The Bank’s Board of Directors is pleased to present the Report on its business and operations for the financial year ended March 31, 2017
In the financial year 2016-17, the Indian economy’s growth was healthy, buoyed by policy reforms and improving macroeconomic fundamentals. Against this backdrop, your Bank strived to realign its portfolio mix in favour of retail and priority sector lending business. Various critical business enablers such as leveraging on the Bank’s proven IT prowess, innovations in digital products and delivery channels, digitisation of process, capitalising on areas of core competencies such as project advisory and loan syndication business, young and talented human capital, among others has adeptly assisted the Bank to enhance value for all its stakeholders.
Financial Highlights
As on March 31, 2017, your Bank’s aggregate deposits and advances touched Rs.2,68,538 crore and Rs.1,90,826 crore, respectively. Your Bank’s business highlights for the period under review are presented in Table 1.
Table 1 : Key Financials
(In Rs. crore)
As on March 31
|
2016
|
2017
|
Capital
|
2,058.81
|
2,058.81
|
Reserves & Surplus
|
25,662.97)
|
20,504.83
|
Deposits
|
2,65,719.83)
|
2,68,538.10
|
Borrowings
|
70,591.64)
|
56,363.98
|
Other Liabilities & Provisions
|
11,356.57)
|
14,302.18
|
Total Liabilities
|
3,75,389.82
|
3,61,767.90
|
Cash & Balances with RBI
|
13,822.91
|
13,346.92
|
Balances with Banks & Money at Call & Short Notice
|
9,77763)
|
19,33716
|
Investments
|
92,99713)
|
92,934.41
|
Advances
|
2,15,893.45)
|
1,90,825.93
|
Fixed & Other Assets
|
42,898.70)
|
45,323.48
|
Total Assets
|
3,75,389.82
|
3,61,767.90
|
For the period
|
2015-16
|
2016-17
|
Total Income
|
31,453.46)
|
31,758.97
|
Total Expenses (other than provisions)
|
26,083.39)
|
27,180.51
|
Provisions (other than tax)
|
10,340.82)
|
13,196.47
|
Profit/ (Loss) Before Tax
|
(4,970.75)
|
(8,618.01)
|
Provision for Tax*
|
(1,305.95)|
|
(3,459.87)
|
Profit/ (Loss) After Tax
|
(3,664.80)|
|
(5,158.14)
|
* Net of Current Income Tax and Deferred Income Tax
During the year under review, your Bank’s total income amounted to Rs.31,759 crore, comprising interest income of Rs.27,791 crore and other income of Rs.3,968 crore. Total expenditure (excluding provisions and contingencies) stood at Rs.27,180.52 crore with interest expenses at Rs.22,040 crore and operational expenses at Rs.5,141 crore.
However, total provisioning of your Bank increased in view of continued stress on the Bank’s portfolio. The provisions include Rs.13,875.09 crore towards provision for nonperforming assets, bad debts written-off and investments. As a result, your Bank incurred a net loss of Rs.5,158.14 crore during 2016-17.
For each share with face value of Rs.10, Earnings per Share (EPS) during the year stood at ‘ (25.05), while Book Value per Share (excluding Intangible Assets) stood at Rs.55.51 as at end-March 2017. For calculating Book Value per Share, the Government of India capital infusion of Rs.1,900 crore was considered, which is a part of other liability in financials, pending allotment of shares. For the financial year 2016-17, the Board of Directors has not recommended any dividend.
Report on the Performance and Financial Position of Subsidiaries and Joint Venture included in the Consolidated Financial Statement
(In Rs.000s)
Name of the entity
|
Net Assets, i.e., total assets minus total liabilities
|
Share in profit or loss
|
|
As % of consolidated net assets
|
Amount
|
As % of consolidated profit or loss
|
Amount
|
1
|
2
|
3
|
4
|
5
|
Parent : IDBI Bank Ltd. Subsidiaries:
Indian:
|
95.94%
|
22,563.65
|
103.50%
|
(5,158.14)
|
1. IDBI Capital Market Services Ltd.
|
1.39%
|
326.79
46.07
104.42
|
-0.28%
-0.28%
-0.75%
|
13.74
13.95
7.26
|
2. IDBI Intech Ltd.
|
0.20%
|
3. IDBI Asset Management Company Ltd.
|
0.44%
|
4. IDBI MF Trustee Company Ltd.
|
0.01%
|
1.20
|
0.00%
|
0.13
|
5. IDBI Trusteeship Services Ltd.
|
0.64%
|
151.58
|
-0.84%
|
41.96
|
Foreign:
|
NA
|
NA
|
NA
|
NA
|
|
0.30%
|
70.57
|
|
|
Minority Interests in all subsidiaries
|
-0.38%
|
19.01
|
Associates (Investment as per the equity method)
|
|
|
|
|
Indian
|
|
NA
NA
|
1%
-0.52%
|
|
1. Biotech Consortium India Ltd.
|
NA
|
0.45
|
2. National Securities Depository Ltd.
|
NA
|
26.16
|
3. NSDL e-Governance Infrastructure Ltd.
|
NA
|
NA
|
-0.72%
|
36.05
|
4. North Eastern Development Finance Corporation Ltd.
|
NA
|
NA
|
-0.20%
|
9.89
|
Foreign
|
NA
|
NA
|
NA
|
NA
|
Joint Ventures
|
|
|
|
|
(as per proportionate consolidation / investment as per the equity method)
|
|
|
|
|
Indian
|
|
|
|
|
1. IDBI Federal Life Insurance Company Ltd.
|
1.39%
|
325.87
|
-0.50%
|
24.99
|
Foreign
|
NA
|
NA
|
NA
|
NA
|
TOTAL
|
100%
|
23,519.59
|
100%
|
(4,983.56)
|
Elimination
|
-1.09%
|
(25728)
|
0.65%
|
(32.35)
|
Net Total
|
98.91%
|
23,262.31
|
100.65%
|
(5,015.91)
|
Note: None of the above subsidiaries have any subsidiary
Material changes and commitments, if any, affecting financial position of IDBI Bank which have occurred during the end of financial year and the date of Board Report.
There are no material changes and commitments affecting the financial position of the Bank which have occurred between the end of the financial year of the Bank, i.e. March 31, 2017 and the date of the Directors’ Report i.e. May 18, 2017.
The details in respect of adequacy of internal financial controls with reference to the financial statements.
The Bank has adequate internal controls and processes in place with respect to its financial statements which provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements. These controls and processes are driven through various policies, procedures and certifications. The processes and controls are reviewed periodically.
Capital Adequacy
Your Bank computes regulatory capital requirement for credit, market and operational risks as prescribed under the Pillar 1 guidelines of the Basel III framework.
As on March 31, 2017, the Capital to Risk-weighted Assets Ratio (CRAR) of your Bank was 10.70% as against the minimum regulatory requirement of 10.25%. Your Bank’s Common Equity Tier 1 (CET 1) ratio was 5.64% as against the minimum applicable CET 1 ratio of 6.75% (including capital conservation buffer i.e. CCB of 1.25%) stipulated by RBI. The Tier-I ratio stood at 7.81% as on March 31, 2017 against the regulatory requirement of 8.25% (including CCB).
