Bank of Rajasthan

The Directors have great pleasure in presenting to you the 65lh Annual
 Report of the Bank together with the Audited accounts for the year
 ended 31st March 2008.
 
 PERFORMANCE HIGHLIGHTS
 
 The performance highlights for the financial year 2007-08 as reflected
 in key financial indicators are as under: -
 
                                                 (Rs. in crores) 
                                              FY 2007-08    FY 2006-07
 
 Deposits                                      13849.35      10815.92
 Advances                                       7433.88       5704.02
 Gross NPA                                       126.19        121.04
 Net NPA                                          30.90         13.67
 Investments                                    4729.20       3640.69
 Total Income                                   1176.40        881.93
 Total Expenditure                              1061.20        771.36
 Operating Profit                                171.28        191.80*
 Net Profit after tax                            115.20        110.57
 Profit /(Loss) brought forward                  117.24         67.84
 Appropriations
 Transfer to Statutory Reserve                    28.80         27.70
 Transfer to Capital Reserve for
 Investment                                        0.08             -
 Transfer ro General Reserve                      10.00          8.30
 Proposed Dividend                                 6.72         21.51
 Dividend Tax                                      1.15          3.66
 Balance Carried over to Balance Sheet           185.69        117.24
 Business Ratios
 Return on Assets (ROA) (%)                        0.91%         1.16%
 CRAR                                             11.87%        11.32%
 Net NPA                                           0.42%         0.24%
 Business per Employee (Rs in Crores)              5.19          4.01
 Business per Branch (Rs. in Crores)              44.11         35.41
 
 
 * Includes Rs.36.54 crores profit on sale of equity shares of Bharat
 Overseas Bank Ltd. during the year ended 31st March 2007.
 
 NET PROFIT, DIVIDEND AND BONUS
 
 The net profit for the year after provisions and taxes amounts to Rs.
 115.20 crores showing a rise of 4.19% over the net profit of Rs. 110.57
 crores for the previous financial year.
 
 Keeping in view overall performance of the Bank, your Directors are
 pleased to recommend a dividend of 5% for the year ended on 31st March
 2008 as against 20 % for the year ended on 31st March 2007 to conserve
 the resources.
 
 The Board has also approved issue of bonus shares in the ratio of 1:5
 subject to necessary statutory approvals.
 
 CAPITAL, RESERVES AND CAPITAL ADEQUACY RATIO
 
 During the year, the Bank has allotted 2,68,91,682 Shares as
 
 Bonus shares in the ratio of 1:4. Accordingly, the paid up and
 subscribed capital increased from Rs. 107.57 crores to 134.46 crores as
 on 31st March 2008. With the transfer of profit to reserves, the Banks
 Capital Adequacy Ratio as on 31st March : 2008 stands at 11.87% as
 against 11.32% at the end of the previous financial year. The Bank has
 passed resolution in the Extra Ordinary General meeting held on
 30.5.2008 to diminish its Authorised Capital from Rs. 300 crore to Rs.
 265 crore to comply with Regulation 12 of BR Act, 1949.
 
 LISTING AGREEMENT WITH STOCK EXCHANGES
 
 Pursuant to requirement of Listing Agreement, the Bank declares that
 its shares are listed on Bombay Stock Exchange (BSE), Jaipur Stock
 Exchange (JSE) and National Stock Exchange (NSE). TheTier-II Bonds
 (Series-III, IV & V) and Upper Tier-II Bonds are also listed at Bombay
 Stock Exchange.  The Bank confirms that it has paid annual listing fees
 due to the Stock Exchanges.
 
 The Shareholders in the 63rd AGM have passed a special resolution for
 delisting of all the equity shares of the Company from Jaipur Stock
 Exchange Ltd(JSE) w.e.f. 01.04.07. In view of pending listing of 90
 lacs shares at Bombay Stock Exchange Ltd., & National Stock Exchange of
 India Ltd., and the case being pending before Honble Supreme Court,
 the de-listing at JSE has been deferred.
 
 TREASURY & INVESTMENT MANAGEMENT
 
 The Banks net investment in SLR and Non-SLR securities has increased
 from Rs. 3640.69 crores as on 31st March 2007 to Rs. 4729.20 crores as
 on 31st March 2008, keeping pace with the growing business of the Bank.
 The level of SLR and Non-SLR net Investment remained ar Rs. 3359.74
 crores and Rs. 1369.46 crores respectively as on 31st March 2008.  The
 investment portfolio enabled your Bank to achieve a yield of 6.85% on
 its investments.
 
 The Bank has placed 50.36 % of its net investment under HTM category.
 Thus securities marked to market accounted for 49.64 % of the net
 investment as at the end of March 2008.
 
 The liquidity position of the Bank has remained comfortable throughout
 the year. In order to improve the overall yield on the available short
 term surplus funds, in addition to the Call Money/ Reverse Repo Lending
 (CBLO), the Bank deployed funds in other avenues such as interbank
 short term Deposits, Certificate of Deposits and Units of Mutual Funds
 etc. The Bank is a member of Negotiated Dealing System (NDS), NDS-
 Call, NDS OM and Cleating Corporation of India Ltd.
 
 (CCIL). Transactions in Government Securities are carried out through
 scripless electronic media with on-line settlement
 
 The Bank has joined Real Time Gross Settlement (RTGS) system of Reserve
 Bank of India in June 2004, which has eliminated settlement risks and
 has reduced transaction cost and facilitated better funds management by
 the Bank and at the same time improved customer service by faster
 transfer of funds. The Bank has also joined NEFT (National Electronic
 Funds Transfer) to expedite transfer of funds to & from other Banks for
 customers account.
 
