offered in two
 variants viz.Platinum and Gold card. As on 31.03.2014, the outstanding
 number of cards issued to its customer is 23861.
 5.9 National Pension System (Swavlamban)
 NPS Lite Swavalamban was made live in July 2013 and total 1806 branches
 are registered as NLCC (NPS Lite Collection Centre) with NSDL for
 collecting contribution under the scheme. 11833 accounts were opened
 under the scheme up to 31.03.2014.
 5.10 Tie Up
 5.10.1 Empanelment as lead Generation agent for SHCIL.
 Bank has entered into tie up arrangement with Stock Holding Corporation
 of India Ltd. (SHCIL) in Maharashtra wherein Bank is empanelled with
 SHCIL as the lead generation agent.  The bank role is to popularize
 e-stamping system across Maharashtra and provide information to
 customers and guide customers to SHCIL office for their e-stamp
 5.10.2 Remit2india'' by ''Timesofmoney''
 Bank has tie up with Timesofmoney for introducing remit2india an online
 platform for remittance of funds by NRI customers.
 5.10.3 Payment Gateway Facility
 Bank has tie up with M/s India Ltd, M/s Avenues India Ltd.,
 M/s Atom Technologies Ltd, M/s ibibo web Solution Ltd, M/s Citrus
 Payment Solutions Pvt Ltd, M/s One 97 Communication Ltd, M/s EBS
 payment System, M/s Techprocess Payment System, M/s Times of Money
 Limited for facilitating e-commerce and utility bill payment facility
 to its internet banking customers.
 5.10.4 ECS Mandate and Direct Debit System
 Bank has tied up with Bajaj Finance Ltd. and TVS Credit Pvt.  Ltd for
 ECS Mandate verification of Fresh Mandate and Direct debit system of
 5.10.5 Online Fee Collection
 Bank has entered into tie up with various Institutions during the year
 where bank is getting commission on collection of fees for Institutes
 from Branches. The bank is collecting online fee collection for Mumbai
 University from the students appearing for external educational
 programme. The Mumbai University selected Bank from the group of 5
 The Rural Development Centres at Hadapsar and Bhigwan in Pune District
 of Maharashtra have been undertaking various rural developmental
 activities for the benefit of farmers viz. Lab to Land Project,
 Re-development of Saline Soils, Soil Testing etc. Bank has established
 Soil testing Lab (STL) through MARDEF Trust at RDC Bhigwan. The Soil
 Testing Laboratory has analyzed 8892 Soil  ACY- Water samples in the year
 2013-14 and accordingly counseling is done. Farmers from the districts
 of Pune, Ahmednagar, Solapur and Satara are taking benefit of the lab.
 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,
 Goat rearing, Best practices in farming, Application of fertilizers,
 Agriculture credit schemes, etc. MARDEF Trust has implemented 96
 training programmes for farmers at RDC Bhigwan  ACY- Hadapsar and has
 benefited 5211 farmers from April 2013 to March, 2014.
 The Bank has established Seven Mahabank Self Employment Training
 Institutes (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 located at Pune,
 Nagpur, Aurangabad, Amravati Jalna, Thane and Nasik. The Institute has
 so far imparted training to 12,666 educated unemployed youths. The
 settlement rate is 67 per cent.
 Gramin Mahila Va Balak Vikas Mandal (GMVBVM), an NGO formed by Bank of
 Maharashtra and National Institute of Bank Management is actively
 involved in formation, nurturing, training and ensuring linkage of SHGs
 to Bank Credit. The GMVBVM also helps SHGs in marketing products of
 SHGs through outlet established in Pune City under the name  ACI-SAVITRI ACI-.
 The GMVBVM guides and actively helps SHGs for selection and purchase of
 raw materials and quality production.
 The Bank has opened Financial Literacy Centers in Six Lead Districts
 namely Pune, Nasik, Aurangabad, Satara, Jalna  ACY- Thane for creating
 awareness about banking schemes.
 Bank has helped various NGOs during the year extending financial
 support to acquire necessary inputs for carrying their activities.
 These include the following:
 - Fixing of artificial limbs to the needy patients.
 - Diesel Generator set for the school meant for physically challenged
 - Building / classroom / Kindergarten equipments for the needy,
 mentally retarded and cerebral palsy children, cancer patients and Old
 age home.
