Report of the Board of Directors to the State Bank of India, the
 Reserve Bank of India and the Central Government in terms of Section 43
 (1) of State Bank of India (Subsidiary Banks) Act, 1959 Period covered
 by the Report: 1st April 2010 to 31st March 2011
 
 2. The Banks Operations and Performance
 
 2.1 Business Turnover
 
 The gross business turnover of the Bank crossed the major milestone of
 Rs.One lac crore in December 2010. The total business of the Bank stood
 at Rs.104,202 crore on 31st March 2011, registering a growth of 16.63%
 from the level of Rs.89,345 crore as on 31st March 2010.
 
 2.2 Working Results and Operating Profit
 
 Operating profit (after staff provisions) of the Bank for 2010-11 went
 up by 21% to Rs.1,175.97 crore from Rs.  972.27 crore for the previous
 year. Net Profit for the year stood at Rs.727.73 crore as compared to
 Rs.684.27 crore in 2009-10. The Earnings per share (of Rs.10 face
 value) stood at Rs. 145.55 compared to Rs.136.85 at the end of the
 previous year.
 
 The Net Interest Income increased by 21% from Rs.1,400 crore in FY
 09-10 to Rs. 1696 crore in FY 10-11. Net Interest Margin stood at
 2.87%.
 
 2.3 Dividend
 
 The Bank declared a higher dividend of Rs. 18 per share (180%) for the
 year to the shareholders, entailing a total payout of Rs. 90 crore. Of
 this, an interim Dividend of Rs.  8 per share (80%) was paid out in
 October 2010. The Pay-out ratio works out to 12.41% of the
 distributable profit (excluding dividend tax).
 
 2.4 Capital Augmentation & Capital Adequacy
 
 The Banks capital funds improved from Rs.4397 crore as at the end of
 March 2010 to Rs.4881 crore as at the end of March 2011. The capital
 adequacy Ratio under Basel II stood at 12.54% in March 11 as compared
 to 13.74% in March 10 against a minimum of 9% stipulated by RBI. The
 Tier-I CRAR on this date is 9% as against 9.24% as at the end of the
 previous year. The Banks Board of Directors had approved a Rights
 Issue of shares to the shareholders for an amount of Rs. 500 crore. The
 approvals from the RBI and State Bank of India for the issue have been
 received.  The capital augmentation will serve to improve the Capital
 adequacy ratio of the Bank in 2011-12.
 
 2.5 Deposits
 
 Aggregate Deposits of the Bank registered a growth of 15.49%, reaching
 the level of Rs.57,599 crore as on 31st March 2011 as against Rs.
 49,874 crore as on 31st March 2010. Personal Deposits, which contribute
 the bulk of the resources, grew by Rs.3,618 crore to reach Rs. 36,096
 crore. NRI Deposits recorded improved performance
 
 compared to the previous year, grew by Rs. 725 crore and stood at
 Rs.11,562 crore. NRI Deposits constituted 20.07% of the Aggregate
 Deposits of the Bank as on 31st March 2011. Total Deposits of the Bank
 [including Inter Bank Deposits] moved up to Rs. 58,158 crore as on 31st
 March 2011 from Rs. 50,883 crore as on 31st March 2010.
 
 2.6 Advances
 
 Advances of the Bank registered a growth of 19.72% during the year and
 reached a level of Rs. 46,044 crore as on 31st March 2011 as against
 Rs. 38,461 crore as on 31st March 2010. The main contributions came
 from the C&I segment [growth of Rs.4,637 crore] and Agriculture segment
 [growth of Rs.2,280 crore]. The Banks Retail lending stood at
 Rs.23,055 crore and constituted 50% of Total Advances as at the end of
 March 2011. The Credit Deposit Ratio of the Bank stood at 79.17% as on
 31st March 2011 as against 75.59% as on 31st March 2010.
 
 2.7 Market Share
 
 Banks All India market share in Deposits has improved from 1.09% on
 31st March 2010 to 1.10% on 26th March 2011. The market share in
 Advances has been static at 1.16% in the same period. However, the
 market share would be 1.17% if the Rs.1,000 crore of Inter Bank
 Participation Certificate (IBPC) issued by the Bank during the year is
 included. The Bank continued to maintain its position as the premier
 bank in Kerala with a market share in business of 22.13% as at
 September 2010 [the latest date up to which data has been released by
 RBI] with 14% of the total branch network in the state.
 
 2.8 Priority Sector lendings
 
 The Bank continued to give special emphasis on lending to the Priority
 Sector in conformity with the national policies, expectations and
 fulfilment of social objectives. Banks gross Advances to the Priority
 Sector increased from Rs. 14,260 crore as at the end of March 2010 to
 Rs.17,353 crore as at the end of March 2011, and constituted 44.07% of
 the Adjusted Net Bank Credit against the benchmark of 40%.
 
 2.9 Agricultural and Rural Finance & Self Help Groups
 
 Agriculture segment was the standout performer during the year under
 review. Bank has disbursed an amount of Rs. 5,716 crore under
 Agriculture segment as at the end of March 2011 against the Special
 Agricultural Credit Plan target of Rs.4,000 crore. The level of lending
 to agriculture sector stood at Rs. 5,580 crore as on 31st March 2011.
 
 Agri segment showed a positive growth of Rs. 2,280 crore as at the end
 of financial year 2010-11 compared to a growth of Rs.449 crore during
 the same period last year.  The share of Agriculture Advances to
 Adjusted Net Bank Credit [ANBC] improved sharply to 14.17% from 10.33%
 at the end of the previous year.
 
 During the current fiscal 16,677 Kisan Credit Cards (Working capital
 facility to farmers) and 4,519 Kisan Gold Cards (Investment credit to
 farmers) were issued with an outlay of funds of Rs. 146 crore and Rs.
 182 crore respectively. During the current year, the level of Kissan
 Credit Card loans increased by 29% and 79% in number and amount
 respectively against the RBI stipulation of 20%.
 
 The growth in Agriculture lending was driven by an intensive
 agriculture lending campaign called SBT- Haritotsavam- 2010 during
 the period June to September 2010. Against a lending target of Rs.1,000
 crore, the amount disbursed during the period was Rs.1,424.25 crore,
 benefiting 2,04,082 farmers.
 
 Bank continued to be active in assisting Self Help Groups and financing
 them through MFIs and NGOs. 84,787 groups were assisted so far with a
 financial outlay of Rs.656 crore.  Bank has entered into an MOU with
 Kudumbasree (State mission for poverty alleviation) for giving loans to
 SHGs at low rate of interest. The notable feature of the programme is
 community farming by women neighbourhood groups with bank assistance.
 600 women who are active in Self Help Groups were honoured with SBT
 Kudumbasree Award.
 
 Farmers meetings were conducted at various centres to give wide
 publicity for schemes available to farmers. A special brochure on
 agricultural schemes in local languages was printed and supplied to the
 branches for the benefit of farmers. The Bank stands in the first
 position in terms of number of Farmers Clubs among Commercial banks in
 Kerala. The farmers Clubs sponsored by Pattanakkad and Bharananganam
 branches were awarded merit certificates by NABARD for their farmer
 friendly performance.
 
 2.10 Lending to Micro, Small and Medium Enterprises (MSMEs)
 
 The Bank continued to extend support to Micro, Small and Medium
 Enterprises, in conformity with national objectives. The total lending
 to MSME sector recorded a growth of 14.49% over previous year to touch
 Rs. 8,487 crore. The lending to Micro & Small Enterprises [MSEs] stood
 at Rs. 5,061 crore which is 18.69% higher over the previous year level.
 The Small Scale Industries and Small
 
 Business segment recorded a growth of Rs.214 crore during the year,
 reaching a level of Rs.3906 crore as on 31st March 2011.
 
 The growth in this sector was fuelled by an intensive MSME lending
 campaign conducted from 01st October 2010 to 31st January 2011. Against
 a target of Rs. 500 crore under MSME segment [including Rs.150 crore
 under micro segment, Rs. 150 crore under small segment and Rs. 200
 crore under medium segment], the total lending during the campaign
 period was Rs.628 crore. 1% reduction in interest and waiver of
 processing charges were offered during the campaign period.
 
 Road Transport Operators (RTO) segment has recorded steady progress
 after liberalization of collateral security norms and interest rate
 concession. The lending to the sector grew by 43.98% to reach Rs. 514
 crore as at March 31, 2011.Tie up arrangements with various
 manufacturers / dealers of commercial vehicles served to increase the
 presence in the market.
 
 The Bank is a Member Lending Institution under the Credit Guarantee
 Fund Trust for Micro and Small Enterprises (CGTMSE) scheme for
 providing collateral free loans.  Awareness programmes / workshops
 /seminars were conducted in all Regional Offices of the Bank / Training
 sessions and other important centres for operating staff about the
 scheme. Meetings of entrepreneurs were also conducted to educate them
 about the scheme. 10,350 loans amounting to Rs. 316 crore have been
 extended under the scheme so far.
 
 The Banks Technical Consultancy Cell carried out three project
 appraisals, four rehabilitation studies and two general studies during
 the year. The cell also involved in the three Entrepreneurship
 Development Programmes (EDPs) conducted by the Bank during the year.
 
 2.11 Commercial & Institutional Finance
 
 The Bank performed well under the segment by tapping the potential in
 market and C&I advance of the Bank reached Rs. 23,835 Crore as on 31st
 March 2011. This segment contributes more than 50 % of Banks total
 advances, which comprises financing Trade and Services, Industry,
 Infrastructure, financing Corporate customers and other institutions.
 The 4 Industrial Finance Branches at New Delhi, Bangalore, Chennai and
 Ernakulam were re- designated as Commercial Branches, to sharpen their
 focus and broad base their portfolio. The 5 Commercial Network branches
 (including the Corporate Finance Branch at Mumbai) contribute 40% of
 the Credit growth. These
 
 branches share of the Credit of the Bank has moved up from 22% to 25%
 during the year. Their share of the Non- fund based income of the Bank
 improved from 19% to 23% in the same period. Account Planning
 Initiative was rolled out at these branches during the year to improve
 the share of income of the Bank from major accounts.
 
 2.12 Personal Finance
 
 The Bank continued to be active in extending finance to Personal
 Segment, mainly by way of Housing Loans, Car Loans and Educational
 Loans. The Personal segment Advances went up to Rs. 13,345 crore as at
 March 2011 from Rs. 12,696 crore as at the end of the previous year,
 recording a growth of 5.11%. As many as 20,646 Housing Loans
 aggregating Rs. 2,363 crore were extended during the period under
 review, taking the outstanding Housing Loan level to Rs. 6,714 crore as
 at 31 Mar 2011, an improvement of 20.34% over March 2010 level of Rs.
 6144 crore. Similarly 17,215 Car Loans aggregating Rs.  590 crore were
 extended during the same period, taking the outstanding Car Loan level
 to Rs. 1,420 crore as at 31 Mar 2011, which is higher by Rs. 96 crore
 over March 2010 level of Rs. 1,324 crore.
 
 As in the previous years, the Bank continued to support the growing
 generation to prosecute higher studies by extending Educational Loans
 under Gyan Jyothi Schemes.  The Bank has granted the maximum number of
 education loans in the State of Kerala. During the year under report,
 Bank sanctioned 19,782 Educational loans amounting to Rs. 565 crore.
 The total amount outstanding under this head stood at Rs. 1,713 crore.
 
 The Bank also extended the subsidy assistance provided by the
 Government for Housing Loans and Educational Loans. These included the
 1% interest Subvention for Home Loan borrowers up to a limit of Rs.10
 lac where the estimate/cost of construction should not exceed Rs.20
 lac, (applicable to the loans disbursed from 01st October 2009 to 31st
 March 2011), Interest Subsidy for Housing Urban Poor (ISHUP) Scheme to
 provide home loans with interest subsidy to Economically Weaker
 Sections (EWS) / Low Income Groups (LIG) for acquisition/construction
 of house and Central Scheme to provide Interest Subsidy on Education
 Loan borrowers. Maximum permissible loan amount under ISHUP is Rs.1 lac
 for EWS and Rs.1.60 lac for LIG category of borrowers (maximum amount
 eligible for subsidy is Rs.1 lac).
 
