During 2013-14, your Bank''s gross income amounted to Rs. 29,576 crore,
comprising interest income at Rs. 26,597 crore and other income at Rs.
2,979 crore. Interest expenses of Rs. 20,576 crore and operational
expenses of Rs. 3,319 crore accounted for total expenditure, excluding
provisions and contingencies, of Rs. 23,895 crore. Total provisions
during the year were at Rs. 4,560 crore, which mainly include Rs. 1,862
crore towards provision for bad and doubtful debts and investments, Rs.
1,393 crore towards bad debts written off, Rs. 486 crore towards
restructured assets, Rs. 173 crore towards incremental prudential
provisions for standard assets and Rs. 620 crore towards tax. During
2013-14, your Bank''s operations resulted in Profit Before Tax (PBT) of
Rs. 1,741 crore. After a provision of Rs. 620 crore towards tax, Profit
after Tax (PAT) amounted to Rs. 1,121 crore. The appropriation of PAT, as
approved by the Board of Directors, is given in Table 2.
For the year ended March 31, 2013 2014
Net Profit/(Loss) for the year 1,882.08 1,121.40
Profit/(Loss) brought forward 672.65 903.86
Profit available for Appropriations 2,554.73 2,025.26
Transferred to Statutory Reserve 470.83 281.00
Transferred to Capital Reserve 191.82 9.32
Transferred to General Reserve 150.00 400.00
Transferred to Special Reserve created and
maintained u/s 36(1)(viii) of IT Act, 1961 300.00 250.00
- Equity Shares 466.47 160.41
- Tax on Dividend 71.75 27.76
Balance of Profit carried to Balance Sheet 903.86 896.77
For each share with face value of Rs. 10, Earnings per Share (EPS) during
the year stood at Rs. 8.00, while Book Value per Share stood at Rs. 136.52
as on end-March 2014. The Directors are pleased to recommend dividend
at 2.75% on the fully paidup equity share capital for 2013-14, which
along with Interim dividend at 7.25% paid during the year, aggregates
Your Bank computes regulatory capital requirement for credit, market
and operational risks in compliance with the Pillar-I guidelines under
Basel norms. Your Bank has migrated to the Basel III framework and has
been calculating capital ratios on a quarterly basis as per Basel III
norms since April 1, 2013. Your Bank also computes capital ratios
following the Basel II norms as stipulated by RBI since March 31, 2009.
With regard to the requirement for higher quality capital highlighted
under Basel III norms, your Bank, at present, has sufficient common
equity to meet the regulatory requirements as stipulated in the
Currently, your Bank follows the Standardised Approach for credit risk,
Standardised Measurement Method (SMM) for market risk and the Basic
Indicator Approach (BIA) for operational risk. Your Bank is upgrading
its systems and processes in order to migrate to advanced approaches
under Basel II. To comply with the Basel Pillar II norms, your Bank has
a Board-approved policy on the Internal Capital Adequacy Assessment
Process (ICAAP). In compliance with the Pillar III requirements under
Basel norms, your Bank has implemented a Disclosure Policy. The
disclosures for every quarter are available on your Bank''s website.
As on March 31, 2014, your Bank''s Capital to Risk-weighted Assets Ratio
(CRAR) works out to 11.7%, which is above the minimum regulatory
requirement under Basel III of 9.0%. Similarly, your Bank has a CET1
ratio of 7.8%, which is above the minimum applicable CET1 ratio of 5.0%
as stipulated by the RBI. The Tier-I ratio also stands at 7.8% as on
March 31, 2014 against the regulatory requirement of 6.5%.''
During 2013-14, your Bank has undertaken various initiatives to
register growth in the retail business segment with special emphasis on
higher mobilisation of Current Account and Savings Account (CASA)
deposits. Your Bank followed a strategy of deepening and widening the
corporate banking and investment banking relationships.
Simultaneously, special emphasis was laid on acquisition and expansion
of its Priority Sector Business, which includes lending to weaker
sections, MSE and Agri business, to broaden its asset portfolio.
KEY BUSINESS INITIATIVES
Business initiatives in the retail banking space during the year were
driven by significant expansion in branch network and matching skilled
manpower. Your Bank added 309 new branches during the current financial
year, taking the total number of branches to 1388 as on March 31, 2014.
Your Bank, as part of customer convenience, also demonstrably
strengthened its alternate delivery channels by expanding its ATM
network from 1,702 as on March 31, 2013 to 2301 as on March 31, 2014.