Basel guidelines have introduced a mandatory Capital Conservation Buffer (CCB) with effect from March 31, 2016. CCB is designed to ensure that banks build up buffers during normal times (i.e. outside periods of stress) which can be drawn down as losses are incurred during stressed period. In line with the transitional arrangements of the regulatory guidelines, the CCB applicable for March 31, 2017 is 1.25% (50% of total CCB of 2.5%). Accordingly, the minimum regulatory requirement of total capital CCB is 10.25% (CRAR CCB). Your Bank has a CRAR ratio of 10.70%. Similarly, your Bank has a CET 1 CCB ratio of 5.64%.
Your Bank has a Board approved policy on Internal Capital Adequacy Assessment Process (ICAAP), in line with the Pillar 2 norms of the Basel III framework, which enables the Bank to internally assess and quantify those risks that are not covered under Pillar 1 as well as develop appropriate strategies to manage risks under normal and stress conditions. Your Bank has adopted a Disclosure Policy in accordance with the Pillar 3 requirements under the Basel norms and accordingly, publishes disclosures on the Bank’s website at the end of each quarter.
Business Strategy
Rebalancing the portfolio mix continued to be the focal point of your Bank’s business strategy. In alignment with its business strategy, your Bank took various measures that targeted the retail and priority sector segment.
Your Bank has been improving its accessibility by strategically expanding its branch and ATM network.
Furthermore, your Bank, being one of the leading players in the digital banking domain, has been embracing latest cutting edge technology to provide digital offerings to seamlessly cater to its customers’ banking and financial requirements. Additionally, your Bank continued to introduce technological innovations which aided in improving its operational convenience and also enhanced efficiency and security of its systems and processes.
Key Business Initiatives
In alignment with the corporate objective of attaining a more balanced business portfolio mix, your Bank continued to take initiatives to promote its retail business. Your bank offers a wide range of products and services encompassing Asset, Liability, Third Party and Capital Market products, among others. Your Bank, through its branches, ATMs and digital channels, offers a wide range of products and services to cater to the continuously evolving as well as emerging customer needs. Your Bank has been fine-tuning its existing products and services as also designing customised products and services across various retail segments to maintain its competitive edge. To increase its accessibility to its retail customers, your Bank has been continuously striving to expand its banking footprints by strategically augmenting its branch and ATM network. As on March 31, 2017, your Bank’s network stood at 1,896 branches (including one overseas branch and one International Banking Unit) and the number of ATMs stood at 3,537.
Your Bank has proactively deployed cutting-edge technology solutions to offer various digital avenues for customers to transact at their convenience. Your Bank’s digital banking channels viz. ATM, internet banking, mobile banking, kiosks, e-lounge facility, etc. are designed to deliver a wide range of banking services in a seamless manner. Apart from being a frontrunner in digital initiatives, your Bank also places utmost importance on security and confidentiality of customer transactions, information and data. In addition to employing highly sophisticated technology to ensure safe and secure environment for the customer while transacting through digital channels, your Bank also sensitises its customers on cyber frauds and its prevention through emails, SMS and inserts sent along with Bank’s statements on a periodic basis.
In adherence to the regulatory guidelines as well as to tap the potential business opportunities, your Bank worked towards building its Priority Sector Lending (PSL) business by taking various initiatives and campaigns.
Your Bank is also leveraging its Business Correspondents (BCs)/ Business Facilitators (BFs) network, in addition to its branch and ATM network, to expand its reach to the priority sector segment, especially in the rural and semiurban areas, thereby building a sustainable PSL portfolio.
In order to ensure inclusive growth in the economy, your Bank has been actively partnering with the policymakers to further the objective of financial inclusion. Through its intervention in four key areas, viz. expanding banking infrastructure, offering appropriate financial products, making intensive use of technology and enhancing financial literacy, your Bank has been ensuring access to appropriate financial products and services needed by most vulnerable sections of the society at an affordable cost in a fair and transparent manner.
Your Bank’s corporate banking portfolio includes exposure to sectors as varied as power, textiles, cement, steel, engineering, construction, paper and paper products, electronics and electrical equipment, sugar, chemicals, automobiles, Non-Banking Financial Companies (NBFCs), among others. Your Bank’s asset products basket for corporate clients includes term loans, working capital (both fund-based and non-fund based), packing credit to exporters, receivables buyout, bill discounting, lending to NBFCs, among others. Your Bank continues to be proactive in extending project appraisal, debt syndication, structuring and advisory services across various sectors. During the year, your Bank received several mandates for appraisal and debt syndication.
While 2016-17 witnessed a number of policy reforms from the Government, the core sector industries and infrastructure sector continued to face marginal profitability and liquidity constraints, thus, leading to persistence of stress. Since your Bank has historically been a major lender for these industrial sectors, the stress in the corporate advances portfolio of the bank continued during the year. However, the Bank had initiated necessary measures for resolution of these stressed assets within the available regulatory framework like Strategic Debt Restructuring (SDR), Scheme for Sustainable Structuring of Stressed Assets (S4A), 5/25 structuring, etc. under the aegis of Joint Lenders Forum (JLF). With the recent amendments to Banking Regulation Act and revised guidelines on JLF mechanism issued by RBI, the Bank expects to have expeditious resolution of these stressed assets in the current year.
Your Bank conducts its Trade Finance (TF) business through its full-fledged Authorised Dealer TF Centres and retail TF branches. Your Bank continued to show impressive growth and set new service standards by working closely with its customers to create customer solutions in TF business. As part of your Bank’s on-going digital transformation, IDBI eTrade Portal - an innovative online facility - was revamped to enable its customers to avail a basket of facilities in a paperless mode and hassle-free manner.
Your Bank acts as an agent for Central and State Governments to manage their receipts and payments. Besides being authorised to collect various Central Government taxes, your Bank also has the mandate for collecting electronic payment of railway freight charges and Commercial Tax and other Government receipts for 23 State Governments and four Union Territories.
Your Bank has received in-principle approval for Bharat Bill Payment System (BBPS) - an RBI mandated system - which aims at offering integrated and interoperable bill payment system in the country.
Your Bank became the first public sector bank to open its IFSC Banking Unit (IBU) at India’s first and only International Financial Services Centre (IFSC) at Gujarat International Finance Tec-City (GIFT). Your Bank, through its GIFT IBU branch and its overseas branch at the Dubai International Financial Centre (DIFC), Dubai, offers a wide range of corporate banking services to meet its Indian clients’ fund requirements for their Indian operations as well as overseas ventures.
Your Bank, in its endeavour to be a socially responsible entity, appreciates the importance of Corporate Social Responsibility (CSR) activities and has put in place a Board-approved CSR policy with effect from April 1, 2014 in compliance with Companies Act, 2013. Your Bank’s CSR activities embody its commitment to contribute to the sustainable social and economic development of the society. Your Bank, through its diverse CSR activities, contributed towards providing improved access to health services, promoting education for children, promoting gender equality, promotion and installation of renewable energy systems, promotion of sports, enhancement of livelihood opportunities, advancement of vocational and employable skills and holistic development of villages by undertaking planned interventions.
The detailed descriptive of the Bank’s initiatives undertaken during the year is contained in the Management Discussion and Analysis section of the Annual Report.
Board of Directors
Your Bank’s Board of Directors is broad-based and its constitution is governed by the provisions of the Banking Regulation Act, 1949, the Companies Act, 2013, the Articles of Association of your Bank and the requirements of Corporate Governance, as envisaged in SEBI (LODR) Regulations, 2015. The Board functions directly as well as through various Board Committees constituted to provide focussed governance in the important functional areas of your Bank.
