REPORT OF THE BOARD OF DIRECTORS TO THE STATE BANK OF INDIA, THE RESERVE BANK OF INDIA AND THE GOVERNMENT OF INDIA IN TERMS OF SECTION 43(1) OF THE STATE BANK OF INDIA (SUBSIDIARY BANKS) ACT 1959 PERIOD COVERED BY REPORT : 1st APRIL, 2015 TO 31st MARCH, 2016 The Board of Directors of State Bank of Bikaner and Jaipur have pleasure in presenting this Annual Report together with the audited Balance Sheet and Profit and Loss Account of the Bank for the year ended 31st March 2016. MANAGEMENT DISCUSSION AND ANALYSIS ECONOMIC SCENARIO GLOBAL ECONOMY In 2015, global economic activity remained subdued. Global outlook was mostly influenced by gradual slowdown & rebalancing of economic activity in China, lower prices for energy and other commodities and gradual tightening in monetary policy in the United States, as several other major advanced economies' central banks continued to ease monetary policy. According to International Monetary Fund (IMF),Global growth, currently estimated at 3.1% in 2015, is projected at 3.4% in 2016 and 3.6% in 2017. The pickup in global activity is projected to be gradual, especially in emerging market and developing economies. In advanced economies, a modest and uneven recovery is expected to continue, with a gradual further narrowing of output gaps. These developments, together with market concerns about the future performance of the Chinese economy, are having spillovers to other economies through trade channels and weaker commodity prices, as well as through diminishing confidence and increasing volatility in financial markets. Manufacturing activity and trade remained weak globally, reflecting a subdued global demand and investment. In addition, the decline in imports in a number of emerging markets and developing economies in economic distress is also weighing heavily on global trade. Growth in emerging markets and developing economies is projected to increase from 4% in 2015, the lowest since the 2008-09 financial crisis, to 4.3% in 2016 and 4.7% in 2017, while, the growth in advanced economies is projected to rise to 2.1% and hold steady in 2017. INDIAN ECONOMY After revision in base year GDP calculation from 2004-05 to 2011- 12, India's GDP jumped from sub 5% growth to 7% plus to become world's fastest growing economy (7.3% in Q3 2015-16, better than China’s 6.8%). The Indian economy in the current fiscal is expected to grow at 7.4%, slightly lower than 7.6% projected. However, government has forecasted that GDP for the fiscal year 2015-16 would grow by 7.6%. Forecasts from the World Bank showed that India will be a bright spot amid a gloomy outlook for developing countries in the next two years and predicts it will grow at 7.9% by 2018. India would benefit on the backdrop of a reduction in external vulnerabilities, a strengthening domestic business cycle and a supportive policy environment. Indian currency saw weakness due to global economic slowdown, weak commodity prices, falling of crude oil prices, contraction of India’s exports and large amount of selling by FIIs in stock market. The year 2015 saw FIIs being net sellers with total pull out amounting to Rs.32985 crore till Feb’16 from equity bringing Sensex down to 17 month low of 22494.61 from its record high of 30000. India’s forex reserves, however, were of some respite as it stood at its all time high range of above $350 bn. On the inflation front, WPI stayed in the negative for fifteen straight months till Jan’16, though, it is showing an upward movement from all time low of (-) 5.06% in Aug’15 to (-) 0.73% in Jan’16. Combined CPI also, after witnessing an all time low of 3.69% in July’15 increased to 5.69% in Jan’16, due to persistent services inflation, but was comfortably below RBI’s CPI inflation target of 6%. BANKING INDUSTRY 2015-16 was the continuous second year witnessing low credit offtake and increasing stressed assets for the banks. One of the main reasons for the muted advances growth was subdued global demand for the export goods resulting in low consumption and lower capacity utilization. The low credit growth scenario may also be attributed to the corporates opting for fund raising through the commercial paper market and overseas sources, where rates are lower than base rate of Indian banks. Even in this period of corporate stress, retail credit growth as per sectoral deployment of credit kept the banks at comfortable position with a growth of over 15% and relatively low NPAs. Aggregate deposits of the SCBs showed growth of 11.3% in the current fiscal as against previous year growth of 10.7%, while advances growth stood at 11.5% against 9.6% previous fiscal. The asset quality concerns continued to build up, because of the overall trade and demand slowdown bottleneck. As per FSR of Dec’15, the Gross NPAs of the SCBs increased from 4.6% in Mar’15 to 5.1% in Sept’15. The stressed assets touched another high of 11.3% in Sept’15 up from 11.1% in Mar’15, while PSBs stressed assets stood high at 14.1% in Sept’15. The year had been very challenging on the asset quality front. There has been a surge in bad loans and provisions after RBIs Asset Quality Review directing the Banks to reclassify loans and set aside more money against stressed assets. The next year 2016-17, by which time RBI expects banks to recognize all stressed assets & make provisions to cover them will be equally challenging for the industry. OUTLOOK In the current fiscal, RBI gave the economy a respite of 75 basis points in the form of key rate cuts. However, out of the total 125 bps cut given by the Central Bank in the last one year, Indian banks could bring down the average Base rate cut by 70 bps due to squeezing profit margin. For FY 2016-17, RBI expects the growth to strengthen gradually on the backdrop of normal monsoon, positive terms of trade gains, improving household incomes and lower input costs of firms and projected the GDP growth at 7.6%. At the beginning of FY 2016-17, market is expecting a rate cut of 25 to 50 bps on the backdrop of fiscal consolidation measures of the current government. In the current budget, government has kept the fiscal deficit for 2016-17 at 3.5% giving RBI headroom to cut key rates. The current year may witness some revival in credit demand on the backdrop of trickledown effect of clearance of stalled projects and increased investment in infrastructure by the government. OPPORTUNITIES & THREATS Indian economy is the fastest growing economy in the world. However, the current growth is still short of the mark required by the nation to improve job creation and social stability. A sluggish rural economy is being considered as one of the important reasons for subdued growth in the economy. Any improvement in rural demand, middle class consumption pattern and increased investment is expected to witness recovery in the economy. Improvement in credit growth is mostly bolstered by the increased focus on retail segment by the banks. Of late, the agriculture sector has emerged as a big consumer class, owing to increased farm mechanisation and better remunerative prices for agricultural produce as also compensation in lieu of land acquisition. The rise in the infrastructure projects and clearance of stalled projects in the country has the ability to spur the growth cycle by way of multiplier effect on overall business growth in the economy. The “Make in India” campaign, “Stand-up India” and other similar initiatives being aggressively pursued by the Government and increased investment in infrastructure in the current budget is likely to bring in further domestic and overseas investment in this sector. While there are many opportunities for the banks, especially the public sector ones in the form of latest government initiatives, there are some inherent threats as well in the form of pressure on profitability, decline in asset quality and increasing competition, which is driving down the margins. The banks have not only to get themselves out of the current situation and try to make the best out of the available resources, but also to consistently improvise, invent and innovate for staying ahead of their peers. The new banks in the Small Bank & Payment Bank category will also start their operation in FY-2016-17. Though they will help further deepen the banking services, they will also give competition to the already existing banks. In the time of stress, these banks