Ladies and Gentlemen,
 
 It gives me immense pleasure in extending a warm welcome to our
 distinguished shareholders to the 79th Annual General Meeting of the
 bank. It is indeed a great privilege to address you all for the first
 time in this new Corporate Office Complex. The Directors’ Report and
 the audited statement of accounts for the period ended 31st March 2003
 have already been provided to you. I shall consider them as read.
 
 Before I present to you our performance during the year and highlight
 the future potential, I wish to share with all of you that due to your
 support, satisfaction of our customers, performance of our employees,
 strength of my team and guidance of the Board of Directors, my tenure
 as Chairman of your bank has been extended for a further period of
 three years with effect from 13th July 2003. I acknowledge with
 gratitude the approval accorded by the Reserve Bank of India in this
 regard. 
 I wish to recollect that in the previous three years, your bank has
 achieved many a milestone. Some of the most notable are obtaining a
 grand image make-over by shifting to a new Corporate Office Premises,
 Total Business Turnover exceeding Rs. 12,000 Crore, Migration to a
 Centralised Core Banking Solution, Introduction of ATMs, Bonus and
 Rights issues of shares and Strategic Business Partnerships with
 Corporation Bank, MetLife India Insurance Co. Pvt. Ltd. & Western Union
 Financial Services Inc. Let me now dwell upon the bank’s performance
 during the year 2002-03 in the backdrop of the present domestic and
 international economic setting.
 
 
 
 ECONOMIC ENVIRONMENT
 
 War clouds significantly affected businesses globally during the
 previous financial year. However, the bulging foreign exchange reserves
 at over  billion have proved to be sufficient cushion against such
 unforeseen international developments.
 
 In the domestic economy, failure of the monsoon significantly affected
 sectors like consumer durables, which depend mainly on the purchasing
 power of people. Due to insufficient monsoon and consequent fall in
 production, GDP estimate for the year 2002-03 has been lowered to
 4.40%.
 
 Industrial activity revived in the first quarter of 2003, with the
 Index of Industrial Production (IIP) consistently registering positive
 growth rates. Infrastructure sector received a boost in the budget 2003
 with the announcement of Rs. 40,000 Crore plan.
 
 Services sector in general and Banking & Insurance in particular are
 consistently registering good growth rates. Transport & Communication,
 Healthcare, Hospitality and Business Process Outsourcing (BPO)
 activities have also intensified in India.
 
 To avoid any strain on liquidity due to heavy borrowing by the centre
 and by foreign capital inflows, the Reserve Bank of India continued its
 open market operations and hence eased the pressure on liquidity and
 interest rates. With the Government aiming at augmenting revenue and
 re-prioritising expenditure, Gross Fiscal Deficit is expected to fall
 from 5.90% to 5.60% of GDP in 2003-04 .
 
 The soft interest rate regime continued during the previous financial
 year 2002-03. CRR has been reduced from 5.00% as on June 2002 to its
 present level of 4.50%. Dated debt instruments’ yields have also fallen
 marking the easy liquidity-soft interest rate preference of the RBI.
 
 
 BUSINESS PERFORMANCE 2002-03
 
 Deposits
 
 Your bank’s total deposits have increased by Rs. 1,290.24 Crore to Rs.
 8,291.72 Crore registering a growth rate of 18.43% as against
 industry’s growth rate of 12.20% (net of mergers). Our aggregate
 Deposits (excluding Inter-bank deposits) have increased by Rs. 1,166.18
 Crore to Rs. 7,994.12 Crore and the Non-Resident deposits have gone up
 to Rs. 607.63 Crore from Rs. 531.78 Crore in the previous year. The
 latest facility offered to our customers, MoneyplantTM ATM services
 introduced across the country in January ’03 has received a good
 response and helped us increase the share of low cost deposits. As an
 add-on feature to the SB account, we introduced K-Power with a facility
 to withdraw upto Rs. 15,000 as a personal loan.
 
 Advances
 
 Your bank’s net advances increased by Rs. 482.16 Crore to Rs. 3,899.70
 Crore registering a growth rate of 14.11%. Priority sector advances
 increased from Rs. 1,194.81 Crore to Rs. 1,500.93 Crore. Advances to
 priority sector, including Rural Infrastructure Development Fund (RIDF)
 and SIDBI priority sector bonds, formed 42.53% of the net bank credit
 exceeding the national target of 40%. Export Credit formed 13.41% of
 the bank’s credit portfolio as against the minimum stipulation of 12%.
 
 Investments
 
 Due to various domestic and international developments and due to
 general recession in the economy, credit off-take was slow during the
 year 2002-03. As a result, net investments in securities increased from
 Rs. 3467.15 Crore as on 31.03.02 to Rs. 4432.61 Crore as on 31.03.03
 registering a growth rate of about 28%.
 
 FINANCIAL PERFORMANCE 2002-03
 
 Profitability
 
 Your bank’s total income has gone up to Rs. 1,050 Crore from Rs. 984.26
 Crore. Owing to higher investment in securities, income on investments
 has shown significant increase. While Operating Profit has gone up from
 Rs. 250.88 Crore to Rs. 253.37 Crore, Net Profit has crossed the magic
 figure of Rs. 100 Crore to reach Rs. 110.12 Crore registering a growth
 rate of over 20%.
 