As on March 31, 2017, the Board comprised of nine Directors, including Managing Director and CEO (MD & CEO), two Deputy Managing Directors (DMDs), two Non-Executive Directors and four Independent Directors. Shri Kishor Kharat, MD & CEO, Shri K.P.Nair and Shri G.M.Yadwadkar, DMDs, Shri Pankaj Jain and Shri Praveen Garg, Central Government official Nominees as Non-Executive Directors, Shri S. Ravi, Shri Ninad Karpe, Shri Gyan Prakash Joshi and Ms. Neeru Abrol as Independent Directors constituted the Board as on March 31, 2017. The strength of 9 (nine) Directors on the Board, as against the composition for maximum strength of 13 Directors provided under Article 116(1) of the Articles of Association, meets the requirement provided under Article 114(a) of the Articles of Association.
Apex Committees
The Board has fifteen sub-committees, namely, Audit Committee of the Board, Remuneration Committee, Executive Committee, Nomination Committee, Stakeholders’ Relationship Committee, HR Steering Management Discussion and Analysis Committee, Frauds Monitoring Committee, Recovery Review Committee, Risk Management Committee, Independent Directors’ Committee, Corporate Social Responsibility Committee, Non-Cooperative Borrowers’ Review Committee, Customer Service Committee, Wilful Defaulters’ Review Committee and Information Technology Committee, to oversee various functional aspects of your Bank’s business and operations.
Corporate Governance
Your Bank is committed to adopting the best corporate governance practices. It believes that effective corporategovernance is not just a requirement for regulatory compliance, but also a facilitator for enhancement of stakeholders’ value. The details of your Bank’s corporate governance practices are given in this Annual Report as a separate section under Corporate Governance Report.
Business Responsibility Report
The Securities and Exchange Board of India (SEBI), vide its notification dated December 22, 2015, has mandated the inclusion of Business Responsibility (BR) Report as part of the Annual Report for Top 500 listed entities based on market capitalisation at BSE and NSE. The BR Report should describe initiatives taken by the listed entity from an environmental, social and governance perspective. The Bank’s Business Responsibility Report has been hosted on the website of the Bank (www.idbi.com).
Statement under Section 134 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014
There were no personnel in your Bank’s services, during the financial year under review, who received remuneration over Rs. 1.02 crore annually. Besides, there were no personnel in the service of the Bank for a part of the year who received remuneration in excess of Rs. 8.50 lakh per month. Further there was no personnel employed throughout the financial year or part thereof who was in receipt of remuneration at a rate, which in the aggregate, was in excess of that drawn by the Managing Director & CEO or the Deputy Managing Directors of the Bank and who held by himself or along with his spouse and dependent children, not less than 2% of the equity shares of the Bank.
Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo
The provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are not applicable to your Bank. However, your Bank has been increasingly using information technology in its operations.
RBI’s Prompt Corrective Action
The RBI, vide its letter dated May 05, 2017, has initiated Prompt Corrective Action (PCA) for your Bank in view of its high net Non-Performing Assets (NPA) and negative Return on Assets (ROA). The Bank is taking necessary actions to comply with the RBI’s directive in this regard.
Directors’ Responsibility Statement
The Board of Directors, hereby, declares and confirms that:
a. In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
b. The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit and loss of the Bank for that period;
c. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Bank and for preventing and detecting fraud and other irregularities;
d. The Directors had prepared the annual accounts on a going concern basis;
e. The Directors had laid down internal financial controls to be followed by the Bank and that such internal financial controls are adequate and were operating effectively; and
f. The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
Acknowledgements
Your Bank’s Board of Director s is sincerely grateful to the Government of India, Reserve Bank of India(RBI), Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority of India(IRDA) and all other statutory/ regulatory authorities for their valuable co-operation and guidance. The Board also acknowledges, with gratitude, the co-operation and support received from various State Governments and other banks/ financial institutions. The Board thanks various multilateral institutions and international banks/ institutions for their periodic support. The Board takes this opportunity to put on record its deep sense of gratitude to its loyal shareholders and customers for extending their support during the year, and looks forward to their continued association in the years ahead. During the financial year, the Bank has received various recognition and accolades for its excellence in the banking domain. The Board is thankful to all such organisations/ agencies for formally recognising the Bank’s efforts. The Board appreciates the sincere and devoted services displayed by its entire staff and highly values their commitment towards the Bank.
[K.P. Nair] [Mahesh Kumar Jain]
Deputy Managing Director Managing Director & CEO
Place: Mumbai
Date : May 18, 2017
The Bank''''s Board of Directors is pleased to present the Report on its
business and operations for the financial year ended March 31, 2016.
During 2015-16, your Bank''''s business strategy was shaped by emerging
macroeconomic developments and evolving business dynamics. Re-balancing
the portfolio mix continued to be the mainstay of your Bank''''s business
strategy during the year. This, along with other critical business
enablers such as a well-calibrated organisational structure, strategic
expansion of banking touch-points, actively leveraging on its proven IT
prowess, digitisation of business processes, among other measures, has
enabled your Bank to deliver enhanced customer experience at a reduced
operating cost.
Financial Highlights
As on March 31, 2016, your Bank''''s aggregate deposits and advances
touched Rs. 2,65,720 crore and Rs. 2,15,893 crore, respectively,
implying a growth of 2% and 4%, respectively over the previous year.
Your Bank''''s business highlights for the period under review are
presented in Table 1.
During the year under review, your Bank''''s gross income amounted to Rs.
31,453 crore, comprising interest income of Rs. 28,043 crore and other
income of Rs. 3,410 crore. Interest expenses stood at Rs. 21,954 crore
and operational expenses at Rs. 4,130 crore, accounting for total
expenditure (excluding provisions and contingencies).Your Bank''''s
operations during the year resulted in an operating profit of Rs. 5,370
crore.
However, total provisioning of your Bank increased following the RBI''''s
Asset Quality Review (AQR) which required banks to proactively provide
for certain accounts. Total provisions other than tax during the year
were at Rs. 10,340.82 crore, which mainly include Rs. 9,191 crore
towards provision for non-performing assets, bad and doubtful debts and
investments. As a result, your Bank incurred a net loss of Rs. 3,665
crore during 2015-16.
Table 1 : Key Financials
(Rs. In crore)
As on March 31 2015 2016
Capital 1,603.961 2,058.81
Reserves & Surplus 22,712.96 25,662.97
Deposits 2,59,835.971 2,65,719.83
Borrowings 61,832.46 69,573.94
Other Liabilities & Provisions 10,158.651 11,356.57
Total Liabilities 3,56,144.00 3,74,372.12
Cash & Balances with RBI 13,152.82 13,822.91
Balances with Banks & Money at
Call & Short Notice 1,489.991 2,75763
Investments 97700.88 98,999.43
Advances 2,08,376.87 2,15,893.45
Fixed & Other Assets 35,423.44 42,898.70
Total Assets 3,56,144.00 3,74,372.12
For the period 2014-15 2015-16
Total Income 32,161.62 31,453.46
Total Expenses (other
than provisions) 26,433.52 26,083.39
Provisions (other than tax) 4,440.781 10,340.82
Profit/(Loss) Before fax 1,28733 (4970.75)
Provision for fax* 413.94 (1,305.95)
Profit/ (Loss) After fax 873.39 (3,664.80)
* Net of Current Income Tax and Deferred Income Tax
For each share with face value of Rs. 10, Earnings per Share (EPS)
during the year stood at Rs. (21.77), while Book Value per Share stood
at Rs. 107.41 as at end-March 2016. For the financial year 2015-16, the
Board of Directors has not recommended any dividend.