will start their operations on a clean balance sheet and would, thus, be focusing on business growth as compared to others who have to focus on maintaining asset quality, recovery etc along with business. STRESS AND MITIGATION The year 2015-16 was another year of stress for banking sector. The NPAs increased to Rs.4 lakh crore, while the stressed assets of the banks crossed Rs.8 lakh crore. The announcements of RBI intending to clearing the stress on balance sheet of the banks by 2017 and the consequent AQR list further increased the pressure on the banks. In the fiscal 2015- 16, banking industry continued to record the highest stressed advances ratio. The five main subsectors of the industry viz, mining, iron & steel, textiles, infrastructure and aviation, which together constituted 24.2% of the total advances of SCBs contributed to 53% of the total stressed advances. Agriculture segment is also witnessing stressed scenario continuously for last two years due to drought and hailstorm situation in many of the states. This has adversely affected the repayment capacity of the farmers resulting in stress in this sector, particularly in the affected states. However, various measures have been taken by the Central Government towards removing of infrastructure bottlenecks, clearing of stalled projects, giving boost to the manufacturing industries etc. Many of the initiatives of the Government like, “Indradhanush”, the seven pronged plan to revamp Public Sector Banks, also aims at reducing the banking stress, forming opinion on improving asset quality, infusing capital in the state run banks, preparing the banks to face the ongoing as well as future problems etc. These government initiatives are expected to not only support the banks but also pull the industries out of the distress and provide a road map for further development helping the nation achieve a high growth rate scenario. Banks are also working profusely towards reducing stress level by strong recovery efforts, providing support for genuine projects and by selling of stressed assets to ARCs on the case to case basis. Besides this, the banks are giving full support to the government schemes and initiatives for growth of the industry. RAJASTHAN ECONOMY Rajasthan is the largest state in India in terms of area having tremendous opportunities in the areas of organic and contract farming as well as infrastructure developments related to agriculture. Rajasthan is richly endowed with natural resources, making it an attractive investment destination for extraction activities, as well as mineral-based manufacturing such as cement, ceramics and glass. Rajasthan accounts for 17.5% of the total cement grade limestone reserves in India and is the largest cement producer with 21 major cement plants. Rajasthan is the leading producer of limestone, silver, marble, sandstone and lignite. It is also second largest producer of the milk in India. Rajasthan has emerged as an investment destination with 23% of the NCR area and 39% of Delhi-Mumbai Industrial Corridor falling in the state. With the area of industrial zone increasing and more industries being established in the areas like, Neemrana, Gheelot, Khushkhera etc, the state is on the road to become major industrial hub in the country. Rajasthan has also become the fifth state to unveil a Startup Policy, highlighting the importance and role of start ups in the economy. The Rajasthan Startup Policy 2015 came into force w.e.f. 09th Oct’15 and will remain in operation for a period of five years targeting innovative startups to grow in the state through support and incubation. The gross state domestic product (GSDP) of Rajasthan expanded at a compound annual growth rate (CAGR) of 12.8% over 2004-05 to 2014-15. At current prices 2014- 15, GSDP of Rajasthan stands at 11%. The state has immense potential for electricity generation through renewable energy sources and wind power. As of January 2016, Rajasthan had a total installed power generation capacity of 17,784 megawatt (MW). Rajasthan has also introduced Solar Energy Policy to reduce dependence on conventional sources of energy by promoting the development of non-conventional energy sources, especially solar power. Recently, Rajasthan Government approved a bill to accelerate industrial investment by preparing master and development plans in special investment regions. Government initiatives like implementing Startup Policy, Make in India Scheme, MSME Policy for small and medium industries, Resurgent Rajasthan Conclave has uplifted the overall investment and economic scenario of the state. CORPORATE OPERATIONS BUSINESS PERFORMANCE The overall business of the Bank (deposits plus gross advances) reached a level of Rs.168748 crore as at end-March 2016 as against Rs.155392 crore as at end March 2015, recording a growth of Rs.13356 crore (8.59%). The total deposits increased by Rs.9766 crore (11.59%) to reach a level of Rs.94005 crore while gross advances increased by Rs.3590 crore (5.05%) to reach a level of Rs.74743 crore by end- March 2016. The cost of deposits of the Bank decreased from 7.01% in 2014-15 to 6.76% in 2015- 16, while the yield on advances also decreased from 10.98% to 10.70%. CASA deposits recorded a growth of 11.17% but the CASA ratio was at 38.70% as compared to 38.85% as at Mar’15. TREASURY AND INVESTMENTS In its monetary policy stance for the financial year 2015-16, Reserve Bank of India had focused in containing the inflation which remained in line with the projections. Fiscal deficit was contained at 3.9% for FY2015-16. With CPI under control, Reserve Bank of India cut the policy repo rate in phases from 8% at the beginning of the year to 6.75% by the year-end, a reduction of 125 bps during the year. This helped in keeping the domestic interest rates under control despite a 25 basis points hike in US Federal rates in December 2015. More than the domestic economic conditions, Indian bond, equity and forex markets were influenced by global considerations. While Greece economic crisis saw it defaulting in debt repayment to IMF before being bailed out by European Union, continuous fall in crude prices and slowdown in Chinese economy all pointed out to recessionary trends globally. In India, sovereign 10- year bond which was at 7.74% in the beginning of the year ended at 7.46% by the year end but the equity market was hit badly with fall in major indices, BSE Sensex by 9.35% and NSE Nifty50 by 8.87% during the year. The Bank adopted a cautious approach in trading in bond and equity market and as at 31st March 2016, Bank’s investment portfolio rose by Rs.2643.75 crore to Rs.24782.37 crore reflecting a growth of 11.94 %. While the total income from investments grew by 10.52% to Rs.2186.41 crore, profit from trading/sale of investment rose by Rs.54.01 crore to Rs.208.03 crore, registering an increase of 35.06%. The yield on investments stood at 7.71 % and after including trading profit, total return on investments stood at 8.53% for the year. FINANCIAL HIGHLIGHTS NET INTEREST INCOME The Bank’s total interest income increased from Rs.9005.45 crore during 2014-15 to Rs.9592.47 crore during 2015-16, recording a growth of 6.52%. Interest expenditure increased by 3.70% to Rs.6288.13 crore, as against Rs.6064.02 crore in the previous year. The net interest income recorded a growth of 12.34% to Rs.3304.34 crore, as against Rs.2941.43 crore in 2014-15. The net interest margin (NIM) stood at 3.47% at the end of March 2016. NON INTEREST INCOME The non-interest income of the Bank has increased by 14.10% from Rs.926.39 crore of 2014-15 to Rs.1057.05 crore during 2015-16. The increase during the year as compared to the last year is mainly on account of increase in other commission by Rs.131.77 crores and profit on sale of Investment by Rs.54.02 crore. OPERATING EXPENSES The operating expenses of the Bank has increased by 16.59% from Rs.1763.71 crore in 2014-15 to Rs.2056.36 crore during 2015-16. Of this, employee costs increased by 19.26% to Rs.904.00 crore, while total other operating expenditure increased by 23.92% to Rs.930.37 crore. PROFIT During 2015-16, the operating profit increased to Rs.2305.03 crore (by 9.55%) as against Rs.2104.11 crore in the previous year. The net profit also recorded a growth of 9.49% from Rs.776.87 crore in 2014- 15 to Rs.850.60 crore in 2015-16. DIVIDEND For the year 2015-16, the Bank declared