State Bank of Bikaner and Jaipur Directors Report, State B Bikaner Reports by Directors

Directors Report	Year End : Mar '12

The year 2011-12 has been a year of major turbulence in the global economy triggered by the Euro Crisis, emanating from Greece, Ireland, Portugal and Cyprus and spreading to Italy and Spain, impacting not only Europe but the whole of the world and culminating into an overall economic crisis. The year was replete with a mixed sense of optimism and concerns. The optimism was attributed to a somewhat encouraging ''two speed'' recovery in advanced and emerging economies, after a major slump. As per World Bank study, Indian economy is expected to grow faster than China. As inflation has emerged a major concern across the border too, China has seen the back of its fiscal stimulus. China and India have seen rapid growth and have helped push-up the global growth rate. FINANCIAL HIGHLIGHTS NET INTEREST INCOME The Bank''s total interest income increased from Rs4796.48 crore during 2010-11 to Rs6291.36 crore during 2011-12, recording a growth of 31.17%. Interest expenditure increased by 34.47% to Rs4069.96 crore, as against Rs 3026.76 crore in the previous year. The net interest income recorded a growth of 25.52% toRs2221.40 crore, as againstRs1769.72 crore in 2010-11. The net interest margin increased from 3.38% for the year ended March 2011 to 3.70% for the year ended March 2012. NON INTEREST INCOME The non-interest income of the Bank declined by 6.37% from Rs639.70 crore in 2010-11 to Rs598.97 crore during 2011-12. The decline during the year under review, as compared to the last year, is on account of decrease of Rs28.30 crore in Government Commission, Rs38.64 crore in profit on forex turnover, Rs12.59 crore in profit on sale of investments and Rs4.72 crore in exchange/brokerage. However, other commission has been increased by Rs44.90 crore. OPERATING EXPENSES The operating expenses recorded a growth of 4.85% from Rs1269.17 crore in 2010-11 to Rs1330.76 crore during 2011-12. Of this, employee costs decreased by 0.86% to Rs819.82 crore, while other operating expenditure increased by 15.54% to Rs510.94 crore. PROFIT During 2011-12, the operating profit increased to Rs1489.61 crore, recording a growth of 30.64% as against Rs1140.25 crore in the previous year. The net profit recorded a growth of 18.36% from Rs550.88 crore in 2010-11 to Rs652.03 crore in 2011-12. KEY FINANCIAL INDICATORS The Return on Assets of the Bank stood at 0.99% during 2011-12 as against 0.96% in the previous year. The return on equity decreased to 15.66% as against 19.32% in the previous year. The earnings per share also decreased from Rs101.53 in 2010-11 to Rs95.05 in 2011-12, while the book value per share improved from Rs570.16 in 2010-11 toRs594.98 in 2011-12. As at end-March 2012, the capital adequacy ratio of the Bank stood at 12.81 % and 13.76% as per Basel I and II norms respectively, as against 11.32% and 11.68% as per Basel I and II norms respectively, as at end-March 2011. This was well above the RBI benchmark of 9%. Due to rise in NPAs on account of continued stress faced by the industrial sector coupled with agriculture NPAs, the Bank''s Gross NPA ratio and Net NPA ratio increased from 2.0% and 0.83% respectively as at end-March 2011 to 3.30% and 1.92% respectively, as at end-March 2012. The average business per employee increased to Rs827 lakh during 2011-12, as against Rs751 lakh in the previous year. The net profit per employee improved to Rs5.42 lakh during 2011-12, compared toRs4.84 lakh during 2010-11. The average business per branch increased to Rs104.73 crore during 2011-12, as against Rs94.72 crore in the previous year. DIVIDEND During the year 2011-12, the Bank declared an Interim Dividend of 145% i.e. Rs14.50/- per equity share (face value of share Rs10 per share) as against 164% i.e. Rs16.40 per share. Record date for ascertainment of entitlement of shareholders for interim dividend was 27th March, 2012. Interim dividend may be treated as Final dividend. CREDIT MANAGEMENT The overall credit demand remained buoyant during the FY 2011-12, in line with the economic recovery. However, the Bank continued to focus on qualitative credit growth and faster credit delivery with emphasis on Agricultural sector, Small & Medium Enterprises (SMEs) and Large Corporates with further emphasis on financing to infrastructure sector. Total advances of the Bank grew by 19.74% during 2011-12, as against a growth of 17.40% during 2010-11. The Bank''s Commercial & Institutional (C&I) segment advances (other than food credit) registered a growth of Rs4,978 crore (23.44%), while non-C&I segment comprising personal, small business and agriculture advances increased by Rs3,205 crore (16.34%) during 2011-12. The impetus of fnancing remained mainly towards infrastructure development, such as power, road, ports and petroleum, besides other sectors such as steel, textiles and non-banking finance companies. During the year, the Bank sanctioned credit facilities aggregating Rs9,430 crore to 122 high value new customers under C&I segment, besides enhancing credit limits to the existing customers based on their requirements. Centralized Processing Cell (CPC), set up at Head Office for high value advances under Business Process Re-engineering initiative of the Bank, continued to appraise/ assess the advance proposals of high value promptly. In view of the prevailing competitive market scenario, closer interaction and regular meetings by the Top Management with high value customers were held at major centres i.e. Delhi, Mumbai, Kolkata, Hyderabad, Ahmedabad, Pune, Jaipur, Udaipur and Bhilwara. PERSONAL BANKING During 2011-12, personal segment deposits recorded a growth of Rs6,114 crore against the target of Rs9,000 crore, resulting in YOY growth of 20.69%. Deposit mobilization campaigns were launched for improving the pace of acquiring new Savings Bank customers. One such campaign, namely AKAASH, was launched on 1st Sept 2011 to acquire 500000 new SB accounts. During the year, the Bank opened a record number of 11.36 lakh new savings deposit accounts as against 9.83 lakh accounts in the previous year. Bank is celebrating the Year 2012 as Golden Jubilee Year. To make this year memorable and growth oriented, a new product named SBBJ- 7STAR SAVINGS BANK ACCOUNT has been launched. This product has features aimed to attract High Net Worth, young and Tech Savvy customers by bundling the 7 technology equipped products in the account. Interest rates were also synchronized during the year in line with the market scenario. Consequent upon creation of Personal Banking Vertical, to energize the personal banking streams of Home Loan and Car Loan, Bank rolled out Home Loan & Car Loan centers, headed by senior officers of the rank of Asstt General Manager and Chief Manager respectively, as product specific special marketing units at Head office during the year ended 31st March 2012. To leverage the reoriented set up in the Personal segment department, 22 business potential centres were identified and named as STAR centres, covering 248 branches of the Bank all over India. During the year, to attract prospective customers and to take maximum leverage of Technology, Bank started a unique initiative, first of its kind in Indian Banking space for online sanction of Car Loans in 10 minutes and online sanction of Home Loans in 20 minutes. These links are made available through our Bank''s website, ''sbbjbank.com''. To cater to the online loan applicants and to translate these applications into business, Bank has put in place one ''Online Business Centre'', which tracks the status of these applications. To keep the pace with the market trend, Bank has reoriented and modified existing schemes, such as Home loan, Car loan and Personal Loan and extended concessions in Interest rates, Processing fee and relaxed eligibility norms. Despite the gloomy economic scenario coupled with rise in lending rates and RBI''s tightening liquidity norms, the Bank booked 1.09 lakh new advances accounts and disbursed Rs2349.49 crore under various loan schemes under the personal banking segment. Car loans and housing loans recorded a growth of 25.51% and 8.50% respectively in 2011-12. During the year, growth of personal segment advances moderated to Rs692.36 crore (9.46%) as against Rs928.66 crore (14.53%) in the previous year. The Bank, at the behest of Ministry of