 The subsidy scheme for education loans is available to students
 belonging to Economically Weaker Sections whose
 
 parental annual income does not exceed Rs.4.5 lac. Interest Subsidy
 will be provided by the Government during the moratorium period for the
 disbursements made on or after 01st April 2009.
 
 2.13 Policies and Guidelines
 
 A comprehensive Policy for lending to Micro Finance Institutions
 (MFIs)/Non Governmental Organisations (NGOs) has been formulated for
 regulating and standardising the Advances to the sector. The policy
 gives detailed guidelines to enable the Bank to increase the outreach
 by financing large number of SHGs/JLGs in a cost effective manner and
 supplement the efforts of the branches in financing SHGs/JLGs and
 enabling financial inclusion. The policy will also act as a precaution
 to pursue caution while funding micro finance institution (MFIs/NGOs)
 by adhering to the norms for funding.
 
 Interest rate and charges on Bill Discounting under Inland Letter of
 Credit Scheme have been revised in line with the market condition to
 make the products the best in the market and to maintain the
 profitability.
 
 The Policy on valuation of properties and empanelment of valuers has
 been revised comprehensively in order to improve smooth and quick
 delivery of credit and also to ensure speedy recovery of NPAs.
 
 2.14 Introduction of Base Rate
 
 The Bank has introduced Base Rate System effective on July 1, 2010, in
 conformity with RBI guidelines. Base rate was set at 7.75% on date,
 which has since been increased three times in tune with the market
 conditions. The Base rate of the Bank stands at 9% as at 31st March
 2011.
 
 2.15 Treasury Operations
 
 The Gross investments of the Bank stood at Rs.17,956 crore as on 31st
 March 2011 as against Rs.15,881 crore as on 31st March 2010. The
 revenue from investment operations (interest and dividend) for the year
 was Rs.1,147 crore as against Rs.957 crore for the previous year. The
 average yield on investments was at 6.82% during the year as compared
 to 6.40% during the year ended 31st March 2010. The Bank earned a
 profit of Rs.98 crore from treasury operations during the period under
 report.
 
 2.16 International Banking
 
 The Banks total forex turnover during the year for merchant
 transactions was Rs.16,746 crore compared to Rs.15,050 crore during the
 previous year. Inter Bank turnover was higher at Rs.4,34,520 crore as
 against Rs.3,66,210 crore during the previous year. The total profit
 from forex
 
 operations during the year was Rs. 40.29 crore as against Rs.39.99
 crore as on 31st March 2010. The Export Finance extended by the Bank
 stood at Rs. 1,101 crore, which was 15.13% higher over the level at the
 end of the previous year.
 
 Moneytrans E Remit a state of the art, technologically advanced Speed
 Remittance Product developed in-house ensures speedy and safe
 remittance from the Gulf countries.  Moneytrans E Remit has been
 extended to 27 of the 28 Exchange houses with which the bank has
 drawing arrangements. Remittances through Moneytrans E Remit (including
 credits through NEFT) numbered 32.73 lac aggregating to Rs. 14,207.69
 crore during 2010-11 as against 24.51 lac and Rs. 9,892 crore
 respectively during the previous year. The Bank continues to be the
 leading Bank in Kerala both in terms of number and volume of
 remittances.
 
 Xpress Money, instant cash transfer arrangement with UAE Exchange and
 Financial Services Limited operating through select branches has been
 extended to branches in Thiruvananthapuram, Kottayam, Ernakulam and
 Kozhikode Zone.
 
 Other products like Xpress Remit, an online remittance facility from US
 and UK and Viswa Yatra Foreign Travellers Card providing an alternative
 to carrying foreign currency while travelling abroad continue to be
 much favoured by the public in general
 
 2.17 Cross Selling
 
 The Bank has been constantly endeavouring to meet the requirements of
 its customers by making available Life, Non life insurance products as
 well as other non-banking investment products like Mutual Funds to its
 customers.
 
 Banks Cross Selling products include SBI Life Insurance Company‘s life
 Insurance products, United India Insurance Companys Non Life (General
 Insurance) products, SBIMFs Mutual fund products and SBI Cards Credit
 cards which are being made available to the customers through the
 branch network. With auto debit facility in place SIP mode of
 investment in Mutual Funds is becoming popular amongst the Banks
 customers.  The Bank also has tie up arrangements with UTI Mutual Fund,
 Sundaram Mutual Fund, Franklin Templeton and Tata Mutual fund houses.
 
 As against Rs. 12.19 crore income earned during the year 2009-10 income
 from the Cross Selling business during the current year has improved to
 Rs. 20.57 crores, which represents a YOY growth of 68.74%.
 
 SBI Life Insurance with a share of over 83% continues to be the major
 contributor to Cross Selling Income followed by General Insurance and
 Mutual Fund at 10% and 7% respectively.
 
 Our Bank has a tie up with United India Insurance Company Limited for
 marketing its Non life products through the branch network.
 Unisuraksha, a personal accidental Death and Total Permanent disability
 cover, Unihealth, a Health plan (Mediclaim) for resident account
 holders of the Bank and NRI care, a health cum accident plan for NRI
 customers of the Bank are some of the major non life products that are
 available for the customers of the Bank
 
 Unisuraksha, the Personal Accidental Death and Total Permanent
 disability cover has gained wide acceptance.  During the year under
 consideration more than 45 families, most of being poor and needy have
 benefited from these claims. Banks Health plan Unihealth a
 co-branded product of the Bank and UIICO too is gaining acceptance
 fast.
 
 Among the Mutual fund products Systematic Investment Plans, [SIPS]
 Fixed Maturity Plans [FMPs] debt and equity funds of SBIMF launched
 from time to time are also marketed through the branches.
 
 SBI credit cards are also being sold to the Banks customers through
 its branch network. Platinum Credit cards for high value customers,
 Secure Cards, SBI Gift Cards and VIshwa Yatra Cards for overseas
 travellers are some of SBI Cards products being marketed by us. Auto
 debit facility for SBI Credit Cards is expected to be in place soon and
 this will give a boost to Credit Cards in the coming fiscal.
 
 Bank has as on date 1,003 Certified Insurance facilitators and 751 AMFI
 qualified employees, which form the Insurance and Mutual fund sales
 force of the Bank. Plans have been drawn out to double these numbers in
 2011-12.
 
 2.18 Asset Quality
 
 The Bank continued to give special focus to improving the quality of
 Assets and containing NPAs. The percentage of Gross NPAs to Gross
 Advances stood at 1.80% on 31st March 2011 with the Gross NPA level at
 Rs. 835 crore.  The percentage of Net NPA to Net Advances stood at
 0.98% as on 31st March 2011 compared to 0.91%, a year ago.
 
 Banks approach to Asset Management includes revival of viable sick
 industrial units as an important strategy through appropriate
 rehabilitation packages. Rehabilitation/ Restructuring packages are
 under implementation in respect of 37 units with a total exposure (Fund
 Based +Non Fund Based) of Rs.297.50 crore. Out of these 37 units,
 
 10 units are under Corporate Debt Restructuring [CDR] scheme with
 exposure of Rs.175.87 crore, 27 units under BIFR scheme with exposure
 of Rs.121.63 crore. During the year, 12 accounts were referred to CDR
 scheme for restructuring. Out of these 12 accounts, restructuring
 packages for four accounts were approved, three accounts were withdrawn
 from the CDR mechanism and the others are under process.
 
 2.19 Government Business
 
 The Bank conducts State Government Business in 108 branches in Kerala
 and 2 branches in Tamil Nadu. Approval is awaited from Reserve Bank of
 India for linking 10 more Non-Banking Treasuries to the branches in
 Kerala. Further, 196 branches (136 branches in Kerala and 60 outside
 branches) are authorized for Central Board of Direct Taxes (CBDT)
 collection and 148 branches in Kerala are authorized for Central Board
 of Excise and Customs (CBEC) collection. 314 Post Offices are having
 drawing arrangements with the Bank and 43 Railway Stations have opened
 accounts with the branches.
 
 The e-payment facility launched by the Bank for payment of commercial
 taxes for Kerala is well received by the Business Community. As many as
 6.82 lac transactions amounting to Rs. 6,245 crore were collected under
 this Scheme. Proposal for introduction of e-payment of Motor Vehicle
 Taxes in Kerala State is in the final stages of implementation and will
 be launched from the beginning of the next financial year 2011-12.
 E-payment facility for Karnataka Commercial Taxes through the Bank is
 also expected to be introduced shortly.
 
 The Bank became the exclusive Banker to 14 FRIENDS Centres promoted by
 IT Mission, Kerala, with 4 more FRIENDS Centres linked to the Bank
 during 2010-11.  Around 2000 Akshaya Centres under IT Mission are also
 linked with the Bank. The number of Currency Chests maintained by the
 Bank stood at 127 after 5 unviable Currency Chests were surrendered to
 Reserve Bank of India during the year. The Bank successfully
 operationalised the Electronic Data Interchange (EDI) Project at the
 new Thiruvananthapuram International Airport Cargo Complex.  The Bank
 is one among the 16 banks selected for introduction of e-payment of
 Customs on all-India basis, scheduled for FY 2011-12. The Bank has
 maintained a market share of 70% of Kerala State Government
 transactions during the financial year. Angamally Branch has been
 authorised by CBEC for collection of Customs Duty at Cochin
 International Airport, which was functioning as a sub-agency of State
 Bank of India since 1999.
 
 2.20 Electronic Payment Systems
 
 There was greater focus on migrating more remittance transactions to
 electronic modes. The Payment & Settlement Group functioning at
 Belapur, Mumbai attends to electronic remittances like RTGS/NEFT and
 GRPT transactions and the funds settlements between the bank and other
 Banks/ RBI. There has been increased awareness among the customers to
 use electronic mode of remittances. The total number of outward
 electronic messages (RTGS/NEFT/GRPT) emanating from the branches has
 increased from 12.18 lac during FY 2009- 10 to 22.80 lac in FY 2010-11,
 registering an increase of 87% during the year.
 
 3. Marketing Initiatives and Development of New Products
 
 3.1 Bank has been nominated as authorised Bank for import of Gold by
 Reserve Bank of India. This is a pre-requisite for carrying out retail
 sale of Gold coin through the branches in tie up with State Bank of
 India. The sale of Gold Coins through the branches will be
 operationalised in the first quarter of financial year 2011-12.
 
 3.2 As in the earlier years, the Bank continued its proven strategy of
 customer acquisition and retention and broadening the customer base by
 conducting massive marketing campaigns. These campaigns contributed to
 increase the business level significantly. ‘Aishwaryotsav 2010, the
 retail loan campaign and ‘SBT Mahotsav 2010, the Deposit Mobilization
 campaign conducted during the financial year 2010-11 were very
 successful and helped the Bank to reach out to the mass of the
 population in the country, especially in the State of Kerala.
 
 3.3 Aishwaryotsav 2010, the retail loan campaign for the intensive
 marketing of Home Loans and Car Loans covered the whole festival season
 of Kerala State and other parts of the country. The campaign commenced
 just before ONAM, the National Festival of Kerala, run through
 Dusserah, Deepavali, Ramzan, Bakrid and Christmas and continued till
 the New Year Eve (from 01st August to 31st December 2010). Against the
 lending target of Rs.800 Crore the campaign recorded sanctions
 aggregating Rs.  1,706 Crore from 11,113 Car Loans and 11,170 Housing
 Loans.
 