Dividend of 143% i.e.Rs.14.30 per equity share (face value of Rs.10/- per share). For ascertainment of entitlement of shareholders for Dividend, shareholders register will be closed from 07.05.2016 to 11.05.2016 (both days inclusive). KEY FINANCIAL INDICATORS The return on assets of the Bank stood at 0.83% during 2015-16 as against 0.84% in the previous year. The return on equity (ROE) stood at 12.61% at the end of March, 2016. The earnings per share increased from Rs.110.98 in 2014-15 to Rs.121.51 in 2015-16, while the book value per share improved from Rs.858.95 in 2014-15 to Rs.963.26 in 2015-16. As at end-March 2016, the capital adequacy ratio of the Bank stood at 11.33% and 11.06% as per Basel-II and Basel III norms respectively, as against 11.69% and 11.57% as per Basel- II and Basel III norms respectively, as at end-March 2015. This was well above the RBI benchmark of 9.625%. Due to rise in NPAs on account of continued stress faced by the industrial sector, the Bank’s Gross NPA ratio and Net NPA ratio increased from 4.14% and 2.54% as at end-March 2015 to 4.82% and 2.75% respectively, as at end- March 2016. The average business per employee increased to Rs.12.15 crores during 2015-16 as against Rs.11.00 crores in the previous year. The net profit per employee improved to Rs.6.60 lakh during 2015-16, compared to Rs.6.02 lakh during 2014-15. The average business per branch increased to Rs.128.23 crore during 2015-16, as against Rs.123.22 crore in the previous year. CREDIT MANAGEMENT The overall credit demand remained muted during the FY 2015-16 with GDP growth in sub 7.4% range due to overall slowdown in the economy leading to lower level of investment activity. However, the Bank continued to focus on qualitative credit growth and faster credit delivery. Total advances of the Bank grew by 5.05% during 2015-16, as against growth of 8.91% during 2014-15. The Bank’s Commercial & Institutional (C&I) segment advances (other than food credit) during the FY 2015-16 reduced by 6.96% with a decrease of Rs.2520 crore over FY 2014-15, whereas non C&I segment comprising personal, small business and agricultural advances grew by Rs.6109.61 crore (17.48%). In the backdrop of stress in the various segments of the industry, the impetus of financing remained mainly towards top rated PSUs and other sectors such as Real Estate (RH), textiles and NBFCs etc. In view of the prevailing competitive and stretched market scenario, closer interaction and regular meetings by the Top Management with high value customers were held at major centers in the country which resulted in booking several good advances. PERSONAL BANKING Personal Banking Segment continued to be the thrust area of the Bank in FY’16. Bank strengthened its retail portfolio by placing special emphasis both on asset as well as on the liability side and also improved customer satisfaction. On the liability side focus was placed on garnering higher share of retail CASA. A number of initiatives were undertaken during the year for strengthening and reviving the relationship with existing customers for improving CASA deposits. The Bank’s retail operations have recorded a robust growth during the year 2015-16. Acquisition of new customers continued to remain one of the focus area consequently resulting in increase of customer base with opening of 30.01 lacs new CASA accounts during the year. In Personal Segment lending, Bank was committed to fine tune the products and service delivery to the market expectations. Bank placed added thrust on retail business to make its loan-book more balanced. To achieve this, Bank introduced special measures to increase the attractiveness of its products. Under Home Loans, new schemes were introduced such as Affordable Housing loans and SBBJ Trust. Pension Loan and Education Loan were re-launched with improvements. SBBJ Solar loan scheme, SBBJ Grih Alankar and SBBJ Easy Car loan are the other loan schemes introduced during the FY’16. AGRICULTURE Lending to agriculture remains one of the major thrust areas of the bank. The outstanding level of agriculture advances increased from Rs.11927 crore as at the end of March 2015 to Rs.13399 crores as at the end of March, 2016 and registered a growth of 12.34%. Our bank’s total direct agriculture lending is 83.34% of total agriculture advances. The flow of credit in agriculture stood at Rs.12432 crores against the annual target of Rs.13748 crores, i.e. an achievement of 90.42% for the financial year 2015- 16. Agriculture advances constitute 22.51% of the (ANBC), against RBI benchmark of 18%. The bank has issued 102791 Kisan Credit Cards (KCC’s) with sanctioned limit of Rs.2651 crores during the period under review. The total number of KCC’s stood at 6,00,887 as at end of March, 2016. MICRO, SMALL AND MEDIUM ENTERPRISES (MSMEs) The Micro, Small and Medium Enterprises (MSME) Sector contributes in a big way to the growth of Indian Economy with a vast network of 5.77 crore units, creating employment for more than 8 crore people, manufacturing more than 6000 products, contributing about 45% of manufacturing output and about 40% of exports. The Bank gives due importance for the growth of this vital segment of the economy. As on 31st March 2016, Bank's total exposure to Micro, Small and Medium Enterprises (MSME) sector is Rs.13178 crore in more than 171000 MSME units. MSME Segment is one of the key growth areas identified by the Bank, which constitutes more than 17.63% of Bank’s total advances. During the year, Bank has sanctioned credit facilities to more than 64900 new MSME units amounting to Rs.3323 crore, out of which loans up to Rs.10 lacs given to MSE units are Rs.1553 crore. Bank is extending collateral free loans up to Rs.1.00 crore to MSE sector under CGTMSE Scheme of Credit Guarantee Trust, which provides 50% to 85% guarantee cover on eligible MSE. Bank has covered 7802 accounts amounting to Rs.238 crore during the FY 2015- 16 under CGTMSE. PRIORITY SECTOR LENDING (PSL) The Priority Sector Advances of Bank is 41.52% of the Adjusted Net Bank Credit (ANBC) as at the end of 31st March 2016, as against the RBI stipulation of 40%. In value terms priority sector advances stood at Rs.29677 crore as against Rs.27844 crore as at the end of March 2015. In line with RBI /GOI directives/ policies, lending to Priority Sector Advances is Bank’s prime concern for equitable and sustainable economic development of the neglected sectors of the economy. To meet the specific need of this sector, Bank is sensitizing the operating functionaries from time to time to give special attention to Agriculture, MSE, Education, Housing, Export Credit etc. PROGRESS UNDER FI PLAN (2013- 16) As per RBI FIP Plan (2013-16), the Bank was required to cover 7348 villages of population less than 2000 up to 31.03.2016 and all these villages have been covered by BC/ Branches. As against the target of opening of 490 rural branches up to 31.03.2016, the Bank has opened 508 rural branches. 18,47,754 accounts have been opened through BC channel against the target of 7,50,000. PROGRESS UNDER PMJDY The bank took the PMJDY Scheme announced by the Hon'ble Prime Minister in true spirit and 35.30 lac accounts have been opened under PMJDY, out of which 17.85 lac accounts are in rural areas and 17.45 lac accounts are in urban areas. Deposits of Rs.892.16 crore have been mobilised and 31.36 lac RuPay cards have been issued under PMJDY up to 31.03.2016. Percentage of zero balance accounts is 26.95%. As on 31.03.2016, Rs.54.25 lac in 1754 accounts has been extended by SBBJ to the Jan Dhan account holders in the form of overdraft with maximum limit of Rs.5000/-. RuPay debit card, the Indian version of Mastercard or Visa debit cards, having inbuilt accidental insurance cover of Rs.1.00 lac is available to account holders. PROGRESS UNDER PMSBY/PMJJBY/APY Three social security schemes namely PMSBY, PMJJBY & APY were launched by the Hon'ble Prime Minister during the financial year. SBBJ has registered 5,61,362, 1,68,216 & 27,414 applications in PMSBY, PMJJBY & APY respectively. Branches have organised regular camps & login day to source maximum applications of these schemes. The claims received in PMSBY & PMJJBY are settled timely. Till 31.03.2016, 54 claims in PMSBY & 275 claims in PMJJBY have been settled by SBBJ. During the FY 2015-16, PFRDA has awarded SBBJ as 3rd best performing bank in the PSBs