DIRECTORS' REPORT The Board of Directors have pleasure in presenting the Bank’s Annual Report along with the audited statement of accounts and the cash flow statement for the year ended 31st March 2016. Performance: Domestic Business: Ø CASA deposits increased by 11.84% on Y-o-Y, SB deposits grew by 12.54% and CD by 8.04%. Share of low cost deposits (CASA), in domestic deposits improved from 29.48% as on 31-03-2015 to 34.18% as on 31.03.2016. Ø Domestic deposits decreased by 5.20% from Rs. 3,98,000 crore to Rs. 3,77,309 crore as a result of our strategy to shed high cost deposits. Share of Term Deposits of less than Rs. 1 Crore (Retail deposits) in total term deposits, increased to 71 % from 56 % Y-o-Y. Ø Advances registered a negative growth of 7.23% from Rs. 2,89,515 crore to Rs.2,68,579 crore, as the focus was more on recovery and up-gradation of stressed assets, and on re-balancing of books in favour of Retail Assets. Share of Retail Assets increased to 49 % from 44 % Y-o-Y, while that of Corporate Loans decreased from 56 % to 51 % as desired. Ø Priority Sector lending constituted 35.78% of Adjusted Net Bank Credit and the share of Agricultural Credit to Adjusted Net Bank Credit was 17.27%. Ø Schematic Retail Credit grew by 10.61% from Rs. 34,153 crore to Rs. 37,777 crore. Ø Overall, Domestic business has de-grown by 6.05% from Rs. 6,87,515 crore to Rs. 6,45,888 crore during FY 2016. Overseas Business: Ø Overseas business has de-grown by 2.87% during FY 2016 compared to last year growth of 13.65%. Global Business: Ø Global business has de-grown by 5.19% during FY 2016 compared to last year growth of 10.60%. Total Business mix (Deposits + Advances) reached at Rs. 8,94,667 crore, a degrowth of Rs. 48,966 crore. Ø Total deposits decreased by 3.55% from Rs. 5,31,907 crore as on 31.03.2015 to Rs. 5,13,005 crore as as on 31.03.2016. Ø Advances decreased by 7.30% from Rs. 4,11,726 crore as on 31.03.2015 to Rs. 3,81,662 crore as on 31.03.2016. Financial Parameters: Ø Operating profit was Rs. 6,036 crore and Net loss was Rs. 6,089 crore. Ø Basel III ratios: CET 1 plus CCB was at 7.97% as against minimum prescribed level of 6.125% , Tier I was at 9.03% as against minimum prescribed level of 7.625% and Capital Adequacy Ratio stood at 12.01% as against 9.625% prescribed by RBI (under Basel III). Ø Net Worth as on March 31, 2016 stood at Rs. 20,172 crore. Ø Book value per share was Rs. 262.77 as on 31.03.2016. Ø Gross NPA ratio stood at 13.07% as on 31.03.2016. Ø Net NPA ratio was 7.79% as on 31.03.2016. Business Initiatives: Ø During the year, Bank has introduced Prime Minister Awas Yojana to participate in Government of India (GOI) initiative under “Housing for All (Urban)” Mission, being implemented during 2015-2022. Ø Bank has introduced Pradhan Mantri Kaushal Rin Yojana (Skill Loan Scheme) to provide fillip to Skill Development initiatives of the GOI. Ø Under Prime Minister Employment Generation Programme (PMEGP), the Bank has sanctioned 1,108 accounts with limit of Rs. 65 crore. Ø Under Pradhan Mantri Mudra Yojana (PMMY), the Bank has opened 3,76,486 accounts and Rs. 2,752.28 crore has been disbursed under the scheme. Ø MUDRA cards have also been given to the 17,998 beneficiaries during the year. Ø Under Stand-Up India programme, the Bank has so far opened 32 accounts with a sanctioned limit of Rs. 546 lakhs. Ø Bank’s PMKVY Online Portal has been launched for opening of Students/Trainees accounts under Pradhan Mantri Kaushal Vikas Yojana (PMKVY) Scheme. Ø The Bank is also one of the 1st few banks to have integrated its operating system with Vidya Lakshmi Portal, an initiative of the GOI to provide single window solutions to students for availing Education loans. Ø The Bank is also promoting and handholding/financing SC/ST youth as an entrepreneur to generate employment by extending training programme through Rural Self- Employment Training Institute (RSETI) and arranging working capital requirements. Ø Use of BC network for National Skill Development Corporation (NSDC) project. Ø Bank has tie-up arrangement with Maharashtra Sales Tax department and Tea Board, West Bengal for collection of Sales Tax / Vat and auction of tea lots respectively in the states. Ø BOI Eazy Pay – a person to person payment solution – Rolled out on 01.04.2015. Ø Introduced RuPay Platinum Cards. Ø Rolled out Closed User Group (CUG) Pre-paid Cards for AIIMS Bhubaneswar and Patna. Ø Introduced Platinum Credit Cards with enhanced revamped features. Ø Rolled out Secured Credit Cards (Privilege and Privilege Plus) for NRI and individuals who are not able to furnish IT Returns. Ø Business Debit & Credit Cards with enhanced features launched under Visa network. Ø Co-branded Pre paid Cards - Gift Cards, General Purpose Cards and Corporate Gift Cards in partnership with Reliance Money Express (YouFirst) rolled out. Ø mVisa - a mobile to mobile payment solution - individuals to merchant payment solution