During the financial year 2018-19 (FY19), the Bank's global business reached the level of Rs. 377887 crore (Rs.3.77 lakh crore), registering a Y-o-Y de-growth of 0.57%. The Bank's international business stood at Rs.3,299 crore and recorded a negative Y-o-Y growth of 74.37% on account of 67.69% Y-o-Y drop in overseas advances and 98.80% drop in overseas deposit. The Bank is about to wind up its sole international branch soon. Global deposits of the Bank stood at Rs.214335 crore which increased by 0.34% and gross advances decreased by 1.73% and stood at Rs.163552 crore as at the end of MAR’19. Your Bank's continued focus on low cost deposits resulted in a healthy Y-o-Y growth of 7.77% in CASA deposits and the build-up stood at Rs.106070 crore as on 31st MAR’19. Subsequently, CASA share improved to 49.49% as on 31^st MAR’19 from 46.50% a year ago.

The Bank's operating profit decreased by 19.52% Y-o-Y on account of stress on advances portfolio and resultant reversal/ non-booking of interest. It stood at Rs.2767 crore during FY19. In terms of net profit, the quantum of losses increased in FY19 as provisions were higher by 36.83% and there was a decrease in non-interest income levels. Net loss rose to Rs.8334 crore in FY19 as compared to a net loss of Rs.4674 crore a year ago. The Bank's CRAR stood at 12.51% in FY19 as compared to 8.69% in FY18. Owing to reduction in bulk deposits by 43.87% Y-o-Y, the cost of deposits decreased to 5.10% during FY19 from 5.33% in FY18.

Against this backdrop, your Directors take pleasure in placing the Bank's Annual Report for 2018-19 along with audited annual financial statements.

OUR PERFORMANCE A. FINANCIAL HIGHLIGHTS

A.1. BALANCE SHEET

(Amount Rs. in Crore)

A.2. PROFIT

(Amount Rs. in Crore)

A.3. key ratios

B. ASSET QUALITY

FY19 was a challenging year for the Indian Banking Industry due to continued stress faced in asset quality on account of various macroeconomic and other factors. As on 31^st MAR’19, Gross NPA of the Bank stood at Rs.28704.78 crore (FY18: Rs.26562.79 crore) and Net NPA stood at Rs.7419.31 crore (FY18: Rs.12229.13 crore). In terms of ratio, Gross NPA Percentage and Net NPA Percentage were 17.55% (FY18: 15.96%) & 5.22% (FY18: 8.04%) respectively.

The Bank initiated various measures to arrest fresh slippage and restricted it to Rs.10726.32 crore during the FY19 compared to Rs.12903.28 crore for the FY18. Provision Coverage Ratio (PCR) also improved to 79.85% in FY19 from 62.91% in FY18.

To improve asset quality, the Bank initiated consistent recovery drive and recovered Rs.4288.83 crore, out of which Cash Recovery was Rs.2826.71 crore with a growth of 36.43 % due to concerted efforts, daily monitoring and account specific resolution plan. During the aforesaid period, total reduction in NPA accounts stood at Rs.8584.33 crore.

The Bank also made suitable amendments in existing OTS schemes by rationalizing the slabs in OTS module under Thumb Rule for NPA accounts having balance of Rs.1.00 lac upto Rs.15.00 Lac to accelerate settlement of small borrowal accounts.

Further, compromise/negotiated settlement approach has been adopted through Rin Mukti Shivir and one-to-one meeting with borrowers as another vital tool to tackle NPAs. For this Village Mohalla Contact Programme and “Each One Reach Ten” campaigns were initiated during the year 2018-19.

For effective and timely monitoring of NPA accounts and follow up of due process in NPA accounts having Ledger balance of Rs.1.00 Cr and above, concept of “Stressed Asset Management Vertical (SAMV)” has been introduced at Head Office level as well as field level with dedicated executives.

The Bank also has Stressed Assets Management Branches which function exclusively for resolving NPAs.

Initiatives taken during FY 19

- Bank has launched Project Navoday wherein two separate verticals at corporate level have been formed for management of NPA.

- The Bank has activated Stressed Assets Management Vertical (SAM-Large) for focused follow up & Recovery of NPA accounts with O/s of Rs.25.00 Cr & above at HO level.

Further, the Bank has SAM Branches for resolving NPA accounts with outstanding above Rs.1.00 Cr to below Rs.25.00 Cr with a focused approach.

- Online OTS module has been implemented for easy access to borrowers/guarantors for offering OTS along with facility to track status thereof.

- Monitoring of daily recovery was introduced with Zones/ FGMOs to improve penetration in NPA accounts.

- The Bank organized 16 Recovery Camps involving all the branches. This step was very successful in terms of recovery that amounted to Rs.3579.82 crore. Services of Recovery Agencies and Banking Correspondents were properly utilized for marketing of One Time Settlement Schemes (OTS).

- During the FY19 Bank sanctioned 71958 Compromise cases with ledger balance of Rs.2738.03 Cr and compromise amount of Rs.1760.38 Cr.

- The Bank participated in National Lok Adalat/District Lok Adalat actively and settled 35812 cases having outstanding of Rs.527.47 Cr.

- E-auctions of charged immovable & movable securities were carried out through-out the year. Special thrust was given in taking physical possession of immovable properties either with the help of Enforcement Agencies or by moving application before the concerned DM/CMM taking advantage of amended SARFAESI Act. This step resulted into increased auction of properties under physical possession of the Bank.

- Sale of chronic/difficult stressed accounts to ARC was another option utilized in 42 Stressed accounts and NPA accounts involving amount of Rs.398.97 Cr were sold to various ARCs during the FY19.

- Initiatives for identifying Wilful Defaulters were undertaken in terms of guidelines of Reserve Bank of India. On completion of due diligence exercise, identified borrowers were declared as Wilful Defaulter by the Bank and the number now stands at 341, as on 31.03.2019.

- For effective and better monitoring, all NPA borrowal accounts were categorized under four broad heads , viz.

(i) Below Rs.50,000 (ii) Rs.50,000 to Rs.15,00 lakhs (iii) Rs.15.00 lakhs to 1.00 crore and (iv) above Rs.1.00 crore. While OTS was the main focus in first two categories, other additional options like sale under SARFAESI, declaration of willful Defaulter, restructuring, suit with DRT were followed very methodically for next two categories. Resolution through IBC/ NCLT was also used as important tools for recovery in high value NPA accounts. Further, for borrowal accounts having outstanding balance above Rs.1.00 crore, monthly VC meetings were held with Zonal Heads and FGMs and 'Doable' accounts were identified where turnaround/recovery was expected within the quarter. These accounts were then followed-up on daily basis to ensure resolutions.