category under APY Phase-II. STATUS OF SSA COVERAGE The Bank has been allotted 1948 SSAs (Sub Service Area) in our Service Area in Rajasthan & in other States. Out of this, 1935 SSAs are in Rajasthan. The Bank covered all these SSAs either by opening of Branches or by engagement of Corporate/ Individual BCs. FINANCIAL LITERACY The Bank has 9 FLCCs in its Lead District and during the financial year, up to 31.03.2016, 701 counseling camps have been organised and 63,418 people counseled in such programs. Out of these, 20,816 people are linked to banking system and 11,249 people have benefited with credit linkage. Our rural branches regularly meet the villagers and hold financial literacy camps. Wide publicity is ensured and financial literacy material is distributed in those camps. DIRECT BENEFIT TRANSFER (DBT/ DBTL) All our branches are enabled for individual & bulk seeding of Aadhaar numbers in accounts. Our nodal branch for DBT is uploading the seeded data on NPCI mapper on daily basis. Till 31.03.2016, a total number of 48,23,473 Aadhaar have been seeded. Out of total 35,30,374 PMJDY accounts, Aadhaar have been seeded in 19,80,098 accounts. Till 31.03.2016, a total number of 2,49,79,124 DBT/DBTL records have been received, out of which 2,45,98,445 records have been processed. LEAD BANK SCHEME As per directions of RBI, our Bank has Lead Bank responsibility in nine districts in the State of Rajasthan viz. Bikaner, Barmer, Hanumangarh, Jaisalmer, Jalore, Pali, Sirohi, Rajsamand and Udaipur. The Bank has been implementing and monitoring the Annual Credit Plan and other developmental and poverty eradication schemes launched by the Govt. of India, Govt. of Rajasthan and NABARD. Targets allotted in 9 Lead Districts for Annual Credit Plan to our Bank for the year 2015-16 was Rs.6382.58 crore, against which achievement of our Bank in these lead districts up to March, 2016 is Rs.6831.98 crore, achieving 107% of the annual targets. MICRO CREDIT (SHGs) Up to the end of March, 2016 the Bank has credit linked a total of 45965 Self Help Groups with limit sanctioning amount of Rs.209.36 crore, out of which 37426 accounts are of women beneficiaries with limit sanctioning amount of Rs.175.62 crore. Our Bank has been awarded First Prize in Commercial Banking Category for excellent performance in SHG, as per “Status of Micro Finance” by NABARD, Jaipur during the State Level Felicitation Programme held on 9th March, 2016. RURAL SELF EMPLOYMENT TRAINING INSTITUTES (RSETI) In order to impart job- oriented skills to rural unemployed youth, the Bank has set-up eight RSETIs at Bikaner, Hanumangarh, Barmer Jaisalmer, Jalore, Pali, Sirohi and Nathdwara (Distt. Rajsamand). By the end of March, 2016, 46152 candidates have been imparted training for various local demand jobs in these institutions and 5231 trained candidates have been engaged in various jobs and 16673 trained candidates have started their own ventures. 11519 trained candidates have been credit linked amounting to Rs.7635.30 lac. Our all eight (8) RSETIs got “AA” grading, conducted during the year. RSETI Bikaner was awarded Third Prize by the MoRD, GoI, New Delhi for excellent performance on the occasion of RSETI Diwas at New Delhi held on 15.07.2015. GOVERNMENT SPONSORED SCHEMES Laying utmost emphasis on Government sponsored schemes, the Bank continued to play a pioneering role in financing entrepreneurs under various government sponsored schemes. Under National Urban Livelihood Mission (NULM scheme), the bank sanctioned amount of Rs.569.69 lacs to 765 beneficiaries. Similarly, under Prime Minister Employment Generation Programme (PMEGP) an amount of Rs.2814 lacs was sanctioned to 553 beneficiaries, under POP amount of Rs.1216 lacs to 3484 beneficiaries and Rs.345.88 lacs to 330 beneficiaries under National Rural Livelihood Mission (NRLM scheme). REGIONAL RURAL BANK Rajasthan Marudhara Gramin Bank (RMGB) has come into existence on 01.04.2014 with the amalgamation of the erstwhile Marudhara Gramin Bank (MGB), sponsored by SBBJ and Mewar Anchalik Gramin Bank (MAGB), sponsored by ICICI Bank. The Head Office of the Bank is at Jodhpur. The Bank is playing vital role in the economy of 15 districts of their area of operation by extending financial assistance to both priority and non priority sectors. SBBJ provides managerial support and financial assistance by way of refinance etc. to RMGB. All branches of RMGB are on CBS platform and provide Electronic Fund Transfer facility. RMGB has installed its five on site ATMs and one mobile ATM for providing door step banking facility to its customers. RMGB has deposits of Rs.7290.26 crores and advances of Rs.5507.52 crores as on March, 2016. GOVERNMENT BUSINESS The Bank conducts Government Business on behalf of State/Central Government departments through 306 Authorized Branches. Income Tax, Central Excise, Service Tax, Value Added Tax (VAT) etc. are collected through physical challans and also through the electronic mode. The Bank has established a Centralized Pension Processing Centre (CPPC) which calculates as well as credits pension to the accounts of pensioners across all the Branches. We also have an Online Treasury Branch for online payment of salary of Rajasthan Govt. employees on behalf of the State Govt. Presently, our Online Treasury Branch is processing 35.71 lacs State Govt. transactions received through 23175 digitally signed files in a month. During 2015-16, the commission income from Government business was Rs.99.51 crore. INTERNATIONAL BANKING The Bank provides Foreign Exchange related services to exporters/ importers, other resident and non-resident customers through a network of 61 Authorized Category "B" branches, all category ‘C’ branches and 4 Trade Finance Central Processing Centres (TFCPC). Bank's forex dealing room at Mumbai and all the authorized category ‘B’ branches are equipped with infrastructure of latest technology for real-time communication and are connected through SWIFT network with more than 750 offices of foreign banks throughout the world. The Bank maintains 20 NOSTRO accounts in all major currencies and non account correspondent banking relationship with all major banking groups in the world. To facilitate NRI customers for inward remittances, there is online remittance facility and tie-ups with 4 Gulf based Exchange Houses. Our 231 branches are authorised for payment of Western Union Money Transfer. The Bank also undertakes proprietary Forex trading to increase profit by taking advantage of market movements. Our Merchant forex turnover stood at Rs.30065.80 crore at the end of March 2016, as against Rs.31186 crore for the same period in last financial year representing a decline of Rs.1120.20 crore (-3.59%) during the year. Our NRI deposits stood at Rs.2116.89 crore at the end of March 2016 against the base of Rs.1630 crore in March 2015, registering a growth of Rs.486.89 crore (29.87%). Our export credit stood at Rs.2438.46 crore at the end of March 2016 as against Rs.2544 crore of March 2015, recording a decline of Rs.105.54 crore (-4.15%) during the financial year. The Bank chairs the local chapter of Foreign Exchange Dealers' Association of India (FEDAI). The Bank is an active member of FEDAI, International Chamber of Commerce (ICC) and Clearing Corporation of India Limited (CCIL). INDUSTRIAL REHABILITATION As at end of 31st March, 2016, the Bank had 17 large sick /weak units on its books with aggregate outstanding of Rs.275.26 crore. There are 31 Corporate Debt Restructuring cases with aggregate exposure of Rs.2533.72 crore and 23 BIFR cases with exposure of Rs.1073.86 crore. The Bank has been acting as BIFR's Operating Agency in 4 cases. During the year under review, 1 account with aggregate exposure of Rs.35.42 crore has been restructured under CDR mechanism as warranted basically by the tight economic scenario. There are 5 Strategic Debt Restructure (SDR) Scheme cases with aggregate exposure of Rs.1046.88 crore as on 31st March, 2016. NPA MANAGEMENT NPA management of the Bank continues with its multipronged strategy of controlling Non- Performing Assets (NPAs) through intensive monitoring of large value accounts and close follow up is carried out by adopting following measures: 1. Recovery: By adopting legal remedies available to the Bank under RODA, SARFAESI and DRT etc., recovery is effeted in NPA accounts. Templates are in place for regular updation and monitoring of SARFAESI and DRT cases. Due emphasis has been given to follow-up with Courts and filing of Execution Petitions. During the year, Recovery Camps, Bank Adalats and Lok Adalats were organized for NPA recovery, the results of which were encouraging. Recovery camps are being held in every village on a regular basis. The progress in NPA/ AUC recovery is being reviewed by the Management Committee regularly. The accounts in SMA/ Probable NPA category are also being reviewed at various platforms including video conferencing at Head Office and at Zones to devise strategies to prevent any account slipping into NPA. The “Loan Tracking Centers” monitor/ track the irregular standard accounts right from the first day of irregularity. Pre-emptive measures are undertaken as per RBI guidelines. 