 DEPOSITS & ADVANCES
 
 Total deposits of the Bank increased from Rs. 10815.92 crores to Rs.
 13849.35 crores, while the core deposits (excluding interbank deposits)
 increased from Rs. 9841.66 crores to Rs. 12892.69 crores showing a
 growth of 31 % over previous year.
 
 For the year ended 31st March 2008, gross advances registered robust
 growth compared to the previous year, 2006- 07, showing an increase of
 29.56% at Rs.7529.17 Crores as on 31st March 2008. Against the CD Ratio
 of 52.90% as on 31st March 2007, Bank has been able to achieve CD Ratio
 of 54.36% as on 31st March 2008. The growth of advances is well spread
 across the sectors and enterprises. The Yield on Advances has also
 increased from 9.95% toll.28% in 2007-08.  exposure and personal loans
 (excluding housing loans for residential purposes and educational
 loans).
 
 Accordingly, Bank followed policy of caution and discrimination in
 making advances to high risk sectors. Besides, Banking system as a
 whole witnessed upward bias on interest rates and tightening of
 liquidity that required revision of Benchmark Prime Lending Rate (BPLR)
 and Retail Prime Lending Rate (RPLR) during the year which, at a later
 part of the year, eased out.
 
 Further, Bank continued its thrust on checking incidence of fresh Non
 Performing Assets as well as up-gradation of existing assets within
 permissible parameters / prudential norms and aims at zero NPA status.
 
 During the year under report the Bank also strengthened its credit
 approval and monitoring process, which enabled the Bank to keep under
 check the incidence of slippage of borrowal accounts into NPA category.
 
 During the year 2007-08, the Reserve Bank of India continued to take
 measures with a view to contain spiraling growth of Credit,
 particularly in certain risk sensitive sub- sectors i.e. Real Estate &
 Construction, Personal Loans and Credit Cards etc. The provisioning
 requirement has also been revised for certain sectors including
 doubling the same to 2% for standard assets for real estate,
 outstanding credit card receivables and loans and advances qualifying
 as capital market
 
 Business plan meeting ofBhilwara Region. Meeting was attended by Shri
 P.L. Ahuja Managing Director & CEO and Shri Deepak Saruparia DMD.
 
 PRIORITY SECTOR & RETAIL BANKING
 
 The Banks advances to Priority Sector (inclusive of eligible
 investments) as a proportion of Adjusted Net Bank Credit at the end of
 previous year stood at 41.31% as on 31st March 2008, there by
 surpassing the national goal of 40% for such advances. These advances
 registered a growth of 33.01% and reached to the level of Rs.2401.09
 crores in the financial year ,2007-08 from Rs.1805.12 crores in the
 financial year 2006-07.
 
 In terms of the directives from the Government of India and the Reserve
 Bank of India, the Bank is giving utmost importance to lending under
 Priority Sector and Agriculture Sector by introduction of new products
 /schemes and modifying the existing ones for its growth. Break up of
 sector wise outstanding under Priority Sector Advances at the end of
 the financial year 2007-08 is as under:
 
 (Rs.in crores) Sector                       FY 2007-08    FY 2006-07
 
 Agriculture                                   1193.77      1076.66
 Small Enterprises                              709.40       292.37
 RetailTrade                                    179.34       101.52
 Micro Credit                                     1.73         3.53
 Education                                        3.69         2.59
 Housing                                        313.16       328.45
 Total                                         2401.09      1805.12
 
 In order to provide hassle free advances to the farm sector, Bank has
 modified and introduced farmer friendly schemes like Raj Bank Kisan
 Green Card (RBKGC) and Raj Bank Kisan Credit Card (RBKCC) to suit all
 financial needs of the farmers including their consumption needs.
 
 The Bank registered a growth of 47.65% during the financial year
 2007-08 under Direct Agriculture Sector. Major products financed under
 direct agriculture are rural godowns, medicinal / herbotech plantation
 and vermi-culture besides Kisan Credit Cards in a big way whereas those
 under indirect agriculture are, Agriculture Market Yards, NAFED, NCDCL.
 
 Bank has various products in its basket for financing under agriculture
 viz. Kisan Credit Card (RBKCC/RBKGC), Hitech Agriculture Project,
 Venture Capital Fund Scheme for Dairy / Poultry, Horticulture &
 Plantation Scheme, loan against warehouse receipt scheme, financing
 two-wheeler to farmers, financing small and medium dairies, projects
 pertaining to cash crops / flower / medicinal plants / horticulture,
 financing to Self Help Groups (SHGs) for agriculture and allied
 activities.
 
 In its endeavor to serve weaker sections of the society, the Bank is
 actively participating in various Government sponsored poverty
 alleviation programmes. With the twin objectives of eradicating menace
 of poverty and generating employment to rural and urban population
 through Govt.  Sponsored Programmes like PMRY, SGSY, SJSRY and
 different
 
 SCDC schemes, the Bank is sharing its responsibility in socio
 economicdevelopment. During the year under report, your Bank has
 disbursed Rs. 1762 lacs under various Government Sponsored Programmes
 which has been well appreciated at various fora.
 
 Bank is also committed to promote micro finance as per policy of
 Government of India. During the year, the Bank has organised a mega
 camp at Udaipur for disbursing loans to Self Help Groups under SGSY,
 benefiting 850 beneficiaries, mostly women members.
 
 To promote rural artisans, Bank has also obtained credit guarantee
 cover under CGTSI scheme to allow financial facilities with no
 collateral to the rural artisans.
 