- Bank has referred 156 NPA borrowal cases involving an amount of Rs.18322.55 Cr to NCLT for resolution under IBC during FY19.

C. CREDIT MONITORING

Fresh slippage to NPA during FY19 was Rs.10726 crore comprising Rs.2786 crore in Agriculture sector, Rs.2361 crore in MSME sector and Rs.1141 crore in Retail Credit (Schematic) sector. The outstanding was NIL under SDR in MAR’18 as well as in MAR’19.

Outstanding was Rs.498 crore under S4A Standard category as on MAR’18 which came down to Rs.279 crore in MAR’19.

Total standard restructured advances remained at Rs.495 crore (Rs.149 crore in SME & Rs.346 crore in Others) in MAR’19 against Rs.945 crore (Rs.44 crore in SME & Rs.901 crore in Others) in MAR’18. There was fresh restructuring of Rs.122 crore under MSME, upgradation of Rs.172 crore to restructured standard category, decrease in existing outstanding/ closure by Rs.91 crore, moved to satisfactory list by Rs.262 crore and slipped to NPA by Rs.391 crore resulting in net outstanding at Rs.495 crore in MAR’19 under standard restructuring advances.

During MAR’19 quarter, gross slippage was Rs.2826 crore as compared to Rs.2540 crore in DecRs.18 quarter. Out of which, slippage in Agriculture Sector was Rs.886 crore (31.36% of total slippage), Rs.790 crore in MSME sector (27.95% of total slippage) and Rs.283 crore in Retail Credit - Schematic (10.00% of total slippage). Further, a sum of Rs.918 crore slipped in high value loan accounts of Rs.10.00 crore & above during MAR’19 quarter.

D. DIGITALIZATION

Alternate Delivery Channels Internet Banking:

The Bank is providing Retail Internet banking & Corporate Internet banking facilities to its customers. The Internet Banking Customers of the Bank reached 14.90 lacs as on 31^st March 2019. The Bank updated its Internet Banking Services during FY19 as under:

Facilities available to both Personal/Individual and Corporate customers

- View account balances and transactions

- Transfer funds between designated accounts

- Cheques Book request

- Stop/Revoke cheque

- Cheque Status Enquiry

- Download statement

- Bill Payment/Online Payment & e-Commerce -Personal/ Retail customer

- Bill Payment/Online Payment -Corporate customers

- Payment of Direct Tax, GST, Customs Duty, EPFO and State Taxes

- Money transfer through RTGS/NEFT to all customers and through IMPS. Customer can also schedule NEFT/RTGS for future date ( Upto 1 month only ).

- Utility Bill Payment through BBPS.

- Utility Bill Payment through Third Party integration (i.e. BillDesk, Tech Process/ Ingenico, SBIePay, CCAvenue , Atom Technologies, PayU/Citrus and Razorpay etc.).

- E-Statements.

- Registration/ Deregistration for Mobile Banking.

- Opening/closing of the Term Deposit accounts.

- Debit Card related facilities (Hotlisting, locking /unlocking, PIN generation and ATM card request).

- Internet Banking facility to NRI customers as per FEMA guidelines. Presently NEFT, NRE to NRE/NRO/Normal and NRO to NRO/Normal account fund transfer facility .

- Facility of Registration of digital certification for login and/ or transaction authentication.

- E-Tax filing/Form 26AS

- Submission of form 15G/H.

- Add Nomination for Deposit accounts.

- Enrolment for Atal Pension Yojana (APY)

- Standing Instruction (SI) creation/modification.

- SMS banking request.

- Mobile number and Email id updation.

- Purchase of Sovereign Gold Bond (SGB).

- Bulk Fund transfer through File upload. ( Corporate IB only )

- Apply for IPO

- Online Registration of Internet banking.

Mobile Banking and empower app

Bank is providing banking services through mobile application. At present there are two mobile applications: (i) All Mobile (existing Mobile Banking) and (ii) emPower. All facilities available in All Mobile application are also available in emPower in addition to more value added services. All Mobile application will be phased out. The Bank is providing Mobile Banking services to around 4.5 lakh customers through empower application.

Customers may access different banking and value added services in a convenient and secured manner on a single platform.

Features & functionalities of emPower:

- Account summary with last five transaction details

- Funds/Money Transfer facility (Intra-bank and Inter-bank through IMPS, NEFT & UPI).

- Transaction History.

- Collect Money through UPI Collect Request.

- mPassbook (passbook in electronic format) with narration and searching & sorting features.

- Mobile/DTH recharge

- Opening and Closure of FD/RD account.

- Cheque Book Issue Request.

- Bill Payment facility - Under process and will be available shortly.

- Locking and Unlocking of Debit Card transactions & Internet Banking transactions.

- Hotlisting of Debit Card

- Debit Card Pin Generation

- Debit Card Request

- Internet Banking registration

- Creation/Amendment of Standing Instruction.

- Creation/Amendment of nominee in deposit accounts.

- Mobile number and Email id updation.

- Stop/Revoke cheque

- Cheque Status Enquiry.

- Apply for IPO - Under process and will be available shortly.

- Submission of Form 15G/H - - Under process and will be available shortly.

- Payment through Bharat QR code scanning Unified Payment Interface (UPI)

The Bank has launched “AllBank Unified Payment Interface”, a Mobile App which allows funds transfer facility through Mobile from one account to another account. Any Bank account holder, after registration in the app, can pay or pull funds through the application. Features & Functionalities of UPI Application:

- Virtual Payment Address (VPA) as payment identifier for sending and collecting money in contrast to providing Beneficiary Account details.

- Sender initiated (PUSH) and receiver initiated (PULL) transactions in secured and convenient manner.

- Balance Enquiry

- Instant Transfer and Collection of funds on 24X7 basis.

- Facility to add multiple bank accounts of a customer of different banks participating in UPI.

- Facility to collect money instantly from any customer having Virtual Payment Address (VPA).

- Scan & Pay through BHARAT QR Code

- Facility to send money using either of Virtual Payment Address (VPA), Account Number and IFSC, Mobile Number and Mobile Money Identifier (MMID). MMID may be generated through Mobile Banking.

