The Bank''s Board of Directors is pleased to present the Report on its
business and operations for the financial year ended March 31, 2016.
During 2015-16, your Bank''s business strategy was shaped by emerging
macroeconomic developments and evolving business dynamics. Re-balancing
the portfolio mix continued to be the mainstay of your Bank''s business
strategy during the year. This, along with other critical business
enablers such as a well-calibrated organisational structure, strategic
expansion of banking touch-points, actively leveraging on its proven IT
prowess, digitisation of business processes, among other measures, has
enabled your Bank to deliver enhanced customer experience at a reduced
As on March 31, 2016, your Bank''s aggregate deposits and advances
touched Rs. 2,65,720 crore and Rs. 2,15,893 crore, respectively,
implying a growth of 2% and 4%, respectively over the previous year.
Your Bank''s business highlights for the period under review are
presented in Table 1.
During the year under review, your Bank''s gross income amounted to Rs.
31,453 crore, comprising interest income of Rs. 28,043 crore and other
income of Rs. 3,410 crore. Interest expenses stood at Rs. 21,954 crore
and operational expenses at Rs. 4,130 crore, accounting for total
expenditure (excluding provisions and contingencies).Your Bank''s
operations during the year resulted in an operating profit of Rs. 5,370
However, total provisioning of your Bank increased following the RBI''s
Asset Quality Review (AQR) which required banks to proactively provide
for certain accounts. Total provisions other than tax during the year
were at Rs. 10,340.82 crore, which mainly include Rs. 9,191 crore
towards provision for non-performing assets, bad and doubtful debts and
investments. As a result, your Bank incurred a net loss of Rs. 3,665
crore during 2015-16.
Table 1 : Key Financials
(Rs. In crore)
As on March 31 2015 2016
Capital 1,603.961 2,058.81
Reserves & Surplus 22,712.96 25,662.97
Deposits 2,59,835.971 2,65,719.83
Borrowings 61,832.46 69,573.94
Other Liabilities & Provisions 10,158.651 11,356.57
Total Liabilities 3,56,144.00 3,74,372.12
Cash & Balances with RBI 13,152.82 13,822.91
Balances with Banks & Money at
Call & Short Notice 1,489.991 2,75763
Investments 97700.88 98,999.43
Advances 2,08,376.87 2,15,893.45
Fixed & Other Assets 35,423.44 42,898.70
Total Assets 3,56,144.00 3,74,372.12
For the period 2014-15 2015-16
Total Income 32,161.62 31,453.46
Total Expenses (other
than provisions) 26,433.52 26,083.39
Provisions (other than tax) 4,440.781 10,340.82
Profit/(Loss) Before fax 1,28733 (4970.75)
Provision for fax* 413.94 (1,305.95)
Profit/ (Loss) After fax 873.39 (3,664.80)
* Net of Current Income Tax and Deferred Income Tax
For each share with face value of Rs. 10, Earnings per Share (EPS)
during the year stood at Rs. (21.77), while Book Value per Share stood
at Rs. 107.41 as at end-March 2016. For the financial year 2015-16, the
Board of Directors has not recommended any dividend.
Report on the Performance and Financial Position of Subsidiaries and
Joint Venture included in the Consolidated Financial Statement
As required by Accounting Standard-21 issued by the
Institute of Chartered Accountants of India, the Bank''s consolidated
financial statements included in this Annual Report incorporate the
accounts of its subsidiaries and other consolidating entities.
A statement pursuant to Section 129 of Companies Act, 2013 showing key
financials of the Bank''s subsidiaries/ Joint Venture is included
separately in this Annual Report.
The performance and financial position of Subsidiaries, Joint Venture
and associates of the Bank as on March 31, 2016 has been annexed to
this report as under.