2. Compromise: Bank has initiated various compromise schemes like Vishesh Rin Mukti, Samjhouta Manch, OTS scheme for Agriculture Term Loans as also for Small Borrowers upto Rs.10.00 lacs to reduce NPAs. 3. Sale to ARCs: Non Performing Assets are also being sold to ARCs for reducing stressed assets level of the Bank after careful analysis of the impact on the balance sheet of each account thus sold. 4. Write Off: NPA accounts, where sufficient provisions have been made over the years, are written off to clean the asset portfolio after observing the RBI/ Govt. guidelines in this respect. 5. Restructuring: Flexible structuring of eligible loans, under 5X25 scheme of RBI, are carried out and also Strategic Debt Restructuring (SDR) is considered in cases of failure of rectification under Corrective Action Plan (CAP), as decided by JLF, to effect change of Management of the borrower company. These initiatives help the Bank in containing the accounts turning into NPA. At the end of March 2016, gross NPA ratio of the Bank stood at 4.82% and Net NPA ratio stood at 2.75%. RISK MANAGEMENT STRUCTURE OF THE BANK The Bank has an independent Risk Management Framework in place. At the apex level, there is a Risk Management Committee of the Board (RMCB), which oversees the policies and strategies for Risk Management in the Bank. Asset Liability Management Committee (ALCO), Credit Risk Management Committee (CRMC), Market Risk Management Committee (MRMC), and Operational Risk Management Committee (ORMC) provide support to RMCB. These subcommittees place all critical issues/ development in their respective areas before the RMCB. The Bank has Policies for identification, measurement and management of major risks and liquidity risk, credit risk, market risk, and operational risk. These policies are reviewed and updated from time to time, keeping in view of the dynamic business environment. RISK MANAGEMENT FUNCTION A comprehensive Asset Liability Management (ALM) System is in place for effective management of Liquidity Risk and Interest Rate Risk, which are identified, measured and monitored by the ALCO through the prescribed statements, viz. Statement of Structural Liquidity, Stress Testing on Liquidity and Earnings, Liquidity Coverage Ratio (LCR) etc. ALCO discusses these statements in detail and takes corrective actions whenever necessary. As per the Bank’s ALM Policy, a Contingency Funding Plan is reviewed on a quarterly basis. Bank’s Benchmark Lending Rates (Base Rate and BPLR) and Card Rates for Deposits are discussed and decided by the ALCO. The ALCO also discusses the economic developments and monitors the changes in the market on an ongoing basis. Market Risk is largely managed through adherence to various policies, in the conduct of the investment and trading activities along with adherence to various risk limits like position limits, stop loss limits, Management Action Trigger (MAT) and Cut Loss Triggers (CLT) through constant monitoring of the risk positions. Scenario Analysis on market risk events are conducted regularly as per the Stress Testing Policy of the Bank to assess resilience of Investment portfolio. For Credit Risk management, the Bank has a structured and standardised credit approval process which includes comprehensive credit rating of proposals. In order to control the magnitude of credit risk, internal and prudential norms on benchmark, financing ratios, single borrower or borrower-group exposure, industry specific and sector-specific exposure, exposure to sensitive sectors, hurdle rate for taking a fresh exposure etc. have been set up. Credit appraisal systems and a clearly defined delegation of powers form an integral part of the Bank's Loan Policy. One of the major tools for managing operational risk is to put in place a well established internal control system, which includes segregation of duties, clear management reporting lines and adequate operating procedures. The Bank has suitable systems and procedures for managing and controlling operational risks. BASEL-III CAPITAL FRAMEWORK Basel-III capital framework has come into effect from April 01, 2013 and shall be fully implemented by 2019. Accordingly, the Bank is computing Capital to Risk Weighted Assets Ratio (CRAR) as per Pillar-I of Basel-III Framework. With a view to improve market discipline under Pillar 3 of Basel-III framework and to improve transparency of capital base, Basel-III Disclosures have been made by the Bank in the Comprehensive Annual Report as also on Bank's website. Bank plans to migrate to advanced approaches of Basel-II guidelines for Credit, Market and Operational Risks in prescribed phased manner. RECONCILIATION OF INTER OFFICE TRANSACTIONS As per RBI guidelines, all the entries need to be reconciled within a period of six months from the date of their origin. By the end of March 2016, the Bank had reconciled all Inter-Branch debit transactions, originated till 29.02.2016 i.e. well before the time limit of six month prescribed by the RBI. The Bank is further committed to perform better and aim to reconcile the entries within two months period from the date of their origin. INFORMATION TECHNOLOGY Bank is providing hi-tech state of the art services through well established CBS platform across all the branches. Value Added Services like multi functional ATMs, Internet Banking, Mobile Banking, flexi deposit scheme, multi city cheque facility, instant credit of local and outstation cheques, ECS facility etc. for all type of Debit/ credit transactions in CBS, e-KYC for creation of new customers has been introduced in CBS and now customers having Aadhaar number need not bring any documentary proof for opening of new accounts. The Bank has undertaken a host of IT initiatives such as: E-Lobby: 14 e-lobbies with state of the art technology added services have been rolled out at various locations to attract the young generation & accustomed customers with latest technology driven initiatives. The Bank has rolled out one of the largest e-Lobby in Rajasthan state at SMS Highway Jaipur Branch. Automated Teller Machines (ATMs): Bank has installed 212 ATMs during the year taking the total number of ATMs to 1954. All the ATMs are connected to the network of State Bank Group ATMs, thereby enabling more than 1.19 crores card holders of the Bank to have free access to over fifty seven thousand ATMs of the State Bank Group all over the country. In addition to 48 Cash Deposit Machines (CDMs) installed till last year, Bank has installed 41 Cash Recyclers including 3 CDMs which were converted to recycler in this financial year. During the year 2015-16, Bank installed ATMs at 30 Bus-stands/ workshops of RSRTC across Rajasthan, facilitating travellers to withdraw cash. Bank also installed 18 ATMs in all stations of Jaipur Metro Rail. Mobile ATM Van: Bank has launched 2 mobile ATM vans at Jaipur & Udaipur, to facilitate door step services to the card holders and make them aware about the Bank’s Deposits & Loans Schemes and various alternate delivery channels. Internet Banking: Internet banking facility is made available to our retail as well as corporate customers. Looking to the rapid increase in the usage of Internet banking worldwide, the Bank has introduced several new features during the year. Apart from own account and third party transfer within bank, customers from the comfort of their home or office can transfer funds to other banks online. Retail Internet Banking facility for visually challenged persons has also been made available. Online SB account opening through SBBJONLINE is