Your Bank has emerged as one of the dominant, competitive and
sought-after players in the structured retail finance segment, offering
an array of innovative products catering to the financial needs of all
customer segments in this domain. To ensure wider customer coverage
and tap the growing opportunities emerging from the expanding delivery
network, your Bank, apart from expanding its bouquet of retail asset
offerings, introduced a simplified and customer friendly process for
structured retail asset products. This is expected to augment your
Bank''s market share. Your Bank has also leveraged its state-of-the-art
technology platform to implement several key initiatives, which are
detailed in the Management Discussion and Analysis section of the
Your Bank continued to aggressively pursue a ramp up in its Priority
Sector Lending (PSL), broadly comprising loans to weaker sections,
agriculture, MSE, housing and education loan segments. As an enabler, a
dedicated business vertical, viz. Priority Sector Group (PSG) was
formed by merging your Bank''s Agri and MSE business verticals. In
addition to six dedicated PSG Processing Centres (PPCs) with trained
staff to process PSL proposals expeditiously, there are 44 dedicated
branches exclusively for PSL business. Your Bank has also empowered
retail branches to service the MSE and Agri customers across India.
Additionally, it conducted workshops in various Agri and MSE clusters
for acquainting existing and potential clients with its PSG products,
facilities and services. Your Bank also actively participated in
various conferences, trade fairs and promotional events to expand its
reach in this sector.
Your Bank continued to strengthen its Alternate Banking Channels like
ATMs, internet banking, mobile banking, among others, to reduce
customers'' dependence on the branch channel, while simultaneously
offering 24x7 facilities. From your Bank''s perspective, these
facilities are cost-effective as the transaction cost is less compared
to the branch channel. Your Bank gainfully leveraged the branch network
during the festive season for maximising sales of Prepaid Card
products. Your Bank also initiated various measures to induce its
customers to use the IDBI Bank Debit Card more frequently for purchases
at Point-of- Sale (POS) locations. The Alternate Channels and Merchant
Acquisition Business provide avenues for augmenting fee based income,
besides helping acquire/ deepen existing relationships. Your Bank has
also been actively engaged in initiatives aimed at enhancing customer
awareness on cyber frauds and its prevention. It undertook measures to
improve the security level of Alternate Channels, especially through
internet banking, in view of rising incidence of cyber frauds.
Your Bank has a dedicated vertical, viz. Corporate Banking Group (CBG),
which caters to the financial needs of medium and large corporate
clients. The Group is organised across seven regions spanning 25 cities
and operates through 29 Specialised Corporate Branches (SCBs). As a
strategic initiative, the portfolio was granularised to avoid
concentration of risk and Non-Fund business/Fee based Income from its
corporate clientele was aggressively pursued. To provide personalised
services to customers, Client Service Teams (CSTs), comprising members
from various product verticals, have been formed at regional and branch
levels. In view of the turbulent macroeconomic environment and
difficulties confronting the customers, a dedicated Focused Asset
Management Group (FAMG) was established to ensure timely resolution of
issues, and thereby, manage assets effectively.
During 2013-14, your Bank opened two new Nostro Accounts in EURO and
GBP currencies. Further, to make available timely foreign currency
funds to the exporters at a competitive rate, your Bank signed
Agreements with its Foreign Correspondent Banks for Foreign Currency
During the year, your Bank opened 12 new full – fledged Trade Finance
(TF) Centres (Authorized Dealer in Foreign Exchange) pan-India, taking
the total number of TF locations to 52. Your Bank continued to
strengthen its relationship with foreign banks for facilitating Trade
Finance business. During the reference period, your Bank established
Relationship Management Application (RMA) with 21 major Foreign Banks,
taking the total number of RMAs to 1,442. With the enhanced
networking, your Bank has been able to handle bi-directional trade
transactions in major parts of the world.
Your Bank continued to derive first-mover advantage in a number of key
areas. It was the first Bank in India to develop online payment of
stamp duty and registration fees by issuing e-SBTR (Online Secured Bank
Treasury Receipt) in Maharashtra. Your Bank was the first lender to
finance the toll collection projects of NHAI, awarded under a long-term
Operate-Maintain-Transfer (OMT) arrangement, spanning a stretch of 275
km-long highways out of the total 1,800 km highways identified by NHAI
for such OMT projects. Your Bank continued to garner awards and
accolades from various quarters for operational excellence and its
initiatives beyond its core banking business.