 3.4 The intensive Deposit Mobilization Campaign, SBT Mahotsav 2010, was
 conducted during October to December 2010. Against a targeted growth of
 Rs. 2,000 crore in Aggregate Deposits, the campaign saw opening of new
 accounts aggregating Rs. 2,950 crore including
 
 1,13,288 new SB Accounts. Free Unisuraksha Accident Insurance coverage
 was offered to new SB Account customers who opened accounts with an
 initial Deposit of Rs.5,000/-.
 
 3.5 A special Current Account campaign for the 3 special Current
 Accounts namely SBT Biz, SBT Easy Biz and SBT Easy Biz Plusaccounts
 were conducted from 10th February 2011 to 31st March 2011, to enhance
 the share of Current Accounts in Deposit mix, through selected
 branches.
 
 3.6 Project Finance Unit was set up in the Bank to develop project
 appraisal skills in-house, and also to avoid good proposals go past the
 bank for want of Techno Economic Viability (TEV) study. Bank undertakes
 Technical and Financial appraisal of small and medium sized projects,
 which have not been vetted by agencies of national/ international
 repute. During this year TEV study conducted on 37 projects, having
 total project cost of Rs. 2,093 crore.
 
 3.7 Other Marketing initiatives included:
 
 - Assisting Customers for obtaining of PAN Card by tie-up arrangement
 with UTI Technology Services Ltd.  [UTITSL], the official agent for
 issuing Permanent Account Number. The Branches collect applications for
 PAN Card from customers and forward them to the Central Processing Unit
 of the Company at Chennai.  Approximately 40,000 customers have
 utilised this facility so far.
 
 - Arrangements were made with telecom companies - BSNL, Airtel,
 Vodafone and Idea to provide Ring Back Tone using the Banks ‘Signature
 Tune in the Landlines and Mobile connections of the Bank for creating
 a new identity and image for the institution.
 
 - As a step to reach out to the younger generation of the Society,
 Appreciation Letters were sent to 7,000 top ranking Students in the
 Common entrance test conducted by Government of Kerala with an
 invitation to open savings bank account with the Bank. Most of the
 students responded positively and the initiative served to broaden the
 customer base.
 
 - National/International days of importance were celebrated for
 reaching out to different sections of the Society as a tool of customer
 acquisition and for better visibility. During such observations,
 selected products, which are appropriate for the occasion, were
 highlighted through advertisements in Newspapers.
 
 3.8 Many New Products and services were designed and offered to ensure
 total satisfaction to the customer by anticipating customer needs and
 after collecting market
 
 intelligence on the Banks products as well as analyzing the offerings
 by the competitors. The new customer friendly products were added to
 the impressive basket of the Banks products and schemes during the
 year include:
 
 - Scheme for financing against the pledge of warehouse receipts issued
 by private warehouses to individual farmers, traders, commission
 agents, partnership firms, proprietorship concerns who have stored
 their agricultural commodities in the private warehouses was introduced
 during the year.
 
 - Dairy Entrepreneurship Development Scheme (DEDS), in association with
 NABARD, a venture capital scheme with capital subsidy (25%). The scheme
 covers all districts in the state. This will help in mitigating the
 shortage of milk in Kerala.
 
 - Finance for Solar Home Lighting System, launched under DRI scheme.
 Solar products provide reliable and cost effective electricity. There
 is a wide range of solar products in the market viz. lamps, portable
 lanterns, road lighting luminaries, single-phase energy meters etc.
 which are clean, reliable, noise free and pollution free, and free from
 electric tariff volatility.
 
 - SBT Gold Loan Premium, a new gold loan product aimed at premium
 customers. The minimum and maximum amount of loan under the product is
 Rs.25,000/- and Rs.10 lac respectively for a period of 6 months.
 
 - Banking Arrangement with the Kerala Non-Resident Keralites Welfare
 Board [KNRWB] for the members of the Board, who are NRIs or Ex-NRIs
 to remit their monthly contribution to the scheme through the Banks
 Branches.
 
 - SBT School Special, a simplified loan product introduced for
 educational institutions which fall under service segment as per the
 classification under MSMED Act, for providing financial support to
 Education sector.
 
 3.9 Several modifications/improvements have been effected in the
 existing schemes to meet customer expectations and to facilitate better
 customer service as shown hereunder:-
 
 - The eligible finance for Home Decor Scheme has been enhanced to 25%
 of Housing loan amount or Rs. 5 lac whichever is less (from 15% of
 Housing loan or Rs.1.5 lac whichever is less).
 
 - The Diamond Jubilee Open Term Loan has been simplified to enable SME
 manufacturing and service segment units with ratings of SB 7 and above
 eligible
 
 for loan. Maximum loan for manufacturing segment is enhanced to Rs. 250
 lac and for Service sector Rs. 100
 
 lac.
 
 - ‘SME Easy Loan scheme, has been liberalised to enable Professional &
 Self Employed Individuals and Smal Business Enterprises also eligible
 for loan under the scheme. The maximum loan amount is enhanced to
 Rs.300 lac for Small Enterprises and Rs.500 lac for Medium Enterprises.
 The eligibility for Micro Enterprises is however, restricted to Rs.25
 lakh.
 
 - Car Loan to MSME units: MSME Current Account holders of the Bank or
 their family members are also eligible for car loan under the modified
 scheme. Margin has been stipulated uniformly at 20% of the invoice
 price.
 
 - The maximum loan limit under Prasanthi Elite Loan for pensioners
 enhanced to 18 months net pension to pensioners with a maximum of Rs.5
 lac. The limit for family pensioners is 15 months of net family pension
 with ceiling of Rs.1.5 lac and the repayment period fixed at 60 months
 or completion of 75 years of age whichever comes earlier.
 
 - The Rent Plus scheme variant introduced at reduced interest rate
 for limits sanctioned upto 31st March 2011, to select group of
 customers who rented out their building to Banks and MNCs, in order to
 canvass more quality loans.
 
 4. Customer service
 
 4.1 Customer service in the Bank is accorded top priority and every
 endeavour is made to improve the quality of service to the customers
 and redress their grievances. All efforts are made to improve the
 customer satisfaction by offering suitable products enhanced by quality
 value-added services.
 
 4.2 A well-defined and full-fledged customer grievances redressal
 mechanism is functioning in the Bank. Reports on the number of
 complaints received / disposed / pending in the Bank as a whole are
 submitted to the Banks Board and the Apex Level Customer Service
 Committee at Head Office. The Standing Committee on Customer Service
 constituted pursuant to Tarapore Committee recommendations also reviews
 the quality of customer service extended in the Bank at regular
 intervals.
 
 4.3 An official of the rank of Assistant General Manager is placed as
 head of the Customer Service Department to give greater focus on
 complaints received from Customers and speedy redressal of the
 complaints. The Department
 
 acts as a coordinator between the branch and the complainant and
 ensures quick disposal of complaints.
 
 4.4 As a proactive measure, apart from acknowledging each complaint on
 the day on which it is received, senior officials at Customer Service
 Department endeavour to call the complainant personally wherever
 contact numbers are available. Many of the complaints get resolved on
 the same day itself. The average time taken for disposal of complaints
 at Head Office/Zonal Office level has been reduced significantly. The
 feedback being received from customers has been encouraging.
 
 An SMS based facility (SMS SBT CARE) has been put in place whereby
 customers can send their grievances from anywhere by SMS to 98471 98471
 from their mobile.
 
 4.5 The updated version of Citizens Charter is made available in
 booklet form and also in the Banks website which provides customers
 and the general public with the key information regarding the common
 areas of customer banker relationship. Similarly the details of service
 charges levied by the Bank are also published in the Banks website for
 the information of the public.
 
 4.6 Progress of implementation of Citizens Charters and the Fair
 Practices Code are also being monitored at Head Office and Zonal Office
 level customer Service Committee meetings. Inspecting officials are
 also examining the quality of customer service rendered at the
 branches.
 
 4.7 Bank has also established a Call Centre with Toll free No.
 1800425-5566 enabling the customers/ general public to clear their
 doubts/ complaints expeditiously. Adequate publicity of the aforesaid
 facilities available to public is in place both through print and
 visual media.
 
 4.8 Customer Day is observed at all the offices of the Bank on the
 15th of every month to enable the customers to voice their grievances
 or offer suggestions for the betterment of customer service.
 
 4.9 Banking Codes & Standards Board of India (BCSBI) - The Bank is a
 member of the Banking Codes & Standards Board of India, which is a
 registered society, sponsored by Reserve Bank of India. The Code of
 Banks Commitment to Customers is available on the Banks website. This
 is a voluntary Code, which sets minimum standards of banking practices.
 The Deputy General Manager (Compliance) is the designated Principal
 Code Compliance Officer at Head Office. The relative Annual Statement
 of Compliance has also been submitted by the Bank to the BCSBI.
 
 5. NRI Services
 
 The Bank, the pioneer and market leader in NRI business in Kerala, has
 been continuously improving its products and services to NRIs. All
 technology based products and services have been made available to NRIs
 also, so that they can bank with their most preferred bank from any
 corner of the globe.
 
 The Representative Office in Dubai, opened in August 2008, is acting as
 an interface between branches and NRIs to meet their banking needs.
 Banks extended arms are available in UAE and Sultanate of Oman, the
 two vibrant and developing countries in the Gulf Cooperation Council
 (GCC), through its managed Exchange companies, viz., City Exchange LLC
 in UAE and Global Money Exchange in Sultanate of Oman. Bank has made
 available Relationship Managers at the door steps of NRIs in UAE,
 Qatar, Oman, and Bahrain.
 
 A team headed by Chief General Manager participated in the Biennial
 Convention of Federation of Keralite Associations in North America
 (FOKANA) at Albeny, USA during July 2010, which was well accepted by
 American Malayalees and paved way for establishing several new
 contacts.
 
 The recently developed product, NRI PLATINUM account, has been well
 accepted by high net worth NRIs, as the product provides special
 identity to customers and a host of services free of cost. Personalized
 multicity cheque payable at all branches at par and SBT Gold Card
 (VISA) that provides complimentary insurance is the special features of
 the product.
 
 Premium Rupee Account is a special product designed to provide NRIs the
 twin benefit of interest plus premium in the foreign exchange market.
 NRE funds invested in this product are absolutely tax-free and retain
 NRI status for the funds on maturity. The benefit derived from the
 scheme works out to 8-9% per annum, at present, depending on foreign
 exchange market conditions.
 
 All transactions of Rs. 5,000 and above are acknowledged through SMS to
 NRIs. Internet banking facility offered by the bank enables the NRIs to
 effect transfer of funds within the Bank as well as to other banks in
 India and also third party transfers, carry out their standing
 instructions for various payments, rail bookings, fee payments, and
 also online shopping and opening Term Deposits and Recurring Deposits.
 It also enables them to view their accounts and transactions.
 
 NRI News Channel, a monthly newsletter containing important news items
 and information regarding products and services, interest rates etc.
 useful to NRIs, is circulated
 
 to all NRI constituents through the branches by email.
 
 NRE account opening for new customers sourced by Exchange Companies are
 now centralized at the Liability Central Processing Centre [LCPC]
 functioning at Thiruvananthapuram, which facilitates immediate opening
 of accounts and issuance of Multicity chequebooks and ATM Card to NRIs.
 
 Welcome Kit containing welcome letter, non-personalised chequebook, ATM
 card and brochures on various products and services are provided with
 Representative Office, Exchange Companies and Relationship Managers to
 facilitate issuance to NRIs who approach them for opening accounts. The
 account is subsequently activated to enable them to carry out the
 transactions.
 
 The four NRI Branches at Attingal, Mavelikkara, Thiruvalla and
 Ernakulam and specialized NRI Cells in more than 50 branches in NRI
 centres provide very specialized and personalized services to the NRIs.
 