HRD (MOHRD), Government of India, implemented an Interest Subsidy Scheme for Economically weaker section (EWS) of Education loan borrowers and 1% Interest Subvention scheme for Housing loan borrowers having loan amount of Rs10/15 lac and project cost Rs20/25 lac through RBI. Subsidy of Rs6.24 crore in 5815 accounts claimed and received in Education loan accounts of EWS category and subvention of Rs1.20 crore in 6151 accounts was claimed and received in home loan accounts. PRIORITY SECTOR LENDING Priority sector advances continued to remain the major thrust area of the Bank''s operations. As at end- March 2012, the Bank''s priority sector advances increased to a level of Rs17689.96 crore as against Rs15111.85 crore in the previous year. This constituted 42.38% of the Adjusted Net Bank Credit, which was above the RBI benchmark of 40%. Priority sector advances in Rajasthan stood higher at 62.76% of Rajasthan''s ANBC. AGRICULTURE Lending to agriculture remains one of the major thrust areas of the Bank. The flow of credit to agriculture by way of disbursement increased from Rs4,636 crore in 2010-11 to Rs6,825 crore in 2011-12, recording a growth of 47.22%. The outstanding level of agriculture advances increased by 23.46% from Rs7,316 crore as at the end March, 2011 to Rs9,032 crore as at end of March, 2012. Agriculture credit constituted 21.64% of the Adjusted Net Bank Credit, which was above the RBI benchmark of 18%. In the state of Rajasthan, the agricultural advances stood even higher at 36.75% of the Adjusted Net Bank Credit. The Bank issued 128271 Kisan Credit Cards (KCCs) with sanctioned amount of Rs1,880 crore during the financial year, taking the total number of KCCs to 461913 as at end-March 2012. The Bank has added 172 new farmers per rural and semi-urban branch during the year. In order to bring the farmers out of the clutches of the money lenders, the Bank introduced a Debt Swap Scheme in the year 2008. During 2011-12, assistance disbursed under the Debt Swap Scheme stood at Rs84.15 crore, benefiting 20912 farmers. The outstanding assistance under the scheme increased from Rs242.83 crore as at end-March 2011 to Rs291.42 crore as at end-March 2012. The number of beneficiaries under the Scheme also increased from 57153 in the previous year to 70377 farmers in March 2012, recording a growth of 23.13%. By providing financial assistance under this scheme, Bank has made the villagers of 42 villages completely free from the clutches of private money lenders. FINANCIAL INCLUSION Financial Inclusion aims to extend hassle free savings, loans and other services at an affordable cost to the under privileged and unbanked population living in remote villages. Our Bank has embarked upon its journey to implement the FI initiatives in the unbanked service area villages through ICT enabled banking correspondent outlets. 830 villages with population of 2000 and above have been allocated to our Bank for providing banking services by 31.03.2012. 796 business Correspondents have been engaged to cover 825 villages and in the remaining 5 villages brick and mortar branches have been opened. 195927 accounts have been enrolled and 63525 Smart Cards have been issued to the customers. Presently Savings Bank product is offered to the customers in FI villages and other products such as remittances, insurance etc. will be offered gradually in due course. FINANCIAL LITERACY Bank is actively involved in Govt. of India sponsored Swabhimaan campaign enlightening the rural populace about FI initiatives. Pamphlets, brochures detailing the advantages of Saving Bank accounts are distributed in FI villages to educate the rural public about the Bank''s FI initiatives. Our Bank has already set up Financial Literacy & Credit Counseling Centres (FLCCs) in all the nine Lead Districts to impart literacy among rural population. These FLCCs have conducted 163 literacy camps and counseled 19197 persons during the year 2011-12. Apart from this, the Bank has also set up 8 Rural Self Employment and Training Institutes (R-SETIs) to train the potential Small Entrepreneurs to start their own ventures / business / entrepreneur for self employment in rural areas. The 8 Rural Self Employment and Training Institutes (R-SETIs) have so far trained 19198 rural unemployed youth for various trades i.e. electric work, tailoring computer repair etc. Out of 19198 trained persons, 10029 persons belong to BPL families. AADHAAR PROJECT OF UIDAI UIDAI has been setup by the Government of India with a mandate to issue a unique identification number to all the residents in the country based on demographic and biometric data of the individual. UIDAI has entered into partnership with the Govt. and other agencies including Banks leveraging their existing infrastructure. These agencies are called the Registrars of UIDAI. Our Bank has also signed an MoU with UIDAI on 22nd January 2011 and has become a registrar in this project. During the first phase of Aadhaar enrollment up to 31.03.2012, 2.05 lac residents have been enrolled by our Bank as against target of 2.00 lac set by UIDAI. MICRO, SMALL AND MEDIUM ENTERpRISES (MSMES) The main growth driver of the Indian economy, MSME sector accounts for 45% of manufacturing sector output, 40% of India''s exports and provides employment to more than 7.32 crore persons in 3.12 crore enterprises. Accordingly, the Bank has also been according high priority to this area. With the help of renewed emphasis on fnancing this sector, the outstanding credit to MSME sector increased by 28.02% from Rs6,238 crore as at the end-March 2011 to Rs7985.81 crore as at the end- March 2012. As against the target of 3030 new MSME accounts (5 new accounts per urban/semi-urban branch), the Bank has assisted 25481 new MSME units during the year 2011- 12. In order to boost MSME advances, the Bank has launched 3 campaigns extending concessions in processing charges/up-front fee and relaxation in the interest rates during the year 2011-12. As at end-March 2012, the outstanding assistance to Micro and Small enterprises has increased by 32.80% to reach a level of Rs6477.96 crore, as against Rs4877.63 crore as at end-March 2011. The Bank has continued its thrust to provide collateral free loans to MSME units under the credit guarantee scheme of CGTMSE. During the year, Bank provided new collateral free loans under Credit Guarantee scheme of CGTMSE to MSE units amounting to Rs48.22 crore, taking the level of these loans to Rs211.09 crore to 12344 units as at end-March 2012. LOANS TO WOMEN BENEfICIARIES As at end-March 2012, 1.91 lakh women have benefited from financial assistance under different schemes of the Bank with a total outstanding of Rs2290.10 crore, equivalent to 5.49% of the Adjusted Net Bank Credit, which is above the 5% benchmark prescribed by RBI. ASSISTANCE TO MINORITY COMMUNITIES, WEAkER SECTIONS AND SChEDULED CASTES / SChEDULED TRIBES The programmes for minorities'' welfare envisage a fair deal to the minority communities in terms of opportunities for employment and socio-economic upliftment. As at end-March 2012, assistance to these communities stood at Rs920.59 crore spread over 64926 accounts. Financing to weaker sections stood at Rs6918.29 crore benefiting 7.64 lakh persons as at end-March 2012. The ratio of assistance to weaker sections as a percentage of Adjusted Net Bank Credit is 16.57% as at end-March 2012. This was above the benchmark of 10% prescribed by RBI. As at end-March 2012, the outstanding assistance towards Scheduled Castes (SCs)/ Scheduled Tribes (STs) stood at Rs1715.47 crore in 192489 accounts under priority sector. DIFFERENTIAL INTEREST RATE SCHEME (DIR) Advances under the Differential Interest Rate (DIR) scheme stood at Rs29.94 crore benefiting 31906 persons which is at 0.07% of total advances outstanding at the end of previous year i.e 31.03.2011, as against the prescribed benchmark of 1%. The Bank has disbursed 10131 new loans under DIR scheme with credit limits of Rs14.54 crore during the year. GOVERNMENT BUSINESS The Bank conducts Government Business on behalf of State/ Central Government departments through 483 authorized branches. Income Tax, Central Excise, Service Tax, Value added tax etc. are collected through physical challans as also through the electronic mode. The Bank has established a Centralized Pension Processing Centre (CPPC) which calculates as well as credits pension to the accounts of pensioners