RuPay Prepaid Card:

The Bank has launched RuPay Prepaid card. After reloading the card with a specified amount, the user can use the card at ATMs, POS machines & Online sites. A non bank customer can also purchase the card for use.

Point of Sale (PoS):

The Bank has launched merchant acquiring business through Point of Sale machines (PoS) for the merchants to accept payments from its customers through electronic means. All card (RuPay, MasterCard & VISA) are accepted in the PoS. Around 2995 PoS machines have been installed as on 31.03.2019.

BC Channel (AEPS & Card Based)

Under Financial Inclusion Project, the bank has provided Banking Facilities on line Inter-operable Kiosk Banking Solutions at 6106 Bank Mitra locations using Micro ATMs. The AEPS based transactions through Bio-metric authentication process & Card based transactions using Pin Pad device do happen to promote financial inclusion for both Rural & Urban masses. The PMJDY programme of GOI is being implemented in mission mode along with Financial Literacy Programme, Micro Insurance & Micro Pension Enrollment. At the other hand BC channel is also used for funded SB account opening, low cost retail deposits, recovery of Bank's dues up to Rs.15.00 Lakh, Collection of EMI/Interest in Loan accounts as well as for Non financial services like of Balance Enquiry, Pass book Printing etc.

National common Mobility Card (NCMC):

Bank is issuing RuPay EMV Chip Dual Interface Contactless NCMC Card with offline wallet as a default option to customers as per directive received from Ministry of Finance.

SMS Alert Services

- SMS alert is being sent prior to/after account becomes inoperative to the SB & Current account holders.

- Customers are being intimated through SMS regarding deduction of penal charges for fall in minimum balance.

- Customers are being intimated through SMS regarding maturity of the Term Deposit.

ATMs

The Bank has 836 ATMs/CDs as on 31^st MAR’19.

Cheque Truncation System (CTS)

CTS has been successfully implemented in all the three grids (Northern, Western & Southern) covering pan India. 67 new centers were added in the above grids during last year. With the implementation of CTS and to consolidate banking operations and reduce operating costs, 15 service branches were dismantled during FY18.

CTS based clearing is covering about 95% of clearing volume of Banks. The CTS volume in our Bank, including both inward and outward clearing, is about 1 Lac cheques per day. CTS operations are being managed by our Service Branches at New Delhi, Mumbai and Chennai, working as Banks gateway for respective Grids.

The inward clearing volume of our Bank is being processed at Service branch, New Delhi and Lucknow for Northern Grid, Service Branch Mumbai for western and Centralized CTS Operations Centers (CCOC), Bhubaneswar for Southern Grid.

Outward cheques are processed at about 245 hub branches, linked to their respective grid.

To improve efficiency and cut the operations cost, consolidation of CTS operations with a single SI/software was done. Southern and Western Grid have now been migrated to Multigrid and Northern Grid migration to Multigrid is under process and shall be completed shortly.

Information Security

- The Bank has a well documented, Board approved IT security policy and an IT security procedure in place that is being reviewed annually to keep it updated as per latest trend and best practices.

- Board approved Cyber Security Policy and Cyber Crisis Management Plan have also been introduced separately apart from IT Security Policy and IT Security Procedure.

- Bank has set up its Cyber Security Operation Centre (CSOC) with twelve major security solutions to detect, monitor and manage cyber security events to protect its IT assets.

- The Bank has deployed various security tools such as firewall, Intrusion Detection System (IDS), Intrusion Prevention System (IPS), e-Mail Security Gateway, Antivirus Solution etc. to mitigate various security threats.

- The Bank has implemented Hyper Text Transfer Protocol Secure (HTTPS), Extended Validation Secure Sockets Layer (EV SSL) for internet banking.

- Second Factor Authentication (One Time Password /Grid Card), Virtual Keyboard and CAPTCHA are implemented in Internet Banking.

- Quarterly VAPT (Vulnerability Assessment and Penetration Testing) and yearly Information System Audit are also conducted for CBS & allied infrastructures to plug in gaps related to security, if any

Business Continuity Plan and Disaster Recovery

- The Bank has its Data Centre in Tier 4 Data Centre (DC) and a Disaster Recovery Site (DRS) for its core banking solution and other critical applications as well as a Near DR site (NDR) for business continuity.

- The Bank has ISO 27001:2013 Certification for its DC and DR site.

- The Bank has well documented, Board Approved Business Continuity Plan to provide un-interrupted Customer Services in case of any exigency.

- DR Drill is conducted on a quarterly basis to keep testing DR site's functional preparedness for any emergency.

Other Initiatives

- CKYCR implemented in CBS.

- Registered Device (RD) Services incorporated in CBS for biometric authentication as per UIDAI guidelines.

- Integration of PFMS based e-payment system for the state of Rajasthan and Madhya Pradesh.

- Facility of sending SMS in preferred language of the customer has been implemented.

- Filling form 60 in CBS.

- Implementation of Inland Bank Guarantee Functionality in CBS.

- Implementation of GST Software Module: Bank has implemented GST software “SaralGST” and the module went live on 01.07.2017

- Bulk payment Facility for various agency and Corporates.

- New FI Gateway implemented & integrated with CBS SWIFT

Interface of SWIFT application with CBS, Exim Bills, treasury and Other Systems: To comply with the RBI regulatory guidelines, Bank has completed the process of integrating EximBills and CBS with SWIFT w.e.f 10.04.2018.

Digitalisation- New Business Buzz Word

The Bank has taken leap forward in digitization of its business processes. New IT initiatives have been put in place to improve delivery of services. New Digital products like UPI, Micro ATM and Aadhar Pay have been launched. The Bank has a strong network of 10171 outlets providing IT enabled online Banking Facilities with special focus on rural and remote areas of country. The Bank is focusing to innovate alternate e-delivery channels with customer friendly options.

Moving forward with Government's thrust on digitization of transactions and gearing up for less cash society, the Bank has introduced a number of products.

- AEPS On-Us & Off-Us transactions in Aadhaar seeded accounts.

- PIN based On-Us & Off-Us transactions using RuPay cards

- Third party Deposits are allowed at BC locations.

- Aadhaar seeding facility at BC Point.

- Online account opening (Customer Enrolment ) Module.

- Account opening is enabled through e-KYC and auto population is live.

- Passbook Printing Facility is live at BC locations.

- Aadhaar based payment solution, Aadhaar Pay solution has been made live for making payment at Merchant Locations.

- Small Term Deposit (RD/FD/DDP/MIP) account opening facility is enabled at BC locations.

