2010-2011

31.03.2011


( 01.11.2010 )

Shri M Narendra
Chairman and Managing Director
(from 01.11.2010)

Smt Nupur Mitra

Executive Director

( 01.09.2010 )

Shri A K Bansal
Executive Director (from 01.09.2010)

Dr. Vinita Kumar

GOI Nominee Director

( 30.07.2010 )

Shri S V Raghavan
RBI Nominee Director (from 30.07.2010)

( 09.08.2010 )

Shri Sridhar Lal Lakhotia

Workmen Employee Director
(from 09.08.2010)

Shri K Ananda Kumar

Officer Employee Director

Shri B V Appa Rao

Part time non-official

Shri Sooraj Khatri

Part time non-official

Shri Ashok Kumar Bhargava

Shareholder Director

Dr. Chiranjib Sen

Shareholder Director

Shri A Vellayan
Shareholder Director

Shri A P Singh

1.
2.
3.
4.
5.
6.

BOARD OF DIRECTORS AS ON 31.3.2011

,
,
,
. .,
.,
.. .,

AUDITORS

General Manager & Board Secretary

.
( - )
2.PKF Sridhar & Santhanam,Chennai ,
.1,
3.Bhaskaran & Ramesh,Chennai
- 600 002
4.M Bhaskara Rao & Co.,Hyderabad
- 044-28460390 ( ),
5.Mittal Gupta & Co.,Kanpur
28460084, 28460395
- 044-28460129
6.S R Mohan & Co.,Hyderabad
- :[email protected]
1.Varma &Varma,Kochi

Registrar & Share Transfer Agent

M/s,Cameo Corporate Services Ltd,
( Unit IOB ) Subramanian Building,
I Floor, No.1, Club House Road,
Chennai 600 002
Tel : 044 28460390 ( Six Lines ),
28460084 , 28460395
Fax : 044 28460129
E mail : [email protected]

2010-2011

- -

From the Chairman's desk

Auditors' Certificate on Corporate Governance

92

Notice to Shareholder

Annual Accounts

93

- -

Results at a Glance

141
143

22

Cash Flow Statement & Auditors Certificate

23

Auditors Report

171

35

Proxy Form

175
176

Directors Report

-
Management Discussion and
Analysis

2010-11

Report of the Board of Directors on

Attendance Slip

175
176

179

ECS Mandate Form

180

Corporate Governance for the year

2010 -11

60

(in this Annual Report in case of any discrepancy found in Hindi Version, English Version will prevail)

1 2010 31 2011

For the Financial year Ist April 2010 to 31st March 2011

06. 07.2011 ()
12.07.2011 ()
( )
08.06.2011 15.06.2011

Last date for Receipt of

08.07.2011 ( ) 17.00 Proxy Forms

12.07.2011 ()
10.00

12.07.2011()

22.07.2011
22.07.2011

Book Closure Dates

06.07.2011 ( Wednesday )
to 12.07.2011 ( Tuesday )
( both days inclusive )

Posting of Annual Report

08.06.2011 to 15.06.2011

Date of AGM

08.07.2011 ( Friday )17.00 hrs

12.07.2011 ( Tuesday)10:00 AM

Declaration of Dividend
12.07.2011 ( Tuesday )
on or after 22.07.2011
Dividend Payment Date
Probable Date of Despatch
of Dividend Warrants :
on or after 22.07.2011


LETTER FROM THE CHAIRMAN AND MANAGING DIRECTOR

Shri M NARENDRA

Chairman and Managing Director

Dear Shareholders,

2010-11

I present your Bank's Annual Report and Financial

Statements for the year 2010-11. I would like to
briefly highlight some key issues and performance
indicators of the Bank during the year.

2010-11 7.9%
2011-12 8.2% - 8.5%
01.04.2011 305
, 11
26
2010-11 245.9
37.6% 200

351
104.8
,
2009-10 ,
2010-11
: 2010-11

1.04.2010 17527.77
31.03.201 19445.22

:

31 2011
.2,59,020 .2,50,000

The Indian economy is estimated to have recorded

a growth in the range of 8.2%-8.5% during the year
2011-12 as against 7.9% recorded during 2010 -11.
As on 01.04.2011, Foreign Exchange Reserves
stood at USD 305 billion showing an increase of
USD 26 billion as against increase of USD 11 billion
during the corresponding period a year ago. India's
exports grew 37.6% in the fiscal year 2010-11 at
USD 245.9 billion surpassed the Government's
original target of USD 200 billion. Imports also grew
and stood at USD 351 billion and trade deficit was
within manageable limit of USD 104.8 billion. It
reflects higher external demand and on the whole,
economic recovery which began in the second
quarter of 2009-10 has gained momentum. During
2010-11, equity markets generally remained firm
with intermittent corrections in line with the global
movement. The BSE Sensex improved from
17527.77 on 01.04.2010 to 19445.22 on
31.03.2011.
The performance of the Bank during the year under
review:

Your Bank's global business reached Rs

2,59,020 crore as at 31st March 2011, crossing
the Rs.2,50,000 crore mark , a major

Annual Report 2010 - 2011


.1,91,577 .67,443
(35.20%)

milestone in the history of the Bank, resulting in

an increase of Rs. 67,443 crore (35.20%) over
last year's figure i.e. Rs. 1,91,577 crore.

2010 - 2011
.34,434 (31.08 %)
2009-10 .1,10,795
.1,45,229

Deposits of the Bank registered a year-

2010 - 2011
.33,009 (40.86%)
.1,13,791 2009-10
.80,782

Gross Advances registered a y-o-y growth

.1016
(55.08%) 31.03.2010 .
1,845 31.03.2011 .2,861

.707 51.71%
.1,073
2009-10 .37,651
.48,610
40%

44.47 %
.3,459
(27.46%) . 12,597
.16,056
21.87%
18%

31 2011
.14,622 ,
,


78.35%

31.03.2010 11.97% 31.03.2011
16.20%
. 3,168
. 4,208
, 32.83%
Annual Report 2010 - 2011

on-year (y-o-y) growth of Rs. 34,434 crore

(31.08%) during the year 2010-11 and
increased from Rs. 1,10,795 crore for the year
2009-10 to Rs.1,45,229 crore.
of Rs.33,009 crore (40.86 %) and stood at
Rs.1,13,791 crore for the year 2010-11, as
against Rs. 80,782 crore for the year 2009 -10.

Operating Profit registered a y-o-y growth of

Rs.1,016 crore (55.08%) and stood at
Rs. 2,861 crore as on 31.03.2011, as against
Rs.1,845 crore as on 31.03.2010.

Net Profit for the Bank is Rs.1,073 crore at the

end of the year as against Rs. 707 crore for the
previous year, registered a growth of 51.71%.

Net investments of the Bank increased to Rs.

48,610 crore from Rs. 37,651 crore in 2009-10.

The percentage of priority sector advances to

Adjusted Net Bank Credit was at 44.47% as
against RBI norms of 40%.

The agricultural credit portfolio of the Bank

registered a growth of Rs. 3,459 crore (27.46%)
from Rs.12,597 crore to Rs.16,056 crore in the
year under review. The Bank's ratio of
agricultural advances to Adjusted Net Bank
Credit at 21.87 % exceeded the 18% norm. The
Bank took a number of initiatives to increase
the flow of credit to this sector.

The total exposure of the Bank as on

March 31, 2011 to SME sector stood at
Rs.14,622 crore. The Bank has executed MOUs
with the private sector for financing of auto
rickshaws, commercial three wheelers, trucks
and commercial transport vehicles.

The CD Ratio registered a level of 78.35 % at

the end of the reporting period.

The Bank's Net Profit as a percentage of

Average Net worth as of 31.03.2011 stood at
16.20%, as against 11.97% as on 31.03.2010.

Total Net Interest Income improved to

Rs.4,208 crore when compared to
Rs.3,168 crore last year, registered growth of
32.83%.
5

 2.74% 2010-11
3.11%

Net Interest Margin stood at 3.11% for the

. 11,389
17.01% .13,327

31.03.2010 . 1,143
.1225
. 7.12 .10.05
, . 2.63
.4.16
2010 .3,611
2011 .3,090
31.03.2010 4.47% 31.03.2011
2.72%
2010 .1995
2011 .1328
31.03.2010 2.52% 31.03.2011
1.19%

financial year 2010 -11, as against 2.74% for the

previous financial year.
T h e B a n k 's tota l i n com e s to o d a t
Rs.13,327 crore as against Rs.11,389 crore for
the previous year, registering a growth of
17.01%.
The other income which was Rs.1,143 crore as
on 31.03.2010 has gone up to
Rs. 1,225 crore as on 31.03.2011.
While the business per employee has
improved from Rs. 7.12 crore to Rs.10.05 crore,
the profit per employee also improved from
Rs. 2.63 Lac to Rs.4.16 Lac.
Gross NPA stood at Rs. 3,090 crore in March
2011, as against Rs. 3611 crore in March 2010.
In percentage terms, the Gross NPA ratio was
2.72% as at 31.03.2011 as against 4.47% as at
31.03.2010.
Net NPA stood at Rs.1,328 crore in March 2011,
as against Rs.1,995 crore in March 2010. In
percentage terms, the Net NPA ratio was 1.19%
for the year under review as against 2.52 % as at
31.03.2010.
A dividend of 50% has been recommended
by the Board of Directors for the year
2010-11, highest in the history of your Bank.

2010-11 50%

. 2860.63
,

.55.08% 4.47%
2.72%

The Bank posted an impressive global Operating

Profit of Rs. 2860.63 crore, the growth in operating
profit at 55.08% was appreciably high due to
expansion in volume of business, improvement in
Net Interest Margin and improvement in asset
quality, as our Gross NPA Level fell down to 2.72%
as against 4.47% in the previous financial year.

53.97% 70.45%
31
2008 -( )
31.03.2011
14.55% 9%

Your Bank has increased its provisioning for bad

debts to 70.45% from 53.97% as mandated by
Reserve Bank of India. As a Bank with international
presence, we have already moved to the revised
New Capital Adequacy Framework (BASEL II) from
31st March 2008 in line with RBI guidelines. CRAR
as per BASEL-II framework as on 31.3.2011 works
out to 14.55% which is above the requirement of 9%
prescribed by RBI.

In the area of Para-banking, focus was directed on

marketing of insurance products, sale of gold coins
and IT enabled products, periodic campaigns were
conducted at our branches to improve our fee
based income. The Bank continues with its

Annual Report 2010 - 2011


20.12.2008
( , ,
.
)
, :
- - ,
, ,

Corporate Agency arrangement entered into, with

effect from 20.12.2008, with Universal Sompo
General Insurance Company Limited (the Non-Life
Insurance Joint Venture Company of your Bank
with Allahabad Bank, Karnataka Bank, Dabur
Investment Corporation and Sompo Japan
Insurance Inc.) for distribution of non-life insurance
products.
As regards our overseas operations, we have six fullfledged overseas branches two in Hong Kong and
one each in Singapore, South Korea, Sri Lanka and
Thailand. Remittance Centers function in Boon Lay
and Serangoon, Singapore while an Extension
Counter is located in Sri Lanka.

, ,
, ,

The Bank's Representative Offices are located in

Guangzhou (China), Kuala Lumpur (Malaysia), Ho
Chi Minh City (Vietnam) and Al Karama, (Dubai).

,
16 04 2010
13 08 2010
()
300 35%
( 105 )
10 14035
140350

The Bank has signed a joint venture agreement with

Bank of Baroda and Andhra Bank to open a Banking
subsidiary in Malaysia. Bank Negara, the Central
Bank of Malaysia has issued the license on
16.04.2010. The Joint venture subsidiary has been
duly incorporated at Malaysia on 13.08.2010 by
name India International Bank (Malaysia) Ltd. Out
of the total capital of the joint venture MYR 300 Mio,
our Bank's share is 35% ( MYR 105 Mio). Bank has
so far subscribed to 14035 shares of MYR 10 each
amounting to MYR 140350 towards preliminary
expenses of the join venture.

Promotion of good industrial relations continues to

be an objective of our Bank.

( )


2010-11

2010-11

-

Annual Report 2010 - 2011

During the year under review, globally, recovery in

the advanced economies has also gained
momentum. In this background Emerging Market
Economies (EMEs) (of which India is one), although
facing inflationary pressures, has shown significant
signs of improvement in their GDP growth levels. In
the domestic front, GDP Growth during 2010-11 is
likely to sustain close to the trend, aided by a
rebound in agricultural and Non-agricultural growth.
Aggregate demand remained robust, private
consumption and investments were the key drivers
and the same were supportive of growth in 2010-11.
However on a note of caution, the impact of Middle
East and North Africa (MENA) unrest can be
significant, while that of Japan's natural disaster will
be marginal. The affected economies' share in
India's trade is not large.



22.2% 20%
17.2%
18%

Further, there may be some transitory impact on

investment flows from Japan. The Bank lending in
India has shown an upward trend and grew by
22.2 %, exceeds Reserve Bank of India's projection
of 20% on the other hand deposits has grown by
17.2 %, fell short of RBI's forecast of 18%.

,


,

Looking forward, your Bank faces exciting

business opportunities in future. Major thrust
areas for the current financial year are to improve
CASA ratio and recovery of NPAs. Our inherent
strengths are our potential, our wide network of
branches and our long term vision. These will
enable us to capitalize on the opportunities and
face the challenges in the Industry so as to
consolidate our market position and deliver our
commitment to generate value and returns for our
customers, shareholders and employees.

As always, your Bank relies on the continuing trust

and support of our shareholders and we take this
opportunity to thank the shareholders for their
commitment to the Bank's vision over the years.

Yours sincerely,

M NARENDRA
Chairman and Managing Director

Annual Report 2010 - 2011

NOTICE TO SHAREHOLDERS

12
, 2011 10.00 , (
), 314, , - 600 018

Notice is hereby given that the Eleventh Annual

General Meeting of the shareholders of INDIAN
OVERSEAS BANK will be held on Tuesday, the 12th
July 2011 at 10.00 A.M. at Narada Gana Sabha,
(Sathguru Gnananda Hall) 314 TTK Road, Chennai
600 018, to transact the following business :

1.

31 , 2011 -,
31 , 2011 -
,
-

,

2.

2010-11

3.

" (
) 1970, (
) 1970 (
) 2003
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1949,
1992
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,

1.

To discuss, approve and adopt the audited

Balance Sheet of the Bank as at 31st
March 2011, Profit and Loss account of the
Bank for the year ended 31st March 2011,
the report of the Board of Directors on the
working and activities of the Bank for the
period covered by the accounts and the
Auditors' report on the Balance Sheet and
Accounts.

2.

To declare dividend for the financial year

2010-11.

3.

To Further issue of shares:

"RESOLVED THAT pursuant to the provisions of the

Banking Companies (Acquisition and Transfer of
Undertakings) Act, 1970 (Act), The Nationalised
Banks (Management and Miscellaneous
Provisions) Scheme, 1970 (Scheme) and the
Indian Overseas Bank (Shares and Meetings)
Regulations, 2003 and subject to the approvals,
consents, sanctions, if any, of the Reserve Bank of
India (RBI), the Government of India (GOI), the
Securities and Exchange Board of India (SEBI),
and / or any other authority as may be required in
this regard and subject to such terms, conditions
and modifications thereto as may be prescribed by
them in granting such approvals and which may be
agreed to by the Board of Directors of the Bank and
subject to the regulations viz., SEBI(Issue of
Capital and Disclosure Requirements)
Regulations, 2009 (ICDR Regulations) / guidelines,
i f a n y, p r e s c r i b e d b y t h e R B I , S E B I ,
notifications/circulars and clarifications under the
Banking Regulation Act, 1949, Securities and
Exchange Board of India Act, 1992 and all other
applicable laws and all other relevant authorities
from time to time and subject to the Listing
Agreements entered into with the Stock Exchanges
where the equity shares of the Bank are listed,

 ( ""


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.10 /-
18,03,67,015 (
) .180,36,70,150/(
) .618.75
.3000
.799.12 ,
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1970 3 (2) (
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consent of the shareholders of the Bank be and is

hereby accorded to the Board of Directors of the
Bank (hereinafter called the Board which shall be
deemed to include any Committee which the
Board may have constituted or hereafter constitute
to exercise its powers including the powers
conferred by this Resolution) to offer, issue and
allot (including with provision for reservation on
firm allotment and/or competitive basis of such part
of issue and for such categories of persons as may
be permitted by the law then applicable) by way of
an offer document/prospectus or such other
document, in India or abroad, such number of
equity/preference shares (cumulative / noncumulative) / securities (in accordance with the
guidelines framed by RBI, specifying the class of
preference shares, the extent of issue of each class
of such preference shares, whether perpetual or
redeemable or irredeemable and the terms &
conditions subject to which each class of
preference shares may be issued) of the face value
of Rs.10 each and in any case not exceeding
18,03,67,015 (Eighteen Crore Three Lac Sixty
Seven Thousand and Fifteen) and aggregating to
not more than Rs.180,36,70,150/- ( Rupees One
Eighty Crore Thirty Six Lac Seventy Thousand One
Hundred Fifty Only) which together with the
existing Paid-up Equity share capital of Rs 618.75
crore amounts to Rs. 799.12 crore within the total
authorized capital of the bank Rs.3000 crore, being
the ceiling in the Authorised Capital of the Bank as
per section 3 (2A) of the Banking Companies
(Acquisition and Transfer of Undertakings)
Act ,1970 or to the extent of enhanced Authorised
Capital as per the Amendment (if any ), that may be
made to the Act in future, in such a way that the
Central Govt. shall at all times hold not less than
51% of the paid-up Equity capital of the Bank,
whether at a discount or premium to the market
price, in one or more tranches, including to one or
more of the members, employees of the Bank,
Indian nationals, Non-Resident Indians (NRIs),
Companies, private or public, investment
institutions, Societies, Trusts, Research
Organisations, Qualified Institutional Buyers
(QIBs) like Foreign Institutional Investors (FIIs),
Banks, Financial Institutions, Indian Mutual Funds,
Venture Capital Funds, Foreign Venture Capital

10

 , , ,
, ,
,

/
/ /

Investors, State Industrial Development

Corporations, Insurance Companies, Provident
Funds, Pension Funds, Development Financial
Institutions or other entities, authorities or any other
category of investors which are authorized to invest
in equity/preference shares/securities of the Bank
as per extant regulations/guidelines or any
combination of the above as may be deemed
appropriate by the Bank".

" ,
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( )
1970, (" ") 2009
,

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,

"RESOLVED FURTHER THAT such issue, offer or

allotment shall be by way of public issue, rights
issue, preferential issue and/or on a private
placement basis, with or without over-allotment
option and that such offer, issue, placement and
allotment be made as per the provisions of the
Banking Companies (Acquisition and Transfer of
Undertakings) Act, 1970, the SEBI (Issue of Capital
and Disclosure Requirements) Regulations, 2009
(ICDR Regulations) and all other guidelines
issued by the RBI, SEBI and any other authority as
applicable, and at such time or times in such
manner and on such terms and conditions as the
Board may , in its absolute discretion, think fit".

" * /
/

,
, ,
,
, ,

RESOLVED FURTHER THAT the Board shall have

the authority to decide, at such price or prices in
such manner and where necessary in consultation
with the lead managers and /or underwriters and
/or other advisors or otherwise on such terms and
conditions as the Board may, in its absolute
discretion, decide in terms of ICDR Regulations,
other regulations and any and all other applicable
laws, rules, regulations and guidelines whether or
not such investor(s) are existing members of the
Bank, at a price not less than the price as
determined in accordance with relevant provisions
of ICDR Regulations".

"
, (
) 1970 ,
( ) 2003
, ,
1999 (
)

RESOLVED FURTHER THAT in accordance with

the provisions of the Listing Agreements entered
into with relevant stock exchanges, the provisions
of Banking Companies (Acquisition and Transfer of
Undertakings) Act, 1970, the provisions of the
Indian Overseas Bank (Shares and Meetings)
Regulations, 2003, the provisions of ICDR
Regulations, the provisions of the Foreign
Exchange Management Act, 1999 and the Foreign

11

 2000
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51%
(
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VIII
/ / / /
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,

Exchange Management (Transfer or Issue of

Security by a Person Resident Outside India)
Regulations, 2000, and subject to requisite
approvals,consents, permissions and/or sanctions
of Securities and Exchange Board of India ( SEBI)
,Stock Exchanges , Reserve Bank of India ( RBI),
Foreign Investment Promotion Board (FIPB),
Department of Industrial Policy and Promotion
,Ministry of Commerce (DIPP) and all other
authorities as may be required (hereinafter
collectively referred to as the Appropriate
Authorities) and subject to such conditions as may
be prescribed by any of them while granting any
such approval, consent, permission, and/or
sanction (hereinafter referred to as the requisite
approvals) the Board, may at its
absolute
discretion, issue, offer and allot, from time to time in
one or more tranches, equity shares or any
securities other than warrants, which are
convertible into or exchangeable with equity
shares at a later date , in such a way that the Central
Government at any time holds not less than 51% of
the Equity Capital of the Bank, to QIBs (as defined
in Chapter VIII of the ICDR Regulations) pursuant to
a qualified institutional placement, as provided for
under Chapter VIII of the ICDR Regulations,
through a placement document and / or such other
documents/writings/circulars/memoranda and in
such manner and on such price, terms and
conditions as may be determined by the Board in
accordance with the ICDR Regulations or other
provisions of the law as may be prevailing at the
time; provided the price inclusive of the premium of
the equity shares so issued shall not be less than
the price arrived in accordance with the relevant
provisions of ICDR Regulations".

"
VIII

VIII
:
12

"RESOLVED FURTHER THAT in case of a qualified

institutional placement pursuant to Chapter VIII of
the ICDR Regulations, the allotment of Securities
shall only be to Qualified Institutional Buyers within
the meaning of Chapter VIII of the ICDR
Regulations, such Securities shall be fully paid-up
and the allotment of such Securities shall be
completed within 12 months from the date of this
resolution".

"

"

RESOLVED FURTHER THAT in case of QIP issue

the relevant date for the determination of the floor
price of the securities shall be in accordance with
the ICDR Regulations".
12

" /
/ / ,
,
, ,
, ,
,

RESOLVED FURTHER THAT the Board shall have

the authority and power to accept any modification
in the proposal as may be required or imposed by
the GOI / RBI / SEBI/Stock Exchanges where the
shares of the Bank are listed or such other
appropriate authorities at the time of according /
granting their approvals, consents, permissions
and sanctions to issue, allotment and listing thereof
and as agreed to by the Board".
"RESOLVED FURTHER THAT the issue and
allotment of new equity shares / preference shares/
securities if any, to NRIs, FIIs and/or other eligible
foreign investments be subject to the approval of
the RBI under the Foreign Exchange Management
Act, 1999 as may be applicable but within the
overall limits set forth under the Act".

* * ,
/
/ / , ,

1999

"RESOLVED FURTHER THAT the said new equity

shares to be issued shall be subject to the Indian
Overseas Bank (Shares and Meetings)
Regulations, 2003 as amended and shall rank in all
respects pari passu with the existing equity shares
of the Bank including dividend, if any, in
accordance with the statutory guidelines that are in
force at the time of such declaration".

* *
( ) 2003


, ,

RESOLVED FURTHER THAT for the purpose of

giving effect to any issue or allotment of equity
shares/preference shares/securities, the Board, be
and is hereby authorized to determine the terms of
the public offer, including the class of investors to
whom the securities are to be allotted, the number
of shares/ securities to be allotted in each tranche,
issue price, premium amount on issue as the Board
in its absolute discretion deems fit and do all such
acts, deeds, matters and things and execute such
deeds, documents and agreements, as they may,
in its absolute discretion, deem necessary, proper
or desirable, and to settle or give instructions or
directions for settling any questions, difficulties or
doubts that may arise in regard to the public offer,
issue, allotment and utilization of the issue
proceeds, and to accept and to give effect to such
modifications, changes, variations, alterations,
deletions, additions as regards the terms and
conditions, as it may, in its absolute discretion,

/ /

,
, /
, ,
,
,
,
,,

,
, , ,
,

13




"

deem fit and proper in the best interest of the Bank,

without requiring any further approval of the
members and that all or any of the powers conferred
on the Bank and the Board vide this resolution may
be exercised by the Board" .

" / /
/, /, /,

, ,
, , ,

"

RESOLVED FURTHER THAT the Board be and is

hereby authorized to enter into and execute all
such arrangements with any Lead Manager(s),
Banker(s), Underwriter(s), Depository (ies) and all
such agencies as may be involved or concerned in
such offering of equity/preference shares/
securities and to remunerate all such institutions
and agencies by way of commission, brokerage,
fees, or the like and also to enter into and execute
all such arrangements, agreements, memoranda,
documents etc., with such agencies".

"
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''

RESOLVED FURTHER THAT for the purpose of

giving effect to the above, the Board, in
consultation with the Lead Managers,
Underwriters, Advisors and / or other persons as
appointed by the Bank, be and is hereby
authorized to determine the form and terms of the
issue(s), including the class of investors to whom
the shares/ securities are to be allotted, number of
shares/ securities to be allotted in each tranche,
issue price (including premium, if any), face value,
premium amount on issue/conversion of
Securities/exercise of warrants/redemption of
Securities, rate of interest, redemption period,
number of equity shares /preference shares or
other securities upon conversion or redemption or
cancellation of the Securities, the price, premium or
discount on issue/conversion of Securities, rate of
interest, period of conversion, fixing of record date
or book closure and related or incidental matters,
listings on one or more stock exchanges in India
and / or abroad, as the Board in its absolute
discretion deems fit".
"RESOLVED FURTHER THAT such of these shares
/ securities as are not subscribed may be disposed
off by the Board in its absolute discretion in such
manner, as the Board may deem fit and as
permissible by law".

/ ,

, ''

14

" ,
,
,
,
/ ,
,
,
,
,

"

"RESOLVED FURTHER THAT for the purpose of

giving effect to this Resolution, the Board, be and
is hereby authorised to do all such acts, deeds,
matters and things as it may in its absolute
discretion deems necessary, proper and desirable
and to settle any question, difficulty or doubt that
may arise in regard to the issue, of the shares/
securities and further to do all such acts, deeds,
matters and things, finalise and execute all
documents and writings as may be necessary,
desirable or expedient as it may in its absolute
discretion deem fit, proper or desirable without
being required to seek any further consent or
approval of the shareholders or authorise to the
end and intent, that the shareholders shall be
deemed to have given their approval thereto
expressly by the authority of the Resolution".

()

''

RESOLVED FURTHER THAT the Board be and is

hereby authorized to delegate all or any of the
powers herein conferred to the Chairman and
Managing Director or to the Executive Director/(s)
to give effect to the aforesaid Resolutions."

EXPLANATORY STATEMENT:

1. 2011 , 8

, 10 132.53
7,39,49,343
1054
2. 31 2011 13.28%
9%
, ,



3. (
) 1970 3(2)()

, ,

15

1.

In March 2011, the Bank has issued and

allotted 7,39,49,343 equity shares of Rs.10
each at a premium of Rs. 132.53 each to
Government of India on a Preferential Basis
and raised Rs.1054/- crore primarily to
augment long term resources and maintain a
capital adequacy ratio of around 8 per cent.

2.

The Capital Adequacy Ratio of the Bank as on

March 31, 2011 is 13.28%, and well above the
9% stipulated by the Reserve Bank of India.
However in view of certain expansion plans of
the Bank, the implementation of BASEL II
norms, and consequent capital charge, there
is a need to increase the capital to further
strengthen the Capital Adequacy Ratio.

3.

The Bank in terms of Section 3(2B)(c) of the

Banking Companies (Acquisition and
Transfer of Undertaking) Act, 1970, will obtain
requisite approval of the Government of India,
Ministry of Finance for increasing the paid up
capital. However, the Central Government
shall, at all times, hold not less than fifty-one
per cent of the paid up equity capital of the
Bank.

4. ( ) 23
- ()




,

5.
, , /
/
/ ,

-

6.


,

VIII

4.

Sub-Clause (a) of Clause 23 of Listing

Agreement (between Bank and Stock
Exchanges) provides that whenever any
further issue or offer is being made by the
Bank, the existing shareholders should be
offered the same on pro-rata basis unless the
shareholders in the general meeting decide
otherwise. The said resolution, if passed, shall
have the effect of allowing the Board on behalf
of the Bank to issue and allot the securities
otherwise than on pro-rata basis to the
existing shareholders.

5.

The Resolution seeks to enable the Bank to

offer, issue and allot equity shares/preference
shares/securities by way of public issue,
rights issue, preferential issue and/or on a
private placement basis. The issue proceeds
will enable the Bank to strengthen its Capital
Adequacy Requirements as specified by RBI
from time to time.

6.

The Resolution further seeks to empower the

Board of Directors to undertake a qualified
institutional placement with qualified
institutional buyers as defined by ICDR
Regulations. The Board of Directors may in
their discretion adopt this mechanism as
prescribed under Chapter VIII of the ICDR
Regulations for raising funds for the Bank,
without seeking fresh approval from the
shareholders.

,
VIII

" "

In case of a QIP issue in terms of Chapter VIII

of ICDR Regulations, issue of securities, on
QIP basis, can be made only at a price not less
than the average of the weekly high and low of
the closing prices of the shares quoted on a
stock exchange during the two weeks
preceding the "Relevant Date

"

"Relevant Date" shall mean the date of the

meeting in which the Board or Committee of
the Bank decides to open the QIP Issue.
7.

7.

,
,

16

The detailed terms and conditions for the offer

will be determined in consultation with the
Advisors, Lead Managers and Underwriters
and such other authority or authorities as may
be required, considering the prevailing
market conditions and other regulatory
requirements.

8.

, :

, (
) 1970
( ) , 2003
,
/
,

8.

As the pricing of the offering cannot be

decided except at a later stage, it is not
possible to state the price of shares to be
issued. However, the same would be in
accordance with the provisions of the ICDR
Regulations, the Banking Companies
(Acquisition and Transfer of Undertakings)
Act, 1970 and the Indian Overseas Bank
(Shares and Meetings) Regulations, 2003 as
amended from time to time or any other
guidelines / regulations / consents as may be
applicable or required.

9.

9.

For reasons aforesaid, an enabling resolution

is therefore proposed to be passed to give
adequate flexibility and discretion to the
Board to finalise the terms of the issue.

10.
,

10. The equity shares allotted, shall rank pari

passu in all respects with the existing equity
shares of the Bank including dividend.

For this purpose the Bank is required to obtain the

consent of the shareholders by means of a special
resolution. Hence your consent is requested for the
above proposal.

The Board of Directors recommends passing of the

Resolutions as mentioned in the notice.

()

None of the Directors of the Bank is interested or

concerned in the aforementioned Resolution(s),
except to the extent of their shareholding in the
Bank.

BY ORDER OF BOARD OF DIRECTORS

02.05.2011

( )

Chennai
02.05.2011

17

(M NARENDRA)
Chairman and Managing Director

NOTES

1.

1. APPOINTMENT OF PROXY:

A SHAREHOLDER ELIGIBLE TO ATTEND AND

VOTE, IS ENTITLED TO APPOINT A PROXY TO
ATTEND AND VOTE INSTEAD OF HIMSELF /
HERSELF AND SUCH PROXY NEED NOT BE A
SHAREHOLDER OF THE BANK.

,

8 2011 5.00

The instrument appointing proxy should,

however be deposited at the Central Office of
the Bank not less than four days before the date
fixed for the meeting i.e. on or before 5.00 p.m.
on Friday, 8th July 2011.

2. :

2. APPOINTMENT OF AN AUTHORISED
REPRESENTATIVE:

,
,
,

8 2011 5.00

No person shall be entitled to attend or vote at

any meeting of the shareholders of Indian
Overseas Bank as the duly authorized
representative of a company unless a copy of
the resolution appointing him as a duly
authorized representative, certified to be a true
copy by the chairman of the meeting at which it
was passed, has been deposited at the Central
Office of the Bank not less than four days before
the date fixed for the meeting i.e., on or before
5.00 p.m. on Friday, 8th July 2011.

3.

3. No officer or employee of the Bank shall be

appointed as Authorised Representative or
proxy of a shareholder.

4.

4. ATTENDANCE SLIP-CUM-ENTRY PASS:

/ /

/

For the convenience of the shareholders,

attendance slip-cum-entry pass is annexed to
this notice. Shareholders/proxy
holders/representatives are requested to affix
their signature at the space provided therein
and surrender the same at the venue. Proxy
holders / representatives should state on the
attendance slip-cum-entry pass as proxy or
representative as the case may be and should
have proof of their identity by getting their
signature attested by the shareholder.

/ ,
,

18

5.

5. C L O S U R E O F
SHAREHOLDERS:

05.07.2011 , 06.07.2011
() 12.07.2011 () (
)

REGISTER

OF

The Register of Shareholders and Share

Transfer Books of the Bank will remain closed
from 06.07.2011(Wednesday) to 12.07.2011
(Tuesday) (both days inclusive) with cut off date
as 05.07.2011 for determining eligibility of
shareholders for the purpose of dividend.
Dividend shall be mailed within one month from
the date of Annual General Meeting.

6. -
()

6. BANK MANDATE FOR DIVIDEND OR

ELECTRONIC CLEARING SERVICE (ECS):

)


,
, ,


/
/

03.07.2011

,
05.07.2011
/

a) In order to get protection from fraudulent

encashment of warrants, shareholders are
requested to furnish their bank account number,
the name of the bank and the branch where they
would like to deposit the dividend warrants for
encashment. These particulars along with the
name of the shareholder will be printed on the
cheque portion of the dividend warrants, so that
these warrants cannot be encashed by anyone
else. The above mentioned details should be
furnished by the first / sole shareholder directly
to the share transfer agent / DPs quoting the
Folio No. or DP ID No. & Client ID No. and the
number of shares held on or before 03.07.2011.
If shareholders choose not to submit any
modification, the warrants will be printed based
on bank mandate earlier received by the
Registrar or data downloaded from NSDL /
CDSL as on 05.07.2011 for demat shareholders.
This is applicable for all shareholders who have
not submitted ECS mandate(s).
b) The Bank is also offering the facility of ECS for
shareholders residing in specified cities. This
facility could be used by the shareholder instead
of the Bank Mandate system for receiving the
credit of dividend. The ECS Option Form is
annexed to this report. Shareholders are
required to give details of IFS Code No. of their
bank branch in their ECS Mandate to facilitate
the transfer of dividend to their designated
account.

)





.

19

7. ,

7. UNCLAIMED DIVIDEND, IF ANY

2000-2001
/ ,

The shareholders who have not encashed their

Dividend Warrants / received dividend from
previous year's viz. 2000-2001 onwards are
requested to contact the Registrar and Share
Transfer Agent of the Bank for issue of duplicate.

( ) ,
1970 10

7

1956 205
( )

Pursuant to the amendment of The Banking

Companies (Acquisition and Transfer of
Undertakings) Act, 1970, Section 10B provides
that the amount of dividend remaining unpaid or
unclaimed for a period of seven years from the
date of transfer to the Unpaid Dividend Account
is required to be transferred to the Investor
Education and Protection Fund (IEPF)
established by the Central Govt. under Section
205C of The Companies Act, 1956 and
thereafter no claim for payment shall lie in
respect thereof either to the Bank or to the
IEPF.

8.

8. CHANGE OF ADDRESS AND DIVIDEND

MANDATE:

, ,
,
, ,
,
03.07.2011
, --- :

In case of shareholders holding shares in

physical form, they are requested to intimate to
the Registrar and Share Transfer Agent of the
Bank any change in their address, dividend
mandate and the particulars of the bank, branch
and bank account number which the
shareholder desires to incorporate on the
dividend warrant, on or before 03.07.2011 at the
following address:

.
(- )
, ,
.1 - , - 600 002

Cameo Corporate Services Ltd.

(IOB unit)
1st floor, Subramanian Building,
No. 1, Club House Road, Chennai 600 002

, ,
,
,

05.07.2011

In case of shareholders holding shares in

Electronic form i.e. through Demat account, they
are requested to intimate to their depository
participant any change in their address, dividend
mandate and the particulars of the bank, branch
and bank account number which the shareholder
desires to incorporate on the dividend warrant etc.,
as the aforesaid information provided by the
Depository as on 05.07.2011 would only be
considered for the purpose of payment and
distribution of dividend.

20

9.

9. CONSOLIDATION OF FOLIOS :
It has been found that many shareholders
maintain more than one folio (i.e.) multiple folios.
In order to provide efficient service, we request
the shareholders to consolidate the folios by
forwarding their share certificates to Registrar
and Share Transfer Agents for necessary
corrections in their records.

-

10.

10.BRIEF PROFILE OF DIRECTORS:

As required under the revised Clause 49 IV G of
the Listing Agreement executed with the Stock
Exchanges, brief profiles of Directors are given
in the Report on Corporate Governance.

49 IV

11. REQUEST TO SHAREHOLDERS:

11.
()

(a) Shareholders are requested to bring their

copies of the Annual Report enclosed
herewith.

() -
/

(b)Shareholders may kindly note that no gifts /

coupons will be distributed at the venue of
the meeting.

BY ORDER OF BOARD OF DIRECTORS

02.05.2011

(. )

Chennai
02.05.2011

21

(M NARENDRA)
Chairman and Managing Director

AT A GLANCE
.

Rs.in.Crore

2011

2010

March 2011

March 2010

1,45,229

1,10,795

1,40,381

1,05,434

1,13,791

80,782

1,03,087

73,026

32,648

27,237

16,056

12,597

2,861

1,845

1,073

707

-
Global Deposits

-
Domestic Deposits

Global Advances

Domestic Gross Advances

Priority Sector Advances

Agricultural Credit

Gross Profit

Net Profit

22

 2010-11

DIRECTORS' REPORT 2010-11

31 2011 -

The Board of Directors have great pleasure in

presenting the Annual Report together with audited
Balance Sheet and Profit and Loss Account of the
Bank for the year ended March 31, 2011.

2010-11



.2,50,000

During 2010-11, the Bank's performance is more

progressive in the backdrop of growth momentum
in the Indian economy. The Bank has registered
higher growth rate than the banking system both
in deposits and advances. The Bank has witnessed
significant growth in business and crossed the
business level of ` 2,50,000 crore mark.

Global Business Performance

31 2010 .1,10,795
, 31 2011 31.08% .1,45,229
.80,782
40.86% .1,13,791 :
35.20 %
.2,59,020

The Bank's global deposits increased from

` 1,10,795 crore as on 31st March 2010 to
` 1,45,229 crore as on 31st March 2011 with a
growth of 31.08 % while global gross advances
went up from ` 80,782 crore to ` 1,13,791 crore at
40.86 %. Hence, the total business improved to
` 2,59,020 crore with an excellent growth of
35.20 % over last year.

Overseas Branches
During the year, the Bank has been actively
involved in the process of setting up of the office at
Malaysia, in respect of the joint venture signed with
Bank of Baroda and Andhra bank to open a
Banking subsidiary in Malaysia. The subsidiary has
obtained license from Bank Negara, the Central
bank of Malaysia. The Bank is also looking ahead
to expand its overseas operations by availing funds
out of a Medium Term Note issue.

,

,



2011 13 ,

As at the end of March 2011, the bank had 13

establishments abroad, with 6 full-fledged
branches, 4 Representative offices, 2 Remittance
Centres and 1 Extension counter.

6 , 4 , 2
1

There are two branches in Hongkong and one each

at Singapore, South Korea, Sri Lanka and
Bangkok. Representative offices are located at
Guangzhou, China, at Kualalumpur, Malaysia, at
Ho Chi Minh City, Vietnam and at Al Karama, Dubai.
Remittance Centres operate at Boonlay and
Serangoon, Singapore and the extension Counter
is located at Sri Lanka.

2 , ,
-
, ,
,

23

Medium Term Notes Issue (MTN)

():
2011 1




,
,
,
-
. ,
.

5.5 -
500 12 2011
+ 290

1.9
5%
99.478 .

Financial Performance

2009-10 .1845
2010-11 .2861 ,
55.08%
,

The operating profit of the Bank went up from

` 1,845 crore in 2009-10 to ` 2,861 crore in 2010-11
with a growth of 55.08 %. This attainment was all
the more significant when viewed in the light of
volatile market conditions leading to subdued
treasury gains and increased cost of funds. Growth
in operating profit can be attributed to expansion in
volume of business especially in the second half of
the financial year and improvement in efficiency
levels.

Provisions

.1788

The Bank has set apart a sum of ` 1, 788 crore

towards provisions and contingencies.

Net Profit \Dividend

2009-10 .707
2010-11 .1073 ,
51.71% 2010-11 50%

The Bank's net profit increased to ` 1073 crore in

2010-11 from ` 707 crore in 2009-10 with a growth
rate of 51.71%. The Bank has proposed to pay a
dividend of 50 % for the year 2010-11.

24

Income and Expenditure Analysis

2010-11
17.01% .13,327
.10466
9.66% ,
-
:
/

During the financial year 2010-11, the growth in

total global income was favorable at 17.01 % over
last year amounting to ` 13,327 crore. At the other
end, the total expenses was controlled at
` 10,466 crore with a reasonable increase of 9.66 %
over last year despite providing provisions towards
pension and gratuity as per extant RBI guidelines
and fresh recruitment. This was mainly possible
due to various cost control measures taken at the
micro/macro levels apart from handling of Asset
Liability Management techniques effectively.

: 2009-10 6.36%
2010-11 5.95%
10.43%
/
9.25%

6.46 %
4.30% .2572

As a result, domestic cost of deposits came down

to 5.95 % in 2010-11 compared to 6.36% in 2009-10
and the domestic yield on advances stood at
10.43%. The cost of domestic borrowings/others
increased to 9.25 % in the current year due to
higher borrowings to meet the liquidity
adjustments. The increased CRR and repo rates
had an impact on the domestic cost of funds, which
increased to 6.46 % in Q4 of the reviewing period.
The global operatingexpenses showed a
reasonable increase of 4.30 % during the year
amounting to ` 2,572 crore.

7.02%
7.15% ( )
( ) .98
.127

2009-10 .292 2010-11
.109 .4208
32.83%
10.39%

2.74% 3.11%

The domestic yield on investments increased to

7.15 % (net of amortization) during the year
compared to 7.02 % in the last year. Profit on
exchange ( domestic) was also higher at
` 127 crore compared to ` 98 crore last year. Due
to volatile market conditions, as said earlier, the
profit on sale of investments reduced to
` 109 crore in 2010-11, compared to ` 292 crore in
2009-10. The global net interest income increased
to ` 4208 crore with a significant growth of 32.83%
compared to 10.39% in last year. Consequently,
there was a perceptible improvement in global Net
Interest Margin , higher at 3.11 % during the year
compared to 2.74% of last year.

2010-11 55.08%
.2861

Thus, the operating profit showed a significant

growth of 55.08 % over last year aggregating to
` 2861 crore in 2010-11 with improved Net interest
income. Excluding the treasury gains earned under
profit on sale of investments as also the impact of
loss on revaluation of investments, the core
operating profit increased from ` 1606 crore in
2009-10 to ` 2805 crore in 2010-11 at a growth of
74.66 %.