Report on the Performance and Financial Position of Subsidiaries and
Joint Venture included in the Consolidated Financial Statement
As required by Accounting Standard-21 issued by the
Institute of Chartered Accountants of India, the Bank''''s consolidated
financial statements included in this Annual Report incorporate the
accounts of its subsidiaries and other consolidating entities.
A statement pursuant to Section 129 of Companies Act, 2013 showing key
financials of the Bank''''s subsidiaries/ Joint Venture is included
separately in this Annual Report.
The performance and financial position of Subsidiaries, Joint Venture
and associates of the Bank as on March 31, 2016 has been annexed to
this report as under.
(Rs. In''''000s)
Name of the entity Net Assets,
i.e., total assets Share in profit or loss
minus total
liabilities
As % of Amount As % of Amount
consolidated consolidated
net assets profit or
Parent : IDBI
Bank Ltd 96.92% 2772178 91 103.18% -3664 80 26
Subsidiaries:
Indian:
1. IDBI Capital
Market Services
Ltd. 1.09% 313 05 081 -0.26% 9 27
76
2. IDBI
Intech Ltd. 0.13% 37 64 87 -0.12% 4 22 08
3. IDBI Asset
Management
Company Ltd. 0.34% 97 16 581 -0.10% 3 47 92
4. IDBI MF
Trustee Company
Ltd. 0.00% 1 07 61 0.00% 17 30
5. IDBI
Trusteeship
Services Ltd. 0.46% 13185 45 -1.07% 38 10 39
Foreign: NA NA NA NA
Minority
Interests in
all subsidiaries 0.21% 6145 62 -0.49% 17 26 11
Foreign NA NA NA NA
Joint Ventures
(as per
proportionate
consolidation
investment as
per the equity
method)
Indian
1. IDBI Federal
Life Insurance
Company Ltd. 1.05% 300 83 27
-0.21% 7 33 53
Foreign NA NA NA NA
TOTAL 100% 28603 41 781 100% -355199 01
Elimination -1.91% -544 98 23 1.09% -38 82 52
Net Total 98.09% 28058
43 54 101.09% -3590 8153
Note: None of the above subsidiaries have any subsidiary
Material changes and commitments, if any, affecting financial position
of IDBI Bank which have occurred during the end of financial year and
the date of Board Report.
There are no material changes and commitments affecting the financial
position of the Bank which have occurred between the end of the
financial year of the Bank i.e. March 31, 2016 and the date of the
Directors'''' Report i.e. May 20, 2016.
The details in respect of adequacy of internal financial controls with
reference to the financial statements.
The Bank has adequate internal controls and processes in place with
respect to its financial statements which provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements. These controls and processes are driven through
various policies, procedures and certifications. The processes and
controls are reviewed periodically.
Capital Adequacy
Your Bank computes regulatory capital requirement for credit, market
and operational risks, as prescribed under the Pillar-I guidelines of
the Basel III framework, on a quarterly basis. With regard to the
requirement for higher quality capital highlighted under Basel III
norms, your Bank, at present, has sufficient common equity to meet the
regulatory requirements as stipulated in the guidelines.
The Basel guidelines have introduced a mandatory Capital Conservation
Buffer (CCB) with effect from March 31, 2016. The CCB is designed to
ensure that banks build up buffers during normal times (i.e. outside
periods of stress) which can be drawn down in case of losses incurred
during stressed period. In line with the transitional arrangements of
the regulatory guidelines, the CCB applicable for March 31, 2016 is
0.625% (25% of total CCB of 2.5%). As on March 31, 2016, the Capital to
Risk-weighted Assets Ratio (CRAR) of your Bank was 11.67% which is
above the minimum regulatory requirement of 9.625% (including CCB).
Your Bank''''s Common Equity Tier 1 (CET 1) ratio was 7.99% which is also
above the minimum applicable CET 1 ratio of 6.125% (including CCB)
stipulated by RBI. The Tier-I ratio stood at 8.90% as on March 31, 2016
against the regulatory requirement of 7.625% (including CCB).
Your Bank has a Board approved policy on Internal Capital Adequacy
Assessment Process (ICAAP), in line with the Pillar-ll norms of the
Basel III framework, which enables it to internally assess and quantify
those risks that are not covered under Pillar-I as well as develop
appropriate strategies to manage risks under normal and stress
conditions. Your Bank has adopted a Disclosure Policy in accordance
with the Pillar-Ill norms under the Basel framework and consequently,
publishes disclosures on the Bank''''s website at the end of each quarter.
Business Strategy
Your Bank is at an inflection point and has a significant opportunity
to embark on a path of transformation in order to reinvigorate its
financial health. The comprehensive transformational process of the
Bank is based on five pillars, viz. Business, People, Processes,
Technology and Capital Management. Your Bank, along with leveraging on
these five transformational pillars, will also adopt a multi- pronged
strategy to achieve its business targets. This multi-pronged strategy
will encompass further leveraging the synergy across verticals,
subsidiaries and associate companies; capitalise on areas of core
competencies such as project advisory and loan syndication business;
augmenting the depositor base; aggressive focus on raising CASA
deposits; boosting fee income; stepping up lending to retail including
agricultural and MSME Lending, particularly PSL; digitisation of
processes; strengthening recovery efforts etc. These initiatives will
be complemented by strategic expansion of your Bank''''s network and
adoption of latest cutting edge technology to further leverage on its
IT prowess to seamlessly cater to the growing business requirements.
All these initiatives will ensure high level of customer satisfaction
and consequently, improve the profitability of the Bank. The
transformation process of your Bank will enable it to carve a niche for
itself and emerge as a leading financial conglomerate.
Key Business Initiatives
In tandem with the broader objective of obtaining a more balanced
business portfolio mix, your Bank continued to focus on increasing its
retail business. To lend support to this business re-orientation
process, your Bank offers a bouquet of innovative and customised
products and services covering Liability, Asset, Capital Market, Third
Party products through its brick and mortar branches and ATMs as well
as alternate channels to cater to the diverse needs of its customers.
To lend it a competitive edge, your Bank continued to revamp its
existing product and services as also introduced new ones.
To widen its reach to the retail customers, the Bank has been
continuously striving to expand its footprints by tactically augmenting
its branch and ATM network. As on March 31, 2016, your Bank''''s network
stood at 1,846 branches (including one overseas branch) and the number
of ATMs stood at 3,310.
Apart from augmenting its brick and mortar branches, your Bank is also
continuously expanding and strengthening its alternate channels of
delivery by leveraging its state-of- the-art technology infrastructure
to provide a wide range of banking services to its customers on 24x7
basis. Your Bank''''s alternate channels of delivery viz. ATM, internet
banking, mobile and tab banking, kiosks, e-lounge facility etc. are
designed to deliver a wide range of banking services in a seamless
manner. Your Bank accords topmost priority to security and
confidentiality of customer transactions, information and data.
Consequently, your Bank continues to employ highly sophisticated
technology to ensure safe and secure environment for the customer while
transacting through alternate channels. Towards this end, one of the
path-breaking initiatives launched by your Bank during the year was the
''''Abhay App'''' which enables the customers to manage their debit card,
thereby minimising chance of misuse.
