I am delighted to present the Annual Report for the year ended 31st
 March, 2011.
 
 During the year, the nascent global recovery came under increasing
 pressure from high oil and commodity prices. This was further
 accentuated by the sovereign balance sheet risks in the Euro Zone.
 Global inflation resurfaced as a result of the transmission of rising
 international commodity prices and spillover from past food and some
 wage price inflation. However, the core inflation remained subdued in
 most advanced economies which continued to pursue accommodative
 monetary policies vis-à-vis anti-inflationary monetary policy stance of
 the EMEs.
 
 In India, headline inflation exhibited strong presence and remained
 above the comfort level all through the year. The food inflation
 spilled over to the manufacturing sector from December 2010 as
 producers were able to pass on cost escalation amidst strong demand.
 Anti-inflationary concerns resulted in tight monetary policy stance of
 the Reserve Bank of India. Record food grain production turned around
 Agriculture & Allied activities which recorded growth of 5.4 per cent
 during the year. This rebound helped in GDP growth of 8.6 per cent
 during 2010-11.
 
 Your Bank has achieved an important milestone during its centenary year
 by crossing business volume of Rupees Three lac crore thereby reaching
 a level of Rs. 310763 crore. Our remodeled business strategies, which lay
 focus on retail banking, were further strengthened by expediting retail
 processing by opening CCPCs (Centralized Credit Processing Centers).
 CCPCs have not only helped in robust growth of retail loans but also
 reduction in NPA in this segment substantially by 13.55 per cent in
 volume.
 
 As a result of effective business strategies, the Bank was able to
 bring down cost of funds from 6.8 per cent in March 2009 to 5.82 per
 cent in March, 2011. During this period, our Net Interest Income
 recorded growth of over 109 per cent and the Net Interest Margin -
 which was below 2 per cent in the past - improved to 3.31 per cent.
 Despite providing for increased pension and other liabilities, our net
 profit in March 2011 was at Rs. 1252 crore.
 
 Our Brand received a boost as a result of various high profile brand
 building efforts and culminated in the Banker magazine (UK) recognizing
 us as one of the Top 500 banks worldwide.  Our investors reaffirmed
 their confidence, when the Rights Issue amounting to Rs. 2497 crore was
 oversubscribed. This shall augment our Tier I Capital and enable us to
 meet increased credit requirement of the economy. Factoring in the
 proceeds of the Rights Issue, which closed in April 2011, our CRAR in
 March 2011 would have been 13.57 per cent.
 
 I shall be laying down office on superannuation on May 31st, 2011. It
 has been a great honour and privilege to lead one of the largest Public
 Sector Banks- particularly in its centenary year.  At the commencement
 of my tenure in March 2009, I had set out to achieve enhanced value for
 all the stakeholders in the Bank, which I hope has been redeemed in
 some measure. This could not have been possible, but for your unstinted
 support for which I express my sincere gratitude.
 
 With best wishes, 
 
 Yours sincerely,
 
 S Sridhar
 
 Chairman & Managing Director
 
 Place : Mumbai
 Date  : May 30, 2011