The Board of Directors have great pleasure in presenting the Annual
 Report together with audited Balance Sheet and Profit and Loss Account
 of the Bank for the year ended March 31,2011.
 
 During 2010-11, the Banks performance is more progressive in the
 backdrop of growth momentum in the Indian economy. The Bank has
 registered higher growth rate than the banking system both in deposits
 and advances. The Bank has witnessed significant growth in business and
 crossed the business level of Rs. 2,50,000 crore mark.
 
 Global Business Performance
 
 The Banks global deposits increased from Rs. 1,10,795 crore as on 31st
 March 2010 to Rs. 1,45,229 crore as on 31st March 2011 with a growth of
 31.08 % while global gross advances went up from Rs. 80,782 crore to
 Rs. 1,13,791 crore at 40.86 %. Hence, the total business improved to
 Rs. 2,59,020 crore with an excellent growth of 35.20 % over last year.
 
 Overseas Branches
 
 During the year, the Bank has been actively involved in the process of
 setting up of the office at Malaysia, in respect of the joint venture
 signed with Bank of Baroda and Andhra bank to open a Banking subsidiary
 in Malaysia. The subsidiary has obtained license from Bank Negara, the
 Central bank of Malaysia. The Bank is also looking ahead to expand its
 overseas operations by availing funds out of a Medium Term Note issue.
 
 As at the end of March 2011, the bank had 13 establishments abroad,
 with 6 full-fledged branches, 4 Representative offices, 2 Remittance
 Centres and 1 Extension counter.
 
 There are two branches in Hongkong and one each at Singapore, South
 Korea, Sri Lanka and Bangkok. Representative offices are located at
 Guangzhou, China, at Kualalumpur, Malaysia, at Ho Chi Minh City,
 Vietnam and at Al Karama, Dubai.  Remittance Centres operate at Boonlay
 and Serangoon, Singapore and the extension Counter is located at Sri
 Lanka.
 
 Medium Term Notes Issue (MTN)
 
 The Bank embarked on the MTN programme for a total size of USD 1
 billion in the beginning of January 2011. The primary objective of the
 programme was to raise foreign currency funds for funding the long-term
 assets of overseas branches. The key milestones associated in setting
 up the programme were obtention of second rating from Fitch, listing
 the issue on the Singapore Stock Exchange, finalizing extensive
 documentation, conducting tradeshows and deliberations with
 International Investors in a short span of time. The road shows were
 spearheaded by Chairman and Managing Director Shri.M.Narendra,
 Executive Director Mrs. Nupur Mitra and General Manager
 Shri.S.Chandrasekharan. The first tranche of the issue under the
 programme was successfully launched on 12th April 2011 for an issue
 size of USD 500 Mio in the form of Senior Unsecured Debtforatenorof
 5.5years. The pricing was, concluded at a competitive pricing of 5-year
 US Treasury +290 BPs and the issue was over subscribed to the extent of
 USD 1.9 Mio. The fixed coupon rate of the bond was fixed at 5%, semi
 annual, with an issue price at USD 99.478.
 
 Financial Performance
 
 The operating profit of the Bank went up from Rs. 1,845 crore in
 2009-10 to Rs. 2,861 crore in 2010-11 with a growth of 55.08 %. This
 attainment was all the more significant when viewed in the light of
 volatile market conditions leading to subdued treasury gains and
 increased cost of funds. Growth in operating profit can be attributed
 to expansion in volume of business especially in the second half of the
 financial year and improvement in efficiency levels.
 
 Provisions
 
 The Bank has set apart a sum of Rs. 1, 788 crore towards provisions and
 contingencies.
 
 Net Profit \Dividend
 
 The Banks net profit increased to Rs. 1073 crore in 2010-11 from Rs.
 707 crore in 2009-10 with a growth rate of 51.71%. The Bank has
 proposed to pay a dividend of 50 % for the year 2010-11.
 
 Income and Expenditure Analysis
 
 During the financial year 2010-11, the growth in total global income
 was favorable at 17.01 % over last year amounting to Rs. 13,327 crore.
 At the other end, the total expenses was controlled at Rs. 10,466 crore
 with a reasonable increase of 9.66 % over last year despite providing
 provisions towards pension and gratuity as per extant RBI guidelines
 and fresh recruitment. This was mainly possible due to various cost
 control measures taken at the micro/macro levels apart from handling of
 Asset Liability Management techniques effectively.
 
