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South Indian Bank Ltd.

BSE: 532218 | NSE: SOUTHBANK |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE683A01023 | SECTOR: Banks - Private Sector

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Annual Report

For Year :
2019 2018 2017 2016 2015 2014 2013 2012 2011

Director’s Report

To the Members,

The Board of Directors is pleased to place before you, the 91st Annual Report of the Bank along with the Audited Balance Sheet as at March 31, 2019, the Profit and Loss Account and the Cash Flow Statement for the year ended March 31, 2019.


The performance highlights of the Bank for the financial year ended March 31, 2019 are as follows:

Key Parameters

Rs. in crore






Gross Advances



Total Gross Business



Operating Profit



Net Profit



Capital & Reserves



Capital Adequacy (%) - Basel-III



Earnings Per Share (EPS)* :


(a) Basic EPS (in Rs.)



[face value Rs.1/-]


(b) Diluted EPS (in Rs.)



[face value Rs.1/-]


Book Value per Share (in Rs.)



[face value Rs.1/-]


Gross NPA as % of Gross Advances



Net NPA as % of Net Advances



Return on Average Assets (%)



business achievements:

The Bank has achieved a Total Business of Rs.1,44,056.04 crore, consisting of Deposits of Rs.80,420.12 crore and Gross Advances of Rs.63,635.92 crore as on March 31, 2019.


The Total Deposits of the Bank has increased from Rs.72,029.59 crore as on March 31, 2018 to Rs.80,420.12 crore registering a growth of 11.65%.

The break-up of the deposits as on March 31, 2019 is as under:


Amount (Rs. in crore)

% to total Deposits

Current Deposits



Savings Deposits



Term Deposits






The Bank during the year focused on Advances & CASA.

CASA has grown from Rs.17,141.74 crore as on March 31, 2018 to Rs.19,467.15 crore as on March 31, 2019, with a growth rate of 13.57%. The savings bank deposits grew by 14.56% and current deposits grew by 8.97% on a year on year basis.

The Bank has accorded priority to meaningful financial inclusion during the period under reporting while opening new deposit relationships.


During the year, the gross advances of the Bank registered a growth of 15.47%, to touch Rs.63,635.92 crore. In spite of subdued general economic activity, the Bank could do well in the retail segment including MSME.

The Bank is presently focusing on the retail, agriculture and MSME sectors for growth in advance. Retail segment which accounts for 29% of the Loan book registered a growth of 33.88% during the year, while MSME, which accounts 24% of the loan book recorded an annual growth of 16%. The Bank is however moving steadily ahead in its strategy of granularizing and derisking the Balance Sheet.

The Bank has implemented various measures to ensure high credit quality through complete centralization of credit sanction through the new centralized processing centre viz Retail Banking Centralized Processing Centre, Mid-Corporate Centralized Processing Centre and Wholesale Banking Centralized Processing Centre. All major credit sanctions have been brought under various credit committee set up for the purpose.

The Bank is now focusing on the growth of retail lending segment with a view to transforming the Bank into a Retail Banking Power House by 2020. Accordingly, the thrust is given to retail loan products such as Housing loan, Vehicle loan, Gold loan and MsMe loans.

The Bank has taken various steps to achieve the projected growth without compromising on credit quality and pursuing stringent credit underwriting and administration standards.

During the year, the Bank has exceeded the regulatory prescription on the Priority Sector & Agricultural Sector. The Bank could even sell off the excess priority sector advances, thereby generating additional revenue.

Break-up of exposure under Priority Sector as on March 31,2019 is furnished below:


Amount (Rs. in crore)

Agriculture & Allied activities (Net of PSLC)




Other Priority Sector


Total Priority Sector


PSLC (General PS)




Roll out of a centralised credit monitoring mechanism was another milestone in the improvement of credit administration, which has resulted in continuous monitoring of accounts above Rs.5.00 crore.

Yet another milestone was the setting up of a centralised collection hub, which ensures continuous follow up of potential impairments, follow up through SMS, telecalls, etc. to enable the Bank to be more proactive in the retail segment.

financial performance


The net interest income of the Bank has increased by Rs.54.18 crore (2.76%) from Rs.1,965.52 crore to Rs.2,019.70 crore. Non-interest income was Rs.726.21 crore during the year as against ' 837.25 crore in previous year. The decrease was mainly on account of subdued treasury performance due to the adverse market conditions.

The Operating Profit for the year under review was Rs.1,238.98 crore before taxes and provisions as against Rs.1,480.79 crore for the year 2017-18 mainly on account of lower non-interest income and increased employee cost including provision for expected wage revision. Provision other than taxes and contingencies decreased by Rs.122.42 crore (12.48%) from Rs.980.90 crore. The Net profit for the year was Rs. 247.53 crore as compared to a net profit of Rs.334.89 crore during the previous year. The profit available for appropriation was Rs.601.56 crore as per details given below:

(Rs. in crore)

Profit before depreciation, taxes and





Less: Provision for NPI



Provisions for Non-Performing Assets



Provision for FITL



Provision for Depreciation on Investments



Provision for Income Tax



Provision for Standard Assets



Provision for Restructured Assets



Provision for Other Impaired Assets



Provision for Un-hedged Forex Exposure



Provision for Non-Banking Asset Provision



Net profit



Brought forward from previous year



Profit available for appropriation




Transfer to Statutory Reserves



Transfer to Capital Reserves



Transfer to Investment Fluctuation Reserve



Transfer to Special Reserve



Transfer to Special Reserve u/s 36(1)(viii) 1

(FY 15-16)


of Income Tax Act pertaining to earlier years including corresponding DTL J

(FY 16-17)


Dividend Paid for FY 17-18



Tax on Dividend Paid for FY 17-18



Balance carried over to Balance Sheet




The Board of Directors recommends a dividend of 25% (tax-free in the hands of shareholders other than Individuals whose dividend income is above Rs.10 lakh), i.e., @ Rs.0.25 per Equity Share of face value of Rs.1/- per share.

capital & reserves

The Bank's issued and paid up capital increased to Rs.180.97 crore as on March 31, 2019.

During the Financial Year 2018-19, 8,51,071 stock options were exercised by the eligible employees granted under the Employee Stock Option Scheme.

The Bank has successfully issued Non-Convertible, Redeemable, Unsecured, Basel III compliant Tier II Bonds worth Rs.250.00 crore during Q4 of FY 2018-19. At the time of issue, CARE had assigned a rating of 'CARE A+' (Outlook: Stable) and India Ratings had assigned a rating of 'IND A+' (Outlook: Stable).

The capital plus reserves of the Bank has moved up from Rs.5,241.22 crore to Rs.5,335.33 crore on account of exercise of options and plough back of profits during the current financial year.


The Capital to Risk Weighted Assets Ratio (CRAR) of the Bank as on March 31, 2019 according to Basel III guidelines is 12.61 as against the statutory requirement of 10.875 (including Capital Conservation Buffer). Tier I CRAR constitutes 9.97 while Tier II CRAR works out to 2.64.

The Bank follows Standardized Approach, Standardized Duration Approach and Basic Indicator Approach for measurement of capital charge in respect of credit risk, market risk and operational risk respectively.


The Bank's shares continue to be listed on BSE Ltd. and The National Stock Exchange of India Ltd. The Bank confirms that it has paid the listing fees to all the Stock Exchanges for the year 2019-20.


The Bank has been successful in widening its network across India with 870 Branches 53 Extension counters, 1322 ATMs and 84 CRMs/CDMs. The bank has opened 18 new outlets (16 Branches and 2 Extension counters) 36 ATMs and 7 CRMs across the country during the financial year 2018-19. The branch network now covers 27 States and 3 Union Territories. During the year, the Bank had closed 18 ATMs, 1 CRM and replaced 27 ATMs with CRMs.

The Bank plans to open a maximum of 20 new outlets (Branches & Extension counters) and 25 ATMs/CRMs during the financial year 2019-20. With the opening of a Representative Office in Dubai in April 25, 2018, the Bank is now in a better position to serve its NRI customers and other stakeholders in the Middle East.


One of the major achievement during FY 2018-19 was the implementation of Loan Origination System (LOS).

The Bank has implemented an advanced LOS software as one of the major projects, to equip its Central Processing Centres to handle large volumes of proposals, to bring more transparency and control and to reduce the turnaround time (TAT) in processing the loan applications.

The implementation process was carried out in a phased manner and as on date and the Bank has carried out full-fledged implementation of LOS software at its Mid Corporate Central Processing Centre (MCCPC). All loan proposals including modification and renewals are handled through the LOS application and MCCPC is now functioning as a paperless office.

At the Retail Banking Central Processing Centre (RBCPC), the Bank has rolled out four retail products viz. Housing loan, Personal loan, Education loan and Vehicle loan on PAN INDIA level through the above process. LOS for Mortgage loan, SME & Agri module is under development.

Trade Receivable Discounting system (TReDs)

From FY 2018-19 onwards the Bank is actively participating in Trade Receivable Discounting System (TReDS) an online electronic institutional mechanism introduced by RBI, for facilitating the financing of trade receivables of MSMEs. In this respect, the Bank has joined hands with two of the RBI authorised platform providers of TReDS, i.e. Mynd Solutions Private Limited & A-TREDS.

Trade Finance Central Processing Centre (TFCPC)

Another milestone was setting up of Trade Finance Central Processing Centre (TFCPC). It is an exclusive vertical under Credit Department to establish a professional, proactive and vibrant Trade Finance operational vertical (both Forex and Domestic). With the introduction of TFCPC, the Bank has centralised all Outward remittances and Trade Finance activities and thus streamlined the related procedures.


During the FY 2018-19, the Bank has introduced eight new loan products, of which most of them were launched to give thrust to MSME sector.

In addition to the above, the Bank has revamped 'Supply Chain Finance' which is supported by a robust Supply Chain Management Solution, which could be accessed via URL by vendors, dealers and corporates along with the bank user for real time entry, monitoring and disbursement of credits.


Bank's gross investment portfolio stood at Rs.19,524.98 crore as on March 31, 2019 compared to Rs.18,750.57 crore as on March 31, 2018, showing an increase of 4.13%. Investment Deposit ratio declined from 26.03 as on March 31, 2018 to 24.28 as on March 31, 2019. This drop came in the wake of rising growth in advances, falling regulatory SLR requirement and portfolio readjustment in the scenario of hardening interest rates.

Profit on sale of investment for the FY 2018-19 stood at Rs.119.91 crore. Total interest income from investment for the year was Rs.1286.14 crore. Yield on Investment (Profit + interest earned to average investments) during the FY 2018-19 was 7.33%. The financial markets were highly volatile during the FY 2018-19, with USD/INR and crude oil prices making new high during the period. The G sec yields and money market rates experienced wide fluctuations due to mounting fiscal stress, high crude prices, tight liquidity conditions and depreciating exchange rate.

Globally the US Federal Reserve had begun the balance sheet normalization process and had commenced increasing the FED rates in 2018. However, the concerns of slowing global growth may prompt central bankers across the world to ease the rates and adopt an accommodative stance. The Indian financial markets would also take cues from RBI's monetary policy stance, movement in crude prices, the election outcome and stability of the upcoming Central Government and size and frequency of liquidity injection measures such as USD/INR swaps, OMOs etc.


During the year 2018-19, as a result of focused and sustained efforts for early recovery of NPAs, through prompt and effective measures under the SARFAESI Act, follow up of recovery cases pending before DRTs and Civil Courts, one time compromise settlements of accounts, asset sale to ARC, etc., Bank could recover NPAs to the extent of Rs.506.10 crore (recovery including up-gradation Rs.265.16 crore), as against the target of Rs.500.00 crore. Special thrust was given to selection and underwriting of credit, effective due diligence and improvement in credit administration to ensure improvement in the quality of assets.

During the year, the Gross NPA of the Bank has increased from Rs.1,980.30 crore as on March 31, 2018 to Rs.3,131.67 crore as on March 31, 2019 and Net NPA increased from Rs.1,415.80 crore as on March 31, 2018 to Rs.2,163.62 crore as on March 31, 2019. In spite of the prompt and effective credit risk management and recovery measures, the fresh slippages of accounts from the corporate sector (mostly legacy accounts), resulted in the increase of gross NPA to Rs.3,131.67 crore. In terms of percentages, the GNPA increased from 3.59% as on March 31, 2018 to 4.92% as on March 31, 2019 and Net NPA increased from 2.60% as on March 31, 2018 to 3.45% as on March 31, 2019. As a result of Bank's strong focus on recovery as well as the initiatives taken in underwriting credit, the NPA level is expected to moderate.


Digitization and Innovative technologies has brought about remarkable transformation in the banking sector. The global banking sector is becoming more strategically focused and technologically advanced to respond to customer expectations and new business models.

The Bank has grown with effective use of the technology by realigning technology and business in order to ensure better growth in present competitive environment. A great deal of emphasis is being placed by the Bank on digitizing core business processes and reassessing organizational structures and internal talent to be better prepared for facilitating enhanced customer satisfaction. The Bank has streamlined its Information Technology organization structure by setting up Digital Banking Department and IT Operations Department. Digital Banking Department has been focusing on the innovation, improvement and implementation of major business oriented projects on the digital front viz., ATM, Net Banking, Mobile Banking and other emerging technologies such as Block chain, AI etc.. IT Operations department provides highest level of integrity of internal applications and furnishes infrastructural needs adequately capacitated to provide a seamless platform for growth of business operations. The last year digital transaction growth was Adoption of new technologies and embracing innovation has been one of the forefront policies of South Indian Bank and it's IT Team. Today the Bank has a robust technology framework which caters to all customer requirements and provides quick turnaround time.