across all the branches. During the year, Bank has also established Online Treasury branch for online salary payment of Rajasthan State Government employees, Commercial Tax Department refunds, MNREGS wages payment etc. During 2011-12, Bank''s earning under the head ''Commission Income from Government Business'' amounts to Rs147.30 crore. INTERNATIONAL BANkING The Bank provides Foreign Exchange related services to exporters/ importers, other resident and non- resident customers through a network of 73 Authorized Category B and 182 category ''C branches. Bank''s forex dealing rooms at Mumbai and Kolkata and authorized category ''B'' branches are equipped with latest technology for real-time communication and connected through SWIFT with more than 725 offices of foreign banks throughout the world. The Bank maintains 20 NOSTRO accounts in all major currencies and non-account correspondent banking relationship with all major banking groups in the world. To facilitate NRI customers for inward remittances, there is online remittance facility and tie-ups with 7 Gulf based Exchange Houses. Western Union Money Transfer Payment services are also being provided at 231 of our branches. The Bank also undertakes proprietary Forex trading to increase profit by taking advantage of market movements. During 2011-12, the Bank''s forex merchant turnover increased by Rs2,853 crore to Rs19,652 crore, as against Rs16,799 crore in the previous year. The NRI Deposits increased by 18.30% to Rs950 crore at the year- end 2012, as against Rs803 crore of end-March 2011. The export credit stood at Rs1931.40 crore with a slight increase of 2.19% from the previous year. The Bank chairs the local chapter of Foreign Exchange Dealers'' Association of India (FEDAI). The Bank is an active member of FEDAI, International Chamber of Commerce (ICC) and Clearing Corporation of India Limited (CCIL). INDUSTRIAL REhABILITATION Rehabilitation/restructuring of potentially viable industrial units remains an important thrust area of the Bank. For this purpose, the Bank has its own Industrial Rehabilitation Policy containing detailed guidelines for undertaking rehabilitation/ revival package and the same is updated from time to time. Whenever units are found non-viable or not responding to the rehabilitation/ restructuring package, focus is shifted to recovery of Bank''s dues through legal recourse, action under SARFAESI, compromise settlement or assignment of debt. As at end-March 2012, the Bank had 25 large sick /weak units on its books with aggregate outstanding of Rs310.26 crores. There are 19 Corporate Debt Restructuring cases with aggregate exposure of Rs468.18 crores and 23 BIFR cases with exposure of Rs304.94 crores. The Bank has been acting as BIFR''s Operating Agency in 6 cases. During the year under review, 2 accounts with a total exposure of Rs45.33 crores have been restructured under CDR mechanism as warranted by global economic meltdown. Sustained efforts undertaken by the Bank in restructuring the accounts and post-sanction close monitoring and follow up resulted in maintaining most of the assets as standard. NPA MANAGEMENT The Bank continues with its multipronged strategy of controlling Non-Performing Assets (NPAs) through intensive monitoring of large value accounts, close follow-up with DRT/ BIFR, restructuring of viable accounts and effectively utilizing the remedies available under the SARFAESI Act. Besides, the Bank resorted to outright sale of unproductive assets to Assets Reconstruction Companies in the public and private sector on cash basis. Due emphasis has been given to follow up with the courts and fling of Execution Petitions. During the year, ''Recovery Camps'' were organized for NPA recovery, the results of which are quite encouraging. The progress is being monitored at the highest level. The progress in NPA/ AUCA recovery is discussed/reviewed by the Management Committee by conducting Video-conferencing with all the Zones and DGM headed branches. To contain the growth of NPAs, MIS data have been extensively used. The accounts in SMA/ Probable NPA category are discussed through video-conferencing with a view to regularise the position and not to allow any account to slip to NPA. The level of SMA/Probable NPA are also brought down by removing technical snags. A ''Loan Tracking Center'' has been established to monitor and track the irregular standard accounts from Head Office level. Pre-emptive measures, such as restructuring etc., are also taken as per recent RBI guidelines. By adopting the above measures and utilizing the provisions of SARFAESI Act effectively, Bank has received good number of acceptable compromise proposals which resulted in good recovery in NPA. There has been an addition of Rs1571.92 crore in NPAs during the current financial year due to Global recessionary trend. However, there has been recovery/ up-gradation to the tune of Rs480.77 crore. The Gross NPA ratio stood at 3.30% and the Net NPA ratio of the Bank stood at 1.92% as at the end of the financial year 2011-12. RISk MANAGEMENT STRUCTURE Of THE BANk The Bank has an independent Risk Management Framework in place. At the apex level, there is a Risk Management Committee of the Board (RMCB), which oversees the policies and strategies for Risk Management in the Bank. Credit Risk Management Committee (CRMC), Asset Liability Management Committee (ALCO), Market Risk Management Committee (MRMC) and Operational Risk Management Committee (ORMC) have been constituted to support RMCB. These sub-committees are submitting all critical issues/ development in their respective areas to RMCB. The Bank has Credit, Market and Operational Risks Management Policies for identification, measurement and management of major risks, the Bank is exposed to. These policies have been reviewed and updated from time to time, keeping in view the dynamic business environment. The Integrated Risk Management Department headed by a DGM, at the Head Office, acts as the nodal centre for coordination with other departments/operating units engaged in managing risk in their respective business areas. CAPITAL FRAMEWORK Under Pillar-I of the New Capital Adequacy Framework (NCAF) guidelines issued by Reserve Bank of India, the Bank is computing Capital to Risk Weighted Assets Ratio (CRAR) using Standardized Approach for Credit Risk, Standardized Duration Approach for Market Risk and Basic Indicator Approach for Operational Risk. Under Pillar-II of NCAF, the Bank has assessed capital requirement for 2011-12 for other risks in its Internal Capital Adequacy Assessment Process (ICAAP) document submitted to RBI. Basel-II Disclosures have been made by the Bank in the Annual Report as also on Bank''s website as part of the Pillar-III guidelines of NCAF. CREDIT RISk Control and monitoring of credit risk is dealt with as per the Board-approved Credit Risk Management, Credit Risk Mitigation & Collateral Management Policy and Loan policy of the Bank. Credit Risk management remains a major task for Bank and receives prime attention. The above policies cover methodologies for measuring, monitoring and control of credit risk. In order to control the magnitude of credit risk, prudential norms or benchmarks, financing ratios, single borrower or borrower-group exposure, industry-specific and sector-specific exposure, exposure to sensitive sectors, hurdle rate etc. have been set up. Credit appraisal systems and a clearly defined delegation of powers form an integral part of the Credit Risk Management process. MARKET RISK To monitor market risks and treasury operations, mid-offices (domestic & forex) are functioning at IRMD. To assess resilience of Investment portfolio, Scenario Analysis on market risk covering events such as decline in stock markets, rise in bond yields and foreign exchange rate movements are conducted regularly as per the Stress Testing Policy of the Bank. OPERATIONAL RISk One of the major tools for managing operational risk is to put in place a well established internal control system, which includes segregation of duties, clear management reporting lines and adequate operating procedures. Most of the operational risk events are associated with weak links in internal control systems or laxity in complying with the existing internal control procedures. The Bank has developed suitable systems and procedures for managing and control of operational risks. PREPARATION FOR ADVANCED APPROACHES