The Directors have pleasure in presenting the Seventh Annual Report of
 your Bank together with the audited Balance Sheet, Profit and Loss
 Account and the report on business and operations of the Bank for the
 year ended March 31, 2011.
 
 Financial Performance
 
                                                       (Rs. in crore)
 
 Particulars                         April 1, 2010     April 1, 2009
                                 to March 31, 2011  to March 31, 2010
 
 Deposits                               45,939            26,799
 
 Borrowings                              6,691             4,749
 
 Advances                               34,364            22,193
 
 Total Assets-Liabilities               59,007            36,382
 
 Net Interest Income                     1,247               788
 
 Non-Interest Income                       623               576
 
 Operating Profit                         1,190               864
 
 Provisions and Contingencies               98               137
 
 Profit before Tax                        1,092               727
 
 Provision for taxes                       365               249
 
 Net Profit                                 727               478
 
 Add: Surplus-(Defcit) brought forward 
 from last period                          673               406
 
 Amount available for appropriation      1,400               884 
 
 Appropriations
 
 Statutory Reserve under Section 17 of 
 the Banking Regulation Act, 1949          182               119
 
 Capital Reserve                             2                32
 
 Investment Reserve                         -                 -
 
 Proposed Dividend and Ta x thereon        101                60
 
 Surplus carried to Balance Sheet        1,115               673 
 
 Key Performance Indicators
 
 Net Interest Margin                      2.9%              3.1%
 
 Return on Annual Average Assets          1.5%              1.6%
 
 Return on Equity                        21.1%             23.7%
 
 Cost to Income Ratio                    36.3%             36.7%
 
 Non-Interest Income to Net Revenues     33.3%             42.2%
 
 Your Bank posted net revenues (Net Interest Income and Other Income) of
 Rs. 1,870 crore and Net Profit of Rs. 727 crore for the Financial Year
 2010-11. Net Revenues and Net Profit for the Financial Year 2009-10 was
 Rs. 1,364 crore and Rs. 478 crore respectively. Appropriations from the Net
 Profit have been effected as per the table on the earlier page. Please
 refer to the section on Financial and Operating Performance in
 Management Discussion and Analysis for a detailed analysis of financial
 data.
 
 Dividend
 
 In view of the excellent financial performance of your Bank and
 encouraging future outlook as well as the objective of rewarding
 shareholders with cash dividends while retaining capital to maintain a
 healthy Capital Adequacy Ratio, to support future growth, the Board of
 Directors have recommended a Dividend at a rate of Rs. 2.50-- per equity
 share.
 
 Capital Raising and Capital Adequacy Ratio (CAR)
 
 The paid-up capital of your Bank increased to Rs. 347.15 crore as at
 March 31, 2011 from Rs. 339.67 crore as at March 31, 2010, post exercise
 of 74,79,855 employee stock options during the Financial Year 2010-11.
 
 Your Bank also raised a sum of Rs. 225 crore by way of Tier I Perpetual
 Bonds, Rs. 640 crore by way of Upper Tier II capital and Rs. 306.40 crore
 by way of Lower Tier II Subordinated Bonds during the Financial Year
 2010-11. Your Bank has utilised the proceeds of the issue of Tier I
 Perpetual Bonds and Upper & Lower Tier II capital to augment the
 long-term capital resources and to enhance the CAR for successfully
 implementing its growth plans.
 
 In line with the RBI circular on Capital Adequacy Framework, your Bank
 has computed capital charge for operational, market and credit risk and
 its CAR as per Basel II accord as at March 31, 2011.
 
 Your Bank is well capitalised with a CAR (as per Basel II) of 16.50 %
 as at March 31, 2011; of which Tier I Capital Ratio was 9.65% and Tier
 II Capital Ratio was 6.85%.
 
 Employees Stock Option Scheme
 
 Your Bank has instituted Stock Option Plans to reward and retain
 employees and to enable them to participate in your Banks future
 growth and financial success. The Stock Option Schemes also enable the
 Bank to hire the best talent for its senior management and key
 positions. The Bank has fve Employee Stock Option Schemes viz.  Joining
 Stock Option Plan I (JSOP I), Joining Employee Stock Option Plan II
 (JESOP II), Joining Employee Stock Option Plan III (JESOP III), YBL
 ESOP (consisting of two sub schemes JESOP IV-PESOP I) and YBL JESOP
 V-PESOP II (Consisting of three sub schemes JESOP V- PESOP II-PESOP II
 -2010).
 