 - Conducting cancer detection camps in slums for the needy.
 Moreover Bank has always stood for the cause of society by contributing
 at large for improving medical facilities, vocational training, basic
 amenities etc. Bank is also helping emerging sports persons at budding
 stage by sponsorships and providing financial assistance to bring the
 glory to the Nation and contributing to social cause.
 7.1 Lead Bank Scheme
 Bank has Lead Bank responsibility in six districts of Maharashtra State
 viz. Aurangabad, Jalna, Nasik, Pune, Satara  ACY- Thane. Every year our
 Bank is successful in achieving the targets under Annual Credit Plan
 with achievement under various sub sectoral targets.
 7.2 State Level Bankers'' Committee
 Bank is the Convener of State Level Bankers'' Committee (SLBC) for the
 State of Maharashtra. Quarterly meetings are held regularly. Detailed
 discussions are held and implementation of various schemes like ACP
 achievement, Priority Sector lending, financial inclusion and
 Government Sponsored Schemes are reviewed. The performance of various
 participants is monitored and guidelines are given to LDMs / Banks for
 their improvement. A special SLBC meeting was convened which was
 chaired by Hon''ble Chief Minister of the State. An ambitious ACP of X
 1.00 lakh Crore was accepted, which is highest in the country. The
 performance of SLBC was commended by Chief Minister. The crop loan
 achievement for this year was 90 ACU-. SLBC has taken proactive steps for
 supporting the farmers suffered due to Drought / Hail Storms by issuing
 guidelines immediately and following up with all the implementing
 agencies. SLBC has also taken a proactive step in providing the credit
 to the farmers in all the districts where the DCCBs are not in a
 position to lend by providing a major share of crop loans to Commercial
 As conveners of SLBC, Bank is also coordinating with all member banks
 in implementing Direct Benefit Transfer. As Convener, bank has taken
 special emphasis on opening of accounts and seeding of aadhaar numbers
 of the DBT beneficiaries, in formation of 13,431 Sub service areas and
 in coverage of all the sub service areas in DBT districts. SLBC has
 also taken proactive role in implementation of DBTL scheme. Meetings
 were held with District Authorities, OMCs and District Coordinators of
 member Banks to ensure better coordination among these implementing
 agencies. SLBC has also taken the lead in monitoring the progress for
 making available the delivery channels such as opening of branches,
 installation of ATMs and providing the services of Business
 7.3 Aadhaar Initiatives
 The Bank is acting as Non State Registrar (NSR) with Unique
 Identification Authority of India (UIDAI) to assist authority for
 enrolment of Aadhaar. For Aadhaar enrollment to the resident''s bank has
 engaged agencies. Bank has enrolled more than 21 lakh Aadhaar numbers
 with the help of these agencies Bank has taken the initiative for
 seeding of Aadhaar numbers and has approached customers requesting them
 for submission of their Aadhaar numbers. Aadhaar seeding is also done
 through our ATMs and Internet Banking apart from requests received
 directly. Due to these initiatives Bank is successful in seeding of
 more than 26 lakh Aadhaar numbers.
 7.4 Financial Inclusion Plan
 Financial inclusion is one of the key agenda items of the Government as
 well as Reserve Bank of India. Bank has taken Financial Inclusion as
 business opportunity and has made banking services available in 6,713
 villages of the State through innovative BC - ICT model. For this
 purpose bank has appointed 2,472 BC agents of various agencies for
 providing basic banking services as opening of bank accounts of
 villagers, provide need based credit, remittance facilities and help to
 promote financial literacy in rural India using various models and
 technologies including branchless models.
 Bank has opened 4,40,646 customers'' accounts through BC agents  ACY- a
 total of 28.43 lakh Basic Saving Bank Deposit Accounts (BSBDA) with an
 outstanding balance of X 203.19 Crore. Bank has also made efforts to
 make BC model sustainable by way of introducing card less technology
 for FI customers. Bank has introduced AEPS - Aadhaar Enabled Payment
 System (On us and Off us - Acquirer and Issuer) technology, both
 functioning in the same POS machine. This has helped to increase the
 number of transactions during the financial year. The number of
 transactions increased from 0.95 lakhs to 4.66 lakhs during the year.