 As a result, domestic cost of deposits came down to 5.95 % in 2010-11
 compared to 6.36% in 2009-10 and the domestic yield on advances stood
 at 10.43%. The cost of domestic borrowings/others increased to 9.25 %
 in the current year due to higher borrowings to meet the liquidity
 adjustments. The increased CRR and repo rates had an impact on the
 domestic cost of funds, which increased to 6.46 % in Q4 of the
 reviewing period.  The global operatingexpenses showed a reasonable
 increase of 4.30 % during the year amounting to Rs. 2,572 crore.
 
 The domestic yield on investments increased to 7.15 % (net of
 amortization) during the year compared to 7.02 % in the last year.
 Profit on exchange (domestic) was also higher at Rs. 127 crore compared
 to Rs. 98 crore last year. Due to volatile market conditions, as said
 earlier, the profit on sale of investments reduced to Rs. 109 crore in
 2010-11, compared to Rs. 292 crore in 2009-10. The global net interest
 income increased to Rs. 4208 crore with a significant growth of 32.83%
 compared to 10.39% in last year. Consequently, there was a perceptible
 improvement in global Net Interest Margin , higher at 3.11 % during the
 year compared to 2.74% of last year.
 
 Thus, the operating profit showed a significant growth of 55.08 % over
 last year aggregating to Rs. 2861 crore in 2010-11 with improved Net
 interest income. Excluding the treasury gains earned under profit on
 sale of investments as also the impact of loss on revaluation of
 investments, the core operating profit increased from Rs. 1606 crore in
 2009-10 to Rs. 2805 crore in 2010-11 at a growth of 74.66%.
 
 Capital Adequacy Ratio
 
 The Banks Capital Adequacy Ratio as on 31.3.2011 stood at 14.55%
 compared to 14.78% as at the end of March 2010 (as per Basel II norms).
 During the current financial year, the Bank had issued 7, 39,49,343
 equity shares of face value of Rs.10 each at Rs. 142.53 per share
 (including premium of Rs. 132.53 per share) to the Government of India
 on preferential basis aggregating to Rs. 1,054 crore.
 
 Branch Network
 
 The Bank towards expanding its reach and pan India presence opened 173
 branches across the country, upgraded 9 Extension Counters. As at the
 end of the reporting period, the Bank had 2,184 domestic branches of
 which 583 were Rural branches accounting for 26.7% of total branches,
 558 Semi Urban (25.6%), 542 Urban (24.8%) and 501 Metropolitan branches
 (22.9%). The number of Extension Counters in India stood at 5.
 
 Changes in organization set up at Central Office
 
 Towards driving the business fruther and to have focused approach in
 business expansion, the bank has drawn the verticals viz. Large
 Corporate, Mid Corporate, Micro and Small and Medium Enterprises at
 Central Office. Besides the above , the Bank has integrated all its
 Treasury functions at Central Office. An exclusive transaction banking
 department was formed at Central Office for monitoring the performance
 in respect of Trade finance, Cash Management Services, Supply Chain
 Management/Channel Finance and Government business.
 
 Platinum Jubilee year Celebrations- An image building exercise
 
 The Bank has entered its 75th year of operations as on 10th February
 2011 and the Bank inaugurated the platinum jubilee celebrations on 10th
 February 2011 with a grand function organised in New Delhi followed by
 a function in Chennai.  Honble Union Ministers of State for finance
 Shri Namo Narain Meena and Shri S.S. Palanimanickam graced the function
 and inaugurated the function. Union Secretary of Finance Shri Shashi
 Kant Sharma, Chairmen of
 
 Public Sector Banks and the past Chairmen of the Bank participated in
 the function. On this occasion, 75 branches and 75 Automatic Teller
 Machines (ATMs) were opened. The Bank has launched new products viz. SB
 Student IOB MSE Plus, Bhumilakshmi. The Bank also extended its reach of
 its IOB Sampoorna, an innovative rural development project and
 distributed scholarships to Girl Students. As a part of our Banks
 Platinum Jubilee Celebrations in New Delhi, a booklet titled Success
 Stories... Making India grow since 1937 was released by the Honble
 Union Ministers of State for finance Shri Namo Narain Meena and Shri
 S.S. Palanimanickam. An exhibition of Self Help Groups products was
 also organized.
 
 Platinum Jubilee Celebrations is being celebrated with customer and
 public participation in various places of the country till the end of
 the Platinum Jubilee year. The Bank has been translating these efforts
 for expanding the customer base.
 