200910 .1606
2010-11 . 2805 74.66%

25

Capital Adequacy Ratio

2010 14.78%
31.03.2011 14.55% ( -II
) 1054
7,39,49,343
,
.142.53 (.132.53 )
.10/-

The Bank's Capital Adequacy Ratio as on

31.3. 2011 stood at 14.55% compared to 14.78% as
at the end of March 2010 (as per Basel II norms).
During the current financial year, the Bank had
issued 7, 39,49,343 equity shares of face value of
Rs.10 each at ` 142.53 per share (including
premium of ` 132.53 per share) to the Government
of India on preferential basis aggregating to
` 1,054 crore.

Branch Network

173 9
2,184
, 583 ,
26.7% , 558 - (25.6%), 542 (24.8%)
501 (22.9%)
5

The Bank towards expanding its reach and pan

India presence opened 173 branches across the
country , upgraded 9 Extension Counters. As at the
end of the reporting period, the Bank had 2,184
domestic branches of which 583 were Rural
branches accounting for 26.7% of total branches,
558 Semi Urban (25.6%), 542 Urban (24.8%) and
501 Metropolitan branches (22.9%). The number of
Extension Counters in India stood at 5.

Changes in organization set up at Central Office

, ,

, ,
/
-

Towards driving the business fruther and to have

focused approach in business expansion, the bank
has drawn the verticals viz. Large Corporate, Mid
Corporate, Micro and Small and Medium
Enterprises at Central Office. Besides the above ,
the Bank has integrated all its Treasury functions at
Central Office. An exclusive transaction banking
department was formed at Central Office for
monitoring the performance in respect of Trade
finance, Cash Management Services, Supply
Chain Management/Channel Finance and
Government business.

-
10 2011 75
10
2011


..
,

75 75
.. ,

Platinum Jubilee year Celebrations - An image

building exercise
The Bank has entered its 75th year of operations as
on 10th February 2011 and the Bank inaugurated
the platinum jubilee celebrations on 10th February
2011with a grand function organised in New Delhi
followed by a function in Chennai.
Hon'ble Union Ministers of State for
finance Shri Namo Narain Meena and
Shri S.S. Palanimanickam graced the function and
inaugurated the function. Union Secretary of
Finance Shri Shashi Kant Sharma, Chairmen of

26

 , " "


" ....
1937 "

..

Public Sector Banks and the past Chairmen of the

Bank participated in the function. On this occasion,
75 branches and 75 Automatic Teller Machines
(ATMs) were opened. The Bank has launched new
products viz. SB Student IOB MSE Plus,
Bhumilakshmi. The Bank also extended its reach of
its IOB Sampoorna, an innovative rural
development project and distributed scholarships
to Girl Students. As a part of our Bank's Platinum
Jubilee Celebrations in New Delhi, a booklet titled
Success Stories Making India grow since 1937
was released by the Hon'ble Union Ministers of
State for finance Shri Namo Narain Meena and
Shri S.S. Palanimanickam. An exhibition of Self
Help Groups products was also organized.

Platinum Jubilee Celebrations is being celebrated

with customer and public participation in various
places of the country till the end of the Platinum
Jubilee year. The Bank has been translating these
efforts for expanding the customer base.

.,
2011
10 () -

The Bank's image building exercise is impacting its

presence well in the market. Shri M.Narendra,
Chairman and Managing Director of the Bank has
figured in the list of Top 10 Indian CEOs India's
and World's most talkedabout CEOs in
March 2011 published in the press recently
( Business Today magazine ).

With the strong and committed staff at all levels and

with the positive industrial relations climate, the
Bank has been converting all the available
business opportunities into results and do not
foresee any threats in its business growth.

Financial Inclusion

( 2000 )




-

With a view to extending banking services and

products in un-banked villages (having population
of over 2000) the Bank introduced Smart Card
Banking through Business Correspondent as per
the guidelines of Reserve Bank of India. Rural
people can transact banking business at the village
itself with the use of biometric smart cards and
Hand Held Devices. Business Correspondents
deliver the services at the front end. The devices
are voice enabled in vernacular language and user
friendly for illiterates.

781
, 30

The Bank so far covered 781 allotted villages under

Smart Card Banking across the country. In addition

27

 :
16 1 33
5,38,219 -
36,625

to the above, other 30 villages were provided with

the service of Business Correspondent.In all, smart
Card Banking is being implemented in 16 States
and 1 Union Territory spreading over 33 Regions.
During the year under review the Bank has opened
5,38,219 No-frills SB accounts and issued 36,625
biometric smart cards.

2010

Regional Director, Reserve Bank of India, Chennai

appreciated our Bank's initiative under Financial
Inclusion plan in a press release that Indian
Overseas Bank was the only Bank to have begun
its rural operation in the State using Information
and Communication Technology model in April
2010. The Executive Director, Reserve Bank of
India also appreciated Bank's performance by a
special letter congratulating the good job done by
the Bank.

(23.01.2011) ""
-
2.20

The Bank bagged SKOCH AWARD for Financial

Inclusion. Award was conferred to the Bank for
redefining the concept of last mile banking when it
took the banking services to the Kaanni Tribal
hamlets in Papanasam, Tamil Nadu. On the
Financial Inclusion Day ( on 23.01.2011) , Smile
Walk-in-bank campaign was launched and over
2.20 lacs No- frill accounts were opened.

Regional Rural Banks

()


14
8
203
2
:

The Regional Rural Banks (RRBs) sponsored by

the Bank, viz., Pandyan Grama Bank and
Neelachal Gramya Bank performed well during the
year. Pandyan Grama Bank has earned Net Profit
After Tax consecutively for the past fourteen years
and recorded NIL Net NPA continuously for the
past eight years. Pandyan Grama Bank has
achieved 100% Core Banking Solution of all 203
branches. Neelachal Gramya Bank has completely
wiped out the accumulated loss two years ahead of
schedule.

Customer Service

()

()


2010

The Bank is a member of Banking Codes and

Standards Board of India (BCSBI) and
has
adopted the Code of Commitment to Bank's
Customers drafted by Banking Codes and
Standards Board of India (BCSBI). During this year,
the Cheque Collection Policy document relating to
customer service, was amended by incorporating
the guidelines issued by BCSBI. Customer
Fortnight was observed in all branches during
November 2010.
28

 2010-11
:

The details of customer complaints received and

redressed during the year 2010-11 are given below.
Details

1.

No. of complaints pending at the

beginning of the year

58

62

2.

No. of complaints received during

the year

1009

1447

3.

No. of complaints redressed during

the year

1022

1398

4.

No. of complaints pending at the end

of the year
Settlement Rate %

At Central At Regional
Office
Offices

Sl.
No.

45

111

95.78

92.64

Number of awards passed by the Banking

Ombudsman and implemented by the Bank are as
follows.

No. of complaints pending at the beginning of the year

No. of awards passed by Banking Ombudsman during the year 0

No. of awards implemented during the year

No. of unimplemented awards at the end of the year

(, -
) -
, ,
,
,

The Complaints are being received directly by

Central Office and Regional Office (through letters,
e-mails and telephone) and also through other
channels like Reserve Bank of India, Banking
Ombudsman, Government of India etc. Customer
Service Centre, for which the Bank is the Convenor
in Chennai City, had resolved all the complaints
during this year.

(1800-425-4445)
48

Customers are provided with the facility of Toll Free

Tele services (No.1800-425-4445) by engaging an
outside agency for receiving complaints. These
complaints are being resolved within 48 hours.

Retail Banking and Marketing

The business under retail banking segment

showed a remarkable improvement during this
year. Under fee based income, Life and General
Insurance products showed tremendous growth.
The income from fee-based products registered a
growth of 27.26 % in 2010-11.

2010-11
27.26%

Distribution of life policies as a Corporate Agent of

Life Insurance Corporation of India showed
excellent growth both in premium mobilization as
well as commission income. Bank had achieved
the status of No.1 Corporate Agent of LIC of India.

29

 39.40% 200910 57.58%

2009-10
, ,
( )

Income from life insurance products grew by

39.40% over 2009-10, income from marketing of
non life insurance products by 57.58% over
2009-10.Insurance linked products like IOB
Jeevan, IOB Healthcare Plus, Vidya Jyothi with
Suraksha (insurance cover for Educational Loans)
continued to register impressive growth .
Distribution of non life insurance products as a
Corporate Agent of Universal Sompo General
Insurance had resulted in good business and
income realizations.

Retail Sale of Gold coins continued to show

impressive growth. The mobilization under Mutual
Fund Distribution also received special focus and
contributed to the fee based income of the Bank.

20.35 %

Retail Loans improved by 20.35% over the previous

year with Housing Loans and Educational Loans as
major contributors.

2010-11
:



" "

" " "
"

The following campaigns were conducted during

the year 2010-11 for improving the retail business:
Akshaya Thrithiai Campaign for Sale of Gold
Coins.
Debit & Credit Card Mobilisation Campaign.
SB Month for Savings Account Expansion.
Catch them Young for canvassing Student
Accounts.
Gold Coin Campaign for increasing retail gold
coins sale.
Platinum Jubilee Home Loan Exhibition to expand
Home Loans.
Tax Saving Month Campaign for Tax Saving
Products.
Customer Reach programmes like Walk in Bank
and IOB Smile Campaigns.

-
, ,
, ,

New product developments such as - Special and

focused products like Corporate Salary, SB
Student, SB Platinum, CD Supreme, Gift Card and
IOB Career Dream were developed and marketed
to capture and expand business from the target
segments.

All these coordinated campaigns and introduction

of new products not only improved the retail
business segment but also strengthened its
customer base.

30

Official Language Policy

2010-11
192 ,
,

1912

25-09-2010

The Bank took all efforts to implement the Official

Language Policy of Government of India during the
year 2010-11. During the year, 192 Staff members
who do not possess working knowledge of Hindi
were trained in IOB Praveen and Banking Pragya
Courses. 1,912 Staff members possessing working
knowledge of Hindi were trained in General Hindi
Workshops held during the year. Rajbhasha
Sangoshti was held on 25.09. 2010 for heads of
Central Office departments to strengthen the
Official Language Implementation.

1412
" "

Minutes of all meetings of all board level

committees were translated in Hindi. As per the
directives of Government of India, the Bank has
enabled Hindi Unicode font in all Regional Offices
and has provided the facility of downloading the
same in IOB ONLINE. The Bank has also provided
the Banking terminology in IOB ONLINE for the
benefit of staff members. The Bank has given
necessary training to 1412 staff members for the
use of Hindi in computers. The Bank has published
all the four issues of quarterly Hindi Magazine
"VANI" in print as well as in digital form. The Bank's
website has been made available in Hindi also.
The Bank has been awarded Third Prize for Hindi
house magazine "VANI" for the year 2009-10 by
Reserve Bank of India in the Inter-Bank Hindi
Magazine Competition for Hindi house magazines
of banks and financial institutions. The Bank has
been awarded Consolatiion Prize under Indira
Gandhi Rajbhasha Shield for the year 2009-10 for
commendable work in the area of Official
Language Implementation. The award was
received by our Bank's General Manager
Shri Ashok Shankar from His Excellency Vice
President of India Shri Mohd. Hamid Ansari on
14th September, 2010.

-
200910 - " "
2009-10

14 2010

Regional Offices were inspected on Official

Language implementation by Official Language
Department, Central Office and Rajbhasha Shields
were awarded to Regional Offices and branches
doing good work in official language
implementation.

31

Annual Official Language Review Meeting and

Unicode training for Official Language Officers was
held from18th to 20th June 2010 to assess the
progress made in the area of Official Language
implementation in Regional Offices. The drafting
and evidence Sub-Committee of Parliamentary
Committee on Official Language had discussions
with the Chairman and heads of Banks of Town
Official Language Committees at Coimbatore and
Jhansi. The Bank was also included for discussion
and the committee expressed satisfaction over the
performance of the Bank at these centers.

18 20 2010

-




, , 2009-10

As Convenor of Chennai Town Official Language

Implementation Committee, the Bank has received
the Second Prize for its efforts in implementation of
Official Language Policy during the year 2009-10
from Official Language Department, Ministry of
Home Affairs, Government of India. The Prize was
given by Shri Ajay Makan, Hon' ble Minister of State
for Home Affairs, New Delhi on
22nd December 2010. On behalf of the committee,
the Bank conducted two General Hindi
Workshops, 12 Inter-Bank Hindi competitions,
Joint Hindi Month Celebration function and Hindi
Unicode training programme for the staff members
of member banks / Financial Institutions. A special
Seminar in Hindi on Increasing Banking business /
Human Resource Development and Importance of
Marketing in banks / Prevention of frauds for
Executives were held on 21.02.2011 and
12.03.2011 respectively. In addition to this, two half
yearly meetings were also conducted. Two issues
of half-yearly magazine of "Chennai Bharathi" were
brought out.

22 2010

, 12 -
, /

/

: 21 02 2011
12 03 2011

`` ''

Corporate Governance

Corporate Governance extends beyond Corporate

Law. Its fundamental principle is not only fulfilling
the requirement of law but also fulfilling its
responsibility towards the society. The social
responsibility evokes from the good governance
enhances the social relevancy of a business; It is
needed to create a corporate culture, openness
and social responsive corporate entity.

32

 ,



( )

The Bank has laid down a well-defined, Code of

Conduct, which addresses issues of integrity,
conflict of interest and confidentiality and stress the
need of ethical conduct, which is the basis for good
governance. This Code of Conduct is applicable to
all the members of the Board and the Senior
Management (i.e. General Manager) of the Bank.

,

,

,

, -

The Bank has complied with the guidelines of

Reserve Bank of India, Securities and Exchange
Board of India and other regulatory authorities for
Corporate Governance, which has been examined
by the Statutory Central Auditor. The Bank gives
high priority to good Governance, which reflects in
transparent ownership structure, management and
accounting practices of the Bank. The Board
recognizes its role in promoting good governance
and in creating a framework of best practices,
processes and ethics to observe and foster high
ethical standards.

The Bank facilitates good Corporate Governance

by its commitment for ethical practices in the
conduct of its business, to ensure transparency
and efficiency. The Bank is also committed to follow
high disclosure standards and transparency in
financial reporting so as to keep investors and
stakeholders adequately informed. It is essential
for proper accountability between organization and
its stakeholders.

49

Pursuant to Clause 49 of the Listing Agreement,

Management Discussion & Analysis Report,
Report on Corporate Governance as well as
certificate by the auditors regarding Compliance of
the conditions of Corporate Governance form part
of this Annual report.

, -

Board of Directors

.., 31.10. 2010

Shri S.A.Bhat, Chairman and Managing Director,

demitted office on 31.10.2010 on his
superannuation. Shri M.Narendra assumed
charge as Chairman and Managing Director on
01.11.2010. Shri Y.L. Madan, Executive Director,
demitted office on 31.08.2010 on his
superannuation. Shri A.K.Bansal, assumed charge
as Executive Director on 01.09.2010.

- . 01.11.2010
..,
31.08.2010
.. 01.09.2010

33

Smt. Chitra Chandramouliswaran, Reserve Bank of

India nominee director, demitted office on
29.07.2010. The Government of India (GOI)
nominated Shri S.V.Raghavan, as Reserve Bank of
India nominee director with effect from 30.07.2010.

29.07.2010
.. 30.07.2010

Shri N.Sridaran, demitted office as Workmen

Employee Director on 19.04.2010, on completion
of his tenure of three years. The Government of
India (GOI) nominated Shri Sridhar Lal Lakhotia, as
Workmen Employee Director with effect from
9.8.2010.

. , 3

09.08.2010

The Board of Directors place on record the valuable

contributions made by the erstwhile Directors and
extend a warm welcome to the new Directors.

Acknowledgements

The Board of Director place on record the valuable

co-operation received from the Government of
India, Reserve Bank of India, Securities and
Exchange Board of India (SEBI) and Stock
Exchanges, various State Governments and
Financial Institutions. The Board expresses its
gratitude to the Hong Kong Monetary Authority,
Monetary Authority of Singapore, Financial
Supervisory Services, Korea, Central Bank of Sri
Lanka, China Banking Regulatory Commission,
Bank Negara, Malaysia, Bank of Thailand, State
Bank of Vietnam and Central Bank of UAE for their
support.

, ,
( ) ,

,
, , , ,
, , ,


, ,

The Board of Directors records the patronage and

goodwill of the valued customers, shareholders,
other stakeholders and correspondents of the
Bank in India and abroad. The Directors are happy
that the industrial relations are very cordial and
happy on account of positive attitude on the part of
Employees' Union and Officers' Association.

02 2011

For and on behalf of the Board of Directors

Chennai
May 2 , 2011

34

M.NARENDRA
Chairman and Managing Director

MANAGEMENT DISCUSSION AND ANALYSIS

Economic Environment

2010-11
, 8.6%
2009-10


2010-11 8%
:

Global economy was on the recovery path. The

Indian economy, one of the emerging economies
recorded a growth rate of 8.6 percent in 2010-11
according to CMIE estimate. Agriculture
rebounded from a down turn in 2009-10. Index of
industrial production continues to be volatile.
Services sector witnessed robust growth. Inflation
is the primary concern of the economy. Inflation is
estimated to be higher than 8% in 2010-11mainly
due to inflation in primary articles particularly food
articles.

Banking Environment

The year traversed from easy money policy to tight

money policy. The banking system witnessed
upward bias in interest rate scenario from the
beginning of the financial year.

200
6.75% 250 5.75 %

In the past one year, Reserve Bank of India has

hiked the policy rates eight times towards
containing the inflation. As a result, Repo rates
were increased by 200 basis points to 6.75 % and
Reverse repo by 250 basis points to 5.75 %.
There has been liquidity constraints in the Banking
system as a result of slower deposit accretion
which could not be matched with the accelerated
credit growth in the backdrop of improved growth
in the economy. Towards easing the liquidity
problem of the banking industry Reserve Bank of
India, in its third quarter monetary review policy
reduced Statutory Liquidity Ratio by 100 basis
points to 24% effective from December 18, 2010.
Despite this measure, the gap in deposit growth
vis--vis credit growth persisted.

100 24% 18
2010

-

THE BANK'S OPERATIONS

2010 . 1,05,434
2011 140381 33.15%
2011
30.71% 2010 33.64%
2011 32.72%
2010 29.97%

The Bank's aggregate domestic deposits went

up from ` 1,05,434 crore in March 2010 to
` 1,40,381 crore in March 2011 with a growth of
33.15 %. Though the domestic terminal CASA ratio
came down to 30.71 % in March 2011 compared to
33.64% in March 2010, the real growth is exhibited
in its average CASA ratio at 32.72 % in March 2011
compared to 29.97% in March 2010.

Deposits

35

Credit

41.16%
2010 .
73026 2011 . 1,03,087

The Bank registered all time high growth at 41.16 %

in its domestic advances portfolio. The gross
advances in India had gone up to ` 1,03,087 crore
as at the end of March 2011 from ` 73,026 crore as
at the end of March 2010.

Priority Sector Credit

2010 2011
2010 ()
2011
44.47%
.32,648 .15
40%
4.47%

As per the guidelines of Reserve Bank of India,

attainment under Priority Sector for the year 20102011 is computed taking the Adjusted Net Bank
Credit (ANBC) of March 2010 as the base. For the
year ended March 2011, the Priority Sector
advance to Adjusted Net Bank Credit was at
44.47%, the quantum being ` 32,648.15 crore.
Thus the Bank exceeded the stipulated norm of
40% under Priority Sector Credit by 4.47%.

MSME

2011 14,622

11,839

25.40 % 20 %

The Bank extended credit of ` 14,622 crore to

MSME sector as at the end of March 2011. This
includes advances to Micro and Small
Enterprises to the tune of ` 11,839 crore, which
forms part of priority sector credit. The Bank
increased advances to MSME sector by 25.40%
surpassing the mandatory requirement of 20%.

. 100

The Bank launched new products exclusively

made for MSME sector during the year. IOB CA was
introduced to cater to the requirements of
Chartered Accountants. IOB MSE PLUS, an
exclusive credit product for Micro and Small
Enterprises was also introduced. This product
enables borrowers to avail composite loans up to
`100 Lacs, without collateral and third party
guarantee, under CGTMSE cover.

14000
,

The Bank continued to focus on tie-up

arrangements for ensuring hassle free flow of credit
to MSE sector, on easy terms and conditions.
During the year, the Bank signed Memorandum of
understanding (MOU) with Ashok Leyland Limited
for financing Trucks and Commercial Transport
Vehicles and with Sustaintech India Private Limited
for financing energy efficient stoves in rural and
semi urban areas. MOU was also entered into with
International Tractors Limited for financing their
authorized dealers. Over 14,000 loans were

36

sanctioned during the year under the new MOUs as

well as other existing tie-up arrangements. As an
initiative for upgrading, updating and developing
the skills of budding MSME Entrepreneurs, the
Bank sponsored MSME Entrepreneurship
workshops conducted by Dun & Bradstreet at
Trichy and Kanpur.

.
100
2010-11 22825
. 817.47

Thrust was given to sanction collateral free loans

up to ` 100 Lacs under CGTMSE guarantee
scheme. 22,825 fresh loans were brought under
CGTMSE cover during 2010-11, aggregating to
` 817.47 Crore.

2010-11

The Bank continued implementation of relief

package for MSME sector during 2010-11 also.
Various concessions including reduced rates of
interest were continued. SME Facilitation Centers
set up at all Regional Offices continued to guide
and assist the MSME entrepreneurs.

( )

750

The Bank was awarded Chief Minister's Trophy

(First Prize) for best performance in lending to
Micro Enterprises in Tamil Nadu. The Bank actively
implemented Prime Minister's Employment
Generation Program across the country and
sanctioned over 750 projects, creating significant
number of employment.

Agriculture

. 12597
( 2010 ) 2011 . 16056 .
3459
18 %
21.87%

During the year, the agricultural credit portfolio of

the Bank registered incremental growth of
` 3, 459 crore from ` 12,597 crore in March 2010 to
` 16, 056 crore in March 2011. The Bank's ratio of
agricultural advances to Adjusted Net Bank Credit
was higher at 21.87% against the required norm of
18%.

. 16500
( ) . 18547

39%
30 %

The Bank disbursed ` 18, 547 crore under Special

Agricultural Credit Plan (SACP) as against the
target of ` 16,500 crore during the year. The
increase in disbursement of credit to agricultural
sector over the last year's disbursement was 39%,
as against the incremental credit flow of 30%
mandated by the Government of India under
Special Farm Credit Package.

2010
77.56%

Recovery to demand under agricultural advances

continued to be satisfactory at 77.56 % for the year
ended June 2010.

37

New Agriculture loan products

/
/

The Bank has introduced the following customized

Agriculture loan products to suit the specific needs
of the farmers/individuals/Institutions:

:

: ,

IOB Green Credit for meeting the short term

production credit or investment credit or both.

IOB Urban Horticulture to individuals and

institutions for raising kitchen garden, flower
garden, small orchards or roof gardens.

IOB Agri. Transport for purchase of two

wheelers, three wheelers and four wheelers to
be used for agriculture purpose.

Bhumilakshmi to Small and Marginal farmers,

share croppers and tenant farmers for
purchase of lands for agriculture purposes or
allied activities.

:

:


( )

Kisan Credit Card Scheme (KCC)

2,23,964
2011
22,18,386

The Bank issued 2,23,964 KCCs during the year.

The total number of cards cumulatively issued by
the Bank as at the end of March 2011 stood at
22,18,386.

Microfinance

. 620.21 39778
4,00,397 ,
2011
3,489.81

During the year, the Bank credit-linked 39778 Self

Help Groups (SHGs) with a credit outlay of
` 620.21 crore. The cumulative number of SHGs
credit linked by the Bank is 4,00,397 SHGs with a
total disbursement of ` 3,489.81 crore as of
March 2011.

10 2011
10.03.2011

2010

SHG Credit linkage was organized on a large scale

on 10th February 2011 followed by a month long
observance of SHG Credit linkage programme
upto 10.03.2011, as part of Platinum Jubilee
Celebrations of the Bank. Earlier, during
August 2010, the month was observed as SHG
Credit linkage month.

( )

Janashree Bima Yojana (JBY)

. 200/, 50% 50%

JBY is a Social Security Scheme implemented

through Life Insurance Corporation of India to
provide life insurance cover to women Self Help
Group members' credit linked to Banks. The total
premium is ` 200, 50% payable by the member and
balance 50% to be borne out of Social Security

38

 . 40/-
. 30,000
. 75000 ,
2010-11 26642
1817

Fund. The Scheme covers the spouse at an extra

premium of `40 payable by the member. The
benefits include ` 30,000 on natural death and
` 75,000 on account of accidents, apart from
scholarship to the wards. During 2010-11, the Bank
covered 26,642 women members belonging to
1,817 SHGs under the Scheme.

31 2011 . 11373.36
15.49%
5%

Credit Flow to Women

As on 31 March 2011, Bank's credit to women
amounted ` 11,373.36 crore constituting 15.49%
of the Bank's Adjusted Net Bank Credit, as against
the norm of 5%.

Lead Bank Scheme

12 1

The Bank has Lead Bank responsibility in twelve

districts in Tamil Nadu and one district in Kerala.
The Bank is also the Convenor of State Level
Banker's Committee of Tamil Nadu. During the
year under review, as Convenor of State Level
Bankers Committee (SLBC), Tamil Nadu, the Bank
conducted three SLBC Meetings and one State
Level Review Meeting. In addition, the Bank
convened Special SLBC Meetings on IBA Package
for MSME, Auto & Housing Sectors, Interest
Subsidy Scheme for Housing Urban Poor (ISHUP)
and on Credit Linking of Panchayat Level
Federations. Special SLBC Meetings were also
convened on grant of subsidy to Common Effluent
Treatment Plants set up in Tiruppur and
Government of Tamil Nadu's Unemployment Youth
Employment Generation Programme. Senior level
officials from member Banks and Government of
Tamil Nadu participated in the above meetings.

Corporate Social Responsibility

The Bank has been extending its patronage by way

of donations and sponsorship for vrious
humanitarian activities in the field of education,
health and other social causes as a part of its
commitment towards corporate social
resposibility.

( )

, ,
(

39

IOB-Sampoorna Project A Total Village

Development Project

75

During the year under review, the Bank has

launched IOB Sampoorna which is an innovative
rural development project aiming at Total Village
Development of 75 villages all over India. IOBSampoorna is a unique Project encompassing
several livelihood initiatives in the villages to ensure
all-inclusive growth of rural population.

,

, ,
, , ,

It comprises of credit and non-credit components

such as Financial Inclusion, I.T. enabled banking
operations with Bio-metric Smart Cards under
Business Correspondent model, Tree Planting and
Social Forestry, Cleaning Water Bodies, Health
Care, Skill Training for youth in computer, Rural
Business Process Outsourcing, Promotion of nonconventional energy and Rural Tourism.
Education scholarship is being extended to
meritorious Below Poverty Line (BPL) girl students
hailing from Sampoorna villages. Rural Library was
set up in villages adopted by the bank.

Sakthi Indian Overseas Bank Chidambaram

Chettyar Memorial Trust

-
,




47 ( )
, 2865

The Trust, set up jointly by the Management of the

Bank, Indian Overseas Bank Officers' Association
and All India Overseas Bank Employees' Union to
perpetuate the memory of Bank's Founder Shri
M.Ct.M. Chidambaram Chettyar, continued to
provide entrepreneurial development training to
women, thereby empowering them socially and
financially to meet the challenges. The Trust has so
far conducted several skill based training
programmes and 47 Entrepreneurship
Development Programmes (EDP) exclusively for
women at various centres benefiting 2,865 women.

( )

Rural Self Employment Training Institutes

(RSETIs)

,
8 ,
, ,
,

In line with the guidelines issued by Ministry of

Rural development, Government of India , the
Bank had set up RSETIs at 8 Lead Districts in
Tamilnadu to provide training to farmers, members
of Self Help Groups , beneficiaries under Swarna
Jayanti Gram Swarozgar Yojana, Educated
Unemployed Youths, Artisans and Beneficiaries
belonging to weaker sections.

( )
( , )

A Rural Training Centre was set up by the Bank

(one jointly with NABARD and Indian Bank) at

40



85 2293

Karaikudi (Sivaganga Dist, Tamil Nadu ) where the

Bank has Lead Bank responsibility. During the year
under review, through these Training Institutes our
Bank had conducted 85 training programmes
benefiting 2,293 trainees.

(
)

Financial Literacy & Credit Counseling Centre

(FLCCC) viz., SNEHA

11

/
,


/

13

With a view to promoting financial education

among general public the bank has set up 11
FLCCCs in the Lead Districts during the period
under review. These centres will educate the
people in rural and urban areas with regard to
various financial products and services available
from formal financial sector, provide face to face
financial counseling services and offer debt
counseling to indebted individuals. FLCCCs will
enable the user public to make informed choices
regarding financial services/ products to derive the
maximum benefits. Totally the Bank had so far set
up 13 FLCCCs in the name and style of SNEHA.

2008

Agricultural Debt Waiver and Debt Relief

Scheme 2008

2008 2008-09
3,08,000
582.86 - 50,000 .
93.14 :3,58,000
. 676

The Hon'ble Union Finance Minister, Govt. of India

in the Budget Speech for 2008-09, announced
Agricultural Debt Waiver and Debt Relief Scheme
2008. Under the Scheme, Bank provided waiver to
the tune of ` 582.86 crore to 3,08,000 Small and
Marginal Farmers and a relief of ` 93.14 crore to
50,000 Other Farmers . In all, 3,58,000 farmers
benefited with total relief of ` 676 crore.

68000 50,000

. 93.14

.581.58

Out of the 68,000 other farmers identified under

Debt Relief, only 50,000 other farmers paid their
share of eligible amount and became eligible under
the Scheme for whom the bank provided
` 93.14 crore as relief amount. In total, Bank
received an amount of ` 581.58 crore from Reserve
Bank of India as reimbursement of waiver claim
amount.
Risk Management

31 2008 ( II)


( )
()

The Bank has adopted the New Capital Adequacy

Framework (Basel-II) with effect from March 31,
2008. In line with Reserve Bank of India's
instructions to all commercial banks, the Bank is
adopting Standardized Approach (SA) for
computation of Credit Risk Capital, Basic Indicator

41


()

Approach (BIA) for calculating the capital for

Operational Risk and Standardized Measurement
Method (SMM) for Market Risk Capital
computation. The Bank is in compliance with the
regulatory requirement in this regard.

, -II

The Bank is also in the process of upgrading its

Risk Management systems and practices for
migrating to the advanced approaches envisaged
under Basel-II framework.

Compliance Function

31.12.2010 3.95%
31.12.2010 1.50%

The Bank has well laid 'Compliance Policy' as per

Reserve Bank of India guidelines and has in place
systems and procedures for managing the
Compliance Risk and mitigating the same. The
overall Compliance risk in branches which was at
3.95% as on 31.12.2009 was brought down to
1.50% as on 31.12.2010.

Credit Monitoring

The Bank monitors the quality of loan portfolio, by

identifying the problems and takes steps to correct
deficiencies. The objective is to minimize slippages
of performing assets to NPA category. Micro
monitoring of the accounts by segmentation and
follow up of the accounts on a daily basis helps the
Bank to minimize slippages.

Recovery Management

1. , 2) / , 3)
4)


/
-

Many pro-active efforts were initiated

such as 1)dissemination of information
2) motivation/support 3) empowerment through
new and innovative schemes and 4) monitoring of
progress. These measures infused a positive
outlook at the operational level and there was a
perceptible improvement in the performance of
Regions/Branches under NPA Management. The
measures include

100%

Emphasis on 100% action under SARFAESI in

all eligible cases. The prime focus was for best
utilisation of time schedule prescribed under
the SARFAESI Act & Rules and Recovery of
Debts due to Financial Institutions Act.
Emphasis on Compromise settlements. A total
of 104 compromise proposals were
sanctioned by Central Office during the
financial year involving compromise amount of
` 353.71 crore in which recovery effected to
the tune of ` 205.82 crore.

104
. 353.71
. 205.82
42



(
/ )

Action plan for recovery was formulated in

respect of all the major non performing
accounts at the beginning of the financial year
and followed up by periodical review at the
Department level as well as by Top Executives
(Chairman and Managing Directors/ Executive
Directors ) with the Regional Heads

Emphasis on recovery of overdue amount

towards upgrading the accounts wherever
possible.

. 2
/


11.12.2010 31.03.2011
30

Launching of Recovery Contest from

11.12.2010 to 31.03.2011 along with special
powers to Branch Heads to sanction One Time
Settlement /Out of Court Settlment in respect
of NPAs upto ` 2 lacs and enhanced
discretionary powers to Regional Heads to
expedite negotiated settlements during the
campaign period. Recovery of ` 30 crore was
made under the contest during the period.
Launching of Lok Adalat Campaign from
01.01.2011 to 31.03.2011. During the
campaign period 1056 NPA accounts were
settled for an amount of ` 561.32 lacs and so
far we have recovered ` 141.61 lacs

01.01.2011 31.03.2011
561.32
1056
141.61

Sale of NPAs to Assets Reconstruction

Companies: 37 numbers of NPAs of various
Regions with book outstanding of ` 415.03
crore were sold to Asset Reconstruction
Company for a sale consideration of
` 265.02 crore.

415.03 37
265.02

1402
, 398

1800 . 192.18
130.46

31.03.2010 .3611
31.03.2011

. 3090
4.47% 2.72%

The Bank made significant cash recovery of

` 1,402 crore (including recovery from written off
accounts and recovery of undebited inferest) and
NPAs to the extent of ` 398 crore (of NPAs
outstanding as on 31.03.2010) were also upgraded
during the year aggregating to ` 1,800 crore. The
Bank recovered a sum of ` 192.18 crore from
written-off-accounts and undebited interest of
` 130.46 crore. As a result, Gross Non Performing
Assets of the Bank significantly came down to
` 3,090 crore as on 31.03.2011 from `.3,611 crore
as on 31.03.2010 in absolute terms and Gross NPA
ratio declined to 2.72% from 4.47% during the

43

 31.03.2010 1995
31.03.2011 1,328
2.52 % 1.19 %

same period. Similarly Net Non Performing Assets

has also came down to ` 1,328 crore as on
31.03.2011 from ` 1,995 crore as on 31.03.2010
and Net NPA ratio declined to 1.19% from 2.52% in
the relevant period.

()

Disposal of petitions received under Right To

Information (RTI) Act

2010-11
1,491
30
88%

The Bank received 1491 petitions seeking

information under RTI Act during the year 2010-11.
All the requests were duly replied within the
specified period of 30 days. About 88% of the
petitions were positively replied and the balance
applications were found ineligible for the requested
details.

107 ,

Our First Appellate Authority received 107 first

appeals, who were not satisfied with the reply of
Central Public Information Officer, which were duly
disposed as per the due provisions of the Act.

36

36
90

36 petitions resulted as second appeals with the

Hon'ble Central Information Commission (CIC). All
36 petitions were disposed by CIC and one appeal
is pending decision. The Bank had maintained
favourable decisions in all the 90 Second Appeals
faced till date.

Industrial Rehabilitation

/
21
. 44.23 . 29.90
5 . 62.10
10 . 157.68
6 (
) 1985 2 2

Total cases under Board For Industrial Financial

Reconstruction / Appellate Authority For Financial
Reconstruction as at the end of reporting year were
21 with an aggregate exposure of ` 44.23 crore. Of
this 5 accounts aggregating to ` 29.90 crore were
standard and performing. Out of NPA accounts,
recovery in 10 cases amounting to ` 62.10 crore
was made. During the year, 6 accounts with an
aggregate exposure of ` 157.68 crore were
brought out of Sick Industrial Companies (Special
Provisions)Act 1985 purview through SARFAESI
action in two accounts, dismissal of reference in
two accounts and net worth turning positive in two
cases.

: ( )

Corporate Debt Restructuring (CDR)

31-03-2011 :
15 .595.96 (31-03-2010
.335.60 12 ) .319.26

As on March, 31, 2011, the number of restructured

borrower accounts under CDR mechanism was 15
with an outstanding of ` 595.96 crore (12 accounts
44

 8
4
1 15

with an outstanding of ` 335.60 crore as on

31.03.2010). During the year, 8 new standard
accounts entered CDR mechanism with total
exposure of ` 319.26 crore, 4 accounts moved out
of CDR as CDR failed and 1 account closed. All the
15 accounts are under standard category.

2010-11 :
, :

Investments
The growth in investments during the year
2010-2011, was mainly driven by increase in
Statutory Liquidity Ratio requirements resulting
mainly on account of Deposit Growth of the bank
coupled with slow credit growth in the first-half of
the financial year.

29.69%
31-03-2010 . 36,795.09
31-03-2011 . 47,720.54
.6,029.04
18.72% -
.4,896.40 106.65% .
3,981.82

Gross domestic investments as of 31st March 2011

stood at ` 47,720.54 crore as against
` 36,795.09 crore as on 31st March 2010 registering
a growth of 29.69% over the previous year. The
Investments in SLR segment registered a growth of
` 6,029.04 crore or 18.72% during the year while
Non SLR investments increased by
` 4,896.40 crore or 106.65%. This was mainly due
to increase in investments in Certificate of Deposits
to the tune of ` 3,981.82 crore.

2010-2011 , .1417.70 ,
() ()
.1358.31
() ()

During the year 2010-11, securities for

` 1,417.70 crore were transferred from Available for
Sale Category (AFS) to Held to Maturity (HTM)
segment, ` 1,358.31 crore from Held to Maturity to
Available for Sale.
As on 31st March 2011, the extent of SLR securities
held in HTM stood at 20.95% of DTL against the
limit of 25% prescribed by RBI compared to 22.39%
as on 31.03.2010.

31-03-2011 ,
25%
31-03-2010 22.39% 20.95%

The Yield of Sovereign bonds continued to be

under pressure during most part of the year, due to
series of policy rate hikes by Reserve Bank of India
to tackle inflation since Mid - March 2010. The bank
continued to trade both in fixed income securities
and Equities throughout the year. The turn over
(Book Value) in the secondary market reached
` 78,035 crore during the year 2010-11 against
` 65,787 crore in 2009-10. Total profit on sale of
securities amounted to ` 108.57 crore during the
year 2010-2011 as against ` 291.86 crore during
the year 2009-2010. Return on total investments
(excluding profit on sale of securities and including
amortization) has increased from 6.85% in
2009 - 2010 to 7.10% in 2010 - 2011.

2010



2010-11
( ) .78,035
2009-10. .65,787 2010-11
.108.57
2009-10 291.86
( )
2009-10 6.85% 2010-11
7.10%
45

Rupee Derivatives

2010-11
2
2010-11 . 3.13
31-03-2010 .1,075
31-03-2011 .1,748

2010-11 .11928.30

2010-11 . 70,279.37
31.03.2010
14.37% 2009-10 .61451.21

Forex Operations

2010-11 33.33% .
125.53
. 94.16 2010-11
. 26.78 . 23.69
13.04 %

The Bank has earned Profit on Exchange of

` 125.53 crore for 2010-11 with a growth of 33.33%
over the previous year earnings of ` 94.16 crore.
Other income earned during the year 2010-11 was
at ` 26.78 crore with a growth of 13.04% over the
last year earnings of ` 23.69 crore.

Credit Card

The Bank's own Visa enabled Credit Card is

catering to the requirements of our clientele and the
card base increased from 15,008 to 37,665 with a
growth of 151%. The turnover showed an increase
of 26 % over the last year and the net profit was at
` 4.14 crore showing an increase of 39% over the
last year. The revenue sharing model, a tie up
venture for Card Acquiring business by deploying
Point of Sale terminals (PoS) at our clients'
merchant establishments have increased
considerably. This serves as a tool to build up
CASA deposits and a value added service to the
clients. The Internet Payment Gateway (IPG)
launched to popularize E.commerce payment is
gaining momentum.

The Bank has achieved merchant turnover of

` 11,928.30 crore for 2010-11. The total merchant
turnover for 2010-11 including Authorized Dealer
branches is ` 70,279.37 crore. The total merchant
turnover has increased by 14.37% when compared
to previous year ended 31.03.2010. The merchant
turnover for 2009-2010 was at ` 61,451.21crore.

15008 37665
151%
26% . 4.14
39 % ,



(), -
,

The Bank took new business initiatives with a tie-up

arrangement with Masters International to issue
Credit Cards and to equip our PoS terminals
Masters enabled and to popularize E.commerce
transactions. The Bank also signed Memorandum

46

of Understanding with AMEX for issue of cobranded IOB and AMEX logo credit cards to
improve the credit card business.

Merchant Banking

,
/
/ /
15
( )



-

The Bank continues to act as Debenture Trustee,

Collecting Bankers to Issues and Dividend/Interest
Paying Banker. During the year, the Bank
introduced Applications Supported by Blocked
Amount (ASBA) scheme in 15 designated
branches for accepting ASBA applications from
Initial Public Offer /Follow on Public Offer/Rights
applicants. The bank took necessary steps for
introducing E-trading and becoming a Clearing &
Settlement Bank for Stock Exchanges. These are in
advanced stages of implementation. The Bank has
been appointed as Co-Lead Book-Running Lead
Manager in one of the forthcoming IPOs with the
responsibilities in post-issue management of the
IPO. The issue is slated to take place during the
current year.

Depository Operations

56
( )
, 14 , 25

As a depository Participant of National Securities

Depository Limited (NSDL), the Bank is extending
depository related services through 56 service
centre branches (including the controlling Chennai
Depository branch). Of these, 14 branches are in
Chennai, 25 in Mumbai and the remaining in other
cities. With a view to improving the number of
demat accounts, the Bank has commenced the
process for becoming a Depository Participant of
Central Depository Services also.

Loan Syndication Activities

-
,

The syndication function has been further

strengthened and the bank is engaged in
syndicating debt components of projects in the
areas of entertainment, steel and power. During the
year, the Bank increased its fee-based income by
underwriting debt requirements of corporates
before down-selling them to other banks.

47



354
()

-



99.68% 26.03.2011
: 99.40% 98.50%
99.30 %
/ :
8,16,467
( )
:
.6189

:
.3.67

Government Business

Indirect Tax Collections

Direct Tax Collections

The Bank is authorized to collect Income Tax and
other Direct Taxes in physical mode through On
Line Tax Accounting System (OLTAS) by 354
branches all over India. The Bank is also authorized
to receive e-payment of Direct taxes for which
Gemini Circle branch (Chennai) is the e-Focal Point
branch. Data submission is 100%. Tax Deduction
and Collection Account Number data quality is
99.68% and Permanent Account Number data
quality is 99.30% compared to the all bank average
of 99.40% and 98.50% respectively as on
26.03.2011.
No. (txns) of duty /tax collected
Turnover (Amount)
Agency Commission

: 8,16,467
: ` 6,189 crore
: ` 3.67 crore

The Bank is authorized to collect indirect taxes

through Electronic Accounting System in Excise
and Service Tax (EASIEST) by 217 branches
authorized by Central Board of Excise and
Customs . The Bank is also authorized to receive epayment of Excise and Service Tax. Haddows Road
branch (Chennai) is the e-Focal Point branch for
Central Excise and Nariman Point branch
(Mumbai) is the e-Focal Point branch for Service
Tax. E-payment of Customs Duty and e-refunds of
Duty draw back have started in March 2011.