 The amount increased multifold from X 2.93 crore to X 101 crore.
 Govt, of India is implementing the scheme of Direct Benefit Transfer
 (DBT). Under this scheme Govt. subsidies to the beneficiaries of 26
 notified schemes are directly credited to the Aadhaar enabled bank
 account of the beneficiary in 121 districts. Out of these 121 districts
 we are operating in 71 districts with 632 branches. Under this scheme
 Bank has the responsibility of three districts as lead districts. Bank
 has ensured that all the beneficiaries under the scheme have their
 account with the bank and their Aadhaar number received from the
 district authority has been seeded to the accounts and uploaded with
 NPCI server. Bank had arranged special camps for opening of accounts as
 well as for enrolment of Aadhaar.  Bank has also participated in
 implementing DBTL program and ensured maximum Aadhaar seeding of the
 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 31.3.2014 stood at 378 in its area of operation covering
 16 out of 33 districts of Maharashtra State.
 All 378 branches  ACY- controlling offices are now under CBS.  During this
 year, MGB opened 27 new branches and plans to open further more.
 During this year, CASA share has improved from 62.75 ACU- to 64.27 ACU-, 
 other income has improved from 21.75 Crore to 25.13 Crore resulting in
 increase in Net profit from 26.97 Crore to 35.51 Crore.
 Under Financial Inclusion programme, all 355 allotted villages are
 covered under ICT based model. M/s Vakrangee Finserve Ltd., selected
 through common RFP has been engaged as the BC for providing BC services
 in all the villages allotted to the Bank, which is functioning
 During this year 2013-14, MGB has grown by 7.68 ACU- in total deposits and
 14.20 ACU- in advances. It has achieved three SOI targets for the year
 2013-14. The position of SOI targets and achievement are as under:-
 Sr.                              Actual      Target     Actual
 No.   Parameter                31.03.2013  31.03.2014  31.03.2014
 14    Performance of RRBs
 14.1  Deposit Growth in  ACU-     19.12 ACU-      12.50 ACU-      7.68 ACU-
 14.2  Advance Growth in  ACU-     38.09 ACU-      20.00 ACU-     14.20 ACU-
 14.4  Branches under CBS            351         365        378 
 14.5  Profit per employee 
      (Rs. In                       2.13        2.40       2.67 
 14.6  No.  of loss making            18          30         18 
       branches (being 12
       months old or more)
 8.2 The Maharashtra Executor  ACY- Trustee Company Pvt. Ltd.  (METCO)
 The Maharashtra Executor  ACY- Trustee Company Pvt. Ltd.  (METCO), the 
 100 ACU- subsidiary of Bank of Maharashtra was established in 1946 with 
 an aim to provide services auxiliary to banking such as:
 - Consultation, Drafting  ACY- Execution of will
 - Consultation, Drafting and Management of Private Trusts / Public
 - Management of investments  ACY- house properties as attorney
 - Guardianship of minor''s property
 - Consultation for sale / purchase of property
 - Filing of I-Tax Returns for individuals
 The Company is located at Pune having its branch units at Pune,
 Vashi-Mumbai, Thane and Nagpur
 During 2013-14, company could get new assignments for management of
 additional 9 Trusts bringing total 1070 Public  ACY- Private Trusts under
 our fold for management. During the year, additional 41 WILLS were
 added making total 1069 WILLS in our custody for execution.
 At present, the Company manages properties both movable and immovable
 of 82 clients under the Power of Attorney. The Company also acts as the
 Trustees in respect of 170 policies under Married Women''s Property Act
 and as Court appointed Guardian of minor''s property in 6 cases.
 During the year 2013-14, the Bank has made various remarkable
 achievements in the field of Official Language implementation.
 Two prestigious Hindi-serving Institutions, Mumbai based Aashirvad and
 Kolkata based Rashtreeya Hindi Academy, Roopambra, awarded trophy to
 our bank for better use of Hindi implementation and and shield for
 Rajbhasha Visheshank of our house magazine  ACI-Mahabank Pragati ACI-.
 On 17th and 18th August, 2013, a two-day seminar was organized in
 Kolkata for all Official Language Officers of our bank. Seminar was
 Inaugurated by the then C ACY-MD Shri Narendra Singh.  Director of the
 bank, Dr.R.K.Agrawal also graced the occasion.