 6. Lead Bank Scheme
 
 6.1 The Bank is spearheading the Lead Bank activities in three
 districts of Kerala State viz. Alappuzha, Kottayam and Pathanamthitta.
 The District Credit Plans for the year 2010-11 was launched in the
 Banks lead districts during March 2010 with 58 % increase in outlay
 over the previous year.
 
 6.2 Considering the importance of District Level Review meetings of
 Lead Banks, academicians from various fields and successful
 entrepreneurs were invited as per the recommendation of the Thorat
 committee on Lead Bank Scheme. The Lead Banks also initiated several
 innovative activities like outreach programme in unbanked areas, where
 Banking Ombudsman RBI attended. Kissan Credit Card beneficiaries
 meetings, Counselling for students seeking educational loans, Financial
 Literacy seminars and EDPs for different target groups were also
 arranged in the lead districts.
 
 6.3 The total outlay by all financial institutions in the three Lead
 Districts for 2010-11 was Rs. 13,801.79 crore of which the Banks share
 was Rs. 3,270.93 crore (23.70%).  The disbursement under Priority
 Sector Advances in the districts during the year 2010-11 by all
 financial institutions is Rs. 10,206.66 crore of which the Banks share
 is Rs. 2,171.82 crore, which constitutes 21.22% of the outlay.
 
 7.  Financial Inclusion
 
 7.1 Financial Inclusion is delivery of banking services at an
 affordable cost to the vast sections of the disadvantaged and
 low-income groups. The Bank has opened over One
 
 Million No-frills accounts (Janapriya accounts). 89% of the 1.97 lac
 No-frills accounts were opened in the state of Kerala. Joint Liability
 Group (JLG) schemes, Biometric Smart Card Project, General Credit Cards
 to the Janapriya Account Holders etc. are other initiatives in this
 direction.
 
 7.2 In conformity with the directions of Reserve Bank of India, the
 Bank has formulated a Financial Inclusion Plan, which has been rolled
 out during the year and is, expected to be streamlined by the next two
 years. This plan for Financial Inclusion will be an integral part of
 the business plan of the Bank.
 
 7.3 The following steps/activities have been undertaken by the Bank as
 a part of fulfilling the Banks commitment to Financial Inclusion.
 
 - 29 villages having a population over 2,000 have been allocated to the
 Bank by SLBC Kerala for providing basic banking services through BF/BC
 route or by opening branches.
 
 - Bank has decided to provide Basic banking in these villages through
 the BF/BC route except in Perumanna village in Calicut district, where
 a new branch was opened on 30th March 2011.
 
 - An MoU has been signed between Kudumbashree and Bank for engaging
 Kudumbashree as Banking Correspondents for the Bank in the state of
 Kerala.
 
 - An agreement has been signed between Bank and M/s. Bartronics India
 Limited, Hyderabad for engaging them as Technical Service Providers for
 Smart Cards and Financial Inclusion Project of the Bank.
 
 - In Tamilnadu the Bank has been allocated 14 villages for providing
 basic Banking Services, which will also be covered through the BF/BC
 route.
 
 - The Bank has set up Customer Service Points in all the 28 villages
 allocated to the Bank in Kerala and enrolments have started in 16
 villages. The services were flagged off on 22nd February 2011 by the
 Managing Director and Banking Ombudsman, RBI in a very colourful
 function at Veeranakavu village in Thiruvananthapuram district and
 given much publicity by the print and electronic media.
 
 - The products offered under the Product name SBT- SAHAYA HASTHAM
 consists of an SB Account (Zero balance), A Recurring Deposit account
 and an Overdraft (General Credit Card) for Maximum of Rs. 10,000/- for
 the rural poor.
 
 - Two days training was imparted to 27 Customer Service Providers and
 their standbys. One day training was also imparted to Branch Managers
 of 25 Link Branches in Kerala.
 
 - Trusts have been formed for 3 Financial Literacy and Credit
 Counselling Centres in the 3 districts where Bank has lead bank
 responsibility ie., Alappuzha, Kottayam and Pathanamthitta districts in
 Kerala
 
 - An MoU has been signed between Bank and Unique Identification
 Authority of India (UIDAI) for the Bank to function as Registrars for
 UID Project of the Government of India on 23rd November 2010.
 
 - M/s Tera Software Ltd, Hyderabad has been selected as the Enrolment
 Agency for the Banks Unique Identification Project in Kerala.
 
 7.4 Rural Self-Employment Training Institutes (RSETIs)
 
 RSETIs have been started by the Bank in Wayanad, Pathanamthitta,
 Alappuzha and Kottayam for providing skill upgradation training to the
 rural youth with focus on BPL category. The 4 institutes had trained
 9847 persons and 95% of the people are women beneficiaries, majority of
 the trainees are reported to be successful in starting self-employment
 ventures. The important courses includes beautician, electrical wiring,
 ornaments manufacturing, accounting, Computer hardware servicing,
 aluminium fabrication, kitchen gardening, mushroom cultivation with
 vegetable growing and off-site programmes like rubber tapping.
 
 7.5 Financial Literacy And Credit Counselling Centre (FLCCs)
 
 FLCC has been established in Banks Lead Districts, along with RSETIs
 for providing financial literacy & credit counselling. Their major
 action point includes popularization of financial literacy activities,
 arranging seminars for counselling students aspiring for higher
 education.
 
 8. Support to disadvantaged segments
 
 8.1 Assistance to Scheduled Caste / Scheduled Tribes [SC/ST]
 
 The Bank continues to give due importance in extending financial
 assistance to meet the credit requirements of the Scheduled Caste /
 Scheduled Tribes [SC/ST] borrowers.  The advance to SC/ST borrowers
 under Priority sector aggregated to Rs. 1,991 crore. This works out to
 11.47% of the banks Priority sector Advances, compared to 0.77% of the
 banks Priority sector lending at the end of the previous year. The Non
 Performing Asset position in respect of SC/ST borrowers under Priority
 Sector stood at about 3% of the outstanding as furnished above.
 
 8.2 Minority Communities [MC] / Other Backward Communities [OBC] /
 Physically Handicapped [PH] / Ex Servicemen [EX-SER] Cell
 
 The Bank has designated an Officer of General Manager rank as Chief
 Liaison Officer for OBC Cell and PH/Ex- Servicemen Cell. The Bank has
 also designated an Officer of Deputy General Manager rank as Chief
 Liaison Officer for Minority Community Cell assisted by Liaison
 Officers at Head Office, five Zonal offices, and two Regional Offices
 to protect the interests of the employees belonging to the respective
 sections.
 
 The Cell ensures:
 
 - Compliance by the Bank with orders and instructions pertaining to the
 reservation of vacancies in favour of Ex-Servicemen and Physically
 handicapped in the matter of recruitment/ promotions and other service
 benefits.
 
 - Compliance by the Bank with orders and instructions pertaining to the
 reservation of vacancies in favour of MC/OBC in the matter of
 recruitment and other service benefits.
 
 - The Bank takes appropriate steps to provide all help and co-operation
 to the Backward classes Development Corporation.
 
 8.3 Assistance to Minority Communities [MC]
 
 The Bank continues to give due importance in extending financial
 assistance to meet the credit requirements of the MC borrowers. The
 advance to MC borrowers under Priority sector aggregated to Rs. 5,908
 crore. This works out to 34% of the Banks Priority sector Advances for
 MC, compared to 22% of the Banks Priority sector lending as at the end
 of the previous year.
 
 9. Information Technology - Technology Upgradation & IT Initiatives
 
 9.1 With Core Banking Solution (CBS) implemented across all the
 branches of the bank including the newly opened branches, ITS
 department is playing a key role in facilitating corporate innovation
 and growth. The Core Banking System has provided the Bank with
 state-of-the-art software that has greatly enhanced the efficiency of
 customer services, speeded up data processing capabilities,
 strengthened MIS, enabled efficient Asset Liability Management, reduced
 transaction cost and offered alternate channels to customers for
 transacting their business. The Corporate Data Centre (CDC) is at
 Belapur in Navi Mumbai. The Core system is a product-based system
 whereby new schemes of the bank can be introduced easily with global
 parameter setting
 
 at CDC level. Global setting of parameters of various products, both
 deposits and loans, are done at CDC.  The capacity of the servers and
 other equipments, and other performance parameters are periodically
 reviewed and upgradation / addition of new equipment is arranged as and
 when felt necessary.
 
 9.2 Alternative Delivery Channels: The CBS facilitates effective
 implementation of Alternative Channels like Automated Teller Machines
 [ATMs], Internet Banking, and Mobile Banking for extending products and
 services to the customers. The ATM network was beefed up by adding more
 ATMs. The Internet Banking facility is recognised to be the best among
 its class. Mobile Banking Service, which was rolled out last year, is
 getting acceptance from customers.
 
 9.3 ATMs: The Bank has a network of 833 ATMs, including 244 offsite
 ATMs. The network of 699 ATMs in Kerala is the largest in the state.
 All of the ATMs are networked with State Bank Group ATMs numbering over
 25,000.
 
 07 new ATMs and 40 Multi Function Kiosks (MFK) were installed during
 the year. The Banks ATM-cum-Debit cards are accepted in all outlets
 having Master Card logo. Several facilities such as Visa Money Transfer
 (VMT), Money Send, SBI Credit Card payment, SBI Life Premium payment,
 Mobile recharge, Donation, Fee payment, JMET / GATE Application Fee
 payment, Mobile Banking registration, Cheque Book order etc. have also
 been enabled in the ATMs.
 
 9.4 The Bank has a card base of 44.44 lac as on 31st March 2011, which
 translates into an increase of 20.92% over the card base as at the end
 of the previous year.
 
 9.5 Internet Banking - The Bank offers a convenient and efficient
 Internet Banking (INB) facility through 256 bit EVSSL (Extended
 Validation Secured Socket Layer) encryption.  This provides more
 security to Internet Banking customers against phishing / hacking
 threats.
 
 9.6 Major initiatives in Internet Banking during the year are as
 follows:
 
 - Site-to-site integration was done in March 2011, with NSDL, to enable
 the customers to view online, their Income Tax Annual Credit statement
 (Form 26AS) for the current assessment year and past five assessment
 years.
 
 - Site-to-site integration was done in March 2011, with the University
 of Kerala, to facilitate e-payment of examination fees, for students
 and colleges. This procedure is the first of its kind in Kerala.
 
 - e-TDR, e-STDR, and e-RD facilities which enables the customers to
 open fixed deposits and recurring deposits without branch intervention,
 were rolled out during the year.
 
 - e-Payment of Kerala Water Authority bills was introduced in August
 2010.
 
 - Online Bill Payment facility for customer who does not have Internet
 Banking Facility was introduced in July 2010. The Branch INB officer
 can register the biller on behalf of the customer and initiate Autopay
 facility for payment of utility bills
 
 9.7 Anti phishing measures: Several anti-phishing steps have been taken
 to protect the interest of the customers including:
 
 - Introduction of mandatory high security SMS passwords for completing
 all online transactions above Rs.10,000/- per day, other than to own
 accounts.
 
 - A cooling period of 4 to 16 hours has been introduced for adding
 newly created beneficiary. A message will be sent to customers mobile
 phone regarding creation of new beneficiary, as an alert against
 probable phishing attempt.
 
 - A new facility called Limited transaction and View has been
 introduced, wherein the transaction rights of the customer can be
 restricted to own accounts opened under the same CIF (Customer
 Information File).
 
 - A new option has been enabled where the customer can login to the
 site and register for SMS alerts, which will be updated in CBS.
 
 - Mobile number has been made mandatory both in CIF and temporary
 address for INB registration.
 
 9.8 Mobile Banking Service (MBS)
 
 Mobile banking provides the customers with another safe, secure, fast
 and convenient channel for banking transactions. The services provided
 include enquiry services, funds transfer, demat account services, bills
 payment mobile top up, m-commerce etc. The daily limit for MBS
 transaction is Rs. 50,000/- for aggregate of funds transfer &
 transactions involving purchase of goods & services, with an overall
 calendar month limit of Rs. 2,50,000/-. 32,519 new Mobile Banking
 registrations were activated during the year.
 