217
()

-
, ,
- ,
-

2011

:
/
: 1,42,076
( )
: 2,836.47
/ ( )
: 1,068

:
1.60

Following is the business handled during the year:

No. (txns) of duty /tax collected
Turnover (Amount)
Payments / Refunds (Amount)
Agency Commission

:
:
:
:

1,42,076
` 2,836.47 crore
` 1,068 crore
` 1.60 crore

98.18 % 95.07 %
26.03.2011 : 97.99 % 95.09%

Data submission is 100%. Assessee code data

updation in master is 98.18% and data quality is
95.07% compared to the all bank average of
97.99% and 95.09% respectively as on 26.03.2011.

Collection of State Government revenues

,
,

Our Bank launched e-collection of Commercial

Taxes (VAT) through internet banking in the states
of Tamilnadu and Maharashtra in this year. The
bank is also handling physical collections in

48

 45000 . 442

selected locations in Gujarat, Delhi, Maharashtra

and Kolkata. The transactions were about 45,000
aggregating to ` 442 crore.

Payment of Pension

, , , ,
, , ,
, , ,
2.5

The Bank is servicing about 2.50 lakh pensioners

belonging to Central Civil, Defence, Railways,
Telecom, State Civil, Employees' Pension Fund
Organisation, Coal Miners' Provident Fund
Organisation, Tamil Nadu Electricity Board,
Chennai Port Trust, Chennai Dock Labour Board,
Local Fund Audit of TamilNadu, Malaysian
Government Pension apart from credit through
Electronic Clearing Service.

()
2009
31.03.2011
, , ,

, 31000

The Bank has established Centralised Pension

Processing Center (CPPC) and commenced
payment of Central Civil Pension from January
2009. As on 31.03.2011, the Bank completed
centralising payments of about 31,000 Central,
Civil and Defence pensions covering the states of
Tamilnadu, Kerala, Orissa, Punjab, Puducherry and
the cities of New Delhi, Mumbai, Kolkata,
Bangaluru, Hyderabad and Lucknow.

Treasury Business

1.45 . 720
11
3

The Bank handles Treasury business of the

Government of Tamil Nadu at 11 branches and
Government of Orissa at 3 branches covering
about 1.45 lakh receipts and ` 720 crore of
payments.

Accounts of Central Ministries

. 1,070

The Bank services the account of Planning

Commission and National Informatics Centre and
handled payments for about ` 1,070 crore.

Post Office Collection Account

43 ( )
1250 . 144

Post Office Collection (Drawing and Deposit)

Account is maintained at 43 branches in Tamil
Nadu. About 1,250 receipts and payments of
` 144 crore were handled.

Other Government business

,
2004, 8% ,

The Bank actively participates in the Government of

India Savings Schemes like Senior Citizens

49

Savings Scheme 2004, 8% Taxable Bond, Public

Provident Fund contributing subscriptions of about
` 115 crore.

Currency Chest

34 .
11,315

6 7
. 90.05
81

( )

There are 34 currency chests in the bank with an

aggregate balance of ` 11,315 crore. The Bank
Obtained Reserve Bank of India approval for
opening a new currency chest at Karaikudi.
Organised 7 soiled notes exchange melas in 6
Regions wherein ` 90.05 lakhs of soiled currencies
were exchanged. Identified 81 branches for
installation of Note Sorting Machines.

6
/
,
15

The Reserve Bank of India directive stipulates that

all debit and credit entries in the IBR accounts are
required to be reconciled /eliminated within a
period of 6 months. Whereas the Bank has
significantly reduced the reconciliation cycle,
elimination of the Completely Automated
Settlement System (COMPASS) and Demand Draft
debit entries to 15 days. Besides, the bank ensures
that no Funds Transfer and Telegraphic Transfer
entries are outstanding for more than one month.

Inter Branch Reconciliation (IBR)

Inspection

2010-11
, - 1577

, :

Central Office Inspection, along with Electronic

Data Processing Audit and Non Industiral Priority
Sector Advances (NIPSA), was carried out in 1577
branches during the year 2010-11. Since all
branches were converted to Core Banking
Solution, inspection was conducted in all the
branches on-line.

, , ,

Inspection on Hong Kong Main, Tsim Sha Tsui,

Singapore, Seoul, Bangkok and Colombo
branches were also conducted during the period.

41
32
50%

58.40% 71.90%
382 -

Regional Offices carried out periodical Short

Inspection of Branches. Management Audit of all
41 Regional Offices and 32 Central Office
Departments was also conducted during this
period. Total of 382 branches were brought under
Concurrent Audit covering 58.40% of Deposits and
71.90% of Advances, thereby confirming to the RBI
guidelines of covering at least 50% of Bank's
Business. Revenue Audit was carried out in 1434
branches and Check Audit in 382 branches.

50

1,434 - 382
- 916
-

Stock Audit was conducted for 916 accounts on

selective basis.
Risk Based Internal Audit (RBIA) was conducted in
1577 branches, where Central Office Inspection
was carried out. Management Audit of Regional
Offices was also conducted under RBIA by
preparing Risk Profile of the Regions.

1577 -
() ,

-

Information Systems (IS) Audit was conducted in

all the 43 Regional Computer Centres, one
Depository branch and 363 branches, consisting of
7 Exceptionally Extra Large, 111 Exceptionally
Large and 245 Very Large branches. Information
Systems Review Audit of Central Office
Departments, viz., Business Continuity Plan /
Disaster Recovery Plan, Network, Core Banking
Solution, ATM / Debit Card operations, Real Time
Gross Settlement /National Electronic Funds
Transfer Operations, Internet Banking and Mobile
Banking handled by Information Technology
Department, Treasury (Domestic), Treasury
(Foreign) Operations were conducted by engaging
Qualified External Auditors.

43 , 363
, 7 111
245
, ()
- /

, , , /
, / ,
,
, [] []

Audit Sub Committee (ASC)

- ()

Board of Directors in the meeting held on

August 26,2008 approved the formation of Audit
Sub Committee(ASC). During the financial year
2010-11, 7 ASC Meetings were held. The Review of
Central Office Inspection reports of Extra Large
Branch/Exceptionally Extra Large Branch
/Specialized Branches/Overseas Branches
including Management Audit of Regional Offices,
Review of Stock Audit / Concurrent Audit / Test
Check Audit / Revenue Audits were taken up for
discussion in the ASC Meetings. The major
findings of ASC with Action Taken Report were
placed to Audit Committee of the Board (ACB),
once in a quarter. As per the directions of ACB in
the Meeting held on 22.07.2010, the review notes
on the Management Audit of major Regional
Offices and Central Office Departments were
submitted to ACB.

2010-11

Vigilance

During the year 2010-2011, the Bank has taken

effective steps for disposal of pending Vigilance
Disciplinary Cases within the time frame fixed by

26 2008 -
()
2010-11 7
, / /
-, / -/ -/
-

22.07.2010

178

51

Central Vigilance Commission. During the year

178 Vigilance Disciplinary Cases were disposed.
The Operational Risk Management Committee and
the Committee of the Board to monitor large Value
Frauds analysed the frauds reported periodically
and observations/ remedial measures made/
suggested by the Committee have been
implemented by the Bank.

/ /

During the year, our Bank issued 15 Circulars

captioned Preventive Vigilance Chief Vigilance
Officer's special Circular elaborating the vigilance
disciplinary cases handled by the Department.
Besides incorporating the details of punishments
awarded the important preventive measures to be
taken by the staff members are also included in
these circulars.

15 ( )

Further emphasis has been given by the Bank

towards Preventive Vigilance measures through
periodical Branch Inspection by Chief Vigilance
Officer and also by Vigilance Officers attached to
Vigilance Cell at select Regional Offices. The role of
staff at all levels in adherence to Systems and
Procedures especially compliance to Know Your
Customer norms, Anti Money Laundering
guidelines, fraud prone areas etc has been
emphasized during periodical visits to Regional
offices and Branches by Chief Vigilance Officer.

-
, ,

A Vigilance Official has been posted in all the

Regions to handle the Vigilance matters. Vigilance
Committees are formed in all Regional Offices,
Exceptionally Large and Very Large Branches to
examine and plug loopholes in Branch functioning
to prevent frauds and also to implement the
Preventive Vigilance Measures suggested by
Vigilance Department.

2010

The Bank has also ensured compliance of Central

Vigilance Commission directions and guidelines in
the vigilance related matters. Vigilance Awareness
Week was observed in October 2010 (i.e. from
25.10.2010 to 01.11.2010.)

(25.10.2010 01.11.2010 )

Information Technology

31 20011 2184 5
""

As on 31 march 2011, all the 2184 domestic

branches and 5 Extension Counters were brought
under In-house developed Core Banking System
CROWN.

52

 31
20011 17 43
11 6

All new branches are directly brought under the

Core Banking Solution. As on 31 march 2011, 17
Central Clearing Offices, 43 Regional Offices and
11 Central office Departments and 6 Inspectorates
have been brought under Core Banking Solutions.

31.3.2010 771 590 146

35 2010-11 272

1043 (719 281 43 )
2674841
2674790

31.03.2011 43 793


2144

The total number of Automated Teller Machine

(ATMs) as on 31.03.2010 was 771 (590 Onsite,
146 Offsite and 35 Railway ATMs). During the year
201011, 272 more ATMs were brought into the
network taking the total to 1043 (719 Onsite,
281Offsite and 43 Railway ATMs). The Bank has a
total debit card base of 26,74,841 cards which
includes 26,74,790 Visa Cards. ATMs Sourcing and
Management is outsourced to
M/s Tata Communications Banking Infrasolutions
Ltd. As on 31 March 2011, 793 ATMs in 43 regions
have been brought under the managed services.
ATMs under owned model are also to be installed
during the coming year. 2,144 branches are
covered under Real Time Gross Settlement (RTGS)
National Electronic Funds Transfer payment
systems (NEFT).

:
( )

, , ,
, , ,
,

Our Internet Banking Suite is developed in-house

and is comparable with any of the features and
functionalities offered by any of the Commercially
Off the Shelf (COTS) models available in the
market. It has a wide gamut of services like Balance
Enquiry, Last Few Transactions, Search for Cheque
Paid, Statement of Account, Inter-bank and Intrabank funds transfer, bulk remittance, utility bill
payments like Tamil Nadu Electricity Board (TNEB)
bill payments and online tax payments. Viewing of
income tax particulars from NSDL site by the
registered internet banking customers, using their
Permanent Account Number is available for
individuals and corporates. The facility is secure
and provides for two factor authentication through
the use of Public Key Infrastructure (PKI) -tokens.
In addition to a bouquet of services for banking
activities, M-Commerce services like air/movie
ticketing, Demat services, facility to suspend
ATM / debit card, ATM locator, Branch locator etc.
are offered. Mobile Banking service is 3G Mobile
and 3G SIM compliant.

-
/ , - /
,
3

53

The bank also offers Payment Gateway services for

both its own customers as well as for other
customers. We have tied up with a number of
merchant establishments which facilitates both Ecommerce and M-commerce transactions.
Payment of utility bills like mobile payment,
insurance Premium, other banks' credit cards,
telephone bill payments etc., using the debit cards
is also enabled using the Payment Gateway.

- -
,
,

Three way Disaster recovery setup provides for

near zero percent data loss. The Primary data
Centre (PDC) and the Command Centre (CC) are
located in Chennai while the Disaster Recovery
(DR) setup is in a different seismic zone. The CC
database is updated real-time on a synchronous
mode. The DR site is updated on an Asynchronous
mode with marginal time lag.

()
() ( )



-

A robust MPLS-VPN network supports our CBS

with redundancies built in at device level, media
level and service provider level. All the Regional
network nodes and three data centres are provided
with dual MPLS VPN Connectivity sourced from
two different service providers. Connectivity is
provided through wired, RF and VSAT media
depending upon the feasibility at a particular
location. All the branches/Offsite ATMs/other
offices are connected either by point to point
leased line connection to the respective regional
network node or directly under primary MPLS-VPN
Cloud. Redundant MPLS-VPN links from alternate
service provider has been sourced for about 1,586
branches. These links are functional and take care
of network downtime and ensure business
continuity. The network uptime has been more than
99.96 %.

,


-

,
/ /
--
-
-
1586

99.96%

100% branches of Pandyan Grama Bank (203

branches) and 86 branches out of 174 branches of
Neelachal Gramya Bank have been brought under
the CBS solution.

100% (203 )
174 86

To address the need for standardization and for

ensuring uniformity it was decided to bring all the
overseas branches under a common software
platform, under HUB and SPOKES Model, with the
HUB at Singapore and Disaster Recovery Site at
Bangkok.

,

54

,
,
,

Singapore, Bangkok and Colombo branches has

already been brought under the common software
platform, while implementation of the package is
underway at Seoul. Hongkong and Tsim Sha Tsui
(TST), Hongkong branch are running on a standalone packages and will also be brought under the
common platform.

, ,

Business Intelligence Suite has provided

dashboards and tools which enable generation of
various analytical reports which help in trend
analysis and decision making. Forecasting and
Modeling portal has been added which facilitates
static forecasting. A number of reports have
already been brought under the dashboard and
provides decision making support to various user
departments at Central Office like Planning,
Costing, and Treasury and to the field level
functionaries including Branch Managers.
Cheque Truncation System has been implemented
in Delhi and will be implemented in Chennai Zone
shortly. Enterprise Resource Planning Systems
Application and Product (ERP-SAP) solution has
been implemented enabling corporate customers
to connect to the bank's network directly for straight
through processing of payments, collections and
Letter of Guarantee /Letter of Credit requests etc.
Aadhaar has been successfully implemented in the
bank and is being rolled out to the branches for
bringing all its customers under the Aadhaar
scheme to provide Unique Identification Number.
Online Credit processing solution is being
implemented to reduce TAT (Turn Around Time) of
loan processing. Biometric solution is being
implemented in branches as an enhanced security
measure, to allow branch users to access the CBS
system after biometric authentication. The bank
has plans of rolling out many new IT initiatives
during the ensuing year.

-
,
/




(
)

-
,

Costing of Operations

/ ,
, ()



-

The Costing cell continued to analyze critical areas

under marginal costing, incremental yield, Net
Interest Margin (NIM) and the profitability trend on a
monthly/quarterly basis. The key analytical notes
were discussed in the Asset Liability Committee
meeting, which serves as a tool for effective
management of Asset Liability Management

55

techniques. Apart from this, other areas include

profit planning for the bank as a whole, Regional
profit budgeting, preparation of Bank's Statement
of Intent (SOI) to Ministry of Finance, Government
of India besides conducting various cost studies.

Security

,
,

Security measures, mandatory as well as

recommendatory, were correctly and strictly
implemented at all the branches and administrative
offices. Security measures were reviewed
periodically keeping in view the local law and order
situation and additional steps as necessary were
taken to strengthen it to create a safe environment
for customers and the staff. The Bank continued
to stress on preventive measures for security and
fire fighting arrangements and inculcation of
security consciousness among the staff to ensure
safety to life and property.

Human Resources Development

Staff Strength

31 2011 25626 9681

, 11661 4284

The Bank's staff strength in India stood at 25,626

Comprising 9,681 Officers, 11,661 Clerks and
4,284 Sub-staff as of 31st March 2011.

, 6079 ()
, 1437 )) 2279
() 5436
, 1770
, 748 556

Of the total staff strength, 6,079 members

belonged to Scheduled Caste (SC) category, 1,437
to Scheduled Tribe (ST) Category, and 2,279 to
Other Backward Class (OBC) Category. Staff
Strength includes 5,436 Women employees, 1,770
employees from Religious minority community,
748 ex-servicemen and 556 physically challenged
members.

HR Initiative

The Bank has drawn a succession policy so as to

ensure a steady flow of competent and
experienced leaders to succeed the personnel
who exit at various levels of hierarchy. The Bank
has also initiated the process of identifying aspiring
Offficers who are interested in their career
progression in critical areas like Treasury, Foreign
Exchange, Marketing, Credit/Financial Analysis,
R i s k M a n a g e m e n t , R e c o v e r y, W e a l t h ,
Management, Capital Market Services, HR etc.
Steps have been initiated to identify women
officers for grooming them to take up higher
responsibilities through training and appropriate
placement.

,
, , / , ,
, , ,

56


( )
(
)

AIM (All Ideas Matter) Staff Suggestion Scheme

has been introduced to unleash ideas of staff
covering various aspects of Banking. A Scheme for
Reimbursement of Exam fees for identified
Courses Conducted by Indian Institute of Banking
and Finance (IIB&F) and other institutes
introduced to provide much needed support to
upgrade the knowledge and to motivate the staff
members.

2010-2011 , 62 25

During the year 2010-2011, the Bank had recruited

62 Officers and 25 Clerks.

,

1525 525
1100

To drive Business Development and Growth,

Branch expansion, and to take forward
Government initiative of Financial Inclusion, the
Bank has planned to induct 1525 Officers including
525 Specialist Officers and 1100 Clerical Staff.

Training
Keeping in view the corporate goal of making the
Bank a customer centric one training has been
imparted on contemporary issues of banking apart
from basic areas of banking through the internal
and external mode.

/ ,
,
,
, ,
/ - , ,
/ ,
,

The focus continued to be on Credit Appraisal/

Credit Monitoring, Non Performing Assets
Management and Recovery in addition to Risk
Management. Apart from the above, regular
training on Banking topics have been imparted to
officers, clerks in the field of Foreign Exchange,
Priority Credit, Know Your Customer / Anti Money
Laundering, Banking Codes, Small and Medium
Eenterprises /Micro Finance &Rural Credit, IT
Products and Preventive Vigilance. Also
Programme of Personnel Effectiveness and Team
Building were conducted to all staff members at
Staff College and various Staff Training Centres.

,
(),
, ,
() .

Training Programme on International Financial

Reporting System (IFRS), workshop for Regional
Marketing Managers, Security Officers Training
Programme, Training Programme on Applications
Supported by Blocked Amount (ASBA), Faculty
Development Programme were conducted during
the year.

, /

Induction/pre confirmation training programme

were conducted for probationary officers
during the year. Pre Promotion Training for
Scheduled Caste /Scheduled Tribe staff members
who are eligible for promotion from one

/ /
/

57

grade/cadre to another was conducted at various

Staff Training Centres and Staff College.

, -
-

, ,
,
, , /

The Pre Retirement counseling programme was

conducted for Officers and Award Staff Members
who retired during the year. In house Programme
on leadership and organization development,
public relations, vigilance administration and
disciplinary action were conducted with faculty
assistance from reputed institutions and
professionals. In company programme on
Financing of Infrastructure Projects especially with
reference to Road, Power, Sea/Air Ports were
conducted exclusively for identified officers of our
Bank at National Institute of Bank Management ,
Pune.

/
-
-

Executives/Officers were nominated for overseas

training to acquire international perspective on
banking & technology and share their expertise
and experience with other participants. As a part of
E-Learning a portal (e-paatshala) is in place to
serve as a vehicle for providing e-lessons on the
different areas of banking operations.

Internal Training
The internal training system comprises of one Staff
College, nine Staff Training Centres and one Rural
Banking Training Centre. Internal training was
imparted to 13,323 staff comprising of 7,564
Officers, 4,984 Clerical and 775 Sub-staff by
conducting 1,000 programmes. Of the total staff
trained, 3,015 belonged to Scheduled Caste (SC),
and 1,061 belonged to Scheduled Tribe (ST).

13323
1000
7564 , 4984
775 3015
1061

External Training and Overseas Training

The Bank had also deputed 126 Executives and
465 Officers for training programmes conducted
by reputed external institutes. Apart from these 19
executives and 4 Officers were deputed for training
abroad.

126 465
8 4

.. -

Training for Staff of Regional Rural Banks

39
515
129 (.) 16
(..)

We had also trained 515 staff members of

Neelachal Gramya Bank and Pandyan Grama
Bank through 39 Training Programmes. Of the total
staff trained 129 belonged to Scheduled Caste
(SC) and 16 belonged to Scheduled Tribe (ST).

58

Industrial Relations

,
/ /

The industrial relations climate was cordial. There

were no conflicts with any of the employees' trade
unions, officers' association and Scheduled Caste
(SC) /Scheduled Tribe (ST)/Other Backward Class
(OBC) welfare associations. Pending Disciplinary
cases under Industrial relations have come down
substantially.

'Single Window System' is under implementation to

enhance customer service.
Submission of Return of Movable, Immovable and
Valuable property by Officer employees as on
31st March every year has been made online
effective from 01.04.2011.

31 ,
1.4.2011


2010-2011 ,
* *

27 - 29 , 2010

Visit of Parliamentary Committees

The following parliamentary committees visited
during the financial year 2010-11 :
o

Rajya sabha Committee on Subordinate

Legislation - May 27 - 29, 2010.

30 3 2010

17 19 2010

Parliamentary Committee on Industries May 30, 2010 to June 3 , 2010.

12 13 2010

Parliamentary Standing Committee on

Personnel Public Grievance Law and justice June 17 19, 2010.

28 31 2010

Parliamentary Committee on Subordinate

LegislationJuly 12 13, 2010.

Parliamentary Committee on Industry October 28 -31, 2010

17 22 2010

Rajya sabha Committee on Subordinate

Legislation December 17- 22, 2010.

Parliamentary Standing
Committee on
Finance - January 31- February 3, 2011

Parliamentary Committee on Finance

February 2 -4 , 2011

Rajya sabha Committee on Assurances

February 6 -12, 2011

31 3 2011

2 4 2011
6 12 2011

2011-2012


/

Outlook
Economic outlook for 2011-12 appears to be very
good. With the Bank's ongoing initiatives for driving
the business and positive motivation among the
staff at all levels, the Bank is all set to reach further
milestones in all Key Performance Areas and aims
to rank among the big banks in India in the years
to come.
59

REPORT OF THE BOARD OF DIRECTORS ON

CORPORATE GOVERNANCE
FOR THE YEAR 2010-11

2010-11

.
1.

A. MANDATORY REQUIREMENTS:
1. BANK'S PHILOSOPHY ON CODE OF
GOVERNANCE:
Corporate Governance is a system by which
organizations are directed and controlled. It
provides a structure to the organizations, by which
they set their objectives and creates a foundation
of sound business ethics for attaining those
objectives. Corporate Governance consists of a
long term relationship between management and
investors as well as a transactional relationship
which deals with high standard of disclosures. The
primary objective of sound corporate governance
is to contribute towards improved corporate
performance and accountability in creating long
term shareholder value by ethical means.

-









,



-

The Bank protects its stakeholders' interest by

proactively adopting and practicing good
Corporate Governance. Bank is complying all the
norms laid down by regulatory authorities, in all its
functional areas. The Board of the Bank recognizes
its accountability to all the stakeholders by
creating, protecting and enhancing their wealth as
well as it is reporting performance in a timely and
transparent manner to the stakeholders. It is the
Bank's endeavour to ensure the implementation of
best ethical practices for the purpose of enhancing
corporate governance and in turn benefiting
shareholder interests.

The Bank appreciates its fiduciary duty and

responsibility for ensuring the effectiveness of its
overall governance process, for ensuring the
maintenance of effective financial reporting and
disclosure norms and adherence to high ethical
standards.

The Bank's Corporate Governance policies are

based on the following principles:

Satisfy the law both in letter and in spirit

Be transparent and maintain a high degree of
disclosures levels.
Communicate externally in a truthful manner
about how the bank is run internally
Comply with laws of all the countries in which
the Bank operates
Management is only the trustee and custodian
of the public funds and not the owner

60

The Bank's existing corporate vision: to be a

Leader in terms of Profit and Growth Providing Safe
& Ethical Banking Services to Customers. The
Bank will continue to focus its resources, strengths
and strategies to achieve this vision.

2.
.

2. BOARD OF DIRECTORS

,
31.03.2011
,

The business of the Bank is vested with the Board

of Directors. The CMD and two EDs function under
the superintendence, direction and control of the
Board. The strength as on 31.03.2011 is twelve
directors comprising three whole time Directors
and nine non-executive Directors, which includes
three directors elected by the shareholders to duly
represent their interest.

a. Composition:

. 2010-11

b. Particulars of directors who held office

during the financial year 2010-2011:
Sl Name of the Director

Designation

No.

Nature of
Directorship

Date of
Appointment

Retirement/
demission of office

during the year

19.04.2010

01 Shri S A Bhat

Chairman &
Managing Director

Executive / Whole
Time

04.06.2007

31.10.2010 Retired

02 Shri.M.Narendra

Chairman &
Managing Director

Executive / Whole
Time

01.11.2010

--

03 Shri Y L Madan

Executive Director

Executive / Whole
Time

16.05.2008

31.08.2010 Retired

04 Smt. Nupur Mitra

Executive Director

Executive / Whole
Time

07.12.2009

--

05 Shri A.K.Bansal

Executive Director

Executive / Whol
Time

01.09.2010

--

06 Dr. Vinita Kumar

Govt. Nominee
Director

Official
Non Executive

10.06.2008

--

07 Smt. Chitra
Chandramouliswaran

RBI Nominee
Director

Non Executive

27.02.2007

29.07.2010
Demitted office

08 Shri.S.V.Raghavan

RBI Nominee
Director

Non Executive

30.07.2010

--

09 Shri N Sridaran

Workmen Employee
Director

Non Executive

20.04.2007

19.04.2010
Demitted office

10 Shri. Sridhar Lal Lakhotia Workmen Employee

Director

Non Executive

09.08.2010

--

11 Shri K. Ananda Kumar

Officer Employee
Director

Non Executive

26.03.2010

--

12 Shri B V Appa Rao

Director/ Part- time

Non Official

Non Executive

29.08.2008

--

13 Shri Sooraj Khatri

Director /Part-time
Non Official

Non Executive

26.10.2009

--

14 Shri A.K. Bhargava

Shareholder Director Non Executive

08.12.2008

--

15 Dr. Chiranjib Sen

Shareholder Director Non Executive

08.12.2008

--

16 Shri A Vellayan

Shareholder Director Non Executive

08.12.2008

--

Profile of Directors of the Bank is enclosed as an

Annexure.

61

It is declared that none of the directors are related

to each other or related to any of the employees of
the bank.
The Board has adopted a Code of Conduct for
Directors and all the General Managers and a
declaration has been obtained from the CMD
confirming their compliance with the Code of
Conduct and is attached to this report.
Shri A.P.Singh, General Manager, a qualified
Company Secretary, attached to Board Services
Department, is also the Secretary to the Board, in
accordance with the recommendations of the Dr.
Ganguly Committee.

...


..,
.

.





-- , :
, 16

c. Meetings of the Board:

The date and place of the meeting as well as the
agenda papers are advised to all Directors well in
advance. The Directors have access to all
additional information on the agenda. Executives
of the Bank are also invited to attend the Board
meetings to provide necessary clarifications.
During the year under review, the meetings of the
Board were held 16 times as against the
requirement of holding meetings at least once a
quarter with a minimum of six times a year.

2010-11
16 :

01
02
03
04
05
06
07
08

29
29
24
20
31
21
28
27

- 04
- 05
- 06
- 07
- 07
- 08
- 08
09

- 10
- 10
- 10
- 10
- 10
- 10
- 10
10

09
10
11
12
13
14
15
16

29
15
11
22
28
19
26
22

- 10
- 11
- 12
- 01
- 01
- 02
- 02
- 03

- 10
- 10
- 10
- 11
- 11
- 11
- 11
- 11

During the financial year 2010-11, the Board

meetings were held 16 times on the following
dates and places :
SL NO.
01
02
03
04
05
06
07
08
09
10
11
12
13
14
15
16

DATE OF MEETING
29
29
24
20
31
21
28
27
29
15
11
22
28
19
26
22

- 04
- 05
- 06
- 07
- 07
- 08
- 08
- 09
- 10
- 11
- 12
- 01
- 01
- 02
- 02
- 03

- 10
- 10
- 10
- 10
- 10
- 10
- 10
- 10
- 10
- 10
- 10
- 11
- 11
- 11
- 11
- 11

PLACE HELD
Chennai
Ootacamund
Chennai
Chennai
Chennai
Chennai
Chennai
Chennai
Chennai
Delhi
Chennai
Chennai
Chennai
Chennai
Mangalore
Chennai

All the meetings were conducted with proper

quorum and without any adjournments.
Attendance of the directors at the above Board
meetings and last AGM held on 20.07.2010 are
furnished below:

20.07.2010
:

62

Sl.
No.

Name of Director

Number of
Board Meetings
Attended / Held

Attendance in
the Last AGM

01

Shri. S A Bhat, CMD

09/09

Yes

02

Shri.M.Narendra, CMD

07/07

03
04

Shri Y L Madan
Smt. Nupur Mitra

06/07
14/16

Appointed after
the date of AGM
Yes
No

05

Shri A.K.Bansal

08/09

06

Dr. Vinita Kumar

09/16

Appointed after
the date of AGM
Yes

07

02/04

No

08

Smt. Chitra
Chandramouliswaran
Shri.S.V.Raghavan

11/12

09

Shri. Sridhar Lal Lakhotia

11/11

10
11

Shri.K.Ananda Kumar
Shri Sooraj Khatri

15/16
14/16

Appointed after
the date of AGM
Appointed after
the date of AGM
Yes
Yes

12

Shri B V Appa Rao

16/16

Yes

13

Shri A K Bhargava

16/16

Yes

14
15

Dr. Chiranjib Sen

Shri A Vellayan

10/16
05/16

Yes
No

d. Number of other Boards or Board

committees in which the Director is a
member/ Chairperson:

.
:

Name of the Director

Number of other companies

(excluding private companies
and IOB ) in which he / she is
a member/ Chairperson of
the Board (excluding
alternate / nominee director)

Number of
Committees
(other than IOB)
in which a
member

Shri A.K. Bhargava

03

Shri A Vellayan

02 - Chairman
04 - Member

01 - Chairman
02 - Member
01 - Member

Dr. Chiranjib Sen

01

Member

- Member

Nil

e.Membership in Committees:
None of the directors on the Board is a member in
more than 10 committees or acts as a Chairman of
more than five committees across all companies in
which he is a director. (For the purpose of reckoning
the limit in terms of clause 49(1)(C) of the listing
agreement, the chairmanship /membership of the
Audit Committee and the Shareholders' Grievance
Committee alone have been considered).

. :
10
,
( 49(1) (
) , -
/

3. :

3. COMMITTEES OF THE BOARD:

In order to facilitate the decision-making process,
Board has constituted the following committees
and delegated specific powers to them. The
minutes of each meeting are subsequently placed
before the next meeting of the committee for
confirmation and the minutes thus approved, are
placed before the Board Meeting for their
information.

63

3.1 Management Committee of the Board

(MCB):
MCB is constituted as per the provisions of the
Nationalized Banks (Management and
Miscellaneous Provisions) Scheme, 1970. The
functions and duties of the MCB are as under:
a. Sanctioning of credit proposals (funded and
non funded)
b. Loan and Interest Compromise / Write off
proposals
c. Proposals for approval of capital and
revenue expenditure
d. Proposals relating to acquisition and hiring of
premises, including deviation from norms for
acquisition and hiring of premises.
e. Filing of suits / appeals, defending them etc.
f. Investments in Government and other
approved securities, shares and debentures of
companies, including underwriting.
g. Donations
h. Any other matter referred to the Management
Committee by the Board.
Items (a) to (g) will be in respect of proposals
beyond the discretionary powers of CMD.

3.1 ( )
(
) 1970
:
. (
)
. /
.
. ,


. / ,
. ,

.
.
() (),

29

The committee met 29 times during the year. All the

meetings were conducted with proper quorum and
without any adjournments.

01.04.2010 31.03.2011

:

The Members who held office during the period

01.04.2010 to 31.03.2011 and the details of
number of meetings attended during their tenure
by each committee member are as under:
Sl. Name of Director
No.

Position

1.

Shri S.A. Bhat, CMD

2
3.

Shri.M.Narendra,
CMD
Shri Y L Madan

4.

Smt. Nupur Mitra

Tenure of membership

Number of
Meetings
attended

From

To

Chairman

04.06.2007

31.10.2010

Chairman

01.11.2010

Member

16.05.2008

Member

07.12.2009

Shri A.K.Bansal

Member

01.09.2010

6.

Smt. Chitra
Chandramouliswaran

Member

12.07.2007

29.07.2010

04/07

Shri.S.V.Raghavan

Member

30.07.2010

31.07.2010

19/20

31.05.2010

16/17

07.06.2010

10/17

14/14
14/15

31.08.2010

08/10
28/29
17/19

13.09.2010
8

Shri A.K. Bhargava

Member

01.12.2009
01.12.2010

Dr. Chiranjib Sen

Member

08.12.2009
08.12.2010

64

10

Shri B.V. Appa Rao

Member

01.06.2010

30.11.2010

12/12

11

Shri Sooraj Khatri

Member

29.10.2009

28.04.2010

12/13

08.06.2010

07.12.2010
28.10.2010

12

Shri K. Ananda Kumar Member

29.04.2010

13

Shri. Sridhar Lal

Lakhotia

29.10.2010

Member

12/13
15/15

3.2 ()

3.2 Audit Committee of the Board (ACB):

/

: - , ,
,
, 18.02.2008
( )
1970/1980 9(3) ()
-

The Audit committee of the Board has been

constituted by the Board of Directors as per
instructions of the Reserve Bank of India/GOI and
consists of six members comprising of two EDs,
Government director, RBI director, two non-official
directors of which one is a Chartered Accountant
and non-official Chartered Accountant director
nominated under section 9(3)(g) of the Banking
Companies (Acquisition and Transfer of
Undertakings) Act, 1970/1980 in terms of GOI
Circular dated 18.02.2008 advising Public Sector
Banks to include such Director in the Audit
Committee of the Board.

The delegated functions and duties of the ACB are

as under:

-

,

/

To provide direction as also oversee the

operation of the total audit function in the Bank.
Total audit function will imply the organization,
operationalisation and quality control of the
internal audit and inspection within the Bank
and follow up on the statutory / external audit of
the Bank and inspections of RBI.

/
,

To review the internal inspection / audit function

in the Bank the system, its quality and
effectiveness in terms of follow-up and also the
inspection reports of specialized and extra large
branches and all branches with unsatisfactory
ratings

To obtain and review half yearly reports from

the Compliance Officers of the functional areas

-
()
/

To review and follow up on the report of the

statutory audits and all the issues raised in the
Long Form Audit Report (LFAR) and interact
with the external auditors before the finalization
of the annual / quarterly financial statements
and reports.

To review and follow up all the issues / concerns

raised in the Inspection reports of RBI.

This committee specially focuses on the follow - up

of:

-
-

Inter Branch Adjustment Accounts

Unreconciled long outstanding entries in Inter
Bank Accounts and Nostro Accounts

Arrears in balancing of books at various

branches

65




-
/ :

Frauds and all other major areas of house

keeping.
The following additional role functions/powers
have been entrusted to ACB in terms of SEBI
Committee on Corporate Governance guidelines
issued by RBI to Indian Commercial Banks listed
on stock exchanges:

To investigate any activity within its terms of

reference.

To seek information from any employee.

To obtain outside legal or other professional

advice.

To secure attendance of outsiders with relevant

expertise, if it considers necessary.

-
:

The role of the Audit Committee shall also include

the following in addition to the existing role
function:

Overseeing of the company's financial reporting

process and the disclosure of its financial
information to ensure that the financial
statements are correct, sufficient and credible.

Reviewing with the Management the financial

statements with special emphasis on
accounting policies and practices, compliance
of accounting standards and other legal
requirements concerning the financial
statements.

Reviewing with the Management, external and

internal auditors, the adequacy of internal
control systems.

Reviewing the findings of any internal

investigations by the internal auditors into
matters where there is suspected fraud or
irregularity or a failure of internal control
systems of a material nature and reporting the
matter to the Board.

- -
-
-

Discussing with external auditors before the

commencement of audit the nature and scope
of audit as well as having post audit discussion
to ascertain any area of concern.

Reviewing the company's Financial and Risk

Management Policies.

66

 29.04.10, 19.05.10, 22.07.10,

31.07.10, 27.09.10, 20.10.10, 11.12.10, 31.12.10,
28.01.2011, 29.01.11 28.03.11 11

The committee met 11 times during the year on

29.4.10, 19.5.10, 22.7.10, 31.7.10, 27.9.10,
20.10.10, 11.12.10, 31.12.10, 28.1.11, 29.1.11 and
28.3.11.

All the meetings were conducted with proper

quorum and without any adjournments.

01.04.2010 31.03.2011

The members who held office during the period

01.04.2010 to 31.03.2011 and the particulars of the
number of meetings attended by them during the
year are as under:
Sl.

Name of Director

Position

Tenure of membership
From

No.

3.3
... 01.04.2010
31.3.2011 9
:

To

Number of
Meetings
attended

1.

Shri B.V. Appa Rao

Member/
Chairman elect
at each meeting
of ACB

11.10.2009

2.

Shri Y L Madan

Member

16.05.2008

3.

Smt. Nupur Mitra

Member

07.12.2009

10/11

4.

Shri A.K.Bansal

Member

01.09.2010

07/07

5.

Dr. Vinita Kumar

Member

10.06.2008

04/11

6.

Smt. Chitra
Chandramouliswaran Member

27.02.2007

7.

Shri.S.V.Raghavan

Member

30.07.2010

8.

Shri A Vellayan

Member

09.12.2008

9.

Shri A. K. Bhargava

Member

29.05.2010

11/11

31.08.2010

29.07.2010

03/04

02/03
07/08

28.05.2010

02/02
09/09

3.3 Risk Management Committee:

The Chairman of the committee is the CMD of the
Bank. The committee met 9 times during the period
01.04.2010 to 31.03.2011. Number of Meetings
attended by each Committee Member during the
year:
Sl. Name of the Directors
No.

3.4

Tenure of membership
From

To
31.10.2010

Shri S. A. Bhat

04.06.2007

Shri.M.Narendra,

01.11.2010

Number of
Meetings
attended
05/05
04/04

Shri Y L Madan

16.05.2008

Smt. Nupur Mitra

07.12.2009

Shri A.K.Bansal

01.09.2010

Smt. Chitra
27.02.2007
Chandramouliswaran

29.07.2010

Shri.S.V.Raghavan

30.07.2010

29.10.2010

Shri B V Appa Rao

08.12.2008

08/09

Shri A. K. Bhargava

29.05.2010

08/09

31.08.2010

03/03
09/09
06/06
01/02
03/03

3.4 Committee For Monitoring Large Value

Frauds:

.... 01.04.2010
31.03.2011

The Chairman of the committee is the CMD of the

Bank. The committee met 7 times during the period
01.04.2010 to 31.03.2011. Number of meetings
attended by each member of the committee during
the year:

67

Sl. Name of the Directors

No.

Tenure of membership
From

To

Number of
Meetings
attended

1.

Shri S. A . Bhat

04.06.2007

31.10.2010

2.

Shri.M.Narendra

01.11.2010

3.

Shri Y L Madan

29.11.2008

4.

Smt. Nupur Mitra

07.12.2009

05/07

5.

Shri A.K.Bansal

01.09.2010

03/04

6.

Dr. Vinita Kumar

10.06.2008

03/07

7.

Shri A.K. Bhargava

29.11.2009

07/07

8.

Shri A Vellayan

29.11.2009

9.

Shri Sooraj Khatri

29.05.2010

03/04
03/03

31.08.2010

28.05.2010

03/03

01/01
06/06

3.5 Customer Service Committee:

3.5
.... 01.04.2010
31.03.211 4
:

The Chairman of the committee is the CMD of the

Bank. The committee met 4 times during the period
01.04.2010 to 31.03.2011. Number of meetings
attended by each member of the committee during
the year:
Sl.

Name of the Director

No.

Tenure of membership
From
To

Shri S. A . Bhat

04.06.2007

Shri.M.Narendra

01.11.2010

Shri Y L Madan

16.05.2008

Smt. Nupur Mitra

07.12.2009

31.10.2010

Number of
Meetings
attended
02/02
02/02

31.08.2010

02/02
03/04

Shri A.K.Bansal

01.09.2010

02/02

Dr. Vinita Kumar

10.06.2008

02/04

Smt. Chitra
Chandramouliswaran

27.02.2007

29.07.2010

Shri.S.V.Raghavan

30.07.2010

29.10.2010

9
10

Shri. Sridhar Lal Lakhotia 09.08.2010

26.03.2010
Shri K. Ananda Kumar

04/04

11

Shri Sooraj Khatri

04/04

3.6

0/01
01/01
03/03

29.05.2010

3.6 Committee For Review Of Disciplinary

Cases:

.... 01.04.2010
31.03.2011 3
:

The Chairman of the committee is the CMD of the

Bank. The committee met 3 times during the
period 01.04.2010 to 31.03.2011.
Number of
meetings attended by each member of the
committee during the year:
Sl.
No

68

Name of the Director

Tenure of membership

Number of
Meetings
attended

From

To
31.10.2010

02/02

31.08.2010

01/01

Shri S. A . Bhat

04.06.2007

Shri.M.Narendra

01.11.2010

Shri Y L Madan

16.05.2008

Smt. Nupur Mitra

07.12.2009

Shri A.K.Bansal

01.09.2010

01/02

Dr. Vinita Kumar

10.06.2008

02/03

Shri.S.V.Raghavan

30.07.2010

03/03

01/01
03/03

3.7

3.7 Committee For Establishment of

Correspondent Accounts:

.... 01.04.2010
31.03.2011 3
:

The Chairman of the committee is the CMD of the

Bank. The committee met 3 times during the period
01.04.2010 to 31.03.2011. Number of meetings
attended by each member of the committee during
the year:
Sl. Name of the Directors
No.

3.8
(-
)

Tenure of membership
From
To

Shri S. A . Bhat

04.06.2007

Shri.M.Narendra

01.11.2010

Shri Y L Madan

30.05.2008

Smt. Nupur Mitra

07.12.2009

31.10.2010

Number of
Meetings
attended
01/01
02/02

31.08.2010

01/01
03/03

Shri A.K.Bansal

01.09.2010

02/02

Shri B V Appa Rao

09.12.2008

03/03

Shri Sooraj Khatri

29.05.2010

03/03

3.8 REMUNERATION COMMITTEE:

Remuneration (excluding performance linked
incentive) payable to the whole time directors is
decided by the Central Government. The Bank
does not pay any remuneration to other directors
except sitting fees as per directives of Central
Government.

, ( )
..20/01/2005--1, 09.03.2007
-
-
- -

A Remuneration Committee, a Sub-Committee of

the Board of Directors, has been constituted for
evaluating the performance in terms of
government guidelines and to recommend
payment of performance-linked incentives to the
whole time directors of the Bank, in terms of
Government of India, Ministry of Finance (Banking
Division) letter F. No. 20 / 1 / 2005 BO-I dated
09.03.2007.

:
1. .
2. ..
3. . .
4.

The members of the Committee are :1.

2.
3.
4.

21.08.2010

Dr. Vinita Kumar

Shri.S.V.Raghavan
Shri A.K. Bhargava
Shri Sooraj Khatri

The Committee met once on 21.08.2010 and all

members of the Committee have attended the
meeting.