 RECOVERY UNDER ADVANCES TO SCHEDULED CASTES(SC) & SCHEDULED TRIBES (ST)
 
 Position of Demand, Recovery & Overdues at the end of financial year
 2007-08 under SC/ST Category is given here under:
 
 FINANCIAL INCLUSION:
 
 The vast network of banking system in the country has prompted the
 adoption of a bank centric approach in delivery of financial services
 in the rural sector. However, for outreach of banking services, the
 Reserve Bank of India/ Government of India has launched a new
 initiative in the name of Financial Inclusion. Initially, your Bank
 participated in Rajsamand District on pilot basis for 100% financial
 inclusion in the financial year 2005-06 and during the financial year
 2007- 08, the Bank has participated in four newly identified districts
 viz. Dausa, Jhalawar, Sriganganagar and Dungarpur and completed the
 task of 100% financial inclusion.
 
 RAJASTHAN SWAROJGAR VIKAS SANSTHAN:
 
 With a view to empowering the rural people for earning their
 sustainable income, your Bank has set up rural development and
 self-employment type of training institutes under the banner of
 RAJASTHAN SWAROJGAR VIKAS SANSTHAN (RSVS) at Udaipur and Jodhpur. The
 Institutes are providing expert guidance and assistance to rural youths
 through counselling and consultancy approach and rendering all possible
 helps for obtaining credit facilities from banks and other financial
 institutions in setting up their ventures successfully.
 
 1558 rural youths. Your Bank would like to place on record that most of
 the youths trained through the Institutes have successfully established
 their own ventures. To facilitate the Institutes m their Infrastructure
 development i.e. for construction of building and for providing
 necessary amenities to the trainees viz., laboratory, classroom,
 boarding etc., the State Government has allotted land, admeasuring
 9002.50sq.ft. at Udaipur on reserve price to RSVS.  RETAIL BANKING:
 
 Treating retail financing as a major tool for keeping pace with the
 changing economic scenario, your Bank has stepped in for larger
 coverage by introducing several products viz.  consumer loans to
 Institutional employees, mortgage loan, home loan, education loan and
 vehicle loan. During the financial year 2007-08, an aggregate sum of
 Rs. 20522 lacs was disbursed touching total advances under retail
 sector to the tune of Rs. 86316 lacs. In response to the changing
 market conditions, the APNA GHAR Housing Scheme was revamped. During
 the year 2007-08, Bank has disbursed housing loans of Rs. 5692 lacs and
 the total housing loan portfolio has reached Rs. 33573 lacs on 31st
 March 2008.  Operations of Mewar Aanchalik Gramin Bank (MAGB)
 
 The deposits of MAGB increased to Rs. 30855 lacs as on 31.3.2008 and
 advances reached a level of Rs. 8757 lacs as on 31.3.2008.
 
 ASSEST QUALITY MANAGEMENT
 
 During the year-ended 31st March 2008, the Bank continued pursuing its
 recovery drive aggressively. For small NPAs of below Rs.50 lacs,
 recovery camps were organized at branch level for on the spot
 settlements. The hard core high value NPAs were effectively followed up
 with the defaulter borrowers, guarantors and judgment debtors through
 appropriate legal action.
 
 The Bank also exercised its rights under the SARFAESI Act 2002 in
 eligible cases and issued notices to the defaulting borrowers/
 guarantors compelling them to come forward with reasonable settlement
 proposals for liquidation of the dues of the Bank. The Bank accordingly
 made a good recovery of Rs 4340.80 lacs in 4952 NPA accounts during the
 financial year 2007-08. The Bank also launched an extensive drive to
 execute decrees for enforcing recovery in hard core accounts by
 resorting to attachments, taking possession & sale of properties.
 
 During the financial year ended 31st March 2008, compromises were
 approved in 1756 accounts, effecting aggregate recovery of Rs. 3557.68
 lacs.
 
 To accelerate the pace of recovery in small value accounts, as many as
 146 recovery camps were organized by the Regional Offices where
 aggregate recovery of Rs. 100.44 lacs was made in 913 accounts.
 
 The position of NPAs and recovery is given below:
 
                                                    (Rs. in lacs)
                                            As on 31st      As on 31st
                                            March 2008      March 2007
 
 Gross NPA                                  12619.51         12104.01
 Gross NPA%                                     1.68             2.08
 Net NPA                                     3089.84          1367.25
 Recovery in NPA                             4340.80          5406.86
 NetNPA%                                        0.42             0.24
 
 The Bank effected significant recoveries amounting to Rs.  1651.92 lacs
 in 2909 written off accounts, besides recovery of Rs 440 lacs in
 written ofFICD a/c of erstwhile Rajasthan Bank Financial Services, thus
 total recovery in written off accounts was Rs 2091.92 lacs which
 contributed to the net profit of the Bank. The Bank was also able to
 effect recoveries to the tune of Rs. 2606.81 lacs in high value NPAs
 with outstanding of Rs. 50 lacs and above, during the year ended 31st
 March 2008. Similarly, substantial recoveries to the tune of Rs.
 1733.99 lacs were effected in small NPAs having outstanding up to Rs.50
 lacs.
 
 During the year ended 31st March 2008, NPAs amounting to Rs.713 lacs
 were upgraded to the category of performing assets.
 
 As a result of the initiatives taken by the Bank in improving asset
 quality and recoveries effected, the accretion to net NPAs as at the
 end of 31st March 2008 has been Rs.3090 lacs. The Bank is making all
 out efforts to recover the amount in NPA accounts.
 