 Our customers are having the option of using Mobile Banking Service
 over any of the following four channels viz.
 
 a) Application based b) WAP based c) USSD based d) SMS based.
 
 9.9 A slew of value added applications were developed to make the
 system more useful to the customers. These include:
 
 - ATM Complaint Management System software: An in house web based
 application for speedier ATM complaint resolution was implemented.
 Branches can directly lodge the ATM / POS (Point of Sale) related
 failed transaction complaints through a simple data entry menu provided
 in the software.
 
 - Interface for ascertaining the status of Online Loan Applications
 from the Homepage: Applicants who have applied for loan online can
 verify the status of their loan application from the website.
 
 - Collection of Customs Duty through e-payment - Software for
 electronic Data submission: A new interface Package has been developed
 for Dwarka Branch, which is identified as the e-FPB for Customs duty
 collection through Internet The package helps to generate various
 electronic data required for the EASeR-C (Electronic Accounting System
 for e-Receipts in Customs) system conceived by CBEC
 
 - Customization of Paysys application for Higher Education
 Department, Kerala State:
 
 Paysys, a web based package which enables Corporates to make bulk
 payments to their customers through core banking and NEFT, was
 customized for use by the Higher Education Department for distribution
 of scholarship to students through Thiruvananthapuram Main and Fort
 branches.
 
 10. Business Process Re-Engineering (BPR) Initiatives
 
 10.1 With the objective of improving performance and enhancing customer
 service to global standards, the Bank has implemented various BPR
 initiatives by leveraging on its core competencies, state of the art
 technology and redesigned operating architecture.
 
 10.2 Centralised Loan Processing Centres for appraisal, sanction and
 disbursement of loans in Retail, Small & Medium Enterprises segments
 have been set up at 8 major centres. This has enabled the Bank to
 reduce the response time in these centres, thereby, improving the level
 of customer satisfaction. It has also enabled standardization of
 internal processes leading to improved quality of assets and speeding
 the delivery time. Banks Rural Central Processing Centre is set up at
 Palakkad covering all the branches in the District, which has improved
 the quality of lending at the Centre.
 
 10.3 Multi Product Sales Teams have been established at 7 of the loan
 CPC centres to target specific markets, for canvassing business.
 Stressed Assets Resolution Centres (SARCs) have been rolled out at 7
 centres for more focused attention on recovery, thereby releasing funds
 blocked in non-performing assets which can then be utilised for more
 productive purposes.
 
 10.4 Pension processing has been centralized at the Centralised Pension
 Processing Centre set up at Thiruvananthapuram. This Centre covers all
 pensioners drawing pension from all the branches. The Centre ensures
 accuracy in pension calculations, timely disbursement of pension and
 quick settlement of transactions.
 
 10.5 As a forerunner to setting up Centralised Clearing Processing
 Centres at MICR centres, the outward clearing work is centralized at
 the service branches at the MICR centres of Thiruvananthapuram,
 Ernakulam, and Kozhikode and Bengaluru. With the introduction of this
 initiative, the Bank is able to afford credit to the accounts in
 respect of local clearing instruments on the day following the day of
 deposit of the cheque.
 
 10.6 Trade Finance Central Processing Centres, aimed at ensuring
 efficient and uniform handling of transactions related to inland and
 foreign trade and Bank Guarantees by experienced operating personnel,
 have been rolled out at Ernakulam and Chennai.
 
 10.7 A Liability Central Processing Centre has been established in
 Thiruvananthapuram to provide back office support to branches, in
 opening and servicing of liability accounts such as Savings Bank and
 Current Deposit Accounts. The Centre provides pre-generated Welcome
 Kits to the linked branches consisting of ATM cards and cheque books.
 This facilitates the customers to operate the accounts immediately
 after opening the account.
 
 10.8 Drop Boxes have been provided at the branches for hassle free and
 safe handling of instruments deposited.  Grahak Mitras have been
 positioned at select branches to proactively guide the customers in
 conducting transactions.  Relationship Managers have been posted at
 select branches to extend personalized services to the customers.
 
 10.9 The above major BPR initiatives implemented by the Bank are
 contributing to improvement of the overall efficiency, service
 delivery, customers convenience and business growth
 
 11. Internal Control Systems & Supervision
 
 11.1 Integrated Risk Management
 
 The Banks risk management philosophy is based on a clear and timely
 identification of various types of risks, accurate risk assessment and
 measurement procedures and continuous monitoring. The risk management
 architecture of the Bank consists of the Board of Directors at the top
 having overall responsibility to implement Risk Management System in
 the Bank. Subordinate to the Board, Risk Management Committee of the
 Board has been constituted to have an oversight on all the risks
 assumed by the Bank and to decide appropriate policy and strategy for
 risk management. In order to have focused attention on various risks,
 Credit Risk Management Committee (CRMC), Market Risk Management
 Committee (MRMC) and Operational Risk Management Committee (ORMC) are
 in place to manage Credit Risk, Market Risk and Operational Risk
 respectively at the granular level. The General Manager (P&D) is
 designated as the Chief Risk Officer (CRO). The Integrated Risk
 Management Department headed by Deputy General Manager is responsible
 for the overall daily management of risks at micro level.
 
 Management of all the risks is governed by various policies such as
 Credit Risk Management Policy, Loan Policy, Market Risk Management
 Policy, Investment Policy, Operational Risk Management Policy, etc. As
 part of credit risk management, the Bank has a structured and
 standardised credit approval process, which includes comprehensive
 credit rating of proposals. The market risk is largely managed through
 adherence to various position limits, stop loss limits, Value at Risk
 [VaR] limits etc. The operational risk management framework comprises
 risk and controls self- assessment (RCSA) and identification,
 measurement and monitoring of various losses experienced by the Bank
 and mitigation of risks. The risk management objectives will be
 accomplished by leveraging technology.
 
 The Bank is closely monitoring the roadmap for migration to advanced
 approaches of Basel-II with respect to all risks by striving to create
 sufficient and accurate database and ensuring involvement and awareness
 among all the staff members of the Bank.
 
 During the financial year 2010-11, the following major risk management
 initiatives were taken:
 
 - New Credit Rating models were introduced for NBFCs (Non Banking
 Financial Companies) and infrastructure
 
 projects.
 
 - Retail Pool Scoring Models were introduced for personal loans,
 housing loans, education loans, car loans and two wheeler loans.
 
 - Credit Rating models for trading and manufacturing sector were
 modified.
 
 - The Bank started computing Value at Risk for all investments in
 trading book as part of risk management.
 
 - As part of spreading awareness and risk management culture all over
 the Bank, during the quarter October- December 2010, officials from
 risk management department conducted daylong workshops for the
 Controllers and the AGMs and Chief Managers heading branches in
 Thiruvananthapuram, Ernakulum and Kottayam zones and all Branch
 Managers and Controllers in Mumbai and Delhi regions.
 
 11.2 Asset Liability Management
 
 The Asset Liability Management System implemented effective from 1st
 April 1999 is functioning as per the guidelines prescribed by Reserve
 Bank of India. The Asset Liability Management Committee (ALCO), headed
 by Managing Director, meets regularly.
 
 Liquidity and Interest Rate Risks are identified, measured and
 monitored by ALM Section through Duration Gap Analysis, Stress Testing
 on Liquidity and Interest Rate Risks etc. and put up to ALCO for
 discussion and decision making. ALCO also discusses in detail other
 statements of Structural Liquidity & Interest Rate Sensitivity, Short
 Term Dynamic Liquidity, Quarterly Review of Contingency Funding Plan,
 etc.
 
 The ALM Section prepares the statements of Structural Liquidity &
 Interest Rate Sensitivity and Short Term Dynamic Liquidity which helps
 to monitor the liquidity levels vis-a-vis the benchmark levels fixed by
 RBI / as per Banks ALM Policy and proposes corrective action wherever
 found necessary. Various interest rate revisions including the
 revisions of the Benchmark Prime Lending Rate (BPLR) and Base Rate (BR)
 of the Bank are discussed and decided by the ALCO.
 
 The ALCO also discusses the current financial position of the country
 on an ongoing basis. The changes in the market are monitored
 continuously and decision support papers on the current economic
 developments are put up to the Top Management.
 
 11.3 Inspection and Supervision
 
 The Bank has put in place an effective institutional mechanism for Risk
 Based Supervision through RBS Cell in Inspection Department. As
 envisaged by the regulator, the Bank introduced Risk Focused Internal
 Audit (RFIA) under RBS w.e.f 1st April 2003, where business parameters
 have been de-linked from the Risk Parameters. With effect from 1st
 April 2010, score for Business Parameters has been taken out of RFIA
 
 In addition to the regular internal inspection, IS Audit, Compliance
 Audit, Surprise Inspection, System Audit of Zonal Offices and Head
 Office departments, etc. are conducted by the Inspection Department.
 
 Following the migration to the Core Banking System, RFIA was revamped
 by way of revision in Audit Report Formats, rating mechanism, grouping
 of branches, sampling norms and periodicity of Inspection. The
 Information System Audit (IS Audit) cell was formed within the
 Inspection Department
 
 11.4 Credit Audit
 
 The audit of high value credit accounts is undertaken by the Credit
 Audit Department, with the aim of improving the asset quality of the
 Bank. Accounts with total exposure of Rs. 2 crore and above are covered
 under Credit Audit.  The Department conducted audit of 1,077 accounts
 during the year, covering the pre-sanction and post sanction aspects.
 This includes 14 AUC accounts and 73 accounts with exposure below Rs. 2
 crore and above Rs.1 crore on a random basis during the year.
 
 With the integration of Credit Audit with Risk Focussed Internal Audit
 (RFIA), the marks awarded by the credit auditor are normalized by the
 internal auditors under Credit Risk Management, wherever necessary.
 Monthly performance reports of the department are regularly submitted
 to the Audit Committee of the Executives and the review reports are
 being submitted to the Audit Committee of the Board at its next meeting
 for information.
 
 11.5 Inter-Office Reconciliation
 
 As per RBI guidelines, all high value debit entries of value Rs.1 lac
 and above and 99.99% of debit amount need to be reconciled within a
 period of six months from the date of their origin. The Bank has
 completed reconciliation of Inter-branch accounts up to 30th September
 2010 achieving 100% reconciliation of debit entries. The Bank is
 committed to perform better than the target set by RBI and shall aim at
 reconciling all entries within three months of their origin.
 
 11.6 Compliance
 
 The Bank ensures that GOI and RBI directives/instructions received are
 being complied with promptly. Quarterly review reports on the
 compliance status and performance of the department are regularly
 submitted to the Audit Committee of the Board for information.
 
 11.7 KYC norms & AML/CFT measures
 
 The Bank has put in place a Board approved revised policy and
 procedural guidelines on Know Your Customer (KYC)/ Anti Money
 Laundering (AML) /Combating of Financial Terrorism (CFT) measures in
 line with the master policy and subsequent guidelines issued by Reserve
 Bank of India.  A dedicated KYC-AML Cell is functioning in the Head
 Office to oversee the compliance of KYC/AML/CFT measures. Deputy
 General Manager (Compliance) is the designated Principal Officer for
 KYC/AML in the Bank.
 
 Monitoring of transactions is carried out to submit the required
 reports to Financial Intelligence Unit-India, (FIU- IND), as mandated
 by Prevention of Money Laundering Act 2002. With a view to implementing
 and supporting monitoring of transactions, the Bank has acquired
 appropriate software, which is processing all transactions handled by
 all branches of the Bank, on a day-to-day basis.  Monthly Cash
 Transaction Reports (CTRs) are being generated by the system along with
 Suspicious Transaction alerts daily, for analysis by the KYC-AML Cell.
 After due analysis, suspicious transactions are reported to FIU-IND
 through STRs where ever necessary. Counterfeit Currency Reports (CCRs)
 are also being submitted to FIU-IND as and when detected.
 