OF BASEL-II AND PROPOSED BASEL-III CAPITAL REGULATIONS Bank has decided to move over to advanced approaches of Basel- II guidelines for Credit, Market and Operational Risks. Under advanced approaches, Internal Rating Based (IRB) Approach will be followed for Credit Risk, Internal Models Approach (IMA) for Market Risk and Advanced Measurement Approach (AMA) for Operational Risk. In order to improve the quality of capital and address liquidity risk issues, Reserve Bank of India has issued draft guidelines on implementation of Basel-III Capital Regulations in India to be implemented in phases with effect from 1st January 2013. Bank has made a preliminary assessment of the impact of the guidelines and shall draw plans for smooth transition to Basel-III regime once the final guidelines are issued. ASSET LIABILITY MANAGEMENT A comprehensive Asset Liability Management (ALM) System is in place for effective management of market risk covering Liquidity Risk, Interest Rate Risk and Foreign Exchange Risk. Liquidity and Interest Rate Risks are assessed and monitored through Structural Liquidity Report and Traditional Gap Analysis respectively. The structural liquidity report is being prepared and reviewed on a daily basis as per RBI guidelines. Both the risks on Foreign Assets & Liabilities are being monitored through Maturity & Positions (MAP) and Sensitivity to Interest Rate (SIR) statements. The monitoring of liquidity on a dynamic basis, over a time horizon spanning 1-90 days, is in place. Duration Gap Analysis is also used to manage interest rate risk for the entire balance sheet. The Asset Liability Management Policy coupled with Investment Policy of the Bank specifies various prudential limits for management of Liquidity and Interest Rate Risks. The Bank is regularly monitoring these limits. A comprehensive Contingency Funding Plan and a system of daily monitoring of inflows & outflows of deposits are in place for managing Liquidity on a day-to-day basis. Calculation of Value at Risk (VaR) on Foreign Exchange Forward Positions and Stress Testing on Liquidity, Interest rate and Foreign Exchange Open & Forwards Positions is also undertaken. As per RBI guidelines, the Bank has migrated to the Base Rate regime w.e.f. 01 July, 2010 for new loan accounts except those exempted by RBI. Loan accounts sanctioned prior to 01.07.2010 continue to be governed by the BPLR system until the next renewal/reset date or earlier, if the individual borrowers decide to switchover to Base Rate regime. INTERNAL CONTROL, INSpECTION AND AUDIT The Bank has in place a well- established independent audit system and structure to ensure adequate internal control for safe and sound operations. Internal Audit is carried out under Risk Focused Internal Audit (RFIA) as envisaged under Risk Based Supervision of RBI with focus on assessment of risk and internal control mechanism. The branches have been categorized into three groups as per risk perception and are subject to varying degrees of audit. During 2011-12, 684 branches and 54 Cells under Business Process Re-engineering (BPR) initiatives have been subjected to internal audit. No branch of the Bank remained overdue for audit as on 31.03.2012. 103 branches and 35 BPR initiatives covering 66.01% of advances including non-fund based business and 40.57% of deposits have been placed under continuous surveillance through concurrent audit. Besides, 13 Head Office Departments are also subjected to concurrent audit system. IS Audit cell is in place to conduct IS audit of major IT establishments including Core Banking project, Zonal Computer Centers, etc. in accordance with RBI directives and Bank''s IT Security Policy. In order to have better and uniform evaluation of risk factors, besides saving substantial working days, the Bank has introduced a Cluster Audit Approach in Delhi, Kota and Kolkata centres during 2011-12. Under this approach, simultaneous audit of BPR entities and its linked branches were conducted. As at end-March, 2012, 99.88% of total branches of the Bank was rated Well Controlled and Adequately Controlled. RECONCILIATION OF INTER-OFFICE TRANSACTIONS As per RBI guidelines, all entries need to be reconciled within a period of six months from the date of their origin. By end-March 2012, the Bank had reconciled all inter- office debit transactions originated upto 29.02.2012 i.e. well before the time limit prescribed. The Bank is committed to perform better than the target set by RBI and shall aim at reconciling all entries within two months of their origin. INFORMATION TECHNOLOGY CORE BANkING SOLUTION (CBS) All branches of the Bank are running successfully on Core Banking Solution. We were able to provide better customer satisfaction by tendering many Value Added Services like: multi functional ATMs, Internet Banking, fexi-deposit scheme, multi-city cheque facility, instant credit of local and outstation cheques, introduction of RTGS/NEFT and SBGRPT for faster settlement of funds etc. MOBILE BANkING Bank has introduced Mobile Banking facility for its customers having a Savings/Current Account. The product is named State Bank Freedom. Presently, there is an upper ceiling of Rs50,000 for fund transfer and for purchase of goods/services per day within overall calendar month limit of Rs2, 50,000. INTERBANK MOBILE PAYMENT SERVICES (IMPS) Interbank Mobile Payment Service (IMPS) has been launched enabling Bank''s customers to use mobile instruments as a channel for remitting funds or to make various utility payments at shops and commercial establishments, making payment just with the MMID (Mobile Money Identifier) of the beneficiary in secure manner on 24 X 7 basis. The upper ceiling for remittance or payment of bills is same as in Mobile Banking facility. AUTOMATED TELLER MACHINES (ATMS) The Bank has installed 80 new networked ATMs during the year to take the tally of ATMs to 1082. All the ATMs are connected to the network of State Bank Group ATMs, thereby enabling more than 42.71 lac cardholders of the Bank to have access to over 26000 ATMs of the State Bank Group all over the country. Our customers can also access ATMs of other Banks free of charge upto fve transactions per month, including balance enquiry as transaction, subject to a maximum of Rs10,000 per transaction. INTERNET BANKING All branches of the Bank are enabled to offer Internet Banking facility to the retail as well as the corporate customers. Looking to the rapid increase in the usage of Internet banking worldwide, the Bank has introduced several new features during the year. Apart from transferring funds from their account to another account in our Bank, our customers can now transfer amount from their account to any other account in any bank (through RTGS/NEFT), make TDS enquiry for Term Deposits from the comfort of their homes or offices, open/close of e-TDR/e-STDR/e-Recurring Deposit (RD) account, and view the details of Income-Tax deposited (26-AS). Transaction rights with single ID up to Rs5.00 lac per day per user for small Corporate customers, named ''CINB Saral'', has been provided. Retail Internet Banking facility for visually challenged persons has also been made available. For Corporate customers, a new facility ''I-Collect'', for on line collection of funds has been provided. Online payment of direct and indirect taxes have been enabled in our Internet banking. Bank''s customers can now pay Income Tax, Service Tax, Excise Duty, Customs Duty of Central Government, Value Added Tax (VAT) and Central Sales Tax (CST) of Rajasthan State Government and Maharashtra State Government as also Professional Tax of Maharashtra State Government online. Facility of online application for IPOs through Bank''s internet banking portal www.sbbjonline.com with ASBA (Application Supported with Blocked Amount) facility, where investor customer continue to earn interest during the application process, is available to users. Facility of online booking of Railway/ Air Tickets has been widely accepted. Electronic payment of railway freight (E-Freight) is gaining popularity; now four Corporate customers are using the facility. Bank has integrated two more Aggregator to its online system to increase the range of merchants and utility billers to Bank''s Internet Banking users. Customers can now make payment to 1200 plus merchants/billers. Steps have been taken by the Bank to further increase the merchants/billers list. Bank launches