Your Directors have pleasure in presenting the Annual Report of the Bank along with theAudited Statement of Accounts the Profit and Loss accounts and the cash flow statementfor the year ended March 31 2019.
1. PERFORMANCE HIGHLIGHTS
Total Business of the Bank stood at Rs. 467584 crore as at March 31 2019compared to Rs. 472323 crore as at March 31 2018.
Total Deposits stood at Rs. 299855 crore in March 31 2019 as against Rs. 294839crore in March 31 2018.
Total Advances of the Bank stood at Rs. 167729 crore in March 31 2019 asagainst Rs. 177484 crore in March 31 2018
Total Income for the financial year ended March 31 2019 was Rs. 25052 crore ascompared to Rs. 26659 crore for the financial year ended March 31 2018.
Non-Interest Income of the Bank stood at Rs. 2413 crore for the financial yearended March 31 2019 compared to Rs. 2623 crore for the financial year ended March 312018.
Operating Profit of the Bank increased to Rs. 3127 crore for the financial yearended March 31 2019 as compared to Rs. 2733 crore for the corresponding previousfinancial year ended March 31 2018 showing increase of 14.42%.
The Bank has incurred Net Loss of Rs. 5641 crore for the financial year endedMarch 31 2019 as compared to Net Loss of Rs. 5105 crore during previous financial yearended March 31 2018 primarily due to higher NPA provisions higher slippages/ ageing andadditional provision in NCLT accounts significant decline in Trading Profit
on Investments etc.
Expenses on employees decreased by Rs. 471 crore during the financial year endedMarch 31 2019 to Rs. 3566 crore from Rs. 4037 crore in the previous financial yearended March 31 2018.
Capital Adequacy Ratio (as per Basel-II) stood at 10.13% with Tier I at 5.70%and Tier II 4.43% for the financial year ended March 31 2019. Capital Adequacy Ratio (asper Basel-III) stood at 9.61% with Tier I at 7.49% and Tier II 2.12% for the financialyear ended March 31 2019.
Net worth stood at Rs. 16062.89 crore.
Cash Recovery increased to Rs. 5161 crore in the financial year ended March 312019 as compared to Rs. 2403 crore in the previous financial year ended March 31 2018.
Gross NPA to Gross Advances improved to 19.29% as on March 31 2019 from 21.48%as on March 31 2018.
Net NPA to Net Advances reduced to 7.73% as on March 31 2019 as against 11.10%as on March 31 2018.
Provision Coverage Ratio improved to 76.60% as on March 31 2019 from 63.31% ason March 31 2018.
Net Interest Margin (NIM) improved to 2.54% in the financial year ended March31 2019 from 2.47% in the Financial Year ended March 31 2018.
Business per Employee stood at Rs. 12.78 crore in the financial year ended March31 2019.
Return on Assets (ROA) is (1.70)% for the Financial Year ended March 31 2019.
The credit deployment under priority sector increased to Rs. 83201 crore in thefinancial year ended March 31 2019 with a growth of Rs. 366 crore over financial yearended March 31 2018. However to take an advantage of excessive lending over ANBC inPriority Sector credit Bank undertook sale/purchase transactions in PSLCs. During theyear Bank sold PLSCs worth Rs. 27436 crore under PS Advances and purchased PSLCs worthRs. 5885 crore under MSME portfolio. Thus net Sale as at the close of FY was Rs. 21551crore. There is outstanding of RIDF to the tune of Rs. 4907.27 crore under PrioritySector of which Rs. 3075.97 crore under Agriculture as on 31.03.2019.
Agriculture Advance of the Bank stood at Rs. 35655 crore for the financial yearended March 31 2019 as against Rs. 30776 crore for the previous financial year endedMarch 31 2018 registering y-o-y growth of 15.85%.
MSME Advances for the Financial Year ended March 31 2019 stood at Rs32090crore without PSLC and Investment in SIDBI and Mudra Ltd. consisting 19.13% of the totalLoans & Advances.
Retail Loans increased to Rs. 48666 crore in financial year ended March 312019 from Rs. 48123 crore in financial year ended March 31 2018.
Housing Loan portfolio of the Bank stood at Rs. 23301 crore for the financial yearended March 31 2019 as against Rs. 21392 crore for financial year ended March 31 2018registering y-o-y growth of 8.92%. Housing Loan Portfolio constitutes 47.88 % of the totalRetail Portfolio as on March 31 2019.
Bank has established 46 RSETIs in 9 States of the country viz. MadhyaPradesh(18) Bihar(9) Maharashtra(6) Uttar Pradesh(5) West Bengal(3) Chhattisgarh(2)Rajasthan(1) Orissa(1) and Assam(1). During the year 201819 the RSETIs conducted 1098training programmes and imparted training to 31274 candidates. Out of this 23142(i.e.74%) trainees were settled through bank credit wage settlement and self-finance.Credit linkage of settled candidates achieved is 13227 i.e. 43%.
Bank has 3 RRBs as on 31st March 2019 in 3 states covering 48 districts with anetwork of 1629 branches.