- Real time/Online SB account opening facility is enabled at BC locations.

- PNR Status enquiry (to check the status of account opening at BC location -12 digit reference number enquiries).

- Bhim Aadhar Pay Merchant On boarding (Mobile App) Solution.

New features have been introduced to make our existing e-products more and more convenient for our customers.

- OTP authentication for better security in e-commerce transaction

- On-line employees PF payment to EPFO

- On-line payment of customs-duty (ICEGATE)

- On-line student fee collection

Virtualization

Bank has implemented Virtualization environment for the non-core applications at DC & DRS. Currently Forty (40) applications such as Mail Messaging, CMS, ADS & DNS, UPI, GST, DeVA, Inspection, OSMC, ASBA etc. have been successfully migrated to Virtualization environment. Virtualization of the servers will provide the following benefits:

- Reduce the total number of physical servers considerably which interns contributes to reduction on Total cost of ownership

- Optimum utilization of resources viz. cores, storage, memory etc.

- Dynamic Scalability of the resource

- Increase efficiency for development and test environments

- Improve availability and business continuity Security Operation Center (SOC)

To improve cyber security posture of the bank and to achieve an effective cyber security shield against numerous threats to Bank's IT Asset on a 24x7x365 basis, a full fledged Cyber Security Operation Centre (CSOC) has been set up by the Bank at its DC & DRS and the same is now operational with following 12 solutions:

- Data Loss/Leakage Prevention (DLP)

- Cyber Security Operations Center (C-SOC) with Security Information and Event Management solution (SIEM)

- Web Application Firewall (WAF)

- Database Activity Monitoring (DAM)

- Proxy and WEB Gateway

- Privilege Identity Management Solution (PIM)

- Anti-Advanced Persistent Threat (Anti-APT)

- Vulnerability Assessment Scanners (VAS)

- Network Access Control (NAC)

- End-point Behavioral Based Protection Solution

- Mobile Device Management(MDM)

- Anti-DDoS Call Centre Setup

- Bank has launched the service Call Centre facility in Complete outsourced model. The call centre setup facilitate various services/functionalities such as Inbound Calls (from customer), Outbound Calls (for new product promotions, soft recovery), IVR etc

Branch-wise Vacant Locker Status:

- Branch-wise position of vacant locker is being displayed in the Bank's website.

E. MANAGEMENT INFORMATION SYSTEM (MIS)

The Bank has its Automated Data Flow (ADF) system developed in-house to provide MIS to RBI seamlessly. Bank has set up Data Repositories for Deposits, Advances and Customers information for maintaining accuracy and consistency in data provided to various stake holders. The MIS also provides data for preparation of Balance Sheet through new accounting system IndAS.

The present MIS setup of the Bank is the result of in-house development and caters to all the scheduled and adhoc data requirements of the various offices of the Bank and that of all the regulators as well.

Recently the MIS department has stepped into data analytics technology to support the decision making process of the Bank.

Status of Implementation of Ind AS

For effective implementation of Ind AS, a Steering Committee headed by an Executive Director has been formed at Head Office, to monitor the progress of implementation of Ind AS from time to time. Moreover, a separate Ind AS Cell to handle various activities pertaining to implementation of Ind AS has been formed at Head Office. Necessary system changes, including IT, have been envisaged and the steps for implementation of such changes are in progress.

As per earlier RBI guidelines, banks were required to implement Indian Accounting Standards (Ind AS) from Financial Year 2019-20, with comparatives of previous year. RBI vide its notification dated 22.03.2019, has advised their decision to defer the implementation of Ind AS till further notice, since the legislative amendments recommended by them are still under consideration of the Government of India.

Bank has been submitting Proforma Ind AS financial statements as per Ind AS to RBI every quarter, within 15 days of declaration of quarterly results or within 60 days from the end of the quarter, whichever is earlier, as per directives of RBI. The last such Proforma Ind AS Financial Statements submitted was for the period ended 31^st December 2018.

F. BRANCH AND OFFICE NETWORK

Domestic Presence

The Bank has pan India presence of 3229 branches. Out of 3229 domestic branches, 1205 are at Rural, 759 at Semi-urban, 647 at Urban and 618 in Metropolitan Centres. 1 new branch has been opened during FY19 at Rural center. Further, 8 Metro, 2 Urban, 5 semi-urban and 2 Rural branches have been merged to consolidate the business of closely located centres.

International Presence

The Bank is having one overseas branch with a dealing room at Hong Kong. In the current financial year, in order to consolidate it's operations the Board has approved for the closure of its Hong Kong operations. Accordingly the business of Hong Kong branch has decreased from Rs.12,871.38 crore as on 31^st MAR’18 to Rs.3,299.29 crore as on 31^st MAR’19.The business of the branch decreased by 74.37% on Y-o-Y basis. The total deposit as on 31^st MAR’19 stood at Rs.33.15 crore, whereas advances stood at Rs.3,266.14 crore. The Hong Kong branch earned operating profit of Rs.57.59 crore and net loss of Rs.46.06 crore in FYRs.19. The net loss is due to increase in provisions on NPA accounts.

G INTERNATIONAL BANKING

During the year Bank has opted for centralization of foreign exchange business through its Forex Processing Cells at Kolkata and Mumbai. The Bank also has a centralized fully equipped Forex dealing room at Integrated Treasury Branch, Mumbai which handles forex transactions in 9 currencies and maintains 13 Nostro accounts and 1 Vostro account. Export Credit of the Bank as on 31^st MAR’19 stood at Rs.2,434.57 crore as compared to Rs.2,424.65 crore as on 31^st MAR’18. The Bank is taking all steps to increase the credit flow to exporters. The Bank maintains correspondent relationship with prime banks abroad. The Bank is also catering to the needs of Non-Resident Indians through its branches by providing various types of deposit & loan products e.g. FCNR, NRE & NRO deposits, Housing Loan etc. Presently Bank is having an arrangement with M/s. Unimoni Financial Services Ltd. to facilitate Money Transfer Services to the domestic customers receiving remittances from their relatives residing abroad. Bank during the year has also initiated the process for entering into fresh agreement with M/s EBIX Money Express Pvt. Ltd.(EBIXCASH) in order to increase global reach under MTSS scheme of Reserve Bank of India.

H. OPERATIONS DIVISION

Business Processes

Business Process Re-engineering (BPR) Cell is functioning with the purpose of bringing desired changes in the existing systems and processes, products and business processes of the bank on a continuous basis for maximizing performance, mainly productivity and efficiency.