a campaign to promote retail Internet Banking by initiating actions to increase awareness about Internet Banking among staff as well as customers. It has conducted seminars at Zonal/Regional offices and branches. Interaction with staff of Corporates and Institutions were also held. Meetings with Corporate customers were organized to popularize Corporate Internet Banking and facility of Zero Balance Internet Current Account for online tax payment. ELECTRONIC PAYMENT SYSTEMS: USAGE Of RTGS, NEFT & SBGRPT Real Time Gross Settlement (RTGS) is an integrated payment and settlement system and National Electronic Fund Transfer (NEFT) is a scheme for inter- bank funds transfer operated by the RBI. Bank has taken several measures to increase usage of RTGS and NEFT system. All branches of the Bank are RTGS and NEFT enabled. Customers can make their inter-bank remittances in a faster and secure manner at a very nominal cost, to any RTGS/ NEFT enabled branch of other banks in India. State Bank Group Payment (SBGRPT) functionality for electronic funds transfer within State Bank Group is also available for customers. SMS UNHAPPY A new service Project SMS Unhappy has been launched during the year 2011 -12 with the objective of providing a simple and economical way to the customers to convey their grievances and reduce complaint resolution time drastically, to below 48 hours, thereby enhancing the customer satisfaction level and creating a loyal customer pool. GREEN CHANNEL COUNTER Bank has implemented Green Channel Counter facility at 250 branches including all district Head Quarter branches in Rajasthan and all branches situated in Delhi NCR, Mumbai, Bangalore and Ahmedabad during the year 2011 - 12. It is a paperless, eco- friendly and easy facility which would enable customers to pre-process selected transactions in a branch. This is being carried out by using a Transaction Processing Device (TPD) placed at a Single Window Operator''s (SWO) terminal and linked with the desktop of the SWO and integrated with the CBS application. This TPD acts as a transaction pre-processing device, which is used by customers to enter data for a particular transaction authenticated by the four digit PIN provided for the ATM-cum-Debit Card. The facility provides safety and comfort to the customers by avoiding filling up of withdrawal forms / cheques / pay in slips and quicker service. INFORMATION TECHNOLOGY (IT) SECURITY As the level of usage of IT enabled services has increased, the threats and risks to our IT assets have also increased manifold. To control these threats and risks, the Bank has a comprehensive IT and Information Systems (IS) Security Policy that addresses all these concerns including maintenance of customers'' confidentiality, security and integrity of data. State Bank''s data centre, where Bank''s CBS data base resides (both at the Primary and Disaster Recovery Site), has acquired the accreditation for the international standard for Information Security Management Systems ISO/IEC: 27001: 2005. All the Banking applications have built-in security features like access control, data encryption and transmission through secured channels as per requirement of the application. The threat of virus and worms is minimized by having a centralized anti-virus solution. Adequate Firewalls and Intrusion Detection Systems are in place so as to prevent unauthorized access to the network. The security of the network is being managed by Network Management Consultants of the Bank. The Disaster Recovery Plan (DRP) and Business Continuity Plan (BCP) for all branches are in place. KNOW YOUR CUSTOMER/ ANTI MONEY LAUNDERING/ COMBATING Of FINANCING Of TERRORISM MEASURES In order to identify and examine suspicious transactions, the Bank has installed the AMLOCK software, besides setting up an Anti Money Laundering Cell at Bank''s Head Office. The customers'' accounts have been divided into different risk categories. Alerts are generated once any transaction exceeds a predefined threshold limit. These alerts help in identification of suspicious transactions, which are further reported to Financial Intelligence Unit, Government of India, in appropriate cases. CUSTOMER SERVICE Customer Service continues to remain a prime focus of attention for the Bank. Leveraging core banking technology, providing value added services and re- designing key business processes, in line with the requirements of customers, is an ongoing process in the Bank aimed at improvement in Customer Service on a continuous basis. The meetings of the Customer Service Committee of the Board and Standing Committee on Customer Service were convened at regular intervals to review the position of customer service rendered. Similar Committees are also functioning at Branches, Zones and Head Office, which help in continuous improvement in service standards. The Bank has put in place a multi pronged grievances redressal mechanism to suit varied customer requirements. An aggrieved customer can either make a written complaint at branch / regional / zonal / head office of the Bank or make an online submission in the form provided on the Bank''s website / through e-mail against acknowledgement. During the year, the Bank has launched an initiative code-named ''Mission Five'', encompassing 5 voluntary initiatives to be undertaken by the branches for maintaining cleanliness of premises, punctuality of staff members, serving customers with a smile, thanking its customers by name and promptly resolving their complaints. The Bank is a member of the Banking Codes and Standards Board of India (BCSBI) and has voluntarily adopted a ''Code of Bank''s Commitment to Customers,'' which sets a framework for setting a minimum standard of banking services to be provided by the banks. DISCLOSURE Of COMPLAINTS/ UNIMPLEMENTED AWARD Of BANKING OMBUDSMEN In terms of RBI circular DBOD.No.Leg BC.60/09.07.005/2006-07 dated 22.02.2007, the information in respect of customer complaints and awards passed by the Banking Ombudsmen is given in the Table below :- A. Customer Complaints ( Position upto'' March 2012) (a) No. of Complaints pending at the be- 32 ginning of the year (b) No. of Complaints received during 6227 the year() (c) No. of Complaints redressed during 6198 the year() (d) No. of Complaints pending at the 61 end of the year () Excluding 1446 Complaints found non maintainable. B. Awards passed by the Banking Ombudsman (BO)(Position upto March 2012) (a) No. of unimplemented Awards at the Nil beginning of the year (b) No. of Awards passed by the Banking 05 Ombudsman during the year (c) No. of Awards implemented during 04 the year (d) No. of unimplemented Awards at the 01st end of the year Appeal allowed and award passed by BO set aside by the Appellate Authority. ATM COMPLAINTS To monitor the ATM failed-transactions related customer complaints received at the branches, ATM complaints Reconciliation Cell has been established at Head Office. Reserve Bank of India has prescribed that all ATM complaints to be resolved within 7 working days. For faster resolution /redressal of complaints, an online ATM Complaint Management System (ATMCMS) has been developed, through which we are able to adhere to RBI Guidelines. During the year 2011- 12, the Bank has received 45408 ATM failed-transactions related complaints, out of which 44905 complaints were resolved. No home-bank complaint (where customer and ATM both belong to our bank) is pending for more than 7 working days, since 01-04-2010. THE RIGHT TO INFORMATION (RTI) The Right to Information (RTI) Department, constituted at the Bank''s Head Office for better coordination and effective implementation of the Right to Information Act, 2005, has been instrumental in ensuring that information sought for, under the various RTI applications received by them, is dispensed with efficiently and effectively in a time bound manner as per the provisions of the Act and that the appeals too, if received, are redressed timely. During the current year ended 31.03.2012, the RTI Department received 1466 applications under the RTI Act, 2005, out of which, 1434 applications were disposed. Only 32 applications, all less than a month old were awaiting disposal as on 31.03.2012. Besides, the Bank had also received 64 appeals upto 31.03.2012 under the RTI Act, 2005, out of which 62 appeals have been disposed off by the Appellate Authority by 31.03.2012. BUSINESS PROCESS RE- ENGINEERING