 INTERNATIONAL BANKING
 
 The Bank is handling foreign exchange business at its 22 branches.
 During the year 2007-08, the total forex turnover handled by the Bank
 amounted to Rs. 19287.78 crores as compared to Rs. 13594.45 crores
 during the year 2006-07 registering a growth of 41.88%. The Bank has
 been continuously making arrangements with foreign banks for augmenting
 export /import business of its constituents. As on 31st March 2008,
 there were 56 correspondent banks in 70 countries. Export credit is Rs.
 158.81 crores (as on 31st March 2008). In all, 21 exporters have been
 allotted Rajbank Exporters Gold Card under the Exporters Gold Card
 Scheme of the Reserve Bank of India, entitling them to various benefits
 under the Scheme. The rupee draft drawing arrangement with M/s. Wall
 Street Exchange Center LLC, Dubai has picked
 up well and now it is proposed to start a Speed remittance facility.
 Sifhilar arrangement of rupee draft drawing and Speed remittance
 facility proposed to be entered into with M/s Al Muzaini Exchange
 Company, Kuwait are likely to be started during the current year. A
 separate E-mail Id nrihelpdesk@rajbank.com has been provided for use by
 NRIs to facilitate easy communication with the Bank.
 
 The Bank has planned to start a Derivative Desk at its Treasury Branch,
 during the current year. The Bank has acquired a new integrated
 treasury software KASTLE from M/s.3i Infotech Ltd, which is proposed
 to be implemented during the current year.
 
 FOREIGN EXCHANGE EARNING & OUTGO
 
 Total foreign exchange earned (including income in the form of
 interest, rebates, sharing of income from nostro banks, recovery of bad
 debts etc.) at the end of the year, amounted to Rs. 291.37 lacs
 
 Total foreign exchange used (including charges on nostro accounts,
 SWIFT and Reuter charges, interest paid on foreign currency borrowings,
 allowances paid in foreign currency for traveling abroad and audit fee
 paid etc. ) at the end of the year, amounted to Rs. 121.94 lacs
 
 NEW SERVICES AND PRODUCTS:
 
 The Bank has emerged as a financial super market providing a wide
 variety of products and services, which has enabled it to augment its
 fee-based income and widen the customer base. The major products and
 services offered by the Bank are as under:-
 
 GENERAL INSURANCE:
 
 The Bank is having an arrangement with M/s. United India Insurance
 Company Limited, a leading public sector non-life insurance service
 providers in the country and having a large network of its
 branches/divisional offices across the country.  The Bank also markets
 a specially designed Group Mediclaim Policy known as RAJBANK AROGYA
 NIDHI which is very popular among our clients. During the FY 2007-08, a
 total premium of Rs. 3.37 crores was booked through our branches and
 the Bank earned an income of Rs. 0.42 crore by way of commission. It is
 expected that this business will grow in a phased manner in coming
 years.
 
 LIFE INSURANCE:
 
 In order to realize full potential of insurance business, Bank has
 entered into a tie-up with Aviva Life Insurance Company on referral
 arrangement basis. Consequently, agreement with LIC of India for
 distribution of their products on agency basis has been terminated in
 Dec, 2007. Aviva will use our infrastructure, database and technology
 for this purpose and for aggressive marketing they have provided
 dedicated sales force for doing insurance business which will help us
 to widen our client base further.
 
 It is expected that life insurance business under the new arrangement
 will increase substantially and the Bank would be able to generate good
 fee based income from this business.
 
 DEMAT SERVICES:
 
 The Bank has been providing depository services to its customers since
 Sept. 2000 as a Depository Participant (DP) of Central Depository
 Services (India) Limited (CDSL). The Bank has obtained empanelment of
 NCDEX and will soon start commodity DP services. As on 31st March 2008,
 the Bank had 68942 Demat accounts and has earned revenue of Rs. 2.23
 crores.
 
 ON-LINE TRADING OF SECURITIES:
 
 The Bank has tied up with IDBI Capital Markets Services Limited to
 provide online trading facility to its depository customers. As a part
 of the alliance, customers of the Bank are provided with a facility of
 3-in-l online investing account wherein the Savings Bank account and
 Demat Account of the customer with the Bank are integrated with the
 trading account with IDBI Capital. The Bank has also entered into an
 agreement with Religare Securities Ltd for providing similar
 facilities, which shall be effective in this fiscal year. Now, the
 Banks customers can enjoy the convenience of trading and managing
 their portfolio from anywhere in the world.
 
 ECGC Ltd.:
 
 Your Bank is also having Bancassurance arrangement with the Export
 Credit Guarantee Corporation of India Ltd. for soliciting and procuring
 business of ECGC General Insurance policies for& on behalf of them, on
 agency basis.
 
 MUTUAL FUNDS:
 
 Due to buoyancy in capital markets, mutual funds have delivered good
 returns to their investors and hence mutual funds are becoming quite
 more popular in the market. Keeping in view the requirement of the
 customers, Bank has made setting/marketing arrangements of products of
 the following Funds:-
 
 Prudential ICICI Mutual AMC
 
 Principal PNB Mutual AMC
 
 ING Vysya AMC
 
 Reliance Mutual Fund
 
 Birla Sun Life Mutual Fund
 
 DSP Merrill Lynch Mutual Fund
 
 Sundaram BNP Paribas Mutual Fund
 
 Franklin Templeton Asset Management (India) Pvt. Ltd.
 
 TATA Mutual Fund
 
 UTI Mutual Fund
 
 SBI Mutual Fund
 
 The Bank has earned an income of Rs. 25.27 lacs toward
 
 distribution fee.
 
 WESTERN UNION MONEY TRANSFER:
 
 The Bank is providing Western Union Money Transfer services as a
 sub-agent. The services are available at all on-line branches of the
 Bank. The Bank earned gross income of Rs.  3.16 lacs during the year
 ended 31st March 2008 from this activity.
 