With a view to optimisation of resources, reducing operating costs, the bank is taking steps for re-organisation of establishments, prune establishments which are not essential. One such move is introduction of Transformation Project namely Navoday - Rising for a Change-Changing to Rise.

Under the said project various changes have been introduced like dedicated processing centres to improve the turnaround time, asset quality and customer service. The dedicated Retail and MSME Processing centres will bring uniformity in loan sanctions and procedures followed.

More stress is laid upon less paper banking by introduction of green channel for cash transactions at the branches namely Sugam.

The bank has identified a number of areas where new systems & processes are under development. This will improve the customer convenience and quality of customer service.

I. BUSINESS DIVERSIFICATION

a. Insurance Business:

Total income earned from marketing of wealth products stands at Rs.74.44 Cr as on 31.03.2019 against Rs.53.43 Crore earned till 31.03.2018 registering a growth of 39.32% i.e. Rs.21.01 Cr in excess to that earned for similar period in last financial year.

i. Life Insurance:

Bank has a corporate agency with M/S Life Insurance Corporation of India and SBI Life Insurance.

Income under Life Insurance business witnessed a growth of 49.12% on Y-O-Y basis registering an income of Rs.11.81 Cr as on 31.03.2019 against Rs.7.92 Cr in the preceding year up to 31.03.2018. An increase of Rs.3.89 Cr is achieved in absolute terms.

ii. Non Life Insurance:

Bank, as a corporate agent of M/s. Universal Sompo General Insurance Company Limited, earned revenue of Rs.17.53 crore (including HCP) as against Rs.17.05 crore, during FY18.

Under Health Insurance segment, Health Care Plus Scheme has generated an income of Rs.3.11 Crore as on 31.03.2019 against Rs.2.35 Cr for the similar period last year registering a growth of 32.34%

b. Mutual Funds:

Bank is distributing the Mutual Fund schemes of 6 AMCs i.e. Reliance Nippon AMC, PNB Principal AMC, Kotak Mutual Fund AMC, UTI MF AMC, Franklin Templeton AMC and Essel AMC (formerly known as Peerless) through Bank branches.

Bank earned commission of Rs.53 lacs from distribution of Mutual Fund.

c. Depository Services:

Income in Depository Operations stood at Rs.0.69 Cr as on 31.03.2019 which has grown 27.78% in comparison to the income earned last year i.e. Rs.0.54 Cr as on 31.03.2018.

Online facility to open Trading account has been made live with our channel partner Aditya Birla Money Ltd.

d. Applications Supported by Blocked Amount (ASBA) Services:

Being Self Certified Syndicate Bank (SCSB) for submitting of application in public issues (IPO/FPO/ Right Issue), this facility has now been made available from all the branches of the Bank and also through Internet Banking for Retail Customers.

ASBA facility is also available for Syndicate/Sub syndicate Members for processing broker bidded IPO forms at 92 designated bank branches. During FY 2017-18, the Bank processed applications of the customers for 206 IPOs.

e. Cash Management Services:

Activities undertaken under CMS business have earned an income of Rs.43.88 Cr. as on 31.03.2019 against Rs.27.37 Cr for the similar period in last fiscal. An absolute growth of Rs.16.51 Cr. is registered which is 60.32% higher than the previous year.

New Products & Initiatives

a. 1/1/1 Newly launched Customer Relationship Management Initiative

In order to enjoy edge over other Banks in acquisition & retention of valuable individual customers such an initiative was launched in which the Branch Head is required to personally contact/get in touch with the new customer under target group as under:

- After 1 Day of opening of account:

-For thanking him/her for showing interest in the Bank.

- After 1 Week of opening of account:

-For confirming that he/she has received Debit Card, Cheque Book, Internet Banking Kit, Mobile Banking facility etc.

- After one month of opening of account:

-For confirming that everything is going on fine and trouble shoot in case of any deficiency.

b. MACT Claims SB Account and Motor Accident Claims Deposit Account

In terms of the direction of Hon'ble Delhi High Court and in line with the model scheme drafted by IBA, our Bank has formulated special Deposit Products for disbursement of compensation amount to the victims of road accidents, so that compensation amount may be disbursed by the Claims Tribunals to the claimant(s) in a phased manner.

The one time lump sum amount, as decided by the Court/ Tribunal as compensation to the motor accident victims, will be deposited in a special Term Deposit Account in the name of the claimant to be opened for the purpose, known as “Motor Accident Claims Annuity Deposit (MACAD)”. The amount will be received by the claimant from the Bank in Equated Monthly Installments (EMIs) comprising a part of principal amount as well as interest. Bank will deposit the EMIs over a certain period, as decided by Court, to a special SB Account of the claimant to be opened by the Bank, named “MACT Claims SB Account.”

c. Capital Gains Accounts Scheme 1988

Government of India, Ministry of Finance, Department of Revenue (Central Board of Direct Taxes) formulated a Scheme called the Capital Gains Accounts Scheme,1988” for the tax payers to avail the benefit of exemption from Capital Gains on or before due date of filing return of income. In terms of the said scheme, our Bank has introduced two separate types of accounts Deposit Account Type A (Savings Account) and Deposit Account Type B (Term Deposit Account) which may be cumulative or non-cumulative. Eligible taxpayers who wish to claim exemption from income arising on sale of long term Capital Assets, meant for re-investment by way of acquisition of any other specified asset within stipulated time frame, may avail the scheme.

d. AllBank GenX - A specially designed Savings Account for the Youth

In order to tap the huge potential for economic and social progress of youth of the nation in the age group of 18-40 years and to meet their dynamic financial needs and aspirations, Bank has decided to offer a specially designed product, “AllBank GenX” for them.

The product encompasses multiple benefits,viz. concessional rates on MSME loans and education loans, waiver of processing charges on housing loan and car loan, discount on locker rentals and optional health insurance premium, free remittances and demat account for first year and much more.

The product thus not only inculcates the habit of Savings in today's Youth but also empowers them to achieve greater 'Financial Freedom' by catering to their Savings, investment and lifestyle needs.

e. AllBank Kishore

Keeping in mind the Banking needs of Minors in the Age Group of 10-18 years, Bank has introduced AllBank Kishore for educating them the art of 'Saving' and tenets of financial discipline. The product envisages various benefits like minimum opening amount of Rs.500/- with no average minimum balance requirement, Cash withdrawal limit of Rs.10000/- per day, internet banking & empower facility with transaction limit of Rs.10000/- per day. Facility of Rupay debit card with transaction limit of Rs.5000/- per day with no maintenance charge for the 1^st year and concessions in interest rate of education loans. The account will be converted to AllBank Gen-X automatically on attainment of 18 years.

f. AllBank Salaam Savings Account

The Bank has introduced a new Savings Banks account named as AllBank Salaam, specially designed for Indian Soldiers who work in far flung locations of the country to ensure national security.