In adherence to the regulatory guidelines, your Bank continued to focus
on Priority Sector Lending (PSL). During the year, your Bank launched
two major products viz. IDBI MUDRA Loan and IDBI Bunkar MUDRA Yojana
(IBMY) to cater to the credit requirements of all non-farm income
generating activities under the Pradhan Mantri MudraYojna (PMMY). To
supplement the Bank''''s network, your Bank has appointed corporate as
well as individual Business Correspondents/ Business Facilitators (BCs/
BFs) to expand its outreach to the priority sector segments, thereby
building a sustainable PSL portfolio.
Your Bank has been proactive in partnering with the policymakers to
further the objective of financial inclusion by ensuring access to
appropriate financial products and services needed by most vulnerable
sections of the society at an affordable cost in a fair and transparent
manner.
Your Bank, through its strategically located branches, serves the
corporate customers through its three dedicated verticals viz.
Corporate Banking Group-I (CBG-I), Corporate Banking Group-ll (CBG-II)
and Infrastructure Corporate Group (ICG). While CBG I and CBG II cater
to large-sized and mid-sized corporate customers, ICG caters to
corporate customers in the infrastructure sector which includes power,
telecom, ports, roads and bridges, airports, urban infrastructure
development, among other sectors.
Your Bank continues to be proactive in extending project appraisal,
debt syndication, structuring and advisory services across various
sectors. During the year, your Bank bagged several mandates for
appraisal and debt syndication. Your Bank has been consistently ranked
as one of the leading debt syndicators in India.
Your Bank has been active in the field of environmental banking for
over two decades and has attained the role of a pioneer in this field.
Your Bank became the first public sector commercial bank in India to
have successfully raised US$ 350 million by way of Green Bonds from the
international market. The funds raised through these Green Bonds will
be utilised towards funding clean energy projects in India.
Your Bank conducts its domestic and international Trade Finance (TF)
business through its full-fledged TF Centres (Authorised Dealer in
Foreign Exchange) and retail banking branches across the country so as
to serve its corporate and retail trade finance customers. An
innovative online facility ''''IDBI eTrade'''' was launched during the year
for enabling customers to place online requests for various TF products
in a paperless mode and hassle-free manner.
Your Bank''''s overseas branch at the Dubai International Financial Centre
(DIFC) provides a wide-range of corporate banking services, including
External Commercial Borrowings (ECB), Foreign Currency Loans (FCL) and
syndication of ECB/ FCL, and trade finance products. Your Bank is also
exploring opportunities to expand its presence internationally.
The detailed descriptive of the Bank''''s business initiatives undertaken
during the year is contained in the Management Discussion and Analysis
section of the Annual Report.
Considering CSR interventions as an investment in building corporate
reputation and employee engagement, your Bank has put in place a Board
approved CSR policy in compliance with Companies Act, 2013. Through its
CSR interventions, your Bank has been, inter alia, contributing towards
promotion of healthcare, improved access to sanitation facilities,
advancement of vocational and employable skills, enhancement of
livelihood opportunities for disadvantaged strata of the society,
supplementing environmental sustainability and holistic development of
villages.
Board of Directors
Your Bank''''s Board of Directors is broad-based and its constitution is
governed by the provisions of the Banking Regulation Act, 1949, the
Companies Act, 2013, the Articles of Association of your Bank and the
requirements of Corporate Governance, as envisaged in SEBI (LODR)
Regulations, 2015. The Board functions directly as well as through
various Board Committees constituted to provide focussed governance in
the important functional areas of your Bank.
As on March 31, 2016, the Board comprised of seven Directors, including
Managing Director and CEO (MD & CEO), Deputy Managing Director (DMD),
one Non- Executive Director and four Independent Directors. Shri Kishor
Kharat, Managing Director & CEO as Executive Director, Shri B.K. Batra,
Dy Managing Director as Executive Director, Ms. Snehlata Shrivastava,
Central Government official Nominee as Non-Executive Director, Shri S.
Ravi, Shri Ninad Karpe, Shri Pankaj Vats and Shri Gyan Prakash Joshi as
Independent Directors constituted the Board as on March 31, 2016. The
present strength of seven Directors on the Board, as against
constitution for the maximum strength of 13 Directors provided for
under Article 116 (1), meets the requirement of Article 114 (a) of the
Articles of Association.
Apex Committees
The Board has a total of sixteen committees, namely, Audit Committee of
the Board, Customer Service Committee, Business Review Committee,
Information Technology Committee, Executive Committee, Remuneration
Committee, Stakeholders'''' Relationship Committee, Nomination Committee,
Frauds Monitoring Committee, HR Steering Committee, Risk Management
Committee, Recovery Review Committee, Corporate Social Responsibility
Committee, Independent Directors'''' Committee, Non-Cooperative Borrowers''''
Review Committee and Wilful Defaulters Review Committee, to oversee
various functional aspects of your Bank''''s business and operations.
Corporate Governance
Your Bank is committed to adopting the best corporate governance
practices. It believes that proper corporate governance is not just a
requirement for regulatory compliance, but also a facilitator for
enhancement of stakeholders'''' value. The details of your Bank''''s
corporate governance practices are given in this Annual Report as a
separate section under Corporate Governance Report.
Business Responsibility Report
The Securities and Exchange Board of India (SEBI), vide its
notification in The Gazette of India SEBI/LAD-NRO/ GN/2015-16/27 dated
December 22, 2015, has mandated the inclusion of Business
Responsibility (BR) Report as part of the Annual Report for Top 500
listed entities based on market capitalisation at BSE and NSE. The BR
Report should describe initiatives taken by the listed entity from an
environmental, social and governance perspective. The Bank''''s Business
Responsibility Report has been hosted on the website of the Bank
(www.idbi.com).
Statement under Rule 5 of the Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014
There were no personnel in your Bank''''s services, during the financial
year under review, who received remuneration over Rs. 60 lakh annually.
Besides, there were no personnel in the service of the Bank for a part
of the year who received remuneration in excess of Rs. 5 lakh per
month. Further, there was no personnel employed throughout the
financial year or part thereof who was in receipt of remuneration at a
rate, which in the aggregate, was in excess of that drawn by Managing
Director & CEO or Deputy Managing Director of the Bank and who held by
himself or along with his spouse and dependent children, not less than
2% of the equity shares of the Bank.
Conservation of Energy, Technology Absorption, Foreign Exchange
Earnings and Outgo
The provisions of Section 134(3)(m) of the Companies Act, 2013 read
with Rule 8(3) of the Companies (Accounts) Rules, 2014 are not
applicable to your Bank. However, your Bank has been increasingly using
information technology in its operations.
Directors'''' Responsibility Statement
The Board of Directors, hereby, declares and confirms that:
a. In the preparation of the annual accounts, the applicable
accounting standards had been followed along with proper explanation
relating to material departures;
b. The Directors had selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the
Bank at the end of the financial year and of the profit and loss of the
Bank for that period;
c. The Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 2013 for safeguarding the assets of
the Bank and for preventing and detecting fraud and other
irregularities;
d. The Directors had prepared the annual accounts on a going concern
basis;
e. The Directors had laid down internal financial controls to be
followed by the Bank and that such internal financial controls are
adequate and were operating effectively; and
f. The Directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were
adequate and operating effectively.