also available for Retail customers. For Corporate customers, facility for opening online e-TDR/ STDR and a new facility 'SB - Collect', for on line collection of funds has been provided. For Corporate customers, mode of Digital Signature Certificate has been enabled for securing online payments State Bank Anywhere - Associate Banks: “State Bank Anywhere- Associate Banks” has been launched by the Bank for retail internet banking users. The Application is available at Google Play store and is also available for IOS platform. Facilities like funds transfer to Own A/c/Intra Bank/ Interbank, online creation of e-RD/ e-TDR/e-STDR, Bill Payments etc. are also available. Bill Payment Through Internet Banking: Bank is providing utility bill payment for various initiatives such as Telephone bill, Insurance premium, payment of fees and donations to Siddhi Vinayak Temple through Internet Banking. SBBJ Instapay is a Centralized solution where no prior registration is required has been made available. Green Remit Card Plus (GRC+): Bank has rolled-out the Green Remit Card Plus (GRC+) initiative to Non-Home Branch Cash Deposit transactions. Walk-in customers, not having bank account (e.g. migrant workers) can apply and use GRC+ card at any AB branch. Through GRC+ card, they can remit cash to Beneficiary holding account with any SB Group branch. Self Service Kiosk (SSK): SSKs have been installed at various branches of our Bank and customers can perform financial and non-financial transactions such as passbook printing, Balance enquiry, funds transfer etc. using State Bank ATM cum- Debit Cards at these SSKs. The SSK solution has user friendly touch screen based customer interface. Core Banking Solution (CBS): All our branches are running successfully on Core Banking Solution since 2005. SMS alert is sent to customers who opts for SMS alert service and where mobile no. is registered with the Bank regarding transactions in the account, due date of installments etc. Missed Call Banking (SBBJ Quick): Through this service, which is introduced in FY 2015-16, our Savings and Current/Cash Credit Account holders, who have got their mobile numbers registered under CBS, can get information of latest balance or last five financial transactions in their account, just by giving a missed call on a toll-free number. Processing of pan-India MGNREGA Payments: We have implemented National e-FMS (Ne-FMS) for direct release of wages under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) in accordance with the protocol finalized under the Direct Benefit Transfers w.e.f 01.01.2016. With implementation of NEFMS, as an Accredited Banker of Ministry of Rural Development (MORD), Govt. of India, our Bank will transfer all the funds for MGNREGA nationwide (pan-India) to the State MGNREGA nodal accounts. Presently, it is implemented for State of Kerala and later all states will be covered in NEFMS amounting approximate fund flow of Rs.35000 Crores Also, we have been chosen as Sponsor Bank for the State of Bihar where we will be processing all types of MGNREGA Payments directly in the accounts of beneficiaries. We are already Sponsor Bank for the State of Rajasthan and efficiently processing the MGNREGA payments for last 3 years. The Bank continues to impart utmost priority towards consistent improvisation and continuing innovation in IT , so as to not only further improve its customer service but also to facilitate the Management in monitoring of the Bank’s progress under key business parameters with various applications having been launched during the year. The Bank participated in the Banking Application Contest (IBAC)-2016 by the IDRBT and came out with flying coolers, with two entries viz. “SBBJ Touch and Get” & “Meetings Info Mobile app” by Team SBBJ Pink and SBBJ Pioneers respectively getting selected therein. While SBBJ Touch & Get has been designed as a customer friendly and easy to use app with minimum set of instructions and maximum information delivery through features like Holiday calendar, Loan EMI, FDR interest Calculator, ATM locator & Branch locator , the Meetings Info Mobile App is aimed at facilitating the Top Management in consolidating agendas and keeping a track of various meetings. INTERNAL CONTROL, INSPECTION AND AUDIT The Bank has in place a well established independent audit system and structure to ensure adequate internal control for safe and sound operations. Internal Audit is carried out under Risk Focused Internal Audit (RFIA) as envisaged under Risk Based Supervision of RBI with focus on assessment of risk on the basis of inherent business risk and internal control mechanism. During FY 2015-2016, 736 Branches and Business Process Re-engineering (BPR) initiatives have been subjected to Internal Audit. CONCURRENT AUDIT 131 branches and 35 Centers/ Processing Centers (under BPR initiatives) cover 64.71% of advances and 40.40% of deposits as on 31.03.2016. 12 Head Office Departments have also been placed under Concurrent Audit. INFORMATION SYSTEM (IS) AUDIT IS Audit of the branches is conducted as an integral part of regular Audit & Inspection. Information System Audit Cell is in place to conduct IS audit of major IT establishments, Head Office establishments including Core Banking Project, Zonal Computer Centers, etc. in accordance with I.T. Policy, IT Security Policy and I.S. Audit Policy of the bank which conforms to the guidelines issued by RBI from time to time. As at the end of March, 2016, 99.61% of the Bank's branches were rated “Well Controlled” and “Adequately Controlled ". Model Operational Procedure for Settlement of Claims of Deceased Depositors & Return of Articles in safe Deposit Lockers/ Safe Custody With a view to mitigate the hardships faced by the legal heirs, a policy guidelines on the Operational Procedure for Settlement of Claims of Deceased constituents in line with Indian Banks Association have made and issued a comprehensive “model operational procedure for deceased constituents. CUSTOMER SERVICE Bank continues to accord top priority for Customer Service. Our success in this service industry to a very large extent depends on the satisfaction level of our customers. The environment, being intensely competitive, quality of service we offer becomes the real differentiator in the market. The meetings of the Customer Service Committee of the Board and Standing Committee on Customer Service are convened at regular intervals to review the position of customer service rendered. Similar Committees are also functioning at Branches, Zones and Head Office, which help in continuous improvement in service standards. During 2015-16, we have formulated two new policies namely; “Customer Rights Policy” and “Policy on General Management of the Branches” for making the banking more transparent and in easy approach of existing and future customers. We have revised our “Citizens Charter” on 11.09.2015 based on the guidelines received from the IBA, which was first time implemented in May 2005 in our Bank. CUSTOMER GRIEVANCES REDRESSAL MECHANISM The Bank has put in place a multi pronged grievances redressed mechanism to suit varied customer requirements. An aggrieved customer can either make a written complaint at branch / regional / zonal / head office of the Bank or make an online submission in the form provided on the Bank's website / through e-mail against acknowledgement. Chief Customer Service Officer (Internal Ombudsman): In order to further strengthen the customer grievance redresses system and to minimize the number of complaints to the Banking Ombudsman, RBI directed all Banks to appoint a Chief Customer Service Officer (CCSO) who would ensure that minimum number of complaints are escalated to Banking Ombudsman. His role would aim at strengthening customer confidence in the Bank's internal customer grievances redresses system. Accordingly, our Bank has appointed CCSO (Internal Ombudsman) in the month of November 2015. The CCSO (Internal Ombudsman) will examine the grievances which are on the ground listed in the BO Scheme under clause 8 and which were not resolved by the bank's internal grievances redresses mechanism. In all those cases when the Bank decides to reject a complaint or decides to provide only partial relief to the complainant, the matter will be invariably referred to CCSO for further examination before the Controlling Authorities convey their