 Capital Adequacy Ratio (CAR)
 
 The net owned funds of the bank have gone up from Rs. 441.99 Crore to
 Rs. 583.40 Crore, an increase of over Rs. 140 Crore. During the year
 the bank has issued bonus shares in the ratio of 1:1 and rights issue
 in the ratio of 1:2 post bonus. The CAR of the bank has improved from
 12.96% as on 31.03.2002 to 13.44% as on 31.03.2003.
 
 Dividend Distribution
 
 Keeping in mind the overall performance of the bank and the future
 outlook and to enhance shareholder value, I take pleasure in announcing
 that the Board of Directors has declared a divided of 22% on equity
 shares including bonus and rights shares.
 
 RISK MANAGEMENT
 
 The broad classes of risk faced by a bank are Credit Risk, Market Risk
 and Operational Risk. Your bank has exclusive set-ups to monitor credit
 risk rating of the borrowers and market risk. The Inspection & Audit
 Department is managing operational Risk.  The Financial Sector reforms
 will not be complete without an effective mechanism for recovery of
 loans. In due course, lenders are likely to realise the full potential
 of the Securitisation of Financial Assets and Enforcement of Securities
 Interest Act, 2002.  As on 31.03.2003 the net Non-performing Assets of
 your bank stood at 7.36%. In addition to making liberal provisions more
 than sufficient under the regulations, your bank has stepped up efforts
 for recovery of bad loans by setting up an exclusive Recovery
 Department headed by a General Manager. On the strength of this measure
 we have targeted the NPAs to reduce to less than 5% of advances.
 
 DISTRIBUTION NET WORK
 
 During the year 2002-03 your bank has opened one branch each in Delhi,
 Mumbai, Bangalore and Lucknow taking the total number of branches to
 360. Your bank has tied up with Corporation Bank for ATM network
 sharing, in addition to installing 12 ATMs in Bangalore, Chennai and
 Mumbai. Thus customers of the bank have access to over 500 ATMs at
 present.
 
 BUSINESS PARTNERSHIPS
 
 Technology
 
 Your bank is riding high on world class banking technology offered by
 Infosys Technologies Ltd. Our Centralised Core Banking Solution has
 given us wider reach by networking of branches and helped us provide
 ATM services. At present more than 140 branches have been networked.
 The level of Management Information System & Control (MISC) and Risk
 Management is also high with our technology platform.
 
 Bancassurance
 
 With a view to becoming a financial supermarket by providing a range of
 financial services to our customers and in an effort to increase
 fee-based income of the bank, we have entered into a strategic alliance
 with US based MetLife India Insurance Co. Pvt. Ltd. to distribute Life
 Insurance products.
 
 Money Transfer 
 
 With a view to providing superior customer service, your bank has tied
 up with Western Union Financial Services Inc. to effect speedy
 remittance from abroad.
 
 HUMAN RESOURCES
 
 The greatest assets of service organisations are its employees. Our
 4,320 strong human capital is the key behind the strong financials of
 the bank. During the year, 1741 employees were imparted training on
 various disciplines in different institutions apart from our own Staff
 Training College (STC). The employee productivity has increased from
 Rs. 247 lakh as on 31.03.02 to Rs. 275 lakh as on 31.03.03. Your bank
 has carried forward its tradition of cordial and healthy industrial
 relations.
 
 MISSION AND GOALS
 
 Mission of an organisation is driven by long-term paradigm shifts in
 thinking. To help us achieve this mission, we set annual targets in the
 form of Corporate Goals. For the year 2003-2004 we have set ourselves a
 total business turnover target of Rs. 15,000 Crore with deposits of Rs.
 10,000 Crore and Advances of Rs. 5,000 Crore and to improve the
 business per employee to Rs. 3.50 Crore. Efforts are on to increase the
 Branch network to 370. I am confident that we will be in a position to
 reach our targets given our strong technology platform and motivated
 employees.  Rural Banking, Retail Banking, Low cost Deposits and
 Efficiency in Operations are likely to be the key drivers of bottomline
 in the current financial year.  Your bank has received the report from
 National Institute of Bank Management, Pune regarding Organisational
 Restructuring and Business Profile Re-engineering of the bank. It is
 being studied for its critical appreciation and doing the needful.
 
 ACKNOWLEDGMENTS
 
 I am indeed very grateful to our shareholders for your immense support
 and faith over the years. With your support, I am confident of taking
 this bank to greater heights. Organisations cannot exist without
 customers. I take this opportunity to thank all our customers for their
 patronage and constant encouragement. I am also thankful to our dear
 employees who have shown guts amidst such tumultuous business
 environment. A lot of credit should go to the leadership of the
 workforce. I would like to place on record the appreciation of the
 services rendered by our auditors and legal advisors.
 
 Finally, I would like to thank the Board of Directors for their
 excellent corporate governance and the Reserve Bank of India for their
 guidance and valuable advice.
 
 
 Thank you one and all.