 The Banks image building exercise is impacting its presence well in
 the market. Shri M.Narendra, Chairman and Managing Director of the Bank
 has figured in the list of Top 10 Indian CEOs - Indias and Worlds
 most talked-about CEOs in March 2011 published in the press recently
 (Business Today magazine).
 
 With the strong and committed staff at all levels and with the positive
 industrial relations climate, the Bank has been converting all the
 available business opportunities into results and do not foresee any
 threats in its business growth.
 
 Financial Inclusion
 
 With a view to extending banking services and products in un-banked
 villages (having population of over 2000) the Bank introduced Smart
 Card Banking through Business Correspondent as per the guidelines of
 Reserve Bank of India. Rural people can transact banking business at
 the village itself with the use of biometric smart cards and Hand Held
 Devices. Business Correspondents deliver the services at the front end.
 The devices are voice enabled in vernacular language and user friendly
 for illiterates.
 
 The Bank so far covered 781 allotted villages under Smart Card Banking
 across the country. In addition
 
 to the above, other 30 villages were provided with the service of
 Business Correspondent.ln all, smart Card Banking is being implemented
 in 16 States and 1 Union Territory spreading over 33 Regions.  During
 the year under review the Bank has opened 5,38,219 No-frills SB
 accounts and issued 36,625 biometric smart cards.
 
 Regional Director, Reserve Bank of India, Chennai appreciated our
 Banks initiative under Financial Inclusion plan in a press release
 that Indian Overseas Bank was the only Bank to have begun its rural
 operation in the State using Information and Communication Technology
 model in April 2010. The Executive Director, Reserve Bank of India also
 appreciated Banks performance by a special letter congratulating the
 good job done by the Bank.
 
 The Bank bagged SKOCH AWARD for Financial Inclusion. Award was
 conferred to the Bank for redefining the concept of last mile banking
 when it took the banking services to the Kaanni Tribal hamlets in
 Papanasam, Tamil Nadu. On the Financial Inclusion Day (on 23.01.2011),
 Smile - Walk-in-bank campaign was launched and over 2.20 lacs No-
 frill accounts were opened.
 
 Regional Rural Banks
 
 The Regional Rural Banks (RRBs) sponsored by the Bank, viz., Pandyan
 Grama Bank and Neelachal Gramya Bank performed well during the year.
 Pandyan Grama Bank has earned Net Profit After Tax consecutively for
 the past fourteen years and recorded NIL Net NPA continuously for the
 past eight years. Pandyan Grama Bank has achieved 100% Core Banking
 Solution of all 203 branches. Neelachal Gramya Bank has completely
 wiped out the accumulated loss two years ahead of schedule.
 
 Customer Service
 
 The Bank is a member of Banking Codes and Standards Board of India
 (BCSBI) and has adopted the Code of Commitment to Banks Customers
 drafted by Banking Codes and Standards Board of India (BCSBI). During
 this year, the Cheque Collection Policy document relating to customer
 service, was amended by incorporating the guidelines issued by BCSBI.
 Customer Fortnight was observed in all branches during November 2010.
 
 The details of customer complaints received and redressed during the
 year 2010-11 are given below.
 
 Sl.            Details                       At Central   At Regional 
 No.                                           Office        Offices
 
 1.     No. of complaints pending at the
        beginning of the year                     58           62
 
 2.     No. of complaints received during
        the year                                1009         1447
 
 3.     No. of complaints redressed during
        the year                                1022         1398
 
 4.     No. of complaints pending at the end
        of the year                               45          111
 
        Settlement Rate %                      95.78        92.64
 
 
 Number of awards passed by the Banking Ombudsman and implemented by the
 Bank are as follows.
 
 - No. of complaints pending at the beginning of the year      1
 
 - No. of awards passed by Banking Ombudsman during the year   0
 
 - No. of awards implemented during the year                   0
 
 - No. of unimplemented awards at the end of the year          1
 
 
 The Complaints are being received directly by Central Office and
 Regional Office (through letters, e-mails and telephone) and also
 through other channels like Reserve Bank of India, Banking Ombudsman,
 Government of India etc. Customer Service Centre, for which the Bank is
 the Convenor in Chennai City, had resolved all the complaints during
 this year.
 
 Customers are provided with the facility of Toll Free Tele services
 (No. 1800-425-4445) by engaging an outside agency for receiving
 complaints. These complaints are being resolved within 48 hours.
 
 Retail Banking and Marketing
 
 The business under retail banking segment showed a remarkable
 improvement during this year. Under fee based income, Life and General
 Insurance products showed tremendous growth.  The income from fee-based
 products registered a growth of 27.26 % in 2010-11.
 