During FY 2011-12, Business Process Re-engineering (BPR) Initiatives further stabilized in Bank and their coverage extended to more branches. Bank operates 12 city-centric loan CPCs, viz. Retail Assets Central Processing Centre (RACPC), Small & Medium Enterprises City Credit Centre (SMECCC) and Retail Assets and Small & Medium Enterprises City Credit Cell (RASMECCC) in end-state at 11 centres with 228 branches linked to them, as against 223 branches linked as on 31.03.2011. During the year, RASMECCC & SARC were combined at Ajmer, Bhilwara, Bikaner, Jodhpur, Kolkata, Kota, Mumbai, Sriganganagar and Udaipur (where number of linked branches is < 20) for faster and cost effective processing. Similarly, coverage of Rural CPC went up to 255 branches as on 31.03.2012, as against 235 branches at the end of previous year. Number of Relationship Managers (Medium Enterprises) increased to 17 at 13 major business centres compared to 14 RMMEs at 11 centres at the end of previous year. Non loan CPCs / initiatives, viz. Liability Central Processing Centre (LCPC), Trade Finance Central Processing Centre (TFCPC), Currency Administration Cell (CAC), Central Pension Processing Cell (CPPC), Clearing CPC (CCPC), Multi Product Sales Team (MPST), Relationship Manager-Personal Banking (RMPB) have helped further improvement in customer service. Bank joined SBI''s Contact Centre at Vadodara w.e.f. 03.02.2012, which is an effective alternate delivery channel designed to boost customer information and satisfaction. Customers'' queries relating to Bank''s products/services are responded through Toll Free Help Line Number 1800 180 6005 on 24x7 basis. During FY 11-12, the following developments took place to make CPCs / initiatives more effective and to optimize gains and obviate staff & space costs: (a) Upon creation of business verticals at HO, the ownership & responsibility for stimulating and tracking the performance of CPCs and initiatives was assigned to respective vertical heads. (b) Personal Loans and Car Loans were delinked from loan CPCs / MPST and their sourcing, sanction, disbursement and maintenance vested with the respective linked branches w.e.f. 14.11.2011. This shifting was necessitated due to branches enjoying area-specific car dealers linkages (for car loans) and for ease of interface with customers having salary accounts (for personal loans). (c) MPSTs at 10 major centres, viz. Ajmer, Bhilwara, Bikaner, Delhi, Jaipur, Jodhpur, Kota, Mumbai, Sriganganagar and Udaipur became leaner and re-oriented towards sourcing one or combination of Home Loans, MSME loans and Corporate Salary Package, in most productive manner. Coverage of various CPCs / initiatives as on 31.03.2012 vis-�-vis 31.03.2011 was as under : CPC / Initiative Branches Covered 31.03.2011 31.03.2012 LCPC 377 486 CPPC 754 792 CAC 129 136 Clg. CPC 197 206 TFCPC 99 116 RM-PB 16 16 Branch Re-design 145 159 (v) Shifting of back office activities to loan CPCs, implementation of revised roles for branch functionaries and better ambience in branches at core BPR centres not only improved the Bank''s image but also helped the linked branches to focus more on customer service. BPR initiatives in the Bank are set to improve the quality of service and market share in business by leveraging technological changes. Efforts are being made by the Bank to back various CPCs with advanced work-flow software aimed at further improving quality, flexibility and productivity. CURRENCY MANAGEMENT RBI has designated 200 branches as Currency Chest branches in the State and 16 branches in other parts of our Country. All the Currency Chest branches are undertaking the following activities in an efficient manner: (i) Circulation of New Currency Notes among public. (ii) Distribution of coins to the public. (iii) Exchange of torn /damaged/ soiled / mutilated notes. (iv) Providing linkage facilities to branches of other banks which are linked to them. (v) 16 branches are providing facilities of note exchange and coins distribution on 3rd Sunday of every month. CROSS SELLING In order to augment non-interest income, the Bank has continued marketing of life and non-life insurance, mutual funds and credit card products. For the purpose, the Bank has in place tie up arrangements with SBI Life Insurance Co. Ltd., National Insurance Co. Ltd., SBI Mutual Fund, Birla Sunlife Mutual Funds and SBI Cards & Payments Services Pvt. Ltd. During 2011-12, the Bank launched campaigns for marketing of these products which helped in getting a total income of Rs17.32 crores from cross selling activities. APPLICATION SUPPORTED BY BLOCkED AMOUNT (ASBA) In order to impart greater efficiency in public issuance, a supplementary process of applying in Public Issues as well as to right issues had been introduced by the SEBI viz. Applications Supported by Blocked Amount (ASBA). The Bank, being registered as Bankers to an issue, had been authorized by SEBI as Self Certified Syndicate Bank, eligible to accept applications under the ASBA process. During the year 2011-12, the Bank has designated 2 more branches under the ASBA process. Thus, the Bank has so far designated 17 branches, which can accept these applications. Besides, customers of all branches of the Bank can apply in the public/right issues under the ASBA process, through Internet Banking. During the year, the Bank has also started work of Syndicate ASBA and 4 branches has been designated under this process. During the period under review, 22207 applications aggregating Rs230.42 crore were processed by 17 designated branches of the Bank. The Bank earned a commission of Rs0.31 crore in the process. COMMUNITY SERVICES BANKING As a responsible Corporate Citizen, the Bank continues to undertake community based social activities such as tree plantation, free medical camps, blood donation camps, establishing water-huts, sports competition etc. During 2011-12, the Bank provided Ambulances to Kota Cancer Society, Kota and Ashadham Ashram, Udaipur each for the treatment of Cancer Patients and other regular patients who are under-priviledged members of the society. One mortuary van was also given to Shree Amrapur Jankalyan Charitable Trust, Jaipur. Every branch of the Bank adopted one girl child each from poor families with an objective of providing financial assistance for pursuing studies in Govt./Municipal schools. The Bank provided financial assistance to two schools, which are imparting education to the children of poor/down-trodden families of the Society for purchase of computers, furniture, peripherals etc. To help visually challenged children, one braille printer and a laptop were provided to Rajasthan Netraheen Kalyan Sangh. Blankets / quilts /sweaters were distributed to the needy people in another initative. The Bank also honoured the meritorious students of the state with cash reward. GOVERNMENT SPONSORED SCHEMES Laying utmost emphasis on Government sponsored schemes has been amongst the major endeavors of the Bank in pursuit of financial inclusion. The Bank continued to play a pioneering role in fnancing entrepreneurs under various Government sponsored schemes during the year 2011-12. The position under various Government sponsored schemes as at end-March 2012 is as under: - Scheme Number of Amount Beneficiaries sanctioned during financial year (Rs. crore) Swarn Jayanti 2103 9.09 Shahri Rojgar Yojana (SJSRY) Prime Ministers 348 12.86 Employment Generation Programme (PMEGP) Swarn Jayanti Gram Swarojgar 4386 47.59 Yojna (SGSY) Artisan Credit HOOH , no 1281 4.08 Card Scheme LEAD BANK SCHEME The Bank has Lead Bank responsibility in nine Districts in the State of Rajasthan viz. Bikaner, Barmer, Hanumangarh, Jaisalmer, Jalore, Pali, Sirohi, Rajsamand and Udaipur. The Bank has been implementing and monitoring the Annual Credit Plan and other developmental and poverty eradication schemes launched by Govt. of India, Govt. of Rajasthan and NABARD. Target allotted for Annual Credit Plan to our Bank for the year 2011-12 was Rs2,014 crore, against which achievement of our Bank, has been Rs2,574 crore, recording 128% of target. MICRO CREDIT At the end of March 2012, the Bank has credit linked a total of 41349 Self Help Groups with disbursement of Rs265.89 crore, out of which 34444 accounts are of women beneficiaries with disbursement of Rs178.37 crore. NABARD has ranked the Bank as number one in Rajasthan State for its performance under Micro Credit continuously