was launched in May 2015. Being rolled out, shortly, in two Metros. Ø Implemented Fraud Risk Management system for cards. Ø Introduction of SMS based Mobile Recharge facility is under process. The Bank took the following initiatives during the year to enhance Customer service at Branches: Ø Operational Customer Relationship Management (OCRM) was introduced to lodge Web/Mail based complaints automatically to generate analytical reports to help reduce turnaround time in grievance redressal & initiate remedial steps in time. Ø Notice Board displayed at Branches about facility available for opening Basic Savings Bank Deposit account/Small Accounts and the minimum documents required. Capital: Ø During the year, the Bank has made preferential allotment of 15,16,43,949 Equity Shares of Rs. 10 each in accordance with the regulation 76(1) of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009, The Bank has received Rs. 1,150 crore from Government of India and Rs. 153.65 crore from the Life Insurance Corporation of India towards share application money for subscription to equity shares on preferential basis, the allotment of which has been made on 4th May, 2016. The same is treated as CET1 capital for CRAR purpose as on 31.03.2016 in accordance with RBI circulars. Capital Adequacy: Ø As per Basel III framework, the Bank’s Capital Adequacy Ratio was 12.01% which is higher than the regulatory requirement of 9.625%. Awards & Accolades: Ø Bank of India has been rated as the ‘’ Second Most Trusted Brand’’ in India among PSU banks in 2015 by Economic Times. Ø Bank of India ranked 23rd amongst all the brands and 2nd next to SBI amongst Banks under IPSOS survey, India’s most influential Brands 2015. Ø Elets Media -BFSI Leadership Award for best Financial Inclusion initiatives. Ø IDRBT BANKING EXCELLENCE AWARDS – Best Bank Award under category “Use of Technology for Financial Inclusion among large Banks for the year 2015, conferred by Governor, Reserve Bank of India. Ø CIMSME – BANKING EXCELLENCE AWARDS – 2015, Best Bank for Financial Inclusion “LARGE BANK” - Runners up. Best Bank for PM JAN DHAN YOJANA “LARGE BANK”- Runners up. Ø Third Rank in overall performance under Pradhan Mantri Jan Dhan Yojna by Department of Financial Services, Ministry of Finance, Govt of India. Ø IBA Award 2015 - Best Financial Inclusion Initiative - LARGE BANK - Runners up. Ø Bank conferred with IWP (Inspiring Work Places 2015) – ‘Best HR Technology Award’ under PSU category by Banking Frontiers at Mumbai on 15th December 2015. Ø Skoch Order-of-Merit Award – Smart Technology Awards 2015 for Financial Inclusion under “Technologies for Digital India”. Ø Innovative CIO Awards 2015. Ø National Payments Excellence Awards 2015 for top issuer of Rupay card in Special category. Ø National Payments Excellence Awards 2015 - Special award in large Banks category for NFS product. Ø Finacle Innovation Award by Infosys. Ø IBA Best MSME Bank Award 2015, Large Bank- For finance under PMMY-Winner. Ø International award For Brand Excellence In-House Journal by CMO Asia during 6th CMO Asia Awards held at Singapore on 11th August, 2015. Ø Public Relations Society of India (PRSI) NATIONAL AWARDS 2015 (2nd Prize) under Best In-House Magazine category on 25th December, 2015. Ø Shailja Nair Foundation (ICE) has awarded Bank’s magazine with ‘2ND RUNNER UP’ for Best Special Edition at ICE Inhouse Communication Excellence Awards 2015 held on 6th June, 2015. Ø Two awards from Association of Business Communicators of India (ABCI) on 27th February 2015 at Mumbai in categories i.e. Features (Language), Special Column (Language). Ø Winner in Best Education Loan Provider from Outlook Money Awards-2015. Ø Award for Excellence in Home Loan Banking by Stars of the Industry Award 2015 by MY FM-94.3. Ø Institute of Public Enterprise, Corporate 5th Best “Vigilance Excellence Award 2015-16”. DIRECTORS’ RESPONSIBILITY STATEMENT: The Directors confirm that in the preparation of the annual accounts for the year ended March 31, 2016: a) The applicable accounting standards have been followed along with proper explanation relating to material departures, if any, b) The accounting policies framed in accordance with the guidelines of the Reserve Bank of India were consistently applied. Reasonable and prudent judgments and estimates were made so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit and loss of the Bank for the year ended March 31, 2016, c) Proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of applicable laws governing banks in India for safeguarding the assets of the Bank and for preventing and detecting fraud and other irregularities, d) Annual accounts have been prepared on a going concern basis, e) Internal financial controls system to be followed by the Bank were laid down and that such internal financial controls are adequate and were operating effectively, f) Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. |