 Distribution of life policies as a Corporate Agent of Life Insurance
 Corporation of India showed excellent growth both in premium
 mobilization as well as commission income. Bank had achieved the status
 of No.1 Corporate Agent of LIC of India.
 
 Income from life insurance products grew by 39.40% over 2009-10, income
 from marketing of non life insurance products by 57.58% over
 2009-10.insurance linked products like IOB Jeevan, IOB Healthcare Plus,
 Vidya Jyothi with Suraksha (insurance cover for Educational Loans)
 continued to register impressive growth .  Distribution of non life
 insurance products as a Corporate Agent of Universal Sompo General
 Insurance had resulted in good business and income realizations.
 
 Retail Sale of Gold coins continued to show impressive growth. The
 mobilization under Mutual Fund Distribution also received special focus
 and contributed to the fee based income of the Bank.
 
 Retail Loans improved by 20.35% over the previous year with Housing
 Loans and Educational Loans as major contributors.
 
 The following campaigns were conducted during the year 2010-11 for
 improving the retail business:
 
 - Akshaya Thrithiai Campaign for Sale of Gold Coins.
 
 - Debit & Credit Card Mobilisation Campaign.
 
 - SB Month for Savings Account Expansion.
 
 - Catch them Young for canvassing Student Accounts.
 
 - Gold Coin Campaign for increasing retail gold coins sale.
 
 - Platinum Jubilee Home Loan Exhibition to expand Home Loans.
 
 - Tax Saving Month Campaign for Tax Saving Products.
 
 - Customer Reach programmes like Walk in Bank and IOB Smile
 Campaigns.
 
 New product developments such as - Special and focused products like
 Corporate Salary, SB Student, SB Platinum, CD Supreme, Gift Card and
 IOB Career Dream were developed and marketed to capture and expand
 business from the target segments.
 
 All these coordinated campaigns and introduction of new products not
 only improved the retail business segment but also strengthened its
 customer base.
 
 Official Language Policy
 
 The Bank took all efforts to implement the Official Language Policy of
 Government of India during the year 2010-11. During the year, 192 Staff
 members who do not possess working knowledge of Hindi were trained in
 IOB Praveen and Banking Pragya Courses. 1,912 Staff members possessing
 working knowledge of Hindi were trained in General Hindi Workshops held
 during the year. Rajbhasha Sangoshti was held on 25.09. 2010 for heads
 of Central Office departments to strengthen the Official Language
 Implementation.
 
 Minutes of all meetings of all board level committees were translated
 in Hindi. As per the directives of Government of India, the Bank has
 enabled Hindi Unicode font in all Regional Offices and has provided the
 facility of downloading the same in IOB ONLINE. The Bank has also
 provided the Banking terminology in IOB ONLINE for the benefit of staff
 members. The Bank has given necessary training to 1412 staff members
 for the use of Hindi in computers. The Bank has published all the four
 issues of quarterly Hindi Magazine VANI in print as well as in
 digital form. The Banks website has been made available in Hindi also.
 
 The Bank has been awarded Third Prize for Hindi house magazine VANI
 for the year 2009-10 by Reserve Bank of India in the Inter-Bank Hindi
 Magazine Competition for Hindi house magazines of banks and financial
 institutions. The Bank has been awarded Consolatiion Prize under Indira
 Gandhi Rajbhasha Shield for the year 2009-10 for commendable work in
 the area of Official Language Implementation. The award was received by
 our Banks General Manager Shri Ashok Shankar from His Excellency Vice
 President of India Shri Mohd. Hamid Ansari on 14th September, 2010.
 
 Regional Offices were inspected on Official Language implementation by
 Official Language Department, Central Office and Rajbhasha Shields were
 awarded to Regional Offices and branches doing good work in official
 language implementation.
 
 Annual Official Language Review Meeting and Unicode training for
 Official Language Officers was held from18th to 20th June 2010 to
 assess the progress made in the area of Official Language
 implementation in Regional Offices. The drafting and evidence
 Sub-Committee of Parliamentary Committee on Official Language had
 discussions with the Chairman and heads of Banks of Town Official
 Language Committees at Coimbatore and Jhansi. The Bank was also
 included for discussion and the committee expressed satisfaction over
 the performance of the Bank at these centers.
 