Your Bank''s advertising and publicity initiatives intensified during
the year with its re-branding campaign, launched after a gap of four
years, serving as its centre-piece. The campaign, which spanned from
end-October 2013 to early February 2014 in assorted media, but
primarily as a television commercial, focused on repositioning your
Bank, using a simple concept like friendship to convey the brand
attribute and positioning. A new tagline, ''Bank Aisa Dost Jaisa'', was
conceived to echo the brand''s USP as a warm, friendly Bank that cares
for its constituents. After the new brand campaign closed out, retail
product campaigns of its flagship products were launched, drawing upon
the DNA and tonality of brand campaign communication. The brand
campaign also finds its echo in the core theme of this year''s Annual
Report: ''Strengthening Friendship. Touching Lives.''
The details of your Bank''s key initiatives during 2013-14 are featured
under the Management Discussion and Analysis section of this Annual
To execute its core strategy of building a robust customer base,
facilitate CASA and retail-cum-PSL growth, improve customer service and
enhance inclusive banking, your Bank embarked on a calibrated branch
expansion drive, while adding 309 branches during 2013-14. Of the
domestic branch network of 1387 branches as on March 31, 2014, 319
branches are located in metropolitan centres, 426 in urban centres, 372
in semi-urban centres, 146 in rural centres and 124 branches at rural
unbanked centres. Besides, your Bank has one fully operational overseas
branch at Dubai International Financial Centre (DIFC), Dubai.
BOARD OF DIRECTORS
Your Bank''s Board of Directors is broad-based and its constitution is
governed by the provisions of the Banking Regulation Act, 1949, the
Companies Act, the Articles of Association of your Bank and the
requirements of corporate governance, as envisaged in the Listing
Agreement with the Stock Exchanges. The Board functions directly as
well as through various Board-level Committees constituted to provide
focused governance in your Bank''s important functional areas.
As on March 31, 2014, the Board comprised nine Directors, including the
Chairman and Managing Director (CMD), two Deputy Managing Directors
(DMDs), one Non-Executive Director and five Independent Directors. No
Director is related to any other Director on the Board.
The Board has a total of 13 committees to oversee various functional
aspects of your Bank''s business and operations. Two new Committees,
viz. Business Review Committee and Corporate Social Responsibility
Committee, were added during the reporting period.
Your Bank is committed to adopting the best corporate governance
practices. It believes that proper corporate governance is not just a
requirement for regulatory compliance, but also a facilitator for
enhancement of stakeholders'' value. The details of your Bank''s
corporate governance practices are given in this Annual Report as a
separate section under Management Discussion and Analysis.
STATEMENT UNDER SECTION 217 (2A) OF THE COMPANIES ACT 1956
There were no personnel in your Bank''s services, during the financial
year under review, who received remuneration over Rs. 60 lakh annually.
Besides, there were no personnel in the service of your Bank for a part
of the year who received remuneration in excess of Rs. 5 lakh per month.
The provisions of Section 217(1) (e) of the Act relating to
conservation of energy and technology absorption do not apply to your
DIRECTORS'' RESPONSIBILITY STATEMENT
The Board of Directors hereby declares and confirms that: a. In the
preparation of accounts, the applicable accounting standards had been
followed along with proper explanation relating to material departure.
b. The Directors had adopted accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent to give a true and fair view of the state of affairs of your
Bank at the end of the accounting year and of your Bank''s profit or
loss for that year.
c. The Directors had taken proper and sufficient care for the
maintenance of adequate accounting records, in accordance with the
regulatory provisions, to safeguard your Bank''s assets, prevent and
detect fraud and other irregularities.
d. The Directors had prepared the accounts on a going concern basis.
Your Bank''s Board of Directors is sincerely grateful to the Government
of India, Reserve Bank of India (RBI), Securities and Exchange Board of
India (SEBI), Insurance Regulatory and Development Authority (IRDA) and
all other Statutory/ Regulatory Authorities for their valuable
co-operation and guidance. The Board also acknowledges, with gratitude,
the co-operation and support received from various State Governments
and other banking/ financial institutions. The Board thanks various
multilateral institutions and international banks/ institutions for
their periodic support. The Board takes this opportunity to put on
record its deep sense of gratitude to its loyal shareholders and
customers for extending their support during the year and looks forward
to their continued association in the years ahead.
During the financial year, your Bank has received various recognitions
and accolades for its excellence in the core banking domain and beyond.
The Board is thankful to all such organisations/ agencies for formally
recognising your Bank''s efforts. The Board appreciates the sincere and
devoted services displayed by its entire staff and highly values their
commitment in improving your Bank''s performance on a sustained basis.
Place: Mumbai [M.S. Raghavan]
Date: April 30, 2014 Chairman and Managing Director