 Data cleansing of the existing database of customers is now under
 progress to update in the Core Banking System [CBS] all relevant
 customer data. The progress in the implementation is being reported to
 the Board periodically.
 
 KYC/AML Cell is publishing a quarterly newsletter and maintaining a web
 site to provide relevant and up to date information for Branches /
 Administrative Offices.
 
 Training on KYC / AML is being imparted on an ongoing basis in the
 Bank. Staff awareness programmes are conducted regularly through
 seminars on Zonal/ Regional Office levels, Learning Centers and branch
 visits.
 
 11.8 International Financial Reporting Standards (IFRS)
 
 As per the Road Map laid down by Ministry of Finance, Government of
 India ,all Scheduled Commercial Banks are to convert their opening
 Balance Sheet as on April 1, 2013 in compliance with the Converged IFRS
 (IND-AS). The
 
 Bank being a member of State Bank Group will be taking a common group
 approach on convergence to IFRS. The IFRS cell at Head Office
 coordinates with relevant Departments for collection, compilation and
 submission of data as required by the parent Bank (State Bank of India)
 for preparation of Consolidated Financials by them under Converged
 IFRS. The Bank shares a common IT platform with the State Bank of India
 and any changes made in Core Banking System as per the requirement
 under IFRS will also be available to the Bank. The IFRS Cell had
 arranged a presentation on Implementation of IFRS-Challenges for
 Indian Banks by Shri. P.R. Ravi Mohan, Chief General Manager, Reserve
 Bank of India, to the Top Executives of the Bank to create awareness on
 the challenges and issues for the Bank on transition to Converged
 IFRS.
 
 12. Security arrangements
 
 12.1 The year under review was largely free from security incidents,
 except for ten attempts / security incidents this year (compared to 8
 last year). However there was one major incident where Rs. 1 Crore cash
 was lost while in transit near Chennai. But the resultant loss was
 contained at Rs. 1.24 lacs, as most of the stolen cash was recovered
 soon after, thanks to quick action by the functionaries and police
 authorities. There were seven theft attempts on ATMs, a minor fire
 incident and minor attempts of break in on bank branches. None of them
 were successful and there were no loss of cash or gold.
 
 12.2 Risk assessment of all bank branches due in 2010 was done and
 accordingly security guards have been deployed in vulnerable branches.
 Manning of currency chests by five security guards is being ensured by
 timely recruitment. Branches are in the process of installation of
 integrated fire and security alarm systems. Formal security audit of
 all currency chests has been carried out this year and corrective
 measures, where required, have been initiated. Head Office security has
 been strengthened by installation of CCTVs system with comprehensive
 coverage and establishment of a control room.
 
 12.3 Mock fire evacuation drill was carried out twice this year at the
 Head Office. Chief Security Officer, fire officer and Zone / Region
 security officers through branch visits are reviewing security
 arrangements in branches constantly and corrective measures taken where
 required. Approximately 180 security guards were put through formal
 training capsules at the Learning Centre this year. Security and fire
 safety awareness were included in many training capsules for bank
 officers to inculcate security awareness
 
 13.  Information security
 
 13.1 Information, one of the most important assets of a Bank, which is
 stored centrally and made available globally, needs to be protected and
 guarded at all costs. Protection of information assets is necessary to
 maintain the trust and the faith reposed by customers in the Bank,
 maintain compliance with the law and to protect the Bank from financial
 and reputation loss.
 
 13.2 The Banks approach to Information security has always been
 proactive. With the increased use of Information Technology in delivery
 of services and launching of alternate delivery channels, the Bank has
 also enhanced the Security of the Banks Information Systems. The
 Information Systems Security Cell functioning at the Head Office is in
 charge of creating, maintaining and disseminating information security
 strategy, plans and policies. The Cell acts as the coordinator for the
 Information Systems security activities. The formulation and periodic
 reviews of IS Security policies, vetting of software etc are some of
 the major functions of the IS Security cell.
 
 13.3 The cell also undertakes spreading the Information Security
 awareness among the staff and customers of the Bank. More than 400
 staff members have been trained in the Information Security activities
 during the year under review. Special campaigns were initiated to
 spread awareness about various threats faced by the customers like
 phishing, Skimming etc. Awareness campaigns have been conducted through
 emails, pamphlets, newsletter etc.  The cell also keeps the staff
 members conscious of the security threats.
 
 13.4 In the current year the IS Security Cell has formulated various
 policies relating to areas such as Third party access, prohibition on
 use of unauthorized software, etc. All the existing information
 security and internet banking security policies have also been reviewed
 in light of the latest developments in the IT field and changes have
 been made wherever required. The IS security cell activities ensures
 high information assurance within the Bank and also that the Bank meets
 all legal, statutory and regulatory requirements in information
 security
 
 14. Vigilance Machinery and Frauds Monitoring
 
 14.1 The vigilance climate of the Bank during the period under review
 was generally normal. But three instances of frauds, where staff
 members were involved, reported during the year have posed some
 concern. Regular Departmental Action has been initiated against erring
 officials.
 
 14.2 Some of the major focus areas and activities of the vigilance
 machinery are
 
 - Preventive Vigilance Measures - Vigilance mechanism nitiated in the
 Bank created a positive impact on the
 
 functionaries from top to bottom regarding their attitude. Vigilance
 Department officials are handling sessions on Preventive Vigilance
 through Banks training system especially for the benefits of newly
 recruited Probationary officers/ newly promoted officers highlighting
 the importance of adherence to systems and procedures and probity in
 public life.
 
 - Preventive Vigilance committees have been set up in major branches
 and the Minutes of such meetings held at the branches are being
 monitored by the Vigilance Department. As per the directive of Reserve
 Bank of India (RBI), preventive vigilance committees have been formed
 in Central Processing Centres also. The Bank
 
 ssues circulars every quarter stating the modus operandi of fraud cases
 so as to avoid recurrence of similar instances. Surprise inspections at
 branches are being conducted as part of Preventive Vigilance measures
 and the irregularities pointed out in the reports are getting rectified
 then and there. Wherever warranted, improvement in the system was
 brought to the knowledge of the top management for redressal.
 
 - Structured meetings / conferences were held by the Chief Vigilance
 Officer (CVO) at various Zones of the Bank / branches to propagate and
 ensure the implementation of Preventive Vigilance mechanism in the Bank
 in its true spirit. As per the directive of Central Vigilance
 Commission (CVC), structured meetings are now being held with Chief
 Executive of the Bank for monitoring vigilance cases.
 
 - Trainings / Seminars for members of staff - Seminars/ workshops etc.
 are being conducted in the Bank where vigilance officials are invited
 to speak. These included, a presentation on Preventive Vigilance made
 at Learning
 
 Centre, Ernakulam, One Day Work Shop on 24th September 2010 at SLC,
 Thiruvananthapuram for the benefit of officers who deal with
 procurement of goods, services and works, and One-day seminar at Head
 Office, Thiruvananthapuram for officials from all the zones / Regions
 who deal with disciplinary matters. A Reverse Auction (e-auction),
 conducted by ITS Department on the day, was viewed by the CVC officials
 who suggested some improvements.
 
 - Chief Technical Examiner [CTE] from CVC had conducted an audit on
 implementation of leveraging
 
 technology in the Bank and has given certain suggestions for
 improvement. The Bank has started implementing the suggestions made by
 CTE.
 
 - Access of complaints to CVO - In terms of directives of the CVC, the
 CVO is now scrutinising the complaints received through the Complaints
 Cell and also copies of complaints submitted by ZO/ ROs to ascertain
 whether any vigilance angle is discernible. The Bank has decided to
 introduce a suitable module to register complaints on line by 30th June
 2011 as directed by the CVC. The gist of complaints received at Zonal/
 Regional Offices are now being put up to the CVO for perusal, as an
 outcome of Vigilance Audit conducted by the CVC.
 
 - Liaison with CBI officials - Close rapport is being maintained with
 CBI and Disciplinary Authorities (DA) for speedy disposal of cases. The
 Bank has provided the services of one official to CBI Office,
 Thiruvananthapuram on secondment basis, at the request of the CBI.
 
 - Vigilance awareness week - Vigilance Awareness Week was observed in
 terms of CVC directives with wide publicity. The activities carried out
 during the period included Inter Collegiate Quiz Competition on
 Vigilance & General Awareness at Ernakulam, and Quiz competition for
 the members of staff of the Bank at the Banks Head Office. On the
 concluding day, SBT Honesty Awards were conferred on seven students
 selected from various schools in and around the city to inculcate the
 idea of honesty in the minds of young citizens and also with an idea to
 ‘catch them young in the fight against corruption. The Honesty Awards
 were given away by Dr. Alexander Jacob IPS, Additional Director General
 of Police (Prisons), Kerala.
 
 15. Right to Information Act
 
 15.1 The Right to Information Act, 2005, has been implemented in the
 Bank since 2005-2006. In terms of the Act, Central Public Information
 Officers, Asst. Central Public Information Officers and Appellate
 Authorities were nominated and a system was put in place to receive the
 applications / queries from the public seeking information about the
 Bank and related matters and to furnish reply promptly within the
 stipulated time limit. The applications / queries received under the
 Act during the year were replied promptly. During the year, Bank
 received 726 applications under the Act and all the applications were
 disposed of promptly and within the timeframe.
 
 16. Human Resources Development & Industrial Relations
 
 16.1 Staff Resources & Recruitments - The Bank had on its rolls 12072
 members of staff, comprising 4459 officers, 5381 clerical and cash
 department staff and 2232 subordinate staff inclusive of 337 Part Time
 Sweepers.  The number of women employees in the Bank was 4395 and
 ex-services personnel constituting 1196 and Physically Challenged
 Persons 180. Out of the women employees, 1188 are officers, 2686
 non-subordinate staff and 521 subordinate staff.
 
 16.2 During the year, 278 staff were recruited, 214 in the officers
 cadre, 18 in non-subordinate cadre (including 9 Sports persons) and 46
 in the subordinate cadres
 
 16.3 During the year 75 employees were promoted from Part Time Sweepers
 to non-subordinate, 249 employees were promoted from clerical cadre to
 the Officers cadre and 610 promotions within Officers cadre were
 completed before 30th November 2010.
 
 16.4 Staff Productivity - Business per employee improved from Rs. 7.58
 crore as at the end of March 2010 to Rs.  8.88 crore as at March 2011.
 Net profit per employee also improved from Rs.5.80 lac to Rs. 6.20lac
 during the same period.
 
 16.5 Training Programmes
 
 Training programmes are conducted at the two Staff Learning Centres at
 Thiruvananthapuram and Ernakulam, with a view to updating the
 knowledge, awareness and skills of the staff members on an ongoing
 basis with particular reference to areas of corporate goals/concern
 areas.
 
 During the year under review, 167 training programmes were conducted
 imparting training to 2123 officers, 2094 non-subordinate staff and 677
 subordinate staff. These include Orientation Training Programmes
 imparted for newly recruited 205 Probationary Officers and to 249
 officers promoted from clerical cadre.
 
 In addition to in-house training programmes, 460 officers were deputed
 to other institutions in India like the State Bank Staff College, State
 Bank Academy, State Bank Institute of Rural Development, State Bank
 Institute of Information and Communication Management, College of
 Agricultural Banking, National Institute of Bank Management etc. 7
 officers were deputed for foreign trainings/ conferences.
 