Acknowledgements
Your Bank''''s Board of Directors is sincerely grateful to the Government
of India, Reserve Bank of India (RBI), Securities and Exchange Board of
India (SEBI), Insurance Regulatory and Development Authority of India
(IRDA) and all other statutory/ regulatory authorities for their
valuable co-operation and guidance. The Board also acknowledges, with
gratitude, the co-operation and support received from various State
Governments and other banks/ financial institutions. The Board thanks
various multilateral institutions and international banks/ institutions
for their periodic support. The Board takes this opportunity to put on
record its deep sense of gratitude to its loyal shareholders and
customers for extending their support during the year, and looks
forward to their continued association in the years ahead. During the
financial year, the Bank has received various recognitions and
accolades for its excellence in the banking domain. The Board is
thankful to all such organisations/ agencies for formally recognising
the Bank''''s efforts. The Board appreciates the sincere and devoted
services displayed by its entire staff and highly values their
commitment in improving your Bank''''s performance.
[B.K. Batra] [Kishor Kharat]
Deputy Managing Director Managing Director & CEO
(DIN-00015732) (DIN-07266945)
Place: Mumbai
Date : May 20, 2016
Dear Members,
The Bank''s Board of Directors is pleased to present the Report on
the business and operations for the financial year ended March 31,2015.
In 2014-15, the Bank strived to improve its performance on all fronts
despite confronting significant challenges emanating from the
macroeconomic environment as well as various other sector-specific
factors. The Bank surmounted these challenges through strategic
initiatives which were complemented by organisational restructuring and
mission-mode approach to catalyse growth in its business. Furthermore,
the Bank continued to expand its reach across the country by rapidly
adding to its branch and ATM network. With the objective of ensuring
highest level of customer satisfaction, the Bank focused on optimizing
its customer service to provide hassle-free experience to all its
customers. The Bank was also able to expand its customer base by
expanding its network which allowed easier accessibility as also
offering an array of customized products and services with innovative
features to meet the customers'' needs in a suitable manner. As on
March 31, 2015, aggregate deposits and advances touched Rs. 2,59,836
crore and Rs. 2,08,377 crore, reflecting a growth of 10% and 5%,
respectively, over the previous year. Your Bank''s performance
highlights for the period under review are presented in Table 1.
Profit and Appropriations
During 2014-15, your Bank''s gross income amounted to Rs. 32,162 crore,
comprising interest income at Rs. 28,154 crore and other income at Rs.
4,008 crore. Interest expenses stood at Rs. 22,406 crore and operational
expenses at Rs. 4,027 crore, accounting for total expenditure (excluding
provisions and contingencies). Total provisions during the year were at
Rs. 4,855 crore, which mainly include Rs. 3,480 crore towards provision for
bad and doubtful debts and investments. During 2014-15, your Bank''s
operations resulted in Profit Before Tax (PBT) of Rs. 1,287 crore. After
provision of Rs. 414 crore towards tax, Profit After Tax (PAT) amounted
to Rs. 873 crore. The appropriation of PAT, as approved by the Board of
Directors, is given in Table 2.
Table 1 : Financial Highlights
(Rs. In crore)
As on March 31 2014 2015
Capital 1,603.94 1,603.96
Reserves & Surplus 22,034.92 22,712.96
Deposits 2,35,773.63 2,59,835.97
Borrowings 60,146.29 61,832.98
Other Liabilities & Provisions 9,429.57 10,044.69
Total Liabilities 3,28,988.36 3,56,030.56
Cash & Balances with RBI 12,711.11 13,035.77
Balances with Banks & Money at Call
& Short Notice 4,106.80 1,489.99
Investments 1,03,773.50 1,20,963.21
Advances 1,97,686.01 2,08,376.87
Fixed & Other Assets 10,710.94 12,164.73
Total Assets 3,28,988.36 3,56,030.56
For the period 2013-14 2014-15
Total Income 29,576.27 32,161.62
Total Expenses (other than provisions) 23,894.88 26,433.52
Provisions (other than tax) 3,940.26 4,440.78
Profit Before Tax 1,741.13 1,287.33
Provision for Tax* 619.73 413.94
Profit After Tax 1,121.40 873.39
* Net of Current Income Tax and Deferred Income Tax
Table 2 : Appropriation of Profits
(Rs. In crore)
For the year ended March 31 2014 2015
Net Profit/(Loss) for the year 1,121.40 873.39
Profit/(Loss) brought forward 903.86 896.77
Profit available for Appropriations 2,025.26 1770.16
Appropriations
Transferred to Statutory Reserve 281.00 218.35
Transferred to Capital Reserve 9.32 229.07
Transferred to General Reserve 400.00 65.00
Transferred to Special Reserve created
and maintained u/s 36(1)(viii) of 250.00 200.00
IT Act, 1961
Dividend
- Equity Shares 160.41 120.30
- Tax on Dividend 27.76 25.25
Balance of Profit carried to Balance Sheet 896.77 912.19
For each share with face value of Rs. 10, Earnings Per Share (EPS) during
the year stood at Rs. 5.45, while Book Value per Share stood at Rs. 141.24
as on end-March 2015. The Directors have the pleasure in recommending
dividend at 75% on the fully paid-up equity share capital for 2014-15.
Report on the Performance and Financial Position of Subsidiaries and
Joint Venture included in the Consolidated Financial Statement
As required by Accounting Standard-21 issued by the Institute of
Chartered Accountants of India, the Bank''s consolidated financial
statements included in this Annual Report incorporate the accounts of
its subsidiaries and other consolidating entities.
The Bank holds more than 20%, but less than 50%, of equity capital of
five companies. In the opinion of management, the Bank does not have
any significant influence in these companies. Accordingly, these
companies have not been considered as "associate companies" and the
financial statements of these companies are not included in the
consolidated financial statements. Financial Statements of the Joint
Venture (IDBI Federal Life Insurance Company Ltd.) as incorporated in
these accounts are unaudited and subject to Audit Committee/Board
approval.
A statement pursuant to Section 129 of Companies Act, 2013 showing key
financials of the Bank''s subsidiaries/Joint Venture is included
separately in this Annual Report.
Material changes and commitments, if any affecting financial position
of IDBI Bank which have ocurred during the end of financial year and
the date of Board Report.
There are no material changes and commitments, affecting the financial
position of the Bank which has occurred between the end of the
financial year of the Bank i.e. March 31,2015 and the date of the
Directors'' Report i.e May 26, 2015.
The details in respect of adequacy of internal financial controls with
reference to the financial statements.
The Bank has adequate internal controls and processes in place with
respect to its financial statements which provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements. These controls and processes are driven through
various policies, procedures and certifications. The processes and
controls are reviewed periodically.
Capital Adequacy
Your Bank computes regulatory capital requirement for Credit, Market &
Operational Risks as prescribed under the Pillar-1 guidelines of the
Basel III framework. With regard to the requirement for higher quality
capital highlighted under Basel III norms, your Bank, at present, has
sufficient common equity to meet the regulatory requirements as
stipulated in the guidelines.
As on March 31, 2015, the Capital to Risk-weighted Assets Ratio (CRAR)
of your Bank was 11.76% which is above the minimum regulatory
requirement of 9.0%. Your Bank''s Common Equity Tier 1 (CET 1) ratio
was 729% which is also above the minimum applicable CET 1 ratio of 5.5%
stipulated by RBI. The Tier-I ratio stood at 8.18% as on March 31, 2015
against the regulatory requirement of 70%.