Name of the entity Net Assets,
i.e., total assets Share in profit or loss
As % of Amount As % of Amount
net assets profit or
Parent : IDBI
Bank Ltd 96.92% 2772178 91 103.18% -3664 80 26
1. IDBI Capital
Ltd. 1.09% 313 05 081 -0.26% 9 27
Intech Ltd. 0.13% 37 64 87 -0.12% 4 22 08
3. IDBI Asset
Company Ltd. 0.34% 97 16 581 -0.10% 3 47 92
4. IDBI MF
Ltd. 0.00% 1 07 61 0.00% 17 30
Services Ltd. 0.46% 13185 45 -1.07% 38 10 39
Foreign: NA NA NA NA
all subsidiaries 0.21% 6145 62 -0.49% 17 26 11
Foreign NA NA NA NA
per the equity
1. IDBI Federal
Company Ltd. 1.05% 300 83 27
-0.21% 7 33 53
Foreign NA NA NA NA
TOTAL 100% 28603 41 781 100% -355199 01
Elimination -1.91% -544 98 23 1.09% -38 82 52
Net Total 98.09% 28058
43 54 101.09% -3590 8153
Note: None of the above subsidiaries have any subsidiary
Material changes and commitments, if any, affecting financial position
of IDBI Bank which have occurred during the end of financial year and
the date of Board Report.
There are no material changes and commitments affecting the financial
position of the Bank which have occurred between the end of the
financial year of the Bank i.e. March 31, 2016 and the date of the
Directors'' Report i.e. May 20, 2016.
The details in respect of adequacy of internal financial controls with
reference to the financial statements.
The Bank has adequate internal controls and processes in place with
respect to its financial statements which provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements. These controls and processes are driven through
various policies, procedures and certifications. The processes and
controls are reviewed periodically.
Your Bank computes regulatory capital requirement for credit, market
and operational risks, as prescribed under the Pillar-I guidelines of
the Basel III framework, on a quarterly basis. 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 guidelines.
The Basel guidelines have introduced a mandatory Capital Conservation
Buffer (CCB) with effect from March 31, 2016. The CCB is designed to
ensure that banks build up buffers during normal times (i.e. outside
periods of stress) which can be drawn down in case of losses incurred
during stressed period. In line with the transitional arrangements of
the regulatory guidelines, the CCB applicable for March 31, 2016 is
0.625% (25% of total CCB of 2.5%). As on March 31, 2016, the Capital to
Risk-weighted Assets Ratio (CRAR) of your Bank was 11.67% which is
above the minimum regulatory requirement of 9.625% (including CCB).
Your Bank''s Common Equity Tier 1 (CET 1) ratio was 7.99% which is also
above the minimum applicable CET 1 ratio of 6.125% (including CCB)
stipulated by RBI. The Tier-I ratio stood at 8.90% as on March 31, 2016
against the regulatory requirement of 7.625% (including CCB).
Your Bank has a Board approved policy on Internal Capital Adequacy
Assessment Process (ICAAP), in line with the Pillar-ll norms of the
Basel III framework, which enables it to internally assess and quantify
those risks that are not covered under Pillar-I as well as develop
appropriate strategies to manage risks under normal and stress
conditions. Your Bank has adopted a Disclosure Policy in accordance
with the Pillar-Ill norms under the Basel framework and consequently,
publishes disclosures on the Bank''s website at the end of each quarter.
Your Bank is at an inflection point and has a significant opportunity
to embark on a path of transformation in order to reinvigorate its
financial health. The comprehensive transformational process of the
Bank is based on five pillars, viz. Business, People, Processes,
Technology and Capital Management. Your Bank, along with leveraging on
these five transformational pillars, will also adopt a multi- pronged
strategy to achieve its business targets. This multi-pronged strategy
will encompass further leveraging the synergy across verticals,
subsidiaries and associate companies; capitalise on areas of core
competencies such as project advisory and loan syndication business;
augmenting the depositor base; aggressive focus on raising CASA
deposits; boosting fee income; stepping up lending to retail including
agricultural and MSME Lending, particularly PSL; digitisation of
processes; strengthening recovery efforts etc. These initiatives will
be complemented by strategic expansion of your Bank''s network and
adoption of latest cutting edge technology to further leverage on its
IT prowess to seamlessly cater to the growing business requirements.
All these initiatives will ensure high level of customer satisfaction
and consequently, improve the profitability of the Bank. The
transformation process of your Bank will enable it to carve a niche for
itself and emerge as a leading financial conglomerate.