 16.6 Organisational Development Initiatives – Parivarthan, Conclaves
 
 During the year a Mass Internal Communication Programme called ‘
 Parivartan ‘ for Sub-staff was launched with the objective of bringing
 about a positive change in the mindset of employees, bringing greater
 togetherness among the staff and making them aware of the issues faced
 by the Bank. 50 Parivartan programmes were conducted within 39 days
 spread over 10 centres across the country covering 2000 employees.
 
 In order to bring about greater cohesion, role clarity and awareness
 about larger organisational imperatives, conclaves of DGMs / AGMs were
 held at 5 centres covering 28 DGMs and 125 AGMs. These conclaves were
 conducted in the presence of members of the Management Committee and
 yielded valuable suggestions/feedback on the functioning of various
 units of the bank and served to draw up an action plan for future for
 the bank.
 
 16.7 Reward and Recognition
 
 Twenty three branches were selected for membership of MDs Club/CGMs
 Club for the year 2009-10. The winners were felicitated at a function,
 where members of the Top Management and spouses of the winners were
 present. 3 Assistant General Managers were also awarded Best AGM award
 in conformity with the scheme formulated as per guidelines of State
 Bank of India in this regard.
 
 16.8 Staff – SC/ST/Minority Community (MC) / EX- SER./PH CELL
 
 The Bank has a separate SC/ST Cell headed by Chief Liaison Officer in
 the rank of General Manager assisted by Liaison Officers at Head
 Office, five Zonal offices, and two Regional Offices at Mumbai and New
 Delhi to take care of the welfare and protect the interests of the
 SC/ST employees. The Cell at Head Office arranges periodic meetings of
 the representatives of the SBT SC/ST Staff Welfare Association with the
 Top Management to redress their grievances. The Bank has already
 provided a well- furnished office with telephone and computer to the
 Association. Check off facility for payment of subscription by the
 members to the Association is also provided. The Cell is also
 conducting meetings of Liaison officers of all the Zones/ Regional
 Offices at Mumbai and New Delhi at quarterly intervals. Such meetings
 chaired by the Chief Liaison Officer, review the functioning of the
 Liaison Officers and discuss issues, if any, pertaining to their
 respective areas. The action points emerged in the meeting are
 implemented meticulously.
 
 The other tasks undertaken by the Cell are:
 
 - Ensuring compliance by the Bank with orders and instructions
 pertaining to the reservation in favour of SCs/STs in the matter of
 recruitment/ promotions and other service benefits such as relaxations/
 concessions admissible to them.
 
 - Ensuring placing of Annual Review Report on the progress of
 implementation of reservation policy for SC/ST to the Board of
 Directors.
 
 - Ensuring that while making reference to the Ministry of Finance
 (Banking Division) regarding de-reservation of reserved vacancies, the
 de-reservation proposal has been made with the full knowledge and
 concurrence of the Chief Liaison Officer.
 
 - Ensuring that the Bank takes appropriate steps to provide all help
 and co-operation to the National Commission for SC/ST.
 
 - Ensuring that GOIs directions are followed in respect of DPCs/
 Selection Committees pertaining to SC/ST/ MC members.
 
 - Ensuring proper implementation of the reservation orders by
 conducting annual inspection of the rosters maintained in the
 organization.
 
 - Acting as Liaison Office between Bank and the Ministry of Finance,
 Govt. of India and National Commission for SCs, STs, OBCs and Minority
 Communities for supply of information, answering questions and queries
 and clearing doubts in regard to matters covered by the reservation
 orders.
 
 Reservation policy has been introduced in the Bank for Scheduled Casts
 and Tribes from 1972 in direct recruitment and from 1978 in promotions.
 
 Reservation at 15% for SCs and 7.5% for STs are provided in direct
 recruitment for Officers cadre. In direct recruitment to Clerical and
 subordinate cadre where recruitment is state wise, the reservation
 percentage applicable in the respective states is followed. In
 promotion from Clerical cadre to Officers cadre 15% and 7.5% of the
 vacancies are reserved for SCs and STs respectively. The category- wise
 staff data as on 31st March 2011 is as under
 
 Category   Total   SC    %     ST     %     OBC   %
  
 Officers   4459    626 14.04   143   3.21   285  6.39
 
 Clerical   5381    731 13.58   170   3.16   611 11.35
 
 Sub-Staff  1895    502 26.49    84   4.43   206 10.87
 
 PTS         337    106 31.45     7   2.08    39 11.57
 
 TOTAL     12072   1965 16.28   404   3.35  1141  9.45
 
 Post based roster, which shows a clear picture of implementation of
 reservation rules is maintained in the Bank, in accordance with the
 Government of India guidelines.  Such rosters are being verified by the
 Liaison Officer for SCs and STs annually.
 
 Whenever backlog of reserved vacancies for SCs and STs occur, such
 vacancies are filled through special recruitment.  Last such special
 recruitment was conducted during 2009- 2010 and as on date there are no
 backlog vacancies under recruitment. Backlog of ST vacancies under
 promotion channel to Officer cadre is due to non-availability of
 candidates in the feeder cadre.
 
 Relaxation of 5% of marks and 5 years in upper age limit is allowed to
 candidates belonging to SCs and STs. In recruitment the total number of
 vacancies and number of vacancies available for SCs and STs are
 advertised extensively in newspapers.
 
 Special Training programmes were conducted for employees belonging to
 SC/ST category, appearing for promotion from non-subordinate cadre to
 officer cadre.  Pre-examination training programmes were conducted for
 1,522 candidates belonging to SC/ST/Minority/ex- servicemen category
 appearing for recruitment test for clerical staff and Probationary
 Officers in Associate Banks at Thiruvananthapuram and Ernakulam
 centres.
 
 16.9 Industrial Relations
 
 The time tested mechanism of bilateral negotiations at various levels
 of the organisation with the Employees Union and the Officers
 Association through periodical structured meetings and redressal of the
 issues ensured harmonious and cordial industrial relations in the Bank
 throughout the year. There was industry level strike by the employees
 on 7th September 2010.
 
 Bipartite meetings were held with Employees Union and Officers
 Association at Head Office level and Zonal Offices at periodic
 intervals. The Bank hosted the Central Bipartite meeting with State
 Sector Bank Employees Association (SSBEA) on 21st February 2011 at
 Bangalore. Staff Welfare Committee and Sub committee meetings of Staff
 Welfare Fund (SWF) were held 6 times during the year.
 
 Bank Fest, the Literary, arts and Sports competition for staff members
 was conducted at Zonal Headquarters centres in November-December 2010.
 Bank fest finals were conducted at Thiruvananthapuram from 10th
 December 2010 to 12th December 2010. More than 400 staff members
 participated from all the zones.
 
 Improvements / amendments / activities under the various
 
 staff welfare schemes that took place during the year include:
 
 - Reimbursement of health check up charges for retired staff enhanced
 from Rs. 1,500/- to Rs. 1,700/-. 2,858 applications of retired staff
 and 3,707 applications of spouses of staff members were paid under the
 scheme during the year.
 
 - Super Suraksha Insurance Scheme for employees was renewed with the
 life cover of Rs. 5.00 lac per employee. 46 claims were settled under
 this scheme during the year.
 
 - New Holiday Homes at Mookambika and at Madurai were opened, taking
 the total number of Holiday Homes to 23.
 
 - Scholarships and tuition fees amounting to Rs. 187.13 lac was
 disbursed to staff members. Reimbursements amounting to Rs. 82.43 lac
 were paid during the year under the out patient scheme. 33 applications
 were paid under the scheme of financial assistance for expenses
 incurred by Staff Members for physically/ mentally
 challenged/retarded/spastic dependant wards.
 
 - 46 claims amounting to Rs. 58.31 lac were paid under the scheme for
 part payment of outstanding in loan accounts in the event of death of
 an employee while in service. 132 claims were paid under the funeral
 expenses scheme during the year.
 
 17. Legal Services
 
 The Bank has a well-established Law Department with aw officers placed
 at various centers, and it plays a significant role in the various
 activities of the bank. It performs diverse functions such as giving
 advice on legal issues, drafting of various documents, examination /
 scrutiny of loan documents, etc. The Law Department also plays an
 important role in the matter of recovery. Suits and DRT applications
 for recovery against the defaulters are followed up by the Law
 Officers. The Law Officers assist the branches and other operational
 functionaries in the actions initiated for enforcement of security
 under the Securitisation and Reconstruction of Financial Assets and
 Enforcement of Security Interest Act, 2002. The petitions and claims
 against the Bank filed in various High Courts, Tribunals, Civil Courts,
 Consumer Forums, Ombudsman, emanating from the business activities
 undertaken by the Bank are handled with the assistance of the Law
 Officers.  Similarly cases in various courts, tribunals and authorities
 
 relating to service matters are also handled under the advice and
 guidance of the Law Department. It advises the Central Public
 Information Officers and the Appellate Authorities on the applications
 and appeals filed under the Right to Information Act, 2005. It is also
 involved in the training of the staff in matters involving law and
 practice. The Law Officers handle diverse legal matters and offer legal
 advice and suggestions to the branches and Administrative Offices and
 take steps to safeguard the interest of the Bank in its planning and
 operational functions.
 
 18. Public Relations and Publicity
 
 18.1 The Bank has been very active in all areas of Public relations and
 publicity during the year under review and maintained very close
 liaison with Government departments, Media, Commercial and Social
 organizations in particular and Public in general projecting Banks
 corporate image in its operating environment among public at large,
 Government and other institutional bodies.
 
 18.2 Extensive coverage given through the newspapers, hoardings,
 Internet and radio TV channels to popularize new products. The strategy
 of supplementing the marketing efforts at the branches by an intensive
 advertisement campaign all through the year at the corporate level
 yielded impressive results.
 
 18.3 The Bank was one of the main sponsors of The Hindu-Students
 Pre-counselling Programme, Tourism Week Celebrations of Government of
 Kerala, Flower show 2010, All Kerala Agri-Horticorporation Industrial
 exhibition, Haritha Vidyalayam project of IT@School, Nehru Trophy Boat
 race etc.
 
 18.4 Apart from advertisement on Hoardings, Bank has advertised through
 innovative methods such as direction boards to Sabarimala Route,Rota
 sign boards at Kozhikode, Kannur, Trichur, Palghat Railway stations and
 advertisements on Luggage trollies at Thiruvananthapuram airport.
 
 18.5 The Bank as a responsible corporate citizen sponsors and maintains
 the Poojappura Traffic Island Park, which is widely used by the
 residents of the city as a resting place.
 
 18.6 The Banks Calendar for 2011 with Ravi Varma Paintings  theme
 and Diaries for the year were well received by customers as well as
 general public. Banks internal house magazine Mythri still retains
 its eminence among other such publications.
 
 18.7 The Bank opened pilgrim service centers at Pampa and Sannidhanam
 to cater to specific banking requirements of the pilgrims to
 Sabarimala, which generated tremendous publicity and goodwill for the
 Bank.
 
 19. Progressive use of Hindi
 
 19.1 The Bank complied with the provisions relating to the Official
 Languages Act, Rules and instructions and directives of Govt of India
 and Reserve Bank of India.  During the year, various competitions were
 held for School level students in Hindi. Hindi Fortnight/Hindi Day was
 also celebrated in Head Office, Zonal Offices and Regional Offices.
 Weekly Hindi Workshop on Conversation in Hindi was introduced at Zonal
 Office, Thiruvananthapuram.  Annual publication ‘Swathi, the Banks
 Hindi Magazine and ‘Rajabhasha Sahayika was also published. Zonal
 Office, Thiruvananthapuram, published ‘Sitara a Hindi Magazine during
 the year. Hindi Workshops, Functional Hindi Programme were conducted
 for the benefit of staff members to increase the knowledge of
 functional Hindi.  Letter received in Hindi were replied in Hindi.
 
 19.2 The Bank has sponsored P.G. Vasudev Puraskar for the propagandists
 and writers in the state and the Award was distributed to Hindi Writers
 of Kerala in the function held at Thiruvananthapuram. S.B.T Hindi
 Sahitya Puraskar was also distributed to Hindi Writers of Kerala at
 Thiruvananthapuram.
 