 CASH MANAGEMENT SERVICES (CMS)
 
 With all its branches fully networked and good spread of branches in
 Rajasthan, your Bank has an edge over others in offering CMS services
 to both banks and corporates. Presently, CMS services to ICICI Bank,
 IDBI Bank, ING Vysya Bank, Corporation Bank, HDFC Bank, Centurion Bank
 of Punjab, Kotak Mahindra Bank, ICICI Home Finance Company, GE Capital,
 Reliance Communication Infrastructural Ltd., Tata Finance Ltd. etc. are
 being provided. The income from these arrangements amounted to Rs.
 149.84 lacs during the year.  BOOKING OF RAILWAY TICKETS OVER INTERNET
 
 In the pursuit of our endeavor to provide our esteemed customers with
 state of the art technology-enabled products and services so as to
 enable them to transact from the comfort and convenience whether from
 home or office or transact even while on move, the Bank has signed an
 agreement with Indian Railway Catering & Tourism Corporation (IRCTC) to
 provide facility to the valued customers for booking railway tickets
 over internet.  STAMP FRANKING ACTIVITY:
 
 Your Bank is privileged to handle stamp duty collection by providing
 stamp-franking services through various branches for the States of
 Maharashtra, Rajasthan, Gujarat, Goa & Bihar. The Bank plans to
 commence this activity in the States of Andhra Pradesh, Uttar Pradesh
 and Haryana in due course.  During FY 2007-08, the Bank has generated
 revenue to the tune of Rs. 4.03 crores through this activity as against
 Rs.  2.69 crores last year.
 
 CREDIT CARD
 
 The Banks lifetime free International Credit Card product is being
 offered, in two versions, International Gold and Silver Card. The card
 authorization and personalization is outsourced to M/s Electra Card
 Services and CMS Computers Ltd. respectively. The Bank has, during the
 year under report, reached the circulation of over 17000 credit cards.
 The Bank has since improved the reward points and launched cash back
 scheme to improve the card usage. Bank has also started free SMS alerts
 and E-mail statement facility to its credit card customers. The Bank
 has tied up with Mine bill box in Mumbai for collection of cheques.
 
 The Bank has decided to offer corporate credit cards for its corporate
 customers with corporate liability and individual liability. Bank shall
 also be entering into merchant establishments acquisition activity in
 die current financial year.
 
 DEBIT CARDS
 
 As principal members to VISA, the Bank issues International Debit Cards
 to its customers, which also serve as ATM cards.  Banks Debit Cards
 are accepted in more than 170 countries.  In India, our tie ups with
 various banks provides access to more than 30000 ATMs through-out the
 country. Besides VISA enabled ATMs, this includes ATMs network of SBI,
 AXIS Bank, Corporation Bank and those of Cash tree group of Banks.
 Further, the customer can use the card at any of the more than 3.26
 lacs merchant establishments in India and 26.85 million points of sale
 world over. The number of debit cards has increased from 174952 to
 234647 during the year under report. The Bank offered innovative
 schemes to customers to improve usage of debit card at merchant
 establishments during the year under report. The customers shall be
 enjoying the reduced rate of transaction charges on cash withdrawal
 from next financial year and all balance enquiries shall be free of
 cost.
 
 REAL TIME GROSS SETTLEMENT CHARGES (RTGS)
 
 Your Bank is providing Real Time Gross Settlement (RTGS) Scheme which
 is a paperless settlement system. The payment instructions between
 different banks are electronically processed and settled individually
 and continuously by Reserve Bank of India. Looking to the wide
 acceptability of the system with low per transaction cost, our Bank had
 become member and joined live operations on RTGS w.e.f. 29th July 2004.
 
 After 100% implementation of online Core Banking Solution, the
 acceptability of RTGS has enhanced considerably and all of our branches
 are providing RTGS facility to the customers.
 
 INFORMATION TECHNOLOGY, COMPUTERISATION & TECHNOLOGY UPGRADATION
 
 Bank has achieved landmark in the field of computerization and its 100%
 business has been converted on Core Banking centralized data by
 converting all remaining Total Branch Automation (TBA) branches into
 Core Banking System during this year and all 463 branches covering 286
 cities in 22 States arid 2 Union Territories are now on core banking
 solution. These branches are providing facilities of internet banking,
 mobile banking, depository services, credit card, debit card, on line
 trading, online railway reservation, ECS, RTGS. Bank has launched SMS
 alert facility to its customers on mobile phone. Presently, 67500
 customer accounts transactions beyond a threshold limit, are receiving
 SMS Alerts.  Internet banking facility has been availed by more than
 16000 users.  Bank is providing SMS Services (Bank@2PM) facility to
 customers for informing the debit clearing position of their accounts
 and shortage of funds on daily basis through SMS and e-mail.
 
 All Branches/ Offices of the Bank have been provided email
 functionality on Banks domain and networked under the close user group
 (CUG). Service tax submission has been centralized. The Centralised pay
 roll system has also been implemented in the Bank and pay slips of
 staff members are being printing centrally.
 
 Bank has also undertaken following activities for implementation.
 
 Bank is going to start live operations of its own call center and
 implementation process is going on for IVRS and Medius. Call Center
 will be made live shortly.
 
 The software and hardware orders have been placed for Cheque Truncation
 System in Delhi and the system will be made live as per directions of
 RBI
 
 The centralized account DD issue and payment system has been customized
 and successfully tested in Core Banking. The system has been made live
 since 01st April 08.
 
 Payment gateway interface with Nagar Nigam, Jaipur and Lokmitra for
 Rajasthan based Electric/ water & Telephone bills online payment is
 under testing. This facility is likely to be made live in the month of
 June 08.
 
 Cash Management Software has been developed in-house and is in testing
 phase. It will be made live shortly.
 