Key Business Initiatives
In tandem with the broader objective of obtaining a more balanced
business portfolio mix, your Bank continued to focus on increasing its
retail business. To lend support to this business re-orientation
process, your Bank offers a bouquet of innovative and customised
products and services covering Liability, Asset, Capital Market, Third
Party products through its brick and mortar branches and ATMs as well
as alternate channels to cater to the diverse needs of its customers.
To lend it a competitive edge, your Bank continued to revamp its
existing product and services as also introduced new ones.
To widen its reach to the retail customers, the Bank has been
continuously striving to expand its footprints by tactically augmenting
its branch and ATM network. As on March 31, 2016, your Bank''s network
stood at 1,846 branches (including one overseas branch) and the number
of ATMs stood at 3,310.
Apart from augmenting its brick and mortar branches, your Bank is also
continuously expanding and strengthening its alternate channels of
delivery by leveraging its state-of- the-art technology infrastructure
to provide a wide range of banking services to its customers on 24x7
basis. Your Bank''s alternate channels of delivery viz. ATM, internet
banking, mobile and tab banking, kiosks, e-lounge facility etc. are
designed to deliver a wide range of banking services in a seamless
manner. Your Bank accords topmost priority to security and
confidentiality of customer transactions, information and data.
Consequently, your Bank continues to employ highly sophisticated
technology to ensure safe and secure environment for the customer while
transacting through alternate channels. Towards this end, one of the
path-breaking initiatives launched by your Bank during the year was the
''Abhay App'' which enables the customers to manage their debit card,
thereby minimising chance of misuse.
In adherence to the regulatory guidelines, your Bank continued to focus
on Priority Sector Lending (PSL). During the year, your Bank launched
two major products viz. IDBI MUDRA Loan and IDBI Bunkar MUDRA Yojana
(IBMY) to cater to the credit requirements of all non-farm income
generating activities under the Pradhan Mantri MudraYojna (PMMY). To
supplement the Bank''s network, your Bank has appointed corporate as
well as individual Business Correspondents/ Business Facilitators (BCs/
BFs) to expand its outreach to the priority sector segments, thereby
building a sustainable PSL portfolio.
Your Bank has been proactive in partnering with the policymakers to
further the objective of financial inclusion by ensuring access to
appropriate financial products and services needed by most vulnerable
sections of the society at an affordable cost in a fair and transparent
Your Bank, through its strategically located branches, serves the
corporate customers through its three dedicated verticals viz.
Corporate Banking Group-I (CBG-I), Corporate Banking Group-ll (CBG-II)
and Infrastructure Corporate Group (ICG). While CBG I and CBG II cater
to large-sized and mid-sized corporate customers, ICG caters to
corporate customers in the infrastructure sector which includes power,
telecom, ports, roads and bridges, airports, urban infrastructure
development, among other sectors.
Your Bank continues to be proactive in extending project appraisal,
debt syndication, structuring and advisory services across various
sectors. During the year, your Bank bagged several mandates for
appraisal and debt syndication. Your Bank has been consistently ranked
as one of the leading debt syndicators in India.
Your Bank has been active in the field of environmental banking for
over two decades and has attained the role of a pioneer in this field.
Your Bank became the first public sector commercial bank in India to
have successfully raised US$ 350 million by way of Green Bonds from the
international market. The funds raised through these Green Bonds will
be utilised towards funding clean energy projects in India.
Your Bank conducts its domestic and international Trade Finance (TF)
business through its full-fledged TF Centres (Authorised Dealer in
Foreign Exchange) and retail banking branches across the country so as
to serve its corporate and retail trade finance customers. An
innovative online facility ''IDBI eTrade'' was launched during the year
for enabling customers to place online requests for various TF products
in a paperless mode and hassle-free manner.
Your Bank''s overseas branch at the Dubai International Financial Centre
(DIFC) provides a wide-range of corporate banking services, including
External Commercial Borrowings (ECB), Foreign Currency Loans (FCL) and
syndication of ECB/ FCL, and trade finance products. Your Bank is also
exploring opportunities to expand its presence internationally.
The detailed descriptive of the Bank''s business initiatives undertaken
during the year is contained in the Management Discussion and Analysis
section of the Annual Report.