The bank offers the best in class technology services to cater to the diverse requirements of our retail clientele. The technology stack includes well designed customer touch points, and robust back end systems. We are enriching our digital channels with lot of innovative and value added services for better customer experience.

Retail Customers:

-    Internet Banking - Sibernet

-    Mobile Banking - Mirror +

-    Variants of VISA, Mastercard & Rupay Debit Cards

-    ATM, Cash Recyclers (CRM) other Value added services

-    Call Centre Solution catering to customers 24/7

Corporate Customers:

-    Internet Banking - Sibernet

-    Host to Host Integration facility (Hi-Hi Banking)

-    Supply Chain Management Solution

-    Debit cards to the business customers

-    API Banking

-    Remote Cheque Printing

-    FeeBook

-    E-Academia

There has been a growth of 131% in Mobile Banking activation, 35% growth in Internet Banking Corporate activation and 25% growth in Internet Banking Retail activation.

Digital/Technology initiatives/solutions embarked during the year

Services/ solutions that the Bank has launched during the year:

-    Data Centre and DR Enhancement/ initiatives [DR Management, Disk based Backup solution at DC, Solaris OS Migration at DC &DR and Data Center certification]

-    e-Academia allows parents to remit fees online using Debit Card/Credit Card/Net Banking without waiting in a long queue to remit the fees of their children.

-    FEEBOOK - online event based fund management/collection portal, with a tagline 'You Decide You Collect' allows organizations/institutions/associations conducting any number of events with fees involved in it to create their own payment portals, do any modifications on their payment portal, and view the payment reports as and when required. Payments can be made through Payment Gateway solution offered by the Bank.

-    Supply Chain Finance Scheme, the Bank has introduced (1)    Vendor Finance Scheme to address financing the vendors/suppliers of raw-materials, components etc. to manufacturing companies (referred to as corporate) and (2)    Dealer Finance Scheme to finance dealers of the products manufactured by corporate.

-    Bank also offers Host to Host Integration facility (Hi-Hi Banking) which handles fund transfer in a seamless fashion by real time interface with ERP solutions of corporates. This facility is available for 365*24*7 and the clients can securely access the system from anywhere.

-    Migrated on premise e-mail solution to the cloud based email solution.

-    Optimizing infrastructure using Virtual Machines.

-    The Bank has implemented second factor authentication in CBS for branch user login to strengthen the user level login security.

-    Implementation of Straight Through Processing (STP) between CBS and SWIFT. All types of SWIFT messages are automated and inward processing of SWIFT messages has also been brought into the purview of STP

-    Implementation of automated DR management solution -Ensures that applications can be resumed from DR site during any disaster as per the defined RTO (Recovery Time Objective).

-    LOS (Loan Origination System) was introduced in the Bank in phased manner for Retail & SME loans, for scaling up of loan volumes and quick processing of loan application from centralized hubs with reduced TAT.

-    Implementation of Process Automation Solution -Automation solution for converting Non STP processes to STP to ensure Secure, seamless and automated Data Transfer across different nodes.

-    Aadhaar linking/seeding enabled across all important customer touch points.

-    Implemented NACH H2H automation mechanism by which mandate management & ACH processing is happening via STP process.

-    Fraud Risk Management (FRM) Solution for CBS & channel transactions.

-    South Indian Bank is the first bank to be certified as EMV enablement as Issuer on ATMs.

-    Lead Capture through ATMs.

-    Anti skimming solution in ATMs to safeguard ATMs and especially ATM customers from loss and fraud.

-    Introduced MasterCard Business Debit Cards.

-    Dynamic Currency Conversion Support for MasterCard International Transactions-Foreign MasterCard card holders will be able to withdraw money from our ATMs by knowing the transaction value in their home currency.

-    Introduction of Payment Gateway Service in tie-up with M/s Worldline has become an important tool for acquiring float funds and new business relationships.

-    Bharat Bill Payment Systems - BBPS which offers integrated and interoperable bill payment services to customers across geographies with certainty, reliability and safety of transactions.

-    NETC - National Electronic Toll Collection - which helps the vehicles with a RFID tag to pass through the toll plazas across the country, seamlessly.

-    Bharat QR issuing and acquiring - QR based transactions by making use of debit cards and UPI.

-    The Bank has enabled GST Payment, online loan against deposit opening, IT Returns - e filing, online Mutual Fund Service, Funds Transfer to Virtual Accounts through Internet Banking.

-    Block Chain Based Cross Border Remittance Solution, an important technology set to completely improve the remittance system and potentially assist and improvise the existing bank settlement system, and active participation on other block chain consortiums focusing on different implementation projects.

-    Digital Onboarding - CASA and Insurance. In addition to tab banking and quick opening in branches based on Aadhaar, the Bank has also introduced end to end digital onboarding for insurance products of Banks partners.

Awards and Certifications received on Technology front

-    South Indian Bank has won two technology awards during the Indian Banking Association (IBA) Technology Awards 2019.

1.    Winner - The Most Customer Centric Bank using technology

2.    Runner Up - Best payment initiatives

-    South Indian Bank has won IMC Digital Technology Awards 2018 - Award for Excellence through Digital Transformation in End User of IT - BFSI Sector for Large Enterprise.

IT Training

During the year, many training programmes had been attended by the Bank's officers in premier institutions such as IDRBT, NIBM, IBA, UIDAI to keep themselves abreast with the advancements in IT, Information Security, CRM, Databases, Operating Systems, Virtualization, Network, Mobile banking etc.

Business Continuity planning

As per BCP Policy, the Bank has already setup BCP location and DR site at Bangalore. Planned BCP drills are conducted on a half yearly basis to ensure connectivity and functionality test of critical applications. In the context of the flood which happened in Kerala during August 2018, it became necessary for us to invoke the BCP operations from BCP and DR site - Bangalore for our critical applications to continue the operations. Even though the State of Kerala was severely flooded, the Bank was able to continue with the banking services including the customer facing applications unhindered due to the joint efforts taken by IT Operations Department, Digital Banking Department and CISO Office with the necessary support from vendors. The only disruptions were in the local branches/ATMs in flood affected areas of Kerala, which were also restored back to normalcy in the earliest possible time. This BCP exercise was conducted for the first time with all critical applications switching to DR on a single day.

Information security and Risk Management

-    As banks adopt sophisticated technology to roll-out the best banking solutions to customers, they are increasingly exposed to technology risks. It is therefore imperative for each bank to work out appropriate IT risk management strategies to secure its most vital information assets and to ensure that related risk management systems and processes are strengthened for smooth and continuous banking operations.

-    IT Departments including Data Centre and DR Site are ISO 27001 certified for the implementation of Information Security Management System (ISMS). As a part of ISMS implementation, bank has prepared IS Security Policy and related IT risk management procedures.

-    The Bank also ensures that all cyber security requirements as per statutory/regulatory guidelines and best industrial practices are implemented on priority basis.

-    The organization structure is revamped with setting up of CISO Office for surveillance on the security architecture/ infrastructure and for coordinating security incident-response activities. Information Security Committee, IT Strategy Committee and the Board of Directors periodically review the cyber security posture of the Bank. The Bank has formulated Cyber Security Policy and Cyber Crisis Management Plan to provide guidance in addressing various cyber threat scenarios. The Bank has also identified various types of IT risks and the required preventive, detective and corrective cyber security controls are being implemented.

-    The Bank has ensured that Security Operation Centre (SOC) does 24*7 surveillance and keeps itself regularly updated on the latest nature of emerging cyber threats. Bank is using Security incident and event management (SIEM) monitoring tool, for the process of identifying, monitoring, recording and analyzing security events or incidents within a real-time IT environment.

-    The Bank has put in place advanced security solutions to manage any type of cyber-attacks. As part of advanced security solutions, the Bank has implemented AntiAdvanced Persistent Threat (APT) Solution, Server Protection Solution, Network Protection Solution etc. to handle variety of malicious attacks.

-    Employees are updated with the latest security threats and the best security practices.

-    The Bank provides cyber security awareness to its customers on a continuous basis through various channels like SMS/ Email/Website/Social media etc.

Gopalakrishna Committee Recommendations Management Philosophy & Measures for the effective implementation of Cyber security Framework

-    Effective measures have been taken to address the identified gaps in each area such as IT Governance, Information Security, IT Service outsourcing, IS Audit, IT Operations, Cyber Frauds, Business Continuity Plan (BCP), Customer Education and Legal issues. The IT Organization setup has been redrawn to suit the functions/roles specified in the recommendations with segregation of duties. Information Security policy is revamped incorporating various guidelines and stipulations mentioned in the report. In addition, other IT Policies such as IT Operation Policy, IT Governance Policy and IT Outsourcing Policy are also enforced.

-    IT Strategy Committee of the Board, IT Steering Committee and Information Security Committee are in place. Cyber security preparedness of the Bank is reviewed by Information security Committee, IT Strategy Committee of Board and Board of Directors on a quarterly basis.

Transaction Banking Department [TBD]

The Transaction Banking Department, which has come in to being in August 2015, undertakes the following functional operations in centralized environment with a view to bring standardization of process and procedures, scalability in line with business expansion and compliance to regulatory and statutory requirements, besides enforcement of internal controls.

Functional Division

Functional Operations Covered

Centralized CASA Opening and associated functions

Opening of CASA - SB, CD, NRI Customer Modifications Unification of Customer Accounts Account Level Modifications - Dormant Account Activation and Unfreezing Periodical KYC Updation Central KYC

Centralized Loan Opening

Opening of Loan Accounts (Fund Based) Renewals and Enhancements NPA Upgrading Capturing Risk rate/score Ensuring Collateral entries (SGMS)

Income Leakage Identification & Recovery

Payment & Settlement Operations (PSD)


PFMS - Aadhar Mapping PFMS - DBT

PFMS - WPS (Wage Protection System) CTS Operations NACH Operations

Service Operations

Debit Card Internet Banking Mobile Banking

Post Open Welcome Kit (POWK)

Support Operations

Channel Reconciliation (Debit Card, Internet Banking, IMPS, UPI, Prepaid Cards, ICD)

Audit & Compliance Function

Concurrent Audit (Channel Reconciliation and CPC functions) rectification

Ancillary Operations

ATM cash replenishment outsourcing operations

Aadhar Enrolment Operations Door Step Banking Operations Tax Cell Operations

The above centralized operations are driven through approved SOP (Standard Operating Procedure), governed by allotted Job Card/task/functions, adhering to specified TAT (Turn Around Time) leading to increased operational efficiency so as to make this centralized department as a Centre of Excellence. For TBD functions, Kochi is the primary operation centre with Coimbatore and Bangalore as the BCP centres. CTS functions are getting consolidated at CHENNAI as Primary and BANGALORE as BCP centre.

Compliance Department

The Bank has institutionalized a strong compliance culture and mechanism across the organization, pursuant to its strategic goals of transparency and trust, among all its stakeholders. The Bank has a dedicated independent Compliance Department headed by a Deputy General Manager which operates as per a well documented compliance policy for ensuring regulatory compliance, across all its businesses and operations. The key functions of the Department include tracking of regulatory updates affecting the various business verticals of the Bank, dissemination of regulatory updates to functional units, monitoring of timely implementation of regulatory instructions, review of processes from a regulatory compliance perspective, provide guidance on compliance-related matters, impart training to employees on compliance aspects, among others. The Bank is having well defined and structured mechanism to assess the compliance risk and monitor its mitigation measures thereby ensuring the effectiveness of the compliance function in managing the compliance risk. Compliance officials have been appointed in all business units and departments for overseeing the compliance function at various levels. Any new product/ process introduced in the bank is reviewed by the Compliance function to ensure adherence to regulatory guidelines.

Business Development Department

The Business Development Department is providing continuous mentoring to Regional Offices and Branches for the growth of both Deposit and Advance portfolios of the Bank. The Department is reviewing the daily/weekly business position of all Regions, conducting conferences and meetings to promote business growth, compiling the Business Strategy Document of the Bank, following up for compliance, providing potential customer leads to branches, mentoring green channel branches (Potential branches for advances growth) and Purple Branches (Potential branches for CASA and Deposit growth), following up with loss making branches and low advance base branches.

Salient strategies as per Business strategy Plan (FY 2019-20 to FY 2023-24)

In compliance with the SEBI circular, the business strategy plan for the Bank inter-alia, includes the following:

-    In order to have a focused growth at branches which are located at distant places from Regional Office headquarters and also considering various other factors, clusters have been formed at 16 centers and Cluster Heads have been posted. Cluster Heads will be following up for growth of Advances, CASA and Term Deposits at the branches under their clusters.

-    Large Corporate Group (LCG) has been formed under Credit Deparment for specialized follow up/monitoring of Rs.50 crore and above advances. Hereafter Henceforth, LCG will be taking care of growth and monitoring of Large Corporate Advances of Rs.50 crore and above. Regions will be given target for advances with per borrower / group exposure of less than Rs.50 crore.