 The Employee Stock Option Plans are administered by the Board
 Remuneration Committee of the Bank.
 
 Directors
 
 Mr. Sipko Schat, Nominee Director of Rabobank had resigned from the
 Board of Directors of the Bank with effect from June 22, 2010 on
 account of partial dilution of holding by Rabobank and consequently his
 alternate, Mr. Berend Du Pon was also deemed to vacate offce
 simultaneously.
 
 In accordance with the provisions of the Companies Act, 1956 and the
 Articles of Association of the Bank, Mr. Wouter Kolff and Mr. Bharat
 Patel shall retire by rotation at the ensuing Annual General Meeting
 and being eligible, offer themselves for re-appointment.
 
 Corporate Governance
 
 Your Bank is committed to achieving the highest standards of Corporate
 Governance. Accordingly, your Board functions as trustees of the
 shareholders and seeks to ensure that the long-term economic value for
 its shareholders is achieved while balancing the interest of all the
 stakeholders.
 
 A separate section on Corporate Governance standards followed by your
 Bank as stipulated under Clause 49 of the Listing Agreement with the
 Stock Exchanges is enclosed as an Annexure to this report.
 
 Auditors
 
 M-s. B S R & Co., Chartered Accountants will retire at the conclusion
 of the forthcoming Annual General Meeting and are eligible for
 re-appointment, subject to the approval of the Reserve Bank of India.
 Members are requested to consider their re-appointment on a
 remuneration to be decided by the Board or Committee thereof for the
 ensuing Financial Year i.e. 2011-12.
 
 Statutory Disclosures
 
 The statement containing particulars of employees as required under
 Section 217 (2A) of the Companies Act, 1956 forms part of this report.
 In terms of Section 219(1)(b)(iv) of the Act, the same is open for
 inspection at the Registered Offce of your Bank. Copies of this
 statement may be obtained by the members by writing to the Company
 Secretary of your Bank.
 
 The provisions of Section 217(1)(e) of the Companies Act, 1956 do not
 apply to your Bank. Your Bank is constantly pursuing its goal of
 technological upgradation in a cost effcient manner for delivering
 quality customer service.
 
 Directors Responsibility Statement
 
 Pursuant to the requirement under Section 217(2AA) of the Companies
 Act, 1956, with respect to the Directors Responsibility Statement, it
 is hereby confrmed that:
 
 (I) in the preparation of the accounts for the Financial Year ended
 March 31, 2011, the applicable accounting standards have been followed
 along with proper explanation relating to material departures;
 
 (II) the Directors have selected such accounting policies and applied
 them consistently and made judgements and estimates that were
 reasonable and prudent so as to give a true and fair view of the state
 of affairs of the Bank as at March 31, 2011 and of the Profit of the
 Bank for the year under review;
 
 (III) the Directors have taken proper and suffcient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of the Companies Act, 1956 for safeguarding the assets of
 the Bank and for preventing and detecting fraud and other
 irregularities; and
 
 (IV) the Directors have prepared the annual accounts of the Bank on a
 going concern basis.
 
 Acknowledgement
 
 Your Directors take this opportunity to express their deep and sincere
 gratitude to the customers of the Bank for their confdence and
 patronage, as well as to the Reserve Bank of India, Government of India
 and Regulatory Authorities for their co-operation, support and
 guidance. Your Directors would like to express a deep sense of
 appreciation for the commitment shown by the employees in supporting
 the Bank in its endeavour to create the BEST QUALITY BANK OF THE WORLD
 IN INDIA. Your Directors would also like to express their gratitude to
 the members for their trust and support.
 
                      For and on behalf of the Board of Directors
 
                        Rana Kapoor                   S. L. Kapur
            Managing Director & CEO        Non-Executive Chairman
 
 Place: Mumbai
 Date: April 20, 2011