Considering CSR interventions as an investment in building corporate
reputation and employee engagement, your Bank has put in place a Board
approved CSR policy in compliance with Companies Act, 2013. Through its
CSR interventions, your Bank has been, inter alia, contributing towards
promotion of healthcare, improved access to sanitation facilities,
advancement of vocational and employable skills, enhancement of
livelihood opportunities for disadvantaged strata of the society,
supplementing environmental sustainability and holistic development of
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, 2013, the Articles of Association of your Bank and the
requirements of Corporate Governance, as envisaged in SEBI (LODR)
Regulations, 2015. The Board functions directly as well as through
various Board Committees constituted to provide focussed governance in
the important functional areas of your Bank.
As on March 31, 2016, the Board comprised of seven Directors, including
Managing Director and CEO (MD & CEO), Deputy Managing Director (DMD),
one Non- Executive Director and four Independent Directors. Shri Kishor
Kharat, Managing Director & CEO as Executive Director, Shri B.K. Batra,
Dy Managing Director as Executive Director, Ms. Snehlata Shrivastava,
Central Government official Nominee as Non-Executive Director, Shri S.
Ravi, Shri Ninad Karpe, Shri Pankaj Vats and Shri Gyan Prakash Joshi as
Independent Directors constituted the Board as on March 31, 2016. The
present strength of seven Directors on the Board, as against
constitution for the maximum strength of 13 Directors provided for
under Article 116 (1), meets the requirement of Article 114 (a) of the
Articles of Association.
The Board has a total of sixteen committees, namely, Audit Committee of
the Board, Customer Service Committee, Business Review Committee,
Information Technology Committee, Executive Committee, Remuneration
Committee, Stakeholders'' Relationship Committee, Nomination Committee,
Frauds Monitoring Committee, HR Steering Committee, Risk Management
Committee, Recovery Review Committee, Corporate Social Responsibility
Committee, Independent Directors'' Committee, Non-Cooperative Borrowers''
Review Committee and Wilful Defaulters Review Committee, to oversee
various functional aspects of your Bank''s business and operations.
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 Corporate Governance Report.
Business Responsibility Report
The Securities and Exchange Board of India (SEBI), vide its
notification in The Gazette of India SEBI/LAD-NRO/ GN/2015-16/27 dated
December 22, 2015, has mandated the inclusion of Business
Responsibility (BR) Report as part of the Annual Report for Top 500
listed entities based on market capitalisation at BSE and NSE. The BR
Report should describe initiatives taken by the listed entity from an
environmental, social and governance perspective. The Bank''s Business
Responsibility Report has been hosted on the website of the Bank
Statement under Rule 5 of the Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014
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 the Bank for a part
of the year who received remuneration in excess of Rs. 5 lakh per
month. Further, there was no personnel employed throughout the
financial year or part thereof who was in receipt of remuneration at a
rate, which in the aggregate, was in excess of that drawn by Managing
Director & CEO or Deputy Managing Director of the Bank and who held by
himself or along with his spouse and dependent children, not less than
2% of the equity shares of the Bank.
Conservation of Energy, Technology Absorption, Foreign Exchange
Earnings and Outgo
The provisions of Section 134(3)(m) of the Companies Act, 2013 read
with Rule 8(3) of the Companies (Accounts) Rules, 2014 are not
applicable to your Bank. However, your Bank has been increasingly using
information technology in its operations.
Directors'' Responsibility Statement
The Board of Directors, hereby, declares and confirms that:
a. In the preparation of the annual accounts, the applicable
accounting standards had been followed along with proper explanation
relating to material departures;
b. The Directors had selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
Bank at the end of the financial year and of the profit and loss of the
Bank for that period;
c. The Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 2013 for safeguarding the assets of
the Bank and for preventing and detecting fraud and other
d. The Directors had prepared the annual accounts on a going concern
e. The Directors had laid down internal financial controls to be
followed by the Bank and that such internal financial controls are
adequate and were operating effectively; and
f. The Directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were
adequate and operating effectively.
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 of India
(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 banks/ 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, the Bank has received various recognitions and
accolades for its excellence in the banking domain. The Board is
thankful to all such organisations/ agencies for formally recognising
the 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.
[B.K. Batra] [Kishor Kharat]
Deputy Managing Director Managing Director & CEO
Date : May 20, 2016