 HUMAN RESOURCES, TRAINING & DEVELOPMENT
 
 Banking industry is facing unprecedented challenges in the changing
 scenario of global environment and economic conditions prevailing in
 the country. Banks business-growth and excellence could be achieved
 through Human Resource Management. It is an endeavor of the Bank to
 achieve corporate goals by optimum utilization of available manpower
 and to develop existing human resources for shouldering higher
 responsibilities in cordial work environment. To meet challenges of
 competitors both from old & new generation Banks and to improve
 employee productivity besides aggressive marketing of products and
 services, the scheme for appointment of staff on cost to company basis
 introduced in the year 2006 has been further extended. The policy
 provides opportunity to the existing officers for taking higher
 responsibilities and challenges with attractive salary package.
 Simultaneously, highly qualified / experienced executives from outside
 are also being recruited.
 
 The position of recruitment in the financial year 31st March 2008 was
 as under :
 
 Year           Officers/
                Executives
 
 2007-08         168
 2006-07          78
 
 Clerks          Sub-           Total
               ordinates
 
 7               -               175
 2               3                83
 
 Incentives are also being provided for good performance.  Industrial
 relations remained cordial and harmonious during the year.
 
 The staff strength of the Bank as on 31 st March 2008 stands as under:
 
 31.03.2008            31.03.2007
 
                           Total                   Total
 
 Officers                   2003                   1920
 Clericals                  1341                   1304
 Subordinates                592                    684
 Total                      3936                   3908
 
 Ever increasing customer expectations & introduction of
 technology-based products on regular basis makes it imperative for the
 Bank to update & develop its human resources. Accordingly, the Bank
 considers training to be an important tool for enhancement of the
 professional knowledge, skills & attitude of its staff/ employees.
 Staff Training College of the Bank acts as a change agent & catalyst in
 this area by imparting requisite knowledge and skills. The Bank has its
 own Staff Training College housed in owned premises, having all
 required infrastructure & residential facilities, working with the
 following mission:-
 
 The Banks Training System shall be an enabling mechanism for
 sustaining growth and promoting organizational excellence by remaining
 continuously attuned to the needs of the User System.
 
 During the year under review, Staff Training College has conducted 83
 training programmes in various areas, imparting training to 1659
 participants and nominated 55 staff members to various training
 programmes conducted by BTC / NIBM / CAB & other reputed training
 institutions. For overall development of the senior-staff, Management
 Development Programmes were also conducted with the support of eminent
 outside faculty.
 
 The College, in view of their importance, has been including areas like
 KYC / AML, IS Audit and Customer Services on regular basis, in most of
 the training programmes.
 
 House Keeping:
 
 Bank with vigorous follow-up and efforts has made improvement in the
 area of house keeping. Most of the old entries in Sundry Debtors,
 Sundry Creditors, PMOB a/c have been adjusted. The position of
 balancing of books is up to date. Maximum outstanding entries in
 reconciliation of inter branch and inter Bank accounts have been
 reconciled/ adjusted. Business Plan Meetings were held regularly for
 fruitful deliberations. The action points emerged during Business Plan
 Meetings at Regional Offices were taken up with concerned departments
 of CO. and Corporate Office and were followed up.
 
 The customer service area was also properly attended. The meetings of
 Customer Service Committees were held at branches, Regional Offices and
 at Central Office. Important guidelines / feedback received in this
 regard from RBI/IBA and Banking Ombudsman were transmitted to field
 functionaries. It was ensured that prompt courteous and personalised
 services are provided to our valued customers.  The complaints /
 grievances of customers were promptly attended and utmost efforts were
 made to redress the same to their satisfaction.
 
 The development of business was regularly followed up with Regional
 Offices.
 
 The Bank has obtained membership of the Banking Codes & Standards Board
 of India (BCSBI) which was set up in July 2006 for setting out minimum
 standards of banking practices for banks to follow . As committed in
 the Code, copies of the Code have been made available to all the
 branches and are also being provided to the customers. The Bank is
 initiating measures on an on going basis to comply with the Code.
 
 The Bank has constituted Board level Sub Committee of Directors for
 Customer Services besides a Customer Service Committee of Executives,
 Standing Committee on Customer Service which held regular meetings
 during the year. Banks customers are invited to participate in the
 meeting of the Standing Committee.
 
 BRANCH EXPANSION
 
 In line with the Banks vision to transform it into a Bank with all
 India presence, the Bank has spread its wings to newer areas across the
 country. The Bank has opened/operationalised 19 new branches, 12
 offsite ATMs & 8 Onsite ATMs during the year 2007-08. Besides 2
 Extension Counters were also upgraded into full-fledged branches. The
 Bank forayed into new centres by opening branches at Dibrugarh,
 Tinsukia & Jorhat (Assam), Vapi & Kadi (Gujrat), Gurgaon & Manesar
 
 (Haryana), Baddi (Himachal Pradesh), Brahmani Kamleshwar, Pulgaon,
 Jalgaon, Bhiwandi, Kandivali, Kolhapur & Nasik (Maharasthra), Moga
 (Punjab), Tiruchirapally & T.Nagar Chennai (Tamilnadu) and Siliguri
 (West Bengal). E/Cs at Rambagh Palace Hotel, Jaipur and RSRTC Dungarpur
 stand upgraded.
 