3.9

3.9 NOMINATION COMMITTEE :

. .47 /
29.39.001 / 2007-08 01.11.2007
16.10.2006 (
) 1970
" "

RBI, vide circular ref: DBOD. No. BC. No.47 /

29.39.001 / 2007-08 dated 01 11 2007, pursuant to
the amendment in The Banking Companies
(Acquisition and Transfer of Undertakings) Act,
1970 effective 16.10.2006, has issued necessary
guidelines for determining the authority,

69

, / -

manner/procedure and criteria for deciding the 'Fit

and Proper' status etc., while appointing the
Directors.
RBI has directed that the Fit and Proper criteria,
as of now, be made applicable to the elected
directors (Shareholder directors) both present
and future.
The committee would be constituted at an
appropriate time.

" "
( ) -


4.
.

4. SHAREHOLDERS' COMMITTEES:
a. Shareholders Grievance Committee:

2001

27.09.2010

The Shareholders Grievance Committee,

constituted in April 2001, was last reconstituted by
the Board on 27.09.2010.

.
01.04.2010 31.03.2011
4

-

At present, the Chairman of the Committee is Shri A

Vellayan and the other members are two directors
nominated by the Board. The committee met 4
times during the period 01.04.2010 to 31.03.2011.
All the meetings were conducted with proper
quorum and without any adjournments. The
number of meetings attended by each committee
member during the year is as follows:
Sl. Name of the Directors
No.

Tenure of membership
From

1.

Shri A.Vellayan

08.12.2008

2.

Shri Y L Madan

29.05.2008

3.

Smt. Nupur Mitra*

07.12.2009

4.

Shri A.K.Bansal**

01.09.2010

Dr. Chiranjib Sen

08.12 .2008

To

Number of
Meetings
attended
3/4

31.08.2010

1/1
3/3
3/4

* .. ,

* Appointed to attend meetings as a member of the

Shareholders Grievance Committee In the
absence or inability of Sri Y L Madan, ED to attend
meetings.

** ,

** Appointed to attend meetings as a member of

the Shareholders Grievance Committee In the
absence or inability of Smt. Nupur Mitra, ED to
attend meetings.

. ,

The Shareholders' Grievance Committee

appointed a Practicing Company Secretary, Shri V
Suresh, to undertake the Secretarial Audit in the
office of the Registrar, at periodical intervals to
verify the methodology followed by them involving
Shareholders Grievances & Redressal system etc.
The committee considers his quarterly reports at
every meeting.
b. Share Transfer Committee:

.

,

Share Transfer Committee consists of the

Chairman and Managing Director or in his

70

 , ,
, , /
22

absence the Executive Director, one shareholder

Director and one Director nominated by the Board.
The committee deals with all matters connected
with share transfers, transmission, issue of
duplicate share certificates, transposition, demat /
remat etc., The committee met 22 times during the
year and all the meetings were conducted with
proper quorum and without any adjournments.

The number of meetings attended by each

committee member during the year is as under:
Sl.
No.

Name of t he Directors

1.
2.

Shri Y L Madan
Smt. Nupur Mitra*
Shri A.K.Bansal* *
Dr. Chiranjib Sen
Shri K. Ananda Kumar

3.
4.

* . . . . ..,

Tenure of membership
From

To

29.05.2008
07.12.2009
01.09.2010
04.05.2009
30.03.2010

31.08.2010

Number of
Meetings
attended
8/8
13/13
1/1
10/22
20/22

*Appointed to act as Chairman of the Share

Transfer Committee In the absence or inability of
CMD or Sri Y L Madan, ED to attend Meetings.

**. . . . ,

**Appointed to act as Chairman of the Share

Transfer Committee In the absence or inability of
CMD or Smt. Nupur Mitra, ED to attend Meetings.
The Share Transfer Committee appointed a
Practicing Company Secretary, Shri V. Suresh, to
undertake the Secretarial Audit in the office of the
Registrar, to verify the methodology followed by
them involving share transfer, transmission,
consolidation, split, issue of duplicate certificates
etc., His assignment commenced on 01.01.2005
and his fortnightly reports are considered at every
meeting of the Committee. No request for transfer
is pending for more than one month.

, , , ,


.
01.01.2005


. :

c. Share Allotment Committee

Share Allotment Committee has been constituted
for allotment of Equity shares to Government of
India on Preferential basis and the Board of
Directors of the Bank at their meeting held on
19.02.2011 had authorized a committee of the
following Directors:

19 02
2011
:
1. .,
2. -
..
3. . -
4. .. -

1) Shri.M.Narendra Chairman and Managing

Director
2) Smt.Nupur Mitra Executive Director or
Shri.A.K.Bansal Executive Director in the
absence or inability of Smt.Nupur Mitra to attend
3) Shri.K.Ananda Kumar Director
4) Shri. B.V.Appa Rao - Director

71



24 03 2011
. :

The Chairman of the committee is the CMD of the

Bank and the committee met once on 24.03.2011
to consider and approve allotment of shares to
Government of India on preferential basis.
c. Compliance Officer :

47 ..,
, ,

In terms of clause 47 of the listing agreement,

Shri A P Singh, General Manager and Company
Secretary is the Compliance Officer for the purpose
of complying with the various provisions of SEBI,
Stock Exchanges etc.

d. Shareholders Complaints:

Number of complaints received, resolved

and pending during the year:

SL
NO. NATURE OF COMPLAINT

PENDING

RECEIVED REDRESSED

AS ON
01.04.2010
1
2
3

Non receipt of refund order

and Share certificates

PENDING
AS ON
31.03.2011

Nil

40

40

Nil

Non receipt of Dividend

Nil

923

923

Nil

Complaints to SEBI / Stock

Exchange s and Consumer
Redressal Forum

Nil

26

26

Nil

Miscellaneous (complaints reg.

change of address, bank
mandate, demat requests etc.)

Nil

49

49

Nil

Total

Nil

1038

1038

Nil

e. In terms of clause 47(f) of the listing agreement

we have advised the shareholders that an exclusive
e-mail ID - [email protected] has been
allotted and our General Manager and Company
Secretary Shri A P Singh, is also the Compliance
Officer for the purpose of registering and redressal
of complaints by investors. We have displayed this
email ID and other relevant details prominently on
our website. The Investor Relations Cell headed by
an Assistant General Manager handles the
redressal of investor complaints.

47( )

[email protected]
..

5. Other Committees:
There are various other committees such as Asset
Liability Management Committee, Investment
Review Committee, Top Management Committee
comprising CMD, ED and GMs along with
Department Executives, which have been
constituted for the day to day functioning, review
and monitoring of various aspects of business.

5.
,
,

,

6. GENERAL BODY MEETING:

6.
. :

a. Location and time where last three General Body

Meetings were held:

72

Sl.
No.

Nature of
Meeting

Date, Day and time

of Meeting

Venue

01

8 th AGM

14.06.2008 Saturday
11.00 A.M.

Narada Gana Sabha

314 TTK Road, Chennai 600 018

02

9 th AGM

04.07.2009 Saturday
11.00 A.M.

Narada Gana Sabha

314 TTK Road, Chennai 600 018

03

10 th AGM

20.07.2010 Tuesday

Narada Gana Sabha

11.00 A.M.

314 TTK Road, Chennai 600 018

10

b. No special resolutions were put through in the

last three AGMs

.
.
. :

c. There was no postal ballot exercise.

d. Location and time where Extra Ordinary
General Body Meetings were held:
Sl.
No.

7.
.
2009-10
:

Nature of
Meeting

Date, Day and time of

Meeting

Venue

1.

1 st EGM

07.12. 2002 Saturday

11.00 A.M.

Rani Seethai Hall

603, Anna Salai, Chennai -600 006

2.

2 nd EGM

30.11.2005 Wednesday
11.00 A.M.

Rani Seethai Hall

603, Anna Salai, Chennai -600 006

3.

3 rd EGM

25.11.2008 Tuesday
11.00 A.M.

Narada Gana Sabha

314 TTK Road, Chennai-600 018

4.

4 th EGM

22.03.2011 Tuesday
11.00 AM

Narada Gana Sabha

314 TTK Road, Chennai-600 018

7. DISCLOSURES:
a. The remuneration of the Chairman & Managing
Director and the Executive Directors is fixed by
the Central Government. Details of
remuneration paid to Whole Time Directors
during the year 2009-10 are as follows :
Sl. Name
No.

Designation

Details of
Remuneration

1.

CMD(Retired)

Salary & Allowances

8,31,200.00

Encashment of leave
on retirement

5,02,667.00

Shri S A Bhat

Gratuity

2,00,000.00

2.

Shri M Narendra

CMD

Salary & Allowances

5,85,125.00

3.

Shri Y L Madan

ED (Retired)

Salary & Allowances

5,07,284.50

Encashment of leave
on retirement

1,58,263.10

Gratuity

. .

,

. 5000/-
. 2500/-

Amount
(Rs.)

68,960.00

4.

Smt Nupur Mitra

ED

Salary & Allowances

12,37,503.00

5.

Shri A K Bansal

ED

Salary & Allowances

7,50,250.00

The Bank does not pay any remuneration to the

Independent Directors excepting sitting fees as per
the Govt. of India guidelines, for Board Meetings
Rs. 5000/- per meeting and for Committee
meetings Rs. 2500/- per meeting.

73

b. Disclosures as to Related Party Transactions

of Key Managerial Personnel i.e. Whole Time
Directors are being reviewed on a half yearly
basis by the Audit Committee of the Board.

. ,

c. There are no significant related party

transactions of the Bank with its subsidiaries,
directors, management or their relatives etc
that would have potential conflict with the
interests of the Bank at large.

. / /
31.03.2011

d. No penalties were imposed or strictures

passed on us by Stock Exchanges/SEBI /any
statutory authority on any matter related to
capital markets during the last three years
ended 31.03.2011.

e. Presently the Bank does not have a Whistle

Blower policy. However no
persons have
been denied access to the Audit Committee.

. /
/ /

. -

. 49
-

f.

The Bank has complied with all the mandatory

requirements to the extent provided for in the
statutes/guidelines/directives issued from
time to time by the RBI/Government of India to
the nationalized banks.

g.

The Non Mandatory requirements have been

adopted as stated in this report against the
relevant items.

h. The Certificate of CEO and CFO under clause

49 of the listing agreement has been
submitted to the Board of Directors of the Bank
and a copy is attached to this report.

. 49 2010-11

-

I.

8.

In terms of clause 49 of the listing agreement, a

certificate has been obtained from the
statutory central auditors on corporate
governance in the Bank for the year 2010-11
and the same is annexed to this report.

8. MEANS OF COMMUNICATION:

a. The quarterly un-audited financial results of the

Bank are approved by the Board of Directors
and the same are submitted within the
stipulated period to all the stock exchanges
where the Bank's shares are listed. The Bank
has been sending half yearly results to all the
shareholders.

. 41


:

b. The quarterly financial results are published in

a national daily and a regional vernacular daily
in terms of Clause 41 of the listing agreement.
The details and dates of publication are as
under:

74

Quarter
ended

. www.iob.co.in

9.
. : , :

English Daily

Regional Daily

Date of
publication

31.03.2010

The New Indian Express Dinamani (Tamil)

30.04.2010

30.06.2010

The Financial Express

Dinamani (Tamil)

01.08.2010

30.09.2010

The Hindu Business Line

Dinathanthi (Tamil)

30.10.2010

31.12. 2010

The Hindu Business Line

Dinathanthi (Tamil)

29.01.2011

c. The quarterly results are also being displayed

on the Bank's web-site www.iob.in.
9. GENERAL SHAREHOLDER INFORMATION:
a. AGM: Date, Time and Venue:
Date

12.07.2011

Time

10.00 A.M.

Venue

Chennai

b. Financial Year:

. :

01st April 2010 to 31st March 2011

1 2010 31 2011

c. Date of Book Closure:

. :

06.07.2011 to 12.07.2011 (Both days inclusive)

for determining eligibility for the purpose of
dividend.

06.07. 2011 12.07.2011( )

d. Dividend Payment Date:

. :

On or after 22.07.2011 subject to declaration of

dividend by shareholders.

22.07.2011

e. Unpaid Dividend:

The Banking Companies (Acquisition and

Transfer of Undertakings) and Financial
Institutions Laws (Amendment) Act, 2006 which
has come into force on 16.10.2006, has inserted
a new section 10(B) in the Banking Companies
(Acquisition and Transfer of Undertakings) Act
1970 which provides as under:

16 10 2006 (
) ()
2006 ( )
1970 10 ()
:

Within 7 days from the expiry of 30 days

from the date of declaration, if any
shareholder has not encashed /claimed
the dividend, such amounts lying in the
bank current account, have to be
transferred to a separate account styled
"Unpaid Dividend Account of IOB for the
year _____

30 7 ,
/
, ,
.........



, 1956 205(1)
()

Any money transferred to the Unpaid

Dividend account which remains unpaid
or unclaimed for a period of seven years
from the date of such transfer, shall be

75


:

,
:

transferred to the Investor Education and

Protection Fund established under Sec
205(1)(C) of the Companies Act 1956.
Accordingly, the unpaid dividend of previous
years has been transferred to Unpaid Dividend
Account/s of IOB as follows and hence such
monies, which remain unpaid or unclaimed for a
period of seven years from the date of such
transfer, shall be transferred to the Investor
Education and Protection Fund:

.
:

Dividend for

Date of Transfer to
Unpaid Dividend A/c

2000 - 01

08.12.2006

2001 - 02

05.12.2006

2002 - 03

05.12.2006

2003 - 04 (I)

04.12.2006

2003 - 04 (F)

04.12.2006

2004 - 05 (I)

09.12.2006

2004 - 05 (F)

05.12.2006

2005 - 06

04.12.2006

2006 - 07

13.07.2007

2007 - 08

19.07.2008

2008 - 09

11.08.2009

2009 - 10

26.10.2010

f. The Bank's shares are listed on the following

Stock Exchanges:
Name of the Stock Exchange

Stock Code

Madras Stock Exchange Ltd.**

IOB

Bombay Stock Exchange Ltd.

National Stock Exchange
of India Ltd.

** 14 2008 8


2008

532388
IOB EQ AE BE BT

** The shareholders of our Bank at the 8th Annual

General Meeting held on 14th June, 2008 had
unanimously passed a resolution approving the
delisting of the Bank's shares from Madras Stock
Exchange Limited. An application for delisting of
the Bank's shares has accordingly been submitted
to MSE in 2008 and the same is being processed
by MSE.

2010-11

,

76

 , 2010- 11

Annual listing fee for the year 2010-11 has been

paid to the stock exchanges except Madras Stock
Exchange within the prescribed due dates. As our
delisting application is still pending with Madras
Stock Exchange, Chennai, Annual Listing Fee for
the year 2010-11 has not been paid.

( )
1970/1980 3(2)
3123 3124 10
2009 . 1500
. 3000 : 10
2009 . 1500 .
3000

Increase in Authorised Capital

Pursuant to Section 3 (2-A) of the Banking
Companies (Acquisition and Transfer of
Undertakings) Act, 1970/1980, the Government of
India has, vide GOI Notification S.O. No. 3123 and
S.O. No. 3124 dated November 10, 2009,
increased the Authorised Capital of Nationalized
Banks from Rs. 1500 crore to Rs. 3000 crore. Thus
with effect from November 10, 2009, our Bank's
Authorised Capital of Rs. 1500 crore stands
increased to Rs. 3000 crore.

.1054 (
) .142.53
(.132.53 ) 7,39,49,343
.10
: .544.80 .618.75
.333.60
(61.23%) .407.55 (65.87%)

Increase in Paid-up Capital:

The Bank has issued 7,39,49,343 Equity Shares, of
face value Rs. 10.00 each, at the rate of Rs. 142.53
per share (including premium of Rs. 132.53 per
share) aggregating to Rs. 1054.00 crore(Rupees
One Thousand Fifty Four Crore Only) to
Government of India on Preferential Basis. Hence,
the Paid-up Capital of the bank has increased from
Rs. 544.80 crore to Rs. 618.75 crore and
Government of India's shareholding has increased
from Rs. 333.60 crore (61.23%) to Rs. 407.55 crore
(65.87%) into the Bank.

g. Market price data:

Period Month
Apr 2010

National Stock Exchange

High (Rs)
Low (Rs)
104.00

92.00

May 2010

97.20

Jun 2010

106.80

Jul 2010

Bombay Stock Exchange

High (Rs) Low (Rs)
104.00

91.20

87.25

97.25

87.35

87.45

106.70

87.40

117.60

102.50

117.50

95.10

Aug 2010

137.20

108.60

137.00

105.05

Sep 2010

143.90

124.30

144.00

124.20

Oct 2010

173.25

131.60

173.40

132.00

Nov 2010

180.00

131.20

176.35

131.00

Dec 2010

159.85

126.65

159.75

126.45

Jan 2011

150.20

121.00

150.35

121.30

Feb 2011

154.20

116.40

139.00

116.50

Mar 2011

152.05

134.00

152.00

134.00

Figures in bold represent the high / low price of the

Bank's shares during the year 2010-11 on the
respective Stock Exchanges.

2010-11
/

77

01-04-2010 31-03-2011

h. Equity performance in comparison to BSE

Sensex during 01.04.2010 to 31.03.2011

Equity Performance in comparison to BSE Sensex

01.04.2010 to 31.03.2011

22000
190
20000
170

130

14000

110

12000

Sensex close on
the same day

Share Price High

for the month

ar

6000

Fe
b

50

D
ec

8000

O
ct

70

ug

10000

Ju
ne

90

sensex

16000

pr
il

SHARE PRICE

18000
150

MONTH

01-04-2010 31-03-2011

Equity performance in comparison to NSE

Nifty during 01.04.2010 to 31.03.2011

Equity Performance in comparison to NSE Nifty

during 01.04.2010 to 31.03.2011
6500
190
6000
170

130

4500

110

4000

90

3500

70

3000

78

Mar

Jan

Feb

Dec

2500

Nov

Oct

Aug

July

June

May

Sept

MONTH

50

Nifty

5000

April

SHARE PRICE

5500
150

Share Price high

for the month
Nifty close on the
same day

. :
.
( - ) ,
.1, - 600 002
- 044-28460395, 28460084, - 28460129
. : [email protected]

I. Registrar & Transfer agent:

M/s. Cameo Corporate Services Ltd.
(Unit-IOB) Subramanian Building, I Floor
No.1 Club House Road
Chennai-600 002
Tel: 044-28460395; 28460084 Fax: 28460129
e-mail:[email protected]

. :

j. Share Transfer System:

, , , ,
, , ,


( .
) ( )

. 31.03.2011 :

Our bank has a Sub-Committee of the Board for

considering the requests received from
shareholders for transfer, transmission,
transposition, issuance of duplicate share
certificates, splitting, consolidation, remat, name
change etc. The Chairman and Managing Director
or in his absence the Executive Director is
Chairman of the Committee. The other members of
the committee are: a Shareholder Director (Dr.
Chiranjib Sen) and a Director nominated by the
Board (Shri K Ananda Kumar).
k. Distribution of shareholding as on 31.03.2011:
Sl.
No

Category

No. of Shares

% of share
holding

Government of India

407549343

65.87

Sub -Total

407549343

65.87

PROMOTERS HOLDING
1

NON - PROMOTERS HOLDING

2

Institutional Investors
A Mutual funds and UTI
B Banks, Financial Institutions
C Insurance Companies

122162545

19.74

D Foreign Institutional Investors

Sub -Total
3

89037455

14.39

1.20
11.70

3594712

0.58

38759872

6.26

122162545

19.74

OTHERS
A Private Corporate Bodies

16136451

2.61

B Individuals

68009675

10.99

4891329

0.79

Sub -total

89037455

14.39

GRAND TOTAL

618749343

100.00

C Others

. 31.03.2011 :

7443456
72364505

l. Distribution schedule as on 31.03.2011

% to total no. of Shareholding in terms Share Amount % to total
No. of
shareholders
share
of nominal value of
(Face Value)
holders
Rs.10/191149
87.57
Upto 5000
334500980
5.41
19312
8.85
5001 10000
161588700
2.61
5142
2.36
10001 20000
72498420
1.17
967
0.44
20001 30000
24030670
0.39
464
0.21
30001 40000
16514880
0.27
267
0.12
40001 50000
12530460
0.20
407
0.19
50001 100000
29355710
0.47
557
0.26
5536473610
89.48
100001 and above

218265

79

100.00

TOTAL

6187493430

100.00

. 31.03.2011

m. Foreign Shareholding as on 31.03.2011

Sl. Category
No.

As on 31.03.2010
No. of shares

Foreign Institutional
Investors (FIIs)

OCBs

NRIs
Total

As on 31.03.2011

% To total
capital No. of shares

% To total
capital

46099394

8.46

38759872

48000

0.01

48000

6.26
0.01

4433117

0.81

3547792

0.57

50580511

9.28

42355664

6.84

As detailed in the above table, the total foreign

shareholding (FIIs, OCBs, NRIs) as at 31.03.2011
was 6.84% which is within the stipulated level of
20% of the total paid up capital of the Bank.

31.03.2011
(, , )
6.84% 20%

n. Top five shareholders of the bank as on

31.03.2011:

. 31.03.2010

Sl.
No

. - :

Name of the Shareholders

HE The President of India The Government of India

No of shares held

% of total
holding

407549343

65.87

Life Insurance Corporation of India

43731960

7.07

LIC of India Market Plus

9891423

1.60

Life Insurance Corporation of India

Profit Plus

6915555

1.12

Fidelity Investment Trust

Fidelity Emerging Markets Fund

5515424

0.89

o. Dematerialization of shares:
The shares of the Bank are under compulsory
demat trading. The Bank has joined as a member
of the depository services with National Securities
Depository Limited (NSDL) and Central Depository
Services (India) Limited (CDSL) as an issuer
company for dematerialization of the Bank's
shares. Shareholders can get their shares
dematerialized with either NSDL or CDSL. The
depository services have allotted the following ISIN
code to the Bank: INE565A01014.

. . ( )
( ) . ( )


- 565 01014
31.03.2011 61.87 , 51.02
82.45% (
33.36
61.23% ) 10.86 17.55%
( 25 04 2011 7.39
)

As on 31.3.2011, out of 61.87crore equity shares,

51.02 crore shares or 82.45% are held by the
shareholders in Demat form (of which Government
of India holds 33.36 crore shares in Demat form,
aggregating to 61.23% - GOI's shareholding was
dematerialized in March 2008) and 10.86 crore
shares or 17.55% are in physical form (of which
Government of India holds 7.39 crore shares in
Physical form since dematerialized on 25.04.2011).

. //
,
:

p. Outstanding GDRs/ADRs/Warrants or any

convertible instruments, conversion date
and likely impact on equity:
The bank has not issued any GDRs /ADRs /
Warrants or any convertible instruments.

//

80

. -
:31-03-2011
:

q. The bank has raised non-convertible bonds

in the nature of promissory notes from time to
time. The details of such bonds outstanding
as on 31.03.2011 are as follows:
Date of
Size
Allotment (Rs in crores)

Series

Tenor
(In Months)

Coupon
(%)

Redemption
Date

Tier II
v
vi
vii
viii
ix
x
xi
xii
xiii
Xiv
BhoB **

01.03.2004
26.07.2004
08.01.2005
16.09.2005
09.01.2006
13.03.2006
26.07.2006
22.08.2008
24.08.2009
31.12.2010
20.03.2004

200.00
200.00
150.00
200.00
250.00
300.00
500.00
300.00
290.00
1000.00
36.00

120
120
123
123
123
120
120
120
120
120
87

06.00
06.40
07.25
07.40
07.70
08.00
09.10
10.85
08.48
08.95
07.00

05.09.2006
17.09.2008
01.09.2009
10.01.2011

500.00
655.30
510.00
967.00

@180
@180
@180
@180

09.24
11.05
08.80
09.00

31.03.2006
18.05.2006
30.09.2006
29.09.2009

200.00
200.00
80.00
300.00

@Perpetual
@Perpetual
@Perpetual
@Perpetual

09.30
09.15
09.20
09.30

TOTAL

6838.30

Upper Tier II
i
ii
iii
iv

Call Option date

Tier I (Perpetual)
i
ii
iii
iv

01 03.2014
26.07.2014
08.04.2015
16.12.2015
09.04.2016
13.03.2016
26.07.2016
22.08.2018
24.08.2019
31.12.2020
20.06.2011

@05.09.2016
@17.09.2018
@01.09.2019
@10.01.2026
Call Option date
@31.03.2016
@18.05.2016
@30.09.2016
@29.09.2019

@Call option available at the end of 10 years (with

the prior approval of RBI). If the call option is not
exercised, the coupon rate will be stepped up by 50
bps.

@ 10 (
)
50

** Being Tier II Bonds issued by Bharat Overseas

Bank Ltd.(Bhob), since taken over by IOB
consequent to merger of Bhob with IOB. The
present outstanding as on 31.03.2011, is after
setting off our investment of Rs. 4 cr in the said
issue, at the time of the merger.
r. Address for Correspondence:

*
()
II 3103-2011 .4

. :
,

.
,

.
( - ) , I
.1, , - 600 002
- 044 - 28460395, 28460084, - 28460129
. : : [email protected]




, 763 , -600 002
: 044 - 28519491, 28415702, 28889392
: 044 - 28585675, . : [email protected]
[email protected]

Share transfers, dividend payment and all other

investor related activities are attended to and
processed at the office of M/s. Cameo Corporate
Services Ltd., Registrars & Share Transfer agents.
Shareholders may lodge the transfer deeds and
any other documents, grievances and complaints
at their address:
M/s. Cameo Corporate Services Ltd.
(Unit-IOB) Subramanian Building, I Floor
No.1 Club House Road, Chennai-600 002
Tel: 044-28460395; 28460084 Fax: 28460129
email:[email protected]

The Bank has an Investor Relations Cell at its

Central Office, to deal with the services and
complaints of the shareholders at the following
address:
Indian Overseas Bank
Investor Relations Cell
Central Office, 763, Anna Salai, Chennai-600 002
Tel: 044-28519491, 28415702, 28889392
Fax : 044-28585675, email: [email protected]
/ [email protected]
81

B. NON MANDATORY REQUIREMENTS:

Non Mandatory
Our Adoption
Requirements

. -

The Board Maintenance

of an office by a non
executive Chairman at the
company's expense

Since the Chairman and

Managing Director in our
Bank is an Executive
Chairman, this clause is
not applicable to us

Remuneration Committee

Remuneration payable to
the whole time directors is
decided by the Central
Government and the Bank
does not pay any
remuneration to other
directors except sitting
fees as per guidelines of
Central Govt.The Board in
its meeting held on
22.03.2007, has set up a
R e m u n e r a t i o n
Committee as per details
furnished hereinbefore
(refer para 3.8).

Shareholders Rights

All the shareholders are

provided with the Half
Yearly results and Annual
Report.

Audit Qualification

Constant efforts are being

made to move towards a
regime of unqualified
financial statements.

Tr a i n i n g
Members

Board

The Board members are

imparted training by
nominating them for
training programmes at
reputed training institutes.
Each director is provided
with a reference manual
detailing his or her roles
and responsibilities and
matters of importance.

Mechanism for evaluating

non executive Board
Members

The Bank does not have

such mechanism, as
presently it is not
applicable to us.

of

Whistle Blower Policy

Presently the Bank does

not have a Whistle Blower
p o l i c y. H o w e v e r n o
persons have been denied
access to the Audit
Committee.
For and on behalf of the Board of Directors

02 2011

(. )

Chennai
02nd May 2011

82

(M Narendra)
Chairman and Managing Director

 2010-11

ANNEXURE TO REPORT OF
THE BOARD OF DIRECTORS ON CORPORATE
GOVERNANCE FOR THE YEAR 2010-11
DIRECTORS PROFILE

01

.

57 - 12 07 1954
., .,

01 Name

Shri. M.Narendra
Chairman and Managing Director

Age and Date of Birth 57 years 12.07.1954

Qualification

B.Com., B.L , CAIIB

Date of Appointment 01.11.2010

01.11.2010

Date of expiry of the

31.07.2014

Current term

31.07.2014

35
. 1975

06 2008

, ,

/


1984-85 1990-91








3

Experience

Having 35 years of banking

experience. Shri M Narendra joined
Corporation Bank as an officer
trainee in 1975. He took over as
Executive Director, Bank of India,
on 6th November 2008 and held
this position, till his present
assignment at Indian Overseas
Bank.
Shri Narendra has been one of the
key members of the teams to
implement Organisational
Transformation Projects in both
Corporation Bank and Bank of
India.
Shri Narendra has travelled widely
both within the country and
outside. He has undergone various
training programmes including
workshops/seminars at BTC, IIMAhmedabad and Bangalore, NIBM
and Australian Institute of Banking
& Finance.
Shri Narendra secured various
Corporate Awards instituted by
Corporation Bank such as
Chairman's Club Membership
recipient for 8 consecutive years
from 1984-85 to 1990-91, SoGian
Award and Regional Leadership
Award.In his capacity as Executive
Director of Bank of India, he was
the nominee director on the Board
of Indo Zambia Bank Limited,
Lusaka, Zambia, a joint venture,
Commercial Bank between 3
Indian Public Sector Banks and
Government of Zambia.
He is a member of Technical
Advisory Committee on Money,
Foreign Exchange & Government
Securities Market constituted by
Reserve Bank of India. He was a
member of Standing Committee on
Risk Management & Basel II
Implementation constituted by the
Indian Banks Association.

83

02

58 - 08.12.1952
,

03

Shareholding in IOB Nil

Other Directorships

02. Name

Nominee Director of IOB in

Universal Sompo General
Insurance Co. Ltd.
Smt. Nupur Mitra
Executive Director

Age and Date of Birth 58 years - 08.12.1952

Qualification

B.Sc., L.L.B.

Date of Appointment 07.12.2009

07.12.2009

Date of expiry of the

31.12.2012

35
1975



2001



,

, ,
( ), ,
,

Current term

31.12.2012

Experience

Having 35 years of experience in

banking field.
She joined Bank of India in 1975 as
Direct Recruit Officer. She served
in various capacities at Branches
and Zonal Offices. She moved
over to head London Branch in mid
2001 and thereafter she was Chief
Executive of Europe Operations.
She was General Manager at the
Corporate Office of Bank of India, in
charge of Credit, SME, Retail
Banking (Deposit & Advances),
Card Products, Public Relations,
Depository Services etc. until her
appointment in IOB as its Executive
Director.

..

58 22.05.1953
, -

Shareholding in IOB

Nil

Other Directorships

Nil

03 Name

Shri A.K.Bansal
Executive Director

Age and Date of Birth 58 Years 22.05.1953

Qualification

01.09.2010

P o s t G r a d u a t e
Agriculture,CAIIB Part I

i n

Date of Appointment 01.09.2010

Date of expiry of the

31.05.2013

34
.. ,
..


1976

23

Current term

31.05.2013

Experience

Having 34 years of experience in

banking field.
Shri A. K. Bansal is a Post
Graduate in Agriculture from the
renowned G B Pant Agriculture
University, Pant Nagar, Nainital
and recipient of ICAR Junior
Research Scholarship. He joined
Union Bank of India as
Agricultural Field Officer at the
age of 23 years in the year 1976.
He was awarded Super Achiever
and Star Performer status by the

84

Bank in the year 1994 for his

outstanding performance at the
first Specialized SSI Branch of the
bank at Ahmedabad.

Shri Bansal was also conferred

with the Chairman Club
Membership by the Chairman &
Managing Director of the Bank as
recognition of his outstanding
performance in the very first year of
implementation of the scheme.

-
()

Shri Bansal is a Committee

Member in the Apex Advisory
Committee of SIDBI Innovation
and Incubation Centre (SIIC) in IIT
Kanpur.

04

.

56 - 25.12.1954
., .. (),
(1977)

Shareholding in IOB Nil

Other Directorships
04 Name

Dr. Vinita Kumar

GOI Nominee

Age and Date of Birth 56 years - 25.12.1954

Qualification

Ph.D, M.A.(Eco), Indian

Economic Service (1977)

Date of Appointment 10.06.2008

10.06.2008

Date of expiry of the

,
,



- (1)
" :
(1960-65)" . (2)
" :

"

Current term

Until further orders from Govt. of

India

Experience

She is presently Advisor, Ministry

of Labour and Employment,
Govt. Of India
She held the position of Economic
Advisor, Department of Financial
Services, Ministry of Finance,
Government of India and also
Additional Economic Advisor,
Dept. of Commerce.
She has authored two books (1)
Economic Growth and Rural
Poverty:The Indian Experience
(1960-65) and (2) Learning to
Share: Experiences and
Reflections on PRA and
Community Participation

Shareholding in IOB Nil

Other Directorships

05

Nil

..

57 - 19.11.1953
..., ...,
, .

05 Name

Nil

Shri.S.V.Raghavan
RBI Nominee
Age and Date of Birth 57 years - 19.11.1953
Qualification
B.Sc., M.B.M., CAIIB, M.A
Date of Appointment 30.07.2010
Date of expiry of the
Current term
Until further orders from Govt.Of
India
Experience
He is currently Chief General
Manager, Central
Accounts

30.07.2010

()
85


.. 1982


, - ,

, ,



,
,

06

07

Section (CAS) at Reserve Bank of

India, Nagpur.
Shri.S.V.Raghavan joined RBI in
1982 and has worked in the
Department of Banking
Supervision, Department of NonBanking Supervision, Banking
Department and Issue
Department at various Regional
Offices of RBI and in the
Department of Currency
Management and Department of
Banking Supervision at RBI's
Central Office in Mumbai.
Immediately prior to his present
assignment, he was Chief General
Manager in-Charge of
Department of Government and
Bank Accounts at RBI's Central
Office in Mumbai.
Shareholding in IOB Nil
Other Directorships Nil
06 Name

Shri. Sridhar Lal Lakhotia

Workmen Employee Director

57 - 11.10.1953
..,

Age and Date of Birth 57 years - 11.10.1953

Qualification

09.08.2010

B Com.,

Date of Appointment 09.08.2010

Date of expiry of the

08.08.2013 ..



22.07.1975
36
-

400

Current term

08.08.2013 or until he ceases to be

a workmen employee of IOB or
until further orders, which ever is
the earliest.

Experience

He joined the Bank on 22.07.1975

and is having about 36 years of
banking experience in IOB. He is
presently a Special Cadre
Assistant attached to KolkataChowringhee

Shareholding in IOB 400 shares

Other Directorships

.

55 - 30.08.1955
., ...,

07 Name

Nil
Shri K. Ananda Kumar
Officer Employee Director

Age and Date of Birth 55 years - 30.08.1955

Qualification

B Com., A.C.A., CAIIB

Date of Appointment 26.03. 2010

26.03.2010

Date of expiry of the

25.03.2013 ..



14.12.1981

86

Current term

25.03.2013 or until he ceases to

be an officer of IOB or until
further orders, whichever is the
earliest.

Experience

Joined the Bank on 14.12.1981.

.. 29
..

2400

Possesses 29 years experience.

At present a Senior Manager in
IOB.
Shareholding in IOB 2400 shares
Other Directorships Nil
08 Name

08

09

10

..

60 - 06.06.1950
.,

Shri B V Appa Rao

Part Time Non Official

Age and Date of Birth 60 years - 06.06.1950

Qualification

B.Com., FCA

Date of Appointment 29 08 2008

Date of expiry of the

29. 08. 2008

28 08 2011

1980


6


7
1994
,

Current term

28 08 2011

Experience

A qualified Chartered Accountant

in 1980, Shri B V Appa Rao,
joined Andhra Bank as Officer
and served for 6 years. Leaving
Andhra Bank, he joined M/s The
Andhra Sugars Limited of Andhra
Pradesh in the Senior
Management and served for 7
years. He is presently a Senior
Partner in M/s B.V. Rao
Associates, Chartered
Accountants, Guntur started in
the year1994.

Shareholding in IOB Nil

Other Directorships

55 - 06.08.1955
, ,

Nil

09 Name

Shri Sooraj Khatri

Part Time Non Official
Age and Date of Birth 55 years 06.08.1955
Qualification
B.Sc., L.L.B., Dip. In Labour Law
Date of Appointment 26.10.2009
Date of expiry of the
Current term
25.10.2012
Experience
Practicing legal profession as an
Advocate in Rajasthan High Court.
He is also a Journalist, Editor and
Publisher.
Shareholding in IOB Nil
Other Directorships Nil

26.10.2009
25.10.2012

67 - 10.05.1943
., ..., .....,

10 Name

Shri Ashok Kumar Bhargava

Shareholder Director

Age and Date of Birth 67 years - 10.05.1943

Qualification

B.Com, L L B., CAIIB

Date of Appointment 08.12.2008

08.12.2008

Date of expiry of the

07.12.2011

87

Current term

07.12.2011

Experience

Retired as General Manager of

Punjab National Bank. A

11

12

40


500


(
)

professional banker with 40 years

of experience. He is at present a
Management and Financial
Consultant.
Shareholding in IOB 500 shares
Other Directorships

SMC Power Generation Limited

DARCL Logistic Limited (formerly
known as Delhi Association
Roadways Corporation Limited)
Tr a n s r a i l L o g i s t i c s L i m i t e d
Escorts Investment Trust Ltd.

11 Name

Dr. Chiranjib Sen

Shareholder Director
Age and Date of Birth 64 years - 29.09.1946
Qualification
M.A(Econ), Ph D
Date of Appointment 08.12.2008
Date of expiry of the
Current term
07.12.2011
Experience
Professor of Economics in the
Indian Institute of Management,
Bangalore and a visiting Professor
of about 13 universities in India and
abroad.
Shareholding in IOB 150 shares
Other Directorships K I O C L L i m i t e d ( f o r m e r l y
Kudremukh Iron Ore Company
Limited)

.

64 - 29.09.1946
(), .
08.12.2008
07.12.2011

,

13

150
(
.)
.

12 Name

Shri A Vellayan
Shareholder Director

Age and Date of Birth 58 years - 09.01.1953

58 - 09 01 1953
., .

Qualification

B.Com, Masters in Business

Studies, University of Warwick
Business School, UK

Date of Appointment 08.12.2008

Date of expiry of the

08.12.2008

07.12.2011

.

, .




, ,
, , , ,
, , ,

88

Current term

07.12.2011

Experience

A Management graduate from the

University of Warwick Business
School in UK and a diploma holder
in Industrial Administration from
the University of Aston,
Birmingham, UK. He is associated
with the Murugappa group, a
business conglomerate
headquartered in Chennai, with
interests in diverse areas of
business including Engineering,
Abrasives, Finance, General
Insurance, Cycles, Sugar, Farm
Inputs, Fertilizers, Plantations, Bioproducts and Nutraceuticals. Shri
Vellayan is the Chairman of two


()




, , ...

Public Limited Companies viz. EID

Parry (India) Limited and
Coromandel International Limited
and is also on the Board of several
reputed Public Limited companies.
Shri Vellayan is the President of
Southern Indian Chamber of
Commerce & Industry and a
member of the Executive
Committee of FICCI, Delhi,
member of Management
Committee, A.M.M Educational
Foundation and Chairman of The
Fertiliser Association of India.

100
- ()
- .
-

-

-

-
-
- .
-
-
-
- , ,

Shareholding in IOB 100 shares

Other Directorships

EID Parry (India) Limited

Coromandel International Limited
The Fertiliser Association Of India
Cholamandalam MS General
Insurance Co. Ltd.
Kanoria Chemicals & Industries
Limited
Indian Potash Limited
CFL Mauritius Limited
Roca Bathroom Products Private
Limited
Silkroad Sugar Private Limited
Parry Infrastructure Company
Private Limited
Nimita Solutions Private Limited
Foskor Private Limited,
Johannesburg, South Africa

89


Indian Overseas Bank
, 763, , 600 002
Central Office : 763, Anna Salai, Chennai - 600 002.

DECLARATION

( )

This is to confirm that the Bank has laid down a

Code of Conduct for all the Board Members and
Senior Management ( ie . General Managers ) of the
Bank and the said code is posted on the website of
the Bank. The Board Members and Senior
Management have affirmed compliance with the
code of conduct.

02.05.2011

For Indian Overseas Bank

(. )

Chennai

02.05.2011

90

(M. NARENDRA)
Chairman & Managing Director

Indian Overseas Bank

,763, ,- 600 002

Central Office : 763, Anna Salai, Chennai - 600 002.

02.05.2011

02.05.2011

THE BOARD OF DIRECTORS

INDIAN OVERSEAS BANK

31 03 2011 12
49-V ,

Financial Statements of the Bank FOR THE 12

Month ended 31-03-2011 Clause 49-V of the Listing
Agreement with the Stock Exchanges CEO / CEO
Certification

49 :

In terms of Clause 49 of the listing Agreement, we cetify

that:

a.

We have reviewed financial Statements and the

cash flow Statement for the year and to the best of
our knowledge and belief :

i.

;

i.

ii.
,

ii . These statement together present a true and

fair view of the Bank's affairs and are in
compliance with existing accounting
standard , applicable laws and regulations.

These Statement
do not contain any
materially untrue statement or omit any material
fact or contains statements that might be
misleading:

b.

There are, to the best of our knowledge and belief,

no transaction entered into by the Bank during the
year which are fraudulent, illegal or violative of the
Bank's Code of Conduct

c.

We accept responsibility for establishing and

maintaining internal controls for financial reporting
and that we have evaluated the effectiveness of
internal control systems of the Bank pertaining to
financial reporting and we have disclosed to the
auditors and the audit committee deficiencies in the
design or operation of such internal control, if any,
of which we are aware and the steps we have taken
or propose to take to recently these deficiencies

d.

We have indicated to the auditor and the audit

committee.

i.
,
ii.

iii.

i.

Significant changes in internal control over

financial reporting during the year;

ii.

Significant changes in accounting policies

during the year and that the same have b e e n
disclosed in the notes to the financial
statements; and

iii. Instances of significant fraud of which we h a v e

become aware and the involvement
therein, if any, of the management or an
employee having a significant role in the Bank's
internal control system over financial reporting.

(.. )

(. )

(B.S KESAHAVA MURTHY)

(M. NARENDRA)

General Manager & CFO

Chairman & Managing Director

91

AUDITORS CERTIFICATE
ON CORPORATE GOVERNANCE

To the Shareholders of
Indian Overseas Bank
Chennai

31.03.2011
,
/
49

We have examined the compliance of conditions of

Corporate Governance by Indian Overseas Bank,
Chennai for the year ended 31.03.2011, as
stipulated in clause 49 of the Listing Agreement of
Indian Overseas Bank with stock exchange(s).
The compliance of conditions of Corporate
Governance is the responsibility of the
management. Our examination was limited to
procedures and implementation thereof, adopted
by Indian Overseas Bank for ensuring the
compliance of the conditions of Corporate
Governance. It is neither an audit nor an expression
of opinion on the financial statements of Indian
Overseas Bank.
On the basis of records and documents maintained
by the Bank, the information provided to us and
according to the explanations given to us, we
certify that the Bank has complied with the
conditions of Corporate Governance as stipulated
in the above mentioned Listing Agreement.
We state that no investor grievance is pending for a
period exceeding one month against the Bank as
per the records maintained by the Registrar and
Share Transfer Agent.
We further state that such compliance is neither an
assurance as to the future viability of the Bank nor
the efficiency or effectiveness with the
management has conducted the affairs of the
Bank.