-    Thrust on MSME, Agri and Retail advances will continue.

-    Focus on CASA and term deposits. Within CASA, the focus will be more on improving the current account balances and low cost savings bank account balances. An exclusive vertical under a JGM is created at RBD to focus on deposit growth.

-    Increased focus on fee based income from Third party, Digital & Para banking products.

-    Focus on increasing digital transactions.

-    Social media platforms will be effectively utilized for implementing the campaigns that would create customer affinity and brand space on a national level.

-    More customer friendly products to increase merchant forex business.

-    Increased focus on Food & Agri processing units up to a per borrower exposure of Rs.100 crore from the banking system, as they can be classified as priority sector Agri Advances.

-    E-mail and SMS campaigns for customers for Retail Loan products.

-    Launch of Pre approved Personal Loans, Home Loans and Auto Loans.

-    Scaling up of alternative channel/location hubs for on boarding new customers through DSAs & DSTs.

business intelligence and analytics

The Business Intelligence and Analytics Department was formed in April 2018, with the primary objective of accelerating and improving decision making, optimizing internal business processes, operational efficiencies, driving new revenues and gaining competitive advantage over business rivals and thereby achieving the pre-determined corporate goals in an engineered manner. A single Centralized Data Repository with data collaborated both from internal systems as well external sources is setup. This repository holds the entire data of the Bank and thereby allowing us to better understand the customer behaviour and thus enabling development of personalized products and targeted marketing. The department has delivered valuable insights to the various stake holders of the Bank by means of interactive & intelligent dashboards supported by descriptive analytical models and thus enabled top management for better and quicker decisions. The department uses industry best practices in data analytics and leveraged predictive & prescriptive data science tools to improve the Business, Customer Relationship & Operational efficiency.

The Bank has rolled out the Pre-approved Personal Loan Product as the first step towards implementation of advanced analytics and machine learning. This fully digital product, which is accessed using SIB Mirror+ and Sibernet, hence paperless with the loan amount getting instantaneously credited to the customer's savings account has made the bank a technology front runner.

risk management

Risk is an integral part of banking business. Risk Management underscores the fact that the survival of an organization depends heavily on its capabilities to anticipate and prepare for the change rather than just waiting for the change and reacting. The objective of risk management is not to prohibit or prevent risk taking activity, but to ensure that the risks are consciously taken with full knowledge, purpose and clear understanding so that it can be measured and effectively mitigated. The essential functions of risk management are to identify, measure and more importantly monitor the profile of the Bank. Managing risk is fundamental to banking and is the key to sustained profitability and stability. Management of risk aims to achieve best trade-off between risk and return and to ensure optimum Risk Adjusted Return on Capital (RAROC). Sound risk management is critical to a bank's success. Business and revenue growth have therefore to be aligned with Risk appetite in the context of the risks embedded in the Bank's business strategy and balance sheet strength. Of the various types of risks the Bank is exposed to, the most important are credit risk, market risk, cyber risk and operational risk. The identification, measurement, monitoring and mitigation of risks continue to be key focus areas for the Bank. The risk management function attempts to anticipate vulnerabilities at the transaction level or at the portfolio level through quantitative examinations of embedded risks. The risk management strategy of the Bank is based on a clear understanding of various risks, disciplined risk assessment, risk measurement procedures and continuous monitoring for mitigation. The policies and procedures established for this purpose are continuously evaluated and benchmarked against the best practices followed in the industry. Through continuous refinement / improvement of the risk measurement / management systems, including automation of feasible processes, the Bank aims to ensure regulatory compliance as well as better return on and utilization of capital in line with the business objectives. While Non-Performing Assets are the legacy of the past in the present, Risk Management System is the pro-active action in the present for the future.

Risk Appetite

Risk appetite of the Bank refers to the level of risk that the banking organization is prepared to accept in pursuit of its financial and strategic objectives, before action is deemed necessary to reduce the risk. It is determined through the assessment of risk taking capabilities of the Bank in the form of sound risk management capabilities and capital base. Risk Appetite forms a key input to the business and capital planning process by linking business strategy to risk appetite. Risk appetite of the Bank is defined by the Board of Directors through the Risk Appetite Framework which encompasses the general risk appetite of the Bank as well as risk appetite with respect to specific categories of risks. Qualitative and quantitative measures, risk tolerances as well as targeted limits for various categories of risks are included within the risk appetite and are monitored on a quarterly basis. The framework ensures that aggregate risk exposure of the Bank is always within the desired risk bearing capacity.

Risk Management Policy Framework

The Bank has a comprehensive policy framework which contains separate policies for identification, measurement and management of all material risks including but not limited to credit, market, operational, liquidity and other Pillar-II risks. The Bank has put in place an integrated risk management policy which ensures independence of the risk governance structure. The details of risk management practices are provided in the Management Discussion and Analysis Report annexed to the Directors' Report.

Compliance with Basel III and Basel II Framework

In compliance with regulatory guidelines on Pillar I of Basel III norms, the Bank has computed capital charge for credit risk as per the Standardized Approach, for market risk as per the Standardized Duration Method and for operational risk as per the Basic Indicator Approach. To address the issues of Pillar II, the Bank has implemented ICAAP (Internal Capital Adequacy Assessment Process), to integrate capital planning with budgetary planning and to capture residual risks which are not addressed in Pillar I, like credit concentration risk, interest rate risk in the banking book, liquidity risk, earnings risk, strategic risk, reputation risk, pension obligation risk etc. The Bank has adopted a common framework for additional disclosures under Pillar III for adhering to market discipline norms of Basel II and Basel III guidelines. This requires the Bank to disclose its risk exposures, risk assessment processes and its capital adequacy to the market in a consistent and comprehensive manner.

The Bank has taken progressive measures for upgrading its systems, policies and procedures to achieve preparedness in implementation of advanced approaches prescribed by Basel/RBI for credit, market and operational risks. The Bank leverages its Enterprise Wide Integrated Risk Management (EWIRM) solution for measurement and monitoring of capital requirements under standardised/advanced approaches. Further EWIRM solution accelerates the Bank's ability to meet qualitative requirements of advanced approaches such as conduct of RCSA, development of VaR models/B-scorecards etc. in an effective manner.


The total forex business turnover for the year ended 31st March 2019 was Rs.4,95,182.17 crore (comprising Merchant Turnover Rs.15,477.60 crore and Interbank Turnover Rs.4,79,704.57 crore) recording an increase of 24.06% as compared to the previous financial year. Bank earned an exchange profit of Rs.40.63 crore for the year 2018-19.

At present the Bank has Rupee inward remittance arrangement with four banks and 34 Exchange Houses and turnover for the year ended March 2019 was Rs.9,071.68 crore. The Bank has concluded speed remittance arrangement during the FY 2018-19 with the following Exchange Houses:

-    Remit International Pty Ltd., Australia

-    Buckzy Payments INC, Canada

The Bank has continued providing managerial support to M/s. Hadi Express Exchange, UAE. The Bank has presently deputed 10 officers of the Bank to manage the operations of Hadi Express Exchange. Considering the scope in improving the remittance business through arrangements with EH's, the Bank has deputed eight officers to UAE with UAE Exchange Centre, Al Ansari Exchange, Al Ahalia Money Exchange Bureau, Hadi Express Exchange and Al Fardan Exchange, three officers to Qatar with City Exchange, Doha, Qatar, Al Dar For Exchange Works and M/s AlFardan Exchange LLC, Doha Qatar and one officer to UAE Exchange Centre W.L.L., Kuwait.

Considering the increase in international trade by Indian Exporters and Importers in SAR currency, a Nostro relationship in SAR with Alrajhi Bank, Saudi Arabia has been opened.


NRI segment plays a pivotal role in the total business of the bank. In the current competitive banking scenario it is very important to give individual attention to banking and investment needs of NRI customers considering their geographical limitations. The NRI deposits constitute 26.71% of the total deposits and NRI CASA is 22.92% of the total CASA portfolio. The Bank has a separate NRI Division which works for the growth of NRI business at Retail Banking Department, Kalamassery, Kochi. It is headed by an Assistant General Manager and its functions and working are monitored by Country Head, Retail Banking. Dedicated officers and staff working in NRI Division are rendering exemplary support and assistance to NRIs and in turn all the branches give impetus to the growth of NRI business of the Bank. The Branch level NRI Relationship Officers and the NRI Desk functioning in major NRI Business Branches are giving special care and attention to Bank's NRI clientele.

The Bank has a Representative office in Dubai where at present the Bank has 14 Non-resident Relationship Managers deputed in three different countries viz. UAE, Qatar and Kuwait. Apart from this the Bank is giving managerial support to M/s Hadi Express Exchange from 2006. The Bank has deputed 11 Officers to M/s Hadi Express Exchange House in UAE which is having 8 branches in UAE.

The Bank provides Portfolio Investment Scheme for NRI customers. The Bank is authorized by RBI to administer the Portfolio Investment Scheme for NRIs for which the Bank has a PIS Cell under Retail Banking Department. The Bank has tie-up with M/s Geojit BNP Paribas Financial Services Ltd. for the broking side.

The Bank is providing a wide array of Third party products like Mutual Fund, Life Insurance, Health Insurance, National Pension Scheme and Demat facility to NRI Clientele. Customers can avail online banking facility e-invest to open/invest/redeem in Mutual Funds. PFRDA, a statutory body established by Govt. of India, has designated the Bank as POP agent, authorised to collect and invest in National Pension Scheme.

In this age of digital banking the bank has great focus in pushing the technology products such as mobile banking application 'SIB Mirror +' to NRI customers thereby equipping them with the best of technology for day to day banking transactions. Opening of Fixed Deposit and Recurring Deposit through online mode has also made banking much easier for NRI Patrons. Loans against Fixed Deposit can be availed online through the Internet Banking platform.

The Bank is providing executive transit stay facility to Bank's HNI NRI Customers, in major cities. NRI Meets are being conducted by the bank at various centres in Kerala & selected Overseas Centres. The NRI Meets provide a great opportunity for top executives to interact with Bank's beloved HNI NRI customers thereby deepening their existing relationship with the Bank.


The Bank accords utmost importance to enhancement of skills of staff members. Training Programmes are conducted at SIB Staff Training College (SIBSTC), Thrissur and at seven Regional Training Centres (RTCs) for development of professional skills. Training programmes are designed to develop competency of operating personnel while imbibing the SIBIAN's spirit and culture through an effective learning process. The success of these programmes reflects on the enhanced organizational productivity. SIBSTC and the RTCs identify skill gaps in the personnel and provide support for qualitative improvement. Staff members are also nominated to external training centers for being trained in specialized areas as well as to have higher exposure. During the financial year 2018-19, the Bank has imparted training to 4,014 officers, 1,802 clerks and 54 sub staff in various aspects of banking operations. A total of 5,870 staff members were trained during the FY 2018-19, which is about 70% of total staff strength of 8440 as on March 31, 2019. This is in consonance with the Bank's priority of continuous up-gradation of skills to ensure that the staff members meet the rising expectations of customers and discharge services professionally covering the entire gamut of banking operations. In addition to this, trainings have also been imparted to 125 FLCs/BCs for better rural banking services or as a measure of expanding financial inclusion initiatives by the Bank.


The Retail Banking Department focuses primarily in increasing retail business for the Bank through customer acquisition and retention. The Retail Banking Department has two verticals Retail Liabilities & Retail Assets. The Liability vertical constitutes the entire retail liability portfolio of the Bank including Core Deposits, CASA, NRI Business, Marketing of Third Party and Digital Products. Apart from the above the department also plays a vital role in ensuring continued product development and promotion by creating awareness on products and by driving customer-centric campaigns.

Technology Products of the Bank

Digital technology is transforming the way customer interacts with the Bank. Digitalization in banking industry continued to be in full throttle, fuelled by widespread usage of UPI. In coherence with the changes in the industry, the Bank has also strengthened the digital banking space. The Bank has effectively leveraged technology and introduced several variants of traditional products and new e-based services, tailor-made to the diversified needs of customers. Technology services like ATM/Debit cards, Internet banking, Mobile banking etc. have transformed the customers' digital banking experience from branch banking to anytime, anywhere banking. The Bank has set up a separate Digital Banking Department to take care of product development and process improvement of all technology products.

-    SIB ATM cum Debit Cards: The Bank is offering Visa, Master and RuPay debit cards to its customers. For the premium segment the bank is also offering NFC Cards which utilizes the latest technology enabling the Tap & Pay feature. Bank has introduced Business Debit Cards exclusively for SME customers with tailor made offers for the business segment.

-    The Bank has prepaid cards in RuPay platform and these cards can be used similar to Debit cards for Online/ POS transactions. These cards can be preloaded and are being used by customers as a preferred gifting option. This product has also gained its position in the corporate segment wherein this is used for employee / client gifting.

-    The Co-branded Credit Card launched in association with one of the major players in Indian Credit Card industry, M/s SBI cards has gained popularity across the country. Under this arrangement the bank offers two of the most sought after variants - Simply SAVE Credit Card and Platinum Credit Card.

-    The Co-branded Foreign Currency Travel Card launched in association with Axis Bank is specifically designed for customers who travel abroad. This Travel Card can be loaded in 16 currencies (USD, EUR, GBP, SGD, AUD, CAD, JPY, CHF, SEK, THB, AED, SAR, HKD, NZD, ZAR, DKK) and to make payments while travelling to multiple countries.