decisions to the complainants. The CCSO's (Internal Ombudsman's) decision shall be binding on the Bank and the Bank will accept it. In cases the complaints are not resolved to the satisfaction of the complainants, the CCSO (Internal Ombudsman) and /or the Bank will advise the complainants that they can approach the Banking Ombudsman of the jurisdiction concerned. DISCLOSURE OF COMPLAINTS/ UNIMPLEMENTED AWARDS OF BANKING OMBUDSMAN:- In terms of RBI circular DBOD. No .Leg BC.60/09.07.005/2006-07 dated 22.02.2007, the information in respect of customer complaints and awards passed by the Banking RIGHT TO INFORMATION The Right to Information (RTI) Department was constituted at the Bank's Head Office in December, 2010 for better coordination and effective implementation of the Right to information Act, 2005. The Department has since then been instrumental in ensuring that information sought for under the various RTI applications received by them is dispensed with efficiently and effectively in a time bound manner as per the provisions of the RTI Act, 2005 and that the appeals too, if received, are redressed timely, while also complying with the directives of the Hon'ble Central Information Commission (CIC) in this regard. In financial year 2015-16, the RTI Department received 1753 applications under the RTI Act, 2005, out of which 1713 applications were disposed off and 40 applications were awaiting disposal as on 31.03.2016. Besides, the Department also received 127 appeals under the RTI Act, 2005 in financial 2015- 16 and out of which 120 appeals were disposed off and 07 appeals were awaiting disposal as on 31.03.2016. BUSINESS PROCESS REENGINEERING Business Process Re-engineering (BPR) initiatives started in previous years stabilized further during 2015-16 and their coverage was extended to more branches. Bank operates 12 city-centric loan CPCs, viz. Retail Assets Central Processing Centre (RACPC)/ Small & Medium Enterprises City Credit Centre (SMECCC)/ Retail Assets and Small & Medium Enterprises City Credit Centre (RASMECCC) having end-state at 11 centers with 313 branches linked to them. Coverage of Rural Central Processing Centre (RCPC) was increased to 497 branches at 22 centers. Non loan CPCs initiatives like Liability Central Processing Centre (LCPC), Trade Finance Central Processing Centre (TFCPC), Central Pension Processing Cell (CPPC), Relationship Manager- Personal Banking (RMPB), Housing Loan Sales Team (HLST) etc have helped in further improvement in customer service. CURRENCY MANAGEMENT Owing to our Bank having the highest market share in Rajasthan, RBI has designated our Bank’s 199 branches as Currency Chest Branches in the state and 11 Currency Chest branches in other parts of the country. All our Currency Chest branches are undertaking the activities prescribed by RBI in an efficient manner. CROSS SELLING The Bank continues to market life and non-life insurance, mutual fund and credit card products to provide a full bouquet of financial products to its customers and augment its non interest income. The Bank earned a total income of Rs.37.18 crores from cross selling activities during financial year 2015-16. COMMUNITY SERVICES BANKING As a responsible Corporate Citizen, the Bank undertakes various community based social activities to serve the society at large. The main focus of such social activities has been school going children, people affected by natural calamities, people under distress, environment related activities and activities which in general benefit all section of the society. The major CSR initiatives under taken by the Bank during the year 2015-16 are as follows:- • The Bank extended financial support for construction of 103 toilets for girl students across various Government schools including 93 toilets in schools located in Rajasthan. • The Bank donated Rs.1.00 crore to Rajasthan Chief Minister Relief Fund for relief measures for people affected by heavy rains in part of the Rajasthan. • Provided 1000 blankets to earthquake affected people of Nepal. • Bank has extended help by providing essential provisions to the people affected by the floods in Chennai. • Ambulances were provided to three charitable Institutions- Apna Ghar Ashram, Ajmer (Rajasthan), Johar Health Maintenance Organization Hazaribagh (Jharkhand) and Access Health Care LLC Sanstha, Jaipur (Rajasthan). •Donated a School Bus to Adarsh Shiksha Parishad Samiti, Jaipur. • Donated a Braille Printer to Rajasthan Netraheen Kalyan Sangh, Jaipur. • Financial assistance to Armed Forces Flag Day Fund as also honouring war widows at Sikar through Sainik Board. • For achieving greater impact, an area based approach was initiated by the Bank taking up CSR Activities in two districts of Ajmer and Jhalawar in Rajasthan. In Ajmer district, the Bank facilitated electrification work in 73 schools which included getting power connection and providing fans and lights in class rooms. In Jhalawar district, the Bank extended financial support to 104 government schools for putting up drinking water facility. The overall expenditure in these two districts under various CSR activities was Rupees one crore. BRANCH EXPANSION During 2015-16, the Bank opened 57 branches including 26 branches in unbanked rural centres in Tier V and VI. As on 31.03.2016, the total number of branches of the Bank stood at 1316, the geographical distribution thereof being as under: The Bank continued to maintain its dominant presence amongst all other banks in the State of Rajasthan with a network of 1052 branches as on 31.03.2016, with 796 branches located in rural and semi urban areas. HUMAN RESOURCE DEVELOPMENT The Bank’s staff strength as on 31.03.2016 is 13529 employees, with the following break up: Out of the Bank’s total staff strength as on 31.03.2016, 2898 (21.42%) belong to SC and 1379 (10.19%) to ST categories which is well above the required percentage. A separate cell with objective to safeguard interests of SC/ST employees is also well in place. Reservation policy is implemented in our Bank as per Government guidelines. Necessary complement of staff has been made available for working in new frontiers like core banking solution, tele-banking, internet banking, ATMs, credit / debit cards, marketing, cross selling, business process re-engineering etc. The Bank has been according high priority to training and sensitization of staff members to respond to the customers expectations and deliver modern banking facilities in the technology-driven environment. A total no. of 8906 employees of all categories, including 281 employees of the sponsored RRBs, were provided training on various subjects related to banking and technology at Staff Training Centres of the bank during the year. The Bank has also provided pre-promotion training to 177 SC/ ST/OBC/PHD clerical candidates, eligible for promotion to officer cadre Group A & B during the year. Apart from conducting in-house training of our officers at our training centres , we also depute our officers for training to Apex Training Institute e.g. State Bank Staff College, Hyderabad, SBA, Gurgaon, SBIRD, Hyderabad, SBIICM, Hyderabad, NIBM, Pune, CAB, Pune, FEDAI, IDRBT & others. During the year 933 officers have been trained at these external agencies in the areas of Core Banking Solution, Forex, Credit Management, Fraud Detection, Risk Management, NPA Management, Stressed Assets Management, ATM, Behavioural Science, Recovery process etc. During the financial year 2015- 16, we have deputed 03 officers abroad for a Deutche Bank International Seminar at New York, USA, Standard Chartered Bank‘s Regional Conference at Frankfurt, Germany and in University of California, USA in this financial year. Executive Development Programme for 30 DGMs and AGMs was held at STC Jaipur by faculty of IIM, Kolkata from 21.12.2015 to 23.12.2015, also Special Faculty from Asian School of Business Management, Bhubaneswar in November, 2015, were invited for taking sessions on MDP for 34 newly promoted Scale-IV Branch Managers at STC Bikaner. HRD is organizing Training Committee meetings at quarterly intervals to review and monitor the training programmes and decide on new initiatives to support the new challenges and changes taking place in the banking industry. The training calendar is uploaded quarterly on intranet site for reference of the employees. The staff can upload their training