from the year 2004- 05 to 2008-09. In the year 2009-10, the Bank has secured first position in Rajasthan for Micro Credit as per Status of Micro Finance in India 2009-10 published by NABARD. Recently, the Ministry of Finance, Govt. of India launched a project for fnancing Women Self Help Groups with the support of Anchor, a NGO as SHPI in 24 backward Districts of 24 States in the country. In Rajasthan, Barmer district, which is Bank''s Lead District has been selected for this purpose. RURAL SELF EMPLOYMENT TRAINING INSTITUTES (RSETI) In order to impart job-oriented skills to rural unemployed youth, the Bank has set-up seven RSETIs at Bikaner, Hanumangarh, Barmer, Jaisalmer, Jalore, Sirohi and Nathdwara (Distt. Rajsamand). The Bank has also set up a Skill & Entrepreneurship Development Institute (SEDI) at Jaitaran, Distt. Pali in association with Ambuja Cement Foundation. By March 2012, 19198 candidates have been imparted training for a range of jobs, which are locally in demand, in these institutions. With the help of this training, 3609 candidates have been engaged in various jobs and 8429 candidates have started their own ventures. FINANCIAL LITERACY AND CREDIT COUNSELLING CENTRES (FLCC) In order to educate farmers and other people in rural / urban areas with regard to various financial products, different Bank schemes and services available from the formal financial sector, the Bank has set up 9 Financial Literacy and Credit Counseling Centres (FLCC) in all the nine Lead Districts of Bank in Rajasthan. These FLCCs are providing awareness service free of charge. Upto 31/03/2012, 19197 persons have been counseled by these centres. REGIONAL RURAL BANk MGB Gramin Bank, the Regional Rural Bank (RRB) sponsored by the Bank, has a network of 222 branches spread over six districts viz. Pali, Jalore, Sirohi, Sriganganagar, Hanumangarh and Bikaner of Rajasthan. The Bank continues to provide managerial support and financial assistance by way of refinance etc. to MGB Gramin Bank. All branches of MGB Gramin Bank are working on CBS platform. As at end-March 2012, MGB Gramin Bank had deposits of Rs2253.12crore, advances of Rs1852.62 crore and recorded a profit before tax of Rs42.50 crore during 2011-12. BRANCH EXPANSION During 2011-12, the Bank opened 48 new fully computerized branches. As at end-March 2012, the total number of branches stood at 950, comprising 946 business branches, 2 asset recovery branches and 2 treasury branches. Of these, there are 335 rural branches, 271 semi-urban branches, 167 urban branches and 177 metro branches. The number of branches in Rajasthan increased to 791 which are the largest among all banks. Out of these, 599 branches are located in rural and semi-urban areas, which play an important role in rural development and poverty alleviation in the State. HUMAN RESOURCES DEVELOPMENT The Bank''s staff strength as on 31.03.2012 was 12866 employees, with the following break up: - AS ON 31.03.2012 OUT OF WHICH STAFF CADRE SC ST GENERAL TOTAL WOMEN MINORITY OFFICERS 914 451 3319 4684 340 77 CLERKS 865 493 3669 5027 825 62 SUB-STAFF 412 262 1693 2367 133 27 SAFAI KARMCHARI 641 21 126 788 16 2 TOTAL 2832 1227 8807 12866 1314 168 Out of the Bank''s total staff strength as on 31.03.2012, 2832 (22.01%) belong to SC and 1227 (9.54%) to ST category. During 2011-12 while 195 members of clerical staff have been promoted as officers, 12 officers, 1269 clerks and 378 guards cum peons have been recruited. The percentage of SC/ST employees to the total employees at 31.55% is much above the benchmark stipulated by the Govt. of India. The reservation policy of the Govt. is being implemented scrupulously in the Bank. The Bank believes that its human resources are the most important assets and their development is necessary for growth of the Bank. In the dynamic business environment, it is necessary that adequate training and sensitization is provided to the staff members on an on-going basis to meet the challenges in the wake of globalization of economies introduction of new concepts in management areas as also of advanced technologies in day to day activities. With this aim in mind, Bank has imparted training to 6347 employees which includes 3490 officers, 2326 clerks and 531 sub-staff during the year under review. A total of 6443 employees of all categories, including 96 employees of sponsored RRBs, were provided training opportunities on various subjects related to banking and technology at three STCs of the Bank during the year. The Bank also provided pre recruitment training to 983 SC/ST candidates appearing in the written test for recruitment of clerical cadre and officer cadre during the year. In addition to this 31 seminars / workshops were conducted on various contemporary issues to update the skills of employees. We have also conducted special training programmes to all newly promoted officers up-to cadre MMGS-III and all Branch Managers during the current fnancial year. Apart from in-house training, the Bank provides facility of training to its officers in specialized areas at training institutes of repute like State Bank Academy, Gurgaon, State Bank Staff College, Hyderabad, SBIICM, Hyderabad, SBIRD, Hyderabad, NIBM, Pune, CAB, Pune etc. During the period under review 1085 officers have been trained at these outside agencies in areas of Core Banking Solution, Forex, Fraud Detection, Market Risk Management, Electronic Payment System, Liquidity Risk Management, Export & Import, International Banking, Marketing, Credit Risk management, Stressed Assets Management, Legal option of Recovery, NPA Management, Risk Management, KYC, IT, IS Audit, Trade Finance, HR, Foreign Currency Funding, SME, Rural and Agriculture Advances, Industry Specific Programme, Balance Sheet Analysis, ATM & Internet Banking Programmes, Project Appraisal of high value proposals, Credit Appraisal Programme, Advanced Programme on International Trade Finance, Mobile Banking, SME Gyanshala, Marketing and Presentation Skills etc. In addition to the above, Bank deputed 3 officers for specialized programmes aboard for Advance Management Programme (AMP) Strategic thinking for business leadership in collaboration with Standard Graduate School of Business, California, USA, Duke Corporate Education Enterprise Leadership programme for DMD & CGMs in Singapore conducted by Prof. Joe Divanna, faculty from the United Kingdom and FIMMDA-PDAI, 13th Annual Conference on emerging global regulations, Risk Management & Trading Best Practices at Kuala Lumpur. ORGANISATIONAL PLANNING With a view to facilitating improved supervision, organisational effecti- veness and customer services, 2 branches were reallocated during 2011 -12 from Region - IV (Chandigarh) to Region - I in the Delhi Zone. Fraud Risk Management functions were put under supervision of Asstt General Manager (Scale-V) to strengthen the system. A position of Asstt General Manager (Scale-V) was also created for better co-ordination with SBI for Contact Centre. In view of several changes that have taken place in IT department, it was restructured for synergy in ABs and 2 posts of Asstt General Manager (special cadre) were created. As BPR initiatives are established and working smoothly, the position of Asstt General Manager (BPR) and Asstt General Manager SARC, Mumbai were de- categorized. RASMECCCs and SARCs have been merged. Keeping in view the importance of work handled by RAMECCCs and SARCs, the positions of the heads of RAMECCC & SARC at Bhilwara and Sriganganagar were upgraded as Asstt General Managers. With a view to improving the control mechanism, over-all efficiency as also the rate of business growth re-structuring of Head Office was made whereas separate business verticals were created. Ownership of each business vertical have been vested with a General Manager. For better performance Demat services & E-trading cell was shifted from Tilak Marg, Jaipur branch to Head Office and placed under control of the DGM (P&SB). Delegation of powers for relaxation in prescribed rates/ceiling or deviations in hospitalization scheme for staff was revised. STAFF WELfARE The Bank believes in keeping the morale and motivation of the employees high, considers employees as its most important assets and accords high priority to their welfare. The Bank undertook staff welfare activities like granting scholarship to the meritorious wards of the employees, providing free medical consultancy