-    Internet Banking: The internet banking service under the brand name SIBerNet has helped to position the Bank as a technology-driven Bank offering superior banking services to both retail and corporate customers. Instant Net banking activation enables customers to activate SIBerNet instantaneously with a User ID of customer choice. In addition to NEFT/RTGS and within bank fund transfer facility, the Bank has implemented IMPS (Immediate Payment Service) facility which offers 24 x 7 fund transfer facility to all including NRI customers. The Bank has also facilitated various online investment options such as opening of Recurring Deposits (RD), Fixed Deposits (FD) & facility to avail Online Loan against Deposits (FSLD). More investment options such as online Mutual Fund are also incorporated which provides added benefits to the customers. The Bank has also introduced Bill Pay & Recharge service to help the customers to make payment towards their various bill payments from a single platform. SIBerNet is also enabled with Tax payments including GST Payment and e-Filing of income tax and thereby enables customers to conduct their tax payments and filing of returns at the comfort of their homes/offices.

-    Mobile Banking: A lot more features are added to Mobile banking application 'SIB Mirror+' to provide a next generation digital banking experience. SIB Mirror+, which is available to both Domestic and NRI customers, is loaded with features such as Self Registration facility, E-statement, Bill Payment module, within bank, NEFT, IMPS & UPI 24X7 fund transfer, e-lock, Mobile/DTH Recharge, Social Money and Scan & Pay option using BHARAT QR and uPi etc. Mobile Banking app is also further enhanced with SiberMart (Online Shopping Portal), Fee Book (Online Collection Portal), Online deposit opening, submission of 15G/H form & Pre approved personal loan feature rolled out for eligible customers.

-    E-Lock: Mobile Banking also has innovative feature, e-Lock, in mobile banking apps which secures the customer account from any kind of fraudulent or unauthorized transactions. The Bank is the first bank in the country to introduce such a product and many in the industry have been bringing out similar products since then.

-    unified Payment Interface (uPi), Future of payments is transforming the digital payment space. The Bank has introduced UPI features in mobile banking application SIB Mirror+ (BHIM UPI Pay). SIB is the first Bank to upload UPI app in Google Play store. The UPI module is having features such as send money to virtual address, collect money, Aadhaar fund transfer, scan and pay, etc. Bank has also launched a Mobile application for merchants, UPI-POS for accepting payments through UPI channel. UPI has gained wide acceptance among the customers.

-    Point of sale (POs): The Bank is offering three types of POS terminals - PSTN (wired terminal), GPRS (wireless) and M-Pos (Mobile Pos) in association with M/s Atos Worldline India Pvt. Ltd., the market leader in India in this segment. The Bank has also introduced paperless GPRS POS terminal.

-    FAsTag: The Bank has implemented NETC FASTag (in association with National Highways Authority of India (NHAI) and National Payments Corporation of India (NPCI)) in the month of February 2018 offering, hassle-free movement of vehicles through toll plazas. Any vehicle with a FASTag (RFID) tag can cruise through the Toll gates wherein the toll payment is made digitally. SIB NETC FASTags are available for both SIB Customers and Non-customers.

-    siberMart: The Bank has introduced an online shopping portal that enables customer to compare prices between different market places like Amazon, Flipkart, Tatacliq etc. This gives an added advantage to the customer in ensuring the Best Buy. Flight booking was also added to SiberMart which compares the prices of flight tickets in travel portals like clear trip and yatra.

-    Payment Gateway: Internet Payment gateway service provides a platform for the online e-payment transaction between a shopper/client and merchant. Payment Gateway can be integrated in the website of the merchant and customer/client can directly pay the amount using Debit Card, Credit Card, Internet Banking, E-Wallets etc.

-    Feebook: Feebook is an event based fund management/ collection portal, which can be customized by the organization/ merchant all by themselves. FeeBook, comes with a tagline, 'YOU DECIDE, YOU COLLECT'. In Fee Book, the organization has the flexibility of deciding & customizing the entire collection cycle. This can be integrated to the existing Website of the Client or can be provided as a separate Portal. Feebook backed by payment gateway was successfully integrated for CMDRF fund collection during Kerala Floods and tent booking for Kumbhmela 2019.

-    Hi - Hi Banking : This is a Host to Host fund transfer application facilitating seamless transfer of funds between accounts that can be initiated by the client from his host system without Banks intervention. This can be integrated to the customers ERP system.

-    Remote Cheque Printing: This facility enables corporates to process the bulk issuance of cheques/dividend warrants etc. through a system driven model affixing the facsimile signature of the authorised signatory.

-    social Media & Digital Marketing: The Bank has made its presence in all major social media platforms like Face book, Twitter, Instagram, Linked In, You Tube etc. The Bank has been instrumental in utilizing these channels in creating better engagement and awareness among customers about its innovative products and services. The latest digital marketing models are being adopted to reach out to customers across the globe in the most cost effective and sought after means.

Third Party Products

Insurance: As per the approvals received from IRDAI, the Bank has opted for Multiple Corporate Agency Model with effect from 1st April 2016. As per this model the Bank is allowed to tie up with three partners in Life, Health and General Insurance streams. The Bank has tied up with Kotak Mahindra Life Insurance Co. Ltd. and SBI Life Insurance Co. Ltd. in addition to the existing partner Life Insurance Corporation of India for soliciting life insurance. As the second and third partner for General Insurance in addition to Bajaj Allianz General Insurance Co. Ltd. the Bank has tied up with The New India Assurance Co. Ltd. and Bharti Axa General Insurance Co. Ltd. The Bank has also tied up with Max Bupa Health Insurance Co. Ltd. and Cigna TTK health Insurance Co. Ltd. for sourcing health insurance business. FY 2017-18 was very fruitful for insurance business and income worth 17.62 crore was generated compared to 12.63 crore for financial year 2017-18.

Mutual Funds: Mutual Fund is a popular form of investment since it provides the advantages of professional portfolio management and dividend reinvestment. The Bank has tied up with 15 leading Mutual Fund companies thereby offering a variety of mutual fund products to customers. Bank's AMFI Registration Number is 3845. Asset Under Management (AUM) of the bank is Rs.94 crore as on March 2019. With the aim of increasing the mutual fund business and thereby increasing third party income, the Bank has launched a new online mutual fund platform 'SIB E-Invest' to facilitate online purchase & sale of mutual funds. Customers approaching branches can create investment account and execute purchase/sales of mutual funds through this platform. After the successful launch of 'SIB e-Invest' - Bank's Online Mutual Fund platform in branches, the Bank has extended the facility to all single/individually operated retail SiberNet users also.

Bonds: The Bank has been enrolled as a Channel Partner for the distribution of bonds issued by different companies, through Bank's tie up with IFIN - a subsidiary of IFCI Financial Services Limited. Through this tie-up the Bank has been enrolled as a channel partner of IFCI for the distribution of capital gain bonds and tax free bonds.

Depository services: The Bank offers Depository services for the benefit of its customers. Through this facility, customers can hold their securities in electronic form in demat account with M/s Central Depository Services (India) Ltd. (CDSL). For e-trading, the Bank offers SIBerTrade - the online trading facility to buy/sell stocks for its domestic customers from stock exchanges in India through tie-up with M/s Geojit Financial Services Ltd. & M/s Religare Securities Ltd. Customers are also having the option of trading through mobile application in their comfort zone where the Demat Account and Bank account will be with us and the trading account will be with either M/s Geojit Financial Services Ltd. or M/s Religare Securities Ltd.

SEBI has also registered the Bank as self Certified syndicate Bank (scsB) for accepting application under Application Supported by Blocked Amount (ASBA) through all the branches of the Bank. ASBA enables the Bank's customers to apply for IPO/FPO, Rights issue etc. by marking a lien on the account instead of actual debit at the time of applying, which is more beneficial for the customers. The Bank has participated in 89 issues (including IPO/FPO/NCD/Rights Issue) in FY 2018-19.

Portfolio Investment scheme (Pis) - An extensive share trading facility for NRI customers through tie-up with M/s Geojit. Under PIS, NRI customers can directly invest in the Indian securities market through recognized stock exchanges under repatriable/non-repatriable basis.

National Pension system (NPs): The Government of India has introduced the National Pension System (NPS) on 01.01.2004 (except for armed forces). NPS was made available to All Citizens of India from 01.05.2009. The Bank has been appointed as a Point of Presence (POP) and since then and all branches are authorized to extend the product and services of NPS. Recently, Government of India has announced the increase of tax exemption limit for NPS to 60%. This has effectively made NPS tax free at maturity and an effective 'EEE' status is attained, i.e. Tax Exempt at Entry, Earning and Exit stages. NPS is a very appealing product for NRIs and in fact, the bank is the topper among the peer-banks and Kerala based banks for both resident and NRI NPS. Only NPS offers the additional tax benefits up to Rs.50,000/- under section 80 CCD(1B) of the Income Tax Act, which is over and above the Rs.1.50 lakh of section 80C investments.

APY was introduced by Govt. of India in place of NPS Lite providing minimum assured pension from Rs.1,000/- to Rs.5,000/to subscribers and is available to Bank's customers.

Cumulative Achievement (Nos) as on 31.03.2019

NPS - All Citizen Model


NPS Corporate (Including Staff)






SIB E-Pay: In association with BSNL, the Bank is facilitating the payment of BSNL Landline bill of its customers through their accounts maintained with the branches. A customer can avail this facility by submitting a mandate form at the branch where the account is being maintained. Once registered, the BSNL landline bill of the customer will be automatically debited from the customer's account every month. The key feature of this facility is that it is totally hassle free and is offered free of cost to the customers.

Cash Management service (Premium Collection): The Bank is offering Cash Management Service (Premium Collection) to customers in association with Exide Life Insurance Co. Ltd. (formerly known as ING Vysya) and ICICI Prudential Life Insurance Co. Ltd. Under this arrangement, Bank's customers as well as walk-in customers can remit life insurance premium through branch counters. This facility is offered free of cost to customers.

Centralized Direct Debit service: The Bank has entered into tie-up with leading aggregator M/s Bill Desk Services for Centralized Direct Debit arrangement. Through this tie-up Bank's customers will be able to make regular payments like monthly/ quarterly/half yearly payments of Mutual Fund SIP investments/ Loan EMIs (Vehicle/Equipment Loans)/Insurance premium etc. by directly debiting their account and thereby making the payments to various billers/institutions. This facility is available to all customers irrespective of their branches being located in ECS/non-ECS locations. The Bank has similar arrangements with 4 companies - TVS Credit Services, Sundaram Finance Ltd. and Shriram City Union Finance and Bajaj Finance Ltd.

Customer Experience Group (CEG)

Financial year 2018-19 witnessed a significant growth in the count of leads generated from various sources and also on the conversion side while comparing YOY basis. Subsequent to the set up of Customer Experience Group in the Bank, all leads generated from various sources provided were being engaged & followed up by the CEG team till the end of the lead life cycle.

Customer Experience Group has two divisions with inbound team predominantly concentrating on customer service and outbound team focused on sales. CEG Inbound team is the touch point for customers for all banking needs via call, mail, Chat and Social Media. Inbound team handles all customer queries concerns and complaints. The Bank has a dedicated resource to handle Ibanking and Mirror Plus service and complaints. Inbound call centre provide 24x7 customer service on calls whereby customers calls us and state the nature of their problem. The front line analyst uses call centre software to identify the customer and after collecting the required details responds to the problem. The goal of the agent is to solve the problem to the customer's satisfaction. Agents are required to follow procedures to facilitate moving problems to more advanced and experienced back office teams when initial help levels cannot resolve them. Service team manages CEG's complaint handling processes through various channels like Customer care mails, Ibanking Mails, Mobile Banking Emails, IVR cases, Ibanking grievances lodged through Mirror Plus app and Mobile banking grievances lodged through Mirror Plus app. Complaints regarding staff misbehaviour or charges reversal are sent directly to CRD for action.

Further, outbound teams major responsibility is to on board the customers with first point of service and sales of the Bank's products and TPP products. Leads are created and managed in CRM for the interested customers and further Bank's team follows up with branches or TPP vendors for the conversion of the same. The ultimate vision of the team is to become a sales powerhouse of the bank and develop its channel as a cost neutral unit in the coming years.


CAsA Initiatives:

-    The Bank is among the pioneers in offering Mahila Savings Accounts with unique feature of insurance. Based on the market study the Bank had revamped the existing Mahila Plus scheme adding more customized features for women. In essence, bank is aiming to penetrate more among the women folk and yield a certain amount of revenue by offering comprehensive package and strengthen the CASA portfolio. The salient features and offers of Mahila Delight are comprehensive insurance coverage at a nominal cost, concession in locker rent & loan processing fee and much more.

-    Trader Smart current accounts were introduced with lot of free facilities and exemptions in cash handling charges to greater extent. The account is embedded with features like sweep in, sweep out, Doorstep banking, POS facilities etc. The account is designed keeping in mind the requirements of Traders in general and the performance is encouraging w. r. to the average balances in the account.

-    The Bank has launched SIB Elite Senior and Mahila Elite for catering to the needs of pensioners and Senior citizens in particular. The accounts are having very attractive features like sweep in, sweep out, Door step banking, Unlimited ATM free facility etc.