Your Bank has a Board approved policy on Internal Capital Adequacy
Assessment Process (ICAAP), in line with the Pillar-2 norms of the
Basel III framework, which enables the Bank to internally assess and
quantify those risks that are not covered under Pillar-1 in addition to
developing appropriate strategies to manage risks under normal and
stress conditions. Your Bank has adopted a Disclosure Policy in
accordance with the Pillar-3 requirements under the Basel norms and
consequently, publishes disclosures on the Bank''s website at end of
each quarter.
Business Strategy
During the year, your Bank continued to focus on rebalancing its
business mix, through increasing accent on retail business and priority
sector lending, with the intent of meeting regulatory requirements as
well as de- risking its business portfolio. As a critical enabler, the
Bank recalibrated its organization structure by adopting a
decentralized approach by dividing the offices across the country into
zones. Simultaneously, the zonal offices were vested with greater
powers to facilitate better decision- making to drive the Bank''s
business growth. A mission- mode approach has been adopted for
strengthening the Bank''s position in retail banking as well as
priority sector business while continuing to maintain predominance in
industry and infrastructure financing. The Bank offers an entire gamut
of products and services to cater to the financial needs of all
segments of the society under one roof. These products and services are
periodically reviewed and modified as well as innovative and customized
features are introduced in tandem with the constantly evolving demand
of your Bank''s customers to ensure high level of customer
satisfaction and consequently, drive growth in its business.
Key Business Initiatives
As July 1, 2014 marked the completion of fifty epoch- making years of
the Bank''s existence, various activities were planned as a part of
the Golden Jubilee celebrations, commencing from the date. The
opportunity was used to establish active engagement with various
stakeholders of the Bank. The stakeholder engagement included
activities aimed at customers (both Retail and Corporate), employees,
society at large and opinion makers. The accent of all the activities
was to reinforce the IDBI Bank brand identity, reiterate that we are a
true friend of all our stakeholders which finally led to
top-of-the-mind recall for the brand. The celebrations were kicked-off
at a flagship event at Head Office on July 1, 2014. As a part of the
celebrations, the Bank launched its Signature Debit Card, e-inaugurated
50 branches, inaugurated Zonal Intranet Section and launched its mobile
banking services, among other such initiatives. Simultaneous events
were held at all nine zonal headquarters of the Bank (viz. Mumbai,
Delhi, Kolkata, Chennai, Ahmedabad, Bhuwaneshwar, Bengaluru, Chandigarh
and Nagpur). To mark the occasion, a special logo was designed and was
displayed prominently in the Bank''s ATMs, calendar, stationery and
other such collaterals. The entire set of activities was planned with
the theme "celebration of 50 years of friendship" with the customer
and was used as an extension of the brand positioning as ''Bank Aisa
Dost Jaisa'' as well as synchronizing its advertising campaigns,
including creation of IDBI Anthem, with the Golden Jubilee theme.
Your Bank continues to target a progressively larger retail business
portfolio to facilitate a more balanced business mix, in keeping with
its intended positioning as a full- service commercial bank. Towards
this end, the Bank continued to rapidly expand its branch and ATM
network to establish wide presence across the country. As on March 31,
2015, your Bank''s network stood at 1717 branches (includes one
overseas branch) marking an addition of 329 branches during the year.
Pursuant to the objective of expanding the share of retail business in
the overall business mix, your Bank currently offers a bouquet of
Liability, Asset, Capital Market and Third Party products which are
primarily aimed at meeting the customized needs of customers in the
Retail Banking segment. The Bank''s important products and services
for the retail segment have been listed in the Corporate Overview
Section of this Report.
Your Bank undertook organizational restructuring by merging its
Priority Sector Group with its Retail Banking Group to provide for a
more focussed approach to Priority Sector Lending (PSL) across all its
branches by leveraging its growing branch network for augmenting
priority sector business. The Bank has established 29 dedicated Credit
Processing Centers (CPCs) that are staffed with specially trained
personnel to expedite credit process.
The Bank has continued to update and strengthen its numerous alternate
channels of delivery. Expanding the bouquet of its products, your Bank
launched Credit Card on Visa Platform in two variants, viz. Royale
(Visa Signature Card) for elite HNI customers and Aspire (Visa Platinum
Card) for other existing customers. Additionally, the Bank has launched
its e-lounge facility, which is an automated banking service designed
for delivering a wide range of banking services on 24x7 basis,
beginning with Mumbai and has expanded its reach in a number of major
centres across the country.
Your Bank''s Corporate Banking Group (CBG) has been structured as
CBG-I with mandate of looking after large- sized accounts and CBG-II
with mandate of looking after medium-sized accounts. CBG has presence
across the country. Your Bank''s CBG accords critical importance to
multi-product sales, both in assets and liabilities, in order to offer
a comprehensive portfolio of financial products and services and
maximise yield.
Actively providing project appraisal, debt syndication, structuring and
advisory services across various sectors, your Bank, during the year,
procured several mandates for appraisal and syndication of debt. Your
Bank has been consistently ranked as one of the leading debt
syndicators in India.
Your Bank conducts its Trade Finance (TF) business through its
full-fledged TF Centres (Authorized Dealer in Foreign Exchange) with
presence across the country. Furthermore, more than 60 Retail Banking
branches have been enabled for undertaking Inland TF Business (LCs/
BGs) so as to reach majority of domestic TF customers.
Your Bank has continued to pursue various legal/ non- legal recovery
efforts rigorously to improve asset quality and consequently, improve
its bottom-line.
Proactively engaging itself in Corporate Social Responsibility (CSR)
activities, the Bank has put in place a Board-approved CSR Policy which
provides the platform for undertaking interventions in areas such as
education, health, gender equality and socio-economic empowerment,
environmental sustainability, rural development projects, etc.. In
order to make an even greater impact on targeted strata of society,
your Bank, during the year, has not only been associated with deserving
organizations but also has been proactively involved with Government of
India''s Swachh Bharat Swachh Vidyalaya Abhiyan (SBSVA).
In cognizance of the imperative to ensure inclusive growth, your Bank,
in addition to various initiatives undertaken under Financial
Inclusion, actively participated in the Pradhan Mantri Jan Dhan Yojana
(PMJDY) which was launched as a National Mission on Financial Inclusion
by the Hon''ble Prime Minister on August 15, 2014. Under the
programme, your Bank opened 9.29 lakh accounts with facility of RuPay
Debit cards and has been extending overdraft facility of up to Rs.
5,000/- to the eligible account holders. Additionally, your Bank has
also contributed to IBA Corpus Fund for PMJDY which was created to fund
the PMJDY campaign.
Your Bank''s advertising and publicity initiatives intensified during
the year with focus on enhancing visibility and top- of-mind recall of
the Bank by augmenting its profile in the media and financial community
and thereby, reinforce stakeholder perceptions. Your Bank found
numerous mentions in Print, Electronic and Digital media with an
overall positive impression. The Bank''s advertisements, which
essentially depict its supportive role through the visual images of
everlasting friendship between kids while duly incorporating overall
theme of Golden Jubilee, were released as a national television
campaign and in print, Out of Home (OOH) and digital space. Various
other product-specific campaigns, which focused on different products
and services offerings of the Bank, were also launched to create
awareness amongst the customers - existing as well as prospective.