services at various hospitals etc. Insurance cover for employees has been raised from Rs7.00 lac to Rs8.00 lac (Rs14.00 lac to Rs16.00 lac for accidental death) w.e.f. 01.03.2012 under group insurance scheme of SBI Life. Waiver of housing loan of the deceased employees has been extended to cover overdraft limit (Personal loan), PF loan and conveyance loan upto Rs3.00 lac. Special award of Rs10,000 for education (one time payment) to one ward of the deceased employee has been approved. Reimbursement of funeral expenditure is being made to the extent of Rs10,000 from staff welfare fund. Annual Health Check-up scheme extended to the spouse of the employees (age of employee between 41 to 49 years). Besides, relief to the employees, who are on leave without pay on sickness grounds, has been enhanced from Rs7,500 upto 18 months to Rs15,000 upto 24 months during the entire service period. The Bank has set up holiday homes at Jaisalmer, Chandigarh, Mussoorie, Jaipur, Manali, Mumbai, Goa, Delhi, Haridwar, Katra, Bengaluru and Udaipur. Various cultural and sports activities were also organized during the year. INDUSTRIAL RELATIONS The Bank has for long been maintaining harmonious and cordial relations with both supervising as well as workmen employees. The Employees'' Union and Officers'' Association have extended their wholehearted cooperation for the all-round growth of the Bank. A well established and consultative mechanism is in place in the Bank for resolution of various issued emerging from time to time. VIGILANCE ADMINISTRATION The object of vigilance activity in Bank is to enhance the level of managerial efficiency and effectiveness in the organization. As risk-taking forms an integral part of banking business, every loss caused to the organization, either in pecuniary or non-pecuniary terms, needs to be distinctly divided into a business loss which has arisen as a consequence of a bonafide commercial decision and an extraordinary loss which has occurred due to any malafide, motivated or reckless performance of duties. While the former has to be accepted as a normal part of business and ignored from the vigilance point of view, the latter has to be viewed seriously and dealt with under the extant disciplinary procedures. In order to minimize the impact of latter, the Vigilance Department constantly practices preventive vigilance, apart from extant surveillance system in the Bank. The punitive vigilance measures are applied while dealing with the complaints and frauds having vigilance angle. The preventive vigilance comprises the dissemination of knowledge and precautions, to be exercised by the operating staff while discharging their duties. During the year, Bank has conducted seven preventive vigilance training programmes at various training centers, where 187 participants were benefited. Meetings of preventive vigilance committees in big branches are arranged, where staff is sensitized in regard to the preventive vigilance measures. The Vigilance department of Bank has disposed off 57 complaints during the year. 52 investigations have been initiated after 01.04.2011 and total 36 cases of investigations have been disposed off during the period. 48 preventive vigilance inspections were conducted during the period. The constant supervision of the cases resulted into disposal off 122 vigilance cases, during the period. The Bank celebrated ''Vigilance Awareness Week'' in the month of November 2011, as per CVC''s guidelines. In order to bring about vigilance awareness amongst the Bank staff, a quarterly in-house magazine titled as Vigilance Bulletin is also being published. USE Of HINDI The Official Language Implementation Committee at Head Office held 8-meetings during the year to discuss the progressive use of Hindi in the Bank. 881 branches / offices of the Bank have been notified under rule 10 (4) of the Official Language Rules 1976. Out of these, 702 branches / offices are specified under rule 8(4), which constitute 79.68% of total notified branches / offices of the Bank. Section 3(3) of Official Language Act 1963 is being meticulously followed in the Bank. Facility of Hindi version has also been made available in the Core Banking Software. In compliance to the order of the Hon''ble President of India ,Unicode System has been implemented in the Bank and all the ATM''s are operated in bilingual / trilingual manner. ''Hindi Fortnight'' was observed during September 1 to 14, 2011 during which, various competitions were held and prizes awarded to the winners. To impart the knowledge of Official Language Policy and job oriented Hindi, 27 workshops /training programmes were organized. During the year, 871 branches / offices were inspected for implementation of the Official Language. To increase progressive use of Hindi, Head Office Raj Bhasha Trophy competition was organized during the year. Representatives of the Government of India visited Bank''s Head Office to review the position and appreciated the efforts made in the implementation of the Official Language. RBI Officials also visited Bank''s branches/offices at Jaipur and Chandigarh to have a sample survey for Indira Gandhi Rajbhasha Shield and Reserve Bank Rajbhasha Shield Competition 2010- 11. In compliance to the directions given by the 3rd sub-Committee of the Sansadiya Rajbhasha Samiti, 17 departments of Head Office and 8 departments of each zone are working completely in Hindi. BOND ISSUE To improve Bank''s Capital Adequacy Ratio, Tier II Capital amounting to Rs500 crore was raised by issue of 9.02% Unsecured, Redeemable, Non Convertible, Subordinated Lower Tier II Bonds (Sixth Series) in the nature of Promissory Notes through private placement. The Bonds were allotted to Life Insurance Corporation of India (LIC) on 20th March, 2012. Maturity date of Bonds is 20.03.2022. ELECTRONIC CLEARING SERVICE Electronic Clearing Service (ECS) facility for payment of dividend is being extended in 24 centres to shareholders who have opted for the same. These centres are Agra, Ahmedabad, Bangalore, Chandigarh, Chennai, Coimbatore, Ghaziabad, Hyderabad, Indore, Jaipur, Jodhpur, Kanpur, Kolkata, Lucknow, Ludhiana, Mumbai, Nagpur, New Delhi, Patna, Pune, Surat, Udaipur, Vadodara and Varanasi. AUDIT State Bank of India, with the concurrence of the Reserve Bank of India, approved the appointment of 6 frms of Chartered Accountants viz. S. Daga & Co. of Hyderabad, B. Khosla & Co. of Jaipur, S.L. Chhajed & Co. of Bhopal, SCJ Associates of Agra, L.U. Krishnan & Co. of Chennai, Agarwal Anil & Co. of Delhi as the Bank''s Statutory Central Auditors for the year 2011-12. The scope of audit covered 860 branches/central processing cells as against 844 branches/ central processing cells covered in 2010-11. RESPONSIBILITY STATEMENT The Board of Directors hereby states: 1. That in the preparation of the annual accounts, the applicable accounting standards have been followed alongwith proper explanation relating to material departures; 2. That they have 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 of the Bank as on the 31st March 2012, and of the profit or loss of the Bank for the year ended on that date; 3. That they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Banking Regulation Act, 1949, and State Bank of India (Subsidiary Banks) Act, 1959 for safeguarding the assets of the Bank and preventing and detecting frauds and other irregularities; and 4. That they have prepared the annual accounts on a going concern basis. CORPORATE GOVERNANCE The details on Corporate Governance are annexed. ACKNOWLEDGMENT The Board of Directors is grateful to the valued customers, esteemed shareholders and the public at large for their patronage and confidence reposed in the Bank and places on record its deep appreciation. The Board of Directors thanks the Government of India, State Bank of India, Reserve Bank of India and other regulatory agencies for their valuable support and guidance throughout the year. The Board of Directors places on record its deep appreciation of the commitment, sense of involvement and dedication exhibited by each staff member and constructive role played by the Employees'' Union and Officers Association in the overall development, growth and prosperity of the Bank. For and on behalf of the Board of Directors Mumbai Shiva Kumar 20th April, 2012 Managing Director

Source : Dion Global Solutions Limited

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