 On 14th September, 2013, Hindi day function was held in Head Office,
 Pune, which was headed by the then C ACY-MD Shri Narendra Singh. On this
 occasion, shields were presented to the winner Zonal Offices, Branches
 and Head Office Deptts of bank''s internal Rajbhasha Trophy Scheme for
 the year 2012- 13.
 On 3rd March, 2014, 29th meeting of Maharashtra State Level Banker''s
 Committee (Rajbhasha) was held at Head Office, Lokmangal, Pune.
 Executive Director, Shri R.  Athmaram headed the meeting. Shields were
 presented to the winner member banks and financial institutions of
 state level Rajbhasha Shield competition.
 Zonal Office, Akola, Raipur, Nagpur  ACY- Kolkata and Vijaywada branch of
 Hyderabad Zone were awarded various prizes for better use of Hindi by
 various Town official Language Implementation Committees.
 During the year 2013-14, Deputy Director (O.L.), Regional
 Implementation Office, Department of Official Language.  Ministry of
 Home Affairs inspected the progressive use of Hindi at our Nagpur,
 Nasik  ACY- Chennai Zonal Offices.
 Chief Manager (Rajbhasha) Shri Anand Prakash Jaiswal has been nominated
 as a member in RBI''s  ACI-Banking Glossary Committee ACI-.
 Shri Deepak Bhalchandra Karpe, Clerk of our Dewas branch has been
 awarded in RBI''s Inter-bank Hindi Essay competition.
 Hon''ble Governor of Madhya Pradesh handed over Madhya Pradesh
 Rashtrbhasha Prachar Samiti, Bhopal  ACI-Hinditar Sevi Samman ACI- along 
 with certificate to our Chief Manager, Shri Girish Vaghela.
 A national level one-day seminar was arranged by TOLIC Pune with
 support from Pune College, Camp. Our Bank is the convener of this
 The Directors confirm that in the preparation of the annual accounts
 for the year ended 31.03.2014:
 - 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 ADs-
 - 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 ADs-
 - 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 ADs- and
 - The accounts have been prepared on a going concern basis.
 During the year 2013-14, the following changes took place in the Board
 of Directors:
 Shri S.D. Dhanak ceased to be Director w.e.f. 21st July 2013.
 Shri Narendra Singh, Chairman  ACY- Managing Director superannuated on 
 30th September 2013.
 Dr N.K. Drall resigned from Directorship w.e.f 15th November 2013.
 Dr. D.S. Patel, Shareholder''s Director ceased to be Director w.e.f 1st
 February 2014.
 Dr Rajkumar Agrawal, Shareholder''s Director ceased to be Director
 w.e.f. 1st February 2014.
 Shri C.VR. Rajendran, Executive Director appointed as Chairman  ACY-
 Managing Director of Andhra Bank w.e.f 13.12.2013.
 Ms Kamala Rajan, RBI Director superannuated on 28th February 2014.
 Dr. S.U. Deshpande''s Directorship is kept in abeyance w.e.f 16th
 March2014, by Government of India.
 Shri R.L. Saydiwal was appointed as Director w.e.f. 21st July 2013.
 Shri R. Athmaram was appointed as Executive Director w.e.f 07th August
 Shri Sanjeev Jain was appointed as Director w.e.f. 19th August 2013.
 Shri Sushil Muhnot was appointed as Chairman  ACY- Managing Director w.e.f
 09th November.2013.
 Shri R.K.Gupta was appointed as Executive Director w.e.f 31st December
 Dr S.Rajagopal was appointed as RBI Director w.e.f. 13th March 2014.
 The Board of Directors place on record their sincere appreciation for
 the valuable contribution made by the outgoing Directors.
 The Board of Directors wishes to express sincere gratitude 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 and CDSL for
 their valuable advice and support ADs- to the customers and shareholders
 for their patronage ADs- to the correspondents and associates for their
 co-operation and to all the members of staff of  ACI-Mahabank Family ACI- 
 for their unstinted commitment and contribution to the overall development
 of the Bank.
                          For and on behalf of the Board of Directors
 Pune                                                      (S. Muhnot)
 Date : 26.05.2014                     Chairman and Managing Director
Source : Dion Global Solutions Limited
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