-    The Bank has introduced GSS Smart & Executive for salaried class of people. Being a salary saving account, this account has got features of both saving account and salary account, which is basically a Zero-balance account. Salary OD is an attractive feature of this account along with other benefits like concession in loan processing, locker rent, free internet banking, mobile banking, demat account opening and many more.

-    Government Business Cell was formed two years before with a focus on canvassing government accounts and for liaison with Government Departments. The Cell was able to canvass substantial fresh CASA in the last financial year and able to bring good number of government accounts in the kitty. In order to scale up the government business portfolio of the Bank to further heights, many new initiatives are being implemented.

-    Priority Banking service - South Indian Bank Prime Platinum and Prime are exclusive Priority Banking Services offered to the customers who make their relationship with the bank mutually rewarding with benefits and offerings that enhance the privileges enjoyed by them. As a Priority Banking Customer, they have the advantage of enjoying customized benefits that recognize their total relationship with the Bank and have been tailored to suit their individual needs.

The privileges of SIB Prime Platinum and SIB Prime are not exclusively limited to the customers alone: same of those benefits also get extended to their families as well. As a Priority Banking client, the customer would have access to Red Carpet treatment at SIB Branches across the country. Also with the launch of Priority Banking, it is envisaged to create a comprehensive Personal Economy Management Solution to maintain and diversify the customers' wealth.

Business Development Officers

-    The Bank has started the retail business model through Business Development Officers (BDOs) in May 2016 with 72 BDOs. Today BDO stands as a strong arm of the Bank bringing in new Business to the Bank. Moreover, the intensive grass root level experience and learning have helped the BDOs to develop themselves as more confident and promising officers. With concentrated and focused approach, there has been steady improvement in the performance of BDOs which has laid a strong foundation for the vertical.

-    Now, in order to make the vertical stronger and to get the desired results for a substantial growth in retail business, the Bank has redeployed the BDOs under the following categories.


savings Account Group (sAG)

Liability BDOs

Current Account Group (CAG)

Corporate salary Group (CsG)


GBG/TAsC Group

-    In the Financial Year 2018-19 the BDO vertical could source 17502 accounts with total AMB amounting to Rs.166.05 crore, retail advances advances of Rs.213.52 crore and Insurance amount of Rs.1.55 crore.

Visibility Enhancement Initiatives during the FY 2018-19:

During the financial year 2018-19, the Bank had undertaken many brand promotion initiatives in various media like Newspaper, Television, Radio, Outdoor and Online media.

-    Through effective PR strategy, major events and financial results pertaining to the Bank were promoted globally across all the media platforms. The Bank had held major Press conferences, in connection with Quarterly results and during the launch of SIB SCHOLAR Edition - III, a prestigious CSR initiative by the bank. Regular press releases were made in connection with the various CSR initiatives, product launch and social associations. Newspaper Advertisement campaign were undertaken in major newspapers on the exclusive loan products for the Kerala flood victims.

-    As part of Casual Advertisement, the Bank has partnered with Tie Con Kerala (Rebuilding Kerala Conference), Rashtra Deepika (132nd Foundation Celebration), Thrissur Management Association (TMA) etc. which fetched us good responses.

-    The Bank had also associated with Dhanam Magazine's Retail summit and Award nite at Kochi that had attracted a lot of entrepreneurs.

-    In order to inculcate the concept of healthy life style, the Bank had partnered with Thrissur Round Table 88 for a Mini Marathon at Thrissur - Run Thrissur Run which attracted a lot of public and sports lovers including youth.

-    With a view to make the Bank's presence felt in foreign countries, bank had undertaken some NRI campaigns. The Bank had associated with Malayala Manorama (Parpidam -Gulf), Keli Switzerland (Onam 2018), Thrissur Association of Kuwait (TRASSK Maholsavam 2018), Madhyamam (Come On Kerala), NITCAA, Kuwait (TRISHNA 13) etc.

-    As part of the Radio promotions, the Bank had aired advertisements on Gold Loan across South India.

-    Outdoor brandings were concentrated in major cities like Mumbai, Chennai, Coimbatore and Kochi through bus shelters and hoardings respectively. The Bank had forayed into the digital product promotion on Volvo buses at Mumbai. Bank had also undertaken a bus shelter campaign at Coimbatore city, which fetched us good response. In order to increase brand visibility the Bank had undertaken hoarding campaign at major cities like Bangalore.

- The Bank's new Corporate Advertisement is based on the theme of Trust, directed by Mr. Prakash Varma was released and was promoted through various Television channels and You Tube on a national basis and has received a good response.

human resource

In a dynamic world where an individual defines the organisation, Human Resource (HR) is the most valuable asset. Achievement of an organisation's objectives depends on the individual and the collective efforts of its workforce. Every employee is a vital factor for the smooth functioning by bridging the gap between the customers and the organisation. The Bank has team of highly motivated, skilled, committed, loyal and empathetic staff members, who strive to meet customer aspirations and organisational goals. A strategic approach towards effective development and management of human resources is of paramount importance. In order to augment the workforce in tune with the Bank's sustained growth and expanding network, major initiatives towards talent acquisition and retention have been continued in the FY 2018-19 also.


As on March 31, 2019, the Bank had 8,440 personnel on its rolls. Cadre wise break up is as under:

















Part-time employees








With the infusion of young personnel, Bank was able to maintain the average age of employees as 33 years as on March 31, 2019.

Staff Members having professional Qualification as on 31.03.2019 are as under:

educational stream

number of staff



Post Graduation















Maintenance of staff records were streamlined under HRMSS (Human Resources Management Software Solution) System. The data can be accessed by all controlling offices and various reports based on the data can be generated for the quick disposal of staff related matters. To make HRMSS more comprehensive, the Bank has introduced new modules such as Employee Development Module, Staff Advances, facility for capturing Job role for each officer, online TA module with auto credit facility and provision for capturing GST details, introduction of NEFT facility for HRA disbursement in addition to the existing modules like Transfers, Promotion Maintenance, HRA, Leave and LFC, Training, Online Annual Performance Appraisal of Officers, Service Record, Pension Maintenance, Marketing Excellence, Staff Medical Insurance, Staff Allowances, Provident Fund, Staff Attendance, Audit Compliance and so on.

Motivation Initiatives

Some of the initiatives undertaken by the Bank in order to boost the morale of the Bank employees are as under:

a)    Promotions: The Bank is offering ample opportunities to its employees for their growth and motivation. During this financial year, 521 clerical staff were promoted to Scale-I officers, 345 Scale-I officers to Scale-II officers and 183 Officers to various senior cadres.

b)    The Staff Welfare Study Support Scheme which was introduced in the FY 2016-17 for children of staff members has been successfully continued in the current financial year also. The scheme has proved to be effective in its implementation with the aim of encouraging the children of staff members to soar greater heights.

c)    This year 94 staff members availed the benefit of 'The South Indian Bank Staff Welfare Scheme' introduced in December 2008 for availing long leave with reason of child care after maternity, higher education, medical treatment and so on. The scheme ensures the Bank's employee friendly approach towards its employees and the concern for their family members.

d)    Employee Development Module for Award Staff is introduced in HRMSS. EDM provides an opportunity for all the confirmed employees in the category of Award staff (which includes clerk and substaff) to place on record all achievements, various training needs, area of interest and suggestions for their improvement.

e)    Employee Code of Conduct and Ethics to all employees of the Bank was updated and the same has been incorporated in HRMSS w.e.f. 01.01.2019.

f)    Officer's service rules have been updated w.e.f. 01.01.2019 and the same is made available in HRMSS for information to all staff members.

g)    Reclassified the branches/offices based on the Census 2011 and approved enhancement of HRA to officers w.e.f. 01.09.2018.

h)    PLIS - Performance Linked Incentive Scheme is continued in this financial year also to ensure enhanced productivity and efficiency in all areas of operations and instill motivation among all SIBians to achieve long term growth and profitability.

Industrial Relations

Industrial relations in the Bank have been cordial and harmonious. The representatives of Workmen Union, Officers Association and Management have been working collectively with a sense of ownership for all-round growth and prosperity of the Bank and its employees. On account of the cordial industrial relations with both the associations, the Bank has achieved considerable growth over the years.


During the financial year 2008-09, the Bank instituted an Employee Stock Option Scheme to enable its employees to be a partner in the future growth and financial success of the Bank. The Bank's shareholders approved the plan on August 18, 2008 for the issuance of stock options to the employees.

Till March 2019, 5,44,23,943 stock options were vested, out of which 2,89,09,199 stock options were exercised by eligible employees. The money realized due to exercise of the said options was Rs.42,65,88,572.64 and consequently 2,89,09,199 shares of Rs.1/- each have been allotted to the concerned employees/legal heirs.

A Certificate of Auditors pursuant to Regulation 13 of SEBI (Share Based Employee Benefits) Regulations 2014 will be placed to the AGM for the scrutiny of Shareholders.

The total options granted under nine phases of SIB ESOS 2008 works out to 3.0% of the paid-up share capital of the Bank as at March 31, 2019. The scheme has generated intended motivation amongst the staff.

Statutory disclosures regarding details of the stock options granted, vested, exercised and forfeited and expired during the year under review is annexed to this report as Annexure A.

siB Executive Brief

SIB Executive Brief - a daily news update on Banking, Finance, Economy, Industry, Market Rates etc. is being provided by SIB Staff Training College. It is e-mailed on a daily basis to the Board members, Executives and is also made available in SIB-Insight for the benefit of staff members.

E-Learning Tests

The Bank has completed 18 online tests through GIEOM Application during the year 2018-19 for staff members on various topics relevant to Banking. Toppers are recognized and their names are published in Insight. The E-learning platform is being used increasingly for improving the knowledge level of the staff members.

Continuous Assessment Test for Probationary Officers

To facilitate updation and continuous learning by the Probationary Officers, tests are conducted on a monthly basis, covering the products, procedures, instructions etc. through different modules.


The Bank has since migrated to issuance of e-circulars in place of manual circulars. All the circulars of the Bank are uploaded using the 'e-circular software'. In e-circular, Bank's policies, Guidelines and Forms are also uploaded so as to empower the branches with readily accessible pool of information/guidelines.

sib students' economic forum (sibsef)

Students' Economic Forum is a monthly publication from the SIB Staff Training College and it provides an analysis of contemporary themes relating to developments in Economy, Banking and Finance. As on 31.03.2019, 328 themes have been published since the first publication in December 1991. The objective of this venture is to kindle interest in economic affairs among the younger generation and also to provide a learning platform for the student community. The hard copies of the publication numbering about 3,500 are being sent to all the branches/offices, reputed schools/colleges/academic institutions, RBI offices, other Banks, government organizations and corporate offices. It has wide acceptance among students, bankers and academic community. The subjects discussed during the Financial Year 2018-19 are - Trade Receivable Discounting System (TReDS), Green Finance, PMAY-Urban, An Insight into Inflation, Project Sashakt, Fraud Risk Management in Banks, Foreign Exchange Rate, Capital Conservation Buffer, Fugitive Economic Offenders Bill 2018, Ayushman Bharat, Budget 2019 Highlights, Artificial Intelligence. These themes are made available in the Bank's Website under the heading Student's Corner.


A corporate magazine - 'SIBLINK' is published on a quarterly basis. During the Financial Year 2018-19, the Bank has published SIBLINK with the themes -'Compliance in Banks' and 'HR Initiatives in Banks'.

Awards and Accolades

The Bank has received following awards during the Financial Year 2018-19:

1.    Corporate Social Responsibility (CSR) Award instituted by Kerala Management Association (KMA) for Banks & NBFCs under Education Sector.

2.    Best Performing Primary Lending Institution of HUDCO under Credit Linked Subsidy Scheme from HUDCO.

3.    National Payments Excellence Award for RuPay instituted by NPCI.

4.    Best MSME Bank-Runner Up award instituted by Chamber of Indian Micro, Small & Medium Enterprises.

5.    Banking Technology 2019 awards instituted by IBA - The Bank emerged winner in the 'Most Customer Centric Bank Using Technology' category and runner up in the 'Best Payments Initiative' category amongst small Banks'.

ISO 270001:2013 certification

The Bank has been awarded ISO 270001:2013 certification for its Information Security Management System (ISMS).

Achievements and milestones:

1.    The Bank has shifted Portfolio Investment Scheme (PIS) cell from Ernakulam NRI branch to RBD with a separate SOL ID (8072). This change has resulted in enabling Bank's customers to open their PIS account under their parent sol ID. Earlier PIS account got opened only under the sol ID of Ernakulam NRI branch (0307).

2.    During the FY 2018-19, the Bank has started online NPS services like Instant NPS Account opening (e-NPS) and making Subsequent Contribution through the SIB website.

3.    Insurance business achieved a YoY growth of 40% in income.

4.    Tied up with Bharti AXA as the third general Insurance partner which in turn will provide a better spread of products to customers as well as aid in significantly improving the other income.

5.    Mutual Fund SIP business registered a YoY growth of 320% and Mutual Fund Lump sum business registered YoY growth of 130%.

6.    The BDO channels is divided into 4 groups, SAG (Savings Account Group), CAG (Current Account Group), CSG (Corporate Salary Group), GBG(Govt. Business Group) for on boarding new to bank customers giving more focus on Salary and Govt. accounts.