 As Convenor of Chennai Town Official Language Implementation Committee,
 the Bank has received the Second Prize for its efforts in
 implementation of Official Language Policy during the year 2009-10 from
 Official Language Department, Ministry of Home Affairs, Government of
 India. The Prize was given by Shri Ajay Makan, Honble Minister of
 State for Home Affairs, New Delhi on 22nd December 2010. On behalf of
 the committee, the Bank conducted two General Hindi Workshops, 12
 Inter-Bank Hindi competitions, Joint Hindi Month Celebration function
 and Hindi Unicode training programme for the staff members of member
 banks / Financial Institutions. A special Seminar in Hindi on
 Increasing Banking business/ Human Resource Development and Importance
 of Marketing in banks / Prevention of frauds for Executives were held
 on 21.02.2011 and 12.03.2011 respectively. In addition to this, two
 half yearly meetings were also conducted. Two issues of half-yearly
 magazine of Chennai Bharathi were brought out.
 
 Corporate Governance
 
 Corporate Governance extends beyond Corporate Law. Its fundamental
 principle is not only fulfilling the requirement of law but also
 fulfilling its responsibility towards the society. The social
 responsibility evokes from the good governance enhances the social
 relevancy of a business; It is needed to create a corporate culture,
 openness and social responsive corporate entity.
 
 The Bank has laid down a well-defined, Code of Conduct, which addresses
 issues of integrity, conflict of interest and confidentiality and
 stress the need of ethical conduct, which is the basis for good
 governance. This Code of Conduct is applicable to all the members of
 the Board and the Senior Management (i.e. General Manager) of the Bank.
 
 The Bank has complied with the guidelines of Reserve Bank of India,
 Securities and Exchange Board of India and other regulatory authorities
 for Corporate Governance, which has been examined by the Statutory
 Central Auditor. The Bank gives high priority to good Governance, which
 reflects in transparent ownership structure, management and accounting
 practices of the Bank. The Board recognizes its role in promoting good
 governance and in creating a framework of best practices, processes and
 ethics to observe and foster high ethical standards.
 
 The Bank facilitates good Corporate Governance by its commitment for
 ethical practices in the conduct of its business, to ensure
 transparency and efficiency. The Bank is also committed to follow high
 disclosure standards and transparency in financial reporting so as to
 keep investors and stakeholders adequately informed. It is essential
 for proper accountability between organization and its stakeholders.
 
 Pursuant to Clause 49 of the Listing Agreement, Management Discussion &
 Analysis Report, Report on Corporate Governance as well as certificate
 by the auditors regarding Compliance of the conditions of Corporate
 Governance form part of this Annual report.
 
 Board of Directors
 
 Shri S.A.Bhat, Chairman and Managing Director, demitted office on
 31.10.2010 on his superannuation. Shri M.Narendra assumed charge as
 Chairman and Managing Director on 01.11.2010. Shri Y.L. Madan,
 Executive Director, demitted office on 31.08.2010 on his
 superannuation. Shri A.K.Bansal, assumed charge as Executive Director
 on 01.09.2010.
 
 Smt. Chitra Chandramouliswaran, Reserve Bank of India nominee director,
 demitted office on 29.07.2010. The Government of India (GOI) nominated
 Shri S.V.Raghavan, as Reserve Bank of India nominee director with
 effect from 30.07.2010.
 
 Shri N.Sridaran, demitted office as Workmen Employee Director on
 19.04.2010, on completion of his tenure of three years. The Government
 of India (GOI) nominated Shri Sridhar Lal Lakhotia, as Workmen Employee
 Director with effect from 9.8.2010.
 
 The Board of Directors place on record the valuable contributions made
 by the erstwhile Directors and extend a warm welcome to the new
 Directors.
 
 Acknowledgements
 
 The Board of Director place on record the valuable co-operation
 received from the Government of India, Reserve Bank of India,
 Securities and Exchange Board of India (SEBI) and Stock Exchanges,
 various State Governments and Financial Institutions. The Board
 expresses its gratitude to the Hong Kong Monetary Authority, Monetary
 Authority of Singapore, Financial Supervisory Services, Korea, Central
 Bank of Sri Lanka, China Banking Regulatory Commission, Bank Negara,
 Malaysia, Bank of Thailand, State Bank of Vietnam and Central Bank of
 UAE for their support.
 
 The Board of Directors records the patronage and goodwill of the valued
 customers, shareholders, other stakeholders and correspondents of the
 Bank in India and abroad. The Directors are happy that the industrial
 relations are very cordial and happy on account of positive attitude on
 the part of Employees Union and OfficersAssociation.
 
 
 
                         For and on behalf of the Board of Directors
 
                                                          M.NARENDRA
                                      Chairman and Managing Director
 
 
 Chennai 
 May 2 , 2011