,

,

For VARMA & VARMA

Chartered Accountants

For PKF SRIDHAR & SANTHANAM For BHASKARAN & RAMESH

Chartered Accountants
Chartered Accountants

( K M SUKUMARAN )
Partner
M.No.015707
FRN 004532S

( S RAJESHWARI )
Partner
M.No.024105
FRN 003990S

For M BHASKARA RAO & CO For MITTAL GUPTA & CO

Chartered Accountants
Chartered Accountants

For S R MOHAN & CO

Chartered Accountants

(K R RATHANAM)
Partner
M.No.002316
FRN 000459S

(T.N. KODANDA RAMA GUPTA)

Partner
M.No.018868
FRN 002111S

Place: Chennai
Date: 02.05.2011

:
: 02.05.2011

92

(A BHASKARAN)
Partner
M.No.021948
FRN 000462S

( AKSHAY GUPTA )
Partner
M.No.070744
FRN 001874C

31.03.2011 -
BALANCE SHEET AS AT 31.03.2011

CAPITAL & LIABILITIES

ASSETS

TOTAL

(. '000 )

(Rs. in '000s)

31.03.2011

31.03.2010

SCHEDULES

31.03.2011

31.03.2010

Capital

01

618 74 93

544 80 00

Reserves and Surplus

02

8706 18 07

6979 78 31

Deposits

03

145228 75 11

110794 71 10

Borrowings

04

19355 40 46

8982 20 19

Other Liabilities & Provisions

05

4875 19 28

3790 13 34

178784 27 85

131091 62 94

06

10010 89 43

7666 44 72

and Money at Call and Short Notice

07

2007 76 14

2158 19 35

Investments

08

48610 45 40

37650 56 27

Advances

09

111832 97 75

78999 15 93

TOTAL

Cash & Balances with Reserve

Bank of India
Balances with Banks

Fixed Assets

10

1681 10 68

1699 56 55

Other Assets

11

4641 08 45

2917 70 12

178784 27 85

131091 62 94

Contingent Liabilities
12
45075 88 43

Bills for Collection
4253 20 07

Significant Accounting Policies
17

Notes on Accounts
18

- Schedules Form Part of the Balance Sheet

39340 50 50

M.NARENDRA

CHAIRMAN & MANAGING DIRECTOR

NUPUR MITRA

. .

.
.
.
..

. .

02.05.2011

EXECUTIVE DIRECTOR

A.K.BANSAL
EXECUTIVE DIRECTOR

DIRECTORS
Dr.Vinita Kumar
Sridhar L. Lakhotia
K.Ananda Kumar
B.V.Appa Rao
Sooraj Khatri
A.K.Bhargava
CHENNAI
02.05.2011

3205 14 84

VIDE OUR REPORT OF EVEN DATE

004532
..

..015707

VARMA & VARMA

FRN 004532S

. .
000459

..002316

M.BHASKARA RAO & CO

003990
.

..024105

PKF SRIDHAR & SANTHANAM

FRN 003990S

K M SUKUMARAN
Partner
M.No.015707

FRN 000459S
K.R.RATNAM
Partner
M.No.002316

S.RAJESHWARI
Partner
M.No,024105

.
001874

..070744

MITTAL GUPTA & CO

000462
.

..021948

BHASKARAN & RAMESH

FRN 000462S

.
002111
..

..018868

S.R.MOHAN & CO,

FRN 001874C
AKSHAY K. GUPTA
Partner
M.No.070744

A.BHASKARAN
Partner
M.No.021948

FRN 002111S
KODANDA RAMAGUPTA T. N.
Partner
M.No.018868

CHARTERED ACCOUNTANTS
93

31.03.2011
PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31.03.2011

SCHEDULES

()

INCOME
Interest earned
Other income

13
14

TOTAL
EXPENDITURE
Interest expended
Operating expenses
Provisions & Contingencies (Net)

15
16

TOTAL

( in 000's)
(Rs. in '000s)
31.03.2011 31.03.2010
YEAR ENDED
31.03.2011

YEAR ENDED
31.03.2010

12101 46 50
1225 10 25

10245 77 35
1143 25 37

13326 56 75

11389 02 72

7893 43 95
2572 49 49
1788 09 04

7077 90 95
2466 49 71
1137 65 91

12254 02 48

10682 06 57

PROFIT / LOSS
/
Net Profit for the year
1072 54 27

Profit /Loss brought forward
0
/
TOTAL
1072 54 27

APPROPRIATIONS

Transfer to Statutory Reserve

321 76 30

387 99 89
Transfer to Revenue and Other Reserves
Transfer
to
Capital
Reserve
3 21 78

Proposed Final Dividend

(including Dividend Tax)
359 56 30
( )
-
Balance carried over to Balance Sheet
0
TOTAL
1072 54 27

Basic & Diluted Earnings per share ( )

19.63

Nominal Value per Equity Share ( )
10.00

- Schedules Form Part of the Balance Sheet

M.NARENDRA

CHAIRMAN & MANAGING DIRECTOR

NUPUR MITRA

. .

.
.
.
..

. .

02.05.2011

EXECUTIVE DIRECTOR

A.K.BANSAL
EXECUTIVE DIRECTOR

DIRECTORS
Dr.Vinita Kumar
Sridhar L. Lakhotia
K.Ananda Kumar
B.V.Appa Rao
Sooraj Khatri
A.K.Bhargava
CHENNAI
02.05.2011

706 96 15
0
706 96 15
212 10 00
127 59 03
144 18 51
223 08 61
0
706 96 15
12.98
10.00

VIDE OUR REPORT OF EVEN DATE

004532
..

..015707

VARMA & VARMA

FRN 004532S

. .
000459

..002316

M.BHASKARA RAO & CO

003990
.

..024105

PKF SRIDHAR & SANTHANAM

FRN 003990S

K M SUKUMARAN
Partner
M.No.015707

FRN 000459S
K.R.RATNAM
Partner
M.No.002316

S.RAJESHWARI
Partner
M.No,024105

.
001874

..070744

MITTAL GUPTA & CO

000462
.

..021948

BHASKARAN & RAMESH

FRN 000462S

.
002111
..

..018868

S.R.MOHAN & CO,

FRN 001874C
AKSHAY K. GUPTA
Partner
M.No.070744

A.BHASKARAN
Partner
M.No.021948

FRN 002111S
KODANDA RAMAGUPTA T. N.
Partner
M.No.018868

CHARTERED ACCOUNTANTS
94

-1

SCHEDULE - 1

.10/- 300,00,00,000
(
.10/- 300,00,00,000
)
,
.10/- 61,87,49,343

(
.10/- 40,75,49,343
)
.10/-
54,48,00,000
(
.10/- 33,36,00,000
)

AUTHORISED CAPITAL
300,00,00,000 Equity
Shares of 10/- each
(Previous Year 300,00,00,000
Equity Shares of 10/- each)

-2

I.

:
-I
II.

:

: / -*

CAPITAL

(. '000 )

( in 000's)

31.3.2010

As at 31.03.2011 As at 31.03.2010

3000 00 00

3000 00 00

ISSUED, SUBSCRIBED & PAID UP CAPITAL

61,87,49,343 Equity Shares of

10/- each

(Includes 40,75,49,343 Shares of

held by Government of India)

10/- each

Previous year 54,48,00,000 Equity

Shares of 10/- each
(Includes 33,36,00,000 shares of 10/- each
618 74 93

held by Government of India)

SCHEDULE - 2

31.03.2011

RESERVES & SURPLUS

544 80 00

31.3.2010

As at 31.03.2011 As at 31.03.2010

I. SHARE PREMIUM
Opening balance

140 00 00

140 00 00

Add: Additions

980 05 06

1120 05 06

140 00 00

2131 95 57

1919 85 57

321 76 30

212 10 00

2453 71 87

2131 95 57

1175 60 40

1209 56 88

68 76

16 29 71

33 96 48

1159 99 45

1175 60 40

845 28 44

702 70 67

2 71 13

142 57 77

847 99 57

845 28 44

TOTAL -I
II. STATUTORY RESERVE
Opening balance
Add: Additions
TOTAL -II
III. CAPITAL RESERVE
A. Revaluation Reserve
Opening Balance
Add: Additions
Less: Deductions / Depreciation *

-
.

SCHEDULES

31.03.2011

-II
III.
.

:

TOTAL - A
B. On sale of Investments
Opening Balance
Add: Additions

TOTAL - B

95

 ( )
SCHEDULES (Contd.)
( in 000's)
(. '000 )

-2

.

: *
-
-III ( , , )
IV.
(i)

:
:
-(i)

SCHEDULE - 2

31.03.2011

RESERVES & SURPLUS

As at 31.03.2011 As at 31.03.2010

C. Others
Opening Balance
Add: Additions *

148 53 06
50 65

146 92 32
1 60 74

149 03 71

148 53 06

2157 02 73

2169 41 90

2322 99 62

2193 53 54

388 73 54

129 49 05

95 58 64

2 97

2616 14 52

2322 99 62

126 60 00
0

126 60 00
0

126 60 00

126 60 00

95 58 58

95 58 58

Opening balance

88 81 22

166 97 34

Add: Additions

48 24 09

78 16 12

137 05 31

88 81 22

2975 38 41

2538 40 84

8706 18 07

6979 78 31

TOTAL - C
TOTAL - III (A,B,C)
IV. REVENUE & OTHER RESERVES
(i) Other Revenue Reserves
Opening Balance
Add: Additions
Less: Deduction
TOTAL - (i)

(ii)

:
-(ii)

(ii) Special Reserve

(iii).

:
:
-(iii)

(iii) Investment Reserve Account

(iv)

:
:

(iv) Foreign Currency Translation Reserve

Opening balance
Add: Additions
TOTAL - (ii)

Opening Balance
Add: Additions
Less: Deductions
TOTAL - (iii)

Less: Deduction

-(iv)

TOTAL - (iv)

- IV (i, ii,iii, iv)

TOTAL - IV (i,ii,iii,iv)

v.
(I,II,III,IV &V)

31.3.2010

V. PROFIT AND LOSS ACCOUNT

TOTAL ( I, II , III, IV & V)

*31.3.2011 -
* Includes adjustment on account of conversion of figures relating to foreign branches at the rate of
exchange as at 31.03.2011
96

 ( )
SCHEDULES (Contd.)
(. '000 ) ( in 000's)

-3

31.03.2011

SCHEDULE - 3
DEPOSITS

.I.
i)
ii)
-I
II.
III.
i)
ii)

A. I. DEMAND DEPOSITS
i) From Banks

362 10 77

11768 83 86

9249 20 20

11805 62 46

9611 30 97

32055 59 36

26450 89 07

602 24 47

1980 71 00

100765 28 82

72751 80 06

TOTAL - III

101367 53 29

74732 51 06

TOTAL - A ( I,II & III )

145228 75 11

110794 71 10

140381 47 25

105434 42 70

4847 27 86

5360 28 40

145228 75 11

110794 71 10

TOTAL - I
II. SAVINGS BANK DEPOSITS
III. TERM DEPOSITS
i) From Banks
ii) From Others

- (I,II III)

II)

36 78 60

ii) From Others

- III

. I)

B. I) Deposits of branches in India

II) Deposits of branches outside India

-
-4

I.




()

31.3.2010

As at 31.03.2011 As at 31.03.2010

TOTAL - B
SCHEDULE - 4
BORROWINGS

31.03.2011

31.3.2010

As at 31.03.2011 As at 31.03.2010

I. BORROWINGS IN INDIA
Reserve Bank of India
Other Banks
Other Institutions & Agencies
Innovative Perpetual Debt
Instruments ( IPDI )

3750 00 00

2154 74 18

1268 45 57

780 00 00

780 00 00

Hybrid Debt Capital Instruments

issued as Bonds

2632 30 00

1665 30 00

Subordinated Debt

3426 00 00

2426 00 00

12743 04 24

6139 75 61

6612 36 22

2842 44 58

19355 40 46

8982 20 19

5904 74 18

1268 45 57

(I)
II.

TOTAL (I)
II. BORROWINGS OUTSIDE INDIA

(I II)
III. I II

TOTAL ( I & II)

III. Secured borrowings included in
I & II above
97

 ( )
SCHEDULES (Contd.)
(. '000 ) ( in 000's)
SCHEDULE - 5
OTHER LIABILITIES &
PROVISIONS

-5

I.
II. - ()
III.
IV. ( )

I. Bills Payable

665 65 01

324 66 49

219 41 85

IV. Others ( including provisions)

3880 70 31

2905 06 48

TOTAL

4875 19 28

3790 13 34

II. Inter Office Adjustments ( Net)

III. Interest Accrued

SCHEDULE - 6
CASH AND BALANCES WITH
RESERVE BANK OF INDIA

I. (
)
II.
i)
ii)

I.
i)
.
.

31.03.2011

31.3.2010

As at 31.03.2011 As at 31.03.2010

I. Cash on hand ( including Foreign

currency notes & ATM cash)

979 56 78

670 32 73

i) in Current Account

9031 32 65

6996 11 99

ii) in Other Accounts

10010 89 43

7666 44 72

II. Balances with Reserve Bank of India

-7

31.3.2010

669 82 48

-6

31.03.2011

As at 31.03.2011 As at 31.03.2010

TOTAL

SCHEDULE - 7
31.03.2011
31.3.2010
BALANCES WITH BANKS AND
MONEY AT CALL AND SHORT NOTICE As at 31.03.2011 As at 31.03.2010
I. In India
i) Balances with banks
a) In Current Accounts

261 05 74

168 25 34

b) In Other Deposit Accounts

653 32 67

731 88 04

539 00 00

914 38 41

1439 13 38

309 94 24

351 17 98

636 18 49

194 11 19

147 25 00

173 76 80

TOTAL - II

1093 37 73

719 05 97

TOTAL ( I & II)

2007 76 14

2158 19 35

ii) ii) Money at Call and Short Notice

a) With banks
.
b) With other institutions
.
TOTAL - I
-I
II. Outside India
II.
a) In Current Accounts
.
b) In Other Deposit Accounts
.
. c) Money at Call and Short Notice

-II
(I II)

98

 ( )
SCHEDULES (Contd.)
(. '000 ) ( in 000's)

- 8

SCHEDULE - 8
INVESTMENTS

I.
i)
ii)
iii)
iv) -
v)

31.03.2011

31.3.2010

As at 31.03.2011 As at 31.03.2010

I. INVESTMENTS IN INDIA
i) Government Securities

38076 76 60

32052 77 66

81 63 60

105 73 10

605 11 09

435 89 96

1960 49 21

1973 22 84

, Investments in Mutual Funds,

, Venture Capital Funds

Certificate of Deposits and RIDF with NABARD 6796 39 78

2053 44 99

ii) Other Approved Securities

iii) Shares
iv) Debentures and Bonds
v) Others

- I

TOTAL - I

47520 40 28

36621 08 55

909 00 88

860 96 24

21 20

5 73 98
130 65 97

8 36 29
115 34 15

44 43 09

44 81 04

TOTAL - II

1090 05 12

1029 47 72

TOTAL ( I & II )

48610 45 40

37650 56 27

47720 53 93

36795 09 39

200 13 65

174 00 84

47520 40 28

36621 08 55

1115 06 27

1086 15 98

25 01 15

56 68 26

1090 05 12

1029 47 72

48610 45 40

37650 56 27

II. * II. INVESTMENTS OUTSIDE INDIA*

i) (
i) Government Securities (including
) Local Authorities)
ii) /

iii)
)
) -
)

ii) Subsidiaries and / or joint ventures abroad

iii) Others
a. Shares
b. Debentures & Bonds
c. Others

- II
(I II)

:

Gross Investments in India

*
:

Gross Investments Outside India*

Total Net Investments

Less: Depreciation
Net Investments

Less: Depreciation
Net Investments

*31.3.2011 -
* includes adjustment on account of conversion of figures relating to foreign branches at the rate of
exchange as at 31.03.2011.

99

 ( )
SCHEDULES (Contd.)
(. '000 ) ( in 000's)

-9

31.03.2011

SCHEDULE - 9
ADVANCES

.i)

ii) ,

iii)

31.3.2010

As at 31.03.2011 As at 31.03.2010

A. i) Bills Purchased & Discounted

6682 52 20

4792 86 96

49033 53 18

34290 21 35

56116 92 37

39916 07 62

111832 97 75

78999 15 93

84344 79 95

63258 46 98

4966 12 25

4210 36 57

22522 05 55

11530 32 38

111832 97 75

78999 15 93

i) Priority Sector

32648 15 00

27237 22 48

ii) Public Sector

12894 52 40

5778 46 12

iii) Banks

772 61 93

547 36 15

iv) Others

54954 65 27

37759 41 08

101269 94 60

71322 45 83

343 92 32

108 17 90

a) Bills Purchased & Discounted

4428 73 10

3412 79 90

b) Syndicated Loans

2373 23 09

2024 82 11

c) Others

3417 14 64

2130 90 19

ii) Cash Credits, Overdrafts and

Loans repayable on demand
iii) Term Loans

TOTAL

B. i) Secured by Tangible Assets

. i)
( )
( includes advances against
Book Debts )

ii) /

ii) Covered by Bank/Government

Guarantees

iii)

iii) Unsecured

. I.
i)
ii)
iii)
iv)

TOTAL
C. I) Advances in India

II.
i)
ii)
)

)
)

TOTAL
II) Advances Outside India
i) Due from Banks
ii) Due from Others

TOTAL

10563 03 15

7676 70 10

( I II )

TOTAL (C-I & C-II)

111832 97 75

78999 15 93

100

 ( )
SCHEDULES (Contd.)
(. '000 ) ( in 000's)

-10

SCHEDULE - 10
FIXED ASSETS

I.
01-04-2010

/ :

*

Additions during the year *

Deductions during the year*
Depreciation to date

-I
II.

TOTAL -I
II. Capital work in progress

- II

TOTAL - II

III. (
)
01-04-2010

I. Premises
At cost / revalued amount as on
01.04.2010

31.03.2011

31.3.2010

As at 31.03.2011 As at 31.03.2010

1638 38 49

1611 66 27

20 82 44

35 74 22

1659 20 93

1647 40 49

3 16 15

9 02 00

1656 04 78

1638 38 49

183 44 86

159 71 98

1472 59 92

1478 66 51

4 89 61

7 67 28

4 89 61

7 67 28

822 14 09

741 07 99

93 49 39

122 65 90

915 63 48

863 73 89

36 10 94

41 59 80

879 52 54

822 14 09

III. Other Fixed Assets (including

Furniture & Fixtures)
At cost as on 01.04.2010
Additions during the year *

Deductions during the year*

Depreciation to date

675 91 39

608 91 33

- III

TOTAL - III

203 61 15

213 22 76

(I, II III )

Total ( I, II & III )

1681 10 68

1699 56 55

* 31.3.2011 -
* Including adjustments on account of conversion of figures relating to foreign branches at the rate of exchange as at
31.03.2011.

101

 ( )
SCHEDULES (Contd.)
(. '000 ) ( in 000's)

11

SCHEDULE - 11
OTHER ASSETS

I) ()
ii)
iii)

iv) -
v)
vi)

i) Inter Office Adjustments ( Net)

ii) Interest Accrued

1490 73 57

1040 32 16

iii) Tax paid in advance /

Tax deducted at source

1055 25 75

962 40 54

7 48 31

6 74 15

1 54 52

1 55 07

1826 68 07

778 67 86

4641 08 45

2917 70 12

iv) Stationery & Stamps

v) Non Banking Assets acquired in
satisfaction of claims
vi) Others
TOTAL

CONTINGENT LIABILITIES

i) i) Claims against the Bank not

acknowledged as debts
ii) : ii) Liability for partly paid investments
iii)

iii) Liability on account of outstanding

forward exchange contracts

iv)

iv) Guarantees given on behalf

of constituents
a) In India

b) Outside India

v) ,

As at 31.03.2011 As at 31.03.2010
128 00 34

SCHEDULE - 12

31.3.2010

259 38 23

12

31.03.2011

v) Acceptances, Endorsements &

Other obligations

vi)
vi) Other items for which the bank is

contingently liable

TOTAL

102

31.03.2011

31.3.2010

As at 31.03.2011 As at 31.03.2010

39 67 20

78 22 30

11 60

11 60

15865 91 98

15631 41 67

10210 37 89

8445 29 69

216 99 91

247 02 75

11585 25 34

8047 64 96

7157 54 51

6890 77 53

45075 88 43

39340 50 50

 ( )
SCHEDULES (Contd.)
(. '000 ) ( in 000's)

13

SCHEDULE - 13
INTEREST EARNED

Year Ended
31.03.2011

Year Ended
31.03.2010

i) / /

i) Interest / discount on advances / bills

8848 56 64

7659 48 17

ii)

ii) Income on investments

2965 46 52

2381 60 10

iii)
-

iii) Interest on Balances with Reserve Bank

261 99 52

192 60 64

25 43 82

12 08 44

12101 46 50

10245 77 35

iv)

of India and Other Inter-Bank Funds

iv) Others

14

TOTAL
SCHEDULE - 14

Year Ended

Year Ended

OTHER INCOME

31.03.2011

31.03.2010

i) ,

i) Commission, Exchange and Brokerage

689 16 56

577 70 31

ii) ()

ii) Profit on Sale of Investments ( Net )

108 57 45

291 85 67

iii) () iii) Profit on Revaluation of Investments ( Net ) -52 92 13

-53 33 17

iv), iv) Profit on sale of land, buildings and

other assets (Net)
()
v) ()

1 02 25

1 60 74

v) Profit on exchange transactions ( Net )

156 96 00

127 04 26

vi) Miscellaneous Income

322 30 12

198 37 56

1225 10 25

1143 25 37

vi)
TOTAL

103

 ( )
SCHEDULES (Contd.)
(. '000 ) ( in 000's)

15

SCHEDULE - 15
INTEREST EXPENDED

i) Interest on Deposits
i)
ii) / - ii) Interest on Reserve Bank of India /
Inter-Bank Borrowings

iii) Others
iii)

16

TOTAL
SCHEDULE - 16
OPERATING EXPENSES

I)
i) Payments to and provisions for employees

ii) Rent, Taxes and Lighting

ii) ,
iii) Printing and Stationery
iii) -
iv) Advertisement and Publicity
iv)
v) Depreciation on Bank's property
v) (
(Net of depreciation transferred from
Revaluation Reserve)
)
vi) Directors' fees, allowances and expenses
vi) ,
vii) - vii) Auditors' fees and expenses
( - (including Branch auditor's fees
and expenses)
)
viii) Law charges
viii)
ix) Postages, telegrams, telephones, etc.
ix) , ,
x) Repairs and Maintenance
x)
xi) Insurance
xi)
xii) Other Expenditure
xii)

TOTAL

104

Year Ended Year Ended
31.03.2011 31.03.2010
6753 30 41

6271 78 76

1140 03 29

805 93 38

10 25

18 81

7893 43 95

7077 90 95

Year Ended Year Ended
31.03.2011 31.03.2010
1741 13 68

1734 74 90

238 76 23

204 47 48

16 94 36

15 46 19

23 16 52

35 82 57

105 00 10

111 75 94

1 03 65

73 47

22 63 40

17 83 31

9 13 84

5 42 91

20 19 15

15 87 59

9 14 10

8 55 83

119 92 33

113 94 11

265 42 13

201 85 41

2572 49 49

2466 49 71

 -17

SCHEDULE 17

1.

1.

1.1.

()
, , /
, /
()

,

1.1 The financial statements have been prepared

under the historical cost convention unless
otherwise stated. They conform to Generally
Accepted Accounting Principles (GAAP) in
India, which comprises statutory provisions,
regulatory / Reserve Bank of India (RBI)
guidelines, Accounting Standards / Guidance
Notes issued by the Institute of Chartered
Accountants of India (ICAI) and practices
prevalent in the banking industry in India. In
respect of foreign offices, statutory provisions
and practices prevailing in respective foreign
countries are complied with.

SIGNIFICANT ACCOUNTING POLICIES

Basis of Preparation

Use of Estimates

1.2

( )

1.2 The preparation of financial statements

requires the Management to make estimates
and assumptions which are considered in the
reported amounts of assets and liabilities
(including Contingent Liabilities) as of the date
of the financial statements and reported
income and expense for the reporting period.
Management believes that the estimates used
in the preparation of the financial statements
are prudent and reasonable. Future results
could differ from these estimates.

2.

2.

2.1



-

2.1 Income is recognized on accrual basis on

performing assets and on realization basis in
respect of non-performing assets as per the
prudential norms prescribed by Reserve Bank
of India. Recovery in Non Performing Assets is
first appropriated towards interest and the
balance, if any, towards principal, except in the
case of Suit Filed Accounts and accounts
under One Time Settlement, where it would be
appropriated towards principal.

2.2 /- ,
( / / ), ,

Revenue Recognition and Expense

Accounting

2.2 Interest on bills purchased/Mortgage Backed

Securities, Commission (except on Letter of
Credit/Letter of Guarantee/Government
Business), Exchange, Locker Rent and
Dividend are accounted for on realization
basis.

2.3

2.3 Income from consignment sale of precious

metals is accounted for as Other Income after
the sale is complete.

105

2.4 ,

2.4 Expenditure is accounted for on accrual basis,

unless otherwise stated.

2.5 ,
,

2.5 In case of matured overdue Term Deposits,

interest is accounted for as and when deposits
are renewed. In respect of Inoperative Savings
Bank Accounts, unclaimed Savings Bank
accounts and unclaimed Term Deposits,
interest is accrued as per RBI guidelines.

2.6 -

2.6 Legal expenses in respect of Suit Filed

Accounts are charged to Profit and Loss
Account. Such amount when recovered is
treated as income.

2.7 , /

2.7 In respect of foreign branches, Income and

Expenditure are recognized / accounted for as
per local laws of the respective countries.

3.

3.

3.1 "
" () 11
-

3.1 Accounting for transactions involving foreign

exchange is done in accordance with
Accounting Standard (AS) 11, The Effects of
Changes in Foreign Exchange Rates, issued
by The Institute of Chartered Accountants of
India.

3.2 - ():

3.2 Transaction in respect of Treasury(Foreign):

) -
-




)



,


)
,

106

Foreign Currency Transactions

a)

Foreign Currency transactions except foreign

currency deposits and lending are recorded
on initial recognition in the reporting currency
by applying to the foreign currency amount the
exchange rate between the reporting currency
and the foreign currency on the date of
transaction. Foreign Currency deposits and
lendings are initially accounted at the then
prevailing FEDAI weekly average rate.

b)

Closing Balances in NOSTRO and ACU Dollar

accounts are stated at closing rates. All foreign
currency deposits and lendings including
contingent liabilities are stated at the FEDAI
weekly average rate applicable for the last
week of each quarter. Other assets, liabilities
and outstanding forward contracts
denominated in foreign currencies are stated
at the rates on the date of transaction.

c)

The resultant profit or loss on revaluation of all

assets, liabilities and outstanding forward
exchange contracts including contingent
liabilities at year-end exchange rates advised

" " /" "

,

by FEDAI is taken to revenue with

corresponding net adjustments to Other
Liabilities and Provisions/Other Asset
Account except in case of NOSTRO and ACU
Dollar accounts where the accounts stand
adjusted at the closing rates.

) , -

d)

3.3. :

3.3 Translation in respect of overseas branches:

. 11,

a)

. ( )

b)

c)

"
"

d)

4.

4.

Income and expenditure items are translated

at the exchange rates ruling on the date of
incorporating the transaction in the books of
accounts.

As stipulated in Accounting Standard 11, all

overseas branches are treated as Non Integral
Operations.
Assets and Liabilities (including contingent
liabilities) are translated at the closing spot
rates notified by FEDAI at the end of each
quarter.
Income and Expenses are translated at
quarterly average rate notified by FEDAI at the
end of each quarter.
The resulting exchange differences are not
recognized as income or expense for the
period but accumulated in a separate account
Foreign Currency Translation Reserve till the
disposal of the net investment.
Investments

4.1
,

6
:
)
)

)
)
.) /
)

4.1 Investments in India are classified into Held

for Trading, Available for Sale and Held to
Maturity categories in line with the guidelines
from Reserve Bank of India. Disclosures of
Investments are made under six classifications
viz.,
a) Government Securities
b)Other Approved securities including
those issued by local bodies,
c) Shares,
d) Bonds &Debentures,
e) Subsidiaries /Joint Ventures,
f) Units of Mutual Funds and Others.

4.2. / 90
,

4.2 I n t e r e s t o n I n v e s t m e n t s , w h e r e
interest/principal is in arrears for more than 90
days and income from Units of Mutual Funds ,
is recognized on realisation basis as per
prudential norms.

107

4.3
- :

4.3 Valuation of Investments is done in

accordance with the guidelines issued by
Reserve Bank of India as under:

4.3.1. " " " "

,

/


.1/- /

4.3.1. Individual securities under Held for

Tradingand Available for Sale categories are
marked to market at quarterly intervals. Central
Government securities are valued at market
rates declared by FIMMDA. Securities of State
Government, other Approved Securities and
Bonds & Debentures are valued as per the
yield curve, credit spread rating-wise and other
methodologies suggested by FIMMDA.
Quoted equity shares are valued at market
rates, Unquoted equity shares and units of
Venture Capital Funds are valued at book
value /NAV ascertained from the latest
available balance sheets, otherwise the same
are valued at Re. 1/- per company /Fund.

Treasury Bills, Commercial Papers and

Certificate of Deposits are valued at carrying
cost. Units held in Mutual fund schemes are
valued at Market Price or Repurchase price or
Net Asset Value in that order depending on
availability.

Valuation of Preference shares is made on

YTM basis with appropriate markup over the
YTM rates for Central Government Securities
put out by the PDAI/FIMMDA periodically.

, ,
, ,

,

Based on the above valuations under each of

the six classifications, net depreciation, if any,
is provided for and net appreciation, if any, is
ignored. Though the book value of individual
securities would not undergo any change due
to valuation, in the books of account, the
investments are stated net of depreciation in
the balance sheet.

4.3.2 " ":

/
,

,

4.3.2.Held to Maturity: Such investments are

carried at acquisition cost/amortised cost. The
excess, if any, of acquisition cost over the face
value of each security is amortised on an
effective interest rate method, over the
remaining period of maturity. Investments in
subsidiaries, associates and sponsored
institutions and units of Venture capital funds
are valued at carrying cost.

108

4.4 ..
/
- /

4.4 Investments are subject to appropriate

provisioning / de -recognition of income, in line
with the prudential norms prescribed by
Reserve Bank of India for NPA classification.
Bonds and Debentures in the nature of
advances are also subject to usual prudential
norms and accordingly provisions are made,
wherever applicable.

4.5 /
/
,

4.5 Profit/Loss on sale of Investments in any

category is taken to Profit and Loss account. In
case of profit on sale of investments in Held to
Maturity category, profit net of taxes is
appropriated to Capital Reserve Account.

4.6 ,
/ -- -

4.6 Broken period interest, Incentive / Front-end

fees, brokerage, commission etc. received on
acquisition of securities are taken to Profit and
Loss account.

4.7 /
-

4.7 Repo / Reverse Repo transactions are

accounted as per RBI guidelines.

4.8


5.

4.8 Investments held by overseas branches are

classified and valued as per guidelines issued
by respective overseas Regulatory Authorities.
5. Advances
5.1 Advances in India have been classified as
'Standard', 'Sub-standard', 'Doubtful' and 'Loss
assets' and provisions for losses on such
advances are made as per prudential norms
issued by Reserve Bank of India from time to
time. In case of overseas branches, the
classification and provision is made based on
the respective country's regulations or as per
norms of Reserve Bank of India whichever is
higher.

5.1 , -,
-
-

,

,
5.2

5.2 Advances are stated net of provisions except

general provisions for standard advances.

6.

6. Derivatives

6.1. /

6.1 The Bank enters into Derivative Contracts in

order to hedge interest bearing assets/
liabilities, and for trading purposes.

6.2. /


/

6.2 In respect of derivative contracts which are

entered for hedging purposes, the net amount
receivable/payable is recognized on accrual
basis. Gains or losses on termination on such
contracts are deferred and recognized over the

109

remaining contractual life of the derivatives or

the remaining life of the assets/ liabilities,
whichever is earlier. Such derivative contracts
are marked to market and the resultant gain or
loss is not recognized, except where the
derivative contract is designated with an asset/
liability which is also marked to market, in
which case, the resulting gain or loss is
recorded as an adjustment to the market value
of the underlying asset/ liability.

/

/

6.3.

- / /
/

6.3 Derivative contracts entered for trading

purposes are marked to market as per the
generally accepted practices prevalent in the
industry and the changes in the market value
are recognized in the profit and loss account.
Income and expenses relating to these
contracts are recognized on the settlement
date. Gain or losses on termination of the
trading derivative contracts are recorded as
income or expenses.

7.

7. Fixed Assets

7.1

7.1 Fixed Assets except revalued premises are

stated at historical cost.

7.2

7.2 Depreciation is provided on straight-line

method at the rates considered appropriate by
the Management as under:

2.50 %

10 %
, - 20%

33 1/3 %

100 %

Premises

2.50%

Furniture

10%

Electrical Installations,
Vehicles & Office Equipments

20%

Computers
Fire Extinguishers

33 1/3 %
100%

Depreciation on revalued portion of the fixed

assets is withdrawn from revaluation reserve and
credited to profit and loss account.

7.3 /

7.3 Depreciation is provided for the full year

irrespective of the date of acquisition /
revaluation.

7.4 - ,

7.4 Depreciation is provided on Land and Building

as a whole where separate costs are not
ascertainable.

110

7.5

7.6
/

8. -

7.5 In respect of leasehold properties, premium is

amortised over the period of lease.

8.1

8.1 Contribution to Provident Fund is charged to

Profit and Loss Account.

8.2.

8.2 Provision for gratuity and pension liability is

made on actuarial basis and contributed to
approved Gratuity and Pension Fund.
Provision for encashment of accumulated
leave payable on retirement or otherwise is
based on actuarial valuation at the year-end.
However, additional liability accrued during
the year on account of Re-opening of pension
option and enhancement of Gratuity limit is
being amortised over a period of five years.

7.6 Depreciation on Fixed Assets of foreign

branches is provided as per the applicable
laws/practices of the respective countries.
8.

8.3.

9.

Staff Benefits

8.3 In respect of overseas branches gratuity is

accounted for as per laws prevailing in the
respective countries.

9.

, 22

(

)

Tax on Income
This comprises provision for current tax and
deferred tax charge or credit (reflecting the tax
effects of timing differences between
accounting income & taxable income for the
period) as determined in accordance with
Accounting Standard 22 of ICAI, Accounting
for taxes on income.
Deferred tax is
recognized subject to consideration of
prudence in respect of items of income and
expenses those arise at one point of time and
are capable of reversal in one or more
subsequent periods. Deferred tax assets and
liabilities are measured using enacted tax
rates expected to apply to taxable income in
the years in which the timing differences are
expected to be reversed. The effect on
deferred tax assets and liabilities of a change
in tax rates is recognized in the income
statement in the period of enactment of the
change.

10.

10. Earning per Share

The Bank reports basic and diluted earnings
per equity share in accordance with
Accounting Standard - 20, Earnings Per
Share, issued by The Institute of Chartered
Accountants of India. Basic earnings per

20

111

equity share has been computed by dividing

net profit for the year by the weighted average
number of equity shares outstanding for the
period. Diluted earnings per share reflect the
potential dilution that could occur if securities
or other contracts to issue equity shares were
exercised or converted during the year.
Diluted earnings per equity share have been
computed using the weighted average
number of equity shares and dilutive potential
equity shares outstanding during the period
except where the results are anti-dilutive.

11.

11. Impairment of Assets

The bank assesses at each balance sheet

date whether there is any indication that an
asset may be impaired. Impairment loss, if
any, is provided in the Profit and Loss Account
to the extent the carrying amount of assets
exceed their estimated recoverable amount.

12.

12. Accounting for Provisions, Contingent

Liabilities and Contingent Assets

29
,

,

In accordance with Accounting Standard 29,

Provisions, Contingent Liabilities and
Contingent Assets, issued by the Institute of
Chartered Accountants of India, the Bank
recognizes provisions when it has a present
obligation as a result of a past event, it is
probable that an outflow of resources
embodying economic benefits will be
required to settle the obligation and when a
reliable estimate of the amount of the
obligation can be made.

Provisions ore determined based on

management estimate required to settle the
obligation at the balance sheet date,
supplemented by experience of similar
transactions. These are reviewed at each
balance sheet date and adjusted to reflect the
current management estimates. In cases
where the available information indicates that
the loss on the contingency is reasonably
possible but the amount of loss cannot be
reasonably estimated, a disclosure is made in
the financial statements.
Contingent Assets, if any, are not recognized
or disclosed in the financial statements.

112

 18

SCHEDULE 18

1.

1. Reconciliation

NOTES ON ACCOUNTS

Reconciliation of inter-bank and inter-branch

transactions has been completed up to
st
31 March 2011. Steps for elimination of
outstanding entries are in progress. Since the
outstanding entries to be eliminated are
insignificant, no material consequential effect is
anticipated.

- - 31 , 2011




2.

2. Investments

2.1
() ,
:

2.1In accordance with RBI guidelines, the

Investments Portfolio of the bank (domestic) has
been classified into three categories, as given
below: -

(. )
31.03.2011

31.03.2010

31.03.2011

30543.78

25520.35

64.00

69.36

17168.12

11263.35

35.98

30.61

8.64

11.39

0.02

0.03

Gross Book Value

(Rs. In Crore)

31.03.2010

Category

Investments

31.03.2011

31.03.2010

31.03.2011

31.03.2010

Held to Maturity

30543.78

25520.35

64.00

69.36

Available for Sale

17168.12

11263.35

35.98

30.61

8.64

11.39

0.02

0.03

Held for Trading

2.2
25 %
2011
20.95% ( 22.39%)

Percentage to Total

2.2 SLR Securities under "Held to Maturity"

accounted for 20.95% (previous year 22.39%)
of bank's Demand and Time liabilities as at the
end of March 2011, as against the ceiling of
25% stipulated by RBI.

2.3
.53.00 ( .114.47 )

2.3 In respect of Held to Maturity category of

Investments, premium of Rs.53.00 crore was
amortised during the year (Previous year
Rs.114.47 crore).

2.4 .200 ( .100

)

.5855 ( .4855 )
.
.1.80
( ) ,
. 5.00
( ) ,
. 1.17 ( )

2.4 Securities of face value of Rs.200 crores

(previous year Rs.100 crores) towards
Settlement Guarantee Fund and securities for
Rs.5855 crore crores (previous year
Rs.4855 crore) towards collateral for
borrowing under Collateralised Borrowing and
Lending Obligations have been kept with
Clearing Corporation of India Ltd. Besides, a
sum of Rs.1.80 crore (previous year NIL) has
been lodged with NSCCL towards Currency
Derivatives Segment, Rs.5.00 crore (previous
year NIL) with CCIL towards Default Fund for

113

forex operations, Rs.1.17 crore (previous year

NIL) with Indian Clearing Corporation Ltd.,
towards Currency Derivatives Segment.

2.5 8 . 21,89,07,080/( 21,89,07,080/-) ,

2.5 Shares under Investments in Schedule 8

includes Rs.21,89,07,080/- (Previous year
Rs.21,89,07,080/-) being advance towards
share capital in Regional Rural Banks pending
allotment of shares.

3.

3. Advances

3.1

3.1 The Classification for advances and provisions

for possible loss has been made as per
prudential norms issued by Reserve Bank of
India.

3.2
, ,

3.2 Claims pending settlement and claims yet to be

lodged with Guarantee Institutions identified
by the branches have been considered for
provisioning requirements on the basis that
such claims are valid and recoverable.

3.3

,

3.3 In assessing the realisability of certain

advances, the estimated value of security,
Central Government guarantees etc. have
been considered for the purpose of asset
classification and income recognition.

3.4 -

3.4 The classification of advances, as certified by

the Branch Managers have been incorporated,
in respect of unaudited branches.

3.5

. 171.36
( 171.36 )
4

3.5 The Bank has a floating provision of

R s . 1 7 1 . 3 6 c r o r e s ( P r e v i o u s Ye a r
Rs.171.36 crores) in respect of Gross Nonperforming Advances over and above the
minimum provision prescribed by RBI with a
view to strengthening the financial stability of
the Bank.
4. Fixed Assets

4.1 2008-09
( )
.1123.55

4.1 During the year 2008-09, the bank has

revalued its premises (land and buildings)
other than those at overseas branches and
added an amount of Rs. 1123.55 crores to the
existing carrying value of assets. The
revaluation has been done by approved
valuers.

114

4.2 .0.51
( 1.61 ) 31.03.2011

4.2 A sum of Rs.0.51 crore (previous year

Rs.1.61 crore) being profit on sale of Fixed
Assets during the year has been appropriated
to Capital Reserve as on 31.03.2011.

5.

5.

.2.33
( 4.69 )

/ , ,

Rupee Interest Rate Swap:

An amount of Rs.2.33 crore (previous year
Rs.4.69 crore) is kept in deferred income on
account of gains on termination of Rupee
Interest Rate Swaps taken for hedging and
would be recognized over the remaining
contractual life of swap or life of the
assets/liabilities, whichever is earlier.

6.

6.

6.1 24.03.2011 7,39,49,343

. 980.05 .1054

61.23% 65.87%

Capital and Reserves:

6.1 The bank had during the year raised equity

share capital of Rs.1054 crore including share
premium of Rs.980.05 crore by way of
preferential allotment of 7,39,49,343 equity
shares to Government of India on 24.3.2011.
Pursuant to the above the share holding of
Government of India has increased from
61.23 % to 65.87%.

6.2 / II
.1967.00 ( 800.00 )
II

6.2 During the year, the Bank has raised Tier II

capital amounting to Rs.1967.00 crore
(previous year Rs. 800.00 Crore) by issue of
Lower/Upper Tier II bonds.

7.

7.

,
- ,
.566.68 ( . 406.92 )

Taxes
Taking into consideration the decisions of
Appellate Authorities, judicial
pronouncements and the opinion of tax
experts, no provision has been considered
necessary in respect of disputed and other
demands of income tax amounting to
Rs.566.68 crore (previous year
Rs. 406.92 crore)

8. 2008
8.

8.1
2008 .676

.581.58

Agricultural Debt Waiver and Debt Relief

Scheme 2008

8.1 In terms of Agricultural Debt Waiver and Debt

Relief Scheme 2008, framed by the
Government of India, the Bank has received
Rs.581.58 crore from Reserve Bank of India on
account of loans to small and marginal
farmers, out of the amount eligible for debt
waiver of Rs.676 crore.

115

8.2 .94.42
2008

9

8.2 The balance amount due from the Government

of India under the above scheme amounting to
Rs.94.42 crore is shown as 'Claim Receivable
from Government of India for ADW&DRS 2008'
and included under advances in Schedule 9 as
per Reserve Bank of India circular.

9.

9.

Shree Suvarna Sahakari Bank Ltd

During the year 2009-10, the Bank has taken
over specific assets and liabilities of M/s. Shree
Suvarna Sahakari Bank Ltd., Pune (which was
under moratorium), with effect from the close
of business on 19.05.2009 with the approval of
RBI and other authorities.The deficit
representing excess of liabilities over assets
taken over as on the said date amounting to
Rs.246.52 crore has to be absorbed over a
period of three years, as permitted by Reserve
Bank of India. The Bank has absorbed the
deficit, amounting to Rs.164.34 crore
(Rs.82.17 crore during the year 2009-10 and
Rs.82.17 crore during the year 2010-11). The
balance of deficit amounting to Rs.82.18 crore
will be absorbed before 31.03.2012.