Under Financial Inclusion Bank has covered 4330 villages with population above 2000and 18376 villages with population below 2000. Bank has covered all these villagesthrough 6387 BC Agents. Bank has opened 177 Urban Financial Inclusion centres. Bank hasfurther opened 202 lakh Basic Saving Bank Deposit Accounts (BSBDA) through its BCs andBranches. Total balance in these accounts is Rs. 3307.16 crore as on 31st March 2019.
Total earning from Bancassurance business is Rs. 22 crore for the financial year endedMarch 31 2019.
As on 31st March 2019 Bank has network of 4659 branches spanning 63.32%branches in rural & semi-urban areas 3966 ATMs 10 satellite offices and 1 ExtensionCounter across the country.
2. INCOME & EXPENDITURE
Details of income and expenditure for the financial year 2018-19 are given hereunder:
| || || || ||(Rs. in Crores) |
| ||31.03.2019 ||31.03.2018 ||Variation ||% |
|1 INTEREST INCOME ||22639 ||24036 ||(1397) ||(5.81) |
|- Advances ||12950 ||14478 ||(1528) ||(10.55) |
|- Investments ||8454 ||7138 ||1316 ||18.44 |
|- Others ||1235 ||2420 ||(1185) ||(48.97) |
|2 NON INTEREST INCOME ||2413 ||2623 ||(210) ||(8.01) |
|3 TOTAL INCOME (1+2) ||25052 ||26659 ||(1607) ||(6.03) |
|4 INTEREST EXPENDED ||15866 ||17519 ||(1653) ||(9.44) |
|- Deposits ||15276 ||16222 ||(946) ||(5.83) |
|- Others ||590 ||1297 ||(707) ||(54.51) |
|5 OPERATING EXPENSES ||6059 ||6407 ||(348) ||(5.43) |
|- Establishment ||3565 ||4037 ||(472) ||(11.69) |
|- others ||2494 ||2370 ||124 ||5.23 |
|6 TOTAL EXPENSES (4+5) ||21925 ||23926 ||(2001) ||(8.36) |
|7 SPREAD (1-4) ||6773 ||6517 ||256 ||3.93 |
|8 OPERATING PROFIT (3-6) ||3127 ||2733 ||394 ||14.42 |
|9 PROVISIONS ||8768 ||7838 ||930 ||11.87 |
|10 PROVISIONS FOR TAX ||(2529) ||(2791) ||262 ||(9.39) |
|11 NET PROFIT/(LOSS) ||(5641) ||(5105) ||(536) || |
Details of Total Provisions of Rs. 8768 crore charged to the Profit and Loss Accountduring the financial year 2018-19 vis-a-vis previous financial year are detailed as under:
| || || ||(Rs. in Crores) |
| ||31.03.2019 ||31.03.2018 ||Variation |
|Provisions for Standard Assets ||(115) ||7 ||(122) |
|Provisions for NPAs ||11030 ||10543 ||487 |
|Provisions for Restructured Accounts ||(425) ||(951) ||526 |
|Provision on Investments ||984 ||799 ||185 |
|Provisions for Taxes ||(2529) ||(2791) ||262 |
|Others ||(177) ||231 ||(408) |
|TOTAL ||8768 ||7838 ||930 |
4. PROFITABILITY RATIOS
| || |
| ||31.03.2019 ||31.03.2018 |
|Cost of Deposits ||5.21 ||5.53 |
|Cost of Funds ||5.28 ||5.79 |
|Yield on Advances ||7.28 ||8.31 |
|Yield on Investments ||7.15 ||7.14 |
|Net Interest Margin ||2.54 ||2.47 |
|Cost to Income Ratio ||65.96 ||70.10 |
5. BUSINESS RATIOS
| || |
| ||31.03.2019 ||31.03.2018 |
|Interest Income to Average Working Fund (AWF) ||6.81 ||7.59 |
|Non-Interest Income to AWF ||0.73 ||0.83 |
|Operating Profit to AWF ||0.94 ||0.86 |
|Return on Average Assets ||(170) ||(161) |
|Business Per Employee (Rs. In crore) ||12.78 ||12.71 |
|Net Profit per Employee (' In lakh) ||(15.55) ||(13.86) |
6. CAPITAL TO RISK WEIGHTED ASSETS RATIO (CRAR)
The components of Capital Adequacy Ratio were as under:
| ||31.03.2019 ||31.03.2018 |
| ||Basel-III ||Basel-III |
|CET 1/Tier-1 ||7.49 ||7.01 |
|Tier-2 ||2.12 ||2.03 |
|Capital Adequacy Ratio ||9.61 ||9.04 |
7. NET LOSS
The Bank has incurred net loss amounting to Rs. 5641 crore during the financial yearended March 31 2019. Accordingly Board of Directors has not recommended any dividend onequity shares for the Financial Year 2018-19.
8. CHANGES IN THE BOARD DURING THE YEAR
During the year under review the following changes took place in the Board ofDirectors of the Bank:
Shri Tapan Ray was appointed as Part-time Non-official as well as Non-executiveChairman of the Bank in terms of Department of Financial Services Government of IndiaNotification w.e.f. 23rd May 2018.