7.    Introduced Merchant in a Box - Master card business debit card and Bharat QR is provided in a bundled offer to pre identified merchants free of cost.

8.    Launched Secured Credit Card - Secured Credit Card is a new product under the digital products catalogue, by which a Credit Card can be issued to Bank's retail customers who maintain a fixed deposit with the Bank. Unlike an unsecured Credit card issued based on the credibility of the applicant, Secured credit card is issued based on the Fixed deposit of the applicant, Lien-marked for the card.

9. Introduced Preapproved Credit Card in tie-up with SBI Credit Card. Bank has identified prospective customers who are eligible for preapproved credit card. This customer data is qualified as per SBI Card criteria like CIBIL Score, Age and PAN.

10. Introduced a new Savings Bank Account-SIB - RUBY with Best in Class Features and Higher Interest rate. SIB RUBY is bundled with bouquet of offerings which will satisfy the customer's investment and insurance appetite. SB balance above Rs.3 lakhs will be converted to Flexi Fixed Deposit in multiples of Rs.10,000/- with maximum holding period of 92 days. (Sweep In and Sweep out would be provided based on one time request from customers).

Foreign Exchange Advisory Cell

The Bank has launched Foreign Exchange Advisory Cell to provide advisory services by subject experts on FEMA rules and trade finance related issues to the general public. The complimentary service is available to all Foreign Exchange Trade Fraternity.


The Bank ensures strict compliance with all statutory requirements and voluntarily undertakes several sustainable steps in order to contribute towards a better environment. The Bank has undertaken various initiatives for energy conservation at its premises. Further, the Bank has used information technology extensively in its operation and consistently pursuing its goal of technological up-gradation in a cost effective manner for delivering quality customer service. As a next generation Bank, the Bank has deployed 'Technology' as a Strategic Business enabler - to build a distinct competitive advantage and to achieve superior standards of Customer Service. The Bank, being a banking company and an authorized dealer in Foreign Exchange, has taken all possible steps to encourage export credit.

Number of cases filed. if any. and their disposal under section 22 of the sexual Harassment of Women at Workplace (Prevention. Prohibition and Redressal) Act. 2013

The Bank has zero tolerance approach towards any action on the part of any executive/employees which may fall under the ambit of 'Sexual Harassment' at workplace, and is fully committed to uphold and maintain the dignity of every women staff working in the Bank. The Bank has complied with provisions relating to the constitution of internal Compliants Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 [14 of 2013]. The Policy provides for protection against sexual harassment of women at workplace and for prevention and redressal of such complaints. All the employees (permanent, contractual, temporary, trainees) are covered under this policy.

Number of complaints pending as at the beginning of the financial year - Nil

Number of complaints filed during the financial year –Nil

 Number of complaints pending as at the end of the financial year - Nil

Particulars of Employees

The Bank had 8,440 employees as on March 31, 2019. Only MD & CEO (employed throughout the year) was in receipt of aggregate remuneration of more than Rs.1.02 crore per annum and no other employees was employed for a part of the year was in receipt of remuneration of Rs.8.5 lakhs and above per month. The details of top 10 employees in terms of remuneration drawn pursuant to provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5 (2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed to this report (Annexure B).

The ratio of the remuneration of each Director to the median employee's remuneration and other details in terms of subsection 12 of Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed to this report (Annexure C).


A brief outline of the Bank's CSR Policy, including overview of projects or programs to be undertaken.

south indian bank's CSR policy

South Indian Bank is grateful to the society that has supported and encouraged the Bank during its long journey of growth and development. The Bank believes that no organization can make sustainable development without the patronage of the society. The Bank is committed to integrate social and environmental concerns in its business operations. The Bank shall continue to have among its objectives, promotion and growth of national economy and shall continue to be mindful of its social and moral responsibilities to customers, shareholders and the society. The Bank is committed to financing the economic and developmental activities of the nation with concern for human rights and environment.

In line with the CSR Policy and in accordance with Schedule VII, Section 135 of Companies Act, Bank undertook various activities during FY 2018-19, which had significant impact on the society. These activities include:

-    Eradicating hunger, poverty and malnutrition, promoting health care including preventive healthcare and sanitation and making available safe drinking water.

-    Promoting Education, including special education and employment enhancing vocation skills and livelihood enhancement projects.

-    Empowering women, setting up homes and hostels for women and orphans, setting up old age homes, measures for reducing inequalities faced by socially and economically backward groups.

-    Ensuring environmental sustainability, maintaining quality of soil, air and water.

-    Protection of national heritage, art and culture including restoration of buildings and sites of historical importance and works of art.

-    Training to promote nationally recognized sports.

-    Contribution to Prime Minister's National Relief Fund.

-    Rural development projects.

-    Promoting Financial Literacy.

CSR Expenditure

South Indian bank has always given top priority to fulfilling its obligations under Corporate Social Responsibility. Diversified Projects in the areas of healthcare, education, sports and sanitation that would benefit the society as a whole are identified and the Bank wholeheartedly supports such initiatives. In the Financial Year 2018-19, the Bank spent Rs.12.22 crore (92.01% of the budget) towards CSR activities against Rs.7.28 crore in the Year 2017-18.

The amount to be spent by the Bank towards CSR for FY 2018-19 as per Section 135 of the Companies Act, 2013, comes to Rs.13.28 crores. Amount spent by the Bank this year towards CSR was Rs.12.22 crores. Through various projects which are already sanctioned, the Bank will be thoughtfully spending the CSR funds earmarked for the purpose. The Bank had also embarked on some major projects last year in the field of education, youth engagement, healthcare, infrastructure development, etc. By choosing long term sustainable projects, Bank has taken an approach which brings steady and long lasting impact on the society. The details of the CSR activities of FY 2018-19 are mentioned in Annexure D to this report.

Web-Link to the CsR Policy Policy.pdf


Financial inclusion aims to ensure the availability of formal and basic banking services to all Indian households, including those in the un-banked and under-banked areas. South Indian Bank has adopted several financial inclusion initiatives, including Kiosk banking. The Bank has successfully migrated to Aadhaar Enabled Payment System (AePS) in the existing KIOSK Model of Banking, from the earlier mode of customer ID payment service. Now AePS is the only mode by which transactions are taking place in Kiosk Banking solution.

Aadhaar Enabled Payment system (AePs)

Aadhaar Enabled Payment System (AePS) is a payment service, empowering a bank customer to use Aadhaar as his/her identity to access his/her respective Aadhaar enabled bank account and perform basic banking transactions through a Business Correspondent / POS machine. National Payment Corporation of India (NPCI), an umbrella organisation for all retail payments are controlling AePS operations. AePS offers basic banking services such as Cash Withdrawal, Cash Deposit, Balance Enquiry, Aadhaar to Aadhaar Fund Transfer, Mini Statement, and Best Finger Detection. The Bank has implemented Kiosk Banking Model in the state of Kerala through 16 Individual Business Correspondents and in Tamilnadu through 64 Individual Business Correspondents.

Financial Literacy Centres

Financial Literacy is the ability to understand how money works in its day to day life and how someone manages it, how he/she invests it and how a person offers it to others. More specifically, it refers to the set of skills and knowledge that allows an individual to make informed and effective decisions with their financial resources. The Bank has engaged 12 FLCs in different Blocks of Kerala to disseminate financial literacy to the people and it is functional through retired bank employees and educated youth. In addition to this the Bank has voluntarily appointed 8 FLCs in eight different Districts in Tamilnadu to emphasize the objectives of Financial Literacy. Bank's FLCs are now branded under the name SIB JYOTHIS. Efforts are on to make them more efficient, responsive to the needs of the people. A Board approved policy covering all aspects of Financial Literacy Centres has been formulated, giving due consideration to the revised guidelines on FLCs circulated by RBI. During the FY 2018-19, FLCs have conducted 1,646 camps covering 1,08,432 participants.

Government of India scheme - PMJDY

Pradhan Mantri Jan DhanYojana (PMJDY), is conceived as a national mission on financial inclusion initiated by Honourable Prime Minister on August 15, 2014. The scheme envisages universal access to banking facilities, with at least one basic banking account for every household. In line with the directives given by Ministry of Finance and SLBC, PMJDY scheme was implemented in the Bank since August 18, 2014.

The Bank has opened 2,00,998 BSBD accounts as on March 31, 2019 with an outstanding balance of Rs.51.81 crore. RuPay Debit Cards are issued in PMJDY accounts providing customers with the benefit of accident insurance coverage of Rs.1.00 Lamr. Social Security schemes in insurance (PMJJBY and PMSBY), were also given high priority by the Bank


Department of Financial Services (DFS) under Ministry of Finance, had directed banks to become Enrolment Registrars with UIDAI so as to set up AADHAAR enrolment stations at branch premises. As per DFS advisory, at least 10% of branches should be facilitated for the Aadhaar enrolment facility. In view of the same, 85 Branches across 7 states were identified as Aadhaar Enrolment Station (AES) to provide services in connection with Aadhaar enrolment and update facility.

As on 31.03.2019, all the 85 Aadhaar Enrolment Stations identified were functional.


Despatch of documents in Electronic Form: As a responsible corporate citizen, the Bank supports and pursues the 'Green Initiative' of the Ministry of Corporate Affairs (MCA). In conformance with such initiatives and in terms of Rule 18 of the Companies (Management and Administration) Rules, 2014, the Bank may give notice through electronic mode including e-mail to those Members who have provided their e-mail address either to their Depository Participants (DPs) or to the Registrar/ Company.

Further, in terms of Regulation 36 of the Listing Regulations, the listed entity is required to send soft copies of its Annual Report to all those shareholder(s), who have registered their email address for this purpose. Accordingly, the documents including the notice and explanatory statement of 91st Annual General Meeting, Annual Report of the Bank for the financial year 2018-19 including Audited Financial Statements, Directors' Report, Auditors' Report etc., for the year ended March 31, 2019, sent to the e-mail address registered with their Depository Participant (DP)/Registrar/Company. The e-mail addresses indicated in respective DP accounts which will be periodically downloaded from NSDL/CDSL will be deemed to be their registered e-mail address for serving notices/documents including those covered under Section 136 of the Companies Act, 2013. In case a Member, whose email address has changed, fails to update this new e-mail address, the said documents will be sent to the existing e-mail address and the said documents will be deemed to have been delivered, in compliance with the relevant provisions of the Companies Act, 2013, the relevant Rules made thereunder and the Listing Regulations. Member who have not yet registered their email address are requested to do so, at the earliest. In case of shares held in electronic form and in case of any change in the email address, Member are requested to update the same with their DP and in case of shares held in Physical form, Members are requested to update the same with the Registrar/Company.

Please note that the said documents will also uploaded on the Bank's website and copies thereof will be made available for inspection at the Registered Office of the Bank during 10.00 a.m. to 3.00 p.m. on all working days except 2nd and 4th Saturdays, Sundays, Bank Holidays and Public Holidays up to the date of ensuing AGM.

Shareholders have been requested on several occasions to update their e-mail IDs in their folio/demat a/c to help accelerate the Bank's migration to paperless compliances. The Bank seeks your support to the said green initiatives, as it is designed to protect the fragile environment.

Further, as a part of green initiative by the Bank, all relevant agenda papers pertaining to the Board/Committee are being circulated well in advance to the Board of Directors through electronic mode to facilitate easy access of agenda on IPad which would provide sufficient time to the Board for reading and understanding the proposals placed in a meeting.


Transactions processed through the Core Banking Solution are monitored for detecting suspicious transactions, using TCS Bancs Compliance, an AML application to comply with the provisions under Prevention of Money Laundering Act (PMLA).

The Bank has set up a Centralized Processing Centre (CPC) for liability side customer creation with the objective of full KYC compliance and to use KYC as a fraud prevention tool. The Bank has brought all branches under the CPC model during the Financial Year 2015-16.

The Bank had implemented UIDAI's e-KYC services for Aadhaar authentication, in all the branches. The Bank has attached great importance for compliance of KYC/AML/CFT norms by the customers as per the Reserve Bank of India directive


The Bank has been registered as a reporting entity under FATCA, under GIIN No. IIK7HU.99999.SL.356, to comply with the reporting requirement under the inter Governmental agreement entered between Indian and US Government and the CRS Multilateral Competent Authority Agreement.


The Bank has successfully raised Non-Convertible, Redeemable, Unsecured, BASEL III compliant Tier II Bonds worth Rs.250.00 crore during Q4 FY 2018-19. At the time of issue, CARE had assigned a rating of 'CARE A+' (Outlook: Stable) and India Ratings had assigned a rating of 'IND A+' (Outlook: Stable). The details of credit rating accorded to various debt instruments issued by the Bank from time to time is as follows:








Amount Outstanding ( crore)



INE 683 A 09091




Care A+ & Ind A+


INE683A 08028




Care A+ & Ind A+


INE 683 A 08036




Care A+ & Ind A+


INE 683 A 08044




Care A+ & Ind A+

Further, Bank's Certificate of Deposits for Rs.7,500 crores bear a rating of CARE A1+ by CARE ratings.

During the financial year 2018-19 there is no change in the credit rating.