Your Bank recognises that in the banking sector, a strong Brand Equity
is extremely important for deepening and widening customer
relationships as also acquisition of new customers. Accordingly, your
Bank has invested on building a strong Brand Identity, reinforcing the
same through multiple initiatives. As a result, the Bank witnessed a
rise in its Brand Equity as reflected in brand valuation and rankings
which can be accredited to appropriate strategies, consistently
supported by brand development activities through advertisements,
internal communications and public relations. These strengths have been
recognized by leading global professional bodies and got reflected in
the high growth of Brand Value and ranking. Leading global research
organisations like Millward Brown (Brand Z) and Interbrand have come
out with their listing of top 50 brands in India across sectors. As per
Brand Z, IDBI Bank ranks 39th among the top 50 brands in the country
across sectors. As per recent Interbrand rankings, IDBI Bank ranks
37th among the top 50 brands in the country across sectors. The Brand
Finance Banking 500, published by Brand Finance, a leading global brand
consultant, evaluates and compares the value of the world''s leading
banking brands annually. As per the 2015 study, the valuation of IDBI
Bank Brand has increased by 79% as at December 31, 2014 over the
previous year. Globally, the ranking of IDBI Bank has improved from 351
to 255 while in India the ranking has improved from 11th to 9th
position. As per ''Brand Trust Report 2015, IDBI Bank''s Brand Trust
ranking has shown a considerable improvement over the past years. The
Bank was ranked 159th in 2013, 85th in 2014 and 64th in 2015 as per the
latest report released recently. In the BFSI category, the Bank was
ranked at the 5th position while among the PSU Banks, it was ranked at
the 2nd position.
Gyan Sangam-A Step towards New Banking Paradigm
Ministry of Finance, Government of India, had organised the Bankers''
Retreat - Gyan Sangam for Public Sector Banks (PSBs) on January 2-3,
2015 at Pune to take forward the Government''s commitment to reforms
in the financial sector. Six working groups were formed therein for
deliberating and making recommendations on following issues relating to
banking sector viz. (i) Leveraging Technology and Digital to improve
banking operations efficiency, (ii) Rethinking Priority Sector Lending,
(iii) Achieving Universal Financial Inclusion, (iv) Improving Risk
Management, Asset Quality and Recovery, (v) Building a robust people
strategy for PSBs and (vi) Consolidation and Restructuring of PSBs for
better efficiency, governance and capital efficiency. The Working
Groups made various recommendations which were summarized into two
categories with separate actionable for the PSBs and policymakers,
under two different time frames 0-12 months and one-three years. Your
Bank is drawing up a detailed action plan to systematically take
forward actionable on the part of the Bank.
The details of your Bank''s key initiatives during 2014- 15 are
featured under the Management Discussion and Analysis section of this
Annual Report.
Board of Directors
Your Bank''s Board of Directors is broad-based and its constitution is
governed by the provisions of the Banking Regulation Act, 1949, the
Companies Act, 2013, the Articles of Association of your Bank and the
requirements of Corporate Governance, as envisaged in clause 49 of the
Listing Agreement. The Board functions directly as well as through
various Board Committees constituted to provide focused governance in
the important functional areas of your Bank.
As on March 31, 2015, the Board comprised of eight Directors, including
Chairman and Managing Director (CMD), two Deputy Managing Directors
(DMDs), one Non-Executive Director and four Independent Directors.
Shri M.S. Raghavan, Chairman & Managing Director as Executive Director,
Shri B.K. Batra and Shri M.O. Rego, Dy. Managing Directors as
Executive Directors, Ms. Snehlata Shrivastava, Central Government
official Nominee as
Non-Executive Director, Shri P.S. Shenoy, Shri S. Ravi, Shri Ninad
Karpe and Shri Pankaj Vats as Independent Directors constituted the
Board as on March 31,2015.
As per Government of India''s directives, it is proposed to separate
the post of CMD into two posts of a Chairman and a Managing Director &
CEO by amendment of Article 116(1)(a) at the ensuing AGM.
Apex Committees
The Board has a total of sixteen committees, namely Audit Committee of
the Board, Customer Service Committee, Business Review Committee,
Information Technology Committee, Executive Committee, Remuneration
Committee, Stakeholders'' Relationship Committee, Nomination
Committee, Fraud Monitoring Committee, HR Steering Committee, Risk
Management Committee, Recovery Review Committee, Corporate Social
Responsibility Committee, Independent Directors'' Committee,
Non-Cooperative Borrowers'' Review Committee, Wilful Defaulters Review
Committee, to oversee various functional aspects of your Bank''s
business and operations.
Corporate Governance
Your Bank is committed to adopting the best corporate governance
practices. It believes that proper corporate governance is not just a
requirement for regulatory compliance, but also a facilitator for
enhancement of stakeholders'' value. The details of your Bank''s
corporate governance practices are given in this Annual Report as a
separate section under Corporate Governance Report.
Statement under Section 134 of the Companies Act, 2013 read with Rule 5
of the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014
There were no personnel in your Bank''s services, during the financial
year under review, who received remuneration over Rs. 60 lakh annually.
Besides, there were no personnel in the service of the Bank for a part
of the year who received remuneration in excess of Rs. 5 lakh per month.
Further there was no personnel employed throughout the financial year
or part thereof who was in receipt of remuneration at a rate, which in
the aggregate, was in excess of that drawn by CMD or DMDs of the Bank
and who held by himself or along with his spouse and dependent
children, not less than two per cent of the equity shares of the Bank.
Conservation of Energy, Technology Absorption, Foreign Exchange
Earnings and Outgo
The provisions of Section 134(3)(m) of the Companies Act, 2013 read
with Rule 8(3) of the Companies (Accounts) Rules, 2014 are not
applicable to your Bank. However, your Bank has been increasingly using
information technology in its operations.
Directors'' Responsibility Statement
The Board of Directors, hereby, declares and confirms that:
a. In the preparation of the annual accounts, the applicable accounting
standards had been followed along with proper explanation relating to
material departures;
b. The directors had selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Bank at the end of the financial year and of the profit and loss of
the Bank for that period;
c. The directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the Bank and for
preventing and detecting fraud and other irregularities;
d. The directors had prepared the annual accounts on a going concern
basis;
e. The directors had laid down internal financial controls to be
followed by the Bank and that such internal financial controls are
adequate and were operating effectively; and
f. The directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were
adequate and operating effectively.
Acknowledgements
Your Bank''s Board of Directors is sincerely grateful to the
Government of India, Reserve Bank of India (RBI), Securities and
Exchange Board of India (SEBI), Insurance Regulatory and Development
Authority of India (IRDA) and all other Statutory/ Regulatory
Authorities for their valuable co-operation and guidance. The Board
also acknowledges, with gratitude, the co-operation and support
received from various State Governments and other banking/ financial
institutions. The Board thanks various multilateral institutions and
international banks/ institutions for their periodic support. The Board
takes this opportunity to put on record its deep sense of gratitude to
its loyal shareholders and customers for extending their support during
the year, and looks forward to their continued association in the years
ahead. During the financial year, the Bank has received various
recognitions and accolades for its excellence in the banking domain.
The Board is thankful to all such organisations/agencies for formally
recognising the Bank''s efforts. The Board appreciates the sincere and
devoted services displayed by its entire staff and highly values their
commitment in improving your Bank''s performance.
Place: Mumbai [M.S. Raghavan]
Date : May 26, 2015 Chairman and Managing Director