 At the end of financial year 2007-08, the Banks network comprised of a
 total of 463 branches (including six service branches), 29 Offsite ATMs
 & 67 Onsite ATMs across the country.  Thepopulation groupwise
 classification thereof is given hereunder:
 
 Category#                 Branches
                           (as on)
                       31.03     31.03
                       2008      2007
 
 Metropolitan          129         126
 Urban                 142         132
 Semi-Urban             90          85
 Rural                 102          99
 Total                 463         442
 
 Onsite ATMs           Offsite ATMs
 (as  on)               (as  on)
 
 31.03     31.03   31.03    31.03
 2008      2007    2008     2007
 
 24        24       6        6
 25        21      19       11
 16        12       2        -
 2          1       2        -
 67        59      29       17
 
 # Reclassified as per Part-II of the Uniform Code No.  (Population
 range wise) circulated vide RBI letter no. DESACS. BSD.
 7070/03.09.62/2005-06 dated 12.06.2006.
 
 * Including six service branches (Delhi, Jaipur, Jodhpur, Kota, Mumbai
 & Udaipur).
 
 The Banks network now finds its presence in 22 States & 2 U.Ts. thus
 truly realizing the Banks vision. The statewise break-up of Banks
 network is as under:
 
 Sr.     State / U.T.
 No.                                  Branches
 
 1       Ahdhra Pradesh                  7
 2       Assam                           4
 3       Bihar                           1
 4       Chattisgarh                     1
 5       Delhi                          20
 6       Goa                             1
 7       Gujarat                        10
 8       Haryana                        14
 9       Himachal Pradesh                2
 10      Jammu & Kashmir                 1
 11      Jharkhand                       1
 12      Karnataka                       3
 13      Kerala                          1
 14      Madhya Pradesh                 22
 15      Maharashtra                    32
 16      Orissa                          2
 17      Punjab                         12
 18      Rajasthan                     294
 19      Tamil Nadu                      8
 20      Uttar Pradesh                  13
 21      Uttranchal                      1
 22      West Bengal                     8
 23      Chandigarh (UT)                 2
 24      D.Ngr. Haveli (UT)              3
         TOTAL                         463
 
 Onsite       Offsite
 ATMS          ATMS
 
 1               -
 1               -
 5               -
 1               -
 4               -
 6               1
 1               -
 1               1
 7               1
 3               -
 31             24
 1               1
 2               -
 1               -
 3               -
 67             29
 
 BASEL-II REQUIREMENT
 
 The risk management system and techniques adopted by the Bank are in
 conformity with the emerging regulatory guidelines issued by the RBI.
 All efforts are directed to tune the system with the global standards
 and best practices primarily to ensure continuous improvement in asset
 quality, profitability and appropriate capital adequacy ratio. The
 Banks experience in meeting the requirements of capital adequacy as
 per BASEL-I has been satisfactory. The present level of capital
 adequacy places the Bank in a comfortable position to meet minimum
 capital requirement as per the new BASEL Capital Accord (BASEL II)
 
 INSPECTION AND AUDIT
 
 Internal Inspection:
 
 During the year, regular inspection of 294 Branches, 12 Controlling
 Offices & 31 Central / Corporate Office Departments including M.A.G.B.
 was conducted. The inspections revealed that the overall functioning of
 the branches was of high quality as 78 & 329 branches were able to
 attain Excellent and Good Rating respectively. None of the branches
 was found to be Below Average. The branches were evaluated on the
 basis of business parameters and compliance with risk control measures.
 
 Concurrent Audit:
 
 The concurrent audit system has been extended to 88 branches including
 Treasury Branch covering 53.53 % of total deposits and 71.85 % advances
 and off balance sheet business viz. L.G. 76.14 % & L.C. 95.57% as
 against the requirement to cover minimum 50 % of the business under
 concurrent audit stipulated by Reserve Bank of India. The concurrent
 auditors are also verifying 100 % foreign exchange business at the
 Forex Branches of the Bank. Certain Departments of Central & Corporate
 Office such as CO.  Administration, Jaipur & Mumbai, Credit Card
 Management Division, Treasury & Investment Department, Corporate
 Office, Mumbai are also subject to concurrent audit.
 
 Services of qualified firms of Chartered Accountants, most of them
 having DISA/CISA qualifications, are being utilized for this work.
 
 Risk Based Internal Audit:
 
 The Bank evaluates business risks & control risks and prepares a risk
 matrix for each business location taking into account both the business
 risk & control risk factors as per Risk Based Audit Plan. The
 well-documented risk assessment methodology is duly approved by the
 Board. The risk assessment is undertaken annually.
 
 Information Systems (I.S.) Audit:
 
 The I.S. Audit Cell conducts periodical risk based audit of information
 systems and monitor compliance of controls to ensure safety, security &
 integrity of data. This function also involves identification of the
 extent to which the Banks information technology systems are exposed
 to various types of operational risks.
 
 The I.S. Audit Cell conducted 384 I.S. Audits during the year covering
 357 Branches / Extension Counters & 27 Administrative Offices (Regional
 Offices & Central / Corporate Office Departments including Credit Card
 operations) besides version release audits of BancMate, Leave
 Management, D.D. Payable, Central Payroll (CTC) application softwares
 and offsite non-intrusive penetration testing of network at the Data
 Centre.
 
 Out of total 384 Audits, 357 branches & administrative offices were
 assessed as Low Risk and no office was assessed as Very High Risk.
 
 Implementation of RBI Guidelines on Know Your Customer (KYC) and Anti
 Money Laundering (AML)
 
 The Bank has procured a specific software (AMLOCK) from M/S 3i Infotech
 and made it functional from Jan 1, 2008 for compliance of regulatory
 guidelines on KYC & AML measures.  Besides electronic generation of
 Cash Transaction Reports for FIUIND, all customers accounts have been
 classified as per risk and approved global threshold values have been
 entered.  Duplicate customers records on PAN, name and address basis
 have been identified for correction. Further, apart from UN and OFAC
 black list filtering of the customers, daily alerts are being generated
 and monitored.
 