 19.3 The Bank participated in the State Level Official Language
 Exhibition instituted by Kerala Hindi Prachar Sabha and won the shield
 for being the First Position for the implementation of Official
 Language Policy. Head Office, Thiruvananthapuram secured Shield (First
 Position) instituted by the Town Official Language Implementation
 Committee, Thiruvananthapuram in the implementation of Official
 Language Policy in Public Sector Banks situated in Thiruvananthapuram.
 The Kozhikode Zonal Office of the Bank received the Award for the
 implementation of Official Language Policy from the Government of
 India, Regional Implementation Office, (South–West), Ministry of Home
 Affairs, Deparment of Official Language, Cochin. The Zonal Office,
 Thiruvananthapuram secured shield from the Town Official Language
 Implementation Committee, Thiruvananthapuram.
 
 19.4 The SBT Malayalam Sammelanam was conducted under the auspices of
 the Bank and Malayalam Sahitya
 
 Awards for the best works in Malayalam Poetry, Short Story, Human
 Interest Story, Children Literature and Literary Criticism were
 distributed in a glittering function at Thiruvananthapuram. Prof.
 George Varghese, popularly known as Kakkanadan, noted Malayalam writer
 has been honoured with SBT Suvarna Mudra Puraskaram.
 
 20.  Branch Network
 
 20.1 The Bank has a network of 792 branches and 18 Extension Counters
 spread across 13 states and 3 union territories. The branch net work
 includes 10 Service Branches, 1 International Service Branch, 5
 Commercial Network Branches, 5 Specialized SME Branches, 4 NRI
 branches, 4 Treasury Branches 14 Specialised Personal Segment Branches,
 3 Asset Recovery Management Branches, 10 Specialised Agricultural
 Development Branches, 1 Micro Credit branch, 1 Specialised branch for
 women entrepreneurs, 1 Overseas branch, 1 MICR branch and 1 branch for
 State Government Transactions. Apart from this, the Bank has set up
 various Central Processing Centres under BPR initiatives, including 8
 RASMECCCs, RCPC, 1 CPPC, 5 SARC, 2 TFCPCs and 1 LCPC and 13 CACs. Also
 the Bank is having 2 Exchange bureaus at Airports; one at Calicut
 Airport and another at Cochin Airport.
 
 20.2 As many as 44 branches were added to the branch network, including
 upgradation of an Extension counter to full-fledged branch. A new
 Regional Office has been opened at Coimbatore. Two Regional offices
 have been relocated to Alappuzha and Bangalore. 22 branches have been
 shifted to better premises during the year. The Bank has authorization
 for opening 130 branches (including 55 centres under General
 Permission)
 
 21.  Green Banking and Corporate Social Responsibility
 
 21.1 The Bank has formulated a Green Banking and Sustainable
 Development Policy to play a pro-active role in environmental and
 social aspects and underscore the Banks Corporate Social
 Responsibility. As per this policy Bank will take effective steps to
 reduce its own carbon footprint by adopting environment friendly
 practices, including,
 
 - Replacement of GLS Bulbs by CFLs.
 
 - Rainwater harvesting in own premises, which are large enough
 
 - Use of Solar Water-heating at Learning Centres [Already implemented
 at Learning Centre, Thiruvananthapuram]
 
 - Ensuring energy efficiency for cooling and heating processes
 
 - Minimise printing and consumption of paper.
 
 Bank will also extend incentive to the borrowers who go for Green
 projects, i.e., those projects that reduce Carbon Emissions and promote
 Renewable Energy.
 
 21.2 A new Savings Account Product, SBT GREEN, has been formulated
 which encourages use of Alternative channels and dispenses with paper,
 adopting the spirit of Green Banking & Sustainable Development
 Policy.
 
 21.3 Community Services Banking
 
 Social circles are voluntary organization formed by staff members
 working in branches and administrative offices for undertaking social
 services. They address themselves to the requirements of their area of
 operation and extend assistance, which are outside the purview of
 banking services. Voluntary participation by the staff members and
 ndependent assessment of the requirements of the society under the
 guidance of the parent institution are unique concept in the
 functioning of the social circles. There are 576 social circles
 functioning at various branches and administrative offices, spread all
 over India.
 
 The activities carried out by the Social Circles include health care
 programs like - medical camps, eye camps, cancer detection camps,
 health awareness classes, rehabilitation measures for HIV affected
 people, Assistance to students - which includes distribution of
 uniforms, school bags, notebooks, umbrellas and other study materials,
 Assistance to poor homes, old age homes and orphanages, Welfare
 measures for disabled people.
 
 The social circles also conduct socially relevant programs ike
 observance of Independence Day, Republic Day, No- Tobacco Day, World
 Environment Day, World AIDS Day National Blood Donation Day, World
 Palliative Care Day World Disabled Day, World Alzheimers Day, National
 Youth Day, National Day of Girl Child, Anti TB campaign etc.
 International Womens Day, World Health Day Farmers Day etc.
 
 Bank has donated ambulances and vehicles to M/s Pazhassiraja Charitable
 Trust, Kozhikode, Bethany Trust,
 
 Mumbai, Akshaya Patra Foundation, Bangalore, Bethsaida Rehabilitation
 and Training Centre, Nilamel, Devaki Warrier Memorial Womens Studies
 and Empowerment Centre, Thiruvananthapuram and Abhayam Tripunithura.
 Apart from these, Bank has donated funds for managing tribal schools,
 SOS Childrens Villages of India, Aluva and M S Swaminathan Foundation,
 Chennai.
 
 The social circles attached to branches provided bed sheets, blankets,
 dress materials, beds, pillow covers and other essential items to the
 inmates of poor homes, orphanages & geriatric centres. Apart from this,
 certain branches have donated washing machines, emergency lamps,
 grinders and other equipments to these organisations.
 
 22.  Sports and Games
 
 22.1 The Bank enjoys the privilege of having many talented sportsmen in
 its rolls. The Bank has very active Cricket and Football teams which
 have brought laurels to it over the years. This year also Banks
 Football and Cricket Teams won many matches/tournaments and generated
 wide media coverage for the Banks name throughout the country. During
 the year 5 players each were recruited for the Banks Football and
 Cricket teams
 
 22.2 The Banks Cricket team has participated in various All India/All
 Kerala tournaments. The team won 7 Cups/ Tournaments. Many of the
 banks players were selected to represent Kerala State in the Ranji
 Trophy.
 
 22.3 The Senior Football Team won the Thiruvananthapuram District Super
 Division League by winning all the six matches it has played. The team
 finished second in the All-Kerala State Championship held at Thrissur.
 Six of the players were selected to the Kerala State Team to represent
 in the Santhosh Trophy. As a proactive measure to have a feeder line,
 the Bank supports a Junior Football Team, consisting of school/college
 going children, who won the Thiruvananthapuram District D division
 league matches and qualified for the C division matches during 2011.
 
 23.  Changes in the Board of Directors
 
 23.1 During the course of the financial year 2010-11, there were 8
 changes in the Board of Directors.
 
 1. Shri P Pradeep Kumar, Managing Director appointed under Clause (aa)
 of sub-section (1) of Section 25 of the State Bank of India (Subsidiary
 Banks) Act 1959
 
 with effect from 9th September 2010 in place of Shri A K Jagannathan,
 Managing Director, who retired on attaining superannuation, as at the
 close of business on 30th April 2010.
 
 2.  Shri K Muraleedharan Pillai, Workmen Director appointed under
 Clause (ca) of sub-section (1) of Section 25 of the State Bank of India
 (Subsidiary Banks) Act 1959, with effect from 19th July 2010.
 
 3.  The tenure of Dr Srinagi B Rao appointed under Clause (c) of
 sub-section (1) of Section 25 of the State Bank of India (Subsidiary
 Banks) Act1959 ended on 31st October 2010.
 
 4.  Shri C Rajkumar, Officer Employee Director appointed under Clause
 (cb) of sub-section (1) of Section 25 of the State Bank of India
 (Subsidiary Banks) Act 1959, with effect from 1st October 2010 in place
 of Shri P V Sivasankara Pillai, whose tenure expired on 29th September
 2010.
 
 5.  Shri B Ramesh Babu, SBI Official Director appointed under Clause
 (c) of sub-section (1) of Section 25 of the State Bank of India
 (Subsidiary Banks) Act 1959 with effect from 25th December 2010 in
 place of Shri S A Thimmiah, who resigned from the Board on 24th
 December 2010 on his transfer from Associate Banks Department of State
 Bank of India, Corporate Centre, Mumbai to SBI, Local Head Office,
 Chennai.
 
 6.  Dr J Sadakkadulla, RBI nominee Director appointed under Clause (b)
 of sub-section (1) of Section 25 of the State Bank of India (Subsidiary
 Banks) Act 1959, with effect from 3rd January 2011 in place of Shri K C
 Bandyopadhyay.
 
 7.  Shri C N Venugopalan, Non–Official Director, nominated by State
 Bank of India, under clause (c) of sub-section (1) of Section 25 of the
 State Bank of India (Subsidiary Banks) Act 1959, with effect from 11th
 January 2011.
 
 8.  Shri T Balakrishnan and Shri K T Rajagopalan were elected as
 Directors under clause (d) of sub-section (1) of Section 25 of the
 State Bank of India (Subsidiary Banks) Act 1959, with effect from 1st
 February 2011, by the shareholders at the General Meeting held on 31st
 January 2011 in place of Shri K Thanu Pillai and Shri A Sethumadhavan,
 Directors whose tenure ended on 31st January 2011.
 
 23.2 The Board of Directors welcome Shri. P Pradeep Kumar, Shri. K
 Muraleedharan Pillai, Shri. C Rajkumar, Shri.  B Ramesh Babu, Dr. J
 Sadakkadulla, Shri. C N Venugopalan, Shri. T Balakrishnan and Shri. K T
 Rajagopalan as Directors of the Bank.
 
 23.3 The Board of Directors place on record their appreciation and
 thanks for the valuable services rendered by Shri. A.K. Jaganathan,
 Shri. P.V. Sivasankara Pillai, Dr. (Smt.) Srinagi B Rao, Shri.
 S.A.Thimmiah, Shri.  K.C.Bandyopadhyay, Shri. K.Thanu Pillai and Shri.
 A.Sethumadhavan during their tenure as Directors of the Bank.
 
 24. STATUTORY AUDIT
 
 M/s. Saha Ganguli & Associates, Kolkata, M/s. Ramanatham & Rao,
 Hyderabad, M/s Jain & Jain, Mumbai, M/s Jagdish Chand & Co, New Delhi,
 M/s B.V.Rao & Co, Vishakhapatanam and M/s Sridhar & Co,
 Thiruvananthapuram were appointed as Statutory Auditors of the Bank for
 the year 2010-11 by State Bank of India, with the approval of the
 Reserve Bank of India. The Board of Directors sincerely appreciate the
 valuable suggestions offered and the excellent support and cooperation
 extended by the Statutory Auditors for the completion of the audit well
 in time.
 
 25. ACKNOWLEDGEMENTS
 
 The Board of Directors gratefully acknowledge the valuable advice and
 support extended by the Ministry of Finance, Government of India ,
 Reserve Bank of India, State Bank of India and the cooperation and
 support extended by the Financial Institutions, Stock exchanges and
 Correspondents. The Board also wishes to place on record its sincere
 appreciation of the excellent support, goodwill and patronage received
 from the esteemed customers and shareholders, the support and
 cooperation extended and contributions made by the members of staff -
 award and supervising. The Board also places on record its appreciation
 for the contribution made by the Employees Union and Officers
 Association.
 
 By Order of the Board,
 
 P PRADEEP KUMAR 
 Managing Director