With the introduction of this product, Defence Personnels can get an easy access of the banking facilities. Moreover, special offer and discounts for the “AllBank Salaam” account holders is a wonderful gift by the Bank to the Defence Personnel for their selfless service to the nation.

“AllBank Salaam” Account offers a host of features, benefits, and concessions, including the life time unique zero balance Savings Account. Defence Personnels will also be able to get wealth advisory services through Branch Manager, who will be a one point contact for all financial services needs including banking, investments, insurance, and other special needs.

g. AllBank FDD-Foundation Day Deposit for 155 days & 333 days

With a view to mobilise sizeable volume of Domestic Retail Term Deposits and with recent increase in the amount for classification of Bulk Deposits, the Bank has decided to introduce a Foundation Day Deposit (FDD) products for 155 days, valid up to 31.03.2020, to celebrate 155th Anniversary of the Bank and 333 days, valid up to 31.03.2020, to generate the growth of Retail Term Deposits that bundles many benefits viz. co- branded credit card, facility of loan/overdrafts. The product is available to all the customer categories.

h. Introduction of new Savings Account, Current Account, TASCG(Trust, Association, Society, Club and Government) Accounts

In order to augment low cost deposits in a substantial manner to reduce the cost of resource mobilization and dependence on high cost bulk deposits new Savings Account (Silver, Gold & Platinum), Current Account (Silver, Gold & Platinum) and TASCG (Trust, Association, Society, Club and Government) Accounts were introduced. The products have lucrative features like discount on service charges, processing fees of retail loans, NEFT/RTGS and many more to attract new customers.

i. Doorstep Banking Services- Senior Citizens more than 70 years of age and differently- abled or infirm persons

In order to provide convenient and friendly Banking services to Senior Citizens of more than 70 years of age and differently abled persons (having medically certified chronic illness or disability) including those who are visually impaired, a Scheme has been formulated by our Bank. Such Door-Step banking facility includes pickup of cash and instruments against receipt, delivery of cash against withdrawal from account, delivery of IOIs, submission of KYC documents and Life Certificate at the premises/ residence of such customers. Door-Step Banking services will be provided at the residence/office of the eligible customer or at any place as specified by him/her in the application form. The Pickup and delivery address may be changed by the customer subsequently by giving a written request for the same. However, the distance of the pickup/ delivery point will be restricted to 10 kms. from the branch.

j. emPower

In order to strengthen the digital delivery effectively, the Bank has introduced a mobile app named “empower”. This app is available on Playstore / AppStore which has since been downloaded by over 1 million customers and transactions on this app are increasing on daily basis. The APP is scheduled to get major enhancements like Chatbot and Artificial Intelligence based e-Commerce payments.

J. GOVERNMENT BUSINESS

a. Atal Pension Yojana (APY)

Since inception, we have mobilized 4.08 lac subscribers under Atal Pension Yojana as on 31.03.2019. In FY 2018-19 number of APY subscribers mobilized is 1.74 lac.

- Hon'ble MD & CEO of our Bank qualified for award & felicitation by PFRDA / DFS in APY campaign “Leadership Capital”.

- Hon'ble Executive Director of our Bank qualified for award & felicitation by PFRDA / DFS in campaigns “Makers of Excellence-2.0” & ”Big Believers”.

- Corporate General Manager of our Bank qualified for award & felicitation by PFRDA / DFS in APY campaign “Exemplary Eight”.

- ”Zonal Head, Guwahati” and “Branch Head Bangaon branch” nominated to receive award from PFRDA / DFS for exemplary performance in APY campaign “Art of Inclusion”.

b. National Pension System (NPS)

There are three NPS corporate clients in our bank namely Allahabad Bank, Tenughat Vidyut Nigam Limited (TVNL) and Rahee Infratech Ltd. For Allahabad Bank total 13782 corporate accounts have been mobilized as on 31.03.2019. We are conducting sensitization programme at various locations to mobilize more NPS All Citizen & Corporate accounts.

c. Sukanya Samriddhi Accounts (SSA)

Since inception we have mobilized total 28187 accounts having total balance of Rs.128 crore as on 31.03.2019. In FY- 2018-19 we mobilized 12542 accounts.

d. Public Provident Fund (PPF)

Since inception we have mobilized total 121406 PPF accounts having total balance of Rs.2893 Crore as on 31.03.2019. During FY- 2018-19 we mobilized 33588 accounts.

e. Senior Citizen Savings Scheme (SCSS)

Since inception we have mobilized total 20965 SCSS accounts having total balance of Rs.1074 Crore as on 31.03.2019. In FY- 2018-19 we mobilized 17402 accounts.

f. CBDT

We have total 1012 authorized branches for CBDT collection. In FY 2018-19 total 5.50 lac CBDT transaction was done through our bank out of which 3.26 lac transactions were in physical mode and remaining 2.24 lac transactions were online transactions.

g. Goods & Services Tax (GST)

All of our branches are equipped for collection of GST. In FY 2018-19 total 3.45 lac GST transactions were done through our bank out of which 0.20 lac transactions were in physical mode and remaining 3.25 lac transactions were online transactions.

h. Pension Disbursement

Our bank is presently disbursing pension to1.08 lac Central Pensioners & 0.70 lac state pensioners. Central pension is being disbursed through Central Pension Processing Centre, Lucknow. We are in the process of migrating disbursement of State Government Pensioners through CPPC, Lucknow.

K. TREASURY - OPERATIONAL HIGHLIGHTS

Domestic Operations:

The treasury booked a trading loss of Rs.267.44 crores during FY19, thereby posting a Y-o-Y de-growth of 56.17% over FY18. Further, the Interest Income earned during FY19 was Rs.4937.61 crores, a 20.59% Y-o-Y growth over the previous period. There was an increase in domestic Investment portfolio of Rs.12,257.36 crores, i.e., from Rs.68,738.24 crores in MAR’18 to Rs.80,995.60 crores in MAR’19.