2009-10
19.05.2009
, (
)
246.52


164.34 ( 2009-10 82.17
2010-11 .82.17 ),
82.18
31. 03. 2012
10. :

10. Pension and Gratuity Liability

11571
.758.65 ,
1972

: . 246.56

During the year, the bank reopened the

pension option for such of its employees who
had not opted for the Pension Scheme earlier.
As a result of exercise of this option by 11571
employees, the bank had incurred a liability of
Rs.758.65 crore. Further, during the year, the
limit of Gratuity payable to the employees of
the bank was also enhanced pursuant to the
amendment to the Payment of Gratuity Act,
1972. As a result the Gratuity liability of the
bank has increased by Rs.246.56 crore.

(-15) ,
. 1005.21

In terms of the requirements of the Accounting

Standard (AS-15),Employee Benefits, the
entire amount of Rs.1005.21 crore is required
to be charged to the Profit and Loss account.
However, the Reserve Bank of India has issued
a circular No.DBOD.BP.BC.80/21.04.018/
2010-11, on Reopening of Pension Option to
employees of Public Sector Banks and
enhancement in Gratuity limits Prudential

:


.... 80/21.04.018/2010-11

116

 09 02 2011

Regulatory Treatment, dated 09.02.2011.

In accordance with the provisions of the said
Circular, the bank would amortise the amount
of Rs.1005.21 crore over a period of 5 years.
Accordingly, Rs.201.04 crore (representing
one-fifth of Rs.1005.21 crore) has been
charged to the Profit and Loss Account. In
terms of the requirements of the aforesaid, RBI
Circular, the balance amount carried forward,
i.e., Rs.804.17 crore does not include any
employees relating to separated / retired
employees. Had such a circular not been
issued by the RBI, the profit of the bank would
have been lower by Rs.804.17 crore pursuant
to application of the requirements of AS-15.

.1005.21 5
.201.04
(.1005.21 )

.804.17
/

, -15
.804.17

ADDITIONAL DISCLOSURES

01 07 2010

:

In accordance with the guidelines issued by

Reserve Bank of India vide Master Circular
dated 1.07.2010, the following additional
disclosures are made :-

1.

1.Capital:

(. )

2010 -11

(Rs. in Crore)

SI.
No.

2009 -10

I II I II
13.28% 14.55% 14.26% 14.78%

Particulars

i) CRAR (%)

2010 -11

2009 -10

Basel I Basel II Basel I Basel II

13.28% 14.55% 14.26% 14.78%

i)

(%)

ii)

I (%)

7.45%

8.16%

8.36% 8.67%

ii) CRAR - Tier I Capital (%)

7.45%

8.16%

8.36% 8.67%

iii)

II (%)

5.83%

6.39%

5.90% 6.11%

iii) CRAR - Tier II Capital (%)

5.83%

6.39%

5.90% 6.11%

iv)

v)

vi)

II

65.87%

61.23%

300.00

1967.00

800.00

Percentage of the
iv) shareholding of the
Government of India in
nationalized banks
v) Amount raised by issue of IPDI
(Rs. in Crore)
vi)

(. )

Amount raised by issue of

Upper Tier II instruments
(Rs. in Crore)

65.87%

61.23%

Nil

300.00

1967.00

800.00

* Due to issuance of 7,39,49,343 equity shares to

Government of India on preferential allotment.

7,39,49,343

117

2. :

2.

Investments:

2.1

2.1 Value of Investments

( )

(i)

(ii)

31.03.2011

31.03.2010

47720.54

36795.09

1115.06

1086.16

)
)

Particulars
(i)

(ii)

)
)

200.14
25.01

174.01
56.68

47520.40

36621.08

1090.05

1029.48

(i)
(ii)
(iii)

(iv)

:
:

/

2009 - 10

230.69

338.21

59.34

0.23

31.03.2010

47720.54

36795.09

1115.06

1086.16

200.14
25.01

174.01
56.68

47520.40

36621.08

1090.05

1029.48

Outside India

In India
Outside India

(iii) Net value of Investments

(a)
In India
(b)

Outside India

2.2 Movement of Provisions held towards

depreciation on Investments.

( )
2010 - 11

31.03.2011

Provisions for Depreciation

(a)
(b)

2.2

Gross Value of Investments

(a)
In India
(b)

)
)

(iii)

(Rs. in Crore)

(Rs. in Crore)
Particulars
(i) Opening Balance

2010 - 11

2009 - 10

230.69

338.21

59.34

0.23

64.88

107.75

225.15

230.69

(ii) Add: Provisions made during the year

(iii) Less: Write - off/Write - back of excess
provisions during the year

64.88

107.75

225.15

230.69

(iv) Closing Balance

2.3 Repo transactions (in face value terms)

2.3 ( )

(Rs. in Crore)

( )

Particulars

31

10-11 09-10

10-11 09-10

10-11 09-10

2011- 2010

1490.68 159.23

60.83 15.64

ii.

441.84

17.08

ii.

Daily average Outstanding

outstanding
as on
during the
March 31
year
10-11 09-10
2011 2010

i. Government
securities

Nil

Nil 1490.68 159.23 60.83 15.64

Nil

Nil

ii. Corporate
debt securities

Nil

Nil

i. Government
securities

Nil

Nil

ii. Corporate
debt securities

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

17.08

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Securities
Purchased
under reverse
Repo

i.

Maximum
outstanding
during the
year
10-11 09-10

Securities sold
under Repo

i.

Minimum
outstanding
during the
year
10-11 09-10

118

441.84
Nil

2.4 -
- -

2.4 Non-SLR Investment Portfolio Issuer

Composition Of Non-SLR Investments

( )
.

(1) (2)

(Rs. in Crore)

No Issuer

(4)

(5)

(6)

(7)

(1) (2)

(4)

(5)

(6)

(7)

637.12

558.04

0.00

2.00

13.15

(i) PSUs

637.12

558.04

0.00

2.00

13.15

780.00

756.55

0.00

0.00

16.39

(ii) FIs

780.00

756.55

0.00

0.00

16.39

(iii)

6053.33

5988.29

0.00

0.00

0.00

6053.33

5988.29

0.00

0.00

0.00

(iv)

1502.14

1364.16

0.00

108.97

108.34

(iv) Private Corporates 1502.14

1364.16

0.00

108.97

108.34

0.21

0.00

0.00

0.00

0.21

0.00

0.00

0.00

572.22

475.75

0.00

355.79

147.39

XXX

XXX

XXX

XXX

0.00

466.76

261.49

(i)

(ii)

(3)

Extent of Extent of Extent of Extent of

below
Unrated Unlisted
Private
Amount Placement investment securities securities
grade
securities

(v) /
(vi)
(vii)

0.21

9692.41

9143.00

(3)

(iii) Banks

(v) Subsidiaries /
Joint Ventures

123.61

0.21

(vi) Others

572.22

475.75

0.00

355.79

(vii) Provision held

towards
depreciation

147.39

XXX

XXX

XXX

XXX

0.00

466.76

261.49

Total

2.5

9692.41 9143.00

123.61

2.5 Non Performing Non SLR Investments

(Rs. in Crore)

( )

Particulars

1 2010

4.11

10.00

14.02

4.11
10.00

Reductions during the above period

Closing Balance as on 31st March 2011

0.09

31 2011

Amount

Opening Balance as on 1st April 2010

Additions during the year since 1st April

0.09
14.02

Total Provisions held

5.74

5.74

3. :

3. DERIVATIVES:

3.1 /

3.1 Forward Rate Agreement / Interest Rate

Swap
(. )

I)
ii)

2010-11

1748.00





2.66

(Rs. in Crore)

2009-10

PARTICULARS

15.00

23.92

9.16

i) The notional principal

of swap agreements
ii) Losses which would be
incurred if counter parties failed to fulfil
their obligations under
the agreements

33.08

v)

12.34

15.00

23.92

9.16

33.08

iii) Collateral required by

the bank upon
entering into swaps

Nil

Nil

Nil

Nil

Nil

Nil

iv) Concentration of
credit risk arising from
the swaps

Nil

Nil

Nil

Nil

Nil

Nil

5.94

v) The fair value of the

swap book

-4.83

-34.90

13.88

-7.94

5.94

-30.07

-4.83

-34.90

13.88

-7.94

1748.00 1821.42 3569.42 1075.00 1932.60 3007.60

2.66

iii)

iv)

2009 -10

Rupee
FX
Total Rupee
FX
Total
Exposure Exposure
Exposure Exposure

1821.42 3569.42 1075.00 1932.60 3007.60

12.34

2010-11

119

-30.07

3.2

3.2 Exchange Traded Interest Rate Derivatives

(. )

(i)
( )
(ii) 31 2011
( )
(iii) ``
'' ( )
(iv)
`` '' ( )

3.3

(Rs. in Crore)
SI. Particulars
No.

Amount

(i) Notional principal amount of exchange traded interest rate

derivatives undertaken during the year (instrument wise)

Nil

(ii) Notional principal amount of exchange traded interest rate

derivatives outstanding as on 31st March 2011(instrument wise)

Nil

(iii) Notional principal amount of exchange traded interest rate

derivatives outstanding and not highly effective (instrument wise)

Nil

(iv) Mark-to-market value of exchange traded interest rate

derivatives outstanding and not highly effective (instrument wise)

Nil

3.3 DISCLOSURES ON RISK EXPOSURE IN

DERIVATIVES

3.3.1

3.3.1 Qualitative Disclosure

()

Treasury (Foreign)

,
(
),

The Bank uses Interest Rate Swaps (IRS),

Currency Swaps and Options for hedging
purpose to mitigate interest rate risk and
currency risk in banking book. The Bank also
offers these products to corporate clients to
enable them to manage their own currency and
interest rate risk. Such transactions are entered
only with Clients and Banks having agreements
in place.

) / [] /
/

a) The Risk Management Policies of the Bank

allows using of derivative products to hedge the
risk in Interest / Exchange rates that arise on
account of overseas borrowing / FCNR (B)
portfolio / the asset liability mis-match, for
funding overseas branches etc., and also to
offer derivative products on back-to-back basis
to customers.

)


-

b) The Bank has a system of evaluating the

derivatives exposures separately and placing
appropriate credit lines for execution of
derivative transactions duly reckoning the Net
Worth and security backing of individual clients.

)





-

c) The Bank has set in place appropriate control

systems to assess the risks associated in using
derivatives as hedge instruments and proper
risk reporting systems are in place to monitor all
aspects relating to derivative transactions. The
derivative transactions were undertaken only
with banks and counterparties well within their
respective exposure limit approved by

120

appropriate credit sanctioning authorities for

each counter party.

d) The Bank has set necessary limits in place for

using derivatives and its position is
continuously monitored.
e) The Bank has a system of continuous
monitoring and appraisal of resultant
exposures across the administrative hierarchy
for initiation of necessary follow up actions.

)



,
:

f)

)



/
, ,

Derivatives are used by the Bank to hedge the

Bank's Balance Sheet and offered to select
corporate clients on back-to-back basis. In
respect of hedge transactions the value and
maturity of hedges has not exceeded that of the
underlying exposure. In respect of back-toback transactions the transactions with clients
are fully matched with counter party bank
transactions and there is no uncovered
exposure.

g) The income from such derivatives are

amortised and taken to Profit and Loss Account
on accrual basis over the life of the contract. In
case of early termination of swaps undertaken
for Balance Sheet management, income on
account of such gains would be recognised
over the remaining contractual life of the swap
or life of the assets / liabilities whichever is
lower. In case of early termination of derivatives
undertaken for customers on a back-to-back
basis, income on account of such things will be
recognised on termination.

h) All the hedge transactions have been

accounted on accrual basis. Valuations of the
outstanding contracts are done on Mark to
Market basis. The Bank has duly approved Risk
Management and Accounting procedures for
dealing in derivatives.

)

- ()

i)

,

()

The derivative transactions are conducted in

accordance with the guidelines of Reserve
Bank of India.
Treasury (Domestic)
The Bank uses the Rupee Interest Rate Swaps
(IRS) for hedging purpose to mitigate interest
rate risk in Govt. Securities and to reduce the

121

cost of Subordinated Debt and term deposits.

In addition, the bank also enters into rupee
interest rate swaps for trading purposes as per
the policy duly approved by the Board. Swap
transactions are entered only with Banks
having ISDA agreements in place.

.
,

. (
), (
), (

), ,








.





.
17 -
( . 6)

122

a)

The Bank has put in place an appropriate

structure and organization for management of
risk which includes Treasury Department,
Asset Liability Management Committee and
Risk Management Committee of the Board.

b)

Derivative transactions carry Market Risk

(arising from adverse movement in interest
rates), credit risk (arising from probable
counter party failure), liquidity risk (arising
from failure to meet funding requirements or
execute the transaction at a reasonable price),
operational risk, regulatory risk and reputation
risk. The Bank has laid down policies, set in
place appropriate control systems to assess
the risks associated in using derivatives and
proper risk reporting and mitigation systems
are in place to monitor all risks relating to
derivative transactions. The IRS transactions
were undertaken with only Banks as counter
party and well within the exposure limit
approved by the Board of the Bank for each
counter party.

c)

Derivatives are used by the Bank for trading

and hedging. The bank has an approved
policy in force for derivatives and has set
necessary limits for the use of derivatives and
the position is continuously monitored. The
value and maturity of the hedges which are
used only as back to back or to hedge bank's
Balance Sheet has not exceeded that of the
underlying exposure.

d)

The Accounting Policy for derivatives has

been drawn up in accordance with RBI
guidelines, as disclosed in Schedule 17
Significant Accounting Policies (Policy No.6).

3.3.2

3.3.2 Quantitative Disclosures

(. )

(i)

( )
]
]

(ii)

(iii)
(iv)

v)

2104.65
309.55

(Rs. in Crore)

SI.
No.

(i) Derivatives (Notional Principal

Amount)
a) For Hedging
b) For Trading

2614.03
955.39

] (+)
(-)

334.41
22.22

15.00
-37.80

518.82

35.21

9.19
4.03

CURRENCY

INTEREST RATE

DERIVATIVES

DERIVATIVES

2104.65
309.55

2614.03
955.39

(ii) Marked to Market Positions

a) Asset (+)
b) Liability (-)

334.41
22.22

15.00
-37.80

(iii) Credit Exposure

518.82

35.21

50.43
7.00

48.13
24.53

(iv) Likely impact of one percentage

change in interest rate (100*PV01)

(100*01)
]
50.43
48.13
7.00
24.53
]
100*01
]
63.14 60.26

46.32 19.42
]

PARTICULARS

a) on hedging derivatives
b) on trading derivatives
v) Maximum and Minimum of
100*PV01 observed during the year

30.45
24.66

4.
4.1.1 ()

a) on hedging

Maximum 63.14 Maximum 60.26

Minimum 46.32 Minimum 19.42

b) on trading

Maximum
Minimum

9.19 Maximum 30.45

4.03 Minimum 24.66

4. ASSET QUALITY:
4.1.1 Non-Performing Assets (NPAs)
(. )

I)

(%)

ii)

()
)
)
)
)

iii)

iv)

)
)
)
)

( )
)
)
) /

)

2010 - 11

2009 - 10

1.19

2.52

(Rs. in Crore)
SI.
No.

PARTICULARS

i) Net NPA to Net Advances(%)

2010 - 11

2009 - 10

1.19

2.52

ii) Movement of NPAs (Gross)

3611.08

1923.41

a) Opening Balance

3611.08

1923.41

2169.26

3126.83

b) Additions during the year

2169.26

3126.83

2690.75

1439.16

c) Reductions during the year

2690.75

1439.16

3089.59

3611.08

d) Closing Balance

3089.59

3611.08

1994.97

999.14

912.47

2097.21

b) Additions during the year

1579.02

1101.38

1328.42

1994.97

iii) Movement of Net NPAs

a) Opening Balance

1994.97

999.14

912.47

2097.21

c) Reductions during the year

1579.02

1101.38

d) Closing Balance

1328.42

1994.97

iv) Movement of Provisions for NPAs

(excluding provisions on standard assets)
1363.79

752.04

1256.79

118 3.66

970.52

571.91

1650.06

1363.79

a) Opening balance

1363.79

752.04

b) Provisions made during the year

1256.79

118 3.66

970.52

571.91

1650.06

1363.79

c) Write-off/Write-back of
excess provisions
d) Closing balance

123

4.1.2 :
31.03.2011
()
70.45 %

4.1.2 Provision Coverage Ratio

4.2.

4.2 Particulars of Accounts Restructured

The Provision Coverage Ratio (PCR)

computed as per the RBI guidelines stood at
70.45% as on 31.03.2011.

(. )

(Rs. in Crore)
CDR
SME Debt Others
Mechanism Restructuring

.

( )

15
595.96

796
704.39

3913
5251.52

21.28

9.78

89.26

.

( )

93
31.35

235
259.67

0.21

6.69

.

( )

2
0.01

67
121.69

4.36

.

( )

15
595.96

891
735.75

4215
5632.88

21.28

9.99

100.31

No. of Borrowers
Amount outstanding
Sacrifice (diminution
in the fair value)

15
595.96

796
704.39

3913
5251.52

21.28

9.78

89.26

Sub standard No. of Borrowers

advances
Amount outstanding
restructured Sacrifice (diminution
in the fair value)

Nil
Nil

93
31.35

235
259.67

Nil

0.21

6.69

No. of Borrowers
Amount outstanding
Sacrifice (diminution
in the fair value)

Nil
Nil

2
0.01

67
121.69

Nil

Nil

4.36

No. of Borrowers
Amount outstanding
Sacrifice (diminution
in the fair value)

15
595.96

891
735.75

4215
5632.88

21.28

9.99

100.31

Standard
advances
restructured

Doubtful
advances
restructured

TOTAL

4.3 /
:

4.3 Details of Financial Assets sold to

Securitisation / Reconstruction Company
for Asset reconstruction

(. )

(i)

(Rs. in Crore)

2010- 11 2009 - 10

Particulars

(i) No. of accounts

37

Nil

(ii) Aggregate value (net of provisions)

of accounts sold to SC/RC

213.52

213.52

Nil

265.02

(iii) Aggregate consideration

265.02

Nil

Nil

51.50

(iv) Additional consideration realized in

respect of accounts transferred in
earlier years

51.50

Nil

37

(ii) /

[ ]
(iii)
(iv)
(v) - /

2010- 11 2009 - 10

(v) Aggregate gain/loss over net

book value

124

4.4

4.4

Details of non-performing financial assets

purchased/sold from other banks

4.4.1 Details of non-performing financial assets

purchased:

4.4.1
(. )

1.

[]
[]

2. []

(Rs. in Crore)

Particulars

2010 - 11 2009 - 10

[]

2010 - 11 2009 - 10

1. (a) No. of accounts purchased during the year

(b) Aggregate outstanding
2. (a) Of these, number of accounts restructured
during the year
(b) Aggregate outstanding

4.4.2.

Nil
Nil

Nil

Nil

Nil

Nil

4.4.2 Details of non-performing financial assets

sold:

(. )

Nil
Nil

(Rs. in Crore)

2010 - 11 2009 - 10

Particulars

2010 - 11 2009 - 10

1.

1. No. of accounts sold

2.

2. Aggregate outstanding

Nil

Nil

3.

3. Aggregate consideration received

Nil

Nil

4.5

(Rs. in Crore)

2010 - 11 2009 - 10

Particulars

2010 - 11 2009 - 10

430.29

Provisions towards Standard Assets

430.29

362.79

5.

362.79

5 BUSINESS RATIOS
2010 - 11 2009 - 10

(i) 8.95%
(ii) 0.91%
(iii)

Nil

4.5 Provisions on Standard Assets

(. )

Nil

2.11%

Particulars

(i) Interest Income as a percentage

to Average Working Funds

8.85%
0.99%

1.59%

(iv)

0.71%

0.53%

(v) ( ) (. )

10.0 5

7.12

(vi) (. )

0.0416

0.0263

125

2010 - 11 2009 - 10

8.95%

8.85%

(ii) Non Interest Income as a percentage

to Working Funds
0.91%

0.99%

(iii) Operating Profit as a percentage

to Working Funds

2.11%

1.59%

(iv) Return on Average Assets

0.71%

0.53%

(v) Business (Deposits plus Advances)

per Employee (Rs. in crore)

10.0 5

7.12

(vi) Profit per employee (Rs. in crore)

0.0416

0.0263

6 ASSET LIABILITY MANAGEMENT:

Maturity pattern of certain items of assets and liabilities as on March 31, 2011
(Rs. in Crore)

Deposits

Advances
(Gross)

Investments
(Gross)

Borrowings

Foreign
Currency
Assets

Foreign
Currency
Liabilities

Day 1

1605.88

2435.54

476.39

154.13

2097.37

1337.95

2 to 7 days

4009.50

3782.80

6493.70

4213.61

1732.26

1718.33

8 to 14 days

4277.64

5326.98

1725.91

595.85

603.19

651.20

15 to 28 days

4373.71

2194. 25

1226.97

331.01

2176.91

1592.95

29 days to 3
Month
Over 3 Month &
up to 6 Month

16200.40

11680.80

6305.28

2192.50

5842.89

5158.83

15577.65

7622.63

4192.62

2527.99

5318.52

4796.90

Over 6 Month &

up to 1 year

22826.38

12734.21

7707.78

1743.16

2237.97

35 26.43

Over 1 year &

up to 3 years

70259.88

42273.58

17106.09

994.87

1564.19

2188.82

Over 3 years &

up to 5 years

2366.21

10488.41

1240.22

850.00

1182.84

1000.21

Over 5 years

3731.50

15252.27

2360.64

5752.28

1386.34

111.13

145228.75

113791.47

48835.60

19355.40

24142.48

22082.75

Total

6)
31 2011

(. )

()

2435.54

476.39

154.13

2097.37

1337.95

4009.50

3782.80

6493.70

4213.61

1732.26

1718.33

8 14

4277.64

5326.98

1725.91

595.85

603.19

651.20

15 28

4373.71

2194.25

1226.97

331.01

2176.91

1592.95

29 3

16200.40

11680.80

6305.28

2192.50

5842.89

5158.83

>3 6 15577.65

7622.63

4192.62

2527.99

5318.52

4796.90

>6 1 22826.38

12734.21

7707.78

1743.16

2237.97

35 26.43

>1 3 70259.88

42273.58

17106.09

994.87

1564.19

2188.82

>3 5

2366.21

10488.41

1240.22

850.00

1182.84

1000.21

>5

3731.50

15252.27

2360.64

5752.28

1386.34

111.13

145228.75

113791.47

48835.60

19355.40

24142.48

22082.75

()

1605.88

2 7

126

7.
7.1

)
I)
-
:




ii)

- -
[
, - , -
, - ,
,
, , ,
] -
()

iii)

iv)

::
-
-

) :
() ()
-

( +)

7 LENDING TO SENSITIVE SECTOR

7.1 Exposure to Real Estate Sector
(. )

(Rs. in Crore)

2010-11

2009-10

3740.78

3177.78

2815.24

2240.13

(a)

6960.75

501.75
1679.06

639.24
984.04

i)

iii)

iv)
0.09

0.32

--

--

158.38

15.00

ii)

iii)

iv)

, ,


, :
;
( / ),


/ /

,



/ /
/

,

3740.78

3177.78

Out of which, Individual housing loans

eligible to be classified under Priority
Sector

2815.24

2240.13

6330.86

6960.75

501.75
1679.06

639.24
984.04

0.09
--

0.32
--

158.38

15.00

2630.41

949.10

15041.33

12726.23

Commercial Real Estate Lending secured by mortgages on

commercial real estates (office buildings,
retail space, multi purpose commercial
premises,
multi-family
residential
buildings, multi-tenanted commercial
premises, industrial or warehouse
space,
hotels,
land
acquisition,
development and construction etc.)
Exposure includes non-fund based
(NFB) limits;
Real estate others:
- Liquirent Loans not under CRE
- Hotels and Hospitals
Investments in Mortgage Backed Securities
and other securitised exposures -

c.
(b)
2630.41

949.10

Others

Indirect Exposure : Fund based and non -fund

based exposures on National Housing Bank
(NHB) and Housing Finance Companies
(HFCs)
Total Exposure to Real Estate Sector

15041.33

(a+b)

12726.23

7.2 Exposure to Capital Market:

Particulars

(. )
i)

Residential Mortgages Lending fully secured by mortgages on

residential property that is or will be
occupied by the borrower or that is
rented;

a. Residential
b. Commercial Real estate

7.2

2009-10

Direct Exposure

ii)
6330.86

2010-11

Category

2010-11

490.07

0.71

direct investment made in equity

shares,
convertible
bonds,
convertible debentures and units of
equity oriented mutual funds the
corpus of which is not exclusively
invested in corporate debt;

490.07

348.80

(ii)

advances against shares/bonds/

debentures or other securities or on
clean basis to individuals for
investment in shares (including
IPOs/ESOPs), convertible bonds,
convertible debentures and units of
equity-oriented mutual funds.

0.71

10.81

(iii)

advances for any other purposes

where shares or convertible bonds
or co nvertible debentures or units of
equity oriented mutual funds are
taken as primary security;

711.96

896.26

(iv)

advances for any other purposes to

the extent secured by the collateral
security of shares or convertible
bonds or convertible debentures or
units of equity oriented mutual funds
i.e. where the primary security other
than
shares/convertible
bonds/
convertible debentures/ units of
equity oriented mutual funds does
not fully cover the advances;

167.95

186.28

348.80

10.81

896.26

167.95

186.28

127

2009-10

(i)

2009-10

711.96

(Rs. in Crore)
2010-11

(. )

2010-11

(Rs. in Crore)
Particulars

2009-10

;
v)

vi)

;


/ /

;

vii) /
;
viii)


;

146.77

141.89

Nil

Nil

Nil

Nil

Nil

Nil

0.42

x)

(
) ;

207.08

314.71

1724.54

1899.17

7.3

31.3.2011
()

4.38

6196.37

3.43

4193.84

2.17

1988.30

1133.91

1545.76

0.00

0.00

13746.06

6.55

9737.15

3.43

4.22
0.00

146.77

141.89

(vi)

loans sanctioned to corporates

against the securit y of
shares/bonds/debentures or other
securities or on clean basis for
meeting promoters contribution to
the equity of new companies in
anticipation of raising resources;

Nil

Nil

(vii) bridge loans to companies against

expected equity flows / issues;

Nil

Nil

(viii) underwriting commitments taken up

by the banks in respect of primary
issue of shares or conver tible bonds
or convertible debentures or units of
equity oriented mutual funds;

Nil

Nil

Nil

0.42

(ix)

financing to stockbrokers for margin

trading;

(x)

all exposures to Venture Capital Funds

(both registered and unregistered)
Total Exposure to Capital market

5.92
0.80
0.00

207.08

314.71

1724.54

1899.17

7.3 Risk Category-wise Country Exposure:

(Rs. in Crore)
Risk Category

31.3.2010 31.3.2010
()

8389.87

24.22

secured and unsecured advances to

stockbrokers and guarantees issued
on behalf of stockbrokers and
market makers;

(. )

31.3.2011

2009-10

(v)

Nil

ix)

2010-11

Exposure Provision
(net) as at held as at
31.3.2011 31.3.2011

Exposure
(net) as at
31.3.2010

Provision
held as at
31.3.2010

Insignificant

8389.87

4.38

6196.37

3.43

Low

4193.84

2.17

1988.30

Nil

Moderate

1133.91

Nil

1545.76

Nil

24.22

Nil

5.92

Nil

4.22

Nil

0.80

Nil

High
Very High
Restricted

0.00

Nil

0.00

Nil

Off-credit

0.00

Nil

0.00

Nil

13746.06

6.55

9737.15

3.43

Total

7.4 Details of Single Borrower Limit (SBL),

Group Borrower Limit (GBL) exceeded by
the bank:

7.4 (),
()
:

As per RBI guidelines and terms of Loan Policy

Document of our Bank for 2011, the
permissible level of Single Borrower exposure
ceiling is Rs. 1758.15 crore (15% of Capital
funds) and Rs.4688.40 crore for Group
Borrower limit (40% of Capital funds). SBL and
GBL in case of overseas branches was
enhanced to USD 40 Mio and USD 60 Mio
respectively with effect from 11.12.2010.

2011

1758.15
( 15 % )
4688.40 ( 40 %)
40
60 11.12.2010

128

(Rs. in Crore)

(. )

.
1.

31.03.2011


2000

1758.15
2300

2.

3.

4.

From
11.12.10
15.11.10
to 05.12.10
From
22.01.11
6.12.10

Sl. Name of
No. the
Borrower

Exposure
ceiling

1.

1758.15

2000
2297

2.

89.19
(USD 20.00

178.34
27.09.10 (USD 39.99
Mio)#

89.19
. (USD20.00

167.03
29.04.10 (USD 37.456
Mio)

133.79
Since
(USD 30.00
availment
Mio)
Mio)#
439.26
Since
(USD 48.50
availment
Mio)
Mio)

15.11.10

HDFC Ltd

2300
317.94
(USD71.50
Mio)

89.19
445.95
Since
(USD 20.00 (USD100.00
availment
Mio)
Mio)

Limit
Period
Sanctioned during
which
limit
exceeded

40
40

Global
Supplies
UAE FZE

Board
Position
sanction as on
details
31.03.2011
Outstanding

From
15.11.10
11.12.10
to 05.12.10
From
22.01.11
6.12.10
Since
availment

15.11.10

3.

Intra Asia
89.19
133.79
Trading Pte (USD 20.00 (USD 30.00
Ltd.
Mio)
Mio)#

Since
availment

178.34
27.09.10 (USD 39.99
Mio)#

4.

Gold Matrix
89.19
439.26
Resources (USD20.00 (USD 48.50
Pte Ltd.
Mio)
Mio)

Since
availment

167.03
29.04.10 (USD 37.456
Mio)

8.

8.
8.1

MISCELLANEOUS

8.1 Amount of provisions made for Income Tax

during the year:

(. )
()
()

472.03

( 94 .03 )

(Rs. in Crore)

2009 - 10

418.22

2010 - 11

45.94

418.22

45.94

250.74

Provision for Minimum

Alternate Tax (MAT)

472.03

250.74

(250.74)

MAT Credit Entitlement

( 94 .03 )

(250.74)

8.2 Disclosure of Penalties imposed by RBI

NIL
8.3 Provisions and Contingencies Break-up

8.3 -
(. )

(Rs. in Crore)

Break up of 'Provisions and Contingencies' 2010- 11 2009-10

shown under the head Expenditure in
Profit and Loss Account

2010- 11 2009-10

1.23

-120.02

Provisions for depreciation on Investment

1033.62

919.46

Provision towards NPA

65.97

6.01

( )

519.68

271.99

167.59

60.22

2009 - 10

Provision for Income Tax (net)

8.2
:

" "

317.94
(USD71.50
Mio)

89.19
445.95
(USD 20.00 (USD100.00
Mio)
Mio)

# Limits to the captioned borrower was enhanced to USD 40

Mio vide MCB sanction of 10.2.2011 and this sanction is
within the revised SBL of USD 40 Mio.

10-02-2011

2010 - 11

2297

1.23

-120.02

1033.62

919.46

65.97

6.01

Provision made towards Income Tax

(including Deferred Tax & Wealth Tax)

519.68

271.99

Other Provision and Contingencies

167.59

60.22

Provision towards Standard Assets

TOTAL

1788.09 1137.66

129

1788.09 1137.66

8.4

8.4 Floating Provisions

(Rs. in Crore)

(. )

2010-11

2009-10

171.36

171.36

171.36

171.36

Particulars
(a)

(b)

(c)

(d)

(a)
120
(b)

()

2456

()

2420

(c)
(d)

156

8.5.2
()

()

8.6 - ()
-
31.03.2011 -

The quantum of floating

provisions made in the
accounting year

Nil

Nil

Amount of draw down made

during the accounting year

Nil

Nil

Closing balance in the floating

provisions account

171.36

171.36

No. of complaints pending at the

beginning of the year

120

No. of complaints received during

the year

2456

No. of complaints redressed during

the year

2420

No. of complaints pending at the

end of the year

156

8.5.2 Awards passed by the Banking

Ombudsman

()

()

171.36

8.5.1 Customer Complaints

8.5.1

()

171.36

8.5 Disclosure of complaints

8.5

()

Opening balance in the

floating provisions account

2010-11 2009-10

(b) No. of Awards passed by the Banking

Ombudsman during the year

(c) No. of Awards implemented during the

year

(d) No. of unimplemented Awards at the

end of the year

8.6 Letters of Comfort (LoC)

(a) No. of unimplemented Awards at the

beginning of the year

130

Letters of Comfort issued during the year

One

Letters of Comfort outstanding as on 31.3.2011

Two

Assessed financial impact

Nil

Cumulative Assessed Financial Obligation

Nil

 2009-10 ()

During the year 2009-10, the Bank has issued a

Letter of Comfort (LOC) undertaking to
maintain a minimum CRAR of 12% in respect of
Bangkok branch.

12%

During the year 2010-11, the bank has issued a

letter of comfort favoring Bank Negara
Malaysia. The Bank in association with other
JV partners will provide support to India
International Bank (Malaysia) Bhd in funding,
business and other matters as and when
required and ensure that it complies with the
requirements of the Malaysian laws,
regulations and policies in the conduct of its
business operations and management.

2010-11
,
() ,

,

8.7
2010 - 11

8.7 Unsecured Advances

(. )

(Rs. in Crore)

2009 - 10

1092.69

1292.01

Total amount for which intangible

securities such as charge over the
rights, licences authority, etc., has
been taken

3418.68

7218.87

Estimated value of such intangible

collateral

8.8
*

12.49

8.96

2.

6.13

3.89

3.

0.36

0.45

--

--

4. ( )

SI. Nature of income

No

18.98

13.30

1292.01

3418.68

7218.87

For selling Life Insurance Policies

2.

2010 - 11 2009 - 10
12.49

8.96

For selling Non Life Insurance

Policies

6.13

3.89

3.

For Selling Mutual Fund products

0.36

0.45

4.

Others (specify)

--

--

18.98

13.30

*Fees/Remuneration received in respect of the

Bancassurance Business undertaken by the Bank.

9. D I S C L O S U R E S I N T E R M S
ACCOUNTING STANDARDS

9.1 15 -

ii)

1.

Total

* /

I)

1092.69

(Rs. in Crore)

2010 - 11 2009 - 10

1.

2009 - 10

8.8 Bancassurance Business

(. )

2010 - 11

01 2007
15 ( )

OF

9.1 Accounting Standard 15 Employee

Benefits
i) The Bank had adopted Accounting Standard 15
(Revised) Employees Benefits issued by the
Institute of Chartered Accountants of India, with
effect from 1st April 2007.

.178 . 31 03 2011
.89

131

 .89

ii) The balance of unrecognised Transitional

Liability on account of Employee Pension
amounted to Rs.178 Crore at the beginning of
this year. A sum of Rs.89 Crore has been
charged to Profit & Loss Account of the current
year ended 31.03.2011. The balance
Unrecognized Liability of Rs.89 crore is being
carried forward to be charged off in the next
year.

iii) -15( )
-
:

iii) The summarized position of Post-employment

benefits and long term employee benefits
recognized in the Profit & Loss Account and
Balance Sheet as required in accordance with
Accounting Standard15 (Revised) are as
under:

()

()
2011

2049.47 1709.90

2010

2011

Changes in the present value of the obligations

(Rs. in Crore)

2010

PENSION
(Funded)
2011
2010

523.28 507.34 264.35 254.00

136.79

36.40

39.26

20.00

18.48

68.62

31.10

44.71

26.91

16.43

15.22

Present Value of
obligation as at the
beginning of the year 2049.47 1709.90
Interest Cost

(222.01) (104.43) (136.66) (33.20) (28.79) (15.13)

/ ()

()
2011

(a) Defined Benefit Schemes:

( )

155.08

2010

(. )

Current Service Cost

Benefits Paid

26.56

276.11

3863.32 2049.47

155.42 (17.03)

13.41

(8.22)

Actuarial loss/(gain)
on Obligations
Present Value of
Obligation at year
end

869.45 523.28 285.40 264.35

()
2011

2010

1816.97 1709.90
195.38 115.43

2011

2010

676.06 507.34
62.18

55.58

3256.40 1816.97

--

178.00

--

--

39.26

20.00

18.48

44.71

26.91

16.43

15.22

26.56

276.11 155.42 (17.03)

3863.32 2049.47

PENSION
(Funded)

0.00

Fair Value of Plan Assets

at the beginning of the
year
1816.97 1709.90

0.00

0.00

Expected return on Plan

Assets

2011

2010

195.38 115.43

Employers contribution 1472.47 366.12

84.00 180.00 28.79 15.13

672.20 676.06

36.40

31.10

0.00

1472.47 366.12

136.79

68.62

2010

(222.01) (104.43) (136.66) (33.20) (28.79)(15.13)

(13.38) (33.66)

523.28 507.34 264.35 254.00

155.08

2011

(6.41) (92.05)

(Funded)
2011
2010

13.41

(8.22)

869.45 523.28 285.40 264.35

Change in Fair Value of Plan Asset

/ ()

LEAVE
ENCASHMENT
(Un Funded)
2011
2010

(222.01) (104.43) (136.66) (33.20) (28.79) (15.13)

( )

()

GRATUITY

Benefit Paid

GRATUITY
(Funded)
2011

LEAVE
ENCASHMENT
(Un Funded)
2010 2011 2010

676.06 507.34
62.18

55.58

0.00

0.00

0.00

0.00

84.00 180.00 28.79 15.13

(222.01) (104.43) (136.66) (33.20) (28.79)(15.13)

0.00

Actuarial loss/(gain) on
Obligations

(6.41) (92.05)

(13.38) (33.66)

0.00

0.00

0.00

0.00

Fair Value of Plan Asset

at the end of the year
3256.40 1816.97

672.20 676.06

0.00

0.00

--

--

--

--

0.00

Unfunded Transitional
Liability

132

--

178.00

--

--

Amount recognized in Balance Sheet

(. )

()
2011

( )

()

2010

2011

(Rs. in Crore)

2010

2011

PENSION
(Funded)
2011

2010

2010

2011

2010

Estimated Present value

of obligations as at the
end of the year
3863.32 2049.97 869.45 523.28 285.40 264.35
3863.32 2049.97 869.45

3256.40 1816.97 672.20

606.92*

523.28 285.40 264.35

676.06

0.00

Actual Fair value of Plan

Assets as at the end of
the year
3256.40 1816.97 672.20 676.06

0.00

Un-funded Net Liability

232.50 197.25* (141.46) 285.40 264.35

() /

68.62

31.10

44.71 26.91 16.43 15.22

Current Service Cost

155.08 136.79

36.40 39.26 20.00 18.48

Interest Cost

32.97

368.16

2010

2011

PENSION (Funded)

2010

15

(Rs. in Crore)

2011

(195.38) (115.43)

2011

(62.18) (55.58)

0.00

2010

Expected return on Plan

Asset

0.00

168.80 16.63 13.41 (8.22)

68.62

31.10

44.71 26.91 16.43 15.22

155.08 136.79

36.40 39.26 20.00 18.48

32.97
--

--

391.00 420.62

--

--

11.32

--

Total expenses recognized

in Profit & Loss Account

169.00 38.54 49.84 25.48

840.00 - -

368.16
--

391.00 420.62

Amount received from II

Pension Optees / Employers
840.00
Contribution of PF

- NA -

2011

LEAVE
ENCASHMENT
(Un Funded)
2010 2011 2010

2010

Effect of limit as per AS15R

--

GRATUITY
(Funded)

2011

(195.38) (115.43)

Net Actuarial (Gain)/Loss

recognized in the year

606.92* 232.50 197.25*(141.46) 285.40 264.35

( )

()

0.00

Expenses Recognized in Profit & Loss

(. )

()

0.00

* The un-funded net liability in Pension and Gratuity Funds,

are to be amortised over a period of next 4 years.

(62.18) (55.58)

0.00

0.00

168.80 16.63 13.41 (8.22)

--

--

11.32

--

169.00 38.54 49.84 25.48

- NA -

- NA-

-NA-

- NA-

- - - - - - - -

Investment percentage maintained by Pension

& Gratuity Trust:

) :

(Rs. in Crore)

(. )
(%)

(%)

2011

2011

2010

Pension Trust (%) Gratuity Trust (%)

2011

2010

2011

2010

9.39

18.68

8.80

18.88

State Government Securities 27.61

31.25

42.33

29.51

Investment in PSU/PFI/
Corporate Bonds

41.49

40.92

42.70

38.51

Other Investments

21.51

9.15

6.17

13.10

b) Equity Instruments

Nil

Nil

Nil

Nil

2010
a) Debt Instruments
Central Government
Securities

9.39

18.68

8.80

18.88

27.61

31.25

42.33

29.51

/ /

41.49

40.92

42.70

38.51

21.51

9.15

6.17

13.10

LEAVE
ENCASHMENT
(Un Funded)
2011 2010

GRATUITY
(Funded)

133

) - (
)

Principal actuarial assumptions at the Balance

Sheet Date (expressed as weighted average)

(. )

()

()

2011 2010

2011 2010

(Rs. in Crore)

( )
2011

PENSION
(Funded)

2010

GRATUITY
(Funded)

2011 2010

LEAVE
ENCASHMENT
(Un Funded)

2011 2010

2011

2010

8.50% 8.00% 8.29% 8.00% 8.29% 8.00%

Discount Rate

9.10% 8.00% 9.57% 9.57%

Expected rate of return on

9.10% 8.00% 9.57% 9.57%
Plan Assets

0%

0%

Expected Rate of Salary

increase

3%

4%

3%

4%

3%

4%

0%

0%

3%

4%

Method used

8.50% 8.00% 8.29% 8.00% 8.29% 8.00%

3%

4%

3%

Projected unit
credit

4%

Projected unit
credit

Experience Adjustments
(. )

Projected unit
credit

()
2011 2010

() /

(6.41)

() /

(219.39)

()
2011

2010

(Rs. in Crore)

( )

Particulars

PENSION
(Funded)

GRATUITY
(Funded)

2011 2010

2011

2011 2010

* (13.38) (33.66)

Nil

LEAVE
ENCASHMENT
(Un Funded)
2010 2011 2010

Experience adjustment on

Nil

Plan Assets (Loss)/Gain

* (207.58) (21.67) (30.54) (9.30)

(6.41)

* (13.38) (33.66)

Nil

Nil

Experience adjustment on
Plan Liabilities (Loss)/Gain (219.39)

* (207.58) (21.67) (30.54) (9.30)

* The information for experience adjustments for the

previous year are not available.

,
, , ,

The estimates of future salary increases,

considered in actuarial valuation, take into account
actual return on plan assets, inflation, seniority,
promotion and other relevant factors, such as
supply and demand in employee market.

In respect of overseas branches, disclosures if any,

required for Employee Benefit Schemes are not
made in the absence of information.