needs required on the basis of this training calendar & avail a training of their choice & requirement. A new software called the Training Manager has been developed to facilitate nominations on-line by the Zones and HRD maintains the training history of employees under one roof. As per Khandelwal Committee recommendations, E-learning would play a pivotal role along with the class room training in the years to come for nurturing Human Resources on a continuous basis. The e-Learning initiative has been given a fillip and a separate operational department has taken charge under a Chief Manager reporting to AGM STC, Jaipur. Our bank had launched e-learning portal on 13.02.2013. The total number of registrations at the portal is 6104 as on 31.03.2016 against total number of officers and clerical staff strength of 10366 i.e. covering 58.88% of the strength. In order to bring good reading on Banking related topics, to the doorstep of the employees, we have for the first time on the intranet-site, commenced uploading the IBA journal “The Indian Banker” since July 2014, in collaboration with IDRBT. The latest issue uploaded is of March 2016. STAFF WELFARE The Bank believes in keeping the morale and motivation of the employees high, considers employees as its most valuable and important assets and accord high priority to their welfare. Some of the staff welfare activities, being undertaken by the Bank are:- • Granting of Scholarship to the meritorious wards of the employees. • Providing free medical consultancy services at various hospitals. • Insurance cover for employees to the extent of Rs.8.00 lac (Rs.16.00 lac for accidental death) under Group Insurance Scheme of SBI Life. • Arranging Cultural Programmes, Sports Day and Medical Camps for overall well being of the staff. INDUSTRIAL RELATIONS The Bank has a long history of harmonious and cordial relations with both supervising as well as workmen employees enlisting their total commitment, support and cooperation. The Employees’ Union and Officers’ Association have extended their wholehearted cooperation for the all-round growth of the Bank. A well established and ongoing consultative machinery is functioning at various tiers of the administration for resolving issues through joint consultations and negotiations. VIGILANCE ADMINISTRATION Vigilance Administration is an integral part of the managerial function in the Bank. In the Bank, vigilance means, to be watchful in our day to day transactions in accordance to the systems & procedures laid down by Bank simultaneously being judicious, transparent & disciplined in all our official dealings. The main focus is on preventive vigilance activity in order to timely detect the symptoms of any procedural or systemic failures in a particular part or organization as a whole. Thus, vigilance works averting any possible abuse / misuse of powers and exercise of discretion which might otherwise cause loss to the organization. Vigilance Department held eight training programmes at quarterly intervals at Bank’s Staff Training Centres for officers and award staff on Preventive Vigilance to improve their skills and awareness. Sessions on the preventive vigilance were also slotted in other training programmes as well. The training platform of the Bank is being used effectively to create awareness amongst employees about Vigilance function, areas of concerns where officials need to pay more attention, nature of fraud / serious irregularities taking place and determination of vigilance angle. Preventive Vigilance Committees have been set up in branches having 10 staff members or more. Such committees are functional at processing centers, unsatisfactory rated branches and fraud prone branches irrespective of their staff strength. An in-house magazine titled as “Vigilance Bulletin” is published quarterly with an objective to create vigilance awareness amongst staff. Many new initiatives have been taken as preventive measures like Biometric login system, Electronic Voucher Verification, online tracking of status of loan application by the applicant, better pre-sanction due diligence process etc. Scheme of Recognition & Alertness Award for the staff in respect of detection and foiling of frauds is also in place. Whistle Blower Policy has been implemented in the Bank whereby any staff member can provide information to the Chief Vigilance Officer on any malpractices or instances of misuse of official position. The identity of the informer is kept secret. The department has disposed of 222 complaints, 45 Investigations and 57 preventive vigilance inspections were conducted. 116 disciplinary cases having vigilance angle have been concluded during the year 2015-16. RAJBHASHA The implementation of Official Language Policy in the Bank is not only a statutory requirement but also a business need. The Bank is committed to comply with the statutory provisions relating to the official Language Policy of the Govt. of India and took several initiatives to provide benefit of Bank's different schemes to the masses through Hindi Language. During the year 2015-16, the Bank made significant progress in promoting and propagating the use of Official Language and ensured compliance of various other statutory requirements framed under the Official Language Act / Official Language Rules. The Bank made all possible efforts to achieve the targets set by Official Language Deptt. Ministry of Home affairs, Govt. of India. Representative of Govt. of India also inspected our Head Office and zonal Office Bhilwara. An Inspection meeting was carried out by third subcommittee of Committee of Parliament on Official Language on 17 Feb 2016. Bank has been awarded by Bank TOLIC Delhi, Jodhpur, Jaipur and TOLIC Udaipur for Official Language implementation. Bank continued its efforts to promote use of Hindi in the field of Information Technology. Hindi Day and Hindi-fortnight were celebrated in Offices/Branches of the Bank in the month of September 2015 and various competitions were conducted for the staff members. To increase progressive use of Hindi, Head Office Rajbhasha Trophy competition (Head Office and Zonal level) was also organized during the year. Bank's quarterly in House Rajbhasha magazine "Upwan" is being published regularly. AUDIT State Bank of India, with the concurrence of the Reserve Bank of India, approved the appointment of 4 firms of Chartered Accountants viz. M/s Kalani & Co. of Jaipur, M/s K.K.Soni & Co. of New Delhi, M/s Mahesh C. Solanki of Indore and M/s RSPH & Associates of New Delhi as the Statutory Central Auditors of the Bank for the year 2015-16. During the period under review, the scope of audit covered 786 branches/centralized processing units as against 742 branches/centralized processing units covered in 2014-15. RESPONSIBILITY STATEMENT The Board of directors hereby states:- 1. That in the preparation of the annual accounts, the applicable Accounting Standards have been followed alongwith proper explanation relating to material departures; 2. That they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Bank as on the 31st March, 2016, and of the profit or loss of the Bank for the year ended on that date; 3. That they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Banking Regulations Act, 1949 and State Bank of India (Subsidiary Banks) Act, 1959 for safeguarding the assets of the Bank and preventing and detecting frauds and other irregularities; and 4. That they have prepared the annual accounts on a going concern basis. CORPORATE GOVERNANCE The details on Corporate Governance are annexed. ACKNOWLEDGMENT The Board of Directors is grateful to the valued customers, esteemed shareholders and the public at large for their patronage and confidence reposed in the Bank and places on record its deep appreciation. The Board of Directors thanks the Government of India, State Bank of India, Reserve Bank of India and other regulatory agencies for their valuable support and guidance throughout the year. The Board of Directors places on record its deep appreciation of the commitment, sense of involvement and dedication exhibited by each staff member and constructive role played by the Employees’ Union and Officers Association in the overall development, growth and prosperity of the Bank. For and on behalf of the Board of Directors Jyoti Ghosh Managing Director Place: Mumbai Dated: 29th April, 2016 |