Shri Rajeev Rishi Managing Director & Chief Executive Officer ceased to bethe Director of the Bank w.e.f. 1st August 2018.
Shri Pallav Mohapatra was appointed as Managing Director & Chief Executive Directorof the Bank in terms of Department of Financial Services Government of IndiaNotification w.e.f. 21st September 2018.
Shri Govind Mohan ceased to be Government of India Nominee Director of the Bankw.e.f. 14th May 2018.
Dr. Bhushan Kumar Sinha was appointed as Government of India Nominee Director ofthe Bank in terms of Department of Financial Services Government of India Notificationw.e.f. 14th May 2018.
Shri B.K. Divakara Executive Director ceased to be the Director of the Bankw.e.f. 23rd January 2019.
Shri Alok Srivastava was appointed as Executive Director of the Bank in terms ofDepartment of Financial Services Government of India Notification w.e.f. 23rd January2019 for a period of 3 years.
Shri K.R. Patel Shareholder Director ceased to be the Director of the Bankw.e.f. 1st July 2018.
Smt. Mini Ipe was elected as Shareholder Director of the Bank w.e.f. 1st July2018.
The Board places on record its appreciation of valuable contribution extended by ShriRajeev Rishi Shri Govind Mohan Shri B.K. Divakara and Shri K.R. Patel who ceased to bethe Directors of the Bank during the Financial Year 2018-19.
8.1 Government of India Ministry of Finance Department of Financial Services videNotification dated 26th April 2019 nominated Shri Thomas Mathew Regional DirectorReserve Bank of India Jammu as RBI Nominee Director in place of existing RBI NomineeDirector Shri Shekhar Bhatnagar on the Board of our Bank with immediate effect (i.e.w.e.f. 26th April 2019) and untill further orders. The Board places on record itsappreciation of valuable contribution extended by Shri Shekhar Bhatnagar during his tenureas RBI Nominee Director of the Bank.
9. RAISING OF CAPITAL THROUGH EMPLOYEE STOCK PURCHASE SCHEME (ESPS)
During the financial year 2019-20 the Bank raised Rs. 212.53 crore Capital from theeligible employees under Employee Stock Purchase Scheme (ESPS). The issue under ESPS wasopened for subscription on 19th March 2019 and closed on 29th March 2019. The Capitalfunds of Rs. 212.53 crore was kept in Share Application Money Account as on March 312019. The Bank allotted requisite 78716224 equity shares to 26071 eligible employeeson 15th May 2019.
10. WHISTLE BLOWER POLICY
Bank follows Central Vigilance Commission Guidelines on Whistle Blower complaints underPublic Interest Disclosure and Protection of Informers (PIDPI) resolution. Bank also has aweb based portal in the name of "Cent Vigil" to facilitate reportingmalpractices by employees and directors without revealing their identities which would beknown to the Chief Vigilance Officer only. Directors and Employees may also approachChairman of the Audit Committee on need basis. This helps to curb malpractices preventfrauds and boost up morale of the employees.
11. PROMPT CORRECTIVE ACTION
Reserve Bank of India vide their letter dated June 13 2017 has put the Bank underPrompt Corrective Action (PCA) in view of high net NPA and negative Return on Assets. Bankbelieves that corrective measures arising out of the PCA will help in improving overallperformance of the Bank.
12. BUSINESS RESPONSIBILITY REPORT
Business Responsibility Report as stipulated under Regulation 34 of the Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 has been hosted on the website of the Bank (www.centralbankofindia.co.in). Any memberinterested in obtaining a physical copy of the same may write to the Company Secretary atthe Head Office of the Bank.
13. DIRECTORS' RESPONSIBILTY STATEMENT
The Directors confirm that in the preparation of the annual accounts for thefinancial year ended March 31 2019:
The applicable accounting standards have been followed along with properexplanation relating to material departure if any;
The accounting policies framed in accordance with the guidelines of the ReserveBank of India were consistently applied;
Reasonable and prudent judgement and estimates were made so as to give a trueand fair view of the state of affairs of the Bank at the end of the financial year and ofthe profit/ loss of the Bank for the financial year ended March 31 2019;
Proper and sufficient care was taken for the maintenance of adequate accountingrecords in accordance with the provisions of the applicable laws governing banks in India;
The accounts have been prepared on a going concern basis;
Internal Financial Control are adequate and were operating effectively; and
Proper systems have been devised to ensure compliance with the provisions of allapplicable laws and these systems were adequate and operating effectively.
14. CORPORATE GOVERNANCE
The Board of the Bank is committed to adapt Corporate Governance practices in letterand spirit. The Bank has adopted well documented system and practice on CorporateGovernance.
The Board of Directors places on record its gratitude to the Government of IndiaReserve Bank of India and the Securities and Exchange Board of India for their valuableguidance and support. The Board acknowledges with gratitude the unstinted support andfaith of its customers and shareholders. The Board wishes to place on record itsappreciation of the dedicated services and contribution made by members of staff.
| ||For and on behalf of the Board of Directors |
| ||Sd/- |
|Place : Mumbai ||Tapan Ray |
|Date : May 22 2019 ||Chairman |