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Indian Overseas Bank

BSE: 532388 | NSE: IOB |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE565A01014 | SECTOR: Banks - Public Sector

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Annual Report

For Year :
2019 2017 2016 2015 2014 2013 2012 2011 2010

Director’s Report

The Board of Directors has pleasure in presenting the Annual Report together with Audited Balance Sheet and Profit & Loss Account of the Bank for the year ended 31st March, 2017.

Global Business Performance

The Indian economy is growing strongly and remains a bright spot in the global landscape. The halving of global oil prices that began in late 2014 boosted economic activity in India, further improved the external current account and fiscal positions, and helped lower inflation. In addition, continued fiscal consolidation, by reducing government deficits and debt accumulation, and an anti-inflationary monetary policy stance have helped cement macroeconomic stability.

The government has made significant progress on important economic reforms, which will support strong and sustainable growth going forward. In particular, the upcoming implementation of the goods and services tax, which has been in the making for over a decade, will help raise India’s medium-term growth to above 8 percent, as it will enhance the efficiency of production and movement of goods and services across Indian states. However, a key concern for India is the health of the banking system, which is still dealing with a large amount of bad loans, and also heightened corporate vulnerabilities in several key sectors of the economy.

As a result, the Bank continued its efforts towards rebalancing its Balance Sheet under review year also. The Bank reduced the concentration of Bulk deposits and stayed away from large scale lending during the year. As a result, the Global Business level stood at Rs.3,68,118 crore as on 31st March 2017 against Rs. 3,97,241 crore as on 31st March 2016. The global deposits and gross advances stood at Rs.2,11,343 crore and Rs.1,56,776 crore respectively as on 31st March 2017 against Rs. 2,24,514 crore and Rs. 1,72,727 crore respectively as on 31st March 2016. The demonetization gave much needed boost to the low cost deposit profile of the Bank. The Bank also went ahead with reducing the dependence on bulk deposits to reduce the concentration risk and to have a stable deposit profile. The larger focus lied towards curtailing the NPAs with concerted efforts towards containing the fresh slippages level along with recoveries from the existing NPAs. The Banks new CBS platform has been stabilized and is currently poised towards leveraging the benefits of the new software version.

Financial Performance

The overall efficiency of the Bank has seen substantial improvement during the year under review. This has helped the Bank to report a higher global operating profit of Rs.3,650 crore in 2016-17 compared to Rs.2,885 crore in 2015-16. It may also be noted that the higher level of efficiency has been obtained with a rebalanced business levels in comparison to previous years. Even though the gross NPA level has increased over the year, the growth % has been substantially brought down in comparison to the previous year. The Gross NPAs stood at Rs.35,098 crore for March 2017 as against Rs. 30,049 crore in March 2016. The resultant higher provision requirement of Rs.7,067 crore during the year forced the Bank to report a Net Loss of Rs.3,417 crore for the year. The Bank had reported Rs. 2,897 crore of loss during 2015-16.

Income and Expenditure Analysis

The year under review focused mainly on efficiency in operations and had put in place various strategies towards cost reduction at all levels. The Bank continued its efforts to reduce the bulk deposits contain fresh slippages, reduce the administrative expenses.

The domestic CASA deposits stood at Rs.75,446 crore as on 31st March 2017 as against Rs. 63,609 crore as on 31st March 2016. The CASA% stood higher at 36.78 % as on 31st March 2017 as against 29.10% as on 31st March 2016.

The higher level of CASA and reduction of the bulk deposits helped the Bank to reduce the domestic Cost of deposits which ended at 6.32% for FY 2016-17 as against 7.28% in FY 2015-16. RBI had reduced Repo rates by 50 basis points during the period under review which also helped in reducing the card rates in a gradual manner.

The Bank’s one year MCLR rate which stood at 9.70% as of 1st April 2016 was brought down to 8.65 % during the review period in line with the industry trend. Further, the incremental NPAs had higher impact on the revenues. As a result of the above factors, the yield on domestic advances came down to 8.92% for FY 2016-17 as against 9.87% in the previous year.

The domestic yield on investments was maintained at 7.36% for the whole year 2016-17 compared to 7.41% in 2015-16. The Bank was able to maintain the global Net interest margin reasonably at 2.03% in 2016-17 as against 1.94%. The Bank maintained a Provision Coverage Ratio of 53.63 % for FY 2016-17 as against 47.39% for FY 2015-16.

Capital Raised during 2016-17

The Bank issued 9,17,48,448 equity shares of Rs.10/- each for cash at issue price of Rs.28.55 per equity share (including premium of Rs.18.55 per equity share) aggregating up to Rs.261.94 crore on QIP basis and 55,57,14,797 equity shares of Rs.10/- each for cash at issue price of Rs.27.91 per equity share (including premium of Rs.17.91 per equity share) aggregating upto Rs.1,551 crore to Government of India on Preferential Basis. Hence, the paid up capital of the Bank has increased from Rs.1807.27 crore to Rs. 2454.73 crore. Government of India’s shareholding has increased from Rs.1397.33 crore (77.32%) to Rs.1953.04 crore (79.56%) and the Public Shareholding stood at Rs.501.69 crore (20.44%).