134

(b)

()
: ( -

The financial assumptions considered

for the calculations are as under:
Discount Rate: The discount rate has been
chosen by reference to market yield on
government bonds as on the date of
valuation. (Balance sheet date
31.03.2011)

31.03.2011)

:

Expected Rate of Return: In case of

Pension and Leave Encashment, the
expected rate of return is taken on the
basis of yield on government bonds. In
case of gratuity, the actual return has been
taken.

Salary Increase: On the basis of past

data.

()
.90 ( -
)

(c)

Bank's best estimate expected to be paid

in next Financial Year for Gratuity is Rs.90
crore (Previous year NIL).

(d)

The contribution on account of Defined

Contribution Scheme Provident Fund
Rs.780.65 crore (previous year Rs.716.16
crore), out of which an amount of
Rs.763.08 crore has been transferred to
Pension Fund from PF Fund on account of
II option of pension.

() -
.780.65 ( .716.16 ) .763.08

135

9.2

Accounting Standard 17 Segment Reporting

The bank has adopted Reserve Bank of India's revised guidelines issued in April 2007 on Segment
Reporting in terms of which the reportable segments have been divided into Treasury,
Corporate/Wholesale Banking, Retail Banking and Other Banking Operations.
Part A: Business Segments
(Rs. in Crore)
Business
Segments
Particulars
Revenue
Result
Unallocated
Inc ome
Unallocated
Expenses
Operating
Profit/Loss
Income
Taxes
Provisions &
Contingencies
Extraordinary
profit / loss
Net Profit

Treasury

Retail Banking

Corporate /
Wholesale
Banking

Other Banking
Operations

TOTAL

2010 -11

200 9 -10

2010 -11

2009 -10

2010 -11

2009 -10

2010 -11

2009-10

2010-11

2009-10

3336.13
71.84

2892.04
33.29

5472.83
1113.03

4862.74
901.06

3992.78
1516.36

3269.72
975.14

498.37
133.13

350.84
-78.36

13300.11
2834.36

11375.34
1831.13

26.46

13.68

41385.24

80580.09

0.19

0.19

2860.63

1844.62

519.68

271.99

1186.24

783.50

-82.17
1072.54

- 82.17
706.96

2076.97 177298.37

129713.89

1485.91
178784.28

1377.74
131091.63

1526.60 168811.57

123163.98

647.77

403.07

169459.34

123567.05

OTHER INFORMATION
Segment
Assets
Unallocated
Assets
Total assets
Segment
Liabilities
Unallocated
Liabilities
Total
Liabilities

53667.30

50622.34

36982.33

76573.40

52492.03

41024.36

51131.13

40771.36

33759.65

33523.92

2026.62

844.47

9.2 17 -
2007 ,
, / ,
:
(. )

2010 -11
200 9 -10

3336.13
2892.04
71.84
33.29

/


/


53667.30 41385.24


50622.34 36982.33

2010 -11

2009 -10

2010 -11

2009 -10

2010 -11

2009-10

2010-11

2009-10

5472.83
1113.03

4862.74
901.06

3992.78
1516.36

3269.72
975.14

498.37
133.13

350.84
-78.36

13300.11
2834.36

11375.34
1831.13

26.46

13.68

0.19

0.19

2860.63

1844.62

519.68

271.99

80580.09

76573.40

52492.03

51131.13

41024.36

40771.36

136

33759.65

33523.92

2026.62

844.47

1186.24

783.50

-82.17
1072.54

- 82.17
706.96

2076.97 177298.37

129713.89

1485.91
178784.28

1377.74
131091.63

1526.60 168811.57

123163.98

647.77

403.07

169459.34

123567.05

Part B - Geographic segments

-
(. )

Domestic

2010 -11

2009 -10

2010 - 11

2009 - 10

2010 - 11

2009 -10

12825.36

10928.21

501.21

460.81

13326.57

11389.02

166353.49 121739.36 12430.79

(Rs. in Crore)

Revenue

9352.27 178784.28 131091.63

Assets

International

2010 -11

2009 -10

2010 - 11

12825.36

10928.21

501.21

166353.49 121739.36 12430.79

Total

2009 - 10

2010 - 11

2009 -10

460.81

13326.57

11389.02

9352.27 178784.28 131091.63

9.3 18 -

9.3 Accounting Standard 18- Related Party

Disclosures

Names of the related parties and their

relationship with the bank

1.

2.

Parent

Indian Overseas Bank

Associates

Pandyan Grama Bank

Neelachal Gamya Bank

3.

3.

Subsidiaries

None

4. :

() .

4.

Jointly controlled entity

India International Bank (Malaysia) Bhd.

5.

5. Key Management Personnel

*
(.)
(2010-11)

1. .

2.

12,37,503

3. ..

7,05,250

4. ..

5. ..

2010-11

1072.54

Remuneration*
Amount (Rs.)
(2010-11)

Shri. M. Narendra

Chairman & Managing

Director

2.

Smt. Nupur Mitra

Executive Director

12,37,503

3.

Shri. A.K. Bansal

Executive Director

7,05,250

4.

Shri S.A. Bhat

Ex-Chairman & Managing

Director

5.

Shri Y.L. Madan

Ex-Executive Director

5,85,125

15,33,867
7,34,508

7,34,508

*Remuneration includes salary & allowances, salary

arrears, performance incentives, leave encashment
arrears and gratuity arrears.

9.4 20 -

9.5 21 ()

1.

15,33,867

* , , ,

(. )

Designation

5,85,125

Sl. Name
No.

9.4 Accounting Standard 20 Earning Per Share

2009-10

706.96

54,64,20,808 54,48,00,000

Particulars

2010-11

2009-10

Net Profit after Tax available for Equity

Shareholders (Rs. In Crore)

1072.54

706.96

Weighted Average Number of Equity Shares 54,64,20,808 54,48,00,000

Rs.19.63

Rs.12.98

Basic & Diluted Earnings Per Share

Rs.19.63

Rs.12.98

Rs.10.00

Rs.10.00

Nominal value per Equity Share

Rs.10.00

Rs.10.00

9.5 Accounting Standard 21 - Consolidated

Financial Statements (CFS)

As there is no subsidiary, no consolidated

financial statement is considered necessary.

137

9.6

22 :

9.6 Accounting Standard 22: Accounting for

Taxes on Income

, .101.09
( .225.70
) .270.61
(
. 169.12 )

:

31.03.2011

31.03.2010

496.92

388.74

6.21

7.46

148.95

138.41

9.89

9.23

61.26

64.52

The Bank has accounted for Deferred Tax

Liability of Rs.101.09 crore during the year
(Previous year Deferred Tax Liability of
Rs.225.70 crore). The Bank has outstanding
net Deferred Tax Liability of Rs.270.61 crore
(Previous year Deferred Tax Liability of
Rs.169.12 crore). The breakup of deferred tax
assets and liabilities into major items is given
below:
31.03.2011
DTA
DTL
Depreciation on Investments
Depreciation on Fixed Assets

270.61

388.74

6.21

7.46
138.41

Others
Total

9.89

9.23

61.26

64.52

226.31 496.92 219.62 388.74

Net DTA / DTL

169.12

496.92

Provision for Employee Benefits 148.95

Provision for Frauds

226.31 496.92 219.62 388.74

31.03.2010
DTA
DTL

270.61

169.12

9.7 Accounting Standard 26 Intangible Assets

9.7 26 -

:

-

The application software in use in the bank has

been developed in-house and has evolved
over a period of time. Hence, the costs of
software is essentially part of Bank's
operational expenses like wages etc. and as
such are charged to the respective heads of
expenditure in the Profit and Loss Account.

9.8 27 -

9.8 Accounting Standard 27 Financial

Reporting of Interests in Joint Ventures
Bank has signed a Joint Venture with Bank of
Baroda and Andhra Bank to open a bank in
Malaysia. Bank Negara, the Central Bank of
Malaysia, has issued the licence to the Joint
Venture on 16.04.2010. The Joint Venture has
been incorporated at Malaysia on 13.08.2010
in the name of INDIA INTERNATIONAL BANK
(MALAYSIA) BHD, with a total capital of MYR
300 Mio, Our bank share is 35% - MYR 105
Mio. Our bank has so far subscribed to 14035
shares of MYR 10 each towards preliminary
expenses of the Joint Venture aggregating to
MYR140350 (INR0.21 crore). The Joint
Venture is expected to commence operations
shortly.

, 16.04.2010

13.08.2010 ()

300 35%
105
10 14035

140350 ( . 0.21 )

138

9.9 28 -

9.9 Accounting Standard 28 Impairment of

Assets

28

Fixed Assets owned by the Bank are treated as

'Corporate Assets' and are not 'Cash
Generating Units' as defined by AS28 issued
by ICAI. In the opinion of the Management,
there is no impairment of any of the Fixed
Assets of the Bank.

9.10 29 -

9.10 Accounting Standard 29 - Provision for

Contingent Liabilities and Contingent
Assets:

The guidelines issued by the Institute of

Chartered Accountants of India in this respect
have been incorporated at the appropriate
places.

10. , ,

10.1
(. )

10 Concentration of Deposits, Advances,

Exposures and NPAs
10.1 Concentration of Deposits
(Rs. in Crore)

2010 - 11 2009 - 10

16740

14125

11.53

12.75

2010 - 11 2009 - 10
Total Deposits of twenty largest depositors
Percentage of Deposits of twenty largest
deposits to Total Deposits of the bank

10.2

10.3

23359

20.53%

/
/

10.4

14.34%

2009 - 10
Total Advances to twenty largest borrowers

9057

Percentage of Advances to twenty largest

borrowers to Total Advances of the bank

11.21%

20.53%

9057

11.21%

(Rs. in Crore)
2010- 11 2009 - 10
Total Exposure to twenty largest borrowers /
customers

16727

Percentage of Exposures to twenty largest

borrowers/ customers to Total Exposure of
the bank on borrowers/ customers

14. 08 %

23889

14.34%

16727

14. 08 %

10.4 Concentration of NPAs

(. )

307.41

23359

2009 - 10

10.3 Concentration of Exposures

(Rs. in Crore)

2010 - 11 2009 - 10

2010 - 11 2009 - 10

12.75

(Rs. in Crore)

(. )

23889

11.53

2010 - 11

2010- 11 2009 - 10

14125

10.2 Concentration of Advances

(. )
2010 - 11

16740

Total Exposure to top four NPA accounts

660.48

139

307.41

660.48

10.5 SECTOR-WISE NPAs

10.5 -

Sl.
No.

Percentage of NPAs to
Total Advances in that
Sector

Sector

2010 - 11

2009 - 10

2.78

1.33

Agriculture & allied activities

Industry (Micro & small, Medium

and Large)

3
4

(, , )

3.45

5.99

1.94

4.20

2.01

3.37

2010 - 11

2009 - 10

2.78

1.33

Services

3.45
1.94

5.99
4.20

Personal Loans

2.01

3.37

10.6 MOVEMENT OF NPAs

10.6

(Rs. in Crore)

(. )

2010 - 11

Particulars

2009 - 10

2010 - 11

2009 - 10

Gross NPAs as on 1 st April 2010 (Opening

01 2010
( )

3611.08

1923.41

Balance)

3611.08

1923.41

( )

2169.26

3126.83

Additions (Fresh NPAs) during the year

2169.26

3126.83

- ()

5780.34

5050.24

Sub - total (A)

5780.34

5050.24

688.33

547.82
688.33

547.82

1031.90

502.78

970.52

388.56

2690.75

1439.16

3089.59

3611.08

Less: -

i.

(i) Up gradations

ii. (
)
iii.
- ()

1031.90

502.78

970.52

388.56

2690.75

1439.16

(ii) Recoveries (excluding recoveries

made from upgraded accounts)
(iii) Write-offs
Sub - total (B)

31-03-2011
( ) (-)

3089.59

Gross NPAs as on 31.0 3.2011 (Closing

3611.08

Balance) (A - B)

10.7 ,

10.7 OVERSEAS ASSETS, NPAs AND REVENUE

(. )

2010 - 11

(Rs. in Crore)

2009 - 10

Particulars
Total Assets

2009 - 10
9352.27

9352.27

296.16

169.41

Total NPAs

296.16

169.41

501.21

460.81

Total Revenue

501.21

460.81

10.8 (
)

10.8

OFF-BALANCE SHEET SPVs SPONSORED

(WHICH ARE REQUIRED TO BE
CONSOLIDATED AS PER ACCOUNTING
NORMS)

2010 - 11
12430.79

12430.79

Name of the SPV sponsored

11
, , :
/

Domestic

Overseas

NIL

NIL

11 Comparative Figures:
Previous year's figures have been regrouped /
rearranged wherever necessary.

140



31-03-2011
(. '000 )

31.3.2011

FROM

ACTIVITIES
CASH
FLOW
OPERATING

Net
Profit

Adjustments
for
:
ofHTM

Amortisation
Investments
52 99 61

Loss on Revaluation of Investments

52 92 13
on
Fixed
Assets
Depreciation
105 00 10
/Loss
on
Sale
of/ Assets

Profit
(1 02 25)

Revaluation of Assets / Contracts

(2 02 61)

Provision for taxes

519 68 49
for


Provision
NPAs
10 33 61 76
for
Standard

Provision
Assets
65 97 03

Depreciation on Investments
4 12 18

Provision for Other Items

1 64 69 58
IIPaid


Interest
onTier
II Capital
4 78 45 49
/ (Decrease)
/ () in Deposits
Increase
3 44 34 04 01

/
(

)
Increase / (Decrease) in Borrowings
84 06 20 27

Increase / (Decrease) in Other Liabilities

/ ()
& Provisions
(8 39 50 79)

/
(

)
(Increase) / Decrease in Investments
(110 65 80 87)
/Decrease
/ () in Advances
(Increase)
(3 28 33 81 82)

/ (in
)Other Assets
(Increase)
/ Decrease
(11 40 87 24)

Direct Taxes Paid

(5 34 27 00)
()

NET CASH FLOW FROM OPERATING ACTIVITIES (A)

FLOW
FROM

ACTIVITIES
CASH
INVESTING
)

i
i) Sale / disposal of Fixed/ Assets
11 75 02
ii)

ii) Purchase of Fixed Assets

(1 10 85 40)
(
)

NET CASH FROM INVESTING ACTIVITIES (B)

FLOW
FROM
FINANCING
ACTIVITIES
CASH
) ofEquity
Share
Issue
i) iProceeds
10 53 99 99
)

II

ii
ii) Proceeds of Tier I & Tier II Bonds

i) II ofTier
iii)iiRedemption
II Bonds
0
) IIPaid
on
Tier
II
iv)ivInterest
Capital
(4 78 45 49)

v)v)
Dividend
Paid
(2 22 34 96)
NET
CASH
(C)
()

FROM
FINANCING
ACTIVITIES
NET INCREASE IN CASH AND CASH

+(C)
(+ +)
EQUIVALENTS
(A)+(B)
141

31.3.2010

1072 54 27

7 06 96 15
1 14 47 33
53 33 17
1 11 75 94
(1 60 74)
(28 70 12)
2 71 99 81
9 19 45 61
6 00 87
(1 20 01 99)
60 21 60
3 93 19 13
1 06 78 82 15
(24 37 38 05)
(5 62 18 53)
(66 02 92 88)
(41 18 65 31)
(1 85 66 62)
(4 69 27 00)

(27 07 66)

(12 10 19 48)
20 94 69
(1 52 99 69)

(99 10 38)
0
19 67 00 00 11 00 00 00
(1 75 00 00)
(3 93 19 13)
(2 86 82 49)
23 20 19 54
21 94 01 50

(1 32 05 00)

2 44 98 38
(10 97 26 10)

CASH
EQUIVALENTS

AND
CASH

ATTHE
BEGINNING OF THE YEAR
Cash
&
Balances
with
RBI
76 66 44 72
..
& Money at Call
21 58 19 35
Balances
with
Banks
-
CASH
EQUIVALENTS
THE END OF THE YEAR

AND
CASH

AT

Cash
&
Balances
with
RBI
..
& Money at Call
Balances
with
Banks
-

1 00 10 89 43
20 07 76 14

98 24 64 07

59 40 44 42
49 81 45 75

1 09 21 90 17

1 20 18 65 57

76 66 44 72
21 58 19 35

98 24 64 07

21 94 01 50

NET INCREASE
AND
CASH

INCASH

EQUIVALENTS

(10 97 26 10)

: .11.77 ( .9.96 )

/

..

-
, -, - 31/03/2011
- 32
-
,

:
: 02. 05. 2011
142

INDIAN OVERSEAS BANK

Cash Flow Statement
Statement of Cash Flow for the year ended 31.03.2011
(Rs. in 000s)
Year ended 31.03.2011

Year ended 31.03.2010

CASH FLOW FROM OPERATING ACTIVITIES

Net Profit
1072 54 27
7 06 96 15
Adjustments for :
Amortisation of HTM Investments
52 99 61
1 14 47 33
Loss on Revaluation of Investments
52 92 13
53 33 17
Depreciation on Fixed Assets
105 00 10
1 11 75 94
Profit / Loss on Sale of Assets
(1 02 25)
(1 60 74)
Revaluation of Assets / Contracts
(2 02 61)
(28 70 12)
Provision for taxes
519 68 49
2 71 99 81
Provision for NPAs
10 33 61 76
9 19 45 61
Provision for Standard Assets
65 97 03
6 00 87
Depreciation on Investments
4 12 18
(1 20 01 99)
Provision for Other Items
1 64 69 58
60 21 60
Interest Paid on Tier II Capital
4 78 45 49
3 93 19 13
Increase / (Decrease) in Deposits
3 44 34 04 01
1 06 78 82 15
Increase / (Decrease) in Borrowings
84 06 20 27
(24 37 38 05)
Increase / (Decrease) in Other Liabilities
& Provisions
(8 39 50 79)
(5 62 18 53)
(Increase) / Decrease in Investments
(110 65 80 87)
(66 02 92 88)
(Increase) / Decrease in Advances
(3 28 33 81 82)
(41 18 65 31)
(Increase) / Decrease in Other Assets
(11 40 87 24)
(1 85 66 62)
Direct Taxes Paid
(5 34 27 00)
(4 69 27 00)
NET CASH FLOW FROM OPERATING ACTIVITIES (A)
(27 07 66)
(12 10 19 48)
CASH FLOW FROM INVESTING ACTIVITIES
i) Sale / disposal of Fixed Assets
11 75 02
20 94 69
ii) Purchase of Fixed Assets
(1 10 85 40)
(1 52 99 69)
NET CASH FROM INVESTING ACTIVITIES (B)
(99 10 38)
(1 32 05 00)
CASH FLOW FROM FINANCING ACTIVITIES
i) Proceeds of Equity Share Issue
10 53 99 99
0
19 67 00 00
ii) Proceeds of Tier I & Tier II Bonds
11 00 00 00
iii) Redemption of Tier II Bonds
0
(1 75 00 00)
iv) Interest Paid on Tier II Capital
(4 78 45 49)
(3 93 19 13)
v) Dividend Paid
(2 22 34 96)
(2 86 82 49)
NET CASH FROM FINANCING ACTIVITIES (C)
23 20 19 54
2 44 98 38
NET INCREASE IN CASH AND CASH
EQUIVALENTS (A) +(B) + (C)
21 94 01 50
(10 97 26 10)

143

CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR

Cash & Balances with RBI

Balances with Banks & Money at Call

76 66 44 72
21 58 19 35

98 24 64 07

59 40 44 42
49 81 45 75

1 09 21 90 17

1 20 18 65 57

76 66 44 72
21 58 19 35

98 24 64 07

CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR

Cash & Balances with RBI

Balances with Banks & Money at Call

1 00 10 89 43
20 07 76 14

21 94 01 50

NET INCREASE IN CASH AND CASH EQUIVALENTS

(10 97 26 10)

Note :- Cash and Cash Equivalents includes Rs 11.77 crores ( Previous year Rs 9.96 crores ) under
Unpaid Dividend Account which is not available for immediate use.
Previous year's figures have been re-grouped / re-arranged , wherever considered necessary.

B S Keshava Murthy
General Manager

M Narendra
Chairman & Managing Director
AUDITORS' CERTIFICATE

We, the undersigned Statutory Central Auditors of Indian Overseas Bank have verified the
above Cash Flow Statement of the Bank for the year ended 31.03.2011 . The Statement has
been prepared in accordance with the requirement of Clause 32 , of the Listing agreement
with the Stock Exchange and is based on and in agreement with the corresponding Profit
and Loss Account and the Balance Sheet of the Bank, covered by our report of even date to
The President of India .

Varma & Varma

M Bhaskara Rao & Co

PKF Sridhar & Santhanam

Mittal Gupta & Co

Place:Chennai
Date : 02.05.2011

144

Bhaskaran & Ramesh

S R Mohan & Co


,
III 27-04-2007
( II)

ADDITIONAL DISCLOSURES
In accordance with the guidelines issued by
Reserve Bank of India, Mumbai, under New Capital
Adequacy Framework (Basel II) dated 27.04.2007
under Pillar III requirement, the following
disclosures are made as per the specified Formats:

,



, , ,
()

RISK MANAGEMENT
Risk taking is an integral part of the banking
business. Banks assume various types of risks in its
activities while providing different kinds of services
based on its risk appetite. In the normal course of
business, a bank is exposed to various risks
including Credit Risk, Market Risk and Operational
Risk. With a view to managing such risks efficiently
and strengthening its risk management systems,
the bank has put in place various risk management
measures and practices which includes policies,
tools, techniques, monitoring mechanism and
management information systems (MIS).
The Bank, on a continuous basis, aims at enhancing
and maximizing the shareholder values through
achieving appropriate trade off between risks and
returns. The Bank's risk management objectives
broadly covers proper identification, measurement,
monitoring, control and mitigation of the risks with a
view to enunciate the bank's overall risk philosophy.
The risk management strategy adopted by the bank
is based on an understanding of risks and the level
of risk appetite of the bank. Bank's risk appetite is
demonstrated through prescription of risk limits in
various policies relating to risk management.
The bank has set up appropriate risk management
organization structure in the bank.Risk
Management Committee of the Board (RMCB), a
sub-committee of the Board, is constituted which is
responsible for management of credit risk, market
risk, operational risk and other risks in the Bank. The
bank has also constituted internal risk management
committees namely Credit Policy Committee (CPC)
for managing credit risk, Asset Liability
Management Committee (ALCO) for managing
market risk and Operational Risk Management
Committee (ORMC) for managing operational risk.
A full fledged Risk Management department is
functioning at the Bank's Central Office,
independent of the business departments for
implementing best risk management systems and
practices in the bank. A Chief Risk Officer in the rank
of General Manager of the bank is in charge of the
department who is responsible for overall
supervision on risk management in the bank. In
addition, the Mid-Office in Treasury (Domestic) and
Treasury (Foreign) and Credit Support Services
Dept. also carry out the risk management functions
and monitor the adherence/compliance to policies,

, , ,






- ,
, ,

(),
()







() ()

/ ,

145

 31.03.2008 ( II)


II
,





()

risk limit framework and internal approvals.

The bank has implemented the New Capital
Adequacy Framework (Basel-II) with effect from
31.3.2008 and is in compliance with the framework,
in line with the guidelines issued by the RBI from
time to time. The Basel-II Framework is based on
three mutually reinforcing pillars. While the first
pillar of the revised framework addresses the
minimum capital requirement for credit, market and
operational risks, the second pillar of supervisory
review process ensures that the bank has adequate
capital to address all the risks in their business
commensurate with bank's risk profile and control
environment. As per RBI's requirement, the Bank
has put in place a Board approved Policy on Internal
Capital Adequacy Assessment Process (ICAAP) to
address second pillar requirements. This policy
aims at assessing all material risks to which the bank
is exposed over and above the regulatory
prescriptions under the first pillar risks, and ensuring
adequate capital structure to meet the requirements
on an ongoing basis.
The bank has formulated a Stress Testing
framework in line with the RBI guidelines to assess
the potential vulnerability of the organization to
exceptional but plausible events. Stress testing and
scenario analysis, particularly in respect of the
bank's material risk exposure, enable identification
of potential risks inherent in a portfolio at times of
economic recession and accordingly take suitable
steps to address the same. In accordance with the
policy prescriptions, the bank carries out various
stress tests on bank's balance sheet periodically
and place the reports to ALCO / RMCB / Board.
The third pillar of Basel-II framework refers to market
discipline. The purpose of market discipline is to
complement the minimum capital requirements
detailed under Pillar 1 and the supervisory review
process detailed under Pillar 2. In this context and
as guided by RBI a set of disclosure (both qualitative
and quantitative) are published in DF 1 to 10
(annexed) with regard to risk management in the
bank, which will enable market participants to
assess key pieces of information on the (1) Scope of
application (DF-1), (2) Capital Structure (DF-2),
(3)Capital Adequacy (DF-3), (4) Credit Risk: General
Disclosures (DF-4), (5) Credit Risk: Disclosures for
Portfolios subject to the Standardised Approach
(DF-5), (6) Credit Risk Mitigation: Disclosures
for Standardised Approaches (DF-6),
(7) Securitisation: Disclosure for Standardised
Approach (DF-7), (8) Market Risk in Trading Book
(DF-8), (9) Operational Risk (DF-9), and (10) Interest
Rate Risk in the Banking Book (IRRBB) (DF-10) etc.
This would also provide necessary information to
the market participants to evaluate the performance
of the bank in various parameters.

''

, :
,


-
/ /

II
, 1
2
,
1 10
() ( )

, ,

; (1) (-1),
(2) (-2), (3) (-3), (4)
: (-4), (5) :

(-5) (6) :
(-6) (7) :
(-7), (8)
(-8) (9) (-9) (10)
(-10)


146

 -1

TABLE DF 1
SCOPE OF APPLICATION
Applicability to our Bank

Qualitative Disclosures

a) The name of the top bank The Bank does not

in the group to which the belong to any group.
Framework applies

.
,



(i)
(ii)
(iii)
(iv)

(.

)

b) An outline of differences
in the basis of
consolidation for
accounting and
regulatory purposes,
with a brief description of
the entities within the
group (i) that are fully Not Applicable
consolidated (ii) that are
pro-rata consolidated
(iii) that are given a
deduction treatment;
and (iv) that are neither
consolidated nor
deducted (e.g. where the
investment is risk
weighted).

Quantitative Disclosures

a) The aggregate amount

of capital deficiencies in
all subsidiaries not Not Applicable
included in the
consolidation i.e. that are
deducted and the
name(s) of such
subsidiaries.

( - )

,

,



,

The aggregate amounts

(e.g. current book value)
of the bank's total
interests in insurance
entities, which are riskweighted as well as their
name, their country of
incorporation or
residence, the
proportion of ownership
interest and, if different,
the proportion of voting
power in these entities. In
addition, indicate the
quantitative impact on
regulatory capital of
using this method versus
using the deduction.

28.50 ,

19%

147

Rs.28.50crores by
way of equity
subscription in an
insurance JV ie.
Universal Sompo
General Insurance
Co.Ltd., representing
19% of its total issued
capital.

 -2

Table DF 2
CAPITAL STRUCTURE

.

, : 1
2

-

1
2

Qualitative Disclosures

.
1
:
l
l
l ( 1
)

8555.12
.618.75
.7313.55
.780.00
( )

.157.18

Applicable to the Bank

as we raise both Tier I
and Tier II capital from
the market to meet
increase in capital
requirements from
time to time

b) The amount of Tier 1

capital, with separate
disclosure of:
paid up share capital
reserves
innovative instruments
(Perpetual Debt
Instrument as Tier 1
capital)
other capital instruments
amounts deducted from
Tier 1 capital, including
goodwill and investments

Rs.8555.12 crore
Rs.618.75 crore
Rs.7313.55 crore
Rs.780.00 crore
(raised during the
year Nil)
Nil

Rs.157.18 crore

c) The total amount of Tier 2

capital (net of deductions
Rs.6700.78 crore
from Tier 2 capital)

. 2 (
.6700.78
2 )

d) Debt capital instruments

eligible for inclusion in
Upper Tier 2 capital

. 2

Rs.2632.30 crore
Total amount outstanding
Of which amount raised Rs.967.00 crore
during the current year
Amount eligible to be Rs.2632.30 crore
reckoned as capital funds

.2632.30

.967.00

.2632.30


. 2

a) Summary information on
the terms and conditions
of the main features of all
capital instruments,
especially in the case of
capital instruments
eligible for inclusion in
Tier 1 or in Upper Tier 2
Quantitative Disclosures

l
l 1 ,

Applicability to our Bank

e) S u b o r d i n a t e d d e b t
eligible for inclusion in
Lower Tier 2 capital
Total amount outstanding
Of which amount raised
during the current year
Amount eligible to be
reckoned as capital funds

3426.00
.1000.00
.3060.00
.55.00

148

Rs.3426.00 crore
Rs.1000.00 crore
Rs.3060.00 crore
Rs.55.00 crore

. ,

.15255.90

Rs.15255.90 crore
f) Other deductions from
capital, if any
Total eligible capital

-3

Table DF 3
CAPITAL ADEQUACY
Qualitative Disclosures

A summary discussion of the bank's approach to

assessing the adequacy of its capital to support
current and future activities:

()
( I) ( )
- 1992

Banks in India implemented capital adequacy

measures in April 1992 based on the capital adequacy
framework (Basel-I) issued by the Basel Committee
on Banking Supervision (BCBS) and the guidelines
issued by Reserve Bank of India (RBI) from time to
time. Such a measure was taken in order to
strengthen the capital base of banks and at the same
time to make it compliant with the international best
practices in the matter maintaining capital adequacy.
Initially the Basel framework addressed the capital for
credit risk, which was subsequently amended to
include capital for market risk. In line with the
guidelines issued by the RBI the bank was compliant
with the relevant guidelines.

26 2004
,

2005
2006

27 2007
( II)
-

Subsequently the BCBS released the International

Convergence of Capital Measurement and Capital
Standards: A Revised Framework on June 26, 2004.
The Revised Framework was updated in November
2005 to include trading activities and the treatment of
double default effects and a comprehensive version
of the framework was issued in June 2006. Based on
these guidelines and to have consistency and be in
harmony with international standards, the RBI has
th
issued guidelines on 27 April 2007 and subsequent
amendments on implementation of the New Capital
Adequacy (Basel-II) Framework from time to time.

31-03-2008
( II) II


- I
31 2013
31 2010
:

In line with the RBI guidelines, the Bank had migrated

to the revised (Basel-II) framework from 31.3.2008
and continues to be compliant with the requirements
of Basel-II framework. In addition to this, the bank
continues the parallel run of Basel I framework in
terms of the guidelines issued by the RBI through
prescribed reporting formats. The RBI has issued
directions vide their circular dated 31st Dec. 2010 that
parallel run will continue till 31st March 2013. The
Bank is in full compliance with these guidelines.
Basel-II Framework provides a range of options for
determining the capital requirements for credit risk,
market risk and operational risk. The Framework
allows banks and supervisors to select approaches
that are most appropriate for their operations and

II ,

149


,
()
()
31.03.2011

financial markets. In accordance with the RBI's

requirements, the Bank has adopted Standardised
Approach (SA) for credit risk, Standardised
Measurement Method (SMM) for market risks and
Basic Indicator Approach (BIA) for Operational Risk to
compute capital. As such, the Bank is maintaining
capital for Credit, Market and Operational Risk as on
31.3.2011, in line with the RBI guidelines in this
regard.

,
, , ,
, (
),








,

The Bank has computed capital for market risk and

operational risk as per the prescribed guidelines at
the bank's Central Office, based on the relevant data.
In computation of capital for Credit risk under
Standardised Approach, the bank has relied upon the
borrower-wise data captured from each individual
branch besides portfolios held at Regional Offices
and Central Office of the bank. For some of the loan
types such as Agriculture Loans, Jewel Loans, Small
loans, Loans against Term deposits, staff loans etc
where all the accounts are of similar nature (either
similarly secured or similarly unsecured) a
consolidated approach is used whereby the
aggregated position for each type of loan is taken for
computation of capital for credit risk, without affecting
the quality of the capital assessment. In all other loan
types, the credit risk capital computation is done on
borrower basis or facility type basis as per the
segmentation advised in the RBI guidelines. For this
purpose, the Bank has developed in-house software,
which enables computation of capital for credit risk of
the advances portfolio of the branches and
generation of the requisite reports at the branches,
Regional Offices and Central Office level. Necessary
training has been imparted to the field staff
periodically on various aspects of capital computation
and close interactions held with the coordinators at
Regional Offices, to ensure accuracy and adequacy
of data in capital computation.

:




, ,
()

Banks generally use a number of techniques to

mitigate the credit risk to which they are exposed. The
Bank has also used the Credit Risk Mitigation in
computation of capital for credit risk in order to get
capital relief. A well articulated policy on Collateral
Management and Credit Risk Mitigation duly
approved by the bank's Board is put in place. The
Bank has followed the RBI guidelines in force to arrive
at the credit risk mitigation, risk weighted assets,
eligible capital and capital to risk weighted assets
ratio (CRAR).

, 8%
9% ()

31.03.2011

Reserve Bank of India has prescribed that Banks are

required to maintain a minimum capital to risk
weighted assets ratio (CRAR) of 9% on an ongoing
basis, as against 8% prescribed in the Basel
document. RBI has also prescribed Prudential Floor
at 80% of minimum capital requirements computed as

150

 I
80%
31 2010
6% -I
-I
: 14.55 8.16

per Basel-I Framework for Credit and Market risks as

on 31.3.2011.The framework issued by RBI
additionally prescribes maintenance of a minimum
Tier-1 CRAR of 6% on or before March 31, 2010.
Against this, the Bank's total CRAR and Tier-1 CRAR
stand at 14.55 and 8.16 respectively, which are well
above the minimum level prescribed by RBI.
The Bank has put in place the policy on Internal
Capital Adequacy Assessment Process (ICAAP) and
the framework in consideration of the relevant risk
factors of the bank as a measure towards Pillar 2
requirements of the revised framework
commensurate with the bank's overall risk profile. In
framing the policy the bank has taken into
consideration the requirements prescribed by the RBI
in their guidelines.

2


()

As regards the adequacy of capital to support the

future activities, the bank draws assessment of capital
requirements periodically taking into account future
growth of business. The surplus CRAR maintained by
the bank acts as a buffer to support the future
activities. Moreover, the headroom available to the
bank in the Tier-1 and Tier-2 capital components
provides additional capital support to meet the future
needs.Thereby, the capital risk of the bank is
adequately addressed.

,


I II

Table DF 3
Quantitative Disclosures

( )

b) Capital requirements for credit risk:

Standardised Approach

Portfolios subject to standardised approach

8202.73
0.00

8202.73
)


432.01
( )
6.40

224.91

663.32
)

Securitisation exposures

Total

)

(
)
1

8202.73
0.00

8202.73

c) Capital requirements for market risk:

Standardised Duration Approach
Interest rate risk
Foreign Exchange risk (including gold)
Equity risk

Total

432.01
6.40
224.91

663.32

d) Capital requirements for operational risk

Basic indicator approach

(Rs. in Crore)

Operational Risk

573.24

573.24

e) Total Capital Ratio for the Bank

14.55

Total CRAR
Total CRAR (subject to application
of Prudential Floor)
Tier 1 CRAR

14.55
8.16
151

14.55
14.55
8.16

 -4

Table DF-4

CREDIT RISK: GENERAL DISCLOSURES

FOR ALL BANKS

Qualitative Disclosures
Credit Risk

: ,

/

Credit Risk is the possibility of losses associated

with diminution in the credit quality of borrowers or
counter parties. In a Bank's portfolio, Credit Risk
arises mostly from lending and investment
activities of the Bank if a borrower / counterparty is
unable to meet its financial obligations to the
lender/investor. It emanates from changes in the
credit quality/worthiness of the borrowers or
counter parties. Credit risk also include
counterparty risk and country risk.

Credit Rating and Appraisal Process

The Bank manages its credit risk through

continuous measuring and monitoring of risks at
obligor (borrower) and portfolio level. The Bank
has a robust internal credit rating framework and
well-established standardized credit appraisal /
approval process. Credit rating is a facilitating
process that enables the bank to assess the
inherent merits and demerits of a proposal. It is a
decision enabling tool that helps the bank to take a
view on acceptability or otherwise of any credit
proposal.

II

In order to widen the scope and coverage further,

the bank is presently in the process of upgrading
the rating software used by the bank, which would
facilitate the bank to migrate towards advanced
approaches of the Basel II framework in future.

, ,
, , , (
)

The rating models factor quantitative and

qualitative attributes relating to Risk components
such as Industry Risk, Business Risk, Management
Risk, Financial Risk, Project risk (where applicable)
and Facility Risk etc. The data on industry risk is
regularly updated based on market conditions.

Credit rating as a concept has been well

internalized within the bank. As a measure of robust
credit risk management process, the bank has
implemented a tiered system for validation of credit
ratings at specified levels which is independent of
credit departments, in order to draw unbiased
rating for borrowers necessary for moving to
advanced approaches. In respect of proposals
falling under powers of Bank's central office, the
validations of ratings are done at Risk Management
Dept. The Bank uses credit rating for deciding

152

interest rates on borrowal accounts.

The
advantage of credit rating is that it enables to rank
different proposals based on risk and do
meaningful comparisons.

/
/ /


/
( ) /
/

()

The bank follows a well-defined multi layered

discretionary power structure for sanction of loans
and advances. Approval Grid has been constituted
at all levels covering Exceptionally Large branch /
RO / CO for considering fresh/enhancement
proposal. The new products introduced by bank
are examined by the internal Operational Risk
Management Committee (ORMC)/ Credit Policy
Committee/ Asset Liability Management
Committee depending upon the type of risks
involved in the new product / process before being
placed to RMCB/Board for approval. The system
and procedure committee (SAPCO) lays down the
system and procedure to be followed for such new
products.

Credit Risk Management Policies

,

,



/

, ,
,

The bank has put in place a well-structured loan

policy and credit risk management policy duly
approved by Board. The policy document defines
organization structure, role and responsibilities
and processes whereby the Credit Risk carried by
the Bank can be identified, quantified and
managed within the framework that the Bank
considers consistent with its mandate and risk
tolerance. Credit risk is monitored by the bank on a
bank-wide basis and compliance with the risk limits
approved by Board / RMCB is ensured. The CPC
takes into account the risk tolerance level of the
Bank and accordingly handles the issues relating
to Safety, Liquidity, Prudential Norms and
Exposure limits.
The bank has taken earnest steps to put in place
best credit risk management practices in the bank.
In addition to Loan Policy and Credit Risk
Management Policy, the bank has also framed
I n v e s t m e n t Po l i c y, C o u n t e r Pa r t y R i s k
M a n a g e m e n t Po l i c y a n d C o u n t r y R i s k
Management Policy etc., which forms integral part
of monitoring of credit risk in the bank. Besides,
the bank has implemented a policy on collateral
management and credit risk mitigation which lays
down the details of securities (both prime and
collateral) normally accepted by the Bank and
administration of such securities to protect the
interest of the bank. Presently, selected securities
act as mitigation against credit risk (in capital
computation), to which the bank is exposed.

,


:
( )

(
)

153

 / /

Credit Monitoring/Loan Review/Credit Audit

,




,
.

The Credit Monitoring Department monitors the

quality of loan portfolio, identifies problems and takes
steps to correct deficiencies. The objective of the
department is to minimize slippage of performing
accounts to NPA category. The department is also
micro monitoring the accounts by segmentation and
follow up the accounts on a daily basis to minimize
slippages. Furthermore, the accounts are also
monitored at different levels of authority depending
upon the size of the exposure.

. 1

:

All standard borrowal accounts with credit exposure

of Rs. 1 crore and above are reviewed under Loan
Review Mechanism, which is essentially an off-site
audit mechanism. The credit audit is carried out in
terms of Guidance Note on Credit Risk issued by
Reserve Bank of India and the Credit Risk
Management Policy of the Bank.

. 5


/
.

The credit audit covers all borrowal accounts with

total exposure of Rs. 5 crore and above sanctioned by
any authority. This is an ongoing exercise which
helps the bank to identify deficiencies and early
warning signals of sickness/weakness in borrowal
accounts.

Essentially this is an onsite audit mechanism to

prevent deterioration in the quality of advances
thereby protecting the interest of the bank.

Classification of restructured / non-performing

accounts

The bank follows the prudential guidelines issued by

the RBI on classification of restructured and nonperforming assets from time to time and make
provisions as required.

( . )

Restructuring of Borrower Accounts

) ,

-
) ,

-

103087.47

19870.97

The bank has followed the RBI guidelines in respect

of classification and provisioning for re-structured
accounts.

(Rs. in Crore)

Qualitative Disclosures

113791.47
22012.63

Applicability to our Bank

a) Total gross credit risk

exposures, Fund based
and Non fund based
separately

FB 113791.47
NFB 22012.63

b) Geographic distribution
of exposures, Fund
based and Non fund
FB
NFB
based separately
103087.47 10704.00
Overseas
Domestic
19870.97
2141.66

10704.00
2141.66

)
, -
-

c) Industry type distribution

of exposures, fund based
and non-fund based
separately.

154

Annexed

( . )

(Rs. in Crore)

Qualitative Disclosures

Applicability to our Bank

) ()

(1,2,3)

1070.13
1957.56
61.90

e) Amount of NPAs (Gross)

Substandard
Doubtful (D1,D2, D3)
Loss

1070.13
1957.56
61.90

1328.42

f)

1328.42

) ()

)





)

)

)
-

Residual contractual
maturity breakdown of
assets

Net NPAs

g) NPA Ratios
Gross NPAs to Gross
Advances
Net NPAs to Net
Advances

2.72%
1.19%

h) Movement of NPAs (Gross)

Opening balance
Additions
Reductions
Closing balance

3611.08
2169.26
2690.75
3089.59

i)

1363.79
1256.79
970.52
1650.06
j)

14.02

5.74

64.89
228.94

155

2.72%
1.19%

3611.08
2169.26
2690.75
3089.59

1363.79
1256.79
970.52
1650.06

Amount of NonPerforming Investments

14.02

k) Amount of provisions
held for Non-Performing
Investments

5.74

l)

234.57
59.26
0

Movement of provisions
for NPAs
Opening balance
Provisions made
during the period
Write off
Write back of excess
provisions
Closing balance

Annexed

Movement of provisions
for depreciation on
investments
Opening Balance
Provisions made
during the period
Write-off
Write-back of excess
provisions
Closing Balance

234.57
59.26
0
64.89
228.94

Residual contractual Maturity break down of Assets

(Rs. in Crore)

(. )
1 2-7 8-14 15-28 29 - 3 3-6 6-1 >1 3 > 3 5 > 5

Da y 1

2 -7 D

8 -1 4 D 1 5 - 2 8 D 2 9 D - 3 M

3 -6 M

6 M -1
Year

>1 t o 3
Years

Covers Gross Assets for domestic operations

INDUSTRY WISE EXPOSURES

(. )

,
, ,

,

,

>5
Years

3936.81 10930.50 7296.83 2535.84 15901.52 10354.77 21058.11 62322.09 11091.27 88395.22

3936.81 10930.50 7296.83 2535.84 15901.52 10354.77 21058.11 62322.09 11091.27 88395.22

>3 t o 5
Years

(Rs. in Crore)

Industry Name

1274.75
7068.92
1649.15
4148.19
147.78
2898.48
22.84
2436.13
835.46
31.59
1014.82
331.17
81.72
1499.82
632.96
2104.71
282.92
612.82
1011.83
311.60
335.59
171.68
506.40
1428.83

Outstanding

Mining and Quarrying

7068.92

Other Metal and Metal Products

1649.15

All Engineering

4148.19

Of which Electronics
Cotton Textiles
Jute Textiles
Other Textiles
Sugar
Tea
Edible Oils and Vanaspati
Tobacco and Tobacco Products
Paper and Paper Products
Rubber, Plastic and their Products
Chemicals, Dyes, Paints, etc.