 KYC cell is also circulating list of banned terrorist individuals /
 entities received from RBI. The updated list has also been provided on
 Banks portal for ready reference of the Branches to match the name &
 address of the prospective customer prior to opening any new account so
 as to ensure compliance about combating terrorist financing. Regular
 training is provided to the staff for sensitizing them fully about KYC
 & AML measures.
 
 Publicity
 
 In the direction of brand & image building, services being provided by
 the Bank to masses were widely publicized through advertisement on TV
 channels throughout the country. Besides, other means of outdoor
 publicity like hoardings on roadways bus-stands, platform pillars of
 railway stations and in reputed trains, were also used, keeping in view
 the increasing travel for personal or business purpose by a large
 population.
 
 The contract with our brand ambassador, Ms Hema Malini originally
 signed in 2004, was renewed for another three years period w.e.f.
 Aug.2007.
 
 The bank has also advertised its products extensively on other
 audio/video media like F.M. Radio, CCTV at airports etc., which has
 given us a significant publicity.
 
 At local level also, awareness was created by releasing our Banks
 advertisements in local newspapers, to utilize the local media and
 field functionaries and to associate with the local surroundings and
 celebrations of local occasions for publicity mileage.
 
 Corporate Social Responsibility To fulfill the social responsibilities,
 the Bank continues to assist in adoption/cleanliness in various wards
 of Sawai Man Singh Hospital Jaipur. Blood donation Camp was organized
 on Banks foundation day and several other social measures including
 setting up of water huts were taken.
 
 STATUTORY DISCLOSURE UNDER SEC.217 (2A) OF THE COMPANIES ACT, 1956
 
 Particulars of employees as required under the provisions of Section
 217(2A) of the Companies Act, 1956, read with the companies
 (Particulars of Employees) Rules 1975, are as under:
 
 STATUTORY DISCLOSURES UNDER SEC.217 (1) (e) OF THE COMPANIES ACT, 1956
 
 The Bank has been making all possible attempts to reduce energy
 consumption on its operations. The company, being a banking company and
 authorized dealer in foreign exchange, is taking all steps to augment
 its foreign exchange business and introduce computerization in its
 operations to the maximum extent possible. The Bank has also taken up
 adequate measures for innovation, adaptation and absorption of state of
 the art technology in its business.  STATUTORY AUDITORS
 
 The Statutory Auditors M/S Gokhale & Sathe, Chartered Accountants,
 Mumbai will retire at the conclusion of the ensuing Annual General
 Meeting and are eligible for reappointment. The Bank has obtained
 certificate from the auditors pursuant to provisions of section 224(1B)
 of the Companies Act, 1956 to the effect that they shall be eligible,
 if appointed as Statutory Auditors. Members are requested to consider
 their reappointment for the financial year ended March, 2009 and to
 decide their remuneration.  AUDIT COMMITTEE
 
 The composition of Audit Committee is as given in the Report on
 Corporate Governance. 
 
 B BOARD OF DIRECTORS
 
 During the period under report, following changes have taken place in
 the Board of Directors:
 
 Shri A. Madhavan and Shri Shekhar Bhatnagar appointed as Additional
 Directors by the Reserve Bank of India w.e.f.  26.09.2007.
 
 Shri Sunil Behari Mathur co-opted as an Additional Director w.e.f.
 04.03.2008.
 
 Shri P.L. Ahuja appointed as the Managing Director & CEO with the
 approval of RBI, joined the Bank on 19.11.2007.
 
 Shri Ahuja is having 28 years of rich and varied banking experience in
 senior/Top Management position.
 
 Shri B.M. Sharma, Managing Director & CEO ceased to be Director on
 17.11.2007 on expiry of his term of appointment.
 
 Shri A.N. Chakrabarti, Shri P.P. Kapoor and Shri Anil A. Rao ceased to
 be Directors w.e.f. 24.03.2008 after completion of eight years in terms
 of provisions of Banking Regulation Act, 1949.
 
 The Board, while welcoming the new Directors also placed on record a
 vote of thanks / appreciation for the services rendered by the outgoing
 Directors on the expiry of their terms.
 
 REPORT ON CORPORATE GOVERNANCE
 
 A detailed report on the status of implementation of the corporate
 governance guidelines has been furnished as an Annexure-I to this
 Report.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 Pursuant to sub-section (2AA) of Section 217 of the Companies Act,
 1956, the Board of Directors of the Company hereby state and confirm
 that:
 
 1.  In the preparation of the Annual Accounts, the applicable
 accounting standards had been followed along with proper explanation
 relating to material departures;
 
 2.  The Directors had selected such accounting policies and applied
 them consistently and made judgments and the estimates that are
 reasonable and prudent so as to give a true and fair view of state of
 affairs of the Company at the end of the financial year and of the
 profit of the Company for the period;
 
 3.  The Directors had taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of the Companies Act, 1956 for safeguarding the assets of
 the Company and for preventing and detecting frauds and other
 irregularities and;
 
 4.  The Directots had prepared the annual accounts on a going concern
 basis.
 
 MANAGEMENT DISCUSSION & ANALYSIS
 
 This has been included as a separate Annexure -II to this report.
 
 ACKNOWLEDGEMENT
 
 The Board of Directors gratefully acknowledges the continued
 co-operation and support of the Reserve Bank of India, Government of
 Rajasthan and other state governments, business associates, valued
 customers and shareholders. The Board also places on record its
 appreciation of the dedicated services rendered by the employees at all
 levels.
 
                                        For and on behalf of the Board
 
 Place: Mumbai .                                (Sanjay Kumar Tayal)
 Date : 31st May, 2008                         Chairman of the Meeting