Authorized Capital

As on 31st March 2017, the Authorized Capital of the Bank is Rs.10,000 crore which was increased from Rs.3000 crore vide GOI notification dated 27th Feb 2017.

Capital Adequacy Ratio

The Bank’s capital adequacy ratio as on 31st March 2017 stood at 10.50 % as per Basel III norms.

Branch Network

During the year under review, the Bank opened 9 branches across the country. Out of these, 5 branches (55.55%) are located in Rural and Semi Urban centres, of which 3 branches are located in Unbanked Rural centres.

As on 31st March 2017, the Bank had 3,373 domestic branches, as against 3,397 branches as on 31st March 2016, comprising of 922 rural branches (27.33%), 1001 Semi Urban branches (29.67%), 692 Urban branches (20.51%) and 758 Metropolitan branches (22.47%). Besides, the Bank has 7 Zonal Offices, 49 Regional Offices, 4 Extension Counters, 20 Satellite Offices, 3 City Back Offices, 18 MSME Processing Centres and 6 Inspectorates. During the year under review, the Bank has closed 33 branches with a view to rationalize administrative costs.

Corporate Governance

Corporate Governance reflects the built in value system of the Bank in conducting its day to day affairs. The Bank lays emphasis on ensuring that, structures and processes are put in place to help in compliance of the government responsibilities.

IOB - Code of Conduct for Prohibition of Insider Trading, 2015

IOB Code of Conduct for Prohibition of Insider Trading, 2015 regulates monitors and report trading by the designated persons of the Bank.

Securities and Exchange Board of India - Listing Obligations and Disclosure Requirements Regulations, 2015 (LODR)

As per SEBI (LODR),

- The Bank is providing remote e-voting facility to its shareholders, in all Annual General Meetings/ Extraordinary General Meetings

- The code of conduct is applicable to all members of the Board and the Senior Management (i.e., General Managers of the Bank).

- The Bank is also submitting a quarterly compliance report on Corporate Governance to the Audit Committee of the Board and to Stock Exchanges.

- The Bank is submitting Quarterly Investor Grievance Report to the BSE Limited and National Stock Exchange Limited, where Bank’s shares are listed.

Investor Education & Protection Fund (IEPF)

Ministry of Corporate Affairs (MCA), Government of India has advised the Bank the process of transfer of unpaid dividend amount to the Central Government. Accordingly, Unpaid Dividend amount pertaining to 2008-09 has been transferred to IEPF by the Bank on 5th August 2016 and complied with the Government of India guidelines. The unpaid Dividend data pertaining to the years 2009-10 to 2013-14 is ported in MCA website and is also available at

Bank is complying with all guidelines/regulations laid down by Regulatory authorities and Government of India. Bank regularly redresses the shareholders grievances without any time delay.

Board of Directors

Dr. Jai Deo Sharma, Officer Employee Director completed his three year term on 1st May 2016. Shri R.Koteeswaran, Managing Director & Chief Executive Officer retired on attaining superannuation on 30th June 2016. Dr.Alok Pande, Govt. Nominee Director demitted office on 21st July 2016. Shri Pawan Kumar Bajaj, Executive Director demitted office on 9th August 2016. Shri Atul Agarwal, Executive Director, retired on superannuation on 30th Sept 2016. Shri Chinnaiah, Smt. S.Sujatha and Shri A.B.D.Badushas, Parttime Non- Official Directors completed their three year terms on 12th Nov 2016, 4th Dec 2016 and 11th Dec 2016 respectively. Shri R. Sampath Kumar, Workmen Employee Director, completed his three year term on 23rd Jan 2017.

Ms.Annie George Mathew has been nominated as Government Nominee Director with effect from 22nd July 2016. Shri K.Raghu, has been nominated as Chartered Accountant Director for a period of three years from 26th July 2016 to 25th July 2019. Shri Vishnukumar Bansal, has been appointed as Additional Director from 8th August 2016 to 7th August 2018. Shri R. Subramaniakumar has been appointed as Executive Director of the Bank from 29th September 2016 to 21st Jan 2019. He has been entrusted the additional charge of MD & CEO for a period of 3 months from 11th November 2016 to 10th February 2017 and for a period of another 3 months from 28th February 2017 to 27th May 2017. Shri T.C.A. Ranganathan has been appointed as Non Executive Chairman from 16th Feb 2017 to 15th Feb 2020. Shri K. Swaminathan, has been appointed as Executive Director of the Bank from 17th Feb 2017 to 16th Feb 2020.

The Board of Directors places on record their appreciation for the valuable contributions made by the erstwhile Directors and welcomes the new Directors.


The Board of Directors are grateful for the valuable guidance and support received from the Government of India, Reserve Bank of India, Securities and Exchange Board of India (SEBI), Stock Exchanges, State Governments, Financial Institutions and all Overseas Regulators. The Board of Directors acknowledge with thanks the valued Customers, Employees Union, Officers Association, domestic and international banking group, the shareholders & other stake holders for their valued support and continued patronage with the Bank.

The Board also wishes to place on record its profound appreciation for the valuable contribution of the Bank’s Staff at all levels and looks forward to their continued involvement with commitment towards achieving the future goals.

For and on behalf of the Board of Directors


17th May, 2017 Managing Director & Chief Executive Officer

Director’s Report