1014.82
331.17
81.72
1499.82
632.96
2104.71
282.92
612.82

Cement and Cement Products

1011.83

Leather and Leather Products

311.60

Wood and Wood products

335.59

Glass and Glassware

171.68
506.40

Construction

1428.83

Petroleum, Coal Products and Nuclear Fuels

1129.54

Vehicles, Vehicle Parts and Transport Equipment

1782.98

Infrastructure

309.16
12779.05

Of which Power

7502.76

Of which Telecommunications

1973.56

Of which Roads & Ports

2458.94

Other Industries

330.65

NBFCs

4079.70

Trade

4283.26

Residual Advances to Balance Gross Advances

TOTAL

156

835.46

Of which Drugs and Pharmaceuticals

Computer Software

59300.49
113791.47

22.84
2436.13

Of which Fertilisers

Gems and Jewellery

1782.98
309.16
12779.05
7502.76
1973.56
2458.94
330.65
4079.70
4283.26

147.78
2898.48

31.59

Food Processing

1129.54

1274.75

Iron and Steel

59300.49
113791.47

 -5

Table DF-5

CREDIT RISK: DISCLOSURES FOR PORTFOLIOS

SUBJECT TO THE STANDARDISED APPROACH

Qualitative Disclosures
Credit Risk: Disclosures for portfolios subject to
Standardised Approach:
General Principle
In accordance with the RBI guidelines, the Bank has
adopted Standardised Approach of the New Capital
Adequacy Framework (NCAF) for computation of
capital for credit risk. In computation of capital the
bank has assigned risk weight to different asset
classes as prescribed by the RBI.
In computation of capital for Credit risk under
Standardised Approach, a large number of small value
exposures are captured on a consolidated basis for
example, where the exposures are fully secured such
a s J e w e l L o a n s , L o a n s a g a i n s t Te r m
deposits/approved insurance policies/postal deposits
etc. These loans are fully netted against available
credit risk mitigants (CRM), since due to margin
prescription, the CRM would be higher than the
exposure after applying the applicable hair cut.
Similarly, in case of fully unsecured loans such as
Agriculture Loans, Small loans, consumer loans, staff
loans etc the capital computation is done on the entire
exposure as applicable to relevant segment /
classification. Full details of these loans where
consolidated approach is adopted are available in the
CBS system for each account and only for capital
computation the consolidated approach is used.
External Credit Ratings
Ratings of borrowers by External Credit Rating
Agencies (ECRA) assumes importance in the light of
Guidelines for implementation of the New Capital
Adequacy Framework (Basel-II).
Exposures on
Corporates / PSEs/ Primary Dealers are assigned with
risk weights based on available external ratings. For
this purpose, the Reserve Bank of India has permitted
Banks to use the ratings of the four domestic ECRAs
viz. Credit Analysis and Research Ltd (CARE), CRISIL
Ltd, FITCH India and ICRA Ltd.
In consideration of the above, the Bank has decided to
accept the ratings assigned by all these ECRAs for
capital relief purpose.
In order to facilitate the process of external rating and
enabling the customers to solicit external ratings for
their exposure smoothly, the bank has taken the
initiative by entering into separate MOU with all these
four credit rating agencies. The agreement provides
for extending concessional fees by the ECRAs for
rating bank's customers. The MOUs do not have any
exclusivity clause to deal with. Borrowers at their
option can approach any one or more of the above
ECRAs for their rating. The Bank has only used the
solicited ratings assigned by any of the ECRAs.
External ratings assigned fresh or reviewed during the

()





: , /
/
( ) : ,

: , ,
,
/



( II)
()
/ /


., ( ) .,
.,











15

157

previous 15 months are reckoned for capital

computation by the bank. Wherever a borrower
possesses more than one rating from ECRAs the
guidelines prescribed by the RBI are followed as
regards to assignment of risk weight for computation
of capital. The bank has put in place pricing of loan /
facilities linking to external rating.
The bank has a well structured internal credit rating
mechanism to evaluate the credit risk associated with
a borrower and accordingly the systems are in place
for taking credit decision as regards the acceptability
of proposals and level of exposures and pricing.
However, such rating cannot be used for application of
risk weight under Standardised Approach of capital
computation. Accordingly the bank has taken into
consideration the borrower's loan exposure credit
ratings assigned by the approved ECRAs while
computing the capital for credit risk as on 31.03.2011
under corporate and PSE segments.
In case of bank's investment in particular issues of
corporates / PSEs the issue specific rating of the
approved ECRAs are reckoned and accordingly the
risk weights have been applied after a corresponding
mapping to rating scale provided in RBI guidelines.
For the purpose of capital computation of overseas
exposures, ratings assigned by the international rating
agencies namely Fitch, Moody's and Standard &
Poor's is used, whichever is available, as per RBI
guidelines.
As regards the coverage of exposures in India by
external ratings as relevant for capital computation
under Standardised Approach, the process needs to
be popularized among the borrowers so as to take the
benefit of capital relief available for better-rated
customers. The borrowers need to consider the
external rating as an opportunity for their business
development, which would take some time.

,

, 31-03-2010
,


/

,
, ,

()

Quantitative Disclosures

(. )

Classification

/
100%
100%
100%

100%
100%
100%

(Rs. in Crore)

Exposure
after
Mitigation
(EAM)

EAM
covered
under
External
Rating

Unrated

ADVANCES / INVESTMENT

54409.69
41821.57
9763.98
0.00
105995.24

10106.55
2541.89
423.63
0.00
13072.07

44303.13
39279.68
9340.35
0.00
92923.16

12236.96
2995.00
40.00
0.00
15271.96

0.00
0.00
0.00
0.00
0.00

12236.96
2995.00
40.00
0.00
15271.96

Below 100% risk weight

72883.12

17872.01

55011.10

100% risk weight

More than 100% risk weight

64196.29
4712.78

10812.83
247.32

53383.46
4465.45

Deducted
TOTAL
OTHER ASSETS
Below 100% risk weight
100 % risk weight
More than 100% risk weight
Deducted
TOTAL

158

141792.19

28932.16

112860.01

16100.82

16100.82

4498.32

4498.32

36.47
0.00

0
0

36.47
0

20635.61

20635.61

 - 6

Table DF 6

CREDIT RISK MITIGATION: DISCLOSURES FOR

STANDARDISED APPROACHES

:
:

Credit Risk Mitigation: Disclosures for Standardised

Approaches:

:

/ /

Policy on Credit Risk Mitigation

In line with the regulatory requirements, the bank has
put in place a well-articulated policy on collateral
management and credit risk mitigation techniques
duly approved by the bank's Board. The Policy lays
down the type of securities normally accepted by the
bank for lending and administration/ monitoring of
such securities in order to safeguard/protect the
interest of the bank so as to minimize the risk
associated with it.

( )
/ , , , 10
-, ,
, , ,
, , , , ,

The main types of securities (both prime and

collateral) accepted by the Bank includes Bank's own
Deposits, Gold/Ornaments, Indira Vikas Patras, Kisan
Vikas Patras, 10 year Social Security Certificates,
Shares and Debentures, Central and State Govt.
securities, Life Insurance Policies, Mutual Fund units,
Immovable Properties, Plant and Machinery, Goods
and Merchandise, Documents of Title to Goods, Book
Debts, Vehicles and other moveable assets etc. The
bank has also framed a well-defined policy on
valuation of immovable properties and Plant and
Machineries duly approved by Board.

Credit Risk Mitigation under Standardised

Approach

Qualitative Disclosures

) :

(a) Eligible Financial Collaterals

As advised by RBI, the Bank has adopted the
comprehensive approach relating to credit risk
mitigation under Standardised Approach, which
allows fuller offset of securities (prime and
collateral) against exposures, by effectively
reducing the exposure amount by the value
ascribed to the securities. Thus the eligible
financial collaterals are fully made use of to reduce
the credit exposure in computation of credit risk
capital. In doing so, in line with RBI guidelines, the
bank has recognized specific securities viz (a)
bank deposits (b) gold/ornaments (c) life
insurance policies (d) kisan vikas patras (after a
lock in period of 2 years).

,

( )
:

-

)
) / ) )
(2 1/2 - )

159

) / :

/
( )




,
,
/

(b) On/Off Balance Sheet Nettings

As per Bank's policy on utilization of the credit risk
mitigation techniques and collateral
management, onbalance sheet netting has
been reckoned to the extent of deposits available
against loans/advances of the borrower
(maximum to the extent of exposure), where bank
has legally enforceable netting arrangements
involving specific lien with proof of
documentation as prescribed by RBI. In such
cases the capital computation is done on the
basis of net credit exposure. In so far as offbalance sheet netting is concerned, these are
covered by guarantees/credit derivatives
whenever specifically permitted by RBI.
Presently, the bank does not have any off-balance
sheet netting.

) :
,


)
(0%) ) (20%) ) (0%)
) (20%) ) - /
(
- )

Eligible Guarantees
Besides, other approved form of credit risk
mitigation is availability of Eligible Guarantees.
In computation of credit risk capital the types of
guarantees recognized for taking mitigation, in
line with RBI guidelines are (a) Central
Government (0%) (b) State Government (20%),
(c) CGTSI (0%) (d) ECGC (20%) (e) Banks in the
form of Bills Purchased/discounted under Letters
of Credit (both domestic and foreign banks as per
guidelines).

The bank has ensured compliance of legal certainty

as prescribed by the RBI in the matter of credit risk
mitigation.
Concentration risk in credit risk mitigation

Policies and process are in place indicating the type of

mitigations the bank use for capital computation
under the Standardised approach. All types of
securities (financial collaterals) eligible for mitigation
are easily realizable financial securities. As such, the
bank does not envisage any concentration risk in
credit risk mitigation used and presently no
limit/ceiling has been prescribed for the quantum of
each type of collateral under credit risk mitigation.

:


/

160

(. )

(Rs. in Crore)

Quantitative Disclosures

( ,

)

()

- )
- )
-

For each separately disclosed credit risk

portfolio, the exposure (after, where
applicable, on or off balance sheet netting)
that is covered by Eligible Financial
Collateral after application of haircuts

17651.33
1631.63
190.56
3984.81
18669.69
11.94
54.26
2667.18
46.37
2.55
0.14
29.93
38.04
332.22

17651.33

Domestic Sovereign

1631.63

Public Sector Entities

190.56

Corporates

3984.81

Regulatory Retail Portfolio (RRP)

8669.69

Claims secured by Residential Property

11.94

Claims secured by Commercial Real Estate

54.26

Consumer Credit
Capital Market Exposure

2667.18
46.37

NBFC

2.55

Non Performing Assets - a) Housing

Loan

0.14

Non Performing Assets - b) Others

21.93

Other Assets - Staff Loans

38.04

Other Assets

(. )

332.22

(Rs. in Crore)

/
(
)
( ,
)

6033.37

Public Sector Entities

3479.22

3479.22

Corporates

2021.81

2021.81

Regulatory Retail Portfolio (RRP)

()

Quantitative Disclosures
For each separately disclosed credit risk
portfolio, the total exposure (after, where
applicable, on or off balance sheet netting) that
is covered by guarantees / Credit Derivatives
(whenever specifically permitted by RBI)
6033.37

532.33

161

532.33

 7
:

Table DF 7

) 31.03.2011

a)

SECURITISATION: DISCLOSURE
STANDARDISED APPROACH
Qualitative Disclosures

The nature of other risks

(e.g. liquidity risk)
inherent in securitized
assets

(
)


( ,
, ,
@
#)

;

(
1
2009 5.16.1


) ;

The general qualitative

disclosure requirement
with respect to
securitisation, including a
discussion of:
The bank's objectives in
relation to securitisation
activity, including the
extent to which these
activities transfer credit
risk of the underlying
securitised exposures
away from the bank to
other entities.

FOR

The various roles played

by the bank in
securitisation process
(for example: originator,
i n v e s t o r, s e r v i c e r,
provider of credit
enhancement, liquidity
@
provider, swap provider ,
#
protection provider ) and
an indication of the extent
of the bank's involvement
in each of them;
A description of the
processes in place to
monitor changes in the
credit and market risk of
securitization exposures
(for example, how the
behaviour of the
underlying assets
impacts securitization
exposures as defined in
para 5.16.1 of the Master
Circular of NCAF dated
July 1, 2009);
A description of the
bank's policy governing
the use of credit risk
mitigation to mitigate the
risks retained through
securitization exposure;

162

No securitisation
for the year ended
31.03.2011

)


:
l

b)

Whether the transactions

are treated as sales or
financings;

Methods and key

assumptions (including
inputs) applied in valuing
positions retained or
purchased.

l (

Change in methods and

key assumptions from the
previous period and
impact of the changes;

;
l

Policies for recognizing

liabilities on the balance
sheet for arrangements
that could require the
bank to provide financial
support for securitized
assets;

c) In the banking book, the

names of ECAIs used for
securitisations and the
types of securitisation
exposure for which each
agency is used.

Quantitative Disclosures in Banking Book

Summary of the bank's

accounting policies for
securitisation activities,
including :

d) T o t a l a m o u n t o f
exposures securitised by
the bank.

e)

For exposures
securitised losses
recognized by the Bank
during the current period
broken by the exposure
type (e.g. Credit cards,
Housing loans, auto
loans, etc. detailed by
underlying security)

f)

Amount of assets
intended to be
securitized within a year.

) ()

g) Of (f), amount of assets

originated within a year
before securitization.

)
(
, ,
)

h) The total amount of

exposures securitized
(by exposure type) and
unrecognized gain or
losses on sale by
exposure type.

)
(
)

163

Not Applicable

()

i)

Aggregate amount of
securitisation exposures
retained or purchased
broken down by exposure
type and off balance sheet
securitization exposures
broken down by exposure
type.

j)

Aggregate amount of
securitisation exposures
retained or purchased
and the associated capital
charges, broken down
between exposures and
further broken down into
different risk weight
bands for each regulatory
capital approach.

)

,




*

* Exposures that have

been deducted
entirely from Tier 1
capital, credit
enhancing I/Os
deducted from Total
Capital (by exposure
type).

1
,
(

/ )

Quantitative Disclosure: Trading Book

:
()

k) Aggregate amount of
exposures securitized by
the bank for which the
bank had retained sum
exposures and which is
subject to market risk
approach, by exposure
type.

() :

l)

Aggregate amount of:

On-balance sheet
securitisation exposures
retained or purchased
broken down by
exposure type; and
Off-balance sheet
securitisation exposures
broken down by
exposure type.

()

:

m) Aggregate amount of
securitization exposures
retained or purchased
separately for:

Securitisation exposures
retained or purchased
s u b j e c t
t o
comprehensive Risk

164

Measure for specific risk;

and

Securitisation exposures
subject to the
securitization framework
for specific risk broken
down into different risk
weight bands.

() :
l

n)

the capital requirements

for the securitization
exposures, subject to the
securitization framework
broken down into
different risk weight
bands .

Aggregate amount of:

1
,

Securitization exposures
that are deducted
entirely from Tier 1
capital, credit enhancing
I/Os deducted from total
capital, and other
exposures deducted
from total capital (by
exposure type).

(
/ )

- 8

Table DF 8
MARKET RISK IN TRADING BOOK

Qualitative Disclosure

Market Risk

,
,
/
(
) (
), (
, )

Market Risk is defined as the possibility of loss to a

bank in balance sheet position caused by
changes/movements in market variables such as
interest rate, foreign currency exchange rate, equity
prices and commodity prices. Bank's exposure to
market risk arises from domestic investments (interest
related instruments and equities) in trading book
(Both AFS and HFT categories), the Foreign
Exchange positions (including open position, if any, in
precious metals) and trading related derivatives. The
objective of the market risk management is to
minimize the impact of losses on earnings and equity
capital arising from market risk.

()
, , ,

Policies for management of market risk

The bank has put in place Board approved Market
Risk Management Policy and Asset Liability
Management (ALM) policy for effective management

165


,


, ,

of market risk in the bank. Other policies which also

deal with market risk management are Funds
Management and Investment Policy, Derivative
Policy, Risk Management Policy for forex operations,
and Stress testing policy. The market risk
management policy lays down well defined
organization structure for market risk management
functions and processes whereby the market risks
carried by the bank are identified, measured,
monitored and controlled within the ALM framework,
consistent with the Bank's risk tolerance. The policies
set various risk limits for effective management of
market risk and ensuring that the operations are in line
with Bank's expectation of return to market risk
through proper Asset Liability Management. The
policies also deal with the reporting framework for
effective monitoring of market risk.

,

/



( )

The ALM policy specifically deals with liquidity risk

management and interest rate risk management
framework. As envisaged in the policy, liquidity risk is
managed through GAP analysis based on residual
maturity/behavioral pattern of assets and liabilities on
daily basis based on best available information data
coverage as prescribed by RBI. The bank has put in
place mechanism of short-term dynamic liquidity
management and contingent funding plan.
Prudential (tolerance) limits are prescribed for
different residual maturity time buckets for efficient
asset liability management. Liquidity profile of the
bank is evaluated through various liquidity ratios. The
bank has also drawn various contingent measures to
deal with any kind of stress on liquidity position. Bank
ensures adequate liquidity management by Domestic
Treasury through systematic and stable funds
planning.

( )

Interest rate risk is managed through use of GAP

analysis of rate sensitive assets and liabilities and
monitored through prudential (tolerance) limits
prescribed. The bank estimates earnings at risk and
modified duration gap periodically for assessing the
impact on Net Interest Income and Economic Value of
Equity with a view to optimize shareholder value.

- () / ,

( )

The Asset-Liability Management Committee (ALCO) /

Board monitors adherence of prudential limits fixed
by the Bank and determines the strategy in the light of
the market conditions (current and expected) as
articulated in the ALM policy. The mid-office of
Treasury monitors adherence to the prudential limits
on a continuous basis.

166

Quantitative Disclosures

-
31.03.2011

In line with the RBI's guidelines, the Bank has

computed capital for market risk as per Standardised
Duration Approach of Basel-II framework for
maintaining capital. The capital requirement for
market risk as on 31.3.2011 in trading book of the
bank is as under:

(. )

(Rs. in Crore)

( )

Type of Market Risk

Risk Weighted

Capital

Asset (Notional) Requirement

4800.15

432.01

Interest rate risk

4800.15

432.01

2499.02

224.91

Equity position risk

2499.02

224.91

71.08

6.40

71.08

6.40

7370.25

663.32

7370.25

663.32

Foreign exchange risk

TOTAL

- 9

Table DF 9

OPERATIONAL RISK

Qualitative Disclosures

Operational Risk is the risk of loss resulting from

inadequate or failed internal processes, people and
systems or from external events. Operational risk
includes legal risk but excludes strategic and
reputation risk.

Policies on Management of Operational risk

: ()
() () ()
()
() (-) ) )

The bank has framed operational risk management

policy duly approved by the Board. Other policies
adopted by the Board which deal with management of
operational risk are (a) Information Systems Security
Policy (b) Forex Risk Management policy (c) Policy
document on Know Your Customer (KYC) and AntiMoney Laundering (AML) procedures (d) IT Business
Continuity and Disaster Recovery Plan (IT_BC-DRP)
(e) Compliance Policy and (f) Policy on outsourcing of
Financial Services.
The operational risk management policy adopted by
the Bank outlines organization structure and detail
processes for management of operational risk. The
basic objective of the policy is to closely integrate
operational risk management processes of the bank
by clearly assigning roles for effectively identifying
assessing, monitoring and controlling or mitigating
operational risk and by timely reporting of operational
risk exposures including material operational losses.
Operational risk in the bank are managed through
comprehensive and well-articulated internal control
framework.

,



, ,

167










,








/ /

,
15%

The Bank has got embodied in its Book of Instructions

well-defined systems and procedures for various
operations. The bank has issued detailed guidelines
for handling computerized operations and a system of
EDP audit is in place to ensure adherence to the laid
down systems and procedures. The Bank has clear
guidelines as to the role functions of various levels of
employees. A training system with provision for giving
specialized training in credit /forex and other
functional area is in place. Conduct rules and service
regulations for all the employees are also in place.
Various internal and external audit systems are in
place to ensure that laid down systems and
procedures are followed and timely actions are
initiated for rectifying the deficiencies.
The Bank has put in place compliance policy duly
approved by Board. In terms of the RBI guidelines on
compliance functions in banks the bank has
established separate Compliance Department in
C.O. independent of business group. Compliance
officers are designated in each branch
/department/office to monitor the level of compliance.
The methodologies and system have been devised
and put in place for assessment of level of
compliance. Reporting systems on compliance
function have been devised and put in place.
In line with the final guidelines issued by RBI our bank
is adopting the Basic Indicator Approach for
computing capital for operational risk. As per the
guidelines the banks must hold capital for operational
risk equal to the average over the previous three years
of 15% of positive annual gross income as defined by
RBI.
Quantitative Disclosures

,
15%
31.03.2011
.573.24

In line with final guidelines issued by RBI, our Bank

has adopted the Basic Indicator Approach for
computing capital for Operational Risk. As per the
guidelines, the capital for Operational Risk is equal to
the average over the previous three years of 15% of
positive annual Gross Income as defined by RBI. As
per such estimate, the capital requirement for
Operational Risk as on 31.03.2011 is Rs.573.24 crore.

168

 - 10
:
:

Table DF 10

( ) (
)
() ()



( )


100
()


,

100


100

Interest rate risk is the risk where changes in the

market interest rates might affect a bank's financial
condition. Changes in interest rates may affect both
the current earnings (earnings perspective) as also
the Net Worth of the Bank (economic value
perspective). The risk from earnings perspective can
be measured as impact on the Net Interest Income
(NII) or Net Interest Margin. Similarly the risk from
economic value perspective can be measured as
drop in Economic Value of Equity.

INTEREST RATE RISK ON THE BANKING BOOK

Qualitative Disclosures

The bank identifies the risks associated with the

changing interest rates on its on-balance sheet and
off-balance sheet exposures in the banking book from
a short term (Earnings perspective) and long term
Economic Value Perspective. The impact on income
(Earnings Perspective) is measured through use of
GAP analysis by applying notional rate shock upto
100bps as prescribed in the bank's ALM Policy.
Prudential limits have been prescribed for such
impacts as a percentage of NII of the bank and the
same is monitored periodically. For the calculation of
impacts on earnings, the Traditional Gap is taken from
the Rate sensitivity statement and based on the
remaining period from the mid point of a particular
bucket the impact for change in interest rate upto 100
bps is arrived at. The same is reported to Board and
ALCO periodically along with the rate sensitivity
statement. The limits are fixed on the basis of previous
year's NII.

( )
( ) 200


(+/-)
1.50%

,

,
()

The bank has adopted traditional gap analysis

combined with duration gap analysis for assessing
the impact (as a percentage) on the Economic Value
of Equity (Economic Value Perspective) by applying a
notional interest rate shock of 200 bps. For the
purpose a limit of (+/-) 1.50% for modified duration
gap is prescribed in the Bank's ALM policy and the
position is monitored periodically.The bank calculates
Duration Gap and the impact on Economic Value of
Equity. Assets excluding investment and liabilities are
grouped as per rate sensitivity statement and bucketwise modified duration is computed for these groups
of Assets and Liabilities using common maturity,
coupon and yield parameters.For investment portfolio
the modified duration of individual items are
computed and taken.

- () /
(
)

The Asset-Liability Management Committee (ALCO) /

Board monitors adherence to the prudential limits
fixed by the bank and determines the strategy in the
light of market conditions (current and expected).

169

Quantitative Disclosures

( ) ()

:

The impact of changes of Net Interest Income (NII)

and Economic Value of Equity (EVE) calculated by
applying notional interest rate shocks as discussed
above are as under

(. )

0.25%

148.05
5.90
4.26
( 5%)
296.10
11.78
8.52
( 10%)
444.15
17.69
12.78
15%)
444.15
23.58
17.05
( 15%)

0.50%
0.75%
1.00%

(Rs. in Crore)

Change in
ALM Policy
Interest Rate Limit for EaR

()
25.03.2011
1 5

()

- ()
200

Earnings at Risk (EaR)

25.03.2011
Up to
1 year

0.25% change 148.05

(5% of NII of previous year)

5.90

4.26

0.50% change 296.10

11.79
(10% of NII of previous year)

8.52

0.75% change 444.15

17.69
(15% of NII of previous year)

12.78

1.00% change 444.15

23.58
(15% of NII of previous year)

17.05

ECONOMIC VALUE OF EQUITY

25.03.2011

Up to
5 years

25.03.20 11

Modified Duration Gap (DGAP)

1.03%
(+/-) 1.50%

Limit as per ALM Policy

9.92%

1.03 %
(+/-)1.50 %

Modified Duration Equity (MDE)

19.85%

For a 200 BPS Rate Shock the Drop in Equity Value

170

9.92 %
19.85 %

AUDITORS' REPORT

To

1 31 2011
-, 31 2011
, - 20
43 -
- 6 1786
-
-
-
- 407 /
-
0.58%, 2.98%, 1.62%
1.34%

1. We have audited the attached Balance Sheet of

st
Indian Overseas Bank as at 31 March 2011,
the Profit and Loss Account and Cash Flows
Statement of the Bank for the year ended
st
31 March 2011 annexed thereto in which are
incorporated the returns of 20 branches and 43
Regional Offices audited by us and 1786
branches including 6 Overseas Branches
audited by other auditors. The branches
audited by us and those audited by other
auditors have been selected by the Bank in
accordance with the guidelines issued by
Reserve Bank of India. Also incorporated in the
Balance Sheet and Profit & Loss Account are
the returns from 407 branches / centres which
have not been subjected to audit. These
unaudited branches account for 0.58 % of
advances, 2.98 % of deposits, 1.62 % of
interest income and 1.34% of interest
expenses. These financial statements are the
responsibility of the Bank's Management. Our
responsibility is to express an opinion based
on our audit.

The President of India

2 :



-



-

2. We conducted our audit in accordance with the

auditing standards generally accepted in India.
Those standards require that we plan and
perform the audit to obtain reasonable
assurance about whether the financial
statements are free of material mis-statements.
An audit includes examination on a test basis,
evidence supporting the amounts and
disclosure in the financial statements. An audit
also includes assessing the accounting
principles used and significant estimates made
by the management, as well as evaluating the
overall financial statements presentation. We
believe that our audit provides a reasonable
basis for our opinion.

3 - -
1949 "" ""

3. The Balance Sheet and the Profit and Loss

Account have been drawn up in Forms A and
B respectively of the Third Schedule to the
Banking Regulation Act, 1949.

4. : , ,
,
( 18)
- 4.2, 5, 6 , 7 ,

4. The additional disclosures made in Note No.

4.2, 5, 6 and 7 to the Notes on Accounts
(Schedule 18) with regard to information in
respect of Restructured Accounts, Business
Ratios, Maturity Pattern of Assets and Liabilities
and Exposure to Sensitive Sectors,

171

respectively are based on the

records/information as certified by the Bank
and relied upon by us.

5. ( )
1970 1
,
:

5.

)
:

:

As required by the Banking Companies

(Acquisition and Transfer of Undertakings) Act
1970 and subject to the limitation of the audit
indicated in Paragraph 1 above and also to the
limitation of disclosure required therein we
report as under :

a) In our opinion and to the best of our information

and according to the explanations given to us
and as shown by the books of the Bank
maintained in accordance with generally
accepted Accounting Principles in India.

i) -

31 2011

i) The Balance Sheet is a full and fair Balance

Sheet containing the necessary particulars,
and is properly drawn up so as to exhibit a
true and fair view of the affairs of the Bank as
at 31st March 2011;

ii. 31 2011

ii) The Profit and Loss Account shows a true

balance of Profit for the year ended
31st March 2011 and

iii. , 31 , 2011

iii) The Cash Flows Statement gives a true

and fair view of the cash flow for the year
ended 31st March 2011.
b) We have obtained all the information and
explanations, which to the best of our
knowledge and belief were necessary for the
purpose of our audit and have found the same
to be satisfactory.

)


) ,

c) The transactions of the Bank, which have come

to our notice have been within the powers of the
Bank.

) ,
-

d) The returns received from the offices and

branches of the Bank have been found
adequate for the purpose of our audit.

6. ,
:

6. Without qualifying our opinion, we draw

attention to :

. : .246.52


,
.82.17 , ,
( .82.17 )
.9

a) Note No 9 to the Financial Statements

regarding the write off of Rs.82.17 crore during
the year (previous year Rs.82.17 crore) being
one third of the deficit arising on the take over of
the specific assets and liabilities of a bank in the
previous year amounting to Rs.246.52 crore

172

. .
82.17

b) And carry over of balance of Rs.82.17 crore to

next year as against the writing off the entire
deficit in that year; and

.
-

( ) 15
/ 80 / 21.04.018/2010 - 11

10 . 804.17

c) Note No.10 to the Financial Statements, which

describes deferment of pension and gratuity
liability of the Bank to the extent of
Rs.804.17 crore pursuant to the exemption
granted by Reserve Bank of India to the Public
Sector Banks from the application of the
Provisions of Accounting Standard (AS) 15,
Employee Benefits vide its Circular
No.DBOD.BP.BC/80/21.04.018/2010-11 on
Reopening of Pension Option to Employees of
Public Sector Banks and Enhancement of
Gratuity Limits Prudential Regulatory
Treatment.

004532

003990

000462

For Varma & Varma

For PKF Sridhar & Santhanam

For Bhaskaran & Ramesh

Chartered Accountants

Chartered Accountants

Chartered Accountants

FRN 004532S

FRN 003990S

FRN 000462S

(..)

..015707

(.)

..024105

(. )

..021948

(K.M.SUKUMARAN)

(S.RAJESHWARI)

(A.BHASKARAN)

Partner

Partner

Partner

M.No.015707

M.No.024105

M.No.021948

.

00459

.

001874

.

002111

For M Bhaskara Rao & Co For Mittal Gupta & Co

For S R Mohan & Co

Chartered Accountants

Chartered Accountants

Chartered Accountants

FRN 000459S

FRN 001874C

FRN 002111S

(.. )

..002316

( )

..070744

( ..)

..018868

(K.R.RATNAM)

(AKSHAY K GUPTA)

(KODANDA RAMAGUPTA T.N.)

Partner

Partner

Partner

M. No.002316

M.No.070744

M.No.018868

:
: 02.05.2011

Place: Chennai
Date: 02.05.2011

173

 :
1.

( ) () 2006 16 10 2006, ,
( ) 1970 10 () :
30 7 /
----


1956 205 (1) () ()
: 2000-01, 2001-02, 2002-03 , 2003-04 / 2004-05, 2005-06,
2006-07, 2007-08 ,2008-09 2009-10 / ,
, () , , , , - 600 002

2.

2000 2003 ,
, , , , , - 600 002

3.

,
, , 05.07.2011 (
)

4. :
-

Instruction to Shareholder : Most Urgent and Immediate

1.

The Banking Companies ( Acquisition and Transfers of Undertaking ) and Financial Institution Laws
( Amendment ) Act 2006, Which has come in to force on 16 10 2006 has inserted a new section 10(B) in the
Banking Companies ( Acquistion and Transfer of Undertakings) Act, 1970 Which provides as Under :
Within 7 days from the expiry of 30 days from the date of declaration , if any shareholder has not
encashed / Claimed the dividend , Such amount lying in the bank dividend Current Account , Shall be
Transferred to a separate account styled Unpaid Dividend account of IOB for the year _______
Any money transferred to the Unpaid dividend account which remains unpaid or unclaimed for a
period of seven years from the date of such transfer , shall be transferred to the investor education
and protection fund ( IEPF ) Established under section 205(1)(C) of the companies act , 1956.
Hence the Shareholder Who have not received / encashed the dividend for financial years 2000 01, 2001-02,
2002 03 Interim / Final Dividend 2003 04, Interim Final Dividend 2004 -05, 2005 -06, 2006 -07, 2007 -08,
2008 -09 and for the year 2009 -10 are requested to send their claim along with detail of folio No.(s) to Investor
Relations Cell , Indian Overseas Bank, Central Office, 763 Anna Salai, Chennai 600 002

2.

Shareholders are also requested to send their claims, if any, in case of non receipt of refund order in respect of our
public issue 2000 and follow on public issue 2003 along with application number to investor relations cell, Indian
Overseas Bank, Central Office, 763, Anna Salai , Chennai 600 002.

3.

The Shareholder & who are holding shares in Electronic Form have to approach Only the DP concerned
and not the registrar for any change in the mandated particulars like change of address , Bank Account ,
etc.,. Please note that the Registrar Would send the dividend warrant ( or credit to the mandated account in the
case of shareholders who have opted for ECS credit ) Based on the particulars furnished by DP to the registrar as
on 05.07.2011

4.

Consolidation of Folios : It has been found that many shareholders maintain more than one folio (i.e.) multiple
folios. In order to Provide efficient service to shareholders , we request the shareholders to consolidate the folios
by forwarding their share certififcates to our Registrar and Share Transfer Agent for necessary correction in their
records.

174


,763, ,- 600 002

( 70 - (iii)) )
( )
( )
:
:

/, .......................................................................................................................................
..................................................................................................................................................
........................................ ...................................................
/ ..............................................................................................................
.............................................. ...................................... , 12 2011
, ( ) 314, , - 600 018 11
/ /
/ /
2011 ................................... ....................................
( )
.........................................................
.........................................................
.........................................................
.........................................................

.1/-

( )
.........................................................................................................................
........................................................................................................................................................
........................................................................................................................................................
: .............................................................. ........................................
( )
......................................................................... : ........................................
( )
12 2011 10.00 , , ( ) 314, , - 600 018
11 /
( / / )
175

Indian Overseas Bank

Central Office : 763, Anna Salai , Chennai 600 002
FORM 'B'
FORM OF PROXY
See Sub-Regulation (iii) of regulation 70
( TO BE FILLED IN AND SIGNED BY THE SHAREHOLDER )
Regd. Folio
No .
(if not
Dematerialised )

D P Id No.
CI. Id No.

I/We, ................ resident

of ..................... in the
District of . ....................in the
State....................,being a Shareholder / Shareholders of Indian
Overseas Bank, hereby appoint Shri / Smt ................... resident of
..in the district of .................. in the state
of as my / our proxy to vote for me / us and on my / our behalf at the 11th
Annual General Meeting of the Shareholder of Indian Overseas Bank to be held on Tuesday,
12th July 2011 at Narada Gana Sabha, ( Sathguru Gnanananda Hall ) 314 TTK Road, Chennai
600 018 and at any adjournment thereof.
Signed thisday of .2011

(signature of the proxy)

Please affix
Re. 1/Revenue
Stamp

Name
..................................................
Address ..................................................
..................................................
..................................................

Signature of the first named / sole holder

ATTENDANCE SLIP CUM ENTRY PASS

(Please fill this attendance slip and hand it over at the entrance of the meeting hall )
Name and address of the Shareholder ............................................................
...
No of Shares held :....................... Regd Folio No : ................................
( If not dematerialised )
DP ID No : ...................
Client ID No :
( If dematerialised )
I here by record my presence at the 11th Annual General Meeting of the Bank held on 12th July
2011 at 10.00 AM at Narada Gana Sabha, (Sathguru Gnanananda Hall) 314, TTK Road ,
Chennai 600 018

( Signature of the shareholder / proxy holder / representative )

176



. 47 ( . 22), ,
, 600 008
: 28193617/3618, : 28193619, - [email protected]

( )
?
, : ,

/
/
:

/
,


()
/ /
:
/

,

/
/ :
- --
-
// ( ) ,


:
()
/

177

INDIAN OVERSEAS BANK

DEPOSITORY SERVICES
New No.47 (Old No.22), Halls Road,
Egmore, Chennai 600 008
Phone 28193617/3618, Fax 28193619, E-Mail: [email protected]

KEEP YOUR SHARES IN DEMATERIALISED FORM (ELECTRONIC FORM)

WHY TO DEMAT YOUR SHARES
No loss, theft or damage to the shares as they are in electronic form
Transfer of Shares without any delay and stamp duty
Dividend/Interest can be credited to the bank account directly
Bonus/Rights shares get credited to your demat account directly
Change of Address/Bank particulars are communicated to all companies automatically if the
change is effected in the demat account
Facility available to get SMS alert for each debit / credit of shares in the demat account
Opting for Nomination ensures hassle-free transfer of shares to the demat account of Nominee
in the event of death of account holder
Receive daily SMS alert on favourable change in the value of portfolio
You can view your account through internet (IDeAS) free of charge
Receive Monthly / Quarterly statement of Transactions / Holdings
POINTS TO BE NOTED BY EXISTING DEMAT ACCOUNT HOLDERS :
Ensure to submit PAN particulars of all account holders if the status of account is blocked /
suspended. There is a possibility that the shares held in such blocked account are liable to be
attached by Income-TaxAuthorities
Opt for Nomination, if not already opted
Provide your Mobile number to get SMS alert facility FREE OF COST
Furnish your mail id to us to receive your monthly/quarterly statements by email
Each client is entitled to receive statement of transactions / holdings:
Monthly If there is atleast one transaction in the respective month
Quarterly If there is no transaction in a quarter
If Dividends/Interests/Refund Orders are not credited directly through ECS (wherever
applicable), please ensure that correct MICR code of the branch is available in the demat account
Delivery Instruction Slips can now be tendered at any of the Service Centres
Availability of ASBA Facility:
We have introduced Application Supported by BlockedAmount (ASBA) in our Bank.
Please avail of this facility for hassle-free investing for IPO / FPO and continue to earn interest on
your deposits in your BankAccounts.
178

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179

Date : ................................

From :

To:
M/s.Cameo Corporate Services Limited
Unit : INDIAN OVERSEAS BANK
'Subramanian Building '
No.1 Club House Road
Chennai 600002
Dear Sir(s),
Ref: PAYMENT OF DIVIDEND THROUGH NATIONAL ELECTRONIC CLEARING SERVICES (NECS)

Name of First Holder (In Block Letter)

Folio No.
No of shares
Bank A/c Type

[Please tick ( ) ]

Savings
A/c

Current
A/c

Cash Credit
A/c

Bank Account Number

Name of the Bank
Branch Name
IFSC Code *
Full Address of the Bank
9 Digit Code number of the Bank & Branch
appearing on the MICR cheque issued by the
Bank (Please attach Photocopy of a cheque
or a blank cancelled cheque issued by your
bank relating to your above account for
verifying the accuracy of the code.
I agree to avail of the Electronic Clearing Service, as and when implemented by Indian Overseas Bank
for payment of dividend to me.
I hereby declare that the particulars given above are correct and complete . If the transaction is delayed
or not effected at all for reasons of incomplete or incorrect information, I would not hold
Indian Overseas Bank / Registrar responsible .
I further undertake to inform the registrar / Indian Overseas bank any change in my Bank , Branch and
Account no.
(Signature of the First / Sole shareholder)
180

OUR RETAIL PRODUCTS AT A GLANCE

SB STUDENT:

16
.500/:

-
: - (,
)
:
. 1 :
: ( 60 )
:
.750/: (75 )
:
:
:
. 75000/- :
/ ( 75%
)

For the Students from 16 years of age

Minimum Balance Rs 500/Free Internet Banking Registration
Mobile Banking Facility
SMS Alerts for all transactions in the account
Free Multipurpose Card (to operate in ATM,
POS & ECOM)
Free Standing Instructions
Free Personal Accident Cover for 1 Lac
Free Cheque Book (60 leaves per annum)
SB PLATINUM:
Minimum Balance Rs.750/Free cheque book (75 leaves)
Free International VISA Debit Card
Free Internet banking and mobile banking
facility
Free SMS Alerts
Free Personal Accident Insurance cover of
Rs.75000/Transfer of funds through RTGS/NEFT (75%
concession on charges)
Anywhere banking in CBS branches
ASBA facility available

:

: 60
:
-
.50,000/-
:
:
: /
. 1 :
*

SB CORPORATE SALARY ACCOUNT:

Zero Balance Account
Free 60 Cheque Leaves per annum
Free IOB International VISA Debit Card
SMS Alerts for all transactions in the account
Withdrawal up to Rs 50,000 per Day in ATMs
Free Internet Banking Facility
Free Mobile Banking Facility
Free RTGS/NEFT Facilities
Free Personal Accident Cover for Rs 1 Lac
Over Draft Facility* & much more

:
.7500/:
:
:
*

CD SUPREME:
Minimum Balance Rs.7500/Free Debit Card
Free Cheque Leaves
Free Internet Banking
* Subject to Banks satisfaction
181

 / 75%
- .50,000/-
:
( 76
.7.50 )

75% concession on NEFT/RTGS

Free Cash withdrawal up to Rs. 50,000/- under
CBS transactions from any Branch
Concession on Gold Coin purchase ( Rs. 7.50
per Gram on minimum purchase of 76 gms in a
day)
ASBA facility available

:
.500

SUBHA GRUHA:
Housing Finance scheme for resident
individuals up to Rs.500 Lakhs

- 20% / / /
20

Margin-20%. Repayable in 20 years for

purchase/construction of new/old houses / flats

18 3

Holiday periodup to 18 months for

construction and 3 months for purchase

Interest rate depends on the size of the loan and

repayment period

Security - Mortgage of house

PUSHPAKA:

- -

90%

75%
--

- 60
36

Finance scheme for purchase of new as well as

used car and 2-wheeler
90% of cost of new car and two-wheeler and
75% of market value of used car financed
against hypothecation of vehicle
Higher amount of loan for used car considered
on case to case basis
Repayment - 60 EMI for new cars and 36 EMIs
for used cars

IOB JEEVAN:

. 1
. 2

Group Insurance Scheme in association with

LIC for all account holders of IOB
Life Cover for Rs. 1 lakh (Natural Death) and
Rs. 2 lakh (Accidental Death)
Every year renewable
No medical Examination
Members of joint accounts can be covered
individually

182

 :
999.9
24

IOB GOLD COINS:

999.9 Purity
24 carat

PAMP certified

Tamper Proof

Competitive Pricing

2,4,8,20,50 100

Available in 2,4,8,20,50 & 100 Gms

Imported from Switzerland

:


.10 .125

/

10
( )
:
, ,
/
. 1 .
10
24 30

IOB CA:
A retail product to meet the professional credit
requirements of Chartered Accountants
Quantum from Rs.10 Lacs to Rs. 125 Lacs
depending on the category
Available as Term Loan for Fixed Assets/Car &
Cash Credit for Working Capital
Maximum of 10 years by EMI (including
Moratorium period)
IOB URBAN HORTICULTURE:
For Individuals/Institutions to raise Kitchen
Gardens, Flower Gardens, Roof Gardens etc
Loan up to Rs.1Lac (individuals) & up to
Rs. 10 Lacs (Institutions)
Repayment up to 24 EMIs for Individuals &
30 EMIs for Institutions
Competitive Interest Rate

FOR DETAILS CONTACT OUR NEAREST BRANCH

183