The Directors have pleasure in presenting the Banks 84th Annual
 Report along with the Audited Balance Sheet and Profit and Loss account
 for the year ended 31.03.2011.
 
 Performance Highlights
 
 The salient features of the Banks performance for the year 2010-11
 are:
 
 - 5 branches and 179 ATMs were opened taking the customer outlets to
 734 as on 31 st March 2011.
 
 - Total deposits rose from Rs. 7,098.48 crore to Rs. 12,529.63 crore,
 an increase of Rs. 5,431.15 crore at a growth rate of 76.51 %.
 
 - CASA balances increased from Rs. 1,551.54 crore to Rs. 2,869.21
 crore, an increase of Rs. 1,317.67 crore at a growth rate of 84.93 %.
 
 - Total advances increased from Rs. 5,056.49 crore to Rs. 9,121.62
 crore, an increase of Rs. 4,065.13 crore at a growth rate of 80.39 %.
 
 - Total business rose from Rs. 12,154.97 crore to Rs. 21,651.25 crore
 at a growth rate of 78.13%. This is much higher vis-a-vis the business
 growth of the banking industry at 18.33 %.
 
 - Credit Deposit Ratio increased from 71.23 % as on 31.03.2010 to 72.80
 % as on 31.03.11.
 
 - Priority Sector Advances as a percentage to Net Bank Credit was 50.90
 % as at the end of March 2011 as against the RBI benchmark of 40 %.
 
 - Agricultural outstandings as a percentage to Net Bank Credit was
 18.30 % as at the end of March 2011 as against the RBI prescription of
 18 %.
 
 - Weaker Section Advances as a percentage to
 
 Net Bank Credit was 16.15 % as at the end of March 2011 as against the
 RBI norm of 10 %.
 
 - Gross NPA ratio declined from 1.54 % to 0.74 % and Net NPA percentage
 came down from 0.84 % to 0.30 %.
 
 - Provision Coverage Ratio increased from 47.95 % to 60.50 %.
 
 Dividend
 
 The Board has recommended a dividend of 5 % to the shareholders subject
 to the approval of the Reserve Bank of India.
 
 Capital and Reserves
 
 The Banks Capital and Reserves increased from Rs. 440.08 crore as on
 31.03.2010 to Rs. 844.64 crore as on 31.03.2011. The Capital Adequacy
 Ratio as per Basel I was 10.81 % as on 31.03.2011 as against 12.47% as
 on 31.03.10. Under Basel II, it was 11.80 % as on 31.03.11 as against
 12.99% as on 31.03.10. The benchmark prescribed by RBI is 9 %.
 
 Strengthening the Capital Base
 
 The Bank has successfully raised Rs. 380.73 crore through a Qualified
 Institutional Placement (QIP) in July 2010 by placing 2,10,00,000
 Equity Shares of face value Rs. 10 (Equity Shares) at Rs. 181.30 per
 Equity Share, including a premium of Rs. 171.30. The market
 capitalisation of the Bank as at 31.03.11 stood at Rs. 965.01 crore.
 
 Branch Expansion
 
 During the year, 5 new branches were opened at
 
 Vasai, Andheri & Prabhadevi in Mumbai, Jodhpur in Rajasthan and
 Bareilly in UP, taking the number of branches from 270 as on 31.03.10
 to 275 as on 31.03.11. The number of ATMs increased from 280 to 459
 during the year. Consequently, the Banks customer outlets rose from
 550 as on 31.03.10 to 734 as on 31.03.11. The top 5 States where the
 Bank has presence are (number of customer outlets given in brackets)
 Kerala (317), Tamilnadu (114), Maharashtra (78), Andhra Pradesh (54)
 and Karnataka (53).
 
 Deposits
 
 The total deposits of the Bank increased from Rs. 7098.48 crore as on
 31.03.2010 to Rs. 12,529.63 crore as on 31.03.2011, recording an
 increase of Rs. 5,431.15 crore at a rate of 76.51 %. This level of
 growth is the highest in the Banks history, It compares very
 favourably with the growth of the banking industry at 15.8 %. The Bank
 laid considerable emphasis during the year on mobilization of low cost
 funds on account of which CASA balances increased from Rs. 1,551.54
 crore as on 31.03.2010 to Rs. 2,869.21 crore as on 31.03.2011, showing
 an increase of Rs. 1,317,67 crore at 84.93 %. The emphasis on CASA
 enabled the Bank to reduce the average cost of deposits from 6.80 % in
 2009-10 to 6.51 % in 2010-11. CASA as a percentage to total deposits
 increased from 21.86 % as on 31.03.10 to 22.90 % as on 31.03.11.  The
 Bank launched a number of incentive based campaigns during the year for
 employees as well as
 
 customers for strengthening its resources base with special reference
 to CASA accounts. The number of deposit accounts increased from 11.41
 lacs as on 31.03.10 to 13.20 lacs as on 31.03.11.
 