Portfolio Highlights:

The global investment portfolio of the Bank as on 31.03.2019 stood at Rs.81,317.46 crores, which included domestic investment of Rs.80,995.60 crores and Overseas investment by our HongKong Branch to the tune of HKD 365.33 mio, i.e., Rs.321.86 crores (converted @ 1HKD = Rs.8.81).

The portfolio of Rs.81,317.46 crores was split in to HTM category carrying Rs.49,816.08 crores (i.e., 61.26%), AFS Category carrying Rs.31,501.38 crores (i.e., 38.74%) and HFT category carrying Rs.0.00 crores(i.e. 0.00%).

On an effective NDTL of Rs.2,22,220.51 crores as on 31.03.2019, the Bank maintained SLR securities of Rs.56,218.31 crores which was 25.30% of NDTL against a requirement of 19.25%. Out of our SLR holdings, Rs.36,386.28 crores, which was 16.37% of NDTL, was held in HTM category against a limit of 19.50%.

The Bank's NSLR portfolio of Rs.25,099.15 crores comprised mainly of Rs.13240.00 Cr of GOI Recapitalization Bond, Rs.4088.74 crores of Bonds/ Debentures, Rs.1836.26 crores of Security Receipts and Rs.1318.80 crores of shares, Rs.3611.77 crores of CD and Rs.25.02 crores of Special SDL Bonds, Subsidiary & JV of Rs.156.27 crore, HKTB of Rs.321.86 Cr and Others for Rs.500.44 crore. The equity portfolio of the Bank stood at Rs.1318.80 crores, which included Rs.930.13 crores of shares received through conversion of Debt under CDR/SDR/S4A schemes.

L. CUSTOMER CARE

The Bank has formulated customer centric policies, such as Customer Rights Policy, Deposit Policy, Cheque Collection Policy, and Compensation Policy and these are displayed in Bank's website. The Bank has adopted “The Code of Bank's Commitment to Customers” & ”Code of Bank's Commitment to Micro & Small Enterprises” formulated by BCSBI. Citizen Charter is adopted by the Bank and is available at the branches and website of the Bank. The Bank also conducts Customer Service Committee meetings at every branch and Zonal Office on monthly basis for providing better customer service. Based on the feedback received and issues raised by the customers, the Bank also conducts a quarterly meeting of Standing Committee on Customer Service and the same is placed before the Customer Service Committee of the Board on quarterly basis.

Customer Grievance Redressal Cell

A web based Portal, aimed at providing the customers with a platform to lodge their grievances against the Bank for deficiency in services, has been provided on the Bank's website, www.allahabadbank.in, under Customer Care. Complaints received directly at Head Office are also lodged through this portal for monitoring, record & follow up. In order to prioritise & expedite the redressal, all Complaints are categorized into 3 Baskets viz, A,B & C. Complaints received through MOF, DPG (CPGRAMS portal), RBI, BCSBI, MPs/ MLAs and other regulators are put in the Basket A for their expeditious redressal. Bank has a dedicated Customer Grievance Redressal Cell at Head Office. The Principal Nodal Officer, of the rank of General Manager designated by the Bank, monitors the implementation of customer service and complaint handling mechanism for the entire Bank. Complaints received from customers are being redressed and suitable replies are sent to the customers. The partially or wholly rejected complaints are escalated to the Internal Ombudsman for obtaining an impartial view of the customers' grievances.

Initiatives taken during FY19 for improvement in customer service

Several initiatives were taken to provide timely and quality redressal to customer complaints. Auto-escalation of complaints has been made functional for systematic and timely redressal of complaints. Real-time tracking of complaints and provision for receiving customer feedback has also been implemented in the CGRS Portal. A 24*7 Contact Centre has also been opened in Hyderabad to take complaints through phone call.

Disclosure of Complaints

Excluding AUPGB

M. PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

The Parliament of India passed the “Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013” in the year 2013. The Act provides protection against sexual harassment of women at workplace and for the prevention and redressal of complaints of sexual harassment and for the matters connected therewith or incidental thereto.

The Bank has constituted committee under the sexual harassment of women at workplace (prevention, prohibition and Redressal) Act, 2013 and has devised a Complaint Mechanism to redress the complaint(s) made by the victim(s) and to ensure time bound treatment of the same.

The Bank is committed to provide a safe and conducive work environment to its employees during the financial year.

N. IMPLEMENTATION OF OFFICIAL LANGUAGE POLICY

The Bank has been leading in the area of implementation of Official Language and achieved all targets in all parameters prescribed by Government of India, Ministry of Home Affairs, Department of Official Language for FY19. In addition, the Bank is using Unicode Fonts for Hindi correspondence at all level. During FY19, the Bank has been bestowed various awards for its excellent performance for the use of Hindi. Further Town Official Language Committees situated in different locations of the country have also awarded the Bank offices including First Prize to our Head Office by Town Official Language Implementation Committee (Bank), Kolkata. The bank is successfully convening the Town Official Language Implementation Committee constituted by the Government of India in Ranchi and Gonda. Town Official Language Implementation Committee (Bank), Ranchi has been awarded with Third Prize in Eastern Zone under Region “A” for the year 2017-18.

The third sub-committee of Committee of Parliament on Official Language visited our Rudrapryag Branch under ZO Dehradun on 03.05.2018 and Sanatan Dharm Mandir Marg Gwalior Branch under ZO Bhopal on 29.08.2018. The Committee not only expressed satisfaction but also appreciated the efforts made by the Bank for progressive use of Hindi. Officials of DFS, MOF, GOI also inspected our Zonal Office, Delhi NCR on 30.07.2018 and ZO Nagpur on 09.11.2018 regarding implementation of Official Language and appreciated the work being done by the Bank for implementation of Rajbhasha.

The Bank observes “Hindi Maah” in the month of September every year. Various competitions are organized at all India level in which staff members of all cadres participate enthusiastically. The winners are awarded with prizes in Rajbhasha function. This year also, the Bank organized Hindi Maah and other programmes/competitions and winners were awarded in the main function of Hindi Diwas.

Further, selected Hindi essays from All India Inter Bank Hindi Essay Writing Competition organized by the bank have been compiled and published namely “Avsar Aur Chunautian: NPA Vasooli, E-Banking Aur Jokhim Prabandhan” and same has been released during Hindi Diwas programme.

Akhil Bhartiya Rajbhasha Adhikari Sammelan was organized by the Bank at Staff College Kolkata on 28-29 March, 2019. Offices which performed remarkably well in implementation of Official Language have been awarded with Shield and Certificates by our Hon'ble Managing Director and Chief Executive Officer.