The composition of the Board of Directors is governed by the Banking Regulation Act, 1949, the Companies Act, 2013, SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and the Code of Conduct on Corporate Governance adopted by the Bank. The Board comprises of 10 Directors as on the date of this report, with rich experience and specialized knowledge in various areas of relevance to the Bank, including banking, accountancy, small scale industry, agriculture, and information technology.

Excluding the MD & CEO, all other members of the Board are Non-Executive Directors and six Directors out of the total 10 Directors are Independent Directors. Declaration has been obtained from the Independent Directors as required under the RBI Regulations, SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and Companies Act, 2013. The remuneration and other benefits paid to MD & CEO of the Bank and other Non-Executive and Independent Directors during the financial year 2018-19 are disclosed in Corporate Governance Report.

During the 90th Annual General Meeting held on July 11, 2018 as recommended by the Bank the shareholders accorded their approval for :

- Appointment of Mr. V J Kurian (DIN: 01806859) as an Independent Director for a period of 5 years, not be liable to retire by rotation.

-    Re-appointment of Sri Achal Kumar Gupta (DIN: 02192183) as a Director liable to retire by rotation.

-    Re-appointment of Dr. John Joseph Alapatt (DIN: 00021735) and Mr. Francis Alapatt (DIN: 01419486) for a period up to 23rd September, 2020 and 31st October, 2021 respectively, not be liable to retire by rotation.

Sri K Thomas Jacob (DIN : 00812892), Non-executive Independent Director of the Bank, retired from the Board of Directors w.e.f. 30th August, 2018 upon completion of his eight year term, as per Section 10A(2A) of the Banking Regulation Act 1949.

Sri M George Korah (DIN: 08207827) has been appointed as the Additional Independent Director of the Bank representing majority sector w.e.f. 31st August, 2018 pursuant to section 161(1) of the Companies Act, 2013 and shall hold the office up to the ensuing Annual General Meeting of the Bank. He will be appointed as a Non-Executive Independent Director of the Bank in majority sector (i.e. accountancy), not liable to retire by rotation.

Mr. Pradeep M Godbole (DIN: 08259944) has been appointed as the Additional Director of the Bank w.e.f. 26th March, 2019 pursuant to Section 161(1) of the Companies Act, 2013 and shall hold the office up to the ensuing Annual General Meeting of the Bank. He will be appointed as a Non-Executive Director of the Bank in minority sector, liable to retire by rotation.

Sri Salim Gangadharan (DIN: 06796232) was appointed as the Non Executive Director of the Bank with effective from January 16, 2014 pursuant to the provisions of Section 161 of the Companies Act, 2013 and appointed as a director liable to retire by rotation in the 90th AGM held on 11 July, 2018.

Smt. Ranjana S Salgaocar (DIN-00120120) and Mr. Parayil George John Tharakan, (DIN-07018289) have been appointed as additional Independent Directors of the Bank w.e.f. 1st October, 2014 and November 25, 2014 respectively and they have been appointed as Independent Directors of the Bank for a period of five (5) years vide shareholders' resolution dated July 15, 2015 in terms of the provisions of the Companies Act, 2013. Their term of appointment would come to an end on 30th September, 2019 and November 24, 2019. In terms of Section 149(10) of the Companies Act, 2013, an Independent Director shall hold office for a term up to five consecutive years on the Board of a company but shall be eligible for reappointment on passing of a special resolution by the company for a further period of upto five years. In terms of Section 10A(2A) of the Banking Regulation Act, 1949, no director of a banking company, other than its Chairman or whole-time director, by whatever name called, shall hold office continuously for a period exceeding eight years. Hence approval of Shareholders of the Bank is sought for the reappointment of Smt. Ranjana S Salgaocar and Mr. Parayil George John Tharakan for a further term upto 30th September, 2022 and 24th November 2022 respectively. Resolution for their reappointment as Independent Directors is included in the AgM Notice.


Mr. C P Gireesh, Joint General Manager & Chief Financial Officer and Key Managerial Personnel has opted for Voluntary Retirement from the Service of the bank w.e.f.1st September, 2018 and, the Bank has appointed Ms. Chithra H, Joint General Manager as Chief Financial Officer and Key Managerial Personnel of the Bank with effect from 1st September, 2018. There was no other change in Key Managerial Personnel during the year ended March 31, 2019.

Composition of Audit Committee

The Audit Committee of the Board is chaired by Sri M George Korah, who is a Chartered Accountant. The other members of the committee are, Sri Achal Kumar Gupta (Non-Executive Director), Sri V J Kurian (Non-Executive Independent Director) and Sri Francis Alapatt (Non-Executive Independent Director). The constitution of the Committee is in compliance with the regulatory requirements. The terms of reference of the Audit Committee, incorporated in the Bank's Code of Corporate Governance, are in accordance with the SEBI (LODR) Regulations, 2015 entered into by the Bank with Stock Exchanges where the Bank's shares are listed, Companies Act, 2013 and RBI guidelines.

Independent Directors

In terms of the definition of Independence of Director as prescribed under Regulation 16(1) (b) of the SEBI (LODR) Regulations, 2015 and Section 149(6) of Companies Act, 2013 and based on the confirmation / disclosures received from the Directors, the following Directors are Independent Directors of the Bank as on the date of this report

1.    Dr. John Joseph Alapatt (DIN: 00021735)

2.    Sri Francis Alapatt (DIN: 01419486)

3.    Smt. Ranjana S Salgaocar (DIN: 00120120)

4.    Sri Parayil George John Tharakan (DIN: 07018289)

5.    Sri V J Kurian (DIN: 01806859)

6.    Sri M George Korah (DIN: 08207827)

Woman Director

In terms of the provisions of Section 149 of the Companies Act, 2013 and Regulation 17 of the SEBI (LODR) Regulations 2015, the Bank has appointed Smt. Ranjana S Salgaocar (DIN: 00120120) as Woman Director on the Board of the Bank.

Bank's policy on directors' appointment and remuneration including criteria for determining qualifications. positive attributes. independence of a director and other matters provided under sub-section (3) of section 178;

Criteria for appointment as Director of the Bank

Nomination and Remuneration Committee of the Board shall identify and ascertain the integrity, qualification, expertise and experience of the person who is considered for being appointed/reappointed as Director of the Bank and apply due diligence in compliance with the Banking Regulation Act, 1949, Reserve Bank of India directives on Fit & Proper Criteria, all other applicable provision of the Companies Act, 2013, SEBI (LODR) Regulations, 2015 including any amendments from time to time and Nomination Policy of the Bank.

Criteria For Determining Qualifications. Positive Attributes

a)    The professional and personal ethics, integrity and track record.

b)    Special knowledge or practical experience in Banking, accountancy, agriculture and rural economy, co-operation, economics, finance, Marketing, Information Technology, law, small-scale industry or any other field useful to the Banking Company in the opinion of Reserve Bank of India.

c)    Ability to provide insights and practical wisdom based on their experience and expertise relevant to the Bank's line of business.

d)    Details of his/her association with other Companies/LLPs/ Firms (including NBFC).

e)    Details of substantial interest in other Companies/LLPs/Firms (including NBFC).

f)    Details of financial facilities, if any, availed from the Bank.

g)    Details of default in the re-payment of loans, availed from the Bank or any other bank, if any.

h)    Commitment to enhancing stockholder value.

i)    Ability to develop a good working relationship with members of the Board and contribute to the working relationship with senior management of the Bank.

j) Whether he/she suffers from any of the disqualifications envisaged under the provisions of Banking Regulation Act, 1949, Companies Act, 2013 and SEBI (LODR) Regulations, 2015. k) Any other factors as the Committee may deem fit and in the best interests of the Bank and its stockholders.

Criteria for determining Independence of a Director

The Criteria of Independence of a director is determined based on conditions as laid down in the Companies Act, 2013 and SEBI (LODR) Regulations, 2015. The independent director shall at the first meeting of the Board in which he/she participates as a Director and thereafter at the first meeting of the Board in every financial year or whenever there is any change in the circumstances which may affect his/her status as an independent director, give a declaration that he/she meets the criteria of independence.


Remuneration Policy for Employees of the Bank:

The Bank has a Board approved Compensation Policy which deals with the Compensation & Benefits of the Employees of the Bank and Whole-time Directors.

The objectives of the Compensation Policy of the Bank inter-alia includes, to provide a fair and persistent basis for motivating, inspiring and rewarding the employees appropriately, according to their jobs/role size, performance, accomplishments, contribution, skill, aptitude and competence to implement standards on sound compensation practices and incentives and to provide effective governance of compensation payable to the WTDs/CEO and other staff, alignment of compensation with prudent risk taking and effective supervisory oversight.

The disclosure requirement of the remuneration is separately provided in Disclosure under Basel III norms.


Remuneration of MD & CEO and Other Employees (including Key Managerial Personnel):

The Board approved Compensation Policy deals with the Compensation & Benefits of the Whole-time Directors/MD & CEO. The remuneration of the Whole-time Directors/MD & CEO is recommended by the Nomination & Remuneration Committee (NRC) to the Board for approval after considering the factors prescribed under the Compensation Policy.

The Board considers the recommendations of NRC and approves the remuneration, with or without modifications, subject to shareholders' and regulatory approvals. The remuneration payable to Whole-time Directors/MD & CEO is subject to prior approval of the Reserve Bank of India (RBI). Therefore, the remuneration or any revision in remuneration to Whole-time Directors/MD & CEO is payable only after receipt of the approval from RBI.

For the other employees (including Key Managerial Personnel and Compliance staff), the Board, based on the recommendation of the NRC may devise appropriate compensation structure. The compensation paid to other employees that include Award Staff, Officers coming under Scale I to IV and executives coming under Scale V to VII is fixed based on the periodic industry level settlements with Indian Banks Association. The variable compensation paid to functionaries is based on the Performance Linked Incentive Scheme, which has been formulated on the basis of performance parameters set in Performance Management System.

Remuneration of Chairman:

The NRC recommends the remuneration of the non-executive Chairman to the Board which is considered and approved by the Board in the same manner subject to Shareholders' and regulatory approvals. The NRC, while recommending the remuneration of the part-time Chairman considers the Function, Role and Responsibilities of the Chairman and Regulatory guidelines as applicable etc.

The remuneration payable to the Chairman is subject to prior approval of the Reserve Bank of India (RBI). Therefore, the remuneration or any revision in remuneration of the Chairman is payable only after receipt of the approval from RBI.

Remuneration of Non-Executive Directors (NEDs):

The NEDs are paid sitting fees for attending each meeting of the Board of Directors or any committee thereof as approved by the Board, within the permissible limit prescribed under the Companies Act, 2013, SEBI (LODR) Listing Regulations 2015 and other regulatory guidelines, as amended from time to time. The Board while recommending the change in the sitting fees considers various factors like size and complexity of organization, Comparison with the peer Banks and Regulatory guidelines as applicable etc. while recommending the change in the sitting fees to the Board.

Policy on Board Diversity:

Pursuant to SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015 to ensure compliance with the applicable provisions, the Bank has devised a policy on Board diversity to ensure adequate diversity in its Board of Directors. The Bank believes that diversity underpins the successful operation on an effective Board and embraces diversity as a means of enhancing the business. With a view to achieve sustainable and balanced development, the Bank sees increasing diversity at the Board level as an essential element in supporting the attainment of its strategic objectives. A diverse Board includes and makes good use of differences in the skills, regional and industry experience, background, race, gender and other qualities of directors.

Policy on Board Diversity of the Bank mainly depends on the qualifications for appointment of Directors of the Bank as contained in the Banking Regulation Act,1949 and satisfying the Fit and Proper Criteria for directors as per the regulatory requirement of RBI.

The Bank continuously seeks to enhance the effectiveness of its Board and to maintain the highest standards of corporate governance and recognizes and embraces the benefits of diversity in the boardroom. Diversity is ensured through consideration of a number of factors, including but not limited to skills, regional and industry experience, background and other qualities. In informing its perspective on diversity, the Bank also take into account factors based on its own business model and specific needs from time to time.

The NRC has the responsibility to lead the process for Board appointments and for identifying and nominating, candidates for appointment to the Board. The benefits of diversity continue to influence succession planning and continue to be the key criteria for the search and nomination of directors to the Board.

Board appointments are based on merit and candidates will be considered against objective criteria, having due regard for the benefits of diversity on the Board, including gender. The Policy of Board Diversity is displayed in Banks website.(https://www. on_Board_diversity.pdf)

Board Level Performance Evaluation

The Companies Act, 2013 and SEBI (LODR) Regulations, 2015 stipulates the performance evaluation of the Directors including Chairman, Board and its Committees. Considering the said provisions, the Bank has devised the process and the criteria for the performance evaluation which has been recommended by the Nomination & Remuneration committee and approved by the Board.

The process for formal annual performance evaluation is as under:

-    Committee of Independent Directors at their separate meeting evaluates the performance of Non-Independent Directors including Chairman of the Bank and the Board as a whole.

-    The Board evaluates the performance of the Independent Directors, Non- Executive Directors, Chairman and MD & CEO (excluding the director being evaluated) and submit its report to the Nomination & Remuneration committee

-    The Board and Nomination & Remuneration Committee evaluates the ) fulfillment of the independence criteria as specified in the regulations and their independence from the management

-    The Board evaluate the performance of Board level committees.