 Advances
 
 Total advances of the Bank increased from Rs. 5,056,49 crore as on
 31,03.2010 to Rs. 9,121.62 crore as on 31.03.2011, an increase of Rs.
 4,065.13 crore at a growth rate of 80.39 %. This level of credit growth
 is the highest ever for the Bank and compare enviously with that of the
 growth of the banking industry at 21,55 %. During the year, the Credit
 Deposit Ratio rose from 71.23 % to 72.80 %. The number of borrowal
 accounts increased from 2.09 lacs as on 31.03.10 to 2.29 lacs as on
 31.03.11.
 
 Market Share
 
 The total business of the Bank increased by 78.13 % during 2010 - 11
 with deposits clocking 76.51 % and advances recording 80.39 %. This
 level of growth resulted in a sharp increase in the Banks market share
 on an all India basis. The market share of the Bank in deposits
 increased from 0.153 % to 0.225 % during the period 26.03.10 - 25.03.11
 while the market share in advances rose from 0.153 % to 0.223% during
 the same period. The following table portrays the Banks business
 growth vis-d-vis the industry during the year.
 
                                                      (Rs. in crore)
 
 Head        Deposits(Actuals)   Advances(Actuals)     Growth(%)
 
           26.03.10   25.03.11    26.03.10  25.03.11 Depostis Advances
 
 Our Bank      6848     11696        4964     8801     70.79   77.30
 
 All 
 Scheduled  4486574   5204703     3240399  3938659     16.01   21.55
 Commercial 
 Banks
 
 Market 
 Share (%)    0.15      0.22        0.15     0.22
 
 Priority Sector Advances
 
 The Bank continued its endeavours during the year in assisting the
 growth of the productive sectors of the economy. Priority Sector
 Advances increased from Rs. 1,409.28 crore as on 31.03.2010 to Rs.
 2,585.86 crore as on 31.03.2011, recording a growth of 83.49 %.  The
 priority sector ratio as on 31.03.2011 was 50.90 %, well above the RBI
 benchmark of 40 %, The Bank also surpassed the RBI norm of 18 % in
 respect of agricultural credit by recording 18.30 % as on 31.03.2011.
 Agricultural outstandings increased from
 
 Rs. 765.16 crore as on 31.03.10 to Rs. 922.27 crore as on 31.03.11, an
 increase of Rs. 115.17 crore at 20.53 %.  Weaker Section advances as on
 31.03,11 stood at Rs. 814.29 crore as against Rs. 477.14 crore on
 31.03.10.  Weaker Section Advances outstandings as a % of Net Bank
 Credit was 16.15% as on 31.03.11 vis-d-vis the RBI benchmark of 10 %.
 
 No Frill Accounts
 
 The number of No Frill SB accounts opened by the Bank as part of our
 financial inclusion endeavours
 
 increased from 1,00,010ason31.03.10to 1,09,711 as on 31.03.11. The
 outstanding balances under this head as on 31.03.11 were Rs. 26.05
 crore which works out to Rs. 2,374 per account even though no frills
 accounts can be opened and operated with zero balance.
 
 Profitability
 
 The Banks net profit for the year ended March 31, 2011 stood at Rs.
 26.06 crore, against Rs. 23.30 crore for the year ended March 31, 2010.
 The relatively subdued rise in net profit is attributable to
 expenditure incurred in creating additional capacities during 2010-11
 in the form of additional manpower, physical infrastructure and
 technology upgradation. The expenditure on such additional capacity
 creation translated itself into productive gains with the Bank
 recording its highest ever growth in business of 78.13 % during
 2010-11. The business per employee too rose sharply from Rs. 3.70 crore
 as on 31.03.10 to Rs. 5.08 crore as on 31.03.2011.
 
 Non-Performing Assets
 
 Focussed measures were taken during the year to reduce the level of
 existing non-performing assets, as well as preventing fresh accretion
 of NPAs. This became necessary in the context of rapid asset expansion
 during the year, The percentage of gross NPAs to gross advances
 declined from 1.54 % to 0.74 % during the year, while the net NPA ratio
 fell encouragingly from 0.84 % to the lowest ever level of 0.30 %
 during the period. The total cash recoveries, including upgradation and
 recoveries in written-off accounts, during the year was to Rs. 59.30
 crore (Rs. 44.86 crore in 2009-10) surpassing the annual target by a
 margin of Rs. 19.30 crore. The Provision Coverage Ratio also increased
 sharply from 47.95 % in 2009-10 to 60.50 % in 2010-11.
 
 The Bank could achieve a record recovery during the year through a set
 of measures, viz., action under SARFAESI Act, litigation, settlement
 through negotiation etc. The health of the borrowal accounts was
 continuously monitored with a view to constantly improving the asset
 quality and to facilitate faster recycling of funds.
 
 Customer Service
 
 The Bank attaches the highest importance to the quality of service
 rendered across its branches /
 
 offices. It has taken a series of measures during the year through
 deployment of technology and other- wise for significantly enhancing
 service quality.
 