O. JOINT VENTURES & ASSOCIATES

- The Bank holds 27.04% equity stake in Asset Management Company “ASREC (India) Ltd.”, along with other Banks/ Institutions.

- The Bank holds 28.52% equity stake in insurance company namely “Universal Sompo General Insurance Company Limited” along with Indian Overseas Bank, Karnataka Bank Ltd., Dabur Investment Ltd. and Japanese insurance major “Sompo Japan Nipponkoa Insurance Inc”

- Allahabad UP Gramin Bank (AUPGB) with Head Office at Banda (UP).

Allahabad UP Gramin Bank (AUPGB)

Allahabad UP Gramin Bank (AUPGB) with Head Office at Banda (UP) was sponsored by our Bank till 31.03.2019.

The Government of India vide notification no. 7/8/2017-RRB (Uttar Pradesh II) dated 25.01.2019 has notified the amalgamation of AUPGB and Gramin Bank of Aryawart (sponsored by Bank of India) into a single Regional Rural Bank. The AUPGB, our sponsor RRB has ceases the business w.e.f 01.04.19 and amalgamated to Gramin Bank of Aryawart, sponsored by Bank of India (BOI).

During the last financial year, total business of AUPGB rose to Rs.18204 crore in MAR’19 from Rs.16541 crore in MAR’18 showing Y-o-Y growth of 10.05%. The Net loss of our sponsored RRB in FY19 stood at Rs 459 crore as against profit of Rs.35.32 crore in FY18.

P. AWARDS AND ACCOLADES

- Shri SVLN Nageswara Rao, General Manager of our Bank has been awarded by PFRDA as “Exemplary Eight” Best Performing General Manager for their APY registration campaign in January 2019.

- Bank was awarded Banking Technology 2019 awards by IBA at a function held at Mumbai on the following parameters : 1) Best Payment Initiatives (2) Best Financial Inclusion Initiatives (3) Most Innovative Product using Technology

- FGM New Delhi Shri Vikas Kumar received “Leadership Capital” award on behalf of our Hon'ble MD & CEO Shri CH S S Mallikarjuna Rao conferred by PFRDA/DFS on 23.01.2019 at New Delhi for mobilizing 27355 number of new APY Subscribers during the Campaign period 12.11.18 to 30.11.18

- Bank Received award of “Makers of Execellence-ME-2.0” in Financial year 2018-19 from PFRDA

- Bank has been conferred 3rd Rank in the category of Best Performing Public Sector Bank in terms of average Aadhaar Generation and Update. Bank also bagged 7th rank in the category of “Achievers Award” for opening highest percentage of Aadhaar Centres as per given targets.

Q. PCA FRAMEWORK OF RBI & PSBs REFORM AGENDA OF GOI

Owing to high non-performing assets (NPA) and negative Return on Assets (RoA) for two consecutive years, Bank was brought under Prompt Corrective Action (PCA) framework by RBI on 2^nd January 2018.

During FY19, Government of India infused capital to the tune of Rs.11740 crore in three tranches. The RBI, on the basis of capital infusion, decided to lift the restriction imposed on the Bank under the PCA framework with effect from February 26, 2019.

The Bank is also pursuing the reforms agenda (EASE) prescribed by the MOF, GOI for turnaround of the Bank.

R. FUTURE BUSINESS PLAN OF THE BANK

Business Growth:

Bank is looking at a modest business growth of 9% during FY20 through focus on consolidating CASA base & increasing dependency under retail sector.

Slippage:

We expect slippage to moderate and to be contained at approximately 1% per quarter.

Recovery/Resolution:

Dedicated SAM verticals are in place to ensure recovery of around Rs.2000 crores/quarter.

Earnings:

We expect the Bank to break even during Q1FY20 and thereafter to post Net Profits consistently. The NIM is expected to be around 2.65% and visible improvement in Cost to Income Ratio.

Capital Raising Plans:

The Bank shall be requiring to augment growth capital during the year and has obtained board approval for raising equity capital up to Rs.4000 crores through various modes during the year.

S. BOARD OF DIRECTORS

As on 31.03.2019, there were 10 Directors on the Board of the Bank including 3 whole time Directors, i.e., one Managing Director & Chief Executive Officer (MD & CEO) and two Executive Directors. During FY19, following changes took place in the composition of Board of Directors.

- Shri CH. S. S. Mallikarjuna Rao took over as the MD & CEO of the Bank w.e.f 19^th September 2018.

- Shri K. Ramachandran was appointed as the Executive Director of the Bank w.e.f 26.12.2018.

- Shri P.R. Rajagopal was appointed as the Executive Director of the Bank w.e.f 01.03.2019.

- Prof Radha R Sharma was re-nominated as Part Time Non-Official Director w.e.f 01.03.2019 after completion of her tenure on 27.01.2019.

- Shri S. Harisankar Ex-Executive Director on the Board of the Bank was appointed as MD & CEO of Punjab & Sind Bank on 19.09.2018.

- Shri N.K. Sahoo Ex-Executive Director retired on 28.02.2019.

- Smt Usha Ananthasubramanian Ex- MD & CEO demitted office on 13.08.2018 as per GOI directive vide DFS, MOF notification No- F. No. 16/13/2018-BO. I dated 13.08.2018.

T. DIRECTORS' RESPONSIBILITY STATEMENT

The Directors confirm that in the preparation of the annual accounts for the year ended March 31, 2019:

- The applicable Accounting Standards were followed along with proper explanation relating to material departures, if any;

- The accounting policies, framed in accordance with the guidelines of the Reserve Bank of India, were consistently applied;

- Reasonable and prudent judgment 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 proft/loss of the Bank for the year ended March 31, 2019;

- Proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of applicable laws governing banks in India, and

- The accounts have been prepared on the principle of “going concern” basis.

U. ACKNOWLEDGEMENT

The Board of Directors places on record its gratitude to the Reserve Bank of India, Securities Exchange Board of India, and Government of India and other regulatory authorities and financial institutions for their co-operation, strong support and guidance. The Board acknowledges the support of shareholders and also places on record its sincere thanks to its valued clients and customers for their continued patronage. The Board also expresses its deep sense of appreciation for the commitment shown by the employees in supporting the Bank in its performance on all fronts.

For and on behalf of the Board of Directors,

(CH. S. S. Mallikarjuna Rao)

Managing Director and CEO