-    Nomination & Remuneration Committee evaluate/review the performance of each Director recommends the appointment/reappointment/continuation of Directors to the Board. Based on the recommendation of Nomination & Remuneration Committee, Board will take the appropriate action.

The criteria for performance evaluation are as under:

Performance Evaluation of Non-Executive Directors. MD & CEO and Chairman

Participation at Board/Committee Meetings, Managing Relationship, Knowledge and Skill, Personal attributes, Compliance and Corporate Governance; Leadership; Strategy Formulation, Strategy Execution, Financial Planning/ Performance, Relationships with the Board, Human Resource Management and Succession Planning, Personal Qualities; Resources; Conduct of Meetings.

Performance Evaluation of Board

Composition and Diversity; Strategic Foresight, Value Creation, Process and Procedures, Oversight of the Financial Reporting Process and Internal Controls, Oversight of Audit Functions, Corporate Governance, Corporate Culture, Monitoring of business activities, Understanding of the business of the Bank and Regulatory environment; Contribution to effective corporate governance and transparency in the Company's Operations; Deliberations/decisions on the Company's strategies, policies, plans and guidance to the Executive Management.

Performance Evaluation of the Board Level Committees

The performance and effectiveness of the Committee; Frequency and duration; Spread of talent and diversity in the Committee; Understanding of regulatory environment and developments; Interaction with the board.

Outcome of Performance Evaluation

An annual performance evaluation of the Board, Committees of the Board and the individual members of the Board was conducted in May 2019 as per the aforesaid process and the report on the evaluation were presented at the meeting of the N&RC and the Board of Directors. The Directors expressed their satisfaction with the evaluation process.

The feedback of the Board, post completion of the exercise of performance evaluation of the Board and Committees of the Board were as under:

1.    The Board is functioning as a collective body and has performed on all the parameters and the Board of the Bank is well balanced in terms of diversity of experience and skill sets to meet the requirements of the Bank as well as conforming to the Regulatory requirements.

2.    The Board and its Committees were effective in achieving their respective Charters and the members acted with diligence and care. Further, important issues are brought up and discussed in the Board/Committee Meetings.

3.    Directors qualified to continue on the Board having understood and discharged their responsibilities and also continue to qualify under the 'Policy on Board Diversity and Fit and Proper criteria and Succession Planning' of the Bank.

4.    The Board noted that there is a need for more efforts for further improvement on visibility and it is suggested that respective Committee Chairpersons may apprise the Board on key matters that have been discussed in their committees.


a) statutory Auditors:

The shareholders at its 90th Annual General Meeting held on July 11, 2018, appointed M/s S. R. Batliboi & Co. LLP (ICAI Firm Registration No. 301003E/E300005), Chartered Accountants, Mumbai as Statutory Central Auditors of the Bank for the audit of Bank's accounts for the year 2018-19.

For the year ended March 31, 2019, fees paid/payable to the Statutory Auditor M/s S. R. Batliboi & Co. LLP is as follows

Fee paid (excluding taxes)

Amount (Rs. in Lakh)

Statutory Audit/Limited review


Certification and other attestation services


Non-audit services




M/s S. R. Batliboi & Co. LLP, Chartered Accountants, Mumbai, vacates the office at the ensuing Annual General Meeting and are eligible for reappointment subject to the approval of the RBI and shareholders of the Bank.

b) secretarial Auditors and secretarial Audit Report:

Pursuant to Section 204 of the Companies Act, 2013, the Bank had appointed M/s SVJS & Associates, Company Secretaries, Practicing Company Secretaries, Kochi as its Secretarial Auditors to conduct the secretarial audit of the Bank for the FY 2018-19. The Bank provided all assistance and facilities to the Secretarial Auditor for conducting their audit. The Report of Secretarial Auditor for the FY 2018-19 is annexed to this report as Annexure E.


Internal Control

The Bank has put in place extensive internal controls and processes to mitigate operational risks, which includes maker-checker authentication of CBS transactions, centralized processing of opening and modifications of CASA accounts, centralized sanctioning of loan facilities, day end checks to monitor critical issues involving timely renewal of credit reports, closure of Bank Guarantees, timely obtaining of loan documents, EM creation and CERSAI registration, etc.

Various Preventive controls viz, Dual custody for cash, gold and other security items, maintenance of daily control registers for security items, introduction of finger-scan-authentication for processing of transactions in CBS in addition to login passwords, stringent guidelines on password usage, STP processes between CBS and payment interface systems for transmission of messages are in place.


The Bank has an Inspection & vigilance department which is responsible for independently evaluating the adequacy and effectiveness of all internal controls, risk management systems, governance systems and processes. The Department is manned by appropriately qualified personnel to handle the Risk based internal audit, Management Audits, Information Systems Audit, and Special audits including Investigations. All the internal audits are conducted broadly based on the RBI direction in relation to conducting risk based internal audit and concurrent audit of branches and identified critical process of the branch.

Reporting structure of Head of Inspection and vigilance is made in such a way that matters relating to Inspection Division, he reports to Executive in charge of administration (presently EVP -Operations) and in relation to the matters of Vigilance Division he directly reports to MD & CEO.

Internal inspectors conduct inspection at regular intervals and the inspection reports are placed to Audit Committee at Executive level (Audit Committee of Executives - ACE) for review, which is overseen and controlled by Board Level committee (Audit Committee of Board - ACB).

Audit of Branches

All the branches are subjected to Risk based internal audit. (RBIA). This audit is conducted at periodical intervals based on its risk perception. All the audits are conducted based on check points and all the operational areas are covered under this audit. Credit audit is also conducted as part of Risk Based internal audit for all the major customers where the credit exposure is more than 5 crore, and are audited by specialized/experienced auditors.

In addition to RBIA of branches, the Bank has concurrent audit system which covers selected Branches, Concurrent audit of branches is being conducted by qualified Chartered Accountants/retired officers covering 60% of total business, 70% of total advances and 50% of total deposits of the Bank. The selection of branches for concurrent audit is done in such a way that it covers branches having substantial business, 'B' Category Branches and almost all isolated remote branches irrespective of its business volume.

The Bank has introduced special audit from April 2019, where audit is conducted by qualified Chartered Accountants/retired officers, in the remaining branches where concurrent audit is not done, on the critical areas for a limited period of time in a month.

In additions to the concurrent and risk based internal audit branches are subjected to surprise inspection, Revenue inspection, self-inspection, Gold Loan asset verification and compliance inspection.

During the financial year the Bank has introduced a separate monitoring team called 'Inspection Monitoring Group (IMG)' for closely monitoring various inspections/audits at the Branches. There are four IMGs and each IMG is headed by AGM/CM. These monitoring groups have exclusive responsibility to ensure the compliance and closure of the inspection reports of the branches. During the course of Inspections, any serious issues concerning regulatory guidelines, legal requirements and operational processes are escalated to the Management for timely action.

All the branch related audits are now automated, where reporting, risk rating, compliance and closure of the reports are done through automated system by which the Bank has an overall control related to the various audits conducted in branches. During the current financial year, the Bank has successfully automated credit audit, self-audit, gold asset verification and surprise inspection.

Audit of Departments and critical process

Management Audit of Regional Offices (RO) and Departments is conducted at periodical intervals based on its risk perception. Audit conducted through web based application and the risk assessment, rectification of comments etc. and its evaluation, monitoring and review are automated.

In additional to the Management audit conducted by Inspection Department all the critical operations such as International Banking Division, Treasury Department, and Credit Department and Centralized Processing Centers are subjected to concurrent audit by Chartered Accountants firms. All these reports are reviewed by Audit Committee of Executives and corrective steps are taken to rectify the lapses/irregularities pointed out in such inspections.

Information System Audit of CBS and major applications are conducted by internal audit department and also by external audit firms.

Any new product / process introduced in the Bank is reviewed by Inspection Department from the perspective of existence of internal controls and they recommends improvements for deficiencies in such internal controls.

Inspection Division also carries out independent evaluation of Bank's internal financial controls in terms of Companies Act, 2013 and the details in respect of adequacy of internal financial controls with reference to the Financial Statements.


The Statutory Auditors Report for the year 2018-19 does not contain any qualification.

On the observation made by Secretarial auditors in the secretarial audit report as well as Certificate on Corporate Governance, as per Regulation 18 (1) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, two-thirds of the members of audit committee are required to be independent directors. For a period of eleven days the audit committee consisted of three Independent Directors out of five members, which is slightly less than the requirement on account of fractional number. This occurred due to the rounding off to the nearest number. The committee was reconstituted on 08.04.2019 pursuant to which three out of four members were independent thereby complying with the requirement. The Exchanges have levied fine which was paid and the bank has represented to the Exchanges to waive the fine and refund the same.


A separate report profiling Corporate Governance as required under applicable regulations of the SEBI (LODR) Regulations 2015 and a certificate from M/s SVJS & Associates Company Secretaries, Secretarial Auditors of the Bank, are annexed to this Report.

Extracts of Annual Return

Pursuant to sub-section 3(a) of Section 134 and sub-section (3) of Section 92 of the Companies Act, 2013, read with Rule 12 of the Companies (Management and Administration) Rules, 2014 the extracts of the Annual Return as at March 31, 2019 in form No. MGT-9 is hosted on the website of the Bank and can be viewed

Business Responsibility Report

As stipulated in Listing Regulations, the Business Responsibility Report describing the initiatives taken by the Bank from environmental, social and governance perspective is attached as part of the Annual Report as annexure-F.

Dividend Distribution Policy

In accordance with the Regulation 43A of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Bank has formulated a Dividend Distribution Policy and the Policy is hosted on the website of the Bank and can be viewed (https://www. =215&LinkIdLv13=2672&linkId=2672)

Subsidiary Companies/Joint Ventures or Associate Companies

There are no companies which have become or ceased to be its Subsidiaries, joint ventures or associate companies during the year; The Board of Directors has formulated a policy for determining 'material' subsidiaries pursuant to the provisions of the Listing Regulations. The same is displayed on the website of the Bank ( content/viewContentLvl1.aspx?linkIdLvl2=215&LinkIdLvl3=781 &linkId=781).

Related Party Transactions

The Board of Directors has formulated a policy on materiality of Related Party Transactions and also on dealing with Related Party Transactions pursuant to the provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015. The same is displayed on the website of the Bank ( content/viewContentLvl1.aspx?linkIdLvl2=215&LinkIdLvl3=782 &linkId=782). Since there were no Related Party transactions, Form AOC-2 is not applicable to the Bank.

Material Changes and Commitment Affecting Financial Position of the Bank

There are no material changes and commitments, affecting the financial position of the Bank which has occurred between the end of the financial year of the Bank i.e. March 31, 2019 and the date of the Directors' report i.e. May 9, 2019.

Significant and material orders passed by Regulators

During the year under review, there are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Bank's operations in future.

Maintenance of Cost Records

Being a Banking Company, the Bank is not required to maintain cost records as per sub-section (1) of Section 148 of the Companies Act, 2013.

Details in respect of frauds reported by auditors

There is no fraud reported by auditors under sub-section (12) of section 143 of the Companies Act, 2013 other than those which are reportable to the Central Government.

Compliance to secretarial standards

The relevant Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI) related to the Board Meetings and General Meeting have been complied with by the Bank.

Srictures and Penalties

During the last three financial years, there were no penalties or strictures imposed on the Bank by the SEBI and any of the stock exchanges and/or any other statutory authorities on matters relating to capital market.

Management Discussion and Analysis Report

This has been dealt with in a separate section in the Annual Report.

Particulars of Loans. Guarantees or Investments

Pursuant to Section 186 (11) of the Companies Act, 2013, the provisions of Section 186 of Companies Act, 2013, except subsection (1), do not apply to a loan made, guarantee given or security provided or investment made by a banking company in the ordinary course of business.

Directors' Responsibility statement

Pursuant to the requirement under Section 134(5) of the Companies Act, 2013, with respect to the Director's Responsibility Statement, it is hereby confirmed that:

(a)    in the preparation of the annual accounts for the financial year ended March 31, 2019, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b)    the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year 2018-19 and of the profit of the Bank for that period;

(c)    the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Bank and for preventing and detecting fraud and other irregularities;

(d)    the directors had prepared the annual accounts for the financial year ended on March 31, 2019, on a going concern basis;

(e)    the directors had laid down internal financial controls to be followed by the Bank and that such internal financial controls are adequate and were operating effectively; and

(f)    the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.


The Board of Directors places on record its gratitude to the Reserve Bank of India, Securities and Exchange Board of India, Government of India, Government of Kerala and all other State Governments where the Bank operates, other Government and Regulatory Authorities, including stock exchanges, where the Bank's shares are listed and correspondent Banks for their strong support and guidance, during the year. The Board also places on record its gratitude to the Bank's shareholders and customers for their continued support, patronage and goodwill. The single most important pillar of any Institution is its personnel, more so in the case of a service entity like a Bank. The Bank gladly acknowledges this fact and thanks all of them for their diligence and loyalty towards the Bank. The Board expresses its sincere appreciation for the dedicated services rendered by officers and employees of the Bank at all levels.

By Order of the Board

(SALIM GANGADHARAN)                                                                                             (V G MATHEW)

CHAIRMAN                                                                                          MANAGING DIRECTOR & CEO

DIN : 06796232                                                                                                              DIN : 05332797

Place : Cochin

 Date : May 9, 2019


Director’s Report