 The Customer Service Committee of the Board, comprising of 6 Directors,
 monitors the implementation of customer service measures periodically.
 Customer Service Committees comprising of Bank personnel as well as our
 constituents have been formed at the apex level and at Branches for
 monitoring service quality and bringing about improvements in this area
 on an ongoing basis. The Bank is a member of the Banking Codes and
 Standards Board of India (BCSBI) and is actively implementing the Code
 of Commitment to Customers as also the Code for Micro and Small
 Enterprises formulated by the BCSBI. In addition to introduction of a
 number of products and services, two key developments in this area
 relate to the upgradation of the software to the latest version for
 widening the range of services to the customers and establishment of a
 24x7 Phone Banking Call Centre at Bangalore as an outsourced model to
 cater to customer needs across the country.
 
 The following important products and services were introduced during
 the year for the benefit of the customers:
 
 - Salary Multiplier account
 
 - Special Savings account for educational institutions &. Co-operative
 Societies
 
 - Premium Current account
 
 - USDhan2lndia
 
 - Instapay
 
 - Mobile Banking
 
 - Bill payment module on internet banking
 
 - Internet banking kiosks
 
 - Gift Cards
 
 - Credit Cards
 
 - Money Transfer Service Scheme (MTSS)
 
 In addition to the above, there were value adds in a number of existing
 products in line with the Banks customer centric outlook.
 
 The Bank took several measures during the year to technologically
 upgrade its grievance redressal mechanism with a view to accelerating
 the speed and enhancing the quality of response to customer complaints
 especially in an era of rapid growth.
 
 The position of customer complaints during 2010-11
 
 is as under:
 
 No of complaints received : 246
 
 No of complaints resolved : 247
 
 No of complaints pending  : 11
 
 (as on 31.03.11)
 
 The above pending complaints were closed subsequently.
 
 Investor Education and Protection Fund
 
 During the year, the Bank had transferred the unclaimed, unpaid
 dividend for the year 2002-03, an amount of Rs. 10,91,890/- to the
 Investor Education and Protection Fund (IEPF) constituted under Section
 205C of the Companies Act, 1956.
 
 Listing on Stock Exchanges
 
 The Equity shares of the Bank are listed on the Bombay Stock Exchange
 Ltd,, National Stock Exchange Ltd., and Cochin Stock Exchange Ltd.  The
 Bank confirms that it has paid the listing fees to all the Stock
 Exchanges for the year 2010-11.
 
 Conservation of energy
 
 All efforts are being made to reduce energy consumption to the maximum
 extent possible.
 
 Technology Absorption
 
 Being a Banking Company, the required technology is deployed keeping in
 view the nature of activities.
 
 Foreign Exchange Earnings and Outgo
 
 Being an authorised dealer in Foreign Exchange, all possible measures
 are taken by the Bank to increase foreign exchange earnings.
 
 The Companies (Disclosure of Particulars in respect of Board of
 Directors) Rules, 1968
 
 The statement containing particulars of employees as required under
 Section 217(2A) of the Companies Act, 1956 and the rules thereunder, is
 given in an Annexure appended hereto and forms part of this report. In
 terms of Section 219(1) (iv) of the Act, the Report and Accounts are
 being sent to the shareholders excluding the aforesaid Annexure.  Any
 shareholder interested in obtaining a copy of the Annexure may write to
 the Company Secretary at the Registered Office of the Bank.
 
 Directors responsibility statement
 
 The Directors confirm that in the preparation of the annual accounts
 for the year ended 31 March 2011:
 
 - the applicable accounting standards have been followed along with
 proper explanation relating to material departures, if any;
 
 - the accounting policies, framed in accordance with the guidelines of
 the Reserve Bank of India, were applied consistently;
 
 - reasonable and prudent judgment and estimates were made wherever
 required so as to present a true and fair view of the state of affairs
 of the Bank as at the end of the financial year and the profit of the
 Bank for the year ended 31st March 2011;
 
 - proper and sufficient care was taken for the maintenance of adequate
 accounting records in accordance with the provisions of applicable laws
 governing Banks in India;
 
 - the accounts have been prepared on a going concern basis: and
 
 - that proper systems are in place to ensure compliance of all laws
 applicable to the Bank.
 
 Changes in the Board
 
 There was no change in the composition of the Board during the year.
 All the Non-Executive Directors of the Bank have certified that apart
 from receiving the Directors remuneration / sitting fees, they have
 not entered into any material pecuniary relationship or transactions
 with the Bank, its promoters, its Directors, its senior management,
 which may affect the independence of their directorship.
 
 All Directors except Managing Director and CEO are Non-Executive
 Independent Directors.
 
 Acknowledgements
 
 The Board happily places on record its gratitude to:
 
 - The Government of India, the Reserve Bank of India, State
 Governments, Securities and Exchange Board of India and other
 regulatory bodies for their continued assistance and guidance.
 
 - The customers, shareholders, other stakeholders and well wishers for
 their valued patronage.
 
 - The officers and staff for their active involvement and contribution
 to the Banks growth and development.